One stems from CCCC engagement with other lawyers specializing in charity law. The other stems from CCCC engagement with other faith-based organizations, in this case Christian Legal Fellowship. Each presents different perspectives and focus on different issues.

The first takes a broad look at several 2024 proposals that raise concerns about politicizing charitable status. It brings together lawyers with a wide range of views on the underlying policy issues but who collectively agree on the need for a neutral and principles-based framework for the administration of the charitable sector and the application of tax law. This letter was the subject of a recent national newspaper column.

The second focuses on concerns specific to recommendations in a 2024 report from a former House of Commons Finance Committee. It highlights that advancing religion is a social good that benefits the public and that the recommendations undermine religious diversity and state neutrality.

CCCC Advocacy

We’ve detailed the report, its recommendations, and our response in a past blog post, CCCC Responds to Troubling Recommendations on Charitable Status. In sum, two of the report’s 462 recommendations were particularly concerning:

• Recommendation 429: no longer provide charitable status for anti-abortion organizations
• Recommendation 430: amend the Income Tax Act to provide a definition of charity which would remove the privileged status of advancement of religion as a charitable purpose.

We outlined our concerns over politicizing charitable status in our 2025 federal pre-budget submissions that call for the government to retract the recommendations, and in prior government communications (Mandate letters; CCCC Open Letter; Proposed Income Tax Act amendments; Sealing industry).

In June 2025 we also urged the Finance Minister to reject policies that politicize charitable status and instead set a new direction for charities in Canada; one that implements evidence-based policy, protects diversity and upholds the independence of the charitable sector.

Your Advocacy

Perhaps you’re wondering how your organization can be involved? Your story can make a difference. When you share how your ministry is bringing hope, you’re helping protect the freedom to do that work. Help politicians and decision-makers understand your organization, your clients, your community, and the amazing work you do. We know (and research proves!) that you have an outsized, positive impact in your neighbourhoods and communities. What better way to demonstrate the importance of advancing religion as a charitable purpose than through stories of hope, joy and impact.

Tell Your Story!

We also know that you’re very busy on the front lines of ministry. So to help you easily and quickly tell your stories, we’ve got a set of communications resources to support and guide you in effective communications. They will help you discover your organization’s value proposition, tell your stories with integrity, and walk you step by step through story development and impact assessment.

As we continue to speak up about the importance of protecting charitable status from political influence, these two letters show that diverse stakeholders share overarching concerns. They also emphasize how important it is to keep tax policy fair and neutral. You can add your voice to this effort by telling your organization’s story of how you serve, who you help, and why it matters. Together, by sharing real stories of hope, impact, and service, we can help protect the independence and diversity of Canada’s charitable sector for years to come.

The post CCCC Signs Lawyers’ Letters Concerning Charitable Status appeared first on CCCC Blogs.

Mr. Zanette was a long-time volunteer for the Ottawa Chamber Music Society, or Chamberfest, a not-for-profit that puts on a number of musical events throughout the year. He was aware of and agreed to a number of Chamberfest policies, including its dress code, which prohibited the alteration of name tags. Even so, he placed a rainbow flag sticker on his name tag while volunteering as an usher at a 2019 event. A representative of Ottawa Chamber Music Society (OCMS) asked him to remove the sticker from the name tag in accordance with the dress code. Mr. Zanette eventually removed the sticker and continued to volunteer with Chamberfest without the issue being raised again. Later, he filed a human rights complaint alleging that the OCMS’ direction to remove the sticker from his name tag was discriminatory on the basis of sexual orientation, gender identity, and gender expression.

For his complaint to be successful, Mr. Zanette had to demonstrate prima facie discrimination by proving three elements:

1. That he has a characteristic that is protected by the Human Rights Code of Ontario (the Code);
2. That he suffered disadvantage or an adverse impact of some kind; and
3. That the protected characteristic was a factor in that disadvantage or adverse impact.

While Mr. Zanette is undoubtedly a member of a Code-protected group (sexual orientation, gender identity or gender expression), that alone was insufficient for finding prima facie discrimination. The Tribunal noted that not all differential treatment is discriminatory. Rather, the actions in question – here, asking for the rainbow sticker’s removal – have to engage the right to equal treatment in a substantive sense. That means actions that are arbitrary or “create a disadvantage which limits opportunities, perpetuates prejudice and stereotyping, or fails to recognize pre-existing disadvantage”. An action merely being unfair does not engage Code protection; it must rise to the level of prohibited kinds of discrimination.

The Tribunal held that OCMS’ request was not direct discrimination because it was based on their dress code. This dress code applied equally to all staff and volunteers regardless of the cause being promoted. There was no evidence to suggest that it was arbitrarily applied to Mr. Zanette on the basis of his sexual orientation, gender identity, or gender expression.

The Tribunal then held that OCMS’ request was not indirect discrimination, which is when a requirement that appears neutral excludes or disadvantages a group protected by the Code, for the same reason: this dress code applied equally to all staff, volunteers, and causes. There was no evidence that any staff or volunteer had ever been allowed to alter their name tag.

