Involvement of Foreign Foundations in Canada’s Domestic Affairs—InquiryPublished on 5 April 2012 Hansard and Statements by Senator James Cowan (retired)
Hon. James S. Cowan (Leader of the Opposition):
Honourable senators, I rise today to speak to the inquiry launched by Senator Eaton on, in her words, “the interference of foreign foundations in Canada’s domestic affairs and their abuse of Canada’s existing Revenue Canada Charitable status.”
I have listened closely to the honourable senators who have spoken on this debate. Many issues have been raised and some serious accusations have also been levelled against some of Canada’s most respected and dedicated charitable organizations.
The privileges honourable senators enjoy in this place should never be used as a shield for a drive-by smear campaign. Our privileged right of speech in this chamber should never be used to try to stamp out the right of other Canadians to their fundamental Charter right of freedom of speech; yet that is what I fear this inquiry is trying to do.
There is a great deal of concern right now amongst charitable organizations across Canada because of things that have been said in the course of this debate, and last week’s budget would seem to suggest that their concerns are justified. These organizations, perhaps reflecting their “charitable” nature, are concerned. Many thousands of Canadians are angry that parliamentarians, sent here to debate serious issues of vital national importance, are instead spending valuable time “trying to stifle the voices of millions of Canadians with whom you may not agree.” That wording was contained in thousands of emails that I have received on this topic.
Honourable senators, the people who work for and support our charitable organizations have dedicated themselves to working to build a better world for all of us. Whether you or I or Prime Minister Harper agree with all the details of their respective visions is irrelevant. What constitutes the public good will be different for different people and it is the respect for these differences that is the hallmark of a free and democratic society.
The fact that an organization may have charitable status should not give licence to the government to censor what it says on a particular issue. Participation in public policy debate should not depend on one’s tax status.
It may be helpful to begin with some context. My friend Senator Wallace made an admirable contribution to the debate when he outlined the history of charities in Canada, and I commend his remarks to you.
In 2003, the Government of Canada published a document that is readily available on the Canada Revenue Agency website and continues in full force and effect. It set out the government’s policy with respect to political activities that the government has said charities may engage in. This policy statement, CPS-022, has governed the political activities of Canadian registered charities for close to a decade now. It sets out the overall context for charities as follows:
. . . Canadian society has been enriched by the invaluable contribution charities have made in developing social capital and social cohesion. By working with communities at the grassroots level, charities are trusted by and understand the needs of the people they serve. This is important work that engages individuals and communities in shaping and creating a more inclusive society.
Through their dedicated delivery of essential programs, many charities have acquired a wealth of knowledge about how government policies affect people’s lives. Charities are well placed to study, assess, and comment on those government policies. Canadians benefit from the efforts of charities and the practical, innovative ways they use to resolve complex issues related to delivering social services. Beyond service delivery, their expertise is also a vital source of information for governments to help guide policy decisions. It is therefore essential that charities continue to offer their direct knowledge of social issues to public policy debates.
Notice that there is no mention of charities being required to advance the policies of the government of the day, or a suggestion that a charity may not challenge or question government policy. To the contrary, there is fundamental respect that our charities are engaged directly on issues that matter to Canadians. They have what is referred to in the circular as “a wealth of knowledge” about how policies will affect people’s lives, and enabling charities to offer their knowledge to public policy debates is, in fact, a good thing and something to be encouraged, not silenced.
Honourable senators, think of the work done by charitable organizations over the years on issues that were controversial at the time but are now are widely accepted. Think of acid rain and, before that, think of the health organizations that worked tirelessly against smoking while “big tobacco” was telling Canadians and others that there was no proof cigarette smoking was bad for one’s health. Look at the work being done today on the export of asbestos. Will this government next try to silence or shut down the Canadian Medical Association for its criticism of Canada’s asbestos policy?
Senator Finley said that the word “charity” has become, in his words, distorted, contaminated and debased, migrating from being largely a religious-based concept to now being part of the murky lexicon of financial, political and other institutions. Honourable senators opposite appear to want to return to some mythical earlier time when charities restricted themselves to what the Conservative government considers to be approved “good works” and stayed away from advocating on public policy issues.
Honourable senators, the campaigning or advocacy role of charities has been an important factor in our history since the 18th and 19th centuries. Some of the greatest social movements have been led by charities. The campaign against the ill-treatment of children; the movement to abolish slavery; the campaign for women’s rights, including the right to vote, were spearheaded by charitable organizations. This is not a recent phenomenon. There is a long and venerable tradition of charities engaging in political activities.
Is this to be undone now? Are charities now to confine themselves to government-approved issues and carefully avoid advocating for causes that have not met with this government’s prior approval? Many Canadians have suggested that this government’s policies aspire to some television-inspired fantasy of the 1950s, but with this change it would appear the Harper Conservatives want to turn the clock back even more radically, to the Middle Ages.
By contrast, the 2003 policy statement of the Chrétien government recognized and indeed welcomed the role that charities play in public policy development. It provided clarity — and “clarity” is an important word — on what charities could do without jeopardizing their charitable status. It defined “charitable activities,” “prohibited activities” and “permitted political activities.” The line between what was and what was not allowed was defined by the nature of the activity and not by whether the charity supported a particular government policy. For example, a charity may not engage in partisan political activities, but it may engage in a public awareness campaign to enable the public to make decisions about an issue related to the charity’s work.
As I understand it, and I have spoken to many people in the charitable sector across the country, these rules, which were prepared after broad consultation across the country, have worked well. Let us be clear, honourable senators. I have not heard anything to indicate that any Canadian charity has violated these rules. The Budget Plan released last week states:
Recently, concerns have been raised that some charities may not be respecting the rules regarding political activities.
Honourable senators, I fear we are entering into some sort of an echo chamber. The main people who seem to have been raising these concerns are here in this chamber.
Senator Mockler gave a disturbing speech in which he listed what he characterized as “good foundations” and then what he characterized as “the qualified bad, not to mention ugly foundations.” Honourable senators will not be surprised to hear that those in the latter category support causes that Senator Mockler does not like. He proceeded to point out that charities should not take part in an illegal or partisan political activity. I should have thought that no one should take part in illegal activities. He went on to accuse certain foundations of “questionable practices” and what he called “dirty tricks.”
I asked Senator Mockler if he would identify some specific examples of illegal activities and which bad and ugly foundations engaged in them. He declined to reply, referring me back to the text of his speech. I have since re-read his speech very carefully, honourable senators. I saw no specifics of any illegal activities.
Indeed, honourable senators, the first purported example provided in his speech was the time Paul McCartney went to Newfoundland and Labrador to protest the seal hunt. I fail to see how that act was an illegal act by a foundation. We may or may not agree with Mr. McCartney’s view or with his methods of demonstrating his protest, but surely we would not seek to ban former Beatles protesting in Canada. What would be next? John Lennon and Yoko Ono should not have been allowed to stage their bed-in for peace at the Queen Elizabeth Hotel in Montreal?
Senator Munson: All they were saying was give peace a chance.
Senator Cowan: Or would John Lennon make it on the “good Beatle list,” while Paul McCartney is relegated to Senator Mockler’s “bad and ugly Beatle list?”
Honourable senators, accusing any person or organization of illegal activities is serious business. I am quite sure that if there had been any breach of the rules, the Canada Revenue Agency would have acted. I am not aware that any such action has been taken.
If Senator Mockler has knowledge of illegal activity, he has a responsibility to bring it to the attention of the RCMP and the Canada Revenue Agency.
What then is the real issue for colleagues opposite in and around this inquiry? Since their concerns appear to have been heard and accepted by the Harper government, as we saw in last week’s budget, understanding the real issues at play becomes even more important.
The main allegation seems to be that “foreign foundations” are “infiltrating” Canada “under the guise of Canadian charitable foundations.” These are the words that I took from Senator Finley’s speech.
These are the kind of words that have been used in this inquiry by honourable senators opposite. Senator Eaton went even further. She spoke of “political manipulation” and “influence peddling.” These are very serious charges, honourable senators. Influence peddling, for example, is an offence under section 121(1) of the Criminal Code and is punishable by up to five years in prison. If Senator Eaton has knowledge of influence peddling and is not simply engaging in a drive-by smear under the protection of parliamentary immunity, she should contact the appropriate authorities.
