An Ontario Superior Court has found restrictions on the ability of charities to engage in ‘political activities’ in breach of freedom of expression.
The human rights organisation, Canada Without Poverty (CWP), had been at risk of losing its charitable status since 2016 following an audit by the Canada Revenue Agency (CRA) which found that 98.5% of the organisation’s work was ‘political’. This was deemed in contravention of section 149.1(6.2) of the Income Tax Act which restricts the resources that a charity can assign to political activities to 10%.
The CRA identified two types of political activities that the organisation was involved in: submissions to government and public advocacy. CWP brought the challenge on the basis that advocacy was part of its charitable purpose and to restrict its ability to advocate was an infringement of freedom of expression.
In addressing the meaning of ‘political’, the Court found that all political activities are charitable activities so long as groups advocate "in pursuit of the overall charitable purpose." The Court noted that it was widely recognised that the effective pursuit of the charitable purpose of CWP – the relief of poverty – included enabling those living in poverty to engage in democratic processes and identify solutions.
The Court found the 10% rule to be an arbitrary and unjustified infringement of freedom of expression as guaranteed in Canada’s Charter of Rights and Freedoms. It also recognised that the change sought by CWP was in line with what had been recommended by the government’s own Consultation Panel on the Political Activities of Charities.
The legal challenge was taken on pro bono by Toronto law firm McCarthy Tetrault LLP.
Click here for the judgement in Canada Without Poverty v Attorney General of Canada.
Click here for a previous Bulletin article on this case.