Ellin Bessner of the Canadian Jewish News recently wrote an article Federal Court of Appeal hears JNF Canada’s second attempt to fight losing its charitable status which updates the confusing legacy of JNF Canada and its revocation in 2024. Definitely worth reading.
In most cases, CRA does not publish the revocation notice in the Canada Gazette until a charity has done an internal CRA appeal, then an FCA appeal and asked for leave to appeal to the Supreme Court. However, in some cases of serious non-compliance, CRA acts more “swiftly” and will publish the revocation notice when there is some significant non-compliance.
One of the arguments made by JNF Canada relating to the publication of the revocation in the Canada Gazette was that ““Unknown to us, the carpet was pulled out from under us, before we could avail ourselves of that opportunity,” JNF Canada’s lawyer, … told the court Wednesday.”
Yes, if the notification is published, then the registered charity immediately loses its charitable status, unlike just CRA sending a notification of intention to revoke by mail. With the publication, the charity loses its charitable status, and that could be seen as the carpet being pulled from under the charity. Yes, it can be seen as shocking by some. Yes, the charity may feel like they were blindsided. After all, if you have gotten 35 years of warnings from a regulator (beginning in 1989) that you are breaking the rules, it is shocking when a regulator actually does something, if they had not taken any public action in 35 years.
One small confusing matter. In August 2024, CRA actually did not send a Notice of Intention to Revoke. They sent a “Notice of Confirmation” of the Notice that was sent on August 20, 2019. So the actual Notice of Intention to Revoke was sent almost 5 years earlier. 10 days shy of 5 years! Should CRA have allowed JNF Canada to have charitable status for another say 2-3 years while appealing the issue to the Federal Court of Appeal? Some may say yes, and some no. For me, who is concerned with many types of inappropriate behaviour by registered charities in Canada, I am more of the view that CRA needs to act more quickly not more slowly, or public confidence in registered charities is going to further erode.
Was there significant non-compliance here? Spending $400 million that CRA says was not spent on the charitable activities of JNF Canada (because there was not appropriate direction and control) and building many facilities on Israeli military bases, probably qualifies as serious non-compliance.
What is interesting about the “blindsided” argument is that CRA has been revoking some charities for a long time, where there was serious non-compliance without waiting even more years for them to exhaust all appeal options- at least as early as International Charity Association Network (ICAN) around 2008, from what I can remember. So, in the case of JNF Canada, they had 35 years of warnings, but still they were caught by surprise when the revocation notice was published in the Canada Gazette.
I am not sure exactly why CRA decided to publish the revocation in this case versus say a different group but it might have had something to do with the large amounts of funds involved, the continued warnings that JNF Canada had received over 35 years and perhaps also public statements and actions coming from the group itself after the Notice of Confirmation.
It will be interesting to see what the determination of the Federal Court of Appeal is.