Court strikes down gag on charities

The BC Humanist Association is welcoming a decision by the Ontario Superior Court of Justice striking down rules that restrict the political activities of charities as a victory for freedom of expression.

The decision, released Tuesday, means charities no longer need to navigate the artificial and often arbitrary divide between whether activities are deemed charitable or political when pursuing their mission. It frees charity staff up to focus on their effecting positive change in society.

Prior to the ruling, charities could spend no more than 10% of their resources advocating for changes in policy or legislation. The rules were heavily criticized by charities as arbitrary, as submitting a brief to a parliamentary committee was considered non-political while encouraging supporters to do the same was political.

The current government ran on a commitment to modernize the rules and a consultation completed last year suggested the 10% rule be repealed.

Ian Bushfield, Executive Director, BC Humanist Association:

Humanists across Canada have supported the legalization of abortion and medical assistance in dying and we continue to call for legal changes to permit humanist marriages. This ruling means charities like ours are freer to advocate for these changes.

Until now, every charity had to account for every minute spent organizing supporters for change, including the time spent deciding internally whether they could afford to take on a campaign.

We now need the government to update the legal definition of charity to reflect this ruling and the modern consensus about what a charity is and what it does.

Canada Without Poverty initiated the lawsuit following an audit by the Canada Revenue Agency that determined it to be in gross violation of the 10% rule. The charity argued that the most effective way to achieve its mission of relieving poverty was by pressing government officials to change policies.

Justice Morgan wrote in his decision that, "Simply put, there is no way to pursue the Applicant's charitable purpose - using methodology that is recognized as necessary by Parliament itself - while restricting its politically expressive activity to 10% of its resources as required by the CRA." He went on to write:

It is an understatement to say that, "There is no widely agreed upon definition of what is political." Accordingly, "it is difficult to say what, if anything, 'political' signifies in its various applications and how it signifies what it does." Contemporary debate in political philosophy reflects this difficulty insofar as it has focused more on deconstructing the "political" than defining it.

There is no definition of "political activities" in s. 149.1(1) of the Income Tax Act, the definition section specifically applicable to charities and their activities. Virtually all of the Applicant's activities are communicative or expressive and, seen in that light, they are all in some sense of the word "political". This raises both a practical and a philosophical question. In an era when the personal has long been considered political, can one coherently distinguish between political activities and charitable activities, or, for that matter, any other kind of activities?

While describing some of the findings of the audit of Canada Without Poverty, Justice Morgan notes the practical dilemmas created by the 10% rule:

Finally, to the extent that the CRA's Political Activities Audit also impugns the Applicant's internal communications, it suggests that even the organization's contemplation of "political activities" consumes resources in a way that places the Applicant offside the s. 149.1(6.2) limit. This poses perhaps the most profound dilemma of all. In order not to overrun the 10% rule imposed by the CRA Policy Statement, the Applicant is compelled to contemplate what is and what is not a "political activity". But, of course, there is an inherent circularity in that exercise. One need not be an expert in political theory to understand that "[t]he definition of politics is in itself a political act". The Applicant may be consuming part of the allotted 10% of its resources by determining whether it is permissible to consume those resources.

The judge draws a comparison between freedom of expression and freedom of religion. He notes jurisprudence recognizes that the state cannot infringe religious freedom in a way that is more than "trivial or insubstantial," without a reasonable justification. In this case, Justice Morgan found that the government presented no "pressing and substantial objective" for the restriction on a charity's political expression.

As such, Justice Morgan ruled that sections of the Income Tax Act that place limits on a charity's "political activities" are unconstitutional and are no longer in effect.

The federal government has not said whether it will appeal the decision to the Ontario Court of Appeal. Nevertheless, the government has also been critical of the rules in the past.

Read more:

The ruling

Frequently asked questions on charities and political activities, from Environmental Defence

Send a letter to call on the federal government to update the law

Pictured: Headquarters of the Canada Revenue Agency in Ottawa

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