Practical Strategies for Dealing with Termination of Contracts in a Pandemic

by | Apr 12, 2020 | Uncategorized

April 2020 Charity & NFP Law Update

The ongoing COVID-19 pandemic in Canada has caused an unprecedented situation with a unique set of challenges for organizations, including charities and not-for-profits (“NFPs”). Due to the governmental PAGE 6 OF 20 April 2020 www.carters.ca www.charitylaw.ca restrictions and the continually evolving advisories and guidelines, organizations have been forced to face difficult decisions regarding operations, not just in the immediate future, but also to make decisions regarding future operations that are weeks and months down the road. As a result, many charities and NFPs are having to consider cancellation or postponement of events and programs through either cancelling those events outright or rescheduling a wide variety of contractual obligations in the face of the COVID-19 pandemic. The results are far-reaching, including the loss of donations and/or program-related income, which could mean potentially significant monetary losses. As such, it is critical to consider what practical strategies may be available to help minimize or possibly eliminate contractual losses or damages. This Bulletin outlines some practical strategies for charities and NFPs to consider in this regard. For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 472. 

Read the April 2020 Charity & NFP Law Update

Direction and Control: Current Regime and Alternatives
COVID-19 UPDATE
–   Ontario PGT Allows Access to Restricted Charitable Purpose Funds
–   COVID-19 Federal Government Support for Charities and NFPs
–   COVID-19 CRA News
–   COVID-19 Provincial Emergency Relief for AGM and Annual Return Filing Deadlines
–   Practical Strategies for Dealing with Termination of Contracts in a Pandemic
–   Federal Privacy Commissioner Releases Privacy Framework for COVID-19
–   Canada Emergency Wage Subsidy (“CEWS”): An Overview for Charities and NFPs
OTHER CHARITY AND NFP MATTERS
–   Corporate Update
–   Ontario Court Decision Provides Reminder to Carefully Follow By-laws
–   Membership in Religious Society Reinstated by Court for Unfair Expulsion
–   Carters is Pleased to Welcome Heidi LeBlanc as a New Associate
–   Friend of CAGP Award

 

COVID-19 Provincial Emergency Relief for AGM and Annual Return Filing Deadlines

by | Apr 12, 2020 | Expertise, Real Estate Law

April 2020 Charity & NFP Law Update

Provincial governments across Canada have called states of emergencies and implemented social distancing measures as a result of the COVID-19 pandemic. This has caused some difficulty for corporations, including charities and NFPs, particularly with regard to general corporate maintenance matters, including filing annual returns and holding annual general meetings (“AGMs”). To help cope with the effects of COVID-19, various governments have implemented emergency relief measures to assist and provide some flexibility with annual return and AGM deadlines.

For federal corporations under the Canada Not-for-Profit Corporations Act (“CNCA”), the deadline to file annual returns for corporations whose anniversary date is between February 1 and June 30, 2020 has been extended to September 30, 2020, while the filing period for all federal act corporations has been extended to April 1 to September 30, 2020. However, CNCA corporations that are not able to call an PAGE 5 OF 20 April 2020 www.carters.ca www.charitylaw.ca AGM within the required timeframe under the CNCA may apply to Corporations Canada to extend the time for calling an AGM if requirements under their polices are met.

In Ontario, Emergency Order (Ontario Regulation 107/20) was adopted by the Ontario Government on March 30, 2020 to provide relief during the COVID-19 pandemic to corporations under the Corporations Act. The Ontario Regulation 107/20 was amended on April 24, 2020. In this regard, corporations under the Ontario Corporations Act may hold board and members’ meetings during the COVID-19 pandemic electronically despite any provision in the letters patent, supplementary letters patent or by-laws that provides otherwise. As well, they may delay holding their 2020 AGMs during the COVID-19 emergency. If the AGM was originally required to be held during the state of emergency in Ontario, the AGM can be delayed until no later than the 90th day after the day the state of emergency is terminated. If the AGM was originally required to be held within 30 days after the state of emergency is terminated, the AGM can be delayed to be held no later than the 120th day after the day the emergency is terminated. Annual returns required to be filed by these corporations can be delayed until the time when they file their tax/information returns with CRA.

