Modernizing the 'Definition' of Charity: Charting the Tax Terrain of Statutory Reform

AuthorReid Buchanan & Michelle Gallant
PositionRobson Hall Faculty of Law, University of Manitoba/Professor, Robson Hall Faculty of Law, University of Manitoba
Modernizing the ‘Def‌inition’ of
Charity: Charting the Tax Terrain of
Statutory Reform
Reid Buchanan* & Michelle Gallant**
Amid considerable chatter about the renovation of charities governance, there is a lot of
clamor for a twenty-f‌irst century vision of benevolence. e contemporary state of af‌fairs
f‌inds governance thoroughly tethered to a conception of ‘charity’, or ‘charitable entity’
planted 400 years ago. at conception, developed within and shaped by the common
law, is perceived to ref‌lect an antiquated idea about benevolence that has little relevance
to the contemporary social order. While a statutory articulation of the def‌inition of
‘charity’ could ensure that modern governance matched and served the needs of modern
society, any renovation project happens within a tax context. In law, the meaning of
‘charity’ matters precisely because of its tax pertinence. e relationship between tax
and charities means that the crafting of any new vision needs to develop within, and
be framed by, an appreciation of the potential f‌iscal implications. is paper charts the
tax-centric dimension of charities governance. With a specif‌ic focus on the def‌initional
piece, it prof‌fers an analysis of the f‌iscal considerations relevant to modernizing the
def‌inition of ‘charity’.
* Reid Buchanan, Student, Robson Hall Faculty of Law, University of
Manitoba. I would like to thank the Legal Research Institute of the
University of Manitoba for providing me the opportunity to work on this
article. I would also like to thank Dr. Michelle Gallant for inviting me to
become involved with this project, for her guidance and wisdom, and for
sparking my interest in Charity Law and the governance of the non-prof‌it
sector. Any errors remain my own.
** Michelle Gallant, Professor, University of Manitoba, Faculty of Law.
(2020) 6 CJCCL
I. I
II. C  T
III. H, C,   D
IV. T C F   C  ‘C’
V. T C L ‘D’  C
A. Common Features of the Charitable Terrain
B. Troubles with the Common Law Terrain
VI. T M N   T D
VII. C
I. Introduction
Parliament has a long history of promoting benevolence through
the tax system by nestling specif‌ic concessions in the Income Tax
Act (“I TA”).1 is undergirds giving and shares some responsibility for
fostering a vibrant Canadian charitable sector. Although the promotion
of this vision exists in statute law, Parliament has never articulated
a particular vision of benevolence. ere is no statutory def‌inition of
‘charity’. Statute law confers special treatment onto charities but does not
specify what entities qualify for this treatment. Instead, the promotional
scheme applies to organizations that the common law decides are
is benevolence framework, the coupling of explicit statute-based
tax incentives with a concept determined by the common law, has never
proven particularly controversial. In almost a century of promoting
charity, statute law has never been modif‌ied to align tax concessions
with a statutory def‌inition. As recently as 2017, a doyen of charity law
opined that “[n]o signs are evident that an agreed statutory def‌inition or
description is likely to appear in the foreseeable future in Canada”.2
Nonetheless, winds of change may be stirring. After many years
of scant scrutiny of the legal governance of charities, the years 2016,
2018, and 2019 witnessed the formation of three separate federally-

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