Official Response to CJN
Official Response to CJN
15+ Million Trees is No Gimmick
We wish to respond to the recent coverage in the CJN with respect to our multi-year battle with the Canada Revenue Agency (CRA). It is time to set the record straight.
Although JNF was in regular contact with the CJN reporting team prior to the publication of the article on the history of our relationship with the CRA, we were never asked for our views on critical issues raised in the article. Furthermore, the behaviour of the CRA or their findings, are never questioned or criticized. Rather, it assumes that the CRA is righteous and just, and JNF is the guilty party.
Not surprisingly, this leaves the readers with a one-sided and unbalanced impression.
A few issues raised
Due to human error, we provided the CRA with documentation on the wrong psychiatric hospital project. We annually oversee funding for multiple projects and at the time, we were supporting two psychiatric facilities in Jerusalem. A phone call would have quickly resolved the matter.
Hebrew is the language of work in Israel, the language in which we receive 100s of documents, and a language our leadership can read and work in. While there is no law that requires documentation to be submitted to CRA in English or French, we should have translated certain documents to make it easier for the CRA to review. Again, a phone call would have resolved the matter quickly.
A statement from a staff person that trees are simply a marketing trick – what? JNF has planted 15+ million trees over the decades – that’s in no way a “gimmick”. It’s integral to our entire organization and we are proud of this work.
And still, these are periphery issues in the matter of our revocation. The CRA revoked our charitable status without a fair process even though we have addressed their principal concerns. Fundamentally, CRA is questioning our charitable objects and therefore our charitable activities in support of the people of Israel.
The JNF-CRA Relationship
The CJN misconstrues the nature of the timeline between the CRA Charities Directorate (“CD”) between 2014, the year the auditors came, and August 10, 2024, the date of revocation. The CJN article says that the CD, for example:
“lost patience”
“had known for years … major concerns with how the Charity operates”
“warned them again in 2023 and in 2024”
“warned repeatedly to clean up its act between 2016 and 2023”
The entire CRA-JNF relationship was based, rather, on the premise of investigation/prosecution/sanction. This approach is in accordance with provisions of the Income Tax Act (ITA), read literally, but is not in accordance with CRA official guidance and not in accordance with the treatment afforded to almost all other charities. There were no “repeated warnings”. There were repeated accusations, all of which were addressed by JNF. Over the course of the 10-year process, CRA refused on more than 10 occasions to meet with JNF representatives. Throughout, CRA simply threatened revocation, rejecting all of JNF’s requests to discuss solutions in person.
Furthermore, evidence suggests that CRA took a position in the process prior to even conducting the actual audit. As early as 2013, a representative of CRA said to the CRA audit team that the campaigns and complaints of JNF’s detractors provided “excellent background about the Charity…and a view of potential areas of concern for the current audit.”
It was not until JNF obtained access to CRA’s heavily redacted audit file in July 2021 that JNF learned of the extent of the role of its detractors in the audit and sanction process. Interestingly, the redacted materials fail to divulge the fact that JNF’s most vociferous detractor had submitted over 100 pages of writing to the Director of the Charities Directorate (CD) and had actually met with him in October of 2017. This fact was only discovered by JNF in August 2024. Why did the Director of the CD meet with a major detractor, and not understand that it was therefore incumbent upon him to meet with representatives of JNF?
Instead, there was unrelenting determination to revoke JNF from the outset, due almost entirely to the CRA’s apparent but unexpressed view that JNF was entirely subservient to Karen Kayemeth Le’Israel (KKL), and therefore that it did not undertake any independent operations. All of the detractors have taken this view. None accord JNF any existence or integrity independent of KKL.
We point out that, to address this, we have reduced the number of our projects with KKL, entered into a robust compliance agreement with them, and changed the way that KKL describes its relationship with our charities on its website. KKL works for JNF Canada, just like any other agent that we utilize. (The term “agent” is CRA nomenclature. If a charity is doing work in a foreign country, they need an agent to assist with their charitable work.) JNF’s leadership selects the projects we wish to support, and we always have direction and control over all of the funds, as we only reimburse expenses upon receipt of valid expense reports. In short, we have addressed the CRA’s concerns.
In summary, this was a vigorous prosecution from Day 1. There was no discussion afforded to us. Rather, there is evidence of the CRA’s determination to reach a result of revocation from the outset, and there is a reasonable apprehension of bias based on the above and other documents that we obtained through our access to information request.
CRA Guidance
The CRA’s own published guidelines for applying sanctions highlights the irregularity with respect to the treatment afforded to the JNF. “As a general rule, the Directorate intends to start with educational methods to obtain compliance, and then move progressively through compliance agreements, sanctions, and the ultimate sanction of revocation, if necessary.” Only in cases of “aggravated non-compliance” does CRA decline to follow this approach. CRA has never alleged or maintained that JNF was guilty of “aggravated non-compliance.” There were no educational methods presented nor was there any effort on the part of CRA to develop a compliance agreement.
The question for CRA is why it abandoned its own guidance, and whether the detractors played any role in that decision?
