The CBC recently reported “Some Toronto-area mosques remain open despite dire warnings about COVID-19“.   This might be a problem for a number of different religious groups.

It is important for charities from a charity regulation point of view to have not only objects that are charitable but also to have a public benefit.   If you undertake or allow your facilities to be used for reckless activities then you could have more of a dis-benefit than a public benefit.    So if you endanger your adherents and there is more prejudice than public benefit from your organization operating, then expect that you could lose your charitable status in addition to many other consequences that are even more dire.   If you lose your charitable status you will need to disgorge any assets within a year or face a penalty equal to be assets.

Here is some guidance from CRA dealing with charities and risk:

4.2 What if a charity’s activity puts people at risk?

If a charity or applicant’s activity exposes anyone to the risk of harm, it may affect its charitable status.

If an organization’s activity is likely to result in harm to the charity’s staff, the beneficiaries of its programs, or any other person, this harm is taken into consideration when assessing whether the public benefit test is met. To meet this test, a substantial net public benefit is required. If no substantial net public benefit is provided, the organization will fail the public benefit test. A charity could lose its registered status, and an applicant will not be registered as a charity.

On a practical level, the CRA recognizes that many situations and activities involve some element of risk. Sometimes it is not possible to predict all outcomes and hazards of certain activities, particularly in quickly changing international environments. However, a charity or applicant should be able to show an awareness of the level of risk an activity poses versus the benefit that can be provided. If the charity intends to proceed with the activity, the charity should have an appropriate plan to mitigate significant risks to an acceptable level.

The facts of every situation are different, and it is not possible to provide a comprehensive guide of how to manage risk for all activities. However, the CRA will usually look at the following types of factors to establish whether a charity is doing enough to evaluate and manage the level of benefit to risk:

  • the likelihood and nature of harm to anyone delivering the activity, receiving the benefit, or otherwise affected
  • the urgency of the need for charitable assistance (for example, an activity that helps desperate people in regions affected by a disaster, or in war zones)
  • the experience of the charity or applicant operating in situations with significant risk
  • the charity’s proposed measures to mitigate any significant risks

 

Practically for groups who act recklessly without regard for the health of the public expect that litigators and especially class action lawyers may be very busy suing such groups in the future.     Expect that there will be large judgements, that judges will in some cases “pierce the corporate veil” so that there could also be personal liability or liability for related corporations in Canada and outside of Canada.   If you have judgements against your church, synagogue, mosque, temple then expect that the assets including the buildings (and perhaps even your personal residence and personal assets) will be taken to satisfy the judgements.  If 5 people die and the judgment is $5 million per person then you have a $25million dollar judgement.   It is not only deaths – if people get coronavirus and suffer and it creates a disability the life long impact can be even greater than death.   By the way, even if you are successful in defending the lawsuit expect that the legal costs might be very significant and having to deal with lawsuits that can last years may result in the organization just going under.

Keep in mind that if for example, a person dies from coronavirus that they got from the clear negligence of an institution it will not be that person suing the religious organization – it will be their estate which might have estate trustees who are not as sympathetic to the religious group.

There are also other tools available at the hands of law enforcement and public health authorities to deal with groups or individuals who are putting the safety of others in danger.