The Canadian

Legal System

Chapter 2

Copyright © 2014 by Nelson Education Ltd. 1

 The Canadian Legal System
LEARNING OBJECTIVES
Understand the impact of the Canadian legal
system on business
Understand the role of constitutional law in
protecting commercial rights and freedoms
Understand the government’s law-making powers
under sections 91 and 92 of the Constitution Act,
1867
Understand the executive’s formal and political
functions in regulating business

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 The Canadian Legal System
LEARNING OBJECTIVES
Understand the judiciary’s role in assessing the
constitutionality of legislation
Understand the classifications of law
Understand how administrative law affects
business

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 Democratic Government in
Canada
 The Constitution of Canada sets out the basic principles of
democratic government in Canada.
 It also defines the powers of the three separate branches of
government: -

1. the executive,

2. the legislative and

3. the judicial.

Why do we have 3 separate branches of

government?
 Why Separation Of Powers?
 It has been demonstrated throughout history that unlimited
power in the hands of one person or a group of persons
usually means the oppression of others.
 The separation of powers in a democracy is to prevent
abuse of power.
 The separation of powers splits the tasks of the
government into three branches: legislative, executive
and judicial. These tasks are given to different bodies in
such a way that each of them can impose checks on the
others. Therefore in theory, no one body can grow into a
powerful dictatorship.
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 The Canadian Legal System
A separation of powers limits the possibility of
arbitrary excesses (collusion) by government, since
the authorization of all three branches is required
for the making, executing, and administering of
laws.

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 The Executive
Executive power is the power to administer laws and
carry out the business of government, through such
bodies as government departments, statutory
authorities and the defence forces. 
 The Executive contd..
The executive power in Canada is vested in (i.e. is
assigned to) the Queen (a constitutional monarch who
must work with the elected government).
But, in our democratic society, it is a constitutional
convention (i.e. a tradition built up through the
years) reflected in our fundamental laws, that the real
executive power rests with the Cabinet, which
consists at the federal level of the Prime Minister
and a number of ministers who are all answerable
to Parliament for various government activities. Also
includes civil servants.
 (CABINET – A body composed of all ministers heading government
departments, as well as the prime minister or premier)
 The Executive - The Queen
 Before a bill (i.e. a proposed law under consideration)
becomes a law, the Queen (Queen Elizabeth II) or her
representative, the Governor General, must "assent" to it (i.e.
give approval).
 The current Governor General is Ms. Julie Payette who is the
29th Governor General of Canada since Confederation.
 The same is true in each province, except that the Queen's
provincial representative there is called the Lieutenant
Governor.
 The Legislature
Laws are made and debated by the legislative (or
law making) branch
 The legislature, which at the federal level in Canada is called
"Parliament", is made up of the House of Commons, the Senate
(Senators are appointed by the Governor General on the advice of the Prime
Minister), and the monarch.

 Many writers on Canada’s Constitution have said that the

operation of Canada’s constitution exhibits a high degree of
integration between the executive and legislative branches of
government.
 Most laws in Canada are first examined and discussed by the
Cabinet, then presented for debate and approval by members
of the House of Commons and the Senate (the approval of both
houses is necessary for legislation).
 How a Government Bill becomes Law

 Policy Proposal (Most legislation originates with the Government) e.g. tougher laws
for sex crimes against children

 Parliament (1st bill is received and circulated, 2nd bill is debated, 3rd
reading approval of the bill)
 Senate approval (as above – 1st, 2nd and 3rd reading)
 (both the Senate and the House of Commons must approve bills separately in
order for them to become law)

 Royal Assent
 Statute is in force
 The Canadian Legal System
LEGISLATIVE BRANCH – The branch of
government that creates statute law
STATUTE LAW – A statute begins as a bill proposed
or sponsored by a legislator. Statutes are therefore
formal, written laws created or enacted by the
legislative branch of government
Example: The Fisheries Act (Federal);
Highway Traffic Act (Ontario)

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 The Canadian Legal System
At the conventional level, not the formal level, the
operation of Canada’s constitution exhibits a high
degree of integration between the executive and
legislative branches of government.
Therefore, no true separation of powers.

