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This Document Contains Chapters 1 to 2 Chapter 1 Knowledge of Law as a Business Asset Instructor’s Manual—Answers by Shannon O’Byrne I. Teaching Objectives After studying this chapter, students should have an understanding of • the role of law in guiding conduct • the importance of legal knowledge in the business environment • the challenges posed by business ethics and their relationship to legal requirements This chapter provides an introduction to the role and purpose of the Canadian legal system within a business context. It endeavours to put forth a corrective or alternative to the view that the legal system is obstructionist in the sense of “getting in the way” of commercial activity. Instead, the chapter advances the perspective that the law facilitates business planning, offers protection mechanisms, provides general rules of commerce, and allows businesspeople to manage their exposure to risk. In this way, the chapter defends the central proposition that informs the whole text: knowledge of the law is a business asset. The teaching objective of this chapter is to establish why it is important to study law in a business program. It is helpful to convey to students that the whole course is centred on the practical application of legal ideas and principles, and will therefore likely resonate throughout their careers. To provide a foundation for the subsequent discussion of specific legal subject areas, Chapter 1 is an account of the basic ideas that inform the Canadian legal system. By relying on the exaggerated persona of the incompetent and oblivious Lionel (whose business suffers from a series of tribulations), the chapter also illustrates the pitfalls of legal ignorance. Beyond this, it demonstrates the wide range of laws that affect Lionel’s operations and how Lionel should proactively endeavour to understand and use the law to his advantage. Through class discussion, the instructor can try to tap into whatever legal knowledge students may have and then gently advance it. For example, a student may think that the law is simply a set of rules—which it is, from a certain perspective—but it is also a process by which disputes are resolved. Furthermore, the law does not concern a process that resolves disputes in any old way; it embodies important principles, such as the idea that the laws and how they are applied should be fair and free from bias. Though no justice system can achieve such a standard of perfection, the Canadian legal system is dedicated to trying to reach it. II. Teaching Strategies Although some students may have a general sense of the legal system, it can be difficult to elicit class discussion on such a broad topic. In short, students may be too intimidated to share their thoughts on the subject. Since the tone of the class is established early in the term, it is important to find ways of securing student participation at the outset. Students (at least some) will have read Chapter 1 and already be familiar with the Business Law in Practice scenario involving Lionel and his disastrous business venture. During class, it may therefore be preferable to present a new, but parallel, example to facilitate discussion. The following example has been classroom tested, with success. A businessperson has come up with a new product—say, a computer that translates English into other languages. This entrepreneur believes that her product has numerous applications, in both the public and private sectors. She needs to work up a business plan. What business decisions must she make to bring the product to market? This example encourages discussion because it is straightforward. Students will quickly identify a number of areas requiring attention—the entrepreneur needs to choose a business name, hire employees, get financing in place, and so on. After general discussion subsides, the instructor can then zero in on two or three of the business decisions identified and illustrate how the law affects those decisions and provides mandatory parameters. For example, when choosing a name, the entrepreneur must be sure not to commit the tort of passing off, nor violate someone else’s trademark. In hiring employees, the entrepreneur must abide by the dictates of human rights legislation prohibiting discrimination, as well as comply with occupational health and safety legislation during operations. Before beginning production, the entrepreneur must be sure that her idea does not involve someone else’s patent, and so on. From there, the instructor can ask the class to consider • what the purpose of these laws might be • whether they are positive or negative forces for this entrepreneur specifically • whether they are positive or negative forces for business generally After discussing these points, the instructor can then steer debate to the text’s account of the general purposes of law. An alternative approach—which has also proven successful in the classroom—is to follow through with the Business Law in Practice scenario. By highlighting the legal difficulties experienced by Lionel, an instructor can focus on this chapter’s themes, namely: • the three purposes of the law (i.e., protecting persons and their property, facilitating interactions, providing mechanisms for dispute resolution) • how and why the law works • how knowledge of the law is a business asset, including the importance of legal risk management • the relationship between law and business ethics III. Student Activities Task 1: One way to help