Supreme Court of Canada
In re Board of Commerce, (1920) 60 S.C.R. 456
Date: 1920-06-01
In the Matter of
The Board of
Commerce Act and the Combines and Fair Prices Act of 1919.
Case Stated Under
Section Thirty-two of the Board of Commerce Act.
1920: May 7; June 1.
Present: Sir Louis Davies C.J., and
Idington, Duff, Anglin, Brodeur and Mignault JJ.
Constitutional Law—Legislative powers of
Parliament—Combines and Fair Prices Act, 9 & 10 Geo. V, c. 45, ss. 13 and
22—Regulation of Trade and Commerce—Criminal law—Peace, order and good
government.
A case stated for the opinion of the Supreme
Court of Canada under sec. 32 of the Board of Commerce Act should not submit
abstract questions but should state the facts of some matter pending before the
Board and submit questions of law or jurisdiction arising when considering the
same. In re Cardigan County Council, (54 J.P. 792), appl.
By sec. 18 of The Combines and Fair Prices
Act, 1919, the Board of Commerce is empowered to inquire into and prohibit the
making of unfair profits on the holding or disposition of necessaries of life,
and practices with respect to such holding or disposition calculated to
unfairly enhance the cost of such necessaries. The Board made an order
restraining and prohibiting certain manufacturers of clothing from omitting or
refusing to offer for sale in the city of Ottawa their commodities at prices
not higher than are reasonable and just; offering the same for sale at prices
higher than are reasonable and just; and marking for sale by retail said
commodities at prices ascertained by the addition to cost of fifty per cent or
more or made up of cost plus a gross profit of a percentage greater than by the
order recognized as fair or a percentage indicated as unfair.
Held, per
Davies C.J., Anglin and Mignault JJ., Idington, Duff and Brodeur JJ. contra,
that the Board had authority to make the order; that Parliament had power to
confer the authority on the Board by its jurisdiction to make laws for
"the regulation of Trade and Commerce" and for "the peace, order
and good government of Canada" and possibly, except as to the power of the
Board to inquire into trade matters, by its jurisdiction to legislate on
"Criminal Law."
[Page 457]
By sec. 38 of the Board of Commerce Act the
Board is authorized to require that any order it issues shall be made a rule of
the Exchequer Court or of any superior court of a province.
Held, per
Davies C.J., Anglin and Mignault JJ., Idington, Duff and Brodeur JJ. expressing
no opinion, that Parliament may, in passing legislation within its
jurisdiction, impose duties upon any subjects of the Dominion including
officials of provincial courts and that the Board could validly exercise the
power so conferred.
Case stated by the Board of Commerce for the opinion of the Supreme Court
of Canada.
The provisions of the Acts in question on
this appeal and the order of the Board are set out in the reasons for judgment.
The questions submitted is whether or not the Board had jurisdiction to make
the order and to require that it be made a rule of the Supreme Court of
Ontario.
W. F. O'Connor K.C., and Duncan, appeared
for the Attorney General of Canada.
Lafleur K.C., for
the Attorney General of Alberta.
Tilley K.C., for
Manufacturing Associations interested.
The opinions of the Chief Justice and of Anglin
a.nd Mignault JJ. were written by:—
Anglin J.—In this case I am to deliver the judgment of my Lord, the Chief
Justice, Mr. Justice Mignault and myself.
The Board of Commerce, constituted under the
authority of c. 37 of the Dominion Statutes of 1919, is by s. 32 of that Act
empowered to
state a case in writing for the opinion of
the Supreme Court of Canada upon any question which, in the opinion of the
Board, is a question of law or of jurisdiction.
[Page 458]
Purporting to proceed under this provision the
Board presented for determination by this court a series of six questions—three
of them directed to the constitutional validity of certain provisions of the
Combines and Fair Prices Act (c. 45 of the statutes of 1919) and the other
three to the construction of certain sections of the same statute. With a view
to meeting a suggestion that Parliament had not intended to authorize the
submission of abstract questions for the opinion of the court, the Board
amended the case by adding to it a statement that the questions submitted had
arisen in the consideration of certain matters actually pending before it. Glasgow
Navigation Co. v. Iron Ore Co..
After hearing argument during the winter term, however, the court was of the
opinion that the case as presented was not a "stated case" within the
contemplation of s. 32 of the Board of Commerce Act inasmuch as it did not
contain any statement of concrete facts out of which the questions formulated
arose; Re County Council of Cardigan;
compare the English O.34, r. 1 and Bulkeley v. Hope; but was rather, under the
guise of a stated case, an unintentional assumption of the power conferred on
the Governor-General-in-Council by s. 60 of the Supreme Court Act, to refer to
this court for hearing and consideration important questions of law or fact
touching (a) the interpretation of the British North America Acts, 1867 to
1886, or (b) the constitutionality or interpretation of any Dominion or
provincial legislation.
The attention of counsel having been drawn to
this aspect of the matter it was arranged that the case as originally submitted
should be superseded by a new
[Page 459]
case which should contain a statement of facts
in some matter or matters pending before the Board and formulate questions of
law or jurisdiction which had actually arisen in their consideration,
indicating how such questions arose. Such a case was accordingly filed and
supplemental argument upon it was recently heard. I am of opinion that inasmuch
as by s. 33 (3) of the Board of Commerce Act the finding or determination of
the Board on any question of fact within its jurisdiction is made binding and
conclusive, the case as now submitted falls within the intendment of s. 32 of
that statute. It states that the Board proposes to make an order in which,
after reciting that it has upon an oral investigation found that in some
thirty-six shops in the city of Ottawa men's ready made and partly made suits
and overcoats, purchased at a cost of $30 or under, have as a practice been
sold at the same percentage of gross profit or margin to the retailers as
commodities purchased by them at a greater cost and that unfair profits have
been made on such sales and that the merchants concerned have not offered their
stocks-in-trade of such commodities for sale at prices not higher than are
reasonable and just, but that extenuating circumstances render a prosecution
unnecessary, and that in the opinion of the Board fair profits on such
commodities may be ascertained on a basis set forth, it will proceed to order that
the individuals, firms, and corporations conducting such establishments, naming
them, be, and each of them is, restrained and prohibited from
(a) omitting
or refusing to offer for sale within the city of Ottawa said commodities in
accordance with the ordinary course of business at prices not higher than are
reasonable and just;
(b) offering for sale within the
City of Ottawa said commodities at prices higher than are reasonable and just;
[Page 460]
(c) making or taking upon
dispositions within the city of Ottawa by way of sale of said commodities
unfair profits being profits greater than those hereinbefore indicated as fair
profits;
(d) instituting,
continuing or repeating the practice of marking for sale by retail within the
City of Ottawa either the said commodities or stocks-in-trade of clothing of
which said commodities form part at prices calculated or ascertained by the
addition to cost of fifty per cent or more of cost or at prices made up of cost
plus a margin or gross profit of (a) a percentage greater than by this
order recognized as fair, or (b) a percentage by this order indicated as
unfair, whether or not sales are intended to be actually made at lower prices
and in conformity with this order, such practices being in the opinion of the
Board designed or calculated to unfairly enhance the price realized upon
dispositions by sale of said commodities.
At bar Mr. O'Connor, representing the Attorney
General, very properly conceded that clauses (a) and (b) of the proposed order
would be merely repetitions of the general statutory prohibition implied in s.
17 of the Combines and Fair Prices Act and are not in a defensible form, and he
accordingly abandoned them. As to the remaining clauses (c) and (d), the stated
case submits two questions:
"(1) Has the Board lawful authority to make
the order?
"(2) Has the Board lawful authority to
require the Registrar or other proper officer of the Supreme Court of Ontario
to cause the order when issued to be made a rule of said Court?"
Sec. 18 of the Combines and Fair Prices Act
purports in explicit terms to confer the authority to make such a restraining
or prohibitive order, and s. 38 of the Board of Commerce Act likewise purports
in explicit terms to enable the Board to require that any order made by it
shall be made a rule, order or decree of the Exchequer Court or of any superior
court of any province of Canada. The questions presented are, therefore, in
reality whether these particular provisions
[Page 461]
are within the legislative jurisdiction of
Parliament. They may be more conveniently considered separately.
Upon the policy, efficacy or desirability of
such legislation it should be unnecessary to state that an opinion is neither
sought nor expressed.
Could Parliament empower the Board to make the
order?
Counsel representing the Attorney General
maintains that it could by virtue of its legislative jurisdiction (a) over
"The Criminal Law," (b) in regard to "The Regulation of Trade
and Commerce," and (c) "To make Laws for the Peace, Order and Good
Government of Canada" (B.N.A. Act, s. 91).
Sec. 17 of the Combines and Fair Prices Act
prohibiting the unreasonable accumulation or withholding of "necessaries
of life" defined by s. 18 (recently construed by this court in the case of
Price Bros. Limited), and requiring that any excess of necessaries of life and
all stocks in trade of such necessaries shall be offered for sale at reasonable
and fair prices, and s. 22, which imposes penalties, inter alia, for
contraventions of s. 17, may, I think, be held valid (the latter pro tanto) as
criminal legislation. The provision of s. 18 authorizing the Board to make the
inquiries therein provided for and to determine what shall constitute unfair
profits may possibly be supported as ancillary criminal legislation, as well as
for the purposes of s. 24.
But I think it is not possible to support, as
necessarily incidental to the efficient exercise of plenary legislative
jurisdiction over "the criminal law," the further provision of s. 18
purporting to empower the court to restrain prospective breaches of the
statute, the making or taking of unfair profits, and practices calculated
unfairly to enhance costs or prices, or the
[Page 462]
provisions of s. 38 of the Board of Commerce Act
for making decisions or orders of the Board rules or decrees of the Exchequer
Court or of any provincial superior court. The exception at the end of s. 91 of
the B.N.A. Act, although applicable to all the enumerated heads of s. 92,
was not meant to derogate from the
legislative authority given to provincial legislatures by these sixteen
subsections, save to the extent of enabling the Parliament of Canada to deal
with matters local and private in those cases where such legislation is
necessarily incidental to the exercise of the powers conferred upon it by the
enumerative heads of s. 91.
Attorney General for Ontario v. Attorney General for Canada,
at page 360; Montreal v. Montreal Street Rly, Co..
In so far as the provisions of s. 18 immediately
under consideration may involve an invasion of the field of property and civil
rights assigned to provincial legislative jurisdiction by s. 92 (12), in my
opinion they cannot be supported under s. 91 (27).
The jurisdiction of Parliament over "The
Regulation of Trade and Commerce" (s. 91 (2)) has frequently been invoked—usually
without success—either in supporting federal legislation alleged to invade the
provincial field or in attacking the validity of provincial legislation claimed
to fall under one of the enumerated heads of s. 92, In Citizens Ins. Co. v.
Parsons,
at page 112, the Judicial Committee first points out that these words are not
used in an unlimited sense as is apparent from their collocation and from the
specific enumeration of several subjects which in their broadest sense the
words "the regulation of trade and commerce" would include. Their
Lordships suggest
[Page 463]
that regulations relating to general trade
and commerce were in the mind of the legislature,
and that these words (p. 113)
would include political arrangements in
regard to trade requiring the sanction of Parliament, regulation of trade in
matters of inter-provincial concern and it may be that they would include
general regulation of trade affecting the whole Dominion; (but) their Lordships
abstain * * from any attempt to define the limits of the authority of the
Dominion Parliament in this direction.
