Analysis of the Rule of Law in Canada and Tesla Motors Case

This report examines the principle of the rule of law in Canada, emphasizing its importance in protecting individuals and society. It discusses the Canadian Constitution and its role in establishing the rule of law, highlighting that everyone, including government officials, must adhere to the law. The report analyzes the Tesla Motors Canada ULC v. Ontario (Ministry of Transportation) case, where the Ontario government excluded Tesla from an electric vehicle subsidy program. The court found that the government acted arbitrarily and unlawfully. The report delves into the court's reasoning, referencing the Roncarelli v. Duplessis case, and underscores the significance of judicial review in preventing arbitrary government actions and upholding the rule of law. The implications of the case on government discretion and the protection of citizen rights are also discussed.

Running head: THE RULE OF LAW AND THE TESLA MOTOR CASE IN CANADA
THE RULE OF LAW AND THE TESLA MOTOR CASE IN CANADA
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Introduction
The laws in Canada are meant to protect the individuals and the society as a
whole. The values and beliefs of the people are need to be secured in Canada. The law
of Canada is governed by the Constitution and it is based on the set of rules and
principles which are focused on the government as well as the people of the country.
The power of the government is meant to follow the constitution and the rights and
freedoms of the people in Canada is based on the Charters in the Constitution. The
Charters gives the highest focus on the people of the country and it is the responsibility
of the government to observe the rights of the people with respect to pass a law, make
any rule or policy or any daily activities in the country. This paper will discuss about the
rule of law in Canada which describes laws need to be followed by every person in the
country irrespective of their roles in society. Police officers, politicians, individuals with
rich background no one is above the law and must obey the law of the land without any
choice to disregard it. The study of the recent case law of Tesla Motors Canada ULC v.
Ontario (Ministry of Transportation), [2018] O.J. No. 4394, 2018 ONSC 5062) will be
focused and in what way the rule of law have violated will be discussed. The following
sections of the paper will delve deep into understanding the rule of law according to
Canadian Constitution, case laws related to rule of law and violations of the rule in
recent period by the government and the action of the court to establish the rule in the
county.

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Discussion
Rule of Law - The rule of law principle explains that a society must be
followed by the rule of law. Laws are meant for the people in the country. The principle
is aim to see the individuals with equality before the law of land (Krygier 2016). The rule
of law is the fundamental principle in Canada. The Constitution of Canada observes the
rule of law as the highest sense in the preamble of the Constitution through the
Constitution Act, 1982 (Gaudry & Andersen 2016). The rule of law principal has been
used by the courts in order to deliver judgements, which establish the constitutional
validity in different context. The inspiration behind the principle focused on the order and
hierarchy. The new concept of the principle emerged in the nineteenth century from that
period it has undergone through various transformation (Krygier, 2016). In Roncarelli v.
Duplessis, [1959] S.C.R. 121 (Lewans, 2017). It is to be noted here that this case came
into the picture before the Charters and the preamble. As per the facts of the case
Roncarelli was a businessman and an owner of a restaurant which had a license to
serve liquor. Roncarelli was also involved in Jehovah’s Witnesses’ which used to
distribute pamphlets towards the people. The by laws had made in towns and
municipalities that serving literature without a license was an offence. The effort behind
the by-laws were to stop the Jenovah’s Witnesses’ activities. A large number of arrests
had been made who were involved in the Jenovah’s Witnesses. Roncarelli invested
money to get the bail for the arrested people. As a result Duplessis who was the
Premier of Quebec communicated to the liquor commission to abrogate the present
license of Roncarelli and barred him to get licenses in future. Roncarelli suffered a huge
loss as the restaurant went on closing so Roncarelli took an action against Duplessis

