A-433-86
Nasreen Meherally, Lauraine Dube, Richard And-
erson, Zebo Hamid, Shehnaz Motani (Applicants)
v.
Minister of National Revenue (Respondent)
INDEXED AS: MEHER9LLY V. M.N.R.
Court of Appeal, Urie, Hugessen and MacGuigan
JJ.—Vancouver, January 21; Ottawa, March 6,
1987.
Constitutional law — Distribution of powers — Adoption
by reference — Validity of unemployment insurance regulation
adopting by reference provincial legislation relating to provin
cial employees — Constitution Act, 1867, 30 & 31 Vict., c. 3
(U.K.) [R.S.C. 1970, Appendix II, No. 51 (as am. by Canada
Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act,
1982, Item 1), s. 91 — Federal Court Act, R.S.C. 1970 (2nd
Supp.), c. 10, s. 28.
Unemployment insurance — Validity of Unemployment In
surance Regulations s. 8(2) adopting by reference provincial
legislation relating to provincial employees for purpose of
determining insurable employment — Unemployment Insur
ance Regulations, C.R.C., c. 1576, s. 8(1),(2) — Unemploy
ment Insurance Act, 1971, S.C. 1970-71-72, c. 48, ss.
3(1),(2)(e), 4(1)(d),(5) — Regulation Made by the Civil Service
Commission on January 1, 1972, Approved by Order in Coun
cil 4271 on December 30, 1971, Pursuant to Section 9,
Superseding B.C. Reg. 187/58, B.C. Reg. 1/72 — Government
Property Traffic Act, R.S.C. 1952, c. 324, s. 2(1).
In January 1985, the Minister of National Revenue, at the
request of the Minister of Education of the Province of British
Columbia, determined that the applicants were not in insurable
employment while working for the B.C. Ministry of Education.
The applicants allege that they are employees and not
independent contractors. On appeal to the Tax Court of
Canada, they presented a motion for a ruling that subsection
8(2) of the Unemployment Insurance Regulations is ultra vires
of the enacting authority. The question was whether the Unem
ployment Insurance Commission, to which paragraph 4(1)(d)
of the Unemployment Insurance Act, 1971 granted the power,
subject to the approval of the Governor in Council, to make
regulations in respect of "employment in Canada by Her
Majesty in right of a province", can adopt by reference provin
cial legislation relating to employees of a province, or is that
power to be exercised only by Parliament itself? This is a
section 28 application to review and set aside the Tax Court's
dismissal of the motion.
Held (MacGuigan J. dissenting), the application should be
dismissed.
Per Urie J.: The present case is similar to the Glibbery case
where the Ontario Court of Appeal extended the doctrine of
legislation by reference to a case where the adoption of provin
cial legislation occurred, not by statute, but by regulation. The
fact that in Glibbery the Governor in Council was authorized to
make regulations while in this case the Governor in Council is
required simply to approve regulations made by the Commis
sion does not permit Glibbery to be distinguished. It has also
been established that Parliament is entitled to adopt the legisla
tion of another jurisdictional body as it may from time to time
exist.
What was done here was a logical extension of and consistent
with the relevant case law. It was not a transfer of jurisdiction,
but rather the incorporation into federal jurisdiction of the
legislation of the only body having the authority to determine
what persons have the qualifications to be employees of a
province, namely the legislature of the province.
Per Hugessen J.: The application should be dismissed for the
reasons given by Urie J. The Crown and legislature in each
province in the exercise of their prerogative and legislative
powers are not only the appropriate but the only bodies who
can define and determine what shall, for all purposes, be
deemed to be employment by Her Majesty in right of that
province.
Per MacGuigan J. (dissenting): The application should be
allowed.
The argument, that subsection 8(2) of the Regulations is an
unlawful departure from the Act because paragraph 4(1)(d)
thereof limits the Commission to a total opting into the Act and
does not permit a partial opting in, must fail. The introductory
words of subsection 4(1) of the Act impliedly give the required
power of specification to the Commission in its general regula-
tion-making power.
