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Newsletter > June 2018

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In this issue: 1. News & Upcoming Events 2. Transportation Modernization Act Becomes Law 3. Enforcing Judgments / Piercing Corporate Veil 4. Medical Cannabis and Human Rights 5. Doing Business in Canada – Competition Law 6. Removal Order for Sunken Tug Valid

Several container ships loading and off loading in a port with small lighthouse in the harbour for the May 2018 newsletter.

1. News & Upcoming Events

  • Louis Amato-Gauci will participate in a webinar hosted by the National Customs Brokers & Forwarders Association of America, Inc., on Thursday, July 12, from 1:00 to 2:00 PM EDT, regarding the status of the NAFTA Modernization Negotiations, the steel and aluminum tariffs authorized under Section 232 of the Trade Expansion Act of 1962, and Canada’s response to those tariffs.  Other participants: Evelyn Suarez, The Suarez Firm, Washington DC Alejandro García Seimandi (García Seimandi, Flores & Villeda – Mexico City)
  • The Midwest Regional and Short Line Railroad Conference, organized by the Minnesota Regional Railroads Association will take place from 15th July to 17th July 2018 at the Madden’s On Gull Lake in Brainerd, United States.
  • The International Conference on Transportation & Development, organized by the American Society of Civil Engineers will take place from 15th July to 18th July 2018 at the Wyndham Grand Pittsburgh Downtown in Pittsburgh, United States of America.
  • Ship Arrest Conference, July 23-24, 2018 Singapore
  • China Blockchain & Supply Chain Summit, July 26-27, Shanghai, China.
  • The Canadian Board of Marine Underwriters Annual Golf Day will take place on August 21st, 2018 at the Richmond Hill Golf Club.

