Environmental and left-leaning charities can breath a sigh of relief now that Prime Minister Justin Trudeau has instructed Minister of National Revenue Diane Lebouthillier to modernize Canada’s archaic charity law and clarify rules around allowable “political activity.”

The ministry should “allow charities to do their work on behalf of Canadians free from political harassment,” Trudeau wrote in a ministerial mandate letter Friday, “with an understanding that charities make an important contribution to public debate and public policy.”

The new mandate signals a remarkable change in tone from the at times aggressive stance of the former government.

In 2012 the Harper government allocated $13.4 million to the Canada Revenue Agency for the audit of charities to determine if groups were in violation of rules that limit their spending on “political activity” to 10 per cent of resources. The program also instituted new reporting for charities receiving foreign funding.

The audit program was launched in the wake of former Natural Resource Minister Joe Oliver’s infamous open-letter in which he accused environmental organizations participating in the Northern Gateway pipeline hearings of being foreign-funded “radical groups” intent on “hijacking our regulatory system.”

Many environmental charities felt they were targeted by the investigation and said the sometimes multiple successive audits left them strapped for resources, intimidated and unable to carry out their mandates.

Environmental charities under audit included Equiterre, the David Suzuki Foundation, ForestEthics, Tides Canada, West Coast Environmental Law, the Pembina Foundation, the Sierra Club, the Ecology Action Centre and Environmental Defence.

Critics also pointed out that right-leaning charities that clearly engaged in political activity, such as the Fraser Institute and the C.D. Howe Institute, were spared from the audits even though their activity appeared to violate CRA rules.

A report prepared for DeSmog Canada and released by the University of Victoria Environmental Law Centre in March 2015 found Canada’s charitable laws lack clarity and create an “intolerable state of uncertainty” for active charities. The report called for sweeping reform of Canada’s charitable law to clarify what constitutes “political activity” and to allow for more generous limits on allowable “political activity.”

Calvin Sandborn, director of the law centre, said he is “thrilled by this reversal of policy.”

“Whether or not government was directing audits against charities, a dangerous chill had fallen on environmental charities. People were afraid to speak out, and that was bad for Canada,” Sandborn said. “Charities need to be free to speak out for law reform related to their charitable mission. Charitable advocacy helps society recognize and actually respond to the problems that charities address.”

He added the political activities of the Canadian Cancer Society resulted in tougher smoking laws for public places and the political work of Mothers Against Drunk Driving has saved lives by fighting for tougher drunk driving laws.

“If charities had continued to shy away from any political activity at all, public debate about how to solve society’s problems would have been seriously impoverished — as those with some of the best expertise on such problems would have remained silent,” Sandborn said.

"I think many people in the charitable sector will see this as a welcome development that the new government is keen to both take a little bit of the spotlight off charities and take a closer look at the regulatory environment for charities and not-for-profits,” Kathryn Chan, assistant professor of law and charitable law expert at the University of Victoria, told DeSmog Canada.

Chan added there is some lack of certainty as to whether the audits were politically motivated or not, but said in some ways it didn’t make a difference.

“There was certainly a perception of harassment and sometimes that can do damage on its own whether or not it’s true,” Chan said. “I think there’s need to address that no matter what the exact factual situation was.”

Image: Revenue Minister Diane Lebouthillier via Flickr

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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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You may be surprised to hear this, but the history of charitable case law in Canada involves a little-known story about war, political deception and a group of ‘United Brethren’ known as the Moravians. Really.

It should read like a Dan Brown novel.

Unfortunately, it’s not nearly that scintillating. Mostly, I’m sure, because the history of charitable law has been written by…well…lawyers.

But there is an interesting story of the protracted history of charitable law in our country and it reaches way back to Shakespearian times. That history continues to have a profound effect on the contemporary Canadian political landscape.

To make that loooooong story short, what you need to know is this: Canadian charity law is old and full of holes.

The Current State of Affairs For Canada’s Charities

Charities in Canada are strictly prevented from engaging in partisan activities (such as endorsing a political party), but they are allowed to participate in political activity (defined by the Canadian Revenue Agency as any activity that seeks to change, oppose or retain laws or policies) so long as that activity doesn’t take up more than 10 per cent of their resources. Such policy advocacy by Canada’s charities has resulted in laws against drunk driving, the regulation of smoking and the measures that eliminated acid rain.

