Federalism
Spring 2007
Case Summaries
Professor Liz Edinger
Jennifer Lau
THE ORIGINAL CONSTITUTIONAL FRAMEWORK: JUSTICIABLE & INTERPRETATIVE
PRINCIPLES ............................................................................................................................................................... 2
Reference Re: Secession of Quebec (1998) SCC ................................................................................................... 2
Imperial Tobacco v BC (2005) SCC ...................................................................................................................... 3
VALIDITY.................................................................................................................................................................... 3
S.91, OPENING WORDS: PEACE, ORDER AND GOOD GOVERNMENT ........................................................................ 3
Russell v The Queen (1887) PC ............................................................................................................................ 3
AG Ontario v. AG Canada (Local Prohibition Case) (1896) PC .......................................................................... 4
EMERGENCY BRANCH DOCTRINE .......................................................................................................................... 4
Fort Frances Pulp & Paper Co. v. Manitoba Free Press (1923) PC .................................................................... 4
Reference Re Anti-Inflation Act (1976) SCC ......................................................................................................... 5
NATIONAL CONCERNS BRANCH .............................................................................................................................. 6
AG Ontario v Canada Temperance Federation (1946) PC ................................................................................... 6
R v. Hauser (1979) SCC ........................................................................................................................................ 6
R v. Crown Zellerbach (1988) SCC ....................................................................................................................... 7
CRIMINAL LAW POWER: SHIELD AND SWORD ........................................................................................................ 7
Reference Re Dairy Industry Act (1949) SCC (The Margarine Reference) .......................................................... 7
FEDERAL LEGISLATION ............................................................................................................................................. 8
RJR MacDonald Inc. v. Canada (AG) (1995) SCC ............................................................................................... 8
R v. Hydro Quebec (1997) SCC ............................................................................................................................ 8
R v. Malmo-Levine (2003) SCC ............................................................................................................................ 9
PROVINCIAL LEGISLATION ..................................................................................................................................... 10
Re Nova Scotia Board of Censors v. McNeil (1978) SCC ................................................................................... 10
AG Canada v. Dupond (1978) SCC .................................................................................................................... 10
Rio Hotel v. Liquor Licensing Board (1987) SCC ............................................................................................... 10
R v. Morgentaler (1993) SCC .............................................................................................................................. 11
Siemens v. Manitoba (2003) SCC ........................................................................................................................ 12
INVESTIGATORY POWERS ....................................................................................................................................... 13
Consortium Developments (Clearwater) Ltd. v. Sarnia (City) (1999) SCC ........................................................ 13
REGULATION OF THE ECONOMY ............................................................................................................................ 13
Citizens Insurance v. Parsons (1881) PC ............................................................................................................ 13
R v. Eastern Terminal Elevators (1925) SCC...................................................................................................... 14
Carnation v. Quebec Agricultural Board (1968) SCC ........................................................................................ 14
Burns Foods v AG Manitoba (1974) SCC ........................................................................................................... 15
Labatt Breweries Ltd. v. AG Canada (1980) SCC............................................................................................... 15
City National Leasing v. General Motors of Canada (1989) SCC ...................................................................... 16
ANCILLARY DOCTRINE ............................................................................................................................................. 16
EXTRATERRITORIALITY: VALIDITY AND APPLICABILITY .................................................................................... 17
Royal Bank v The King (1913) PC ...................................................................................................................... 17
Churchill Falls (Labrador) Inc. v. AG Newfoundland (1984) SCC .................................................................... 17
Global Securities Corp. v. BC (Securities Commission) (2000) SCC ................................................................. 18
Hunt v. T&N PLC (1993) SCC ............................................................................................................................ 18
Unifund v. ICBC (2003) SCC .............................................................................................................................. 19
British Columbia v Imperial Tobacco (2005) SCC ............................................................................................. 20
Castillo v. Castillo (2005) SCC ........................................................................................................................... 21
TAXING AND SPENDING POWERS: VALIDITY AND APPLICABILITY....................................................................... 21
PROVINCIAL TAXATION ........................................................................................................................................... 21
Bank of Toronto v. Lambe (1887) PC ................................................................................................................. 21
Canadian Industrial Gas & Oil v. Saskatchewan (1978) SCC ............................................................................ 21
The Queen in Right of Manitoba v. Air Canada (1980) SCC .............................................................................. 22
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Allard Contractors v. Coquitlam (1993) SCC ..................................................................................................... 22
Re Eurig Estate (1998) SCC ................................................................................................................................ 23
Union of New Brunswick Indians v. NB (Minister of Finance) (1998) SCC ....................................................... 23
Westbank First Nation v. BC (1999) SCC ........................................................................................................... 24
FEDERAL TAXATION .................................................................................................................................................. 25
Winterhaven Stables v. AG Canada (1988) ACA ................................................................................................ 25
Re Canada Assistance Plan Act (1991) SCC ....................................................................................................... 25
APPLICABILITY: INTER-JURISDICTIONAL IMMUNITY ............................................................................ 26
John Deere Plow Co. v. Wharton (1915) PC ...................................................................................................... 26
Ontario (AG) v. Winner (1954) PC ..................................................................................................................... 26
Capital Cities Communications Inc. v. CRTC (1978) SCC ................................................................................. 27
Quebec (AG) v. Kellogg’s Co. of Canada (1978) SCC ....................................................................................... 27
Irwin Toy v. Quebec (AG) (1989) SCC ............................................................................................................... 28
Quebec v. Construction Montcalm (1979) SCC .................................................................................................. 28
Westcoast Energy Inc. v. Canada (National Energy Board) (1998) SCC ........................................................... 29
Commission du Salaire Minimum v. Bell Telephone Co. of Canada (1966) SCC ............................................... 29
Commission de la Sante et del law Securite du Travail v. Bell Canada (1998) SCC .......................................... 29
NEW IJI DOCTRINE ..................................................................................................................................................... 29
Ordon Estate v. Grail (1998) SCC ...................................................................................................................... 30
Kitkatla Band v. BC (2002) SCC ......................................................................................................................... 30
OPERABILITY.......................................................................................................................................................... 31
Multiple Access v. McCutcheon (1982) SCC....................................................................................................... 31
Husky Oil Operations v. MNR (1995) SCC ......................................................................................................... 31
Law Society of BC v. Mangat (2002) SCC .......................................................................................................... 32
Rothmans, Benson & Hedges v. Saskatchewan (2005) SCC ............................................................................... 32
The Original Constitutional Framework: Justiciable & Interpretative Principles
Reference Re: Secession of Quebec (1998) SCC
F: After the failed referendum in Quebec, Parliament referred the matter to the court to determine if
Quebec could unilaterally secede from Canada
I: Could they unilaterally secede under Constitution or Int'l Law?
H: No. Court found if there is a clear answer to a clear question in a referendum then there will be a
constitutional obligation of other provinces to enter into principled negotiation with Quebec
R:
 Unwritten Constitutional Principles: The Constitution is primarily a written one, but behind the
written word is an historical lineage which aids in the consideration of the underlying
constitutional principles – these principles inform and sustain the constitutional text - they are the
vital unstated assumptions upon which the text is based.
 SCC identifies four foundational constitutional principles (not an exhaustive list); democracy,
federalism, rule of law and constitutionalism, and protection of minority rights
 These defining principles operate in symbiosis – no single principle can be defined in isolation
from the others, nor does any one principle trump or exclude the operation of any other - these
principles need to be balanced with one another
 These (and other) underlying constitutional principles may in certain circumstances give rise to
substantial legal obligations which constitute substantive limitations upon government action
 In the process of constitutional adjudication, the court may have regard to unwritten postulates
which form the very foundation of the Constitution of Canada
 Unwritten principles found by the court may be justiciable; may have normative force
 “Federalism” may be a justiciable principle in and of itself, as well as others which haven't been defined yet
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
one can always use these principles as argument or values to assist court in statutory
interpretation, but sometimes they become justiciable in and of themselves
Imperial Tobacco v BC (2005) SCC
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Counsel relied on the “rule of law” and “judicial independence” as justiciable principles; argued
that the statute tipped the balance in favour of the government and made it easier for them to
succeed; SCC decided Act was valid and did not infringe judicial independence and rule of law
Court declined to extend judicial independence any further;
Court also discussed the spectrum of meanings of “rule of law” but said they would not go beyond
the express written provisions of the Constitution
[people thought this was the SCC going back to only dealing with written principles]
NB: But then MacLachlin gave a speech in NZ: "obligation of judges to look for unwritten
principles; there is something beyond the written constitution that only judges can find"
VALIDITY
s.91, opening words: Peace, Order and Good Government
Russell v The Queen (1887) PC
F: R convicted under s.99 of the Canada Temperance Act for unlawfully selling intoxicating liquors; this
was local option legislation; in order to get the benefit of the statute, a district would petition the GG;
needed 25% of the population on the petition; then you would need a simple majority in a referendum to
invoke the Act; R argued Canada had no power to enact the Act; argued that the subject matter was in
relation to s.92(9), (13), (16)
NB: Gov't not represented in this case b/c private prosecution; last time this happened in a JCPC case
I: Did Parliament have jurisdiction to enact the Canada Temperance Act?
H: Yes.
R: When attacking legislation, you have to argue that the pith and substance of the statute is legislation in
relation to a specific head of power.
 s.92(9) – did not apply because the purpose was not for the raising of revenue for province
 s.92(13) – PC viewed this legislation as criminal law, and not in relation to property or civil
rights; incidental interference with property does not alter the character of the law
o Merely incidental affect on the other governments’ head of power not problematic
 s.92(16) – R argued the sale of liquor was local - PC says just b/c law must be locally adopted does not
convert the legislation into that in relation to a merely local matter; the object and scope of the
legislation is still general; the Act is meant to remedy an evil seen as being throughout the dominion
o if the matter is National, it falls under POGG
General Theory of POGG: PC held that if the subject matter of the Act does not fall within the scope of
s.92, then unnecessary to consider specific s.91 heads of power b/c it automatically falls under POGG;
 this shows PC operating on conception that if a problem is nationally distributed, Parliament can
legislate on it under POGG
 This theory of POGG would mean provinces have very limited powers
 POGG treated as if the list in s.91 is irrelevant – if its not in s.92, its POGG
 treats POGG like a residual clause
 NOTE: NOT GOOD LAW ANYMORE (Russell was high point for POGG)
Since Russell, the courts have re-interpreted POGG (without completely overruling Russell)
 Russell interpretation totally inconsistent with federalism principle b/c it leaves nothing for the
provinces – almost anything can be of “national concern”.
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AG Ontario v. AG Canada (Local Prohibition Case) (1896) PC
F: Reference by AG Canada on 7 questions. 7th question dealt with actual legislation [the others were
general; this makes it much harder for the SCC to answer]; before confederation, each colony was a
unitary state with plenary powers; Ontario colony had legislation similar to the Canada Temperance Act
(see Russell). Ontario wanted to restore jurisdiction to the municipalities; re-enacted a pre-confederation
provision which empowered municipalities to make by-laws preventing the manufacture and sale of liquor
provided the by-law was approved by the population [local option legislation]; this was almost identical to
the Canada Temperance Act.
I: Did the provinces have legislative jurisdiction to enact An Act to Improve the Liquor License Acts?
H: Yes
R: Functional approach to DOP: if a subject matter is broadly defined, it can have provincial and federal
aspects (double aspect doctrine); if this happens, paramountcy is an issue;
 Alcohol is a double aspect matter
Did not overturn Russell, but does say that the court always has to be able to identify the source of
constitutional authority for legislation [finds Russell binds JCPA, but would have decided it differently]
 Not willing to subscribe to the national distribution of POGG used in Russell
 Exercise of legislative power by Parliament, in regard to all matters not coming under s.91, ought
to be strictly confined to such matters as are unquestionably of Canadian interest and importance
and ought not to trench upon provincial legislation with respect to subjects of s.92
 This is the source of the national concerns branch; just b/c something occurs throughout
Canada does not make it POGG – has to be of “particular Canadian interest and importance”
 Things of a local nature can evolve into things of sufficient national concern
Russell said everything not in s.92 is POGG; Local Prohibition Case changes this rule
 Residual Theory of POGG: the court must allocate legislation to specific heads of power;
 s.92(16) and POGG are residual clauses, but you can only use them if the subject matter does not
fit within a specific head of power
 must be of “national concern” to fall under POGG; this significantly narrows s.91
EMERGENCY BRANCH DOCTRINE
Fort Frances Pulp & Paper Co. v. Manitoba Free Press (1923) PC
F: During WWI, the Federal Cabinet, under authority of the War Measures Act, regulated the cost of
paper and set limits on what prices could be charged for it; in 1920, the Paper Control Commissioner
made an order retroactive to 1919 setting price for paper; MFP had purchased paper at market price
(which was more) in 1919 and therefore wanted to be paid back the excess that they paid; WMA is
constantly in force, but not consistently used; Federal Executive could make a proclamation that war
existed and then they had power to pass regulations on virtually any subject; MFP's argument was that the
order-in-council was invalid b/c it did not occur at a time of war –war ended in 1918; order was in 1920
I: Was this order-in-council valid? Was this valid emergency legislation?
