Supreme Court Decision A Relief to Charities

CCA Bul­letin 33/07

Octo­ber 10, 2007

 

 

Just the Facts

On Fri­day Octo­ber 5, 2007, the Supreme Court of Canada released its deci­sion on the case of the Ama­teur Youth Soc­cer Asso­ci­a­tion. The case revolved around the quest by this Ontario based orga­ni­za­tion to be rec­og­nized as a charity.

The Rev­enue Canada Agency had rejected the appli­ca­tion for char­i­ta­ble sta­tus on the basis that sports were not a char­ity. The Asso­ci­a­tion appealed to the Fed­eral Court of Appeals cit­ing the pro­vi­sions within the Income Tax Act for Reg­is­tered Cana­dian Ama­teur Ath­letic Asso­ci­a­tions (RCAAA) as a rebut­tal to the posi­tion that sports were not a char­i­ta­ble activity.

The Fed­eral Court heard the case an upheld the posi­tion of the Rev­enue Canada Agency. But it also went some­what far­ther when it con­tended that the cre­ation of the RCAAA pro­vi­sions within the Income Tax Act meant that Par­lia­ment intended to restrict char­i­ta­ble sta­tus to these national orga­ni­za­tion, thus pre­clud­ing char­i­ta­ble sta­tus for local and provin­cial sport­ing organizations.

The Fed­eral Court rul­ing cre­ated some under­stand­able anx­i­ety within the arts sec­tor due to sim­i­lar pro­vi­sions within the Income Tax Act for national arts ser­vice orga­ni­za­tions. With the sup­port of the Mut­tart Foun­da­tion, the Fed­eral Court’s deci­sion was appealed by Imag­ine Canada, the umbrella orga­ni­za­tion for thou­sands of non profit and char­i­ties, with the Cana­dian Con­fer­ence of the Arts a rec­og­nized party to the appeal since, if the Supreme Court upheld the Fed­eral Court posi­tion, the char­i­ta­ble sta­tus for hun­dreds of arts orga­ni­za­tions could indeed have been in jeopardy.

While the Supreme Court did not reverse the deci­sion of the Fed­eral Court of Appeal deny­ing reg­is­tered char­i­ta­ble sta­tus to the Ama­teur Youth Soc­cer Asso­ci­a­tion, it rejected the inter­pre­ta­tion of the pro­vi­sions restrict­ing char­i­ta­ble sta­tus to only those orga­ni­za­tions that sat­isfy the cri­te­ria within the Income Tax Act for Reg­is­tered Cana­dian Ama­teur Ath­letic Associations.

This deci­sion by the Supreme Court there­fore removes the threat of a more restric­tive inter­pre­ta­tion of char­i­ta­ble sta­tus for local and provin­cial arts orga­ni­za­tions. It is a wel­come rul­ing by Canada’s high­est court.

Tell Me More

Supreme Court deci­sions are sup­ported by exten­sive research and analy­sis not only of leg­is­la­tion but also case law and an attempt to under­stand the intent of Par­lia­ment in enact­ing pro­vi­sions within any piece of legislation.

In this deci­sion, the Supreme Court goes to the very roots of char­i­ta­ble sta­tus in quot­ing from the Char­i­ta­ble Uses Act of 1601 (Eliz­a­beth I). A mod­ern Eng­lish ren­di­tion is pro­vided in the deci­sion list­ing var­i­ous activ­i­ties deemed to be charitable,

“ ….relief of aged, impo­tent, and poor peo­ple; the main­te­nance of sick and maimed sol­diers and sailors, schools of learn­ing, free schools, and schol­ars in uni­ver­si­ties, repair of bridges, ports, havens., cause­ways, churches, sea banks and high­ways, the edu­ca­tion and prefer­ment of orphans, the relief, stock or main­te­nance of houses of cor­rec­tion, mar­riages of poor maid­ens, sup­por­t­a­tion, aid, and help of young trades­men, hand­i­crafts­men, and per­sons decayed, the relief or redemp­tion of pris­on­ers or cap­tives and the aid and ease of any poor inhab­i­tants con­cern­ing the pay­ments of fif­teens, set­ting out sol­diers and other taxes.”

The deci­sion reviews prece­dents in other coun­tries oper­at­ing under com­mon law that draws its char­i­ta­ble pro­vi­sions from the Char­i­ta­ble Uses Act of 1601, as well as other inno­va­tions that bring some cur­rency to the frame­work for deter­min­ing char­i­ta­ble purposes.

The deci­sion dis­misses both the appli­ca­tion for char­i­ta­ble sta­tus by the Ama­teur Youth Soc­cer Asso­ci­a­tion and the broader inter­pre­ta­tion of the Rev­enue Canada Agency of the restric­tive impact of the RCAAA pro­vi­sions within the Income Tax Act.

“12. It is clear from the word­ing of the def­i­n­i­tion of the RCAAA in s. 248(1) that Par­lia­ment intended the ben­e­fit of RCAAA sta­tus to be avail­able only to nation­wide asso­ci­a­tions, How­ever, I have dif­fi­culty accept­ing the government’s “occu­pied field” argu­ment based on excerpts from Hansard, While Hansard may offer rel­e­vant evi­dence in some cases, com­ment of MPs or even Min­is­ters may or may not reflect the par­lia­men­tary inten­tion to be deduced from the words used in the legislation. (…)

13. In any event, there is noth­ing in the pas­sages cited by the gov­ern­ment to indi­cate that the cre­ation of the RCAAA regime pre­cluded the reg­is­tra­tion of other sports asso­ci­a­tions as charities.”

Arts orga­ni­za­tions that have obtained char­i­ta­ble sta­tus will be relieved by the deci­sion and the solid analy­sis that sup­ports it evi­dent in the text of the ruling.

The text of the entire deci­sion can be found here.