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.
| 19(1) |
File No. 900788 |
| |
R.B. Day |
| |
(613) 957-2136 |
June 7, 1990
19(1)
We are writing in reply to your letter of May 8, 1990, wherein you requested our views as to whether or not a cash donation to the Province of New Brunswick would be considered to be a gift to Her Majesty in right of a province, and thus would not be restricted to the 20 percent of income limitation imposed by subsection 118.1(1) of the Income Tax Act.
24(1)
Our comments
Whether or not a donation, such as the one described above, could be considered to be a gift to Her Majesty in right of New Brunswick would involve a finding of both fact and law.
In situations where a donor directs that a particular cash donation be used for a designated specific purpose or purposes, such that the Province does not have an unfettered right to use the money, it is our view that the donation fails to meet the basic definition of a gift as described in paragraph 3 of IT 110R2 (copy attached). However, it is the Department's practice to view such donations as acceptable provided that no benefit accrues to the donor and the designated gift does not benefit any person not dealing at arm's length with the donor.
If an acceptable donation is made directly to Her Majesty in right of New Brunswick, which would be evidenced by a receipt issued by an appropriately authorized official of the Provincial government, it is included in "total crown gifts" as defined in subsection 118.1(1). Also, paragraph 7 of IT 297R2, (copy attached) states that
"Gifts to Her Majesty in right of Canada and Her Majesty in right of the provinces include gifts to an agent of the Crown. Whether a particular entity is an agent of the Crown in right of Canada or a province depends on whether the law creating the entity (a corporation, commission, gallery, etc.) expressly makes it an agent of the Crown or the entity is an agent of the Crown at common law".
Where the statutory language is unclear as to whether or not a particular entity is an agent of the Crown, we will accept the opinion of the Attorney General of the Province that the particular entity is an agent of the Crown at common law.
Since subsection 6(2) of the Public Hospitals Act of the Province of New Brunswick is unclear as to the establishment of such an agency relationship, the opinion from the Attorney General of the Province of New Brunswick to the effect that the Board of Directors of the acts as agent for Her Majesty in right of New Brunswick, would indicate that the cash donation qualified as a gift to Her Majesty in right of a province for purposes of subsection 118.1(1).
We trust our comments will be of assistance to you.
Yours truly,
for Director Business and General DivisionSpecialty Rulings Directorate Legislative and Intergovernmental Affairs Branch
c.c. Charities Division
B. Fioravanti Current Amendments Division
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© Her Majesty the Queen in Right of Canada, 1990
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1990
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