Court of Appeal Declares Competition Act Section Inoperative

On January 16, 2003, the Quebec Court of Appeal declared s. 104.1 of the Competition Act inoperative by reason of its inconsistency with the Canadian Bill of Rights. Section 104.1 allowed the Commissioner of Competition to issue temporary orders against a dominant air carrier for alleged anti-competitive behaviour without any requirement to hear the affected party. When, in October 2000, the commissioner issued such an order against Air Canada, the company challenged the constitutional validity of this power on the grounds that it violated due process by depriving it of its right to be heard by an impartial and independent adjudicative authority.

The court accepted Air Canada’s key argument that s. 2(e) of the Bill, which requires that no person should be deprived of the right to a fair hearing in accordance with the principles of fundamental justice, protects the economic rights of a legal person. The court concluded that the functions of the commissioner were incompatible with those of an adjudicator, and he therefore lacked the independence required to issue such temporary orders. There was no compelling reason to grant this power to the commissioner rather than to an independent adjudicator, such as the Competition Tribunal. Thus, the court declared s. 104.1 inoperative by reason of its incompatibility with the Bill.

Air Canada was represented by Stikeman Elliott LLP, with a team that included Michel Décary, Q.C., and Patrick Girard (constitutional law and litigation) in Montreal, and T. Bradbrooke Smith, Q.C., Lawson Hunter and D. Jeffrey Brown (constitutional and competition law) in Ottawa. The Attorney General of Canada was represented in-house by Yves Demontigny, Jacques Savary and Carole Johnson.