A new report from the Broadbent Institute is raising questions once again about the political activity audits conducted by the Canada Revenue Agency (CRA) and whether or not the agency has unfairly focused on charities with missions that don’t align with the interests of the federal government.

The report finds nine out of 10 prominent right-wing charities claimed zero per cent of their budgets were used for political activity in the most recent fiscal year. The final filing for the tenth organization has yet to be submitted or made public by the CRA.

The report is an update of a similar October 2014 investigation, which discovered all 10 charitable organizations reported zero political activities between 2011 and 2013. That investigation led the Broadbent Institute to call for an independent inquiry into the CRA’s audits to ensure charities under investigation aren’t the target of political attack.

The new report, which reviews the 2014 filings of the 10 organizations in light of their public activities, renews calls for an independent inquiry “to ensure transparency and fairness in the CRA’s decision-making.”

Under CRA rules, charities are allowed to spend up to 10 per cent of the organization’s time and money on "political activities," which the CRA defines as any activity that seeks to change, oppose or retain laws or policies.

According to the Broadbent Institute, many of the public activities undertaken by the organizations in question, which include the Fraser Institute and Focus on the Family, appear to meet the definition of political activity.

For example, in September 2014, Marco Navarro-Genie, president of the Atlantic Institute for Market Studies published an opinion piece in the Chronicle Herald that discouraged governments from banning fracking, saying the move “closes opportunities for greater innovation…and the development of more employment.”

“Prohibition is the wrong impulse,” he wrote.

The report also cites the example of Macdonald-Laurier Institute managing director Brian Lee Crowley, who in July 2014 argued the federal government should “assert its power to sweep away barriers to trade created by the provinces” in the Globe and Mail.

Other groups investigated in the Broadbent report are: C.D.Howe Institute, the Montreal Economic Institute, Canadian Constitution Foundation, Energy Probe Research Foundation, and Frontier Centre for Public Policy.

“The examples cited are only some of the many possible examples of political activity in which these groups engaged,” Jonathan Sas, Broadbent Institute director of research and author of the report, writes. “The juxtaposition calls into question how these charities interpret the restrictions on engaging in 'political activity' and why, if these groups are engaging in political activity, as defined by the CRA, the agency continues to allow them to report zero per cent.”

So far, at least 52 charities have been the target of the CRA’s $13.4 million audit program, which began in 2012.

Environmental Defence, the David Suzuki Foundation, Equiterre, Pen Canada, Canada Without Poverty, Canadian Centre for Policy Alternatives and the Ecology Action Centre have all been subjected to investigation and audit since the program began.

In March 2015, the University of Victoria Environmental Law Centre released a report, prepared for DeSmog Canada, that called for significant reform to Canada’s charitable tax law.

The report found current rules around the issue of political activity are confusing and create an “intolerable state of uncertainty.”

The report called on the federal government to clarify rules about what constitutes political activity and to loosen the 10 per cent rule on allowable limits.

The Broadbent Institute report confirms the broad discrepancies in how charities view reporting requirements around political activities.

“This report makes clear that the CRA rules around political activity are interpreted, to put it charitably, quite differently by many right-leaning charities,” Sas concluded in the report.

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Canada Without Poverty, an Ottawa-based charity, is arguing the sweeping audits of charities by the Canada Revenue Agency (CRA) are a violation of human rights before the UN Human Rights Committee in Geneva this week.

Harriett McLachlan, president of Canada Without Poverty, told the CBC she will argue the contentious audits violate Canada’s international commitments.

The Canada Revenue Agency has targeted 60 Canadian charities in a $13.4 million audit program to determine if the groups are violating rules that limit their spending on political activities to 10 per cent of resources.

McLachlan told the CBC the political activity rules silence groups like Canada Without Poverty that advocate for increased government accountability. Charities in Canada are prevented from engaging in any partisan activity.

"If we want to write a petition, or be part of some kind of gathering, a protest, there's a fear there that we are stepping over the bounds," she told the CBC.

"There's a potential of a gag being put over my mouth."

In March the University of Victoria Environmental Law Centre released a report that called for broad reforms to Canada’s charitable law.

Rules around political activity, considered by the CRA to be any activity that seeks to change, opposed or retain laws or policies, have created an “intolerable state of uncertainty” for charities, the report states.

“This has created a confused and anxious charitable sector and detracts from them carrying out their important work,” Calvin Sandborn, legal director of the Environmental Law Centre, said.

The report recommends Canada modernize laws to both establish clearer political activity rules and to allow for more advocacy work for groups working to protect the public interest. Many European countries place no restrictions on the political activities of charities.

In early March, 18 prominent Canadian charities including Oxfam Canada, the Canadian Parks and Wilderness Society, the David Suzuki Foundation and Equiterre, wrote a letter to Canada’s political parties asking them for platforms committed to enhancing freedom for charities wishing to engage in public policy matters.

