Docket: A-297-14
Citation:
2015 FCA 88
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CORAM:
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DAWSON J.A.
STRATAS J.A.
SCOTT J.A.
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BETWEEN:
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THE CANADIAN TRANSIT COMPANY
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Appellant
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and
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THE CORPORATION OF THE CITY OF WINDSOR
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Respondent
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REASONS
FOR JUDGMENT
STRATAS J.A.
[1]
The Canadian Transit Company
appeals from the judgment dated May 21, 2014 of the Federal Court (per Justice
Shore): 2014 FC 461. The Federal Court struck out Canadian Transit’s notice of
application on the ground that the Federal Court had no jurisdiction to
determine it.
[2]
Canadian Transit appeals to
this Court. It also seeks an order converting its application to an action.
[3]
For the reasons that follow,
I would grant the appeal with costs. The Federal Court has jurisdiction to
determine this proceeding. However, I would decline to make the conversion
order; the Federal Court, not this Court, is the proper forum for that.
A.
Background
[4]
Canadian Transit is the
owner and operator of the Ambassador Bridge. The bridge connects Windsor and
Detroit, crossing the Detroit River and the border between Canada and the
United States.
[5]
The bridge needs extensive
maintenance. Canadian Transit also hopes to build another span across the
river, with consequential new security facilities and approaches to the bridge.
To these ends, Canadian Transit has acquired 114 properties near the bridge in
Windsor. It intends to demolish the homes on the properties to advance these
purposes.
[6]
The respondent, Windsor,
alleges that the properties have not been properly maintained and have become a
blight on the community. Relying upon its by-laws, Windsor has issued repair
orders against the 114 properties. Since that time, proceedings regarding the
by-laws and the repair orders have ensued before a municipal committee and the
Ontario Superior Court of Justice.
[7]
Canadian Transit then
applied to the Federal Court for declaratory relief. Soon after the application
was brought, Windsor moved to strike it on the ground that the Federal Court
did not have jurisdiction over it.
[8]
On consent, the Ontario
Superior Court of Justice has stayed some of its proceedings until the
jurisdictional issues are resolved. On this record, it cannot be said that
Canadian Transit’s resort to the Federal Court for relief constitutes an abuse
of process.
B. The
application before the Federal Court
[9]
In its notice of
application, Canadian Transit seeks a declaration that the Windsor by-law “does not apply to properties purchased,
leased or otherwise acquired and held” by it, including the 114 properties.
[10]
In support of that
declaration, Canadian Transit says that the bridge, its approaches, terminal
facilities, machinery and appurtenances constitute both an international work
and undertaking, and a work and undertaking declared by Parliament to be for
the general advantage of Canada: An Act to Incorporate the Canadian
Transit Company, (1921) 11-12 Geo. V, c. 57, section 2 (“federal Special
Act”). As such, they fall under federal regulatory jurisdiction under
subsections 91(29) and 92(10) of the Constitution Act, 1867 (U.K.), 30
& 31 Vict., c. 3. Canadian Transit also seeks other declarations concerning
its rights and obligations under the federal Special Act, such as its rights to
purchase, lease or otherwise acquire and hold lands for the Ambassador Bridge,
its rights to expropriate and take easements over lands, and its obligation to
maintain the Ambassador Bridge and associated works in good condition.
[11]
Overall, Canadian Transit
intends to argue that the Windsor by-law does not apply to the properties on
the basis of the constitutional doctrines of interjurisdictional immunity,
paramountcy, or both.
[12]
Canadian Transit’s
application also seeks other declarations that establish components of the case
for interjurisdictional immunity and paramountcy. These include declarations
that Canadian Transit has the power under the federal Special Act to implement
its plans for the bridge, and that the properties are necessary to implement
those plans.
[13]
The application has been
brought in the Federal Court under paragraph 23(c) of the Federal
Courts Act, R.S.C. 1985, c. F-7. Paragraph 23(c) provides as
follows:
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23. Except to the extent that jurisdiction has been otherwise
specially assigned, the Federal Court has concurrent original jurisdiction,
between subject and subject as well as otherwise, in all cases in which a
claim for relief is made or a remedy is sought under an Act of Parliament or
otherwise in relation to any matter coming within any of the following
classes of subjects:
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23. Sauf
attribution spéciale de cette compétence par ailleurs, la Cour fédérale a
compétence concurrente, en première instance, dans tous les cas — opposant
notamment des administrés — de demande de réparation ou d’autre recours
exercé sous le régime d’une loi fédérale ou d’une autre règle de droit en
matière :
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…
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[…]
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(c) works
and undertakings connecting a province with any other province or extending
beyond the limits of a province.
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c) d’ouvrages
reliant une province à une autre ou s’étendant au-delà des limites d’une
province.
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C. The Federal Court’s decision
[14]
The Federal Court granted
Windsor’s motion to strike the application. In its view, the application did
not support a cause of action and, thus, could not succeed.
[15]
Among other things, the
Federal Court characterized the application as one seeking a legal opinion
concerning whether Canadian Transit’s enabling legislation has any bearing on
the matter, something which the Federal Court has no jurisdiction to do (at
paragraph 12-13). It also noted that the pleading before it was a notice of
application – the pleading used to start an application for judicial review –
but the notice of application did not assert any cognizable administrative law
claim (at paragraphs 14 and 16).
[16]
Next, the Federal Court
turned to paragraph 23(c) of the Federal Courts Act, above, the
purported basis for the application. It found (at paragraph 15) that
declaratory remedies could not be awarded under paragraph 23(c). Further,
the Federal Court found (at paragraph 17) that there was insufficient federal
law in the proceeding to clothe the Federal Court with jurisdiction. In its
view, the proceeding failed the well-known test for jurisdiction set out in ITO-Int’l
Terminal Operators v. Miida Electronics, [1986] 1 S.C.R. 752, 28 D.L.R. (4th) 641.
