Supreme Court of Canada
Reference re Validity of the Combines Investigation Act and of s. 498 of the Criminal Code, [1929] S.C.R. 409
Date: 1929-04-30
In The Matter of a Reference as to The Validity of The Combines Investigation Act, R.S.C., 1927, Chapter 26, and of Section 498 of The Criminal Code.
1929: March 11, 12, 13; 1929: April 30.
Present: Duff, Mignault, Newcombe, Rinfret, Lamont and Smith JJ.
Constitutional law—Validity of the Combines Investigation Act, R.S.C., 1927, c. 26, and of s. 498, Cr. Code—Dominion jurisdiction as to criminal law, trade and commerce, etc.—Provincial jurisdiction as to property and civil rights, matters of merely local or private nature in the province, imposition of punishment, etc.—B.N.A. Act, ss. 91, 92.
The Combines Investigation Act, R.S.C., 1927, c. 26 (providing for investigation of alleged combines, creating and punishing the offence of assisting in the formation or operation of a combine, providing for reduction or abolition of customs duties which facilitate disadvantage to the public from an existing combine, and providing for revocation of patents in certain cases, etc.) and s. 498 of the Criminal Code (creating and punishing offences for combining, etc., to limit facilities for transportation, production, etc., restrain commerce, lessen manufacture or competition, etc.) are intra vires the Parliament of Canada.
The B.N.A., Act, s. 91 (especially heads 27, 2) and s. 92 (especially heads 13, 15, 16) discussed as to their bearing and effect on the question.
Atty. Gen. for Ontario v. Hamilton Street Ry. Co., [1903] A.C. 524; Liquor Prohibition case, [1896] A.C. 348; Rex v. Nat Bell Liquors Ltd., [1922] 2 A.C. 128; Nadan v. The King, [1926] A.C. 482; and other cases, referred to and considered. Atty. Gen. for Canada v. Atty. Gen. for Alberta, [1916] 1 A.C. 588; Board of Commerce case, [1922] 1 A.C., 191; Atty. Gen. for Ontario v. Reciprocal Insurers, [1924] A.C. 328; Toronto Electric Commissioners v. Snider, [1925] A.C. 396, discussed and explained, and legislation therein dealt with distinguished.
REFERENCE by the Governor General in Council to the Supreme Court of Canada for hearing and consideration, pursuant to the authority of s. 55 of the Supreme Cour t Act, R.S.C., 1927, c. 35, of the following questions:
1. Is the Combines Investigation Act, R.S.C., 1927, chapter 26, ultra vires the Parliament of Canada, either in whole or in part, and, if so, in what particular or particulars or to what extent?
2. Is section 498 of the Criminal Code ultra vires the Parliament of Canada, and, if so, in what particular or particulars or to what extent?
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N. W. Rowell K.C., A. R. McMaster, K.C., and F. P. Varcoe for the Attorney General of Canada.
E. Lafleur K.C. and J. C. McRuer for the Proprietary Articles Trade Association.
Aimé Geoffrion K.C. for the Attorney General of Quebec.
E. Bayly K.C for the Attorney General of Ontario.
W.F. O’Connor K.C. for Amalgamated Builders Council and Amalgamated Clothing Industries Council.
On behalf of the Attorney General of Canada, it was contended that the legislation in question was intra vires, being justifiable as having been enacted in relation to criminal law, the regulation of trade and commerce, patents of invention (as to s. 30 of the Combines Investigation Act), and the peace, order and good government of Canada, under jurisdiction given to the Dominion by s. 91 of the B.N.A. Act.
On behalf of the other parties appearing, it was contended that the legislation in question was wholly ultra vires; that the subject matter of the legislation was assigned to the exclusive jurisdiction of the province under heads 13 (property and civil rights in the province), 14 (administration of justice in the province), and 16 (generally all matters of a merely local or private nature in the province) of s. 92 of the B.N.A. Act, and was not assigned to the Parliament of Canada under any of the enumerations in s. 91 of the B.N.A. Act, or under the initial residuary provision of s. 91.
The judgment of Duff, Rinfret and Smith JJ. was delivered by
Duff J.—The scope of the 27th head of section 91 of the British North America Act under these words, “The Criminal Law, except the constitution of Courts of criminal jurisdiction, but including the procedure in criminal matters,” has been described in sweeping terms by the judgment of the Privy Council in Attorney General for Ontario v. Hamilton Street Railway Co.. The Lord Chancellor (Lord Halsbury), in delivering the judgment there, said:
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The question turns upon a very simple consideration. The reservation of the criminal law for the Dominion of Canada is given in clear and intelligible words which must be construed according to their natural and ordinary signification. Those words seem to their Lordships to require, and indeed to admit, of no plainer exposition than the language itself affords. Sect. 91, subs. 27, of the British North America Act, 1867, reserves for the exclusive legislative authority of the Parliament of Canada “the criminal law, except the constitution of Courts of criminal jurisdiction.” It is, therefore, the criminal law in its widest sense that is reserved, and it is impossible, notwithstanding the very protracted argument to which their Lordships have listened, to doubt that an infraction of the Act, which in its original form, without the amendment afterwards introduced, was in operation at the time of confederation, is an offence against the criminal law. The fact that from the criminal law generally there is one exception, namely, “the constitution of Courts of criminal jurisdiction,” renders it more clear, if anything were necessary to render it more clear, that with that exception (which obviously does not include what has been contended for in this case) the criminal law, in its widest sense, is reserved for the exclusive authority of the Dominion Parliament.