The groups argued in their letter that “without years of organizing effort by Canadian charities, Canada would not have dealt with issues such as addressing acid rain, promoting safe driving, reducing smoking and banning toxic chemicals.”

Recently federal Liberal leader Justin Trudeau announced his party platform will include new rules to protect charities from political intimidation.

The UN Human Rights Committee selects a number of countries for review each year and this is the first time the Harper government will face the panel of independent experts.

Kairos and Amnesty International Canada will join Canada Without Poverty, raising concerns around Canada’s troubling failure to address the crisis of missing and murdered indigenous women as well as the country’s legacy of child abuse in indigenous residential schools.

"There should be space for people to hold the government accountable on these issues, human-rights issues," McLacnlan told the CBC. "Poverty should not exist in a wealthy country like Canada."

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The release of a University of Victoria study calling for updates to Canadian charitable law created quite a stir last week.

The study, prepared for DeSmog Canada, was covered by the Toronto Star, Vancouver Sun, Victoria Times Colonist, Canadian Press, Macleans, The Tyee, Yahoo! News and CFAX.

The report called for the Canada Revenue Agency (CRA) to clarify rules around “political activities” — defined as any activity that seeks to change, oppose or retain laws or policies — and to provide a more generous limit on allowable policy advocacy in line with other common law jurisdictions such as Australia and New Zealand. It also called for the creation of a politically independent charities commission to remove the potential for political interference in audits.

The findings were raised in the House of Commons by Victoria NDP MP Murray Rankin, who stated the report “analyzes the alarming lack of clarity in the rules governing political activities for charities.”

Tim Gray, executive director of Environmental Defence, said the recommendations put “what’s going on in Canada in the context of what’s going on in other common law and western countries … It gives a sense of how far Canada is behind on these things.”

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Environmental Defence was one of 18 Canadian charities that called on the country’s politicians to enhance the ability for charities to engage in public policy debates earlier this month.

“The lack of a level playing field between business and citizens around public policy is particularly evident in the debate around climate and tar sands,” Gray told DeSmog Canada. “There’s massive spending going on by the oil sector to influence public policy and every dollar they spend on lobbyists in Ottawa or on television ads, they deduct from their gross income and therefore reduce the income tax that they pay to build roads and run hospitals.”[view:in_this_series=block_1]

Citizens who donate money to a charity only receive a 17 per cent tax benefit and charities are limited to spending 10 per cent of their resources on policy advocacy work, described as “political activity” by the CRA.

Fifity-two charities have been audited for their “political activities” under a $13.4 million audit program launched by the federal government in the 2012 budget.

“It’s already unfair and the rhetoric that’s out there right now is to say that that level of unfairness should be enhanced,” Gray said. “It would be a huge move to favouring involvement by corporations in public policy at the expense of citizens.”

Gray also said citizens are confused by the current talk around “political activities,” which many assume to mean “partisan activities,” which charities are banned from taking part in.

Bill Schaper, director of public policy and community engagement for Imagine Canada — which advocates for the charitable sector — said his group has been hearing more and more about re-thinking how we define charity over the last couple of years.

“It’s something that’s been percolating,” Schaper told DeSmog Canada.

But he also noted that there are risks associated with opening up charitable law for major changes. National Post columnist Andrew Coyne, for instance, has argued that we should get rid of charitable status altogether.

“As much as the grey zones are causing issues right now, sometimes grey zones are better than too much clarity because you might not like the clarity you get,” Schaper said.  

He noted that the charitable sector can do a better job of educating itself in terms of what constitutes “political activity” and said there would need to be much more discussion before Imagine Canada would push for specific changes to the law.

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A report released today by the University of Victoria’s Environmental Law Centre calls for sweeping reform of Canadian charitable law in line with other jurisdictions such as the U.S., Australia, New Zealand and England.

Current rules around “political activity” — defined by the Canada Revenue Agency (CRA) as any activity that seeks to change, oppose or retain laws or policies — are confusing and create an “intolerable state of uncertainty,” the report says.

“This has created a confused and anxious charitable sector and detracts from them carrying out their important work,” Calvin Sandborn, legal director of the Environmental Law Centre, said.

The report — prepared for DeSmog Canada — comes as 52 charities are being targeted in a $13.4 million audit program launched by the federal government in 2012 to determine whether any are violating a rule that limits spending on political activities to 10 per cent of resources. Those charities include Environmental Defence, the David Suzuki Foundation, Canada Without Poverty, Ecology Action Centre and Equiterre.

Australia and New Zealand, also common law jurisdictions, have modernized their laws in recent years to allow charities to conduct more policy advocacy in carrying out their missions.

The report, Tax Audits of Environmental Groups: The Pressing Need for Law Reform, calls for Canada to establish clearer rules about what constitutes “political activity” and provide a more generous limit on allowable “political activity.”

