Opening the door to an engaged civil society

For Canadian charities, political activity is now a constitutionally protected form of freedom of expression. The federal government has withdrawn its appeal of the 2018 ruling by Justice Morgan in the Canada Without Poverty (CWP) case. Ruling on this case, Justice Morgan declared the 10% limit on political activities by charities to be unconstitutional.

This decision asserts that the charitable sector’s efforts to engage in public policymaking process are protected by the freedom of expression provision in the Canadian Charter of Rights and Freedoms.

The constitutional challenge was brought by Canada Without Poverty (CWP), a national charity advocating for the relief of poverty. The organization had come under threat of losing its charitable status for doing work it considered essential to its charitable purpose. At the time, auditors at the Canada Revenue Agency (CRA) had determined that 98.5 percent of CWP’s work fit the definition of political activities, thus greatly exceeding the 10 percent limit imposed by the Income Tax Act.

In addition to withdrawing its appeal of the CWP decision, the federal government amended the Income Tax Act in December 2018 to eliminate any reference to political activities as a limit on charitable activity in furtherance of charitable purpose (other than activities of a politically partisan nature). Charities now have no restriction whatsoever on carrying out what is called “Public Policy Dialogue and Discussion”. The Canada Revenue Agency is now seeking input from the public on draft guidelines regarding this new concept (see: Public policy dialogue and development activities by charities.)

These historic decisions open the door for government and civil society to work together to address complex challenges today and in years to come.