The Jewish National Fund of Canada was back in court on May 28 asking a different court to order Ottawa to reinstate its charitable status.
Lawyers for the Jewish National Fund of Canada charity appeared before three justices of the Federal Court of Appeal on Wednesday morning, during a special hearing held in Toronto.
They asked the court to compel the Canada Revenue Agency to retract the official notice of revocation which was published in the Canada Gazette on Aug. 10, 2024. On that day, nearly ten months ago, the CRA formally stripped the Jewish charity of its ability to issue tax receipts to donors–a right the agency had granted the pro-Israel fundraising organization since 1967.
The CRA cited the charity’s continued compliance problems with provisions of the Income Tax Act, dating back decades. However, according to charity officials, the revocation move “blindsided” JNF Canada.
In July 2024, JNF Canada filed two appeals of its situation: one with the Federal Court of Canada, and the other with the Federal Court of Appeal.
“Unknown to us, the carpet was pulled out from under us, before we could avail ourselves of that opportunity,” JNF Canada’s lawyer, Andrew Brodkin, of Goodman’s LLP, told the court Wednesday.
Brodkin was referring to what he described as the “troubling unfairness” that occurred after long standing written assurances which JNF Canada received from the CRA, were suddenly changed, without warning. As a result, JNF Canada didn’t go to court sooner to block publication in the Canada Gazette, because it didn’t know it had to–and the CRA didn’t tell them its policies had changed.
“They’ve never been told otherwise,” Brodkin added. “To deprive our client the right to pursue their concerns in the only court we believe is entitled to consider them, would be an unjust result.”
JNF Canada said it had been assured by CRA staffers back in 2019, and again as recently as the summer of 2024. that no further action would be taken to make the revocation official by publishing it, until after JNF Canada had exhausted all of its avenues of appeal, which it is permitted to do under the provisions of the Income Tax Act.
JNF Canada was not aware, its lawyers have argued, of a new regime now in place at the CRA, where revocations get published more quickly.
The lawyer also depicted the CRA’s timeline as surprising, considering it took the agency five years to complete its most recent audit of JNF Canada from 2014 to 2019, and then another four years from 2019 to 2023 for the charity directorate’s in-house civil servants to do a second internal evaluation, but ultimately reject JNF Canada’s objections to being revoked.
“It’s hard to appreciate why it became so urgent, on July 24,” Brodkin told the court, referring to the final letter the charity received confirming the revocation was underway. “What was the rush?”
The CRA said at the time it didn’t want further taxpayer donated funds to flow overseas.
In the last audit, from 2011-2012, auditors had raised red flags about some of the JNF Canada projects being carried out in the West Bank, or on IDF military bases. JNF Canada agreed to stop supporting work in these locations, and the revocation accepted that pledge and removed it from the list of compliance problems.
For many years, JNF Canada has been the target of a concerted campaign by opponents of it and other pro-Israel charities. The Independent Jewish Voices organization submitted briefs to the CRA, held meetings with senior CRA officials, and conducted postcard campaigns to try to get the federal minister of national revenue at the time to shut the charity down.
The CRA has denied any of this political pressure influenced the decision.
With its two court cases filed in July 2024, and revocation of its charitable status now in effect, JNF Canada was also notified that it needed to begin winding up its charity operations that fall. It had to either disburse all its funds to another qualified donee or pay a revocation tax amounting to 100 percent of the money left over, after assessing fair market value and settling debts.
Although neither case had been given a calendar date for a hearing, in November 2024 with the clock ticking, JNF Canada asked for an urgent injunction at the Federal Court of Canada to restore its status, citing irreparable harm, among other reasons. Aside from the pending layoffs of staff members and the cancelling of dozens of projects in Israel, their lawyers argued Israeli children with cancer and their families would suffer.
JNF Canada had promised to help renovate a pavilion on the grounds of the Sheba Medical Centre’s Tel Hashomer site near Tel Aviv, the court was told at the time. Families of young cancer patients are housed there, while their kids are undergoing lengthy oncology treatments. JNF Canada’s website has details of the renovation project it intended to carry out, but to date, has not been able to commence.