students prepare for class discussion about the role of the law in the business world is to ask them to find a news story, in a local or national paper, involving business and the law. Ask students to come to class having summarized the story and identified the main legal question or legal issue to be resolved. Task 2: Chapter 1 of the DVD supplement (supporting the Instructor’s Manual) contains a news clip regarding the collapse of a factory in Bangladesh, which is described in the text on page 14. After showing the clip, the instructor might pose this question: • You are the CEO of Bennetton or Walmart—stores mentioned directly on the protest placards held by those at the memorial. What are you going to do next? Task 3: Based on examples given in textbook Chapter 1, ask the class to consider to what extent should the law mandate protection (for animals being transported for slaughter, for underage tanners, and for those workers overseas indirectly filling orders from Canadian companies) and to what extent should people (those who raise animals for human consumption, those who choose to tan, those who directly or indirectly outsource production to a foreign country) be left free from government constraint or control? One common theme that unites these examples is that those whom the law seeks to protect are vulnerable in that they cannot choose their own course (such as animals) or might be too immature to do so rationally (underage tanners) or are essentially powerless (garment workers in Bangladesh). IV. Explanation of Selected Features Page 4 International Perspective: Facebook Seeks Justice against a Notorious Canadian Spammer Critical Analysis: What is objectionable about spamming? How is it different from marketing? Should American judgments be enforceable in Canada? Why or why not? Spamming is objectionable for a multitude of reasons. For example, it wastes employee time, hurts the reputation of legitimate Internet marketers, and puts a strain on Internet services providers. According to Canada’s 2005 National Task Force on Spam: [t]he new mutations of spam undermine consumer confidence in the Internet as a platform for commerce and communications. Because of this, the potential of information and communications technology to buttress productivity, and the ability of e-commerce to attract investment, create jobs and enrich our lives, is constrained not only by the torrents of spam, but by the deception, fraudulent and malicious activities that sometimes accompany it. For more analysis from this Canadian task force, see “Stopping spam: Creating a stronger, safer Internet: Report of the task force on spam” (May 2005) at . Spamming is a form of marketing but of an inherently objectionable variety. Spammers typically purchase email lists of potential customers and then inundate those email addresses with advertisements for products and services. There has been no consent by the recipients to receiving such communication—the ads are unsolicited and therefore particularly intrusive. The question concerning the difference between spam and marketing can usefully be revisited in Chapter 6, where the textbook provides a basic introduction to Canada’s new anti-spamming legislation. This legislation seeks to mark a clear line between spam and simple e-marketing. E-marketing communications will be legislatively compliant. Spam will not be. For more discussion, see Chapter 6 of this Instructor’s Manual. Though the last question posed at the end of the box raises the more complicated matter of when foreign judgments should be domestically recognized, there is no need to take a technical approach to the matter—especially so early in the course. It is preferable to approach the question conceptually but within the context offered by the Guerbuez narrative. If Facebook were unable to enforce its judgment in Canada, Guerbuez would essentially be able to break US laws with impunity. That is, assuming that Guerbuez has no assets in the United States, the only way that Facebook will see a dime of its award is to seize Guerbuez’s property in Quebec. This it can do only by getting its US judgment recognized in Quebec. So long as the US court’s decision has been reached on a fair and legitimate basis, there is no reason for Canadian courts not to assist Facebook. Beyond this, and as the Quebec Superior Court points out, Guerbuez would have faced similar sanctions under Canada’s then-proposed spam legislation. It advances justice to permit Facebook to satisfy its judgment in Quebec. As Daniel Bourque notes, these Quebec decisions demonstrate that “as a matter of international courtesy,” Canadian courts will enforce, not lightly set aside, foreign judgements absent important reasons mandating them to. See Daniel Bourque, “Quebec court enforces U.S. court’s $873 million judgement against Facebook spammer” (2011-201) 11 IECLC at . Page 5 Legislation and The Law: Breach of Privacy for Hotel to Reveal Check-in/Check-out Information Critical Analysis: In what way does PIPEDA protect people and their property? Do you think that the legislation puts too much responsibility on business? PIPEDA requires businesses to be accountable in how they gather, secure, disclose, and discard the personal information of customers, including credit card numbers, photographs, business email addresses, and computer internet protocol (IP) addresses. PIPEDA’s legislative requirements seek to protect persons and their property by acknowledging the importance of privacy, regulating how business is to