Finally, there was no evidence to show that wearing a rainbow sticker was necessary for being a member of that community. Therefore, being asked to remove it because of a uniformly applying dress code did not amount to substantive discrimination under the Code, and the application was dismissed.

Conclusion

So, can dress codes be discriminatory? Potentially yes, if they are applied arbitrarily or unfairly. This decision is an important reminder that volunteers can file human rights complaints and that any dress code should be clearly written, consistently applied and enforced, and that volunteers need to be made aware of any dress code in advance. Allowing a volunteer to promote one cause or another will likely mean that all must be allowed, or a claim for substantive discrimination could succeed.

The post Can A Dress Code Be Discriminatory? appeared first on CCCC Blogs.

British Columbia

A number of changes to the B.C. Societies Act came into effect in May of this year. Designed to increase clarity and address concerns with the legislation since it was first introduced, the provincial government has put together a table that sets out the majority of changes. We previously discussed these changes in our blog post, BC Societies Act Amendments, Part II.

Ontario

There are two important points for charities operating in Ontario. The first is timing – if your charity is provincially incorporated, there is one year remaining under Ontario’s Not-for-Profit Corporations Act, 2010 (“ONCA”) transition period. If you do not transition under the new legislation by October 18, 2024, any articles and bylaws that are inconsistent with the new Act at that time will be deemed amended, introducing confusion into the charity’s governance. If applicable to your charity, we recommend you review this guide and start the process to transition under ONCA immediately.

The Less Red Tape, Stronger Economy Act also updated ONCA. Although the changes were passed in June, they become effective October 1. The amendments largely deal with calling director and member meetings by telephonic and electronic means. We talked about these changes in greater detail in our blog post Amendments to the Ontario Not-for-Profit Corporations Act.

Saskatchewan

A new Not-for-Profit Corporations Act governing charities and other not-for-profit corporations in Saskatchewan came into force in March of this year. Intended to modernize the law dealing with charities, some important changes in the new Act deal with director qualifications, audits and reporting requirements, and electronic communications.

We’ll continue to monitor changes to federal and provincial legislation that affect charities.

The post Reminder: Recent Corporate Legislation Changes for Charities appeared first on CCCC Blogs.

In this blog, I’ll examine the current privacy framework, a recent attempt to address some legislative deficiencies, and what’s on the horizon.

The Current Framework

The existing federal privacy legislation, Personal Information Protection and Electronic Documents Act (“PIPEDA”), applies to all organizations engaging in ‘commercial activities’. This may leave charities with the impression that it does not apply to them at all, but that’s not necessarily the case. Instead of taking a broad look at the nature of an organization – a for-profit business and commercial activities go hand-in-hand, but the same ought not be said for charitable organizations – PIPEDA considers a particular activity’s nature.

This means that PIPEDA’s standards and regulations do apply charitable organizations if they engage in commercial activities. So, what exactly are commercial activities?

PIPEDA and the Office of the Privacy Commissioner of Canada define commercial activities as “…any particular transaction, act or conduct or any regular course of conduct that is of a commercial character…”. This government resource makes it clear that determining ‘commercial activity’ is the most important consideration for determining if PIPEDA applies. When discussing non-profits, it specifically includes “the selling, bartering or leasing of donor, membership or other fundraising lists”.

Charities will want to ask themselves if how they use or share these lists could constitute a ‘commercial activity’ under PIPEDA.

The Well-Intentioned, Never-Finished Update to PIPEDA

Bill C-11 was first introduced in November 2020. It was the government’s initial attempt to update PIPEDA and other data privacy legislation for consumers. Partly due to the federal election in 2021, the Bill was abandoned and did not get through second reading (learn more about how a bill becomes a law here).

However, the basic framework in C-11 was re-introduced in June of 2022 as Bill C-27. It is currently under consideration in committee in the House of Commons, having made it through second reading on April 24, 2023. This Bill includes a number of privacy considerations all organizations will need to be aware of, even if some of those considerations don’t apply to them.

New Legislation Incoming

While not identical, Bill C-27 bears a strong resemblance to its predecessor. Its short title, the Digital Charter Implementation Act, 2022 (“Digital Charter”) means its subject matter is broader than privacy considerations under PIPEDA, and we will continue to monitor its other implications as they relate to charities. For our purposes, it’s important to note that Part 1 of the Digital Charter enacts the Consumer Privacy Protection Act (“CPPA”, or the “Act”), which will replace Part 1 of PIPEDA and introduce additional privacy considerations.

Until it’s enacted and a judge interprets the new Act, we won’t know if there are more or markedly different privacy considerations than those currently under PIPEDA. However, whether or not an organization is engaged in commercial activities will continue to be a central consideration under the CPPA privacy regime. We know this because section 6(1) of CPPA states that the Act applies to every organization in respect of personal information that the organization “collects, uses or discloses in the course of commercial activities”, including charitable organizations.

In trying to explain section 6(1), section 6(2)(a) states that “for greater certainty,” the
Act will apply to personal information that an organization “collects, uses or discloses interprovincially or internationally”. This will likely mean that if a charity possesses personal information that it then shares with organizations – even affiliated ones, like two offices of the same denomination – outside of the province where the information is collected, used, or disclosed for a “commercial activity” purpose, that charity will have to follow the CPPA’s privacy requirements.