In Bank of Toronto v. Lambe, it was held that an attempt
to make the expression, "the regulation of trade and commerce" cover
direct taxation of banks so as to exclude provincial power to impose such
taxation would unduly strain it. What was said in the Parsons Case, was impliedly approved in The
Local Prohibition Case.
In Montreal v. Montreal Street Rly. Co., Lord Atkinson, after
setting out some propositions which The Local Prohibition Case (1)
should be taken to have established with regard to the purview of the exception
to the provincial legislative authority contained in s. 91 of the B.N.A. Act at
its end and the restrictions which must be imposed on the legislative powers of
the Dominion over unenumerated subjects exercisable under its jurisdiction
to make laws for the peace, order, and good
government of Canada,
says, at p. 344, that
these enactments, secs. 91 and 92, indicate
that the exercise of legislative power by the Parliament of Canada in regard to
all matters not enumerated in s. 91 ought to be strictly confined to such
matters as are unquestionably of Canadian interest and importance and ought not
to trench upon provincial legislation with respect to any classes of subjects enumerated
in s. 92, * * * and that if the Parliament of Canada had authority to make laws
applicable to the whole Dominion in relation to matters which in each province
are substantially of
[Page 464]
local or private interest upon the
assumption that these matters also concern the peace, order and good government
of the Dominion, there is hardly a subject upon which it, might not legislate
to the exclusion of provincial legislation. The same considerations appear to
their Lordships to apply to two of the matters enumerated in s. 91, viz., the
regulation of trade and commerce.
Ex facie the last
sentence would almost seem to import that legislation properly held to fall
within sec. 91 (2) of the B.N.A. Act must not trench upon the provincial
field—that Parliament cannot in an otherwise legitimate attempt "to
regulate trade and commerce" legislate so as to affect matters with which
a provincial legislature might deal in some other aspect as falling within
"property and civil rights." In The Insurance Act Reference, at page 309, I was
disposed so to interpret his Lordship's language. But if that be its real
meaning "the regulation of trade and commerce" would cease to be
effective as an enumerated head of federal legislative jurisdiction. In the
more recent decision of John Deere Plow Co. v. Wharton, the partial interpretation
put on head No. 2 of sec. 91 in Citizens Ins. Co. v. Parsons, was again approved and,
while it was pointed out that the exclusive power to regulate trade and
commerce thereby conferred must, like the expression
property and civil rights in the province
in sec. 92, receive a limited construction, it
was held to
enable the Parliament of Canada to
prescribe to what extent the powers of companies the objects of which extend to
the whole Dominion should be exercisable and what limitation should be placed
on such powers. For if it be established that the Dominion Parliament can
create such companies then it becomes a question of general interest throughout
the Dominion in what fashion they should be permitted to trade.
[Page 465]
The clear effect of this last decision, I take
it, is that s. 91 (2) retains its place and office as an enumerative head of
federal legislative jurisdiction and that legislation authorized by its terms,
properly construed, is not subject to the restrictions imposed on Dominion
legislation that depends solely on the general "peace, order and good
government" clause, but, on the contrary, is effective although it invades
some field of jurisdiction conferred on the provinces by an enumerated head of
s. 92.
Probably the test by which it must be determined
whether a given subject matter of legislation, primâ facie ascribable to
either, properly falls under s. 91 (2) or s. 92 (13) is this:—Is it as
primarily dealt with, in its true nature and character, in its pith and
substance, (in the language of Viscount Haldane's judgment just quoted)
a question of general interest throughout
the Dominion
or is it (in Lord Watson's words in the Local
Prohibition Case)
from a provincial point of view of a local
or private nature?
In order to be proper subjects of Dominion
legislation under "the regulation of trade and commerce" it may well
be that the matters dealt with must not only be such as would ordinarily fall
within that description, but, if the legislation would otherwise invade the
provincial field, must also be
of general interest throughout the
Dominion,
or, in the language used by Lord Watson in The
Local Prohibition Case (p. 361) in regard to legislation under the peace, order
and good government clause upon matters not enumerated in s. 91, must be
unquestionably of Canadian interest and
importance.
[Page 466]
Mr. Justice Clement suggests this view in his
valuable work on the Canadian Constitution (3 ed.), at pp. 448 and 688, and it
may be that that was all Lord Atkinson intended when he said that the
considerations applicable to the general powers of the Dominion Parliament
supplementary to its enumerated powers apply also to the powers conferred on it
under the head, "The Regulation of Trade and Commerce." Otherwise I
find it difficult to reconcile his views with those expressed in the Parsons
Case,
and in John Deere Plow Co. v. Wharton.
The regulation of the quantities of
"necessaries of life" that may be accumulated and withheld from sale
and the compelling of the sale and disposition of them at reasonable prices
throughout Canada is regulation of trade and commerce using those words in an
ordinary sense. While the making of contracts for the sale and purchase of
commodities is primarily purely a matter of "property and civil
rights," and legislation restricting or controlling it must necessarily
affect matters ordinarily subject to provincial legislative jurisdiction, the
regulation of prices of necessaries of life—and to that the legislation under
consideration is restricted—may under certain circumstances well be a matter of
national concern and importance—may well affect the body politic of the entire
Dominion. Moreover, "necessaries of life" may be produced in one province
and sold in another. In the case of manufactured goods the raw material may be
grown in or obtained from one province, may be manufactured in a second
province and may be sold in several other provinces.
[Page 467]
Effective control and regulation of prices so as
to meet and overcome in any one province what is generally recognized to be an
evil—"profiteering"—an evil so prevalent and so insidious that in the
opinion of many persons it threatens to-day the moral and social well-being of
the Dominion—may thus necessitate investigation, inquiry and control in other
provinces. It may.be necessary to deal with the prices and
the profits of the growers or other producers of raw material, the
manufacturers, the middlemen and the retailers. No one provincial legislature
could legislate so as to cope effectively with such a matter and concurrent
legislation of all the provinces interested is fraught with so many
difficulties in its enactment and in its administration and enforcement that to
deal with the situation at all adequately by that means is, in my opinion,
quite impracticable.
Viewed in this light it would seem that the
impugned statutory provisions may be supported, without bringing them under any
of the enumerative heads of s. 91, as laws made for the peace, order and good
government of Canada in relation to matters not coming within any of the
classes of subjects assigned exclusively to the legislatures of the provinces,
since, in so far as they deal with property and civil rights, they do so in an
aspect which is not "from a provincial point of view local or
private" and therefore not exclusively under provincial control.
"It must be borne in mind," says Lord
Haldane in the recent case of John Deere Plow Co. v. Wharton, at page 339,
in construing the two sections that matters
which in a special aspect and for a particular purpose may fall within one of
them may in a different aspect and for a different purpose fall within the
other.
[Page 468]
In such cases the nature and scope of the
legislative attempt of the Dominion or of the Province, as the case may be,
have to be examined with reference to the actual facts if it is to be possible
to determine under which set of powers it falls in substance and reality.
The legislation now under consideration must
fall under the one set of powers or under the other, since
the powers distributed between the Dominion
on the one hand and the provinces on the other hand cover the whole area of
self-government within the whole area of Canada. It would be subversive of the
entire scheme and policy of the Act to assume that any point of internal
self-government was withheld from Canada. Attorney General for Ontario v.
Attorney General for Canada,
at page 581, per Loreburn L.C.
As put by Sir Montague Smith in Russell v.
The Queen,
at pages 839, 840:
What Parliament is dealing with in
legislation of this kind is not a matter in relation to property and its
rights, but one relating to public order and safety. That is the primary matter
dealt with, and though incidentally the free use of things in which men may
have property is interfered with, that incidental interference does not alter
the character of the law. Upon the same considerations, the Act in question
cannot be regarded as legislation in relation to civil rights. In however large
a sense these words are used, it could not have been intended to prevent the
Parliament of Canada from declaring and enacting certain uses of property, and
certain acts in relation to property, to be criminal and wrongful.
After giving illustrations of laws designed for
the promotion of public order, safety or morals which, nevertheless, prohibit
certain uses of, and certain acts in relation to, property, his Lordship
proceeds:
Few, if any, laws could be made by
Parliament for the peace, order and good government of Canada which did not in
some incidental way affect property and civil rights; and it could not have
been intended when assuring to the provinces exclusive legislative authority on
the subjects of property and civil rights, to exclude the Parliament from the
exercise of this general power whenever any such incidental interference would
result from it. The true nature and character of the legislation in the
particular instance under discussion must always be determined, in order to
ascertain the class of subject to which it really belongs.
[Page 469]
Lord Fitzgerald in delivering the judgment of
the Privy Council in Hodge v. The Queen, quoted extensively and
with approval from the Russell judgment and referring to it and also to Citizens
Ins. Co. v. Parsons,
said
that the principle which these cases
illustrate is, that subjects which in one aspect and for one purpose fall
within sect. 92 may, in another aspect and for another purpose fall within
sect. 91,
and this is said, as the passages cited shew, in
relation to the general Dominion power to make laws for the peace, order and
good government of Canada as well as in relation to matters falling clearly
within some one of the enumerated heads of s. 91. Reference may also be made to
Union Colliery Co. v. Bryden,
at page 587, and to the oft quoted language of Lord Watson in the Local
Prohibition Case,
at page 361.
Their Lordships do not doubt that some
matters, in their origin local and provincial, might attain such dimensions as
to affect the body politic of the Dominion, and to justify the Canadian
Parliament in passing laws for their regulation or abolition in the interest of
the Dominion.
I ventured in the Insurance Act Reference, at page 310, to state what
I conceive to be the result of the authorities on this particular point in
these words:
When a matter primarily of civil rights has
attained such dimensions that it affects the body politic of the Dominion and
has become of national concern it has in that aspect of it, not only ceased to
be "local and provincial" but has also lost its character as a matter
of "civil rights in the province" and has thus so far ceased to be
subject to provincial jurisdiction that Dominion legislation upon it under the
"peace, order and good government" provision does not trench upon the
exclusive provincial field and is, therefore, valid and paramount.
In the judgment of the Privy Council on the same
Reference,
Lord Haldane said, at page 595:
[Page 470]
There is only one case, outside the heads
enumerated in s. 91, in which the Dominion Parliament can legislate effectively
as regards a province, and that is when the subject matter lies outside all the
subject matters enumeratively entrusted to the province under sect. 92. Russell
v. The Queen
is an instance of such a case.
It may be said that if the subject matter of the
Dominion legislation here in question, when its true aspect and real purpose
are considered, relates to public order, safety or morals, affects the body
politic of the Dominion and is a matter of national concern, so that it can be
supported under the general peace, order and good government provision of s. 91
without recourse to any of the enumerated heads, it is unnecessary and
inadvisable to attempt to bring it under head No. 2. But while, as Lord Haldane
said in The Insurance Case
at page 596, great caution must always be exercised in applying the well
established principle that
subjects which in one aspect and for one
purpose fall within the jurisdiction of the provincial legislatures may in
another aspect and for another purpose fall within Dominion legislative
jurisdiction,
having regard to the warning of Lord Watson in
the Local Prohibition Case,
at pages 360-1, that
the exercise of legislative power by the Parliament
of Canada, in regard to all matters not enumerated in s. 91, ought to be
strictly confined to such matters as are unquestionably of Canadian interest
and importance, and ought not to trench upon provincial legislation with
respect to any of the classes of subjects enumerated in s. 92. To attach any
other construction to the general power which, in supplement of its enumerated
powers, is conferred upon the Parliament of Canada by s. 91 would, in their
Lordships' opinion, not only be contrary to the intendment of the Act, but
would practically destroy the autonomy of the provinces. If it were once
conceded that the Parliament of Canada has authority to make laws applicable to
the whole Dominion, in relation to matters which in each province are substantially
of local or private interest, upon the assumption that these matters also
concern the peace, order, and good government of the Dominion, there is hardly
a subject enumerated in s. 92 upon which it might not legislate to the
exclusion of the provincial legislatures,
[Page 471]
I think it is better that legislation such as
that with which we are now dealing, which undoubtedly affects what would
ordinarily be subject matters of provincial jurisdiction, should, if possible,
be ascribed to one of the enumerated heads of s. 91. I prefer, therefore, to
rest my opinion upholding its constitutional validity on the power of the
Dominion Parliament to legislate for "the Regulation of Trade and
Commerce" as well as on its power
to make laws for the peace, order and good
government of Canada
in regard to matters which, though not referable
to any of the enumerated heads of s. 91, should, having regard to the aspect in
which and the purpose for which they are dealt with, properly be held not to
fall within any of the enumerated heads of s. 92—to "lie outside all the
subject matters" thereby "entrusted to the province."
