Office of the Taxpayers’ Ombudsperson releases report “Charity Begins with Fairness: More to Explore”

The Office of the Taxpayers’ Ombudsperson has just released a report “Charity Begins with Fairness: More to Explore on March 27, 2023.

It is a fairly lengthy report that provides a lot of background and information on the Office of the Taxpayers’ Ombudsperson, how it operates, and the specific complaints they are dealing with and their history.

The report provides a good overview of the difference between registered charities and non-profits, the generous tax incentives given to registered charities and the role of CRA in registering chanties and monitoring compliance. There is quite a lengthy and helpful description of the CRA audit process. There is also a good discussion of the national security framework as it relates to charities and the importance of CRA ensuring that charities are not involved with money laundering and terrorism.

The Taxpayers’ Ombudsperson provided numerous examples of limitations on the information they could obtain. Most of the limitations were CRA not providing information because of the ITA confidentiality provisions or because it was sensitive information that are recognized exceptions under statutes such as those dealing with access to information or that could jeopardize CRA’s compliance efforts.

Apparently, some of the required information CRA was not prepared to release information because of the confidentiality or other provisions of the ITA and they did not have consent from the charity to disclose that information. The report notes “By contrast, the CRA indicated to us it is possible that some charities may have purposefully not wanted to provide consent as doing so would have opened their allegations to critical review.” It would be interesting to know which charities or former charities were prepared to provide consent and which were not.

I have watched many dozens of charities over the last few decades bitterly complain about revocation or other measures from CRA. I cannot think of one that actually published the letters from CRA and the charity’s responses. It is not for lack of trying. I have asked many organizations to provide copies of letters, but they have uniformly refused. I then would request those letters from CRA, and many months later, I would receive the letters and make them publicly available. I have never understood how a charity thinks they can complain publicly about CRA actions when they are not even prepared to disclose the CRA letters and their response to CRA. Needless to say, the charity’s characterizations of the CRA letters is not always completely accurate. The issue of charities being registered and revoked is vitally important to a democratic country, and the fact that we have so little information on non-compliance of registered charities and only find out about CRA concerns sometimes decades after CRA became aware of problems is a concern of mine. I have put in numerous submissions on that point. Here is only one recent submission. It says something about the gullibility of some in the charity sector that they are prepared to allege a regulator acted inappropriately without even reading the letters and reasons of the regulator.

The Taxpayers’ Ombudsperson made a number of suggestions early on in the report including:

• improving content on the CRA website to provide more material on audits and ensure that it is up to date. (practically speaking the Taxpayers’ Ombudsperson’s report is one of the most comprehensive and easy-to-read descriptions of the charity audit process and if someone is interested in the audit process it would make a lot of sense to review the Taxpayers’ Ombudsperson’s report. I doubt CRA will ever do as good and thorough a job of describing the process as is done here. Keep in mind that the needs of a typical web user is not necessarily the same as, for example, a charity that has been conducting high-risk activities in a way that raises significant compliance issues. For those charities, they may find the hundreds of detailed letters on our website to also be helpful. These CRA letters often go into topics in great depth and give you a good idea of CRA’s view on certain topics. I certainly think that it would be better if CRA did provide much more guidance – even if it is just in draft or consultative form as many charities are not caught up in some of the debates circulating around Ottawa and downtown Toronto and they just want to know what they can do without violating the ITA.
• there were some suggestions that the “Leads intake officers” should be provided greater training in assessing leads relating to charities. I am not sure if the Leads intake officers are even part of the Charities Directorate but I think they are just some people at CRA who try to forward leads to different departments and if a lead relates to a registered charity they would typically forward it to the Charities Directorate for further review. Many leads provide little information and they may not be helpful but they are reviewed by the Charities Directorate as to whether they will follow up further. It would be nice to know how many “leads” the Charities Directorate receives and about how many charities. My guess is very few leads actually lead to an audit.

