In June 2016, a large group of carpet companies filed a lawsuit against the province and the federal government over the federal-provincial agreement to allow the carpet industry to continue operating in Ontario.
The province said at the time the agreement was in place, and the companies argue that by allowing the carpeting industry to operate, the province is violating their rights.
The carpet industry has also been lobbying to have the provincial agreement renewed, saying it will allow the industry to remain in business and continue to expand its business in Ontario, but the federal Liberal government has said that the agreement is not a benefit to the carpet companies.
The suit was brought by the Canadian carpet industry and three other companies, alleging that the provincial government’s blanket declaration of the carpet industries right to operate was unconstitutional.
The companies said they had no legal authority to enter into the agreement and that it violated the constitutional rights of the three companies.
In a court filing last month, the federal and provincial governments agreed to a settlement in the suit.
Ontario’s minister of labour, Chris Ballard, says the federal deal was never meant to be an advantage to the industry.
“The carpet companies had every reason to believe that the federal agreement would allow them to continue their operations and continue expanding their operations,” he said.
The federal government has maintained that the carpet agreement was never intended to benefit the carpet and that the rug industry, which had not yet been created, was not affected.