Judge quashes politically motivated CRA audits

"The courts have accomplished something the Liberal government promised but didn't deliver, ending the politically motivated Harper-era audits on progressive charities." — Larry Brown, NUPGE President   

Ottawa (19 July 2018) — In a historic ruling, vindicating small social justice organization, in Ottawa,Canada Without Poverty, Justice Edward Morgan of the Ontario Superior Court of Justice ruled that the Income Tax Act infringes on the constitutional right to free expression. This judgement kills the rule limiting Canadian charities political activity to 10 per cent of their resources. If there is no government appeal of this ruling and reversal at a higher court, this will effectively end the Harper government's program using the Canada Revenue Agency (CRA) to go after progressive environmental and social-justice charities in Canada.

Liberal inaction leaves the courts to protect charities

During the 2015 federal election, the Liberals promised an end to the political harassment of charities by clarifying the rules around what constitutes 'political activity.' While the newly elected Liberal government did not continue the program, they also did not end the audits that were underway. This left groups like Canada Without Poverty still needing to defend themselves against the CRA and under threat of losing their charitable status due to political activity above the 10 per cent threshold.

Justice Morgan ruled that the 10 per cent rule was arbitrary and an unjustified infringement of freedom of expression guaranteed in the Canadian Charter of Rights and Freedoms. He also recognized that the political activity these groups engage in is required to fulfill their stated charitable purpose. Losing their charitable status would severely harm charities because donors would no longer receive tax receipts for deductions.

An important ruling that opens up more room for charities to fulfill their mandates

The fight to retain their charitable status in the face of the audits of their political activity was really a fight for the very existence of the many small charitable organizations that play an important role in Canadian society and political discourse, on all sides of the political spectrum. These groups would still be barred from partisan political activities, but Justice Morgan's ruling means that charities are now free to take action to fulfill their mandates, without fear of being dragged in front of the CRA auditors.

Seizing the opportunity to support the Charter and freedom of expression

"This is an important ruling that finally frees these organizations to fully play the role that they were created to play," said Larry Brown, President of the National Union of Public and General Employees (NUPGE). 

"We strongly support this ruling and call on the Liberal government to not appeal but rather seize this opportunity to expand freedom of expression and put this dark chapter behind us," said Brown.

"When governments use laws to squash views they don't agree with and use the CRA to attack the organizations that support those views, we should all be deeply concerned." said Brown.

 


NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 390,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. — NUPGE