CANADA
PROVINCE OF NEW BRUNSWICK
CAMPBELLTON PROVINCIAL
COURT
B E T W E E N:
HER MAJESTY THE QUEEN
-v.-
GÉRARD COMEAU
BEFORE:
The Honourable Judge Ronald LeBlanc
HELD AT:
Campbellton, NB
DATE OF HEARING:
August 25, 26, 27 and 28, 2016
DATE OF DECISION:
April 29, 2016
APPEARANCES:
Mr. William Richards and Mrs. Kathryn Gregory, for the Attorney
General of New Brunswick
Mr. Arnold Schwisberg, Mr.
Mikael Bernard and Mrs. Karen
Selick, for the defendant
JUDGMENT
INTRODUCTION
1.
Mr. Gérard Comeau of Tracadie, New Brunswick, is charged by way of Notice of
Prosecution with (translation): “did have or keep liquor
not purchased from the Corporation” in
Campbellton, New
Brunswick, on October 6, 2012, an offence under section 134(b) of the
New
Brunswick Liquor Control Act.
2.
The defence submits that section 134(b) of the Liquor Control Act is an unenforceable
provincial law under which no one can be convicted. They claim
it is of no force and effect as it
contravenes section 121 of
the Constitution Act, 1867.
3.
The prosecution of course takes serious issue with this contention.
4.
This Court is called upon to interpret section 121 of the Constitution Act, 1867 and
determine how it impacts on the defendant’s rights.
FACTS
5.
The parties agreed to the essential facts giving rise to the ticket issued to Mr. Comeau.
An Agreed Statement of Facts was marked as Exhibit C-1 at the
trial. Additional facts relating to
the stop, the detention
and the seizure of the alcohol in question were supplied by Constable
Guy
1
Savoie, the police officer
who intercepted Mr. Comeau’s vehicle in Campbellton on the date
in
question.
6.
On Saturday, October 6, 2012, Mr. Gérard Comeau, a resident of Tracadie in the Acadian
Peninsula, drove to Pointe-à-la-Croix and the Listiguj
First Nation Indian Reserve in the
province of Québec
in his automobile. These communities are directly on the other side
of the
Restigouche River after crossing the J.C. Van Horne Bridge
from the city of Campbellton, New
Brunswick.
7.
Mr. Comeau was under surveillance by the RCMP once he arrived in the province of
Québec. The RCMP Campbellton Detachment had enlisted the
aid of their counterparts in
Québec to assist in a
project initiated by then Corporal René Labbé, the team
leader of the
project. There was no complaint filed with the RCMP
which initiated the investigation; it was
self-generated by the
police force and was instigated as a crime-reduction initiative. The
police
were targeting people who had in excess of five cases of
beer in their possession once they
crossed the border. The
operation involved surveillance by Québec RCMP of customers
from
New Brunswick at outlets selling liquor in Pointe-à-la-Croix
or in Listiguj, following them in
unmarked vehicles onto the
bridge, radioing ahead to the local police force and providing them
the licence plate number and description of the vehicle involved.
The vehicle would then be
stopped by members of the RCMP
Campbellton Detachment and searched for the illegally
possessed
alcohol. The operation lasted two days. It is unknown how many
tickets were issued
for this type of infraction over the two-day
span.
2
8.
Mr. Comeau had gone to Pointe-à-la-Croix and Listiguj specifically to purchase alcoholic
beverages at a cheaper price than that which he would have paid
had he purchased the alcohol in
New Brunswick. He was seen
entering Wysote’s Convenience Store, the Société
des alcools du
Québec and the Provigo Supermarket, all of
which sold alcoholic beverages. He crossed the
J.C. Van Horne
Bridge into the province of New Brunswick, intending to return to his
home in
Tracadie.
His vehicle was intercepted on Val d’Amour Street in Campbellton. The police seized
9.
from the trunk of his vehicle the following:
10.
2 cases of 24 bottles of Sleeman’s Light beer;
2 cases of 24 bottles of Miller Genuine Draft beer;
2 cases of 24 bottles of Molson M beer;
3 cases of 20 bottles of Budweiser Light beer;
3 cases of 20 bottles of Budweiser beer;
3 cases of 30 cans of Coors Light beer;
2 bottles of whiskey, 750 ml per bottle; and
1 bottle of Stinger Premixxx liqueur, 1.4 litre.
The total alcohol seized was therefore 354 bottles or cans of beer and three bottles of
liquor. Mr. Comeau was issued his ticket and was allowed to leave.
11.
It was furthermore stipulated in the Agreed Statement of Facts that New Brunswickers
purchase liquor from the province of Québec and transport it themselves into New Brunswick
3
regularly. This particular
aspect of the evidence was further highlighted by John Beckingham, a
private investigator of 27 years’ experience in the
field who had been hired by the defendant to
investigate the
frequency of alcohol purchases by New Brunswickers in the province of
Québec.
He conducted his investigation over the course of
six days during a two-week period in July and
August of 2015 by
taking photos, talking to employees and owners of either convenience
stores
or the Société des alcools du Québec,
and generally observing the number of cars parked in the
parking
lots and taking note of their province of origin. He concluded from
his observations that
during the period in question approximately
two thirds of the customers at these convenience
stores or the
Société des alcools du Québec had licence plates
originating from the province of
New Brunswick. Furthermore, at
Wysote’s Convenience Store, he noted that approximately
ninety
percent of the floor space was occupied by beer products.
THE LEGISLATION
12.
The following are the applicable provisions of the Liquor
Control Act of New Brunswick:
133
Except as provided by
this Act or the regulations, no
person shall have liquor in his
possession within the Province.
134
Except as provided by
this Act or the regulations, no
person, within the Province, by
himself, his clerk, employee,
servant or agent shall
(a)
attempt to purchase, or directly or indirectly or upon any
pretence,
or upon any device, purchase liquor, nor
(b) have or keep liquor,
not purchased from the Corporation.
43
A person who is
not prohibited by law from having or
consuming liquor may have
and consume in a residence or in a
roomette, duplex roomette,
compartment, bedroom or drawing
room occupied by him in a train,
but not in a public place
except when authorized under a permit,
4
(a) any liquor that has
lawfully been acquired by him under
this Act from the
Corporation,
(b) liquor not in excess of one bottle or beer not
in excess of
twelve pints purchased outside Canada by him or by
the
person from whom he received it as a bona fide gift, or
(c)
liquor not in excess of one bottle or beer not in excess of
twelve
pints purchased outside New Brunswick from a liquor
commission,
board or similar body in any province or territory
of Canada by
such person or by a person from whom he
received it as a bona
fide gift.
148(2) A person who violates or fails to comply with a
provision of this Act that is listed in Column I of Schedule A
commits an offence.
148(3) For the purposes of Part II of the
Provincial Offences
Procedure Act, each offence listed in Column
I of Schedule A is
punishable as an offence of the category
listed beside it in
Column II of Schedule A.
13.
Under Schedule A, in Column I, section 134(b) of the Liquor Control Act is a category E
offence.
In New Brunswick, under the Provincial Offences Procedure Act, a category E
“prescribed offence” carries, upon conviction, a
minimum fine of $240.00. When one adds to
that fine the 20%
surcharge under the Victim Services Act of New Brunswick and the
$4.50
administrative fee prescribed by regulation for the
processing of tickets, the result is a fine of
$292.50, which is
the amount indicated on Mr. Comeau’s ticket.
Section 199
provides an interpretive aid to the Act:
199(1) The purpose and
intent of this Act are to prohibit
transactions in liquor that
take place wholly within the
Province, except under control as
specifically provided by this
Act; and every section and
provision of this Act shall be
construed accordingly.
199(2)
The provisions of this Act dealing with the importation,
sale,
and disposition of liquor within the Province through the
instrumentality of the Corporation, and otherwise, provide the
means by which such control shall be made effective; and
5
nothing in this Act forbids,
affects, or regulates any transaction
that is not subject to
the legislative authority of the Province.
14.
Section 121 of the Constitution Act 1867, Stats. UK, 1867 (30 & 31 Victoria), c. 3, (the
Constitution Act, 1867) provides as follows:
s. 121 All
Articles of the Growth, Produce, or Manufacture of
any one of the
Provinces shall, from and after the Union, be
admitted free into
each of the other Provinces.
15.
Section 63(1) of the New Brunswick Provincial Offences Procedure Act actually includes
the possibility of a 30-day jail term for repeat offenders who commit a category E offence.
It
provides:
63(1) Where, in relation to a category E offence, a
defendant
is convicted of an offence and has a previous
conviction for the
same offence, the judge may, if satisfied that
no other sentence
will deter the defendant from repeating that
offence, sentence
the defendant to a term of imprisonment of not
more than
thirty days.
16.
Finally, sub-section 3(1) of the federal Importation of Intoxicating Liquors Act, R.S.C.
1985 c. I-13 will be referenced. It provides as follows:
3(1)
Notwithstanding any other Act or law, no person shall
import,
send, take or transport, or cause to be imported, sent,
taken or
transported, into any province from or out of any
place within or
outside Canada any intoxicating liquor, except
such as has been
purchased by or on behalf of, and that is
consigned to Her
Majesty or the executive government of, the
province into which
it is being imported, sent, taken or
transported, or any board,
commission, officer or other
governmental agency that, by the law
of the province, is vested
with the right of selling intoxicating
liquor.
6
THE POSITION OF THE PARTIES
THE DEFENCE
17.
The defence submits that section 134(b) of the Liquor Control Act is not an enforceable
provincial law as it constitutes a trade barrier that is
contrary to section 121 of the Constitution
Act, 1867.
In pith and substance section 134(b) is a trade barrier, either tariff or non-tariff.
They maintain that a purposive or a progressive interpretation
of section 121 of the Constitution
Act, 1867 must lead the
Court to conclude that section 121 requires free trade among
provinces
without trade barriers, tariff or non-tariff,
regardless of whether the barrier is found in provincial
legislation
or federal legislation. They submit that the wording, legislative
history, legislative
context and the scheme of the Constitution
Act, 1867 all compel the Court to conclude that
section 121 was
intended to secure free trade among the provinces, whether existing
or to be
added. They further submit that a plain reading of the
section allows for only one conclusion:
free trade. They submit
that the Supreme Court of Canada judgment in Gold Seal Limited v.
Dominion Express Company and The Attorney General of the Province
of Alberta [1921] S.C.J.
No. 43 (hereinafter referred to as Gold
Seal) and all other subsequent judicial decisions on
section 121
should be rejected outright as they are wrongly decided and of
doubtful value based
on questionable practices by certain
justices of the Supreme Court who participated in the Gold
Seal
case. Other aspects of these arguments will be addressed as they
arise.
7
THE PROSECUTION
18.
The prosecution asks the Court to address the fundamental structure of the Canadian
Constitution and its relationship to the operation of the
federation to determine whether section
134(b) of the Liquor
Control Act violates section 121 of the Constitution Act, 1867. They
maintain that rules of statutory interpretation support the
conclusion that section 121 was
intended to disarm only
provincial laws requiring cross-border tariffs or duties. They argue
that
the Canadian Constitution is composed of both written rules
(the Constitution Act, 1867, the
amended and repatriated
Constitution and various constitutional amendments) and unwritten
rules called constitutional conventions that make a living
constitution. The Constitution must
continue to evolve in order
to be responsive to the nature of the Canadian federation. They
maintain that legislative co-operation is required as between the
federal government and the
provincial legislatures. They posit
that federalism, one of the four foundational principles of the
Canadian constitution, gives Canada its unique political
character by recognizing the diversity of
the component parts of
the Constitution and the autonomy of provincial governments to
develop
their societies within their respective spheres of
jurisdiction. They invite the Court to recognize
the plurality of
the modern nation state and acknowledge that this plurality is a
rational part of
the political reality in the federal process.
They suggest this Court should adopt the statutory
interpretation
of section 121 as was decided by the Supreme Court of Canada in the
Gold Seal
case and they invite the Court to dismiss the arguments
presented by the defence. Finally, the
prosecution argues that it
is the federal Importation of Intoxicating Liquors Act, not the
provincial Liquor Control Act, that establishes prohibitions
against the importation of liquor into
8
one province from another and
since the defence has not challenged the federal Act, their
argument
should fail.
A PRELIMINARY ISSUE
19.
This last mentioned argument from the prosecution, the one proposing a rejection based
on lack of an attack on the federal Act was not, I believe, raised
during oral argument. It flows
from the Crown’s Post-trial
Brief. The defence, in their Reply Brief to the Crown’s
Post-trial
Brief, states that they do not need to challenge the
Importation of Intoxicating Liquors Act for the
purposes of their
defence because section 134(b) of the Liquor Control Act is
independent of the
Importation of Intoxicating Liquors Act.
However, in the alternative, they argue that section 3 of
the
Importation of Intoxicating Liquors Act also violates section 121 of
the Constitution Act,
1867.
20.
I will not address the issue of whether or not section 3 of the Importation of Intoxicating
Liquors Act violates section 121 of the Constitution Act, 1867.
The Importation of Intoxicating
Liquors Act is federal
legislation. The federal government was never invited to participate
in
these proceedings. If the constitutionality of federal
legislation is intended to be attacked, the
federal government
must be given the opportunity to participate and to respond. Beyond
the
basic common sense of this proposition, Rule 11 of the New
Brunswick Rules of Provincial
Court Practice required Notice of
Application to have been served on the Regional Office of the
Attorney General of Canada, which was not done. The Notice of
Application filed was served
on the local office of the Attorney
General of New Brunswick only. That was not surprising
9
since the constitutional issue
raised was: “Is section 134(b) of the Liquor Control Act, RSNB
1973, c. L-10, contrary to and in violation of section 121 of the
Constitution Act, 1867?” No
mention is made in that
document to section 3 of the Importation of Intoxicating Liquors Act.
Furthermore, the presiding judge was never asked to add further
issues to the trial. As a
consequence, for the purposes of my
analysis, I limit my comments to section 134(b) of the
provincial
Liquor Control Act, and will not deal with the constitutionality of
section 3 of the
federal Importation of Intoxicating Liquors Act.
THE ISSUE
21.
The issue is a simple one: whether section 134(b) of the Liquor Control Act of New
Brunswick violates section 121 of the Constitution Act, 1867,
and is therefore of no force or
effect as against the
defendant. This issue requires the Court to address the meaning to be
attributed to the words “admitted free” found in
section 121 of the Constitution Act, 1867. The
simplicity of the
issue is rivalled only by the complexity of the factors that the
Court must
consider in arriving at its conclusion. The very
nature of the Canadian federation is at stake.
22.
In arriving at a conclusion on this issue, the Court will examine the applicable rules of
interpretation for constitutional documents and the legislative
history of the Constitution Act,
1867, including the historic
events giving rise to the “constitutional moment”. The
Court will
also consider the context and scheme of the British
North America Act,1867 as it was proclaimed
on July 1, 1867, as
well as the relevant jurisprudence pertinent to section 121. The
Court will
also address the issue of whether the jurisprudence
has been tainted by the infamous “Duff
10
letter” which figures
prominently in the defence attack on the jurisprudential
interpretations
following the release of the Gold Seal
decision.
SOURCES OF INFORMATION FORMING CONCLUSIONS
23.
During the course of this decision, I will refer to certain facts. The proof of these facts
derives from the testimony given by the various witnesses
presented during the trial, the reports
of the two expert
witnesses, Dr. Andrew Smith and Dr. Thomas Bateman, filed as exhibits
respectively D-6 and C-11, the other exhibits tendered at the
trial, all of which were admitted
with the consent of the
opposing party, and finally by reliance on proof of facts by judicial
notice. By judicial notice, I mean matters relating to the
history of Canada that do not require to
be proven because of
their notoriety and indisputability or that are capable of immediate
and
accurate demonstration by resort to readily accessible
sources of indisputable accuracy.
Regarding this last mentioned
category of evidence, however, the Court was careful not to take
judicial notice of any fact vital to the resolution of the case
or of any other important fact in
issue.
PLACING THE ISSUE IN PROPER CONTEXT
24.
Section 134(b) of the Liquor Control Act is directed at the possession of liquor wholly
within the province. It specifically does not prohibit
importation of liquor from outside the
province. The section
provides that no person shall have in his possession liquor in the
province
that was not purchased from the Corporation.
11
25.
The Liquor Control Act then allows for exceptions, one being in relation to liquor
imported into the province from another province. That is found
in section 43(c) of the Liquor
Control Act, which allows for
a person to have in his possession in this province one bottle of
liquor or 12 pints of beer purchased from a liquor commission
outside of this province.