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 The Judiciary
 Law is interpreted and applied by the judiciary

 Judicial Branch: made up of courts and judges, and is

independent of the other two branches of government
(Legislative and Executive)
 This ensures that the government acts within the laws of the
Constitution.
 Independence is intended to prevent judges from being afraid of political
interference in their decisions.
 The Canadian Constitution
Canada has both a written and an unwritten constitution.

There are three main sources of Canada’s constitution:

 1. the written constitution - Examples are:

- The Constitution Act, 1867 (originally called the British North America Act)

- The Constitution Act, 1982

 2. the unwritten set of rules or conventions (unwritten rules of political

conduct - traditions) – Example: the Constitution Act, 1867 made no mention
of the office of the prime minister, even though Canada has had a prime minister
since Confederation.

 3. court rulings - By interpreting the Constitution, these court rulings

become precedents.

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 The Canadian Constitution
All Canadian law must comply with the
Canadian Constitution.
(Is difficult to change – a special amending
formula must be met)

But, what exactly is a Constitution?

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 The Canadian Constitution
In 1867, the four colonies of British North America –
Upper Canada (now Ontario), Lower Canada (now
Quebec), Nova Scotia and New Brunswick, decided
to form a new country to be called Canada. The
colonies had to decide which powers they would keep
for themselves and which should be handed over to
the new central, or federal government.
The British North America (BNA) Act, passed by
the British Parliament in 1867, outlined the division
of powers of the federal and provincial
government (sec. 91; sec.92)
 Federal System of Government
What is federalism?
 - The division of powers between a central government and
regional/provincial government.
 The Constitution defines a federal system of government for
Canada. This means that the authority or "jurisdiction" to
make laws is divided between the Parliament of Canada and
the provincial legislatures.
 Constitution Act, 1867
The Constitution Act, 1867 was formerly called the
British North America (BNA) 1867
Sets up our courts
 Contains the “DIVISION OF POWERS” Exclusive Federal
Jurisdiction (s. 91),
such as:
currency
national defence
criminal law
banking
postal service
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 Constitution Act, 1867
Exclusive Provincial Jurisdiction (s. 92) includes:
hospitals
property and civil rights with the province
administration of justice
local matters
incorporation of provincial corporations
Municipalities
education

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 Constitution & Concurrent Jurisdiction
Jurisdiction that is shared between Federal and
Provincial levels of government:
public health
the environment
It exists where two or more courts from different systems
(federal/provincial) simultaneously have jurisdiction over a
specific case.

DOCTRINE OF PARAMOUNTCY – Provides that federal

laws prevail when there are conflicting or inconsistent
federal and provincial laws

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 Constitution Act, 1867
Municipalities
Have no constitutionally recognized
powers
Are usually delegated powers by the provinces in
some areas, such as
zoning
property tax
licensing

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 Canada’s Constitution
Canada’s Constitution is the supreme law of the
land.
Until 1982, Canada’s Constitution was the British
North America Act, a statute of England.
The Canada Act, 1982 brought the power to amend
the constitution home to Canada’s Parliament and
created a truly Canadian Constitution.
The Canada Act ended the necessity for Canada to
request certain types of amendment to its Constitution
to be made by the British parliament
Canada Act: Trudeau looks on as Queen Elizabeth II signs

the Canada Act, 1982

 Source:http://data2.collectionscanada.gc.ca/ap/a/a141503.jpg
 Canada’s Constitution
 The Constitution Act, 1982 was introduced as part of Canada's process of
“bringing home" the constitution

 A truly Canadian Constitution was created with the Constitution Act, 1982, which
contains both the Constitution Act, 1867 (BNA was renamed the Constitution Act,
1867) and the Canadian Charter of Rights and Freedoms - The Charter replaced
the former unembedded Bill of Rights (The Charter forms the first thirty-five sections
of the Constitution Act, 1982) The Constitution contains ,as well, a number of
unwritten constitutional conventions and norms.

 As part of the modernization of the Constitution in 1982, Canada adopted the

Charter of Rights and Freedoms and the British North America Act was renamed
the Constitution Act, 1867.

