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Pen Canada’s executive director Tasleem Thawar (left) and Toby Heaps attend the 85th birthday celebration of Maurice Strong at the home of Adrienne Clarkson and John Ralston Saul, Tuesday April 29th. Thawar said the organization had given out 16 new memberships – which cost $75 each – and received six “pretty sizable” financial donations since news of the audit surfaced MondayJenna Marie Wakani/The Globe and Mail

Pen Canada got a boost in new members and donations after news broke that the national freedom-of-expression charity is facing a government audit probing political activities.

For the second day in a row Tuesday, two Canada Revenue Agency auditors were at the small Toronto-based charity to review the organization's books. One auditor is focused on financial accounting issues, while the other is examining whether any of Pen Canada's activities meet the government's definition of political activity – work that is allowed but restricted in the charitable sector.

The country's literary community weighed in with concern Tuesday, with the Writers' Union of Canada expressing hope that the audit doesn't limit the organization's "critical work." One of Canada's most visible authors, Margaret Atwood, used her Twitter account to denounce the CRA audit as a "punishing" tactic by a government threatened by freedom of expression.

Tasleem Thawar, Pen Canada's executive director, said the organization had given out 16 new memberships – which cost $75 each – and received six "pretty sizable" financial donations since news of the audit surfaced Monday.

"It's actually unbelievable what's happening," she said, explaining that the number of contributions is "pretty huge" compared with what Pen would normally expect and they're in addition to phone calls and written notes of support. "I feel like somebody in my family has died, the kind of condolences I'm getting."

The charity, which has worked to uphold the rights of people across the political spectrum, had 466 members at the start of the week. In its five most recent tax filings posted online, Pen Canada has stated that it has not engaged in political activity.

Pen Canada describes itself as a non-partisan organization of writers that defends freedom of expression as a basic human right, promoting literature and fighting censorship. Several charities, including environmental groups, have been speaking out over the Conservative government's heightened focus on the political activities of charities, which was first signalled in its 2012 budget.

Imagine Canada president Bruce MacDonald, who advocates on behalf of Canadian charities, said there is a concern the audits are creating a "chill" in the sector, as groups become apprehensive about speaking out.

Carter Mann, a spokesperson for National Revenue Minister Kerry-Lynne Findlay, said the government is enforcing long-standing rules and that audits are "conducted free of any political interference." The CRA will not release the identities of the 52 charities facing audits.

Canadian law doesn't bar charities from political activity so long as "substantially all" – generally understood to mean roughly 90 per cent – of its resources are devoted to charitable work. Although permitted, political activity must always be non-partisan and incidental, meaning the charity can't support or oppose a candidate running for public office or support or oppose a particular party at any time, and the activities must be connected but secondary to their charitable purposes.

Pen Canada has come out against the Harper government on several fronts in recent years, including what it described in a 2012 news release as the "silencing of publicly funded scientists." More recently, in 2014, the group expressed concern over the Conservatives' online crime bill.

Mark Blumberg, a Toronto lawyer who works almost exclusively in nonprofit and charity law, said it's possible Pen Canada, like other charities, confused political activity with partisan activity and, in turn, claimed it did no political work. A 2012 Pen Canada news release, for example, condemned a piece of Quebec legislation because it "constitutes a serious threat to freedom of expression."  Such a public statement is allowed under the law, but it "could very well fit into the rubric of political activity," Mr. Blumberg said, adding that determining whether a charity engaged in political activity isn't always black and white.

In the 2012 budget, the Conservative government announced a crackdown on charities exceeding the political activity limit, pledging $8-million to help the CRA ramp up its enforcement of the rules. Mr. Blumberg said in his view, the government is spending too much time and money on the political activity front, calling it a distraction from other "major issues" such as abuse of receipting privileges, which costs Ottawa billions annually in lost tax revenue.

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