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An Ontario Superior Court decision removing limitations on the “non-partisan” political activities of charities has proven over the past two years to be a “game changer”.

The 2018 ruling in Canada Without Poverty v. AG Canada removed the Canada Revenue Agency (CRA) restriction that charities spend no more than 10 per cent of their revenues on “non-partisan” political activities. The limit on partisan activities still stands.

The question charities must ask is where does the line fall between partisan and non-partisan activities. Does advocating for a political party’s position or platform on an issue of interest to the charity constitute a partisan activity? Charities have always had to be careful about political activities.

Freedom of Expression Limits

The anti-poverty group, Canada Without Poverty, brought the constitutional challenge in 2016, arguing that the CRA’s interpretation of the Income Tax Act section regarding charitable and political activities infringed on free expression.

[2]               Section 149.1(6.2) of the Income Tax ActRSC 1985, c. I (5th Supp) (“ITA”) defines the extent to which a registered charity may devote its resources to “political activities”. The section provides limited room for such activities:

           (6.2) For the purposes of the definition “charitable organization” in subsection (1), where an organization devotes substantially all of its resources to charitable activities carried on by it and

            (a) it devotes part of its resources to political activities,

           (b) those political activities are ancillary and incidental to its charitable activities, and

           (c) those political activities do not include the direct or indirect support of, or opposition to, any political party or candidate for public office,

           the organization shall be considered to be devoting that part of its resources to charitable activities carried on by it.

[3]               The Applicant challenges the interpretation given by Canada Revenue Agency (“CRA”) to the “substantially all” requirement in the opening lines of s. 149.1(6.2). In doing so, it also challenges the overall distinction between “charitable activities” and “political activities” that is embodied in ss. 149.1(6.2)(a) and (b). As drafted, the section requires that “substantially all” of the charity’s resources be devoted to “charitable activities”, and to the extent that some of those resources are devoted to “political activities” – which are conceived in the section as being  separate and apart from “charitable activities” – that is permitted under s. 149.1(6.2)(a). As long as the “political activities” are done under the conditions set out in ss. 149.1(6.2)(b) and (c) – i.e. are ancillary to the charitable activities and are non-partisan – the political activities are considered to be charitable.

A 2015 audit of the organization found “virtually all of the applicant’s activities involved political engagement in the nature of communications to the public advocating policy changes,” and, as a result, it lost its charitable status.

Political Activities

According to the decision, the CRA held an activity is considered “political” where it:

  • explicitly communicates a call to political action
  • explicitly communicates to the public that the law, policy, or decision of any level of government in Canada or a foreign country should be retained … opposed, or changed
  • explicitly indicates in its materials (whether internal or external) that the intention of the activity is to incite, or organize to put pressure on, an elected representative or public official to retain, oppose, or change the law, policy, or decision of any level of government

In response, the anti-poverty group claimed all the activities complained of were “non-partisan.”

Unduly Restrictive

Justice Edward Morgan, who noted the applicant is not alone in finding the state of the law to be unduly restrictive of its charitable activities, found that the CRA’s interpretation was an infringement on free speech and issued an order that it immediately cease interpreting and enforcing the Income Tax Act in that way.

[30]           There is no doubt that the activity in which the Applicant wishes to engage – public advocacy of policy change – is within the guarantee of freedom of expression. McLachlin J. (as she then was) stated in R v Keegstra, [1990] 3 SCR 397 that, “if the activity being regulated has expressive content, and does not convey a meaning through a violent form, then it is prima facie protected by s. 2(b) of the Charter.” Indeed, the Attorney General here does not doubt that the Applicant engages in political expression – that is the very reason it seeks to revoke the Applicant’s status as a registered charity. The Applicant explicitly engages in “expression to the end of promoting…political or social engagement”, the very definition of s. 2(b) activity: The Queen v Native Women’s Association of Canada, 1994 CanLII 27 (SCC), [1994] 3 SCR 627, at para 47.

[42]           Simply put, there is no way to pursue the Applicant’s charitable purpose – using methodology that is recognized as necessary by Parliament itself – while restricting its politically expressive activity to 10% of its resources as required by CRA under s. 149.1(6.2). As counsel for the Applicant points out, the Applicant does not claim a right to engage in political objectives or purposes; rather, it seeks to pursue its existing charitable purpose through means which are self-evidently expressive and protected by s. 2(b) of the Charter. In effect, the language of s. 149.1(6.2), and CRA’s 10% rule in application of that statutory provision, makes the Applicant’s charitable purpose untenable.

[43]           Moreover, the evidence is that the Applicant cannot function – or will have difficulty in functioning – in the absence of registered charitable status. The Attorney General presents no evidence that counters the Applicant’s description of its needs. The charity registration platform created by the ITA exists to support charitable works, and enforcement of s. 149.1(6.2), in burdening free expression, seriously impairs those works.

Canada Without Poverty successfully obtained a declaration that the restriction on its political activities as a result of the Income Tax Act was contrary to section 2(b) of the Canadian Charter of Rights and Freedoms.

[70]           The interpretation and enforcement by CRA of the “substantially all” requirement in s. 149.1(6.2) of the ITA by limiting to 10% a charitable organization’s use of its resources for political activities, as set out in the CRA Policy Statement, violates s. 2(b) of the Charter and is not saved by s. 1. There shall be a Declaration to that effect and an Order that CRA cease interpreting and enforcing s. 149.1(6.2) in that way.

[71]           There shall be a further Order that the phrase “charitable activities” used in s. 149.1(6.2) be read to include political activities, without quantum limitation, in furtherance of the organization’s charitable purposes.

[72]           The Declaration and Orders described above render meaningless ss. 149.1(6.2)(a) and (b) of the ITA. As part of the protection of freedom of expression encompassed by the above Declaration and Orders, there shall therefore be a further Declaration that ss. 149.1(6.2)(a) and (b) are of no force and effect pursuant to s. 52(1) of the Constitution Act, 1982.

[73]           The exclusion from “charitable activities” of partisan political activities contained in subsection 149.1(6.2)(c) of the ITA remains in force.

Changed Charity Landscape For Political Activities

The decision was released July 16, 2018 and was never appealed. The decision has effectively removed the shackles of political activity restrictions from charities and has allowed previously “political” not-for-profit organizations the liberty of seeking charitable registration without fear of disallowance of their application on “political activities” grounds. The charity sector has in fact seen an uptick in “political” charities since the release of this decision in 2018.


Taras Kulish was not involved in the matter and comments generally on charity law matters.


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