Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
Whether XXXXXXXXXX
(the "Board") is a municipality for purposes of subparagraph 110.1(1)(a)(iv) and paragraph (d) of the definition of "total charitable gifts" in subsection 118.1(1), and whether it is a "qualified donee" as described in subsection 149.1(1).
Position TAKEN:
Yes.
Reasons FOR POSITION TAKEN:
The Board is legislated pursuant to the provisions of the Ontario Education Act and its school zone includes territory without municipal organization.
Certain boards of education, particularly in northern Ontario, are established by the Ontario Ministry of Education in territories and areas that are without municipal organization. These territories are deemed, under the provisions of the Ontario Education Act, to be district municipalities and the boards of education of the school zones which include these district municipalities have powers and duties of a municipal council under the Ontario Municipal Act and are corporations under the Ontario Education Act. The Department's position is that such boards are municipalities for purposes of paragraph 149(1)(c), and also come within subparagraph 110.1(1)(a)(iv) and paragraph (d) of the definition of "total charitable gifts" in subsection 118.1(1) as a Canadian municipality.
XXXXXXXXXX
These boards are also a "qualified donee", as defined in subsection 149.1(1), since this term includes donees described in paragraph 110.1(1)(a) and in the definition of "total charitable gifts" in subsection 118.1(1).
5-952440
XXXXXXXXXX M. Azzi
Attention: XXXXXXXXXX
November 21, 1995
Dear Sir/Madam:
Re: XXXXXXXXXX
This is in reply to your letter of September 6, 1995 requesting our views as to whether XXXXXXXXXX
(the "Board") is a municipality for purposes of the Income Tax Act (the Act) and, in particular, for purposes of paragraph 110.1(1)(a) of the Act and paragraph (d) of the definition of "total charitable gifts" in subsection 118.1(1) of the Act. You also request confirmation that the Board may issue income tax receipts for gifts it receives and that it is a "qualified donee" as described in subsection 149.1(1) of the Act.
Our understanding of the facts is as follows:
1.The Board is not a "registered charity" as defined in subsection 248(1) of the Act.
2.The powers and duties of the Board are legislated pursuant to the provisions of the Ontario Education Act.
3.Under subsection 97(2) of the Ontario Education Act, the Ontario Lieutenant Governor in Council may, by regulations, designate district combined separate school zones. The Board's district combined separate school zone is set out in the Ontario Education Act Regulation 290, Schedule 4. You indicate that the Board's zone includes both territory with and without municipal organization.
Written confirmation of the tax implications inherent in particular transactions are given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R2. However, we are prepared to provide the following comments which are of a general nature and are not binding on the Department.
Most boards of education are not municipalities; however, they are generally public bodies performing a function of government in Canada and as such are exempt from income tax by virtue of paragraph 149(1)(c) of the Act. Since the powers, duties, school purposes and activities of boards of education, established pursuant to the Ontario Education Act, would bring the purposes and activities of these boards within the meaning of "the advancement of education", it is our opinion that they qualify as charities and as such are registrable for purposes of subparagraph 110.1(1)(a)(i) of the Act and paragraph (a) of the definition of "total charitable gifts" in subsection 118.1(1) of the Act in respect of gifts made to them.
Certain boards of education, particularly in northern Ontario, are established by the Ontario Ministry of Education in territories and areas that are without municipal organization. These territories are deemed, under the provisions of the Ontario Education Act, to be district municipalities and the boards of education of the school zones which include these district municipalities have powers and duties of a municipal council under the Ontario Municipal Act and are corporations under the Ontario Education Act. Such boards are municipalities for purposes of paragraph 149(1)(c) of the Act, and also come within subparagraph 110.1(1)(a)(iv) of the Act and paragraph (d) of the definition of "total charitable gifts" in subsection 118.1(1) of the Act as a Canadian municipality.
If, as indicated in your letter, the Board's school zone was established pursuant to a regulation made under the Ontario Education Act and includes territory without municipal organization, in our view, the Board qualifies as a municipality and is exempt from income tax by virtue of paragraph 149(1)(c) of the Act. Furthermore, the Board will qualify as a Canadian municipality for purposes of subparagraph 110.1(1)(a)(iv) of the Act and paragraph (d) of the definition of "total charitable gifts" in subsection 118.1(1) of the Act and could therefore issue income tax receipts for gifts it receives. Finally, the Board will be a "qualified donee" as described in subsection 149.1(1) of the Act.
We trust that these comments will be of assistance.
Yours truly,
R. Albert
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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