Read the April 2026 Charity & NFP Law Update

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The Honourable François-Philippe Champagne, Minister of Finance and National Revenue, tabled the Spring Economic Update 2026 (the “Spring Update”) in the House of Commons on April 28, 2026. The Spring Update includes several measures relevant to the charity and not-for-profit sector, including a proposal to modernize tax rules for the charitable sector, confirmation of the government’s intention to proceed with certain previously announced measures impacting the sector, and various grants and funding measures for the sector.

Of particular note, the Spring Update proposes to modernize the framework for the charitable sector in 2026-27. Although the Spring Update does not contain any specific details regarding the framework, it states that the Government of Canada’s first step will be to seek feedback from key stakeholders and relevant agencies through a consultation. The general aim will be to align with best practices adopted by other G7 countries. It will be essential for the charitable sector to carefully monitor what the Government is planning to do with this modernization initiative.

As well, the Spring Update confirms the federal government’s intention to proceed with certain previously announced tax and related measures, as modified to take into account consultations and deliberations since their release. One such listed measure is the draft legislation released on January 29, 2026, for reporting by non-profit organizations under paragraph 149(1)(l) of the Income Tax Act (ITA) and by agricultural organizations, boards of trade and chambers of commerce under paragraph 149(1)(e) of the ITA. This proposed legislation was discussed in further detail in the February 2026 Charity & NFP Law Update.

The federal government has also confirmed its intention to proceed with the legislative proposals released on August 12, 2024, and subsequently set out in the 2024 Fall Economic Statement regarding charities and qualified donees. As previously reported in Charity & NFP Law Bulletin No. 530, those proposals include amendments to section 149.1 of the ITA concerning registered foreign charities that are qualified donees, including a new definition of “registered foreign charity,” extending the registered status period from 24 months to 36 months, and requiring registered foreign charities to file an information return.

In addition to these measures, the Spring Update refers to several grants and funding measures involving community organizations, community safety, and food security, including the following:

• • Community Volunteer Income Tax Program Grant:a proposed $18.7 million over three years, starting in 2026-27, for the Canada Revenue Agency to renew and expand the Community Volunteer Income Tax Program Grant, which supports community organizations that host free tax preparation clinics for individuals with modest incomes and simple tax situations.
  • Canada Community Security Program:The Spring Update proposes $75 million over five years, starting in 2026-27, for Public Safety Canada to continue supporting eligible organizations, which may include places of worship, with physical security enhancements. This funding is noted in the context of rising hate-related crimes. Separately, as discussed in the March 2026 Charity & NFP Law Update, Bill C-9, the Combatting Hate Act, proposes amendments to the Criminal Code concerning hate propaganda, hate crime, and access to religious or cultural places.
  • Food banks and food security:The Spring Update also refers to $20 million in previously announced funding to support food banks and other organizations that provide food assistance to families in need.

Separate from the Spring Update itself, charities and not-for-profits may also wish to note the ongoing pre-budget consultation process for the 2026 Federal Budget. As reported in the March 2026 Charity & NFP Law Update, the House of Commons Standing Committee on Finance launched its annual pre-budget consultations earlier this spring. The Committee has since extended the deadline for submitting written briefs beyond the original April 30, 2026 deadline until May 22, 2026, providing additional time for Canadians and organizations to participate. This extension gives charities and not-for-profits a further opportunity to raise sector-specific priorities and concerns for possible inclusion in the Committee’s report to Parliament for the 2026 Federal Budget.

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At the Canadian Bar Association’s 2026 Charity Law Online Symposium held on Friday, April 24, 2026, Sharmila Khare, Director General of the Charities Directorate of the Canada Revenue Agency (CRA), announced a reorganization of the Charities Directorate as part of the CRA’s modernization efforts.

The restructuring introduces the following five new Divisions:

• • Client Division
  • Charities Audit Division
  • Policy Division
  • Digital and Program Support Division
  • Screening and Workload Development Division

It is noteworthy that the Review and Analysis Division (“RAD”) no longer exists. Ms. Khare confirmed that responsibility for all audits conducted by the Charities Directorate, including those previously carried out by RAD, has now been consolidated within the new Charities Audit Division.

