by Dev User | Nov 25, 2021 | Uncategorized
Nov 2021 Charity & NFP Law Update
In Gateway Bible Baptist Church et al v Manitoba et al, released on October 21, 2021, the Manitoba Court of Queen’s Bench has upheld various public health orders implemented by the government of Manitoba in response to the COVID-19 pandemic as constitutional. In this case, seven churches and three individuals (the “Applicants”) challenged the constitutionality of specific sections of Manitoba’s Emergency Public Health Orders (“PHOs”), arguing that those sections, together with restrictions on public gatherings, gatherings in private residences and the temporary closure of places of worship, infringed, among other freedoms, their section 2(a) freedom of conscience and religion under the Canadian Charter of Rights and Freedoms (“Charter”).
The Applicants sought, in part, a declaration that the violations could not be saved under section 1 of the Charter. They argued, in part, in favour of “herd immunity”, and that places of worship could safely hold indoor services with minimal spread by following guidelines recommended by the Centers for Disease Control and Prevention.
As the province conceded that section 2 of the Charter had been infringed by the PHOs, it contended instead that the limits on any section 2 rights are “constitutionally defensible in that they are reasonable, proportionate and justified in order to address a serious public health emergency: a global pandemic with grave, sometimes deadly consequences.” However, the court clarified that the PHOs restricted, rather than infringed, Charter rights, and that the Oakes test would be applied to determine if the restriction was justifiable under section 1 of the Charter, by asking (1) whether the legislative goal is “pressing and substantial” and sufficiently important to justify limiting a Charter right, and (2) whether the means employed is proportionate to the objective.
In examining evidence put forth by both the Applicants and the province, the court found differing views and interpretations of evolving scientific information, and considered whether there is nonetheless, a sufficiently sound and credible evidentiary basis (even in light of any opposing evidence) for Manitoba’s claim that the limitations and restrictions placed on certain fundamental freedoms represent valid policy approaches which are reasonably justified and constitutionally defensible in Canada’s free and democratic society.
The court found that “the credible science that [the province] invoked and relied upon, provides a convincing basis for concluding that the circuit-break measures, including those in the impugned PHOs, were necessary, reasonable and justified.”
Having found that the section 2(a) Charter freedom of conscience and religion had been restricted, the court considered the pressing and substantial nature of the PHO restrictions. The court found that the objectives were “clearly meant to protect public health and more specifically, they are meant to save lives, prevent serious illness and stop the exponential growth of the virus from overwhelming Manitoba’s hospitals and acute healthcare system”, a point which the Applicants did not contend. The PHO objectives were therefore sufficiently pressing and substantial.
With regard to the proportionality part of the Oakes test, the court found that the PHOs’ limits on gatherings (including places of worship) were rationally connected to the goal of reducing the spread of COVID-19, given that “the risk of transmission is particularly high in gatherings involving close contact for prolonged periods”. It also found that the measures in the PHOs minimally impaired the rights at issue, since the province required a “quick and clear response” and there was no evidence of significantly less intrusive measures that might have been equally effective. Finally, it considered the balance between the identifiable beneficial and deleterious effects of the PHO restrictions, finding that the evidence “unquestionably demonstrates that the salutary effects of the limitation far outweigh those effects that may be characterized as deleterious,” particularly in light of the benefits of the provincial response in the face of the threat of a deadly pandemic. It therefore found that, while the PHOs may have restricted section 2 Charter rights, those restrictions were justifiable under section 1, and upheld the PHOs as constitutional.
While the case also considers other matters, including administrative law matters and the doctrine of paramountcy, it is a clear example of the court’s ability balance the Charter right to freedom of conscience and religion with conflicting legislation and government measures.
Read the November 2021 Charity & NFP Law Update
by Dev User | Nov 25, 2021 | Uncategorized
Nov 2021 Charity & NFP Law Update
Bill C-2 Introduced to Provide Further COVID-19 Financial Support
After the resumption of Parliament, the Deputy Prime Minister and Minister of Finance tabled Bill C-2, An Act to provide further support in response to COVID-19 (“Bill C-2”), which underwent First Reading on November 24, 2021. Bill C-2 amends the Income Tax Act and Income Tax Regulations to extend COVID-19 relief subsidies provided through the Canada Emergency Wage Subsidy (“CEWS”), the Canada Emergency Rent Subsidy (“CERS”), as well as the Canada Recovery Hiring Program (“CRHP”) until May 7, 2022.
