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Canadian Charity Law List

September 2020

FEATURED

Blumbergs’ Canadian Charity Law Institute 2020 - online

Every year Blumbergs has its Blumbergs’ Canadian Charity Law Institute. This year we will be doing a “mini-institute” – very virtual, much shorter and more affordable but covering a number of topics that are of concern to Canadian charities. The amount of change over the last few months has been staggering. So please join us on Wednesday, October 21, 2020, for the 9th Blumbergs’ Canadian Charity Law Institute. Registration and introductions will begin at 12:30 PM EST and the Institute will run until 4PM EST.

We will be covering a number of different topics tentatively including the following:

  • Charities Directorate: Navigating the COVID-19 pandemic and the way forward Tony Manconi, Director General, Charities Directorate of the CRA
  • State of the Sector and Impact of COVID, Mark Blumberg, Blumberg Segal LLP
  • ONCA update, Lynn Gluckman, Blumberg Segal LLP
  • CNCA update – What is new this year with COVID and maintaining a CNCA corporationColeen Kirby, Corporations Canada, Innovation, Science and Economic Development Canada 
  • The We Charity Controversy, Mark Blumberg, Blumberg Segal LLP
  • Race and Racism in the Non-profit Sector, Olumide Akerewusi, Founder and CEO, AgentsC 
  • Transparency – a little effort can save you a lot of time and headaches, Mark Blumberg
  • Political activities and Lobbyist registration, Mark Blumberg

You can register here.

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Blumbergs is moving!

As of October 1, 2020, Blumberg Segal LLP is moving to a new office address which is:

Blumberg Segal LLP
2300 Yonge Street, Suite 1600
Toronto, ON M4P 1E4

Like many of you, our firm has been working remotely since mid-March of this year and we will continue to do so for the foreseeable future. Therefore, this new address will only be important if you are mailing or couriering us documents.

All other firm contact information remains the same including emails, telephone, fax, websites and social media.

Don’t worry if you have sent anything to the old address as all letters and parcels will be forwarded for the next few months.

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ONCA update but still don't know when ONCA will be brought into force

As we have noted before, ONCA was passed in 2010 and it was never brought into force. Unless there is a motion or legislation this year it will be repealed automatically at the end of this year under the Legislation Act. That Legislation Act makes sense as it would be ridiculous to pass legislation and then not have it come into force 10 or more years later. Well, the Ontario government has now brought in on September 16, 2020 Motion #89 to grant a further year for the adoption of ONCA. That will mean that ONCA will not die at the end of this year. Still no word on when the Ontario government will bring in ONCA. Perhaps January 1, 2021, or perhaps not.

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Upcoming Webinars for the Canadian Charity Law Association

The Canadian Charity Law Association is delivering some upcoming webinars. Registration is free but space is limited. Topics are subject to change. More information on each of these webinars and how to register is provided below.

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CRA Charities Directorate slowly restarting revocation process and audits

For almost a year now (long before COVID) CRA has not revoked one single charity as a result of audit!   Admittedly CRA typically in a year revokes only 20-30 charities for all sorts of problems from inappropriate receipting, terrorism, lack of direction and control, undue private benefits etc.  But we all know that out of the 86,000 there are a few “bad apples” that really are not charities or complying with the rules and it is best in my view that they not continue on as registered charities or they probably will sully the reputation of the charity sector.

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Now is the time to get onto CRA's Digital Services for Charities

While restrictions are easing up and businesses are getting back to work, now is still a good time for registered charities to get on to CRA’s new Digital Services for Charities. CRA launched these new online services a year ago and the system still has some issues (especially when it comes to getting access to the online account for the first time). However, with the COVID-19 pandemic and the Charities Directorate only having limited access to their offices, the new online system is the best way to submit any requests or documents to CRA.

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Access to Information sorely lacking when it comes to WE Charity scandal

The Canadian access to information system seems to underperforming when it comes to the WE Charity scandal. See this PDF of Completed Access to Information Requests from the Government of Canada.   The PCO and the OCL in six access requests that were completed granted a total of zero (0), yes zero pages. This is another example of why the WE Charity scandal will probably go on for months when it could have been a short affair after Trudeau cancelled the disastrous program. As I have also alluded to before the lack of transparency by both the Federal government and WE Charity and the limited tools/knowledge of those who are trying to have oversight like the Finance Committee really mean that some sort of public inquiry needs to be established.