[17]
On appeal, Canadian Transit
submits that the Federal Court erred on all these issues.
D. The issues in this appeal and their
interrelationship
[18]
The Federal Court is a
statutory court, established “for
the better Administration of the Laws of Canada” under section 101 of the Constitution Act, 1867. In
order to adjudicate a particular matter, it must have both statutory and
constitutional jurisdiction.
[19]
In particular, a party
asserting that the Federal Court has jurisdiction over a matter must establish
the following:
•
Statutory
jurisdiction. There must be a
statutory provision (usually in the Federal Courts Act) empowering the
Federal Court to decide the matter. Sometimes the meaning and scope of the
statutory provision is disputed. Sometimes a party submits that a statutory
provision gives rise to plenary, implied or necessarily incidental powers: Canada
(National Revenue) v. RBC Life Insurance Company, 2013 FCA 50, 443 N.R. 378
at paragraph 36. Issues such as these are resolved by the usual principles of
statutory interpretation: Bell ExpressVu Limited Partnership v. Rex,
2002 SCC 42, [2002] 2 S.C.R. 559; Re Rizzo & Rizzo Shoes Ltd.,
[1998] 1 S.C.R. 27, 154 D.L.R. (4th) 193.
•
Constitutional jurisdiction. There must be a matter that a court established
“for the better Administration
of the Laws of Canada” under
section 101 of the Constitution Act, 1867 can determine.
[20]
Long ago, the Supreme Court
of Canada established a three-fold test to determine whether the Federal Court
has statutory and constitutional jurisdiction along the above lines: ITO-Int’l
Terminal Operators, above at page 766. The following are the three branches
of that test:
1.
A statutory grant of
jurisdiction. The Federal
Courts may only deal with matters given to them by federal legislation,
expressly or impliedly. The only exception to this is a narrow category of
plenary or necessarily incidental powers the Federal Courts have to operate as
courts and to manage matters before them.
2.
Federal law must play a
sufficient role. Because the
Federal Court has been established to administer the laws of Canada under
section 101 of the Constitution Act, 1867, the Federal Court
cannot act unless there is an existing body of federal law which is essential
to the disposition of the case and which nourishes the statutory grant of
jurisdiction. Authorities, described below, use a variety of terms to describe
the level of federal law that is sufficient.
3.
The federal law must be
validly federal under the constitutional division of powers. The Federal Courts, as courts under section 101
of the Constitution Act, 1867, are established to administer the “laws of Canada.” The laws they administer must fall under
federal jurisdiction in the Constitution.
All three branches of
this test must be present in order for the Federal Courts to have jurisdiction.
[21]
I agree with those who
consider the third branch of this test to duplicate somewhat the second. After
considering whether federal law plays a sufficient role in the case (the second
branch of the test), the question whether the law is validly federal (the third
branch of the test) has already been answered or the answer is self-evident.
And the two branches together address a single concept, whether or not the Federal
Court has the constitutional jurisdiction to act under section 101 of the Constitution
Act, 1867. Nevertheless, I shall apply each of the three branches of the
test in ITO-Int’l Terminal Operators in the first section of the reasons
that follow.
[22]
The case at bar, however,
raises one additional constitutional wrinkle: whether the Federal Court can
make a declaration that the Windsor by-law does not apply based on the
constitutional doctrines of paramountcy, interjurisdictional immunity, or both.
During oral argument, we asked counsel about the nature and status of these
doctrines in the Federal Court and whether the Federal Court has the power to
consider and apply them. We asked this because some commentators have queried
this: see “The Jurisdiction of
the Federal Courts: An Overview” in Brian J. Saunders, Donald J. Rennie and Graham Garton, Federal
Courts Practice 2015 (Toronto: Thomson Reuters Canada, 2014) at page 9.
Their query stems from a passing suggestion in the case law that the Acts in
the Constitution are not “laws
of Canada” that the Federal
Court can apply because the Parliament of Canada did not make them: Northern
Telecom v. Communications Workers, [1983] 1 S.C.R. 733 at page 745, 147
D.L.R. (3d) 1. I shall deal with this in the second section of the reasons that
follow.
[23]
Finally, there is a
procedural question before us. Canadian Transit now concedes that it should
have started its proceeding by way of statement of claim rather than by way of
notice of application. Therefore, it asks this Court to permit it to convert
its application to an action. I shall deal with this in the final section of
the reasons that follow.
[24]
In light of the foregoing
discussion, then, my reasons shall address three questions:
•
Is the test in ITO-Int’l
Terminal Operators met? In other words, does the Federal Court have
statutory and constitutional jurisdiction over this proceeding?
•
Does the Federal Court have
jurisdiction to make declarations on constitutional matters such as paramountcy
and interjurisdictional immunity?
•
Should Canadian Transit’s
application be converted to an action?
E. Is
the test in ITO-Int’l Terminal Operators met? In other words, does the
Federal Court have statutory and constitutional jurisdiction over this
proceeding?
[25]
In my view, in this case,
all three branches of the test in ITO-Int’l Terminal Operators are met.
(1)
Statutory grant
of jurisdiction
[26]
The relevant
statutory grant of jurisdiction is paragraph 23(c) of the Federal
Courts Act, above. Paragraph 23(c) of the Federal Courts Act
allows a party to seek “relief…under
an Act of Parliament or otherwise in relation to…works and undertakings
connecting a province with any other province or extending beyond the limits of
a province.” Section 2 of
the Federal Courts Act defines “relief” as “every species of relief, whether by way
of…declaration...or otherwise.”
[27]
Read with that
definition in mind, paragraph 23(c) of the Federal Courts Act,
then, allows a party to seek “[a
declaration] in relation to…works and undertakings connecting a province with
any other province or extending beyond the limits of a province.”
