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Interconnecting Undertakings

Jurisdiction over Transportation and Communications
by

Larry Chartrand

on 19 November 2012

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Transcript of Interconnecting Undertakings

Federal Jurisdiction over Transportation and Communication (including the internet?) 92 (10) Local Works and Undertakings other than such as are of the following Classes:

(a) Lines of Steam or other Ships, Railways, Canals, Telegraphs, and other Works and Undertakings connecting the Province with any other or others of the Provinces, or extending beyond the Limits of the Province; ... Transportation Communications A work or undertaking will come within s.92(10)(a) if:

1. the undertaking's own business operations extend beyond the provincial border, or

2. the undertaking has a close operational relationship with an interprovincial undertaking. (Hogg @ 22-6) Winner (1954) The defendant, Winner, operated a bus route that traveled from Maine through New Brunswick and into Nova Scotia. Winner would in addition to providing interprovincial an international passenger service would pick up passengers solely within New Brunswick and drop them off further down the line within New Brunswick. The plaintiff argued that the defendant must comply with provincial transportation licensing regulations, which would have prohibited the intraprovincial aspect of the business. The defendant argued that it was exempt from provincial license requirements because it was engaged in an interprovincial undertaking under s. 92(10)(a) and therefore subject to federal legislation. Because the defendant's bus business was an operation connecting one province to another it was held to be a interprovincial undertaking under the jurisdiction of the Dominion government. (@ 801) Such a finding does not mean that the province is prevented from requiring the defendant from complying with laws of universal application. (@ 802, 801) How did the court deal with the argument that the bus passenger business should be divided between the provincial part which should be subject to provincial law and the interprovincial part that would not be? (803/4) However where the provincial law has the effect of "impairing the status and capacity" of the federal undertaking, it will be found ultra vires. (@ 802) Continuous and Regular Service In a series of cases, the courts have confirmed that the degree of interprovincial travel is not determinative. Indeed a small percentage of such travel may still bring the undertaking within the scope of s. 92(10)(a). Likewise if the interprovincial travel is characterized as "casual" or "irregular", the undertaking will be classified as local and fall under provincial jurisdiction. (Hogg @ 22-10) Rather the determinative factor is whether the interprovincial service or operation is continuous and regular.(TankTruck, [6%] @ 804, Liquid Cargo, [2%] @ 805, Ottawa Carleton Regional Transit [.5%] @ 807) S.M.T. v. Ruch (1940) In determining whether a matter involves interprovincial transportation, the focus is on the nature of the operation or enterprise and not the physical structures that may be connected.

Thus, the fact that two provinces have their roads connect does not turn travel across the border on them to be interprovincial. (@ 821) (See also Hogg @ 22-5) Cottrell (1981) The defendant, Cottrell was a shipping company that arranged for the transportation of freight by combining smaller cargo orders into large scale freight hauls using various carriers (trucking companies or CN Rail) to perform the actual transportation. Despite the fact that the reason for the company's very existence was to provide interprovincial cargo shipping, the court nevertheless did not find the the business to be an interprovincial undertaking. Why? How did the court distinguish the operation of Cottrell from other cases where the operations were found to involve interprovincial transportation? Toronto v Bell Telephone (1905) The main issue in the case was whether Bell Telephone which was incorporated by Dominion statute and authorized to build a telephone system throughout Canada was required to comply with the City of Toronto municipal council by-laws and orders? How did the court resolve the issue?

What significance was it that the company had not yet actually connected the service to another province? (@ 816)

How was the analogy to the "telegraph" applied? (compare to Radio case, @ 799) How did the court respond to the argument that the company was carrying on two separate and distinct businesses, one local and one long-distance? (@ 816) A work or undertaking will come within s.92(10)(a) if:

1. the undertaking's own business operations extend beyond the provincial border, or

2. the undertaking has a close operational relationship with an interprovincial undertaking. (Hogg @ 22-6) Alberta Government Telephones (1989) The AGT company provided telephone services within Alberta. Its physical equipment stayed in Alberta but connected to other telecommunication networks at the border. Through various cooperative agreements with other networks and its participation in Telecom Canada a full service interprovincial and international network service was provided. The first step according to Justice Dickson is to determine the nature or character of the undertaking. (@ 817) But compare Ruch @ 821 The court applied by analogy cases that involved jurisdictional issues concerning "radio" and "cable" television. How did the court reason that AGT is engaged in an interprovincial undertaking? (@ 818) The Internet 1. Analogous to Captial Cities case
2. Facts demonstrate more than mere physical interconnection ... (@ 819) In a subsequent decision, Telephone Gueveremont (1994) the SCC confirmed that all telephone companies are under federal jurisdiction. (@ 820) Northern Telecom Canada Ltd. (1983) In this case, the issue was whether the operations of Northern Telecom, an affiliate, of Bell Canada are sufficiently integral to Bell Canada's operations to bring it within federal authority? On what basis did the court conclude that Northern Telecom 's involvement with the telecommunication network is an integral element in the federal works? Under what federal heads of power could it be argued that regulation of the internet could be justified? Using AGT, how would you argue that the regulation of the internet would fall under s. 92(10)(a)? Professor Judge argues that the internet can be viewed as a cross-border communications activity rather than a "borderless" communication activity.

As a result, she argues that general division of powers principles can be applied.

How convinced are you that this is the case? How might the issue of "subterfuge or colourability" arise in the context of a trucking operation? The focus is on how the highways are managed. How does this analysis relate to the principle of "interjurisdictional immunity"?
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