Registered charity rights and privileges.

• Author: Broder, Peter

Canadians recently marked the 35th anniversary of the Charter of Rights and Freedoms. Since it was enacted that document has profoundly altered the legal discourse--and the public's perceptions--on many issues in Canadian law. Given this change, coupled with the centrality of free speech to the concept of fundamental rights, particularly the freedom of political speech, it is not surprising that the debate over regulatory treatment of charities, and more specifically the permissibility of charities engaging in political activities, has occasionally been framed as a Charter or rights question.

As appealing as this argument is, it is legally questionable. With respect to registered charities and their donors who enjoy preferential treatment under the Income Tax Act, the case law suggests that eligibility for status, and the advantages that registration confers, is a privilege, not a right. (Note here that the applicability of this jurisprudence to common law charities that do not seek federal registration is uncertain, and that the legal context for these groups may be subject to different considerations.)

That said, in Canada much of the case law on charities and rights concerns the Income Tax Act registered charity regime and its provisions addressing political activities. In that context, rights arguments with respect to eligibility for charitable status have not been well received. For example, in Vancouver Society of Immigrant and Visible Minority Women v. Minister of National Revenue, a Section 15 equality Charter argument was roundly rejected by Justice Iacobucci. Essentially it was held that it was always open to the stakeholders of a group rejected for charitable status to constitute a body that met all the common law and Income Tax Act requirements.

Once it is understood that federal charitable status is not a right, the issue of the procedural fairness to which applicants for status or charity's at risk of losing their registration are entitled comes into sharper focus. Unhappily, the law on that question, and the related one of the appeal rights of entity's denied registration, is more ambiguous.

In October of last year, a Quebec applicant for charitable status initiated a proceeding in the Federal Court of Canada ("FCC"). This case may provide some additional guidance on the obligations of the Canada Revenue Agency ("CRA") as the federal regulatory body with authority over granting and revoking status as a registered charity to...