Canadian government crackdown: Animal Defense League loses charitable status; RETALIATION FOR ANTIFUR EFFORTS?
From ANIMAL PEOPLE, November 1992:
OTTAWA, Ontario–– The
Animal Defense League of Canada has
been stripped of the charitable status it has
enjoyed since 1967 by Revenue Canada,
the Canadian equivalent of the Internal
Revenue Service,
Although the ADLC retains non-
profit status, donations to the group are no
longer tax deductible.
“For several years now,” the
group told members in late September,
“Revenue Canada has been reviewing the
charitable status of animal rights organiza-
tions and taking a very narrow view of what
they will accept as being ‘charitable.’ We
believe this position is being taken in
response to the complaints and pressure
from factory farmers, the fur industry,
vivisectors, the hunters’ lobby, and oth-
ers.”
Revenue Canada moved against a
number of the leading Canadian animal
protection groups roughly a year ago, with
the argument that activities other than
hands-on humane work don’t constitute
charitable works as defined by the tax code.
This is essentially the same argument the
IRS has recently used in challenging the
charitable status of some U.S. animal rights
groups. Under both U.S. and Canadian law,
charitable groups may engage in public edu-
cation, but may not spend more than a
small percentage of their budget on promot-
ing legislation or supporting political candi-
ates. Although the percentage is not stated
in specific numbers in either nation, it is
generally considered to be five percent.
In both the U.S. and Canada, ani-
mal protection organizations were routinely
granted charitable status under the tax code
provisions that apply to humane societies
until the late 1980s. Then, according to tax
officials, the proliferation of non-sheltering
animal protection groups caused them to re-
examine where the money was going.
So far, no national groups in the
U.S. have lost charitable status, but at least
one state organization did. The structures
of numerous U.S.-based groups are believed
to be under IRS review.
The ADLC is the first major
Canadian group to be affected, but the
activities of the Vancouver-based
Association for the Protection of Fur-
Bearing Animals have also been challenged.
The Fur-Bearers, as the latter is known for
short, has had charitable status since 1952.
The ADLC agreed to accept
“annulment” of charitable status after being
advised that challenging Revenue Canada
could result in even stiffer consequences.
“The threat,” the ADLC newsletter
explained, “was that if we did not accept
annulment, they would take us to court to
revoke our charitable status. Revocation is
far more punitive than annulment.
Revocation means that if we lost the case,
we would not only be prevented from issu-
ing income tax-deductible receipts, but all
our assets and bequests from supporters
received over the years would automatically
be confiscated by Revenue Canada. After
consultations with a lawyer, we felt there
was no hope of winning the case in today’s
judicial climate.”
The annulment took effect on
August 31.
The fur industry in particular has
been demanding governmental review of tax
laws as they apply to animal protection
groups, in both the U.S. and Canada. The
demand has special force in Canada because
the Canadian government until recently col-
lected significant income from trapline roy-
alties, leasing trapping and grazing rights
on federal land, and luxury taxes on sales of
fur garments. In addition, over the past five
years Canada has poured at least $26 mil-
lion in public funds into attempting to
revive the fur trade.
Gross Canadian trapline income
has plummeted from over $123 million in
1986-1987 to under $20 million in 1991-
1992 according to current projections. The
official numbers for 1991-1992 have not yet
been published.
