Promotion of Health and Charitable Registration

This guidance explains how the Canada Revenue Agency (CRA) interprets and applies the law as it relates to the promotion of health and charitable registration. It was developed in consultation with stakeholders in the charitable sector.

While the CRA is always interested in feedback on its guidance products, a post implementation review is conducted approximately one year after publication and amendments are made as warranted. If you have comments or suggestions, you can go to Ongoing feedback on existing policies and guidance  for contact information.

Guidance

Reference number
CG-021

Issued
August 27, 2013

This guidance replaces the following summary policies: CSP‑A19, Alcohol, Drug, Addiction, CSP-A11, Abortion (Medical Clinic) - Women, CSP-C24, Counselling, CSP‑C20, Crisis Centre, CSP-D11, Relieving Sickness, Disability, CSP‑H02, Provision of Health Care, CSP‑H03, Health Clinic, and CSP‑M04, Holistic Medicine.

Summary

According to the common law, the promotion of health can be charitable. The promotion of health means directly preventing or relieving a mental or physical health condition. To be charitable, a purpose that promotes health must, as a general rule, directly prevent or relieve a physical or mental health condition by providing effective health care services or products to the public in a manner that meets applicable quality and safety requirements.

This guidance groups purposes that promote health into four types:

  • core health care (diagnosing and treating health conditions, assisting with rehabilitation, protecting and maintaining public health);
  • supportive health care (providing support to individuals diagnosed with health conditions or their caregivers and families);
  • protective health care (saving people when lives are in danger by providing health-related emergency services); and
  • health care products.

However, not everything that is done with the intention of promoting health is charitable under the law. To be charitable, every promotion of health purpose must meet the public benefit test by delivering a charitable benefit to the public.

Typically, in the absence of evidence to the contrary, providing the public with health care services or products that are funded under the Canada Health Act or covered under any provincial or territorial medical insurance plan in Canada will be considered to be charitable when applicable quality and safety requirements are met. Otherwise, to further a promotion of health purpose, an organization must generally show that each health care service or product it provides effectively prevents or relieves a physical or mental health condition and meets applicable quality and safety requirements. The guidance explains the criteria for assessing services and products for effectiveness, and quality and safety.

Examples of promotion of health purposes include:

  • promoting health by:
    • providing the public with in‑patient or out‑patient medical services;
    • providing accident victims with physical, occupational or speech therapy;
    • protecting and maintaining public health by slowing the development and progression of heart disease by operating a “healthy heart” program;
    • providing individuals with [specify condition] with access to health counselling, information or group support programs;
    • providing publicly available ambulance, paramedic or fire-fighting services; or
    • providing affected populations with health care products that prevent and manage serious threats to survival and health.

Table of contents


A. Introduction

1.  The Canada Revenue Agency’s Charities Directorate registers charities under the Income Tax Act. The Directorate also ensures that registered charities continue to meet all associated legal and administrative requirements.

2.  This guidance explains the Directorate’s interpretation of relevant common law (case law or court decisions) and legislation (the Income Tax Act) to determine whether an organization established with promotion of health purposes is eligible for registration as a charity under the Income Tax Act. This guidance also sets out the criteria used to determine whether an organization furthers promotion of health purposes as defined in law.

3.  Charitable registration is one option for organizations with purposes or activities that promote health. For information about other options, please go to the webpage Is registration right for you?

4. In this guidance, unless otherwise stated, the terms:

“charity” and “registered charity” include all three types of registered charities as defined under the Income Tax Act: charitable organizations, public foundations and private foundations.

“organization” includes applicants for registration as a charitable organization, a public foundation or a private foundation, as well as registered charities.

5.  To be registered as a charity under the Income Tax Act, the law requires that an organization’s purposes:

  • be exclusively charitable Footnote 1 —meaning that they fall within one of four broad categories of charity [relief of poverty (first category); advancement of education (second category); advancement of religion (third category); and certain other purposes beneficial to the community in a way the law regards as charitable (fourth category)] Footnote 2 , and provide a charitable benefit to the public, or a sufficient section of the public; Footnote 3 and,
  • define the scope of the organization’s activities. Activities are the ways in which an organization furthers its purposes. Subject to limited exceptions, all of the organization’s resources must be devoted to charitable activities that directly further its stated charitable purposes. Footnote 4

6.  In addition to having charitable purposes and devoting its resources to charitable activities that further those purposes, there are other legal requirements that must be met for an organization to be registered under the Income Tax Act. For detailed information about registration requirements, see Guidance CG-017, General Requirements for Charitable Registration.

7.  This guidance provides general information only. All decisions about specific organizations are made individually, applying the law to the facts in each case.

B. The promotion of health in the charitable context

Definitions and key concepts

8.  In this guidance, relevant terms and concepts are defined as follows:

Promotion of health: means directly preventing or relieving physical or mental Footnote 5 health conditions by providing Footnote 6 health care services or products to eligible beneficiaries.

Health care products: Refer to:

Effectiveness : Refers to the positive and desirable outcomes normally resulting from a health care service Footnote 10 or product. In most cases, Footnote 11 this means eliminating the presence of or reducing the symptoms related to, an identified health condition. Footnote 12 In the case of protective health care, effectiveness involves preventing injury or loss of life.

In this guidance, effectiveness is the benchmark to determine whether a particular health care service or product will deliver the essential charitable public benefit.

Quality and safety: Refers to the quality and safety standards normally expected to be met by a health care provider, and the quality and safety standards normally applied to health products. Quality and safety standards normally expected to be met by a health care provider ensure that health care service providers are competent and able to provide safe health care services that are of sufficient quality when compared to those routinely provided within the Canadian health care system.

All applicable quality and safety requirements must be met for an effective health care service or product to provide a substantial net public benefit, meaning that any negative effect is outweighed by the resulting charitable benefit. Footnote 13

Assessing the charitable benefit of purposes that promote health and the activities that further them

9.  The common law recognizes promotion of health purposes under the fourth category of charity—certain other purposes beneficial to the community in a way the law regards as charitable. Footnote 14 , Footnote 15

10. However, to be charitable and eligible for registration, every promotion of health purpose must meet the two-part public benefit requirement by showing that it provides a charitable benefit to the public.

11. A charitable benefit is one that is recognizable and capable of being proved, and socially useful. To be recognizable and capable of being proved, a benefit must generally be tangible or objectively measurable. Footnote 16 Benefits that are not tangible or objectively measureable (intangible benefits) must be shown to be approved through objective evidence of common or widespread acceptance by persons who are knowledgeable and informed about the particular subject or issue. Footnote 17 To be socially useful, a benefit must have public value and a demonstrable impact on the public. Footnote 18 In all cases, it must be clear that a benefit exists. An “assumed prospect or possibility of gain” that is vague, indescribable or uncertain, or incapable of proof, cannot be a charitable benefit. Footnote 19

12. As a general rule, the benefit should be a necessary and reasonably direct result of the purpose and of the activities that will be conducted to further the purpose, and reasonably achievable. Footnote 20 While indirect benefits have sometimes been accepted by the courts, indirect benefits will not be charitable if they are too remote. Footnote 21 A charitable purpose is also expected to provide a substantial net benefit, meaning that any negative effect is outweighed by the resulting charitable benefit. Footnote 22

13. To provide the charitable benefit required to promote health, a purpose, and the activities that will be conducted to further the purpose, must be considered to prevent or relieve a health condition by providing health care services or products. Unless otherwise specified in this guidance, to be considered to prevent or relieve a health condition, all health care services and products must meet the applicable requirements relating to effectiveness as set out in Appendix A, and quality and safety set out in Appendix B and Appendix C. Footnote 23

14. In the absence of evidence to the contrary, health care services and products that would normally be eligible for coverage under the Canada Health Act, Footnote 24 or for coverage under any provincial or territorial medical insurance service plan in Canada Footnote 25 , will generally be considered as meeting the requirements relating to effectiveness , but must be shown to meet the requirements related to quality and safety set out in this guidance.

15. When any health care service or product is provided for purely cosmetic or lifestyle reasons (for example, an optional cosmetic procedure to improve one’s appearance) it generally is not considered to provide a charitable benefit. However, when a health care service or product is medically necessary, such as surgery to address a deformity relating to a congenital abnormality or a serious injury resulting from an accident, trauma or a disfiguring health condition, it will generally be considered to prevent or relieve a health condition and promote health as long as it meets the requirements relating to effectiveness, and quality and safety set out in this guidance.

