Canadian Charity to Challenge Government Audits in Geneva

Homeless man in red shirt leaning back

Canada Without Poverty is challenging a law that restricts nonprofits’ involvement with politics.
Image: Anna.Kraynova / Shutterstock.com

The Canada Revenue Agency, that country’s equivalent of the IRS, has a rule that limits charitable organizations from spending more than 10% of their resources on “political activity.” One group, Canada Without Poverty, is headed for Geneva to argue before the United Nations Human Rights Committee that this rule is unfair and is essentially a gag order against charities.

Canada Without Poverty (CWP) is arguing that the rule is vague, as “political activity” is not well defined, and that the agency uses the rule to go after groups that oppose government policy. The rule is especially tough for CWP, which is an advocacy group that focuses on keeping the Canadian government on track with their efforts to curb poverty. CWP doesn’t run soup kitchens and other activities generally associated with anti-poverty charities, but it is essentially a non-partisan political watchdog. They are especially concerned with making sure that Canada maintains its international promises, which is part of why they’re going to the UN over this.

For groups that are focused on advocacy, spending only 10% of their resources on political activity seems harsh, because depending on how one defines “political activity,” they might not be spending the vast majority of their resources to achieve their goals, making much of that money a waste. Non-profits in the United States are sometimes focused solely on political aims, and the minimal government oversight for charitable organizations in the US can lead to problems, but Canada may have gone too far in the other direction on this front.

The Canada Revenue Agency maintains that the rule, which has only been in place since 2012, is clear about what political activity means. They also maintain that they work independently of the government proper and do not use their rules to silence anyone. Violation of the rule can come with stiff penalties, which can have the effect of reducing an organization’s revenues and thus how much they can spend on political activity.

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