There was an uproar when the federal government increased the Canada Revenue Agency’s audit funding. Alarmist activists and CBC journalists shot out propaganda warning of an “advocacy chill”, claiming good people at good charities are feeling the screws of “the Harper Government”. Claims were made that Harper himself directly instructed the CRA which charities they should audit. Of course, nobody provided any evidence of this accusation.
The CRA doesn’t release the names of organizations it’s auditing, but several charities disclosed their audits to the media. Audited groups included the Canadian Centre for Policy Alternatives, the David Suzuki Foundation, TIDES Canada, Environmental Defence, and Equiterre. One thing the former five groups have in-common is that they’ve had working relationship with militant activists.
Not so surprisingly, one of the audited charities didn’t add their name to the media’s list until this week. Montreal based Alternatives International not only works with militant activists, they’re at ground zero. You see, Alternatives is basically the Canadian arm of the World Social Forum- a militant social movement that’s behind the anti-globalization movement. That doesn’t sound very charitable- does it?
Well it turns out it isn’t! Or at least, that’s what the CRA has to say. It was announced this week that the CRA made a mistake assigning charitable status to Alternatives in 2004. Now, with their charitable status being revoked, Alternatives is warning the world that they may soon be out of business.
If you’ve ever read Alternative’s website, none of this will come to you as a surprise. Each of their “three main reasons” for existing is purely political. Alternatives exists to help push a global political movement, they admit this on their website- the rules clearly state that charities can only focus 10% of their work on advocacy, it’s hard to see if Alternatives does anything but advocacy. Director Michael Lambert’s on description of the group as an “international solidarity organization” seems to confirms this.
But there’s more to the story. It seems that Alternatives operates a lot like TIDES Canada does. Rather than administering programs, they send money to agencies in other countries that do the work. The CRA now says that this activity isn’t within the definition of a charity.
Alternatives was a major sponsor and organizer behind this summer’s Peoples Social Forum, a revolutionary conference whose website called our country “so called Canada”. One of the conference’s goals was to come together with a “cohesive strategy to get Harper out of office”. Partisan political activity is banned.
We should both congratulate the CRA for a job well done. It seems obvious that other charities being audited are in similar situations, let’s hope they keep up the good work. But we should also question the CRA’s competence- how could they made such an obvious mistake like they did at Alternatives? How many other mistakes have they made?
That said, when all is said and done, it’s the charity’s directors who have the responsibility to be compliant. If a corporate director made similar compliance violations, the people at Alternatives would no doubt be calling for their heads. What will happen to Alternative’s heads?
Dodgy charities live in interesting times…
now how about they give back every penny that they benefited from having that status? There’s a network of fake charities and they have all reaped the rewards of existing for years. They counted on eventually being caught, shutting them down is not enough.
In this case it was the CRA’s fault for granting them that status to begin with, so it may be difficult to make them, or their donors, pay back anything they got to keep as a result of charitable tax recipes. But in the cases of Tides, the David Suzuki Foundation, and several others, they have intentionally committed fraud by renting out their charitable status to third parties, and by allowing donors to launder their funding of those third party groups. In the case of the D.S.F they were acting as a political lobbyist firm, and even endorsing political campaigns and or candidates.
I need to add an editorial note here – the above comment that TIDES “intentionally committed fraud” is only opinion, this hasn’t been proven in court (but I can’t wait for the day it’s challenged there).
Somehow I don’t think that they will make too much of a fuss, especially with the eyes of CRA auditors looking through their books, but the disclaimer was a wise move. I probably should have added that they “may have intentionally committed fraud” .
What I can’t pin down is why they seem to want to represent themselves as charities, a political party can issue tax receipts too, and there are no restrictions on what activities they get involved with there, other then violating the criminal code. Of course with a political party you can’t accept donations from foreign donors, at least not legally, and there is a limit to the size of a given donation, so those may be factors in this. However I have a feeling that the reason for the charity registrations may be somewhat of a P.R front, register as charities to avoid scrutiny.
That being said I would like to see what will happen should the CRA strip Tides of their charitable status. Greenpeace challenged them in court for a time, but ultimately lost since everything they did was political activism, from which they were turning a profit that they remitted back to the executives in Amsterdam. The final blow to G.P’s charity status came back in the mid 90s under Chretien, so were the Liberals targeting environmental groups for big oil too?
Interesting perspective. I hadn’t thought of the PR angle as an advantage to being a charity – I can see your point there, definitely a possibility.
As for being a political party, it’s true that they can’t accept foreign donations for federal and provincial, but did you know it’s perfectly okay for BC municipal politicians and parties to accept foreign money? It blew my mind when I first heard that, as much as it blew my mind nobody made an issue out of it during the last election. I’ve never heard of this happening anywhere else in the world, foreign donations (or donations from other municipalities even) are a danger to our sovereignty.
Oh, and sorry to be such a stickler about your comment, I’ve been uber careful not to expose this site to legal challenges. It seems to be working, three years and not a single legal challenge (and only one bogus complaint from a $22 lawyer) so far. :)
Becker is not entirely correct. Charity tax-exempt statuses have been granted to lunatic organizations like David Suzuki because their interference in partisan politics was never officially declared. They violated taxation laws until the spotlight of scrutiny was cast upon them. Nowadays, the public can rely upon genuiNEWitty, Sun News, and Pesticide Truths to rat these guys out !
The political activism and entry into partisan politics may not have been officially declared in many cases, which may explain how they slipped by and were granted charitable status. However the question remains, why did they seek charitable status in the first place? Was it solely for the issuing of tax receipts? Perhaps it was, but they could register as political parties and still do the same, and lambaste the government all they wanted. Was it for P.R purposes, so as to avoid scrutiny? I think this may be part of it, after all now that many are getting caught acting as hand maidens of foreign meddlers they are crying fowl about “How the Harper government is targeting charities” as though illegally blocking roads and building camps on crown land equates to feeding the poor. But I suspect, at least in the case of Tides, it’s for the purposes of concealing who their donors are.
Wow ! We are not often impressed by the acumen and insight of other commentators. Congratulations or your well-thought-out interpretation of events.
The CRA mills of the Gods grind slowly but they grind exceedingly fine. As a former employee I can attest to the fact that they work at a snail’s pace but are very thorough.