Citation: 2013TCC314
Date: 20131015
Docket: 2013-1241(IT)I
BETWEEN:
NIGEL HALL,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
AMENDED REASONS FOR JUDGMENT
(Delivered orally from the bench on September 24,
2013, in Toronto, Ontario)
Pizzitelli J.
[1]
The Appellant appeals
the denial of a charitable tax credit pursuant to section 118.1(3) of
the Income Tax Act (“ITA”) in relation to his contribution of
$24,800 to an entity that was not a registered charity and hence not a
“qualified donee” in 2011 pursuant to section 149.1(1) of the ITA on the
grounds such denial is a violation of Section 15(1) of the Canadian Charter
of Rights and Freedoms (the “Charter”).
[2]
The facts are not in
dispute. In 2011 the Appellant donated the sum of $24,800 to the International
Association of Scientologists (“IAS”) which is involved in drug addiction
education and treatment, disaster relief and other commendable charitable-like
activities throughout the world; including the provision of transportation of
medical staff, supplies and food in aid of the Haiti earthquake disaster a few
years ago and a Drug-Free World program that works with government and
community groups amongst other partners to educate at-risk kids. There is no
dispute that IAS conducts what are normally considered charitable or
charitable-like activities but that IAS is not a registered Charity in Canada nor apparently even applied to be.
[3]
The Appellant takes the
position that his choice to support the organization IAS which he considers his
preferred charitable organization unfairly denies him the right to a charitable
tax credit while other Canadians have access to such tax credit if they choose
to donate to registered charities; hence the provisions of the ITA requiring
that the charity be a “qualified donee” or more simply put, a registered
charity under section 149.1, is discriminatory and a violation of the above
Charter provision
[4]
The Respondent takes
the position that there is no charter violation for two main reasons; namely
that there is no law that grants every contribution made to a charitable
organization a tax credit and hence no-one has been directly or by effect
excluded from the benefit of any such law; and in the alternative that the Appellant
has not demonstrated that the government made a distinction based on any
enumerated grounds set out in s. 15(1) of the Charter or any analogous
grounds.
[5]
Section 15(1) of the Charter
reads as follows:
Every
individual is equal before and under the law and has the right to the equal
protection and equal benefit of the law without discrimination and, in
particular, without discrimination based on race, national or ethnic origin,
colour, religion, sex, age or mental or physical disability.
[6]
Subsection 118.1(3)
allows an individual to claim a tax credit based on a formula that applies to
the individual’s “total gifts” for the year. The individual’s “total gifts” for
a year are defined in s. 118.1(1) as generally a percentage of the individual’s
“total charitable gifts” which are in turn defined in the same subsection as
the total of all amounts each of which is the fair market value of a gift made
by the individual in the year, or in any of the preceding 5 years not earlier
deducted, made to, inter alia, (a) a registered charity. A “registered
charity” is in turn defined in subsection 248(1) to include a charitable
organization, within the meanings assigned by subsection 149.1(1), resident in
Canada that has applied to the Minister in prescribed form for registration and
that is at the time so registered. There is no dispute as to the
interpretations of these provisions per se. As indicated, the Appellant
takes the position he should be entitled to the tax credit for contributions to
a charitable organization that is not a registered charity because it has not
applied for nor obtained registration as a registered charity under the ITA.
[7]
In my view, the
provision of a tax credit for contributions to a non –registered charity is not
a benefit provided by subsection 118.1 of the ITA, hence subsection
15(1) of the Charter cannot be infringed. As set out in Ali v Canada
2008 FCA 190, the Federal Court of Appeal, relying on the Supreme Court of
Canada decision in Auton (Guardian ad litem of) v British Columbia (Attorney
General), held that: “the Charter will not be infringed where the
benefit sought is not one that is provided by the law that is being challenged.
…” How can it be discriminatory to deny the appellants a benefit that no one
gets?”
[8]
AAlthough the Ali
case dealt with the non deductibility of off the shelf pharmaceuticals, the
principle in my view is the same. The Appellant has not demonstrated that the
particular provisions allowing tax credits for donations to registered
charities directly discriminates against any particular charity, let alone IAS.