The question for consideration in that case was the competency of the Ontario Legislature to pass an enactment respecting the observance of Sunday, and the subject of the paragraph just quoted is the exclusive jurisdiction of the Parliament of Canada.
Nevertheless, some limitation upon the general words of s. 91 (27) is necessarily implied by (1) the fact itself that co-ordinate exclusive authority in respect of a variety of subjects is vested in the provincial legislatures, and executive authority of the same order in the provincial governments, and (2) character of the enactments of s. 92. This has been recognized in a series of cases, the Dominion License Acts Reference, the Board of Commerce case; Attorney General for Ontario v. Reciptoral Insurers; Attorney General for Canada v. Attorney General for Alberta; Toronto Electric Commissioners v. Snider.
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The words of head 27 read in their widest sense would enable Parliament to take notice of conduct in any field of human activity, by prohibiting acts of a given description and declaring such acts to be criminal and punishable as such. But it is obvious that the constitutional autonomy of the provinces would disappear, if it were open to the Dominion to employ its powers under head 27 for the purpose of controlling by such means the conduct of persons charged with responsibility for the working of provincial institutions. It is quite clear also that the same result would follow, if it were competent to Parliament, by the use of those powers, to prescribe and indirectly to enforce rules of conduct, to which the provincial legislatures had not given their sanction, in spheres exclusively allotted to provincial control. This has been fully elaborated in the series of cases just mentioned.
Second, the language of head 27 must be read in light of head 15 of section 92. Provincial legislative enactments in relation to matters falling within the various heads of s. 92 may, by force of head 15, prescribe sanctions of fine and imprisonment for regulations in respect of such matters; and such regulations may be of such a character that, but for the language of head 27 of s. 91, the offences thus created would be described without hesitation as criminal offences —regulations, for example, for the preservation of public health/order and decency. Hodge v. The Queen. The exclusive jurisdiction of the Dominion in relation to “Criminal Law” under s. 91 is not incompatible with the possession by the provinces of this jurisdiction; although there is the highest authority for applying to proceedings for enforcing the penal clauses of such enactments the description “criminal”; and notwithstanding that it appears to have been assumed, in Nadan v. The King, that such proceedings come within the exclusive jurisdiction of the Dominion Parliament under head 27, s. 91, “procedure in criminal matters.”
It is, of course, essential to the exercise of this jurisdiction by the provinces that the substantive provisions shall, within the sense of s. 92, have “relation to” such “local” or “private” matters, as fall within the scope of the subjects designated by the heads of that section.
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The existence of this undoubted jurisdiction of the provinces necessarily affects the operation of the powers conferred upon the Dominion under head 27, s. 91. Evidently the Act does not contemplate the use of these powers for the purpose merely of creating sanctions for rules of law in relation to such matters in their provincial aspects. Matters, however, which in one aspect and for one purpose fall within the jurisdiction of a province over the subjects designated by one or more of the heads of s. 92, may in another aspect and for another purpose, be proper subjects of legislation under s. 91, and in particular under head 27.
This may be illustrated by reference to the subject matters of s. 92 (13), “Property and Civil Rights.” You cannot create a new criminal offence without directly affecting civil rights. The characteristic rules of the Criminal Law, rules designed for the protection of the State and its institutions, for the security of property and the person and public order, rules for the suppression of practices which the Criminal Law notices as deserving chastisement by the State, and so on, all are rules restricting the liberty of action of the subjects of the State, and in that sense affecting civil rights; but such acts and neglects are not, as a rule, viewed by the Criminal Law in their juristic aspect, but in their actual effects, physical or moral, as harmful to some interest which it is the duty of the State to protect. They are concerned primarily not with rights, with their creation, the conditions of their exercise, or their extinction; but with some evil or some menace, moral or physical, which the law aims to prevent or suppress through the control of human conduct.
