Promotion of health and charitable registration

This guidance explains how the Canada Revenue Agency (CRA) interprets and applies the law as it relates to the promotion of health and charitable registration. It was developed in consultation with stakeholders in the charitable sector.

While the CRA is always interested in feedback on its guidance products, a post implementation review is conducted approximately one year after publication and amendments are made as warranted. If you have comments or suggestions, you can go to Consultation and feedback on policies and guidance for contact information.

Guidance

Reference number
CG-021

Issued
August 27, 2013

This guidance replaces the following summary policies: CSP-A19, Alcohol, Drug, Addiction, CSP-A11, Abortion (Medical Clinic) - Women, CSP-C24, Counselling, CSP-C20, Crisis Centre, CSP-D11, Relieving Sickness, Disability, CSP-H02, Provision of Health Care, CSP-H03, Health Clinic, and CSP-M04, Holistic Medicine.

Summary

According to the common law, the promotion of health can be charitable. The promotion of health means directly preventing or relieving a mental or physical health condition. To be charitable, a purpose that promotes health must, as a general rule, directly prevent or relieve a physical or mental health condition by providing effective health care services or products to the public in a manner that meets applicable quality and safety requirements.

This guidance groups purposes that promote health into four types:

  • core health care (diagnosing and treating health conditions, assisting with rehabilitation, protecting and maintaining public health)
  • supportive health care (providing support to individuals diagnosed with health conditions or their caregivers and families)
  • protective health care (saving people when lives are in danger by providing health-related emergency services)
  • health care products

However, not everything that is done with the intention of promoting health is charitable under the law. To be charitable, every promotion of health purpose must meet the public benefit test by delivering a charitable benefit to the public.

Typically, in the absence of evidence to the contrary, providing the public with health care services or products that are funded under the Canada Health Act or covered under any provincial or territorial medical insurance plan in Canada will be considered to be charitable when applicable quality and safety requirements are met. Otherwise, to further a promotion of health purpose, an organization must generally show that each health care service or product it provides effectively prevents or relieves a physical or mental health condition and meets applicable quality and safety requirements. The guidance explains the criteria for assessing services and products for effectiveness, and quality and safety.

Examples of promotion of health purposes include:

  • promoting health by:
    • providing the public with in-patient or out-patient medical services
    • providing accident victims with physical, occupational or speech therapy
    • protecting and maintaining public health by slowing the development and progression of heart disease by operating a “healthy heart” program
    • providing individuals with [specify condition] with access to health counselling, information or group support programs
    • providing publicly available ambulance, paramedic or fire-fighting services
    • providing affected populations with health care products that prevent and manage serious threats to survival and health

A. Introduction

1.  The Canada Revenue Agency’s Charities Directorate registers charities under the Income Tax Act. The Directorate also ensures that registered charities continue to meet all associated legal and administrative requirements.

2.  This guidance explains the Directorate’s interpretation of relevant common law (case law or court decisions) and legislation (the Income Tax Act) to determine whether an organization established with promotion of health purposes is eligible for registration as a charity under the Income Tax Act. This guidance also sets out the criteria used to determine whether an organization furthers promotion of health purposes as defined in law.

3.  Charitable registration is one option for organizations with purposes or activities that promote health. For information about other options, please go to the webpage Make an informed decision about becoming a registered charity.

4. In this guidance, unless otherwise stated, the terms:

“charity” and “registered charity” include all three types of registered charities as defined under the Income Tax Act: charitable organizations, public foundations and private foundations

“organization” includes applicants for registration as a charitable organization, a public foundation or a private foundation, as well as registered charities

5.  To be registered as a charity under the Income Tax Act, the law requires that an organization’s purposes:

  • be exclusively charitableFootnote 1 —meaning that they fall within one of four broad categories of charity [relief of poverty (first category); advancement of education (second category); advancement of religion (third category); and certain other purposes beneficial to the community in a way the law regards as charitable (fourth category)]Footnote 2 , and provide a charitable benefit to the public, or a sufficient section of the publicFootnote 3 
  • define the scope of the organization’s activities. Activities are the ways in which an organization furthers its purposes. Subject to limited exceptions, all of the organization’s resources must be devoted to charitable activities that directly further its stated charitable purposesFootnote 4

6.  In addition to having charitable purposes and devoting its resources to charitable activities that further those purposes, there are other legal requirements that must be met for an organization to be registered under the Income Tax Act. For detailed information about registration requirements, see Guidance CG-017, General requirements for charitable registration.

7.  This guidance provides general information only. All decisions about specific organizations are made individually, applying the law to the facts in each case.

B. The promotion of health in the charitable context

Definitions and key concepts

8.  In this guidance, relevant terms and concepts are defined as follows:

Promotion of health: means directly preventing or relieving physical or mentalFootnote 5 health conditions by providingFootnote 6 health care services or products to eligible beneficiaries.

Health care products: Refer to:

Effectiveness: refers to the positive and desirable outcomes normally resulting from a health care serviceFootnote 10 or product. In most cases,Footnote 11 this means eliminating the presence of or reducing the symptoms related to, an identified health condition.Footnote 12  In the case of protective health care, effectiveness involves preventing injury or loss of life.

