Ethical Oil charity complaint sparks Alberta corporate complaint

Commentator Ezra Levant lets go a broadside at Tides Canada on his Sun News Network program. Below: Researcher Tony Clark; Jamie Ellerton, executive director of Mr. Levant’s Ethical Oil Institute; National Revenue Minister Gail Shea.

As is well known, the “Ethical Oil Institute,” the Edmonton-based organization founded by Sun News Network commentator Ezra Levant to support petroleum extraction companies in Alberta, has complained to the Canada Revenue Agency demanding the charitable status of Tides Canada “be reviewed for violating Canada’s charities law.”

Last week, Ethical Oil accused the Vancouver-based environmental and social issues charity of “‘laundering’ money from contributors to groups engaged in ‘non-charitable’ political activities,” as the complaint was summarized by the Edmonton Journal.

Ethical Oil also set up an automated online form to enable those who share Mr. Levant’s and his organization’s views to send emails to National Revenue Minister Gail Shea “to report any radical or environmental lobby group you’ve seen masquerading as a charity so that their taxpayers (sic) subsidy comes to an end!”

Now an Edmonton researcher has filed a complaint with Service Alberta Minister Manmeet Bhullar arguing that by taking this action Ethical Oil is violating its Memorandum of Association with the with the Alberta government.

“Corporate entities such as Ethical Oil are bound by the Companies Act to follow the objects set in their Memorandum of Association,” researcher Tony Clark wrote Mr. Bhullar last week. “Ethical Oil has mounted a protracted campaign against what it views as violations of the Canada Revenue Agency’s rules by certain environmentally oriented charities. I believe this campaign is against the letter, if not the spirit, of the corporation’s Memorandum of Association which regulates its external activities.”

Citing statements made by Ethical Oil on its website, before a House of Commons committee, in the mainstream media, in a 143-page letter of complaint to the CRA and on a Sun News Network television program hosted by Mr. Levant, Mr. Clark argues there is nothing in Ethical Oil’s Memorandum of Association “that allows this corporation to be a referee on charities’ activities.”

On his Sun News Network program, Mr. Levant – who is president, treasurer and a director of Ethical Oil and holds 50 per cent of the corporate entity’s shares – interviewed Ethical Oil Executive Director Jamie Ellerton about the campaign against Tides Canada’s charitable status. On this episode of The Source with Ezra Levant, Mr. Levant set aside his trademark aggressive interview style and was positively warm.

Regardless, Mr. Clark’s complaint goes on, “The objects of the corporation include, among other things, ‘issues and considerations of environmental responsibility, peace, treatment of workers, democratic rights, and human rights.’ There is no mention whatsoever in Ethical Oil’s foundational documents of this corporation being used as an overseer of the Canada Revenue Agency’s rules on charities.

“I do note, however, that Ethic Oil’s Memorandum of Association, article 5, specifically states (emphasis added), ‘[t]he income and property of the Company, however derived and received, shall be applied solely towards the promotion of the objects of the Company…’,” Mr. Clark writes.

“The key word in the sentence above, Hon. Minister, is ‘solely.’ Given the scale and scope of Ethical Oil’s campaign against a few environmentalist charities, I think it is undeniable that Ethical Oil is using its resources in contravention of its objects as set out in its Memorandum of Association,” he argues.

“I urge you to use your powers as the minister responsible for the Companies Act to investigate Ethical Oil’s activities and penalize the corporation to the fullest extent of the law if you find it has violated the Act,” Mr. Clark concludes.

Meanwhile, it is hard to predict the outcome of Ethical Oil’s complaints against Tides Canada and other environmental charities.

On one hand, Prime Minister Stephen Harper would clearly like to suppress the activities of charitable organizations that do not march in lockstep with his Conservative Party’s environmental policies. On the other, many other charitable organizations with which Mr. Harper is both broadly in agreement and whose work he values are clearly in violation of the CRA’s regulations about political activities.

So on the theory the rule of law still prevails in Canada, it is hard to see how what is good for the charitable goose mustn’t also be good for the charitable gander, an outcome with which the prime minister may be uncomfortable.

One of the most glaring examples, as is well known, is the Vancouver-based market-fundamentalist propaganda organization known as the Fraser Institute, which continues to be permitted to operate as a charity despite blatantly and consistently ignoring the CRA’s limits on political activities.

In January 2012, Mr. Clark wrote Ms. Shea arguing that the Fraser Institute engages in excessive political activities and requesting that the CRA investigate its activities and revoke its charitable status.

Ms. Shea responded with a letter that ran to two pages, but contained remarkably little information. She did note that “the confidentiality provisions of the Income Tax Act prevent me from discussing the tax affairs of any particular organization without written consent from an authorized representative of that organization.”

