Summary
At issue in this case were restrictions derived from English common law on charities’ engagement in non-partisan political activity to secure changes to laws or policies to further their charitable purpose. In Canada these restrictions had been incorporated into Canada’s Income Tax Act (ITA), which stated that registered charities may only engage in non-partisan political activities to seek changes to any laws or policies if such activities were “ancillary and incidental” to their charitable activities, with the latter constituting “substantially all” of the organization’s resources. Based on jurisprudence, the Canada Revenue Agency (CRA) interpreted this to mean that a charity could not devote more than approximately 10% of its resources to any activity that explicitly communicates to the public that a law, policy, or decision of any level of government in Canada or a foreign country should be retained, opposed, or changed.
In 2012 the majority Conservative government in Canada expressed concern that ‘radical’ environmental and human rights organizations registered as charities were using charitable donations to advocate against government policies. The Government allocated $5 million in additional funding to the Canada Revenue Agency (CRA) to audit charities suspected of exceeding the limit on public policy advocacy. Canada Without Poverty (CWP), which aimed at eradicating poverty through civil engagement with low income people to drive policy change, was among the dozens of human rights, environmental and social justice charities audited, and CRA announced its intention to revoke CWP’s charitable status. As noted by the Court in its decision, CWP’s charitable purpose is to relieve poverty, but unlike traditional charities that might provide food to the poor, CWP aims to relieve poverty “by sharing with its constituency ideas rather than nutrition.”
CWP challenged the restrictions on its public policy advocacy for the eradication of poverty as a violation of freedom of expression under section 2(b) of the Canadian Charter of Rights and Freedoms (Charter).
CWP argued that its charitable purpose of relief of poverty in Canada requires changes to law and policy and would fail without the ability to encourage people living in poverty to engage in public policy advocacy. The government countered that charitable status acts effectively as a subsidy, and that while CWP has a right to free expression, there is no positive right to subsidized expression.
The Court found that the CRA’s interpretation and enforcement of the ITA restricted virtually all of CWP’s public communication regarding law and policy reform for its charitable purpose of the relief of poverty. It noted that CWP’s approach to the relief of poverty was supported by international authority, such as the Copenhagen Declaration, recognizing that poverty “is also characterized by a lack of participation in decision-making and in civil, social and cultural life.” The Court also relied on a report by the Minister of National Revenue’s Consultation Panel, which concluded that the political restrictions on charities were outmoded and unduly restrictive and ought to be revoked.
Ultimately, the Court found in favour of CWP. It determined that CWP’s freedom of expression was infringed because the ITA, and the CRA’s interpretation of it, imposed a burden on accessing a state-supplied platform for expression (e.g., charitable status), and that the government had failed to establish a legitimate and substantial objective underlying the restriction. The Court ordered that restriction be eliminated and that the term ‘charitable activities’ in the Act be read as to include non-partisan political activities that are in furtherance of an organization’s charitable purpose.
