AODA Accessibility Compliance Reports Due June 30

by Dev User | Jun 24, 2021 | Uncategorized

Jun 2021 Charity & NFP Law Update

Charities and non-profits with 20 or more employees have until June 30, 2021 to submit accessibility compliance reports. As reported in the October 2020 Charity & NFP Law Update, the deadline for submission was initially December 31, 2020, but a half-year extension was given to provide some relief in response to the COVID-19 pandemic.

Accessibility compliance reports are required under subsection 14(1) of the Accessibility for Ontarians with Disabilities Act and must be submitted in order to meet the Act’s current accessibility requirements. Failure to complete accessibility compliance reports by the extended June 30, 2021 deadline could result in enforcement action, including financial penalties. To assist organizations with completing and submitting the report, instructions are available online from the Government of Ontario.

Read the June 2021 Charity & NFP Law Update

Privacy Law Update

by Dev User | Jun 24, 2021 | Uncategorized

Jun 2021 Charity & NFP Law Update

Ontario Gov’t Publishes Paper, Hosts Public Consultations for Privacy Law Reform

Ontario’s Ministry of Government and Consumer Services (MCGS) wants to improve privacy law in the province and provide better legislative coverage to charities and not-for-profits. In a White Paper, published on June 17, 2021, titled “Modernizing Privacy: Empowering Ontarians and Enabling the Digital Economy”, the provincial government describes its vision to “make Ontario the world’s most advanced digital jurisdiction” (the “Paper”). The Paper notes “several points of weakness” in the federal Bill C-11, Digital Charter Implementation Act, 2020, introduced into the House of Commons on November 17, although it has yet to pass first reading. Bill C-11 would replace the current federal privacy regime under the Personal Information Protection and Electronic Documents Act (PIPEDA). Coinciding with the White Paper’s publication the province announced a Public Consultation on Modernizing Privacy in Ontario, from June 17 to August 3 (the “Public Consultation”).

While accepting that Bill C-11 “includes some welcomed new developments”, the Paper criticizes how the federal bill’s “consent framework could allow organizations to collect and use citizens’ data for commercial interests without their knowledge; it does not provide special protections for children and youth; and its digital rights do not go far enough to protect individuals from new risks such as surveillance.” After considering feedback from a 2020 privacy consultation, the Paper states the provincial government’s commitment to a “fundamental right to privacy for Ontarians”. This would involve introducing additional safeguards for artificial intelligence, “dedicated protections for children, update consent rules to reflect the modern data economy, promote responsible innovation and correct the systemic power imbalances that have emerged between individuals and organizations that collect and use their data.”

The Paper discusses seven thematic areas for privacy legislation reform in Ontario:

• rights-based approach to privacy;
• safe use of automated decision making;
• thoughtful consent and lawful uses of personal data;
• data transparency for Ontarians;
• protecting children and youth;
• a fair, proportionate and supportive regulatory regime; and
• support for Ontario businesses and innovators.

According to the Paper, there are significant gaps in the federal privacy regime, which is limited to commercial activities. Many private sector organizations, including charities, unions, associations and other non-profits, would not be covered under the proposed Bill C-11, “despite the collection and use of Ontarians’ personal information by these organizations,” the Paper states. The province is considering expanding the scope of privacy requirements under each of the seven themes discussed in the Paper, “to include non-commercial organizations, ensuring that Ontarians’ personal information receives adequate coverage and protection in every aspect of life.”

The webpage for the Public Consultation states “MCGS is seeking feedback from organizations, impacted stakeholders and the general public on these proposals for improving privacy protections in Ontario.” A public information webpage on the Ontario government website: “Strengthening privacy protection in Ontario” offers a summary of the Paper’s proposed legislative reforms and themes for public feedback.

