If you’re a non-profit charity like the Canadian Space Society, there’s an additional tool you can add to your efforts, the ability to now spend more than 10% of your resources on political activities.
In a recent ruling Justice Edward Morgan of the Ontario Superior Court of Justice said that the Canada Revenue Agency did not have the right to limit charities spending on political activities to 10% and violated the Charter of Rights and Freedoms, thus making their actions unconstitutional. While the ruling was made in an Ontario court, it applies nationally.
The judgement read in part “The interpretation and enforcement by CRA of the ‘substantially all’ requirement in s.149.1(6.2) of the ITA by limiting to 10% a charitable organization’s use of its resources for political activities, as set out in the CRA Policy Statement, violates s. 2(b) of the Charter and is not saved by s. 1. There shall be a Declaration to that effect and an Order that CRA cease interpreting and enforcing s. 149.1(6.2) in that way. ”
The ruling means charities are now free to spend whatever they want on political activities but those activities must still be non-partisan. Partisan activities are still prohibited.
PwC Canada said in a tax note that “this is a helpful decision for charities whose charitable work includes public advocacy. The CRA Charities Directorate may have been taking an unnecessarily narrow view with respect to the extent a charity should be able to use its resources for political activities. This court decision provides more freedom for charities to engage in public advocacy so that they may carry out their charitable mandates.”
Space non-profits which don’t have charitable status might want to consider going through the process now. Aside from the obvious tax deduction benefit charities can provide to donors, they can now engage in greater political activities without fear of the tax man knocking on their door, so long as they remain non-partisan.Canada Without Poverty v A.G