CRA Cracks Down on Religious Organizations

By Bethany Lindsay
Local Journalism Initiative Reporter

Canadian tax authorities revoked the charitable status of 29 organizations for serious violations in 2025, including churches, religious foundations and overseas aid groups accused of misusing funds, failing to account for donations and repeatedly breaching federal tax rules.

The enforcement actions by the Canada Revenue Agency (CRA) affected Christian, Jewish and Palestinian aid organizations, with investigations uncovering problems ranging from questionable personal expenses by church officials to inadequate oversight of money sent to Israel, Palestine, Jordan, India and the Democratic Republic of the Congo.

An analysis by the Investigative Journalism Foundation (IJF) found that eight of the 29 charities whose registrations were revoked following audits were Christian organizations, accounting for more than a quarter of serious revocations.

That was an increase from 10 per cent in 2024, although charity experts cautioned that Christian organizations represent nearly one-third of Canada's more than 85,000 registered charities.

“The numbers are high,” longtime charity researcher Don McRae told the IJF. “You don't expect churches to be doing things that are off, that are not following the rules.”

The common thread running through the investigations was the failure of charities to demonstrate how donated money was being spent, who controlled it and whether the funds were being used for legitimate charitable purposes.

In several cases, organizations had previously signed compliance agreements promising to correct deficiencies identified by CRA auditors, only to face revocation when subsequent investigations found the problems persisted.

Among the cases was that of Ontario pastor Iain MacDonald, who was connected to three churches whose charitable registrations were revoked.

LightCity Church in Fort Erie lost its status in November after auditors identified undue private benefits, failures to devote resources to charitable purposes and the involvement of an individual deemed ineligible to control a registered charity.

According to the CRA, that individual was MacDonald, who had previously been associated with Victory Christian Centre and Gateway City Church, both of which lost their charitable registrations.

Auditors examining Victory Christian Centre found charity funds had been used to pay personal expenses, including maintenance costs for a motorcycle transferred to MacDonald for $1.

The investigation also identified church-funded trips involving MacDonald and his family to Algonquin Park, Florida and Cyprus. Expenses associated with the Cyprus trip included spa treatments and men's jewellery.

The CRA concluded that these expenditures represented personal benefits rather than legitimate charitable spending. LightCity disputed allegations that MacDonald exercised control over its operations.

Financial oversight problems also extended to organizations sending humanitarian and religious aid overseas.

Montreal-based Medical Aid for Palestine Association, established in 1984 to assist Palestinians, lost its registration in November after the CRA determined it had failed to correct longstanding compliance problems.

Auditors found the charity could not adequately demonstrate how money sent to Palestine and Jordan was being used.

Records were missing or incomplete, some documents were supplied in languages other than English or French, and the organization could not produce a receipt for a $620,000 donation.

According to charity tax filings reviewed by the IJF, the organization had reported no spending on charitable programs or gifts to other charities for at least five years, while more than 96 per cent of its expenditures were classified as other expenses.

Similar concerns led to the revocation of the Canadian Foundation for Masorti Judaism, which CRA auditors accused of transferring funds to organizations in Israel without demonstrating sufficient oversight.

The agency said the foundation had acted as a conduit for funding recipients without Canadian charitable status while allowing another organization, Mercaz-Canada, to influence decisions over its resources.

Canadian charities can provide grants to organizations without Canadian charitable status, provided they demonstrate that the money supports legitimate charitable activities.

Another organization, the Herut Canada Charitable Foundation, had its registration revoked after auditors said inadequate documentation prevented a meaningful review of its activities.

The investigations also extended to Africa and South Asia.

L'Assemblée Nouvelle Alliance, a Christian charity based in Scarborough, Ontario, lost its status following questions about funds intended to support church construction in the Democratic Republic of the Congo.

The organization purchased two plots of land in 2016 and 2022, but no churches had been constructed. Auditors also found that money transferred through an individual could not be adequately traced to the intended construction work.

In Winnipeg, Evangelical World Outreach of Canada lost its registration after failing to provide sufficient documentation showing how funds sent to rural India for missionary activities were managed.

The organization had signed a compliance agreement in 2020 promising stronger oversight, but subsequent auditors found missing agreements, meeting minutes and spending records.

The Mazel Charity Fund of North York, Ontario, also lost its registration after auditors said it failed to provide adequate records of revenues, expenses and charitable activities despite an earlier compliance agreement.

Despite the findings, charity experts warned against interpreting the revocations as evidence of widespread wrongdoing across religious organizations.

Rev. John Pellowe, CEO of the Canadian Centre for Christian Charities, which represents about 3,200 organizations, said the CRA's actions were justified where serious violations occurred.

“Sometimes people think their sector is being persecuted or highlighted, and that's not really the case,” he said.

“It only takes a few bad apples to ruin the reputation of either all charities or a significant subsector of charities.”

The 29 organizations revoked for serious breaches represented only a small fraction of the more than 1,900 charities that lost their registrations in 2025. Most other revocations resulted from voluntary closures or failures to file required returns.

The enforcement actions come amid a broader decline in Christian charities across Canada.

Research by McRae identified a net loss of 295 Christian charities in 2023, with smaller congregations particularly vulnerable to declining revenues and financial pressures following the COVID-19 pandemic.

McRae warned that church closures could hurt communities where congregations provide meeting spaces, youth programs, thrift shops and other social services.

“You're losing part of the community glue,” he said.

Charities that lose their registration can challenge the CRA's findings through the courts. Representatives of several organizations named in the investigations did not respond to requests for comment from the IJF.

This report combines investigations originally published by the Investigative Journalism Foundation through the Local Journalism Initiative.