Charities seeking to influence Canadian society through political activities must be careful not to run afoul of the Canada Revenue Agency (CRA). Activities as broad based as advocating for a higher minimum wage or more government funding for renewable energy may put you under scrutiny.1 This article gives general information about what is political and what is charitable activity, and about avoiding a political activity audit.
According to the CRA guidelines a charity may spend 10-20% of its budget on political activities. These activities must further the charity’s goals. Charities may not conduct partisan political activity. The Canada Revenue Agency defines a partisan political activity as “one that involves direct or indirect support of, or opposition to, any political party or candidate for public office”.2
In 2012, the Canadian Revenue Agency received additional funding to conduct political activity audits on various charitable organizations.3 They aimed to cover 60 charities over a four-year period.4 The CRA has completed 30 audits and 24 are ongoing. Of the 30 completed audits 5 resulted in a determination to revoke charitable registration.5 Only one of the five, the anti war group Physicians for Global Survival (PGS), lost its charitable status for engaging in political activities.6 The CRA found that some of educational materials Physicians for Global Survival produced held bias. For example, PGS’s positions opposing the proliferation of small arms and calling for the elimination of weapons that are indiscriminate with respect to civilian populations were not considered charitable. It was thus concluded that PGS “is not constituted and operated for exclusive charitable purposes and it does not devote all its resources to charitable activities”.7 The other charities lost their status on technical grounds such as being "registered in error". The organization Dying with Dignity lost its status as the CRA decided they did not meet the definition of a charity when they applied back in 1982.8
Even if a charity's status isn't revoked these audits drain time and resources. Consider Environmental Defence. They spent an estimated $100,000 on related legal bills.9
The 2015 Liberal government has begun to wind down the political audits. They have stated they will not continue the pattern of the previous regime.10 Even so, without a change in CRA regulations, advocacy can prompt a political activity audit if the conduct:
- 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 that the intention of the activity is to incite, or organize or put pressure on an elected representative.11
Despite the restrictions a charity can perform advocacy if they follow proper guidelines. They can also avoid these restrictions by incorporating a non-profit branch of their organization. Non-profits do not have any restrictions on conducting political activities. This branch can be the mouthpiece of the charity. Still, charities cannot make resources available to these non-profit branches for otherwise impermissible political activity.12 For example, your charity could not extend resources to the non-profit branch to publish a critique of an elected official.
If a charity decides to conduct some political activities here are some tips:
- Your political activities must be “connected and subordinate” to the charity’s purposes.
- On every issue state how the issue relates to your charity’s purpose. Make it clear that statements are not intended as support of, or opposition to, any political party or candidate.
- Focus on “education” and raising “public awareness” about charitable purposes.
- Keep good records on all expenditures related to political activity.
- File the T3010 (Registered Charity Information Return) within six months of their fiscal year end. The vast majority of charities lose their charitable registration as a result of non-filing of their T3010. There is a new Schedule 7 to the T3010 with questions on political activities. If the T3010 filed by the charity is incomplete or inaccurate then CRA can suspend the receipting privileges of the charity.
- Review CRA Policy Statement CPS-022. The CRA provides examples of prohibited activities, allowable political, and charitable activities, and partisan activities.
- Consult the CRA’s political activity self-assessment tool.13
In 2015, 24 charities lost their status as a result of an audit.14 While only one lost charitable status due to political activity, advocacy does make your organization vulnerable to government scrutiny. To ensure your organization’s long term success and survival carefully follow the guidelines set out by the CRA. Should you disagree with the CRA’s rules regarding charities and political activity you aren’t alone. Don’t fear taking action. Just make sure you do it independently of your charity.
Mark Blumberg, “Canadian Charities and Political Activities: Keeping room temperature in a chilly environment”, Blumbergs, August 2nd, 2015 www.globalphilanthropy.ca
This article is written by Mitchell Broughton, Dalhousie's Schulich School of Law student volunteer at the Legal Information Society of Nova Scotia, 2015-2016.
Mark Blumberg, “Canadian Charities and Political Activities: Keeping room temperature in a chilly environment”, Blumbergs, August 2nd, 2015, www.globalphilanthropy.ca
“Political Activities: Policy Statement CPS-022” Canada Revenue Agency, September 2nd, 2003, www.cra-arc.gc.ca.
“Canadian charities in limbo as tax audits widen to new groups” CBC, July 10, 2014, www.cbc.ca.
“Charities Program Update 2015: Director General’s message”, Canada Revenue Agency, www.cra-arc.gc.ca.
 Dean Beeby, "Political-activity audits of charities being wound down by Liberal government" CBC, January 20, 2016, www.cbc.ca;
and “Minister Lebouthillier Announces Winding Down of Political Audit Program for Charitie”, Market Wired, January 20th, 2016, www.marketwired.com.
 Dean Beeby, “Canadian charities feel “chill” as tax audits widens into political activities”, The Star, July 10, 2014
“Physicians for Global Survival” Voices-voix May 3rd, 2013, voices-voix.ca
 Kelly Grant, “Canada Revenue Agency Annuls Dying with Dignity’s charitable tax status”, the Globe and Mail, January 20th, 2015, www.theglobeandmail.com.
“Canadian Charities and the Canada Revenue Agency”, Voices-voix, voices-voix.ca
Supra note 5. See also, Dean Beeby "Charities push back against Liberals on political audits", CBC, March 14, 2016, www.cbc.ca
Supra note 1.
C. Yvonne Chenier, “Why Some Charities Lost Their Status in 2015”, Drache Aptowitzer LLP, Janaury 7, 2016 drache.ca