Fraud, for example, may be of such a character as to constitute an actionable wrong or a criminal offence. The law in relation to civil rights, while necessarily concerned with defining the elements of the wrong entailing the civil responsibility of the wrong-doer, is primarily concerned with the victim’s right of reparation, while the Criminal Law deals with the fraud as such, as something deserving of punishment at the hands of the State. So in the case of contracts. An agreement involving bribery of a public official may be a criminal offence because the law marks such acts of corruption as criminal and punishes them. The law in relation to civil rights, the law of contracts, takes
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note of the elements of the transaction which give it character as bribery, but solely for the purpose of denying to the parties the legal right of enforcing it.
These considerations do not provide, of course, any precise formula for discriminating between Criminal Law and legislation in relation to property and civil rights. But the indicia suggested by them would probably be sufficient in most cases for deciding to which of these two categories a given enactment belongs. Indeed, as to the first fourteen heads of s. 92, there would probably be little difficulty in determining whether or not legislation dealing with matters falling in their provincial aspects within the subjects designated by those heads is truly legislation from the provincial point of view, or legislation dealing with such matters in some aspect within the jurisdiction of the Dominion under s. 91, head 27.
On the other hand, matters falling within head 16 come under the jurisdiction of a province because they are matters “merely local” or “merely private” within the province, in the sense of s. 92. Prohibitions may be enacted under the authority of that head under sanction of fine and imprisonment, with the object of abating or preventing a local evil in the interests of public order or decency, which, as we have seen, may be perfectly valid, and plausible arguments may be adduced in support of the view, that all such enactments are valid, provided they do not trench upon topics already dealt with by the Criminal Law of the Dominion, expressly or tacitly, and do not intervene in subject matters which by their “very nature belong to the domain of criminal jurisprudence.” The exclusive jurisdiction of the Dominion in relation to Criminal Law is not, as I have said, incompatible with the creation by provincial enactment of offences which it has been held properly fall within the description “criminal.” But if such matters present aspects which are appropriate subjects for criminal legislation, it does not follow that they may not be the subject of valid legislation under the powers conferred by s. 91 (27).
The matter of section 498 is not property and civil rights. It strikes at agreements, no doubt, but not at those agreements as juridical acts, as having effects in point of law, in creating rights between the parties. The legislation aims
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at suppressing certain practices calculated, in the view of Parliament, to limit competition and produce the evil of high prices. Agreements of defined classes are dealt with from that point of view and from that point of view only. Nor can the matter of s. 498 be described as matter “merely local or private” within the several provinces. The combinations struck at, rarely, in their origin or in their operation, take account of provincial boundaries. There is in this respect little, if any, resemblance between s. 498 and the enactments which were the subjects of decision in the Dominion Liquor License Acts Reference, in the Board of Commerce case, or in Snider’s case. In the enactments in debate in those cases, the penal provisions were merely incidental. There was an attempt, in each case, in the substantive provisions of the impeached enactment, to regulate matters which were unquestionably “merely local” or “merely private” in each of the provinces in a manner which could, it was held, not be justified, as an exercise of the powers conferred by the residuary clause or the second head of s. 91.
It was argued that the Dominion’s jurisdiction only enables Parliament to legislate in relation to offences which were criminal offences at the time of confederation, or to offences which in “their very nature” belong to the domain “of the Criminal Law.” It is difficult to understand upon what justification the Dominion Parliament can be denied the power under s. 91 to declare any act to be a crime which, in its opinion, is such a violation of generally accepted standards of conduct as to deserve chastisement as a crime. The views of the community as to what deserves punishment change from generation to generation. Practices calculated to imperil health and safety, or to prejudice the moral standards of the community may become, in the course of a few years, so widely prevalent as to create a general demand for the abatement and prevention of them by State action in the sphere of the Criminal Law. Other acts, once within the scope of the Criminal Law, may, in the course of time, come to be regarded as outside the proper domain of State interference. It is difficult to understand on what principle the court is to review the decisions
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of Parliament in seeking to adapt the Criminal Law to successive phases of public opinion in such matters. I am assuming, of course, that Parliament in such decisions is not attempting to deal with matters committed to the provinces in their provincial aspects. Moreover, practices tending to limit competition, to foster monopolies in the popular sense, to enhance prices (the practices of forestalling, regrating and engrossing), were for centuries treated as crimes and were regarded by the law as crimes mala in se; the matter of section 498 is a kindred topic.
I do not intend, by what I have said, to imply that Dominion legislation on the subject of the criminal law is necessarily ultra vires because it deals with a matter which is local in one or more of the provinces.
