01/07/2015 07:21 EST | Updated 03/09/2015 05:59 EDT

Ecology Action Centre 'backs off' activities after CRA audit

A Halifax environmental group that survived a special "political activities" audit says it has become more cautious — even suggesting it backs off issues — since being targeted by the Canada Revenue Agency.

"We take a little more care. We converse more and we call our charity lawyer more often before we speak out on issues and maybe we back off stuff we wouldn't otherwise have backed off of," says Mark Butler, policy director of the Ecology Action Centre.

The EAC was one of a number of environmental groups with charitable status audited by the Canada Revenue Agency in 2012 after the Harper government poured millions of dollars into a special team to audit the political activities of charities.

The CRA declined to discuss this case, citing privacy rules. It denies it is being used as an instrument of revenge on critics of the Conservative government.

In February 2014 the CRA notified the Ecology Action Centre it would not revoke the group's charitable status. CRA said it was satisfied with measures taken to track its political activities.

"We passed the audit. They found we had good financial management. We hadn't violated any of the laws. They have asked us to to do a better job of tracking political activity," says Butler.

Obeying the 10% rule

By law, charities may not devote more than 10 per cent of their resources to political action.

To satisfy the CRA, the Ecology Action Centre has developed a spread sheet. Every month, each of its 40 staffers record how much time is spent on political activities, administration and fund raising.

In July 2014 the Ecology Action Centre detailed the steps it's taken to meet the terms of its February 2014 compliance agreement with the CRA.

Butler says the organization remains committed to its mandate to protect the environment. Its seven core issues — coastal, energy, marine, wilderness, transportation, food and built environment — remain unchanged.

Butler declined to identify examples of the EAC pulling back because of the audit.

"I think it's perhaps we take more care, rather than backing off, might be a more accurate way to phrase it."

Butler says political activity is a grey area, which he defines as exhorting the public to change laws or write to politicians.

He agrees charities should not be partisan and has no objection to being audited, calling the ability to issue a tax receipt a "privilege" that needs to be justified.

Still, he questions the fairness of these audits.

"It does look like environmental organizations, particularly environmental organizations that are at times critical of the government, are receiving more attention than any other part of the charitable sector," he says.

"I don't think that's a fair and neutral application of the laws as they stand."

CRA says it is not being unfair to any one group.