by Dev User | Sep 30, 2020 | Uncategorized
September 2020 Charity & NFP Law Update
Imagine Canada recently released its report entitled Are Charities Ready for Social Finance? Investment Readiness in Canada’s Charitable Sector (the “Report”). For purposes of the Report, “social finance” is defined as being “an investment that seeks a measurable social, cultural, and/or environmental impact as well as a financial return for the investor(s).” The Report was sponsored by the federal government’s Investment Readiness Program, a two-year pilot program to support social purpose organizations, consisting of charities, not-for-profits, and for-profit social enterprises (“SPOs”)”, in the context of the $755 million Social Finance Fund, which is expected to contribute to the availability of social finance capital to SPOs. For background information on the Social Finance Fund, see the April 2019 Charity & NFP Law Update.
Based on a survey of over 1000 Canadian registered charities, the Report classifies the responses to the survey in five key themes regarding social finance: awareness and opinions, barriers, organizational capacity, debt experience, and demand.
First, regarding awareness of social finance, the Report highlights that two-thirds of respondents stated either that they had never heard of social finance or knew little about it, suggesting that a large number of charities have a low awareness of social finance. Second, among the potential barriers to seeking a social finance loan, more than one in five respondents said their organization is not currently involved in earned income activities, they are uncertain about their ability to repay, or their board would not consider or approve of a social finance loan. Third, in terms of organizational capacity, about a third of respondents expressed concern about their ability to raise unrestricted funds when needed, draw on diverse range of revenue sources, collect evaluation data, assess full social/environmental impact of work, consistently and predictably generate an operating surplus, and draw on existing assets when needed. Fourth, regarding debt experience, the Report states that almost half of charities do not currently hold any debt, and those that do would not be considered social finance loans. Finally, the Report states that a majority of charities are not interested in taking out a social finance loan.
However, the Report states that charities with larger annual revenues are more likely to report being aware of and holding positive opinions about social finance, report holding (or would consider taking) a social finance loan, and indicate having a stronger organizational capacity to access social finance.
The Report concludes that many charities are likely not investment-ready. Among the various considerations supporting this conclusion, the Report states that charities are not participating in the social finance market due to the risk-averse position of boards of directors, in addition to lack of knowledge, experience, and expertise in social finance. The Report further states that in addition to investment readiness, the design of funds and financial instruments made available would also have an impact on whether social purpose organizations are able to access social finance.
Read the September 2020 Charity & NFP Law Update
by Dev User | Sep 30, 2020 | Uncategorized
September 2020 Charity & NFP Law Update
Charities and not-for-profits paying minimum wage to their employees in Ontario must give them a raise. To comply with the rising minimum wage pursuant to subsection 23.1(4) of Ontario’s Employment Standards Act, 2000 (“ESA”), employers will have to pay at least $0.25 per hour more for employees when the statutory general minimum wage increases from $14.00 to $14.25 per hour, as of the 1st of October, 2020. The ESA does not make an exception for charities and not-for-profits. Also, under Section 23.1 of the ESA, the general minimum wage is adjusted for different classes of employees:
- For employees who are students under 18 years of age “if the student’s weekly hours do not exceed 28 hours or if the student is employed during a school holiday,” the minimum wage increases from $13.15 to $13.40 an hour;
- “For employees who, as a regular part of their employment, serve liquor directly to customers, guests, members or patrons in premises for which a licence or permit has been issued under the Liquor Licence Act and who regularly receive tips or other gratuities from their work,” the increase is from $12.20 to $12.45 an hour;
- For homeworkers — including student homeworkers — their rates increase from $15.40 to $15.70 an hour. Homeworkers are defined under the ESA as individuals who perform work “for compensation in premises occupied by the individual primarily as residential quarters but does not include an independent contractor”;
- For hunting and fishing or wilderness guides, their minimum rates also increase, with variations depending on their number of hours worked;
- For all other workers, the new general minimum wage rate of $14.25 applies.
Subsection 23.1(4) of the ESA provides that the minimum wage is adjusted based on the increase in the Consumer Price Index (“CPI”) between the previous calendar year and the year preceding that, published by Statistics Canada, rounded up or down to the nearest 5 cents. Unless the CPI drops, annual minimum wage increases on the 1st of October are expected. Employers must ensure they are compliant with these laws. Subsection 23.1(6) of the ESA states that the minimum wage does not decrease, regardless of the change in the CPI.
