BC Court Finds Indigenous Ceremonies in School Did Not Violate Freedom of Religion

by | Feb 10, 2020 | Uncategorized

February 2020 Charity & NFP Law Update

The Supreme Court of British Columbia released its decision in Servatius v Alberni School District No. 70 on January 8, 2020, concerning freedom of religion under the Canadian Charter of Rights and Freedoms (“Charter”). Candice Servatius, an evangelical Christian, claimed that she and her children’s freedom of religion under section 2(a) of the Charter had been infringed when an Indigenous Elder visited a public elementary school (“School”) and demonstrated smudging, and when an Indigenous prayer was said during an Indigenous dance performance held at a School assembly. She argued that their belief system prohibited them from participating in any “religious, spiritual or supernatural ceremonies” outside of their faith, and that the smudging and prayer constituted “compelled participation in state-sponsored religious exercises.”

The court first considered the historical background of the residential schools that played a central role in the federal government’s assimilationist policy. Viewed in this context, the smudging and hoop dancing allowed Indigenous students to “see themselves and their culture reflected” in the school they attended, helped to make the school a “culturally safe space,” and increased the knowledge and understanding of Indigenous culture and history.

With regard to freedom of religion, the court indicated that the purpose of section 2(a) is to “prevent interference with profoundly held personal beliefs that govern one’s perception of oneself, humankind, nature, and, in some cases, a higher or different order of being.” Pursuant to Syndicat Northcrest v Amselem, Ms. Servatius had the burden of proving infringement by proving that (1) she or her children have a sincere belief that has a nexus with religion; and (2) the impugned events interfered, in a manner that was more than trivial or insubstantial, with their ability to act in accordance with their religious beliefs. It added that one method of establishing a section 2(a) infringement is to show that “state neutrality” with respect to religion had been breached.

As it was conceded that Ms. Servatius’ beliefs were sincere, the court considered whether she had proven objectively that the smudging or prayer interfered with her or her children’s ability to act in accordance with their religious beliefs. With regard to state neutrality, the court found that the defendant School District had not professed, adopted, or favoured Indigenous beliefs to the exclusion of all others. While schools must be neutral public spaces “free from coercion, pressure, and judgment on the part of public authorities in matters of spirituality,” the court found that this did not mean the “homogenization” of that space. It concluded that the School District’s intent was not to profess, adopt, or favour Indigenous spirituality, but to teach about the culture and to encourage the inclusion of Indigenous students.

In response to Ms. Servatius’ argument that her children were “compelled to participate” in the Indigenous practices and affirm their beliefs, the court indicated that teaching about other people’s spiritual beliefs and practices does not compel participation or affirmation of those beliefs. While mere presence before a spiritual practice has been found in other cases to be sufficient grounds to establish a non-trivial interference, the court distinguished this case on the basis that the practices at the School were teaching demonstrations, stating that “[i]n the context of children in school being taught about beliefs, […] mere presence does not constitute proof on an objective basis of interference with the ability to act in accordance with religious beliefs.” The court gave other examples that would not be problematic, such as a visit by students to a mosque to learn about Islam or a Catholic priest bringing candles and incense to school to acquaint students with Church rites. On the other hand, it would be problematic if the students were required to pray at the mosque or participate in a specific Catholic rite. The court therefore could not find proof on an objective basis that Ms. Servatius or her children’s beliefs had been interfered with, and dismissed her claim.

This case confirms that the teaching and demonstration of spiritual beliefs in schools is generally not a violation of freedom of religion under the Charter. In an educational environment, more than a student’s mere presence before a demonstration or explanation of spiritual beliefs would be required to establish a violation.

Read the February 2020 Issue

Competition Bureau’s Role in Digital Advertising: Implications for Charities and Not-for-Profits
CRA News
–  Excise and GST/HST News No. 107
–  CRA Introduces Digital Processes for Authorizations
–  CRA Charities and Information Sessions and Webinars
CAGP Provides Update on Gifts of Life Insurance in B.C.
Legislation Update 
–  Bill C-7, An Act to amend the Criminal Code (medical assistance in dying)
–  Ontario Bill 175, Connecting People to Home and Community Care Act, 2020
–  Ontario Bill 136, Provincial Animal Welfare Services Act, 2019 Now Proclaimed
Donation Receipts Signed by and in Favour of Charity Officer Denied
Tax Court of Canada Rejects Charitable Donation Scheme… Again
Ontario Court Rules on Trusts in Scouts Land Ownership Dispute
One Incident of Sexual Harassment Justified Termination for Cause
BC Court Finds Indigenous Ceremonies in School Did Not Violate Freedom of Religion
Ministry of Health Revokes its Hospital Naming Directive
Recent Issues in Privacy: Case Law Update
New Canadian UDRP Provider for Resolving Domain Name Disputes
Anti-Terrorism/Money Laundering Update 
–   Further Amendments to Regulations under the PCMLTFA
–   US 2020 National Strategy for Combating Terrorist and Other Illicit Financing
–   UN Working Paper on Impact of Counter-terrorism Legislation on Humanitarian Action
Essential Trademark Issues for Charity and Not-For-Profit Lawyers
Theresa L.M. Man Named to CRA Technical Issues Working Group