The rest of a charity’s work must be technically charitable, and yet what, exactly, constitutes charity is a question for the ages.

And that’s a question that, at least in Canada, has never been sufficiently answered.

As a result, charities are left operating in this legal grey zone with no precise knowledge of how their activities will be seen in the eyes of the law or even how that law might be applied, and what the consequences of that law might be.

This uncertainty — on its own — would be enough to provoke a case of charity paralysis for most organizations.

But when coupled with a recent $13.4 million federal audit program of charities’ “political activities,” this legal uncertainty is enough to cripple some of Canada’s most respected charities, preventing them from carrying out their most basic mandate.

In March, a report on charitable law by the University of Victoria’s Environmental Law Centre stated Canada’s current rules around “political activity” are so confusing they create “an intolerable state of uncertainty.” The report — prepared for DeSmog Canada — called for sweeping reform of Canadian charitable law in line with other jurisdictions such as the U.S., Australia, New Zealand and England.

Charities: Mind the Gap

The law that governs charities — the Income Tax Act — “doesn’t define the term ‘charitable,’ ” Kathryn Chan, assistant professor of law and charitable law expert at the University of Victoria, told DeSmog Canada.

“The body of law upon which the courts and the Canada Revenue Agency have always relied on for determining who is charitable and who is not in this country is a body of case law that has a very long lineage and goes back at least to 17th century England,” she said.

Chan added that even with that history behind us there is sparse case law in Canada related specifically to charities “and so there are gaps.”

That means “the parameters around the kinds of things our charitable laws are based on are laws that were set in 17th and 18th century England and this arguably isn’t a very accurate reflection of our contemporary society.”

Modern-day concerns such as drunk driving, second-hand smoke or climate change just weren’t around hundreds of years ago when the first definition of ‘charity’ emerged in a British courtroom.

This leads to a situation in Canada where charities are forced to rely on the “discretion of the Canada Revenue Agency.”

But the agency “has very loose parameters within which to make decisions as to the charitable status or not of organizations,” Chan added.

“The less clear the law is, and the less clear the legislation is, the greater discretion you’re vesting in the administrative agency.”

“It gives rise to a lot of uncertainty for sure.“

Compounding the difficulty this uncertainty creates for organizations is the fact that charities aren’t often in a position to challenge the Canada Revenue Agency’s legal interpretation.

So, Chan said, “if we’re going to move things forward in the courts you need some champions.”

And that’s where the Pemsel Case Foundation comes in.

A Case to Be Made for Charities

The Pemsel Case Foundation — named after a pivotal 1891 judgment in England that made charities exempt from income tax (that’s where the Moravians come in) — has a mandate to clarify the law when it comes to Canadian charities, both inside and outside the courtroom, says executive director Peter Broder.

“There are actually a relatively small number of cases that are litigated in Canada and because of that, the opportunity to develop a robust intellectual analysis of what qualifies as charitable and what doesn’t is limited in comparison to other jurisdictions,” Broder said.

He added his foundation  — founded in 2010 — doesn’t argue whether a particular organization should be granted charitable status or not. Instead it is trying to develop a ‘charity test’ for the courts that can help determine when and where charitable status makes sense.

“The important thing — for the purposes of developing the structure of law in Canada — is that we use the right test and that the right considerations go into that test,” he said. “We are looking for an outcome that is rigorously argued as opposed to an outcome that is arbitrary.”

For example, Broder offered up the question of whether one amateur youth soccer organization might qualify for charitable status. He said the Crown expressed concern that introducing one group of this kind would result in all 21,000 other amateur soccer associations in Canada wanting charitable status.

But the cost or inconvenience of that consequence shouldn’t play a role in the decision for one soccer association, Broder said.   

Legally it should come down to whether another analogous group had previously been deemed charitable.

“We would argue that it’s not about the costs,” Broder said.

“Outside Canada, the fiscal consequences of a decision are not generally a significant consideration in determining the meaning of charity.”

“What we’re trying to do is to make sure that they use the appropriate test and apply it in the appropriate way.”

