Court frees charities from restrictions on political activity
Harper government audited many Canadian charities
Since 1985, the Canada Revenue Agency (CRA) has banned outright any formal political partisanship by registered charities, such as active support for or opposition to a candidate for election or a political party. Nonetheless, the CRA has permitted charities to carry out a limited amount of non-partisan political activity in support of their charitable purposes, such as communicating or meeting with politicians, provided they devote no more than 10 per cent of their resources to those activities. The purpose of this limitation on political activity is to prevent any misrepresentation of political work as charitable work, so as to ensure that charitable donors are not misled.
In 2012, Steven Harper’s Conservative government changed all that with the introduction of a $13.4 million Political Activity Audit Program. It required the CRA to undertake audits of charities that the government thought might be politically active against it, to determine if charities were acting outside of the 10 per cent rule in a partisan political way. The implied threat of the withdrawal of charitable status had a chilling effect on many charities, because it meant that they would no longer be able to issue tax receipts for donations which, as a consequence, would likely dry up.
Even though Lawyers' Rights Watch Canada complained to the UN Human Rights Council about the government’s politically motivated harassment of Canadian charities, the program thrived, targeting 60 charities. Some of those affected were Dying with Dignity Canada and Physicians for Global Survival – both of whom had their charitable registrations revoked; Environmental Defence, the David Suzuki Foundation, Oxfam Canada and Canada Without Poverty. In effect, charities perceived to be advocating in opposition to government policies were having their political wings clipped and Canada’s tax agency was being used to carry out the government’s own political agenda.
In May, 2015, the Trudeau Liberals announced the end of the audit program, following a report from an expert panel that urged more political freedom for charities. The new government did not, however, create new policies or rules to make that happen. Instead, the Ontario Superior Court ruled last week against the 10 per cent limitation on non-partisan political activity, stating that the restriction was an unconstitutional limit on freedom of expression as guaranteed in the Charter of Rights and Freedoms.
The action was brought by an Ottawabased charity, Canada Without Poverty, which had been under formal CRA notice of losing its charitable status since 2016. The ruling means that while charities still cannot be politically partisan in relation to an election candidate or political party – that prohibition was not challenged – there are now no restrictions on the freedom of charities to engage in their own non-partisan political activity.
This is an excellent ruling and here’s why. First, charities should be free to decide for themselves the extent to which they choose to be politically active and the impact that such political activity might have on their donations or community standing. Second, donors should be free to decide for themselves whether the political activity of a charity will encourage or discourage their donations. Third, charitable activity can engage more people in the political process, from which the entire community can benefit. And finally, as I first wrote in this space in 2016, the audit program was a camouflage for an agenda of the muzzling of government critics that was alarming to those who value freedom of expression. The federal government should embrace this as a starting point for a new regulatory regime that permits an increased level of freedom of political expression for all charities.