Charities are supposed to push for change. The cap on political activity made no sense

Finally.

That has to be what many people employed in the Canadian charitable sector thought earlier this monthwhen Ontario's Superior Court decided a case in favour of a charity called Canada Without Poverty (CWP) and against a government agency that is used to getting its way, the Canada Revenue Agency (CRA).

On July 16, Justice Ed Morgan ruled that the CRA's imperative that charities spend no more than 10 per cent of their time and resources on "political activities" is an unconstitutional infringement on freedom of speech.

He is right. The CRA's definition of "political activities" is absurdly broad: it covers not only partisan endorsements of candidates and parties (which remain forbidden after Justice Morgan's decision) but also includes any pursuits advocating for a change in law or government policy.

You might be thinking: But isn't advocating for change what charities are supposed to do?

It's certainly what most people running charities would like to be doing.

Advocating for policy changes

For example, animal welfare agencies want to convince the public that there should be laws against euthanizing healthy pets. The CRA would consider this a "political activity." CWP wanted to advocate for policy changes that would effectively relieve poverty. The CRA considered this a "political activity" and threatened to strip CWP of its charitable status for engaging in too much of this sort of thing.

What happened to CWP was the stuff of my nightmares for the couple years that I ran a charity.

As the executive director of the organization, it was my duty to make sure the foundation was operating effectively and using our donors' money efficiently. If I had to name the one thing that caused me the most difficulty in living up to this duty, it was the CRA's political activities restriction.

For example, my then-colleagues and I wanted to shout from the rooftops about our concerns about the constitutionality of the then-Conservative-government's security bill, C-51. We were, after all, a group whose mission was to protect the constitutional rights of Canadians.

Instead, we remained fairly quiet about the issue, attempting the impossible dance of complying with the CRA's requirements without compromising our principles or our mission. We wrote a handful of op-eds strongly criticizing the bill, but I declined to have the foundation join a coalition of groups publicly opposing the legislation for the sole reason that I didn't want the CRA to strip us of our charitable status.

It's not a decision I regret. I still believe that we were better able to advance our mission by having charitable status than we would have been if we'd had to become a plain old non-profit. Many, if not most, foundations and individual donors choose to direct their support solely to registered to charities; without that support, it's hard to keep the lights on. But I can't say that it felt very good writing the email to another charity that essentially said, "Sorry, would love to join you in this worthy cause, but can't because of what the government might do to us."

If you're assuming that Justice Morgan's remedy in the CWP case is some moderate half-measure that offers redress to CWP but preserves the CRA's general ability to enforce some manner of its political activities restriction, then you're realistic. Happily, you're also wrong.

Justice Morgan completely nullified the CRA's political activities restriction for everything but explicit partisan activity. So, per Justice Morgan, if you're a charity, you're now free to advocate for law and policy changes to your heart's content, so long as you don't actually support a particular political party or candidate.

Government appeal

Provincial superior courts such as the one that heard the CWP case aren't at the top of the judicial hierarchy. Or even just below the top. That honour goes to the appeals courts.

Provincial superior courts are more or less in the middle of the judicial heap. It's not that they're unimportant or don't decide meaningful cases. But, to give you a sense of things, the Ontario Superior Court isn't just where groups like CWP go to initiate broad Charter challenges. It's also where Joe Schmoe goes to initiate divorce proceedings against his wife.

All of which is to say that Justice Morgan's decision to totally obliterate the CRA's political activities restriction was a bold move. As National Post columnist Colby Cosh put it, the remedy was "a policy redesign implemented with nitroglycerin."

The government will almost certainly appeal. Even though Prime Minister Justin Trudeau campaigned on a promise to ease the political activities restrictions that were making charities' lives miserable during the Harper government, the Liberals haven't exactly been in a rush to follow through with these changes since they've come to power. And the CRA has a remarkably good track record in courts of appeal. (Funny that.)

• CRA loses court challenge to its political-activity audits of charities
• Charities push back against Liberals on political audits

Still, that doesn't mean the Ontario Superior Court's decision is wrong. Far from it.

Imagine the government telling a registered women's charity in 1915 that it couldn't use more than 10 per cent of its resources to encourage the public to support women's suffrage. Or telling an abolitionist charity in 1853 that it was being stripped of its charitable status for doing too much to try get slavery outlawed.

Those scenarios would be absurd, yet they reflect exactly what would happen under the CRA's current political activities restrictions.

Or, perhaps I should say the CRA's pre-July-16 political activities restrictions.

Yes, charities get an advantage from the government (namely the ability to issue donor tax receipts); and no, charities don't have a positive right to this advantage. It would not be unconstitutional for the government to decide to end its policy of making donations to registered charities tax-deductible. But if the government is to provide this advantage at all, then the Constitution demands that it do so evenly and fairly.

That means the CRA can't slap an arbitrary limit (and the 10 per cent limit is nothing if not arbitrary) on non-partisan political activity that the legislation accepts as a charitable activity if done to a miniscule degree.

Practically speaking, the CRA's charitable activities restriction has been, as Cosh put it, "a pretty enormous pain the bum" even for charities that have made exquisitely dedicated efforts to abide by it. Spending can be tracked, but it's hard to calculate what 10 per cent of all resources amounts to in terms of time and action. How much does writing one op-ed count? Giving a quote in an interview? How can that percentage be documented and supported when the CRA comes around for an audit? And how much time is lost trying to figure all that out?

So, kudos to the Ontario Supreme Court for calling out a constitutional breach that has been tying the hands of those trying to change the world for the better. It's a decision that was long, long overdue.

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