On the issue of foreign influence, Senator Plett seemed to sum up the crux of the argument being made by colleagues opposite, when he said:
Canada is indeed a sovereign nation, which is why foreign entities should simply not be allowed to meddle in the Canadian regulatory process under the guise of charities.
Senator Mockler took the same position. He said:
We must together put a stop to the interference of foreign foundations in Canada’s domestic affairs.
I must tell honourable senators that I find the direction in which this seems to be going deeply troubling.
There are many students of history in this chamber who recall, as I do, another Senate investigation, in another country, into foreign infiltration of domestic organizations. The McCarthy hearings in the United States were not a high point in that chamber’s history.
The rhetoric that has been employed in this debate is reminiscent of such low periods in history — listing “good” versus “bad and ugly” foundations, telling Canadians to beware of “foreigners” who are “infiltrating” our charitable organizations — Senator Mockler even used the word “hijacking” — and Senator Plett went so far as to suggest that environmentalists would take money from al Qaeda, Hamas and the Taliban. Senator Duffy contributed that such activities were “anti-Canadian.”
Honourable senators, instead of an international communist conspiracy, apparently we now have an international environmentalist conspiracy. Is today’s Senator McCarthy question going to be: “Are you now or have you ever been a member of a conservation society?” Is that what we will be asking witnesses who appear before our Senate committees?
Honourable senators, this may seem far-fetched.
Some Hon. Senators: Yes, it does.
Senator Cowan: Remember the words used by Senator Finley: “foreign foundations” who are “infiltrating” Canada, environmental organizations whose secret intent is to “undermine” and “do irreparable damage” to Canada’s economy. According to Senator Finley, that is what Canadians must stand on guard against.
Honourable senators opposite appear to want two things: Senator Eaton and Senator Finley seemed to be arguing for greater transparency about all sources of income received by charitable organizations, whether or not charitable receipts are issued. At first blush, that seems unobjectionable, subject to the privacy concerns raised by Senator Nancy Ruth during the debate last Thursday.
Honourable senators, I understand that organizations like Tides Canada and the Suzuki Foundation — two of the charitable organizations singled out for particular attack by senators opposite — are very transparent about their funding. Indeed, some might question whether supporters of the government would be better to address their calls for transparency to their own leader. Prime Minister Harper to this date has refused to make public the full list of donors to his leadership campaign in 2002. Canadians do not know whether he is in any way beholden to foreign organizations, and I rather think that the Prime Minister wields more authority in this country than the Suzuki Foundation.
Senator Munson: He likes to travel.
Senator Cowan: The second goal of members opposite seems to be for legislation or regulation of foreign funding for these charitable organizations. Senator Plett said:
We need to ensure that we protect our sovereignty from the manipulation of foreign interests and lobbyists who wish to exploit our regulatory processes for their own agendas, agendas that are clearly against Canada and Canadian sovereignty.
Senator Mockler said:
. . . the time has come for the Canada Revenue Agency to close that gap, to close the loopholes for those foreign foundations with their sole purpose of making Canada look unpleasant and undesirable in other parts of the world.
Honourable senators, these are not new ideas. Senators opposite are certainly not the first politicians to express such concerns and to want legislation to control foreign funding of domestic non-governmental organizations. A few years ago, another influential politician said words very similar to those we have heard in this inquiry. He said: “We are for their,” and he was referring to NGOs, “funding being transparent . . . we don’t want them to be led by puppeteers from abroad.”
That was President Vladimir Putin of Russia. In 2006, he signed a law giving Russian authorities wide-ranging powers to monitor the activities and finances of NGOs. President Putin said he was particularly concerned about activities that, in his words, “threaten Russia’s sovereignty and independence.” Does that sound familiar?
The law that was passed in Russia in 2006 blocked foreign-funded NGOs from “carrying out what amounts to political activity” in Russia. As President Putin explained, “Whether these organizations want it or not, they become an instrument in the hands of foreign states that use them to achieve their own political objectives.” What an example for Senators Eaton and Plett and Prime Minister Stephen Harper to follow.