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and claimed damages as the revocation of license was arbitrary in nature. Supreme
Court of Canada made it clear through the decision that the liquor commission is eligible
to grant and nullify a license by exercising the discretionary power but such discretion
should be justified in order to fulfill the purpose of the administration and law. In the
particular case the aim of Duplessis was to penalize, Roncarelli for the acts, which were
against the state, was not a valid reason to cancel the liquor license.
Rule of law in its modern concept created a pressure on the public law system in
Canada through the constitutional review by the courts. The constitutional reviews helps
the court to eliminate the arbitrary use of power and it ensures the constitutional rights
in the society (Tushnet, 2017). The government is responsible to meet certain duties
which are imposed by the Constitution and failure to serve those duties may result in
frustration towards public law remedies. In order to get the clear picture the example of
Manitoba Act 1870 can be taken into consideration (Voth, 2016). In Re Manitoba
Language Rights [1985] 1 S.C.R. 721 the Manitoba Act, 1870 is part of the Constitution
and as per the requirement of the Constitution all the enactments need to be written in
English as well as in French (Harrington, 2017). Instead of the said rule, it preferred to
write in English for more than 100 years. In order to decide this case court has observed
few aspects .
Firstly, Section- 133 of the Constitution Act, 1867 and Section- 23 of the
Manitoba Act, 1870 are taken into consideration to make laws both in the language of
English and French for Manitoba, Quebec and Parliament.
Secondly, The Manitoba laws which were not printed in English and French were
disabled according to Section-23 of the Manitoba Act, 1870.

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The Court decided the Constitution Act, 1867 and the Manitoba Act, 1870
needed both the languages to be in written. The laws which were not in both languages
were considered as incapable to enforce in the country but the court made the laws
temporarily valid until the translation work made. The purpose behind this decision was
to eradicate the emptiness in the existing legal system and to maintain the rule of law in
the country.
In recent circumstances, the rule of law have been violated by the acts of the
government by acting out of the limit or it acted beyond the constitutional validity. The
case of Tesla Motors Canada ULC v. Ontario (Ministry of Transportation), [2018] O.J.
No. 4394, 2018 ONSC 5062 has an important impact on the Country for establishment
of rule of law in the country (Cano et al, 2018).
Facts of Tesla Motors Case
The Progressive Conservative government in Ontario in the month of July has
announced that the Electric and Hydrogen Vehicle Incentive Program concluded. The
incentive program offered rebates on the buy of electric cars (Matthews et al, 2017). A
two months extension given by the Ontario government on the basis of two factors,
firstly if the vehicle has registered and delivered to the customer before 11th July or the
dealer on behalf of the customer ordered it before the date and delivered to a customer
and registered by 10th September. The government excluded Tesla from taking the
advantage by mentioning that Tesla was a manufacturer of cars and it is not a franchise
like Toyota and other companies. Tesla after getting this news wanted to deal with the
government as the rebates were cancelled but the transportation sector never paid an
ear to Tesla. Tesla claimed for judicial review against the government by stating that it

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was using the power arbitrarily against the company and there was no basis to exempt
Tesla from getting the rebates in the extended period of 2 months. The customers for
the car of Tesla were hopeful to get rebates but the announcement by the government
faded the scene.
Judgement by The Court
The Division Court observed the judicial review was very much needed in the
case (Kallioinen et al, 2019). Justice Myers looked into the case and observed that the
right to get rebates for purchasing a car was not at all a right of the citizen and the
government had the power to withdraw such subsidy. Government were not exempted
from the judicial review of the court. Policy decisions are taken by the government. The
executive policies are mainly related to two types of policies and that are high level
policies and low level executive policies. The high level of executive policies are those
policies which does not come under the judicial review for example policy related to war
and low level executive policies are such policies which relates to the legitimate right of
people for example issuing a passport. Executive policies which determines the right of
the people comes under the judicial review of the court in order to check the policy is
effecting to the people in an adverse way or not. In this case the act which came into
the role is The Public Transport and Highway Improvement Act (Ubbels et al, 2017).
The provision which came for the issue is Section- 118 (2) of the act which talks about
on or after January 1, 1997 the grant of loan and financial assistance need to be
provided by the legislature to any person and the discretion of such decision lied on the
Minister depends on the importance to that matter. The subject of providing subsidy
towards the car was according to Section- 118 (2) of The Public Transport and Highway

