 Hi, it's William Chow, and welcome to Introduction to Law and Legal Risk Management, Module 1, Part C. In this part, I will give you a brief introduction to law by first explaining what is law, and then explaining the difference between the two legal systems that we have in Canada, common law and civil law, and then look at the different sources of law that we have in Canada. What is law? Law is similar to rules. Law is also similar to morality or ethics. The key distinction is that with laws, laws are rules that can be enforced by courts. Let's look first at rules versus laws. We can say that all laws are rules, but not all rules are laws. There are many rules that we are subjected to in our day-to-day lives that are not considered to be laws. For example, whenever we play a sport like soccer, there are many rules that apply when we play that sport. A big rule in soccer is that you're not allowed to touch the ball with your hands. If you break that rule, that rule is not enforceable by courts. You don't go to court to say that the other player touched the ball with their hand. That rule is enforced by the referee. With morality or ethics compared to law, when we commit a moral wrong, a moral wrong is something that goes against some kind of moral rule that a person holds. If you lie to your friends, there are what we call informal sanctions. These are informal or undefined consequences that flow from the moral wrong that you committed. If you lie to your friends, you might lose them as a friend or it could also damage your reputation. None of those consequences are specifically spelled out anymore. That's what makes them informal. If you commit a legal wrong, if you break a law, there are specific consequences. There are what we call formal sanctions. If you break a law by committing a theft, there are specific consequences that flow from that. It could be imprisonment or payment or payment of a fine. In Canada, we have the civil law system and the common law system. The civil law system is found only in Quebec. Quebec is the only Canadian civil law jurisdiction. In every other province, we find the common law system. When we use the word jurisdiction, just to take a step back here, we mean a particular geographical area that uses the same set of laws. Each province in Canada, it could be considered to be a jurisdiction because each provincial government passes laws that apply anywhere in the particular province. The whole of Canada could be considered one jurisdiction as well because federal laws apply anywhere in Canada. A municipality could also be considered a jurisdiction in terms of the bylaws that a municipality passes. With the civil law system, civil law traces its history all the way back to ancient Rome and in particular France. The civil law system, without getting into a deep discussion about it, is essentially based on a code of legal principles. The common law system traces its history back to England. Any country that used to be a colony of England is likely to have a common law system. For example, Australia, New Zealand, and also here in Canada, and also the United States is also a common law jurisdiction. The distinctive characteristic of the common law system is that there is much greater reliance on what we call judge-made case law. We look very carefully at the written decisions of previous courts in making decisions in current cases. And what that legal approach is called, it's called the doctrine of precedent. There are three sources of law in Canada. The first is the constitution, which we will talk about in detail in the next module. The second is legislation, or government-made law is another way of describing it. And the third is the courts. Legislation is often referred to as government-made law. It is law that is created by any type of government in Canada. It could be the federal government, provincial government, or a municipal government. Those governments, or in particular the federal parliament and provincial legislatures in creating laws, are using the powers given to it under the division of powers in the Constitution, which we discussed in the previous module. The three types of legislation are statutes, regulations, and bylaws. Statutes are laws made by either the federal parliament in Ottawa or a provincial legislature. The provincial legislature for Ontario is the one located at Queens Park in Toronto. Either the parliament in making law or provincial legislature, they are exercising the law-making powers given to it under the Constitution in the division of powers. Any statute, the name of any statute, will have the word act at the end. So anytime you see the word act, you know it's a statute. For example, the federal parliament has created the statute which governs banking in Canada called the Bank Act. The process of creating a statute is a long and complicated one. There is a similar but slightly different process for the federal parliament versus a provincial legislature. We will have a simplified overview of the federal legislative process. At the very beginning of the process, the proposed statute is called a bill. So that bill is introduced in the House of Commons, which is a part of the federal parliament. The House of Commons will examine that bill. They will vote on it three times. So those are called first, second, and third readings. In between those readings, there will be one or more committees made up of members of parliament who will examine the bill in detail. After the House of Commons has approved the bill in third reading, the bill is passed on to the Senate. The Senate does something very similar to what the House of Commons did. It will vote on it three times with a first, second, and third reading. And it will also review the bill in detail by groups of committees. After the Senate has approved the bill, the very last step, and this is usually just a formal step that occurs. But it is a necessary step to make the bill into law. And that step is sending the bill over to the Governor-General. The Governor-General is the representative of the Queen in Canada. The Governor-General just simply signs the bill upon signing, which is called royal assent. The bill becomes law. It becomes an act at that very moment. The second type of legislation, or government-made law, is called regulations. The way to think about regulations is by looking at statutes as containing all of the general rules, and then the specific rules that we need to implement those general rules are found in the regulations. For example, in the Income Tax Act, which is a statute created by the federal parliament, it requires that employers deduct tax from employees' pay. Now, to determine the actual amount of tax, or the formula to determine the amount of tax that has to be deducted, we can't find that in the Income Tax Act. We find that in the Income Tax Regulations. Now you're probably asking yourself, why do we make life so complicated by having two sets of rules in two different places? We have to look in more than one place to figure out how much tax we need to deduct. The reason that we have these specific rules in the regulations instead of the statute is that the regulations are much easier to change and quicker to change than statutes. To change a statute or to create a statute, we have to go through that legislative process that we looked at in the previous slide. That legislative process is complicated, it's long, and it's also quite often very political. The process of creating or changing regulations in comparison is very quick and usually not political. If the government needs to change the rules or the formulas for determining the amount of tax that needs to be deducted from an employee's pay, they can easily do that if those rules are contained in the Income Tax Regulations versus the Income Tax Act. Now who has the power to make or change regulations? To determine that, we have to look at the specific statute and see what it says. Who does it give that power to? That power is usually given to a government minister or a specific commission or a tribunal. Regulations are considered to be subordinate legislation. The third type of legislation in Canada is called bylaws. Bylaws are created by municipal councils. If you recall in the previous module where we talked about the division of powers under the Constitution, the Constitution gives the provinces the power to create municipalities. Whenever a province creates a municipality, in that process the province has to pass on some power to the municipality that gives the municipality the ability to make its own laws, which are called bylaws. Bylaws are also considered to be subordinate legislation. For example, for the City of Toronto, way back when the Ontario Legislature passed a statute called the City of Toronto Act, and that act created the City of Toronto and also gave powers to the City Council of Toronto to pass bylaws on various specific matters, which would include things that cities typically deal with, like parking rules, zoning, municipal zoning. Anything that the city has the power to do, that power came from the province. Let's now look at a quick quiz question. Please pause this video so you can consider this question. The answer is C, bylaw. The town of Blackville created a set of rules for the licensing of businesses. Those rules are considered to be bylaws. Bylaws are laws created or passed by municipalities. The third and last source of law in Canada is the courts. The courts in Canada perform various functions. One function is to interpret and apply the constitution. So remember the constitution includes both the rules governing the division of powers and also the Charter of Rights and Freedoms. Another function is to interpret and apply legislation. So legislation would include statutes, regulations, and bylaws. The courts, and this third one is something that's not obvious to most people. The courts themselves can also create and apply its own law, which we call common law, or a more simpler way of referring to it is judge-made law. For example, many of the rules that govern contract law do not come from any kind of government legislation. It doesn't come from any act or regulation or bylaw. Many of these rules, like for example the rules that govern the creation of contracts, those rules come from legal principles in many previous and older cases written by judges. So over the years, many of these legal principles have been developed from case to case in order to create a general set of rules which govern contract law.