In this guidance, effectiveness is the benchmark to determine whether a particular health care service or product will deliver the essential charitable public benefit.

Quality and safety: refers to the quality and safety standards normally expected to be met by a health care provider, and the quality and safety standards normally applied to health products. Quality and safety standards normally expected to be met by a health care provider ensure that health care service providers are competent and able to provide safe health care services that are of sufficient quality when compared to those routinely provided within the Canadian health care system.

All applicable quality and safety requirements must be met for an effective health care service or product to provide a substantial net public benefit, meaning that any negative effect is outweighed by the resulting charitable benefit.Footnote 13

Assessing the charitable benefit of purposes that promote health and the activities that further them

9.  The common law recognizes promotion of health purposes under the fourth category of charity—certain other purposes beneficial to the community in a way the law regards as charitable.Footnote 14 ,ootnote 15

10. However, to be charitable and eligible for registration, every promotion of health purpose must meet the two-part public benefit requirement by showing that it provides a charitable benefit to the public.

11. A charitable benefit is one that is recognizable and capable of being proved, and socially useful. To be recognizable and capable of being proved, a benefit must generally be tangible or objectively measurable.Footnote 16  Benefits that are not tangible or objectively measureable (intangible benefits) must be shown to be approved through objective evidence of common or widespread acceptance by persons who are knowledgeable and informed about the particular subject or issue.Footnote 17  To be socially useful, a benefit must have public value and a demonstrable impact on the public.Footnote 18  In all cases, it must be clear that a benefit exists. An “assumed prospect or possibility of gain” that is vague, indescribable or uncertain, or incapable of proof, cannot be a charitable benefit.Footnote 19

12. As a general rule, the benefit should be a necessary and reasonably direct result of the purpose and of the activities that will be conducted to further the purpose, and reasonably achievable.Footnote 20  While indirect benefits have sometimes been accepted by the courts, indirect benefits will not be charitable if they are too remote.Footnote 21  A charitable purpose is also expected to provide a substantial net benefit, meaning that any negative effect is outweighed by the resulting charitable benefit.Footnote 22

13. To provide the charitable benefit required to promote health, a purpose, and the activities that will be conducted to further the purpose, must be considered to prevent or relieve a health condition by providing health care services or products. Unless otherwise specified in this guidance, to be considered to prevent or relieve a health condition, all health care services and products must meet the applicable requirements relating to effectiveness as set out in Appendix A, and quality and safety set out in Appendix B and Appendix C.Footnote 23

14. In the absence of evidence to the contrary, health care services and products that would normally be eligible for coverage under the Canada Health Act,Footnote 24 or for coverage under any provincial or territorial medical insurance service plan in Canada,Footnote 25 will generally be considered as meeting the requirements relating to effectiveness, but must be shown to meet the requirements related to quality and safety set out in this guidance.

15. When any health care service or product is provided for purely cosmetic or lifestyle reasons (for example, an optional cosmetic procedure to improve one’s appearance) it generally is not considered to provide a charitable benefit. However, when a health care service or product is medically necessary, such as surgery to address a deformity relating to a congenital abnormality or a serious injury resulting from an accident, trauma or a disfiguring health condition, it will generally be considered to prevent or relieve a health condition and promote health as long as it meets the requirements relating to effectiveness, and quality and safety set out in this guidance.

16. To be public, a benefit must be provided to the public as a whole, or to a sufficient section of the public. This means: 

  • the members of the public potentially eligible to receive the benefit (the eligible beneficiary group) must be appropriately defined. Different charitable purposes have different requirements about what is considered to be the public, or a sufficient section of the public.Footnote 26  Sometimes, restricting eligible beneficiaries is justified, or even required, based on the nature of the purpose. Other times, benefits must be available to the public as a whole. For example, a health organization with the purpose of addressing a particular disease may restrict eligible beneficiaries to people afflicted with that disease. On the other hand, a general hospital with the purpose of providing various health care services should usually be available to the public as a whole
  • unacceptable private benefits may not be provided. Generally, a private benefit is a benefit or advantage (charitable or non-charitable) provided to a person, entity or organization that is not a charitable beneficiary, or a benefit provided to a charitable beneficiary that goes beyond what is considered to be charitable. An acceptable private benefit is typically one that is incidental to achieving a charitable purpose (necessary, reasonable, and proportionate to the resulting public benefit)Footnote 27

17. To summarize, to be charitable and eligible for registration, a purpose that promotes health, and the activities conducted to further that purpose, generally must:

  • directly prevent or relieve a physical or mental health condition by providing health care services or products that meet the applicable effectiveness, and quality and safety requirements set out in this guidance
  • be provided only to eligible beneficiaries who constitute the public or a sufficient section of the public
  • not provide an unacceptable private benefit

Promotion of health purposes and activities

18. This guidance groups purposes that promote health into four types:

     a.     Core health care
     b.     Supportive health care
     c.     Protective health care
     d.     Health care products

a. Core health care

19. Providing core health care to eligible beneficiaries can promote health. Core health care includes:

    i.     diagnosingFootnote 28 and treating health conditions

    ii.    assisting with rehabilitation

    iii.   protecting and maintaining public healthootnote 29 

i. Diagnosing and treating health conditions

20. Diagnosing and treating identified health conditions can promote health.

21. Examples of purposes that promote health through diagnosis and treatment include:

  • promoting health by providing the public with:
    • medical diagnostic services, medical supplies (for example, drugs, first aid supplies) or medical equipment (for example, crutches, wheelchairs or oxygen tanks)
    • medical hospitals, clinics or dispensaries
    • in-patient or out-patient medical services

22. Examples of activities that could directly further diagnostic and treatment-based purposes include:

  • providing emergency medical services
  • providing dialysis treatments
  • operating a diagnostic imaging clinic to diagnose illness or injury
ii. Assisting with rehabilitation

23. Assisting with rehabilitation can promote health. Rehabilitation should facilitate and advance recovery from loss of function due to a health condition.

