Blame Harper, not CRA, for Audits but Don’t Target Rightwing Charities

July 26, 2014 No comments Article
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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.

Categories: Uncategorized

Which Charities are Being Targeted by CRA

July 15, 2014 1 comment Article
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Three kinds of char­i­ta­ble orga­ni­za­tions are dis­pro­por­tion­ately under­go­ing audits by Canada Rev­enue Agency.

You may recall the Feb­ru­ary 2014 CBC news report announc­ing that seven envi­ron­men­tal char­i­ties face CRA audits. The report quoted an Alberta Con­ser­v­a­tive deny­ing that the gov­ern­ment tar­gets any one sec­tor or any one char­ity, but tellingly the MP hinted at one of the trig­gers of selec­tion when he noted that CRA used “all sorts of infor­ma­tion from all sorts of Cana­di­ans” when choosing.

In my last blog I noted what most char­ity lead­ers I inter­viewed con­sider the most likely process: CRA staff try not to hear the gov­ern­ment loudly denounc­ing envi­ron­men­tal orga­ni­za­tions, look for which groups tend to declare more “polit­i­cal activ­i­ties” than other groups, and then look for com­plaints on file against those char­i­ties. And, lo and behold, many groups, par­tic­u­larly but not exclu­sively envi­ron­men­tal orga­ni­za­tions, that oppose the government’s petroleum-friendly eco­nomic strat­egy just hap­pen to have com­plaints in their files from Eth­i­cal Oil, an aggres­sively pro-petroleum pri­vate non­profit organization.

So you may not be sur­prised to learn that my data sug­gests that it is a par­tic­u­lar sec­tor of envi­ron­men­tal char­i­ties that are mainly audited: those deal­ing with petro­leum issues. More specif­i­cally, it is groups that focus on or have projects related to cli­mate change, oil sands devel­op­ment, pipeline trans­port, tanker export, and on pro­tect­ing the species and habi­tats of the Alberta and B.C. inte­rior rivers, forests, and coast­lines that would be most affected by the oil sands, pipelines, tankers, and ports.

But it is not only envi­ron­men­tal char­i­ties being audited. My data shows that two other cat­e­gories of char­i­ties dis­pro­por­tion­ately have their oper­a­tions under the micro­scope: development/human rights groups, and those receiv­ing sig­nif­i­cant fund­ing from labour unions.

While the Eth­i­cal Oil com­plaints seem rel­e­vant in direct­ing CRA staff to par­tic­u­lar envi­ron­men­tal char­i­ties, it’s less clear how they are led to the other two cat­e­gories. Are there com­plaints on file against these orga­ni­za­tions? CRA doesn’t make com­plaints pub­lic; we know of the Eth­i­cal Oil com­plaints because the com­plainant sent copies to the groups they com­plained about and some­times posted them pub­licly includ­ing on the Eth­i­cal Oil web­site. Could it have any­thing to do with some devel­op­ment char­i­ties ques­tion­ing the behav­iour of Cana­dian min­ing com­pa­nies in the devel­op­ing world, where they are seem­ingly increas­ingly con­tro­ver­sial? Could selec­tion of the other two sec­tors be coin­ci­dence, I won­dered? I think not based on my inter­view data.

There is one other group being sin­gled out, it seems: those that have had some rela­tion­ship with Tides Canada Foun­da­tion over the past few years. When CRA audits a char­ity, it some­times fol­lows the money trail to recip­i­ents. Tides Canada has been under per­pet­ual audit since 2012 and drawn the per­sonal inter­est of fed­eral cab­i­net min­is­ters and some of their grant recip­i­ents are now of high inter­est, too.

A Cana­dian Press report recently noted char­i­ties in other sec­tors, includ­ing those address­ing poverty, are being audited, too, but not seem­ingly so sys­tem­at­i­cally as the three I iden­ti­fied. But what almost all char­i­ties under­go­ing these “polit­i­cal activ­i­ties” audits have in com­mon is that they are from the “pro­gres­sive” end of the socio-political spectrum.

That’s a broad catch­ment, for sure, but there are many char­i­ties on the con­ser­v­a­tive end, includ­ing most of the nation’s think thanks such as the Fraser Insti­tute and it’s hard to find any being audited. And of course local churches make up approx­i­mately half of the 85,000 reg­is­tered char­i­ties in Canada and many of the rest are schools, hos­pi­tals, and health-related charities—and they don’t seem to be get­ting many audits above the 800–900 yearly “ran­dom” audits con­ducted by CRA. Yet many of them also advo­cate on public-policy changes and employ “polit­i­cal activ­i­ties.” Can­cer and drink­ing char­i­ties, for exam­ple, pres­sured the gov­ern­ment to bring in increas­ingly strict cig­a­rette reg­u­la­tions and mas­sively stepped up drunk-driving enforce­ment. That’s “polit­i­cal activity.”

So, who is tar­geted for “polit­i­cal activ­i­ties” audits, of which 60 will be per­formed in 2013–2015? Pri­mar­ily three sec­tors: envi­ron­men­tal groups that chal­lenge the government’s petroleum-based eco­nomic strat­egy and/or draw the atten­tion of Eth­i­cal Oil, development/human rights orga­ni­za­tions, and char­i­ties receiv­ing monies from trade unions. And a sprin­kling of oth­ers. Almost all of which are “pro­gres­sive” in ori­en­ta­tion. And there’s your answer.