H: Yes, could not be said the gov't unreasonably thought the crisis was still on, even though the legislation
was passed after the fighting was over; in many cases, effects of war continue past end of fighting
R: Creates Emergency Branch of POGG Power
 In normal circumstances, Parliament could not have legislated so as to set up the machinery of
control over the paper manufacturers, b/c it is a matter of property and civil rights
 But it does not follow that in times of emergency, the Parliament cannot act under other powers
which may be implied in the constitution;
 In the event of war, when the national life may require for its preservation the employment of
very exceptional means, the POGG power may provide for action in such emergency,
regardless of the fact provinces normally have the jurisdiction;
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
Deference to Parliament: Question as to the extent to which theses measures must be maintained
is one which the court is loath to enter – central government can decide best; in order for a court
to interfere, there needs to be very clear evidence that the crisis has wholly passed away;
 PC agrees there is room for judicial review of the continuation of the emergency; there will be
great deference to the government but there is a point when the emergency will end
 authority is for federal executive to deal with emergency as long as it lasts; very clear
evidence required to justify to court that the emergency is over (probably BARD)
 this means legislation that has the possibility of becoming invalid by the passage of time b/c its
contingent on original and continued existence of the emergency
Reference Re Anti-Inflation Act (1976) SCC
F: Reference asking whether the federal Anti-Inflation Act is ultra vires Parliament; deals with wage and
price controls to control inflation; controls are not imposed uniformly across Canada in all businesses,
sectors, etc. but rather are applied selectively; applied to the federal sector [public (public service) and
private (entities which engage in business in federal jurisdictions)] and the provincial private sector [only
businesses of a certain size]; the provincial public sector not included but they were allowed to opt in; the
federal government justified it on the grounds it was emergency legislation – framed as temporary
legislation; but the preamble said inflation had become a matter of serious national concern
I: Was the legislation ultra vires Parliament?
H: No. Majority [Laskin] held that inflation was an emergency.
R: Laskin judgment dismissed nowadays, but some important points; the Betz judgment (dissent) most
influential and people assume this judgment must be followed to invoke emergency branch of POGG
 This is b/c using the emergency power is draconian; sets the bar high
 Everyone agrees that the emergency branch exists and that it is not limited to wartime;
 Everyone agrees that the existence of an emergency is subject to judicial review
 Can challenge the legislation on the fact there is no emergency
 Deference to emergency legislation
o where existence of emergency is not evident, extrinsic evidence required to show only a
rational basis for believing there is an emergency, but emergency need not be proven fact
Beetz (Dissent) - Extraordinary nature of emergency legislation indicates manner and form in which legislation
should be implemented;
 Parliament should only have access to the emergency power in the most explicit terms, which
state that it is invoking this power; must be expressed somehow this is a response to an emergency
 Parliament must believe there is an emergency and there must be extrinsic evidence that shows a
rational basis for believing it
 Temporary legislation form alone is not sufficient b/c this can be extended;
No indication Parliament thought Inflation was an emergency; therefore not emergency legislation.
Nor does Inflation fall under National Concerns Branch
 “The containment and reduction of inflation” does not pass muster as a new subject matter for POGG
 Inflation is not a new matter
o Subsequent courts have taken this seriously; cannot just slap a label on something and say
its new b/c its not in the Constitution; can be a composite of old matters already covered
 "Inflation" lacks specificity; its application as a new subject matter would render provincial power obsolete
 The matter has to have a degree of unity that makes it indivisible; can’t use a label that will allow
it to fall under provincial jurisdiction
o once a matter is seen as national concern, its permanently federal; therefore the subject
matter must be specific, b/c if its too general provincial power is obsolete
o Be careful about what is characterized as a matter of national concern – the key is the
characterization of subject matter of statute – not to big (too general) and not to small (not
of national concern)
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NATIONAL CONCERNS BRANCH
AG Ontario v Canada Temperance Federation (1946) PC
F: Reference by Ontario asking if Canada Temperance Act, 1927 was valid as being within the competence of
Parliament; argued that Russell was wrongly decided and that new Temperance Act was invalid, even though it
identical to the old one, b/c it was not enacted in a time when it was needed [i.e. no emergency]
I: Was the Act valid?
H: Yes
R: PC found that so much time had passed, and so many cases regarding this Act had passed, that Russell
made it the law that this Act was valid [the longer you leave the challenge, the less enthusiastic the court
will be in striking the legislation down; prefer to strike it down before many people are affected]
 Russell must be regarded as firmly embedded in Cdn constitutional law  impossible to now depart from it;
 Once it has been decided that the original CTA was valid, it follows that an Act which replaces it
and consolidates the amendments must be equally valid
PC points out that the BNA does not mention emergency powers and that nothing in Russell indicated that
the PC thought there was an emergency in allowing this statute as valid;
PC finds that there is only one test for POGG - The test for validity must be found in the subject matter
of the legislation – if it is such that it goes beyond local or provincial concern or interests and must
from its inherent nature be the concern of the dominion as a whole, then it will fall as a matter
affecting POGG [war, pestilence would be examples];
 Aspect doctrine – there must be a matter of national concern for POGG to apply
o can have a subject matter that has a national aspect, but that does not mean there is also
not an aspect within the province
o In this case, federal act not the same as provincial act
An emergency may be occasion which calls for the legislation, but it is the nature of the legislation itself,
and not the existence of the emergency, that must determine validity; BNA nowhere gives power to
dominion Parliament to legislate in matters which are provincial matters just b/c there is an emergency;
 despite this comment, the emergency doctrine is still a separate branch today
R v. Hauser (1979) SCC
F: H charged with conspiracy to commit acts against NCA; nobody was asserting NCA was beyond
federal jurisdiction, but the issue for the court was which head of power in s.91 did Parliament use when it
enacted the NCA
Background: NCA should've been upheld under s.91(27) had it not been for the controversy over which
level of gov't had the authority to prosecute under s.91(27). Because federal power to prosecute under
POGG was clearer, the SCC moved the NCA under POGG. But now it's clear that the feds can prosecute
s.91(27) offences, so Hauser should be re-argued.
I: Did NCA depend on s.91(27)?
H: No. NCA depends on POGG National Concerns Branch b/c it is a new subject matter; drugs held to
be a genuinely new subject; seen as legislation adopted to deal with a new problem that did not exist
at confederation and is not a matter of a local or private nature
Problems:
 Didn’t drug use occur at confederation?
 NCA looked like criminal law in form; there was a prohibition and a penalty;
R: The fact that a matter was known to exist in 1867 does not preclude you from arguing that circumstances have
changed such that this previously-local matter is now a genuinely new matter and one of national concern;
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R v. Crown Zellerbach (1988) SCC
F: Accused charged under s.4(1) of the Ocean Dumping Control Act which prohibits dumping of any
substances at sea except in accordance with the terms and conditions of a permit; definition of sea
included inland waters of the province; C had a permit to dump wood waste; they end up dredging some
wood waste and take it 80 feet towards the sea to dump it; they did not dump it where they were supposed
to and so they violated their license; there was no evidence that wood waste is harmful to marine life or
that it endangered shipping [if it had, feds would have had jurisdiction under fisheries or shipping]; the
area in question was Beaver Cove, which is part of BC; under the CL, BC ends at the low tide mark and
Canada owns the sea from this point until a certain point; when there is anything but a straight coastline,
there need to be modifications to the low tide line; under the modifications the whole cove is BC property;
“within the jaws of the land”; this same modification sometimes applies to islands, meaning the sea
between the islands and the mainland is owned by BC; but the court has to decide on the facts of the
geography of each case who owns the sea bed – it is not a generalization; in this case, C dumped in BC;
the issue was whether the federal government could legislate to prohibit activities within BC waters
I: Is the act ultra vires?
H: No. Act's PAS characterized as "Marine Pollution". Marine pollution has the requisite singleness,
distinctiveness, and indivisibility b/c of the practical difficulty of the people being regulated knowing
where federal territory ends and provincial begins; the matter is indivisible b/c you can’t have a practical
division.
R: National Concern doctrine is separate and distinct from Emergency doctrine of POGG
 Emergency Branch provides a basis for what is necessarily legislation of a temporary nature
 National concern doctrine applies to both new matters and to which matters, although originally
of a local or private nature in a province, have since, in the absence of a national emergency,
become matters of a national concern
 this shows how the “GAP” branch is part of national concern; you can have something either
totally new, or something that was local and private, both of which can develop into a matter of
national concern
SDI: For a matter to qualify as national concern in either sense it must have a (1) singleness,
distinctiveness, and indivisibility that clearly distinguishes it from matters of provincial concern and (2) a
scale of impact on provincial jurisdiction that is reconcilable with the fundamental distribution of
legislative power under the Constitution
 National Concerns can’t be so broad as to take away the powers of the province
 Big issues like general environmental protection, and the economy could never fall under POGG
Provincial Inability Test: In determining when a matter has attained the required degree of singleness,
distinctiveness and indivisibility, it is relevant to consider what would be the effect on extra-provincial
interests of a provincial failure to deal effectively with the control or regulation of the intra-provincial
aspects of the matter
 i.e. if matter was in provincial jurisdiction and failure of a province to legislate caused problems
NB: Leading case on national concern branch of POGG
NB: Note the similarities with GM Canada case under Trade and Commerce
Criminal Law Power: Shield and Sword
Reference Re Dairy Industry Act (1949) SCC (The Margarine Reference)
F: Prohibition on the sale of margarine; assumption was that it was dangerous to health; in 1949, not seen
as dangerous anymore. Margarine producers argued that underlying public purpose not present anymore.
I: Was the act valid criminal law under s.91(27)?
H: No b/c no valid public purpose anymore - Act only around to protect dairy industry
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R: Criminal Law Power under s.91(27) requires prohibition coupled with a penalty, and a valid public
purpose: “Is the prohibition enacted with a view to a public purpose which can support it as being in
relation to criminal law [i.e. public peace, order, security, health, morality]?
 Legislation might become invalid if underlying purpose does not exist anymore (cf. emergency
legislation which does not exist where there is no more emergency)
NB: Definitions and application of "valid public purpose" have expanded in s.91(27) since this case
 Morgentaler (1975) – M argued abortion should no longer be an offence b/c it was no longer
dangerous to the mother; SCC decided it could still be criminal b/c the prohibition of socially
undesirable conduct is a valid public purpose
 SCC has also said the prevention of crime is a valid public purpose
FEDERAL LEGISLATION
RJR MacDonald Inc. v. Canada (AG) (1995) SCC
F: Federal Tobacco Products Control Act, s.3 states that the purpose and object of the act was to "protect
the health of Canadians"; statute contained some prohibitory and some regulatory provisions dealing with
advertising, promotion, and labelling of tobacco products; various exemptions as well as a range of
penalties. It is not the use, possession, or production of tobacco that is criminalized
I: Was this valid criminal law?
H: Yes. Upheld under s.91(27), not POGG. Valid public purpose is protection of health from tobacco
consumption.
