Pith and substance

1. Pith and substance

2. general • CHALLENGE: If any one concept of federal power is given a broadly extended meaning, and also priority over any competing provincial concept, then we risk the federal power coming close to eliminating the provincial power. The converse is also possible. • SOLUTION: In any given statute, the court may determine the full range of features of the statute and find both federal and provincial aspects that compete to control its characterization. • If there is a clear and obvious contrast, for example if the federal aspect is clearly more important, then the power to pass the statute is exclusively federal. • “For the purpose of distributing legislative power, the challenged statute is decisively classified by its leading feature, by its more important characteristic, by its primary aspects, by its pith and substance.”

3. general • What if the contrast between the federal and provincial features is not so sharp? • If BOTH seem to be leading features: federal and provincial laws are permitted to operate concurrently, provided they do not conflict in what they prescribe for the persons subject to the law(s). • However, if there is a conflict between the federal and provincial statutes in the concurrent field, then the doctrine of dominion/federal paramountcytakes effect and the federal statute prevails. The provincial statute is displaced and suspended/inoperative to the extent of the inconsistency. [NOTE: the provincial statute is NOT struck down, but merely rendered inoperative].

4. Ancillary Powers doctrine • Some degree of jurisdictional overlap of federal and provincial powers is inevitable; therefore, the law accepts the validity of measures that lie outside a legislature’s (or Parliament’s) competence, if the measures constitute an integral part of a legislative scheme that comes within provincial (or federal) jurisdiction. • Legislation, whose pith and substance is within the jurisdiction of the enacting legislature may, to a certain extent, affect matters beyond the legislature’s jurisdiction, without necessarily being unconstitutional. • The “dominant purpose” of the legislative is decisive, and its secondary objectives and “incidental” effects do NOT have an impact on its constitutionality. • “Incidental effects” may have significant practical importance but are collateral and secondary to the enacting legislature’s mandate.

5. Walter v AB (AG); Fletcher v AB (AG), [1969] SCR 383 • Facts • Appellant prevented from selling land to a group of Hutterites by the Communal Properties Act, which froze the size of existing colonies, and did not allow any new colonies without the consent of the Lieutenant Governor of Alberta. • The plaintiffs argued that the Act was "colourable" legislation (i.e. law that had a hidden purpose), and that its true purpose concerned freedom of religion, which is a matter within the exclusive jurisdiction of the federal government. • Issue • Whether the Communal Properties Act is ultra vires the Legislature of the Province of Alberta? • Held • The Act was enacted in relation to the ownership of land in Alberta and the legislature had jurisdiction, under s. 92(13) of the B.N.A. Act, because it deals with property in the Province.

6. Walter v AB (AG); Fletcher v AB (AG), [1969] SCR 383 • Martland J [for the Court]: • The purpose of the legislation is to “control the use of Alberta lands as communal property”, not “Hutterite religious belief or worship.” • The legal impact is limited to the disposition of land. • For the legislation to be, in pith and substance, in relation to religion, it must practically impact “matters of faith and worship, … dissemination of religious faith and exercise of religious worship.” • The fact that the legislation will merely affect those of a particular religion disproportionately is not sufficient to make it a law in relation to religion.

7. Munro v Nat Capital Comm, [1966] SCR 663 • Facts • The NCC, a federal body, sought to create a green belt using its granted power of expropriation. • The body expropriated property from Munro, offering $200,000 compensation; however, he sought an order declaring the expropriation invalid or $420,000 on the basis that the power was ultra vires Parliament. • Issue • Whether the expropriation of the lands of the defendant by the is invalid because Parliament’s legislative authority under the B.N.A. 1867 to 1960does not extend to authorizing the expropriation? • Held • It was within the powers of Parliament to authorize the Commission, for the attainment of its objects and purposes as defined in the Act, to make the expropriation of the lands of the appellant

8. Munro v Nat Capital Comm, [1966] SCR 663 • Cartwright J: • The purpose (objects) of the legislation is to “assist in development” of the “seat of Government of Canada in accordance with its national significance.” • While there are legal impacts on civil rights and property within the province (ancillary effects), the do not invalidate the act. • “[O]nce it is determined that the matter in relation to which the Act is passed falls within the power of Parliament,” the fact that the legislation will merely affect the civil rights of residents “is no objection to … validity.” • “Consequential effects are not the same thing as legislative subject matter.” – Rand J in AG (Sask) v AG (Can) • “The fallacy lies in failing to distinguish between legislation affecting civil rights and legislation “in relation to” civil rights.” – Duff J in Gold Seal v Dominion Express

9. R v Morgantaler, [1993] 3 SCR 463 • Facts • Morgantaler charged with violation Nova Scotia Act that prohibited abortion outside of hospitals (within which it was strictly prohibited to emergencies). • Contravention of the Act exposed violators to summary conviction and a fine not less than $10,000. • The Crown argued that this fell within ss. 92(7), (13), and (16). • Morgantaler argued that this fell within s. 91(27) – criminal law. • Issue • Whether the Act is ultra vires the province of Nova Scotia on the ground that they are in pith and substance criminal law? • Held • Act is ultra vires the province because there exists a strong inference that the purpose and true nature of the legislation relate to a matter within the federal head of power in respect of criminal law.

