The Federal Courts of Canada, including the Federal Court, Federal Court of Appeal, and Tax Court of Canada, occupy a unique position within the Canadian judicial system. Unlike provincial superior courts, which possess inherent jurisdiction, the Federal Courts are statutory courts. This distinction is critical to understanding the scope and limitations of Federal Courts' authority.
The Federal Courts' jurisdiction is limited to matters explicitly assigned to it by federal law. Key areas of jurisdiction include: (i) intellectual property; (ii) competition law; and (iii) tax.
This article will explore at a high-level the limits of the Federal Court's jurisdiction over these matters.
The Test for Federal Courts Jurisdiction
The Federal Court is constituted by an Act of the Parliament of Canada under section 101 of the Constitution Act, 1867.1 The jurisdiction of the Federal Court is exceptional.2 The Federal Court is "without any inherent jurisdiction such as that existing in provincial superior courts", thus "the language of the [Federal Court Act] is completely determinative of the scope of the Court's jurisdiction."3
Jurisdiction in the Federal Court cannot be presumed; rather, a conferral of jurisdiction by Parliament in the exercise of its powers under section 101 must be positively demonstrated.4
The Supreme Court of Canada has developed a three-pronged test (the ITO Test) to determine if the Federal Court has jurisdiction:5
- There must be a statutory grant of jurisdiction by the federal Parliament.
- There must be an existing body of federal law which is essential to the disposition of the case and which nourishes the statutory grant of jurisdiction.
- The law on which the case is based must be "a law of Canada" as the phrase is used in s. 101 of the Constitution Act, 1867.
The Court Carefully Considers its Jurisdiction
The Court is mindful of its jurisdiction, and particularly so in the context of third-party claims and even where judgments are sought on consent. Indeed, "third party proceedings should be treated cautiously because this Court, being of limited jurisdiction, does not have jurisdiction in respect of purely contractual matters, which is where most third party situations arise".6 This may, however, lead to a multiplicity of proceedings in different courts that all relate to a similar underlying factual matrix.7
Even where a consent judgment is sought, the Court will "satisfy itself that the judgment sought is within the jurisdiction of the Court and is one that can legally be granted."8 For example, the Court granted a consent judgment regarding an injunction sought under the Trademarks Act but in the same case refused to grant an injunction under the Canadian Environmental Protection Act due to a lack of jurisdiction under that statute.9
Intellectual Property Matters
Very frequently, the source of the Federal Court's statutory jurisdiction is found in the Federal Courts Act itself.10 However, this is not typically the case in intellectual property matters as most require looking to specific intellectual property statutes to support the Federal Court's subject matter jurisdiction.11
Canada's patent regime is wholly statutory and all aspects of Canadian patent law must be based on the statutory text of the Patent Act.12 For example, even though induced patent infringement is not explicitly mentioned in the text of the Patent Act, the statutory foundation for a claim of inducing infringement is the same as that for direct infringement, namely subsection 55(1).13 Similarly, the Canadian patent law doctrine of double patenting is not expressly set out in the statute, but is grounded in subsection 36(1), which provides that "a patent shall be granted for one invention only".14
Like patents, copyright is governed by a statutory scheme, the Copyright Act. The legislation "speaks for itself" and a proceeding "must be measured according to the terms of the statute".15
Industrial designs, a relatively infrequently used form of intellectual property regarding the aesthetic appearance of an article, are governed by the Industrial Design Act and Industrial Design Regulations. Any Federal Court proceeding regarding industrial designs must therefore be grounded in this legislation. For example, the Federal Court has dismissed a case seeking a declaration of non-infringement of an industrial design because such relief was not found in the legislative scheme.16
Competition Law Matters
Many competition law matters are heard directly by the Competition Tribunal of Canada (the Tribunal). However, in certain circumstances, proceedings may be initiated in the Federal Court. For instance, the Federal Court regularly grants orders under section 11 of the Competition Act, which authorizes a judge to order compulsory attendance for examination or production of relevant information by a wide scope of persons upon the Commissioner of Competition's (the Commissioner) ex parte application. The Commissioner may bring such an application where a formal inquiry under section 10 is underway to investigate inpiduals suspected of contravening the Competition Act or the state of competition in a market or industry and "a person has or is likely to have information that is relevant to the inquiry."17
Recent appellant jurisprudence reaffirms the breadth of the Commissioner's investigatory powers and the judiciary's gatekeeping function in protecting Charter18rights at the authorization stage of a section 11 order. For example, reasonableness (including clarity of scope) remains central to the Court's decision of whether to authorize a section 11 order.19 A section 11 order was refused in Canada v Amazon.com.ca, ULC, 2026 FCA 64 as the Commissioner sought broad "transaction data" for "billions of products" across vast product categories, which did not allow the Court to balance intrusiveness into the respondent's privacy against the state's interest to access information in pursuit of the goals of the Competition Act.20
Tax Matters
In the Income Tax Act (the ITA), Parliament has given the Minister of National Revenue (the Minister) the following powers: (1) assess, reassess, and collect tax; (2) investigate taxpayers; (3) consider cancelling interest or penalties or providing other substantive relief; and (4) administer the Minister’s policies and procedures. The Minister created the Canada Revenue Agency (the CRA) to carry out the Minister's powers and duties under the ITA and the Minister exercises discretionary powers through the CRA
Both the Federal Court and the Tax Court of Canada (Tax Court) play important roles in the adjudication of tax disputes. The companion SCC decisions in Dow Chemical Canada ULC v Canada, 2024 SCC 23 and Iris Technologies Inc v Canada, 2024 SCC 24 discuss the jurisdictional boundaries between the Tax Court and the Federal Court in tax disputes.
