Gareth Kirkby’s Thesis Testimony to Canada’s Finance Committee

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I tes­ti­fied before the Stand­ing Com­mit­tee of Finance in Par­lia­ment Octo­ber 27, 2014 about the find­ings of my Master’s the­sis, Unchar­i­ta­ble Chill. Below is my testimony.

I’m here today to share with you the impli­ca­tions of the find­ings of my Master’s the­sis. I inter­viewed 16 lead­ers of char­i­ties of var­i­ous sizes, in five sec­tors, and five provinces. Also, 5 char­ity experts.

The lead­ers spoke, most on con­di­tion of anonymity, of the impact on their orga­ni­za­tions of the threat of CRA audits for polit­i­cal activ­i­ties, and the rhetoric of cab­i­net min­is­ters since 2012 con­flat­ing char­i­ties with money-launderers, crim­i­nal orga­ni­za­tions, and even ter­ror­ist organizations.

My study dis­cov­ered that char­i­ties are being muf­fled in their com­mu­ni­ca­tions and dis­tracted from their pub­licly ben­e­fi­cial mis­sions by these gov­ern­ment actions.

Stud­ies show most char­i­ties have less than 3% of their resources going toward “polit­i­cal activ­i­ties” as seem­ingly defined by reg­u­la­tions. My data sug­gests that even those orga­ni­za­tions tar­geted by CRA are on aver­age well under the allow­able 10% of resources devoted to polit­i­cal activities.

Clearly, there is no obvi­ous prob­lem that needs address­ing through stepped-up auditing—the pre-2012 audit­ing regime was suf­fi­cient. Few char­i­ties exceed polit­i­cal activ­ity lim­its as they are gen­er­ally under­stood, a fact con­firmed by how few char­i­ties have pub­licly been iden­ti­fied by CRA as being out of line. This beg­gars the ques­tion as to why the gov­ern­ment would devote $13.4 mil­lion to beef up polit­i­cal activ­ity audits, while, to use a recent exam­ple, reas­sign­ing audit­ing staff pur­su­ing gen­uine criminals—tax evaders who shift their money to off-shore tax havens.

I found that the gov­ern­ment is using the tax col­lec­tor to fight par­ti­san bat­tles against char­i­ties that have dif­fer­ent pub­lic pol­icy pref­er­ences to the gov­ern­ment. Researchers who have long stud­ied the vol­un­tary sec­tor have since 2012 found evi­dence of politi­ciza­tion of CRA. I am not the first to warn that some­thing is seri­ously amiss. My con­tri­bu­tion is in detail­ing the effects on char­i­ties and national con­ver­sa­tions and explor­ing some of the impli­ca­tions for the health of democracy.

I would sug­gest that the clearly unnec­es­sary new political-activities audit pro­gram should be aban­doned. Rather than find­ing a nest of cheat­ing char­i­ties, this audit pro­gram is muf­fling and dis­tract­ing char­i­ties from their Mis­sions. Mis­sions that their cit­i­zen sup­port­ers pre­sum­ably want them focused on. Char­i­ties are experts in their Mis­sion areas, and Cana­di­ans know that. The pro­gram is thus inter­fer­ing with impor­tant national con­ver­sa­tions about pub­lic pol­icy choices, arguably at the very time in our his­tory that we need the widest pos­si­ble input from experts.

A demo­c­ra­tic soci­ety needs to hear all sides of an issue. Why, my inter­view sub­jects kept ask­ing, is our fed­eral gov­ern­ment afraid of vig­or­ous national dis­cus­sions? Some answered their own ques­tion, and that can be found in my thesis.

I’d like to raise another major issue that came to light in my research. The lack of clear def­i­n­i­tions of spe­cific terms in the reg­u­la­tions leaves char­i­ties con­fused and receiv­ing dif­fer­ent advice from dif­fer­ent lawyers.

The exam­ples posted on the CRA web­site for char­i­ties to apply to real-life sit­u­a­tions, while acknowl­edg­ing an improve­ment over the sit­u­a­tion before 2002, are described by some char­ity lead­ers as “naïve” and “unhelpful.”

There are numer­ous “grey areas” open to too much inter­pre­ta­tion. Allow­ing peo­ple to stay in a state of con­fu­sion despite years of feed­back about vague def­i­n­i­tions and illus­tra­tions, leads some to think that this is inten­tional. On top of that, some char­ity lead­ers believe that politi­ciza­tion of CRA since 2012, has resulted in these spe­cial audits using new inter­pre­ta­tions of the reg­u­la­tions. Char­i­ties that have repeat­edly passed pre­vi­ous, in-depth audit­ing, worry about results this time. That’s a head-scratcher.

Char­i­ties do impor­tant work that has his­tor­i­cally had all-party sup­port. This audit­ing pro­gram and the government’s con­fronta­tional rhetoric is not help­ing address society’s needs. And it is hurt­ing all char­i­ties, includ­ing those beyond the tar­geted sectors.

Thank you for invit­ing me to present today.

Have you checked out my Master’s the­sis? 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.

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