10. R v Morgantaler, [1993] 3 SCR 463 • Sopinka J: • “[I]t is often the case that the legislation’s dominant purpose or aim is the key to its constitutional validity.” Sopinka refers to this as the legislation’s “central concern.” • Extrinsic evidence, not limited to those permitted for statutory interpretation can be admitted to determine the purpose or aim of the legislation. • Practical effect (in this case, whether the legislation would actually restrict the availability of abortion) is generally used to question the genuineness of the putative purpose or aim. • In this case, the aim or purpose of the legislation was to outlaw abortions as “public wrongs or crimes” – soundly within federal jurisdiction. Any aims of protecting the “safety and security” of pregnant women was, at best, ancillary.

11. R v Morgantaler, [1993] 3 SCR 463 • Sopinka J: • “In the majority of cases the only relevance of practical effect is to demonstrate an ultra vires purpose by revealing a serious impact upon a matter outside the enacting body’s legislative authority and thus either contradicting an appearance of intra vires or confirming an impression of ultra vires.”

12. Ward v Canada (AG) et al, [2002] 1 SCR 569 • Facts • Economic pressure from the EU persuaded the Malouf Commission to recommend banning the harvest and sale of blueback seals. • The Fisheries Act prohibited the sale, trade, or barter of bluebacks. • Ward challenged the prohibition as ultra vires the authority Parliament. Regulating the sale in this way had been traditionally understood as falling within s. 91(13). Issue • Whether the federal regulation prohibiting the sale, trade or barter of blueback seals is a valid exercise of the federal fisheries power or the federal criminal law power? Held • The federal regulation is intra vires Parliament under the fisheries power. The prohibition exists in the context of a scheme that is concerned with the overall “management and control” of the marine fisheries resource.

13. Ward v Canada (AG) et al, [2002] 1 SCR 569 • McLachlin CJC [for the Court]: • The question is: what is the essential character of the law? In this case, why did the regulations prohibit the sale? In other words, what was the purpose of the prohibition? What was Parliament’s object in imposing the prohibition? • The aim of prohibiting the sale was to control the harvest; by prohibiting the sale, the impetus for harvesting was eliminated. • The means adopted seemed like the only practical solution. • “The method the government chose to curtail the commercial harvest of bluebacks and whitecoats was a prohibition on their sale, trade or barter. This, as Wells J found, was because prohibiting the killing of bluebacks simply would not have worked.”

14. Ward v Canada (AG) et al, [2002] 1 SCR 569 • McLachlin CJC [for the Court]: • The prohibition was contained within a scheme that clearly fell within parliamentary jurisdiction. • “[T]he prohibition we are concerned with exists in the context of a scheme that is concerned with the overall ‘management and control’ of the marine fisheries resource.” • There was nothing to suggest Parliament was trying to regulate a local market. • Efficacy of a policy in achieving its aims is not critical [unless it makes us think that the veracity of Parliament's stated purpose is questionable].

15. Ward v Canada (AG) et al, [2002] 1 SCR 569 • In any question of this nature, there are two basic steps: • What is the pith and substance of the impugned law? • Does this pith and substance come within jurisdiction? • In this case, the answers to the questions were: • In this case, the pith and substance of the law was found to be “concerned with the management of the Canadian fishery”. [Not, as asserted, the regulation of the sale of property]. • And the fisheries power, found in s. 91(12) was found to include “general regulation of the fisheries, including their management and control” (not just conservation and protection).

16. General Motors v City National Leasing, [1989] 1 SCR 641 • Facts • GM granted preferential interest in leasing its vehicles to CNL’s competitors • CNL argued that this was a violation of the Combines Investigation Act • S. 34(1)(a) of the Act prohibited price discrimination and s. 31.1 created a civil cause of action for parties affected by price discrimination. • Issues • Whether the Combines Investigation Act or any part of it is intra viresParliament under s. 91(2) of the Constitution Act, 1867, and whether s. 31.1 is within the competence of Parliament? • Held • The Combines Investigation Act is valid under the federal trade and commerce power, in particular its "second branch" over "general" trade and commerce, and s. 31.1 is constitutionally valid by virtue of its being functionally related to the Act.

