Tax & Accounting September 17, 2018

Government releases proposals regarding political activities of charities

On September 14, 2018, the Department of Finance released draft legislative proposals to amend the Income Tax Act which relate to charitable activities of registered charities. In response to the recent Canada Without Poverty decision, this draft legislation proposes to make amendments to the Act to the effect that:
  • most references to political activities with respect to charities (including the 10% buffer for non-partisan political activities) will be removed;
  • charities will continue to be prohibited from providing direct or indirect support of, or opposition to, a political party or candidate for public office; and
  • it will be clarified that charitable organizations must be constituted and operated exclusively for charitable purposes.
As governed by common law, charities can continue to engage in political activities as long as the activities are incidental and ancillary to the fulfillment of its charitable purposes. If enacted, these proposed changes will apply retroactively to audits and objections that are currently suspended. Stakeholders can submit their written comments to the government by October 13, 2018.
Cameron Mancell
CFP®, Senior Technical Writer at Wolters Kluwer Canada
Cameron Mancell, CFP®, is a Senior Technical Writer at the Wolters Kluwer office in Toronto. Cameron contributes to Canadian Tax Reporter, Preparing Your Income Tax Returns, and Preparing Your Corporate Income Tax Returns, among several others.