Direct Line: (403)571-1509 Email: [email protected] Assistant - Jennifer Samaco (403)571-4319 File No: 13268-002 VIA EMAIL ([email protected]) July 22, 2020 Compliance Division, Charities Directorate Canada Revenue Agency Ottawa ON, K1A 0L5 Dear Sir or Madam: Re: Letter of Complaint Regarding Charitable Status of WE Charity We act for Rebel News Network Ltd. (“Rebel News”). We are writing on behalf of Rebel News to lodge a complaint about WE Charity, a charity registered (registration no. 88657 8095 RR0001) with the Canada Revenue Agency (“CRA”). We would like you to determine whether or not WE Charity is in contravention of the CRA policies, the Income Tax Act, RSC 1985, c 1 5th Supp (“ITA”) or the Common Law. SUMMARY There are several issues that suggest that WE Charity may be in contravention of the ITA. Specifically: Significant amounts of money moving from WE Charity to an associated for-profit company: ME to WE Social Enterprises Inc. (“ME to WE”); The level at which WE Charity’s accounting appears to be intertwined with ME to WE and a lack of board oversight related to its accounting practices; WE Charity’s unusual and significant acquisition of real estate assets; and WE Charity’s clear support of Prime Minister Justin Trudeau, his Cabinet, and the Liberal Party of Canada. We request that, in light of these issues, the CRA undertake a review of the charitable status of WE Charity. {02384897 v4.1} T 403 571 1520 F 403 571 1528 800, 304 - 8 Avenue SW, Calgary, Alberta T2P 1C2 www.jssbarristers.ca 2 If you find that WE Charity is in contravention of any of the above referenced policies or laws, then we request that you consider whether WE Charity should have its charitable status revoked or otherwise be sanctioned by the CRA. WE CHARITY BACKGROUND WE Charity is one of several organizations founded by Kielburger brothers, Craig Kielburger and Marc Kielburger. WE Charity, formerly known as Free the Children, was founded in 1995 and has grown exponentially since then. WE Charity’s describes itself and its program as follows: WE Charity is an international charity and educational partner. Our organization is unique in that it operates collaborative programs both domestically and internationally. In the US, Canada, and the UK, WE Day and WE Schools are initiatives of WE Charity that educate and empower young people. WE Schools is a year-long service-learning program that nurtures compassion in students and gives them the tools to create transformative social change. And WE Day is a series of inspiring events that celebrate youth making a difference in their local and global communities. In Africa, Asia and Latin America, we partner with communities to implement WE Villages, a holistic, five-pillar international development model designed to achieve sustainable change. Together with local leaders and families, we transform lives with solutions that are adaptive, effective and sustained long term by the community itself.1 WE Charity is related to other ventures of the Kielburger brothers including ME to WE. ME to WE is a privately held, for-profit “social enterprise” founded in 2009 by the Kielburger brothers. Its stated mission is: to provide economic opportunity in WE Village communities and a sustainable source of funding for WE Charity.2 ME to WE describes itself as: an innovative social enterprise that creates socially conscious products and experiences that enable people to change lives through their everyday choices. At minimum 50% of profits are donated to WE Charity to help support its international development work.3 1 WE Charity, “About WE Charity”, https://www.we.org/en-CA/about-we/we-charity/. 2 WE Charity, “About ME to WE”, https://www.we.org/en-CA/about-we/me-to-we/about-me-to-we/ 3 WE Charity, “About WE”, https://www.we.org/en-CA/about-we/about-us {02384897 v4.1} 3 ME to WE sells a variety of products (chocolate, coffee, bracelets)4 to the public as well as travel packages5 including luxury signature vacations.6 Unlike WE Charity, ME to WE is meant to make a profit; it is privately held and does not have any disclosure requirements. The workings of ME to WE are not publicly available.7 The Kielburger brothers also control several other WE-related organizations including, but not limited to, ME to WE Asset Holdings, ME to WE Foundation and Imagine 1 Day International Organization.8 The Law In order to be charitable at law, an organization must be established and operated for only charitable purposes and a charitable organization is required to devote all of its resources to charitable activities. The ITA states the following in section 149.1(1): … charitable organization, at any particular time, means an organization, whether or not incorporated, (a) constituted and operated exclusively for charitable purposes, (a.1) all the resources of which are devoted to charitable activities carried on