16. To be public, a benefit must be provided to the public as a whole, or to a sufficient section of the public. This means:

  • the members of the public potentially eligible to receive the benefit (the eligible beneficiary group) must be appropriately defined. Different charitable purposes have different requirements about what is considered to be the public, or a sufficient section of the public. Footnote 26 Sometimes, restricting eligible beneficiaries is justified, or even required, based on the nature of the purpose. Other times, benefits must be available to the public as a whole. For example, a health organization with the purpose of addressing a particular disease may restrict eligible beneficiaries to people afflicted with that disease. On the other hand, a general hospital with the purpose of providing various health care services should usually be available to the public as a whole; and
  • unacceptable private benefits may not be provided. Generally, a private benefit is a benefit or advantage (charitable or non-charitable) provided to a person, entity or organization that is not a charitable beneficiary, or a benefit provided to a charitable beneficiary that goes beyond what is considered to be charitable. An acceptable private benefit is typically one that is incidental to achieving a charitable purpose (necessary, reasonable, and proportionate to the resulting public benefit). Footnote 27

17. To summarize, to be charitable and eligible for registration, a purpose that promotes health, and the activities conducted to further that purpose, generally must:

  • directly prevent or relieve a physical or mental health condition by providing health care services or products that meet the applicable effectiveness, and quality and safety requirements set out in this guidance,
  • be provided only to eligible beneficiaries who constitute the public or a sufficient section of the public,
  • not provide an unacceptable private benefit.

Promotion of health purposes and activities

18. This guidance groups purposes that promote health into four types:

     a.     core health care;
     b.     supportive health care;
     c.     protective health care; and
     d.     health care products.

a. Core health care

19. Providing core health care to eligible beneficiaries can promote health. Core health care includes:

    i.     diagnosing Footnote 28 and treating health conditions;

    ii.    assisting with rehabilitation; and

    iii.   protecting and maintaining public health. Footnote 29

i. Diagnosing and treating health conditions

20. Diagnosing and treating identified health conditions can promote health.

21. Examples of purposes that promote health through diagnosis and treatment include:

  • Promoting health by providing the public with:
    • medical diagnostic services, medical supplies (for example, drugs, first aid supplies) or medical equipment (for example, crutches, wheelchairs or oxygen tanks);
    • medical hospitals, clinics or dispensaries; or
    • in‑patient or out‑patient medical services.

22. Examples of activities that could directly further diagnostic and treatment-based purposes include:

  • providing emergency medical services;
  • providing dialysis treatments; or
  • operating a diagnostic imaging clinic to diagnose illness or injury.
ii. Assisting with rehabilitation

23. Assisting with rehabilitation can promote health. Rehabilitation should facilitate and advance recovery from loss of function due to a health condition.

24. Examples of purposes that promote health by providing rehabilitation services include:

  • Promoting health by:
    • assisting with the rehabilitation of accident victims;
    • assisting with the recovery from alcohol addiction; or
    • providing psychological counselling or social services.

25. Examples of activities that could directly further purposes that promote health by providing rehabilitation services include:

  • maintaining a facility and providing rehabilitation health care professionals;
  • providing physical, occupational, or massage therapy; or
  • establishing and operating counselling or support group programs.
iii. Protecting and maintaining public health

26. Protecting and maintaining public health with the goal of preventing (or reducing the incidence of) health conditions, injuries or loss of life, can promote health. In general, protecting and maintaining public health means preventing the initial occurrence of a health condition by:

  • preventing the spread of disease;
  • slowing the progression rate, or reducing the effects of an existing health condition; or
  • reducing the development of, or relapses in, chronic health conditions.

27. Examples of purposes that promote health by protecting and maintaining public health include:

  • Promoting health by protecting and maintaining public health by:
    • preventing outbreaks of a disease [specify] by operating a vaccination clinic;
    • slowing the development and progression of heart disease by operating a “healthy heart” program; or
    • reducing the risk of premature delivery in pregnant women by providing pre‑natal care.

28. Examples of activities that could directly further purposes that promote health by protecting and maintaining public health include:

  • conducting epidemical research into the spread of communicable diseases; Footnote 30
  • establishing and staffing with trained personnel mobile clinics that serve communities identified to be at risk;
  • developing and delivering harm reduction programs for persons with heart disease such as:
    • smoking cessation,
    • nutritional counselling;
    • cardio respiratory exercise programs; or
    • providing health advisories. Footnote 31

b. Supportive health care

29. Providing supportive health care can promote health. Supportive health care services or products will be considered to meet requirements relating to effectiveness where they have been recognized by the common law to provide a charitable benefit. Supportive health care includes providing:

    i.    health-related support to individuals with health conditions; or

    ii.   extended support for families or caregivers of individuals with health conditions.

30. Since by their nature supportive health services or products do not normally raise quality or safety concerns, requirements relating to quality and safety generally do not apply. However, when the nature of the service or product does raise quality or safety concerns, the risk of any harm that may arise from the proposed activity must be weighed and a net benefit must result.

i. Providing health-related support to individuals with health conditions

31. Providing health‑related supportive services or products can promote health. The services or products should support recovery from, or living with, a health condition. Footnote 32

32. Examples of purposes that promote health by providing supportive health services or products include:

  • Promoting health by providing individuals with [specify condition] with:
    • extra comfort items to cope with hospitalization or a health condition;
    • services that facilitate the delivery of health care services; or
    • access to health counselling, information or group support programs.

33. Examples of activities that could directly further purposes that promote health by providing supportive health services or products include:

  • providing toys or games to hospitalized children;
  • delivering meals to the sick;
  • driving individuals to medical appointments;
  • accompanying individuals to medical appointments to interpret or translate on behalf of the health professional and the patient; or
  • hiring and training employees to lead group discussions for individuals diagnosed with cancer (or other health condition).
ii. Providing health-related support for families or caregivers of individuals with health conditions

34. Providing health-related support to individuals with health conditions, and to families or caregivers of individuals with health conditions, can promote health where the resulting charitable benefit is not too indirect or remote. Footnote 33

35. Examples of purposes that promote health by providing health-related support to individuals with health conditions, or to families or caregivers of individuals with health conditions, include:

  • Promoting health by providing:
    • temporary accommodations to family members of hospitalized or seriously ill patients; or
    • respite for the caregivers of persons diagnosed with a serious health condition. Footnote 34

36. Examples of activities that could directly further purposes that promote health by providing health-related support to individuals with health conditions, or to families or caregivers of individuals with health conditions, include:

  • establishing and operating a home near a medical facility for use by family members of hospitalized of seriously ill patients; or
  • establishing and operating an adult day program for persons diagnosed with a serious health condition thereby providing respite to caregivers.

c. Protective health care

37. Providing protective health care can promote health when it protects or preserves health.

38. Protective health care includes:

    i. providing health-related emergency services; and

    ii. regulating health care service providers.

39. Requirements relating to effectiveness will be considered to have been met only if the common law has recognized the charitable nature of the protective health care in question. When the nature of the protective health care could raise safety or quality concerns, the quality and safety requirements set out in Appendix B and Appendix C apply.

i. Providing health-related emergency services

40. Providing health‑related emergency services to save lives and protect against injury and loss of life can promote health.

41. Examples of purposes that promote health by providing health‑related emergency service include:

  • Promoting health by providing publicly available:

42. Examples of activities that could directly further these purposes include:

  • hiring and training employees; or
  • building or maintaining facilities and equipment.
ii. Regulating health care service providers

43. Protecting the public with respect to the quality of health care services by regulating health care service providers can promote health. Footnote 38

44. Examples of purposes that promote health by regulating health care service providers include:

  • Promoting health for the benefit of the public by:
    • regulating or governing health care service providers; or
    • raising health care service standards.

45. Examples of activities that could directly further purposes that regulate health care service providers include:

  • creating and maintaining a register of persons qualified to be registered as a health care service provider;
  • monitoring compliance with standards, investigating complaints and exercising disciplinary power over registered health care service providers; or
  • monitoring and advising on medical education and supervising the training of persons conditionally registered (as in students or newly trained health care service providers).

46. Generally, a regulatory body for health care service providers established and governed by Canadian federal, provincial or territorial legislation to carry out any, or all of the above activities will be considered to be furthering a charitable purpose.

