One of the central issues in Marcotte concerned the
applicability of certain provisions of the Quebec Consumer
Protection Act (CPA) to bank-issued credit cards. In
particular, do sections 12 and 272 of the CPA – which deal
with the disclosure of charges requirement and the remedies for
breach of this requirement – apply to conversion charges
imposed by banks on credit card purchases made in foreign
SUPREME COURT OF CANADA DECISION
In dismissing the appeal from the Québec Court of Appeal,
the Supreme Court rejected the appellant banks' (Banks)
constitutional arguments that the CPA was either constitutionally
inapplicable to regulate bank-issued credit cards (the doctrine of
interjurisdictional immunity) or was constitutionally inoperative
in respect of banks governed by the federal Bank Act (the
doctrine of federal paramountcy).
In respect of the interjurisdictional immunity argument, the
Supreme Court stated that this doctrine operates to prevent laws
enacted by one level of government from impermissibly
"trenching" (encroaching) on the "unassailable
core" of jurisdiction reserved for the other level of
government. The Supreme Court rejected the Banks' argument that
the applicability of the relevant provisions of the CPA to banks
would impair the core of Parliament's banking power, stating
"[b]anks cannot avoid the application of all provincial
statutes that in any way touch on their operations, including
lending and currency conversion."
As for the paramountcy argument, the Supreme Court noted that
paramountcy is engaged where there is a conflict between federal
and provincial law. Conflict can be established by demonstrating
either that it is impossible to simultaneously comply with both
laws or by showing that compliance with provincial law would
frustrate the purpose of the federal law. In this case, the Court
held that the doctrine of paramountcy was not engaged. Even
assuming that the purpose of the Bank Act is to provide
for exclusive national standards, the Supreme Court held that the
notice and penalty provisions of the CPA at issue did not frustrate
or undermine that purpose.
The Supreme Court decision does not go so far as to foreclose
the paramountcy argument being raised in future cases in respect of
other provincial consumer protection provisions. The Supreme Court
noted that where a provincial requirement conflicts with a Bank
Act provision, the result may be operational conflict or an
undermining of the purpose underlying the Bank Act.
Examples given by the Supreme Court of where the paramountcy
doctrine might come into play are if a province provided for a
different grace period or a different method of interest
computation or disclosure from that provided under the Bank
Time is required to fully assess the impact of the Supreme
Court's decision on the way banks and other federally regulated
entities must conduct business across the country. Based on this
decision, however, going forward the challenge will be to identify
with certainty when compliance with provincial law by a federally
regulated entity is not required.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Please join members of the Blakes Commercial Real Estate group as they discuss five key provisions of a commercial real estate purchase agreement that are often the subject of much negotiation but are sometimes misunderstood.
Emotional culture is influenced in great part by the mindset and actions of leadership, although employees also play more of a role than they may realize in creating the culture that exists in the group.
The session will be led by Dr. Robert Brooks, an award-winning author and psychologist. In his presentation, Dr. Brooks will describe the mindset and realistic practices of leaders and staff that help to nurture and sustain a culture characterized by positive emotions, satisfying, respectful relationships, a sense of meaning and ownership for one’s work, and enhanced job performance. Examples will be offered to illustrate strategies for developing a positive emotional culture in an organization.
Join leading lawyers from the Blakes Pensions, Benefits & Executive Compensation group as they discuss recent updates and legal developments in pension and employee benefits law as well as strategies to identify and minimize common risks.
The Canadian Office of the Superintendent of Financial Institutions ("OSFI") recently ruled that a bank cannot promote comprehensive credit insurance ("CCI") within its Canadian branches under the Insurance Business (Banks and Bank Holdings Companies) Regulations (the "Regulations").
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).