Related business and public foundations

Policy commentary

Release date
July 12, 1991

Reference number


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


To clarify the Directorate's policy regarding related business.


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.)


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