Topics: What's New from the Charities Directorate of CRA, Canadian Charity Law, Political Activities and Canadian charities
Imagine Canada has obtained an interesting sessional paper from the Canada Revenue Agency. The questions responded to were provided by MP Hedy Fry. The paper provides some insight into CRA activity relating to charities and political activities.
Here is a copy of the paper. It covers the number of reminder letters, the number of formal complaints and the time taken to complete some of the political activity audits.
In terms of the reminder letters I was surprised at how few CRA has sent out on political activities. CRA identifies they sent out around 12 or 13 per year. I have reviewed a number of these reminder letters and although some would argue that a reminder letter may create a "chill" on political activities in many cases CRA is simply reminding the charity for example that certain comments may be partisan and or that the charity may not have properly completed their T3010 annual return. For most charities they would far rather receive a reminder later than an audit.
It is interesting to see the number of formal complaints jumped significantly between 2011 to 2013. Probably a big part of the jump was largely contrived and complaints from one or two sources like Ethical Oil. It is interesting to note that the complaints dropped to only 52 in 2013/2014. I am not sure how many formal complaints CRA receives in total and what proportion these are.
CRA outlines that at the time of the memo they had 13 completed audits and they outlined for each order to the number of days between the commencement of the audit and the date of conclusion. It's interesting to note that one audit was 1076 days and another one 1487 days. So even some of these audits that's CRA is counting as political activity audits had preceded the 2012 budget with the increased focus on political activities. Almost half the audits were concluded within a year and the rest took longer.
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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.