Some of these privacy requirements include:

• Have a designated individual, like a Privacy Officer, who is responsible for the organization’s obligations under the Act – s. 8(1)
• Implement and maintain a privacy management program that outlines the relevant polices and procedures – s. 9(1)
• Collect, use, and disclose personal information in a manner that a “reasonable person” would consider appropriate in a given circumstance – s. 12(1)
• Obtain valid consent for collecting, using, or disclosing an individual’s personal information – s. 15(1)

What Should You Do?

What does all of this mean? Bill C-27, including the CPPA, is not currently law, so no immediate changes are required. For now, it’s an encouragement to review your internal privacy controls and what you do with your donor and fundraising lists. Carefully consider any action that could be considered selling, bartering, or leasing those lists. Next, even if PIPEDA – or any succeeding legislation – does not apply to your organization, they often represent best practices. Consider if implementing any of the proposed privacy requirements could benefit your organization. To that end, you should ensure that you have a publicly available privacy policy; that you’ve obtained valid consent to obtain or share certain information; and that you only share as much personal information as required in a given situation – with these situations set out in the policy.

We will continue to monitor the progress of Bill C-27 and any changes to Canada’s privacy regime that impact charities. For more information on the Digital Charter, see our previous blog post: https://www.cccc.org/news_blogs/legal/2022/07/29/a-new-privacy-regime-proposed-in-bill-c-27/

The post Playing (Privacy) Catch-Up appeared first on CCCC Blogs.

Making Grants to Non-Qualified Donees – New Rules

Since June 23, 2022, charities have been legally allowed to make grants to non-qualified donees. This is due to legislative changes that, among other things, added the term “qualifying disbursements” to the Income Tax Act (ITA). For more details, see our post Bill C-19 Has Passed.

The ITA requires that for every grant over $5,000, the granting charity must report the name of the grantee, the purpose of the grant, and the total yearly amount granted to the grantee.

Reporting Grants to Non-Qualified Donees – Not Yet Required

Until the T3010, Registered Charity Information Return and the accompany guide T4033, Completing the Registered Charity Information Return are updated, you are not required to report your granting activities.

The T3010 and T4033 are being updated now. The CRA anticipates a spring 2023 release date.

Books and Records  – Still Required!

Even though CRA has clarified that you don’t have to report your granting activities (yet!), the CRA is also very clear that charities must keep adequate books and records to support all granting activities:

“Your books and records must contain enough information to allow the CRA to assess whether your charity is operating in accordance with the Income Tax Act.”

Of course, the books and records requirement applies all the time, to all of your charity’s operations. They must be sufficient to show your charity complies with applicable legislation.

Guidance CG-032, Registered charities making grants to non-qualified donees (DRAFT)

As we discussed in an earlier blog post, the CRA released draft guidance on making grants to non-qualified donees (November 2022). The formal deadline to submit your feedback is January 31, 2023.

Grants in The Green

We’ve got a space in The Green where you can chat with other charities about grants and working with non-qualified donees.

The post Making Grants to Non-Qualified Donees? CRA Clarifies Reporting Obligations appeared first on CCCC Blogs.

CCCC agrees that dishonesty is wrong but is concerned about the significant and serious issues this proposal raises – issues that would impact the entire charitable sector. Over the past year we’ve written several letters to Cabinet Ministers about this proposal, expressing concerns also shared by others in the charitable sector.

We’ve written again to the Minister of Finance by way of an open letter. This open letter reiterates a few of our key concerns and makes specific recommendations. The full text of the letter is below.

You can also watch a video interview between Karen Stiller at The EFC and Deina Warren of the CCCC as they discuss why Canadians need to be aware of these recent challenges to charitable status.

Open Letter to the Minister of Finance: Full Text

Dear Hon. Minister Freeland,

We understand that the Prime Minister’s mandate letter instructs you, as the Deputy Prime Minister and Minister of Finance, to introduce amendments to  the Income Tax Act (“ITA”) in order to “make anti-abortion organizations that provide dishonest counselling to pregnant women about their rights and options ineligible for charitable status” (“Mandate Letters”).

The Canadian Centre for Christian Charities (CCCC) believes in a transparent, accountable, and effective charitable sector. To be abundantly clear, as a Christian organization, CCCC agrees that dishonesty is wrong. We do not and would not support charities that conduct their activities in dishonest ways, regardless of their charitable purposes or objectives.

However, the proposal raises many significant and serious issues that would impact the entire charitable sector. Since we first raised concerns about this matter in our letter of November 24, 2021, we have asked for the government to engage stakeholders such as CCCC on this matter and have continued to make ourselves available for collaborative discussions about the proposed ITA amendments.

Unfortunately, we have not been taken up on our offer, nor have we received any reply that addresses this issue.

In the absence of an opportunity for collaborative discussion, we write this open letter to reiterate a few of our key concerns with the government’s proposal and to make specific recommendations.

