{"id":25994,"date":"2017-08-23T13:45:56","date_gmt":"2017-08-23T17:45:56","guid":{"rendered":"https:\/\/www.cccc.org\/news_blogs\/?p=25994"},"modified":"2018-10-10T09:32:08","modified_gmt":"2018-10-10T13:32:08","slug":"payments-to-charity-directors-ontario-proposes-changes","status":"publish","type":"post","link":"https:\/\/www.cccc.org\/news_blogs\/legal\/2017\/08\/23\/payments-to-charity-directors-ontario-proposes-changes\/","title":{"rendered":"Payments to Charity Directors – Ontario Proposes Changes"},"content":{"rendered":"

Authored by Philip A.S. Milley, Associate Director, Legal Affairs<\/em><\/p>\n

NOTICE: Since the publication of this article certain legislative changes were implemented. The July 2018 edition of the CCCC Bulletin, accessible here<\/a>, discusses the implemented changes.\u00a0<\/em><\/strong><\/p>\n

On July 10, 2017, the Government of Ontario announced<\/a> that it is considering loosening the rules regarding the remuneration of charity directors. If the government’s proposal is implemented, incorporated charities could be permitted to pay directors in certain circumstances, without having to obtain an order (the “proposed changes”).<\/p>\n

Current Position<\/h6>\n

The Public Guardian and Trustee takes the position<\/a> that a charity director must act gratuitously, meaning that a director cannot be paid for acting in the capacity of a director, or for providing services to the charity in any other capacity, unless authorized by court order pursuant to section 13 of the Charities Accounting Act<\/a>\u00a0<\/em>(the “Act”) and the court is satisfied that it is in the best interest of the charity to do so.<\/p>\n

Proposed Changes<\/h6>\n

The proposed regulation, under the Act, seeks to balance a charity’s need to enter into advantageous transactions with the need to protect the public’s interest, in protecting from the misuse of charitable property. The proposed changes would permit charities to pay their directors and those related to them for goods, services, or facilities provided to the charity. For example, the proposal would allow, subject to various conditions, a charity to rent facilities owned by a director. However, certain prohibitions would remain, such as the prohibition of a director being compensated for services as an employee.<\/strong><\/span><\/p>\n

Eight Conditions<\/h6>\n

The proposal outlines eight conditions that are to be required before a payment to a director or their relative may occur. The conditions are:<\/p>\n

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  1. The payment must be made with a view to the charity’s best interests;<\/li>\n
  2. The payment must be in an amount that is reasonable for the goods, services or facilities provided;<\/li>\n
  3. The payment must not result in the amount of the debts and liabilities of the charity exceeding the value of the charity or render the corporation insolvent;<\/li>\n
  4. Before the board may authorize the payment:\n