Changes to the Income Tax Act increase charities’ freedom to engage in nonpartisan political activities
Last July, Justice Morgan of the Ontario Superior Court concluded that the Canada Revenue Agency’s 10 percent resources cap on political activities posed an unconstitutional restriction on charities’ freedom of expression. On February 8, the Charity Law Interest Group, in partnership with the Osgoode Charity Law Association, and with support from Law Union, Animal Justice, and others, hosted a conference to try and explain the implications to the charitable sector.
The conference focused on the federal government’s amendment of the Income Tax Act and the corresponding updates to CRA policy. The change would permit unlimited nonpartisan political involvement under the new category of public policy dialogue and development activities carried on in furtherance of a charitable purpose.
Professor Adam Parachin from Osgoode, the first speaker of the day, gave participants an overview of the history of charity law, including its reliance on common law for what constitutes charitable purposes and activities. He also provided an overview of how political activities had been treated as non-charitable. Professor Parachin highlighted the need to maintain a separation between charity and government. He noted that simply because something constitutes a charitable goal does not mean that it should become a goal of state actors. For example, a religious charity may have charitable goals, but a theocracy is not desirable.
This overview was followed by the CRA’s first public presentation since releasing draft interpretive guidance on the above-mentioned changes to the ITA. Zachary Euler came to explain how these changes will affect charities in Canada and reminded participants that the CRA is soliciting feedback about these revisions until April. Mr. Euler clarified that although charities may now engage in public policy dialogue, they were still restricted from using any resources to engage in partisan activities such as supporting or opposing specific parties or candidates. The charity’s purpose must likewise not refer to political activities. If a charity chooses to engage in public policy dialogue, it must be consistent with its apolitical purposes and it must provide a public benefit.
The changes to the ITA have not been universally well received. Gail Picco, a charity consultant and strategist, noted that these changes would likely favour large charities which already have influence, and organizations whose advocacy may not benefit all Canadians (such as groups advocating against public health care and education, religious tolerance, etc). Robert Hayhoe, a partner with Miller Thomson’s Charity Group, countered that the effects Gail feared were likely already possible under the previous law.
The final panel included Cathy Taylor from the Ontario Nonprofit Network, Bruce MacDonald from Imagine Canada, and Tim Gray from Environmental Defence. They echoed the continued need for separation between government and charity but celebrated the reduced limitations on and greater clarity for charities. In particular, they highlighted the substantial reduction in administrative costs associated with the new model, as charities are no longer required to account for every minute and dollar that relate to the nebulous concept of “political activity.” Likewise, for some organizations, the most effective way to support their goals has been to drive public policy and so this frees up resources that would otherwise have been tied to less effective programming.
Although there is still much ambiguity about how these changes will play out in charity law, participants are now better prepared.
*Tali Chernin is an executive member of the Charity Law Interest Group and she is the Director of Animal Justice.