2.  The Transportation Modernization Act Becomes Law

In 2016 the Federal Government undertook a review of how to make the Canadian transportation system “better, smarter, cleaner and safer”. Commercial stakeholders and citizens weighed in on the process.  Taking both the submissions and the findings from a 2015 review of the Canada Transportation Act (*1) into consideration Transport Canada articulated a strategic plan to support a new vision for the future of transportation in Canada entitled “Transportation 2030: A Strategic Plan for the Future of Transportation in Canada” (*2). Transportation 2030 Transport Canada’s strategic plan grouped areas of work under five different themes: “The Traveller” This theme’s agenda calls for the provision of greater choice, better service, lower costs and new rights for consumers.  Particular goals identified concern the establishment of an Air Travellers Passenger Rights Regime to better protect customers, changing international ownership rules to increase competition and reduce fairs in the domestic airline industry and working with the Canadian Air Transport Security Authority (CATSA) to ensure that passengers can go through security faster while maintaining high security standards. “Safer Transportation” The public interest calls for a safer, more secure transportation system that Canadians can trust.  Particular goals identified concern a review of the Railway Safety Act (*3) to enhance railway safety standards including the introduction of locomotive voice and video recorders to be used during accident investigations. “Green and Innovative Transportation” This agenda item involves the reduction of pollution through new technologies. A particular goal concerns the reduction of carbon pollution from the transport sector, which accounts for 23% of air pollution.  This would involve investment in electric car charging and low-emissions fuelling stations. “Waterways, Coasts and the North” The need has been identified to build world-leading marine corridors that are competitive, safe and environmentally sustainable, and to enhance the northern transportation infrastructure.  This theme would require the introduction of stronger environmental protection for Canada’s coastline, the implementation of a moratorium on oil tanker traffic along the northern coast of British Columbia, and the introduction of a plan to increase marine safety, emergency response and a closer partnership with coastal communities. “Trade Corridors to Global Markets” The need has been identified to improve the performance of Canada’s transportation system to expedite the shipment of products to markets and to grow Canada’s economy.  This would call for the investment of $10.1 billion in the transportation infrastructure to help eliminate bottlenecks and build more robust trade corridors. The Transportation Modernization Act (Bill C-49) With a view to starting the trek towards implementation of “Transportation 2030”, on May 16, 2017 the federal government proposed Bill C-49 (the “Transportation Modernization Act”) to improve the aviation and railway transportation systems and to also effect certain changes to the maritime industry.  On May 23, 2018, B C-49 received “Royal Assent” – that is, the formal signing into law. The Transportation Modernization Act (officially, “An Act to Amend the Canada Transportation Act and other Acts respecting transportation and to make related and consequential amendments to other Acts”) features many important developments affecting the aviation, rail and maritime industries. The Aviation Industry The Canada Transportation Act has now been amended to, among other things:
  • Require the Canadian Transportation Agency to create a set of clear rules about how airlines in Canada must treat passengers, and be entitled to clear, consistent, transparent and enforceable compensation, as well as minimum standards of treatment when things do not go as planned.
  • The Transportation Modernization Act amends the definition of “Canadian” in the Canada Transportation Act in order to raise the threshold of voting interests in an air carrier that may be owned and controlled by non-Canadians while retaining its Canadian status, while also establishing specific limits related to such interests.
  • The Transportation Modernization Act amends the Canada Transportation Act to create a new process for the review and authorization of arrangements involving two or more transportation undertakings providing air services to take into account competition considerations and broader considerations respecting public interest.
The Railway Industry
  • Require the Canadian Transportation Agency to offer information and informal dispute resolution services.
  • Expand the government’s regulation making power to require major railway companies to provide to the government information relating to rates, service and performance.
  • Repeal provisions in the Canada Transportation Act dealing with insolvent railways in order to allow the laws of general application respecting bankruptcy and insolvency to apply to those companies.
  • Clarify the factors that must be applied in determining whether railway companies are fulfilling their service obligations.
  • Shorten the time period by which the Canada Transportation Agency is to adjudicate a “level of service” complaint.
  • Allow Shippers to obtain terms in their contracts dealing with amounts to be paid in relation to a failure by a railway to comply with its service obligations.
  • Require the Canada Transportation Agency to set the inter-switching rate annually.
  • Provide for a new remedy for shippers who only have access to the lines of one railway company at the point of origin or destination of the movement of traffic in circumstances where inter-switching is not available.
  • Change the process for the transfer and discontinuance of railway lines to, among other things, require railway companies to make certain information available to the government and the public and to establish a remedy for non-compliance with the process.
  • Change provisions respecting the maximum revenue entitlement for the movement of Western grain and require certain railway companies to provide to the government and the public information respecting the movement of grain.
  • Change provisions respecting the final offer arbitration process by, among other things, increasing the maximum amount for the summary process to $2 million and by making a decision of an arbitrator applicable for a period requested by the shipper of up to two years.
  • Amend the Railway Safety Act, by prohibiting a railway company from operating railway equipment and a local railway company from operating railway equipment on a railway unless the equipment is fitted with the prescribed recording instruments and the company, in the prescribed manner and circumstances, records the prescribed information using those instruments, collects the information that it records and preserves the information that it collects, and
  • Amend the Canadian Transportation Accident Investigation and Safety Board Act (*4) to allow the use or communication of an on-board recording as defined in that Act if that use or communication is expressly authorized under certain other federal statutes.
The Maritime Industry
  • The Transportation Modernization Act amends the Coasting Trade Act (*5) to enable the repositioning empty containers by ships registered in any register, conditional on the eventual enactment into law of Bill C-30 being the Canada-European Union Comprehensive Economic and Trade Agreement Implementation Act.
Conclusion The changes brought about by the Transportation Modernization Act are wide sweeping and require careful study.  Other amendments to governing transportation legislation remain on the horizon on the trek towards “Transportation 2030”. Gordon Hearn Endnotes (*1) S.C. 1996, c 10 (*2) See “Transportation 2030: A Strategic Plan for the Future of Transportation in Canada” at www.tc.ga.ca (*3) R.S.C. 1985, c. 32 (4th Supp.) (*4) S.C. 1989 c. 3 (*5) S.C. 1992, c. 31  

