HomeCommentaryThe Myth of Sovereign Provincial Legislatures: Canada’s Federal Crown Beyond Provincial Control

The Myth of Sovereign Provincial Legislatures: Canada’s Federal Crown Beyond Provincial Control

Following the adoption of the British North America Act 1867, the Judicial Committee of the Privy Council (the “Privy Council”) went to great pains to give full effect to the written text of the Canadian Constitution. In doing so, it emphasized the sovereignty of the federal and provincial orders of government. While the Supreme Court of Canada (the “Supreme Court”) has continued to emphasize this basic principle of Canadian federalism, it has produced a line of case law that immunizes the federal Crown from provincial legislation. It has done so all while refusing to immunize the provincial Crown from federal legislation.

Criticism of this approach extends far and wide.[1] I propose to shine a light on this problem in Canadian federalism jurisprudence, while offering two possible solutions: (1) Crown immunity that may be displaced by either order of government legislating pursuant to their exclusive powers; or (2) blanket Crown immunity at both the federal and provincial levels, subject to displacement by the corresponding legislature. Both options are doctrinally defensible, while the current approach is not.

In Hodge v The Queen, the Privy Council famously held that provincial legislatures “are in no sense delegates of or acting under any mandate from the Imperial Parliament”.[2] Rather, they possess exclusive authority to make laws pursuant to the terms of the Constitution Act, 1867. This authority is “as plenary and as ample within the limits prescribed by sec. 92 as the Imperial Parliament in the plenitude of its power possessed and could bestow.”

Then, in Liquidators of the Maritime Bank of Canada v Receiver-General of New Brunswick, the Privy Council extended the principle of provincial sovereignty to the executive branch.[3] In coming to its conclusion, the Privy Council specifically upheld the majority opinion of the Supreme Court, which at the time was an intermediate appellate court. Justice Taschereau’s reasoning is particularly informative:

In my opinion under the B.N.A. Act the executive power in the provinces is, as a general rule, vested in the same rights and privileges in the administration of the function, powers and duties thereto assigned under this act as are attached to analogous functions, powers and duties of the executive authority in England.[4]

In essence, the provincial Crown is not subordinate to the federal Crown. It possesses the same rights, powers, privileges and immunities as the British Crown. This position was then reinforced in Bonanza Creek Gold Mining v The King.[5]

At common law, there is a presumption that the Crown is not bound by statutes unless the legislature has made clear through express words or by necessary implication that the Crown should be so bound, as confirmed by the Privy Council in Province of Bombay v Municipal Corporation of Bombay.[6] Most Canadian provinces have codified this rule and/or tightened it through their various Interpretation Acts. This presumption of Crown immunity is not provided for in the text of the Constitution. Instead, it arises at common law as a Crown prerogative and acts as a rule in the interpretation of statutes. Put another way, it is part of Canada’s common law constitution and can be modified by unilateral amendment. Like any other Crown prerogative, it can be displaced by legislative enactment.

The question then becomes: in a federal state with an internally divisible Crown, who can displace this immunity? If, as the courts have long held, the provincial executive and legislative branches are sovereign, can the federal Parliament bind the provincial Crown or must the legislative assembly of a specific province do so, and vice versa?

The federal Parliament can bind the provincial Crowns. There is no dispute in the case law on this point. In Alberta Government Telephones v Canada (Canadian Radio-Television and Telecommunications Commission), Chief Justice Brian Dickson confirmed that “[i]f Parliament has the legislative power to legislate or regulate in an area, emanations of the provincial Crown should be bound if Parliament so chooses.”[8]

The Privy Council’s reasoning in Dominion Building Corp v The King indicated that provincial legislatures could also bind the federal Crown when legislating pursuant to their head of powers.[9] This reasoning was consistent with the Privy Council’s approach to Canadian federalism more generally – that is, that the legislative authority of each order of government is as “plenary and as ample” as the British Parliament within the division of powers provided by the Constitution Act, 1867.

