CRA recently released a letter which discusses whether a park qualifies as a municipal or public body performing a function of government for purposes of 149(1)(c) of the Act and the definition of a qualified donee in subsection 149.1(1).
CRA determined that the park would meet the criteria to qualify as a municipal or public body performing a function of government in Canada for the purposes of paragraph 149(1)(c) of the Act and the definition of a “qualified donee” in subsection 149.1(1) of the Act, and had the following comments:
"The definition of a qualified donee in subsection 149.1(1) of the Act, for purposes of determining eligibility to issue charitable donation receipts, includes a “municipal or public body performing a function of government in Canada” that is registered. We are of the view that in order to be considered a “municipal or public body performing a function of government in Canada” two conditions must be met. The first condition is that the organization must be a municipal or public body and the second condition is that it must perform a function of government.
There is no definition of a “municipal or public body performing a function of government in Canada” in the Act. Therefore, whether any organization is a municipal or public body performing a function of government must be determined on a case-by-case basis. The term “public body” is also not defined in the Act. A public body is typically a body that acquires both its existence and its authority from a statute enacted by a legislature, and whose functions and transactions are for the benefit of, and affect the whole community of, persons to whom its authority extends. Generally, a public body has a governance purpose and is accountable to those governed, regulated or represented by it. In our view, if a public body is incorporated, the federal government or a provincial or territorial government or the “public” that the corporation is serving or representing should have some specific control over the actions and operation of the corporation and the corporation should be accountable to that government and that public.
The Authority was constituted by a statute, the XXXXXXXXXX. The Authority’s voting members are all appointed by elected officials. The Authority is accountable to the public, the Province of XXXXXXXXXX and the municipalities from which it was created. The term “function of government” is also not defined in the Act and reference must be made to the ordinary usage of this term. Historically, we have required that to be performing a function of government an entity must have the ability and powers to govern, tax, pass by-laws and/or provide municipal- or provincial-type services to its members or citizens. We have accepted that providing a range of municipal-type services or providing a key service traditionally offered by the provinces or territories such as social services, oversight of the environment, health services, and education is generally considered to constitute performing a function of government. The Authority has passed several bylaws and has the ability to impose penalties, in this case fines, to those in breach of the bylaws. While there is no indication that fines have been assessed, the Authority has passed a bylaw allowing them to assess the fines if necessary.
In addition to passing bylaws, the Authority has indicated that they are responsible for fire protection and water testing. The Authority has also negotiated contracts with respect to waste removal and septic removal. You have questioned whether the scale of these services as well as their purpose should impact the determination as to whether the Authority is a public body performing a function of government. In assessing whether the applicant is providing municipal type services we must be mindful of its geographic area. In this case, the applicant is a XXXXXXXXXX Park with approximately XXXXXXXXXX camp sites. The costs associated with the Authority providing its municipal type services will be significantly less than a traditional municipality. In the end, the Authority is responsible for, and is providing, the services.
You have also expressed concern with the fact that the Authority’s constitution indicates that there are now XXXXXXXXXX participating municipalities of which only XXXXXXXXXX are part of the XXXXXXXXXX municipalities included on the original order in council creating the Authority. The XXXXXXXXXX does provide that, if the minister is satisfied that it is necessary or appropriate to do so in the public interest, the minister may, by order, alter the boundaries of a XXXXXXXXXX park and amend or alter the membership of a XXXXXXXXXX park authority responsible for the administration of the XXXXXXXXXX park. Every order must be published in the Gazette. We should ask for a copy of the order."
Here is a copy of the full CRA letter.
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.