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The Canadian Press - ONLINE EDITION

NDP calls for external probe of tax agency's political audits of charities

OTTAWA - The NDP is calling for an independent probe into the Canada Revenue Agency's targeting of some Canadian charities for their political activities.

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 per cent 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."

Asked for comment on the NDP letter Wednesday, Findlay's office provided a week-old statement that itself repeated the minister's talking points in the House of Commons: "CRA audits occur at arm's length from the government and are conducted free of any political interference."

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.

Rankin, a former environmental lawyer in British Columbia, said his proposed independent probe could be run by a retired judge or even a retired CRA official who knows the auditing process.

He said several charities undergoing political-activity audits have approached him with tales of woe, but don't want their stories revealed for fear of retribution by the tax agency.

"This is the dilemma, that people are cowed by this government into silence," he said in an interview from Victoria. "It's frustrating to me that I can't go public with statistics."

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 per cent report carrying out political activities.

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