Vancouver Society of Immigrant
&
Visible Minority Women
On January 28, 1999 - nearly a year after it heard the case -
the Supreme Court of Canada released its decision in Vancouver
Society of Immigrant & Visible Minority Women. It is
a judgment which confirms the old adage: you can lose the battle
and win the war. In a four to three decision, the Court confirmed
Revenue Canada's refusal to register the Society as a charitable
organization. But in the first decision about charities from
the Court in more than 30 years, the majority opinion broadened
the definition of education, confirmed that the primary consideration
is purposes, not activities (a distinction that seems to bedevil
any review of what is charitable), and strongly endorsed the
widely prevailing view that the whole area is badly in need of
legislative overhaul.
The New Meaning of Education
The law of charities is both complex and uncertain. This is first
encountered when trying to determine the type of charity under
review. The court has broadened the scope of education for charitable
purposes. In the past, only traditional forms of education, involving
"training of the mind" (usually in the classroom setting)
have been regarded as charitable. With this judgment, the court
recognizes that the nature of education has changed and should
include a broader range of experiences and activities.
The court said that education for charitable purposes now includes
"information or training [which] is provided in a structured
manner... to advance the knowledge or abilities of the recipients".
This new definition still excludes "promoting a particular
point of view or political orientation. But the court does recognize
that in appropriate circumstances, an informal workshop or seminar
on a certain practical topic or skill can be just as informative
and educational as a course of classroom instruction in a traditional
academic subject." The very important words of the case
are that "[t]he law ought to accommodate any legitimate
form of education."
Purpose and Activities
The court also found that in determining whether an organization
is a charity, the inquiry must focus not only on the activities
of an organization but also on its purposes. And in an important
confirmation, the Court found that even pursuing a purpose which
is not itself charitable may not disqualify an organization from
being considered charitable if the purpose is pursued only as
a means to fulfill another, charitable purpose and not as an
end in itself. For example, without examining that the purpose
of the organization is providing food to the needy, the isolated
activity of spending money to buy food is not itself charitable.
This is an important distinction which is often forgotten (though
made by the court the last time it heard a charities case). Organizations
making application often find that they are quizzed on their
activities by Revenue Canada without any seeming sense of what
they are trying to do. Whether this reminder from the court will
be heeded, only time will tell.
The Need For Legislation
Perhaps the most striking aspect of the case is the repeated
call by both the majority and minority for clarification by legislation.
A flavour of that concern comes through in this passage from
the decision:
"Although the Pemsel approach has been applied countless
times by Canadian courts, both prior and subsequent to Guarantee
Trust, its application to the myriad of modern organizations
vying to be identified as charitable has often proved a daunting
task. There have been repeated calls for the expansion or replacement
of the test to reflect more completely the standards and values
of modern Canadian society. As Strayer J.A. recently observed
in Human Life International in Canada Inc. v. M.N.R.,
[1998] 3 F.C. 202 (C.A.), at p. 214, the definition of charity
"remains ... an area crying out for clarification through
Canadian legislation for the guidance of taxpayers, administrators,
and the courts".
A similar plea is made numerous other times in the judgment.
On February 8, 1999 the report entitled Building on Strengths:
on Improving Governments and Accountability in Canada's Voluntary
Sector was released by the panel established by the Voluntary
Sector Roundtable, a coalition of dozens of the country's biggest
charitable and volunteer organizations. The report called on
Ottawa to amend the Income Tax Act which applies to Canada's
charities, as well as create a non-profit corporation bill to
bring order to the operations of other non-profit groups. Perhaps
the most important recommendation is the call for the creation
of a Voluntary Sector Commission. This would create an independent
organization modeled on the Charities Commission which exists
in England and Wales. The commission would monitor the application
of the definition of charity to modern circumstances and make
recommendations for registration of groups.
Vancouver Society of Immigrant & Visible Minority Women
is an extremely important case, both for what it says and what
it doesn't say. The Voluntary Sector Roundtable panel picks up
on the call for renewal of the rules governing the voluntary
sector through improved legislation. Industry Canada has already
taken up the call to amend the Canada Corporations Act, dealing
with non-profit organizations. And moves are afoot in the upper
reaches of the federal government to examine the regulatory framework
for charities and non-profits. One can only hope that where there's
this much heat, some useful light will be shed.
Laird Hunter is a lawyer with the firm of Worton Hunter Callaghan
in Edmonton, Alberta.
