Social Enterprise in Ontario – New Kid on the Block?


Written on February 24, 2015 – 9:19 am | by Katie Ionson

Two interesting developments occurred recently that impact the not-for-profit legal sector in Ontario. Although neither results in immediate alterations to the law, they signal possible changes which may be relevant to donors involved in long term, strategic giving.

The first of these developments is the Ontario government’s recently released report on the prospect of introducing social enterprise legislation in Ontario.[1] In the context of the report “social enterprise” refers to a dual purpose corporation – one that would have an overriding social purpose but also be permitted to engage in for-profit activities (e.g. issuing capital to investors to raise funds, carrying on a profitable business to fund activities related to a social purpose).

Legislation providing for this type of entity could be a positive development for the not-for-profit sector. Not-for-profit organizations, including charities, are currently unable to issue shares and distribute dividends, and therefore cannot attract equity investors. There is also general uncertainty surrounding when and to what extent such an organization can engage in for-profit activities without losing its not-for-profit status. Legislation of this type is already in place in some Canadian provinces (B.C. and Nova Scotia) and the U.K.

Overall, the report favours the introduction of social enterprise legislation and contains suggestions for effective legislation. A few of the highlights include:

  • Organizations should be able to raise share capital from investors seeking a financial and social return. The legislation should provide the opportunity for other stakeholders (e.g. founders, employees) to acquire equity in the organization.
  • There should be constraints on the distribution of assets/profits to investors to protect the organization’s social purpose, although profit-sharing should be permitted.
  • Organizations should be required to prepare an annual “social benefit report”, which would include information regarding the organization’s activities in support of its social purpose. This report would be approved by the directors, circulated to shareholders and publicly available.

The second development is less positive. In a recent technical interpretation, the CRA was asked whether a B.C. social enterprise[2] could qualify as a non-profit organization for tax purposes if it elected to distribute all of its profits to charities, rather than investors.[3] The CRA responded that even where the articles of the social enterprise stipulate that all profits will be contributed to charity, the entity will not qualify as a non-profit for tax purposes. This is because, in the CRA’s opinion, the choice of incorporating legislation indicates that the entity is organized for a for-profit purpose. Under the Income Tax Act, non-profit organizations must be organized and operated exclusively for non-profit purposes.

[1] The report can be accessed here: http://www.ontariocanada.com/registry/view.do?postingId=17642&language=en. The government has asked for the public’s feedback on the report. Comments are due May 4, 2015.

[2] Referred to as a “community contribution company”.

[3] 2014-0540031E5. Not-for-profit organizations (e.g. those incorporated under not-for-profit legislation) will not necessarily qualify as non-profit organizations for tax purposes. The Income Tax Act sets out a separate test that focusses on the operations of the organization.

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    How To Be (Better)Prepared For Your Next Medical Appointment


    Written on February 23, 2015 – 6:53 am | by Audrey Miller

    In my day to day work, I have the opportunity to attend medical specialists appointments with my clients. Many POA’s for Personal Care may find themselves in this role as well. As part of this preparation, their medical history is reviewed and summarized including highlighting the relevant reports, X-rays test results as well as including details of current medications. When possible, a pharmacy print out is helpful.

    Any questions the client and their family may have are listed. In addition I suggest having a conversation with the current caregiver and review their log book notes. (Note: reputable agencies will have their caregivers document daily events/concerns).

    By preparing both a summary chart and having a list of questions ready for the doctor, this preplanning can save both time and aggravation. Each time, I have found the specialist/physician to be appreciative of having an accurate summary that has been concisely presented in a comprehensive manner. The other benefit of course, is that each new doctor always asks the same questions as part of their history taking. This can be annoying and difficult for many of our clients who may be tired (after having a long wait) and may not be accurate historians. By providing an overall snapshot of their health history in an organized manner allows doctors to have more time to listen to their patient and talk with them about improving their health and focus on the presenting problems and identify treatment plans.

    Most of us don’t keep copies of test results and reports. It can be difficult to keep track of our complicated health histories, especially as we age and have co morbid conditions. The January 2011 report by the Canadian Institute for Health Information, titled “ Seniors and the Health Care System: What is the Impact of Multiple Chronic Conditions” indicates that “nearly one-quarter (24%) of all Canadian seniors reported having 3 or more of the 11 chronic conditions.”

    Without electronic health records being uniformly available, the onus is on each of us as patients to know our histories and keep our own records. How many times have we all gone to see a new doctor who does not seem to be very knowledgeable or familiar with our medical history or reasons for the referral? Unfortunately, this may be the norm rather than the exception.

    If you need help, ask a family member or a professional to sit down with you to start documenting this important information. There are several planning tools available. Having ready access to your own health information which can be easily summarized or provided at your next medical appointment is probably one of the best things you can do for yourself and a loved one.

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      Ban on Physician Assisted Suicide declared unconstitutional by Supreme Court – Part II


      Written on February 20, 2015 – 6:00 am | by Jasmine Sweatman

      We discussed in our blog last week the Carter decision, which has been lauded (or complained of depending on your view) as a resurgence of judicial activism. What does seem clear is that the Supreme Court has opened the door for substitute decisions makers to act on the authority given to attorneys to direct physician assisted death for incapable persons.  As Susan Woodley points out in her paper delivered as part of the Law Society’s Annotated Power of Attorney for Personal Care yesterday, “the reasoning in Carter by natural extension provided the right of a capable person to instruct an attorney for personal care to direct physician assisted death following the grantor’s incapacity in certain circumstances.” She argues “to deny a person’s right to choose physician assisted death where such person has provided instructions to their attorney while capable and fully informed on the consequences would be unjust … and impinge on the security of their person in a manner that is not in accordance with the principles of fundamental justice”. Susan’s paper also provides some suggested amendments similar to s.50 of the Substitute Decisions Act to deal with physician assisted death which are worth considering.

      The risk is however that the judicial branch has given the legislative branch 12 months to deal with the current legislation.  The fear is, that despite this best effort by the 9 Supremes, Ottawa will react in the same way that it did when faced with the similar mandate after Bedford.

      Now being the third largely publicized personal autonomy decision in recent history and the second which requires Parliament to redraft the law (Bedford re: prostitution being the first) it remains to be seen whether the tackling of these difficult decisions will be taken up by Parliament. Parliament is also at cross-roads.  To follow a la Bedford where the re-written prostitution laws according to many sources are not adequate and do not help or protect sex-workers (which is why the law was declared unconstitutional initially) would be a step back.

      Hopefully Parliament will redraft the assisted suicide laws not to take away what the Supreme Court has given this country.

      Until next time,

      Jasmine Sweatman

       

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