Statement from Canada’s Taxpayers’ Ombudsperson on the progress of the examination into the concerns expressed by charities about their experiences with the CRA
The Taxpayers’ Ombudsperson, François Boileau, issued the following statement today following his appearance on November 21, 2022 before the Senate Committee on Human Rights.
OTTAWA, November 22, 2022 - Following her participation in the National Summit on Islamophobia on July 22, 2021, the Minister of National Revenue, the Honourable Diane Lebouthillier, asked our Office to conduct a systemic review to investigate the concerns expressed by certain charities, run by Muslims about their treatment by the Canada Revenue Agency (CRA), and to engage other charities led by racialized communities about their experiences with the CRA.
The Minister specifically asked our Office to pay special attention to the concerns related to the selection of files for audit purposes by the CRA's Review and Analysis Division (RAD). She also asked us to observe the quality of the services provided to these organizations. Lastly, she asked our Office to analyze the CRA's efforts to make its employees aware of the unconscious bias that they could foster and that would help perpetuate discriminatory behaviour toward charities run by racialized communities.
As part of our investigation, we must, as an ombudsperson office, try to answer some of the following questions:
- How are charities selected for an audit?
- How are the audits conducted?
- Is the audit process equitable?
- Is the audit process understood and transparent?
- Is the appropriate information communicated to charities, including the CRA's concerns?
- Are audit decisions and compliance approaches made in a timely manner?
- Are the CRA's audit decisions and compliance approaches fair?
We are confident that we will be able to assess the existing policies and practices related to services. We believe that we will be able to provide objective answers to questions about the CRA's practices in terms of training employees against unconscious bias. With their consent, we will also be able to report the information collected by stakeholders, organizations and the CRA. That said, it will unfortunately be impossible for us to validate this information with what is in these organizations' files by conducting a comparative analysis.
We understand the overarching principles behind Section 241 of the Income Tax Act to protect the paramount importance of safeguarding taxpayers' information privacy. Therefore, we engaged with the CRA and the Department of Justice to explore if there were any viable alternate options, but ultimately we had to rely on a charity giving us consent to review their file. We tried to find, with them, new original avenues that would have allowed us to adequately answer all questions asked by the Minister as part of this review.
The CRA indicated that, due to the constraints set out in the Income Tax Act that it could not share certain parts of a charity's file, even if we obtained the charity's consent. In addition, it is the CRA's current practice not to disclose certain information, particularly with regard to risk assessment when selecting a charity for audit purposes. However, these seem to be crucial elements for us to be able to properly answer the questions submitted, particularly the question concerning the criteria for selecting files for audit purposes.
The CRA informed us that certain national security information is top secret and that it is communicated only on a need-to-know basis. Our review does not fall under this requirement. In addition, the CRA said that all third-party information in a file would also be redacted.
The role of an ombudsperson cannot be limited to listening to only one point of view, but rather to be able to listen to all the parties and then to have access to a real capacity for factual observations. This includes, among other things, the application, in this case, of the selection criteria chosen for an organization's file to be selected for audit. It may also include being able to conduct a comparative analysis of various files to give us the ability to detect trends, beyond the written rules such as directives, policies and procedures, to see if there is indeed more than smoke.
To be clear, some of the participants told us that they felt they had been unfairly selected for audit purposes. Some indicated that they sometimes felt intimidated, and many described the process as tedious. However, we cannot verify these alleged facts without having access to complete taxpayer files. I understand that it was not the Minister's intention to ask us to act outside the legislative framework currently in place, of course, but our role as ombudsperson is limited.
We also would like to confirm our understanding of the mandates and respective roles of a number of national security partner organizations with regard to national security and charity audits, and we asked the CRA questions in this regard. Our goal is to better understand the relationships between the various partners and the audit process.
Public expectations regarding this review are very high. One of the roles of an ombudsperson is to analyze on a factual basis of comparison. I find it important to be as transparent as possible with the Canadian public. Although the deadlines are extremely tight, we are working tirelessly to submit a report to the Minister in March 2023.
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