The Canada Revenue Agency (CRA) is in the midst of attempting to clarify its guidelines on how the more than 700 Canadian animal welfare charities can legally operate and continue to maintain their charitable status.
Until March 31, the agency is keeping its eyes and ears open for anyone who has a suggestion or comment on how it has worded its new proposed guidance for “The Promotion of Animal Welfare and Charitable Registration“.
The proposal and its wording, which was released in February, has caused consternation and confusion for some sector organizations and animal welfare activists; many of whom feel the guidance is designed to stifle animal welfare charities’ activities or to make it easier for the government to pull charitable status away from them.
The CRA proposal, like much of its documentation, is weighty and wordy, though interested readers will want to familiarize themselves with it and perhaps submit comments back to the agency.
The law is the law
Perceived by many animal welfare activists and charities as one of the most egregious sections of the guidance, in section three of its summary, the agency notes that to be considered charitable, an animal welfare charity must be conducting activities where “the benefit to humans must always take precedence over any benefit to animals. If a purpose or activity that promotes the welfare of animals harms humans, or has a real potential to cause significant harm to humans, it is likely not charitable.” In the month following the CRA’s release of its proposal, the above paragraph alone elicited volumes of response from those in the sector who believe that the term “real potential” to harm humans, is so ambiguous as to make it easy for the agency to shut down charities on a whim.
In an op-ed to The Strait on March 4, Lesley Fox, executive director of Fur-Bearer Defenders commented “Not only do these guidelines make it extremely difficult for a charity to influence any real and meaningful laws for animals, the guidelines also polarize animals and humans. It’s an ‘us versus them’ mentality.” She noted that as a nonprofit, her organization does not fall under the CRA guidance and urged animal welfare charities to consider whether losing their charitable status might help unburden them of restrictions imposed on charities, even if it causes some financial pain to lose the government’s charitable grants and the ability to issue tax receipts.
[Author’s note: Canadian registered charities are limited to spending 10% of their resources on political activities, with some exceptions, according to CRA rules.]
However, according to the CRA, the guidance is actually intended to help charities understand what the laws actually are in relation to their specific charitable niche in the sector, in order to better help them conduct their operations under Canadian law.
Béatrice Fénelon, a spokesperson for the agency, told CharityVillage® that the forthcoming guideline document is not intended to create or revise legislation, instead its goal is “to help clarify CRA’s interpretation of the current law, and summarize advice on qualifying for registration as a charity and remaining compliant.” Secondarily, it is also intended to be a useful reference point for applicant organizations, charities seeking to maintain their registration, CRA officials reviewing applications and auditing operations, and for general public knowledge, the spokesperson said.
Additionally, Fénelon said that public consultation on CRS guidelines is an “important and routine part” of the policy guidance development process. “Topics and priorities for policy development are selected based on questions that arise through applications, audits, client inquiries and consultation with internal and external partners.”
Guidance the humane way
With this proposal, the CRA approached one of Canada’s leading animal welfare organizations for its input: the Canadian Federation of Humane Societies (CFHS), the “national voice” of the country’s humane societies and SPCAs, as it bills itself.
Lori Waller, CFHS’s communications coordinator, said while her organization doesn’t necessarily agree with some of the Canadian law surrounding animal welfare activities, it understands that the CRA is not creating the law, just trying to interpret it for charities.
“There’s been a fair amount of confusion and misinformation going around. Some of which is understandable, if you read the text of the guidelines and don’t read it carefully. People have been saying things like ‘organizations that oppose certain hunting practices or try to change laws will have their charitable status taken away from them, and that this is against freedom of speech etc,'” Waller said. “But it’s a document that the CRA is putting forward meant to help animal welfare charities understand the criteria that are already used to determine whether something can be a charitable organization.”
Waller said CFHS had submitted its comments back to the CRA in early March and had not heard back from the agency.
