Honourable senators, I rise to speak to the Standing Senate Committee on Fisheries and Oceans’ report titled Sealing the Future: A Call to Action.

Let me congratulate my colleagues — in particular, the chair, Senator Manning — for this report in supporting the seal hunt in Canada. This is an important report as it examines Canada’s seal populations and their impact on fisheries, ecosystems, seal harvests and the seal products industry. The study also highlights the cultural and economic significance of sealing for remote, coastal and Indigenous communities. It has many good recommendations that the government should carefully review and follow.

Colleagues, over the summer, I heard from the charitable sector about one set of recommendations, and I believe it is prudent that I put their concerns on the record. As you know, I have close ties with the sector and have championed them and their causes in the chamber.

Let me say at the outset, though, that it is not my intention to delay the adoption of the report or to propose any changes. However, I think we all know that committee study recommendations sometimes get actioned by government or by a legislator in either house. It is my hope that, should that happen, my comments on behalf of the sector can be considered, especially since the sector was not invited to appear as a witness.

While the report contains important recommendations and findings, recommendation 4 gives rise to concerns. Recommendation 4 calls on the Government of Canada to urgently review and amend the Income Tax Act and any other related acts to revoke the tax-exempt status of registered charities and non-profit organizations that allegedly produce or promote misinformation or disinformation about the seal harvest or the seal products industry. In addition, it requires charities and non‑profits to disclose the identity of donors whose contributions exceed $5,000.

The main objective of this recommendation, as stated in the report, is to counter what is described as misinformation and disinformation disseminated by certain animal welfare organizations about the Canadian sealing industry. According to the report, these organizations have misrepresented the scope, regulation and practices of sealing, which has harmed Indigenous communities that have engaged in humane and environmentally conscious sealing for generations. The report frames the recommendation as a necessary step toward truth and reconciliation.

While I understand the concerns about misinformation, I believe that this recommendation raises unintended consequences. Recommending amendments to the Income Tax Act to penalize charities and not-for-profits for alleged misinformation would set a dangerous precedent. As one of Canada’s top charities lawyer, Terrance Carter, wrote:

This would open the door to permitting revocation of charitable status (for registered charities) and tax-exempt status (for non-profit organizations) to become a politicized tool that could be used against those charities and non-profit organizations that were alleged to be carrying out programs or activities contrary to the policies of the government in power at any given time.

Today, it’s sealing, but tomorrow it could be health policy or any number of issues which organizations may hold views that challenge the government of the day.

We have already witnessed the consequences of politicizing charitable status. Between 2012 and 2015, the Harper government launched extensive audits targeting environmental charities, causing fear and uncertainty within the charitable sector. It was a way of using tax policy to silence dissenting voices.

If the government were to act on recommendation 4, the implication is clear: Any organization advocating a viewpoint at odds with the government’s policy could be at risk of losing its tax-exempt status. This could chill free expression and stifle healthy policy debate, which is the cornerstone of a democratic society.

As the Muttart Foundation noted in response to a similar situation in Alberta where a public inquiry was launched into foreign funding of anti-oil activism:

Opinions — pro or con — are not misleading or false; they are opinions . . . . Disagreeing with government or with those involved in the energy industry is not evidence of wrongdoing; it is simply what happens in a free and democratic society.

The same principle applies here.

Also according to witness testimony at committee, the problem may not be with Canadian organizations. In response to Senator Colin Deacon’s question about this, former Senator Hervieux-Payette said:

I don’t have any recollection that it was a big group of Canadian organizations. We mostly know the American one. . . .

So colleagues, we should be careful about making sweeping changes that affect all the work for a very few.

Further, the Canada Revenue Agency, or CRA — I should stress this point — already has all the tools to determine whether the registered charity is meeting the public benefit test. Susan Manwaring of Miller Thomson — again another top legal mind on charities in this country — says:

The law currently requires a registered charity to operate without promoting misinformation and disinformation. If such activity is taking place CRA has the tools to audit and penalize or revoke the offending organizations charitable status.

