Employee Dismissed for Vaping Cannabis and Driving Employer’s Car
Apr 2019 Charity & NFP Law Update
On April 18, 2018, a labour arbitration board in Saskatchewan (the “Board”) released its decision in The Town of Kindersley v Canadian Union of Public Employees Local 2740 in which the Board upheld an employer’s decision to dismiss a unionized employee for improper use of his medically prescribed cannabis. This decision is a reminder to charities and not-for-profits that the accommodation of an employee’s needs with respect to medical cannabis does not give an employee licence to use the substance in whichever way the employee sees fit. Rather, employees are expected to abide by company policies, rules, and workplace accommodation agreements and also conduct themselves responsibly in their use of the substance. While this decision was released in 2018, the principles relating to workplace accommodation and the use of medically prescribed cannabis are important, especially in light of the recent legalization of recreational cannabis in Canada in October 2018, and the potential of the increased use of both medical and recreational use of cannabis across Canada as discussed in Charity & NFP Law Bulletin No. 431.
For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 447.
Applying for Federal Incorporation and Charitable Status
Applying for Federal Incorporation and Charitable Status
Apr 2019 Charity & NFP Law Update
This Charity Law Bulletin (“Bulletin”) provides a brief overview of the general steps that are required in order to incorporate a federal corporation under the Canada Not-for-profit Corporations Act (“CNCA”), and apply for registration as a “charity” under subsection 149.1(1) of the ITA. This Bulletin assumes that the charity will carry out its activities primarily in the Province of Ontario, and therefore this Bulletin provides some commentary on a few of the more important issues relevant to charities operating in that province. This Bulletin does not provide a complete summary of all issues to be considered when incorporating and applying for charitable status given the complexity of the requirements that may apply to an organization under the CNCA and the ITA. Organizations wanting to incorporate and apply for charitable status should work with their legal counsel to review and address all applicable issues.
This Bulletin will focus on the incorporation procedures to be undertaken pursuant to the current regime established by Corporations Canada under the CNCA. While charities operating across Canada will also need to consider other compliance issues including, but not limited to, extra-provincial registrations, privacy, fundraising, investment powers, as well as legal risk management issues, those legal issues are beyond the scope of this Bulletin. This Bulletin has been prepared using plain language as much as possible in order to facilitate understanding of the issues described in this Bulletin by those volunteers of charities who may not necessarily have any legal background. As such, footnotes to authorities are not included, although references to resource websites are provided where appropriate.
For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 446.
CRA Responds to 2017 Consultation Panel Report on Political Activities of Charities
Apr 2019 Charity & NFP Law Update
On March 7, 2019, the Minister of National Revenue issued its response (the “Response”) to the Report of the Consultation Panel on the Political Activities of Charities published in May 2017 (the “Report”). The Report provided various recommendations on the administrative and legislative framework governing political activities at the time, discussed in Charity & NFP Law Bulletin No. 403. While the Federal Government had committed to providing a formal response in 2017, that timeline was not kept. However, although an official written response was not provided, the government did take various steps in response to the recommendations in the Report. The Response now marks the government’s final response to each of the four recommendations outlined in the Report.
Recommendation 1 is to “revise the CRA’s administrative position and policy.” The Response points to the draft guidance on public policy dialogue and development activities (“PPDDAs”), discussed in Charity & NFP Law Bulletin No. 438, for which the CRA is currently accepting feedback.
Recommendation 2 is to “implement changes to the CRA’s administration of the Income Tax Act (ITA).” The Response indicates that funding of up to $5.3 million is being provided over the next five years to the CRA for enhanced sector outreach and education. The CRA has also implemented the Charities Education Program. Further, the Response states that the additional administrative changes and initiatives will be made, such as new communication and engagement methods, and updating its webpages that discuss the audit process and other topics of interest to Indigenous communities.
Recommendation 3 is to “amend the [ITA] by deleting any reference to non-partisan political activities to explicitly allow charities to fully engage without limitation in [PPDDAs].” The Response points to the legislation introduced through Bill C-86, Budget Implementation Act, 2018, which implemented the PPDDA regime, also discussed in Charity & NFP Law Bulletin No. 438. It further indicates that the suspension on the Political Activities Audit Program has been lifted and that affected charities will be contacted by the CRA. Finally, the Response also states that, as a result of the Bill C-86 amendments, the government has discontinued its appeal in the Canada Without Poverty v AG Canada decision, discussed in Charity & NFP Law Bulletin No. 425.
