- Hit List
- Documentation Project
The Canada Revenue Agency (CRA) has initiated an audit that could result in Tides’ loss of charitable status. Harper officials accuse progressive charities like Tides of engaging in “advocacy” and “political activities.” Tides Canada has been accused of “laundering” funds for “radical” organizations that engage in “non-charitable” activities.
A pro oil sands lobby group named Ethical Oil with close ties to the Harper government has filed a “complaint” against Tides with the CRA. Tides’ spokesperson has said that the charity is in full compliance with the law.
In an open letter dated January 9, 2012, Natural Resources Minister Joe Oliver decided to attack NGOs and social justice advocates who oppose a controversial pipeline project. He portrayed environmentalists as “radicals” who “threaten to hijack our regulatory system to achieve their radical ideological agenda” and who “use funding from foreign special interest groups to undermine Canada’s national economic interest.”
Later, in May 2012, Tides Canada was recognized by Imagine Canada, Canada’s national organization for the non-profit sector, as one of the country’s leading charitable organizations “that embody excellence in administration, transparency, and governance.”
As it was being honoured by Imagine Canada, Tides was targeted by yet another CRA audit.
Reacting to the news about the new audit, Ross McMillan, CEO of Tides, told reporters that it seemed to target Tides’ programs seen as critical of Conservative government policy: “Some of the information requested of us by CRA does not appear to be random – many of the questions concern [...] projects with views that are not always aligned with government perspectives on both social and environmental policy.”
Earlier, in April 2012, McMillan expressed similar concerns, telling the media “I do think it's very likely... that the government is really looking at environmental charities, and looking for ways to limit the effectiveness of those charities.”
Hostile environment for progressive charities
The CRA has been investigating charities more forcefully, seeking to enforce more aggressively existing federal tax laws that requires a charity to devote “substantially all” of its activities to charitable work. This has been interpreted to mean that no more than 10 percent of its total resources a year can be devoted to political activities and advocacy.
Although the 2012 federal Budget severely cut government activities and services, the Harper government allocated an extra $8 million to the CRA to enhance its capacity to audit charities in order to ensure their compliance with the law. The CRA’s intensifying scrutiny of charitable organizations took place alongside concerted efforts by ministers in the Conservative government to vilify those voicing concerns for the environmental repercussions of oil sands development.
In April 2012, Environment Minister Peter Kent had accused environmental groups of laundering “offshore foreign funds for inappropriate use against Canadian interests.”
In May 2012, Prime Minister Harper declared before the House of Commons that “What is incumbent upon all charities is that they respect the laws regarding political activities. Those laws are clear,” he said “we will make them even clearer.”
These statements by the Conservative government led Philanthropic Foundations Canada, an umbrella group of charitable donors, to voice its concern that “the measures and the rhetoric [of the government] will create a chill around public policy and advocacy work.” Stephen Huddart, president of the J.W. McConnell Family Foundation, one of Canada’s largest and oldest philanthropic foundations, declared “I think what we have to be concerned about is the fear that people have to speak up or take a position on an issue of public importance.” Huddart also underscored the fact that charities have a long history of taking positions on matters of public interest.
Several environmental charities and nonprofits, and well-known public figures like David Suzuki, have now spoken out against what they see as an ideological and economically-motivated attack on environmental charities. On June 4, 2012, hundreds of organizations coordinated the Black Out Speak Out campaign to protest this trend and the additional funding to the CRA proposed in the federal budget, Bill C-38. Tides Canada publicly supported this action.
The complaint against Tides is the latest in a series of concerted attacks aimed at civil society organizations that defend human rights, social justice and that promote informed public debate on public policy issues.
Ethical Oil’s complaint to the CRA against Tides
On August 8, 2012, a group with Conservative ties called Ethical Oil filed a 143-page complaint to the CRA to demand that Tides Canada be audited and that its charitable status be revoked if found in violation of the CRA’s 10 percent advocacy rule. In the report prepared by a large law firm, Ethical Oil accuses Tides of undertaking “impermissible political activities” and of “laundering tax-privileged funds” from donors to groups that engage in “non-charitable” activities.
