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Canada Issues: April 2004 Public Policy Update

Federal Privacy Law (PIPEDA)

The Privacy Commissioner of Canada has verified that fundraising will not be considered a 'commercial activity' under the federal privacy law that went into effect for all organizations at the beginning of 2004.

The Personal Information Protection and Electronic Documents Act (PIPEDA) applies to all commercial activities. While many officials in the government have indicated that they did not believe that fundraising should be considered a commercial activity, there was no written guidance or assurance until now.

The statement, posted on the Privacy Commissioner of Canada's website, lists several specific activities which are not considered commercial, including fundraising, collecting membership fees, organizing club or organization activities, compiling a list of members' names or addresses, and mailing out newsletters.

The statement also lists one explicit commercial activity: selling, bartering or leasing membership lists or lists of donors. For commercial activities, PIPEDA requires organizations to obtain the consent of the individual before collecting, using or disclosing his or her personal information.

Despite the ruling, AFP encourages members to examine all of their activities not only through the 'commercial test' (to see if it falls under PIPEDA's jurisdiction as a commercial activity), but also through the lens of best practices. AFP and other fundraising organizations have created several documents to help members ensure their charities are in compliance with PIPEDA. Those documents can be found on the AFP website at the link below:


For Government Relations Chairs: This is one of the most important rulings to date regarding the federal privacy bill. It confirms AFP's reading of the bill and comments made by other federal officials. AFP distributed an email to all Canadian members regarding this announcement, but chairs should follow up at a chapter meeting to ensure the development is widely known.

CRA Committees

The Canada Revenue Agency (CRA - formerly the Canadian Customs and Revenue Agency) has put together two committees to work on charity issues. AFP members have been named to both committees to ensure the fundraising perspective is considered in CRA activities and decisions.

The Charities Advisory Committee, comprised of 15 members from the charitable sector, will advise the agency in a number of areas, including emerging issues and trends in the charitable sector, the administration of new sanctions and the revised appeal process.

Tad Brown, finance and development counsel for the University of Toronto and chair of AFP's Canadian Government Relations Committee, has been named to the committee.

CCRA also has set up a Technical Advisory Committee that will provide a forum for the identification, discussion and resolution of technical issues related to registered charities and the Income Tax Act. The first meeting of the committee is set for May 20 in Ottawa.

The committee includes representatives from a variety of charity and fundraising groups, including the Canadian Bar Association, the Canadian Association of Gift Planners, the Canadian Center for Philanthropy and the Certified General Accountants Association. AFP's representative to the committee will be Andrea McManus, CFRE, president of The Development Group and AFP's vice chair for external relations.

AFP will provide periodic updates about what each of these committees is working on and how they will impact fundraising and the charitable sector.

For Government Relations Chairs: AFP's involvement in both of those committees indicates the association's increasing standing and reputation in the national public policy arena. AFP's presence will ensure that the fundraising perspective is considered as CRA addresses numerous charity issues.

Senate Banking Committee Hearings on Charitable Giving

AFP was scheduled to appear at a hearing in March before the Standing Senate Committee on Banking, Trade and Commerce at a hearing on policy changes to encourage charitable giving.

However, the hearing was canceled several days before it was set to take place. The committee has indicated that the hearing will now occur later in the year, but no firm timetable has been established yet.

The committee is tasked with developing a comprehensive study about charitable giving in Canada that will be presented to Parliament later in the fall. AFP will be commenting on provisions to encourage additional charitable giving, such as the complete elimination of the capital gains tax on gifts of qualified securities to charity.

Alberta Fundraising Regulations

In March, the Alberta Minister of Government Services amended the Charitable Fundraising Regulation by increasing the threshold to require charitable organizations to prepare audited financial statements.

Previously, charities raising $100,000 or more in gross annual income would have to prepare audited financial statements. The amount has been raised to $250,000 in gross contributions per year.

There were two key reasons for this amendment:

  1. The previous floor of $100,000 was too low for smaller charities with limited resources to be required to use the services of an auditor.
  2. Canada Revenue Agency (CRA) recommends that charities prepare and file audited financial statements if their gross annual income from all sources is more than $250,000. Provincial requirements are now consistent with the CRA recommended guidelines.

The government of Alberta has prepared a helpful fact sheet that contains information regarding the changes noted above, as well as requirements regarding disclosures and the maintenance of donor records.

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