The current conflagration about charities and their involvement in political advocacy is focused on worries about whether the law is being fairly applied to all organizations. Specifically organizations with a perspective contrary to the current government’s policies feel that they are the subject of a conspiracy. In some cases, particularly for charities concerned with the application of the law to them, the discussion moves on to the practicalities of the law and how they may apply, but rarely is the history of this unique provision examined.
The singular nature of the restriction on advocacy by charities is perhaps indicated by the fact that it is the CRA, our revenue collector, which is tasked with determining which kinds of speech are advocacy and whether the amount of resources spent on it are acceptable. That this is the CRA’s role is more an accident of history then any determined public policy rationale. Fundamentally, the regulation of charities is a provincial jurisdiction and so any limitations on a charity’s speech should fall under the purview of the provinces. But because the Income Tax Act (the “Act”) defines a charitable organization itself rather than by reference to the provinces the CRA became the de facto organization for determining all the issues related to charities.
The Act’s definition of a charitable organization has as a necessary condition that “all the resources of [the organization are] devoted to charitable activities carried on by the organization itself”. Read in isolation one would be forgiven for believing that charities could not engage in fundraising, administration or other activities which are not directly in pursuit of charitable activities. However, realizing that front line charities often have expertise which can be useful to the national discussion (such as food banks on poverty and hospitals in health delivery) Parliament passed a provision allowing charities to engage in advocacy “where an organization devotes substantially all of its resources to charitable activities carried on by it and
- (a) it devotes part of its resources to political activities,
- (b) those political activities are ancillary and incidental to its charitable activities, and
- (c) those political activities do not include the direct or indirect support of, or opposition to, any political party or candidate for public office…”
Notwithstanding the vagaries of the term ‘resources’ the provision allowing charities to engage in limited political activity was intended to be a relieving provision so that charities could be involved in relevant national discussions. But for this provision charities ostensibly could not engage in any type of political activities.
That said some organizations believe that the pursuit of their charitable aims can be accomplished primarily if not only through political activity. The relief of poverty is one example. There is a school of thought that believes that poverty can be eliminated through the redistribution of wealth. This in turn can only be done through the promulgation of laws allowing it and thus advocating such changes is, while a political activity, arguably in pursuit of a charitable objective.
The English courts in the important McGovern decision of 1981 (that has been accepted in Canada) provided some guidance on the definition of political activity when Justice Slade held that:
“From the passages from the speeches of Lord Parker [in Bowman], Lord Wright and Lord Simonds [in Anti-Vivisection] which I have read I extract the principle that the court will not regard as charitable a trust of which a main object is to procure an alteration of the law of the United Kingdom for one or both of two reasons: first, the court will ordinarily have no sufficient means of judging as a matter of evidence whether the proposed change will or will not be for the public benefit. Secondly, even if the evidence suffices to enable it to form a prima facie opinion that a change in the law is desirable, it must still decide the case on the principle that the law is right as it stands, since to do otherwise would usurp the function of the legislature”.
While there may be some logical inconsistencies in the notion that the Courts cannot tell whether a change in the law will or will not be for the public benefit1 this is the law as it currently stands. So charities must engage all their resources in charitable activity subject to a small allowance for certain causes that are related to their objects and incidental to them only. A charity’s entire right to engage in issues in which it may have an interest rests on that fine allowance. One would imagine that a change in the law allowing charities to participate in advocacy is due but, of course, who is allowed to discuss it?
1 It is worth noting that the Courts in Canada in part used this rationale to find that advocacy to change laws outlawing torture was political activity and therefore could not be charitable.