An environmental group that angered the energy industry has given up its charitable status so it can take on the federal government.

ForestEthics, which spearheaded campaigns to get U.S. companies to avoid oilsands-derived fuel, is splitting into two in response to Ottawa's crackdown on charitable groups in the recent budget.

One half will continue conservation work and remain a charity, but the other will no longer offer tax receipts and will focus its efforts on what it calls Conservative attacks on the environment.

Neither group will be associated with Tides Canada, a charitable umbrella group.

The move "shows our resolve in this very hostile climate to continue the work that we feel Canadians actually want," said Valerie Langer, who will head ForestEthics Solutions, which will remain a charity.

"Given the climate that we're in, we have to do what we have to do."

Split a response to Harper government attacks

Lawyer Clayton Ruby, seen here in a file photo from Feb. 2011, will help lead the new group ForestEthics Advocacy, which is splitting off from the ForestEthics charity so it can be more politically active in opposing Harper government policy on oilsands development and other environmental issues. (Darren Calabrese/Canadian Press)

Civil rights lawyer Clayton Ruby, who will help lead the other group called ForestEthics Advocacy, said the Harper government has started a "relentless" attack on the environment and environmental groups, starting with Natural Resources Minister Joe Oliver's open letter about environmentalists.

"The government implied that the people in the environmental community, or people who have the nerve to act and donate to environmental groups, are unpatriotic and potential terrorists," Ruby said.

The announcement came the same day Ottawa announced environmental assessments in Canada will be radically "streamlined" and left to the provinces. As well, the recent federal budget contained $8 million for the government to audit charitable groups to ensure they stay within the Charities Act.

Ruby said the move was simply to silence critics.

"It is a systematic campaign by the government to stop dissenting opinion and prevent any effective opposition to environmental depredation. They're making it impossible to challenge them and their allies," he said.

"What Canada needs now is not less advocacy for the environment, but more."

Donations up since controversy flared

Langer said she's confident support will continue for advocacy work even if donors don't get charitable receipts.

"Since the Harper government started attacking us, we've had more individual donors than ever in ForestEthics' history."

ForestEthics is best known for its campaign to encourage large U.S. firms to avoid the use of fuel derived from oilsands crude in their transportation fleets. A total of 16 companies -- including giants such as Walgreen's and Chiquita -- and one city have made commitments of varying strength.

Seventh Generation, a company that manufactures and distributes green cleaning and personal care products, joined the list last week.

ForestEthics has also worked to get people to sign up to address a National Energy Board review currently underway into Enbridge's proposed Northern Gateway oil pipeline between Alberta and Kitimat, B.C. More than 4,000 people have asked to appear.