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Federal Tax - Charities. Jewish National Fund of Canada Inc. v. Canada (National Revenue)
In Jewish National Fund of Canada Inc. v. Canada (National Revenue) (Fed CA, 2025) the Federal Court of Appeal dismissed an appeal, that from a JR challenging a Ministerial revocation of charitable registration "by publishing a notice of intention to revoke (NITR) in the Canada Gazette":[2] The Federal Court, relying on the authority of Stewards’ Charitable Foundation v. Minister of National Revenue (Federal Court File No. T-2706-22) [Stewards’], concluded "“that the Federal Court is without jurisdiction to entertain judicial review of the publication of a NITR”": Jewish National Fund of Canada Inc. v. Canada (National Revenue), 2024 FC 1796 (per Whyte Nowak, J.) at para. 42. With no jurisdiction to judicially review the publication decision, the Federal Court was without jurisdiction to grant the appellant the relief it sought and therefore dismissed the motion.
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[25] The appellant says the Federal Court erred in concluding that it had no jurisdiction to entertain the judicial review application. The appeal provisions in the Income Tax Act only capture the decision to issue or confirm the issuance of the NITR. The appellant asserts that the decision to publish the NITR, which results in revocation of charitable registration, is a separate decision that the appellant cannot appeal. Therefore, only the Federal Court has jurisdiction to judicially review the publication decision, citing subsection 18(1) of the Federal Courts Act, R.S.C. 1985, c. F-7.
[26] I do not agree that the Federal Court has jurisdiction.
[27] Subsection 172(3) of the Income Tax Act provides that a registered charity may appeal to this Court the Minister’s decision to issue the NITR or to confirm it following objection. Section 180 provides as follows:"180 (1) An appeal to the Federal Court of Appeal pursuant to subsection 172(3) may be instituted by filing a notice of appeal in the Court within 30 days from"
"180 (1)"" Un appel à la Cour d’appel fédérale prévu au paragraphe 172(3) est introduit en déposant un avis d’appel à la cour dans les 30 jours suivant, selon le cas :"
"(a) the day on which the Minister notifies a person under subsection 165(3) of the Minister’s action in respect of a notice of objection filed under subsection 168(4),"
"a)"" la date à laquelle le ministre avise une personne, en application du paragraphe 165(3), de sa décision concernant l’avis d’opposition signifié aux termes du paragraphe 168(4);"
"[…]"
"…"
"(2) Neither the Tax Court of Canada nor the Federal Court has jurisdiction to entertain ""any proceeding in respect of a decision of the Minister from which an appeal may be instituted under this section."
"[Emphasis added.]"
"(2)"" La Cour canadienne de l’impôt et la Cour fédérale n’ont, ni l’une no l’autre, compétence pour connaître ""de toute affaire relative à une décision du ministre contre laquelle il peut être interjeté appel en vertu du présent article""."
"[Sans italique dans l’original.]" [28] The Supreme Court of Canada has said that "“[t]he phrase ‘in respect of’ is probably the widest of any expression intended to convey some connection between two related subject matters”": Nowegijick v. The Queen, 1983 CanLII 18 (SCC), [1983] 1 S.C.R. 29, 144 D.L.R. (3d) 193 at 39 [Nowegijick]. The synonymous French expression, "“relative à”", is equally broad.
[29] The NITR must be issued to the charity at least 30 days before it may be published. Revocation of charitable status is only effective on publication. Issuance of the NITR is thus a pre-condition to revocation. The decision to issue or confirm a NITR may be appealed, and any appeal must be to this Court. Once the NITR is issued, only this Court can order the Minister to stay publication and thereby stay revocation. Publication gives effect to the revocation that is the subject of the confirmed NITR. The confirmed NITR, in turn, may be challenged in an appeal.
