British Columbia (Attorney General) v. Lafarge Canada Inc., 2007 SCC 23, [2007] 2 SCR 86

                                                 SUPREME COURT OF CANADA

Between:

Attorney General of British Columbia

Appellant

and

Lafarge Canada Inc. and Vancouver Port Authority

Respondents

and

Burrardview Neighbourhood Association and City of Vancouver

Respondents

‑ and ‑

Attorney General of Canada, Attorney General of Ontario,

Attorney General of Quebec, Attorney General of New Brunswick

and Attorney General of Alberta

Interveners

Coram: Bastarache, Binnie, LeBel, Deschamps, Fish, Abella and Charron JJ.

______________________________

British Columbia (Attorney General) v. Lafarge Canada Inc., [2007] 2 S.C.R. 86, 2007 SCC 23

Attorney General of British Columbia                                                            Appellant

v.

Lafarge Canada Inc. and Vancouver Port Authority                                 Respondents

and

Burrardview Neighbourhood Association and City of Vancouver            Respondents

and

Attorney General of Canada, Attorney General of Ontario,

Attorney General of Quebec, Attorney General of

New Brunswick and Attorney General of Alberta                                       Interveners

Indexed as:  British Columbia (Attorney General) v. Lafarge Canada Inc.

Neutral citation:  2007 SCC 23.

File No.:  30317.

2005:  November 8; 2007:  May 31.

Present:  Bastarache, Binnie, LeBel, Deschamps, Fish, Abella and Charron JJ.

on appeal from the court of appeal for british columbia

Constitutional law — Division of powers — Public property — Interjurisdictional immunity — Company seeking to build integrated ship offloading/concrete batching facility on port lands owned by federal undertaking — Whether municipal zoning and development by‑law inapplicable — Whether interjurisdictional immunity extends to all federally controlled property — Constitution Act, 1867, s. 91 (1A).

Constitutional law — Division of powers — Navigation and shipping — Interjurisdictional immunity — Federal paramountcy — Company seeking to build integrated ship offloading/concrete batching facility on port lands owned by federal undertaking — Whether municipal zoning and development by‑law inapplicable in view of Parliament’s jurisdiction over “navigation and shipping” — Whether land use jurisdiction asserted by federal undertaking attracting interjurisdictional immunity — Whether requirements of federal paramountcy doctrine satisfied — Constitution Act, 1867, s. 91(10) .

Constitutional law — Division of powers — Interjurisdictional immunity — Scope.

Lafarge Canada Inc. wished to build an integrated ship offloading/concrete batching facility on waterfront lands owned by the Vancouver Port Authority (“VPA”), a federal undertaking constituted pursuant to the 1998 Canada Marine Act .  The City of Vancouver, which proposed certain modifications, and the VPA approved the project in principle, but a group of ratepayers opposed it and filed an application in the British Columbia Supreme Court, arguing that the City had declined to exercise jurisdiction over the lands and ought to have insisted that Lafarge obtain a City development permit.  The VPA replied that no City permit was necessary because VPA lands enjoy interjurisdictional immunity as “public property” within the meaning of s. 91(1A) of the Constitution Act, 1867 , or because the management of those lands is vital to the VPA’s “federal undertaking” pursuant to the federal s. 91(10) jurisdiction over “navigation and shipping”.  In the alternative, the VPA contended that there was an operational conflict and that, according to the doctrine of federal paramountcy, the conflict must be resolved in favour of federal jurisdiction.  The chambers judge granted the ratepayers’ application and declared that the VPA lacked jurisdiction to approve the project.  The Court of Appeal set aside the decision, finding that VPA lands are “public property” within the meaning of s. 91(1A) of the Constitution Act, 1867  and declaring the City’s zoning and development by‑law to be inapplicable to the proposed development.

Held:  The appeal should be dismissed.

Per Binnie, LeBel, Deschamps, Fish, Abella and Charron JJ.:  This case should be decided on the basis of federal paramountcy, not interjurisdictional immunity.  As explained in Canadian Western Bank v. Alberta, released concurrently, the doctrine of interjurisdictional immunity should generally not be applied where the legislative subject matter presents a double aspect and both federal and provincial authorities have a compelling interest.  Were there to be no valid federal land use planning controls applicable to the site, federalism does not require a regulatory vacuum, which would be the consequence of interjurisdictional immunity.  The matter at issue here — the development of waterfront lands — could potentially fall under either provincial or federal jurisdiction, depending on the ownership of the lands and on the use to which it is proposed that they be put.  Waterfront lands do not cease to be “within the province” by reason of their potential use for federally regulated activities, but the federal power will be paramount to the provincial power where valid federal and provincial laws are applicable to different aspects of the proposed use and come into operational conflict. [4] [37] [43]

The Canada Marine Act  is a federal law that in pith and substance relates both to the management of “public property” and to “navigation and shipping”.  Section 91(1A) of the Constitution Act, 1867  does not extend interjurisdictional immunity to all federally controlled property.  Absent an agency relationship, public property must encompass some element of ownership by Canada in order to receive constitutional immunity from provincial land use regulations.  The federal Crown has no proprietary interest in the subject land.  The VPA’s letters patent indicate that the lands Lafarge proposes to lease from the VPA for its project are Schedule C lands.  Under the Canada Marine Act , Schedule C lands are owned by the VPA, not by the Crown, and it is expressly provided that the VPA is not an agent of Canada in relation to those lands.  Since s. 91(1A) creates an immunity based on a proprietary interest, Schedule C lands are not “public property” of the federal Crown and do not therefore fall within the scope of s. 91(1A).  To impute s. 91(1A) status to the Schedule C lands and thereby subject the lands to a Crown regime which the denial of Crown agent status was designed to avoid, would be inconsistent with Parliament’s intent.  [48] [53] [56] [60] [72]

Nor does interjurisdictional immunity apply to every element of an undertaking that has been incorporated federally or is subject to federal regulation; it is restricted to “essential and vital elements” of the undertaking.  There is no explicit federal jurisdiction over “port lands”.  The VPA’s authority must therefore be derived from the federal power over “navigation and shipping” under s. 91(10)  of the Constitution Act, 1867 .  This power may bring within federal jurisdiction a matter otherwise subject to provincial jurisdiction if that matter is “closely integrated” with shipping or navigation.  Here, the Canada Marine Act ’s land use controls reach beyond Crown property to embrace uses that are “closely integrated” with shipping and navigation.  This covers the Lafarge project, which has from the outset been conceived of by both the City and the VPA as an integrated transportation/mixing facility in which the marine transportation aspect dominates.  The port is not a federal enclave.  VPA lands are held and leased for a variety of activities.  Authorizing the construction of a cement mixing facility on these port lands does not fall within the VPA’s core or vital functions.  On the facts of this case, it is rather an activity incidental to shipping.  In the absence of valid and applicable federal regulatory land use controls there would be no regulatory vacuum on the land at issue.  Provincial land use controls would apply.  The federal arguments in favour of interjurisdictional immunity are therefore rejected.  [42] [65‑66] [68] [72‑73]

The preconditions of federal paramountcy are met, however, and the ratepayers’ application should be dismissed on that ground. First, there is a valid and applicable federal law, namely the Canada Marine Act .  Its land use plan and policies and procedures must be construed in light of the scope of the federal power. The only source of federal power relevant to the Lafarge project lands is the navigation and shipping power. The whole of the Lafarge project on the VPA’s Schedule C lands is sufficiently “integrated” into the ship/barge unloading facility to make federal law applicable to all aspects of it. Second, there is a valid and applicable provincial law. The City’s zoning and development by‑law is a valid expression of provincially authorized legislative power. The land use controls are laws of general application that are not aimed at navigation and shipping. Third, these two valid laws are incapable of simultaneous enforcement:  there is an operational conflict in this case because a judge could not have given effect to both the federal law and the municipal law.  The record confirms areas of conflict relating to a height restriction, and to noise and pollution standards.  To apply the relevant municipal law in these areas would frustrate the federal purpose by depriving the VPA of its final decisional authority on the development of a project that both the City and the VPA have considered to be primarily shipping‑related in respect of matters that fall within the legislative authority of Parliament.  [75] [77-81] [85]

Per Bastarache J.:  The appeal should be dismissed solely on a proper application of the doctrine of interjurisdictional immunity in the context of Parliament’s power over navigation and shipping.  Although this doctrine has been criticized, its critics have not successfully demonstrated why it should be abandoned.  Without it, there would be no remedy permitting a provincial law to be read down in such a way as to be inapplicable to a federal matter while continuing to be applicable to other, non‑federal matters.  There would also be no way to prevent the improper application of an otherwise valid provincial law to a federal matter in situations where there is no competing federal law. [93] [103] [107]

The doctrine of interjurisdictional immunity is about jurisdiction: what matters is whether a valid provincial law “affects” the core of a federal head of legislative power.  The test for immunity should therefore be focussed not on a specific activity or operation and on whether that activity or operation is immune from the provincial law; rather, its focus should be on whether the federal power in question is immune from the application of the provincial law.  Because of this focus on jurisdiction rather than on an action, there need not be any federal legislation or executive action “occupying the field” for federal immunity to be triggered in an area under federal legislative authority.  The mere fact that a provincial law or a municipal by‑law “affects” a vital part of an area under exclusive federal jurisdiction is enough to render it inapplicable to a federal undertaking.  The meaning of the word “affects” should not be interpreted as requiring complete paralysis of the core of the federal power or the operations of the undertaking; rather, to trigger immunity, the impact of the application of the provincial law must be sufficiently severe and serious.  [109‑110] [139]

Here, the City’s by‑law is valid provincial legislation of general application.  Its pith and substance is in relation to the regulation of land use planning and development for property situated within the City.  The application of the by‑law does not invade Parliament’s exclusive legislative jurisdiction over “public property”, because the lands in question do not constitute “public property” within the meaning of s. 91(1A) of the Constitution Act, 1867  and therefore do not enjoy federal immunity from the application of the municipal by‑law on that basis.  Since the immunity at the heart of s. 91(1A) is based on a proprietary interest, the relevant test for determining whether lands constitute public property for the purposes of that section is whether there is evidence that the federal Crown has a sufficient proprietary interest in them.  Thus, when a Crown corporation owns or holds land other than as a Crown agent, there must be some element of ownership by the federal Crown for it to receive constitutional immunity from provincial land use laws and regulations.  On the facts of this case, the Crown has not established a proprietary interest in the lands that would be sufficient to justify federal immunity on the basis of s. 91(1A).  The lands in question are listed in Schedule C of the VPA’s letters patent, and it is clear that Parliament explicitly chose to exclude Schedule C lands from the definition of federal lands and lands held in the name of the Crown by Crown agents.  In including the lands in Schedule C, Parliament renounced any proprietary interest in them.  The lands are held by the VPA in its own name, and not for the benefit of the Crown.  [115] [119] [123-125]

The City’s by‑law is constitutionally inapplicable by reason of federal immunity in respect of the core of the navigation and shipping power under s. 91(10)  of the Constitution Act, 1867 .  The core of the s. 91(10) power necessarily extends to and includes the power to regulate land use planning and development for port lands in support of port operations.  This provides the necessary link to navigation and shipping in order to trigger federal immunity, and it flows from the inclusion of ports and harbours generally within the federal power over navigation and shipping and, more specifically, from the inclusion of land use planning and development activities and decisions by port authorities in respect of port lands when such activities and decisions have a sufficient connection to navigation and shipping.  The s. 91(10) power must also include and extend to federally regulated port authorities such as the VPA, whose creation, role and mandate are undeniably at the core of Parliament’s legislative authority over navigation and shipping insofar as their operations and functions are performed in support of port operations.  The decision to recognize or deny federal immunity should not be based solely on whether the parcel of port lands in question is to be used directly for “port activities” or merely “in support of” port operations, and on fears that certain uses of the latter category would appear to be somehow less closely connected to shipping and navigation.  The regulation of land use planning and development for all port lands lies at the core of s. 91(10).  So long as that regulation function is performed properly according to the federal undertaking’s terms and mandate and is concerned with port lands for activities in support of port operations (at a minimum), or directly for port activities, the specific status of a particular parcel of port lands and its specific intended use should not matter.  Specific uses of land are relevant to the immunity analysis only to the extent that they might reflect an improper exercise of the core federal power over the regulation of land use for port lands.  Here, under the Canada Marine Act , Schedule C lands have been deemed to be “necessary to support port operations”, and the VPA’s decision to approve the Lafarge project on such lands was consistent with a valid exercise of its power to regulate land use planning for port lands in support of port operations.  Although certain aspects of the project, taken on their own and in isolation, may appear to be only loosely connected with shipping and navigation activities or operations, the project “supports” port operations given that its ultimate objective is to enhance competitiveness and commercial viability.  Since the City’s by‑law clearly and significantly affects the VPA’s regulation of land use planning for port lands in support of port operations by imposing a zoning regime and an approval process for development proposals and projects on such lands, the by‑law is inapplicable because it affects a vital part of the federal power over navigation and shipping.  [127] [130-131] [136] [138] [140] [142]

Cases Cited

By Binnie and LeBel JJ.

Followed:  Canadian Western Bank v. Alberta, [2007] 2 S.C.R. 3, 2007 SCC 22; referred to: OPSEU v. Ontario (Attorney General), [1987] 2 S.C.R. 2; ITO—International Terminal Operators Ltd. v. Miida Electronics Inc., [1986] 1 S.C.R. 752; Montreal (City of) v. Montreal Harbour Commissioners, [1926] 1 D.L.R. 840; Cardinal v. Attorney General of Alberta, [1974] S.C.R. 695; Hamilton Harbour Commissioners v. City of Hamilton (1976), 21 O.R. (2d) 459, aff’d (1978), 21 O.R. (2d) 491; Canadian Dredge & Dock Co. v. The Queen, [1985] 1 S.C.R. 662; Greater Toronto Airports Authority v. Mississauga (City) (2000), 50 O.R. (3d) 641, leave to appeal refused, [2001] 1 S.C.R. ix; Bell Canada v. Quebec (Commission de la santé et de la sécurité du travail), [1988] 1 S.C.R. 749; Reference re Industrial Relations and Disputes Investigation Act, [1955] S.C.R. 529; Construction Montcalm Inc. v. Minimum Wage Commission, [1979] 1 S.C.R. 754; Spooner Oils Ltd. v. Turner Valley Gas Conservation Board, [1933] S.C.R. 629; Greater Toronto Airports Authority v. Mississauga (City) (1999), 43 O.R. (3d) 9; Coyne v. Broddy (1887), 13 O.R. 173; R. v. Ontario Labour Relations Board, Ex parte Ontario Food Terminal Board (1963), 38 D.L.R. (2d) 530; Westeel‑Rosco Ltd. v. Board of Governors of South Saskatchewan Hospital Centre, [1977] 2 S.C.R. 238; Halifax (City of) v. Halifax Harbour Commissioners, [1935] S.C.R. 215; Nova Scotia Power Inc. v. Canada, [2004] 3 S.C.R. 53, 2004 SCC 51; R. v. Eldorado Nuclear Ltd., [1983] 2 S.C.R. 551; Queddy River Driving Boom Co. v. Davidson (1883), 10 S.C.R. 222; Attorney‑General for Ontario v. Winner, [1954] A.C. 541; Johannesson v. Rural Municipality of West St. Paul, [1952] 1 S.C.R. 292; Re Orangeville Airport Ltd. and Town of Caledon (1976), 11 O.R. (2d) 546; Monk Corp. v. Island Fertilizers Ltd., [1991] 1 S.C.R. 779; Whitbread v. Walley, [1990] 3 S.C.R. 1273; Zavarovalna Skupnost Triglav v. Terrasses Jewellers Inc., [1983] 1 S.C.R. 283; Canadian Pacific Railway Co. v. Attorney‑General of British Columbia, [1948] S.C.R. 373, aff’d [1950] A.C. 122; Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161; Rothmans, Benson & Hedges Inc. v. Saskatchewan, [2005] 1 S.C.R. 188, 2005 SCC 13; Law Society of British Columbia v. Mangat, [2001] 3 S.C.R. 113, 2001 SCC 67; Bank of Montreal v. Hall, [1990] 1 S.C.R. 121; Re Sturmer and Town of Beaverton (1911), 24 O.L.R. 65; M & D Farm Ltd. v. Manitoba Agricultural Credit Corp., [1999] 2 S.C.R. 961.

By Bastarache J.

Referred to:  Paul v. British Columbia (Forest Appeals Commission), [2003] 2 S.C.R. 585, 2003 SCC 55; Commission du salaire minimum v. Bell Telephone Co. of Canada, [1966] S.C.R. 767; Bell Canada v. Quebec (Commission de la santé et de la sécurité du travail), [1988] 1 S.C.R. 749; Irwin Toy Ltd. v. Quebec (Attorney General), [1989] 1 S.C.R. 927; Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161; 114957 Canada Ltée (Spraytech, Société d’arrosage) v. Hudson (Town), [2001] 2 S.C.R. 241, 2001 SCC 40; Hamilton Harbour Commissioners v. City of Hamilton (1976), 21 O.R. (2d) 459, aff’d (1978), 21 O.R. (2d) 491; Construction Montcalm Inc. v. Minimum Wage Commission, [1979] 1 S.C.R. 754; Greater Toronto Airports Authority v. Mississauga (City) (2000), 50 O.R. (3d) 641; Holman v. Green (1881), 6 S.C.R. 707; Whitbread v. Walley, [1990] 3 S.C.R. 1273; Reference re Waters and Water‑Powers, [1929] S.C.R. 200; Air Canada v. Ontario (Liquor Control Board), [1997] 2 S.C.R. 581.

Statutes and Regulations Cited

Canada Marine Act , S.C. 1998, c. 10 , ss. 2(1)  “federal real property”, “port facility”, 5 “port”, 7(1), 8(2), 23(1), (2), 28(2), (3), (5), 31(3), 46(1), (2), 48.

