Monday, December 28, 2015

Are condominium corporations exempt from the payment of tax in respect of income received?

Section 149 of the Income Tax Act [Canada] (the "ITA") is the section which condominium corporations must look to determine whether their conduct attracts the requirement to pay tax.  This section covers exemptions from taxation for non-profit organizations.  In general terms non-profit organizations are those operated for social welfare, civic improvement, pleasure or recreation or for any purpose other than profit. The Canada Revenue Agency ("CRA") has indicated generally that condominium corporations are exempt from taxation not because they are condominium corporations but because they meet the test provided by section 149 of the ITA.  Interpretation bulletin IT 496R explicates this test in respect to non-profit associations.

CRA has indicated there are two possible perspectives that may be taken with respect to income received by a condominium corporation from the leasing of a cell phone tower.  The income is either received by the condominium corporation on behalf of the individual owners and as such it flows through to the individual owners and should be claimed as income by each owner.  In contrast and based on provincial legislation CRA has indicated that usage of income from a cell phone tower to reduce the amount of condominium contributions payable by owners may lead to the nonprofit status of the common corporations being lost. My review of the Condominium Property Act (Alberta) does not reveal any limitation which prohibits condominium corporations from attributing the income received from a cell phone tower to owners and paying this out to owners. The Condominium Property Act (Alberta) also does not restrict condominium corporations from simply crediting the income to each of the owners.  

Condominium corporations must hope that CRA does not insist that the income from cell phone towers be paid to owners otherwise CRA may conclude that the nonprofit status of condominiums is lost.  Condominium corporations will also have to be mindful of section 149 of the ITA when considering whether to install solar panels or photovoltaic panels with the intention of producing electricity and selling it to the utility system. Such action would also be considered to be a profitable activity not unlike cell phone towers and also could lead to the CRA taking the position tax should be paid by condominium corporations on income received from cellphone towers and from solar panels.

Wednesday, December 23, 2015

When an ethic minority becomes the ethnic majority; a Vancouver Board speaks Mandarin and refuses to speak English

The Calgary Herald reported that a very curious thing happened the other day in Vancouver, British Columbia. A gentleperson named Andreas Kargut made a complaint to the Human Rights Tribunal in British Columbia because he claimed he was being discriminated against by the Board of Directors of the  condominium corporation in which he owned a unit.

The Board of Directors of the condominium corporation was composed of individuals who spoke Mandarin. The Board made a decision that it would be in their best interests that the board meetings be conducted entirely in Mandarin.  Mr. Kargut  took issue with us and asked the Board to speak English; to which request the board refused.  As a result of the refusal of the Board of Directotrs, Mr. Kargut approached the Human Rights Tribunal and made a complaint against the Board of Directors.

It is ironic that a white English-speaking individual would approach the Human Rights Tribunal  suggesting that he was discriminated against.  However based on the multi-cultural (or perhaps better stated ethnic-cultural) mosaic which has been built in Canada it is not surprising to see ethnic minorities becoming ethnic majorities (at least contextually) and now the proverbial “shoe is being worn on the other foot”.  It will be interesting to see how this matter is resolved by the Human Rights Tribunal.

It continues to be my understanding of the law in Alberta that the Human Rights Tribunal of Alberta does not have jurisdiction to deal with complaints in respect of condominium corporations in Alberta. However this may change given the rapidly changing political environment that we are experiencing these days.

Tuesday, June 23, 2015

Ontario's Bill 106; a portent of Alberta under the Amendments to the Condominium Property Act (Alberta)

The Lawyer's Weekly has recently commented on the changes which might occur in Ontario as a result of amendments to Ontario's Condominium Property Act (this is worthy of a quick read): 

I have been holding off commenting on the impact of Alberta's Bill 9 which upon Proclamation will amends the Alberta Condominium Property Act.  Given that we have a new government condominium lawyers are unsure when and if Bill 9 will be proclaimed.