With the launch of Conservative Senator Nicole Eaton's inquiry into the "Involvement of Foreign Foundations in Canada's Domestic Affairs", increased scrutiny is being focused on the activities of Canada's charitable environmental groups. In particular, is participating in public consultations, or encouraging others to do so, a political activity forbidden to charities?
The Conservatives have expressed concern about foreign foundations making donations to Canadian charities to influence Canadian law and policy, and whether this puts undue obstacles in the way of major Canadian energy projects. This was apparently triggered by frustration at the large number of registered interveners in the Enbridge Northern Gateway Pipeline Joint Review Panel public hearings. Some of the intervenors receive financial support from US foundations. Northern Gateway would involve two oil pipelines from Northern Alberta oil sands to a proposed Marine Terminal in Kitimat, British Columbia.
The Canada Revenue Agency (CRA) puts severe limits on political activity by registered charities. It's therefore a reasonable question: is participation in public consultation – consultation required by Canadian laws – a political activity that is forbidden to charities? We think that careful participation in public consultation prior to a government decision is neither "political activity", nor forbidden to charities.
First, what is a "political activity" for tax purposes? CRA's Policy Statement CPS-022 – on Political Activities – states that an activity is "political" if the charity:
1. explicitly communicates a call to political action (i.e., encourages the public to contact an elected representative or public official and urges them to retain, oppose, or change the law, policy, or decision of any level of government in Canada or a foreign country);
2. explicitly communicates to the public that the law, policy, or decision of any level of government in Canada or a foreign country should be retained (if the retention of the law, policy or decision is being reconsidered by a government), opposed, or changed; or
3. explicitly indicates in its materials (whether internal or external) that the intention of the activity is to incite, or organize to put pressure on, an elected representative or public official to retain, oppose, or change the law, policy, or decision of any level of government in Canada or a foreign country.
CRA uses precise language that charitable organizations and their advisors are entitled to rely upon. Both the English and French versions of this policy explicitly limit the scope of "political activity" to activities intended to incite a public official to "retain, oppose, or change" a law, policy or decision, i.e. one which already exists. Conspicuously omitted from these definitions are activities that incite a public official to make an initial decision. Public consultation and other efforts to influence how a future decision will be made, such as whether to build Northing Gateway, are therefore not included as (forbidden) political activities.
Second, even if public participation were "political", CRA considers a communication to be a proper part of "charitable activity" if it is subordinate to the charity's purposes and:
- relates to an issue that is connected to the charity's purposes;
- is well-reasoned; and
- does not contain information that the charity knows or ought to know is false, inaccurate, or misleading.
It is also encouraging to note that public participation in an environmental assessment process is not "lobbying". The Lobbying Act creates specific requirements for those who are paid to try to influence law and policy. According to section 5 of the Act, a person must register as a lobbyist if they are paid to either
a) communicate with a public office holder regarding
(i) the development of any legislative proposal by the Government of Canada or by a member of the Senate or the House of Commons,
(ii) 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,
(iii) the making or amendment of any regulation as defined in subsection 2(1) of the Statutory Instruments Act,
(iv) the development or amendment of any policy or program of the Government of Canada,
(v) the awarding of any grant, contribution or other financial benefit by or on behalf of Her Majesty in right of Canada, or
(vi) the awarding of any contract by or on behalf of Her Majesty in right of Canada; or
(b) arrange a meeting between a public office holder and any other person.
Public office holder is broadly defined in the Act, and likely includes the Panel members. A recommendation or decision whether to approve a pipeline, however, is not one of the restricted areas of communication described in section 5. And it is the Panel itself which has arranged the public hearings. Thus, participation in the hearings, or helping someone else to do so, is not "lobbying".
Nevertheless, Sen. Eaton's inquiry is going ahead. In her speech to launch the inquiry, she implied that it is "anti-Canadian" to oppose the pipeline and oil sands development that her party supports:
We need to make it clear that [foreign groups] cannot come here to our country and incite Canadians to turn against us, or even worse, pay agitators to come here and provoke demonstrations and protests against our own country.
This is not a partisan issue, nor is it a regional one. It is certainly not an environmental issue. This is a Canadian issue; a patriotic issue. This is about our sovereignty and economic well-being.
With all due respect to the Honourable Senator, public consultation and environmental assessment are among our most important tools for sustainable development. Inclusivity, and engaging with diverse perspectives, are surely more fundamental Canadian values than unquestioning support for resource extraction.
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