The federation has also advised all its affiliates of what the CRA is trying to do, in an attempt to ensure that its members don’t get too overheated about the proposed guidance, even though some of it was “kind of disturbing”, she said.
For instance, Waller said CFHS wasn’t aware that Canadian charitable case law defines charitable animal welfare activities as needing to have “a benefit to human society.”
“I think it’s unfortunate that that’s what courts have defined ‘charitable’ to mean. It reflects a lack of respect for animals [and] it’s a moral philosophy that we find troubling and outdated. A lot of the case law that’s used to justify these criteria is very old and we think out-of-step with what most Canadians actually value…as charitable. In our response to CRA we asked about this common law. I believe some [case law] was from the 18th century.”
Citing a section on vivisection in the proposed document, which defends the practice on grounds that research on animals of that kind constitutes a benefit to humans, Waller noted that since that legal interpretation was set, alternative ways of conducting research for the benefit of humanity have been pioneered and perfected.
“It would be nice” if somehow the CRA decision-makers could reflect modern day medical science advances in their guidelines, she added.
Only the beginning
According to charity law expert Mark Blumberg — who runs the informative blog globalphilanthropy.ca — the country’s animal welfare charities should note that the CRA’s proposed guidance only affects registered charities and not nonprofits that are not registered charities or for-profit entities.
“In other words, if you want the greatest scope of action and flexibility [in your animal welfare operations and advocacy], in some cases you may be better off not becoming a registered charity” under Canadian law, he said, in reference to sections of the guidance that outline limitations for animal welfare charities on their political activities and expenditures.
Blumberg commended the CRA and its Charities Directorate for continuing with an open consultation process and counselled that charities should appreciate that this is still being done, since many other governmental departments have ceased this process altogether.
That said, he echoed Waller’s position on how the agency was limited in changing the law and is in fact only trying to clarify its position on existing common law relating to charitable animal welfare activities.
“It is the Federal Department of Finance and the courts that make the law and CRA’s role is reviewing the law and enforcing the Income Tax Act and charity law,” he said. “This guidance does not create law — it is only an attempt to synthesize in an accessible way what the law is — ultimately if there is a dispute it is the courts that decide what the law is.”
Perhaps most importantly, Blumberg notes that those wishing to influence how the CRA words their guidance would do well to use the carrot and not the stick and keep in mind the wide spectrum of animal welfare charities while doing so.
“It is helpful to provide critique or criticism of the proposed guidance, but it is far more helpful to provide potential solutions,” he said. “If you do not like the way that the CRA has dealt with a concept within a proposed guidance, try providing alternative text that is consistent with legislation and case law and that CRA could use. Also don’t forget that parts you feel are helpful should also be commented on, as there may be different interest groups requesting a change to the parts you like. It is also helpful to think about the position of the regulator — it is not just regulating your charity or the few charities that you are involved with, but any charity that claims it is interested in the area of animal welfare.”
The canary in the coalmine
While the current consultation process on animal welfare charitable registration wraps up, Blumberg cautioned that the CRA announced last November that later in 2011 or early in 2012, it will embark on a similar process with its forthcoming “Charitable Purposes and Activities for Protecting the Environment.”
While not intended to downplay or to minimize the importance of animal welfare charitable activities and this current proposed guideline, Blumberg suggests that this round of consultations is a good time for charities involved in the environment — of which the protection of animal habitats and the question of saving species from extinction, among others, come into play — to understand how best to influence the CRA. Because if animal welfare is a big issue, and it is, then certainly regulations around charities involved in “the environment” will cause at least an equal amount of debate.
On this Blumberg has the last word.
“It may be a good idea for some groups to be involved with this [animal welfare] consultation to understand the process, the public policy issues, the various different stakeholders and to be prepared when the proposed environmental guidance is being consulted on.”
Andy Levy-Ajzenkopf is president of WordLaunch professional?writing services in Toronto.?He can be reached at andy@wordlaunch.com.
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