Webinar – Public policy dialogue and development activities (PPDDAs) by registered charities

Webinar Transcript

Slide 3 – Public policy dialogue and development activities (PPDDAs) by registered charities

Simon: Let me welcome you to the Canada Revenue Agency’s webinar on Public policy dialogue and development activities by registered charities.

Thank you for taking the time to join us today.

My name is Simon and I’ll be your host for today’s talk.

Slide 4 - Objective

Simon: The purpose of today’s presentation is to familiarize you with the rules governing public policy dialogue and development activities carried out by registered charities, also known as “PPDDAs”. With election cycles coming up in Canada and abroad, charities may see an opportunity to highlight the policy issues that are important to their supporters. The CRA recognizes that charities have an important contribution to make to the ongoing public conversations around important issues facing Canadians, and the Income Tax Act gives them a lot of latitude to discuss the laws, policies, or decisions of Canada or other countries through PPDDAs. However, there are some rules that charities need to keep in mind when carrying out advocacy work.

A note that, throughout the presentation, when we use “charity” or "charities“, we are referring to organizations that have been registered as charities by the CRA under the Income Tax Act.

If you have any questions after the presentation, you can contact our client service representatives at 1-800-267-2384.

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Slide 5 - Overview

Simon: We will cover several key topics today.

To begin, we will provide a brief historical context of the rules surrounding public policy dialogue and development activities.

Then, we will go into:

• What public policy dialogue and development activities are
• The requirement that PPDDAs further a stated charitable purpose of the charity
• The prohibition of supporting or opposing a political party or candidate
• Other legal requirements that may apply to PPDDAs

We will wrap up with an overview of where you can find this information on canada.ca.

Slide 6 - Historical context

Simon: Under the former quantitative limits specified in the Income Tax Act, a charity could devote a limited portion of its resources (generally, about 10%) to non-partisan political activities that were ancillary and incidental to its charitable purposes.

In 2016, the CRA held a consultation with the public and the charitable sector on charities’ political activities, led by a consultation panel from the charitable sector.

In 2018, the Department of Finance amended the Act to remove the quantitative limits on the resources a charity can devote to political activities and to specify that charitable activities include public policy dialogue and development activities that further a charitable purpose of the charity. As a result of these changes, charities may now pursue their stated charitable purposes by carrying on unlimited public policy dialogue and development activities in furtherance of those purposes. However, charities continue to be prohibited from directly or indirectly supporting or opposing a political party or candidate for public office.

In 2019, the CRA published new guidance, CG-027, to help registered charities better understand the new rules governing PPDDAs which was later revised in 2020.

Slide 7 – Public policy dialogue and development activities

Simon: So, what are PPDDAs? PPDDAs are activities a charity carries on to participate in the public policy development process, or facilitate the public’s participation in that process.

The CRA considers public policy dialogue and development activities to include those that seek to influence the laws, policies or decisions of a government, whether in Canada or a foreign country.

PPDDAs include, but are not limited to, the types of activities Canadian courts have considered to be political activities, including:

• Providing information, including public awareness campaigns, to inform or persuade the public in regard to public policy. Such information must be truthful, accurate, and not misleading.
• Conducting research into public policy, distributing the research, and discussing the research and findings with the public.
• Disseminating opinions when participating in the development of public policy, as long as they draw on research or evidence, and they are not contrary to hate speech laws or other legitimate restrictions on freedom of expression.
• Advocacy to retain, oppose, or change a law, policy, or decision, of any level of government in Canada, or a foreign country.
• Mobilizing others to contact elected officials, public officials, political parties, and candidates of all parties to express their support for, or opposition to, a particular law, policy, or decision of government.
• Making 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.
• Providing forums and convening discussions where competing candidates and political representatives are invited to speak at the same event, or request written submissions for publication, to discuss public policy issues.
• Communicating on social media to express their views, and offer an opportunity for others to express their views, in regard to public policy.