[28]
In its notice of
application, Canadian Transit seeks exactly those sorts of declaration: see
paragraphs 9-12, above. Its proceeding is authorized by paragraph 23(c)
of the Federal Courts Act. The requirement that there be a statutory
grant of jurisdiction to the Federal Court to determine the matter – the first
branch of the ITO-Int’l Terminal Operators test – is met.
(2)
Federal law
plays a sufficient role
[29]
Under this branch of the ITO-Int’l
Terminal Operators test, the first step is to assess the nature of the
proceeding before us, including what body or bodies of law will be necessary to
determine it. Then we must assess whether, overall, federal law will play a
primary role in the sense of being “essential to the outcome of the case and nourishing the statutory
grant of jurisdiction”: ITO-Int’l
Terminal Operators, above at page 766.
[30]
In this proceeding, Canadian
Transit alleges that federal Special Act creates it, gives it powers to
construct, maintain and operate the Ambassador Bridge and surrounding
facilities and properties, and, to some extent, regulates those physical things
and powers. It says that the bridge and surrounding facilities and properties,
taken together, are a work or undertaking that extends beyond the limits of the
province and, thus, are federally regulated: Constitution Act, 1867,
subsections 91(29) and 92(10). Finally, it says that by virtue of the
constitutional doctrines of paramountcy and interjurisdictional immunity,
Windsor’s by-law does not apply to Canadian Transit, its exercise of some or
all of its powers under the federal Special Act, and the bridge and surrounding
facilities and properties.
[31]
In considering those issues,
the Federal Court will have to, among other things, interpret the federal
Special Act, interpret the Windsor by-law, consider whether the bridge and
surrounding facilities and properties constitute a federal enclave immune from
the by-law on the basis of the constitutional doctrine of interjurisdictional immunity
and, finally, consider whether there is a conflict between the Act and the
by-law such that the Act prevails over the by-law under the constitutional
doctrine of paramountcy.
[32]
Taken together, is there
sufficient federal law for the Federal Court to have jurisdiction? In my view,
there is.
[33]
First, the federal Special
Act. Several provisions of it bear upon the issue whether Canadian Transit is
entitled to the declarations it seeks:
•
Section 2 declares the work
and undertaking of Canadian Transit (i.e., the bridge and any other
things that the court hearing the proceeding finds are associated with it) to
be for the general advantage of Canada, thereby triggering federal jurisdiction
under subsections 91(29) and 92(10) of the Constitution Act, 1867.
•
Section 8 allows Canadian
Transit, among other things, to construct, maintain and operate its work and
undertaking, including the facilities mentioned in paragraph 8(e).
•
Section 10 goes some way
toward mediating the interests of Canadian Transit and Windsor. It requires
Canadian Transit to obtain the consent of Windsor, expressed through by-law,
before engaging in construction or operation of the work. If consent cannot be
had, the “Board of Railway
Commissioners,” now the
federal Canadian Transportation Agency, is to decide what terms shall be
imposed on the construction or operation of the work.
•
Section 20 of the Railway
Act, 1919, a federal statute, applies to the work and undertaking to the
extent that it is not inconsistent with the federal Special Act.
[34]
This is federal law
essential to the determination of Canadian Transit’s proceeding. Perhaps one of
the most central tasks of the Federal Court in this proceeding will be to
assess, in light of and in the context of the Special Act, to what extent, if
any, the surrounding properties and facilities are part of this federal work or
undertaking and regulated by the Special Act. Another central task will be to
assess the extent to which section 10 of the Special Act sets up a regulatory
regime to govern conflicts between this federal work or undertaking and any
municipal by-laws.
[35]
Windsor submits that
Canadian Transit’s proceeding involves plenty of provincial law and so there is
not enough federal law to support the Federal Court’s jurisdiction. It says
that the Federal Court would have to interpret the relevant Windsor by-law, a
quintessentially provincial matter under the Constitution Act, 1867,
ascertaining its policies and scope. In Windsor’s view, this significant
element of provincial law takes the proceeding beyond the Federal Court’s
jurisdiction.
[36]
I reject Windsor’s
submission. In my view, federal law plays an essential role in the outcome of
this case, with provincial law playing only a subsidiary or incidental role.
[37]
At the outset of explaining
why this is so, it is worth noting that the Federal Court can entertain a
proceeding even though there is some provincial law involved in the case:
The Federal Court is
constituted for the better administration of the laws of Canada. It is not,
however, restricted to applying federal law in cases before it. Where a case is
in “pith and substance” within the court’s statutory jurisdiction, the Federal
Court may apply provincial law incidentally necessary to resolve the issues
presented by the parties. [citations omitted]
(ITO-Int’l Terminal
Operators, above at pages 781-82.)
[38]
This is not a controversial
proposition. Of necessity, the Federal Courts regularly decide incidental
questions of provincial law. For example, when deciding income tax appeals from
the Tax Court of Canada, a federal matter, this Court often must decide issues
of contract, trust law and provincial corporate law, among others. When the
federal Crown is sued in tort in the Federal Court, the provincial common law
is treated as federal law. In federal maritime law cases, the Federal Court
often must apply provincial laws of contributory negligence. The question is
not whether the Federal Court is doing any provincial law; it often is. The
question is whether there is federal law essential to the claim that nourishes
the Court’s jurisdiction or, put another way, whether there is sufficient
federal law to give the Court jurisdiction.
