CLA may need to be dissolved
Lawyer advises that new organization needs to be created to regain athletic charitable status for Canada’s national lacrosse teams
The Canadian Lacrosse Association may have to be dissolved and a new organization created to regain its Registered Canadian Amateur Athletic Association (RCAAA) status, says a lawyer who specializes in non-for-profit organizations.
The lawyer also says ongoing civil and tax court cases involving EquiGenesis have no bearing on the CLA’s past or future RCAAA status. That supports the newly formed National Lacrosse Team Players Association (NLTPA) opinion the CLA shouldn’t delay applying to regain RCAAA status. The Canada Revenue Agency revoked the CLA’s status in 2010 for participation in a $60.7 million gifting program the CRA deemed an “abusive tax shelter.”
CLA president Joey Harris told The Examiner last month it was awaiting the outcome of ongoing litigation involving EquiGenesis, the investment firm operating the gifting program, before trying to regain its status. Harris said the CLA and EquiGenesis hoped to be vindicated in court.
The NLTPA sought an independent legal opinion on what impact a court decision might have on the CLA’s RCAAA status.
Alexandra Tzannidakis, of Ottawabased Drache Aptowitzer LLP, stated in her reply to the NLTPA the CRA decision is irreversible.
“It is our professional opinion that there is no legal mechanism by which this could happen,” stated Tzannidakis. “Once the notice revoking the CLA’s registration was published in the Canada Gazette on June 5, 2010, the decision became irrevocably final. It is thus irrelevant what arguments, if any, developments in the EquiGenesis matter may be said to provide against the precise bases of the revocation, at least in terms of ‘reversing ’ the 2010 revocation.”
A CRA directive in 2012 stated any board members present at the time of revocation must be removed for RCAAA status to be regained. That’s why national team management and players asked for Harris and board member Sohen Gill to resign.
Without RCAAA status, the CLA is unable to issue charitable tax receipts which national team managers say hampers their ability to raise funds and secure sponsors for their teams. The CLA funds national teams to a maximum $100,000 annually but national team chairman Dean French says the annual budget ranges from $200,000 to $250,000. Players often pay to make up budget shortfalls.
Tzannidakis states the CLA may have to go even further to regain its status.
“The CRA may take into account the organization’s previous involvement with EquiGenesis and any developments in its treatment of the EquiGenesis programs,” she states.
“It would likely significantly reduce the chances of this previous involvement affecting the registration process if, instead of the CLA re-applying, a new non-profit organization were incorporated to act as the national lacrosse governing body and were to apply for registration as an RCAAA in its own right. The benefits of this option would likely be further increased if the new corporation were not supervised or managed in any capacity by any of the individuals involved in supervising or managing the CLA in any capacity at the time of its revocation.”
The CLA board will meet Friday through Sunday during its annual general meeting in Winnipeg. It has stated it will announce its plans for national teams following those meetings. Until then, Harris said, he has no comment.
French has expressed concern the national team management group, also including Dave Huntley, Gary Gait and John Mouradian, are being frozen out by the CLA board. He said earlier this week they don’t understand how the CLA can develop a “comprehensive plan” for national teams without input from the men who manage the national teams.
All these developments have raised concerns of national team alumni like Mike French, no relation to Dean, who are joining forces with the NLTPA. Mike French, MVP of Canada’s first gold medal at the 1978 world field lacrosse championships, said alumni are “appalled” at the conduct of the CLA board.
“I was surprised at the amount these guys and girls have to raise to be able to participate on behalf of their country,” said Mike French, a co-owner of the NLL’s New England Black Wolves. “I was even more astounded when I found out the CLA has lost its non-profit status .... What struck me even more disturbingly is these players were under-insured. It blew me away.”
He is also concerned the CLA has not invited the management group to participate in meetings concerning national teams. He said national team players and coaches are indebted to Huntley, Gait, Mouradian and Dean French. He says if the CLA decides to get rid of them for taking a stand, it may be at their own peril.
“Who is going to replace them?” Mike French said. “Anybody who I know who would be qualified would stand aside.”
He believes the players would boycott such an action.
“They have the same level of appreciation as I do for all the efforts of Hunts, Gaiter, Johnny and certainly Dean.”
He says these are unnecessary distractions as the men’s team prepares for the 2018 world championships in Israel. He blames it on the CLA’s lack of response to concerns from national team players and management.
“I don’t want them to play if they’re not covered,” said Mike French. “As much as I love the success, the players, a lot of them I know personally, and the legacy of Team Canada, they can’t play if they’re not covered and not taken care of.”