Moreover, there is no discrimination by effect where, as Ryer J.A. stated in Ali
in par 16: “the non-inclusion of a particular benefit is consistent with the
purpose and scheme of the impugned legislation”. Here, as the Respondent has
pointed out, the scheme dealing with charitable tax credits has as its purpose
to only provide tax credits, effectively subsidized by the Canadian taxpayer,
to specific registered charities. As the Respondent has pointed out in Vancouver Society of Immigrant and Visible Minority Women v MNR [1999] I
SCR 10, the Supreme Court of Canada has already dealt with the scheme of the Act
dealing with charitable donations and in par 2 stated:
Given
the central role that charities plan in our society, the large sums of money
devoted to charitable purposes, and the considerable privileges that attach to
charitable status Parliament has considered it essential to provide a legal
framework to regulate charities and their activities. That legal framework,
which aims to ensure charities use the funds provided to them for charitable
purposes in a efficient manner, is of ancient origin. The constantly evolving
common law definition of charity has been incorporated into federal income tax
legislation since charities were accorded special status under the Income War
Tax Act, 1917.S.C.1917, c 28, s.5(d).
[9]
The scheme allows any
charitable organization to apply for registration if the requirements of the ITA
are met by it as part of the legislative scheme to vet and reasonably monitor
those organizations that effectively ask the Canadian public to partially fund
their activities through the charitable tax credit provisions. No specific
group is barred from applying and the decision to do so rests with the
organization itself. If an organization chooses not to avail itself of such
registration or fails to meet the requirements for registration, it does not
mean there is discrimination when registration is not a matter of right for
everyone. Moreover, if a taxpayer chooses to contribute to an organization that
is not a registered charity rather than a registered charity, his personal
choice does not mean he was denied the benefit of a law that only grants tax
advantages for contributions made to registered charities. As the Supreme Court
of Canada stated in par. 14 of Auton;
“..a
legislative choice not to accord a particular benefit absent demonstration of
discriminatory purpose, policy or effect does not offend the principle and does
not give rise to a s. 15(1) review. This Court had repeatedly held that the
legislature is under no obligation to create a particular benefit. It is free
to target the social programs it wishes to fund as a matter of public policy
provided the benefit itself is not conferred in a discriminatory matter.”
[10]
In summary, I conclude
that the benefit claimed by the Appellant cannot be viewed as a benefit
provided by law and so does not fall into the Subsection 15(1) of the Charter
scope; thus it is not necessary for me to further the inquiry as to whether the
government made a distinction based on an enumerated ground thereunder or
ground that is analogous to any of those enumerated grounds, although it is
clear that the Appellant’s argument that his freedom of choice to choose which
charity to contribute to is discriminated against would hardly permit me to
find he has been denied equal benefit of the law without discrimination based
on race, national or ethnic origin, colour, religion, sex, age or mental or
physical disability, nor any like grounds based on any of the Appellant’s
characteristics that are immutable.
[11]
Accordingly, the appeal
is dismissed.
These Reasons for Judgment are issued in substitution
for the
Reasons for Judgment dated October 2, 2013
Signed at Ottawa, Canada, this 15th
day of October 2013.
“F.J. Pizzitelli”
CITATION: 2013TCC314
COURT FILE NO.: 2013-1241(IT)I
STYLE OF CAUSE: NIGEL HALL AND
HER
MAJESTY THE QUEEN
PLACE OF HEARING: Toronto, Ontario
DATE OF HEARING: September 25, 2013
REASONS FOR JUDGMENT BY: The
Honourable Justice F.J. Pizzitelli
DATE OF JUDGMENT: October 2, 2013
DATE OF AMENDED
REASONS FOR
JUDGMENT: October 15, 2013
APPEARANCES:
|
For the
Appellant:
|
The Appellant himself
|
|
Counsel for the
Respondent:
|
Stephen Oakey
|
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent: William F. Pentney
Deputy
Attorney General of Canada
Ottawa,
Canada
Email this Content