The Taxpayers’ Ombudsperson received numerous different comments from groups that had gone through audit (my emphasis and comments in brackets):

What we heard from organizations

When we met with organizations, they expressed the following:

• The CRA uses unreliable public information to inform its audits. Some said that the CRA relied on one-sided media outlets. [This is probably accurate. Some media outlets have an axe to grind or are one-sided, etc. Sometimes they cover charities and sometimes their coverage is inaccurate to say the least. But because an outlet covers a charity unfairly does not mean the charity is complying with the ITA. Think of all of the coverage of WE Charity. Some was excellent, some was ok and some was horrible – but it does not mean that WE Charity and the Federal government’s relationship with WE Charity was not problematic. Also, when it comes to certain issues that relate to terrorism, CRA is not going to disclose confidential sources, etc., so they sometimes just put links to some of these websites – this does not mean that CRA is saying that the website and its coverage is accurate or fair – just that this is an example of some of the allegations that are out there in the public domain.]
• Auditors would not let interviewees record interviews, and some charities found the information that the auditor had documented had been interpreted differently than what the interviewee had provided to the auditor verbally. [This cuts both ways. Do you really want to have CRA record a lengthy meeting with you? I encourage charities when meeting with CRA to take detailed notes. Sometimes the CRA officer may make a comment about a problem and making a note of that that can be helpful to improving compliance. Often the CRA letters later will not include every issue that has been discovered but those letters tend to focus on larger or more clear-cut issues. CRA officers in the midst of an audit are not always correct in every observation and that is why audits have a hierarchy and other people review the information as well. Charities have opportunities to respond to any CRA allegations that they don’t agree with and sometimes CRA will use that information and drop the allegation or modify the information in their subsequent letter.]
• CRA decisions are sound. [This is correct – when CRA revokes a charity they usually have 10 or 20 different reasons for the revocation. From a legal perspective, they only need one. Not 10 or 20. It is possible that one or two or three of the reasons are not accurate or complete. I know that CRA often misses many compliance issues when they audit charities. After all they are just looking at a sampling of information to see if there are concerns. CRA audits are not a forensic investigation. CRA has certain resources, and they have to be careful that those taxpayer resources are well spent. All because every matter brought up by CRA is not complete or accurate does not mean that the revocation lacks validity. My main criticism of CRA is they allow certain charities with aggressive legal counsel to delay the revocation, sometimes for a decade or longer after CRA is aware of the problem. That is not fair to donors and the public.]
• Audits can last for years and feel like a never-ending process. [This is correct. If you want the audit to last for years, you might be able to drag it on in a number of different ways including perhaps hiring counsel who can help the charity achieve that. I have seen charities spend over a million dollars on an audit. That was just the out-of-pocket legal fees, not the staff time which was immense. I have had complicated audits sometimes with long CRA letters dealing with contentious issues such as political activities that were resolved in a matter of weeks. It takes two to tango as they say.]
• Auditors go beyond checking books and records, and in some cases it feels like they are trying to find something, no matter how small, to pin on the charity. [Who says that CRA is supposed to only check “books and records”? That is only one of about 20 top CRA concerns. Different people have different ideas about small. Is 50k to a terrorist organization a big deal? Is a 200k loan to a related person a big deal? Is issuing 2.5m in receipts that are not appropriate a big deal? Some people seem to almost have never seen any reason that CRA should revoke a charity.]
• Certain charities are being treated more severely and differently at certain points in the audit process. Some said that they know there are charities that only receive a compliance agreement while there are others whose status is revoked for similar non-compliance. [There is some truth to this. I tell my clients, except in the case of very significant non-compliance say issuing tens of millions of dollars in receipts generally as CRA takes an “education first” approach even if there is serious non-compliance if the charity shows a genuine desire to change their way of operations, admit they made mistakes, etc., then one could get a compliance agreement or even an educational letter. But please do yourselves a favour and look at some of the letters written by officers or advisors to charities in the past and ask whether they are admitting mistakes and seeming to indicate that they will operate in a more compliant fashion in the future? Often, they are questioning CRA’s authority to even raise issues. These letters appear to be extremely abrasive and rude at times. They are what some regulators call ‘ungovernable’ individuals or organizations. I don’t think I have ever heard CRA use that term – that is a term that other regulators use. If a registered charity is going to act in that way they, can expect to receive compliance action that is different than a group that sincerely wants to change and admits mistakes and has made lots of improvements even before CRA comes back with their first letter. Think for 10 minutes if you were a CRA officer dealing with a regulatory matter, how would you respond when a charity is spewing out utter nonsense, does not accept any responsibility for compliance problems or asserts that all of these problems are trivial or historic and of no importance? I tended, especially when I was younger, to take people at face value – if they said they want to change and they were committed to change I assumed that that was correct. After decades of dealing with charities and seeing some of them have a long list of items in a compliance agreement and some take care of them in weeks while others take years or never fix the compliance problem, I realize that CRA may be better at times in understanding the registered charities that will make a reasonable effort to be compliant and others who will not.]
• The CRA does not do enough to ensure compliance. Some feel the CRA takes a weak approach and allows egregious non-compliance to continue, putting Canadians at risk. [Yes, this is accurate. You can see numerous articles that I have written including my complaining about the small number of audits that the CRA conducts every year on registered charities.]
• The CRA employees they dealt with performed audits professionally and courteously. [I think this is correct. Even when some of the charities acted completely inappropriately during an audit, CRA still is professional and courteous.]
• Directors may only bring in legal representatives after the field audit has occurred, and this restriction can complicate the process. [I am not aware that this is the case. Generally there is no need to have legal counsel attend at the Charity’s office when CRA comes to view documents.  However, I don’t think CRA would forbid them from being there.  If the charity was not aware of its operations and only the legal counsel could answer the questions I think that might raise other regulatory concerns.]