As to the Combines Investigation Act, that is an Act which, as its name imports, provides for the investigation of matters touching the existence of a combine or the pending formation of a combine; and further provides that where, as the result of investigation, it appears that such a combine exists, the Governor in Council may, in appropriate cases, cause the reduction or abolition of any customs duty imposed on any article affected by it; and where it appears that there has been abuse of his privileges by the holder of any patent under the Patent Act, in the manner set out by the Act, the Minister of Justice may exhibit an information in the Exchequer Court of Canada praying the revocation of the patent, and authority is given to the court to give judgment accordingly. The Act also provides that anybody knowingly assisting in the formation of a combine shall be guilty of an indictable offence, and punishable on conviction at the instance of the Solicitor-General of Canada or an Attorney General of the province. Throughout the Act the word “combines” denotes:
combines which have operated or are likely to operate to the detriment or against the interest of the public, whether consumers, producers or others, and which
(a) are mergers, trusts or monopolies, so called; or
(b) result from the purchase, lease, or other acquisition by any person of any control over or interest in the whole or part of the business of any other person; or
(c) result from any actual or tacit contract, agreement, arrangement, or combination which has or is designed to have the effect of
(i) limiting facilities for transporting, producing, manufacturing, supplying, storing or dealing, or
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(ii) preventing, limiting or lessening manufacture or production, or
(iii) fixing a common price or a resale price, or a common rental, or a common cost of storage or transportation, or
(iv) enhancing the price, rental or cost of article, rental, storage or transportation, or
(v) preventing or lessening competition in, or substantially controlling witihin any particular area or district or generally, production, manufacture, purchase, barter, sale, storage, transportation, insurance or supply, or
(vi) otherwise restraining or injuring trade or commerce.
That part of the Act which makes it a criminal offence to assist in the formation of a combine, has in principle been already discussed.
As to the other provisions, they may be looked upon from two points of view. First, one may consider them from the point of view of the responsibility imposed upon Parliament in respect of trade and commerce, especially the responsibility in relation to trade with foreign countries and customs and excise duties. It is hardly necessary to observe that trade combinations and their effect upon competition and the results of competition have a special importance and significance in view of the settled policy of this country in the matter of protective duties. To the general belief that such duties, when imposed upon the scale on which they are maintained in this country, tend in their effects to facilitate the operation of plans for reducing competition and maintaining prices, it may be surmised that legislation such as s. 498 in the Criminal Code and the Statute we are now considering, are very largely due. It appears to me that legislative authority over trade and commerce with foreign countries, and particularly over such aspects of those subjects as are related to the economic conditions and tendencies arising from the law in force on those subjects, must embrace the authority to legislate for such investigations as those authorized by this Act. It is quite true, combinations in relation to transport and to insurance would not appear, ex facie, to be directly connected with the imposition of customs duties. But the Dominion has a special jurisdiction in relation to insurance, jurisdiction touching, that is to say, the rights of foreign countries and foreigners generally to engage in the business of insurance in Canada; and considering that the design of the reigning trade policy is to encourage domestic trade, and
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that its effectiveness for that end may depend upon the character of the facilities for, and the rates of, domestic transport, the authority to conduct such investigations ought, in a fair view of the matter, to enable Parliament to include the subject of transport within the scope of them.
The other point of view is that of the responsibility of the Dominion with regard to the Criminal Law. The authority in relation to the Criminal Law and Criminal Procedure given by s. 91 (27) would appear to confer upon the Dominion, not as an incidental power merely, but as an essential part of it, the power to provide for investigation into crime, actual and potential.
An attempt was made on the argument to bring this statute under the decision of the Privy Council in relation to the Combines and Fair Prices Act. There is no doubt that parts of the present statute are taken from the earlier Act, but the provisions of the earlier Act which gave character to that Act have disappeared.
The former statute in its substantive enactments on the subject of combines conferred upon the Board of Commerce, a Board created by Dominion legislation, composed of persons named by the Dominion Government, the authority and the duty to inquire into the existence of combines and plans for the formation of combines, and to suppress, by order of the Board, the combines themselves, and practices associated with combines, in so far as the Board might think it right and in the public interest to do so. The present Act gives no such power of regulation.
Both questions should be answered in the negative.
The judgment of Mignault, Newcombe and Lamont JJ. was delivered by
Newcombe J.—Two questions have been propounded by the Governor General in Council for hearing and consideration under the usual practice. They are:—
“1. Is the Combines Investigation Act, R.S.C. 1927, Chapter 26, ultra vires the Parliament of Canada, either in whole or in part, and, if so, in what particular or particulars, or to what extent?
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“2. Is Section 498 of the Criminal Code ultra vires the Parliament of Canada, and, if so, in what particular or particulars, or to what extent?”
Counsel were heard on behalf of the Attorney General of Canada and also for several of the provinces, and counsel were also heard on behalf of the Amalgamated Builders’ Council and Amalgamated Clothing Industries’ Council, and for the Proprietary Articles Trade Association; these bodies having been authorized by the Court to be heard as classes of persons interested within the meaning of subs. 4 of s. 55 of the Supreme Court Act.
I would answer both these questions in the negative, because I am satisfied that the legislation strictly appertains to powers which the Parliament of Canada has, by s. 91 of the British North America Act, 1867,
* * * 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,—
* * * * *
2. The Regulation of Trade and Commerce.
* ** * *
27. The Criminal Law, except the Constitution of Courts of Criminal Jurisdiction, but including the Procedure in Criminal Matters.
