Income Tax Act Charter Challenge

The real experts in the relief of poverty are our Board of Directors, and others in our network who have experienced poverty. The restrictions on participation by our members in public policy discussions related to poverty exacerbates their political marginalization. The Canadian government and experts around the world have recognized the lack of equal political participation of people living in poverty as a primary cause of poverty and of misguided public policy.

Prior to CWP’s historic win, Section 149.1(6.2) of the Income Tax Act required registered charities to strictly limit any ‘political activities’ to only 10% of an organization’s time and resources. The Canada Revenue Agency (CRA) had defined ‘political activity’ as any activity that “explicitly communicates to the public that a law, policy or decision of any level of government inside or outside Canada should be retained, opposed, or changed.” Charities were required to monitor staff and members of their organization to determine if they had made public statements about current laws or policies, and report annually to CRA on all such activities and to strictly limit them.

In 2016, CWP made waves by taking on the government to defend the freedom of expression of people living in poverty and the charitable organizations that represent them. In 2018, the Ontario Superior Court released a judgment in CWP’s Charter challenge to the Income Tax Act, striking down provisions that stifled the free expression of charitable organizations and kept them from effectively engaging in public policy dialogue.

The government withdrew their appeal to the case, and Bill C-86 to amend the Income Tax Act received Royal Assent, meaning organizations no longer face an “advocacy chill” and people facing extreme marginalization have a stronger voice as they seek to bring about social change. In 2019, CWP’s former Executive Director, Leilani Farha received the Jack Layton Progress Prize from the Broadbent Institute in recognition of CWP’s work on the case.

Democracies don’t force people to relinquish the right to freely express opinions in exchange for benefits in the tax system… The same is true of people living in poverty. CWP relies on charitable donations in order to work for the relief of poverty in Canada. Our donors want us to be effective and to speak out about the need for changes to laws and policies. Our members should have the same freedom of expression to speak out about poverty as other organizations have to speak out about their areas of interest and expertise.

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We are truly grateful for the dedicated work of our lawyers at McCarthy Tetrault, and the commitment and tireless efforts of Bruce Porter from the Social Rights Advocacy Centre. It is also important to acknowledge that this was made possible due to funding from Legal Aid Ontario, Test Case Funding.