Supreme Court of Canada
Dominion Stores Ltd. v. R., [1980] 1 S.C.R. 844
Date: 1979-12-13
Dominion Stores Limited (Plaintiff) Appellant;
and
Her Majesty The Queen (Defendant) Respondent;
and
The Attorney General for Ontario Intervenor.
1979: March 15; 1979: December 13.
Present: Laskin C.J. and Martland, Ritchie, Pigeon, Dickson, Beetz, Estey, Pratte and Mclntyre JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.
Constitutional law—Distribution of legislative authority—Marketing standards prescribed at both provincial and federal levels—Apples marketed under federal grade name—Intraprovincial transaction—Validity/applicability of legislation—Whether federal legislation ultra vires—Canada Agricultural Standards Act, R.S.C 1970, c. A-8, ss. 3(1), 3(2)(a), 13(1)—The Farm Products Grades and Sales Act, R.S.O. 1970, c. 161—B.N A. Act, ss. 91(2), 92(13), (16), 95.
Appellant was charged under the Canada Agricultural Standards Act, R.S.C. 1970, c. A‑8, s. 3(2)(a), as being in possession for sale of some apples under a grade name, under s. 3(1), which did not meet the requirements prescribed in the Regulations under the Act in that they were bruised. The Act’s grading plan is voluntary in that it does not apply unless the product in question is offered for sale under a grade name prescribed pursuant to the statute. The relevant provincial Act made mandatory the use of the same grade names as prescribed by the federal Act. Appellant is a retailer and the offence was said to have occurred in Metropolitan Toronto, presumably in a retail outlet. No evidence was taken prior to the motion to quash and all parties took it that the apples were offered for sale in a wholly intraprovincial transaction. Appellant challenged the constitutional validity of Part I of the Act so far as purporting to regulate or apply to a transaction wholly within Ontario. The Provincial Judge concluded that the statute was ultra vires and quashed the information. On appeal by way of stated case the acquittal was set aside and Part I held to be intra vires. The Court of Appeal agreed. The further appeal to this Court was limited to
[Page 845]
the Constitutional question whether Part I of the Act is ultra vires in whole or in part.
Held (Laskin C.J. and Ritchie, Dickson and Mclntyre JJ., dissenting): The appeal should be allowed and the order quashing the charges restored.
Per Martland, Pigeon, Beetz, Estey and Pratte JJ.: Under the interpretation placed upon s. 91(2) of the B.N.A. Act in a number of decisions, the power of Parliament with reference to the regulation of trade and commerce is limited to trade in the international and interprovincial sense and Parliament is not empowered thereby to regulate local trade simply as part of a scheme to regulate international and interprovincial trade. Further, Parliament may not in the guise of regulating trade and commerce reach into the fields allocated to the provinces by s. 92(13) and (16) and regulate transactions that are entirely intraprovincial. Appellant here offered apples for sale pursuant to an admittedly valid provincial statute which imposed a mandatory grading scheme. The dealer did not select and adopt a grade name prescribed by a federal statute, but rather complied with applicable, valid provincial legislation. The offence here, if any, must be under the provincial legislation and not the artificially extended federal statute. It is not necessary to determine whether Part I is ultra vires in toto but is sufficient if it be found inapplicable to the allegations of the charge against the appellant under the federal statute.
The possibility canvassed by the respondent that Part I could find its validity in criminal law [s. 91(27)] can be disposed of by the words of Rand J. in Re The Validity of s. 5(a) of the Dairy Industry Act, [1949] S.C.R. 1, at p. 50.
Per Laskin C.J. and Ritchie, Dickson and Mclntyre JJ., dissenting: Allegedly, appellant had three lots of Spartan Apples under a grade name established under s. 3(1) of the federal Act, “Canada Extra Fancy” which did not meet the required standards as established by s. 3(1)(c) of the Act and regulations made thereunder. There was in this case no question of any reliance by the appellant on provincial grading standards or of any compliance therewith as a defence to the charge. Provincial legislation was not in issue. Section 3 of the federal Act does not compel the use of grade names pursuant to s. 1 but imposes a sanction if an intending seller elects to use a federally established grade name without observ-
[Page 846]
ing the prescriptions applicable to the particular grade; so too, with respect to the application of such a grade name to an agricultural product or to a package containing the product. It was implicit, if not explicit, in the position taken by appellant that it could use a federally established grade name without complying with the terms governing its use. It was logical for the Parliament of Canada, having enacted compulsory grading requirements for agricultural products moving in export and interprovincial trade, to complement those provisions to give dealers the opportunity to use the same grade prescriptions for local transactions.
