The Power of Perspectives

The Canadian Bar Association

Kim Covert

Political activities for charities: Reframe the question

January 9 2017 9 January 2017

The personal is political – and so is the charitable it seems. Federal regulations limiting activities of a political nature have left charities tying themselves into knots and spending valuable resources trying to decide whether any given activity or statement is political – or more importantly perhaps, could be perceived to be so.

The problem is worsened by the fact that many things a charity does can be seen through the lens of political activity. Charities have a unique role to play in public policy debates, as acknowledged in the government’s public policy guidance on political activities, which states in part:

Through their dedicated delivery of essential programs, many charities have acquired a wealth of knowledge about how government policies affect peoples’ lives. Charities are well-placed to study, assess, and comment on those government policies. Canadians benefit from the efforts of charities and the practical, innovative ways they use to resolve complex issues related to delivering social services. Beyond service delivery, their expertise is also a vital source of information for governments to help guide policy decisions. It is therefore essential that charities continue to offer their direct knowledge of social issues to public policy debates.

But with limits placed on political activities, many in the voluntary sector feel it’s not worth the risk to undertake them.

There is a “lack of confidence and reluctance in carrying out permitted political activities even to the allowable limit,” the CBA’s Charities and Not for Profit Law Section says in a submission to the Canada Revenue Agency. “Fear of reprisal (penalties, audits) and uncertainty about the rules has led to a chilling effect on charities.”

A total of 54 charities had been caught up in Canada Revenue Agency’s political-activity audits – audits accused of targeting charities seen to be critical of Stephen Harper’s Conservative government – and five charities had been given notice that they would lose their charitable registration, according to news reports. One of the Liberals’ campaign promises had been to roll back those audits, though they allowed audits that had already begun when they took office to continue.

In late 2016 the CRA launched consultations to clarify the rules for charities’ participation in political activities. The CBA submission was limited to section 149.1 of the Income Tax Act and the questions posed in the online consultation. It lays out the challenges charities face and the ways the policy guidance can be improved.

But clearing up the confusion over what political activities charities should be engaged in could be a matter of reframing the question: emphasize first and foremost that permissible charitable activities are those which further a charity’s charitable purposes. In that way, regardless of “unstated collateral political purposes,” a charity is either behaving in a way that furthers its charitable purposes or it is not. Full stop.

The only impermissible political activities should be partisan activities, the Section says. It also recommends that the CRA stop relying on the political purposes doctrine and move away from the 10 per cent rule.

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