manage the personal information of customers, and endeavouring to prevent such crimes as identity theft. The Office of the Privacy Commissioner (OPC)’s website provides a wealth of examples of how the privacy rights of Canadians can be violated. One instance is described in a recent press release issued by the OPC. In that press release, the OPC observed that Bell Canada’s targeted advertising initiative had such a significant impact on privacy that it should only continue based on customers “opting in” as opposed to “opting out” of such data collection —which was what Bell Canada had been relying on. See OPC, “Bell advertising program raises privacy concerns” (April 7, 2015), online: . The press release goes on to observe: Bell is able to track every website its customers visit, every app they use, every TV show they watch and every call they make using Bell’s network. When that information is combined with account and demographic information—such as age range, gender, average revenue per user, preferred language and postal code—which the company has long collected, the end result is a rich multi-dimensional profile that most people are likely to consider highly sensitive. Though Bell initially resisted the OPC’s view that an opt-in mechanism would be necessary going forward, it has since relented. This press release, and others found on the OPC website, offers an illuminating example of the importance of protecting the privacy of Canadians and could easily be used for classroom discussion. Although privacy legislation inevitably does place burdens on business, it has a strong justification for doing so. The current website for the Office of the Privacy Commissioner of Canada quotes from the office’s first annual report in 1984 as follows: “‘Privacy,’ the report observed, “is not simply a precious and often irreplaceable human resource; respect for privacy is the acknowledgement of respect for human dignity and of the individuality of man.” See Office of the Privacy Commissioner of Canada, “OPC Guidance Documents” (updated March 2015), online: OPC . Page 8 Ethical Considerations: Maple Lodge Farms’ Conviction Critical Analysis: What is the role of businesses to ensure the humane and ethical treatment of animals in their care? What is the role of government to ensure the humane and ethical treatment of animals by businesses? Animals raised for human consumption are entitled to a reasonable measure of protection, including proper food, shelter, and when being transported. Common humanity requires no less. Because animals are not always treated humanely by business (and others), government began to legislate in order to compel the necessary conduct. For example, under regulations pursuant to the Health of Animals Act SC 1990, c 21, the federal government seeks to protect animals from injury and sickness. Livestock being held for public auction must be contained in “a sanitary condition”; animals cannot be overcrowded during transportation; and when livestock is being unloaded during transit, they must be fed, watered, and rested, prior to transportation resuming. See Regulation CCR, c 296 Health of Animals Regulations, ss 94, 140, and 148(4). Page 8 Photo caption: What are the reputational costs to Maple Lodge Farms for its recent convictions and how can those be managed? There is no doubt that Maple Lodge’s convictions for animal cruelty have—justifiably—tremendous reputational costs including that the company appeared indifferent to the suffering of animals en route to slaughter. As for how to manage those reputational costs, it could be argued that Maple Lodge got off to a very poor start. According to Colin Perkel, “Chicken producer ordered to spend $1 million after cruelty conviction” CTV News (28 March 2014), online: CTV News : Maple Lodge Farms couldn't be reached immediately for comment on Friday, but the company posted a statement on its website. "While the onus continues to be on Maple Lodge Farms to transport birds in a humane manner in compliance with industry regulations and best practices, the company applauds the court for also drawing attention to bigger picture challenges in the supply managed chicken industry," the company said. Maple Lodge Farms noted the court called upon legislators to review the regulatory framework that governs chicken production in Canada, from egg to table. "Until a regulatory framework review results in changes that allow growers, transporters and processors to make adjustments to schedules without adverse consequences, continued transportation challenges within the industry can be anticipated." However, Maple Lodge Farms did say it is focused on finding solutions that provide better conditions for live birds during all phases of production. Perkel adds in the same story that the federal food inspection agency has described the company as an "animal-transport repeat violator" and that prosecution had noted at trial that "[i]t wasn't humane transportation which governed the defendant's actions but a near religious dedication to supplying its production lines." One could argue that the Maple Lodge posting is entirely self-serving and an attempt to deflect attention away from its own failings. Instead, there is every argument that a convicted company should have taken unequivocal responsibility. There may be transportation challenges but there is no need for a regulatory framework for Maple Lodge to do the right thing and ensure that chickens being transported for slaughter do not die inhumane deaths by succumbing to the