The carrying out of the Act now in question, as
I have endeavoured to point out, will, in some of its phases, affect the
inter-provincial trade and the foreign trade of Canada. It has to do with the
general regulation of trade in necessaries of life throughout the Dominion. It
would therefore seem to fall within the jurisdiction conferred by Head No. 2 as
indicated in Citizens Ins. Co. v. Parsons, at pages 112-113.
No objection can successfully be founded upon
the fact that the Board must exercise its powers from time to time in a
particular province. Colonial Building Association v. Attorney
General of Quebec.
The necessity of such local action and regulation is perhaps the chief
justification for the delegation to a
[Page 472]
Board or Commission of the power to define what
shall be unfair profits and unreasonable, and unjust prices. The unfairness of
profits and the unreasonableness and injustice of prices, depends so largely on
local conditions which vary from day to day and from place to place that
Parliament could not itself deal with them by general legislation. Effective
regulation of such matters can be accomplished only by some body such as the
Board of Commerce endowed with the powers bestowed upon it and ready from time
to time to deal promptly with the problems involved as they arise. Yet the
power of Parliament to delegate its functions to the limited extent for which
the Combines and Fair Prices Act provides has been challenged. We had occasion
comparatively recently to consider and overrule a similar objection in Re
Gray,
at pp. 170, 175. Dealing with the power of a provincial legislature to confer
on bodies of its own creation authority to make by-laws and regulations upon
specific subjects and with the object of carrying an enactment of the
legislature into effect, their Lordships of the Privy Council said in Hodge v.
The Queen,
at page 132:
It is obvious that such an authority is
ancillary to legislation, and without it an attempt to provide for varying
details and machinery to carry them out might become oppressive, or absolutely
fail. The very full and very elaborate judgment of the Court of Appeal contains
abundance of precedents for this legislation entrusting a limited discretionary
authority to others, and has many illustrations of its necessity and
convenience. It was argued at the bar that a legislature committing important
regulations to agents or delegates effaces itself. That is not so. It retains
its powers intact, and can, whenever it pleases, destroy the agency it has
created and set up another, or take the matter directly into its own hands. How
far it shall seek the aid of subordinate agencies, and how long it shall continue
them, arc matters for each legislature, and not for courts of law, to decide.
[Page 473]
The Acts now under consideration involve no such
abdication of legislative jurisdiction—no such abrogation of the power of one
of the integral constituents of the legislature as was attempted in recent
Manitoba legislation held ultra vires by the Judicial Committee in Re
the Initiative and Referendum Act,
where such a limited delegation of legislative functions as was sanctioned in
the Hodge Case
again received their Lordships' approval.
However formidable may be the obstacles to the
creation of a Dominion court of criminal jurisdiction presented by clause 27 of
section 91 and clause 14 of section 92, of the B.N.A. Act, I see no valid
objection to the constitution by our Parliament under s. 101 of a court to
carry out the provisions of the Acts now before us designed for the regulation
of trade and commerce; and the power to make an order such as that now under
consideration, eliminating from it clauses (a) and (b) of the paragraph
numbered 1, which are not supported, seems a reasonable and necessary
jurisdiction to vest in such a body, in order that its administration may be
effective. At all events, if Parliament is endowed with legislative
jurisdiction to deal with the subject of profiteering under the head of
"the regulation of trade and commerce" as a matter not substantially
of local or provincial interest but affecting the well being, social, moral and
economic, of the Dominion at large, there appears to be no tenable objection to
its jurisdiction to confer on a court of its own creation power to restrain and
prohibit contraventions of such regulations and restrictions, general or
particular, within the purview of the statute, as it may be found necessary or
proper to impose.
[Page 474]
Again it is objected that the proposed order is
rather a local regulation than a restraining order. I think not. It will impose
a behest nominatim on a number of individuals, firms and corporations
who were first cited to appear before the Board and whose dealings with the
subject matter of such behest were investigated by the Board. It is just as
much an order within the contemplation of s. 18 of the Combines and Fair Prices
Act as it would be if it were one of several similar documents dealing
separately with each of the parties to be enjoined.
No valid objection to the provision for making
such an order a rule, order or decree of a provincial superior court has, in my
opinion, been presented. The machinery of the provincial court is to be
utilized for a Dominion purpose. The power of Parliament to require this to be
done is distinctly affirmed in Valin v. Langlois, and the express approval
by this court of the following passage from the work of the late Mr. Lefroy on
Legislative Powers in Canada, at page 510, in Re Vancini, at page 626, puts it
beyond questionhere.
The Dominion Parliament can, in matters
within its sphere, impose duties upon any subjects of the Dominion whether they
be officials of provincial courts, other officials, or private citizens; and
there is nothing in the British North America Act to raise a doubt about the
power of the Dominion Parliament to impose new duties upon the existing
provincial courts, or to give them new powers as to matters which do not come within
the subjects assigned exclusively to the legislatures of the provinces, or to
deprive them of jurisdiction over such matters.
The authorities on this feature of the case are
collected and discussed in Mr. Justice Clement's work, at p. 531.
We are for these reasons of the opinion that the
power of Parliament to confer the authority, to the existence of which the
questions in the stated case are directed,
[Page 475]
has not been successfully impugned and that the
right of the Board of Commerce to make the proposed order, eliminating from it
clauses (a) and (b) of the operative paragraph numbered 1, may be upheld as an
exercise of authority validly bestowed under the jurisdiction of Parliament to
make laws for "the regulation of trade and commerce" and for "the
peace, order and good government of Canada," and, in so far as the
findings in its recitals are concerned, possibly also under Dominion
legislative jurisdiction over "The Criminal Law," although the
investigation and the findings made thereon for the purpose of determining what
are reasonable and just prices and of affording a foundation for an order
prohibiting the making or taking of unfair profits and practices calculated to
unfairly enhance costs or prices may not form part of a criminal cause or
matter. Rex v. Manchester Profiteering Committee.
We would therefore answer both the questions of
the stated case in the affirmative.
Idington J.—This is claimed to be a stated case pursuant to section 32 of the
Board of Commerce Act, which reads as follows:—
32. (1) The Board may, of its own notion,
or upon the application of any party, and upon such security being given as it
directs, or at the request of the Governor-in-Council, state a case, in
writing, for the opinion of the Supreme Court of Canada upon any question which
in the opinion of the Board, is a question of law or of jurisdiction.
(2) The Supreme Court of Canada shall hear
and determine such question or questions of law arising thereon, and remit the
matter to the Board with the opinion of the Court thereon.
[Page 476]
This section is in substance the same as that
appearing in the Railway Act as section 55 thereof and is evidently taken
therefrom.
The Board of Railway Commissioners in practice
formulate a statement of facts which of course is binding upon us, and then
submit the questions of law which they desire answered.
The party then appealing has charge of the
conduct of the appeal, and same is argued out in a due and orderly manner,
first by counsel for appellant and then by the counsel for respondent, as all
appeals on a stated or special case submitted to this or any other appellate
court have been heretofore treated.
The origin of such a mode of appeal need not be
traced for many illustrations are to be found in various branches of both civil
and criminal, and quasi-criminal, law.
The necessity for the statement of a concrete
case seems to me to be almost self-evident, and at all events all relevant
precedents I can find establish that.
It so happened that the Board of Commerce got
seized of the idea that all it had to do was to submit questions to this court
for its opinion relative to mere abstract points raised upon the construction
of some sections of the Combines and Fair Prices Act, without stating any
concrete case. And half a dozen such were presented.
I was applied to as. Judge in Chambers and
refused to recognize such right by making any formal order but suggested to the
Registrar that he had better set the matter down to be brought under the notice
of the full court at its then approaching sittings, and he did so.
[Page 477]
Upon its coming up there, it developed that
there had been a number of questions raised by parties who had been before the
Board.
I insisted, for my part, that unless and until a
stated concrete case was made in accord with the settled practice of the
Railway Board, there should not be a hearing granted.
There appeared counsel for the Board of
Commerce, which surprised me somewhat, and for the Attorney General for Canada
and for a number of the parties concerned.
A long discussion ensued resulting in the matter
being left to all those so concerned to try and agree upon the selection of a
case upon which argument could properly take place.
The case of the Ottawa Clothiers had been
mentioned in the course of said discussion, as one in which all the questions
desired to be raised had been therein raised before the Board, and another was
suggested as equally important.
Previously to said sitting of this court, I had
given leave to appeal in a concrete case from Winnipeg which I suggested might
bring up much that it was desired to have this court pass upon.
The net result of the foregoing attempt to frame
a suitable case, consisted of the so-called stated case submitted by the Board
in the first place, with a brief typewritten memo, which was inserted therein,
and after elaborate argument of counsel for all parties appearing before us,
and due consideration of the non-observance of our demand, for a concrete case,
it was determined by us to insist thereon. The decision in Re the County
Council of Cardigan,
was pointed to as a guide.
[Page 478]
The result is now before us in an alleged stated
case in which instead of half a dozen questions as previously of a purely
abstract character, we have presented to us to be answered, two questions
relative to the jurisdiction to make a proposed order based upon what is
alleged to be the finding of facts.
The latter are referred to as follows:—
All evidence elicited was given subject to
the jurisdiction of the Board to make any order consequent upon the inquiry and
to the power of the Parliament of Canada to enact the legislation under which
the inquiry was proceeding, counsel for the clothiers having formally protested
such jurisdiction. At the conclusion of the sittings argument was heard on
behalf of the clothiers and as well on behalf of the public, whereafter the
Board took into consideration all matters, including the protest as to
jurisdiction. The Board, upon the evidence before it, found as matters of fact
the matters set forth in the recitals to the draft order which is Schedule
"B."