[Citizens Insurance Co. v. Parsons (1881), 7 App. Cas. 96; R. v. Eastern Terminal Elevator Co., [1925] S.C.R. 434; Lawson v. Interior Tree, Fruit and Vegetable Committee, [1931] S.C.R. 357; A.G. (B.C.) v. A.G. (Can.), [1937] A.C. 377; Reference respecting The Farm Products Marketing Act, R.S.O. 1950, c. 131, as amended, [1957] S.C.R. 198; A.G. (N.S.) v. A.G. (Can.), [1951] S.C.R. 31; Reference as to the applicability of The Minimum Wage Act of Saskatchewan to an Employee of a Revenue Post Office, [1948] S.C.R. 248; Re The Validity of s. 5(a) of the Dairy Industry Act, [1949] S.C.R. 1 referred to.]
APPEAL from a judgment of the Court of Appeal for Ontario affirming a judgment by Grange J. on an appeal by stated case as to the validity of certain federal legislation. Appeal allowed, Laskin C.J. and Ritchie, Dickson and Mclntyre JJ. dissenting, order quashing the charges restored.
P.S.A. Lamek, Q.C., and C.H.H. McNairn, for the appellant.
T.B. Smith, Q.C., L.R. Olsson, Q.C., and Graham Reynolds, for the respondent.
D.W. Mundell, Q.C., and Carol Creighton, Q.C., for the intervenor.
The reasons of Laskin C.J. and Ritchie, Dickson and Mclntyre JJ. were delivered by
THE CHIEF JUSTICE (dissenting)—There is one issue in this appeal, which is here by leave, and it
[Page 847]
is stated in the following constitutional question fixed by an order of Pigeon J.:
Is Part I of the Canada Agricultural Products Standards Act, R.S.C. 1970, c. A-8 ultra vires in whole or in part?
The case arises out of a charge laid against the appellant, reading as follows:
on or about the 12th day of February 1976, at the Municipality of Metropolitan Toronto in the Judicial District of York [Dominion Stores Limited] unlawfully did have in possession for sale an agricultural product to wit: three lots of Spartan Apples, under a grade name established under subsection (1) of Section 3 of the Canada Agricultural Products Standards Act, R.S.C. 1970, Chapter A-8, to wit: Canada Extra Fancy, which Spartan Apples did not meet the requirements prescribed for the said Grade as established by Section 3(1)(c) and Section 3(2)(a)(i) of Table 1 of Schedule A of the Fresh Fruit and Vegetable Regulations as made and established by Order in Council P.C. 1965-1599, to wit: they contained soft bruises, contrary to Section 3(2)(a) of the said Act, thereby committing an offence under Section 13(1) of the said Act.
Before any evidence was taken, even before arraignment and plea, counsel for the appellant moved to quash the information, challenging the validity of Part I of the federal Act in its purported application to a transaction taking place wholly within the Province of Ontario. There was some intimation that the apples referred to in the charge were produce of British Columbia, but this is not reflected in the charge nor was it a consideration on the argument of the constitutional issue raised by the appellant or in the disposition made by the judge of first instance or in the case which he stated in pursuance of an appeal from his determination that Part I aforesaid was ultra vires. I therefore approach the constitutional issue on the basis that a wholly intraprovincial transaction is involved in the charge.
Part I of the federal Act consists of one substantive section, namely, s. 3, which itself consists of two subsections, as follows:
3. (1) The Governor in Council may make regulations establishing grades with appropriate grade names for any class of agricultural products and, without limit-
[Page 848]
ing the generality of the foregoing, may, by such regulations
(a) prescribe the terms and conditions on which and the manner in which agricultural products may be graded or inspected under this Part;
(b) without limiting the generality of paragraph (a), require, as a condition to the grading or inspection of an agricultural product under this Part, that it be prepared and graded in an establishment that, at the time of the preparation or grading of the product,
(i) complied with prescribed conditions, and
(ii) was registered in the prescribed manner,
and in respect of which the prescribed registration fee was paid;
(c) prescribe fees that may be charged for the grading or inspection of agricultural products; and
(d) prescribe the sizes, dimensions and other specifications of packages in which an agricultural product must be packed and the manner in which it must be packed and marked as a condition to application or use of the name of a grade so established.
(2) No person shall
(a) sell, offer for sale, or have in possession for sale an agricultural product under a grade name established under subsection (1) or under a grade name or other designation so closely resembling a grade name so established as to be likely to be mistaken therefor, or
(b) apply to an agricultural product or to a package containing an agricultural product a grade name established under subsection (1) or a grade name or other designation so closely resembling a grade name so established as to be likely to be mistaken therefor,
unless the agricultural product meets the requirements prescribed for the grade, has been graded and inspected as required by the regulations, and is packed and marked in prescribed manner.
The long title of the statute is in these words:
An Act to establish national standards for agricultural products and to regulate international and interprovincial trade in agricultural products.