cold. It is worth noting that Maple Lodge Farms was made subject to a number of probation conditions, including, as Perkel summarizes the matter: “to make public the convictions, sentence and measures it is taking to avoid further offences by "prominent" website posting.” This Maple Lodge has done at . Page 9 Business and Legislation: Regulating the Tanning Industry Critical Analysis: Should the government try to protect young people from the dangers of tanning, or should that matter be left up to the individual consumer? Given the inherent dangers of tanning beds—including disease, disfigurement, and death—there is a strong argument that regulating their use is an appropriate use of government power. As Dr. Jeffrey C. Salomon (assistant clinical professor of plastic surgery at Yale University School of Medicine), states: “UV radiation [from tanning beds] damages the DNA in the skin and while it may take years for that DNA damage to manifest itself as a skin cancer, it is still a preventable risk, similar to smoking.” Salomon also stated that “[as with] smoking, we have an obligation as a society to protect our youngest citizens from a known cancer risk by any legal means.” See Skin Cancer Foundation, “FDA panel weighs new restrictions on tanning beds” (25 March 2010), online: Skin Cancer Foundation . Even the Joint Canadian Tanning Association acknowledges the need for some regulation and has been requesting provincial standards requiring: • parental consent for tanners under 18 • mandatory protective eyewear • correct skin typing for every client • salon operator training and certification • control of equipment by certified operators • barring of customers that are skin type 1 (always burn, never tan) • banning of self-serve tanning equipment Note that the Association seeks parental consent for everyone under 18, as opposed to a ban, and some students may agree that such a limitation is more than adequate. See statement from Steve Gilroy, “Regulating the Indoor Tanning Industry” (26 April 2012) at . Page 11 Photo caption: How can parties resolve a business dispute without going to court? Of course, parties can simply try to talk out an issue and come to an acceptable solution. If this proves impossible, involving a neutral third party—such as a mediator or an arbitrator—can help keep a business dispute out of court. Page 12 Photo caption: This man claimed to have been locked in a car trunk over a debt owed to his attackers. He was freed from the trunk by firefighters. How is this method of dispute resolution inconsistent with the values informing the Canadian justice system? The man in the trunk has presumably been locked in there by people to whom he owes money. They want him to pay. This method of dispute resolution bears none of the hallmarks of the Canadian justice system because the process for determining liability and the rules applied to the dispute are not fair and are not free from bias. There is no third-party judge bringing any objectivity to the process. The creditors are judge, jury, and executioner. That is, they decide what the “facts” are, they decide what the “law” is, and they visit a punishment on the debtor. Page 14 Ethical Considerations: Bangladeshi Factory Collapse Critical Analysis: In what way can ethical standards be higher than legal ones? Do you think it should be sufficient for business simply to meet legal standards or is more required? International retailers, including Canadian ones, are called upon to be socially responsible and, for example, to finance improvements in local workplace safety for the health and well-being of those workers at risk. Ethical standards would require such participation since developing countries like Bangladesh are unlikely to do very much about worker safety on their own. Beyond this, international retailers benefit from the labour of developing world workers and should also shoulder some of the responsibility for enhancing local standards. The same argument can be made for the agreement signed by Loblaw to improve fire and building safety in Bangladesh. Even though Loblaw was legally not required to do so, it would be a monstrosity for international retailers not to stand up for the workers who produce their goods and put their lives at risk. In the federal government publication entitled “Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility in Canada’s Extractive Sector Abroad” (2014), it states: The Government of Canada expects Canadian companies operating abroad to respect human rights and all applicable laws, and to meet or exceed widely-recognized international standards for responsible business conduct. For those companies working or exploring opportunities in jurisdictions where local laws are not aligned with Canadian values, the Government of Canada encourages them to find ways to reflect Canadian values that also respect local laws. If this is not possible, companies may wish to reconsider their investment. See online: Foreign Affairs, Trade and Development Canada . Note that the DVD accompanying this text contains a clip from CBC News depicting the anniversary of the Bangladeshi factory collapse. Chapter 2 The Canadian Legal System Instructor’s Manual—Answers by Shannon O’Byrne I. Teaching Objectives After studying this chapter, students should have an understanding of • the impact of the Canadian legal system on business • the role of constitutional law in protecting commercial rights and freedoms • the government’s law-making powers under sections 91 and 92 of the