There is another Federal Court of Appeal case dealing with the test for having the courts delay the publication of a notice of intention to revoke by CRA.  It is called Ahlul-Bayt Centre, Ottawa v. Canada (National Revenue).  In September 2017 the CRA advised the  Ahlul-Bayt Centre in Ottawa of its intention to revoke their charity status.  CRA wanted the revocation to take place within 30 days.   The Centre wanted to stop the publication of the notice of intention to revoke until much later citing the irreparable harm that would be caused by loss of charitable status.  The Court decided “Taken as a whole, the evidence is in our view insufficient to establish irreparable harm.”  The Court dismissed the application.  This case shows that it is difficult to show “irreparable harm” to delay revocation. 

The decision notes:

[6]  The Charities Directorate of the Canada Revenue Agency is responsible for ensuring that registered charities comply with their statutory obligations. The Directorate conducted an audit of the Centre’s books and records for 2009 and 2010. It concluded that the Centre was in serious non-compliance with statutory requirements. Among other things, it concluded, the Centre

●  failed to demonstrate that it was constituted for exclusively charitable purposes;

●  failed to demonstrate that it devoted its resources to charitable activities by purchasing and holding title to a property in Montreal for the primary use of another, unregistered organization, and conferring inappropriate benefits;

●  failed to maintain and provide proper books and records; and

●  contravened the receipting requirements of the Act by providing blank receipts to the unregistered organization to help it collect funds, issuing official receipts for tuition payments in excess of the eligible portion of these payments, and issuing donation receipts not in accordance with the Act and the Regulations.

[7]  The Centre was given an opportunity to respond to these concerns, and submitted two letters in response. After reviewing these submissions, the Directorate concluded that the Centre’s registered status should be revoked. It issued a notice of intention to revoke dated September 7, 2017, advising that registration would be revoked after 30 days. A senior official in the Directorate has deposed that the decision to revoke immediately after 30 days, rather than await the outcome of the objection and appeal process, was based on the seriousness of the Centre’s contraventions of its statutory obligations and the resulting harm to the public.

The charity made the case that revocation would cause irreparable harm:

[16]  In paragraph 52 of its memorandum, the Centre puts its case on irreparable harm as follows:

The irreparable harm to ABCO will be that the School will be forced to close within one or two months if Publication is not delayed. Publication will crystallize the revocation of ABCO’s charitable tax status and ABCO will be prohibited from issuing charitable tax receipts. Parents who cannot afford the School’s tuition without the charitable tax receipts will have to withdraw their children from the School. Publication will negatively affect ABCO’s reputation in the community, which will likely cause more students to withdraw from the School. These withdrawals will reduce the School’s tuition revenue and donor base, which in turn will reduce the funds available to subsidize lower income families’ tuition. The result will be that even more parents will not be able to afford tuition and will have to withdraw their children. The loss of tuition revenue and the reduction of the donor base for School related fundraising will make ABCO financially incapable of operating the School, leading to its closure.

 The Court then responded with:

[18]  In our view, the evidence that the Centre puts forward to support the chain of events leading to irreparable harm does not meet the required standard. Among other things, the evidence as to the Centre’s financial position is unclear or incomplete. The evidence that significant numbers of parents would withdraw their children from the school within one or two months is also neither clear nor compelling.

[19]  I will provide some examples.

●  The Centre has provided no supporting documentation that would disclose and clarify its current financial position. Its current budget is not before us. There are also no current cash flow statements, reports on donations, or statements of future funding requirements.

●  The affidavits on which the Centre relies in asserting that so many students will leave the school that it will have to close within one or two months were sworn in September and October 2017. At the time they were sworn there were still some eight months remaining in the school year. It is now March 2018, and only some three months remain. According to the evidence, students who leave the school before the end of the school year must give two months’ written notice and pay tuition fees for the two month period. There is nothing in the evidence that addresses the impact of the current timing on parents’ decision-making. It appears far from probable that significant numbers of parents would withdraw their children when doing so would oblige them to pay two months’ tuition in any event, and to find new schools for their children for the short period remaining in the school year. The timing relative to the end of the school year distinguishes this case from Cheder Chabad, above, on which the Centre heavily relies.

●  There is evidence from only one parent as to the withdrawal of students from the school if the Centre is no longer able to issue tax receipts. He has three children at the school. He testifies only that without a tax receipt, he “would likely need to withdraw one or more of [his] children,” and goes on to say that he “[does] not know if [his] family would qualify for a subsidy.” His evidence also provides no particulars of his financial situation, and does not address the fact that the end of the school year is approaching.

●  There is also evidence from only one parent concerning the impact of losing subsidies. He testifies only that if the subsidy ended, he “[does] not think [he] could keep his children at the School.” He too provides no details of his financial position.

●  It appears from the evidence that 23 families have applied for subsidies, and that subsidies amount to $140 per student per month. The provision of subsidies for the remainder of the school year, even assuming all of the applicants for subsidies received them, would entail only a relatively modest expenditure.

●  While the Centre asserts that “[t]he loss of tuition revenue and the reduction of the donor base for School related fundraising will make ABCO financially incapable of operating the School, leading to its closure,” it has not, as noted above, provided its current budget or other supporting financial information. Nor has it addressed the findings of the Directorate that it operated at a net surplus in every year from 2009 to 2015. Its financial statements for 2016 also show an excess of revenues over expenditures of $307,242.There is no evidence satisfactorily explaining how this surplus position squares with the affidavit evidence submitted by the Centre that the school is operating at a deficit.

●  The evidence indicates that the Centre has unencumbered real property assets valued at approximately $2.9 million. While there is evidence that it would be difficult and time-consuming to sell any of these assets or to use them as a source of financing, there is no evidence to demonstrate any efforts that the Centre has made, particularly since the Minister’s September 2017 notice, to do so.

[20]  Further examples could be cited. Taken as a whole, the evidence is in our view insufficient to establish irreparable harm. Given this conclusion there is no need to consider the third, balance of convenience part of the test.

[21]  For these reasons, the application is dismissed with costs.