Constitution Act, 1867 , ss. 91 , 91 (1A), (9), (10), (11), 92, 92(8), (10), (13), (16).

Federal Real Property and Federal Immovables Act , S.C. 1991, c. 50 , s. 2 .

Payments in Lieu of Taxes Act , R.S.C. 1985, c. M-13 .

Authors Cited

Bakan, Joel, et al., eds. Canadian Constitutional Law, 3rd ed. Toronto:  Emond Montgomery, 2003.

Braën, André.  Le droit maritime au Québec.  Montréal:  Wilson & Lafleur, 1992.

Canada.  House of Commons.  A National Marine Strategy.  Report of the Standing Committee on Transport, 1995.

Canada.  House of Commons.  House of Commons Debates, vol. 135, 1st Sess., 36th Parl., October 10, 1997, p. 766.

Elliot, Robin M.  “Constitutional Law—Division of Powers—Interjurisdictional Immunity, Reading Down and Pith and Substance:  Ontario Public Service Employees Union v. Attorney‑General for Ontario” (1988), 67 Can. Bar Rev. 523.

Gibson, Dale.  “Constitutional Law—Freedom of Commercial Expression under the Charter—Legislative Jurisdiction over Advertising—A Representative Ruling:  Attorney General of Quebec v. Irwin Toy Limited” (1990), 69 Can. Bar Rev. 339.

Gibson, Dale.  “Interjurisdictional Immunity in Canadian Federalism” (1969), 47 Can. Bar Rev. 40.

Hogg, Peter W.  Constitutional Law of Canada, 2nd ed.  Toronto:  Carswell, 1985.

Hogg, Peter W.  Constitutional Law of Canada, vol. 1, loose‑leaf ed.  Scarborough, Ont.:  Carswell, 1997 (updated 2005, release 1).

Hogg, Peter W., and Patrick J. Monahan.  Liability of the Crown, 3rd ed.  Scarborough, Ont.:  Carswell, 2000.

La Forest, Gérard V.  Natural Resources and Public Property under the Canadian Constitution.  Toronto:  University of Toronto Press, 1969.

Leclair, Jean.  “L’étendue du pouvoir constitutionnel des provinces et de l’État central en matière d’évaluation des incidences environnementales au Canada” (1995), 21 Queen’s L.J. 37.

Leclair, Jean.  “The Supreme Court of Canada’s Understanding of Federalism:  Efficiency at the Expense of Diversity” (2003), 28 Queen’s L.J. 411.

Magnet, Joseph Eliot.  Constitutional Law of Canada:  Cases, Notes and Materials, vol. 1, 8th ed.  Edmonton:  Juriliber, 2001.

Monahan, Patrick J.  Constitutional Law, 2nd ed.  Toronto:  Irwin Law, 2002.

Shorter Oxford English Dictionary on Historical Principles, 5th ed.  Oxford:  Oxford University Press, 2002, “essential”, “support”, “vital”.

Wilkins, Kerry.  “Of Provinces and Section 35 Rights” (1999), 22 Dal. L.J. 185.

APPEAL from a judgment of the British Columbia Court of Appeal (Finch C.J.B.C. and Mackenzie and Thackray JJ.A.) (2004), 26 B.C.L.R. (4th) 263, 194 B.C.A.C. 78, 317 W.A.C. 78, 237 D.L.R. (4th) 466, 44 M.P.L.R. (3d) 169, [2004] 7 W.W.R. 27, [2004] B.C.J. No. 355 (QL), 2004 BCCA 104, reversing a decision of Lowry J. (2002), 32 M.P.L.R. (3d) 205, [2002] B.C.J. No. 2245 (QL), 2002 BCSC 1412.  Appeal dismissed.

Nancy E. Brown and Nathalie Hepburn Barnes, for the appellant.

James Sullivan and Gloria Chao, for the respondent Lafarge Canada Inc.

D. Geoffrey Cowper, Q.C., and W. Stanley Martin, for the respondent the Vancouver Port Authority.

No one appeared for the respondent the Burrardview Neighbourhood Association.

Patsy J. Scheer, for the respondent the City of Vancouver.

Peter M. Southey, for the intervener the Attorney General of Canada.

Shaun Nakatsuru and Mark Crow, for the intervener the Attorney General of Ontario.

Alain Gingras, for the intervener the Attorney General of Quebec.

Written submissions only by John G. Furey, for the intervener the Attorney General of New Brunswick.

Robert J. Normey and Nick Parker, for the intervener the Attorney General of Alberta.

The judgment of Binnie, LeBel, Deschamps, Fish, Abella and Charron JJ. was delivered by

1                                   Binnie and LeBel JJ. _ Vancouver possesses by far the busiest port in Canada, and its vast operations constitute not only a vital part of the shipping and transportation industry but generate economic activity, commercial opportunities and environmental concerns for the eight surrounding municipalities.  Changing land use patterns and more efficient modern shipping methods (containerization, for example) have released stretches of waterfront for other types of development.  Vancouver’s original Coal Harbour is now a forest of luxury hotels and high-priced condominiums.  Elsewhere smokestacks have given way to parkland.  Warehouses have been converted into trendy office buildings.  Yet shipping activities flourish.  The realities of mixed transportation/industrial/commercial/residential development along urban waterfronts pose a challenge to the venerable “watertight compartments” division of federal legislative jurisdiction over navigation and shipping, on the one hand, and provincial jurisdiction over property and civil rights on the other.  How to give practical effect in the harbour context to the exercise of these potentially conflicting legislative and regulatory powers is the central question posed by this litigation.

2                                   The immediate controversy is the proposal by the respondent Lafarge Canada Inc. to build an “integrated” ship offloading/concrete batching facility in the east harbour area on what is known as the Sterling Shipyard site.  Aggregate is to be barged in by sea from the Sunshine Coast, offloaded, stored temporarily in silos on the waterfront, then mixed with cement, and thereafter dispatched to various construction sites, particularly within downtown Vancouver.  Some material like cement is to be trucked in.  The mixing component of the facility is described as a “twin batch plant” because the ingredients can either be tumbled on site (“wet mix”) and then loaded and dispatched, or loaded in their original state (“dry mix”) with water added in the rotating drums of concrete trucks.  In the latter situation, the ingredients are churned into concrete on the way to a construction site.  The respondents contend that as a matter of fact the “twin batch plant” will be integrated into the marine unloading facility.

3                                   The two levels of government are in agreement that the Lafarge project reflects good planning principles, but objection is taken by the Burrardview Neighbourhood Association (the “Ratepayers”).  Their legal argument, advanced in this Court by the provincial attorneys general, is that the City ought to have insisted that Lafarge obtain a City development permit.  The respondent, Vancouver Port Authority (“VPA”), replies that as a matter of law no City permit is necessary because VPA lands enjoy interjurisdictional immunity as federal “public property” within the meaning of s. 91(1A) of the Constitution Act, 1867 , or their management is vital to the VPA’s  “federal undertaking” pursuant to the federal s. 91(10) jurisdiction over “navigation and shipping”.  In either case, the VPA says provincial land use controls are rendered inoperative.  In the alternative, the respondents say, there is operational conflict between the federal land use controls and provincial land use controls, and the conflict, according to the doctrine of federal paramountcy, must be resolved in favour of federal jurisdiction.

4                                   For the reasons we gave in Canadian Western Bank v. Alberta, [2007] 2 S.C.R. 3, 2007 SCC 22, released concurrently, we agree with the approach outlined by the late Chief Justice Dickson in OPSEU v. Ontario (Attorney General), [1987] 2 S.C.R. 2, at p. 18, in which he characterized the arguments for interjurisdictional immunity as not particularly compelling, and concluded that they ran contrary to the “dominant tide” of Canadian constitutional jurisprudence.  In particular, in our view, the doctrine should not be used where, as here, the legislative subject matter (waterfront development) presents a double aspect.  Both federal and provincial authorities have a compelling interest.  Were there to be no valid federal land use planning controls applicable to the site, federalism does not require (nor, in the circumstances, should it tolerate) a regulatory vacuum, which would be the consequence of interjurisdictional immunity.  On the facts, however, there is valid and applicable federal legislation which is in conflict, both in its operation and in its purpose, with the provincial land use legislation and regulations adopted under its authority.  The appeal is thus easily resolved in favour of the VPA on the basis of federal paramountcy.  The British Columbia Court of Appeal rejected the Ratepayers’ challenge and, for somewhat different reasons, we agree with its conclusion.

5                                   The appeal should therefore be dismissed.

I.  Facts

6                                   Vancouver harbour, for navigational purposes, is defined as a stretch of 233 kilometres of coastline from Roberts Bank near the U.S. border through Sturgeon Bank, English Bay, and Burrard Inlet to Port Moody.  The VPA claims proprietary jurisdiction over 150 kilometres of shoreline.  Within Burrard Inlet, the VPA is responsible for approximately 6,000 hectares of seabed and 460 hectares of “upland” (i.e. mostly reclaimed waterfront land).

7                                   The VPA has adopted a Port Land Use Management Plan (June 1994) (called “Port 2010”) whose “strategic rationale” is set out in part as follows:

. . . the port is situated within an urban region which is also experiencing significant growth.  Accordingly, there is a need to effectively plan the interface of these two dynamics.  [p. 2]

8                                   Port 2010 includes adjacent municipalities in its definition of “stakeholders” (p. 12) and acknowledges that

VPC [predecessor to the VPA] will need to work with the municipalities and communities to establish compatible land use plans that support a viable working waterfront.  [p. 20]

9                                   The provincial assessment authority has effectively exempted from local taxes the Sterling Shipyard site and other port lands by assessing them at “nil” for municipal and provincial taxation purposes, although some monies are paid to the municipalities pursuant to the federal  Payments in Lieu of Taxes Act , R.S.C. 1985, c. M-13 .

10                               The City’s Central Waterfront Official Development Plan (which was adopted by By-law No.  5261, June 19, 1979) states that: “It is recognized that in order to realize the City’s basic objectives, full co-operation will be needed from the various waterfront property owners and authorities.  The objectives of the different owners must be clearly understood by the City and must be respected in the planning of the Central Waterfront” (p. 4). Further, the City’s statement of planning policies continues:

The [VPA], which is a federal agency, is a major owner of the land, foreshore and water area of the Central Waterfront.  The [VPA] provides vital port functions to the Vancouver Harbour, as well as the region.  Such existing port functions should continue to operate effectively in the Central Waterfront.  The development of urban uses on [VPA] property should be compatible with essential port functions.

The City recognizes that the [VPA], being a Crown Agency, has control over the uses of its property for port and other functions which are largely port-related and are compatible in character to the area, and is not legally bound by the City’s development regulations.  However, [VPA] officials have clearly indicated to the City that they would endeavour to co-operate in achieving City objectives as long as port functions and future port development objectives are not jeopardized.  [p. 4]

11                               For some years, Lafarge has been attempting to find a suitable waterfront site for a new facility.  A previous proposal had also been opposed by ratepayer groups and been rejected by the VPA’s Project Advisory Committee because it was incompatible with existing land uses in the area.  In August 2001, Lafarge submitted for approval its present project to be built on land acquired by the VPA the previous year from the City.  The site had for many years been used for shipping and industrial purposes.  It is physically separated from residential and commercial uses to the south by a transportation corridor that includes roads and four sets of railway tracks.  The City had initially planned to put its own asphalt plant on the site.  From the City’s planning perspective, the project land lies within the area of Vancouver subject to By-law No. 6718, Burrard Waterfront, enacted August 28, 1990, and zoned CD-1 which allows a concrete batch plant. 

12                               In 1998, the City had entered into a protocol (called a “Charter”) with the VPA which recited in part that “the Port occupies a major proportion of the waterfront lands in the City of Vancouver, and . . . the [City] provides municipal services and access, essential to the effective operation of the port, and manages development adjacent to the port”.  The protocol continues “the City and the . . . Port . . . are both committed to the economic development of the region, the provision of jobs, the efficient movement of goods and people, and the maintenance and enhancement of the environment [and] acknowledge the importance of each to the other, and the necessity for a good working relationship between the two bodies” (A.R., at p. 341).  They agreed to “work together . . . ensuring that development on Port lands is compatible with both the economic development of the Port and the interests of the City . . . ensuring that development in the City is compatible with the economic development of the Port and the interests of the City [and] ensuring effective public consultation” (A.R., at p. 341).

13                               A policy of Port 2010 is to promote “marine-related” port uses, and the Lafarge project was determined by the VPA (and the City) to qualify as such, stating:

Lafarge’s proposed use of the property includes the barging of aggregate to site.  This marine activity is a critical component of their proposed operations.  With respect to the batch plant itself, this is essentially a processing operation.  There are many examples of processing activities that are permitted on port lands; fish processing plants, grain handling terminals, and a rendering plant, are a few such examples. [A.R., at p. 345]

14                               The Ratepayers opposed the Lafarge plant on the Sterling Shipyard site on a number of grounds, including concerns about increased air and noise pollution, truck traffic, loss of trees and visual obstruction of the residents’ view over the harbour.  They noted that part of the facility would exceed the City’s 30-foot height restriction.  By letter dated January 31, 2002, the Ratepayers demanded that the City assert jurisdiction over the “twin plant” component of the Lafarge project.  Underlying the Ratepayers’ position, it is fair to say, was the belief that elected City politicians would likely be more amenable to ratepayer interests than would be the appointed Board of Directors of the VPA.

15                               The Lafarge proposal was referred to the City for comment and considered by its Urban Design Panel, which includes design professionals, architects, landscape architects, professional engineers and representatives of the development industry.  Its role is to advise the City on significant development proposals.  On November 14, 2001, despite Ratepayers’ opposition, the Urban Design Panel gave its support to the Lafarge proposal by a vote of 7 to 1.

16                               On March 4, 2002, the Lafarge proposal was considered by the City’s Development Permit Board, which heard comments from City staff, representatives of the Vancouver Coastal Health Authority, the VPA, Lafarge, and 37 members of the public.  Some ratepayers expressed opposition.  In the end, the Development Permit Board supported the Lafarge proposal, subject to recommending certain modifications with respect to exterior colour, signage, retention of trees, and noise abatement.  On March 13, 2002, the City wrote to the VPA indicating approval, subject to the stated modifications.

17                               The VPA, in the meantime, had followed its own procedure of internal and external consultation pursuant to its Guide To Project Approvals In Port Vancouver.  The VPA’s “Public Review Process” included public meetings and reports from technical advisors retained by the VPA who addressed issues of air quality and noise abatement.  The Burrard Environmental Review Committee (comprised of various provincial and federal environmental agencies) also filed a report.  These reports were considered by the VPA along with comments and advice from the City and input from the public at a public meeting and through written submissions.

18                               On May 27, 2002, the Vice-President of the Ratepayers wrote the Mayor threatening to sue him personally for damages if the City of Vancouver did not assert  jurisdiction over the “twin plant” component of the Lafarge project:

Pursuant to Section 208 of the Vancouver Charter, the Mayor’s duties are to enforce the law for government of the City and “to be vigilant and active at all time in causing the law for the government of the City to be duly enforced and obeyed”.  I do not believe the conduct of the Staff has assisted the Mayor in being either vigilant or active in ensuring the bylaws are enforced.

                                                                   . . .

In spite of my personal, positive opinion as to your abilities as Mayor, I feel compelled to tell you that one of the results may be that, in the event that our application to Court is successful, the [Ratepayers] may seek damages or other compensation from you, personally, arising from Section 208.

                                                                   . . .

It may well be that the position adopted by the Staff and your personal obligations are not the same. [A.R., at p. 874] 

19                               On July 8, 2002, the VPA issued its Approval in Principle of the Lafarge proposal, subject to certain additional requirements, including satisfactory resolution of the Ratepayers’ challenge over land use jurisdiction.  Mr. James P. Crandles, the Director of Port Development testified that the Lafarge project was acceptable because “the marine transportation of aggregate rock, as integrated into the processing of that aggregate rock, is ‘a process related to shipping’.  Further, it is consistent with joint transportation-processing-manufacturing practices in other long-term Port of Vancouver industries.  Finally, it realizes Policy 2.1 of the Plan, supporting port service industries reliant on waterfront access” (A.R., at p. 412).

The Ratepayers’ Application

20                               On April 5, 2002, prior to the VPA’s Approval in Principle, the Ratepayers filed a petition in the Supreme Court of British Columbia objecting that the City had “declined to exercise jurisdiction over the Lands to require Lafarge to obtain a valid development permit as required by the City’s by-laws before any development on the Lands is undertaken” (A.R., at p. 122) and seeking an order

directing the Respondent, City of Vancouver (“City”), to enforce the provisions of its zoning and development by-law no. 3575 (the “By-law”) with respect to the Lands as defined herein and any development by the Respondent, Lafarge Canada Inc. (“Lafarge”) of a concrete batch plant or related facility to be constructed on the Lands, in particular, the mandatory By-law requirement that Lafarge obtain a valid development permit before any such development is undertaken; [A.R., at p. 119]

The Ratepayers also sought ancillary injunctive and declaratory relief.

II.      Judicial History

A.      Supreme Court of British Columbia (2002), 32 M.P.L.R. (3d) 205, 2002 BCSC 1412

21                               Lowry J. accepted the VPA’s formulation of the constitutional issues as follows (at para. 18):

1.    Is the land that is the subject of the proposal public property of Canada as contemplated by s. 91(1A) of the Constitution Act, 1867  such that municipal land use and planning laws have no application?

2.    Does the proposed use of the land fall within exclusive federal power to legislate in respect of navigation and shipping under s. 91(10)  of the Constitution Act, 1867  such that the Port Authority can be authorized to lease the land thereby rendering the City by-law inapplicable?

3.    Does this court have jurisdiction to determine whether the Port Authority has been authorized to lease the land for the proposed purpose and, if so, does the Port Authority have that authority?

