Annual financial reports filed by Canadian charities with the Canada Revenue Agency (CRA), are rudimentary and largely unchecked by tax department officials. This suggests rather little oversight is exercised despite the billions of dollars involved in the sector.
I tried to raise this matter with Hoang Mai, the Official Opposition critic for the Ministry of National Revenue. I sent an email to the critic Nov. 2, with a copy to BC MP Kennedy Stewart. After no response or acknowledgement from either, I sent a follow-up on Nov.23. Still no response.
This was my inquiry,
I have been examining financial statements published on the CRA-Charities website, with particular interest in politically oriented charities, including but not limited to The Fraser Institute, Donner Canadian Foundation, Ernest C. Manning Awards Foundation.
I notice year to year anomalies that suggest CRA may be doing limited or no examination of annual returns (T3010). Additionally, I have reason to suspect that non-cash donations are routinely overvalued, leading to losses on disposal that are common. Charities may accept in-kind donations for which they issue receipts higher than true fair market value and this is encouraged if they expect CRA’s audit enforcement to be lax.
Could you please pose inquiries to CRA asking specifically what typical level of review they give each T3010 return and if they routinely compare financial information from year to year, looking for obvious anomalies. Also, the CRA should be asked if they pay attention to political activities conducted by organizations such as the Fraser Institute and Donner Canadian Foundation and if they have written guidelines for enforcement officials.
Fair questions, I think.
A separate but related inquiry reinforced my belief that inadequate oversight is exercised over charities. After, I looked at CKNW Orphans’ Fund financial reports, a reader asked if I would do the same for another Corus charity: Edmonton’s CHED SANTAS ANONYMOUS INCORPORATED.
Again, the financial information is basic. It is also sloppy, containing obvious errors. For example, the 2006 balance sheet shows a $400,000 asset noted as “Inventories.” The asset disappears on the 2007 report with no offsetting expense report.
I don’t know how the charity performs its good works but I would certainly examine it more carefully before donating. For example, in 2011, it reports total expenditures on charitable programs of $338,190 which is less than half the year’s total revenue. Occupancy costs, which were zero in 2006 were $93,690 in fiscal 2011.
Again, Corus Entertainment seems to be gaining goodwill for a children’s charity yet we are left to wonder what the company contributes.
It's very disturbing that even the NDP opposition won't respond to your – yes, very reasonable – questions.
Not only reasonable questions, but important. Even disturbing.
Especially given the increasing incidents of wrong-doing by staff at the Canada Revenue Agency (e.g. an investigation is now underway with respect to corruption by CRA staff across the country).
A couple years ago there was a celebrated court victory by one Victoria-area couple whose home was invaded improperly and without cause by staff of the Victoria Canada Revenue Agency office. Substantial damages were awarded to the couple, I believe several million dollars.
“Naturally”, the CRA is appealing their conviction since it costs them nothing. We taxpayers pay for the CRA's lawyers. How ironic. That couple probably doesn't stand a chance, since they have to pay for their own lawyers themselves, and weren't wealthy people.
And now you tell me that no federal party is interested in the Canada Revenue Agency's conduct.
Is there no one in authority in Canada that we can trust anymore???
Thank you for continuing to hold up to the light the increasingly corrupt governance of our country — at all levels. Let's pray that the general public wakes up soon.
Mr. Farrell, thank you for your message and e-mails, and for raising this issue. I apologize for not responding earlier. We are looking into this.