Canadian charities can now spend as many resources as they deem necessary criticizing government policies and decisions without worrying they may lose charitable status.
Ottawa-based Canada Without Poverty won what it’s calling a landmark victory against the Canada Revenue Agency’s interpretation of one section of the Income Tax Act.
It’s a legalese-heavy battle, says the group’s executive director Leilani Farha, but one with big implications for thousands of charities across the country.
“The restrictions on political activity cause a lot of damage to the work we were trying to do.”
It started years ago, she says, when Canada Without Poverty got audited and subsequently dinged for spending more than the allotted 10 per cent of its resources on political activities.
The CRA was cataloging any calls to political action, public advocacy for changing or maintaining laws, policies or other government decisions — at home and abroad — as “political activities.”
Essentially, for communicating with the public about law reform and other issues related to relieving poverty, the charity whose purpose is to find ways to relieve poverty found itself at risk of losing the charitable status it relies on for funding.
So, Farha says, they fought back.
“To actually pursue our charitable purpose, which is relief of poverty, you do need to change laws, policies and programs,” she says.
“We were told we were too political and to basically shut up.”
This week, the Ontario Superior Court of Justice ruled in their favour.
It said the 10 per cent cap infringed on a charity’s right to freedom of expression and ordered the CRA to immediately stop interpreting the Income Tax Act in such a way.
It’s a welcome decision, says Tim Gray, executive director at Environmental Defence, which was also subjected to a CRA audit because of its political activities.
“We want to see the environment protected and that inherently is political and therefore everything we do potentially is offside with them,” he says.
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It remains to be seen whether the federal government will appeal the ruling. A government-appointed committee tasked with investigating recommended in March 2017 that the government does what Canada Without Poverty was asking and delete any caps on non-partisan political activities.
The non-partisan part is key, Farha and Gray agree.
Your favourite charity is still forbidden from getting involved in electoral politics.
Jessica Clogg, executive director of West Coast Environmental Law, called the decision, “a fabulous day for democracy.”
“What’s needed to achieve our charitable purposes, which is protection of the environment, are systemic changes to laws and policies that address the root of the problem.”
Clogg says she hopes the federal government moves swiftly to make the changes necessary to protect charities outside of Ontario in keeping with the report it commissioned.
“If they were to appeal, it would be a complete repudiation of the commitments they’ve made and really quite horrifying for charities like ours who have been living under these archaic rules,” Clogg says.
West Coast Environmental Law was under audit from September 2013 to just recently, she says, “an enormous waste” of time and resources.