Aug 2023 Charity & NFP Law Update
In the Federal Court of Appeal (the “Court”) decision of Ron W. Cameron Charitable Foundation v. Canada (National Revenue), a registered charity was issued a notice of intention to revoke (“NIR”) charitable status by the Minister of Revenue (“Minister”) for failure to devote resources to charitable purposes. Details regarding the events leading to the issuance of the NIR were not provided in the decision. The NIR was confirmed by the Appeals Branch of the Canada Revenue Agency (“CRA”) on February 10, 2023 (“Confirmation”).
The Appellant, Ron W. Cameron Charitable Foundation (“Appellant”) requested in its Notice of Appeal that the Minister provide it with certain materials following the procedure contemplated by Rules 317 and 318 of the Federal Courts Rules, which state that a party may request additional materials relevant to an application from an administrative decision maker, and that the court can order the production of these materials. In this regard, the Appellant requested a certified copy of all materials produced by, referenced, consulted or relied upon in any way by one or more representatives of the Government of Canada in any step involved in the drafting and issuance of the NIR and the Confirmation.
The Minister responded by providing a Certified Tribunal Record (“CTR”), but objected to providing any other documents.
The CTR was signed by Holly Brant, Manager, Charities Section, Appeals Branch for the CRA and stated that the documents were true copies. The CTR was accompanied by an affidavit sworn by Ms. Brant stating that the CRT contained all of the relevant materials.
Following directions made by Locke J.A. at an earlier hearing on May 24, 2023, the Appellant asked the Court to order the Minister to provide other materials sought in the Notice of Appeal.
While the Appellant argued that Ms. Brant was not the decision maker and did not have personal knowledge of the contents of the affidavit, the Court disagreed, given Ms. Brant’s position as Manager at the Appeals Branch and since she had signed the Confirmation on behalf of the Minister.
Several other requests for certain documents were put forward by the Appellant. The Court denied these on the basis that the Appellant had failed to produce evidence to support those claims. A brief summary of the other claims is provided below.
Firstly, the Appellant requested all correspondence and materials related to any “Gender-based Analysis Plus” (“GBA Plus”) performed by the CRA in relation to the NIR and the Confirmation. The Appellant claimed that the alleged inactivity of the charity resulted from the medical disability of one of the past directors and that disclosure of the GBA Plus is relevant to determining whether or not 1) discrimination based on disability or 2) a breach of procedural fairness may have occurred. The Court denied this request as the Court found the Appellant had produced no evidence of the former director’s disability and no information concerning any accommodation the former director might have required from CRA. In addition, the Appellant did not indicate how a GBA Plus analysis was relevant to the Minister’s decision to revoke charitable status.
Secondly, the Appellant claimed that the overwhelming motivation of the audit leading to the NIR was the involvement of an alleged ineligible individual who was on the charity’s board. The Court noted this ineligible individual had already resigned as a director and that the NIR acknowledged the resignation resolved the issue. The Court also noted that the Confirmation does not refer to an ineligible individual and while the Appellant requested CRA’s documents related to this ineligible individual, there was no evidence that any such documents exist.
Thirdly, the Appellant requested “a list of all charitable foundations that were inactive within the last 10 years, indicating which of them had their status revoked as a result”. The Appellant alleged in its Notice of Appeal that the NIR and the Confirmation invent an “arbitrary activity threshold” and requested this list in an effort to prove that there were other inactive foundations that did not have their charitable status revoked. On this issue the Court referred to case law indicating that the Court would not order production of documents, “where there is no evidence of their existence,” as was the case with the above mentioned list.
Fourthly, the Appellant asked the Court to order the production of “official versions” of information hosted on the CRA website. The Court denied this request, stating that Rule 317 is a “limited purpose tool” and “does not serve the same purpose as discovery in an action”.
The Appellant had claimed in the Notice of Appeal that the individuals who signed the NIR and the Confirmation (being the Director General and a Manager at the CRA, Charities Directorate) did not have delegated legal authority to issue them. On this issue, the Court stated that, “The appellant has adduced no evidence to support this allegation and on this basis alone, the request fails.” The Court went on to recognize the Minister’s evidence that subsection 220(2.01) of the Income Tax Act and section 8 of the Canada Revenue Agency Act, and other publicly available information “indicate the contrary.”
This case serves as a clear indication that the Federal Court of Appeal will not permit a fishing expedition when a charity requests production of documents under Rule 317 in the context of an administrative appeal. The case also affirms a straightforward principle that Courts will not order the production of documents where there is no evidence of their existence or where there is no basis to do so.