Tax Audits on Canadian Charities Criticized

22 July 2014Politics

Dean Beeby, reporting for The Canadian Press, as published by The Huffington Post:

The Conservative government has stepped up its scrutiny of the political activities of charities, adding fresh money for more audits, and casting its net well beyond the environmental groups that have opposed its energy policies.

Canada Revenue Agency, ordered in 2012 to audit political activities as a special project, now has also targeted charities focused on foreign aid, human rights, and even poverty.

The tax agency has also been given a bigger budget — $5 million more through to 2017 — and is making the special project a permanent part of its work.

With 52 political-activity audits currently underway, some stretching out two years and longer, charities say they’ve been left in limbo, nervous about speaking out on any issue lest they provoke a negative ruling from the taxman.

And their legal bills are rising rapidly — in some cases adding $100,000 to already strained budgets — as they try to navigate often-complex demands from CRA auditors.

At best this represents an onerous burden on charitable organizations to ensure rules are being followed; at worst it is a complete waste of public funds for political gain.