17. General Motors v City National Leasing, [1989] 1 SCR 641 • Dickson CJC [for the Court]: • Answering the issues requires inquiring into the “pith and substance” of the impugned provision. • If there is a “rational, functional connection” between s. 31.1 and the Act, s. 31.1 will be valid. • For “minor encroachments”, the rational connection test applies. • For “major encroachments”, the stricter “truly necessary” or “essential” test applies. • The more specific the federal power, the more susceptible laws enacted under the power will be to having provisions “tacked on”. • The more general the federal power, the less susceptible laws enacted under that power will be to having provisions tacked on.

18. General Motors v City National Leasing, [1989] 1 SCR 641 • Dickson CJC [for the Court]: • “[I]n a federal system it is inevitable that, in pursuing valid objectives, the legislation of each level of government will impact occasionally on the sphere of power of the other level of government; overlap of legislation is to be expected and accommodated in a federal state.” • “As the seriousness of the encroachment on provincial powers varies, so does the test required to ensure that an appropriate constitutional balance is maintained. • The more specific the head of power that is being encroached by the provision, the more likely the encroachment will be considered “major”. • The more general the head of power that is being encroached on by the provision, the more likely the encroachment will be considered “minor”.

19. General Motors v City National Leasing, [1989] 1 SCR 641 • Dickson CJC [for the Court]: • “[C]ertain federal heads of power, for example, s. 92(10) [Navigation and Shipping], are narrow and distinct powers which relate to particular works add undertakings and are this quite susceptible to having provisions “tacked-on” to legislation which is validated under them, while other federal heads of power, for example, trade and commerce, are broad and therefore less likely to give rise to highly intrusive provisions.”

20. General Motors v City National Leasing, [1989] 1 SCR 641 • Dickson CJC [for the Court]: • In this case, s. 31.1 creates a civil right of action which generally lies within provincial jurisdiction under s. 92(13) and appears to encroach to some extent on an important provincial power. • However, this is not a serious encroachment. Section 31.1 is only a remedial provision and such provisions are typically less intrusive vis-à-vis provincial powers. • Federal encroachment on this manner is not unprecedented. The Act is clearly concerned with the regulation of trade in general, rather than with the regulation of a particular industry or commodity. The encroachment has also been limited by restrictions of the Act.

21. Kitkatla Band v British Columbia, [2002] 2 SCR 146 • Facts • BC legislation provided for the protection of cultural heritage generally – this included culturally modified trees (CMTs). • There was a power under the Act that permitted the Minister to grant exemptions. • The appellant argued that the provision allowing the Minister to permit exemptions was unconstitutional. • Issue • Are the impugned provisions in pith and substance laws in relation to Indians or Lands reserved for the Indians, or alternatively, are they laws in relation to property, and, therefore, within the exclusive legislative competence of the Province under section 92(13)? Held • The provisions are valid provincial legislation falling within provincial jurisdiction over property and civil rights in the province.

22. Kitkatla Band v British Columbia, [2002] 2 SCR 146 • Lebel J: • Dickson CJ’s test in General Motors applies: • Do the impugned provisions intrude into a federal head of power, and to what extent? • If the impugned provisions intrude into a federal head of power, are they nevertheless part of a valid provincial legislative scheme? • If the impugned provisions are part of a valid provincial legislative scheme, are they sufficiently integrated with the scheme? Pith and substance of provisions Pith and substance of legislative scheme If minor encroachment, rational test. If major encroachment, essential test.

23. Kitkatla Band v British Columbia, [2002] 2 SCR 146 • Lebel J: • Dickson CJ’s test in General Motors applies: • “I thus find that there is no intrusion on a federal head of power. It has not been established that these provisions affect the essential and distinctive core values of Indianness which would engage the federal power over native affairs and First Nations in Canada.” • “They are part of a valid provincial legislative scheme.” • “The legislature has made them a closely integrated part of this scheme.”

24. Canadian Western Bank v Alberta, 2007 SCC 22 • Facts • Alberta enacted changes to its legislation making federally chartered banks subject to provincial licensing scheme regarding promotion of insurance products • Appellant banks brought application for declaration that new regulations were constitutionally inapplicable because it constituted regulation of banking by provinces contrary to s. 91(15) • Held • Appeal dismissed. “The Insurance Act and its associated regulations apply to the banks' promotion of insurance. The fact that Parliament allows a bank to enter into a provincially regulated line of business such as insurance cannot, by federal statute, unilaterally broaden the scope of an exclusive federal legislative power granted by the Constitution Act.”

