Ontario Court Allows Increased Political Activity By Charities

In an important decision released on July 16, 2018, Justice E.M. Morgan of the Ontario Superior Court of Justice held that the provision of the Income Tax Act (“ITA”) which restricted a charity’s “political activities” to a maximum of ten per cent of its resources were unconstitutional because it offended the charity’s right of freedom of expression contained in the Canadian Charter of Rights and Freedoms (“Charter”).  As a result, Justice Morgan ordered the Canada Revenue Agency (“CRA”) to immediately cease interpreting and enforcing the impugned section of the ITA in that manner.  In doing so, Justice Morgan effectively ended CRA’s “political activities” audits of Canadian charities and opened the door for charities to engage in much more non-partisan political activity.

In this case, (Canada Without Poverty v. AG Canada, 2018 ONSC4147), CRA had threatened to revoke the charitable status of Canada Without Poverty (“CWP”) on the basis that the charity was offside the maximum 10 per cent rule concerning its political activities.  CWP argued that the ITA’s distinction between “charitable activities” and “political activities” was artificial and that almost all of its work could be labelled political activity in the sense that public advocacy for policy change was fundamental to its charitable purpose of poverty relief. 

ITA Prohibits “Political Activities” By Charities

Section 149.1(6.2) of the ITA defines the extent to which a registered charity can devote its resources to political activities and provides that where a charity devotes substantially all of its resources to charitable activities, it can only devote ten per cent of such resources to political activities, provided that the political activities are “ancillary and incidental” to its charitable activities and the political activities do not include the direct or indirect support or opposition to any political party or candidate for public office. 

The CRA has the power to revoke a charity status if it determined that the charity carried on more than the allowed ten per cent of its activities as political activities as opposed to charitable activities.  As a matter of interpretation, the CRA divided political activities into two general types – submissions directly to government and public advocacy.  In doing so, the CRA acknowledged that there could be policy and advocacy components to charitable activities.  In this respect, political activities and charitable activities are not always treated as distinct. 

Section Violates Guarantee of Freedom of Expression

Canada Without Poverty challenged the overall distinction between charitable activities and political activities that were embodied in the ITA and challenged the CRA rule of interpretation enforcement limiting political activity to ten per cent of its resources.  It argued that there was no valid distinction between political expression and (with the exception of partisan political involvement) and charitable activities and so the distinction in the ITA was redundant violated the guarantee of freedom of expression under section 2(b) of the Charter .  CWP argued that the infringements could not be justified under section 1 of the Charter. 

Justice Morgan agreed.  He held that there is no widely agreed upon definition of what is political.  Certainly there was no definition of political activities in the ITA.  Virtually all of Canada Without Poverty’s activities are communicative or expressive and in that sense “political”.  Justice Morgan wondered whether one could “coherently distinguish between political activities and charitable activities or for that matter any other kind of activities”.

CWP argued that public advocacy for policy change was fundamental to its charitable purpose of poverty relief.  Without this component its charitable activities could not accomplish their purpose.  CWP’s approach to relieving poverty is one that strives for the full civic engagement of people living in poverty.  Its purpose is to relieve poverty by sharing ideas with its constituency.  Relying on various international studies on poverty relief, CWP placed its resources and efforts behind civic engagement and public dialogue with the goal of bringing about legislative policy change for the effective relief of poverty.  Justice Morgan held that while this approach may be in keeping with contemporary activism in the field, it was out of step with ITA and the CRA policy statement on interpretation and enforcement of the ITA.  Canada Without Poverty argued that the CRA’s ten per cent rule should no longer be applied because there was no cogent distinction between non-partisan political activities and charitable activities and therefore no reason for political activities to be ancillary or incidental to charitable activities.    

Justice Morgan found that even the Minister of National Revenue in a consultation report agreed with many of the positions taken by CWP.  The consultation panel had recognized that a key principle with respect to charitable activities is that public advocacy and charitable works go hand in hand in a modern democracy and are seen as an essential part of the democratic process.  

