What's New from the Charities Directorate of CRA

March 15, 2010

2010 Federal Budget enhances anti-avoidance rules for Canadian charities

The 2010 Canadian Federal budget had some changes to the Income Tax Act to prevent transactions by registered Canadian charities that “may reasonably be considered that a purpose of the transaction was to avoid or delay unduly the expenditure of amounts on charitable activities”.

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March 11, 2010

10 Most Useful Features of the CRA’s Charities Directorate Website for Canadian Charities

Here is a copy of an article I wrote for the newsletter “Charitable Thoughts” of the Ontario Bar Association Charity and Not-for-Profit Law Section

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March 04, 2010

Canadian Budget 2010 announces disbursement quota reform for Canadian charities

The Canadian federal government announced disbursement quota reform in the 2010 Budget to remove the 80/20 expenditure requirement for registered Canadian charities.  For many charities this will have no real impact - they were handily satisfying their disbursement quota requirements and for those that were not (except in extreme cases) CRA was not using the DQ to revoke charitable status.  As one observer noted on the changes “No more 80/20 ordinary gift. No more enduring property, including 10 year gifts. No more specified gifts. No more intercharity transfer rules based on original DQ designation. Just a simple obligation to use the equivalent of 3.5% based on previous 24 month market average for charitable purposes. ... The 3.5% obligation doesn’t kick in for charitable organizations until there is $100k in assets, while for foundations it stays at $25k.”  We will probably have a revised T3010 at some point to reflect these changes and one can expect with the simpler formula that in the future CRA will more vigorously enforce the DQ provisions as this will be easier to understand.  There is no cost associated with this change and a number of other proposals to increase tax incentives from some organizations were not included in the budget, which makes sense in light of the difficult fiscal situation in addition to other reasons.

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March 04, 2010

Charities Directorate of CRA now displaying T3010 information for revoked charities

The CRA has just announced that “The Charities Directorate is now displaying T3010 returns for revoked charities, and detail pages for annulled charities in the Charities Listings.”

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March 02, 2010

CRA comments on gift to charity under will that is poorly drafted

This letter from CRA is a reminder that when leaving funds to a registered charity under a will the drafting is important.

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February 24, 2010

International Pentecostal Ministry Fellowship of Toronto v. The Queen - (FCA) important case

In International Pentecostal Ministry Fellowship of Toronto v. The Queen (FCA) located at http://decisions.fca-caf.gc.ca/en/2010/2010fca51/2010fca51.html the Federal Court of Appeal confirmed CRA’s jurisdiction over Canadian charities registered under the Income Tax Act (Canada).  In quite a strongly worded statement the decision states “We have not been persuaded that there is any merit to the Appellant’s argument that the provisions of the ITA dealing with the registration and deregistration of charities are an unconstitutional infringement on provincial legislative authority. In our view, these provisions relate, in their pith and substance, to federal taxation, and accordingly they are intra vires the Parliament of Canada under subsection 91 (3) of the Constitution Act, 1867. Both the advantages of registration and the drawbacks of revocation relate solely to the tax treatment of charities and their donors. They do not impermissibly affect the affairs of charities in any other way, nor do they impede provinces from otherwise regulating charities.”  The court also rejected the charity’s argument that CRA by going to revocation did not follow its own guidance.  The court noted that CRA’s “decision falls squarely within the range of acceptable outcomes.” and that “it was reasonably open to the Minister to find the breaches sufficiently serious as to warrant revocation.”  This is important victory for charities and CRA in that it makes it clear that CRA can remove the charitable status of a sufficiently non-compliant charity. The public in Canada expects CRA as a regulator to regulate and sometimes that means removing the registered charitable status of groups that do not comply with the basic requirements of being a charity.  I would also commend the Federal Court of Appeal for the length of decision.  When a charity is making an argument that lacks “any merit” you don’t need a 20 page decision and a couple pages will do.

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February 17, 2010

How do you know if your Canadian non-profit is not really a charity under 149.1(l) of the ITA?

CRA provides their answer in this piece from the APFF 2009 Conference.