Ms. Shea did observe in her letter to Mr. Clark that “a charity’s political activities must be reported on its annual form T3010-1, Registered Charity Information Return.”

As Mr. Clark noted in an Alberta Federation of Labour submission to the House of Commons Standing Committee on Finance and Tax Incentives for Charitable Organizations on Jan. 17, 2012, each year between 2000 and 2010 the Fraser Institute responded “no” to the CRA’s question “Did the charity carry on any political activities during the fiscal period?”

As the AFL submission observed: “Any rookie observer of Canadian politics knows this is nonsense: the Fraser Institute is actively involved in the Canadian political landscape. Any reporting or suggestion otherwise is a sham.”

Ms. Shea also told Mr. Clark that “a charity whose object includes the advancement of education must take care not to disregard the boundary between education and propaganda. To be considered charitable, an educational activity must be reasonably objective and based on a well-reasoned position, that is, a position based on factual information analyzed methodically, objectively, fully, and fairly. In addition, a well-reasoned position should present serious arguments and relevant facts to the contrary.”

The flawed approach to “research” taken by the Fraser Institute is well known and aptly deconstructed by Saskatoon health policy consultant Stephen Lewis, who wrote in 2011 that the organization’s research in his field was “fatally flawed,” based on a methodology that is “essentially absurd,” uses respondents’ hunches and opinions rather than real data, relies on unrepresentative samples of self-interested respondents and produces only “sortafacts” that support its market-fundamentalist ideological position.

Or, as Nova Scotia Finance Minister Graham Steele put it more bluntly: “The Fraser Institute produces junk. It is not a serious institution. It is a political organization.”

Since Canada remains a country of laws, surely we can assume that Mr. Levant’s Ethical Oil Institute will receive a similar response from Ms. Shea.

This post also appears on Rabble.ca.

10 Comments on "Ethical Oil charity complaint sparks Alberta corporate complaint"

  1. Sam Gunsch says:

    links everywhere re:

    Charitable Fraser work re: Politics and government brought to high school and post-secondary students courtesy of Fraser, D. Smith, D. Frum, d Ez money Levant, and d big money Koch Brothers.

    re: ” … the Fraser Institute, which continues to be permitted to operate as a charity despite blatantly and consistently ignoring the CRA’s limits on political activities.” Climenhaga.
    and

    re U.S. Republican Koch oil billionaires help fund the Fraser Institute. Why the Fraser Institute?
    Desmogblog (http://s.tt/1ajfa)”

    re Fraser’s free seminars for recruiting high school and post-secondary students:

    excerpt: “…listen to high-profile guest speakers including Ezra Levant, journalist (and former George W. Bush economic speechwriter) David Frum, and Danielle Smith.

    excerpt: “Last year, the Fraser Institute gave first prize to a video entitled “Government During Crisis: Help or Hindrance?” which claimed that government got in the way during crisis situations, and that the “most effective relief came from faith-based organizations” as well as local businesses. In the previous year, the top honours went to a video called “Canadian Health Care: a monopoly on lives” that harshly criticized public health care, while the second prize that year was based on the theme, “The nanny state: is government regulation threatening your personal freedom?”, which argued that well-meaning legislation such as the anti-cyber bullying laws disrupted personal freedom.”

    Paging CRA.

  2. I am interested in this from an accountability perspective as an Accounting Student, and I just have to say that this seems more like an attempt to discredit/defame the whistle blower rather than a bona fide complaint. During a fraud investigation absolutely nothing presented here would have any merits except as commentary.The Income Tax Act is quite clear on this point if Tides Canada was engaged in political activities while collecting charity donations while issuing tax receipts they have committed a serious mistake and in all fairness should be punished. You may not like Ethical Oil or the Conservative Government but if the facts have been presented the CRA has an obligation to act on them if they don’t they might as well toss out the entire book along with their credibility.

  3. Sam Gunsch says:

    @Oliver

    political attacks, full of extreme hypocrisy, double standards

    re Ezra/Fraser Institute/right-wing networks of conservative/neo-con politicians/think tanks in Canada

    re Climenhaga/DD excerpt: “So on the theory the rule of law still prevails in Canada, it is hard to see how what is good for the charitable goose mustn’t also be good for the charitable gander, an outcome with which the prime minister may be uncomfortable.”

    @Oliver
    … that the right leaning networks/Ezra’s of Canada are actually concerned with ethics/standards/complying with the CRA charity guidelines re no political activities is the biggest joke, the most ludicrous joke in Canadian politics.

    Stephen Colbert’s persona and mode of explaining right-wing politics is the best illustration of this that I can think of in regard to the right’s lack of credibility on these sorts of issues…if you watch a few episodes I expect you’ll get the point way more clearly than any explanation that can be typed up.