47. However, a group or association (whether established and governed by legislation or otherwise) that promotes the interests of the members of a particular health care profession is generally not eligible for registration as a charity because it provides an unacceptable private benefit. To be charitable, serving the interests of members must be incidental to providing the public benefit of protecting the public and promoting health. For example, an organization formed exclusively to promote and market the services of its members or increase recognition of its members in the local community would not be considered charitable. Footnote 39

d. Health care products

48. Providing health care products to eligible beneficiaries can promote health. Eligible beneficiaries would generally be members of the public who require the health care products due to a physical or mental health condition.

49. Examples of purposes that promote health by providing health care products to the public include:

  • Promoting health by providing affected populations with health care products that:
    • prevent or relieve a health condition;
    • prevent and reduce serious threats to survival and health; or
    • respond to large-scale emergencies.

50. Examples of activities that could directly further purposes that promote health by providing health care products include:

  • buying and distributing drugs or medical devices for use inside or outside Canada; Footnote 40
  • selecting medicines to ensure they meet the expressed needs in the recipient countries and are relevant to the disease pattern in the recipient country, and ensuring that quantities do not exceed identified needs in the recipient countries;
  • presetting, packaging and labeling medicines in a language that is easily understood by health service providers in recipient countries; or
  • monitoring and evaluating medicine distribution programs to help prevent the continuation or repetition of inefficient or harmful medicine distribution, and modifying, adjusting, forecasting and improving the management of such programs.

51. To promote health, all health care products must be shown to meet the applicable requirements relating to effectiveness set out in Appendix A, and to quality and safety set out in Appendix C.

C. Special topics

Complementary or alternative health care

52. Complementary or alternative health care services and products that are eligible for coverage for individuals with an identified health condition under the Canada Health Act, Footnote 41 or for coverage under any provincial or territorial medical insurance service plan in Canada will generally be considered by the CRA as meeting requirements relating to effectiveness set out in Appendix A, but must be shown to meet the applicable requirements relating to quality and safety as set out in Appendix B and Appendix C.

53. Otherwise, a complementary or alternative health care service or product will only be recognized as furthering a charitable purpose if it can be shown to directly prevent or relieve a physical or mental health condition by meeting the applicable requirements relating to effectiveness, and quality and safety set out in this guidance.

54. Examples of complementary or alternative health care services and products could include the following:

  • mind‑body techniques (meditation, acupuncture);
  • manipulative and body‑based therapies (osteopathy, massage therapy);
  • traditional programs and whole medicine systems (Chinese medicine, Ayurvedic medicine);
  • energy‑based systems (spiritual healing);
  • certain medical services or products; or
  • natural health products (including dietary supplements and herbal medicines).

Physical fitness and wellness

55. Encouraging and facilitating physical fitness in the general sense and encouraging and facilitating public participation in physical activities that further physical fitness may promote health based on the established relationship between physical fitness and good health. Footnote 42 However, Canadian courts have not recognized purposes that promote sport as being charitable. Footnote 43 For more information on health and sports, see Policy Statement CPS‑027, Sports and Charitable Registration.

56. The facilities, programs and activities used to encourage and facilitate physical fitness must always be designed to develop general physical fitness directly, as opposed to doing so indirectly or as a by-product, and be available to the general public (not being limited based on skill level or unduly exclusionary participation costs). To meet the public benefit requirement, it is also necessary for the organization to establish the necessary and reasonably direct link between the purpose and the activities that will be conducted to further the purpose. If any health related benefit (such as preventing future illness or disease) is too remote, it will not deliver the required charitable benefit. For more information, see Policy Statement CPS-024.

57. For example, techniques that seek to optimize quality of life, such as yoga or meditation may be activities that further a promotion of health purpose where they are shown to eliminate the presence of, or reduce the symptoms related to, an identified health condition, such as, when the technique assists with the rehabilitation of eligible beneficiaries. The technique must be provided exclusively as a health care service for eligible beneficiaries with an identified physical or mental health condition. It must also meet the applicable requirements relating to effectiveness as set out in Appendix A, and quality and safety set out in Appendix B and Appendix C.

58. Promoting a technique to the general public that focuses on achieving well-being is generally not considered as directly furthering a promotion of health purpose. Optimizing quality of life by focusing on general well-being does not promote health in the charitable sense because any potential health related benefit (such as preventing future illness or disease) is too remote.

59. Most commonly, encouraging and facilitating physical fitness may advance core health care purposes.

60. Examples of core health care purposes that may be advanced by physical fitness include:

  • protecting and maintaining public health by:
    • preventing the initial occurrence of [specify health condition];
    • slowing the progression rate, or reducing the existing effects of [specify health condition];
    • encouraging and facilitating general physical fitness by providing public sport and recreational facilities; Footnote 46 or
    • encouraging and facilitating general physical fitness by providing public fitness programs and opportunities.

61. Examples of physical activities that might directly further purposes that promote health by encouraging and facilitating general physical fitness include:

  • creating and maintaining a public multi-use sports field; or
  • creating and delivering a physical activity program to school age children.

Providing information as a charitable activity

62. Raising awareness about a charity or a charity’s programs is not, as a rule, a charitable activity because it does not directly provide sufficient charitable public benefit. Similarly, simply raising awareness about an issue or problem that a charity seeks to address, such as a health concern, is not a charitable activity. Footnote 45

63. In order for the provision of health information to further a promotion of health purpose, it must enable actions or behaviours that, if carried out by the public, would directly further that charitable purpose. Footnote 46 , Footnote 47

64. To directly further a promotion of health purpose, an activity that provides health information to the public must satisfy all the following criteria:

Content: The information given enables the audience to take specific actions or adopt specific behaviors that will directly promote health. This means the information must be reasonably unbiased, factual and sufficiently detailed. Additionally, the information encourages the audience to take the specific actions or adopt the specific behaviors described.

Audience: The information targets an audience that can reasonably be expected to take action to directly further the purpose.

Distribution: The information can reasonably be expected to reach the target audience. Simply making the information available to the public (for example, via a website) is not sufficient. There must be active and targeted dissemination to ensure the audience receives the information.

65. For example, when developing pamphlets for persons interested in quitting smoking, the information must be detailed and factual. Pamphlets distributed in health clinics that explain:

  • the health risks associated with smoking;
  • the specific steps to quit (based on medically proven methods); and
  • promote community resources (such as support groups or individual counseling)

would likely meet these criteria. Also, providing information on how to obtain services such as addiction counseling provided by a charity to the community it serves would meet these criteria. On the other hand, simply posting statistics on the number of lung cancer deaths caused by cigarette smoking on a website is not enough.

66. In some cases, disseminating information that does not meet the content requirement explained in the previous paragraph may be a charitable activity if the information disseminated:

  • meets the audience and distribution requirements; and
  • directs readers to resources of the charity that do meet the content requirement, such as detailed publications or webpages.

67. For example, posting concise information on the limited space available on public transportation that identifies the symptoms of a specific health condition which can reasonably be expected to affect riders and directs readers to the charity’s detailed information sources may be charitable.

68. Generally, an organization will be expected to take steps to make the provision of existing publicly available information its own activity Footnote 48 by having input into the content. For example, a charity may write its own content; or adapt, or add to, content created by others to meet its specific needs.

69. When an organization does not have input into the content, it should be able to explain why the re‑circulation of otherwise available information should be considered to meet the own activities requirement. Creating a website that simply re-posts existing health information or refers readers to other websites is not a dissemination of information activity that furthers a promotion of health purpose. In this situation, the organization does not have any input into the content of the information and is simply re‑circulating information that is otherwise available.

70. However, this does not prevent a charity from re‑circulating existing information as an incidental activity when furthering its promotion of health purposes.

71. Since the purpose being furthered must be charitable, providing information that promotes fundraising, or fundraising‑related behaviours, such as donating to a cause does not constitute a charitable activity. For more information on fundraising activities, see Guidance CG-013, Fundraising by Registered Charities.

Providing medical clinics

72. Providing a medical clinic may be a charitable activity when it directly furthers a promotion of health purpose.

73. As a general rule, in order to meet the public benefit requirement, the services or products of a medical clinic must be available to the public at large. Any restriction on eligible beneficiaries must be justified based on the particular charitable purpose. Footnote 49 For example, a medical clinic specializing in prostate cancer may justifiably limit its services to men that are or may be afflicted with that health condition.

74. Medical clinics, like all charities, must ensure that their activities do not result in the provision of an unacceptable private benefit.