* * * * *
And any matter coming within any of the classes of subjects enumerated in this section shall not be deemed to come within the class of matters of a local or private nature comprised in the enumeration of the classes of subjects by this Act assigned exclusively to the Legislatures of the Provinces.
In the consideration of these provisions it may be useful here to mention the provincial enumerations upon which the advocates of affirmative answers rely. They are to be found in s. 92, by which it is enacted that
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,—
* * * * *
13. Property and Civil Rights in the Province.
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.
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15. The Imposition of Punishment by Fine, Penalty, or Imprisonment for enforcing any Law of the Province made in relation to any matter coming within any of the classes of subjects enumerated in this section.
16. Generally all matters of a merely local or private nature in the Province.
It is not, in my opinion, open to question that the powers of Parliament with relation to the criminal law extend, not only to common law and statutory offences, as derived from the Laws of England, or locally enacted, under the constitution of the various provinces and territories of the Dominion, and existing therein at the time of the Union or admission of these provinces or territories into the Union, but comprehend also the power to create new statutory offences. It is, I think, certain that there is legislative authority in the Dominion, when the need arises, to declare criminal, and to prescribe the punishments for, acts or omissions which were lawful and innocent by the common law or by Imperial legislation which, subject to the provisions of the Colonial Laws Validity Act, 28-29 Vic, c. 63, is continued in force by s. 129 of the British North America Act, 1867, in the four original provinces, or as extended and applied to the provinces and territories subsequently admitted; and this conclusion must follow from the interpretation enunciated by their Lordships of the Judicial Committee in the case of Attorney-General for Ontario v. Hamilton Street Railway Co., where it was held that the Ontario Act to Prevent the Profanation of the Lord’s Day, R.S.O., 1897, c. 246, was, as a whole, ultra vires of the provincial legislature. That case was heard by a very powerful court, which included the Lord Chancellor (Halsbury), Lord Macnaghten, Lord Shand, Lord Davey, Lord Robertson and Lord Lind-ley. The Lord Chancellor, in pronouncing the judgment, expressed himself as follows:—
The question turns upon a very simple consideration. The reservation of the criminal law for the Dominion of Canada is given in clear and intelligible words which must be construed according to their natural and ordinary signification. Those words seem to their Lordships to require, and indeed to admit, of no plainer exposition than the language itself affords. Sect. 91, subs. 27, of the British North America Act, 1867, reserves for the exclusive legislative authority of the Parliament of Canada “the criminal law, except the constitution of Courts of criminal jurisdiction.” It is, therefore, the criminal law in its widest sense that is reserved, and it is impossible, notwithstanding the very protracted argument to which
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their Lordships have listened, to doubt that an infraction of the Act, which in its original form, without the amendment afterwards introduced, was in operation at the time of confederation, is an offence against the criminal law. The fact that from the criminal law generally there is one exception, namely, “the constitution of Courts of criminal jurisdiction,” renders it more clear, if anything were necessary to render it more clear, that with that exception (which obviously does not include what has been contended for in this case) the criminal law, in its widest sense, is reserved for the exclusive authority of the Dominion Parliament.
The extent of the Dominion power is thus so clearly and unmistakably stated that one seeks for a reason for the submission of the questions in hand, and it appears to have arisen out of some of the observations of their Lordships of the Judicial Committee in more recent decisions; but, in my view, the doubt so suggested vanishes when these decisions are properly understood.
The Dominion Insurance Act of 1910, which was considered in Attorney General of Canada v. Attorney General of Alberta, embodied a very elaborate set of provisions of considerable variety, designed to regulate the business or trade of insurance, based upon a legislative prohibition, which is to be found in s. 4, the leading section, of that Act, against the acceptance of any insurance risk or policy without a general license from the Minister who was charged with the administration of the Act. The principal question was as to whether s. 4 was ultra vires of the Parliament, and it was held in the affirmative, upon the ground that the subject matter was within exclusive provincial powers. Section 70 was an ancillary provision, imposing penalties for contravention of the Act, and, of course, it fell with the principal enactment, which it was designed to enforce. It was not, indeed, attempted to uphold this latter provision as an independent exercise of the Dominion power with relation to criminal law. This decision led to some amendments of the Dominion Insurance Act involving modifications of the former provisions.
