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Behind The Numbers

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Behind The Numbers delivers timely, progressive commentary on issues that affect Canadians, including the economy, poverty, inequality, climate change, budgets, taxes, public services, employment and much more. Contributors include staff and research associates from the Canadian Centre for Policy Alternatives (CCPA).The views expressed on this blog are those of the individual contributors, and do not necessarily represent the views of the CCPA. Visit the blog at Behindthenumbers.ca.

Who will they come for next? Charities and the federal budget

| February 11, 2014
Who will they come for next? Charities and the federal budget

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The federal government has been attempting to silence NGOs with charitable status from speaking out on issues that matter to all Canadians. This initiative to intimidate and otherwise silence voices that challenge its policies goes to the heart of Canadian democracy.

Anecdotal evidence suggests that the Conservative government is attempting to rewrite or reinterpret the rules on what constitutes "political activity" to prevent organizations from saying things it does not want to hear.

The CRA Minister claims these audits are random, but this claim lacks credibility. The claim that they are arms-length and not subject to government interference is highly questionable.

There are 88,000 charities in Canada. CRA has audited less than 1 per cent of all charities. And yet major environmental organizations, think-tanks, human rights and international development organizations that do policy work that is often critical of government policies, are being audited.

It follows on from other government measures such as eliminating funding to those NGOs dependent on government funding; to weaken public sector unions and obstruct their ability to advocate for measures that benefit their members and the broader Canadian society. They have gutted in-house government policy capacity, undermined Statistics Canada's ability to provide information vital for policy-making, gutted scientific research and muzzled scientists.

While this government is focused on reducing so called red tape for for-profit businesses, it has imposed an onerous and seemingly interminable administrative burdens on the charitable organizations it chooses to audit.

These audits are highly intrusive -- requesting information that has no discernable relevance to an organization's charitable activities. They demand the most miniscule of financial details. They force charities to devote considerable resources to compiling successive rounds of information, diverting from their policy and other charitable work, and incur substantial, sometimes prohibitive, legal costs.

In some cases they have demanded charities turn over all email correspondence, a measure which has major privacy implications.

This is intimidation and harassment pure and simple, designed to have a chill effect on organizations' activities.

A February 11 Toronto Star editorial stated that, "One way a charity can protect itself is to mute its criticism of government policy. If it isn't spending anything like 10 per cent of its resources on political advocacy or activity, it isn't likely to attract complaints, or attention."

Unfortunately this is no protection. The CRA, through these audits, is reinterpreting and redefining what it considers to be "political activity." Thus, organizations that currently report miniscule political activity, could as a result find themselves well above the limit and thus vulnerable to having their charitable status revoked.

This exercise, allegedly to assure Canadians of the responsible use of their tax dollars, comes at a time when CRA is planning to cut the number of international tax auditors even as the Auditor General has warned that the Agency is unable to adequately investigate Canadians with offshore accounts and international tax evasion.

While the targeting of environmental NGOs has received prominent media attention, the Canadian Centre for Policy Alternatives (CCPA), whose work covers a broad range of public policy issues, is also being audited.

Our work extends to environmental issues. For example, the Climate Justice Project, run out of CCPA-BC, examines the nexus between climate change and inequality. It develops policy proposals to reduce carbon emissions, which do not disproportionately affect low-income citizens. Its work -- highly critical of federal inaction on carbon reduction measures, and of Enbridge's Northern Gateway pipeline proposal -- could be redefined as political.

Ironically, this project is publicly funded through the Social Science and Humanities Research Council; and as such, its research has to meet the most rigorous academic standards.

Budget 2014: Charities and other non-profit organizations

There is nothing on the surface in Budget 2014 regarding further restrictions on what the government considers allowable political activity. Any specifics will likely be in the budget implementation bill expected later this month.

There is a vague statement that CRA will be given more authority to prevent potential abuse of charities by state supporters of terrorism. (A solution to what problem?)

The only additional direct spending will be to facilitate electronic filing of charities' returns ($23 million over 5 years) and enhanced web presence on charitable giving trends ($1.5 million over two years.).

There are also some tax incentives, notably allowing estate trustees increased flexibility in applying charitable donation credits against income tax liabilities of the estate, beginning in 2015-16.

However, for non-profit organizations (NPOs) that don't have charitable status, those that thought the government wouldn't come after them -- think again. Your turn is next. The budget articulates the need for CRA to impose increased reporting requirements on NPOs to enable it to evaluate their entitlement for tax-exempt status.

The government will launch a "public consultation" to review in order to determine whether NPOs have sufficient transparency and accountability, and to ensure that tax-exemption for NPOs is not subject to abuse. We've heard this before!

Bruce Campbell is Executive Director of the CCPA. He attended the 2014 federal budget economists lock-up.

Image: Jared Rodriguez / t r u t h o u t



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