Despite strong jurisprudence emphasizing the sovereignty of the provincial legislative assemblies, the Supreme Court has held that provincial legislation cannot bind the federal Crown. The Supreme Court first addressed this issue in Gauthier v The King – a case it heard before the ruling in Dominion Building Corp.[10] The provincial statute, the Ontario Arbitration Act, bound “His Majesty”. At a minimum, this meant that the provincial Crown was bound by its terms which made submission to arbitration irrevocable. The Supreme Court held that the federal Crown was not bound. In their view, the words “His Majesty” in a provincial statute refer only to the Crown in right of a province. While the decision was primarily centered on whether the words were specific enough to displace federal Crown immunity, Chief Justice Charles Fitzpatrick and Justice Francis Anglin (as he then was) did express the opinion, in obiter, that provincial legislatures could not, as a matter of constitutional law, bind the federal Crown in any event.[11]

The Supreme Court doubled-down in Alberta v Canadian Transport Commission.[12] In doing so, it refused to engage with the reasoning in Dominion Building Corp, which implicitly overturned its earlier finding in Gauthier.[13] In fact, one Australian judge has characterized Canada’s position as “not entirely clear”.[14] In obiter, Chief Justice Bora Laskin stated that “a Provincial Legislature cannot in the valid exercise of its legislative power, embrace the Crown in right of Canada in any compulsory regulation.” Justice Louis-Philippe Pigeon, writing for a majority of the Court, reinforced this view in Attorney General of Québec and Keable v Attorney General of Canada et al, directly citing Chief Justice Laskin in Canadian Transport Commission and Justice Anglin in Gauthier.[15]

There is no textual basis in the Constitution for this reasoning. As outlined above, since the Crown prerogative applies at common law, it follows that it can simply be displaced by statute, unless a supralegislative constitutional provision prohibits it. This is a basic hierarchy of norms analysis. However, when the Supreme Court has addressed this question, it has failed to point to a single constitutional provision or principle derived thereof in support of its position.

When we look to the “internal evidence derived from the Act”, it is evident that the Fathers of Confederation and the British Parliament specifically provided for such intergovernmental Crown immunity as it relates to Crown property. Section 125 of the Constitution Act, 1867 provides: “No Lands or Property belonging to Canada or any Province shall be liable to Taxation.” In other words, the provincial legislatures cannot pass legislation taxing federal Crown property, and vice versa. Without going into further detail, this principle of Crown immunity can be extended to Crown prerogative rights that attach to the Crown-in-Parliament and the Crown-in-Council (see ss. 17, 69 and 71 of the Constitution Act, 1867, and ss. 42 and 44-45 of the Constitution Act, 1982).

The areas that should not be protected are those that fall squarely within the “exclusive” jurisdiction of the provinces. Essentially, if parliamentary sovereignty is to mean anything, the Crown, whether federal or provincial, must bend to a legislature exercising its legislative authority. Much blood was spilt during the Glorious Revolution to solidify this basic principle of British constitutionalism.

If the Imperial Parliament had intended to immunize the federal Crown from all provincial legislation, it would surely have manifested such an intention. The explicit mention of a supralegislative Crown immunity in section 125 necessarily means that it was not intended for the other heads of power provided in the Constitution Act, 1867.

Contrary to Canada, the High Court of Australia has determined, by a thin majority, that the federal Crown can be bound by State legislation in its decision in Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority.[16] In that case, the question at issue was whether the Defence Housing Authority (the “DHA”), which had leased a house to provide lodging for defence personnel, was subject to the Residential Tenancies Act of New South Wales. The landlord had applied to the Residential Tenancies Tribunal for an order authorizing him to enter the premises. The DHA, an emanation of the Crown, argued that it was not bound by the Residential Tenancies Act. The Court concluded that the DHA was subject to the Residential Tenancies Act because it should be bound by the common law as modified by statute.

The rationale for the change was clearly enunciated by Justices Daryl Dawson, John Toohey and Mary Gaudron:

The reason why a Commonwealth statute extending to the Crown binds the Commonwealth executive is to be found in the supremacy of parliament over the executive, such supremacy being exercised by legislation passed pursuant to power conferred on the Parliament by the Constitution, not the assent of the Crown as part of the parliamentary process. Within the scope of its grant of legislative power, the parliament of a State is no less supreme than the Parliament of the Commonwealth, although State legislation which is inconsistent with Commonwealth legislation is inoperative under s 109 of the Constitution to the extent, and during the continuance, of the inconsistency.

