Regulatory Law – Law is Cool The law school blog and podcast from Canada Wed, 30 Sep 2015 13:10:01 +0000 en-US hourly 1 1338880 The law of telephone numbers Sun, 31 Jul 2011 18:45:19 +0000 A few days ago, I was shopping around for a good fax service. Besides receiving faxes by email and a few other musts, I needed a stable fax number. Who can afford to lose a number after spending thousands on advertising? There is goodwill in your number. Sometimes it is catchy and easy to remember. And many people still call businesses, so losing your listed number means losing clients or customers. For a lawyer, it can also mean not receiving a document, which was properly served at the lawyer’s listed fax. The bottom line is your phone or fax number can be precious. But is it really yours? The answer is no if “yours” means private property. But you can still rest assured that your number will point at your business unless you cancel your service.

The Telecommunications Act, a federal statute, empowers Canadian Radio-television Telecommunications Commission (CRTC) to regulate telephone numbering in Canada. So at least the local telephone company doesn’t own phone numbers. CRTC regulates the Canadian portion of the North American Numbering Plan, which includes Canada, the US, and many Carribbean countries. That’s why the country code for all these countries is the same: +1.

One of the basic CRTC rules local telephone companies must follow is uninterrupted service. It means if you pay for your basic phone line, your telephone company cannot cut you off. The important concept here is this: if Bell or Rogers could change your number at will, it would amount to interrupting your service because uninterrupted telephone service means that people can reach you at your number, not just that you can dial out. If your number suddenly changed, you’d lose half of your telephone service: all the people who had your number wouldn’t get through to you.

This is important because that’s how the law keeps your number yours right now. Telephone companies must provide uninterrupted service, and that obviously means a permanent phone number. Telephone service wouldn’t make sense if your number randomly changed.

It’s important to know this because if you interrupt your own service by not paying your bill for example or by closing your account, the uninterrupted service rule does not bind the phone company anymore. Since you cancelled the service, the phone company can give your number to someone else. That’s why when you want to move your number to another provider, they will always tell you to stay with the old one until the move is complete. If you cancel too early, you can lose your number.

Your number stays yours due to the uninterrupted service rule. This is not really ownership. It’s more like rent, since as long as you pay your basic phone bill, the telephone company must connect your number.

It make sense to have a telephone number registry linking numbers to specific people or organizations as long as they pay for the registration. This is exactly how Internet domain names work. It doesn’t matter who connects you to the Internet or who hosts your website: as long as you pay Godaddy or some other registrar a small annual fee, your domain is safe. And it’s not like telephones are going out of fashion. The demand for numbers is so explosive, we are getting a third area code in Toronto. It’s time to give us more control over our telephone numbers.

Pulat Yunusov is a Toronto litigation lawyer.


(Post sponsored by AdviceScene)


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Federal Securities Regulation: The Saga Continues Mon, 18 Apr 2011 17:34:39 +0000 The concept of Federal Securities Regulation in Canada is perennial. It keeps on coming back, most recently via a reference to the Supreme Court of Canada. Pundits will talk, industry insiders will cross their fingers and hope for a favourable ruling, yet I doubt very much the story will end here.
It seems likely that securities regulation is permissible under various head of power in the Constitution. However federal regulation makes no sense if all of the provincial regulators remain in place. There is nothing to be gained gain by adding yet one more layer of regulation. The entire point of the exercise is to unify nationally so as to simplify. The real issue is whether the federal government can succeed in accomplishing this (whether through the Courts or through other channels).
Given the historical absence of federal legislation and the obvious connections with property and civil rights, it seems unlikely (in my opinion) that the SCC would declare, at the request of parliament, that suddenly all that was once provincial is now exclusively federal. This would be a massive restructuring of the federal-provincial power balance, something that the SCC would likely be very reluctant to “ordain” from the bench. Instead, the Court would likely hold that there is significant room for overlap. I wrote a research paper called “Constitutional Complexities Involved in the Implementation of a Federal Securities Regulation Regime in Canada: The View from 2009” that explores this topic in greater detail.

If this view is correct, then the real issue is political. It would be up to the Federal Government to negotiate with the provinces to ensure that regulation becomes unified and not multiplied. This would be difficult, to say the least. Arguably, with Ontario on-side the Feds could go “go it alone” and let the other provinces face the screams of protest from their local investment communities. Meanwhile, the possibility of the London Exchange buy-out adds yet another complicating factor to the politics. This might not be a “Canadian” industry for long.
My prediction: Regardless of the outcome of the reference to the SCC, this issue is far from settled.