24. Examples of purposes that promote health by providing rehabilitation services include:

  • promoting health by:
    • assisting with the rehabilitation of accident victims
    • assisting with the recovery from alcohol addiction
    • providing psychological counselling or social services

25. Examples of activities that could directly further purposes that promote health by providing rehabilitation services include:

  • maintaining a facility and providing rehabilitation health care professionals
  • providing physical, occupational, or massage therapy
  • establishing and operating counselling or support group programs
iii. Protecting and maintaining public health

26. Protecting and maintaining public health with the goal of preventing (or reducing the incidence of) health conditions, injuries or loss of life, can promote health. In general, protecting and maintaining public health means preventing the initial occurrence of a health condition by:

  • preventing the spread of disease
  • slowing the progression rate, or reducing the effects of an existing health condition
  • reducing the development of, or relapses in, chronic health conditions

27. Examples of purposes that promote health by protecting and maintaining public health include:

  • promoting health by protecting and maintaining public health by:
    • preventing outbreaks of a disease [specify] by operating a vaccination clinic
    • slowing the development and progression of heart disease by operating a “healthy heart” program
    • reducing the risk of premature delivery in pregnant women by providing pre-natal care

28. Examples of activities that could directly further purposes that promote health by protecting and maintaining public health include:

  • conducting epidemical research into the spread of communicable diseasesFootnote 30 
  • establishing and staffing with trained personnel mobile clinics that serve communities identified to be at risk
  • developing and delivering harm reduction programs for persons with heart disease such as:
    • smoking cessation
    • nutritional counselling
    • cardio respiratory exercise programs
    • providing health advisoriesFootnote 31  

b. Supportive health care

29. Providing supportive health care can promote health. Supportive health care services or products will be considered to meet requirements relating to effectiveness where they have been recognized by the common law to provide a charitable benefit. Supportive health care includes providing:

    i.    health-related support to individuals with health conditions

    ii.   extended support for families or caregivers of individuals with health conditions

30. Since by their nature supportive health services or products do not normally raise quality or safety concerns, requirements relating to quality and safety generally do not apply. However, when the nature of the service or product does raise quality or safety concerns, the risk of any harm that may arise from the proposed activity must be weighed and a net benefit must result.

i. Providing health-related support to individuals with health conditions

31. Providing health-related supportive services or products can promote health. The services or products should support recovery from, or living with, a health condition.Footnote 32   Footnote

32. Examples of purposes that promote health by providing supportive health services or products include:

  • promoting health by providing individuals with [specify condition] with:
    • extra comfort items to cope with hospitalization or a health condition
    • services that facilitate the delivery of health care services
    • access to health counselling, information or group support programs

33. Examples of activities that could directly further purposes that promote health by providing supportive health services or products include:

  • providing toys or games to hospitalized children
  • delivering meals to the sick
  • driving individuals to medical appointments
  • accompanying individuals to medical appointments to interpret or translate on behalf of the health professional and the patient
  • hiring and training employees to lead group discussions for individuals diagnosed with cancer (or other health condition)
ii. Providing health-related support for families or caregivers of individuals with health conditions

34. Providing health-related support to individuals with health conditions, and to families or caregivers of individuals with health conditions, can promote health where the resulting charitable benefit is not too indirect or remote.Footnote 33    Footnote

35. Examples of purposes that promote health by providing health-related support to individuals with health conditions, or to families or caregivers of individuals with health conditions, include:

  • promoting health by providing:
    • temporary accommodations to family members of hospitalized or seriously ill patients
    • respite for the caregivers of persons diagnosed with a serious health conditionFootnote 34      Footnote

36. Examples of activities that could directly further purposes that promote health by providing health-related support to individuals with health conditions, or to families or caregivers of individuals with health conditions, include:

  • establishing and operating a home near a medical facility for use by family members of hospitalized of seriously ill patients
  • establishing and operating an adult day program for persons diagnosed with a serious health condition thereby providing respite to caregivers

c. Protective health care

37. Providing protective health care can promote health when it protects or preserves health.

38. Protective health care includes:

    i. providing health-related emergency services

    ii. regulating health care service providers

39. Requirements relating to effectiveness will be considered to have been met only if the common law has recognized the charitable nature of the protective health care in question. When the nature of the protective health care could raise safety or quality concerns, the quality and safety requirements set out in Appendix B and Appendix C apply.

i. Providing health-related emergency services

40. Providing health-related emergency services to save lives and protect against injury and loss of life can promote health.

