Action Needed: CRTC Telemarketing Rules and a Charitable Exemption
July 11, 2008
Request to write to federal Cabinet on new regulatory obligations and costs under federal telemarketing rules
AFP strongly encourages all Canadian members to contact Cabinet to urge it to oppose new regulatory obligations and costs imposed on charities under the federal telemarketing rules. These obligations and costs arise as a result of a recent ruling by the Canadian Radio-television and Telecommunications Commission (CRTC) and run directly counter to the exemption provided to registered charities by Parliament under the Telecommunications Act.
Here is some information designed to assist you in preparing correspondence. Part I provides an overview of the issues and Part II sets out particulars, including the key messages, where the letters should be sent and the deadline for participating -- Friday August 8.
We consider this issue important for Canada’s charities, not only because it sets up a whole new regulatory regime and associated fees with which charities must comply (under telecommunications legislation!) but tends to erode the broader and very important principle—often referred to as ‘regulatory forbearance’ -- that charities are generally exempt from such regimes.
Further, our Petition to Cabinet on point has now been “gazetted” i.e. posted in the Canada Gazette. This serves as an invitation to any interested party to provide comment, so it is CRITICAL that our government hears from us!
i) The new DNCL regime and how it applies to charities:
- The Telecommunications Act (the Act) includes provisions governing telemarketing activities by telemarketers.
- In 2007, the Act was amended to add a new Do-Not-Call List (DNCL) regime to the telemarketing section of the Act.
- The DNCL sets up two broad regimes: a national public list to be operated by a new national DNCL Operator commencing September 2008 from which charities are exempt, and individual private lists to be maintained by all organizations carrying out telemarketing activities, including charities.
- The public list allows Canadians to add their phone number and a list of organizations from which they do not want calls. Organizations that carry out telemarketing must constantly check the list and ensure that no calls are made to restricted numbers.
- The private list is the same system, but Canadians contact the organization itself and the organizations must maintain and observe their own list of restricted phone numbers.
ii) The CRTC’s decision and our Petition to Cabinet
- In January 2008, shortly after charities secured the important exemption from the national DNCL list under the telemarketing provisions of the Telecommunications Act, the CRTC ruled that all organizations that carry out telemarketing activities—including charities and other exempt organizations—must register with the new national DNCL operator and help finance the costs of enforcing the telemarketing rules, including the new national public DNCL regime.
- In April 2008, Imagine Canada and AFP filed a joint Petition to Cabinet within the 90 day time period allowed for appeals.
- The Petition asks Cabinet to require the CRTC to vary or rescind its ruling. We argue that the ruling:
- imposes a new regulatory burden and red tape on registered charities, even though Parliament had exempted us from the national DNCL regime, which is the principal element of the telemarketing rules;
- requires us to pay fees that can hardly be considered charitable expenditures, and
- flies in the face of the long-standing history of regulatory forbearance toward charities exercised by federal, provincial and municipal governments on issues ranging from income tax, to municipal property tax, to corporate governance obligations under corporations law.
- These arguments are set out in the sample letter below.
i) Submitting Comments
- Submissions must be addressed to the Clerk of the Privy Council.
- Copies must be sent to the Director General, Telecommunications
- All submissions must cite the Canada Gazette information
- Your letters should also be sent to the Minister of Industry and Minister of National Revenue
- All this information is set out in the sample letter below.
- As the appeal is to Cabinet only, you may also send a copy to other Ministers or Government (Conservative) MPs . To get addresses of other MPs or Ministers, go to:
- Please do not cc Imagine Canada or AFP. However, we would appreciate a quick note letting us know if you have filed a submission.
- Copies of our Petition and submissions filed by others are posted at http://ic.gc.ca/spectrum under “Gazette Notices and Petitions.”
ii) Due date
Letters must be mailed to the Clerk no later than Friday August 8. (FYI, Cabinet has 1 year from the CRTC’s decision in January 2008 so has until late Jan. 2009 to decide.)
iii) Key messages (IMPORTANT!!)
How to work with these messages: Departmental staff will summarize all the submissions for Cabinet. Form letters will be given almost no weight. Therefore, PLEASE PERSONALIZE YOUR LETTERS – describe your own organizations, move paragraphs and sentence around and substitute your own words.