The second part of the recommendation is equally concerning to the charitable sector. Requiring charities and non-profits to disclose the names of donors exceeding $5,000 threatens the right of individuals — us included — to give anonymously. Many donors wish to remain anonymous for personal, cultural or other reasons. Forcing public disclosure could deter philanthropy, particularly in areas where supporting certain causes might expose individuals to risk or criticism.

Susan Manwaring said this recommendation could breach privacy laws and make it more difficult for charities to raise funds for the good work they do. The Canada Revenue Agency, or CRA, already has all the information about all the donors that it needs to audit and track inappropriate activity.

Colleagues, while I appreciate the intent behind this report to protect Indigenous practices and uphold truth, the mechanisms proposed in Recommendation 4 have severe unintended consequences that could go far beyond the reach of the sealing industry. We must not allow the legitimate desire to counter misinformation to lead us down a path where charitable status is used as a tool to control speech or to silence. I hardly need to remind you that the charitable and not-for-profit sector plays a vital role in civil society, and we must safeguard its independence.

Let us work to address the concerns raised in the report without measures that could undermine the principles of free speech, charitable giving and democratic debate.

I wish to close again with the intent of my speech: It is not to hold up the report, or to amend it or delay it. It is, rather, to ensure that the concerns of the charitable sector are put on the record. Thank you.

Thank you, Senator Omidvar, for your words today and for discussing the issue with me prior to taking it here on the floor. I, too, am supportive of the charitable and not-for-profit sector throughout the country, especially in my own province of Newfoundland and Labrador, where I support many of them. They are doing great work and continue to do so.

Recommendation 4 came from discussions that we had at committee and with people in the industry who are concerned about the fact that there may be some charitable organizations in our country that use the money to spread disinformation about an industry that’s vitally important to Newfoundland and Labrador, as well as to parts of Atlantic Canada, Quebec and throughout the country.

The recommendation is not asking for draconian measures to be made overnight. To be sure that everybody is aware:

Recommendation 4 (Modifications to the Income Tax Act)

The committee recommends that the Government of Canada urgently review and amend the Income Tax Act and all other related acts, as needed, to ensure that registered Canadian charities and non-profit organizations that produce or promote misinformation and/or disinformation about the seal harvest or seal products industry have their tax-exempt status revoked.

Senator Omidvar, is there an issue with a review being conducted as much as there’s an issue with knocking on the door of some charitable organizations in the country that may be using their access to charitable status to spread disinformation?

Thank you again, Senator Manning, for your work on this report. My response to you would be that the implications of a review could well open the door — I will just say this: I wasn’t planning to take any questions on the report because, really, I was reading out the concerns of the sector. I wish you had called members of the charitable sector to committee to discuss the issue before coming to what I see as a fairly far-reaching recommendation.

I certainly understand where you’re coming from. I guess the question that has been asked to me since this became an issue over the past week or so is the following: If a charitable organization has nothing to hide, why would they be concerned about the fact of a review?

Senator Manning, the CRA already has the tools to determine whether a charity is meeting the very high bar of the public benefit. Any charity at any time can be audited to determine whether charitable dollars are being used to promote the public benefit.

By the way, even though the CRA has issues, it does a pretty thorough job, an exhaustive job. I can tell you about charities that have been audited and have to stop doing all their work because they are being audited. The CRA often — in fact, in most cases — does not go to revocation; it goes to an administrative review. So the charity receives a letter that says, “We have found X, Y, Z — not great things — and we will give you so much time to correct them.”

Again, if the charitable sector had been called as a witness, they would have told you that the route already exists, and there is a big leap between conducting an audit and revoking charitable status.

Honourable senators, I hadn’t intended to speak today. I wasn’t prepared to speak, but I too don’t want to be the cause of holding up the passage of this report. A lot of good, hard work and careful consideration went into it.

I associate my remarks and concerns with Senator Omidvar’s presentation today, and I thank her for that. I also thank the committee for their work.

