After years of turmoil around the topic, the federal government moved recently to reform treatment of charities’ “public policy dialogue and development activities”. The reform was, at least in part, in response to the striking down as unconstitutional of certain provisions of the Income Tax Act dealing with registered charities’ political activities.
In a 2018 case, the Ontario Superior Court found that the measures violated the Canadian Charter of Rights and Freedoms.
One of the outcomes of the reform was clarity on the long troublesome area of the overlap between policy positions of registered charities and those held by political parties.
It is undisputed that charities should not engage in partisanship. However, many charities develop stances on policy matters that are later adopted or adapted by political parties. These positions can originate in a host of ways – among them, in an organization’s frontline experience, out of research it does, or, in the case of faith-based groups, from tenets of belief.
Having just been freed up under the federal regime to fully engage in the public policy process, Alberta charities apparently now have to curtail their activities in the face of the EFCDA measures.Historically, developing policy positions related to their missions that are the same or similar to those taken by political parties or candidates has placed charities at risk of running afoul of the prohibition on partisanship in the Income Tax Act. Neither the old legislation nor the old guidance on political activities provided charities with much information on assessing circumstances where positions overlapped or were shared. That is no longer the case.
The explanatory guidance on the new legislation released by the Canada Revenue Agency Charities Directorate (CRA), CG-027 Public policy dialogue and development activities by charities, makes clear that policy originating separately from political parties and candidates does not put charities offside the rules against being partisan. Whether positions overlap or are later endorsed by parties or candidates is not a determining factor.
The guidance states:
The actions a political party or candidate may independently take do not transform the activities of a charity into direct or indirect support of or opposition to that party or candidate. What the CRA considers is the activities of the charity itself.
Now that this problem has been resolved federally, however, it has arisen again in Alberta provincial law. The province’s Election Finances and Contributions Disclosure Act (EFCDA) regulates spending and other support for political parties or candidates both during and outside election periods.
EFCDA rules during election periods are stricter and are designed to preclude charities from participating in campaigns. Charities cannot register to do any of the types of activities governed by EFCDA during election periods.
Among the things the EFCDA deals with is certain paid advertising. Specifically it regulates any advertising message “that takes a position on an issue with which a registered party, the leader of a registered party, a member of the Legislative Assembly, a registered nomination contestant, a registered leadership contestant or a registered candidate is associated…” This wording, and lack of guidance on the meaning of “associated”, means charities face a risk that promotion of policy positions that have been independently arrived at will be mistaken for advertising linked to a political party or candidate.
It is undisputed that charities should not engage in partisanship. However, many charities develop stances on policy matters that are later adopted or adapted by political parties.Outside of election periods, such paid advertising requires registration of the sponsoring organization and is subject to other restrictions. Within election periods, charities cannot carry on this activity because they are not eligible for registration.
How a charity that has an ongoing initiative to promote its policy position – for example a billboard campaign or a sponsored supplement planned for a publication – is supposed to immediately halt the initiative at the onset of an election period is not explained in the statute or the Elections Alberta material on the legislation.
Among representations potentially caught by the law are minimum wage campaigns by poverty charities, health charity information inserts in newspapers, and advocacy of religious stances on medical or educational matters.
Enforcement of the legislation is complaints-based and includes a range of sanctions for non-compliance. The statute does not contain a due diligence defence for charities that err in good faith about whether a position is associated with a party or candidate.
Having just been freed up under the federal regime to fully engage in the public policy process, Alberta charities apparently now have to curtail their activities in the face of the EFCDA measures. If nothing else – as was seen under the old federal regime – vague rules and complex compliance requirements are apt to make Boards of Directors overly cautious in authorizing public policy work by their organizations.
At a minimum, Elections Alberta needs to release guidance indicating that the legislation is not intended to cover promotion of policy positions developed by charities independently of political parties or candidates, then taken up by them routinely without the charity’s participation or knowledge. Beyond that, it remains to be seen whether the law will be challenged in the courts and, if so, whether it will survive Charter scrutiny.