Canada: CRA Releases Draft Guidance On New Rules Permitting Charities To Engage In ‘Public Policy Dialogue And Development Activities'

Last Updated: January 28 2019
Article by Natasha Smith

Over the past couple of years, we have been following the issues that have arisen with the provisions in the Income Tax Act (Canada) ("ITA") concerning the rules that govern the form of advocacy or "political activities" that a charity can pursue. Most recently, we commented on the draft legislation the Department of Finance released in September 2018 to implement certain changes to the rules around charities' ability to engage in public policy and debate, as found in the ITA.

On October 25, 2018, Finance Minister Bill Morneau tabled a Notice of Ways and Means motion to implement specific provisions of the 2018 federal budget. The motion adopted rules governing public policy dialogue and development that were even more progressive than those released in September 2018. On December 13, 2018, the Budget Implementation Act, 2018, No. 2 received Royal Assent and the new legislation became law.

The new rules adopt Recommendation #3 from the Report of the Consultation Panel on Charities and Political Activities (the "Panel"). The term "political activities" is replaced with the concept of 'public policy dialogue and development' and the new legislation removes the "substantially all" limitation. For clarity the ITA was revised to include a provision that effectively removes the distinction between 'nonpartisan political activities' and 'charitable activities' by confirming that 'public policy dialogue and development' would be included in the definition of 'charitable activities'.

The result is that the new legislation makes the rules more straightforward. Rather than limiting the amount of 'political activities' in which an organization can engage and leaving it to the organizations to try to determine whether advocacy in pursuit of a charitable purpose is "political" and whether they have crossed the 10% threshold, the new rules permit advocacy pursued in support of an otherwise charitable purpose. The only restriction now is that any organization that engages in the direct or indirect support or opposition to a political party or candidate (previously referred to as "partisan political activities") will be found in breach of the requirement that a charity operate exclusively for charitable purposes.

The effective dates for each of the new rules are retroactive and vary from 2008 to 2018. A special nod must be given to the Panel, which initiated the recommendation to make these changes and of which Miller Thomson's Susan Manwaring was a part, as the changes reflect recommendations made by the Panel.

The new legislation was a welcomed win prior to the new year but there remained some question as to how the Canada Revenue Agency ("CRA") would administer the new rules. The Sector eagerly awaited guidance from CRA.

On January 21, 2019, CRA released draft administrative guidance CG-027 "Public policy dialogues and development activities", which sets out how CRA will proceed to interpret the new rules. CG-027 is summarized below, though we note that CRA is accepting feedback on the guidance until April 23, 2019.

A stark contrast from the previous CRA policy which differentiated between "charitable activities", "permitted political activities", and "prohibited political activities", CG-027 distinguishes between activities that are considered to be "public policy dialogue and development activities" (CRA terms these PPDDAs) – which are permitted – and activities that are considered to "support or oppose a political party or candidate" – which are prohibited.


PPDDAs are the activities a charity carries on to participate in the public policy development process, or facilitate the public's participation in that process. CRA defines public policy as the laws, policies, or decisions of a government, in Canada or a foreign country. PPDDAs include:

Providing information – charities may provide information to their supporters or the general public related to their charitable purposes (including the conduct of public awareness campaigns) in order to inform or persuade the public in regards to public policy. Such information must be truthful, accurate, and not misleading.

Research – charities may conduct research into public policy, distribute the research, and discuss the research and findings with the media and with others as they see fit.

Disseminating opinions – charities may express opinions on matters related to their charitable purposes to participate in developing public policy, as long as they draw on research and evidence and are not contrary to hate speech laws or other legitimate restrictions on freedom of expression.

Advocacy – charities may advocate to keep or change a law, policy, or decision, of any level of government in Canada, or a foreign country.

Mobilizing others – charities may call on supporters or the general public to contact politicians of all parties to express their support for, or opposition to, a particular law, policy, or decision of any level of government in Canada or a foreign country.

Representations – charities may make representations in writing or verbally to elected officials, public officials, political parties, and candidates, and appear at parliamentary committees, to bring their views to the public policy development process, and may release such materials publicly.

Providing forums and convening discussions – charities may invite competing candidates and political representatives to speak at the same event, or may request written submissions for publication, to discuss public policy issues that relate to the charity's purposes.

Communicating on social media – charities may express their views, and offer an opportunity for others to express their views, in regards to public policy, on social media or elsewhere. To this end, however, CRA cautions that where a charity provides a platform for public political commentary, it must monitor and remove messages that support or oppose a political party or candidate for public office.

Importantly, charities are only permitted to engage in PPDDAs provided the following criteria are met:

  • the PPDDAs relate to the charity's stated charitable purpose; and
  • the PPDDAs, when considered together with the charity's stated charitable purpose, would provide a benefit to the public.

However, charities may not be established for the purpose of engaging in PPDDAs.

Prohibited Activities

Activities which directly or indirectly support or oppose a political party or candidate are partisan and prohibited. Such activities have always been prohibited under the ITA, however CG-027 aims to bring clarity on the scope of such activities by defining the constituent parts of the prohibition. For instance, CG-027 includes definitions for the following terms:

  • candidate, which is a person that meets the definition set out in an applicable legislation (i.e., The Canada Elections Act) and which does not include potential candidates
  • political party, which is an organization with a fundamental purpose to participate in public affairs by endorsing one or more of its members as candidates and supporting their election
  • public office, which is the House of Commons or a provincial or territorial legislative assembly, national assembly or parliament, band council, regional or municipal government, or similar entity

CRA also makes a distinction (with examples) between direct and indirect support or opposition. Direct support or opposition occurs where a charity's external materials (i.e., social media, website, print publications) communicate a message that supports or opposes a political party or candidate to the public or where a charity transfers any of its resources (i.e., financial, human, or physical) to a political party or candidate, or allows a political party to use its resources without compensation. Indirect support or opposition occurs where a charity's records (i.e., meeting minutes, planning documents, etc.) explicitly reveal that it carried on an activity to support or oppose a political party or candidate or where a charity transfers any of its resources to a third party, to be used to support or oppose a political party or candidate.

CG-027 also includes guidelines on how representatives of charities may personally support or oppose a political party or candidate without putting the charity offside the ITA. For instance, CRA states that while representatives of a charity, such as directors, are permitted to involve themselves in political processes in their personal, private capacity, they:

  • must not use the charity's resources (i.e., office space, supplies, equipment, publications, or human resources) to support their personal political involvement;
  • must not use events or functions organized by the charity as a platform to voice their own political views; and
  • are encouraged to indicate that their comments are personal rather than the view of the charity.

Notably, the receipt of a gift from a political party or candidate or the promotion of a charity by a political party or candidate is permitted and will not put the charity offside the PPDDAs rules. Similarly, a charity's mere agreement or disagreement with a decision or position of government will not result in a breach of the ITA.

Given the new rules and CRA guidance, charities are well-advised to revisit their policies on political advocacy, which policies may now be overly restrictive given the new rules. Lawyers of Miller Thomson's Social Impact Group would be pleased to assist your organization in reconstituting its policies around participation in public policy dialogue and development.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions