Manitoba Govt. Employees Assn. v. Govt. of Manitoba et al., [1978] 1 SCR 1123

Supreme Court of Canada

Manitoba Govt. Employees Assn. v. Govt. of Manitoba et al., [1978] 1 S.C.R. 1123

Date: 1977-09-30

The Manitoba Government Employees Association Appellant;

and

The Government of Manitoba, The Manitoba Liquor Control Commission and The Government of Canada Respondents.

1977: February 22; 1977: September 30.

Present: Laskin C.J. and Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré JJ.

ON APPEAL FROM THE COURT OF QUEEN’S BENCH FOR MANITOBA

Constitutional law—Agreement between Canada and Manitoba providing for application of Anti-Inflation Act—Earlier collective agreement between Manitoba Government Employees Association and Liquor Control Commission—Whether employees and employer bound by Anti-Inflation Act and Guidelines—Anti-Inflation Act, 1974-75-76 (Can.), c. 75, s. 4(3)—The Executive Government Organization Act, 1970 (Man.), c. 17, s. 16.

The appellant Association brought an application in the Manitoba Court of Queen’s Bench for an order declaring and determining “(a) that the Memorandum of agreement purportedly made on February 25, 1976, between the Government of Canada and the Government of the Province of Manitoba does not have the effect of rendering the Anti‑Inflation Act and Guidelines made thereunder applicable to the provincial public sector in Manitoba as said term is defined in the Anti-Inflation Act and the said memorandum of agreement; (b) that the collective agreement dated February 5, 1976, made between the Manitoba Liquor Control Commission and the Manitoba Government Employees Association, is binding on the parties thereto and that a failure on the part of the Manitoba Liquor Control Commission to comply with the terms and conditions thereof, including the payment of the wages therein provided, would constitute a breach of the said agreement, and, as well, for an order to quash the order of the Administrator dated August 27, 1976, whereby the said Administrator purported, inter alia, to limit compensation increases to employees of the Manitoba Liquor Control Commission to 12% and to order payment of $300,000.00 to the Crown in right of Canada representing the purported excess wages paid since January 1, 1976, under the collective agreement dated February 5, 1976, made between the Manitoba Government

[Page 1124]

Employees Association and the Manitoba Liquor Control Commission.”

The application was dismissed on the ground that s. 16 of The Executive Government Organization Act, 1970 (Man.), c. 17, provided the necessary legislative authority for the provincial Order in Council authorizing the execution of the agreement between Canada and Manitoba which purported to bring into effect in that Province the provisions of the Anti‑Inflation Act, 1974-75-76 (Can.), c. 75, and the Guidelines made thereunder. From this decision an appeal was brought per saltum to this Court by the Court’s leave. The issue raised by the appeal turned upon the construction to be placed on s. 16 of The Executive Government Organization Act in conjunction with s. 4(3) of the Anti-Inflation Act, which authorizes the Federal Minister of Finance with the approval of the Governor in Council to enter into an agreement with the Province providing for the application of the Anti-Inflation Act and the Guidelines made thereunder, in accordance with the terms of the agreement.

Held (Laskin C.J. and Martland, Judson and Spence JJ. dissenting): The appeal should be allowed.

Per Ritchie, Pigeon, Dickson, Beetz and de Grandpré JJ.: The effect of the judgment below was that the Anti-Inflation Act and the Guidelines passed thereunder were incorporated as law in Manitoba by the agreement between Canada and Manitoba which was executed 16 days after the collective agreement was entered into between the appellant and the Manitoba Liquor Control Commission, pursuant to the provisions of The Labour Relations Act, 1972 (Man.), c. 75. This would mean that legislation of a general character, i.e., The Executive Government Organization Act, should be interpreted as affording authority to override subsequent legislation dealing with a particular subject, i.e., labour relations, by the passage of an Order in Council.

To accept the construction placed on s. 16 by the Court below would offend against three accepted rules of statutory interpretation in that it would give to a general statute a meaning which conflicts with special legislation, would dramatically affect vested interests and would construe the power accorded to the Executive under that section as including the right to authorize the Minister to enter into retroactive agreements.

The judge of first instance was in error in concluding that s. 16 provides the necessary legislative authority for the Order in Council authorizing the First Minister of

[Page 1125]

the Government of Manitoba to execute the agreement with the Government of Canada on behalf of that Province. The Order in Council in question was not effective to authorize the conclusion of an agreement changing the law of the Province in a manner inconsistent with specific legislation subsequently passed and in retroactive derogation of the vested rights of the appellant and the employees which it represents under its collective agreement with the Liquor Control Commission of Manitoba.

Per Laskin C.J. and Martland, Judson and Spence JJ., dissenting: Specific legislation such as was enacted by Nova Scotia, Prince Edward Island and New Brunswick, and confirmatory legislation such as was enacted by Ontario and Newfoundland (the former after the decision of this Court in the Anti-Inflation reference, [1976] 2 S.C.R. 373, the latter after the hearing in this Court but before the decision) does not determine the success of the challenge offered to the effectiveness of the federal Act and Guidelines in the Manitoba public sector in the present case. While it may more clearly establish their operative force in respect of the public sector in those Provinces, it cannot be said that general legislation such as is found in s. 16 is ipso facto ineffective for reaching the same end.

It is one thing to regard s. 16 as itself authorizing a change in provincial law by reason of an agreement authorized thereunder through which the change is made by incorporating into the agreement provisions of a federal statute to operate as provincial law. In such a case the mere entry into an agreement cannot accomplish such a change because the agreement leads nowhere except back to its source which is s. 16. That, however, is not this case. It is another thing to view s. 16 as providing a legislative base for an agreement which becomes operative under federal law and which makes that law, as federal law, applicable in a Province to the extent provided in the agreement. That is this case and s. 16 is apt for this purpose.

[Reference re Anti-Inflation Act, [1976] 2 S.C.R. 373, applied; Re Township of York and Township of North York (1925), 57 O.L.R. 644; Gustavson Drilling (1964) Ltd. v. Minister of National Revenue, [1977] 1 S.C.R. 271; Western Counties Railway Co. v. Windsor and Annapolis Railway Co. (1882), 7 App. Cas. 178, referred to.]

APPEAL per saltum from a judgment rendered by Nitikman J. in the Court of Queen’s Bench for Manitoba on an application brought by the Manitoba Government Employees Association.

[Page 1126]

Appeal allowed, Laskin C.J. and Martland, Judson and Spence JJ. dissenting.

W.L. Ritchie, Q.C., and W.D. Hamilton, for the appellant.

B.F. Squair, for the respondent, the Government of Manitoba.

J. Scollin, Q.C., and D. Frayer, for the respondent, the Government of Canada.

J.S. Walker, Q.C., for the respondent, the Manitoba Liquor Control Commission.

The judgment of Laskin C.J. and Martland, Judson and Spence JJ. was delivered by

THE CHIEF JUSTICE (dissenting)—The issue in this appeal, which comes here per saltum through the required consents of the parties and by leave of this Court, is whether certain employees in the public sector in Manitoba, namely, employees of the Manitoba Liquor Control Commission, and the Commission itself as their employer are bound by the federal Anti-Inflation Act, 1974-75-76 (Can.), c. 75, and Guidelines authorized thereunder. If they are so bound, the consequence would be to make their collective agreement of February 9, 1976 (declared to be retroactive to January 1, 1976) subject to the restraints of the Act and Guidelines.

The issue turns on the effect, pursuant to s. 4(3) of the Anti-Inflation Act, of an agreement made by the Government of Manitoba, through its first Minister, with the Government of Canada, through its Minister of Finance, on February 25, 1976 providing for the application of the Anti-Inflation Act and Guidelines to the public sector in Manitoba, as defined in the agreement. Three recitals in this agreement should be noticed, as follows:

AND WHEREAS SUBSECTION 4(3) of the federal act authorizes the Federal Minister with the approval of the Governor in Council to enter into an agreement with the Province providing for the application of the federal act and the guidelines made thereunder, in accordance with the terms of the agreement

…

[Page 1127]

AND WHEREAS the Federal Minister has been authorized to enter into this agreement pursuant to Order in Council P.C. 1976-338 dated this 17th day of February, 1976.

AND WHEREAS the Provincial Minister has been authorized to enter into this agreement pursuant to Order in Council 10-76 dated this 14th day of January, 1976.

The provincial Order in Council, referred to in the last-mentioned recital, begins with a reference to s. 16 of The Executive Government Organization Act, 1970 (Man.), c. 17, and includes also the following paragraphs:

AND WHEREAS the Parliament of Canada has enacted the Anti-Inflation Act which provides, among other matters, authority for the Minister of Finance of Canada to enter into an agreement with the government of a province providing for the application of the Anti-Inflation Act and the guidelines established thereunder to Her Majesty in right of the province, agents of Her Majesty in right of the province and certain other bodies within the provincial sector, including municipalities in the province and municipal or public bodies performing a function of government in the province;

AND WHEREAS it is deemed for the benefit of the residents of Manitoba for the Government of Manitoba to enter into an agreement with the Minister of Finance providing for the application of the Anti-Inflation Act and the guidelines established thereunder to Her Majesty in right of the Province, agents of Her Majesty in right of the province and certain other bodies within the provincial sector, including municipalities in the province and municipal or public bodies performing a function of government in the province;

The Order in Council concludes by authorizing entry into an agreement in the form set out in the Schedule or a form to like effect. It is not disputed that the agreement of February 25, 1976, conforms to the authorization given by the Order-in-Council.

Section 16 of The Executive Government Organization Act provides as follows:

16. The Lieutenant Governor in Council may authorize a minister, for and on behalf of the government, or an agency of the government, to enter into an agreement with

(a) the Government of Canada, or a minister or agency of the Government of Canada; or

[Page 1128]

(b) the government of another province of Canada, or a minister or agency of the government of another province of Canada; or

(c) a municipality, school district, school division, or other local authority; or

(d) any person or group of persons;

for the benefit or purposes of the residents of Manitoba or any part thereof.

As already noted, the Order in Council authorizing the agreement entered into pursuant to this provision recites that it was entered into for the benefit of the residents of Manitoba and there is no suggestion here that this is challengeable, certainly not in the present case.

What is left to consider, therefore, is whether the operation of s. 4(3) of the Anti-Inflation Act upon the agreement, authorized on each side by statutory authority, results in making the Anti-Inflation Act and Guidelines operative in the Manitoba public sector as defined in the agreement and to have effect by prevailing over any inconsistent provincial legislation as provided by s. 4.1(1) of the Anti-Inflation Act. Before proceeding to examine s. 4(3), I wish to take account of a subsidiary submission by counsel for the appellant, touching the retroactive operation of the agreement which, under its terms, was to apply from and after October 14, 1975, subject to certain termination provisions not here material. If in the setting of s. 4(3) and s. 4.1(1) of the Anti-Inflation Act, the agreement operates according to its terms, there is no legal vice in its retroactive operation.

The validity of the Anti-Inflation Act and Guidelines, including s. 4, was upheld by this Court in Reference re Anti-Inflation Act[1]. The Court made it clear that federal authority, in the circumstances, was broad enough to have enabled the Parliament of Canada to embrace the provincial public sector without the “contracting in” provisions of s. 4(3)(4). It is true that s. 4(2) excludes the provincial public sector from the embrace of the Anti-Inflation Act but it is a qualified exclusion made subject to s. 4(3).

[Page 1129]

Subsections (3) and (4) of s. 4, different in their scope, read as follows:

(3) The Minister may, with the approval of the Governor in Council, enter into an agreement with the government of a province providing for the application of this Act and the guidelines to

(a) Her Majesty in right of that province,

(b) agents of Her Majesty in that right,

(c) bodies described in paragraphs (2)(b) and (c), and

(d) bodies prescribed by the regulations pursuant to paragraph 2(d),

or any of such bodies, agents and Her Majesty in that right, and where any such agreement is entered into, this Act is binding in accordance with the terms of the agreement and the guidelines apply in accordance with the terms thereof with effect on and after the day on and after which the guidelines apply, by virtue of the operation of this Act, with respect to Her Majesty in right of Canada.

(4) The Minister may, with the approval of the Governor in Council, enter into an agreement with the government of a province providing for the application to

(a) Her Majesty in right of that province,

(b) agents of Her Majesty in that right,

(c) bodies described in paragraphs (2)(b) and (c), and

(d) bodies prescribed by the regulations pursuant to paragraph (2)(d),

or any of such bodies, agents and Her Majesty in that right, of such of the guidelines made under subsection 3(2) as are applicable to public sector suppliers of commodities or services and public sector employees and their employers, and for the administration and enforcement of those guidelines in their application thereto in a manner provided for in the agreement or as determined by the government of the province.

The differences in these two provisions are, in my view, of central importance for the determination of this appeal. Section 4(3) provides for an intergovernmental agreement “for the application of this Act and the guidelines” to the provincial public sector and makes the Act binding in accordance with the terms of the agreement and, further, the Guidelines apply in accordance with the terms of the agreement. By contrast, s. 4(4) relates to an inter‑governmental agreement that does not provide for the application of the Act and Guidelines

[Page 1130]

to the provincial public sector but only for bringing the provincial public sector under certain Guidelines and for administration of those Guidelines as provided in the agreement or as determined by the Government of the Province.

It may be that if, in the present case, Manitoba had sought to support the application of the Guidelines to its provincial public sector under s. 4(4) of the Anti-Inflation Act, so as to make the collective agreement aforementioned subject to such Guidelines by virtue only of the agreement authorized under s. 16 of The Executive Government Organization Act, it would have been ineffective for that purpose. In short, a s. 4(4) agreement might draw no force from the Anti-Inflation Act but would require provincial legislation of a more pronounced kind than that of s. 16 of The Executive Government Organization Act, to enable the Guidelines to prevail against inconsistent provincial legislation.

The contention put forward by the appellant in this case would draw no distinction between a s. 4(3) agreement and a s. 4(4) agreement and, indeed, its submission is that the authorization for the agreement in the present case under s. 16 of The Executive Government Organization Act does not take the present case beyond the situation in which Ontario found itself in the Anti-Inflation reference in seeking to support a s. 4(3) agreement by an Order in Council, without the back-up of authorizing legislation. I cannot agree that s. 16 of The Executive Government Organization Act accomplishes nothing so far as s. 4(3) is concerned.

In its reasons in the Anti-Inflation reference concerning the Ontario agreement, this Court, which was unanimous on this issue, referred to the operative effect of s. 4(3) as follows (68 D.L.R. (3d) 452 at p. 502):

…s. 4(3) does not involve any delegation of legislative power by Parliament. There is not here any delegate upon which a power to enact legislation is conferred; rather there is an incorporation of federal enactments as supervening law in Ontario. Again, there is no delegation of administrative power by Parliament; if anything, there is delegation by the Government of Ontario to the

[Page 1131]

federal authorities. Administration and enforcement of the Act and the Guidelines are to proceed as a federal exercise, although the scope of the application of the Act and Guidelines to the provincial public sector is governed by the agreement.

I contrast with this the effect of s. 4(4) which, in my view, contemplates that the administration and enforcement of the Guidelines would proceed as a provincial exercise, incorporating the Guidelines by reference as part of provincial law, and thereby requiring some effective provision that would make the Guidelines, as provincial law, prevail over any other provincial legislation in case of inconsistency.

I would add here, to avoid misunderstanding, that the reference in the above-quoted passage to “incorporation of federal enactments as supervening law in Ontario” is a reference to such incorporation through an agreement which is concluded in pursuance of s. 4(3), a provision which makes the Act and Guidelines binding in accordance with the terms of the agreement. In this sense, it is, as was stated in the quoted passage, a federal exercise not a provincial one.

Ontario, in the Anti-Inflation reference, like Manitoba here, was purporting to enter into a s. 4(3) agreement, and it was in that light that the Court noted that the Ontario Government’s action “was not backed by provincial legislative authority as was the case in respect of agreements with all the other Provinces save Newfoundland which, like Ontario, proceeded by Order in Council” (68 D.L.R. (3d) 452, at pp. 503-4).

Some of the s. 4(3) agreements, for example those of Nova Scotia and Prince Edward Island, were backed by provincial legislation which was much more explicit as to the binding effect of the federal Act and Guidelines upon the provincial public sector than is the Manitoba legislation in this case: see the Anti-Inflation (Nova Scotia) Act, 1975 (N.S.), c. 54; An Act to Authorize a Federal-Provincial Anti-Inflation Agreement, 1975, (P.E.I), c. 63. New Brunswick enacted legislation which, without being as explicit as that of Nova Scotia and of Prince Edward Island, was particular authorizing legislation relating to the

[Page 1132]

application of the Anti-Inflation Act: see 1975 (N.B.), c. 93. British Columbia legislation, the Anti-Inflation Measures Act, enacted June 9, 1976, appears to authorize a s. 4(4) agreement by reason of its provision for the appointment of persons to carry out the purposes of the Act and the terms of any agreement entered into with Canada for the application of the federal Act and Guidelines in the provincial public sector. Alberta passed somewhat similar legislation, The Temporary Anti-Inflation Measures Act, 1975 (Alta.), c. 83, which went farther in the s. 4(4) direction by establishing its own Anti-Inflation Measures Board and its own enforcement procedures. Quebec, on the other hand, passed its own Anti-Inflation Act (see 1975 (Que.), c. 16), defining its public sector scope and its administration under its provisions without any apparent dovetailing with the federal Act and Guidelines. Ontario cured the defect shown up by this Court in the Anti-Inflation reference by legislation ratifying the purported s. 4(3) agreement that the Government had made, and by providing that the agreement as ratified by the Act would prevail against any other law of Ontario in case of inconsistency: see The Anti-Inflation Agreement Act, 1976 (Ont.), c. 61. Newfoundland also enacted a confirming statute The Federal-Provincial Anti-Inflation Agreement Act, 1976 (Nfld.), No. 52, which expressly provided that the federal Act and Guidelines be binding in the provincial public sector and that they were to have effect notwithstanding anything to the contrary in any other Newfoundland statute or law.

Such specific legislation as was enacted by Nova Scotia, Prince Edward Island and New Brunswick, and such confirmatory legislation as was enacted by Ontario and Newfoundland (the former after the decision of this Court in the Anti-Inflation reference, the latter after the hearing in this Court but before the decision) does not determine the success of the challenge offered to the effectiveness of the federal Act and Guidelines in the Manitoba public sector in the present case. While it may more clearly establish their operative force in respect of the public sector in those Provinces, it cannot be said that general legislation such as is found in s. 16 of The Executive Government

[Page 1133]

Organization Act is ipso facto ineffective for reaching the same end.

It is one thing to regard s. 16 as itself authorizing a change in provincial law by reason of an agreement authorized thereunder through which the change is made by incorporating into the agreement provisions of a federal statute to operate as provincial law. I would agree that in such a case the mere entry into an agreement cannot accomplish such a change because the agreement leads nowhere except back to its source which is s. 16. That, however, is not this case. It is another thing to view s. 16 as providing a legislative base for an agreement which becomes operative under federal law and which makes that law, as federal law, applicable in a Province to the extent provided in the agreement. That is this case and, in my opinion, s. 16 is apt for this purpose.

I would dismiss the appeal.

The judgment of Ritchie, Pigeon, Dickson, Beetz and de Grandpré JJ. was delivered by

RITCHIE J.—This is an appeal brought per saltum with leave of this Court and consent of all parties concerned from a judgment rendered by Mr. Justice Nitikman in Manitoba Court of Queen’s Bench before whom the present application was brought by the Manitoba Government Employees Association. Mr. Justice Nitikman summarized the nature of the Order applied for at the outset of his judgment in the following terms:

Applicant moves for an order declaring and determining

(a) “that the Memorandum of agreement purportedly made on February 25, 1976, between the Government of Canada and the Government of the Province of Manitoba does not have the effect of rendering the Anti-Inflation Act and guidelines made thereunder applicable to the provincial public sector in Manitoba as said term is defined in the Anti-Inflation Act and the said memorandum of agreement.”

(b) “that the collective agreement dated February 5, 1976 made between the Manitoba Liquor Control Commission and the Manitoba Government Employees Association, is binding on the parties thereto and that a failure on the part of the Manitoba Liquor Control Commission to comply with the terms

[Page 1134]

and conditions thereof, including the payment of the wages therein provided, would constitute a breach of the said agreement.”

and, as well, for an order to quash the order of the Administrator dated August 27, 1976, whereby the said Administrator purported to, inter alia, limit compensation increases to employees of the Manitoba Liquor Control Commission to 12% and to order payment of $300,000.00 to the Crown in right of Canada representing the purported excess wages paid since January 1, 1976, under the collective agreement dated February 5, 1976, made between the Manitoba Government Employees Association and the Manitoba Liquor Control Commission.

In dismissing the application, Mr. Justice Nitikman founded his judgment on the ground that s. 16 of The Executive Government Organization Act, 1970 (Man.), c. 17, which is hereinafter recited, provided the necessary legislative authority for the provincial Order in Council authorizing the execution of the agreement between Canada and Manitoba which purported to bring into effect in that Province the provisions of the Anti-Inflation Act, 1974-75-76 (Can.), 75, and the Guidelines made thereunder.

The learned judge of first instance concluded his reasons for judgment with the following paragraph:

For all of the reasons previously set out I hold that Section 16 of the Executive Government Organization Act provides the necessary legislative authority for Order‑in‑Council 10-76 which authorized the Honourable the First Minister of the Government of Manitoba to execute on behalf of Manitoba the agreement with the Government of Canada pursuant to Section 4(3) of the Anti-Inflation Act and as a result of the execution of the agreement between Canada and Manitoba the Anti-Inflation Act is binding on and the Guidelines made thereunder apply to the public sector of Manitoba and have been since the execution of the agreement which is dated February 25, 1976, with effect from and after October 14, 1975, as set out in said agreement.

