The CRA has recently completed a 2 1/2 month consultation with Canadians on the ability of Canadian charities to conduct political activities. Here is the full text of the CRA press release on the closing of the political activity consultation on December 14, 2016:

Clarifying the rules governing charities’ political activities: consultation process 2016 to 2017

On September 27, 2016, the Minister of National Revenue announced consultations with charities to clarify the rules for their participation in political activities. As part of this process, the Canada Revenue Agency (CRA) held an online consultation open to all charities and the public from September 27 to December 14, 2016. It also held in-person consultations, moderated by an independent external facilitator, with representatives from the charitable sector. These consultations took place in Winnipeg, Calgary, Vancouver, Montreal, Halifax, Toronto, and Ottawa between November 29 and December 13, 2016.

In addition, the CRA established a consultation panel made up of five individuals with expertise in the regulatory issues facing charities. This panel will use feedback from the online and in-person consultations to make recommendations to the Minister of National Revenue. The panel will submit its report to the Minister in early 2017. The CRA will respond to the report before summer 2017.

The CRA would like to thank all the organizations and individuals who took the time to give their comments, either online or as part of the in-person consultations. Over the consultation period, the CRA received almost 20,000 written submissions from charities and individuals, and met with approximately 175 representatives from the charitable sector.This process could not succeed without your feedback.

The CRA in this case has gone beyond the normal approach to consultation and they should be commended for that. There were a few things that I thought were interesting:

1) There were almost 20,000 written submissions.  Only 500 charities every year say on their T3010 they do political activities but this was such a hot button issue that 20,000 submissions were received!  Is that a lot of engagement with lots of well thought out submissions? Or is it almost all just cut and paste jobs of certain submissions sent in thousands of times? If it really was a lot of substantive submissions then it would be ironic that so many charities and individuals are interested in talking about charities doing political activities rather than actually doing those political activities and acknowledging such on their annual returns.  After all the charity sector cumulatively says on the annual returns they spend only $25 million doing political activities when under the current rules the charity sector could theoretically spend about $25 Billion dollars.  20,000 may seem like a lot of interest but when one thinks that over 15 million Canadians volunteer with charities and over 2.5 million work in charities then one realizes that 20,000 is a small sliver of those engaged in the charitable sector.  

2) The panel of 5 people will give a report to the CRA Minister in “early 2017” and CRA will respond before the summer of 2017.  I wonder how long it is going to take those panelists to read the 20,000 written submissions!!?  Does that mean that there will be no regulatory changes on charities and political activities in the upcoming budget in March or April 2017?   I guess the timelines of this press release give the current government cover to not make legislative changes till 2018 if they intend on making any changes at all.  On the other hand the government can go ahead and make changes but then it makes the “consultation” a bit of a farce. Some might also be disappointed to see a commitment only that CRA will respond to the consultation.   There is no commitment from Finance that they will respond to anything that came up in the consultation.

3) If one is quite cynical one could think that the government has an interesting conundrum.   It can allow Canadian charities (ie. the 20-40 or so who “need” more room than the current rules provide) to do more allowable political activities (those connected with the charity's objects) and even partisan political activities. Allowing more political activities and especially partisan attacks by a small number of essentially political activist organizations that happen to be registered charities will diminish the reputation and trust that the public has in registered charities.  Now that the government is starting to leave the honeymoon phase of governance and make hard decisions, which could upset some registered charities, perhaps it would be best if the reputation of the sector is not as strong as it currently is!  After all one can argue that this government, like most Canadian governments, really likes and appreciates charities, especially those that support them and provide good photo ops for announcements.  

I tend to be less cynical and think that this government is genuinely interested in input from Canadian charities.  The current rules provide ample room for Canadian charities to be engaged in political activities and the biggest impediment is in fact the charity sector lacks an understanding as to the extent to which they can conduct political activities. I hope that the government encourages CRA to refresh the guidance and more importantly to conduct extensive educational programs on the important role Canadian charities can have with respect to political activities.  

Another cynical view of this issue is that from a political point of view changing the rules around political activities – even if that does not really help 99.9% of charities – is that it does not cost much.  Yes, they can look like they are doing something, without it costing much in terms of Federal dollars.  Actually providing affordable housing is expensive.  Actually helping First Nations deal with hundreds of years of oppression is expensive.  Mental health improvements don't come cheap.  So let's rather do something far more important that they received 20,000 submissions on – let us tweak the rules on political activities for Canadian charities even though almost no charities require greater flexibility!  

Yes you say but there are 5 registered charities that were caught under the Harper era political activity audits.  But apparently each of the 5 charities was also involved with other significant non-compliance – well then to help these 5 charities let us not only get rid of the rules on political activities but other rules on foreign activities, T3010 annual filings, receipting, etc.!  Are we really going to throw the whole charity sector under the bus because of these 5 charities?

Previous Liberal governments had no qualms about getting rid of charities who abused their status with questionable political activities – especially pro-life organizations.  In a real democracy we need to have one set of rules that apply to all charities – not one for those we agree with and a much tighter set of rules with those who we don't agree with.  

The Liberals have been in power for over a year – except for a few brief paragraphs they have not indicated how they will change the regulation of registered charities.  As I have discussed before the whole area is a Pandora's box and many who are encouraging change may be very upset when it actually is implemented.