But why? What’s the point of audit­ing these orga­ni­za­tions? What does it accom­plish for gov­ern­ment, for the petro­leum indus­try, and for pub­lic con­ver­sa­tions on impor­tant issues? Those are for upcom­ing blog postings.

Mean­while, check out my Master’s the­sis.

 

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.

Categories: Uncategorized

Targeting Enviros for Audits an ‘Insidious’ Process

July 14, 2014 No comments Article
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Has the fed­eral gov­ern­ment directly inter­fered in the oper­a­tions of Canada Rev­enue Agency (CRA), telling them which char­i­ties to audit for “polit­i­cal activ­i­ties”? Or is there some other way that the gov­ern­ment ensures the tax man tar­gets tthose char­i­ties advo­cat­ing for dif­fer­ent pub­lic poli­cies than those pur­sued by the cab­i­net? Espe­cially envi­ron­men­tal issues con­cern­ing the petro­leum industry.

It’s a ques­tion very much on the minds of the char­ity lead­ers and experts that I spoke to anony­mously in research­ing my the­sis, which asked what is the effect on char­i­ties of the denun­ca­tory rhetoric and audit­ing actions taken by the cur­rent fed­eral government.

Some char­ity lead­ers think that a cab­i­net min­is­ter sim­ply told senior CRA staff to audit cer­tain char­ity sec­tors, par­tic­u­larly envi­ron­men­tal orga­ni­za­tions and oth­ers doing energy-policy research and advo­cacy. Since then, I’ve found that other sec­tors have been tar­geted by CRA for inves­ti­ga­tion or audits, the sub­ject of my next post.

But the gov­ern­ment does not need to whis­per in anyone’s ear to get heard at CRA, and to point them in the desired direc­tion. First, remem­ber that in the 2012 fed­eral bud­get, while other min­istries had their fund­ing cut back, CRA was given an addi­tional $8 mil­lion over two years to, among other things, audit char­i­ties for “polit­i­cal activ­i­ties.” Mean­while, CRA has received many for­mal, lawyer signed, com­plaints against orga­ni­za­tions work­ing on energy-related issues, from Eth­i­cal Oil. That’s an activist orga­ni­za­tion that Green­peace has sug­gested is tied to Big Oil and was founded by a for­mer polit­i­cal staffer of cab­i­net min­is­ter Jason Ken­ney who was later hired into the Prime Minister’s Office.

So the money was there, and the direc­tive to step up audit­ing, and com­plaints were in the files of many, mainly envi­ron­men­tal, orga­ni­za­tions. And I was told by my par­tic­i­pants that envi­ron­men­tal orga­ni­za­tions tend to have more resources devoted to “polit­i­cal activ­i­ties” than some other sec­tors (they are per­mit­ted up to 10 per­cent of their resources to be used to pres­sure gov­ern­ment to change or keep poli­cies but few I inter­viewed said that they came any­where near that figure).

So, per­haps the min­is­ter spoke to a senior CRA man­ager who spoke to, a super­vi­sor, who spoke to a junior, and so on down the line. But many of the par­tic­i­pants agreed that a more “insid­i­ous” process, as one char­ity leader put it, could achieve the same result. After all, CRA staff can hear the gov­ern­ment rail­ing against envi­ron­men­tal­ists as clearly as any of us. And then

if the CRA takes their polit­i­cal direc­tion, which is to look at the “polit­i­cal activ­ity” of orga­ni­za­tions, and here are some resources to do that, and then they go and see what are the com­plaints against “polit­i­cal activ­ity,” then they can draw the con­clu­sion that that’s how they arrived at this par­tic­u­lar sector.

And that’s how the envi­ron­men­tal sec­tor may have been tar­geted for audits. And though I found that other sec­tors are also being tar­geted, the main focus is def­i­nitely on envi­ron­men­tal orga­ni­za­tions and oth­ers advo­cat­ing energy poli­cies that dif­fer from the cur­rent government’s stated goal of mak­ing Canada an energy super­power. A pol­icy that no doubt makes the petro­leum indus­try and its spin-offs very happy.

So, a cab­i­net min­is­ter does not have to directly instruct CRA harass­ment of any one sec­tor. The process could be politi­cized by con­struct­ing a fun­nel that points CRA in the direc­tion that the gov­ern­ment wants them to go. But politi­cized it clearly is.

But that just leads to more ques­tions for future blogs. What other sec­tors are tar­geted? Is CRA defin­ing “polit­i­cal activ­i­ties” dif­fer­ently than before, now view­ing any­thing that chal­lenges gov­ern­ment pol­icy as being “par­ti­san?” What is Eth­i­cal Oil and why are they lay­ing com­plaints against char­ity orga­ni­za­tions? Is there a strong con­nec­tion between Eth­i­cal Oil, the oil indus­try, the cur­rent fed­eral gov­ern­ment, and the Con­ser­v­a­tive Party of Canada?

Check out my Master’s the­sis.

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.

Categories: Uncategorized