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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

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    Potato
    413 views18 pages

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    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    413 views18 pages

    The Law and Business Administration in Canada: Fifteenth Canadian Edition

    Uploaded by

    Potato

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 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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