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As announced in our recent News Alert, the Canada Revenue Agency’s Charities Directorate announced the release of five new and updated guidance documents on November 27, 2020.
This includes CG-030, Advancement of education and charitable registration (the “Guidance”). This new Guidance clarifies what the Canada Revenue Agency (“CRA”) expects from a registered charity established for charitable purposes that further the advancement of education.
Overall, the Guidance provides a complete overhaul of previous commentaries from CRA relating to the advancement of education and related subjects. The new Guidance replaces CPC-027, Publishing a magazine; Policy Statements CPS-003, Daycare facilities, CPS-013, School councils; and Summary Policies CSP-B05, Broadcasting, CSP-S08, Scholarships, CSP-E01, Advancement of education, CSP-I06, Provision of information, and CSP-S09, School association.
In this new Guidance, CRA takes the view that to advance education in the charitable sense means to provide knowledge or develop abilities by deliberate teaching or training through either:
- training that provides knowledge or develops abilities; or
- improving a useful branch of human knowledge through research.
The Guidance specifically addresses the first category, being training that provides knowledge or develops abilities. The second category relating to improving a useful branch of human knowledge through research continues to be addressed in the current CPS-029, Research as a charitable activity.
Broadly speaking, the new Guidance breaks down the advancement of education through training into two groups: (1) purposes that educate through structured and targeted teaching or learning, and (2) other purposes the courts have recognized to advance education.
As it relates to the first group, CRA focuses on content and process as the key criterion required to meet the public benefit test in the charitable context. The Guidance operates as a guide, setting out various indicators that CRA recognises as meeting the content and process requirements. We have reproduced these indicators below.
Content Criteria
- Subject matter must be useful and have educational value (i.e. the subject matter must be well-reasoned)
- Subject matter must not be focused on promoting a point of view (i.e. the subject matter must represent a reasonably objective attempt to identify and disseminate accurate, well-reasoned information).[1]
Process Criteria
Structured Format
Indicators consist of:
(all are required)
- a clearly defined educational goal
- a course outline or plan designed by qualified individuals
- educational materials (a thorough body of knowledge) that can further the educational goal
Legitimate, Targeted Attempt to Educate
Indicators consist of:
(all are required)
- educational materials prepared by qualified individual(s)
- educational materials adapted to meet the learning needs of the students
- a process to ensure audience engagement and participation, such as registration; or attendance (registration is important, for example, in the case of self-study or distance learning)
A Teaching or Learning Component
Indicators consist of:
(either or both are required)
- teaching component consists of instruction by an individual who is qualified and opportunity for students to obtain feedback, clarification, or answers to questions
- learning component consists of testing, evaluation, demonstration of skill, or other assessment of learning achievement
It is CRA’s position that all of the above criteria must be met for an organization to further a charitable purpose within the category of advancement of education.
The Guidance goes on to address certain other purposes that advance education that have been recognized by the courts. Most are connected with and support formal or traditional classroom education and include the following:
- Scholarship, bursaries, prizes and financial assistance for students;
- Schools and tuition fees;
- Providing educational facilities, teachers, equipment, and supplies;
- Sports and education;
- Community groups and clubs;
- Alumni associations/School councils;
- Student Unions; and
- Museum and Libraries.
The new Guidance provides specific direction as it relates to each of the aforementioned categories. For example, the Guidance confirms the well-established view by CRA that while the promotion of sport is not a charitable purpose in and of itself, a purpose to educate students of a school by providing sporting activities and facilities as part of a school curriculum can be charitable.
The Guidance also addresses special topics as they relate to the advancement of education including, production and broadcasting, publishing books, magazines or other materials, conferences, vocational or professional education, providing information and education to the public, experiential education, preschool and daycare programs, and summer camps as special topics. Broadly speaking, all of these special topics are required to meet the content and process criteria discussed above. Notably, the new Guidance outlines a more recently settled position of CRA, being that producing and distributing in-depth news and public affairs programs will not advance education as they do not meet the process requirement. In particular, such programs do not meet the requirement for more than simply providing an opportunity for people to educate themselves. That said, a purpose to produce or distribute books, magazine, newspapers, films or documentaries may be considered to advance education, provided they meet both the content and process criteria.
Miller Thomson LLP’s Social Impact group would be pleased to help charities (or organizations seeking charitable status) to navigate the new Guidance and adopt best practices.
[1] CRA does acknowledge that a purpose to educate about a subject that presents a point of view which is generally accepted to be for the public benefit can still advance education (for example, to educate that peace is preferable to war, or that smoking is harmful, is clearly for the public benefit and can therefore be charitable).
