Federal Court of Appeal Upholds Decision to Deny Charitable Status
In the case of Church of Atheism of Central Canada v Canada (National Revenue), the Federal Court of Appeal upheld the Minister’s Decision to deny charitable status to the the Church of Atheism of Central Canada (“CACC”) because CACC could not demonstrate “that its belief system is based on a particular and comprehensive system of doctrine and observances.” The CACC appealed the Minister’s decision and raised two issues:
Whether the Minister’s decision violated the rights and freedoms guaranteed by sections 2(a), 15, and 27 of the Charter; and,
Whether the Minister’s decision was reasonable.
The CACC is a corporation incorporated pursuant to the Canada Not-for-profit Corporations Act (“CNCA”) whose purpose is “…to preach Atheism through charitable activities, in the City of Ottawa, the provinces of Ontario and Quebec, and whichever province shall from time to time be designated as part of Central Canada by the By-laws.”
Were Charter Rights Violated?
To set the framework for dealing with whether the Minister’s decision violated the CACC’s charter rights the Court noted the following:
Subsection 248(1) of the Income Tax Act (“ITA”) defines a charity to include charitable organizations and subsection 149.1(1) partially defines Charitable Organization as:
(a) constituted and operated exclusively for charitable purposes,
(a.1) all the resources of which are devoted to charitable activities carried on by the organization itself,
Because the Act does not define charitable activities, courts must turn to the common law which recognizes four charitable purposes.
Two recognized purposes related to CACC’s appeal which were (1) the advancement of religion and, (2) certain other purposes beneficial to the community
The common law has specific requirements for advancement of religion:
o Advancement requires active promotion (it is not enough that an organization create space for independent worship; and
o Religion requires:
§ faith in a higher power such as God, entity, or Supreme Being;
§ that its followers worship this being; and
§ that the religion consists of a comprehensive system of faith and worship.
Based on the criteria above, the Court had to determine whether CACC was a charitable organization operating exclusively for charitable purposes and whose resources were devoted to charitable activities.
Considering whether the Minister’s decision violated CACC’s section 15 Charter rights, it was noted that Courts have held that not-for-profit organizations are not individuals and that the equality rights of section 15 of the Charter do not apply to CACC.
Concerning section 27 of the Charter, the Court noted that this provision is not a substantive provision of the Charter that can be violated. Rather, its relevance is in interpretation of the Charter.
Lastly, considering section 2(a) of the Charter, the Court found that while section 2(a) protects the rights of atheists because the CACC could continue to carry out its purposes and activities without charitable registration, a refusal of the Minister to grant charitable registration was an interference that was trivial or insubstantial to CACC’s rights to practice their atheistic beliefs.
Was the Minister’s Decision Reasonable?
Since the application for charitable registration was under advancement of religion, the Court noted that the Minister was required to consider the three fundamental characteristics of religion previously mentioned. The Court noted that while belief or faith in a Supreme Being is not always required (such as in Buddhism), a belief system based on a comprehensive system of doctrine and observances is. Despite the CACC’s argument that its doctrine was mainstream science, the Court concluded that the Minister’s decision to deny charitable registration was reasonable citing “the scope and vagueness” of CACC’s argument.
Turning then to the head of “certain other purposes beneficial to the community”, the Court found that the activities carried out by CACC were primarily activities for their members only, and not for rehabilitative or therapeutic purposes.
This case demonstrates the importance of acquiring legal advice in determining whether your organization’s activities and purposes fit within one of the four recognized heads of charity when making an application for charitable registration.