This affair of the Chinese donation to the Pierre Elliott Trudeau Foundation raises several delicate questions. Including this one: Was the donation of $140,000 to the Foundation treated correctly from a tax standpoint? To enlighten you, here are four questions about this Foundation.
First, you should know that the Foundation had assets of 144 million as of August 31, 2022, at the end of the last financial year. The returns from this amount, in addition to certain donations, are essentially used to finance excellence scholarships awarded to Canadian graduate students in the humanities and humanities.
1. Does the Foundation’s money come from the legacy of former Prime Minister Pierre Elliott Trudeau?
Answer: No.
The Trudeau Foundation was created in February 2001 by friends and family of the former prime minister a few months after his death in September 2000. The administrators are often very close to the Liberal family, even today.
The activities of the Foundation really began in March 2002 when the Liberal government of Jean Chrétien decided to transfer 125 million in public funds to it. The difference with today’s 144 million comes mainly from the returns on these funds. The 2002 financial statements do indicate donations of nearly $150,000 in 2002, in addition to the $125 million from the federal government, but the names of the donors are not specified, unlike the more recent financial statements.
2. So the $140,000 donation from the Chinese is very little?
Answer: No, it’s a lot.
According to its statutes, the Foundation cannot draw on its capital of 125 million to distribute its scholarships. It must do so with returns and annual donations. Now, the organization generally receives between $125,000 (2014) and $633,000 in donations (2022) annually. The Chinese donation of $140,000 – which was finally repaid on Friday – was therefore a significant sum when it was granted in 2016.
3. Has the donation been treated well for tax purposes?
Answer: Probably not.
According to documents obtained by our investigative team, the donation was made personally by the two Chinese donors, as stipulated in the donation agreement, but the tax receipt issued by the Foundation bore the name of one of their companies instead. du Québec, Golden Eagle of the Millennium.
However, giving a tax receipt to a person other than the real donor is a prohibited practice, according to article 3501.1 federal income tax regulations.
Tax expert Brigitte Alepin is categorical: “It is not fiscally allowed to do that. There are exceptions to the law for anonymous donations, but that doesn’t seem to be the case, since the names of the two Chinese donors appear in the Foundation’s annual report,” Ms.me Alepin, professor at the University of Quebec in Outaouais.
Taxally, the two donors Gensheng Niu and Zhang Bin – the latter is very close to the Chinese Communist Party – could not have benefited from the tax receipt, since they were non-residents of Canada. On the other hand, their company Aigle d’or du Millénaire, from Dorval, could have reduced its tax bill since it is incorporated in Canada.
It’s unclear whether Millennium Golden Eagle ultimately took advantage of the tax receipt, which could have saved him a few thousand dollars. But that’s not so relevant in this case. What is most disturbing is that the Pierre Elliott Trudeau Foundation, made up of the most eminent private and public managers, was able to issue a tax receipt that does not respect the rules.
An investigation should take place to clarify the case, but the consequences could be serious. The issuance of a tax receipt that contains false information is grounds for the revocation of a charitable organization’s license, according to section 168.1 of the tax law.
4. Was the donation of $140,000 accepted by the Foundation according to its own rules?
Answer: Obviously not.
On the one hand, “the final decision to accept or refuse a donation of a value up to $1 million rests with the president”, it is written in the company policy, that our team of investigation obtained.
However, the donation agreement between the two Chinese and the Trudeau Foundation is signed by Alexandre Trudeau (brother of Justin Trudeau), who has never been the president of the Foundation.
On the other hand, on the donation agreement that our team obtained, Alexandre Trudeau is described “as administrator, member and vice-president, duly authorized as he declares”.
However, in the numerous public documents of the Foundation, we have been unable to find any place where Alexandre Trudeau is designated as vice-president of the Foundation.
In 2016, during the year of the donation, he was one of two members of the Foundation’s board of directors elected by the family members of the estate of Pierre Trudeau, it is indicated in the 2015-2016 annual report.
Alexandre Trudeau refused any interview with The Press.
Marketing for China
The donation agreement between the two Chinese donors and the Foundation is not without obligation1. It stipulates that the Pierre Elliott Trudeau Foundation undertakes to organize, until funds are exhausted, an annual conference on issues affecting Canada and China.
In addition, both donors must be invited to each annual award ceremony of this “Bin Zhang-Niu Gensheng China-Canada Scholarship Fund”.
In short, the donation comes with pro-China marketing, of sorts.
Discussions surrounding the donation began in 2014, according to our investigation team. At that time, Canada-China relations were much better.
In the contract, the two donors say they want to “perpetuate the Sino-Canadian heritage and take part in the maintenance of peace and justice in the world, just like Pierre Elliott Trudeau”.
The agreement also recalls that the Canadian government was in 1970, under Pierre Elliott Trudeau, “the first North American nation to establish genuine diplomatic relations with China. […] Pierre-Elliott Trudeau’s stance on China has become the norm with contemporary world leaders.
We really were in another era…
The 2014 discussions also took place a year after Justin Trudeau was elected leader of the Liberal Party of Canada in 2013. They culminated in the signing of the contract in June 2016, 8 months after Justin Trudeau was elected. as Prime Minister of the country, in October 2015.
Relations between Canada and China became abysmal in the following years. Among other things, two Canadians were arbitrarily detained in China for months after the arrest in Canada of Meng Wanzhou, the chief financial officer of the Chinese telecommunications giant Huawei, for a question of extradition to the United States. The three were eventually released.
What happens next will be interesting. The most unfortunate thing is that the Trudeau Foundation scholarship recipients will be the main victims, since the activities of the Foundation will be strongly affected by the resignation en bloc of the directors and administrators.
1. The contract also involved the University of Montreal, which was to receive $750,000.