Academics' open letter calls for moratorium on political tax audits

More than 400 academics are demanding the Canada Revenue Agency halt its audit of a think-tank, saying the Conservativegovernment is trying to intimidate, muzzle and silence its critics.

In an open letter, the group defends the Canadian Centre forPolicy Alternatives, a left-leaning think-tank that was targeted fora political-activity audit partly because it was deemed by theagency to be biased and one-sided.

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The letter says the centre is internationally respected,conducting its research in a "fair and unbiased way," and that its
frequent criticisms of government policies does not make it apartisan organization.

The group is calling for a moratorium on political-activityaudits of think-tanks until the tax agency adopts a neutral and fairselection process.

One of the group's organizers, economist Mario Seccareccia at theUniversity of Ottawa, says the letter tapped into enormousfrustration with the Conservative government's hostility towardacademic research.

Stifling intellectual work

"It's an environment that has been rather stifling when it comesto intellectual work," he said in an interview. "There's a realmalaise. ... They've been irritating a lot of people."

Earlier this month, The Canadian Press reported on an internaltax agency document that outlined the rationale for auditing theOttawa-based Canadian Centre for Policy Alternatives, registered as an educational charity.

The document said the research and education material on itswebsite appears to be "biased" and "one-sided," triggering apolitical-activity audit in October last year.

The centre is among 52 charities currently targeted in a$13.4-million program launched in 2012 to determine whether any areviolating a rule that limits their spending on political activitiesto 10 per cent of resources.

Auditors also want to see whether any charities are engaging inforbidden partisan activities, such as endorsing candidates forpublic office.

The first wave of such audits included environmental groups thathave been critical of the Conservative government's energy andpipeline policies, but the net was later widened to include poverty,international aid and human-rights groups who are also oftencritical of policy.

"Advocacy chill" is the result

The new audit program has led to what has been dubbed "advocacychill," as some groups self-censor to avoid aggravating auditors.

The audits are also draining scarce resources, especially throughspending on legal fees.

Revenue Minister Kerry-Lynne Findlay has said the tax agency'spolitical-activity audits are conducted at arm's length, without herinput, and agency officials say their targeting decisions areneutral, non-partisan and balanced.

The open letter, addressed to Findlay, says the governmentappears to have singled out a think-tank that frequently criticizesthe Conservative agenda.

"We are therefore left with the conclusion that the decision toaudit the CCPA is politically motivated to intimidate and silenceits criticisms of your government policies," says the text,endorsed by 421 academics by mid-day Sunday.

"Instead of trying to muzzle and impede sound and legitimateresearch, it is now time for you to try to promote more effectivelythe public good in the form of sound critical research for whichCanadian researchers are respected internationally."

Powder keg of emotion

Organizer Louis-Philippe Rochon, an economist at LaurentianUniversity in Sudbury, Ont., says endorsements for the letterarrived quickly.

"This was a powder keg waiting to happen," he said, noting thesupport was broad-based.

"Mostly from the social sciences and humanities, but some fromthe sciences. We have Canada Research Chairs, heads of departments,younger faculty, more established faculty, and from almost everyuniversity in Canada."

"It hit a raw nerve amongst academics," he said in an email."The idea that if we reach a conclusion other than the officialdoctrine of the government, our research is somehow biased andpolitical."

Most think-tanks in Canada are registered as educationalcharities to allow tax breaks for their donors.

Two right-leaning think-tanks, the C.D. Howe Institute and theMacdonald-Laurier Institute, have confirmed they are not currentlyundergoing CRA political-activity audits. Two others -- the FraserInstitute and the Montreal Economic Institute -- have declined tocomment. The Atlantic Institute for Market Studies in Halifax hasnot responded to questions.

Asked about the academics' letter, a spokesman for Findlay said Sunday that registered charities reported more than $14 billion in tax-receipted gifts in 2012.