R: LaForest emphasizes the plenary nature of criminal law and how broad it is defined;
 criminal law is not frozen or fixed
 There must be a prohibition and a penalty coupled with underlying public purpose
 Health is double aspect  has both provincial and federal aspects;
 Parliament can legislate in relation to health for its protection using the criminal law
o Extrinsic evidence admissible to show dangers of smoking
 Colourability: Just b/c Parliament states what the object and purpose of a statute is, does not
mean the court accepts that as the intent or purpose; this is where ulterior motive comes in;
 The only limitation on criminal law, other than req'ts of form, is colourability: Parliament
cannot simply by legislating in the proper form, invade areas of exclusive provincial
jurisdiction
 Must ensure there is a valid public criminal law purpose
 The true object, nature, scope of statute must not be something in provincial jurisdiction
 Lack of absolute prohibitions is not determinative of invalidity - government can be selective
in what it criminalizes
o i.e. abortions
 No reason why innocent conduct cannot be criminalized; what is innocent today may be
criminal tomorrow (e.g. new health hazards are discovered)
 Parliament can criminalize ancillary activity (i.e. advertising) even if the central activity is
innocent (i.e. smoking)
 the precedent for this was prostitution and suicide;
 The severity of the penalty is taken into account when determining if its valid criminal law
NB: This case set the bar low for Parliament; Act looked more regulatory than criminal
R v. Hydro Quebec (1997) SCC
F: This concerned the federal Environmental Protection Act; massive, complex statute; contains very
broad definitions of the environment and what harms it; part of the statute deals with a list of toxic
substances; s.34 authorizes Cabinet on recommendation of Ministers of Health & Environment to make
regulations with respect to a substance listed including regulations providing for the quantity,
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manufacturing, and conditions in which they can be released; s.35 dealt with situations in which a
substance had not yet made the list [like an emergency section]; where it's not specified under the list and
the Minister believes that immediate action is required to deal with its effects, the Minister of
Health/Environment can make an interim order dealing with the substance and has full range of regulatory
jurisdiction set out in s.34; the Ministers made an emergency interim order: a prohibition on releasing
more than 1 gram of PCB’s into the air was challenged by H who had breached it; argues legislation
ultra vires
I: Was this valid criminal law?
H: Yes. Prohibition upheld under s.91(27) rather than POGG (too broad to be of National Concern w/o
imposing on provinces) - criminal law power much more easily contained & consistent w/ federal principle.
R: s.91(27) prohibits specific activities, but POGG gives exclusive federal jurisdiction over a subject
matter. POGG would upset federal principle – the balance of legislative jurisdiction
 Environmental protection added to the list of valid public purposes (on its own; not just its
connection with human health)
 Within discretion of Parliament to determine what evil it intends to suppress; the criminal law
power is an open-ended power
 Parliament has discretion to determine the extent of blameworthiness to attach to an individual
committing a crime (subject to s.7).
The only limitation (besides the Charter) is colourability
 Edinger thinks this legislation was colourable; feds had wanted control over the environment and
used criminal law to achieve this purpose
 When an allegation of colourability is made, extrinsic evidence always made available
o What was said in legislature; study papers, history of the legislation, corporate intent
o Makes it clear what the government was really trying to do
o Sometimes the purpose of the legislation on its face is not the same as what was said in
Parliament and what the corporate intent was
The majority may be carrying criminal law too far; looks like a mainly regulatory statute
 shows you can play around with form a bit; does not have to be a clear prohibition, but its still
best to have a clear one
Dissent agrees that the public purpose is valid, but they say form is more regulatory than prohibitory;
 determining when the legislature has crossed the line from regulatory to prohibitory is an art, not a
science; there is no test; there is a continuum between absolute prohibition and absolute regulation
 when legislation has prohibitions and penalties, this looks like criminal law
 dissent cannot find a prohibition; you can’t have a prohibition w/o an exemption
 the most telling objection to it being criminal is that there is no offence in the statute unless an
administrative agency intervenes;
o s.34/35 do not create an offence; what is considered toxic is determined on an ongoing
basis; it would be an odd crime where what the crime is depends on the discretion of the
executive; seems to be against the rule of law
 dissent says its highly unlikely that Parliament intended to leave criminal law to the discretion of
Ministers; constitutionally, the crime should be created by the legislature in a statute, not by the
executive in a regulation;
 there is also a provision that says that GIC may exempt provinces who have identical legislation
o how can provinces have identical criminal law legislation if they can't make criminal law?
R v. Malmo-Levine (2003) SCC
F: M charged with possession of marijuana; challenged whether it was criminal law or not.
I: Was it valid criminal law?
H: Yes
R:
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"Protection of vulnerable groups from self-inflicted harm" added to list of valid public purposes
o health of the user and the health of society
Parliament can legislate under s.91(27) as long as there is a reasonable apprehension of harm
Parliament free to determine the degree of harm necessary for criminalization
PROVINCIAL LEGISLATION
Re Nova Scotia Board of Censors v. McNeil (1978) SCC
F: NS enacted Theatres and Amusements Act; created board to regulate and control the film industry;
including the showing of certain films; M wanted to see a prohibited film; M attempted to use criminal
law as a sword to strike down the legislation; argued the province was trying to regulate public morality,
which was a criminal law purpose.
I: Was this legislation valid under provincial authority?
H: Yes, valid under s.92 as it is in relation to the regulation of local business licensing.
R: Great victory for provinces. Preventative legislation in relation to local morality allowed - prevents
people's morals from being undermined.
AG Canada v. Dupond (1978) SCC
F: D challenged constitutional validity of Montreal by-law which allowed executive to take measures, by
ordinance, to prevent or suppress danger by prohibiting for a certain period of time on the public domain
any assemblies, parades, or gatherings; executive passed ordinance the day after the Act was enacted; D
did not breach the ordinance, but challenged the by-law; D argued provision is in relation to criminal law
& therefore ultra vires city & province; argued it was similar to CC provisions & police were asking for it.
I: Is the by-law ultra vires?
H: No. By-law was preventative, not punitive. Even though s.5 ordinance was regulatory, the governing
by-law was preventative.
R: Provinces can prevent conditions likely to cause crime.
 Prevention is a double aspect matter, so provinces must localize preventative laws
 Geographical distribution of the problem may be relevant; even if its prohibitory, a local nature
may make it okay for the provinces
 Provinces may complement the CC in double-aspect matters, but cannot supplement the CC
Rio Hotel v. Liquor Licensing Board (1987) SCC
F: Under the Liquor Control Act, the province of NB established a liquor license board which has duty to
issue, refuse, cancel, or suspend liquor licenses; in 1983, Act was amended to provide additional licensing
requirements; s.63.01(5) provided that the board could attach conditions to a license issued under s.63.01
and in doing say can regulate and restrict the nature and conduct of live entertainment and may prohibit
specific kinds of live entertainment; a license was granted to R which restricted live nude
entertainment; the appellant contends that this condition relates to public morality and therefore falls
within the exclusive jurisdiction of Parliament under the criminal law power; this was NB’s 2nd try with
this type of legislation; the NBCA had struck down a previous version which had a condition
attached that copied the language of the CC; NBCA said it was criminal law. This time, they used
different language. R argued the new legislation was colourable; that they only changed the words and not
the purpose.
I: Was the legislation ultra vires?
H: No.
Rule: Licensing with conditions is almost a sure fire way for provinces to control something as long as the
licensing aspect is within jurisdiction
Estey – focuses on fact that these conditions are attached to a valid licensing system
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where a program is founded on a licensing system with regulations and conditions related to the
provision of licenses, and where the province does not purport to establish an offence criminal in
nature, it is constitutionally legitimate  must be a valid provincial program
 However the court will still focus on other things;
o The longer the penalty, and the closer the terminology comes to describing conduct
traditionally criminal, the more doubtful the validity of the provincial enactment;
 Longer penalty – how severe is too severe?
 Describing conduct traditionally criminal – do not copy from the code
 Traditionally criminal – the court has an idea that some kinds of conduct, no
matter what, are so traditionally criminal that the provinces cannot play with them
 e.g. obscenity, morality, indecency; covered by CC for so long that they
are in the domain of the CC
 Marketing, not Morality: The court also focuses on nude entertainment as a marketing tool;
regulating it to keep the playing field level; this makes it fair game for provinces to legislate in
relation to local business; takes it away from the arena of obscenity, morality, etc.
 Focus on an entity other than CC accused: Not the entertainers who are being regulated, but
their employer; in the CC, the entertainer would be covered; here, they focus on the employer
Dickson – same result, but different route; buys the entertainment as a marketing tool argument;
 Gets Double Aspect doctrine wrong: seems to say that there is a double aspect to the legislation;
but in reality, matters have double aspects, not statutes
In this case, NB got away with prohibiting nude entertainment by calling it that, and not morality.
R v. Morgentaler (1993) SCC
F: After abortions were taken out of the Criminal Code, M decides to open a private free-standing
abortion clinic in NS. In response, NS passes Medical Services Act and regulations which stated that
certain services, including abortion, could only be performed in hospitals. The Act stated that the
purpose of the Act was to prohibit privatization of the provisions of certain medical services in order to
maintain a single high-quality health care system; M argued that the true purpose of the Act was to
suppress abortions as criminal, and therefore the legislation was ultra vires the province
I: Was the Act ultra vires the province b/c it was criminal?
H: Yes. Colourable attempt to prevent abortions, which was traditionally criminal.
R: The court decided the true pith and substance from the chronology of events:
 1988, CC provision struck down; in Jan/89, M rumoured to be setting up abortion clinic in Halifax
 March, 1989 – NS passed regulations under the Health Act which prohibited performing of
abortions outside hospitals; denied insurance coverage for abortions outside hospitals
 June, 1989 – NS regularizes the regulations; creates new act
Stated purpose was to prohibit privatization to maintain the public health care system, and s.6 made
person guilty of an offence liable to summary conviction
 looked like valid s.92(15)
 But no evidence to support NS's stated objectives
 All extrinsic evidence supported argument that Act was clearly intended to replace CC provisions
and was ad homenim legislation aimed at M
o Speed at which the legislation was passed
o Stated purposes do not bind the court; they can be irrelevant
Divides "Effect" portion of Pith & Substance Analysis into (1) Legal and (2) Practical Effect
 legal – look at terms of the statute having no regard into the context in which it operates
 practical – actual or predicted results of the operation of the legislation [courts can ignore this]
o e.g. if no hospital is willing or able to perform an abortion, then limiting them to hospitals
is basically an outright ban
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NB: Even if NS had enacted these provisions in 1986, they still would have been found invalid after the
CC provisions were abolished; even though it would appear this would just be regulating the medical
profession in line with criminal law (complementary), it seems as if there are some places the provinces
just can’t go at all (i.e. abortion); no matter how provinces play around with the mode and form, court
can still say they are colouring the legislation and that they know what the provinces are really trying to do
Siemens v. Manitoba (2003) SCC
F: Manitoba enacted local option legislation enabling municipalities to hold binding plebiscites on the
prohibition of VLT’s; The Manitoba Lottery Commission was responsible for operating lottery schemes;
VLT remains the property of MLC and proprietors enter into site holder agreements with the MLC; S
owned Winkler Inn; entered into agreement with MLC; in 1998 the town held a plebiscite and a majority
supported prohibiting the VLT’s (this was actually done before the legislation, but the legislation said this
plebiscite was binding; ex post facto legislation is okay when not criminal); s.16 of VLT Act terminated
all site holder agreements in Winkler; S challenges legislation saying it is in relation to s.91(27).
I: Was this legislation ultra vires the province?
H: No. Act was validly enacted under s.92(13)(16) and impugned section validly enacted under
s.92(13),(15). Dominant purpose was to regulate gaming; any effects on morality were merely incidental.