In Alberta, the deadline to hold AGMs and file annual returns have been suspended. In British Columbia, societies may hold virtual or hybrid board and members’ meetings, even where their by-laws and incorporating legislation do not otherwise permit. Societies will have until December 31 to hold their AGMs, although section 71 of the Societies Act provides certain flexibility to delay an AGM beyond that date (including filing the Annual Report as “No Meeting Held” on January 1st and filing online for extensions, which can be granted up to March 31 of the following year). Corporations in Nova Scotia may also hold virtual or hybrid members’ meetings even where their by-laws and incorporating legislation do not otherwise permit. Alternatively, any required in-person members’ meetings can be deferred up to 90 days after the end of the state of emergency. In Saskatchewan, the failure by a non-profit to file returns or pay fees would not result in it being stricken from the government registry as a result of the COVID-19 emergency. 

Read the April 2020 Charity & NFP Law Update

Direction and Control: Current Regime and Alternatives
COVID-19 UPDATE
–   Ontario PGT Allows Access to Restricted Charitable Purpose Funds
–   COVID-19 Federal Government Support for Charities and NFPs
–   COVID-19 CRA News
–   COVID-19 Provincial Emergency Relief for AGM and Annual Return Filing Deadlines
–   Practical Strategies for Dealing with Termination of Contracts in a Pandemic
–   Federal Privacy Commissioner Releases Privacy Framework for COVID-19
–   Canada Emergency Wage Subsidy (“CEWS”): An Overview for Charities and NFPs
OTHER CHARITY AND NFP MATTERS
–   Corporate Update
–   Ontario Court Decision Provides Reminder to Carefully Follow By-laws
–   Membership in Religious Society Reinstated by Court for Unfair Expulsion
–   Carters is Pleased to Welcome Heidi LeBlanc as a New Associate
–   Friend of CAGP Award

 

 

COVID-19 Federal Government Support for Charities and NFPs

by | Apr 12, 2020 | Uncategorized

April 2020 Charity & NFP Law Update

Since the COVID-19 outbreak was declared a pandemic by the World Health Organization, the federal and provincial governments have continued to introduce different measures to assist businesses and organizations, including charities and not-for-profits (“NFPs”), that are impacted by the economic fallout of the COVID-19 pandemic. This Charity & NFP Law Bulletin provides what is intended to be a helpful overview of the key federal government measures that have become or are expected to soon become available for charities and NFPs. For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 471.

Read the April 2020 Charity & NFP Law Update

Direction and Control: Current Regime and Alternatives
COVID-19 UPDATE
–   Ontario PGT Allows Access to Restricted Charitable Purpose Funds
–   COVID-19 Federal Government Support for Charities and NFPs
–   COVID-19 CRA News
–   COVID-19 Provincial Emergency Relief for AGM and Annual Return Filing Deadlines
–   Practical Strategies for Dealing with Termination of Contracts in a Pandemic
–   Federal Privacy Commissioner Releases Privacy Framework for COVID-19
–   Canada Emergency Wage Subsidy (“CEWS”): An Overview for Charities and NFPs
OTHER CHARITY AND NFP MATTERS
–   Corporate Update
–   Ontario Court Decision Provides Reminder to Carefully Follow By-laws
–   Membership in Religious Society Reinstated by Court for Unfair Expulsion
–   Carters is Pleased to Welcome Heidi LeBlanc as a New Associate
–   Friend of CAGP Award

 

 

