Back To Law Matters | Summer 2015

Re-Framing the Trinity Western University Debate

Tax, Trans and Intersex Issues

The lenses of tax law and trans1 and intersex issues provide a fresh perspective on the Trinity Western University (“TWU”) debate. This article explores four arguments that, to the author’s knowledge, have been absent from the public and legal discourse on TWU thus far. Each of these arguments could stand alone, so this article should be read as having four separate theses rather than expounding four premises supporting one thesis. The arguments are as follows:

  1. TWU is Publicly Funded;
  2. TWU Should Lose its Charitable Tax Status;
  3. TWU was Further Subsidized by Aggressive Tax Planning While Arguing it was a Private Institution before the Supreme Court of Canada; and
  4. Existing Charter-balancing Decisions on TWU are Deficient Since they fail to Account for Trans and Intersex Rights.

TWU has an opportunity to make a valuable contribution to the Canadian legal profession, since its Covenant emphasizes positive character traits the public would value in its lawyers. This makes it even more disappointing that TWU is pursuing litigation through Canadian courts to legalize its exclusion of LGBTQI2 people from its proposed law school. 

1. TWU is Publicly Funded

TWU is the recipient of direct public funding, as well as funding through the tax system. Its charitable tax status grants it an exemption from income tax, and it is exempt from a number of property tax statutes under section 14 of BC’sTrinity Western University Foundation ActSBC 1989, c 82. TWU’s charitable tax status also grants it the ability to issue charitable tax receipts. Charitable donation tax credits enable donors to give more money to TWU, since their donations entitle them to a tax subsidy offsetting part of their contribution. The federal Department of Finance accounts for spending through the tax system in an annual tax expenditure report. The charitable donation tax credit is the first item on the 2014 report, projecting that an estimated $2.305 billion in tax revenue was foregone in 2014 alone. 

Information about government funding and donations received by TWU is publicly available on the CRA’s website. In TWU’s 2014 fiscal period, the most recent period for which its financial information is available on the CRA website, TWU received $1,054,643 in direct government funding, and $10,585,806, in receipted charitable donations, representing 13% of its total revenue for the period. 

TWU’s receipted charitable donations in its 2014 fiscal period are higher in both absolute terms, and as a percentage of TWU’s total budget, than in any of the previous 4 fiscal periods. TWU’s receipted charitable donations jumped from $5,498,766 in its 2013 fiscal period to almost twice that amount, $10,585,806, in its 2014 fiscal period. That latter fiscal period ended April 30, 2014, coinciding with a storm of controversy around TWU’s applications for accreditation of its law school. 

What precipitated this massive increase in donations during TWU’s 2014 fiscal period? Could it have been related to impending legal challenges that TWU would need to pursue through the courts? In answer to the question on the Registered Charity Information Return’s question, “Did the charity carry on any political activities during the fiscal period?” TWU answered “No”, and claims that $0 and 0% of its budget was devoted to political activities. Yet the return also tells us that TWU spent $1,293,254 on fundraising in the 2014 fiscal period, including through “Advertisements / print / radio / TV commercials”, “Internet”, “Mail campaigns”, “Targeted contacts”, “Telephone / TV solicitations”, and, troublingly, “Cause-related marketing”. 

Canadian taxpayers deserve an audit into what “cause-related marketing” TWU was engaged in, and whether it was related to TWU’ legal agenda, since public tax dollars support TWU’s advertising campaigns. As I have argued elsewhere, TWU’s advertising and legal campaigns could be considered political activity under the political purposes doctrine in charity law, since donated funds support TWU’s pursuit of legal protection for its exclusion of LGBTQI law students.  

2.  TWU Should Lose its Charitable Status

Even if TWU is found not to engage in political activities sufficient to revoke its charitable status, it falls afoul of another doctrine in Canadian charity law. Charitable tax status can be revoked for the pursuit of activities contrary to public policy. TWU can be said with certainty to be engaging in activities contrary to public policies protecting LGBTQI people that are explicit in the Charter, regardless of whether courts ultimately decide the Charter applies to TWU. 

Supporters of TWU might argue that its charitable status would be saved by an invocation of freedom of religion or expression. It would not. Those freedoms cannot be used to guarantee access to public funding. Protection of TWU’s freedom of religion implies freedom from interference (subject to the balancing of other Charter rights), not freedom to claim an absolute right to charitable tax status. 

Anti-abortion organizations disseminating pro-life literature have attempted to invoke freedom of expression to maintain charitable status despite engaging in significant political activities. The Federal Court of Appeal in Human Life International in Canada Inc. v Canada[1998] 3 FC 202 (FCA) rejected this argument in a single paragraph, explaining, 

The appellant is in no way restricted by the Income Tax Act from disseminating any views or opinions whatever. The guarantee of freedom of expression in paragraph 2(b) of the Charter is not a guarantee of public funding through tax exemptions for the propagation of opinions no matter how good or how sincerely held. (Para 18, followed in Alliance for Life v Canada[1999] 3 FC 504 (FCA)).

