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CONSTITUTIONAL LAW

15 REGULATION OF TRADE AND COMMERCE: GENERAL REGULATION OF

TRADE AFFECTING THE WHOLE DOMINION

Shigenori Matsui

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INTRODUCTION

S. 91(2) of the Constitutional Act, 1867 “regulation of trade and commerce”

Second branch: general regulation of trade affecting the whole dominion

What is the scope of the power over trade and commerce for regulation of trade affecting the whole Dominion?

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I REGULATION OF TRADE AFFECTING THE WHOLE DOMINION

Citizens Insurance Company v. Parsons (1881)

John Deer Plow Co. v. Wharton [1915]

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A. G. Ontario v. A. G. Canada, [1937] No one has challenged the competence of the

Dominion to pass such legislation. If challenged one obvious source of authority would appear to be the class of subjects enumerated in s. 91(2), the Regulation of trade and commerce, referred to by the Chief Justice. There could hardly be a more appropriate form of the exercise of this power than the creation and regulation of a uniform law of trade marks.

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Macdonald v. Vapor Canada [1977]

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The plain fact is that s. 7(e) is not a regulation, nor is it concerned with trade as a whole nor with general trade and commerce. In a loose sense every legal prescription is regulatory.. but I do not read s. 91(2) as in itself authorizing federal legislation that merely creates a statutory tort, enforceable by private action, and applicable, as here, to the entire range of business relationships in any activity, whether the activity be itself within or beyond federal legislative authority.

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II CURRENT FRAMEWORK

Labatt Brewing Co. v. Canada [1980]

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“The impugned regulation in and under food and drugs act are not concerned with the control and guidance of the flow of articles of commerce through the distribution channels, but rather with the production and local sale of the specified products of the brewing industry.”

“In the context of the food and drugs act, it follows that even if this statute were to cover a substantial portion of Canadian economic activity, on industry or trade at a time…there would not, in the result, by at law a regulation of trade and commerce in the sweeping general sense contemplated in the Citizen Insurance case…

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Canada v. Canadian National Transportation Ltd. [1983], Dickson, J

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A scheme aimed at the regulation of competition is in my view an example of the genre of legislation that could not practically or constitutionally be enacted by a provincial government. Given the free flow of trade across provincial borders guaranteed by s. 121 of the Constitution Act, 1867 Canada is, for economic purposes, a single huge marketplace. If competition is to be regulated at all it must be regulated federally. …

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General Motors of Canada Ltd. v. City National Leasing [1989]

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Chief Justice Laskin, speaking for five members of the Court, proposed three hallmarks of validity for legislation under the second branch of the trade and commerce power. First, the impugned legislation must be part of a general regulatory scheme. Second, the scheme must be monitored by the continuing oversight of a regulatory agency. Third, the legislation must be concerned with trade as a whole rather than with a particular industry.

I adopted Laskin C.J.'s three criteria in Vapor Canada, supra, but added two factors that I considered indicia of the valid exercise of the general trade and commerce power: (i) the legislation should be of a nature that the provinces jointly or severally would be constitutionally incapable of enacting; and (ii) the failure to include one or more provinces or localities in a legislative scheme would jeopardize the successful operation of the scheme in other parts of the country.

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The above does not purport to be an exhaustive list, nor is the presence of any or all of these indicia necessarily decisive. The proper approach to the characterization is still the one suggested in Parsons, a careful case by case assessment.

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Four criteria remain to be examined: (1) whether the regulatory scheme operates under the oversight of an agency, (2) whether the Act is concerned with trade in general, (3) whether the provinces would be constitutionally capable of enacting combines legislation, and finally, (4) whether the failure to include one or more provinces or localities would jeopardize the successful operation of the Combines Investigation Act.

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What is the scope of the power to regulate trade affecting the whole Dominion?

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III SOME EXAMPLES

A. National Marks AG Ontario v. AG Canada [1937]

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MacDonald v. Vapor Canada Ltd [1977]

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R. v. Dominion Stores [1980]

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Kirkbi AG v. Ritvik Holdings Inc [2005]

To determine whether a particular issue requires national rather than local regulation, this Court has set out five criteria to be considered. The jurisprudence of our Court now recognizes that the following factors are hallmarks of a valid exercise of Parliament’s general trade and commerce power: (i) the impugned legislation must be part of a regulatory scheme; (ii) the scheme must be monitored by the continuing oversight of a regulatory agency; (iii) the legislation must be concerned with trade as a whole rather than with a particular industry;

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(iv) the legislation should be of a nature that provinces jointly or severally would be constitutionally incapable of enacting; and (v) the failure to include one or more provinces or localities in a legislative scheme would jeopardize the successful operation of the scheme in other parts of the country... These factors are not exhaustive and, to be valid, it is not necessary for federal legislation to satisfy all five criteria:

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If trade-marks are intended to protect the goodwill or reputation associated with a particular business and to prevent confusion in the marketplace, then a comprehensive scheme dealing with both registered and unregistered trade-marks is necessary to ensure adequate protection. The inclusion of unregistered trade-marks in the regulatory scheme is necessary to ensure the protection of all trade-marks.”

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B. Consumer Protection R. v. Dominion Stores [1980]

Labatt Brewing Co. v. Canada [1980]

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C. Regulation of federally incorporated companiesJohn Deere Low v. Wharton [1915]

Multiple Access Ltd. v. McCutcheon [1982]

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D. Protection of Personal PrivacyPIPEDA