by Dev User | Feb 22, 2018 | Uncategorized
Feb 2018 Charity & NFP Law Update
A resource paper providing an overview of the options available when investing charitable funds in Ontario, available at charitylaw.ca, was presented at the Ontario Bar Association’s 2018 Institute on February 6, 2018. The paper discusses the three categories of investments provided for in both federal and provincial legislation: i) the prudent investor standard under the Trustee Act (sometimes described as “prudent investments”, “ordinary investments” or “conventional financial investments”), with a focus on obtaining a financial return; ii) program related investments under the CRA’s CG-014 Community Economic Development Activities and Charitable Registration Guidance, with a focus on “directly further[ing] one or more of a charity’s charitable purposes”; and more recently, iii) social investments under the Charities Accounting Act, with a hybrid focus of directly furthering the purposes of the charity and achieving a financial return.
The full text of the paper can be accessed here: The Investment Spectrum for Charities, Including Social Investments.
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by Dev User | Feb 22, 2018 | Uncategorized
Feb 2018 Charity & NFP Law Update
Members of Senate’s Special Committee on the Charitable Sector Appointed>
As reported in the January 2018 Charity & NFP Law Update, on January 30, 2018, the Senate of Canada adopted a motion to appoint a Special Committee on the Charitable Sector (“Special Committee”) to “examine the impact of federal and provincial laws and policies governing charities, nonprofit organizations, foundations, and other similar groups; and to examine the impact of the voluntary sector in Canada.” At the time of writing, the Special Committee is composed of the following senators: Terry M. Mercer (Chair), Ratna Omidvar (Deputy Chair), Michael Duffy, Linda Frum, Diane Griffin, Yonah Martin and Nancy Greene Raine. As is the case with other committees, the Leader of the Government and the Leader of the Opposition, or their respective deputy Leaders in their absence, are ex officio members. Additional information on the first meeting of the Special Committee, held February 26, 2018, as well as a schedule of future meetings is available online.
Amendments to Ontario Co-operative Corporations Act>
On February 23, 2018, the Ministry of Finance introduced proposal number 18-MOF009 to amend RRO 1990, Regulation 178 under the Co-operative Corporations Act. The proposal follows the technical amendments to the Co-operative Corporations Act in Schedule 9 of Bill 177, Stronger, Fairer Ontario Act (Budget Measures), such as the transfer of responsibility for incorporating co-operative corporations from the Financial Services Commission of Ontario to the Ministry of Government and Consumer Services, which will come into force on a date to be set by proclamation. The proposal is open for consultation until March 25, 2018.
Amendments to NB Companies Act>
On January 1, 2018, New Brunswick’s Bill 21, An Act Respecting Agricultural Associations, came into force, bringing amendments to New Brunswick’s Companies Act. The amendments are part of the repeal of several sections of the Agricultural Associations Act and allow for agricultural associations to be continued under the Companies Act. The amendments also include a definition of agricultural associations as “an organization of district, county or provincial scope whose purpose is to hold exhibitions of livestock, poultry, agricultural produce and the products of kindred agricultural and homemaking arts” or “a community group of farmers organized for the general promotion of agriculture within that community.”
Lobbying Registration Act (PEI)>
On December 20, 2017, the Legislative Assembly of Prince Edward Island passed Bill 24, Lobbyist Registration Act, which is to come into force upon proclamation. Similar to other provincial lobbying legislation, the Lobbyist Registration Act will apply to lobbying activities on behalf of an organization such as “an association, a charitable organization, a coalition or an interest group.” Prince Edward Island was the last province without lobbying legislation.
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by Dev User | Feb 22, 2018 | Uncategorized
Feb 2018 Charity & NFP Law Update
On February 27, 2018, Finance Minister Bill Morneau tabled the third budget of the Liberal Federal Government (“Budget 2018”). Like the previous two budgets, Budget 2018 once again emphasizes the Liberal election platform to focus on economic growth, job creation and supporting a strong middle class, but this time with a focus on gender equality and Indigenous peoples. However, and also similar to the previous two budgets, Budget 2018 does not include any new tax incentives for the charitable and not-for-profit (“NFP”) sector. In addition, Budget 2018 does not make any mention of the consultation on non-profit organizations (“NPOs”) that was originally proposed in Budget 2014 but has never materialised.