[39]
Different cases use
different words and approaches to describe the degree of federal law that is
sufficient. ITO-Int’l Terminal Operators, above, inquires into whether
provincial law is only “incidentally
necessary” to the federal
law in the case (at pages 781-782). Other authorities start with the federal
law and ask whether it bears upon the case. For example, one formulation is whether
“the rights and obligations of
the parties are to be determined to some material extent by federal law” or whether the cause of action “is one affected” by federal law: Bensol Customs Brokers Ltd.
v. Air Canada, [1979] 2 F.C. 575 at pages 582-83, 99 D.L.R. (3d) 623
(C.A.). Yet another formulation is whether “the federal statute has an important part to play in determining
the rights of the parties”: The
Queen v. Montreal Urban Community Transit Commission, [1980] 2 F.C. 151 at
page 153, 112 D.L.R. (3d) 266 (C.A.).
[40]
Examples abound where
an element of provincial law is before the Federal Court – sometimes a fairly
large element – yet the Federal Court has nevertheless been held to have
jurisdiction because of the essentiality and prominence of the federal law in
the case. In McNamara Construction (Western) Ltd. v. The Queen, [1977] 2
S.C.R. 654, 75 D.L.R. (3d) 273, the Supreme Court confirmed the ability of the
Federal Court to apply the provincial law of contribution and indemnity to
resolve a dispute as long as it does so under a body or framework of federal
law given to it. In Rhine v. The Queen; Prytula v. The Queen,
[1980] 2 S.C.R. 442, 116 D.L.R. (3d) 385, the Supreme Court held that the
Federal Court could deal with an action to enforce contractual promises – a
matter governed by provincial law – to repay loans made under and affected by
federal statutes. Finally, in Peter G. White Management Ltd. v. Canada
(Minister of Canadian Heritage), 2006 FCA 190, [2007] 2 F.C.R. 475, this
Court held that the Federal Courts could deal with common law torts, matters of
provincial law, where they were “in pith and substance” based on federal law or informed by it and where there was
a “detailed [federal] statutory
framework.”
[41]
In the case at bar,
provincial law plays a role that is only subsidiary or incidental to the large
body of federal law in the federal Special Act set out above. Indeed, a number
of the declarations Canadian Transit seeks concern what it can and cannot do
under the framework of the federal Special Act and what its work or undertaking
consists of – subjects that have no provincial law content whatsoever.
[42]
When applying the
constitutional doctrines of paramountcy and interjurisdictional immunity, the
Federal Court will have to interpret the scope of Windsor’s by-law and the
purposes behind it. But in applying those same doctrines, the Federal Court
will have to interpret the federal Special Act to the same extent. And, as we
shall see, these doctrines, in themselves, can be regarded as part of the law
of Canada that the Federal Court can interpret and apply. Therefore, on the
authorities cited above, there is a very significant body of federal law to be
interpreted and applied that will determine this case, as much or even more
than was present in the Supreme Court cases of Rhine; Prytula and ITO-Int’l
Terminal Operators, both above, and this Court’s case of Peter G. White,
above, all of which concluded the Federal Court had jurisdiction. Overall, the
federal Special Act plays a predominant role in this case, it is essential to
its determination, and provincial law plays only a subsidiary or incidental
role.
[43]
Windsor submits that this
Court’s recent decision in Harry Sargeant III v. Al-Saleh, 2014 FCA 302
is directly on point and supports its position. I disagree. In Sargeant,
a party asserted an interest in the proceeds of disposition of a ship. However,
in order to assert that interest, the party had to bring an application in a
provincial superior court to enforce a foreign judgment and then obtain a declaration
of entitlement to a constructive trust, both matters of provincial law. In Sargeant,
provincial law was the dominant body of law needed to determine the proceeding.
In the case at bar, provincial law plays only a subsidiary or incidental role.
[44]
Therefore, there is a
sufficient body of federal law essential to the determination of Canadian
Transit’s proceeding and that nourishes the Federal Court’s jurisdiction. The
second branch of the ITO-Int’l Terminal Operators test is met.
(3)
The federal law
must be validly federal under the constitutional division of powers
[45]
Under the final branch of
the ITO-Int’l Terminal Operators test, we must ensure that the Federal
Courts will be acting within their constitutional jurisdiction.
[46]
The federal Special Act is a
valid exercise of federal legislative authority. The federal Parliament has
authority over interprovincial works and undertakings and federal corporations:
subsections 91(29) and 92(10) of the Constitution Act, 1867; John
Deere Plow Co. v. Wharton, [1915] A.C. 330, 18 D.L.R. 353 (P.C.)
(in which the federal power to incorporate and regulate corporations was first
recognized and was held to fall within subsection 91(2) and the federal “peace, order and good government” power). This branch of the test is met.
F. Does
the Federal Court have jurisdiction to make declarations on constitutional
matters such as paramountcy and interjurisdictional immunity?
[47]
For the reasons set out
below, as long as the test in ITO-Int’l Terminal Operators is met, the
Federal Court has jurisdiction to make declarations in constitutional matters,
such as declarations of invalidity or, as sought here, declarations of
inoperability and inapplicability based on the doctrines of paramountcy and
interjurisdictional immunity.
[48]
Above, I mentioned that some
commentators have queried the jurisdiction of the Federal Court to make such
declarations relying upon a passage in Northern Telecom. The passage
reads as follows (at page 745):
The Constitution Act, 1867, as amended, is not of course
a “law of Canada” in the sense of the foregoing cases because it was not
enacted by the Parliament of Canada. The inherent limitation placed by s. 101
[of the Constitution Act, 1867] on the jurisdiction which may be
granted to the Federal Court by Parliament therefore might exclude a
proceeding founded on the Constitution Act [sic]. [my emphasis]
[49]
This passage appears after
the discussion necessary to determine the specific issues in the case. And it
suggests only that the Federal Court might not be able to entertain a
proceeding concerning constitutional issues. Absent in this passage is any
detailed analysis of the Federal Court’s jurisdiction to consider
constitutional issues, perhaps because the facts of this case, which took
place four years before the constitutional reforms in 1982, did not call for
it. In the 1982 constitutional reforms, all of the Acts comprising our
Constitution were transformed into laws of Canada: see section 1 of the Canada
Act 1982 (U.K.), 1982, c. 11 (“enacted for and [having] the force of law in Canada”) and section 52 of the Constitution Act, 1982 (the
Constitution is the “supreme law of Canada”). Finally, while this passage suggests that the Federal
Court “might”
not be able to consider a proceeding founded on “the
Constitution Act,” a later passage says
something quite different (at page 745): the Federal Court “is competent to decide a question of law, even of a
constitutional nature, when that question is raised, as it is in the case
at bar, in connection with a proceeding or principal action based on the
application of federal law”
[my emphasis]. In other words, in today’s language, where the Federal Court has
jurisdiction under the ITO-Int’l Terminal Operators test, the Federal
Court can decide a constitutional question.
