B.C.'s Use of Extraordinary Powers and the Implications on Businesses in the Supply Chain

March 30, 2020

Written By Charlotte Teal, Sharon Singh and Radha Curpen

On March 26, 2020, British Columbia Minister of Public Safety and Solicitor General, Mike Farnworth, issued the Local Authorities and Essential Goods and Supplies (COVID-19) Order pursuant to powers granted to him under the Emergency Program Act.  

The Order marks an unprecedented use of B.C.'s extraordinary powers to respond to COVID-19 pandemic, enabling greater governmental control over the supply chain of "essential goods and supplies", including on the distribution, transportation, and storage of such goods. 

Background on the Use of Extraordinary Powers

The Emergency Program Act¹ gives the minister the power to declare a state of emergency in the province for a variety of reasons. A provincial state of emergency in response to the COVID-19 was declared on March 18, 2020. When announced on March 18, the state of emergency was initially put into effect for 14 days, but is subject to any necessary extension or rescission. (For information on such declarations across Canada, please see our previous blog post, An Overview of Mandatory Closures and Restrictions on Businesses Across Canada in Response to the COVID-19 Pandemic).

A state of emergency declaration gives the minister broad powers to "do all acts and implement all procedures that the minister considers necessary to prevent, respond to or alleviate the effects of an emergency or a disaster".² This includes utilizing the broad powers to:

• provide for the restoration of essential facilities and the distribution of essential supplies and provide, maintain and coordinate emergency medical, welfare and other essential services in any part of British Columbia;
• authorize the entry into any building or on any land, without warrant, by any person in the course of implementing an emergency plan or program or if otherwise considered by the minister to be necessary to prevent, respond to or alleviate the effects of an emergency or disaster; and 
• procure, fix prices for, or ration food, clothing, fuel, equipment, medical supplies or other essential supplies and the use of any property, services, resources or equipment within any part of British Columbia for the duration of the state of emergency.

The Order and Implications for Supply Chain Related Businesses

a) Introduction of New Bodies Managing the Supply of Goods and Services

The new measures intended to maintain the supply chain of essential goods and services will affect companies working across the supply chain, including those involved with the supply, transport, distribution, and storage of goods.  

The province will now play a greater role in the management and coordination of essential goods and services through the creation of two new bodies:

• a new Provincial Supply Chain Coordination Unit, through which the provincial government will partner with industry to coordinate the distribution of goods and services; and
• a new Coordinated Provincial Air Service, which will be responsible for coordinating all air service required to transport essential goods, services or personnel. The province will also actively coordinate the movement of goods and services by land, marine and rail. 

The structure of the new Provincial Supply Chain Coordination Unit and the Coordinated Provincial Air Service are not yet clear, and further details as to how these bodies will operate need to be worked out. Until such details are released, the practical implications of these bodies on businesses involved in the movement and distribution of goods are not clear.

b) Specific Measures Affecting Those In the Supply Chain

Businesses involved in the supply of goods and services, including suppliers, distributors, retailers, transporters, and those with facilities that can be used for storage, may be required to quickly adapt to new directions from the government.

If directed by the minister, all suppliers, distributors and retailers within British Columbia, the Retail Council of Canada (BC), the Canadian Trucking Association of BC, and the United Truckers Association will be required to take coordinated measures to ensure the effective delivery of essential goods and supplies throughout the province, which may include food, fuel, medicine, and other goods prioritized by the minister.³ 

"Essential goods and supplies"⁴ are defined in the Order to include any goods and supplies that are necessary for the health, safety and welfare of people including, without limitation:

• food, water and other beverages;
• fuel and gasoline;
• health care goods; pharmaceuticals and medical supplies; and
• personal hygiene, sanitation and cleaning goods.

At the request of the minister, all retailers, suppliers, businesses and other organizations within the province must report to Emergency Management B.C. on their inventory of essential goods and supplies and any other supplies required by front line health care workers, first responders and other prioritized essential workers.⁵

In addition, the province has suspended any bylaws that restrict the time of day when goods may be delivered, providing greater flexibility to deliveries of goods and services. This measure also sets up the provincial government to impose requirements on companies to comply with directions for the supply and delivery of essential goods and services.⁶

There are also several measures that directly affect suppliers, including:

• The minister may direct a retailer to limit the number of items of a specified good that a retailer must sell to a person in a single transaction.⁷
• The Order prohibits the "secondary selling" of essential goods or supplies, meaning that it is prohibited to re-sell (either inside or outside British Columbia) an essential good or supply that the person purchased or acquired in a retail environment, or acquire by donation or at no cost from a government or other organization or body.⁸

Businesses involved in the storage of goods, or those with the capacity to store goods, may also be impacted by the new measures, which allow the province to direct local authorities to identify warehouses and other facilities for gathering supplies, for use as self-isolation facilities or for use to provide medical care or testing.⁹ It is foreseeable that such facilities may be required to quickly respond to demands to accommodate such needs.

As the need for essential goods and supplies increases, businesses may start considering the list of essential goods and supplies, taking stock of their inventories, and considering what infrastructure they have that may enable them to assist with the production of such goods. For example, we have seen automakers manufacturing ventilators and luxury perfume brands and breweries using their facilities to produce hand sanitizers.

c) Other Measures Under the Order

The Order includes a range of additional measures to respond to COVID-19, including measures directed towards:

• banning the secondary resale of food, medical supplies, personal protective equipment, cleaning and other essential supplies; and restricting quantities of items purchased at point of sale;
• enabling municipal bylaw officers to support enforcement of the provincial health officer's orders for business closures and gatherings, in line with offences under the Public Health Act;
• ensuring all passenger and car-ferry services provide minimum service levels and priority access for residents, and essential foods and workers; and
• suspending local states of emergency specific to the COVID-19 pandemic, except for the City of Vancouver, which will allow for a coordinated and uniform approach across the province; giving municipal councils the ability to hold more flexible meetings to expedite decisions; and coordinating potential use of local publicly owned facilities, like community centers, for self-isolation, testing, medical care, warehousing and distribution. 

Bennett Jones is committed to helping our clients navigate the rapidly changing environment during these unprecedented times. If you have any questions regarding the information in this blog post, including whether you are considering re-organizing your business to assist in producing essential goods and services, or would like help determining how the Order affects your business, please contact a member of the Bennett Jones team. In addition, please visit our COVID-19 Resource Centre for other COVID-19-related materials.

1. Emergency Program Act, RSBC 1996, ch 111.
2. Ibid, s. 10(1)
3. Order of the Minister of Public Safety and Solicitor General, Local Authorities and Essential Goods and Supplies (COVID-19) Order, Ministerial Order No. M084 (26 March 2020), s. 11
4. Ibid, s. 2
5. Ibid, s. 8(3)
6. Ibid, s. 8(2)
7. Ibid, s. 8(4)
8. Ibid, s. 9
9. Ibid, s. 6(1)