Canada Revenue Agency's (CRA) very public and aggressive program of auditing the alleged political activities of charities is being conducted in spite of the fact that the law of charity upon which CRA purports to rely is moving in the opposite direction.
In a recent piece on "advocacy chill" in Canada, I pointed out that on July 9 the Charity Tribunal in England came down with a legal decision which held that "promoting the sound administration of the law" was a charitable purpose under the common law. Most environmental and other charities currently under audit by CRA are simply "promoting the sound administration of the law" rather than engaging in "political activities."
Yesterday the Supreme Court of New Zealand handed down its long awaited decision on the application of Greenpeace of New Zealand to become a registered charity. The highest court in New Zealand spent more than a year writing a tightly reasoned 54-page decision holding that a political purpose can be a charitable purpose. The court took on all the gobbledygook in CRA's "Policy Statement on Political Activities" on "incidental and ancillary" activities and refused to follow the jurisprudence upon which it is based. After doing a "political activities" audit, CRA revoked the charitable registration of Greenpeace Canada Charitable Foundation in 1998.
The Supreme Court of New Zealand appreciates that if charity law is to be relevant in the 21st-century and serve the needs of a modern society, it must both change and bring change. It rejected the position that highly controversial views cannot be charitable, saying: "Such thinking would effectively exclude much promotion of change while favouring charitable status on the basis of majoritarian assessment and the status quo. Just as unpopularity of causes otherwise charitable should not affect their charitable status, we do not think that lack of controversy could be determinative."
There is no force more determinative of charity law in Canada than the status quo and our government has a strong proclivity for "majoritarian assessment."
The highest court in New Zealand followed the path of the highest court in Australia which in 2010 allowed political purposes in the Aid/Watch appeal when it rejected the cases relied upon by CRA. Further, the majority judgment concluded that "the generation by lawful means of public debate ... itself is a purpose beneficial to the community within the fourth head in Pemsel."
I was the lawyer who in 2011 tried to convince the Federal Court of Appeal to follow the Aid/Watch reasoning in Canada. While my client was not registered, the court clearly opened the door to accepting the Aid/Watch decision when it stated: "the public debate carried out by a charity must itself be targeted to a charitable purpose, in that case the relief of poverty in the developing world."
Preserving and protecting the environment is clearly a charitable purpose or CRA would not have registered the charities under audit. Consequently, any non-partisan debate about the environment meets the Federal Court of Appeal's test that there be a "focus on public debate concerning a genuinely charitable issue." Inducing an advocacy chill to frustrate open and even highly controversial debate is contrary to the law of charity. I have taken this position long before the current spate of press articles on CRA's intimidating political activities audits.
CRA is cherry-picking its jurisprudence to justify its program of political activities audits. It is ignoring these recent decisions from Australia, England, New Zealand and even Canada's Federal Court of Appeal. Disagreeing with the government on environmental issues is not necessarily a partisan activity.
I am personally less concerned about final decision on specific environmental issues than that Canadians engage in a robust and informed debate on the issues. Charities are capable of campaigning on disinformation just as are corporations and governments. However, if political activities audits are to be governed by the rule of law, then CRA needs to begin acknowledging the extent to which the courts are changing the law rather than exclusively quoting English decisions of past centuries. CRA needs to go back to policing the provisions of the Income Tax Act and not public debates on policy.
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