Sierra Club Canada Foundation

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What Happened

In December 2012, a pro-oil sands lobby group named Ethical Oil with close ties to the Conservative government filed a complaint with the Canadian Revenue Agency (CRA) against the Sierra Club Canada Foundation (SCCF). The objective was to trigger an audit from the CRA and, potentially, the loss of charitable status for the Foundation.

The Conservative government has made claims that environmental charities like Sierra Club Canada are engaging in “radical” behaviour that is not in line with Canada’s national interests. 

In April 2015, the SCCF revealed that the CRA had launched a political activities audit of their work, adding them to the list of other environmental and progressive charitable organizations facing increased scrutiny since 2012.

On January 9, 2012, Natural Resource Minister Joe Oliver issued an open letter characterizing environmental groups and advocates as “radicals” whose goal is “to stop any major project no matter the cost” and who “threaten to hijack our regulatory system to achieve their radical ideological agenda.”

Following Minister Oliver’s comments, the Philanthropic Foundations Canada organization, a collective membership of wide-ranging philanthropic organizations, expressed concern over “a chill descending on the sector.”

On March 29, 2012, the federal government released its 2012 budget which increased funding to the CRA with the aim of improving “compliance activities with respect to political activities by charities.” Originally slated at an additional $8 million in CRA funding for 2012-2014, the total eventually reached $13.4 million stretching to 2017. With this increased funding, charities can expect increased investigations and allegations of misconduct. This increase took place at the same time as massive government cuts to all departments, especially Environment Canada.

The Income Tax Act requires a charity to “devote all of its resources to charitable purposes and activities” with the exception of a “small amount of resources to be used for political [non-partisan] activity,” about 10% of an organization’s budget.

Since the CRA was given the mandate and funding to increase their scrutiny of the political activities of audits, many of the country's most prominent environmental and progressive charities have faced onerous audits. The fact that few, if any, charities whose policies are in line with the Conservative government's policies have faced audits has raised concerns of political bias in the process—which the government and CRA have denied.

“Ethical Oil” files complaint to CRA

On December 18, 2012, Sierra Club Canada Executive Director John Bennett announced that the Foundation had been reported to the CRA with the aim of revoking their charitable status.

Lawyers representing the pro-oil sands group Ethical Oil, which has ties to the current Conservative government, sent a copy of the 65-page complaint submitted to the CRA on December 5

The complaint alleges that SCCF is “acting as a conduit to provide funds to Sierra Club Canada.” Among the many activities cited, the complaint points to the Sierra Club Canada’s involvement in the June 2012 Black Out Speak Out campaign, which raised awareness about how Bill C-38 would “weaken environmental laws and silence the voices of those who seek to defend them.”

This complaint is occurring in the context of an increasingly aggressive attitude towards progressive charities.

The SCCF is only one of several organizations under scrutiny initiated by “Ethical Oil”. Similarly, Tides Canada, the David Suzuki Foundation and Environmental Defence have all received notice of filed complaints to the CRA. In 2012, David Suzuki had decried the fact that “every day there’s a disparaging revelation, a new accusation, pitting charities against federal leaders or special interest groups.”

The SCCF had been audited in January 2011 and on the subject of another potential audit, John Bennett noted that he is confident the CRA will find no wrongdoing, but, he said, “it does distract us from our real work.”

On December 20, 2011, John Bennett had issued an end of year statement regarding the “disturbing pattern emerging in the public dialogue on environmental issues that has the potential to do significant damage to the environmental movement and our ability to positively influence public opinion.”

A year later, the pattern continues. In December 2012 after being notified of the complaint against SCCF, Bennett said of his earlier concerns: “When I wrote about my fears last year I correctly called what was happening for what it was: an attack on democracy and the environment.”

Political Activities Audit

In April 2015, Bennett revealed that the SCCF was facing a political activities audit by the CRA, set to begin on May 11, 2015. In a blog post, he denounced the audit, writing:

Clearly, the governing party is targeting groups it sees as its political enemies and is using the taxpayer’s money and a government enforcement agency to do it. It is an intimidation campaign designed to harass and distract organizations from doing the charitable work their donors want them to do.