It is followed by s. 1, stating the short title and then by s. 2, a definition section, which defines, inter alia, “agricultural product”, “grade”, “grade
[Page 849]
name” and “package”. These definitions are respectively as follows:
“agricultural product” means livestock (including fur-bearing animals raised in captivity), eggs, poultry, milk, vegetables, fruit, honey and maple syrup, and products thereof, and leaf tobacco;
…
“grade” includes standard;
“grade name” includes any mark, description or designation of a grade;
…
“package” means an inner or outer receptacle or covering used for containing, packing, wrapping or covering an agricultural product;
It is evident from a reading of s. 3 that it does not compel the use of grade names established pursuant to s. 1, but it does impose a sanction if an intending seller of an agricultural product elects to use a federally established grade name without observing the prescriptions applicable to the particular grade. So too, with respect to the application of such a grade name to an agricultural product or to a package containing the product. It is implicit if not explicit in the position taken by the appellant that it could use a federally established grade name without at the same time complying with the terms governing its use laid down under Part I of the federal Act.
In contrast to Part I, Part II of the Act, beginning with s. 4, compels the use of the federally prescribed grade names in the export and interprovincial movement of agricultural products for which grades have been established under Part I. The validity of this Part is not challenged and, indeed, is conceded. The difference in formulation from s. 3 in Part I is evident from the following terms of s. 4:
4. Except as provided by regulations of the Governor in Council, no person shall export out of Canada, or send or convey from one province to another, an agricultural product of a class for which grades have been established under Part I unless the product has been graded and inspected under that Part and is packed and
[Page 850]
marked in accordance with the regulations made under that Part.
The course of proceedings in the Courts below was as follows. Judge McMahon of the Ontario Provincial Court quashed the information on the ground that Part I, and particularly s. 3(2), invaded provincial legislative authority under s. 92(13) of the British North America Act in its application to a wholly intraprovincial transaction. He was asked to state a case and did so, and the matter came before Grange J. who, in extensive reasons for judgment, held that the judge of first instance had erred in his constitutional conclusion. Accordingly, he set aside the acquittal which had been directed by Judge McMahon and remitted the case to him for disposition on the merits. On further appeal, the judgment of Grange J. was affirmed by the Ontario Court of Appeal which said, in quite short reasons, that it agreed “essentially with his reasons for judgment”.
The Ontario Court of Appeal added to this conclusion by putting forward another ground for upholding Part I, saying this:
…In our view the pith and substance of this legislation is the regulation of export and inter-provincial trade. We think the provisions of Part I, section 3(2) are necessarily incidental to the effective operation of the scheme established by maintaining the integrity of the national standards grade and to prevent the misuse of the grade and confusion. For these reasons we are all of the opinion that this is valid legislation, within the exclusive legislative authority of Parliament under section 91.2 of the British North America Act.
Counsel for the appellant attacked this ground of decision and contended, as I understood his submission, that in view of the existence of The Farm Products Grades and Sales Act, R.S.O. 1970, c. 161 covering intraprovincial transactions, and which was therefore valid provincial legislation under governing case law, Part I could not be swept into provisions governing export and international trade as being “necessarily incidental” under the line of authority dealing with that concept. Given that this be so in the present case, I am
[Page 851]
of the opinion that the judgment in appeal should be affirmed on the ground taken by Grange J. and, accordingly, I turn to his reasons. Before doing so, I should add that no question arose in the present case of any reliance by the appellant on provincial grading standards or of any compliance therewith as a defence to the charge. Provincial legislation was in no way in issue here.
Grange J. based his conclusion on the judgment of the Privy Council in Attorney-General for Ontario v. Attorney-General for Canada which sustained the validity of ss. 18 and 19 of the Dominion Trade and Industry Commission Act, 1935 (Can.), c. 59. These provisions set up as a national mark the words “Canada Standard” or “C.S.” and invited its use by persons on the conditions specified under the legislation. No one was compelled to use it but, as in the present case, a person who did so was obliged to accept the terms on which it was made available. Counsel for the appellant suggested at one point in his submission that there was licensing involved in the “C.S.” case and, indeed, the Privy Council used the word “licence” in its dispositive sentence, as follows (at p. 418):
The substance of the legislation in question is to define a national mark, to give the exclusive use of it to the Dominion so as to provide a logical basis for a system of statutory licences to producers, manufacturers and merchants.
However, as clearly appears from a preceding portion of its reasons, the Privy Council was using the word in the sense of “permission” or availability of the mark for use, saying (at p. 417) that “By s. 19, subs. 1, any producer or manufacturer or merchant is given permission to apply the national mark to any commodity provided it conforms to the appropriate statutory specification”.