Having reached the conclusion on the first sought order, it becomes unnecessary to deal with the second and third orders.

I think it perhaps pertinent to observe at the outset that the notice of motion for leave to appeal to this Court was made by the Manitoba Govern-

[Page 1135]

ment Employees’ Association and contained the following, amongst other, grounds:

(3) That the proceedings in this cause involve the interpretation of the Judgment of this Honourable Court pronounced on July 12, 1976 in the Reference on the Constitutionality of The Anti-Inflation Act and, in particular, the remarks made by The Right Honourable Bora Laskin, P.C., C.J.C., with respect to the legal effect of agreements entered into by the Provinces pursuant to Section 4(3) of The Anti-Inflation Act and the manner in which The Anti-Inflation Act and Guidelines made thereunder are to be rendered applicable to the Provincial Public Sectors, in particular, the provincial public sector of Manitoba;

(4) That the Applicant’s position rests, to a great extent, upon the interpretation to be given to the remarks of this Honourable Court in the Constitutional Reference on The Anti-Inflation Act, and in particular “…the statement of the Chief Justice to the effect that all the other provinces save Newfoundland and Ontario had legislative authority in respect of their agreements with Canada…”, and whether, by such a statement, this Honourable Court decided all such agreements had proper statutory authority;

(5) That the proceedings in this cause involve the interpretation and application of Section 16 of The Executive Government Organization Act of Manitoba which was enacted in 1970, and in particular, whether or not said Section provides sufficient statutory authority for the Province of Manitoba to enter into an agreement with the Government of Canada pursuant to Section 4(3) of The Anti-Inflation Act, which would have the effect of altering the existing law of Manitoba or of extinguishing or modifying or otherwise interfering with the rights which have been vested under the collective agreement made between the Manitoba Government Employees Association and one of the agencies of the Government of Manitoba, namely, the Manitoba Liquor Control Commission, which collective agreement antedates the agreement purportedly made between the Government of Canada and the Government of the Province of Manitoba, and which collective agreement was entered into pursuant to the provisions of the The Labour Relations Act enacted in 1972;…

In view of the fact that in my opinion the issue raised by this appeal turns upon the construction to be placed on s. 16 of The Executive Government Organization Act in conjunction with s. 4(3) of the

[Page 1136]

Anti-Inflation Act, I find it necessary to reproduce that section at the outset:

4. (3) The Minister may, with the approval of the Governor in Council, enter into an agreement with the government of a province providing for the application of this Act and the guidelines to

(a) Her Majesty in right of that province,

(b) agents of Her Majesty in that right,

(c) bodies described in paragraphs (2)(b) and (c), and

(d) bodies prescribed by the regulations pursuant to paragraph (2)(d),

or any of such bodies, agents and Her Majesty in that right, and where any such agreement is entered into, this Act is binding in accordance with the terms of the agreement and the guidelines apply in accordance with the terms thereof with effect on and after the day on and after which the guidelines apply, by virtue of the operation of this Act, with respect to Her Majesty in right of Canada.

In the Reference re Anti-Inflation Act, (hereinafter referred to as “the Reference”) which is now conveniently reported in 68 D.L.R. (3d) at p. 452, the second question posed for the opinion of the Court was phrased as follows:

2. If the Anti-Inflation Act is intra vires the Parliament of Canada, is the Agreement entitled “Between the Government of Canada and the Government of the Province of Ontario”, entered into on January 13, 1976, (a copy of which is annexed hereto together with copies of the Orders of the Governor in Council and the Lieutenant Governor in Council as Annex “B”) effective under the Anti-Inflation Act to render that Act binding on, and the Anti-Inflation Guidelines made thereunder applicable to, the provincial public sector in Ontario as defined in the Agreement.

In that case the agreement in question had been executed on behalf of the Province of Ontario under the authority of an Order in Council unsupported by any provincial legislation authorizing its execution.

In the course of delivering the unanimous opinion of the Court that the second question should be answered in the negative, Chief Justice Laskin had occasion to say, at p. 504:

If the agreement alone has the effect contended for, it imposes the Guidelines and accompanying sanctions of the provincial public sector, thereby altering the existing

[Page 1137]

law of Ontario and precluding changes in that law that are inconsistent with the Guidelines: see s. 4(1) of the Anti-Inflation Act. I am unable to appreciate how the provincial Executive, suo motu, can accomplish such a change. I agree, of course, that the Executive or a Minister authorized by it may be the proper signatory of an agreement to which the Government of Ontario is a party. That, however, is merely the formality of execution; and even if the agreement is binding upon the Government of Ontario as such, on the analogy of treaties which may bind the contracting parties but yet be without domestic force, that would not make the agreement part of the law of Ontario binding upon persons purportedly affected by it.

