The Conservatives have put forward some proposals in their platform that are unclear and could have a significant negative effect on the charity sector, especially larger charities such as universities, hospitals, international development and environmental organizations.

Here are the proposals from pages 75 and 90:

 

Preventing Foreign Interference Through Greater Transparency

Canada’s Conservatives will pass a Foreign Agents Registry Act requiring individuals and companies acting as agents of designated foreign principals (country, corporation, entity or individual) in a political or quasi-political capacity including lobbying, policy development, advertising, and grassroots mobilization to register. Requirements for disclosure would include the amount of payment, the nature of the relationship, and the activities performed.  …

 

Pass a Foreign Agents Registry Act requiring individuals and companies acting as agents of designated foreign principals (country, corporation, entity or individual) in a political or quasi-political capacity including lobbying, policy development, advertising, and grassroots mobilization to register. Requirements for disclosure would include the amount of payment, the nature of the relationship, and the activities performed.

° Make it an offence for any entity that has spent more than $100,000 in a calendar year on political activity of any kind (federal, provincial, or municipal) to receive foreign donations of any amount.

 

Amend the Elections Act to: 

  • Prohibit any entity that receives more than 2.5% of its total donations from foreign sources during the year before the writ period from advertising during the writ period or during the pre-election period.
  • Create a positive obligation to trace all funds expended by an entity during a writ period to Canadian sources.

 

 

The details are not yet clear but based on the initial wording I am very concerned about these proposals and their impact on the Canadian charity sector.  The FARA would “° Make it an offence for any entity that has spent more than $100,000 in a calendar year on political activity of any kind (federal, provincial, or municipal) to receive foreign donations of any amount.”  The definition of the political activities is very broad and includes “lobbying, policy development, advertising, and grassroots mobilization“.

So an entity such as the University of Toronto spends more than $100,000 on political activities of any sort – then they cannot receive over $1 billion in foreign donations (yes billion) that they currently receive.  The University of Toronto has revenue of around $3.5 billion per year.   Care Canada has a budget of $100 million and $48 million comes from outside the country.   World Vision Canada has a budget of $400 million and receives about $142 million from foreign sources.

 

So charities may have to make a choice – completely remove themselves from political activities or give up on foreign funding.   This makes no sense.

Unfortunately, the Conservatives and Liberals have been caught in a ridiculous internecine conflict over charities and political activities.    Started by Harper and his audit of charities and political activities, then the Liberals poured gas on the fire by allowing charities to conduct unlimited political activities as long as they are not partisan and ordered CRA inappropriately to suspend certain audits.   Jason Kenney and his ridiculous ‘war room’ have poured more gas on the fire.

The CRA has now removed any questions on political activities on the T3010 or what are now referred to as “Public Policy Dialogue and Development Activities”.  So we now have almost no visibility as to the political activities of the charity sector.  CRA at a minimum should immediately reinstate the paragraph that charities were provided to describe their “Public Policy Dialogue and Development Activities”.

We need to have a reasonable accommodation and recognition that charities have a legitimate role to play in our democratic process but also get extremely high tax subsidies for donations and do not have to pay any taxes on the appreciation of their valuable assets.

The old rules that allowed charities to spend 10-20% on political activities were fine for 99.9% of charities but because of court action and intense lobbying by a small number of charities those rules were replaced.  Now a charity does not have to do any charitable activities – it can do unlimited political activities.  Not surprisingly confidence in charities has plummeted over the last decade.

If FARA is passed then charities will need to comply with 4 completely different sets of political regulations namely:

  1. Federal Income Tax Act
  2. Lobbying registration at the Federal, provincial and sometimes municipal level
  3. Third-Party Election Advertising at the Federal and provincial level
  4. FARA at the Federal level if it is brought in.

 

We need fair rules governing charities and political activities and an end to this manipulation of the charity sector for partisan political gains.