Estate Planning

The Good Government Act, 2009: Reform to the Regulation of Charities

By Hull & Hull LLP

As I noted yesterday, Ontario's Good Government Act 2009 has received royal assent. Over 300 pieces of legislation have been amended or repealed, including various statutes dealing with the regulation of charities in Ontario.  

Of particular note are the following two changes:

1.    The Charitable Gifts Act (the 'CGA') has been repealed. This Act has long been criticized for unnecessarily restricting the ability of charities from directly or indirectly owning more than a 10% interest in a business, particularly as the Income Tax Act already imposes various restrictions on registered charities conducting business activities. The repeal of the CGA may be a welcome change to Ontario charities wishing to acquire an interest in a business for investment purposes. 

2.    An amendment to the Charities Accounting Act ('CAA') relates to the section dealing with interests in real or personal property held for a charitable purpose. Historically, the CAA restricted the ownership of real estate by an Ontario charity by requiring that land could only be held to the extent that it was used for the charitable purpose. A charity could not own excess land and lease it out. Any excess property was subject to vesting in the Public Guardian and Trustee. The amended section now simply provides that a charity that holds an interest in real or personal property for a charitable purpose shall use the property for the charitable purpose. This amendment will presumably allow charities to hold excess property, both real or personal, and invest such property in order to earn income. 

For a more fulsome discussion of the effect of the Good Government Act, 2009 on charities, see Miller Thomson's informative newsletter.

Bianca La Neve 

Full post as published by Toronto Estate Law Blog on February 09, 2010 (boomark / email).