Topics: News, What's New from the Charities Directorate of CRA, Canadian Charity Law, Ethics and Canadian Charities, Avoiding 'Charity' Scams
Diane Lebouthillier, the new Minister of National Revenue has announced that the 2012 Conservative government initiative to audit more registered charities on the issue of political activities will be wound down. There is a lot in the release and I will be writing more about it shortly.
Here is the full press release from the Minister of National Revenue:
Minister Lebouthillier announces winding down of the political activities audit program for charities
January 20, 2016 Ottawa, Ontario Canada Revenue Agency
The Honourable Diane Lebouthillier, P.C., M.P., Minister of National Revenue, today announced the winding down of the review by the Canada Revenue Agency (CRA) of registered charities’ political activities.
Our government recognizes the critical role charities play in our society and their valuable contribution to public policy and public debate on behalf of all Canadians. To help them continue this important work, charities must be assured they are operating in a regulatory environment that respects and encourages this contribution.
The results of the political activities audit program have shown substantial compliance with the rules regarding charities’ involvement in political activities. In light of these outcomes, the political activities program will be concluded once the remaining audits have been finalized.
Our Government’s commitment to openness and transparency includes providing more information on the regulation of charities to the public and the charitable sector in a timely manner and in ensuring the engagement of the sector. In order to achieve this, Minister Lebouthillier also announced that the CRA will publish an annual report to provide the public with more information about its activities and its contribution to an effective regulatory framework for registered charities.
Minister Lebouthillier is committed to engaging with key stakeholders and has asked CRA's Charities Directorate to find ways to further clarify the rules governing a registered charity’s involvement in political activities. Details of the consultations will be made public as they become available.
To date, of the 30 completed political activities audits, only 5 resulted in a determination to revoke registration, all of which were primarily based on factors that were beyond their involvement in political activities. Any charity that has had its registration revoked always has the right to appeal the revocation.
There are 24 more audits already underway and scheduled for completion. These audits will continue so that the CRA can address any serious deficiencies, consistent with the approach used in the regular charities audit program.
The six remaining charities that were selected for audit will not be reviewed under the political activities audit program.
The CRA registers charities under the Income Tax Act and monitors the sector to ensure registered charities continue to comply with the Act’s requirements.
Charitable registration comes with privileges, such as issuing official donation receipts, and obligations, such as complying with the Act’s requirements related to their involvement in political activities. The Act permits charities to carry out a limited amount of non-partisan political activities in support of their charitable purposes.
The rules regarding the political activities of charities have been in effect since 1985, and are outlined in the CRA’s Policy Statement CPS-022, Political Activities, which was published in 2003.
Of the approximately 86,000 charities in Canada, about 500 report carrying out political activities on their annual information returns to the CRA.
As part of its regular audit program, the CRA audits approximately 800 to 900 charities every year.
“The results of the political activities audit program have shown that the charities audited have been substantially compliant with the rules regarding their involvement in political activities. In light of these outcomes, the program will be concluded.”
“The CRA conducts both educational efforts to help charities understand the rules of registration and audit activities to confirm compliance with those rules. This role is critical in ensuring Canadians’ charitable donations are used for charitable purposes.”
“The independence of the Charity Directorate's oversight role for charities is a fundamental principle that must be protected. The Minister of National Revenue does not and will not play a role in the selection of charity audits or in the decisions relating to the outcomes of those audits.”
“Our Government’s commitment to openness and transparency includes providing more information on the regulation of charities to the public and the charitable sector in a timely manner and in ensuring the engagement of the sector.”
- The Honourable Diane Lebouthillier, P.C., M.P., Minister of National Revenue
Policy Statement CPS-022, Political Activities (CRA)
Resources for charities about political activities (CRA)
Video Series: Charities and their participation in political activities (CRA)
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Here is the press release: Minister Lebouthillier announces winding down of the political activities audit program for charities
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Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.