This article expands upon research surrounding transgressional charities within the Canada to Israel charitable subsector. Juxtaposed against credible accusations of anti-Muslim bias within the Canada Revenue Agency’s (CRA) charitable enforcement sector, this article suggests significant financial loss to the Canadian economy (potentially exceeding $1 billion CDN) as a result of transgressional, charitable, activity within the subsector. This paper further considers the leniency with which the CRA addresses instances of transgressional activity, both from a case-by-case and endemic standpoint. Aligning with the general critiques of philanthrocapitalism, regulatory enforcement within the Canadian charitable sector appears to target frontline operations, despite ample evidence of financial complicity with many of Canada’s most sizeable private foundations.
Accusations of an anti-Muslim bias within the Canada Revenue Agency’s (CRA) oversight of the Canadian charity sector (Emon and Hasan 2021; McSorley 2021) have not been alleviated, due in no small part to the CRA’s refusal to divulge its own risk analysis and profiling methodologies to the Office of the Taxpayer’s Ombudsperson (Office of the Taxpayer’s Ombudsperson 2023); this, despite a request for departmental cooperation from the pertinent bureaucratic lead, the Minister of Revenue. Lending peripheral credibility to charges of anti-Muslim bias, the Canadian Department of Finance’s most recently updated, cross-sectoral, National Inherent Risk Assessment (NIRA) framework (Department of Finance 2023)—which outlines security protocols for the Canadian financial sector (including the charitable sector)—was found by the CRA’s own in-house panel of specialists, the Advisory Committee on the Charitable Sector (ACCS), to be overly emphatic on ties between Muslim-identified actors and money laundering and terror-financing activities (ACCS 2023).
Broadening their critique beyond the obvious harms to the Canadian Muslim community caused by drawing a “presumptive nexus” between Muslim identity and terror and financial crime, the ACCS warned that the NIRA’s underlying (il)logic posed a security risk to the overall Canadian financial sector due to glaring gaps in oversight that the report had obliquely illuminated: Over-regulating against Muslim-identified actors and Muslim-identified recipients, based on biased data, did not render the Canadian financial sector more “safe.” Rather, the resultant blind spot in oversight (read: anyone not identified as Muslim) risked enabling—if not inviting—widespread harm to the Canadian financial sector (Ibid.).
A core question that emerges is: In a climate of potentially skewed baseline data, regulator obstinacy, and understaffed oversight (Professional Institute of the Public Service of Canada (PIPSC) 2019, 2024), what role does Islamophobic-informed enforcement play in facilitating potential criminality within the broader Canadian charitable sector? In other words, who might be taking advantage of the CRA’s self-imposed enforcement blind spot, and how? Beyond the exclusion of Muslim-identified organizations from meaningful participation in the Canadian philanthropic sector, at stake are donor confidence in the Canadian philanthropic sector itself, the potential of significant losses to public sector finances, and the potential of unidentified, illicit, activity taking place within the Canadian charitable sector.
Two recent case studies have focused on the potential of illicit activity associated with charities moving donations to one of Canada’s most significant, international, endpoints, Israel (Howe and Sylvestre 2025; Howe 2024a). Historically the first or second place international recipient of Canadian charity, in 2023 (the most up to date year of tax filing) Canadian charities moved over $271 million CDN directly into the hands of Israeli intermediaries (CRA 2024a), with another roughly estimated $100 million CDN heading to Israeli qualified donees, such as universities (Blumberg 2024). (more...)
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