Ombudsperson Final Update – Charity Begins with Fairness

On July 22, 2021, at the National Summit on Islamophobia, the government of Canada heard from members of the Muslim community about their experiences, including the sometimes-deadly impact of hate-fuelled violence. The summit provided Muslim communities with the opportunity to “identify concrete ways to enhance federal efforts to combat Islamophobia.” Some of the recommendations made called for reform at the Canada Revenue Agency (CRA), specifically at the Review and Analysis Division (RAD).

The Honourable Diane Lebouthillier, then‑Minister of National Revenue, was one of the speakers at the summit. During her speech, she acknowledged that the CRA could do better and explained that she would ask the Taxpayers’ Ombudsperson to conduct a systemic study addressing the concerns expressed by Muslim-led charities. In a letter to the Taxpayers’ Ombudsperson in August 2021, the Minister set clear expectations on what she wanted him to examine. She asked that the Ombudsperson carry out a study of the concerns raised by Muslim-led charities, paying particular attention to:

1. the selection of files for audit by the RAD
2. the quality of services provided to organizations that are audited by the RAD
3. the efforts made by the CRA to make its employees aware of the unconscious biases that they could foster and that would help perpetuate discriminatory behaviour toward charities run by racialized communities

She also asked the Ombudsperson to:

• meet with charities led by racialized communities
• clarify the CRA’s role and responsibilities in relation to the other stakeholders involved in protecting national security, all while ensuring that a fair and impartial service is offered to Canadians

On August 5, 2021, the Ombudsperson opened the examination. In February 2022, we announced that this examination would focus on the fairness of the audit process for charities as a whole and not on a specific demographic or faith-based or cultural group. This approach would allow us to examine fairness, from how a charity is selected for an audit to how an audit is carried out, as well as the options that are available following an audit if a charity disagrees with the CRA’s compliance outcome. That said, because of the vast amount of material covering the audit process for charities, we focused our attention on specific areas of concern that were expressed by members of the Muslim community and other racialized groups.

This examination focused on the CRA’s policies, procedures and guidance that were used between April 1, 2017, and March 31, 2021, along with the charities that had experiences with the audit process during this time. This allowed us to examine the CRA’s current practices, identify any opportunities to improve the services it provides, and understand the previous information that may have guided its current processes.

Unfortunately, throughout our examination we encountered legislative and administrative obstacles which prevented us from having the information we needed to conduct a comprehensive examination. As such, what we heard and found was not enough to provide us with a full picture of how the RAD and the Compliance Division select charities for audit or these divisions carry out an audit.  

Despite the obstacles we faced during our examination, we were able to explore the third issue from the Minister’s request regarding unconscious bias.

Although CRA employees we interviewed indicated that they felt the CRA provides exemplary training that was suitable for their duties, our analysis found that much of the internal CRA training sessions on unconscious bias did not focus on decision making. We also heard there is less formal internal “training” by way of review functions, which assist employees in questioning assumptions and identifying speculative statements and personal biases.

We found that the unconscious bias training available was largely voluntary and that the registration and completion numbers for both the Compliance Division and the RAD indicated that employee engagement in CRA-level training could improve. The CRA also indicated that mandatory unconscious bias training, as proposed in its anti-racism strategy, is beneficial for reducing the potential manifestation of racism and profiling in its selection of charities for audit.

We also found that there was a stigma associated with employees expressing that they have known biases. This could explain why employees we interviewed said they had none. We believe that destigmatizing unconscious bias through open communication or other methods will help to make efforts to address unconscious bias at the CRA more effective.

In the Minister’s request to open this examination, she asked us to clarify the CRA’s role and responsibilities in relation to the other stakeholders involved in protecting national security, all while ensuring that a fair and impartial service is offered to Canadians.

While we are aware of and understand the concerns that have been brought forward from some racialized communities, the importance of eliminating terrorism financing or abuse also is of critical importance. The international community must know that Canada can be relied on to do its part. In this regard, the CRA’s role is to protect the integrity of its charitable registration system by preventing the abuse of charities to finance terrorism.

