CRA Revokes JNF Canada’s Charity Status Over Alleged Foreign Military Support

Revocation of JNF Canada’s Charitable Status

On August 8, 2024, the Canadian Revenue Agency (the “CRA”) revoked the charitable status of the Jewish National Fund of Canada Inc. (“JNF Canada”). The decision is being appealed by JNF Canada to the Federal Court. Several news articles suggest that one of the reasons for the revocation is JNF Canada’s past funding of infrastructure projects on Israeli army, air and naval bases.¹ This article will focus on the issue of foreign military support by a Canadian charity. It seems that JNF Canada’s charitable purposes did not allow for the funding of infrastructure projects. The Income Tax Act (the “Act”) does not allow Canadian charities to support a foreign military in any manner.

JNF Canada’s Purposes

JNF Canada’s listed purpose is “[t]o create, provide, enlarge and administer a fund to be made up of voluntary contributions from the Jewish community and others to be used for charitable purposes.”

CRA Audits

JNF Canada has been audited multiple times by CRA. In 2019, CRA notified JNF Canada of CRA’s intention to revoke its charitable status.

The Reasons

The CRA revoked their charity status alleging that JNF Canada ceased to comply with the requirements of the Act by:

1. failing to be constituted for exclusively charitable purposes;
2. being engaged in activities that are not in furtherance of charitable purposes;
3. not having direction and control over the activities undertaken in Israel and thus not devoting its resources to its own charitable activities;
4. providing funds to non-qualified donees; and
5. having insufficient documentation to substantiate the activities undertaken in Israel and its failure to keep information in such form that would enable the Minister to determine whether there are grounds for the revocation of its registration.

Exclusively Charitable Purposes

The Act requires registered charities to be constituted and operated for exclusively charitable purposes, and to devote all its resources to charitable activities.

According to Canadian law, a charitable purpose:

1. fits into one of the following categories:

• the relief of poverty,
• the advancement of education,
• the advancement of religion, or
• other purposes beneficial to the community;

2. defines the scope of activities that can be carried on to further the purpose; and  
3. provides a public benefit to the community or a sufficient segment of the community (“public benefit requirement”).

A charitable activity furthers a charitable purpose. It is not the nature of the activity itself, but rather the purpose it furthers that makes the activity charitable.

Supporting the Armed Forces of a Foreign State

The CRA has stated its position that it is not charitable to support the armed forces of a foreign state. It can be unclear what constitutes supporting the armed forces of a foreign state

Incidental Support

The Act does not prohibit activities that provide incidental support to the armed forces of a foreign state as a possible eventual consequence of activities that further a charitable purpose.

Public Benefit Requirement

As long as the benefits are not restricted to personnel of a foreign military, but are available to the general public, the public benefit requirement is met.

A charity’s purposes must provide public benefit to the community or a sufficient segment of the community. If a charity serves a class of persons, the class must not be numerically negligible. Membership in a class must not depend on a personal connection or other connection unrelated to the charitable purpose.² Such a connection renders the benefit private.

Emergency Medical Assistance in a War Zone

For example, providing emergency medical assistance to the public or a sufficient section of the public is a charitable purpose. A charity with the purpose to provide protective health care by offering emergency medical services in a war zone might treat anyone, civilians and military personnel included. In this example, the charity would likely be operating for a charitable purpose, even if foreign military personnel are treated. However, if the charity restricted its services to military personnel, it would fail the public aspect of the public benefit requirement. It would also likely be found to be operating for the non-charitable purpose of supporting the armed forces of a foreign state.

Services to Military Veterans

Providing services that relieve mental and physical disabilities of veterans of another country typically provides a public benefit as it relates to the promotion of health. The CRA will not consider these services to support the armed forces of a foreign state.

The Courts’ Viewpoint

The Courts determine whether a purpose provides a public benefit to the community, or a sufficient segment of it, through analogy to precedent cases, and through incremental changes.³ What is beneficial is considered in light of prevailing standards current at the time. Accordingly, the court’s notion of what constitutes public benefit may vary with the passing of time. Previous recognition or rejection of a type of public benefit does not end the issue for all time.

Takeaways for Charities

The revocation of JNF Canada’s charity status is a stark reminder for Canadian charities that they should ensure that:

1. Their purposes and activities are carried out in a way that provides a public, rather than a private, benefit;
2. Their activities cannot further a non-charitable purpose, including supporting a foreign military;
3. They have sufficient oversight and documentation regarding how their resources are used to further their charitable purposes; and
4. If there are changes to the scope of an activity carried out by the charity, the charity’s purposes should be reviewed, and amended as needed, to ensure they continue to be accurate.

If you require any assistance with your charity matter, our experienced Not-For-Profit & Charity lawyers can assist you. To learn more about how we can help, please contact us online or by telephone at (416) 863-0125.

Mills & Mills LLP has no involvement with JNF Canada’s case. This article is written for general information purposes.

1. Jewish National Fund is taking the CRA to court over plan to revoke its charitable status | CBC News; Jewish National Fund plans appeal of CRA decision on charitable status | National Post ↩︎
2. In re Cox / Baker v National Trust, 1952 CanLII 13 (SCC) at p 98, [1953] 1 SCR 94. ↩︎
3. Vancouver Society of Immigrant and Visible Minority Women v MNR, [1999] 1 SCR 10 at paras 159, 203. ↩︎

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