While the announcement provides a high-level overview of these structural changes, the full operational impact of these changes remains to be seen. Ms. Khare indicated that additional details will be provided in CRA’s next Quarterly Update. Charities are encouraged to refer to the Quarterly Update when it becomes available to learn how the reorganization will affect their engagement with the Charities Directorate.

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The directors of the Windsor/Essex County Humane Society (the Society) passed a resolution to adopt a By-law in June 2024 to move from an open to a closed membership governance structure. The June 2024 By-law was not to take effect until the Society’s Articles of Amendment were approved later in the fall, which required a two-thirds majority vote (i.e. a special resolution of members). Shortly after the controversial termination of the Society’s long-serving Executive Director, 224 individuals applied for membership in the Society through an online portal, paid the required membership fees, and were advised that they would have voting rights at the next meeting. Contrary to their 2019 By-law, the Society had historically treated applicants as members without formal Board approval, but the Board “deferred” the approval of these new members and barred them from voting at an October 4, 2024 special meeting, where a revised version of the June 2024 By-law was approved by a simple majority of a significantly reduced group of 27 recognized members. The October 2024 By-law came into immediate effect as it removed the stipulation that it would not take effect until Articles of Amendment were issued. The applicants challenged both the exclusion of the new members and the validity of the October 2024 By-law.

On the first issue, the court held that the directors acted in bad faith in refusing to approve the new members. While the 2019 By-law contemplated Board approval, that requirement had been “honoured in its breach.” The June 2024 By-law was not going to have retroactive effect and therefore could not justify the Board’s pre-emptive disenfranchisement of the new members. The court found the Board’s conduct to be arbitrary and driven by an improper purpose, namely, to prevent individuals it perceived, without proof, to be aligned against the Board from voting on the By-law. The directors acted on assumptions about the applicants’ motives rather than any criteria set out in the By-laws, and did not make inquiries to verify those assumptions. The court emphasized that denying membership on “ideological or collateral grounds” is contrary to the duty of good faith under section 43 of the ONCA, and that the Board could not stack “the deck to reach the desired outcome.” All individuals who met the membership criteria and paid their dues prior to the record date were therefore deemed to be members entitled to vote.

On the second issue, the court concluded that the June 2024 By-law was not validly approved because it required confirmation by a special resolution of the members rather than a simple majority, and because many members were improperly excluded from voting, it “ceased having any force and effect no later than October 4, 2024.” In coming to this conclusion, the court interpreted the interplay between subsections 17(1) and 103(1) of the ONCA. The court held that By-law amendments affecting the transfer of membership in paragraph 103(1)(g), changing the manner of giving notice to members in paragraph 103(1)(k), and method of proxy voting in paragraph 103(1)(l) fall within a category of “fundamental changes” that attract enhanced member approval requirements.

Although section 17 generally permits By-laws to be confirmed by ordinary resolution, the statutory “carve-out” for matters listed in the enumerated exceptions mentioned above requires confirmation by special resolution. This interpretation was found to be most consistent with the scheme and goals of the ONCA, including its objectives of “enhancing corporate governance and accountability” and “member democracy.” Since the court held that the June 2024 By-law ceased having any force and effect no later than October 4, 2024, it also declared subsequent member meetings and corporate actions void ab initio, ordering that a new annual general meeting of members be held with the full and final membership list.

This decision underscores that courts will intervene in the internal affairs of charities where directors act in bad faith or contrary to statutory requirements, particularly where member rights are affected. For charities and not-for-profits, the case underscores the importance of applying membership criteria consistently as set out in their By-laws, avoiding decisions based on ideological or collateral grounds, and ensuring that changes to By-laws, especially those that affect fundamental changes, comply with the heightened approval thresholds under the ONCA, reinforcing that Boards must not manipulate procedure to predetermine outcomes.

