Immediate Revocation is an Access to Justice Issue
Adam Aptowitzer

Access to Justice issues rank high on the legal profession's concerns for society as a whole. The term is usually used in reference to those who simply cannot afford to hire a lawyer to defend themselves in court. This is a particular concern in the criminal context, where the state, with its vast resources and infinite sources of funds can basically afford to out litigate an accused. For this reason, the state pays the legal fees for qualifying individuals facing certain legal issues. A qualifying person, accused of even the most heinous crime, can receive legal aid to ensure that the state does not use its resources to simply force the accused into submission.

Charities also have limited resources. From a dispute resolution perspective this can force a charity to give up on an appeal which, depending on certain backlogs, can take years from the time of receiving a Notice of Intent to Revoke (an "NIR") to a decision by the Federal Court of Appeal. Readers will remember that once a charity receives a NIR it has ninety days to file a Notice of Objection. However, the revocation is not finalized until the CRA publishes notice of the revocation in the government newspaper - the Canada Gazette.

While the CRA can publish this notice 31 days after the NIR is sent to the charity, as a matter of policy, it allows the charity's appeals to run out prior to publishing notice. Amongst other things, this allows the charity to issue tax receipts to help fund its appeal. However, the CRA takes the opposite position in cases where it deems the violation serious and finalizes the revocation as soon as possible.

From a practical perspective, things can go from moving very slowly to revocation on a timeline determined almost exclusively by the CCRA. For example, a charity can undergo an audit and receive a letter outlining the results of that audit months, if not years, later. Assuming the charity responds, it can be another several months (or years) before the next letter. This letter may very well be a NIR informing the charity that its status will be officially revoked in approximately 30 days.

In this way, the CRA has not only accused the charity of what it terms a 'serious' violation but by revoking the charity's status (and its ability to issue tax receipts) it usually stifles the charity's ability to defend itself thus ensuring that the charity in its sights is never heard from again.

Until now, it seems that the CRA has used this tactic primarily against tax shelter charities but even in these circumstances the policy should be reconsidered. (We would also point out that the CRA can act in this manner against any charity regardless of the severity of the infraction). No government agency, even if the matter is not a criminal one, should have the power to both accuse an organization and then affect its ability to defend itself. And if the CRA justifies the policy on the basis that it is preventing the charity from causing harm, then it should be forced to prove that in court prior to finalizing the revocation. While this may require new legislation, and put the charitable community in the unenviable position of defending the worst in the sector, the fundamental problem in allowing a government agency to deny, in a practical way, the right for a charity to defend itself is an affront to democracy and a danger to all charities.