The last several days have seen multiple news reports and editorials in which CRA officials made claims, and later revised them, about how charities are selected for political audits (see my posting on the funnel that the government constructed that targets certain charities). And then we learned that CRA blacked out key details in response to a freedom-of-information request by Pen Canada that explained to its auditors how to evaluate a charity’s “political activities.”
“Providing information about how we conduct our general audit review could hinder or impede our ability to effectively carry out future audits,” CRA spokesperson Philippe Brideau told Globe and Mail reporter Kathryn Blaze Carlson., before claiming that the CRA website contains explanations of charitable, political, and partisan activities.
Pen Canada executive director Tasleem Thawar suggested to Blaze Carlson that CRA should be less interested in catching charities breaking the rules than in helping them understand what activities are unacceptable so that they can follow the rules.
I think Canadians would expect that the CRA would prefer to share their advice to auditors if it helps charities stay within the roles. Seems common sense to me.
In any case, the revelation is sadly consistent with what I found in my Master’s thesis interviews with 16 charity leaders and five experts. What the data suggests is that leaders are confused about the regulations and that this confusion has been going on for years. There are grey areas between charitable activities and allowable political activities. And between political activities and forbidden partisan activities. Leaders repeatedly told me that they have tried using the information on the website for guidance but the examples that are used are “naïve” and confusing. And leaders told me that they have had no responses to the questions they left in the section of the website where charities are encouraged to ask CRA for just that.
Veteran leaders and some charity experts (lawyers, academics, former bureaucrats in the know) give kudos to CRA for having made much progress in communicating some regulations and expectations through the website and in bulletins and other external messaging. Things were much worse before the $95 million Volunteer Sector Initiative consultations between the nonprofit and charity sector and various government departments, including CRA. During those consultations, CRA liberalized some of its approach to regulations, loosening their choke-hold on political activities in 2003, for example, and negotiating interpretations of regulations.
So, CRA has improved its communications and there were signs that interpretations were becoming more consistent. But that was before 2012 and the current round of political-activities audits, politicized by the current federal government, and the belief that new, stricter interpretations of the regulations are emerging during this targeting.
And meanwhile, the grey areas remain and attempts by charities to address them with the CRA, by use of freedom-of-information requests if necessary, are not working. And charities are forced to seek advice from lawyers and accountants at substantial cost, with the accompanying diversion from their Mission activities of money and human resources. Interestingly, I found that different charities were getting slightly different advice from their lawyers about those grey areas, so clearly there is no complete consensus out there. And it is, of course, CRA’s job to make sure that their internal understanding of the regulations is everyone’s understanding. Meanwhile, Imagine Canada, the umbrella organization of Canadian charities, has created a useful information sheet addressing some of the regulations; but grey areas remain.
My study found a high level of confusion among charity leaders and to a lesser extent among some experts. They are confused about various regulations, they are confused about the grey areas regarding the various activities. They are confused, anxious and annoyed by the targeted audits and the attempt to muffle and distract them from their socially beneficial Missions.
They are confused and angry at being labelled “money-launderers,” “criminal organizations,” and “terrorist organizations” by government ministers who ought to know better—and they’re almost uniformly smart enough to know not to publicly make the denial because then they fall into the trap similar to an innocent insisting, “I do not beat my partner.” They have to count on Canadians knowing that they are none of criminals, terrorists or traitors, and hope that people blame the government for its “smear campaign,” as several of them labelled it.
In any case, all this confusion, mixed with fear in varying doses from leader to leader, profoundly points to the government and its tax authority improperly using its power. In the case of the taxman, the abuse is to allow the confusion over regulations to continue, to allow grey areas to fester, to not directly address the belief among charity leaders that the interpretations are shifting during the current stepped-up auditing process.
The far more troubling abuse of power involves a government that uses fierce rhetoric that treats citizen groups as enemies, and utilizes an arm of the administrative functions to fight its policy disagreements through the threat and reality of CRA audits. This bullying in the form of rhetoric and audits muffles and distracts the charities while the government pushes through major policies and programs without proper public conversations. And the lack of full public participation in debates, including the input of the charities that are experts in their Mission topics, dulls the very vigor of our democracy as well as risking our future through potentially poor policy choices.
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.