To be clear, the majority did not open the door to the broadest application of this rule. They found that the “capacities” of the federal Crown could not be regulated by State legislation. The capacities of the Crown include, in their view, the fundamental rights of the executive provided by the Crown prerogative (ex: Crown right of priority, Crown immunity from liability in tort, etc.). This latter explanation remains somewhat ambiguous, especially since the rule against the application of State legislation is itself a Crown prerogative. The High Court does not seem to have considered this latter point. Put another way, its decision stands for the principle that State laws will apply if they regulate the exercise of capacities that the federal Crown “has in common with ordinary persons”.[17]

Justice Michael Kirby went further than his colleagues. Although dissenting in the result for other reasons, he commented on Crown immunity in a lengthy obiter, which emphasized a textual interpretation of the Constitution:

No such doctrine is expressly stated in the Constitution. […] Given the relative inflexibility of the Constitution, and its resistance to formal amendment, the derivation of implications not expressly stated and thus approved and impliedly accepted by the people of Australia, must be kept to cases where the implication is obvious, necessary and can be precisely defined. […] It is not a diminution of the sovereignty of the Commonwealth to accept that laws made by Australian citizens through their State Parliaments may, in defined circumstances, bind the Commonwealth. […] The supposed constitutional doctrine of implied immunity of the Commonwealth from State laws […] should, in my view, be reverently laid to rest.

Justice Kirby would only have limited this broad rule to cases where a State Parliament was singling out the federal Crown for “discriminatory treatment” or where a measure impaired its “integrity or autonomy”. The same rules would, in his view, apply to federal legislation binding the State Crowns.

In that sense, Canada remains an anomaly by refusing to allow the application of provincial legislation to the federal Crown. It is simply inconsistent with our federalism jurisprudence, which emphasizes the mutual sovereignty of both orders of government. Australia’s jurisprudence, while still in flux on this point and hardly perfect[18], has completely departed from its previously restrictive approach.

To be fair, while I believe the reasoning outlined above is most consistent with the Canadian constitutional text, I take the view that an argument could be made that the federal and provincial Crowns are equally constitutionally immune from legislation passed by the other order of government. Drawing from the case law on the sovereignty of the federal and provincial legislative and executive branches, it could be argued that only the relevant legislature can displace its Crown’s rights, powers, privileges and immunities. The structure of the Constitution Act, 1867 emphasizes exclusive jurisdictional spheres and vests in the provincial and federal legislatures the power to modify their own constitutions, which includes their executive branch (this power has since been transferred to ss. 44-45 of the Constitution Act, 1982). In essence, if each order of government is sovereign, the rights, powers, privileges and immunities attaching to their executive branch can only be displaced by the corresponding legislature. In fact, this type of approach was put forward by Justice Michael McHugh of the High Court of Australia, dissenting in part in Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority.

If this approach were adopted, the provincial legislatures would be able to incorporate federal legislation into provincial statutes by reference or could submit to federal legislation by virtue of the doctrine of waiver. This is currently the approach taken by the federal Parliament with regards to the federal Crown.[19] In essence, each order of government can agree to submit to the law of another level of government by express words in a statute or through waiver.

Going forward, the Supreme Court should re-think its case law on this point. I evidently have a preference based on my interpretation of the constitutional text, but both options are doctrinally defensible. There is no basis for the current blanket protection of the federal Crown from provincial legislation. In Quebec (Attorney General) v Canada (Human Resources and Social Development), the Supreme Court noted that the immunity “has tended to benefit the federal Crown asymmetrically”, and signaled a willingness for future reform, though refusing to do so in that case.[20] As Gareth Morley has already outlined, the doctrine of interjurisdictional immunity, developed as an aid in the interpretation of the division of powers, is better suited to situations where immunity from the other level of government is absolutely necessary to protect a core of federal (or provincial) jurisdiction. As Quebec (Attorney General) v Canada (Human Resources and Social Development) demonstrates, paramountcy may also be useful in these circumstances.