[50]
In light of these
considerations, what should now be made of the passage in Northern Telecom?
Is the Federal Court able to consider the constitutional doctrines of
paramountcy and interjurisdictional immunity?
[51]
I begin by examining the
provenance of these constitutional doctrines. They arise from the concluding
words of section 91 of the Constitution Act, 1867, and perhaps also the “notwithstanding” clause at the start of section 91 of the Constitution
Act, 1867, an Act that, as we have seen, is now a law of Canada: Re Exported
Natural Gas Tax, [1982] 1 S.C.R. 1004 at pages 1030-1031, 136 D.L.R. (3d)
385; A.H. Boulton Company Limited v. The Trusts and Guarantee Company
Limited, [1942] S.C.R. 130 at page 136, [1942] 2 D.L.R. 145; Neil
Finkelstein, Laskin’s Canadian Constitutional Law, 5th ed. (Toronto:
Carswell, 1986) at page 263; Peter W. Hogg, Constitutional Law of Canada,
5th ed., loose-leaf (consulted on 7 April 2015), (Toronto: Thomson Reuters
Canada, 2007), page 16-3, footnote 10. The doctrines of paramountcy and interjurisdictional
immunity can affect the force of federal legislation, in some circumstances
permitting that legislation to be applied according to its terms
notwithstanding provincial and municipal laws. As such, these doctrines are
intertwined with federal legislative power under section 91 or are “a quality inherent in federal legislative
power”: Hogg, above at page
16-3, footnote 9. Thus, the doctrines of paramountcy and interjurisdictional
immunity must themselves be regarded as part of the law of Canada that the
Federal Court can interpret and apply.
[52]
The purposes of section 101
of the Constitution Act, 1867, the constitutional underpinning of the
Federal Court, buttress this conclusion. Section 101 exists over and above the
power of each individual province to establish and administer provincial
superior courts under subsection 92(14). Were it not for Parliament’s ability
to create a national court to administer federal laws under section 101,
provincial and territorial superior courts, thirteen in all, would administer
those laws. One jurisdiction’s superior court might disagree with another
jurisdiction’s superior court. Perhaps a third or fourth point of view may
emerge as other jurisdictions’ superior courts weigh in on the issue. So, for
example, in some jurisdictions, a particular expense might be deductible for
income tax purposes; in others, not. In some jurisdictions, a federal
administrative tribunal’s decision would be binding and in force; in others,
not. In some jurisdictions, an illegal strike or lockout in an essential
national service might be enjoined; in others, not. Interjurisdictional
inconsistency and inequality would prevail, perhaps pleasing forum shoppers,
but undermining the workability and unity of the federation.
[53]
Section 101 exists to
prevent this. It allows the federal Parliament to create federal courts with
national jurisdiction to administer federal laws. And Parliament did not wait
long after Confederation to create such a court. That court, created at the
same time Parliament created the Supreme Court of Canada, was the Exchequer
Court of Canada, the predecessor of the Federal Court of Canada, the Federal
Court and this Court: Supreme and Exchequer Court Act, S.C. 1875,
c. 11. Parliament intended the Exchequer Court and its successors to be
strong national institutions – courts in every sense – able to fulfil the
purpose of section 101 by adjudicating federal matters completely and to
conclusion: Canada (Human Rights Commission) v. Canadian Liberty Net,
[1998] 1 S.C.R. 626, 157 D.L.R. (4th) 385; Hupacasath
First Nation v. Canada (Attorney General), 2015 FCA 4, 379 D.L.R. (4th) 737
at paragraphs 52-57; RBC Life Insurance, above at paragraphs 33-36. To
achieve that end, the Exchequer Court and its successors must be able to identify
the operative and applicable laws before them, even when those laws are
affected by paramountcy and interjurisdictional immunity.
[54]
Were it otherwise, the
purposes section 101 seeks to advance would be frustrated. Suppose that, as
here, a party seeks in the Federal Court a declaration of its rights under a
federal statute and is met with the argument that the doctrines of paramountcy
and interjurisdictional immunity do not apply and so provincial law applies
fully to affect those rights. If the Federal Court has no power to deal with
paramountcy or interjurisdictional issues, the parties would have to proceed to
a provincial superior court and later to provincial appeal courts and
ultimately to the Supreme Court for a ruling on those issues, and then, depending
on the result, proceed back to the Federal Court. Federal-provincial-federal
hop-scotching does nothing to further access to justice: Canada (Attorney
General) v. TeleZone Inc., 2010 SCC 62, [2010] 3 S.C.R. 585 at paragraphs
18-19 and 32. Further, over time, provincial superior courts and provincial
appellate courts might disagree on the issues of paramountcy or
interjurisdictional immunity, spawning the very inconsistency and inequality
that section 101 was meant to prevent.
[55]
Quite aside from section 101
of the Constitution Act, 1867, in my view the Federal Court and its
predecessors, the Federal Court of Canada and the Exchequer Court of Canada,
have always had the ability to consider constitutional issues of validity,
operability and applicability. That ability comes from a more fundamental
source.
