Business Law in Canada
Twelfth Edition
Chapter 2
Introduction to the Legal
System
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“
- Anonymous Student, F21
”
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Learning Objectives (1 of 2)
When you complete Chapter 2, you should be able
to:
1. Define “law” and identify the types of law that
exist in Canada
2. Distinguish between Canada’s civil law and
common law legal systems
3. Explain how powers are divided and exercised
under Canada’s Constitution
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Learning Objectives (2 of 2)
5. Describe the rights and freedoms protected by
the Charter of Rights and Freedoms
6. List the areas and grounds upon discrimination is
prohibited by human rights legislation
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What Is Law?
• Difficult to come up with a satisfactory, all-inclusive
definition for law
• Law is the body of rules made by government that
can be enforced by the courts or by other
government agencies
• Law and morality are not synonymous
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Categories of Law
• Substantive Law
– The rights and rules that govern behaviour and set
limits on conduct
• Procedural Law
– determines how substantive laws will be enforced
• Ex. Criminal Code
–
–
–
–
Substantive law: S.235(1) Punishment for Murder
Procedural Law: Part XIX – Indictable Offences
Substantive law: S.174(1) Nudity
Procedural law: Part XXVII – Summary Convictions
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Categories of Law
• Public Law
– Includes Constitutional Law, Criminal law, and
Administrative law and determines how the country is
governed and regulates our relationship with
government
• Private Law
– Governs personal, social and business relationships
– Includes Tort Law, Business Law, Contract law, etc.
– Also referred to as civil law
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Civil Law Legal System
• Quebec’s noncriminal legal system is based on
the French Civil Code
• French civil law is its central code
– a list of rules stated as broad principles of law that
judges apply to the cases that come before them
• Prior decisions do not constitute binding
precedents
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Common Law Legal System
• Common law system emerges in England
• Function of the royal court was to be impartial and
enforce customs and traditions already in place
• Uses stare decisis
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Stare Decisis
• A system of justice where judges are required to
follow precedent
• Most significant feature of the common law
system: the decision of a judge is binding on all
judges in lower courts
• Allows the parties to predict the outcome of the
litigation and thus avoid going to court
• Following precedent can be inflexible and may not
acknowledge changing social attitudes
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Equity
• Common law had limitations due to the restrictions
of stare decisis
• Resulting principles known as the Law of Equity
– operates to provide equitable relief/remedies when
there is a recognizable right but no remedy under the
common law. The law of equity has developed over
centuries to provide equitable doctrines and equitable
maxim
– Allowed flexibility in decisions but also appeared
arbitrary
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Equity cont.
• Ex. The Ontario’s Family Law Act (FLA) ONLY
applies to spouses and they define spouses as
two persons who are married to each other. The
FLA also governs division of property after
seperation. So … what happens to “living common
law” couples?
• Under the FLA, living common-law couples are not
entitled to the equalization of their family property.
Each party in the common-law relationship is
entitled to only whatever it is that they brought into
the relationship or acquired during the
relationship.
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Equity cont.