3. Enforcing Judgments, Related Companies, and “Piercing the Corporate Veil”

A case that has attracted considerable interest of late is that of Yaiguaje v. Chevron Corporation, the latest and possibly last chapter of which was written by the Court of Appeal for Ontario on May 23, 2018 (*1). The case involves a protracted legal saga related to environmental damage caused by Texaco’s operations in Ecuador between 1964 and 1992. After being denied success in a class action commenced in the United States, the appellants eventually secured judgment in Ecuador against Texaco’s parent, Chevron Corporation, following an 8-year trial and 2 appeals. The case in Ontario involves the appellants’ attempts to enforce their judgment against Chevron Corporation against one of its Canadian subsidiaries. The case is also of interest because, as the Ecuadoran judgment is for $9.5 billion USD, the stakes could hardly be higher. The appellants, who ultimately succeeded in the Ecuadoran courts, sought to enforce their judgment in Canada against the assets of a seventh-level subsidiary of Chevron Corporation  – Chevron Canada Limited (“Chevron Canada”). Having won on the jurisdictional question of whether an enforcement action could be brought in Canada (an issue which went all the way to the Supreme Court of Canada), the issues in this proceeding were whether Chevron Canada’s assets and shares were available for execution to the appellants to satisfy the judgment debt of Chevron Corporation. For litigants, the court’s decision is interesting for its clarification of how the Execution Act (*2) applies as well as for what it has to say about the availability of assets of related companies when enforcing a judgment debt. In the Court of Appeal it was observed that, once a foreign judgment has been recognized in this jurisdiction, local law applies as to its enforcement. The court further noted that the Execution Act “granted extensive rights to collect the judgment debt.” The appellants specifically sought to rely on the broad language of s. 18 of the Act, which permits the sheriff to seize and sell “any equitable or other right, property, interest or equity of redemption in or in respect of any goods, chattels or personal property of the debtor ….” The theory on which the appellants sought to recover was that, as Chevron Canada was indirectly an “asset” of Chevron Corporation, the latter’s assets, of which Chevron Corporation was the ultimate 100% beneficial owner, should be available for execution. The Court of Appeal rejected this ground of appeal, upholding the long-standing rule of the separateness of corporations from their shareholders. That is, while acknowledging that the appellants might have a claim against Chevron Corporation’s ownership interest in, for example, shares of Chevron Canada – assuming it owned any directly – they could not obtain execution against the assets of Chevron Canada itself, even though these might ultimately be available to its shareholders on wind-up. This is because Chevron Corporation, even if a shareholder of its subsidiary, did not “own” those goods directly. While it was still operating, only Chevron Canada, a separate legal entity, owned these assets. Quite apart from this, the Court also noted that the separateness of corporations themselves had to respected; that is, Chevron Corporation did not own the shares of Chevron Canada. Ownership of those shares was in fact seven times removed from the ultimate corporate parent. Further, as to the broad language of the Execution Act itself, the court affirmed that any rights to property under it were procedural only, and that it could not create substantive rights. It would thus only allow the sheriff to enforce a judgment debtor’s existing rights on behalf of the creditor by stepping into the judgment debtor’s shoes. In short, as Chevron Corporation had no existing “rights” to shares, or in any other property, of Chevron Canada, being several corporations removed in the chain of ownership, the Execution Act could not create these rights. Those rights would default to being determined by the law relating to separate corporate personality. Attempting to bypass the corporate separateness principle by another path, the appellants advanced the argument that this would be an appropriate case to “look through” intervening corporate entities, asking the court to use its power in equity to “pierce the corporate veil” – in effect, to treat Chevron Canada and Chevron Corporation as one and the same company. On this issue, the Court of Appeal took a similarly hard line. The Court held that the test for whether the corporate veil should be pierced applied equally to proceedings for enforcing judgments as it already did in proceedings where liability was yet to be determined. Citing the test in Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (*3), it noted that, in this case, the appellants needed to satisfy the court that a company – here, Chevron Canada – is “a ‘mere façade’ concealing the true facts.” Before the Court would pierce the corporate veil, it further had to be satisfied that: (i) the subsidiary is a “mere puppet” of the parent; and (ii) the subsidiary was incorporated for a fraudulent or improper purpose. Because the appellants conceded that Chevron Canada was not incorporated for either a fraudulent or for an improper purpose, having not met this test, the appeal necessarily failed on this ground. The Court also saw no reason for applying the “group enterprise theory of liability,” which holds that where related companies operate as a single entity, they should be responsible for each other’s debts. The majority of the Court of Appeal noted that this has been “consistently rejected” by the courts. While it conceded that this might reflect economic reality, there were good policy reasons for separating this from “legal reality.” To do otherwise would cause a separate mischief by undermining the fundamental principles of corporate law on which many business decisions are based. The immediate takeaway from this ruling is that the attempt to enforce a judgment, foreign or domestic, against related companies is likely to be swiftly shut down in all but the most extreme and exceptional cases. One must be careful not to read too much into this decision, however. In both the majority and minority reasons, the court was clearly influenced by certain background facts; in particular, the earlier finding by the US courts that the Ecuadoran judgment against Chevron Corporation could not be enforced in the US because it “was the result of massive fraud.” Thus Nordheimer J.A., who agreed in the result, nevertheless gave compelling concurring reasons why there should be less concern about a court piercing the corporate veil in enforcing a judgment, where liability is already fixed, against a related entity than there might be in those cases where questions of liability have yet to be determined. Further, in cases like this one, where Chevron Corporation has 100% ownership of its subsidiaries, there is similarly a diminished concern about possible injury to “innocent” shareholders, as there would be none. Thus this may well prove to be a case where the strong language of the majority is somewhat deceptive as to the state of the law. While corporate separateness appears for the moment to have won the day, this remains very a much a case of watch this space. Oleg M. Roslak Endnotes (*1) 2018 ONCA 472 [Chevron]. (*2) Execution Act, R.S.O. 1990, c. E.24. (*3) (1996) 28 O.R. (3d) 423 (Gen Div.), affirmed (1997) 74 A.C.W.S. (3d) 207 (Ont. C.A.) [Transamerica].  

