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CRA smacks PEN Canada with audit in latest of Harper government's attack on charities

The small charity -- which has employed one to two full-time staff in recent years -- has criticized the Harper government, particularly around the government's muzzling of scientists. But PEN's leadership says, "We won't be cowed."

Left: Prime Minister Stephen Harper. Right: Margaret Atwood, one of PEN's thousand members.

“Now's the time to support PEN Canada, faced with a punishing audit by the Harper Conservatives,” renowned Canadian author Margaret Atwood tweeted today. “Why does the freedom of expression threaten them?”

PEN Canada, a small charity which represents 1,000 writers and supporters including Atwood and Nobel Prize-winning writer Alice Munro, is the latest charity to be audited by Canada Revenue Agency for taking part in 'political activities'. The small charity -- which only had one to two full-time staff in recent years -- has criticized the Harper government in the past, particularly around the government's muzzling of scientists.

No political agenda?

PEN Canada president Philip Slayton said his organization "absolutely did not" spend more than 10 per cent of its budget (the organization reported $237,000 in operating expenses in 2011-2012) on political expression. Canadian charities, by law, are allowed to use  up to 10 per cent of their annual budget on political activities. 

"The first thing the CRA will say if you ask them is, 'we have no political agenda', but this is a bit disingenuous," he said. "The government ultimately tells them what to do and, and the government is of course political."

Slayton said he didn't know if PEN Canada was 'targeted' because it criticized the federal government. He said he only had anecdotal information about which charities have been audited, but said it seemed to have started with environmental charities, including the David Suzuki Foundation and Environmental Defence. 

Earlier this year, when The Vancouver Observer asked the late former Finance Minister Jim Flaherty why the CRA appeared to be targeting environmental charities, he confirmed that the government does direct policy around CRA audits, adding that charities cannot accept money from "terrorist organizations".

But some say the feds are using a double standard by specifically auditing charities that have criticized government, while ignoring others which are equally political, but express views that are in line with federal Conservative policies.

“It shows the vindictive nature of this government," said Harvey McKinnon, one of Canada's most prominent fundraisers, who has questioned the government's use of audits to "bully" charities.   

A double standard for audits

McKinnon said the CRA appears to go after environmental organizations and other progressive charities based on politically-driven complaints.

"The CRA says it's only auditing in response to complaints, but it's clear that the only ones who are complaining are people at Ethical Oil (a pro-industry lobby group) who are intimately linked to the Harper government," he said, referencing Ethical Oil's calls for an "investigation" of the David Suzuki Foundation. He noted that Ethical Oil was founded by Alykhan Velshi, former communications director for then-Immigration Minister Jason Kenney, who later returned to a senior position in the Prime Minister’s Office. Velshi's successor, Kathryn Marshall, was married to Hamish Marshall, a former manager of strategic planning for the Prime Minister.

Meanwhile, it appears to have never audited major charitable organizations like the right-wing Fraser Institute (which has a $8.5 million budget for charitable programs) or the Macdonald-Laurier institute, whose managing director, Brian Lee Crowley, is a senior fellow at the Virginia-based Galen Institute, which advocates private health care policies. Crowley is also a former fellow with the Heritage Foundation, funded by libertarian U.S. oil barons David and Charles Koch. Although both think tanks say they are non-partisan, the late Conservative Finance Minister was said to have written a letter of support for the Macdonald Laurier Institute in 2009,  while Crowley chaired an "off-the-record policy retreat" for the minister in 2011. The Fraser Institute has criticized the Harper government in the past, but  also has significant Conservative ties: former Harper advisor Tom Flanagan, Manning Centre founder Preston Manning, Wildrose Party leader Danielle Smith and former Ontario Premier Mike Harris have all worked with the influential think tank. 

For McKinnon, the effect of these audits is that charities will be afraid to speak out on important social issues. No charity wants to be audited, he said, because it's time-consuming, expensive and stressful. 

"The Harper government and CRA harassment is an effective way to silence any voices that may be critical of Conservative Party policies," he said. “There's a chill out there. I've talked to staff at charities who are actually afraid. For instance, can staff at a food bank talk about why the numbers of the poor are increasing?  If they do, will they audited?” 

He called it ironic that an organization like PEN Canada that promotes freedom of expression is "being targeted in what's supposed to be one of the most democratic countries in the world.”

Slayton said PEN Canada will cooperate with the CRA audit, but will not stop freely expressing its views. 

"We won't be put off, or cowed," he said. "If we've been targeted (by government), then they've picked the wrong target." 

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