He ascribed the delay between the complaint against the SCCF filed by Ethical Oil and the launch of the CRA's increased audits and hs own organizations audit to the fact that the SCCF was last audited just in 2011. "Sierra Club Canada Foundation was last audited in January 2011. The auditors are returning on May 11th. There are about 100,000 charities in Canada. Have there been 99,999 audits of charities in the last four years?" he further asked in the post.

Bennett does not worry that the Sierra Club will have been found to be in the wrong, but does fear the amount of resources and time that such an audit will take up, he told the CBC. "It's a huge undertaking for us to do this," Bennet said.

Relevant Dates:

  • January 9, 2012: Natural Resources Minister Joe Oliver releases an open letter that proclaims environmentalists are “radicals” who “threaten to hijack our regulatory system to achieve their radical ideological agenda” and “undermine Canada’s economic interest”.
  • March 29, 2012: The 2012 federal budget increases funding to the CRA in order to better the ability to audit charities over compliance concerns regarding political activities.
  • June 4, 2012: Thousands of individuals and hundreds of organizations take part in the Black Out Speak Out campaign to protest Bill C-38.
  • December 5, 2012: The conservative group Ethical Oil files a complaint to the CRA about the Sierra Club Canada Foundation (SCCF) seeking to revoke the Foundation’s charitable status.
  • December 18, 2012: Sierra Club Canada Executive Director John Bennett announces publicly the Ethical Oil complaint.
  • April 2015: Bennett announces that the SCCF is facing a political activities audit by the CRA, set to begin on May 11, 2015.

Role or Position

The Sierra Club Canada Foundation (SCCF) has been active in Canada since 1972 and is a registered charitable organization with the Canada Revenue Agency. The SCCF mission is to advance the preservation and protection of the natural environment. The Foundation works towards this goal by making donations and funding environmental projects, education and research. It works closely with, but is distinct from, Sierra Club Canada.

Implications and Consequences

  • Democracy: The investigation of progressive charitable activities is proceeding on the basis that public interest and policy work, long a proper domain of charities in Canada, is somehow illicit advocacy and political activity. This essentially stifles innovations and strips the non-profit sector in Canada of its ability to work with government and broader society to propose innovative ideas to address intractable policy issues that underpin social problems.
  • Democracy: While the Conservative government may believe civil society should limit itself to apolitical charity work, Canadian citizens have a democratic right to participate in public decisions and engage in opinion-forming work. Canadian charities have been doing this work for decades without it being labelled “political.” But the current attacks are doing something very effective: by labelling progressive charities as “political organizations” the federal government is suppressing the activity of work that it disagrees with it, while leaving intact other organizations that provide services (but undertake no research or public interest work) or that support a conservative agenda. This is, ultimately, a political attack on charities and an assault of the rights of peaceful assembly and freedom of association.
  • Free Speech and Democracy: The current trend creates a climate of fear whereby Canadian organizations are afraid to speak up and take positions on important public issues for fear of being labelled as “terrorists,” having their federal funds cut, or having their ability to raise money from the pubic destroyed.
  • Free Speech: While progressive civil society organizations feel the chill of funding cuts, environmental charities that criticize resource extraction projects such as the Northern Gateway pipeline, or speak out about climate change, are being especially singled out and labelled as “radicals” or “eco-terrorists.”
  • Equality: While progressive organizations are targeted by a hitherto unknown group that has somehow obtained the means to launch a significant legal attack, well-known organizations that promote conservative policies continue to put forward such public interest positions with impunity and with no impact on their charitable status.


Photo from Sierra Club Canada.

Date published: 1 May 2013
Date updated: 1 May 2015


John Bennett - Silencing dissent in Canada 2/10

John Bennett speaks out about dissent in Canada and how environmental groups and those who criticize the government on environmental issues are vilified and intimidated by CRA audits.