Political activity audits of charities suspended by Liberals
Panel report says charities should be free to engage in politics, minister suspends infamous audit program
While this “looks” like a victory for free speech and political engagement, one has to ask how tainted charities will become when their income is influenced by who gets into power.
The Liberal government is suspending the few remaining political activity audits of charities after an expert panel report recommended removing a political gag order imposed on them by the Conservatives five years ago.
As an immediate first step to respond to the panel’s recommendations, National Revenue Minister Diane Lebouthillier “has asked the CRA to suspend all action in relation to the remaining audits and objections that were part of the Political Activities Audit Program, initiated in 2012,” a release Thursday said.
The panel report, also released Thursday, and the suspension together appear to end a long chill for charities that began in 2012, when the Conservative government launched 60 political activity audits, starting with environmental groups that had criticized federal energy and pipeline policies.
This actually makes sense. When political advocacy groups cloak themselves as charities, the lines get blurred and its dangerous.
The program cost environmental, anti-poverty, human-rights and religious charities significant staff resources and legal fees, and brought an “advocacy chill” to the sector, with many groups self-censoring lest they be caught in the Canada Revenue Agency’s net or annoy their auditors.
The Liberal Party campaigned in the 2015 election to end the “political harassment” of charities, but once elected did not quite end the program. Instead, the new government cancelled six of the political activity audits that were yet to be launched, but allowed audits already underway to continue.
That left groups such as Environmental Defence and Canada Without Poverty, which were deemed too political by CRA, still under immediate threat of losing their charitable status. Thursday’s announcement lifts that threat, at least until the government responds to the panel recommendations.
The five-member panel, chaired by Marlene Deboisbriand on the board of Imagine Canada, says Canada’s charity law and regulations are too restrictive and vague. It calls for changes to the Income Tax Act to delete any reference to “political activities” with regard to charities.
For what it’s worth, it is still worthwhile to know if the charity in question is a charity, and to what degree it engages in political activities. Of course, the same could be said for religious groups.
The panel report, based on wide consultations last fall, also said there was broad consensus in the charity sector that partisan activities — endorsing particular candidates or parties — should remain forbidden.
The proposed changes would eliminate current rules that restrict a charity’s political activities to 10 per cent of their resources. Critics have argued the rules are unclear on definitions of what constitutes a political act.
No kidding, charities shouldn’t be endorsing political candidates or parties. And 10% is actually a lot. If a “charity” spends a good chunk of their money lobbying for government, shouldn’t they register as such?
The revenue minister’s decision to suspend political activity audits, as recommended by the panel report Thursday, amounts to an abrupt about-face. Last year, Lebouthillier refused to intervene, saying the “independence of the charity directorate’s oversight role is a fundamental principle that must be protected.”
To be clear, I have no issue with people getting involved in politics. However, there are considerable financial and tax advantages to being classified as a “charity”. If the groups in questions really are lobbying politically, then it puts them on an unlevel playing field.