Sorry for the blog length, but I think you’ll find this one interesting and thought-provoking.
In rapid succession we’ve heard from Christian charities announcing that their satisfaction with the federal government’s audit procedure, Canada Revenue Agency denying that it is being used by the current government to target charities critical of government policies, and a columnist calling for auditing of right-leaning charities to even the score.
It’s great to see a national conversation about the politicization of the CRA’s auditing. But if I may, I’d like to take a different tack on this. The real issue that most charity leaders and some experts I interviewed for my thesis is not with CRA staff. They acknowledged that those working at CRA are decent, professional, dedicated employees doing their best to keep focused on their responsibilities. (There are some related issues with CRA that emerged in my research, but more about that in a future blog.) And not one charity leader spoke against the need for auditing charities, recognizing the principle that the tax benefits they receive create an obligation to society.
So it’s wrong-headed to focus on CRA itself in the matter of stepped-up ‘political activities’ audits and the three categories of charities—all of them relatively ‘progressive’—being targeted: environmental, development/human rights, and those with significant funding from labour unions.
The issues for the leaders are: who is getting audited, why, why this timing, what are the effects and implications for charities and society?
Attention needs to be on the government, not the tax man. The government has created a funnel that leads CRA staff to focus their attention on certain sectors. By allocating additional audit funds to CRA while other government departments saw cutbacks, by designating those funds for ‘political activities,’ by speaking publicly about the need for CRA to respond to public complaints, the government created a funnel that led CRA auditors to charities with relatively higher self-reported ‘political activities’ (which are perfectly allowable up to 10% of the organization’s resources when done properly) and charities with complaints in their files.
These will very strongly tend be organizations with different public policy perspectives than that of the government.
Now add to the mix the reality that the complaints, which CRA has acknowledged play a role in who is selected for auditing, include a substantial number from Ethical Oil in the case of environmental organizations and others dealing with environmental policy options. In fact, in the spirit of openness, Ethical Oil has historically sent copies of its CRA complaints to the organization it is complaining about. Ethical Oil was started by a former staffer of cabinet minister Jason Kenney who left briefly to set up the organization and then returned to the fold with a new assignment to the Prime Minister’s Office.
Given that CRA does not publicly release complaints, we don’t know how many complaints are on file against organizations in sectors not dealing with energy-related policy. But one of the leaders I interviewed from a non-environmental charity, had been told by CRA staff of multiple complaints in the organization’s file.
Of course it is possible that the funnel construction is a series of individual acts that coincidentally lead to concentrated attention on organizations with different policy preferences than the government’s, and particularly in the environmental sector. And it’s possible that a minister gave an order to a deputy minister and on down the line—but that would be a major violation of boundaries that surely no minister, or senior mandarin, would consider. In any case, nobody’s had their photo taken holding a smoking gun. Most charity leaders and experts I interviewed see a series of steps, which I call a funnel, that leads CRA right to where the government wants them to end up—indirect, but politicization just the same. One leader who took pains to speak of high regard for the CRA staff characterized it as an “insidious” process.
So, it can be argued that CRA employees are caught up in something not of their making. And if the government PR staff can focus media attention on CRA and away from the PMO and cabinet, with the government officially backing up their tax authority’s independence, well that would be a very bright media strategy, wouldn’t it?
The CBC report quoted Christian Charities Association CEO Rev. John Pellowe saying, “CRA has the right to investigate charities to determine if you’re following the rules.” Pellowe went further, “You can do political engagement, but you cannot engage in partisan politics, and in the cases I’ve heard about, that’s exactly what they’re doing—they’ve crossed the line.” His members haven’t expressed any concerns about political activities audits.
As I previously noted, none of the charity leaders I interviewed had any problem with CA investigating charities to ensure they were following the rules. It’s a matter of ensuring a fair process, without government interference. It’s about the government not using the tax man to fight its policy battles by instilling fear, muffling, and diverting charities from their missions—and at the very time that key policy issues are working through the system and Canadians need vigorous public conversations about them.
I’m intrigued by Pellowe’s judgment that “in the cases [he’s] heard about” the charities are participating in forbidden partisan activities rather than acceptable political activities. Which charities, exactly? What partisan activities, exactly? Churches and religious organizations have often taken strong stands on issues such as abortion, same-sex marriage, divorce, and birth control. Religious charities are particularly vulnerable if a future government heeds the call of activists who claim some cross the line into partisan activities and so the sector should lose their charitable status en mass. With an eye to the future, some might have expected a charity umbrella organization representing religious organizations to speak up for the widest possible public conversations in society.
Heather Mallick’s spicy take on the issue in her Toronto Star column suggests that audits should be extended to right-leaning organizations. “Groups that help create a better world for bitumen extraction or urge pregnant teenagers not to have abortions, in other words, groups that don’t scrape at Prime Minister Stephen Harper’s rage gland, are not audited in a sudden blitz. They should be. Let’s be fair.”
Playful, but not where the charity leaders I spoke to are coming from. Many of them did note that their tracking suggests that only “progressive” charities (and that’s a wide swath of political orientation, isn’t it?) are getting audited. But only one leader thought that the way to deal with that is to even the score by auditing more conservative and right-leaning charities. Almost universally, they thought that any sort of political targeting is wrong. That society needs charities of all orientations and missions to be given the space to contribute to society’s public conversations. without harassment That political audits should be random or responding to obvious problems, not the ideology of, and misuse of power by, whatever government happens to be in power.
Meanwhile, please check out my Master’s thesis and feel free to forward and tweet it. 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 communications professional. I have earned a Webster Award of Distinction, among other awards, for my reporting.