Canada’s Charities Law Urgently Needs Update: New @ELC_UVic report http://t.co/EUj828Va94 #UpdateCharitiesLaw #cdnpoli

— DeSmog Canada (@DeSmogCanada) March 25, 2015

“U.S. charity regulation is superior to current Canadian law because it is less vague and more respectful of the value that charities bring to public policy debates,” the report states.

Many European countries place no limit at all on a charity’s political activities.

Earlier this month, 18 Canadian charities called on the country’s politicians to enhance the ability for charities to engage in public policy debates.

“Our society has evolved and our legislation hasn’t,” said Eric Hebert Daly, executive director of the Canadian Parks and Wilderness Society, a group that signed on to the letter.

The new University of Victoria report calls on Canada to modernize the definition of what qualifies as charitable to rectify instances such as the CRA’s ruling that Oxfam can not have a charitable goal of “prevention of poverty.”

“In modern society the law should recognize that a poverty-relief organization can often relieve poverty more effectively by lobbying for affordable housing laws than by operating a soup kitchen,” the report says.

In October 2014, the Broadbent Institute released a report, which raised questions about whether the recent audits have been targeted at charities critical of the Harper government. The report said several right-leaning charities are reporting zero “political” activity while engaging in work that appears to meet the CRA’s definition.

There is a direct structural chain of command from the Minister of National Revenue to the charities directorate (which audits charities), the University of Victoria report notes before calling for the removal of any potential for political interference by establishing a politically independent Charities Commission like the one in England and Wales.

“Regardless of whether the audits are targeted or not, an obvious way to address this issue would be to reform the law to eliminate the potential for political control over CRA audits,” the report reads.  “This has been done in other jurisdictions.”

“The perception that audits may be targeted at charities critical of government policies creates a chilling effect,” the report says — adding that with such vague rules, charities can end up spending an “inordinate amount of energy and resources protecting themselves from an audit.”

The report also notes the contrasting treatment of business and charities under the Income Tax Act:

Since businesses can deduct advertising expenses from their income, they can lobby the public through advertising without any imposed statutory restrictions. A recent example has been the omnipresence of the multimillion-dollar [Enbridge] Northern Gateway radio, television, internet and newspaper ad campaign favouring the project. All of these advertisements would presumably be tax deductible and therefore subsidized by general taxpayers.

In contrast to companies’ tax-deductible political advertising campaigns, charities must carefully ensure that all activities of a political nature are kept within the 10 per cent limit. This contrasting treatment of business and charities under the Income Tax Act has the effect of encouraging businesses to take political action in support of commercial and private interests — while hindering the counterbalancing efforts of charities working to protect public interests.

The report provides the example of cigarette companies fighting smoking laws to defend profits while cancer societies advocated smoking laws for the public good (to prevent cancer). The “political activities” of the cigarette companies would have been tax deductible, whereas the charities advocating tougher smoking laws would have had to follow the ten per cent rule.

“This impairment of charities’ pursuit of the public interest has been magnified by the recent spate of audits and their repercussions on the charitable sector,” the report says.

Policy advocacy by Canadian charities has resulted in measures addressing acid rain, regulations on smoking, laws against drunk driving and regulations on toxic chemicals.

Canadian charities and non-profit organizations account for more than eight per cent of Canada’s GDP. As of the end of 2013, there were more than 86,000 registered charities in Canada.

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Eighteen Canadian charities have written a letter to the country’s political parties asking them for platform commitments to enhance the ability for charities to engage in public policy debates.

The charities argue in their letter that “without years of organizing effort by Canadian charities, Canada would not have dealt with issues such as addressing acid rain, promoting safe driving, reducing smoking and banning toxic chemicals.”

The chief concern lies around the current regulation of so-called “political activities” — defined by the Canada Revenue Agency as any activity that seeks to change, oppose or retain laws or policies. Charities are currently limited to spending ten per cent of their resources on these “political activities.”

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Groups that signed onto the letter include Oxfam Canada, the Canadian Parks and Wilderness Society, Amnesty International Canada, David Suzuki Foundation and Equiterre.

“Our society has evolved and our legislation hasn’t,” Eric Hebert Daly, executive director of the Canadian Parks and Wilderness Society, told DeSmog Canada.

Charities have changed from being primarily service providers — doing things like running soup kitchens and helping the disabled — to contributing direct knowledge of social issues to public policy debates, Hebert Daly argued.

“It seems ridiculous to not let the experts be the ones to speak out on issues that they’re experts in,” he said. “If you’re a corporation, you can write off 100 per cent of your spending on political activity and have no restrictions whatsoever, but if you’re a charity you can only write off 10 per cent. There’s a real discrepancy there that doesn’t seem to make sense.”

Right now, the letter the charities sent to federal politicians would qualify as “political activity” and would need to be accounted for under the ten per cent rule.

“When they hear political activity, most people think ‘supporting a political party’ but there’s a huge gap between creating public policy and supporting a political party,” Hebert Daly said.

Charities are banned from taking part in “partisan activity” (supporting or opposing a candidate or political party).