Although not raised by counsel at
trial, a strict interpretation of this section allows for one or the
other of the two types of liquor, not both. It actually provides
for liquor or beer. This same
section allows a person in this
province to possess liquor in the province: section 43(a). The
word
“liquor” is defined in section 1 of the Liquor Control
Act as follows:
“liquor” includes (boisson
alcoolique)
(a) any alcoholic, spirituous, vinous, fermented,
malt or other
intoxicating liquid or combination of liquids,
(b)
any mixed liquid, a part of which is alcoholic, spirituous,
vinous,
fermented, malt or otherwise intoxicating,
(c) all drinks or
drinkable liquids and all preparations or
mixtures that are
capable of human consumption and
intoxicating, and
(d) beer
and wine,
but does not include any beverage obtained by the
alcoholic
fermentation of an infusion or decoction of barley malt
and
hops or of any similar products in drinkable water and
containing 0.5 per cent or less of proof spirits.
26.
Since the definition of “liquor” includes “beer”, then one could argue the rather
improbable result that a person could have in his possession,
in compliance with section 43(c) of
the Liquor Control Act,
one bottle of beer or 12 pints of beer purchased from a liquor
commission outside of this province.
27.
Since the provincial legislation prohibits only the possession of liquor or beer purchased
from outside the province in quantities exceeding the
prescribed limit, it is not an offence under
the New
Brunswick legislation to transport the alcohol across provincial
boundaries. It is the
12
Importation of Intoxicating
Liquors Act, the federal Act, which prohibits importation of
intoxicating liquors. However, it is impossible for section
134(b) of the Liquor Control Act to
come into play unless and
until the liquor or beer is transported across the provincial
boundary.
No one can be charged under section 134(b) unless
someone transports liquor or beer across the
provincial lines.
Once the liquor or beer is in New Brunswick, in provenance from
another
province, that person can be charged with the unlawful
possession of it if the amount exceeds
that permitted by the
provincial legislation.
28.
The Importation of Intoxicating Liquors Act creates liquor monopolies across the country.
It provides in part that no person shall import or transport into
any province from any other
province any intoxicating liquor
unless that liquor has been purchased by the government of the
province into which it is being transported or imported.
Admittedly, this is a gross paraphrasing
of the section, but it
conveys the true import of it.
29.
Section 134(b) of the Liquor Control Act and section 3 of the Importation of Intoxicating
Liquors Act were the subject of debate in the New Brunswick
Court of Appeal in the case of
R. v. Gautreau [1978] N.B.J.
No. 107. The facts in that case were not dissimilar to those in the
present case. Mr. Gautreau had purchased 22 cases of beer in
Québec and was on his way to his
home in New Brunswick
when he was stopped by the RCMP. The fact this occurred in 1977,
almost 40 years ago, has not been lost on this Court. The
applicable provincial and federal
legislation in the Gautreau
case were identical to the ones being argued in this case. The trial
Judge in Gautreau expressed the tentative opinion that section
134 of the Liquor Control Act was
possibly ultra vires the
Provincial Legislature as legislation impinging upon federal
jurisdiction
13
over trade and commerce. Section
121 was not argued. The Court of Appeal dealt with the case
on
the basis of harmony between conflicting enactments. It decided, at
paragraphs 9 and 11:
9
“There is, therefore, no
conflict between the federal act
prohibiting the importation of
liquor into a province and the
prohibition of the Liquor Control
Act of having or keeping
liquor in the province not purchased
from the Corporation.
The two prohibitions are separate and
distinct. Clearly a
person may violate the prohibition against
having or keeping
liquor not purchased from the Corporation and
which has
been imported into the province in violation of the
Importation
of Intoxicating Liquors Act without violating the
provisions of
that Act. It is also apparent that a violation of
the Federal Act
against importing liquor may, in certain
circumstances, involve
a violation of the prohibition against
having or keeping liquor
not purchased from the Corporation.
This, in my opinion, does
not involve the doctrine of paramountcy
because, to use the
words of Mr. Justice Judson in O'Grady v.
Sparling, [1960]
S.C.R. 804, at 811, "both provisions can
live together and
operate concurrently".
11
In the
instant case s. 3 of the Importation of Intoxicating
Liquors Act
is unquestionably valid legislation and s. 134(b) of
the Liquor
Control Act is prima facie intra vires. Since there is
no
conflict between them, in the sense that they can stand
together,
the latter provision is not affected by the doctrine of
paramountcy”.
30.
Importantly, the Court applied an earlier ruling from the Judicial Committee of the
Judicial Council that held that a provincial legislature has no
power or authority to prohibit the
importation of
intoxicating liquor into a province. It also applied the Gold Seal
case. I refer to
paragraph 6:
6
“It is well
established by a series of judicial decisions that
while
Parliament and the Legislature together have complete
legislative
authority to regulate and control traffic in
intoxicating liquor,
certain aspects of the control fall solely in
the authority of
Parliament. Thus in A.G. Ont. v. A.G. Canada,
[1896] A.C. 348 the
Judicial Committee held that a provincial
legislature has no
power or authority to prohibit the
importation of intoxicating
liquor into the province. The
14
question was again dealt with
in Gold Seal Ltd. v. Dominion
Express Co. (1921), 62 D.L.R.
62 when the Supreme Court of
Canada held that Parliament had
power to prohibit the
importation of intoxicating liquor into
Alberta under its
general power under s. 91 of the British North
America Act "to
make laws for the peace, order and good
government of
Canada" as well as under its jurisdiction to
regulate trade and
commerce under s. 91(2)”.
31.
Additional evidence was presented to this Court regarding what I would call collateral
issues. These include the Maritime Beer Accord, the Agreement
on Internal Trade – an attempt
to create a policy
changing the amount of alcohol a person could bring into New
Brunswick –
and discussions between Ministers regarding
amending the Importation of Intoxicating Liquors
Act. I will deal
with these briefly, since none of them deal directly with the issue
of the
interpretation of the impugned legislation.
32.
The Maritime Beer Accord is nothing more than the result of a handshake deal made in
1993 between Frank McKenna, then Premier of New Brunswick, and
John Savage, then Premier
of Nova Scotia, to bypass the
controls imposed by the provinces as a result of the Importation of
Intoxicating Liquors Act. If a brewer wanted to sell beer in a
province, they had to have a
brewery in the province. Both
Moosehead and Labatt’s had breweries in New Brunswick and
Nova
Scotia. The Premiers agreed that Moosehead would close their plant in
Nova Scotia and
Labatt’s would close their plant in New
Brunswick yet both would retain the privileges
associated with
still having a plant in both provinces. With this agreement, beer
produced in
Nova Scotia was treated exactly the same as beer
produced in New Brunswick. The same
applied for Nova Scotia
produced beer. The resulting reciprocal treatment applied to the
listing,
pricing, distribution and marketing of beer and access
to points of sale. Currently, the situation
15
in New Brunswick is that beer
produced in Nova Scotia or Prince Edward Island is treated
exactly
like beer produced in New Brunswick whereas beer produced in Ontario
and Québec are
not. Beer produced by brewers in the last
two mentioned provinces, and all other provinces, is
handled
through the Alcool NB Liquor (the ANBL) warehouse, which attracts a
warehouse
handling fee, which would be considered, no doubt, to
be a tariff trade barrier.
33.
Efforts to remove trade barriers also arose out of discussions leading up to the Agreement
on Internal Trade, admitted into evidence as Exhibit C-7. The
Agreement on Internal Trade
Implementation Act, S.C. c. 17,
is the legislated result of those discussions.
34.
The preamble of the Agreement on Internal Trade states in part
the following:
“RESOLVED to:
REDUCE AND ELIMINATE,
to the extent possible, barriers
to the free movement of persons,
goods, services and
investments within Canada;”
Articles
100, 402 and 404 state the following:
Article 100: Objective
“It
is the objective of the Parties to reduce and eliminate, to the
extent possible, barriers to the free movement of persons,
goods, services and investments within Canada and to establish
an open, efficient and stable domestic market. All Parties
recognize and agree that enhancing trade and mobility within
Canada would contribute to the attainment of this goal.”
Article 402: Right of Entry and Exit
“Subject to
Article 404, no Party shall adopt or maintain any
measure that
restricts or prevents the movement of persons,
goods, services or
investments across provincial boundaries.”
Article 404:
Legitimate Objectives
16
“Where it is
established that a measure is inconsistent with
Article…402…that
measure is still permissible under this
Agreement where it can be
demonstrated that:
a) the purpose of the measure is to achieve a
legitimate
objective;
b) the measure does not operate to
impair unduly the access of
persons, goods, services or
investments of a Party that meet
that legitimate objective;
c)
the measure is not more trade restrictive than necessary to
achieve
that legitimate objective; and
d) the measure does not create a
disguised restriction on
trade”.
35.
Article 402, the right of entry and exit, is specifically excluded from operation in the case
of alcoholic beverages: article 1000(1).
36.
The preamble to the federal Agreement on Internal Trade Implementation Act specifies
the following:
“…AND WHEREAS the reduction or
elimination of barriers
to the free movement of persons, goods,
services and
investments is essential for the promotion of an
open, efficient
and stable domestic market to enhance the
competitiveness of
Canadian business and sustainable
development;”
37.
Mr. Richard Smith, the prosecution witness who testified about the Agreement on
Internal Trade and its implementation, was not an expert in the
field and only had a rudimentary
knowledge of its contents.
Being the Senior Vice President, Chief Operating Officer and
Secretary of the Board of Directors of the ANBL however, he did
have knowledge about current
liquor practices, particularly
involving New Brunswick.
To cursorily and perhaps unduly
summarize his testimony on the Maritime Beer Accord and the
implementation of the Agreement
on Internal Trade in this
province, New Brunswick continues to respect the handshake deal with
Nova Scotia and Prince Edward Island on beer distribution
notwithstanding Nova Scotia’s
17
reticence to reciprocate, and
because New Brunswick is of the opinion that there are
discriminatory practices in Québec and Ontario in
relation to alcohol products, this province
retains its
discriminatory practices against products made in their jurisdictions
(transcript, vol. 1,
page 56).
38.
Mr. Smith also testified about Exhibit C-4, a submission to the Board of Directors of
ANBL in October of 2011 dealing with a resolution to approve a
change to the existing New
Brunswick legislation on
interprovincial travel importation of liquor. In June of 2011, the
Canadian Association of Liquor Jurisdictions had approved a
resolution supporting the ability of
individuals to transport on
their person, and for their personal use, reasonable quantities of
liquor
across provincial and territorial boundaries within
Canada, subject to the proviso that each
jurisdiction would
determine what quantity of liquor was reasonable. Subsequent
conference
calls were held amongst the jurisdictions resulting in
most implementing or adopting policies to
support the resolution.
The policy change was adopted by the Board of ANBL at its October 14,
2011, meeting. The policy adopted was identical to that adopted
in Nova Scotia, and matched
quantities adopted in Ontario and
Nova Scotia. The policy adopted stated:
“New Brunswick
residents returning home from travel within
Canada may have
reasonable quantities of beverage alcohol,
obtained elsewhere in
Canada for personal use, accompany
them on their person without
penalty.
For the purposes of this policy, “reasonable
quantities” are
defined as:
1. Spirits: 3 litres;
2.
Wine: 9 litres;
3. Beer: 24 litres.
Amounts in excess of
these limits shall not be permitted and
are to be obtained via
the ANBL special order process”.
18
39.
It would appear that, flawed language notwithstanding, such a policy represented national
standards. The Department of Public Safety, responsible for the
Liquor Control Act in New
Brunswick, did not actively pursue
the request for modification to its legislation. The proposed
24
litres of beer represents the equivalent of 70 bottles, apparently.
40.
Finally, a great deal of interest was generated by the initiative of the province of British
Columbia to amend the Importation of Intoxicating Liquors Act
by proclamation of Bill C-311.
Exhibit C-6 represents the
opinions expressed in the attached letters by certain of the
politicians
in the Maritime Provinces to the proposed enactment.
The provinces of Nova Scotia, Prince
Edward Island and New
Brunswick, at least as regards the dates of the forwarding of these
letters, all opposed the proposed amendment. That amendment would
have facilitated direct
delivery of wine products to consumers in
all provinces. The provinces felt that supporting the
proposal
would endanger a reliable source of revenue. Bill C-311 allowed for
importation of
wine into another province provided that the
individual complied with the laws of the receiving
province, and
that it be for personal consumption only.
THE INTERPRETATION OF CONSTITUTIONAL DOCUMENTS
41.
As was so aptly stated by Justices Cromwell and Karakatsanis in Québec (Attorney
General) v. Canada (Attorney General) [2015] 1 S.C.R. 693 in
paragraph 3, “…the courts are
not to question
the wisdom of legislation but only to rule on its legality”.
42.
The Constitution of Canada requires a “flexible interpretation” so that it can be adapted
over time to changing conditions. This is the source of what
has been called the “progressive
19
interpretation” as
explained by Lord Sankey’s use of a colourful metaphor in
Edwards v. A.-G.
Canada [1930] A.C. 124. He described the
Constitution of Canada as “a living tree capable of
growth
and expansion within its natural limits”. He stated that the
Constitution of Canada must
not be “cut down” by “a
narrow and technical construction” but rather should be the
subject of “a
large and liberal interpretation”. This
“living tree” metaphor has been applied by the Supreme
Court of Canada in many cases, including A.G. Québec v.
Blaikie [1979] 2 S.C.R. 1016, a case
involving language rights,
A.-G. B.C. v. Canada Trust Co. [1980] 2 S.C.R. 466, a case involving
the taxation power and Re Residential Tenancies Act [1981] 1
S.C.R. 714, a case involving the
interpretation of section 96 of
the Constitution Act, 1867.
43.
In the Same-Sex Marriage Reference [2004] 3 S.C.R. 698, the question before the
Supreme Court of Canada was whether Parliament’s power
over “marriage” extended to
legalizing same-sex
marriages. The issue of the need to interpret the Constitution by
reference to
the applicable norms at the time of Confederation
came into play. In 1867, the prevailing view
was that marriage
was by its very nature a union between a man and a woman. There were
no
exceptions to this. Homosexual acts were illegal, even as
between consenting adults. The Court
said at paragraph 22, in
response to the argument that the Constitution Act, 1867 effectively
entrenched the common law definition of "marriage" as
it stood in 1867, that:
22
“…The "frozen
concepts" reasoning runs contrary to
one of the most
fundamental principles of Canadian
constitutional interpretation:
that our Constitution is a living
tree which, by way of
progressive interpretation,
accommodates and addresses the
realities of modern life…”
At paragraph 23, the Court continued:
20
23
“A large and
liberal, or progressive, interpretation
ensures the continued
relevance and, indeed, legitimacy of
Canada's constituting
document. By way of progressive
interpretation our Constitution
succeeds in its ambitious
enterprise, that of structuring the
exercise of power by the
organs of the state in times vastly
different from those in which
it was crafted…”
44.
The reason for this adaptive interpretation is explained by Professor Peter Hogg in the
Constitutional Law of Canada, 5th Edition at page 36-26 as
follows:
“It is never seriously doubted that
progressive interpretation is
necessary and desirable in order to
adapt the Constitution to
facts that did not exist and could not
have been foreseen at the
time when it was written”.
45.
Judicial interpretations must change as society’s values change and evolve. This is
inevitable. Consequently courts must not adopt inflexible
interpretations rooted in the past. On
the other hand,
progressive interpretations must not “liberate the courts from
the normal
constraints of interpretation”, per Hogg, J,
supra at 15-50. He states:
“…Constitutional
language, like the language of other texts,
must be “placed
in its proper linguistic, philosophical and
historical contexts”
(citing R v Big M Drug Mart [1985] 1 S.C.R.
295 at 344, per
Dickson, J). Nor is the original understanding
(if it can be
ascertained), irrelevant. On the contrary, the
interpretation of
a constitutional provision “must be anchored
in the
historical context of the provision” (citing R v Blais
[2003]
2 S.C.R. 236). All that progressive interpretation insists
is
that the original understanding is not binding
forever…contemporary
courts are not constrained to limit
their interpretations to
meanings that would have been
contemplated in 1867 (or whenever
the text was created)”.
46.
The prosecution has insisted on this point in their presentation. As Professor Hogg has
stated at page 60-9 of his text:
21
“The principle of
progressive interpretation means that the
views of the
framers about the meaning of particular
provisions of the
constitutional text become less and less
relevant with the
passage of time. As Beetz, J. has pointed out,
legislative
history is a “starting point”, but it cannot be
conclusive in interpreting “essential dynamic”
provisions
(citing Martin Service Station v MNR [1977] 2 S.C.R.