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Take-Back Laws… Tue, 23 Nov 2010 05:36:16 +0000 Are you aware of “Take-Back Laws”?

Well, view the video below, and then you’ll understand why we need them!

Aligning Interests in Investment Industry Mon, 04 Oct 2010 19:58:44 +0000 Just a brief post in response to the presentation of Claire Hill (from U of Minnesota) at Queen’s Law today.

Ms. Hill diagnosed as a major contributor to the financial crisis the misalignment of interests – i.e. if it was in the investment advisors’ interests to do the right thing, they would do the right thing. Her presentation surrounded the development or change of society’s norms as a possible solution (from a societal perspective) to the problems in the financial industry and as a method of prevention of future crises. Achieving this would come from things like the writing of (and subscription to) professional codes of conduct, ethics training in business schools, etc.

Upon further thought, however, I am left with an uneasy feeling regarding points about the aligning of interests, while at the same time advocating more ethicality on the part of financial advisors.

If the reason people misbehave is a misalignment of interests, and we can simply fix the problem by realigning them, then who is to blame when things go wrong – individuals who make selfish choices or the state/regulators who do not create proper systems to manage and align interests?

To put it another way, we want people to stop acting in their own interests, while we are trying to make their interests the same as (or at least overlapping with) the interests of others. Ultimately, we’re trying to make it so that people can have their cake and eat it too – they can be selfish because in doing so, we’ve made it that they are necessarily taking others’ interests into account as well.

But where does ethicality factor into this?  Are we sure the main problem is misalignment, and do we want to train people to focus on aligning interests?

Wouldn’t a better approach be to remind people that interests may overlap but regardless of whether or not they do, an actor should take others’ interests into account or risk ethical or legal sanctions? to separate interests (at least in theory) and not roll them all into one line of self interest along which individuals may proceed?

I realize that it is always in your best interests to want to do what you should do, and aligning interests is one way of achieving that. But at the same time, sometimes an attitude adjustment is what is needed, and not a shift in interests alignment.

For more information about Claire Hill and her research, visit:

~ Joy

Alternative medicines need regulation: Op-Ed Sat, 24 Jul 2010 22:47:34 +0000 Federal Health Minister Leona Aglukkaq recently had the opportunity to prevent the sale of potentially dangerous health products to unwitting consumers. Canadians should ask why she let it pass by.

This June, the Harper government introduced Bill C-36 with respect to consumer product safety. When compared to legislation offered in 2008, the planned bill fails to provide much-needed regulation of Canada’s burgeoning natural health product (NHP) industry …

Read the entire July 24th commentary at the Calgary Herald.

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Copyright reform in Canada: Op-Ed Fri, 11 Jun 2010 22:02:36 +0000 Industry Minister Tony Clement knows only one way to write copyright laws for the country: heavyhandedly … Read the entire June 11th commentary at the Vancouver Sun

On grandmothers and stunt driving Fri, 19 Mar 2010 21:56:49 +0000 Sometimes a court case comes along that I simply love. Usually I love a case because it teaches me something about law, or because it is uniquely Canadian, or because it’s worth blogging about. This week’s stunt driving decision out of the Court of Appeal does all three. In R. v. Raham, Ontario’s highest court taught us how badly some of our laws are drafted and how lucky we are to have Francophone Canadians. There is also a reminder about a shockingly easy way to risk jail for making a left turn. I love this case.

Highway 7 between Ottawa and Toronto and grandmothers—I don’t know if there is something about this mix that leads to major debates in penal law, but on April 29, 2008 a woman passing a truck began an important case that culminated in an Ontario Court of Appeal decision on Thursday. Ms. Raham was driving home to Oakville from the Ottawa area and speeding. Closely in front of her was a tractor trailer, also speeding. They both were speeding at about 90 km/h in an 80 km/h zone. Ms. Raham stepped on it and started passing the truck.

It must have been a long truck because she kept accelerating until a diligent police officer driving behind her clocked Ms. Raham at 131 km/h (51 km over the limit). She did slow down after passing the tractor trailer—to 110 km/h. It was probably then that the officer pulled a surprised Ms. Raham over and charged her with “driv[ing] a motor vehicle on a highway while performing a stunt, to wit:  driving at a rate of speed that was 50 kilometres per hour or more over the posted speed limit.” And that’s how a grandma was charged with stunt driving—a provincial offence punishable by a fine between $2000 and $10,000 or by up to six months of jail, or both. I am not even talking about licence suspension.

