In Canada, registered charities can only carry on limited political activities. The Income Tax Act provides that a charity may devote a part of its resources to non-partisan political activities that are ancillary and incidental to its charitable activities. A charity’s political activities cannot include the direct or indirect support of or opposition to any political party or candidate for public office.
Thus, a registered charity’s political activities must be connected to the charity’s purpose and utilize less than 10% of the charity’s financial, physical and human resources. This allows for limited lobbying activities on the part of registered charities.
There is lobbying registration legislation federally and in many provinces. A charity that engages in lobbying a provincial or federal government should consider if it has an obligation to file as a lobbyist with that government body.
Federally, under the Lobbying Act, a corporation is required to file lobbying returns if the corporation employs one or more individuals whose duties include communicating with public office holders on behalf of the employer (or on behalf of any subsidiary or parent corporation of the employer), in respect of:
- the development of any legislative proposal by the Government of Canada or by a member of the Senate or the House of Commons;
- the introduction of any Bill or resolution in either House of Parliament or the passage, defeat or amendment of any Bill or resolution that is before either House of Parliament;
- the making or amendment of any regulation;
- the development or amendment of any policy or program of the Government of Canada;
- the awarding of any grant, contribution or other financial benefit by or on behalf of Her Majesty in right of Canada;
- the awarding of any contract by or on behalf of Her Majesty in right of Canada; or arranging a meeting between a public office holder and any other person.
These activities also include appeals made by a charity to persuade the public to communicate directly with a public office holder in an attempt to persuade the public office holder to endorse a particular opinion.
A public officer includes any officer or employee of the government of Canada. This term is quite broad and includes officers or employees of the Senate, the House of Commons, a federal board, commission or other tribunal, Canadian Armed Forces, and Royal Canadian Mounted Police. It also includes a person who is appointed to any office or body by or with the approval of the Governor in Council or a minister of the Crown, other than a judge or the lieutenant governor of a province.
A corporation must register if these lobbying activities constitute a significant part (at least 20%) of the duties of one employee or would constitute a significant part of the duties of one employee if they were performed by one employee.
The Lobbying Act defines employee as including an officer who is compensated for the performance of their duties. Thus, the Lobbying Act does not require the registration of duties performed by volunteers.
Failure to file a return is an offence and could result in substantial fines and prohibition against the Charity from communicating with public officials for a period of up to two years.
Charities engaged in politics should ensure their activities are within the scope allowed by the Income Tax Act and that the charity is in compliance with the relevant lobbying legislation. This article has provided a brief overview of some of the federal lobbying legislation. However, lobbying legislation in the province does vary.
The lawyers in Miller Thomson LLP’s Charity and Not-For-Profit Group can assist charities to understand and comply with the rules on political activities.