Société de Projets ETPA Inc. v. MNR, 93 DTC 516, [1993] 1 CTC 46 (TCC)

Marceau, J.A.:—This is an appeal from a decision of the Minister of National Revenue rejecting the application by the Canada UNI Association to be granted the status of "charity" under paragraph 149.1(1)(b) of the Income Tax Act, R.S.C. 1952, c. 148 (am. S.C. 1970-71-72, c. 63) (the "Act").

The appellant is a non-profit organization which was formed in August 1991 with the broad purpose of promoting Canadian unity. The articles of association state the following objects:

(i) to inform Canadians concerning the unique geographic, social, cultural and linguistic nature of Canada;

(ii) to establish direct personal communications between citizens of Canada's distinct groups and regions especially, though not exclusively, between Canadians whose first language is English and those whose first language is French;

(iii) to enhance appreciation and tolerance of linguistic and cultural differences through knowledge and understanding.

The association proposes to match participants in different regions who will engage in direct communication with one another. The association also plans to find forums for those wishing to address audiences in other regions of Canada.

The reasons for rejecting the appellant's application for charitable status are contained in two letters from Revenue Canada. The Minister held that the activities of the Canada UNI Association did not fall within any one of the four heads recognized as charitable by the Courts namely, the relief of poverty; the advancement of religion; the advancement of education; and other purposes beneficial to the community as a whole in a way which the law regards as charitable. The application had relied on the third and fourth heads. With respect to the third head, the Minister took the position that, in order to fall under it, an "activity must involve an element of training or instruction, the development of faculties, or the improvement of a branch of human knowledge. The mere provision of information cannot in itself be considered educational.” With respect to the fourth head, the Minister simply noted that no legal precedent had ever established that the promotion of national unity or personal exchanges between Canadians would be beneficial to the community in a way which the law deems to be charitable.

Counsel for the appellant contends that the Minister erred in failing to realize that his client's activities did fall within both the third and fourth heads recognized as charitable for the granting of the status of "charity" under the Income Tax Act. His argument essentially goes as follows. The advancement of education contemplated by the third head extends beyond formal instruction in schools and, in fact, interchanges between cultures have been found to fall within the category of charities. As in Native Communication Society of B.C. v. M.N.R., [1986] 3 F.C. 471, [1986] 2 C.T.C. 170, 86 D.T.C. 6353 (C.A.), Canada UNI Association's activities will enhance participants' knowledge of other cultures, languages, ethnicity, geographic location and the history of Canadians. Coming to the fourth head, counsel notes that, in Ontario,"charity" is defined by the Charities Accounting Act, R.S.O. 1990, c. 10, and he argues that it is this definition, which was found by the Ontario courts to be broader than the traditionally accepted one of coming within the spirit and intendment of the preamble to the Statute of Elizabeth, which should be applied in the absence of any definition in the federal statute to determine if the activities were beneficial to the community in a way regarded by law as charitable. In any event, he adds, the contents of the enumerated traditional categories are not fixed; rather, they must respond to current social conditions, and the promotion of multiculturalism and the bilingual character of Canada are recognized in the Canadian Constitution, indicating that these objects should be considered beneficial to the community in the charitable sense. Finally, he disputes that the Association's activities could be said to be political since they do not further the interests of a political party, procure changes in legislation, or promote a particular political viewpoint.

These submissions made in support of the appeal do not appear to us to be compelling, and we are of the view that, on the basis of the existing law, the appeal must fail. The nature of the appellant association's objects and intended activities are virtually indistinguishable from those considered in the case Toronto Volgograd Committee v. M.N.R., [1988] 1 C.T.C. 365, 88 D.T.C. 6192 (F.C.A.), where the object of the society was to recreate links between the cities of Toronto and Volgograd in order to reduce world tensions and the threat of nuclear holocaust. The Court found in that case, after having dismissed, at least indirectly, any possible reliance on the definition of "charity" in the Ontario Charities Accounting Act, that the inherently political nature of the organization's objects and activities precluded a finding that they fell under the third or fourth charitable heads developed under the federal law, whether advancement of education or benefit to the community. To find otherwise in this similar case is simply not open to us as it would be not only an evolution of the concepts involved, but a complete transformation of them. We agree with the respondent that the Native Communications Society case, decided before the Toronto Volgograd one, is distinguishable, in that the Society's activities there were directed towards native persons who hold a special position in Canadian society.

In the result, we think that however beneficial they may be, the political nature of the appellant's activities precludes charitable status within the meaning of the Income Tax Act of Canada.

The appeal will therefore be dismissed, without costs.

Appeal dismissed.