What is Charitable?

There is no definition for the term charity within the Canadian Income Tax Act, so common law court decisions determine what is “charitable”. The definition of charity within Canada is rooted within English law dating back to 1601.  A court decision known as Pemsel’s case (1891), identified four categories of charity which could be extracted from the the law and provides to this day the commonly accepted definition of charity:

1. Relief of poverty – includes things such as food banks, soup kitchens and low-cost housing units



2. Advancement of education – includes colleges, universities and research institutes



3. Advancement of religion - places of worship and missionary organizations



4. Purposes beneficial to the community – this is a very broad category that includes health related causes, animal shelters, libraries, and volunteer fire departments.

CRA uses court rulings to determine what is and is not charitable. If you are unsure, there is lots of detailed information on CRA’s website for you to look over.