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Development Bank President Unfairly Terminated
October 5, 2006

The Federal Court recently held that the Federal Government acted unfairly in terminating the President and Chief Executive Officer of the Business Development Bank of Canada (“BDC”).

Problems began when the President’s predecessor sued the federal government over his termination. In allowing the action, the Court criticized the conduct of the BDC and its new President. Although the BDC responded by issuing a press release expressing support for the new President, rumours surfaced about his continued employment. Concerned about these rumours, the President wrote to the Prime Minister asking him to ensure that any decision the Government made regarding his employment complied with the rules of procedural fairness.

The next day, the responsible Minister suspended the President without pay and gave him one week to submit reasons why he should not be terminated. When the President requested clarification of the allegations against him he was simply referred to the Court’s decision in his predecessor’s lawsuit. He was provided with a brief opportunity to meet with the Minister to discuss the matter but his employment was terminated 12 days later.

The Federal Court concluded that the Government had not acted in a procedurally fair manner. In this regard, the Court noted that the President was entitled to a personalized inquiry and an opportunity to respond to its result. In the Court’s view, the President should not have been held to a standard of proof that was almost impossible to rebut, and he should have received substantive reasons for the final decision regarding his termination.