The recital thus referred to is as follows:—
It appearing that heretofore and since the
7th day of July, 1919, sales by retail of the commodities Men's Ready-Made and
Partly Ready-Made Suits and Overcoats (hereinafter referred to as
"commodities") purchased by the retailer thereof at a cost of thirty
dollars or under have, as a practice, been made within the city of Ottawa by
the respective persons, firms and corporations hereinafter named (all being
retailers of clothing within said city) at the same percentage of gross profit
or margin to the retailer as the commodities purchased by him or them at a
greater cost than thirty dollars, and that said persons, firms and corporations
respectively have, since said 7th day of July, 1919, made and taken unfair
profits upon sales of such commodities so purchased at a cost of thirty dollars
or under and have not offered their respective stocks-in-trade of such
immediately hereinbefore mentioned commodities (the same being necessaries of
life as defined by section 16 of the Combines and Fair Prices Act, 1919), at
prices not higher than were reasonable and just, the said unfair profits being
profits greater than those hereinafter indicated as fair profits; and it
further appearing that the conditions mentioned are not such as to call for
prosecution, because the making or taking of such unfair profits was not in
deliberate breach of or non-compliance with section 17 of the Combines and Fair
Prices Act, 1919, but was the result of the existence of a long standing
practice of marking selling prices upon the basis of addition of arbitrary
percentages for gross profit or margin to cost, which practice has been almost
universal throughout Canada, was fair at the time of instituting it, but has
become unfair and ought
[Page 479]
to have been varied by reduction of such
percentages in consequence of continued substantial increases in basic costs
causing an increased yield of profit, in terms of money, net as well as gross
or margin; wherefrom the hereinbefore indicated offences against said section
17 of the Combines and Fair Prices Act, 1919, resulted.
Then follows the opinion of the Board thereon.
I do not consider this, which deals with or is
made to represent the result of an inquiry by the Board into the respective
courses of business pursued by thirty-six different persons or firms or
corporate companies carrying on business in Ottawa and are grouped together in
one order, is either such a concrete case as was demanded or presented by way
of an appeal as such a case should be.
The Board frames and presents the order.
By section 3 of the Combines and Fair Prices
Act, 1919, it is declared that the Board
shall have the general administration of
this Act which shall be read and constructed as one with The Board of Commerce
Act.
Section 18 of the same Act, which is the
immediate authority upon which the proposed order must rest, if at all valid,
by subsection (1) thereof provides as follows:—
18. (1) The
Board is empowered and directed to inquire into and to restrain and prohibit,—
(a) any breach or non-observance of
any provision of this Act;
(b) the making or taking of unfair
profits for or upon the holding or disposition of necessaries of life;
(c) all such practices with respect
to the holding or disposition of necessaries of life, as, in the opinion of the
Board are designed or calculated to unfairly enhance the cost or price of such
necessaries of life.
The only concrete facts presented to us are
those above recited, presumably the result of the exercise of the powers and
discharge of duties above set forth.
[Page 480]
There is no appellant named or indicated unless
from the fact that a member of the Board appeared as counsel for the Attorney
General for the Dominion, and opened the argument before us supporting the
action of the Board.
On the application I have referred to, first
coming before us, the Board was specifically represented by counsel for it; but
none appeared on the last argument herein though the Board of Commerce Act, by
subsection 7 specially provides for the Board being heard by counsel or
otherwise on appeals such as this. Presumably this provision was made to
overcome the possible effect of the case of Smith v. Butler, where the court held that
the justices could not be heard in support of an appeal stated by them.
Such a case so presented without an appellant, I
respectfully submit, should be dismissed.
The majority of the court hold that
notwithstanding all the foregoing peculiar features of this case, as an appeal
on a stated case, we must answer the questions submitted.
Therefore, bowing to their opinion, I will
proceed to deal therewith.
On the first argument the leading counsel who
presented the case in its then condition seemed to rest the exercise of power
in question as based upon the power of the Dominion Parliament over criminal
law, and his junior as if based upon its power over trade and commerce.
Counsel respectively for the firms or parties
then concerned in the exercise of the power and for the Province of Alberta,
each denying its existence, argued
[Page 481]
ably that we must look at the general purview of
the whole Act to determine its character and by doing so urged that it could
not be called legislation within the powers assigned Parliament relative to
criminal law and hence must be held as an Act dealing with property and civil
rights.
The elimination from the case, as first stated,
of four of the questions thereby submitted has rendered much of the argument
then considered necessary inapplicable to the case as it now stands before us.
The proposed order rests, upon subsections 1 and
2 of section 18, of which subsection 1 is above quoted, and the said subsection
2 is as follows:—
(2) For the purposes of this Part of this
Act, an unfair profit shall be deemed to have been made when, pursuant to and
after the exercise of its powers by this Act conferred, the Board shall declare
an unfair profit to have been made, and an unfair enhancement of cost or price
shall be such enhancement as has resulted from the making of an unfair profit.
Indeed this sub-section (2) in the last analysis
is that upon which it must rest.
Assuming the ancient laws against forestalling,
regrating and engrossing, which had long been treated as obsolete, and, being
considered unsuited to a free people, were finally repealed in England by 7
& 8 Vict., ch. 24, yet may be existent in older parts of Canada or
re-enacted as part of our criminal law, how can that help to maintain said
section as being within the power of the Dominion Parliament which for its
legislative authority must act within the power conferred by the British North
America Act?
It seems to me that the enactment of section 22
of the Combines and Fair Prices Act, coupled with much else therein, must have
been passed by reason of an
[Page 482]
oversight of the limitations in the British
North America Act, otherwise we would not be confronted with so much therein as
seems, to say the least, of very questionable authority.
I cannot imagine that Parliament really intended
to invade the rights secured to the provinces to the extent that some of these
enactments (of which section 18 is one) clearly do.
Section 91 of the British North America Act
provided as follows:—
91. It shall be lawful for the Queen, by
and with the advice and consent of the House of Commons, to make laws for the
peace, order and good government of Canada, in relation to all matters not
coming within the classes of subjects by this Act assigned exclusively to the
legislatures of the provinces; and for greater certainty, but not so as to
restrict the generality of the foregoing terms of this section, it is hereby
declared that (notwithstanding anything in this Act) the exclusive legislative
authority of the Parliament of Canada extends to all matters coming within the
classes of subjects next hereinafter enumerated; that is to say:—
Item 27 of the enumeration reads as follows:—
27. The Criminal Law, except the
Constitution of Courts of Criminal Jurisdiction, but including the procedure in
criminal matters.
By section 92 it is enacted as follows:—
92. In each province the legislature may
exclusively make laws in relation to matters coming within the classes of
subjects next hereinafter enumerated, that is to say,—
Item 14 of this enumeration reads as follows:—
14. The administration of justice in the
province, including the constitution, maintenance, and organization of
provincial courts, both of civil and of criminal jurisdiction, and including
procedure in civil matters in those courts.
The Board is constituted a court of record. Its
acts must be taken to be those of a court.
How can such a court, declared by the above
quoted section 3 of the Combines and Fair Prices Act to have
[Page 483]
the general administration of that Act which is
now in question, be held not to offend against these items, 27 of section 91,
and 14 of section 92?
The constitution of courts of criminal
jurisdiction
is expressly excluded by said item 27, and
the administration of justice in the
province
is, by the enacting part of section 92 and said
item 14 thereof handed over exclusively to the legislature thereof.
How can the Board claim in face thereof any
right to administer what it urges is criminal law?
The administration of procedure in criminal law
is not by a single line or letter assigned to the Dominion.
All the power that is conferred on Parliament
relative to procedure is to define the mode of procedure to be followed by the
provincial courts in the administration of criminal law.
Included in procedure, as heretofore
interpreted, is the law of evidence which Parliament may declare.
It has never occurred to any one hitherto, that
the conception of what would constitute relevant evidence should be something
evolved by a court, constituted by Parliament first to inquire and declare what
was a reasonable course of conduct on the part of any one of the classes of
business men falling within the provisions of the Combines and Fair Prices Act,
and then to warn, by virtue of section 18 thereof, those concerned where and
how the line to regulate such course of conduct should be drawn in future; and
then to inquire, after such warning had been given, whether any of those so
warned had transgressed; and then, if any one found by the inquisition of the
Board or its appointed examiners under section 19, by means of examining the
accused, his employees and books, to
[Page 484]
have transgressed, the offender so found guilty
may he handed over to the consideration of the Attorney General for the
Province who, as well as the offenders, would be bound in duty duly to observe,
under section 33 of the Board of Commerce Act, such findings of fact.
That section by sub-section 3 thereof provides
as follows:—
The finding or determination of the Board
upon any question of fact within its jurisdiction shall be binding and
conclusive.
Such is a fair outline of this new method of
defining what may become evidence, and hence legislation within the meaning of
item 27 of section 91 of the British North America Act relative to what is
covered by the phrase therein
but including the procedure in criminal
matters.
There is no other ground upon which, in a
strictly legal sense, such provision can be upheld, than as falling within this
reservation relative to matters of procedure.
I submit respectfully that the closest
examination, or most liberal interpretation, of these two items, 27 in section
91, and its counterpart in item 14 in section 92, of the British North America
Act, preclude the possibility of making out of them anything which can maintain
such a mixture of substantive "criminal law," and law including the
procedure in criminal matters, consistent with a due observance of the
exclusion of power over
the constitution of courts of criminal
jurisdiction
given by item 14 of section 92 to the provincial
legislatures, or in any way to support or justify such legislation as in said
section 18 of the Combines and Fair Prices Act, on which ultimately the
proposed order must rest.
[Page 485]
To do it justice the Board, or counsel for the
Attorney General, failed to attempt to put forward such a direct method of
dealing with the matter, though the section on which its proposed order must
rest, for a basis, necessarily involves all I have set forth in light of the
whole of the legislation in question.
The method of meeting so obvious a difficulty
was to suggest that as relative to criminal law it was maintainable as
ancillary thereto.
The British North America Act leave no room for
any such distinction. And the same sort of argument was put forward in the case
of Montreal Street Railway Co. v. Montreal, but rejected by a majority
of this court, and we were upheld by the court above in the appeal taken
therefrom by the decision in City of Montreal v. Montreal Street Rly.
Co..
That decision, of course, stands as a
declaration of principle for much more than is merely relative to what was
directly involved therein. I, therefore, rely upon its adoption of a principle
applicable in other regards, as well as upon its apt disposition of the
ancillary argument for which there was much more reason for its application
therein than there is herein.
In default of that argument maintaining the
jurisdiction of the Board, counsel falls back upon the provision in section 101
of the British North America Act, which reads as follows:—
101. The Parliament of Canada may,
notwithstanding anything in this Act, from time to time, provide for the
constitution, maintenance, and organization of a General Court of Appeal for
Canada, and for the establishment of any additional courts for the better
administration of the laws of Canada.
[Page 486]
By virtue of that section this court was
constituted; and, by virtue of the last part thereof, the Court of Exchequer
and the Board of Railway Commissioners were created.
Each of these lastly mentioned courts was
constituted as an additional court for the better administration of the laws of
Canada, and in no way, in actual practice, did they interfere with provincial
rights save when straining the power given, as in the Montreal case just cited.
It is conceivable that within the powers thus
assigned the Dominion Parliament, it might
for the better administration of the laws
of Canada
i.e., laws enacted by that Parliament, create
many such courts.
It is inconceivable to me how, when the relative
powers of Parliament and provincial legislatures are so tersely dealt with and
definitely expressed, as they are by the items of sections 91 and 92 which I
have already quoted, Parliament can properly constitute any additional courts
for the purpose in question herein.
In relation to many of the subjects enumerated
in section 91 over which the Dominion Parliament is given plenary powers, the
constitution by it of additional courts is quite conceivable, as within the
scope of section 101, and is also clearly necessarily so, in relation to the
government of territories not given a provincial legislature or the status of a
province, and all implied therein.
