Canada updates

Arbitration & ADR

Contributed by Borden Ladner Gervais LLP
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.

British Columbia aligns international commercial arbitration legislation with UNCITRAL Model Law 2006
  • Canada
  • 03 May 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
  • 15 February 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
  • 18 January 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.


Aviation

Contributed by Bersenas Jacobsen Chouest Thomson Blackburn LLP
Court finds in favour of Air Canada in denied boarding compensation case
  • Canada
  • 14 November 2018

The Supreme Court of Nova Scotia recently ruled in favour of Air Canada, dismissing a passenger's appeal of the province's small claims court's interpretation of the air carrier's tariff provision which pertained to denied boarding compensation. Despite humble beginnings in the small claims court, the case provides some insight into how the Canadian courts may interpret air carrier tariffs and the evidence that claimants are expected to adduce to succeed in securing compensation in overbooking cases.

Federal Court quashes civil aviation safety alert
  • Canada
  • 05 September 2018

In early 2018 the Federal Court reviewed a 2015 Transport Canada decision to issue a civil aviation safety alert (CASA) against Rotor Maxx Support Ltd. CASAs are non-mandatory notifications issued by the regulator which contain important safety information and recommended actions for appropriate stakeholders. The court had previously declined to grant an injunction preventing the issuance of the CASA.

Lack of night vision goggles insufficient for Labour Code conviction
  • Canada
  • 25 April 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
  • 21 February 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
  • 03 January 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).


Banking

Does offshore banking confidentiality hold up in Canadian courts?
  • Canada
  • 02 June 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
  • 26 May 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
  • 19 May 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
  • 17 March 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
  • 20 January 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.


Corporate Tax

Contributed by Thorsteinssons LLP
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.

Cryptocurrency taxation: what business leaders need to know
  • Canada
  • 07 September 2018

In these heady days of cryptocurrency investment, the market can seem like a gold rush – offering promise, but at the expense of predictability. Cryptocurrency taxation is no different. Increasing scrutiny from all types of regulator, including the tax authorities, seems inevitable for the sector. While this may diminish potential profits when compared to the early days of cryptocurrencies, it will likely add structure, transparency and legitimacy in the long term.

Tax Court rules that Visa's services are subject to GST/HST
  • Canada
  • 20 July 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
  • 25 May 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
  • 23 March 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.


Employment & Benefits

Contributed by Fasken
Federal government introduces new pay equity and labour standards
  • Canada
  • 14 November 2018

The federal government recently introduced Bill C-86, the Budget Implementation Act 2018. In addition to introducing long-anticipated pay equity legislation, the proposed legislation would make significant changes to the labour standards in Part III of the Canada Labour Code. Some of the proposed changes are unsurprising given the government's past statements. Other changes are unexpected and, if enacted, would have a major impact on both non-union and unionised employers.

Terminating employee benefits at age 65 ruled unconstitutional
  • Canada
  • 07 November 2018

For many years, even since the prohibition of mandatory retirement in Ontario, it has been permissible to deny benefit, pension, superannuation or group insurance plans or funds to employees over the age of 65 due to an exception in the Ontario Human Rights Code. However, a recent decision from the Human Rights Tribunal of Ontario found this exception to be unconstitutional.

Bill 148 update: on the chopping block
  • Canada
  • 31 October 2018

The Ontario government recently introduced Bill 47 – the Making Ontario Open for Business Act 2018 in the provincial Legislative Assembly. Once passed, the bill will make substantial changes to the province's employment standards and labour relations legislation, including reversing most of the changes contained in the previous government's Bill 148.

Not all questions are good questions: avoiding discriminatory interview practices
  • Canada
  • 24 October 2018

Much ink has been spilled over a recent decision by the Public Service Commission of Canada on the topic of discriminatory interview practices, in which the commission found that the plaintiff had been discriminated against when she was denied a role due to her pregnancy. The decision serves as a cautionary tale for employers not only with regard to the types of question that may be asked during interviews, but also with regard to comments that may be made before an interview.

Suspension without pay and constructive dismissal: a refresher
  • Canada
  • 17 October 2018

Despite agreeing with a trial judge that a casino employee's suspension without pay was a constructive dismissal, the Ontario Court of Appeal reversed the trial judge's award on the question of damages and examined whether the employer had been obliged to offer alternate employment. The court's decision is a reminder of the principles governing suspension without pay during an investigation into employee misconduct.