R: When determining pith and substance of legislation, follow the purpose/effect test (above)
 Where a specific section of legislation is being challenged, its pith and substance should be
identified before that of the whole act
o If the impugned section is ultra vires, it may still be upheld if it is sufficiently integrated
into a valid provincial legislative scheme;
 Purpose of s.16 is to prohibit VLT’s in Winkler and to cancel all site holder agreements
 Purpose of the VLT Act as a whole is to allow municipalities to express whether they wish
VLTs to be prohibited in their community
Gaming is a matter that falls within the double-aspect doctrine
 VLT Act is validly enacted under s.92(13), 16)
 s.16(1) deals with termination of agreements which are contractual in nature and therefore falls
under property and civil rights; on a broader level, legislation allows communities to determine
whether they will be permitted thereby falling under matters of a local nature;
The VLT Act is not a colourable attempt to legislate criminal law;
 There is no prohibition coupled with a penalty;
o Prohibition, but no penalty: if VLTs were owned by Winkler Inn and confiscated for
breach of the act, that would be a penalty; instead, they are property of MLC, so they are
not a forfeiture in the criminal law sense; lost opportunity of revenue from VLT not
penalty (this appears to be a narrow view of penalty);
o Not charging operators of the machines, who would have been charged under the code
which makes gaming illegal unless there is valid legislation
o s.92(15) allows the provinces to impose fines or other punishments as a means of
enforcing valid provincial law; the mere presence of the criminal form does not invalidate
an otherwise acceptable use of provincial legislative power
o Note: Siemens mistakes colourability doctrine by including form in it
 Not enacted for a criminal law purpose
o No evidence Act was enacted to regulate morality
o Province has authority to regulate where gaming is conducted as a local matter
o Presence of moral considerations does not per se render a law ultra vires the province; in
many cases it will be impossible for valid provincial legislation to not incidentally deal
with moral considerations
 Provinces can include moral concerns in their decisions, but they cannot be the
only concern; there has to be some local concerns as well;
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Basically saying public morality is a double aspect matter, but at provincial level,
it has to be localized to include other concerns, and it has to be packaged properly
The courts should also pay attention to the co-operation of Parliament and provinces
 the 2 levels, in the absence of jurisdiction, cannot by simple agreement lend legitimacy to a claim
that an Act is valid
 however, given that both guard their legislative powers carefully, when they do agree, like in this
case, the courts should give this careful consideration
INVESTIGATORY POWERS
Consortium Developments (Clearwater) Ltd. v. Sarnia (City) (1999) SCC
F: The town of Sarnia and Clearwater amalgamated; Clearwater had entered into land transactions with
CD before the amalgamation; there were alleged conflicts of interest and irregularities in the transactions;
taxpayers of S asked for investigation; S city council passed resolution pursuant to Municipal Act to
establish a judicial inquiry concerning the land transactions; s.100(1) gave a broad power to municipalities
to authorize judicial inquiries into matters of municipal concern; could ask a judge to investigate a
malfeasance of a municipal official or any matter regarding the good government of the municipality; CD
said the enquiry was in relation to s.91(27) and invoked the police investigation line of cases above;
I: Was the investigation a s.91(27) police investigation ?
H: No
R: If a judicial enquiry purportedly authorized under provincial law was in fact a substitute police
investigation invading s.91(27, this would be a colourability issue
 extrinsic evidence can be submitted;
 The jurisdiction of every judicial enquiry that may incidentally, in the course of discharging its
mandate, uncover criminal conduct cannot be attacked
 However, it may be attacked if the inquiry is directed to specific allegations of criminal conduct
by named individuals;
 e.g. in Starr, the enquiry was ultra vires b/c the “police” and the “enquiry police” were
working under substantially the same terms of reference (s. 121 of the CC); both named
private individuals and the enquiry language was virtually indistinguishable from parallel
criminal code provisions;
 Enquiries may uncover conduct potentially subject to criminal sanction but the question that
aspect of the enquiry is incidental to the main function or is the main function itself;
 Has the municipality attempted to investigate a criminal offence w/o adhering to the standards of
criminal procedure?
 Province can uncover criminal activity, but cannot investigate things they believe to be criminal in advance
Regulation of the Economy
Citizens Insurance v. Parsons (1881) PC
F: Ontario Act in question dealt with fire insurance policies and prescribed certain conditions that had to
form part of insurance contracts; insurance has been subject to a great deal of litigation; traditionally been
both federal and provincial legislation dealing with it; C was a federally-regulated insurance company
licensed federally to carry on business in Ontario; P wanted to recover on policy and relied on Ontario Act
conditions. C argued Act was ultra vires Ontario and therefore they did not have to comply.
I: Was the Ontario Act ultra vires?
H: No. Provincial act upheld under s.92(13) as intra-provincial trade.
R:
 "Property and civil rights" are not to be interpreted narrowly and are sufficiently large to embrace
in their fair and ordinary meaning: "rights arising from contract"
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
The words “regulation of trade and commerce” under s.91 are not used in the act in their literal
unlimited sense; if this was the case, specifying other heads of power in s.91 would be
meaningless (e.g. banking, weights/measures, etc.)
 Shows the PC relying on the federal principle already
The words regulation of trade and commerce would include political arrangements in regard to
trade requiring sanction of Parliament:
 international and inter-provincial trade
 general regulation of trade affecting the whole dominion (no definition given)
Parliament’s authority under s.91(2) does not comprehend the power to regulate by legislation the
contracts of a particular business or trade within the province; this is s.92(13)
R v. Eastern Terminal Elevators (1925) SCC
F: Parliament passed the Grain Act; attempt to regulate agricultural products moving into international
trade; most grain being produced was going to the international market; Parliament thought they had
power to regulate international trade and grain and so decided to reach back into the process of the
processing of grain, which happens at the local level, and at the elevators; Parliament thought that b/c 80%
of the grain was being exported, and therefore it would be within their jurisdiction eventually anyway,
they should be able to regulate it at an earlier stage; the Act attempted to regulate directly certain
occupations, including elevators, required licensing, included inspection and grading of grain (which is
needed for international trade); there was also a section that provided that the surplus of grain in the
elevators in excess of a certain amount should be sold by the board of grain commissioners (created under
the Act) and the proceeds would be used to finance administration of the act; E refused to comply.
I: Was the legislation ultra vires?
H: Yes.
R: Parliament may use these heads of power to regulate grain: trade and commerce, weights & measures, transportation
 But in carrying out one of the above valid objectives, federal legislation regulate occupations and
reach back to the processing is ancillary to international trade;
You cannot determine legislative jurisdiction by percentages
 Cannot say the dominion has power b/c no provinces, or all the provinces together, do not have
the ability to enact such a regulative operation [this may not be good law b/c "provincial
inability test" now part of POGG – National concern]
NB: The court struck down the legislation but encouraged Parliament to use s.92(10)(c) – works in the
province that are declared by Parliament to be for the general advantage of Canada or 2 or more
provinces;
 this does not give Parliament ownership; its an assumption of jurisdiction to regulate the work and
its associate undertakings
 s.92(10)(c) only refers to “works,” not undertakings; therefore the only possible judicial review
would be if Parliament declared they were overtaking an undertaking without a work
o a work is something physical; an undertaking is the organization and is intangible
NB: Case shows the difficulty Parliament has in reaching back
Carnation v. Quebec Agricultural Board (1968) SCC
F: Marketing board was created by the Quebec Agricultural Marketing Act; empowered to approve joint
marketing plans and to arbitrate any dispute arising in the course of carrying out a joint marketing plan;
plan dealt with milk producers; critical element of the plan is the price of milk; C is buying milk and
shipping it out of Quebec; C is paying more for the milk under the plan then they would otherwise have;
this is affecting the amount they sell it for outside the province – having an effect on inter-provincial
trade; C challenged orders made by the board.
I: Was the provincial legislation ultra vires as in relation to inter-provincial trade?
H: No. Aim of Act was to protect local dairy farmers. Incidental effect on interprovincial trade was okay.
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R: The key element to determining if its inter-provincial trade or a matter of local concern is the pith and
substance
 Pith and substance will either be (1) inter-provincial trade or (2) local
The court must look to the purpose and effect of the legislation to determine pith & substance
 Purpose seen as to regulate milk to improve the positions of local producers
 Effect is the increased price of doing business for Carnation inter-provincially
 SCC says the pith and substance is the purpose, not the effect b/c the province. was not aiming
at the effect; they were aiming at protecting dairy farmers, which is a local aim
Therefore, if province is trying to minimize the inter-provincial effect, you can argue the inter-provincial
effect is merely incidental b/c that was not the aim.
 Best technique for the provinces is to find a way of localizing the transactions
Burns Foods v AG Manitoba (1974) SCC
F: National Products Marketing Act prohibited slaughtering of hogs, except through a board set up
through Act; all hogs must be sold through this board; Act prohibited slaughterhouses from accepting hogs
from producers who were not subject to the Act; producers defined as anyone who kept, raised, prepared
hogs for slaughter within in the province; Burns had a slaughter house in MB and brought in hogs from
Sask b/c these producers were not in the province; board modified its prohibition to add hogs brought
from outside MB to be deemed to be produced in MB, and therefore subject to the prohibition; B ignores
regulation; argues prohibition is ultra vires as being aimed at inter-provincial trade.
I: Was the regulation ultra vires?
H: Yes. Legislation aimed at inter-provincial trade.
R: The issue is whether, as an incident of its authority over the local matter of hog slaughter in MB, the
province can regulate the buying of hogs from producers in another province;
 SCC said this was interference with extraprovincial contracts
o Effect of the regulation is to prevent Burns from entering into K’s in Saskatchewan (but
why is the K located in Sask?)
 If the federal Parliament cannot regulate local trade b/c it would be more efficient to regulate it
together with the extra-provincial trade, then a provincial legislature cannot regulate interprovincial trade in a given product b/c this appears desirable for the effective control of interprovincial trade; in other words, the direct regulation of inter-provincial trade is itself a matter
outside the legislative authority of any province and it cannot be treated as an accessory of
the local trade
 How is this different from Carnation? – isn’t the reason for these regulations to protect local
producers; they’re not trying to keep Sask. hogs out – they just want it to go through the board
o Basically, court felt effect on inter-provincial trade was aim, and was not just incidental to
a local aim; the court considered it direct interference, not indirect interference
o The legislation made it look like they were after Sask. hogs
NB: Edinger thinks this case is decided wrong and is a product of provincial protectionism at the time
NB: Provinces could show co-operation between federal government and provincial government, where
one person wearing both hats makes the regulations
NB: If the same legislation would have added a penalty, they would probably been able to say it was local
– that anyone breaching this would be punished.
Labatt Breweries Ltd. v. AG Canada (1980) SCC
F: Regulations were made under Food and Drugs Act which created “legal recipe” for beer; recipe
provided that light beer had to be between 1.2 and 2.5%; L produced a light beer (labelled “lite”) that was
4%; L argued regulations dealing with legal recipes were ultra vires.
I: Were the recipes ultra vires Parliament?
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H: Yes. Beer produced locally and not transport b/t provinces; therefore, there is nothing dealing with
inter-provincial trade; Regulations made amounted to regulations of a local trade or industry and therefore
do not fall under s.91(2).
R: Some parts of this judgment that are wrong and bad law:
 says Russell is the basis for criminal law?
 does not mention anti-inflation reference when discussing POGG
SCC flirted with the idea of using the 2nd branch of s.91(2) (general regulation of trade in the dominion) as
feds argued legislation challenged was general regulation
 Majority did not accept this b/c what was being dealt with was a single industry; therefore it did
not have the Citizens' req't of "industry and commerce being affected at large or in a sweeping,
general sense"
Incidental effect on the legislative sphere of the other jurisdiction will no longer necessarily doom the
statute to failure so long as an industry is substantially local in character & regulations are of a trade w/in
a province
 if contractual rights within the province are the object of the regulation, the province has authority
 if regulation in the flow of extra-provincial trade is the object, federal statute will be valid;
 between these spectrum ends, the shadings cannot be foretold in anything approaching a
constitutional formula
Dissent - held that these regulations were legislation in relation to s.91(2) b/c they were like trade mark
provisions, which had been held to be general trade for dominion
City National Leasing v. General Motors of Canada (1989) SCC
F: Combines Investigation Act, s.31.1 created civil cause of action for certain infractions of the Act;
normally, civil COA is within the domain of the provinces to create; CNL claimed that GM was giving
preferential interest rates to its competitors; CNL was in the business of leasing fleets of automobiles and
like its competitors, took advantage of the interest support on its purchase financing provide by a program
offered by GM; CNL felt the preferential rates to its competitors was a practice of price discrimination
contrary to s. 34(1)(a) of the Act, giving CNL a COA under s.31.1. GM argued s.31.1 was ultra vires feds.
I: Is the Act valid under s.91(2)?
H: Yes, s.31.1 valid under Ancillary Doctrine b/c Act as a whole met req'ts of General Regulation of
Trade & Commerce. s.31.1 intruded only lightly and therefore only a functional connection was needed;
this was present; s.31.1 intended to create a more complete and more efficient system of enforcement in
which public and private initiative can both operate to motivate and effectuate compliance.