Ontario Court Rules on Trusts in Scouts Land Ownership Dispute

by | Feb 3, 2020 | Uncategorized

February 2020 Charity & NFP Law Update

Ontario Court Rules on Trusts in Scouts Land Ownership Dispute

The Ontario Superior Court of Justice released its decision in the case of Tillsonburg Scout Association v Scouts Canada on February 6, 2020 concerning a dispute over the ownership of a 95 acre parcel of land in Muskoka known as “Camp Jackson”. Tillsonburg Scout Association, an unincorporated association (“TSA”), sought a declaration vesting title to Camp Jackson in TSA as the original settlor of a trust held by Scouts Canada (“Scouts”) as trustee. Scouts, however, denied TSA’s proprietary interest in Camp Jackson, and sought a declaration that Scouts holds absolute legal title or, alternatively, that it holds title to Camp Jackson as trustee under a charitable purpose trust.

TSA purchased Camp Jackson in 1960 from Mr. Gordon Jackson, with three individuals holding title as trustees for TSA as beneficiary (“1960 Transfer”). As conditions of transfer, Camp Jackson was only to be used “for the purposes of promoting youth welfare” and any future disposition required Mr. Jackson’s written approval. In 1971, with Mr. Jackson’s written approval, the three trustees transferred title of Camp Jackson to the Kinsmen Club of Tillsonburg (“Kinsmen”) to hold as trustee for TSA (“1971 Transfer”).

Subsequently, TSA and Scouts agreed on a transfer of Camp Jackson to the Scouts, as “Scouts enjoy tax exemption status and TSA and [sic] were satisfied the Scouts real estate policy stipulated any eventual disposal of real estate would be on the recommendation of the local Scouting council and include a plan for the proceeds of sale, provided the proceeds would be used for ‘Scouting purposes in the relevant area.’” In 1983, with Mr. Jackson’s written consent, Kinsmen transferred Camp Jackson to “Provincial Council for Ontario; Boy Scouts of Canada” (which is required by Scouts policy to hold all real estate in Ontario for Scouts) on the same conditions as in the 1960 and 1971 transfers, which were to remain in force until 1985 (“1983 Transfer”).

Unincorporated associations are incapable of owning or holding property. In this regard, the court indicated that they also cannot be beneficiaries or settlors of a trust, as a valid trust requires the settlor, trustee and beneficiary to have capacity. Despite TSA incorporating in 2005, the court found that since TSA was incapable of holding an interest in Camp Jackson at first instance, there was no interest that the incorporated TSA could succeed either as settlor or beneficiary.

The court then considered whether the 1960 Transfer established a valid trust. It considered the “three certainties” (i.e. certainty of intention, subject matter, and objects), and found that Mr. Jackson intended to create a trust through the 1960 Transfer by him to the three trustees, and that the trust clearly described the subject matter as being Camp Jackson. However, concerning certainty of objects, it questioned whether the trust was in favour of persons or a charitable purpose, and whether the class of beneficiaries were described in sufficiently certain terms for trust to be performed.

Although the court did not find a private trust, it held that there was a valid charitable purpose trust. It found that the 1960 Transfer was “of benefit to society, sufficiently public in nature, exclusively charitable and without political purpose,” given the restriction that Camp Jackson must be used “only for the promotion of youth welfare.” It held that this restricted purpose fell within “advancement of education,” and satisfied the certainty of object requirement. Further, it stated that the charitable purpose trust continued with the 1971 Transfer to Kinsmen.

In contrast to the 1960 and 1971 Transfers, the court found that the 1983 Transfer omitted reference to Scouts taking title as trustee. The court concluded that this omission was deliberate. Although TSA argued that Scouts could only take the title as held by the transferor (i.e. as trustee), the court found that Mr. Jackson consented to the disposition of Camp Jackson to Scouts in accordance with his restriction. The court therefore held that Scouts took full legal title to Camp Jackson through the 1983 Transfer. On these grounds, the court dismissed TSA’s application and allowed Scouts’ application in part, with a declaration the Provincial Council for Ontario; Boy Scouts of Canada holds legal title to Camp Jackson, and a declaration that TSA has no beneficial interest in Camp Jackson.

This case is a good illustration of the difficulties associated with real property ownership by unincorporated associations. Further, it is a helpful reminder of the importance of clearly drafted trust documents to outline the intention of parties when entering into a trust arrangement.