Slide 8 – Stated charitable purpose

Simon: To be eligible for registration, the Income Tax Act requires a charity’s stated purposes to be charitable - a stated purpose is one that appears in the charity’s governing documents, such as its articles of incorporation, constitution or trust, and what is charitable is defined by the Income Tax Act and common law. It is important to know that the common law provides that political purposes are not charitable purposes. Political purposes are defined in the common law as purposes that seek to either:

• further the interests of a particular political party or support a political party or candidate for public office
• retain, oppose, or change the law, policy, or decision of any level of government in Canada or a foreign country

So, this means a charity cannot have a political purpose. The purposes stated in its governing document must not refer to influencing the laws, policies or decisions of a government, even if most or all of its activities are PPDDAs.

We appreciate that it may seem a little unusual that a charity can devote all its day-to-day time, effort, and resources to changing a law, but its purposes in its governing documents can’t mention changing a law.

However, this is the way the Income Tax Act has been written, and it is the CRA’s role to administer the law as it stands.

Our guidance therefore tries to be as clear as possible on this point, to help charities navigate this requirement.

[Ottawa Parliament]

Slide 9 – Furthering a stated charitable purpose

Simon: A charity may engage in unlimited PPDDAs that further its stated charitable purposes, provided the charity never directly or indirectly supports or opposes a political party or candidate for public office (we will review what this means in a few minutes). In other words, a charity is free to advocate for retaining, opposing, or changing any law, policy, or decision of government in furtherance of its stated charitable purpose.

A charity’s PPDDAs further a stated charitable purpose if they satisfy both of the following criteria:

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

In this sense, PPDDAs are like any other charitable activity.

In this context, a charity could, for example, carry out PPDDAs to:

• relieve poverty by contributing to the development of government policies in matters relating to poverty relief, or
• advance education by contributing to the development of government policies in matters relating to the regulation of education.

Slide 10 – Example 1

Simon: To illustrate these requirements, here is an example:

A charity operating a primary school emails parents of its student body asking them to contact their elected officials to express their opposition to the government’s decision to cut funding for public schools.

The charity can carry out this type of PPDDA to further a stated charitable purpose such as “To advance education by operating a primary school for children of Town ABC.” The PPDDA relates to the charitable purpose of advancing education, and when considered together with the charitable purpose, provides a benefit to the public.

However, the charity cannot have a purpose such as “To call for more government funding for public schools” in its governing documents. This is a political purpose as it refers to influencing the decisions of government and is therefore not charitable.

Slide 11 – Example 2

Simon: As another example, if a charity wants to carry out PPDDAs to advocate for the implementation of public policies to reduce carbon emissions, it should be constituted for a purpose such as “To protect the environment for the benefit of the public by conserving or restoring ecosystems and biodiversity on a long-term basis” which focuses on the charitable purpose the PPDDAs are meant to achieve – the protection of the environment.

It cannot be constituted for a political purpose such as “To advocate for stronger legislation to address climate change” which refers to influencing the laws of government and is therefore non-charitable.

Slide 12 – Example 3

Simon: The rules of the Income Tax Act allow charities to carry out a wide range of PPDDAs. For example, a charity with a stated purpose to “promote health by operating mobile clinics that deliver health care services to underserved areas” can carry out various types of PPDDAs such as:

• Making representations to elected officials to advocate for healthcare reform to improve access to healthcare services
• Communicating the charity’s views on social media platforms against a municipal government’s zoning decision to permit smoking on restaurant patios
• Calling on the public to contact their elected officials to express their support for government action to lower the cost of prescription drugs

These PPDDAs are linked to the charity’s stated purpose of promoting health and when considered together with the stated purpose, they provide the public benefit of the purpose which is to prevent or relieve mental or physical health conditions.

However, if the charity was constituted for a purpose to advance the public’s appreciation of the arts, for example, the charity could not carry out these PPDDAs as they would not be linked to the charity’s stated purpose. In this case, the charity would need to add a purpose in its governing documents, such as a purpose to promote health, in order to carry out these PPDDAs.

Slide 13 – Prohibited: Supporting or opposing a political party or candidate

Simon: Under the ITA, a charity can never directly or indirectly support or oppose a political party or candidate for public office. These types of activities are not PPDDAs, and charities cannot carry on any such activities.

A charity may publicly agree or disagree with a decision or position of government, but in doing so must not support or oppose any political party or candidate for public office. As a general guideline, a charity’s communications should focus on the policy issue under discussion, and not refer to any candidate or political party.