The Putin law was roundly and justifiably condemned by Human Rights Watch, among a long list of others. Indeed, some observers said the law made Russia “ill-suited for international leadership roles like its [then] chairmanship of the G8 group of the world’s major industrialized countries.” That, honourable senators, was a quote by Radio Free Europe/Radio Liberty about the law. I wonder how it would characterize the proposal by Senator Eaton and the support it is receiving from the loyal supporters of the Harper government?
Is Putin’s Russia really the model for Canada? Is that a precedent we should follow? This government already has the unfortunate distinction of being the first Canadian government in history to be denied a seat on the UN Security Council. Do we really want international human rights advocates and others now to be debating whether Canada should lose its position in the G8?
Honourable senators, I am not afraid of free speech. I celebrate it and I will proudly and emphatically defend it. However, I worry when someone — particularly a parliamentarian representing the government of the day — stands and suggests that we should silence Canadians because they are “under the influence” of “foreigners” who want to undermine Canadian peace and prosperity.
Let us be clear, honourable senators: reasonable people can disagree about what is a good and a bad policy choice. The Canadian way, as exemplified in our Charter of Rights and Freedoms, is to allow free and open debate — the marketplace of ideas. I am frankly a little surprised to see Conservative colleagues, who I would have thought believed in the free market above all else, seeking to somehow control and even suppress the expression of those ideas with which they happen to disagree.
Let us also be very clear: Foreigners do not have a monopoly on concerns for the environment. Many Canadians right across this land share a deep concern for our environment. Many Canadians are genuinely concerned about the impact of the oil sands development and possible problems resulting from pipelines carrying crude oil. It is patronizing and insulting to dismiss their very real, serious concerns as a result of foreign influences, or in Senator Eaton’s words, “has-been and wannabe movie stars.”
Canadians are highly intelligent, discerning individuals. They are capable of making up their own minds about issues. They do not need this government intervening to keep ideas out of earshot.
Environmental issues are not simply local or domestic issues. Nature does not recognize political boundaries. That is why international cooperation on environmental issues is vital. We should not be surprised if our American neighbours have an immediate interest in environmental issues in Canada. Likewise, I would hope and expect our government to recognize that Canadians have an interest in what happens south of the border if a danger is posed to Canada and our environment.
The Progressive Conservative government of Prime Minister Brian Mulroney certainly recognized this during the acid rain debates. In the 1980s, there were Canadian environmental groups who went to the United States to lobby American decision-makers to try to bring an end to the scourge of acid rain. Would Senator Plett say that was wrong and an intrusion into the sovereign affairs of the United States of America? Should concerned Canadians have remained silent as they watched their lakes die?
I wonder how Senator Eaton would have viewed a counterpart in the United States Senate at that time had they criticized Canadian environmental groups as a threat to the vital coal industry of the Appalachians. Should Canadian environmental groups have been silenced?
The Government of Canada and representatives from our oil industry have not hesitated to go and lobby in other countries, not because their policies pose a danger to Canadian soil, but because their policies are seen not to be in Canada’s economic interests. There were extraordinary lobbying efforts focused on the U.S. government and the American public with respect to the Keystone Pipeline project.
In London, England, Canadian taxpayers funded a two-day lobbying retreat, what one newspaper dubbed “Oil Lobbying for Dummies.” Our government convened a meeting that brought together Canadian diplomats from 13 different European posts. Ottawa-based consultants were flown over to England for the event, together with industry stakeholders, such as Shell Oil, Statoil, Total, the Royal Bank of Scotland and the Canadian Association of Petroleum Producers. There was a presentation on how to conduct advocacy in Europe and a session entitled “Address Criticism and Emotions.”
Many Canadians might think that big oil has the money to do this kind of lobbying on its own, that Canadian taxpayer dollars should not be spent so freely on junkets to London in support of the oil industry, when Canadians are being told that Old Age Security will have to be cut back, along with spending on health care and education. Yet senators opposite are indignant when some of our American neighbours try to express their views in Canada about our oil policies.
