Budget will crack down on charities with links to terrorists, organized crime: Jim Flaherty

OTTAWA – Next week’s federal budget will contain changes that could affect the charitable status of certain organizations, as some environmental groups now being audited by the federal government worry they’re being deliberately targeted.

Finance Minister Jim Flaherty suggested Friday that the budget will zero in on some groups with questionable activities, including those with links to terrorist organizations and organized crime.

The government has already announced it is reviewing the political activities of many charitable groups – including some environmental organizations critical of the government – and whether they complied with tax rules to maintain their charitable status.

Flaherty said he’s not concerned about suggestions that changing rules for charities could be seen as a way to silence critics of the government.

“If the critics of the government are terrorist organizations and organized crime, I don’t care,” he said.

More than half a dozen environmental groups, including the David Suzuki Foundation, Environmental Defence, Tides Canada and the Pembina Foundation, are being audited by the Canada Revenue Agency.

There are concerns among environmental organizations that the Conservatives are trying to silence groups from criticizing the government, creating what they think is a “chill” through the charitable sector.

“You’ll have to wait for the budget on the exact measures that are to be taken (on charities). The concern, though, remains the same, that there are some terrorist organizations, there are some organized crime organizations that launder money through charities and that make donations to charities,” Flaherty told reporters in Toronto.

“That’s not the purpose of charitable donations in Canada so we are becoming increasingly strict on the subject. You’ll see some more on Tuesday” when the budget comes down.

The Conservative government announced in the 2012 budget it would spend $8 million over two years to investigate the political activities of some charities in Canada, including ongoing monitoring and audits.

Some environmental groups that are often critical of the government say the Conservatives are conducting a witch-hunt on charities and forcing them to do an excessive amount of paperwork, which drains their resources.

The groups are being asked to report many details of their activities, including their use of social media and calls to action.

“There appears to be a higher number of these (audits) at the current time and many appear to be focused, for example, on environmental organizations,” said Michelle Gauthier, a vice-president with Imagine Canada, a major umbrella organization for charities across the country.

“What we’re finding is that the auditing on political activities, and particularly when the rhetoric gets ratcheted up, that it creates, unfortunately, a chill among charities.”

The group is anxiously waiting to see what will be included in the budget, but says all Canadians should be concerned if voices of charities “are in any way limited, jeopardized or silenced.”

Tim Gray, executive director of Environmental Defence, said his group thinks the complaints process about environmental charities is being driven by Ethical Oil, an oil sands advocacy group created by Alykhan Velshi, now the director of issues management in the Prime Minister’s Office.

Ethical Oil says three groups stand out “for being highly political or engaging in partisan activity”: Environmental Defence, the David Suzuki Foundation and Tides Canada.

“We’ve detailed their actions and sent letters to the Canada Revenue Agency calling for them to be reviewed,” Ethical Oil says on its website.

But Gray, of Environmental Defence, said, “The ground is shifting and there has been no consultation on why or how the rules of governing charities should shift.”

“There is a chill.”

Tides Canada president Ross McMillan, in a statement, said, “all Canadians should be deeply concerned” if charities are being targeted by the CRA for political reasons.

In December, Flaherty said the government was reviewing the activities of some groups with charitable status, including environmental organizations, and hinted changes could come in the 2014 budget.

“So if I were an environmental charity using charitable money, tax-receipted money for political purposes, I would be cautious,” Flaherty said at the time.

Canadian legislation allows the estimated 80,000 charitable organizations in Canada to spend up to 10% of their resources on “political” activities, generally related to their social or political mandate.

Charities also have the advantage of giving tax receipts to donors, but they could have that status revoked if they are found to be conducting too much political activity.

After the first year of the government’s review of charities, including nearly 900 audits, the Canada Revenue Agency revoked the charitable status of only one organization – Physicians for Global Survival – for engaging in excessive political activity.

In Ottawa, Paul Calandra, parliamentary secretary to Prime Minister Stephen Harper, said Friday the CRA decides on its own which groups it will audit and does this independently of the government.

“If they (CRA) have some concerns, then we’ll leave that up to CRA to make those determinations on their own,” Calandra told reporters. “We don’t direct CRA to do their activities. They do it on their own.”

But NDP House leader Nathan Cullen said there is little doubt the Harper government is specifically targeting environmental organizations that oppose the government’s agenda.

“So if a group has the audacity to say that they’re against a certain pipeline project or any project that goes against Conservative ideology, then they get spied upon and they get audited by CRA. This is a problem,” Cullen said.

“You just don’t see other charities being attacked like this government attacks environmental groups.”

Postmedia News, with a file from The Canadian Press