Carters is Pleased to Welcome Martin U. Wissmath as a New Associate

Jun 2021 Charity & NFP Law Update

Carters is pleased to welcome Martin U. Wissmath, B.A., J.D., as an associate. Martin joins Carters after completing his articles with the firm and being called to the Ontario Bar in 2021. Martin assists the firm’s knowledge management and research division covering a broad range of legal issues in charity and not-for-profit law. He has experience in journalism, working as a reporter for local newspapers in Alberta and British Columbia. Martin will also be practicing in the area of social enterprise and social finance.


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Ontario Superior Court Addresses COVID-19 Temporary Layoff Provisions But Uncertainty Remains

Jun 2021 Charity & NFP Law Update

It is “just common sense” that a law intended to provide relief to employers during a state of emergency should not, as a result, subject them to wrongful dismissal claims, according to the Ontario Superior Court. Such a situation is inherently unfair and “would only serve to make the economic crisis from the pandemic even worse.” This reasoning is from Taylor v Hanley Hospitality (“Taylor”), released June 7, 2021, which ruled on the legal effect of Infectious Disease Emergency Leave (“IDEL”) provisions. IDEL was added to the Ontario Employment Standards Act, 2000 (“ESA”) by the provincial legislature last year and set by a government regulation in response to the COVID-19 pandemic. Amendments to the ESA introduced in May 2020 provided that all temporary layoffs relating to COVID-19 are deemed to be IDEL, retroactive to March 1, 2020, and continuing until the end of the COVID-19 period, which was recently extended to September 25, 2021. Charities and not-for-profits in Ontario are also impacted by this issue in considering the risks of placing employees on temporary leave for reasons related to COVID-19.

The decision in Taylor contradicts an April 27, 2021 judgment from the Ontario Superior Court in Coutinho v Ocular Health Centre Ltd. (“Coutinho”), leaving the current law in an uncertain state. The court in Coutinho held that IDEL, which gives employers the option to place employees on leave for reasons related to COVID-19, does not preclude employees from claiming constructive dismissal under the common law. The court in Taylor, on the contrary, ruled that allowing constructive dismissal claims at common law would render IDEL useless; therefore, according to established precedent, the statutory provisions must displace the possibility for employees to claim their common law rights. The disagreement between the two cases also involves the legal interpretation of “constructive dismissal” according to the common law, and its meaning under the ESA. This Charity & NFP Law Bulletin examines and compares the reasoning in both cases.

For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 497.


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COVID-19 Employment Update

Jun 2021 Charity & NFP Law Update

Ontario’s Deemed Infectious Disease Emergency Leave for Workplaces Extended

The Government of Ontario has again extended the availability of Infectious Disease Emergency Leave (“IDEL”) under the Ontario Employment Standards Act, 2000 (“ESA”), which will continue to provide unpaid, job-protected leave during the COVID-19 pandemic to employers and employees in Ontario. IDEL, which was previously extended until July 3, 2021, as discussed in the January 2021 Charity & NFP Law Update, will now be available until September 25, 2021. Ontario Regulation 412/21 was filed on June 4, 2021 to extend the “COVID-19 Period” in Ontario Regulation 228/20, Infection Disease Emergency Leave and under section 50.1 of the ESA.

The extension of the COVID-19 period means that non-unionized employees who have been temporarily laid off due to an infectious disease emergency, such as the COVID-19 pandemic, will not be deemed to be laid off or constructively dismissed, but instead will be deemed to be on IDEL until September 25, 2021, providing them with unpaid by job-protected leave during the pandemic. According to the Government of Ontario, as of September 26, 2021, employees on IDEL will no longer be deemed to be on unpaid IDEL, and the regular rules concerning constructive dismissal and temporary layoffs under the ESA will resume. Please see Charity & NFP Law Bulletin No. 497 below regarding recent court decisions regarding deemed IDEL and constructive dismissal actions.