There is a long discussion in the report on whether the Charities Directorate should first contact a director when there is an audit or instead the authorized representative. I think that there are arguments either way. I have found that when an authorized rep is contacted and the directors are less involved, the directors often are not aware of what is happening. I have seen charities sign compliance agreements, and when speaking to directors a few years later, they were not even aware of the existence of the compliance agreement! They told me that they were not aware that the ED had signed that document. That could create some serious liability issues for the charity. I think that CRA should perhaps do both – alert both a director and also an authorized representative if there is one appointed. I don’t think most charities are thinking about the authorized representative necessarily being the one dealing with an audit. The authorized rep is sometimes selected as someone who can communicate with CRA to ask some questions on the progress of an application or request, etc. Many of the authorized reps are no longer current and it is often difficult for charities to find out who are their authorized reps and cancel authorized reps. At least if a director is a director, you know that they are a director. An authorized rep may not have had anything to do with the charity in many years. The authorized rep may have had a falling out with the charity. I can see, however, why some authorized reps, especially if they are a paid consultant, may want to be the ones dealing with CRA but someone appointed in the past may not be the person that the board of directors would want to deal with the issue. The Taxpayers’ Ombudsperson has raised an interesting issue. But I think to move in this direction, CRA needs to have a better system with authorized reps. Specifically, I think that the CRA should send a confidential notice to any charity that has an authorized rep letting them know that these are the authorized reps and this is how you can add or cancel an authorized rep. If the system is going to be the broken system of authorized reps from ancient history, then it is going to create some potential problems.  Another option is that CRA give charities say one year to let them know if they wish to have authorized reps and any authorized rep that is over say two years old would just be cancelled.

There is also an interesting discussion of activity codes.