75. Examples of unacceptable private benefit in this context might include:

  • paying salaries/wages or paying for services or products, at rates that are more than fair market value;
  • paying for expenses or providing bonuses that are not required to perform duties;
  • using the services, materials, facilities or businesses of third parties; directors/trustees, members or staff; or persons/entities who do not deal at arm’s length with directors/trustees, members or staff, without an open and fair selection process and/or justification; or
  • promoting the work, services or businesses of persons or entities where such promotion is not incidental to achieving a charitable purpose.

For more information, see Policy Statement CPS-024.

Providing health care services in underserviced areas or areas of social and economic deprivation

76. The public benefit requirement prohibits the delivery of an unacceptable non‑incidental private benefit. What is considered to be incidental is fact based and may vary depending on the circumstances. Footnote 50 Therefore, acceptable private benefits in underserviced areas Footnote 51 or in areas of social and economic deprivation Footnote 52 may be greater than what would be acceptable in other areas.

Charging fees

77. A charity can charge fees for health care services or products that directly further promotion of health purposes, as long as this is not done to further a profit purpose. Footnote 53 Concerns may also arise if the fees exclude members of the public to the extent that the purpose would not be considered to provide a benefit to the public or a sufficient section of the public. Whether members of the public are excluded from receiving a benefit, and whether an exclusion is to the extent that the purpose does not deliver a public benefit, are questions that will be decided based on the facts in each case.

78. Factors that will be taken into account include whether or not:

  • there is a sufficient general benefit to the community, directly or indirectly, from the existence of the service;
  • the charges are set at a level that deters or excludes a substantial proportion of those people who could potentially be served by the organization;
  • the charges are reasonable in the circumstances and typically not in excess of cost recovery. (Exceptionally, charges may, if appropriate to the overall purposes of the charity, be set at a rate that generates a surplus to help fund the organization’s charitable programs and activities for the benefit of the public.); and
  • there are mechanisms in place to assist the poor to obtain the benefit.

79. Registered charitable organizations and public foundations can also charge fees for health-related services or products that do not further a charitable purpose when doing so constitutes a related business activity. For more information about fees and charges, see Policy Statement CPS-019, What is a Related Business, and Policy Statement CPS‑024.

D. Health-related activities that further other charitable purposes

80. Most health‑related activities directly further promotion of health purposes. However, some health‑related activities may further purposes that relieve poverty, advance education or advance religion. These health-related activities will be considered charitable if they directly further a charitable purpose Footnote 54 and meet all associated legal requirements.

Health-related activities that further relief of poverty purposes

81. The relief of poverty in the charitable sense means providing relief to the poor. Footnote 55 Many health-related activities directly further relief of poverty purposes.

82. Eligible beneficiaries of relief of poverty purposes must be limited to the poor. For more information see Policy Statement CPS-024.

83. Examples of health‑related activities that could directly further relief of poverty purposes include:

  • operating mobile clinics that deliver health care services to victims of natural disasters;
  • providing eye glasses in developing countries; or
  • distributing mosquito nets in countries where malaria occurs.

Health-related activities that further advancement of education purposes

84. The advancement of education in the charitable sense includes formally training the mind, advancing the knowledge or abilities of the recipient, or improving a useful branch of human knowledge.

85. To further advancement of education purposes, teaching and training activities must be sufficiently structured, have a teaching or learning component, and involve a legitimate, targeted attempt to educate.

86. Eligible beneficiaries of advancement of education purposes would generally be the public at large, unless a restriction can be justified. For more information see Policy Statement CPS-024.

87. Examples of health-related activities that could directly further advancement of education purposes include:

  • teaching or training doctors, nurses, medical technicians or other health care providers; or
  • providing professional development opportunities such as mentoring programs.

88. Organizations providing teaching or training relating to the provision of health care services or products must show that any health care services or products provided to patients as part of the educational activity meet the requirements relating to effectiveness set out in Appendix A, and quality and safety set out in Appendix B and Appendix C.

89. Health‑related research Footnote 56 may also further advancement of education purposes.

90. Examples of health-related research activities that could directly further advancement of education purposes include:

  • conducting research into causes and possible treatments Footnote 57 of [specify condition] and making the results publicly available; Footnote 58 or
  • conducting clinical trials of drugs or natural health products.

91. Organizations conducting research should see Policy Statement CPS‑029 for information on the legal and administrative requirements associated with conducting or funding research as a charitable activity. Footnote 59

Health-related activities that further advancement of religion purposes

92. The advancement of religion in the charitable sense means manifesting, promoting sustaining and increasing belief in a religion’s three key attributes; namely, faith in a “higher unseen power” such as a God, Supreme Being or Entity; worship or reverence; and a particular and comprehensive system of doctrines and observances. There must be a clear and material connection between the activity and the religion’s key attributes to constitute advancement in the charitable sense. Footnote 60

93. Eligible beneficiaries of advancement of religion purposes are usually the public at large or a sufficient segment of the public. However, adherents of a particular religion may form a sufficient segment of the public under this charitable category. For more information see Policy Statement CPS-024 .

94. Generally, health‑related activities may directly further advancement of a religion in two contexts:

  • When health care is provided to the public as an activity that promotes the doctrines of a religion. For example, a hospital operated by a religious organization can advance religion if the organization can show that helping the sick by providing health care service or products is clearly and materially connected to its religious doctrine, is a reasonable means of advancing that doctrine, and is being undertaken as a component of the advancement of the religion as a whole. The public must also be able to make the link between the operation of the hospital and the religion being advanced. Footnote 61
  • When health care is provided to current or retired religious staff in support of religious contribution or service (past, current or future). For example, a religious order with purposes to advance religion operates a medical clinic for its current or retired religious staff. Footnote 62

Appendix A. Requirements relating to the effectiveness of preventing or relieving a mental or physical health condition

1. Health care services and products used to prevent or relieve a health condition must be shown by an organization Footnote 63 to be effective at eliminating the presence of or reducing the symptoms related to, that health condition. Decisions will be made on a case‑by‑case basis, following a review of all available relevant information.

2. In the absence of evidence to the contrary, health care services and products that are normally eligible for coverage for individuals with an identified health condition under the Canada Health Act or any provincial or territorial medical insurance service plan in Canada, will generally be considered as meeting the requirements relating to effectiveness as set out in this Appendix.

3. For health care services and products that require further proof of effectiveness, the following indicators may show the effectiveness of a health care service or product for individuals with an identified health condition, in the absence of evidence to the contrary.

A1) Is the effectiveness of the health care service or product for individuals with the identified health condition clearly recognized by Canadian provincial, territorial or federal health authorities, or by the Canadian Medical Association?

To meet this requirement, the organization must show that:

A) The effectiveness of the health care service or product has been recognized for individuals with the identified health condition by Health Canada, or a provincial or territorial health authority in Canada.

or

B) The effectiveness of the health care service or product has been recognized for individuals with the identified health condition by the Canadian Medical Association.

If yes to either A) or B), the requirements relating to effectiveness will generally be met. Continue to requirements relating to quality and safety in Appendix B and Appendix C.

If no, go to question A2.

A2) Is the effectiveness of the health care service or product for individuals with the identified health condition clearly recognized by specialized medical physicians?

To meet this requirement, the organization must show that the effectiveness of the health care service or product for individuals with the identified health condition is recognized for individuals with the identified health condition by at least three physicians with a specialty or certification in the identified health condition or area of medicine, who are licensed to practice medicine in Canada, and not affiliated with the organization, and each other. Examples of documentation that specialized medical physicians could provide to substantiate their position could include:

  • An overview of their expertise, qualifications and credentials in the specialized health discipline that qualifies them to treat individuals with the identified health condition.

  • A summary of clinical observations related to using the identified health care service for individuals with the identified health condition, including evidence of effectiveness.

  • Reference to evidence‑based clinical guidelines that support the health care service for individuals with the identified health condition (for example, outcomes databases such as: Cochrane Collaboration, National Guideline Clearinghouse). 

    Note: The CRA may consult, and rely upon other sources of information in addition to the documentation provided by specialized medical physicians.

If yes, the requirements relating to effectiveness will generally be met. Continue to requirements relating to quality and safety in Appendix B and Appendix C.

