Definition: Statutory Remittances1
Legally required payments to government (e.g., tax, EI, CPP).
What kinds of statutory remittances could my organization be required to pay? Statutory remittances could include tax deductions from staff salaries, employment insurance premiums, and Canada Pension Plan contributions.2 They may also include workers’ compensation, EHT (Employer’s Health Tax), and any other legally required payments to government.
Why is it important for the board to be assured that all statutory remittances have been paid? Failure to submit statutory remittances is one of the most frequent reasons for lawsuits against charities and nonprofits in Canada. Directors of nonprofit and charitable organizations who fail to submit all legally required payments to government can be held personally liable for these amounts plus the interest accrued.2 However, if a director can demonstrate that they took reasonable precautions to ensure that all statutory remittances were made, they may not be held liable.2 Applying this standard ensures that your organization will remain in good standing with government authorities and protects your board members from personal liability.
From "Accreditation Preparation Workbook Section B: Financial Accountability & Transparency," Katharine Zywert, Social Prosperity Wood Buffalo at the University of Waterloo, 2013.
- “Standards Program Definitions,” Imagine Canada, May 2011.
- “Chapter 3: Liability of Directors” in the “Primer for Directors of Not-for-profit Corporations: Rights, Duties and Practices,” Industry Canada, 2002.
- Directors and officers liability in the employment context (2010, Lang Michener LLP).
- Avoiding director's liability in troubled economic times (2009, Carters Professional Corporation)
Standards Reference Guide