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The dispute centred on what the court characterized as “multiple civil wars” between Cricket Canada (“CCanada”) and its provincial member organizations. The petitioners, four of the ten provincial CCanada members (being West Coast Cricket Organization, Alberta Cricket Association, Saskatchewan Cricket Association Inc., and Cricket Council of Ontario), filed an oppression petition under the Canada Not-for-Profit Corporations Act (“CNCA”) seeking the following orders:

• 1. a special general meeting (“SGM”) be held with an independent chair, at which all CCanada members be allowed to vote under the bylaws;
  2. the CCanada directors only act in the ordinary course of business until the SGM takes place, such that the Executive Committee of the CCanada board take no further unilateral actions without necessary board approval; and
  3. declaring the suspension of Alberta Cricket Association to be of no force and effect as contrary to the bylaws.

CCanada was mired in several deep controversies, including failing to file audited financial statements for nearly a decade (after incorrectly designating itself as a non-soliciting corporation) and its suspension from the Canadian Safe Sport Program following criminal charges against its then CEO. Tensions intensified when members requisitioned an SGM to remove certain directors of CCanada.

In response, the board of directors of CCanada purported to suspend one of those members, Alberta Cricket Association, through an email vote, effectively removing its voting rights ahead of the proposed SGM. Parallel efforts by the board of directors of CCanada were also underway to challenge the standing of another member organization, West Coast Cricket Organization, through an expedited “effective control” audit process.

The petitioners, representing a majority of the voting members of CCanada, alleged that CCanada engaged in oppressive conduct by, among other things, suspending Alberta Cricket Association and failing to call a requisitioned SGM. The Court applied the two-stage test for oppression to determine whether the evidence supported the reasonable expectation asserted by the petitioners and if so, whether the petitioners’ reasonable expectations were violated by conduct falling within the terms “oppression”, “unfair prejudice” or “unfair disregard” of a relevant interest. The court found that it was both a subjectively and objectively reasonable expectation that CCanada would strictly adhere to its own bylaws.

The court examined the purported vote of the directors of CCanada via email to suspend Alberta Cricket Association’s membership in CCanada despite contrary views in the email chain which were ignored. The court ruled that the suspension of Alberta Cricket Association via email voting by the directors of CCanada was procedurally invalid. This was based on the fact that CCanada’s bylaws did not permit a motion of the directors to be passed by email, as well as because key procedural requirements were not met including the lack of calling a proper meeting, no notice being provided for a meeting, no quorum requirements being met and the lack of unanimous written consent from all directors, as required under the CNCA and CCanada’s bylaws. The court noted that this resulted in the directors not being “provided adequate time or an appropriate forum to debate and discuss this important and impactful motion” at a meeting of the board, and “contrary views” being ignored.

In relation to the oppression remedy being sought by the petitioners, the court determined that it was both a subjective and objective reasonable expectation that CCanada would: (1) adhere to its by-laws when taking the significant step to expel a member organization, Alberta Cricket Association; and (2) not suspend a member without a procedurally fair process and arbitrarily remove its voting rights.  Based on these findings, the court decided that CCanada’s failure to comply with its governing rules resulted in both inequity and unfairness to its members and, through these actions, CCanada “exhibited each of oppression, unfair prejudice and unfair disregard of the interests of [Alberta Cricket Association] and its constituents”.

Accordingly, the court granted the petitioners’ requests, declaring the purported suspension of Alberta Cricket Association to be a nullity of no force and effect. The court then ordered CCanada to hold the requisitioned SGM within 21 days of the court’s decision or as agreed by the parties and that all present members including Alberta Cricket Association and West Coast Cricket Organization be permitted to vote at the SGM. The court also mandated that the SGM be chaired by an independent chair and ordered that the current board only act in the “ordinary course of business” until the SGM takes place, effectively stripping them of the power to take further unilateral actions against members.

This case is a stark reminder to charities and non-profits, particularly those with complex, member-based governance structures such as sports organizations, that bylaws are not merely aspirational. Rather, they are legally binding and enforceable, and courts will not hesitate to intervene when they are contravened. In this decision, the court highlighted a concern of charitable and not-for-profits using “donations, player fees, and taxpayer dollars” to fund litigation driven by “the egos and ambitions of certain named individuals”. The court warned that if such dysfunction continues, it has the authority to appoint a receiver to take the organizations out of the hands of their directors and operatives and return them to their proper mission.