Concerns

Concern #1: Politicizing charitable status

The Mandate Letters do not, on their face, seek to address “dishonest counselling” generally, but only that which is allegedly provided by organizations with a certain perspective. By singling out a subset of charities based on a position or beliefs about a particular issue, the proposal appears to be motivated solely by political considerations. As such, it is an unwarranted politicization of charitable status that puts all charities at risk.

Concern #2: Long-term Impact

If an organization’s charitable status is at risk simply because its views or beliefs are different than those of the government, all charities are at risk. It means that every time the government adopts a new view or political priority, or any time a new government is elected, charitable status for specific groups could be in jeopardy and charities may be singled out for additional monitoring or audits simply because they hold different views than the government.

Concern #3: Lack of Data

The Mandate Letters are troubling because of their vague assertions and unproven assumptions of dishonesty toward a specific subset of charities. The government must (a) clearly define what it means by the terms “dishonest,” “dishonest counselling,” and “anti-abortion organizations,” and (b) substantiate the basis for these allegations with objective data that would justify such drastic action as making organizations ineligible for charitable status.

Concern #4: Jeopardizes A Diverse Charitable Sector

Canada is a diverse and pluralistic nation. Its diversity is represented in many ways, including through the diversity of its charitable organizations. When it comes to all matters of conscience, belief, and non-belief it is incumbent on the government to neither “favour nor hinder any particular belief, and the same holds true for non-belief”(Mouvement laïque québécois v Saguenay (City), 2015 SCC 16 at para 72 [Saguenay]). It is very dangerous territory when a government wades into debates over matters of opinion, even those that are strongly held. One only need recall the scrutiny environmental charities endured, both federally and provincially, to see the danger of characterizing an opinion as “dishonest” simply because a government may disagree.

Concern #5: Charter Infringements

This proposal raises many potential Charter infringements. Here we highlight only two.

Freedom of expression ensures that everyone can express their thoughts, opinions, and beliefs, however unpopular or contrary to the mainstream (Irwin Toy Ltd. V Quebec (Attorney General), [1989]1 SCR 927at 968). Freedom to fully and openly express views on social and political issues is fundamental to democracy and therefore to all other Charter rights and freedoms. Restrictions that touch the core of social and political issues raise concerns about the “dangers inherent in state censorship of such debate” (R. v. Keegstra, [1990] 3 SCR 697 at 849).

Freedom of religion means the government must preserve a neutral public space where there is “true freedom to believe or not to believe.” Neutrality does not mean “the homogenization of private players in that space.” Rather, neutral public spaces “preserve and promote the multicultural heritage of Canadian society” (Saguenay at para 74). As one author has put it, “the state should be secular so that citizens do not have to be” (Paul Marshall, Institutional Religious Freedom: An Overview and Defense, Religions 12(5):365 at p 20, citing Cécile Laborde, Liberalism’s Religion (Cambridge: Harvard University Press) at 125.).

Recommendations

Recommendation #1: Existing Tools Are Sufficient

Canada Revenue Agency (CRA) has substantial tools at its disposal to address fraudulent actors and dishonest reporting that rightly fall within the parameters of the ITA – we encourage the government to review the robust compliance mechanisms currently available to CRA.

For example, CRA can review whether a charity’s activities align with the activities and purposes it identified during the registration process. This is a well-established, education-first, and procedurally fair process. Charities engaging in conduct that falls outside the scope of their approved purposes and activities would rightly merit scrutiny.

Further, dishonesty is already addressed in the ITA. Charities that make false statements in circumstances that amount to culpable conduct (s 149.1(4.1)(c), 168(1)(d) ITA) can lose charitable registration. Similarly, charities are prohibited from having directors, trustees, officers or like officials who, among other things, have been convicted of crimes involving financial dishonesty (s 149.1(1)).

These are just a few examples of how CRA ensures charities are operating in compliance with legal and regulatory requirements. If CRA’s existing tools are inadequate, the government must clearly state how and why these tools are insufficient.

Recommendation #2: Disclose Data

Decisions impacting the charitable sector should be evidence-based. As the Special Senate Committee on the Charitable Sector emphasized in its report, Catalyst for Change, data is necessary “to support the evidence base for decisions” within the sector. Similarly, the Advisory Committee on the Charitable Sector Data Working Group is focusing its work to support the “Government’s capacity to make evidence-based decisions on the issues and priorities of the sector.”

Changes that could implicate charitable registration are serious and significant. Any such changes must be evidence-based. We would therefore recommend that the government disclose the data on which it is relying for its proposed changes.

Conclusion

Should the government choose to push forward despite these concerns, we expect it will first demonstrate how any change would, at minimum, meet a variety of prerequisites such as transparency in purpose, legislative authority for its use, Charter compliance, alignment with CRA’s education-first compliance approach, procedural fairness, etc.

Nonetheless, we trust that, given the concerns about politicizing charitable status shared broadly across the charitable sector, and the existing compliance mechanisms available to CRA, the policy proposal set out in the Mandate Letters will not be pursued.

As always, CCCC remains available and willing to participate in meaningful and collaborative discussions on this issue. We look forward to hearing from and working with you.