R: When applying the 2nd branch (general trade), be sensitive to the need to reconcile Federal general
trade and commerce power with Provincial power over property and civil rights;
There are 5 hallmarks of validity for legislation under the second branch of trade and commerce:
1. the legislation must be part of a general regulatory scheme
2. the scheme must be monitored by the continuing oversight of a regulatory agency
3. the legislation must be concerned with trade as a whole rather than with a particular industry
4. legislation should be of a nature that the provinces jointly or severally would be constitutionally
incapable of enacting
5. the failure to include one or more provinces or localities in a legislative scheme would jeopardize
the successful operation of the scheme in other parts of the country
That is not an exhaustive list, nor is the presence or absence of any of these necessarily determinative; it is
always based on a case by case assessment; however, the presence of such factors does at least make it far
more probable that what is being addressed in a federal enactment is genuinely a national economic
concern and not just a collection of local ones
ANCILLARY DOCTRINE
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The mere inclusion in a valid legislative scheme does not ipso facto confer constitutional validity upon a
particular provision; it will normally be necessary to consider the validity of both;
 The first step should be to consider whether and to what extent the impugned provision can be
characterized as intruding into provincial powers;
 if it does not intrude at all, and the Act to which it is attached is valid (or the provision is
severable; or the part of the Act is severable and valid) than the provision is valid;
 if the provision is valid, but the Act is not, then the claim of invalidity should be made against the
Act, not the provision
 in most cases (like this one), where the provision can be characterized as prima facie intruding on
provincial powers to some extent, the question is to what extent
If the provision is prima facie intruding on provincial power, the next step is to ascertain the validity of
legislation (in the case of 2nd branch of trade and commerce, this involves applying the 5 indicia test)
If the Act is valid, the final question is whether the provision can be constitutionally justified by reason of
its connection with valid legislation. Answering this question first requires deciding what test of fit is
appropriate for such a determination – how well the provision needs to be integrated into the scheme of
the legislation and how important it is for the efficacy of the legislation. The same test will not be
appropriate in all circumstances; in certain circumstances a stricter requirement is in order
 e.g. if the impugned provision only encroached marginally on provincial powers, then a functional
relationship may be sufficient
 if the impugned provision is highly intrusive, then a stricter test is appropriate (necessarily
incidental)
It must always be remembered that in a federal system it is inevitable that in pursuing valid objectives the
legislation will occasionally impact on the sphere of power of the other level of government; overlap is
expected and accommodated in a federal state; therefore a certain degree of judicial restrain required on
proposing strict tests
 How much intrusion should be allowed is one part of the general notion of the “pith and
substance” of legislation
Extraterritoriality: Validity and Applicability
Royal Bank v The King (1913) PC

Alberta legislation directed at Royal Bank; account at the bank was for the purpose of
constructing a railway in Alberta; bond holders were off-shore; money transmitted to special
account in Alberta;
 legislation required Royal Bank to pay money from the account to the province
Issue: Was this extra-territorial legislation?
H: Yes, extra-territorial legislation. PC thought this legislation was trying to get at the actual cash (which
was probably in Montreal) and not just dealing with the debt.
R: any provincial enactment not wholly confined in its effect in the province will be ultra vires.
Churchill Falls (Labrador) Inc. v. AG Newfoundland (1984) SCC
F: CFLCo. incorporated for purpose of generating hydro power on Churchill river in Labrador; the Nfld
Lease Act granted them full right to the exclusive use of certain waters of the river and its watershed for
the generation of power, together with the right to transmit the power throughout the province and to
export it from the province; there were also complex financing arrangements worked into the statute;
CFLCo. entered into K with Hydro Quebec to provide them with power from the river for 40 years, with a
renewable option for 25 years; some power was also to be retained for use by Nfld. after a few years, the
province of Nfld. realized they had been screwed on the deal; they wanted more power and wanted to pay
less for it; tried to re-negotiate the deal on several occasions but got no response from QH or CFLCo.; the
province then decided to repeal the Lease Act using the Reversion Act; this stripped CFLCo. of its assets
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and profitability; CFLCo. argued Reversion Act was in relation to property and civil rights outside the
province.
I: Was the act ultra vires the province?
H: Yes. While form of legislation appeared to be local property rights, the pith and substance was
determined to legislating a contract out of existence (extrinsic evidence admitted to show this - the fact
that they had attempted on several occasions to re-negotiate the K and demanded more power from C).
Court finds that the "contract rights" were situated in Quebec b/c HQ has right of delivery in Quebec.
Therefore, provincial Act was invalid b/c it sought to regulate an out-of-province contract.
R: In deciding whether Act interfered with property and civil rights in the province, there were 2 possible
lines of authority to follow:
 Royal Bank (1913) – any provincial enactment not wholly confined in its effect to province is UV
 Ladore v Bennett (1939) – where the pith and substance is a matter inside the province, the
province may incidentally destroy or modify rights outside the province;
The court adopts Ladore approach
 where pith and substance of the enactment is in relation to matters which fall within the field of
provincial legislative competence, incidental or consequential effects on extra-provincial rights
will not render the enactment ultra vires.
 however, where the pith and substance is the derogation from or elimination of extra-provincial
rights, then even if it is cloaked in the proper constitutional form (e.g. by making it look like its
aimed at local matters) it will be ultra vires.
A colourable attempt to preserve the appearance of constitutionality in order to conceal an
unconstitutional objective will not save the legislation
 when there is an allegation of colourability, extrinsic evidence is always admissible
Global Securities Corp. v. BC (Securities Commission) (2000) SCC
F: BC Securities Act authorized BC Executive Director to assist in administration of securities laws in
other jurisdictions in s.141(1)(b); The BC SC had a request by the SEC (US Securities) to obtain
documents from G b/c they had concerns over their trading activities in the US; GSC argued that this
provision was extra-territorial b/c it was assisting another jurisdiction; the BCCA bought this argument
and characterized the matter dealt with by the provision as a matter of mutual legal assistance and
suggested that this fell within federal jurisdiction – found the provision just like a provision in the CEA
which allows SC judges to enforce letters rogetory (letters coming from other legal systems asking them
to enforce rules of evidence); the argument in the SCC was that s.141 was in pith and substance part of the
securities act, which is valid provincial legislation; argued either that the provision was attempting to
regulate local matters, or in the alternative that even if mutual legal assistance was federal jurisdiction,
that s. 141 was necessarily incidental to the Securities Act which is valid provincial legislation
I: Was the provision ultra vires?
H: No. PAS of provision was ppty & civil rights; extra-provincial effects were incidental.
R: The two main purposes of the provision were:
 obtaining reciprocal cooperation from other securities regulators, thus enabling the commission to
carry out its domestic mandate effectively
 uncovering foreign violations of securities law – local concern b/c there is a concern with ensuring
that domestic registrants are honest and of good repute
Even if pith and substance of the provision was not provincial, it would clearly be justified under the
ancillary doctrine; even under the most strict application of this test (necessarily incidental)
NB: this case is still good law.
Hunt v. T&N PLC (1993) SCC
F: TJ in BC made an order for discovery of documents from 3 corporate D’s from Quebec; but Quebec
Business Concerns Records Act said that no person could remove or cause to be removed or deliver any
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document to another jurisdiction relating to any concern; this legislation was aimed at tangible personal
property in the province; D’s said b/c of this they could not comply.
I: Is this provision constitutionally applicable to BC?
H: No. Quebec Act inapplicable to Canadian defendants. Real and substantial connection between the
action and BC. Quebec statute is found by the SCC to breach the full faith and credit principle – preemptive refusal to enforce order from another Canadian court – can’t get around the constitutional
principle by legislating in advance.
R: The main objective of the legislation was blocking other jurisdictions, especially the US, from
obtaining documents from certain provincially and federally incorporated companies;
SCC had come up with certain principles in Morguard dealing with COMITY (reciprocal recognition of
judgments)
 Hunt makes these principles constitutional with respect to extra-territoriality
 In a federal system. comity must be of paramount importance; federalism implies full faith and
credit, which means giving full faith and credit to judgments of other provinces; this means there
has to be full faith and credit of other provinces judgments (constitutional principle)
 But, there needs to be some criteria for determining if the judgment is fair
o there will be a constitutional requirement to recognize and enforce judgments of another
province only if jurisdiction in that province was properly assumed
o jurisdiction is properly assumed when there is a real and substantial connection between
the action and the province
NB: Edinger says if this case would have been decided on doctrine of extra-territoriality, court should
have said legislation was in pith and substance extra territorial b/c it’s aimed at inter-provincial judgments;
NB: The net result is that the real and substantial connection concept makes its way into federalism and
extra territoriality
Unifund v. ICBC (2003) SCC
F: Ontario couple was in an accident in BC; BC court assessed damages in their favour for 2.5M; the
couple was insured in Ontario by Unifund; BC driver insured by ICBC; both covered by different statutes;
under both acts, there are statutory accident benefits (SAB’s) that the P’s get right away; Unifund pays a
SAB of 750K to the couple; under BC Act, ICBC is allowed to deduct SAB’s from the amount of the
damages awarded; therefore they pay the couple 2.5M minus the 750K already paid by Unifund (this
makes sense when ICBC insures both drivers); in Ontario, the Act provides that the Unifund must still pay
the whole amount of damages, and then collect from the insurance company of the negligent driver the
SAB’s; U wants to collect this from ICBC b/c they already paid the SAB’s, but ICBC refuses; the Ontario
act also provided that disputes under the Act should go to an arbitrator; U goes to court in Ontario
I: Was the Ontario statute applicable to the BC insurer?
H: No. No real & substantial connection b/t Ontario act and BC insurer. Accident occurred in BC.
R: Both the majority and dissent agree both statutes are validly enacted; none are aimed at extraprovincial matters; the issue therefore is applicability. This situation occurs where there is over-lapping
provincial legislation that conflicts.
There are different ways of dealing with this problem:
 statutory interpretation; reading it down or up; court does not do this
 use choice of law rule (conflicts law); rejected by majority
Majority – Binnie – dealt with it constitutionally on the principle of order and fairness; 4 propositions:
1) territorial limits on the scope of provincial legislative authority prevent the application of the law
of a province to matters not sufficiently connected to it
2) what constitutes a sufficient connection depends on the relationship among the enacting
jurisdiction, the subject matter of the legislation, and the individual or entity sought to be
regulated by it
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3) the applicability of an otherwise competent provincial legislation to an out of province D is
conditioned by the requirements of order and fairness that underlie our federal arrangements
4) the principles of order and fairness, being purposive, are applied flexibly according to the subject
matter of the legislation
This test boils down to the court determining if there is a real and substantial connection between
the facts and the legislation
NB: This case is still good when 2 validly enacted provincial statutes cannot operate together; it can
be used in a provincial paramountcy issue
NB: Edinger thinks this case will be invoked with a provincial statute being applied to non-provincial
facts; courts will have to decide whether the statute will apply to certain people
NB: Unifund does not apply to a Validity/Extraterritoriality Analysis (no need to do a real & substantial
connection analysis).
British Columbia v Imperial Tobacco (2005) SCC
F: The Tobacco Damages and Health Care Costs Recovery Act authorizes an action by the government
of BC against a manufacturer of tobacco products for the recovery of health care expenditures incurred by
the government in treating individuals exposed to their products; created a civil COA; therefore the D’s
are not confined to BC; IT argued they did not manufacture in BC and therefore the legislation was extraterritorial.
I: Was the legislation extraterritorial?
