Constitutionalizing the Registered Charity Regime: Reflections on Canada Without Poverty
Author | Kathryn Chan |
Position | Associate Professor, University of Victoria Faculty of Law |
Pages | 151-190 |
Constitutionalizing the Registered
Charity Regime: Reflections on
Canada Without Poverty
Kathryn Chan∗
In Canada Without Poverty v Canada (AG), the Ontario Superior Court of Justice
struck down provisions of the federal Income Tax Act that limited the political
activities of charitable organizations, on the ground that the provisions violated the
freedom of expression of the registered charity before the court. is paper addresses
the decision’s complex legacy, reflecting on the promise and the perils of charity law’s
increasing encounters with public law. I address some of the difficult questions raised
by the decision: (1) What types of associations are rights-holders under the Canadian
Charter of Rights and Freedoms? (2) What are the constitutional limitations on the
government’s ability to set the outer bounds of the registered charity regime? (3) What
is the rationale for limiting the political advocacy of charities? While Canada Without
Pove rty has generated significant improvements to the registered charity regime, I
argue, the Ontario Superior Court of Justice missed an important opportunity to draw
constitutional law and charity law into closer conversation.
∗ D. Phil (law)(Oxon.); Associate Professor, University of Victoria Faculty
of Law. I thank Morgane Evans-Voigt and Benjamin Krymalowski for
their excellent research assistance. I thank Jennifer Beard, Samuel Singer,
Richard Moon, Gillian Calder, Howard Kislowicz, Kate Glover Berger,
Wade Wright and Peter Broder for their generous and insightful feedback.
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Chan, Constitutionalizing the Registered Charity Regime
I. I
II. T C Canada Without Poverty v Canada (aG)
A. Consequences and Conditions of Registered Charity Status
B. e Political Advocacy Rules
III. T D Canada Without Poverty v Canada (aG)
A. Facts and Issues
B. e Decision
IV. R Canada Without Poverty v Canada (aG)
A. Reflection One: e Registered Charity as Rights Holder
B. Reflection Two: e “Megaphone v Muzzle” Debate
1. e Positive Rights/Negative Rights Distinction
2. Did CWP Make a Positive or a Negative Freedom of
Expression Claim?
3. e Strength and Scope of CWP’s Positive Rights Claim
C. Reflection ree: Justifying the Registered Charity Regime
V. C: T P P C L’ E
P L
I. Introduction
In the summer of 2018, the longstanding rules governing the political
activities of registered charities came to an abrupt and rather
undignified end. In Canada Without Poverty v Canada (AG),1 Morgan J
of the Ontario Superior Court of Justice held that paragraphs 149.1(6.2)
(a) and (b) of the Income Tax Act2 (“ITA”), which functioned to prohibit
charitable organizations from devoting more than 10% of their resources
to non-partisan political activities, unjustifiably violated the freedom of
expression of the anti-poverty organization before the court. “What is
political?”, mused Morgan J in the opening paragraph of his judgment,
briefly considering the answers of political philosophers before declaring
the restrictive provisions of no force and effect.
e Canadian charitable sector reacted swiftly and positively to the
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decision.3 e Government of Canada also responded swiftly, pledging
to appeal the decision but also to amend the ITA in the manner the
decision envisaged.4 By December 2018, Parliament had enacted
those amendments. Registered charities in Canada may now carry out
unlimited public policy dialogue and development activities that further
a charitable purpose.5
e Attorney General of Canada ultimately chose not to appeal
Canada Without Poverty.6 e decision thus stands, having produced
a happier charitable sector but also considerable legal uncertainty. e
statutory amendments to which Canada Without Poverty gave rise have
improved the registered charity regime in a number of respects. ey have
increased the regime’s coherence by aligning its definitional provisions
more closely with the common law tradition upon which they are based.7
e amendments have also reduced the chilling fear that many registered
charities had of falling on the wrong side of the ITA’s murky “charity-
politics” divide, freeing up charitable resources and encouraging charities’
participation in the development of public policy.8 However, the legacy
of Canada Without Poverty may be more complex than this happy news
suggests. e decision imposes significant constitutional limitations
on government in its design of the registered charity regime. Certain
elements of Morgan J’s reasoning may have far-reaching implications,
and are worthy of further reflection. Certain elements of Morgan J’s
decision may have far-reaching implications and are worthy of further
reflection.
I begin this comment by examining the legal context within which
Canada Without Poverty arose. I explain the difference between not-for-
profit status, charitable status and registered charity status, and outline
the traditional limitations on the political activities of registered charities
in Canada (Part II). I then summarize Canada Without Poverty v Canada
(AG) (Part II). I reflect on several elements of the decision, including the
characterization of Canada Without Poverty (“CWP”) as a constitutional
rights-holder, the treatment of its freedom of expression claim, and the
rejection of the government’s attempts to justify the ITA’s limits on the
political activities of registered charities (Part III). Finally, I consider the
promise and perils of charity law’s increasing encounters with public law.
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