Ontario PGT Allows Access to Restricted Charitable Purpose Funds

by | Apr 12, 2020 | Uncategorized

April 2020 Charity & NFP Law Update

Many charities in Ontario are experiencing economic hardships as a result of the COVID-19 pandemic. In light of the difficulties faced by charities, the Office of the Public Guardian and Trustee for Ontario (“PGT”) released a temporary guidance, entitled Accessing Restricted Purpose Trust Funds Prior to Obtaining a Court Order During the COVID19 Pandemic (the “Temporary Guidance”), on March 30, 2020, to provide certain relief to charities in danger of closing. Under the Temporary Guidance, the PGT will permit such charities to access the income and capital of their restricted purpose trust funds and to PAGE 3 OF 20 April 2020 www.carters.ca www.charitylaw.ca use these funds where necessary to continue their day-to-day operations without the need to first obtain a court order. Subsequently, the PGT provided additional clarity to its Temporary Guidance by releasing a question and answer document entitled Q&A’s re: PGT Temporary Guidance on Accessing Restricted Purpose Funds (the “Q&As”) on April 20, 2020. This Bulletin provides a brief summary of the PGT’s Temporary Guidance and Q&As. These measures are only applicable to charities in Ontario. For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 470.

Read the April 2020 Charity & NFP Law Update

Direction and Control: Current Regime and Alternatives
COVID-19 UPDATE
–   Ontario PGT Allows Access to Restricted Charitable Purpose Funds
–   COVID-19 Federal Government Support for Charities and NFPs
–   COVID-19 CRA News
–   COVID-19 Provincial Emergency Relief for AGM and Annual Return Filing Deadlines
–   Practical Strategies for Dealing with Termination of Contracts in a Pandemic
–   Federal Privacy Commissioner Releases Privacy Framework for COVID-19
–   Canada Emergency Wage Subsidy (“CEWS”): An Overview for Charities and NFPs
OTHER CHARITY AND NFP MATTERS
–   Corporate Update
–   Ontario Court Decision Provides Reminder to Carefully Follow By-laws
–   Membership in Religious Society Reinstated by Court for Unfair Expulsion
–   Carters is Pleased to Welcome Heidi LeBlanc as a New Associate
–   Friend of CAGP Award

 

Direction and Control: Current Regime and Alternatives

by | Apr 12, 2020 | Expertise, Real Estate Law

April 2020 Charity & NFP Law Update

For many years, the charitable sector has pointed out that the Canadian regulatory regime has made it extremely difficult for registered charities to engage in international charitable work or work in Canada with non-qualified donees. To do so, charities are required to structure the activities in a cumbersome, contorted manner in order to fit within the Canada Revenue Agency’s (“CRA”) interpretation of the “own activities” test in the Income Tax Act (“ITA”) and the CRA’s policy requiring charities to exercise direction and control over those activities. The Canadian regulatory regime in this regard is unique when compared to other jurisdictions globally in that it is the most onerous and at times impractical to comply with. This difficulty is compounded with uncertainty concerning what charities are required to do in order to comply with these requirements. Although the CRA’s policies differ in some manner in relation to what charities are required to do in order to comply with the requirements and what they are recommended to do, not implementing the recommended mechanisms often lead to problematic outcomes on CRA audits.

This paper was written for and published by The Pemsel Case Foundation, and reviews the current direction and control regime, and explores potential new approaches to regulatory oversight in this area by proposing changes to the legislation and the CRA’s polices. For the balance of this paper, please see Direction and Control: Current Regime and Alternatives.

Read the April 2020 Charity & NFP Law Update

Direction and Control: Current Regime and Alternatives
COVID-19 UPDATE
–   Ontario PGT Allows Access to Restricted Charitable Purpose Funds
–   COVID-19 Federal Government Support for Charities and NFPs
–   COVID-19 CRA News
–   COVID-19 Provincial Emergency Relief for AGM and Annual Return Filing Deadlines
–   Practical Strategies for Dealing with Termination of Contracts in a Pandemic
–   Federal Privacy Commissioner Releases Privacy Framework for COVID-19
–   Canada Emergency Wage Subsidy (“CEWS”): An Overview for Charities and NFPs
OTHER CHARITY AND NFP MATTERS
–   Corporate Update
–   Ontario Court Decision Provides Reminder to Carefully Follow By-laws
–   Membership in Religious Society Reinstated by Court for Unfair Expulsion
–   Carters is Pleased to Welcome Heidi LeBlanc as a New Associate
–   Friend of CAGP Award