by the organization itself, (b) no part of the income of which is payable to, or is otherwise available for, the personal benefit of any proprietor, member, shareholder, trustee or settlor thereof, … charitable purposes includes the disbursement of funds to a qualified donee … qualified donee, at any time, means a person that is … 4 ME to WE, “Shop ME to WE”, https://shop.metowe.com/en-CA/ 5 ME to WE, “Travel and Make an Impact: ME to WE Trips”, https://travel.metowe.com/en-CA/ 6 See: https://metowelodges.com/ 7 CBC: The Current, “July 13, 2020 episode transcript,” https://www.cbc.ca/radio/thecurrent/the-current-for-july- 13-2020-1.5647242/july-13-2020-episode-transcript-1.5647817 8 See: https://torontosun.com/opinion/columnists/lilley-we-charity-listed-real-estate-holdings-worth-43-7-m-in- 2018 {02384897 v4.1} 4 (b) a registered charity, … These definitions require a charitable organization to devote its resources either to charitable activity carried on by it or as gifts to qualified donees. WE Charity could qualify as both a “charitable organization” and a “qualified donee.” However, as outlined in more detail below, WE Charity may no longer be complying with the requirements of these definitions and, therefore, their status should be reconsidered. Revocation of registration of charitable organization 149.1(2) The Minister may, in the manner described in section 168, revoke the registration of a charitable organization for any reason described in subsection 168(1) or where the organization (a) carries on a business that is not a related business of that charity; … (c) makes a disbursement by way of a gift, other than a gift made (i) in the course of charitable activities carried on by it, or (ii) to a donee that is a qualified donee at the time of the gift. Charitable purposes 149.1(6.2) For the purposes of the definition charitable organization in subsection (1), an organization that devotes any part of its resources to the direct or indirect support of, or opposition to, any political party or candidate for public office shall not be considered to be constituted and operated exclusively for charitable purposes. Notice of intention to revoke registration 168 (1) The Minister may, by registered mail, give notice to a person described in any of paragraphs (a) to (c) of the definition qualified donee in subsection 149.1(1) that the Minister proposes to revoke its registration if the person … (b) ceases to comply with the requirements of this Act for its registration; … (e) fails to comply with or contravenes any of sections 230 to 231.5; {02384897 v4.1} 5 … The registration requirement that is relevant in our case steps from the definition of the term “charitable organization in subsection 149(1) of the ITA (and replicated in part above). Records and books 230(2) Every qualified donee referred to in paragraphs (a) to (c) of the definition qualified donee in subsection 149.1(1) shall keep records and books of account — in the case of a qualified donee referred to in any of subparagraphs (a)(i) and (iii) and paragraphs (b), (b.1) and (c) of that definition, at an address in Canada recorded with the Minister or designated by the Minister — containing (a) information in such form as will enable the Minister to determine whether there are any grounds for the revocation of its registration under this Act; … WE Charity, as a qualified donee, is required to comply with section 230(2). CONCERNS RELATED TO WE CHARITY 1. MONEY MOVING FROM WE CHARITY TO A NON-QUALIFIED DONEE Charity Intelligence Canada (CI), is an independent charity watchdog group that helps donors “Be informed. Give intelligently. Have impact.”9 CI reviews charities’ management and operations, analyzes financial data and assesses a charity's social results from the information posted on its website and in annual reports, newsletters, impact reports, etc. 10 CI has identified issues with “donor confusion” and “blurred lines” between WE Charity and ME to WE.11 WE Charity and ME to WE are so closely connected that Kate Bahen, the Managing Director of CI, stated that they were “joined at the hip.”12 CI highlights the flow of funds between WE Charity and ME to WE on its website: WE Charity buys promotional goods and travel services from ME to WE. In F2019 WE Charity paid ME to WE $3.6m for travel, leadership training services, and promotional goods. In F2019, ME to WE contributed $4.4m to WE Charity in 9 Charity Intelligence Canada, “Giving with Impact”, https://www.charityintelligence.ca/giving-with-impact. 10 Ibid. 11 Charity Intelligence Canada, “WE Charity”, https://www.charityintelligence.ca/charity-details/82-we-charity 12 CBC: The Current, “July 13, 2020 episode transcript,” https://www.cbc.ca/radio/thecurrent/the-current-for-july- 13-2020-1.5647242/july-13-2020-episode-transcript-1.5647817 {02384897 v4.1} 6 donated time and services and cash.