Recently, the Liberal Government has introduced BILL C-2: An Act respecting certain measures relating to the security of the border between Canada and the United States and respecting other related security measures.
Some, like the CCCC, have expressed concerns as to how this would affect Canadian charities. Specifically, I will focus on one aspect, which is to make it a criminal offence for a business or charity to accept $10,000 or more in cash.
The proposed wording is: [with my emphasis]
77.5 (1) Every person or entity that is engaged in a business, a profession or the solicitation of charitable financial donations from the public commits an offence if the person or entity accepts a cash payment, donation or deposit of $10,000 or more in a single transaction or in a prescribed series of related transactions that total $10,000 or more.
I don’t think many charities are receiving $10,000 cash amounts in single or related donations so perhaps the impact will be limited. That being said, I was thinking whether this really makes sense for a registered charity. I can imagine a circumstance when over $10,000 is provided in cash to a charity, and this would now be illegal. It would seem to me that an exception should be provided that as long as that transaction is reported to either FINTRAC or CRA, it should not be illegal, but that is just my view. If you are dealing with a donor who wants to give $10,000 or more, then you should probably suggest they deposit the funds at a bank and transfer over the money that way by cheque or wire transfer, etc.
However, keep in mind that Canada is in a precarious position at the moment with respect to FATF compliance and Canada needs to take some strong measures to increase oversight and transparency over non-profit and charitable organizations. I don’t think that this requirement alone is going to do that, but it is one piece in the puzzle.
Part 10 of Bill C-2 would amend the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, SC 2000, c 17.
Here is a summary of the changes with the most relevant part in bold:
Part 10 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to, among other things,
(a) increase the maximum administrative monetary penalties that may be imposed for certain violations and the maximum punishments that may be imposed for certain criminal offences under that Act;
(b) replace the existing optional compliance agreement regime with a new mandatory compliance agreement regime that, among other things,
(i) requires every person or entity that receives an administrative monetary penalty for a prescribed violation to enter into a compliance agreement with the Financial Transactions and Reports Analysis Centre of Canada (the Centre),
(ii) requires the Director of the Centre to make a compliance order if the person or entity refuses to enter into a compliance agreement or fails to comply with such an agreement, and
(iii) designates the contravention of a compliance order as a new violation under that Act;
(c) require persons or entities referred to in section 5 of that Act, other than those already required to register, to enroll with the Centre; and
(d) authorize the Centre to disclose certain information to the Commissioner of Canada Elections, subject to certain conditions.
It also makes consequential and related amendments to other Acts and the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations and includes transitional provisions.
Part 11 amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to prohibit certain entities from accepting cash deposits from third parties and certain persons or entities from accepting cash payments, donations or deposits of $10,000 or more. It also makes a related amendment to the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.
Part 12 amends the Office of the Superintendent of Financial Institutions Act to make the Director of the Financial Transactions and Reports Analysis Centre of Canada a member of the committee established under subsection 18(1) of that Act. It also amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to enable the Director to exchange information with the other members of that committee.
The actual amendments are:
136 The Act is amended by adding the following after section 77.4:
Offence — cash payments, donations or deposits of $10,000 or more
77.5 (1) Every person or entity that is engaged in a business, a profession or the solicitation of charitable financial donations from the public commits an offence if the person or entity accepts a cash payment, donation or deposit of $10,000 or more in a single transaction or in a prescribed series of related transactions that total $10,000 or more.
Foreign currency
(2) For the purposes of subsection (1), if a cash payment, donation or deposit is made in a foreign currency, the equivalent value in Canadian dollars of that payment, donation or deposit is calculated
(a) in accordance with the exchange rate published by the Bank of Canada for the date on which the payment, donation or deposit was accepted; or
(b) if no exchange rate is published by the Bank of Canada for that foreign currency, the exchange rate that the person or entity would use in the ordinary course of business at the time of the payment, donation or deposit.