CRA audits of charities politically driven

Canada Revenue Agency headquarters in Ottawa
Canada Revenue Agency headquarters in Ottawa

The Canada Revenue Agency (CRA) is auditing at least a dozen environmental, poverty reduction and human rights organizations in what is a thinly-disguised attack by the Conservatives against groups that have dared to oppose government policies. Those groups, most of them small to medium-sized organizations, have to endure the stress and expense involved in the audits. They could lose their charitable status and the ability to issue tax receipts to their donors, and that might force them to shut down.

The known list of audits concentrates upon organizations with a predominantly environmental focus. They include: David Suzuki Foundation, Tides Canada, West Coast Environmental Law, Pembina Foundation Environmental Defence, Equiterre and the Ecology Action Centre. Add to that other groups concerned mainly with human rights, poverty reduction and equality. They include: Amnesty International Canada, the writers’ organization PEN Canada, the Canadian Centre for Policy Alternatives (a group supported by labour unions) and KAIROS, an inter-church group that issues its charitable tax receipts through the United Church of Canada.

Rules on advocacy

A maximum of 10 per cent of their resources for political activity or advocacy, and it cannot for partisan activity. For many years, that has been understood to mean that a group can oppose a government policy but not advocate partisan choices in elections.

The government, however, has sent unmistakable signals that it wants a crackdown. Recent federal budgets have provided the CRA with an additional $13 million in special funding to undertake such audits at a time when the government was slashing the CRA’s budget by $250 million over three years, forcing the layoff of hundreds of auditors. Jim Flaherty, the former finance minister, issued a warning to charities in 2013. “If I were an environmental charity using federal money, tax-receipted money for political purposes, I would be cautious.” Others went considerably farther in their criticism and warnings. Joe Oliver, the natural resources minister, warned about the “radical agenda” of environmental groups, and former minister Peter Kent said the groups were “laundering” offshore funds to promote foreign interests.

Garbled messages

These comments arose in the context of opposition to the Keystone XL pipeline that would transport Alberta bitumen to U.S. gulf coast refineries. In addition, some groups have criticized Enbridge’s proposed Northern Gateway pipeline from Alberta to the British Columbia coast. Everyone in government denies that there is any political motive in the recent spate of audits, but the CRA has provided garbled messages. A spokesperson initially said that “political leanings” were a factor in deciding upon audits. She later recanted that comment and said the positions that charities take on various issues was not a “triggering factor” in audits.

‘Ethical Oil’

What has been admitted, and it is disturbing, is that the CRA has fielded complaints against environmental organizations now being audited from a group called Ethical Oil. The group describes itself as defending oil sands development. It was founded by Alykhan Velshi, who had worked earlier for Conservative ministers Jason Kenney and John Baird. After his stint with Ethical Oil, Velshi was named director of issues management in the Prime Minister’s Office. Environmental groups claim that Ethical Oil is funded by the oil and gas industry to try to undermine their work. CBC News reports tried repeatedly and without success to have Ethical Oil reveal the sources of its funding.

Heavy handed tactics

The government’s heavy-handed tactics against groups that disagree with some of its policies creates what environmental and other organizations describe as an “advocacy chill.” The here is to stifle healthy debate in Canada and that diminishes our fragile democracy.

This piece was published, in slightly different form, in a United Church Observer blog on August 14, 2014.  

8 thoughts on “CRA audits of charities politically driven

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  1. I so wish you could either collaborate with another organization or simply suggest an immediate action following your excellent blog items, Dennis. More mileage faster. We have an ebola of our own in this wonderful country of ours. m


  2. Probably not all of the organizations being targeted get much in the way of individual donations, & not all donors care too much about or even use the tax credit, but an even bigger impact of being deregistered is losing status as a “qualified donee” — meaning they’re ineligible for grants from FOUNDATIONS.


  3. Another example of the Tories being Merchants of Venom. The idea taken from an article by Lawrence Martin in the Globe and Mail on August 12,2014.


  4. What is particularly galling, is that conservative organizations are not the subject of audit. It appears that the Fraser Institute receives funding from US foundations and donors. It claims that it is an educational organization, but it can often be found advocating for private enterprise solutions to public policy issues. Were the government’s activities not yet another effort to attack its critics, it would be investigating the Fraser Institute but it is only the activities of left leaning organizations which the CRA has been told to investigate.


    1. Thanks for the comment Allan. You are quite right about the Fraser institute. It is registered as a charity and receives money from big oil and other corporate patrons, including the infamous American Koch brothers, who are also backers of the Tea Party. The Institute was involved in publishing a book featuring climate change deniers. One wonders, then, whether they might fit the description of Ministers Oliver and Kent as having a “radical agenda” and “laundering offshore funds.” The Institute frequently rails against public health care, which historically has had the support of all political parties in Canada. According to the CRA terms of reference being applied to the audits of progressive organizations, why would the Fraser Institute’s advocating against a program long accepted by the Canadian parliament not be considered political advocacy, and make then the target of an audit?


      1. And remind me who Soros provides funding to? How about that billionaire who funds every anti-oil sands group going. For everydollar that the evil Koch brothers provide, the billionaires on the left provide much more.


      2. Thanks for your comment Maureen. I expect George Soros would be surprised, perhaps even amused, to be described as being on the left. But your are right about the Koch brothers being evil.


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