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Money’s back door into politics: Will charitable political activities open the floodgates?

It is scary how hyper-partisan the U.S. is these days, but we should not let fear prevent us from creating an enabling legal framework for Canada’s charitable sector.

The U.S. wasn’t always this partisan, but super PACs have been fuelling division for years through billions of dollars in political spending.

Some say the floodgates were opened by the U.S. Supreme Court’s ruling in Citizens United v. Federal Electoral Commission, in which the court found election spending prohibitions violated the free speech rights of non-profit and for-profit corporations.

Some are now asserting that Canada has had its own Citizens United in the form of Canada Without Poverty v. Attorney General of Canada that overturned the 10-per-cent spending limit for charities on nonpartisan political activities.

While critics of the decision have expressed some valid concerns, I would caution against any quick analogies with Citizens United.

It is especially important not to get carried away by overly broad comparisons since the federal government has announced it will appeal the decision and make legislative changes that remove the current limits on nonpartisan political activities.  

Here are four important differences between CWP and Citizens United.

Partisan political activities are still prohibited.

 In Citizens United, the expression under question was a negative documentary about Hillary Clinton distributed and publicized around the 2008 presidential primaries. In contrast, in CWP, all parties agreed that partisan political activities — statements regarding a specific party or candidate — were off the table. Indeed, charities remain completely prohibited from engaging in partisan political activities.

For those who fear the proliferation of American-style super PACs in Canada, this is a crucial distinction. Only time can tell whether veiled partisan activities will make this a distinction without a difference.

However, the experience from the U.K., Australia and New Zealand suggests that super PACs are not an inevitable result of allowing political activities. While these jurisdictions pay special attention to regulating political activities, especially around election time, complaints are limited to at most a few dozen a year. Most of these require no action. The few violations that are found are usually good-faith errors resolved by education.

Electoral spending limits are still in place

Citizens United dealt with election financing rules that prohibited spending on election advertising. In contrast, CWP does not touch election financing rules. Many cases since the 2004 case Harper v. Canada have firmly established electoral spending limits as constitutional and set out when they over-reach.

Whether or not CWP is overturned on appeal, charities are still subject to the same spending limits as any other third party — individuals, for-profits, non-profits and unions, to name a few. The difference now, if CWP is not overturned on appeal, is that charities would not face an additional non-electoral spending limit from the CRA.

Corporations do not necessarily have the constitutional rights of people

One of the most controversial elements of Citizens United in the public discourse is that it affirmed that corporations had similar free speech rights to individuals. CWP’s reasoning, however, is more nuanced.

The parties did not deal with the question of whether a charity has free speech rights but rather the extent of the government’s discretion in setting limits on tax credits, such as registered charity status. Following Dunmore v. Ontario, the court explained that while the government is not required to provide someone with a specific platform for expression, if they do (by, for example, giving them charitable status), they must do so in a way that is consistent with the Charter. This argument will no doubt be one of the most contentious parts of the appeal.

Purposes of the speech must still be charitable

In Citizens United, the U.S. Supreme Court dealt with the question of when it is permissible to limit a corporation’s political speech per se. In CWP, a crucial step in the reasoning is that nonpartisan political speech is often important (if not necessary) to advance charitable purposes. Justice Morgan repeatedly emphasized that both the UN and Parliament have recognized this. Consequently, not just any political message will qualify. Charities must still show how their advocacy advanceS their charitable purposes. Other jurisdictions, such as Australia and New Zealand, have gone so far as to allow charities to have political purposes and neither has faced an onslaught of super PACs or even a spike in permissible advocacy organizations (as far as I can tell from their registry statistics).

Maintaining a healthy political culture is a constant concern both for the public and the judiciary. Whatever the outcome of this case or the legislation introduced in the fall, it is important to recognize that charities could potentially play a much greater constructive role in public policy-making. As donors, volunteers, employees or advisors, we can all influence the charities we work with to live up to this potential.