Even amid the perception of urgency in the fall of 2001, federal legislators introducing the unprecedented powers under Canada’s new anti-terrorism legislation recognized that these powers would need to be periodically reassessed and monitored by Parliament.

But although charities are the specific focus of a substantial portion of the anti-terrorism legislation, there has historically been little recognition by Parliament that the legislation poses any ongoing impediment to the operations of charities.

However, with the publication of the final report of the House of Commons Subcommittee on the Review of the Anti-terrorism Act, there seems to be the first echoes of acknowledgement from Parliament of the distressing reality that charities face under this legislation.

The report recommends substantial changes to the Charities Registration (Security Information) Act, legislation that was overhauled by the ATA to include the process of issuing a "certificate", by which a charity is essentially deregistered, including:

a) “Due diligence” defence for charities facing deregistration: the Act be amended so the Federal Court judge considering a certificate will not find the certificate to be reasonable where a charity establishes that it exercised due diligence to avoid the improper use of its resources under the Act.

b) Creation of “best practice” guidelines for Canadian charities: Canada Revenue Agency consult with the charitable sector and develop best practice guidelines to provide assistance to charities in their due diligence assessments. The subcommittee recognizes that there is "little practical guidance” in Canada that would assist charities in introducing due diligence procedures.

c) Institution of a knowledge (mens rea) requirement: the words “the applicant or registered charity knew or ought to have known that” be added into relevant sections of the Act to institute a clear mens rea requirement.

d) right to appeal a finding of reasonableness: a charity be able to appeal to the Federal Court of Appeal a decision by a Federal Court judge that a referred certificate is reasonable. The subcommittee recognizes that the certificate process, as it currently exists under the Act, is “parallel” to the deeply controversial security certificate process under the Immigration and Refugee Protection Act and that the recommended changes are needed to begin to remedy the certificate process.

There are several other recommended legislative changes that would impact charities in the subcommittee’s report, including:

• that a Panel of Special Counsel be established to test the need for confidentiality and closed hearings, and to test the evidence not disclosed to a party in proceedings. The situations that the Panel of Special Counsel would participate in would be the proceedings surrounding the establishment of “listed entities”, the deregistration process under the Act and the security certificate process under the IRPA; and
• that section 145 of the ATA be amended to require another comprehensive review of its provisions and operation, no later than December 31, 2010.

The House subcommittee report is a marked departure from a Senate subcommittee report on the ATA that was released earlier this year. The Senate report, though recognizing many of the same problems with the Charities Registration Act as the House subcommittee, recommended very little change to its substance.

As well, while the recommended changes briefly touched on by this article are a significant step forward for charities, there are many other recommendations of a general scope from the House subcommittee that are potentially of concern to charities, including the recommended creation of a new Criminal Code offence for the “glorification of a terrorist activity for the purpose of emulation”.

With many of the recommended changes mirroring those proposed by the Canadian Bar Association Anti-terrorism Committee in submissions to government made in 2001 and 2005, the House subcommittee report goes a long way to recognizing that Canada’s existing anti-terrorism legislation can have a considerable negative impact on charities and needs to be changed.

Its recommendations seek to provide some protection and assistance for charities employing integrated and effective anti-terrorism due diligence procedures, and recognize the necessity of those procedures for charities under Canada’s legislative and regulatory regime. The ultimate impact of the recommendations, and whether these recommendations will translate into any legislative or regulatory changes, however, remains to be seen.