(We note parenthetically that the VPA’s third issue seems unresponsive to the Ratepayers’ application to have the City ordered to exercise its land use jurisdiction, because the third issue switched the focus to the exercise by the VPA (not the City) of its statutory jurisdiction, which in any event the chambers judge declined to deal with.) 

22                               As to s. 91(1A) of the Constitution Act, 1867 , the chambers judge concluded that the VPA in acquiring and leasing the lands to Lafarge was not acting as an agent of the Crown and, therefore, the lands were not “public property”:

The scheme of the Canada Marine Act  gives a port authority a degree of local autonomy.  It is to perform port activities as an agent of the federal Crown and other activities that are deemed necessary to support the operation of the port on its own behalf.  Its management of “federal real property” is performed as an agent; its management of “other property” is not. [para. 39]

23                               Turning to the issue of whether the Lafarge proposal falls within the exclusive federal power to legislate in respect of navigation and shipping under s. 91(10)  of the Constitution Act, 1867 , Lowry J. adopted a “necessity” test, and ruled:

I consider that, even construed broadly, navigation and shipping cannot extend beyond land-based operations that are incidental in the sense of being necessary to marine transport.  Aggregate that is carried by sea must, like all marine cargo, be offloaded and it may have to be stored short-term before it is delivered from the dock.  However, it does not have to be mixed with other ingredients and made into concrete.  That may be related to the carriage in that it is the reason for the transport, but it is not necessary for the transport to be performed.

. . . A marine facility may well be commercially desirable for the efficient operation of a batch plant, but that does not mean that a plant that makes concrete is necessary to the operation of a marine facility. [Emphasis added; paras. 51-52.]

24                               Lowry J. granted the Ratepayers’ application and made a declaration that the VPA was without jurisdiction to approve the Lafarge project.

B.      Court of Appeal for British Columbia (Finch C.J.B.C. and Mackenzie and Thackray JJ.A.) (2004), 26 B.C.L.R. (4th) 263, 2004 BCCA 104

25                               Finch C.J.B.C. disagreed with the chambers judge’s conclusions on the two constitutional grounds.  With respect to whether the site was “public property” for the purposes of s. 91(1A) of the Constitution Act, 1867 , Finch C.J.B.C. concluded, at para. 77:

The finding that a statutory body is not a Crown agent should not lead inevitably to the conclusion that the lands that body holds are not “public property”.

In his view, the degree of control exercised by the federal government over the VPA was sufficient to constitute all VPA lands as federal “public property” for constitutional purposes, and therefore its use is immune from provincial/municipal regulation.

26                               Finch C.J.B.C. also expressed the view that the development proposal for the site fell within the exclusive legislative jurisdiction granted to Parliament under s. 91(10) over navigation and shipping.  Finding that the chambers judge had applied the wrong test, he stated that “[t]he test is not the necessity of a concrete batch plant to navigation and shipping, but rather whether the application of the City’s Bylaw to regulate the development of port lands would affect a vital aspect of the federal power over navigation and shipping” (para. 96).  He went on to explain:

I agree with the submissions of the Port Authority and Lafarge that the Port Authority requires the flexibility to adapt its land uses to the changing needs of its customers and the surrounding community.  The ability to control the use of port lands adjacent to the harbour ensures that marine access is maintained and that industries compatible with port uses are served.  The Port Authority’s power to control its own land also ensures consistency rather than a checkerboard of regulation by different municipalities.  Integrated land-use planning and control are essential to the continued strength and competitiveness of the Port of Vancouver.  [para. 107]

27                               Having concluded that compliance with the City by-law would impermissibly affect a vital federal shipping function, Finch C.J.B.C. declared the by-law to be inapplicable to the proposed development.  The appeal was allowed, the order of the chambers judge set aside, and the Ratepayers’ petition was dismissed.

28                               Mackenzie and Thackray JJ.A. agreed with Finch C.J.B.C. that the lands were “public property” within the meaning of s. 91(1A) of the Constitution Act, 1867 , but did not find it necessary to address the alternative ground of federal jurisdiction over navigation and shipping.

III.     Statutory Authorities

29                               The statutory authorities are cited in the Appendix.

IV.    Constitutional Questions

30                               On January 26, 2005, the Chief Justice stated the following constitutional questions:

1.    Is the City of Vancouver Zoning and Development Bylaw No. 3575 constitutionally inapplicable to property, with a legal description of Parcel P, Block 17, Plan LMP 47343, District Lot 184 and the Public Harbour of Burrard Inlet (the “Property”), held by the Vancouver Port Authority, on the basis that the Property is “public property” within the meaning of s. 91(1A) of the Constitution Act, 1867 ?

2.    Is the City of Vancouver Zoning and Development Bylaw No. 3575 constitutionally inapplicable to the proposed development on the Property in view of Parliament’s legislative authority over “navigation and shipping” under s. 91(10)  of the Constitution Act, 1867 ?

V.      Analysis

31                               Harbours, as with railways and airports, present difficult land use planning problems.  The framers of the Constitution Act, 1867 , seeking to unify the several colonies into a single country, logically placed the lines of interprovincial communication and transportation in federal hands.  Yet transportation has a dramatic impact on land use, and land use is inherently local. Transportation facilities do not exist for their own sake but to serve the needs of the economy and the local communities that depend upon an efficient network for the movement of people and goods.  On the other hand, there is a mutual self-interest linking the federally regulated transportation systems and the communities they serve, as is recognized both in the VPA’s Port 2010 plan and in the City’s Central Waterfront Official Development Plan, already discussed.

32                               The Attorney General of British Columbia argues that when engaged in activities that are merely “supportive” of shipping and navigation, as by promoting waterfront development that will (incidentally) generate waterborne transportation business (as in the hypothetical case of the dockside car assembly plant mentioned by the chambers judge), the VPA is operating outside federal jurisdiction and must comply with City by-laws like any other waterfront developer, such as those who put up waterfront condominium residences.

33                               The respondent VPA, supported by the City, says that this approach understates the federal interest identified by the Court of Appeal including:

1.    the Crown’s ultimate “ownership” or control of all VPA lands, including lands held by the VPA in its own name, and

2.    the VPA’s role as exclusive regulator of shipping and navigation activities, a federal power that has traditionally been construed broadly.

34                               The VPA is particularly concerned about its ability to function effectively if required to deal in development matters with the eight different municipalities that border the harbour.  Lafarge, for its part, points out that it has done what the City and the VPA asked it to do, and is now in its eleventh year of seeking to bring a waterfront project to fruition and its fifth year of litigation, with no project implementation in sight.

35                               Whether or not a particular activity is “integral” to the exercise of a federal head of legislative power, or is “sufficiently linked” to validate federal regulation, is essentially a factual inquiry.  ITO—International Terminal Operators Ltd. v. Miida Electronics Inc., [1986] 1 S.C.R. 752, held that dockside unloading and storage operations are “integral” to shipping, as would be loading trucks to remove the cargo from the port.  The wharves would otherwise become so congested as to cease to operate. The law favours unified regulation of integrated facilities.  Insistence on bright jurisdictional lines within what the City and the VPA considered to be a continuous transportation-based project would encourage regulatory conflict and dampen entrepreneurial activity in the port area that both the City and the VPA agree would comply with good planning principles. 

A.      Constitutional Overview

36                               There is no separate head of legislative power over “ports”.  The federal government enjoys exclusive jurisdiction in relation to its public property and over shipping and navigation activities.  The province exercises jurisdiction over “property and civil rights” and “municipal institutions” within the province but it has, of course, been long recognized that the power to control navigation and shipping conferred by s. 91(10) is “capable of allowing the Dominion Parliament to restrict very seriously the exercise of proprietary rights”:  Montreal (City of)  v. Montreal Harbour Commissioners, [1926] 1 D.L.R. 840 (P.C.), at pp. 848-49, per Viscount Cave L.C.

37                               The development of waterfront land could potentially fall under either provincial or federal jurisdiction, depending on the ownership and the use to which the land is proposed to be put.  Waterfront lands do not cease to be “within the province” by reason of their potential use for federally regulated activities (Cardinal v. Attorney General of Alberta, [1974] S.C.R. 695), but of course federal authority will be paramount to the provincial authority in cases of overlapping jurisdiction where there is a valid federal law and a valid provincial law applicable to different aspects of the proposed use and the two laws come into operational conflict.  In this respect, we agree, as did the Ontario Court of Appeal ((1978), 21 O.R. (2d) 491), with what was said by Griffiths J. (as he then was) in Hamilton Harbour Commissioners v. City of Hamilton (1976), 21 O.R. (2d) 459 (H.C.J.), at p. 484:

In my opinion, land-use control within a harbour has both provincial and federal aspects. . . . Only if conflict arises with respect to the use of a parcel of land within the limits of the harbour, will the paramountcy of the federal power cause the operation of the by-law of the City to be suspended.

38                               The potential for conflict in mixed land use development along urban waterfronts is considerable.  In Hamilton, bouts of litigation between the City and the Hamilton Harbour Commissioners over jurisdiction to regulate land use in the harbour area lasted almost as long as the Thirty Years War, beginning in the 1960s with the Hamilton harbour dredging scandal (whose criminal aspects were eventually dealt with in Canadian Dredge & Dock Co. v. The Queen, [1985] 1 S.C.R. 662).  More recently, the City of Mississauga, expressing frustration because its development procedures were being disregarded in the enlargement of Toronto’s Pearson Airport, threatened to withhold emergency fire services; see Greater Toronto Airports Authority v. Mississauga (City) (2000), 50 O.R. (3d) 641 (C.A.), leave to appeal refused, [2001] 1 S.C.R. ix.  On the other hand, as the now virtually abandoned airport at Mirabel and the aborted mega-airport project at Pickering show, the federal ability to implement transportation infrastructure without provincial cooperation is seriously circumscribed.  Federal-provincial-municipal cooperation in such matters is not unconstitutional.  It is essential.

39                               It is worth recalling in this connection the plea for cooperation expressed by Houlden J.A. when one of the pitched battles in the Hamilton Harbour Commissioners litigation was before the Ontario Court of Appeal:

We are certain that both the [Hamilton Harbour Commissioners] and the city are desirous that this important harbour and the land surrounding it are properly developed and controlled.  The extensive litigation between the plaintiff and the city, which has culminated in this appeal, is, in our opinion, unnecessary and futile.  It is our hope that the parties will now be able to resolve their differences by amicable agreement so that further litigation can be avoided and their common objective accomplished. [p. 491]

40                               It seems to us that this approach is mirrored in the 1998 protocol (Charter) made between the City of Vancouver and the VPA, and in their respective land use plans, previously referred to.  It remains to be seen of course whether what was done complies with the Constitution.

B.      The Scope of Interjurisdictional Immunity

41                               As discussed in Canadian Western Bank, there are circumstances in which the powers of one level of government must be protected against intrusions, even incidental ones, by the other level (para. 32).  This is called interjurisdictional immunity and is an exception to the ordinary rule under which legislation whose pith and substance falls within the jurisdiction of the legislature that enacted it may, at least to a certain extent, affect matters beyond the legislature’s jurisdiction without necessarily being unconstitutional (para. 26).  Thus a provincial Planning Act relating to pith and substance of “Municipal Institutions in the Province” (Constitution Act, 1867 , s. 92(8) ) and “Property and Civil Rights in the Province” (s. 92(13)) as well as “Matters of a merely local or private Nature” (s. 92(16)) would quite permissibly have “incidental effects” on matters within its scope that would otherwise fall within federal jurisdiction over navigation  and shipping, provided such “incidental effects” are not precluded from doing so by (i) the doctrine of interjurisdictional immunity or (ii) the operation of federal paramountcy.

42                               In this case, we are dealing with a federal undertaking, the VPA, constituted pursuant to two heads of federal legislative power, the authority in relation to public property (Constitution Act, 1867 , s. 91 (1A)) and the federal authority in relation to navigation and shipping (s. 91(10)).  In Bell Canada v. Quebec (Commission de la santé et de la sécurité du travail), [1988] 1 S.C.R. 749 (“Bell Canada (1988)”), the Court restricted interjurisdictional immunity to “essential and vital elements” of such undertakings (pp. 839 and 859-60).  In our view, as explained in Canadian Western Bank, Beetz J. chose his words carefully, and intended to use “vital” in its ordinary grammatical sense of “[e]ssential to the existence of something; absolutely indispensable or necessary; extremely important, crucial” (Shorter Oxford English Dictionary on Historical Principles (5th ed. 2002), at p. 3548).  The word “essential” has a similar meaning, e.g. “[a]bsolutely indispensable or necessary” (p. 860).  The words “vital” and “essential” were not randomly chosen.  The expression “vital part” was used in an earlier shipping case Reference re Industrial Relations and Disputes Investigation Act, [1955] S.C.R. 529 (the “Stevedoring” case), at p. 592.  What is “vital” or “essential” is, by definition, not co-extensive with every element of an undertaking incorporated federally or subject to federal regulation.  In the case of federal undertakings, that would include the VPA.  Beetz J. referred to a “general rule” that there is no interjurisdictional immunity, provided “the application of [the] provincial laws does not bear upon those [federal] subjects in what makes them specifically of federal jurisdiction” (Bell Canada (1988), at p. 762 (emphasis added)).

43                               The question before us, therefore, is whether it can be said that federal jurisdiction over all development on VPA lands within the port area of Vancouver, even non-Crown lands not used for shipping and navigation purposes, is “absolutely indispensable or necessary” to the discharge by the VPA of its responsibilities in relation to federal “public property” or “navigation and shipping”.  We concluded in Canadian Western Bank that interjurisdictional immunity is not essential to make these federal powers effective for the purposes for which they were conferred and therefore this appeal should be decided on the basis of federal paramountcy, not interjurisdictional immunity.

C.     The Role and Function of the Vancouver Port Authority

44                               In the reorganization of Canadian ports undertaken after the Great Depression of the 1930s, a distinction was drawn by Parliament between harbours of national importance (e.g. Halifax, Montreal, Vancouver) which were to be run by the National Harbours Board, a Crown agency, and those harbours of lesser significance (Toronto, Hamilton, Cobourg, Windsor, etc.) which were left with their own harbour commissions constituted by special federal statute, with Commissioners nominated in varying  proportions by the federal government and the local municipality.  As Finch C.J.B.C. rightly pointed out in the present case, the different types of harbour commissioners were subject to varying levels of federal control, and care must be taken in reading the earlier cases not to overgeneralize about their status (paras. 71-72).

45                               In 1998, Parliament again substantially reorganized the structure of federal harbours with the Canada Marine Act ,   S.C. 1998, c. 10  (“CMA ”).  Introduction of the CMA followed publication of a Report by the House of Commons Standing Committee on Transport which had observed:

[T]he [Local port corporations including Vancouver] have major concerns regarding the limitations placed on their present delegations of authority for contracts, leasing, real property acquisition or disposal, and independence within the federal structure.  It was pointed out that when government approval is required the process is cumbersome, complicated, and time-consuming to the point where some approvals have taken as long as two years.

(A National Marine Strategy (May 1995), at p. 6)

Thus the Minister of Transport assured Members of Parliament:

The revised act will consolidate and simplify maritime regulations, reduce red tape, and speed up commercial decision-making.  It will enable the ports to meet client needs more efficiently and to reduce the bureaucracy.  Overall, it will make our maritime sector competitive.

(House of Commons Debates, vol. 135, 1st Sess., 36th Parl., October 10, 1997, at p. 766)

46                               The general provisions of the CMA  are supplemented in the case of each designated port authority by Letters Patent, which took effect in the case of the VPA on March 1, 1999 (Canada Gazette, Part I, vol. 133, February 27, 1999 (Supplement), at p. 3).  The federal government appoints six of the nine directors of the VPA. Mr. James P. Crandles, the Director of Port Development, testified that the CMA  aimed at making Canadian ports “more efficient, less bureaucratic, and more responsive to the needs of local communities and customers.  It also made local ports more accountable, permitting them to perform acts, enter into contracts, and incur debts on their own without acting through the Federal government” (A.R., at p. 401).  To achieve this objective, Parliament authorized port authorities such as the VPA to engage as Crown agents in their traditional activities related to shipping, navigation, transportation of passengers and goods, handling of goods (s. 7(1)) to the extent that such activities are specified in the letters patent issued to each such port authority (s. 28(2)(a)).  At the same time, port authorities were authorized on their own behalf and not as Crown agent (s. 28(3)) to undertake “other activities that are deemed in the letters patent to be necessary to support port operations” (s. 28(2)(b)).  The verb “to support” is very broad and its ordinary grammatical meaning includes to “contribut[e] to the success of [an undertaking]” (Shorter Oxford English Dictionary on Historical Principles (5th ed. 2002), at p. 3119).  The VPA has adopted a very broad view of “support” including “indirect support”.  Port 2010, for example, includes in Policy 3.2.2, a justification for its “non-deep-sea marine operations”:

While the majority of these activities are not directly trade related, they indirectly support the port’s trade functions through rental revenue derived by VPC which is reinvested in terminals and other infrastructure. [Emphasis added; p. 15.]

Activities that “support” port operations (directly or indirectly) are not necessarily in themselves port operations and need not necessarily be of a shipping and navigation nature, provided they generate revenue for the development of the port as an economic entity.  To qualify as “support” in this sense is clearly not sufficient in our view to justify exclusive federal jurisdiction.

47                               As a good deal of argument was made before us about the different categories of VPA land and the potential implications for federal-provincial jurisdiction, it is necessary to review the legislative framework.  The CMA  creates different categories of ownership of land which are more or less aligned with Crown agent and non-Crown agent objectives.  Schedule B to the Letters Patent is aligned to Crown agent activities and lists federal real property that is “under the management of the port authority” (see s. 8(2)(d) of the CMA and art. 3.2 of the Letters Patent).  In the case of Vancouver, such lands are in Crown ownership but under VPA management.  The lands adjacent to the Lafarge project lands were Schedule B lands. 