Sincerely,

Canadian Centre for Christian Charities

Interview with The EFC

The post Charitable Status: Open Letter to the Minister of Finance appeared first on CCCC Blogs.

Bill C-240 Voted Down

Bill C-240 was voted down at second reading.

There was a divide in the House of Commons: the minority government and its supporting party voted against the bill (with a couple exceptions), while members from the other three opposition parties voted for the bill.

The government argued that Bill C-240 would “undermine the effectiveness of the tax incentives provided under the ecological gift program”; that it was “expected to be costly”; that it “would certainly increase the pressure on government to also provide special exemptions for donations of other types of property, such as virtual currency or cash gifts made after tax income.” Its supporting party took similar positions.

Other opposition MPs supported the purpose of the bill but had some questions about effectiveness and fairness that could be examined by the Finance Committee. The MP who introduced the bill highlighted “broad stakeholder support” for the Bill and asked the House to move it to committee to closely examine the proposal. A committee can answer detailed questions, hear from expert witnesses, and make recommendations for improvement.

But this bill will not go to committee for examination – it has died, or been ‘negatived’ by the vote at second reading.

What’s Next?

This is the second time this bill has been introduced. In November 2020, it’s predecessor Bill C-256 was introduced but when the election was called, the bill died. Similar legislation was introduced in 2015 but was never enacted. It’s likely that at some point in the future we will see a new version of this bill introduced. Depending on the composition of the government at the time, it could come in the form of a government bill, or perhaps will be another private members’ bill. It could also start in the Senate, as we saw with Bill S-216.

What Would Bill C-240 Have Changed?

Capital gains tax on arm’s-length sales of private shares or real estate would have been reduced to zero if listed conditions were met. Some of those conditions included:

• that the gift is made within 30 days after the disposition
• that any advantage received is accounted for
• that the purchaser is at arm’s length to both the taxpayer and the charity

For More…

On some of the background information and CCCC’s view on Bill C-240 see Private Shares, Real Estate & Donations: Changes Proposed by Bill C-240.

The post UPDATE on Private Shares, Real Estate & Donations: Changes Proposed by Bill C-240 appeared first on CCCC Blogs.

The recently tabled Budget Implementation Act, 2022, No.1 (BIA) and its accompanying Explanatory Notes Relating to the Income Tax Act and Other Legislation show that Budget 2022 will take a very different approach than S-216.

Procedural sidenote: the BIA was preceded by a Notice of Ways and Means Motion. This motion “seeks to approve the budgetary policy of the government” and is a required step before taxation legislation can be read (introduced) for the first time.

Bill S-216 would amend the ITA to eliminate the “own activities” test. It aims to end the requirement that charities have to exercise “direction and control.” Instead, charities would have an obligation to take “reasonable steps” to ensure resources are used for only charitable activities.

The BIA, in contrast, does not eliminate “own activities” from the ITA. Instead, it adds a new category, called “qualifying disbursements.” In brief, qualifying disbursements are resource transfers from a charity to a non-qualified donee that are subject to mandatory conditions.

How does all of this work? Let’s walk through the definitions, conditions and distinctions.

What is a Qualifying Disbursement?

“Qualifying disbursements” are disbursements or gifts or resources from a charity to a “grantee organization” that are subject to certain conditions:

• The disbursement furthers a charitable purpose of the charity
• The charity ensures the disbursement is exclusively applied to charitable activities in furtherance of a charity purpose of the charity
• The disbursement meets prescribed conditions

What is a Grantee Organization?

A “grantee organization” is “a person, club, society, association or organization or prescribed entity, but does not include a qualified donee” [emphasis added].

Qualified donees are organizations that can issue official donation receipts. That usually means registered Canadian charities but also includes registered entities like journalism organizations, municipalities, amateur athletic associations.

By default, then, a grantee organization is not a registered charity.

What are the Prescribed Conditions?

The prescribed conditions that make a disbursement, gift or resource a “qualifying disbursement” are listed in a new section of the Income Tax Regulations (3703). 

All of these conditions must be met:

Written agreement that includes:

• Terms and conditions, including a requirement that all resources be used exclusively for charitable activities in furtherance of a charitable purpose
• Description of activities the grantee will undertake
• Requirement that resources not used for the intended purpose be returned
• Requirement that the grantee make period reports (at least annually) with details on the use of resources, compliance with terms and conditions, and progress made
• Requirement that the grantee provide a final written report, including a summary of results achieved, how resources were used, evidence that resources were used for intended purposes
• Requirement that books and records be given to charity or kept by grantee for minimum 6 years
• Requirement that books and records for disbursement be made available to the charity to inspect, audit, examine or copy

Preliminary inquiry

Before making disbursements, the charity makes inquires to be reasonably assured that the grantee will comply with all the requirements of the written agreement; this includes reviewing the grantee organization (and it’s directors, officers and like officials):

• Identity
• Prior history
• Practices
• Activities
• Areas of expertise

Charity provides ongoing monitoring, including

• Receiving periodic reports
• Verifying the disbursement is being applied for its intended purpose

Charity receives, reviews and approves the final report

Charity undertakes adequate remedial action when it becomes aware that any part of the agreement is not being complied with

What are the Reporting Requirements?