H: No. Pith and substance of the COA is to make persons the persons responsible for tobacco-related
disease suffered by BC residents liable for the costs of treating that disease; there are thus strong
relationships among the enacting territory (BC), the subject matter of the law (compensation for health
costs) and the person made subject to it (manufacturers);
R: Churchill Falls approach is correct: look at purpose and effect to get the dominant purpose or pith
and substance; this also includes the ancillary doctrine;
 Unifund approach is not appropriate / too objective (identifying, weighing, and counting
connections between the facts and the legislation)
When validity of legislation is challenged on basis of extra territoriality, the analysis centres on the pith
and substance of the legislation
 if it is in relation to matters falling within the field of provincial competence, the legislation is
valid; incidental or ancillary extra provincial aspects of such legislation are irrelevant to validity;
 In determining pith and substance, court identifies its essential character or dominant feature; this
may be done through reference to both the purpose and effect of the legislation;
Tangible Matters: Where the pith and substance relates to a tangible matter, one need only look for the
location of the matter to see if its valid; where it relates to an intangible matter, the its more complicated;
 e.g. “no person shall”; this means a person in BC
Intangible Matters: Where the pith and substance relates to an intangible matter, you have to locate the
matter by looking at (Unifund):
 the relationship among the (1) enacting territory, the (2) subject matter of the legislation and the
(3) persons made subject to it, in order to determine whether the legislation would respect the dual
purpose of territorial limitations (meaning connection to the enacting province and pays respect to
legislative sovereignty of other territories)
 this is identifying relationships and asking whether there is a meaningful relationship
 Though the pith and substance may catch activities occurring outside of BC, no territory could
possibly assert a stronger relationship to that COA than BC; the connection to BC is always there
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Castillo v. Castillo (2005) SCC
Facts: Both living in BC; went on vacation in California; got into accident; both moved to Alberta; wife
sued husband for accident; husband said she could not do this b/c she was out of time b/c the accident
occurred in California – used choice of law rule in conflicts where you use law of where the tort occurred.
 under choice of law rule, you apply the limitation period of the jurisdiction where the tort
occurred; different than before when it was held Canadian procedural rules from here would apply
 the wife relied on Alberta Limitation Act which had a 2 year limitation period; this act had a
provision saying that Limitation Act had to be applied notwithstanding that the substantive law
will be applied under another jurisdiction
 the characterization of the pith and substance of the provision was key to judgment
o if act characterized as administration of justice, its tangible b/c it’s the actual courts
o if characterized as property and civil rights, have to locate the rights;
 court classifies it as property and civil rights b/c SCC sees limitation periods as substantive and
not procedural; therefore not an administration of justice issue
 court finds no real and substantial connection; also says real and substantial connection not the
same as a meaningful connection which requires a closer connection that real and substantial
o court seems to think these property and civil rights have some sort of independent
existence in California; the parties are in Alberta, so this seems strange
Rule: this case narrows the scope for provincial legislation by requiring a “meaningful connection”.
Taxing and Spending Powers: Validity and Applicability
PROVINCIAL TAXATION
Bank of Toronto v. Lambe (1887) PC
F: Quebec passed An Act to impose direct taxes on certain commercial corporations; every bank
carrying on business in the province required to pay the tax on paid up capital; BT argued this was not a
direct tax and it was not tax within the province b/c its capital was kept in Toronto (conception of money
being located in a place); also argued this shouldn’t apply to banks as banking was federal.
I: Was the tax valid?
H: Yes. Provinces intended banks to pay tax, therefore direct. Bank located in province, therefore tax was
valid as "in the province". Taxing statute in relation to taxing, not banking.
R: PC adopts Mill definition of direct taxation
 A direct tax is one which is demanded from the very persons who it is intended or desired should
pay it
 Indirect taxes are those which are demanded from one person in the expectation and intention that
he shall indemnify himself at the expense of another (e.g. an importer of a commodity will pass
the tax on to the consumer);
Provinces can tax any entity located in the province.
NB: Leading case on the meaning of direct taxation
Canadian Industrial Gas & Oil v. Saskatchewan (1978) SCC
F: Sask. wanted to take all profits from its oil industry when the price of oil rose dramatically; passed the
Mineral Income Tax and Royalty Surcharge; Income tax basically took the difference between the price
oil was selling at before the increase and the current price for oil; this tax only applied to those producing
oil on a certain size of land; C argues this was (1) indirect taxation and (2) legislation relating to interprovincial trade and commerce;
I: Is this tax valid?
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H: No. Majority held that legislation was both (1) indirect taxation and (2) in relation to international
trade b/c equivalent to price-fixing in int'l market.
R: The majority (Martland) and dissent (Dickson) come up with completely different reasons;
 Martland confined himself to the legal effect of the legislation; Dickson looked at practical effect
Martland – finds the legislation indirect and in relation to s.91(2)
 bases decision on s.4(a); authorizes the Minister to fix the well head price (market) if a producer
lowers the cost he sells at;
 majority decides its an export tax, which has been held to be indirect
 As for the royalty surcharge, it’s a tax, not a royalty (which is an incident of ownership); this is
not an incident of ownership; dissent agrees with this
Dickson – looks at actual operation of statute and says s.4a has never been used; in his view its an ex post
facto provision which makes no difference to whether its direct or indirect;
 the nature of a tax is its substance, not its label
 no evidence s.4a was used to increase the tax
 s.4a only used after the sale has taken place, if the oil has been sold at less than market value; this
has to be direct b/c its too late to pass it on
The Queen in Right of Manitoba v. Air Canada (1980) SCC
F: The province enacted Retail Sales Act; inter alia, imposed taxes on Air Canada flights which land in
Manitoba and which fly through Manitoba airspace w/o touching down
I: Was the tax within the province?
H: No. Merely going through airspace, or touching down while in transit does not make aircraft "within
the province". Tax was inapplicable to Air Canada's flights.
R: In the case of aircraft operations, there must be a substantial, at least more than a nominal, presence in
the province to provide a basis for imposing a tax
The other argument was that b/c Air Canada had operations and offices in Manitoba, that the tax
was in personam – meaning that regardless of whether the airspace was within the province, the tax was
on Air Canada as carrying on business in Manitoba, and the over-flights were just a means of measuring
the tax; said Lambe was the basis for this
 Lambe - an exclusively federally regulated activity was taxed by the province for carrying on
business there, and was measured by extra-provincial concerns; this principle cannot be extended
to make inter-provincial and transnational aircraft operations as measuring standards to determine
the amount of tax imposed on a carrier who has an office in the province
 SCC did not accept this b/c it was not imposed in this way on construction of the statute
Applicability, not Validity: This case did not decide whether any airspace would be extra-territorial to
the province statute was not struck down, but rendered invalid to the extent that it purported to tax these
particular operations. This was therefore a case of applicability, not validity.
Allard Contractors v. Coquitlam (1993) SCC
F: Coquitlam, under the Municipal Act, set forth prohibitions against the removal of gravel, sand, etc.
subject to having a permit issued by them; originally there was a flat fee of $50 for a permit, but C
changed the amount of the fee to be based on the volume of material removed by the permit holder; A
argued that this was a form of indirect taxation and therefore ultra vires the province; C argued that
indirect taxation was allowed if part of a scheme under s.92(9).
I: Was the variable fee valid?
H: Yes. Variable fees are referable to an overall scheme of gravel and road regulation, and that s.92(9), in
conjunction with s.92(13),(16) validates those fees to the extent they comprehend an element of direct
taxation. In this case, the volumetric fees are indirect in their tendency b/c the tax is related to a unit of
gravel.
Rule: Therefore when determining if taxation in the province is valid, ask these questions:
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1) Can the variable fees be considered indirect in their general tendency? If not, then the tax is valid.
a. A flat rate license fee will normally be seen as direct
2) Does the Act or by-law create a regulatory scheme to which the fees can be related?
When determining if variable license fee is indirect in its tendency, each case must be examined separately
 A tax measured w/ reference to a marketable commodity is usually indirect in its general tendency
– this is b/c the tax tends to cling to the product, meaning it gets passed on to the consumer
 Therefore, the appropriate question is whether the tax is related or relatable, directly or indirectly,
to a unit of the commodity or its price, imposed when the commodity is in the course of being
manufactured or marketed? If yes, then its indirect.
Taxes contemplated by s.92(9) are not confined to direct taxation if it is ancillary or adhesive to a valid
regulatory scheme.
 s.92(9), in combination with (13) and (16) comprehends a power of regulation through licenses
and is not confined to direct taxation;
 However the cases have limited this power of indirect taxation such that it can only be used to
defray the costs of regulation (i.e. there must be a nexus between the costs of the regulatory
scheme and the amount levied by the revenue scheme)
 The court says that it is unnecessary in this case to decide whether 92(9) alone would support
indirect taxation independent of these other provisions, or whether it would support a similar
power capable of raising funds in excess of regulatory expenses, but does say that a power of
indirect taxation in 92(9) extending substantially beyond regulatory costs could make s.92(2)
useless
Re Eurig Estate (1998) SCC
Facts: The province had enacted some legislation authorizing radical increases in probate fees. The
power was delegated to the governor in council.
Issue: whether the taxing legislation was properly enacted.
R: Taxing legislation is a money bill. Generally you can delegate lawmaking power, but s.53 and s.54
require that the legislative branch impose a money bill (no taxation without representation)
Union of New Brunswick Indians v. NB (Minister of Finance) (1998) SCC
F: Prior to 1993, Indians in NB were generally exempt from paying provincial sales tax under the Social
Services and Education Act; this exemption was repealed in 1993; Indians were only exempt from sales
tax on goods and services purchased on or delivered by the vendor to reserve lands; U argued that s.87 of
the Indian Act (exempts Indians from taxation on property situated on a reserve) prohibits taxation on offreserve sales where the property is intended to be used on a reserve
I: Was the NB legislation inoperative as conflicting with the Indian Act?
H: No. Sales tax is direct tax imposed at time of sale. Paramount location was point-of-sale off-reserve,
not on the reserve.
R: s.87 only applies to property physically located on the reserve at the time of taxation or property whose
paramount location is on a reserve at the time of taxation;
Union argued it was not a sales tax, but rather a consumption tax, which made it “on the reserve” b/c that
is where consumption takes place;
 despite the reference to “consumers” and “consumption” in sales tax statutes, it is a sales tax;
these words are there to avoid indirect taxation; by saying “consumer” the tax targets the final
user of the product and therefore it can’t be passed on
 Provincial sales taxes, when levied on retail sales, are sales taxes
 A sales tax is imposed at time of sale; consumption taxed imposed at time of consumption
 in this case, it’s a sales tax; the tax is imposed at time of sale; even if there was no consumption,
tax would still be charged on the sale
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Union argued the property was purchased for use on reserve and therefore had its paramount location
there
 The paramount location test has been used to protect Indian property normally situated on the
reserve from being taxed or seized while off-reserve;
 At the point of sale, the property has but one location, the place of sale; it cannot have a
paramount location elsewhere; the location of the property after the sale is irrelevant
Union argued the purpose of s.87 was to protect off-reserve purchases
 the purpose of s.87 is to prevent property on Indian reserves from being eroded by taxation or
claimed by creditors; not intended to confer privileges on Indians in respect of any property they
may acquire and possess wherever situated
 the wording of s.87 clearly only protects the taxation of property situated on a reserve
 Parliament has explicitly limited and narrowed the scope of what is now s.87 to protect only
property on the reserve
Westbank First Nation v. BC (1999) SCC
F: In 1990, W imposed a taxation by-law, pursuant to s.83(1)(a) of the Indian Act which attempted to
impose taxes on BC Hydro; the issue is whether s.125 of the Constitution Act (Crown immunity from
taxation) prevents this; if it was actually a tax, then s.125 would apply.
I: Was it a tax such that s.125 Crown immunity applies?
H: Yes. In this case W was imposing a “tax”: enforceable by law, imposed under the authority of the
legislature (Indian Act), levied by a public body (Band Council under conferred authority) and levied for a
public purpose (general band governance and local purposes). No regulatory purposes have been
demonstrated and there is no nexus; no complete and detailed code and no complex regulatory scheme
R: s.125 ensures proper functioning of the federal system; founded on concept that imposing a tax on a
level of government may harm their ability to exercise its mandated government functions
 Intergovernmental taxation is prohibited b/c one group of elected representatives should not be
allowed to decide how taxes levied under and within the authority of another group of elected
representatives should be spent; furthers democracy and idea of no taxation w/o representation
 Flexible federalism demands protection from taxation, but not from all forms of charges when the
charges are levied in support of other regulatory objectives within the competence of the taxing
authority
o they choose to use the service
s.125 only applies to “taxes”: 4 Characteristics of Taxes
1. enforceable by law
2. imposed under the authority of the legislature
3. imposed by a public body
4. imposed for a public purpose
In order for charges to be imposed for regulatory purposes, or to otherwise be necessarily incidental to a
broader regulatory scheme, there needs to be a valid regulatory scheme:
 a complete and detailed code of regulation
 a specific regulatory purpose which seeks to affect the behaviour of individuals
 actual or properly estimated costs of the regulation (used to ensure there is a proper nexus)
 a relationship between the regulation and the person being regulated where the person being
regulated either causes the need for the regulation or benefits from it
 For a fee or other regulatory charge, a nexus must exist between the quantum charged and the cost
of the service provided; otherwise it will be considered a tax; the charge may exist to defray the
expenses of the scheme or may be a means of advancing the regulatory purpose;
A tax raises revenue for general purpose;
A regulatory charge, or a charge ancillary or adhesive to a regulatory scheme finances a regulatory
scheme
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A user fee charges for services directly rendered
NB: the legislation must approve the tax and them may clearly and expressly and without ambiguity
delegate to a subordinate body of sort the power to impose the tax; tax not imposed until the rate and all
the other factors are set
 s.83 valid b/c Parliament approved the delegation of power to tax
NB: BC imposes sales tax on every sale in the province; it also imposes sales tax on BC residents who
bring into BC or have delivered in BC tangible personal property for their own use or to give to others
(unless person has paid tax in another province)
FEDERAL TAXATION
Winterhaven Stables v. AG Canada (1988) ACA
F: W argued that imposition of tax upon under Income Tax Act was unconstitutional b/c it was in
violation of s.92(2); argued that Parliament was raising money for provincial purposes, and that they
should only be allowed to raise money for federal purposes; money collected by the ITA is used for
provincial purposes; also argued that Parliament is indirectly legislating in respect of matters within
provincial jurisdiction by passing spending statutes b/c there were strings attached to the funding that
restricted what the province could do with the money for provincial purposes.
