Charities and the Ontario Governments use of the notwithstanding clause

Many people are quite worried about the Ontario Government’s use of the notwithstanding clause in the Keeping Students in Class Act that imposes a 4-year collective agreement on a group of workers (educational assistants, custodians and early childhood educators) that has not even yet had a strike. This is not only unprecedented but really opens up the ability of governments to override any rights. This fundamentally undermines all collective bargaining and may only be the beginning. If government feels that it can frequently use the notwithstanding clause to override the rights of people in the constitution and also the ability of people to challenge actions in court, then it dangerously undermines our Constitution.

Many groups are thinking about how they should respond to this government action. Individuals have freedom of speech which, although not absolute, is quite strong. As well, non-profits that are not registered charities also have tremendous freedom of speech and are allowed to conduct political activities and don’t have to deal with the same restrictions as registered charities.

Registered charities, on the other hand, have significant rules that they need to be cognizant of. Registered charities can carry out Public Policy Dialogue and Development Activities (PPDDAs).

In 2018, changes were made to the Income Tax Act that allows Canadian registered charities to conduct ‘public policy dialogue and development activities (PPDDAs). CRA describes PPDDAs as activities a charity carries out to participate in the public policy development process or to facilitate the public’s participation in that process.

Under CRA’s Guidance on PPDDAs, ‘public policy’ is defined as “the laws, policies, or decisions of a government, in Canada or a foreign country.” CRA considers PPDDAs to include: (i) providing information to the public relating to a charity’s charitable purposes (including conducting public awareness campaigns) in order to inform or persuade the public in regard to public policy; (ii) research into public policy and distribution of the research, as well as discussion of the research with the media and others; (iii) disseminating opinions on matters related to a charity’s purposes to develop public policy; (iv) advocacy to keep or change a law, policy, or decision of any level of government in Canada or a foreign country; (v) mobilizing others to contact politicians to express support for, or opposition to, a particular law, policy or decision; (vi) representations (in writing or verbally) to elected officials, public officials, political parties, etc. to bring views to the public policy development process [keep in mind that this may require registration under lobbying legislation]; (vii) providing forums and convening discussions (i.e. inviting competing candidates and political representatives to speak at an event or requesting written submissions for publication to discuss public policy issues that relate to a charity’s purposes); and (viii) communicating on social media in respect of views on public policy.

PPDAAs must be connected to the stated purpose of the charity as long as those activities are not directly or indirectly partisan. PPDDAs are essentially allowable non-partisan political activities. A charity may publicly agree or disagree with a law, policy, or decision of a government but, in doing so, cannot support or oppose any political party or candidate for public office. For example, a charity that provides a platform for the public to comment on and discuss issues (i.e. a website or a blog) must monitor that platform and remove messages that support or oppose a political party or candidate for public office. There is quite a bit of information on (and examples of) allowable and prohibited PPDDA activities in CRA’s Guidance, and we would encourage charities to review it very carefully in light of the activities they are contemplating.

Keep in mind that a stated charitable purpose is not simply the legal purposes of the charity but a purpose that meets the following three criteria:

• the purpose appears in the charity’s governing documents
• the purpose falls within one of the four categories of charity
• the purpose provides a benefit to the public (see Policy statement CPS-024, Guidelines for registering a charity: Meeting the public benefit test), and this includes a requirement that any private benefit conferred is necessary, reasonable, and proportionate (see also Guidance CG-013, Fundraising by registered charities)

Here are some of the views of CRA in its guidance on avoiding supporting a candidate or political party:

Direct and indirect support or opposition

Direct support or opposition means either of the following:

• the charity’s external messaging (for example, social media posts, website materials, print publications, speeches) communicate that it supports or opposes a political party or candidate
• the charity transfers any of its resources (for example, financial, human, or physical resources) to a political party or candidate, or allows a political party or candidate to use its resources at below fair market value

Examples of direct support or opposition could include:

