1. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-1 CANADIAN BUSINESS AND THE LAW Second Edition by Dorothy Duplessis Steven Enman Shannon O’Byrne Sally Gunz Presentation prepared by Allan Elliott, Southern Alberta Institute of Technology

2. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-2 CHAPTER TWO THE CANADIAN LEGAL SYSTEM OBJECTIVES :  The impact of the Canadian legal system on business  The role of constitutional law in protecting commercial rights and freedoms  The government’s law-making powers under sections 91 and 92 of the Constitution Act, 1867  The executive’s formal and political functions in regulating business

3. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-3 THE CANADIAN LEGAL SYSTEM OBJECTIVES:  The judiciary’s role in assessing the constitutionality of legislation  The classifications of law  How administrative law affects business

4. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-4 THE CANADIAN LEGAL SYSTEM Canadian Legal System – the machinery that comprises and governs the legislative, executive and judicial branches of government Constitutional Law – the supreme law of Canada that constrains and controls how the branches of government exercise power

5. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-5 THE CANADIAN LEGAL SYSTEM Government policy – the central ideas or principles that guide government in its work, including the kind of laws it passes Liberalism – a political philosophy that elevates individual freedom and autonomy as its key organizing value

6. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-6 THE CANADIAN CONSTITUTION Constitutional convention – important rules that are not enforceable by a court of law but that practically determine or constrain how a given power is exercised Written documents Relevant judge’s decision

7. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-7 THE CANADIAN LEGAL SYSTEM Legislative branch – passes laws that impact on business operations Executive branch – implements and generates policy that may be directed at business Judicial branch – provides rulings that resolve existing legal problems but also impact on future disputes

8. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-8 THE LEGISLATIVE BRANCH LEGISLATIVE BRANCH  Legislative Branch – the branch of government that creates statute law  Statute Law – formal, written laws created or enacted by the legislative branch of government  Jurisdiction – the power that a given level of government has to enact laws

9. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-9 THE CANADIAN LEGAL SYSTEM s. 91 – Federal Powers  Interprovincial/ international trade & commerce  Postal service  Currency  National defence  Criminal law  Residual powers  Navigation & shipping s. 92 – Provincial Powers  Hospitals  Property and civil rights  Administration of justice  Local matters (e.g. highways)  Incorporation of provincial companies Constitution Act, 1867

10. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-10 MUNICIPAL GOVERNMENT LEGISLATION MUNICIPAL GOVERNMENT  Created by provincial legislation  Bylaw – a law made by the municipal level of government  Examples:  zoning  taxation for the benefit of the municipality  subdivision  licensing

11. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-11 THE CANADIAN LEGAL SYSTEM STATUTE LAW AND JURISDICTION Exclusive jurisdiction –that one level of government holds entirely on itsown Concurrent jurisdiction – the area being regulated does not fall neatly into federal or provincial jurisdiction but straddles them Paramountcy – a doctrine that provides that federal laws prevail when there are conflicting or inconsistent federal and provincial laws

12. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-12 THE CANADIAN LEGAL SYSTEM Federal Government Parliament House of Commons Senate law-making jurisdiction by s. 91 Constitution Act, 1867 Territorial Governments limited self-government subject to federal control Municipal Governments law-making jurisdiction by the provincial legislature Provincial Government Legislature law-making jurisdiction by s. 92 Constitution Act, 1867 LAW-MAKING JURISDICTION Figure 2.1

13. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-13 EXECUTIVE BRANCH OF GOVERNMENT EXECUTIVE BRANCH Formal Executive – branch of government responsible for the ceremonial features of the government Convention – rules that are not enforceable by a court but that practically determine how a given legal power is exercised Political Executive – branch of government responsible for day to day operations including making and executing government policy as well as administering departments

14. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-14 EXECUTIVE BRANCH OF GOVERNMENT EXECUTIVE BRANCH Cabinet – a body composed of all Ministers heading government departments, as well as the prime minister or premier Regulations – rules created by the political executive that have the force of law

15. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-15 JUDICIAL BRANCH OF GOVERNMENT JUDICIAL BRANCH Judiciary – a collective reference to judges Judges – those appointed by federal and provincial governments to adjudicate disputes and preside over criminal proceedings Disputes – can be divorce, custody of children, breach of contract, car accidents, disputes over wills, and other wrongful acts causing damage or injury

16. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-16 JUDICIAL BRANCH OF GOVERNMENT THE SYSTEM OF COURTS  Inferior Courts  Superior Courts  Supreme Court of Canada  Federal Court of Canada

17. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-17 Supreme Court of Canada Courts of Appeal Superior Courts Small Claims Courts Federal Court (Appeal Division) Federal Court (Trial Division) COURTS DEALING WITH COMMERCIAL DISPUTES Figure 2.2

18. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-18 CANADIAN CHARTER OF RIGHTS AND FREEDOMS CHARTER OF RIGHTS AND FREEDOMS  A guarantee of specific rights and freedoms enshrined in the Constitution and enforceable by the judiciary  Created in 1982 and it is intended as a judicially enforceable guarantee that the government will act consistently with the values associated with a liberal democratic state

19. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-19 CANADIAN CHARTER OF RIGHTS AND FREEDOMS FUNDAMENTAL FREEDOMS S. 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

20. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-20 CANADIAN CHARTER OF RIGHTS AND FREEDOMS EQUALITY RIGHTS S. 15 (1) Every individual is equal before and under the law and has the right to equal protection …. Without discrimination based on: a)National or ethnic origin b)Colour c)Race d)Religion e)Sex f)Age g)Mental or physical disability

21. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-21 CANADIAN CHARTER OF RIGHTS AND FREEDOMS RESTRICTIONS IN THE CHARTER S. 1 – … Guarantees the rights and freedoms set out in the Charter subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society S. 33 – Parliament or a Legislature may expressly declare in an Act …that the Act …shall operate notwithstanding a provision included in section 2 or sections 7 to 15 of this Charter

22. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-22 SOURCES OF LAW Common Law Sources of Law Constitutional Convention Royal Prerogative Statute Law Figure 2.4

23. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-23 SOURCES OF LAW Royal Prerogative – historical rights and privileges of the Crown, including the right to conduct foreign affairs and to declare war Common Law – rules that are formulated in judgments Precedent – an earlier case used to resolve a current case because of its similarity Equity – rules that focus on what would be fair given the circumstances, rather than the strict rules that the Common Law might dictate

24. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-24 CLASSIFICATIONS OF LAW DIVISIONS/CLASSIFICATION International Law *governs relations between states and other entities with international legal status Domestic Law *internal law of a country including statute and common law Substantive Law *law that defines rights, duties and liabilities Procedural Law *law governing the procedures to enforce rights, duties and liabilities

25. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-25 CLASSIFICATIONS OF LAW Public Law *all areas of law relating to or regulating the relationship between persons and governments Common Law *judge made law and the system of private law Private Law *law which is concerned with dealings between persons Civil Law *Quebec system of private law

26. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-26 CLASSIFICATIONS OF LAW EXAMPLES OF PUBLIC LAW Criminal law Tax Law Constitutional Law Administrative Law See also Figure 2.5

27. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-27 CLASSIFICATIONS OF LAW EXAMPLES OF PRIVATE LAW Contract Law Tort Law Property Law Company Law Quebec Civil Code – the rules of private law that govern Quebec See also Figure 2.6

28. Copyright © 2004 by Nelson, a division of Thomson Canada Limited. 2-28 ADMINISTRATIVE LAW AND BUSINESS ADMINISTRATIVE LAW  rules created and applied by those having governmental powers such as boards, agencies, commissions, and tribunals  significant impact on business because much commercial activity is regulated by these bodies