Senators are questioning a provision in the federal government's latest budget legislation that would shield Ottawa and federal officials from civil lawsuits over actions or omissions made in good faith while administering financial-sector laws.Bill C-31, Budget 2025 Implementation Act, No. 2, proposes amendments to the Bank Act, Insurance Companies Act and Trust and Loan Companies Act stating that “no action lies” against the Crown, the minister and specified federal officials for anything done or omitted in good faith while carrying out powers or duties under those laws.Blacklock's Reporter said members of the Senate banking committee pressed Finance Department officials over why the protection was necessary and whether negligence could fall within the proposed immunity.“Have we experienced an epidemic of civil lawsuits against civil servants?” asked Ontario Sen. Toni Varone.“Is this the reason why we are tightening this up? Is fraud an exception for lawsuits, and at what point does this legislation place the civil servants above the law as opposed to being respectful of the law they are in fact serving?”Justin Brown, a senior director with the Department of Finance, told senators the provision applies to civil liability and does not protect officials from criminal liability.“It does not touch criminal liability for these decision makers,” said Brown.Asked by Varone why the change was being made now, Brown said it arose during a review of federal financial-sector statutes.The bill's summary confirms the provisions would prevent actions against the federal Crown and officials for acts or omissions made in good faith under the three financial statutes.Quebec Sen. Tony Loffreda questioned whether the wording could protect officials responsible for serious negligence if a plaintiff could not establish bad faith.“Could serious negligence be protected where bad faith cannot be established?” asked Loffreda.“If someone suffers a substantial loss because of a preventable regulatory failure, what meaningful action for compensation would remain? What specific gap in existing protections makes this broader immunity necessary?”Brown said he could not determine where negligence would cross the line into bad faith.“Your question on negligence versus good faith, bad faith, I feel might be a legal interpretative issue I am not able to address,” he said.“At what point does negligence cross over into bad faith undertaking of one’s responsibilities? I’m not sure I can sufficiently answer that question. It may be something that is up to legal interpretation at some point.”.New Brunswick Sen. Pierrette Ringuette asked who would ultimately determine whether an official acted in good or bad faith.“Ultimately it would be a judge,” Brown replied.Quebec Sen. Pierre Dalphond, a former judge, then asked whether lawyers had worked on the provision.“Many lawyers, but they are not here today,” Brown said.Sen. Daniele Henkel of Quebec said forcing someone who suffered losses to pursue a potentially lengthy court battle raised additional concerns.“There is a level of opaqueness between good faith acts that create errors, and negligence,” she said.“When someone is a victim of these types of results whether it’s negligence or mistakes made in good faith, what kind of recourse does that person have?”“It will be up to the courts,” Brown replied.Henkel said that answer was unsatisfactory.“Any complaint that goes to court will take years and a victim may not be able to defend themselves,” she said. “This is an important issue for Canadians.”
