Canada Labour Relations Board et al. v. C.N.R., [1975] 1 SCR 786

Supreme Court of Canada

Canada Labour Relations Board et al. v. C.N.R., [1975] 1 S.C.R. 786

Date: 1974-04-02

Canada Labour Relations Board and Canadian Brotherhood of Railway Transport and General Workers Appellants;

and

The Canadian National Railway Company Respondent.

1974: March 4; 1974: April 2.

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

ON APPEAL FROM THE SUPREME COURT OF ALBERTA, APPELLATE DIVISION

Labour relations—Application for certification as bargaining agent for unit of employees at Jasper Park Lodge—Jurisdiction of Canada Labour Relations Board challenged—Certification order quashed—Industrial Relations and Disputes Investigation Act, R.S.C. 1952, c. 152, ss. 53(g), 54—Canadian National Railways Act, 1955 (Can.), c. 29, s. 18(1).

The appellant Brotherhood applied to the Canada Labour Relations Board for certification, under the Industrial Relations and Disputes Investigation Act, R.S.C. 1952, c. 152, as bargaining agent for a unit of employees employed at Jasper Park Lodge (a part of the hotel system of the respondent company). The company challenged the jurisdiction of the Board, contending that the Act did not apply to it in its relations with those employed at the Lodge, and when this challenge was rejected by the Board, proceedings were taken to quash the certification order which the Board had made. The judge who heard the application quashed the order, and his judgment was sustained by a majority of the Appellate Division. With leave, the Board and the Brotherhood then appealed to this Court.

Counsel for the Board confined his submissions to s. 53(g) of the Act, which, in part, provides “Part I applies in respect of employees who are employed upon or in connection with the operation of any work, undertaking or business that is within the legislative authority of the Parliament of Canada including … (g) such works or undertakings as, although wholly situate within a province, are before or after their execution declared by the Parliament of Canada

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to be for the general advantage of Canada …” Counsel for the Brotherhood founded himself on s. 54, which, in part, provides “Part I applies in respect of any corporation established to perform any function or duty on behalf of the Government of Canada and in respect of employees of such corporation …”

Held: The appeal should be dismissed.

The respective contentions of the appellants, viz. (1) that Jasper Park Lodge was the subject of the federal declaratory power under ss. 91(29) and 92(10)(c) of the British North America Act by virtue of its exercise in s. 18(1) of the Canadian National Railways Act, 1955 (Can.), c. 29, and (2) that the respondent was a corporation established to perform a function or duty on behalf of the Government of Canada so as to bring it and its employees at Jasper Park Lodge within Part I of the Industrial Relations and Disputes Investigation Act, failed.

The submission invoking s. 18(1) of the Canadian National Railways Act turned on whether Jasper Park Lodge was comprehended by the words “other transportation works” in s. 18(1). Where a hotel, like Jasper Park Lodge, is one open to the public at large and is not restricted to travellers on the respondent’s railway system, it is not caught by the aforementioned words in s. 18(1).

With respect to the reliance of the Brotherhood, supported by the Board, upon s. 54, the nub of the question was whether the respondent had been established to perform the function, inter alia, of operating Jasper Park Lodge on behalf of the Government of Canada. The inclusion of the respondent in schedule D (proprietary corporations) of the Financial Administration Act, R.S.C. 1970, c. F-10, in the absence of any express provision in any applicable legislation making it an agent of the Crown, reinforced a disclaimer of agency made by the Board and not disputed by the Brotherhood.

APPEAL from a judgment of the Supreme Court of Alberta, Appellate Division[1], dismissing an appeal from a judgment of Clement J. Appeal dismissed.

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Howard L. Irving, Q.C., for the appellant, Canada Labour Relations Board.

Maurice W. Wright, Q.C., for the appellant, Canadian Brotherhood of Railway, Transport and General Workers.

Charles C. Locke, Q.C., and C.J. Irwin, for the respondent.

The judgment of the Court was delivered by

THE CHIEF JUSTICE—The issue in this appeal, which comes here by leave of this Court, is whether Part I of the Industrial Relations and Disputes Investigation Act, R.S.C. 1952, c. 152 (now replaced by Part V of the Canada Labour Code, 1972 (Can.), c. 18) applies to the respondent company as owner and operator of Jasper Park Lodge and the employees of the company who work at the Lodge. It is common ground that Alberta labour relations legislation will apply to the collective bargaining relations of the company and those employed by it at the Lodge unless those relations are embraced by the federal Act. The two appellants and the respondent company disclaim any reliance on issues of constitutional validity or invalidity and, save for a point which bears on constitutional authority and which is referred to below, the issue before this Court involves only the construction and application of s. 53(g) and s. 54 of the federal Act.

