Judging guidance.

• Author: Broder, Peter
• Position: Not-for-Profit Law

It is trite law that guidance about registered charities issued by the Canada Revenue Agency (CRA), through its Charities Directorate, does not have the force of legislation or regulations. Courts can reject or ignore it when determining the permissibility or impermissibility of an organization's conduct and the consequences flowing from that conduct.

The Income Tax Act (ITA) relies heavily on the common law to establish the scope and parameters of what qualifies an entity as eligible for registration as a charity. As well, very few Regulations with respect to ITA provisions governing registered charities have been issued. That, in practice, leaves material released by the CRA as a primary source of information after the legislation itself.

Even so, court decisions are frequently rendered without any discussion whatsoever of the CRA's published position. Canadian judges, when they do consider the guidance, are apt to comment on it only in passing. They rarely directly address the particulars asserted in a specific document and their accuracy or legal validity. This means that one is often left to assume or infer whether the CRA's statement of the law is correct or complete.

The Charity Commission for England and Wales, as a statutory regulatory body operating in a jurisdiction where authority over charities is not split between two levels of government, as it is in Canada and Australia, starts with much greater rule-making powers than the CRA. In addition, the British Parliament saw fit to create a mechanism in its charity legislation for regulatory interpretations issued by the Commission to be judicially tested.

Under the legislation, a court (in the English system called a Tribunal in this context) can consider issues relating to the legal treatment of charities, as reflected in the Commission guidance, by way of a reference from the Attorney-General. Although there are procedures in some Canadian courts for consideration of reference or stated cases, including matters with respect to the federal Income Tax Act, there is no special provision for the consideration of charity matters as there is in England.

Even so, court decisions are frequently rendered without any discussion whatsoever of the CRA's published position. Canadian judges, when they do consider the guidance, are apt to comment on it only in passing.

In part, the English system was put in place to address the legal impact of legislative measures contained in the 2006...