Government drops appeal, clearing the way for charities to engage in political activity

OTTAWA — The federal government has dropped an appeal of a court ruling that freed charitable organizations to engage in unlimited political activity as long as it’s not directly supporting a party.

Last July, an Ontario judge quashed the Canada Revenue Agency‘s long-standing rule that charities could devote no more than 10 per cent of their resources to political activities or risk losing their charitable status.

Ontario Superior Court Justice Edward Morgan ruled that the law violated charitable groups’ constitutional right to free expression.

The Trudeau government appealed the ruling, even though it intended to pass legislation to eliminate the 10-per-cent limit — which it did last December.

At the time, the government said it was appealing to get “clarification on important issues of constitutional and charity law.”

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The law continues to prohibit charities from promoting or opposing specific parties or politicians but they may now spend as much of their resources as they choose on non-partisan political activities, such as pressuring governments to adopt certain public policies.

Canada Without Poverty, the small Ottawa-based charitable group that challenged the 10-per-cent limit, welcomed Friday the government’s decision to drop the appeal, calling it a “recognition of the fundamental constitutional right of people living in poverty and other charities to participate in public policy dialogue.”

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The move ends seven years of uncertainty for Canadian charities, some 60 of which were targeted by CRA audits of their political activities under a crackdown launched by the previous Conservative government of Stephen Harper. Some, including Canada Without Poverty, were notified that their charitable status would be revoked because they devoted too much time to political activity.

Without charitable status, a group would no longer be able to issue tax receipts and its donors would no longer be eligible for a charitable tax credit.