But, he adds, “We’re not the white knight.”

No Evidence Audits Are Politically Motivated: Broder

Broder characterizes the work of the Pemsel Case Foundation as “scholarly.” He said the goal of the organization isn’t to be oppositional, but to clarify the law.

With respect to critics who claim some of CRA’s recent political activities audits are‘politically motivated, Broder says he’s “agnostic.”

But he does say there is significant room for improvement within the law.

“If the law is clear and there is more certainty to the law — it is easier for the administrator and it is easier for the person who is trying to abide by the law,” he said. “If the law is loose and vague then the opportunity for it to be abused at an administrator’s discretion is greater, but just because it’s loose and vague does not mean there is administrative abuse.”

Canada Needs Fulsome Public Debate On Charities

Perhaps the most notable thing about Canada when it comes to charitable law, Chan said, is our lack of public debate.

“Where Canada is kind of unique is in the almost negligible amount of political debate — actual debate within the legislature or within the public — about what kinds of things should be charitable and what should not,” Chan said.

Ask an average person on the street about Canada’s charities, she said, and they won’t know a thing about them. For instance, they are unlikely to know that many of our universities and hospitals operate under the charity umbrella.

There are conversations to be had about the charitable sector in Canada and what service that sector should perform, Chan said. And for that, Canadians need more than the strategic litigation undertaken by the likes of the Pemsel Case Foundation.

“Canadians might want to have a say in determining what our charitable sector looks like: who’s in and who’s out and how it should be administered,” she said. “Ultimately I think that we need a broader political conversation about the way forward.”

Image Credit: David Garrick Between Tragedy and Comedy, BBC

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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. 

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A group of 421 academics are requesting the Canada Revenue Agency (CRA) end its audit of the Canadian Centre for Policy Alternatives (CCPA), a group that describes itself as “an independent, non-partisan research institute concerned with issues of social, economic and environmental justice.”

As the Canadian Press recently reported, an internal CRA document stated the audit was the result of the CCPA being “biased” and “one-sided.”

In a letter to revenue minister Kerry-Lynne Findlay the group states it is “perplexed at CRA’s decision to perform the audit…on the groups that [the CCPA] allegedly engages in politically partisan, biased and one-sided research activity.”

“The CCPA is an internationally-recognized and respected research centre, built on a solid tradition of critical analysis,” the letter states. “Indeed, the CCPA plays a vital role by supplying much needed reflection on a number of policies, which it has always done in a fair and unbiased way, and which respects the fundamental tools of sound research.”

The group also criticizes the CRA, suggesting that by undertaking the audit, the CRA “fails to understand the nature of what academic research is all about.”

Read the full text of the letter below.

The request comes at a time when public criticism of what is being called the “politically-motivated” audit of Canada’s environmental charities and groups critical of the Harper government is reaching a new level.

At least 52 charities are undergoing or will undergo audit from the CRA. The federal government committed $13.4 million to the investigation and audit of charities engaged in political activities or who receive funding from foreign sources.

Mario Seccareccia from the University of Ottawa told the National Post the academic community is frustrated with the current government’s hostility towards academic research.

“It’s an environment that has been rather stifling when it comes to intellectual work,” he said. “There’s a real malaise…They’ve been irritating a lot of people.”

The group of academics is requesting the government halt all political activity audits of think-tanks until a neutral and transparent process for selection is put in place.

Minister Findlay maintains the audits are conducted in a manner independent from political interference or ministerial oversight.

Louis-Philippe Rochon, economist at Laurentian University in Sudbury and organizer of the open letter told the National Post there was ample support for the letter.

“This was a powder keg waiting to happen,” he said, adding signees were eager to add their name to the letter.

“Mostly from the social sciences and humanities, but some from the sciences. We have Canada Research Chairs, heads of departments, younger faculty, more established faculty, and from almost every university in Canada,” he said.

“It hit a raw nerve amongst academics,” he said. “The idea that if we reach a conclusion other than the official doctrine of the government, our research is somehow biased and political.”

Recently researcher Gareth Kirkby, a former journalist and graduate student in the public communications program at Royal Roads University, found the CRA’s audits appear to target charities that lean in a different direction than the current federal government, especially those that work on issues related to the petroleum industry.