[56]
In 1875, the Exchequer Court
of Canada was created. Like all courts, it had to act according to law,
interpreting and applying the law. At the time of the Exchequer Court’s birth,
one law on the books was the Colonial Laws Validity Act, 1865 (U.K.), 28 & 29 Vict. c. 63. Under section 2 of that Act, all
Canadian courts, including the Exchequer Court, had to declare “void and inoperative” any federal or provincial laws inconsistent
with those of the Parliament of the United Kingdom, including the
British North America Act, 1867: see also the discussion in Re Manitoba Language Rights, [1985] 1 S.C.R. 721 at page 746, 19 D.L.R. (4th) 1. The Exchequer Court recognized this
power and understood that in appropriate cases it could decline to apply
legislation that conflicted with a law of the Parliament of the United Kingdom:
see, e.g., Algoma Central Railway Co. v. Canada (1901), 7 Ex.
C.R. 239 at pages 254-255, rev’d on other grounds (1902), 32 S.C.R. 277, aff’d
[1903] A.C. 478 (P.C.). Even before the Exchequer Court came into existence,
other Canadian courts regularly exercised the power to declare legislation
invalid or inoperative: see, e.g., R. v. Chandler (1868), 2 Cart.
421, 1 Hannay 556 (N.B.S.C.); Pope v. Griffith (1872), 2 Cart. 291, 16
L.C.J. 169 (Que. Q.B.); Ex p. Dansereau (1875), 2 Cart. 165 at page 190,
19 L.C.J. 210 (Que. Q.B.); L’Union St. Jacques v. Belisle (1872), 1
Cart. 72, 20 L.C.J. 29 (Que. Q.B.), rev’d (1874), L.R. 6 P.C. 31 (P.C.). Thus,
from the very outset, all Canadian courts, including the Exchequer Court, could
measure legislation up against laws of the Parliament of the United Kingdom,
including the British North America Act, 1867, and determine whether
they were invalid or inoperative.
[57]
From 1875 to 1982,
the doctrines of paramountcy and interjurisdictional immunity developed as part
of the jurisprudence under sections 91 and 92 of the British North America
Act, 1867. For example, as early as 1895, the doctrine of paramountcy was
described as being “necessarily
implied in our constitutional act,” one that had to be followed under the Colonial Laws
Validity Act, 1865: Huson v. Township of South Norwich (1895), 24 S.C.R. 145 at page 149. These constitutional
doctrines became part of the law that all Canadian courts, including the
Exchequer Court, were bound to apply.
[58]
And
so the Exchequer Court did. In one case, it found that provincial water rights legislation, the Water
Clauses Consolidation Act, 1897, R.S.B.C., c. 190, could not apply to lands
owned by the federal Crown that fell under exclusive federal jurisdiction under
subsection 91(1A) of the Constitution Act, 1867: The Burrard Power
Company Limited v. The King, (1909), 12 Ex. C.R.295, aff’d [1910] 43 S.C.R.
27, aff’d [1911] A.C. 87 (P.C.). In another case, it
found that federal legislation, the Soldier Settlement Act, 1917, 9-10
Geo. V, c. 71, was intra vires the federal Parliament and if it
conflicted with provincial legislation, it would prevail: R. v. Powers,
[1923] Ex. C.R. 131 at page 133.
[59]
In 1931, the Colonial
Laws Validity Act, 1865 was repealed, allowing federal and provincial laws
in Canada to diverge from the laws of the Parliament of the United Kingdom: Statute
of Westminster, 1931 (U.K.), 22 Geo. V, c. 4, section 2, now known
as the Constitution Act, 1931. But the requirement that federal and
provincial laws respect the constitutional division of powers in the British
North America Act, 1867 was preserved: Constitution Act, 1931,
subsection 7(3) and see the discussion in Re Resolution to Amend the
Constitution, [1981] 1 S.C.R. 753 at page 835. So from 1931 until the
passage of the Constitution Act, 1982, the Exchequer Court still had the
power – indeed the duty – to enforce the constitutional division of powers in
sections 91 and 92 of the British North America Act, 1867, including the
constitutional doctrines of paramountcy and interjurisdictional immunity.
[60]
In 1971, the Exchequer Court
of Canada was continued as the Federal Court of Canada and that Court was later
continued as the Federal Court and this Court: Federal Court Act, R.S.C.
1970 (2nd Supp.), c. 10, section 3; Federal Courts Act, above, sections
3 and 4 (enacted by S.C. 2002, c. 8, section 16). As successor courts, the
Federal Court of Canada, the Federal Court and this Court have had what the
Exchequer Court has had since its inception in 1875 – the power to enforce the
constitutional division of powers in sections 91 and 92 of the British North
America Act, 1867 and later the Constitution Act, 1867, including
the constitutional doctrines of paramountcy and interjurisdictional immunity.
[61]
In 1982, the Constitution
Act, 1982 came into force. It preserved subsection 7(3) of the Statute
of Westminster, 1931 and the requirement that federal and provincial laws
respect the constitutional division of powers: see the Schedule to the Constitution
Act, 1982. But section 52 of the Constitution Act, 1982 transformed
the implied power of courts to determine issues of constitutionality, including
the constitutional doctrines of paramountcy and interjurisdictional immunity,
into an express power. As the Supreme Court said in Re Manitoba Language Rights,
above at page 746, section 52 of the
Constitution Act, 1982 did “not alter the principles which have provided the foundation for
judicial review over the years.” It merely confirmed the power that
all courts already had. See also Operation
Dismantle v. The Queen, [1985]
1 S.C.R. 441 at pages 482-483, 18 D.L.R. (4th) 481; Singh
v. Canada (Attorney General), [2000] 3
F.C. 185, 183 D.L.R. (4th) 458 at paragraphs 14-16.