As Grange J. noted, there is a parallel between the provisions sustained by the Privy Council and those of Part I of the Act in the present case. There is no special constitutional significance in the fact that in the Dominion Trade and Industry
[Page 852]
Commission case the mark is stated to be vested in the Crown. It is a creature of the statute just as the grade names here are creatures of the statute. The Privy Council found that federal power in relation to the regulation of trade and commerce provided support for what this Court in MacDonald v. Vapor Canada Ltd., at p. 166, called “non-compulsory regulation”. So too here, and it seems to me that it was quite logical that the Parliament of Canada, having enacted compulsory grading requirements for agricultural products moving in export and interprovincial trade, should complement those provisions by giving an opportunity to dealers in such products to avail themselves, if they so wished, of the same grade prescriptions for local transactions. It could be a convenience for them and for consumers as well.
It was urged by the intervenant Attorney-General of Ontario as well as by the appellant that the prohibitions in s. 3(2) of the Act went beyond the mere giving of permission to use the federally established national standards and that their practical effect was to control or regulate local transactions in agricultural products. What the intervenant and the appellant are objecting to is, however, the character of the sanction imposed by Parliament upon a person who chooses to use the federal grade names but refuses to take them cum onere. Parliament might have chosen another sanction as, for example, a simple prohibitory order against the use of the grade names established under its authority where a person who elects to use them refuses to abide by the associated prescriptions for their use. The type of sanction does not change the substance of the matter in issue which is simply making available, if one chooses to use them, a set of natural standards but without in any way compelling their use.
The present case falls to be decided on the one point raised by the appellant, namely, that it could not constitutionally be visited with the sanctions flowing from a breach of Part I of the federal Act, although it had elected to use a grade name prescribed under that Part. What the appellant’s legal position would have been if it had claimed by way
[Page 853]
of defence that it was obeying provincial legislation is not a question that arises here, and I leave it open.
I would dismiss the appeal and, like the Courts below, I would make no order as to costs.
The judgment of Martland, Pigeon, Beetz, Estey and Pratte JJ. was delivered by
ESTEY J.—The appellant was charged under the Canada Agricultural Products Standards Act, R.S.C. 1970, c. A-8, s. 3(2)(a). In the charge the allegation is made that the appellant had in possession for sale some apples under a grade name authorized under s. 3(1) of the Act which did not meet the requirements prescribed in the regulations promulgated under the statute in that they were bruised, contrary to s. 3(2)(a) of the statute which in turn constitutes an offence under s. 13(1).
The appellant is a retailer and the alleged offence was said to have occurred in the Municipality of Metropolitan Toronto, presumably in a retail outlet. There was no evidence taken prior to the motion to quash before the Provincial Court Judge. All parties here and below have approached the constitutional issue which has herein arisen on the basis that the apples were offered for sale by the appellant in a wholly intraprovincial transaction and that it mattered not whether they were produced in or out of Ontario. The appellant challenges the constitutional validity of Part I of the statute so far as it purports “to regulate, govern or apply to a transaction wholly within the Province of Ontario”. The learned Provincial Court Judge, following argument, concluded that the statute was ultra vires the powers of the Parliament of Canada and quashed the information. An application was then made for a stated case under s. 762 of the Criminal Code. The appeal by way of stated case was heard by Grange J., sitting in High Court Chambers, who set aside “the acquittal” and remitted the proceedings to the Provincial Court Judge for disposition accordingly, the learned Justice of the High Court having concluded that Part I of the statute was valid legislation under s. 91(2) of the British North America Act.
[Page 854]
The Court of Appeal of Ontario confirmed the disposition made in the High Court and with reference to s. 3(2) of Part I of the statute expressly found it to be “necessarily incidental to the effective operation of the scheme established by maintaining the integrity of national standards grade and to prevent a misuse of the grade and confusion”. The appeal to this Court was limited to the following constitutional question:
Is Part I of the Canada Agricultural Products Standards Act, R.S.C. 1970, c. A-8 ultra vires in whole or in part?
The allocation of the power with respect to regulation of trade and commerce in this country under the British North America Act has been settled, until now at least, by Citizens Insurance Co. v. Parsons; R. v. Eastern Terminal Elevator Co.; Lawson v. Interior Tree, Fruit and Vegetable Committee, and The Attorney-General for British Columbia v. The Attorney General for Canada. Under the interpretation placed upon s. 91(2) of the British North America Act in these decisions, the power of Parliament with reference to the regulation of trade and commerce is limited to trade in the international and interprovincial sense and Parliament is not empowered thereby to regulate local trade simply as a part of a scheme for the regulation of international and interprovincial trade. In R. v. Eastern Terminal Elevator Co., supra, Duff J. described the limitation of federal power as follows:
It is undeniable that one principal object of this Act is to protect the external trade in grain, and especially in wheat, by ensuring the integrity of certificates issued by the Grain Commission in respect of the quality of grain, and especially of wheat; and the beneficient effect and the value of the system provided by the legislation as a whole is not at all disputed by anybody.
…
It does not follow that it is within the power of Parliament to accomplish this object by assuming, as this legislation does, the regulation in the provinces of par-
[Page 855]
ticular occupations, as such, by a licensing system and otherwise, and of local works and undertakings, as such, however important and beneficial the ultimate purpose of the legislation may be. (pp. 446-7).
