by Dev User | Apr 26, 2018 | Employment Law, Expertise
Apr 2018 Charity & NFP Law Update
On February 26, 2018, the Human Rights Tribunal of Ontario (“HRTO”) released its decision in G.M. v X Tattoo Parlour. The applicant was an unpaid intern/volunteer (the “Applicant”), who alleged discrimination with respect to employment because of sex, sexual harassment, sexual solicitation or advances, gender identity and age, contrary to the Ontario Human Rights Code (the “Code”). The discrimination was alleged to have occurred when the Applicant was a 15 year-old high school student. In its decision, the HRTO ordered the business and its owner to pay the Applicant “the sum of $75,000.00 as monetary compensation for injury to dignity, feelings and self-respect.” This decision is relevant to Ontario charities and not-for-profits, as it indicates that an employment relationship for purposes of the Code may be found to exist even in situations that would otherwise not be thought of as employment, such as with unpaid interns or volunteers. Consequently, unlawful discriminatory conduct contrary to the Code may give rise to substantial potential liability to volunteers and interns.
For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 420.
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by Dev User | Apr 26, 2018 | Uncategorized
Apr 2018 Charity & NFP Law Update
On March 8, 2018, the Ontario Superior Court of Justice released its decision in Barton v Kingston Flying Club, concerning a claim arising from a loan made to a registered charity, the Kingston Flying Club (“Club”), by its past president (“President”), as well as for the value of other benefits provided to the President by the Club in exchange for his services over the years. While not explicitly stated in the decision, it appears that the President was an officer and employee of the Club, but not a director.
The President claimed that he had loaned money to the Club by personally paying fees that it owed to a contractor for installation work, which he classified as a demand loan. He also claimed the value of 14 months’ rent for storage of his aircraft, which he indicated the Club agreed to provide for three years given his past contributions of time and materials. In response, the Club argued that its debt to the President should be set off against the hangar rental fees that he owed, as well as the value of the personal credit card points that he earned in making past purchases for the Club. Since the value of these items exceeded the monies owed to the President, the Club sought the dismissal of the President’s claim. Interestingly, the Club also argued that, as a charity, the Charities Accounting Act (Ontario) (“CAA”) prohibited directors, officers and employees of registered charities from receiving a benefit, and therefore, the President, as an officer and an employee, was not entitled at law to free hangar rent or to retain the credit card points for his personal use.
The court found that the President made a demand loan to the Club, and that the hangar rent and credit card points were not connected to the said loan but were only put forward by the Club as legal set-offs against the debt owed to the President. However, as legal set-offs, the court indicated that they were subject to the two-year limitation period under the Limitations Act, which the Club had not complied with. As a result, the court allowed the President’s full claim. The court’s decision did not address the Club’s argument that the CAA prohibited the President from being entitled to benefits, save and except to indicate that “there is no such provision in the Act preventing a benefit being extended.”
The case is a good reminder of the importance for charities to always ensure there is proper loan documentation in place so that the terms of any loans are clearly understood by all of the parties to the transactions and in order to avoid any future disputes over such loans. This case also shows the importance of charities being aware of limitation periods when making claims for legal set-offs.
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by Dev User | Apr 26, 2018 | Charity & Not-for-Profit Law, Faith-Based Organizations
– Special Senate Committee Begins Study on Charitable Sector
– CRA News
– Legislation Update
– Tax Court of Canada Rules on Split Receipting and Donative Intent
– Implications of the EU’s General Data Protection Regulation in Canada
– Court Finds Charity Liable to its President for Demand Loan and Value of Other Benefits
– Proposed Regulations under the Police Record Checks Reform Act, 2015
– Human Rights Tribunal Awards $75,000 in Damages to Intern
– Government of Canada Provides Response to CASL Report
April 2018 Charity & NFP Law Update
by Dev User | Apr 26, 2018 | Uncategorized
Apr 2018 Charity & NFP Law Update
On March 28, 2018, the Ministry of Community Safety and Correctional Services introduced Proposal No. 18-CSCS006 (the “Proposal”) for public review and feedback until April 9, 2018. The Proposal contains a summary of a draft Exemptions Regulation and draft Operational Requirements Regulation under the Ontario Police Record Checks Reform Act, 2015 (the “PRCRA”). While the PRCRA received Royal Assent on December 3, 2015, it has not yet been proclaimed in force. As previously discussed in the January 2016 Charity & NFP Law Update, the PRCRA implements a new standardized regime governing police record checks across Ontario. The Proposal outlines the draft regulations necessary for the proclamation of the PRCRA.
The draft Exemptions Regulation outlines circumstances where a police record check would not have to comply with certain requirements under the Act. In that regard, the draft Exemptions Regulation proposes to exempt from the information disclosure restrictions under the PRCRA for employees, volunteers and service providers who come into direct contact with students in schools and child care settings for a period of one year from after the PRCRA comes into force in order to provide a transition period to permit organizations subject to the PRCRA to comply.
The draft Exemptions Regulation proposes to exempt police record checks conducted by organizations that have direct access to police databases from the PRCRA requirement to provide the police record checks to the individual before it is seen by the organization making the screening decision. This is because in some cases, the organization conducting a police record check is the same organization that intends to use the check to make a screening decision and it is therefore not possible to have the individual be the first to review the information. Examples of such organizations include the police services (who carry out police checks for internal hiring purposes), the Financial Services Commission of Ontario (which carries out police checks prior to licensing insurance agents) and others.