A few weeks ago, the news broke of a secret high-level committee that was formed in 2010, specifically to coordinate the promotion of the oil sands. That committee brought together the president of the Canadian Association of Petroleum Producers, with deputy ministers from Natural Resources Canada, Environment Canada, Alberta Energy and Alberta Environment to synchronize their lobbying offensive in the face of mounting protest and looming international regulations targeting Alberta crude.
Plans to form this committee were apparently first discussed at a March 2010 meeting in Calgary involving high-level officials from CAPP; CEOs from the oil and gas companies; senior federal and Alberta government officials; and Bruce Carson, the former close adviser to Prime Minister Harper who went back and forth between working in the PMO and heading up the new Calgary School of Energy and Environment, established with a federal grant of $15 million.
Some Hon. Senators: Oh, oh.
Senator Cowan: Then, of course, there was an investigation into possible illegal lobbying by Mr. Carson for his former escort fiancée and revelations about other questionable activities. Mr. Carson fell out of favour as this became public, but the secret committee he established evidently lives on.
Honourable senators opposite are focused on trying to stop legitimate registered charitable organizations in Canada from having any voice. Somehow I am not worried that these charitable organizations have so much muscle and money as to have an unfair advantage over the combined efforts of big multinational oil companies and the federal government, which is prepared to fly dozens of officials overseas for a retreat on how to lobby for big oil.
Our registered charities work hard to raise money for causes that are important to Canadians. The people giving the money do not influence the causes; they choose the charity that is working for the cause that they support.
I understand that some wealthy donors are reputed to give money only if the results support the positions they endorse. I am thinking in particular of the billionaire Koch brothers, who reportedly donate large sums of money to the Tea Party in the United States and have also given money to the Fraser Institute in Canada.
Koch Industries is, of course, a very large oil company, with annual revenues estimated at $100 billion. They have spent millions funding environmental skepticism. Dave Koch has been clear about his family’s tight ideological control of its donations. This is what he said:
If we’re going to give a lot of money, we’ll make darn sure they spend it in a way that goes along with our intent. And if they make a wrong turn and start doing things we don’t agree with, we withdraw funding.
Honourable senators, I must say that I have never heard of donors to Canadian environmental charities seeking to direct the results of their donations like that. However, I appreciate that this is an important issue, and if indeed, as senators opposite have suggested, this is happening, as it appears to be happening for those who wish to argue against the science of climate change, then this is something that should be examined further.
Tides Canada has been quite clear that it is fully transparent about its donors, but as Senator Mitchell told us, organizations such as the Fraser Institute are not so open or transparent.
There are also, of course, other organizations such as Focus on the Family, for example, that are registered Canadian charities and are deeply involved in often controversial issues of public policy. Focus on the Family has reportedly received over a million dollars in services from its U.S. counterpart. How much of that supported lobbying efforts in Canada against our policies on same-sex marriage and abortion rights?
It is ironic that as honourable senators opposite are calling for increased transparency about foreign donors to environmental causes, the Harper government is refusing comment about allegations that climate change skeptics in Canada have been getting money from the U.S. Heartland Institute. The Heartland Institute is well known for funding work and engaging in advocacy that casts doubt on the scientific evidence linking climate change to human activity. Indeed, its website boasts that its GR staff made “more than a million contacts with elected officials in 2010.” A million contacts with elected officials. Were any of these in Canada?
The office of Environment Minister Peter Kent said about the allegations of this funding, “we will not be commenting on these matters.” That is what the Harper government really thinks about transparency: no comment.
Honourable senators, I appreciate that senators opposite believe that Canadians should know more about the activities and funding of registered charities, since registered charities benefit from our tax laws. However, it is rather strange that they are focusing on foreign funding of charitable organizations.
Foreign donations would not receive any taxpayer-subsidized benefit under Canadian law. There is no charitable receipt that can be issued for Canadian tax purposes unless there is Canadian income for it to be deducted against. Senator Day raised that question with Senator Eaton when she spoke to this inquiry. Honourable senators will recall that she dismissed that as a very technical question.
Honourable senators, this surely is not a very technical question. Surely the benefit under our tax laws is the very crux, the lynchpin, of her argument.
