Mar 2019 Charity & NFP Law Update
The Special Senate Committee on the Charitable Sector (the “Committee”) held three meetings in February and March 2019 to hear from witnesses in its study of the impact of laws and policies on the charitable and not-for-profit sector and the impact of the voluntary sector in Canada. One meeting was held on February 25 and two meetings were held on March 18. Videos of each meeting are available on the Committee website, and transcripts are also posted online, usually a few weeks after the meetings occur.
On February 25, 2019, the Committee heard from a number of witnesses representing small and large charitable organizations from across Canada involved in the development of youth leadership, refugee work, faith-based camps, academic circles and others. Challenges that were highlighted by some of the witnesses include the need to attract and retain volunteers in the sector, as well as financial barriers faced by smaller organizations that have difficulty paying a sustainable living wage to employees while maintaining low-cost programs accessible to low-income beneficiaries. Some of the recommendations presented by witnesses included removal of the capital gains tax on donations of real estate and company asset donations to help support charitable giving to universities; an exemption for charitable organizations from Canada’s anti-spam legislation due to the administrative burden and updating the data collected on the charitable sector.
On the morning of March 18, 2019, the Committee heard from executives of charitable and non-profit organizations, individual witnesses, and other professionals from the sector. Topics presented at the hearing included the need for sustained government support for the sector (as opposed to disjointed legislative responses to specific problems that may arise from time to time); a clear legislative framework to outline the legal parameters that apply to the sector, given that a number of the current laws are confusing and open to both abuse and lack of use; a review of requirements that apply to “non-profit organizations” under paragraph 149(1)(l) of the Income Tax Act; and updating of antiquated legal requirements that apply to fundraising opportunities for charities, such as raffles and 50/50 draws. Given the importance of charitable fundraising to support charitable programs, several initiatives were presented to increase trust in charitable fundraising, as well as a recommendation that professional fundraising be accepted as a legitimate practice.
Also during the morning, the Canadian Council of Christian Charities (“CCCC”) presented its comments regarding the continuation of advancement of religion as a charitable purpose because of its many public benefits. In that regard, CCCC noted that Canadian society benefits from having a strong core of Canadians whose religious beliefs and teachings inspires them to find fulfillment in serving others; and that Statistics Canada data reveals that religious people support secular charities financially and through volunteerism, more than nonreligious people do, greatly increasing the support that the non-religious have available to them. In addition, CCCC noted that many non-religious people benefit from community support programs run by places of worship, such as marriage and parenting seminars, after school programs, tutoring, seniors’ programs and others.
In the afternoon of March 18, 2019, the Committee heard from more representatives and individuals involved in the sector, including representatives of Canadian charities providing international humanitarian services, including Islamic Relief Canada, a Canadian-Muslim humanitarian organization. Witnesses shared about the financial and operational challenges faced when trying to comply with onerous requirements that apply to registered charities to exercise “direction and control” over humanitarian programs carried out overseas (as well as other requirements that apply under the Income Tax Act and CRA requirements), while attempting to fulfil programming objectives, such as achieving localized sustainable development goals encouraged by Global Affairs Canada. Committee meetings will continue on April 1, 2019.