The prime minister’s latest mandate letter to the minister of finance directed her to bring in “amendments to the Income Tax Act to make anti-abortion organizations that provide dishonest counselling to pregnant women about their rights and options ineligible for charitable status.” The Liberal government’s platform cited crisis pregnancy centres as part of a non-exhaustive list of implicated organizations.
This policy targets a specific set of charities with views that differ from the government’s position on a particular issue. It is a threat to freedom of expression in a pluralist society and sets a troubling precedent for the politicization of charitable status in Canada.
Charities in Canada may operate for the following purposes: the relief of poverty, the advancement of education, the advancement of religion, or other purposes that benefit the community. The government has limited capacity to meet all the needs of communities across the country. Given this limitation, private citizens organize and engage in a range of charitable activities to serve their fellow Canadians. One of the primary benefits of becoming a registered charity is the ability to provide individual donors with charitable tax credits, thus incentivizing more giving. Fundamental to this system is that charities — even and especially those with different views from the government — are equally eligible for charitable status.
The Constitution Act, 1867 gives exclusive power to the provinces for the “establishment, maintenance, and management of…charities.” However, administration of charitable registration is governed by the federal Income Tax Act. Both federal and provincial/territorial governments administer charitable tax credits.
Further, the entire system is underpinned by the common law precedent of what qualifies as a charitable purpose. No specific details of the government’s proposal have been shared publicly. However, given these overlapping constitutional, legislative, jurisdictional and common law influences, we are left to wonder if the federal government has the authority to legislatively disestablish an entire subgroup of charities in the first place.
To be clear, dishonest practices by any charity are unquestionably wrong and should be addressed. While the government has not defined what dishonesty would legally entail, the Income Tax Act already prohibits dishonesty in various forms. The Canada Revenue Agency’s stated approach to non-compliance is usually progressive, seeking to educate first and deregister as a last resort. If dishonesty were a genuine concern, the government’s policy would address it through education and across the entire charitable sector. It does not. This decision demonstrates the punitive and politicized nature of this policy.
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There are 86,000 registered charities operating across the county. Together they make up 8.5 per cent of Canada’s GDP and employ 1.5 million workers (10 per cent of the national workforce). Their work covers different areas, from arts and culture, environmental issues, social services and religious or educational causes. Charities are supported by millions of Canadians each year. In 2019 alone, a total of $10.3 billion in charitable donations was claimed on tax returns.
It is unquestionable that the views of charities and donors in such a large sector are varied. That is the logic of the system. Neutrality in charitable registration allows charities to express a broad range of views. Donors are then able to support the causes they believe in and receive the same tax benefits as their fellow citizens.
A 2019 Senate review of the charitable sector examined the possibility of updating the legal definition of a charity through legislation. One witness noted that entrenching the definition of a charity in legislation “opens the matter up to vagaries of politics.” The Liberal government’s current approach shows the validity of this concern. Subjecting charitable status to the whims of politics threatens the entire charitable sector because some organizations may be eligible today but ineligible tomorrow.
This approach effectively excludes both charities and citizens from certain public benefits because they disagree with the government. It also sets a troubling precedent for future governments that may further legislate against causes they disagree with.
Free from political interference
Ironically, this policy contradicts the government’s own views about neutrality in charitable regulation. In 2012, the former Conservative government engaged in targeted audits of certain, primarily environmental, charities. These audits were criticized for targeting charities that were ideologically opposed to the government.
After the 2015 election, the Liberal minister of national revenue “committed to working in collaboration with charities to maintain a fair system that respects and encourages their essential contribution.”
Research has also been done on potentially biased audits of Muslim-led charities. In response to this issue, the same minister has been asked to assist the taxpayers’ ombudsperson in ensuring that charities are not subjected to bias.
In a democracy, the fairness and neutrality of government policies should be a given. As we emerge from a health and economic crisis that has racked the nation, vulnerable Canadians need more support than ever. Charities across the country exist to provide this support. They should not face the threat of ineligibility because of government’s political bias. Consistent with the values of a free and democratic society, Canada’s charitable registration system must remain free from political interference.