Political-activity audits of charities being wound down by Liberal government

2016/01/22 Leave a comment

Expected and welcome:

The Liberal government is winding down the political-activity audits of charities that were begun by the Harper government — but there’s no amnesty being offered to the two dozen charities already caught in the program.

Revenue Minister Diane Lebouthillier announced the reversal today, saying results so far indicate that charities have largely been following the rules restricting political activities.

“The results of the political-activities audit program have shown that the charities audited have been substantially compliant with the rules regarding their involvement in political activities,” she said in a release.

“In light of these outcomes, the program will be concluded.”

The controversial program was launched with fanfare in the 2012 Conservative budget, with funding that grew to $13.4 million and was supposed to ensnare 60 charities over five years. The program was launched as two Conservative cabinet ministers, Joe Oliver and Peter Kent, vilified environmental charities for interfering in the government’s pipeline and energy policies.

The first wave of audits hit environmental groups but later waves expanded to include poverty, human-rights and international-development charities. Critics said the audits not only were costly for poorly funded groups to defend themselves, but created an “advocacy chill” as some charities self-censored to appease auditors.

Violations not generally political

Lebouthillier said only five of the charities caught by the program were notified they would lose their charitable status — but said their violations of charity rules generally didn’t result from their political activities but from other violations the auditors discovered.

The Canada Revenue Agency never released the names of all the targeted charities, though many came forward to identify their troubles in the news media.

The announcement Wednesday is good news for six unidentified charities who had been targeted for audits that had not yet begun. But the 24 charities still in the throes of unfinished political-activity audits will continue to be scrutinized until the auditors’ work is finished.

The minister said in making that decision she was respecting the arm’s-length relationship between her office and the Charity Directorate.

“The independence of the Charity Directorate’s oversight role for charities is a fundamental principle that must be protected,” she said in a release.

“The minister of national revenue does not and will not play a role in the selection of charity audits or in the decisions relating to the outcomes of those audits.”

Source: Political-activity audits of charities being wound down by Liberal government – Politics – CBC News

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Tories call for probe of public servants who aided report on tax agency

2015/12/18 Leave a comment

Valid concerns regarding the breach of the impartiality of the public service, not just leaking of documents (which also is problematic):

The Conservatives are calling for an investigation into claims that Canada Revenue Agency employees teamed up with an advocacy group for a report that alleges mismanagement and political interference in tax investigations that cost billions in uncollected revenue.

Conservative MP Ziad Aboultaif, the party’s national revenue critic, said the involvement of public servants in such a report during an election is “disturbing” and shouldn’t be ignored just because a new government was elected.

“I would hope that the Minister of National Revenue realizes the seriousness of this and is investigating the supposed wrongdoing, not ignoring it because the incident took place under the previous government,” said Aboultaif.

“There is a principle involved here; it is not about party politics. Canadians expect their public service to be both professional and neutral.”

The report, by Canadians for Tax Fairness, was based on 28 interviews with former and current auditors and other tax specialists. They alleged the agency is mismanaged, undermined by major budget cuts, and that it targets ordinary taxpayers over the “big-time tax cheats” hiding money offshore.

Public servants are supposed to be non-partisan and loyal to the elected government. They face even stricter limits on their behaviour during an election.

Aboultaif argued neutrality is part of the job and that public servants give up the right to criticize government policies when they join the public service.

“Public servants take an oath of office and agree to abide by a code of ethics while employed in the civil service,” he said.

….So far, the Canada Revenue Agency has rejected the report’s allegations as unfounded. It said it was unable to determine if the ethics code was breached because it didn’t know who the employees were.

Donald Savoie, Canada Research Chair in public administration and governance at the University of Moncton, has written books on how the traditional “bargain” or relationship between public servants and politicians is broken. He says this case is one of the most blatant violations yet.

“If public servants become political actors, which is what is happening here, that is just not how the Westminster system was conceived. We are reshaping fundamental tenets of the system on the fly without any reflection or debate.”

Savoie argued this is an issue that warrants the attention of Prime Minister Justin Trudeau to clarify what is expected of public servants today.

