Charity Definition - Employment Standards Regulations - Interpretation Guidelines Manual - Employment Standards
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EMPLOYMENT STANDARDS REGULATION - PART 1 - INTERPRETATION
ESR Section 1 – Definitions – Charity
This section contains definitions for terms that arise throughout the Regulations.
(a) a charity as defined in the Income Tax Act (Canada), or
(b) a society incorporated under the Society Act
Section 149.1 of the Income Tax Act (Canada) defines a charity as a "charitable organization or charitable foundation." A charitable organization is defined in the Income Tax Act (at time of writing) as:
an organization, whether or not incorporated,
- all the resources of which are devoted to charitable activities carried on by the organization itself,
- no part of the income of which is payable to, or is otherwise available for, the personal benefit of any proprietor, member, shareholder, trustee or settler thereof,
- more than 50% of the directors, trustees, officers or like officials of which deal with each other and with each of the other directors, trustees, officers or officials at arm ’s length, and
- where it has been designated as a private foundation or public foundation pursuant to subsection (6.3) of this section or subsection 110(8.1) or (8.2) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, or has applied after February 15, l984 for registration under paragraph 110(8)(c) of that Act or under the definition "registered charity" in subsection 248(1), not more than 50% of the capital which has been contributed or otherwise paid into the organization by one person or members of a group of persons who do not deal with each other at arm’s length and, for the purpose of this paragraph, a reference to any person or to members of a group does not include a reference to Her Majesty in right of Canada or a province, a municipality, another registered charity that is not a private foundation, or any club, society or association described in paragraph 149(1)(1).
The phrase "charitable foundation" is defined in the Income Tax Act (at time of writing) as:
a corporation or trust that is constituted and operated exclusively for charitable purposes, no part of the income of which is payable to, or is otherwise available for, the personal benefit of any proprietor, member, shareholder, trustee or settlor thereof, and is not a charitable organization.
Section 2 of the Society Act states:
- A society may be incorporated under this Act for any lawful purpose or purposes such as a national, patriotic, religious, philanthropic, charitable, provident, scientific, fraternal, benevolent, artistic, educational, social, professional, agricultural, sporting or other useful purposes, but not for
- the operation of a boarding home, orphanage or other institution for minors, or the supplying of any other form of care for minors without the written consent of the Superintendent of Family and Child Services designated under the Family and Child Service Act;
- the ownership, management or operation of a hospital without the written consent of the minister;
- the ownership, management or operation of a social club without the written consent of the minister;
- the purpose of paying benefits or rendering services as described in section 14 without the written consent of the Superintendent of Financial Institutions;
- any purpose without the consent of an existing society should the registrar require it; or
- for the purpose of carrying on a business, trade, industry or profession for profit or gain.
- Carrying on a business, trade, industry or profession as an incident to the purposes of a society is not prohibited by this section, but a society shall not distribute any gain, profit or dividend or otherwise dispose of its assets without receiving full and valuable consideration, to a member or members of the society, except during winding up or on dissolution and then only as permitted by section 73.
The word "charity" is referred to in the Regulation at:
- Section 34 (r), exclusions from Part 4 of the Act
- Section 45, directors and officers of charities excluded from liability under section 96 of the Act
Employment Standards Tribunal Decisions
West Vancouver Notes & Crafts Society, BC EST #D447/97
Related sections of the Act or Regulation
- s 1, Definition “live-in camp leader”
- s.34(r), Exclusions from hours of work and overtime requirements
- s.45, Exclusion from liability provisions
Income Tax Act