Critics say Fraser Institute letter highlights...
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May 17, 2015  |  Vote 0    0

Critics say Fraser Institute letter highlights ‘enormous lack of clarity’ in charity-audit rules

A fundraising letter from the Fraser Institute penned by former premier Mike Harris shows a double standard in CRA audits, critics say

SIDEBAR

Is this political?

Some of the comments in a letter from Fraser Institute senior fellow and former premier Mike Harris:

• “Credit rating agencies have further downgraded the province’s credit rating, primarily because it’s very unlikely that this government will reverse course and enact a credible plan to balance the budget within the next two years.’’

• “Ontario has experienced reckless overspending by government, ballooning public sector salaries, increased red tape and more union-friendly labour laws.”

• “As my fellow Ontarian you must be outraged — this is why I am writing to you today to help us educate Ontarians about the severity of Ontario’s problems and the potential solutions.’’

• “I would like to invite you to join me in the pursuit of policies that will establish Ontario as the envy of Canada by making a financial contribution in support of our Ontario Prosperity Initiative.’’

OurWindsor.Ca

A fundraising letter written by Fraser Institute senior fellow and former premier Mike Harris criticizing the Ontario government highlights a double standard in the way the Canada Revenue Agency audits charities, critics charge.

The letter takes swipes at the province for lacking a “credible plan” to balance the provincial budget within two years, and goes on to criticize Ontario’s debt and the province’s unemployment rate.

“As my fellow Ontarian you must be outraged — that is why I am writing to you today to help us educate Ontarians about the severity of Ontario’s problems and the potential solutions,” Harris writes.

The letter asks the reader to “join in the pursuit of policies that will re-establish Ontario as the envy of Canada” by financially supporting the Fraser Institute’s new research program.

Ontario Premier Kathleen Wynne and her Liberal government aren’t mentioned in the letter, a copy of which was obtained by the Toronto Star.

The letter is drawing criticism because while charities are permitted to engage in political activities as long as they don’t spend more than 10 per cent of their funds doing so, the Fraser Institute claims the Harris letter isn’t political, and that the group doesn’t engage in any political activities.

Critics argue the letter cuts to the heart of the problem they see in the way the Canada Revenue Agency audits charities.

“This is a great example of the enormous lack of clarity in the rules governing charities and inconsistency in the application by the CRA of those rules,” says NDP MP Murray Rankin, his party’s Canada Revenue critic.

“I just want a level playing field where other charities that may not be aligned with the Conservative government are subject to the same rules,” he said, adding the CRA’s rules are “all over the place.’’

Since Jan. 1, 2012, the CRA’s Charities Directorate has completed roughly 2,000 audits of charities through its regular audit program, and identified more than 50 charities for “political activities” audits.

The government budgets $13 million a year for these political “super audits,” as some people refer to them.

Critics charge that charities espousing views that run counter to Prime Minister Stephen Harper’s Conservative government — including some environmental groups — have been unfairly and disproportionately targeted for the political activity audits.

Charities that have been subjected to these audits say having to pull together the paperwork for the inspections is a daunting process. Several groups have voiced concerns the audits are intended to silence them.

The president of the Fraser Institute, a right-leaning think-tank and registered charity, says “in no way” is the Harris letter political.

“It’s written by a long time senior fellow of the Fraser Institute, Mike Harris. All of the data in the letter is based on Fraser Institute research,” says president Niels Veldhuis, who adds that his organization is non-partisan.

Veldhuis says his organization has been audited by the CRA three times — the last time being in the late 1990s.

Groups that have been audited since 2012, however, say it’s a stretch to say there’s nothing political about Harris’ fundraising letter.

“We would not have it signed by an ex-politician especially with that level of profile as a Conservative politician,” says Bruce Campbell, executive director of the Canadian Centre for Policy Alternatives, a non-partisan research body devoted to social, economic and environmental justice issues.

“We wouldn’t do it because we’d be concerned it created an implicit partisan bias, and you can’t be partisan,” says Campbell, whose left-leaning group was subjected to a full audit beginning in the fall of 2013. The organization publishes an “alternative federal budget.”

Campbell later added: “It’s implicit, just given who (Harris) is.”

“It’s definitely political,”’ says Tim Gray, executive director of Environmental Defence, referring to the Fraser Institute letter.

“The Fraser Institute is clearly doing public policy work in the political sphere,” says Gray, whose environmental group is being audited by the CRA — a probe that began in 2011.

“They (Fraser Institute) should be reporting that (to Canada Revenue) and there’s no reason they shouldn’t be audited based on their compliance with that 10 per cent (political activities rule),” Gray says.

Gray adds that if they’re not being audited, then that raises the question — why not?

In its tax filings to Canada Revenue for the past three years the Fraser Institute said none of its activities are political.

The tax agency says it doesn’t comment on specific cases for confidentiality reasons, according to spokesperson Jelica Zdero, who added that when there are audits, charities are selected by the CRA alone “without any political direction whatsoever.”

She added that charities can be selected for audit for any number of reasons including: random selection; referrals from other areas of the CRA; complaints from the public; articles in the media; or a follow-up on a previous audit.

Among the CRA’s definitions of political activities:

An activity that “explicitly communicates to the public that the law, policy, or decision of any level of government in Canada or a foreign country should be retained . . . opposed, or changed.”

According to CRA rules, charities may participate in political activities if they are non-partisan and connected and subordinate to the charity’s purposes.

Toronto Star

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(5) Comment

By Brian | MAY 19, 2015 02:33 PM
Fraser Institute = Koch Suckers
By Brian | MAY 19, 2015 02:22 PM
The Fraser Inst. is a biased, right wing think tank that has not been audited this century. To pretend otherwise is true nonsense. Radical, right wing garbage out of the conservative playbook with the advantage of U.S. multi-billionaire funding. Google Republican presidential candidate Scott Walker`s bumpersticker to find out who Harris and the rest of the Fraser clowns really are.
By HoneyPoodle | MAY 19, 2015 08:33 AM
Oh please... Enough of the whining. For the Canadian Centre for Policy Alternatives to try to pretend that they are non-partisan is nonsense. Every time there is a provincial or federal budget, they come up with an “alternative” that is nothing but radical, left-wing garbage – right out of the NDP playbook. This is just sour grapes on their part and nothing else. Nice try, Toronto Star...
By StatusQuoContinues | MAY 18, 2015 11:04 AM
Why do we want clarity??????, If the lines are blurry than this offers a scapegoat to everyone involved in these ponzi schemes designed to line the pockets of their top employee's, directors, and can be used by government as a funnel to direct public dollars into their cronies hands with little oversight. Clear rules and transparency will allow critical thinking citizens to expose the truth and citizens may finally understand just how bad their being screwed by a system which threw them overboard 30+ years ago.
By veryoldguy | MAY 18, 2015 07:21 AM
The Koch Brothers give financial support to the Fraser Institute and they're not even Canadian. The last audit was in the 1990s? Oh move along folks, there's nothing for you to see here. It's time to kick Harper out of office. He's so arrogant that appearances of impropriety don't even register with him.
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