Direct support or opposition means either of the following:

• the charity’s external messaging (for example, social media posts, website materials, print publications, speeches) communicate that it supports or opposes a political party or candidate
• the charity transfers any of its resources (for example, financial, human, or physical resources) to a political party or candidate, or allows a political party or candidate to use its resources at below fair market value

Indirect support or opposition means either of the following:

• the charity’s records or internal messaging explicitly reveal it carried on an activity to support or oppose a political party or candidate
• the charity transfers any of its resources to a third party, to be used to support or oppose a political party or candidate

Slide 14 – Supporting or opposing a political party or candidate: Definitions

Simon: Three key definitions to keep in mind when it comes to PPDDAs are:

First, candidate. The CRA considers a candidate to be a person who meets that specific definition in the applicable election legislation. For example, a candidate in a federal election would be a person that meets the definition in the Canada Elections Act. Charities must not devote resources to supporting or opposing the election of any individual, even if they are not an official candidate.

Second, the CRA considers a political party to be 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.

And lastly, public office. The CRA considers a candidate for public office to include a candidate seeking election to any of the following:

• the House of Commons; or
• a provincial or territorial legislative assembly, national assembly or parliament, band council, regional or municipal government, or similar entity.

Slide 15 – Examples of prohibited direct or indirect support or opposition to a political party or candidate

Simon: To provide some examples of prohibited direct and indirect support or opposition of a political party or candidate for public office…

A charity cannot, for example:

• Endorse a candidate for public office over social media
• Tell people in person not to vote for a political party
• Send its board members to accompany a candidate in an election campaign as representatives of the charity

Indirect support or opposition can include, for example:

• A charity’s internal documents state that it will oppose a political party that takes a different view on a certain policy issue, by holding a public demonstration where the party is gathering
• A charity assigns its staff to work for a non-profit organization, on the understanding that the staff’s time will be used to support a candidate’s election campaign.

Slide 16 – Allowed

Simon: There are many ways a charity can undertake PPDDAs that do not amount to supporting or opposing a political party or candidate for public office. The rules of the Income Tax Act on PPDDAs also do not apply to representatives of a charity who are involved in politics on their own personal time.

A charity may carry out PPDDAs that support or oppose a law, policy, or decision of government that a political party or candidate also supports or opposes. A charity can do this at any time as long as in doing so the charity does not refer to or otherwise identify the political party or candidate. The actions a political party or candidate may independently take do not transform the activities of a charity into direct or indirect support of or opposition to that party or candidate. What the CRA considers is the activities of the charity itself. For example, a charity’s PPDDAs are not, nor do they become, in support of or opposition to a political party or candidate, if a political party or candidate is commonly known or understood to have the same view as the charity on a particular issue or publicly communicates the same view on the issue.

A charity can also inform the public of the policy positions of all parties or candidates, or their responses to policy questions - this is the case even if it is obvious a party or candidate shares or opposes the views of the charity. A charity may do this by publishing the information on its website or social media platforms, as long as it is presented in a neutral fashion. A charity may also hold candidates’ debates that are moderated to ensure that all candidates are given an equal opportunity to present their views and answer questions.

A representative of a charity, such as a director, may be involved with an election, political campaign, or other political process in their own personal, private capacity as individuals. However, a charity must never use its resources, such as office space or supplies, and human resources, such as employees or volunteers, to support that individual’s personal political involvement. Representatives of a charity can also publicly voice their personal views on political issues, but must not use events or functions organized by the charity, the charity’s publications, or other resources such as a platform to voice their views on these issues. Representatives of a charity, particularly leaders, who want to speak or write in their individual capacity should indicate that their comments are personal rather than the views of the charity. This is particularly important in the case of social media, where it may be difficult to tell whether a representative’s messages reflect his or her personal views, or those of a charity.

Slide 17 – Example: Representative of a charity involved in politics

Simon: As an example, a charity’s director may be a candidate for public office and want to campaign during the election.

The prohibition of directly or indirectly supporting or opposing a political party or candidate does not apply to representatives of a charity, in their own personal, private capacity as individuals. As such, the director is allowed to campaign on their own personal time, using their own personal resources. The director can also speak about their views outside of the charity’s events and functions, but should always indicate that their views are their own and not those of the charity.

