Ottawa: A new report has raised serious concerns about how the Canada Revenue Agency handled a long-running audit of the Muslim Association of Canada, concluding that the agency’s approach to monitoring potential terrorist financing was “seriously deficient.”
The review, conducted by University of Manitoba professor Michelle Gallant, calls for reforms to ensure that audits of charitable organizations are carried out without bias or discrimination. The report highlights the need for greater cultural and religious understanding within the agency, particularly regarding Islamic communities, and recommends improved transparency in how audits are conducted.
Gallant’s findings suggest that the agency relied heavily on “associational” links—connections between individuals and organizations—to assess potential risks, a method she argues can lead to overreach and misinterpretation. The report warns that such approaches risk attributing suspicion based on indirect relationships rather than concrete evidence, potentially capturing legitimate activities within broader scrutiny.
The Muslim Association of Canada, commonly known as MAC, has long maintained that the audit was influenced by systemic bias and Islamophobia. The organization, which serves more than 150,000 Canadians annually through its community centres, mosques, and educational programs, had previously challenged the audit in court but was unsuccessful in halting the process.
During those proceedings, federal lawyers cited preliminary findings that raised concerns about compliance with charitable regulations, including alleged foreign political involvement, real estate acquisitions, and links to entities listed as terrorist organizations. However, MAC has stated that its charitable status remains intact and that it has entered into a compliance agreement addressing what it describes as technical governance issues.
The report also recommends that the revenue agency take a more proactive role in educating charities about potential risks, including providing clearer guidance on organizations or individuals they should avoid engaging with. Gallant emphasized that better communication could help charities make informed decisions and reduce unintended violations.
The CRA declined to comment directly on the report’s recommendations but noted that it has already taken steps to improve oversight and reduce the risk of bias, following earlier findings from Canada’s national security review body that identified shortcomings in how charities are selected for audit.
Community leaders have welcomed the report, describing it as an important step toward addressing concerns within the Canadian Muslim community. They expressed hope that the findings will lead to more equitable and transparent practices moving forward, while reaffirming their commitment to community service and engagement across Canada.