Merely having a written agreement will not necessarily evidence direction and control over own resources

Public Television Assn. of Quebec v. Minister of National Revenue
2015 CarswellNat 3184
Federal Court of Appeal

Tax --- Income tax — Special rules — Charities — Revocation of registration — Grounds

Registered charity's objects included advancement of education through non-commercial television programs — Charity entered into broadcasting agreement with American charity ("agent") to act as its agent in procuring and broadcasting television programs — Charity entered into fundraising agreement for agent to undertake fundraising activities on charity's behalf — Charity purchased pre-determined set of television programs selected by agent, rarely making any adjustments — Agent conducted its own fundraising and merely assigned Canadian donations to charity — CRA upheld Minister's proposal under s. 168(1) of Income Tax Act to revoke charity's registration as charity on ground that charity had failed to devote all of its resources to its own charitable activities as required by s. 149.1(1) of Act as it was not exercising discretion and control over agent — Charity appealed — Appeal dismissed — Charity was not carrying on its own charitable activities through agent, but was merely conduit for agent — It was reasonable for Minister to determine that charity failed to maintain direction and control over its resources as it did not devote all its resources to its own charitable activities — Provisions of broadcasting and fundraising agreements were not followed or respected — Charity did not demonstrate how it monitored cost of broadcasting activities, donations received, and fundraising — Evidence indicated that agent was conducting fundraising activities on its own behalf and was using charity to issue