Opinion

The Liberals are considering loosening the reins on charities' political spending. That is a terrible idea

Currently, a large charity can spend only 10 per cent of its budget on "non-partisan" political activity. If the government accepts the recommendations of a CRA report, charities will be allowed unlimited "non-partisan" political engagement.

As it stands, the rules might actually be too lax already

Canadian charities report spending a total of about $25 million annually on political activities, but they already have the combined potential to spend a whopping total of $25 billion. (THE CANADIAN PRESS)

There is nothing "charitable" about charities spending less on philanthropic work and more on political endeavours. But Justin Trudeau's Liberals are nevertheless considering loosening charities' spending limits and restrictions on political activity.

By the end of this month, the Liberals say they will officially respond to areport commissioned from the Canada Revenue Agency (CRA), which recommends the government "broaden the ability of registered charities to engage in political activities," while at the same time maintain "an absolute prohibition on partisan political activities."  

The Liberals have already gone ahead and suspended the political audits and revocations of charities, a process that was launched under the Harper government in 2012. At the time, the government was accused of political opportunism for its "witch hunt" of charities that were, for example, critical of its policies on the environment. The CRA, nevertheless, found violations committed by seven out of the 54 charities audited — violations that were grievous enough to warrant revocations. Indeed, with hindsight, it appears the Conservatives might have been onto something.

'Non-partisan' political spending

Currently, a large (annual income over $200,000) charity can spend only 10 per cent of its budget on "non-partisan" political activity, but if the report's recommendations are adopted by the government, charities will be allowed unlimited "non-partisan" political engagement, just as long as it is "subordinate to and furthers their charitable purposes."

What that means, and how the line will be drawn, is unclear.

What would be clear, however, is that charities such as the Pierre Elliott Trudeau Foundation, of which Trudeau was vice president of the board in 2012, would have no limit as to how much it could spend on social science research, conferences and speaking events promoting progressive policies — policies that are awfully well aligned with the Liberal agenda.

The right-wing Fraser Institute, which is also a registered charity, would likewise have no cap as to how much it could spend on reports meant to influence government policy. Yet none of these activities are even deemed political by the current rules, as these charities didn't file any of their expenses under the political activity section with the CRA. As it stands, the rules might be too lax already.

It already appears the Liberals have benefitted from third party political involvement: a recent report in the Calgary Herald alleged registered third parties — with the aid of funnelled foreign money — helped the Liberals win ridings in the last federal election.

Granted, only a few of those 114 third parties were registered charities. But would it not be politically advantageous for the Liberals to allow and encourage more charities to get politically involved if could potentially lead to electoral success?

Sure, every party theoretically stands to gain from unconstrained "charitable" spending, but as National Post columnist Andrew Coyne has pointed out, other than the odd conservative-minded charity like the Fraser Institute, "the vast majority… are more likely to sympathize with Liberal and NDP policy than Conservative." Trudeau's top adviser Gerald Butts ran a charity while it engaged in political activities and campaigns against pipelines, so he surely knows firsthand how charities can be politically influential in reaching a desired end.  

Spending potential

According to charity expert and lawyer Mark Blumberg, Canadian charities report spending a total of about $25 million annually on political activities, but they already have the combined potential to spend a whopping total of $25 billion. That's without counting added funds from foreign entities, which have already gotten involved with stopping pipeline development.

If the Liberal government relaxes the laws in a misguided effort to encourage charities to "make an important contribution to public debate and public policy," more out of these billions could be syphoned for political operations instead of charitable purposes, potentially dwarfing the tens of millions political parties themselves spend.

The philanthropic sector in the U.S. has already been largely co-opted by trillions of dollars from its richest citizens looking to covertly influence the political process. That's not the case in Canada; by and large, charities remain highly respected by industry experts for their vital work in helping the needy.

But if the Liberals let go of the reins and allow charities unlimited political spending, an opportunistic few could sully the reputation of an entire industry. There are limits on political spending by third parties for a reason. The Liberals should not be making it easier to bypass the rules.

This column is part of CBC's Opinion section. For more information about this section, please read this editor's blog and our FAQ.

About the Author

Graeme Gordon

Graeme Gordon is a freelance journalist writing for Loonie Politics and his blog, Raving Canuck.

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