"We are fully compliant with the Income Tax Act, all CRA guidelines regarding both domestic and international funding." - Ross McMillan, Tides Canada CEO (at 15:15)
After taking office in the fall of 2015, one of the early moves of Prime Minister Justin Trudeau was to have the Canada Revenue Agency discontinue a controversial program of audits of the political activity of registered charities. Those audits had been initiated by the Conservative government under the leadership of Stephen Harper.
Environmental groups characterized these audits as a "witch hunt" and the whole thing was guffawed by much of the media. However, as I explained in The Financial Post (September, 2015), the audits were warranted because of unreported foreign funding and under-reported political activity. Indeed, two environment charities (Sierra Club of B.C. and Skeena Wild) admitted that their foreign funding was incorrectly reported in their tax returns.
In two cases, the individuals involved with the environmental charities in question are now holding senior positions in the Trudeau government. Marlo Raynolds, who was executive director/senior advisor to the Pembina Institute for many years, is now the chief of staff in the Ministry for the Environment and Climate Change, serving the Honourable Catherine McKenna. Gerald Butts, formerly the President & CEO of World Wildlife Fund Canada, is now the Principal Secretary to Prime Minister Justin Trudeau.
The Pembina Foundation, which funds the Pembina Institute, was reportedly among the charities that were audited by the CRA, according to the CBC. Whether or not WWF Canada was also under audit or was slated for audit but then spared when the government cancelled the remaining audits, is not known to me.
In his mandate letter to National Revenue Minister, Diane Lebouthillier, Prime Minister Justin Trudeau continued the characterization of the CRA's audits as "political harassment," and instructed Minister Lebouthillier to allow charities to work without it. In January, the new minister announced that the audits would end.
Back in 2012 when the audits were first announced by the previous government, it was Tides Canada that was most in the hot seat. Tides Canada has repeatedly denied any wrongdoing.
In an interview on Power and Politics, Ross McMillan, Tides Canada’s CEO told Evan Solomon:
“I can’t believe for a moment that the government and the ministers are referencing Tides Canada specifically when they assert allegations relating to money laundering. We are fully compliant with the Income Tax Act, all CRA guidelines regarding both domestic and international funding."
In Canadian tax returns, every year since 2010, Tides Canada Foundation has reported that it does NOT fund any organizations outside of Canada, with the exception of eligible organizations (called "qualified donees). See line C4 at the links below:
Mr. McMillan also said, "With regards to groups that we support, that also perplexes me in that we can only grant to registered Canadian charities.... Certainly, I’ve seen no evidence whatsoever of any untoward activity relating to foreign funding or political activity in the charitable sector.”
Contradicting Mr. McMillan's claim and what is reported in the Canadian tax returns filed by Tides Canada Foundation, a large series of covering letters on payments shows that via the Tides Foundation, and The Tides Canada Foundation Exchange Fund, dozens of payments have been made to recipients outside of Canada that are not eligible for funding from registered Canadian charities such as Tides Canada Foundation.
For 25 examples of payments made to ineligible organizations outside Canada, payments made by the Tides Foundation in San Francisco on the recommendation of the Tides Canada Foundation Exchange Fund, click here.
Tides "International Donation Matching System:" CLOSED
On December 26, 2016, an unusual day for making an announcement, Mark Blumberg, a Canadian lawyer with clients in the charitable sector, reported that Tides Canada Foundation had closed its “international donation matching system.” The question is, why?
On the basis of the information presented in the following post, it is clear to me that via the Tides Canada Foundation Exchange Fund, Tides Canada Foundation was enabling another charity, Collette Foundation Canada, to issue tax receipts for millions of dollars worth of charitable activity that never happened. In doing so, donors to Collette Foundation Canada appear to have received receipts for millions of dollars worth of tax deductions for charitable activity in Canada that they didn't actually do. Tides Canada Foundation appears to me to have facilitated this scam by acting as a conduit of funds to ineligible organizations. That's a violation of the Income Tax Act that is grounds for revocation of charitable status.
All this raises a number of questions:
1) Why did Ross McMillan say that Tides Canada Foundation only funds qualified donees in Canada, when clearly, that is not the whole story.
2) Why did Tides Canada close its lucrative "international donation matching system?"
Was Tides Canada forced to close this operation because it was in violation of the Income Tax Act? If so, what happened to all the money that Tides Canada made over the years via this scheme? What happened to the charities, such as Collette Foundation Canada, that issued tax receipts for millions of dollars worth of charitable activity in Canada that never happened?
3) Will Tides Canada make public the results of its audit by the Canada Revenue Agency?