Ms. Raham’s lawyer, assuming she had one, didn’t like this charge. In Canada, if a penal law allows for jail time, it must contemplate the state of mind of the accused. There are two options: either the prosecutor must prove that the accused knew or should have known he/she was committing the prohibited act (full mens rea offences), or the accused should be able to raise the defence of due diligence (strict liability offences). This defence means you did everything you were supposed to do but the prohibited act still took place. In both cases the state of mind of the accused matters for conviction or acquittal. Our constitution always requires this when you are accused of something that can get you in jail. No jail without fault.

For some offences fault is not required. You can never go to jail for those. Ordinary speeding, parking, talking on your cellphone while driving (unless you kill someone), etc. come to mind. It doesn’t matter if you knew you were parking in the fire lane or if your speedometer was broken when you went 10 km/h over the limit. The law will punish you regardless of your fault. These offences are called absolute liability offences. Because punishments are relatively light, offences are frequent, and the threat to public safety is serious, the law wants quick justice without delving into your moral blameworthiness.

So Ms. Raham or her lawyer thought the stunt driving law allowed jail for an absolute liability offence. On their reading of the law, all you needed to do to commit the offence of stunt driving was to go 50 km/h over the limit. The law didn’t say anything about the mental state of the accused or if the fault was relevant to conviction. But it did threaten jail. Regular speeding offences are absolute liability offences. And the act they prohibit is identical to the stunt driving offence. The cop who pulled Ms. Raham even had a choice between a regular going-50-over-the-limit charge or a stunt driving charge. I guess the cop wasn’t in a forgiving mood that day.

The Justice of the Peace who tried Ms. Raham threw the constitutional argument out of the window and convicted the grandmother. She appealed to the Ontario Court of Justice, which acquitted her and declared the Ontario stunt driving law unconstitutional. It is from that decision that the government appealed to the highest court of Ontario. On Thursday, the Court of Appeal said the stunt driving law was constitutional.

The lower court’s theory that the Court of Appeal rejected was simple. Even, if stunt driving was a strict liability offence, its nature gutted any due diligence defence. The judge couldn’t wrap his head around how anyone could prove they did everything they should have done to avoid going 50 over if they were obviously speeding. He said you can’t prove you didn’t know you were speeding if you were going at least 50 over. And if you certainly knew you were speeding, how could you prove you did everything you were supposed to do to avoid going over 50? So your defence of due diligence would always fail making the offence effectively an absolute liability offence.

The Court of Appeal disagreed. Justice Doherty wrote that “[t]he defendant must show he took reasonable steps to avoid committing the offence charged, not that he or she was acting lawfully in a broader sense.” Even if you are going 49 over, but try really hard not to go 2 km/h faster, you will not be convicted of stunt driving if you do go over despite your reasonable efforts. Well, good luck with that in court, if you are accused of stunt driving. But you get the idea.

Of course, the legislature could have spared the courts so much legal wrangling if they drafted their laws better. We wouldn’t even be talking here if the Ontario Parliament expressly included the due diligence defence in the law. But they went far beyond just forgetting the defence. Here is the wording of the statute: “No person shall drive a motor vehicle on a highway in a race or contest, while performing a stunt or on a bet or wager.”

A big part of the appellate decision is figuring out if these words mean two offences: a stunt or a bet, both in a race on a highway, or if they mean three offences: a race, a stunt, or a bet, all while driving. In the first case, the stunt offence would include elements of the race offence that contemplates the state of mind (no constitutional issue). In the second case, the stunt offence is stand-alone and figuring out the state of mind component is up to the courts (a constitutional issue).

The Court of Appeal preferred the second interpretation. And one of the decisive factors in its decision was the French version of the law, which was pretty straightforward unlike the English version. There you go: thankfully we have French-speaking Canadians and a constitutional requirement of bilingual laws. If one version of the law looks like it was drafted by a serpent from the tree of knowledge, we always have the other version for backup.

And the final lesson of this case is that you can go to jail for dashing in front of the waiting traffic in the opposing lane to make a left turn when the light switches to green. Seriously, check s. 172 of the Highway Traffic Act and s. 3, item 8-iv of Ontario Regulation 455/07.

