Allow charities to spend more on advocacy and lobbying -- IMPACS Report.

VANCOUVER -- Canada's Income Tax Act should be amended to allow charities to use up to 100 per cent of their resources for non-partisan advocacy, says a report from the Institute for Media, Policy and Civil Society.

The Canada Customs and Revenue Agency currently forbids charities from using more than 10 per cent of their resources for "political activity", a restriction that the report says limits the voices of charities and the people they serve.

The view that the current restriction on advocacy by Canadian charities is an anachronism is not unanimous, however. Liberal MP John Bryden, author of Canada's Charities: A Call for Legislation, has called the IMPACS proposal "symptomatic of a $90-billion industry seized by self-interest and greed." Lifting the 10-per-cent rule would be a return to the "bad old days" of the 1980s when an incestuous relationship existed between government-funded charities and non-profits and government bureaucrats, he wrote in the Globe and Mail.

IMPACS and the Canadian Centre for Philanthropy undertook a cross-Canada consultation last summer and fall. They heard from more than 700 hundred people over 17 days.

Participants responded to a discussion paper that outlined five options for reform:

* amending the Income Tax Act to clearly identify prohibited activities, namely partisan politics, illegal activities and activities beyond the power of the organization;

* expanding the definition of education to include reasoned arguments on public policy issues;

* creating a new category of "registered interest organizations" that would be unrestricted in their ability to engage in political activities;

* creating an entirely new legislative definition of charity following an in-depth national debate;

* adopting the American model, which clearly defines allowable lobbying by charities and includes a formula for determining the percentage of resources that may be used for advocacy purposes.

The report, Let Charities Speak, recommends pursuing the first option, along with requiring organizations to report publicly on how much of their resources are used for advocacy.

It is in keeping with trends in other jurisdictions. The Scottish Charity Law Review Commission, for example, concluded last year that it is important for charities to participate in public debate and to campaign on particular issues related to their charitable purpose.

An Australian committee has recommended that charities be permitted to engage in advocacy so long as they do not engage in partisan politics and so long as advocacy is not the dominant activity. The Charity Commission of England and Wales took a similar position.

The IMPACS report calls the restrictions "an impediment to democracy where informed and unfettered debate is essential." In addition to allowing advocacy, it recommends that charitable organizations:

* develop an advocacy code of ethics;

* pursue a government process for creating a new legislated definition of "charity";

* support the creation of a Canadian Charity Commission or other monitoring body to oversee the administration of charities;

* formally request that the Auditor General of Canada conduct a "fairness audit" of the Charities Directorate of Canada Customs and Revenue Agency to ensure that current regulations are applied consistently.