Table of Contents
A WAKE-UP CALL F OR CANADIAN JUSTICE
Daniel J. Escott
INCREASED JUDICIAL INTERVENTION TO CORRECT UNFAIRNESS AT KEY TRIBUNALS
Brian Cook
THE "BEST INTERESTS TEST" AND CULTURAL SIGNIFICANCE IN INDIGENOUS COMMUNITIES
Andrea Clarke
A WAKE-UP CALL FOR CANADIAN JUSTICE
By Daniel J. Escott
Originally published on Law360 Canada, © LexisNexis Canada Inc.
In a moment of remarkable candour before the French senate on June 10, 2025, Microsoft’s director of public and legal affairs, Anton Carniaux, delivered an admission that should send a shock wave through Canada’s justice system. “Non, je ne peux pas le garantir.” – Carniaux, when asked if he could guarantee U.S. authorities would not access French data without French approval.
With those five words, Carniaux not only confirmed the long-held fears of privacy advocates regarding data residency (the idea that storing data on servers located on Canadian soil is a sufficient shield against the extraterritorial reach of U.S. law) but also dismantled the foundational premise upon which Canada’s digital transformation has been built. This testimony is not a warning of a potential future problem; it is a clear and present confirmation of a systemic vulnerability. For a legal system whose legitimacy rests on sovereignty, procedural fairness and the rule of law, Microsoft has inadvertently made the most compelling case imaginable that our reliance on American technology partners for critical justice infrastructure must end.
The Shattered Illusion of Data Sovereignty
For years, Canadian courts, governments and legal institutions have operated under a comforting assumption. The belief was that by mandating “data residency,” requiring that sensitive information be physically hosted within Canada’s borders, we were ensuring our nation’s data sovereignty. This principle is the bedrock of our digital governance; the Government of Canada itself defines data sovereignty as “Canada’s right to control access to and disclosure of its digital information subject only to Canadian laws.”
However, the testimony from Microsoft’s representative confirms that this belief was tragically misplaced. The issue has never been about the physical location of a server rack. The true vulnerability lies with the nationality of the corporation that owns it. Under the United States’ Clarifying Lawful Overseas Use of Data Act (the CLOUD Act), the U.S. government can legally compel American-based technology companies like Microsoft, Amazon and Google to provide requested data, regardless of where in the world that data is stored.
Carniaux’s hearing laid this process bare. While Microsoft maintains it has “strong, rigid legal processes to contest unfounded” requests from the U.S. government, he ultimately confirmed that when a request is deemed legally valid under U.S. law, they are obligated to comply. In short, as one report analyzing the testimony concluded, “Microsoft will listen to the U.S. government regardless of Canada or other country’s domestic laws.” This policy strips Canada of its autonomy, allowing a foreign government to access the data of Canadians without the knowledge or permission of Canadian authorities.
The implications for our justice system are profound. As courts across the country accelerate their digital transformation, adopting cloud-based case management systems, e-filing portals and virtual hearing platforms, they are increasingly entrusting their most fundamental data to these very companies. The Department of National Defence and the Canadian Armed Forces already make significant use of a tailored “Defence 365” platform built on Microsoft’s cloud infrastructure. Is the data of our judiciary, court filings, evidence, judicial deliberations and lawyer-client communications any less critical to our national sovereignty? By continuing this reliance, we are building our 21st-century justice system on a foundation that is subject to the laws and political whims of another country.
A Foundational Threat to Procedural Fairness
This vulnerability is more than a matter of geopolitical tension; it strikes at the heart of procedural fairness, the cornerstone of our legal system. Canadian jurisprudence, from Baker to Vavilov, has consistently affirmed that the legitimacy of a legal decision depends not just on the outcome, but on the transparency and reason-giving behind it. A decision-making process that cannot be fully explained or accounted for cannot be properly contested or reviewed, undermining the very essence of due process.
How can a Canadian court guarantee procedural fairness to litigants when the data central to their case could be accessed by a foreign power without a Canadian warrant, without transparency and without any mechanism for judicial review in Canada? The answer is simple: it cannot. The HITL (“human-in-the-loop”) principle, which demands meaningful human oversight in automated decision-making, becomes meaningless if the entire “loop” is subject to covert external access. The human decision-maker, being the judge or administrative officer, loses ultimate control over the informational environment in which justice is administered.
This reality creates a direct conflict. The Canadian Judicial Council’s guidelines on AI note that explainability is paramount, akin to a judge’s duty to provide reasons. Yet, the U.S. CLOUD Act operates as a “black box,” removing the process from Canadian oversight entirely. This isn’t just a technical backdoor, it’s a legal one that circumvents the sovereignty our entire justice system is built upon.