• endorsing a candidate over social media
• telling people in person or on a charity’s website not to vote for a political party
• making a donation to a political party or a candidate’s election campaign
• buying tickets to a political party’s fundraiser
• sending volunteers, paid staff, or board members to accompany a candidate in a door-to-door election campaign, as representatives of the charity (also see Representatives of a charity involved in politics on their own personal time)
• inviting only one candidate in an election to speak to the charity’s supporters, without giving all candidates an equal opportunity to present their views and answer questions
• allowing or assigning paid staff or volunteers to work for a candidate’s election campaign, rather than carrying on work for the charity
• allowing a political party to use a charity’s premises, at below fair market value

Indirect support or opposition means either of the following:

• the charity’s records or internal messaging explicitly reveal it carried on an activity to support or oppose a political party or candidate
• the charity transfers any of its resources to a third party, to be used to support or oppose a political party or candidate

Examples of indirect support or opposition could include:

• The internal minutes of a meeting of the directors of a charity record their explicit decision to oppose a candidate in a provincial election whose views on a policy issue differ from those of the charity, by carrying out PPDDAs that specifically target his riding but do not refer to the candidate.
• A charity temporarily assigns some of its staff members to work for a non-profit organization that it regularly collaborates with, on the understanding the staff members’ salaried time will be used to support the election campaign of a candidate who is seeking to address the same social issue as the charity.
• A charity’s internal planning documents explicitly confirm that it will oppose a political party that takes a different view on a certain policy issue, by holding a public demonstration in front of the building where the party is gathering for its annual convention.
• A charity develops an internal strategic report that explicitly states the charity will support a political party through its PPDDAs, by publishing research materials that will offer evidence and arguments in favour of the party’s position on an issue, without ever referring to the political party in its public materials.

A charity that provides a platform for the public to comment on and discuss issues (for example, a website, a blog, or a social media page) must monitor these platforms to the extent allowable by the platform itself. If possible, the charity is expected to remove, in a timely manner, any comments made on its platform that support or oppose a political party or candidate for public office. In such a case, a charity might choose to add a notice to its platform that messages that support or oppose a political party or candidate will be removed.

The CRA does not consider a charity to support or oppose a political party or candidate if it merely receives a gift from a party or candidate, or is promoted by a party or candidate. For example, if a political party, candidate, or elected representative donates to a charity, or compliments the charity on social media, the CRA would not consider the charity to support or oppose that political party or candidate on this factor alone.

Allowed: Communicating about policy issues

A charity may carry out PPDDAs that support or oppose a law, policy, or decision of government that a political party or candidate also supports or opposes. A charity can do this at any time, inside or outside of an election period, as long as in doing so the charity does not refer to or otherwise identify the political party or candidate.

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. For example, a charity’s PPDDAs are not, nor do they become, support of or opposition to a political party or candidate, if a political party or candidate:

• is commonly known or understood to have a specific view on the same issue
• publicly communicates a view on the same issue
• adopts a policy approach suggested by the charity, puts part of the charity’s policy research or commentary on their website or other communications platform, or uses part of the charity’s research in an activity
• comments positively or negatively on the charity or the charity’s PPDDAs

Examples

Allowed PPDDAs, and not prohibited direct or indirect opposition to a political party
A charity that is registered to support newly arrived refugees in Canada posts on its blog its experiences working with these individuals, and its opinions on the refugee system, an issue on which a provincial political party has expressed differing views.

Prohibited direct support for a candidate
The charity tells people to vote for the candidate with a particular view on Canada’s refugee system.

Not an activity of the charity, and not typically a concern for the CRA
A candidate in a municipal election calls for new local government programs to help refugees, and cites a charity’s publications on the issue as support.

 

We also note that a charity must keep records as evidence that its primary consideration in carrying out PPDDAs is to further its stated charitable purpose and provide a public benefit. As long as a charity’s PPDDAs further its stated charitable purpose, the Income Tax Act places no limit on the amount of PPDDAs in which a charity can engage.

There are other rules that relate to the political activities of charities, including third-party advertising and lobbyist registration rules.

We have assisted many registered charities in dealing with issues relating to political activities and if you need assistance or education on the rules, let us know.