Tax ruling leaves N.L. counselling service unsure of charitable status
Federal Court decision could cost organization thousands of dollars
A recent court decision against a credit counselling service based in Saint John, New Brunswick, has the man who runs a similar operation in St. John's, Newfoundland and Labrador, worried about his future.
The story began three years ago when Credit Counselling Services of Atlantic Canada lost its charitable status. The federal government removed the charity designation with an explanation that was bound to be challenged: "The prevention of poverty was not a recognized charitable purpose."
Three years and two court dates later, on June 30, 2016 the Federal Court of Appeal upheld the original ruling. And raised questions about other credit counsellors who still claim charitable status.
Considered itself a public service
"The work we do in St. John's is charitable in nature," said Al Antle, executive director of Credit Counselling Services of Newfoundland and Labrador.
Like the operation in New Brunswick — which also happens to have an office in St. John's — Antle's mission is to help people with excess debt. About 1,000 clients come through his door every year. He says his organization has always considered itself a public service.
"We were established by the five churches in the latter part of 1982," he told the St. John's Morning Show. "Individuals and households who were experiencing financial difficulties were also experiencing other social problems."
Both the operation in New Brunswick and the operation in Newfoundland depend on donations from lending institutions for most of their income. Both offer clients financial advice and debt management services.
The president of Credit Counselling Services of Atlantic Canada says his office stopped issuing tax receipts to donors and has been operating as a non-profit since 2013.
A significant concern
The challenge for Antle is determining exactly how his office is different. Because he doesn't know exactly why one organization lost its charitable status and the other didn't. If the Canada Revenue Agency points a finger at the St. John's operation he's got a big problem.
"It's a significant concern," he said. "And certainly will absolutely have an impact on the work we do."
Like the New Brunswick organization, Credit Counselling Services of NL doesn't issue tax receipts to the banks that supply most of its income. But the charity designation brings sales tax rebates and property tax exemptions that amount to thousands of dollars.
So far Antle hasn't heard from the Canada Revenue Agency, and has no plan to go looking for trouble by making contact and asking questions.
"It's business as usual for us. We have not lost our charitable status as of now. We are confident we won't. We are hopeful we won't. And forward we go."