Privacy Commissioners of Canada Comment on Vaccine Passports in Joint Statement

Vaccine passports are “an encroachment on civil liberties that should be taken only after careful consideration”, according to a statement from Canada’s Privacy Commissioners. The Office of the Privacy Commissioner of Canada published the “Joint Statement by Federal, Provincial and Territorial Privacy Commissioners” on May 19, 2021, titled Privacy and COVID-19 Vaccine Passports (the “Joint Statement”). In response to some “governments and businesses” considering vaccine passports “as a means of allowing a return to something more closely resembling normal life” amidst the COVID-19 pandemic, the Joint Statement was issued “in an effort to ensure that privacy is considered at the earliest opportunity as part of any discussions about vaccine passport development.”

The Joint Statement describes vaccine passports as a verified means of proving that an individual has been vaccinated, and may take different forms, “such as a digital certificate presented on a smart phone app or a paper certificate”. Their use is justified based on the idea that individuals who have been vaccinated are at a “significantly decreased risk” of becoming infected or infecting others, according to the Joint Statement, and may provide a “substantial public health benefit.” However, the vaccine passport “presumes that individuals will be required or requested to disclose personal health information– their vaccine/immunity status – in exchange for goods, services and/or access to certain premises or locations” and raises a number of privacy considerations. The Joint Statements states that vaccine passports must comply with applicable privacy laws, incorporate “privacy best practices” and “the necessity, effectiveness and proportionality of vaccine passports must be established for each specific context in which they will be used.” The Joint Statement describes these three criteria:

Necessity: vaccine passports must be necessary to achieve each intended public health purpose. Their necessity must be evidence-based and there must be no other less privacy-intrusive measures available and equally effective in achieving the specified purposes.

Effectiveness: vaccine passports must be likely to be effective at achieving each of their defined purposes at the outset and must continue to be effective throughout their lifecycle.

Proportionality: the privacy risks associated with vaccine passports must be proportionate to each of the public health purposes they are intended to address. Data minimization should be applied so that the least amount of personal health information is collected, used or disclosed. 

These criteria must be continually monitored, the Joint Statement notes, and vaccine passports must be decommissioned if, “at any time, it is determined that they are not a necessary, effective or proportionate response to address their public health purposes.”

The Joint Statement provides that organizations using vaccine passports should limit the collection, use, disclosure and retention of personal health information to that which is necessary for the purpose, and the active tracking or logging of an individual’s activities should not be permitted. Additional consideration must be given to other privacy principles such as transparency, accountability, safeguards, independent oversight as well as limiting the time and scope for the use of information obtained by vaccine passports. Charitable and not-for-profit organizations considering utilizing vaccine passports are encouraged to read the full statement.

Regulators Issue Joint Resolution on Privacy and Access to Information During Pandemic

Canada’s Information and Privacy regulators called on the federal and provincial governments to show leadership by implementing 11 access to information and privacy principles. The 11 principles were adopted as part of a joint resolution published June 2, 2021 by the federal, provincial and territorial information and privacy commissioners and ombudsman (the “Joint Resolution”). In the Joint Resolution, “regulators took note of the serious impact of the COVID-19 pandemic” on Canadians’ quasi-constitutional privacy rights as well as the right of access to information. The global pandemic accelerated concerning trends, already ongoing prior to March 2020, about “increasing surveillance by public bodies and private corporations and the slowing down of processing access requests,” according to the Joint Resolution. The COVID-19 pandemic also “highlighted the need to modernize the access to information system by leveraging technology and innovation to advance transparency.”

The 11 principles are divided into two categories. “In terms of Access” sets out five access- related principles, including calling for federal provincial and territorial institutions to recognize the importance of transparency and ensuring that business continuity plans include measures for processing access requests during emergencies, providing clear guidance on information management, and emphasizing proactive and voluntary disclosure of government information.

Six privacy-related principles are set out “In terms of Privacy”, including calling for a recognition of the “fundamental nature of the right to privacy” to address “digital transformation”, not using privacy laws as a barrier to appropriate collection use and sharing of information but rather, ensuring responsible data use that “supports public health and promotes trust in our healthcare system”, incorporating “privacy by design” to ensure transparency and accountability in the collection and disclosure of personal information for emergency measures, restricting measures that allow collection, use and disclosure of personal information without consent in emergencies to those that are evidence-based, necessary, not overbroad and time limited, destruction of personal information records collected during an emergency after the crisis ends, and respect for the “principles of data minimization and use limitation”. The full Joint Resolution is available on the website of the Information and Privacy Commissioner of Ontario.

