When Canada’s tax regulators announce they’re going to monitor our system more carefully for rule-breakers, most Canadians instantly recognize it as a good thing. Only the rule breakers themselves, naturally, squawk. Those of us who are careful to abide by the laws and requirements of our tax code clearly value playing fair. Those who bend and disregard the rules? Well, they clearly…don’t.
That’s why it’s not surprising that Rick Smith, head of Environmental Defence, would so fiercely battle Ottawa’s attempt to more carefully enforce existing and longstanding tax laws. With breathtaking melodrama, Smith tries to paint what is no more than a straightforward decision to enforce long-standing tax legislation, as some grave threat to freedom of speech and democracy.
This spring’s federal budget, he howls in a recent Toronto Star op-ed, “takes direct aim at any voice that may disagree with powerful oil interests.” Then he proceeds to rattle off a catalogue of allegations every bit as bogus as Environmental Defence’s claim to be doing “charitable” work — a claim that has allowed his activist organization to cash in on generous subsidies intended for genuine charities.
As might be expected of someone trying to justify their political work as charity, Smith’s June 4 diatribe is factually wrong in almost every way. He claims that his group’s fierce opposition to the Northern Gateway pipeline — a project endorsed by the Conservative government that would take oil from Alberta to export on the west coast, creating thousands of jobs in the process — is vital because “the majority of British Columbians oppose new pipelines.” In fact, an Ipsos Reid poll earlier this year found that the number of British Columbians supporting the Gateway pipeline proposal significantly outnumber the number of residents opposed to it. He paints his group as heroically standing as “nature’s last line of defence,” when actually, Canadian pipelines had between 2002 and 2009 a 99.9998% safety record, significantly safer than any alternative method for shipping liquid energy.
Smith calls it unfair that the oil industry gets “$1.3 billion in federal subsidies, paid by taxpayers, a year,” while martyrs like his group face overdue scrutiny over questionable tax filings. Actually, a thorough study from the University of Calgary School of Public Policy last fall found that claims about the oil and gas industry getting subsidies are erroneous and, quite the opposite, once all payments to government are taken into account, “oil and gas tends to be more heavily taxed than the non-resource sector, except in Newfoundland and Labrador.”
Of course, Smith is entitled to misrepresent reality and spin fiction till the cows come home. That’s his fundamental right and no one, including the Canadian Revenue Agency, is trying to deny him that — another false claim he makes by insisting that Ottawa would “silence” his activism. What the CRA is trying to do is ensure that our generous charitable subsidies are being utilized for the purpose they were intended for.
Canada’s charitable laws have long been clear that groups who enjoy benefits that come with being a registered charity (tax free status and the ability to issue tax receipts, among them) must not use those subsidies to play a lot of politics. That’s not what they’re intended for. But Environmental Defence has been playing a lot of politics.
It launches anti-industry, anti-jobs campaigns like “Exposing the Tar Sands,” which it claims are “TARnishing the maple leaf.” It runs attack ads targeting Canada’s oil industry. It lobbies Ottawa and Ontario to campaign for renewable-friendly policies. It even launched an overtly partisan campaign targeting Peter Kent, running ads, canvassing door-to-door and making 50 000 phone calls to protestor his support of ethical oil. That’s pretty much as political as it gets.
To be perfectly clear, this kind of political activity is perfectly legitimate — even appreciated — in a free society. But that doesn’t mean it qualifies as charitable work deserving a subsidy. In fact, it would seem to be in glaringly evident violation of Canada’s charity laws.
This is why Smith must resort to histrionics, portraying his case as some riveting moral epic, pitting brave environmental warriors against sinister, rapacious authoritarians. The mundane reality — the tax department watching more closely to ensure charitable subsidies are used according to existing rules — won’t earn transgressors like Environmental Defence much public sympathy.
On the contrary: A national Angus Reid poll conducted immediately after the March budget found that the most popular budget item — far more popular than ending the penny, even — was “requiring charities to provide more information on their activities and foreign funding,” with 80% of Canadian applauding the government’s plan. Canadians clearly know how important it is that charitable subsidies go where they’re intended: to legitimate charities, not political activists.
The vast number of registered charities who operate according to the rules clearly have nothing to worry about. The reason that Environmental Defence is panicking must be because it does. Since the group’s essential purpose is to “challenge and inspire change in government, business and people,” according to its own declared mission, it probably can’t stop being political. That’s fine: it can keep up its political activism all it wants. The only thing set to change is that Environmental Defence will just have to finally stop pretending that it’s charity and, instead, raise its money some other way — a way that doesn’t involve taking unfair advantage of Canadian taxpayers.
Jamie Ellerton is executive director of EthicalOil.org.
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