The Canadian Press has an article by Jim Bronskill entitled "Tax agency gives senators information on groups that lost charitable status". It focuses on the issue of terrorism and the extent to which the CRA can divulge to parliamentarians information on groups that are alleged to have been involved with terrorist activities and have either lost their charitable status or are still operating. What was most interesting about the article seems to be that the material the Senators were asking for and took almost a year to receive were easily available on our www.globalphilanthropy.ca website. I am starting to wonder whether the involvement of the Senate defence and security committee is of any real utility. They seem to know little about the charity sector and even less about the regulation of charities. I have already covered an extremely poorly written report on terrorism from this committee.
Here is some excerpts from the CP article with my comment in brackets and italicized:
Tax agency gives senators information on groups that lost charitable status: The Senate committee has been pressing the Canada Revenue Agency’s charities directorate since June of last year to provide information about six organizations whose charitable status was stripped. [Perhaps you should have gone on Google - all of the CRA letters outlining in detail CRA's concerns have been posted on our website. In the case of one organization it is over 200 pages of letters that we posted in 2011. ]
By: Jim Bronskill The Canadian Press, Published on Mon Apr 11 2016
OTTAWA—Federal revenue agency officials have handed senators detailed correspondence about six organizations whose charitable status was stripped over concerns about terrorist financing.
But the agency stresses that the fight against shady funding of political extremism begins with prevention — revocation being just one weapon in its arsenal. [This is absolutely correct. There is a huge capacity gap in the non-profit and charitable sector especially in areas of financial management (including financial controls) and also to a lesser extent governance. In the last few years the Federal government has been largely absent on the capacity building front. Having Senators talk about how important something is, is not exactly the same as investing funds in improving the capacity of the charity sector, especially relating to the Canadian charities spending over $3.5 Billion outside of Canada each year.]
The Senate defence and security committee has been pressing the revenue agency’s charities directorate since June of last year to provide the information, but the federal election delayed the effort.
The pages cover the handful of cases since 2008 in which revocations involved concerns about terrorist financing.
Basic information about each case — including the World Assembly of Muslim Youth, the Canadian Foundation for Tamil Refugee Rehabilitation and the World Islamic Call Society — has already been made public. [Yes CRA sometimes provides a press release or a short description on their Charities Listing database. here is an example for World Assembly of Muslim Youth. I have been posting much more detailed CRA letters that were written by CRA to the organizations as part of the revocation process and that can only be released by CRA after revocation of the group's charitable status. I would be very interested to know if CRA provided any further information that what I have posted. Here are some links to information that I have posted on the World Assembly of Muslim Youth (34 pages), the Canadian Foundation for Tamil Refugee Rehabilitation (38 pages) and the World Islamic Call Society (23 pages). As well here is over 200 pages on the International Relief Fund for the Afflicted and Needy Canada (IRFAN-Canada). Senators you might want to sign up to our email list to keep in the loop on the charity sector. If you don't use email but are on Twitter you can find me at @canadiancharity ]
But the various files, presented by directorate officials who testified before the committee, lay out details of the federal concerns.
The committee meeting Monday came amid growing concern about the surreptitious movement of large sums around the globe for illicit purposes.
The charities directorate says it turns down applications for charitable registration where terrorist financing risks arise.
The directorate also conducts audits of registered charities based on the risk and can take action ranging from education letters and compliance agreements to sanctions and revocation of charitable status.
In addition, it can also pass information about suspected criminal or security-related matters to police and intelligence partners. [Yes but the CRA cannot warn the public or even MPs and Senators because s. 241 of the ITA gives all terrorist organizations who happen to have charitable status absolute confidentiality until after they lose that status. As well when the alleged terrorist supporting charity was a registered charity their filings with CRA were made public. After they lose their registered charity status any filing they make to CRA (either the T2 or the T1044) is absolutely private. If Canadians want to remain oblivioius to what is going on with a small number of organizations then I would argue that Canada is doing a fantastic job keeping that information under wraps.]
Alastair Bland, director of the review and analysis division of the charities directorate, said there is a “recognized threat” against the Canadian charitable sector from people determined to support terrorism. [I would also point out that there is a threat from the non-profit sector, but the Charities Directorate of CRA is not tasked to deal with it and does not really have any involvement with non-profits that are not registered charity status.]
The audit materials provided to the committee should give senators a sense of the complexity of the revenue agency’s work, said Cathy Hawara, director general of the charities directorate.
She cautioned that the Income Tax Act restricts officials to discussing only cases that end in revocation, meaning she had to be careful about referring to ongoing investigations. [This is correct. A registered charity could be involved in all sorts of nefarious activities from abusing children to supporting ISIS and she is forbidden from disclosing that fact to parliamentarians until years later when the organization officially loses its charitable status. Did I say years later - it could be up to 15 years later!! Here is one of many submissions I have made to the House of Commons Finance Committee to try and have some greater transparency when there are allegations of innaproprriate conduct as we see the Charity Commission of England and Wales is allowed to do.]
“We continue to identify risks and we take the appropriate action,” Hawara said.
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.