41. Examples of purposes that promote health by providing health-related emergency service include:

  • promoting health by providing publicly available:

42. Examples of activities that could directly further these purposes include:

  • hiring and training employees
  • building or maintaining facilities and equipment
ii. Regulating health care service providers

43. Protecting the public with respect to the quality of health care services by regulating health care service providers can promote health.Footnote 38

44. Examples of purposes that promote health by regulating health care service providers include:

  • promoting health for the benefit of the public by:
    • regulating or governing health care service providers
    • raising health care service standards

45. Examples of activities that could directly further purposes that regulate health care service providers include:

  • creating and maintaining a register of persons qualified to be registered as a health care service provider
  • monitoring compliance with standards, investigating complaints and exercising disciplinary power over registered health care service providers
  • monitoring and advising on medical education and supervising the training of persons conditionally registered (as in students or newly trained health care service providers)

46. Generally, a regulatory body for health care service providers established and governed by Canadian federal, provincial or territorial legislation to carry out any, or all of the above activities will be considered to be furthering a charitable purpose.

47. However, a group or association (whether established and governed by legislation or otherwise) that promotes the interests of the members of a particular health care profession is generally not eligible for registration as a charity because it provides an unacceptable private benefit. To be charitable, serving the interests of members must be incidental to providing the public benefit of protecting the public and promoting health. For example, an organization formed exclusively to promote and market the services of its members or increase recognition of its members in the local community would not be considered charitable.Footnote 39 

d. Health care products

48. Providing health care products to eligible beneficiaries can promote health. Eligible beneficiaries would generally be members of the public who require the health care products due to a physical or mental health condition.

49. Examples of purposes that promote health by providing health care products to the public include:

  • promoting health by providing affected populations with health care products that:
    • prevent or relieve a health condition
    • prevent and reduce serious threats to survival and health
    • respond to large-scale emergencies

50. Examples of activities that could directly further purposes that promote health by providing health care products include:

  • buying and distributing drugs or medical devices for use inside or outside CanadaFootnote 40   Footnote
  • selecting medicines to ensure they meet the expressed needs in the recipient countries and are relevant to the disease pattern in the recipient country, and ensuring that quantities do not exceed identified needs in the recipient countries
  • presetting, packaging and labeling medicines in a language that is easily understood by health service providers in recipient countries
  • monitoring and evaluating medicine distribution programs to help prevent the continuation or repetition of inefficient or harmful medicine distribution, and modifying, adjusting, forecasting and improving the management of such programs

51. To promote health, all health care products must be shown to meet the applicable requirements relating to effectiveness set out in Appendix A, and to quality and safety set out in Appendix C.

C. Special topics

Complementary or alternative health care

52. Complementary or alternative health care services and products that are eligible for coverage for individuals with an identified health condition under the Canada Health ActFootnote 41 or for coverage under any provincial or territorial medical insurance service plan in Canada will generally be considered by the CRA as meeting requirements relating to effectiveness set out in Appendix A, but must be shown to meet the applicable requirements relating to quality and safety as set out in Appendix B and Appendix C.

53. Otherwise, a complementary or alternative health care service or product will only be recognized as furthering a charitable purpose if it can be shown to directly prevent or relieve a physical or mental health condition by meeting the applicable requirements relating to effectiveness, and quality and safety set out in this guidance.

54. Examples of complementary or alternative health care services and products could include the following:

  • mind-body techniques (meditation, acupuncture)
  • manipulative and body-based therapies (osteopathy, massage therapy)
  • traditional programs and whole medicine systems (Chinese medicine, Ayurvedic medicine)
  • energy-based systems (spiritual healing)
  • certain medical services or products
  • natural health products (including dietary supplements and herbal medicines)

Physical fitness and wellness

55. Encouraging and facilitating physical fitness in the general sense and encouraging and facilitating public participation in physical activities that further physical fitness may promote health based on the established relationship between physical fitness and good health.Footnote 42  However, Canadian courts have not recognized purposes that promote sport as being charitable.Footnote 43  For more information on health and sports, see Policy statement CPS-027, Sports and charitable registration.

56. The facilities, programs and activities used to encourage and facilitate physical fitness must always be designed to develop general physical fitness directly, as opposed to doing so indirectly or as a by-product, and be available to the general public (not being limited based on skill level or unduly exclusionary participation costs). To meet the public benefit requirement, it is also necessary for the organization to establish the necessary and reasonably direct link between the purpose and the activities that will be conducted to further the purpose. If any health related benefit (such as preventing future illness or disease) is too remote, it will not deliver the required charitable benefit. For more information, see Policy statement CPS-024.

57. For example, techniques that seek to optimize quality of life, such as yoga or meditation may be activities that further a promotion of health purpose where they are shown to eliminate the presence of, or reduce the symptoms related to, an identified health condition, such as, when the technique assists with the rehabilitation of eligible beneficiaries. The technique must be provided exclusively as a health care service for eligible beneficiaries with an identified physical or mental health condition. It must also meet the applicable requirements relating to effectiveness as set out in Appendix A, and quality and safety set out in Appendix B and Appendix C.

