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The Canadian Revenue Agency headquarters. Photo by Dennis Gruending

A fragile democracy

CRA audits charitable groups it says are politically driven

By Dennis Gruending

The Canada Revenue Agency (CRA) is auditing at least a dozen environmental, poverty reduction and human rights organizations, and it can only be described as a thinly disguised attack by the Conservatives against groups that have dared to oppose government policies. That's because those groups could lose their charitable status and the ability to issue tax receipts to donors, forcing them to shut down altogether.   



The known list of audits concentrates upon organizations with a predominantly environmental focus. They include the David Suzuki Foundation, Tides Canada, The Pembina Foundation, Equiterre and the Ecology Action Centre. Other groups being audited deal mainly with human rights, poverty reduction and equality: Amnesty International Canada, PEN Canada, the Canadian Centre for Policy Alternatives and KAIROS, the inter-church group that issues its charitable tax receipts through the United Church of Canada.  



By law, charities are allowed to use only a maximum of 10 percent of their resources for political activity or advocacy if it's not partisan. For many years, that was 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 slashed the CRA’s budget by $250 million over three years, forcing the layoff of hundreds of auditors. 



Finance Minister Joe Oliver warned about the “radical agenda” of environmental groups, and former Environment Minister Peter Kent said the groups were “laundering” offshore funds to promote foreign interests. These comments arose in the context of opposition to the proposed Keystone XL pipeline into the U.S. and the Northern Gateway pipeline from Alberta to the British Columbia coast.    



Of course, everyone in government denies that there is any political motive in the recent spate of audits. Nonetheless, 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, saying that the positions that charities take on various issues was not a “triggering factor."



What's more, the CRA has fielded complaints against audited environmental organizations from a group called Ethical Oil, which describes itself as defending oil sands development. Ethical Oil was founded by Alykhan Velshi, who had previously worked 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. On the other hand, environmental groups claim that Ethical Oil is funded by the oil and gas industry to undermine their work. CBC News even tried repeatedly — and without success — to have Ethical Oil reveal the sources of its funding.

As a result of the government’s heavy-handed tactics against groups who disagree with some of its policies, an “advocacy chill" has been created, according to critics. The strategy is to stifle healthy debate in Canada. And that diminishes our fragile democracy.     


Author's photo
Dennis Gruending is an Ottawa-based author, blogger and a former Member of Parliament. His work will appear on the second and fourth Thursday of the month. His Pulpit and Politics blog can be found at www.dennisgruending.ca.
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