Several of the charities that signed onto the letter have been audited since 2012, when the federal government dedicated $13.4 million to the Canada Revenue Agency to audit the political activities of charities.

The groups argue in their letter that the current regulations are confusing:

“A confusing regulatory environment leaves many would-be advocates unclear how proactively charities can advocate for policy change. The existing interpretation of the Income Tax Act appears to be open to widely divergent interpretations of what constitutes charitable activity … The result is a chill where charities feel that their efforts are being discouraged, subjected to rhetorical attacks or harsh or arbitrary review.”

Hebert Daly says all political parties should be interested in reforming the law so there is no question about arbitrary application of the rules or silencing of dissent.

“The fact that the interpretation itself can change at any moment is part of the problem,” he said. “It would simply take a bureaucrat three seconds to change their mind at CRA and we’d be way above the 10 per cent.”

The groups are asking for an open consultation process involving a broad range of charities and the public to help develop new regulations for the sector.

“The debate on this has really just started,” Hebert Daly said. “I think you need to have an open and honest conversation in the public view about what makes sense in terms of modernizing the Income Tax Act.”

Photo: Dave King via Flickr

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This article is re-published with permission from mikedesouza.com

As some of you may know, I’ll be starting a new role in January 2015 as an investigative resources correspondent for Reuters.

Getting access to records about government decisions and policies has long played a key role in the work of many journalists around the world. It will also be a key element for me in the weeks, months and years to come.

So to end off 2014, here are a few examples of some of my recent experiences with government efforts to either release or hide information.

Canada’s information watchdog has noted that the Supreme Court of Canada recognizes access to information as a quasi-constitutional right of all Canadians.

Obtaining access to information is an extension of freedom of expression since it allows the population to be informed and speak about government policies and decisions on how these governments spend public money.

Deleted records at the Canada Revenue Agency

The Canada Revenue Agency took more than a day to answer some basic questions about its decision to delete some instant messaging records of its employees.

You can find my report on this case over here in the Toronto Star.

The CRA declined to answer some of my questions directly, including whether it had verified whether any of the information deleted was of “business value.” By law, all Canadian government organizations are required to preserve records of “business value.”

When I asked some simple follow up questions – including whether any of its senior officials or media officers ever communicate with the minister or with Conservative political staffers in her office using text messages – the CRA called to complain that it wasn’t reasonable for me to ask these questions and expect them to respond within a couple of hours.

The Canada Revenue Agency instructs bureaucrats to delete logs and disable future logging of instant messages of its employees.

More than a week after I first asked questions and requested an interview with its commissioner, the CRA confirmed it was logging Internet activity of its employees – including on their mobile devices – in case it needed this information to review potential cases of misconduct, but that it wasn’t logging their text messages. Why does it keep one set of logs and not the other?

The CRA declined to answer this question.

You can find some of the emails detailing the CRA instructions to delete records of instant messages over here.

Foreign Affairs: This reporter’s question is “undeserving of a response”

Last summer, Canada’s Department of Foreign Affairs, Trade and Development wasn’t providing a lot of information about its relationship with the American Legislative Exchange Council. The council, also known as ALEC, is a secretive organization. It benefits from charitable status based on its mandate to “educate” U.S. state legislators by connecting them with corporations to draft model pieces of legislation.

A series of high-tech firms including Google left ALEC in recent months because it continued to host discussions of people without scientific credentials that cast doubt about peer-reviewed research showing the link between human activity and climate change.

“I will suggest we decline the two requested interviews.” – John Babcock, spokesman for Canadian Department of Foreign Affairs, Trade and Development.

Canadian diplomats have had some exchanges with members of ALEC as part of the federal government’s efforts to promote the oilsands and TransCanada’s Keystone XL pipeline. But senior diplomats declined to grant interviews, which led me to write a series of detailed questions to the department in writing.

The department sent me some general and vague statements about who Canadian diplomats were meeting and what they were discussing.

In response to questions asking for details about diplomatic discussions with lobbyists on energy issues, a Canadian government spokesman recommended evasive answers before getting feedback from diplomats about whether they had the answers. This spokesman told his colleagues in internal e-mails that he believed I was “attempting to make specious connections.” He also said one of my questions was “undeserving of a response.”

He also suggested declining the interview requests, without even knowing the answers to the questions raised.

One Canadian diplomat also sent an e-mail to other officials in the department asking them to tell the journalist that she was “not available” for an interview.

You can find these internal e-mails here.

Transport Canada’s vacant rail safety positions

Over a span of several weeks, Transport Canada declined to answer a series of basic questions about critical positions that are vacant in its rail safety and dangerous goods divisions – vacancies that appear to date back to at least 2009.

It confirmed it had vacant oversight and inspector positions within its dangerous goods and rail safety divisions but it declined to identify them or even confirm whether it knew exactly how many of these positions were vacant.

After Reuters reported on internal records detailing these vacancies, the federal New Democrats attempted to raise the issue in Parliament.

