Tax Court update on getting back to business – Top ten takeaways

On Friday, May 15, Chief Justice Rossiter of the Tax Court of Canada ("TCC") provided an informative status update on the TCC during the COVID19 shutdown and preparing for eventual reopening. While we hope our summary of highlights is helpful, readers are encouraged to check the TCC's rules, practice notes, directions and orders, to ensure all necessary steps are being taken to properly manage their TCC appeals.

1. The TCC understands that taxpayers and their advisors want to advance their appeals and the TCC wants to get "back to business" as soon as possible. However, the health and safety of everyone concerned is of paramount importance and the anticipated reopening of the TCC will be cautious and gradual.
2. The TCC does not ultimately control the timing or manner of its reopening. The national courts operate with the support of the Courts Administration Service ("CAS") for all staff and facilities, among other things. The CAS is essentially a government body that is obligated to follow stringent guidelines for reopening (including a governmental "business continuity plan"). CAS leadership may take input from Chief Justices, but operate independently and will ultimately control the timing and manner of reopening.
3. Working at home is currently problematic for TCC staff. The TCC operates primarily with paper files. Paper files cannot be taken from the TCC's premises and since staff cannot work on site, this significantly impairs working from home. While the TCC aspires to eventually operate in the digital domain and is aggressively pursuing a digital strategy, it is not there yet.
4. Protocols after reopening are being carefully prepared in consultation with the CAS and the Deputy Minister of Justice and will need to address, among other things, personal protective equipment, social distancing, screening, records handling/management, judges' travel and reconfiguring courtrooms, including with plexiglass screens. The TCC sits in some facilities managed by the provinces, so various provincial reopening standards and protocols will also have to be followed.
5. The TCC is limited to planning for the unplannable, since the future in the COVID19 context is unpredictable. The TCC has developed, however, three open-ended phases for resuming its operations. First, the staff will begin returning to work, at a date that is unknown. Second, the TCC will declare that it is "open for business" and operational, which will occur on a date the TCC can control, but which is still subject to the first step. Third, sittings will resume, which again will occur on a date contingent on prior steps.
   1. By way of example, if the TCC staff return to work on June 1, their first two weeks would be devoted to catching up and getting digitized information into the TCC's systems.
   2. Steps to reschedule hearings could then commence in two weeks, or as of June 15.
   3. Contact with taxpayers and advisors could begin a week later, on June 22.
   4. For Informal Procedure appeals, some lead time for notification is required, so those cases might start being scheduled for August.
   5. For General Procedure appeals, the Hearings Co-ordinators may seek to schedule hearings for available dates in July and August (the earliest date the TCC would conceivably sit at this point is July 6).
   6. However, this is all hypothetical and based on a notional June 1 return – if June is not an achievable date for staff to return, everything gets pushed forward in time, which would include cancelling scheduled hearings in July.
   7. This general plan is also affected by the percentage of staff who can return – if only 20% of staff can return by June 1, that would be a materially different scenario than if half of them could return by then.
6. Taxpayers and their advisors are strongly urged to accept hearing dates offered by the TCC: declining a date would drop your appeal to the bottom of the queue.
7. Upon reopening for business, the TCC will take the following steps to catch up on the very significant amount of lost time (since mid-March, 1,000 hearings have been cancelled and a total of 136 sitting weeks have been lost):
   1. Two duty judges will be assigned each week
   2. Additional sittings will be scheduled for as long as necessary
   3. Sittings will be limited to the major centres (as opposed to the dozens of smaller centres across Canada where the TCC would ordinarily sit), namely, Vancouver, Calgary, Edmonton, Toronto, Hamilton, Ottawa, Montreal, Quebec City and Halifax
   4. To expedite their hearing, parties may wish to move the venue from the busiest centres to potentially less busy centres (for example, from Toronto to Hamilton)
   5. The usual light summer schedule will be replaced with a full sitting schedule (assuming the TCC can get back to sittings during the summer)
   6. Sittings will take priority over any and all planned holidays
   7. In general, scheduling priority will be given for:
      1. hearings that were already in progress when the shutdown occurred
      2. hearings that were scheduled, but adjourned because of the shutdown
      3. General Procedure appeals
      4. matters involving tax credits, benefits and CPP/EI
   8. Motions will be in writing and all motion hearing days will be cancelled
   9. Judges are continuing to work on their reserves and processing reserves will be a priority for staff once they return to work (no judgments have been published during the shutdown and so an eventual deluge may be expected)
   10. Practitioners should watch for future practice directions and one will be released this week confirming that all sittings in June are cancelled (the TCC plans to advise on the status of July sittings on or about June 25)
8. Amendments to fiscal legislation governing tax appeal deadlines may also be expected.
9. Where a hearing can be conducted without witnesses (for example, where the facts are not in dispute and the appeal will be limited to argument), it may be conducted virtually.
10. The TCC's practice direction dated April 17 modified deadlines under the TCC's control, including all timetable orders, and if parties cannot agree about how the modifications work, they can come to the TCC for a determination. The TCC will be reasonably flexible with scheduling timetables.