Two-year-old Geo Mounsef was pinned to a wall in the crash last weekend and later died in hospital.
The boy's mother stormed out of the courtroom Friday while the judge was still reading her decision. The child's father then followed, shouting and swearing at the accused, who appeared on a video screen.
"Rot in hell," George Mounsef shouted at Richard Suter. "You're a disgrace to your family!"
Provincial court Judge Janet Dixon paused during the outburst and stumbled briefly over her words, but continued despite two more disruptions from the angry crowd.
Several sheriffs and police officers were on hand to escort people from the courtroom.
The judge ordered Richard Suter, 62, released on $1,000 bail on the condition he stay away from alcohol when he is released. His driver's licence was also suspended by police at the time of the crash.
Details of what was presented at the bail hearing and the judge's reasons are covered under a publication ban.
"The fact that this man goes home to the comforts of home, while my son lays cold in a funeral home, is apparently what's called justice in this country," mother Sage Morin told reporters outside court, clutching a framed photo of her boy.
A family member beat on an aboriginal drum outside the courthouse, singing a Cree song about carrying on.
"The loss of our little Geo has struck us deep in our hearts," Morin said. "Our lives will never be the same and the healing from this horrible tragedy will take a long, long time."
Police allege Suter was in his vehicle, stopped outside Ric's Grill on Edmonton's south side, when he shifted into drive instead of reverse.
Geo's parents were also injured, but his five-month-old brother was unharmed.
Suter faces charges of impaired driving causing death, impaired driving causing bodily harm and refusing to give a breath sample. He next appears in court June 28.
Outside court, defence lawyer Dino Bottos said he fears for his client's safety because of public outrage over the case.
At an earlier court appearance, the child's mother lashed out at one of the lawyer's assistants in a hallway. Morin created a Facebook page, called Justice for Geo. It includes many rants against the accused driver.
Bottos said it's understandable the family is angry and inconsolable.
"But the public has to realize a bail application is not a trial," he said outside.
Bottos said he plans to prove his client was not drunk at the time of the crash.
"I suggest this was a mistake and the real issue at trial will be is this a mistake of a criminal nature or a mistake of a civil nature?"
He described his client as a retired businessman and grandfather with no criminal record, "a decent man who is grief-stricken himself by what's occurred here."
A funeral for the boy is to be held Wednesday.
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