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What will be the impact of the WE Charity scandal on the Canadian charity sector?

The WE Charity scandal has now been going on for over 3 months.  It has caused the Minister of Finance to resign, the proroguing of parliament. It has resulted in WE Charity announcing that it will be “winding down the organization’s operations in Canada” and taking their significant real estate holdings in Toronto and turning them into an endowment.

 

Unfortunately, there were few details provided on the “wind down”.  The whole announcement with attendant interviews, press releases, etc appears to be a public relations exercise to reduce negative coverage of the WE Charity.  WE Charity’s main activities in Canada – WE Days and school activities have been closed for over 6 months. Major funders have left them months ago.  They have fired the vast majority of their employees.  They have announced previously that they were selling some real estate.  So there was not much new in their announcement except that all the real estate will now be sold and there will be the creation of an endowment.  Unfortunately, with respect to the endowment, there is almost no information on who will actually own and control it, how much it will disburse each year, etc.  Will the “endowment” be held in WE Charity?  If not which charity?  Certainly, there is no indication it will go to an arm’s length charity that is unaffiliated with those who currently control WE Charity.  The announcement of the endowment raises more questions than it answers which is very unfortunate and also means that coverage of the WE Charity or the endowment may unfortunately go on for years.

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Decline in trust in the Canadian non-profit and charity sector as a result of the WE Charity scandal

A recent public opinion poll by Proof Communications, which runs the CanTrust index, dealing with trust shows a 6% decline for the non-profit and charity sector from May to September 2020.  Clearly having over 2 months of very negative WE Charity coverage was one factor resulting in a loss of trust.

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CRA Charities Directorate email on upcoming changes (with our comments)

The Charities Directorate of CRA sent out an email today to their electronic mailing list. The full text is below and our comments are in [brackets and italics]. If you want the boring stuff from CRA then you should definitely sign up to the Charities Directorate’s electronic mailing list. If you want more interesting stuff on Canadian charity compliance then sign up here.

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Eisbrenner v. Canada, 2020 FCA 93 (Federal Court of Appeal) deals with CGI tax shelter donation scheme

In the case Eisbrenner v. Canada, the Federal Court of Appeal deals with 2 tax shelter donation schemes that were not accepted in the Tax Court of Canada and the FCA denied these appeals.

Here is the text of the judgment.

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Mudge v. The Queen - deals with Canadian donation tax scheme and drafting of pleadings

In the case of Mudge v. The Queen, it deals with a charitable scheme and a motion by the taxpayer to strike out portions of CRA’s pleadings when CRA was trying to deny the deductibility of the ‘donation’.  The case will be of interest to lawyers understanding how pleadings should be drafted as well as those who are interested in charity schemes that CRA is likely to not accept.

Here is the full text of the case.

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CRA Question and Answer Teleconference on the Canada Emergency Wage Subsidy (CEWS)

Here is information from CRA on their upcoming teleconference on the Canada Emergency Wage Subsidy (CEWS).

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CRA Canada Emergency Wage Subsidy (CEWS) Application Guide

Here is an application from CRA relating to the Canada Emergency Wage Subsidy (CEWS).

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Lengthy FAQ from CRA on wage subsidy

Here is an FAQ released by CRA on the Federal wage subsidy.

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Blumbergs' COVID-19 FAQs for Registered Charities and Non-profits

We have updated our COVID-19 FAQs section on our CanadianCharityLaw.ca website. The FAQ section will deal with common issues affecting Canadian registered charities and non-profit corporations during the COVID-19 pandemic.

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Blumbergs Online Courses

We have created some online courses on various charity law issues. These courses are meant to be easier to access, more convenient and available 24/7 exactly when needed. You can do an online course at your pace and redo sections if you wish.

