Federal review confirms over-representation of Muslim charities in CRA anti-terrorism audits
Why It Matters
The Canadian Revenue Agency’s Review and Analysis Division is “responsible for delivering the Agency’s mandate under the Anti-Terrorism Act to prevent the abuse of registered charities for the financing of terrorism.” However, in the past few years, Muslim charities have raised concerns about the Division’s audits and revocations by the CRA.
Canada’s Muslim organizations have welcomed a review by the National Security and Intelligence Review Agency (NSIRA) that has found a disproportionate representation of Muslim charities are being audited under the CRA’s anti-terrorism mandate.
The review was initiated in March 2023, “following serious concerns raised by Muslim-led charities about unfair treatment” by the CRA’s Review and Analysis Division (RAD), which has the mandate of “preventing the abuse of registered charities for the financing of terrorism.”
The 32-page report, released by the NSIRA under the Access to Information Act on Oct. 2, found that “of all charities whose audits were completed by RAD between 2009 and 2022, 67 per cent were discernibly Islamic and 19 per cent Sikh.”
“The review found that a lack of rigour in RAD’s processes led RAD to audit a number of charities that did not present with credible risks of terrorist abuse,” NSIRA wrote.
“This is despite the CRA’s public claims that only those charities at the highest risk of terrorist abuse are subject to RAD audits.
“In this context, it becomes more difficult for RAD to justify its decisions to audit with reference to its mandate to protect the charitable sector from terrorism-related concerns,” it added.
The NSIRA also found that the CRA’s RAD function meets its requirements to combat money laundering and terrorist financing.
The CRA has already responded to the recommendations made by the NSIRA, largely agreeing with them. Going forward, the CRA has committed to implementing an audit tracking and referral system and updating risk assessments.
However, the CRA disagreed with the recommendation that it collect more demographic data from charities to ensure its decisions are free from discrimination. The CRA disagreed because this is not considered to be “information that relates directly to an operating program.”
The NSIRA’s report redacted charities that underwent audits by RAD. However, Canadian-Muslim charities have responded to the outcome of the 30-month review.
The Muslim Association of Canada (MAC) welcomed the report, saying that it “affirms what we and many others have long raised regarding the CRA’s Review and Analysis Division (RAD) audits of Muslim charities.
“For years, Muslim charities have expressed concern that they were disproportionately targeted and subjected to processes that were unfair and harmful,” MAC wrote.
RAD audited MAC in a review that lasted more than seven years, culminating in the charity launching a Charter challenge before the Ontario Superior Court.
The International Civil Liberties Monitoring Group (ICLMG) released a report in 2021 on what it called “the CRA’s prejudiced audits,” in which it researched the unfair targeting and surveillance of Muslim charities under counter-terrorism initiatives.
The ICLMG also welcomed the report, adding that the government should consider “immediate suspension of RAD audits.”
The Canadian Muslim Public Affairs Council also called upon the Government of Canada to engage directly with Muslim charities and community groups “to restore confidence in the charitable sector’s regulatory framework.”
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