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Inside Internal Controls

News and discussion on implementing risk management

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Financial Management

CRA revises position on the retention of church envelopes

As a condition of charitable registration, charities are required to keep proper books and records. This requirement not only enables the Canada Revenue Agency (“CRA”) to audit charities efficiently, but it also ensures that charities are able to justify and validate the information provided on their T3010, Registered Charity Information Returns. One of the most common […]

 

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Overview of record keeping obligations for non-profit organizations and registered charities

While non–profit organizations and charities are usually busy carrying out the purposes of their organization, record keeping often takes a back seat to other priorities. However, good record keeping practices by a non–profit organization or a registered charity should not be overlooked.

 

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Proving consent under CASL: CRTC issues enforcement advisory notice

The Canadian Radio–television and Telecommunications Commission has issued an Enforcement Advisory notice directed to businesses and individuals that send commercial electronic messages (CEMs) as part of their commercial activities. Notably, the sender of CEMs must have the consent of the recipient to send them a message, or else the message is considered spam.

 

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Israeli arrests provide lessons for Canadian charities

For most Canadians and Canadian Charities the Anti-Terrorism rules are a red herring to be reviewed only in the rarest of situations, if at all. However, recent events in Israel provide some motivation for Canadian Charities doing work abroad to take a closer look at these rules. According to international news reports the Israeli authorities have arrested the Gazan head of an international Christian charity on the allegation that he was funneling international aid donations to Hamas.

 

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The pitfalls of unwritten contracts – Part 3

Getting your contracts in writing is half the battle. You must also ensure that your contract says what you want it to say, and says it clearly. The main issue in the following case was the interpretation of an employment agreement.

 

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Ministry of Finance accepting comments on new Employer Health Tax rules for charities

The Ontario Ministry of Finance is proposing a new regulation under the Employer Health Tax Act, to include special Employer Health Tax rules for registered charities. The new regulation could be effective as early as January 1, 2017.

 

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The art of restraint

A restrictive covenant is a class of legal “promise” imposing a restriction on one party for the benefit of another. When drafted correctly, restrictive covenants are an invaluable tool to protect your business.

 

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Private right of action under Canada’s Anti-Spam Law (CASL)

As of July 1, 2017, individuals and organizations will be entitled to institute a “private right of action” before the courts against those that contravene certain provisions of Canada’s Anti-Spam Law (“CASL”). In the event of a contravention of the message rules in CASL, a monetary penalty up to a maximum of $1,000,000 per day may be imposed. This private right of action should be taken seriously right now. From this perspective and building on previous publications, this bulletin discusses this new mechanism.

 

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Whistleblowers: The AMF will not offer any reward

On February 18, 2016, after a thorough and rigorous analysis which included closely monitoring the rewards-based whistleblower programs offered by the U.S. and Ontario, the Autorité des marchés financiers (the AMF) announced that it does not intend to offer financial rewards to whistleblowers. Instead, the AMF wishes to promote a whistleblower program that builds on existing measures.

 

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An expanded Canada Pension Plan (and a very questionable future for the Ontario Retirement Pension Plan)

The Ontario Retirement Pension Plan (ORPP) seemed like a sure thing—until it wasn’t. On June 20, 2016, Bill Morneau, the federal Minister of Finance, and eight of ten provincial finance ministers did what many to this point thought was impossible: reach an agreement in principle to expand the Canada Pension Plan (CPP).

 

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Why do we need members? We have a board…

Our incorporated charity and non-profit clients often wonder why they need members. Organizations with few governance participants, either because they are small or because they are controlled by a small group, sometimes wonder if they may operate with only a board. Our US clients looking to set up a Canadian affiliate or interact with existing Canadian charities are often accustomed to non-profit corporate statutes that allow a corporation to have only a self -perpetuating board without any members.

 

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Prepare for harmonized sales tax (HST) rate changes

HST rates are set to increase in three provinces. Businesses based in, or doing business with these provinces should prepare for the changes.

 

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Like pornography – The Court will know major T3010 inaccuracies when it sees them

In most cases the application of law is conceptually simple the law is transgressed and a punishment applies. Unfortunately, in the charity world nothing is simple. When a charity is found to have transgressed the law the Charities Directorate may decide on a range of options. One widely used mechanism is the Compliance Agreement (a “CA”) in which the Directorate identifies the offence and the charity promises not to do it anymore. If (and when) the Directorate audits again it almost always moves directly to revocation if the charity is again (or still) offending in the same way.

 

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Provincial and territorial 2016 budget overview

Throughout the last few months a number of provinces and territories have released their Budgets for the year 2016. The following is a brief overview of each of those Budgets released to date.

 

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Non-profit’s funding challenges lead to constructive dismissal

The Ontario Labour Relations Board (ORB) recently held that a non-profit’s non—payment of wages and funding challenges amounted to constructive dismissal of one of its employees. (See Aundrea Di Giuseppe v Hospice Richmond Hill, 2015 CanLII 56255 (ON LRB)). Background The employee was the Executive Director at Hospice Richmond Hill (the “Employer”) for over 8 […]

 

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