We have courses on the following subjects:

  • Top 20 Charity Law Issues for Canadian Registered Charities
  • Donor Advised Funds (DAFs) In Canada
  • Fundraising from Canada – A course for groups outside of Canada
  • Mergers of Canadian Non-Profits and Charities and Dealing with Uncertain Times
  • Ontario not-for-profit corporations under the Ontario Corporations Act and dealing with ONCA
  • Receipting for Canadian Registered Charities
  • Should We Establish a Canadian Social Enterprise, Non-Profit or Charity and How to Do It?
  • Multiple Corporate Structures for Canadian For-Profits, Non-Profits and Charities to Enhance Flexibility + Impact
  • Blumbergs’ Canadian Charity Law Boot Camp 2020
  • Canadian Charities Working with Non-Charities in Canada Course
  • Restricted Gifts – Managing the Opportunities and Dangers of Restricted Charitable Gifts
  • Foreign Activities and Canadian Charities
  • Fundamentals of Running a Canadian Charitable Organization/Operating Charity
  • Fundamentals of Running a Private or Public Foundation in Canada
  • Transparency in the Canadian Charitable Sector and the T3010 Registered Charity Information Return
  • Membership of Non-Profits and Charities in Canada

 

We have created various price points depending on the needs of the organization.  We also will create bulk discount codes when courses are needed across a whole organization.

We are also doing customized courses for different organizations depending on their needs. Some are focussed on boards of directors while others are focussed on staff.  Let us know if your organization needs a customized or live online course.

 

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CRA

CRA Charities Directorate announces extension of T3010 filing deadlines until December 31, 2020 in response to COVID-19

The CRA announced on March 20 that registered charities filing deadline for the T3010 that were or will be due from March 18, 2020, till December 31, 2020, will only be due on December 31, 2020. This will be a welcome relief for many registered charities in Canada. As well, this will be a relief to many accountants who need to do audits of charities that would have to be completed prior to the completion of the financial statements and filing of the T3010. This will reduce some of the stress on registered charities who may not even have access to their offices because they are working from home etc.

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CRA notice on charity applications – yes CRA is processing charity applications

CRA has been processing charity applications during the COVID pandemic – even when they were “shut down”.   This recent CRA notice advises charities that if they have a deadline to respond to on a charity application that the deadline will be extended (makes good sense) and that charity applications will not be closed just because there is no response.  Keep in mind that this is a dual-edged sword – if you take longer to respond to CRA’s requests your charity application will also take longer.  It also discusses other aspects of the notice for charity applications.

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Further extension for T2 and T1044 filing deadlines for June, July and August 2020 filers

CRA has previously announced that the T2 Corporation Income Tax Return (the T2) and T1044 Non-Profit Organization (NPO) Information Return for non-profits and others that was due between March 18, 2020 and June 1, 2020 can be filed on June 1, 2020. Now CRA has also announced that T2s and T1044s that are due in June, July or August 2020 can be filed on September 1, 2020.

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Corporate Requirements and Changes

Corporations Canada extends AGMs for Canada Not-for-profit Corporations Act (“CNCA”) corporations till Dec 31, 2020

In what is very good news for many non-profits and registered charities in Canada, Corporations Canada has extended the deadline for AGMs for Canada Not-for-profit Corporations Act (“CNCA”) corporations till Dec 31, 2020.  This helps these organizations in that they don’t have to now request an extension.  Also, it applies to both presenting financial statements and AGMs.  It is retroactive to March 13, 2020.

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COVID-19 and AGMs for Federal non-profit corporations under the Canada Not-for-profit Corporations Act (“CNCA”) - UPDATED

The COVID-19 crisis is forcing some non-profit organizations and registered charities to rethink the timing and manner of conducting their annual general meeting of members (AGM).  Every organization is different, and a one-size-fits-all approach does not apply.

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COVID-19 and AGMs for Ontario non-profit corporation under the Ontario Corporations Act (“OCA”)

The COVID-19 crisis is forcing some non-profit organizations and registered charities to rethink the timing and manner of conducting their annual general meeting of members (AGM). Every organization is different, and a one-size-fits-all approach does not apply.   We are assisting organizations with numerous challenges in dealing with COVID-19 and if your organization requires assistance let us know.  Here is an update for OCA corporations in our FAQs https://www.canadiancharitylaw.ca/covid-19/#faq-0-8

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Upcoming Events and Programs:

Blumbergs’ Canadian Charity Law Institute 2020 – online

Blumbergs’ 16 online courses for charities;

Free upcoming Canadian Charity Law Association webinars.


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

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
416.361.1982