In response to questions from NDP deputy leader Megan Leslie in the House of Commons, the parliamentary secretary to the transport minister, Jeff Watson, said that Prime Minister Stephen Harper’s government wouldn’t apologize for cutting “waste.”

“We make no apologies for reducing back office expenses while putting the resources where they belong on front-line safety,” Watson said.

The government declined to share details of what it had cut until it was forced to answer these questions through Canada’s Access to Information Act, which requires it to release public records upon request within 30 days to any Canadian who pays the $5 fee.

The records, received about 40 days after the request, confirm what Reuters had reported about vacant engineering and oversight positions. It also revealed these surprising details:

– All six senior positions in the Transportation of Dangerous Goods secretariat, including the manager, are vacant

– Five out of seven positions for scientists who review emergency response plans of companies transporting dangerous cargo are vacant at Transport Canada’s headquarters.

– Five out of seven positions at the headquarters are vacant for dangerous goods inspectors under chief enforcement

– Five out of 15 positions responsible for risk evaluation are vacant, including the chief of risk evaluation, and two accident analysts.

Liberal transportation critic David McGuinty said in an interview that the department appeared to be hiding information.

“Instead of coming clean and saying, we have a capacity problem right now, they won't do it,” said McGuinty in an interview. “They’ve got some explaining to do.”

You can find these records and the information that Transport Canada previously declined to release over here.

Or scroll down below to see the e-mail records from both Foreign Affairs; the charts of vacant and filled Transport Canada positions; and the e-mails from the CRA sending instructions from the office of the agency’s commissioner and chief executive officer for the deletion of internal records.

In terms of transparency, a public servant — who tipped me off about one of these stories — told me that all ministers in the Canadian government are transparent … because you can look right through them and see the prime minister’s office in the background.

Photo: Light Brigading via Flickr

CRA Delete Request by mikedesouza

DFATD underserving by mikedesouza

Dangerous Goods Chart Transport Canada by mikedesouza

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Good public policy improves the lives of Canadians, and contributions from civil society groups can significantly improve the public policy that governments make. Despite the benefits of working well together — to both sides, and to Canadians overall — relationships between the sector and governments are not without challenges.

Note: the term "civil society groups" includes both nonprofits, which have no limits on their political activities, and charities, which have well-defined limits on their “political activities,” as described below.

In the last three years, many within the charitable sector have become concerned about Canada Revenue Agency audits focused on political activities, but few realize that controversy over the regulation of charities dates back decades in our country.

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The current controversy revolves around 52 charites being audited in a $13.4 million program launched by the federal government in 2012 to determine whether any are violating a rule that limits spending on political activities to 10 per cent of resources. Some of those charities, including Environmental Defence, the David Suzuki Foundation, Canada Without Poverty, Ecology Action Centre and Equiterre, have gone public with the fact they are undergoing audits.

On February 6, 2014, CBC reporter Evan Solomon published a story and aired a segment on the television program Power and Politics about these audits. The news story raised the question of whether environmental charities critical of the government are being unfairly targeted for their “political activities” as defined by Canada Revenue Agency.

In October 2014, the Broadbent Institute further interrogated that question by releasing a report called Stephen Harper’s CRA: Selective audits, “political” activity, and right-leaning charities.

The Broadbent report examined publicly available CRA tax filings of 10 “right-wing” charities and cross-referenced these with their publicly available work. In each case, the charities had reported they had conducted no political activity between 2011 and 2013.

The Broadbent Institute’s report, which includes the Fraser Institute, the Atlantic Institute for Market Studies and Focus on the Family, provides examples of activity for each of the charities that the report’s authors argue meet the CRA’s definition of “political activity.” It’s unknown whether any of these charities are currently under audit.

Flashback to 1978: Trudeau Government Accused of “Muzzling Charities”

Controversy around charities undertaking “political activities” is anything but new. Thirty-six years ago, in February of 1978, the Trudeau government issued Information Circular 78-3. It warned charities that any political objects or activities would be understood as contravening the Income Tax Act, and could result in the revocation of an organization’s charitable status. The document took a broad view on what constituted political activities, and clarified that none of a charity’s resources could be devoted to them.

Charities, the federal opposition parties and the press reacted strongly to Information Circular 78-3, arguing it contravened the right of free speech, unduly constrained charities in their pursuit of improving society and ran against the democratic values of Canadians. 

An editorial in the Toronto Star from April 18, 1978, captures the tone of the response, calling it “outrageous” for the Trudeau government to “muzzle charities” with guidelines that “take the narrow view that while charities can directly aid the needy, for example, they can’t advocate changes in public policy that might benefit the needy [because] this is considered political activity.”

The Trudeau government defended its actions by claiming the information circular wasn’t a shift in policy, but rather only a reflection of the imperfect case law according to which purposes and activities of charities must be interpreted. Under ongoing pressure, the Trudeau government eventually suspended the circular. 

