On December 8, 2016, the Canada Revenue Agency (“CRA”) released CG-026, a Guidance on how CRA interprets and applies the law as it relates to relieving conditions attributable to being aged and charitable registration. This Guidance replaces the previous CPS-002, Relief of the Aged.
The Guidance confirms that where an organization’s purpose is to relieve conditions attributable to being aged, they fall under the fourth category of charity: certain other purposes beneficial to the community in a way the law regards as charitable.
While the purposes of organizations that fall under the fourth category of charity must also provide a charitable benefit to the public, or a sufficient section of the public, unless the organization is furthering a novel purpose that could relieve a condition attributable to being aged, CRA confirms that it will generally not require evidence that the purpose provides a charitable benefit. But if delivery of the benefit is not readily apparent or it is challenged or disputed, an organization may be required to provide objective, reliable, and relevant evidence proving that a charitable benefit will result.
For the purposes of charitable registration, in the Guidance, CRA recommends that the purposes in an organization’s governing documents should identify the charitable purpose category by including a purpose descriptor such as “to relieve conditions attributable to being aged” and describe:
- the eligible beneficiary group;
- the condition(s) attributable to being aged that will be relieved; and
- the scope of the activities that will be conducted to relieve the identified condition(s).
Eligible Beneficiary Group
The Guidance reiterates the position the courts have taken, that simply having attained a certain age is not recognized as a condition that is eligible for charitable relief. This means a stated purpose that describes the eligible beneficiary group only in terms of age would not meet the public component of the public benefit requirement and would not be charitable at law. Instead, the eligible beneficiary group should be aged persons in need of relief from a particular condition.
Conditions Attributable to Being Aged
In the Guidance, CRA sets out a list of examples of conditions attributable to being aged which CRA will generally consider to be eligible for charitable relief. These include:
- social isolation: lack of personal contact (often associated with being retired, living alone, lacking the capacity to participate in, or lacking access to, community activities or transportation); and loneliness: feelings of sadness arising from lack of companionship (often associated with loss of family and friends);
- decline in motor skills, flexibility, strength, speed of execution, or hand-eye co-ordination (resulting in, for example, difficulty manipulating controls and small objects, or loss of a driver’s licence);
- physical or mental health conditions attributable to being aged (for example, arthritis, high blood pressure, osteoporosis, or dementia);
- difficulty functioning in, or adapting to, current technology (for example, lack of computer skills preventing access to information or other social benefits offered by the Internet); and
- vulnerability to elder abuse (including physical, mental, or economic abuse by family members, caregivers, or others).
If an organization’s purpose is to relieve a condition not listed above, the Guidance provides that the organization will have to prove that the condition is eligible for relief through reliable evidence. This evidence could include materials from impartial sources and/or submissions from persons independent of the organization that are qualified by relevant professional bodies or work experience to speak on the subject.
In order to show that the activities it conducts to relieve conditions attributable to being aged have a recognizable, provable, and socially useful benefit, the Guidance provides that an organization must show that the activities actually eliminate the presence of, or reduce the negative effects of, the condition. More specifically, CRA advises that an organization must show that the activities it conducts to relieve conditions attributable to being aged satisfy all of the following requirements:
- provide relief of the condition(s) identified in its purpose(s);
- provide relief to the eligible beneficiaries identified in its purpose(s); and
- confer only incidental private benefit.
The Guidance sets out the following examples of activities that relieve conditions attributable to being aged:
- conducting physical activity classes led by qualified instructors to prevent loss of strength, balance, or flexibility;
- providing social or recreational activities to relieve social isolation and loneliness;
- providing daily living assistance services and meals to alleviate physical or mental incapacity; and
- providing comfortable, modest housing that includes specially adapted facilities, services, or other amenities to relieve mobility issues.
The Guidance further provides examples of purposes that relieve conditions attributable to being aged. These include, amongst others:
- to relieve conditions attributable to being aged by providing specially adapted residential accommodation, incidental facilities, and support to aged persons with limited mobility; and
- to relieve conditions attributable to being aged by providing in-home companionship or accompaniment to social outings to aged persons who are experiencing social isolation and loneliness.
Overall, this Guidance is helpful as it provides numerous examples of activities and purposes that relieve conditions attributable to being aged which CRA will recognize as being charitable. However, it is important to note that the examples in the Guidance are not exhaustive and may not include purposes to meet the objectives of all organizations.