University of Victoria's Environmental Law Centre Proposes Sweeping Reform of Canadian Charity Law
The report was commissioned by the environmental group DeSmog Canada.
Under current legislation, registered Canadian charities cannot spend more than 10 per cent of resources on political activity or advocacy.
In 2012, the federal government announced a new audit program by the Canada Revenue Agency to investigate whether any charities may have violated political spending limits. Those charities audited include Amnesty International Canada and Pen Canada, as well as some of Canada’s most prominent environmental charities, including the David Suzuki Foundation, Tides Canada, West Coast Environmental Law, the Pembina Foundation, Environmental Defence, Equiterre and the Ecology Action Centre.
Since many of the audited groups have been highly critical of government action, many have expressed the fear that the new audit policy is either intended to silence them or will produce that effect indirectly. In theory, if auditors find that a registered charity has exceeded the cap on the amount of donated money that can be spent on political advocacy, it could see its charitable status revoked.
The report recommends:
- clearer statutory rules about what constitutes permissible political activity and a more generous limit on allowable political activities
- amending the Income Tax Act and policies to provide for less draconian penalties for inadvertent, non-repetitive or minor exceedances of limits on political activities
- establishing a politically independent Canadian Charities Commission
- modernizing the definition of “charitable purposes” to allow charitable organizations to pursue, as their primary objective, political activities in support of a charitable purpose such as the "prevention of poverty" (as opposed to the currently allowed "alleviation of poverty")