OTTAWA -- Goups that promote and organize youth sports do not qualify for charitable status under the Income Tax Act, the Supreme Court of Canada said Friday in a ruling with consequences for volunteer and community sporting bodies across the country.

However, the court also said "it may be desirable" for Parliament to change the Income Tax Act through legislation, so that sports associations can become charities.

The decision clarifies the legal rights of amateur sporting groups that seek to issue income tax receipts to people who give them money.

The court says Revenue Canada was right to refuse charitable status to the Amateur Youth Soccer Association, a non-profit group that promotes soccer for young people across Ontario.

The association argued that because it encourages fitness, teamwork and "healthy and socially beneficial attitudes" among its members, it should qualify as a charity.

But Friday's decision, written by Justice Marshall Rothstein, says neither sport nor side-benefits such as health and fitness qualify as charitable activities, according to an old common law test on "charitable uses" that dates back to 1601.

The 1601 list includes among its accepted good causes the "relief of aged, impotent and poor people ... the repair of bridges ... marriages of poor maids," and the "help of young tradesmen, handicraftsmen, and persons decayed."

However that list was simplified and updated in 1891 to include four broader categories of charitable work: the advancement of education or religion, helping the poor, and other purposes "beneficial to the community."

"Participating in sport is generally beneficial," the Supreme Court said, but sport alone does not make an organization charitable, unless it has another core purpose, such as education.

Revenue Canada argued that 21 per cent of all non-profit organizations in the country were sports and recreation groups, and that potentially recognizing all of them as charities would have a major impact on the income tax system.

Any such major changes, the court says, should come through legislation -- as occurred last year in Britain, which conferred charitable status on groups that "advance amateur sport."

"While it may be desirable as a matter of policy to give sports associations the tax advantages of charitable status," the court says, "it is a task better suited to Parliament than the courts."

Ottawa has already made one such change. After Canada's poor showing in the 1968 Olympics in Mexico City, the federal government tried to encourage elite athletes by allowing national, high-performance amateur sporting associations qualify for charitable donations.

The Federal Court of Appeal, which ruled on this case before it reached the Supreme Court, said this section of the Income Tax Act is the only one through which a sports group can qualify as a charity - but that it has to be national in scope.

The Supreme Court has overturned that narrow interpretation, saying the best way to figure out if sports groups can be called charities is through the four legal categories set out in 1891.

And even then, the decision says: "Sport, if ancillary to another recognized charitable purpose such as education can be charitable, but not sport in itself."