Desperate Financial Times Call for Desperate Legal Measures for Shut-down Retailers

  • January 18, 2021
  • Daron L. Earthy, City of Mississauga

One of the more surprising lines from Justice Perell’s wonderfully colourful decision in Canadian Appliance Source LP v. Ontario is the statement that the applicant appliance store “does not challenge… the governmental policies that underlie” the staged COVID-19 lockdown regulations. On the contrary, the Applicant’s oral argument represented the giving of a Superior Court soapbox to the chorus of complaints that echoed on Twitter and talk radio following the institution of the “Grey-Lockdown” restrictions in Toronto and Peel beginning on November 23. In urging the Court to declare that an appliance showroom catering mainly to homeowners was a “hardware store” under the regulations, the Applicant bleated that it was just as safe as a big box hardware store, and that it should be permitted to open for in-person sales; after all, they claimed, home appliances are essential to the operation of a household, and the purpose of the lockdown regulations was to permit essential services to remain open. A similar argument was made by Hudson’s Bay Company, although HBC’s legal tactic was to challenge the vires of the lockdown regulation in relation to the enabling legislation upon Judicial Review.

It is no surprise that Ontario did not open up its senior policy advisors to cross-examination on the public health evidence (or lack thereof) supporting the distinctions made in the lockdown regulations. But the fact that Justice Myers, in declining to issue an interim injunction in advance of the hearing by Perell J., suggested that government may wish to adduce such evidence on the application on its merits speaks to the Court’s recognition of how the government’s lack of transparency in its COVID response has created a crisis in public confidence in that response. The Divisional Court bluntly stated, “We agree with HBC to this extent: one effect of [the regulation] seems to result in permitting behaviour that is inconsistent with the broader policy goal of reducing community transmission in lockdown zones while permitting the in-store sale of essential items.”

Even Premier Doug Ford admitted that allowing the Costcos, Home Depots and Walmarts to remain open for unrestricted in-person shopping while independent and large retailers who do not offer groceries or “hardware” for sale were limited to curbside and online shopping was “unfair.” Ford’s defence of the distinctions as having come from “the health team” rang hollow given his comments coincided with the Auditor General’s scathing report which concluded that public health expertise did not play a leading role in the government’s COVID response. That Premier Ford was convinced by Walmart Canada’s CEO that it was a “logistical nightmare” to restrict big box retailers’ sales to the essential goods for which the closure exemption was made certainly confirmed the public’s worst suspicions about the bona fides of the shutdown rules.

Both applications were dismissed following the application of well-established legal principles. A “hardware store,” absent any legislated definition, is just that which common experience would recognize as a hardware store, and “if you asked a child to go to a hardware store, he or she would not go to a [Canadian Appliance Source] store.” A regulation is only ultra vires if it is egregiously inconsistent with the broad purpose of the enabling statute, not simply if it is unwise, ineffective or unfair. These outcomes are no doubt reassuring to the municipal counsel who have been applying legal common sense, in the absence of better guidance, as they advise enforcement officers on how to interpret the ever-changing regulations.

I suppose I cannot fault the litigation gamesmanship of taking a run at the rules that seem so internally inconsistent with the public health purposes that they threaten the presumption of validity and good faith on the part of the legislature. Unfortunately, this publicity-generating litigation aimed at expanding the exemptions from the retail shutdown has quickly become moot with the post-Boxing Day expansion of the lockdown, and to me, seems increasingly foolhardy as Ontario residents suffer through the worst yet period of the pandemic. One can only hope that the sacrifices made to attempt to bring down the R0 are not for naught.

About the author

Daron is the Deputy City Solicitor, Litigation at the City of Mississauga. Her comments in this article reflect her own opinions only.

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