4. Medical Cannabis and Human Rights:  Case Law Update

This article provides a summary of two recent cases regarding medical cannabis; the results are welcome news for employers.
  1. Medical cannabis and benefit plans
If your employee benefit plan does not provide coverage for medical cannabis, can you be found to be in breach of human rights legislation?  The Nova Scotia Court of Appeal in Canadian Elevator Industry Welfare Trust Fund. v. Skinner (*1) says no. Gordon Wayne Skinner worked as an elevator mechanic and was a member of the International Union of Elevator Constructors.  He was eligible for health benefits under a Welfare Plan administered by the Trustees of the Canadian Elevator Industry Welfare Trust Fund (the “Trustees”).  In 2010 Mr. Skinner was involved in a motor vehicle accident while driving his employer’s vehicle.  He suffered serious injuries and was not able to return to work.  In 2012 he began using medical cannabis which was initially paid for by the no fault medical benefits under the motor vehicle insurance policy.  These benefits expired after two years.  He then sought coverage through workers compensation which was denied, and which he has appealed.  Pending the outcome of that appeal, Mr. Skinner sought coverage for the medical cannabis under the Welfare Plan.  Drugs which are not approved by Health Canada are not funded by the Welfare Plan.  Medical cannabis is not approved by Health Canada and therefore the Trustees denied Mr. Skinner’s claim for coverage.  Mr. Skinner launched a human rights complaint to the Nova Scotia Human Rights Board of Inquiry (“Board”), alleging that by not covering his need for medical cannabis, he had been discriminated against on the basis of disability.  The Board found in favour of Mr. Skinner and held that the denial of coverage for medical cannabis was discrimination based on disability. The Trustees appealed the Board’s decision to the Nova Scotia Court of Appeal.  All parties agreed that Mr. Skinner had a disability.  The real issue was whether the Board properly applied the test for determining discrimination, and whether it erred in law when it held that non-coverage of Mr. Skinner’s medical cannabis was “based on” his disability.  The Court examined the language in various Canadian human rights statutes and while each piece of legislation may use slightly different wording, what is clear and consistent is that there must be a connection between the distinction and the adverse treatment or effect.  It is not enough to conclude that Mr. Skinner experienced an adverse effect arising from the non-coverage for medical cannabis under the Welfare Plan; it was necessary to link that exclusion with Mr. Skinner’s membership in an enumerated group.  The Board failed to apply the legal requirement that the decision to deny coverage was “based on” Mr. Skinner’s disability.   The Court held that the Welfare Plan excluded any drug not approved by Health Canada and therefore the exclusion was not “based on” Mr. Skinner’s disability.  The Court stated that benefit plans are necessarily limited in many ways. The Trustees had an obligation to determine what benefits would be available and chose Health Canada’s approval as a limit for prescription drug benefits.  If Mr. Skinner’s logic was accepted, every under-inclusive benefit plan would result in prima facie discrimination.  Every request for medication not covered under a plan could be the subject of a human rights application, and require justification by the plan administrators for refusal.  Human rights boards would become arbiters of private benefit plans.  Because the denial of coverage for medical cannabis was not based on Mr. Skinner’s disability, but because the Welfare Plan did not cover drugs not approved by Health Canada, the Court set aside the Board’s finding of discrimination.
  1. Medical Cannabis use at work