July 1st mandatory immunization policy for Ontario long-term care homes

A new government directive for long-term care homes in Ontario requires either proof of COVID-19 vaccination, a documented medical exemption, or participation in a vaccine education program. The Ministry of Long-term Care published the directive on May 31, 2021, and it will be effective starting July 1, 2021 (the “Directive”). Under section 174.1(1) of the Long-Term Care Homes Act, 2007 (the “Act), the Minister “may issue operational or policy directives respecting long-term care homes where the Minister considers it to be in the public interest to do so.” The Directive’s stated objectives are to:

  • set out a provincially consistent approach to COVID-19 immunization policies in long-term care homes
  • optimize COVID-19 immunization rates in long-term care homes
  • ensure that individuals have access to information required to make informed decisions about COVID-19 vaccination

Accordingly, the Directive will require that all staff, student placements and volunteers in Ontario long-term care homes provide at least one of the following three options:

  1. Proof of COVID-19 vaccine administration as per the following requirements:
    1. if the individual has only received the first dose of a two-dose COVID-19 vaccination series approved by Health Canada, proof that the first dose was administered and, as soon as reasonably possible, proof of administration of the second dose or
    2. if the individual has received the total required number of doses of a COVID-19 vaccine approved by Health Canada, proof of all required doses
  2. Written proof of a medical reason, provided by either a physician or registered nurse in the extended class, that sets out:
    1. that the person cannot be vaccinated against COVID-19 and
    2. the effective time period for the medical reason
  3. Proof that the individual has completed an educational program approved by the licensee that addresses, at a minimum, all of the following:
    1. how COVID-19 vaccines work
    2. vaccine safety related to the development of the COVID-19 vaccines
    3. the benefits of vaccination against COVID-19
    4. risks of not being vaccinated against COVID-19
    5. possible side effects of COVID-19 vaccination

Licensees under the Act are responsible for ensuring that the policy applies to staff, student placements and volunteers “regardless of the frequency with which they attend the home and regardless of the duration of any period of time they attend the home.” The requirements of the Directive must be met within 30 days for existing workers from July 1, 2021 or the first date that staff, student placements and volunteers attend the long-term-care home for work. Every licensee must provide a written policy to enforce the Directive, ensure it is communicated to workers, and make it available to residents. Consequences for not meeting the requirements must be clearly set out in the policy “in accordance with the licensee’s human resources policies, collective agreements and any applicable legislation, directives and policies.”

The Directive also requires licensees to “collect, maintain, and disclose to the Ministry of Long-Term Care, at a minimum on a monthly basis and in a manner set out by the ministry”, statistical information: the total number of individuals subject to the long-term care home’s policy for the reporting cycle; the total number of individuals who have submitted the proof as per the requirements, broken down by which type of proof was provided; and for each type of proof, the number of individuals who submitted each type of proof who are staff, student placements or volunteers.

The Ministry “may share any and all statistical information provided by licensees pursuant to this Directive with the Ministry of Health or local public health units at any time.”


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Ontario COVID-19 Update

Jun 2021 Charity & NFP Law Update

Ontario Enters Step 1 of Reopening in Province’s “Roadmap to Reopen”

Following its “Roadmap to Reopen”, the Government of Ontario transitioned the province into the first of a three-step plan for reopening the economy on June 11, 2021, after a province-wide shutdown due to the ongoing COVID-19 pandemic. As of June 11, new “Step 1” regulations, set out in Ontario Regulation 82/20, Rules for Areas in Shutdown Zone and at Step 1 (“O Reg 82/20”) under the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020 (“Reopening Ontario Act”), have been in force province-wide, relaxing certain rules restricting workplaces and increasing capacity limits for public events and gatherings.

Schedule 7 of O Reg 82/20 sets out a list of businesses that may be open under Step 1, while Schedule 8 sets out a list of places that must either close or may only be open subject to certain conditions. However, even where a business or organization may be open, it is important for employers, including charities and not-for-profits, to note that restrictions for working remotely under Step 1 still require that staff only be at the workplace if “the nature of their work requires them to be on-site at the workplace”. Where this requirement has not been met, O Reg 82/20 provides each person responsible for an organization that is open “shall ensure that any person who performs work for the business or organization conducts their work remotely.”

As discussed in greater detail in Ontario Moves Into Step 1 of Reopening Regulations, O Reg 82/20 permits outdoor activities and gatherings of up to 10 people, as well as non-essential retail at 15 percent capacity, under Step 1, subject to certain restrictions. Indoor gatherings “for the purposes of a wedding, a funeral or a religious service, rite or ceremony” are permitted at 15% capacity of the room they are held in, while outdoor gatherings for the same purpose have no capacity limits, provided that two metres’ physical distancing can be maintained at all times. Outdoor public events and social gatherings associated with weddings, funerals, and religious services, rites, or ceremonies are allowed up to 10 people, while indoor gatherings for the same purpose continue to be prohibited under Step 1.

