Senate examines foreign funding of charities

The Conservative government has quietly begun looking into the charitable status of environmental groups in the Senate.

Senator Nicole Eaton is sponsoring an inquiry into what she calls "funding by foreign foundations." Eaton began her debate Tuesday by laying out what she considers to be a threat to the Canadian economy.

"This inquiry is about master manipulators who are operating under the guise of charitable organizations in an effort to manipulate our policies for their own gain," she said in the Upper Chamber.

Environmental groups don't see it that way.

"My fear is that they will just try to smear us and then walk away," said John Bennett, executive director of Sierra Club Canada. "And that they're hoping to frighten off U.S. foundations from supporting us... And they're going to try to turn off the public from supporting us."

Eaton offered another explanation in an interview with CBC News.

"Even if the inquiry only serves to give a heads up to some foundations that you're being looked at and if you want to keep your charitable status you might think about your money you get [then it is worthwhile]."

That reaction didn't surprise the opposition.

"They are being such bullies and they are pushing back on these perfectly legitimate groups that have every right as Canadian foundations and NGOs to take money that's legal money ... and make the case that reflects the interests of many, many Canadians," said Alberta Liberal Senator Grant Mitchell.

There was speculation in January that the government would go after environmental charities in the House of Commons finance committee. That committee is in the middle of a 12-part study of tax incentives for charitable donations. So far, the finance committee has focussed mainly on how to encourage Canadians to increase their donations to all charities.

The thinking behind starting this process in the Senate is that if any changes need to be made to legislation, the government can do it faster this way.

"The Senate has the time to do things ... that [MPs] don't. And I think it's a good use of the Senate, quite honestly, because you can originate bills in the Senate," explains Eaton.

So far, besides Eaton, six other Conservative senators are expected to speak on this subject. The presentations will cover a variety of issues related to funding by foreign foundations. They range from the economic impacts to the effect on Canadian sovereignty.

Senator John Wallace was to speak Wednesday about the current state of legislation related on the issue.