The Ontario Human Rights Tribunal (“HRTO”) in Aitchison v. L & L Painting and Decorating Ltd. (*2) recently reviewed the limits of accommodating the use of medical cannabis at work.  James Aitchison was a seasonal painter who worked for a commercial contractor who restored hi-rise buildings.  The work was seasonal, from May to October, and Mr. Aitchison worked 12-hour days, 6 days a week. His duties included performing work on a swing stage located 37 floors above the ground.  Mr. Aitchison used medical cannabis for chronic paid due to a degenerative disc disease.  Mr. Aitchison’s employment was terminated when he was observed smoking cannabis on the swing stage, untethered and not wearing his hard hat, during a break.  The employer relied on its zero tolerance policy, which prohibited the use of intoxicating drugs and alcohol at the worksite. Mr. Aitchison launched a human rights application, alleging that his employer failed to accommodate him, and by terminating his employment, discriminated against him based on disability.  The HRTO held that Mr. Aitchison did not have an absolute right to smoke cannabis at work, regardless of whether it was for medical purposes.  Doing so was a health and safety risk, given the nature of the job site. The HRTO also held that Mr. Aitchison did not seek accommodation for the use of medical cannabis while at work, and therefore the employer did not fail to accommodate a request that was not made.  The HRTO further stated that the employer is not obligated to accommodate employee preferences if those preferences would amount to undue hardship, and that the HRTO would have had no difficulty in concluding that Mr. Aitchison’s preferred accommodation (smoking cannabis on work breaks) amounted to undue hardship given the health and safety concerns at this workplace. The HRTO also upheld the employer’s reliance on its zero tolerance policy, which policy was reviewed with all employees at the start of each season.  In addition, a safety video was shown to the employees, and they then had to complete a questionnaire demonstrating their understanding of the policy.  The HRTO held that given the health and safety risks at this worksite, Mr. Aitchison was terminated for violation of the zero tolerance policy and there was no evidence to support his claim that his disability was a factor in the termination. Finally, the HRTO reviewed the zero tolerance policy itself to determine whether it was discriminatory. It was important that the policy did not reference termination of employment if an employee used intoxicating drugs or alcohol at work, but rather that the employee would be removed from the job site.  The fact that policy did not prescribe automatic termination means that there was some flexibility for the employer to consider requests for accommodation.   It was also important that the policy was in place at a safety sensitive workplace. In addition to confirming that there is no absolute right to use medical cannabis at work, and that accommodating its use in a safety sensitive workplace may result in undue hardship on the employer, this decision is a good reminder that a zero tolerance policy must also comply with human rights laws, and provide for the duty to accommodate in appropriate circumstances, in order to be upheld. Carole McAfee Wallace Endnotes (*1) 2018 NSCA 31 (CanLII) (*2) 2018 HRTO 238 (CanLII)   5. Doing Business in Canada – Part 9 (*1) – Competition Law The Competition Act (the “Act”) is a federal law governing most business conduct in Canada. It contains both criminal and civil provisions aimed at preventing anti-competitive practices in the marketplace. Its purpose is to maintain and encourage competition in Canada in order to:
  • promote the efficiency and adaptability of the Canadian economy
  • expand opportunities for Canadian participation in world markets while at the same time recognizing the role of foreign competition in Canada
  • ensure that small and medium-sized enterprises have an equitable opportunity to participate in the Canadian economy
  • provide consumers with competitive prices and product choices.
Like U.S. antitrust laws, the Act bans harmful restraints on trade. Anti-competitive activities prohibited by the Act include price-fixing, bid-rigging, exclusive dealing, tied selling, market restriction, refusal to deal and abuse of dominance, which is comparable to the American concept of monopolization. The Act also permits the government to review mergers to assess their anti-competitive effects, and protects consumers by prohibiting deceptive marketing and advertising. The Act comprises the entirety of competition law in Canada and there is only one agency, the Competition Bureau, responsible for administering and enforcing it. There are no provincial or territorial competition laws. The Bureau investigates anti-competitive activity and may challenge a merger or other civil violation by filing an application with the Competition Tribunal. The Competition Tribunal is a separate, specialized court with jurisdiction to examine “reviewable practices,” discussed below, and determine whether a civil violation of the Act has occurred. The Competition Act also provides a