Read the February 2020 Issue

Competition Bureau’s Role in Digital Advertising: Implications for Charities and Not-for-Profits
CRA News
–  Excise and GST/HST News No. 107
–  CRA Introduces Digital Processes for Authorizations
–  CRA Charities and Information Sessions and Webinars
CAGP Provides Update on Gifts of Life Insurance in B.C.
Legislation Update 
–  Bill C-7, An Act to amend the Criminal Code (medical assistance in dying)
–  Ontario Bill 175, Connecting People to Home and Community Care Act, 2020
–  Ontario Bill 136, Provincial Animal Welfare Services Act, 2019 Now Proclaimed
Donation Receipts Signed by and in Favour of Charity Officer Denied
Tax Court of Canada Rejects Charitable Donation Scheme… Again
Ontario Court Rules on Trusts in Scouts Land Ownership Dispute
One Incident of Sexual Harassment Justified Termination for Cause
BC Court Finds Indigenous Ceremonies in School Did Not Violate Freedom of Religion
Ministry of Health Revokes its Hospital Naming Directive
Recent Issues in Privacy: Case Law Update
New Canadian UDRP Provider for Resolving Domain Name Disputes
Anti-Terrorism/Money Laundering Update 
–   Further Amendments to Regulations under the PCMLTFA
–   US 2020 National Strategy for Combating Terrorist and Other Illicit Financing
–   UN Working Paper on Impact of Counter-terrorism Legislation on Humanitarian Action
Essential Trademark Issues for Charity and Not-For-Profit Lawyers
Theresa L.M. Man Named to CRA Technical Issues Working Group

Tax Court of Canada Rejects Charitable Donation Scheme

by | Feb 2, 2020 | Uncategorized

Tax Court of Canada Rejects Charitable Donation Scheme… Again

On January 27, 2019, the TCC released its decision in Tudora v The Queen (‘Tudora’), another case involving the same charitable donation scheme under the guise of the Global Learning Gifting Initiative (“GLGI”) that the TCC rejected in its 2015 decision in Mariano v The Queen (“Mariano”), as discussed in the October 2015 Charity & NFP Law Update and August 2016 Charity & NFP Law Update.

The GLGI program was a charitable donation scheme by which, in general terms, each participant, in exchange for a cash donation to charity A (Millenium Charitable Foundation), as well as an application to become a “capital beneficiary” in a trust (Global Learning Trust 2004), received rights to educational courseware licences with an inflated value that was several times higher than their original cash payment and which the participants subsequently “gifted in kind” to another participating charity; so that each participant would receive two donation receipts, one for their cash donation and another for the “gifted” courseware licenses valued much higher than the participant’s original cash donation.

In Tudora, the TCC was asked to determine whether the appellant taxpayer, by participating in the GLGI program, had effectively made a gift which constituted a valid charitable donation. In denying the claimed charitable tax credits pursuant to section 118.1 of the ITA, the CRA asked the TCC to apply the principle of judicial comity, relying on its previous analysis of the GLGI program and that: i) the taxpayer lacked the donative intent which is a requisite element of a gift; ii) the trust involved in the GLGI program was not a valid trust; iii) the donation receipts issued did not represent the fair market value of the alleged gifts in kind; and iv) subsections 248(30) to (32) would reduce the eligible amount of the purported gift to nil. The TCC dismissed the appeal finding that the appellant taxpayer had no donative intent, but had an expectation of receiving a benefit as a result of his participation in the GLGI program.

On June 26, 2019, the Ontario Superior Court of Justice certified a class action against the promoters of the GLGI program as well as their professional advisors who participated in developing, structuring and promoting this charitable donation scheme which involved over 30,000 taxpayers claiming combined tax credits in the hundreds of millions of dollars.

Read the February 2020 Issue

Competition Bureau’s Role in Digital Advertising: Implications for Charities and Not-for-Profits
CRA News
–  Excise and GST/HST News No. 107
–  CRA Introduces Digital Processes for Authorizations
–  CRA Charities and Information Sessions and Webinars
CAGP Provides Update on Gifts of Life Insurance in B.C.
Legislation Update 
–  Bill C-7, An Act to amend the Criminal Code (medical assistance in dying)
–  Ontario Bill 175, Connecting People to Home and Community Care Act, 2020
–  Ontario Bill 136, Provincial Animal Welfare Services Act, 2019 Now Proclaimed
Donation Receipts Signed by and in Favour of Charity Officer Denied
Tax Court of Canada Rejects Charitable Donation Scheme… Again
Ontario Court Rules on Trusts in Scouts Land Ownership Dispute
One Incident of Sexual Harassment Justified Termination for Cause
BC Court Finds Indigenous Ceremonies in School Did Not Violate Freedom of Religion
Ministry of Health Revokes its Hospital Naming Directive
Recent Issues in Privacy: Case Law Update
New Canadian UDRP Provider for Resolving Domain Name Disputes
Anti-Terrorism/Money Laundering Update 
–   Further Amendments to Regulations under the PCMLTFA
–   US 2020 National Strategy for Combating Terrorist and Other Illicit Financing
–   UN Working Paper on Impact of Counter-terrorism Legislation on Humanitarian Action
Essential Trademark Issues for Charity and Not-For-Profit Lawyers
Theresa L.M. Man Named to CRA Technical Issues Working Group

