Policing fake news and other updates: CRA finalizes CG-027, Public policy dialogue and development activities by charities

December 17, 2020 | Katrina Kairys

On November 27, 2020, Canada Revenue Agency’s (“CRA”) Charities Directorate announced the release of five new and updated administrative guidances.

Among these guidances is CG-027, Public policy dialogue and development activities by charities (the “Guidance”), which provides CRA’s interpretation of the new provisions in the Income Tax Act (Canada) (the “ITA”) regarding the ability of charities to engage in policy debate and advocacy.  CRA published a draft of the Guidance in January 2019 to elicit feedback from the public and various stakeholders (the “Draft Guidance”).  See our previous article for an overview of the Draft Guidance.

The finalized Guidance, largely similar to the Draft Guidance, resolves some ambiguities and provides additional examples to help inform readers.  That said, there are a few additions to the Guidance that require clarification.

By way of background, the ITA previously distinguished between “political activities” and “charitable activities”, requiring a charity to devote substantially all of its resources to charitable activities.  Generally, CRA interpreted “substantially all” to mean 90% or more.  Therefore, charities could devote no more than 10% of their resources to non-partisan political activities.  This was the longstanding law and policy until the 2018 decision of Canada Without Poverty v. Attorney General of Canada[1] in which the Ontario Superior Court held that the “substantially all” requirement and CRA’s 10% rule were unconstitutional, as they unreasonably limited freedom of expression.

After the decision was released, the federal government amended the ITA to remove the limit on non-partisan political activities.  The definition of “charitable activities” in the ITA now includes “‘public policy dialogue and development activities” (“PPDDAs”) carried on in furtherance of a charitable purpose.  However, charities are still prohibited from directly or indirectly supporting, or opposing a political party or candidate for public office.

In response to the legislative changes and to replace the now-defunct policy statement CPS-022, “Political activities”, CRA has released the Draft Guidance on PPDDAs in 2019.  Pursuant to the Guidance, PPDDAs include activities which seek to influence the law, policies or decisions of government.  In the Guidance, CRA provides a non-exhaustive list of PPDDAs, such as providing information, conducting research, and advocating to change a law.

In the finalized Guidance CRA made a few noteworthy changes to the Draft Guidance as discussed below.

Monitoring of Online Comments

The Draft Guidance required any charity that provides a platform for public comment and discussion (i.e., a website or blog) to monitor the platform, and remove messages that support or oppose a political party or candidate for public office.  CRA has tempered this obligation in the finalized Guidance.  A charity is now expected to remove, if possible, any comments made on its platform that support or oppose a political party or candidate for public office.

Combatting Fake News: Removal of False or Misleading Statements

The Draft Guidance provided that PPDDAs include, among others: (1) providing information which is truthful, accurate, and not misleading; and (2) disseminating opinions on matters related to the charity’s purposes so long as they draw on research and evidence. The Draft Guidance further stated that charities may communicate on social media to express their views, and offer an opportunity for others to express their views regarding public policy.

While these requirements remain unchanged, the finalized Guidance now requires charities to remove any comments made on their website or social media platform that “they should know are false or misleading”, if the platform allows removal.

The requirement that a charity “should know” a comment to be false or misleading is broad and vague, making it difficult for a charity to determine with any degree of certainty whether it “should know” that a particular comment is false.  Further, while combatting disinformation may be a worthy cause, this obligation puts a significant onus on charities that was not contemplated in the Draft Guidance.  Charities should consider whether their websites and social media pages feature a discussion thread or allow commenting.  If a charity does not have the resources to consistently monitor its website and other online pages, it may have to consider disabling such commenting features, if possible.

While this new requirement may surprise some, it comes at a time when governments around the world are cracking down on “fake news” by funding initiatives and instituting laws to counter the spread of disinformation.  Anti-disinformation efforts have been a recent focus of the Canadian government, which has implored social media platforms to combat fake news and has provided funding to projects countering online disinformation.  In November 2020, the federal government tabled the Digital Charter Implementation Act, 2020 which, among others, seeks to protect Canadians against false and misleading information designed to undermine the integrity of elections and democratic institutions.

Books and Records

The Draft Guidance previously noted that a charity must keep records that demonstrate that its primary consideration in carrying on PPDDAs is to further its stated charitable purpose and provide a public benefit.

The finalized Guidance removes the language of “primary consideration” and instead requires that a charity’s books and records demonstrate how its PPDDAs further its charitable purposes and adds some examples of such records:

  • internal communications (for example, email exchanges between board members and staff describing why they are pursuing the PPDDAs)
  • external communications (for example, website material, newsletters, social media posts)
  • motions that an organization’s membership voted on during an annual general meeting

This new language clarifies that a charity must carry on PPDDAs in furtherance of its charitable purposes and not for any other reason.

Meaning of Direct and Indirect Support or Opposition

Charities are prohibited by the ITA from devoting any part of their resources to the direct or indirect support of, or opposition to, any political party or candidate for public office.

The Draft Guidance provided that transferring a charity’s resources (i.e., financial, human, or physical resources) to a political party or candidate, or allowing a political party or candidate to use its resources without compensation would constitute direct support of a political party or candidate.

The finalized Guidance raises this threshold, and now provides that allowing a political party or candidate to use a charity’s resources at below fair market value constitutes such direct support.

Oddly, the Guidance also provides that allowing a political party to use a charity’s premises, at or below fair market value constitutes direct support.  It is unclear what CRA means by this – whether a charity can permit a political party or candidate to use its resources so long as it charges fair market value, or whether the charity cannot use its resources in such a manner, even if it were to charge fair market value.  An alternative although unlikely interpretation is that CRA intended to place a further restriction on the use of a charity’s premises that does not apply to the charity’s other resources.  Clarification from CRA on this point is warranted.

Supporting or Opposing a Political Party or Candidate

The Draft Guidance provided that a charity could support or oppose a “potential candidate” who was not officially a candidate for office as per election legislation or who had not filed nomination papers.  This distinction, based on the technical requirement of filing for nomination, made little sense.  The finalized Guidance clarifies that a charity cannot devote its resources to supporting or opposing the election of any individual, even if they are not a candidate pursuant to election legislation.

In addition, the Draft Guidance provided that charities may call on supporters or the general public to contact politicians to express support of or opposition to a certain law, policy or government decision.  The finalized Guidance clarifies that charities may call on the public to contact not only elected officials, but public officials, political parties, and candidates as well.

PPDDAs and Fundraising

The Draft Guidance stated that the rules regarding PPDDAs do not typically apply to other types of activities carried out by charities, such as fundraising.  This statement is now absent from the finalized Guidance. It is not clear whether there was any significance behind CRA removing this statement from the finalized Guidance. PPDDAs are activities that a charity carries on as part of its charitable activities. Charitable activities do not include other activities such as fundraising or administrative activities. Likely the reason CRA removed this sentence was because they were concerned that charities might be confused and think they could pursue political activities that were not part of their charitable activities.

Charities are well-advised to review their policies on political advocacy to ensure compliance with the new Guidance.  Miller Thomson’s Social Impact Group would be pleased to assist your organization in reviewing and revising its policies with respect to public policy dialogue and development activities.


[1] 2018 ONSC 4147

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