This moment of clarity from Microsoft should serve as a powerful catalyst for change. The argument for cultivating a robust, domestic legaltech ecosystem has often been framed in economic terms or as a response to trade tensions. While those reasons remain valid, Microsoft’s admission elevates the issue to one of constitutional and judicial necessity. We must recognize, now more than ever, the urgent need for Canada to cultivate self-reliance in legal technology.
Supporting our domestic innovators is no longer just a “nice-to-have” industrial policy, it is a prerequisite for a secure and sovereign judiciary. We need to ensure that our service providers are not only based in Canada but that their solutions are built to comply with Canadian laws and regulations first and foremost. More importantly, they must be built to uphold Canadian values of transparency, fairness and access to justice.
For too long, the adoption of legal technology has been framed as a choice between the feature-rich, globalized platforms of U.S. giants and the supposedly less-developed domestic alternatives. It has been viewed through a lens of institutional efficiency rather than user-centric access to justice. We must now reframe this choice. The question is no longer “Which platform has the slickest interface?” but “Which platform guarantees that the administration of justice in Canada remains subject only to the laws of Canada?”
Microsoft’s startling admission in Paris has provided a definitive answer. Carniaux has done our legal system an unintentional favour by ending the debate. The era of unchecked data scraping and blind trust in foreign providers is over. The risk is no longer theoretical.
The path forward requires a deliberate, strategic and urgent shift. Judicial leaders, court administrators and government policymakers must treat technological procurement not as a back-office IT decision, but as a core issue of judicial governance and national sovereignty. The only way to guarantee that Canadian justice data is protected by Canadian law is to entrust it to Canadian companies. The time for deliberation is over. The time for action is now.
INCREASED JUDICIAL INTERVENTION TO CORRECT UNFAIRNESS AT KEY TRIBUNALS
By Brian Cook
Originally published on Law360 Canada, © LexisNexis Canada Inc.
Ontario’s administrative tribunals are facing increased scrutiny by the courts for unfairness in dismissing claims brought by tenants, landlords, employees, car accident victims and people who believe they have experienced discrimination or are seeking disability benefits.
Tribunals Ontario has been “laser focused” on managing backlogs at its constituent tribunals, which include the Landlord and Tenant Board (LTB), the Human Rights Tribunal of Ontario (HRTO) and the Licence Appeal Tribunal (LAT). Unfortunately, this backlog management has included legally questionable tactics to close or dismiss cases and rules that prioritize closing files over fairness to parties.
Landlord and Tenant Board
Several Landlord and Tenant Board decisions challenged at the Superior Court involved the tribunal issuing eviction orders where the tenant did not appear at the hearing, often through inadvertence, and where the circumstances suggested it was unfair to assume the tenant did not intend to oppose the landlord’s application.
In Zaltzman v. Kim, 2022 ONSC 1842, the court said, “No effort was made to reach out to the tenant or his representative at the hearing to see why they did not attend the hearing. While I appreciate that such an inquiry is not a requirement, it is prudent in the face of a situation where the tenant and his legal representative did appear on the last occasion and the matter was adjourned.”
In Shapiro v. Swingler, 2021 ONSC 6191, payment records were not admitted because they were on the tenant’s phone but not on paper. The court said: “In cases such as this one, where tenants face potential eviction and have evidence that may be responsive to the issues at the heart of the dispute at their fingertips, procedural fairness would at least require that the Board consider whether to grant a brief recess to allow the tenants to obtain paper copies of their bank record.”
The procedural unfairness in this case arises in part from the uneven treatment the parties were given. The landlord provided no documentary evidence of the late payment of rent. The landlord testified that there was persistent late payment of rent but provided no contemporaneous records showing when rent was paid. In contrast, the tenant tried to provide evidence and was denied an opportunity to do so.
Licence Appeal Tribunal
At the Licence Appeal Tribunal, the court has also intervened in the face of unfairness.
In AIG Insurance Company v. Riddell, 2025 ONSC 1979, the court took the rare step of intervening when the LAT denied an adjournment, declaring that “the impugned decision is obviously wrong and unfair.”
Acceptance of an expert report without the requested cross-examination resulted in an overturned decision in Plante v. Economical Insurance Company, 2024 ONSC 7171. The court said, “While the LAT may have its own procedural rules that allow for the most expeditious and cost-effective hearing of a dispute, those rules do not allow for an unfair process by which an expert’s opinion can become unchallenged evidence — this is doubly so where there is a prima facie inconsistency of significance exposed in the expert’s reports.”