[30] Given this legislative scheme, there can be no doubt that an application for judicial review of the Minister’s decision to publish the NITR is a proceeding "“in respect of”" (i.e., "“in relation to”", "“with reference to”", or "“in connection with”") the Minister’s decision to issue or confirm the NITR: Nowegijick at 39.
[31] Thus, subsection 180(2) is dispositive of the jurisdictional question in this appeal. If any court has jurisdiction to entertain an application for judicial review of the Minister’s publication decision, it is this Court, not the Federal Court: A.B.L.E. Association for Betterment of Literacy & Education v. The Queen, [1998] F.C.J. No. 1962, 1998 CanLII 17653 (F.C.A.) at para. 21.
[32] As I noted, the Associate Judge in Stewards’ went further, concluding that the publication decision is not a separate decision from the decision to issue the NITR and therefore cannot be judicially reviewed. The Federal Court agreed.
[33] The respondent asserts that proposition as an alternative ground for dismissing the appeal. It is unnecessary to address that issue and, given the appellant’s judicial review application in this Court, it also is inappropriate to do so. Nothing in these reasons should be interpreted as expressing any view on whether the publication decision is a separate decision amenable to judicial review.
[34] For these reasons, I would dismiss the appeal with costs. . Jewish National Fund of Canada Inc. v. Canada (National Revenue)
In Jewish National Fund of Canada Inc. v. Canada (National Revenue) (Fed CA, 2025) the Federal Court of Appeal dismissed an appeal, that from a JR challenging a Ministerial revocation of charitable registration "by publishing a notice of intention to revoke (NITR) in the Canada Gazette".
Here the court reviews the federal charitable registration revocation regime:[5] Before I explain why and describe the background to this appeal, it is useful to first outline the statutory framework governing revocation of charitable registration. While for simplicity I will refer to the Minister, the Minister’s delegates employed by the Canada Revenue Agency acted for the Minister.
I. Revocation of Charitable Registration
[6] The Minister may revoke the registration of a charity on one or more grounds in the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.): ss. 168(1), 149.1(4.1). To do so, the Minister must issue a NITR to the charity and then publish it in the Canada Gazette: Income Tax Act, s. 168(1). Revocation is effective only when the NITR is published: Income Tax Act, s. 168(2).
[7] However, the Minister may not publish the NITR before the expiry of 30 days after the NITR is mailed to the charity or such longer period as this Court may order on application: Income Tax Act, s. 168(2)(b). The charity may bring such an application any time before the NITR is published or the charity’s appeal of the NITR is determined: Operation Save Canada Teenagers v. Canada (National Revenue), 2011 FCA 71 at para. 11; Income Tax Act, s. 168(2). The charity’s right to seek an extension to the publication deferral period from this Court is independent of its right to object or appeal: International Charity Association Network v. Canada (National Revenue), 2008 FCA 62 at para. 6.
[8] A charity cannot appeal the revocation itself: Opportunities for the Disabled Foundation v. Canada (National Revenue), 2016 FCA 94 at para. 22. However, a charity may appeal the Minister’s issuance of the NITR to this Court: Income Tax Act, ss. 172(3)(a.1), 180(1).
[9] Before appealing, the charity must serve a notice of objection to the NITR on the Minister: Income Tax Act, ss. 168(4), 172(3)(a.1). If the Minister neither vacates nor confirms the NITR within 90 days of the notice of objection’s service, the charity may proceed with its appeal in this Court or wait until the Minister confirms the NITR following the objection and appeal the confirmation: Income Tax Act, s. 172(3)(a.1). The appeal must be commenced no later than 30 days after confirmation, unless this Court extends that period on application: Income Tax Act, s. 180(1).
[10] Notwithstanding a charity’s objection or appeal, the Minister is not required to, but may, defer publication of the NITR in the Canada Gazette. . Walby v. Canada [gifts]
In Walby v. Canada (Fed CA, 2025) the Federal Court of Appeal dismissed Tax Court appeals, here from MNR reassessments denying a claim for "charitable donation tax credits". The case considers several cases and ITA statutory provisions on this issue [eg. regarding 'gifts' and 'value'], though not lending themselves to convenient extraction [para 20-75].