Another new regulation (3704) adds to the existing reporting requirements in ITA s 149.1(14). As part of their public information return, charities have to report:

• The name of each grantee organization that received more than $5000 from the charity
• The purpose of each reported qualifying disbursement
• The total amount disbursed by the charity to each named grantee organization

What else is Different?

Charitable Purposes

The BIA would change the definition of charitable purposes.

• Current definition: “charitable purposes includes the disbursement of funds to a qualified donee”
• BIA definition: “charitable purposes includes making qualifying disbursements”

Bill S-216 would not change anything related to charitable purposes but focuses instead on charitable activities.

• S-216 definition of charitable activities adds a new subsection to include: “making resources – including grants, gifts or transfers – available through transactions, arrangements or collaborations of any kind whatsoever in furtherance of a charitable purpose to a person that is not a qualified donee if those resources are made available by a charity that takes reasonable steps to ensure that those resources are used exclusively for a charitable purpose in accordance with subsection (27)”

Charitable Organization

The BIA would keep the terminology of “own activities” whereas Bill S-216 focuses on removing that phrase from the definition of charitable organization.

• Current: charitable organization is one where (a.1) all the resources … are devoted to charitable activities carried on by the organization itself
• BIA: charitable organization is one where (a.1) all the resources … are devoted to charitable activities carried on by the organization itself or to making qualifying disbursements.
• S-216: charitable organization is one where (a.1) all the resources … are devoted to charitable activities.

What Will Happen to S-216?

If S-216 is passed and receives royal assent before (or on the same day as) the BIA receives royal assent, S-216 is deemed never to come into force and is repealed.

How will this Impact Charities?

Right now the BIA is at second reading in the House of Commons and is being pre-studied by the Senate. Assuming the BIA passes in its current form it will mean charities can make qualified disbursements to non-qualified donees without the formal requirement of it being the charities “own activities.” In other words, charities can give funds to non-charities.

However, the conditions that have to be met are, in essence, the same as those under the “own activities” / direction and control requirements. Some have argued that the conditions for qualified disbursements are actually more onerous than under “own activities” /direction and control: Robert B. Hayhoe, Stephen Hsia, “The new qualifying disbursement rules: An improvement?” (2 May 2022), Miller Thomson Social Impact Newsletter.

Others have expressed concern that the new “qualifying disbursement” changes “don’t really appear to take us where we need to go”; see Aidan Macnab, “Ottawa proposes changes to how charities can fund third-party organizations”, Canadian Lawyer (3 May 2022).

The BIA changes raise a number of questions: will the conditions be too onerous? Will the reporting requirements add to the administrative burden? Will having a third category for the use of resources be unnecessarily complex and confusing? Will the distinction between “qualifying disbursements” and “own activities” though intermediaries be one without difference? Will it muddy the waters and expectations as between the two?

CCCC is concerned that these changes will indeed create confusion and that the changes, at best, will not decrease administrative burdens and at worst, will increase those burdens. The changes proposed in the BIA are not the changes proposed in Bill S-216. We support the aim of Bill S-216 and are concerned that the BIA will not effectively accomplish those goals.

One thing is clear – it’s too early to definitively state whether the BIA will actually make positive changes. We’ll be watching closely.

Looking for More?

For more information on Bill S-216, see

• Update: Bill S-216 on Direction and Control (3 March 2022)

• Bill S-216 on Direction and Control – Different Name, Same Aim (9 December 2021)

• What’s Happening with Bill S-222? (30 June 2021)

• Bill S-222: From Direction and Control to Reasonable Steps (10 February 2021)

For more information on direction and control, see our Resource Page in CCCC Knowledge Base. And for members interested chatting about the topic, you can head over to our dedicated discussion space in The Green.

The post Budget Implementation Act, Bill S-216 and Direction & Control appeared first on CCCC Blogs.

These changes come from a bill that passed back in 2018:  An Act to amend the Canada Business Corporations Act, the Canada Cooperatives Act, the Canada Not-for-profit Corporations Act, and the Competition Act. Corporations Canada sent out a reminder about these upcoming changes last month. It explained that these amendments are needed to “allow some of the provisions” of the 2018 “to become operational.” It also included a link to the regulations.

The page starts with the text of all the regulatory amendments … not an easy read! The most helpful, plain language part of the page is found at the very bottom.

What is the purpose for the amendments?

The objective is to “provide detailed requirements around the election of directors,” (under the Canada Business Corporations Act and the Canada Cooperatives Act)the retention and production of documents, and to make technical amendments that allow the amendments to become operational. Of these three categories of change, the second and third are relevant to the NFP Act. We’ll look only at the NFP Act-related changes.

What are the changes?

First, retention & production of documents by the Director. This does not mean your organization’s corporate directors, but the Director appointed by a government minister to administer the NFP Act.

The current retention period for most documents received by the Director is six-years. The Canada Gazette sets out the changes in this Table:

Second, the technical amendments. These do some regulatory ‘clean up’, changing corporate naming rules, and correcting English and French inconsistencies.