Read the June 2021 Charity & NFP Law Update

CAGP Publishes Guidelines on Charitable Donations of Life Insurance

by Dev User | Jun 24, 2021 | Uncategorized

Jun 2021 Charity & NFP Law Update

In recent years, insurance industry regulators have expressed concern over donations of life insurance. Most prominently, the British Columbia Financial Institutions Commission (“FICOM”), now the BC Financial Services Authority (the “BCFSA”), took the position in November 2019 that charities soliciting or accepting donations of life insurance policies from BC residents was considered “trafficking” in contravention of BC’s Insurance Act. It should be noted, though, that BCFSA subsequently clarified its position that bona fide charities were not prohibited from soliciting donations of life insurance policies or benefits, which was discussed in the May 2020 Charity & NFP Law Update.

Following these concerns, the Canadian Association of Gift Planners (“CAGP”) published the Charitable Donation of Life Insurance Package – CAGP Guidelines (the “Guidelines”) in March 2021 in response to recommendations that interested parties “establish best practices to ensure appropriate processes and measures are followed when making use of insurance products for charitable donation purposes.” The Guidelines are published as four separate sets of guidelines tailored to the various parties involved, including guidelines for donors, advisors, charities, and insurers, and are all applicable to both policy transfers as well as the setup of new charitably-owned policies.

Of particular interest to charities, the Guidelines for Canadian Charities (“Charity Guidelines”) was designed to assist charities with making informed decisions about accepting gifts of life insurance policies. The Charity Guidelines are also intended to help charities remain compliant with provincial regulators by minimizing the risks of taking part in the trafficking of life insurance policies, such as Stranger-Owned Life Insurance (STOLI) and viatical settlements, both of which are currently prohibited in almost all Canadian provinces apart from Quebec and Saskatchewan.

The Charity Guidelines set out best practices for determining whether a valid relationship exists between a charity and a donor prior to a gift being made, for example whether the donor has a history of donating to or volunteering with the charity. While the absence of an existing relationship does not make a gift illegitimate, charities are warned to proceed with caution and to ensure that the donor has a clear, philanthropic intent beyond simply obtaining a tax receipt. The Charity Guidelines also set out best practices regarding the transfer itself, including ensuring the donor obtains appropriate independent advice about the gift, and that the charity accepts the insurance policy as a gift rather than purchasing the policy from the donor. Charities are also advised to obtain a detailed illustration of the insurance policy and conduct an independent review of the policy to determine its viability. In this regard, due diligence questions are provided for charities to consider during their review.

The Charity Guidelines also outline preferred types of policies for charities, including “limited pay” policies, which minimize the risk that donors may need to make lengthy commitments to a long premium paying periods. Charities are warned to exercise “extreme caution” in cases of split-dollar donations where donors retain ownership of part of the policy due to their complicated and risky nature, as well as against sharing ownership of policies with other charities.

The Charity Guidelines then provide guidance on interacting with insurance advisors, for example refraining from compensating any advisors that interact with the donor as an incentive to transfer the policy (though unrelated third-party advisors may be paid to provide an independent analysis of the proposed policy). Once they become owners of the policy, charities are not obligated to retain the same advisor as the policy’s advisor of record. Finally, a charity donation checklist is provided to help charities ensure that all proper steps and due diligence have been taken leading up to the gift.

Three supplemental documents are also included with the Guidelines, including: (1) Understanding Tax Receipting of Charitable Gifts of Life Insurance; (2) How to use Life Insurance as a Charitable Gift; and (3) What is Insurance Trafficking?

As they are best practices guidelines only, the Charity Guidelines are obviously optional. However, they are a very helpful and comprehensive resource that set out a standard of best practices for all parties involved in the gift of a life insurance policy, and will be of great interest to charities, donors, as well as advisors and insurers. As such, the Charity Guidelines will serve as an excellent resource for charities to ensure that the risks of accepting gifts of life insurance policies are minimized for all parties involved.

