Issues and updates regarding Relief Lending Group and Mission Life Financial
For the most part RLG and MLF are similar in design and timeframes, basically 2008 to 2013. These programs were promoted as a compliant manner of 'borrowing-to-donate' and were purported to 1) leverage one's ability to donate more than otherwise possible 2) save lives in 3rd world countries and 3) beat the CRA minimum standard to comply with the Income Tax Act of Canada.
Did it work or will it? This page discusses the issues and frequently asked questions that come up.
February 24, 2017
As reported in past years, Canada Revenue Agency will not approve ANY of the gifting arrangements and, as expected, RLG and MLF are now on the hot seat of reassessment and soon-to-be collections.
Profitable Giving Canada (PGC) represents itself to be a membership-based industry regulator that educates and assists participants of gifting arrangements. As reported on the www.profitablegiving.ca website there are serious issues for RLG/MLF/COIP/PGI participants.
To summarize the main ones:
1) You have a very real debt... borrowed a 'credit certificate' that was used to purchase Aids medications from a Vendor, and subsequently the drugs were donated for use in saving lives in 3rd world countries, generating you a healthy tax credit. The cash that you paid originally was 4 years of pre-paid interest on an 8 year loan. The options to pay the loan back are 1) in cash or 2) supply the vendor with equivalent pharmaceuticals which were supposed to have been purchased with the remaining interest in the 4th year (international generics were supposed to cost a few cents on the debt dollar). Failing that, you owed more cash interest beyond the 4th year and ultimately would have to pay at the end of 8 years. Nothing is happening through the promotors and you are in a potential nightmare scenario that RLG/MLF could collect on the full debt in cash if you are now in default due to owing interest, or at the end of the 8 years.
***PGC claims the ONLY CRA-compliant manner of settling the debt with pharmaceuticals is through an operation called Justice Trading. Further, they claim that all other current settlement options are non-compliant including Integrated Receivables Management who is an authorised settlement agency that the promotors actually set up. According to PGC this will result in taxpayers losing their tax credits and will open the door for the promotors to come back and collect the entire debt, in cash***
2) The promotors of the arrangements have all but disappeared except to demand further cash interest on and repayment of the loan. It is expected they WILL NOT be taking a group-representing test case forward to the Tax Court of Canada. That leaves us all sitting ducks that CRA will not have a problem picking off because it will be too expensive and ineffectual to independently appeal.
***PGC has launched a class defence in Tax Court. They have a well respected lawyer and confidence that the program will win the day. To become a participant, one must 1) apply for the action 2) become a paying member of PGC, about $500 and 3) settle their debt through Justice Trading. The debt settlement option currently costs 13.5% of the debt. PGC claims that even after all costs are calculated, the participants still have the possibility of maintaining about a 70% net tax gain position ***