In a letter Wednesday to Revenue Minister Kerry-Lynne Findlay, the party says the alleged misuse of tax agency audits against political opponents of the government is muzzling charities and draining them financially.
New Democrat MPs Murray Rankin, revenue critic, and Megan Leslie, environment critic, say the air will be cleared only through an independent external investigation that reports to Parliament.
A Canadian Press investigation reported that the tax agency has stepped up its probes of charities for their political activities, well beyond a first wave of audits of key environment groups that challenge the government’s energy policies.
International aid groups, anti-poverty organizations, and human-rights agencies have also been swept up in the net, with some 52 political-activity audits now in progress.
An initial budget of $8 million set out in the 2012 budget has grown to $13 million, and political-activity audits are being made a permanent part of the Canada Revenue Agency’s work.
“The alleged misuse of the Canada Revenue Agency to target political opponents of the government threatens the very integrity of Canada’s tax system,” says the NDP letter, a copy of which was obtained by The Canadian Press.
“Canadians deserve answers. Therefore, we are requesting that an independent external investigation be launched into the allegations of political interference in the audits of charities, and that the findings of that review be reported to Parliament.”
Canadian charities are permitted to devote up to 10 percent of their resources to political activities, under a 2003 CRA policy, though they cannot endorse or oppose any particular party or candidate.
But definitions of “political activity” can be fluid, and the relatively small number of charities that do report political activities say they’re concerned tax auditors may be redrawing the lines.
“I fear that the evidence strongly suggests that the Conservative government has been misusing the CRA to target its political opponents,” says the NDP letter.
“New Democrats believe that these very serious allegations demand immediate action.”
Some charities report that the audits are driving up their legal bills—to more than $100,000 in one case—as they consult lawyers to represent their case to the tax agency. Some audits have dragged on for more than two years with no end in sight.
No charities have so far lost their coveted charitable status in the current round of political-activity audits, though a doctors’ group was stripped of its registration in a previous round.
There are more than 86,000 registered charities in Canada. Less than one percent report carrying out political activities.