Environmental organizations that oppose tar sands expansion have become the subject of rigorous audits that could force some to shut their doors
by Katherine Bagley, InsideClimate News, February 13, 2014
In both the United States and Canada, activism against tar sands, pipelines and climate change has soared in recent years.
Since Prime Minister Stephen Harper took office in 2006, his conservative administration has cut funding for climate science research, shuttered environmental research labs, cancelled reviews of oil sands projects and gutted environmental protection laws.
But while President Obama has encouraged citizens to "stand up and speak up" to demand change on energy, Canadian Prime Minister Stephen Harper's administration has tried to silence critics of pro-tar sands policies.
In the most recent evidence, 7 influential environmental organizations have become the subject of rigorous audits by the Canada Revenue Agency.
Activists allege that the scrutiny is an attempt by the Harper administration to subdue tar sands opponents as decision time looms for pipelines needed to bring Alberta's landlocked oil to market—the Texas-bound Keystone XL and the Northern Gateway to the Pacific Coast of British Columbia.
"Canadians are starting to understand that the government has overstepped and overreached in its attacks against environmentalists and scientists," said Tzeporah Berman, a Vancouver-based environmentalist and co-founder of the activist group ForestEthics. "We're seeing a growing grassroots movement as a result. … People are angry."
The prime minister's office directed requests for comment to the Canadian Revenue Agency (CRA). Noël Carisse, a spokesman for CRA, said that since 2012 "the CRA has conducted additional review activities focused on political activities. Audits are being conducted in addition to our regular audit activities, and will include charities from across the entire spectrum of charitable activity."
The revenue agency is auditing the environmentalists for possible abuse of their nonprofit charitable status, which exempts them from paying taxes and allows donors to claim contributions as tax deductions. Canadian law states that nonprofits can only use 10% of their resources for political advocacy work. The CRA is investigating whether the groups exceeded this limit.
For decades, Canadian nonprofits interpreted political advocacy to mean they couldn't endorse candidates or elected officials. Like in the United States for tax-exempt organizations, support for or criticism of government policy was customary.
"They are seemingly reinterpreting what they perceive as being political activity," said Tim Gray, executive director of Environmental Defence, one of the green groups being audited. "It is a shifting landscape."
If the CRA determines that the organizations passed their annual political advocacy limit, they could lose their charitable tax status, forcing them to pay taxes and potentially driving away donors. That could cause some of the groups to shutter their doors, Gray and Berman said.
In addition to Environmental Defence, other groups being investigated include the David Suzuki Foundation, Tides Canada, West Coast Environmental Law, the Pembina Foundation, Equiterre and the Ecology Action Centre, according to the CBC, which first reported the audits.
The targeted groups have been instrumental in raising public awareness about the impacts of tar sands development on the environment and climate. They stoked a grassroots movement that helped delay the Northern Gateway pipeline in Canada and, together with U.S. environmentalists, helped make the Keystone XL a climate red line for Obama.
Environmental organizations appear to be bearing the brunt of the recent investigations.
While most of the groups are still under review by the agency and are therefore staying mum, Gray said his organization received its results from the CRA.
"They told us that basically everything we do is no longer charitable," he said. The group immediately filed an appeal. If rejected, Gray said he is unsure what that will mean for his organization's future.
Across the Border
The audits are the latest in a string of attacks on environmentalists and scientists in recent years by a Harper government that has made oil sands expansion a centerpiece of its economic agenda. Since Harper took office in 2006, production of Alberta's carbon-intensive tar sands crude has doubled, and Canada has set a goal to at least double it again in the years ahead.
Simultaneously, the conservative administration has cut funding for climate science research, shuttered environmental research labs, and buried government reports highlighting the dangerous climate and environmental implications of runaway oil sands development. It has also muzzled its own scientists from speaking about the issue, cancelled thousands of environmental assessments for pipelines, oil sands mining and other development projects, and gutted 70 environmental protection laws in 2013 alone.
In 2012, the government listed environmentalists as a terrorist threat.
Amid the erosion of environmental law in Canada, across the border in the United States the Obama administration has sought to apply federal law to combating climate change. The centerpiece of this work is an historic regulation under the Clean Air Act to cut carbon pollution from the nation's coal plants.
In a speech last year at Georgetown University announcing his climate plan, Obama called on citizens to "speak up at town halls, church groups, PTA meetings. Push back on misinformation. Speak up for the facts. ... Convince those in power to reduce our carbon pollution. Push your own communities to adopt smarter practices. Invest. Divest. Remind folks there's no contradiction between a sound environment and strong economic growth. ... Make yourself heard on this issue."
Berman, of Forest Ethics, said that despite efforts in Canada to quell such protest activity, the opposite is happening.
"Canadians value democracy. We value free speech and balance and fairness," Berman said. "This government has created the perfect storm at the grassroots level. What we've seen is that First Nations leaders, union leaders, community organizers, and generally a diverse array of Canadians are all starting to engage [on climate and the oil sands]."
The Ethical Oil Link
The Canada Revenue Agency conducts audits for a number of reasons, including in response to outside complaints that an organization is violating federal laws for charities.
Environmentalists believe that is why so many of them are being singled out. Shortly after the pro-tar sands group Ethical Oil launched a public campaign in 2012 to "expose the radical foreign funded environmental groups' activities attacking Canada's ethical oil and industry," Canadian Finance Minister Jim Flaherty announced an $8 million effort to more deeply investigate nonprofits' political activity.
Since then, Ethical Oil has filed formal complaints with the CRA about Environmental Defence, the David Suzuki Foundation, and Tides Canada, saying the groups should be "stripped of their charitable status" for "engaging in partisan activity," according to Ethical Oil's website.
Ethical Oil has deep ties to both the tar sands industry and the Harper administration. In 2011, one of the group's co-founders, Alykhan Velshi, left his job as a spokesperson for Harper's government to help found Ethical Oil. A few months later, he left Ethical Oil and returned to the Harper administration to become director of planning in the prime minister's office. Today, he is the director of issues management for the prime minister.
The organization states on its website that it receives funding from companies working to develop the tar sands, though it does not say which ones.
Ethical Oil did not respond to requests for comment.
Environmental leaders told InsideClimate News the CRA's investigations are so intense that many of the groups involved have been forced to sideline their anti-tar sands efforts both for lack of time and for fear of upsetting government auditors.
"They are worried about being critical of the government because now it could mean the loss of their charitable status," Berman said. "Without that, many of them likely wouldn't be able to operate."
The audits have potential serious implications not just for environmental organizations, but for the entire Canadian nonprofit world.
"Most of the public policy work that has been done in Canada over the last 30 years has been led by charities," Gray of Environmental Defence said. "Everything from cracking down on drinking and driving to getting rid of smoking, phasing out acid rain to solving the ozone hole.
If the CRA's interpretation of political activity is changing, it is a world that is going to be unfamiliar terrain [for non-profit groups and concerned citizens]."
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