Constitution Act, 1867 • the executive’s formal and political functions in regulating business • the judiciary’s role in assessing the constitutionality of legislation • the classifications of law • how administrative law affects business Whereas Chapter 1 dealt with the question “Why study the law in a business program?” Chapter 2 explains what the law is and where the law comes from. In sum, the chapter provides students with grounding in the basics of governmental operations—legislative, executive, and judicial. Though this makes for a reasonably technical chapter, it is an important one because it introduces students to the regulatory or administrative context of doing business. The teaching objective of this chapter is to help students understand the broad—and mandatory—relationship between business and government. So that students are not overwhelmed with generalities, the Business Law in Practice (involving James McCrae, the small convenience store owner) provides a straightforward example of how government regulates business. The scenario illustrates how tobacco retailers are affected by the following: • The legislative branch of government, which passes statute law, such as Nova Scotia’s Tobacco Access Act. • The political executive, which decides on the policy leading to Nova Scotia’s legislation. As another example of involvement by the political executive, federal regulations determine what the industry must show on the face of its cigarette packages. • The judicial branch of government, which determines, for example, whether or not the impeached legislation is constitutional. The Business Law in Practice scenario is offered to students as an accessible—albeit partial—segue into the workings of government. II. Teaching Strategies This chapter works best with a lecture format. It presents a considerable amount of information that will be new to many students, particularly given their diversity of educational backgrounds and the internationalization of the student body. Although the Business Law in Practice scenario provides some of context for discussion, a large part of this chapter is devoted to setting the groundwork and is not intended to spark a lot of debate. One approach that has proven successful in explaining the sources and classification of the law is to incrementally explain Figure 2.8 in the textbook (page 39), which is reproduced on the next page. Figure 2.8 summarizes the following basic propositions introduced in the chapter: • The Canadian legal system takes its current form because of the Constitution. • The Constitution mandates Canada’s legal system and therefore the three branches of government (legislative, executive, and judicial). • The Constitution creates two levels of government: federal and provincial. Municipal governments are the creatures of provincial delegation. • Each level of government has law-making powers. • Law made by government can be classified as international or domestic. (Note: Since the text focuses on domestic law, international law is only briefly mentioned. Furthermore, international law cannot be classified in the same way as domestic law and, accordingly, there is a real risk of confusing students by even attempting to explain the differences.) • Domestic law can be broadly classified as procedural or substantive. • Within the category of substantive law, another broad distinction is made between public and private law. Public law includes taxation law, constitutional law, administrative law, and criminal law. Private law includes contracts law, tort law, property law, and company law. Figure 2.8 [from textbook] It is helpful to point out to students, when reviewing the categories of law in Figure 2.8, that there is no discrete category known as “business law.” Business is concerned with all aspects of the law—and is not a self-contained area. During the course of business, people commit torts and crimes, enter into contracts, buy and sell property, and incorporate their operations. Additionally, they are taxed, can claim Charter rights from a constitutional perspective, and are subject to the jurisdiction of administrative tribunals. This chapter also provides some basic information on the operation of precedent and the notion of a judicial hierarchy. (Chapter 4 provides further information on the how the legal system works.) It also provides a brief introduction to administrative law and its relationship to business. III. Student Activities Task 1: To help students gain familiarity with how government works, ask them to research a discrete topic—such as the history of Parliament or the division of powers. Task 2: Situation for Discussion 2 describes a brawl at a bar in Halifax and the potential legislative aftermath. Ask the students to find other examples in which possible problems arising from business management/business activity might lead to new laws being enacted. (Examples from the textbook include a lack of safety in drinking establishments leading to minimum drink prices being enacted in Alberta (see “Alberta mandates minimum booze prices,” Calgary Herald (3 July 2008) at ) and in Nova Scotia (see CBC News, “N.S. sets minimum price for alcoholic drinks. Rule ends dollar-a-drink nights at Halifax bars” (19 December 2008) online: CBC ; fly-by-night home inspectors leading to legislation governing the home inspection industry (Situation for Discussion 1); and gender-based pricing leading an Ontario backbencher to introduce a bill banning the practice (see Questions for Critical Thinking 1. Examples