996 at
1006)”.
47.
The last mentioned principle no doubt arises from the following, found in Mister Justice
Beetz’ judgment in the Martin Service Station case,
supra:
“…Legislative history provides a starting
point which may
prove helpful in ascertaining the nature of a
given legislative
competence; but, as is shown by the history of
legislation
relating to bankruptcy and insolvency and by the
interpretation of the jurisdiction of Parliament in this matter,
it is seldom conclusive as to the scope of that competence for
legislative competence is essentially dynamic”.
48.
Post-Charter cases involving interpretation of the Constitution stress a “purposive
interpretation” – see for example R. v. Kapp [2008] S.C.C. 41 at paragraph 82.
This requires
the Court to examine the actual wording of the section
involved, its legislative history, the
scheme of the Act and
the legislative context. The interpretation should be a generous
rather
than a legalistic one which, while not overshooting the
actual purpose of the legislation in
question, must be placed in
its proper linguistic, philosophic and historical context: R. v. Big
M.
Drug Mart [1985] 1 S.C.R. 295 at paragraph 117.
22
THE WORDING OF SECTION 121 OF THE CONSTITUTION ACT, 1867
49.
What must be determined is the meaning to be attributed to the words “admitted free” in
section 121: “All Articles of the Growth, Produce, or
Manufacture of any one of the Provinces
shall, from and after
the Union, be admitted free into each of the other Provinces”.
50.
The defence posits that a liberal interpretation of these words leads one to conclude that
all articles grown, produced or manufactured in one province of
Canada must be admitted free
into another province of Canada
because, based on either a progressive or a purposive
interpretation
of the Constitution, the section mandates free trade among provinces
without any
barriers, whether the barrier be tariff or non-tariff
and whether the barrier is found in federal or
provincial
legislation.
51.
The Supreme Court of Canada in Gold Seal has said otherwise. They have said that
section 121 does nothing more than protect the movement of
Canadian goods against
interprovincial “custom duties”
or “charges”. This interpretation has been applied in
Canada by
all provinces and territories for over 95 years.
52.
Yet this is decidedly not what was intended by the Fathers of Confederation. The
historical context of the section in question was very ably and
thoroughly described at trial by
one of the world’s
most renowned experts on the constitutional moment, Dr. Andrew D.
Smith,
whose credentials were unimpeachable and whose testimony
was beyond reproach. I accept his
23
testimony without hesitation
and will refer to it in more detail later in this judgment when I
address the issue of the historical context of the challenged
section.
53.
Addressing myself to the wording used in the section, the question then becomes, was the
Gold Seal qualifier “admitted free from custom duties or
charges” justified? There is certainly
nothing in the
plain reading of section 121 to suggest that the words “admitted
free” meant
admitted free from custom duties or charges.
Those words do not form any part of the section.
54.
Dr. Smith provided some important background information concerning the drafting of
section 121 which I accept as having shed some light on its
proper interpretation. The British
North America Act, 1867
(UK), renamed the Constitution Act, 1867 by the Constitution Act,
1982 was an enactment of the Parliament of the United Kingdom. It
created the federal nation of
Canada in 1867 by uniting the
provinces of Canada (now Ontario and Québec), Nova Scotia and
New Brunswick into a single « Dominion » it named
Canada. The British North America Act,
1867 was the culminating
legislation emanating from agreements and discussions arising from
conferences held in Charlottetown in 1864, Québec City in
1864 and in London, England in
December 1866.
55.
The “constitutional moment” is the expression used to describe the statements and the
actions of the framers of the British North America Act, 1867
during the period from June 1864
to March 1867, the period of
time when the entirety of the details of that Act were being worked
out between the various participants.
24
56.
A rough draft constitution, called the Québec Plan of Union, was produced by the Fathers
of Confederation at the Québec conference in the fall of
1864. That draft was modified at the
constitutional
conference held in London, resulting in the London Resolutions of
1866. It was
further subsequently refined as the Fathers of
Confederation continued to develop the plan,
resulting in the
bill that was presented to the British Parliament in February and
March 1867.
57.
Section 121 of the British North America Act, 1867, as well as other parts of that bill, was
drafted by a British government lawyer named Francis Savage
Reilly. Dr. Smith testified that
Frank Reilly was born in
Dublin in 1825, was called to the English bar in 1851 and specialized
in
insurance cases and commercial arbitration. He lived in
London. Two versions of section 121
were drafted by Frank Reilly.
The initial draft, numbered 125, read like this:
125
All
Articles the Growth or Produce or Manufacture of
Ontario, Québec,
Nova Scotia, or New Brunswick, shall be
admitted free into all
Ports in Canada.
The final draft, section 121, which was enacted, reads as
follows:
121
All Articles of the Growth, Produce, or
Manufacture of
any one of the Provinces shall, from and after the
Union, be
admitted free into each of the other Provinces.
58.
As can be seen, and as confirmed through the testimony of Dr. Smith, there are two
striking differences between the two drafts.
59.
Firstly, the section 125 draft mentions specifically that the articles of growth, produce or
manufacture of Ontario, Québec, Nova Scotia or New
Brunswick was to be admitted free. The
specific provinces
were named. The reference to these specific provinces was deleted in
the
25
redrafted section 121, which
refers to all articles of growth, produce or manufacture of “any
one
of the provinces”. The striking out of the names of
the four provinces was, in his opinion, not
accidental. The
Fathers of Confederation clearly had expansion in mind. They were
thinking
forward to further provincial annexations and
consequently did not want to bind only the four
provinces
mentioned in section 125.
The articles “of any one of the provinces” were
consequently to be admitted free into each of the other
provinces, regardless of the date they
formed part of the
Dominion of Canada.
60.
Secondly, the words “into all ports in Canada” were deleted.
This change also
demonstrates that the framers of the Constitution were forward
looking individuals. This change
indicates that the Fathers
of Confederation were thinking about land-based trade, not just
waterbased trade.
Dr. Smith testified that by getting rid of that restriction, the Fathers of
Confederation were looking in the direction of a “more
comprehensive economic union”
(transcript, vol. 3, page
34). The drafting took into consideration that in the 19th century,
technology was advancing rapidly and had the effect of
“shrinking” the world. Roads were
being built. Huge
bridges spanning great distances over rivers were being constructed,
including
one over the St. Lawrence River. Railroads were going
to be connecting the provinces one to the
other. Electric
telegraph was making it easier for businessmen to interact with each
other over
great distances. All of which prompted the Fathers to
seek a more comprehensive economic
union, “an attempt to
create unfettered exchange” and to “tie the hands of
future generations of
Canadian politicians, federal and
provincial”, according to Dr. Smith (transcript, vol. 3, page
36).
26
61.
There is another important facet of this study into the wording used in the British North
America Act, 1867. In order to determine the intention of the
drafters of section 121, Dr. Smith
referred us to legislation
in the British colonies that were in existence prior to
Confederation.
Each of the colonies of Nova Scotia, New Brunswick
and the Province of Canada had drafted
legislation in an attempt
to eliminate trade barriers between them. They had, according to
Dr.
Smith, passed laws “intended to set the legislative basis for a
free trade agreement”
(transcript, vol. 3, page 37). The
Nova Scotia and the New Brunswick Acts in question were
called An
Act in relation to the Trade between the British North America
Possessions (SNS 1848
(10 & 11 Vict.) c. 1 and SNB 1850 (13
Vict.) c. 2). The Province of Canada had a title even
more
telling: An Act to facilitate Reciprocate Free Trade between this
Province and other
British North American Provinces (S. Prov. C.
1850 (13 & 14 Vict.) c. 3)
The New Brunswick legislation was passed March 30, 1848. It
read as follows:
“Whereas it is desirable that the
Trade between the British
North American Possessions of Canada,
Nova Scotia, Prince
Edward Island, Newfoundland, and New
Brunswick, should be
conducted in the most free and unrestricted
manner;
1.
Be it enacted by the Lieutenant Governor,
Legislative
Council and Assembly, That whenever from time to time
the
importation into any other of the British North American
Provinces hereinbefore mentioned, of all articles, the growth,
production or manufacture of this Province (excepting
Spirituous
Liquors) shall by Law be permitted free from Duty,
His Excellency
the Lieutenant Governor, by and with the
advice of Her Majesty’s
Executive Council, shall forthwith
cause a proclamation to be
inserted in the Royal Gazette, fixing
a short day thereafter, on
which the Duty on all articles
(excepting Spirituous Liquors)
being the growth, production,
or manufacture of any such Province
as aforesaid, (excepting
Spirituous Liquors) into which the
importation of all articles,
the growth, production or
manufacture of this Province, shall
be so permitted free from
Duty, shall cease and determine; and
from and after the day so
limited and appointed, all such
articles, the growth, produce or
manufacture of any such
27
Province, in such
Proclamation to be named, (excepting
Spirituous Liquors),
shall be admitted into this Province Duty
free, upon such proof
of origin and character as may from time
to time be required in
and by any Order of the Lieutenant
Governor in Council”.
62.
Each of the Acts had similar wording. Dr. Smith referred to this as “reciprocal free trade”
(transcript, vol. 3, page 38), through a complex mesh of
lateral and multilateral agreements as
between the North
American provinces. He made the point that there were many people in
British North America who were familiar with the principle of
“admitted free from duty”.
Certainly the politicians
of the day, including the Fathers of Confederation, would have been
aware of the difference between “admitted free” and
“admitted free of duty”.
63.
The words “All articles of the Growth, Produce or Manufacture” found in section 121 of
the British North America Act, 1867 certainly mirrors that
found in the three proclamations in
pre-Confederation
Canadian provinces. I find that significant. In drafting our
Constitution, Mr.
Reilly used wording similar to the legislative
language used in New Brunswick, Nova Scotia and
Canada to
propagate interprovincial trade between the provinces. Most
importantly, he did not
include the words free “from duty”.
Dr. Smith stated that for contemporaries, the term “admitted
free” had a different meaning than “admitted free of
duty”. To him, “admitted free” had a
broader,
more comprehensive, more robust meaning, referring to the expressions
it “Has to be
allowed in, has to be waived in”
(transcript, vol. 3, page 39 and 40). This was no accident in his
opinion. The use of the words “admitted free”
strengthened the phrasing of the sentence to more
accurately
reflect the values, ideas and principles of the drafters of the
British North America
Act, 1867.
28
64.
I will now examine the placement of section 121 in the structure of the British North
America Act, 1867 to determine if there are any significant
conclusions that could be reached
about its meaning based on
its placement in the Act.
65.
Section 121 of the Constitution Act, 1867 is in Part VIII of the Act, under the heading
“Revenues, Debts, Assets, Taxation”. These sections
(102 to 126) dealt with sundry items such
as the creation of
a Consolidated Revenue Fund, the interest on provincial public debts,
the
salary of the Governor General, assets, debts, ownership of
public property, grants to the
provinces, the continuance of
Customs and Excise laws, etc.
66.
Dr. Smith was of the opinion that the placement of section 121 in Part VIII of the Act was
significant because it was disconnected deliberately from
sections 91, 92 and 93 of the Act.
These are the sections
that deal with the distribution of powers as between the federal and
provincial governments. These address jurisdictional questions.
Section 121 on the other hand
is placed with what he referred to
as “the physical side of Confederation” being division of
assets, national debt and so forth (transcript, vol. 3, page 57
and 58). Dr. Smith was of the
opinion that when the Fathers of
Confederation were addressing the drafting of section 121 of
the
British North America Act, 1867, they were thinking about the revenue
sources of
governments, focusing on what would be a legitimate
revenue source for a government and what
wouldn’t. Part
VIII also deals with the transition from one form of government to
another and
involves a transition period.
29
67.
The prosecution takes the position that the 24 sections in Part VIII are in generic terms
referencing matters of revenue or money. It advances the theory
that since section 121 is placed
in the same Part as sections
122 to 124, which deal with the continuation of certain customs and
excise taxes and duties until they are altered by the new
Government of Canada, the position
advanced by Dr. Smith is not
sustainable.
68.
I find neither the heading, nor the placement of section 121 in Part VIII of the Act to be of
any particular benefit in arriving at a conclusion as to its
meaning. The section deals with the
subject of trade as
between the provinces. It had to be placed somewhere in the Act and
its
placement in Part VIII was perhaps nothing more than not
having another Part in which to more
appropriately place it. The
various headings were as follows: Part I: Preliminary; Part II:
Union; Part III: Executive Power; Part IV: Legislative Power;
Part V: Provincial Constitutions;
Part VI: Distribution of
Legislative Powers; Part VII: Judicature; Part IX: Miscellaneous
Provisions; Part X: Intercolonial Railway and Part XI: Admission
of Other Colonies. Indeed, it
would have been preferable to give
the section its own Part since it deals with a topic not neatly
or
clearly belonging to any of the others.
69.
Having closely examined the wording of the section, I conclude that there is nothing in
the wording used in section 121 of the Constitution Act, 1867 that
would lead one to infer that
the Fathers of Confederation
intended to restrict the words “admitted free” to
“admitted free of
customs duties or charges”. Indeed,
the opposite is the conclusion I would reach. The fact that
the
language used is similar to that found in provincial enactments in
the provinces of Canada at
the time and the fact that the section
does not use the words “free of duty” as is used in those
30
provincial enactments and in
other sections in the same Part of the British North America Act,
1867 have convinced me that the wording used in section 121
suggests free trade, not “admitted
free of customs duties
or charges”.
HISTORICAL CONTEXT
70.
I will now examine in some detail the historical context of section 121 of the Constitution
Act, 1867.
71.
The preamble to the British North America Act, 1867 includes the following two
paragraphs:
“Whereas the Provinces of Canada, Nova
Scotia and New
Brunswick have expressed their Desire to be
federally united
into One Dominion under the Crown of the United
Kingdom of
Great Britain and Ireland, with a Constitution similar
in
Principle to that of the United Kingdom:
And whereas such
a Union would conduce to the Welfare of
the Provinces and promote
the Interests of the British
Empire…”
72.
This vision of the Dominion of Canada having a Constitution similar in principle to that
of Great Britain plays a key role in the interpretation of
historical events giving rise to the
proclamation of the
British North America Act, 1867. The Fathers of Confederation
specifically
espoused what was familiar to them and rejected any
notion of an American-style of
government.
The influence of the governmental policies of Great Britain relating to
administration, management and trade were key to what the
Fathers wanted to accomplish here
in Canada. The British
North America Act, 1867 did not make any major break with colonial
31
past. Independence from the
United Kingdom was neither sought nor contemplated. The newlycreated
Dominion of Canada remained a colony of the United Kingdom. Indeed,
the resolve to
remain attached to the United Kingdom was so
strong that the Fathers of Confederation did not
include an
amending formula for the Act. Clearly they wanted continuity.
73.
According to Dr. Smith, they also wanted to create inter-colonial free trade. That, in fact,
was an important motivation for Confederation. The historical
background to be addressed in
this part of my decision
derives primarily from the testimony of Dr. Smith and from his
report.
The historical context was not disputed by the
prosecution.
74.
The positive benefits of free trade and the negative effects of trade impediments, also
called “non-tariff trade barriers” were well known
to the Fathers of Confederation and to the
politicians in
Great Britain during the events leading up to Confederation. Both
shared the
philosophy that the creation of a true common market
embracing all of the North American
colonies would be beneficial.
75.
For the purposes of the trial in this matter, a “tariff barrier” was defined as a tax or a
payment of money assessed on the basis of the weight or volume
of the product or as a
percentage of the value of the product
entering the jurisdiction in question. It adds to the cost of
imported goods and is one of several trade policies that a
country can enact. A “non-tariff
barrier” was not
specifically defined but examples were given. They can come in a
variety of
forms, all of which refer to restrictions that result
from prohibitions, conditions, or specific
market requirements
that make importation or exportation of products more difficult or
more
32
costly. Government action in
the form of laws, regulations, policies or restrictions can
effectively
increase costs and form non-tariff barriers to
trade.
76.
There was a wide range of motives for the creation of a unified Canada, many of which
related to economic development.
Since 1854, ten years before the movement towards
Confederation began in earnest, the people in British North
America – in those provinces now
known as Ontario,
Québec, Nova Scotia and New Brunswick – had prospered
economically by
exporting their natural products to the United
States under the terms of the Reciprocity Treaty. It
was a period
of tremendous prosperity for the people of British North America.
