Jan 2019 Charity & NFP Law Update
Committee Mandate Extended until September 30, 2019
During its November 29, 2018 sitting, the Senate approved the motion by members of the Special Senate Committee on the Charitable Sector (the “Committee”) to extend the period to study and report on the impact of federal and provincial laws and policies governing the charitable and not-for-profit sector from the previously set deadline of December 31, 2018 until September 30, 2019.
In support of the motion, Committee member Honourable Senator Ratna Omidvar explained that the Committee requires an extension to ensure that its final recommendations “reflect the scope, depth and complexity” of the Committee’s work. In that regard, the Committee requires additional time to conclude an online survey sent to hundreds of charities and not-for-profits across Canada, including processing the results of the survey which need to be tabulated, analyzed and synthesized into the Committee’s final report. Senator Omidvar also noted that the extension would allow the Committee to review Bill C-86 which includes proposed amendments to the ITA that alter the extent to which registered charities can engage in what were formerly called non-partisan political activities, but under Bill C-86 will be referred to as “public policy dialogue and development activities.” Senator Omidvar also noted that other areas requiring further work by the Committee include issues relating to the creation of a permanent advisory committee on the charitable sector within the CRA, an investment in new social finance funds, both of which were referred to in the 2018 Fall Economic Statement and discussed in Charity & NFP Law Bulletin No. 435, as well as a new provision to allow non-profit journalism and journalistic organizations to issue official donation receipts.
Committee Meetings of December 2018
In December 2018, the Committee continued its study on the charitable and not-for-profit sector with two meetings on December 3, 2018 and December 10, 2018, which focused on “advocacy and political activity as it relates to charities and non-profit organizations.” Minutes of each meeting are available on the Committee website.
The December 3 meeting included comments urging the Committee to support the passage of Bill C-86 to affirm the importance of allowing charities to engage in public policy dialogue without fear of loss of charitable status in pursuit of charitable purposes, issues relating to the Canada Without Poverty decision, and the changes subsequently proposed by Bill C-86, which has now received Royal Assent. The general consensus from the witnesses was that the approval of Bill C-86 was a positive development.
The December 10 meeting covered issues relating to the importance of permitting lobbying and communication with elected officials without restriction where the subject matter relates to the charity’s charitable purpose, a proposal to permit charities to carry on any type of revenue generation so long as the proceeds are used to further its charitable purpose. It was also suggested that the requirement that charities must carry out their “own activities” be removed given the enormous administrative burden that arises to draft complex agreements to meet this requirement even though there is little evidence of any harm being prevented, and discussion on whether the disbursement quota could be set by regulation rather than in the ITA to provide flexibility to charities subject to market conditions and interest rates. The Committee also discussed how the sector is changing with the use of social media, crowdfunding and social enterprise, as well as certain modern legislation, such as Saskatchewan’s legislation on informal public appeals, which governed issues relating to the funds raised to assist the victims of the Humboldt Broncos accident, but which legislation is not available in any other provinces.