Publicly funded eco-politics

Last week brought another reason for the chattering class to celebrate. The federal Liberal government removed a gag order on all those pristine charitable organizations that had their freedom of expression suppressed by the previous, controlling Conservative government. The reign of fear and repression is over. Charities are free at last.

But free to do what? Well, activists will be free to pursue their political objectives, while avoiding taxes and attracting donations subsidized by the taxpayer. And here I was worried something inappropriate was going on!

Charities benefit from preferential tax treatment, which constitutes an indirect government subsidy. Their income is exempt from taxation and donations are deductible from personal income tax. Consequently, they are subject to regulatory oversight by the Canada Revenue Agency. The Income Tax Act entrenched a rule that charities can engage in limited political activities, provided substantially all their activities are charitable, which CRA interprets to mean more than 90 per cent. They can of course do all the politicking they want, but that means losing their charitable status.

That makes sense. After all, most donors probably think a charity’s money should go to its charitable mission. If you told donors that up to 10 per cent of their donations can be spent on political activism, quite a few would be surprised and some would be perturbed. But if all of a charity’s resources can now be devoted to political advocacy, without jeopardizing its charitable status, donors would likely be baffled. They would believe they were misled and wonder whether any of their money was actually helping the cause they support.

Notwithstanding public Diane Lebouthillier, Minister of National Revenue, told the CRA to suspend 12 ongoing audits of charities that had engaged in political activity, Joe Oliver writes. sentiment and historical precedent, a report just prepared by a government-appointed panel recommended a change to allow charities “to fully engage, without limitation, in non-partisan public policy dialogue and development.” That would include the ability to “advocate to keep or change law or policy, either in Canada (any level of government) or outside of Canada.” Interestingly, the panel does not like the words “political activities,” Granted, some charities attract donors who support such political activism. The question is whether those donations should enjoy a tax break. A non-profit organization may be granted an exemption from income tax, but it cannot issue taxdeductible receipts for donations. I will leave it to the tax lawyers to determine when a charity becomes a non-profit, but as a matter of public policy, the answer need not be that complicated. If an amounts are strictly limited. A political organization posing as a charity is a pretence and misrepresentation of its goals and functions. It also a flagrant refutation of hundreds of years of custom and common law that define what charities are.

The Income Tax Act prohibits direct or indirect partisan activity. However, it is disingenuous to pretend that an organization is not engaged in partisan politics when its lobbying campaign is aimed at persuading people to vote strategically, promoting, say, a Liberal or NDP candidate most likely to defeat a Conservative. That is precisely what happened during the 2015 election.

You have to hand it to the Liberals. They are totally immune to embarrassment. They can present the most transparently self-serving scheme as selfless policy that serves the greater good. Their failed attempt to manipulate the way we elect our MPs by introducing a ranked-ballot system, for example, would have almost certainly guaranteed Liberal majorities for decades, all done under the guise of democratic reform.

And this charity gambit is another blatant ruse to bolster their election prospects — to financially advantage a grateful coterie of progressive lobbyists, their environmental propaganda machines well oiled with subsidized donations. They have been freed to pursue their agenda of blocking economic development, killing jobs, harming the middle class, and undermining funding we could spend on social services. I, for one, do not want to support that agenda. And if that sounds like your kind of politics, how would you feel if your tax dollars were instead subsidizing lobbying efforts to pursue resource development, propagate free enterprise and shrink the government?

By all means, let political debate flourish in our vibrant democracy, but not under the guise of “charity.”

Given these dark clouds on the fiscal horizon, and the fact that the province carries a debt burden close to 40 per cent of GDP (a historically high level), the need for fiscal restraint is clear.

So it’s worrying that instead of spending restraint, the Wynne government has opened the spending tap, with spending set to grow 4.8 per cent this year — the largest increase since 2009. This is faster than the expected rate of economic growth (4.3 per cent) and significantly faster than what’s needed to offset cost pressures from the combination of population growth and inflation (3.1 per cent).

The decisions in the last decade to increase spending faster than the provincial economy’s growth, and faster than was needed to keep up with a growing population and rising prices, contributed to Ontario’s dire fiscal problems. And when a nasty recession hit the province, the government found itself with spending levels it could not afford and big deficits quickly emerged.

Now, the government is making the same mistakes and exposing Ontarians to the same risks all over again.