“This is a government issue, not a CRA issue. It should be raising alarm bells in the Privy Council Office and Treasury Board because it goes to the heart of the fundamental role of the public service.

“I think the prime minister, cabinet and head of the public service should be responding.”

Source: Tories call for probe of public servants who aided report on tax agency | Ottawa Citizen

The earlier article ICYMI:

Source: Public Servants ‘blow the whistle’ on tax system shortfalls | Ottawa Citizen

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Silence of the charities – Renzetti

2015/04/21 Leave a comment

Elizabeth Renzetti on what appears to be selective criteria in CRA charity audits:

If you look at the 52 groups that have been targeted for audits since the Harper government’s 2012 crackdown on political activity by charities, it’s not hard to see what joins them: advocacy of causes that the Conservative government thinks are, by its own admission, “radical.” I don’t actually know the full list, because it’s not been revealed, but last year the CBC revealed the names of seven environmental charities, including the David Suzuki Foundation and Tides Canada. The free-speech group PEN Canada and human-rights advocates Amnesty International were also targeted. Some 400 academics signed a letter denouncing the audit into the political activities of the progressive think tank Canadian Centre for Policy Alternatives.

The CRA swears up and down that there is no political motivation to the audits, but how is the public to know? The agency doesn’t reveal who is the target of its audits, nor how they’re prepared. Charities live in fear of catching the eye of Sauron.

“Among environmental groups right now there’s a broad reluctance to speak out,” says Calvin Sandborn, director of the University of Victoria’s Environmental Law Centre. “It’s kind of like in Nixon’s America where you didn’t want to be the enemy that he’d sic the IRS on.”

The law students working with Prof. Sandborn recently released a report on the troubling legal underpinnings of the current audit system, and its need for reform. (Mr. Harper’s government may not have been the first to target charities, but it was certainly one of the more vehement, setting aside $13.4-million for audits shortly after adding “environmentalists” to the roster of threats Canada faces.)

Canada’s charities are hobbled in a bunch of ways, the report found. The CRA’s rules around what constitutes “political activity” are murky and confusing; there is little transparency about how those rules are applied; charities subject to audit often have to spend precious resources putting together documents for auditors and providing legal training for staff; and most important, many charities are self-censoring for fear of breaching the 10 per cent rule and facing shutdown by the CRA.

Although the report does not come to any conclusions about whether the current spate of audits are politically motivated, it does find the threat alone has a sinister chilling effect: “The important thing is that the audits themselves – and the mere perception that they may be targeted – are clearly silencing charities that have much to offer society.”

Other countries around the world don’t hobble the political advocacy of their charities the way Canada does. In some countries, like the Netherlands, lobbying by charities is encouraged. In others, like England, the body that oversees charities is an independent entity at arm’s length from government (in Canada, the CRA falls under the remit of the Minister of Revenue.) In the U.S., charities that spend too much on political activities (already set at a far more generous level than here) are taxed rather than shut down.

Silence of the charities – The Globe and Mail.

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CRA audits of charities look fair but feel foul – Don McRae

2015/04/08 1 Comment

Looking and finding patterns in the selection of charities for CRA audit:

The Charities Program Update states that one of the factors in building the audit plan was that groups from all four charitable categories were audited. (The categories are relief of poverty, advancement of education, advancement of religion, and other purposes of benefit to the community.)

As of Jan. 31, 2014, there were 31 files under audit. Twenty-two of the 31 audits were community benefit groups (where environmental, social justice and human rights groups are found). This segment, which is 23.3 per cent of all charities, makes up 71 per cent of the 31 audits. There appears to be no cause for an over-representation of these groups as they make up only 18.5 per cent of all charities revoked for cause since 1967.

In a Canadian Press story last August, the director general of the charities directorate, Cathy Hawara, explained the audit selection process. She said the CRA considered formal complaints from citizens, lobby groups, MPs or even cabinet ministers. (Having a complaint from a minister raises questions about the selection process.) These external complaints led to 30 “leads” to investigate.

