| October 18, 1990 | |
| W.S. Hume | Business and General |
| Director | Division |
| Examination Division | Bill Guglich |
| (613) 957-2102 | |
| Dennis Sheard | |
| 7-902446 |
SUBJECT: 24(1)
This in reply to your memorandum of September 13, 1990 concerning the status under paragraphs 149(1)(l) and 149(1)(k) of the Act.
Paragraph 149(1)(l)
24(1)
Paragraph 149(1)(k)
24(1) A labour organization must be just that it must carry on labour related activities. 24(1)
The term "benevolent or fraternal benefit society or order" is not defined in the Act and we are also not aware of any jurisprudence where the courts sought to delve into this question. Therefore it is our view that we should look at the phrase in the common ordinary sense.
Black's Law Dictionary describes a fraternal benefit association as "one whose members have adopted the same, or a very similar, calling avocation, or profession, or who are working in union to accomplish some worthy objet and who for that reason have banded themselves together as an association or society to aid and assist one another, and to promote the common cause. An association having a representative form of government and a lodge system with a ritualistic form of work for the meeting of its chapters, or other subordinate bodies. A society or voluntary association organized and carried on for the mutual aid and benefit of its members, not for profit; which ordinarily has a lodge system, a ritualistic form of work a representative government, makes provision for the payment of death benefits and (sometimes) for benefits in case of accident, sickness, or old age, the funds being derived from dues paid or assessment levied on the members".
Blacks Law Dictionary defines benevolent as "philanthropic; humane; having a desire or purpose to do good to man; intended for conferring of benefits, rather than for gain or profit; loving others and actively desirous of their well being".
Consequently, 24(1)
Subsection 149(3) of the Act provides that the exemption in paragraph 149(1)(k) does not apply to taxable income derived from carrying on a life insurance business. The provision of death benefits would in our view be considered a "life insurance business" within the meaning of that definition in subsection 248(1) of the Act. The exemption also does not apply to any gains from the sale of any property used or held in the course of carrying on a life insurance business. 24(1)
We trust this will be of assistance to you.
B.W. DathDirectorBusiness and General DivisionRulings DirectorateLegislative and IntergovernmentalAffairs Branch