Canada

Navigating the legislative landscape from sea to sea

Canada is a federal state that is comprised of multiple provinces and territories, most of which belong to the common law tradition, with Quebec being Canada’s only civil law jurisdiction. This bijural, bilingual legal system has influenced the development of arbitration law and practice. At the federal level, the Commercial Arbitration Act (and the Commercial Arbitration Code contained therein) applies “where at least one of the parties to the arbitration is Her Majesty in right of Canada, a departmental corporation or a Crown corporation ….”

In common law provinces, international arbitration and domestic arbitration are governed by separate statutes. In international matters, common law provinces and territories follow the UNCITRAL Model Law (ML) (the 1985 version for the most part, with Ontario and British Columbia adopting the 2006 version a few years ago). Domestic arbitration legislation departs from the ML in certain ways, varying on matters such as appeal rights, consolidation of arbitration proceedings, evidentiary issues, and power of courts, to name a few. In some provinces, reform discussions have been underway, with proposals to create a single framework for both international and domestic disputes being advanced (see, e.g., the Toronto Commercial Arbitration Society Arbitration Act Reform Committee’s “Final Report” dated February 12, 2021).

In Quebec one legislative text (Code of Civil Procedure, CCP) applies to international and domestic matters alike. Though Quebec has not directly incorporated the 2006 ML and the New York Convention (NYC) into its legislation, it has implemented their main components through the CCP and the Civil Code of Quebec (CCQ): whereas the former addresses various procedural issues, the latter contains provisions concerning arbitration agreements. In the spirit of the ML and NYC, arbitration awards are not appealable and may only be challenged by way of set aside or annulment.

Seeing the arbitration landscape from a bird’s-eye view

The internationality of a dispute impacts not only the applicability of a certain statute, but also the manner in which arbitration unfolds. Recent data indicates that “for international contracts, 61% of parties chose to have the arbitration administered by an institution more than one-half of the time” (typically, International Court of Arbitration of the International Chamber of Commerce, ADR Institute of Canada, or AAA/ICDR), whereas for “domestic contracts, 63% of parties chose ad hoc arbitration more than one-half of the time” (Canadian Arbitration Report 2024, p. 27). The reasons for the latter vary and may include, besides cost considerations and the “perceived lack of value from institutional administration,” counsel’s familiarity with institutional rules or clients’ confidence in domestic sets of procedural rules (especially in the context of public-private partnership projects). The highly specialized nature of certain disputes may likewise limit the choice of procedural rules (this is the case, e.g., with disputes relating to agreements that concern certain telecommunication services, which are typically resolved pursuant to the Industry Canada’s Arbitration Rules and Procedures, CPC-2-0-18).

Criminal matters aside (as they are not arbitrable anywhere in the country), the scope of arbitrable disputes is wide. Provincial statutes typically exclude from commercial arbitration family matters or matters related to the capacity of persons. Additionally, in Quebec, courts have exclusive jurisdiction over disputes concerning civil liability relating to injuries “suffered as a result of exposure to or the use of raw materials … originating in Quebec” (per Articles 3129 and 3151 of the CCQ).

This rather broad notion of arbitrability enables parties to resort to arbitration for all kinds of commercial disputes. This is aided by the fact that arbitration is generally perceived as the confidential, more expedient, dispute resolution option.

Not all provincial legislation, however, protects confidentiality expressly. British Columbia statutes, both international (section 36.01) and domestic (section 63), Quebec CCP (Article 4) and Prince Edward Island domestic arbitration statute (section 70) are among the rare examples of laws envisaging confidentiality protections. As such, parties wishing to keep their disputes private would be wise to include confidentiality provisions in their agreements. These would not only preserve confidentiality during the arbitration but would also increase the chances confidentiality is maintained in subsequent court proceedings where the “open court” principle prevails.

In Quebec, for instance, a line of cases affirmed the importance of preserving confidentiality of arbitration (see, e.g., 79411 USA Inc. v. Mondofix Inc., 2020 QCCS 1104; Hypertec Real Estate Inc. v. Equinix Canada Ltd, 2023 QCCS 2876; Gem Yield Bahamas Limited v. Glen Eagle Resources Inc., 2024 QCCS 750). However, in 2021, the Supreme Court of Canada in Sherman Estate v. Donovan, 2021 SCC 25 reiterated that discretionary limits on the “open court” principle may only be imposed if there was a serious risk to an important public interest. Since then, the author’s personal experience suggests certain reluctance on the part of lower courts to grant blanket confidentiality or sealing orders of all arbitration-related materials. The situation appears to be similar in Ontario, where just in March 2026 the Ontario Superior Court refused to seal transcripts of the arbitration hearing and refused to allow redactions to the award, which would have removed references to agreements a party claimed were confidential (see Rogers Communications Inc. v. Glentel Inc. et al., 2026 ONSC 1280).

