There is a Global News story that came out today, October 13, 2023, by Stewart Bell, an investigative journalist, “Auditors allege Canadian charity helped Hamas financier“. It deals with a lengthy CRA letter to the Muslim Association of Canada (MAC), a Canadian registered charity, expressing concerns as part of a CRA audit with the operations of this major Canadian registered charity. Here is a copy of the CRA Audit letters of Muslim Association of Canada MAC dated March 17, 2021.
Let us be clear. Normally, it would be impossible to obtain such a letter. CRA keeps audits confidential. Without the charity’s consent under audit, CRA would never disclose these letters unless there was a penalty, suspension or revocation of the registered charity. In other words, the only way that such a letter can be disclosed at this point in an audit is by the deliberate or accidental actions of a charity. (As an aside, I have written many times that the confidentiality provisions of the ITA do not make sense and CRA should be able to tell the public when there is very significant non-compliance. (Blumbergs’ Pre-Budget Submission for the 2024 Canadian Federal Budget) We have been making similar submissions for about a decade with little effect.
So, how come this letter is now public? In an unusual step, the registered charity went to court in Ontario to stop the audit in the middle, arguing that the CRA is Islamophobic. That was a step taken by the registered charity. As a result, documentation related to the audit was filed with the court, and as is normally the case such documents are open to the public. One of the applications of the organization was to have a sealing order to prevent the disclosure of documents related to the lawsuit. In other words, even though filed with the court, the charity wanted the documents sealed so that the public could not see the documents. They lost that application, and therefore now they are available. We have covered this story on a number of other occasions, including below:
Ontario judge dismisses case by Muslim Association of Canada which had challenged the CRA’s audit of that organization
Muslim Association of Canada v. Attorney General of Canada – Ontario court sides with CRA and will not seal documents relating to allegations of charity misconduct
CRA’s audit of the Muslim Association of Canada and the organization’s application in the Ontario Superior Court
Normally, when a charity is revoked after revocation, the CRA will release their letters plus the letters from the charity and its lawyers. This letter is not a final letter. We have not seen the charity response, but we have seen lots of information and press releases provided by the charity. CRA will not be able to comment because of the confidentiality provisions of the ITA!
The charity is still listed as a registered charity in Canada. They may appeal the Ontario decision to dismiss their case or they may not. CRA may or may not revoke their status as part of the audit. We will wait and see.