Question Period Note: CHARITIES – COMBATTING TERRORISM

What is the role of the Charities Directorate’s Review and Analysis Division (RAD) in support of the government’s efforts to combat terrorism?

• The Canada Revenue Agency (CRA) is firmly dedicated to diversity, inclusion and anti-racism, aligning with its values of professionalism, integrity, respect and collaboration.

• The risk of terrorist abuse within the charitable sector is a real concern, and it has been recognized internationally that charities are at risk of terrorist abuse, given their unique characteristics.

• In partnership with other government agencies in Canada’s anti-money laundering and anti terrorist financing regime, the CRA contributes to a whole-of-government approach when it comes to combatting terrorism in support of national security.

• The Charities Directorate of the CRA reviews all registration applications, monitors registered charities, and conducts compliance activities to support the Government’s efforts to combat terrorism.

SUPPLEMENTARY RESPONSE
- The CRA pursues a risk-based compliance approach. It never selects charities for audit based on any particular faith or denomination.

• The CRA is committed to continuously improving its programs and providing ongoing training to educate its employees, including with respect to training on unconscious bias and empathy in service.

The Charities Directorate of the Canada Revenue Agency (CRA) is responsible for delivering the CRA’s mandate under the Anti-Terrorism Act, to prevent the abuse of registered charities for the financing of terrorism. This supports the Government’s commitment to implement the recommendations of the Financial Action Task Force for countering terrorism financing, and also contributes to Canada’s broader national security efforts to combat terrorism. Within the Charities Directorate, this role lies with the Review and Analysis Division (RAD).

The CRA’s national security mandate related to terrorist abuse is governed by the Income Tax Act and the Charities Registration (Security Information) Act (CRSIA).

In accordance with the Income Tax Act, the CRA can take administrative actions, such as sanctions and revocation, where it has identified non-compliance in relation to a registered charity, which includes non-compliance identified during audits undertaken to address risks of terrorist abuse. The CRSIA more specifically allows the CRA to deny registration or revoke the registration of a charity where partner intelligence has provided the Agency with reasonable grounds to believe the organization is supporting terrorism. This is accomplished through a certificate process, where the certificate is signed by both the Minister of National Revenue and Minister of Public Safety. A signed certificate also ensures that classified intelligence relied upon by the CRA is protected from disclosure in an otherwise transparent, appealable, and administrative process.

CRSIA, which was enacted in 2001, also served to enshrine Canada’s commitment to protecting the charitable sector from terrorist abuse, and to recognize the CRA’s use of classified partner information in assessing an organization's eligibility for obtaining or maintaining charitable registration.

To date, the CRA has not had to issue a certificate under CRSIA and has instead relied exclusively on the Income Tax Act to pursue non-compliance where risks of terrorist abuse were present.

It is also important to note that the role of the Charities Directorate is administrative in nature and does not include criminal investigations, nor does it involve the confirmation or validation that a criminal activity or offence has occurred. Ultimately the CRA may only address risks of terrorist financing abuse as they relate to potential non-compliance with the ITA. Law enforcement agencies, not the CRA, are responsible for investigating terrorism related offences, even those that may involve the abuse of a registered charity.

The CRA never selects registered charities for audit, nor does it apply policies or procedures differently, based on any particular faith or denomination. Rather, it uses a structured, risk-based planning process to ensure that only charities facing higher risks of non-compliance and terrorist abuse are audited.

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