The ground rules for Canadian charities engaged in public policy development have shifted dramatically in recent months, with several new developments:
- In December 2018, new federal legislation was passed permitting charities to engage in public policy dialogue and development activities (PPDDAs).
- In January, CRA released their draft guidance on PPDDAs giving us a first look at how CRA plans to implement the newly implemented PPDDAs of charities in Canada.
- Last week, the federal government dropped their appeal of the Canada Without Poverty decision.
This article summarizes the draft policy, which gives guidance on how the CRA plans to apply the new PPDDAs rules, and how charities can utilize this new tool to undertake their charitable purposes.
Public policy dialogue and development activities are activities that a charity can pursue to seek to influence the laws, policies or decisions of a government, whether in Canada or a foreign country. They allow Canadian charities to participate in public policy development processes, or assist and facilitate the public’s participation in these processes. Any existing charity can use PPDDAs, as long as they align with the charity’s purposes, using up to 100% of their resources (a major change from the previous 10% cap).
CRA specifically recognizes the following non-exhaustive list as permissible PPDDAs:
- Providing information on public policy issues
- Conducting research
- Disseminating opinions
- Carrying out advocacy
- Mobilizing others to take action
- Making representations to government
- Providing forums and convening discussions
- Communicating on social media
However, it is important to note that existing limitations restricting charities from directly or indirectly supporting or opposing a political party or candidate for public office remain in force. Partisan activities are always impermissible.
PPDDAs are not a recognized charitable purpose. Rather, they are activities which can be used to further a charitable purpose of the charity which remains within one of the four existing categories of charity and provides a benefit to the public. This means that a charity’s governing documents cannot refer to the purpose of influencing laws, public policies or decisions of a government.
PPDDAs are an activity that can be used to achieve the stated purpose of the charity. CRA has established two criteria to determine whether PPDDAs further the stated purpose:
- The PPDDAs relate to the charity’s stated charitable purposes; and
- The PPDDAs, when considered together with the charity’s stated charitable purposes, would provide a benefit to the public.
For example, a charity could achieve their purpose of relief of poverty by providing information to the public about the benefits of enhancing social assistance programs for the impoverished.
PPDDAs allow charities to engage in activities that participate in the public policy development process in Canada or abroad. However, there are existing limitations on political activities. The Income Tax Act prohibits a charity from devoting any part of its resources to the direct or indirect support of, or opposition to, any political party or candidate for public office.
A charity is permitted to agree or disagree with actions or policy decisions of a government, but cannot support or oppose any political party or candidate for public office. Communications relating to policy issues in general should not refer to any candidate or political party.
Notably, CRA also requires that any charity that provides a platform for the public to comment on and discuss issues (on a website, a blog or a social media page) must monitor those platforms and remove messages that support or oppose a political party or candidate for public office.
The CRA policy states that the actions of a political party or candidate taken independently do not transform the activities of a charity into direct or indirect support or opposition to that party or candidate. For example, if a political party adopts a charity’s policy approach, or puts part of the charity’s policy research or commentary on their website, this will not transform the activities into direct or indirect support of a political party.
The guidance provides that a charity can publish on its website or social media platform or otherwise distribute to the public the policy positions of all political parties or candidates. However, this sharing must be done in a neutral fashion. For example, a charity cannot use red to outline those who have policies opposed to the charity and green for those who support.
Although your charity is prohibited from directly or indirectly supporting a political party or candidate, your charity’s representatives in their personal capacity can continue to do so. The guidance does provide that a charity cannot use any of its resources, like office space or supplies, to support the individual’s political involvement. Any representative actively engaging in support of a party or candidate is encouraged to indicate that their comments are personal rather than the views of the charity.
It is important to note that other municipal, provincial or federal laws may apply to your use of PPDDAs, like the Canada Elections Act and Lobbying Act. Additionally, several provinces (primarily Ontario) have rules regarding the use of charitable assets.
You can take a look at the current draft policy here.
Have another question that the policy and this article can’t answer? Feel free to give us a call.