Recommendation 4 is to “modernize the legislative framework governing the charitable sector.” The Response states that the government is establishing a permanent Advisory Committee on the Charitable Sector, as discussed in the March 2019 Charity & NFP Law Update. $3.2 million in new funding will be provided to the CRA over the next five years to support this initiative.
While the Response has been long-awaited, it is clear that the government has taken the recommendations of the Report into consideration through various government initiatives. The Response therefore brings a certain degree of finality to the debate over political activities and the evolution of PPDDAs over the last two years, and provides a helpful overview of the work that the government has undertaken in response to the Report.
Legislation Update
Apr 2019 Charity & NFP Law Update
Bill C-97, Budget Implementation Act, 2019, No. 1
On April 8, 2019, Bill C-97, Budget Implementation Act, 2019, No. 1 (“Bill C-97”) was introduced in the House of Commons and received first reading. Bill C-97 proposes to implement certain provisions that impact charities and not-for-profits that were introduced in the 2019 Federal Budget (“Budget 2019”). In this regard, Bill C-97 implements legislative amendments to the Income Tax Act and Excise Tax Act that were included in the Notice of Ways and Means Motions in Budget 2019 that include: (1) support for Canadian journalism through qualified donee status, a refundable labour credit, and personal income tax credit for digital subscriptions; (2) legislative amendments to remove the requirement that property be of “national importance” in order to qualify for the enhanced tax incentives for donations of cultural property; and (3) health-related proposals, such as the medical expense tax credit for medical cannabis and tax exemptions for certain biologicals, medical devices and health care services.
Additionally, and as proposed in Budget 2019, Bill C-97 includes draft legislative amendments to strengthen Canada’s anti-money laundering and anti-terrorist financing regime. In this regard, and of interest to charities and not-for-profits, the Criminal Code of Canada will be amended to criminalize concealment of the origin of funds in the case of recklessness. Additionally, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act will be amended to allow the Governor in Council to make regulations defining “virtual currency” and “dealing in virtual currencies”, and to amend disclosure obligations relating to designated information.
Further details on the above proposed changes, as introduced in Budget 2019, are available in Charity & NFP Law Bulletin No. 443.
Proposed Regulatory Amendments under the Child Care and Early Years Act, 2014 and Education Act
On April 4, 2019, the Ontario Regulatory Registry announced a consultation to seek feedback on proposed regulatory amendments under the Child Care and Early Years Act, 2014 (“CCEYA”) and Education Act. The proposed amendments are based on feedback from previous consultations with the child care sector, and are intended to ease compliance for licensees and providers, which may include charities and not-for-profits.
The amendments would reduce administrative burdens by removing duplicative requirements under O Reg 137/15 (General) and O Reg 138/15 (Funding, Cost Sharing and Financial Assistance) under the CCEYA. Further, the amendments would increase the choice and availability of child care services by giving licensees and providers the flexibility to offer programming options that meet their community’s needs through amendments to O Reg 137/15 and O Reg 138/15 under the CCEYA, and O Reg 221/11 (Extended Day Programs) under the Education Act. Finally, the amendments would clarify and align requirements in order to create a consistent standard of care across Ontario for all child care settings through amendments to O Reg 137/15 under the CCEYA and O Reg 221/11 under the Education Act.
Ontario Bill 66, Restoring Ontario’s Competitiveness Act, 2019
On April 3, 2019, Ontario Bill 66, Restoring Ontario’s Competitiveness Act, 2019 was brought into force after receiving Royal Assent. Bill 66 amends the Employment Standards Act, 2000, among other acts, to reduce the regulatory burden on businesses, including charities and not-for-profits, when entering into work hour agreements and averaging agreements with employees, as well as with regard to employment standards educational posters required under the Employment Standards Act, 2000. Further details on the changes introduced through Bill 66 are available in the January 2019 Charity & NFP Law Update.