Charitable category codes and public data

We are mindful that the CRA makes significant efforts to collect data and report on it for many of its programs. However, it appears that with registered charities, the CRA has certain information but does not make full use of it. For example, at initial registration, the CRA analyzes the applicant’s purposes and activities, among other information, and assigns a category code and sub-category code. The codes reflect the most prevalent category of charitable purposes that the charity is furthering, but it also goes one step further. For example, for a charity that is advancing religion, the CRA may identify the religion that is being advanced, and for a charity that is advancing education, it can identify the method, such as research or teaching. If a charity changes its purposes or activities over time, its category code is not automatically updated; the CRA will only change the category code at the request of the organization or when an error occurs.

Again, this is interesting. Activity codes can be quite helpful for researchers and the public in analyzing different parts of the charity sector. There are about 252 different categories that a charity can fit into. If you look at our CharityData.ca website under “Advanced Charity Search” you can see on the left side that there are categories and when you pick a category sometimes a subcategory will appear. I would welcome an initiative by CRA to remind charities that these categories exist, what the charity is categorized as, and that the categorization can change if the charity requests it. In addition, the idea that many charities can be lumped into one bucket is challenging. I liked the old system that allowed charities to have up to three choices and to allocate between those three choices they picked. So, a charity could say that it was 50% health care, 30% poverty and 20% religious. I think that system would be more accurate than trying to lump some types of organizations into one categorization.

There is an interesting suggestion from the Taxpayers’ Ombudsperson:

The Standing Senate Committee on Human Rights asked the CRA questions to understand what information the CRA could collect. The CRA is provided with all of the information about a charity’s purposes when it is registered and sometimes throughout its existence. The CRA could consider using additional information, provided by the charity, to develop and maintain aggregated data that could be used to expand the type of information that is shared publicly.

This change would increase transparency and could help focus the Charities Directorate’s outreach efforts to educate the charitable sector on how to be compliant.

I think that this provides many interesting angles. For example, it would be good if the CRA, on its database, told the public whether a charity is incorporated and under which jurisdiction.  Also it would be very helpful to have a list of the charity’s current objects.  This would make it easier for the public to understand the charity and its governance. That is just one example. Also, maybe the CRA can link its Charities Directorate Charities Listing with the donation button on CanadaHelps – to allow people to facilitate donations to the charity. Also, perhaps CRA can include information on the social media accounts of a charity. Also, I am not sure when it will happen but CRA is now authorized to let the public know when a charity is late in filing its T3010. Perhaps, like some regulators when a charity is late, there could be a little notice that appears on the Charities Listing.

It is hard to criticize much in this report as there is some useful information. I think perhaps one shortcoming in the Taxpayers’ Ombudsperson report is not acknowledging that when groups participated in the consultation, etc., which was completely voluntary, that it is probably not a representative group of charities. First of all, the 90% of charities that have not been audited in the last five or 10 years probably did not have so many concerns or opinions. Charities that were revoked as a result of audit, I can only imagine, would almost never be happy with the audit results. And of course, to be clear the bad outcome has nothing to do with the charity and its compliance record and everything to do with some sort of bias by CRA or lack of knowledge of CRA! In other words, you can expect that the charities with the strongest opinions would be those who had significant compliance issues raised by CRA. It would be helpful for the Taxpayers’ Ombudsperson to be clear that those participating and providing input are not reflective of the charity sector.

I have often heard from charities that they were not happy that they were selected for audit but after going through the audit process, they learned a lot about the things they are doing correctly and incorrectly, and they now feel much more confident in knowing that their systems are working. There are probably many more charities who hold that opinion rather than those who had an Armageddon audit with revocation, etc. I am not sure if it is feasible, but it might be nice if all charities are asked a few questions at the end of an audit. It would need to be an independent organization from CRA doing this, and the information would need to be aggregated. Not sure that the confidentiality provisions of the ITA would allow for this at this point.