[62]
In several decisions after
1982, the Supreme Court has examined section 52 of the Constitution Act,
1982. It has held that any statutorily established adjudicative bodies that
have the power to decide questions of law – such as the Federal Courts, the Tax
Court of Canada, the provincial courts and even certain administrative
decision-makers – have the power to determine whether the law before them is
inconsistent with the Constitution: Nova Scotia (Workers’ Compensation
Board) v. Martin; Nova Scotia (Workers’ Compensation Board) v. Laseur, 2003
SCC 54, [2003] 2 S.C.R. 504. That is so, as long as the statutorily established
adjudicative body has subject-matter jurisdiction over the case: Douglas/Kwantlen
Faculty Assn. v. Douglas College, [1990] 3 S.C.R. 570, 77
D.L.R. (4th) 94; Cuddy Chicks
Ltd. v. Ontario (Labour Relations Board), [1991] 2 S.C.R. 5, 81 D.L.R. (4th) 121;
Tétreault-Gadoury v. Canada (Employment
and Immigration Commission),
[1991] 2 S.C.R. 22, 81 D.L.R. (4th) 358. So section
52 of the Constitution Act, 1982 does not expand the subject-matter
jurisdiction of the Federal Court.
[63]
But where the Federal Court
does have subject-matter jurisdiction – both statutory and constitutional
jurisdiction under the test in ITO-Int’l Terminal Operators, above – it
also has the power to make section 52 determinations. Indeed, it has a duty to
do so: Re Manitoba Language Rights, above at pages 745-746. Were
it otherwise, the Federal Court would have a constitutional jurisdiction
narrower than many of the administrative decision-makers it reviews – truly an
absurd result.
[64]
In practice, the ability of
the Federal Court and this Court to use section 52 of the Constitution Act,
1982 where the ITO-Int’l Terminal Operators test is met is
undoubted. For example, using its declaratory power under section 52, this
Court struck down a provision of the Income Tax Act, R.S.C. 1985, c. 1
(5th Supp.) on Charter grounds, and its decision did not depend on whether the
Charter, Part I of the Constitution Act, 1982, was a “law of Canada”: Del Zotto v. Canada, [1997] 3 F.C. 40, 147 D.L.R. (4th) 457 (C.A.), rev’d on other grounds, [1999]
1 S.C.R. 3, 169 D.L.R. (4th) 130. This Court had a
sufficient body of federal law before it, namely the Income Tax Act and
a federal order and federal subpoena issued under it.
[65]
The constitutional doctrines
of paramountcy and interjurisdictional immunity fit within the section 52
rubric. Where a federal law is on the books and there is provincial law that
conflicts with the federal law or invades a supposed federal enclave of
jurisdiction, the Federal Court must find that the federal law must prevail
over the provincial law – otherwise, using the words of section 52, there would
be an inconsistency with the Constitution, namely the proper division of
federal and provincial powers under sections 91 and 92 of the Constitution
Act, 1867.
[66]
Over and above
section 52 of the Constitution Act, 1982, is the rule of law, a binding constitutional
principle contained in the preamble to Part I of that Act. It requires, among
other things, that all courts, including the Federal Court, must act only
according to law. Judges, like everyone else, are subject to laws and must
follow them: Re Resolution to Amend the Constitution,
above at pages 805-806; Reference re Secession of
Quebec, [1998] 2 S.C.R. 217, 161 D.L.R. (4th) 385 at
paragraphs 71-72 (“one
law for all”); Reference
re Remuneration of Judges of the Provincial Court of Prince Edward Island, [1997] 3 S.C.R. 3, 150 D.L.R. (4th)
577 at paragraph 10 (“the
exercise of all public power must find its ultimate source in a legal rule”). Put another way, “[t]he job of judges is to apply the law, not to indulge their
personal preferences”: Tom Bingham, The Rule of Law
(Toronto: Penguin, 2011) at page 51.
[67]
In order to act according to
law, a court of law – even a statutory court like the Federal Court – must have
an implied power to determine the law that is valid, operative, applicable and
relevant to the case before it. This is an “immanent attribute” or part of its “essential
character”: MacMillan
Bloedel Ltd. v. Simpson, [1995] 4 S.C.R. 725, 130 D.L.R. (4th) 385 at paragraph 30. Without this
power, any court is emasculated, and is not really a court at
all: see MacMillan Bloedel, above at paragraphs 30-38, citing
with approval Keith Mason, “The
Inherent Jurisdiction of the Court” (1983), 57 A.L.J. 449 at page 449 and Isaac Hai Jacob, “The Inherent Jurisdiction of the Court” (1970), 23 C.L.P. 23 at pages 27-28; see also RBC
Life Insurance, above at paragraph 36. This implied power has to include
the doctrines of paramountcy and interjurisdictional immunity, matters that
affect the operability and applicability of laws.
[68]
In light of the foregoing
discussion, it is not surprising that there have been many cases where, despite
the isolated comment in Northern Telecom, above, the Federal Court has
had to determine whether a federal law applied to the exclusion of a provincial
law in a matter before it. In these cases, the Federal Court interpreted
federal and provincial laws, examined whether they conflicted, and decided
whether federal law should prevail: see, e.g., Early Recovered
Resources Inc. v. Gulf Log Salvage Co-Operative Assn., 2003 FCA 35, [2003]
3 F.C. 447; Early Recovered Resources Inc. v. British Columbia, 2005 FC
995, 276 F.T.R. 267; Brooks Aviation, Inc. v.
Boeing SB-17G, 2004 FC 710, [2005] 1 F.C. 352. In the 2005 Early
Recovered Resources case, the Court went further and made a declaration in
support of its conclusion.
[69]
The Supreme Court’s decision
in ITO-Int’l Terminal Operators, above, is itself another illustration
of the Federal Court’s ability to interpret and apply constitutional doctrines.