The draft Exemptions Regulation proposes to exempt caregivers, employees, volunteers, and students in licensed residential care settings providing care or services directly to children or youth, as well as prospective adoptive families and others from the PRCRA. This exemption is proposed in order to allow for a higher level of screening for the individuals outlined above.
The draft Operational Requirements Regulation specifies operational procedures that must be followed by police record check providers when they conduct police record checks. In relation to the disclosure of youth records, the draft Operational Requirements Regulation provides that records involving findings of guilt under the Youth Criminal Justice Act (YCJA) must be disclosed in a “separate record.” This ensures that an individual can receive their youth records, review them, and remove the separate page(s) when providing the remainder of the police record check to others, including prospective employers.
One of the three standard types of checks under the PRCRA is a vulnerable sector check (“VSC”), which is used to determine an individual’s suitability to work or volunteer in a position of trust or authority over vulnerable persons. The PRCRA defines a “vulnerable person” as a person who, because of his or her age, a disability or other circumstances, whether temporary or permanent, (a) is in a position of dependency on others, or (b) is otherwise at a greater risk than the general population of being harmed by a person in a position of trust or authority towards them.
Under the PRCRA, the VSC is the only type of check in which a “non-conviction record” may be considered for potential disclosure. In determining whether a non-conviction record should be released as part of the VSC, a police service must ensure that the charge that resulted in the non-conviction record (1) relates to an offence specified in regulation(s); (2) the alleged victim of the charge was a child or vulnerable person; and (3) a review of police entries relating to the individual, based on specific factors (e.g., the number of incidents, why the incident did not result in a conviction), provides reasonable grounds to believe the individual has been engaged in a pattern of predation and presents a risk of harm to a child or vulnerable person.
The draft Operational Requirements Regulation also provides for reconsideration of disclosure of non-conviction records when an individual’s “non-conviction record” is included in a police record check. In that regard, the PRCRA provides that an individual can submit a request for reconsideration which could result in either the original decision being overturned and the non-conviction being removed from the police record check result; or the original decision being upheld and the non-conviction record remaining in the police record check result.
It is now industry standard for charities and not-for-profits that carry out programs involving vulnerable persons (including children, the elderly and other vulnerable adults) to require a VSC to help screen prospective volunteers, employees, and directors. The VSCs are an important screening measure to help to screen potential predators who may have previous convictions or charges, from working with vulnerable persons. The VSCs are also required by most insurers as a condition of abuse coverage.
As the new regime for police record checks is implemented in Ontario over the coming years, charities and not-for-profits should monitor those developments so that they can make the appropriate adjustments to their own policies and protocols used to screen individuals who will work with vulnerable persons. It should be noted that the VSCs are merely one step and on their own are inadequate as a screening tool, especially since some predators are first time offenders with no prior criminal records or charges. As such, VSCs should always be used in conjunction with other measures, such as a child protection policy or vulnerable persons’ policy that is consistently implemented within the organization’s programs.
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by Dev User | Apr 26, 2018 | Uncategorized
Apr 2018 Charity & NFP Law Update
Guide RC4082, GST/HST Information for Charities Updated
On April 12, 2018, the CRA updated Guide RC4082, GST/HST Information for Charities to reflect changes to the GST/HST rebate for tour packages. Guide RC4082 discusses common tax situations for charities, and outlines the calculation of net tax remittances for charities that are GST/HST registrants, stating that 60% of the total of the GST/HST adjustments, including the GST/HST rebate for short-term accommodation in tour packages, can be included in the calculation. As proposed in the 2017 Federal Budget, the GST/HST rebate available to non-residents for the Canadian accommodation portion of eligible tour packages under the Foreign Convention and Tour Incentive Program was repealed in relation to accommodations supplied after March 22, 2017. In this regard, Guide RC4082 has been updated to specify that short-term accommodation in tour packages can be included in the GST/HST adjustment calculation if such tour packages were purchased on or before March 22, 2017.
The update to Guide RC4082 also clarified that while supplies of paid parking spaces at public hospitals made by charities or public sector bodies to patients, visitors, and hospital volunteers are exempt from GST/HST, parking supplied to hospital staff and medical professionals is generally taxable.
New CRA Video and Webpage on Issuing Donation Receipts for Golf Tournament Fundraisers
With the golf season about to begin, charities that host golf tournaments will be pleased to know that on April 24, 2018, the CRA added a new video to its online charities video gallery on golf tournament fundraisers. In this new video, the CRA provides guidance to charities hosting golf tournament fundraisers with respect to issuing donation receipts. The video explains the process for charities in three-steps. The first step is for the charity to identify and determine the fair market value of any benefit, which the CRA refers to as an advantage, such as door prizes, a round of golf, the use of a golf cart, dinner, refreshments, and other small value items (e.g. t-shirts or hats), that a participant/donor will receive in exchange for the registration fee to participate in the golf tournament. The video clarifies that it is not an advantage to include “a chance to win a prize for a hole-in-one” which is deemed to be too small and can be ignored.
The second step is to determine the donative intent of the participant/donor, i.e. if the value of the advantage is more than 80% of the registration fee, the donor will be considered not to have made a gift. The third step is to determine the eligible amount of the donation for receipting purposes, which is done by subtracting all advantages received by each participant/donor from the amount of their registration fee.
The CRA also has a new webpage with additional information for charities hosting golf tournaments. The webpage contains a graphic educational tool as well as general information about how to determine the value of certain advantages, such as cart rentals, meals, complimentary items, and raffle tickets. It also provides an example illustrating how to calculate the eligible amount of the donation for which a receipt may be issued.
Read the April 2018 Charity & NFP Law Update
