CWP Launches Constitutional Challenge Against Political Activities Cap for Charities

Insofar as things get exciting in charity law, they’ve recently been getting… well, pretty exciting.

Last week, Canada Without Poverty launched a constitutional challenge of the “10% rule”– a regulation that stipulates that (most) charitable organizations can spend no more (generally) than 10% of their budget on “political activities”. CWP charitable mission is to relieve poverty, but their Executive Director, Leilani Farha, writes that “effective strategies to relieve poverty will rely on the active participation of people living in poverty to identify barriers that prevent them from escaping poverty and to propose necessary changes to laws and policies”. Those kinds of activities, Farha says, are currently not ones they can undertake. “We have been granted charitable status to relieve poverty but when we try to do that, this legislation restricts what we can say, how often we can say it, and to whom we can say it.”

The development comes after the new government announced they would be ending a controversial program that had, for the past 4 years, increased scrutiny on seemingly progressive charities for their political activities. In fact, they didn’t really end the program– they just didn’t prolong it. (COCo wrote about that development back in January, if you’re interested).

At COCo, we have regularly advocated for charities to ensure that they well understand the limitations on political activities, and don’t limit their work out of fear or misunderstanding of those rules. That, however, is a stop gap solution to what could be a much more exciting change if the regulation was overturned, or significantly changed. For the philosophy nerds among you, this article by the Philanthropist lays out in some detail the ways that a human rights framework comes into direct conflict with our current ideas about charity. On the other hand, this editorial in the National Post lays out some of the possible problems with a change in the regulation and what more nuanced options might be. For now, we want to leave you with this description of the experience of the CWP itself:

In 2014 and 2015, CRA was given special budgetary allocations to rigorously enforce the political activities restrictions in the Income Tax Act.  CWP was required to provide to CRA minutes of all meetings, copies of all emails exchanged by staff, volunteers, and board members, all publications and other communications for a three-year period.  After poring through this documentation, CRA found that CWP members and staff frequently identified changes that needed to be made to laws or policies in order to alleviate poverty and publicly promoted the  adoption of a national anti-poverty strategy.  CRA also found that some of CWP’s activities “created an atmosphere conducive to advocating for changes to laws and policies”. CRA found that CWP’s political activities included hosting a dinner where people living in poverty ate a meal with members of parliament and other decision-makers and discussed their experiences of poverty and ideas about how to address it; organizing policy summits where people living in poverty could collaborate with social policy experts and academics to develop recommendations for addressing poverty; and offering an online course on Canada’s obligations to address poverty under international human rights law, where people living in poverty could join a community of learners to discuss topics of the day.  The CRA also found that CWP published links on its website to newspaper articles and other materials which were critical of some of the government’s policies and recommended changes.   The CRA found that all of these activities were political activities and made it clear that CWP must severely restrict the content of published materials, websites, emails, workshops, panels, public education campaigns, online courses or any public expression of views by its staff or members about laws, policies or decisions of the government in order to comply with the restriction of “political activities” of charities.

You can read the press release from CWP here.

What do you think about the lawsuit? Is it a good idea?