As a takeaway from this decision, charities and not-for-profits must ensure their disciplinary and voting processes are transparent, documented, and fully compliant with their governing documents, including the bylaws. By so doing, organizations will avoid similar judicial intervention in the event of future disputes.

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The plaintiff, North Buxton Community Church (“NBCC”), argued that the property was acquired in 1866 by the Trustees of Bethel Congregation of BMEC and that the NBCC was their successor. They further argued that while BMEC may have had a claim to the property in the past, the Real Property Limitations Act (Ontario) (“RPL Act”) extinguished BMEC’s interest in 2014 due to the 10-year limitation period set out in that Act. In response, BMEC argued that the property was vested in it under its incorporating legislation, the BMEC Act, 1913, and that, as a result, it was and continues to be held in trust for BMEC. Accordingly, BMEC argued that its interest in the property was not subject to the limitation period in the RPL Act.

The court ultimately dismissed the plaintiff’s motion to convey the property to NBCC on the grounds that it had failed to provide evidence or legal principle that they were the Trustees of Bethel Congregation of the BMEC (being the owner registered on title) or that this Bethel Congregation existed as a separate entity from BMEC. The court instead found that the deed from 1866 linked the Bethel Congregation’s existence to BMEC and established that the trustees took title to the property for the benefit of and under the control of BMEC. The court also relied on the BMEC Act, 1913, which expressly identified the North Buxton property therein and vested it in BMEC for the use of the local congregation, subject to the trusts and governance provisions set out in that Act.

This, however, presented an issue given that the Trustees of the Bethel Congregation remain the registered owner of the property until BMEC applies to be registered pursuant to its statutory vesting, which NBCC claimed was barred by the Real Property Limitations Act (Ontario). On this issue, the court held that BMEC’s claim was not statute-barred because BMEC was not seeking a judgment to recover or obtain the property, which would have been subject to the Act. Instead, its application to be registered as the owner was a procedural mechanism to give effect to the statutory vesting rather than an action to recover land. The court also emphasized that BMEC’s substantive entitlement had already been settled by legislation more than a century earlier, and that the Land Titles registration issue did not extinguish BMEC’s statutory rights and related trust obligations in the property.

This decision highlights that courts are reluctant to treat registered title as conclusive where property is held through trustees, subject to trust obligations, or governed by special legislation. Long-term use of, historical connection to, and maintenance of a property do not equate to ownership absent a legal principle to ground it. This case serves as a cautionary example for charities and not-for-profits, and reinforces the importance of clearly documenting ownership, trust, succession, and governance arrangements, particularly where property is held through trustees or governed by special legislation.

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The graduated DQ rules, which came into effect for fiscal periods beginning on or after January 1, 2023, require registered charities with more than $1 million in property (not used directly in charitable activities or administration) to make qualifying disbursements equivalent to 3.5% of the first $1 million of these assets and 5% of amounts in excess of $1 million.

Drawing on early T3010 filing data, the report offers initial insight into how foundations have responded to these changes.

Notably, affected foundations collectively increased their disbursements by approximately $711 million beyond the amounts they disbursed prior to their last fiscal period (before the DQ changes). The vast majority of this increase (97%) was attributed to higher disbursement rates rather than other factors such as asset growth. The report also highlights that increased disbursements were spread relatively evenly across different types of charitable spending, including direct charitable activities, gifts to qualified donees, and grants to non-qualified donees.

At the same time, the findings suggest that many foundations are still adjusting to the new regime. Early data indicate that a majority (54%) of affected foundations did not meet their new DQ requirements in the first fiscal period after the change.

While the findings are preliminary, the report underscores that the full impact of the DQ changes will take time to assess, particularly in light of broader economic conditions affecting foundation assets and investment returns. For charities, these early trends suggest that while increased disbursements may present enhanced funding opportunities over time, variability in compliance and ongoing adjustment to the new regime may affect the timing and distribution of available funding. As such, organizations may wish to monitor further developments as additional data becomes available, and the policy framework continues to evolve. Readers are encouraged to review Imagine Canada’s research bulletin for further information.