Beyond Step 1, the Government of Ontario’s “Reopening Ontario” webpage was updated on June 24, 2021 to indicate that the province would move to Step 2 on June 30, 2021. In support of the transition, Ontario Regulation 263/20: Rules for Areas in Step 2 (formerly Rules for Areas in Stage 2) under the Reopening Ontario Act was amended on June 23, 2021. Under Step 2, the restrictions for working remotely remain the same as those under Step 1, and employers will continue to be  responsible for ensuring that only those who are required to be at the workplace are present remain the same.

The capacity for indoor gatherings for weddings, funerals and religious services, rites and ceremonies will increase from 15% under Step 1 to 25% under Step 2. Outdoor gatherings for the same purpose are permitted provided that all persons present comply with public health guidance on physical distancing. Indoor social gatherings associated with a wedding, funeral, or religious service, rite or ceremony are now permitted to a maximum of 5 people, while the limit for associated outdoor social gatherings has been increased from 10 under Step 1 to 25 under Step 2.


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AML/ATF Update

Jun 2021 Charity & NFP Law Update

Anti-Money Laundering Amendments Include Virtual Currency Reporting Obligations

A series of substantial amendments to regulations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the “Act”) are now in force. The amendments are part of ongoing regulatory changes made over the past two years, which came into force on June 1, 2021 (the “Amendments”). New guidance from the Financial Transactions and Reports Analysis Centre of Canada (“FINTRAC”) is effective as of the same date. Included among the Amendments are new virtual currency obligations for reporting entities (“REs”) under the Act; new definitions; changes to record keeping and ongoing monitoring requirements; and requirements for continuously updating the veracity of beneficial ownership information, which includes beneficial ownership of charities and not-for-profit organizations.

Although usually not considered REs, charities involved in certain activities, such as carrying out a related business that falls under the definition of a money services business (“MSB”) would be included among the REs under the Act and must comply with all applicable obligations. The Amendments have added reporting and record-keeping requirements for all REs for virtual currency transactions of $10,000 or more in a single 24-hour period; MSBs are subject to record keeping requirements for virtual currency transactions of $1,000 or more. MSBs are also required to maintain records for electronic fund transfers of $1,000 or more.

Among the new definitions introduced to the Act are “prepaid payment product” (“PPP”) and “prepaid payment product account” (“PPPA”) along with new obligations for financial entities that issue these. The definition for a PPPA explicitly excludes charities, and means an account — 

other than an account to which only a public body or, if doing so for the purposes of humanitarian aid, a registered charity as defined in subsection 248(1) of the Income Tax Act, can add funds or virtual currency — that is connected to a prepaid payment product and that permits

(a) funds or virtual currency that total $1,000 or more to be added to the account within a 24-hour period; or

(b) a balance of funds or virtual currency of $1,000 or more to be maintained [emphasis added].

The FINTRAC Guidance describes “beneficial owners” as “individuals who directly or indirectly own or control 25% or more of a corporation or an entity other than a corporation” and “cannot be other corporations, trusts or other entities. They must be the individuals who are the owners or controllers of the entity.” New in the Amendments is the extension of beneficial ownership requirements for all RE sectors, including “designated non-financial businesses and professions”, such as accountants, real estate brokers, developers or sales representatives, and agents of the Crown.

According to a notice published by FINTRAC on its website last month, compliance with the regulatory requirements in effect prior to June 1, 2021 will be assessed until March 31, 2022. FINTRAC will begin assessing compliance with the Amendments on April 1, 2022; however, “FINTRAC may assess transactional information for a period prior to April 1, 2022, while exercising reasonability and taking into consideration the flexible measures that FINTRAC has previously communicated in the Notice on forthcoming regulatory amendments and flexibility.”

Charities and not-for-profits, especially those carrying on a related MSB, are encouraged to read the new FINTRAC Guidance for all the requirements and obligations now in force under the Act.


Read the June 2021 Charity & NFP Law Update