On corporate names, the changes:

• moves the term “deceptively misdescriptive” to the definitions section (see s 42(1)) from the section prohibiting deceptive misdescriptive names (see s 57)
• clarifies language prohibiting “confusing names” in s 50
• removes the word “pool” from list of prohibited name elements (see s 51)
• moves the exception regarding the use of family names from s 56(2) (“non-distinctive names” section) to s 54 (“general prohibitions” section)

For the detailed changes, you’ll want to check the text of the regulations. We’ve also set out a more detailed explanation of the specific changes (except for correcting French language inconsistencies) below.

More Detailed Explanation

Section 38 of the Canada Not-for-profit Corporations Regulations is replaced by the following:

38 For the purpose of section 238 of the Act, the prescribed period is six years beginning on the day on which the corporation is dissolved.

Section 38 deals with prescribed time periods relating to the liquidation and dissolution of CNCA corporations. This amendment simply adds a clarification to the existing section. The new text is underlined: “For the purpose of section 238 of the Act, the prescribed period is six years beginning on the day on which the corporation dissolved.”

Section 41 of the Regulations is replaced by the following:

41 (1) For the purpose of subsection 283(3) of the Act, the prescribed documents and classes of documents are

• (a) a notice of registered office referred to in subsection 20(2) or (3) of the Act;
• (b) a notice of directors referred to in subsection 128(1) of the Act;
• (c) a notice of change referred to in subsection 134(1) of the Act;
• (d) the documents referred to in section 153 of the Act; and
• (e) letters patent and supplementary letters patent.

(2) For the purpose of subsection 283(3) of the Act, the prescribed periods are

• (a) in respect of an application for an exemption referred to in section 88 of these Regulations, six years beginning on the day on which the application is received by the Director;
• (b) in respect of a copy of the documents sent under subsection 176(1) of the Act, three years beginning on the day on which the copy is received by the Director;
• (c) in respect of a document evidencing the satisfaction of the Director for the purpose of subsection 213(1) of the Act, two years beginning on the day on which the document is issued by the Director; and
• (d) in respect of an annual return referred to in section 278 of the Act, two years beginning on the day on which it is received by the Director.

Section 41 of the regulations relates to “Records of the Director,” and specifically the mandatory retention periods for certain types of documents. The “Director” is the person appointed by the Minister to carry out the duties and exercise powers under the CNCA (see CNCA ss 1, 281, 283). This is different from “small ‘d’” directors, who are individuals acting as corporate directors (see CNCA s 2(1)).

Section 41 sets out the “prescribed period” (i.e. the time periods) the Director has to keep or produce documents (other than documents listed in ss 128, 134, 153, certificate and attached articles or statement under 276, most recent notice of registered office). The current time period is currently 6 years.

The new section 41(1) includes the list of documents not subject to a prescribed retention period.

The new section 41(2) sets out different prescribed retention periods for different documents.

The key thing to know about this section is that it speaks to the Director’s record retention obligations, not the charity’s record retention obligations.

The definition corporate name in subsection 42(1) of the English version of the Regulations is repealed.

Subsection 42(1) of the Regulations is amended by adding the following in alphabetical order:

deceptively misdescriptive

means, in respect of a corporate name, that the name is likely to mislead the public, in any language, with respect to any of the following:

• (a) the activities, goods or services in association with which it is proposed to be used;
• (b) the conditions under which the goods or services will be produced or supplied or the persons to be employed in the production or supply of the goods or services; and
• (c) the place of origin of the goods or services. (fausse et trompeuse)

Section 42(1) defines terms used in the section related to the requirements and limits for Corporate Names.

The definition of “corporate name” is currently “the name of a corporation.” Yes, you read that correctly. So that definition is being deleted.

The phrase and definition of “deceptively misdescriptive” is added to the list of defined terms for this section of the regulations.

Section 50 of the Regulations is replaced by the following:

50 For the purpose of subsection 13(1) of the Act, a corporate name is prohibited if it is confusing with a name that is reserved under subsection 12(1) of the Act, unless the person for whom the name was reserved consents in writing to the use of the name.

Section 50 falls under the heading “Confusing Names.” This amendment doesn’t appear to change the effect of the section but makes the phrasing clearer.

Paragraph 51(a) of the Regulations is replaced by the following:

• (a) “cooperative”, “coopérative” or “co-op” when it connotes a cooperative venture;

Paragraph 52(d) of the Regulations is replaced by the following:

• (d) carries on the business of a bank, loan company, insurance company, trust company or another financial intermediary that is regulated by the laws of Canada, unless the Superintendent of Financial Institutions confirms in writing that the words that are used in the name and that are regulated by section 983 of the Bank Act, section 47 of the Insurance Companies Act or section 47 of the Trust and Loan Companies Act are authorized to be used under the applicable Act; or

Section 54 of the Regulations is replaced by the following:

54 (1) For the purpose of subsection 13(1) of the Act, a corporate name is prohibited if an element of the name is the family name – whether or not it is preceded by the given name or initials – of an individual who is living or has died within 30 years before the day on which the Director receives the document referred to in section 9 or 201 or subsection 208(4), 211(5), 215(5), 216(6) or 219(3) of the Act or a request to reserve the name under subsection 12(1) of the Act.

