Minister Lebouthillier welcomes the Panel Report – May 4, 2017
Charities play a key role in Canadian society and provide valuable services to Canadians. The Government of Canada recognizes the vast experience they bring to public debate and to the formulation of public policy. In response to the needs of this sector, our Government has committed to clarifying the rules that govern the participation of charities in political activities.
As part of this commitment, in late 2016, the Government held extensive online and in-person consultations with the public and the charitable sector. A Consultation Panel, composed of five experts in the charitable sector reviewed the consultation feedback and presented its Report to the Minister of National Revenue at the end of March 2017.
As an immediate first step to respond to the Panel’s recommendations, Minister Lebouthillier has asked the CRA to suspend all action in relation to the remaining audits and objections that were part of the Political Activities Audit Program, initiated in 2012. The Report indicates that “numerous consultation submissions noted that this program has resulted in a pervasive “chill” on the public policy and advocacy activities of charities”. This suspension will be in effect until the government officially responds to the Panel’s report.
Minister Lebouthillier welcomed the Report and thanked the Consultation Panel for their work and their suggested changes to the Canada Revenue Agency’s (CRA) administration of the regulations under the existing legislation. The Report also contains suggestions for changes to the Income Tax Act. Accordingly, Minister Lebouthillier has shared the report with her colleague, the Minister of Finance.The Government is carefully reviewing the Panel’s report to help inform its regulation of charities going forward.
Recommendations brought forward through the consultation process and by the Panel will help the Government of Canada better understand the challenges faced by, and the needs of, the charitable sector when contributing to public policy debate.
Report of the Consultation Panel – March 31, 2017
Amend the ITA by deleting any reference to non-partisan political activities to explicitly allow charities to fully engage without limitation in non-partisan public policy dialogue and development, provided that it is subordinate to and furthers their charitable purposes.
The Panel recommends that amendments:
retain the current legal requirement that charities must be constituted and operated exclusively for charitable purposes, and that political purposes are not charitable purposes;
fully support the engagement of charities in non-partisan public policy dialogue and development in furtherance of charitable purposes, retiring the term “political activities” which tends to be understood in common parlance as partisan and is therefore confusing, and clearly articulating the meaning of “public policy dialogue and development” to include: providing information, research, opinions, advocacy, mobilizing others, representation, providing forums and convening discussions; and
- retain the prohibition on charities’ engaging in “partisan political activities”, with the inclusion of “elected officials” (i.e. charities may not directly support “a political party, elected official or candidate for public office”), and the removal of the prohibition on “indirect” support, given its subjectivity.
Consultation Process Launched – September 26, 2016
The Minister of National Revenue launched a consultation process with the charitable sector and the public to assist in clarifying the rules for the participation of charities in political activities, and announced the creation of a Panel to provide recommendations using feedback from the consultations. The Canada Revenue Agency has committed to providing a formal response to the Panel’s recommendations by June, 2017.
Mandate Letter – November 2015
Prime Minister Justin Trudeau issued a Mandate Letter to Ms. Lebouthillier, the Minister of National Revenue, asking her to work with the Minister of Finance to modernize the legislation governing the charitable sector.
In the letter it reads: “Allow charities to do their work on behalf of Canadians free from political harassment, and modernize the rules governing the charitable and not-for-profit sectors, working with the Minister of Finance. This will include clarifying the rules governing “political activity,” with an understanding that charities make an important contribution to public debate and public policy. A new legislative framework to strengthen the sector will emerge from this process. This should also include work with the Minister of Families, Children and Social Development to develop a Social Finance and Social Enterprise strategy.”
Liberal Party’s Platform Promise – Early 2015
During Justin Trudeau’s campaign, the Liberal Party promised the following: “We will allow charities to do their work on behalf of Canadians free from political harassment, and will modernize the rules governing the charitable and not-forprofit sectors. This will include clarifying the rules governing ‘political activity,’ with an understanding that charities make an important contribution to public debate and public policy. A new legislative framework to strengthen the sector will emerge from this process.”