Operating Inter-Provincially

By Adam Aptowitzer

We have written more than once about the legal requirements when a charity operates in more than one province. At the Canadian Bar Association's National Charity Law Symposium in April we presented a paper outlining the various corporate, fundraising, and registration requirements for charities operating in more than one province. That paper is posted on our website here along with copies of the provincial forms necessary filing (and current as of early 2010).

There are two critical areas for charities to keep in mind. The first are the general corporate requirements, including rights over the corporate name, that apply when an organization begins operations in a new province. Many of the provinces have similar tests for concluding when an organization is operating in that province (but there are differences). A charity is clearly operating in a province when it has some sort of permanent location set up there. But, the obviousness of the answer declines with the elements of a physical presence. For example, is an organization providing counselling over the telephone operating in that province? What if it just has a listing in a phone book? Or, more saliently, what if it simply requests donations via email or websites from residents of that province.

These are often technical legal questions which require advice from an experienced professional. Generally, and depending on the province, the charity will operate with impunity in the province until they are confronted with an issue like a lawsuit or a dispute over the organization's name. In these cases the corporation may find that it does not have the rights to fight the lawsuit or the rights over the name that it thought it did.

Organizations also need to concern themselves with the fundraising and registration rules of different provinces. In many cases, the provinces apply their rules on a wide range of organizations (such as agricultural, sporting, or philanthropic), and not simply those that may be considered charities by the Federal government.

Alberta and Saskatchewan for example have rules in place which require an extra-provincial charity to apply for a license if they expect (or actually receive) funds in the province over the minimum threshold. Quebec requires charities whether registered with the CRA or not to register separately with them. And PEI also has a separate registration regime for charities which are not registered with the Federal government.

The consequences for charities of not complying with these rules vary. In the Quebec case, Quebec resident donors cannot claim provincial donation tax credits unless the charity is registered in that province. In other provinces, and other laws, the risk is generally a fine.

In all cases, organizations beginning operations in another province should speak with an experienced advisor familiar with the rules in that jurisdiction in order to best protect the charity.