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Improvement Act or not checked by the court. Court in this particular case observed that
the question related to subsidy was not the look out in this case and it was considered
as the high policy of the government and the main question was the act of government
by singled out Tesla from the other franchised car companies. Justice Myers in this
case took the example of Canadian Administrative case law of Roncarelli v. Duplessis,
[1959] S.C.R. 121 in that case the liquor license of Roncarelli was cancelled as he was
an activist of Jehovah’s Witness and his activities were against the state so in order to
punish Roncarelli the Premier Duplessis acted in a wrongful way. Court observed that
the improper objective played a vital role in this case similar to Roncarelli case. In order
to act in public issues there should not be any absolute or dominant discretionary power
just for the sake of administration. The legislation has no power to act in discretion
without any express language. The act of government should not be in arbitrary manner
without any proper cause. The discretion power must be exercise in good faith for the
betterment of people at large. The statues are made to operate in a particular way if it
differs or change the track then it will be considered as the an offence which can be
similar to fraud. Discretion based on status of the individual, which can relates to colour,
race and gender will not be tolerated.
The Tesla case showed the scenario where the public authorities forgot to act in
the statutory limit and crossed the line to act properly to meet the administrative policy.
The acting Manager of Policy and Programs at the Ministry of Transportation
examined in the court and as per her witness, the government extended the policy to
protect the small to mid-level dealers from possible monetary harms. However the

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Manager unable to give answer to the question that car dealership were big businesses
in Ontario or not.
Justice Myers thrown away the vague statements made on behalf of the
government and declared that the discretion power used by the transport sector by
targeting Tesla Motors. Court observed that the government never targeted to secure
the small to medium sized dealers from loss but it aimed to include all the dealers
except Tesla. The discretion used by the government was not in order to affect the
betterment of the public at large. The purpose behind acting in discretion was not in
accordance to Section- 118 (2) of The Public Transport and Highway Improvement Act.
The government never asked Tesla to provide information before making the decision to
single out Tesla Motors and by such act unfair practice followed by the transportation
sector. The Superior Court of Canada in the year 2018 held a judgement in the favour of
Tesla Motors, extended the allowance to Tesla on the similar terms, and awarded a
huge amount as costs.
In the year 2019, a political scandal came into picture through SNC Lavalin an
engineering company based in Quebec (Newark, 2019). The main issue was the
political influence by the prime minister of Canada Justin Trudeau on the judicial system
in order to save SNC Lavalin. The Ethics Commissioner Mario Dion found that the
Prime Minister and the Prime Minister’s Office created undue pressure on the then
Minister of Justice and Attorney General Jody Wilson Rebound to influence the criminal
proceedings where SNC Lavalin was accused. Lavalin was alleged guilty for providing
bribes to the foreign officials in Libya to get contracts from the government. The act of
the company was an offence under the Corruption of Foreign Public Officials Act and if

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the allegations proved then SMC Lavalin will not be allowed for contracts so in order to
get rid from the problem the company influenced the political departments at the fullest.
The Ethics commissioner took the responsibility to look into the matter. The house of
Common Justice Committee dealt with the matter. Ethics Commissioner scrutinized the
matter for a period of six months and published a report showing that Prime Minister
Trudeau was responsible under Section- 9 of the federal Conflict of Interest Act through
creating pressure on the then Attorney General. The commissioner observed that the
Attorney General was not allowed to interfere with Livalin case proceedings but the
pressure created by the Prime Minister by exceeding the limits of the statues. The
Prime Minister after publication of the report took the liability of his actions and the
opposite leader claimed for further investigation. This incident recalled the memory of
Tesla Case where the government override their powers to deal with the country.
Conclusion
Therefore from the above discussion it can be concluded that the rule of law in
Canada must not be violated by the court. The recent case of Teshla Motors can be
considered as a judgement where the court has observed that the policy of the
government must be in a nature to meet the individuals at large. The act of the state
must not aimed at to punish or secure a particular person or entity. The court is always
look into secure the rule of law. The Canadian Constitution through the Charters made it
clear with the rights of the people and even before the Charters came into existence the
law of land insured that discretion by the public authorities in order to target an
individual is arbitrary in nature as established in Roncarelli v. Duplessis. The Tesla
Motors case was able to deliver a fair judgement but Justice Myers unable to recognize

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the reason that why the transport department behaved in such a way with Tesla Motors.
The scandal of Lavalin also followed the trend of Tesla Motors and the public authorities
once again jumped into the circumstances where the benefit of particular person has
observed. Lastly it can be said that the government are meant to obey the law and
implement the law for the society but before acting arbitrarily must remember that rule of
law never allows a politician to go above the law of land on the whims and fancies.

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