The contention of the Attorney-General of Ontario that the Crown in right of Ontario, represented by the Lieutenant-Governor, has a common law power and capacity to enter into agreements if there are no statutory restrictions does not answer the question of authority to effect changes in Ontario law through such agreements. The issue here is not prerogative power alone or the authority to exercise a prerogative power when given by Order in Council so as to place responsibility for it upon the Ministers present at the meeting of the Executive Council. Nor does the issue engage any concern with responsible Government and the political answerability of the Ministers to the Legislative Assembly. Rather what is at issue is the right of the Crown, although duly protected by an Order in Council, to bind its subjects in the Province to laws not enacted by the Legislature nor made applicable to such subjects by adoption under authorizing legislation. There is no principle in this country, as there is not in Great Britain, that the Crown may legislate by proclamation or Order in Council to bind citizens where it so acts without support of a statute of the Legislature: see Dicey, Law of the Constitution, 10th ed. (1959), pp. 50-54.

The fact that the Crown can contract carries the matter no farther than that the contract may be binding upon it or that it may sue the other contracting party on the contract. What we have here is not a contract in this sense at all, but an agreement to have certain legislative enactments become operative as provincial law.

Finally, in one of the closing passages of his judgment, the Chief Justice observed:

It is one thing for the Crown in right of a Province to contract for itself; it is a completely different thing for it to contract for the application to its inhabitants, and to labour organizations in the Province, of laws to govern their operations and relations without statutory author-

[Page 1138]

ity to that end. This would be, in effect, to legislate in the guise of a contract. The terms of the present agreement, at their narrowest, embrace more than what the Crown can bring under contractual obligation of its own authority.

I have quoted at such length from the judgment of the Chief Justice in his answer to the second question posed by the Reference because I was one of those who agreed with it and I accept it as a statement of the existing law in this country.

The first covenant of the agreement entered into between the Government of Canada and the Province of Manitoba on February 25, 1976, provided that:

(1) Canada and the Province hereby agree that the federal act and the national guidelines shall apply to the provincial public sector.

This covenant purported to subject the provincial public sector to the provisions of the Anti‑Inflation Act and the Guidelines made thereunder which were at variance with the terms of a collective agreement entered into between the appellant and the Manitoba Liquor Control Commission made pursuant to the provisions of The Labour Relations Act of Manitoba, 1972 (Man.), c. 75. In the implementation of the covenant above referred to and pursuant to the authority vested in him by s. 20(1) of the Anti-Inflation Act, the Anti-Inflation Administrator of that Act made an order overriding the terms of the collective agreement and limiting any increase in the salaries of the employees to a maximum annual average increase of 12 per cent and requiring the Liquor Control Commission of Manitoba to repay to Her Majesty in right of Canada the amount of increases paid in accordance with the collective agreement between January 1, 1976, and the date of the order (August 27, 1976). This amounted to the sum of $300,000.

I had thought that the negative answer of this Court to the second question posed by the Reference constituted a decision that the public sector in a province could only be bound by a s. 4(3) agreement with the Government of Canada when the execution of that agreement had been authorized by a statute of the province directed to that end, and that an order of the Lieutenant-Governor

[Page 1139]

in Council unsupported by any such legislation and purporting to provide such authority was ineffective to bind the employees in the provincial public sector. As will appear from the passages quoted above, the Reference was concerned with an order of the Lieutenant‑Governor in Council of Ontario purporting to authorize the signing of such an agreement and it was my understanding that it was because this Order in Council “was not backed by provincial legislative authority” that it was found to be ineffective to make the Anti‑Inflation Act and Guidelines applicable to the provincial public sector in Ontario.

Having regard to this finding, it appears to me that the question to be answered in this appeal is whether the Order in Council relied on in this case was “backed up” by any statute of the Province of Manitoba authorizing its execution and thereby requiring the employees in the public sector of that Province to comply with terms basically different from those contained in the outstanding collective agreement duly made and authorized under the law of Manitoba as it existed at the time when it was made.

In the Order in Council authorizing the Government of Manitoba to enter into the agreement with the Government of Canada, the provisions of s. 16 of The Executive Government Organization Act are recited as follows:

WHEREAS section 16 of The Executive Government Organization Act, being chapter E170 of The Revised Statutes, provides in part as follows:

16. The Lieutenant Governor in Council may authorize a minister, for and on behalf of the government, or an agency of the government, to enter into an agreement with

(a) the Government of Canada, or a minister or agency of the Government of Canada; or

(b) …

(c) …

(d) …

for the benefit or purposes of the residents of Manitoba or any part thereof.

The Order then proceeds to recite that:

…it is deemed for the benefit of the residents of Manitoba for the Government of Manitoba to enter into an agreement with the Minister of Finance providing for

[Page 1140]

the application of the Anti-Inflation Act and the guidelines established thereunder to Her Majesty in right of the province,…

And in conclusion it is recommended:

THAT the Government of Manitoba be authorized to enter into an agreement with the Government of Canada… providing for the application of the Anti-Inflation Act and the guidelines established thereunder to the provincial public sector and that the Honourable the First Minister of the Government of Manitoba be authorized to execute the agreement for and on behalf of the Government of Manitoba.

(The italics are my own.)

It will be observed that The Executive Government Organization Act (1970) is a general statute making no reference to any specific area of government action but what is contended here is that s. 16 nevertheless vests in the Lieutenant-Governor in Council authority to enter into binding agreements having the force of law and containing terms which are inconsistent with the provisions of a statute dealing with the specific area of labour relations (The Labour Relations Act (1972)) which was enacted two years later. Section 64 of The Labour Relations Act provides that:

A collective agreement entered into by a bargaining agent is, subject to and for the purpose of this Act, binding upon

(a) The bargaining agent and every employee in the unit of employees to which the collective agreement applies;

(b) The employer who has entered into the collective agreement or on whose behalf the collective agreement has been entered into;…

The collective agreement in question was entered into by the duly certified bargaining agent of the appellant for the purpose, amongst other things, of establishing and maintaining rates of pay, hours of work and other working conditions and conditions of employment. In fulfilment of this purpose the agreement contained an elaborate schedule establishing rates of pay for various classes of employees and there can be little doubt that the provision for these rates had the force of law.