Appendix B. Quality and safety requirements relating to a health care service provider

1. To provide the required public benefit, a health care service provider must meet the quality and safety requirements relating to a health care service provider. In all cases, the onus is on the organization to demonstrate that its health care service providers are competent and able to provide safe health care services that are of sufficient quality when compared to those routinely provided within the Canadian health care system. For example, an organization diagnosing and treating medical conditions must ensure that its health care service providers are legally authorized to do so. The evidence needed to meet the quality and safety requirements relating to a health care service provider will be assessed based on the facts of each case, taking into account the nature of the health care service and all other relevant circumstances and information.

2. In general, the quality and safety requirements relating to a health care service provider will be met if the health care service is provided by a regulated health care service provider Footnote 64 licensed to practice in Canada. For organizations providing health care services outside of Canada, health care service providers will be expected to possess a current registration/license with a relevant national and/or professional body.

3. To demonstrate the quality and safety requirements relating to a health care service provider, organizations are expected to provide proof that the health care service provider’s membership with the applicable professional licensing body is in good standing. Organizations that have yet to operate should indicate how they will meet the quality and safety requirements relating to a health care service provider during the application process.

4. Some health care service providers, including many complementary or alternative health care service providers, may not be professionally licensed or regulated in the jurisdiction in which the organization carries on its activities. In such cases, the onus is on the organization to demonstrate how it meets the quality and safety requirements relating to a health care service provider and provides a charitable benefit to the public, in the absence of a professional, regulatory body.

5. The following indicators can be used to assess whether the quality and safety requirements relating to a health care service provider are met. For complementary or alternative health care services provided by non‑regulated health care service providers, meeting these requirements will depend on the evidence provided under indicators B2) A), B) and C).

B1) Is the health care service provider currently licensed and in good standing with a professional regulatory body in Canada?

A) The health care service provider received credentials from an accredited public institution of higher learning in Canada (such as a university or college), and is currently licensed (in good standing) with a relevant professional regulatory body in the jurisdiction in which the health care service will be provided (inside or outside of Canada?); Footnote 65 or

B) The health care service provider received credentials from an accredited public institution of higher learning in Canada (such as a university or college), and is currently licensed (in good standing) with a relevant professional regulatory body outside the jurisdiction in which the health care service will be provided (but within Canada).

If yes, the quality and safety requirements relating to a health care service provider will generally be met.

If no, proceed to question B2.

B2) Is the unlicensed health care service provider providing health care services that are within acceptable parameters?

Is there objective evidence of common or widespread acceptance by persons who are knowledgeable and informed about the knowledge, skills and abilities required of health care service providers providing the same or similar services that:

A) the health care service provider has a reasonable degree of skill and knowledge, and will exercise the degree of care, skill and knowledge which would reasonably be expected of a normal, prudent practitioner of the same experience and standing Footnote 66 when providing the same or comparable health care services or products; and

B) the health care service provider is operating in an appropriate setting (depending on the nature of the health care service, this could mean a sanitary or confidential environment), based on the standard of care reasonably required of a health care service provider in that profession or area of practice; and

C) risks are being appropriately mitigated through protocols that are in place to ensure safety, and respond to adverse reactions/accidents, emergencies, negative or undesirable outcomes, and errors, based on the standard of care reasonably required of a health care service provider in that profession or area of practice.

6. In all cases, the evidence must establish that the benefit resulting from the health care service outweighs the risk of negative or undesirable effects (that is; there must be a substantial net public benefit). Footnote 67

Appendix C. Quality and safety requirements relating to a health care product

1. To deliver the required public benefit, health care products must meet the quality and safety requirements relating to a health care product. In all cases, the onus is on the organization to demonstrate that its health care products meet the applicable quality and safety requirements. Decisions will be made on a case‑by‑case basis, following a review of all available relevant information.

2. In the absence of evidence to the contrary, the following may be indicators that a health care product satisfies the quality and safety requirements relating to a health care product.

Medical devices

i. Medical devices used, distributed or sold in Canada

3. Class II, III and IV medical devices for use, distribution, or sale in Canada that meet current licensing requirements of the Therapeutic Products Directorate (TPD) Footnote 68 will generally be considered to meet the quality and safety requirements relating to a health care product (in the absence of evidence to the contrary). This standard applies whether the device is manufactured inside or outside Canada.

C1) Is the medical device a Class I medical device, or does the medical device appear on the Medical Device Active Listing (MDALL) ?

If yes, go to C9.

If no, the quality and safety requirements relating to a health care product used, distributed or sold in Canada have not been met.

ii. Medical devices used, distributed or sold outside Canada

4. Medical devices for use, distribution or sale outside Canada that meet current licensing requirements of the TPD will generally be considered to meet the quality and safety requirements relating to a health care product (in the absence of evidence to the contrary). This standard applies whether the device is manufactured inside or outside Canada.

C2) Does the medical device appear on the Medical Device Active Listing (MDALL) ?

If yes, go to C9.

If no, go to C3.

C3) Does the medical device meet all applicable national and international medical device standards recognized by the TPD, or all applicable International Standards recognized by four out of five regions/countries of the International Medical Device Regulators Forum (IMDRF)?

If yes, go to C9.

If no, the quality and safety requirements relating to a health care product used, distributed or sold outside Canada have not been met.

Drugs used or distributed in Canada

5. Drugs used in Canada that have a Drug Identification Number (DIN), and are used in a manner that is consistent with authorized conditions of use Footnote 69 will generally be considered to meet of the quality and safety requirements relating to a health care product (in the absence of evidence to the contrary).

C4) Does the drug appear on the Drug Product Database, Footnote 70 is it used in a manner that is consistent with authorized conditions of use, and does it meet Health Canada regulations concerning issues such as manufacturing, transporting, storing, importing, exporting, distribution, testing and disposal?

If yes, go to C10.

If no, the quality and safety requirements relating to a health care product have not been met.

Drugs used or distributed outside Canada

6. Drugs distributed for international development assistance or emergency aid in compliance World Health Organization (WHO) Footnote 71 Guidelines will generally be considered to satisfy quality and safety requirements relating to a health care product (in the absence of evidence to the contrary).

C5) Does the drug appear on a WHO Model List of Essential Medicines , and is the drug used or distributed in a manner consistent with the principles and objectives of the Guidelines for Medicine Donations issued by the WHO?

If yes, go to C10.

If no, the quality and safety requirements relating to a health care product have not been met.

Natural health products

C6) Is the natural health product in the Licensed Natural Health Products Database Footnote 72 and does the natural health product meet Health Canada regulations concerning issues such as manufacturing, transporting, storing, importing, exporting, distribution, testing and disposal?

If yes, go to C11.

If no, go to question C7.

C7) Does the natural health product have either a Natural Product Number (NPN) or a Homeopathic Medicine Number (DIN‑HMN), Footnote 73 and does it meet Health Canada regulations concerning issues such as manufacturing, transporting, storing, importing, exporting, distribution, testing and disposal?

If yes, go to C9.

If no, go to question C8.

C8) Has the natural health product been reviewed positively on the Pre‑Cleared Information (PCI) database or the Natural Health Products Ingredients Database , Footnote 74 and does it meet Health Canada regulations concerning issues such as manufacturing, transporting, storing, importing, exporting, distribution, testing and disposal?

If yes. Go to C11.

If no, quality and safety requirements relating to a health care product have not been met.

Recalls, advisories, and warnings

C9) Does the medical device appear in a Health Canada recall, advisory, and warning?

Go to Health Canada’s Medical Device Recall Listings and Health Canada’s archived Recalls and Safety Alerts Database .

If the medical device is not subject to an advisory, warning or recall, the quality and safety requirements relating to a medical device have been met (in the absence of evidence to the contrary).

C10) Does the drug appear in a Health Canada recall, advisory or warning?

Go to MedEffect™ Canada and Health Canada’s archived Recalls and Safety Alerts Database.

If the drug is not subject to an advisory, warning or recall, the quality and safety requirements relating to drug have been met (in the absence of evidence to the contrary).

C11) Does the natural health care product appear in a Health Canada recall, advisory or warning?

Go to MedEffect™ Canada and Health Canada’s archived Recalls and Safety Alerts Database.

If the natural health product is not subject to an advisory, warning or recall, the quality and safety requirements relating to a health care product have been met (in the absence of evidence to the contrary).

Footnotes

Footnote 1

The only qualification relates to purposes which are merely incidental to other charitable purposes—better construed as activities in direct furtherance of a charitable purpose. The organization will not fail to qualify as charitable because it described such an activity as a purpose. See Vancouver Society of Immigrant & Visible Minority Women v Minister of National Revenue, [1999] 1 S.C.R. 10 (Vancouver Society) per Iacobucci J. for the majority at para. 158, and generally, at paras. 155-159.