58. Promoting a technique to the general public that focuses on achieving well-being is generally not considered as directly furthering a promotion of health purpose. Optimizing quality of life by focusing on general well-being does not promote health in the charitable sense because any potential health related benefit (such as preventing future illness or disease) is too remote.

59. Most commonly, encouraging and facilitating physical fitness may advance core health care purposes.

60. Examples of core health care purposes that may be advanced by physical fitness include:

  • protecting and maintaining public health by:
    • preventing the initial occurrence of [specify health condition]
    • slowing the progression rate, or reducing the existing effects of [specify health condition]
    • encouraging and facilitating general physical fitness by providing public sport and recreational facilitiesFootnote 44  
    • encouraging and facilitating general physical fitness by providing public fitness programs and opportunities

61. Examples of physical activities that might directly further purposes that promote health by encouraging and facilitating general physical fitness include:

  • creating and maintaining a public multi-use sports field
  • creating and delivering a physical activity program to school age children

Providing information as a charitable activity

62. Raising awareness about a charity or a charity’s programs is not, as a rule, a charitable activity because it does not directly provide sufficient charitable public benefit. Similarly, simply raising awareness about an issue or problem that a charity seeks to address, such as a health concern, is not a charitable activity.Footnote 45

63. In order for the provision of health information to further a promotion of health purpose, it must enable actions or behaviours that, if carried out by the public, would directly further that charitable purpose.Footnote 46 ,ootnote 47        

64. To directly further a promotion of health purpose, an activity that provides health information to the public must satisfy all the following criteria:

Content: The information given enables the audience to take specific actions or adopt specific behaviors that will directly promote health. This means the information must be reasonably unbiased, factual and sufficiently detailed. Additionally, the information encourages the audience to take the specific actions or adopt the specific behaviors described.

Audience: The information targets an audience that can reasonably be expected to take action to directly further the purpose.

Distribution: The information can reasonably be expected to reach the target audience. Simply making the information available to the public (for example, via a website) is not sufficient. There must be active and targeted dissemination to ensure the audience receives the information.

65. For example, when developing pamphlets for persons interested in quitting smoking, the information must be detailed and factual. Pamphlets distributed in health clinics that explain:

  • the health risks associated with smoking
  • the specific steps to quit (based on medically proven methods)
  • promote community resources (such as support groups or individual counseling)

would likely meet these criteria. Also, providing information on how to obtain services such as addiction counseling provided by a charity to the community it serves would meet these criteria. On the other hand, simply posting statistics on the number of lung cancer deaths caused by cigarette smoking on a website is not enough.

66. In some cases, disseminating information that does not meet the content requirement explained in the previous paragraph may be a charitable activity if the information disseminated:

  • meets the audience and distribution requirements
  • directs readers to resources of the charity that do meet the content requirement, such as detailed publications or webpages

67. For example, posting concise information on the limited space available on public transportation that identifies the symptoms of a specific health condition which can reasonably be expected to affect riders and directs readers to the charity’s detailed information sources may be charitable.

68. Generally, an organization will be expected to take steps to make the provision of existing publicly available information its own activityFootnote 48  by having input into the content. For example, a charity may write its own content; or adapt, or add to, content created by others to meet its specific needs.

69. When an organization does not have input into the content, it should be able to explain why the re-circulation of otherwise available information should be considered to meet the own activities requirement. Creating a website that simply re-posts existing health information or refers readers to other websites is not a dissemination of information activity that furthers a promotion of health purpose. In this situation, the organization does not have any input into the content of the information and is simply re-circulating information that is otherwise available.

70. However, this does not prevent a charity from re-circulating existing information as an incidental activity when furthering its promotion of health purposes.

71. Since the purpose being furthered must be charitable, providing information that promotes fundraising, or fundraising-related behaviours, such as donating to a cause does not constitute a charitable activity. For more information on fundraising activities, see Guidance CG-013, Fundraising by registered charities.

Providing medical clinics

72. Providing a medical clinic may be a charitable activity when it directly furthers a promotion of health purpose.

73. As a general rule, in order to meet the public benefit requirement, the services or products of a medical clinic must be available to the public at large. Any restriction on eligible beneficiaries must be justified based on the particular charitable purpose.Footnote 49  For example, a medical clinic specializing in prostate cancer may justifiably limit its services to men that are or may be afflicted with that health condition.

74. Medical clinics, like all charities, must ensure that their activities do not result in the provision of an unacceptable private benefit.

75. Examples of unacceptable private benefit in this context might include:

  • paying salaries/wages or paying for services or products, at rates that are more than fair market value
  • paying for expenses or providing bonuses that are not required to perform duties
  • using the services, materials, facilities or businesses of third parties; directors/trustees, members or staff; or persons/entities who do not deal at arm’s length with directors/trustees, members or staff, without an open and fair selection process and/or justification
  • promoting the work, services or businesses of persons or entities where such promotion is not incidental to achieving a charitable purpose

For more information, see Policy statement CPS-024.

Providing health care services in underserviced areas or areas of social and economic deprivation

76. The public benefit requirement prohibits the delivery of an unacceptable non-incidental private benefit. What is considered to be incidental is fact based and may vary depending on the circumstances.Footnote 50  Therefore, acceptable private benefits in underserviced areasFootnote 51 or in areas of social and economic deprivationFootnote 52 may be greater than what would be acceptable in other areas.