Section 4.1(1) of the Anti-Inflation Act is concerned with:

[Page 1141]

4.1 (1) Any body that, pursuant to any other Act or law, establishes or approves the prices or profit margins of any… person to whom the guidelines or any provision or provisions of the guidelines apply…

and which provides that:

…to the extent that those guidelines are inconsistent with any Act or law otherwise governing that body in the exercise of its powers and the performance of its duties and functions, the guidelines prevail.

The effect of Mr. Justice Nitikman’s judgment is that the Anti-Inflation Act and the Guidelines passed thereunder were incorporated as law in Manitoba by the agreement between Canada and Manitoba which was executed 16 days after the collective agreement. This would mean that legislation of a general character, i.e., The Executive Government Organization Act, should be interpreted as affording authority to override subsequent legislation dealing with a particular subject, i.e., labour relations, by the passage of an Order in Council.

This reasoning appears to me to run contrary to the general principle expressed in the following terms in Halsbury’s Laws of England, 3rd ed., vol. 36 at p. 468:

To the extent that the continued application of a general enactment to a particular case is inconsistent with special provision subsequently made as respects that case, the general enactment is overridden by the particular, the effect of the latter being to exempt the case in question from the operation of the general enactment or, in other words, to repeal the general enactment in relation to that case.

This is the principle adopted by Riddell J.A. in Re Township of York and Township of North York[2] where he said, at p. 648:

It is, of course, elementary that special legislation overrides general legislation in case of a conflict—the general maxim is Generalia specialibus non derogant…—even where the general legislation is subsequent: Barker v. Edgar, [1898] A.C. 748, at p. 754, in the Judicial Committee. The reason is that the Legislature has given attention to the particular subject and made provision for it, and the presumption is that such provision is not to be interfered with by general legislation intended for a wide range of objects:…

[Page 1142]

Mr. Justice Nitikman, while recognizing the validity of this principle, found it inapplicable to the circumstances in the present case saying:

I agree with the general principle of statutory construction that in proper circumstances the provisions of a specific Act override, supersede and take precedence over the provisions of a general act. It is, however, my considered opinion that principle is not in issue here.

The learned judge proceeded to observe that

It is not Section 16 of the Executive Government Organization Act which creates any change in provincial legislation. Section 16 is only the legislative authority to the Executive Government of Manitoba to execute the agreement with the Government of Canada pursuant to Section 4(3) of Anti-Inflation Act.

On the conclusion of the agreement between Canada and Manitoba dated February 25, 1976, pursuant to Section 4(3) of the Anti-Inflation Act, the said Act and the guidelines thereunder came into operation applicable to the Manitoba Public sector with effect from and after October 15, 1975. This Federal enactment rendered inoperative any inconsistent provincial legislation, because enactments of Parliament within its competency override provincial legislation.

It will be seen that these observations are predicated on the learned judge’s assumption that s. 16 affords legislative authority to the Executive Government to execute the section 4(3) agreement and thereby bring the Anti-Inflation Act and the Guidelines into operation as a federal enactment rendering inoperative any inconsistent provincial legislation. As I have indicated, this is, in my opinion, the question which lies at the very heart of this appeal. In the course of his reasons for judgment in the Reference at p. 503, the Chief Justice pointed out that it was not suggested in that case “that the authority of the Provincial Executive for the execution of the agreement in the name of the Government of Ontario came from Parliament” nor did I understand that any such suggestion was made in this case. In the Reference there was no legislative authority to “back up” the Ontario Order in Council and to me the whole question here is whether or not s. 16 provided that authority in Manitoba.

In this regard I adopt the submission made on behalf of the Government of Canada and con-

[Page 1143]

tained in the following passage to be found in the factum of the Deputy Attorney General:

Although, as the trial judge observes (case p. 134, 11.19-24), it is not section 16 of The Executive Government Organization Act which creates any change in Provincial legislation, this Respondent recognizes that section 16 cannot provide a foundation for the agreement in this case unless that section does authorize the Executive to suspend the operation of other Provincial legislation.

In my opinion, s. 16 does no more than authorize the making of agreements as therein specified but it is lacking in any provision that such agreements once entered into will be effective to suspend the operation of other provincial legislation or constitute legislation binding on employees in the public sector of the Province of Manitoba. If the section is to be read as giving legislative force to all agreements entered into under the authority of an Order in Council on the ground that the Executive deems such an agreement to be “for the benefit or purposes of the residents of Manitoba” then this would appear to me to constitute a delegation of legislative power amounting to an abdication by the legislature of its ultimate authority to pass laws “for the benefit or purposes of the residents of Manitoba”.

Mr. Justice Nitikman has pointed out that the effect of treating the agreement between Canada and Manitoba as having been authorized by The Executive Government Organization Act, entails holding that:

…the said Act and the guidelines thereunder came into operation applicable to the Manitoba public sector with effect from and after October 15, 1975.

This gives retroactive effect to the authority vested in the executive under s. 16 and the rule in this regard as applicable to Canadian statutes was clearly stated by Mr. Justice Dickson in this Court in the case of Gustavson Drilling (1964) Limited v. Minister of National Revenue[3], where he said, at p. 279:

The general rule is that statutes are not to be construed as having retrospective operation unless such a construction is expressly or by necessary implication required by the language of the Act.