Subsequently, in 1921, a question arose as to the validity of the Board of Commerce Act, 1919, and the Combines and Fair Prices Act, 1919, whereby, as narrated in the head-note, the Parliament of Canada had purported to prohibit the formation and operation of such trade combinations for production and distribution in the provinces as the Board of Commerce might consider to be detrimental
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to the public interest. It was, moreover, provided that the Board might restrict the accumulation of food, clothing and fuel beyond the amount reasonably required, in the case of a private person, for his household, and, in the case of a trader, for his business, and require the surplus to be offered for sale at fair prices; and that the Board could attach criminal consequences for breaches of the Act. The case is reported in [1922] 1 A.C., 191. It was argued that the legislation could be sustained, among other grounds, as criminal law, but it was held otherwise. Their Lordships referred to the Insurance Case of 1916 as an illustration of the impotency of the Dominion power for the regulation of trade and commerce, taken by itself, to authorize interference with particular trades in which Canadians would, apart from any right of interference otherwise conferred, be free to engage in the provinces. The result was said to be the outcome of a series of well-known decisions of earlier dates. Then follow these observations:—
For analogous reasons the words of head 27 of s. 91 do not assist the argument for the Dominion. It is one thing to construe the words “the criminal law, except the constitution of courts of criminal jurisdiction, but including the procedure in criminal matters,” as enabling the Dominion Parliament to exercise exclusive legislative power where the subject matter is one which by its very nature belongs to the domain of criminal jurisprudence. A general law, to take an example, making incest a crime, belongs to this class. It is quite another thing, first to attempt to interfere with a class of subject committed exclusively to the Provincial Legislature, and then to justify this (by enacting ancillary provisions, designated as new phases of Dominion criminal law which require a title to so interfere as basis of their application.
One must, of course, endeavour to extract the meaning of this paragraph, and perhaps some confusion is apt to be caused by the antithesis, and the illustration chosen for the explanation of the first limb, but I am persuaded that there can be no intention here to restrict the legislative power of Parliament in the creation of offences under s. 91 (27) so as to exclude an act or omission which is not malum in se. The occasion did not call for that, and the passage should be read secundum subjectam, materiam. It is not necessarily inconsistent, and I do not think it was meant to be incompatible, with the notion, that one must have regard to the subject matter, the aspect, the purpose and intention,
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instead of the form of the legislation, in ascertaining whether, in producing, the enactment, Parliament was engaged in the exercise of its exclusive and comprehensive powers with respect to the criminal law, or was attempting, in excess of its authority, under colour of the criminal law, to entrench upon property and civil rights, or private and local matters, in the provinces; and when, in the case of the Combines and Fair Prices Act, 1919, as in the case of the Insurance Act, 1910, their Lordships found that Parliament was really occupied in a project of regulating property and civil rights, and outside of its constitutional sphere, there was no footing upon which the exercise of Dominion powers, with relation to the criminal law, could effectively be introduced—no valid enactment to which criminal sanction could be applied. The principle is illustrated by a remark of Lord Dunedin in Grand Trunk Railway Company of Canada v. Attorney General of Canada, which may be applied mutatis mutandis; his Lordship said:
Accordingly, the true question in the present case does not seem to turn upon the question whether this law deals with a civil right—which may be conceded—but whether this law is truly ancillary to railway legislation.
In the Insurance case, Lord Haldane had already recognized the principle as well established, but none the less to be applied only with great caution,
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.
And I am convinced that he never intended to suggest that Parliament might not competently find a public wrong lurking or tolerated under the head of civil rights in a province which it is necessary or expedient, according to its will and discretion, or, using Sir Matthew Hale’s expression, “by the prudence of law-givers,” to suppress, in the exercise of its authority over the criminal law.
Then came the Reciprocal Insurers’ case, which contributes a very instructive addition to the interpretation of the British North America Acts. This case suggests no limitation of the legislative authority of the Dominion with regard to the criminal law, although it recognizes that a Dominion enactment, which, in language and form, and a
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sociis; is criminal, may, having regard to its history, real subject matter, true aspect and purpose, by which it must also be judged, be found, in reality, intended to regulate property and civil rights in a province, or matters of a merely local or private nature, such as have been committed to the exclusive authority of the provinces, and so not to fall within the Dominion enumeration; and it is especially made clear that the quality of such an enactment is not concluded by its introduction into the Criminal Code. This decision, in its application to the present question, affirms, with respect to the Dominion insurance legislation of 1917, what was decided in the year immediately preceding, namely, that a provision like s. 70 of the Act of 1910, and which differed from it in no material respect as to the essential purpose which it was intended to serve, remained ancillary and inoperative, notwithstanding the alterations of form to which it had been subjected and its incorporation as an independent section in the Criminal Code; and Mr. Justice Duff, who pronounced the judgment of the Board, having reviewed the preceding decisions, observed, at page 337, that:
It has been formally laid down in judgments of this Board, that in such an inquiry the Courts must ascertain the “true nature and character” of the enactment: Citizens’ Insurance Co. v. Parsons; its “pith and substance”: Union Colliery Co. v. Bryden; and it is the result of this investigation, not the form alone, which the statute may have assumed under the hand of the draughtsman, that will determine within which of the categories of subject matters mentioned in ss. 91 and 92 the legislation falls; and for this purpose the legislation must be “scrutinized in its entirety”: Great West Saddlery Co. v. The King. Of course, where there is an absolute jurisdiction vested in a Legislature, the laws promulgated by it must take effect according to the proper construction of the language in which they are expressed. But where the law-making authority is of a limited or qualified character, obviously it may be necessary to examine with some strictness the substance of the legislation for the purpose of determining what it is that the Legislature is really doing.