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The 2025 Report found that the number of Canadians leaving charitable donations in their wills has doubled from 5% in 2019 to 10% in 2025, with 44% of Canadians saying that they are likely to leave a gift in their will to a charity. It also identifies a notable shift toward younger donors, Canadians from diverse cultural backgrounds and middle-income households showing greater interest in leaving charitable donations in their wills to create a lasting impact and support causes aligned with their values. Although only a minority of those interested have actually included such a bequest in their will, a much larger group is open to the idea but has not yet acted. Many remain in the decision-making phase or cite practical barriers such as needing more information, completing estate planning, or choosing which charities to support.

For charities and not-for-profits, the key takeaway from the 2025 Report is that legacy giving is a growing, accessible opportunity. Despite the growth, a significant gap remains between intention and action. A significant number of Canadians are open to leaving charitable gifts in their wills, but have not yet taken that step. The report also highlights that the most common barrier remains concern about leaving enough for loved ones, indicating that messaging must balance family priorities with charitable impact.

The 2025 Report underscores that organizations that prioritize education, normalize legacy giving in everyday donor conversations, and make it easy for supporters to plan a gift may have opportunities to receive substantial long-term funding, particularly when conversations occur during estate planning rather than only at the point of will writing. The report further notes that awareness of giving vehicles beyond wills, such as registered funds and life insurance, remains limited, representing an additional opportunity for education and outreach. With interest expanding across younger, more diverse, and middle-income donors, charities that adopt inclusive, proactive approaches now will be best positioned to benefit from the coming surge in intergenerational wealth. This includes engaging donors earlier, reflecting diverse motivations, and providing clear guidance to help convert intent into action.

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Many Ontario employers, including charities and not-for-profits that pay any employees the minimum wage, will need to adjust payroll before October 1, 2026, when Ontario’s general minimum wage rises from $17.60 to $17.95 per hour. The Ministry of Labour, Immigration, Training and Skills Development announced the increase on April 1, 2026, which applies across Ontario, and is expected to benefit more than 700,000 workers. The provincial government described the change as an annual inflation-linked adjustment, tied to a 1.9 per cent increase in Ontario’s Consumer Price Index.

Under the Employment Standards Act, 2000, most employees are entitled to at least the applicable minimum wage, whether they are full-time, part-time, casual, hourly, salaried, paid by commission, or paid by piece rate. Compliance is assessed on a pay-period basis.

The October 1 changes will also affect specialized rates. The student minimum wage will rise to $16.90 per hour, the homeworker rate to $19.70 per hour, and hunting, fishing and wilderness guide rates to $89.75 per day for less than five consecutive hours and $179.50 per day for five or more hours. Organizations should update payroll systems, funding applications, and employment templates before the new rates take effect.

After-Acquired Cause Defeats Long-Service Employee’s Wrongful Dismissal Claim, says ONSC

Employee privacy breaches can undo an otherwise generous termination package where employee misconduct strikes at the core of the employment relationship. In Birnbaum v. Dr. Chan, released April 15, 2026, the Ontario Superior Court of Justice dismissed claims for wrongful dismissal and human rights damages of a 70-year-old medical secretary with approximately 19 years of service. The Court found that the defendant had just cause for dismissal based on after-acquired evidence of serious privacy and confidentiality breaches. For charities and not-for-profits, the decision provides an example of how long service, age, and health-related accommodation issues do not necessarily prevent an employer from relying on serious pre-termination misconduct of an employee discovered after dismissal, particularly where the employee’s role involves confidential records, vulnerable clients, patients, donors, members, or service users.

After-acquired just cause refers to serious employee misconduct that occurred before dismissal but was discovered by the employer only after the dismissal. If the misconduct is sufficiently serious, the employer may rely on it to defend a wrongful dismissal claim, even if the employee was originally terminated without cause.