[Page 1144]

I find no language in The Executive Government Organization Act which either expressly or by necessary implication requires retroactive construction to be given to that statute.

There is another principle of statutory interpretation which appears to me to mitigate against the construction which Mr. Justice Nitikman places on s. 16, and that is that the effect which he gives to the legislation would result in extinguishing rights vested in employees in the public sector in Manitoba pursuant to the collective agreement hereinbefore referred to. The decision of the Administrator of the Anti-Inflation Act makes it plain that the implementation of the proposed s. 4(3) agreement would drastically alter the wage scale of employees of the Manitoba Liquor Control Commission and would do so, as I have said, with retrospective effect.

In this regard I refer to the opinion delivered by Lord Watson in the Privy Council in Western Counties Railway Co. v. Windsor and Annapolis Railway Co.[4], where he said:

The canon of construction applicable to such a statute is that it must not be deemed to take away or extinguish the right of the respondent company, unless it appear, by express words, or by plain implication that it was the intention of the Legislature to do so.

And the following passage is to be found later in the same opinion:

Thus far, however, the law appears to be plain—that in order to take away the right it is not sufficient to shew that the thing sanctioned by the Act, if done, will of sheer… necessity put an end to the right, it must also be shewn that the Legislature have authorized the thing to be done at all events, and irrespective of its possible interference with existing rights.

And it is further stated that:

There is a great difference between giving authority to make an agreement and authorizing it to be made and forthwith carried out so as to override and destroy all private rights that may stand in its way.

In my view to accept the construction placed on s. 16 by Mr. Justice Nitikman would offend against three accepted rules of statutory interpre-

[Page 1145]

tation in that it would give to a general statute a meaning which conflicts with special legislation, would dramatically affect vested interests and would construe the power accorded to the Executive under that section as including the right to authorize the Minister to enter into retroactive agreements.

In reaching his conclusion, Mr. Justice Nitikman found the following excerpt from the reasons for judgment of the Chief Justice in the Reference to be “weighty and highly persuasive”, and his interpretation of it appears to have coloured his reasoning at least in some degree. The passage to which reference is made from the judgment of the Chief Justice occurs at p. 503 where, after referring to the lack of legislative authority for the Order in Council passed in that case, he went on to say:

…it was not backed by provincial legislative authority as was the case in respect of the agreements with all the other Provinces save Newfoundland which, like Ontario, proceeded by order in council.

I think it should be pointed out that no question as to the validity of s. 16 of The Executive Government Organization Act was at issue on the Reference, and that if the Chief Justice’s statement can be considered as an oblique reference to that section, it cannot, in my opinion, be regarded as having been necessary to the determination of the questions there at issue.

Nor do I think that the passage last quoted is to be treated as a definitive comment on the construction to be placed on the legislation of “all other Provinces” authorizing the making of agreements with the Government of Canada, although there are cases of which British Columbia is an example, where the legislative authority is so clearly spelled out as to give rise to no difficulty.

The British Columbia Anti-Inflation Measures Act, (Bill 16 of 1976) which was proclaimed in force on June 21, 1976, provides:

Sec. 5. Agreements.—The Minister may, on behalf of the Government and with the approval of the Lieutenant-Governor in Council, enter into agreements

(a) with Canada respecting the application of the Anti-Inflation Act (Canada), the regulations and Federal guidelines in the Province, and the manner and extent to which the Anti-Inflation Act (Canada),

[Page 1146]

the regulations, or the Federal guidelines shall apply to the prices of commodities or services and the compensation of employees in the Provincial public sector, and…

(The italics are my own.)

The glaring difference between this type of legislation and The Executive Government Organization Act here in question will be at once apparent.

With the greatest respect for those who may entertain a different view, I am of opinion that Mr. Justice Nitikman was in error in concluding that s. 16 of The Executive Government Organization Act provides the necessary legislative authority for the Order in Council authorizing the first minister of the Government of Manitoba to execute the agreement with the Government of Canada on behalf of that Province. In the view which I take of the matter, the Order in Council in question was not effective to authorize the conclusion of an agreement changing the law of the Province in a manner inconsistent with specific legislation subsequently passed and in retroactive derogation of the vested rights of the appellant and the employees which it represents under its collective agreement with the Liquor Control Commission of Manitoba.

It follows that I would allow this appeal, set aside the judgment of Mr. Justice Nitikman and grant the order declaring and determining that the memorandum of agreement purportedly made on February 25, 1976, between the Government of Canada and the Government of Manitoba, does not have the effect of rendering the Anti-Inflation Act and Guidelines made thereunder applicable to the Provincial public sector in Manitoba; and I would further direct that the collective agreement dated February 5, 1976, made between the Manitoba Liquor Control Commission and the Manitoba Government Employees Association is binding on the parties thereto.

I would also grant the appellant’s application for an order to quash the order of Donald D. Tansley, the Administrator under the Anti-Inflation Act, dated 27th of August, 1976.

The appellant is entitled to its costs throughout.

[Page 1147]

Judgment accordingly, LASKIN C.J. and MARTLAND, JUDSON and SPENCE JJ. dissenting.

Solicitors for the appellant: Thompson, Dorfman, Sweatman, Winnipeg.

Solicitors for the Government of Manitoba: Deputy Attorney General of Manitoba, Winnipeg.

Solicitors for the Manitoba Liquor Control Commission: Walker, Cristall & Pandya, Winnipeg.

Solicitors for the Government of Canada: Deputy Attorney General of Canada, Ottawa.