The Canada Revenue Agency could not always justify why it audited certain charities for potential terrorism links, raising the possibility that its decisions “are driven by bias and discrimination,” one of the country’s intelligence watchdogs concluded after a lengthy investigation.
The report from the National Security and Intelligence Review Agency (NSIRA), released to CBC News Thursday through an access to information request, was triggered by years of allegations that the CRA’s Review and Analysis Division (RAD) unfairly targets Muslim charities due to bias and Islamophobia.
The division is tasked with making sure registered charities aren’t being used to finance terrorism, whether wittingly or not.
The NSIRA review raises serious concerns about how the division decides who to audit.
Investigators found that a lack of rigour in RAD’s processes led the division “to audit a number of charities that did not present with credible risks of terrorist abuse … despite the CRA’s public claims that only those charities at the highest risk of terrorist abuse are subject to RAD audits.”
The report said that “in this context, it becomes more difficult for RAD to justify its decisions to audit.”
The reviewers warned that those decisions put the CRA at risk of violating the Canadian Charter of Rights and Freedoms.
Of all charities whose audits were completed by RAD between 2009 and 2022, 67 per cent were discernibly Islamic and 19 per cent were Sikh, according to the report.
NSIRA said the CRA does not collect the demographic data “necessary to refute or substantiate claims of discrimination under the Charter.”
‘Risks of bias and discrimination’
The CRA unit decides what charities to review based on leads it receives or identifies that may suggest the risk of terrorist abuse via the media, information from security and intelligence partners, public tips or referrals from other areas within the CRA.
It’s then the unit’s job to assess the lead and decide to proceed with an additional review of a charity’s terrorism-related risks via a “comprehensive assessment.”
That can trigger a number of possible outcomes: a recommendation for RAD audit, a referral to Compliance Division, a decision to continue monitoring or a decision to discontinue monitoring.
Throughout the report, the watchdog stressed that RAD’s mandate is to protect the charitable sector against exploitation by terrorist actors and its scrutiny of charities may be justified.
“However, this is only true insofar as RAD maintains strict attention on those charities that are credibly at risk of terrorist abuse, using rigorous methodologies and practices,” it said.
“This has not universally been the case.”
NSIRA’s team said it was unable to determine in many cases when, or on what basis, RAD decided to proceed with its audits.
The watchdog said while it could not definitely rule, based on the available records, whether the analysis division’s activities met the legal threshold of discrimination under the Charter, the CRA’s processes “introduced risks of bias and discrimination.”
Tim McSorley, the national co-ordinator of the International Civil Liberties Monitoring Group, said the CRA’s counter-terrorism measures have largely operated in the shadows since the post-9/11 years until now.
“This finally sheds the light on those concerns and really points to the fact that these systemic issues of biases and discrimination persist across government departments,” he said in an interview.
“It points to clear instances where the CRA has relied on either dated information, guilt-by-associations that are unsubstantiated and by criteria that are so overly broad that it could really include almost any Muslim charity in Canada.”
CRA says it’s already making changes
NSIRA made six recommendations including that CRA collect and use demographic data to ensure that its treatment of charities is free from discrimination and develop an evidence-based method of validating the risk indicators that it relies on to justify scrutiny of a charity for terrorism-related concerns.
The Muslim Association of Canada (MAC), which has been vocal about its audit experience, said the NSIRA report confirms what the community has been saying all along.
“The CRA’s Review and Analysis Division (RAD) targeted Muslim charities through processes marked by bias and discrimination,” said spokesperson Sharaf Sharafeldin.
“MAC endured a seven-year audit with no terrorism financing concerns ever found, showing how disproportionate and unjustified these audits have been.”
The CRA said it accepts most of NSIRA’s recommendations and has already taken steps to bolster RAD’s processes and oversight.
“The review resulted in various recommendations for the CRA to strengthen controls in the way it oversees the charity audit process to better demonstrate impartiality and consistency in decision-making,” wrote CRA Commissioner Bob Hamilton in a statement, while adding the agency “has an important role in supporting the Government of Canada’s counter-terrorism efforts.”
He wrote that “the CRA remains committed to transparency and fairness in its charities audit program.”
The National Council of Canadian Muslims wants the government to go further.
Spokesperson Steven Zhou said the RAD is “broken,” “unaccountable” and beyond saving.
“We believe it’s time to dismantle the RAD and to implement real CRA oversight in budget 2025,” he said.
“It’s a division that at its core cannot even live up to its own expectations and its own standards because it doesn’t keep enough records to prove that it hasn’t made any Charter-related violations of the rights of Muslim Canadians.”
