Purpose

The purpose of this note is to offer some perspective on the broader policy considerations related to the proposed Bill C-278, the Foreign Lobbyist Transparency Act.

Background

Within the United States, there is a large body of academic studies examining the strategies and practices used by private foundations to influence public policy. Many of these foundations have enormous financial resources, including billions of dollars in assets and hundreds of millions of dollars in annual revenues. Increasingly, U.S. studies have addressed the strategies used by private foundations and the many other groups they fund, most of which have charity (i.e. non-taxable) status, in influencing policy. The strategies include broad communications and “education” programs to influence public perceptions of policy issues and to garner public support for specific actions, the lobbying of governments at all levels, infiltration of the media, and concerted, coordinated action to achieve specific objectives.

While there is less information and academic analysis available in Canada, some private researchers have made efforts to “follow the money” in terms of how foundation and charity funding is used. These efforts are impeded by superficial reporting requirements and the lack of publicly-available information from organizations like the Canada Revenue Agency (CRA), which administers the provisions of the Income Tax act related to charities, and the Lobbying Registry, compiled by the Office of the Commissioner of Lobbying of Canada. Researchers such as Vivian Krause, who has endeavored to find out more about the use of domestic and foreign foundation funding for anti-oil and anti-pipeline campaigns, have found that they must often rely on the U.S. Internal Revenue Service records, as the information they seek is not available from Canadian sources.

Considerations

The role played by foreign governments as well as foreign foundations in campaigns to influence public policy in Canada should be of interest to all concerned about the independence and integrity of Canadian political and governmental processes. The increasing globalization of corporate, institutional and geo-political interests would seem to require that Canadian democratic institutions be more vigilant about these possible intrusions. This, in turn, demands that reports on the activities of foundations and charities seeking to influence policy be made more transparent to the public and more useful to parliamentarians who wish to exercise oversight.

Two areas that would benefit greatly from a more open system of reporting and increased oversight are the Lobbyist Registry and the reporting requirements to the CRA by non-profit and charitable organizations. In addition to the concerns expressed previously about the role of foreign and corporate actors, the transparency of reporting by lobbyists and charities is being increasingly obscured by the efforts of various interests to mask self-dealing and vested interests.

In the United States, a Donor-Advised Fund (DAF) is a charitable giving vehicle administered by a public charity created to manage charitable donations on behalf of organizations, families, or individuals. Although DAFs are more developed in the United States, they increasingly are being used in Canada. To participate in a DAF, a donating individual or organization opens an account in the fund and deposits cash, securities, or other financial instruments. The donor surrenders ownership of anything put in the fund, but retains advisory privileges over how the account is invested, and how it distributes money to charities. In the charity sector, the increased use of donor-advised funds makes it increasingly difficult to determine the ultimate source and purpose of funding.

Similarly, with respect to lobbying, there is an increasing number of professional lobbying “concierge” services that act on behalf of other organizations, masking the original interest on whose behalf the lobbying is being done.

While foundations with political agendas have every right to undertake activism in a democracy, they have no right to expect their activities be afforded the implied respect and financial privilege, on the taxpayer’s dime, afforded to charitable non-profits that are actually engaged in ‘good works’ for the average Canadian – millions of people who are in need of bread, work, dignity, or health support. To give wealthy, often foreign-funded foundations such privileges without restriction besmirches the real charity done to advance a public good. It also threatens the integrity of the charitable and volunteer sector.   

Conclusion 

Registry as a lobbyist and a charity confers certain benefits to the organizations involved. It is therefore a privilege and not a right. The conduct of some registrants today threatens the integrity of those privileges. Extending the reporting requirements to include more information, especially about funding purpose and sources, is vital to preserving that integrity.