The Taxpayers’ Ombudsperson says that all charities have tremendous anxiety about a CRA audit. If that was the case, we would probably have far more clients retaining us for audits. In some cases, charities are rather nonchalant about audits and don’t even obtain legal counsel at all during the process. I don’t know if there any stats on how many lawyers are engaged in charity audits. While it appears to me that a Charities Directorate audit of a registered charity is a high-risk situation – but it seems to work out in most cases. I also see that charities sometimes can take a long time to respond to CRA and provide information. If they were so worried and anxious, they would prioritize obtaining the information and provide it to CRA.  In some cases, they rather request numerous extensions from CRA who typically will provide those extensions. Keep in mind that every extension makes the audit process longer. In fairness to charities, it appears that the Auditor General’s report on Global Affairs Canada and their bilateral development assistance shows lots of the same problems that some charities have with books and records!

As an aside, some charities rely exclusively on their accountant to assist them and that can be a big mistake. Although some of the issues in an audit relate to financial matters, often there are legal issues and it makes sense with any reasonably sized charity or reasonably complex operations that a lawyer is also engaged who is very familiar with the rules governing charities and has a philosophy of an audit that is consistent with the charity. For example, if you want to make a point with CRA and your goal is to be revoked so that you can appeal the revocation to make some point, we would probably not be great legal counsel as we don’t fight with CRA in court. Having appropriate advisors can, in some cases, make the audit go a lot smoother because a lot of the problems I see with charity audits are not mainly the charity making compliance mistakes but the charity not realizing that something they are doing is incorrect and they are arguing with CRA about it and burning up goodwill very quickly and showing to CRA quite conclusively that they don’t understand the obligations of a charity and they are not that interested in changing their approach.

The Taxpayers’ Ombudsperson is extremely fair in his very long report. I think the Taxpayers’ Ombudsperson perhaps focused perhaps too much on charities that were revoked and how it impacted them and not on other stakeholders of the charity sector. Here is an example:

Because an audit’s outcome can have severe consequences, audits are not something many would want to be subjected to. This is especially true for charities, whose ability to carry out many of their activities is heavily tied to the tax privileges that registered charitable status provides. Stakeholders we interviewed repeatedly expressed the anxiety, stress and sometimes frustration they experienced during the audit process, even when they perceived themselves to be compliant. Some were obviously exasperated and others displayed strong emotions in the course of the interviews.

Who are these stakeholders? What about donors who donated for years to a charity to find out that the charity was not what it was saying it was? What about volunteers who sacrificed time with family to help a charity because they thought it was doing wonderful work but they were not aware of what the charity was actually doing? What about charities that talk about helping beneficiaries but in some cases, there may be very few beneficiaries receiving any assistance? For example, if a charity consistently spends say 80% of its funds on fundraising and another 10% on admin, there really is not that much left to be used for “beneficiaries.” I remember one charity that was revoked that took in $200 million and, according to CRA, they determined after audit that only $2,000 actually went to charitable beneficiaries or charitable activities. By the way, the charity appealed the CRA decision and the courts sided with CRA. Not surprising. I am sure that the charity was furious with CRA for revoking them but I think the public would be upset with CRA (and the Dept of Finance which does not loosen the confidentiality provisions) if they knew more about the operations of certain charities and that CRA is aware of the problems with certain charities and how CRA is precluded from sharing that important information from the public because of the confidentiality provisions of the ITA. Canadians can be extremely generous – especially religious donors. They can also be extremely trusting. Some of them also become very upset and disillusioned with all charities after they have had one to two bad experiences with some “bad apple” charities. This then also makes the life of other charities much more complicated.

The Taxpayers’ Ombudsperson discusses revocations and notes that:

These consequences can put the affected charity in a precarious financial position and prevent it from being able to operate properly to support its beneficiaries. Some organizations we interviewed expressed how seriously their charity’s operations were affected after their registration status was revoked as a result of an audit.

