Could This Be Controversial?
Background
Human Life International in Canada Inc. (HLIC) was registered
as a charitable organization in 1984. Several years later, its
registration was revoked on the grounds that it was not devoting
substantially all of its resources to charitable activity.
What This Case Is About
The evidence was that HLIC had sent a postcard to all members
of Parliament depicting an aborted fetus and organized a march
for life on Parliament Hill .
After conducting an audit, Revenue Canada advised HLIC that its
activities could not be justified under either of the relavant
recognized categories of charity: the advancement of education,
or "other purposes beneficial to the community". It
was the Department's view that
" an organization such as HLIC which espouses a specific
cause and seeks to sway the public to its way of thinking, would
not qualify as charitable under the category of advancing education."
In a letter to HLIC, the Department observed that the courts
had found that purposes related to promoting one side of a controversial
issue are not charitable at law. Moreover, it was the Department's
position that the courts had established that activities designed
essentially to sway public opinion on a controversial social
issue are not charitable, but are political in the context of
the law of charities.
While recognizing that a charity might carry on ancillary political
activities using a limited amount of resources, the Department
also stated that purposes and activities that are directed at
legislative or public policy change are considered political,
not charitable.The Federal Court of Appeal agreed.
The State of the Law: Education,
Politics, and Charity
The Federal Court of Appeal heard the case in February 1998.
Its mid-March decision held in clear terms that to be for the
advancement of education, activity must be directed toward the
formal training of the mind or the improvement of a useful branch
of human knowledge. In the case of HLIC, the distribution of
literature and the holding of conferences was not carried out
in any structured way so as to amount to formal training. Moreover,
in the Court's view the literature was predominantly of a polemical
character that one would not normally associate with the formal
training of the mind: "The impression one gets from the
material is that it is primarily concerned with the dissemination
of a set of opinions on various social issues and the appellant
has not convincingly demonstrated anything to the contrary. I
believe that the jurisprudence generally supports the proposition
that activities primarily designed to sway public opinion on
social issues are not charitable activities."
The Court noted that the accepted description of political purposes,
based on English law precedent, were purposes which described
an intention
(i) to further the interests of a particular political party;
or
(ii) to procure changes in the laws of this country; or
(iii) to procure changes in the laws of a foreign country; or
(iv) to procure a reversal of government policy or of particular
decisions of governmental authorities in this country; or
(v) to procure a reversal of government policy or of particular
decisions of governmental authorities in a foreign country.
The traditional rationale for a limitation on considering these
kinds of purposes charitable is that the court can't judge whether
a proposed change in the law will be for the public benefit.
As a result, it had been the view that a court cannot say that
the purpose is a charitable one. But in this case, the Court
went further and concluded that advocacy of opinions on various
important social issues can never be determined by a court to
be for a purpose beneficial to the community.
"Courts should not be called upon to make such decisions
as it involves granting or denying legitimacy to what are essentially
political views: namely what are the proper forms of conduct,
though not mandated by present law, to be urged on other members
of the community?"
Why This Case is Important
HLIC has indicated it intends to try to appeal to the Supreme
Court of Canada. Whether an appeal will be granted is not known.
But until a different view is expressed by the Supreme Court
or there is a statutory clarification by Parliament, the HLIC
case is the leading decision on what is permissible advocacy
for charities. Two points can be made:
1. The Federal Court of Appeal has changed the limitation on
the range of purposes that have been considered political from
English law precedents. In addition to the earlier restraint,
the law in Canada is now that activities primarily designed to
sway public opinion on social issues are not charitable activities.
2. Aside from the question of whether or not the degree of limitation
the Court has found is a good thing, the Court did not develop
any clear guidelines as to what constitutes swaying public opinion
nor what is a social issue. As a result, Revenue Canada is now
put to the extremely difficult task of trying to give practical
meaning to the Court's ruling. And for many charities, a pall
has been cast over much of their activity without any clear direction
as to whether what they do is permitted.
In a comment similar to others which the Federal Court of Appeal
has made in recent charity cases, the judgement in HLIC observes
that the law of charity is an area crying out for clarification
through Canadian legislation for the guidance of taxpayers, administrators,
and the courts. It can only be hoped that members of parliament
find the time to respond. Whether the message will be heard is
uncertain. How will it be taken forward? At least for charities,
it seems that their asking for help might well be too controversial.
Laird Hunter is a lawyer with the firm Worton & Hunter
in Edmonton, Alberta
