The Canada Revenue Agency held an invitation-only consultation with charities in Halifax Tuesday as part the Liberal government pledge to "modernize and clarify" the rules surrounding acceptable political activities for charities.

"We hope to see some major recommendations to change the way charities can participate in public debate," said Mark Butler, policy director of the Halifax-based environmental advocacy group Ecology Action Centre.

Right now Canadian charities are allowed to spend up to 10 per cent of their resources on political activities, a limit Butler argues is arbitrary and impedes charities from carrying out their mandate.

'Charities shouldn't be partisan'

Outside the closed-door meeting, Butler said he agrees charities should not be partisan, "but they should be able to advocate for changes in laws without worry that they are going to be hit with an audit or censored."

Mark Butler Ecology Action Centre

Mark Butler is the policy director of the Ecology Action Centre. (CBC)

The previous Conservative government launched a political-activity audit program in 2012 with funding that grew to $13.4 million. A wave of audits of environmental and social groups followed.

In January 2016, the Trudeau government said it was winding down the political-activity audit program. The wave of audits eventually cost five groups their charitable status — not because of political activities but due to other violations found by auditors.

Sense of 'politically targeted audits'

"We saw a few years ago what can happen when you have ambiguous rules or rules that are open to interpretation, combined with a hostile government," Butler said. "There were audits of up to 60 charities working on environmental issues, international development issues, social issues and a lot of us felt those were politically targeted audits."

The Ecology Action Centre spent two years undergoing a CRA political-activity audit. In the end it retained its charitable status after satisfying auditors it had improved the way it tracked its political activities.

Carolyn Whiteway, acting executive director of the Atlantic Council for International Co-operation, was also part of the CRA consultation in Halifax. She too welcomed the consultation and changing signals from Ottawa. 

Panel to provide advice

The group members include charities like the Nova Scotia Gambia Association, which promotes health and education initiatives in the African country, and the Coady Institute in Antigonish.

"We've done surveys across the sector in Canada and what we've seen is the international sector has got audited to a much higher degree than many of the other charities in Canada," Whiteway said.

Carolyn Whiteway

Carolyn Whiteway, acting executive director of the Atlantic Council for International Co-operation, welcomed the consultation and changing signals from Ottawa. (CBC)

In September the federal government announced the consultation and the creation of a panel to provide advice. The panel reports in the new year.

Parliamentary secretary Terry Duguid said at the time the Liberal government was "seeking to identify changes that are needed in the guidance" to CRA when it comes to political activity by charities.