While Budget 2018 contains little of significance with regard to charities and NFPs, it is expected that more will be forthcoming from the Government over the next year as indicated by the Federal Government’s commitment in Budget 2018 to provide a response to the May 2017 report on political activities by charities, reviewed in Charity & NFP Law Bulletin No. 403, as well as an anticipated report of the newly formed Senate Special Committee on the Charitable Sector reviewed in the January 2018 Charity & NFP Law Update.
What Budget 2018 does include are proposed amendments to the Income Tax Act (Canada) (“ITA”) to permit property transfers to municipalities as qualifying expenditures for revocation tax purposes; removal of the requirement that registered universities outside of Canada be prescribed in the Income Tax Regulations; new reporting requirements for trusts subject to an exemption for charities and NPOs; support for local journalism, including possible charitable status for NFP journalism; as well as funding of various charitable and NFP sector initiatives. This Bulletin provides a summary and commentary of these and other provisions from Budget 2018 that impact charities and NFPs.
For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 417.
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by Dev User | Feb 22, 2018 | Uncategorized
Feb 2018 Charity & NFP Law Update
On January 22, 2018, in Milberg v North York Hockey League, the Ontario Superior Court dismissed an application pursuant to section 2(1) of the Judicial Review Procedure Act (“JRPA”) for judicial review of a decision made by the North York Hockey League (the “NYHL”) to preclude Mr. Milberg from attending any NYHL games for the remainder of the season (“Suspension”). The Suspension was made due to Mr. Milberg’s behavior during a confrontation with a ticket attendant at his 11 year old son’s hockey games. The incident leading to the Suspension occurred when the cashier at the hockey game indicated that she could not accept the $100 bill Mr. Milberg offered to pay for the tickets. Mr. Milberg became upset and confronted the ticket attendant with inappropriate and vulgar language even though there was a sign posted at the cashier’s station indicating “no $100 bills.” After the incident Mr. Milberg was requested to attend at the offices of NYHL’s Chief Operating Officer to discuss the situation. During that meeting Mr. Milberg admitted his wrongdoing and, after over an hour of discussions, Mr. Milberg was given the Suspension.
In bringing the application for judicial review, Mr. Milberg argued that he was subjected to an internal discipline process by the NYHL in the absence of any rules or procedures. In that regard, Mr. Milberg argued that he was denied procedural fairness because he did not receive adequate notice of the infraction and possible sanctions, he was denied the right to a meaningful hearing, and Mr. Milberg was not advised of any avenues for appeal. Mr. Milberg also argued there had been no written decision provided to him, and that he had not been given access to the consultation process that led to the Suspension.
In dismissing the application, the court found that it had no jurisdiction to provide relief under the JRPA as the matter was governed by private law. In arriving at this decision, the court stated “…just because [a decision] has a public dimension to it does not make it a matter of public law. The decision or action in issue must also be an ‘exercise of public authority’. In my view, this authority must ultimately emanate from the government.” The court also stated as follows:
Private actors routinely make decisions that have implications for the public more broadly. However, if the decisions do not amount to an exercise of power emanating from the legislature, the Court’s jurisdiction over such matters should flow from the private law, and the related remedies available to litigants in the private sphere, and not the JRPA.
On a separate issue, the court recognized that a remedy might be available under private law and noted that courts have the jurisdiction to grant injunctions to prevent or restrain injuries to the infringement of rights which can be enforced at law or equity. On this issue, the court further stated:
I have no doubt that if the … NYHL … had arbitrarily or maliciously interfered with the [Mr. Milberg]’s ability to attend his son’s games, there would be a basis for a court to intervene. In such an instance, the interference may amount to a breach of an implied contractual right to attend. Similarly, if the decision was discriminatory or otherwise engaged rights protected under the [Ontario] Human Rights Code an interim remedy would likely be granted.
However, that is not the situation here. The actions of [the NYHL] can hardly be described as arbitrary or capricious. [Mr. Milberg] does not dispute confronting the employee at the stadium and using the vulgar language in that confrontation. [The NYHL] discussed the situation with [Mr. Milberg] at length, and [Mr. Milberg] was given a full opportunity to explain himself. The decision to suspend was directly related to [Mr. Milberg]’s rude and vulgar remarks to the attendant.
In its closing statements, the court indicated that:
“[i]n a situation like the one here, as long as [Mr. Milberg] has knowledge of the reasons for the sanction and had an opportunity to be heard by the decision maker, the requirements of procedural fairness would be satisfied ‘even if there was no structured hearing in the judicial sense of the word.”
