Date: 20061024
Docket: A-271-05
Citation: 2006 FCA 343
CORAM: NOËL J.A.
EVANS
J.A.
MALONE J.A.
BETWEEN:
TRAVEL
JUST
Appellant
and
CANADA
REVENUE AGENCY
Respondent
REASONS FOR JUDGMENT
EVANS J.A.
[1]
On March
29, 2004, Travel Just, a corporation incorporated under the Canada
Corporations Act, R.S.C. 1970, c. C-32, applied to the Minister of
National Revenue to be registered as a charitable organization under subsection
248(1) of the Income Tax Act, R.S.C. 1985, 1985, c.1 (5th
Supp.) (“ITA”). Since the Minister did not dispose of the application
within 180 days, the Minister is deemed to have refused the application. Travel
Just appeals to this Court under subsection 172(4) of the ITA against
the Minister’s deemed refusal.
[2]
While
Travel Just submitted to the Minister a description of activities that it
proposes to undertake, this appeal turns on whether Travel Just’s corporate
objects, which are set out in its Letters Patent, are exclusively charitable
for the purpose of the ITA. As Iacobucci J. said in Vancouver Society
of Immigrant and Visible Minority Women v. Canada (Minister of National Revenue), [1999] 1 S.C.R. 10 at para.
152, (“Vancouver Society”), it is the purpose, in furtherance of which
an activity is carried out, that determines if the activity is charitable.
[3]
If, as a
matter of construction, Travel Just’s corporate objects permit it to spend its
funds on activities that are not legally charitable, it may not be registered
as a charity: Earth Fund/Fond pour la Terre v. Canada (Minister of National Revenue), 2002 FCA 498 at para. 20. This
principle is subject to the limited statutory exception for ancillary political
purposes (ITA, subsection 149.1(6.1)), and (6.2)), and the common law’s
incidental purposes doctrine: Vancouver Society at paras. 156-58. If, on
the other hand, the objects confine it to charitable activities, Travel Just
will be entitled to be registered. As a registered charity, it could issue
charitable receipts to donors, who may use their donations to reduce their
income tax liability.
[4]
Travel
Just’s principal objects are as follows:
a.
to work
with key governmental authorities and grassroots communities of various tourism
destination markets to create and develop model tourism development projects
that contribute to the realization of international human rights and
environmental norms and that achieve social and conservation aims that are in
harmony with economic development aims for the particular region;
b.
to
develop, fund, administer, operate and carry on activities, programs and
facilities to produce and disseminate materials on a regular basis that will
provide travelers and tourists with information on socially and environmentally
responsible tourism in order to establish normative discourse around traveling
with a social conscience.
[5]
Counsel
argues that Travel Just is eligible to be registered a charity because its
objects fall within the fourth, and residual, “other purposes beneficial to the
community”, head of the test in Pemsel v. Special Commissioners of Income
Tax, [1891] A.C. 531 (Eng. H.L.), as elaborated in subsequent
jurisprudence.
[6]
He says
that object (a) of Travel Just’s objects authorizes it, in effect, to promote “ethical
tourism” in developing countries and, as such, is within the line of cases
holding that the general promotion of an industry or trade constitutes a public
benefit for the purpose of the Pemsel test: see Commissioners of
Inland Revenue v. Yorkshire Agricultural Society [1927] 1 K.B. 611 (Eng. C.A.).
[7]
I do not
agree. Even if the promotion of tourism is a charitable purpose, Travel Just’s
object is not to promote tourism in general, but only those tourist projects
which meet the undefined goals of contributing to the “realization of
international human rights and environmental norms” and “achieve social and
conservation aims that are in harmony with economic development aims for the
particular region”.
[8]
This
object, which is limited to a particular, but vague and subjective, view of
what kinds of tourism are beneficial to the community, is not, in my opinion,
sufficiently analogous to a purpose already recognized as charitable to qualify
under the fourth Pemsel head of charity.
[9]
In
addition, the creation and development of “model tourism development projects”
with the characteristics described above could include the financing and
operation of luxury holiday resorts in developing countries. Promoting
commercial activity of this kind, with a strong flavour of private
benefit, is not a purpose beneficial to the public which would make Travel Just
eligible for a subvention from Canadian taxpayers as a charity.
[10]
In a
word, laudable as the objects listed in (a) may be, they are too broad and vague.
It cannot be said that they restrict Travel Just’s expenditures to purposes
that are in law charitable.
[11]
In view of
this conclusion, it is not necessary to go further. However, I doubt whether the
dissemination of information described in object (b) would qualify as either the
publication of research, or an educational purpose: see Vancouver Society at
para. 169.
[12]
Finally, and
in the alternative, Travel Just says that, since it is incorporated under a federal
statute and its Letters Patent authorize it to operate throughout Canada, the law of Québec must be
examined to see if it recognizes a wider concept of charity than the common
law. Counsel submitted that it does, and that, accordingly, Travel Just should
be registered as a charitable organization to the extent that it operates in
Québec.
[13]
I
disagree. Travel Just currently conducts no activities anywhere. The applicants
for the incorporation of Travel Just, who were also its first directors, had
addresses in British
Columbia. In its
application for registration as a charity, Travel Just gave a Vancouver address as its mailing
address. Of the home addresses given for the four directors at that time, two
were in British Columbia, one was in Alaska,
and one was in California. Travel Just’s legal counsel,
Mr Bromley, is in Vancouver.
[14]
In
contrast, there is no indication in the material before us that Travel Just has
any connection with Québec or has plans to operate there. The applicability of
the law of Québec to Travel Just’s activities is thus hypothetical and
speculative. In these circumstances, resort to the law of Québec is not
necessary and, accordingly, section 8.1 of the Interpretation Act,
R.S.C. 1985, c. I-21, is not triggered: compare Canada 3000 Inc., Re;
Inter-Canadian (1991) Inc. (Trustee of), 2006 SCC 24 at para. 78-81.
[15]
In
addition, like the ITA, the Taxation Act, R.S.Q. c. I-3, defines
charity as a charitable organization or foundation, without defining the term
“charitable”: see sections 1, 985.1 and 985.1.2. The Taxation Act
contains no reference to the “social trust” described in Article 1270 of the Civil
Code of Québec, S.Q. 1991, c. 64. That the private law of Québec may permit
the creation of trusts for social purposes which would not qualify as valid purpose
trusts at common law because they are not charitable does not, in my opinion,
materially advance Travel Just’s claim to the tax advantages of a charity if it
were to operate in Québec.
[16]
There is
considerable force in the submission of the Minister that whether an
organization is charitable for the purpose of the ITA is a question of
public law, and not one of property and civil rights to which the private law
of Québec is relevant. In this context, it is significant that Revenu Québec
registers an organization as a charity only after confirmation of its
registration by the Canada Revenue Agency: Revenu Québec, General Information
at www.revenu.gouv.qc/enterprise/impot/organismes/info.asp.
[17]
For these
reasons, I would dismiss the appeal with costs.
“John M. Evans”
“I
agree.
Marc
Noël, J.A”
“I
agree.
J.
Brian D. Malone, J.A.”
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