Charging fees

77. A charity can charge fees for health care services or products that directly further promotion of health purposes, as long as this is not done to further a profit purpose.Footnote 53  Concerns may also arise if the fees exclude members of the public to the extent that the purpose would not be considered to provide a benefit to the public or a sufficient section of the public. Whether members of the public are excluded from receiving a benefit, and whether an exclusion is to the extent that the purpose does not deliver a public benefit, are questions that will be decided based on the facts in each case.

78. Factors that will be taken into account include whether or not:

  • there is a sufficient general benefit to the community, directly or indirectly, from the existence of the service
  • the charges are set at a level that deters or excludes a substantial proportion of those people who could potentially be served by the organization
  • the charges are reasonable in the circumstances and typically not in excess of cost recovery. (Exceptionally, charges may, if appropriate to the overall purposes of the charity, be set at a rate that generates a surplus to help fund the organization’s charitable programs and activities for the benefit of the public.)
  • there are mechanisms in place to assist the poor to obtain the benefit

79. Registered charitable organizations and public foundations can also charge fees for health-related services or products that do not further a charitable purpose when doing so constitutes a related business activity. For more information about fees and charges, see Policy statement CPS-019, What is a related business, and Policy statement CPS-024.

D. Health-related activities that further other charitable purposes

80. Most health-related activities directly further promotion of health purposes. However, some health-related activities may further purposes that relieve poverty, advance education or advance religion. These health-related activities will be considered charitable if they directly further a charitable purposeFootnote 54  and meet all associated legal requirements.

Health-related activities that further relief of poverty purposes

81. The relief of poverty in the charitable sense means providing relief to the poor.Footnote 55  Many health-related activities directly further relief of poverty purposes.

82. Eligible beneficiaries of relief of poverty purposes must be limited to the poor. For more information see Policy statement CPS-024.

83. Examples of health-related activities that could directly further relief of poverty purposes include:

  • operating mobile clinics that deliver health care services to victims of natural disasters
  • providing eye glasses in developing countries
  • distributing mosquito nets in countries where malaria occurs

Health-related activities that further advancement of education purposes

84. The advancement of education in the charitable sense includes formally training the mind, advancing the knowledge or abilities of the recipient, or improving a useful branch of human knowledge.

85. To further advancement of education purposes, teaching and training activities must be sufficiently structured, have a teaching or learning component, and involve a legitimate, targeted attempt to educate.

86. Eligible beneficiaries of advancement of education purposes would generally be the public at large, unless a restriction can be justified. For more information see Policy statement CPS-024.

87. Examples of health-related activities that could directly further advancement of education purposes include:

  • teaching or training doctors, nurses, medical technicians or other health care providers
  • providing professional development opportunities such as mentoring programs

88. Organizations providing teaching or training relating to the provision of health care services or products must show that any health care services or products provided to patients as part of the educational activity meet the requirements relating to effectiveness set out in Appendix A, and quality and safety set out in Appendix B and Appendix C.

89. Health-related researchFootnote 56  may also further advancement of education purposes.

90. Examples of health-related research activities that could directly further advancement of education purposes include:

  • conducting research into causes and possible treatmentsFootnote 57  of [specify condition] and making the results publicly availableFootnote 58 
  • conducting clinical trials of drugs or natural health products

91. Organizations conducting research should see Policy statement CPS-029 for information on the legal and administrative requirements associated with conducting or funding research as a charitable activity.Footnote 59 

Health-related activities that further advancement of religion purposes

92. The advancement of religion in the charitable sense means manifesting, promoting sustaining and increasing belief in a religion’s three key attributes; namely, faith in a “higher unseen power” such as a God, Supreme Being or Entity; worship or reverence; and a particular and comprehensive system of doctrines and observances. There must be a clear and material connection between the activity and the religion’s key attributes to constitute advancement in the charitable sense.Footnote 60

93. Eligible beneficiaries of advancement of religion purposes are usually the public at large or a sufficient segment of the public. However, adherents of a particular religion may form a sufficient segment of the public under this charitable category. For more information see Policy statement CPS-024.

94. Generally, health-related activities may directly further advancement of a religion in two contexts:

  • when health care is provided to the public as an activity that promotes the doctrines of a religion. For example, a hospital operated by a religious organization can advance religion if the organization can show that helping the sick by providing health care service or products is clearly and materially connected to its religious doctrine, is a reasonable means of advancing that doctrine, and is being undertaken as a component of the advancement of the religion as a whole. The public must also be able to make the link between the operation of the hospital and the religion being advancedootnote 61 
  • when health care is provided to current or retired religious staff in support of religious contribution or service (past, current or future). For example, a religious order with purposes to advance religion operates a medical clinic for its current or retired religious staffootnote 62 

Appendix A: Requirements relating to the effectiveness of preventing or relieving a mental or physical health condition

1. Health care services and products used to prevent or relieve a health condition must be shown by an organizationFootnote 63 to be effective at eliminating the presence of or reducing the symptoms related to, that health condition. Decisions will be made on a case-by-case basis, following a review of all available relevant information.

