The Canada Revenue Agency ("CRA") has just released its Report on the Charities Program 2015-2016 (the "Report") in which it reports to the Canadian public on what it has been engaged in during the 2015-2016 fiscal period. While the Report contains numerous interesting facts, one in particular is the CRA Charities Directorate's announcement of its upcoming project on ineligible individuals.
Our readers will recall, as previously reported, that if a Canadian registered charity has an ineligible individual as a director or a senior manager, the charity may itself be revoked. An ineligible individual is one who: (i) was a director or senior executive of another registered charity that was revoked for serious misconduct; or (ii) has a criminal record for fraud or some misconduct that is particularly relevant to the charity's mission.
The Report confirms that "[t]he Directorate intends to do an in-depth review of the ineligible individual issue to:
- determine the extent and impact of ineligible individuals
- provide outreach and education to charities about ineligible individuals
- detect and address serious non-compliance of registered charities with ineligible individuals"
We will, of course, be monitoring this CRA project and making submissions as appropriate. We have certainly been surprised to see charities continue to be registered despite having ineligible individuals involved at a senior level. In the meantime, all registered charities should be enquiring of their directors whether they are ineligible individuals. We suggest that this be done as part of the onboarding of new directors, but also on an ongoing basis.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.