Charities that spend on political action a 'tiny fraction'

The Conservatives are clamping down on the political activities of registered charities, but tax returns show only a tiny fraction of Canadian organizations spend money for political purposes.

A Canadian Press analysis of the Canada Revenue Agency's charities database found 450 of the 85,000 charities registered in Canada reported spending money on political activities.

That's less than one per cent of all charities.

It is possible the actual number could be higher, since charities self-report to the CRA. Still, the finding that so few charities spend money politicking raises questions about the Conservatives' motivation for further restricting these activities.

At least one group questioned whether new budget measures to restrict charities' political activities are actually aimed at a handful of environmental organizations that have been a thorn in the government's side.

"It's very difficult to do a surgical intervention silencing specific charities or sectors within the broader charitable community without doing damage to organizations that might be more aligned with the government's perspective on social or environmental initiatives," said Ross McMillan of Tides Canada.

"I do think it's very likely ... that the government is really looking at environmental charities, and looking for ways to limit the effectiveness of those charities as they try and stimulate discussion and public discourse around major public-policy developments relating to resource extraction and the like."

'Charities who are engaged in advocacy or political activity will probably be much more cautious now, particularly with the threat of increased penalties over their heads.' Ross McMillan of Tides Canada

Prime Minister Stephen Harper's Conservatives and the pro-oilsands website EthicalOil.org have taken Canadian environmental groups to task for accepting money from big American foundations to finance their campaigns against oil and gas projects.

Natural Resources Minister Joe Oliver has accused "environmental and other radical groups" of trying to use money from "foreign special-interest groups" to hijack hearings on a pipeline that would bring Alberta oilsands bitumen to a port on the British Columbia coast.

Measures couldhave'chilling' effect

Tides Canada, which runs both a grant-making foundation and a charity that backs environmental and social-justice projects, has been singled out for receiving American grants.

But McMillan says there is a difference between political activity and advocacy work. He worries charities may shy away from advocacy work as a result of the new measures.

"Charities who are engaged in advocacy or political activity will probably be much more cautious now, particularly with the threat of increased penalties over their heads," he said.

"I think the country could be impoverished because of that chilling effect."

"These measures are designed, in part, to ensure that charities understand the rules that apply with respect to political activities...including those activities which may involve non-financial resources." Finance Department spokesman David Barnabe

The Finance Department said the budget measures do not fundamentally change the current rules.

"These measures are designed, in part, to ensure that charities understand the rules that apply with respect to political activities and that they are accurately reporting their political activities to the Canada Revenue Agency, including those activities which may involve non-financial resources," spokesman David Barnabe said in an email.

"These measures will apply to all segments of the charitable sector and will enhance the confidence of Canadians that donations of their hard-earned dollars are being used for charitable activities."

Charities are allowed to engage in limited, non-partisan politics. Most charities can only spend 10 per cent of their resources on political activities, although smaller ones are permitted to spend up to 20 per cent.

Budgetpledges $8Mto enforce rules

The recent federal budget promised to impose new penalties on charities that exceed limits on political spending or fail to provide full disclosure of funding and activities.

"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 budget says.

"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."

The budget included $8 million to help the CRA make sure charities play by the rules. Sanctions for those that don't could include fines or a suspension of a charity's ability to issue tax receipts.

The budget also announced measures to tighten rules on charities that give money to other charities for political purposes. Some charities are confused about what they can and cannot do under the proposed measures.

"What we are doing on our end is trying to recognize that on the one hand, these requirements are put in place in a way that doesn't create a chill in terms of public-policy engagement," said Michelle Gauthier of Imagine Canada, an advocacy group for Canadian charities.

"That's the last thing we would want to see happen as a result of these measures."