Lord Elgin on
behalf of Great Britain and its North American
colonies and the United States Secretary of State,
William Marcy
signed this Reciprocity Treaty on June 5, 1854. Its effect was to
eliminate
customs tariffs thereby giving the North American
colonists relatively unfettered access to the
US market. The
basic bargain was this: American fishermen were allowed to fish in
British
colonial waters and, in return, British North Americans
got the benefits of free trade with the
United States of America.
They could send their timber, fish, minerals and agricultural
products
across the border into the lucrative US market.
77.
The economy of the British colonies surged ahead because of this relatively unfettered
access to the US market. It gave rise to a period of tremendous
optimism in British North
America and generated extensive
economic development including, for example, the building of
railways and the opening of banks. Notwithstanding some
opposition in the United States, most
Americans favoured the
continuation of the Reciprocity Treaty. That changed, however, with
the outbreak of the civil war in the United States, which lasted
between April 12, 1861 and May
33
9, 1865.
Many Americans perceived British North Americans as sympathizing with the
Southern Confederacy. Rightly or wrongly, they attributed blame
to them for helping the south
in the US Civil War. This
resulted in the United States imposing a battery of non-tariff
barriers
for goods imported from the British colonies.
78.
US Customs officials began what has been described as the “search and detain”
protocols. These had the effect of delaying the transporting of
goods across the US border.
Increased paperwork, assertive
inspections, passport requirements and other means were used to
delay the crossing of goods, all of which resulted in increased
costs to the exportation of goods to
the US market, thereby
constituting non-tariff barriers to trade. Between 1864 and 1865,
there
was increasing pressure emanating from the United States to
abrogate the Reciprocity Treaty.
British North American
politicians complained bitterly about the search and detain
protocols.
However, being a colony and not a sovereign country at
the time, they had no ambassador in the
United States to speak on
their behalf. They turned to the British government for help. Lord
Lyons, the Senior British diplomat in Washington at the time,
spent a great deal of time
attempting to resolve the issue.
Indeed, he later recalled that during this period he spent more
time
dealing with British North American issues than he did with British
issues.
79.
Dr. Smith emphasized the importance of this topic. This issue of non-tariff trade barriers
and tariff trade barriers was uppermost in the minds of
Canadian politicians during the
constitutional moment. The
Fathers of Confederation clearly understood the distinction between
the two because of current events giving rise to the repeal of
the Reciprocity Treaty.
34
80.
Repeal required a 12-month notice period. In March 1865, notice was given. The
Reciprocity Treaty ceased to be operative on March 17, 1866. As
of that date, there was no
longer free trade between the
United States of America and the colonies of British North
America.
81.
The vast majority of people in the British North American colonies wanted a return to
reciprocity.
Indeed, in the 1860s and early 1870s the government of John A. MacDonald
repeatedly attempted to negotiate a new Reciprocity Treaty with
the United States. His goal of
restoring reciprocity enjoyed
overwhelming support in Canada. The British government also
wanted
its North American subjects to be able to trade freely with the
United States but were
unable to achieve that end. This gave rise
to a search for an alternate mode of economic
development.
The search was in earnest for alternative markets.
The strategy adopted,
according to Dr. Smith, was internal free trade within the boundaries of British North America.
82.
During this time, British North Americans were also discussing their constitutional
future. Discussions between the three Maritime Provinces, New
Brunswick, Nova Scotia and
Prince Edward Island, had been
scheduled to take place concerning a political and economic
union
between them. The Fathers of Upper Canada (now Québec and
Ontario) got wind of their
discussions and attended the
Charlottetown Conference for discussions between September 1 and
September 7, 1864. This first conference brought together 23
delegates from Upper Canada,
New Brunswick, Nova Scotia, and
Prince Edward Island. The Fathers from Upper Canada were
able to
convince the other provinces that if a union of their three provinces
was a good idea, then
the union between all provinces would be a
better one. They discussed a comprehensive union
35
that would include not only the
provinces represented, but also the possibility of other provinces
to be annexed over time. The Maritime Fathers ultimately agreed
to the proposal.
83.
The discussions resumed at the Québec conference in Québec City between October 10
and 27, 1864. This second meeting was attended by 33 delegates
representing the original
participating provinces plus two
delegates from Newfoundland. The representatives expanded on
the
Charlottetown discussions, which resulted in a series of 72
resolutions known as The Québec
Resolutions. It was there
that the Fathers of the Confederation drafted the first Constitution
of
Canada.
84.
These resolutions dealt in part with the distribution of powers between a new federal
government and the provinces, the division of Upper Canada into
two provinces to be named
Ontario and Québec, and the
financial structure of the new Dominion. It also required the new
federation to build an intercolonial railway. While the
Newfoundland and Prince Edward Island
representatives withdrew
from the project, those from Nova Scotia, New Brunswick and Upper
Canada agreed to submit the resolutions to their assemblies for
approval.
85.
The third and final conference was held in London, England, from December 1866 to
March 1867. It led to the adoption of the final version of The
Québec Resolutions. The task of
converting the rough
plan of a proposed Constitution into a working enactment began. The
attending Fathers of Confederation were assisted by British
politicians including Henry Herbert,
the 4th Earl of Carnarvon
who in 1866 had been appointed Secretary of State for the Colonies,
and, of course, Francis Reilly.
36
86.
The British, who were asked to present an enactment establishing a new country with a
new constitution, were expected to express the resolutions in
clear, eloquent legislative form.
There followed various
drafts of the sections to be proclaimed. The wording became more
refined; sections were moved around and renumbered. The British
wanted the legislation to
reflect the wishes of the Fathers of
Confederation, mature and knowledgeable men who had a
vision, who
had the right to determine their own constitutional destiny and who
sought a selfgoverning autonomous country that would continue to be
part of the British Empire.
87.
The Canadian colonies were in good hands. The British had much experience and the
required expertise to assist in the drafting of the proposed Constitution.
At the time of
Confederation, the British were considered to be experts in
diplomacy and trade negotiation.
They knew how to write a
document such as that sought by the British North Americans.
88.
The British North America Act, 1867 introduced into the British Parliament by Lord
Carnarvon on February 12 and approved by Queen Victoria on
March 29, 1867, creating the
united provinces under the
Dominion of Canada, was to take effect on July 1 of that year.
89.
The Fathers of Confederation wanted a strong, comprehensive economic union in
addition to the political union it envisaged. The 1860s were the
high-water mark in the belief in
free enterprise, in the idea
that government should allow the private sector to operate with
minimal regulation from government. This belief arose as a result
of certain events in the 1840s.
At about that time, the
protectionist movement in Great Britain was being replaced by a grass
roots movement towards a free market approach to the economy.
There was continuous debate
37
about the benefits of free
trade in the British Empire during the period of time in question. By
the 1850s, the debate had been conclusively settled. The
consensus favoured free trade. The
British concluded that by
eliminating trade barriers both internally and externally, and by
letting
the market operate freely, maximized rates of economic
growth would result. By the 1850s, both
political parties in
Great Britain shared this view. It was not a partisan issue as it had
been
previously. After 1850, most goods entering the United
Kingdom did so without paying any
customs duties. The British
government replaced the revenue that had previously been collected
from regressive customs duties with an income tax paid by the top
two percent of British
families. The concept of free trade became
deeply entrenched in British political culture. In the
1860s, the
quintessential British policy favoring free trade was recognized
internationally.
People associated Britain with free trade. Since
the Fathers of Confederation were committed to
remaining part of
the British Empire, the British views on free trade would have been
influential
to them.
90.
That was the historical context during which section 121 of the British North America
Act, 1867 came into being. Having examined this historical
context, I come to the conclusion
that section 121 was
incorporated into the British North America Act, 1867 as a result of
apprehension by the Fathers of Confederation at the prospect of
financial losses anticipated to
arise from the repeal of the
Reciprocity Treaty with the United States and from the concomitant
anxiety generated by a significant loss of an established market
for goods produced in British
North America. The firmly
established British movement towards free trade at the time of the
constitutional discussions, together with the punitive losses
brought about by the repeal of the
Reciprocity Treaty would have
had to have influenced the Fathers of Confederation to move in
38
the direction of free trade. I
have been convinced that their intent was to replace the loss of the
free trade American market with a free trade Canadian market. The
strong and harmonious
economic union envisaged by our Fathers of
Confederation had to have been based on free trade,
not on
punishing internal non-tariff trade barriers, such as had been put in
place by the
Americans. The benefits to be realized by opening up
the markets of each province to the
products of the others would
have been curtailed by allowing non-tariff barriers to be imposed by
each of them.
THE PRONOUNCEMENTS BY THE FATHERS OF CONFEDERATION
91.
What was said by the Fathers of Confederation and British parliamentarians during the
events leading up to March 1867 has also assisted this Court in
determining what was intended to
be accomplished by them.
92.
In the Confederation Debates on September 12, 1864, George Brown, a Father of
Confederation, stated that he heartily endorsed Confederation
because it would break down trade
barriers and open up a new
market. I quote:
“…Union of all Provinces would
break down all trade barriers
between us, and throw open at
once…a combined market of
four millions of people. You in
the east would send us your
fish and your coals and your West
India produce, while we
would send you in return the flour and
the grain and the meats
you now buy in Boston and New York. Our
merchants and
manufacturers would have a new field before them –
the
barrister in the smallest provinces would have the judicial
honors of all of them before him to stimulate his ambition –
a
patentee could secure his right over all British America –
and
in short all the advantages of free intercourse which has
done
so much for the United States, would at once be open to us
all”.
39
93.
In Ottawa, on November 1, 1864, Alexander Galt, another Father of Confederation, said
the following:
“Now we desire to bring about that same
free trade in our own
colonies. It is almost a disgrace to us, if
I may use the term,
that under the British flag, in the dominions
of our Sovereign
in British North America, there should be no
less than five or
six tariffs and systems of taxation; and we
cannot have trade
between one Province and another without being
subjected to
all the inconveniences which occur in a foreign
country. Surely
it is our business to remove these difficulties,
and we ought as
subjects of the Crown, whose interests are
identical, to be
united”.
94.
On November 23, 1864, in Sherbrooke, Québec, Galt explained the rationale for
Confederation by stating that one of “…the chief
benefits expected to flow from the
Confederation was the free
interchange of the products of the labor of each province”. He
said
Confederation would eliminate “restrictions on the
free interchange of commodities as to prevent
the manufactures of
the rest from finding a market in any one province, and thus from
sharing in
the advantages of the extended Union”.
95.
John A. MacDonald, to be elected the first Prime Minister of Canada, in a speech on
February 6, 1865, said:
“…if we wish... to
establish a commercial union, with
unrestricted free trade,
between people of the five provinces,
belonging, as they do, to
the same nation, obeying the Same
Sovereign…this can only
be obtained by a union of some kind
between the scattered and
weak boundaries composing the
British North American Provinces”.
96.
Again, on February 7, 1865, in a speech in the Parliament of the Province of Canada on
the desirability of Confederation, Galt referred to the prosperity North American colonies
40
enjoyed under the 1854
Reciprocity Treaty to demonstrate “the benefits of free
commercial
intercourse”. He stated that trade had
increased between British North America and the United
States,
stating it “swelled from less than $2,000,000.00 to upwards of
20,000,000.00 per annum”.
He observed that “we are
threatened with an interruption of that trade” because United
States’
politicians would soon prove “hostile to the
continuance of free commercial relations with this
country”.
Since the United States were soon to re-impose trade barriers he said
“…it is the duty
of the House to provide, if
possible, other outlets for our productions… If we have reason
to fear
that one door is about to be closed to our trade, it is
the duty of the House to endeavour to open
another”. He
stated this could be accomplished by providing for “free trade
with our own
fellow-colonists for a continued and uninterrupted
commerce which will not be liable to be
disturbed at the
capricious will of any foreign country”. He stated:
“I
believe the Union of these Provinces must cause a most
important
change in their trade. Union is free trade among
ourselves.
Perhaps insurmountable difficulties may prevent us
carrying out
any such thing whilst separated, but when united
our intercourse
must be as free as between Lancashire and
Yorkshire. The free
intercourse between the States of the
American Union – free
trade in the interchange of products,
has had more to do with
their marvellous progress than
anything that was put in their
constitution. Give us Union and
the East shall have free trade
with the West”.
97.
George-Étienne Cartier, another Father of Confederation, argued in favour of
Confederation on the grounds that it would ensure free trade
between the North American
colonies. On February 7, 1865, he
stated:
“It was of no use whatsoever that New Brunswick,
Nova Scotia
and Newfoundland should have their several custom
houses
against our trade, or that we should have custom houses
against the trade of those provinces”.
41
98.
On February 19, 1867, Lord Carnarvon said the following in the
House of Lords:
“Now these districts, which it may
almost be said that nature
designed as one, men have divided into
many by artificial lines
of separation. The Maritime Provinces
need the agricultural
products and the manufacturing skill of
Canada, and Canada
needs harbours on the coast and a connection
with the sea.
That connection, indeed, she has, during the
summer, by one of
the noblest highways that a nation could
desire, the broad
stream of the St. Lawrence; but in winter
henceforth she will
have it by the intercolonial railway. At
present there is but a
scanty interchange of the manufacturing,
mining, and
agricultural resources of these several Provinces.
They stand to
each other almost in the relation of foreign
States. Hostile
Custom Houses guard the frontiers, and adverse
tariffs choke
up the channels of intercolonial trade. There is no
uniformity
of banking, no common system of weights and measures,
no
identity of postal arrangements. The very currencies differ. …
Such then being the case, I can hardly understand that any one
should seriously dispute the advantage of consolidating these
different resources, and interests, and incidents of government
under one common and manageable system”.
99.
Lord Carnarvon therefore referenced both tariff and non-tariff barriers to trade in the
British colony in his speech to the House of Lords.
100.
On February 28, 1867, during second reading debate in the House of Commons in Great
Britain, the Under-Secretary of State for the colonies, Mr.
Charles Adderley, spoke the following
in regards to the
proposed British North America Act, 1867:
“The commercial
advantages are, perhaps, the most
prominent, and the least open
to question or dispute. The idea
is absurd of retaining a system
of different commercial tariffs
amongst these contiguous
Provinces which are ruining and
keeping down their trade. Why,
the effect of the reciprocity
treaty between the United States
and Canada was to develop
the commerce between these countries in
one year from
2,000,000 to 20,000,000 dollars. That treaty has
now ceased;
but surely that is a reason why, at least amongst
themselves,
there should be the most perfect reciprocity. Well,
then, as to
42
their mutual interests, who
can doubt that these three
Provinces – the
wheat-growing West, the manufactures Centre,
and the fisheries
and outlet on the coasts, are necessary to each
other to make one
great country jointly developing diverse
interests. Was there
ever, let me ask, a country so composed by
nature to form a great
and united community? By their mutual
resources – by the
assistance of their different interests, they
would make together
a powerful and prosperous nation. As
long as they remain separate
they are a prey to the commercial
policy of other nations, and
mutual jealousies among
themselves”.
101.
There were of course many debates and speeches leading up to Confederation. Only a
small portion of them have been referred to by me. I believe
however that the excerpts quoted
demonstrate one of the
principal motivations giving rise to the Canadian Confederation. The
colonies of British North America had lost, or were about to
lose, access to the free trade they
had enjoyed for years with
the United States. The existing systems in the Provinces were
hampering free trade as between them and something needed to be
done to open up the
movement of goods as between the provinces to
replace the loss of that American market. They
had in place
“customs houses” impeding trade. In my opinion, the
Fathers of Confederation
wanted free trade as between their
respective jurisdictions. They also wanted to eliminate
customs
duties as between the provinces in order to open up the market for
the movement of
their goods. I conclude that to the Fathers of
Confederation, the Union meant free trade, the
breaking down of
all trade barriers as between the provinces forming part of the
proposed
Dominion of Canada. The free movement of goods across
provincial borders was, in fact, one of
the major advantages the
Fathers saw in Confederation.
43
THE JURISPRUDENCE ON SECTION 121
102.
Of singular importance to the determination of these matters is the precedent set by the
Supreme Court of Canada in the Gold Seal case. The facts
leading up to the release of that
judgment are important, as
the defence alleges impropriety by certain of its participants. They
also allege it was wrongly decided.
103.
The Gold Seal Company, a liquor merchant in Calgary, Alberta, carried on an
interprovincial business throughout Canada as an importer, an
exporter and a distributor of all
kinds of wines, spirits and
malt liquors. On February 1, 1921, Gold Seal tendered to the
Dominion Express Company packages of intoxicating liquors to be
shipped to a person’s private
dwelling outside of Alberta.
