Canada updates

Arbitration & ADR

Attempting to consolidate arbitral and non-arbitrable disputes can compromise arbitration agreements
  • Canada
  • 28 March 2019

The Ontario Superior Court recently considered the application and operability of an arbitration clause in a subcontract in the context of a related claims proceeding under a related main contract. The case highlights the challenges involved in drafting pre-dispute arbitration clauses that will operate effectively when multiple claims arise between multiple parties under multiple contracts.

Court of appeal declares notice to arbitrate null due to its attempt to achieve consolidation without consent
  • Canada
  • 17 January 2019

The British Columbia Court of Appeal recently declared a notice to arbitrate a nullity because it sought to commence four separate arbitrations against three different parties under four separate arbitration agreements. Practitioners and parties entering into multiple contracts relating to the same subject matter or project should consider whether it is desirable to have all potential disputes which arise under the multiple contracts arbitrated in one proceeding.

Consolidation of arbitration proceedings without consent: cautionary tale
  • Canada
  • 06 December 2018

In a decision that is inconsistent with the weight of Canadian and international jurisprudence, the Court of Queen's Bench of Alberta recently ordered the consolidation of arbitration proceedings without the consent of all parties. For now, parties and practitioners should be aware that arbitrations seated in Alberta may be subject to consolidation without consent.

Court clarifies when international arbitral awards become binding
  • Canada
  • 27 September 2018

The Ontario Court of Appeal recently interpreted when an international commercial arbitration award becomes binding on the parties for the purposes of judicial recognition and enforcement of foreign arbitral awards. It held that the determination of whether an award is binding pursuant to Articles 35 and 36 of the United Nations Commission on International Trade Law Model Law rests with the court rather than the arbitral tribunal.

Quebec court consolidates law on third-party funding agreements: impact on commercial arbitration
  • Canada
  • 28 June 2018

Third-party funding in commercial arbitration in Canada has moved increasingly into the mainstream. Its implementation is largely influenced by the treatment of third-party funding in litigation, which is why it is important for arbitration practitioners in Canada to continue to follow jurisprudential trends regarding the treatment of third-party funding. A recent third-party litigation decision from Quebec provides valuable insight for arbitrators in this regard.


Aviation

Contributed by Bersenas Jacobsen Chouest Thomson Blackburn LLP
Proposed class action claims refunds for flights cancelled due to COVID-19
  • Canada
  • 29 April 2020

Air Canada, WestJet, Air Transat, Sunwing, and Swoop are facing a proposed class action for offering vouchers and credits in lieu of refunds for flights that were cancelled due to the COVID-19 pandemic. It remains to be seen whether a class action with such a wide scope – as opposed to a government bailout or coordinated response from regulators – will be considered the most efficient way to deal with the claims of those whose flights have been cancelled due to COVID-19.

Government restricts travel to Canada by foreign nationals
  • Canada
  • 25 March 2020

The minister of transport recently issued an interim order regarding the denial of boarding to foreign nationals on international flights to Canada and a health check that air operators flying to Canada must conduct prior to boarding. This article summarises the interim order's key points.

Accessible Transportation for Persons with Disabilities Regulations – an overview
  • Canada
  • 11 March 2020

In 2019 the Canadian federal government took steps to address barriers for persons with disabilities, including the introduction of the Accessible Canada Act. In this context, the Accessible Transportation for Persons with Disabilities Regulations – which target federal agencies and federally regulated industries, including aviation – were finalised and published in July 2019. The service requirements applicable to Canadian and foreign carriers will come into force on 25 June 2020.

Court rules EU Flight Delay Compensation Regulation claim cannot be enforced as breach of contract
  • Canada
  • 11 September 2019

A recent decision from the Ontario Small Claims Court marks the first time that a Canadian court has considered whether EU air passenger rights legislation can be enforced outside Europe. This decision will be of interest to carriers operating flights between Canada and Europe, as it holds that a tariff that does not expressly incorporate the EU Flight Delay Compensation Regulation will not expose a carrier to breach of contract claims brought in Canada for declining to pay compensation under the regulation.

Canada's Air Passenger Protection Regulations coming into force
  • Canada
  • 19 June 2019

Following several rounds and many months of consultations, the government recently announced that the Air Passenger Protection Regulations (APPRs) developed by the Canadian Transportation Agency have been finalised. The APPRs apply to all flights within, from or to Canada, whether operated by a Canadian or foreign airline. Once in effect, the regulations will impose obligations on carriers in cases of tarmac delays, denied boarding and delayed and cancelled flights.


Corporate Tax

Budget 2019: intensifying fight against tax evasion and new risks for tax professionals
  • Canada
  • 19 April 2019

In Budget 2019 the federal government has continued to bolster its tools and resources to detect and prosecute tax evasion. As such, several measures have been proposed, including a C$150.8 million investment over the next five years to fund new initiatives. More so than ever, tax professionals should be well acquainted with various definitions to ensure that their client services and advice cannot be construed as the commission or facilitation of a criminal offence.

Federal government tables 2019 Budget: investing in middle class
  • Canada
  • 12 April 2019

The minister of finance recently tabled the 2019 Budget. As a pre-election budget, the government appears to have shied away from tax measures that could receive negative backlash from the business community. Among other things, the government is proposing to expand the foreign affiliate dumping rules to apply to Canada-resident corporations that are controlled by non-resident individuals or trusts.