Let me just say the following: Having lived through the days of aggressive, politically contextual audits of many charities in this country, the CRA has a history of approaching these reviews in a way that shows an incredible lack of understanding of the complexity, the drive, the volunteerism and the impact on community that they are disrupting by the approach that they take.

Senator Omidvar is absolutely correct in that the tools exist within the current rules for the kinds of legitimate concerns that have been raised by the members of the committee in response to witnesses who came before them. That can be looked at and reviewed.

Just briefly, I want to talk about the issue of foreign dollars being funnelled into a Canadian charity for a political purpose or a political end and political goal that is not in keeping with the purposes of that charity. I also want to talk about the fact that there are already laws and rules that prohibit the flow of such money, unless there is a structure that is set up to enable it under the law.

For example, post-9/11, there was a great desire from Canadians to make donations that would be sent to New York and to the aid of the people there doing the tremendous reparation work of heart, soul and spirit, which needed to be done. At the time, as the president and CEO of United Way Toronto, we, under the rules — as was asked by many of our donors, by the way, and it was corporate donors included — established a cross-border agreement with a multi-charitable sector group that was established and recognized legally in New York in particular, but also in the United States. Our counterpart United Way played a large role in that.

We became responsible for stewarding those dollars. We had a cross-border agreement that was recognized by the CRA and had a rigidity to it, and appropriately so. The counterpart organization in the United States needed to respond and live up to that. We became the stewards of those dollars. That’s what charities do a lot. They steward the dollars of Canadians who wish to make a difference through the work of the charitable sector.

Like Senator Omidvar, over the course of the summer, I received calls and concerns from people whom we both know and have worked with for many years in the charitable sector. There was a sense of a chill. There was, as Senator Omidvar pointed out, a true sorrow and a simmering anger that nobody reached out to or asked them. I suspect it didn’t occur to the committee to do that in the deliberations. Reaching out is the sort of thing that a committee could do as master of its own business planning. That didn’t occur. It’s concerning that a report with the breadth of the recommendations subbed in section 4 might be taken as a signal to the Canada Revenue Agency, or CRA, in terms of a change of behaviour.

We have seen such behaviour before, which is problematic, and we have seen a huge effort that both Senator Omidvar and I took part in. A sectoral table was established for the charitable sector with the federal government, working with representatives of the CRA and many other departments of the federal government to enhance the relationship. In fact, having been appointed by the Harper government, I had the opportunity to chair a commission — a blue-ribbon panel, as it was referred to — to look into the issue of the rules around grants and contributions and where federal dollars go. One large part of that review involved the charitable sector. There is a very strong relationship between the federal government and the charitable sector. The work done through the sectoral round table produced many good recommendations, many of which have been acted upon.

The concern articulated by the sector and which Senator Omidvar referred to with respect to the privacy of donors is a very large issue. There are donors whom we have seen, all know and love to celebrate. You see their names on the wings of museums and hospitals or through the work we did in establishing community hubs in underserviced neighbourhoods with high rates of poverty in Toronto. There are donors who are proud to have their names associated with those initiatives. In fact, in the community hub strategy, they were million-dollar donors for each of the hubs that we worked with. These are significant resources.

There were also donors in many phases of their lives who don’t wish to receive recognition. They are doing something and want their private business or family foundation business to stand for itself in their own eyes through the impact that they see they have, as reported back from the charities involved. There is a potential chill from that recommendation alone for certain donors — and they tend to be large-dollar donors, if we’re talking about anonymous donations. There is no reason, nor should there be, for their donations to be disclosed to Canada writ large. That’s not what the charitable sector is about.

I echo the concerns of the sector and the fine words of Senator Omidvar. While I don’t want to hold up the report, I’ve talked to colleagues who agree that this is an incredibly important economic sector that has been misunderstood and could easily be undermined by the kinds of concerns that the committee raised in their report. I appreciate why they went down that road. Again, the committee, as masters of their own business planning, would have every right to initiate a follow-up study to look into the concerns that have been raised.

