This summer, Canada Revenue Agency published a new policy designed to encourage the proliferation of charities dedicated to helping ethnocultural groups. CRA has stated that the purpose of the policy is to aid charities involved in helping ethnocultural groups recognize how they can operate as registered charities. 

However, given that it was already a charitable activity to help members of an ethnocultural community prior to the issuance of this policy, it would seem that a prime reason for its issuance was to encourage the proliferation of groups designed to assist ethnocultural communities overcome disadvantages.

Given the complex set of laws governing charities, it may surprise some in the sector that there is no definition of “charity” in the Income Tax Act. In fact, Canada’s law is based on the Statute of Elizabeth (also known as the Charitable Uses Act) passed in England in 1601 and has evolved over the past 400 years.

In 1891, the British House of Lords decided the Pemsel case, thus breaking the definition of charity into four categories 1) advancement of religion, 2) advancement of education, 3) eradication of poverty, and 4) other purposes beneficial to the community. 

Besides qualifying under one of the above categories, a charity in Canada must also meet the “public benefit” requirement. This would require that a charity be established for the benefit of the public, ie that the charity’s proposed purpose(s) must confer a tangible benefit, either directly or indirectly. To meet the requirement of having a public character, the benefit must be available to the public or to a sufficient segment of the community.

The policy advises the relevant groups how to obtain registered charity status under one of the various categories (as opposed to creating a new category of charity). The policy may also be of use to currently registered charities, as they can only undertake activities listed in their objects and the Agency’s new policy may allow these groups some flexibility in structuring their activities.

Given that ethnocultural organizations are dedicated to helping subsets of society, one may think that they would not pass the public benefit test. The CRA’s position is that a group will pass the public benefit test so long as there is a logical connection between the group’s objects and the supposed public benefit, the benefit is explained in the application for charitable status, and the group does not exclude some individual members or parts of the community from the benefits provided. Presumably, the CRA will evaluate the rationality and logical connection between the objects and the benefit and make its decision to register on this basis. 

The policy defines an ethnocultural community or group as having "…shared characteristics unique to, and recognized by, that group. This includes characteristics such as cultural traditions, ancestry, language, national identity, country of origin and/or physical traits. To the extent that religion is inextricably linked to the group’s racial or cultural identity, it can also be recognized as a defining characteristic. In some cases, a group may view its common origin as pan-national, or it may be based on geographic region of origin. These characteristics are the basis on which, generally speaking, one group culturally distinguishes itself from another."

The Falun Gong philosophy presents an interesting example of a problem with this definition. Those who ascribe to the philosophy associate with each other based on their mutual belief, but do not necessarily share the same ethnicity or culture. On the other hand, those who adopt the philosophy also adopt a set of unique beliefs, some language and cultural ideas and formulate a common identity. Moreover, Falun Gong adherents are subject to a great deal of negative propaganda from the Chinese government both in China and in Canada and consequently are perceived negatively by many in the Canadian public. It would seem that the definition of ethnocultural would exclude this group, despite its obvious need for assistance. 

Another set of groups which may be excluded from this definition may be some new age religious movements which do not ascribe to belief in a deity (and hence do not qualify under the CRA definition of religion) and are made up of people from all sorts of different ethnic groups. Some new age believers may suffer from discrimination for their beliefs, but a group dedicated to helping these people may not qualify as a charity. 

In creating this policy, CRA was trying to address the need of disadvantaged groups for integration into all parts of society. This would seem to presuppose that a given ethnocultural group must be disadvantaged in some respect. It would be inappropriate for the CRA, an organization dedicated to enforcing the Income Tax Act, to be in the position of deciding whether a particular group was so disadvantaged that an organization dedicated to helping it could qualify for registered charity status. Moreover, one would hope that these groups will successfully overcome whatever disadvantages they face, and that the CRA will not punish this success with a revocation of registered charity status. 

CRA has undertaken to promote a type of affirmative action in Canada. Regardless of its good intentions, it seems to many critics that it is inappropriate for it to engage in such social engineering. Moreover, administering the policy may leave the CRA open to criticisms surrounding race and equality in Canada. Such decisions are best left to Parliament. While charities may take advantage of the CRA policy, it is my hope that all groups will benefit equally from its provisions and this will lead to greater opportunities for all.