Daycare facilities

Policy statement

Reference number
CPS-003

Effective date
August 3, 1990

Purpose

This policy statement outlines the Directorate's policy for the registration of applicant organizations that provide daycare facilities primarily to serve the interests of a particular segment of the community.

Statement

The courts have recognized as charitable organizations that provide daycare facilities for the purpose of serving the interests of a particular segment of the community.

Implementation

1. This policy applies to applicant organizations that provide daycare facilities with formal objects and activities that reflect an intent to relieve poverty and/or advance education, and meets the public benefit test. ¹ It must restrict its programs and activities to the pursuance of its objects and provide specific details about its charitable activities, for example, a synopsis of the criteria used in selecting its beneficiaries. ²

Relief of poverty

2. An organization can qualify under this category of charitable purposes but only if the recipients are in need of care, ³ for example, if the children's parents do not have access to another daycare centre in that locality.

Advancement of education

3. Under this category of charitable purposes, an organization must demonstrate that it will have a specified percentage of openings made available to the general public. Its primary trust must be for the benefit of the public as opposed to a private benefit. ⁴

4. An organization would fail to qualify for registration as a charity if it restricts its daycare facilities to children of employees only, as opposed to giving just a preference to children of employees.

Other purposes beneficial to the community as a whole

5. An organization may qualify under this charitable category if its daycare facilities are open to the community as a whole, including any interested individual without restrictions of any kind.

6. A purpose would lack sufficient public character if the benefits were confined to members of an association, employees or children of employees of a certain firm or organization, persons of a particular ethnic background or religious affiliation or any other grouping in which all members of the community cannot join or participate.

References

• Policy statement CPS-024, Guidelines for registering a charity: Meeting the public benefit test

Footnotes

Footnote 1

Re Koettgen's Will Trusts, [1954] Ch. 252. The court found in favour of charitable status for the trust hinged on the construction of the objects of the will, which stated that funds were to be available for the education of persons who could not otherwise afford it. The objects were charitable and it was only as a secondary requirement, if possible, that 75% of the available income was to be used for the education of employees of a particular company who met the primary condition of being unable to afford the education.

Footnote 2

Other examples would be to advise if the facility will be available on a first come first served basis to the children of any interested parent, or if the organization intends to give priority or preferential treatment to children related to employees of an organization and there are a certain number of spaces available for the accommodation of children reserved exclusively for children related to employees of an organization or government entity, and if so how many; or will there be any income restrictions or means test for the parents or guardians of the children to be considered in deciding which children are to be accommodated.

Footnote 3

Dingle v. Turner. Daycare centers could be viewed as relief of poverty in the same manner as could clerks of a private company needing a vacation. If a daycare facility were established for employees of a firm but the children were not necessarily in need of such a facility as others existed in the locality, the purpose could not be viewed as relief of poverty.

Footnote 4

I.R.C. v. Educational Grants Association Ltd., [1967] 2 All E.R. 893. This case involved trust income to be applied to the education of children of employees or former employees of a named company but the court held that the trust lacked the necessary element of public benefit.

Oppenheim v. Tobacco Securities, [1951] A.C. 297 (P.C.). Common employment creates a connection and fails to qualify as open to the public. For example, the nexus between a university's staff and students is sufficiently broader than that between an employer and employees and would qualify for registration. A university cannot wield the same kind of control over its students that it can over its staff. As the law is specific about a sufficient segment of society under advancement of education, a university's staff and students is not a sufficient segment of society.

Date modified:

2011-02-14