We have been advised that due diligence is done to ensure that the CRA is addressing the current threats. However, we also understand the impact its actions can have on charities from racialized communities, as they could be more vulnerable to being abused. 

We made one recommendation in this report, which the CRA agreed with. The CRA created an action plan to address our recommendation when the report was published in 2023. It also provided an update to this action plan in 2024. However, one item of the action plan remains ongoing to date. 

The Taxpayers’ Ombudsperson recommended to the Minister of National Revenue that the CRA create an unconscious bias training course for CRA employees of the Charities Directorate, focus the training on those involved in the audit process, and make the course mandatory for all employees involved in the audit process, including decision makers.

In its response, the CRA agreed with the recommendation but it presented what it had already put in place in terms of training for its employees regarding their participation in courses and learning events on the subject of diversity, inclusion and bias. Moreover, in order to continue developing and promoting a culture of respect, empathy, diversity and inclusion within its work, the CRA established short, medium, and long-term deliverables in its action plan. The CRA indicated that the items in the short term and medium term deliverables are complete. 

Short-term deliverables

Even though we did not specifically recommend this, we acknowledge the CRA’s efforts to take immediate agency-wide actions by adding a mandatory unconscious bias training to the 2023–2024 performance agreement for all indeterminate CRA employees and offering the training to term employees as well on a voluntary basis. However, thousands of CRA’s employees are temporary, and it is equally  important for these employees to understand unconscious bias. Therefore, the CRA should consider providing unconscious bias training to all of its employees, regardless of the length of which they have been hired.

As for the actions specific to the Charities Directorate, we note that the CRA made the course, "HQ1257-000 Unconscious Bias: Building tools to navigate the mind," mandatory for all employees and decision makers involved in the charity audit process. However, this was a preexisting course, and our recommendation focused on creating an unconscious bias training course for CRA employees of the Charities Directorate.

In our examination, we identified that the course’s value was contextually limited since the content focuses on employee–employee relationships, rather than on how employees can address unconscious bias in decision making. Mainly, the course focuses on interpersonal workplace interactions and teaches participants how to recognize, identify and mitigate some of their own unconscious biases to better foster a respectful and inclusive workplace.

While the CRA indicated it updated all Charities Directorate training products, when appropriate, to include information on unconscious bias, this action, while likely beneficial, did not address our recommendation. 

Medium term deliverables

We acknowledge the expansion of the requirement to complete the course “HQ1257-000 Unconscious Bias: Building tools to navigate the mind” to all Charities Directorate employees.

The CRA indicated in its action plan: 

While we recommended an unconscious bias training course be created, the CRA has created a new mandatory training suite tailored to Charities Directorate employees. The suite draws on existing course offerings at the CRA, the Canada School of Public Service (CSPS), other Government Departments and external providers, and also includes new scenario-based content specifically focused on identifying and mitigating unconscious bias in decision-making in the Charities Directorate.

The CRA also indicated that it is developing further customized training solutions to supplement the required training suite.

Therefore, we have concluded that the CRA’s medium-term action plan did address the spirit of our recommendation.

Long-term deliverables

The CRA confirmed the completion of some items on its long-term deliverables action plan. For example:

Based on the information we examined related to unconscious bias training at the CRA, we found several areas that could be improved. For example, we found that much of the internal CRA training sessions on unconscious bias did not focus on decision making and that the available training was largely voluntary.

Following our recommendation, the CRA is taking steps to increase its employees participation in courses and learning events on the subject of diversity, inclusion and bias. The action plan also demonstrates the CRA’s willingness to create awareness and provide educational opportunities that increase both management and employee knowledge on topics such as unconscious bias and inclusiveness.

Even though the CRA’s action plan did not address our recommendation, we believe the CRA is taking significant steps toward raising awareness of unconscious bias with its employees. The implementation of the CRA’s action plan shows that it has sufficiently addressed the spirit of the recommendation in this report.