This is sometimes accurate but not in all cases. I wonder if the Taxpayers’ Ombudsperson looked at say the last 100 charities revoked and the T3010 for those organizations. I think the Taxpayers’ Ombudsperson would find that some of them had almost no operations in the years prior to revocation. In other words, the charity had managed to easily drag out the audit and appeal process for many years, and in fact, the charity had ceased to have any significant financial transactions for years before the revocation. The public, of course, typically only finds out about the problems after revocation and is blissfully unaware of any issues before then. Many of those charities had their activities transferred to another charity, even in some cases with similar people involved. With the ineligible individual rules it makes it slightly harder to just bounce from one charity to another but it certainly has not stopped the practice. So yes, it can put some charities in a precarious financial position but it also has almost no impact on some other charities. If a for-profit company were to be non-compliant say with privacy or cyber security or accurate filings with a securities regulator – could that also not create a precarious financial position for the for-profit company? I would argue that the financial disclosure of many for-profit companies is far more accurate than the T3010s of many large charities. If you were to tell the public you had $2 billion in revenue and you only had $2 million in revenue, you would probably go to jail, at least in the US! One major charity for many years was saying it had $2 million in revenue but it had $2 billion in revenue. Oopsie. It was probably not deliberate but absolutely no consequences that we can see except I blogged about it and perhaps some people were embarrassed. I regularly find charities filing information that is completely inaccurate and few suffer the indignity of revocation.

The Taxpayers’ Ombudsperson also notes about revocations that:

Following the revocation of a charity’s registration, it will experience a significant drop in income or a loss of assets that they operate with, which will affect its ability to operate effectively. Consequently, populations who rely on the charity’s activities for their basic needs could find themselves in a precarious situation, which could affect their physical and mental health.

It is true that the beneficiaries could find themselves in a precarious situation but what typically happens is that another charity or charities gets more donations or other funding, and they are able to serve more beneficiaries and often they may do a better job. The Taxpayers’ Ombudsperson seems to be parroting some of the views of the charities that were revoked. Views that have been expressed in numerous court cases and in every case the judges have rejected this line of argument. Every year, the amount of donations to the charity sector has increased, and the size of the charity sector has grown (it is now over $300 billion per year) and charities and therefore able to help more people. Admittedly, there is more need, but what we don’t need is more non-compliant charities in the system. The only thing that I can take from this type of view is that perhaps we should remove the ability of CRA to revoke charities. After all, they don’t revoke that many charities anyway as a result of audit. Perhaps the next step would be for the public to have an even lower view of the trustworthiness of charities. I am not sure how much lower it can go if you look at some of the public opinion surveys. Then the next step is to eliminate the tax benefits for donating to charities. This argument is a slippery slope and the Taxpayers’ Ombudsperson should not be seemingly uncritically endorsing it.

If a charity is concerned about sustainability and serving their beneficiaries they should be mindful of good governance and compliance. If some charities put 1/10th of the effort into actually being compliant, rather than just complaining about every requirement that applies to charities, they would be much more compliant and have a lot fewer issues with CRA.

The Taxpayers’ Ombudsperson has some very nice things to say about religious charities. I think that many will quote some of those passages. Very beautiful. I will not quote them here. But perhaps the Taxpayers’ Ombudsperson should have asked why has CRA, and specifically the Minister who he reports to, prevented the Charities Directorate from releasing its guidance on advancing religion? Shouldn’t religious charities know what CRA thinks is appropriate for religious charities? Also, and more importantly, I don’t think one in today’s age can talk about the good work of religious groups without acknowledging the serious harm caused by some religious organizations. I mean matters such as residential schools but also Roman Catholic abuse that continues to this day. I will let others comment more on those particular paragraphs but I just wanted to point out that not everyone in Canada has such a glowing view of how wonderful organized religion is. These paragraph may not be noticed by many, but I am sure some will wonder about it.

Here are the general findings:

Our findings

Overall we heard that CRA auditors carried out audits professionally and courteously. We also found that most of the processes they follow are fair. However, much like with audit selection, we could only see part of the picture. While we could see the processes that inform an audit, we did not have access to how the CRA carries out an audit, how the screening team communicates their areas of concern, or how auditors address those concerns.

