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Green Titanic: How Big Green Money’s Political Power Was Unleashed

April 29, 2019

Recent changes in Canada's Income Tax Act governing charities and a recent court decision have freed activist environmental organizations from previous constraints on their ability to conduct and fund political activities.

From the study: 

Recent changes in [Canada’s] Income Tax Act and regulations governing charities and a recent court decision have freed activist environmental organizations with charity status from previous constraints on their ability to conduct and fund political activities.

Until recently, the Income Tax Act barred registered charities from spending more than 10 per cent of their revenues on political activities, which were defined narrowly to include only partisan support for candidates or political parties seeking election. They allowed charities to spend more on other political activities such as lobbying of politicians, publishing information, launching public advertising campaigns to oppose energy developments, mobilizing supporters to oppose certain laws, or organizing public demonstrations and blockades.

The Trudeau government passed legislation as part of the Omnibus Budget bill in 2018 authorizing charities to carry on unlimited “public policy dialogue and development activities” to influence laws and policies. In July 2018 Justice Edward Morgan of the Ontario Superior Court of Justice ruled that the Income Tax Act’s 10 per cent limitation on partisan political activity was unconstitutional. The Trudeau government decided to not appeal the ruling.

[As a result of these changes] Registered charity ENGOs that receive taxpayer funding are now unrestrained by CRA regulations in terms of using their revenues to fund a wide range of political activities to oppose resource development [and] [t]he court system has, in the name of freedom of expression, removed all limits on the use of funds by registered charities even for partisan political purposes.

Author
Robert Lyman is an economist with 35 years’ experience as an analyst, policy advisor, and senior manager in the Canadian federal government.
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