In speaking with Senator Manning, I appreciate that he outlined for me that these recommendations will be there. The CRA and/or the government may or may not pick them up. If they did, there would probably be consultations, and that would be another opportunity for the charitable sector to weigh in. If there were changes — not regulatory changes, though, though that is how it could be done — to the governing legislation for the CRA with respect to the charitable sector, there would be an opportunity for input and it would come back before this chamber.

I don’t think that’s enough. I would respectfully ask for the committee to launch a second, more focused part of the study on this to hear from the charitable sector directly. Perhaps, giving wise thought to what they hear, they may amend or clarify the intent and the mechanisms by which their concerns can be addressed, those that exist and any others that may later be required.

My humble request to the committee is to give consideration to that thought and invite the charitable sector in to have a dialogue so that the concerns — which I believe are very valid and have seen first-hand in my previous role cause harm to the sector and the good work that it’s trying to do — may be heard and addressed by the committee. Thank you very much.

Yes, I do. I thank Senator Lankin for her words here today and for discussing her concerns with me beforehand with respect to the recommendation. I have no problem discussing with my committee the concerns that you have raised and some avenues to address them.

Our concern as a committee from day one was the fact that the sealing industry has been pilloried with misinformation and disinformation. It’s an uphill battle. I had the opportunity to travel to Brussels, and trying to sell the industry to a world where lies and deception take over is very difficult. We’re trying to do our part to not only protect the industry as it exists now but enhance it.

You spoke about foreign money being funnelled through some Canadian charities. If there are charities in our country that have foreign money being funnelled into them and are spreading disinformation about the sealing industry, wouldn’t that be a concern and something that we should least find a way to get out to the public and to correct?

Absolutely, Senator Manning. I understand the work that went into that committee’s report and the importance of the issue that you’ve raised. It is a very particular and specific context within Canada and other parts of the world with respect to the sealing industry.

Yes, you’re right. My answer would be that ways in which people can raise this with the CRA already exist, as do ways in which the CRA can investigate this and take action with specific charities, which may or may not lead to revocation of their charitable licences to receive charitable donations and dispense them in this country.

Please know that I raise this not with respect to sealing, because I understand the concerns. In fact, if I may briefly tell you, many years ago in my trade union days, at a convention of the National Union of Public and General Employees, one of the leaders and delegates of the Newfoundland Association of Public Employees, or NAPE — whom you know well along with some of the people involved — stood up and offered a tremendous defence of the sealing industry. There was a well-intended but not well-understood resolution in support of calling for a ban on sealing coming forward on the floor of the convention. This delegate — and I wish that I could speak with the charm of the regional dialect of Newfoundland while telling you this story because it would be so much funnier to hear — said to the rest of us that he understood where our concerns came from. For example, they feel very strongly about the fact that the rest of us in Canada have no compunction about picking up a live lobster, dropping it into a pot of boiling water and hearing the screams emitted, which, of course, we know are from the steam coming out. It was so well done and eloquent to point to the fact that when you don’t have a lot of information to weigh in on a subject and make strong pronouncements because it seems to be the politically correct thing to do at the time, it risks danger like the huge impact we have seen on the sealing industry.

I am with you. I am supportive of what the committee has done, but what you heard is only applicable to a small part of the charitable sector. You didn’t hear about the far-reaching potential consequences of the recommendation that you put forward. That recommendation is well suited to the context of the report and already has all of the tools and mechanisms within the federal government and the CRA, in particular, to address those concerns.

I would once again urge you to take the time to hear from the sector and see whether or not there is a refinement of your recommendation that continues to meet the concerns you have and that brings to the table the actual understanding of the rules, mechanisms, laws and the enforcement. I believe you will see that it does exist, how it works, how it has worked in the past and that it seeks to ensure that, on the record, in the recommendations to government, there is a clear understanding that it’s not the intent of the committee or of this august body to see unleashed on the charitable sector what could be an unpredictable and very unfortunate result should these recommendations be taken and applied widely.