limited scope for private parties to bring complaints before the Competition Tribunal for specific non-criminal anti-competitive behaviour involving any of five reviewable matters: refusal to deal, price maintenance, exclusive dealing, tied selling and market restriction. The Competition Tribunal can issue both interim and final orders remedying non-criminal anti-competitive practices. Suspected criminal offences are referred by the Commissioner to the Attorney General for Canada for prosecution before the courts. Criminal offenders are subject to fines, prohibition orders, interim injunctions and/or imprisonment. Merger Regulation Participants in mergers that exceed a certain size threshold must notify the Bureau ahead of time. However, the Bureau may review and challenge a merger of any size that gives rise to significant competitive harm, regardless of whether pre-merger notification is required. In general, mergers are subject to review where they are likely to substantially prevent or lessen competition. In considering whether a merger will substantially lessen competition, the Competition Tribunal will consider a variety of factors, including: the extent of foreign competition faced by the parties to the merger; the likelihood of the business of one of the parties to the merger failing in the absence of the merger; the availability of substitute products for those supplied by the merging parties; the extent of barriers to entry into the market; and the extent of remaining post-merger competition. In addition, the Competition Tribunal will consider whether the merger is likely to bring about gains in efficiency that will be greater than, and will offset, any anti-competitive effects of the merger. If the Competition Tribunal determines that a merger is likely to substantially lessen competition, the Competition Tribunal may prohibit or dissolve the merger in whole or in part, or may allow it to proceed under imposed conditions. Larger mergers require pre-merger notification and the filing of information with the Commissioner of Competition. Generally, for a merger to be notifiable (i.e., subject to pre-merger notification), two threshold tests must be met: the “size of parties test” and the “size of transaction test.” Under the “size of parties test,” the parties to the transaction, together with their respective affiliates (defined to include all corporations joined by a 50%-plus voting link), must have assets in Canada or gross revenues from sales in, from and into Canada in excess of C$400 million in the aggregate. The size of transaction threshold is met where the assets in Canada or gross revenues from sales in and from Canada generated by such assets exceed a stipulated amount (an annually adjusted amount). On February 10, 2018 “size of transaction” threshold was increased to C$92 million, which was an increase from the 2017 threshold of C$88 million. Failure to provide pre-merger notification when it is required is a criminal offense. The pre-merger notification process is similar to the review process used in the U.S. After the initial notification, there is a 30-day review period. The Bureau then has the discretion to order a second review to further evaluate the proposed transaction, which is similar to the “second request” used in the U.S. by the Federal Trade Commission and the Department of Justice. Abuse of Dominant Position The Act does not penalize a company simply for acquiring a dominant position in a market as a result of superior performance. But a dominant company may be subject to sections 78 and 79 of the Act if it exploits its dominance by engaging in anti-competitive conduct that eliminates or punishes competitors, or prevents new competitors from entering the market. When a dominant firm attempts to exclude potential competitors or to eliminate existing competition, the Competition Tribunal can be called upon to intervene. It is not always easy to distinguish competitive from anti-competitive practices. There is nothing wrong with tough competition, even from a dominant firm. However, when a firm’s intention is to eliminate competition or prevent entry into or expansion in a market, there could be an abuse of dominant position. The Act includes a non-exhaustive list of anti-competitive acts. These include selling at prices lower than acquisition costs in order to discipline or eliminate a competitor, or inducing a supplier to refrain from selling to competitors. Criminal Violations It is a crime under the Act (subject to available defences) to enter