What we heard and found was not enough to provide us with a full picture of how the RAD and the Compliance Division carry out an audit. 

There is an interesting discussion about unconscious versus conscious bias and the Taxpayers’ Ombudsperson seems to suggest that all those criticizing CRA and alleging Islamophobia believe CRA only has unconscious bias. While the Taxpayers’ Ombudsperson did not find that there was unconscious bias, the Taxpayers’ Ombudsperson did suggest that CRA do more mandatory unconscious bias training as it is now voluntary and does not have high rates of attendance. I think that this is a good recommendation. In fact, probably more important than the Compliance Division and RAD doing such unconscious bias training, large foundations should probably have to do significant training on this. I am not sure otherwise how one can explain how almost no funds were given to Black and Indigenous groups by large foundations over the last decade or so. I don’t see any downside of more unconscious bias training for CRA and others in the sector.

Just to summarize while some academic and other groups have alleged the Charities Directorate is Islamophobic, the Taxpayers’ Ombudsperson reviewed a huge amount of information (presumably all the information that the others had access to and much more) and did not come to such a conclusion. The Taxpayers’ Ombudsperson notes what was reviewed:

Support that helped our examination

One of the last parts from the Taxpayers’ Ombudsperson is quite important:

The importance of the CRA’s role in eliminating terrorism financing and abuse

While we are aware of and understand the concerns that have been brought forward from some racialized communities, the importance of eliminating terrorism financing or abuse is also of critical importance. The international community must know that Canada can be relied on to do its part. In this regard, the CRA’s role is to protect the integrity of its charitable registration system by preventing the abuse of charities to finance terrorism.

We have been advised that due diligence is done to ensure that the CRA is addressing the current threats. However, we also understand the impact its actions can have on charities from racialized communities, as they could be more vulnerable to being abused.

Canadians, including racialized communities, as well as the CRA and charities share a common goal: to keep Canadians and communities around the world safe. The CRA does this by ensuring compliance in Canada’s charitable sector so that Canadians’ funds are not being used to finance terrorism. National security is an important mandate of the CRA; therefore, it must ensure compliance to maintain trust in the tax system. By carrying out appropriate compliance actions, the CRA can make sure not only that Canadians pay their fair share of taxes but also that charities are using their resources to carry out charitable purposes, while at the same time preventing charitable resources from being used for malicious actions.

There are two references to “antisemitism” in the report in one paragraph but no discussion of what it is and its importance, etc. Most importantly, there is no discussion about the much larger number of Jewish organizations that have been revoked by CRA than Muslim organizations. Specifically, we noted in a previous blog “We recently reviewed over 550 Canadian registered charities that were revoked by the Canada Revenue Agency as a result of a charity audit. These are revocations going back to 1992. We identified about 11 Muslim groups that have been revoked. We have also identified over 50 Jewish groups that have been revoked. For the record, we have not seen any indication that the Charities Directorate is antisemitic. You can obtain any of the letters from CRA. Many of the letters of revocation are available for free on our CanadianCharityLaw.ca website, and I would encourage people to read those letters and decide for themselves whether they think that the Canadian charity regulator has acted fairly. In some cases, those revocations are challenged in court and in those cases, you can read the actual court decisions.” I would be interested in understanding whether Muslim organizations were treated worse than other charities – either secular or religious. Unfortunately, the confidentiality provisions of the ITA, which I have been complaining about for over a decade, make it unlikely that the Taxpayers’ Ombudsperson will be able to look more closely at either Muslim charities or non-Muslim charities unless there are changes to the confidentiality provisions of the ITA.

I had hoped that the Taxpayers’ Ombudsperson would get to the bottom of these allegations. Perhaps there will be changes to the confidentiality provisions of the ITA and the mandate of the Taxpayers’ Ombudsperson and they can take another look. Certainly, this report will be important reading for anyone interested in CRA compliance and audits for registered charities.