Consequently, subject to my observations found at the end of these reasons, I approach the issue raised in this appeal on the basis that the Parliament of Canada may not, in the guise of regulating trade and commerce, reach into the fields allocated to the provinces by s. 92(13) and (16) and regulate trading transactions occurring entirely within the provinces. In actual fact the provinces and Parliament taking the lead from the Privy Council marketing decision of 1937, supra, have adopted cooperative and complementary schemes for the marketing of natural products. The Ontario statute here involved in fact was first enacted in 1937 (vide S.O. 1 Geo. VI, c. 24) immediately after the Privy Council judgment.
Parenthetically, I would add that, whatever the state of the federal trade and commerce power, nothing that I say here should be taken to apply to federal attempts to regulate the language of labels on various commodities (e.g., the Textile Labelling Act, R.S.C. 1970, c. 46 (1st Supp.) and the regulations thereunder). It may well be that regulation of commodity standards presents two aspects: the substantive content of those standards, and their form, including the language in which they must be displayed. However, as the issue is not before us, nothing more need be said at this time.
The foregoing seems to be the state of our constitutional law acknowledged by Parliament when the statutory plan in the Canada Agricultural Products Standards Act, 1955, c. 27, was adopted. At that time be it noted the provincial statutory regulation of these same natural products had been operative for several years. Section 3 of the present federal Act provides as follows:
(1) The Governor in Council may make regulations establishing grades with appropriate grade names for
[Page 856]
any class of agricultural products and, without limiting the generality of the foregoing, may, by such regulations
(a) prescribe the terms and conditions on which and the manner in which agricultural products may be graded or inspected under this Part;
(b) without limiting the generality of paragraph (a), require, as a condition to the grading or inspection of an agricultural product under this Part, that it be prepared and graded in an establishment that, at the time of the preparation or grading of the product,
(i) complied with prescribed conditions, and
(ii) was registered in the prescribed manner,
and in respect of which the prescribed registration fee was paid;
(c) prescribe fees that may be charged for the grading or inspection of agricultural products; and
(d) prescribe the sizes, dimensions and other specifications of packages in which an agricultural product must be packed and the manner in which it must be packed and marked as a condition to application or use of the name of a grade so established.
(2) No person shall
(a) sell, offer for sale, or have in possession for sale an agricultural product under a grade name established under subsection (1) or under a grade name or other designation so closely resembling a grade name so established as to be likely to be mistaken therefor, or
(b) apply to an agricultural product or to a package containing an agricultural product a grade name established under subsection (1) or a grade name or other designation so closely resembling a grade name so established as to be likely to be mistaken therefor,
unless the agricultural product meets the requirements prescribed for the grade, has been graded and inspected as required by the regulations, and is packed and marked in prescribed manner.
It is relevant to note that while Part I of the Act is thus voluntary, Part II which is entitled “International and Interprovincial Trade” is compulsory. As counsel for the Attorney General of Canada points out, the grading plan under Part I, so far as it applies within a province, is voluntary in the sense that the strictures of the statute do not apply unless and until the products in question are
[Page 857]
offered for sale under a grade name prescribed pursuant to the statute.
A complication arises by reason of the fact that the Province of Ontario, by a series of statutes culminating for our purposes in The Farm Products Grades and Sales Act, R.S.O. 1970, c. 161, authorized the establishment of regulations relating to the marketing of agricultural products under which it was made an offence to offer for sale or have in possession for sale any produce not accompanied by a sign stating the grade of the produce. Such produce also had to conform to all the standards prescribed by the regulations promulgated pursuant to the statute. By these regulations, the grades applicable to apples were identified by precisely the same grade names as those adopted by regulation under the Canadian statute now before the Court. Thus a vendor such as the appellant, upon receiving apples for resale, must, under the Ontario statute, sell the apples in association with a grade name prescribed by regulation and in conformity with quality standards specified in the regulation. Simultaneously with the marking of the grade name on the apples pursuant to the Ontario law, the retailer, here the appellant, is confronted with s. 3(2) and s. 13 of the federal statute.
Notwithstanding this statutory background, the respondent, the Attorney General of Canada, asserts that the appellant’s participation in the federal grading standard program is voluntary. If the federal legislation were, by its own terms, compulsory as regards intraprovincial transactions, it would undoubtedly be ultra vires as regulation of an individual form of trade within the province, assuming the present state of the law to be as I have summarized it above. Such legislation was struck down by the Privy Council in Attorney-General for British Columbia v. Attorney-General for Canada. The existing provincial legislation in this case is, on the same basis, valid: see the Reference respecting The Farm Products Market -
[Page 858]
ing Act, R.S.O. 1950, c. 131, as amended1. Thus the only course open to the federal authorities was to establish a “voluntary” marketing scheme, as was done by the regulations promulgated in 1965 (see Schedule attached hereto). However, a truly voluntary scheme establishing a system of grades distinct from those already promulgated by the province would not, as one can well imagine, have attracted much of a clientele. Accordingly, in order to inject some vitality into its own scheme, the Government of Canada was obliged to incorporate the provincial standards into its ‘voluntary’ regulatory scheme. Yet ironically the charge against the appellant here has been laid under the voluntary program and not the compulsory trade regulation.