The Tax Court has exclusive jurisdiction to determine the correctness of a tax assessment, which involves a non-discretionary determination of a taxpayer's tax liability. This is because the assessment is the "product" of the relevant tax legislation, meaning the amount of tax assessed, and not the "process" leading to the assessment.
On the other hand, the Federal Court has exclusive jurisdiction to review discretionary decisions of the Minister, made through the CRA, except where Parliament has expressly provided otherwise. The Federal Court may not consider an application that is in essence an attack on the correctness of an assessment, even where the relief sought is strictly declaratory, although it may provide relief to taxpayers in appropriate circumstances where a discretionary decision of the Minister is unreasonable. The most common tax disputes for which the Federal Court has jurisdiction are judicial review determinations related to whether the CRA:
- exercised its discretion properly when making discretionary decisions, and
- complied with its obligations under the ITA.
Practical examples of the Federal Court judicial review process being engaged in the tax context include taxpayer challenges of: compliance orders, determinations of interest and/or penalties, and applications for unnamed persons requests. There will likely be an uptake in Federal Court judicial reviews with respect to the impending passing of Bill C-31 which gives the Minister the discretionary power to issue Notices of Non-Compliance.
Conclusion
While the Federal Court's jurisdiction is narrower in many respects than that of provincial superior courts, its expertise in specialized areas makes it an indispensable part of Canada's judicial framework. By appreciating the distinctions between statutory and inherent jurisdiction and the proper scope of the Federal Court's subject matter jurisdiction, clients can ensure that cases are brought before the appropriate forum.
Footnotes
1.744185 Ontario Inc v Canada, 2020 FCA 1 at paras 28-29.
2.R v Thomas Fuller Construction Co (1958) Limited, [1980] 1 SCR 695 at 706-707.
3.Windsor (City) v Canadian Transit Co, 2016 SCC 54 at para 33, brackets and text therein in original.
4.744185 Ontario Inc v Canada, 2020 FCA 1 at para 29; Apotex Inc v Allergan, Inc, 2016 FCA 155 at para 11; Apotex Inc v Merck & Co Inc, 2008 FC 1185 at para 59, aff’d 2009 FCA 187.
5. ITO-International Terminal Operators Ltd v Miida Electronics Inc, [1986] 1 SCR 752 at 766; 744185 Ontario Inc v Canada, 2020 FCA 1 at para 30.
6. Roger T Hughes, Federal Courts of Canada Service, 2nd ed (Toronto: LexisNexis Canada Inc., 2008) (loose-leaf updated 2019, release 43), vol 1 at 1420; R v Thomas Fuller Construction Co (1958) Ltd et al, [1980] 1 SCR 695 at 711; Badawy v Waldemar, 2016 FCA 162 at para 3; Canadian Forest Products v Canada (Attorney General), 2005 FCA 220 at paras 41, 49, 57.
7.McCain Foods Limited v JR Simplot Company, 2021 FCA 4 at para 91.
8.Galway v Minister of National Revenue, [1974] 1 FC 600 at 601.
9.Glofish LLC v Oceanview Enterprise, 2021 FC 837 at paras 14, 24.
10.744185 Ontario Inc v Canada, 2020 FCA 1 at paras 28 and 33.
11.McCain Foods Limited v JR Simplot Company, 2021 FCA 4 at paras 84, 86, 95
12.McCain Foods Limited v JR Simplot Company, 2021 FCA 4 at para 72.
13.McCain Foods Limited v JR Simplot Company, 2021 FCA 4 at para 73.
14.Whirlpool Corp v Camco Inc, 2000 SCC 67 at para 63.
15.Planit Software Ltd v Mr. Beaver Inc, 2022 FC 585 at para 29, citing Compo Co Ltd v Blue Crest Music, [1980] 1 SCR 357 at 372-373.
16.Peak Innovations Inc v Meadowland Flowers Ltd, 2009 FC 661 at paras 7, 12.
17. Competition Act RSC, 1985, c C-34, s 11, emphasis added.
18.Canadian Charter of Rights and Freedoms, Part I of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11 ["Charter"].
19.Canada (Commissioner of Competition) v. Amazon.com.ca, ULC, 2026 FCA 64 at para 43.
20.Amazon at para 57.
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.
[View Source]
