PEN Canada’s street photography project on 2012’s Day of Imprisoned Writer. People on the streets of Toronto hold photos of writers who have been arrested for speaking up for freedom of expression. [Photo © Rita Leistner]
By Beth White
OTTAWA — The Canadian Revenue Agency (CRA) and Conservative government have been under a microscope for contributing to an “advocacy chill,” according to one charity executive.
Tasleem Thawar, executive director of the charity PEN Canada, describes the chill as charities not speaking out about policies for fear of being audited, losing funding, or losing their charity status.
“Many charitable organizations are concerned about what they are saying,” Thawar says. “They are more worried than they have been before about criticizing government policies.”
The 2012 federal budget gave the CRA $13.4 million towards auditing charities. The Broadbent Institute, a left-leaning think tank, published a study in October 2014 stating the federal government is using the audits to target charities that criticize its position.
“Whether it’s the intention to silence them or not, the effect is that charities feel silenced.” – Tasleem Thawar
However, the public only knows a fraction of the total number of charities being audited and even the charities in the process don’t know the reason why they are being audited.
PEN Canada audited
PEN Canada is one of the charities Some of the other charities open about being audited include: Tides Canada Foundation, the David Suzuki Foundation, Ecology Action Centre, Canada Without Poverty, Equiterre, the Canadian Centre for Policy Alternatives, and Amnesty International Canada. letting the public know they are being audited. Its mission is to defend freedom of expression in Canada and abroad, which, lately, is hitting closer to home.
Thawar received a call in April informing her PEN Canada would be audited but was not given the reasons why. This came two years after the Canadian Mennonite magazine received a reminder letter from the CRA in response to writing articles that “appear to promote opposition to a political party.” PEN submitted a freedom of information request hoping to clear up questions they themselves had.
They were curious to see what kind of analysis the CRA did to determine which charities were audited and how political activities were defined.
“[PEN Canada submitted the request] so that we ourselves could be educated about what activities might be offside according to the CRA and also so that we could make other charities aware,” Thawar says.
Under the Income Tax Act of 1985, charities must spend “substantially all” of their resources for charitable purpose and, in most casesThe CRA recognizes the 10 per cent rule can be difficult for smaller charities to meet, therefore, they provide a bit of a leeway. For example, charities that make less than $50,000 can spend up to 20 per cent on non-partisan political activity., can spend a maximum of 10 per cent on non-partisan political activities.
Thawar says the act is too vague in defining political activityThe T3010 states, “A registered charity may pursue political activities only if the activities are non-partisan, related to its charitable purposes, and limited in extent. A political activity is any activity that explicitly communicates to the public that a law, policy or decision of any level of government inside or outside Canada should be retained, opposed, or changed.”, therefore giving the CRA the reigns to interpret each case. She adds that, if charities are worried about losing their charity status and do not have clear rules to follow, it is understandable that they would keep their opinions on government policies to themselves.
Reporting political activity to the CRA
In the 2012 tax return, charities reported spending less than 0.2 per cent of their total income on political activity, according to Blumberg Segal law firm. Mark Blumberg, a partner who specializes in charity law, attributes the low number to underreporting.
“If you do political activities, you have to put it on your T3010 [charity tax form],” he explains. “For me that is the most obvious thing that charities have been falling down on.”
In 2012, PEN Canada reported spending zero per cent of their resources on political activity. The charity’s focus is on freedom of speech but Jim Creskey, a director at PEN Canada, says it fairly reported its expenses.
“You could maybe say that everything you do is political with impacts on society, the country, the province, the city, but I don’t think [PEN Canada is] political in a partisan sense, absolutely not,” he says.
Even taking underreporting into consideration, Blumberg has noticed most charities are spending much less on advocacy than they are allowed to spend. In other words, there is in fact an advocacy chill.
The CRA and government’s lack of transparency and clarity contributes to the chill but Susan Phillips, public policy and administration professor at Carleton University, says there are other fundamental factors at hand, including lack of resources and expertise.
“Many of them [charities] don’t know how to do advocacy well or they don’t see it as important,” she says. “I’d like to see them be much better at advocacy because I think it would bring out better public policy and better service delivery.”
Charities may have room to improve within the organizations, but Blumberg still feels the CRA needs to be able to share who and why charities are being audited.
“We have too much secrecy when it comes to charities and their affairs,” he says.
Until this happens, Phillips sees the appearance of government interference as “politicizing” the regulatory system and potentially discrediting the CRA.
“The fact that it has created such suspicion is itself a problem, since it makes it seem that there has been political interference, that the government has directed the regulator to take this kind of action,” she says.
Charities, like PEN Canada, are speaking openly about the audits, but the perception is stirring up fear for many charities, according to Thawar. She says the CRA needs to be clear about the process and if that process reveals the government doesn’t want charities to be political at all, it needs to become a broader public conversation.
“Whether it’s the intention to silence them or not, the effect is that charities feel silenced.”
