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Pattern of Charity Audit Bias 'Disturbing' Says Free Speech Advocate

New Broadbent study shows Ottawa acting like Chinese gov't, says Canadian Journalists for Free Expression.

By Jeremy J. Nuttall 22 Oct 2014 | TheTyee.ca

Jeremy J. Nuttall is The Tyee's Parliament Hill reporter in Ottawa. Find his previous stories here.

This coverage of Canadian national issues is made possible because of generous financial support from our Tyee Builders.

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PM Harper: urged by Broadbent Institute to create an independent inquiry to investigate whether CRA audits are politically biased. Photo: pmwebphotos. Creative Commons licensed.

An organization dedicated to free expression is calling the actions of the Canada Revenue Agency "disturbing" after Tuesday's release of a study indicating right-leaning charities have been ignored by the government's move to audit charities.

The study was released by the left-leaning Broadbent Institute and shows of the all the charities audited by Canada's revenue department, right-wing charities seem to have evaded the CRA's radar.

The institute said the findings show the audits to ensure charities are not being used for political purpose are in fact political themselves.

Tom Henheffer is the executive director of Toronto-based Canadian Journalists for Free Expression, an organization with board members including journalists for the Toronto Star and CBC.

Henheffer said the Broadbent Institute's study confirms what has been suspected since the audits began.

"They want to bully people into not speaking out against them, that's the entire point of the audit," he said. "And it's working, that's the really sad thing."

While investigating the story The Tyee has had charities decline to comment or divulge information about those conducting the charity audits, saying they fear retribution from the government.

Henheffer said he's heard the same sentiments, adding organizations are "terrified" and checking with their lawyers.

Vague rules sow fear

One of the concerns is what Henheffer said are ambiguously written guidelines as to what is considered political activity.

He said that could result in coming down on groups for being "too political" or leaving them alone entirely, dependent on what they are saying, pointing out that many charities under fire were complained about by the pro-tarsands group Ethical Oil.

"This is very much the same kind of tactic that the Chinese government uses," he said. "It's disturbing I feel justified in saying that... we're an organization that doesn't like to ring alarm bells when there isn't any cause or use hyperbolic language."

CRA should have noted skew: Broadbent director

According to the study, Canadian charities are allowed to dedicate 10 per cent of their fiscal resources to political activities and must declare the amount spent to the CRA.

Such activities include calls to political action, or indicate in materials an intention to pressure government or elected officials to change laws or policy.

The study looked at 10 charities' publicly available tax filings -- including the Fraser Institute -- then examined their work.

The organization's executive director Rick Smith said right-leaning groups reported no political activity, yet were making high profile public statements of a political nature that should have grabbed the attention of the CRA.

While some groups -- including the Fraser Institute -- declined to answer, those that did said they were not audited.

"So to us this is yet another piece of evidence added to a mountain of existing evidence that the CRA is less interested in ensuring an even handed compliance with its regulations than it is in serving as a tool of retribution for the Harper government," Smith said.

The Broadbent Institute is calling for an independent inquiry to investigate the true motives of the CRA.

The CRA told The Tyee it has not reviewed the study by Broadbent Institute, said it does not base studies on politics and that the full list of charities being audited has not been made public, insisting the study would be based on incomplete data and assumptions.

According to the CRA there are many reasons, including random choosing, for audits.

It also said elected government officials play no role in determining what charities will be audited.

"No one from the minister of revenue's office has suggested which charities to audit," the CRA said in an email. "The process for identifying which charities will be audited for any reason is handled by the Charities Directorate of the CRA alone in a fair and consistent way."

The study made its way to the House of Commons Tuesday as opposition took shots at the Conservative government, which also insisted the audits are not political in nature.

Worry that chill will persist

But Henheffer said the opposition's anger over the report doesn't give him comfort.

He's concerned even if another party comes into power after the 2015 election they will continue with the audits.

"The problem is when one government gets away with things it becomes a non-partisan issue and then other governments will try to get away with it too," he said. "I frequently worry that permanent damage has been done that we'll just never be able to fix."  [Tyee]

Read more: Federal Politics,


Highlights from the Broadbent Institute's new report:

Dozens of audits. "Charities are required to make annual public filings to the CRA related to their finances and activities, including the percentage of political activity undertaken. The CRA does not release the name of charities that undergo political-activity audits, although it is known that 52 such audits have been launched since 2012."

Signs left-leaning orgs are targeted. "Of the known groups targeted in this new round of audits, many are environmental, international development and human rights organizations, including household names such as Amnesty International, the David Suzuki Foundation and the Canadian Centre for Policy Alternatives (CCPA).

"A common trait of many of the known groups is that they have been critical of Conservative government policies. In fact, in an access to information request released to the CCPA, the CRA cites 'biased' and 'one-sided' research as part of its rationale for the audit, a characterization disputed by nearly 400 academics in an open letter calling on the government to end the ongoing CCPA audit. And in other cases, groups are being re-audited after having recently completed CRA audits that gave them a clean bill of health."

Right-wing charities claim no political activity. "Four charities and many other right-leaning charities are engaged in activity that would appear to fit the CRA's own definition of 'political.' All of them have claimed zero per cent political activity over the past three years, raising questions about the accuracy of the filings with respect to their interpretation of the definition of political activity."

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