Upholding rule of law key to Canada’s economic transition

Former Supreme Court Chief Justice Beverley McLachlin says as Canada transitions its economy away from the United States, upholding the rule of law is going to be key.

“We’re finding ourselves threatened by our neighbour to the south, our economy put in a parlous state,” she told the Canadian Bar Association’s Construction and Infrastructure Law Conference recently.

In the face of tariffs and volatility at the hand of the Trump administration, Prime Minister Mark Carney has vowed to build more infrastructure and projects to make this country stronger and more independent.

“We are going to need the rule of law,” McLachlin says. 

“We have got to look at this as an asset that we have, and we've got to keep it strong. We can't let it slip the way it's slipping south of the border. We can't tolerate situations where executives tell judges what they should do or accuse them of terrible things if they don't do it. We need to have a system where court orders are enforced promptly and not let to lag. And we have all those things.”

Because Canada upholds this “great asset,” she says it is a good place to do business, noting, “I think the rule of law here is actually stronger than it is in the United States.”

That’s because we don’t have a system where a member of the executive branch of government “can simply issue a paper and cause huge things to happen,” whether that’s deporting 400,000 people one day or demolishing parts of the White House the next. 

“We don't have that kind of country,” McLachlin says. 

“Maybe we argue and bicker too much about everything. We can't even get 24 Sussex (fixed) up, and here he is tearing down East Wing… I'm just shaking my head.”

In contrast, she says Canada has a strong belief in and culture around the rule of law — how laws should be made, who should make them, and what the limits are. We also have a “totally independent,” impartial, and just judiciary. 

“Nobody was appointed for political reasons. Nobody's expected to give a certain decision because somebody appointed them."

Rule of law unravelling

In the chaotic days after the Second World War, when people were mourning millions of lives lost unnecessarily in war and through extermination, McLachlin says, “the world resolved that it wasn't good enough just to have powerful emperors and prime ministers.” 

Instead, there was a need for a structure that was based on values and law for the world. This led to the creation of the United Nations and the Universal Declaration of Human Rights, as well as international courts to resolve international disputes. Over the last 75 years, these institutions and others have been built up around the idea that the rule of law would regulate people’s conduct and determine their obligations, whether in the areas of human rights or construction law.

She says the rule of law has provided a framework of support and certainty in which construction and infrastructure have really burgeoned around the world. It has establish a sure way of doing business, helped settle the rules for the creation of complex contracts, and allowed bankers to raise capital for expensive projects due to the assurances that disputes would be dealt with fairly and court decisions would be enforced. It all combined to create a period of great prosperity.

“Now we're starting to see those institutions unravel.”

‘Those pesky judges’

The weakening of the rule of law began around 2011, when countries like Hungary shifted significantly to the right, led by a “strong dictator,” Viktor Orbán, who had little regard for human rights and denigrated the courts. 

“One of the first things that happens when the rule of law starts to erode is the courts get either put under the thumb of the ruler or their orders are ignored,” McLachlin says. 

“There are a number of ways you can get rid of those pesky judges who want to interfere with what you want to do, and that's one of the things that happened in Hungary. It also happened in Poland, but they recovered somewhat…which is good.” 

She says it’s happened in a number of countries, and now in the U.S., “definitely there are pressures on the rule of law.” 

“The courts are being pressured to decide in certain ways, or they're being stacked … Their orders aren't being promptly enforced, if they're enforced at all.”

At the same time, there’s been an erosion of soft and real power in Congress. McLachlin says, according to scholars, the president has acquired enormous powers, which he has either asserted or been granted by the courts, that previous presidents didn’t have. That includes the power to impose unilateral tariffs and to detain people under the pretext of executive orders.

These are all signs that the courts are being shifted to the side.

“It was a bit of a shock to someone like me,” she admits.

“We thought the rule of law was established, but it is no longer something we can take for granted.”

Three key pieces

McLachlin says three fundamental elements comprise the rule of law. 

The first is criteria to ensure the validity of laws. This includes having them made by the right people, ie, members of a legislature, and conforming to a jurisdiction’s constitution or established legal norms. People know what these criteria are, and they’re not easy to change, so there’s an understanding that the law is going to be stable.

“It's not going to change tomorrow, because somebody woke up at 2 a.m. and sent out a tweet,” she says. “It won't change. It's the law.”

The second fundamental element is an independent judiciary or adjudication function, free from the influence of Parliament, the legislature, and anyone else.

“If the person who makes the law can tell you how they should be applied and what they mean, you then lose that impartiality,” McLachlin says.

The third fundamental element is enforcement. There has to be a culture in a country where even if the executive branch of government doesn’t like a judicial ruling or thinks the judge got it wrong, it will still be enforced.

So what happens when the rule of law weakens?

For a while, she says things will probably go on fairly normally. But if it fails, there will come a time when construction and infrastructure will suffer.

McLachlin says there is no shortage of examples of the difficulty in getting big projects done in countries that don’t adhere to the rule of law.

“Without a stable set of laws, an independent judiciary to rule on disputes promptly and efficiently, and an executive that enforces legal rulings, even if it may not like them, projects slow down and sometimes grind to a complete halt until the dictator of the country gets around to deciding they better get going on this.”

At that point, the construction project slowly gets underway and continues until the dictator forgets about it because he's preoccupied with another problem. She says having to depend on one person’s whims is hardly an ideal way to do business.

The other thing that creeps in is big-time corruption, which can mean having to pay someone under the table to get anything done.

“So we really have to be careful,” McLachlin says. 

“We have this great asset called the rule of law, and it is important to the construction industry and the infrastructure industry, and we need to keep it strong.”