into an agreement or arrangement with a competitor to fix prices for the supply of a product, allocate customers or markets for the production or supply of a product, or restrict the production or supply of a product. It is also a crime to engage in bid-rigging. Other agreements between competitors that do not fall into one of the categories defined in Section 45, such as strategic alliances or joint ventures, are reviewable practices. While these agreements are not, per se, illegal, the Competition Tribunal may determine that a civil violation exists if it finds that the agreement has or is likely to prevent or lessen competition substantially in a market. Criminal violations now carry a fine of up to $25 million and 14 years in prison. If a company provides the Competition Bureau with information about a criminal agreement, the company may qualify for immunity from prosecution under the Bureau’s Immunity Program. To qualify for immunity, the company must be the first to provide information about the activity to the Bureau. Additionally, it must cease its illegal conduct and cooperate with the Bureau, and the information provided must lead to a criminal prosecution. Deceptive Advertising The Competition Act contains both criminal and civil provisions prohibiting misleading and deceptive advertising and marketing. A materially false or misleading statement or representation that is made knowingly or recklessly is a criminal violation. Other criminal violations include deceptive telemarketing, deceptive notices of winning a prize, double ticketing and pyramid selling schemes. If the disputed representations are not made deliberately or recklessly, the Competition Act provides for civil sanctions, including orders prohibiting a continuation of the anti-competitive practice and significant administrative monetary penalties. Private Litigants The Competition Act permits plaintiffs to pursue two types of claims: a “private action” before the courts for damages and other relief for conduct that violates the Act’s criminal provisions, and an application for “private access” before the Competition Tribunal for conduct that qualifies as a reviewable practice. Private actions against parties alleged to have violated criminal provisions of the Act may be brought in either the federal or provincial courts. These claims are often brought as class action lawsuits. Notably, the Act only allows an award for actual damage or loss and the cost of the investigation and legal proceedings. Rui M. Fernandes Follow Rui M. Fernandes on Twitter @RuiMFernandes and on Linkedin. See also his blog at http://transportlaw.blogspot.ca Endnotes (*1) This article is part 9 of 17 parts dedicated to a review of doing business in Canada. Subsequent articles will include Sale of Goods, Intellectual Property, Privacy, Real Property, Environmental Laws, Taxation, Insolvency, Litigation and ADR.   6. Removal Order for Sunken Tug Valid In the recent decision of Jones Marine Group Ltd v. Canada (Transportation, Infrastructure and Communities) 2018 FC 613 the Court had to consider whether to set aside the order of the Minister to have the applicant Jones Marine Group Ltd.’s (“Jones”) sunken tug removed from Northumberland Channel pursuant to the Navigation Protection Act. The applicant Jones challenged the decision principally on the basis that it was (a) unreasonable; and (b) arrived at through a process that breached procedural fairness. The applicant owned the “Samantha J”, a tug that sank on October 6, 2014 in the Nanaimo port area, which includes deep sea ship anchorages located within Northumberland Channel. The wreck was located in an area intended for the anchoring of large deep-sea vessels up to 225m length over all. On three prior occasions pilots servicing the area refused to anchor deep sea vessels at the location because of the presence of the wreck. On January 20, 2015, the Minister issued a Notice to Remove under s 16 of the Navigation Protection Act. Jones challenged the notice taking the position that the wreck was not a hazard to navigation. Several meetings followed between the Minister’s representative, Jones’ representative and the B.C. pilots’ representatives. By mid-March 2016, the Nanaimo Port knew of at least 15 incidents since January 1, 2016 where B.C. pilots had refused to anchor deep sea vessels in the area because of the wreck’s presence. A second notice to remove was issued. Further meetings were held. On October 6, 2016, a further meeting was held. The October 6 meeting included the following:

