Friday News Finds – November 6, 2020

By Bryan Yau

We have made it through another week, which means that it is time for another installment of Friday Finds! This week, we will be discussing the release of the Ontario budget, the federal privacy commissioner’s report on Cadillac Fairview, a settlement following the Supreme Court of Canada’s decision in Nevsun, and potential implications of the US election on Canadian business.

On Thursday, the government of Ontario released its 2020 budget. The budget had originally been scheduled for release in mid-March but was delayed due to the COVID-19 pandemic. The updated budget mostly focuses on public health and safety amid a second wave of COVID-19 cases, reflecting the reality that until there’s a COVID-19 vaccine, the province will need to adjust for case count peaks and valleys which will undoubtedly impact the provincial economy. As expected, the budget includes a number of programs aimed at supporting the industries severely impacted by lockdowns and changing consumer attitudes. This includes subsidizing commercial and industrial hydro bills, helping businesses purchase PPE, and lowering business taxes. The budget also signals legislative changes to the Main Street Recovery Act to permanently allow 24/7 deliveries from retailers and restaurants, increase fines against illegal transportation operators, and permanently allow alcohol sales as part of take-out and delivery services. The Ontario government has also modified regional service restrictions to support restaurants and gyms, but this still may not be enough. Many small businesses have already closed, and multiple restaurant industry groups have mentioned that they cannot stay open due to continued restrictions on indoor dining. Given the prolonged outlook for vaccine development, recent measures have been aimed at making businesses easier to operate in colder weather. So far, there have been calls from industry, governments, and opposition MPPs to support businesses in different ways. Some proposals that were not included in this budget are: COVID liability waivers for businesses making a “good faith” effort to protect workers and customers, legislation to stop insurers from raising premiums on bars and restaurants (or from denying these businesses coverage), and legislation to lower fees charged for food delivery services.

On October 28, a federal privacy commissioner report on Cadillac Fairview was released. Prepared by the Privacy Commissioner of Canada, the Information and Privacy Commissioner of Alberta, and the Information and Privacy Commissioner for British Columbia, the investigation found that Cadillac Fairview embedded cameras inside its digital information kiosks at 12 shopping malls in major Canadian cities to collect millions of images. This constituted the usage of facial recognition technology without customers’ knowledge or consent. The federal Privacy Commissioner, Daniel Therrien, said that “the lack of meaningful consent was particularly concerning given the sensitivity of biometric data, which is a unique and permanent characteristic of our body and a key to our identity.” Cadillac Fairview argued that shoppers were made aware of this activity through signs placed on shopping mall entry doors that warned cameras were used for “safety and security” (including a link to Cadillac Fairview’s privacy policy), however the privacy commissioners held that it did not meet the standard for meaningful consent. The investigation also found that sensitive biometric information generated from Cadillac Fairview’s activities were being stored in a centralized database by a third-party company. This increased the risk of cybersecurity breaches and the potential use by unauthorized third parties. These findings suggest that retailers will need greater levels of disclosure and stronger data management policies before adopting marketing and retail technologies that are becoming more common throughout the physical shopping experience. The privacy commissioners cannot levy fines or pursue any form of enforcement action as part of this investigation, but are using this report to advocate for stronger power and changes to Canadian privacy law. Even if the commissioners are unsuccessful, retailers are expected to act with respect to these findings as they face the risk of greater regulatory and public pressure to address privacy concerns.

Nevsun Resources Ltd. (Nevsun), a Canadian base-metals miner operating in Eritrea, has reached a settlement with a trio of Eritrean workers who sued the company for alleged human-rights abuses during the construction of a mine. This development comes after a Supreme Court of Canada ruling in late February which held that Nevsun could be sued in Canada for alleged infractions abroad – a landmark decision that broadened liability for all Canadian corporations with international operations. In 2014, the plaintiffs, Gize Yebeyo Araya, Kesete Tekle Fshazion and Mihretab Yemane Tekle, sued Vancouver-based Nevsun in the Supreme Court of British Columbia. Conscripted under Eritrea’s national-service program, they alleged to have been subjected to forced labour, slavery and torture during the construction of Nevsun’s Bisha copper and gold mine between 2008 and 2011. Nevsun argued that the case shouldn’t be tried in Canada because of the Act of State Doctrine, which provides that a state is bound to respect the independence of another state, and that its courts will not sit in judgment of another government’s acts or the acts of any sovereign national done within its own territory. However, the Supreme Court of Canada ruled in favour of the plaintiffs, saying that when alleged human-rights abuses are especially egregious, they can be policed internationally under customary international law, and victims of such abuses can seek legal action in Canadian courts. This ruling and settlement will have a significant impact on Canadian mining companies with large overseas operations in jurisdictions with moderate-to-high political risk. Other businesses outside the mining sector, including Canadian manufacturers, engineering and construction companies, and agriculture companies, now face the prospect of legal liability for alleged human rights abuses abroad. This case and settlement offer set a precedent for other potential plaintiffs in countries with questionable court systems. They now have a more viable option for legal resolution by potentially pursuing action through the Canadian court system. This case creates pressure for businesses to conduct human-rights due diligence for global operations, and raises the possibility of future government legislation on the matter.

On Tuesday, the US elections were held, and as of Thursday evening a winner has yet to be declared. This election has numerous ramifications on US-Canada relations and trade policy since the views and proposed policies of the candidates differ significantly. Under the Trump administration, there have been instances of implementing national security tariffs on Canadian goods, a rollback of environmental policies that impacted Canadian renewable energy companies operating in the US, and support for the TransCanada Keystone XL Pipeline project. While a Trump re-election would maintain these policies and outlooks, a result in favour of Joe Biden would have different implications. Some experts predict that a Joe Biden presidency would result in: the enactment of environmental policies hindering the development of TransCanada’s Keystone XL project, support for renewable energy initiatives, the maintenance of a WTO appeal against Canadian softwood lumber, the passing of “Made-in-America” legislation, and criticism against Canada’s proposed changes to the Broadcasting Act which impacts US tech companies. While these policies would not be implemented until January at the earliest, the election signals to Canadian businesses the types of trade laws and policies that will impact exports and cross-border operations over the next four years.

That wraps up this week’s Friday Finds! Thanks for reading and come back next week for more business law stories.