Sept 2018 Charity & NFP Law Update
Carters has been ranked as one of only four Canadian law firms under Charities/Non-profits law by Chambers and Partners, an international lawyer ranking service. In addition, Terrance S. Carter has been listed as “one of the best well-known practitioners in the country in the charities and not-for-profit sector.”
Sept 2018 Charity & NFP Law Update
In an e-mail sent to stakeholders on September 18, 2018, and through subsequent amendments to the Charities IT Modernization Project (“CHAMP”) website on September 19, 2018, the Canada Revenue Agency (“CRA”) announced the delay of its public release of CHAMP. While many aspects are nearing completion, the announcement stated that certain elements of CHAMP need further work before finalization. While CHAMP was originally scheduled to be released in November 2018, it has now been delayed until June 2019. Once in place, CHAMP will provide several new e-services, including the replacement of Form T2050, Application to Register a Charity under the ITA, with an online application, online filing of the T3010, Registered Charity Information Return, and the ability to update charities’ information and correspond with the Charities Directorate online through “My Business Account.”
In an announcement on September 14, 2018, the CRA stated that the mailing address for the T3010, Registered Charity Information Return, will be changing as of October 8, 2018. The address change applies only to the T3010, and not to any other document filings. Charities filing their T3010s on or after October 8, 2018 will need to ensure that their annual returns are mailed to:
Charities Directorate
Canada Revenue Agency
105 – 275 Pope Road
Summerside PE C1N 6E8
All other mail should continue to be mailed to the Charities Directorate’s current address in Ottawa, at:
Charities Directorate
Canada Revenue Agency
Ottawa ON K1A 0L5
Aug 2018 Charity & NFP Law Update
Corporations Canada announced on June 26, 2018, that it is now providing an online service for registered intermediaries to file applications for certain exemptions under the Canada Business Corporations Act and the Canada Not-for-profit Corporations Act (“CNCA”). In this regard, Corporations Canada’s website indicates that CNCA corporations may seek approval for exemption from nine specific CNCA requirements, such as authorization to extend the time for calling an annual meeting. Instead of paper filings, the new service allows registered intermediaries to apply online. Online applications must include a cover letter (which may be typed directly into the relevant field online), in addition to a single PDF file that includes a statement of facts, arguments, a draft exemption order, and any other relevant documents. The online service allows the application examiner to follow up directly with the requestor. The requirements that must be met for an exemption to be granted have not changed with this new online service.
On May 17, 2018, British Columbia Bill M 216, Business Corporations Amendment Act, 2018 (“Bill M 216”) passed second reading. Bill M 216, which is a private member’s bill, seeks to amend the British Columbia Business Corporations Act by inserting a new Part 2.3 to create a new category of corporations known as a “benefit company.” If passed, BC will be the first jurisdiction in Canada to provide a legal framework for “benefit companies” to pursue social and environmental goals, rather than just profit. This legislation is intended to ensure mission-driven companies can stay true to their mission as they grow, while allowing them to attract capital by providing investors with certainty about the mandate of the company. Key features of a benefit company include the following:
Aug 2018 Charity & NFP Law Update
On July 25, 2018, in Dollar General Corporation v 2900319 Canada Inc., the Federal Court considered the issue of “use” of a trademark in Canada in association with “retail variety store services” without a physical presence in Canada. This is an important issue for trademark registrants, including charities and not-for-profits, given that once a registration is three years old, any person can request that the registration be expunged (i.e., cancelled) for non-use. If an expungement proceeding is initiated, the trademark owner must furnish evidence of use of the trademark in association with each of the goods and services listed in the registration certificate in accordance with the definition of “use” provided in the Trademarks Act (“Act”). If the trademark has not been used in Canada during the relevant period or the requisite “special circumstances” are not presented to excuse the non-use, the Registrar can elect to expunge the registration or amend the registration (i.e., delete the specific goods and services that the trademark has not been used in association with). As a result, it is important for organizations, including charities and not-for-profits, to understand what constitutes “use” of a trademark in Canada.
In this case, the court overturned the decision of the Trademarks Opposition Board (“TMOB”) to expunge the DOLLAR GENERAL trademark registration. Dollar General Corporation (“Dollar General”) operates brick-and-mortar stores in the USA, but not in Canada. Although Canadian residents can access Dollar General’s website and make purchases online, the company does not ship directly to Canada. Instead, consumers in Canada must pay a fee to a third party to ship the goods to Canada. Based on these facts, the TMOB expunged the registration for non-use in Canada in association with “retail variety store services.”
In reversing the TMOB’s decision to expunge the mark, the court rejected the notion that goods must be shipped directly by the owner to customers in Canada to constitute use of the mark in Canada. In doing so, the court relied on the propositions that the definition of “services” in the Act requires a liberal and broad interpretation and that if members of the public receive a benefit from the activity, the activity is a service. While the court noted the evidence was not perfect, it held that the interactive nature of the website together with the benefit the website provided to Canadians were sufficient to establish “use” within the meaning of section 4 of the Act.
This decision provides some assurance to non-Canadian charities and not-for-profits who do not have a physical presence in Canada that having a website that Canadians can access and benefit from is likely sufficient to demonstrate the requisite evidence of use to maintain trademark registrations in Canada.
While this decision suggests that courts may take a broad interpretation of the definition of “use” in association with services, the court’s analysis indicates that the determination is subjective and each case will ultimately turn on its evidence. As such, charities and not-for-profits should be proactive in ensuring that trademark registrations can withstand non-use challenges. This includes ensuring that trademarks are used in accordance with the definition of use provided in the Act and maintaining adequate records of such use. Further, charities and not-for-profits should ensure that trademark registrations cover a broad range of services (e.g., primary, incidental and ancillary services) such that if an expungement proceeding is initiated, some of the services associated with the trademark may be maintained even if others are struck out for non-use. This approach will also avoid the necessity of a costly appeal to the Federal Court if the TMOB cancels a registration certificate for non-use. Lastly, legal counsel should be consulted to ensure that trademark registrations can therefore withstand such non-use challenges.