From 2008-09 to 2010-11, there was an average of 24 such complaints to the CRA each year. This went up to 139 complaints in 2011-12 and 159 the year after that. Ethical Oil, the lobby group with Conservative ties that encourages “people, businesses and governments to choose Ethical Oil from Canada’s oilsands,” made several complaints and at least five of these groups are being audited.

Of the 20 self-identified charities, 11 do some work on environmental issues and seven work on social justice or international development. Seven of the 20 have had their federal funding eliminated since 2006. KAIROS, the group that was famously not recommended by the former CIDA minister Bev Oda, is being audited under the auspices of the United Church of Canada. Four other groups identified on the church’s website as partners are being audited. Some of the audits have taken years, draining staff time, resources and energy from the organizations.

The Conservative government has assured Canadians that the system of political activity audits is fair and neutral. The limited evidence we have suggests a different conclusion. To paraphrase Frodo in The Lord of the Rings, the system looks fair but feels foul.

There are two major losers in this process. The first are Canadians, who will not benefit from the research, experience and advice of Canadian charities. The second is the CRA, which must defend what appears to be a stunted and warped selection process by finding new ways to say “trust us.”

CRA audits of charities look fair but feel foul | Toronto Star.

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Tory-linked charity behind monument declared it was not active politically

2015/03/20 Leave a comment

Another illustration that charities chosen for CRA audits, and those not chosen, appear to reflect ideological or political criteria:

The charity behind the campaign to erect a monument to the victims of communism has declared zero political activity in its five-year history, even though it originally told the Canada Revenue Agency some of its work would be political.

A review of Tribute to Liberty’s official filings with the CRA reveals a clear intention to engage in political activity. When asked if it planned to engage in political activities, it answered “Yes” in its 2009 application for charitable status. It said this would involve contacting MPs and senators to gain their support for the project.

Yet, in the five years that followed, the charity answered “No” each time it was asked by the CRA in annual reporting forms whether it conducted political activity.

Dozens of Canadian charities have faced scrutiny since the 2012 Conservative budget set aside $8-million for CRA audits to determine whether they are following rules regarding political activity. The CRA has not published a list of the 60 charities it has identified for auditing. However, some of the groups that said they were audited were critical of government policy. The CRA has rejected suggestions the selection was politically motivated.

Tory-linked charity behind monument declared it was not active politically – The Globe and Mail.

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Revenue Canada targets birdwatchers for political activity

2014/10/18 1 Comment

This may be the over-reach that helps clarify the issues – targeting birdwatchers (see earlier Canadian charities in limbo as tax audits widen to new groups – Politics – CBC News):

But longtime member Roger Suffling is speaking up, saying the issue is about democratic freedom and not about arcane tax rules.

“Effectively, they’ve put a gag on us,” he said in an interview, noting that the letter arrived just after the club had written directly to two federal cabinet ministers to complain about government-approved chemicals that damage bee colonies.

“You can piece together the timing,” said Suffling, an adjunct professor at the University of Waterloo. “The two things are very concurrent.”

Environment Minister Leona Aglukkaq responded to the group’s complaint in a March 14 letter — or just days after the Canada Revenue Agency letter arrived — and Suffling is convinced the two events are linked. Aglukkaqs office denies there’s any link, saying the agency operates independently.

Suffling said that if government is using the tax agency as a “pit bull to stifle dissent, then there’s something very wrong.”

Revenue Canada targets birdwatchers for political activity – Politics – CBC News.

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Canadian charities in limbo as tax audits widen to new groups – Politics – CBC News

2014/07/12 1 Comment

Not quite sure whether the list below passes the “smell” test of being neutral and completely free of political direction:

“CRA audits occur at arm’s length from the government and are conducted free of any political interference. Our government is committed to ensuring that our tax system is fair for all Canadians.”

The tax agency acknowledges it has been auditing the political activities of a variety of charities whose work focuses on animal welfare, poverty, education, religion, health, human rights and others.

Canadian charities in limbo as tax audits widen to new groups – Politics – CBC News.

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