This case serves as an important reminder to charities and not-for-profits that the courts continue to be reluctant to become involved in the internal affairs of an organization where steps taken by an organization to interfere with the rights of an individual generally reflects the requirements of procedural fairness. This case also clarifies that the requirements of procedural fairness that apply to a given situation may be flexible depending on the background facts involved.
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by Dev User | Feb 22, 2018 | Uncategorized
Feb 2018 Charity & NFP Law Update>
The Court of Queen’s Bench of Alberta released its decision in Bruderheim Community Church v Board of Elders on February 9, 2018, concerning a property dispute between the Bruderheim Community Church (“BCC”) and the Bruderheim Moravian Church (an unincorporated association) claiming to be or represent the congregation known as the Bruderheim Moravian Church (“BMC”), as Applicants, and the Board of Elders of the Canadian District of the Moravian Church in America (the “Board”) as Respondents. The property in dispute (the “Property”) was land acquired by BMC in 1896 used as a place of worship. The Board was incorporated in 1909 and was specifically permitted to own property for the purposes of the work of the Board or the Moravian Church in America, and to hold property in trust. In 1912, the Property was subsequently transferred to the Board to be held in trust for BMC. However, title documentation concerning the Property was inconsistent in indicating that it was held in trust for BMC.
The dispute followed the BMC’s near-unanimous decision to disassociate from the Moravian Church, Northern Province (“Northern Province”), and become an independent congregation. According to the Northern Province’s constitution, all property owned by a congregation under its jurisdiction would vest in the Northern Province’s governing body (the “Provincial Conference”) upon the congregation’s dissolution. As such, rather than be dissolved by dissociating itself from the Northern Province, the BMC considered the structure of a new church entity. The BMC voted in favour of new by-laws for an independent, self-governing and non-denominational BCC, with authority and responsibility vested in its active membership, and which was incorporated on April 11, 2017. The Board, however, concluding that BMC had no intention of associating with the denomination, recommended to the Provincial Conference that the BMC be “dissolved” within the meaning of its internal governing documents. The BMC was subsequently advised that all its property had reverted to the Northern Province and that the Property be vacated within two months.
The court considered the Applicants’ application for a permanent injunction prohibiting the Respondent from interfering with their use and enjoyment of the Property. In its analysis of the evidence, the court held that a charitable trust had been created through the original grant of land, which stated that the Property was to be held “in trust for the purposes of the Congregation of the Moravian Church at Bruderheim.” It further held that the plain meaning of the words in the trust declaration, including the term “Congregation of the Moravian Church at Bruderheim,” indicated the settlor’s intention for the Property to be used for a local congregation in Bruderheim in conjunction with a specific religious organization, the Moravian Church. As such, it held that in order to be beneficiaries of the trust, only those who were members of the Moravian Church could be considered to be part of the “Congregation of the Moravian Church at Bruderheim.”
While the BMC had been members of the Moravian Church until the time of the BMC’s disassociation from the Moravian church, the court found that the BMC ceased to be members of the Moravian Church upon disassociation. The newly formed BCC was not the “Congregation of the Moravian Church at Bruderheim,” and the court therefore held that the Property was not held in trust by the Board for the benefit of the BCC. On this basis, the court denied the application for a permanent injunction.
The court cited various similar recent decisions in Canada, including Pankerichan v Djokic, discussed in Church Law Bulletin No. 47, stating that “a relatively consistent method or pattern has emerged in these types of property disputes.” This decision upholds the past case law to the extent that courts will attempt to resolve property disputes involving religious bodies without reference to doctrine or other religious matters in cases where the dispute can be resolved by referring to the religious body’s governing documents, history, and context.
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by Dev User | Feb 22, 2018 | Uncategorized
Feb 2018 Charity & NFP Law Update
On January 8, 2018, the Court of Appeal for Ontario released its decision in Nemeth v Hatch Ltd. In this case, the court considered an appeal of the dismissal of an action by Joseph Nemeth (“Nemeth”) against Hatch Ltd., his former employer, for damages resulting from the termination of his employment without cause. In its decision, the court determined that the termination clause in Nemeth’s employment contract, which did not explicitly limit his common law notice entitlement, was nonetheless legally enforceable and did in fact limit his entitlement. This Bulletin reviews this decision with regard to the termination clause, and focuses on the importance of properly drafted termination clauses for charities and not-for-profits when negotiating employment contracts with their employees.
For the balance of this Bulletin, please see Charity & NFP Law Bulletin No. 415.
Read the February 2018 Charity & NFP Law Update