Aside from these latest instances of apparent hesitancy in relation to confidentiality, Canadian courts have generally been supportive of commercial arbitration. For example:

• They refer parties to arbitration when presented with a valid arbitration agreement (see, e.g., General Entertainment and Music Inc. v. Gold Line Telemanagement Inc., 2023 FCA 148; Globeair Holding GmbH v. Pratt & Whitney Canada Corp., 2024 QCCA 1329; 55104 Newfoundland and Labrador Inc. v. Wärtsilä Canada Incorporated, 2026 NLSC 29; 2197 Otter Point Properties Nominee Ltd v. GT Mann Contracting Ltd., 2026 BCSC 558).
• They refuse to allow parties to relitigate their dispute at the post-award stage, interpreting narrowly the permissible grounds for annulment or set-aside outlined in the ML and the NYC (see, e.g., Feicheng Mining Group v. Liu, 2026 ONSC 1969).
• They stay recognition and enforcement proceedings until annulment proceedings at the seat are completed (see, e.g., PMGSL Holdings v. Neptune Wellness Solutions Inc., 2024 QCCS 1537; Razel-Bec v. Magill Construction Corporation, 2026 QCCS 1140).

Some jurisdictions facilitate interactions with courts by entrusting more specialized, expedient and commercially minded court divisions with power to hear arbitration-related matters (e.g., the Commercial List in Toronto or the Commercial Division in Montreal).

The above pro-arbitration stance may be somewhat varied when bankruptcy and insolvency legislation is triggered. Ever since the 2022 Supreme Court of Canada judgment in Peace River Hydro Partners v. Petrowest Corp., 2022 SCC 41, which examined the interplay between the worlds of arbitration and insolvency, courts across the country have had to grapple with the impact of bankruptcy and insolvency or restructuring proceedings on arbitration, at times staying arbitration (see, e.g., Mayfield Investments Ltd (Re), 2025 ABKB 326) or refusing to proceed therewith (see, e.g., Mercy Falls BC Inc. (Re), 2025 BCSC 1960). There are, however, no default positions and courts undertake a case-by-case analysis, diverting from arbitration clauses only in exceptional circumstances, after having balanced “the parties’ contractual autonomy with the broader public interest in ensuring an efficient and orderly liquidation or restructuring for the benefit of all stakeholders” (Arrangement relative à 9550-1714 Québec inc., 2025 QCCS 3840).

Thinking twice before using generative AI

Artificial intelligence has been infiltrating every area of life for a few years now. Like other jurisdictions, draft legislation, various standards and guidelines regarding AI have been considered and developed in Canada. Law societies in different provinces have issued guidance on the use of AI by counsel, recognizing the AI’s limitations and risks of overreliance thereon and emphasizing the duties of competence and confidentiality, among others.

Courts, for their part, have sanctioned parties who relied on hallucinations in their submissions. For example, in Specter Aviation Limited v. Laprade, 2025 QCCS 3521, the party opposing recognition and enforcement was punished monetarily for having cited non-existent legal authorities. In Kapahi Real Estate Inc. v. Elite Real Estate Club of Toronto Inc., 2026 ONSC 1438, when faced with counsel who denied using AI to create his motion to vary a prior court judgment which enforced a decision of an arbitral tribunal, the court referred its decision to the Law Society of Ontario.

Most recently, in April 2026, the Quebec Superior Court annulled an award because of the sole arbitrator’s heavy reliance on AI, which was suspected from his multiple references to non-existent legal authorities (ARIHQ v. Santé Québec – Centre intégré universitaire de santé et de services sociaux du Centre-Sud-de-l'Île-de-Montréal, 2026 QCCS 1360). In the court’s view, “arbitration procedure” referenced in Article 646(1) sub-paragraph (3) of the CCP (the Quebec equivalent of Article V(1)(d) of the NYC) encompassed not only the hearing but also the deliberative process. While acknowledging that the arbitrator was not forbidden from seeking the assistance of a clerk or a researcher, and that in principle there was nothing intrinsically reprehensible about using AI, the court underscored that the ultimate responsibility for drafting lay with the arbitrator who could not delegate the task of drafting to a third party. In this case, the court concluded there was preponderant evidence that supported the conclusion that the arbitrator had delegated his authority and abdicated his role. Although the court attempted to limit the impact of this conclusion, noting that it did not imply that every award that cites erroneous references or uses AI as a drafting tool should meet the same fate, the judgement is nonetheless instructive and has the potential to impact the work of arbitrators and counsel alike.

* The views expressed herein are those of the author and do not necessarily reflect the views of Woods LLP or its partners.