48                               On the other hand, Schedule C to the Letters Patent describes “real property . . .  other than the federal real property” that is “held or occupied by the port authority” (see s. 8(2)(e) of the CMA and art. 3.3 of the Letters Patent).  Part of the rationale for Schedule C is to fulfil the Minister’s promise to free lands from such constraints as those imposed on Crown lands by the Federal Real Property and Federal Immovables Act , S.C. 1991, c. 50, s. 2 .  At the relevant time, the only VPA lands listed in Schedule C were the Lafarge project lands acquired by the VPA from the City and approved by supplementary Letters Patent on August 7, 2000.  As such they differ from Schedule B Crown lands in the following respects (to summarize):

(i)        Schedule B lands are owned by the Crown; Schedule C lands are owned by the VPA (CMA , s. 2 );

(ii)       Schedule B lands have been determined by the Minister to be necessary for port purposes; Schedule C lands have been determined by the Minister to be necessary to support port operations (CMA , s. 28(2) );

(iii)       The VPA acts as agent of Canada in relation to purposes for which Schedule B lands are managed; the VPA is not an agent of Canada in relation to purposes for which Schedule C lands are held (CMA , ss. 7 , 28(2)  and 28(3) );

(iv)      The VPA can mortgage or charge Schedule C lands but it is specifically prohibited from doing so in relation to Schedule B lands (CMA , s. 31(3) );

(v)       The VPA must stipulate in its contracts relating to Schedule C lands, including contracts to borrow, that is not acting as agent for the Crown (CMA , ss. 28(2) (b) and 28(5) ).

D.  The Federal Land Use Management Plan and Project Approval Scheme Adopted by the VPA (Port 2010)

49                               The VPA is required by s. 48(1)  of the CMA  to develop a detailed land use plan, which must contain objectives and policies for the development of both the federal Crown land that it manages and other land the VPA  holds or occupies.  Port 2010 was originally developed in 1994 by its predecessor, the Vancouver Port Corporation (VPC), and adopted in 1999 by the VPA.  Policy 3.2.1 of the Port 2010 is to “protect waterfront land and water lots in support of port service industries that are dependent upon waterfront access” (p. 14).  Policy 3.2.2 provides that the VPA will support marine-related commercial and public sector harbour operations.  The VPA’s A Guide To Project Approvals In Port Vancouver contains provisions analogous to a municipal development permit approval system.

50                               Section 48(9)  of the CMA  provides that “[l]and-use plans are not regulations within the meaning of the Statutory Instruments Act”.  Like a municipal official plan, Port 2010 sets out policies and objectives.  Unlike a municipal official plan, Port 2010 applies only to lands owned by the VPA itself, including both Crown land and non-Crown land.

51                               Port 2010 policies extend beyond shipping and navigation uses.  For example, the plan shows land uses within federal jurisdiction (e.g. docks) as well as land uses under provincial jurisdiction (e.g. access roads) and identifies non-shipping waterfront uses such as the Cannery Restaurant (p. 41), proposed residential development on its Maplewood North site (p. 50) and industrial freezing facilities (p. 16).  Thus, while Port 2010 sets out land uses it supports and encourages within the port, it must be read in light of the constitutional limits on federal power.  Much of the VPA lands are s. 91(1A) “public lands”, and their development is exclusively within federal jurisdiction.  This is not the case with development on non-Crown lands, the use of which must be brought within the scope of the navigation and shipping power if federal jurisdiction is to be justified.

52                               The City plan, too, shows features of the harbour, but does not thereby invade federal jurisdiction.  The harbour is a physical fact of life.  Planners at both levels of government simply accept the physical reality of the Vancouver waterfront and recognize overlapping jurisdictions over different activities that can potentially take place on waterfront lands.  As Port 2010 notes, “urban encroachment pressures result in competition for shoreline usage” (p. 14).

53                               The existence of such a multi-use plan at either level of government authority is not an assertion that everything shown on the plan is claimed to be within its jurisdiction.  Policy 3.2.3, for example, provides that the VPA will support “non-marine dependent land uses” (p. 16 (emphasis added)) in appropriate locations on VPA lands within the port.  The Policy reads in part:

Several commercial activities in the port do not require direct marine access.  However, given the industrial nature of most of these uses, they are compatible with port facilities. . . . When they occupy sites where eventual deep-sea terminal usage is anticipated, [VPA] leasing policies will continue to take such potential land requirements into account. [p. 16]

The Schedule C land which Lafarge proposes to lease for its project is designated “marine related” industrial and commercial uses.

E.  The Schedule C Lands Are Not the “Public Property” of the Federal Crown Within the Scope of Section 91(1A) of the Constitution Act, 1867 

54                               The first branch of the respondent’s interjurisdictional immunity argument relates to the exclusive federal authority in relation to “public property” within the scope of s. 91(1A).

55                               While federal ownership of land does not create an enclave from which all provincial laws are excluded, provincial law cannot affect the exercise of “a vital part” of federal property rights.  (See also Construction Montcalm Inc. v. Minimum Wage Commission, [1979] 1 S.C.R. 754, at pp. 777-79, Greater Toronto Airports Authority, at paras. 62-63, and Spooner Oils Ltd. v. Turner Valley Gas Conservation Board, [1933] S.C.R. 629, at pp. 643-44.) 

56                               The appellant submits that, “absent an agency relationship, ‘public property’ must encompass some element of ownership by Canada in order to receive constitutional immunity from provincial land use regulations” (A.F., at para. 42).  We think this proposition is correct.  Section 91(1A) creates an immunity based on a proprietary interest.  As Professor Peter Hogg states:

The federal Parliament has the exclusive power to make laws in relation to “the public debt and property” (s. 91(1A)). This power enables it to enact laws in respect of federally-owned property. [Emphasis added.]

(P. W. Hogg, Constitutional Law of Canada (loose-leaf ed.), vol. 1, at p. 28-2)

Interjurisdictional immunity does not, in our view, extend to all federally controlled property.  In Greater Toronto Airports Authority v. Mississauga (City) (1999), 43 O.R. (3d) 9 (Gen. Div.), it was “common ground that the federal government is the owner of the land at Pearson Airport” (p. 20).  Gérard V. La Forest wrote (prior to his appointment to this Court) that

if the federal government has an interest in property it may legislate respecting that property in such a way as to displace ordinary provincial law.  For it should be observed that the Dominion may legislate respecting its property notwithstanding anything in the [Constitution Act, 1867 ]. [Emphasis added.]

(Natural Resources and Public Property under the Canadian Constitution (1969), at p. 135)

57                               For s. 91(1A) purposes, the property can be held directly by the Crown, or indirectly by an agent, because if an agent acquires land on behalf of the principal in the agent’s own name, then the agent is a trustee of the land for the principal who holds a beneficial proprietary interest.  As the redoubtable Chancellor Boyd stated in Coyne v. Broddy (1887), 13 O.R. 173 (Ch. D.), at p. 184:

So it is with an agent dealing with any property; he obtains no interest himself in the subject matter beyond his remuneration; he is dealing throughout for another . . . .

In the case of Schedule B lands, the legal and/or beneficial proprietary interest belongs to the Crown in right of Canada.  On the other hand, the Schedule C land designated by the VPA for the Lafarge project is not held in the name of the Crown; nor is it held by the VPA as Crown agent.  Nor is the VPA the Crown.

58                               The B.C. Court of Appeal sought to expand the scope of s. 91(1A) beyond a proprietary interest to include lands owned by an entity “controlled” by the Crown.  Control is, of course, a leading indicator of Crown agency status, but it is only part of the test:

It is not possible for me to formulate a comprehensive and accurate test applicable in all cases to determine with certainty whether or not an entity is a Crown agent.  The answer to that question depends in part upon the nature of the functions performed and for whose benefit the service is rendered.  It depends in part upon the nature and extent of the powers entrusted to it.  It depends mainly upon the nature and degree of control exercisable or retained by the Crown.

(R. v. Ontario Labour Relations Board, Ex parte Ontario Food Terminal Board (1963), 38 D.L.R. (2d) 530 (Ont. C.A.), at p. 534, per Laidlaw J.A., adopted by this Court in Westeel-Rosco Ltd. v. Board of Governors of South Saskatchewan Hospital Centre, [1977] 2 S.C.R. 238, at p. 250.)

59                               In Halifax (City of) v. Halifax Harbour Commissioners, [1935] S.C.R. 215, at p. 226, Duff C.J. stated that the Port Authority is “subject at every turn in executing those powers to the control of the [federal Crown]”.  See also Nova Scotia Power Inc. v. Canada, [2004] 3 S.C.R. 53, 2004 SCC 51, and R. v. Eldorado Nuclear Ltd., [1983] 2 S.C.R. 551.

60                               In the CMA however Parliament has taken the trouble to specify in explicit terms when the VPA is acting as a Crown agent and when it is not so acting.  Section 28(3)  of the CMA  provides for example that when the VPA is acting merely “in support” of port operations it is not acting as Crown agent.  This reflects the CMA  policy to liberate the port authority from the full measure of constraints imposed on dealings with federal Crown land.  To impute s. 91(1A) status to Schedule C lands, and thereby to subject the lands to a Crown regime which the denial of Crown agent status was designed to avoid, is to undermine achievement of Parliament’s intent.

61                               We decline to accept the invitation of the B.C. Court of Appeal to take one of the elements of the Crown agency test (albeit the key element of control) and elevate it for this purpose above the test of which it forms a part, i.e., the requirement of agency status.  The consequences of extending the interjurisdictional immunity enjoyed by federal property proposed by the Court of Appeal would create a significant hole in relevant and appropriate provincial regulation that, with respect, is not justified.  We would therefore reaffirm the need for a Crown proprietary interest to justify the application of s. 91(1A) and on this point reject the conclusion of the B.C. Court of Appeal.  If the respondents are to succeed, they must do so on the basis of the navigation and shipping power, which is another branch of their argument.

F.      Validity of the CMA Land Use Controls Set Out in Port 2010

62                               The methodology for reconciling the exercise of federal power and provincial power is canvassed at length in Canadian Western Bank and will not be repeated here.  The initial step, as always in cases involving the division of legislative powers, is to identify the “pith and substance” of the respective enactments.  As mentioned earlier, the CMA  in relation to non-Crown lands is supported by the federal legislative power relating to navigation and shipping under s. 91(10), which is complemented by such provisions as s. 91(9) (beacons, buoys, etc.), and s. 91(11) (quarantine and marine hospitals).  The scope of the s. 91(10) power includes maritime law which establishes the framework of legal relationships arising out of navigation and shipping activities.  The federal power also includes the infrastructure of navigation and shipping activities.  This power enables the federal government to build or regulate the necessary facilities like ports and to control the use of shipping lanes and waterways (A. Braën, Le droit maritime au Québec (1992), at pp. 68-75).  If valid and applicable to development on non-Crown lands, the CMA  may have “incidental effects” in matters that would otherwise fall within provincial authority, such as the planning and development of land uses within the municipality of Vancouver.

63                               On the provincial side, the power involved is the authority over municipal institutions and matters of local interest.  The province of British Columbia has delegated broad powers to the City on zoning and construction within its boundaries.  No one disputes the validity of this delegation of provincial powers.  As a result, it is clear that both the Parliament of Canada and the legislature of British Columbia have validly exercised their legislative powers.  The regulatory and decision-making power of the VPA and the City flow from them.  The question before our Court is their applicability.

64                               Historically, the federal navigation and shipping power has been broadly construed (Queddy River Driving Boom Co. v. Davidson (1883), 10 S.C.R. 222).  The transportation needs of the country cannot be allowed to be hobbled by local interests.  Nothing would be more futile than a ship denied the space to land or collect its cargo and condemned like the Flying Dutchman to forever travel the seas.  Authority for the proposition that transportation undertakings need facilities to pick up and drop cargo, if any is required, is to be found in Attorney-General for Ontario v. Winner, [1954] A.C. 541 (P.C.).  Effective regulation of harbour facilities are as essential to shipping as airports to aeronautics.  As stated by Estey J. in Johannesson v. Rural Municipality of West St. Paul, [1952] 1 S.C.R. 292, at p. 319: 

. . . it is impossible to separate the flying in the air from the taking off and landing on the ground and it is, therefore, wholly impractical, particularly when considering the matter of jurisdiction, to treat them as independent one from the other.

Similarly, MacKinnon J.A. (later A.C.J.O.) observed in Re Orangeville Airport Ltd. and Town of Caledon (1976), 11 O.R. (2d) 546 (C.A.), at p. 549: 

. . . airports are an integral and vital part of aeronautics and aerial navigation, and cannot be severed from that subject-matter so as to fall under a different legislative jurisdiction.

See also Hamilton Harbour Commissioners, at p. 480.  Nevertheless, there are limits.  Federal undertakings such as the VPA are not, on that account, wholly exempt from  valid provincial laws of general application that in their operation do not “bear upon those subjects in what makes them specifically of federal jurisdiction”, per Beetz J. in Bell Canada (1988), at p. 762.

(1)  There Is No Explicit Federal Jurisdiction Over “Port Lands”.  Such Authority Must Be Derived From the Federal Power Over Navigation and Shipping, and Is Limited Thereby

65                               In Hamilton Harbour Commissioners, the Commissioners (two appointed federally, one by the City) took the view that within an area defined by federal regulation as “the port”, the City’s land use powers were inapplicable.  The Ontario Court of Appeal rightly rejected the notion that “the port” could be treated as a separate head of federal power or a federal enclave that as such attracted interjurisdictional immunity.  It is true that the federal navigation and shipping power can extend to regulate “integral” land-based activities but that does not withdraw all port-located industry that may be said “to support port operations” (such as the waterside car assembly plant mentioned by the chambers judge) from provincial jurisdiction just because such a plant makes use of waterborne transportation and, in a general way, contributes to the profitability of the VPA land lease business.

(2)  Federal Jurisdiction Can Be Supported in Relation to Matters “Closely Integrated” With Navigation and Shipping

66                               Our jurisprudence holds that a matter otherwise subject to provincial jurisdiction may be brought within federal jurisdiction if it is “closely integrated” with shipping and navigation.  In Monk Corp. v. Island Fertilizers Ltd., [1991] 1 S.C.R. 779, for example, it was held  that claims for money owed for excess product delivered, demurrage, and the cost of renting the cranes used to unload goods (normally a contract claim within provincial jurisdiction over property and civil rights) were so “integrally connected to maritime matters as to be legitimate Canadian maritime law within federal competence” (pp. 795-96 (emphasis in original)).  This test of “close integration” was discussed in Whitbread v. Walley, [1990] 3 S.C.R. 1273, at p. 1299, where the Court held that certain  provisions of the Canada Shipping Act, R.S.C. 1970, c. S-9, applied as well to pleasure craft as to commercial ships.  See also Zavarovalna Skupnost Triglav v. Terrasses Jewellers Inc., [1983] 1 S.C.R. 283, at p. 297.  On that basis, it seems to us that jurisdiction over “marine-related port uses”, properly circumscribed and interpreted by reference to the shipping component, may also come within the reach of the federal power over navigation and shipping.

67                               The chambers judge drew the limit for federal jurisdiction too narrowly when he stated:

Aggregate that is carried by sea must, like all marine cargo, be offloaded and it may have to be stored short-term before it is delivered from the dock.  However, it does not have to be mixed with other ingredients and made into concrete.  That may be related to the carriage in that it is the reason for the transport, but it is not necessary for the transport to be performed. [Emphasis added; para. 51.]

The issue is not necessity but integration.  As Rand J. pointed out in the Stevedoring case:

Actual necessity need not appear as the contracting out case shows [Grand Trunk Railway Co. v. Attorney General of Canada, [1907] A.C. 65 (P.C.)]; it is the appropriateness, on a balance of interests and convenience, to the main subject matter or the legislation. [Emphasis added; pp. 548-49.]

68                               In our view, the CMA  land use controls can constitutionally extend to the Lafarge project, which has from the outset been conceived of by both the City and the VPA as an integrated transportation/mixing facility in which the marine transportation aspect dominates.

(3)  The VPA Is a Federal Undertaking With Multiple Mandates

69                               The VPA performs a key shipping and navigation role in Vancouver harbour.  It is also a significant owner of non-Crown lands on which it contemplates undertaking or authorizing various types of development.  It thus joins a long tradition of corporations created by federal statute with multiple mandates, powers and responsibilities.  It is no more exclusively a “navigation and shipping” undertaking than is the Canadian Pacific Railway exclusively a federal railway undertaking, as was made clear (by way of illustration) in Canadian Pacific Railway Co. v. Attorney-General of British Columbia, [1948] S.C.R. 373, aff’d [1950] A.C. 122 (P.C.) (the “Empress Hotel” case).  The Canadian Pacific Railway was clearly in part a federally regulated railway undertaking, nevertheless

[b]ecause a company is a railway company it does not follow that all its works must be railway works or that all its activities must relate to its railway undertaking.  [p. 143]

70                               Much of the Port 2010 plan relates to activities that clearly have nothing to do with shipping and navigation, let alone qualify as “absolutely indispensable and necessary” to the VPA’s ability to fulfill its shipping and navigation mandate.  Port 2010 land use designations for VPA lands include

Port recreation [including] parks and plazas [and] conditional uses. [p. 29]

. . .

Conditional Uses . . . are not directly marine-oriented but . . . provide ongoing revenue to VPC and are compatible with neighbouring industrial uses.  The Cannery Restaurant and Versatile cold storage plant are two such operations. [p. 41]

. . .

Urban and mixed port use [including] urban uses, or urban uses combined with compatible port-related facilities. [p. 29]

71                               Port 2010 policies in relation to VPA lands include:

There are three sites that offer the opportunity for both recreational pursuits and waterfront access including Devonian Harbour Park, Portside Park and New Brighton Park.  All three parks are maintained by the Vancouver Parks Board.  [VPA] has ensured the long-term existence of these parks to the municipality and to the public through new lease agreements with the City of Vancouver.  [p. 43]

                                                                   . . .