    • Lol I should apologize this article came up in my Google Alert for ‘tax law’ and happened to be written here in Alberta. I can see that this is not the place to have any sort of balanced discussion regarding the facts of the law or accountability. The title of this post more than anything encouraged me to write in. If you attack someone apparently punitively for pointing out that you or one of your friends have broken the law you can’t expected to have much support can you?

      Further to your post I am not really understanding what your argument means, this is way outside of my area of interest/knowledge. I suggest you research internal controls. Obviously Tides Canada did not commit financial fraud but if I understand the allegations they have allegedly committed tax fraud which is another interesting area of research.

      http://en.wikipedia.org/wiki/Fraud_deterrence
      http://en.wikipedia.org/wiki/Tax_fraud

      And so to conclude you are apparently countering well presented evidence of the above with a flimsy corporate complaint based more on legalese and partisanship than a real public service action? Sour grapes!!

  4. Sam Gunsch says:

    @Oliver

    Could you share your expertise on tax fraud re the Fraser Institute practices?

    In your opinion, is Climenhaga writing about a non-issue at Fraser Institute when he writes this?

    “One of the most glaring examples, as is well known, is the Vancouver-based market-fundamentalist propaganda organization known as the Fraser Institute, which continues to be permitted to operate as a charity despite blatantly and consistently ignoring the CRA’s limits on political activities.”

    I have no idea about the specific details at Tides re tax fraud that you have evaluated for us. Nor do I have specifics about inside operations of Fraser. But as I read them, the vast majority of Fraser’s activities and publications are political. Any claim of public interest is window dressing.

    so re complying with CRA’s rules about political activities for charities…

    Seems to me a lot of Climenhaga’s post was about how Harper, Fraser, E z Levant might want to take a moment and mull that by their actions targeting Tides and ENGO’s they are levelling allegations that many think are exactly relevant to Harper’s friends and their operations regarding CRA standards they allege are being violated and/or the Companies Act.

    so again… I’m wondering if you could share some of your analytical expertise re Fraser institute practices and CRA rules? or Ethical O / E z Levant and the Companies Act?

  5. Sam Gunsch says:

    @ Oliver

    Climhenhaga’s post contained content directly about the hypocrisy of Harper, Levant re targeting charitable activities when their Fraser Institute friends seem to have been blatantly flouting CRA political activities guidelines. I chose to comment on that.

    I chose to draw attention to other blogs that document Fraser Institute’s activities that seem to some of us to be especially blatant in violating CRA rules, and I took pleasure in sharing Fraser’s partnerships with regard to foreign funding from the Koch Brothers who spend a humungous amounts of of money on explicitly political agenda’s.

    Then when I read comments of the nature you happened to make here, weighing in with what sounds like a great deal of assurance in your assessment about Tides for example in regard to your judgement of them clearly being in violation of the CRA rules, I’m then motivated to ask you to explain why you don’t apply you’re acuity in the same way to Fraser operations for the benefit of all. Again, I obviously believe I am continuing on my comment line about hypocrisy of the right/conservative networks.

    To me, Fraser Institute is openly advocating an agenda to exclude elected government from democratic oversight of the economy specifically, from environmental issues, and issues of public interest in general. That seems quite political to me. But would you care to comment if you think so?

    I don’t need to do research to make that evaluation because I’ve managed to read regularly about Fraser and their materials. Have you?

    In asking your opinion about CRA re Fraser, it had seemed to me that given your clarity in rendering an opinion on Tides that it might be possible you could help out with a Fraser assessment.

    Further, Oliver, I’d be curious if you think that Ministers of the government of Canada could in fact issue communications, maybe a letter even, that give Fraser a clean bill of health re complying with CRA rules as kind of the book-end to their communications and directives they have openly distributed and directed government officials to act on, where they are implying the opposite of ENGO’s?

    and perhaps if you don’t want to be considered an expert, perhaps a little less certitude in your critical tone as you make your own claims might not generate the impression that you consider yourself an expert.

  6. Oliver Dechant says:

    If I remember correctly it matters where the money actually flows. This way a charitable organization can engage in non-charitable activities so long as the sources of revenue of the accounts are not mixed i.e. If money goes into an account from charitable donations that money cannot be used for a restricted purpose. This is interesting because it appears that TIDES Canada has muddied the waters of their activities and tax refund issuing, I would be interested to see the document submitted by Ethical Oil if you have a copy as this would be a great example of a fraud investigation. Honestly I have no idea where the government is taking this one politically, it seems to me more like a matter of the facts and law. Have you tried emailing the PM or the Minister of National Revenue? If you wait about a month I can guarantee you you will get a succinct reply as both have replied to personal inquiries of mine on a couple minor matters of state. It would be interesting if you could post those replies to add some context and counterpoint to your opinions.

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