Of course, it does not follow that provincial legislation, which has the factual effect of changing the operative nature of a federal statute, can thereby make the federal statute invalid. The federal statute must be intra or ultra vires standing on its own and without the presence or absence of provincial legislation. The court is, however, entitled, and indeed required, to examine the interrelationship of federal and provincial legislation if it appears that Parliament has incorporated provincial enactments into its own legislation in an effort to “colour” (to adopt the language of the Privy Council) it so as to enter a field which, by our constitution, rests solely within the legislative competence of the provinces. In other words, Parliament cannot do indirectly, with provincial aid, what it could not have done directly. It is for this reason that I shall continue to examine both schemes in tandem.
As was stated by Taschereau J. in Attorney General of Nova Scotia v. Attorney General of Canada, at p. 40:
It is a well settled proposition of law that jurisdiction cannot be conferred by consent.
If the Parliament of Canada cannot find justification for its legislation in the British North America Act, consent or acquiesence in the adoption of a statute by Parliament, either individual consent or
[Page 859]
consent obtained through the operation of provincial legislation, cannot provide the missing jurisdiction and authority. In the statute now before us, if Part I be invalid as purporting to establish a regulatory scheme in relation to local marketing, voluntary acceptance and participation therein by individual citizens or legal entities cannot make it valid. In reality there is in these circumstances no true voluntary adoption of the federal marketing scheme by the retailer. The mechanical or perhaps even unwitting adoption of the federal marketing scheme is the direct result of provincial coercion flowing from a valid provincial scheme regulating local marketing.
Stripping off the complexities of the constitutional argument and reducing the transaction to its real proportions, the appellant here offered apples for sale pursuant to an admittedly valid provincial statute. The dealer did not select and adopt a grade name prescribed by a federal statute, but rather complied with applicable, valid provincial legislation. The precise issue facing the Court in this proceeding is whether or not, in these circumstances, a charge may be laid under the federal statute. It may be, of course, that the provincial inspectors took a different view of the apples in question than did the federal inspectors, which may explain why no action was taken under the provincial statute. However, the offence, if any, must, in my view, be against the provincial legislation and not the artificially extended federal statute. Here the sequence of passage of marketing schemes was first the provincial statute, followed by a like federal statute purporting to reach down to intraprovincial trade. If, however, the Attorney General for Canada be correct, the latter is valid and the offence allegedly committed by the appellant is against the federal statute and not the provincial statute without which the federal statute would have no legal application as regards local trade. The parasite and not the host thereby becomes the bigger and more important animal.
[Page 860]
Grange J. decided and the respondant in this court submits that the decision of the Privy Council in Attorney-General for Ontario v. Attorney-General for Canada is applicable on all fours to this statutory pattern. In that case, the Parliament of Canada created a national trade mark “Canada Standard” which could be adopted by anyone with reference to any goods so long as the producer or merchant thereof conformed to the standards and specifications prescribed in any Act of Parliament. The trade mark program was found to be intra vires the Parliament of Canada by the Privy Council and where the producer or vendor of the product in question adopted the trade mark, the Parliament of Canada was able to regulate the quality of the merchandise marketed in association therewith. It is evident from the terms of the judgment that the federal legislation was valid by reason of the vesting in the Federal Government of the use of the statutory trade mark so as to provide a legal basis for its licensing program.
The respondent places great reliance on the trade mark case. In that case, there was no accompanying provincial legislation which made the adoption of a trade mark licence by the producer mandatory. If by some comparable arrangement the federal licensing program had effectively been made mandatory by the presence of prior provincial marketing legislation and the federal statute had thereby been brought into play in the regulation of local sales within a province, the conditions under which the Privy Council found the Canada Standard legislation to be valid would not exist. That body found the legislation to be intra vires because:
…there seems no reason why the legislative competence of the Dominion Parliament should not extend to the creation of juristic rights in novel fields if they can be brought fairly within the classes of subjects confided to Parliament by the constitution. The substance of the legislation in question is to define a national mark, to give the exclusive use of it to the Dominion so as to provide a logical basis for a system of statutory licences to producers, manufacturers and merchants. To vest the “exclusive property” in the mark in His Majesty is probably no more than to vest “the use of the mark in
[Page 861]
His Majesty. It may afford a useful civil protection for the mark when it is violated in Canada by persons who have not violated the somewhat restricted prohibition of the penal sub-section (which only applies to persons who “apply” the mark to commodities), or violated abroad, where the penal provisions of the law of Canada could not be applied at all.