[Place on your own organization’s letterhead]
[July 31], 2008
Privy Council and Secretary to the Cabinet
Langevin Block, 80 Wellington Street,
Ottawa, ON K1A 0A3
The Honourable Jim Prentice P.C., M.P.,
Minister of Industry,
C.D. Howe Building,
235 Queen Street,
Ottawa, ON K1A 0H5
The Honourable Gordon O'Connor P.C., M.P.,
Minister of National Revenue,
7th Floor, 555 MacKenzie Avenue,
Ottawa ON K1A 0L5
Re: Canada Gazette, Part I, June 14, 2008, Telecommunications Act, Notice No. DGTP-002-2008 — Petition to the Governor in Council concerning Telecom Decision CRTC 2008-6, Vol. 142, No. 24.
I am writing on behalf of [name of your organization] regarding the above-referenced Petition to Cabinet regarding the impact of the above-noted CRTC decision on Canada’s charities.
[Our organization] is a registered charity and [summarize your organization’s mandate and role in the community in 2 – 3 sentences].
[Our organization] appreciates having access to this right to appeal to Cabinet, and we wish to sincerely thank Cabinet for its consideration of our serous concerns about this decision. We appreciate that our elected officials have ultimate authority over public-policy making in Canada, and [our organization] strongly believes that this ruling by the CRTC erodes important long-standing public policy principles that have underscored the relationship between governments and charities since Confederation. We urge you to rescind the CRTC’s ruling insofar as it applies to charities.
We establish charities to deliver important services to Canadians. [Add an example of your organization’s work]. Many charities function with few or no paid staff [consider summarizing your own staff situation]. As 84,000 small enterprises, charities benefit most from red tape reduction—not more bureaucracy. Filling out forms under the Telecommunications Act is not something that we are well equipped to execute. I am sure that the Minister of Revenue will acknowledge that compliance with the T3010 regime at CRA is already quite challenging for many charities.
[Our organization] was pleased to see the introduction in June 2008 of Bill C-62, a Not-for-Profit Corporations Act aimed at reducing the red tape burden placed by governments and regulatory bodies on Canada’s charities and nonprofits. This ruling by the CRTC effectively undermines the spirit and impact of this important legislative initiative. It also undermines the spirit of Parliament’s decision to exempt registered charities from the national Do-Not-Call List (DNCL), which is the principle component of the telemarketing rules that the new CRTC investigative body was set up to enforce.
Apart from red tape, Canada’s charities should not be subjected to unnecessary fees, which serve as a de facto tax on charities. Under the Income Tax Act, charities are exempt from taxation. Further, they must apply their funding and resources to charitable objectives. We and, more importantly, our donors, do not consider registering with and financing a new enforcement body at the CRTC to be a charitable objective. Further, unlike commercial organizations, charities are not able to pass such fees on to customers.
We understand that it is an exceptional request to ask Cabinet to intervene in a decision of a regulatory body. However, there is a long history of federal, provincial and municipal “forbearance” and exemption of charities from fees and regulations that are burdensome and undermine our charitable missions. Charities are exempt from income tax under the Income Tax of Canada; charities that own real estate, such as churches, are overwhelmingly exempt from property tax; charities are exempt from many corporate governance duties and benefit from distinct corporations law regimes; and in the telemarketing arena, charities secured an express statutory exemption to the national DNCL, to avoid placing new constraints on the ability of charities to raise charitable donations and fund our work in our communities. Our fundraising activities result in 22.2 million Canadians choosing to make donations to charities each year. The CRA data base demonstrates that Canadians claim $9B/ year in receipted donations to charities.
For these reasons, we urge you to rescind the CRTC ruling insofar as it applies to charities. Thank you for your consideration of our strongly-felt concerns and your support of Canada’s charities.
Yours very truly,
[CEO/ ED/ Volunteer Chair]
cc. The Honourable Diane Ablonczy P.C., M.P.
Secretary of State (Small Business and Tourism)
C.D. Howe Building
235 Queen Street
Ottawa, Ontario K1A 0H5
cc. Director General, Telecommunications Policy Branch email@example.com. 300 Slater Street, 16th Floor, Ottawa, Ontario K1A 0C8.
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