But whilst the administration of justice
thereunder may rest with the Dominion Parliament, how can the constitution of
courts of criminal jurisdiction or any part of the administration of justice
relative thereto
[Page 487]
be assigned by Parliament in anything relative
to the criminal law when so expressly excluded on the one hand regarding the
constitution of courts, and all that which is relative to the administration of
justice, so far as regards the constitution of courts of criminal jurisdiction
is, on the other hand, so expressly assigned to the respective provincial
legislatures.
Yet these enactments now in question, presume to
hand over the greater part of the administration of what is claimed to be
criminal law to the Board of Commerce. Not only that but do it in such a manner
as is quite repugnant to the ideals of British law and justice, as well exemplified
in the recent case of Law v. Chartered Institute.
This enactment which we have under consideration
constitutes the Board of Commerce the sole investigator, the sole prosecutor,
and the judge to determine the facts it has discovered, or imagines it has discovered,
and only when the Board deems proper accused is to be handed over to have the
formal part of rendering judgment duly executed. And, as if to let nothing
escape its grasp, the Board has delegated to it the power to make further
regulations as set forth below.
I suspect that the clear separation of the
legislative power from the administration of its products in relation to
criminal law was not born of accident but design, on the part of the astute men
who framed the British North America Act. Many obvious reasons existed for
doing so. The substantial racial differences between Upper and Lower Canada
(now respectively Ontario and Quebec) must never be forgotten if justice is to
be done in operating the British North America Act.
[Page 488]
Then failing to find that source of jurisdiction
available, the argument in support of the proposed order fell back upon the old
forlorn hope, so many times tried, unsuccessfully, upon this court and the
court above, of item 2 of section 91 of the British North America Act, which
empowers Parliament to deal with "the regulation of trade and
commerce."
The scope and purpose of this power has so often
been referred to in numerous cases, that I hardly think it necessary to repeat
what has so often been said in that regard.
I doubt if it has ever been heretofore relied
upon in support of such an extravagant claim as this put forward herein.
To regulate the prices charged in the tailor
shop, or the corner grocery, needs a power which has not only the limited
powers of Parliament but also all that is comprehended in the item 13 of
section 92 of the British North America Act, which gives exclusively to
provincial legislatures the power to make laws in relation to "property
and civil rights in the province."
What is this power so assigned to each of the
provincial legislatures worth, if it can be effectually wiped out by the
Dominion Parliament enacting a so-called criminal law and supplementing it by
such legislation as before us, including the large delegation of legislative
power given by section 39 of the Board of Commerce Act which reads as follows:—
39. Any rule, regulation, order or decision
of the Board shall, when published by the Board, or by the leave of the Board,
for three weeks in the Canada Gazette, and while the same remains in
force, have the like effect as if enacted in this Act, and all courts shall
take judicial notice thereof.
[Page 489]
Is there any sumptuary law or socialistic
conception of organized society which could not be made to fall within the power
of Parliament, by the same process of reasoning as must be resorted to, in
order to maintain the right of the Board to make the proposed order?
Our Confederation Act was not intended to be a
mere sham, but an instrument of government intended to assign to the provincial
legislatures some absolute rights, and of these none were supposed to be more
precious than those over property and civil rights.
The case of Citizen's Ins. Co. v. Parsons, at an early date in our
system of Federal Government decided in effect, by the principle expressly and
impliedly adopted therein, much more than appears on the superficial aspects
thereof relative to the contractual powers falling within civil rights. Its
implications have been maintained in many well known ways by numerous decisions
needless to cite.
The case of Vancini v. The King, so much relied on, not
only binds us but in the result reached I fully agree; yet I fail to see how
that or any of the decisions in the cases cited on behalf of the Board's power,
at all help to support its pretension in question herein; unless that in the
case of Getter v. Loughrin,
which does not bind us. If there was much resemblance between the legislation
in question in that case and this, I might find it necessary to say something,
but I fail to find any close resemblance.
Indeed there is, I venture to say, no judicial
authority maintaining such legislation.
[Page 490]
The counsel for the Attorney General of the
Dominion in his opening on the first argument, referred to certain remarks made
by me in the case of Weidman v. Schragg, at page 22, and repeats
the reference in his supplemental factum as if supporting his contention. I was
therein attempting to properly appreciate the scope of section 498 of the
Criminal Code as then in force. I still adhere to all I therein expressed, not
only in its immediate bearing upon the issue presented for consideration
therein, but, if I may be permitted to say so, in a much wider sense lying
within the power of Parliament to deal effectively with, not only by way of the
criminal law but also that bearing upon its power over patents and of
incorporating companies and the limitations it can impose relative to their
operative results.
I fail to see, however, that what I had there in
mind (and beyond, relative to which I did not give expression of judicial
opinion) can in any way help to maintain such legislation as before use.
Parliament has, in its residual power for the
"peace, order and good government of Canada," both legislatively and
administratively, a plenary power over territory not yet given the status of a
province.
Yet default satisfactory authority for the
maintenance of the remarkable legislation, now in question in relation to those
dwelling in one of the provinces, the residual power of Parliament was invoked.
Whatever may be said and must be admitted,
relative to the proper exercise of any of the enumerated powers conferred on
Parliament being likely to touch incidentally and necessarily upon property and
civil rights within a province, there the power to do so ends.
[Page 491]
I deny its existence in the residual power of
Parliament, save in the extreme necessity begotten of war conditions, or in
manifold ways that do not touch provincial rights.
The war had ended when the legislation now in
question was enacted.
It is one of the many curious things relative to
these Acts that there seems so much difficulty on the part of those who ought
to know in assigning them, or parts of them, to the exact power that is sought
to be exercised thereby.
It generally happens that amendments to the
criminal law are presented as such and the clear purposes and powers had in
view are, therefore, thereby well understood.
In this instance, if so designed, those sections
which form Part 2 of the Combines and Fair Prices Act, save section 20
expressly excluded, I respectfully submit should have found a place in the
chapter of important amendments to the Criminal Code passed in the same
session, assented to same day, and forming the very next chapter of the statutes.
And, not having done so, coupled with the curious blending of that which is intra
vires with what is ultra vires of Parliament, gives rise to many
questions we have not to answer, yet renders any consideration of these we are
asked to answer rather confusing.
Counsel for Alberta submits a recent decision in
Rex v. Manchester Profiteering Committee, upon an analogous statute
in England, where it was held that the legislation there in question, though
dealing with the fixing of prices and affixing penalties for breaches
[Page 492]
of the order determining same, was not criminal
law, is a very important one when we apply it to what may be possible for
provincial legislatures to enact within their powers over property and civil
rights.
In that connection it tends to demonstrate that
all that is proposed by the form of order presented herein is quite within the
powers of the provincial legislatures to enact and hence not within any of the
powers assigned to the Dominion.
However that may be we are confronted with
section 22 of the Combines and Fair Prices Act which enacts as follows:—
22. (1) Any person who contravenes or fails
to observe any of the provisions of this Part of this Act other than section
twenty shall be guilty of an indictable offence and liable upon indictment or
upon summary conviction under Part XV of the Criminal Code to a penalty not
exceeding five thousand dollars, or to imprisonment for any term not exceeding
two years or to both fine and imprisonment as specified, and any director or
officer of any company or corporation who assents to or acquiesces in the
contravention or non-observance by such company or corporation of any of the
said provisions shall be guilty of such offence personally and cumulatively
with his company or corporation and with his co-directors or associate
officers.
(2) For the purposes of the trial of any
indictment for any offence against this part of this Act, section five hundred
and eighty-one of the Criminal Code, authorizing speedy trials without juries,
shall apply.
There cannot be a doubt surely of the intention
that this enactment should be held part of the criminal law however absurd some
of the consequences may be.
For example, under section 18, if the Board
failed to observe any of its provisions, it must be held liable to be indicted
and punished according to the terms of the enactment.
Such like complications may arise in applying
section 22 to other sections, save section 20, in same part 2 of the Act.
[Page 493]
This sort of legislation is characteristic of
much more in these two Acts to be administered by the Board of Commerce.
Fortunately we have only to pass upon section 18
and answer one question, if concluding, as I do, for the reasons assigned
above, that it is ultra vires the Dominion Parliament and infringes upon
the exclusive jurisdiction of provincial legislatures, over property and civil
rights, and over the administration of justice in the province including
the constitution, maintenance and
organization of provincial courts both of civil and of criminal jurisdiction
as above set forth.
Hence I say "No" in answer to the
first question Has the Board lawful authority to make the order?
And, as an obvious consequence of that answer,
the second needs no answer.
As I am unable to find an appellant who has
prosecuted this so-called appeal, I cannot suggest imperatively who should pay
the costs.
The Attorney General for the Dominion had the
same right, as of course, to intervene and be heard in argument on so grave a
constitutional question, as has always been accorded by this court, in the like
cases, to him and provincial attorneys general.
But I cannot in the case before us hold him to
have been the appellant.
This is another illustration of how futile this
whole proceeding has been, and how far it has fallen short of what is required
in a stated case.
[Page 494]
To illustrate further what I have advanced I
imagine the order proposed might be held quite valid if dealing with traders in
Dawson City in the Yukon, over which Parliament has plenary power, but not when
dealing with traders in Ottawa, which is part of the Province of Ontario.
Duff J;—The scope of the authority arising under sec. 91-(2) of the
B.N.A. Act has been much discussed. No precise definition of that authority has
of course been given or even attempted; nevertheless, it has for 40 years been
a settled doctrine that the words "regulation of trade and commerce"
as they appear in that item cannot be read in the sense which would be
ordinarily ascribed to them if they appeared alone and unaffected by a
qualifying context. To adopt the language of Lord Hobhouse in the case of The
Bank of Toronto v. Lambe
at page 586.
it has been found absolutely necessary that
the literal meaning of the words should be restricted in order to afford scope
for powers which are given exclusively to the provincial legislatures,
and some definite limiting rules are deducible
from the decided cases.
In the Parsons Case, it was held that
this authority does not comprehend the
power to regulate by legislation the contracts of a particular business or
trade in a single province
the particular business or trade there under
consideration being the business of fire insurance.
In Hodge v. The Queen, the authority given to the
Provinces by item 9 of sec. 92 to make laws with respect to licenses for
raising a revenue for provincial purposes was considered sufficient to enable a
province
[Page 495]
to regulate within its own boundaries the manner
in which a particular trade is to be carried on and in the judgment delivered
upon the reference touching the validity of the Liquor License Act of 1883,
commonly known as the McCarthy Act, it was held that the authority of the
Dominion in relation to trade and commerce did not include authority to
regulate a particular trade by a licensing system applicable to the whole
Dominion. And again on the reference upon the subject of the Dominion Insurance
Act in 1916, Attorney General for Canada v. Attorney General of
Alberta,
this decision was affirmed and it was decided that the Dominion Insurance Act
professing to regulate the business of insurance by a single system of
licensing governing the whole of Canada could not be supported as an exercise
of the Dominion legislative power in relation to trade and commerce.
The decisions of the Judicial Committee in the
two last-mentioned cases appear to have been the logical result of the decision
in Hodge's Case,
for although it is quite true that after all proper modifications of the
natural meaning of the words used in the respective enumerations in secs. 91
and 92 have been made (by a comparison of the enumerations with each other in
accordance with the well known doctrine in Parson's Case at pages 108-9, there must
still be considerable overlapping of the domains ascribed to the Dominion and
the Provinces respectively by these enumerations; this is not because the
provinces are authorized by sec. 92 to trench upon the subject matters strictly
comprised within the enumerated items of sec. 91 (to pass laws for example
which could be described as "railway
[Page 496]
legislation strictly so called,"
Canadian Pacific Rly. Co. v. Bonsecours, or legislation dealing
with the subject matter of fisheries or a bankruptcy law or a copyright law, Attorney
General for Canada v. Attorney General for Ontario), but because the Dominion
for the purpose of giving effect to a legislative scheme properly failing
within the authority of one or more of the enumerated heads of sec. 91 may in
order to prevent the defeat of the scheme enact proper ancillary provisions upon
matters falling under some of the heads of sec. 92, Attorney General for
Canada v. Attorney General of Ontario.
