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The Law and Business Administration in Canada: Fifteenth Canadian Edition

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The Law and Business Administration in Canada: Fifteenth Canadian Edition

Uploaded by

Potato
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 18

The Law and Business Administration

in Canada
Fifteenth Canadian Edition

Chapter 3
Government Regulation of
Business

Copyright © 2020 Pearson Canada Inc. 3-1


Objectives
To examine such questions as:
• Who has power to regulate?
• How are specific business sectors regulated?
• How can business use courts to challenge regulators?
• What is the effect of consumer protection law?
• How does competition law affect business
arrangements?
• What are the main elements of environmental
protection law?
Copyright © 2020 Pearson Canada Inc. 3-2
Legal Framework for Business in Canada
– The Power to Regulate Business (1 of 2)
• Federal, provincial, and municipal governments
regulate business
• In some areas, both federal and provincial
governments may legislate within jurisdiction
• Over years of case law, the courts have defined the
provincial power over “property and civil rights” very
broadly, giving the provinces control over virtually all
of private law, including contracts and most business
transactions—matters that arguably could also fall in
federal jurisdiction over “trade and commerce.”

Copyright © 2020 Pearson Canada Inc. 3-3


Legal Framework for Business in Canada
– The Power to Regulate Business (2 of 2)
• the federal power over “trade and commerce” has
been interpreted more narrowly to mean trade and
commerce across borders or where the national
interest is involved in a way that is different from the
provincial concern

Copyright © 2020 Pearson Canada Inc. 3-4


Challenging Government Regulation of
Business
• Legislation and by-laws must not infringe Charter of
Rights and Freedoms (subject to s. 1 reasonably
justified limits)
• Corporations have successfully invoked the Charter
– e.g., Sunday shopping, tobacco advertising

• An infringement will only be justified if the law’s objective


addresses a pressing and substantial concern; and the
provisions are proportional to the objective (that is that
the impact of law on those subject to it is as small as
possible given the objective)

Copyright © 2020 Pearson Canada Inc. 3-5


Judicial Review
• Administrative action, including the regulation of
business activity, is subject to judicial review
• Administrative acts may be challenged on a
number of grounds
– Constitutionality
– Misuse of authority
– Procedural irregularity
– Procedural unfairness

Copyright © 2020 Pearson Canada Inc. 3-6


Competition Law
• Federal legislation to control anti-competitive
behaviour
• The Act contains provisions that deal with
– Conspiracies
– Monopolizing
– Mergers

Copyright © 2020 Pearson Canada Inc. 3-7


Criminal Conspiracies under the
Competition Act
Section 45 of the Competition Act makes it a criminal
offence to conspire, agree or arrange to:
• fix, maintain, increase or control the price of a product
or service (price fixing);
• allocate sales, territories, customers or markets for the
production or supply of the product or service (market
allocation); or
• fix, maintain, control, prevent, lessen or eliminate the
production or supply of the product or service (output
restriction)
• A criminal offence which requires intentional conduct
Copyright © 2020 Pearson Canada Inc. 3-8
Common Examples of Monopolizing
(1 of 2)

• Discriminatory pricing
– Seller knowingly discriminates between purchasers as
to price of same quantity of like goods bought at the
same time
• Predatory pricing
– Selling at unreasonably low prices with the effect of
reducing competition
• Exclusive dealing
– Condition that buyer deals only or primarily in supplier’s
products

Copyright © 2020 Pearson Canada Inc. 3-9


Common Examples of Monopolizing
(2 of 2)

• Tied selling
– To obtain one product, buyer must also deal in other
products of the supplier
• Market restrictions
– Buyer is obliged by supplier to deal only within a
prescribed area

Copyright © 2020 Pearson Canada Inc. 3 - 10


Mergers
• Competition Act allows tribunal to
– Prevent mergers
– Make other orders
• Where merger would significantly lessen
competition
• Exception for economic efficiency

Copyright © 2020 Pearson Canada Inc. 3 - 11


Consumer Protection (1 of 2)
• Large business enterprises – no equality of
bargaining power, “Take it or leave it”
• Only the manufacturer, not the retailer, can detect
and remedy defects – customers need rights
against the manufacturer
• Sealed packaging – customers cannot examine
quality until after purchase

Copyright © 2020 Pearson Canada Inc. 3 - 12


Consumer Protection (2 of 2)
• High profile advertising – raises customer
expectations and may be more influential than
retailer
• Expanded use of credit for larger items –
sophisticated terms of borrowing are difficult to
comprehend
• Expanded use of Internet contracts with detailed
terms and conditions – consumers are often
unaware of terms and/or the terms may be one-
sided
Copyright © 2020 Pearson Canada Inc. 3 - 13
Principle Types of Consumer
Legislation
Five classes of consumer protection legislation
• Regulation of misleading advertising
• Regulation of quality standards affecting things
such as labelling, safety, and performance
• Supervision of businesses that deal with the public
through licensing, bonding, and inspection

Copyright © 2020 Pearson Canada Inc. 3 - 14


Misleading Advertising
• Regulated by
– Food and Drugs Act
– Competition Act
• Prohibitions on
– Bait and switch advertising
– Misleading advertising
– Unsubstantiated performance claims
– Misleading savings claims

Copyright © 2020 Pearson Canada Inc. 3 - 15


Regulation of Labelling, Product Safety,
Performance Standards
Legislation includes
• Consumer Packaging and Labelling Act
• Textile Labelling Act
• Hazardous Products Act
• Food and Drugs Act
• Motor Vehicle Safety Act
• Sale of Goods Act

Copyright © 2020 Pearson Canada Inc. 3 - 16


Environmental Protection
• Federal and provincial governments have
concurrent jurisdiction
• The most important federal legislation is the
Canadian Environmental Protection Act
• Provinces have general environmental protection
law

Copyright © 2020 Pearson Canada Inc. 3 - 17


Environmental Impact Assessment
Review
• Legislation now requires environmental
assessments for major developments
• Public hearings
• Enforced primarily through fines and injunctions
• Criminal penalties for corporate directors/
officers personally responsible for environmental
damage

Copyright © 2020 Pearson Canada Inc. 3 - 18

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