Dominion Express refused. They stated that they would not carry
their intoxicating liquors from Alberta to any person or
corporation in Saskatchewan or
Manitoba. They did this because
the Government of Canada had enacted the Canada
Temperance
Amending Act, which came into force in Alberta just a few days
previously.
104.
Without going into detail about the steps that legislation had to go through in order to
take effect, the end result was that the federal cabinet had to
issue a proclamation bringing the
Act into force in Alberta, then
it required that the proclamation “…name the day on
which…[the]
prohibition will go into force”. The
proclamation of the governor in council did not name the
day on
which the prohibition was to come into force. Gold Seal thereupon
argued that the
Canada Temperance Amending Act was not properly
proclaimed.
44
105.
The issue before the Supreme Court of Canada was whether or not the federal cabinet’s
proclamation of the Act had complied with the requirements of
section 152(g) of the Canada
Temperance Amending Act. Factums
filed by both Gold Seal and the Attorney General addressed
that
issue. Their factums did not address section 121 of the British North
America Act, 1867.
Oral argument in the Supreme Court took place
on May 10 and 11, 1921. During oral argument,
Gold Seal must have
raised the section 121 issue. The Court reserved its decision. On
June 4,
1921, prior to the Supreme Court issuing judgment in the
case, the federal government enacted
the Proclamation Validation
Act, S.C. 1921 (11 & 12 Geo. V) c. 20. Sections 1 and 2 of that
Act
declared as follows:
1.
No proclamation heretofore or
hereafter issued under
Part IV of the Canada Temperance Act, as
enacted by chapter
eight of the Statutes of 1919, second session,
shall be deemed to
be void, irregular, defective or insufficient
for the purpose
intended merely because it does not set out the
day on which,
in the event of the vote being in favour of the
prohibition, such
prohibition shall go into force, provided it
does state that such
prohibition shall go into force on such day
and date as shall by
order in council under section 109 of the
Canada Temperance
Act be declared.
2.
No order of the
Governor in Council declaring
prohibitions in force in any
province, whether heretofore
passed or hereafter to be passed,
shall be or shall be deemed to
have been ineffective,
inoperative, or insufficient to bring
prohibition into force at
the time thereby declared by reason of
any error, defect, or
omission in the proclamation or other
proceedings preliminary to
the vote of the electors, or in the
taking, polling, counting or
in the return of the vote or in any
step or proceeding precedent
to the said order, unless it appear
to the court or judge before
whom the prohibition is in
question that the result of the vote
was thereby materially
affected.
45
106.
briefs.
The Supreme Court then allowed the parties to the proceedings
to file supplementary
The written judgment was released on
October 18, 1921.
It was held that the
Proclamation Validation Act, making no exception from its
application to proceedings in any
suit pending at the time of
its passage, was valid legislation and cured what would have been
held to be a fatal defect in the proclamation. The proclamation
having been “cured”, the validity
of the proceedings
was upheld. An otherwise invalid proclamation was thereby saved by
the
Proclamation Validation Act.
107.
As to section 121 of the British North America Act, 1867, the comments by Duff,
Mignault, and Anglin JJ., have been subsequently interpreted to
ring the death knell to what the
defence alleges is a
constitutionally protected right to interprovincial free trade.
Duff J. said at page 456:
“The capacity of the
Parliament of Canada to enact the
amendment of 1919 is denied.
With this I do not agree. And,
first, I am unable to accept the
contention founded upon
section 121 of the B.N.A. Act; the
phraseology adopted, when
the context is considered in which this
section is found, shews, I
think, that the real object of the
clause is to prohibit the
establishment of customs duties
affecting inter-provincial trade
in the products of any province
of the Union.”
Anglin J. said, at page 466:
“Neither is the
legislation under consideration in my opinion
obnoxious to s. 121
of the B.N.A. Act. The purpose of that
section is to ensure that
articles of the growth, produce or
manufacture of any province
shall not be subjected to any
customs duty when carried into any
other province.
Prohibition of import in aid of temperance
legislation is not
within the purview of the section.”
46
Migneault J. stated at pages
469-470:
“Nor do I think that any argument can be based
on sec. 121 of
the British North America Act which states that
all articles of
the growth, produce or manufacture of any of the
provinces
shall, from and after the Union, be admitted free in
each of the
other provinces.
This section, which so far as I
know has never been judicially
construed, is in Part VIII of the
Act, bearing the heading
"Revenues, Debts, Assets,
Taxation," and is followed by two
sections which deal with
customs and excise laws and custom
duties.
In the United
States constitution, to which reference may be
made for purposes
of comparison, there is a somewhat similar
provision (art. 1,
Sec. 9 par. 5 and 6) the language of which,
however, is much
clearer than that of sec. 121. It says:
No tax or duty shall be
laid on articles exported from any state.
No preference shall be
given, by any regulation of commerce or
revenue, to the ports of
one state over those of another; nor
shall vessels bound to or
from one state be obliged to enter,
clear or pay duties to
another.
I think that, like the enactment I have just quoted, the
object of
section 121 was not to decree that all articles of the
growth,
produce or manufacture of any of the provinces should be
admitted into the others, but merely to secure that they should
be admitted "free," that is to say without any tax or
duty
imposed as a condition of their admission. The essential
word
here is "free" and what is prohibited is the
levying of custom
duties or other charges of a like nature in
matters of
interprovincial trade”.
108.
The next case to deal with section 121 of the British North America Act, 1867 was issued
from the Judicial Committee of the Privy Council on appeal from
the Supreme Court of Canada
in Atlantic Smoke Shops Limited
v. Conlon [1943] 4 D.L.R. 81 (referred to as Atlantic Smoke
Shops),
a case emanating from New Brunswick.
The question in that case was the
constitutionality of “An act to provide for imposing a tax on the consumption of tobacco” (the
47
Tobacco Tax Act), proclaimed
by the legislature of the Province of New Brunswick in 1940. The
retail operator of a store in Saint John, New Brunswick, who
sold tobacco products argued that
the provisions of the Tobacco
Tax Act were ultra vires of the legislature of the Province of New
Brunswick. Section 5 of that Act required of the resident the
payment of the tax on tobacco
brought in for their personal
consumption from other provinces. The Court said the following
relative to section 121 in paragraph 9:
“…Sect.
121 was the subject of full and careful exposition by
the Supreme
Court of Canada in Gold Seal, Ld. v. Attorney
General for
Alberta, (1921), 62 S.C.R. (Can.) 424, 439, where
the question
arose whether the parliament of Canada could
validly prohibit the
importation of intoxicating liquor into
those provinces where its
sale for beverage purposes was
forbidden by provincial law. The
meaning of s. 121 cannot
vary according as it is applied to
dominion or to provincial
legislation, and their Lordships agree
with the interpretation
put on the section in the Gold Seal case,
(1921), 62 S.C.R.
(Can.) 424, 439. Duff J. held that "the
phraseology adopted,
when the contest (sic) is, considered in
which the section is
found, shows, I think, that the real object
of the clause is to
prohibit the establishment of customs duties
affecting interprovincial trade in the products of any province of
the union",
Ibid. 456. (A.C.), Anglin J. said: "The
purpose of that section is
to insure that articles of the growth,
produce or manufacture
of any province shall not be subjected to
any customs duty
when carried into any other province",
(1921), 62 S.C.R.
(Can.) 466. Mignault J. described the purpose
of the section as
being to secure that admission of the articles
described should
be "without any tax or duty imposed as a
condition of their
admission", Ibid. 470, (A.C.). These
considerations make it
clear that if s. 5 of the Tobacco Tax Act
is not obnoxious to s.
122 of the British North America Act, it
is also free from
objection on the score of s. 121. That the tax
is taxation within
the province is, their Lordships think, clear
for the reasons
given by Taschereau J”.
109.
The reasoning behind the conclusion is found in paragraph 8 of
the decision:
8
“Objection is taken to the validity
of s. 5 on the alleged
ground that it offends against ss. 121 and
122 of the British
48
North America Act. When the
scheme of Canadian federation
is considered as a whole, the
purpose and effect of these two
sections seem plain enough.
Previous to the date of federation,
each province was a separate
unit raising part of its revenue by
customs duties on certain
commodities imported from outside it might even be from another
province. One essential purpose
of federating such units is that
they should cease to maintain
customs barriers against the
produce of one another, and
hence s. 121, supplemented by s. 123,
established internal free
trade from July 1, 1867, which was the
date proclaimed for the
Union. It was not, however, practicable
to abolish provincial
customs entirely on that date. Ordinary
customs and excise
are, as Mill's treatise shows, the classical
examples of indirect
taxation, and thus fell thenceforward within
the exclusive
legislative competence of the dominion parliament.
But until
the Dominion had imposed and collected sufficient taxes
on its
own account, it was desirable to continue to gather in the
revenue arising from the customs and excise laws of the
provinces (with the exception of inter-provincial import
duties), though it would appear from s. 102 of the British
North
America Act that after federation the proceeds passed
into the
consolidated revenue fund of the Dominion. A
dominion tariff has
long since been enacted and the customs
and excise laws of the
different provinces have been brought to
an end by dominion
legislation. The question, therefore, on this
part of the case,
which has to be determined is whether s. 5 of
the New Brunswick
Act is invalid as amounting to an attempt
by the province to tax
in disregard of the restrictions contained
in ss. 121 and 122 of
the constitution. If s. 5 purports to impose
a duty of customs,
it is wholly invalid, and, if it denies free
admission of tobacco
into New Brunswick, it is invalid so far as
this refers to
tobacco manufactured in another province of
Canada. Their
Lordships have reached the conclusion that s. 5
does not impose a
customs duty…”
110.
The next case to deal with section 121 is Murphy v. CPR [1958] S.C.R. 626 (referred to
as Murphy). That case involved one Stephen Francis Murphy who
was the president of a
company he incorporated in British
Columbia called Mission Turkey Farms Ltd. His company
raised
turkeys in British Columbia. On September 29, 1954, Mr. Murphy
tendered to the
Canadian Pacific Railway Company in Winnipeg,
Manitoba, one sack of wheat, one of oats and
49
one of barley, requesting
that it transport them to his farm in Princeton, British Columbia.
The
grain had been grown in Manitoba. It was obviously a test
case, intended to question the validity
of certain legislation.
CPR refused to accept the grain for transport. It alleged that it was
prohibited from doing so by reason of the provisions of the
federally enacted Canadian Wheat
Board Act, and more
specifically, section 32 of that Act. That section provided that no
person
other than the Canadian Wheat Board could transport or
cause to be transported from one
province to another, or export
from Canada any grain owned by a person other than the Board.
The
Board was required to purchase all wheat, oats and barley produced in
the three Prairie
Provinces.
Mr. Murphy alleged that the Canadian Wheat Board Act was ultra vires the
Parliament of Canada and that a prohibition against farmers
shipping wheat out of a province
was unconstitutional because
it violated section 121 of the British North America Act, 1867. He
lost on both counts. The Court held that the Canadian Wheat Board
Act was valid federal
legislation as it was in relation to a
section 91 power involving regulation of trade and
commerce.
Locke J., speaking on behalf of the majority, summarily dismissed the
section 121
argument citing Justices Duff and Anglin in the Gold
Seal case, as well as the Atlantic Smoke
Shops case.
Interestingly in that case, Justice Rand, concluding as he did “…I
find in s. 121 no
obstacle to the operation of the scheme in any
of the features challenged” (at page 643), did
appear to
widen the scope of permissible interprovincial trade where he stated,
at page 642:
“I take s. 121, apart from customs duties, to
be aimed against
trade regulation which is designed to place
fetters upon or
raise impediments to or otherwise restrict or
limit the free flow
of commerce across the Dominion as if
provincial boundaries
did not exist. That it does not create a
level of trade activity
divested of all regulation I have no
doubt; what is preserved is
a free flow of trade regulated in
subsidiary features which are
or have come to be looked upon as
incidents of trade. What is
forbidden is a trade regulation that
in its essence and purpose
is related to a provincial boundary”.
50
111.
Justice Rand cautioned that it was not necessary for the courts to explore section 121 in
detail in both the Gold Seal and the Atlantic Smoke Shop cases.
The Atlantic Smoke Shop case
dealt with infringement by way of a
tax, whereas Gold Seal dealt with infringement by way of a
prohibition in support of valid provincial law (see page 639). He
concluded on the topic, at
pages 642-43, as follows:
“Section
121 does not extend to each producer in a province an
individual
right to ship freely regardless of his place in that
order. Its
object, as the opening language indicates, is to
prohibit
restraints on the movement of products. With no
restriction on
that movement, a scheme concerned with
internal relations of
producers, which, while benefiting them,
maintains a price level
burdened with no other than
production and marketing charges,
does not clash with the
section. If it were so, what, in these
days has become a social
and economic necessity, would be beyond
the total legislative
power of the country, creating a
constitutional hiatus. As the
provinces are incompetent to deal
with such a matter, the two
jurisdictions could not complement
each other by co-operative
action: nothing of that nature by a
province directed toward its
own inhabitants could impose trade
restrictions on their
purchases from or sales of goods to other
provinces. It has
become a truism that the totality of effective
legislative power
is conferred by the Act of 1867, subject always
to the express
or necessarily implied limitations of the Act
itself; and I find in
s. 121 no obstacle to the operation of the
scheme in any of the
features challenged”.
112.
The final case to deal with section 121 is Re Agricultural Products Marketing Act, [1978]
2 S.C.R. 1198 (referred to as the APMA case). In that case, the
facts relating to the reference
showed that an agreement had
been entered into between the federal Minister of Agriculture and
federal marketing agency and their provincial counterparts in all
the provinces.
By this
agreement, the parties contracted to establish a comprehensive
egg marketing scheme under the
Farm Products Marketing
Agencies Act, 1970-71-72 (Can.), c. 65. The program involved federal
and provincial marketing plans establishing quotas for export,
interprovincial and intraprovincial
51
trade. The Canadian Egg
Marketing Agency was established and set overall quotas for each
Province. The Agency was given authority to impose levies or
charges on the marketing of eggs
by egg producers and these were
to be collected on behalf of the Agency by the local egg board.
In
Ontario, the Ontario Farm Products Marketing Board set individual
production quotas based
on the Province's quota.
113.
Thirteen questions relating variously to the validity of certain provisions of three Acts,
two federal and one provincial, establishing an interlocking
scheme of control of egg marketing,
both as to price and
supply, established under federal and provincial authority had been
referred
to the Ontario Court of Appeal. Interestingly, in none
of the thirteen questions was reference
specifically made to
section 121 of the Constitution Act, 1982, although the question was
raised
as to whether enabling legislation was ultra vires the
individual jurisdictions.
114.
The following excerpts from Chief Justice Laskin’s decision from that case deal with
section 121. I should add that the arguments made by the
appellants was that the enabling
statute, by authorizing the
Canadian Egg Marketing Agency to limit and control which egg
producers may market interprovincially, the number of eggs they
may market and the price at
which they may sell effectively
prevented the establishment of a single economic unit in Canada
with
absolute freedom of trade between its constituent parts, which they
claimed was one of the
main purposes of Confederation and which
was guaranteed by section 121 of the Constitution
(see page 48).
At page 21:
“The distortion allegedly involved in the
overall regulatory
scheme is said by the appellants to impede the
free flow of
52
commodities but, apart from
the effect of s. 121 of the British
North America Act, that
could be the effect of any federal
regulatory scheme which had no
interaction with provincial
agencies and there is no
constitutional infirmity in such a
consequence”.
At page 45:
“I should note here that a second ground of
attack upon the
foregoing provisions was that they violated s.
121 of the British
North America Act, the so-called "free
trade" provision, which
states that "all articles of
the growth, produce or manufacture
of any one of the Provinces
shall, from and after the Union, be
admitted free into each of
the other Provinces”.
At pages 48 and 49:
“I should add that the
objection to the anti-dumping provision
is that because it
precludes the marketing in one Province of
eggs produced in
another at a price less than the aggregate of
the price in the
Province of production and reasonable
transportation charges, it
imposes a tariff through inclusion of
the cost of transportation
in the price to be charged in the
importing Province. The shipper
is not allowed to absorb the
cost of transportation even if he
wishes, and the result, it is
said, is that producers in one
Province are protected as against
producers in another.
