On October 31, 2018, the Government introduced proposed legislation as part of the Budget Implementation Act, 2018, No. 2 to change the rules for charities so that they have the full ability to pursue their charitable purposes by engaging in non-partisan political activities and the development of public policy. Specifically, the legislation proposes to:
- Remove the Income Tax Act provisions relating to the non-partisan political activities of charities, including the provision that effectively limits charities to devote only 10 percent of their resources to non-partisan political activities;
- Maintain the prohibition on charities providing direct or indirect support to, or opposition to, a political party or candidate for public office; and
- Clarify that charitable organizations, like charitable foundations, must be constituted and operated for exclusively charitable purposes.
- These changes are consistent with Recommendation no. 3 of the Report of the Consultation Panel on the Political Activities of Charities.
The above measures received royal assent on December 13, 2018. The proposed legislation will apply retroactively.