Attorney General for Ontario v. Attorney General for Canada, supra, at p. 418 per Lord Atkin.
Here there is no comparable statutory pattern in fact or in law. The program here in question is not optional but, in reality, mandatory. There is no property right in respect of which the federal government is issuing a statutory licence on the voluntary application of a producer or retailer. Here the thrust of the federal statute is the regulation of local as well as interprovincial and international marketing, as for example, by the detailed regulation of packaging. Marketing schemes affecting as they do the process of marketing as such, are in no way comparable in fact or in law with a program for the creation of a property right in the form of a trade mark coupled with a truly voluntary scheme for licensing the users of that trade mark. Furthermore, the statute now before the Court, unlike the Canada Standards statute, requires provincial participation in order to make the application of the federal statute inevitable in local trade. The true nature, the pith and substance, of the federal program is exposed by the circumstances and context in which it was enacted and now enforced. The presence of the provincial Act did not of itself invalidate the federal action, but it forms part of the surroundings to be scrutinized in discerning the substantive core of the federal legislation.
The Canada Standards legislation was approached and validated by the Privy Council as legislation in relation to trade marks. The pith and substance of the Canada Standards statute was clearly a trade mark creation and licensing plan which the Privy Council found to be valid legisla-
[Page 862]
tion based on s. 91(2) of the British North America Act. Because the Privy Council were not there concerned with legislation whose pith and substance was the regulation of the local marketing of agricultural products, the application or extension of that decision to our circumstances is necessarily attended with great risk. One should not forget the limits of 91(2) as set out in the comments of Rand J. in the Reference Respecting The Farm Products Marketing Act, as amended, supra, at pp. 208-9:
Although not specifically mentioned in s. 92 of the British North America Act, there is admittedly a field of trade within provincial power… The power is a subtraction from the scope of the language conferring on the Dominion by head 2 of s. 91 exclusive authority to make laws in relation to the regulation of trade and commerce, and was derived under an interpretation of the Act which was found necessary
in order to preserve from serious curtailment, if not from virtual extinction, the degree of autonomy which, as appears from the scheme of the Act as a whole, the provinces were intended to possess
(per Duff J. in Lawson v. Interior Tree, Fruit and Vegetable Committee of Direction, [supra]). In examining the legislation for the purpose mentioned we should bear in mind Lord Atkin’s admonition in Attorney-General for British Columbia v. Attorney-General for Canada et al., [supra], that
the legislation will have to be carefully framed, and will not be achieved by either party leaving its own sphere and encroaching upon that of the other.
The definitive statement of the scope of Dominion and Provincial jurisdiction was made by Duff C.J. in Re The Natural Products Marketing Act, 1934, [1936] S.C.R. 398. The regulation of particular trades confined to the Province lies exclusively with the Legislature subject, it may be, to Dominion general regulation affecting all trade, and to such incidental intrusion by the Dominion as may be necessary to prevent the defeat of Dominion regulation; interprovincial and foreign trade are correspondingly the exclusive concern of Parliament. That statement is to be read with the judgment of this Court in R. v. Eastern Terminal Elevator Company, [supra], approved by the Judicial Committee in Attorney-General for British Columbia v. Attorney-General for Canada, supra, at p. 387, to the effect that Dominion regulation cannot embrace local trade merely because in
[Page 863]
undifferentiated subject-matter the external interest is dominant.
Should a province consider undesirable the result of the combination of its legislation with that of the Parliament of Canada, in this case the prosecution of a local vendor, what recourse does a province have in such a circumstance? It might, of course, repeal its admittedly valid regulatory program. Alternatively, the province might steer its legislation away from the federal statute by adopting different descriptive terminology for the product regulation. Such action would, of course, be rendered futile if the federal Parliament should then embrace those terms in complementary amending legislation or authorize such action by regulation. The result would be that the sale of natural products within a province would be validly regulated by a national statute at least as to standards applicable to such sales at any level of trade. It would appear that the provincial power to regulate local trade could be permanently frustrated by persistent “shadow legislation” on the part of the federal Parliament. The answer to this problem may be discovered in other proceedings where these issues arise and must be answered, but the disposition of this appeal does not require the establishment of the line of demarcation between the trade and commerce domain and the regulation of local trade by the provincial Legislature.
The learned Justice in Chambers in the High Court, in finding the federal statute to be applicable, stated in part:
It is the creation of a national mark to which traders, including local traders, may have recourse. It is only when the province enacts legislation requiring those local traders to resort to that mark and fulfil the requirements for its use that there arises regulation of trade and commerce within the province. And that, of course, is brought about by Provincial and not Federal legislation.
