City council has no legal grounds to deny grant money to Pride over the gay festival’s refusal to ban the group Queers Against Israeli Apartheid, Toronto’s chief lawyer has told Mayor Rob Ford’s executive committee.

In a confidential and frank April report obtained by the Star, city solicitor Anna Kinastowski says she “cannot recommend” that council require Pride to ban the phrase “Israeli apartheid” as a condition of receiving taxpayer funds.

Kinastowski writes: “The term ‘Israeli Apartheid’ does not violate the city’s human rights policy, does not appear to violate the Ontario Human Rights Code, and does not appear to constitute ‘hate’ as the (Supreme) Court has interpreted it and would therefore appear to fall within the realm of potentially ‘offensive’ yet protected speech.”

The committee will again discuss Queers Against Israeli Apartheid (QuAIA) on Tuesday during a debate on the city’s anti-discrimination policy for grant recipients. Pride’s annual grant — about $124,000 last year — will be debated by council in June, only 10 days before the festival begins.

Pro-Israel councillors have repeatedly and unsuccessfully sought to find a way to tweak city rules in a way that might prevent the activist group from marching in the annual Pride parade. Councillor James Pasternak, who does not sit on the executive, has even floated the idea of offering Pride a “diversity bonus” for excluding QuAIA.

Citing a February Supreme Court decision, Kinastowski also warns against a 2012 suggestion from the executive to change the anti-discrimination policy to prohibit “anything which shows a lack of respect for all persons.”

Kinastowski, cautioning against imposing “an overbroad standard for ‘discrimination,’ ” says such a policy would be “unlikely to withstand a court challenge” on freedom-of-speech grounds.

“That’s what we know. I mean, it’s not a secret. Every single report that comes out says we don’t violate any hate laws or anything like that,” said QuAIA member Tony Souza. “We’re not breaking any laws, and we certainly don’t ‘hate’ anybody. We just want justice in Palestine.”

“I don’t think the question is a legal question — I think the question is one of morality and divisiveness,” said Avi Benlolo, chief executive of the pro-Israel Friends of Simon Wiesenthal Center for Holocaust Studies. “And if we want to live in a pluralistic society where we demonstrate respect for one another, then there’s just morality. . . . We’re just saying to the city we don’t think this is socially acceptable.”