BULLETIN |
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CCA Bulletin 33/07 Supreme Court Decision A Relief to Charities 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 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 organizations, 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 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.
Alain Pineau The CCA's mission is to contribute to the political debate
surrounding the Canadian cultural sector. Our Bulletins and Updates are a means of sharing
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