2. In the absence of evidence to the contrary, health care services and products that are normally eligible for coverage for individuals with an identified health condition under the Canada Health Act or any provincial or territorial medical insurance service plan in Canada, will generally be considered as meeting the requirements relating to effectiveness as set out in this Appendix.

3. For health care services and products that require further proof of effectiveness, the following indicators may show the effectiveness of a health care service or product for individuals with an identified health condition, in the absence of evidence to the contrary.

A1) Is the effectiveness of the health care service or product for individuals with the identified health condition clearly recognized by Canadian provincial, territorial or federal health authorities, or by the Canadian Medical Association?

To meet this requirement, the organization must show that:

A) The effectiveness of the health care service or product has been recognized for individuals with the identified health condition by Health Canada, or a provincial or territorial health authority in Canada.

or

B) The effectiveness of the health care service or product has been recognized for individuals with the identified health condition by the Canadian Medical Association.

If yes to either A) or B), the requirements relating to effectiveness will generally be met. Continue to requirements relating to quality and safety in Appendix B and Appendix C.

If no, go to question A2.

A2) Is the effectiveness of the health care service or product for individuals with the identified health condition clearly recognized by specialized medical physicians?

To meet this requirement, the organization must show that the effectiveness of the health care service or product for individuals with the identified health condition is recognized for individuals with the identified health condition by at least three physicians with a specialty or certification in the identified health condition or area of medicine, who are licensed to practice medicine in Canada, and not affiliated with the organization, and each other. Examples of documentation that specialized medical physicians could provide to substantiate their position could include:

  • an overview of their expertise, qualifications and credentials in the specialized health discipline that qualifies them to treat individuals with the identified health condition

  • a summary of clinical observations related to using the identified health care service for individuals with the identified health condition, including evidence of effectiveness

  • reference to evidence-based clinical guidelines that support the health care service for individuals with the identified health condition (for example, outcomes databases such as: Cochrane Collaboration, National Guideline Clearinghouse

    Note: The CRA may consult, and rely upon other sources of information in addition to the documentation provided by specialized medical physicians.

If yes, the requirements relating to effectiveness will generally be met. Continue to requirements relating to quality and safety in Appendix B and Appendix C.

Appendix B: Quality and safety requirements relating to a health care service provider

1. To provide the required public benefit, a health care service provider must meet the quality and safety requirements relating to a health care service provider. In all cases, the onus is on the organization to demonstrate that its health care service providers are competent and able to provide safe health care services that are of sufficient quality when compared to those routinely provided within the Canadian health care system. For example, an organization diagnosing and treating medical conditions must ensure that its health care service providers are legally authorized to do so. The evidence needed to meet the quality and safety requirements relating to a health care service provider will be assessed based on the facts of each case, taking into account the nature of the health care service and all other relevant circumstances and information.

2. In general, the quality and safety requirements relating to a health care service provider will be met if the health care service is provided by a regulated health care service providerFootnote 64 licensed to practice in Canada. For organizations providing health care services outside of Canada, health care service providers will be expected to possess a current registration/license with a relevant national and/or professional body.

3. To demonstrate the quality and safety requirements relating to a health care service provider, organizations are expected to provide proof that the health care service provider’s membership with the applicable professional licensing body is in good standing. Organizations that have yet to operate should indicate how they will meet the quality and safety requirements relating to a health care service provider during the application process.

4. Some health care service providers, including many complementary or alternative health care service providers, may not be professionally licensed or regulated in the jurisdiction in which the organization carries on its activities. In such cases, the onus is on the organization to demonstrate how it meets the quality and safety requirements relating to a health care service provider and provides a charitable benefit to the public, in the absence of a professional, regulatory body.

5. The following indicators can be used to assess whether the quality and safety requirements relating to a health care service provider are met. For complementary or alternative health care services provided by non-regulated health care service providers, meeting these requirements will depend on the evidence provided under indicators B2) A), B) and C).

B1) Is the health care service provider currently licensed and in good standing with a professional regulatory body in Canada?

A) The health care service provider received credentials from an accredited public institution of higher learning in Canada (such as a university or college), and is currently licensed (in good standing) with a relevant professional regulatory body in the jurisdiction in which the health care service will be provided (inside or outside of Canada?);ootnote 65 or

B) The health care service provider received credentials from an accredited public institution of higher learning in Canada (such as a university or college), and is currently licensed (in good standing) with a relevant professional regulatory body outside the jurisdiction in which the health care service will be provided (but within Canada).

If yes, the quality and safety requirements relating to a health care service provider will generally be met.

If no, proceed to question B2.

B2) Is the unlicensed health care service provider providing health care services that are within acceptable parameters?

Is there objective evidence of common or widespread acceptance by persons who are knowledgeable and informed about the knowledge, skills and abilities required of health care service providers providing the same or similar services that:

A) the health care service provider has a reasonable degree of skill and knowledge, and will exercise the degree of care, skill and knowledge which would reasonably be expected of a normal, prudent practitioner of the same experience and standingFootnote 66 when providing the same or comparable health care services or products

B) the health care service provider is operating in an appropriate setting (depending on the nature of the health care service, this could mean a sanitary or confidential environment), based on the standard of care reasonably required of a health care service provider in that profession or area of practice

C) risks are being appropriately mitigated through protocols that are in place to ensure safety, and respond to adverse reactions/accidents, emergencies, negative or undesirable outcomes, and errors, based on the standard of care reasonably required of a health care service provider in that profession or area of practice

6. In all cases, the evidence must establish that the benefit resulting from the health care service outweighs the risk of negative or undesirable effects (that is; there must be a substantial net public benefit).Footnote 67 

Appendix C: Quality and safety requirements relating to a health care product

1. To deliver the required public benefit, health care products must meet the quality and safety requirements relating to a health care product. In all cases, the onus is on the organization to demonstrate that its health care products meet the applicable quality and safety requirements. Decisions will be made on a case-by-case basis, following a review of all available relevant information.

