THE BLOG

Canada Shouldn't Feel Superior to China's Charity Regulation

10/02/2014 12:31 EDT | Updated 12/06/2014 05:59 EST

I am in Beijing for about the 50th time since beginning my second round of advising the Ministry of Civil Affairs' officials drafting the law of charity in China in 2005. The elephant in the room is the protesters occupying Civic Square in Central Hong Kong and blockading the streets.

Each day this week the frequency with which the television goes black when CNN or BBC reports on Hong Kong increases -- as does the length of time the TV stays black.

The Chinese officials responsible for the draft charity law in China are aware of press reports about Canada Revenue Agency's audits of charities in Canada allegedly engaged in "political activities." They are extremely interested that the Director-General of Charities Directorate "gave consideration to, you know, what you might call political leanings" when selecting charities for audit.

When considering civil society organizations, there are few things to which government officials are more sensitive than political activities. It is doubtful that the activities considered unacceptably political by the Communist Party of China are any more overtly political than the impugned activities of charities in Canada. The de facto test is whether the social activism, policy dialogue or campaigning results in political discomfort for the government.

Over the years I have spent many hours discussing the legal meaning of political activities in charity law with Chinese officials. One of the reasons the law has not yet been enacted is that events such as today's demonstrations in Hong Kong, or Canadians and others succeeding in unfurling a Tibet flag in Tiananmen Square in the run-up to the Beijing Olympics, serve to increase the caution of officials higher up the political food chain.

I have repeatedly emphasized that one of the more valuable roles of charities is when they serve as a thorn in the side of governments. Charities can raise difficult arguments and initiate public debate on best policies before governments are ready to discuss controversial issues. A subtle and strategic response from governments can even enable governments to use charity campaigns as political cover for modifying their policies and laws.

The Chinese do listen when I recount the opposition of environmental activists to creating a 600-kilometre reservoir behind the Three Gorges Dam in Hubei province. Because I took my son on a six-day boat trip down the Yangtze River from Chongqing to Wuhan about a month before the flooding began, I was able to talk about personal memories of awe-inspiring Yangtze gorges that no one will ever be able to experience again.

Back then these environmentalist agitators were vilified by the government. China proceeded to flood 13 cities, 140 towns and 1,350 villages. Creating the world's largest hydro-electric power project displaced 1.2 million people, in addition to the environmental damage. In retrospect, China wishes it had listened more to the merits of the protests.

The Chinese are particularly interested in the fate of charities that have their registration revoked for political activities. I described the "appeal" process which is internal to CRA and provides the charity no right to have an oral hearing. The revoked charity's appeal right is to serve on the same Minister who just issued the Notice of Intention to Revoke "a written notice of objection in the manner authorized by the Minister." We chatted about whether the Canadian process gives the charity more effective appeal rights than a Chinese organization appealing the ruling of the Party to the Party.

There is nothing in the Income Tax Act that requires CRA to separate its appellate function from its revocation function. The Director General of Charities Directorate recently wrote me acknowledging that CRA auditors who recommended the revocation talk to the Appeals Directorate officials about revocation files. However, the charity never has an opportunity to cross-examine CRA officials as to the basis for, or accuracy of, their findings against a charity.

After the Objection stage, a revoked charity can appeal to the Federal Court of Appeal. However, it has been more than three decades since a charity has succeeded in having the Federal Court of Appeal overturn a revocation. Even then, it was on a technical administrative law grounds rather than on the substantive charity law grounds.

When one compares the pursuit in Canada and China of charities accused of political activities, Canadians have fewer reasons to be sanctimonious than we think.