That tax position may be contrasted with the position of corporations such as big oil companies. As I have discussed, there is much lobbying on these same issues by large corporations which are then able to deduct the cost of their advocacy and lobbying, including large fees paid to powerful lobbyists and lawyers as business expenses. In other words, those lobbying efforts are being subsidized by the Canadian taxpayer, who may profoundly disagree with the issues being advanced by those lobbyists behind closed doors.
I am sure we all agree that one of the things the Senate does best is to conduct a serious study of a particular issue. Before last Thursday’s budget, I planned to suggest that the concerns raised in this inquiry, especially some of the serious allegations made, should be subjected to closer scrutiny by a serious study in a Senate committee. Of course, and I am sure there was agreement on this, we cannot in good conscience look at one side, the charitable organizations, without equally looking at the other side, the corporate lobbying deductions, particularly when foreign donors to charitable organizations do not gain any benefit under Canadian tax laws for their donations, whereas those corporations certainly do receive a taxpayer-subsidized benefit.
Like many Canadians, I was astounded to see, buried at page 205 of the almost 500-page Budget Plan of the Harper government, that the Harper government had recently decided that the Income Tax Act should be changed “. . . to restrict the extent to which charities may fund the political activities of other qualified donees . . .”
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.
Accordingly, in a budget otherwise focused on austerity and cutting government back, the Harper government is allocating an additional $8 million to the Canada Revenue Agency so it can ensure that charities follow the rules. The government will be introducing what it calls “new sanctions for charities that exceed the limits on political activities.”
Honourable senators, what will be next — mandatory minimum sentences for anyone daring to speak out at an environment assessment hearing or who writes an op-ed against the export of asbestos? Bill C-10 ushered in a new era of a war on drugs for Canada. Is the Harper government now proposing to launch a war on charities as well?
I mentioned earlier in these remarks that the Chrétien government’s 2003 policy statement was the result of months of broad consultations. The policy document itself was produced in draft form by CRA and made available for public input — the Liberal government’s standard operating practice with new policy documents — and then it was finalized. Honourable senators, I am aware of no public consultation in relation to these changes.
According to a report published in the Toronto Sun over the weekend, this change was introduced by the government because “. . . Ezra Levant went ballistic — as did Sun News . . .” over activities of the David Suzuki Foundation. According to the report, a government spokesman made a point during the budget lockup of ensuring that at least Sun Media noticed the changes to the rules governing charities. This spokesperson called it “the Ezra rule.”
“Did you see the Ezra rule?” asked a government spokesman . . . “Page 204,” said the spokesman. “At the bottom.”
Honourable senators, that is how public policy is now being made — no fact finding. Once again, why look at the facts? Evidence-based policy making is so Liberal government. The Conservative government is no facts, no consultations — silence the critics, bury them in reporting and red tape, and vilify anyone who dares to disagree. Indeed, now they are, in Senator Duffy’s words, “anti-Canadian.”
Is The Globe and Mail anti-Canadian? They had a very thoughtful editorial on Saturday. Indeed, it was their lead editorial. It was headed “Beware of foreigners bringing money” and began:
The Conservatives are continuing in their dishonourable attack meant to intimidate environmental groups, in a budget item that stands out for adding a needless new cost.
It was referring, of course, to the $8 million allocated to the CRA under the budget. The next sentence says it all:
Witch-hunts don’t come cheap.
The editorial continued:
Foreign sources? It’s not illegal for Canadian charities to take money from outside the country. And why should it be? If a Canadian cancer researcher, or a program to keep inner-city youth in school, receives money from a foreign foundation, is anything wrong with that? Why, then, is it wrong for an environmental group?
We live in a globalized world — the phrase is nearly as ubiquitous as what it represents. The Canadian government is only too happy to solicit foreign capital, foreign students (it has special scholarships for them), foreign culture, foreign labour. But foreign charitable donations for advocacy? Why, they’re a threat to the Canadian way of life!
The editorial concluded:
Environmentalists have every right to seek out foreign donations, just as foreign oil companies have every right to make their views known on the perceived benefits of the Gateway pipeline. The pipeline may turn out to have great benefits for Canada, but the environmental risks need to be discussed, and the federal government ought to respect the rights of Canadian charities to raise money abroad and express, in a non-partisan way, their concerns. Who is the hijacker here?
