Reopening Tax Courts in Canada after COVID-19 Closures

Across many nations, the COVID-19 pandemic has either slowed, or completely halted the use of the court and judicial system in an effort to stave off the spread of the virus. Canada has been no exception to these practices, and now is preparing to cope with a massive influx of lawsuits from the backlog. With the judicial system in Canada already being fairly busy prior to the COVID-19 pandemic, the government and the Supreme Court of Canada have made the executive decision to be more creative with some of the proceedings.

As with many other organizations with capacity to work virtually, the courts in Canada will be pivoting to an online hearing system until they receive clearance to return to the physical courtrooms.

In addition, the courts are predicted to become even busier in the coming months when a large number of COVID related suits make their way through the system.  Employment lawyers are busier than usual as compliance standards for constructive dismissal, wrongful termination, and occupational health and safety legislation have been breached by hundreds, maybe even thousands, of employers across the nation.

Nearly 98% of Canadian business is classified as small businesses with fewer than 100 employees. Furthermore, 53.8% of these small businesses are micro-enterprises with fewer than 4 employees. This has led to a situation where thousands of people are without detailed and systematic HR and legal departments who would normally create employment agreements that would remain enforceable against the pressure of a global pandemic. Many of these business owners are also likely not HR, legal or even business professionals, and therefore are not well versed in the relevant labor laws that apply to their specific situations.

As we start to see the aftermath of the pandemic, many employees are realizing that their employers may have violated their rights as employees, and sometimes even their human rights, over the past three months. These realizations are creating this upsurge in capacity within the Canadian judicial system.

In order to streamline the proceedings, a process called the Fast Track Settlement Conference System has been created. The Tax Court of Canada, starting July 27, 2020, will specifically use this program for general procedure appeals only and must be agreed upon by both parties in the dispute. This program has delivered a creative method to begin to ease up the backlog of cases that will be blocking up the Canadian judicial system. Although slated to be a temporary system, it might remain in place for the foreseeable future in order to reduce the wait time for a hearing.

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