CRA to Wind Down Political Activities Audits
by Jennifer M. Leddy
On January 20, 2016, the Minister of National Revenue, the Honourable Diane Lebouthillier (the “Minister”), announced that CRA will be winding down the audit program that is directed at the political activities of charities once the current ongoing audits have been finished.
The Minister announced that the audit program is being closed because it has revealed substantial compliance with the rules that govern political activities. Of the 30 completed audits, only 5 have resulted in decisions to revoke the charities’ registration, and all for reasons that were primarily outside their involvement in political activities. The 24 audits still underway will continue “so that the CRA can address any serious deficiencies, consistent with the approach used in the regular charities audit program.” The six remaining scheduled audits will not proceed as political activities audits.
In her announcement, the Minister affirmed the independence of the Charities Directorate with respect to audits, stating that “the independence of the Charity Directorate’s oversight role for charities is a fundamental principle that must be protected. The Minister of National Revenue does not and will not play a role in the selection of charity audits or in the decisions relating to the outcomes of those audits.”
In keeping with Prime Minister Trudeau’s mandate letter to the Minister, reported in our November 2015 Charity & NFP Law Update, the Minister also reaffirmed the government’s commitment to clarifying the rules governing the involvement of charities in political activities, and announced that details of consultations with stakeholders in the charities sector will be forthcoming.
While the news that CRA is concluding the political activities audits and will be holding consultations with the charitable sector are welcome, charities should be mindful that the rules with respect to political activities are still in place and must be followed. Information about the CRA’s Political Activities Policy Statement can be viewed on their website.
Jennifer Leddy, B.A., LL.B. joined Carters’ Ottawa office in 2009, becoming a partner in 2014, to practice charity and nonprofit law following a career in both private practice and public policy. Ms. Leddy practiced with the Toronto office of Lang Michener prior to joining the staff of the Canadian Conference of Catholic Bishops (CCCB). In 2005, she returned to private practice until she went to the Charities Directorate of the Canada Revenue Agency in 2008 as part of a one year Interchange program, to work on the proposed “Guidelines on the Meaning of Advancement of Religion as a Charitable Purpose.”