• the courts have come up with equitable remedies
for those in common-law relationships such that
parties to the common-law relationship are able to
claim for unjust enrichment
• Prove: sufficiently, substantially and directly
contributed to the acquisition, preservation,
maintenance, or improvement of the property
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Statutes
• Parliamentary supremacy dictates that where case
law and statute law conflict, statutes prevail
• The courts cannot overrule Parliament’s legislation
and no Parliament can pass laws that future
Parliaments cannot change
• Statutes and legislation determine what we must
do to carry on business in Canada
• Ex. Canada labour code, Criminal code, Income
Tax Act: https://laws-lois.justice.gc.ca/eng/acts/
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Confederation (1 of 2)
• British North America Act created Canada in 1867
– Now the Constitution Act, 1867
• Constitution similar in principle to that of the
United Kingdom
– English Bill of Rights
– Rule of law: citizens are protected from the arbitrary
actions of the government
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Confederation (2 of 2)
• Constitution Act, 1982
– Charter of Rights and Freedoms
– Rights of Indigenous peoples and the procedures for
amending the constitution
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Constitution and Division of Powers
(1 of 2)
• Sections 91 and 92 divide powers between federal
and provincial governments
• Each province has powers to establish rules in
those areas over which it has jurisdiction
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Constitution and Division of Powers
(2 of 2)
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Exercising Legislative Power
• Canada’s Constitution requires legislation to
proceed through first (introduction), second
(debate), and third (modifications) readings and
has status of statute
• Gains status of law after royal assent
• Federal and provincial statutes are compiled and
published
– Accessible online
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Constitution and Division of Powers
Table 2.1 Division of Legislative Powers
Federal—Section 91
Provincial—Section 92
Trade and commerce
Municipal institutions
Employment insurance
Hospitals (and health care)
Raising monies by any mode of taxation
Direct taxation within the province
Criminal law (although not its
enforcement)
Administration of justice within the
province
Banking, currency, postal service
Property and civil rights
Indians, and Lands reserved for the
Indians.
Management and sale of public
lands
Residual power under the “POGG” clause
Generally, matters of a local or
private nature
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Paramountcy
• Powers of the federal and provincial governments
can overlap considerably
– If overlap is incidental, both laws are valid and
operative
– Ex. Provincial: You can have a maximum of 4
marijuana plants. Federal: It is illegal to have 3
marijuana plants.
• Where laws truly conflict paramountcy may require
that the federal legislation be operative and the
provincial legislation no longer apply
– Ex. Provincial: You can have a maximum of 4
marijuana plants. Federal: It is illegal to have more
than 3 marijuana plants.
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Charter of Rights and Freedoms (1 of 2)
• Charter was added as Constitutional guarantee of
basic rights and freedoms in 1982
– Eliminates power to interfere with human rights except
internal limitations
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Charter of Rights and Freedoms (2 of 2)
• Limitations on Charter rights
1. Section 1: allows interference with rights and
freedoms as may be justifiable in a free and
democratic society
2. Section 33: legislatures can pass acts that infringe on
rights “notwithstanding” the Charter, but legislation
must be reviewed every 5 years (sunset clause)
3. Section 32(1): restricts operation of the Charter to
government and government-related activities
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Fundamental Freedoms
• Fundamental freedoms for everyone in Canada as
a result of the Charter:
– freedom of religion
– freedom of thought, belief, opinion and expression
– freedom of peaceful assembly and association
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Democratic Rights
• Include right to vote and to qualify to be elected
• Reasonable limitations include restrictions to
those who are underage or mentally incompetent
• Section 4 ensures there will be an election at least
every five years
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Mobility Rights
• Section 6 of the Charter ensures that Canadians
can travel and live anywhere within the geographic
limitations of Canada as well as enter and leave
the country at will
• Canadians have the right to earn a livelihood in
any part of Canada
– provincial licensing and educational requirements may
create exceptions
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Legal Rights
• Intended to protect individuals from unreasonable
interference from the government or its agent
• Section 7 states that we have the right to life,
liberty, and the security of person
• Fundamental justice: everyone is entitled to
procedural fairness and the rule of law
• Sections 8 and 9 prohibit such activities as
unreasonable search and seizure and arbitrary
imprisonment
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Equality Rights
• Section 15 prohibits discrimination in the
application of the law and a general prohibition
against discrimination
• Federal and provincial laws must be applied
equally to all
• Provides for affirmative action programs
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Language Rights
• French and English have equal status
• All federal government activities must be available
in both official languages
• Language rights and minority-language
educational rights cannot be overridden by section
33 of the Charter
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Human Rights Legislation
• Human rights acts prohibit discrimination based on
various protected grounds, including gender,
religion, ethnic origin, race, age, and disabilities
• Evolution of human rights protection
– Three decades ago discrimination based on sexual
orientation was not specifically prohibited
– Reference re Same-Sex Marriage case
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