Revenue Canada forbids Unitarians from working for justice

One of Canada's most venerable religious charities has been told by the Canada Revenue Agency that it can no longer work for justice in the world.

Agency officials conducting a political activities audit on the Canadian Unitarian Council said the broad statement in the council's bylaws is too vague.

"Vague purposes are ambiguous and can be interpreted in many different ways," the agency said in a compliance letter, which includes other demands more than a year after the audit was launched.

The Canadian Unitarian Council's bylaws were accepted by Industry Canada when the Toronto-based charity submitted them for approval in 2013.

But the warning three years later from the CRA's auditors forced the group to rewrite its bylaws at a May meeting in Vancouver, purging any reference to "justice" or "social justice."

Expectations soured

"I have been extremely concerned about this audit process," the council's executive director, Vyda Ng, said in an interview. "It started in January of 2015. We're in the middle of 2016. We're still in the process."

Many charities targeted by CRA's political activity audit program, begun in 2012 under the Stephen Harper government, had expected relief from the Liberals, who campaigned on a promise to set charities "free from political harassment."

But those expectations soured in January when Revenue Minister Diane Lebouthillier said the 24 political activity audits underway would continue without interference from the new government. She also said notices of revocation of charitable status issued to another five groups would not be rescinded.

The only relief was that political activity audits set to begin on six unidentified charities, and held in abeyance during last year's federal election campaign, would be cancelled.   

The Canadian Unitarian Council was a vocal critic of the Harper government — raising objections to trade, pipeline and prison policies, for example — as were many of the 60 charities targeted in the $13.4-million political activities audit program.

The first wave of audits in 2012 hit environmental groups who had been vilified by Conservative cabinet ministers for opposing the government's energy policies. The net was later broadened to include poverty, international-aid and human-rights organizations.

I do wish the government would stop these audits, like, right now.- Vyda Ng, executive director, Canadian Unitarian Council

The Canadian Unitarian Council has annual revenues of less than $1 million, and in 2014 issued just $84,355 in receipts for tax deductible donations. Legal costs for the CRA audit hit $38,000 in 2015, and continue to rise this year.

"I do wish that the government would stop these audits, like, right now," said Ng. "It has cost me many, many, many hours of work. … It has also cost us a lot of money that we haven't budgeted for."

Ng declined to discuss other demands by CRA auditors, but said she expects the process to be concluded by the end of July.

The group asked its law firm whether it could insert "promote justice and human rights practices" to replace the forbidden "work for justice in the world," but it was nixed.

"CRA could also find promoting human rights to be a political purpose which is not allowed," said the firm Carters Professional Corp., which specializes in charity law.

Margaret Rao, who heads a non-profit affiliate of the group, said: "We still work for social justice; we just don't spell it out."

She calls the audit a "royal pain."

"There are repercussions of what was started during the Harper regime [that] continue today," Rao said in an interview.

The CRA previously challenged the wording of the charitable purposes of at least two other groups — Oxfam Canada and Credit Counselling Services of Atlantic Canada Inc. Both were told they cannot work for the "prevention of poverty," which is considered political, but can "alleviate poverty," which is charitable. Neither charity was subject to a political activity audit, though.

A spokeswoman for the CRA declined comment, citing confidentiality provisions of the Income Tax Act that prevent the agency from even confirming whether or not a charity is under audit.

But Jelica Zdero said that as of the end of June, there were 16 political-activity audits still underway.

6 given notice

Of 38 completed audits so far, only one found no problems. Six charities have been given notice the agency intends to revoke their charitable status, one of which – Environmental Defence – has self-identified and is appealing the decision. At least four of the others are also appealing.

In March this year, more than a dozen groups launched a letter-writing campaign and petition to end the audits, saying the Liberals have failed to deliver on their campaign promise.

But Lebouthillier says the CRA's Charities Directorate must operate independently.

"I cannot and will not play a role in the selection of charity audits or in the decisions relating to the outcomes of those audits," she said earlier this year.

On June 6, the minister promoted the head of the Charities Directorate to become a deputy assistant commissioner, working in the agency's legislative policy and regulatory affairs branch.

Cathy Hawara, previously with the Privy Council Office under then Prime minister Harper, had managed the political activities audit program since its inception in the 2012 federal budget.

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