Topics: What's New from the Charities Directorate of CRA, Canadian Charity Law, Political Activities and Canadian charities
In a Globe and Mail article entitled “Foes of Northern Gateway pipeline fear revocation of charitable status” there is a discussion of recent issues raised about foreign funding on Canadian charities and political activities of Canadian charities.
On the political issue while the Federal government could potentially further restrict political activities of charities than currently required under the Income Tax Act and court decisions I don’t think that this would be a good idea as it would undercut the charity sector, impede important policy dialogue between charities and government and make it more difficult for MPs and government officials to interact with charities.
In fact, few charities are involved with political activities and they don’t spend very much money on it. Out of the 85,000 charities who file their annual return with the Charities Directorate about 460 identify themselves as doing political activities. Furthermore, out of the charity sector’s $192 billion in revenue, charities identify spending only approximately $20 million on political activities which is 0.0001% of revenue.
As I was quoted in the Globe and Mail “Further restrictions imposed on charity’s ability to conduct political activities would not only affect progressive environmental charities but also evangelical churches, pro-Israel lobby groups or angler/hunter organizations. ”
On the discussion about restrictions on US Contributions to Canadian charity my thoughts are I am not aware of any Canadian government initiative to restrict US or foreign funding of Canadian charities. US donors and US charities are generous in supporting all types of charitable activities in Canada from religious, environmental, educational and health care, to name a few. Conversely, Canadian charities and individuals support US groups and initiatives. This reciprocity is mutually beneficial for both countries. If there is a government initiative in Canada that tries to restrict foreign funds it would be difficult to implement and create many problems for Canadian charities including those who have little to do with environmental or political issues who could lose a significant source of their funding.
All donations to Canadian charities from foreign individuals, organizations, or government bodies over $10,000 must be reported to the Charities Directorate of CRA as part of a confidential schedule on the T3010 annual information return and therefore the Federal government is aware of such funding.
There are significant rules restricting the amount of political activities that a Canadian charity can undertake including the Charities Directorate document on “Political Activities” (CPS-022) which restricts the type, nature and amount of political activities. You can see CPS-022 at http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cps/cps-022-eng.html
In general, Canadian charities cannot spend more than 10% of their resources on non-partisan political activities related to their objects and cannot be involved in any partisan political activity. It is vitally important that Canadian charities participate in the public policy discussions. However, charities involved with political activities must be careful to understand the rules and there can be significant consequences for failure to comply with those rules.
Here is the Globe and Mail article:
Foes of Northern Gateway pipeline fear revocation of charitable status
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Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.