The much anticipated changes to the laws that regulate the political activities of Canadian registered charities have now been made. On December 13, 2018, Bill C-86, Budget Implementation Act, 2018, No. 2, which contained amendments to the political activity rules under the Income Tax Act (Canada) (ITA), received royal assent (Amendments). As a result of the Amendments, charities can now engage in unlimited public policy dialogue and development activities (Public Policy Activities), so long as these activities further their charitable purpose(s) and do not involve the direct or indirect support of, or opposition to, any political party or candidate for public office.


Historically, there has been a great deal of confusion and uncertainty about the regulation of the political activities of registered charities in Canada, which was the impetus for the Amendments. The following timeline sets out some of the key events in the development and evolution of the Amendments:

  • In 2012, the Canada Revenue Agency (CRA) began the Political Activities Audit Program (Audit Program) to audit the political activities of various registered charities. The Audit Program proved to be highly politicized and controversial, with many observing that it created a “chill” on the advocacy activities of registered charities, in part because the rules on political activities were unclear.
  • In 2016, the Minister of National Revenue announced that the Audit Program would be wound down, initiated a consultation process with stakeholders to clarify the rules on political activities, and created the Consultation Panel on the Political Activities of Charities (Panel) to provide recommendations based on these consultations.
  • In May 2017, the Panel published its report with four key recommendations for administrative and legislative changes to the rules on the political activities of registered charities, a copy of which is available online. Based on the Panel’s report, all audits and objections from the Audit Program were suspended shortly thereafter.
  • In Budget 2018, the Federal government expressed its commitment to clarify the rules on the political activities of registered charities, and to respond to the Panel’s report.
  • In July 2018, the Ontario Superior Court of Justice held in Canada Without Poverty v. AG Canada that certain aspects of the regulation of the political activities of charities infringed upon the right to free expression under the Canadian Charter of Rights and Freedoms. This decision (had it stood) would have allowed charities to engage in an unlimited amount of non-partisan political activities that fell within their charitable purposes.
  • In August 2018, the Federal government announced that it would appeal the decision in Canada Without Poverty and clarify the political activity rules by implementing recommendation No. 3 of the Panel, namely, to amend the ITA by removing any reference to non-partisan political activities to allow charities to engage, without limitation, in non-partisan Public Policy Activities that are subordinate to and further their purposes. Information about this announcement can be found in our August article.
  • In September 14, 2018, the Federal government released proposed amendments to the ITA, which was followed by a public consultation process (September Amendments). The September Amendments were discussed in our September article.
  • On September 28, 2018, the Ontario Court of Appeal granted an order extending the time to perfect the appeal in Canada Without Poverty in light of the September Amendments. The extension granted under this order will expire in the new year.
  • In early October 2018, the CRA published a draft guidance, Charities and public policy advocacy (Draft Guidance), describing how the CRA would interpret, administer and enforce the September Amendments, which you can read about in our October article.
  • In late October 2018, the Federal government announced new proposed amendments to the ITA to replace the September Amendments (New Proposed Amendments) as a result of the public consultation process, which were published with explanatory notes (Explanatory Notes). The Draft Guidance was no longer applicable since it was based on the September Amendments so the CRA removed it from its website. These developments were addressed in our November article.
  • On December 13, 2018, the Amendments were passed (in the same form as the New Proposed Amendments). It is too soon to tell what impact, if any, the Amendments will have on the Canada Without Poverty appeal.

Summary of New Rules

Based on the Amendments and the Explanatory Notes, the new rules regarding the political activities of Canadian registered charities (which are now called Public Policy Activities) can be summarized as follows:

  • Charities must still be created and operated exclusively for charitable purposes.
  • Charities can now engage in unlimited non-partisan Public Policy Activities, provided such activities further their “stated” charitable purpose(s). According to the Explanatory Notes, Public Policy Activities “generally involve seeking to influence the laws, policies or decisions of a government, whether in Canada or a foreign country.” We presume the reference to “stated” charitable purpose(s) means the purpose(s) contained in the document that created a charity, as such purpose(s) may be amended.
  • Charities still cannot engage in any partisan political activities (i.e., “the direct or indirect support of, or opposition to, any political party or candidate for public office”).

The Amendments apply retroactively to charities that were registered before September 14, 2018 (some becoming effective as far back as January 1, 2008 and others as of June 29, 2012), meaning that they supersede the rules upon which the previous and suspended CRA audits and objections from the Audit Program were based. Otherwise, for charities registered on or after September 14, 2018, the Amendments are deemed to come into force on that date.

The CRA has not yet released new guidance to accompany the Amendments, however, it previously indicated that it plans to do so before the end of 2018 (New Guidance). The New Guidance should provide clarification on important issues such as how Public Policy Activities can be linked and subordinate to a charity’s purposes (as opposed to being a purpose, which remains prohibited) and what constitutes “indirect” partisan political activity. Until the New Guidance is released, charities should continue to exercise caution when engaging in Public Policy Activities.

We will be watching closely for the New Guidance and following the progress of the Canada Without Poverty appeal. We would be happy to answer questions that your charity may have about the new rules on Public Policy Activities and the implications that they could have for your organization.