Canada Without Poverty challenged the sections of the ITA as infringing its right to freedom of expression.  Justice Morgan held that it would be difficult to express the importance of freedom of expression as a Charter right any higher than the Supreme Court of Canada has put it, “fundamental – because in a free, pluralistic and democratic society we prize a diversity of ideas and opinions for their inherent value both to the community and to the individual”.   Justice Morgan held that there was no doubt that the activity in which the charity wished to engage, i.e. public advocacy of policy change, is within the guarantee of freedom of expression.  CWP argued that non-partisan political advocacy is an accepted charitable activity under the ITA.  The arbitrary ceiling of ten per cent of the organization’s resources restricted the charity’s expressive conduct.  It was the ten per cent restriction that was the target of CWP’s complaint not the status itself. 

Justice Morgan reviewed the evidence.  According to affidavit evidence adduced by CWP, its activities that could be seen as political encompassed far more than ten per cent of its efforts and resources.  It argued that the application of the impugned sections of the ITA imposed restrictions on all expressive activity whose goal was entirely wrapped up with communicating to the public that a law or policy decision at any level of government should be changed or retained for the purpose of relieving poverty.  This ten per cent restriction was fundamentally at odds with the charity achieving its charitable purpose because virtually everything the charity did was “political”.  The fact that a parliament allowed political activity, but the restriction was arbitrarily limited to ten per cent, infringed the charity’s freedom of expression rights.  CWP adduced evidence that it would not be able to function absent its charitable status.

Justice Morgan held that as a registered charity, Canada Without Poverty had a right to effective freedom of expression, i.e. the ability to engage in unimpaired public policy advocacy towards its charitable purpose.  The burden imposed by the sections of the ITA and by the policy adopted by CRA in enforcing that section runs counter to that right.  Accordingly, CWP’s right to freedom of expression under section 2(b) of the Charter was thereby infringed. 

Prohibition Can Not Be Justified Under Section 1 of Charter

Justice Morgan then looked at whether the impugned sections of the ITA could be saved because they were justifiable under section 1 of the Charter. 

Having found that the section of the ITA violated section 2(b) of the Charter so that it burdens CWP’s pursuit of public policy advocacy, it was necessary to turn to section 1 of the Charter.   At that point the burden shifted to the Attorney General to establish that the infringement was reasonable and justified in a free and democratic society. 

The analysis follows the Oakes test (Supreme Court of Canada case – R. v. Oakes).  In full, the test considers whether the legislative objective is pressing and substantial, whether the means chosen by the legislature is rationally connected to the objective, whether the legislation minimally impairs the right of free expression, and whether it is proportional considering the deleterious and salutary effects on the right.  All these tests must be addressed in sequence.  The failure of government to pass any one of the hurdles results in the conclusion that the infringement of the Charter is diversified. 

Justice Morgan held that the first question to arise under Oakes is whether “the state’s action under challenge has good ends”.   In considering the answer to that question, Justice Morgan looked at the right that was being infringed.  He quoted former Chief Justice McLachlin in saying that, “It is difficult to image a guaranteed right more important to a democratic society than freedom of expression…it seems that the rights enshrined in section 2(b) should therefore only be restricted in the clearest of circumstances.”   

Justice Morgan rejected the Attorney General’s submission that the ITA section was a permissive one, i.e. it permitted a charitable organization to devote substantially all, rather than all of its resources to charitable activities.  He held that it was obvious that rather than being permissive the section was prohibitive in that while it permitted ten per cent of an organization’s resources to be devoted to public policy advocacy, it prohibited the remaining 90 per cent of the resources from being devoted to public policy advocacy. 

Seen that way, the objective of the section of the ITA was to limit political expression, i.e.  keep it to a small percentage of the organization’s time, effort and resources.  He held that the government had offered no rationale for the ten per cent ceiling or not answered the question as to why parliament had not opened registered charity status to organizations pursuing political purposes but had limited political speech in furtherance of accepted charitable purposes.  He held that there was an artificial distinction made in the sections between charitable activity and non-partisan political activity and that having not established a pressing and substantial objective, the government’s case had not passed the first hurdle of Oakes.  Accordingly, there was no justification for the infringement of the charity’s right to freedom of expression under section 2(b) of the Charter.

Justice Morgan ordered and declared that:

1. CRA cease interpreting and enforcing the section of the ITA that limited ten per cent of a charity’s resources to political activities;

2. the phrase “charitable activities” used in the ITA be read to include political activities without quantum limitation in furtherance of the organization’s charitable purposes;

3. there be a declaration that the impugned sections of the ITA are of no further force and effect; and

4. the exclusion from charitable activities of partisan political activities remained in force.

