CRA Consultation Panel Releases its Report on Charities Political Activities

May 10th, 2017 by Claudia Pedrero

The Consultation Panel on the Political Activities of Charities (the Consultation Panel) has now released its Report recommending changes to how charities should be regulated in Canada.

Earlier this year, we blogged about the Canada Revenue Agency’s (the CRA’s) consultation process on charities’ political activities.

Our firm also submitted its recommendations to the CRA advocating for changes that would allow charities to effectively participate in public policy debates.

In our submissions we took the position that the CRA’s current rules restricting charities’ political activities make their political role ineffective despite the fact charities are uniquely positioned to advocate for the public interest and many are experts in their fields.

We are very pleased to see that the Consultation Panel’s Report reflects many of our suggested changes to the CRA’s rules.

For example, the Report recommends allowing charities to engage in “public policy dialogue and development, if it furthers a charity’s charitable purposes.” This change would address a central problem of the current regime, which restricts charities from influencing government or public opinion on issues that are central to their charitable purposes.

The Report made four central recommendations:

  1. Revise the CRA’s administrative position and policy (including CPS-022, Political Activities) to enable charities to fully participate in public policy dialogue and development.
  2. Implement changes to CRA’s administration of the Income Tax Act (Canada) (the Act) in the following areas: compliance and appeals, audits, and communication and collaboration to enhance clarity and consistency.
  3. Amend the Act by deleting references to non-partisan “political activities” to explicitly allow charities to fully engage in non-partisan public policy dialogue and development, provided that it is subordinate to and furthers their charitable purposes.
  4. Modernize the the Act to ensure a focus on charitable purposes rather than activities, and adopt an inclusive list of acceptable charitable purposes to reflect current social and environmental issues and approaches.

As a result of the Report’s release, the Minister of National Revenue directed the CRA to suspend audits and objections relating to the 2012 Political Activities Audit Program, the program that caused many charities to entirely back away from engaging with political issues.

The CRA has committed to respond to the Consultation Panel’s recommendations by June 2017.

We hope that the CRA adopts the Report’s recommendations and the federal government prioritizes its proposed legislative amendments.

Charities have an essential role to play in a vibrant Canadian civil society. The rules regulating them should recognize their essential role, be clear, and improve trust and collaboration with the sector.


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