The Power of Perspectives

The Canadian Bar Association

Yves Faguy


Quebec Court of Appeal: The national securities regulator project is unconstitutional

By Yves Faguy May 10, 2017 10 May 2017

Quebec Court of Appeal: The national securities regulator project is unconstitutional


The Court of Appeal of Quebec has ruled that the plan for a new national securities regulator is unconstitutional.  The plan called for a new regulatory regime for capital markets, including a national regulator, a uniform act  that each participating province and territory would adopt, and a federal act aimed at ensuring the stability of capital markets.

The court ruled that the proposed mechanism for amending the Uniform Act violates the parliamentary sovereignty of the provinces. That's because the provinces' power to legislate in this area would require  the approval of an external body, the Council of Ministers, which is prohibited. Also problematic is the Council’s voting mechanisms for adopting regulations under the federal law, as they would essentially grant the an effective veto to the provinces over federal initiatives targeting systemic risks that could pose a serious risk to Canada's financial system.

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The Charter

Using the notwithstanding clause: Too easy?

By Yves Faguy May 9, 2017 9 May 2017

Using the notwithstanding clause: Too easy?


Every so often, one of Canada’s favourite constitutional pastimes – debating the frequently decried, sometimes beloved, section 33 of Canadian Charter of Rights and Freedoms – comes back in vogue.

Last week, Andrew Coyne argued against governments in Canada using the notwithstanding clause to override certain Charter provisions.  Though it has rarely been invoked over the last 35 years – and never by Ottawa  – his main objection is that it dilutes the rights and freedoms promised by our constitution. And he worries about repeated use becoming easier and easier with each transgression: 

Notwithstanding is not the emergency safety valve its advocates pretend, but a bottle marked “drink me”: its existence is a standing invitation to use it. Even in repose it is a silent rebuke to the Charter, for it suggests that its guarantees are not guarantees at all, but merely guidelines, contingent at all times on the mood of the government of the day.

Léonid Sirota also took on the issue, jumping off a recent Saskatchewan decision, which found that the province’s funding of non-Catholic students in Catholic schools violated religious liberty and equality guarantees.

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Criminal justice

The trial is disappearing

By Yves Faguy May 1, 2017 1 May 2017


Fair trials are under threat around the world. That’s the message of a recent report by Fair Trials, an international human rights organization that advocates for fair trial rights, and global law firm Freshfields. The reason is an increase in plea bargaining deals, and trial waiver systems, which are removing procedural protections for many accused, a phenomenon the international community has failed to address:

Trial waiver systems – defined for the purpose of this report as creating “a process not prohibited by law under which criminal defendants agree to accept guilt and/or cooperate with the investigative authority in exchange for some benefit from the state, most commonly in the form of reduced charges and/or lower sentences” – have the potential to enhance human rights protection in criminal proceedings due largely to the removal of the burdens which full trial procedures impose on criminal justice systems. Trial waiver systems can provide a solution to endemic case backlogs that contribute to excessive pre-trial detention, by reducing the time and resources necessary to adjudicate cases. These systems can also be employed, for example, to combat corruption and complex criminal networks, to reduce prison sentences and the over-reliance on incarceration and to improve the protection of the rights of victims.

In addition to these benefits, however, human rights and rule of law concerns can also result from the decreasing incidence of full trials as the means of administering criminal justice around the world. Trial waiver systems usually substitute confessions and waivers of procedural rights in place of the procedural and evidentiary rigours of the trial, removing many of the key points at which police and prosecutorial activity is made public and scrutinised. This lowered threshold of scrutiny can exacerbate and reduce accountability for human rights abuses that occur during arrest and the pre-trial period. It can also unsettle the balance of power between actors in the criminal justice system and overly incentivise the use of criminal sanctions to address social problems, with potentially far-ranging impacts on the rule of law.

The report makes the case for the enhancement of certain safeguards such as manadatory access to a lawyer, more scrutiny of the prosecution’s case, added judicial scrutiny, and better data collection to get a better record of the negotiations.

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Climate law

Trump and the Paris Climate Accord: Should I stay or should I go?

By Yves Faguy April 28, 2017 28 April 2017

Trump and the Paris Climate Accord: Should I stay or should I go?


From Bloomberg, we’re told that advisors to U.S. President Donald Trump are now at odds over whether to pull out of the Paris Climate-Change Accord or not.  If there is any consensus at all, it appears to be that the obligations imposed by the treaty are hardly onerous, and mostly “process-oriented:”

But there are potential domestic legal implications of staying in the deal anyway, representatives from the White House counsel’s office told the group. There is some risk that if the U.S. stays in the agreement and doesn’t take actions to cut emissions, it could surface in legal challenges to Trump’s moves to roll back environmental regulations, they said.

The topic came up yesterday at the CBA Environmental, Energy & Resources Law Summit in Montreal. Seth Davis of the Elias Group in New York reminded the audience that the accord was never submitted to the Senate as a treaty for ratification because there is no way the Upper Chamber would have approved it. He offered three explanations why Trump has yet to carry out his promise to cancel the agreement.

The first – corroborated by the Bloomberg report – is that U.S. Secretary of State Rex Tillerson is forcefully arguing that the U.S. should keep its seat at the table. “Remember, this is someone coming from Exxon Mobil,” said Davis of the former CEO.  “He has some understanding of the art of diplomacy.” It’s also worth noting that Exxon Mobil has endorsed the pack, along with other major energy producers, such as Royal Dutch Shell. Amazingly, the head of the Environmental Protection Agency Scott Pruitt wants the U.S. to pull out.

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The trouble with ending NAFTA: No survival clause

By Yves Faguy April 27, 2017 27 April 2017


Amid the posturing and talk of issuing an executive order to pull the U.S. out of NAFTA – but not just yet Carlos Alvarado reminds us of one major reason for the Trump administration to tread carefully.  NAFTA has no survival clause, which is problematic for existing foreign investors seeking protection through international arbitration:

The U.S. is the biggest investor in Latin America and the Caribbean, with total Foreign Direct Investment (“FDI”) of US $404 billion in 2014 (compared to only US $60 billion of investment from Canada), and Mexico is one of the biggest recipients of such investment. From 1999 to early 2016, Mexico received a total of US $436 billion of FDI and almost US $200 billion (45%) of such FDI inflows came from the U.S.


Unluckily for NAFTA investors, NAFTA is one of the 3% of investment treaties that do not contain a survival clause. Chapter Eleven’s effects would not be extended after the termination or withdrawal of the treaty. Therefore, six months after serving notice of withdrawal on Canada and Mexico, the U.S. would no longer be part of NAFTA and U.S. FDI in Mexico would no longer be protected under Chapter Eleven.

As soon as any U.S. withdrawal from NAFTA became effective, all the U.S. existing investments in Mexico (around US $200 billion), together with all new FDI inflows coming from the U.S. to Mexico, would no longer enjoy the substantive protections granted by NAFTA (e.g. national treatment, most favoured nation treatment, minimum standard of treatment, fair and equitable treatment, full protection and security, non-discriminatory treatment, no expropriation without compensation). Moreover, U.S. investors would no longer have access to investment treaty arbitration and the international approach therein used against Mexico. In the event of any violation by the host State of applicable Mexican legislation, the affected investor would be obliged to litigate and seek relief from the Mexican courts.


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