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Facts, figures on a new crop of tax audits of charities for political activities

OTTAWA - Facts and figures on a new crop of Canada Revenue Agency audits since 2012 focusing on the political activities of charities, begun after several cabinet ministers complained about environmental charities that oppose some proposed energy projects in Canada:

Budget: CRA given $13.1 million between 2012 and 2017 for a special team of auditors to examine political activities of charities. Agency will have $1.7 million annually for a permanent team after 2017.

Politically active charities: CRA says fewer than one per cent of registered charities report any political activities, or 355 of about 55,000 organizations who filed annual returns as of June 28 this year under new rules. There are about 86,000 registered charities in Canada.

Rules: Policy established in 2003 allows charities to devote up to 10 per cent of their resources to defined political activities, although partisan activities — endorsing candidates or parties — are always forbidden. The rules do contain some grey areas about what constitutes political activity.

Audits: CRA says its charities directorate plans to conduct 60 audits focused on political activities from 2012 to 2016, or an average of 15 a year, compared with 900 regular annual audits. Some 52 such political-activity audits are now in process.

Targets: CRA reported that as of Jan. 31 this year, 31 audit files for political activities included two anti-poverty groups, four education groups, three religious groups, as well as charities for health, human rights, animal welfare, environment and community organizations.

Length: CRA says such audits can last months or years, depending on complexity.

CRA example of political activity: When a charity "explicitly communicates a call to political action, that is, encourages the public to contact an elected representative or public official and urges them to retain, oppose, or change the law, policy, or decision of any level of government in Canada or a foreign country."

Results: CRA says no charity has so far lost its status under the new regime of political-activity audits, though it has issued "education letters" and "compliance agreements" to a few. One doctors' charity lost its status in 2012 after a political-activity audit that predated the current round.

Quote: "The CRA has a legal responsibility to ensure that charitable dollars, donated by charitable Canadians, are used for charitable purposes. ... CRA audits occur at arm's length from the government and are conducted free of any political interference." — Revenue Minister Kerry-Lynne Findlay.

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