Ontario nonprofits and charities are subject to an archaic federal regulatory framework that hampers their ability to meet their missions. The Government of Canada should create an enabling federal policy environment for nonprofits to engage in public policy advocacy, earn income, and otherwise undertake activities to achieve their missions, including by implementing the court’s decision to end the regulation of non-partisan policy advocacy by Canada’s charities – and implement a charities regulation framework that regulates charitable purposes rather than activities.
Charities and nonprofits play a critical role in Canadian society to address issues that face communities across the country. Child welfare services, the integration of people with disabilities into community life, hospices for end-of-life care and reductions in acid rain are some of the many services, laws and regulations provided by government today that were shaped by local charitable organizations with their perspectives and on-the-ground knowledge. This role requires the charitable sector to engage in “political activities” to help shape the policy and laws that have an impact on their work with the people and the communities they serve. The Superior Court of Ontario in Canada Without Poverty v Attorney General ruled it is a charity’s right to engage in unlimited nonpartisan political activities. The Court struck down:
- The CRA’s 10% limit on nonpartisan political activities
- The Income Tax Act section that distinguishes between charitable and political activities
This is a golden opportunity for the Government of Canada to fully implement the recommendations of the Consultation Panel on Political Activity. In addition to what the court found, the recommendations included:
The Government of Canada reviewed the regulation of political activity by charities and in 2017 the Consultation Panel on Political Activity released its report and recommendations. In addition to what the court found, the recommendations included:
- Removing the requirement to separately account for political activity on charities’ annual filings (T3010 reports)
- Modernizing the legislative framework governing the charitable sector more broadly
However, we’re still waiting for action. The government has yet to move on the court’s decision or the recommendations of the Consultation Panel on Political Activity. Until they do charities have the right to engage in as much nonpartisan political activities as furthers their charitable purposes, but the sector will lack guidance on the CRA’s new position.
For more information: Imagine Canada
Environmental Defense action campaign including a petition for individuals to add their support.
The CRA Political Activity Consultations: Context and Recommendations for Charities and Nonprofits – Resetting the definition of charities’ work in public policy with Bill Schaper (Imagine Canada), Richard Keith (Environmental Defence), and Cathy Taylor (ONN): webinar recording; webinar slide deck
Imagine Canada submission to the CRA: Political activities by registered charities
Imagine Canada’s Call to Action on CRA’s political activities consultation
Canada Revenue Agency: Consultation on charities’ political activities
Imagine Canada report: How Has the Advocacy Chill Affected Charities?
Infographic – Nonprofits Step Up: The role of nonprofits in democracy
Charities and nonprofits play a critical role in Canadian society to address issues that face communities across the country. Child welfare services, the integration of people with disabilities into community life, hospices for end-of-life care and reductions in acid rain are some of the many services, laws and regulations provided by government today that were shaped by local charitable organizations with their perspectives and on-the-ground knowledge.
This role requires the charitable sector to engage in “political activities” to help shape the policy and laws that have an impact on their work with the people and the communities they serve.
The Government of Canada has committed to review the regulation of political activity by charities. It conducted a public consultation to which many responded.
Imagine Canada developed a position on political activities. ONN supports its recommendation that:
The Income Tax Act be amended to restore an emphasis on charitable purposes, rather than regulating how charities achieve those purposes.
The focus on activities, including political activities, in the Income Tax Act should be removed. The prohibition on partisan political activity would remain.
We echo all of Imagine Canada’s recommendations about clarifying definitions and scope regarding partisan political activity so that we can be more confident in engaging in our work.
Changing the Income Tax Act to focus on purposes, rather than activities, could have spillover effects beyond charities’ public policy work. For example, it would likely mean a rethinking of the regulations that govern charities’ business activities. We are committed to working with the CRA to ensure that such changes benefit the sector’s work.
Amending the Income Tax Act to focus on charitable purposes rather than activities would not grant charities the right to engage in partisan activity. Indeed, we strongly support the prohibition on partisan activity by charities.
Amending the Income Tax Act would also not facilitate the rise of “single issue” organizations, set up for the sole purpose of proposing or opposing a law or policy. The common law already prohibits those organizations from becoming charities; changing the Income Tax Act would have no effect on that common law provision.
There is a troubling discrepancy between charities’ ability to engage the public on policy matters and the ability of the private sector to do so. As included in Imagine Canada’s brief (page 3):
“In recent public discourse, some of these restrictions have been justified based on the unique tax treatment that charities receive. This is not an adequate rationale for restricting charities in comparison to other types of organization.
Other organizations face no limits on the resources they can devote to “political activity.” This is despite the fact that:
– Other sectors also benefit from substantial tax expenditures and direct public funding.
– Charities are the only sector required, by law, to act in the public interest.
– Charities are the only sector required, by law, to use well-reasoned and truthful arguments when discussing public policy.
Limiting charities’ ability to engage the public is bad for democratic dialogue, particularly when our organizations are constituted for and required to act in the public benefit.”