FB6. Our church, which is a registered charity, would like to start a shop to sell prayer books and religious objects in our church hall. Merchandise would be sold at cost, by staff hired to run the shop.

FB6. Our church, which is a registered charity, would like to start a shop to sell prayer books and religious objects in our church hall. Merchandise would be sold at cost, by staff hired to run the shop. Is it permissible for our church to carry on this type of activity on church premises?

Yes, as long as a project such as the shop falls within the charitable objects of your church, then it is likely that the CRA would consider it to be a related business. The Canada Revenue Agency considers the nature of the business and whether it has a direct connection to the charity’s purpose. It has identified four forms of linkage:
  • the business is a usual and necessary concomitant of charitable programs (for example, a hospital cafeteria);
  • the business is an offshoot of a charitable program (for example, a heritage farm sells bread made from flour milled on the farm);
  • the business is a use for excess capacity of the charity’s assets and staff; (for example, a university renting out dorm rooms during the summer)and
  • the business involves the sale of items that promote the charity or its objects. (for example, girl guide cookies).

This type of activity would likely fall within the category of sales of items that promote the charity or its objects. However, if the scope or mandate of the shop moved beyond its connection with the church – eg, if your organization started to sell products without a religious significance – then potentially it would no longer qualify.