More provincial oversight: Recommendations from the Allan Inquiry regarding non-profits and charities

December 17, 2021 | Kristina Roberts

On October 21, 2021, over two years after Steve Allan (“Allan” or the “Commissioner“), a Calgary-based forensic and restructuring accountant, was appointed as commissioner of the public inquiry into anti-Alberta energy campaigns, the commission’s 657-page Report was released.

Mandate of the inquiry

The original mandate of the Commissioner, as established under the terms of reference by an Order in Council dated July 4, 2019, was to:

“inquire into anti-Alberta energy campaigns that are supported, in whole or in part, by foreign organizations, and in doing so shall inquire into matters including, but not limited to…whether any foreign organization that has evinced an intent harmful or injurious to the Alberta oil and gas industry has provided financial assistance to a Canadian organization that has disseminated misleading or false information about the Alberta oil and gas industry…”

The terms of reference for the inquiry were amended by Orders in Council on five separate occasions, significantly narrowing the scope of the inquiry. After the amendments, the final mandate was to:

“[inquire into] the role of foreign funding, if any, in anti-Alberta energy campaigns [and]…whether any foreign organization that has evinced an intent harmful or injurious to the Alberta oil and gas industry has provided financial assistance to a Canadian organization, which may include any Canadian organization that has disseminated misleading or false information about the Alberta oil and gas industry.”

Allan interpreted the amended terms of reference to mean that he was not required to make any findings as to whether an organization disseminated false or misleading information.

As it were, leaders of Alberta environmental advocacy organizations were concerned about the fallout of the inquiry, especially in light of what was perceived as inflammatory language framing the inquiry, and the implication that criticizing oil sands development was “anti-Alberta.” Allan issued a Ruling on Interpretation of the Terms of Reference (see Appendix B of Report) wherein he found that the term anti-Alberta “…should not import any connotation that opposition to oil and gas development in Alberta is “against Alberta” or its interests in any sense.”

Findings of the Commissioner

Ultimately, Allan confirmed that a total of approximately $54 million from foreign funders flowed directly to “anti-Alberta resource development activity” between 2003 and 2019.

There are no legal restrictions on the ability of a Canadian registered charity to receive funds from foreign sources, so long as those funds are spent on the charity’s own charitable activities, and are not the proceeds of crime, money laundering, or used to support terrorism in any way. Recognizing this, Allan effectively exonerated Canadian environmental advocacy groups by stating “…I do not find that participation in an anti-Alberta energy campaign is in any way improper or constitutes conduct that should in any way be impugned…”

Commissioner’s recommendations for Alberta’s non-profit and charitable sector

While Allan did not conclude that environmental non-profits and charities did anything improper, he did target the non-profit/charitable sector as a whole with his recommendations. The first of six recommendations Allan made to the Alberta Government was to:

“develop standards for not-for-profit/charitable organizations that provide a level of consistency and a more level playing field with the corporate sector, in terms of transparency, accountability and governance.”

Allan argues that the corporate sector has a form of “independent governance oversight” that the non-profit/charitable sector is lacking.

In the report, Allan provided his opinion that:

“…there are frankly, too many charitable organizations competing for donations, and providing a myriad of services, such that those who really need the services are confused and frustrated with the challenges of attempting to access services. When one considers the overall costs of administration for executive directors, staff, office space, accountants and other administrative services, the sector is inefficient and communities would be better served if more funding could be directed to serving stakeholders.”

Allan’s recommendations in this area seem to reflect generalized criticisms (however unjustified) that are sometimes made of the charitable and non-profit sector and that seem to be unrelated to the specific mandate of this inquiry.  

Allan recommends that non-profit organizations be subject to the same disclosure and reporting obligations as registered charities, and that the sources, purpose, intent and expenditure of funding be fully disclosed. He also suggests that there should be heightened provincial oversight of non-profit organizations and registered charities, recommending reporting obligations that mirror or exceed what is already required federally for registered charities.

Potential implications for the non-profit and charitable sector

So far, there has not been any indication that the Alberta Government plans to implement any of Allan’s recommendations pertaining to the voluntary sector, and there has been little public attention on this aspect of the report. Our team will continue to monitor any updates in this regard.

If you have any questions regarding the impact of the Allan Inquiry on your organization or sector, please feel free to reach out to Miller Thomson’s Social Impact team.

Disclaimer

This publication is provided as an information service and may include items reported from other sources. We do not warrant its accuracy. This information is not meant as legal opinion or advice.

Miller Thomson LLP uses your contact information to send you information electronically on legal topics, seminars, and firm events that may be of interest to you. If you have any questions about our information practices or obligations under Canada's anti-spam laws, please contact us at privacy@millerthomson.com.

© 2022 Miller Thomson LLP. This publication may be reproduced and distributed in its entirety provided no alterations are made to the form or content. Any other form of reproduction or distribution requires the prior written consent of Miller Thomson LLP which may be requested by contacting newsletters@millerthomson.com.