On March 7, 2016, the Standing Senate Committee on National Security and Defence (the “Committee”) met to examine and report on Canadian national security, as well as to discuss defence policies and practices concerning security threats facing Canada. Of note to charities and not-for-profits is that Cathy Hawara, Director General of the Charities Directorate of Canada Revenue Agency (“CRA”), and Alastair Bland, Director of the Review and Analysis Division of the Charities Directorate (collectively, the “CRA Directors”) were present to give evidence before the Committee.
The CRA Directors provided an update to the Committee concerning the risk of terrorist abuse of charities. They explained that the Review and Analysis Division of the Charities Directorate, which currently consists of 40 staff, was established in 2003 to focus on protecting the integrity of the charity registration system from the threat of terrorism and takes a “risk-based approach” to the detection of terrorist financing activities within the charitable sector. This is an administrative role and “[w]hile it cannot confirm or validate that terrorism as a criminal activity or offence has occurred, it can take steps to disrupt activities where there is a risk of terrorist abuse.” They also explained CRA’s information sharing authority, which, although not without limit, was recently broadened by the Security of Canada Information Sharing Act to include 16 government institutions.
With regard to the information sharing process, Ms. Hawara explained that the Act imposes two thresholds for the sharing of information related to national security. Specifically, “[y]ou need to either demonstrate that the information would be relevant to an investigation of a threat to the security of Canada under the CSIS Act [sic] or a terrorism-related offence. If we are satisfied that the information would meet that threshold, then we ask ourselves whether it would be relevant […] to CSIS’s or the RCMP’s mandate. If those thresholds are met, we could share that national security information with CSIS or the RCMP.”
Ms. Hawara also reported that there is a “reserve power, a sort of last resort” available to CRA under the Charity Registration (Security Information) Act, which can be used when the information that CRA needs to rely upon is “intelligence or secret information”. The Act allows for proceedings using a certificate process that is expedited with restricted procedural fairness protections and limited opportunity for judicial oversight. This certificate process is what Ms. Hawara described as a power of “last resort”, as opposed to the more common process with established administrative fairness protections that are a part of the revocation of charitable status under the Income Tax Act. Ms. Hawara explained that this enhanced power has not yet been used and the general practice of CRA is to “operate under the Income Tax Act and fully explain to the charity the grounds for revocation and provide them an opportunity to respond.”