How one Muslim charity is fighting back against Canada’s targeted audits
After Muslim charities faced two decades of systemic targeting at the hands of the Canadian Revenue Agency (Cra), including audits and being shut down, one charity has launched a legal defence that has caught the attention of the entire country.
The Muslim Association of Canada (Mac), one of the largest Muslim organisations in the country that boasts more than a dozen chapters, filed a legal challenge against Cra in the Ontario Superior Court of Justice in April 2022.
The legal fight, in which Mac is calling for a Cra audit to be halted, is the culmination of years of the Muslim community being subject to unwarranted targeting and discrimination without Mac having the ability or know-how to defend themselves, said Nabil Sultan, Mac's director of communications and community engagement.
What had led to a chilling effect in the community has now become a story of resilience for Canada's Muslim community. For years, Cra's targeting of Muslim charities led to fear amongst Canada's Muslims, prompting a drop in support and donations to these Muslim organisations, experts and practitioners in the charity sector previously told MEE.
However, Mac's recently launched legal challenge has now received the support of the Muslim community as well as other civil society groups from outside the faith group.
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Now with the Muslim community larger in size, more established, and having learned a myriad of lessons following the post 9/11 targeting of the community, it is ready to fight back in the courts, Sultan told Middle East Eye.
"It's really the story of the community going from being a small, inadequately integrated, and post-9/11 highly visible and targeted community to becoming a much more established community," Faisal Bhaba, an associate professor at Osgoode Hall Law School in Toronto, Canada, told MEE.
"With professionals, professional class and experts in fields that can actually contribute to structural change, it forced the government to actually take it seriously and consider doing something about it."
The audit
In 2015, Mac received a notice from Cra that it would be audited. Audits are a routine procedure in the charity sector, so the organisation did not have any concerns about it.
"When we initially got the call for an audit, we welcomed it. Just like you do your taxes every year, it's part of the system and process with the government," Sultan said.
'The community certainly went through an evolution'
- Nabil Sultan, Muslim Association of Canada
"At the time, we were not aware of the systemic discrimination within the audit process."
However, very soon that discrimination would become clear.
Over a span of 13 months, Cra had searched hundreds of desks and closets, downloaded over a million financial transactions and almost 200 gigabytes of email data and almost 500,000 emails.
"As soon as the audit began, it became very clear that this was not a regular audit of a charity and there was something much more sinister happening."
And more than seven years later, the audit is still taking place.
It was not until well into the audit process that Mac realised it was being conducted by Cra's Review and Analysis Division (Rad) - a secretive arm of the agency tasked to sniff out terrorism financing in the charity sector in the aftermath of the 9/11 attacks in the US. Experts say it tended to have an acute focus on Muslim charities.
The organisation, according to Sultan, was never told that it was Rad leading the audit. It was only through an investigation by Mac's lawyers that they were able to figure this out.
The audit's conclusions flagged a number of concerns about the charity. It said it was concerned about the organisation's acquiring of land and real estate, the organising of Eid festivals, and it also specified several unsolicited emails Mac received from foreign groups which Mac did not respond to.
"In the particular case of the Muslim Association of Canada, they basically say the money you spent on Eid festivals, this is not charitable. I want to see them do the same thing to churches, synagogues and temples," said Faisal Kutty, a lawyer and associate professor at Southwestern Law School who has advised dozens of Muslim charities in Canada.
"The standards are being applied in an unfair way," Kutty told MEE. "It sounds very ridiculous because what do those organisations in other communities do? They do the same thing."
The Muslim charity received an Administrative Fairness Letter (AFL), a letter Cra sends out to charities explaining why it may not qualify for charitable status. When looking at the sources used in the AFL to justify their reasoning, the cited experts included known Islamophobic and far-right experts who perpetuate anti-Muslim sentiment.
Mac's story is not unique. There has been extensive reporting in recent years about the Cra's targeting of Muslim charities.
MEE previously looked at 63 charities that had received a Notice of Intention to Revoke (NITR) between 2015 and 2019 and found that while 60 percent of the organisations were given a chance to repeal their revocations, all the Muslim charities it reviewed during that period were not given the same chance.
However, at the time, much of this was not known, as the Muslim charities that were targeted had largely kept the issue to themselves out of fear that there could be further reprisals or consequences.
"Much of the reality that existed in terms of discrimination was hidden, it was not publicly known during those earlier years," said Sultan.
Rather than waiting for the results of the audit, which could lead to a NITR from Cra, Sultan and the rest of Mac's leadership decided to fight against the entire agency's bookkeeping process.
The fight back
In April 2022, Mac submitted a filing with the Ontario Superior Court of Justice in Canada, and over the next several months it went through a number of court hearings discussing the Muslim charity's legal case.
Mac argues in its challenge that Cra's audit infringes on several sections of Canada's Charter of Rights and Freedoms, including the freedom of religion, expression, and association.
The Canadian government has asked for the case to be dismissed, arguing that Cra's selection of Mac for an audit and its probe do not infringe upon the Charter's rights.
In a recent hearing this past April, the court judge said he would issue a ruling within several months.
If the court ends up ruling in favour of Mac, then it could have a major impact on the way in which Cra conducts its audits of charities, particularly Muslim charities. It could also lead to greater scrutiny of the agency's practices when it comes to how it deals with Muslim organisations and possibly prompt other charities to challenge audits or revocation notices.
Prime Minister Justin Trudeau has already acknowledged the prevalence of Islamophobia in the auditing of charities, and his government has made attempts to look into complaints made against Cra. In March, the National Security and Intelligence Review Agency (NSIRA), an independent government watchdog, announced its intention to probe Cra's review and analysis division.
"Sunlight is always important to disinfect. Whatever the outcome of this is at the end of the day, I think it's gonna maybe expose some of these issues," said Kutty.
It is unclear what the end result of the court case will be, but regardless of the outcome, the charity has now stalwart support from inside and outside the Muslim community.
More than 130 groups, both Muslim and non-Muslims, signed a letter calling for a moratorium on Cra's audits of Muslim charities.
"We were very encouraged by the fact that the broader charitable sector also came out in support of Mac and called on the government to address systemic Islamophobia within Cra," said Sultan.
The recent court hearings have also been attended by two hundred members of the Canadian Muslim community. There were so many in attendance that the court had to bring in extra chairs due to the influx of attendees, according to Sultan.
"The community certainly went through an evolution and currently is in a very different state than it was 20 years ago, definitely after September 2001," he said.
"It was within the context of that spirit and that developing resolve within the community that Mac felt confident about taking on this challenge. Because we really did feel that the Muslim community was on the same page and was not going to continue to accept discrimination without a fight."
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