Political-activity audits of charities being wound down by Liberal government

The Liberal government is winding down the political-activity audits of charities that were begun by the Harper government — but there's no amnesty being offered to the two dozen charities already caught in the program.

Revenue Minister Diane Lebouthillier announced the reversal today, saying results so far indicate that charities have largely been following the rules restricting political activities.

"The results of the political-activities audit program have shown that the charities audited have been substantially compliant with the rules regarding their involvement in political activities," she said in a release.

"In light of these outcomes, the program will be concluded."

The controversial program was launched with fanfare in the 2012 Conservative budget, with funding that grew to $13.4 million and was supposed to ensnare 60 charities over five years. The program was launched as two Conservative cabinet ministers, Joe Oliver and Peter Kent, vilified environmental charities for interfering in the government's pipeline and energy policies.

The first wave of audits hit environmental groups but later waves expanded to include poverty, human-rights and international-development charities. Critics said the audits not only were costly for poorly funded groups to defend themselves, but created an "advocacy chill" as some charities self-censored to appease auditors.

Violations not generally political

Lebouthillier said only five of the charities caught by the program were notified they would lose their charitable status — but said their violations of charity rules generally didn't result from their political activities but from other violations the auditors discovered.

The Canada Revenue Agency never released the names of all the targeted charities, though many came forward to identify their troubles in the news media.

The announcement Wednesday is good news for six unidentified charities who had been targeted for audits that had not yet begun. But the 24 charities still in the throes of unfinished political-activity audits will continue to be scrutinized until the auditors' work is finished.

The minister of national revenue does not and will not play a role in the selection of charity audits …- Revenue Minister Diane Lebouthilllier

The minister said in making that decision she was respecting the arm's-length relationship between her office and the Charity Directorate.

"The independence of the Charity Directorate's oversight role for charities is a fundamental principle that must be protected," she said in a release.

"The minister of national revenue does not and will not play a role in the selection of charity audits or in the decisions relating to the outcomes of those audits."

"Our government recognizes the critical role charities play in our society and their valuable contribution to public policy and public debate on behalf of all Canadians," the minister added.

10% limit

"To help them continue this important work, charities must be assured they are operating in a regulatory environment that respects and encourages this contribution."

She also said the Canada Revenue Agency will be consulting Canadians to "further clarify" the rules surrounding charities' involvement in political activities.

The current rules restrict charities from putting more than 10 per cent of their resources into political activities, and forbid partisan activities of any kind, such as endorsing a party or candidate.

One of the first charities to be audited — and to be hit with a deregistration notice — was Environmental Defence. The group is currently awaiting word from the Canada Revenue Agency about its internal appeal of the agency's decision to revoke charitable status.

"This is good news and consistent with our view that the political activities audits were meant to send an unwarranted chill through charities that work to improve Canadians' environment, health and quality of life," said Tim Gray, executive director, said Wednesday after the announcement.

"We look forward to working with the federal government as it acts to keep its commitment to protect and improve the ability of charities to engage in critical public policy work."

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