Over the past few months there have been some exciting developments for Canadian registered charities in terms of their ability to engage in advocacy activities. First, the law was changed at the end of 2018, then, new guidance was published by the Canada Revenue Agency (CRA) in early 2019 and, most recently, on March 7, 2019, the Minister of National Revenue (Minister) published its response (Response) to the 2017 report (Report) of the Consultation Panel on the Political Activities of Charities (Panel).


On December 13, 2018, changes to the law came into effect to allow charities to devote an unlimited amount of their resources to non-partisan political activities (which are now called "public policy dialogue and development activities" (PPDDAs)) in furtherance of their stated charitable purposes. You can read more about the new laws on PPDDAs in our December article.

Under the new laws, the restriction on charities to devote no more than 10% of their resources on political activities is no longer applicable. Rather, PPDDAs are now considered charitable activities. However, charities still cannot engage in any partisan political activities (i.e., the direct or indirect support or opposition to a political party or candidate). The new laws were generally welcomed by many in the sector as they are significantly less restrictive for charities and easier to understand, but, as we noted in our December article, some questions remained as to how the CRA would interpret them.

CRA Updates in 2019

In early 2019, the CRA published two important updates on its website in relation to the new laws on PPDDAs.

In January, the CRA published draft guidance CG-027 Public policy dialogue and development activities by charities (Draft Guidance) describing how it plans to interpret and administer the new laws, along with a document in question and answer format (Q & A Document) to explain the old rules for political activities and the new rules for PPDDAs. The CRA is accepting public feedback on the Draft Guidance until April 23, 2019. Some key highlights from the Draft Guidance are set out below.

In March, the CRA announced on its website that in November 2019 it will be releasing revised versions of Form T3010, Registered Charity Information Return, and Form T2050, Application to Register a Charity under the Income Tax Act, since now charities must report on PPDDAs rather than political activities. In the meantime, since the new reporting requirements apply immediately, the CRA posted instructions on its website for reporting on PPDDAs using the old versions of these forms.

Canadian Government Responds to Panel Report

As noted above, last week, the Minister published its Response to the Report, which was accompanied by a news release that explained how the CRA will implement the recommendations in the Report. As background, in 2016, the federal government held public consultations to clarify the rules on the political activities of charities, and it created the Panel to prepare the Report based on these consultations. The Panel published the Report in May of 2017 with four key recommendations (Recommendations). You can read more about the Report in our December article.

The first Recommendation pertained to the revision of the CRA's policy regarding PPDAAs (i.e., the Draft Guidance). The second Recommendation covered the work required by the CRA to implement the changes to the advocacy rules. In regards to the second Recommendation, the Response noted that the federal government has committed to provide up to $5.3 million in new funding over the next 5 years for the CRA to enhance outreach and education for the charitable sector, which includes providing in-person and videoconference information sessions for charities, and delivery of the Charities Education Program. The Response indicated that this funding will enable the CRA to enhance training for its employees to ensure policies are implemented consistently and the CRA's forms will be updated to reflect the new rules.

The third Recommendation dealt with amendments to the Income Tax Act (Canada) (ITA) to remove reference to non-partisan political activities so that charities will be explicitly permitted "to fully engage without limitation in public policy dialogue and development activities" (i.e., the new laws on PPDDAs). As a result of the Response to the Report, the audits and objections arising from the Political Activities Audit Program are no longer suspended, and the CRA has indicated that it will be in touch with those charities that were affected by the suspension to discuss their audits and objections which are outstanding. In addition, the Response indicated that the federal government has discontinued its appeal of the Canada Without Poverty v. AG Canada decision since the provisions in the ITA at issue in that case are no longer relevant as a result of the changes to the laws on PPDDAs.

The fourth and final Recommendation is to modernize the legislative framework governing the charitable sector. The Response outlined the measures that will be taken to achieve this objective, including the establishment of a permanent Advisory Committee on the Charitable Sector (ACCS) to give ongoing recommendations to the Minister and the CRA Commissioner on "important and emerging issues facing charities and other qualified donees." The Response also noted that the CRA will receive $3.2 million in new funding from the federal government over the next 5 years to support the ACCS for purposes of strengthening the relationship between the government and the charitable sector.

Highlights from the Draft Guidance

What are PPDDAs?

PPDDAs are not defined under the ITA, but the explanatory notes that accompanied the proposed amendments to the ITA defined PPDDAs as activities that "generally involve seeking to influence the laws, policies or decisions of a government, whether in Canada or a foreign country". This same language is also used in the Draft Guidance and the Q & A Document, which further elaborate on how PPDDAs will be viewed by the CRA:

  • PPDDAs are activities that a charity carries on to participate in the public policy development process, or to facilitate the public's participation in this process
  • "Public policy"means the laws, policies, or decisions of a government, in Canada or a foreign country
  • A charity can transfer its resources to other qualified donees to support their PPDDAs
  • As long as a charity's PPDDAs further its stated charitable purpose(s), there is no limit on a charity's engagement in PPDDAs

The Draft Guidance also provides a non-exhaustive list of activities that the CRA considers as being PPDDAs, such as providing information, advocacy, and mobilizing others, along with some examples of how charities can carry out these activities.

Requirement for PPDDAs to fall within "stated" charitable purposes

As noted above, the new rules require that PPDDAs be carried on in furtherance of a charity's "stated" charitable purposes. The Draft Guidance explains that a "stated" charitable purpose must satisfy the following criteria:

  1. The purpose must be included in the charity's governing documents (e.g., its Letters Patent, Articles, Constitution or any amendments to these documents);
  2. The purpose must fall within one of the four established heads of charity (i.e., relief of poverty, advancement of education, advancement of religion or other purposes that have been found by the courts to be charitable); and
  3. The purpose must provide a benefit to the public (and any private benefit conferred must be necessary, reasonable and proportionate).

The Draft Guidance also notes that since a charity's stated purposes are required to be charitable under the ITA, the charity's governing documents cannot include "influencing the laws, policies or decisions of a government" even where PPDDAs make up most or all of the charity's activities. Instead, the purposes must focus on the charitable purposes (under one of the four heads of charity) that the PPDDAs are meant to achieve.

Other Legal Requirements

The Draft Guidance notes that in addition to the rules under the ITA, charities must be mindful of the requirements of other federal, provincial, or municipal laws that govern PPDDAs. For example, federal and provincial lobbying legislation may impose certain registration and/or reporting requirements on charities engaging in PPDDAs. Charities planning to carry out PPDDAs should ensure that they are meeting any other relevant legislative requirements with respect to these activities.


Given all of these recent developments pertaining to the advocacy activities of Canadian registered charities, it will take some time to get used to the new regime. Despite the growing pains of doing so, the benefits provided by these changes will give charities expanded opportunities to fulfil their charitable purposes and to advocate more broadly for the people that they serve.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.