I: Was the act and spending statutes ultra vires?
H: No. ITA’s main objective is not to raise money by direct taxation for provincial purposes, but is to
raise money generally by taxation. In this case, they were just spending their money, and the provinces
had a chance to opt out so it could not be seen as a regulation or control of a provincial matter
R:
 Raising money for only federal purposes was not a limitation on s.91(3); Parliament can raise
revenue generally
 s.91(3) power is a general and wide power
 As for the spending statutes, the federal government can spend its money any way they chooses; it
can impose whatever conditions it wants, as long as they do not amount in fact to a regulation or
control of a matter outside federal authority and as long as they are not just a colourable attempt to
usurp provincial jurisdiction;
NB: Case never overruled by SCC
Re Canada Assistance Plan Act (1991) SCC
F: The complaint by the provinces was that Parliament had ceased to spend as much as it had before in the
provinces on certain programs; under the Act, Canada entered into agreements with the provinces to pay
for certain programs; in 1990, the feds decided to cut expenditures to reduce the deficit and put a cap on
payments to the “have” provinces; did this in another act; provinces argued it was invalid.
I: Could Parliament change the amount of funding for these programs?
H: Yes.
R: Court decides that original Act did not promise frozen payments, but what is authorized from time to
time; it did not have to pay certain amounts indefinitely.
SCC said the agreement was an ordinary K
 K’s can be overturned by statutes, as can other statutes as long as it was not entrenched;
Argument based on admin law doctrine of legitimate expectation; tried to elevate this to constitutional doctrine
 SCC said this is not a constitutional doctrine; Parliamentary government would be paralyzed if it
were stuck to every expectation it gave
NB: These 2 cases say that Parliament can raise money in any way it wants, they can spend their money
on anything it likes, and it can also stop spending its money any time it likes; can also avoid any K by
legislation and eliminate a COA for breach of K by legislation
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Applicability: Inter-Jurisdictional Immunity
John Deere Plow Co. v. Wharton (1915) PC
F: JDP was federally incorporated; s.92 gives provinces jurisdiction over provincially incorporated
companies; no specific equivalent in s.91 but courts have found there is under POGG; federally
incorporated companies can operate anywhere in Canada; JDP wants to carry on business in BC; BC
Companies Act required all non-provincially incorporated companies to register and get a license; there
were penalties for not doing this; JDP tried to comply, but BC refused a license b/c there was already a
company with a similar name
I: Was the Act applicable to JDP?
H: No (not all of it). In this case, the Act destroys the status and powers of JDP b/c it prevents them from
doing business in BC.
R: Decision is loose in language; oscillates between validity, applicability, operability;
 BC legislation will not be applicable to a federally incorporated company if it destroys their status
and powers; means status and powers of a dominion company cannot be destroyed by provincial
legislation
 this does not mean that the company is immune from other provincial laws of general application
 PC does not define full extent to which federal companies may be restrained in exercise of their
powers;
PC also said these provisions were aimed at federally incorporated companies; this finding suggests a real
confusion in this case between validity and applicability b/c if they are aimed at that, they are probably
legislation in relation to federally incorporated companies, which would make it ultra vires
NB: Federal companies do not have this protection anymore; this has been decided out of existence; the
only immunity left is probably from legislation that affects the internal workings of the company – would
have to be company law;
 e.g. Churchill Falls – provincial legislation aimed at a federally incorporated company
Ontario (AG) v. Winner (1954) PC
F: W is a US citizen and wants to operate a bus line from Maine to NS; to do so, busses have to go
through NB; there is already a bus service in NB (SMT) who does not want competition; W wanted to run
his line through NB, drop people off, and then go through to NS; no evidence he wants a within NB bus
service; NB passes Motor Carrier Act and says W cannot drop people off and pick them up in NB –
would not give him a license to do this; W argued legislation not applicable to him b/c it’s a federal work
and undertaking under s.92(10)(a) and so provincial legislation does not apply.
I: Was this a federal work or undertaking?
H: Yes. W is federal undertaking. Act would sterilize the function of his company, or impair its status and
capacities as a federal undertaking. Act declared inapplicable.
R: PC decides not necessary to be "both work & undertaking" to fall under s.92(10)(a)
 Undertaking is an arrangement under which physical things are used
 It may be an undertaking if the promoter has done everything which was necessary on his part to
put it in motion and made all the essential arrangements;
The province also argued that they make, maintain, and control the roads, which are local works and
undertakings, and as such are entitled to regulate them in any way it pleases; this contention would mean
inter-provincial undertakings connecting provinces would be within federal jurisdiction, but could totally
be sterilized by acts of the province curtailing or preventing the use of its roads;
 PC says there is a bias against divisibility - – if the operation is in fact a coherent operation, the
courts role is not to see what parts can be severed and let the provinces control those parts
 The question is not, as the province suggested, what can be stripped away from the undertaking
w/o interfering with the undertaking (in which case the province could regulate the stripped part),
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but rather is there one undertaking; if there is only one, the dominion has jurisdiction over
the whole thing (assuming it is an exception in s.92(10))?
o If there are actually 2 different operations, and one is entirely within the province, then
the province could control that part
 Whether a operation is inter-provincial is a factual question
o this does not mean that a carrier who is substantially an internal carrier can escape being
subject to provincial jurisdiction by starting his activities a few miles over the border; the
question is whether in truth and in fact there is an internal activity prolonged over the
border or whether its in pith and substance inter-provincial
o colourability – cannot just be a colourable attempt to avoid provincial jurisdiction
As for whether W is immune, the proper test is whether the application of the legislation sterilize the
function of the company or impair its status and capacities;
NB: The general propositions from this case still apply
Capital Cities Communications Inc. v. CRTC (1978) SCC
F: A previous case, Re Radio and TV Communication, decided that radio and TV fell within federal
jurisdiction under s.92(10)(a); PC decided that radio was like a telegraph w/o wires; provinces had argued
that a transmitter and receiver could be located within the province and therefore should be local; PC
compared it to airports; also said that they were like electronic waves that could cross borders and
therefore fell under s.92(10)(a); technology then improved and opened up the door to new arguments;
CRTC wanted to delete US commercials and use only Canadian commercials; Rogers was re-broadcasting
US commercials; CRTC makes a decision unfavourable to Rogers; American TV channels intervened
I: Does Parliament, through the Broadcasting Act have the power to regulate the content of the programs
broadcast in the provinces?
H: Yes. Transmitting and Content are part of the federal head of power of Broadcasting under s.92(10)(a).
R: Rogers argued that cable was physical and in the province and therefore Parliament should not be able
to control what is distributed through the cable;
Laskin follows Winner and the bias against divisibility and severance of operations;
 Rogers was taking the signal from the US, and re-transmitting it through the cable; said TV
system is still within federal jurisdiction b/c the cable is just a conduit for the signal received from
the US, and therefore it is extra-provincial
 Parliament also has control over content b/c it is part of the same operation; refuses to reduce
federal jurisdiction to systems only, and not content
Some room is left for the provinces; SCC finds TV and Communications could be a double aspect
matter; if an operation can establish that they are creating the programs and the system is completely
contained the province, they could possibly have jurisdiction; but not for sure;
Therefore Parliament has jurisdiction over TV systems and content, with one possible exception.
Quebec (AG) v. Kellogg’s Co. of Canada (1978) SCC
F: Application of a provincial statute to K, which authorized the GIC to establish standards for the
advertising of goods, especially towards children; prohibited any advertising for children that included
cartoons; K disregards the regulation; AG seeks injunction; K argued regulation either invalid or
inapplicable b/c it either related to television, or it was aimed at inter-provincial trade.
I: Was the legislation applicable to K?
H: Yes; both valid [aim is provincial consumer protection] and applicable [not federal undertaking].
R:
 Act was valid b/c the aim is not inter-provincial; applies Carnation and finds the aim was
consumer protection, which is ordinarily a provincial matter;
 Effect on TV does not sterilize operations, nor impair status
 Legislation not aimed at TV
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

Legislation was directed at advertisers
K is not a federal work or undertaking, its an ordinary company; it affects the federal undertaking
but is not aimed at it
Dissent - Laskin says the content of programming is affected and this is enough; provinces cannot effect
programming
NB: Result might not be the same today; no longer require a drastic negative effect on the federal work
and undertaking
Irwin Toy v. Quebec (AG) (1989) SCC




the same issue was re-argued; Quebec much more broad; instead of saying you can’t use cartoon,
said cannot direct ads at anyone under the age of 13;
the evidence in this case was that the province was aiming at TV; argued that the regulation
affected TV in a vital part of its operation – not the same as drastic reduction of status
court still upheld the act as consumer protection
there was a minority view that any effect on the core of federal jurisdiction attracts the doctrine of
jurisdictional immunity, not the more drastic sterilization test
Quebec v. Construction Montcalm (1979) SCC
F: Parliament has jurisdiction over aeronautics through POGG; got slotted in as a matter of national
concern; M claims to be immune from the application of Quebec minimum wage laws; M working on
building runways at an airport at the time they were asked to abide by these statutes; it was already
decided that airports fell under federal jurisdiction under aeronautics; M argued construction of airports
fell under s.92(10)(a) and therefore they could claim inter-jurisdictional immunity
I: Is the Quebec minimum wage law applicable to M?
H: Yes. Provincial law did not affect a vital part that was sufficiently integral to the federal undertaking.
Provincial legislation is about labour relations and employment, but the construction is not integral to the
federal work – the airport.
R: The court first defines what constitutes “aeronautics”:
 construction of an airport not always an integral part of aeronautics; depends on what is meant by
construction;
 deciding when and where to build the airport is a matter of federal jurisdiction and therefore any
provincial laws affecting that would not be applicable
 the mode and manner of building the airport not integral to aeronautics
Normally Parliament has no authority over labour relations, employment K’s, property, etc., but
they can gain jurisdiction if such activities are integral to some other federal subject; can prevent the
application of provincial law if demonstrated that these elements are integral to the work under federal
jurisdiction;
 In other words, the internal workings of the federal work, undertaking, service, or business is
immune from provincial law.
Court emphasizes the small number of categories of parties that can claim this immunity:
 federal works, undertakings, services, and businesses
 M was none of the above; only implementing core federal decisions; not integral to them
M argued they should still be immune b/c they are working on a federal project and Crown land;
 court said this would produce too much confusion; contractor should not have to figure out what
law applies on every different job; job has nothing to do with territory or land
NB: Aeronautics is either POGG or s.92(10)(a)
 If you put it under POGG, its under federal jurisdiction automatically; if its under s.92(10)(a),
then there has to be an inter-provincial aspect to it, meaning that local flyers could make an
argument that the airport is a local work or undertaking
o so far this argument has not bee raised successfully
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o
if you can localize the business, you have a hope of destroying the immunity argument,
but if you concede its aeronautics, you’re in trouble
NB: If M only worked for the federal government, you may be able to make an argument that it was
sufficiently integral to the federal work or undertaking
Westcoast Energy Inc. v. Canada (National Energy Board) (1998) SCC
F: W owns and operates a pipeline for natural gas; transports gas to processing plants, and then transports
that gas to BC, Alberta, and the US – clearly an inter-provincial undertaking; W wants to expand; applies
to the NEB for permission; NEB says they don’t have jurisdiction, and that it’s a local problem
I: Did the NEB have jurisdiction?
