Budget debates: Why have Canadian charities not been more politically engaged?

By Paul Heidebrecht, MCC Ottawa Office Director

The government has introduced a myriad of changes in its budget implementation bill that are currently being debated by Parliamentarians. One relatively obscure set of changes impacts the charitable sector, modifying the Income Tax Act to enable the Canada Revenue Agency (CRA) to give more scrutiny to the political activity of registered charities.

What should Canadians who support charitable organizations such as MCC think about this?

In part because these changes have been perceived to be targeting environmental organizations, they have gotten a fair bit of coverage in the media. After all, they were introduced soon after Minister of Natural Resources Joe Oliver accused “environmental and other radical groups” of trying to use money from “foreign special-interest groups” to hijack review hearings for the proposed Gateway pipeline.

And, during a special Senate debate, Senator Donald Plett went so far as to suggest that environmentalists would take money from Al Qaeda, Hamas, and the Taliban.

Thus the message conveyed by the news headlines is one of great concern:

While there are reasons for concern over the potential impact of this legislation, I don’t think speculating over the government’s motivation is of much use. I do, however, think that this debate provides the opportunity to learn something important about advocacy.

Let’s be clear at the outset: the budget implementation bill does not change the definition of political activities for registered charities, or the amount of political activity that is permitted.

So, it is still appropriate for a charity to, as CRA regulations put it, “explicitly communicate a call to political action,” or “encourage the public to contact an elected representative or public official” in order to “retain, oppose, or change the law, policy, or decision of any level of government in Canada or a foreign country.”

Indeed, the CRA actually frames political activity in a positive way. Rather than describing advocacy as a threat, or of minimal importance, the government provides an eloquent rationale for why charities should be politically engaged:

Through their dedicated delivery of essential programs, many charities have acquired a wealth of knowledge about how government policies affect people’s lives. Charities are well placed to study, assess, and comment on those government policies….

Beyond service delivery, their expertise is also a vital source of information for governments to help guide policy decisions. It is therefore essential that charities continue to offer their direct knowledge of social issues to public policy debates [italics added].

Finally, I would emphasize that the key restrictions imposed by the government on the political activities of charities also remain unchanged going forward: these activities must not be illegal, must not be partisan, and must not consume more than 10% of a charity’s resources.

Judging from data collected by the CRA, charities are far from approaching this limit. Less than 1% of all Canadian charities report spending any money on political activities. And the total amount of money spent by the sector as a whole on political activity is approximately 0.2% — one fifth of one percent — of overall revenue.

This is certainly a long way from the 10% limit!

So perhaps the first question this debate should prompt is not to ask why the government is restricting the advocacy efforts of charities. Canadian law continues to provide considerable space for this dimension of their work.

Perhaps the first question is to ask why charitable organizations have been spending so little on advocacy.

Why have Canadian charities not been more politically engaged?

By Paul Heidebrecht, MCC Ottawa Office Director

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