Upholding Human Rights
by Arthur Drache

       The CRA has now issued its (presumably) final word on the subject of whether organizations which is involved in upholding human rights can be registered as charitable[1]. The answer is an unqualified "maybe" which is perhaps better than what we have been living with up to now but which falls a long-way short of what most organizations which work in the area were hoping for.

       The opening paragraphs of the guidance sum up the issue and also the problem.

       "The Canada Revenue Agency (CRA) Charities Directorate recognizes that activities that uphold human rights can further charitable purposes under all four heads of charity (relief of poverty, advancement of education, advancement of religion, and other purposes beneficial to the community that are considered charitable at law).

       The Charities Directorate also recognizes that upholding human rights can be a charitable purpose in and of itself under the fourth head (other purposes beneficial to the community that are considered charitable at law).

       However, organizations with one or more political purposes, as well as those with political activities that exceed the legal restrictions, are not eligible for charitable registration. Specifically, partisan political activities are completely prohibited and only limited non-partisan political activities (including those that attempt to engage the public in political action or to sway public opinion on social issues) that further a charity's charitable purposes, and are ancillary and incidental to those purposes, are allowed. See Policy Statement CPS-022, Political Activities."

       The fundamental problem in real terms is that almost any effective action in this area has an element of what the CRA (and our courts) believe is political activity. So when push comes to shove, the leeway offered to charities working in this area is effectively limited to situations where they are working within the "10% of resources" framework, a very narrow level of activity.

        The guidance lays out the issue quite baldly in paragraph 7.1.2

        "Although political purposes are never charitable, registered charities can participate in, or conduct, some types of political activities within certain limits, as long as those activities do not support or denounce any political party or candidate. Partisan political activities are never permitted.

        In general, a registered charity can be involved in non-partisan political activities under the following conditions:

        ·       The charity must devote substantially all of its resources to its charitable activities; that is, no more than 10% of a charity's resources can be used for political activities (up to 20% for smaller charities as outlined in section 9 of Policy Statement CPS-022).

        ·        The political activities must be connected and subordinate to the charity's purposes.

For example, a campaign to pressure a government of a particular country to adopt particular human rights legislation or policies could be an allowable political activity if it:

        ·       Uses no more than the allowable limit of the charity's resources under the Income Tax Act;

        ·       Relates to and supports the charity's purpose(s) and represents a reasonable way to achieve them (connected to);  

        ·       Is subservient to the charity's dominant charitable purpose or is a minor focus of the charity (subordinate to); and

        ·      Does not express support for or criticism of any political party or candidate (non-partisan).  

        In addition to the restrictions in the Income Tax Act, it is important to note that expenses for political activities do not count toward a charity's disbursement quota. "

        As we suggested at the start, given the general antipathy the CRA has had towards organizations which try to protect human rights [2] we should be grateful that anything has come out of this exercise. But the guidance is the usual cautious document which we expect from the Charities Directorate, one which reflect neither courage, vision or imagination much less a sense of sympathy to the work these organizations undertake.

        It reflect pretty much what is wrong with those who make and interpret charity law in Canada timidity and a lack of vision or empathy for the work of the sector.

[1] http://www.cra-arc.gc.ca/tx/chrts/plcy/cgd/hmn-rghts-eng.html

[2] See for example Action by Christians for the Abolition of Torture (ACAT) v. The Queen & al., 2002 FCA 499.