Right-Wing Charities Escaping CRA Audits: New Report from Broadbent Institute

Canada Revenue Agency

A new report from the Broadbent Institute raises fresh questions about whether Canada Revenue Agency (CRA) audits are being used as a politicized tool to pressure critics of the federal government. 

The report, Stephen Harper’s CRA: Selective audits, “political” activity, and right-leaning charities, says several right-leaning charities are reporting zero “political” activity while engaging in work that appears to meet the CRA’s definition.

We know charities that have been critical of policies of the Harper government are being audited by the Canada Revenue Agency. With mounting evidence suggesting bias in auditing decisions, we need to find out what’s going on here,” said Rick Smith, executive director of Broadbent Institute, a non-partisan organization founded by former NDP Leader Ed Broadbent.

Fifty-two charities are being targeted in a $13.4 million audit program launched by the federal government in 2012 to determine whether any are violating a rule that limits spending on political activities to 10 per cent of resources. Those charities include Environmental Defence, the David Suzuki Foundation, Canada Without Poverty, Ecology Action Centre and Equiterre.

The Broadbent report examined publicly available CRA tax filings of 10 charities and cross-referenced these with their publicly available work. In each case, the charities had reported that they had conducted no political activity between 2011 and 2013.

The Broadbent Institute’s review, which includes the Fraser Institute, the Atlantic Institute for Market Studies and Focus on the Family, provides examples of activity for each of the charities that appear to meet the CRA’s definition of “political.”

For example, on Oct. 22, 2012, the Fraser Institute released a report calling for the B.C. government to lift its moratorium on offshore oil and gas exploration, which appears to fall under the CRA’s guideline on what constitutes political activity, which states an activity is political if “the intention of the activity is to incite, or organize to put pressure on, an elected representative or public official to retain, oppose, or change the law, policy, or decision of any level of government in Canada or a foreign country.”

The report raises fresh questions about the CRA’s selection process for determining which charities are targeted for political-activity audits.

Other groups scrutinized in the Broadbent report are: Macdonald-Laurier Institute, C.D. Howe Institute, the Montreal Economic Institute, Canadian Constitution Foundation, Energy Probe Research Foundation, Frontier Centre for Public Policy and Institute for Canadian Values.

It’s unknown whether any of these groups are currently under audit.

The Broadbent Institute is calling for the establishment of an independent inquiry to examine CRA processes to ensure transparency and fairness in its decision-making criteria around political-activity audits and interpretations of “political” activity, and to ensure such processes are not subject to political pressures or interference. 

Political activity is a critical part of many charities’ work. Progressive or conservative, blunting the ability of civil society to advocate and to engage in debate and, occasionally, dissent should concern us all,” Smith said.

Photo: Obert Madondo via Flickr