As reported in the October 2021 Charity & NFP Law Update, the CEWS and CERS had terminated and the federal government had announced that they would not be renewed as of October 23, 2021, instead to be replaced with a proposed replacement program, the Hardest-Hit Business Recovery Program (the “Hardest-Hit Program”). However, Bill C-2 instead proposes an extension of subsidies under the CEWS and CERS, made available to certain organizations including “the hardest-hit organizations that face significant revenue declines”.
To be eligible for CEWS and CERS subsidies through the Hardest-Hit Program, eligible entities would need to demonstrate a revenue loss of at least 50% over the past 12 months, as well as a current-month revenue decline of at least 50%. Subsidies would be available at a rate of up to 50%.
Bill C-2 will also extended the CRHP until May 7, 2022 for “eligible employers with current revenue losses above 10% and increase the subsidy rate to 50%”, according to the federal government’s news release. As also discussed in the October 2021 Charity & NFP Law Update, the CRHP provides eligible employers who have experienced “qualifying revenue declines” with a subsidy based on eligible salary or wages to help hire new workers or increase their current workers’ hours or wages, with a subsidy rate of 50%.
Ontario Extends Powers to Amend and Extend Emergency Orders
The Government of Ontario has extended its powers to keep emergency orders under the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020 (the “Reopening Act”) in place until March 28, 2022. The government’s powers to amend and extend orders was previously set to expire on December 1, 2021, but were extended when Government motion 8 was carried on division on November 23, 2021.
Orders under the Reopening Act are set out in the regulations under the acts, and generally concern the following subject matter:
1. Closing or regulating any place, whether public or private, including any business, office, school, hospital or other establishment or institution.
2. Providing for rules or practices that relate to workplaces or the management of workplaces, or authorizing the person responsible for a workplace to identify staffing priorities or to develop, modify and implement redeployment plans or rules or practices that relate to the workplace or the management of the workplace, including credentialing processes in a health care facility.
3. Prohibiting or regulating gatherings or organized public events.
Of particular note, Ontario Regulation 364/20, Rules for Areas at Step 3 and at the Roadmap Exit Step, which sets out the general rules and regulations regarding how businesses may open and operate during the COVID-19 pandemic, including social distancing, masking, and vaccine passport requirements, has been frequently amended in response to the rapidly evolving pandemic, and will now continue to be able to be amended through to March 28, 2022.
Read the November 2021 Charity & NFP Law Update
by Dev User | Nov 25, 2021 | Uncategorized
Nov 2021 Charity & NFP Law Update
No ‘Irreparable Harm’ to Employees for COVID-19 Workplace Vaccination Policy: ONSC
Ontario’s Superior Court of Justice (“ONSC”) dissolved an injunction it had granted to University Health Network (“UHN”) employees to suspend the termination of their employment for non-compliance with a UHN mandatory vaccination policy. Justice Dunphy had granted the temporary injunction in Blake v University Health Network (“Blake”) on an October 22, 2021 motion for six days, and then dissolved the injunction in a preliminary hearing on October 28, 2021. The court ruled that the dispute between the employees, some of whom were unionized, and their employer, was not within the ONSC’s jurisdiction, but was within the ambit of the collective bargaining agreement, and should therefore be resolved as policy grievances in an arbitration process. Justice Dunphy (“Dunphy J”) stated that dissolving the injunction did not address “the question of the merits or legality of the vaccine policy adopted by the UHN.” However, Dunphy J held that without jurisdiction to decide the issue, the court could not maintain the injunction.
The court applied the tripartite test in RJR-MacDonald Inc. v Canada (Attorney General) to assess whether the injunction could be continued.
a. Is there a serious issue to be tried on the question of liability?
b. Is there a real potential for irreparable harm to ensue if relief is not granted? and
c. Does the balance of convenience favour the granting of relief at this early stage?