Jasper Park Lodge is situated in Alberta, in or near the town of Jasper, and is located on a large tract of land leased by the respondent company from a federal government department. So far as appears from the material in the record, the buildings comprising the Lodge are owned by the respondent which also holds the leasehold in the lands on which it stands; the lands themselves are held by Her Majesty in right of Canada and are part of a national park. The Lodge is part of the hotel system which the respondent is authorized to operate under its constituent statute. It is a resort hotel which is not restricted to travellers on the respondent’s

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railway system and, in that respect, is of the same character as the Empress Hotel in Victoria, British Columbia, owned and operated by the Canadian Pacific Railway Company, which was the subject of litigation terminating in the judgment of the Privy Council in Canadian Pacific Ry. Co. v. Attorney-General of British Columbia[2].

The appellant, Canadian Brotherhood of Railway Transport and General Workers, applied on March 26, 1970, to the Canada Labour Relations Board, also an appellant here, for certification, under the Industrial Relations and Disputes Investigation Act, as bargaining agent for a unit of employees employed at Jasper Park Lodge. The respondent company challenged the jurisdiction of the Board, contending that the Act did not apply to it in its relations with those employed at the Lodge, and when this challenge was rejected by the Board, proceedings were taken to quash the certification order which the Board had made. Clement J. quashed the order, and his judgment was sustained by a majority of the Alberta Appellate Division in reasons delivered by McDermid J.A., with whom Cairns J.A. agreed. Allen J.A. dissented.

Sections 53(g) and 54 of the Industrial Relations and Disputes Investigation Act read as follows:

53. Part I applies in respect of employees who are employed upon or in connection with the operation of any work, undertaking or business that is within the legislative authority of the Parliament of Canada including, but not so as to restrict the generality of the foregoing, …

(g) such works or undertakings as, although wholly situate within a province, are before or after their execution declared by the Parliament of Canada to be for the general advantage of Canada or for the advantage of two or more of the provinces; …

54. Part I applies in respect of any corporation established to perform any function or duty on behalf

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of the Government of Canada and in respect of employees of such corporation, except any such corporation, and the employees thereof, that the Governor in Council, excludes from the provisions of Part I.

I need hardly say that there has been no exclusionary order under s. 54 in respect of the respondent and its employees. Counsel for the Board confined his submissions to s. 53 (g), and counsel for the Brotherhood founded himself on s. 54. Their respective contentions were, to put them generally, (1) that Jasper Park Lodge was the subject of the federal declaratory power under ss. 91(29) and 92(10)(c) of the British North America Act by virtue of its exercise in s. 18(1) of the Canadian National Railways Act, 1955 (Can.), c. 29, and (2) that the respondent was a corporation established to perform a function or duty on behalf of the Government of Canada so as to bring it and its employees at Jasper Park Lodge within Part I of the federal Act.

The submission invoking s. 18(1) of the Canadian National Railways Act turns on whether Jasper Park Lodge is comprehended by the words “other transportation works” in s. 18(1), the whole of this section being as follows:

18.(1) The railway or other transportation works in Canada of the National Company and of every company mentioned or referred to in Part I or Part II of the schedule and of every company formed by any consolidation or amalgamation of any two or more of such companies are hereby declared to be works for the general advantage of Canada.

(2) The companies incorporated by subsection 7(2) of the Canadian National-Canadian Pacific Act are hereby continued and such companies are in respect of all their affairs subject to this Act.

(3) For the purposes of this section, the expression “railway or other transportation works” does not include any works operated under the authority of section 27.

Section 18 in its present form under the Act of 1955 derives from s. 18 of the original constitu-

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ent Act of the respondent company, being 1919 (Can.), c. 13, and at that time what was declared by Parliament to be works for the general advantage of Canada were “the works of any of the Companies comprised in the Canadian Northern system which have not heretofore been declared to be works for the general advantage of Canada and the works of any Company or Companies hereafter from time to time declared by the Governor in Council to be comprised in the Canadian Northern system”. Jasper Park Lodge, which had been begun as a private venture in 1912, was not taken over by the respondent company until 1922, and it could not therefore be a work caught by the declaration in s. 18 aforesaid unless it was subsequently “comprised in the Canadian Northern system”. What was “comprised” within this system, as the schedules to the various constituent and amending Acts (as they were until 1955) disclose, were various companies engaged mainly in railway, telegraph and express operations and, accepting that the “works” operated by such companies were the subjects of the declaration, Jasper Park Lodge did not fall within them. Indeed, it was not argued that merely because Jasper Park Lodge had come under the respondent’s ownership and control it therefore, ipso facto, came within the declaration in s. 18 of the 1919 Act or in the revised and consolidated Act found in R.S.C. 1927, c. 172.