H: Yes. Westcoast Energy is single work/undertaking. This includes the expansion.
R: The proposed expansion was part of the federal work/undertaking; this case gives a description of the
approaches you use to identify or classify the undertaking as federal; you have to ask 2 questions:
1) Is this a single work or undertaking?
a. physical connection does not conclusively establish it is part of work/undertaking, but relevant
b. single owner not sufficient in and of itself, but is relevant
c. the parts must be functionally integrated and subject to common management, control,
and direction; has to be operated as a single enterprise
d. involves a factual in-depth inquiry
2) If no, is the extra part integral to the federal work or undertaking?
Therefore there was no need to examine part 2 of the test, but there was reference to a previous case which
found that in order to satisfy this part of the test, you have to analyze the relationship of the main
undertaking to the subsidiary activity; it must be integral, vital, or essential to the federal work or
undertaking.
Commission du Salaire Minimum v. Bell Telephone Co. of Canada (1966) SCC
Facts: Quebec legislation imposed levy on B; B claims immunity
Rule: SCC introduces new jargon for inter-jurisdictional immunity; speaks of all matters which are a
vital part of the operation of the undertaking as a going concern;
 employer-employee relationships are always vital parts of the operation as a going concern
Commission de la Sante et del law Securite du Travail v. Bell Canada (1998) SCC
Background: part of a trilogy that went to SCC and was consolidated; (Al-trans was one of them)
Facts: Company incorporated in Ontario; carries on business all over country; inspector from BC WCB
orders employees to wear certain foot gear and to form a safety committee
Issue: SCC had to deal with scope of inter-jurisdictional immunity
Majority: uses the Bell 66 test – does the provincial legislation affect a vital part of the undertaking?
 For inter-jurisdictional immunity, it doesn’t matter if the legislation would impair the operation or
not – do not need to prove sterilization or impairment of status and capacity;
 Labour relations is always a vital part of the undertaking
 Majority goes on to say that the provincial legislation in question also has to characterized as
being legislation in relation to that core aspect
o very few subsequent cases go to this step
o e.g. in this case, if the provincial legislation was characterized as health law and affect
labour relations, which is a core aspect, it would have applied; but if characterized as
labour law, A would be immune
 also says immunity only applies to federal works, services, undertakings, and businesses
NEW IJI DOCTRINE
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Ordon Estate v. Grail (1998) SCC
F: Boat crash on a lake dealing with 4 different boats; negligence actions were brought; Canada Shipping
Act was implemented under Parliament’s jurisdiction over maritime law under s.91(10); Plaintiffs invoke
various provincial statutes to sue.
I: Can these provincial statutes apply to a COA otherwise governed by Maritime law, which is federal?
H: No. Maritime negligence law is a core element of federal jurisdiction over navigation, and thus is an area that is
immune from the operation of provincial statutes. Provincial statutes inapplicable to maritime COA.
R: Until this case, provincial law was used to supplement federal maritime law in this area.
The court said the nature of navigation activities makes a uniform maritime law necessary
 if Parliament has not put them into statute, then maritime common law remains applicable
The court creates a whole new version of inter-jurisdictional immunity;
 where a provincial statute trenches on an exclusively federal power, the statute must be read down
so as not to apply to those situations; says this is known as inter-jurisdictional immunity
o this is a confusion between validity and immunity
 court finds that each federal head of power possesses a basic minimum unassailable content (the
core) that cannot be trenched on by the province
o says the court in Bell 88 said this (but Bell 88 does not say this; the court in that case said
the federal entity in question had core workings, not the subject matter)
Ordon Estate says that you can raise an argument about immunity for every federal head of power
 Each has a core that provincial legislation cannot encroach on
 Therefore if the incidental effect of valid provincial law touches on that core, it will not apply
 Question: Does the provincial statute incidentally or indirectly regulate maritime law? If so, then inapplicable.
 Effect of New IJI Doctrine: Where provincial statute trenches upon exclusive federal power in its
application to specific factual contexts, statute must be read down so as not to apply to those situation
Problem: This is completely inconsistent with the pith and substance approach which allows for
incidental effects on the jurisdiction of another level of government as long as its pith and substance is
within its jurisdiction
NB: This new concept of immunity may now protect the provinces; in an FCTD judgment, the judge
applies the doctrine of immunity to benefit the Fisheries Act; the Canada Shipping Act is read down b/c it
touched on provincial jurisdiction
Kitkatla Band v. BC (2002) SCC
F: Case involves the Heritage Conservation Act, which contemplates a class of heritage objects and has
certain prohibitions against damaging, removing, etc aboriginal paintings and artefacts, except with a
permit; logging company wants to log where it had a license; Kitkatla concerned about the logging in a
particular area b/c of cultural trees; province issues permit to logging company.
I: Was the provincial law valid?
H: Yes. Act does not single out or impair band's status as "Indians", therefore the Act is valid & applicable.
R: s.91(24) gives Parliament exclusive jurisdiction over Indians and lands reserved for them
 Provincial legislation is challengeable on grounds its in relation to Indians;
 Act found valid
The court found the provincial act applicable b/c it did not single out or impair their status as Indians;
 this should have resolved immunity b/c Indians considered federal works and undertakings and
have inter-jurisdictional immunity, but in a different way than normal; they are immune from
provincial legislation that impaired members of the band in their “Indianness”
 Normal consequence of a finding that a provincial statute affected Indians in this way would mean
that the statute was inapplicable.
The SCC had to deal with s.88 of the Indian Act which said all laws are applicable to Indians;
 the SCC found in a previous case (Dick v Queen) that s.88 changed the law; makes applicable to
Indians provincial statutes which impair their status and capacity
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

Native land still protected b/c s.88 deals only with the people, not the land
Therefore, in order for the SCC to find that the provincial act applied to Indians, the SCC had to
find that the act related to people, not the land. Therefore, we have this weird ruling that the
provincial statute did not single out or impair the band's status as Indians.
Operability
Multiple Access v. McCutcheon (1982) SCC
F: Both the federal Companies Act and the Provincial Securities Act had prohibitions on insider trading;
M prosecuted by Ontario Securities Commission; argued Ontario provisions inoperative b/c they were in
conflict with federal provisions.
I: Was there a conflict?
H: No operability problem b/c no actual conflict b/t the federal & provincial provisions.
Analysis: SCC first found both acts valid (s.92(13) and s.91(2) or POGG).
 Dickson gets Double Aspect Doctrine wrong  he says a statute can have both a provincial and
federal aspect  in reality, only matters have double aspects  statutes only have one aspect (or
head of power) as they must belong to one level of government
o e.g. insider trading can have a federal and provincial aspect; but each respective law must
be assigned to a proper head of power.
 SCC finds there is no significant difference between the 2 provisions on insider trading;
Rule: Mere duplication, w/o actual conflict or contradiction is insufficient to bring in the doctrine of
paramountcy (but only one can still apply –i.e. no double prosecution)
 There needs to be conflict in operation, as where one enactment says yes, and one says no
o Must be a case in which a citizen is being told to comply with both; and if they comply
with one, they cannot comply with the other
o Once the court has declared a conflict, it will apply to all subsequent litigants on the same
conflict, but a citizen must bring it the first time b/c he/she is subject to an actual conflict
NB: Dicta in this case that feds have jurisdiction over securities under POGG.
Husky Oil Operations v. MNR (1995) SCC
F: Dealt with an alleged conflict between federal Bankruptcy Act and provincial legislation; Bankruptcy
and Insolvency is a federal head of power; a trustee distributes property to the creditors; in order to
determine what property belongs to the trustee, have to rely on provincial law; these laws differ from
province to province; it is typical for the provinces to enact legislation giving themselves a priority over
other creditors; not all creditors treated equally: secured creditors get first shot and are not subject to the
federal act, and there is then a statutory list under the act of preferred creditors; in this case, the objection
is that the effect of a Saskatchewan statute alters the priorities in the federal act; WCB is transformed by
the provincial act from a preferred creditor to a secured creditor; basically then the federal act says WCB
is a preferred creditor and the provincial act says they are secured;
MF supposed to be making contributions to WCB; went bankrupt; all their property vests in the trustee;
one asset that went to the trustee was debts owing to M from Husky; provisions of the Sask. Act made
head contractor (H) liable to WCB for payments that M never made; H allowed to set off the amount they
pay to WCB against the amount they owe to M; M owed WCB 240K; H owes 800K to M; under the
operation of the Act, H pays 240 to WCB and gives rest to trustee; the problem is that the federal act
demands the full amount be paid to trustee; H says they only owe the difference
I: Is the provincial statute inoperable?
H: Yes. Provincial statute inoperable.
R: Majority looks at the operation of the provincial statute and says it means WCB is getting its full
amount first, meaning it has been converted into a secured creditor; if it was a preferred creditor like the
federal act provided they would have to get in line and only get paid rateably; this is a conflict b/c it’s a re-
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ordering of the priorities and is in conflict with the federal act; cannot be both a preferred and secured
creditor.
Problem: The majority seems to conflate immunity and paramountcy.
 Wilson noted that by virtue of the presumption of constitutionality, a province should be assumed
to be legislating within their competence; if ambiguous, it will be read down to be constitutional;
as a result, Wilson found no conflict since the former should be read down to be not applicable
 Uses the new immunity argument - inapplicability preferable b/c bankruptcy is a federal matter,
and therefore any provincial statute which infringes on it not applicable (similar to the new
argument on applicability); the idea of a core federal mater.
This is different than operability where both statutes are valid, but conflicting.
NB: This really is a paramountcy problem despite what this case says
Law Society of BC v. Mangat (2002) SCC
F: M engaging in what the LSBC considers the practice of law for remuneration while not being part of the LSBC;
he was engaging in an immigration consultancy practice; LSBC seeks injunction to prohibit M from continuing; the
Legal Professions Act said you cannot practice law w/o certain requirements; however the Immigration Act says
someone can be represented by “any other counsel” and says the person can do so at “their expense”; M argued this
was a conflict.
I: Was this a conflict, such that the provincial act is inoperable?
H: Yes. Both statutes are valid, but they conflict such that compliance with both is not realistic. Provincial act
inoperative to the extent to the conflict - when there is a hearing in the IRB.
R: Both statutes are valid
 characterizes the matter as the “practice of law” and says it’s a double aspect matter
o immigration hearings are a federal aspect (s.91(25) - naturalization & aliens)
o regulation of legal professions are provincial (s.92(13))
SCC held that paramountcy was a more appropriate doctrine than the new version of immunity
 the fact that it’s a double aspect matter suggests this (need 2 valid statutes for paramountcy)
 also says paramountcy leaves more room for the provinces – federal principle
Test for determining Operability Problem:
 one statute must say yes and the other no with the result that you cannot comply with both simultaneously
 first have to decide what Parliament meant in the Immigration Act – decides “other counsel” must mean
non-lawyers and that they are entitled to charge fee b/c of the term about at “their expense”
o [don’t forget to first work out what Parliament means; statutory interpretation]
In this case, SCC says it is possible, but not realistic to comply with both statutes;
 M could have become a member of the LSBC, or just not charge fees, but these are not realistic
expectations
Rothmans, Benson & Hedges v. Saskatchewan (2005) SCC
F: The Federal Tobacco Act prohibited the promotion of tobacco products except as permitted by the statute; s.30(1)
made exception for retail locations, subject to regulations; Saskatchewan enacted Tobacco Controls Act which bans
all advertising in any premises where minors are permitted;
I: Was the provincial statute inoperative?
H: No, both valid and operable. Possible to comply with both statutes: (1) retail stores could exclude anyone under
18 or (2) retail stores don't have to promote tobacco products at all. Both acts have the same legislative purpose, so
the provincial act does not displace the federal legislative purpose.
R: SCC asks if federal legislation is sufficiently inconsistent with the provincial legislation to trigger paramountcy
(modification of paramountcy doctrine);
There are now 2 tests:
 Can a person simultaneously comply with both provisions?
 Does the provincial legislation displace or frustrate Parliament’s legislative purpose?
In this case, SCC finds federal Act depends for its validity on s.91(27) based on public purpose of health concerns;
 Retail location exception did not create a positive free-standing right to advertise; it’s a shield from
prosecution under the federal Act
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