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Feds To Appeal Decision That Freed Up Charities For More Political Activities

Canada Without Poverty launched a constitutional challenge in 2016.
The Canada Revenue Agency headquarters in Ottawa is shown on Nov. 4, 2011.
The Canada Revenue Agency headquarters in Ottawa is shown on Nov. 4, 2011.

OTTAWA — The federal government will appeal an Ontario Superior Court decision that opened the door for registered charities to devote significantly more time on non-partisan political activities, HuffPost Canada has learned.

Justice Ed Morgan found in July that efforts by the Canada Revenue Agency to limit the ability of registered charities to speak out on public policy issues ran counter to the right of freedom of expression and could not be justified in a free and democratic society.

CRA had restricted charities from spending more than 10 per cent of their resources on what they called non-partisan political activity.

National Revenue Minister Diane Lebouthillier speaks in the House of Commons on Jan. 28, 2016.
National Revenue Minister Diane Lebouthillier speaks in the House of Commons on Jan. 28, 2016.

But Wednesday, officials in Minister of National Revenue Diane Lebouthillier's office told HuffPost Canada that Ottawa will appeal the decision because the department's lawyers believe the ruling contained "significant errors in the law" that need to be "clarified."

The ruling was a big win for Canada Without Poverty, the applicant in the court case, who launched the constitutional challenge in 2016. The group was one of many organizations audited by the CRA under the previous Conservative government.

After spending years under CRA's audit lens, Canada Without Poverty says it was told it was devoting more than 10 per cent of its time on political activities by recommending changes to federal laws and policies on living wages, homelessness, and poverty alleviation. The group was told its charitable status would be revoked.

Federal Liberals had pledged to stop what it saw as the Tories' politically motivated witch hunt against charities whose goals did not align with their own, including: Equiterre, Environmental Defence Canada Inc., the David Suzuki Foundation, Tides Canada Initiatives Society, Pen Canada, Amnesty International Canada, and United Church of Canada.

During the 2015 election campaign, the Grits pledged to "allow charities to do their work on behalf of Canadians free from political harassment." The party also pledged to "modernize the rules governing the charitable and not-for-profit sectors" including "clarifying the rules governing political activity," with an understanding that charities make an important contribution to public debate and public policy.

"A new legislative framework to strengthen the sector will emerge from this process," the Grits promised.

Three years later, no changes have been made. Finance Minister Bill Morneau, however, is expected to announce a bill will be introduced this fall.

The legislation, the government said, will reflect one of the recommendations an expert panel made in 2017 saying charities should be allowed to fully engage without limitation on non-partisan public policy dialogue and development — as long as it fits in their charitable purpose.

In a draft statement, provided to HuffPost, Morneau is quoted saying that while the appeal will seek clarification on important issues of constitutional and charity law, the case "will not change the policy direction" the government intends to take to remove the 10 per cent threshold on political activities.

Morneau also adds the legislation will apply retroactively, including to the CRA audits currently suspended.

Group 'shocked' to hear Ottawa's decision

Leilani Farha, the executive director of Canada Without Poverty told HuffPost that the Liberals actions are "nothing to celebrate and that the group is "shocked" to learn Ottawa intends to appeal.

The government is basically saying, Farha said, that this isn't an issue of fundamental rights and that it will restore some provisions as a matter of "good public policy," while forcing "a small anti-poverty organization to defend those rights.

"Ultimately, their position is that what happened to Canada Without Poverty under the previous [Conservative] government does not violate the Charter," Farha said. "If they win on appeal, any future government would be free to re-introduce the same legislative provisions and the same thing could happen to the charitable sector all over again," she said.

NDP finance critic Peter Julian called the Liberals' decision to appeal "outrageous" and a "real betrayal to the folks who believed Prime Minister Justin Trudeau when he promised to stop [former prime minister Stephen] Harper's witch hunt against charities."

Julian dismissed the upcoming government legislation as a sideshow, saying the Liberals "are not very credible" when it comes to making commitments and following through.

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