Thank you for the question.

As we have indicated in previous testimony, it is indeed the case that our charities registration and regulation are conducted solely by officials in the department, without direction from the minister or the minister's office.

Charities play an important role in society and as you mentioned, there is a significant volume of business that they do, and there are significant tax benefits that come that are provided in support of the charitable sector. With those advantages and benefits comes the responsibility to comply with charities rules, charities law. That is the role that we play in trying to do our best to do two things effectively.

First, we make sure that the sector can clearly understand what those rules are and why those rules are important. We work very comprehensively with the sector on an education-first approach to make sure that we are providing the kind of information that charitable organizations need to understand the law and to be able to comply with the law. We place a lot of effort on that, and we view that as being very important, because the best kind of compliance is voluntary compliance. We also have a responsibility, I think, to take action where we feel that perhaps not all of the rules are being fully followed. We monitor that sector on an ongoing basis. We assess organizations at the point where they seek registration to determine whether or not they are able to be registered as a registered charity.

Second, after registration, we have an annual monitoring process where we review the information returns that all charities have to provide on an annual basis. We use that to identify potential issues. We monitor media coverage. We act on referrals that come from within our own organization as we are doing regular tax administration, but also from external parties, if any of those come forward.

Our annual audit program is actually relatively small compared to the number of charities that are out there. In any given year we conduct audits only on roughly 1% of all charities, so that's 700, 800, or 900 per year. Of all those, only a very small number, 1% to 2% at the end of the day, do we actually have to impose some kind of sanction action on, or in the extreme, revocation.