a) The B.C. pilots’ description of the various ways an anchor chain could foul the wreck and the risk of fouling tow lines due to the area being frequently used by tugs with large barges and log barges. There was a dispute as to whether some of this information was truly new information or simply variations on the same theme of risk of fouled tow lines. b) The Port’s description of incidents where access to the location had been denied and a discussion of an October 2015 snagging incident. c) A discussion of displaced vessels from the location that were forced to anchor elsewhere and the cascading impact on the national availability of anchorages. d) A discussion of the probability of fouling being low but the severity of such a fouling being high.

In November 2016, the Minister issued a third Notice to Remove requiring the removal of the wreck by December 31, 2016. The Navigation Impact Assessment that formed part of the reasons for the decision provided as follows:

Wreck of the Samantha J is causing a substantial interference to navigation for the purpose of anchoring deep-sea vessels within the Port of Nanaimo. Alternative mitigations have not been identified. Notice to Remove, pursuant to NPA s. 16(1), issued on 20 Jan 2015. Following correspondence with the proponent’s representatives, and further research conducted by NPP and the NPA, notice re-issued on 05 Oct 2015.

Following meeting with BCCP, NPA and representatives on Oct 6th, 2016 and considering relevant information, while the likelihood of a deep-sea vessel to foul an anchor line is low, the resulting impact should it occur is substantial and could result in severe damage to a vessel and the environment. New Notice to remove issued on Nov 9, 2016.

The court commented on the standard of review of the decision finding that:

There is some disagreement between the parties with respect to the standard of review of the merits of the Decision. In my view, the Minister (or his delegate) has a wide discretion as to whether to order removal and what may be done in that process as evidenced by the words “[t]he Minister may” in s 16(1) and (2). Moreover, in respect of whether something is an “obstruction”, that conclusion must be reasonable – it is not simply a discretionary finding. The scope of whether an obstruction exists is wide since the exercise is within the Minister’s home statute in an area with which his or her officials have some experience, if not expertise. In this case the delegate had the benefit of independent expertise in the BC Pilots’ involvement and opinions. The standard of review therefore is reasonableness, including deference to the Minister in both the assessment of risk and in the corrective actions to be ordered.

On the issue of procedural fairness, the applicant’s position was that the Minister failed to provide a fair process by not providing adequate notice, not giving the applicant a reasonable opportunity to respond to the evidence and by coming to the decision on the basis of an incomplete record. The court found that the process was fair. Justice Phelan held that:

The Act leaves it to the Minister to set the necessary procedure. Over the two years that this issue of the Wreck was being debated, there was nothing that suggested the type of process to which the Applicant says it was entitled.

This was a non-judicial administrative decision requiring Greville [the Minister’s representative] to interpret and implement his home statute, and rely on his department’s expertise or the expertise available to it in addressing marine safety, including any potential safety risks. It is not an ongoing process of argument and debate.

The court held that the process was fair and that the applicant was entitled to a fair process, but not a never-ending one. The application for judicial review was dismissed. Rui M. Fernandes Follow Rui M. Fernandes on Twitter @RuiMFernandes and on Linkedin. See also his blog at http://transportlaw.blogspot.ca

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