Tackling Systemic Racism and Colonialism in Canada’s Charities

The majority of Canadians will probably have never given much thought to Canada’s Income Tax Act, but in its current form, the legislation perpetuates colonial and racist approaches to charitable work.

Finally, there is a chance to change the way the charitable sector works in a foundational way.

Unless you are a political enthusiast or closely watch the charitable sector, you probably haven’t heard of Senator Ratna Omidvar’s Bill S-222, the Effective and Accountable Charities Act. However, this somewhat technical bill to amend the Income Tax Act has the potential to meaningfully improve how Canadian charities operate locally and internationally.

The bill is good for reasons of practicality and efficiency, but it is also important for access to justice. Namely, Bill S-222 seeks to eliminate mandated racist and colonial ways of engaging with communities.

The problem

Under the current version of the Income Tax Act, Canadian charities can only use money in two ways. Charities can conduct their own charitable activities, or they can transfer funds to qualified donees (typically other Canadian charities).

The original intention of the “own activities” limitation was to ensure that tax exemptions for charities are not abused by the wealthy and charities are held accountable for how they disburse funds.

As noted by several senators during debate on the second reading of the bill, including Senators Omidvar, Terry Mercer, and Don Plett, on its face this regime makes sense.

However, the CRA has interpreted “own activities” to mean that if a charity wishes to cooperate with a non-charity to conduct charitable activities, it must “direct and control the use of those resources.”

If you’ve spent time in the charitable sector, you are probably hearing alarm bells. As Omidvar put it, this kind of approach “is not a partnership. It is tantamount to a takeover.”

Not only do these words mandate an approach that is wildly out of step with current accepted practices in international development, which emphasize local control, but these words systemically exclude BIPOC organizations and mandate colonial approaches to charitable work.