And in Luluquisin v. Aviva Insurance Co. of Canada, 2024 ONSC 5369, the court said: “The Vice-Chair moved from an uncontested finding that a claimant did not attend an insurer medical examination to a conclusion that this was a ‘failure’ and was unreasonable. She then concluded that the unreasonable failure precludes a substantial claim. All that was without reference to the statutory scheme, without justification of the factual finding of unreasonableness, and without justification of the draconian consequence of these findings.”
Human Rights Tribunal
The Divisional Court has also overturned Human Rights Tribunal of Ontario decisions for unfairness.
In John v. Swedcan Lumican Plastics Inc., 2025 ONSC 3022, the court was sharply critical of the HRTO for initiating a summary hearing by one adjudicator that ended up dismissing the case, while another adjudicator had already started a merits hearing after turning down a request for a summary hearing. The court stated: “Most important here were the reasonable expectations of the applicant. Vice-Chair Doyle had denied the respondents’ request for a summary hearing and directed the matter to proceed to a merits hearing. That hearing was begun in 2020, and the applicant provided testimony. The case was then adjourned. In 2024, the Vice-Chair, as was his statutory prerogative, ordered a summary hearing…”
In the circumstances of this application, where the applicant had been granted a merits hearing into an issue of central importance to his working life, and that hearing had commenced, procedural fairness dictated that the merits hearing should have continued to conclusion. The decision made by Vice-Chair Doyle and procedures already undertaken up to 2020 had created legitimate expectations in the applicant that could only be satisfied by that hearing continuing to conclusion. Procedural fairness requires that an individual litigant have the right to their day in court when that day has been granted to them, even on a claim that may not succeed, and that a decision granting that right may not simply be ignored and silently overruled by another adjudicator at the same level as the adjudicator who made the original decision.
In Ramirez v. Rockwell Automation Canada Ltd., 2025 ONSC 1408, the court overturned a dismissal order: “It is clear the Tribunal inferred abandonment from the failure to respond to one e-mail. With respect, failing to respond to one e-mail, in all of the circumstances of this case, cannot possibly justify an inference that the applicant had abandoned the proceeding. … The dismissal is obviously unfair in all the circumstances.”
In Gardener v. Abell Pest Control Inc., 2023 ONSC 2026, the court commented: “The Tribunal’s reasons, including its reconsideration, did not reflect the heightened responsibility on it to appropriately address the circumstances — a printing misadventure that caused the application to be ready to be filed at 20 minutes after 5 PM — or the consequence of its decision which denied Ms. Gardener the ability to pursue her human rights complaint.”
In Konkle v. Ontario (Human Rights Tribunal), 2025 ONSC 4071, the applicant thought the federal human rights system had jurisdiction, as the claim was against the Canada Games Council. Six business days after being told by the federal commission that it had no jurisdiction, the applicant filed at the HRTO, but this was one day after the limitation period had expired. The HRTO refused to extend the time limit, ruling that the delay was not incurred in good faith. In overturning that decision, the court said, “The question the HRTO should have turned its mind to is whether the application initially being brought in the CHRC was a good faith explanation for being one day late in filing its application with the HRTO and whether the applicant moved with …”
In these circumstances, we consider it unreasonable to conclude that the delay was not incurred in good faith and set aside the decisions on that basis.
In many of the cases listed below, the courts appear to be more sensitive than tribunals to the serious consequences of unfair dismissals on claimants, who are often the most vulnerable residents of Ontario.
Selected Divisional Court Decisions Overturning Tribunal Rulings
Landlord and Tenant Board Cases
Ali v. Capreit, 2025 ONSC 103
Wright v. Lallion, 2024 ONSC 4132
Timbercreek Asset Management Inc. v. Soufi, 2024 ONSC 4041
Magnacca v. Zoppo, 2022 ONSC 5640
Social Benefits Tribunal Cases
M.I. v. Administrator, Ontario Works Region of Peel, 2024 ONSC 1975
Burnside v. Ontario (Disability Support Program), 2023 ONSC 6071
Sparks v. Director of the Ontario Disability Support Program, 2023 ONSC 5570
Licence Appeal Tribunal Cases
Derenzis et al. v. His Majesty the King et al., 2025 ONSC 2761
Hussein v. Intact Insurance Company, 2025 ONSC 842
Miceli v. TD Insurance, 2025 ONSC 496
Vivekanantham v. Certas Direct Insurance Company, 2024 ONSC 6198
Fernandez v. Commonwell Mutual Insurance, 2024 ONSC 5180
Shahin v. Intact Insurance Company, 2024 ONSC 2059
Shuttleworth v. Ontario (Safety, Licensing Appeals and Standards Tribunals), 2019 ONCA 518 (Ct. of Appeal); Mary Shuttleworth v. Licence Appeal Tribunal, 2018 ONSC 3790 (Div. Ct.)