Although freedom of expression is distinct from freedom of religion, the same logic applies: denying TWU access to public funding in the form of tax exemptions and credits in no way restricts its freedom of religion. Regardless of whether courts decide that TWU may continue to deny an education to LGBTQI people, TWU ought to be denied charitable tax status as long as it continues to discriminate against them. 

3.  TWU was Further Subsidized by Aggressive Tax Planning While Arguing it was a Private Institution before the Supreme Court of Canada

Throughout 2000 to 2003, representations were made to families of TWU students that they could have up to 45% of TWU students’ tuition covered by tax credits, where tuition payments were characterized as charitable “donations”. Students of TWU were instructed to solicit “donations” from family and friends to a registered charity that provided “scholarships” to TWU students. The registered charity, the National Foundation for Christian Leadership (“NFCL”), also operated this scheme for a handful of other Christian educational organizations. The NFCL’s “scholarships” were provided to the same students who had solicited corresponding “donations”. “Donors” received charitable tax receipts for these payments. 

This scheme enabled parents of TWU students to claim charitable tax credits on payments that were, in economic substance, tuition payments ultimately directed to TWU for the benefit of their children. The tax benefits this scheme provided to families of TWU students were also subsidies to TWU because they shifted part of TWU’s tuition (roughly three times that charged for comparable programs at other Canadian universities) to all Canadian taxpayers in the form of tax reductions for “donors”. These benefits were eventually denied to “donors” when the scheme was found to be unsupported in Canadian tax law by both the Tax Court of Canada and the Federal Court of Appeal

Justice Campbell Miller of the Tax Court called it “disturbing” that “the objective evidence points so very clearly to an understanding, indeed a knowledge, at the time of donation, that 80 to 100% of monies they donated would go to cover the education cost of those students who solicited the funds – primarily their offspring” (Coleman v Canada,2010 TCC 109 at para 35). However, no penalty was imposed on TWU for its involvement in this tax plan, so as an institution TWU retained the benefits of the scheme. 

The period during which the NFCL scheme was in place overlaps with the period that TWU was before the Supreme Court of Canada in Trinity Western University v British Columbia College of Teachers2001 SCC 31. A key argument in that case was that TWU was a private institution, and that therefore the Charter could not be applied. The case was heard in 2000 with a decision released in 2001, all while TWU was benefitting from the NFCL scheme in addition to receiving tax exemptions and credits. It should further be noted that the scheme preserved students’ ability to claim the tuition tax credit on the full value of their tuition, so that students of TWU and their parents were double-claiming credits on the same amount. 

That TWU would represent to the Supreme Court that it was privately funded, while parents were told that Canadian taxpayers would reimburse almost half of TWU’s tuition, casts into doubt TWU’s commitment to the virtues expressed its own Covenant, let alone its commitment to train virtuous Christian lawyers. TWU’s administration has yet to acknowledge its involvement in this aggressive tax planning scheme, or apologize to Canadian taxpayers. 

In 2011, the president of TWU declined to comment on the tax credit scheme when approached by the media, on grounds that the scheme was in place prior to his tenure, and that he didn’t “fully understand the issue”. An estimated $12 million in tax receipts were issued under this scheme, so for TWU’s senior administration to deny knowledge of its involvement is disingenuous at best. 

4.  Existing Charter-balancing Decisions on TWU are Deficient Since they fail to Account for Trans and Intersex Rights

No Charter-balancing court decision on TWU has analyzed trans or intersex issues. This is an unfortunate omission, since claims that LGBTQI people have the option to avoid TWU, and that “same-sex” sexual activity is a matter of behavioural choice, are thoroughly demolished with even a cursory analysis of trans and intersex issues. 

I have written elsewhere about the complications that the diversity of intersex and trans identities present to enforcement of TWU’s Covenant where those individuals might be members of the TWU community. The problems with applying the Covenant to trans and intersex people can be illustrated even assuming that no members of TWU are currently, or ever will be, trans or intersex. 

Consider the following hypothetical: a female student is enrolled at TWU. On paper, she is married to a man who is not a member of the TWU community. While the female student is in the middle of completing her degree, her husband comes out as a trans woman, and informs the TWU student of a plan to medically transition from male to female. TWU’s Covenant discourages divorce, and as is often the case for couples in these circumstances, the TWU student and her spouse decide they will try to make the marriage work. Once the trans woman spouse (formerly the husband) has legally changed her sex to female, the couple will be a same-sex couple in the eyes of the law. 

