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Like many organizations working in the area of international development, human rights and poverty alleviation, Oxfam Canada has found itself under increased scrutiny by the federal government.
Like all federal non-profits and charities, Oxfam was required to file articles of continuance to comply with the federal Not for Profit Act before October 17, 2014. While reviewing Oxfam's submission, the charities directorate of the Canada Revenue Agency (CRA) told Oxfam, in April 2013, that in order to keep its charitable status, Oxfam can work to “alleviate” poverty but not “prevent” it. CRA reportedly wrote that "Relieving poverty is charitable, but preventing it is not," and that, "Preventing poverty could mean providing for a class of beneficiaries that are not poor."
Robert Fox, who was executive director of Oxfam in 2014 at the time of these exchanges, described the discussions with CRA over Oxfam's mission statement as “absurd.”
The Canada Not-for-Profit Corporations Act is federal legislation passed in 2009, coming into force in October 2011. It was intended to update the machinery for incorporating and regulating not-for-profits, which had existed since 1917 and was regarded as out-of-date. Canadian academics James Rice and Michael Prince observe that the new Act is part of the Harper government’s regulatory reform agenda for charities. According to Rice and Prince, the Harper government’s approach to the voluntary sector reflects a Victorian-era reluctance to engage with many social issues, including poverty reduction.1
Approximately 19,000 not-for-profits, including charities, were incorporated under the old legislation. They had until October 17, 2014, to apply for a certificate of continuance under the new Act; if they did not, they would automatically be dissolved. In the application for a certificate of continuance the applicant had to state the purpose of the organization, among other information.
The CRA uses information gleaned from the application for the certificate of continuance to screen the mission and objects of charitable organizations. The CRA then takes action against charities identified as not meeting the criteria for tax exemption.
Oxfam submitted its application for a certificate of continuance as required, and described its purpose as “to prevent and relieve poverty, vulnerability and suffering by improving the conditions of individuals whose lives, livelihood, security or well-being are at risk.”
In the course of Oxfam’s review, the organization was told that "preventing poverty" is not an acceptable goal for charitable purposes. According to media reports, the group was told that "relieving poverty is charitable, but preventing it is not."
The Shrinking Space for Dissent for Charities
The Oxfam story is of a piece with a number of similar incidents and reports. The federal government has deployed an unprecedented range of restrictive measures to reduce the legal, financial and political space available to civil society organizations and human rights defenders.2 Consequently, civil society organizations and coalitions, writers and think tanks have accused the CRA charities directorate of using aggressively narrow interpretations of “political activities”, thus whittling down mission statements/charitable purposes of established organizations that have a progressive mandate and that does not align with Canada’s current Conservative government.
Voices-Voix, CIVICUS and Lawyers Rights Watch Canada (LRWC) have noted this trend with growing concern. So too have Amnesty International, the British Columbia Civil Liberties Association (BCCLA), CIVICUS, and Human Rights Watch. In 2013, Mr. Maina Kiai, the United Nations Special Rapporteur on freedoms of assembly and association, condemned the apparent trend of increasing the regulatory burden on not for profits and restricting the activities of a large range of organizations.
Losing charitable status means that organizations cannot issue charitable receipts for donations and there are considerable reputational consequences.
International development and women’s equality organizations also appear to be in the current Canadian government’s sights, as are communities that seek to exercise a right to dissent and to protect and promote human rights. Targets documented by Voices-Voix include Canadian Mennonite Relief, Forest Ethics, Physicians for Global Survival, Sierra Club Canada Foundation, Tides Canada, and the United Nations Platform for Action Committee. Canadian Press reports have identified others under CRA scrutiny, including Amnesty International, the Canadian Centre for Policy Alternatives, Canada Without Poverty, the David Suzuki Foundation, Ecology Action Centre, Environmental Defence Canada, Equiterre, Pen Canada, the Tides Canada Initiatives Society, and the United Church of Canada (which includes Kairos). IRFAN-Canada has lost its charitable status.
The group of audits targeting selected charities under a special project of the CRA (for which additional funds were allocated) appears to have affected more than fifty organizations since 2011. CBC news has reported that some groups have been engaged in discussions and negotiations for more than two years. The need to defend themselves to the CRA necessarily reduces their ability to conduct the work to which they are dedicated, whether it be poverty alleviation or environmental protection.
