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CANADA REVENUE AGENCY in the MATTER of a Complaint CANADA REVENUE AGENCY IN THE MATTER OF a complaint to the Compliance Division of the Charities Directorate B E T W E E N: DAVID MIVASAIR and KHALED MOUAMMAR Complainants - and - THE CANADIAN ZIONIST CULTURAL ASSOCIATION Respondent ______________________________________________________________________________ REQUEST FOR AN AUDIT UNDER THE INCOME TAX ACT, R.S.C., 1985, C. 1. (5TH SUPP.) ______________________________________________________________________________ July 30, 2021 SHANE MARTÍNEZ JOHN PHILPOT 1235 Bay Street, Suite 700 5064 avenue du Parc Toronto, Ontario Montréal, Québec M5R 3K4 H2V 4G1 Tel: (647) 717-8111 Tel: (514) 272-9150 Fax: (866) 436-6586 Fax: (514) 271-4708 E-mail: [email protected] E-mail: [email protected] Joint Counsel for the Complainants nopqrstuvwuxyzo{yv|n}v~~wn ~ w w ! "# $% &'())') 01213145652578529 0@ABC1295DC6CEC@2@FGH50H1ICGC5EDCI59G@I1G5 7GG52GC@2P4@Q5IGD5125DCI59G@I@F0@ABC1295 R552SGI55G TGG1U1T2G1IC@ V7WX (Y` (YabYcd efg hi hbpqd fe drY hihpqhi sqfiqcd btdbght ccfuqhdqfi D51IvIwD5125P x51E5FC23529@E53@IF@IA19@AB1C2GUHC9HE5GE@G9@295I2EI581I3C28GH5 I58CEG5I53EG1GE@FGH501213C12yC@2CEG0GI17EE@9C1GC@20y07w1E53@2GH5 C2F@IA1GC@2GH1GU5H1659@ABC53A9H@FUHC9H912Q5F@23C2BQC9161C1Q5 3@9A52GEGH50y071BB51IEG@Q5C26C@1GC@2@FGH5 ZZ4wSw0wX 9wXGHSBBwGH501213C12B@C91230478C35C25Ew d51I5GH5I5F@I5I5e5EGC28GH1G1213CG@FGH50y07Q5C2CGC1G53QGH5012131 45652578529wfGCE@I5gB59G1GC@2GH1GCFGH513CG9@2FCIAEGH5C2F@IA1GC@2C2GH5 529@E533@9A52GGH5I5EGUCQ5G@9@AA5295GH5F@IA1BI@95EE@FI56@hC28GH5 9H1ICG1Q5EG1GE@FGH50y07w dCGHI581I3G@E@I95E@FC2F@IA1GC@2C2GH5529@E533@9A52GB51E5I5F5IG@GH5 F@@G2@G5E123GH5FQCQC@8I1BH1GGH5523@FGH53@9A52GwiH5I5@UCFC23GH5 FCEG@F9CG53E@I95EUHC9HG@85GH5IUCGHGH5529@E533@9A52G9@ABICE5@IF@IA1 9@AB1C2Gw SC295I5@IE jjjjjjjjjjjjjjjjjjjjjjjjjjjjjjj jjjjjjjjjjjjjjjjjjjjjjjjjjjjjjj 41QQCD16C3vC61E1CI VH153v@1AA1I 09PiH5k@2@I1Q5DC125W5Q@GHCC5Ixw0wvwxwlvC2CEG5I@Fm1GC@21456525 TABLE OF CONTENTS EXECUTIVE SUMMARY ..................................................................................................................................... 3 1.0 BACKGROUND ........................................................................................................................................ 4 1.1 What is the Canadian Zionist Cultural Association (CZCA)? ................................................. 4 1.2 What is the Association for the Soldiers of Israel – Canada (ASI – Canada)? .................. 4 1.3 What is Yahad? ............................................................................................................................................. 5 1.4 What are the Israeli Defense Forces? .................................................................................................. 6 2.0 APPLICABLE CHARITY LAW AND GUIDELINES ............................................................. 7 What are the applicable charity laws and requirements? ................................................................. 7 1) Guidelines for registering a charity: Meeting the public benefit test – CPS-024 ..................... 7 Requirement that there be a net benefit for the public .......................................................................... 8 Restricting or focusing a benefit to a specific group of beneficiaries .............................................. 9 2) Canadian registered charities carrying out activities outside Canada – CG-002 .................... 9 Own activities ................................................................................................................................................. 10 Direction and control when using intermediaries ................................................................................ 10 What is a conduit? ......................................................................................................................................... 11 3) How to draft purposes for charitable registration - CG-019 ......................................................... 11 4) A charitable purpose should not be broad or vague ........................................................................ 12 3.0 OUR COMPLAINT ............................................................................................................................... 13 3.1 ASI – Canada appears to be acting as an intermediary for the CZCA ......................... 13 3.2 The CZCA appears to be acting as a conduit for Yahad ...................................................... 18 3.3 The CZCA appears to support non-charitable activities benefitting the IDF ................ 21 3.4 The CZCA’s activities do not appear to satisfy the public benefit test and appear to be contrary to public policy ............................................................................................................................... 