Highly principled libertarian-right columnist Andrew Coyne recently suggested a novel solution in the controversy over the current federal government politicizing CRA audits of the “political activities” of charities: eliminate the tax benefits that donors get from contributing to charities. Eliminate this receipting privilege from all charities, wrote Coyne in an August 27, 2014 Post Media column.
And he took a little stab at the wealth of some major donors to charities, though without noting that some charities are highly dependent on donations, and the tax receipts that come with them, in order to perform their important service for the needy or for democratic discourse in Canada.
Coyne’s points are fair enough, if not fully thought out. But they are also unrealistic. And getting evermore unrealistic as Canada continues a major economic shift. Under the very sort of neoliberal ideas that Coyne constantly advances in his columns, governments in Canada and the western world have gradually but consistently voluntarily withdrawn from both claiming and exercising their traditional political and economic powers. They’ve entered into trade agreements and other pacts that transferred more power to the corporate sector while deliberately sacrificing the regulatory powers previously bestowed on governments by voting citizens.
This was no conspiracy but rather the implementation of a belief system that holds that government ought get out of the way of the more efficient corporate sector and release its creative powers for the betterment of all. It also advocates that each nation’s economy specialize in its area of supposed economic advantage—such as Canada’s economy reverting increasingly to resource exploitation rather than toward increased manufacturing and high technology industries.
In Canada, one aspect of this shift was an attempt by federal and provincial governments to download some service delivery to the non-profit, volunteer, and charity sector and away from government. And to recognize the role of outside think-tanks and experts for providing input rather than limiting policy brainstorming to politicians and bureaucrats. And so emerged and grew a rash of influential charitable rightwing think-tanks and research institutes (including the CD Howe Institute, Macdonald-Laurier Institute, the Fraser Institute and the Montreal Economic Institute—none of which seem to be undergoing “political activity” audits), and a couple of left-wing alternatives. Foremost among the latter is the Canadian Centre for Policy Alternatives (CCPA) that is undergoing an audit that appears to be applying new definitions of appropriate behaviour. Another, in the sphere of energy policy is the research organization Pembina Foundation, which has been in the press for undergoing a major audit.
All of these organizations have grown partly through charitable donations. There is a relative numerical abundance favouring right-leaning institutes speaking out on public policy issues over institutes leaning left. This is, of course, an indication of the much greater amount of money from corporations and wealthy individuals and funding foundations available for organizations that advance policy ideas that benefit those same donors.
In this era of smaller government and downloading, a rash of health and socially oriented charities operating at lower cost than does government, have flourished in service delivery and developing policy ideas. They have been funded partly by charitable tax write-offs, government contracts, and sometimes supplemented by government grants at a lower apparent cost than obtaining the same output from government departments and employees (the wisdom of this downloading is an ongoing subject of contention and will not be dealt with here).
I would argue that overall, the charitable tax credit has been far more an aid to the emergence of rightwing ideas, and downsizing of government, than it has been to leftwing alternative ideas and the growth of government programs. And thus Coyne’s proposal to deprive charities of donations will predictably go nowhere with this government if it pauses long enough to find clarity.
Meanwhile, please check out my Master’s thesis and feel free to forward and tweet it. Check out media coverage of my thesis findings and the national conversation it triggered. And you can follow me on Twitter: @garethkirkby
I am a former journalist and media manager who recently completed my Master’s thesis for Royal Roads University and now work as a communication professional. I have been awarded the Jack Webster Award of Distinction, among others, for my reporting and editing.