And further, at page 342:
In accordance with the principle inherent in these decisions their Lordships think it is no longer open to dispute that the Parliament of Canada cannot, by purporting to create penal sanctions under s. 91, head 27, appropriate to itself exclusively a field of jurisdiction in which, apart from such a procedure, it could exert no legal authority, and that if, when examined as a whole, legislation in form criminal is found, in aspects and for purposes exclusively within the provincial sphere, to deal with matters committed to the Provinces, it cannot be upheld as valid.
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His Lordship thought it proper to add, however, that what had been said
does not involve any denial of the authority of the Dominion Parliament to create offences merely because the legislation deals with matters which, in another aspect, may fall under one or more of the subdivisions of the jurisdiction entrusted to the Provinces.
A case involving the like consideration was Toronto Electric Commissioners v. Snider, where the question arose as to the authority of the Dominion to enact the Industrial Disputes Investigation Act, 1907, which provided, in effect, speaking by the head-note, that upon disputes occurring between employers and employees in any of a large number of important industries in Canada, the Dominion Minister for Labour might appoint a Board of Investigation and Conciliation to make investigations, with power to summon witnesses and inspect documents and premises, and, if no settlement could be brought about, to recommend fair terms; and, pending the reference, a lockout or strike was prohibited, subject to penalties. It was held that this legislation conflicted with provincial powers as to property and civil rights in the provinces or other enumerations of s. 92; and Lord Haldane, who pronounced the judgment, referred to the judgment in the Reciprocal Insurers’ case, as summing up the effect of the series of previous decisions relating to the point; and he reiterated the antithetical passage quoted above. His Lordship was of the opinion that, on authority as well as on principle, the Board was precluded from accepting the Act as justified in the exercise of Dominion power under s. 91 with relation to criminal law. He reviewed the provision of the Act in question, and concluded with the following important observations:
It is obvious that these provisions dealt with civil rights, and it was not within the power of the Dominion Parliament to make this otherwise by imposing merely ancillary penalties. The penalties for breach of the restrictions did not render the statute the less an interference with civil rights in its pith and substance. The Act is not one which aims at making striking generally a new crime.
It would seem manifestly to be implied from the last sentence, that different considerations would have presented themselves if the real purpose of the statute had been found to be the construction of a new offence.
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It must not be overlooked that, by the 15th enumeration of s. 92, there is included among the classes of subjects as to which the provincial legislatures may exclusively make laws:—
The imposition of punishment by fine, penalty, or imprisonment for enforcing any law of the province made in relation to any matter coming within any of the classes of subjects enumerated in this section.
And local enactments, deriving their force from the exercise of the powers conferred by this enumeration, have been described as provincial criminal law. In Russell v. The Queen, Sir Montague Smith, delivering the judgment, referred to an argument submitted by Mr. Benjamin, that, if the Act related to Oriminal law, it was provincial criminal law under the 15th enumeration of s. 92; and his Lordship said that no doubt
this argument would be well founded if the principal matter of the Act could be brought within any of these classes of subjects.
More recently, in the oase of Rex v. Nat Bell Liquors Limited, their Lordships had to consider the effect of a conviction under a local liquor Act of Alberta. By s. 36 of the Supreme Court Act, as enacted by c. 32 of 1920, the appellate jurisdiction of the Court had been limited by an exception excluding
criminal causes and in proceedings for or upon a writ of habeas corpus, certiorari or prohibition arising out of a criminal charge,
and the question was considered as to whether a prosecution under a typical temperance Act was or was not a criminal charge. Lord Sumner, who delivered the judgment, at pages 167 and 168, disposed of this issue as follows:—
The issue is really this. Ought the word “criminal” in the section in question to be limited to the sense in which “criminal” legislation is exclusively reserved to the Dominion Legislature by the British North America Act, s. 91, or does it include that power of enforcing other legislation by the imposition of penalties, including imprisonment, which it has been held that s. 92 authorizes Provincial Legislatures to exercise? It may also be asked (though this question is not precisely identical) under which category does this conviction fall of the two referred to by Bowen L.J., in Osborne v. Milman, when he contrasts the cases “where an act is prohibited, in the sense that it is rendered criminal,” and “where the statute merely affixes certain consequences, more or less unpleasant, to the doing of the act.”