It is, of course, an important principle that
legislation which for one aspect and for one purpose falls within the authority
conferred by sec. 92, may in another aspect and for another purpose fall within
the authority conferred by sec. 91, but where the question concerns the scope
of the enumerated heads of sec. 91 it is in the sense just indicated that this
principle must be understood. It cannot be applied in such a way, as Lord
Herschell said in the decision in the Fisheries case just referred to, as to
enable a provincial legislature to legislate in respect of the matters which
fall strictly within one of the specified classes enumerated in sec. 91.
Therefore the decision in Hodge's Case,
appears to have involved the conclusion that the kind of regulation which the
Judicial Committee there held to be competent to a provincial legislature, was
not the kind of regulation which is exclusively committed to the Dominion
Parliament by the second enumerated head of sec. 91; and it would only be a
corrollary of this to hold that the Dominion could not
[Page 497]
by enacting a law professing to put into effect
the same kind of regulation in each province, legitimately appropriate a field
belonging to one of the enumerated specific classes of sec. 92; and this is
what was decided upon the Reference touching the validity of the McCarthy Act.
In Attorney General for Canada v. Attorney General of Alberta, Lord Haldane speaking for
the Judicial Committee said:—
But in Hodge v. The Queen, the Judicial Committee had
no difficulty in coming to the conclusion that the local licensing system which
the Ontario statute sought to set up was within provincial powers. It was only
the converse of this proposition to hold, as was done subsequently by this
Board though without giving reasons, that the Dominion licensing statute known
as the McCarthy Act, which sought to establish a local licensing system for the
liquor traffic throughout Canada, was beyond the powers conferred on the
Dominion Parliament by s. 91.
By parity of reasoning it seems to follow as a
result of Parson's Case
that legislation regulating the contracts of a particular business or trade is
not the kind of regulation which is exclusively committed to Parliament by that
provision of sec. 91 now under discussion and consequently that it is not
competent to the Dominion to regulate such contracts in each Province by
legislation applicable to all of the provinces.
Again in the Montreal Street Railway Case, a Dominion enactment
purporting to regulate local railways in respect of through traffic, that is to
say traffic passing from a Dominion to a local line and vice versa, was
held to be ultra vires and it was decided that the authority conferred
by item No. 2 of sec. 91 could not be legitimately exercised in regulating the
management of "local works or undertakings" of the kind committed to
the exclusive jurisdiction of the province by item No. 10 of sec. 92.
[Page 498]
In Parson's Case, at pages 112 and 113
appears the well known elucidation of the language of No. 2 of sec. 91 by Sir
Montague Smith. In the Montreal Street Railway Case at page 344, the substance
of this passage is adopted by the Judicial Committee; and again in John
Deere Plow Co. v. Wharton,
at page 340, Lord Haldane speaking for the Judicial Committee said:—
Their Lordships find themselves in
agreement with the interpretation put by the Judicial Committee in Citizens
Insurance Co. v. Parsons, at pages 112 and 113, on head 2 of s.
91, which confers exclusive power on the Dominion Parliament to make laws
regulating trade.
Turning then to the exposition in Parson's
Case, thus adopted in 1912 and 1915, we
find (in addition to the negative proposition that the authority in question
does not comprehend the power to enact minute regulations in respect of a
particular trade), 1st that the context affords an indication that
"regulations relating to general trade and commerce" were in the mind
of the legislature, and 2nd that matters embraced by these words would include
political, arrangements in regard to trade
requiring the sanction of Parliament; regulation of trade in matters of
interprovincial concern
and possibly
general regulation of trade affecting the
whole Dominion.
It is not easy to ascribe a precise meaning to
the words "general trade and commerce" but the passage seems to imply
that the words "trade and commerce" are to be read conjunctively or
at all events that the word "trade" takes on a special colour and
significance from its association with the word "commerce"; and
whatever be the precise significance of the word
[Page 499]
"general" we are at least able to
affirm in consequence of the decisions already mentioned that it excludes
regulations such as those which were in question in Hodge's Case, in the McCarthy Act
reference, in Parson's Case,
and in the Montreal Street Railway Case.
To borrow a phrase used arguendo on the Liquor License appeal, Attorney
General of Ontario v. Attorney General for Canada "general"
in this passage means
general not as including all particulars
but general as distinguished from some particulars.
In the Montreal Street Railway Case,
at page 344, it was laid down in effect that the authority to deal with trade
and commerce ought not to be so construed and applied as to enable the
Parliament of Canada to make laws applicable to the whole Dominion in relation
to matters which in each province are substantially of local or private
interest and in particular in relation to matters which in each province are
comprehended within the subject matters assigned to the province by No. 10 of
sec. 92, viz., "local works and undertakings."
In addition to these negative and limiting rules
a recent decision, Wharton's Case,
affords an illuminating example of the application of the considerations
mentioned in Parson's Case. It was there held that companies
incorporated under the residuary power arising under sec. 91, having the status
of corporations throughout the Dominion generally might properly be subjects of
regulation under No. 2 of sec. 91 in the sense that Parliament in the exercise
of the
[Page 500]
authority thereby conferred might prescribe the
extent to which such companies should be entitled to trade in any of the
provinces. That is entirely consistent with the proposition laid down in Parson's
Case,
that the authority of Parliament under the heading mentioned is an authority to
pass regulations in relation to "general" trade and commerce. For the
regulation in question in Wharton's Case, was not a regulation
relating to any particular kind of trade or business, but a regulation touching
the trading powers of all Dominion Companies engaged in any kind of business
and applying to all such companies alike and thus at least potentially
affecting Dominion trade and commerce in general through one of its most
important instrumentalities.
Coming to the consideration of the Combines and
Fair Prices Act; and particularly section 18 of that Act under which the order
in dispute has been made. The jurisdiction of the Board under this section
falls broadly into two sub-divisions, first the jurisdiction to make orders
prohibiting the accumulation of articles to which the statute applies or the
withholding from sale at reasonable prices of any such articles in excess of
the amount reasonably required for domestic purposes, or for the ordinary
purposes of business, and secondly the jurisdiction to regulate profits; that
is to say to declare what constitutes an unfair profit upon the holding or
disposition of such articles, to prohibit the making or taking of such profits
and to prohibit any practice which in the opinion of the Board has a tendency
to enhance the cost of such articles, or the profits rising from the holding or
the disposition of them, or the price of them.
[Page 501]
As regards the first head of jurisdiction, the
authority of the Board extends to traders and non-traders alike, to persons
accumulating by means of purchase or by means of production, to articles
accumulated whether by means of production or otherwise, for domestic use or
for use for the ordinary purposes of business. For example it applies to
accumulations by the house-holder of articles of food produced by the
house-holder himself, the small farmer's pork and butter, as well as to his
cordwood. It applies to the stock of coal accumulated by a railway or shipping
company, or of coal or coke by a gas company or a smelting company, as well as
to the coal accumulated by a coal mining company or the gas produced by a gas
company; to the dairyman's as well as to the rancher's herd.
In so far as the Act authorizes the Board of
Commerce to compel persons who are not engaged in trade to dispose of their
property subject to conditions fixed by the Board and persons who are traders
to dispose of property in respect of which they are not engaged in trade, (the
coal of the railway company or of the gas company, the dairyman's herd for
example), I have not a little difficulty in classifying it as an enactment
relating to the matters comprised within section 91-(2), upon any fair
construction of the words "regulation of Trade and Commerce." It is
legislation effecting trade and commerce no doubt, but I am unable to
distinguish such an enactment from an enactment authorizing a Board established
by Parliament to take over such property on terms to be fixed by the Board and
to dispose of it itself. Such compulsory enactments seem to be enactments on
the subject
[Page 602]
of the rights of property, 92-(13) and
"local undertakings," 92-(10) rather than enactments in regulation of
trade and commerce.
Turning now to the authority vested in the Board
by section 18, in relation to profits and prices. The provisions of section 18
on this subject appear to be obnoxious to the principles laid down in the
passages referred to in Parson's Case,
the Montreal Street Railway Case,
and the Wharton Case.
The authority given to the Board is an authority to prohibit the making or
taking of unfair profits upon the holding or disposition of any articles to
which the statute applies, and the section provides,
that an unfair profit shall be deemed to have
been made, when the Board shall declare an unfair profit to be made.
It is thus left to the Board to make orders
affecting individual holders or traders, to fix the terms upon which they are
required to dispose of articles withheld from disposition or held for
disposition, and such terms the Board is not required to fix by any general
regulation, but may, and in the normal course would, fix them with reference to
the circumstances of a particular case. The fixing of the terms of disposition
by reference to the prohibition against unfair profits might well result in
great disparity between the prices charged for the same article by different
traders. The creation of an authority endowed with such powers of fixing the
terms of contracts in relation to specific articles appears to involve an
interpretation of the words, "regulation of trade and commerce," much
more comprehensive than anything contemplated by the decisions and judgments
referred to
[Page 503]
above. I have indicated the principle which in
my opinion is deducible from Parson's Case, namely that section 91-(2)
does not authorize an enactment by the Dominion Parliament regulating in each
of the provinces the terms of the contracts of a particular business or trade,
for the reason (put very broadly) that such legislation involves an
interposition in the transactions of individuals in the provinces, within the
sphere of
property and civil rights and local
undertakings
not contemplated by section 91-(2). Legislation,
for example, imposing upon the trade in ready-made clothing throughout Canada,
the prohibitions put into force by the order out of which this reference arises
would, if my view of the effect of Parson's Case be the
right view, pass beyond the scope of the authority given in 91-(2); an
enactment, that is to say, by the Dominion Parliament in the precise words of
the order now in question could not be supported under that head. I cannot
discover any principle consistent with these conclusions, upon which an
enactment delegating to a commission the authority to regulate the terms of
particular contracts of individual traders in a specified commodity according
to the views of the Board as to what may be fair between the individual trader
and the public in each transaction, can be sustained as an exercise of that
power; and if such legislation could not be supported when the subject dealt
with is a single commodity, or the trade in a single commodity, or a single
group of commodities, how can jurisdiction be acquired so to
[Page 504]
legislate by extending the scope of the
legislation and bringing a large number of specified trades or commodities
within its sweep? Every consideration which can be invoked in support of the
view that the authority to regulate by general regulations of uniform
application the contracts of a trade in one commodity, does not fall within
section 91-(2), can properly be brought to bear with I think increased force in
impeaching legislation of the character now in question.
The point may be illustrated by reference to the
provincial jurisdiction concerning Local Works and Undertakings. The power
given to the Board by section 18, is a power to interfere with the management
of local undertakings in respect of all the matters mentioned, accumulation,
withholding from sale, making and taking profits, from holding or selling,
prices, cost, and practices affecting prices and cost. The authority extends to
such undertakings for example, as coal mines and gas works. Electricity does
not fall within the definition of section 16, but could I think be brought
within the jurisdiction of the Board by a regulation passed under that section.
Section 19 shows that such undertakings are within the contemplation of section
18, and in Union Colliery Co. v. Brydon, at page 585, it was laid
down that coal mines are local undertakings within 92-(10).