Donation Receipts Signed by and in Favour of Charity Officer Denied

by | Feb 1, 2020 | Uncategorized

On January 30, 2020, the Tax Court of Canada (“TCC”) released its decision in Ampratwum-Duah v The Queen, denying the appeal by Rev. Augustine Ampratwum-Duah (the “Appellant”) of three concurrent reassessments respecting denial of charitable donations the Appellant had claimed for the 2005, 2006 and 2007 taxation years. Specifically, the Appellant testified he had made charitable deductions, in the total amounts of $3,550, $9,120 and $6,346 for his 2005, 2006 and 2007 taxation years respectively to the then-recognized charity, named “City Chapel Ministries International” (“CCMI”), of which the Appellant was the religious leader. Each of the three donation receipts put in evidence (one for each year) had been signed by the Appellant in his capacity as CCMI’s religious leader. The TCC stated that no corroborating evidence such as bank account or church records were submitted in evidence, nor were any other CCMI officials, such as the then-Treasurer, called to testify on the basis that no such records were available because the donations had been made more than six years earlier.

The Appellant argued that his receipts should constitute sufficient evidence of the donations, that his income was sufficient to support the claimed amounts, and that too many years had passed to be able to obtain bank records. The CRA argued that no gift had been made, the Appellant had access as religious leader to CCMI records, and alleged the Appellant had signed his own donation receipts. The CRA also cited section 230 of the Income Tax Act (Canada) (“ITA”), which requires taxpayers to keep corroborating books and records sufficient to determine their tax liabilities for at least six years or until the expiration of any objection or appeal.

In dismissing the appeal, the TCC found for the Respondent, on the basis that the requirement in subsection 230(6), that supporting books and records be retained and available until an appeal has been concluded, was not complied with. The TCC stated that corroborating books and records (both bank and CCMI supporting records) were reasonably required in this case, particularly since the Appellant was the sole signatory of the CCMI receipts. The TCC clarified that it had not found that the claimed donations were not made, but instead that there was insufficient evidence required by subsection 230(6) to reasonably support a finding confirming on a balance of probabilities that the subject donations were made.

This case serves as a reminder for donors, in particular, of the need to retain sufficient books and records of account as evidence, as required under subsections 230(1) and (6) of the ITA, to demonstrate that a donation has been made. Registered charities are also required to maintain books and records in accordance with the ITA. In addition, from a practical standpoint, it would be prudent for registered charities to have a policy in place to ensure that any officer of the charity is not permitted to sign donation receipts issued to himself or herself, in order to avoid any actual or perceived conflicts of interest.

Read the February 2020 Issue

Competition Bureau’s Role in Digital Advertising: Implications for Charities and Not-for-Profits
CRA News
–  Excise and GST/HST News No. 107
–  CRA Introduces Digital Processes for Authorizations
–  CRA Charities and Information Sessions and Webinars
CAGP Provides Update on Gifts of Life Insurance in B.C.
Legislation Update 
–  Bill C-7, An Act to amend the Criminal Code (medical assistance in dying)
–  Ontario Bill 175, Connecting People to Home and Community Care Act, 2020
–  Ontario Bill 136, Provincial Animal Welfare Services Act, 2019 Now Proclaimed
Donation Receipts Signed by and in Favour of Charity Officer Denied
Tax Court of Canada Rejects Charitable Donation Scheme… Again
Ontario Court Rules on Trusts in Scouts Land Ownership Dispute
One Incident of Sexual Harassment Justified Termination for Cause
BC Court Finds Indigenous Ceremonies in School Did Not Violate Freedom of Religion
Ministry of Health Revokes its Hospital Naming Directive
Recent Issues in Privacy: Case Law Update
New Canadian UDRP Provider for Resolving Domain Name Disputes
Anti-Terrorism/Money Laundering Update 
–   Further Amendments to Regulations under the PCMLTFA
–   US 2020 National Strategy for Combating Terrorist and Other Illicit Financing
–   UN Working Paper on Impact of Counter-terrorism Legislation on Humanitarian Action
Essential Trademark Issues for Charity and Not-For-Profit Lawyers
Theresa L.M. Man Named to CRA Technical Issues Working Group