By Terrance S. Carter

Bill S-216 Reintroduces the Effective and Accountable Charities Act in the Senate

The Honourable Senator Ratna Omidvar’s Bill proposing amendments to the Income Tax Act to eliminate the “own activities test” and the “direction and control” regime has been reintroduced in the Senate and completed first reading on November 24, 2021. The proposed legislation had been previously set out in Bill S-222, the Effective and Accountable Charities Act (“Bill S-222”), and had passed through the Senate and received First Reading at the House of Commons, as reported in the June 2021 Charity & NFP Law Update. However, Bill S-222 died on the Order Paper when Parliament was dissolved on August 15, 2021.

With the resumption of Parliament on November 22, 2021, the proposed legislation has now been reintroduced as Bill S-216, the Effective and Accountable Charities Act (“Bill S-216”), and will need to pass through the Senate and the House of Commons before it receives Royal Assent. Bill S-216 sets out in essence the same proposed revisions to the Income Tax Act as those contained in Bill S-222, with very minor “housekeeping” amendments.

As explained in the May 2021 Charity & NFP Law Update, Bill S-222, and now its replacement Bill S-216, proposes significant changes to several provisions in the Income Tax Act governing charities to eliminate the “own activities test” and the related Canada Revenue Agency (“CRA”) “direction and control” regime in order to permit charities to provide their resources to qualified donees, provided that charities take reasonable steps to ensure those resources are used exclusively for a charitable purpose.

Ontario Bill 37, Providing More Care, Protecting Seniors, and Building More Beds Act, 2021

The Government of Ontario is proposing to replace the Long-Term Care Homes Act, 2007 (the “2007 Act”) with new legislation, following the final report of Ontario’s Long-Term Care COVID-19 Commission, released on April 30, 2021. Bill 37, Providing More Care, Protecting Seniors, and Building More Beds Act, 2021 was introduced by Ontario’s Minister of Long-Term Care on October 28, 2021, and was carried after its second reading on November 18, 2021. If passed, Bill 37 would repeal the 2007 Act, enact the new Fixing Long-Term Care Act, 2021 (the “2021 Act”), and amend the Retirement Homes Act, 2010.

The 2021 Act largely follows the same structure as the 2007 Act, though a new Part III concerning a mandatory “continuous quality improvement initiative” has been proposed. The preamble to the 2021 Act reiterates the province’s commitment to “the promotion of the delivery of long-term care home services by not-for-profit and mission-driven organizations.” Additionally, and as set out in the provincial government’s news release introducing Bill 37, the 2021 Act is intended to “fix long-term care” by:

• establishing the commitment to provide an average of four hours of daily direct care per resident per day by March 31, 2025
• strengthening the Residents’ Bill of Rights to align with the Ontario Human Rights Code and recognizing the role caregivers play in resident health and well-being
• implementing new requirements for annual resident, family, and caregiver surveys
• establishing new compliance and enforcement tools, including doubling the fines on the conviction of an offence under the proposed legislation
• introducing a Minister’s review of a Director’s decision in the licensing process.

While the 2021 Act references additional details and requirements to be prescribed by regulation, the initial regulations under the Act are not yet available, and must undergo a public consultation process before they can be filed.

Ontario Releases Fall Economic Statement 2021 and Implementation Bill

The Government of Ontario released its 2021 Ontario Economic Outlook and Fiscal Review: Build Ontario (the “Fall Economic Statement”), together with its draft implementing legislation, Bill 43, Building Ontario Act (Budget Measures), 2021 (“Bill 43”) on November 4, 2021. The Fall Economic Statement “lays out how the government will build the foundation for Ontario’s recovery and prosperity” and “protects Ontario’s progress against the COVID-19 pandemic”, according to a government news release.

While the Fall Economic Statement does not contain many measures and legislative proposals specifically targeting charities and not-for-profits, the government has proposed support through funding, including $12.4 million over two years in support of health and long-term care workers’ mental health and addictions; $548.5 million over three years to expand home and community care; $1.6 million over three years to “create a database of diverse, skilled volunteers who will be screened and receive training to help respond to emergencies”; and $10 million over two years in support of the Anti‐Racism Anti‐Hate Grant Program and a new Racialized and Indigenous Support for Entrepreneurs (RAISE).

As announced in the Fall Economic Statement, Bill 43 also proposes to amend subsection 3(1) of the Assessment Act, which sets out the types of property that are exempt from Ontario property taxes. In this regard, in addition to the current exemption for “land owned, used and occupied solely by a university, college, community college or school as defined in the Education Act or land leased and occupied by any of them if the land would be exempt from taxation if it was occupied by the owner”, Bill 43 proposes to also exempt from property taxes:

Land leased and occupied solely by a university if the following conditions are satisfied:

1. the land forms part of the main campus of the university,
2. the land is used for administrative, educational or research purposes or such other purposes as may be prescribed by the Minister,
3. the university is a not-for-profit corporation without share capital, and
4. such other conditions as may be prescribed by the Minister

While the Fall Economic Statement indicates that this amendment is aimed at ensuring that the new Université de l’Ontario français campus is exempt from property tax, this exemption will apply equally to all universities that meet the above-noted requirements, and will allow them to direct funds “to priority initiatives that support students and academic programming.”

​Read the November 2021 Charity & NFP Law Update