Government Recognizes the Valuable Role Charities Play in Building a Strong and Caring Canada

October 31, 2018 – Ottawa, Ontario – Department of Finance Canada

Charities play an important role in bringing people together and building strong communities—as well as helping to inform public debate and the creation of public policy.

On Monday, the Government introduced proposed legislation as part of the Budget Implementation Act, 2018, No. 2 to change the rules for charities so that they have the full ability to pursue their charitable purposes by engaging in non-partisan political activities and the development of public policy. Specifically, the legislation proposes to:

• Remove the Income Tax Act provisions relating to the non-partisan political activities of charities, including the provision that effectively limits charities to devoting only 10 per cent of their resources to non-partisan political activities;
• Maintain the prohibition on charities providing direct or indirect support to, or opposition to, a political party or candidate for public office; and
• Clarify that charitable organizations, like charitable foundations, must be constituted and operated for exclusively charitable purposes.

These changes are consistent with Recommendation no. 3 of the Report of the Consultation Panel on the Political Activities of Charities. Once adopted by Parliament, the proposed legislation will apply retroactively.

The proposed legislation follows a Department of Finance Canada consultation launched in September, and takes into account feedback received from stakeholders. The legislative change also reflects the Government's commitment to clarify the rules that govern the participation of charities in political activities as stated in the Minister of National Revenue's and the Minister of Finance's mandate letters.