Related business and public foundations

Policy commentary

Release date
July 12, 1991

Reference number
CPC-002

Subject

Related business - Whether it is acceptable for a public foundation to operate a business on behalf of a related charitable organization

Purpose

To clarify the Directorate's policy regarding related business.

Commentary

Charitable organizations and public foundations can carry on related businesses that accomplish or promote their charitable objects. Therefore, a charitable organization can entrust a related public foundation to operate a related business on its behalf. For example, where a hospital's related public foundation operates the hospital's cafeteria, the purpose of the operation is the same, namely to provide a service which is usual and necessary concomitant to the operation of the hospital (that is, the charitable organization.)

References

• Alberta Institute on Mental Retardation v. M.N.R., [1987] F.C. 286
• Income Tax Act, R.S.C. 1985 (5^th supp.) c. 1, ss. 149.1(1)