 Amending the Canadian Constitution

 NOT AN EASY TASK

 See:
 http://www.theglobeandmail.com/news/politics/the-charter-proves-to-be-canadas-gift-to-world/article4100561/
Copyright © 2014 by Nelson Education Ltd. 26
 Canadian Charter of
Rights and Freedoms (Charter)
Created in 1982, part of the Constitution Act, 1982
Guarantees specific rights and freedoms enshrined
in the Constitution and is enforceable by the
judiciary

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 Law isn’t valid if it violates the Charter
 According to section 52 of the Constitution Act 1982,
every law that is inconsistent with the Constitution is, to the
extent of the inconsistency, of no force and effect.
 Are There Limits to
Our Charter Rights?
Section 1 – Provides that all Store Owner Challenges Nova
rights in the Charter are Scotia’s Tobacco Access Act
subject to reasonable limits

Do you support Gee’s

decision to fight the
legislation?
See:
http://thechronicleherald.ca/novascotia/1126321-gee-loses-challenge-to-tob
acco-legislation

(..a ban on displaying tobacco products is one part of a

comprehensive strategy to reduce smoking and tobacco-related health
impacts and death..)
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 Section 1 of the Charter
 The section is also known as the reasonable limits clause or
limitations clause, as it legally allows the government to limit
an individual's Charter rights.

Section 1 of the Charter allows the government to pass laws

that limit free expression so long as the limits are reasonable
and can be justified.
 A person's words or actions may negatively affect another.

 Hate speech (see R. v. Keegstra) and obscenity are two examples

that gain a lot of attention.
 “Hate is a marginal form of expression; it does not
facilitate debate -- rather, it silences it.”
 Fundamental Freedoms
2. Everyone has the following fundamental
freedoms:
a. freedom of conscience and religion;
b. freedom of thought, belief, opinion and
expression, including freedom of the press and
other media of communication;
c. freedom of peaceful assembly; and
d. freedom of association.
(Charter, s. 2)

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 Equality Rights
15. (1) Every individual is equal before and under the
law and has the right to the equal protection
and equal benefit of the law without
discrimination and, in particular, without
discrimination based on race, national or
ethnic origin, colour, religion, sex, age or
mental or physical disability.
(Charter, s. 15)

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 Charter of Rights & Freedoms
S 3 - Right to vote
S 4 - No government longer than 5 years
S 6 - Mobility rights
S 7 - Right to Life, Liberty & Security of the Person
S 8 to 14 Legal Rights:
To be secure against unreasonable search or seizure
Not to be arbitrary detained or imprisoned
To retain counsel
To be tried within reasonable time
Not to incriminate oneself
To use an interpreter
 Are There Limits to
Our Charter Rights?
SECTION 33 (THE “NOTWITHSTANDING
CLAUSE”) – Allows governments to “opt out” of
some Charter rights by enacting legislation
“notwithstanding” that it violates the Charter
See: Ford v. Quebec and the challenge to Quebec’s Charter of
French Language requiring French-only signs
(notwithstanding the provisions of section 2 and 7 to 15 of
the Charter)

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 Are There Limits to
Our Charter Rights? (Section 33 contd..)
A legislature, however, may extend the period past the initial
legislative term by "re"-invoking the Notwithstanding clause
through another explicit legislative declaration. Such a
declaration again only lasts for a maximum of five years.

But remember, a number of other Charter rights cannot

be overridden. These include democratic rights (e.g. right
to vote), mobility rights, and the equality of men and women.

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 Canadian Charter of Rights and Freedoms
The effect of including the Charter in the Canadian
Constitution is twofold :-
1. ENTRENCHMENT (or cementing) -Neither the federal
nor the provinces have the power to modify or otherwise
interfere with the basic rights set out in the Charter except
through constitutional amendment (See Sec. 52 of the
Constitution Act 1982).
2. COURT PROTECTION -The burden of protecting those
rights has shifted from the politicians to the judges.
Individuals can seek redress
from the courts if they feel that legislation has interfered
with their rights.
 The Canadian Charter of Rights contd..
When the Charter came into being, a new qualification was
put on laws – they must be in accordance with the
principles of the Charter. Those principles take precedence
over any of the laws enacted by the federal or provincial
governments. Hence, the Charter, with some limitations, is
superior to the acts of Parliament and the provincial
legislatures.