 

Notes

[1] Henri Brun, Guy Tremblay and Eugénie Brouillet, Droit constitutionnel, 6th ed, Québec: Éditions Yvon Blais, 2014; Peter Hogg, Patrick J. Monahan and Wade Wright, Liability of the Crown, 4th ed, Toronto: Carswell, 2011; Karen Horsman and Gareth Morley, ed., Government Liability: Law and Practice, Toronto: Carswell, 2017; Colin McNairn, Governmental and Intergovernmental Immunity in Australia and Canada, Canberra: Australian National University Press, 1978.

[2] Hodge v The Queen, (1883) 3 Cart BNA 144, CR [9] AC 13.

[3] Liquidators of the Maritime Bank of Canada v Receiver-General of New Brunswick, [1892] AC 437, 5 Cart BNA 1.

[4] Liquidators of Maritime Bank v New Brunswick (Receiver-General), (1889) 20 SCR 695, 1889 CarswellNB 86.

[5] Bonanza Creek Gold Mining v The King, [1916] 1 AC 566, 26 DLR 273.

[6] Province of Bombay v Municipal Corporation of Bombay, [1947] AC 58.

[7] In that sense, I take serious issue with Peter Hogg, Patrick J. Monahan and Wade Wright’s statement that the “Crown is not immune from statutes by virtue of any rule of the constitution.” The Crown prerogatives and the common law constitution more broadly fit into the category of “laws of the constitution” as understood by A.V. Dicey. The only distinction is that they are not supralegislative: A. V. Dicey, Introduction to the Study of the Law of the Constitution (10th ed.), London: Macmillan, 1959 at pp 23-24.

[8] Alberta Government Telephones v Canada (Canadian Radio-Television and Telecommunications Commission), [1989] 2 SCR 225 at p 275, 61 DLR (4th) 193 [Alberta Government Telephones].

[9] Dominion Building Corp v The King, [1933] AC 533, [1933] 3 DLR 577. This ruling is, however, troubling because it does not follow the general common law rule for displacement of Crown immunity. Nevertheless, it stands as an example of provincial legislatures binding the federal Crown.

[10] Gauthier v The King, (1918) 56 SCR 176, 40 DLR 353.

[11] The Court did express the view that when the federal Parliament accepts a liability for the federal Crown, the provincial statutes applicable at the time will apply to the federal Crown. In that sense, the Court accepted a doctrine of implicit waiver because “the Dominion has consented that such liability shall be ascertained and regulated, but any statutory modification of such law can only be enacted by Parliament in order to bind the Dominion Government.”

[12] Alberta v Canadian Transport Commission, [1978] 1 SCR 61, 75 DLR (3d) 257.

[13] In fact, a lower court had already determined that Gauthier was overturned by Dominion Building Corp: Bank of Nova Scotia v The Queen, 27 DLR (2d) 120 (Exch. Ct.).

[14] Re Residential Tenancies Tribunal of NSW; Ex parte Defence Housing Authority, (1997) 190 CLR 410 at 508 (Kirby J) [Re Residential Tenancies Tribunal].

[15] Attorney General of Québec and Keable v Attorney General of Canada et al, [1979] 1 SCR 218, 90 DLR (3d) 161.

[16] Re Residential Tenancies Tribunal, supra note 14 (Brennan CJ, Dawson, Toohey and Gaudron JJ).

[17] Nicholas Aroney, “The High Court of Australia: Textual Unitarism vs Structural Federalism”, in Nicholas Aroney and John Kincaid, ed, Courts in Federal Countries: Federalists or Unitarists?, Toronto: University of Toronto Press, 2017, 58.

[18] Ibid, 58-59.

[19] Horsman and Morley, Government Liability, supra note 1 at 1.30.20(3)(a); Alberta Government Telephones, supra note 8 at p 284.

[20] Quebec (Attorney General) v Canada (Human Resources and Social Development), 2011 SCC 60 at para 14.

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