Just as the Federal Budget spends $8 million to increase the burdens on charities to prove that they are
staying away from political activities, the oil industry is trying
to get Environmental Defence's charitable
registration revoked. The lobby group that calls itself Ethical Oil
has launched a formal complaint with the federal Canada Revenue
Agency alleging Environmental Defence is in violation of its
charitable activity requirements, because of its active campaign
against pollution caused by the tar sands (oil sands to its
Given the vociferous objections already expressed by federal
cabinet ministers about environmental groups that hold up their
favourite projects, like Northern Gateway, Environmental Defence
may get a rough ride. In its section labelled, Sustainable
Social Programs and a Secure Retirement, the Budget says:
"Enhancing Transparency and Accountability for
Economic Action Plan 2012 proposes measures to ensure that
charities devote their resources primarily to charitable, rather
than political, activities, and to enhance public transparency and
accountability in this area.
The Government of Canada provides registered charities with
generous assistance under the tax system in recognition of the
valuable work that they perform. Registered charities are exempt
from tax on their income and may issue official donation receipts
for gifts received. In turn, donors can use those receipts to
reduce their taxes by claiming the Charitable Donations Tax Credit
(for individuals) or Charitable Donations Tax Deduction (for
corporations). In 2011, federal tax assistance for the charitable
sector was approximately $2.9 billion. At the request of the
Government, the House of Commons Standing Committee on Finance is
studying current and proposed incentives for charitable giving to
ensure that the tax incentives are as effective as possible.
Canadians have shown that they are willing to donate generously
to support charities, but want to be assured that charities are
using their resources appropriately. In this regard, charities are
required by law to operate exclusively for charitable purposes and
to devote their resources exclusively to charitable activities.
Given their unique perspectives and expertise, it is broadly
recognized that charities make a valuable contribution to the
development of public policy in Canada. Accordingly, under the
Income Tax Act charities may devote a limited amount of their
resources to non-partisan political activities that are related to
their charitable purposes.
Recently, concerns have been raised that some charities may not
be respecting the rules regarding political activities. There have
also been calls for greater public transparency related to the
political activities of charities, including the extent to which
they may be funded by foreign sources. p>
The Canada Revenue Agency (CRA), as administrator of the tax
system, is responsible for ensuring that charities follow the
rules. Accordingly, to enhance charities' compliance with the
rules with respect to political activities, Economic Action Plan
2012 proposes that the CRA:
Enhance its education and compliance activities with respect to
political activities by charities.
Improve transparency by requiring charities to provide more
information on their political activities, including the extent to
which these are funded by foreign sources.
These administrative changes will cost $5 million in
2012–13 and $3 million in 2013–14.
It is also proposed that the Income Tax Act be amended to
restrict the extent to which charities may fund the political
activities of other qualified donees, and to introduce new
sanctions for charities that exceed the limits on political
activities, or that fail to provide complete and accurate
information in relation to any aspect of their annual
If the CBC is muzzled by budget cuts, and charities are muzzled
or frightened into silence, who will speak up for the
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