Read the September 2020 Charity & NFP Law Update
by Dev User | Sep 30, 2020 | Uncategorized
September 2020 Charity & NFP Law Update
On August 31, 2020, the British Columbia Court of Appeal released its decision in Tucci v Peoples Trust Company. The decision concerned the certification of a class action against the defendant financial services provider, Peoples Trust Company (“PTC”), which in 2013 suffered a data breach compromising the personal information of its customers. The clients affected by this breach initiated the class action seeking compensation for harm caused by the dissemination of their personal information.
By way of background, PTC maintained on its webserver an unencrypted copy of a database containing a considerable amount of personal information pertaining to its online customers, including names, addresses, email addresses, telephone numbers, dates of birth, social insurance numbers, occupations, and, in the case of credit card applicants, their mothers’ birth names. PTC failed to apply adequate cyber-security safeguards, including patches and software updates, leaving its database vulnerable to bad actors.
In the lower court’s decision, the judge accepted that there were arguable claims for breach of contract and for negligence and held that an arguable claim for breach of privacy or intrusion upon seclusion could be advanced under federal common law.
PTC appealed the lower court’s decision with regard to the certification of claims framed in breach of contract and negligence, and from certification of claims under federal common law. PTC argued that the terms of use set out on its website clearly exclude liability for data breaches, an issue which the lower court judge did not address in its decision. PTC also argued that the Personal Information Protection and Electronic Documents Act (“PIPEDA”) constitutes a complete code that comprehensively regulates all aspects of personal information collection, retention, and disclosure in the federally-regulated private sector, and that therefore no action, other than an application to the Federal Court as contemplated by PIPEDA, can be brought in respect of a data breach.
On appeal, the court found no error in the lower court’s certification of the class proceedings for breach of contract and negligence. The court rejected PTC’s argument that PIPEDA was intended to be a complete code and held that it does not displace common law remedies. The court pointed out that caution should be exercised in concluding that PIPEDA was intended to abolish existing private law rights, particularly because it applies to the private sector and not to public bodies exercising a statutory mandate.
The court noted that this case involved private law relations between private citizens and a commercial enterprise and found nothing in PIPEDA to suggest that it was intended to prevent aggrieved parties from pursing common law causes of action. The court stated that it was “unfortunate” that there had been no appeal of the lower court’s ruling that no cause of action for breach of privacy or intrusion upon seclusion exists in British Columbia. Going further, the court stated that the time may have come for it to revisit its jurisprudence on the tort of breach of privacy, pointing to the Court of Appeal for Ontario’s 2012 decision in Jones v Tsige, discussed in Charity Law Bulletin No. 277, which recognized the common law tort of intrusion upon seclusion, and stating that “a failure to recognize at least some limited tort of breach of privacy may be seen by some to be anachronistic.” The court further stated that “the interesting question of whether the law needs to be rethought will have to await a different appeal.”
The court pointed out that the division of powers between the federal and provincial levels of government is not “watertight” and that there are areas in which either level of government can properly introduce legislation. The court rejected the lower court’s finding that there is a “federal common law”, holding that there is neither a “federal” nor “provincial” common law, but rather a single common law covering matters within federal and provincial jurisdiction. The court therefore set aside the lower court’s certification of claims under federal common law.
This decision is a reminder that claims for breach of privacy and negligence are an ever-present risk faced by all types of organizations, including charities and not-for-profits, and that appropriate data security measures must be taken to protect personal information under an organization’s control.
Read the September 2020 Charity & NFP Law Update
by Dev User | Sep 30, 2020 | Uncategorized
September 2020 Charity & NFP Law Update
A decision on costs has been released by the Court of Appeal for Ontario in Friends of Toronto Public Cemeteries Inc. v Public Guardian and Trustee concerning the legal battle between Friends of Toronto Public Cemeteries Inc. and Kristyn Wong-Tam (collectively, the “FTPC”) and Mount Pleasant Group of Cemeteries (“MPGC”). The Court of Appeal had ruled in favour of MPGC on the substantive matters concerning the nature and governance of MPGC on May 5, 2020, finding that MPGC was not a charitable purpose trust subject to the Charities Accounting Act (“CAA”) and affirming that an investigation by the Public Guardian and Trustee (“PGT”) was not required. For further discussion of the Court of Appeal’s decision on the substantive matters see Charity & NFP Law Bulletin No. 473.
