Public and Constitutional Law 6847 M Instructor: Ghislaine Lanteigne, PhD Seminar Theme 12 To be reviewed the following week Theme 11: Trade and Commerce versus Theme 12: Property and Civil Rights Answer the following fact-based question: 1. The federal government is proposing to enact the Canada Insurance Act in order to implement a comprehensive Canadian national regime to regulate all aspects of contracts for insurance in Canada via a single regulator, the Canadian Insurance Commission. The proposed legislative scheme aims mainly to address: (1) professional competences required to trade in insurance, (2) the management of financial risks in insurance, (3) the regulation of the industry data collection across the country, and (4) consumer protection. 2. The proposed law is intended in part to address recent commercial transformations in the area of insurance. There are now interprovincial and international business elements in the sale of insurance linked to various trade and commercial activities across Canada. 3. The federal government is characterizing the proposed Canada Insurance Act as a matter of national importance with the goal of ensuring appropriate and consistent regulation of the sale of insurance across the nation. It has relied on industry experts who have called for legislation to promote a fair, efficient and competitive marketplace, in order to safeguard the integrity and stability of national trade and commercial activities. A section of the Federal act indicates that provinces would be invited to participate in the national regime on a voluntary basis. The federal government claims that the proposed law is within its power to regulate trade and commerce under 91(2) of the Constitution Act, 1867 4. The provinces claim that the proposed law would interfere with their power over insurance under s 92(13) of the Constitutional Act, 1867. Furthermore, recently a few provinces have joined forces with the plan to set up a similar national regulating body representing them in order to establish some standards applying to the insurance industry across all provinces. Analyze the constitutionality of the proposed Canada Insurance Act under s. 91(2) of the Constitution Act, 1867 versus s 92(13) of the Constitutional Act, 1867. - Issue: the issue here is whether the Canada Insurance Act falls under s.91(2) of CA 1867 or under s.92(13) of CA 1867. Rule: use the pith & substance doctrine and the case of Securities Act Reference Analysis: o The purpose of the act is to establish a national regime to regulate all aspects of contracts for insurance. o The goal of the act is to ensure appropriate and consistent regulations in the sale of insurance. o The act is aimed at providing a fair, efficient, and competitive marketplace. Public and Constitutional Law 6847 M Instructor: Ghislaine Lanteigne, PhD Seminar Theme 12 To be reviewed the following week - - The next step of the analysis is to identify under which head of power does the law fall under. In doing so, we must apply the Securities Reference case and use the 5 part test laid out by the court: o Is the law part of a general regulatory scheme: yes o Does the regulatory scheme operate under the oversight of an agency: yes (Canadian Insurance Commission) o Is the act concerned with trade in general rather than with a particular industry – no, the act seems to be only concerned with a particular industry (insurance) o Would the provinces be constitutionally capable of enacting such an act – yes the provinces could as it says in the facts that some provinces have joined forces to set up a similar national regulating body. o Would the failure to include one or more provinces or localities jeopardize the successful operation of the act – Yes, because the facts state that provinces have the option of opting into the regulatory commission. This would jeopardize the operation of the act. Conclusion: The Insurance act is ultra vires the federal government under its powers of general trade and commerce.