Under the third branch of the ITO-Int’l Terminal Operators test, the
Supreme Court requires the Federal Court to engage in division of powers
analysis: whether the federal law that nourishes the Federal Court’s
jurisdiction under the second branch is indeed validly federal under the
constitution. In making that assessment, the Federal Court has to draw upon the
common law developed in the area of the constitutional division of powers and
analyze it.
[70]
The matter before us cannot
be distinguished from these authorities. Canadian Transit is asking the Federal
Court to determine, using common law doctrines developed in the area of the
constitutional division of powers, whether the Ambassador Bridge and
surrounding properties and facilities that it says are necessary for the bridge
are to be regulated by federal law to the exclusion of provincial (municipal)
law. Since the Federal Court has statutory jurisdiction and constitutional
jurisdiction under the test in ITO-Int’l Terminal Operators, it can
apply the doctrines of paramountcy and interjurisdictional immunity.
G. A
qualification
[71]
Throughout these reasons, I
have stated that the Federal Court has jurisdiction to make declarations on
constitutional matters such as paramountcy and interjurisdictional immunity.
But I have qualified that statement with the requirement that the ITO-Int’l
Terminal Operators test be met. In part, this is because the ITO-Int’l
Terminal Operators test is used to ensure that the Federal Court has the
statutory and constitutional jurisdiction to act. But the qualification is
important for another reason.
[72]
The doctrine of
interjurisdictional immunity, unlike the doctrine of paramountcy, can apply
even where there is no federal legislation occupying the field: Quebec
(Attorney General) v. Canadian Owners and Pilots Association, 2010 SCC 39,
[2010] 2 S.C.R. 536. So, for example, a party, relying on the federal
jurisdictional enclave of aeronautics alone, can invoke the doctrine of
interjurisdictional immunity to attack provincial law that trenches upon that
enclave. Could that party seek a paragraph 23(c) declaration based on
interjurisdictional immunity and section 52 of the Constitution Act, 1982
concerning the validity of the provincial law in the Federal Court? Would there
be sufficient federal law in that circumstance to nourish the Federal Court’s
jurisdiction under the ITO-Int’l Terminal Operators test? The answers to
these questions should await full argument in a future case where they arise.
[73]
In this case, Canadian
Transit – established as a federal corporation under the federal Special Act to
pursue federal objects and invoking a federal provision allowing the Federal
Court to make declarations concerning federal works and undertakings – has
asked the Federal Court what exactly its rights are under the federal Special
Act concerning an international bridge, which it says is a federal work or undertaking,
federally-regulated, and regulated in substantial part by the federal Special
Act. To answer that question, the Federal Court, armed with one of the “laws of Canada,” namely section 52 of the Constitution Act, 1982,
will draw in large part upon its interpretation of the federal Special Act and
section 91 of the Constitution Act, 1867, another one of the “laws of Canada.” That particular law of Canada sets out federal
powers that, in some circumstances defined in the case law, are given paramount
or wholly exclusive status under the doctrines of paramountcy and
interjurisdictional immunity. The Federal Court, established to administer
federal law, and drawing on implied powers it and its predecessors have had for
almost a century-and-a-half to determine the constitutional validity,
operability and applicability of laws before it, can apply the doctrines of
paramountcy and interjurisdictional immunity. This is a federal matter through
and through and the Federal Court can determine it fully.
H. Should Canadian Transit’s application be
converted to an action?
[74]
Canadian Transit brought its
proceeding by way of application. After receiving the judgment of the Federal
Court, it realized that it should have proceeded by way of action, not by way
of application.
[75]
Accordingly, as part of the
relief sought in this appeal, Canadian Transit asks this Court for an order
converting its application to an action. Attached to Canadian Transit’s notice
of appeal in this Court is a draft statement of claim. The draft statement of
claim is virtually identical to the notice of application.
[76]
Under Rule 300 of the Federal
Courts Rules, S.O.R./98-106, applications are reserved for reviews of
administrative action and matters required or permitted by an Act of Parliament
to be brought by application, motion, originating notice of motion, originating
summons or petition or to be determined in a summary way. None of these apply
in the present case. So Canadian Transit is correct that it must convert its
application to an action.
[77]
In support of the order for
conversion, Canadian Transit invokes Rule 57: an originating document should
not be set aside only on the ground that a different originating document
should have been used. Filing the wrong originating document is an irregularity
that can be rectified, not a fatal error that brings the proceeding to an end.
[78]
Canadian Transit’s request
for conversion of its pleading is not properly before us and cannot be granted.
Section 52 of the Federal Courts Act, above, sets out this Court’s powers
on appeal. Under that section we do not have the power to determine a motion
that could have been brought in the Federal Court but was not. Rather, Canadian
Transit should seek conversion of its pleading by way of motion in the Federal
Court.
[79]
Windsor opposes Canadian
Transit’s request for conversion. It has the right to file evidence responding
to Canadian Transit’s request for conversion. It cannot do so in the appeal
before us. The Federal Court is the proper place for Canadian Transit to bring
a motion for conversion and for Windsor to respond.
[80]
Therefore, I would not deal
with Canadian Transit’s request for conversion. Canadian Transit remains free
to move for that relief in the Federal Court.
I.
Proposed
disposition
[81]
Therefore, I would order
that the appeal be allowed, the judgment dated May 21, 2014 of the Federal
Court in file no. T-1699-13 be set aside, and the motion to strike be
dismissed.
[82]
The parties have
agreed that this Court should fix costs. As costs should follow the event, I
would award Canadian Transit its costs in the amount of $5,500 in this Court
and $9,500 in the Federal Court, all inclusive.
"David Stratas"
“I agree
Eleanor R. Dawson J.A.”
“I agree
A.F. Scott
J.A.”
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