The Charter is simply the most recent law in a series

of steps embarked on to defend human rights in
Canada.
 Offending Legislation
In the past the courts merely struck down legislation if it
offended a right by the Charter (see Big M Drug Mart case).

More recently, the courts have moved toward

requiring a government to pass legislation that is in
conformity with the Charter.
The Charter takes power away from Parliament and provincial
legislatures and gives it to the courts.
 Big M Drug Mart Case
 Big M Drug Mart had been accused of selling merchandise on Sunday,
contrary to the Lord's Day Act. On 24 April 1985, the Supreme Court of
Canada found that this federal statute conformed to the federal criminal
law power as found in s91(27) of the Constitution Act, 1867, but was
contrary to the freedom of religion guaranteed in s2 of the The Canadian
Charter of Rights, and consequently was inoperative by virtue of s52 of
the Constitution Act, 1982.

 The Court held that the purpose of the Lord's Day Act was compulsory
religious observance. It held the population to an ideal of the Christian
religion. In the area of freedom of religion, the Lord's Day Act did not
constitute a reasonable limit demonstrably justifiable in a free and
democratic society and, therefore, it could not be saved pursuant to s1 of
the Charter. This statute furthermore was not in accordance with the
maintenance and encouragement of the multicultural heritage of
Canadians.
 Sexual Orientation and the Charter –
Vriend v. Alberta
 Delwin Vriend was employed as a laboratory coordinator at a private Christian
college in Edmonton, Alberta. In January 1991, the college fired Mr. Vriend after
they became aware that he was a gay man. Mr. Vriend attempted to file a human
rights complaint, but the Alberta Human Rights Commission advised him that he
could not file a complaint because sexual orientation was not included as a
protected ground under the Individual's Rights Protection Act. Mr. Vriend sought a
declaration that the Act violated his equality rights as guaranteed under s. 15 of
the Canadian Charter of Rights and Freedoms.

 The Supreme Court of Canada held that the exclusion of sexual orientation as
a ground of discrimination in the Act created a distinction that resulted in the
denial of equal benefit and protection of the law on the basis of sexual
orientation.

 The court held that this was a violation of s. 15 of the Charter that could not be
saved under s. 1, and ordered that sexual orientation be read in to the
provincial legislation. 

Source: http://ojen.ca/resource/585
 Courts Dealing with Commercial
Disputes

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 Canada’s Court System
 There are essentially four levels of court in Canada.
 Each court is bound by the rulings of the courts above them.
 First there are provincial/territorial courts (lower courts), which
handle the great majority of cases that come into the system (e.g. small
debt, contract disputes and damage cases).
 Second are the provincial/territorial superior courts. These courts
deal with more serious crimes and also take appeals from
provincial/territorial court judgments.
 Each province has a Supreme (or Superior) Court to hear civil disputes
in matters that are beyond or outside of the jurisdiction of the lower
courts.
 Alberta, Manitoba and Saskatchewan call their Supreme/Superior Court
the Court of Queen’s Bench.
 Canada’s Court System contd..
 On the same level, but responsible for different issues, is the
Federal Court.
 At the next level are provincial/territorial courts of appeal
and the Federal Court of Appeal,
 while the highest level is occupied by the Supreme Court
of Canada.
 The System of Courts
SUPREME COURT OF CANADA (SCC) – The
final court for appeals in the country
http://www.scc-csc.gc.ca/home-accueil/index-eng.aspx

FEDERAL COURT OF CANADA – The court that

deals with some types of litigation involving the
federal government.
 The Federal Court is Canada's national trial court which hears and
decides legal disputes arising in the federal domain, including claims
against the Government of Canada, civil suits in federally-regulated
areas and challenges to the decisions of federal tribunals.
http://cas-ncr-nter03.cas-satj.gc.ca/portal/page/portal/fc_cf_en/Index

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 Canadian Law
Canadian Law comes from a number of sources:-
It can be found in common law, which is created by judges;
It can be found in statutes, which are created by the Parliament
of Canada and the provincial Legislatures;
It can be found in bylaws, which are created by municipal
councils.
It can be found in the Civil Code – Though restricted to
Quebec
It can also be found in the constitution;

- Laws applicable to business come from all these sources.