Kirkby told DeSmog Canada the CRA document listing the CCPA as “biased” and “one-sided” fits in line with his graduate research. “The government has created a 'funnel' that pushes CRA to audit certain kinds of charities,” he said.

“And those charities are overwhelmingly on the ‘progressive’ side of the political divide, with policy preferences that differ from those of the cabinet: environmental organizations working on energy issues, international development and human rights groups, and charities receiving significant funding from labour unions.” 

Kirkby noted it was “strange” that some charities have passed multiple audits in the past, but are now being told they are “breaking the political activity rules or that their official ‘purposes’ are suddenly unacceptable.”

“The Fraser Institute, the Macdonald-Laurier Institute, and the C.D. Howe Institute are the right-leaning equivalent of the CCPA, with policy preferences pretty much lined up with the current government,” Kirkby added, “and they are not being audited for their political activities.”

“Any fair observer can see that all four of these think-tanks have world-views that influence their research choices without meaning that the result is partisan and biased,” he said.

Text of the open letter:

Dear Minister Findlay,

Recently, we were informed through reports in a number of newspapers that the Canada Revenue Agency (CRA) has undertaken an audit of the Canadian Centre for Policy Alternatives (CCPA) on the grounds that it allegedly engages in politically partisan, biased and one-sided research activity.

While we understand the need to prevent abuses of the charitable status, we are rather perplexed at CRA’s decision to perform the audit on this basis. The CCPA is an internationally-recognized and respected research centre, built on a solid tradition of critical analysis. Indeed, the CCPA plays a vital role by supplying much needed reflection on a number of policies, which it has always done in a fair and unbiased way, and which respects the fundamental tools of sound research. They have produced much-needed research on many disparate topics, such as on income and wealth distribution, the hidden government support of the Canadian banking sector during the financial crisis, and an analysis of alternative federal fiscal policy implementation annually. Since these various research studies are academically all of very high quality, you can therefore imagine how this news took us by surprise.

By undertaking this audit, we feel that CRA fails to understand the nature of what academic research is all about. Research begins from a series of questions and observations, and, from there, it proceeds, following a set of guidelines, to infer possible answers. In this sense, it contests. All research in fact is critical, by its very definition: it tests hypotheses, seeks answers, and must be allowed to find these answers wherever it can.

But critical policy analysis does not equate with political activism, nor is it “biased” or “one-sided”, as CRA has claimed. Researchers explore specific questions of interest, and then present the results of their research. Reaching a conclusion is not the same as bias. To illustrate, a CCPA researcher explored the issue of what would be the appropriate exchange rate regime for Canada and then concluded that a floating exchange rate was desirable to alternative types of exchange rate mechanisms because the former allowed the public authorities to conduct independent macroeconomic policies. The fact that this conclusion turned out to be similar to the policy view of the Bank of Canada does not make the CCPA researcher any more political than if the researcher would have produced that same research independently within his/her respective university.

The CCPA is not a political organization, nor does it engage in political or partisan activities. The fact that it has criticized government policy on a number of issues does not make it a partisan organization promoting a narrow agenda. Rather, it is engaging in serious, unbiased academic research. It may reach a different set of conclusions from those of the government, but then, this is allowed in a free-thinking, democratic country. On the contrary, we would argue, that such dissent should be encouraged and not stifled by such actions of the CRA.

Indeed, if there is bias, the bias seems to be mostly in the CRA’s decision to audit the CCPA and apparently no other think tanks, whose policy conclusions are friendlier toward current government policies. We are not aware of any audits being launched regarding “bias” at conservative think tanks like the Fraser Institute; some have publicly confirmed that they are not being audited (including the Macdonald-Laurier Institute and the C.D. Howe Institute). We are therefore left with the conclusion that the decision to audit the CCPA is politically motivated to intimidate and silence its criticism of your government’s policies.

