Physician-Assisted Death – Bill C-14

On April 14, 2016, the government introduced Bill C-14 that would legalize medical assistance in dying if it comes into force.

To understand the implications of the language in Bill C-14, a bit of history is in order. In February 2015, the Supreme Court of Canada held that a blanket ban on assisted death was unconstitutional, and ordered Parliament to draft right-to-die legislation that respects the Charter. The Supreme Court of Canada in Carter v. Canada (Attorney General) specifically held that the test for qualifying for medically assisted death in Canada should be: competent adult persons that (1) clearly consent to the termination of life, and (2) have a grievous and irremediable medical condition that causes enduring and intolerable suffering to the individual in the circumstances of his or her condition.

Bill C-14 does not go that far. The key is found in the proposed s. 241.2(2)(d), where the eligibility criterion of having a “grievous and irremediable medical condition” is defined.

Grievous and irremediable medical condition

(2) A person has a grievous and irremediable medical condition if

(a) they have a serious and incurable illness, disease or disability;

(b) they are in an advanced state of irreversible decline in capability;

(c) that illness, disease or disability or that state of decline causes them enduring physical or psychological suffering that is intolerable to them and that cannot be relieved under conditions that they consider acceptable; and

(d) their natural death has become reasonably foreseeable, taking into account all of their medical circumstances, without a prognosis necessarily having been made as to the specific length of time that they have remaining.

(emphasis added)

The condition that the person’s natural death be reasonably foreseeable can be interpreted to mean that a person wishing to qualify for medical assistance in dying must be in the terminal stages of illness. This requires more than the Supreme Court of Canada’s ruling that the test for qualifying should simply be those who have a grievous and irremediable medical condition that causes enduring and intolerable suffering to the individual in the circumstances of his or her condition.

While controversy stirs from all sides as the new Bill C-14 is hotly debated in the press, the government now has about five weeks to debate, study and pass the bill before the Supreme Court’s June 6 deadline. The justice committee will likely have time to study and propose amendments before the deadline. It remains to be seen, however, whether any amendments will be proposed, or whether Bill C-14 will even be passed. Updates on this matter will follow.

Thank you to Kevin Tjia for assisting with this blog post.

Budget 2016: Impact on Charities

Finance Minister Bill Morneau delivered the government’s 2016 federal budget yesterday. Below is a summary of some of the announcements from the budget that will impact charities.

Update on Previous Budget Proposal: Capital Gains Exemption for Donations of Real Estate and Private Company shares

The 2015 federal budget proposed to extend the exemption for capital gains tax to situations where the proceeds from the sale of private company shares or real estate are donated to charity, as discussed in this previous post. In yesterday’s budget, the government announced that it does not intend to proceed with these changes. This is unfortunate news for the charitable sector, as it was hoped that this change would help boost charitable donations.

Update on Previous Budget Proposal: Investment in Limited Partnerships

The 2015 federal budget proposed an amendment to the Income Tax Act that would allow registered charities to invest in limited partnerships where certain requirements are met, including that the charity holds 20% or less of an interest in the limited partnership and the charity deals at arm’s length with the general partner of the limited partnership. The federal government confirmed that they still intend to move forward with these changes.

GST/HST Rules that Apply to Charitable Donations

Prior to budget day, where a charity supplied property or services to a donor in exchange for a donation, GST/HST applied to the full value of the donation, even though an income tax receipt was issued for a portion of the donation only (being the amount paid by the donor less the value of any property or services received by the donor). The Budget proposes to bring the treatment of this type of exchange in line with the split-receipting rules under the Income Tax Act. The budget proposes that where a donation is made to a charity and the donor receives a split receipt, the donor will only be subject to GST/HST on the value of the property or services supplied by the charity to the donor, not the entire amount of the donation. For example, if you purchase a ticket to an event hosted by a charity for $250 and the value of the meal provided is $75, the charity will now be required to charge you GST/HST on the $75 meal portion (assuming it is not otherwise exempt from GST/HST), and not on the $175 donation portion.

Political Activities

The government announced that the Canada Revenue Agency, in consultation with the Department of Finance, will engage with charities through discussions with stakeholder groups and an online consultation to clarify the rules governing the political activities of charities. It remains to be seen whether this process will result in any changes to the rules around charities engaging in political activities.

Did the 2016 BC Budget put “bare trust” planning in jeopardy?

Many estate plans involve a “bare trust.”  This document allows one person to hold the legal title of a property in trust for another person who is the true beneficial owner.  The bare trust can be used to transfer ownership without triggering BC’s Property Transfer Tax, which only applies when there is a registered change of legal title.

The recent 2016 BC Budget describes government plans to require “…transferees acting as bare trustees to declare information in relation to settlors and beneficiaries of a trust.“ Depending upon how this requirement is implemented, it will not directly interfere with bare trusts.  However, is it  a signal of future plans to apply PTT to beneficial transfers?

Bare trusts will continue to be important, but particular care is required given this new disclosure requirement. And, if future tax changes are planned, hopefully the government will also consider long-standing requests to fix sections of the PTT that inappropriately interfere with estate planning (for example, by confirming that PTT should not apply when a person transfers a principle residence into his own name as trustee).