Are Canadian Charities Prohibited from Supporting Terrorism?

TL;DR: Yes. A Canadian registered charity that makes its resources available, directly or indirectly, to a listed terrorist entity or any group engaged in terrorist activity can lose its registration through a security certificate under section 4 of the Charities Registration (Security Information) Act. Under section 168(3) of the Income Tax Act, registration is revoked as soon as a Federal Court judge finds the certificate reasonable. The same conduct can also be a crime under Part II.1 of the Criminal Code, so the CRA expects every charity to assess its risk and document its controls.

If your charity sends money, goods or volunteers to partners in conflict-affected regions, these rules affect you most. They apply to every registered charity in Canada, religious or secular. In practice, the risk sits with boards that fund relief, education or faith-based work abroad through local partners, because that is where funds can be diverted without anyone in Canada noticing.

Six terms come up throughout this article:

• A listed entity is a group the federal government has named as a terrorist entity under section 83.05 of the Criminal Code.
• A terrorist group is any listed entity, or any unlisted group whose purposes or activities include carrying out terrorist activity.
• A security certificate is a document signed by two federal Ministers stating that a charity has supported terrorism.
• A grantee is a non-qualified donee that receives a grant from a charity, called a qualifying disbursement.
• Direction and control means the charity runs a foreign activity as its own, through an intermediary it supervises.
• Revocation tax is the tax a charity owes on its remaining assets after its registration is revoked.

Which laws stop a Canadian charity from supporting terrorism?

Three federal statutes work together. The Charities Registration (Security Information) Act (CRSIA) lets the Minister of Public Safety and the Minister of National Revenue sign a certificate against a charity or applicant that has made, or will make, resources available to a terrorist entity. Section 168(3) of the Income Tax Act then revokes the charity’s registration once a judge upholds the certificate. Separately, sections 83.02 to 83.04 of the Criminal Code make it an offence for anyone, including a charity and its directors, to provide, make available or use property for terrorist activity or for the benefit of a terrorist group.

Charity law adds a fourth layer. A purpose that is illegal or contrary to public policy cannot be charitable. 

Does the rule cover groups that are not on Canada’s terrorist list?

Yes. The CRSIA and the Criminal Code both reach unlisted groups engaged in terrorist activity, not just listed entities. The official list is a federal regulation published in the Canada Gazette, Part II, and on Public Safety Canada’s website. Many entities operate under several names, so screen every known alias. The CRA’s checklist also points charities to other lists, such as the European Union terrorist list.

How does a charity lose its registration over terrorism concerns?

A charity can lose its registration through two routes, and its people can also face criminal charges. The table compares them.

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Under the certificate route, the charity is served with the certificate and the matter goes to the Federal Court at least seven days later. The judge may consider security intelligence that the charity never sees in full. A revoked charity can keep operating as an unregistered organization, but it can no longer issue tax receipts, and it must deal with the revocation tax on its assets.

Can a charity lose registration if a partner diverted funds without its knowledge?

Yes, it can. The CRSIA covers resources made available “directly or indirectly,” and the Act contains no express due-diligence defence. A House of Commons subcommittee once recommended adding one. Your strongest protection is a written record showing that your board assessed the risk, screened the partner and followed the money. 

What controls does the CRA expect from a charity working abroad?

The CRA’s Checklist: How to protect your charity against terrorist abuse, updated in August 2024, sets out what the CRA expects. Work through it with your board at least once a year. In practice, it comes down to these steps:

1. Assess which of your programs, regions and partners carry terrorist-abuse risk.
2. Screen partners, key staff and invited speakers against the listed entities and their aliases.
3. Put written agreements in place that set out how funds are used, with staged payments and reporting.
4. Keep books and records in Canada that show where every dollar went.
5. Train directors, staff and volunteers to recognize warning signs.
6. Record each risk decision in board minutes.