from Chapter 1 include the inhumane treatment of chickens being transported for slaughter (see Ethical Considerations: Maple Lodge Farms conviction) and underage tanning (see Business and Legislation: Regulating the Tanning Industry, page 9). IV. Explanation of Selected Features Page 21 Photo caption: Some customers are unhappy with display bans, including Rene LaPointe. “It’s just another law for the government to throw at us,” says LaPointe. “They’re treating the adults like children.” Do you agree with his analysis? [footnote deleted] With respect, Rene LaPointe is missing the point entirely. The idea of a tobacco display wall ban is to help ensure that children are not encouraged to take up smoking and that smoking is not normalized in their eyes. It may have the effect of reducing consumption in adults but that is not overriding purpose of the law. The government isn’t treating adults like children; it is trying to prevent children from smoking, whether now or as they grow older. Page 24 Environmental Perspective: Concurrent Jurisdiction over the Environment Critical Analysis: What are the advantages of concurrent jurisdiction over the environment? What are the disadvantages? Concurrent jurisdiction over the environment is inevitable because it follows from the distinct powers that each level of government is given under the Constitution. For example, a source of the federal government’s power over the environment comes from its s. 91 power over navigation and shipping. One source of the provincial government’s power over the environment derives from its jurisdiction over such matters as property and civil rights. Therefore, concurrent jurisdiction has at least logic to recommend it and leaves environmental matters in the hands of the level of government that might be best equipped be able to assess and handle it. However, this division can also lead to a regrettable lack of coordination on a variety of fronts, including the cleanup of contaminated soil, as well as regulatory complexity and inefficiencies. A possible solution to this problem is for political executive at all levels of government to cooperate. For example, and as noted by Dianne Saxe and Jackie Campbell, the “provinces and federal government have an active but slow process of trying to harmonize their cleanup standards, through the Canadian Council of Ministers of the Environment.” For more analysis, see Dianne Saxe and Jackie Campbell, “Canadian environmental law: Quick intro,” (undated document), online: Sax Law Office . Page 26 International Perspective: Antismoking Treaty Critical Analysis: How might a treaty ratified by multiple countries be more effective in reducing tobacco consumption than if each country simply worked in isolation? What are the advantages of global cooperation? What are the disadvantages? Countries working together from an agreed-on template—such as is contained in a treaty—are likely to benefit from the increased efficiencies associated with this kind of cooperation. Instead of each country working in isolation, countries combine forces, share their knowledge base, and formulate a generalized solution. Such an efficiency counts as an advantage of global cooperation, as do the opportunities that emerge for cooperation on other related issues. Cooperation also makes it easier for each country to resist the efforts of smoking lobbies and the tobacco industry. The disadvantages relate largely to a compromised ability to change course in how smoking is to be combated within a country. Page 26 Photo caption: Hookah tobacco is at least as dangerous as cigarette tobacco. Should it be exempt from appropriate health warnings in Canada? The Mayo Clinic Patient Care and Health Info website contains an article from J. Taylor Hays entitled “Is hookah smoking safer than smoking cigarettes?” (undated document), online: Mayo Clinic, . Here, the author states: The tobacco is no less toxic in a hookah pipe than in a cigarette, and the water in the hookah does not filter out the toxic ingredients in the tobacco smoke. Hookah smokers may actually inhale more tobacco smoke than cigarette smokers do because of the large volume of smoke they inhale in one smoking session, which can last as long as 60 minutes See too Shereen Lehman, “Hookah smokers are inhaling benzene, a leukemia risk, study says” Globe & Mail (27 November 2014) at L7. Given these risks, it is difficult to see why hookah tobacco is not subject to health warnings and other forms of government regulation. In fact, the Centers for Disease Control and Prevention notes that hookah smoking is rising among youth and college students. It also references WHO’s Study Group on Tobacco Product Regulation that urges consideration of the following to reduce hookah smoking. Note that five of the six points would involve government regulation of the product: • “Education of health professionals, regulators, and the public at large is urgently needed about the risks of hookah smoking, including high potential levels of second-hand exposure among children, pregnant women, and others. • Hookahs and hookah tobacco should be subjected to the same regulations as cigarettes and other tobacco products. • Hookahs and hookah tobacco should include strong health warnings. • Claims of harm reduction and safety should be prohibited. • Misleading labelling, such as "contains 0 MG tar," which may imply safety, should be prohibited. • Waterpipes should be included in comprehensive tobacco control efforts, including prevention strategies and