It is necessary to observe that we are not
dealing with a statute clearly within one of the enumerated heads of
section 91, and only incidentally affecting local undertakings, or other
matters committed to the province. The normal operation of section 18, being
such as I have pointed out, namely through the instrumentality of orders made
by the Board directly
[Page 505]
against individuals and particular undertakings,
and based upon conclusions derived from a consideration of the circumstances of
each particular case, it becomes plain that what is contemplated is a direct
interference by the Board, in respect of the matters committed to its
jurisdiction, in the management of such undertakings, the property held in
connection with them and the contracts made by their proprietors. Let us take
as instances, coal mines and gas works. The authority given to the Board to fix
the rate of profit, to prohibit accumulation beyond the amount which in the
opinion of the Board may reasonably be required for the purposes of the
business, to prohibit practices which in the opinion of the Board enhances
costs or profits, is essentially an authority to interfere with the management
of undertaking A, undertaking B, and undertaking C, notwithstanding that the
authority is given in general terms, and therefore the legislation creating
that authority is not legislation merely affecting such undertakings but
legislation in relation to such undertakings; Canadian Pacific Railway Co. v.
Bonescours,
at page 372; Montreal v. Montreal Street Ry. Co. at page 346.
It may be conceded that while section 18 could
in its very terms be validly enacted by a provincial legislature, the authority
reposed in a Commission created by such a legislature, would not of course
extend beyond the ambit of authority committed to the legislature itself and
consequently such a Commission would not acquire power to deal with matters
belonging to the subjects of foreign trade, inter-provincial trade, and the
regulating of the management of Dominion undertakings and beyond the legitimate
[Page 506]
scope of the legislative activities of the
province; but it does not follow because the Dominion could alone deal with
these last mentioned matters it is itself authorized to enter upon fields
exclusively reserved for the provinces, in order to carry out a legislative
design necessarily incomplete without legislation on matters so exclusively
reserved; co-operation between the Dominion and the provinces may be necessary
to attain the ends desired by the legislators and such co-operation is of
course not unknown and has indeed in some cases been expressly provided for in
Dominion legislation, see for example 9 & 10 Geo. V., chapter 68, section
373, sub-section 6.
Having regard then to the scope of section 18,
the authority conferred upon the Board to interfere with the proprietary rights
of producers, holders and consumers of any of the articles to which the Act
applies, and the authority to interfere with the management of local works and
undertakings, and to prescribe the conditions of contracts relating to such
articles and to the manner in which the Act takes effect, I conclude that it is
not an enactment in relation to trade and commerce within section 91-(2).
The second question is whether section 18 can be
sustained as an exercise of the power of the Dominion under the introductory
clause of section 91 to
make laws for the peace, order and good
government of Canada.
Two conditions govern the legitimate exercise of
this power. First—it is essential that the matter dealt with shall be one of
unquestioned Canadian interest and importance as distinguished from matters
merely local in one of the provinces; and, secondly, that the legislation shall
not trench upon the authority of the province in respect of the matters
enumerated in
[Page 507]
section 92. Attorney General of Ontario v.
Attorney General for Canada,
Montreal v. Montreal Street Ry. Co., at pages 343 and 344; Wharton's
Case,
at page 337. I have already pointed out that section 18 does profess to deal
with matters which in each province are, from the provincial standpoint, rights
of property and civil rights there and matters which, in each province, are
comprehended within the subject matter "local undertakings."
It is true that in Russell v. The
Queen,
the Canada Temperance Act was held to be validly enacted under this general power
and that in Local Option Reference (1), and in the Manitoba License
Holders' Case,
the enactment of similar legislation was held to be competent to a local
legislature, the legislation being, of course, limited in its operation, to the
province; but it is I think impossible to draw from these authorities on the
"drink" legislation any general principle which can serve as a guide
in passing upon the validity of the statute before us.
Russell's Case was accepted by the Judicial Committee in 1896, as decisively
determining the validity of the Canada Temperance Act and to that extent it was
treated as a binding authority.
But it must be remembered that Russell's Case,
was in great part an unargued case. Mr. Benjamin who appeared for the
appellant—the provinces were not represented upon the argument—conceded the
authority of Parliament to enact legislation containing the provisions of the
Canada Temperance Act to come into force at the same time throughout the whole
[Page 508]
of Canada and this Lord Hérschell said in a
subsequent case, was a "very large admission." The Judicial Committee
proceeded upon the view that legislation containing the provisions of the
Canada Temperance Act was not, from a provincial point of view, legislation
relating to "property and civil rights" within the province; it was,
they said, legislation dealing rather with public wrongs, having a close
relation to criminal law and on this ground they held that the subject matter
of it did not fall within the exceptions to the introductory clause.
The subsequent judgments of the Judicial
Committee in the Local Option Reference of 1896 and in the Manitoba
License Holders' Case
show that consistently with the validity of the Canada Temperance Act similar
legislation by the provinces limited in its operation to the province, can be
supported as being from a provincial point of view legislation dealing with
matters merely local. In the last mentioned case Lord Macnaghten said it might
be doubtful whether if such legislation were from the provincial point of view
properly classified as legislation upon the subjects denoted by "property
and civil rights," general legislation by the Dominion such as the Canada
Temperance Act could be sustained.
There is no case of which I am aware in which a
Dominion statute not referable to one of the classes of legislation included in
the enumerated heads of sec. 91 and being of such a character that from a
provincial point of view, it should be considered legislation dealing with
"property and civil rights," has been held competent to the Dominion
under the introductory clause; and the effect of decisions in the Mont-
[Page 509]
real Street Railway case, or the McCarthy Act
Reference and in the Insurance Act Reference, Attorney General for Canada v.
Attorney General of Alberta,
is that legislation by the Dominion applying to the whole of Canada dealing
with matters which from a provincial point of view fall within No. 9 or No. 10
of sec. 92, is not a competent exercise of this general power.
"Property and civil rights," of
course, taken in the most comprehensive sense, is a phrase of very wide
application and like the words "Trade and Commerce," it must be
restricted by reference to the context and the other provisions of sections 91
and 92. But my view is that where a subject matter is from a provincial point
of view comprehended within the class of subjects falling under "property
and civil rights," properly construed (ex hypothesi such matter
could not fall strictly within any of the classes of subjects enumerated in
sec. 91) it is incompetent to the Dominion in exercise of the authority given
by the introductory clause to legislate upon that matter either alone or
together with subjects over which the Dominion has undoubted jurisdiction as
falling neither within sec. 92 nor within the enumerated heads of sec. 91; and
legislation which in effect has this operation cannot be legitimised by framing
it in comprehensive terms embracing matters over which the Dominion has
jurisdiction as well as matters in which the jurisdiction is committed
exclusively to the provinces.
Nor do I think it matters in the least that the
legislation is enacted with the view of providing a remedy uniformly applicable
to the whole of Canada in relation to a situation of general importance to the
Dominion. The ultimate social economic or political
[Page 510]
aims of the legislator cannot I think determine
the category into which the matters dealt with fall in order to determine the
question whether the jurisdiction to enact it is given by sec. 91 or sec. 92.
The immediate operation and effect of the legislation, or the effect the
legislation is calculated immediately to produce must alone, I think, be
considered. I repeat that if, tested by reference to such operation and effect,
the legislation does deal with matters which from a provincial point of view
are within any of the first fifteen heads of section 92, it is incompetent to
the Dominion unless it can be supported as ancillary to legislation under one
of the enumerated heads of section 91.
This view may be supported by contrasting the
decision of the Judicial Committee in Russell's Case, with its decision on the
McCarthy Act reference. The Canada Temperance Act was an attempt on the part of
the Parliament of Canada to cope with the evils arising from the sale of
intoxicating liquor, and that Act as already mentioned was held to be within
the power of Parliament as dealing not with civil rights and property but with
public wrongs, and being legislation analogous in character to the statute
restricting the sale of explosives and poisons and having a close relation to
the criminal law. The McCarthy Act which was passed shortly after the decision
in Russell's Case, recited that it was expedient to
regulate the traffic in intoxicating liquors by a system uniform throughout
Canada for the purpose of preserving public order, and then proceeded to
regulate the liquor trade by a system of licensing. This decision, as already
mentioned, was a logical consequence
[Page 511]
of the preceding decision of the Board in Hodge's
Case,
to the effect that from a provincial point of view such a system of licensing
fell within number 9 of section 92. The combined effect of these decisions
seems clearly to be that while for the purpose of dealing with a matter of
interest to the whole Dominion in the sense of being a matter affecting and
pertaining to the public order and good government of the whole Dominion (the
evils of the liquor trade), Parliament may legislate so long as its enactments
are of such a character that they do not deal with matters from a provincial
point of view within the specific classes of subjects enumerated in section 92,
(that is, the first fifteen heads) it is not within its power under the
residuary clause to enact legislation which from the provincial point of view
falls within any one of such classes. It is quite true that the McCarthy Act
Reference principally involved a consideration of only one of the enumerated
heads, No. 9, but it is difficult to find any satisfactory relevant distinction
between No. 9 and No. 10 (as regards matters falling under this head, the Montreal
Street Railway Case,
seems to be conclusive), or between No. 9 and No. 13, although as regards the
last mentioned head, caution must be used in observing the limits necessarily
imposed by the context in the two sections upon the scope of their application.
The argument based upon the residuary clause
rests upon the principles supposed to be deducible from the decisions upon the
liquor legislation. The result of the decisions of the Judicial Committee in Russell's
Case,
on the Local Option Reference in
[Page 512]
1896, and the Manitoba License Holders Case, in
1902 (1), is that while the restriction or prohibition of the liquor traffic in
the manner effected by the Canada Temperance Act within a single province, may
from a provincial point of view fall within No. 16, it may also fall within the
ambit of the residuary clause as subject matter of legislation; but there is in
my judgment no justification for applying the reasoning of their Lordships in
their judgments in the Local Option Reference, in support of the proposition
that matters falling within any of the other heads of section 92 as subject
matter of legislation can be dealt with by the Dominion under a general law
passed under the authority of the residuary clause, and the doubt expressed by
Lord Macnaghten in the Manitoba License Holders Case affords very weighty
argument against such an interpretation of Lord Watson's judgment on the Local
Option Reference.
The consequences of this proposed view of the
residuary clause, can be illustrated by the present legislation. The scarcity
of necessaries of life, the high cost of them, the evils of excessive profit
taking, are matters affecting nearly every individual in the community and
affecting the inhabitants of every locality and every province collectively as
well as the Dominion as a whole. The legislative remedy attempted by section 18
is one of many remedies which might be suggested. One could conceive, for
example, a proposal that there should be a general restriction of credits, and
that the business of money lending should be regulated by a commission
appointed by the Dominion Government with powers conferred by Parliament.
Measures to increase production might
[Page 513]
conceivably be proposed and to that end
nationalization of certain industries and even compulsory allotment of labour.
In truth if this legislation can be sustained under the residuary clause, it is
not easy to put a limit to the extent to which Parliament through the
instrumentality of commissions (having a large discretion in assigning the
limits of their own jurisdiction, see sec. 16), may from time to time in the
vicissitudes of national trade, times of high prices, times of stagnation and
low prices and so on, supersede the authority of the provincial legislatures. I
am not convinced that it is a proper application of the reasoning to be found
in the judgments on the subject of the drink legislation, to draw from it
conclusions which would justify Parliament in any conceivable circumstance
forcing upon a province a system of nationalization of industry.
