Charity council fights tax moves

Revenue Canada faces a fight over moves to restrict issuance of tax receipts by religious charities.

The Canadian Council of Christian Charities, which embraces a number of evangelical denominations and para-church groups, is pulling together a $2million war chest.

Funds are being raised to counter recent Revenue Canada moves the council believes could threaten about $3 billion in donations to Christian churches and charities.

While mainline churches, including the Anglican Church of Canada, have not been involved in the charities council, they are watching closely.

All Canadian churches and faith groups must be aware that Revenue Canada is trying to change assumptions about charitable giving, says Bonnie Greene, director of the Office of Church in Society for the United Church of Canada.

A current government review of the charitable sector headed by former federal New Democratic Party leader Ed Broadbent does not include religious charities. Meanwhile, Revenue Canada is already devoting more effort to policing donations and tightening restrictions.

The council has intervened in two recent cases where an attempt was made to restrict charitable deductions. In one, Revenue Canada questioned a donation to World Vision for a child sponsorship program, arguing that the donation was – because it identified a particular child – a private benevolence and not eligible for charitable status.

The other case involved a gift to the student aid fund of First Mennonite Church in Kitchener, Ont. The gift was made by parents whose children had attended a church-supported school.

In both cases, Revenue Canada lost – but the United Church’s Ms. Greene agrees with the council that they reflect a new aggressive attitude, which regards charitable donations as foregone revenue and tax credits as a form of government subsidy.

Revenue Canada has a great deal of discretionary power under the Income Tax Act, Ms. Greene said, and that power could potentially be used against all churches and church-related charitable groups.

One concept the department is trying to implement is that donations involve “detached, disinterested generosity” with no benefit allowed for the donor, directly or indirectly.

Money being raised will be used for legal fees and lobbying efforts to counter Revenue Canada’s initiatives.

Mainline churches are also active, Ms. Greene said, and discussions have been initiated with Mr. Broadbent on the impact his report might have on the religious charitable sector.