We therefore strongly urge the CRA to put a moratorium on its audits of think tanks, until such time as a truly neutral criteria and auditing process are implemented to ensure neutrality and fairness, and to ensure that the audit process does not silence dissenting voices. Periodic audit should be conducted in a fair, transparent, and even-handed fashion across all the various think-tanks that claim charitable status in Canada, with a focus on financial management and integrity (not on the content of the research being conducted). Why single out only one such research centre that happens to be more critical of government policy? Instead of trying to muzzle and impede sound and legitimate research, it is now time for you to try to promote more effectively the public good in the form of sound critical research for which Canadian researchers are respected internationally.

Image Credit: UK in Italy via Flickr

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Pen Canada, a Canadian charity that fights for freedom of expression and represents more than 1,000 writers and supports is the latest group identified for a political-activities audit by the Canada Revenue Agency (CRA).

The group has been a vocal opponent of some of the Harper government’s recent policies, including the muzzling of federal scientists and the alleged surveillance of Canadian citizens as revealed through the Edward Snowden leaks.

Follow revelations of mass state surveillance, Pen Canada advocated for an adoption of “International Principles on the Application of Human Rights to Communications Surveillance.”

The organization also spoke out against restrictive communications protocols, implemented by the Harper government, that prevent federal scientists from speaking with the media about their research. “The federal government’s restriction on media access to publicly funded scientists have become a serious infringement on the right to freedom of expression in Canada,” the group wrote on its website.

Federal auditors appeared at Pen Canada’s offices yesterday, asking to review internal documents, the Globe and Mail reports.

Philip Slayton, the group’s president, said they are fully cooperating with the audit, of which they were notified two or three months ago.

The audit places Pen Canada among the ranks of several other charities currently under audit. The list includes prominent charities such as the David Suzuki Foundation, the Canadian Centre for Policy Alternatives, Canada Without Poverty, Environmental Defence, ForestEthics, Tides Canada and Amnesty International Canada.

So far Physicians for Global Survival, a group advocating against nuclear weapons, is the only Canadian charity to have its charitable status revoked for being deemed too political.

As DeSmog Canada recently reported, new research done by Gareth Kirkby, a former journalist and graduate student at Royal Roads University, suggests Canada’s charitable sector has come under threat from federal policies that hinder the ability of advocacy groups to carry out their mandate.

Kirkby’s research, which included the anonymous participation of 16 charities currently under audit, confirmed charities are self-censoring due to the threat of audits, which place a strain on the groups’ resources.

Even groups not currently under audit have augmented their messaging, Kirkby found, in anticipation or fear of a potential audit.

The result is a ‘chill effect,’ Kirkby stated.

Environmental charities advocating on issues related to the oil and gas industry, Kirkby discovered, “seem to be the most heavily targeted.”

In 2012, before the federal government announced $8 million dollars would be devoted to the investigation and audit of Canadian charities (DeSmog Canada subsequently discovered through Access to Information legislation the figure is actually well above $13 million), Prime Minister Stephen Harper was asked about environmental charities critical of government policy receiving federal funding.

He said, “If it’s the case that we’re spending on organizations that are doing things contrary to government policy, I think that is an inappropriate use of taxpayer’s money and we’ll look to eliminate it.”

The CRA maintains the audits are not politically motivated, despite ongoing criticism from many groups and individuals.

The Globe and Mail reports Pen Canada has held only one or two full-time positions in recent years and, according to its latest tax records, reported just $237,000 in expenses for the 2011-2012 fiscal year.

The group reported no political activities, although charities are allowed to spend 10 per cent of their resources on political activities under CRA rules. Partisan activities are off limits.

Slayton said Pen Canada has played by the rules although the CRA rules regarding political activities are unclear.

“They (the rules) are vaguely formulated,” he told the Globe and Mail. “There’s a lot of room for interpretation. We’ll see what the CRA thinks.”

He added the audit is a drain on the group’s resources. “This is taking up a lot of time,” he said, in reference to the preparatory work they had to do before the auditors arrived. The process is expected to take months and possibly over one year.

“I refuse to let it have a chilling effect on us,” Slayton said. “We are not going to have some kind of fear – about having our charitable status questioned by authorities – stop us speaking out on issues.”

“If it means you have to live in fear of the revenue authorities, and if it means that there are things you want to say, you feel you should say, but you feel you cannot say because of the rules, well then, what price [is] charitable registration?”

Image Credit: Margaret Atwood by Thompson Rivers University via Flickr.

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