(2) Despite subsection (1), the corporate name is not prohibited if

• (a) the individual or their heir or personal representative consents in writing to the use of the individual’s name and the individual has or had a personal or other connection to the corporation; or
• (b) the person proposing to use the corporate name establishes that it has been used in Canada or elsewhere by them or their predecessors so as to have become distinctive in Canada.

Sections 51-55 outline general prohibitions for corporate names.

Section 51 prohibits corporate names that contain certain elements. The new 51(a) removes the word “pool” from the list of prohibited terms/elements.

Section 52 prohibits corporate names that connote the corporate does something, such as carrying on activities under royal authority. The new 52(d) clarifies that the Superintendent of Financial Institutions can consent to the use of a name that connotes the corporation carries on the business of a bank, etc. if authorization can be found in other specific legislation.

Section 54 sets out prohibitions on corporate names that have elements of a family name. There is an exception where the family name is from an individual who is living or has died within 30 years. The amendment moves this exception from the “non-distinctive names” prohibitions (s 56) into the “family name” section of the general prohibitions (s 54). Written consent to the use of the name or prior use in Canada or elsewhere so as to become distinctive in Canada are exceptions to the prohibition.

Paragraph 56(1)(b) of the Regulations is replaced by the following:

• (b) is primarily or only the name — or the first name or family name used alone — of an individual; or

(2) Subsection 56(2) of the Regulations is replaced by the following:

(2) Despite subsection (1), the corporate name is not prohibited if a person proposing to use the corporate name establishes that it has been used in Canada or elsewhere by them or by their predecessors so as to have become distinctive in Canada.

Section 56 deals with non-distinctive names. The new 56(1)(b) revises the section by removing the 30-year exception for using a family name. The new 56(2) clarifies the language but does not substantively change the subsection.

Section 57 of the Regulations is replaced by the following:

57 For the purpose of subsection 13(1) of the Act, a corporate name is prohibited if it is deceptively misdescriptive.

Section 57 deals with “Deceptively Misdescriptive Names”. The current section 57 explains what a deceptively misdescriptive name is meant to capture. The new section 57 simple states that deceptively misdescriptive names are prohibited; the meaning of the term has been moved to the definitions section.

The post Changes to Canada Not-for-profit Corporations Act Regulations Effective August 2022 appeared first on CCCC Blogs.

Capital gains tax would be reduced to zero if listed conditions are met. Some of those conditions include:

• that the gift is made within 30 days after the disposition
• that any advantage received is accounted for
• that the purchaser is at arm’s length to both the taxpayer and the charity

This is the second time this bill has been introduced. In November 2020, it’s predecessor Bill C-256 was introduced but when the election was called, the bill died. Similar legislation was also introduced in 2015 but was never enacted.

Senate Report

The Senate Report on the charitable sector, Catalyst for Change, dedicates an entire section to this topic. It outlines the potential advantages and disadvantages to eliminating capital gains tax on donations of the proceeds from private company share and real estate sales.

Advantages and disadvantages are listed together and include:

• increased funding for the sector
• equity between entrepreneurs (those who keep companies private versus those who take them public)
• equity among charities (there was debate amongst the witnesses on the breadth of benefit that would result),
• taxpayer equity (with debate about whether it would disproportionately benefit wealthier donors and the advantages of voluntary wealth redistribution)
• cost to the federal government (estimated amount of charitable donation tax credit that would result is $65-70 million)

In the end, the committee recommended that Canada Revenue Agency launch a pilot project to evaluate the impact on the charitable sector of exemptions donations of private shares from capital gains tax.

Potential Impact of C-240

Bill C-240 moves forward with a similar proposal but avoids the difficulties of in-kind donations and valuation by incentivizing the proceeds rather than the shares or property themselves.

Whenever donations are incentivized, proper safeguards need to be in place to prevent manipulation and abuse, but when those are in place, expanding sources of donations for charities is good news for the sector.

Charities add to the richness and strength of our nation and positively impact local communities where we live, learn, worship, and serve.  Healthy charities help create strong civil societies. CCCC is generally supportive of policies like this one that promote greater civic engagement by encouraging charitable donations, especially in light of lingering pandemic-related challenges.

CCCC Community Trust Fund Can Help with Publicly-Traded Securities

In the meantime, you might be wondering about whether you can donate publicly-traded securities. The answer is a big yes! And we can help you donate through our CCCC Community Trust Fund.

Not all charities have the necessary set-up to receive your donated securities, but that’s where CCCC can help. From the enhanced tax benefits of donating securities (no capital gains tax!) to the practical matters of valuation, receipting and accounting, we’ve got answers for donors and fundraisers. It’s all on our Community Trust Fund page. And if you can’t find what you’re looking for we invite you to reach out to us directly at ctf@cccc.org or 519-669-5137.

The post Private Shares, Real Estate & Donations: Changes Proposed by Bill C-240 appeared first on CCCC Blogs.