Even if TWU took the position that transitioning is prohibited by the Covenant, the student enrolled at TWU is not the one undergoing transition in this hypothetical. She is respecting the Covenant by doing her best to preserve her marriage to a person she loves, but she is in contravention of the rule that marital intimacy must be reserved for one “man” and one “woman”.

The hypothetical becomes even more complicated if we assume the TWU student is a male and is married, on paper, to a woman who transitions to male. It would be possible for this latter couple to engage in marital intimacy for the purposes of procreation, in compliance with the terms of the Covenant, even after the trans spouse appears to all observers as male

The harm done by the myth that “same-sex” relations are a matter of choice is perhaps most dramatic for intersex people. There is wide range of biological variation in human sexes, besides the expected XY/male and XX/female. These intersex differences occur naturally. Estimates of the number of intersex people in the general population range from as few as 1 in 2,000 to as much as 1.7% of the population. Even at the lowest estimates, it is probable from the number of students currently and previously enrolled at TWU that TWU has already had, and may currently have, intersex members of its student body. 

Many intersex people learn of their intersex difference later in life, and thus may already be enrolled at TWU, and possibly already married, at the time of discovery. Cases of so-called “same-sex” marriage that would have otherwise been prohibited, resulting from intersex difference, have been documented by doctors since the late 1800s. The Intersex Society of North America has pointed out the contemporary problem posed by the prohibition of “same-sex” marriage for intersex people:

… lots of people with intersex we know can’t get legally married, because some doctor decided for them which sex they would count as forever more. Why should a doctor get to decide who you can grow up to marry?

Many intersex people identify strongly as either male or female. They have the right to have their identities respected by those around them, even if their identities do not match their sex assigned at birth. Others, such as Shon Klose, adopt a non-binary gender identity. Shon Klose has written movingly about the physical and emotional harm done by attempts to force a female gender role on them when their intersex difference was discovered. In Shon Klose’s case, they learned of their intersex difference while applying for a nursing degree. Interference with Shon’s body and gender identity continued into their time as a student, causing emotional trauma for which they were not offered counselling by doctors pushing surgery as Shon’s only option. 

TWU would be hard-pressed to argue that it has a right to determine such a student’s gender identity and choice of marriage partner, given the trauma this sort of determination is known to cause intersex people. If TWU decided to make exceptions for intersex people in applying the Covenant, it would run into an irresolvable problem in determining who had a right to an exception, given the wide range of chromosomal and physical arrangements that make up a person’s sex or intersex difference. It would also cause unfairness to gay and lesbian students, who similarly have no choice about their sex, gender identity and sexual orientation. 

None of the court decisions on TWU discuss trans or intersex rights in their Charter balancing exercises. Transgender individuals are mentioned only in passing, with the Nova Scotia Supreme Court’s decision in Trinity Western University v Nova Scotia Barristers’ Society, 2015 NSSC 25 appearing to use the acronyms “LGB” and “LGBT” interchangeably, with no analysis of transgender rights. The reasons given by the courts suggest, disappointingly, that trans and intersex issues were not raised by counsel, even though trans and intersex people are often vocal and active members of the LGBTQI community. As long as courts perform Charter-balancing exercises involving LGBTQI equality while omitting the “T” and the “I”, their analyses are incomplete.

A Higher Standard of Conduct in the Legal Profession

As unfortunate as TWU’s exclusion of LGBTQI people is, select parts of its Covenant could incrementally improve the calibre and reputation of the legal profession in Canada. The Covenant requires members of the TWU community to “commit themselves to: cultivate Christian virtues, such as love, joy, peace, patience, kindness, goodness, faithfulness, gentleness, self-control, compassion, humility, forgiveness, peacemaking, mercy and justice”. These virtues, in a secular context, might be referred to as positive character traits. 

These traits are not incompatible with fearless advocacy; they could improve advocacy where lawyers develop a reputation for integrity in their dealings with clients and opposing counsel. Such commitments, if taken seriously, could go a long way in curing the culture of callous competition cultivated in most Canadian law schools and in law firms themselves. The bar has long recognized a lack of public confidence in the moral fiber of lawyers, as is demonstrated by the Ontario Bar Association’s “Why I Went to Law School” campaign, which aimed to help the public “get to know lawyers in a different way”. 

A law school that promotes the virtues embodied in TWU’s Covenant would be revolutionary in a profession characterized by a hired gun mentality. TWU has the potential to produce lawyers who have committed, at least for the duration of their studies, to a much higher standard of conduct than law societies’ vague good character requirements. It is therefore doubly disappointing that TWU continues to openly oppose LGBTQI equality, and use public funds to do so. 


  1. I use “trans” here to refer to transgender and transsexual individuals who have a binary (male or female) gender identity. 
  2. I am using the acronym LGBTQI to stand for lesbian, gay, bisexual, transgender/transsexual, queer and intersex people.