cessation interventions. • Hookahs should be prohibited in places consistent with bans on cigarette and other forms of tobacco smoking.” See online CDC . For further analysis from a specifically Canadian legal perspective, see Non-Smokers’ Rights Association, “Water Pipe Smoking in Canada: New Trend, Old Tradition” (February 2012), online: Non-smokers’ rights association . Page 27 Business and Legislation: Tobacco Regulation by the Federal Government Photo caption: This image depicts Barb Tarbox who died of lung cancer caused by smoking. She was so addicted to cigarettes that she continued smoking until her death. One of her final wishes was that her dying image appear on cigarette packages as a warning to others. Are such images effective? [footnotes deleted] For the moving back story about Barb Tarbox’s image on cigarette packages, see the DVD supplement supporting this Instructor’s Manual that contains the clip entitled “Barb Tarbox legacy.” Statistics Canada reports that smoking has declined dramatically over the last 10 years and particularly so among teens. As reported by the Red Deer Advocate (22 June 2012), Ottawa credits some of this success to its “its mandatory, graphic anti-smoking packaging for tobacco products.” The article goes on to note that “one in five Canadians aged 12 and over—5.8 million people—smoke on an occasional or a daily basis, down from 25.9 per cent in 2001. For teens aged 15 to 17, the rate fell over the same period to 9.4 per cent from 20.8 per cent. For those aged 18 to 19, the rate dropped to one in five from one in three.” Other factors that have presumably contributed to the decline in smoking rates include increased education programs, reports the Red Deer Advocate. Another contributing factor in the decline is the escalating cost of cigarettes because of increased levels of taxation. See Red Deer Advocate, “Gruesome images on cigarette packs seem to be working,” Winnipeg Free Press (22 June 2012), online: Winnipeg Free Press . An analysis of studies conducted at the University of North Carolina at Chapter Hill concludes that pictorial warnings are more effective than text warnings alone: Pictorial warnings had a bigger impact on 20 outcome measures—including increasing intentions not to start smoking, intentions to quit smoking, getting and keeping people’s attention, triggering people to think about the negative impacts of smoking, and for credibility. …. Pictorial warnings made people look at smoking in a more negative way and increased their intentions to quit smoking. This is very important, as these variables are associated with later attempts to quit smoking ….. See UNC Health Care and School of Medicine Newsroom, “UNC Analysis Shows Advantage for Picture-Based Cigarette Pack Warnings over Text Warnings” (6 May 2015), online: UNC . Page 31 Business and Legislation: Store Owner Challenges Nova Scotia’s Tobacco Access Act Critical Analysis: Do you support Gee’s decision to fight the legislation? Students may be divided on this point. On the one hand, it seems reasonable for government to seek to reduce smoking, particularly in young people. Since power walls normalize smoking—at least to some extent—banning such walls is an important and relatively unobtrusive way of helping to ensure that young people never take up a habit that could kill them. As noted in the Business Law in Practice opening scenario, in countries that have banned tobacco displays, there has been an encouraging reduction in smoking by young people. On the other hand, cigarettes are legal products and laws like the Tobacco Access Act are arguably simply too intrusive. And those particularly familiar with Mr. Gee’s business will perhaps object on the basis offered by Halifax’s Chronicle Herald. In an editorial dated 24 August 2010, the paper observed that Mr. Gee’s store would have been exempt from the display ban under the Tobacco Access Act had Mr. Gee fit the definition of a tobacconist, that is, someone who only sells tobacco. However, he does not fit the definition since, admittedly, Gee sells a few other products beyond tobacco, such as candy and soft drinks. The editorial then states, The ridiculous part of this saga is that it makes no practical difference whether Mr. Gee is a bona fide tobacconist or not. He obeys the law in every way that matters. He does not allow minors in his specialty shop. He does not advertise tobacco products outside his store. People know that his well-established business is a tobacco store, not a convenience store. The editorial goes on to suggest that the province show some flexibility and allow retailers “who offer sundry items on the side, but whose raison d’être is tobacco sales, to be considered tobacconists under the law.” This response by the Chronicle Herald creates its own set of problems because now, to apply the new distinction it advances, we have to ask if the vendor’s raison d’être is tobacco sales or not. This is a slippery standard whereas the existing legislation at least has clarity to recommend it. A person is a tobacconist or that person is not. Full stop. As well, it may be problematic to conclude, as the editorial does, that Gee obeys the law “in every way that matters.” Part of the legislative frameworks requires tobacco products not to be displayed unless the seller is a tobacconist. One could argue that this provision matters too. Instructor Manual for Canadian Business and the Law Philip King, Dorothy Duplessis, Shannon O'byrne 9780176570323, 9780176509651, 9780176501624, 9780176795085