The
authorities on s. 121 were brought into the submissions to
support
the contentions that s. 121 applies to federal legislation
no
less than to provincial legislation and that the marketing
plan
here exhibits a protectionist policy as among Provinces,
impeding
the flow of trade in eggs between and among
Provinces. Reference
was made to the observation of Viscount
Simon in Atlantic Smoke
Shops v. Colon [ [1943] A.C. 550.], at
p. 569 that "the
meaning of s. 121 cannot vary according as it
is applied to
dominion or to provincial legislation". It seems to
me,
however, that the application of s. 121 may be different
according
to whether it is provincial or federal legislation that
is
involved because what may amount to a tariff or customs
duty
under a provincial regulatory statute may not have that
character
at all under a federal regulatory statute. It must be
remembered
too that the federal trade and commerce power
also operates as a
brake on provincial legislation which may
53
seek to protect its producers
or manufacturers gains entry of
goods from other Provinces.
A federal regulatory statute which does not directly impose a
customs charge but through a price fixing scheme, designed to
stabilize the marketing of products in interprovincial trade,
seeks through quotas, paying due regard to provincial
production
experience, to establish orderly marketing in such
trade cannot,
in my opinion, be in violation of s. 121. In Gold
Seal Ltd. v.
Dominion Express Co. [ (1921), 62 S.C.R. 424.],
both Anglin and
Mignault JJ. viewed s. 121 as prohibiting the
levying of customs
duties or like charges when goods are
carried from one Province
into another. Rand J. took a
broader view of s. 121 in Murphy v.
C.P.R. [ [1958] S.C.R.
626.], where he said this, at p. 642:
I
take s. 121 apart from customs duties to be aimed against
trade
regulation which is designed to place fetters upon, or
raise
impediments to, or otherwise restrict or limit, the free
flow of
commerce across the Dominion as if provincial
boundaries did not
exist. That it does not create a level of trade
activity divested
of all regulation, I have no doubt; what is
preserved is a free
flow of trade regulated in subsidiary
features which are or have
come to be looked upon as indicants
of trade. What is forbidden
is a trade regulation, that in its
essence and purpose is related
to a provincial boundary.
Accepting this view of s. 121, I find
nothing in the marketing
scheme here that, as a trade regulation,
is in its essence and
purpose related to a provincial boundary.
To hold otherwise
would mean that a federal marketing statute,
referable to
interprovincial trade, could not validly take into
account
patterns of production in the various Provinces in
attempting
to establish an equitable basis for the flow of trade.
I find here
no design of punitive regulation directed against or
in favour
of any Province”.
54
A RECONSIDERATION OF THE GOLD SEAL CASE
115.
The defence is asking this Court to reconsider the Gold Seal case. They allege that the
Supreme Court of Canada’s interpretation that section 121
of the British North America Act,
1867 prohibited only the
establishment of customs duties affecting interprovincial trade was
wrongly decided. They base this opinion on five arguments:
1. The Supreme Court of Canada did not interpret the British
North America Act, 1867
properly. They did not interpret it
in a large, liberal and comprehensive spirit, as was
required,
considering the magnitude of the subjects with which it purports to
deal in so
few words.
2. The justices cited no authority, basing their conclusion on
the “objects of the clause”,
notwithstanding
there is nothing in the Confederation documents to suggest that the
object of section 121 should be so limited.
3. No constitutional law textbook prior to the Gold Seal case
suggested their restrictive
interpretation of section 121.
4. The Gold Seal interpretation ignores the fact that section 121
does not mention the words
“duties”, “charges”
or “taxes”, whereas sections 102, 103, 123 and 126 do.
Since the
Fathers of Confederation knew the impact of duties,
charges and taxes on goods, and had
them included in other
provisions of Part VIII, but not in section 121 in that Part, that
55
would suggest that they did
not intend section 121 to be confined to prohibiting tariff
barriers, but rather to be applicable to both tariff and
non-tariff trade barriers.
5. Had the federal government not enacted the Proclamation
Validation Act prior to the
decision being released, Gold
Seal would have won their case. The Supreme Court of
Canada
dismissed the section 121 argument summarily, which, by itself, is
sufficient
reason to reject its interpretation.
116.
I cannot disagree with any of these remarks. The Supreme Court of Canada did not
embark on a large, liberal or progressive interpretation of the
Constitution Act, 1867 in Gold
Seal. There was in fact little
interpretation at all of section 121. They cited no authority, they
based their conclusion on the “objects of the clause”
without examining the objects of the clause
in detail, they
relied on no constitutional law textbook, the case does not refer to
other sections in
Part VIII of the British North America Act,
1867 and the one paragraph included on section 121
by Justice
Duff could be classified as a summary dismissal of an argument. That
however does
not mean that the case was wrongly decided. It does
mean that the case should be re-examined if
allowed.
THE VERTICAL STARE DECISIS ISSUE
117.
The defence is asking this Court to not follow binding precedent.
56
118.
The Supreme Court of Canada has authority to depart from its previous decisions and it
has done so in the past. However, departing from previous
decisions should only be done with
caution and for compelling
reasons: see Binus v. The Queen [1967] S.C.R. 594, per Cartwright J.
The lower courts, however, are bound by the principle of stare
decisis, otherwise known as the
doctrine of binding precedent,
under which decisions of a court are binding on courts lower in
the
hierarchy.
119.
There are exceptions to the stare decisis principle. These were recently explained in
Carter v. Canada (Attorney General) [2015] 1 S.C.R. 331 at
paragraph 44 as follows:
44 “The doctrine that lower
courts must follow the decisions
of higher courts is fundamental
to our legal system. It provides
certainty while permitting the
orderly development of the law
in incremental steps. However,
stare decisis is not a straitjacket
that condemns the law to
stasis. Trial courts may reconsider
settled rulings of higher
courts in two situations: (1) where a
new legal issue is raised;
and (2) where there is a change in the
circumstances or evidence
that "fundamentally shifts the
parameters of the debate"
(Canada (Attorney General) v.
Bedford, 2013 SCC 72, [2013] 3
S.C.R. 1101 at para. 42)”.
120.
Chief Justice McLachlin of the Supreme Court of Canada wrote the following in
relation to the principle of stare decisis in the case cited,
Canada (Attorney General) v.
Bedford [2013] S.C.C. 72 (the
Bedford case) in paragraphs 38 to 44:
38 “Certainty in the
law requires that courts follow and
apply authoritative
precedents. Indeed, this is the foundational
principle upon which
the common law relies.
39
The issue of when, if ever, such
precedents may be
departed from takes two forms. The first
"vertical" question is
when, if ever, a lower court may
depart from a precedent
established by a higher court. The second
"horizontal"
question is when a court such as the
Supreme Court of Canada
may depart from its own precedents.
57
40 In this case, the
precedent in question is the Supreme
Court of Canada's 1990
advisory opinion in the Prostitution
Reference, which upheld the
constitutionality of the
prohibitions on bawdy-houses and
communicating -- two of the
three provisions challenged in this
case. The questions in that
case were whether the laws infringed
s. 7 or s. 2(b) of the
Charter, and, if so, whether the limit was
justified under s. 1.
The Court concluded that neither of the
impugned laws were
inconsistent with s. 7, and that although the
communicating
law infringed s. 2(b), it was a justifiable limit
under s. 1 of the
Charter. While reference opinions may not be
legally binding,
in practice they have been followed (G. Rubin,
"The Nature,
Use and Effect of Reference Cases in Canadian
Constitutional
Law" (1960), 6 McGill L.J. 168, at p. 175).
41 The application judge in this case held that she could
revisit those conclusions because: the legal issues under s. 7
were different, in light of the evolution of the law in that
area;
the evidentiary record was richer and provided research not
available in 1990; the social, political and economic
assumptions underlying the Prostitution Reference no longer
applied; and the type of expression at issue in that case
(commercial expression) differed from the expression at issue
in
this case (expression promoting safety). The Court of Appeal
disagreed with respect to the s. 2(b) issue, holding that a trial
judge asked to depart from a precedent on the basis of new
evidence, or new social, political or economic assumptions, may
make findings of fact for consideration by the higher courts,
but cannot apply them to arrive at a different conclusion from
the previous precedent (at para. 76).
42
In my view, a
trial judge can consider and decide
arguments based on Charter
provisions that were not raised in
the earlier case; this
constitutes a new legal issue. Similarly, the
matter may be
revisited if new legal issues are raised as a
consequence of
significant developments in the law, or if there
is a change in
the circumstances or evidence that
fundamentally shifts the
parameters of the debate.
43
The intervener, the David Asper
Centre for
Constitutional Rights, argues that the common law
principle of
stare decisis is subordinate to the Constitution and
cannot
require a court to uphold a law which is unconstitutional.
It
submits that lower courts should not be limited to acting as
58
"mere scribe[s]",
creating a record and findings without
conducting a legal
analysis (I.F., at para. 25).
44 I agree. As the David Asper
Centre also noted, however, a
lower court is not entitled to
ignore binding precedent, and the
threshold for revisiting a
matter is not an easy one to reach. In
my view, as discussed
above, this threshold is met when a new
legal issue is raised, or
if there is a significant change in the
circumstances or
evidence. This balances the need for finality
and stability with
the recognition that when an appropriate
case arises for
revisiting precedent, a lower court must be able
to perform its
full role.
121.
Professor Hogg in Constitutional Law of Canada, 5th Edition at page 8-24 posits the
theory that, in constitutional cases, it is arguable that “the
Court should be more willing to
overrule prior decisions than
in other kinds of cases”, citing the dictum of Black J. of the
Supreme Court of the United States in Green v. U.S. [1958] 356
U.S. 165, 195 who wrote the
following:
“…the
Court has a special responsibility where questions of
constitutional
law are involved to review its decisions from
time to time and
where compelling reasons present themselves
to refuse to follow
erroneous precedents; otherwise its mistakes
in interpreting the
Constitution are extremely difficult to
alleviate and needlessly
so”.
122.
In this case, I am no doubt bound by the vertical stare decisis principle which obliges me
to follow the binding precedent set by the Supreme Court of
Canada. I cannot ignore binding
precedent unless one of the
exceptions applies. The threshold is high. That threshold is met
when “a new legal issue is raised, or if there is a
significant change in the circumstances or
evidence”
(Bedford case, supra).
59
123.
In this case, I do not believe that a new legal issue has been raised. The issue was
addressed as far back as 1921 in the Gold Seal case. The Court
there addressed the issue of what
meaning was to be attributed to
the word “free” found in section 121 of the Constitution
Act,
1867. The members of the Court very summarily examined the
phraseology adopted, the
purpose of the section, its object and
the context in which the section was to be found and arrived
at
its conclusion. It must be remembered also that three other Supreme
Court pronouncements
have been made relative to section 121: the
Atlantic Smoke Shops case in 1943, the Murphy case
in 1958 and
the APMA case in 1978. All of these addressed in varying degrees of
detail the legal
issue that has been raised in this case.
124.
Nor do I believe that there has been a significant change in circumstances justifying a
departure from binding precedent. Whatever is meant by that
expression, I would think that it
would operate against the
request made here by the defence. Canada, the provinces and its
territories have carried on their economic policies in reliance
on the binding precedent set by
Gold Seal for over 95 years now.
There has been no significant change in circumstances
requiring
reassessment.
125.
What has occurred is that there has been a significant change in evidence, one that I
believe has fundamentally shifted the parameters of the debate.
To my knowledge, in none of the
cases dealing with section
121 has there been any evidence presented to the trier of fact, or to
the
appellate court, addressing the issues presented before me
respecting the following topics: the
drafting of the British
North America Act, 1867, the legislative history of the Act, the
scheme of
the Act and its legislative context. It has been the
presentation of evidence on these issues that
60
changed in a substantial way
the parameters of the debate on the correct interpretation of the
expression “admitted free” in section 121 of the
Constitution Act, 1867. In my opinion, this
allows this Court to
proceed with its analysis and indeed mandates that it do so.
THE DUFF LETTER
126.
The defence calls into play the validity of the Gold Seal decision based on the improper
manipulation of one of the foundational aspects of judicial
independence. They allege that there
was the exercise of
extraneous influence in the judicial function at the highest court,
which
affected the outcome of the case. In support of this
shocking allegation, they submit what is
called the Duff letter.
127.
The Duff letter was admitted by consent as Exhibit D-1, a certified true copy of a
document filed in the Library and Archives, Canada, described
by Nicole Fleury on behalf of the
Librarian and Archivist of
Canada as follows: “It is an unsigned letter from Lyman Poore
Duff
to Lord Haldane in 1925”. The letter is dated 4th of
June, 1924, and addressed to the Rt. Hon.
Viscount Haldane, O.M.,
K.T., House of Lords, London.
128.
The paragraph from this letter, which purports to support the defence theory, is here
reproduced:
“An instance of what I am referring to
occurred a couple of
years ago, in Meighen’s time when
Doherty was Minister of
Justice. A question was before this Court
as to the validity of a
proclamation to bring the Canada
Temperance Act into force
in Alberta. The temperance people were
making a row about
it, and the Minister of Justice, being anxious
to ascertain the
probable result of the appeal then pending, sent
for two
61
members of the Court, Anglin
and Mignault, and obtained
from them information as to their
own opinions and the
opinions of their colleagues and the
probable result of the
appeal, and as a consequence legislation
curing the defect was
introduced before our judgment was
delivered. Doherty felt
safe in that case, because he and the two
judges mentioned
were educated at the same Jesuit college in
Montreal, with, as
you may imagine, very close reciprocal
affiliations”.
129.
The reference to “Meighen” is likely a reference to then Prime Minister Arthur Meighen.
The reference to “Doherty” was likely a reference
to The Right Honourable Charles J. Doherty,
the then Minister
of Justice. “Anglin” and “Mignault” refer to
two of Justice Duff’s colleagues
on the bench. Francis
Alexander Anglin, a New Brunswicker, was appointed to the Supreme
Court of Canada on February 23, 1909, and retired as Chief
Justice of that Court on February 28,
1933. He served on the
Supreme Court for 24 years. Pierre-Basile Mignault was an educator
and the author of the monumental treatise Le Droit civil
canadien, (9 volumes, 1885-1916). On
October 25, 1918, he was
appointed to the Supreme Court of Canada. He served on the Court for
ten years, retiring on September 30, 1929.
130.
It is therefore alleged that the two afore-mentioned justices from the Supreme Court of
Canada met with the then Minister of Justice between May 11, 1921,
(the final day of oral
arguments in the Supreme Court of Canada)
and June 4, 1921, (the proclamation date of the
Proclamation
Validation Act in Parliament). It is further alleged that the three
not only discussed
the possible outcome of the Gold Seal case,
but further that Justices Anglin and Mignault
disclosed to the
Justice Minister how they were to decide the case. It is implied that
they also
told him, explicitly or implicitly, how to change the
outcome of the case.
62
131.
The question is what import should this letter have on my decision in this case?
132.
Defence counsel referred to Canada v. Tobiass [1997] 3 S.C.R. 391 to explain the
seriousness of such allegations and the possible ramifications.
In that case, Mr. Thompson, the
Assistant Deputy Attorney
General in charge of civil litigation at the federal Department of
Justice, met in private with the Chief Justice of the Federal
Court. The two men discussed the
scheduling of the Minister of
Citizenship and Immigration’s cases in the Federal Court. They
later exchanged letters, neither of which was copied to any of
the counsel for the other parties. In
his letter to the Chief
Justice, Mr. Thompson referred to the fact that the Attorney General
was
being asked to consider taking a reference to the Supreme
Court of Canada to determine some
preliminary points of law
because the Trial Division was unable or unwilling to proceed with
the
cases expeditiously. In his reply, the Chief Justice stated
that he had discussed Mr. Thompson’s
concerns with the
Associate Chief Justice, and that both were prepared to take all
reasonable
steps to avoid such a reference. He added that the
Associate Chief Justice said he had not fully
appreciated "the
urgency of dealing with these matters as expeditiously as the
Government
would like" until he had read his letter.
However, now that he was aware of the Government's
concerns he
would devote one week to deal with the cases not only with respect to
the
preliminary points but also with respect to the merits. A
judicial stay of proceedings was sought
by the applicants. The
Supreme Court of Canada dealt with the impropriety in this way. I
quote
paragraph 85 of the decision:
85
“In short,
the evidence supports the conclusion that the
appearance of
judicial independence suffered a serious affront
as a result of
the…meeting between Mr. Thompson and Isaac
C.J. This
affront very seriously compromised the appearance
of judicial
independence. A reasonable observer apprised of
the workings of
the Federal Court and of all the circumstances
63
would perceive that the Chief
Justice and the Associate Chief
Justice were improperly and
unduly influenced by a senior
officer of the Department of
Justice. However, there is no
persuasive evidence of bad faith on
the part of any of the actors
in this drama, nor is there any
solid evidence that the
independence of the judges in question
was actually
compromised.
