Joint Statement by Minister of National Revenue and Minister of Finance (August 15, 2018).
Précis: The Ministers of National Revenue and Finance jointly announced on August 15 that they will appeal the decision of the Ontario Superior Court of Justice which held that CRA’s policy with respect to non-partisan political activities by charities violated the Charter’s guarantee of freedom of expression. At the same time, they announced that they will act to allow greater non-partisan political expression by charities within their charitable objectives.
Contents of Statement: In my original blog on this decision I opined that “while Justice Morgan’s conclusions are attractive on one level and may ultimately be determined to be correct, the historical and evidentiary record before him, as disclosed by his reasons, is wholly deficient in terms of its understanding of the history and evolution of the law of charities.”
It seems as though the Minister of National Revenue and the Minister of Finance have somewhat similar views. In terms of the expansion of permitted non-partisan political activity by registered charities the statement provides:
“As a matter of good public policy, and to move forward with this commitment, our Government intends to amend the Income Tax Act to implement changes consistent with recommendation no. 3 of the Report of the Consultation Panel on the Political Activities of Charities. The intended amendments will allow charities to pursue their charitable purposes by engaging in non-partisan political activities and in the development of public policy. Charities will still be required to have exclusively charitable purposes, and restrictions against partisan political activities will remain.
“Our Government intends to present legislation to this effect in the Fall. The Canada Revenue Agency will develop supporting guidance in collaboration with the charitable sector. The legislation will be drafted to apply retroactively, including to the audits and objections that are currently suspended. This suspension will be lifted when the legislation is passed by Parliament, when we intend to fully respond to the Report of the Consultation Panel on the Political Activities of Charities.”
Thus it appears that the 10% restriction will be abolished.
In terms of the underlying legal rationale of the decision the Ministers disagree and will file an appeal:
“With regard to the decision in Canada Without Poverty v the Attorney General of Canada, rendered on July 16, 2018, the Government of Canada has identified significant errors of law and has served notice that it will be appealing the decision to address the uncertainty created by it, and to seek clarification on important issues of constitutional and charity law. The resolution of these legal issues, while necessary, will not change the policy direction the Government intends to take with respect to the removal of quantitative limits on political activities.
This announcement seems to strike a good balance between recognizing the historical origins of the limitations of political activities by charitable institutions on the one hand and the guarantee of freedom of expression under the Charter on the other.