. Muslim Association of Canada v. Canada (Attorney General)
In Muslim Association of Canada v. Canada (Attorney General) (Ont CA, 2024) the Ontario Court of Appeal dismisses a Charter JR against a pending CRA charity audit, here on grounds of prematurity and adequate alternative remedy:[2] The appellant argues that the application judge erred by improperly applying the prematurity principle to an application for Charter relief, and in finding that the administrative appeal process under the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (the “ITA”) provided the appellant with an effective alternate means to obtain the relief it seeks.
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Background
[4] The applicant describes itself as Canada’s largest grassroots Muslim charity, committed to promoting a moderate, balanced view of Islam. It has over 500 members, 1500 volunteers, operates 22 mosques and community centres, runs 30 schools, and serves more than 150,000 members of the Canadian Muslim community through local chapters in 14 cities across Canada.
[5] The CRA is the regulator of registered charities in Canada. Its mandate includes ensuring that registered charities meet statutory requirements for registration and are not abused by terrorist organizations.
[6] In 2015, the CRA commenced the Audit. It was extensive, involving dozens of interviews and visits to the appellant’s properties, as well as a review of approximately 1,000,000 financial transactions, over 415,000 emails, and over 63,000 other files.
[7] In March 2021, the CRA issued a 150-page Administrative Fairness Letter (the “AFL”) setting out CRA's preliminary findings and recommendations. The AFL identified numerous areas where the CRA alleged that the appellant had failed to comply with relevant provisions of the ITA and/or its regulations, and recommended that the appellant’s charitable status be revoked. The AFL invited the appellant to respond to these preliminary findings and recommendations, and appellant did so in writing in August 2021, December 2021 and January 2022.
[8] In April 2022, the appellant commenced an application in Superior Court (the “Application”) seeking an order terminating the Audit on grounds that the Audit, including the AFL, had violated its Charter-protected rights to freedom of religion, freedom of expression, freedom of association, and freedom from discrimination. The Application identified three aspects of the Audit process that had infringed its Charter rights (collectively, the “Audit Process Concerns”): (i) the risk-based assessment used by the CRA to determine which charities to audit, which the Appellant argues disproportionately single out Muslim charities; (ii) the appellant’s referral for auditing, which it argues was based on dubious and unreliable sources; and (iii) the manner in which the Audit had been carried out, resulting in the AFL, which the appellant argues reflects Islamophobic attitudes and a profound misunderstanding of Islam. . Sigma Chi Canadian Foundation v. Canada (National Revenue)
In Sigma Chi Canadian Foundation v. Canada (National Revenue) (Fed CA, 2024) the Federal Court of Appeal considered an ITA s.172(3)(a.1) appeal of a decision of the Minister of National Revenue in which she "confirmed her intention to revoke Sigma Chi’s registration as a charity". The case is also enlightening for the nature of sororities and fraternities:[2] Sigma Chi was registered as a charity with effect from 1992. It describes itself as an international fraternal organization with 244 active undergraduate chapters and 152 alumni chapters across Canada and the United States. When it was registered, one of its stated objectives was to “assist deserving undergraduate, graduate, and other students attending or enrolled at institutions and systems of higher education in Canada who are in financial need to continue and complete their education at such institutions and systems.”
[3] An organization must meet a number of statutory requirements to qualify and continue to qualify for charitable registration. In 2010 and 2011, the Canada Revenue Agency audited Sigma Chi’s operations. The audit identified a number of areas of non-compliance. These included Sigma Chi’s failure to devote all of its resources to charitable activities and the provision of personal benefits to members. The audit found that eligibility for the majority of Sigma Chi’s scholarships was restricted to its members.