Pulat Yunusov

(Post sponsored by AdviceScene)

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The UK Extents Tax Amnesty Wed, 09 Dec 2009 16:29:47 +0000 chaseFirst posted on Commercial Law International December 7, 2009. In a very surprising move HM Revenue & Customs (HMRC) has extended it tax amnesty program – the New Disclosure Opportunity (NDO). The NDO was set to expire on November 30 of this year but has been extended to January 4 of next. Under the program tax payers with undisclosed offshore accounts nestled away in any number of one or more tax havens are given a chance to come clean with UK taxman. The tax payer would pay a relatively small penalty – 10% as compared to a 100% penalty – on any back taxes owed but would also avoid the risk of prosecution. All in all the NDO doesn’t sound like a bad deal or is it? As good a deal as the NDO sounds, it seems that it hasn’t had as many takers as the HMRC would like. This lack of uptake helps to explain the unexpected extension. The NDO after all was designed as a very enticing carrot by HMRC in hopes of boosting its falling tax revenues by allowing tax evaders to avoid the very large stick of a 100% penalty and or prosecution. There are two possible explanations for this lack of uptake. The first and least likely is that there are very little, if any, taxpayers out there holding undisclosed offshore accounts. The second and more likely explanation is that taxpayers a hedging their bets, say to the taxman: catch me if you can. Taxpayers know, even amongst the accounts already disclosed, that it is a very time consuming and more importantly expensive venture to trace funds in offshore accounts.

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Immigration and foreign credentials Mon, 30 Nov 2009 21:13:12 +0000 The federal government announced a plan to help immigrants get their foreign credentials recognized. At the heart of this plan is a deal between Ottawa and the provinces to speed up professional licensing applications filed by foreign-trained immigrants. Of course, the new rules will not force private employers to recognize foreign education or work experience, and even provincial licensing bodies will be free to deny any recognition. All the deal seems to promise is reduce wait times for processing of foreign credentials.

Under the Canadian constitution, immigration is mostly Ottawa’s prerogative, and regulation of professions is up to the provinces. So if you want to move to Canada from India, you have to apply to Citizenship and Immigration Canada. But if, on arrival, you want to work as an architect in Toronto, you have to apply for a license to a provincially-appointed body—the Ontario Association of Architects. In Canada, provinces are sovereign and independent from the federal government within their constitutionally set area of control. That’s why Ottawa cannot order provinces to recognize foreign credentials. And provinces cannot order Ottawa what immigrants to accept. A lack of coordination between the federal and provincial governments can leave immigrant doctors, nurses, or engineers driving cabs in Canadian cities. The latest deal is supposed to address this problem.

But this deal has limitations. Apparently, it covers only admission to regulated professions: architecture, nursing, engineering, etc. It does not guarantee admission to foreign-trained workers. Its purpose is to speed up processing of foreign credentials to see if they meet Canadian standards. Another limitation is that foreign doctors will not qualify for this program for up to three more years. And even if their credentials are recognized, foreign-trained doctors will still need to find internships, which are in short supply. The program doesn’t cover foreign-trained lawyers at all, although they can qualify for a separate arduous accreditation mechanism at least in Ontario.

Any news of fewer professional roadblocks is good news for immigrants. And the public interest certainly requires protection of Canadian standards of professional practice. But the announced program is a narrow step aimed at relatively few new arrivals. It will hardly help hundreds of thousands whose resumes end up in the shredder because of no “Canadian experience” or because their names don’t sound right. That kind of help requires not a government decree but a culture shift.


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Federal Securities Regulation Fri, 06 Nov 2009 01:30:58 +0000 On Oct 22 an anonymous Law is Cool contributor posted a comment about the Federal Government’s intention to submit a reference to the SCC about whether a federal securities regulator is intra vires the Constitution.   As expected, Quebec is going to resist any efforts by the federal government to regulate that which has traditionally been regulated by provinces, according to the Globe and Mail.  However, there are a number of issues which always get glossed over when the matter is discussed.  For example, the SEC is always cited as an example of a federal securities body.  Somehow Canada is behind the times because we are not like the U.S. in this respect.  However the SEC shares jurisdiction with State regulators, and I doubt that the Canadian government wishes to duplicate this model.  The implicit intention of creating a federal regulator is that it be a single national regulator rather than one more regulator in addition to all of the provincial & territorial regulators.

This raises the sticky point about covering the field.  It is one thing to ask the SCC if the federal government has the authority to regulate securities (and this is an empty exercise — few legal scholars doubt that the federal government can do so).  It is another thing to ask the SCC to hand ALL authority to regulate everything associated with securities over to the federal government.  This would be an enormous restructuring of the balance between national concerns and property & civil rights.   There are political ramifications to such a ruling and no doubt the Court would prefer that such an invasive move be made through negotiations between governments rather than via a reference to the SCC.

It should be noted that securities regulation in Canada grew up under a provincial head of power.  As a result, it is written in the language of property and civil rights.   I have no idea if this is significant with respect to “federalizing” the laws, but I wonder.  If the SCC decides that some securities transactions are federal and some are not, then the language of the laws could become significant.  A ground-up rethinking and rewording might be in order.

The take-home point:  The transition to a single Federal securities regulator seems quite simple at first blush, but it is not.