In Thursday's ruling in British Columbia v. Imperial Tobacco, the Supreme Court of Canada gravely eroded the Charter of Rights and Freedoms by upholding a troubling British Columbia law, the Tobacco Damages & Health Care Costs Recovery Act.

The law retroactively holds tobacco companies liable for health-care costs paid for by the provincial government for illnesses commonly associated with tobacco use, even though the tobacco was sold legally in B.C. to willing consumers. It curtails traditional defences to liability, allowing the government to recover billions of dollars in damages without ever having to prove that smokers were actually fooled about the dangers of smoking or that smoking actually caused their illnesses. The Act prevents companies from adequately defending themselves, denying them the right to present evidence showing that they did not cause an individual smoker's disease or health-care costs, or that such health-care costs were unnecessary or excessive.  

The decision is an affront to the rule of law guaranteed by the Charter of Rights and Freedoms. It denied the right to a fair trial, flatly asserting that "a fair civil trial" does not "enjoy constitutional protection in Canada." It also violated equality in the law and the principle that the government is bound by ordinary law and must govern though laws of general application.

Even the Florida Supreme Court -- a U.S. court famously willing to change settled legal rules to promote lawsuits against tobacco companies and jackpot justice -- did not go as far as the Canadian Supreme Court. In 1996, a sharply divided Florida court ruled four to three that Florida could make tobacco companies pay for the state's health-care costs resulting from tobacco use. But all seven justices voted to strike down provisions similar to those upheld by the Canadian Supreme Court on the grounds that they obviously violated due process.

The Florida justices all recognized that tobacco companies had both the right to present evidence showing that tobacco use did not cause an individual smoker's disease, and the right to show that any health-care costs spent on a smoker were not necessary or properly spent. Remarkably, the Canadian justices held precisely the contrary. The Florida justices also recognized that overturning the statute of limitation to revive stale, long-dead tort claims violates due process. Unfortunately, the Canadian justices held to the contrary, allowing businesses to be ruined after the fact for sales that were perfectly legal when made.

The Supreme Court of Canada's decision violated equality in the law by

allowing the government to selectively abolish time-honoured defences to lawsuits just for lawsuits brought by the government. Indeed, the Court reveled in the fact that "the driving force" of the Act was "compensation for the government," rather than any "breaches of duty" by manufacturers, whose guilt or innocence of wrongdoing it deemed of little relevance. That created a legal double standard and set a terrible precedent.

To justify its abrogation of the rule of law, the Supreme Court argued that fairness was outweighed by "democracy," which requires unjust laws to be fixed at "the ballot box," not by the courts. But as Justice Holmes of the B.C. Supreme Court observed, the Act was aimed at "the tobacco industry nationally and internationally," and it is companies outside of British Columbia that will be subject to liability under the Act. There is nothing democratic about one province imposing its laws on people or companies in other jurisdictions who have no voice in its elections.  

Yet the Supreme Court went even further in permitting undemocratic,

extraterritorial legislation. It declared that even if B.C.'s law applied to cigarettes sold or smoked entirely outside of British Columbia, or illnesses contracted outside the province, that it would be "irrelevant to the Act's validity" if the province subsequently paid the smoker's health expenses. Thus, the province can sue to recover health-care expenses for a smoker who smoked legally in the United States, contracted an illness there, and then moved to British Columbia.  

The Supreme Court's decision sets a terrible precedent for other industries. Tobacco is not the only substance which affects health-care costs. So do soft drinks, which drive up dental costs. Auto use pollutes the air, while heavy trucks erode roads and bridges. Under the logic of the Supreme Court's decision, Vermont could retroactively force automakers in Ontario and Michigan to pay it billions of dollars for pollution and road repair. The decision thus paves the way for other provinces and states to adopt a beggar-thy-neighbour policy of targeting each other's industries for exploitation.