Human Rights Tribunal Cases
Erazo v. Ontario (Ministry of Community and Social Services), 2024 ONSC 7181
Al-Hayali v. National Dental Examining Board of Canada, 2024 ONSC 6995
Zu v. The Corporation of the City of Hamilton, 2021 ONSC 8278
Superior Court of Justice and Court of Appeal Cases
Clayton (Re), 2025 ONCA 308
Hastick v. Banik, 2025 ONSC 3007
THE ‘BEST INTERESTS TEST’ AND CULTURAL SIGNIFICANCE IN INDIGENOUS COMMUNITIES
By Andrea Clarke
Originally published on Law360 Canada, © LexisNexis Canada Inc.
As I entered the courtroom in Iqaluit, I was immersed in a world of child welfare, where the glaring significance of rich culture and heritage formed part of the backdrop and undertone in cases where it should be front and centre.
There is a clear obligation on those advocating on behalf of Indigenous communities — a responsibility unlike any other. The legacy of injustices and trauma is long; many families within the myriad of the child welfare system are facing the most profound order that can be made: one terminating their parenting rights. In a system where 58 per cent of the children are Indigenous, although they constitute less than eight per cent of children nationwide, there have been systemic failures.
Indigenous factors and considerations have become significantly more visible in the legislative sphere; the challenge is that when these factors are not correctly applied, they form part of the systemic discrimination that has plagued marginalized and racialized groups for generations. Visibility without safety is simply exposing a demographic who has a long legacy of facing perpetrated injustices and systemic discrimination, which inevitably causes more harm and trauma, and is intended only to protect the legislation.
The extension of child welfare to First Nations considers legislation through a Eurocentric lens. The “best interests test” in legislation permits triers of fact to make decisions and determinations that are centred on the best interests of the child. The challenge with this test is that it is individualistic and abstract, conveying a tone of neutrality with an underlying assumption that individuals are all treated equally, without considering their relevant social circumstances.
The long-established criticism of this form of legislation is that it provides a weighting toward equality and not equity, facilitating racial oppression.
While it is expected that the best interests test has developed flexibly, it has evolved within an ideological and contextual framework that limits what a court will factor into consideration when determining the best interest of children. Historically, there has been little emphasis placed on maintaining a child’s First Nations identity and culture. The courts have leaned toward an interpretive framework whereby the apprehension and removal of children from their First Nations families and communities gives the appearance of impartiality, necessity and legitimacy; the best interests principle becomes a convenient tool in facilitating oppression.
In the Supreme Court of Canada case of Racine v. Woods, [1983] 2 S.C.R. 173, the court ruled that when applying the best interests test, the importance of cultural heritage diminishes over time, as opposed to that of bonding. This perspective has proved troublesome, not least because later implications have shown children in these circumstances often have an identity crisis, resulting in a breakdown of the placement.
While there is likely to be little debate that the best interests of the child as an individual should be given adequate consideration, it cannot be done in an abstract framework without significant weighting toward the First Nations factors, particularly those that emphasize heritage and culture. The courts have used the legislation in child welfare decisions to interpret a child’s interests as separate from their familial and cultural context, rendering their heritage and cultural identity of little importance.
The primary concern with the approach taken by courts when applying legislation with the primary focus on an individualistic approach to the child is that it provides the guise of neutrality, making counterarguments far more challenging to make in legal terms. This subtle form of applying the legislation in a manner that is prima facie defensible has the detrimental effect of removing children from their heritage, families and cultures. Even when courts factor culture into the considerations of the best interests principle, each principle is applied in its abstract vacuum and takes insufficient consideration not merely of First Nations culture but also of the particular culture and heritage of the child, often without a determinative plan for how that culture will be maintained.
To a large extent, the challenge has been the thought process and unconscious biases embedded within the best interests principle. Placing this as the primary standard has been harmful and destructive for First Nations communities. There has been progress made with the 2024 Supreme Court ruling, which upholds the federal Act respecting First Nations, Inuit and Métis children, youth and families (Reference re An Act respecting First Nations, Inuit and Métis children, youth and families, 2024 SCC 5). This decision affirms jurisdiction over child and family services, which aim to keep children with their families and communities. There is a concerted effort to reduce the number of Indigenous children in care. The Act establishes cultural continuity and substantive equality when considering the best interests of the child. This empowers First Nations to have increased control over their child welfare services, consistent with their goal of self-governance.
The key factors of this legislation are that it recognizes the inherent jurisdiction of Indigenous Peoples and establishes national standards for the welfare of Indigenous children, aligning with the principles in the United Nations Declaration on the Rights of Indigenous Peoples. However, funding and the application of the Act will be the determining factors as to how far we have truly come as a nation.