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February 13, 2010

Brochure released for Charity Law Information Program Conference in Toronto - great speakers/topics

February 12, 2010

Dealing with a Canada Revenue Agency Charity Directorate Audit of a charity with Mark Blumberg

Here is a free archived webinar entitled “Dealing with a Canada Revenue Agency Audit”. https://ocsa.webex.com/ocsa/lsr.php?AT=pb&SP=TC&rID=547947&rKey=c91388f375f36729&act=pb

February 12, 2010

Allowable Canadian Charitable Activities and Non-Charitable Activities - webinar from CLIP

Here is an archived webinar entitled “Allowable Charitable Activities and Non-Charitable Activities” by charity lawyer Mark Blumberg https://ocsa.webex.com/ocsa/lsr.php?AT=pb&SP=TC&rID=556857&rKey=ba363d7271522385&act=pb

February 12, 2010

Legal Issues for Canadian Charities: Beyond the Top 10 - free webinar from CLIP

Here is a free archived webinar entitled “Legal Issues for Canadian Charities: Beyond the Top 10” with charity lawyer Mark Blumberg https://ocsa.webex.com/ocsa/lsr.php?AT=pb&SP=TC&rID=560427&rKey=eb2b26271716b465&act=pb

February 12, 2010

Top 10 Canada Revenue Agency Compliance Issues for Charities - free webinar from CLIP

Here is a free archived webinar entitled “Top 10 Canada Revenue Agency Compliance Issues for Charities” with charity lawyer Mark Blumberg.  https://ocsa.webex.com/ocsa/lsr.php?AT=pb&SP=TC&rID=347957&rKey=b0409024f1fe1f72&act=pb

February 12, 2010

Tour of the Canada Revenue Agency Charity Directorate and Various Charity Law Resources on the Web

Here is an archived webinar entitled “Tour of the Canada Revenue Agency Charity Directorate and Various Charity Law Resources on the Web” with Mark Blumberg, a Toronto based charity lawyer.
https://ocsa.webex.com/ocsa/lsr.php?AT=pb&SP=TC&rID=548647&rKey=c0ce81cdd52ef188&act=pb

February 11, 2010

Federal and Provincial Cooperation in the regulation of charities in Canada

It is not well known but the Federal and Provincial governments work collaboratively on charity regulation in Canada “to develop mutually beneficial public awareness and education products and projects.”.  Here is a little piece which illustrates some of the collaboration. 

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February 11, 2010

CRA modifies page on disbursement quota calculation -useful page for understanding DQ for charities

If you are trying to understand the disbursement quota for Canadian charities then you may find this CRA page on the disbursement quota calculation helpful.  Here is the link http://www.cra-arc.gc.ca/chrts-gvng/chrts/prtng/spndng/clclb-eng.html

February 06, 2010

Webinar: Haiti - Legal and Ethical Issues for Canadian charities responding to the earthquake

[the archived recording of the webinar Haiti - Legal and Ethical Issues for Canadian charities is now available at https://ocsa.webex.com/ocsa/lsr.php?AT=pb&SP=TC&rID=619547&rKey=680663606ebf9a91&act=pb (It is approx 1h and 10 min)]  We are also beta testing some other webinars at: http://www.globalphilanthropy.ca/index.php/blog/comments/webinars_on_canadian_charity_law_-_charity_law_information_program_clip_by_/

OCIC, myself and Capacity Builders will be organizing a free one hour webinar entitled “Haiti - Legal and Ethical Issues for Canadian charities responding to the earthquake”  As we are all aware with the earthquake in Haiti, Canadians have responded quickly and donated generously.  Canadian charities have received record contributions to help with the disaster in Haiti.  Many of the charities raising funds for Haiti have never operated in Haiti and/or been involved in disaster assistance. We have learned from past disaster responses in post-conflict areas that good intentions and money are not enough.  Join charity lawyer Mark Blumberg (editor of www.globalphilanthropy.ca) as he highlights some of the top legal and ethical challenges facing Canadian registered charities operating in Haiti.  From Income Tax Act rules to ethical dilemmas it is important that charities are aware of these and other issues.  For all Capacity Builder Webinars you can see https://ocsa.webex.com/mw0306l/mywebex/default.do?siteurl=ocsa

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January 27, 2010

CRA reminder about gifts from one registered charity to another - no receipt issued

Here is a reminder from the Charities Directorate of CRA that one registered charity should not issue an official donation receipt to another registered charity.  So for example if a foundation gives another registered charity funds the recipient charity does not provide an official donation receipt.