Notwithstanding the finding of impropriety, the Supreme Court refused to stay proceedings.
133.
Certainly no one would doubt that a clandestine meeting to discuss the possible outcome
of pending litigation between a party to that case and two
justices who have heard and have
reserved their decision on it
would be highly improper. Such a situation would compromise the
appearance of judicial independence. It would be unheard of today
and must have been unheard
of in 1921. It would constitute
unethical and unprincipled behaviour for any judge to tell a
litigant in a case actually before the courts what the possible
outcome of that case will or could
be.
134.
The difficulty I have is actually deciding that this discussion occurred. There was very
little evidence presented before me on this topic, important
though it may be to the defence’s
position here. The
only evidence about the holding of this discussion with the Minister
of Justice
is that which is contained within the actual letter
D-1. There was no other documentary or other
evidence proffered
in support of the allegations contained within it. In other words,
the
allegations must stand or fall entirely on the contents of
D-1 since no other evidence was
presented to otherwise shore up
proof of the alleged misconduct. Articles may have been
published
exposing it and biographers and historians may have written about it,
but, for the
purposes of this trial, no other supporting evidence
exists in relation to it.
64
135.
To be precise, at this trial, I have heard no evidence from any source that would shed any
light on the discussions held during that meeting. I have
nothing emanating from Lord Haldane
proving that he received
the letter or responded to it. I have nothing emanating from Justices
Anglin or Mignault confirming the meeting took place or what may
have been discussed. I have
nothing emanating from then Minister
of Justice the Right Honourable Charles Doherty, or from
his
office. In summary, no confirmatory evidence about the holding of the
meeting or the
discussions that may have occurred there was
presented to me.
136.
As to the letter itself, I feel I must be cautious about the weight I should attach to it. I
state this for a number of reasons which I will now expose.
137.
I have no evidence that the letter was actually mailed to Lord Haldane. I am certain that
Justice Duff wrote it, but nothing proves it was received. It
would be as much impermissible
speculation to conclude that
it was mailed as to conclude that it wasn’t.
138.
The letter is unsigned. Furthermore, it does not follow the usual form of either a personal
or a business letter. The first page contains the usual heading
containing the date and place of
issuance, being Ottawa.
It then states:
“Dear Lord Haldane:” Following the salutation,
Justice Duff explains that the Court will not get through their
list in time for a sailing on the 13 th,
as he originally
expected, but that he will go on the Montclair on the 20th, arriving
in London on
the 27th. He then places his closing: “With
kind regards, Yours sincerely”, without a signature.
At the
bottom of page 1 is the addressee: “Rt. Hon. Viscount Haldane,
O.M., K.T., House of
Lords, LONDON”.
This appears to be a self-contained one-page letter, yet there follows six
65
additional pages on a variety
of topics, none referenced on the first page. It almost appears like
an attachment to the letter, or at least what one might today
consider to be as such. The final
paragraph of the letter appears
to end abruptly, as if the writer hadn’t finished the letter.
There is
no closing salutation or signature on the last page.
139.
The very appearance of this letter is therefore unusual. It does not follow the usual form
one would expect.
140.
Next, and perhaps most importantly, the source of the information obtained by
Mister Justice Duff is not identified. Justice Duff was obviously
not at that meeting therefore the
facts outlined in the paragraph
constitute hearsay evidence. Justice Duff must have obtained that
information from another source, but there has been no evidence
presented at this trial to
establish that the information he
relates in the letter originated from a reliable or trustworthy
source. Again, one might surmise that the information had to have
come from either Justices
Anglin or Mignault or the Minister
himself, but there being no confirmation of this, it is
impermissible speculation in my opinion. Justice Duff did not,
for example, state in the letter:
“Justice Anglin told me
about a meeting he had with the Minister…” The fact is,
there may have
been others present at the meeting, or there may
have been someone who overheard the
conversation but who did not
participate in the meeting. All of this is of course speculative,
which must raise a cautionary flag in the mind of the trier of
fact.
66
141.
In addition, I must also question Mister Justice Duff’s motivation for conveying the
particular message. This was not the only allegation of
impropriety surrounding judges. He
made three other
allegations in the letter implying improper conduct.
142.
In the third paragraph of the letter he wrote:
“…Anglin,
for example, shortly after his appointment to this
Court, went to
Detroit and made a bitter speech to a congress
of Irish-American
educationists, attacking the decision of the
Privy Council in
connection with the Manitoba school
controversy in 1905,
ascribing the decision to political
influence”.
143.
Mister Justice Duff therefore is alleging that the same Justice Anglin who he stated had
an improper meeting with the Minister of Justice in the Gold Seal
case, also discussed his belief
that political influence was
brought to bear in a decision of the Judicial Committee of the Privy
Council.
144.
In the fifth paragraph of the letter, Justice Duff wrote the
following:
“The Prime Minister himself is very jealous,
I think, of the
authority of the courts to deal with ultra vires
legislation, and I
do not doubt that he would prefer to see the
final authority in
the Canadian courts, with the idea that a
court in Ottawa
would be amenable to influence. You can have very
little idea
of the liberties some Canadian Ministers will allow
themselves
in influencing judges where they think it is safe to
bring
pressure to bear…”
145.
Mister Justice Duff therefore also appears to be alleging improper conduct by the
politicians towards the judges, allowing themselves to bring
pressure on them when they think it
would be safe to do so.
He also appears to have expressed the belief that if the court of
last
67
resort was the Supreme Court of
Canada, this would please the Prime Minister of Canada as the
Court
would be amenable to influence by him or by his Ministers.
146.
Finally, in the seventh paragraph, Mister Justice Duff wrote
the following:
“…The Prime Minister, who was
then Deputy Minister of
Labour here, and his cousin, who up to
that time had been a
close personal friend of mine, made a direct
attempt to
influence the decision of the members of the Court by
communicating facts which afterwards came out in another
litigation and which undoubtedly did shew that Lesueur was
rather unfairly taking advantage of material placed at his
disposal by Mackenzie’s descendants to raise questions as
to
Mackenzie’s personal character which might much better
have
been left alone. The majority of this Court decided in
favour
of Lesueur and the offence was passed over without
comment,
unfortunately, as I thought at the time…”
147.
So it would appear that Mister Justice Duff considered that the then Minister of Labour,
who later became Prime Minister, committed an “offence”
by making a direct attempt to
influence the members of the
Supreme Court of Canada by communicating facts to them, which
facts
subsequently came out in another litigation.
148.
I mention these three other allegations of misconduct in order to highlight the dangers of
proceeding on unsubstantiated and possibly unreliable hearsay.
One might question the bona
fides of Justice Duff in view of
the other comments he makes in the same letter.
149.
It is true, as was pointed out by the defence, that the Minister of Justice knew there was
another option open to him to avoid an unfavourable judgment in
the Gold Seal case and this
opens up the possibility that
information came from Justices Anglin or Mignault. However I am
68
not prepared to conclude,
based on the Duff letter alone, that Justices Anglin and Mignault, if
they were present at a meeting with him, told him how they
were going to decide the case and
presented to him this option in
order to avoid the adverse ruling. The Right Honourable Charles
J.
Doherty had been, after all, the Minister of Justice for a number of
years, he taught
International Law at McGill University and was a
former Justice of the Superior Court of
Québec. There is
no doubt he would consequently have been quite capable of having come
up
with his own ideas about how to avoid any negative
consequences arising from the pending
judgment in Gold Seal.
THE NATURE OF THE CANADIAN CONSTITUTION
150.
Dr. Thomas Bateman, Associate Professor and Chair of the Department of Political
Science at St. Thomas University in Fredericton, New Brunswick,
a political scientist, was
qualified by the Court to give
opinion evidence in Canadian constitutionalism (being the history
and politics of the Canadian constitution), conventions of the
Canadian Constitution (being
unwritten judicially unenforceable
rules that fill out the Canadian Constitution as part of our
British
inheritance), Canadian constitutional development from Confederation
to the present and
Canadian federalism as it has been influenced
by both judicial interpretation and by
intergovernmental
relations. His written report was admitted into evidence by consent
as Exhibit
C-11. Admittedly, he had never published any articles
on section 121 of the Constitution Act,
1867, nor of its
historical or political context. He also admitted that he had never
published any
article regarding the “constitutional moment”
between 1864 and 1867.
He has, however,
69
commented on Supreme Court of
Canada decisions which either directly or indirectly touch upon
the
issues raised by section 121.
151.
Dr. Bateman wrote in his report that Section 92 of the Constitution Act, 1867 sets out
most of the provinces’ policy responsibilities. In regard
to alcohol specifically, the provinces
have jurisdiction in
respect to direct taxation, saloon and tavern licences for revenue
purposes,
the incorporation of companies with provincial objects,
property and civil rights in the province,
and generally all
matters of a local or private nature in the province. This, he says,
leads one to
conclude that provinces have appreciable
constitutional room to legislate in respect to the
production,
sale, regulation and consumption of alcohol. The federal government,
on the other
hand, has jurisdiction in, among other things, the
regulation of trade and commerce, all forms of
taxation and
criminal law. It too can legislate in relation to certain aspects of
alcoholic liquors.
He wrote in his report that “Section
121, in principle, operates as a limit on federal and
provincial
legislative activity in areas within their competence. Neither courts
nor politicians
have been particularly assiduous in using s. 121
to limit governments’ legislative activities”. He
was
of the opinion that since provincial laws usually have either the
purpose or effect of limiting
free trade, any robust
interpretation of section 121 would sharply clip the provinces’
policy
space.
152.
Dr. Bateman listed examples of barriers which either intentionally or in effect obstructed
internal free trade. These include:
Differential tax rates and other tax policies, some of them
fashioned to attract businesses
from other jurisdictions;
70
Differential professional accreditation and licencing standards;
Differential product standards, labelling requirements, and grading schemes;
Agricultural commodity supply management schemes that define
quantities produced and
prices paid for products;
Various policies to encourage the development of provincial
economic sectors, including
natural resources;
Provincial liquor policies encouraging the consumption of
products produced from within
the province; and
Government procurement policies favouring domestic suppliers of
goods and services
though out-of-province bids may be
superior on quality or price.
153.
These barriers are the result of the operation of Canadian federalism, he states. In his
opinion, the existing tension between the division of powers in
sections 91 and 92 and the free
trade provision in section
121 has been resolved by a weakening of section 121. He affirmed
that Canadian governments, rather than the courts, have taken on
the lion’s share of
responsibility for the management of
the federation. Indeed, courts encourage political rather
than
judicial management of the federation.
This is accomplished in part by the courts’
recognition of constitutional conventions and by a judicious
deferral to governments to maintain
the balance of powers.
154.
As I understand it, the Crown’s position is that notwithstanding what may have been the
intent of the framers of the Constitution, the Canadian
Constitution is more than merely the
written text of the
Constitution, a basic principle which has been recognized by the
courts, and
71
that federalism must evolve
in order to “address and be responsive to the nature of the
Canadian
federation” (Post-trial Brief on Law, page
10).
According to the prosecution, “federalism
recognizes the diversity of the component parts of
Confederation, and the autonomy of
provincial governments to
develop their societies within their respective spheres of
jurisdiction”
(Post-trial Brief on Law, page 11).
155.
Given the nature of the Canadian Constitution, the prosecution states that it may, and
often does take both provincial and federal powers to
competently and adequately legislate in
particular spheres of
activity, citing Tsilqhot’n v. British Columbia [2014] S.C.C.
44 at paragraph
148. As a result, conflicts in relation to the
division of constitutional powers in Canada today are
more often
resolved than litigated, a fact which also underscores the depth of
influence exerted
by the unwritten Constitution in the evolution
of the Canadian polity (Post-trial Brief on Law,
page 9).
156.
The prosecution asks this Court to not deconstruct the political and constitutional
accommodation of federalism as it has taken shape in Canada since 1867.
To quote the
testimony of Dr. Bateman:
“…a very robust
interpretation of section 121 would drain the
section 92 power…of
most of their significance because the …
very existence of
jurisdiction that provinces can exercise means
that different
provinces can exercise their jurisdiction in
different ways and I
would say that almost inevitably at least
some, maybe many, maybe
most exercises of different
provinces’ jurisdictional
responsibilities would operate as some
kind of barrier to free
trade. So a very robust interpretation of
section 121 would
operate against the division of powers such
as 91 and 92. My
guess is that you can’t have one provision of
the
Constitution interpreted in a way to obliterate another
provision
of the Constitution and to put the point slightly
differently,
the interpretation which seems to prevail at the
72
moment, mainly that section
121 is really to do with the
prohibition on customs and
duties at a provincial border, is…a
fairly workable way to
reconcile internal free trade with the
existence of powers by
provinces under section 92” (transcript,
vol. 4, page 96,
lines 4 to page 97, line 2)
157.
In my opinion, this is a very compelling argument. A robust interpretation of section 121
would create conflict with the exercise of provincial powers
under section 92 of the Constitution
Act, 1867. Dr. Bateman
gave the example of a province which, for purposes related to their
internal needs, imposes restrictions on imports of any particular
product from other provinces.
This would be an impediment to free
trade in that commodity. A robust interpretation of
“admitted
free” in section 121 would tear down those restrictions as
being impediments to free
trade, which weakens the ability of
that province to protect its own interests.
158.
The interpretation of section 121 sought by the defence amounts to a request to this Court
to dismantle a regime that has been in place since the inception of the Constitution in 1867.
159.
The prosecution requests of the Court simply to recognize and uphold the current state of
affairs, one which has been steadfastly adhered to and which, for
all intents and purposes,
appears to have adequately regulated
the affairs between all levels of government. The Crown
argues
that constitutional doctrine must facilitate, not undermine
co-operative federalism Thisqhot’n case, supra, at para 149.
160.
There can be no question but that in the intervening years since Gold Seal has been
decided, governments have put in place a multitude of
restrictive measures across this country.
These include
marketing boards such as for wheat, eggs, milk and poultry,
provincial liquor
73
monopolies in all provinces,
and a host of existing schemes that interfere with interprovincial
trade. There are also innumerable policies put in place by
the provinces that could be understood
to limit free trade
between the provinces, including those listed by Dr. Bateman. The
Gold Seal
interpretation has also “enabled the creation of
federal schemes that have imposed interprovincial
trade barriers
in the form of mandatory sale requirements, prohibitions of
interprovincial
shipments, and imposition of provincial quotas”,
per Ian Blue, Q.C. Free Trade within Canada:
Say Goodbye to Gold
Seal, page 20.
161.
The effect on section 92 of the Constitution Act, 1867 of defining “admitted free” as
requiring free trade among provinces without any trade
barriers, tariff or non-tariff, whether
found in federal or
provincial legislation, such as advanced by the defence, would
eliminate any
scheme that would interfere with the free movement
of goods inter-provincially, whether for
agricultural products,
produce, manufactured goods, liquor or any other product regardless
of
whether or not such regulated scheme was enacted for the
benefit or the protection of the
residents of that province. It
would likely only allow for the regulation by the provinces of
matters that would not interfere with inter-provincial movement
of these goods. Justice Rand in
the Murphy case called these
“subsidiary features”. How exactly this would play out
would no
doubt be the subject of much political maneuvering and
court interpretations.
162.
To put this matter in its proper context, this is obviously not a “division of powers” case,
nor, I believe, one that requires an examination of the
principles of “exhaustiveness”,
“interjurisdictional
immunity” or “paramountcy” as suggested by the
prosecution. This is not a
case dealing with a conflict as
between laws passed by two separate jurisdictions or of
entrenchment
by one jurisdiction over another’s powers. But it does require
the Court to consider
74
the issues by reference to
contemporary views of Canadian federalism, as explained by the
Supreme Court of Canada in Canadian Western Bank v. Alberta
[2007] 2 S.C.R. 3 at para. 42:
42
“…Canadian
federalism is not simply a matter of
legalisms. The Constitution,
though a legal document, serves as
a framework for life and for
political action within a federal
state, in which the courts have
rightly observed the importance
of co-operation among government
actors to ensure that
federalism operates flexibly”.
163.
The intention of the framers of the Constitution in drafting legislation is obviously a very
important factor to be taken into account, albeit not a
decisive factor. This is borne out by the
situation which
developed in the case of R. v. Blais [2003] 2 S.C.R. 236 where
counsel evidently
invited the Supreme Court of Canada to
interpret a constitutional document in a manner that was
not
consistent with the intention of its drafters. Mr. Blais was a
Manitoba Métis. He was
convicted of hunting deer out of
season. He had been hunting for food on unoccupied Crown
land.