"Therefore, the Canada Revenue Agency has a responsibility to taxpayers to protect the integrity of the charitable sector, andensure registered charities remain compliant," Carter Mann said inan email.

"CRA audits occur at arm's length from the government and areconducted free of any political interference. Our government iscommitted to ensuring that our tax system is fair for allCanadians."

Here is the text of the letter:

Dear Minister Findlay,

Recently, we were informed through reports in a number of newspapers that the Canada Revenue Agency (CRA) has undertaken an audit of the Canadian Centre for Policy Alternatives (CCPA) on thegrounds that it allegedly engages in politically partisan, biasedand one-sided research activity.

While we understand the need to prevent abuses of the charitablestatus, we are rather perplexed at CRA's decision to perform the audit on this basis. The CCPA is an internationally-recognized and respected research centre, built on a solid tradition of criticalanalysis. Indeed, the CCPA plays a vital role by supplying muchneeded reflection on a number of policies, which it has always donein a fair and unbiased way, and which respects the fundamental toolsof sound research. They have produced much-needed research on manydisparate topics, such as on income and wealth distribution, thehidden government support of the Canadian banking sector during thefinancial crisis, and an analysis of alternative federal fiscalpolicy implementation annually. Since these various research studiesare academically all of very high quality, you can therefore imaginehow this news took us by surprise.

By undertaking this audit, we feel that CRA fails to understandthe nature of what academic research is all about. Research beginsfrom a series of questions and observations, and, from there, itproceeds, following a set of guidelines, to infer possible answers.In this sense, it contests. All research in fact is critical, by itsvery definition: it tests hypotheses, seeks answers, and must beallowed to find these answers wherever it can.

But critical policy analysis does not equate with politicalactivism, nor is it "biased" or "one-sided", as CRA has claimed.
Researchers explore specific questions of interest, and then presentthe results of their research. Reaching a conclusion is not the sameas bias. To illustrate, a CCPA researcher explored the issue of whatwould be the appropriate exchange rate regime for Canada and thenconcluded that a floating exchange rate was desirable to alternativetypes of exchange rate mechanisms because the former allowed thepublic authorities to conduct independent macroeconomic policies.

The fact that this conclusion turned out to be similar to the policyview of the Bank of Canada does not make the CCPA researcher anymore political than if the researcher would have produced that sameresearch independently within his/her respective university.

The CCPA is not a political organization, nor does it engage inpolitical or partisan activities. The fact that it has criticized
government policy on a number of issues does not make it a partisanorganization promoting a narrow agenda. Rather, it is engaging inserious, unbiased academic research. It may reach a different set ofconclusions from those of the government, but then, this is allowedin a free-thinking, democratic country. On the contrary, we wouldargue, that such dissent should be encouraged and not stifled bysuch actions of the CRA.

Indeed, if there is bias, the bias seems to be mostly in theCRA's decision to audit the CCPA and apparently no other thinktanks, whose policy conclusions are friendlier toward currentgovernment policies. We are not aware of any audits being launchedregarding "bias" at conservative think tanks like the FraserInstitute; some have publicly confirmed that they are not beingaudited (including the Macdonald-Laurier Institute and the C.D. HoweInstitute). We are therefore leftwith the conclusion that thedecision to audit the CCPA is politically motivated to intimidateand silence its criticism of your government's policies.

We therefore strongly urge the CRA to put a moratorium on itsaudits of think tanks, until such time as a truly neutral criteriaand auditing process are implemented to ensure neutrality andfairness, and to ensure that the audit process does not silencedissenting voices. Periodic audit should be conducted in a fair,transparent, and even-handed fashion across all the variousthink-tanks that claim charitable status in Canada, with a focus onfinancial management and integrity (not on the content of theresearch being conducted). Why single out only one such researchcentre that happens to be more critical of government policy?

Instead of trying to muzzle and impede sound and legitimateresearch, it is now time for you to try to promote more effectivelythe public good in the form of sound critical research for whichCanadian researchers are respected internationally.