Pointing to organizations such as ForestEthics and People for the Ethical Treatment of Animals, as well as The Tyee news website, Jamie Ellerton, Executive Director of Ethical Oil, justified the complaint in an email explaining that Tides’ “conduit” role “is not charity and [we] maintain this accounting trick concocted by Tides should be reviewed by the CRA.”
A day after Ethical Oil’s complaint was submitted to the CRA, Natural Resources Minister Joe Oliver said “we want charitable organizations to comply with the law, and the law says that the vast bulk of their activities and money must be spent in charitable activities." Minister Oliver also said "there may or may not be an investigation by CRA of that organization as a result of a complaint."
Ethical Oil is a registered non-profit NGO whose mission is to promote the oil sands of Alberta. The group’s Executive Director, Jamie Ellerton, along with Alykhan Velshi, who played a key role in establishing Ethical Oil, are former Conservative government staffers who worked with Citizenship and Immigration Minister Jason Kenney. Velshi is currently a senior official in the Prime Minister’s Office. Conservative pundit Ezra Levant is the organisation’s president, treasurer and founding director.
The corporation’s website features a contact form to report directly to Revenue Minister Gail Shea any “radical groups masquerading as charities.”
Ethical Oil has also sent complaints to the CRA to revoke the charitable status of both the David Suzuki Foundation and a group called Environmental Defence.
- January 9, 2012: Natural Resources Minister Joe Oliver declares in an open letter that environmentalists are “radicals” who “threaten to hijack our regulatory system to achieve their radical ideological agenda” and who “use funding from foreign special interest groups to undermine Canada’s national economic interest.”
- March 2012: The federal Budget 2012 allocates an additional $8 million to the CRA in order to enhance its capacity to audit charities and make sure they are in compliance with laws governing political advocacy.
- April 2012: Environment Minister Peter Kent accuses environmental groups of laundering “offshore foreign funds for inappropriate use against Canadian interests.”
- May 2012: Prime Minister Harper reiterates before the House of Commons that “what is incumbent upon all charities is that they respect the laws regarding political activities. Those laws are clear,” he adds, “we will make them even clearer.”
- May 2012: Tides Canada is recognized by Imagine Canada as one of a few charities and nonprofits “that embody excellence in administration, transparency, and governance.”
- May 2012: The CRA announces it has started to audit Tides for the year of 2008-2009.
- June 4, 2012: Hundreds of organizations take part in the Black Out Speak Out campaign to protest Bill C-38 and the punitive auditing of selected charities by the CRA.
- August 8, 2012: The pro-oil sands group Ethical Oil files a 143-page complaint to the CRA accusing Tides Canada of “laundering” funds for organizations that engage in “non-charitable” activities and asking the CRA to audit Tides and potentially revoke its charitable status. These allegations have been denied, and it was reported that there “may or may not” be a CRA investigation as a result of this complaint.
Role or Position
Tides Canada is a leading and respected Canadian charity. Created in 1999, Tides offers innovative philanthropic, financial, and project management services for what it calls changemakers – philanthropists, foundations, activists, and civil organizations. Tides works on issues like water and oceans, environmental conservation, climate and energy solutions, food, the arctic, social inclusion, and civic engagement. Tides also acts as a foundation for smaller organizations, enabling donors “to do their philanthropy efficiently rather than setting up their own foundations."
Implications and Consequences
- Equality & 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 are being especially singled out and labeled as “radicals” or “eco-terrorists.”
- Democracy: The overly-zealous investigation of progressive charitable activities is extending the word “political” to cover public interest and policy work, long a proper domain of charities in Canada.
- 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 labeled “political”. But the current attacks are doing something very effective: by labeling progressive charities as “political organizations” the Harper 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 on the rights of peaceful assembly and freedom of association.
- 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.
- Equality: While progressive organizations are targeted by a hitherto unknown group that has the means to launch a significant legal attack, well-known organizations that promote policies aligned with the Conservative government continue to put forward such public interest positions with impunity and with no impact on their charitable status.
Date published: 27 September 2012
Photo from Tides Canada.