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Trade and Commerce
Transcript of Trade and Commerce
Historical Overview of the Jurisprudence
Given the historical overview provided, how would you describe the evolution regarding the scope of jurisdiction by the federal and the provincial governments respectively?
Water tight compartments?
Scope and Definition of federal "trade and commerce"
The head of power pertaining to s. 91 (2) phrased as "regulation of trade and commerce" is, on its face, sufficiently broad to capture every imaginable regulation of trade ranging from international trade treaties "down to the minute rules regulating particular trades" (@ 534)
The case involved a challenge to provincial legislation that regulated the fire insurance business in Ontario.
The Court held that the legislation was in relation to contracts within the province and was thus intra vires the province under s. 92(13) "property and civil rights in the province"
The respondents argued that the legislation was ultra vires the province as it related to the trade of insurance which related to the federal power over the "regulation of trade and commerce".
How did the court define the power under s. 91 (2)?
How did the court reason that the power was quite limited in scope despite the broad language?
Intraprovincial trade is a matter within provincial power under s. 92 (13) "property and civil rights" or undertakings of a local nature under s. 92(16)
Federal Power is confined to:
1. inteprovincial or international trade, and
2. "general" trade and commerce. (Parsons @ 534)
Prior to 1957 (Farm Products Marketing) federal legislation that regulated interprovincial trade was routinely struck down as ultra vires if the legislation caught intraprovincial trade and marketing even where the great bulk of the product was to be exported (e.g. regulation of grain industry in Eastern Terminal, 1925):
Board of Commerce (1922)
Toronto Electric (1925)
Natural Products Marketing (1937)
Margarine Reference (1951)
Yet when provinces regulated the market such as milk or gas by controlling prices of products sold in the province, those regulations would also apply to imported products and the courts generally upheld the scheme notwithstanding the impact placed on the businesses or trades in other provinces. (Hogg 21-17/18)
Home Oil Distributors (1940)
The court was asked to rule on whether certain provisions in provincial legislation regulating the pricing of coal and oil was ultra vires the province.
What did the court conclude?
What impact did the legislation have on external petroleum companies wishing to do business in British Columbia?
Farm Products Marketing Reference (1957)
Ontario enacted a broad farm marketing scheme which applied to various farming products. Some of the products would be sold extra-provincially.
The act was intended to apply only to intraprovincial transactions and on that basis was upheld as intra vires the province. (See Abott @ 544/5)
However, several judges discussed the extent of federal power over trade including that some incidental intrusion into provincial trade would be acceptable (J. Laskin @ 538, J. Rand @ 540, J. and Locke J @ 543)
Agricultural Products Marketing Reference (1978)
Justice Rand observed that, given the split in jurisdiction between the federal and provincial governments over trade, that cooperative action between the provinces and federal authorities may be the only practical and effective means to control the production and marketing of trade goods. (@ 542)
This case involves a cooperative marketing scheme for the production and sale of eggs.
The provinces and federal government agreed to provide complementary regulations which interlocked so as to ensure an effective comprehensive programme for the marketing of eggs.
A significant aspect of the case is Justice Pigeon's analysis regarding "production". He says provincial control of production is prima facie valid, irrespective of its final destination even where a significant amount is exported as long as it is not
at extra-provincial trade
Yet part of the scheme involved the federal legislation imposing provincial production quotas without any regard to whether eggs are trading internally or exported. (In fact, 90% of egg production are destined for internal markets.)
How then, given the impact this federal quota has on provincial egg production, was Justice Pigeon able to uphold the legislation as valid? (@ 548)
Professor Hogg has observed that it is "doubtful whether each level of government had succeeded in remaining within its proper sphere, but the Court was willing to give the benefit of the doubt to both the federal and provincial sides of the cooperative enterprise". (@ 21-20)
Such cooperative schemes will not easily be found ultra vires "especially after 40 years of sincere cooperation between the provinces and federal government." (@ 548)
Importantly, several judges were in agreement that provincial law to the extent it would affect interprovincial trade would be ultra vires the province. (@ 541, per Rand J., @ 543 per Locke J.)
Thus, although provincial laws are not ordinarily allowed to affect extraprovincial marketing, "this does not, in my view, prevent the use of provincial control to complement federal regulation of extraprovincial trade." (@ 549)
yes, but only one way it seems
Restrictive Federal Power
The New Approach