Last month, federal Finance Minister Bill Morneau tabled a motion in the House of Commons that would, among other things, amend Canada’s Income Tax Act in order to “remove the limits on political activities for charities, so that they may pursue their charitable purposes by engaging in non-partisan political activities and in the development of public policy.”
The proposed changes to the Income Tax Act most relevant to our sector are new definitions of charitable organization, charitable purposes, and political activity (see Clause 17) and the subsequent removal of current restrictions on the political activities of charities including the development of public policy.
Background and Next Steps
Since 2012, the threat of losing charitable status has been hanging over the heads of social and environmental organizations as a result of the Canada Revenue Agency’s Political Activities Audit Program. In 2016, Canada Without Poverty (a national anti-poverty and human rights organization) challenged the CRA’s restrictions as well as the distinction between “charitable” and “political” activities.
These advocacy efforts resulted in an Ontario Superior Court ruling earlier this year that the application of certain sections of the Income Tax Act and the oft-mentioned 10% rule (the extent to which a charity can focus on political or policy-related advocacy) are unconstitutional.
Many organizations—the Ontario Nonprofit Network, Imagine Canada, and Canada Without Poverty—have positively responded to the proposed changes. The next and final step is for the federal government to introduce legislation to officially implement the measures tabled in Minister Morneau’s motion.
Make Sure Your Voice is Heard
This announcement does not mean our work is over. In January of this year, the Special Senate Committee on the Charitable Sector was created in order to review the impact of Canada’s charitable and non-profit sector and the various rules governing them.
Submissions to the committee have been sent from across the country over the past 10 months and the next phase of the committee’s work involves an online survey specifically designed to collect information about the challenges and opportunities facing Canada’s charitable sector.
The deadline to complete the survey is November 16th. I urge you all to participate and help us make sure the federal government understands the issues we are facing—funding, donations and compensation; recruitment and retention; restrictive federal regulations. (All data is confidential and no identifying information will appear in the final report or any related publications.)
The committee’s final report will help determine the next phase of regulatory and legislative amendments that our sector needs in order to serve our communities and contribute to good governance and social policy development. The survey is simple and requires no preparation—the questions will be easy for Federation members to answer. You can submit your feedback here.
The Federation has already made a submission and we believe that it is very important for our sector to respond. Our feedback specifically noted challenges related to procurement and our concerns about the impact current procurement practices have on the sustainability of community-based organizations that are grounded in local knowledge and relationships.