Continued erosion of taxpayer privacy
  • Canada
  • 22 February 2019

The Canadian Broadcasting Corporation recently reported that the Canada Revenue Agency has transferred more than 1.6 million Canadian banking records to the US Internal Revenue Service since the intergovernmental agreement for the enhanced exchange of tax information under the Canada-US Tax Convention was entered into in 2014. The agreement provides lengthy and detailed rules with respect to the information that the Canadian government must transfer to the United States.

TFSA advantage tax: heads CRA wins, tails you lose
  • Canada
  • 14 December 2018

Earnings within tax-free savings accounts (TFSAs) and other tax-deferred plans are, in principle, supposed to grow tax free. However, some taxes still apply, including the advantage tax which applies at the rate of 100% of any 'advantage' (as defined in the Income Tax Act). This tax has become one of the Canada Revenue Agency's favourite tools to effectively expropriate what it views as improperly boosted returns within a TFSA.

Federal Court refuses to authorise abusive fishing expedition by CRA
  • Canada
  • 14 September 2018

The Federal Court has made a strong statement against an interpretation of the Canada Revenue Agency's (CRA's) powers that would allow almost unlimited invasions of taxpayer privacy. The force with which the court rejected the self-serving interpretation advanced by the CRA should be encouraging for taxpayers. The case serves as an important reminder that the CRA cannot act outside the bounds of law and that it is the courts, and not the CRA, that interpret the law.


Employment & Immigration

Contributed by Fasken
Canada Summer Jobs programme temporarily changed due to COVID-19
  • Canada
  • 22 April 2020

The federal government has announced temporary changes to the Canada Summer Jobs programme in an effort to encourage youth employment during the COVID-19 pandemic. The government projects that the earmarked C$263 million in funding will create up to 70,000 jobs for young people. The temporary changes include increasing the wage subsidy for private and public sector employers and allowing employers to hire staff on a part-time basis.

Employee privacy issues during COVID-19 pandemic
  • Canada
  • 15 April 2020

Employers that are continuing operations during the COVID-19 pandemic must take reasonable steps to protect the health and safety of their workers. In order to do this, employers may need to ask employees some personal questions about their health status or conduct health assessments. However, privacy laws continue to apply. This article provides information about various privacy law issues that may arise when employers request personal health information from employees.

Government further expands wage subsidy for employers
  • Canada
  • 08 April 2020

The government recently announced that employers which experience a COVID-19-caused revenue loss of at least 30% will be eligible for a subsidy of up to 75% of each employee's wages. According to the oral announcement, the subsidy will, among other things, extend to charities, non-profit organisations and large and small businesses, apply to the first C$58,700 earned per employee and be retroactive to 15 March 2020.

Workforce planning during COVID-19 pandemic: options for employers
  • Canada
  • 01 April 2020

The COVID-19 pandemic has caused disruptions and slowdowns in almost all industries. The situation is fluid and government, business and social responses have and must be dynamic. This article discusses the options available to employers outside Quebec to manage the unexpected downturns and, if necessary, reduce their labour force. All of the options may create risks, including circumstances where an employee could allege constructive dismissal and claim termination entitlements.

COVID-19 and workplace government updates: cross-Canada review
  • Canada
  • 25 March 2020

Governments across Canada have recently made multiple announcements regarding the coronavirus (COVID-19) pandemic. To help make things easier for employers, this article summarises the announcements from all provinces that touch on workplace issues. Common issues concerning COVID-19 include self-isolation, sickness benefits and layoffs.


Franchising

Contributed by Lapointe Rosenstein Marchand Melançon LLP
Can good faith require parties to help each other properly exercise their rights?
  • Canada
  • 12 May 2020

It is well known that franchisors have been facing increasing pressure to conduct themselves in accordance with the principles of good faith. A recent Ontario Superior Court case has led to questions with respect to a franchisor's duty to protect its franchisee's right to operate in circumstances where the franchisor is the gatekeeper of rights with respect to a third party. In its decision, the court navigated the duty of good faith owed in respect of the renewal of a head lease between a franchisor and a landlord.

COVID-19 and the franchise landscape
  • Canada
  • 28 April 2020

While some franchised businesses have transitioned to working remotely and have ramped up their e-commerce business models in light of the COVID-19 pandemic, the vast majority of traditional franchised businesses are in a precarious state due to a drastic reduction in revenues and uncertain economic conditions for the foreseeable future. This article sets our practical tips and considerations for franchisors and franchisees with respect to navigating COVID-19.

Franchisee defaults: when is it 'material' enough?
  • Canada
  • 25 February 2020

Few areas of contract law have created as much confusion as the nebulous distinction between material breaches, substantial breaches and breaches going to the root of the contract. This distinction is important in a franchise context, where franchise agreements often provide that the franchisor has a right to terminate the franchise agreement for material breach by the franchisee, leaving what constitutes a 'material' breach open for interpretation.

Franchisees can't have their cake and eat it too: statutory disclosure exemptions have consequences
  • Canada
  • 29 October 2019

In recent years, many Canadian provinces have adopted franchise-specific disclosure laws with a view to remedying the inequality of bargaining power between franchisors and franchisees. Subject to certain limited exemptions, franchisors must provide prospective franchisees with full and accurate information in respect of all material facts relating to the franchise business before entering into a franchise agreement, failing which franchisees can bring a claim for rescission and damages against the franchisor.

Franchisee or employee in disguise?
  • Canada
  • 18 June 2019

Franchising communities in Quebec and elsewhere in Canada have been eagerly awaiting a Supreme Court of Canada decision on whether an unincorporated franchisee operating a two-person cleaning services business in Quebec as part of a cleaning services franchise network qualified as an employee. While the court's ruling may be worrisome to franchisors in certain industries, there are several mitigating factors to consider.