2. In the absence of evidence to the contrary, the following may be indicators that a health care product satisfies the quality and safety requirements relating to a health care product.

Medical devices

i. Medical devices used, distributed or sold in Canada

3. Class II, III and IV medical devices for use, distribution, or sale in Canada that meet current licensing requirements of the Therapeutic Products Directorate (TPD)Footnote 68 will generally be considered to meet the quality and safety requirements relating to a health care product (in the absence of evidence to the contrary). This standard applies whether the device is manufactured inside or outside Canada.

C1) Is the medical device a Class I medical device, or does the medical device appear on the Medical Device Active Listing (MDALL)?

If yes, go to C9.

If no, the quality and safety requirements relating to a health care product used, distributed or sold in Canada have not been met.

ii. Medical devices used, distributed or sold outside Canada

4. Medical devices for use, distribution or sale outside Canada that meet current licensing requirements of the TPD will generally be considered to meet the quality and safety requirements relating to a health care product (in the absence of evidence to the contrary). This standard applies whether the device is manufactured inside or outside Canada.

C2) Does the medical device appear on the Medical Device Active Listing (MDALL)?

If yes, go to C9.

If no, go to C3.

C3) Does the medical device meet all applicable national and international medical device standards recognized by the TPD, or all applicable International Standards recognized by four out of five regions/countries of the International Medical Device Regulators Forum (IMDRF)?

If yes, go to C9.

If no, the quality and safety requirements relating to a health care product used, distributed or sold outside Canada have not been met.

Drugs used or distributed in Canada

5. Drugs used in Canada that have a Drug Identification Number (DIN), and are used in a manner that is consistent with authorized conditions of useFootnote 69 will generally be considered to meet of the quality and safety requirements relating to a health care product (in the absence of evidence to the contrary).

C4) Does the drug appear on the Drug Product Database,Footnote 70 is it used in a manner that is consistent with authorized conditions of use, and does it meet Health Canada regulations concerning issues such as manufacturing, transporting, storing, importing, exporting, distribution, testing and disposal?

If yes, go to C10.

If no, the quality and safety requirements relating to a health care product have not been met.

Drugs used or distributed outside Canada

6. Drugs distributed for international development assistance or emergency aid in compliance World Health Organization (WHO)Footnote 71 Guidelines will generally be considered to satisfy quality and safety requirements relating to a health care product (in the absence of evidence to the contrary).

C5) Does the drug appear on a WHO Model List of Essential Medicines, and is the drug used or distributed in a manner consistent with the principles and objectives of the Guidelines for Medicine Donations issued by the WHO?

If yes, go to C10.

If no, the quality and safety requirements relating to a health care product have not been met.

Natural health products

C6) Is the natural health product in the Licensed Natural Health Products DatabaseFootnote 72 and does the natural health product meet Health Canada regulations concerning issues such as manufacturing, transporting, storing, importing, exporting, distribution, testing and disposal?

If yes, go to C11.

If no, go to question C7.

C7) Does the natural health product have either a Natural Product Number (NPN) or a Homeopathic Medicine Number (DIN-HMN),73 and does it meet Health Canada regulations concerning issues such as manufacturing, transporting, storing, importing, exporting, distribution, testing and disposal?

If yes, go to C9.

If no, go to question C8.

C8) Has the natural health product been reviewed positively on the database or the Natural Health Products Ingredients Database,ootnote 74 and does it meet Health Canada regulations concerning issues such as manufacturing, transporting, storing, importing, exporting, distribution, testing and disposal?

If yes

If no, quality and safety requirements relating to a health care product have not been met.

Recalls, advisories, and warnings

C9) Does the medical device appear in a Health Canada recall, advisory, and warning?

Go to Health Canada’s Medical Device Recall Listings and Health Canada’s archived Recalls and Safety Alerts Database.

If the medical device is not subject to an advisory, warning or recall, the quality and safety requirements relating to a medical device have been met (in the absence of evidence to the contrary).

C10) Does the drug appear in a Health Canada recall, advisory or warning?

Go to MedEffect™ Canada and Health Canada’s archived Recalls and Safety Alerts Database.

If the drug is not subject to an advisory, warning or recall, the quality and safety requirements relating to drug have been met (in the absence of evidence to the contrary).

C11) Does the natural health care product appear in a Health Canada recall, advisory or warning?

Go to MedEffect™ Canada and Health Canada’s archived Recalls and Safety Alerts Database.

If the natural health product is not subject to an advisory, warning or recall, the quality and safety requirements relating to a health care product have been met (in the absence of evidence to the contrary).

Footnotes

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