As the court did not have jurisdiction to examine the issue for those employees subject to the collective bargaining agreement, Dunphy J held that the plaintiffs failed to satisfy part a. of the test: where there is no jurisdiction, there is no serious issue to be tried. For the non-unionized employees, Dunphy J outlined the freedom to terminate the employment relationship, with or without cause, for private sector employers:
As a general rule, private-sector employment may be terminated at will outside of the collective bargaining sphere in Ontario. Where cause is not alleged, or if cause is alleged and not proved, compensation is payable to the employee. The level of compensation may be a function of a written contract, of statutory minimum standards or of the common law. Given that fundamental principle, it is hard to see how any plaintiff who is not in a union can allege irreparable harm arising from threatened termination of employment. If the termination of their employment is not justified, they are not entitled to their job back – they are entitled to money. Money, by definition is not only an adequate remedy it is the only remedy.
Consequently, non-unionized employees could not satisfy part b. of the RJR test for irreparable harm, according to Dunphy J. This rationale has already been cited as precedent in a November 13, 2021 Federal Court case, Lavergne-Poitras v Canada (Attorney General), 2021 FC 1232, in which the plaintiff also unsuccessfully sought an injunction to suspend the implementation of a federal government “COVID-19 vaccination requirement for supplier personnel.”
Some of the non-unionized plaintiffs in Blake alleged a violation of their rights under the Ontario Human Rights Code, but Dunphy J held that the evidentiary record did not yet establish “a serious issue to be tried that the impugned vaccine policy contravenes the anti-discrimination provisions of the Code as regards any of them”. That does not “preclude such proof being led at some later date,” but it was insufficient to justify the continuance of an injunction based “solely on that narrow speculative ground.”
Arbitrators decide both for and against reasonableness of workplace COVID-19 vaccination policies
Two recent labour arbitration awards in Ontario reached different conclusions on the reasonableness of employers’ COVID-19 workplace vaccination policies, demonstrating the significance of how a decision maker interprets and applies the relevant laws to the particular facts in each situation. In an award on November 9, 2021, United Food and Commercial Workers Union, Canada Local 333 and Paragon Protection Ltd., Arbitrator F.R. von Veh dismissed United Food and Commercial Workers Union, Canada Local 333’s (“UFCW”) policy grievance and found that Paragon Protection Ltd.’s (“Paragon”) COVID-19 vaccination policy — including an exemption policy for accommodation under the Ontario Human Rights Code (the “Code”) — was “reasonable, enforceable and compliant” with the Code and Paragon’s obligations under the Occupational Health and Safety Act (the “OHSA”) (“UFCW and Paragon Award”). There was a different result in Electrical Safety Authority and Power Workers’ Union, a November 11, 2021 award (“ESA and PWU Award”), as Arbitrator John Stout decided that Electrical Safety Authority’s (“ESA”) mandatory COVID-19 vaccination policy was unreasonable “to the extent that employees may be disciplined or discharged for failing to get fully vaccinated.”
Paragon employs 4400 security guards at 450 client sites in Ontario, Arbitrator von Veh observed, and the majority of those clients have implemented their own vaccination policies that require contractors, such as Paragon’s security guards, to be fully vaccinated in order to work at their sites. Paragon’s policy fulfilled legal obligations under the Code and the OHSA, according to Arbitrator von Veh, who referred to the Ontario Human Rights Commission’s (“OHRC”) policy statement “on COVID-19 vaccine mandates and proof of vaccine certificates”, which states that “personal preferences” do not amount to a “creed” under the Code, and are therefore not protected as a ground for discrimination that requires accommodation by the employer. Given the “wealth of scientific information available on the pandemic and COVID-19”, Arbitrator von Veh found that “personal subjective perceptions of employees to be exempted from vaccinations cannot override or displace available scientific considerations.” As is common in collective bargaining, the collective agreement between Paragon and UFCW included a management rights clause, which allowed Paragon to “make, enforce and alter, from time to time, reasonable rules and regulations to be observed by employees.” The collective agreement also specifically included an article for employees to agree to receive “vaccination or inoculation” based on site-specific work requirements.
