Yves Engler, The Electronic Intifada 13 January 2011

Photo Israeli colony Har Homa in the occupied Palestinian West Bank.

Canada’s tax system currently subsidizes Israeli settlements that Ottawa deems illegal, however, the Conservative government says there’s nothing that can be done about it.

In June of last year, Guelph activist Dan Maitland emailed Foreign Affairs Minister Lawrence Cannon concerning Canada Park, a Jewish National Fund of Canada initiative built on land Israel occupied after the June 1967 War. Three Palestinian villages (Beit Nuba, Imwas and Yalu) were demolished to make way for the park.

A few weeks ago Maitland received a reply from Keith Ashfield, Minister of National Revenue, who refused to discuss the particulars of the case but provided “general information about registered charities and the occupied territories.” Ashfield wrote that “the fact that charitable activities take place in the occupied territories is not a barrier to acquiring or maintaining charitable status.”

This means Canadian organizations can openly fundraise for settlements Ottawa (officially) deems illegal under international law and get the government to pay up to a third of the cost through tax credits for donations. To justify the government’s position, Ashfield cited a September 2002 Federal Court of Appeal case (Canadian Magen David Adom for Israel v. Minister of National Revenue), which reversed the Canadian Revenue Agency’s previous position.

The exact amount is not known but it’s safe to assume that millions of Canadian dollars make their way to Israeli settlements every year. In 1997, when it was more of a legal grey area, tax lawyer David Drache claimed that “there are hundreds of [Canadian] organizations … supporting organizations directly or indirectly beyond the Green Line,” referring to the internationally-recognized armistice line between Israel and the occupied West Bank.

In the late 1990s, Israel’s largest settler group, Yesha, raised more than $700,000 a year in Canada. When former Israeli Prime Minister Ariel Sharon visited in the mid-1990s, the Canadian Arab Federation’s Jehad Aliweiwi said he “left with more than $1 million in tax-deductible funds, with no secret as to the destination.” Through the 1990s the Press Foundation was probably the largest known source of funds for settlements, raising as much as $5 million annually for settlers in the occupied West Bank town of Hebron and in the occupied Golan Heights, which was captured from Syria in 1967.

Illegal settlements are not the only questionable activities in Israel that Canadians subsidize through their tax system. A mid-1990s survey found more than 300 registered Canadian charities with ties to Israel, a relatively wealthy country. Every year Canadians send a few hundred million dollars worth of tax-deductible donations to Israeli universities, parks, immigration initiatives and, more controversially, “charities” that aid the Israeli army in one way or another.

One example is Aid to Disabled Veterans of Israel or Beit Halochem (Canada), which brings soldiers singled out as heroes by the Israeli military on trips to Canada. Many Canadians, including the Charles R. Bronfman Foundation, support the Libi Fund — “The Fund For Strengthening Israel’s Defense.” In early 2008, Major Gil Chemke, a member of the Israel’s elite search and rescue team, toured the country on behalf of the Canadian Magen David Adom for Israel (CMDAI), which operates in the occupied West Bank. Established to assist wounded soldiers and the population during disasters, CMDAI has raised millions of dollars. Chemke drummed up financial contributions for CMDAI by showing “behind-the-scenes video footage of a rescue operation in Lebanon for a female air crew member whose helicopter was shot down by Hizballah” during Israel’s 2006 invasion of Lebanon.

Established in 1971, the Association for the Soldiers of Israel in Canada (ASI) provides financial and moral support to active duty soldiers. In 2009, ASI (Canada) — which provides tax receipts through the Canadian Zionist Cultural Association — and El Al airlines granted a 50 percent discount on flights to Israel from Canada for families of “lone soldiers” who join the Israeli military.

While it’s legal — and government will foot part of the bill — to finance charities linked to a foreign army responsible for numerous war crimes and settlements that contravene international law, Ottawa has made it illegal for Canadians to aid a hospital operated by the elected Hamas government.

Ottawa’s post-11 September 2001 terrorist list makes it illegal to financially assist Hamas, the Popular Front for the Liberation of Palestine, the al-Aqsa Martyrs’ Brigade, the Abu Nidal Organization, the Popular Front for the Liberation of Palestine-General Command, the Palestine Liberation Front, the Palestinian Islamic Jihad and groups associated with these organizations. Only one Israeli group, the marginal Kahane Chai, is on the list.

On 25 December, Hamas criticized Canada for re-listing it a “terrorist” entity. “The decision is a clear bias to Israel,” Hamas spokesman Fawzi Barhoum told Xinhua. “This encourages Israel to commit more crimes against the Palestinian people.”

Ottawa makes it difficult for Canadians to support many Palestinian groups all the while subsidizing expansionist and militaristic Israeli institutions. Canadians of good conscience should protest and demand change.

Yves Engler’s most recent book is Canada and Israel: Building Apartheid