How you fund a foreign partner also changes your obligations. Since June 2022, a charity can make grants to grantees under the CRA’s final guidance, CG-032, Registered charities making grants to non-qualified donees, released December 19, 2023. Grants require accountability measures and must be reported on Form T1441 with your T3010. Separately, ITA s. 168(1)(f) bars your charity from accepting a donation that is expressly or implicitly conditional on passing it to a non-qualified donee. Direction and control remains available as the other route. For a full comparison, read our guide to the CRA grant regime and direction and control and our article on whether a Canadian charity may operate outside Canada.

Can a charity deliver aid in an area controlled by a terrorist group?

Sometimes, but only within a specific legal framework. In 2023, Parliament amended the Criminal Code to add an exception for certain humanitarian assistance and an authorization regime administered by Public Safety Canada. Public Safety published guidelines on this regime in June 2024. If your charity works in a place like Afghanistan, get legal advice before you send funds. The exception has conditions, and some activities need an authorization first.

How does the CRA’s Review and Analysis Division choose charities to audit?

The Review and Analysis Division (RAD), created in 2003, runs the CRA’s terrorism-risk audits. It acts on leads from security partners, media reports, public tips and other CRA units. In October 2025, the National Security and Intelligence Review Agency (NSIRA) reported that of 37 RAD audits completed between 2009 and 2022, 67% involved Islamic charities and 19% involved Sikh charities. NSIRA also found that RAD lacked an evidence-based method for validating its risk indicators. NSIRA could not conclude that the Charter had been breached, but it found that RAD’s processes created risks of bias.

The CRA agreed with most of NSIRA’s recommendations and disagreed with two. It committed to formally tracking audit referrals from the 2025–26 fiscal year and to piloting a risk-rating model by the end of 2026. Read the CRA’s response to the NSIRA report. For your board, the lesson is the same as above: documented controls are your best answer to an audit.

What changed in 2025 and 2026?

Three developments matter for charities working abroad.

• FATF evaluation: The Financial Action Task Force published its mutual evaluation of Canada on September 29, 2026. Recommendation 8 of that standard requires oversight of non-profits that is proportionate to actual risk.
• Cash donations: Bill C-2 proposed an offence for charities that accept cash donations of $10,000 or more. That measure was left out of Bill C-12, which took effect in March 2026, and the federal government has said it intends to proceed. Check the measure’s status before changing your policy.
• Modernization: The Spring Economic Update 2026 announced a review of the charitable framework, focused on administration and digital service.

Do these rules apply to non-profits that are not registered charities?

Partly. The CRSIA applies to registered charities and to applicants for registration, so a certificate can also block a new application. The Criminal Code financing offences apply to every person and organization in Canada, whether registered or not.

Frequently asked questions

Do the terrorism rules apply differently to religious charities?

No. The CRSIA, the ITA and the Criminal Code apply the same tests to every charity, whatever its faith or purpose.

Where can our charity check whether a partner is a listed terrorist entity?

Check Public Safety Canada’s list of currently listed entities, including all aliases. The CRA’s checklist also recommends checking other lists, such as the EU terrorist list.

Can a revoked charity keep operating?

Yes, as an unregistered organization. It cannot issue tax receipts, and under ITA s. 188(1) it owes revocation tax on its remaining assets unless those assets go to eligible donees within the required period.

Can our charity accept a $10,000 cash donation?

Currently, yes, subject to your own policy and record-keeping. Bill C-2 proposed a prohibition, so check its status before you accept large cash gifts, and encourage donors to use traceable payment methods.

Does making grants instead of using direction and control lower our terrorism risk?

No. Both routes carry diversion risk. CG-032 requires grant-making charities to assess risk and set accountability measures, and direction and control requires ongoing supervision.

What should our board do first if it suspects a partner has diverted funds?

Stop further transfers, preserve your records, and get legal advice the same week. Report suspected criminal activity to the police.

What should your board do next?

If your charity funds partners outside Canada, compare your partner agreements and screening records against the CRA checklist this quarter. To have a charity lawyer review your international program, book a free consultation with Dov Goldberg.