Earth Fund v. M.N.R., 2002 FCA 498, [2003] 3 F.C. D-17


CHARITIES

Earth Fund v. M.N.R.

A-260-01

2002 FCA 498, Sharlow J.A.

16/12/02

14 pp.

Appeal from Minister's decision refusing to register appellant as charitable foundation--Corporate object of appellant to promote preservation and enhancement of environment for human life and well-being on Earth-- Appellant intended to donate net proceeds from lottery operations to number of environmental charities, some to international organizations--Lotteries prohibited in Canada unless permitted under Criminal Code, s. 207--Lieutenant Governor in Council of Prince Edward Island granted lottery licence to appellant--Appeal Division of Prince Edward Island determined Lieutenant Governor did not have authority to grant a lottery licence to appellant--No organization will be recognized as charitable in law if performing illegal activities--As long as decision of Appeal Division remains in force, appellant cannot carry on proposed lottery operation without breaching gaming provisions of Criminal Code-- Regarding review of Minister's decision, two issues at stake-- First, whether appellant's corporate object too broad--As a matter of law, appellant not entitled to registration as charity unless all of appellant's corporate objects and activities exclusively charitable--Pursuant to Income Tax Act, s. 149.1(1) definition of "charitable foundation" requiring charitable foundation to be constituted and operated exclusively for charitable purposes--Corporate object upon which appellant specifically relies too broad to permit conclusion that appellant's proposed activities exclusively charitable--Therefore, impossible to conclude appellant constituted exclusively for charitable purposes--Second, whether appellant disqualified as charitable foundation because lottery operation business sole activity operated by appellant--Appellant in exactly same position as any commercial enterprise committing itself to apply profits to charitable causes--Such commitment not derogating from commercial nature of activity generating profits-- Accordingly, Minister justified in concluding appellant's proposed lottery operation would be business of appellant not considered as related business, thus would not qualify as a charitable activity--Appeal dismissed--Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 149.1(1) "charitable foundation"-- Criminal Code, R.S.C., 1985, c. C-46, s. 207 (as am. by R.S.C., 1985 (1st Supp.), c. 52, s. 3).

v.475