With respect to the issue of whether the transfer of jurisdic
tion is valid as adoption by reference or ultra vires as a
delegation of power, it is first observed that the transfer was not
made by Parliament but by the Commission. And nowhere does
the Act confer on the Commission the power to transfer its
jurisdiction further.
A court cannot take it upon itself, by implication from
concepts rather than from context, to deduce that the definition
of provincial employment should occur through provincial legis
lation. Questions of provincial participation in federal programs
have been so litigated in the past that Parliament must be
deemed to have known that wordless implication would not be
enough to achieve incorporation by reference.
CASES JUDICIALLY CONSIDERED
APPLIED:
The King v. Walton (1906), II C.C.C. 204 (Ont. C.A.);
Brinklow, Re, [19531 O.W.N. 325 (C.A.); Prince
Edward Island Potato Marketing Board v. Willis (H.B.)
Inc., [1952] 2 S.C.R. 392; Regina v. Glibbery, [1963] 1
C.C.C. 101 (Ont. C.A.); Coughlin v. Ontario Highway
Transport Board et al., [1968] S.C.R. 569; Attorney-
General for Ontario v. Scott and Attorney General for
Canada, [1956] S.C.R. 137.
REFERRED TO:
Attorney General of Nova Scotia v. Attorney General of
Canada et al., [1951] S.C.R. 31; [1950] 4 D.L.R. 369;
The King v. National Fish Company Ltd., [1931]
Ex.C.R. 75; Ulin v. The Queen, [1973] F.C. 319; [1973]
35 D.L.R. (3d) 738 (T.D.); Ex Parte Brent, [1955] 3
D.L.R. 587 (Ont. C.A.), affirmed [ 1956] S.C.R. 318; 2
D.L.R. (2d) 503; Re Clark et al. and Attorney-General
of Canada (1978), 17 O.R. (2d) 593 (H.C.); Lord's Day
Alliance of Canada v. Attorney General of British
Columbia, [1959] S.C.R. 497; R. v. Smith, [1972]
S.C.R. 359; Attorney-General for Canada v. Attorney-
General for Ontario, [1937] A.C. 326; [1937] 1 D.L.R.
673 (P.C.); Massey v. Crown Life Insurance Co., [1978]
2 All E.R. 576 (C.A.); Narich Pty Ltd v Comr of
Pay-Roll Tax, [1984] I.C.R. 286 (P.C.); Gilbert v. Min
ister of National Revenue, decision dated August 8,
1981, Federal Court, Trial Division, N.R. 751; not
reported.
COUNSEL:
Allan H. MacLean for applicants.
Max J. Weder for respondent.
Derek Finall for Minister of Education, B.C.
SOLICITORS:
Vancouver Community Legal Assistance
Society, Vancouver, for applicants.
Deputy Attorney General of Canada for
respondent.
Ministry of Attorney General of British
Columbia for Minister of Education, B.C.
The following are the reasons for judgment
rendered in English by
URIE J.: I have had the advantage of reading a
draft of the reasons for judgment of my brother
MacGuigan, with much of which I agree. How
ever, with respect, I am unable to agree with his
conclusion that "[b]y its incorporation of the defi
nition of employment found in provincial Public
Service or Civil Service Acts, the Commission not
only transfers to provinces the determination of
`employment in Canada by Her Majesty in right of
a province,' but also impliedly sanctions the
changes which provinces may from time to time
make in the determination of employees 'who are
appointed and remunerated' under those Acts." I
can state my reasons for this disagreement reason
ably succinctly.
Ever since The King v. Walton (1906), 11
C.C.C. 204 (Ont. C.A.), it has been deemed
proper to incorporate in federal legislation the text
or substance of the statutes of another jurisdiction.
In that case the Criminal Code provided that a
person qualified and summoned as a grand or petit
juror according to the laws in force for the time
being in any province, would be qualified to serve
as a juror in criminal cases in that province. E. A.
