Focus On
 Justin Trudeau

Ottawa poised to introduce law to extend civil timelines and punish CERB abuse

Wednesday, June 10, 2020 @ 9:10 AM | By Cristin Schmitz

Prime Minister Justin Trudeau says criminal penalties the government plans to introduce in its fourth pandemic-related bill target those who deliberately abuse the Canada Emergency Response Benefit (CERB) — not ineligible claimants who mistakenly collect the $2,000-per-month benefit.

On June 9, Trudeau also disclosed that the package of COVID-19-related legislative measures that his minority government is still negotiating with the opposition parties before introducing it in the Commons June 10 will also include changes to temporarily suspend some key time limits under federal legislation; allow other time limits to be suspended or extended where the circumstances of the pandemic may make compliance difficult or impossible; as well as extend certain other periods so that their expiration does not produce “unfair or undesirable” effects.

Prime Minister Justin Trudeau

That previously announced part of the impending bill will be watched closely by intellectual property (IP) and competition law practitioners, among other lawyers, who will want to see whether the government has modified draft measures it unveiled last month to correspond with the Canadian Bar Association’s (CBA) submissions during a 10-day government consultation in May (for more detail on the CBA’s June 1 letter to federal Justice Minister David Lametti, see below).

Trudeau said little about the time limit changes during his daily COVID-19 briefing, nor did he get into specifics about his government’s planned penalties for CERB abuse, which will reportedly include fines and jail time. “We will ... strive to make CERB payments more flexible while making sure that those who knowingly and wrongfully claim the CERB face consequences,” he said.

Trudeau stressed, however, that the government believes only “a very small minority” of CERB payouts are going to persons who deliberately make false claims.

“We always knew the choice we had to make with the CERB was minimizing the amount of paperwork and verification upfront, so that it could flow rapidly to the millions of people who needed it,” he told reporters. “We knew at the same time there would be ... good faith honest mistakes that we would need to clean up afterwards and make sure people paid back if they got both [payment through the Canada Emergency] wage subsidy and the CERB,” he explained. “There’s no harm, no foul on that — if it’s an honest mistake.”

Trudeau continued, however, “we also knew as with any system that there would be a very small minority ... of people who deliberately try to take advantage of the system, and we need to make sure we have the tools to be able to assure the integrity of the system.”

He added, “hopefully we will not have to use them very much at all because the vast majority of people are of good faith and just trying to support their families, trying to do the right things ... but we do need the tools to go after those who deliberately choose to take advantage of people and the system’s vulnerability at a time of crisis.”

Justice Minister David Lametti

With respect to the anticipated changes to the limitation periods and time lines for legal proceedings and key regulatory matters, a four-page letter June 1 from the CBA to Lametti commented on the ambit, timelines and retroactivity contained in the draft proposal the government unveiled March 19.

The association commended the government for addressing the fact that the COVID-19 fallout is hampering many people, including self-represented litigants, from complying with the still-applicable statutory filing deadlines and limitation periods and impeding lawyers and law firms from properly carrying out their duties to their clients.

The CBA commented, however, that the “vague nature” of the broad general statutory extension scheme in last month’s draft proposal from the Department of Justice “runs the risk of creating more uncertainty for litigants. Without clarity, litigants before courts and tribunals may not know which steps to take as parties.”

The bar group recommended that the impending legislation should clarify with specific language whether it is intended to apply to all regulations. Alternatively, the CBA suggested a proposed law could list the federal Acts and regulations to which it applies. “Unintentionally omitted Acts or regulations could then be identified and considered for addition,” the group suggested.

The CBA also raised a number of questions. For example, will the order-granting power (proposed in s. 7 of the draft legislation) permit the responsible cabinet minister to make blanket suspensions or extensions for all corporations subject to the Canada Not-for-profit Corporations Act, in addition to permitting them for an organization on a case-by-case basis? Moreover, will the COVID-19 time limits provisions supersede, or simply add to, other COVID-19-related initiatives? In addition, what is the interplay between the time limits contained in the impending legislation and other Acts and regulations, for which suspensions and extensions already exist? “We suggest that the government specifically identify whether the intent of the [draft] Time Limits Act is to supersede all other initiatives, or, if not, to identify how they will interact.”

The association went on to question the effect and burden of all deadlines coming due on Sept.14, 2020, as proposed in the draft legislation. “The CBA IP section suggests adopting a mechanism where time ceases to be calculated in the suspension period, as it is for certain time periods under the Federal Courts Rules.”

The IP section of the CBA said that — assuming that s. 6 in the draft legislation applies generally to federal regulations — some specific regulations pose unique concerns in the IP context, as does the timing of the limits.

“The government should specify what regulations and what time limits will be extended by amending the schedule to s. 7 with a complete list of relevant suspensions or extensions, particularly to those relating to intellectual property and proceedings in the Federal Court and Federal Court of Appeal,” the CBA advised.

The CBA’s competition law section suggested minimizing the length of any suspensions or extensions. To the extent the responsible cabinet minister is given broad discretion to extend or suspend time periods, those should: (a) be of general application (not case-specific); (b) be as short as possible; (c) not apply to the initial 45-day period that the minister has to screen investments for potential review; and (d) not apply retroactively.

The CBA’s competition law section noted that regulatory certainty is important for all stakeholders. In its view, no change should be made to the initial 45-day period that allows the minister to screen investments for potential review. “The government has repeatedly urged investors to file notifications early — to give it early warning of potentially problematic investments and to give investors and Canadian businesses increased regulatory certainty.”

The CBA’s competition law section also told Lametti that retroactive application of an extension or suspension to as early as March 13, 2020, “would be inappropriate as it would damage Canada’s reputation as a predictable, rule-of-law jurisdiction in which to invest. It would also introduce significant uncertainty for recently-consummated transactions, including those that had been intentionally structured to abide by the policy recommendation to pre-notify to ensure there will be no post-closing review.”

According to the competition bar, the potential retroactive application of any extension or suspension of current time periods “would significantly detract from the objectives of certainty and transparency underpinning the government’s guidance and advice.”

 The CBA’s IP law section also pointed out that retroactivity is only specified (via s. 7(4) of the draft legislation) to apply to extensions under  s. 7. The IP bar suggested that any legislation should expressly state if retroactivity is contemplated for timelines under s. 6 of the draft Act.

The competition law section of the CBA also argued that the COVID-19 emergency does not require granting the government additional time to carry out national security reviews under the Investment Canada Act (ICA). The minister responsible already has “a significant period” to carry out such reviews, both in total and at each stage of the review process, as well as the flexibility to adjust timelines in response to delays that may be caused by COVID-19, the competition bar said.

The CBA thus urged the government to rethink whether the amendments are necessary as they pertain to the ICA. Alternatively, if the draft legislation is passed as originally proposed, the competition bar asked that the scope of any extensions or suspensions be limited. “The ICA currently gives the government extremely broad review powers — including an initial 45-day period to screen potential investments for national security concerns,” the CBA told Lametti. “That period can be extended by the minister if additional time is required to determine if a formal national security review should be initiated. In total, the government has 200 days to conduct reviews. In the CBA Competition Law Section’s view, these time periods are more than adequate to carry out reviews, even during the COVID-19 pandemic. If the government has difficult meeting its statutory commitments, it should ensure that relevant agencies are adequately funded and not burden investors or Canadian businesses with the uncertainty associated with extended review periods.”

Photo of Justice Minister David Lametti by Roy Grogan

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