Standard 2: Compliance with Laws
The land trust fulfills its legal requirements as a non-profit charitable organization and complies with all relevant laws and statutes.
Background
A land trust must comply with applicable laws. An understanding of, and compliance with, the basic legal requirements is fundamental to operating a land trust. This includes such matters as becoming and remaining a charitable organization. A land trust that fails to comply with these requirements can face financial penalties and fines, which could also apply to directors, and even revocation of its charitable status. A lawyer who understands charitable organizations can assist, but ultimately it is the land trust board’s responsibility to see that all requirements are met. Requirements include, but are not limited to: completing all corporate filings, completing the Registered Charity Information Return, Form T3010; retaining charitable status; following charitable solicitation laws; and adhering to the relevant federal, provincial or local regulations on non-profits or land trusts (such as waiting periods before being able to hold conservation agreements in some provinces).
Relevant Law
- Canada Revenue Agency policy interpretation of Income Tax Act, SC 1985, c. I; see
- Income Tax Act, SC 1985, c. I, s. 149.1 (6.3);
see also Canada Revenue Agency policy interpretations at
- Society Act, RSBC 1996, c. 433, s. 27.
- Canada Corporations Act, RSC 1970, c. C-32.
- Land Title Act, RSBC 1996, c. 250, s. 219:
- Receiver General – to hold Covenants in BC:
- Income Tax Act, SC 1985, c. I;
see Canada Revenue Agency guide “Employee or Self-Employed?” at:
- Income Tax Act, SC 1985, c. I, s. 149.1 (6.3);
see also Canada Revenue Agency policy interpretations at
- Expropriation Act, RSBC 1996, c. 125.
- Expropriation Act, SC 1996, c. E-21.
- Property Law Act, RSBC 1996, c. 377, s. 35.
- Land Title Act, RSBC 1996, c. 250, s. 218-223.
- Society Act, RSBC 1996, c. 433, s. 39, 41.
- Canada Not-for-profit Corporations Act, SC 2009, c. 23, s. 179-194.
- Canada Revenue Agency policy interpretation of Income Tax Act, SC 1985, c. I; see:
- Society Act, RSBC 1996, c. 433; Society Act Regulations, BC Reg 4/78
- Canada Corporations Act, RSC 1970, c. C-32.
- Canada Not-for-profit Corporations Act, SC 2009, c. 23.
- Winding-Up and Restructuring Act, SC 1985, c. W-11.
- Land Title Act, RSBC 1996, c. 250, Parts 10 and 10.1
- Canada Revenue Agency policy interpretations of Income Tax Act, SC 1985, c. I; see:
- Lobbyists Registration Act, SBC 2001, c. 42, s. 3
- Employment Standards Act, RSBC 1996, c. 113.
- Workers Compensation Act, RSBC 1996, c. 492.
- Human Rights Code, RSBC 1996, c. 210.
- Canada Pension Plan, c. C-8.
- Employment Insurance Act, SC 1996, c. 23.
- Personal Information Protection Act, SBC 2003, c. 63
- Personal Information Protection and Electronic Documents Act, SC 2000, c. 5.
- Income Tax Act, SC 1985, c. I, s. 149.1 (6.3);
see also Canada Revenue Agency policy interpretation at
- Income Tax Act, SC 1985, c. I, s. 118.1;
see also Canada Revenue Agency policy interpretation at
- Society Act, RSBC 1996, c. 433.
- Canada Corporations Act, RSC 1970, c. C-32.
- Society Act, RSBC 1996, c. 433, s. 30.
- Canada Revenue Agency policy interpretation of Income Tax Act, SC 1985, c. I;
see Income Tax Technical News No. 26 at:
- Taxation (Rural Area) Act, RSBC 1996, c. 447.
- School Act, RSBC 1996, c. 412.
- Police Act, RSBC 1996, c. 367.
- Property Transfer Tax Act, RSBC 1996, c. 378.
- Social Service Tax Act, RSBC 1996, c. 431.
PRACTICE
C. Charitable Status
The land trust has qualified for federal charitable status and complies with requirements for retaining this status, including prohibitions on private benefits and political campaign activity. If the land trust holds, or intends to hold, conservation agreements, it complies with the applicable enabling provincial legislation. Land trusts that intend to hold Ecological Gifts must meet the criteria of Environment Canada (see 10C).
Background
The federal government provides an exemption from income tax for qualified non-profit organizations and allows the deductibility of contributions for those non-profits with charitable status. This subsidy of the non-profit organization is offered in return for the organization’s operation in the public interest. The Canadian Revenue Agency (CRA) requires that charitable organizations operating as public charities meet certain tests both at the time of application for charitable status and on a continuing basis. These include avoiding the creation of an undue benefit, a prohibition on political activity, complying with limitations on lobbying, and meeting the public benefit test. In some provinces, land trusts that intend to hold conservation agreements also need to receive approval to do so from the provincial government. In addition, Environment Canada must approve land trusts who intend to participate in the Ecological Gifts Program.
Assessment Questions
BC Assessment Questions
- Has the land trust received charitable status?
- Does the land trust understand and comply with (check all that apply):
- Prohibitions on undue benefits
- Reporting on unrelated business income
- Federal and provincial financial reporting requirements (CRA Form 3010 and relevant provincial charities report forms)
- Advocacy Requirements including Registering for Advocacy activities where needed
CLTA Assessment Questions
- Has the land trust received a letter from the Canada Revenue Agency (CRA) granting charitable status?
- The land trust understands and complies with (check all that apply):
- Prohibitions on undue benefits
- Reporting on unrelated business income
- Federal and provincial financial reporting requirements
(CRA Form 3010 and relevant provincial charities report forms)
Resources: Example Policies & Template Documents
Template Documents
- TD Securities Donations for Charities
- Applying to Become a Registered Charity Ourom SS07
-
REVCDA Registered Charities and Income Tax Act link
http://www.cra-arc.gc.ca/chrts-gvng/menu-eng.html
- LTABC's Information on Forming a Land Trust