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Footnote 2

The Income Tax Act does not define what is charitable. See subsection 248(1) “registered charity;” subsection 149.1(1) “charitable foundation,” “charitable organization,” “private foundation,” and “public foundation.” These definitions use the term “charitable” but do not define it (for example, charitable foundations are to be “constituted and operated exclusively for charitable purposes,” and charitable organizations’ resources must be “devoted to charitable activities.” The single exception is subsection 149.1(1) which defines charitable purposes as including “the disbursement of funds to qualified donees.”

The Canada Revenue Agency (CRA) must therefore rely on the common law (case law, or court decisions) definition, which sets out the four broad categories (also called “heads”) of charity. The four broad charitable purposes categories were outlined by Lord Macnaghten in Commissioners for Special Purposes of the Income Tax v Pemsel, [1891] A.C. 531 (P.C.) (Pemsel). The classification approach was first explicitly approved of by the Supreme Court of Canada in Guaranty Trust Co. of Canada v Minister of National Revenue, [1967] S.C.R. 133, and confirmed in the more recent Supreme Court of Canada decision in Vancouver Society, supra note 1.

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Footnote 3

See, for example, McGovern v. A.G., [1981] 3 All E.R. 493; and Vancouver Society, supra note 1 per Iacobucci J. at para. 147: “This public character is a requirement that attaches to all the heads of charity, although sometimes the requirement is attenuated under the head of poverty...”

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Footnote 4

See Vancouver Society, supra note 1 per Iacobucci J at para. 159. The activities of an organization are the ways in which it furthers its purposes. A charitable activity is one that directly furthers a charitable purpose. The limited exceptions relate primarily to certain political activities that falls within the specific exemptions of s. 149.1(6.1), or (6.2) of the Income Tax Act. In addition, a charity may devote resources to incidental activities that, while not themselves charitable, are undertaken to accomplish its charitable purposes (for example, expenditures on fundraising, and administration). However, any resources devoted to non-charitable activities must be within acceptable legal parameters, and must not themselves become purposes.

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Footnote 5

In Re Osmund, [1944] Ch. 206 (C.A.).

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Footnote 6

Providing health care includes defraying the costs of health care services or products, including those that exceed the amounts covered by provincial health care plans, or any other insurance plans.

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Footnote 7

The term “medical device” covers a wide range of products used in the treatment, mitigation, diagnosis or prevention of a disease or abnormal physical condition. Some examples include pacemakers, artificial heart valves, hip implants, synthetic skin, medical laboratory diagnostic instruments, test kits for diagnosis and contraceptive devices. Also go to Medical Devices Regulations, SOR/98-282.

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Footnote 8

Go to Food and Drug Regulations, C.R.C., c. 870.

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Footnote 9

Go to Natural Health Products Regulations, SOR/2003-196.

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Footnote 10

All products used, distributed, administered, or prescribed during the course of providing a service (for example, equipment used in a medical clinic), or as a result of providing a service (for example, drugs prescribed by a physician) must also meet the requirements related to effectiveness, and quality and safety.

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Footnote 11

An exception applies, for example, to diagnostic services or products. For diagnostic services or products effectiveness refers to the capacity to properly identify the presence of a health condition and determine which health care services or products could be effective in eliminating or reducing the symptoms related to the identified health condition.

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Footnote 12

A health condition does not always need to be adverse in nature (for example, pregnancy).

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Footnote 13

For more information about net benefit, see Policy Statement CPS-024, Guidelines for Registering a Charity: Meeting the Public Benefit Test .

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Footnote 14

See Everywoman's Health Centre Society (1988) v. Minister of National Revenue (Everywoman’s Health), [1991] 2 C.T.C. 320, [1992] 2 F.C. 52 (Everywoman’s Health) per Décary, J.A., holding that the provision of health care is prima facie charitable; In re Resch's Will Trusts, [1969] 1 A.C. 514 (P.C.); In re Smith, decd., [1962] 1 W.L.R. 763, [1962] 2 All E.R. 563 (C.A.).

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Footnote 15

The eligible beneficiaries of promotion of health purposes under the fourth category are not restricted the poor. As such, the selection of beneficiaries should not be based on financial criteria. An organization that wants to restrict it beneficiaries to the poor would need to be constituted with purposes that relieve poverty.

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Footnote 16

See Vancouver Society, supra note 1 per Gonthier J. (dissenting in the result) at para. 41; In Re Coats' Trusts Coats v. Gilmour, [1948] Ch. 340 (CA) (In Re Coats' Trusts) per Lord Greene M.R. at p. 347; Gilmour v. Coats et al, [1949] A.C. 426 (HL) (Gilmour); Scottish Burial Reform and Cremation Society Ltd v. Glasgow Corporation, [1968] A.C. 138 per. Lord Reid at para. 146E; and M. Chesterman, Charities, Trusts and Social Welfare (London: Weidenfeld and Nicolson, 1979) at p. 136.

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Footnote 17

See National Anti-Vivisection Society v. I.R.C., [1947] 2 All ER 217, [1948] A.C. 31 (HL) (National Anti-Vivisection Society) per Lord Wright at p. 49. See also Everywoman's Health Centre Society (1988) v. The Queen, [1992] 2 FC 52 (Everywoman’s Health) per Decary J. at para. 16; Decision of the Charity Commissioners for England and Wales (17 November 1999) Application for Registration as a Charity by the Church of Scientology (England and Wales) at p. 38 and p. 45; and Decision of the Charity Commission for England and Wales (August 15, 2000), Application for Registration of National Federation of Spiritual Healers (NFSH) Charitable Trust Limited, at para. 7.3.

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Footnote 18

See, for example, In Re Coats' Trusts, supra note 16 per Lord Greene; Gilmour, supra note 16, per Lord Reid at p. 462; Re Pinion (deceased); Westminster Bank v. Pinion and another, [1964] 1 All ER 890 (Re Pinion) per Harmon L.J at pp. 893-894; National Anti-Vivisection Society, supra note 17 per Lord Wright at p. 42; In re Shaw decd, [1957] 1 All ER 745 (In re Shaw decd ) per Harman J. at pp. 754-755; In re Price, Midland Bank Executor and Trustee Company, Limited v. Harwood, [1943] Ch. 422 (Ch.D.) (Re Price) per Cohen J. at pp. 430-431; and Attorney-General v. Charity Commission (The Poverty Reference), FTC/84/2011 20th February 2012 at paras. 32 and 66-67.

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Footnote 19

See, for example, National Anti-Vivisection Society, supra note 17 per Lord Wright at p. 49: “The law may well say that quite apart from any question of balancing values, an assumed prospect, or possibility of gain so vague, intangible and remote cannot justly be treated as a benefit to humanity, and that the appellant cannot get into the class of charities at all unless it can establish that benefit.” See also, for example, In re Shaw decd, supra note 18 (the promotion of a new alphabet); Gilmour, supra note 16 per Lord Simonds at p. 446-447; McGovern v. AG, supra note 3CA (where the court held it could not assess the benefit “of a change to the law or government policy”, which thus failed to demonstrate benefit.); and Re Co-operative College of Canada v. Saskatchewan Human Rights Commission, (1976) 64 D.L.R. (3d) 531(Re Co-operative College) per Bayda J. at paras. 19-20.

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Footnote 20

See, for example, In re Grove-Grady, Plowden v. Lawrence, [1929] 1 Ch. 557 per Russell L.J. at p. 588: “In my opinion, the Court must determine in each case whether the trusts are such that benefit to the community must necessarily result from their execution.” See also National Anti-Vivisection Society, supra note17; I.R.C. v. Oldham Training and Enterprise Council, [1996] B.T.C. 539 (Oldham Training); Gilmour, supra note 16 per Lord Simonds at p. 446-447; Re Pinion, supra note 18.

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Footnote 21

See, for example, Pemsel, supra note 2 at p. 583; Oldham Training, supra note 20; Gilmour, supra note 16 per Lord Simonds at pp. 446-447; Hadaway v. Hadaway, [1954] 1 W.L.R. 16 (P.C.); Re Co-operative College, supra note19; In Re Resch's Will Trusts And Others v. Perpetual Trustee Co. Ltd., [1969] 1 A.C. 514 (P.C.) (In Re Resch) at p. 544; Canterbury Development Corporation v. Charities Commission; Canterbury Development Corporation Trust v. Charities Commission; CEDF Trustee Limited as Trustee of the Canterbury Economic Development Fund v. Charities Commission, [2010] NZHC 331 (Canterbury Development Corporation).