Regards,

Blair

Blair

Supreme Court Okays Extradition of Alleged Honour Killers to India

India v. Badesha, 2017 SCC 44

 

On June 9, 2000, the body of Jaswinder Kaur Sidhu was discovered in a village in the Indian State of Punjab.  It is the theory of the Indian government that she was the victim of an honour killing arranged by her uncle, Surgit Singh Badesha (“Badesha”) and her mother, Malkit Kaur Sidhu (“Sidhu”).  Both Badesha and Sidhu are Canadian citizens and live in Canada.  India sought the extradition of Badesha and Sidhu for the offence of conspiracy to commit murder.  The Minister of Justice (“Minister”) ordered their surrenders after receiving assurances from India regarding their treatment if incarcerated, including health, safety and consular access, and after determining in accordance with the relevant provisions of the Extradition Act, that their surrenders would not be unjust or oppressive.  A majority of the British Columbia Court of Appeal concluded that the Minister’s orders were unreasonable and set them aside.

 

On appeal to the Supreme Court of Canada, in a 9 – 0 decision, the court restored the Minister’s surrender orders and allowed the appeal.   

 

The judgment of the court was delivered by Justice Moldaver. 

 

Justice Moldaver wrote: 

 

The Minister’s surrender orders are subject to review on a standard of reasonableness.  In this case, it was reasonable for the Minister to conclude that, on the basis of the assurances he had received from India, there was no substantial risk of torture or mistreatment of Badesha and Sidhu that would offend the principles of fundamental justice protected by s. 7 of the Canadian Charter of Rights and Freedoms, and that their surrenders were not otherwise unjust or oppressive. 

 

Where a person sought for extradition faces a substantial risk of torture or mistreatment in the receiving state, their surrender will violate the principles of fundamental justice and the Minister must refuse surrender under s. 44(1)(a) of the Extradition Act.  Where there is no substantial risk of torture or mistreatment and the surrender is Charter compliant, the Minister must nonetheless refuse the surrender if he is satisfied that, in all of the circumstances, it would be otherwise unjust or oppressive.  In this regard, the Minister may take into account the circumstances alleged to make the surrender inconsistent with the Charter, the seriousness of the alleged offence and the importance of Canada meeting its international obligations. 

 

In assessing whether there is a substantial risk of torture or mistreatment, diplomatic assurances regarding the treatment of the person may be taken into account by the Minister.  Where the Minister has determined that such a risk exists and that assurances are therefore needed, the reviewing court must consider whether the Minister has reasonably concluded that, based on the assurances provided, there is no substantial risk.  However, diplomatic assurances need not eliminate any possibility of torture or mistreatment; they must simply form a reasonable basis for the Minister’s finding that there is no substantial risk of torture or mistreatment.  The reliability of diplomatic assurances depends on the circumstances of the particular case and involves the consider of multiple factors.

 

In this case, the Minister was satisfied that, based on the assurances he received from India regarding their treatment, Badesha and Sidhu would not face a substantial risk of torture or mistreatment.  The Minister took into account relevant factors in assessing the reliability of the assurances, which formed a reasonable basis for the Minister’s conclusion that their surrenders would not violate the principles of fundamental justice.  The inquiry for the reviewing court is not whether there is no possibility of torture or mistreatment, but whether it was reasonable for the Minister to conclude that there was no substantial risk of torture or mistreatment. Given the circumstances, the Minister’s decision to order the surrenders of Badesha  and Sidhu fell within a range of reasonable outcomes.

Regards,

Blair

Supreme Court to Pot Users: No Need To Smoke Your Medicine

The Supreme Court of Canada has ruled that users of medical marihuana need not “smoke their medicine” but rather can get access to the drug in other forms.  In the case of R. v. Smith, 2015 SCC 34, the court ruled that under the Controlled Drugs and Substances Act (“Act”), a medical access regime that permits access to only dried marihuana unjustifiably violates the guarantee of life, liberty and security of a person contrary to section 7 of the Canadian Charter of Rights and Freedoms (“Charter”). 