While audits are part of what the CRA does to ensure compliance with the law, recent trends point to an increasingly restrictive approach. The government denies political motivation.
However, two 2014 reports support allegations that groups are being targeted based on their progressive or left-wing leanings. The first is a study prepared by Gareth Kirkby, which confirmed evidence of an "advocacy chill"3 among interviewed charitable groups claiming that they have altered their behaviour in the face of CRA audits. The second is a report issued by the Broadbent Institute, which shows evidence that progressive organizations have been singled out:
"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. In other cases, groups are being re-audited after having recently completed CRA audits that gave them a clean bill of health."
Most recently, scholars have raised concerns about the co-opting and restriction of civil society organizations in modern welfare states, including in Canada.4
By labeling progressive charities as “political” and thus undeserving of charitable status, the Harper government is deplying a superficially neutral regulatory mechanism to undermine organizations with which it disagrees. Less threatening groups that provide services but undertake no research or public interest work, and those that support a Conservative agenda, or are right wing think tanks, carry on unimpeded. Media reports indicate that conservative charitable organizations such as the Fraser Institute that are clearly “political” – if one uses the same yardstick as that deployed for progressive organizations – have been exempt from the “political” audits.
- 1963: Oxfam Canada is founded
- October 2011: New Canada Not for Profit Corporations Act comes into force
- April 2013: The CRA Charities Directorate tells Oxfam that in order to keep its charitable status, the group can work to “alleviate” poverty but not “prevent” it
- October 17, 2014: Deadline to file articles of continuance to comply with new Act
1 Changing Politics of Canadian Social Policy (2nd ed) by James J. Rice, Michael J. Prince University of Toronto Press 2014, at 264 [Changing Politics].
2 Changing Politics, supra note 1.
3 The term “advocacy chill” has been used by several authors to describe the inhibitory effect on civic participation as a result of government laws and funding regimes that have affected the extent to which civil society organizations are prepared to speak out (Scott, 2003; Phillips, 2009, DeSantis, 2010).
4 Kathryn Chan, "The Co-optation of Charitable Resources by Threatened Welfare States" (2015) 40 Queen's LJ (forthcoming)
Role or Position
Oxfam was founded in 1963. Today, it is one of Canada’s leading and most respected international development and humanitarian organizations, spending about $32 million annually.
As explained on their website, the charity works to “find practical, innovative ways for people to lift themselves out of poverty and thrive.” Oxfam also says that its mission includes saving lives, rebuilding livelihoods when crisis strikes and campaigning so that the voices of the poor can influence the local and global decisions that affect them.
Oxfam works in Africa, Asia, and Central and South America, with a special emphasis on women's rights and on ending the injustices that cause poverty.
Implications and Consequences
Democracy: Canada’s public policy is stronger for having a multiplicity of voices from civil society organizations. By constricting the space available to organizations using the Income Tax Act, Canada’s democratic space is weakened. Organizations are fearful of speaking out, and will tend to realign their activities in order to comply with government objectives.
Democracy: The overly zealous investigation of progressive organizations has restricted the scope of charitable activities. By characterizing the word “political” as covering public interest and policy work that is connected to charitable objects, the CRA has in effect limited activities that have long been considered the proper domain of charities in Canada.
Democracy: The Conservative government is taking an aggressive interpretation of the term “political activities”. However, an open and purposive interpretation of fundamental freedoms such as freedom of association should mean that charitable organizations have the right to organize, to engage in public debate and decision making, and to advocate for policy changes without these activities being considered as “political.”
The current trend creates a climate of fear whereby Canadian organizations can be intimidated, afraid to speak up and take positions on important public issues for fear of being labelled as “terrorists,” having their federal funds cut, or compromising their ability to raise money from the pubic.
Equality & Free Speech: Progressive civil society organizations are felling the chill, not only of funding cuts but also of the threat to their charitable status. This disenabling environment has had particular consequences for organizations that have found themselves unable to raise funds and seek support from the public.
Published on Jan. 8 2015