The plaintiff, Elka Birnbaum (the “Employee”), had worked for Dr. Victoria Chan and Dr. Victoria Chan Medicine Professional Corporation (the “Employer”), operating a small medical clinic, since 2001, first full-time and later part-time after her position was reduced in 2016. In 2019, the Employee had double bypass surgery following a heart attack and later returned to work gradually. When the COVID-19 pandemic began in March 2020, the Employer moved to virtual and telephone appointments, adopted health and safety measures, and arranged for the Employee to work separately from other staff. The Employee then advised that, because of her age and health concerns, she did not feel safe attending the clinic and requested to work from home. The Employer provided a two-week paid leave and then terminated her employment without cause, offering 12 months’ salary continuation. When the Employee commenced litigation for wrongful dismissal, the Employer withdrew that offer and alleged after-acquired just cause based on the Employee’s misuse of the clinic’s electronic medical records system.

The Court considered whether the Employer breached the Human Rights Code by failing to accommodate the Employee’s disability-related request to work remotely, whether the termination was discriminatory or a reprisal contrary to the Occupational Health and Safety Act, whether the Employer acted in bad faith, and whether the Employer could rely on after-acquired cause. The Employee sought wrongful dismissal damages based on 24 months’ notice, general and human rights damages for injury to dignity, compensation for lost income, and “moral or punitive damages for the [Employer’s] breach of their duty of honesty and good faith in the performance of contractual and statutory duties owed to the [Employee],” seeking a total of $200,000 plus pre-judgment and post-judgment interest.

The Court accepted that employers must accommodate employee medical conditions to the point of undue hardship but emphasized that accommodation is contextual and does not require an employer to provide an employee’s “preferred form of accommodation.” The Court found that the Employer had taken reasonable steps in the circumstances of a small medical clinic at the outset of the COVID-19 pandemic, including isolating the Employee at work, providing protective measures, and granting paid leave. The Court accepted the Employer’s concerns about patient confidentiality, computer security, reduced workload, and the lack of an established remote-work system. It held that the Employee’s human rights claims had not been proven on a balance of probabilities.

The Court then found just cause for dismissal. The evidence showed that the Employee had improperly created patient charts for herself and her daughter in the clinic’s electronic medical records system, caused personal health information to be sent to the clinic by listing the Employer as a physician involved in her care, although Dr. Chan denied acting in that capacity, and accessed or modified records in the system without proper authorization. The Court accepted that the Employee had been warned in 2014 not to use the clinic’s electronic medical records system to access or receive personal health information for herself or family members, had received privacy and confidentiality training, and nevertheless continued the misconduct. Because confidentiality and proper use of the clinic’s database were fundamental to the employment relationship, the Court found the misconduct “sufficiently serious that it strikes at the heart of the employment relationship.” The action was therefore dismissed, with costs payable to the Employer.

For charities, not-for-profits, and employers generally, the case reinforces three practical points. First, accommodation must be serious and individualized, but it remains grounded in operational realities. Second, confidentiality obligations are not merely administrative rules; in many workplaces, they are core employment duties. Third, after-acquired cause remains an available defence where misconduct discovered later, but occurred before termination, is sufficiently serious to justify a dismissal for just cause.

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IP scams are on the rise and guidance from the Canadian Intellectual Property Office (CIPO), suggests that these scams are becoming more coordinated, more convincing, and more tailored to their targets. In response, CIPO has introduced the IP Scam Awareness Zone, a resource to help organizations recognize, avoid, and report fraudulent IP-related communications. The resource warns that scammers often rely on publicly available data to craft targeted solicitations.

The IP Scam Awareness Zone provides examples of misleading correspondence, explains common tactics used by scammers, and encourages organizations to verify any questionable communication before taking action. It is structured as a checklist and serves as a particularly valuable first point of reference for charities and NFPs.

Charities and NFPs have recently been targeted by scams involving unsolicited emails or letters claiming that their name or logo must be urgently protected through trademark registration to prevent a third party from registering it. These messages often appear to come from legal professionals and may contain fabricated details or misleading warnings of legal consequences.

Charities and NFPs should review the IP Scam Awareness Zone and incorporate it into internal processes and, most importantly, should contact trademark counsel to review any communication whose legitimacy remains unclear.

Ultimately, the growing occurrence of these schemes reflects a broader shift, and protecting intellectual property now includes defending against those who exploit the IP system itself. For Canadian charities and NFPs, this means integrating basic awareness of IP scams into governance and risk management practices to protect resources, maintain public trust, and remain focused on advancing their missions.

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