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January 25, 2010

Being Good at Doing Good:  Safeguarding Yourself and your Charity in a Complex World - Toronto

Here is the schedule for Being Good at Doing Good:  Safeguarding Yourself and your Charity in a Complex World.  There is an amazing line up of speakers. CLIP_Conference_Schedule.pdf    Check out the topics and speakers and register while you can at http://www.capacitybuilders.ca/clip/conference/index.php for the early bird rate for this CLIP conference.  Here is a flyer if you want to circulate to your charities, their boards, volunteers and staff.  Flyer for Being Good at Doing Good

January 25, 2010

CRA, Public Guardian and Trustee and UK Charity Commission to speak in Toronto in February

For information on the conference see: http://www.capacitybuilders.ca/clip/conference/index.php The conference is sponsored by the Canada Revenue Agency and I am helping Capacity Builders organize this charity conference.

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January 19, 2010

CRA to work weekends to help public with Haiti relief

To help with Haiti Relief the Charities Directorate of the Canada Revenue Agency will temporarily be working on weekends “Note: As a temporary measure, the Charities Directorate is providing additional telephone service for donors and charities who want information about donations toward earthquake relief in Haiti. The telephone service is now extended to weekends, from 9 a.m. to 5 p.m. Eastern Time.”  This is an excellent idea and will be helpful to many Canadians.  http://www.cra-arc.gc.ca/whtsnw/tms/rthqk-haiti-eng.html

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January 16, 2010

Donating to Haitian Earthquake Relief - beware of charity scams taking advantage of the situation

Here is a CBC article on how scammers and cyber criminals are trying to exploit the generosity of people. Save yourself the disappointment and embarrassment and if you are interested in helping people in Haiti donate to an experienced Canadian aid organization that has operations in Haiti such as the members of the Humanitarian Coalition (http://www.thehumanitariancoalition.ca/)  or Doctors Without Borders Canada (http://www.msf.ca/)

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January 15, 2010

CIDA’s Key Facts about the Haiti Earthquake Relief Fund -are your charity’s donations being matched

Here is some information from CIDA with respect to their Haiti donation matching program
http://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/JOS-114172324-U9P

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January 13, 2010

CRA puts out two releases related to Haiti Earthquake - be an informed donor

One release is a caution encouraging Canadians to be an informed donor and see part of the CRA website on being an informed donor.  The other is a reminder that in a disaster the urge by some to set up a new organization may not be the best course of action may be to donate or help “existing qualified donees (e.g., other registered charities) that have the experience, resources, and infrastructures already in place to respond rapidly and effectively in such locations.”  http://www.cra-arc.gc.ca/whtsnw/tms/rthqk-haiti-eng.html I very much agree with such advice.

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January 07, 2010

The secret location of the old T3010A form!

As of 2009 Canadian charities need to file the T3010B form for year ends after January 1, 2009.  For almost all charities they have no more use for the T3010A.  CRA has removed the old T3010A form because so many charities were mistakenly filing the t3010A when in fact they should be filing the T3010B Anyway there are reasons that one may want to look at a T3010A including if you are making application for reregistration and you are required to complete the T3010A or you are wondering about the CRA database and what number aligns with what question.  Anyway CRA has done a good job hiding the form to keep it away from you those who might mistakenly use it.  Here is a copy of the T3010A if you require http://www.cra-arc.gc.ca/formspubs/prioryear/t3010a/README.html

December 20, 2009

Preventing fraud in Canadian Not for Profit Organizations

Here is an interesting booklet from the CSAE and RBC on Preventing_fraud_in_Not_for_Profit_Organizations.pdf

Do you require legal advice with respect to Canadian or Ontario non-profits or charities?

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Charity Lawyer Mark Blumberg

Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.

mark@blumbergs.ca
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