March 22, 2020

Lawyer Shea Coulson (Partner, McMillan LLP) outlines what emergency legislation does, what is an ‘essential service’ in Canada, and if your business is essential. Shared with permission from McMillan LLP.

March 21, COVID-19 Update: Emergency Declarations and Essential Services

Today’s daily addresses by Prime Minister Trudeau and President Trump did not include any significant changes from yesterday. While the Prime Minister made it clear that all options remain on the table, he did not yet feel it necessary at this time to invoke emergency legislation.

In today’s update, we will unpack what emergency legislation does, but first, let’s clear up some of the confusion around “essential services” designation.

What is an “essential service” in Canada?

In Canada, the common definition of “essential services” is in reference to whether or not an employee has the ability to strike. This definition, however, provides no real guidance as to what will be considered essential during a state of emergency.

There is no Canada-wide definition of what is essential during an emergency. In the event of a lock-down, every province and territory will likely develop their own list of essential services that will be permitted to continue operating. The federal government may also develop one for federally regulated businesses and act as a coordinator and facilitator for the provinces and territories.

To date, only one Canadian jurisdiction has released a comprehensive order on essential services: New Brunswick.

Similarly, the United States Department of Homeland Security has also released guidance to help the United States determine what is essential.

Is Your Business Essential?

Early engagement with governments is key if your business needs to be deemed “essential.” During an emergency, the government cannot be relied upon to develop a comprehensive list on their own – input from industry stakeholders is critical.

While no Canadian jurisdiction is on lock-down yet, it is only a matter of time before such an escalation becomes necessary. Days, not weeks.

Governments have initially focused on crucial medical equipment, personal protective gear and supply chains. However, the list will change as the restrictions on activities grow tighter. Most public officials taking questions today are being pressured to act faster.

To put a finer point on it, consider the “major disaster declaration” that was approved last night for New York in order to access billions of dollars of relief funding from the U.S. Federal Emergency Management Agency (FEMA).

The declaration allows the U.S. military to be called in, and for the U.S. Army Corps of Engineers to commandeer hotels, arenas, college dorms, etc. for their purposes. All residents of New York State have been ordered to stay home unless they are essential and the FAA just shut down all airports in the metro New York City area. New York is also preparing a plan to ration its ventilators and prioritize those with a higher likelihood of survival. A week ago, we were still talking about cruise ships.

Declaration of a State of Emergency

By now, every Canadian province has declared a state of emergency. The federal government has not, but we believe that it will do so once the House of Commons returns early this week.

There is one very simple reason: the Emergencies Act requires that the declaration of an emergency pass in the House and the Senate within 7 days of it being issued. It makes sense to wait until the House has reconvened in order to ensure it isn’t revoked by running out of time for approvals. When the government does introduce the legislation, they will likely ask Opposition Leaders for unanimous consent.

Once declaring a Public Welfare Emergency, Cabinet will have the authority to order such things as:

  • travel restrictions;
  • evacuations;
  • requisition, use or disposition of property;
  • provision of essential services;
  • distribution of essential goods, services and resources;
  • emergency payments;
  • establishment of shelters and hospitals;
  • repair, replacement or restoration of damage;
  • actions to address environmental damage; or
  • imposition of fines or imprisonment for violating any such order.

Another reason why the federal government has not yet declared an emergency is that, so far, Canadians and businesses have been largely compliant. They have been able to work with businesses to get what they need without having to order it. For example, the large Canadian banks have all agreed to suspend mortgage payments without an order from government. Similarly, Canadian airlines are working with the government to evacuate Canadians from abroad, also without an order.

But very soon, the government will need to exercise greater powers in order to be expedient. For example, if a medical supply manufacturer has contracts to produce goods for other countries and the Government of Canada wants them to prioritize production for Canadian hospitals first, it would be very helpful for that company to be able to claim force majeure courtesy of an act of government.

This came up today in Ontario Premier Doug Ford’s press conference where he referenced an American medical supplier that he personally called to request an order for Ontario and was told the company would be serving the American demands first before shipping any product to Canada.

What’s Open and What’s Closed?

While each province issues its own orders for closures, most Canadian jurisdictions have now closed restaurants, bars, schools, and day cares; and have banned gatherings of 50 people or more. Some cities, like Ottawa, have banned gatherings of any size.

Today, B.C.’s Chief Medical Officer of Health recommended the closure of salons, barbershops and tattoo parlours. The only provinces to close liquor stores are P.E.I. and Newfoundland and Labrador (online services remain available).

ABLE BC thanks Shea Coulson and McMillan LLP for their urgent support and information in our industry’s time of crisis.

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