Canada updates

Arbitration & ADR

Contributed by Borden Ladner Gervais LLP
Quebec court consolidates law on third-party funding agreements: impact on commercial arbitration
  • Canada
  • June 28 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.

British Columbia aligns international commercial arbitration legislation with UNCITRAL Model Law 2006
  • Canada
  • May 03 2018

British Columbia recently introduced amendments to its International Commercial Arbitration Act. The proposed amendments are intended to modernise British Columbia's international arbitration legislation and align it with accepted international standards. In so doing, the government hopes to position Vancouver as a more desirable location to host international commercial arbitration proceedings.

Appeal court refuses challenge to international arbitral award
  • Canada
  • February 15 2018

A recent Ontario Court of Appeal decision has affirmed the favourable Canadian approach to the enforcement of international arbitration awards under the United Nations Commission on International Trade Law Model Law. The court of appeal's restraint when asked to set aside and refuse to enforce an international arbitral award is consistent with recent cases, which have upheld the narrow circumstances in which courts can do so.

Courts versus private arbitration: arbitrators can decide who has jurisdiction
  • Canada
  • January 18 2018

The Court of Queen's Bench of Alberta recently applied the principle of competence-competence in the context of a parallel litigation and arbitration dispute resolution procedure. As parallel dispute resolution procedures give rise to a complex interplay between the jurisdiction of the courts and arbitral tribunals, the case is an excellent example of the practical application of the principle and can serve as a useful tool for both domestic and international arbitration practitioners.

Stay out of it – sophisticated parties can contract out of arbitration legislation
  • Canada
  • November 30 2017

The Supreme Court of Newfoundland and Labrador recently dismissed an application by the province under Sections 14 and 34(2)(a)(iii) of the Arbitration Act. The court held that the parties had legally contracted out of the act, narrowing the circumstances in which a court could set aside an arbitral award. The decision furthers the general theme of recent Canadian jurisprudence, which has emphasised party autonomy and deference to reasonable arbitral decisions.


Aviation

Contributed by Bersenas Jacobsen Chouest Thomson Blackburn LLP
Lack of night vision goggles insufficient for Labour Code conviction
  • Canada
  • April 25 2018

In a recent Ontario Court of Justice case, Ornge air ambulance services were charged under the Labour Code following an air ambulance crash that killed two pilots and two paramedics on a night flight. The Crown argued that the accident would not have occurred had the pilots been able to see the ground using night vision goggles, and that it had been Ornge's duty to ensure their safety by providing this technology. However, Ornge held that it had complied with all of the legal and regulatory requirements.

Airline ordered to pay C$295,000 penalty for tarmac delay
  • Canada
  • February 21 2018

Due to an unexpected thunderstorm, some passengers on two Air Transat flights were stranded on the tarmac in the aircraft that they had boarded in Europe for almost five and six hours, respectively. The Canadian Transportation Agency decided to investigate, which is noteworthy as there is little or no precedent for this sort of situation being the subject of an investigation or order by the agency.

Arbitrator rules that pilot training bonds require express authorisation to be enforceable
  • Canada
  • January 03 2018

In a recent federal labour arbitration, the Air Line Pilots Association brought a grievance on behalf of Jonathon Sipko against Air Georgian Limited for making unauthorised deductions from Sipko's wages when he left Air Georgian's employment less than one year after undergoing captain upgrade training. This case serves as a caution for airlines to ensure that they have express authorisations with employees (commonly in the form of written and signed agreements).

Changes to flight attendant manuals must have reasonable basis
  • Canada
  • October 11 2017

The minister of transport recently appealed a judicial review brought by the Canadian Union of Public Employees. At issue was a change in Sunwing's operating procedures relating to its staffing of flight attendants and whether the change would compromise the safety of passengers and crew members. The Federal Court concluded that ministerial approvals under the Canadian Aviation Regulations require a substantive review of the safety implications of a request, which did not occur in this case.

Court rules that carrier and ground handler need not be added as parties to complaint
  • Canada
  • July 05 2017

A complaint regarding the provision of passenger assistance services named neither the carrier nor the ground handling company as a respondent. Instead, only the Greater Toronto Airports Authority (GTAA) was named. The GTAA asked the Canadian Transportation Agency to dismiss the complaint against it or add the carrier and the service provider as co-respondents to the complaint; however, its request was denied.


Banking

Does offshore banking confidentiality hold up in Canadian courts?
  • Canada
  • June 02 2017

Some jurisdictions' laws make it a criminal offence for banks to disclose client information. If a bank becomes involved in Canadian proceedings, those foreign laws may conflict with the disclosure obligations imposed on litigants in Canada. This raises questions about when foreign law can provide a basis to excuse production or refuse the answering of a question in Canadian proceedings, and under what circumstances a Canadian court will compel disclosure despite potential foreign legal jeopardy.