Mr. O'Connor's chief contention was that the
enactments of section 17 are enactments upon the subject of criminal law,
within the meaning of that phrase as used in section 91 and that the provisions
of section 18 can be supported as provisions ancillary to these enactments. I
think it is open to doubt whether the enactments in section 17 can be supported
as enactments upon the subject of "the criminal law." Section 22 it
is true makes infractions of section 17 punishable as therein provided, but the
penal sanctions provided by section 22, apply clearly to any contravention of
any provisions of Part 2 of the Combines and Fair Prices Act, and it is not
easy to believe that every such infraction (for example, subsection 3, sec. 19)
was intended by the legislature to be classed as a crime in the strict sense.
Moreover having regard to the jurisdiction conferred upon the Board (by sec.
16) to enlarge the application of the statute, it seems
[Page 514]
very doubtful indeed if such could have been the
object of the legislature. But assuming this view of section 17 to be the right
view, I cannot agree that the enactments of section 18 are in any proper sense
ancillary to the enactments of section 17. Sections 17 and 22 are quite
complete in themselves, and while I think the legislature might very well have
provided as ancillary to these enactments special administrative machinery for
the investigation of questions of fact pertaining to the matters dealt with in
these two sections, and have reformed the criminal procedure for the purpose of
meeting the difficulties of enforcing section 17, the authority conferred upon
the Board by section 18 is not in my opinion in any way necessary in order to
give complete effect to sections 17 and 22.
Brodeur J.—The Board of Commerce had, on the 9th of January, 1920, under
section 32 of the Board of Commerce Act (9 & 10 George V, ch. 37) stated a
case for the opinion of this court upon several questions which, in the opinion
of the Board, were questions of law.
The specific facts which had arisen and the
decision arrived at on these facts had not been mentioned in the stated case
and it could hardly be considered that the questions were properly submitted. In
re Cardigan County Council.
It was found advisable, at the suggestion of the Court, that a new case should
be submitted. The Board then stated a new case with regard to the retail
clothiers of the City of Ottawa, in which it is alleged that the Board had made
of its own motion an inquiry under the provisions of
[Page 515]
section 18 of The Combines and Fair Prices Act,
1919 (ch. 45, 9 & 10 Geo. V.) and that it was found that those merchants
had made unfair profits on the sales of men's clothing and that after a certain
date an order would issue restraining them from selling these goods, except at
a certain margin of profit. We are asked to determine whether or not the Board
has the authority to make such an order and to require the Registrar or other
proper authority of the Supreme Court of Ontario to cause the order to be made
a rule of said court.
This new stated case supersedes the question
formerly submitted. It is made with the evident intention of testing the
validity of section 18 of the Combines and Fair Prices Act. There was at first
some uncertainty as to whether the proposed order was issued under sections 17
and 18; but at the argument it was stated as a common ground that the only
section of the Act applicable to the facts of the case is section 18. This
section 18 declares that the Board is empowered to inquire into and to prohibit
any breach of any provision of the Act, the making of unfair profits upon
necessaries of life and all practices calculated to unfairly enhance their
cost.
The Attorney General of Alberta, who had
appeared by counsel on the first stated case which covered the validity of the
whole Act, has also appeared on this amended issue to contest the validity of
the order. He does not desire to question the wisdom of any proper legislative
attempts to regulate prices in the interest of the consumers, but he claims
that such a legislation is within the exclusive jurisdiction of the Provincial
Legislature.
[Page 516]
The retail clothiers specifically named in the
proposed order are being defended by the association of which they are
members, the Retail Merchants Association of Canada, and this association, as
well as some other associations and organizations which are interested in the
proceedings instituted before the Board of Commerce, have also appeared and
have asked us to declare ultra vires the legislation on which the order
is based.
The Attorney General of Canada upholds the
constitutionality of the said order, his main ground being that section 18 is
legislation ancillary to criminal legislation viz., to section 17 of the
Combines and Fair Prices Act. The first question then is as to whether or not
section 17 is criminal legislation.
Section 17 prohibits undue accumulation of
necessaries of life and forces the accumulators to dispose of these necessaries
at fair prices.
In other words, it is an enactment relating to
the quantity of goods which a person may possess and determines the conditions
at which they should be sold. Primâ facie it is legislation affecting
property and civil rights and would fall within provincial and not federal
jurisdiction. Sec. 92, s.s. 13.
It is true that penalties are imposed on those
who contravene or fail to observe any provisions of the Act and even these contraventions
are indictable offences; (sect. 22). But the imposition of penalties would not
by itself give the Federal Parliament power to legislate. As it was declared by
the Privy Council in The Insurance Reference, such penalty is an
ancillary enactment. We must ascertain the class
[Page 517]
to which the operative enactment really belongs,
the primary matter dealt with, the true nature and character of the
legislation, its leading features, its pith and substance. Union Colliery
Co. v. Bryden.
What is the object of the legislation at issue
in this case? It is to investigate and restrain the withholding and enhancement
of the price of commodities. A Board is created for that purpose with very
extensive powers. If the intention of Parliament was to enact criminal
legislation, it would likely have been embodied in an amendment to the Criminal
Code, as they have done by the following chapter, chapter 46 of the statutes
passed in the same year.
Similar provisions had to be construed in the Insurance
Reference (ss. 4 and 70 of the Insurance Act). Penalties and imprisonment
were enacted for the contravention; but it was mildly contended it could be
considered as criminal legislation before this court (2); it was not mentioned
before the Privy Council.
Legislation similar to the one we have to
construe in this case was passed last year in England and was called "The
Profiteering Act". Under that Act the Board of Trade has power to
investigate prices, profits, etc., and for that purpose to require any person to
appear before them, and on any such investigation they may by order fix maximum
prices and declare the price which would give a reasonable profit.
[Page 518]
By subsection 2 of section 1 of the Act it was
declared:
If as the result of any investigation undertaken
on their own initiative or on complaint made to them, it appears to the Board
of Trade that the circumstances so require, the Board shall take proceedings
against the seller before a court of summary jurisdiction, and if in such
proceedings it is found that the price charged or sought about which the
complaint was made, or the price discovered at the investigation to have been
charged or sought, was such as to yield a profit which is, in view of all the
circumstances, unreasonable, the seller shall be liable on summary conviction
to a fine not exceeding £200 or to imprisonment for a term not exceeding three
months or to both such imprisonment and fine.
By section 2 of the same Act, the Board of Trade
has power to establish local committees to whom the Board may delegate any of
their powers.
The Lancashire and Yorkshire Railway were
charged before the Manchester Profiteering Committee for charging at their
restaurant exorbitant prices. The railway company applied for a writ of
prohibition and the court, on the 15th March, decided that
a prosecution under s. 1, sub-s. 2, of the
Act is a separate and independent proceeding from the investigation with a view
to declaring a price and ordering repayment of any amount in excess of that
price under s. 1, sub-s. 1, and that the investigation was not a criminal cause
or matter.
Even if section 17 were criminal legislation, it
could not be claimed that the order is valid because it is ancillary to
criminal legislation.
The power to pass criminal laws belongs to the
Federal Parliament (B.N.A. Act, s. 91, s.s. 27). In its ordinary sense, the
words criminal law would cover not only the definition and punishment of
crime, but also the procedure and the courts for the trial of persons accused
of crime. But section 92, s.s. 4, gives to the provincial legislatures the
legislative control over the constitution of the courts of criminal
jurisdiction, and, besides, subsection 27 of section 91,
[Page 519]
in giving legislative power to the Federal
Parliament on the criminal law, excepts formally the constitution of the courts
of criminal jurisdiction.
It is such a formal enactment that I cannot
accept the proposition that the creation of a court like the Board of Commerce
could be validly constituted as a court of criminal jurisdiction. Section 101,
which is invoked also in that respect, could not alter the formal provisions of
section 91 which should stand "notwithstanding anything in this
Act," as it is declared therein.
I admit that intra vires federal
legislation will override inconsistent provincial legislation and that the
widest discretion must be allowed to the federal Parliament in the moulding of
its legislation, but at the same time no usurpation should be made under the
guise of so-called ancillary legislation. Montreal v. Montreal Street
Railway Co..
It could not be considered as essential to the
exercise of the Dominion legislative authority that section 18 of the Fair
Prices Act should have been passed, and I understand this as the test which
should be adopted to determine the validity of any ancillary legislation.
The Board in exercising its powers under section
18 exercises independent civil powers and the order we have to examine is made
for the purpose of forcing the merchants to sell their goods at a certain price.
It is contended also that this can be dealt with
by the Federal Parliament as a regulation of Trade and Commerce.
The words "regulation of trade and
commerce" may cover a very large field of possible legislation and there
has been much discussion as to their limits.
[Page 520]
They were first considered in the Parsons
Case,
in 1881, and there it was stated that these words in their unlimited sense
would include every regulation of trade ranging from commercial treaties with
foreign governments down to minute rules for regulating particular trades, but
a consideration of the context and of other parts shows that these words should
not be used in this unlimited sense. The collocation of the regulation of trade
and commerce with classes of subjects of national and general concern affords
an indication that regulations relating to general trade and commerce were in
the minds of the fathers of Confederation when they gave the Federal Parliament
the power to deal with it.
Views to the same effect have been expressed by
the Privy Council in Bank of Toronto v. Lambe, and in Montreal v. Montreal
Street Railway Co..
The last case where this power of regulating
trade and commerce has been considered by the Privy Council is the Insurance
Reference,
and it was held there that
the regulation of trade and commerce does
not extend to the regulation of a particular trade.
In the Combines and Fair Prices Act, there is an
attempt to regulate the trade of those who are engaged in dealing with
necessaries of life, as there was an attempt in the Insurance Legislation to
regulate the trade of those engaged in the insurance business.
Then the contention is made that this
legislation is valid in the exercise by the Federal Parliament of its power to
make laws for the peace, order and good government of Canada.
[Page 521]
According to the principle of construction
adopted in the Parsons Case,
the first question to be determined with regard to the distribution of
legislative powers is whether section 18 of the Combines and Fair Prices Act
falls within any of the classes of subjects enumerated in section 92 and
assigned exclusively to the legislatures of the provinces. If it does, then the
further question would arise whether the subject of the Act does not also fall
within one of the enumerated classes of section 91 and so does not still belong
to the Dominion Parliament.
Primâ facie section
18 of the Combines and Fair Prices Act is legislation affecting property and
civil rights and would fall within provincial control and not federal control
(s. 92, s.s. 13) and, as I have shown above also, the subject of the Act does
not fall within the regulation of trade and commerce or criminal law.
There may be matters not included in the
enumeration of section 91 upon which the Parliament of Canada has power to
legislate, because they concern the peace, order and good government of the
Dominion, but if they are enumerated in sec. 92, then the Dominion Parliament
has no authority to encroach upon these subjects. It is not claimed that the order
in question is of Canadian interest or importance, because this order has
reference to merchants of a certain city and the provincial authorities could
certainly pass the necessary legislation to carry out such an order. Attorney
General of Ontario v. Attorney General of Canada.
[Page 522]
I do not then hesitate to say that section 18 of
the Combines and Fair Prices Act could not be considered as valid under the
exercise by the Federal Parliament of its power to legislate concerning peace,
order and good government. The legislation in question is then ultra vires and
should be declared unconstitutional.
For these reasons the answer to the first
question submitted should be in the negative. As to the second question, it is
not then necessary for me to deal with it.
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