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Interjurisdictional Immunity
Published in the August 2009 issue of Transportation Notes - View Article
In the Canadian federal system, the right to enact laws is assigned to either the national Parliament or the legislatures of the provinces on the basis of broad subject matters. However, no legislation that seeks to regulate transactions and affairs can be confined in its effect to a single subject. Laws that affect navigation and shipping (a subject within the federal power) may, for example, have an impact on the civil rights of citizens (a provincial power), making it necessary for the law to consider how to define the boundaries of what each level of government is permitted to do.
Canadian constitutional law is, in large part, the result of the clash between federal and provincial legislation and the transportation sector is often the playing field on which the struggle unfolds. In the last several weeks, we have seen two relevant trial decisions from opposite ends of the country, as well as the intervention of the Greater Toronto Airports Authority in a matter pending for hearing before the Supreme Court of Canada. In each case federal legislation has prevailed to this point.
Two doctrines often invoked to resolve disputes over the division of powers within the federation are paramountcy and interjurisdictional immunity. The first of these concepts recognizes that the subject matter of legislation may present different aspects and valid federal and provincial legislation may apply to different aspects of the same subject. An example is the development of waterfront lands. As the Supreme Court has explained in the case of British Columbia (Attorney General) v. Lafarge, 2007 SCC 23, the development of such lands may be subject to provincial or federal jurisdiction “depending on the ownership of the lands and on the use to which it is proposed that they be put.” Valid provincial legislation might, for example, regulate the development of private waterfront land for residential purposes, while valid federal legislation might apply to the development of those lands for port installations. Where two legislative schemes exist and apply to different aspects of the same subject matter, they may come into operational conflict—it may be that the two schemes “are incapable of simultaneous enforcement”. If this should happen, the doctrine of paramountcy provides that federal law prevails.
The related doctrine of interjurisdictional immunity is somewhat more difficult to comprehend. The most recent authoritative treatment of this constitutional idea is found the case of Canadian Western Bank v. Alberta, 2007 SCC 22. This decision, released on the same day as the Lafarge case discussed above, cautions that the doctrine must be “restricted to its proper limit”. In theory, it may be invoked to protect the powers of Parliament or those of the provincial legislatures; in fact, it has almost always been used to safeguard the legislative authority of Parliament. The doctrine stems from the fact that the Canadian constitution assigns “exclusive” heads of power to the federation and the provinces. Even in the absence of competing legislation, a certain “core” of each exclusive power is to be exempt from legislation enacted by a competing authority. The reasoning of the Supreme Court of Canada in the Western Bank case is lengthy and complicated. It cannot be completely described in this brief note. Simplifying, we can say that interjurisdictional immunity comes into play only when a provincial law “impairs” a federal undertaking, when it places in jeopardy that which is essential to the federal legislative competence. When the doctrine does come into play, it allows the court to “read down” the provincial enactment so as not to affect the undertaking, person or activity which is properly to be regulated only by a federal statute.
The first of the recent cases we will review is a trial court decision from British Columbia: Vancouver International Airport v. Lafarge Canada Inc. The land on which the Vancouver International Airport is located is owned by the federal government and leased to the Airport Authority. The question that arose was whether provincial law could apply to work done on that property—in particular, whether a provincial statute that provides for a lien available to persons who supply labour or material to a building project can apply to works carried out upon the airport property. The Authority succeeded in obtaining a declaration that no builders’ liens could be filed against the Authority’s leasehold interest in the property.
