Topics: What's New from the Charities Directorate of CRA, Canadian Charity Law, Political Activities and Canadian charities
The Minister of National Revenue, the Honourable Diane Lebouthillier put out a news release on March 7, 2019 dealing the new Advisory Committee on the Charitable Sector (ACCS). I was expecting details in the budget but receiving these details today by press release was a bit surprising. Forgive me for being a bit cynical in this time of the SNC-Lavalin affair in Ottawa I can only imagine that there is pressure on civil servants to put out lots of releases and information to distract, I mean focus, the attention of people on what is really important!
One point is a little funny in light of the SNC matter - "Charities must have confidence that the government respects and encourages their contributions with rules enabling them to participate fully in the development of public policy." I agree completely but right now about the only thing that many Canadians are confident about is that this government has infinite patience for a really badly run company that has exploited charities by using bribery and is prepared to change the law for that company and let them avoid prosecution. The Globe and Mail reported today "Federal Court of Canada strikes down SNC-Lavalin’s request to review prosecutor’s decision to proceed with charges". The government's changes in December 2018 to the Income Tax Act lifting restrictions on political activities does not fix all problems and certainly does not result in charities getting the access that SNC-Lavalin seems to have!
Anyway back to the Advisory Committee on the Charitable Sector (ACCS). Funny acronym - does it sound like "Axe". Hopefully, it will be productive and useful and not be axed as quickly as the last advisory committee. I am beginning to think that someone at CRA has a pretty wicked or sick sense of humour (remember NPORIP!)
The government had promised in their 2018 Fall Economic Update:
Led by the Canada Revenue Agency, the Advisory Committee will be made up of stakeholders from the charitable sector, and will provide advice to the Government on important issues facing charities on an ongoing basis. The Government is providing $4.6 million in new funding over the 2018–19 to 2023–24 period for the Advisory Committee to strengthen the relationship between
government and this important sector.
Now we know that the nomination of Hilary Pearson and Bruce MacDonald will be nominated as co-chairs of the ACCS from the charity side and on the CRA side the co-chair will be, Geoff Trueman, Assistant Commissioner of the Legislative Policy and Regulatory Affairs Branch. The press release advises that there will also be 12 other members who will be confirmed in the near future.
Both Hilary Pearson and Bruce MacDonald are talented and knowledgeable individuals. The fact that both lead umbrella organizations, both largely funded by wealthy individuals, foundations or corporations, and both organizations work closely together on many issues and often take similar positions, will lead some to have concerns about diversity. The charity sector is quite diverse. As well stakeholders of the charitable sector like beneficiaries and donors are important too. We will wait and see what the rest of the committee looks like.
It is not clear when the ACCS will start. While it is possible that this committee will start in the summer it is also possible that it might not start until after an election later this year.
Here is the text of the press release:
The Government of Canada delivers on its commitment to modernize the rules governing the charitable sector
From: Canada Revenue Agency - News release March 7, 2019 Ottawa, Ontario Canada Revenue Agency
Charities play a key role in our society and provide valuable services to Canadians, including the most vulnerable, and the Government of Canada recognizes the vast experience they bring to our public debate. Charities must have confidence that the government respects and encourages their contributions with rules enabling them to participate fully in the development of public policy.
Today, the Honourable Diane Lebouthillier, Minister of National Revenue, announced the nomination of Hilary Pearson and Bruce MacDonald as co-chairs of the newly created permanent Advisory Committee on the Charitable Sector (ACCS). The ACCS will provide recommendations to the Minister of National Revenue and the Commissioner of the Canada Revenue Agency on important and emerging issues facing the sector.
The government implemented important legislative changes to the rules governing the political activities of charities in December 2018 to respond to many of the recommendations of the Report of the Consultation Panel on the Political Activities of Charities. Today’s announcement marks the government’s final response to this report.
As stated in May 2017, this response lifts the suspension on the remaining audits and objections under the political activities program. The new rules on public policy dialogue and development activities, passed into law on December 13, 2018, will apply retroactively to the remaining audits and objections.
“The actions we have taken, in collaboration with the charitable sector, represent a significant milestone for the Government of Canada, and the new Advisory Committee on the Charitable Sector will provide a forum to keep working together in the future. I would also like to thank the Consultation Panel members for their important work and insights, which have been instrumental to fulfilling my mandate and the government’s commitment to clarifying the rules that govern the political activities of charities.”
-The Honourable Diane Lebouthillier, Minister of National Revenue
“This permanent Advisory Committee will provide an ongoing and substantive dialogue with the federal government around the policy and regulatory issues that affect the effectiveness and sustainability of the charitable sector. I am excited about the opportunity to play a constructive role in shaping this dialogue, in consultation with other sector leaders.”
-Hilary Pearson, President & CEO, Philanthropic Foundations Canada
"The creation of a new Advisory Committee on the Charitable Sector is an important step forward in continuing to evolve the operating environment for charities, non-profits and social entrepreneurs. Our organization is delighted to participate on the Advisory Committee and work with both charitable sector experts and government officials as the Committee builds an action plan for the future."
-Bruce MacDonald, President & CEO, Imagine Canada
The Government of Canada committed to clarifying the rules governing registered charities’ involvement in political activities. As part of this commitment, consultations with the public and the charitable sector were launched and the Consultation Panel was established in September 2016.
Online consultation on clarifying the rules governing charities’ political activities was held from September 27 to December 14, 2016.
The Report of the Consultation Panel on the Political Activities of Charities was published in March 2017 and contained four recommendations, all of which the Government has responded to.
On May 4, 2017, as an immediate first step to respond to the Panel’s recommendations, Minister Lebouthillier askedthe CRA to suspend all action in relation to the remaining audits and objections that were part of the Political Activities Audit Program, initiated in 2012.
Ms. Pearson and Mr. MacDonald will join the CRA co-chair, Geoff Trueman, Assistant Commissioner of the Legislative Policy and Regulatory Affairs Branch and 12 other members who will be confirmed in the near future.
Ms. Pearson is the President of Philanthropic Foundations Canada, a national network of grant making organizations in Canada with 135 members, including many of the largest private charitable foundations in the country. Prior to joining PFC, Ms. Pearson held senior positions in central agencies of the Government of Canada, was Vice-President at Royal Bank of Canada, and a senior strategy consultant at the Montreal consulting firm Secor. An expert in non-profit governance, Ms. Pearson has served on several national non-profit boards of directors, including those of Pearson College of the Pacific, Imagine Canada, the Stratford Shakespeare Festival of Canada, CARE Canada, and Indspire. She holds a BA and MA from the University of Toronto, and honourary doctorates from Carleton University and the University of New Brunswick. She was appointed a Member of the Order of Canada in July 2018.
Mr. MacDonald has worked in the charitable sector for over 30 years. He’s worked as CEO of Big Brothers Big Sisters of Canada, has led major change initiatives, and developed long and innovative partnerships with corporations and other charities. As President & CEO at Imagine Canada, he works with young people, older adults, sports and recreation, and community service clubs. Mr. MacDonald holds a Bachelor of Commerce in Sports Administration, a Masters in Management in the Voluntary Sector and is mentioned in the Guinness Book of World Records.
Advisory Committee on the Charitable Sector
Charities program facts and figures
Minister Lebouthillier welcomes the Panel Report on the public consultations on charities and political activities
Report of the Consultation Panel on the Political Activities of Charities
Clarifying the rules governing charities’ political activities: consultation process 2016 to 2017
Budget Implementation Act, 2018 No. 2
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
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.