The charter rights of refugee applicants are being violated by a process that marginalizes, prejudices and stereotypes them based on where they are from, the Federal Court ruled Thursday in another blow to the Conservative government's overhaul of the refugee system.

By denying applicants from designated countries of origin (DCO) the right to appeal when their claims are rejected, the government violates equality rights enshrined in the charter, Justice Keith Boswell said.

"The distinction drawn between the procedural advantage now accorded to non-DCO refugee claimants and the disadvantage suffered by DCO refugee claimants under (the policy) is discriminatory on its face," Boswell wrote.

"It also serves to further marginalize, prejudice, and stereotype refugee claimants from DCO countries which are generally considered safe and 'non-refugee producing."'

But Boswell stopped short of declaring the program unconstitutional, agreeing with the government that such a determination was beyond the scope of the case at hand.

The decision, however, will have the immediate effect of allowing refugee claimants from 42 countries the right to appeal if their claims are turned down.

Boswell refused the government's request to stay his ruling for 12 months, saying every day the policy is in force is a day that claimants are not equal before or under the law.

The Conservatives established the designated countries of origin program in 2012. The new policy was in response to what they said was a flood of applications from countries respecting human rights and offering state protection, so they shouldn't be sources of refugees.

So, countries that met certain criteria were declared safe, and refugee applicants from there now have their applications heard faster — in order for the government to deport failed claimants faster. They cannot apply for work permits, nor appeal if their applications are rejected.

Ruling gives refugees from 42 countries right to appeal

Three people had challenged the constitutionality of the policy: a gay man from Croatia fearing persecution as a Serb and because of his sexual orientation, and a gay couple from Hungary whose fear was based on their sexual orientation and the fact that one is also a national of Romania.

The refugee protection division had initially found their claims credible, but denied them all refugee status on the basis of their national origins — Croatia, Hungary and Romania are all considered safe countries.

Because of that, they could not appeal.

In the case, the government had argued the policy was not discriminatory because national origin was not the determining factor in deciding how a claim was to be handled.

"Rather, according to the respondents, claimants are subject to the DCO regime only because they come from parts of the world that are generally safe," Boswell noted in his judgement.

"Nationality is simply a proxy for the relative safety of the countries they are from."

The government further argued the program doesn't draw on stereotypes, but on "informed statistical generalizations followed by thorough reviews of the country conditions."

In its submissions, the government said the system was working as intended — the proportion of accepted claims was increasing because people seeking to abuse the system were being deterred from coming to Canada, while those genuinely in need of protection were having their claims approved by the refugee protection division, or RPD.

That doesn't justify it, Boswell wrote.

"As proficient as the RPD may be, there is no question that access to the (refugee appeal division) is a substantial benefit which is being denied to claimants from DCOs," he wrote.

Boswell's ruling comes as the Conservatives continue to appeal a separate Federal Court decision from 2012 that found denying refugee claimants from DCOs access to health care benefits was also a constitutional violation.

The government had no immediate comment Thursday on the new ruling.