In coming to this conclusion, Mr. Justice Pitfield noted that there is no federal legislation comparable to the provincial statute in issue. Accordingly, the doctrine of paramountcy could not be invoked, but that of interjurisdictional immunity could. It was key to the application of this doctrine that “the sole purpose of the lease was to allow the Authority to pursue . . . the operation of a major interprovincial and international airport”. The airport is a “federal undertaking” and the lien would affect the core of that undertaking and “the core of the aeronautics power”, a well known and defended head of federal legislative authority. It is this aeronautical purpose which is crucial to the decision. It allowed the court to distinguish the present case from authority relied upon by the province. In Western Contractors Ltd. v. Sarcee Developments, the Alberta Court of Appeal upheld the application of provincial legislation creating a builders lien on a leasehold interest in federal land. In Sarcee, however, the purposes for which the land could be used were commercial, agricultural, residential, and recreational. Thus there was no federal undertaking and the activity under the lease was not subject to a federal legislative power. Having thus distinguished Sarcee, Mr. Justice Pitfield concluded that the provincial legislative scheme “violates the principle of interjurisdictional immunity” and that the relevant provisions are “constitutionally inapplicable or inoperative to the extent they purport to apply to the leasehold interest of the Authority” in the airport lands.
On July 28, 2009, Mr. Justice Hall of the Supreme Court of Newfoundland and Labrador released his decision in the case of Ryan Estate v. Universal Marine. The issue was whether a provincial statute creating a Workers’ Compensation regime should apply to define the rights available following the deaths of two fishermen who lost their lives when their fishing boat sank.
For reasons that we believe are questionable, the Court found that the provincial legislation should fail, whether the analysis proceeds under the doctrine of interjurisdictional immunity or that of paramountcy. The decision is notable in that it fails to mention the locus classicus on the question of the application of provincial statutes in the context of a maritime negligence action—Orden Estate v. Grail, a decision from the Supreme Court of Canada that speaks authoritatively on the issue.
With respect to the first doctrine, the Court quoted at length from the Western Bank case and attempted to apply the law as set out in that decision to the facts at hand. Mr. Justice Hall reasoned as follows: Alongside of the provincial Workers’ Compensation legislation, there exists the federal Marine Liability Act, which provides that if a person is killed “under circumstances that would have entitled the person, if not deceased, to recover damages”, the dependants of the deceased may maintain a civil action. The question of “liability in a marine context clearly and obviously” is a matter of federal jurisdiction.
It is certain that Canadian maritime law recognizes a cause of action in the event of a maritime accident causing death. The proper analysis of the relation of this cause of action and a provincial statute would require consideration of all the factors set out in Orden v. Grail. The court’s failure to undertake that analysis makes the decision suspect in itself. Even if the assumption made by the court respecting the proper procedure is allowed to pass muster, the decision seems to us wrongly decided.
The court was satisfied that the requirement that there be “impairment” of the federal power could be satisfied by the fact that the federal legislation created a cause of action which would be barred by the provincial Workers’ Compensation scheme, which, like most such schemes, replaces many rights of civil actions with a right of statutory compensation. On this point, the court concluded: “There can be no greater level of impairment of the power to sue than to bar the exercise of that power”.
It appears to us that this reasoning is faulty. The fact that an individual’s right to bring an action is “impaired” would not appear to be relevant to the constitutional question. The inquiry should be into whether the ability to legislate with respect to liability is at the core of the federal navigation and shipping power, and if it is, whether the exercise of that power is impaired. Only if it can be said that the provincial legislation places what is essential to the federal competence in jeopardy will the doctrine of interjurisdictional immunity be invoked.
The Ryan Estate case cannot be said to advance the jurisprudence in this area and we believe it may well have been wrongly decided.
The Supreme Court of Canada will have a further opportunity to give guidance to lower courts when it hears the pending case of Québec (Procureur général) c. Laferrière. At stake in Laferrière is whether provincial land use legislation can interfere with the operation of an airport. The Québec Court of Appeal decided the case in favour of the federal legislative competence and the province has obtained leave to appeal to the Supreme Court of Canada. On July 9, 2009, the Greater Toronto Airports Authority was given leave to intervene in the appeal and will no doubt be arguing for an interpretation that favours a broad aeronautics power. That power has fared well in the courts and we venture a guess that it will be upheld again in Laferrière.
Vancouver International Airport v. Lafarge Canada Inc., 2009 BCSC 961
Ryan Estate v. Universal Marine,
2009 NLTD 120