As the charitable sector awaits an announcement from the federal government on when and how it will be responding to the Report to the Minister of National Revenue of the Consultation Panel on the Political Activities of Charities (the "Panel"), a couple of lower profile regulatory developments have come to the fore.
Consultation Panel on the Political Activities of Charities
Many readers may recall that the Panel was struck in the wake of an initiative by the previous government to more closely scrutinize and regulate registered charities' political activities and a commitment in the 2015 Liberal election platform to clarify the rules in this area.
While there is widespread agreement in the charitable sector on the need to address the political activities question, there is also significant support for more sweeping change. The need for such change was also reflected in the Liberal platform, which referenced modernization of charitable and not-for-profit sector regulation. This reference was picked up by the Panel in one of their recommendations calling for an update of the legislative framework governing the charitable sector. Still, the scope of what the government will do when it acts on this is uncertain.
In the meantime, there have been announcements of more routine developments in the Canada Revenue Agency's (the "CRA") administration of current federal charity law in the areas of Ineligible Individuals and disaster relief.
In 2011, Ineligible Individual provisions were added to the Income Tax Act registered charity legislation in an effort to prevent people with problematic tax abuse or criminal histories from being on the governance bodies or in senior leadership positions of charitable sector organizations. The legislation permits revocation and other sanctions against a charity or denial of registration of an applicant where such an individual is in a governance or key leadership role.
The measures were quite sweeping, and potentially caught a wide group of people beyond those who posed a genuine risk to the organizations with whom they were affiliated or more broadly to the reputation of the sector and integrity of the regulatory regime. In its guidance on how it would be applying these provisions, however, the CRA indicated that the statutory language provided it with discretion and that it would allow organizations to take steps to dispute the designation of a particular person, or remove or manage the risk stemming...