In 1987, the Mulroney government released Information Circular 87-1, which advanced the now familiar approach of allowing charities to undertake ancillary and incidental political activities that are not partisan and limited to expenditures of 10 per cent of a charity’s resources. The 1987 policy statement also required that charities report on both exempt and political activities in their annual information returns.

The mid-1990s to early 2000s saw an unprecedented amount of activity oriented to improving the relationship between the federal government and the charitable sector. It culminated in June of 2000, when the Chrétien government announced the Voluntary Sector Initiative, a five-year joint initiative between the sector and the government set up to improve their working relationship. Among the many outcomes of the initiative was a Code of Good Practice on Policy Dialogue (2002), which makes explicit why and how the federal government and the sector should work together on public policy.

In 2003, based in large measure on the work described above, and after open consultation with the sector, the Charities Directorate of Canada Revenue Agency updated its guidance on political activities with the release of CPS-022, which is still in effect today. It is substantially the same as Information Circular 87-1, but is more explicit and makes greater use of examples than previous guidance.

A close reading of the guidance reveals that Canada Revenue Agency permits more latitude in terms of political activities than many in the sector appear to believe (see: 10 Ways Charities Have Improved Canadians' Daily Lives). It would seem that at least some of the purported “advocacy chill” often cited in the sector flows from charities themselves not fully understanding the range of activities permitted by the regulator.

While some of the “chill” may be caused by charities’ own lack of understanding of the law, there’s no doubt part of it can also be attributed to the perception of a crackdown on the environmental sector.

While a robust regulator that conducts regular audits is an essential element of a well-functioning charitable sector, being audited is a stressful, time-consuming exercise that distracts from a charity fulfilling its mission. And when you have a government that has openly accused Canadian environmental groups of  “money laundering,” it’s little wonder environmental charities are feeling a little on edge at the moment. Only time will tell how the current audits will go down in the history books.

Obviously, the challenges presented by imperfect case law and an arcane regulatory regime around charities persist today. The Charities Directorate has recently launched a series of tools to help charities understand the rules. And the Pemsel Case Foundation was recently founded with a mission to foster better knowledge and understanding of charity law and regulation by the Canadian public and voluntary sector organizations.

A number of funders, including Max Bell Foundation, have taken an active interest in supporting charities who do public policy advocacy. I would hope these initiatives and others like them will help warm Canadian charities to the idea of doing public policy advocacy — because the potential rewards for all of us are enormous.

This article originally appeared in The Philanthropist.

Photo: Obert Madondo via Flickr

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Vivian Krause has spent years scrutinizing how Canadian environmental groups are funded, claiming she's just asking "fair questions."

But as the blogger-turned-newspaper-columnist has run rampant with her conspiracy theory that American charitable foundations' support of Canadian environmental groups is nefarious, she has continually avoided seeking a fair answer.

If Krause were seeking a fair answer, she'd quickly learn that both investment dollars and philanthropic dollars cross borders all the time. There isn’t anything special or surprising about environmental groups receiving funding from U.S. foundations that share their goals — especially when the increasingly global nature of environmental challenges, particularly climate change, is taken into consideration.

Despite this common-sense answer, Krause’s strategy has effectively diverted attention away from genuine debate of environmental issues, while simultaneously undermining the important role environmental groups play in Canadian society.

Creating Diversions a Trademark of Oil Industry Strategy

This diversion strategy is a well-known tactic of the oil industry. A strategy document leaked yesterday details how one of the world’s most powerful PR firms, Edelman, advised TransCanada to undermine opponents to the Energy East pipeline.

Edelman recommended TransCanada apply pressure to opponents by “distracting them from their mission and causing them to redirect their resources.” To achieve that, Edelman advises TransCanada to work with “supportive third parties who can in turn put the pressure on, particularly when TransCanada can’t.”

Sound familiar?

In Vivian Krause's resume, she proudly takes credit for spawning a Senate inquiry and Canada Revenue Agency audit — distractions that forced environmental groups to spend time defending themselves, rather than doing their important work as watchdogs and advocates for environmental protection.

While Krause has been busy maligning the funding of Canadian environmental groups, very little attention has been paid to where Krause gets her bread buttered.

Krause Receives 90% of Income From Resource Industries

Krause frequently claims her research is independent (PDF) and that her work is unaffiliated with any industry — yet she has admitted that since 2012, more than 90 per cent of her income has come from oil, gas and mining interests through honorariums and speaking fees.

Krause has been paid as much as $10,000 to speak to energy executives. While she may not be directly employed by the fossil fuel industry, her work certainly aligns with that industry’s interests.

Groups paying Krause speaker’s fees included the Canadian Association of Petroleum Producers, the Canadian Energy Pipeline Association, the Atlas Economic Research Foundation, the Association for Mineral Exploration and the Vancouver Board of Trade.

Large speaking fees are increasingly being used as a handy way to support the work of industry allies without directly employing them.