25 1. The organization’s purposes must be exclusively and legally charitable. .............................. 25 2. It must be established for the benefit of the public or a sufficient segment of the public. 25 International Law Background: Israeli Military’s Systemic and Indiscriminate Violations against Palestinians in the occupied Palestinian territory (time period: 2014-2021) .......... 27 4.0 CONCLUSION ........................................................................................................................................ 33 BIBLIOGRAPHY ................................................................................................................................................... 34 SUPPLEMENTARY MATERIALS PROVIDED BY AL-HAQ RESEARCHERS ......................... 39 2 EXECUTIVE SUMMARY The Canadian Zionist Cultural Association (CZCA) is a registered charity in Canada governed by provisions of the Income Tax Act , R.S.C., 1985, c. 1 (5th Supp.), and subject to oversight by the Canada Revenue Agency (CRA). We allege that the CZCA is a fundraising office of the Association for the Soldiers of Israel – Canada (ASI – Canada), a non-charitable organization that fundraises on behalf of active-duty soldiers in the Israel Defense Forces (IDF). Alternatively, we allege that even if the CZCA is not a fundraising office of ASI – Canada, its financial support for the IDF and active-duty IDF soldiers is in violation of the Income Tax Act , Canadian public policy, and CRA guidelines and policy statements. This financial support is potentially enabling violations of international law by the IDF and active-duty IDF soldiers. The following are the key findings contained in our formal complaint: 1. The CZCA appears to be operating through an intermediary (ASI – Canada) without the requisite direction and control over its activities and resources. This joint venture arrangement appears to be utilizing charitable funds in a manner that is contrary to the Income Tax Act and CG ‑004, Using an Intermediary to Carry on a Charity's Activities within Canada . 2. The CZCA appears to be acting as a conduit for Yahad by funneling resources to it for use in Israel-Palestine without maintaining the requisite direction and control over those resources. Its administrative practices in this regard appear to be in breach of the Income Tax Act and contrary to CRA policy guidance, and CG-002, Canadian Registered Charities Carrying Out Activities Outside Canada . 3. The CZCA appears to be in violation of the Income Tax Act , common law, and CG-002 through its financial support of a foreign army. The support includes being an authorized fundraiser for the IDF, funneling resources to Yahad for use by the IDF, and providing donations to active-duty IDF soldiers (thereby offsetting costs that would otherwise be borne by the IDF). 4. The CZCA appears to be in violation of the Income Tax Act and common law by financing entities and activities which are contrary to Canadian public policy and do not meet the public benefit requirement as stated in CRA policy guidance and CPS-024, Guidelines for Registering a Charity: Meeting the Public Benefit Test . The CZCA’s support for the IDF is wholly incompatible with public policy. 3 1.0 BACKGROUND 1.1 What is the Canadian Zionist Cultural Association (CZCA)? The CZCA (business/registration number 108075748 RR 0001) achieved charitable status in 1980, 1 although there is little information readily available online about the CZCA, its origins, and its stated purpose. There is a similar absence of online information about its activities in Canada. The organization’s website is inactive, and appears to have been listed as “under construction” since at least 2013. 2 A description of the CZCA on the website of the UJA Federation of Greater Toronto describes it as “a registered charity which supports educational and charitable programs in Israel.” It goes on to state that it “operates camps for widows, orphans, siblings and parents of fallen soldiers and provides scholarships for former soldiers .”3 [emphasis in original] 1.2 What is the Association for the Soldiers of Israel – Canada (ASI – Canada)? ASI – Canada describes itself as “the only non-profit organization in Canada supporting the wellbeing of Israeli soldiers on active duty” and states that it “remains in constant contact with the IDF [Israeli Defense Forces] to better respond to the soldiers’ needs”.4 ASI – Canada is “the only non-profit organization in Canada authorized by the IDF to support Israel's soldiers on active duty. We are the Canadian partner of YAHAD - United for Israel’s Soldiers.”5 [emphasis added] ASI – Canada states that
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