Random’ tax audits of Muslim charities provide cover for biased terrorism suspicions, report finds


Nadia Hasan, chief operating officer at National Council of Canadian Muslims, is co-author of a new report titled “Layered Suspicion” released on March 29.  STEVE RUSSELL / TORONTO STAR

When the Ottawa Islamic Centre and Assalam Mosque found its charitable status revoked in 2018, it was told it had promoted “hate and intolerance” by hosting four speakers who were found to have previously espoused dubious views elsewhere.

There was no record of what was said at the mosque, which the government found to be a violation of the Income Tax Act.

“The mere possibility that the views of the speakers … could have been expressed” warranted concern, wrote the Charities Directorate, a federal agency that sits within the Canada Revenue agency and oversees compliance with income tax laws. The fear was that the centre might be a hot spot for radicalized Muslims.

A new report titled “Layered Suspicion” released Monday studies three organizations that lost their charitable status to two key policies: anti-terrorism financing and anti-radicalization. The three are the Ottawa Islamic Centre and Assalam Mosque, the Islamic Shi’a Assembly of Canada and IRFAN-Canada.

The report examines how long-standing tropes of Muslims as the menacing outsiders who pose an imminent threat to society influence tax audits of Muslim-led charities. It looks at biases implicit in the audit, what interpretations auditors make and if there was bias in the selection of their evidence.

Authors Anver Emon, a University of Toronto law professor and director of its Institute of Islamic Studies, and Nadia Hasan, chief operating officer of the National Council of Canadian Muslims (NCCM), found that tax audits are often used as a cover for structural biases in policies related to financing terror and radicalization.

These policies operate in the shadows of an otherwise ordinary audit, the authors write, raising concerns about basic fairness, transparency and accountability.

Organizations are often told it’s a random audit. But for years, Hasan said, “we were hearing all kinds of grumblings about the kind of information auditors were asking that didn’t seem right. But nobody could put their finger to what was going on.”

The Ottawa Islamic Centre was created for the purpose of “advancing religion,” which is one of the categories that satisfies the requirement of charitable status. It served a largely Somali Muslim community. Canadian government focus on this community changed from humanitarianism to national security after 9/11, the authors write. Those fears are based on stories of a “small handful of young Somali-Canadians” recruited by al-Shabab extremists as foreign fighters, the report says.

The four speakers were considered to have what the government called “extreme ideas.” Extreme ideas, a nebulous concept based on the belief they can be transformed into violent activities, is key to Canada’s anti-radicalization strategy. It grants Public Safety agents discretionary authority and the power to determine what is extreme and what constitutes a threat to national security.

A BBC documentary reported one of those speakers, the American Abu Usamah at-Thahabi, saying in a Birmingham mosque, “No one loves the kafir (non-believers)” and that “I don’t agree with (Muslim terrorists) but at the same time they are closer to me than those criminals of the kufr (disbelief).”

Others were accused of homophobic and misogynistic attitudes; one of them was banned from multiple countries.

“Our point is even if they have conservative views whether we agree with them or not, they cannot become a pretext for radicalization concerns,” says Emon.

This approach was not applied equally across racial and religious groups, the report says.

“In 2019, pastors from Christ’s Forgiveness Ministries … were arrested in Toronto while preaching anti-gay ideas during Pride Week,” the report says. “At the date of writing this report, Christ’s Forgiveness Ministries remains registered as a charity.”

The report offers other examples: Canada Christian College is registered as a charity with the CRA despite its president Charles McVety’s open homophobia. If the Ottawa speaker was slammed by British broadcasting, McVety was castigated by the Canadian Broadcast Standards Council as “abusive.”

Journey Canada, accused of supporting practices of conversion therapy and Northern Youth Programs, which operated some of the last residential schools in Canada, and is accused of running programs in Northern Ontario that LGBTQ2 members claim are harmful to youth, also keep their status.

The other policy of note for the report is Canada’s anti-terrorism financing policy that involves 13 federal departments and agencies, eight of which receive funding totalling $70 million annually.

The CRA is one of those agencies.

The terrorist attacks of 9/11 and what the report calls “the exaggerated and generally debunked belief” that the wealthy Osama bin Laden was bankrolling al-Qaida brought global attention to the issue of terrorist financing.

In 2015, as part of a risk assessment review process, Canada named 10 groups that posed the greatest threat to terrorist financing.

Out of those, eight are Muslim or Arab including al-Qaida, Hamas, al-Shabab and Hezbollah. One is a vaguely named “Khalistani Extremist Groups” and another is “Remnants of the Liberation Tigers of Tamil Eelam.”

“What’s this risk-based assessment going to do?” Emon says, “It’s going to put the focus on Muslim charities in particular.”

The Islamic Shi’a Assembly’s troubles began in 2011 right after Stephen Harper was elected prime minister, the report says. The Charities Directorate first determined that the organization’s operations did not support “advancing religion” as its purpose. And if it wasn’t advancing religion then it deemed it to be supporting a political purpose.

Its audit began at a time of tense Canada-Iran relations, days after Harper declared it “probably the most significant threat in the world to global peace and security.” The directorate concluded the organization was a Canadian front for an Iranian-controlled global organization that had among its membership people from Hezbollah.

How did the organization run afoul of its “advancing religion” mandate? The audit report said it found the organization hosting Eid festivals for Ramadan two-and-a-half weeks after the recognized religious dates for Eid ul-Fitr. But there are no statutory holidays for Muslim festivals. And because they follow the lunar calendar, the festival sometimes falls mid-week. As with other non-Christian groups, Muslims have to decide whether to take time off work or school to attend religious services. It is therefore standard for organizations to schedule festivities on a weekend at a later date.

The decision “smacked of a protestant Christian bias that manifested as state protection and state oversight,” Emon says.

IRFAN-Canada or the International Relief Fund for the Afflicted and Needy (Canada) also ran afoul of the terrorism financing rules, but via a different route. Its mandate was “poverty relief” not advancing religion. Among regions it worked in was the West Bank and Gaza Strip and it was given charitable status in 1999.

But when Hamas won the parliamentary election in the Palestinian territories in 2006, it sent the world into a tailspin. Depending on a nation’s politics, the social wings and political wings of Hamas were either considered separate or they were collapsed. The report reproduces various arguments in Parliament during question period in the early to mid 2000s to show how “the Israeli-Palestinian conflict became a political battleground for domestic partisan feuds.”

By 2011 the directorate revoked IRFAN-Canada’s charitable status alleging direct links to Hamas. Any of its projects funded through a government ministry in Gaza were automatically deemed to support Hamas after 2006.

The report calls for an immediate suspension of the CRA’s Review and Analysis Division, the agency’s investigative unit of charities and terrorism funding and a review of Canada’s risk assessment model and strategy to combat extremism and radicalization. It seeks transparency from the Charities Directorate to let organizations know why they’re being audited.

It’s calling for the suspension of discretionary use of revocation powers in audits where counter-radicalization policies are involved.

Mustafa Farooq, chief executive officer of the National Council of Canadian Muslims, said these organizations have to constantly second-guess themselves. “If we invite this Imam do we have to search everything this Imam ever said so we don’t someday lose our charitable status? Will it matter if we hold an Eid celebration a week later. What happens when we’re trying to donate to an international cause domestically but that someday might be unpopular with the government?

“There is always this spectre haunting Muslims that animates and weaves its way through this report.”