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Footnote 22

For more information see Policy Statement CPS-024.

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Footnote 23

When an organization provides health care by paying the costs of health care services or products provided by a third party, then the services or products provided by the third party must meet the requirements related to effectiveness, and quality and safety.

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Footnote 24

R.S.C., 1985, c. C-6.

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Footnote 25

This only applies when services or products are used in a manner consistent with their eligibility for coverage. For example, treating necrotizing soft tissue infections (flesh-eating disease) with a hyperbaric oxygen therapy would meet requirements relating to effectiveness (in the absence of evidence to the contrary). However, in the cases of migraine, or multiple sclerosis, the use of a hyperbaric oxygen therapy would need to meet the requirements relating to effectiveness as set out in Appendix A.

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Footnote 26

See, for example, Davies v. Perpetual Trustee Company, [1959] A.C. 439 at p. 456; IRC v. Baddeley, [1955] A.C. 572 at p. 615; Vancouver Society, supra note 1 per Iacobucci J. at para. 147; Dingle v. Turner, [1972] A.C. 601 at pp. 623-624; and Gilmour, supra note 16, at p. 449.

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Footnote 27

For more information about private benefit, and about public benefit generally, see Policy Statement CPS-024.

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Footnote 28

Diagnosis includes assessing or evaluating health conditions.

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Footnote 29

See, for example, In Re Weir Hospital, [1910] 2 Ch. 124 (C.A.) (dispensary, hospital, convalescent home); In Re Isabel Joanna James, Grenfell v. Hamilton , [1932] 2 Ch. 25 (Ch. D.) (Re James) (establish, or maintain clinics, hospitals, and convalescent/rest homes); Attorney-General v. Kell, (1840) 48 E.R. 1305 (Ch. D.) (hospital for smallpox, or other infectious conditions); In re Resch's Will Trusts, [1969] 1 A.C. 514 (P.C.); In re Smith, decd., [1962] 1 W.L.R. 763, [1962] 2 All E.R. 563 (C.A.); McGregor v Commissioner of Stamp Duties [1942] N.Z.L.R. 164 (New Zealand) (promotion of the scientific study of obstetrics and gynaecology and/or promotion of maternal welfare through education of medical personnel and patients and through taking practical steps in conjunction with the Health Department); Re Hillier [10 [1944] 1 All ER 480; Re Welsh Hospital (Netley) Fund, [1921] 1 Ch. 655.

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Footnote 30

As long as a research activity could reasonably lead to the discovery or improvement of available knowledge, research can further a charitable purpose. This means that research activity must:

  • represent a way to achieve or further the charity’s charitable purpose;
  • be based on a subject that has educational value and a research proposal that is capable of being attained through research;
  • be conducted in such a way that it might reasonably lead to the discovery or improvement of knowledge;
  • be conducted primarily for the public benefit that could arise from it and not for self‑interest or for private commercial consumption; and
  • be disseminated and made publicly available to others who might want to access the information.

Organizations funding or conducting research, or that plan to do so, should see Policy Statement CPS‑029, Research as a Charitable Activity for information on the legal and administrative requirements associated with research as a charitable activity.

Note: To further a charitable purpose, any research activity that is conducted or funded involving human subjects or animals must be assessed at the outset, to determine whether any ethical questions arise (for more information, see Policy Statement CPS‑029 and Guidance CG‑011, Promotion of Animal Welfare and Charitable Registration).

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Footnote 31

See the section called Providing information as a charitable activity.

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Footnote 32

See, for example, In re Adams, Decd. Gee v. Barnet Group Hospital Management Committee and Others, [1968] Ch. 80 (C.A.) (funds for medical, and hospital equipment, extra amenities for patients in hospitals); Re Roadly, Iveson v Wakefield,[1930] 1 Ch 524 (expenses for maintenance of hospital patients); Re James, supra note 29 (establish, or maintain convalescent/rest home); Re Andrae Estate Sims et al v. Public Trustee et al, (1967) 61 WWR 182 (Alta SC) (providing support to unmarried mothers); Re Chaplin, Neame v. A-G, [1933] Ch 115 (providing a home of rest to afford recuperation from strain).See also, generally, In Re Hood. Public Trustee v. Hood, [1931] 1 Ch. 240, (C.A.) (where the Court commented that providing counselling and treatment for alcohol addiction is charitable in its own right).

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Footnote 33

For more information, see Policy Statement CPS-024.

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Footnote 34

See, for example, Re Dean’s Will Trusts, Cowan v. Board of Governors of St Mary’s Hospital, Paddington, [1950] 1 All ER 882 (CH.D.) (funds for providing accommodation for relatives who come from a distance to visit patients critically ill in hospital); and Re Chaplin, Neame v. A-G, [1933] Ch. 115 (home of rest to afford means of recuperation from strain).

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Footnote 35

Such services may be considered factually analogous to those in aid of the sick, or disabled, by providing medical care, or to providing facilities, and equipment of practical utility to protect life such as lifeboats, and fire-fighting services. See cases cited supra at note 14 and infra at note 37.

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Footnote 36

Thomas v. Howell (1874), L.R. 18 Eq. 198 (national lifeboat association); Wilson v Barnes (1885), 38 Ch. D. 507 (repair of sea-dykes) – referenced in The Law and Practice Relating to Charities, 3rd ed. (1999), by Hubert Picarda, ch 10; Johnston v. Swann (1818) 3 Madd. 457, 56 E.R. 573 (provision for lifeboats); Richardson v. Mullery, (1908) 200 Mass. 247, 86 N.E. 319, 1908 Mass. LEXIS 1039 (provision of lifeguards on beaches). See also Tudor on Charities by Warburton, Morris and Riddle (2003), pp. 103-108 (2-087) a trust to promote road safety (see The League of Highway Safety and Safe Drivers Ltd: Report, 1965, p. 27), or to prevent accidents generally is charitable.

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Footnote 37

In re Workingham Fire Brigade Trusts, Martin v. Hawkins, [1951] Ch 373 (Ch.D.).

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Footnote 38

See, for example, Royal College of Nursing v St. Marylebone Corporation, [1959] 3 All ER 663, [1959] 1 WLR 1077 (C.A.); Commissioner of Inland Revenue v Medical Council of New Zealand, [1997] 2 NZLR 297 (C.A.). Also, see the decision of the Charity Commission of England and Wales, General Medical Council [2001] Ch. Com. Dec., April 2.

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Footnote 39

For more information, see Policy Statement CPS-024 .

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Footnote 40

For more information about operating outside Canada, see Guidance CG-002, Canadian Registered Charities Carrying Out Activities Outside Canada.

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Footnote 41

Supra note 24.

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Footnote 42

See, generally, A.Y.S.A. Amateur Youth Soccer Association v. CRA et al, [2007] 3 S.C.R. 217 (S.C.C.) (A.Y.S.A.) per Rothstein J. for the majority at para. 40; Shillington v. Portadown UDC, [1911] 1 IR 247; Re Morgan, [1955] 1WLR 738UK Charity Commission in The Oxford Ice Skating Association Ltd., [1984] Ch. Com Rep 10-11at paras. 19-25.

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Footnote 43

This means that an organization with a purpose that promotes sport for its own sake cannot be registered as a charity, even though participation in the activity may result in improved health. As such, groups such as minor hockey leagues, do not further exclusively charitable purpose. For more information on health and sports, see Policy Statement CPS-027, Sports and Charitable Registration.

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Footnote 44

See, for example, In re Hadden, Public Trustee v. More, [1932] 1 Ch. 133 (Ch.D.); IRC v. Baddeley, [1955] 1 All ER 525 per Viscount Simonds at p. 532; Re Morgan, [1955] 1WLR 738.

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Footnote 45

A charitable activity is one that directly furthers a charitable purpose (see Vancouver Society, supra note 1 per Iacobucci J. for the majority at paras. 154, 187, and 195). A charity may engage in limited non‑charitable activities provided they are conducted within legal parameters, which include, but are not limited to, the requirements that they remain supportive of charitable activities, and ancillary, and incidental to charitable purposes, and do not deliver a non‑incidental private benefit.

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Footnote 46

The provision or dissemination of information is not a charitable purpose. See D’aguair v Guyana Commissioner of Inland Revenue, (1970) 49 A.T.C. 33, [1970] T.R. 31 P.C.).

