By Adam Aptowitzer
The firestorm of media attention which has resulted from the Conservative changes to funding for political activity is astonishing given the relatively small impact of these changes. More to the point the media almost never comments on changes affecting the sector, even when those changes are both expansive and arguably unconstitutional. One of the most egregious examples of exaggerated concern with the recent changes, and at the same time one of the most misinformed opinions, was published several weeks ago in the Globe and Mail.
The article was written by Gerry Nicholls and is available here. The comments below were written in response.
In his haste to find fault with the Conservative’s new political activity rules for charities Gerry Nicholls, like most of the media, has missed the bigger issues. Mr. Nicholls makes the same point others in the media have made – about the Conservative’s attempts to stifle opinions which disagree with their own. But, he goes even further to suggest that because the Conservatives are ‘anti-tax’, they should be starving the CRA of funds rather than feeding it. Specifically, he points to the $ 8 million given to the Charities Directorate of the CRA in the last budget. Given the faulty logic and information in Mr. Nicholls’ article (and in the media discussion generally) it would seem the time has come to provide a little historical and legal context for the benefit of readers.
Charity regulation in this country is a mess. The problem stems from the fact that constitutionally, the Provinces have jurisdiction over charities. However, as the Provinces have basically abandoned their powers in this area the Federal government stepped in to avoid a vacuum of regulation. Given the Federal power to levy an income tax, and that donations to charity already resulted in tax credits, charity supervision fell to the CRA. But, the constitutional boundaries mean that Parliament can only pass laws that are necessary to operate an income tax (not that this stops them where charities are concerned).
Originally, the Courts banned charities from all political activity. But Parliament recognized that many charities have front line experience that could be useful to society. This utility extends to political discussions and so they modified the general rule by allowing charities to use 10% of their resources (however that is calculated) for political activity.
The new rules brought in during the last budget do not repeal this leniency, but rather they restrict one charity from funding the political activities of a second, third, and fourth. This hardly sounds like the attack on charities we keep hearing about in the media.
Mr. Nicholls is a case in point, he writes that charities have a constitutional right to freedom of speech, but he (and others) ignores the fact that no right exists to be registered as a charity or to issue tax credits. The bottom line is that the Conservatives’ proposals do not limit a charity’s right to free speech. If anything, it stops rich charities from having others act as their mouthpiece(s).
That charities have their speech restricted seems to irk Mr. Nicholls less than the fact that the Conservatives are committed to enforcing the law. And he rails against the $ 8 million given to the CRA to hold charities to account. Yet, it seems highly unlikely that the entire amount, or even anything other than a small amount, will be used to enforce the new political activity rules. Eight million is a great deal of money and the number of charities engaged in political activity is actually quite small. More likely the money is going to be used to fund the Directorate’s activities generally.
The extra funding to the CRA is easy to put into context when one understands that over the past few years Parliament has passed a number of draconian, and arguably unconstitutional, measures regarding charities. The real story Mr. Nicholls missed is that the CRA will use this new $ 8 million to enforce these laws. With new tools to revoke a charity’s registration, and a huge boost to resources the next few years will see crackdown on charities which may not be wholly justifiable.
Fundamentally, proper regulation of the sector can only be done by those with the authority to do it. Such authority helps ensure that the penalty fits the crime. Surely this is the basic issue at play in the current discussion. What is the crime and what should be its punishment? Perhaps the tempest regarding the political activity rules will serve as notice to the Provinces that this type of rule-making is really their domain. It may be the salvation of the sector.