Time limits legislation necessary, but proposed bill is too vague

  • June 30, 2020

Statutory filing deadlines and limitation periods in federal legislation have become problematic in the COVID-19 era, when many lawyers don’t have access to the courts, tribunals, or parties whose input they need to carry out their duties.

That’s why the CBA commends the government for its efforts to provide meaningful relief in the form of legislation which outlines potential solutions. But in two separate submissions, a number of CBA bodies have offered a critique of the bill itself and recommendations for improvements. Four CBA bodies contributed to the first submission: the Charities and Not-for-Profit Section, the Intellectual Property Section, the Competition Law Section and the Federal Courts Bench and Bar Committee. The Joint Committee on Taxation of the CBA and Chartered Professional Accountants of Canada along with the CBA Commodity Tax, Customs and Trade Section sent a submission on the bill’s tax implications.

“In the absence of legislation,” the four groups note in the first submission, “the only existing remedy is seeking an extension of time from the courts or tribunals, which is time-consuming and inefficient.”

That said, the CBA has identified areas where the legislation can be improved – for example, the vague nature of a general statutory extension scheme, which it says “runs the risk of creating more uncertainty for litigants. The legislation should clarify with specific language” whether section 6 applies to all regulations and if it doesn’t, should enumerate the federal acts and regulations to which it does apply. The CBA has identified some appropriate additions to the listed acts and regulations.

The CBA suggests that the government shouldn’t make suspensions or extensions of time limits mandatory because that could cause “unforeseen hardship or confusion in cases where extensions are not required. Instead, it says, the government should either allow parties to opt out of a mandatory extension on a case-by-case basis, or make extensions or suspensions available to parties that apply for them.

As well, it is unclear how the draft legislation affects other initiatives, or legislation for which suspension and extensions already exist. The CBA also questions “the effect and burden” of having all deadlines come due on Sept. 14, 2020. Instead, the Intellectual Property Section suggests that it would be better to stop calculating the time during the suspension period, and asks the government to specify what regulations and what time limits will be extended or suspended.

In its submission the Joint Committee seeks to ensure that the proposals will be applied in such a way as to provide flexibility, and to ensure certainty in proceedings under the Income Tax Act and the Excise Tax Act, and they will not permit “suspensions or extensions not justified by the need to avoid unfair or undesirable effects of the COVID-19 crisis.”

“(T)he preservation of acquired rights, and other elements of certainty, would permit taxpayer to plan their financial affairs (including financial statement disclosures) and to make appropriate and reliable arrangements with their employees, their creditors and other stakeholders during these difficult times. In addition, with respect to section 7, if the intent was to provide the CRA with the ability to suspend or extend the time periods for assessment, it should be more clearly stated in the Explanatory Note …”

The Competition Law Section suggests minimizing the length of suspensions or extensions and asks that any delay not apply to the 45-day period in which the minister must screen investments for potential review. It also says the delays or extensions should not apply retroactively to March, when social distancing measures began. It says this would “damage Canada’s reputation as a predictable, rule-of-law jurisdiction in which to invest.” It would also introduce significant uncertainty for recently consummated transactions.

These and other comments were made with a view to making the justice system ore accessible and responsive to the present challenges, the CBA says. “While the short consultation period does not permit a more detailed analysis of the draft legislation on all areas of law, we would welcome an opportunity to comment at greater length on any potential regulations.” Following the consultation, the Time Limits and Other Periods Act (COVID-19) was introduced in the House of Commons on June 10, part of Bill C-17.