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Footnote 47

It should be noted that activities that advance education have been held by common law to be subject to particular requirements. See Vancouver Society, supra note 1, and News to You Canada v Minister of National Revenue, 2011 FCA 192.

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Footnote 48

See Income Tax Act subsection149.1(1). Apart from making gifts to qualified donees, the Income Tax Act requires a registered charity to devote all its resources to charitable activities carried on by the organization itself. See also, generally, Vancouver Society, supra note 1, at para. 159.

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Footnote 49

Whether, or not a defined eligible beneficiary group will be acceptable as a sufficient segment of the public can vary depending on the purpose being furthered. For example, this part of the public test is less rigorously applied to purposes that relieve poverty, which have historically been allowed to have more narrowly defined beneficiary groups. For more information, see Policy Statement CPS-024.

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Footnote 50

For more information, see Policy Statement CPS-024.

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Footnote 51

In this guidance, “underserviced area” means any area designated as such by the Government of Canada, or by a provincial, or territorial government in Canada. For example, the Ontario Ministry of Health has a list of designated areas at Designated Areas for the Underserviced Area Program.

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Footnote 52

For a definition of “area of social, and economic deprivation” see Guidance CG-014, Community Economic Development Activities and Charitable Registration.

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Footnote 53

Re Smith’s Will Trusts, Barclays Bank Ltd v. Mercantile Bank Ltd, [1962] 2 All ER 563, [1962] 1 WLR 763 (C.A.)

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Footnote 54

See Vancouver Society, supra note 1 at paras. 154, 187 and 195.

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Footnote 55

The poor are not only the destitute, but anyone lacking essential amenities available to the general public. See Re Gardom, [1914] 1 Ch 662. See also Re Central Employment Bureau for Women and Students' Careers Association Inc, [1942] 1 All ER 232, and Re Gillespie, [1965] VR 402 (S. Ct. of Victoria) per Little J.: “Poverty need not be expressly mentioned in the terms of the gift for an unexpressed intention to relieve poverty may be inferred from the nature of the gift: see Halsbury, 3rd ed., vol.4, para.495, and cases there cited. In Re Lucas, [1922] 2 Ch 52, at p. 59; [1922] All ER Rep 317, Russell, J, after an examination of the authorities said: “But, if you can construe the gift in such a way as to hold that the testator meant that the persons to be benefited should be in necessitous circumstances, then that introduces the ingredient of poverty and will turn a gift which might otherwise be not a charitable gift into a good charitable gift.” The description of the persons to be benefited may point to poverty: see, for example, the emphasis placed in Re Coulthurst, [1951] Ch 661, [1951] 1 All ER 774, on the fact that the income was to be used for the benefit of “widows and orphaned children” of deceased officers and deceased ex-officers of the bank.”

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Footnote 56

Supra note 30.

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Footnote 57

Defraying the cost for subjects to participate in clinical trials would not further a promotion of health purpose, but could further a promotion of education purpose.

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Footnote 58

See Policy Statement CPS-029, Research as a Charitable Activity . Also, see Re Watson's Settlement Trusts; Dawson and Another v. Reid and Others, [1959] 2 All ER 676 (Ch.D.) (finding a cure for cancer, relief of human suffering); Royal College of Surgeons of England v. National Provincial Bank, [1952] A.C. 631 (to advance medical science).

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Footnote 59
Research of a drug, or medicine in Canada, must comply with the Food and Drug Regulations, section on Drugs for Clinical Trials Involving Human Subjects, and if it is for example, for research with diagnostics, or other medical devices, the research must comply with Medical Device Regulations, specifically the section on Medical devices for investigational testing involving human subjects.

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Footnote 60

See, for example, Keren Kayemeth Le Jisroel v. IRC, (1931) Vol X ATC, affirmed [1931] 2 KB 465 (C.A.), affirmed [1932] AC 650 (H.L.) (Keren Kayemeth); United Grand Lodge v. Holborn BC, [1957] 1 WLR 1080; Fuaran Foundation v. C.C.R.A., 2004 FCA 181.

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Footnote 61

See, for example, Keren Kayemeth, supra note 60.

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Footnote 62

See, for example, In Re James, supra note 29 (home of rest for religious sisters, clergy). In most cases, operating a not-for-profit nursing home for the benefit of the public at large furthers a fourth category purpose. Under the fourth category, it would not be possible to limit eligible beneficiaries to religious staff. Under the third category (advancing religion), a charity may limit the eligible beneficiary group (for example, to religious staff), and still meet the public benefit criteria. For more information, see Policy Statement CPS-024.

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Footnote 63

With respect to the onus of proof on the organization, see, generally, Enfant Recherche/Child Search v. The Minister of National Revenue, (1999) 99 DTC 5727 (FCA).

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Footnote 64

Medical and allied health care service providers (nurses, psychologists, registered dieticians, speech‑language pathologists, occupational therapists, etc.) licensed to practice in Canada are regulated by standards of practice. These standards are set by provincial, territorial, or federal legislation, and enforced by regulatory bodies to help protect public safety. Licensing is a strong indicator that quality service will be provided in a safe manner. Membership in professional associations is a good indicator as it often shows a commitment to professional development, and quality assurance within the health profession.

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Footnote 65

To verify the status of a health care service provider’s licence, refer to the provincial or territorial regulatory body for that profession. Most professional regulatory bodies (for example. medical doctors, registered nurses) post membership information online that is fully accessible to the public.

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Footnote 66

See, for example, Crits and Crits v. Sylvester et al., [1956] O.R. 132, at p. 143; ter Neuzen v. Korn, [1995] 3 S.C.R. 674 (S.C.C.) at para. 33 and 34; Durnin v. Victoria Hospital, 2012 ONSC 320 (OSCJ)

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Footnote 67

See Policy Statement CPS-024.

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Footnote 68

The Medical Devices Bureau of the Therapeutic Products Directorate of Health Canada is the national authority that monitors and evaluates the effectiveness, safety and quality of diagnostic and therapeutic medical devices in Canada. In accordance with TPD requirements, certain devices must have a Medical Device Licence before they can be sold. To determine which devices need a Medical Device Licence, all medical devices have been categorized into four classes based on the risk associated with their use, with Class I devices presenting the lowest potential risk (for example, thermometers) and Class IV devices presenting the greatest potential risk (for example, pacemakers). Class II, III and IV devices must obtain a Medical Device Licence prior to being sold in Canada. Class I devices do not require a Medical Device Licence, but they are monitored through Establishment Licences.

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Footnote 69

Authorized conditions of use are generally described in a Product Monograph. A Product Monograph is a factual, scientific document on a drug product that, devoid of promotional material, describes the properties, claims, indications and conditions of use of the drug and contains any other information that may be required for optimal, safe and effective use of the drug.

Drugs with lengthy market histories and an established safety profile may not have an associated Product Monograph. In such circumstances other information, such as package labels and inserts, prescribing information, or other drug information are produced and these must be consistent with authorized conditions of use.

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Footnote 70

Health Canada’s Drug Product Database contains product specific information on drugs approved for use in Canada.

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Footnote 71

For more information, go to WHO Guidelines for medicine donations, and WHO Guidelines for drug donations. Medicines must be listed on WHO Model Lists of Essential Medicines and used in a manner indicated in the lists. For example, statins should only be used for medically identified high‑risk patients.

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Footnote 72

The Licensed Natural Health Products Database contains information about natural health products that have been issued a product licence by Health Canada. Products listed include:

  • vitamin and mineral supplements;
  • herb and plant-based remedies;
  • traditional medicines like traditional Chinese medicines or Ayurvedic (Indian) medicines;
  • omega-3 and essential fatty acids;
  • probiotics;
  • homeopathic medicines; and
  • many everyday consumer products, like certain toothpastes, antiperspirants, shampoos, facial products and mouthwashes

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Footnote 73

A Natural Product Number (NPN), or Homeopathic Medicine Number (DIN-HMN) shows that the product is licensed and regulated. Each licensed product is subject to annual review.

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Footnote 74

Pre-cleared information (PCI) is any form of information supporting the safety, efficacy, or quality of a medicinal ingredient, or natural health product that Health Canada’s Natural Health Products Directorate has reviewed, and determined to be acceptable. PCI can be used to speed up the evaluation of a natural health product and serves as a reliable source of product information for consumers.

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