Which Charities are Being Targeted by CRA
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.