Canadian charity launches constitutional challenge to restrictions on charities to engage in ‘political activities’

A Canadian charity, Canada Without Poverty (CWP), has launched a constitutional challenge of certain provisions of the Income Tax Act that restrict the political activities of charities. CWP is arguing violation of Section 2 of the Charter of Rights and Freedoms which protects freedom of expression and association.

Currently, registered charities in Canada are required to strictly limit any political activities so that they are ‘incidental’ to the overall activities of the organisations – understood to be less than 10 per cent of an organisation’s time and resources. Based on court decisions, the Canada Revenue Agency (CRA) has defined ‘political activity’ as any activity that “explicitly communicates to the public that a law, policy or decision of any level of government inside or outside Canada should be retained, opposed, or changed.” Charities are required to monitor staff and members of their organisation to determine if they have made public statements about current laws or policies, report annually to CRA on all such activities and to strictly limit them if they are to exceed allowable levels.

In 2014 and 2015, CRA was given special budgetary allocations to rigorously enforce the political activities restrictions in the Income Tax Act. CWP was audited by CRA, which found that 98.5% of its activities were given to political activities on the basis that: 

• CWP members and staff frequently identified changes that needed to be made to laws or policies in order to alleviate poverty and publicly promoted the adoption of a national anti-poverty strategy.  
• Some of CWP’s activities “created an atmosphere conducive to advocating for changes to laws and policies.” 
• CWP’s political activities included hosting a dinner where people living in poverty ate a meal with members of parliament and other decision-makers and discussed their experiences of poverty and ideas about how to address it; organising policy summits where people living in poverty could collaborate with social policy experts and academics to develop recommendations for addressing poverty; and offering an online course on Canada’s obligations to address poverty under international human rights law, where people living in poverty could join a community of learners to discuss topics of the day.  
• CWP published links on its website to newspaper articles and other materials which were critical of some of the government’s policies and recommended changes.   

“CWP’s members find these restrictions on their freedom of expression and association to be totally unacceptable in a free and democratic society.” Leilani Farha, the Executive Director of CWP stated.

“We are not arguing that there is any constitutional obligation on the government to provide a tax benefit for a particular purpose. We don’t have to: our purpose — to relieve poverty — has already been accepted as charitable. The question is, having accepted relief of poverty as a charitable purpose, is the government permitted, under the Charter of Rights and Freedoms, to restrict our members from speaking out about the changes to laws and policies that are necessary for our purpose to be achieved,” Ms Farha continued.

Click here for CWP’s press release.