25. Canadian Western Bank v Alberta, 2007 SCC 22 • Binnie and Lebel JJ: • Drawing on General Motors, the pith and substance of the impugned provision is the first question. • In this case, the pith and substance of the provisions requiring a license to promote insurance does not fall within the federal banking power. • The decisions of banks to participate in insurance does not mean that insurance is a matter falling within the banking power: • “The mere fact that the banks now participate in the promotion of insurance does not change the essential nature of the insurance activity, which remains a matter generally falling within provincial jurisdiction.”

26. Canadian Western Bank v Alberta, 2007 SCC 22 • Binnie and Lebel JJ: • Promotion of insurance is not an essential component of banking: • “The question is whether the bank in promoting optional insurance is engaged in an activity vital or essential to banking. The answer, as found by the courts in Alberta, is no. We agree with that conclusion… [As such] there is no reason why the banks should be shielded from the consequences of non-compliance with the provincial Insurance Act.” • Therefore, in this case, there is no encroachment into a federal power. • The provision itself is intra vires the province. There is no encroachment and, therefore, no question of whether the provision of rational (for a minor incursion) or essential (for a major incursion).

27. Reference re Assisted Human Reproduction Act, [2010] 3 SCR 457 • Facts • The Assisted Human Reproduction Act regulates assisted human reproduction (IVF, cloning, etc). • Quebec accepted that some of the provisions were valid criminal law, but challenged the constitutionality of the balance of the Act, arguing that some sections are attempts to regulate the whole sector of medical practice and research related to assisted reproduction, and ultra vires the federal government. • Held • Divided court (4-4 ruling): • Assisted Human Reproduction Act, viewed as a whole, is a valid exercise of the federal power over criminal law. • Some sections of the Act exceed the legislative authority of the Parliament of Canada under the Constitution Act, 1867.

28. Reference re Assisted Human Reproduction Act, [2010] 3 SCR 457 • McLachlin CJ and Binnie, Fish, and Charron JJ: • The Act, in pith and substance, is a matter falling within federal jurisdiction over criminal law s. 91(27), as the provisions contain a number of prohibitions. • “The dominant purpose and effect of the legislative scheme is to prohibit practices that would undercut moral values, produce public health evils, and threaten the security of donors, donees, and persons conceived by assisted reproduction.” • The administrative, organizational, and enforcement provisions, while not in pith and substance, matters falling within criminal law, are nonetheless valid. • “While not criminal law in pith and substance, the administrative, organizational, and enforcement provisions in ss. 14 to 68 are integrated into the prohibition regime set up by ss. 5 to 13… They generally fall under the provincial powers over property and civil rights and matters of a merely local or private nature. However, since these are very broad heads of power, the intrusion is less serious.” • As the encroachment is “minor” the “rational” or “functional” test is applicable.

29. Reference re Assisted Human Reproduction Act, [2010] 3 SCR 457 • LeBel, Deschamps, Abella, and Rothstein JJ: • First, the pith and substance of the provisions must be assessed. • If the provisions, in pith and substance, fall outside of legislative competence, the court must confirm that the pith and substance of the act itself falls within competence, and apply the applicable test: “functionality” or “necessity”. • “Finally, the impugned provisions must be considered in the context of the entire statute in order to determine whether they are sufficiently integrated with the other provisions of the otherwise valid statute. This review must make it possible to establish a relationship between the extent of the jurisdictional overflow and the importance of the provisions themselves within the statute of which they form a part. There are two applicable concepts: functionality and necessity. The more necessary the provisions are to the effectiveness of the rules set out in the part of the statute that is not open to challenge, the greater the acceptable overflow will be. Care must be taken to maintain the constitutional balance of powers at all stages of the constitutional analysis.”

30. Reference re Assisted Human Reproduction Act, [2010] 3 SCR 457 • LeBel, Deschamps, Abella, and Rothstein JJ: • The purpose and effects of the impugned provisions indicate that they fall within provincial jurisdiction. • “The impugned provisions, viewed from the perspective of their pith and substance, are not connected with the federal criminal law power.” • The encroachment is significant, therefore the correct test is one of necessity, and the provisions cannot be thought to be necessary to the prohibitory provisions under the criminal law. • “Given the extent of the overflow in this case, it cannot be found that an ancillary power has been validly exercised unless the impugned provisions have a relationship of necessity with the rest of the statute. However, the scheme established by the prohibitory provisions does not depend on the existence of the regulatory scheme. As well, it is clear from the legislative history that the prohibitory provisions were in fact always considered to stand alone and that the regulation of certain activities did not depend on the prohibition of other activities.”

31. Next Class • What happens when federal and provincial laws come into conflict? (Paramountcy and interjurisdictional immunity)