The [Central Waterfront area] has the added capacity to support significant, urban-related development, including commercial, residential and public uses, while also accommodating transportation facilities such as the existing SeaBus terminal and the Heliport.  [p. 43]

                                                                   . . .

Port Recreation accounts for the largest proportion of waterfront use within Planning Area #2, especially at the head of Burrard Inlet in the City of Port Moody.  [p. 44]

                                                                   . . .

Maplewood North is the second [VPA] site identified for urban-related development.  This 14 hectare site is located to the north of the Dollarton Highway in the District of North Vancouver.  Part of the site is currently occupied by the Canadian International College while the balance of the site is being examined for potential residential use by a private developer together with the District of North Vancouver.  [p. 50]

                                                                   . . .

In Planning Area #5, two sites are designated Port Recreation in recognition of existing community parks that offer public access to the waterfront. . . . [VPA] encourages public access to the waterfront in these locations through the Port Recreation designation.  [p. 55]

Port 2010 thus itself refutes the notion that it is narrowly aligned with s. 91(10).  Further, the VPA’s view of uses that “support” port operations is extremely broad and cannot be said to be absolutely indispensable and necessary to its shipping and navigation undertaking.  It is important to underline at this point that the VPA approved the Lafarge project in part because “it realizes Policy 2.1 of the Plan, supporting port service industries reliant on waterfront access” (A.R., at p. 412 (emphasis added)). Merely “supporting port service industries reliant on waterfront access” does not, it seems to us, qualify as absolutely indispensable and necessary to the VPA’s federal undertaking.

G.  Conclusion With Respect to Interjurisdictional Immunity

72                               The CMA  is a federal law in pith and substance related to the management of public property and shipping and navigation.  Its land use controls reach beyond Crown property to embrace uses that are “closely integrated” with shipping and navigation.  This covers the Lafarge project.  However, land use jurisdiction asserted by the VPA in this case, while valid, does not attract interjurisdictional immunity.  The port is not a federal enclave.  VPA lands are held and leased for a variety of activities.  Authorizing the construction of a cement plant on these port lands does not fall within the core or vital functions of VPA.  On the facts of this case, it rather belongs to an incidental port development business, which because of its integration in marine transportation is reached by federal jurisdiction, but which certainly lies beyond the core of s. 91(10).

73                               In the absence of valid and applicable federal regulatory land use controls, there would be no regulatory vacuum on the former Sterling shipbuilding site.  The provincial land-use controls would apply.

H.   In this Case, the Federal Power Will Prevail Only if the Requirements of the Federal Paramountcy Doctrine Are Satisfied

74                               The stronger argument presented by the intervener, the Attorney General of Canada, is that the federal land use controls and procedures authorized by s. 48 of the CMA and implemented in Port 2010 are paramount over conflicting provincial land use laws so as to render such laws inoperative.  We therefore turn to this alternative argument.

(1)  The Application of Federal Paramountcy to CMA Section 48 and Port 2010

75                               The provincial Attorneys General argue that there is no operational conflict because Lafarge could apply for and obtain building permits from both the VPA and the City.  But that argument overlooks the fact that the Lafarge project in its present form does not comply with the City’s by-law.  The by-law imposes a 30-foot height restriction.  It would be within the City’s discretion to waive the height limit up to 100 feet, but that would impose the condition precedent of an exercise of a discretion by the City to approve a project that has already been approved by the VPA.  This would create an operational conflict that would flout the federal purpose, by depriving the VPA of its final decisional authority on the development of the port, in respect of matters which fall within the legislative authority of Parliament.

76                               The principles governing the modern doctrine of federal paramountcy were summarized by Dickson J. in Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161, at pp. 190-91, where he said:

[T]here is no true repugnancy in the case of merely duplicative provisions since it does not matter which statute is applied; the legislative purpose of Parliament will be fulfilled regardless of which statute is invoked by a remedy-seeker; application of the provincial law does not displace the legislative purpose of Parliament. 

                                                                   . . .

In principle, there would seem to be no good reason to speak of paramountcy and preclusion except where there is actual conflict in operation as where one enactment says “yes” and the other says “no”; “the same citizens are being told to do inconsistent things”; compliance with one is defiance of the other. [Emphasis added.]

77                               We restated the requirements for federal paramountcy in our reasons in Canadian Western Bank.  The party raising the issue must establish the existence of valid federal and provincial laws and the impossibility of their simultaneous application by reason of an operational conflict or because such application would frustrate the purpose of the enactment, as explained by our Court in Rothmans, Benson & Hedges Inc. v. Saskatchewan, [2005] 1 S.C.R. 188, 2005 SCC 13, at paras. 11-14.  (See also Law Society of British Columbia v. Mangat, [2001] 3 S.C.R. 113, 2001 SCC 67, at paras. 68‑71; Bank of Montreal v. Hall, [1990] 1 S.C.R. 121.)

(a)   The Existence of a Valid Federal Law

78                               We have already explained why, in our view, the provisions in the CMA  governing the dedication of land within the port area for uses related to shipping, and the CMA  authorized land use plan and policies and procedures set out in Port 2010 construed in light of the scope of the federal power, are valid federal law.  We agree with counsel for the respondents that as a question of fact, the whole of the Lafarge project on the VPA’s Schedule C land is sufficiently “integrated” into the ship/barge unloading facility to make federal regulation applicable to all aspects of it.

(b)  The Existence of a Valid and Applicable Provincial Law

79                               There was also, as the Ratepayers contend, a valid provincial law.  It is beyond question that City of Vancouver By-law No. 3575 is a valid expression of provincially authorized legislative power.  It is a law of general application that is not aimed at navigation and shipping.  It does not authorize development that would adversely affect shipping and navigation.  (On the contrary, it emphasizes cooperation with the VPA on all such matters.)  In the absence of conflicting federal law, the City’s By-law No. 3575 would properly regulate where industrial uses such as a cement batch facility would be permitted.  This point was recognized as early as 1911 when Middleton J. (as he then was) stated in Re Sturmer and Town of Beaverton (1911), 24 O.L.R. 65 (Div. Ct.), at p. 72:

The harbour may be, as a harbour, “within the jurisdiction of the Parliament of Canada;” but is none the less, for purposes within the ambit of provincial legislation, within the jurisdiction of the Province and its Legislatures, provincial and municipal.

Middleton J.’s judgment was upheld on appeal by the Divisional Court and cited with approval in the Hamilton Harbour Commissioners case, at p. 483.

(c)   Are the Two Valid Laws Capable of Simultaneous Enforcement?

80                               The Court in Rothmans, Benson & Hedges divided this aspect of the test into two parts.

(i)    The Existence of an Operational Conflict

81                               Operational conflict is present here.  Reference has already been made to the City’s 30-foot height restriction.  The record confirms other areas of conflict in respect of noise and pollution from the offloading activity and the subsequent loading of the aggregates.

82                               If the Ratepayers had succeeded in persuading the City to seek an injunction to stop the Lafarge project from going ahead without a city permit, the judge could not have given effect both to the federal law (which would have led to a dismissal of the application) and the municipal law (which would have led to the granting of an injunction).  That is an operational conflict, as held in M & D Farm Ltd. v. Manitoba Agricultural Credit Corp., [1999] 2 S.C.R. 961.

(ii)   Frustration of Federal Legislative Purpose

83                               Such an application of the relevant municipal standards would frustrate the federal purpose.  Although the VPA should seek to cooperate with the municipalities of the Greater Vancouver area, it retains the final say in respect of all matters falling within valid federal jurisdiction, in case of conflict.

84                               Assistance can be drawn from Mangat where provincial legislation prohibited non-lawyers from appearing for a fee before a tribunal, but the federal legislation authorized non-lawyers to appear as counsel for a fee.  Mangat confirms that the second prong of the test should not be interpreted as a return to the doctrine of the “occupied field”.  Rather it intends to capture those instances where it might be possible to comply with the letter of both laws, but where such compliance would frustrate the purpose intended by Parliament.  In Mangat, it was argued that both enactments could be complied with, if would-be advocates either became a member in good standing of the Law Society of British Columbia or refrained from charging a fee.  However, Gonthier J. held at para. 72 that “[t]o require ‘other counsel’ to be a member in good standing of the bar of the province or to refuse the payment of a fee would go contrary to Parliament’s purpose in enacting ss. 30 and 69(1) of the Immigration Act. . . . Where there is an enabling federal law, the provincial law cannot be contrary to Parliament’s purpose.”  Here, the CMA  has authorized the VPA to make its decision about the project and has enabled Lafarge to proceed on the basis of that authorization.

85                               The City accepted the Lafarge project as a facility with a sufficient level of integration between the transportation and non-transportation aspects to come within VPA jurisdiction.  We do not think the City’s factual determination was unreasonable in the circumstances and we would not interfere with it.  Given the operational conflict and its impact on the achievement of the federal purpose, the preconditions of federal paramountcy are met and the Ratepayers’ petition should be rejected on that ground.

VI.     Conclusion

86                               A successful harbour in the 21st century requires federal provincial cooperation.  The courts should not be astute to find ways to frustrate rather than facilitate such cooperation where it exists if this can be done within the rules laid down by the Constitution. 

87                               Here the VPA and the City worked out a cooperative framework.  The Lafarge project, although opposed by the Ratepayers, complied with the land use envisaged by both levels of government in their respective planning documents. 

88                               Of course, consent cannot confer jurisdiction where none exists.  In this case, however, the project was found by those most closely concerned in the planning exercise to be sufficiently integrated in the marine offloading and storage operation to be dealt with through federal rather than municipal procedures.  No reason has been shown for us to interfere.

89                               There will be other cases where both levels of government are vitally interested in a project (such as the hypothetical automotive assembly plant raised by the chambers judge) where the shipping aspect of the project may clearly be severable from the manufacturing operation.   In that case, the VPA must yield to the City’s procedures in those aspects that concern the manufacturing operation.

90                               Where the VPA and the City are in disagreement, of course, the courts will have to resolve the difference.  But that is not this case.

91                               For these reasons, we would dismiss the appeal with costs and answer the constitutional questions as follows:

1.    Is the City of Vancouver Zoning and Development Bylaw No. 3575 constitutionally inapplicable to property, with a legal description of Parcel P, Block 17, Plan LMP 47343, District Lot 184 and the Public Harbour of Burrard Inlet (the “Property”), held by the Vancouver Port Authority, on the basis that the Property is “public property” within the meaning of s. 91(1A) of the Constitution Act, 1867 ?

Answer: No.

2.    Is the City of Vancouver Zoning and Development Bylaw No. 3575 constitutionally inapplicable to the proposed development on the Property in view of Parliament’s legislative authority over “navigation and shipping” under s. 91(10)  of the Constitution Act, 1867 ?

Answer: Yes.

The following are the reasons delivered by

Bastarache J. —

1.       Introduction

92                               The particular facts in this case are set out by Finch C.J.B.C. in his reasons for judgment for the British Columbia Court of Appeal ((2004), 26 B.C.L.R. (4th) 263, 2004 BCCA 104), and by Justices Binnie and LeBel in their reasons for judgment, at paras. 6-20. Justices Binnie and LeBel also summarize the decisions of the B.C. Supreme Court and the Court of Appeal, at paras. 21-28. As a result, I will deal directly with the legal issues involved in this appeal.

93                               I am of the view that the appeal should be dismissed solely on a proper application of the doctrine of interjurisdictional immunity with respect to Parliament’s power over navigation and shipping, and that it is neither appropriate nor necessary to consider the doctrine of federal paramountcy.

2.       The Proper Analytical and Methodological Approach

94                               Before undertaking an analysis of the issues raised in this appeal, it will be useful to first provide a brief review of the applicable principles of constitutional law and the proper analytical approach to be undertaken.

2.1     Validity: The Pith and Substance Analysis

95                               As this case involves a constitutional challenge to a municipal by-law, the first step in the analysis is to examine the validity of the by-law itself. If a law or by-law is held to be constitutionally invalid, it cannot be applicable to the subject matter at hand, and the law must be declared ultra vires. This inquiry involves the identification of the “pith and substance” of the impugned law in order to determine its “matter”, its “true meaning”, or its “dominant or most important characteristic” (see P. W. Hogg, Constitutional Law of Canada (loose-leaf ed.), vol. 1, at pp. 15-6 and 15-7, and P. J. Monahan, Constitutional Law (2nd ed. 2002), at p. 117). The pith and substance analysis involves a consideration of both the law’s purpose and its effects (Monahan, at p. 117), and in particular how the law will actually operate with respect to legal rights and obligations.

2.2     Applicability: The Interjurisdictional Immunity Doctrine

96                               The second step, assuming the impugned law has been held to be constitutionally valid, is to determine whether the law is applicable to the subject matter in question. When considering a federal matter, as in the present case, the appropriate doctrine to be applied is that of interjurisdictional immunity (see Hogg (loose-leaf ed.), at p. 15-25); the central question is whether the by-law, though valid in its own right, should be read down so as to be inapplicable to the federal matter because that matter enjoys immunity from the application of provincial legislation, deriving from Parliament’s exclusive legislative authority over the matter or over a corresponding head of power under s. 91  of the Constitution Act, 1867  (see Paul v. British Columbia (Forest Appeals Commission), [2003] 2 S.C.R. 585, 2003 SCC 55, at paras. 15-16). The result of a successful application of the doctrine of interjurisdictional immunity (that is, a finding that the federal matter or undertaking is immune from the impugned provincial law) is that the provincial law in question can never be applicable to that federal matter or undertaking, regardless of whether any federal legislative or executive action has been taken (see Monahan, at p. 124). In most cases, the application of the doctrine of interjurisdictional immunity to federal “undertakings” is concerned with “Works and Undertakings” outlined in s. 92(10)  of the Constitution Act, 1867 , whereby provinces have legislative authority over local works and undertakings other than those enumerated in that provision, such as ships, steam lines, railways, canals, etc., which are international or interprovincial in nature. Yet the immunity doctrine has also been applied to federal undertakings which do not fall within s. 92(10), especially when such undertakings clearly fall within a separate federal head of power mentioned in s. 91 (see Monahan, at p. 123, fn. 67). In my view, the federal undertaking at issue here is the Vancouver Port Authority (“VPA”) as an entity established by and falling within Parliament’s legislative authority over navigation and shipping under s. 91(10), and the subject matter in question is the VPA’s regulation of land use planning and development on port lands in support of port operations.

97                               Until 1966, the test for federal immunity was to determine whether the provincial law under scrutiny would significantly “impair” or “sterilize” the federally regulated activity. This changed with the Quebec Minimum Wage case, where the test adopted by the Supreme Court of Canada was whether “a vital part of the management and operation of the undertaking” was “affect[ed]” (see Commission du salaire minimum v. Bell Telephone Co. of Canada, [1966] S.C.R. 767, at p. 774 (emphasis added), cited in Hogg (loose-leaf ed.), at p. 15-27). In 1988, the Court reaffirmed that test in Bell Canada v. Quebec (Commission de la santé et de la sécurité du travail), [1988] 1 S.C.R. 749 (“Bell Canada (1988)”). Beetz J., for the Court, indicated that in order for a federal undertaking to enjoy immunity from the application of provincial laws, “it is sufficient that the provincial statute which purports to apply to the federal undertaking affects a vital or essential part of that undertaking, without necessarily going as far as impairing or paralyzing it” (pp. 859-60). Beetz J. stated that provincial laws cannot affect the “basic, minimum and unassailable content” (i.e. the “core”) at the heart of each head of federal power (p. 839).

98                               It should be noted that the application of the doctrine of interjurisdictional immunity over federal undertakings is different from its application to federally incorporated companies (see Hogg (loose-leaf ed.), at p. 15-26). In the case of federally incorporated companies, an otherwise valid provincial law cannot “impair the status or essential powers of a federally-incorporated company” (Hogg (loose-leaf ed.), at p. 15-26); because the federal incorporation power does not authorize the regulation of the activities of federal companies, there can be no immunity from provincial regulation of such activities (Hogg (loose-leaf ed.), at p. 15-26,  fn. 116). In contrast, “undertakings” which operate in a federal legislative field are, by definition, subject to federal regulation, whether or not they are federally or provincially incorporated, and even where they are unincorporated. As a result, some federal undertakings will be at least partially immune from provincial laws purporting to regulate their activities (see Hogg (loose-leaf ed.), at p. 15-26, fn. 116). In the present case, the undertaking in question is the VPA itself, not Lafarge nor Lafarge’s development proposal, implicitly. As demonstrated later, the question is therefore whether the regulation of land use planning and development with respect to port lands in support of port operations, as exercised by the VPA, a federal undertaking, pursuant to the federal power over navigation and shipping under s. 91(10), is immune from the by-law.

99                               It should also be noted that there has been much debate over the use and merits of the doctrine of interjurisdictional immunity. Some authors (and some litigants in recent cases) have urged this Court to abandon the doctrine altogether, arguing that it serves no useful purpose in the constitutional law analysis of the division of powers and that other doctrines (such as pith and substance or paramountcy) already provide the necessary answers and analytical tools for most if not all constitutional law problems of this nature (see D. Gibson, “Interjurisdictional Immunity in Canadian Federalism” (1969), 47 Can. Bar Rev. 40; D. Gibson, “Constitutional Law—Freedom of Commercial Expression Under the Charter—Legislative Jurisdiction over Advertising—A Representative Ruling: Attorney General of Quebec v. Irwin Toy Limited” (1990), 69 Can. Bar Rev. 339; J. Leclair, “The Supreme Court of Canada’s Understanding of Federalism: Efficiency at the Expense of Diversity” (2003), 28 Queen’s L.J. 411; and J. Leclair, “L’étendue du pouvoir constitutionnel des provinces et de l’État central en matière d’évaluation des incidences environnementales au Canada” (1995), 21 Queen’s L.J. 37). Essentially, critiques of the doctrine generally include two types of claims — that the doctrine is too vague or complicated, or that the doctrine unnecessarily and unfairly creates a much wider scope for greater centralization at the expense of the principles of federalism and regionalism.