FCAC reinforces express consent expectations
  • Canada
  • May 26 2017

The Financial Consumer Agency of Canada (FCAC) has issued a statement and a new compliance bulletin in response to recent allegations that certain employees of banks were pressured to upsell to consumers. The bulletin states that its purpose is to reinforce FCAC expectations that federally regulated financial institutions obtain consumers' express consent for new products and services in accordance with regulatory requirements.

Budget 2017 – financial services highlights
  • Canada
  • May 19 2017

The government recently tabled its 2017 Budget. The financial services proposals are aimed at facilitating a more resilient financial sector, a modernised deposit insurance framework that continues to protect the deposits of Canadians and promote financial stability and increased powers to combat money laundering and terrorist financing.

The saga of the unnamed bank: FinTRAC statement
  • Canada
  • March 17 2017

In April 2016 the Financial Transactions Reports Analysis Centre (FinTRAC) levied a penalty of over C$1 million against a Canadian bank, but failed to name the bank in question. The director of FinTRAC recently released a statement expressing that the message of deterrence was effective despite the decision not to publicise the bank's name. However, he acknowledged that withholding the name of the bank may not have met public expectations in relation to openness and transparency.

Financial services regulatory: key developments to watch in 2017
  • Canada
  • January 20 2017

Financial services regulation continued to be busy in Canada in 2016. Pending changes, developments and consultations to watch in 2017 include the new draft guidelines from the Office of the Superintendent of Financial Institutions, draft guidance from the Financial Transactions and Reports Analysis Centre of Canada and the possible review and revision of the Bank Act financial consumer protection framework.


Company & Commercial

Can companies escape liability for unreasonable termination?
  • Canada
  • October 31 2016

A recent Ontario Court of Appeal decision recognised the enforceability of an exclusion of liability clause when a contractual termination was considered by the court to be unreasonable, but not in bad faith. The case is an important example of the flexibility allowed by the courts regarding the exercise of discretionary termination rights in the context of a long-term contractual relationship.

Knock knock: are you prepared for a search warrant?
  • Canada
  • August 15 2016

Search warrants have become a common means of obtaining evidence from businesses in all industries. Consequently, many businesses are being forced to deal with these warrants in haste, without sufficient knowledge of their immediate impact on business operations. In light of this, an understanding of what can be done to protect employees and business operations in all provinces and sectors is vital.


Corporate Tax

Contributed by Thorsteinssons LLP
Tax Court rules that Visa's services are subject to GST/HST
  • Canada
  • July 20 2018

The Tax Court of Canada has released a landmark decision on the goods and services tax/harmonised sales tax status of certain commonplace transaction processing services – namely, Visa's payment platform offered to financial institutions. The court held that the supply of services made by Visa to the Canadian Imperial Bank of Commerce fell outside the definition of a 'financial service' under the Excise Tax Act and therefore did not qualify as an exempt supply.

Quebec goes it alone with sales tax proposal
  • Canada
  • May 25 2018

Quebec recently announced that it intends to expand its requirements for non-resident vendors to collect and remit Quebec sales tax on sales to Quebec consumers, effective as early as January 1 2019. It will be interesting to see whether the Quebec government has the authority to impose requirements on non-resident businesses that do not carry on business in the province. Another issue will be whether an assessment for failure to collect the tax can be enforced against a non-Quebec seller.

Corporate passive investment changes in 2018 federal budget
  • Canada
  • March 23 2018

The 2018 federal budget signifies another chapter in the Department of Finance's saga to overhaul the taxation of private corporations and their shareholders. Budget 2018 sets out two changes to the taxation of private corporations: a reduction of the small business deduction based on the amount of passive investment income earned at a corporate level and a restriction on obtaining refunds of corporate tax on dividends paid from income taxed at the reduced small business rate.

Subjecting transfers of beneficial ownership to property transfer tax is not as simple as it might seem
  • Canada
  • March 16 2018

The British Columbia Property Transfer Tax Act applies only to registered transfers of real property. However, significant real property-related tax changes are rumoured to be proposed in the upcoming provincial budget. Any amendment to the act that would tax transfers of beneficial ownership should not be made haphazardly. Such an amendment must be joined by, among other things, a mechanism to relieve the tax where the beneficial ownership is transferred to an affiliate.

Taxation of bitcoin and other cryptocurrencies
  • Canada
  • March 09 2018

At a basic level, cryptocurrencies constitute property under the Income Tax Act. As such, dispositions of cryptocurrencies ordinarily lead to income tax consequences. Although cryptocurrencies are an exciting development, along with the rewards come a variety of risks, not least of which is tax. Failure to comply with all applicable tax obligations can result in severe penalties and hefty arrears interest.