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 Sources of Law
 Common Law
 Rules contained in decisions of judges
 Precedent
 Legal rule from one case applied in others
 The principle of stare decisis requires judges to follow
decisions in similar cases made in higher courts

 Statute Law
 Rules created by federal Parliament and provincial
and territorial legislatures
 Regulations
 Rules showing how statute is to be implemented
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 Sources of Law - The Quebec System
The legal system in Quebec is different from that in the rest of
Canada, and follows the civil-code system rather than a
common law approach.
Modern civil code law traces its origins to
continental Europe.
Unlike common-law courts, courts in a civil-code system first
look to the Code, and then refer to previous decisions for
consistency.
Prior decisions do not constitute binding precedents in a
civil code jurisdiction.

47
 Sources of Law
 Constitution
 Supreme law of land
 Establishes framework for all laws/principles

 Municipal Bylaws
 Rules passed by municipal governments

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 Sources of Law
ROYAL PREROGATIVE (a body of customary authority,
privilege, and immunity) – Refers to the historical rights
and privileges of the Crown, including the right to
conduct foreign affairs and to declare war
(Includes the appointment and dismissal of the prime minister, and
the summoning, proroguing (i.e. discontinuing) and dissolving
of Parliament)

COMMON LAW – Judge-made law. Common law

is created when judges make decisions. The decisions
become precedents, and they are cumulatively referred
to as the common law.
49
 How the Common Law System
Works
A lower court must follow a relevant precedent
created by a higher court within the same
jurisdiction.
Not all precedents are of equal value – the higher
the court that created the precedent, the more valued
the decision is.
The Supreme Court of Canada – the highest court
in Canada – is entitled to decide a case in any way
it sees fit.
50
 Classifications of Law

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 Classifications of Law
DOMESTIC versus INTERNATIONAL LAW
SUBSTANTIVE versus PROCEDURAL LAW
substantive law defines the rights and duties of the
people, but procedural law lays down the rules.
 substantive law is about the content of rules, procedural law is
about how those rules are to be used.
 For example, criminal law defines certain behavior as illegal and lists the
elements the government must prove to convict a person of a crime - Substantive
law. Whereas procedural law deals with the procedure followed in for instance,
arrest, trials and in appeals (have the proper procedures been followed?).

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 Classifications of Law
PUBLIC versus PRIVATE LAW
PUBLIC LAW – Areas of law that relate to or
regulate the relationship between persons and
government at all levels, such as Criminal Law

PRIVATE LAW – Areas of law that concern

dealings between persons, such as Law
of Contracts

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 Classifications of Law
COMMON LAW versus CIVIL LAW
COMMON LAW – A system of law that includes
judge-made law. Used in all provinces except
Quebec (used in Quebec for public law matters).
CIVIL LAW – A system of law in which judges
look to the Civil Code for general principles to be
applied to the case at hand. They are not bound by
how other judges have interpreted the Code.

Copyright © 2014 by Nelson Education Ltd. 54

 Administrative Law
and Business
ADMINISTRATIVE LAW regulates the operation and
procedures of government agencies and that laws are
implemented and administered in a fair and reasonable manner.
Refers to rules created and applied by the various boards,
agencies, commissions, and tribunals
Functions of administrative bodies and officials often varies.
Example: Canadian Radio-television and
Telecommunications Commission (CRTC)

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 Examples of Administrative
Bodies and Officials
Affecting Business?
If you plan to sell alcohol, you may interact with the
liquor control board or commission.
If you plan to hire employees, you may interact with
the workers’ compensation board.

Copyright © 2014 by Nelson Education Ltd. 56

 The Canadian Legal System
The Constitution protects certain commercial rights
and freedoms and establishes limits on
governmental authority.
The government’s law-making powers under the
Constitution Act, 1867, are divided between the
federal and provincial levels of government.
There are numerous courts that may be involved in
business-related law matters.

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 The Canadian Legal System
The judiciary has a role in assessing the
constitutionality of legislation and can also
create “common law.”

There are numerous classifications of law.

Administrative law can affect business.

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