100                           Professor Hogg, in the second edition of Constitutional Law of Canada (1985), at pp. 329-32 heavily criticized the Supreme Court’s development of the interjurisdictional immunity doctrine, which he saw as being unnecessary and creating an impediment to natural and acceptable jurisdictional overlaps. This criticism was fully addressed and essentially disarmed by Beetz J. in Bell Canada (1988). Professor Hogg, in later editions of his text, has diminished the extent of his critique, acknowledging that “some degree of interjurisdictional immunity is entailed by the Constitution of Canada’s dual lists of exclusive powers. Otherwise, what would be incompetent to a legislative body in a narrowly framed law would be permitted if the law were framed more broadly. That cannot be right” (see Hogg (loose-leaf ed.), at p. 15-28, fn. 129). Ultimately, however, Hogg states that the “vital part” test for immunity casts too wide a net and should be eliminated in favour of the more restrictive and older “sterilization” or “impairment” test. Later on, Hogg agrees with Gibson that it would be best to abandon the doctrine of interjurisdictional immunity altogether in the case of federal undertakings whose functioning is not “threatened” by provincial laws (see Hogg (loose-leaf ed.), at p. 15-30). Hogg states that the impairment of federal undertakings is “the only situation where the immunity is needed” (ibid.); in all other cases, immunity is seen as too broad, too vague and needlessly complicated.

101                           These critiques and criticisms of immunity are quite serious and merit some consideration, particularly those concerned with the complexity of the test for immunity and the need for consistency and predictability in its application. In my view, however, many of the criticisms aimed at abandoning the doctrine altogether may be misguided. From a logical and practical perspective, all constitutional legal challenges to legislation should follow the same pattern: considerations of validity, considerations of applicability and, where two laws are potentially in conflict, considerations of operability in terms of federal paramountcy. These steps correspond to Professor Hogg’s description of the three ways in which to “attack” a law that potentially applies to matters outside the jurisdiction of the enacting legislative body (see Hogg (loose-leaf ed.), at pp. 15-25 and 15-26). There is therefore a doctrinal and a practical need to conserve the doctrine of interjurisdictional immunity as an essential legal test concerned with the applicability of a provincial law which purports to apply to federal matters.

102                           Other scholars and commentators have argued for the continued preservation and application of the doctrine: see e.g. R. M. Elliot, “Constitutional Law—Division of Powers—Interjurisdictional Immunity, Reading Down and Pith and Substance: Ontario Public Service Employees Union v. Attorney-General for Ontario” (1988), 67 Can. Bar Rev. 523, and J. E. Magnet, “Research Note: The Difference Between Paramountcy and Interjurisdictional Immunity”, in Constitutional Law of Canada: Cases, Notes and Materials (8th ed. 2001), vol. 1, at p. 341. In the context of aboriginal legal disputes, K. Wilkins in “Of Provinces and Section 35 Rights” (1999), 22 Dal. L.J. 185, at pp. 206-7, provides an excellent description of the doctrine and a summary of its continued relevance and usefulness:

Restrictions on the application of otherwise valid provincial measures follow necessarily from the fact that federal authority over certain matters is exclusive and remains so whether or not the federal government chooses ever to use it. Subjects within exclusive federal authority, again, are subtracted from the powers conferred on the provinces. For this reason, it makes no difference, at least for some purposes, whether a province sets out to exercise powers or deal with matters reserved exclusively to the federal order. Whatever its intention may be, it simply cannot deal with such matters, and provincial measures that do so can have, to that extent, no legal effect. Provincial activity cannot have enforceable legal consequences that a province is not entitled or empowered to intend. . . .

Seen in this context, the doctrine of interjurisdictional immunity gives courts a way of preserving as much as possible of a provincial measure despite the fact that the measure, if given full scope, would regulate or dispose of matters that lie beyond the reach of provincial authority. . . . Confronted with a measure that would make mandatory provision for some matters that lie outside, as well as some within, the enacting body’s authority, the courts will as a general rule “read down” the measure to confine its application exclusively to permissible matters. [Footnotes omitted.]

103                           The continued usefulness and worth of the interjurisdictional immunity doctrine essentially depends on the results or consequences of its application. An inquiry into the validity of a law, discussed earlier, may result in a declaration of invalidity which strikes down the law or the specific statutory provision altogether, while a declaration that a federal law is paramount over a provincial law, as discussed below, merely renders the provincial law inoperative to the extent of any conflict between the two laws. Without the availability of the doctrine of interjurisdictional immunity, there would be no remedy available to read down a provincial law which would be rendered “inapplicable” to a federal matter while still preserving the applicability of the provincial law to other non-federal matters. The only solution would be to find the provincial law invalid through a consideration of its pith and substance; this could result in the law or provision actually being struck down altogether. Furthermore, if there were no doctrine of interjurisdictional immunity, there would be no way to prevent the impermissible application of an otherwise valid provincial law to a federal matter in situations where there is no competing federal law.

104                           It should be noted that some critics of interjurisdictional immunity have argued that it is unnecessary and irrelevant in light of the doctrine of federal paramountcy. Magnet convincingly notes the differences between the two doctrines discussed in the preceding paragraphs. Magnet writes that immunity “is different from the paramountcy doctrine in that even where there is no contradiction or meeting of legislation, the provincial legislation offers significant obstruction to the federal thing, person or undertaking, affects its status, or drains off essential federal attributes which make them within federal jurisdiction” (p. 339). Preserving the application of the immunity doctrine in certain contexts demonstrates the full extent and breadth of different types of constitutional legal inquiries.

105                           In addition, those who would argue that interjurisdictional immunity is unnecessary in light of the “doctrine” of pith and substance have, in my respectful view, misinterpreted the scope and nature of that inquiry. Characterizing the “pith and substance” of a law, as described above, is not a “doctrine” or a “legal test” on the same level as or of the same nature as the doctrines of interjurisdictional immunity and federal paramountcy. Rather, a consideration of a law’s pith and substance is merely an analytical tool which helps characterize the true nature of a law in order to determine if it was validly enacted by a legislative body (i.e., by ensuring that the law was enacted pursuant to an existing head of legislative jurisdiction or authority). If the law was not enacted pursuant to an existing head of legislative power within the enacting body’s field of competence, then the law is declared invalid; if it was, then it will not be struck down. But this inquiry tells us nothing about whether or not the law, though valid, could or should apply to a particular matter or thing. Immunity helps resolve that question (see Elliot).

106                           Finally, there are those who would argue that the concerns addressed by the doctrine of immunity are already resolved by the “double aspect” doctrine. Once again, those criticisms appear to be misguided in that the double aspect doctrine merely recognizes that some laws may have a purpose corresponding to a valid head of provincial jurisdiction, but may also have a purpose corresponding to a valid head of federal jurisdiction. With respect, I believe Binnie and LeBel JJ. mischaracterize this doctrine, at para. 4 of their reasons. The recognition of an apparent double aspect to a provincial law does not render it inapplicable or inoperative (nor invalid). Those matters must still be determined using the concepts of federal immunity and paramountcy. Likewise, a finding that a provincial law has only “incidental effects” on a federal head of power is merely a statement about the law’s validity; it says nothing about the impact of the provincial law — its effects on federal matters when it is applied to those matters. It may in fact be possible for a provincial law to be valid to the extent that its true or essential nature can be seen as having merely “incidental” effects on a federal head of power (pursuant to the pith and substance analysis), but then to be rendered inapplicable because of “impermissible” effects on the core of a federal head of power when it is applied to certain federal undertakings. Immunity would therefore play a role in preventing constitutionally impermissible applications of provincial laws to federal matters, without the need to strike down such laws and without the need for competing and conflicting federal legislation.

107                           Thus, in my view, those opposed to the doctrine of interjurisdictional immunity have not successfully demonstrated why it should be abandoned or why it should not continue to be considered and applied where appropriate. Professor Hogg ((loose-leaf ed.), at pp. 15-25 to 15-34) has correctly identified three types of scenarios or situations where the doctrine has been applied and, I would argue, should continue to be applied: (1) federally incorporated companies, which enjoy immunity from provincial laws of general application that affect their corporate structure or constitution, by virtue of the federal incorporation power; (2) federally regulated undertakings or federal matters falling under distinct heads of legislative power under s. 91  of the Constitution Act, 1867  (such as the VPA and the s. 91(10) navigation and shipping power in the present case), which enjoy immunity from provincial laws of general application that affect the core of such a power and/or a vital part of such an undertaking; and (3) federal institutions or matters which enjoy immunity from provincial laws that specifically target those institutions or matters. The present situation clearly falls into the second category.

108                           Notwithstanding this defence of the doctrine, I would agree with some critics of interjurisdictional immunity who allege that its application is often difficult and who in particular allege that the criterion for determining when a provincial law “affects” the core of a federal power or vital part of a federal undertaking is often vague or overly broad. It is no doubt time to recognize that defining the word “affects” as simply or merely “touches on” leads to an overly wide scope of immunity in many contexts. While the former standard of “impairment” or “sterilization” appears to be too narrow and restrictive (with the possible exception of special cases like Irwin Toy Ltd. v. Quebec (Attorney General), [1989] 1 S.C.R. 927, where the provincial law has only “indirect” effects on the federal matter, which is not the case here), an overly broad or vague notion of whether a provincial law “affects” the core of a federal power might confer federal immunity in wholly inappropriate scenarios. Some middle ground should therefore be sought out. In my view, the effect of the application of a provincial law on the core of a federal head of legislative power must be sufficiently severe to justify a finding of immunity. Without going so far as to require the federal core or matter or undertaking to be “sterilized”, I would suggest that we should interpret Bell Canada (1988)’s determination of a vital part of the federal core being “affected” to mean that the full or plenary exercise (or potential exercise) of the federal legislative authority in question would need to be “attacked”, “hindered” or “restrained” before immunity could attach. The key, to return to the language used by Beetz J. in Bell Canada (1988), at p. 856, is whether the provincial law “bear[s] upon” a federal matter or subject in what makes it “specifically of federal jurisdiction” (p. 762). As Professor Hogg suggests, the provincial law in its application to the federal matter must “intrude heavily” upon core federal areas of jurisdiction and/or upon core aspects of federal subject matters in order for immunity to be triggered (see Hogg (loose-leaf ed.), at p. 15-34). In my view, these qualifying descriptions of the word “affects” will give more teeth to the notion of immunity and respond to critics of the doctrine who have expressed concern over its overly broad and limitless application. I will not discuss the matter of indirect effects described in Irwin Toy; it raises a number of difficulties in its own right that are better left to another day.

109                           Regarding the application of the immunity doctrine in cases like the present one, I would disagree with Justices Binnie and LeBel’s treatment of the operation of interjurisdictional immunity, at para. 46 of their reasons, where they focus on an “activities” based notion of jurisdiction. This indicates a focus on the specific nature of the Lafarge proposal and the activities it would carry out. This concern is repeated at para. 71, where the core of the federal power here is found not to include “uses that . . . cannot be said to be absolutely indispensable and necessary to its shipping and navigation undertaking”. With respect, this analysis is problematic because the test for immunity should not focus on any specific activity or operation at issue (i.e. the Lafarge proposal for a concrete batch facility or any other particular use of port lands) and whether this activity or use is immune from the municipal by-law, but rather on whether the federal power over navigation and shipping (expressed in this case as the federal power over land use planning and development decisions by a port authority, a federally regulated undertaking) is immune from the application of the municipal by-law. The immunity doctrine is about jurisdiction; what matters is whether or not a provincial law affects the core of a federal head of legislative power, regardless of whether or how that federal power is exercised or will be exercised, if at all, with respect to a particular project or activity. The only relevance of the activity is that discussed further on in these reasons, i.e. whether approval of the project by the VPA as a federal undertaking is consistent with the regulation of land use planning and development of port lands in support of port operations (which I believe falls within the core of s. 91(10)). But even that determination says nothing of the applicability of the municipal by-law.

110                           Because of this focus on jurisdiction rather than action, there need not be any federal legislation or executive action “occupying the field” for federal immunity to be triggered with respect to an area of federal legislative authority. This is one of the key facets of the immunity doctrine; the mere fact that a provincial law or municipal by-law affects a vital part of an area of exclusive federal jurisdiction is enough to render it inapplicable with respect to a federal undertaking, regardless of whether or not Parliament has itself enacted any laws or taken any specific action with respect to the jurisdictional area or the undertaking. For example, in the Quebec Minimum Wage case, the Court concluded that a federally regulated interprovincial undertaking was immune from a provincial minimum wage law because it affected a vital aspect of the management and operation of the federal undertaking, even though at the time there was no federal minimum wage law or policy in existence. The doctrine of federal immunity was triggered even though no federal legislative or executive action had occurred with respect to that subject matter (see Hogg (loose-leaf ed.), at p. 15-27).

111                           This conclusion (that a provincial law, if it is found inapplicable to a federal undertaking or matter by reason of interjurisdictional immunity, cannot “fill the gap” left by the absence of any federal legislation or action) is consistent with the principle of “exclusivity” whereby subject matters enumerated in ss. 91  and 92  of the Constitution Act, 1867  are assigned to one level of government only. According to Monahan, this principle means that “constitutional jurisdiction over a particular work or undertaking is to be undivided: for the purposes of section 92(10), jurisdiction is allocated to a single level of government. The courts have consistently rejected the idea of dividing jurisdiction between the federal and the provincial governments over a single undertaking” (p. 357). The same could be said of undertakings or subject matters covered by a particular head of power under s. 91, such as navigation and shipping in this case (see Monahan, at p. 123, fn. 67).

2.3     Operability: The Federal Paramountcy Doctrine

112                           The final step, assuming the impugned law is both valid and generally applicable to the federal matter, is to determine whether the provincial law (in this case, the municipal by-law) is inoperative to the extent of any conflict with federal legislation through an application of the doctrine of federal paramountcy. In order for a consideration of the doctrine to be possible, there must be two valid and applicable laws (one federal and one provincial or municipal) which overlap; the nature and extent of the overlap will then determine whether the federal law should take precedence over the provincial law. According to J. Bakan et al., the authors of Canadian Constitutional Law (3rd ed. 2003), at pp. 254-55: “The paramountcy issue only arises after the issues of validity and applicability have been determined. If a court has determined, through the process of characterization, that both the federal and provincial laws in issue are valid, and that both apply to the facts of the case, then a paramountcy issue may arise. The paramountcy issue will not arise if the court finds that one or the other of the laws is invalid or that the provincial law is inapplicable (using the doctrine of interjurisdictional immunity)” (emphasis added). I agree. If the doctrine of paramountcy is considered, and if the overlap constitutes a “conflict” (that is, if the federal legislative purpose is frustrated, or if there is an impossibility of dual compliance — see Hogg ((loose-leaf ed.), at pp. 16-4 to 16-8)), then the doctrine of federal paramountcy will apply so as to render the provincial law inoperable to the extent of the conflict. The result of a finding of federal paramountcy is that the provincial law is still considered valid and applicable but is inoperable so long as there is a conflict with federal legislation (see Monahan, at p. 127). If, however, there is no conflict (either because the overlap does not constitute a conflict, or because any conflict has disappeared through legislative repeal or amendment), then the two laws may validly co-exist, even with respect to the same matter or undertaking.

113                           In the present case, I would likely agree with Justices Binnie and LeBel’s conclusion that the operation of the City’s by-law here (if applicable) would frustrate Parliament’s intent; but because I believe the by-law is not applicable, as discussed below, paramountcy need not be discussed.  I would add that the mere requirement of a permit under provincial law, without evidence that the permit would not in fact be granted in this case, does not necessarily indicate an express operational conflict with federal law, since compliance with one law does not necessarily mean a breach of the other (see Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161; 114957 Canada Ltée (Spraytech, Société d’arrosage) v. Hudson (Town), [2001] 2 S.C.R. 241, 2001 SCC 40). Dual compliance could be achieved by satisfying the requirements of whichever law was “stricter” (see Hogg (loose-leaf ed.), at pp. 16-9 and 16-10). If the City did in fact grant a permit in this case, then dual compliance would therefore be possible; certainly, until the City refuses a permit, dual compliance is not “impossible” here. Federal paramountcy would therefore need to be triggered by some other means, such as the frustration of legislative intent despite the absence of any express operational conflict in terms of impossibility of dual compliance.

3.       Application to this Case

3.1     The Validity of the Municipal By-law and the Canada Marine Act, S.C. 1998, c. 10 

114                           In this case, both parties appear to admit that the municipal by-law in question is valid legislation. The respondents Lafarge Canada Inc. (“Lafarge”), the  VPA and the City of Vancouver (“City”) do not challenge the validity of the by-law, but rather the application of the by-law to a particular subject matter, namely property situated in the Port of Vancouver and the proposed development project for the property.

115                           In my view, the municipal by-law is indeed valid legislation. In pith and substance, the by-law is concerned with zoning regulations and requirements surrounding land use for property situated within the municipality’s boundaries. It imposes a regulatory regime with respect to development and building permits and an approval process for projects to be undertaken on city grounds. Its purpose can be characterized as the achievement of certainty and efficiency in land use planning and development for municipal land; its effects on interested parties are generally concerned with ensuring the compliance of development proposals with municipal regulations and procedural standards for city council approval. In short, the pith and substance of the by-law is in relation to the regulation of land use planning and development for property situated within the City of Vancouver. As such, the by-law is an example of delegated legislative authority deriving from the provincial legislative power over property and civil rights under s. 92(13)  of the Constitution Act, 1867 . It is a valid provincial law (more precisely, a valid municipal by-law) of general application, which does not target any particular federal subject matter or federal undertaking. In general terms, a valid provincial law of general application can be found to have permissible and incidental effects on federal matters, so long as these effects do not impact on the federal character or nature of the federal matter (see Hogg (loose-leaf ed.), at p. 15-33, citing Bell Canada (1988), at p. 762: “provided however that the application of these provincial laws does not bear upon those subjects in what makes them specifically of federal jurisdiction”). However, as discussed below, in this case the application of the municipal by-law to the regulation of land use planning within the Port of Vancouver for port lands in support of port operations would impermissibly affect a vital part  of the federal power over navigation and shipping under s. 91(10).