In the ESA and PWU Award, Arbitrator Stout’s decision turned on the reasonability of ESA’s exercising the management rights clause in the parties’ collective agreement. A significant difference from the UFCW and Paragon Award is the lack of any specific article in the collective agreement that addresses vaccinations. There is no “legislated requirement” for employees to be vaccinated, Arbitrator Stout noted, and no court decision or arbitration award that upholds a mandatory vaccination policy “without specific collective agreement language or legislative authority, outside of a healthcare or long-term care setting.” Arbitrator Stout distinguished his award from the UFCW and Paragon Award due to the absence of this specific language in the collective agreement. While high-risk workplaces, such as in healthcare or long-term care, may justify mandatory vaccinations for all employees,
However, in other workplace settings where employees can work remotely and there is no specific problem or significant risk related to an outbreak, infections, or significant interference with the employer’s operations, then a reasonable less intrusive alternative, such as the ESA’s voluntary vaccination disclosure and testing policy (VVD/T Policy) employed prior to October 5, 2021, may be adequate to address the risks.
Due to the fluid and evolving nature of the pandemic, however, “[w]hat may be unreasonable at one point in time is no longer unreasonable at a later point in time and vice versa.” Arbitrator Stout found that the “vast majority” of work by ESA employees could be effectively undertaken remotely “and many employees have a right to continue working remotely under the Collective Agreement.” Citing the Supreme Court of Canada’s decision in Machtinger v HOJ Industries, Arbitrator Stout viewed it unjust to discipline or discharge an employee for failing to be vaccinated “when it is not a requirement of being hired and where there is a reasonable alternative”. The Power Workers’ Union (“PWU”) grievance was allowed and the ESA directed to amend their vaccination policy “to make it clear that employees shall not be disciplined or discharged for failing to get vaccinated” and that a testing option should be provided for those who have not been vaccinated.
These two awards demonstrate the importance of the decision maker’s interpretation of laws, facts and the circumstances of the COVID-19 pandemic generally, in assessing the reasonability of a workplace COVID-19 vaccination policy. A significant difference in the two awards was the inclusion of specific article in the UFCW and Paragon collective agreement requiring employees to agree to a vaccination, whereas the ESA and PWU collective agreement did not include that language.
While these cases are interesting analyses of vaccination policies in unionized workplaces, it should be noted that a court of law is not required to follow arbitration awards because they are not binding. Therefore, there still remains much uncertainty about how the law will develop with regards to COVID-19 vaccination policies and charities and not-for-profits are encouraged to keep abreast of the latest developments.
Read the November 2021 Charity & NFP Law Update
by Dev User | Nov 25, 2021 | Uncategorized
Nov 2021 Charity & NFP Law Update
Two resources are now available for charities and not-for-profits in Ontario to become better informed about community impact investing. The Cooperation Council of Ontario, Ontario Trillium Foundation, and Canadian CED Network partnered together to produce Community Investment in Ontario: Status and Prospects (the “Report”) as well as Start-up and Operations Guide: Ontario Community Investment Co-operative (CIC) (the “Guide”). The two resources adopt distinct yet complementary perspectives about community investment organizations, with the Report providing helpful contextual information about community investments, and the Guide providing generalized, practical information for groups interested in developing their own community investment cooperative.
The Report considers what the literature reflects about the state of the current ecosystem in Ontario for community investment organizations. In addition, it considers issues such as what type of legal structure (as a business, non-profit, or cooperative) a community investment organization could adopt. For added context, the Report goes through a comparative analysis of the different kinds of engagement with community investment organizations that individuals across Canada have had.
The Guide sets out the phases an organization should expect to go through in the development of a community investment cooperative. For example, it prompts individuals to consider the community needs and opportunities, to create a development timeline, to establish partnerships, and to keep records of necessary legal documents. The Guide also includes 31 appendices consisting of templates, surveys, and manuals anyone looking to create a community investment cooperative can use.
