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