So far, there is nothing too definitive from the CRA on their approach to the Ontario Not-for-Profit Corporations Act (“ONCA”) and changes that will be made to governing documents to bring Ontario non-profit corporations into alignment with ONCA. Unlike the Canada Not-for-profit Corporations Act (“CNCA”) transition around 2011, when they had a very defined approach that does not appear to be the case with ONCA.
All Ontario non-profits that are registered charities and will be changing their governing documents will need to provide copies to CRA. Unlike the 2011 transition in handling Federal CNCA continuances, it does not appear that CRA will be grandfathering old and inappropriate object clauses. While the former CNCA policy was efficient in terms of a regulator and allocation of resources, it meant that some CNCA registered charities got to keep completely inappropriate objects.
When a charity provides corporate documents to CRA that include the charity’s objects, CRA will review the documents. For instance, if a corporation makes corporate changes under ONCA, it must provide the amended corporate documents to CRA. CRA is not limited to reviewing only the most recent changes. In some cases, even if the objects have been previously approved by CRA, CRA can ask for changes to the objects.
Unless the charity’s objects have been approved by CRA within the last nine years (when CRA’s new guidance on objects was finalized) and your activities were accurately described and have not changed, it is an open question whether CRA would view the objects as being legally and exclusively charitable. Before making governance changes, especially as it relates to the objects, it may be prudent to obtain CRA pre-approval.
As objects are very important to CRA and the determination of whether a group should be a registered charity, and therefore for registered charities, it makes sense to have your objects reviewed and if necessary amended, by a charity lawyer who is familiar with CRA requirements.
You might also find our article “The objects of many Ontario non-profits that are registered charities might not be charitable or appropriate“ helpful. Objects are very important and often Canadian charities don’t understand that even though they are a registered charity, their objects may not actually be charitable.
By Mark Blumberg, Blumbergs Professional Corporation
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- The burden of care: Addressing challenges in employment in the nonprofit sector – new report by Steven Ayer on Charity/NPO sector employment - February 2, 2024
- Only about 9 months left for Ontario non-profits to deal with the Ontario Not-for-Profit Corporations Act (“ONCA”) – time is running out - January 31, 2024
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