Charitable Gifts Act, R.S.O. 1990, c. C.8

Charitable Gifts Act

R.S.O. 1990, CHAPTER C.8

Historical version for the period May 5, 2008 to December 14, 2009.

Last amendment: 2007, c. 7, Sched. 3.

Definition

1. In this Act,

“person” includes a corporation and the heirs, executors, administrators or other legal representatives of a person to whom the context can apply according to law. R.S.O. 1990, c. C.8, s. 1.

Where interest to be disposed of

2. (1) Despite any general or special Act, letters patent, by-law, will, codicil, trust deed, agreement or other instrument, wherever an interest in a business that is carried on for gain or profit is given to or vested in a person in any capacity for any religious, charitable, educational or public purpose, such person has power to dispose of and shall dispose of such portion thereof that represents more than a 10 per cent interest in such business. R.S.O. 1990, c. C.8, s. 2 (1).

Exception

(2) Subsection (1) does not apply to an interest in a business given to or vested in any organization of any religious denomination. R.S.O. 1990, c. C.8, s. 2 (2).

Life interests, etc.

(3) Where an interest to which subsection (1) applies is subject to a life interest, life annuity or income for life, so much of the interest as is necessary to provide such life interest, life annuity or income for life shall be deemed to be given or vested when such life interest, life annuity or income for life ceases to exist. R.S.O. 1990, c. C.8, s. 2 (3).

Meaning of “interest in a business”

(4) For the purposes of this Act, a person shall be deemed to have an interest in a business,

(a) if the person is a part owner of the business;

(b) if the person holds or controls, directly or indirectly through a combination or series of two or more persons, one or more shares in a corporation that owns or controls or partly owns or controls the business; or

(c) if the person holds or controls, directly or indirectly through a combination or series of two or more persons, one or more bonds, debentures, mortgages or other securities upon any asset of the business. R.S.O. 1990, c. C.8, s. 2 (4).

Idem

(5) For the purposes of this Act but subject to subsection (3), an interest in a business shall be deemed to be given to or vested in a person for a religious, charitable, educational or public purpose so long as the interest or the proceeds thereof or the income therefrom is to be used for any such purpose at any time and even though before any such use is made thereof the interest or the proceeds thereof or the income therefrom is to pass into or through the hands of one or more persons or is subject to a life or other intermediary interest. R.S.O. 1990, c. C.8, s. 2 (5).

Where interest to be disposed of, wills

3. (1) Where an interest to which section 2 applies was given or vested pursuant to a will or other testamentary instrument, section 2 shall be complied with within seven years after the death of the testator. R.S.O. 1990, c. C.8, s. 3 (1).

Idem, trust deeds, etc.

(2) Where an interest to which section 2 applies was given or vested pursuant to an instrument other than a will or other testamentary instrument, section 2 shall be complied with within seven years after the date of the instrument. R.S.O. 1990, c. C.8, s. 3 (2).

Extension of time

(3) A judge of the Superior Court of Justice may from time to time extend the period mentioned in subsection (1) or (2) for such further period as he or she considers proper, if the judge is satisfied that the extension will benefit the religious, educational, charitable or public purpose concerned. R.S.O. 1990, c. C.8, s. 3 (3); 2006, c. 19, Sched. C, s. 1 (1).

Determination of profits

4. (1) Where and so long as an interest to which section 2 applies represents more than a 50 per cent interest in the business, the person to whom it is given or in whom it is vested and the person having control of the management of the business or the person’s nominee and the Public Trustee shall on or before the 30th day of June in each year determine jointly the amount of the profits earned by the business in its fiscal year ending in the calendar year next preceding. R.S.O. 1990, c. C.8, s. 4 (1).

Distribution of profits

(2) The business shall pay to the person to whom the interest is given or in whom it is vested the person’s share of the then undistributed profits of the business in the amounts and on the dates determined jointly by the persons mentioned in subsection (1). R.S.O. 1990, c. C.8, s. 4 (2).

Annual return

(3) For the purposes of this section, the person to whom the interest is given or in whom it is vested shall on or before the 31st day of March in each such year deliver to the Public Trustee a return with respect to its fiscal year ending in the calendar year next preceding showing,

(a) the assets and liabilities of the business;

(b) all accounts of profit and loss of the business;

(c) the particulars of any fee paid to any director; and

(d) where the amount of salary and other remuneration paid to any person is $8,000 or more, the particulars thereof,

and the return shall be verified by the certificate of an officer or the auditor of the business that the statements therein are true. R.S.O. 1990, c. C.8, s. 4 (3).

Examination of accounts, etc.

(4) For the purposes of this section, the Public Trustee may require of any person such further or other information and may make such examination of the accounts and records of the business as he or she considers necessary. R.S.O. 1990, c. C.8, s. 4 (4).

Determination by court

(5) If the persons mentioned in subsection (1) fail to determine jointly any matter mentioned in subsection (1) or (2), the matter shall be determined by a judge of the Superior Court of Justice, and in determining the amount of the profits of the business the judge may disallow in whole or in part any deduction, expenditure, expense, reserve, allowance or other sum that he or she considers to be unnecessary, excessive or improper having regard to the nature of the business and its financial position. R.S.O. 1990, c. C.8, s. 4 (5); 2006, c. 19, Sched. C, s. 1 (1).

Rights of acquisition

5. Where an interest in a business is being disposed of pursuant to section 2, any person acquiring any portion of such interest for other than religious, charitable, educational or public purposes may, subject to the approval of a judge of the Superior Court of Justice as to the consideration for and the terms and conditions of the acquisition, so acquire such portion although the person is the person disposing of such interest or is an officer, director, agent or employee of such person. R.S.O. 1990, c. C.8, s. 5; 2006, c. 19, Sched. C, s. 1 (1).

Investment of proceeds

6. The proceeds of any disposition pursuant to section 2 may be invested only in investments authorized under sections 27 to 31 of the Trustee Act, but no such investment shall be made that results in the person making the investment holding more than a 10 per cent interest in any one business. 2007, c. 7, Sched. 3, s. 1.

Investigation

7. (1) The Treasurer of Ontario may appoint any person to make an investigation for any purpose related to the administration or enforcement of this Act respecting any interest in any business that has been given to or vested in any person for any religious, charitable, educational or public purpose or respecting any person to or in whom any such interest has been given or vested. R.S.O. 1990, c. C.8, s. 7 (1).

Powers

(2) Every person appointed under subsection (1) to make an investigation has the powers of a commission under Part II of the Public Inquiries Act, which Part applies to the investigation as if it were an inquiry under that Act. R.S.O. 1990, c. C.8, s. 7 (2).

Powers of court

8. Upon the application of the Attorney General or any person interested, a judge of the Superior Court of Justice may make such orders as he or she considers proper to carry out the intent of this Act or to determine any matter arising under it. R.S.O. 1990, c. C.8, s. 8; 2006, c. 19, Sched. C, s. 1 (1).

Offence

9. Every person who contravenes this Act is guilty of an offence and on conviction is liable to a fine of not more than $10,000 or to imprisonment for a term of not more than one year, or to both. R.S.O. 1990, c. C.8, s. 9.

Charities Accounting Act unaffected

10. Nothing in this Act affects the operation of the Charities Accounting Act. R.S.O. 1990, c. C.8, s. 10.

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