Environmental charities don't top list of foreign-funded groups

Tax returns filed to the Canada Revenue Agency show most of the foreign money that fills the coffers of Canadian charities does not go to the environmental groups now in Tory crosshairs.

Foundations fear 'chill' from Harper government's focus on cracking down on charities

The Conservatives have taken some Canadian environmental charities to task for accepting money from wealthy foreign donors to finance their campaigns against oil and gas projects.

Charities have urged Conservative cabinet ministers like Environment Minister Peter Kent, seen here in the House of Commons May 9, to dial down the rhetoric about foreign donors who launder money through Canadian organizations. (Adrian Wyld/Canadian Press)

But tax returns filed to the Canada Revenue Agency show most of the foreign money that fills the coffers of Canadian charities does not go to the environmental groups now in Tory crosshairs.

An analysis by The Canadian Press of charities' annual tax returns found only one of the top 10 foreign-funded charities could be considered a conservation group.

That group is Ducks Unlimited Canada. Tax returns show it has reported receiving more than $33 million over the years from foreign sources, making it the fifth-largest recipient of money from outside the country.

Ducks Unlimited Canada says it receives foreign funding from its sister organization in the United States, U.S. federal and state governments, corporations, private foundations and individual contributors.

Care Canada reported the largest amount of foreign funding. It has accepted nearly $99 million over the years from foreign donors. Most of that money came from United Nations agencies, foreign governments and the charity's international members.

Second was World Vision Canada, which has reported $89 million in foreign income. World Vision Canada says the vast majority of that money comes from gift-in-kind donations from UN organizations and international corporations with branches in Canada.

Third was Hamilton's McMaster University, which, like many post-secondary institutions, has charitable status. McMaster has reported $43 million in foreign income.

The charity that reported the fourth-most foreign funding was the Canadian UNICEF Committee, with $37 million.

Small minority report foreign income

The CRA database shows only 1,998 of the 85,000 or so registered charities now active in Canada have reported any foreign income.

Most are aid organizations, religious groups or schools.

"It's certainly not as if this was something new," said Marcel Lauziere of Imagine Canada, an advocacy group for Canadian charities.

"You know, if 80 per cent of funding of charities came from foreign sources, you'd say, 'okay, that's a bit bizarre. What does that mean?' That's not the case at all. The lion's share, by far, of the funding that charities get are provided by Canadians," said Lauziere.

Canadian charities do not have to disclose on their tax returns which foreign groups gave them money. But the recent federal budget promised to impose new penalties on charities that fail to provide full disclosure of funding and activities.

"There have also been calls for greater public transparency related to the political activities of charities, including the extent to which they may be funded by foreign sources," the budget document says.

Sanctions for charities that don't play by the rules could include fines or a suspension of a charity's ability to issue tax receipts.

Environmental charities targeted

Prime Minister Stephen Harper's Conservatives have been critical of charities that receive foreign funding, particularly environmental groups.

Natural Resources Minister Joe Oliver has accused "environmental and other radical groups" of trying to use money from "foreign special-interest groups" to hijack hearings on a pipeline that would bring Alberta oilsands bitumen to a port on the British Columbia coast.

Environment Minister Peter Kent even raised the spectre of criminal activity in a recent interview broadcast on CBC Radio's The House. Asked by host Evan Solomon if the government is trying to silence environmental groups by taking away their charitable status, Kent raised concerns about money laundering.

"Some groups with charitable status have been going well beyond the CRA guidelines for what is acceptable practice as a charitable agency," Kent said on CBC. "And there has also been concern that some Canadian charitable agencies have been used to launder offshore foreign funds."

Kent repeated the charge in the House of Commons earlier this week.

"The fact of the matter is some charitable organizations have allegedly used funds from outside this country inappropriately in regard to their charitable status," Kent said during question period. "They can call it money laundering, they can call it a financial shell game or they could call it three card monte."

Foundations fear 'chill'

The organization that speaks for foundations bearing illustrious Canadian names like Asper, Bronfman, McCain and Bombardier says it's worried about the Conservative government's recent attacks on figures in the charitable sector.

Philanthropic Foundations Canada has been trying to keep its members informed about changes in the federal budget that touch on charities, but fears a chill descending on the sector.

"The concern is ... that foundations will say to themselves, it's just not worth getting involved in funding charities that seem to be involved in doing any kind of advocacy or public policy work that involves making public statements, when in fact all of that is perfectly legitimate and is not being criticized by the government nor being changed," said Hilary Pearson, president of Philanthropic Foundations Canada.

Pearson says the organization would like to see the rhetoric cool down.

"There's obviously a level of discomfort with the language that's being used," said Pearson, who is scheduled to meet with the Canada Revenue Agency officials next week.

"American foundations just like Canadian foundations don't like to be labelled as somehow trying to illegitimately influence government, and certainly not laundering money. I think that would offend quite a lot of them."

Currently, a registered charity is allowed to engage in non-partisan political activity only if it represents no more than 10 per cent of its resources. The proposed changes would specify that if a charity or foundation gives money to another charitable group so they can carry on such activity, both the donor and the recipient would have to count the money toward their 10 per cent limit.

At the same time, a Senate finance committee is set to study the politically-loaded issue of foreign cash flowing to organizations with charitable status.

Prime Minister Stephen Harper defended the moves Wednesday.

"What is incumbent upon all charities is that they respect the laws regarding political activities. Those laws are clear," Harper said in the House of Commons.

"We will make them even clearer," Harper said.

Stephen Huddart, president of the J.W. McConnell Family Foundation -- Canada's second-oldest family foundation -- says charitable organizations have a long history of taking positions on matters of public interest.

The 75-year-old Montreal-based foundation funds a variety of endeavours that range from environmental stewardship to skills training for new immigrants, with a focus on bringing together private, public and community groups to find solutions to social challenges.

"I think what we have to be concerned about is the fear that people have to speak up or take a position on an issue of public importance," said Huddart.

One group that has been singled out for receiving American grants is Tides Canada, which runs both a grant-making foundation and a charity that backs environmental and social-justice projects.

Tides Canada reported $7.8 million in foreign income in 2010, according to its CRA tax return.