 

The Act prohibits the possession, production and distribution of cannabis, its active compounds and its derivatives.  However, in recognition of the fact that controlled substances may have beneficial uses, the Act empowers the government to create exemptions by regulation for medical, scientific or industrial purposes.  The Marihuana Medical Access Regulations created such an exemption for people who can demonstrate a medical need for cannabis.  Applicants are required to provide a declaration from a medical practitioner certifying that conventional treatments were ineffective or medically inappropriate for treatment of their medical condition.  Once they had met all regulatory requirements patients were legally authorized to possess dried marihuana, defined as “harvested marihuana that has been subjected to any drying process”.

 

The regulations were replaced in 2013 with new regulations, but the situation remained unchanged – for medical marihuana patients the exemptions from the offence was still confined to dried marihuana. 

 

In this case, the accused, Owen Smith worked for an entity called the Cannabis Buyers Club of Canada located on Vancouver Island.  The club sold marihuana and cannabis derivative products to its members.  It sold dried marihuana for smoking but also edible and topical cannabis products – cookies, gel capsules, rubbing oil, topical patches, butters and lip balms.  It also provided members with recipe books for how to make products by extracting the active compounds from dried marihuana.

 

Responding to a complaint about the smell of pot, police raided Mr. Smith’s apartment and charged him with possession of THC for the purpose of trafficking contrary to the Act and with possession of cannabis contrary to the Act.  

 

At trial, the judge held that the prohibition on non-dried forms of medical marihuana unjustifiably infringed section 7 of the Charter.  A majority of the British Columbia Court of Appeal dismissed the Crown’s appeal.  The matter was further appealed to the Supreme Court of Canada.

 

The judgment of the seven member court was delivered by “the court”.  The court dismissed the appeal.  It held that the prohibition on possession of non-dried forms of medical marihuana limited the section 7 Charter right to liberty of the person in two ways:  (1)  the prohibition deprived Smith as well as medical marihuana users of their liberty by imposing a threat of imprisonment or conviction under the Act;  and (2)  it limited the liberty of medical users by foreclosing reasonable medical choices through the threat of criminal prosecution.  The court ruled that by forcing a person to choose between a legal but inadequate treatment (smoking) and an illegal but more effective one, the law also infringed security of the person. 

 

The court held that the limits in the regulations were contrary to the principles of fundamental justice because they were arbitrary.  The effects of the prohibition contradicted the objective of protecting health and safety. 

 

The evidence presented at trial amply supported the trial judge’s conclusions that inhaling marihuana can present health risks and that it is less effective for some conditions than administration of cannabis derivatives.   In other words, there was no connection between the prohibition of non-dried forms of medical marihuana and the health and safety of the patients who qualified for legal access to it.   

 

The expert evidence, along with the anecdotal evidence from the medical marihuana patients who testified did more than establish a subjective preference for oral or topical treatment forms.  The evidence demonstrated that the decision to use non-dried forms of marihuana for treatment of some serious health conditions was medically reasonable.  To put it another way, there were cases where alternative forms of cannabis will be “reasonably required” for the treatment of serious illnesses.  In those circumstances, the criminalization of access to the treatment infringed the liberty and the security of the person.

 

In this case, the objective of the prohibition frustrated the requirement under section 1 of the Charter that the limit on the right be rationally connected to a pressing objective.  The court found that it was not and therefore the infringement of section 7 was not justified under section 1 of the Charter.

 

Regards,

 

Blair

Supreme Court Denies Aboriginal Accused's Right to Representative Jury

The Supreme Court of Canada has recently tackled ( and in my view, wrongly decided) the issue of representativeness of Aboriginal people on Canadian juries.  In the case of R. v. Kokopenace, 2015 SCC 28, the appellant, Clifford Kokopenace, was an Aboriginal Canadian from the Grassy Narrows First Nations Reserve in the District of Kenora, Ontario.  He was charged with second degree murder for stabbing his friend to death in a fight.  He was tried by a judge and jury in 2008, acquitted of murder but convicted of manslaughter.  Prior to his sentencing, Kokopenace’s lawyer learned that there may have been problems with including Aboriginal on-reserve residents on the jury roll for the District of Kenora which raised questions about the representativeness of the jury in his case.  The issue was raised for the first time on appeal to the Ontario Court of Appeal.

