CRA Compliance

Canadian charities are prohibited from providing support to terrorist activities or organizations associated with terrorism. This applies regardless of religious or secular affiliation, encompassing Christian, Muslim, Sikh, and Hindu charities. Any Canadian charity found to be supporting terrorism will face revocation and other related consequences. It is important to emphasize that revocation by the Canada Revenue Agency (CRA) does not imply any bias against specific religious groups.

It is crucial to note the existence of a list containing designated terrorist organizations and individuals involved in such activities. However, supporting any organization involved in terrorism, whether listed or not, is strictly prohibited. This prohibition is particularly significant for organizations operating in conflict-prone areas, ensuring that their resources are solely allocated for legitimate charitable purposes.

Canadian Charities are advised to consult CRA’s Checklist for charities on preventing terrorist exploitation. The issue of terrorism demands heightened attention in Canada. While there is considerable oversight of the charitable sector's involvement in terrorism through the Research and Analysis Division, non-charitable nonprofit organizations in Canada receive minimal scrutiny.

Furthermore, the confidentiality provisions within the Income Tax Act have come under scrutiny. This responsibility lies primarily with the Finance department. CRA has clarified that the confidentiality rules outlined in the Income Tax Act prohibit the public disclosure of organizations engaged in terrorist activities. This includes withholding information from parliamentarians and senators. Often, the public only becomes aware of such matters months, or even years, later.

There has been notable confusion regarding the amendments made to the Income Tax Act in June 2022. To clarify, Canadian charities are restricted from making contributions to foreign organizations unless they qualify as eligible recipients, such as foreign universities registered with CRA. The new grant-to-grantee regulations necessitate rigorous oversight of funds disbursed to foreign organizations. CRA has provided draft guidance on these regulations for review.

For most organizations operating internationally, it is likely that the direction and control rules, established for approximately three decades, will be the most practical approach due to their well-defined implementation procedures. Furthermore, it is imperative to be mindful of the new regulations introduced in June 2022 pertaining to implicit or explicit gifts.

For an up-to-date list of entities designated by Public Safety Canada, please consult the official sources, including the Acts passed by Parliament, the Canada Gazette, and the annual Statutes of Canada. Note that some entities may be known by different names, and there may be variations in spellings. Click on each entity's name for a detailed description, alternative names, spellings, and the date of inclusion on the list.