"Repeated warnings"
The recent CJN article mentions a 358-page document. The 358 pages is actually several documents. The sequence of messaging in the documents is not “repeated warnings” - it is CRA’s position repeated several times, in a process in which JNF offered a vigorous defense. CRA actually abandoned several arguments including those related to KKL, as well as to projects on disputed territories and projects situated on IDF land. Nevertheless, we made changes even though we disagreed with the CRA’s legal reasoning.
There are several other documents, from both sides, subsequent to the 358 pages of documents. JNF’s full position is stated in multiple submissions, most of which, unfairly, are not referred to in the CJN article. JNF’s last submission in October 2023 is over 90 pages long. JNF presented a detailed and well reasoned legal argument based on dozens of precedents prepared by an eminent lawyer, and CRA’s response did not address these issues at all. The CRA letter of July 2024 purports to deal with the arguments raised in our October 2023 submission, but fails. Our position was ignored.
“One last chance”
The CJN claims that the CRA gave JNF “one last chance.”
The timing and the legal logic are incorrect. JNF had a legal right to object to CRA’s ‘notice of intent to revoke’ letter of August 20, 2019. There is no discretion or power in the CRA to “give” a charity ‘one more chance’. JNF prepared a Notice of Objection to CRA’s Notice, on October 18, 2019, and requested that CRA provide JNF with its whole file, as it had a legal right to do. CRA provided a heavily redacted file on July 21 2021, 18 months later. JNF prepared 2 further submissions as part of this appeals process, the second of which was submitted on December 17, 2021, after it had had a chance to review the heavily redacted file. CRA provided its response to JNF’s appeal in a letter dated July 26, 2023, a full 18 months later. JNF responded in October 2023 with its 90-page letter.
There was no ‘one last chance’ and the origin of CJN’s February 2023 date is a mystery. Three full years of the delay were caused by CRA. The CJN article makes it appear as though JNF never responded to ‘warnings’ and that the CRA, out of the sheer goodness of their collective hearts, gave the truant ‘one last chance’. The exact opposite is true. We have responded to all of their communications, addressing their concerns or expressing our objection of their position. It’s worth adding that each CRA letter in the process dropped significant arguments that had been sufficiently refuted by JNF, despite their unrelenting drive to revoke JNF’s registration, contrary to its own guidance.
Improvements since 2016
In 2016, JNF Canada retained legal counsel who has not only represented us to CRA but has also filled the function of a compliance officer. We have worked closely with David Stevens (Gowlings) and his colleagues for over 8 years, to ensure that our undertakings are CRA compliant.
JNF Canada has worked side by side with Keren Kayemeth L’Israel for decades. There was confusion about the relationship. To demonstrate that we are an independent Canadian charity, in 2018, JNF Canada fully rebranded to remove any association with KKL.
JNF Canada also rewrote, thereby modernizing and strengthening, the agency agreement between the two organizations and utilized this agreement as a template for agreements with other Israeli organizations. JNF Canada has no exclusive relationship with KKL. Rather JNF Canada works with the best organizations in Israel to advance the projects we select. JNF’s leadership make the decisions with respect to projects that we wish to undertake as an organization. There is no KKL “head office” giving instructions to JNF Canada.
JNF Canada hired a Senior Representative based in Israel, to enhance our ability to demonstrate direction and control over our projects, represent JNF Canada and oversee our charitable endeavours there.
Before undertaking any project, an Israeli lawyer reviews the ownership of the land to ensure JNF Canada is not doing anything in violation of CRA policies.
JNF Canada hired a new CFO who has worked with our legal counsel to improve and enhance our record keeping, ensuring that all activities undertaken are compliant with CRA rules and regulations, and that documentation is collected and filed properly.
Moving Forward
JNF has launched two legal processes to challenge the revocation notice:
July 25, 2024: Federal Court of Appeal appeal challenging the CRA revocation decision on the basis of a misapprehension of the facts and law; flawed and unfair process; and bias.
August 20, 2024: Federal Court Application for a Judicial Review of the August 10 revocation notice
At the same time, we are calling on our elected representatives to take responsibility.
To date, Liberal MPs have situated the actions of CRA as a bureaucratic response to JNF ‘s charitable objects because of audits undertaken in 2014. If elected officials are arguing that unelected bureaucrats have been delegated the authority to make a decision of this magnitude, that was a mistake. The Government should take responsibility. The Minister of National Revenue and the Government of Canada should put the revocation of our charitable status on hold until the courts have ruled, as is customary in situations like ours (based on our lawyer’s review of over 200 cases). JNF Canada should be provided the fundamental value of the presumption of innocence, especially because we are not an aggravated case.
While for the time being we are not allowed to issue charitable receipts, please rest assured that we will continue to raise funds in support of building Israel’s social infrastructure to the benefit of vulnerable populations such as youth-at-risk, victims of domestic abuse, children with special needs, veterans and the disadvantaged. Hurting JNF hurts Israelis who need our help the most, especially as they try to recover from the horrors of October 7.
There were many opportunities to solve this issue short of the draconian penalty of revocation. JNF would welcome the opportunity to find an off-ramp and will, as demonstrated many times before, continue to do whatever is necessary to satisfy the expectations of CRA.
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