Dr. Anver Emon co-authors reports on charitable sector

The Institute of Islamic Studies (IIS) is excited to share two new reports that came out of the Advisory Committee on Charitable Sectors (ACCS), of which Professor Anver Emon (Director, IIS) was a member from 2022 to 2024. The ACCS’ 4th report is publicly available at the Government of Canada website.

In his role as ACCS member, Professor Emon leveraged his research in Under Layered Suspicion to support expansive analyses of foundational issues that affect Canada’s charitable sector. Specifically, Emon chaired two working groups and for which he served as rapporteur for two research reports that ultimately informed key recommendations in the 4th ACCS report. One working group explored the definition of charity and charitable purposes, with an eye toward modernizing the legal landscape of charities regulation. The second working group adopted a charity-centric analysis of the Ministry of Finance’s 2023 National Inherent Risk Assessment (NIRA) on money laundering and terrorism financing.

Those research documents are available in English and French. For reasons of accessibility on Government of Canada websites they are only available upon request to the ACCS. The IIS is pleased to share those research reports here to support Canada’s diverse charitable sector.

Report #1 – Definition of charity and charitable purposes working group
This working group examined whether and to what extent the current approach to defining charitable purpose needs to be modified and modernized, whether through legislation or some other instrument. The current Canadian legal framework of charitable purpose relies on longstanding Common Law principles; comparative analysis of other Common Law countries shows an increasing turn to legislation that articulates updated ideas of public benefit and charitable purpose. Any change to the law on charities, however, raises constitutional questions of federalism. Under Section 91 of the Constitution of Canada, the federal government relies on its taxation authority to regulate charities. But section 92 grants Provinces authority over charities. The working group explored Provincial laws on charity to conclude that there is considerable harmonization between the federal and provincial laws; federalism concerns, in other words, would not pose a meaningful obstacle to legislative change, if Parliament were to undertake charity law reform.

The recommendations that came out of this working group are as follows:

1. Legislative amendments to the Income Tax Act: Suggests including certain objects as charitable purposes that have already received substantial stakeholder input, such as “advancing amateur sport and recreation” and “prevention of poverty.”
2. Reconciliation-focused policy review: Recommends that the Minister of National Revenue and the Commissioner of the CRA review policies that impact reconciliation (e.g. CPS-012) related to Indigenous peoples, with a lens informed by the principles of reconciliation and the UN Declaration on the Rights of Indigenous People (UNDRIP).
3. Support for Indigenous communities: Advises developing outreach and support for Indigenous communities to build trust and also address tax issues affecting their work and contributions to reconciliation.
4. Consultations on a “Home in Government”: Proposes that the Minister of National Revenue consults the charitable sector to explore the benefits of establishing an independent charities regulator or another supportive government body to modernize charity law and regulation.

You can read the full report here (French version here).

Report #2 – National inherent risk assessment working group

This working group was formed shortly after March 2023, when the Ministry of Finance released its updates to the earlier 2015 NIRA. Under Layered Suspicion examined the 2015 NIRA at length; the 2023 version offered updates given increasing concern about the rise of right-wing extremism in Canada. The working group held consultations with government ministries and units that contribute to Canada’s Anti-Money Laundering/Anti-Terrorism Financing regime. The timing of the working group was significant not only because of the 2023 NIRA publication, but also because Parliament had passed C41—legislation that was designed to enable charities to support humanitarian and development relief that might otherwise be caught under the anti-terrorism financing provisions of the Code.

The five recommendations below are based on the NIRAWG’s discussions with the Department of Finance, Public Safety Canada, Global Affairs Canada, the CRA’s Review and Analysis Division, and some NGOs and members of the charitable sector.

1. Adopt a more comprehensive risk assessment approach: Encourage the Department of Finance to integrate both inherent and residual risk analyses to more accurately represent the charitable sector’s vulnerabilities. This would align with international practices and maintain public trust.
2. Ensure Charter compliance: Urge the development and dissemination of guidance for AML/ATF regulatory bodies to fulfill their responsibilities while adhering to the Charter of Rights and Freedoms.
3. Incorporate gender and diversity considerations: Suggest the inclusion of Gender‑based Analysis Plus (GBA Plus) in future NIRAs, making sure risk assessments and regulatory duties account for diverse impacts and support equitable compliance practices across all sectors.
4. Clarify legal frameworks: Seek clarification from the Department of Public Safety Canada on the implications of recent Criminal Code amendments related to the charitable sector, ensuring alignment with Canada’s policy positions and giving clear guidance for navigating potential contradictions.
5. Establish an advisory body: Create a collaborative advisory group involving key ministries and humanitarian bodies to review and advise on policy applications and decisions, ensuring a balanced and inclusive approach to AML/ATF measures.

The full report can be accessed here (French version here).

Message from Prof Anver Emon to mark end of ACCS term

It was a profound honour to serve on the ACCS and work with such capable leaders in the charities sector and in the Charities Directorate of the CRA. I am grateful to the ACCS co-chairs for creating an environment open to critical inquiry, and to colleagues from the Charities Directorate and ACCS Secretariat for sharing so openly about the regulatory realities they face. I am also grateful for the trust of my ACCS colleagues to serve as chair for two working groups. I believe the work we published as a body has created the conditions for a more informed sector.

Additional reports from ACCS available

Two additional ACCS working groups issued papers that inform the 4th ACCS report. Those papers explore topics related to creating a robust charitable and non-profit sector. You can find those papers here as well.

• Transparency and data related to other qualified donees and non-profit organizations working group (EN report and FR report)
• Relationship between the CRA and the charitable sector working group (EN report and FR report)

A summary infographic of ACCS’ 4th report can be viewed from the Government of Canada website (EN version and FR version).