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CRA Recommendations Support Public Policy Engagement by Charities

In a significant win for Canada’s charitable sector, the Canada Revenue Agency has recommended major changes to laws and regulations that will encourage charities to engage more fully in public policy dialogue and development.

In September 2017, the Minister of National Revenue launched a consultation process with the charitable sector and the public to assist in clarifying the rules for the participation of charities in “political activities.” In addition, a panel of charity experts would be created to provide recommendations to the government using feedback from the consultations.

AFP and many other sector leaders submitted comments in late 2016. While AFP suggested several specific changes, in general its comments called on the government to:

  • Reframe the language used by CRA and the federal government so as to encourage, not restrict, charitable engagement with elected officials.  At a minimum, the current category of “political activities” should be changed to a term that is less confusing, does not have a negative connotation for charities and encourages charities to engage with elected officials and other policy makers. AFP would recommend “public advocacy” as a possible name, but we would also encourage CRA to reach out to the sector to see what language would encourage more engagement.
  • Explicitly state that seeking information about rules for getting engaged in the public policy process will not subject the organization to additional scrutiny beyond what the rules call for and the information charities are required to provide to the government.

AFP is pleased that many of its proposals were included in the panel’s recommendations to the government.

Panel Recommendations

As an immediate first step to respond to the Panel’s recommendations, Minister 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. The Report indicates that “numerous consultation submissions noted that this program has resulted in a pervasive “chill” on the public policy and advocacy activities of charities”. This suspension will be in effect until the government officially responds to the Panel’s report.

The Panel offers four recommendations, with the first two relating to interim administrative changes, and the second two focused on the longer-term legislative changes required:

  • Revise the CRA’s administrative position and policy (including its policy guidance, CPS -022 Political Activities) to enable charities to fully engage in public policy dialogue and development.
  • Implement changes to the CRA’s administration of the ITA in the following areas: compliance and appeals, audits, and communication and collaboration to enhance clarity and consistency.
  • Amend the ITA by deleting any reference to non-partisan "political activities" to explicitly allow charities to fully engage, without limitation, in non-partisan public policy dialogue and development, provided that it is subordinate to and furthers their charitable purposes.
  • Modernize the legislative framework governing the charitable sector (ITA) to ensure a focus on charitable purposes rather than activities, and adopt an inclusive list of acceptable charitable purposes to reflect current social and environmental issues and approaches.

Some of the issues relating to "political activities" cannot be fully resolved by changes to the administration of current ITA provisions. Legislative change is required to broaden and simplify the requirements for charities and to remove other obstacles to their contribution to society that are unnecessary and counter-productive.

“We were very pleased to read the panel’s recommendations and to note that the charitable sector voices, including AFPs, had a significant impact on them,” said Dan Brunette, chair of the Canadian Government Relations Committee. “Thanks to the proactive engagement of our members through the years and open dialogue with other key stakeholders, AFP has become as a trusted resource and an active participant in helping shape public policy.”

With the panel’s recommendations, the federal government will now officially view charity engagement in the public policy process as positive and needed for the betterment of society. As the executive summary of the report states:

To enable and maximize the contributions of charities, we need a regulatory environment that respects and encourages their participation in public policy dialogue and development. This is not currently the case. The legislative framework for regulating charities in Canada is outdated and overly restrictive. It is, in the words of one submission, "antiquated, subjective, arbitrary and confusing – denying Canadians the right to have their voices heard through the charities they support."

The full report of the panel can be found here. AFP will continue to update members on this issue and provide fuller talking points about the new changes as CRA moves forward.

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