Their Lordships are of opinion that the word “criminal” in the section and in the context in question is used in contradistinction to “civil,”
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and “connotes a proceeding which is not civil in its character.” Certiorari and prohibition are matters of procedure, and all the procedural incidents of this charge are the same whether or not it was one falling exclusively within the legislative competence of the Dominion Legislature, under s. 91, head 27.
It is not, for present purposes, necessary to ascertain precisely what is meant by the concluding sentence, but it may be observed that the criminal law, under s. 91 (27), includes expressly “the procedure in criminal matters,” and that, viewing s. 92 (15) as authorizing the constitution of crimes by the provincial legislatures, there is no express provision empowering those legislatures to enact procedure for the enforcement of the punishments so imposed.
Later, in Nadan v. The King, the Board had to consider the effect of s. 1025 (now s. 1024 (4)) of the Criminal Code, by which it was provided that:
Notwithstanding any royal prerogative, or anything contained in the Interpretation Act or in the Supreme Court Act, no appeal shall be brought in any criminal case from any judgment or order of any court in Canada to any court of appeal or authority by which in the United Kingdom appeals or petitions to His Majesty in Council may be heard.
There was a conviction in question for an offence against the provincial Government Liquor Control Act of Alberta, and it was argued that the foregoing section did not apply to a penalty imposed by a provincial statute in which it was not incorporated. Their Lordships were of the view, however, that this contention was negatived in principle by the judgment of the Board in Rex v. Nat Bell Liquors Ltd.. They held that:
Sect. 1025 is expressed to apply to an appeal in a criminal case from “any judgment or order of any Court in Canada,” and this expression is wide enough to cover a conviction in any Canadian Court for breach of a statute, whether passed by the Legislature of the Dominion or by the Legislature of the Province.
It must therefore, of course, if I realize the effect of these decisions, be considered that provincial enactments, falling within the 15th enumeration of s. 92, belong to that branch of the law which is criminal. But this does not necessarily diminish or affect the amplitude of Dominion powers under s. 91 (27). What the provinces may do under the authority of s. 92 (15) is to impose punishment, by fine, penalty or imprisonment, for enforcing any law of the province made in relation to a matter coming within any of the provincial
[Page 428]
enumerations, and is therefore confined to matters described generally as of a merely local or private nature in the province. But the concluding paragraph of s. 91 must be considered, and it was thus explained by Lord Watson, in the Liquor Prohibition case:
It was apparently contemplated by the framers of the Imperial Act of 1867 that the due exercise of the enumerated powers conferred upon the Parliament of Canada by s. 91 might, occasionally and incidentally, involve legislation upon matters which are prima facie committed exclusively to the provincial legislatures by s. 92. In order to provide against that contingency, the concluding part of s. 91 enacts that “any matter coming within any of the classes of subjects enumerated in this section shall not be deemed to come within the class of matters of a local or private nature comprised in the enumeration of the classes of subjects by this Act assigned exclusively to the legislatures of the provinces.” It was observed by this Board in Citizens’ Insurance Co. of Canada v. Parsons, that the paragraph just quoted “applies in its grammatical construction; only to No. 16 of s. 92.” The observation was not material to the question arising in that case, and it does not appear to their Lordships to be strictly accurate. It appears to them that the language of the exception in s. 91 was meant to include and correctly describes all the matters enumerated in the sixteen heads of s. 92, as being, from a provincial point of view, of a local or private nature. It also appears to their Lordships that the exception 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 or private in those cases where such legislation is necessarily incidental to the exercise of the powers conferred upon it by the enumerative heads of clause 91. That view was stated and illustrated by Sir Montague Smith in Citizens’ Insurance Co. of Canada v. Parsons and in Cushing v. Dupuy; and it has been recognized by this Board in Tennant v. Union Bank of Canada, and in Attorney General of Ontario v. Attorney General for the Dominion.
Consequently, if it be, as I apprehend, that the criminal law, in its widest sense, is reserved for the Parliament of Canada, a branch of that criminal law cannot well be exclusively within the authority of a province, and, while the provinces may undoubtedly, within their local and private range of legislative power, and in that aspect, impose punishments for enforcing their local laws which are in other respects intra vires—punishments that are, in the sense of the decisions, laws of a criminal nature—they can-
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not thereby occupy, so as to obstruct, a field of legislation, like that of the criminal law, which has been committed exclusively to the Dominion.
Each question answered in the negative.
Solicitor for the Attorney-General of Canada: W. Stuart Edwards.
Solicitors for the Proprietary Articles Trade Association: McRuer, Evan Gray, Mason & Cameron.
Solicitor for the Attorney-General of Quebec: Charles Lanctot.
Solicitor for the Attorney-General of Ontario: E. Bayly.
Solicitor for the Amalgamated Builders Council and Amalgamated Clothing Industries Council: W. F. O’Connor.
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