His defence was based solely on the allegation that, as a Métis,
he was immune from
conviction under the Wildlife Act regulations
in so far as they infringed on his right to hunt for
food under
paragraph 13 of the Manitoba Natural Resources Transfer Agreement
(the NRTA).
The NRTA stipulated that the provincial laws
respecting game applied to the Indians subject to
the continuing
right of the Indians to hunt, trap and fish for food on unoccupied
Crown lands.
The Manitoba NRTA is a constitutional document,
incorporated as Schedule (1) to the
Constitution Act, 1930. The
issue was whether the word “Indians” in paragraph 13 of
the NRTA
included the Métis. The Court proceeded with the
interpretation of the constitutional document
in this way:
16
Against this background, we turn to the issue before us:
whether
"Indians" in para. 13 of the NRTA include the Métis.
The starting point in this endeavour is that a statute -- and
this
includes statutes of constitutional force -- must be
interpreted
75
in accordance with the
meaning of its words, considered in
context and with a view
to the purpose they were intended to
serve: see E. A. Driedger,
Construction of Statutes (2nd ed.
1983), at p. 87. As P.-A. Côté
stated in the third edition of his
treatise, "Any
interpretation that divorces legal expression
from the context of
its enactment may produce absurd results"
(The
Interpretation of Legislation in Canada (3rd ed. 2000), at p.
290).
164.
The Court then addressed counsel’s request to interpret the constitutional document
favourably to Mr. Blais notwithstanding what might have been
the original intent of the
document, at paragraphs 39 and 40
as follows:
39
“We decline the appellant's invitation
to expand the
historical purpose of paragraph 13 on the basis of
the "living
tree" doctrine enunciated by Lord Sankey
L.C. with reference
to the 1867 British North America Act:
Edwards v. AttorneyGeneral for Canada, [1930] A.C. 124 (P.C.), at p.
136. The
appellant, emphasizing the constitutional nature of
paragraph
13, argues that this provision must be read broadly as
providing solutions to future problems. He argues that,
regardless of paragraph 13's original meaning, contemporary
values, including the recognition of the Crown's fiduciary duty
towards Aboriginal peoples and general principles of
restitutive
justice, require us to interpret the word "Indians"
as
including the Métis.
40
This Court has consistently
endorsed the living tree
principle as a fundamental tenet of
constitutional
interpretation. Constitutional provisions are
intended to
provide "a continuing framework for the
legitimate exercise of
governmental power": Hunter v.
Southam Inc., [1984] 2 S.C.R.
145, per Dickson J. (as he then
was), at p. 155. But at the same
time, this Court is not free to
invent new obligations foreign to
the original purpose of the
provision at issue. The analysis
must be anchored in the
historical context of the provision. As
emphasized above, we must
heed Dickson J.'s admonition "not
to overshoot the actual
purpose of the right or freedom in
question, but to recall that
the Charter was not enacted in a
vacuum, and must therefore ...
be placed in its proper
linguistic, philosophic and historical
contexts": Big M Drug
Mart, supra, at p. 344; see Côté,
supra, at p. 265. Dickson J. was
speaking of the Charter, but his
words apply equally to the task
76
of interpreting the NRTA.
Similarly, Binnie J. emphasized the
need for attentiveness to
context when he noted in R. v.
Marshall, [1999] 3 S.C.R. 456, at
para. 14, that "'[g]enerous'
rules of interpretation should
not be confused with a vague
sense of after-the-fact largesse."
Again the statement, made
with respect to the interpretation of a
treaty, applies here”.
165.
“The original purpose of the provision at issue” therefore, is an important consideration
in approaching judicial interpretation of the Constitution.
Courts should not allow such
elemental and fundamental considerations to be displaced merely
by notions of what, today, may
amount to a request for
accommodation based on a long-standing misinterpretation of the
intent
of the Fathers of Confederation.
IS A FINE A TARIFF
166.
The defence has attempted to convince the Court that the imposition of a fine imposed by
a provincial government for the commission of a regulatory
offence, such as the one committed
under section 134(b) of
the Liquor Control Act, is a financial consequence of crossing a
border
and consequently is in the nature of a tariff trade
barrier.
167.
Whereas I agree that both are financial consequences of the act of crossing goods over a
provincial border, I am not convinced that a fine is a tariff
trade barrier. It would appear to me
that a province has
jurisdiction to impose fines for offences committed within their
borders. The
fines are imposed for the purpose of inflicting
punishment for the offence committed. It may
also be considered
as a means to dissuade or discourage the commission of the offence in
the
particular jurisdiction.
77
168.
However, the nature of a tariff trade barrier and that of a fine are very different. They are
of a different character. Whatever definition one might give to
the expression “tariff trade
barrier”, it would
not seem appropriate to me to include fines levied as punishment for
the
commission of an offence within its definition. In order for
the fine to be imposed, an offence
has to have been committed and
the person would have to have been convicted of it. In my
opinion,
in this particular case, it is not the fine imposed that would
constitute the trade barrier,
but the prohibition from import
imposed under section 134(b) of the Liquor Control Act.
THE ISSUE OF DESUETUDE
169.
Dr. Bateman suggested in his testimony and in his report that section 121 of the
Constitution Act, 1867 has fallen into desuetude and its disuse
may now be a constitutional
convention. He maintains that
only a portion of Canada’s whole constitutional corpus is in
the
written Constitution and that a significant degree of our
Constitution is unwritten. These he
referred to as constitutional
conventions, also called “rules of critical morality”.
These
conventions bind political actors and can be as binding as any
entrenched law. They give shape
and substance to the skeletal
written constitution. Not being in the constitutional documents,
however, they are not enforced by the courts in the same way as
the formal provisions are. Some
conventions are so fundamental to
the very nature of the Canadian constitutional order that they
are
considered binding upon actors to a high degree.
170.
Dr. Bateman suggests that judicial interpretation of section 121 has fallen short of the
expectations of those who seek a Canadian free trade area.
Decisions such as the Gold Seal case
confined the section to the
invalidation of tariff-like interprovincial barriers at a time when
these
78
were the main impediments to
free trade. Since then, as government intervention into the
economy
increased, and as non-tariff barriers proliferated, section 121 has
fallen into a type of
desuetude. He explains that governments do
not use section 121 to challenge the protectionist
policies of
other governments. As such perhaps a convention has formed whereby
section 121 is
effectively rendered inoperative.
171.
Dr. Bateman was of the opinion that section 121 refers only to customs duties at the
provincial borders and since the interprovincial customs and
duties were removed soon after
Confederation, they are out of
play. There being no tariffs at the border between provinces,
section 121 is dormant and has become a convention such that no
province would now
contemplate imposing a custom duty at the
border. He compared it to the section 56 power
permitting the
British government to disallow legislation passed by the Parliament
of Canada,
and the section 90 power allowing the Governor General
of Canada on the advice of the
Government of Canada to disallow a
law passed by a provincial legislature. Both these sections
have
fallen into desuetude.
172.
Having heard the evidence given by Dr. Bateman on the issue of whether section 121 has
fallen into desuetude, I find that if by desuetude he means it
is unused or rendered inoperative,
then I would agree. I
would not agree however that it has become inoperative for the
reasons he
stated. Once the Supreme Court of Canada strictly
interpreted section 121 to custom duties,
there was in reality
nowhere else for the section to go. It strictly prohibited custom
duties and
nothing else. Its disuse became merely a matter of
practice or custom. It was not possible for
79
the section to be interpreted
in any way to come to the aid of any other governmental policy or
strategy.
173.
Dr. Bateman interpreted section 121 differently than did Dr. Smith. His interpretation
focused on the addition of the words immediately preceding and
following the word “free”, that
is, “admitted
free into”. In his opinion, “admitted…into”
suggests a border crossing matter.
Since customs are levied at a
border, section 121 is confined to customs.
174.
I am not convinced that the words “admitted…into” limit the expression “admitted free
into” to custom duties only. Indeed, my interpretation of
the words of section 121 has concluded
otherwise, based on a
number of factors. Certainly there is no reason to adopt the very
strict
interpretation put upon the wording as advanced by Dr.
Bateman.
Nothing in the words
“admitted free into” could possibly lead to that interpretation.
SIGNIFICANT FINDINGS
175.
I found it interesting that the RCMP in Campbellton were targeting people crossing the
border with five cases of beer or more. The limit was twelve
bottles and the RCMP knew this.
This suggests a certain
laissez-faire attitude by the police in relation to this particular
offence
provided their arbitrarily imposed limit to the amount
traversing the border was not crossed. It
hardly makes sense that
a person carrying five cases of beer would be charged but an
individual
with four cases would not, when in both scenarios the
identical offence was committed. This, I
80
suppose, is a reflection of the tolerance shown by public safety officials to this type of regularlyoccurring offence which is not likely a high priority in terms of crime prevention.
176.
The Maritime Beer Accord, the Agreement on Internal Trade and efforts by provincial
jurisdictions to increase allotted import quotas for alcohol
all represent to some extent, efforts to
circumvent existing
trade barriers. None of these schemes has been particularly
successful,
especially with respect to alcohol. The provinces,
for the most part, assiduously protect their
monopolistic hold on
this important source of revenue.
177.
With respect to the nomenclature of section 121 of the Constitution Act, 1867, I find that
there is nothing in the language used in that section that
could lead one to conclude it was
intended to prohibit
customs duties or charges.
178.
I find that the changes made in the wording of section 121 of the Constitution Act, 1867,
more specifically the changes between the first and second draft,
was a reflection by the Fathers
of Confederation of their
forward-looking views of the proposed new country. They anticipated
expansion and they anticipated greater trade as between the
provinces, as demonstrated by the
deletion of the reference to
ports. The amended wording reflects their attempt to gain unfettered
economic exchange and a more comprehensive economic union.
179.
I find that drafter Francis Reilly used wording found in existing legislation in the British
colonies in drafting section 121 of the British North America
Act, 1867. The similarity in the
wording could not have been
happenstance or coincidence. The colonies of Nova Scotia, New
81
Brunswick and the Province of
Canada all had drafted legislation in their respective jurisdictions
that eliminated trade barriers between them. The Province of
Canada’s Act was called An Act to
facilitate Reciprocate
Free Trade between this Province and other British North American
Provinces. These laws were clearly intended to encourage trade as
between the three then
existing provinces. The words “the
growth, production or manufacture of any such Province” in
the
New Brunswick Act mirrors the wording that was adopted for use in
section 121 of the
British North America Act, 1867, which compels
me to conclude that the Fathers of
Confederation wished to use
wording in section 121 that was similar to the words used in
existing legislation encouraging free trade in their respective
provinces.
180.
I find that the placement of section 121 in Part VIII of the British North America Act,
1867, does not assist the Court in arriving at any conclusion
as to its meaning or its limitations.
Attempting to find
meaning in its placement is an exercise in futility. It was most
likely placed
in that part of the Act that was the most fitting
considering all other parts of the Act.
181.
I find that the British, at the time of the drafting of the British North America Act, 1867
were very experienced in legislative drafting, including on
commercial and economic matters.
Being experts in diplomacy
and trade negotiation, they would have known to include “from
customs duties or charges” in section 121 if such were the
wishes of the Fathers of
Confederation. During this time period,
most goods entering the United Kingdom did so without
paying
customs duties.
82
182.
I am convinced that the Fathers of Confederation were keenly aware of the distinction to
be drawn between the expressions “admitted free”
and “admitted free from duty”. I am also
convinced
that they deliberately avoided the “free of duty”
terminology because that was not
their wish. The best source for
arriving at a conclusion about the intent of the Fathers of
Confederation is provided by its historical context. In other
words, the intention of the Fathers of
Confederation is most
pertinently demonstrated by the historical context during the
constitutional
moment leading up to the enactment of section 121.
183.
That historical context leads to only one conclusion:
the Fathers of Confederation
wanted to implement free trade as between the provinces of the
newly formed Canada. They
specifically rejected an
American-style of government and adopted continuity with the British
system of government at a time when free trade was actively
implemented in Britain. Economic
development was not only
pursued, it was one of the foundational reasons for the pursuit of a
union. The repeal of the Reciprocity Treaty with the United
States, which was based on free
trade, necessitated the search
for alternatives. The proposed discussions between Nova Scotia,
Prince Edward Island and New Brunswick in September 1864 about
possible political and
economic union opened up the possibility
to replace the American free market with a made in
Canada free
market for all provinces. The Fathers of Confederation wanted to
replace the lost
free trade with the United States with free
trade as between the proposed provinces of Canada.
184.
This constitutes a summary of the historical context leading up to the enactment of
section 121. The free trade sought by the framers of our Constitution would not have been
83
accomplished merely by the
abolition of customs duties at provincial borders, even though that
was one of the steps they took following the creation of the
federation.
185.
I find that the penalizing non-tariff barriers to trade imposed by the Americans in the
years leading up to the repeal of the Reciprocity Treaty shows
that the Fathers of Confederation
were not simply concerned
with eliminating customs duties as between the provinces. Rather,
they wanted to avoid all such barriers, tariff or non-tariff. The
barriers to trade as between the
two countries were based on
non-tariff schemes, not taxes or customs duties.
186.
I find that the speeches and orations from the Fathers of Confederation prior to the
enactment of the British North America Act, 1867 conclusively
point to their desire to implement
free trade as opposed to
the elimination of customs duties as between the provinces. Examples
abound: “Union of all Provinces would break down all trade
barriers between us”; “Now we
desire to bring about
that same free trade in our own colonies”; “…the
free interchange of the
products of the labor of each province”;
“…if we wish to…establish a commercial union,
with
unrestricted free trade, between people of the five
provinces…”; “Union is free trade among
ourselves”.
187.
The current state of the law in Canada on the meaning and effect of section 121 of the
Constitution Act, 1867 is clear and unambiguous: section 121
prohibits the establishment of
customs duties affecting
inter-provincial trade in the products of any province in Canada. The
principle of vertical stare decisis mandates that I follow that
law and not deviate from it unless an
exception is warranted. I
believe in this case that an exception has been established by the
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presentation, for the first
time, of expert evidence on the historical context of section 121 of
the
British North America Act, 1867.
188.
I believe that if the evidence that was presented before me at this trial had been brought
to the attention of the justices of the Supreme Court of Canada
in their deliberations on the
meaning of section 121,
particularly when the Gold Seal case was decided in 1921, the result
would have been different.
189.
It is therefore with a great deal of trepidation that I find that the Gold Seal case was
wrongly decided, for the reasons outlined. I believe that the
narrow and strict interpretation
placed upon section 121 in
the Gold Seal case was unwarranted and unfounded. Furthermore,
the
Gold Seal decision shaped all subsequent cases dealing with section
121.
Should the
Supreme Court of Canada agree that Gold Seal was wrongly
decided, then undoubtedly they
would re-examine all other
cases dealing with section 121.
190.
I find that in the case presented to me, the Duff letter has no relevance to the issued to be
decided. There are too many unknown variables permitting me to
arrive at any conclusion based
on its contents alone. For
reasons relating primarily to its reliability as evidence, I find
that the
Duff letter does not assist in arriving at any
conclusion in this matter.
191.
I am certain that interpreting section 121 of the Constitution Act, 1867 as permitting the
free
movement of goods among the provinces without barriers, tariff
or non-tariff will have a
resounding impact. Indeed, the
consequences of this finding could be significant. The path of
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least resistance would mandate
that the Court simply follow the Gold Seal ruling and allow for
the
continuance of existing structures and schemes which have been in
place for nearly a century.
But statutes of constitutional force
must be interpreted in accordance with the meaning of its
words,
considered in context and with a view to the purpose they were
intended to serve; their
analysis must be anchored in the
historical context of the provision: R. v. Blais, supra.
192.
I find that section 121 of the Constitution Act, 1867 has not fallen into desuetude. Its
disuse or neglect has arisen as a result of an unfounded
judicial interpretation which effects have
continued for
nearly a century.
CONCLUSION
193.
Section 134(b) of the Liquor Control Act of New Brunswick constitutes a trade barrier
which violates section 121 of the Constitution Act, 1867 and is
therefore of no force or effect as
against Gérard
Comeau.
194.
The charge against him is dismissed.
Dated at Campbellton, New Brunswick, this 29th day of April, 2016.
Ronald LeBlanc
Provincial Court Judge
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