The move comes despite the government’s plan to repeal the section of the Income Tax Act (ITA) in dispute, which limits the political activities of charities, including many Catholic organizations.
In a July 16 decision, the Ontario Superior Court of Justice ruled in favour of Canada Without Poverty’s (CWP) legal challenge to the law that threatened its 43-year old charitable status for its advocacy of such things as a national anti-poverty strategy. The Canada Revenue Agency (CRA) told CWP it would lose its charitable status because it was was in violation of the section of the ITA that restricts political activity to 10 per cent of a charity’s overall endeavours.
“The Applicant, a registered charity, has a right to effective freedom of expression — i.e. the ability to engage in unimpaired public policy advocacy toward its charitable purpose,” wrote Justice Edward Morgan in the Ontario Superior Court of Justice decision of July 15. “The burden imposed by the impugned section of the ITA and by the policy measure adopted by CRA in administering that section runs counter to that right.”
The government announced Aug. 15 it would appeal because of “significant errors of law,” but added it intended to change the Income Tax Act to remove the limits on non-partisan political advocacy by charities as a “matter of good public policy.”
The government said it intends to “allow charities to pursue their charitable purposes by engaging in non-partisan political activities and in the development of public policy.”
However, the head of CWP said that if the government wins the appeal, it opens the door for future governments to restrict the activities of charities.
“The decision by the government to appeal our case is troubling and frankly, wrongheaded,” said CWP’s executive director Leilani Farha in a statement.
CWP launched the charter challenge in 2016 after it and a number of other charitable organizations, especially environmental groups, were audited by CRA for engaging in political activity under the Harper government.
“Ultimately, their position is that what happened to CWP under the previous government does not violate the Charter,” Farha said. “If they win on appeal, any future government would be free to re-introduce the same legislative provisions and the same thing could happen to the charitable sector all over again. For that reason, CWP will continue to fight for the rights of people living in poverty through the courts,” she said.
Organizations granted charitable status are allowed to issue tax receipts to donors, which are vital to fundraising efforts.
Barry Bussey, director, legal affairs for the Canadian Council of Christian Charities said he thinks the government’s announced policy change is a positive step.
“As long as the political activity is advancing the charitable objects of the charity then there is no longer any limit,” he said. “That is good.”
However, he added, “we are still left with a government that wants control over who gets charitable status — environmental groups are in, pro-life are out,” he said. “The government has no problem for groups to be political on the pipelines, but not pro-life.”
Bussey said he believes the government is appealing because it saw CWP claiming a right to charitable status, noting that the judge characterized the federal governments’s arguments as saying “registered charitable status is a megaphone and its deprivation does not amount to a gag.”
“You are dealing with a situation where the current government has a particular stand,” Bussey said. “We’ve seen that with the Canada Summer Jobs issue. They have no problem allowing or funding charities that are against the pipeline, but they do have a problem with campaigns dealing with the pro-life issue.”