Is there any repercusion if a chair wants to calcen an event, for which we already have a deposit, for no reason? What can be done to recoup costs for an event if we will not get abck our depost or worse yet have to pay a portion of the balance if it is cancelled not far enough in advance?

Bring the matter to the attention of the PTO President and the Treasurer. It sounds as though the committee chair may have been given too much discretionary authority; this needs addressed by the President or the board member under which that committee operates.

As far as losing the deposit or being required to pay the balance due, your PTO certainly should not penalize the innocent vendor by withholding payment and/or by demanding a return of the deposit. Instead, the PTO should attempt to work with the vendor to see if the deposit paid and/or a portion of the balance due can be "held in escrow" by the vendor for the PTO to use towards a future activity.

Can't someone else take over the event and run it?
I agree-- the President needs to step in and find out what's going on.... there must be a reason the chair wants to cancel-- talk to them as well...
Good luck!!!