116                           It should also be noted that because paramountcy only arises after both the provincial law (or municipal by-law) and the federal law in question have been found to be valid and applicable to the same subject matter, as discussed above, the validity of the federal legislation in this case might also need to be addressed at this first step of the analysis. That is, when assessing the validity of the municipal by-law in question, it might also be useful to consider the validity of the applicable federal legislation which allegedly conflicts with the by-law, in order to properly consider the application of the doctrine of federal paramountcy, should the analysis proceed that far. The relevant federal legislation here is the Canada Marine Act  in general, and s. 48 in particular, which requires and provides for the development of land use plans by port authorities which contain “objectives and policies for the physical development of the real property” that the port authority “manages, holds or occupies”, and which take into account “relevant social, economic and environmental matters and zoning by-laws that apply to neighbouring lands”. In my view, a consideration of the validity of s. 48 is not necessary, given that it is not challenged; I have also found that there is no need (and no possibility) to consider the application of the doctrine of paramountcy because the interjurisdictional immunity doctrine applies here. Nevertheless, if the issue were to emerge, I would agree with Justices Binnie and LeBel’s conclusion on the validity of the federal law in question. In my view, s. 48  of the Canada Marine Act  is, in pith and substance, legislation aimed at the regulation of land use planning and development for property related to shipping and navigation. It is legislation properly adopted under s. 91(10)  of the Constitution Act, 1867 , which establishes Parliament’s exclusive authority to legislate with respect to navigation and shipping. This power undeniably includes and extends to harbours and ports (see the discussion below); s. 48  of the Canada Marine Act  is a function of this power.

3.2     The Application of the Municipal By-law

117                           Having concluded that the municipal by-law in question is valid provincial legislation of general application, the next step in the analysis is to determine whether the by-law is applicable in this case. The respondents Lafarge, the VPA and the City have proposed two possible routes by which the by-law could be held to be inapplicable by virtue of the doctrine of interjurisdictional immunity: the federal power over “public property” under s. 91(1A) of the Constitution Act, 1867 , and the federal power over “navigation and shipping” under s. 91(10). In my view, the first ground fails to show why the by-law should be inapplicable, while the second ground succeeds.

118                           In either case, the analysis remains the same regardless of which federal power is considered. The first step is to identify the “core” of the federal head of power; that is, to determine what the federal power encompasses within its primary scope, and then to determine whether the impugned federal undertaking or matter at issue falls within that core. The second step is to determine whether the impugned provincial law (or in this case, the impugned municipal by-law) impermissibly affects a vital aspect of the federal core of either head of power, so as to render it inapplicable to the federal undertaking or matter (see Bell Canada (1988); see also Hogg (loose-leaf ed.), at pp. 15-25 to 15-28, and Monahan, at pp. 123-26).

3.2.1  Federal Immunity Over Public Property Under Section 91(1A)

119                           On this point, I would find that the lands in question do not constitute “public property” under s. 91(1A) of the Constitution Act, 1867 , and thus do not enjoy federal immunity from the application of the municipal by-law on that basis.

120                           In the Court of Appeal, Finch C.J.B.C. found that the chambers judge, Lowry J. of the B.C. Supreme Court, had applied the wrong legal test (and thereby reached the wrong conclusion) in determining whether the port lands in question were “public property” under s. 91(1A) and thus whether they enjoyed federal immunity from the application of the by-law. Lowry J. had essentially adopted a test of “agency” for identifying public property in situations where the land is not owned directly by the Crown, and he had concluded that because here the VPA holds the subject lands in its own name and not as an agent of the federal Crown, the lands in question could not be considered public property under s. 91(1A) and therefore did not enjoy federal immunity from the by-law.

121                           In assessing this analysis, Finch C.J.B.C. held that it is the degree of control exercised by the federal Crown over the lands in question which determines its status as public or non-public property under s. 91(1A), not whether there is an agency relationship with the Crown. Finch C.J.B.C. determined that Lowry J. had misinterpreted Hamilton Harbour Commissioners v. City of Hamilton (1978), 21 O.R. (2d) 491 (C.A.), as establishing the principle that only where a Crown corporation is an agent for the Crown for the purposes of holding land can the lands so held be considered public property; instead, according to Finch C.J.B.C., there may be situations where a Crown corporation that is not a Crown agent is nonetheless subject to a sufficient degree of control by the federal Crown such that the property it holds in its own name is in reality public property under s. 91(1A). For example, ongoing federal approval for and control over the acquisition, tenure and disposition of land held by a Crown corporation which is not a Crown agent will generally indicate a sufficient degree of federal control. In this case, Finch C.J.B.C. held that the degree of control exercised by the federal Crown through the Canada Marine Act  over all lands belonging to or held by the VPA was sufficient to characterize the lands in question as public property under s. 91(1A); thus, by application of the doctrine of interjurisdictional immunity, the municipal by-law is inapplicable to the lands in question.

122                           I agree with Finch C.J.B.C. that Lowry J. applied the wrong legal test and that in general a provincial law cannot affect the federal power to enact laws in respect of federally owned property (see Hogg (loose-leaf ed.), at p. 28-2; see also Construction Montcalm Inc. v. Minimum Wage Commission, [1979] 1 S.C.R. 754, and Greater Toronto Airports Authority v. Mississauga (City) (2000), 50 O.R. (3d) 641 (C.A.), at paras. 62-77). The test for public property under s. 91(1A) cannot be one of “agency”, since this is not an appropriate or principled basis upon which to classify land as “public” or “non-public”. This is reinforced by the fact that the statutory designation of a Crown corporation as an agent for the Crown is more accurately understood as an expression of the Crown’s legal liability in relation to land held by a Crown agent, rather than as a statement about the constitutional status of land (see P. W. Hogg and P. J. Monahan, Liability of the Crown (3rd ed. 2000); see also ss. 23(1)  and (2)  of the Canada Marine Act ). Furthermore, agency itself is merely an indicator or a factor in identifying public property; as noted by Finch C.J.B.C., there is a consistent line of jurisprudence which demonstrates that the status of land as public property under s. 91(1A) coincides with its ownership by Crown agents for the benefit of the federal Crown (see para. 74).

123                           I would however disagree with Finch C.J.B.C.’s “control” test as a substitute for the agency test in identifying public property. The relevant test is not the degree of control exercised by the federal Crown (which is, in effect, merely an indicator of Crown agency). Rather, the relevant test is whether there is evidence of a sufficient proprietary interest in the lands on the part of the federal Crown. First, it is clear that Crown ownership of land generally coincides with its prima facie classification as s. 91(1A) public property; see Hogg (loose-leaf ed.), at p. 28-2. Second, a focus on the federal Crown’s proprietary interests is consistent with the historical origins and development of federal jurisdiction over public property as a way to ensure that the federal Crown would possess and be the proprietor of sufficient resources to establish and maintain a transcontinental economy in the early years of Confederation (see Monahan, at pp. 111-12, and G. V. La Forest, Natural Resources and Public Property under the Canadian Constitution (1969), at p. 58, on the extension of this idea to nation-wide transportation initiatives). Third, even a partial proprietary interest of the federal Crown in land will help establish a sufficient basis for classifying the land as public property under s. 91(1A) (see Greater Toronto Airports Authority, at para. 66). Thus, when a Crown corporation owns or holds land other than as a Crown agent, there must be some element of ownership by the federal Crown in order to receive constitutional immunity from provincial land use laws and regulations. Therefore, the immunity at the heart of s. 91(1A) is based on a proprietary interest.

124                           In addition to rejecting the “control” test, I cannot accept Finch C.J.B.C.’s conclusion regarding the lands in question here. On the facts of this case, I would conclude that the Crown has not established a proprietary interest in the lands sufficient to justify federal immunity on the basis of s. 91(1A) of the Constitution Act, 1867 . The property in question is listed in Schedule C of the VPA’s Letters Patent (Canada Gazette, Part I, vol. 133, February 27, 1999 (Supplement), at p. 3), and based on a plain reading of the legislative scheme and of the Letters Patent, it is clear that it was Parliament’s explicit and deliberate choice to exclude Schedule C lands from the definition of federal lands and lands held in the name of the Crown by Crown agents. The Letters Patent for the VPA draw a clear distinction between “federal real property” (s. 3.2) and “other than federal real property” (s. 3.3); given that the subject lands fall into the latter category, it is clear that the federal Crown has indicated its legislative and executive intent to consider the lands in question as something other than federal property. By its own decision to include the lands in question in Schedule C of the VPA’s Letters Patent, and thereby to exclude them from lands owned by the Crown or held by agents for the Crown, Parliament has chosen to renounce any proprietary interest in such lands. The property is held by the VPA in its own name and not for the benefit of the Crown.

125                           As a result, although the by-law seeks to regulate the land use planning and development of the lands in question, such lands are not public property under s. 91(1A); accordingly, the application of the by-law does not invade Parliament’s exclusive legislative jurisdiction over public property, and there is no s. 91(1A) immunity here.

3.2.2 Federal Immunity Over Navigation and Shipping Under Section 91(10)

126                           The alternative ground for federal immunity from the application of the municipal by-law is that the by-law cannot apply by virtue of Parliament’s exclusive legislative jurisdiction over navigation and shipping under s. 91(10), and in particular over the VPA’s regulation of land use planning and development of port lands in respect of port operations, as a federally regulated undertaking rooted in s. 91(10).

3.2.2.1 The Core of Section 91(10)

127                           As previously mentioned, the first step in the analysis is to determine and identify the core of the federal power at issue (i.e. the exclusive legislative jurisdiction over navigation and shipping under s. 91(10)). As Finch C.J.B.C. noted in his reasons, at para. 97, the proper question to ask is “whether the Port Authority’s powers to plan and regulate land use development within the Port form a vital part of the exclusive federal legislative jurisdiction over navigation and shipping” (see also para. 100). In other words, we must determine whether the regulation of land use planning and development, as exercised by the VPA acting as a federal undertaking, created and governed by the federal government pursuant to its navigation and shipping power, falls within the core of s. 91(10). As discussed earlier, it is important not to define the core too widely, such that the core of the federal sphere of jurisdiction would become as large as its outer boundaries. The attempt to draw bright lines in this area should also be resisted. In my view, it is best to address the issue on a case-by-case basis. Clearly then, there must be a sufficient connection to a basic understanding of navigation and shipping for immunity to attach; in other words, the VPA’s regulation of land use planning and development in respect of port lands must be for purposes relating to navigation and shipping in order to enjoy federal immunity under s. 91(10). This is what must guide the inquiry. It may be that certain uses of land do not appear to have a sufficient connection to navigation and shipping on their own but the VPA’s decision to authorize such uses in exercising its powers over port lands derived from the federal power over navigation and shipping (including port operations) cannot be considered in isolation. In my view, the core of the federal legislative power over navigation and shipping under s. 91(10) necessarily extends to and includes the power (as exercised by the VPA as a federal undertaking) to regulate land use planning and development for port lands in support of port operations (i.e. Schedule C lands, according to the preamble of the VPA’s Letters Patent; this is in fact the category of port lands on which the Lafarge facility would be built). That is the only issue that concerns us in this appeal and that governs our inquiry. We must determine whether the regulation of land use in the port is a core function of navigation and shipping. In contrast with Justices Binnie and LeBel’s reasoning, I am of the view that the regulation of land use planning for such lands in support of port operations provides the necessary link to navigation and shipping in order to trigger federal immunity; this is discussed in greater detail below. This conclusion flows from the inclusion of ports and harbours generally within the federal power over navigation and shipping and, more specifically, from the inclusion of land use planning and development activities and decisions by port authorities in respect of port lands, when such regulation is sufficiently connected to navigation and shipping.

128                           I would note first of all that the jurisprudence clearly establishes that ports and harbours with interprovincial dimensions fall within the core of s. 91(10) as facilities or undertakings in which various aspects of the federal power over navigation and shipping would logically be exercised (see Holman v. Green (1881), 6 S.C.R. 707, at p. 718, per Strong J.: “the object of vesting the harbours in the Dominion was doubtless with the object of enabling that Government to carry out with more facility such measures as it might, under the power granted to it to legislate on the subject of navigation and shipping, from time to time think fit to enact”). This is similar in nature to the federal power over aeronautics and consequently over airports and aeronautical facilities. That analogy was recognized by Griffiths J. in the Hamilton Harbour Commissioners case, at pp. 479-80, which was subsequently upheld on appeal, in which the inclusion of ports and harbours within s. 91(10) was confirmed:

In City of Montreal v. Montreal Harbour Com’rs, [1926] 1 D.L.R. 840 at p. 848, [1926] A.C. 299 at pp. 312‑3, 47 Que. K.B. 163, Viscount Haldane stated: “Now there is no doubt that the power to control navigation and shipping conferred on the Dominion by s. 91 is to be widely construed.” By implication the Privy Council in the Montreal Harbour case recognized the jurisdiction of the federal Government over harbours. . . .

Even in the absence of authority I would have no hesitation in holding that jurisdiction over Hamilton harbour, operated as an international harbour connected with international trade routes, is implicit in the legislative power conferred on the Dominion in relation to “Navigation and Shipping”.

By analogy, harbours are as essential to the effective jurisdiction over maritime navigation as are airports to effective jurisdiction over aerial navigation. Legislative control over airports has been considered by the Courts to be an integral and vital part of the federal jurisdiction over aeronautics. This latter view was expressed by Estey, J., in Johannesson et al. v. Rural Municipality of West St. Paul et al., [1952] 1 S.C.R. 292 at p. 319, [1951] 4 D.L.R. 609 at pp. 620‑1, 69 C.R.T.C. 105:

Indeed, in any practical consideration it is impossible to separate the flying in the air from the taking off and landing on the ground and it is, therefore, wholly impractical, particularly when considering the matter of jurisdiction, to treat them as independent one from the other.

This reasoning was echoed by MacKinnon, J.A., in Re Orangeville Airport Ltd. and Town of Caledon et al. (1976), 11 O.R. (2d) 546 at p. 549, 66 D.L.R. (3d) 610 at p. 613:

As was pointed out by members of the Court in the Johannesson case, airports are an integral and vital part of aeronautics and aerial navigation, and cannot be severed from that subject‑matter so as to fall under a different legislative jurisdiction.

As Griffiths J. noted, the absence of an explicit separate head of power for “ports and harbours” is not an obstacle to the conclusion that they fall under exclusive federal jurisdiction by reason of s. 91(10), just as airports remain under federal authority despite the absence of any separate head of power — see Greater Toronto Airports Authority and Whitbread v. Walley, [1990] 3 S.C.R. 1273, at p. 1299; see also Finch C.J.B.C.’s reasons, at paras. 102-3. Thus, Justices Binnie and LeBel’s observation, at para. 36, that there is no separate or enumerated head of power over “ports” does not affect the interjurisdictional immunity analysis.

129                           As well, the long-accepted principle that s. 91(10) is to be construed broadly and is to include an extensive range of legislative matters has led to the inclusion of a wide range of subjects within its reach and within its core. According to Professor Hogg ((loose-leaf ed.), at p. 22-20), federal jurisdiction has been held to include legislative competence over navigable waters and works of navigation (see Reference re Waters and Water-Powers, [1929] S.C.R. 200), harbours (see Hamilton Harbour Commissioners) and a wide range of maritime law subject matters. In addition, ports and harbours under the control of federal Crown corporations (like the VPA) are usually international ports intimately connected to routes of international commerce, trade and shipping and, as such, form part of a class of matters traditionally associated with federal rather than provincial jurisdiction.

130                           If ports and harbours are part of the core of s. 91(10), then, in my view, it is clear that the regulation of land use within ports also falls within the core when such regulation concerns port lands and port operations and, thus, navigation and shipping. Clearly, if ports themselves are a vital aspect of navigation and shipping, then the use and development of surrounding port lands for port operations must be as well. More specifically, the land use planning activities and operations of port authorities as federally created and regulated undertakings charged with managing and operating ports, and ensuring their commercial viability, must also fall within the core of s. 91(10). The federal power over navigation and shipping must therefore also include and extend to federally regulated port authorities such as the VPA, whose creation, role and mandate are undeniably at the core of Parliament’s legislative authority over navigation and shipping, insofar as its operations and functions are exercised in support of port operations. This legislative authority is expressed most notably in the Canada Marine Act , which provides the legislative framework for the creation and governance of port authorities such as the VPA, including its power to regulate land use planning and development of port lands.

131                           Even further, in my view, the federal regulation of port lands in support of port operations also falls within the core of s. 91(10) — not just federal regulation of port lands used directly or strictly for port “activities” per se. As discussed above, the federal power over navigation and shipping is broad and comprehensive; as a result, its core must be defined in a more global and coherent fashion, such that there cannot be an easy or meaningful distinction between land use planning and development for certain port lands, but not for others simply because those other lands are used only for activities to “support” port operations. The federal regulation of land use planning and development on port lands must include all port lands, regardless of their status or degree of connection or necessity to port operations. Given the nature and scope of the federal power over the regulation of land use planning on port lands, it makes no sense to either recognize or deny federal immunity based solely on whether the parcel of port lands in question is to be used directly for “port activities” or “in support of” port operations and simply because of fears that certain uses of the latter category would appear to be in their own right somehow “less connected” to shipping and navigation. The fact remains that land use planning and development of all port lands, regardless of the specific status of individual parcels of land, lies at the core of s. 91(10). As for concerns over certain “uses” of land which might not seem closely connected to navigation and shipping, as discussed earlier, those concerns fail to recognize the nature of the doctrine of interjurisdictional immunity as being concerned with areas of potential legislative jurisdiction, not specific executive action or activities. If immunity extends to the regulation of land use planning on all port lands, then so long as that regulation is properly exercised according to the VPA’s terms and mandate and is concerned with port lands for activities in support of port operations (at a minimum) or directly for port activities, then it should not matter what is the specific status of a particular parcel of port lands, and what its specific intended use would be.

