Public Television Association of Quebec v. Minister of National Revenue: A case comment.

Posted By: Peter Broder

This past July, the Federal Court of Appeal released its decision in Public Television Association of Quebec and Minister of National Revenue (P.T.A.Q.). The decision remains subject to potential appeal to the Supreme Court of Canada. The outcome reinforces the status of Canadian charity law as an outlier in international jurisprudence dealing with public benefit organizations, subjecting Canadian registered charities to significantly more stringent rules than are typical in other countries.

(Full disclosure: in my role as Executive Director of the Pemsel Case Foundation, I, and several of my Foundation colleagues, assisted in preparing the legal arguments made by Imagine Canada, which was granted Intervener status in the proceeding. So I am not a disinterested observer here.)

With all due respect, it is suggested here that the case, as decided, represents a missed opportunity to provide more scope or greater flexibility--or, at a minimum, increased regulatory certainty--for Canadian charities conducting their work through non-charitable intermediary groups. The Federal Court of Appeal, as is not unusual in charity cases, restricted itself in this decision to a narrowly-focused, fact-driven analysis, and declined to examine broader considerations that might have informed its reasoning.

The tendency of federal charity law jurisprudence to emphasize fiscal implications and undervalue common law precedent or equitable principles with respect to conferring or maintaining registered charity status has been documented by academics and other commentators. The effect of such an approach is both to disenfranchise the potential beneficiaries of a disputed organization's work and to create a more ambiguous and, often, a more difficult regulatory environment for voluntary sector organizations to work in.

In P.T.A.Q., the proceeding concerned a Canadian registered charity's dealings with Vermont Public Television, which is a 501(c)(3) organization--the U.S. Tax Code status under which charity-like groups are afforded favourable tax treatment and gain the right to issue tax receipts to their donors. Notably, if the Quebec organization had had a similar relationship with a Canadian educational broadcaster recognized as a registered charity, such as TV Ontario or Tele Quebec, it is unlikely that its conduct would have been questioned.

The Canada Revenue Agency argued, however, that the Quebec organization was a conduit for Vermont...