[4] In March 2011, the Minister and Sigma Chi entered into a compliance agreement to address issues identified in the audit. In the agreement, Sigma Chi agreed, among other things, to “devote all of its resources to charitable activities,” and to not restrict its scholarships and financial assistance to Sigma Chi members.
[5] The CRA commenced a second audit in November 2017. The Minister informed Sigma Chi of findings from the audit that Sigma Chi was not complying with statutory requirements, including by failing to devote its resources to its own charitable activities, failing to maintain adequate books and records, and issuing non-compliant tax receipts. The audit also found that in the 2015 and 2016 fiscal periods respectively, 61% and 74% of total resources spent on scholarships and awards were for “inhouse scholarships,” which are restricted to members and pledges, and that some scholarships were awarded based on the recipient’s role in Sigma Chi or how they represented its ideals. The audit determined that Sigma Chi’s activities were primarily for the benefit of its members, not for the benefit of the public (as the ITA requires of a registered charity).
[6] Sigma Chi provided written representations to the Minister in response to the audit. After considering these representations, the Minister determined that Sigma Chi did not meet the requirements for registration as a charity, and issued a notice of intention to revoke. Sigma Chi filed an objection in response. The Minister reviewed Sigma Chi’s submissions in support of its objection, but found that they failed to demonstrate that Sigma Chi met the requirements for maintaining its registration. However, she decided in light of the objection that she would not continue to rely on one of the grounds she had initially advanced—the failure to meet the requirements for books and records in subsection 230(2) of the ITA.
[7] The Minister now relies on three grounds for revocation: (1) that Sigma Chi has provided private benefits for members, and thus has not been operated exclusively for charitable purposes as required by paragraph 149.1(1)(a) of the ITA; (2) that it has provided funds to non-qualified donees, contrary to paragraph 149.1(1)(a.1); and (3) that it did not have direction and control over funds sent to an American organization, and thus failed to devote all of its resources to charitable activities it itself carried on, contrary to paragraph 149.1(1)(a.1): Canadian Committee for the Tel Aviv Foundation v. Canada, 2002 FCA 72 at para. 40.
[8] Sigma Chi contests all three of these findings. It is common ground that the standard of review in respect of these findings is the highly deferential standard of palpable and overriding error, and that to displace the Minister’s decision based on them, Sigma Chi must demonstrate palpable and overriding error in respect of all three: Colel Chabad Lubavitch Foundation of Israel v. Canada (National Revenue), 2022 FCA 108 at paras. 49, 51. Sigma Chi also submits that the Minister breached her duty of procedural fairness, and that her conduct raises a reasonable apprehension of bias. We do not agree that any of these grounds are made out.
[9] First, we see no palpable and overriding error in the finding that Sigma Chi has provided private benefits to its members through its inhouse scholarships. While Sigma Chi submits that these scholarships are open to all male university students eligible to apply for Sigma Chi membership, they are ultimately payable only to recipients who are accepted as members or pledges. Moreover, despite Sigma Chi’s commitment in the compliance agreement to “devote all of its resources to charitable activities” and to not restrict the beneficiaries of the scholarships and educational assistance program, the record shows that it continued to grant inhouse scholarships in 2015, 2016, 2020, and 2021. In 2015 and 2016 respectively, 75% and 82% of Sigma Chi’s scholarship funds were restricted to Sigma Chi members and pledges. In 2020 and 2021, Sigma Chi awarded $216,760 in inhouse scholarships. The Minister also points out that, at the time of its registration, Sigma Chi’s stated purpose of assisting students pursuing higher education made no mention of any restriction to members or pledges. But as recently as May 2023, Sigma Chi stated on its website that “[t]he Foundation exists as a vehicle for local Active Chapters, Alumni Chapters and/or House Corporations to raise tax-deductible funds for educational purposes—primarily for the benefit of Active Chapters and Active brothers” (emphasis added). This is not a charitable purpose under the ITA.