To see just how contentious speaking fees can be, take a gander at the recent Rex Murphy or Peter Mansbridge controversies. CBC ended up adjusting its policy, requiring hosts to disclose their speaking fees.

What Was Vivian Krause’s Argument Again?

So let’s get this straight: Krause, who has relied on speaking fees from the multinational resource sector for 90 per cent of her income for the past three years, argues that Canada’s environmental organizations are fronts for U.S. interests because they receive a portion of their funding from across the border?

Despite the spurious logic, Krause is still given a platform to spread her misleading information in the Postmedia chain of newspapers, including the Financial Post and The Province, as well as on Global News shows where she's a regular panelist on Unfiltered with Jill Krop.

While Krause may spin a mysterious tale, the answer is simple: philanthropic dollars crossing borders to support work on global issues is the norm. And Canadian charities are required to disclose all significant donations from foreign sources annually.

The Real Debate Canada Needs

The continued debate over the funding sources of the environmental community is simply a diversion tactic that favours the fossil fuel industry's desire to avoid having the real debate about Canada’s energy future.

The latest report from the Intergovernmental Panel on Climate Change urges nations to phase out fossil fuels immediately to avoid the worst impacts of global warming.

The report puts responsibility squarely on the shoulders of our elected leaders, saying they can “either put policies in place to achieve this essential shift, or they can spend the rest of their careers dealing with climate disaster after climate disaster.”

But Canada won’t meet its 2020 international climate target, according to Environment Commissioner Julie Gelfand.

“The federal government does not have an overall plan that maps out how Canada will achieve this target. Canadians have not been given the details about which regulations will be developed, when, nor what greenhouse gas reductions will be expected,” Gelfand wrote in a report last month.

Now that China and the U.S. have signed a deal agreeing to cut emissions, Canada is left with even fewer excuses not to act.

Meantime, the federal government’s mandate to advance an energy superpower agenda marches forth, resulting in controversy across the country — from the Kinder Morgan fiasco on Burnaby Mountain, to the First Nations legal battle against Enbridge Northern Gateway, to the Athabasca Chipewyan and Beaver Lake Cree First Nations’ fight to prevent oilsands expansion on their territory, to efforts to ban fracking in Nova Scotia.

These efforts are not the outcome of foreign conspiracy — they’re the outcome of a lack of any sensible national conversation about how to develop our natural resources while meeting our international climate change commitments.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

The below video originally appeared on the Toronto Star.

Birdwatchers – the paparazzi of the natural world – are subverting our democracy according to the Canada Revenue Agency – the overbearing mother of the financial world.

The Kitchener-Waterloo Field Naturalists, a registered charity, recently wrote a letter to federal cabinet members complaining about pesticides linked to dying bees. Shortly after, they got a letter from CRA warning them to “refrain from undertaking any partisan activities.” Activities like their dogmatic anti-bee-death manifesto.

It’s part of a recent crackdown on charities for political activities. CRA rules state that to get tax-free status a charity must be non-partisan. But what charity isn’t partisan? They all support something. We don’t say “Okay, we’ve heard from the ice-bucket challenge guys, but let’s give the pro-ALS folks a chance to weigh in on this… and their buckets of lava.”

And if CRA is so concerned with partisan charities, why aren’t they auditing The Fraser Institute? A “charitable” right-wing think tank whose heroic mission is to protect private profits from abuse by the poor, and protect climate change deniers from reality, and whose donors include Exxon, the tobacco industry and the Koch brothers. They tried getting a donation from Hans Gruber and someone had to tell them that was just the bad guy in Die Hard that’s not a real guy.

And if we’re really serious about people avoiding taxes, what are we doing about the billions we lose each year to offshore tax havens? It turns out, not much. Documents leaked early this year show that over 3000 full-time positions will be cut from the CRA budget in the next four years, including auditors.

So if the birdwatchers really want to keep the CRA off their back, they don’t need to stop partisan activities. They just need to stop being not rich. 

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

A new report from the Broadbent Institute raises fresh questions about whether Canada Revenue Agency (CRA) audits are being used as a politicized tool to pressure critics of the federal government. 

The report, Stephen Harper’s CRA: Selective audits, “political” activity, and right-leaning charities, says several right-leaning charities are reporting zero “political” activity while engaging in work that appears to meet the CRA’s definition.

“We know charities that have been critical of policies of the Harper government are being audited by the Canada Revenue Agency. With mounting evidence suggesting bias in auditing decisions, we need to find out what’s going on here,” said Rick Smith, executive director of Broadbent Institute, a non-partisan organization founded by former NDP Leader Ed Broadbent.

Fifty-two charities are being targeted in a $13.4 million audit program launched by the federal government in 2012 to determine whether any are violating a rule that limits spending on political activities to 10 per cent of resources. Those charities include Environmental Defence, the David Suzuki Foundation, Canada Without Poverty, Ecology Action Centre and Equiterre.

