June 2015 Charity & NFP Law Update

HoC Finance Committee Tables Report on Terrorist Financing
CRA News
Legislation Update
Corporate Update
Imagine Canada Releases Paper on Charities as an Economic Sector
Court Upholds Members’ Right to Requisition a Meeting
Report on Exploring Potential of Social Finance
Bank Required to Pay Nominal Damages for Breaching its Privacy Policy
Court Declares Membership Resolution Inconsistent with Corporations Act
Ambiguous Termination Provision Deemed Unenforceable
Ontario Court Assesses Fiduciary Duty to a Board
CRA Comments on Retention of Books and Records
Tax Implications Related to Third Party Fundraising
Ontario Court Defines “the Poor”
NPO Tax Exempt Status – Affordable Housing Providers
Director General Appears Before Senate Committee on Terrorist Financing
Bill 113 to Update Criminal Record Check Process in Ontario
Judicial Renderings – Interesting Cases to Consider


June 2015 Charity & NFP Law Update

House of Commons Finance Committee Tables Report on Terrorist Financing

Anti-Terrorism and Charity Law Bulletin No. 40,

The House of Commons Standing Committee on Finance (the “Committee”) released its report entitled Terrorist Financing in Canada and Abroad: Needed Federal Actions (the “Report”) on June 18, 2015. The Report contains 15 recommendations that are designed to increase the effectiveness of Canada’s anti–money laundering and anti–terrorist financing regime, as well as contribute to global efforts to combat terrorist financing. In its discussion of the issues, the Committee noted the low level of terrorist financing that has been detected in Canada compared to other countries, but the Committee was careful to note that limited detection and prosecution of terrorist financing in Canada does not mean that there is a low risk of terrorist financing in Canada or that Canadian entities are not being used to raise or transfer terrorism-related funds abroad. As such, the Committee indicated that more could be done to detect terrorist financing and increase investigative capacity, which could lead to more prosecutions with these expanded capabilities. The following Anti-terrorism and Charity Law Alert discusses the consultation process the Committee conducted in preparation for the Report, for which Carters Professional Corporation was invited to take part, and includes a discussion of which recommendations affecting charities and not-for-profits were adopted by the Committee and those recommendations made by Carters that have yet to be adopted by the Committee.

Ambiguous Termination Provision Deemed Unenforceable

CHARITY LAW BULLETIN NO. 367

In Miller v A.B.M. Canada Inc (“Miller”), the Ontario Superior Court of Justice Divisional Court affirmed an earlier decision from the lower court, in the process providing key insight into how the courts will interpret termination provisions in written employment contracts. On March 19, 2015, Associate Chief Justice Marrocco upheld the trial judge’s reasoning and dismissed the appeal by the former employer, A.B.M. Canada Inc. In the reasons for judgment, the Divisional Court affirmed the original conclusion that the termination clause in question was null and void because it provided lesser benefits than those provided for in the Ontario Employment Standards Act, 2000 (“ESA”), despite the fact that the clause adequately considered the minimum notice period. The decision in Miller therefore underscores the importance of including all forms of remuneration in a termination clause, including benefits. If employers fail to do so they run the risk of having the termination clause declared unenforceable.
The decision also emphasizes that any ambiguity in contract clauses will likely be interpreted in favour of the employee. As such, the case stands as a warning to all employers, including charities and not-for-profits, about the importance of ensuring that termination clauses in employment contracts do not undercut the ESA minimum provisions. If such clauses do not reflect ESA minimum requirements, common law notice periods will apply. This Charity Law Bulletin summarizes the comments from both court decisions in Miller.