I agree. By the way, while we all understand that the target of the government’s campaign is environmental charities, in fact the rules which are being proposed affect all charities across the board. I said earlier, and I understand from my consultations with folks in the charitable sector across the country, that the 2003 rules are clear and well understood. By contrast, the new rules, at least the ones set out in the Notice of Ways and Means Motion to Amend the Income Tax Act set out in Annex 4 of the Budget Plan, are circular and manifestly unclear.
I can only hope that the lack of clarity is not a deliberate attempt to put a chill on charities. After all, the sanction imposed is very severe. As set out on page 437:
Budget 2012 proposes to grant to the CRA the authority to suspend for one year the tax-receipting privileges of a charity that exceeds the limitations on political activities.
If a charity provides inaccurate or incomplete information in its annual information return, the tax-receipting privileges will be suspended.
Meanwhile, let me read to you the new definition of “political activity” that the budget will introduce into the Income Tax Act.
. . . political activity includes the making of a gift to a qualified donee if it can reasonably be considered that a purpose of the gift is to support the political activities of the qualified donee;
“Political activity” is defined to include a gift if it can be reasonably considered — it does not say by whom, perhaps by the minister — that a purpose, not the sole or even the primary purpose, just a purpose, is to support the political activities of a qualified donee. Is that clear to honourable senators? It is certainly not clear to me.
One has to know what political activities are in order to understand and apply the definition, and this would be in our Income Tax Act with severe sanctions for it is violations.
Honourable senators, I am deeply concerned that the effect, if not the purpose, of these changes will be to put a chill on the political engagement of our charitable organizations. I mentioned the cautionary tale of the law introduced by Vladimir Putin to impose tighter controls on non-governmental organizations. A report prepared by Human Rights Watch about the impact of the law was entitled Choking on Bureaucracy: State Curbs on Independent Civil Society Activism. Articles about the terrible law had headlines like “Putin’s war on civil society.”
Let us be clear, honourable senators, that what is at stake is nothing less than the quality and freedom of our civil discourse. I realize that the stakes have been raised considerably by the budget last week. I believe that it is therefore even more important that we act quickly to give this issue the serious study it deserves, to understand the ramifications of the issues that have been raised and also to ensure that our policy is consistent with respect to advocacy and that we are not singling out charities for special and, I would say, unfair treatment.
I therefore would like to propose that we give a reference to our Standing Senate Committee on National Finance to study this issue.
To this end, at the next sitting, after we return from the break, I will give notice of a motion that the Standing Senate Committee on National Finance be authorized to examine and report on the tax consequences of various public and private advocacy activities undertaken by charitable and non-charitable entities in Canada and abroad, and that in conducting such a study, the committee take particular note of, first, charitable entities that receive funding from foreign sources; second, corporate entities that claim business deductions against Canadian taxes owing for their advocacy activities, both in Canada and abroad; and third, educational entities that utilize their charitable status to advocate on behalf of the interests of private entities.
Honourable senators, I must say that it is my impression that Canadian registered charities understand very well the line between acceptable political activities and unacceptable ones. As I have said in these remarks, to my knowledge there has been no suggestion from the Canada Revenue Agency that any Canadian registered charity has violated the law and breached that line by any activities raised in this inquiry.
I do not believe in witch hunts, and I do not believe that because an individual or an organization takes a different position from mine that is a valid reason to single it out and suggest that it is somehow nefarious or seeking to undermine the Canadian economy or incite Canadians against their government.
I believe strongly in freedom of speech, and I have seen nothing to suggest that any of our registered charities are abusing that freedom. To the contrary, I am personally proud of the work of organizations like Tides Canada and the David Suzuki Foundation. I believe we have much to be grateful to them for, but I am not afraid to refer these questions to our National Finance Committee, provided of course that we examine all tax and revenue implications of public and private advocacy and do not single out charities more than their corporate counterparts.
Thank you, honourable senators.
Some Hon. Senators: Hear, hear.