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The Broadbent report examined publicly available CRA tax filings of 10 charities and cross-referenced these with their publicly available work. In each case, the charities had reported that they had conducted no political activity between 2011 and 2013.

The Broadbent Institute’s review, which includes the Fraser Institute, the Atlantic Institute for Market Studies and Focus on the Family, provides examples of activity for each of the charities that appear to meet the CRA’s definition of “political.”

For example, on Oct. 22, 2012, the Fraser Institute released a report calling for the B.C. government to lift its moratorium on offshore oil and gas exploration, which appears to fall under the CRA’s guideline on what constitutes political activity, which states an activity is political if “the intention of the activity is to incite, or organize to put pressure on, an elected representative or public official to retain, oppose, or change the law, policy, or decision of any level of government in Canada or a foreign country.”

The report raises fresh questions about the CRA’s selection process for determining which charities are targeted for political-activity audits.

Other groups scrutinized in the Broadbent report are: Macdonald-Laurier Institute, C.D. Howe Institute, the Montreal Economic Institute, Canadian Constitution Foundation, Energy Probe Research Foundation, Frontier Centre for Public Policy and Institute for Canadian Values.

It’s unknown whether any of these groups are currently under audit.

The Broadbent Institute is calling for the establishment of an independent inquiry to examine CRA processes to ensure transparency and fairness in its decision-making criteria around political-activity audits and interpretations of “political” activity, and to ensure such processes are not subject to political pressures or interference. 

“Political activity is a critical part of many charities’ work. Progressive or conservative, blunting the ability of civil society to advocate and to engage in debate and, occasionally, dissent should concern us all,” Smith said.

Photo: Obert Madondo via Flickr

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

B.C.'s Christy Clark government is proposing to overhaul the Societies Act, and they've distributed a snoozer of a White Paper to let you know all about it.

If you've dozed off already, WAKE UP, because there's a massive zinger quietly planted deep inside. You can do something about it — more on that at the end of this post. But unmentioned in any preamble or executive summary, Section 99 allows any person (including corporations) to take any registered society to court that they believe is acting contrary to the public interest — whatever that is.

Here it is:

Complaints by public

99 (1) A person whom the court considers to be an appropriate person to make an application under this section may apply to the court for an order under this section on the grounds that a society

(b) is carrying on activities that are detrimental to the public interest.

In other words, environmental non-profit groups better watch their step because they're in the cross-hairs. Premier Clark is handing the legal hammer to Enbridge, Kinder Morgan, ExxonMobil, Koch, Encana, Chevron, Sinopec, Suncor and the entire B.C. LNG sector to tie non-profits up in court for years.

Section 99 looks like Clark's close advisor Gwyn Morgan drafted it up during half-time at last year's Grey Cup. Not a single competent lawyer within the Ministry of Justice could say with a straight face that it's constitutional. The clear intent is to silence and intimidate Canadian conservation and environmental non-profits with the threat of litigation. And if mere threat doesn't work, this legislation enables the corporate sector to bludgeon them into lawsuit bankruptcy.

This proposal is one of the most ill-conceived and draconian initiatives to see the light of day in a modern democracy, and reveals the extent of Clark's captivity by the oil and gas lobby. (And one more reason B.C. political leaders should be prevented from funding their election campaigns at the Petroleum Club in Calgary).

But as policy, it's also breathtakingly stupid. As if B.C. doesn't already have the mother of all court backlogs to cope with, the Clark government now proposes to fill up the system with disgruntled parents taking out their beefs in court against a minor hockey association or local elementary school parent advisory council. It will be open season on abortion clinics, LGBTQ organizations and mosques. Don't think for a minute that won't happen.

The real backdrop, of course, is that the Harper government has been on a tear against environmentalists for years, muzzling our scientists and attempting to discredit Canadian environmental NGOs.

The government has spent millions in fruitless CRA revenge audits hunting for a wholly imaginary conspiracy involving Canadian environmental organizations and U.S. scientific and charitable foundations. This vendetta has cost both the charitable sector and public purse untold funds in accounting and legal fees, over nothing.

Agree or disagree with the environmental movement, its members are entitled, as are all of us, to contribute vigorously to public debate over resource development. No one in a free and democratic society should be silenced or censored by fear of government-sanctioned reprisal. But that is precisely the purpose of this legislation.

Christy Clark would do well to remember that Canada is a free nation — our constitution says so. British Columbians, including non-profits, are free to do what we want, express ourselves freely and associate with whomever we choose to, unless it's for an unlawful purpose.

If government wants to limit that freedom it must abide by the Charter of Rights, not force citizens to meet a vague test like "public interest," which doesn't mean the same thing to any two people in the province. That would be the same Charter of Rights that Justice Susan Griffin pounded the B.C. government with during the teachers' dispute.

This White Paper is open to comments by the public until the end of day Wednesday Oct. 15. E-mail yours to the Financial and Corporate Sector Policy Branch here: fcsp@gov.bc.ca

Photo: Chris Yakimov.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.