 

Mr. Kokopenace argued at the Court of Appeal that because his jury was chosen from a jury roll that did not adequately ensure that Aboriginal on-reserve residents were included, his rights under sections 11(d), 11(f) and 15 of the Charter of Rights and Freedoms (the “Charter”) were violated. 

 

Section 11(d) of the Charter provides that any person charged with an offence has the right... to be presumed innocent until proven guilty according to law in a fair and public hearing by an independent and impartial tribunal. 

 

Section 11(f) of the Charter provides any person charged with an offence has the right…except in the case of  an offence under military law tried before a military tribunal, to the benefit of trial by jury where the maximum punishment for the offence is imprisonment for 5 years or a more severe punishment. 

 

Section 15 of the Charter is the “equality rights” sections that provides that at 15(1) every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability. 

 

After reviewing the fresh evidence that was introduced on the appeal regarding the efforts that Ontario had made in preparing the jury rolls for the District of Kenora, two out of the three judges of the Ontario Court of Appeal held that Mr. Kokopenace’s section 11(d) and 11(f) rights had been violated and ordered a new trial on that basis.  The dissenting judge held that Ontario had made reasonable efforts to include Aboriginal on-reserve residents on the jury roll and would have dismissed the appeal.  All three judges rejected Mr. Kokopenace’s section 15 claims.

 

On appeal to the Supreme Court of Canada before a seven member court, the Crown was successful in having the Supreme Court overturn the decision of the Ontario Court of Appeal.   Below are the somewhat lengthy and complex reasoning of the court.  The majority decision was written by Justice Moldaver.

 

Justice Moldaver reviewed in detail the jury selection process in the District of Kenora.  He referred to the Ontario Juries Act which used municipal assessment lists obtained from Municipal Property Assessment Corporation (“MPAC”).  However, MPAC data does not capture individuals who reside on First Nations Reserves.  For that reason, the Juries Act provides a separate process for including on-reserve residents (calling them Indian reserves).  The aim of both sections is that each municipality or reserve be sent the number of jury notices that is approximately proportionate to that municipality's or reserve’s percentage of the total population in the judicial district. 

 

Staff in the Court Services Division (“CSD”) are responsible for virtually the entire process of selecting on-reserve individuals for the jury roll.  Ontario’s Ministry of the Attorney General has provided CSD staff with guidance on the process to follow in doing so.  The guidelines provided encouraged staff to attempt to obtain the best lists of on-reserve residents available. 

 

The problem was that the District of Kenora contains a large number of reserves which are associated with approximately 46 different First Nations.  The on-reserve adult population makes up between 21 – 32 per cent of the adult population in the district, however, the response rate from on-reserve residents to jury questionnaires was below 10 per cent. 

 

There had been a significant decline in the rates of response to jury notices from on-reserve residents in the District of Kenora over the years.  In 1993, the return rate for completed jury questionnaires was approximately 33 per cent for on-reserve residents (compared to about 70 per cent for off-reserve communities). 

 

Many of the Aboriginal communities in the District of Kenora are remote and are accessible only by air.  Individuals typically do not have mailboxes at their place of residence.  Some have access to a community mailbox or have an individual box in the post office.  For others, mail is held at the post office until they retrieve it.  When jury notices are sent to on-reserve residents, they are sent by “general delivery”.  Mail delivered in this manner is sent to the community post office but not to individual or community postal boxes.  The CSD relies on postal clerks with local knowledge of the residents of the community in order to ensure that these notices are properly delivered. 

 

There was, not surprisingly, much confusion in the District of Kenora and in 2007 the rate of return for on-reserve residents was approximately 10 per cent compared to an off-reserve response rate of 56 per cent.  Many of the jury notices were returned by the post offices as undeliverable. 

 

Ultimately, only 10 per cent of the questionnaires sent to on-reserve residents were returned and only 5.7 per cent of on-reserve residents who returned the questionnaires were eligible to serve as jurors.  Mr. Kokopenace’s jury was selected from a jury panel of 175 jurors, 8 of who were on-reserve residents.  No on-reserve residents were selected for Mr. Kokopenace’s jury. 