Read the November 2021 Charity & NFP Law Update
by Dev User | Nov 25, 2021 | Uncategorized
Nov 2021 Charity & NFP Law Update
The Department of Finance Canada (“Finance Canada”) ended its consultation on the disbursement quota (“DQ”) on September 30, 2021. Imagine Canada, a leading voice for Canada’s charitable sector, and the Pemsel Foundation, a leading Canadian think tank on legal issues involving charities, have recently released copies of their submissions to Finance Canada on the DQ consultation. The two submissions reflect a number of shared positions, as well as some differing views, concerning what should be done with the DQ in the future.
As explained in Charity & NFP Law Bulletin No. 498, the DQ, in general terms, is the minimum amount that a charity must spend on its charitable activities or gifts to qualified donees to ensure that charitable funds are used for charitable purposes and are not accumulated indefinitely. It is based on the value of a charity’s property that is not used for charitable activities or administration, and is currently set at a rate of 3.5% for charities, regardless of whether they are charitable organizations, public foundations or private foundations.
Imagine Canada published its submission on the DQ consultation on November 8, 2021, in which it advocates for “a scaled disbursement quota designed to infuse new funds and reflect the different realities of the foundation community.” By way of an example, Imagine Canada explains that a scaled disbursement quota could keep the minimum threshold at 3.5% for “smaller organizations” with less than $1 million in assets, which could then increase to “7% and beyond for larger organizations.” Imagine Canada envisions a system where there would be “a mandated review of the disbursement quota at five year intervals” and proposes, among other recommendations, that this periodic review be grounded “in the principle of ‘intergenerational justice’” so that the current generation may have decision-making authority over the timing of the release of funds for public benefit.” In addition to the current generation, Imagine Canada recommends that the sector be engaged with in reviewing DQ policy, including proactively seeking input from grantees, potential grantees and other organizations, but notably those having points of view coming from “outside the legal and foundation communities.”
Many of the DQ discussions to date have also considered how the T3010, Registered Charity Information Return can be improved. Imagine Canada makes several suggestions about improving the T3010, including identifying the causes of T3010 completion errors, implementing transparency and accountability measures through the T3010, and applying an “equity principle” to these measures through the T3010 process. It further recommends that the T3010 ask trustees and directors for more information about donor advised funds (also known as “DAFs”), including their link to the organization’s disbursement and accumulation strategy.
Imagine Canada’s comments on the need for improvement of the T3010 are shared by the Pemsel Foundation, which published its research series on the DQ consultation on October 18, 2021. The Pemsel Foundation’s analysis (focusing on available T3010 data) suggests that there are significant issues around data collection and enforcement, which should be addressed before, or in tandem with legislative changes, including in relation to the DQ. This approach will ensure that policy initiatives and the ensuing consultations are evidence driven.
The Pemsel Foundation also recommends that the CRA’s Charities Directorate undertake educational and compliance measures to ensure better data, including ensuring that T3010 data is complete and accurate. While the Pemsel Foundation does not recommend that information about DAFs be included in the T3010, it does recommend that information be obtained and consideration given to whether the disbursement quota should be applied to existing donor-advised funds within a charity.
However, the Pemsel Foundation’s approach to the DQ differs in some respects from Imagine Canada’s, most notably in that it recommends that no change to the disbursement quota be made “without better data.” The Foundation recommends the federal government’s DQ consultation be limited as much as possible to the disbursement quota rate and if the rate were to increase, that there be publicly available plans to later assess the impact of such a change. The Pemsel Foundation also recommends that an examination be made of how and the degree to which existing tools are used by the CRA for compliance and enforcement measures. Further, the Pemsel Foundation goes on to point out that having additional compliance tools without more enforcement by the CRA “would not be productive.”
Charities will want to carefully follow the discussion about the DQ in the coming months, particularly watching out for what is included in the 2022 Federal Budget about it. As is evident from both of these most recent submissions, the DQ continues to be a topic for which there is a wide variety of opinions, as well as differing recommendations within the charitable sector in Canada. In light of the DQ’s long history of complicated taxation provisions and earlier initiatives for reform and simplification of past DQ iterations, it remains to be seen how and in which direction the DQ will evolve in the future. Hopefully, the DQ will not revert to one of its earlier and more complicated versions which necessitated that charities regularly hire lawyers and/or accountants in order to ensure their ongoing DQ compliance.
Read the November 2021 Charity & NFP Law Update