However, the charity cannot make its resources available to support the director’s campaign, including office space, supplies, and human resources like employees or volunteers. The charity should also refrain from using its events or functions, social media outlets, or publications to provide a platform for the director to campaign or express their views. This would amount to supporting a candidate for public office, which is prohibited by the Income Tax Act.

Slide 18 – Example (1/2)

Simon: To provide another example, to further its purpose to provide settlement assistance to newly arrived refugees, a charity would like to carry out PPDDAs to support government policies that facilitate the issuance of work and study permits for immigrants.

Slide 19 – Example (2/2)

Simon: The charity CAN:

• Tell supporters to contact their elected officials to express their support for this type of policy
• Communicate the charity’s views on the policy issue without referring to any candidate or political party
• Hold a debate on the policy issue to which all political parties are invited to present their views
• Publish the voting record of all members of Parliament on the policy issue

The charity CANNOT:

• Tell supporters not to vote for a political party that opposes this type of policy
• Communicate the charity’s views on the policy issue by referring to a candidate or political party that shares the same views
• Invite only one candidate to an election who shares the charity’s views to speak to the charity’s supporters
• Single out the voting pattern of a particular political party or candidate on the policy issue

Slide 20 – Other legal requirements

Simon: A charity that intends to carry out PPDDAs should be aware of other federal, provincial, or municipal requirements that might apply to these types of activities, such as:

• the Canada Elections Act
• the Lobbying Act
• the First Nations Elections Act
• provincial lobbying and election legislation

A charity that carries on allowable PPDDAs is not exempted from meeting any provincial requirements on the use of its resources, such as any restrictions on the use of charitable assets.

Slide 21 – Upcoming elections: What you need to remember

Simon: With election cycles coming up in Canada and abroad, charities may see an opportunity to highlight the policy issues that are important to their supporters. When doing so, charities must be careful to only engage in PPDDAs that comply with the rules of the Income Tax Act.

Some key reminders:

• PPDDAs are only allowed when they further a stated charitable purpose of the charity. As such, a charity should not seek to oppose or change a law, decision or policy of government that is unrelated to its stated purposes. It is also important for the charity to keep adequate books and records showing how its PPDDAs further its stated charitable purposes.
• There is no limit on the amount of resources a charity can use for PPDDAs. In this context, a charity may devote up to 100% of its resources to carrying out PPDDAs that further its stated charitable purposes.
• A charity cannot support or oppose a candidate or political party, directly or indirectly. As such, when opposing or supporting a decision, law, or policy of government, a charity’s communications should focus on the policy issue under discussion, and not refer to any candidate or political party.
• Other federal, provincial or municipal legislation may apply to a charity’s PPDDAs such the Canada Elections Act and the Lobbying Act. As such, we recommend that you familiarize yourself with these other legal requirements before undertaking any PPDDA.

If you would like to carry out new PPDDAs but are unsure whether they would comply with the rules, we encourage you to reach out to our Client Service representatives who will be able to assist you.

Slide 22 – Where to find this information (1/2)

Simon: In case you’ve missed something, or if you’d like to do some additional reading, or you’d like to revisit this information later, here’s how you can find it on our website.

Our Charities and Giving - A to Z index is accessible right off our main landing page. You can search for any charity-related topic, with even just a keyword, there are over 400 topics you can find here. Once you are on the A to Z index page, you simply type in what you’re looking for. You’ll notice here we typed in “Public policy” and it populated different possibilities. The third option is our Guidance on PPDDAs.

Slide 23 – Where to find this information (2/2)

Simon: For more information on PPDDAs, you can also follow the link to our Guidance here [link to the Public policy dialogue and development activities by charities page].

Slide 24 – Contact us

Simon: This is the number to reach our client service representatives, dedicated for Charities: 1-800-267-2384. There, you can speak directly to one of our representatives. They are available to help you Monday through Friday, from 8 a.m. to 5 p.m. Eastern time.

Thank you so much for attending today’s webinar. We hope we were able to answer your questions.

We will be sending you a link to an online survey about today’s webinar. Please take a few minutes to complete the survey.

Your feedback is really important to us. It helps us evaluate the effectiveness of our webinars and plan for our future outreach activities.

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Thank you.

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• Charities and giving
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• Access our online services for charities)