What is relied upon then is s. 18(1) of the new constituent Act of 1955, in which the narrower phrase “the railway or other transportation works” has replaced the general words “the works” used up to that time. Reference is made to s. 29 of the Act of 1955 which empowers the respondent, inter alia, to purchase, acquire and operate hotels, offices and other buildings, “as it may find necessary and convenient for the purposes of National Railways”. In the original Act of 1919, the respondent was authorized by s. 29 to acquire, with government approval,

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shares in, inter alia, hotels. Nothing here turns on the distinction between the old and the new s. 29, and what is left is consideration of the question whether the power to acquire and operate hotels, which the respondent may find to be necessary and convenient for the purposes of its railway system, warrants this Court in saying that a hotel so acquired, and being a hotel of the character of Jasper Park Lodge, falls within the words “other transportation works”. This phrase is nowhere defined, but if it is to have the embracive grasp which the appellant Board would attribute to it, it must also embrace any of the other properties which the respondent is authorized to acquire under s. 29, even though they are not integrated with or even incidental to its transportation system, as, for example, offices and other buildings. In short, the Board would have it that what the respondent may find “necessary and convenient for the purposes of National Railways” comes within the declaration in s. 18(1) covering “other transportation works”. I am of the opinion that this is an untenable argument, especially in the light of the history of the section.

There is one further observation that I would make on this branch of the case. The Canadian National Railways Capital Revision Act, 1952 (Can.), c. 36, s. 2(e) and (f), defines, respectively, “National Railways” and “National System”, and includes in each definition the words “its transportation, communication and hotel system”. This differentiation seems to me to buttress my conclusion that at least where a hotel, like Jasper Park Lodge, is one open to the public at large, it is not caught by the words “other transportation works” in s. 18(1). I point out too that the same specification of “its transportation, communication and hotel system” is used in the definition of “National Railways” in s. 3(e) of the Canadian National-Canadian Pacific Act, 1932-33 (Can.), c. 33, later found in R.S.C. 1952, c, 39. Nor does s. 18(3) help the construction urged by the appellants. In excluding works operated under the authority of s. 27,

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it excludes motor vehicle operations which the respondent is empowered to undertake, but this exclusion surely cannot be a basis for bringing the hotel system into s. 18(1).

The reliance of the appellant Canadian Brotherhood, supported by the Board, upon s. 54 of the Industrial Relations and Disputes Investigation Act raises a somewhat larger issue in view of the generality of the words used in that section. I am of the opinion that we are not called upon to define, even for the purposes of s. 54, what are government functions or government duties. I am satisfied that, constitutional questions aside, the Government of Canada may involve itself in any function or take on any duty that it may deem appropriate under appropriate authorization of Parliament. The nub of the question in this appeal, as it arises in respect of s. 54, is whether the respondent has been established to perform the function, inter alia, of operating Jasper Park Lodge on behalf of the Government of Canada (the emphasis is mine).

There can be no quarrel with the submission of the appellants that from its origin in 1919 the respondent has been wholly owned and controlled by the Crown and by the federal Government under legislation that spells this out in some detail. What was done in 1919, and later extended to take in the Grand Trunk system, was to take over a number of debt-ridden railways and weld them into a centrally-controlled national system, to be governed and operated by a corporation answerable to the federal Government and to Parliament. Under the 1955 Act, all capital stock is held by the Minister of Finance in trust for Her Majesty; the Governor in Council appoints the directors and appoints the chairman of the board of directors, who appoint the

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president but with the approval of the Governor in Council; shareholder approvals or confirmations, wherever required under any Act, may be given by the Governor in Council; the annual budget must be laid before Parliament after government approval; Parliament appoints annually an auditor to make a continuous audit and to report annually to Parliament. Under the Canadian National Railways Capital Revision Act of 1952, as under predecessor legislation, all surpluses are payable to the Receiver General of Canada. It is the public purse that may be called on for any deficits, as is evident from the provisions of the constituent Act respecting the presentation of the respondent’s budget. The ownership and control in the Crown and in the federal Government under legislation of Parliament is thus abundantly evident.

Although counsel for the respective parties to this appeal disclaimed any intention of putting in issue the validity of any relevant legislation, counsel for the respondent did contend that the application of the Industrial Relations and Disputes Investigation Act must be related to the limits of federal legislative power in relation to labour relations and that, accordingly, the construction of s. 54 must be approached in that light. It was his submission that that would necessarily exclude from s. 54 any such hotel operation as Jasper Park Lodge, unless perhaps it was an operation of the Crown in right of Canada on property vested in the Crown. However, counsel for the Board expressly disclaimed that the respondent was an agent of the Crown, and counsel for the Brotherhood did not make any different submission. This position is, in my view, an important concession in respect of the construction of s. 54.

