Under the Protection of Public Participation Act, I have applied for the dismissal of a claim brought against me, Vivian Krause (who writes this blog), as of May 24, 2022.
This claim was brought by Scott Cousens, a Vancouver business person.
Mr. Cousens says that he gave $23 million towards a sports centre in Burnaby, B.C., formerly Fortius Sport & Health Centre, now named Christine Sinclair Community Centre.
Mr. Cousens claimed that his donation was "the largest charitable gift in Canadian sports history" and that he spent his sons' inheritance to make this historic gift.
However, on the basis of the detailed financial analysis that I have summarized in an affidavit, it is clear to me that Mr. Cousens' claim that he made a $23 million donation is deceptive and misleading. At best, in my view, Mr. Cousens' claim is an exaggeration of his true economic contribution towards the Sports Centre because it appears that his donations were used to make a loan, not a true gift.
I am also concerned because one of Mr. Cousens' charities, Fortius Foundation, received a gift of $74.7 million from Charitable Impact Foundation, a Vancouver charity known as "CHIMP." According to information provided to me by the CRA, this is the largest gift to a non-governmental organization in the history of British Columbia.
CHIMP claims to be "the fastest-growing giving network and donor-advised fund in Canada" and says that it has received $1.1 billion in donations.
In my view, based on my detailed financial analysis, CHIMP's claim that it made a gift of $74.7 million is misleading. As I document in my affidavit, this "gift" was part of a series of circular, self-cancelling transactions. The $74.7 million was used to pay "debts" to five sister charities which then made "gifts" to CHIMP such that CHIMP got its money back in the form of notes receivable (re-payment of loans).
This case raises concerns about the charities involved, the accounting firms that audited their financial statements and the Charities Directorate of the Canada Revenue Agency which is supposed to oversee the charitable sector and enforce the law.
In my view, the charities involved are an alarming example of the maneuvers that registered charities can conduct, enabled by fancy accounting practices and the CRA’s lax enforcement. The Burnaby sports centre and the foreclosure of Quest University Canada are examples, in my opinion, of just how badly Canadian charities can operate and yet still not be shut down by CRA.
To deter wash transactions and other shenanigans, The Income Tax should be amended to require substantially more transparency with regards to tax-receipted donations and the CRA’s process for auditing charities. Furthermore, accounting firms should be more accountable for the transactions that they legitimize by providing audited financial statements. Requirements for greater transparency and accountability would significantly reduce the temptation to finagle unwarranted tax relief via registered charities.
In letters to Scott Cousens, I urged him to tell me if I have presented anything that is factually inaccurate or if I missed any important points. Instead of providing answers to my questions - which are a legitimate matter of public interest - Mr. Cousens sued me for defamation. After a year of correspondence with his legal counsel, I have asked the court to dismiss Mr. Cousens' claim against me.
The Exhibits that accompany my affidavit, a total of 644 pages, are provided below.
- Exhibit A - Globe & Mail Story October 25, 2018
- Exhibit B - Fortius Foundation Application for Registration
- Exhibit C - CHIMP Tax Return 2010
- Exhibit D - CHIMP Tax Return 2018
- Exhibit E - E-mail to Fortius January 10, 2020
- Exhibit F - City of Burnaby Announcement December 15, 2020
- Exhibit G - Fortius Sport & Health Centre, Appraised Value
- Exhibit H - Fortius: A Brief History
- Exhibit I - Gifts towards Fortius Sport & Health Centre: $106 Million
- Exhibit J - New Dimensions Foundation, Application for Registration
- Exhibit K - Imladris Foundation Application for Registration
- Exhibit L - Five Charities Where Scott Cousens Is/Was A Director
- Exhibit M - New Dimensions Foundation Financial Statements & Returns 2008, 2009
- Exhibit N - Letter from Dan Burnett, Q.C. to Greg Allen, May 12, 2021
- Exhibit O - Letter from Vivian Krause to Scott Cousens & John Bromley, January 6, 2021
- Exhibit P - Fortius Foundation Financial Statements, 2008
- Exhibit Q - New Dimensions Foundation Loan to Fortius Foundation, 2008
- Exhibit R - New Dimensions Foundation Mortgage Transfer to Imladris Foundation
- Exhibit S - Imladris Foundation Tax Return & Financial Statements, 2010
- Exhibit T - Fortius Foundation Financial Statements, 2010
- Exhibit U - Imladris Foundation Financial Statements & Tax Return 2010
- Exhibit V - Fortius Foundation Forgiveness on Loans $6,828,131
- Exhibit W - Fortius Foundation Financial Statements, 2018
- Exhibit X - Romspen Investment Corp. Mortgage Loan to Fortius Foundation
- Exhibit Y - Almoner Mortgage Loan to Fortius Foundation
- Exhibit Z - Almoner Foundation Application for Registration
- Exhibit AA - Fortius Foundation Financial Statements, 2009
- Exhibit BB - Vancouver Sun January 22, 2011
- Exhibit CC - News Story October 3, 2011
- Exhibit DD - Fortius Foundation Thank You & Farewell
- Exhibit EE - Fortius Foundation OVERVIEW (2008-2021)
- Exhibit FF - Fortius Five Financial Statements 2018
- Exhibit GG - Fortius Foundation, Debt Payment Analysis (Updated $74M Gift Analysis)
- Exhibit HH - Fortius Foundation Financial Statements, 2019
- Exhibit II - A Comparison of CHIMP vs Vancouver Foundation
- Exhibit JJ - CHIMP Foundation Hits $1 Billion in Charitable Donations
- Exhibit KK - CHIMP Foundation Gifts for $4
- Exhibit LL - Payments to Chimp Tech Inc: $54,339,832 (2011-2021)
- Exhibit MM - Chimp Tech Inc. Company Search
- Exhibit NN - CHIMP Foundation Financial Statements, 2020
- Exhibit OO - CHIMP Foundation Changes in Directors
- Exhibit PP - Letters to CRA, March 22, 2021 & May 16, 2022
- Exhibit QQ - Letters to City of Burnaby, January 2021
- Exhibit RR - Letter from Greg Allen April 21, 2021
- Exhibit SS - Letters to Greg Allen from Dan Burnett
- Exhibit TT - Letter to Deloitte Correspondence With Deloitte & KPMG
- Exhibit UU - Notes for $23,000,000
- Exhibit VV - Fortius & Imladris Financial Statements 2021
- Exhibit WW - Letter to Greg Allen from Dan Burnett May 18, 2022
- Exhibit XX - Software Write-offs for $3,027,514
- Exhibit YY - Scott Cousens Charities
- Exhibit ZZ - Reasons for Judgement