 

The Ontario Court of Appeal delivered three sets of reasons.  Justices LaForme and Goudge held in Mr. Kokopenace’s favour.  Justice Rouleau held there was no Charter violation.

 

Since 2008, Ontario has expanded its efforts to include on-reserve residents in the jury selection process.  In 2011, for example, Ontario appointed former Supreme Court Justice Frank Iacobucci as an independent reviewer to study the issue of the under-representation of Aboriginal on-reserve residents on juries and to make recommendations for resolving the problem.  Justice Iacobucci's report was not released until 2013.  The report revealed that the problem is multi-faceted and extends well beyond the difficulty of obtaining accurate source lists.  It explains that the problem is linked to the long history of Aboriginal estrangement from the justice system and the mistrust of that system that has resulted.  Ontario has since begun implementing some of the report’s recommendations. 

 

The majority of the Court of Appeal emphasised that the analysis of Ontario’s efforts to increase Aboriginal on-reserve representativeness must be guided by both the honour of the Crown and the principles in the Supreme Court case of R. v. Gladue.  Justices LaForme and Goudge held that Ontario was required to consider the estrangement of Aboriginal peoples from the justice system and to work with First Nations governments to create a solution to the problem.  It was unreasonable for Ontario to delegate such responsibilities to a junior public servant in the CSD. 

 

The majority also concluded that Ontario had improperly focused its attention on obtaining updated lists and was required to investigate the causes of the problem and to actively encourage responses from on-reserve residents.  Its failure to do so meant that it had not made reasonable efforts to provide a fair opportunity for the inclusion of Aboriginal on-reserve residents. 

 

In dissent, Justice Rouleau found that Ontario’s efforts were reasonable in light of what was known at the time.  In other words, at the time relevant to the appeal (before the Iacobucci report) everyone was under the impression that the low response rates were caused by outdated lists. 

 

The Supreme Court of Canada - Justices Rothstein, Moldaver, Wagner and Gascon, with partially concurring reasons written by Justice Karakatsanis agreed with the dissenting judge of the Ontario Court of Appeal.  It held that representativeness is an important feature of our jury system but its meaning is circumscribed.  What is required is a representative cross-section of society, honestly and fairly chosen.  Representativeness focuses on the process used to compile a jury roll, not its ultimate composition.  

 

The court held that to determine if the state has met its obligation in that respect, the question was whether it had provided a fair opportunity for a broad cross-section of society to participate in the jury process.  To do so, the state must make reasonable efforts to:

 

1. compile the jury roll using random selection from lists that draw from a broad cross-section of society; and
2. deliver jury notices to those who have been randomly selected.   

 

When this process is followed, the jury roll with be representative and an accused’s Charter right to a representative jury will be respected.

 

As to the alleged Charter violations, the court held that the role of representativeness under section 11(d) is limited to its effect on independence and impartiality.  Section 11(d) will be violated if the process used to compile the jury roll raises an appearance of bias at the systemic level, i.e. deliberate exclusion of a particular group or efforts in compiling the jury roll that are so deficient as to create an appearance of impartiality.  The court held that that was not the case in respect of Mr. Kokopenace’s jury. 

 

The role of representativeness in section 11(f) is broader.  It not only promotes impartiality, it legitimizes the jury’s role as the “conscious of the community” and promotes public trust in the criminal justice system.  If there is a question of unintentional exclusion, it is the quality of the state’s efforts in compiling the jury roll that will determine whether an accused’s right to a representative jury has been respected.  If the state makes reasonable efforts, but part of the population is excluded because it declines to participate (for whatever reason), the court held that the state will nonetheless have met its constitutional obligation. 

 

The majority held that representativeness is not about targeting particular groups for inclusion on the jury roll.  The province was therefore not required to address systemic problems contributing to the reluctance of Aboriginal on-reserve residents to participate in the jury process.  In other words, the accused’s individual right is not the appropriate mechanism for repairing the broader relationship between societal groups and the criminal justice system. 

 

As written by Justice Moldaver, the Supreme Court held that there was no right to a jury roll of a particular composition nor to one that proportionately represents all the diverse groups in Canadian society. 

 

The majority held that the province had met its representativeness obligation in the case and dismissed the appeal. 

Regards,

Blair