Prevention and relief of poverty.

• Author: Broder, Peter

A couple of years ago, the refusal of the Canada Revenue Agency (CRA) to allow Oxfam Canada to include prevention of poverty in its objects if it wanted to retain its status as a registered charity drew widespread press attention. The CRA took the position that relief or alleviation of poverty was a recognized charitable purpose, but that prevention of poverty was not.

Last June the Federal Court of Appeal (FCA) upheld that position in Credit Counselling Service of Atlantic Canada v. Minister of National Revenue. That case concerned the work of a group that provided research and education on credit-related concerns, as well as professional financial and debt counselling services. The counselling services were available to the clients without evaluation of their financial circumstances, so potentially assisted people in avoiding rather than escaping poverty.

The decision is clear authority for the proposition that prevention of poverty is currently not a recognized charitable purpose in Canada, and thus cannot be stated as the (primary) purpose of an entity eligible for registration. With respect, however, the decision provides little clarity on some essential aspects of charity law in addressing poverty. No doubt this stems in part from the facts the Court had to deal with--"prevention of poverty' was a stated purpose of the organization--but, unhappily, the brevity of the analysis disposes of the matter without fully engaging with some important issues.

The 23-paragraph decision offers organizations that work to alleviate poverty little guidance on how to deal with some practical problems they face daily. For example, a significant hurdle many such groups have to grapple with is the challenge of offering services without stigmatizing clients. Related to this is the administrative burden placed on a charity to segregate those legitimately eligible for services from those that ought not to qualify.

In terms of stigmatization, this may be a less obvious consideration in credit counselling than in, for example, a school breakfast program. Generally, such programs are made universally available to children in a particular locale, rather than having participants singled out and potentially embarrassed or shamed. Even for credit counselling, an agency that is known to scrutinize clientele for impoverishment may scare away potential beneficiaries because they don't want to be seen as poor. So, leaving aside the human cost of demeaning people...