Charitable vs. Political Activities – A Complete Guide by a Montreal CPA Firm Near You

Introduction

One of the most misunderstood areas of charity regulation in Canada is the distinction between charitable activities and political activities. Many boards and executives worry that engaging in advocacy could jeopardize their charitable status. Others unknowingly cross regulatory lines that trigger CRA audits. While charities must devote their resources to charitable purposes, CRA allows certain public policy dialogue and development activities (PPDDAs) that support those purposes. Understanding what is allowed—and what is prohibited—is essential to keeping your charity compliant, effective, and safe from sanctions.

Legal and Regulatory Framework

Rules for political activities are governed by the Income Tax Act and CRA’s updated guidance CG-027: Public Policy Dialogue and Development Activities. Historically, charities faced strict limits on political activities, but these restrictions were removed in 2018 after major court decisions. Today, charities may engage in unlimited PPDDAs if they are carried on in furtherance of charitable purposes and do not involve partisan activity. However, partisan political activity—supporting or opposing a political party or candidate—is strictly prohibited and can result in revocation of charitable status.

Key Court Decisions

In Canada Without Poverty v. Canada, the Ontario Superior Court ruled that limiting policy advocacy violated constitutional freedom of expression. This decision effectively triggered reforms allowing unlimited PPDDAs. In Vancouver Society of Immigrant and Visible Minority Women v. Canada, the Supreme Court established the modern interpretation of charitable purposes, influencing how PPDDAs must connect to those purposes. In Prescient Foundation v. Canada, CRA revoked charitable status in part due to improper political involvement. These cases guide CRA’s enforcement.

What Counts as Charitable Activities?

Charitable activities include: relief of poverty, advancement of education, advancement of religion, and activities beneficial to the community. Charities must use resources exclusively for charitable purposes. Examples include: operating educational programs, providing social services, running community health initiatives, offering religious services, and funding scholarships. PPDDAs must align with one of these charitable purposes.

What Counts as PPDDAs (Public Policy Dialogue and Development Activities)?

These activities aim to influence laws, policies, or programs to further a charitable purpose. Examples include: research on public policy issues, publishing reports on policy impacts, meeting with elected officials, participating in government consultations, advocating for legislative change, and public awareness campaigns tied to a charitable purpose. These activities are allowed without limit as long as they support a charitable purpose and remain non-partisan.

What Counts as Prohibited Partisan Political Activity?

Charities may not: endorse or oppose a political party or candidate, share partisan messages, distribute material that promotes or criticizes specific parties or individuals, provide resources to political campaigns, or allow charitable platforms to be used for partisan purposes. Even implied or indirect support is prohibited. CRA closely monitors charities’ social media, newsletters, and events for partisan content.

Examples of Permitted vs. Prohibited Activities

Permitted PPDDAs: publishing research urging stronger environmental protections, advocating for better housing laws, hosting a non-partisan public forum on disability policy, meeting with elected officials to discuss child welfare programs. Prohibited activities: telling supporters to vote for a specific party, criticizing a candidate during an election, using charity resources to support a campaign, sharing partisan content online.

Documentation and Compliance Requirements

Charities must: document all PPDDAs, track expenditures, ensure staff and volunteers understand the rules, maintain non-partisanship in public communications, and report PPDDAs in the T3010 Registered Charity Information Return. CRA may request evidence that PPDDAs further charitable purposes.

Mackisen Strategy

At Mackisen CPA Montreal, we help charities stay compliant while engaging effectively in policy advocacy. We review communication strategies, train boards and staff on political activity rules, develop policies for social media and public engagement, review PPDDAs for compliance, ensure T3010 reporting is correct, and provide audit defence if CRA questions activities. Our guidance empowers charities to advocate confidently without risking their status.

Real Client Experience

A social justice charity under CRA review for partisan allegations passed audit after we demonstrated its activities were non-partisan PPDDAs. A community health organization improved its advocacy strategy after we trained its board on current rules. A faith-based charity avoided penalties by restructuring its public messaging to eliminate implicit partisan references. A housing advocacy charity successfully reported extensive PPDDAs on its T3010 after our compliance review.

Common Questions

Can charities advocate for law changes? Yes—if tied to charitable purposes and non-partisan. Can charities criticize government policies? Yes—criticizing or recommending policy improvements is allowed. Can charities tell people how to vote? No—this is strictly prohibited. Do PPDDAs have spending limits? No—unlimited, as long as they support charitable purposes.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal ensures that charities engage in advocacy safely, legally, and effectively. We help you protect your charitable status while advancing your mission through responsible public policy work.