In light of MPGC’s successful appeal and cross-appeal, it sought a total of $625,000 in costs from FTPC for the appeal, cross-appeal, and initial application. Although the PGT had been brought in as a respondent, MPGC did not seek costs from the PGT. FTPC, however, argued against costs on the bases that (i) they had brought the application solely in the public interest and for no personal gain; (ii) their application was successful on “the fundamental underlying issue in the case,” being the existence of a statutory trust, which was conceded by MPGC at the last minute; and (iii) they were successful against MPGC’s argument that FTPC had no standing. They also argued, in the alternative, that even if FTPC was not a public interest litigant, Ms. Wong-Tam was, and costs should not be awarded personally against her.
The court followed a previous Court of Appeal decision in citing that the factors to be considered in determining whether an unsuccessful party should be exempt from paying costs because it was acting in the public interest include: “the nature of the litigants, whether the nature of the dispute was in the public interest, whether the litigation had any adverse interest on the public interest, and the financial consequences to the parties”. MPGC argued, among other reasons, that FTPC was not a public interest litigant because it was incorporated specifically for the purpose of this litigation and “does not rise above being an interloper or busybody.” It also argued that Ms. Wong-Tam joined the litigation in her personal capacity to provide standing to FTPC and was aware of her potential exposure for costs, particularly given that she and FTPC had an oral understanding and draft written agreement to indemnify her against adverse costs orders.
The court found that there was an element of “NIMBYism (not in my back yard)” present in the litigation, given that residents near other MPGC cemeteries did not file any affidavits on the application. The fact that MPGC was a statutory trust, as eventually conceded by MPGC, was also “a factor that imports a public element.” Further, it found that the PGT had supported FTPC’s application, but not its request for an investigation under section 10 of the CAA. In the court’s view, “[a]ccess to justice would tend to favour treating the respondents as public interest litigants.” With regard to Ms. Wong-Tam, the court found that she had chosen to participate as an individual rather than in her capacity as a city councillor. Finally, the court found that the application judge had previously found that FTCP and Ms. Wong-Tam were public interest litigants for the purposes of standing, and found no reason to overturn the application judge’s decision on the matter.
The court therefore found that FTPC and Ms. Wong-Tam, in her personal capacity, were public interest litigants, but this conclusion did not preclude a costs award against them. It was only a factor in determining the quantum of the award. Taking into account the importance of the issues, the proceedings’ complexity, and FTPC’s reasonable expectations as the unsuccessful party, the court considered that it was “fair and reasonable” to award $350,000 in costs to be paid by FTPC to MPGC. Further, given Ms. Wong-Tam’s secondary role in the litigation, and the fact that she had an unexecuted indemnity from FTPC, the court restricted her exposure to $10,000.
This decision on costs is an important reminder of the high stakes and potential costs involved in litigation. Even where parties are identified as public interest litigants, courts may still award costs (and, as in this case, high costs) against such unsuccessful litigants, particularly where the surrounding circumstances deem it appropriate to do so.
Read the September 2020 Charity & NFP Law Update
by Dev User | Sep 30, 2020 | Uncategorized
September 2020 Charity & NFP Law Update
Substantial amendments to Saskatchewan’s The Lobbyists Act (the “Act”) came into force September 14, 2020, bringing the Act more in line with other provinces’ legislation, as well as improving transparency and accountability. Changes to the Act were introduced through The Lobbyists Amendment Act, 2019, which received Royal Assent on July 3, 2020. In the provincial government’s announcement describing the amendments, then Justice Minister and Attorney General Don Morgan indicated that “[t]his legislation will ensure the public knows who is lobbying and who plans to lobby elected officials in Saskatchewan.”
The Act applies to “individuals who are paid to lobby by a client (a consultant lobbyist) and organizations with employees whose duties include lobbying on their behalf (an in-house lobbyist),” according to the government’s announcement. Among the legislated changes:
- A new provision prohibiting in-house lobbyists or consultant lobbyists from providing gifts, favours or other benefits to public office holders.
- Requiring non-profit organizations, without a charitable mandate, to register any in-house lobbyists. There will be an exception for non-profit charitable organizations with less than five employees who spend a total of less than 30 hours annually lobbying.
- A threshold reduction for registration as an in-house lobbyist from 100 hours to 30 hours annually.
Ontario’s threshold registration for in-house lobbyists is set at 50 hours annually, pursuant to sections 5 (persons and partnerships) and 6 (organizations) of the Lobbyists Registration Act, 1998.
See the August 2019 Charity & NFP Law Update for more information on lobbying and elections legislation in Canada.
Read the September 2020 Charity & NFP Law Update