What the appellant alleged to be the crucial error of the Alberta Appellate Division was the translation of the words “on behalf of” into

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“of” alone, so as to make the issue under s. 54 whether the respondent corporation was established to perform a function of the Government of Canada rather than a function on behalf of that Government. McDermid J.A. said that although running railways can be, and in this case was, a function of the Government of Canada, running a resort hotel was not; and since the operation of Jasper Park Lodge was not ancillary or incidental to the railway function, it was outside of s. 54. If the respondent was established, as McDermid J.A. said, to perform the function of running a railway “on behalf of the Government of Canada” (and here he used the words of s. 54 and did so in several other places in his reasons), it is difficult to appreciate why its hotel system is in any other position unless one takes a selective view of what functions are open to the federal Government. Section 54 speaks of “any function”. What is clear is that the Parliament of Canada needs no reliance upon s. 54 to support the application of its labour relations legislation to railway operations. They are caught easily by s. 53(b) and (h) of the Act under consideration.

What then is to be made of the words “on behalf of”? They are words of agency, and although such agency, where the Crown is the principal, is normally expressed in the legislation establishing the agent, it may also be shown by necessary intendment under the terms of the legislation. Ownership of the capital stock and ultimate control of the direction of the respondent are certainly cogent indicia, but the disclaimer of agency by the appellant Board, not disputed by the Canadian Brotherhood, is telling, especially in the light of the adaptation of the scope of s. 54 to constitutional power. I point also to the Financial Administration Act, now R.S.C. 1970, c. F-10 which specifies three types of Crown corporations, namely, agency corporations, departmental corporations and

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proprietary corporations. Agency corporations are listed in Schedule C, departmental corporations in Schedule B, and proprietary corporations in Schedule D to the Act. “Crown corporation” is defined in the Act to mean “a corporation that is ultimately accountable, through a Minister, to Parliament for the conduct of its affairs and includes the corporations named in Schedule B, Schedule C and Schedule D”. Schedule D includes “ ‘National Railways’ as defined in the Canadian National-Canadian Pacific Act, R.S.C. 1952, c. 39”, and the definition names the respondent company as “owner, operator, manager or otherwise and its transportation, communication and hotel system”. The inclusion of a company in Schedule D, for the purposes of the Financial Administration Act, does not mean that it is not an agent of the Crown; for example, the Canadian Overseas Telecommunication Corporation is listed, and yet by s. 8 of its constituent Act, R.S.C. 1970, c. C-11, it is expressly said to be an agent of the Crown. But it seems to me that the inclusion of the respondent in Schedule D in the absence of any express provision in any applicable legislation making it an agent of the Crown reinforces the disclaimer of agency made by the appellant Board.

Section 66(3) of the Financial Administration Act reads as follows:

The Governor in Council may by order

(a) add to Schedule B any Crown corporation that is a servant or agent of Her Majesty in right of Canada and is responsible for administrative, supervisory or regulatory services of a governmental nature;

(b) add to Schedule C any Crown corporation that is an agent of Her Majesty in right of Canada and is responsible for the management of trading or service operations on a quasi-commercial basis, or for the management of procurement, construction or disposal activities on behalf of Her Majesty in right of Canada; and

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(c) add to Schedule D any Crown corporation that

(i) is responsible for the management of lending or financial operations, or for the management of commercial and industrial operations involving the production of or dealing in goods and the supplying of services to the public, and

(ii) is ordinarily required to conduct its operations without appropriations.

It is to be noted that only a Crown corporation that is a servant or agent of Her Majesty in right of Canada and is responsible for the management of specified activities may be added to Schedule C. This, under the disclaimer of Crown agency, would exclude the respondent from eligibility for inclusion in Schedule C. There is also the important fact that, of the 16 Crown corporations now listed in Schedule C, 13 are expressly declared, by the legislation applicable to them respectively, to be agents of Her Majesty in right of Canada; one, Canadian Patents and Developments Limited, was established by the National Research Council, itself an agent of the Crown, to perform duties on behalf of the Council under the National Research Council Act, R.S.C. 1970, c. N-14; one, the National Battlefields Commission, established under the National Battlefields at Quebec Act, 1907-1908 (Can.), c. 57, administers only property vested in Her Majesty in right of Canada; and one, the Canadian National (West Indies) Steamships Limited, established by the Governor in Council under 1927 (Can.), c. 29, under the then federal Companies Act to provide special shipping services for certain trade agreement purposes, is apparently now inactive.

It follows from all of the foregoing that I would dismiss the appeal with costs.

Appeal dismissed with costs.

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Solicitors for the appellant, Canada Labour Relations Board: Parlee, Irving, Henning, Mustard & Rodney, Edmonton.

Solicitors for the appellant, The Canadian Brotherhood of Railway, Transport and General Workers: Soloway, Wright, Houston, Killeen & Greenberg, Ottawa.

Solicitors for the respondent: Ladner, Downs, Vancouver.