The injunction request was heard on Nov. 6, 2024. The Federal Court judge, Madame Justice Allyson Whyte Nowak, promised a speedy decision.
On Nov. 8, 2024, JNF Canada lost that motion. Justice Whyte Nowak dismissed the case.
She did not deal with the merits of JNF Canada’s arguments about revocation, but ruled only that her court did not have the jurisdiction on these matters. She suggested Parliament or the Federal Court of Appeal were the appropriate places to handle it.
JNF Canada subsequently filed an appeal of her ruling, in mid-November, to the Federal Court of Appeal, asking them to overturn it.
During Wednesday’s hearing, which lasted about two-and-a-half hours, Brodkin, JNF Canada’s lawyer, asked the judges for a retraction of the official publication in the Canada Gazette, so that all legal appeals can be pursued. Barring that, JNF Canada wanted a temporary retraction, with CRA promising not to lift it for 30 days. Brodkin suggested they would even be happy for “some shortening of the 30-day period”, he told the court.
The three justices hearing Wednesday’s arguments also heard from the legal team representing the minister of national revenue, which oversees the CRA.
Government lawyer Linsey Rains repeated the concern she has raised previously, which is that JNF Canada is court shopping, having now filed a total of four appeals in two courts. The government lawyers feel the Federal Court of Appeal was the right body, not the Federal Court.
“The appellant is effectively asking this court to recognize a new and incidental form of litigation, whereby a charity facing revocation, will be able to choose between seeking a stay of publication at the Federal Court, the Federal Court of Appeal, or both,” Rains told the court.
One of the judges also expressed her concerns about what the proper court might be in these charity cases.
“It is a bit of a can of worms,” Rains replied. “We are all seeking to know where to go when you are disputing something.”
Had the Federal Court of Appeal ruled in JNF Canada’s favour right away, before 3 p.m. on the day of this hearing, lawyer Andrew Brodkin said a retraction of the revocation could have been published as early as this Saturday, May 31.
In fact, the court heard that the minister of national revenue staff have already “taken steps” to speed up the process of publishing a retraction in the Canada Gazette, should the Federal Court of Appeal order it. That is because there are tight deadlines to receive official notices and turn them around in time to be printed in the Gazette’s weekly editions. These come out online on Fridays at 2 p.m. and go into effect the next day, on a Saturday.
“The circumstances are grave, unique and time sensitive,” Brodkin told the court. “I’m told the government is standing by.”
However, the judges reserved their decision on the case, so the urgency is a moot point, sources told The CJN.
JNF Canada has several other legal files still pending. The two original ones from July 2024 both seek the minister’s decision be overturned. However, until the outcome of this special hearing is decided at the Federal Court of Appeal, the charity has asked the Federal Court of Canada to put that case on hold.
After the hearing concluded, JNF Canada’s CEO and the president of JNF Canada sent out a message Wednesday to their supporters and donors, with an update about the original court filings.
“We are still trying to obtain the complete evidentiary record from CRA that will be put to the Court. There is no hearing date yet for the statutory/underlying appeal,” said the statement from Nathan Disenhouse, the president, and Lance Davis, the CEO. “We will certainly share more information as we get closer to this appeal.”
Since the tax dispute came to a head last summer, JNF Canada has been continuing to hold events, arranging trips to Israel, and has mounted their traditional annual Negev dinners across the country. Some of these galas feature former Israeli hostages Noa Argamani, and singer Yuval Raphael, who came in second in the recent Eurovision contest.
The charity has partnered with the Israel Magen Fund of Canada, a registered Toronto-based charity, which can issue receipts for donations to the JNF’s post-Oct. 7 rebuilding and resiliency projects in Israel.
While JNF Canada itself can not directly issue tax receipts, it has also begun an emergency fundraising campaign to rehabilitate the Canada Park forest near Jerusalem, which was mostly burned due to wildfires on April 30 and May 1.
