By Mark Blumberg

I recently read on a blog with some statistics relating to the number of audits that the Charities Directorate of CRA was conducting each year. Frankly, I could not believe the numbers, so I wrote to CRA to ask them for up-to-date information.

Here is the response I received from the Charities Directorate:

Please find attached a table containing the number of completed audits of registered charities for the 2020-2021 fiscal year, as well as the completed audits for the last ten fiscal years. These audit statistics are reported by fiscal year, from April 1st to March 31st.

 As you will note, the number of completed audits for the 2020-2021 fiscal period differs from the audit statistics you referenced. This was an oversight on our part and we have shared the revised table with the other implicated parties.

 While you may note a decrease in formal charity audits, the CRA has actually increased its compliance coverage through other initiatives. As part of its ongoing efforts to ensure charities meet the requirements of registration, the Charities Directorate uses a multi-streamed approach to compliance. This involves various audit and non-audit interventions, depending on a registered charity’s risk of non-compliance:

  • Non-audit interventions focusing on early education provide charities with the opportunity to resolve lower-risk cases of non-compliance before they get worse.
  • Audits are reserved for isolated cases where charities demonstrate a risk of engaging in more serious non-compliance.

 Balancing its compliance program in this manner allows the CRA to:

  • increase the overall number of registered charities with which the Charities Directorate interacts before enforcement action is required;
  • address lower-risk non-compliance among a broader segment of the charitable sector through education or compliance agreements; and,
  • dedicate its audit resources to those registered charities that demonstrate a higher risk of engaging in more serious non-compliance.

 In addition, all charity audits were put on hold on March 16, 2020, due to the COVID-19 pandemic. In line with the CRA’s business resumption plan, high-risk audits, meant to address the most serious non-compliance, resumed in July 2020, with remaining charities-related compliance activities having fully resumed in September 2020.

 For more detailed information and statistics about the CRA’s Charities Directorate’s programs, go to Reports on the Charities Program.


Above is the number of completed audits from the 2010-2011, to 2020-2021, fiscal periods. Note, the number of completed audits is reported by fiscal year (April 1st to March 31st) and not by calendar year.

Let’s cut through this:

  1. Typically, CRA had done in the past about 800 audits per year (perhaps 600 in-person audits and 200 office audits where CRA just asks for documents to be sent). That is the first column. With 86,000 registered charities that means that they were auditing less than 1 percent of charities each year. Put a different way if you were randomly assigned to a charity and you are a teenager the likelihood is that you would die of old age before CRA audits the charity. That is pretty bad. I remember dealing once with a class of foreign graduate students studying non-profit finance and financial controls — when I mentioned these stats they started laughing. I was not sure why. They explained that auditing 1 in 100 groups every year seemed very funny.  But unfortunately, it gets worse. Much much worse.
  2. If you look at pre-COVID April 2019 to March 2020 (as COVID changed a lot of things) that number had dropped to 208. So no more 700-800 charity audits per year. Now your charity would be from a statistical point of view likely to be audited every 400 years.
  3. I should emphasize that CRA does not really randomly audit charities. They take a risk-based approach to audits and focus on higher risk concerns. But if you are auditing 1 in 400 charities per year, no matter what system you have developed to conduct your risk-based audits it is going to leave a lot of charities out that are doing some very bad things and CRA is not auditing them.
  4. CRA piloted the Charities Education Program in 2016. It takes CRA charity auditors and pairs them with new charities that have been recently established to “educate” them early on about appropriate practices. It certainly sounds like a nice idea. However, it is a Cadillac program in that a group that has just received charity status gets to meet with a CRA officer. Many charities would take CRA up on this program in their early years if they could — but you cannot request participation. It is conducted by auditors — not necessarily trained to be educators. Most of these charities I am going to guess tend to be relatively small and low-risk groups. I had reservations about the Charities Education Program because it is so expensive and now appears to have in part resulted in a massive reduction in the number of actual audits being conducted by CRA. CRA should immediately cancel that program and focus on more audits and more general educational and capacity-building programs, rather than one on one ‘consulting’ with a few lucky small charities.
  5. It is not clear what the non-audit interventions counts. CRA has often done special programs that don’t involve audits. For example, they would sometimes write to thousands of charities to let them know that there are some obvious mistakes on their T3010 annual charity return and they should try harder next time. That sort of program is helpful but a hundred or 200 non-audit interventions are not going to make up for the precipitous decline in audits.
  6. As you can see COVID had a very limited impact. Audits were only suspended from March to July 2020. Therefore, the 2020-2021 number of 142 probably would have been closer to the 2019 number of 208 audits. So, one cannot blame the precipitous decline in audits on COVID.
  7. Some may think that the reduction in audits is esoteric and unimportant. Keep in mind that the charity sector has revenue of over $300 billion per year. About $20 billion in official donation receipts are issued by registered charities. Registered charities pay no income taxes on the $300 billion in revenue or the appreciation of their $500 billion in assets. Different levels of government are providing over $160 billion in funding to the charity sector. You can see more statistical information in our Blumbergs’ Canadian Charity Sector Snapshot 2019.
  8. Provinces have made it clear that they generally don’t want to be involved in the regulation of charities and to be fair it is far better for most charities that operate nationally or in more than one province to have 1 regulator rather than 14 different charity regulators with different rules. With the very negative media coverage over the last few years about charities, including but not limited WE Charity, it appears that we did we not learn anything. Public trust in charities has gone down significantly over the last ten years and if we don’t do something to limit the damage of a small number of questionable or bad charities at some point there will be almost no public confidence in the charity sector left.
  9. You might say that I am being overly negative. So let us end on a positive note. If you are a libertarian and don’t believe that government should have any involvement in your life, then you will be very pleased with this news. “My body, my choice”. In this case ‘my charity, my choice of which laws I will comply with’. If you are a charity scammer now may be the golden age for you to operate in Canada. Little likelihood you will ever be audited or face consequences for abusing the charity system in Canada.


The National Post on January 21, 2022 published an article by Christopher Nardi “Charity sector worth $300B per year, but CRA audits have dropped four-fold since 2010“. It discusses the dramatic decline in CRA audits which were previously raised in December 2021 in our blog note at Dramatic changes to charity audits by CRA over the last few years.

Hopefully, in future years, CRA will come up with a truly risk-based strategy for audits that provides enough funds to audit a sufficient number of charities so that the public can have some confidence when they donate to registered charities that these registered charities are complying with basic compliance requirements.


Mark Blumberg is a lawyer at Blumberg Segal LLP in Toronto, Ontario. He can be contacted at or at 416-361-1982. This article is for information purposes only. It is not intended to be legal advice. You should not act or abstain from acting based upon such information without first consulting a legal professional.

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