That, in my respectful view, represents a line of convenience rather than a line of differentiation. The local traders have no “recourse” to the nation-
[Page 864]
al statute any more than it can be said that a person may or may not exert his right to breathe. It is also, in my respectful view, quite wrong to regard the federal statute as being an innocent creation of something akin to a trade mark and to thereby assume that this federal statute is trade mark legislation. In fact and in law, it is marketing legislation enacted without sovereign power to do so in the hope that this deficiency will be filled with dovetailing provincial sovereign legislation. The province has cooperated in bringing in the marketing plan but takes the position here, and I believe rightly so, that the operative statute which may have been offended by the appellant is not the so-called trade mark legislation but the genuine marketing legislation of the province designed to fill the constitutional gap with reference to the marketing of fruit and vegetables in the Province of Ontario.
The Ontario Lieutenant-Governor in Council may have responded to the federal statute by adopting the same standards and terminology in its marketing legislation concerning natural products. It may be helpful to refer for the legislative and regulatory history of these trade regulation schemes to the schedule attached hereto. The executive branch of the federal government now seeks to arrogate to itself the enforcement, in real terms, of the provincial cooperating statute. It is resisted, not surprisingly, by the executive branch of the Ontario government. The legislative branches having cooperated so eminently in establishing a comprehensive marketing scheme, it is as unseemly as it is wasteful for this contest to have arisen between the two administrative or executive agencies. In the result, we have the spectacle of the respective executive branches of the two cooperating governments disputing the rights of administration of a marketing plan which could only be implemented at the local level by the exercise of provincial authority. If such cooperation at the legislative level must result in the wasteful overlapping or doubledecking of administration or enforcement, the constitutional plan designed and constructed in the British North America Act and as evolved through the decisions of the Privy
[Page 865]
Council and this Court must surely be defeated. Constitutional interpretation is not, of course, controlled completely by competing results or consequences. Where, however, a reasonable interpretation consistent with the authorities can be put upon the constitution so as to ensure or bring about a sensible, workable result, a court should, in my view, adopt such interpretation. This must be particularly true where the alternative interpretation is offensive to the very plan into which the two plenary authorities have entered for the joint regulation of a segment of the community’s activities.
The federal statute seeks to add another consequence to the same action already proscribed under the Ontario Act. It is said that the result is simply that if the retailer affixes to the apples the “extra fancy” grade identification, he is to be prosecuted under the federal statute (assuming quality does not match the prescribed standards), but if he does not affix the label, he is to be prosecuted under the provincial Act. To that result, my strong preference is for the simple solution that Part I of the federal statute is inapplicable to the local trade here in question, and hence the charge, if any, must be laid under the provincial statute.
This is not to say that the public is left unprotected, for indeed, the provincial legislation, The Farm Products Grades and Sales Act, R.S.O. 1970, c. 161 as amended, is co-extensive with the federal legislation. Indeed it is typical of action taken by the provinces for the regulation of the marketing of farm products.
It is not necessary to determine, in my view, whether Part I is ultra vires the Parliament of Canada in toto and we are not invited by the appellant to do so. It is sufficient if it is found to be inapplicable to the events as alleged in the charge laid against the appellant under the federal statute. It may be that Part I has at least a partial validity in that the grading program of s. 3 is integrated with the international and interprovincial trade program which is the subject of Part II of the statute, but in my view, s. 3 has no validity in relation to purely intraprovincial transactions
[Page 866]
and in that respect is ultra vires. This was the course followed in the interpretation of legislation by Kellock J. in somewhat similar circumstances in the Reference as to the Applicability of The Minimum Wage Act of Saskatchewan to an Employee of a Revenue Post Office, at p. 268.
It may well be that the state of the interpretation of the British North America Act, which I have summarized at the outset with reference to the decisions of the Privy Council, is not now a correct description of the federal power under s. 91(2). It may well be that in a proper proceeding where the circumstances raise the issue of the reach of s. 91(2), this Court will have occasion to deal with the interlocking of the federal and provincial power with reference to the local marketing of articles of commence, both natural products and otherwise, which have entered the interprovincial and international trade stream. It is not necessary, in my view, to investigate those principles in order to properly dispose of this case, and I therefore do no more than reiterate that the disposition which I propose is based entirely on the state of the law as we find it to be in those decisions mentioned at the outset.
The respondent touched upon the possibility that Part I could find its constitutional validity in criminal law (91 (27)). One need go no further in disposing of this issue than to refer to the words of Rand J. in Re The Validity of s. 5(a) of the Dairy Industry Act, at p. 50. Argument was also submitted by the respondent that Part I might be constitutionally supported by the power in relation to agriculture found in s. 95. I say no more than to point out that these apples clearly form no part of the process of agriculture once they have entered the commercial marketing conduits and therefore I believe the fate of these proceedings in no way turns upon the availability of s. 95 of the British North America Act. See Re Agricultural Products Marketing Act, per Pigeon J. at p. 1294.
Email this Content