Agency to probe CRA after complaints from Muslim charities

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The National Security and Intelligence Review Agency is launching a formal review of the Canada Revenue Agency after complaints that it unfairly targets Muslim charities.

Muslim organizations have long raised concerns over security reviews conducted by the CRA, which they say are based on systemic racism and Islamophobia.

John Davies, NSIRA’s executive director, has written to CRA Commissioner Bob Hamilton informing him of the decision. The letter says the work is aimed at CRA’s Review and Analysis Division (RAD).

The National Council of Canadian Muslims said Tuesday that the review is not enough and called for the immediate suspension of RAD.

Mr. Davies’s letter states: “The review focuses on the RAD program’s national security activities and decision-making relating to registered Canadian charities, to assess their reasonableness, necessity, and compliance with the law.”

NSIRA was created in 2019 as a new independent oversight body for Canada’s national-security and intelligence activities, replacing two previous entities.

The CRA’s RAD was singled out for criticism in a 2021 report by the International Civil Liberties Monitoring Group. It found that Muslim charities are overrepresented in the percentage that have had their status revoked by the CRA in connection with efforts to prevent terrorist financing.

The report described RAD’s work as highly secretive, with unclear data on its activities. It also said charity revocation letters related to a RAD review are often redacted for national-security reasons. While RAD is housed within the CRA, the report said the division works closely with the RCMP and the Canadian Security Intelligence Service.

That 2021 report specifically recommended a review by NSIRA to address concerns regarding inadequate accountability at the tax-collection agency.

“This lack of oversight not only allows RAD and the CRA to continue targeting Muslim charities, it also allows the CRA and its departments to act on intelligence that may be flawed, out of context, weak, politically motivated and/or out-dated,” the report said.

“It can also result in prejudiced decisions being taken against Muslim charities without accountability or external review. It is essential that this lack of independent accountability be addressed.”

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Similar findings were published in a 2021 report by the University of Toronto Institute of Islamic Studies and the National Council of Canadian Muslims (NCCM), called Under Layered Suspicion.

Prime Minister Justin Trudeau pledged that year at the national summit on Islamophobia that the CRA’s auditing practices of Muslim charities would be reviewed.

“There’s no question that there is work to be done within government to dismantle systemic racism and Islamophobia,” he said at the time. “Because from the Canada Revenue Agency to security agencies, institutions should support people, not target them. We hear that.”

National Revenue Minister Diane Lebouthillier had asked Taxpayers’ Ombudsperson François Boileau to look into the complaints. However Mr. Boileau went public late last year, warning that while his report was due in March, 2023, it will be incomplete because the CRA was declining to hand over key documents.

In an interview Tuesday, Mr. Boileau said he welcomes the NSIRA review and offered his office’s co-operation. He said his report will be released later this month, but the issues he raised earlier remain.

He said the CRA’s refusal to hand over key documents because of legislative and security constraints means his report will not be able to say definitively whether Muslim charities are being unfairly targeted.

“Perception is always valid, because it comes from their point of view. So it’s certainly valid that this is how they think they are being treated. Is it justified by facts? That’s something else. And that’s the answer which we weren’t able to provide,” he said. “I wish we could have.”

Sharmila Khare, director-general of the CRA’s charities directorate, told the Senate human-rights committee last year that the agency takes issues such as anti-racism very seriously.

“I do not believe there is structural bias targeting Muslim-led charities within the Canada Revenue Agency,” she told senators.

The Revenue Minister released a statement Tuesday in response to NSIRA’s review.

“We welcome the review launched by the National Security and Intelligence Review Agency and view it as an important next step that will complement the forthcoming publication of the Taxpayers’ Ombudsperson’s review,” she said.

“The Canada Revenue Agency will fully co-operate with NSIRA, as we seek to ensure that Muslim charities are treated fairly and that no equity-deserving organization is subject to bias.”

The minister said NSIRA will be able to examine documents and specific charity files that were not made available to the Ombudsperson “due to the restrictions of the Income Tax Act and other Acts that govern national security matters.”

The minister said the government is confident the NSIRA review will “offer a comprehensive and rigorous examination of the issues raised.”

Nadia Hasan, COO of NCCM and co-author of the council’s 2021 report, said in a statement that the council cannot accept another review as a solution to systemic racism at the CRA while the RAD remains operational.

“We have made it clear to all parties involved since day one that the Review and Analysis Division should be suspended pending a review of systemic racism and Islamophobia at the CRA,” she said.

“We have already waited for two years for an ill-conceived review where the Taxpayers’ Ombudsman was not given the access he needed to complete the review. Now we are expected to wait up to another two years as NSIRA completes its review of CRA’s unfair audit practices. We can no longer wait as these unfair practices continue,” she said.