{"id":27759,"date":"2018-10-12T14:42:37","date_gmt":"2018-10-12T18:42:37","guid":{"rendered":"https:\/\/www.cccc.org\/news_blogs\/?p=27759"},"modified":"2020-07-27T08:54:25","modified_gmt":"2020-07-27T12:54:25","slug":"governments-response-to-unconstitutional-political-activity-limits","status":"publish","type":"post","link":"https:\/\/cccc.org\/news_blogs\/legal\/2018\/10\/12\/governments-response-to-unconstitutional-political-activity-limits\/","title":{"rendered":"Government’s Response to Unconstitutional Political Activity Limits"},"content":{"rendered":"

Authored by Philip Milley, Associate Director, Legal Affairs<\/em><\/p>\n

I have been watching the case of the charity Canada Without Poverty<\/a> since their charitable status was revoked for exceeding the 10% amount of\u00a0permissible\u00a0political activity spending. As you may recall, Canada Without Poverty devoted over 98% of its resources to political activity.<\/p>\n

In an article<\/a>\u00a0published in the September 2018 issue of the CCCC Bulletin<\/em>,\u00a0I note that the federal government announced that it would appeal the decision and also introduce new legislation in the fall of 2018 to address the issues surrounding political activity within the charitable section. The Government announced that it would address the recommendations\u2014<\/em>in particular, Recommendation 3\u2014<\/em>stemming from the consultation panel report regarding political activity and specifically, the recommendation that charities be free to engage in public policy discussions without constraint. As\u00a0I previously reported,<\/a>\u00a0the panel’s report largely reflected the sustained call of some charity lawyers, charities, and sector personnel.<\/p>\n

Presently, the appeal of the decision and the filing of appeal documents have been delayed due to the proposed legislative changes recently published by the federal government. The parties are likely waiting to see whether the proposed changes adequately\u00a0address the concerns raised by the Attorney General.\u00a0On August 15, 2018, the Government of Canada announced its intention to amend the\u00a0Income Tax Act<\/i>\u00a0(the “Act”) to implement changes to allow charities to pursue their charitable purposes by engaging in non-partisan political activities and public policy discourse. On September 14, 2018, the Department of Finance Canada released draft legislative proposals that remove the quantitative limits on political activities from the Act.<\/p>\n

New Legislative Proposals<\/h6>\n

The draft legislative proposals\u00a0are proposed to apply retroactively to related audits and objections that are currently suspended. The short draft proposals amend or repeal a handful of provisions with the primary effect of removing the quantitative limits on non-partisan political activity. The draft proposals are negative, meaning that they do not expressly identify political activity as permissible. The draft proposal makes clear that charities are still required to be constituted and operated for exclusively charitable purposes (ss. 149.1(1)(a)), meaning they cannot be constituted for a political purpose. In addition, all of a charity’s resources are expected to be expended on charitable activity (ss. 149.1(1)(a.1), and the restrictions against partisan political activities would remain (ss. 149.1(6.1) and (6.2)).<\/p>\n

The most significant change includes the removal of the definition of political activity and the removal of the exemption for partial expenditure on political activity (former\u00a0ss. 149.1(6.1) and (6.2)) such that the Act would consider the organization to still be constituted for charitable purposes or be devoting those resources to charitable activities when it carried out political activity to a permitted extent. Those provisions were replaced with general prohibitions regarding partisan political activity. Because the draft proposals are fairly limited, CRA issued supporting administrative guidance<\/a> regarding these changes.<\/p>\n

In summary, the changes<\/p>\n