Read the June 2021 Charity & NFP Law Update

Corporate Update

by Dev User | Jun 24, 2021 | Uncategorized

Jun 2021 Charity & NFP Law Update

Public Consultation on CNCA Launched

As part of review of the Canada Not-for-profit Corporations Act (“CNCA”), the Minister of Innovation, Science and Industry (the “Minister”) launched a public consultation on the CNCA (the “Consultation”) on June 18, 2021. The CNCA requires the Minister to provide a report to Parliament on the provisions and operation of the CNCA and any recommendations for amendments ten years after it came into force. This report would then be referred to a Senate committee, the House of Commons, or both for study and report. The Consultation will allow the government to assess whether the CNCA is currently meeting its objectives of ensuring transparency, accountability and good governance standards, and is intended to provide a framework for public consultations that will contribute to the Minister’s report.

The consultation paper indicates that the statutory review follows the 2019 Report of Senate Special Committee on the Charitable Sector, “Catalyst for Change: A Roadmap to a Stronger Charitable Sector”, which provided 42 recommendations as discussed in Charity & NFP Law Bulletin No. 451, but refrained from making corporate law recommendations, noting the upcoming statutory review of the CNCA.

The Consultation’s primary focus is on the merits of amending the CNCA, and is divided into sections discussing issues identified by stakeholders or that have emerged since 2011. These include issues related to audit and financial reporting obligations; boards of directors; hybrid and virtual decision-making; classes of membership; members’ rights; permitted distribution of assets; and recent developments in business corporations legislation. Each section concludes with a question that stakeholders are invited to comment on. Stakeholders are also invited to comment on other matters not directly addressed in the Consultation, including whether and how other modifications to the CNCA may be warranted.

Stakeholders may provide written comments by July 30, 2021, with submissions provided electronically in plain text or in a Word document emailed to: [email protected]

Ontario Prepares for ONCA Implementation through New Regulations and Business Registry

Two regulations supporting the implementation of the Ontario Not-for-Profit Corporations Act, 2010 (“ONCA”) and 12 regulations supporting the upcoming launch of the Ontario Business Registry were filed on June 3, 2021.

Ontario Regulation 395/21, General and Ontario Regulation 396/21, Corporations Sole – Application of Act and Regulations, both under the ONCA, were initially released as draft regulations in June 2020, as discussed in the June 2020 Charity & NFP Law Update. Ontario Regulation 395/21 contains provisions related to technical matters under the ONCA, and Ontario Regulation 396/21 lists provisions under the ONCA that apply to corporations sole. The two filed regulations generally remain unchanged from their draft forms, with changes to Ontario Regulation 395/21 including amendments to provisions concerning authorization of representatives, proxies, and notice by electronic means. The two regulations will come into force after certain sections of both the ONCA and Bill 154, Cutting Unnecessary Red Tape Act, 2017 come into force.

As well, Ontario Regulation 394/21, Names and Filings under the ONCA is among the 12 regulations supporting the upcoming launch of the Ontario Business Registry, together with regulations under various Ontario corporate statutes, including the Ontario Corporations Act, Corporations Information Act, Extra-Provincial Corporations Act, and Business Names Act. Draft forms of these regulations (except Ontario Regulation 405/21, General under the Business Regulation Reform Act, 1994) were previously released in June 2020 for consultation. Broadly speaking, the regulations will come into force after certain sections of Bill 154, Cutting Unnecessary Red Tape Act, 2017 come into force.

The filing of these regulations will facilitate the launch of the digital Ontario Business Registry, which the Government of Ontario anticipates will launch later this year. The proclamation of the ONCA is contingent on the launch of the Ontario Business Registry. The Ontario Business Registry is a new online platform that will provide digital solutions for Ontario not-for-profits and other entities that are registered, incorporated or licensed to carry on business in Ontario. It allows these entities to complete registrations and other filings online.

Ontario Bill 276 Receives Royal Assent