A union-backed charity that wants Canadian mining companies held accountable for overseas misdeeds is among the latest to be targeted by the Canada Revenue Agency for political activities.
The Steelworkers Humanity Fund Inc. is still awaiting a verdict from the agency, nine months after an auditor showed up at the Toronto office and hauled away several binders of sensitive material.
The fund, with about $1.3 million in annual revenues, has supported Canadian food banks and provided disaster relief abroad since its founding in 1985.
But the charity's support of the Canadian Network on Corporate Accountability or CNCA, to which it gave about $37,000 in 2013, appears to have piqued the agency's interest.
"We've been part of this CNCA, and no doubt that's part of the rationale" for the audit, Steelworkers president Ken Neumann said in an interview from Toronto.
"It's quite clear that it's targeted to folks that speak up sometimes against the government's policies."
The Canada Revenue Agency launched a series of 60 political-activity audits in 2012, after the Harper government publicly tagged some environmental charities as radicals and money-launderers and possibly linked to terrorists. The federal budget that year earmarked $8 million for the special audits, later increased to more than $13 million through to 2017.
Audit net widens
The first wave of such audits hit environmental charities, but the net has since been widened to capture human-rights organizations, anti-poverty groups, international-aid and religious groups. Other labour-supported charities have been targeted previously, including CoDev and the Canadian Centre for Policy Alternatives.
Many charities undergoing political-activity audits have been outspoken against Harper government policies, and the audits have tied them in knots, draining resources. At least one group has lost its coveted charitable status, while others report self-censoring their public statements for fear of aggravating the auditors.
The Canada Revenue Agency, however, says its choice of which charities to audit is made at arm's length from government, with no input from any cabinet minister, including Revenue Minister Kerry-Lynne Findlay. The agency declined comment on the Steelworkers audit.
The United Steelworkers' Canadian arm has frequently butted heads with the Conservative government over issues such as perceived lack of support for the manufacturing sector and what it sees as anti-labour policies.
The Steelworkers' charity draws largely on a one-cent-an-hour donation from union members, worth between $20 and $40 annually from workers, who can also opt out.
The fund gives about two per cent of its annual revenues to the non-charitable Canadian Network on Corporate Accountability, an umbrella group that includes faith groups, environmental NGOs and others, and is avowedly political, working to hold mining companies accountable in Canada for overseas misbehaviour.
Under the tax agency rules, charities can devote up to 10 per cent of their resources to political activities, and the Steelworkers' charity fund reports no political activities other than its small role in the CNCA, worth two per cent of all expenses.
The audit is looking specifically at the fund's formal agreements with the Canadian Network on Corporate Accountability, as well as any "non-partisan actions concerning the retention, opposition or change to any law, policy or decisions of any level of government in any country."
Clashes with government
The network clashed with the Harper government as recently as last month, when it said a newly appointed ombudsman for corporate social responsibility was toothless, and that Canada needs tougher laws to deal with rogue mining companies.
"They would see us as a thorn in their side," said Neumann. Prime Minister Stephen Harper has "got his scope clearly on us. … These [audits] aren't random."
Last month, the charity Dying With Dignity had its charitable status annulled after a Canada Revenue Agency audit. And the charity Environmental Defence says it is appealing an adverse ruling from the agency after an audit.
The agency says that, as of March 31, it has completed 21 political-activity audits, with 28 still underway. Another 11 audits are to be started before the project ends in 2017. Officials will not identify any of the target charities because of the confidentiality provisions of the Income Tax Act.
So far, five charities have received notices of the agency's intention to revoke their charitable registration, while six have received education letters, and eight have been asked to sign compliance agreements for more grievous problems. There has also been one voluntary revocation, and one annulment, Dying With Dignity.
Also on HuffPost:
See More of America's Strangest TaxesIn Maine, blueberries are big business: the Vacationland State produces 99 percent of our nation’s blueberries, averaging 80 to 85 million pounds per year. If you enjoy some this summer, count on being taxed. Anyone “growing, handling, processing, selling, or purchasing” the famous export must pay up, according to Maine’s state legislature.Photo: Ted Horowitz/Corbis
See More of America's Strangest TaxesWhile you can bet you’ll be taxed on gambling in many states, Alabama takes a particularly hard line. Buy a deck of playing cards—even for innocuous reasons like keeping the family amused on a road trip—and it comes with a tax of 10 cents per pack. If you consider the tax unjustified, here’s some perspective: sellers pay an additional $1 per pack. On second thought, however, that cost probably gets passed right on to you.Photo: Zero Creatives/cultura/Corbis
See More of America's Strangest TaxesCalifornia is known for farmers’ markets, heavenly produce, and restaurants that have long championed what’s fresh and local. And while fresh fruit is duty free, the presliced variety of dubious origin sold in vending machines is not. If you’re somehow compelled to press the button, you’ll pay a staggering 33 percent tax—and honestly, you probably deserve it.Photo: Andia / Alamy
See More of America's Strangest TaxesOrder a latte to go from a Denver coffee shop, and you won’t have to pay an extra cent for the paper cup. But if you want a lid to prevent that hot liquid from spilling onto your pants (or, you know, burning your lap), that part of the container will be taxed. It turns out Colorado deems coffee lids and napkins to be “nonessential” packaging, which makes them subject to the state’s 2.9 percent tax.Photo: John Wilkes Studio/Corbis
See More of America's Strangest TaxesUnlike most amusement park rides, a hot-air balloon lets you linger high above the landscape and actually enjoy the view. But in Kansas, that luxury comes with a tax—unless the balloon isn’t tied down. Untethered, piloted balloons that travel some distance are considered a method of air transportation and so, thanks to the federal Anti-Head Tax Act, are exempt from the state’s amusement tax.Photo: Corbis
See More of America's Strangest TaxesIf you’re seeking a more permanent road-trip souvenir, Arkansas may not be the best state to get inked. As of 2005, all tattoos, body piercings, and even electrolysis hair-removal treatments are subject to Arkansas’s 6 percent sales tax. In retrospect, this makes a sort of sense: Arkansas is officially known as The Natural State.Photo: JONATHAN ERNST/Reuters/Corbis
See More of America's Strangest TaxesBring an extra five singles if you decide to scope out any of Texas’s 200 or so strip clubs. In 2011, club owners challenged the $5 “pole tax” passed in 2007, claiming it violated the right to free speech, but the court ruled it constitutional. The tax has so far raised more than $15 million—a portion of which funds sexual assault prevention programs.Photo: Nicky Loh/Reuters/Corbis