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Motion to Authorize Committee to Study Tax Consequences of Various Public and Private Advocacy Activities Undertaken by Charitable and Non-charitable Entities

Motion to Authorize Committee to Study Tax Consequences of Various Public and Private Advocacy Activities Undertaken by Charitable and Non-charitable Entities

Motion to Authorize Committee to Study Tax Consequences of Various Public and Private Advocacy Activities Undertaken by Charitable and Non-charitable Entities


Published on 8 May 2012
Hansard and Statements by Senator James Cowan (retired)

Hon. James S. Cowan (Leader of the Opposition):

Honourable senators, this motion arises out of my speech of April 5, 2012. On that day, I noted that the government, through its members here, had generated a certain amount of controversy concerning, in the words of the inquiry, the ‘interference of foreign foundations in Canada’s domestic affairs.’ In particular, serious accusations were levied at a number of Canadian charitable organizations — accusations that many Canadians believe to be unwarranted. This was followed by special attention in the budget and proposed measures in Bill C-38, the budget bill, which is currently in the other place.

I do not propose to repeat what I said on April 5, but I urge honourable senators to read the debate from that day and from previous sittings on this inquiry. The purpose of my motion today is to enable us to determine whether in fact there is any merit to the allegations made against charitable organizations in this country and, at the same time, to provide a forum particularly for those organizations that have been attacked in this chamber to answer the very serious charges that have been made.

I said at the time that the privileges enjoyed by honourable senators in this place should never be used as a shield for a drive-by smear campaign. I am sure all of us agree on that and that we would therefore be anxious to invite those organizations to provide them with an opportunity to defend themselves.

That is only fair.

Indeed, the charges made by this government against Canadian charities did not end here in the Senate. Environment Minister Peter Kent has twice publicly suggested that charitable organizations in this country are engaged in money laundering. When pressed whether he was suggesting criminal activity, the minister did not disagree. These are very serious charges, honourable senators. They cannot be allowed to stand without providing a fair, impartial forum for those so accused to defend themselves.

An Hon. Senator: Hear, hear.

Senator Cowan: The Globe and Mail was so shocked by these statements, their lead editorial yesterday was headed, ‘Money Laundering: Wildly uncharitable accusations.’ They noted: ‘The Environment Minister has accused unnamed environmental charities of criminal activity, and yet provides no specifics, except to point to the work of Conservative Senator Nicole Eaton.’ As I said in my speech on April 5, honourable senators, we have entered a kind of echo chamber.

The Globe and Mail reviewed Senator Eaton’s charges of ‘political manipulation,’ ‘influence peddling’ and others and then said: ‘There is paranoia, there is partisanship, there are wild allegations. But evidence? No.’ The article ended: ‘If there is anything nefarious here, it is hard to see what it is. The only nefarious thing in sight at the moment is a government bent on quashing a legitimate debate.’

Honourable senators, that is my conclusion as well. If there is evidence, let it come out, and let the respected, honourable organizations address the charges, fully and in public. A Senate committee can provide an excellent forum for a full and fair hearing of the evidence on both sides.

Of course, the issue here is not focused on one sector — environmental organizations. We deal here with matters of principle, and so our inquiry must look at foreign involvement in charities generally — who is funding the Fraser Institute, for example, as well as the Suzuki Foundation.

An Hon. Senator: Good question.

Senator Cowan: Frankly, since the controversy seems to revolve primarily around the tax consequences of political advocacy by organizations, I believe that we should not confine ourselves to charitable organizations but look at all political advocacy. As I said on April 5, there are no tax consequences that flow from the activities complained of by Senator Eaton and others opposite; foreign donations would not receive any taxpayer-subsidized benefit under Canadian law as no charitable receipt can be issued for Canadian tax purposes unless there is Canadian income for it to be deducted against. However, there are significant taxpayer-subsidized benefits given to corporations, such as big oil companies, which under our tax laws are able to deduct the cost of their advocacy and lobbying, including large fees paid to powerful lobbyists and lawyers as business expenses.

We cannot in good conscience look at one side — charitable organizations — without looking at the other side — the corporate lobbying deductions — in particular when one, the charitable side, has no taxpayer-subsidized element while the other, the corporate side, does.

Honourable senators, as we know, the issues raised in the inquiry have been followed with considerable interest and concern by thousands and thousands of Canadians. Canadians have noted the inherent problem of looking at only one side of the issue.

On April 27, a letter to the editor appeared in the Toronto Star from Mr. Gary Dale of West Hill, in Toronto, who pointed out the ‘fatal flaw,’ as he put it, of looking only at lobbying by charitable organizations. He said that misses what he called ‘the larger context.’ In his words:

What about taxpayer-funded corporate lobbying and public relations campaigns? These are business expenses that can be written off at tax time by corporations. Why should corporations get bigger breaks on their lobbying efforts than citizens? Indeed, why should corporations get any incentive to influence public policy if citizens aren’t afforded the same privilege?

It is important that we address all sides of this issue, honourable senators.

Many Canadians were also surprised to learn that their tax dollars had subsidized the establishment of at least one centre at a university that apparently has been engaged in political advocacy on behalf of private business interests. Again, it is only right that we would include that within our study as well.

Honourable senators, making speeches in the chamber is important, but I am sure we would all agree that where the Senate really shines is in the quality of its committee study of important public policy issues. That is the motivation for my motion. The serious issue raised by Senator Eaton and other senators on both sides of the aisle deserves this attention.

Honourable senators, I have been brief because I would like this motion to be adopted as quickly as possible so that our committee can begin this important work. Very serious issues were raised in the course of Senator Eaton’s inquiry, which deserve full and complete study by our National Finance Committee. Indeed, Minister Kent, in his remarks the other day, suggested that our National Finance Committee is already investigating these issues and that interested Canadians should follow the committee’s hearings. His parliamentary secretary, Michelle Rempel, was very clear on ‘Power and Politics’ last Thursday. She said, ‘The Finance Committee in the Senate is studying some of these issues right now.’

In the circumstances, I urge all honourable senators on both sides to agree to pass this motion quickly and proceed to the study that the minister and his parliamentary secretary think is already well advanced.