132                           The VPA, as a federal undertaking linked to navigation and shipping is thus a “vehicle” for the exercise of the power to regulate land use planning and development of port lands in support of port operations (i.e. Schedule C lands); the regulation of land use planning as exercised by the VPA for Schedule C port lands thus falls within the core of s. 91(10). As Finch C.J.B.C. noted at para. 101, “the power to plan and regulate land-use development within the Port of Vancouver is a vital part of the federal power over ‘navigation and shipping’”. The analogy to airports and related activities is again appropriate here. According to Finch C.J.B.C., at para. 103, if, in the aeronautics context, the ability to control the building, design and operational quality of airports is a vital part of the federal jurisdiction over aeronautics (citing Greater Toronto Airports Authority), then surely the “ability to plan and regulate the development and use of port lands, which is essential to ensuring the operational quality of the port” should also be considered a vital part of the federal jurisdiction over navigation and shipping.

133                           The VPA’s regulation of land use planning and development for port lands in support of port operations must therefore fall within  the core of s. 91(10), given that such regulation is integral to the VPA’s role, mandate and operation (see paras. 104-5 of Finch C.J.B.C.’s reasons). Effective and responsive land use planning is essential to the operations and responsibilities of a port, given that a “port facility” under s. 2  of the Canada Marine Act  includes “all land incidental” to the use of the port. Indeed, the ability to control and regulate the use of port lands adjacent to the actual harbour is an integral part of ensuring effective marine access to the harbour itself. The significance of land use planning to port operations (and thus to navigation and shipping) is confirmed by s. 48  of the Canada Marine Act , which specifies that a port authority’s land use plan should govern land use on all port property, rather than the municipal zoning by-laws which govern neighbouring lands. As previously noted, s. 48  requires the creation of land use plans by port authorities which contain “objectives and policies for the physical development of the real property” that the port authority “manages, holds or occupies”, and which take into account “relevant social, economic and environmental matters and zoning by-laws that apply to neighbouring lands”. According to Finch C.J.B.C., this reflects “the significance attached to the planning and regulation of land use as part of the Port Authority’s activities” (para. 106). From a practical perspective, the ability to control and regulate the use of port lands “ensures that marine access is maintained and that industries compatible with port uses are served” (para. 107), thus fulfilling the objectives of the Canada Marine Act  by ensuring adaptability and flexibility in the VPA’s operations and continued strength and competitiveness. This is also consistent with the statement in Irwin Toy that Parliament has exclusive jurisdiction over the “essential and vital elements” of a federal undertaking, “including the management of such an undertaking”, because the operation and management of an undertaking may fall within the “basic, minimum and unassailable content” of a relevant head of federal power (p. 955).

134                           Thus the regulation of land use planning and development for Schedule C lands (as exercised by the VPA) falls within the protected core of s. 91(10) for a number of reasons: because of the inclusion of ports and harbours generally in that core; because of the VPA’s status as a Crown corporation and a federally regulated undertaking whose creation and operation is integrally connected to shipping and navigation; and because the regulation of land use planning and development in respect of port lands (including activities in support of port operations) is a vital part of the VPA’s functions and operations as a federally regulated undertaking under s. 91(10) and as a vehicle for the exercise of the federal land use planning power for port lands in support of port operations.

135                           As a further element of this inquiry, it must be shown that the context of the Lafarge proposal is consistent with this characterization of the core of s. 91(10). That is, if federal immunity attaches to the VPA’s regulation of land use planning and development on port lands in support of port operations, then it must also be determined whether the approval of the concrete batch facility project proposed by Lafarge would be included in that regulatory authority. As previously stated, the interjurisdictional immunity analysis concerns jurisdiction, not action, and is therefore concerned with Parliament’s power to regulate land use planning on port lands (including lands for activities in support of port operations) as part of the core of the navigation and shipping power under s. 91(10), rather than with the actual exercise of that power in this case (i.e. the approval of the Lafarge proposal). The actual content of Lafarge’s proposal is of minor importance to the immunity analysis, given that the key question is whether the regulation of land use planning falls within the core of s. 91(10) and whether the by-law affects that regulatory power. I would note simply that the context of the Lafarge proposal illustrates the application of the analysis to a particular set of facts by providing a link to navigation and shipping which is central to the legal issues involved in this appeal. The question could therefore be asked whether the VPA’s approval of the Lafarge proposal is a valid exercise of the “core” power to regulate land use planning on port lands, including lands for activities in support of port operations. If it is, then the VPA’s decision to approve the project is clearly consistent with the above characterization of the core of s. 91(10), given that the VPA would be acting as a vehicle for Parliament in regulating land use planning within the Port of Vancouver; the VPA’s regulation of land use planning in respect of the Lafarge proposal (by approving the project) would thus be indirectly protected from the by-law. If approval of the Lafarge project is not a valid exercise of the core power to regulate land use planning in respect of port operations, then this does not mean that the City’s by-law would apply; rather, it would mean that the VPA may have exceeded its jurisdiction in going beyond its statutorily mandated powers and responsibilities, which is a separate issue.

136                           In my view, the VPA’s decision to approve the Lafarge project is consistent with a valid exercise of the power to regulate land use planning for port lands in support of port operations. The proposed project would be situated on land which is part of Burrard Inlet, which falls under Schedule C of the VPA’s Letters Patent (i.e. “real property other than federal real property”, which the VPA acquired and holds in its own name); such lands have been deemed by the Minister to be “necessary to support port operations” (by operation of s. 28(2) (b) of the Canada Marine Act , and the preamble and article 7.3(b) of the VPA’s Letters Patent). And the project is undeniably consistent with this goal of “supporting” port operations, given that the project’s ultimate objective is to enhance competitiveness and commercial viability within the Port of Vancouver for its users and for the VPA, despite any aspects of the project which, taken on their own and in isolation, may appear to be only loosely connected with shipping and navigation activities or operations. The key factor is that the approval of the project as a whole was clearly intended in law and in fact to  be consistent with the VPA’s regulation of land use planning and development on port lands, including lands for activities in support of port operations.

137                           In my view, Justices Binnie and LeBel’s conclusion (at para. 71) that the regulation of land use on port lands for activities in “support” of port operations and for a “port service industr[y] reliant on waterfront access” does not fall within the core of s. 91(10) because it is not “absolutely indispensable and necessary” to the VPA’s federal undertaking is really a reflection of their concern that certain possible uses of land (plazas, parks, restaurants, condominiums, etc.) should not receive federal immunity because they would be unconnected to navigation and shipping. With respect, as previously discussed, I do not understand how the regulation of land use planning for port lands “in support of port operations” does not fall within the core of the navigation and shipping power; nor can I understand how certain land uses which support “port service industries reliant on waterfront access” could also be excluded from the core, even if those uses in and of themselves do not appear to be “navigation and shipping” activities. By definition, such uses of land, even if they do not appear at first blush to be part of the core of navigation and shipping, are destined to support the operations of a port, which falls within the core of s. 91(10), and would occur on port lands, the development and planning of which also falls within the core of s. 91(10). The concern over apparently non-marine related uses of port lands (such as plazas, condominiums, parks, industrial facilities, etc.) seems rooted in the fear that uses of port lands which merely act as additional sources of income are not sufficiently “marine related” to count as “navigation and shipping”. It could be argued that uses of land which merely generate revenue for the VPA, although potentially falling generally under federal jurisdiction pursuant to s. 91(10), should not receive federal immunity, much in the same way that the sale of liquor on Air Canada flights could not benefit from any federal immunity because it merely maintains an airline’s “competitive edge”. In my view, the two situations are wholly dissimilar. The analogy overlooks the global and integrated nature of land use planning and development under the federal navigation and shipping power. In Air Canada v. Ontario (Liquor Control Board), [1997] 2 S.C.R. 581, a purely economic and unique activity (the sale of liquor) was found to fall outside the core of the federal aeronautics power because there was no connection whatsoever to airports, airlines or aeronautics. In the present case, however, even if some “purely” economic or commercial uses of Schedule C lands could result from the VPA’s regulation of land use planning and development on port lands, such uses are still designed to support port operations and are still occurring on port lands; these factors establish a strong connection to core matters within the federal navigation and shipping power. Furthermore, it is unfeasible to segregate control over land use planning to each use contemplated. The broad nature of the federal navigation and shipping power justifies a more global and cohesive approach in this case, which would allow immunity even for purely economic or commercial activities so long as such activities are still consistent with the regulation of port lands for port operations or in support of port operations. Immunity still protects activities which appear to be at the outer limits of the core of a federal power, even those apparently aimed at generating revenue or increasing the competitive edge of a federal undertaking, but only if such activities can be tied to a core function of the federal power (in this case, the regulation of land use planning and development on port lands, including lands for activities in support of port operations).

138                           In addition, and more importantly, I do not think this is the correct lens through which to frame the inquiry. Specific uses of land are relevant to the immunity analysis only to the extent that they might not reflect a proper exercise of the core federal power over the regulation of land use for port lands, including for activities in support of port operations. If certain uses should not receive federal immunity, that is because they lack a sufficient connection to navigation and shipping and are likely inconsistent with the federal power to regulate land use in support of port operations, and would therefore constitute an excess of federal jurisdiction. That would not change the fact that the provincial law in question here (the municipal by-law) affects a vital part of the federal navigation and shipping power because it hinders (by its application to the Port of Vancouver) the regulation of land use planning on port lands in support of operations, a protected “core” matter within s. 91(10) which is intended to be performed exclusively by a federal authority — i.e. the VPA.

3.2.2.2    The By-law’s Effect on the Core of Section 91(10)

139                           The second step in the interjurisdictional immunity test with respect to navigation and shipping is to determine whether the application of the municipal by-law in this case would “affect” a vital part of the federal legislative authority over navigation and shipping under s. 91(10) — that is, whether it would affect the core of that head of power as defined above.  More specifically, the question is whether the application of the by-law would impermissibly affect the power (as exercised by the VPA as a federal undertaking) to regulate land use planning of port lands, including for activities in support of port operations, as a “vital part” of the federal navigation and shipping power under s. 91(10). As noted earlier, the meaning of the word “affects” should be interpreted as a kind of middle ground between the perhaps overly vague or broad standard of “touches on” and the older and overly restrictive standard of  “sterilizes” or “impairs”. Without requiring complete paralysis of the core of the federal power or the operations of the undertaking, the impact of the application of the by-law must be sufficiently severe and serious to trigger immunity.

140                           In my view, this question must be answered in the affirmative here. The by-law clearly and significantly affects the VPA’s regulation of land use planning and development for port lands in support of port operations by imposing a zoning regime and an approval process for development proposals and projects on such lands. This regulation of land use planning and development within the port for purposes related to navigation and shipping  is  at the core of the federal power over navigation and shipping under s. 91(10). If the by-law were applied to the Port of Vancouver, the VPA’s ability to regulate the land use planning and development of the port would be severely affected (see para. 108 of Finch C.J.B.C.’s reasons on this point). From a practical perspective, it would create a jurisdictional nightmare, given that the port itself lies at the intersection of eight separate municipalities, all of whom could conceivably enforce a land use planning by-law regime which would apply to port lands. It is therefore clear that the application of any of these by-laws would seriously affect or hinder a vital part of the federal navigation and shipping power under s. 91(10) by affecting the ability of the VPA as a federal undertaking to regulate land use planning of port lands in support of port operations.  The ideal of federal-provincial-municipal cooperation discussed by Justices Binnie and LeBel at para. 38 must be concerned with actual facts.

141                           It should also be noted that even if this were an “impairment” situation where the provincial law in question applied only “indirectly” to the federal matter (see Irwin Toy), immunity would still attach. If the by-law were only indirectly applicable to the VPA’s regulation of land use planning and development within the port, it would still be impossible to exercise the s. 91(10) federal power over navigation and shipping (and more specifically over the regulation of land use planning and development on port lands by a federally regulated port authority) in any rational way. The federal power would consistently be subject to interference, and thus impairment, by municipal legislation and action in the form of delays, lengthy approval processes, inconsistent municipal zoning norms and the possibility of a “patchwork” of separate rules over the same relatively small land mass. Thus, even under the Irwin Toy version of the doctrine, interjurisdictional immunity should attach to the VPA’s regulation of land use in the port for port lands in support of port operations.

3.3      The Operation of the Municipal By-law

142                           Having concluded that the by-law in question is constitutionally inapplicable in this case, by reason of interjurisdictional immunity, it is neither necessary nor possible to consider whether the by-law is also constitutionally inoperable by reason of the doctrine of federal paramountcy to the extent of any conflict with s. 48  of the Canada Marine Act  and with the Port Land Use Management Plan adopted by the VPA pursuant to that legislative provision. As previously stated, consideration of the doctrine of federal paramountcy is only triggered when there are two valid and applicable laws which overlap and appear to conflict. That is not the case here, given that the municipal by-law is inapplicable.

4. Conclusion

143                           Accordingly, I would dismiss the Attorney General of British Columbia’s appeal and would answer the constitutional questions as follows:

1.    Is the City of Vancouver Zoning and Development Bylaw No. 3575 constitutionally inapplicable to property, with a legal description of Parcel P, Block 17, Plan LMP 47343, District Lot 184 and the Public Harbour of Burrard Inlet (the “Property”), held by the Vancouver Port Authority, on the basis that the Property is “public property” within the meaning of s. 91(1A) of the Constitution Act, 1867 ?

Answer: No.

2.    Is the City of Vancouver Zoning and Development Bylaw No. 3575 constitutionally inapplicable to the proposed development on the Property in view of Parliament’s legislative authority over “navigation and shipping” under s. 91(10)  of the Constitution Act, 1867 ?

Answer: Yes.

The by-law cannot apply to the  VPA’s regulation of land use planning for port lands in support of port operations, including in this case the approval of the Lafarge proposal. In the result, then, I would uphold the ultimate decision of the Court of Appeal which overturned the chambers judge’s decision and dismissed the neighbourhood association’s petition against the development project.

APPENDIX

Canada Marine Act , S.C. 1998, c. 10 

2. (1) . . .

“federal real property” has the same meaning as in section 2  of the Federal Real Property and Federal Immovables Act ;

5. . . .

“port” means the navigable waters under the jurisdiction of a port authority and the real property and immovables that the port authority manages, holds or occupies as set out in the letters patent.

7. (1) Subject to subsection (3), a port authority is an agent of Her Majesty in right of Canada only for the purposes of engaging in the port activities referred to in paragraph 28(2)(a).

28. . . .

(2) The power of a port authority to operate a port is limited to the power to engage in

(a) port activities related to shipping, navigation, transportation of passengers and goods, handling of goods and storage of goods, to the extent that those activities are specified in the letters patent; and

(b) other activities that are deemed in the letters patent to be necessary to support port operations.

(3) The activities that a port authority may engage in under paragraph 2(b) may be carried on by the port authority directly or through a wholly-owned subsidiary of the port authority.  The port authority and the subsidiary are not agents of Her Majesty in right of Canada for the purpose of engaging in those activities.

. . .

(5) A port authority or wholly-owned subsidiary of a port authority that enters into a contract other than as agent of Her Majesty in right of Canada shall do so in its own name. It shall expressly state in the contract that it is entering into the contract on its own behalf and not as agent of Her Majesty in right of Canada. For greater certainty, the contracts to which this subsection applies include a contract for the borrowing of money.

46. (1) Subject to subsection 45(3), a port authority may not dispose of any federal real property or federal immovable that it manages

. . .

(2) A port authority may dispose of any real property or immovable that it occupies or holds, other than federal real property or federal immovables, subject to the issuance of supplementary letters patent, and, without the issuance of supplementary letters patent, it may grant road allowances or easements, rights of way or licences for utilities, services or access.

Letters Patent issued to the Vancouver Port Authority (1999)

7.1 Activities of the Authority Related to Certain Port Operations. To operate the port, the Authority may undertake the port activities referred to in paragraph 28(2)(a) of the Act to the extent specified below:

                                               . . .

7.3 Activities of the Authority Necessary to Support Port Operations.  To operate the port, the Authority may undertake the following activities which are deemed necessary to support port operations pursuant to paragraph 28(2)(b) of the Act:

. . .

(b)       acquisition or disposition of real property other than federal real property subject to the issuance of supplementary letters patent;

. . .

(d)       occupying or holding real property other than federal real property;

. . .

(g)       developing, leasing or licensing real property other than federal real property, for, or in connection with the activities described in this Article 7;

(h)       carrying on activities described in section 7.3 on federal real property described in Schedule B or described as federal real property in any supplementary letters patent or on real property other than federal real property described in Schedule C or described as real property other than federal real property in any supplementary letters patent;

Appeal dismissed with costs.

Solicitor for the appellant:  Attorney General of British Columbia, Victoria.

Solicitors for the respondent Lafarge Canada Inc.:  Blake, Cassels & Graydon, Vancouver.

Solicitors for the respondent the Vancouver Port Authority:  Fasken Martineau DuMoulin, Vancouver.

Solicitor for the respondent the City of Vancouver:  City of Vancouver, Vancouver.

Solicitor for the intervener the Attorney General of Canada:  Attorney General of Canada, Toronto.

Solicitor for the intervener the Attorney General of Ontario:  Attorney General of Ontario, Toronto.

Solicitor for the intervener the Attorney General of Quebec:  Attorney General of Quebec, Québec.

Solicitor for the intervener the Attorney General of New Brunswick:  Attorney General of New Brunswick, Fredericton.

Solicitor for the intervener the Attorney General of Alberta:  Attorney General of Alberta, Edmonton.