[10] Second, we also see no reviewable error in the Minister’s finding that Sigma Chi has provided funds to non-qualified donees by making loans to Sigma Chi fraternity housing corporations, established to provide housing to members. In addition, it breached the compliance agreement by failing to obtain security for its loans to London Sigma Chi Properties and by making a further advance to London Sigma Chi Properties, despite its obligations under the compliance agreement. The loans and advance to London Sigma Chi Properties involved significant sums. According to the first audit, the loans totaled $403,015. The further advance was of $25,000.
[11] Third, we see no reviewable error in the Minister’s conclusion that Sigma Chi failed to maintain direction and control over the Horizon Scholarship program, a program partially funded by Sigma Chi and administered in the United States. As the Minister points out, Sigma Chi has only one of the eight seats on the governing board, and only two of 16 on the selection committee. There was ample support in the record for the Minister’s conclusion that Sigma Chi did not have direction and control over the use of its funds.
[12] Finally, in our view, Sigma Chi has failed to make out a reasonable apprehension of bias, and there was no deprivation of procedural fairness.
[13] The test for establishing a reasonable apprehension of bias is whether a reasonable and informed person, viewing the matter realistically and practically, and having thought the matter through, would think it is more likely than not that the decision maker, whether consciously or unconsciously, would not decide fairly: Yukon Francophone School Board, Education Area #23 v. Yukon (Attorney General), 2015 SCC 25 at para. 20. There is a “high burden” on the party seeking to establish a reasonable apprehension of bias: Yukon Francophone at para. 26. Sigma Chi’s grounds for claiming a reasonable apprehension of bias fail to meet this high burden.
[14] Sigma Chi submits that the Minister’s conduct raises a reasonable apprehension of bias because she treated Sigma Chi in a manner dissimilar to other organizations that restrict their scholarships to a subset of the public. Sigma Chi mentions scholarships offered by the University of Toronto that are restricted to students enrolled at Trinity College. However, as this Court has held in the tax context, the fact that others benefitted from an exemption is “not relevant” to whether a particular taxpayer should benefit from that same exemption: R. v. Sinclair, 2003 FCA 348 at para. 7. Even if comparisons were relevant, the record before us falls well short of providing an evidentiary basis on which the Court could draw meaningful comparisons.
[15] Sigma Chi also submits that the Minister’s refusal to consider Sigma Chi’s offers to take corrective measures grounds a reasonable apprehension of bias. However, as the Minister notes, Sigma Chi was given three formal opportunities to respond to the issues identified by the Minister. The record before us shows that Sigma Chi’s submissions were taken seriously, and were thoroughly reviewed and considered. We agree with the Minister that Sigma Chi was not entitled to continuously negotiate further corrective measures, especially given its failure to meet its obligations under the compliance agreement. . Sheldon M. Chumir Foundation for Ethics in Leadership v. Canada (National Revenue)
In Sheldon M. Chumir Foundation for Ethics in Leadership v. Canada (National Revenue) (Fed CA, 2023) the Federal Court of Appeal briefly set out some procedures for revoking a federal charity's registration:[1] The Sheldon M. Chumir Foundation for Ethics in Leadership is a registered charity under the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (ITA). The Minister of National Revenue has notified the Foundation under subsection 168(1) of the ITA of her intention to revoke the Foundation’s registration as a registered charity. The revocation is to take effect when a copy of the notice is published in the Canada Gazette. . Fortius Foundation v. Canada (National Revenue)
In Fortius Foundation v. Canada (National Revenue) (Fed CA, 2022) the Federal Court of Appeal considers the complex statutory and Federal Rule-governed procedure for a charity seeking to challenge a Ministerial ITA s.168(2)(b) 'notice of intention' to publish a revocation of it's charitable status. Most of the case involves the application of the common law RJR-Macdonald stay test, which seems to be the proper route as I can't locate a statutory stay provision that applies pending the outcome of the available ITA s.168(4) 'notice of objection' route.
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