Driedger in "The Interaction of Federal and Pro
vincial Laws", (1976), 54 Can. B. Rev. 695, at
page 708 pointed out that:
This is not delegation. The province has exclusive jurisdiction
under section 92 of the British North America Act to prescribe
the qualifications of jurors in civil cases. Parliament has exclu
sive jurisdiction to prescribe the qualifications of jurors in
criminal cases. The Criminal Code provision merely provided,
in effect, that in criminal cases the rules are to be the same as
in civil cases; it described the characteristics that qualify a
person to be a juror in criminal cases, and to find those
characteristics one must go to the provincial law. Parliament
could have repeated those very same rules in the Criminal Code
in extenso; instead, it had incorporated them by reference. That
cannot be delegation for the simple reason that the power of the
legislature to make its own rules is derived from section 92 of
the British North America Act and not from Parliament.
Mr. Driedger also used as an illustration of the
technique of legislation by reference Brinklow, Re,
[1953] O.W.N. 325 (C.A.) in which an Ontario
statute incorporated the provisions of the Criminal
Code [R.S.C. 1927, c. 36] and which was found to
be intra vires. At page 326, Judson J. said and
Driedger commented as follows:
In answer to the argument that this incorporation was ultra
vires, Judson J. said:
Section 3(1) of the Summary Convictions Act reads: "Except
where inconsistent with this Act, Part XV and sections 1028
... [etc.] ... of the Criminal Code (Canada) as amended or
re-enacted from time to time shall apply mutatis mutandis to
every case to which this Act applies as if the provisions
thereof were enacted in and formed part of this Act."
This is not a delegation of powers by the provincial
Legislature to Parliament. It is an incorporation into provin
cial legislation of the work of another legislative body to
avoid its repetition.
It is to be noted that in these two examples the incorporating
statutes expressly incorporate, not only statutes existing at the
time of their enactment, but also subsequent enactments. The
argument is frequently put forward that the incorporation of
subsequent enactments is delegation; this argument will be
discussed below.
The foregoing cases establish the propriety of
Parliament adopting provincial legislation by ref
erence. It is equally well established, of course,
that it cannot delegate its legislating power to the
provinces.' However, in Prince Edward Island
Potato Marketing Board v. Willis (H.B.) Inc.,
[ 1952] 2 S.C.R. 392, the delegation by Parliament
to marketing boards established by the provinces
of power to regulate the marketing of agricultural
products (in that case potatoes) outside the prov
ince in inter-provincial and export trade, was held
to be valid.
The next step in the progression, as MacGuigan
J. pointed out, arose when the Ontario Court of
Appeal in Regina v. Glibbery, [1963] 1 C.C.C.
101, extended the doctrine of legislation by refer
ence to a case where the adoption of provincial
legislation occurred, not by statute, but by regula
tion. The statute in question was the Government
Property Traffic Act [R.S.C. 1952, c. 324]. Sub
section 2(1) of that Act authorized the Governor
in Council to make regulations for the control of
traffic on federal government property. The regu
lations in issue were passed pursuant to that au
thority and were held to be valid. I need not repeat
any other of the, details of the case since my
colleague has sufficiently done so, other than to
say that whilé the statute there in issue did not
deal with future laws, McGillivray J. speaking on
' Attorney General of Nova Scotia v. Attorney General of
Canada et al., [1951] S.C.R. 31.
behalf of the Court, held that the regulations
intended to and did incorporate future changes.
My colleague also pointed out, correctly, that
the Supreme Court of Canada in Coughlin v.
Ontario Highway Transport Board et al., [1968]
S.C.R. 569 had approved as valid the so-called
anticipatory incorporation by reference arising
from changes in the adopted legislation from time
to time. At page 575 of the report Cartwright J.
(as he then was) had this to say:
In the case before us the respondent Board derives no power
from the Legislature of Ontario to regulate or deal with the
inter-provincial carriage of goods. Its wide powers in that
regard are conferred upon it by Parliament. Parliament has
seen fit to enact that in the exercise of those powers the Board
shall proceed in the same manner as that prescribed from time
to time by the Legislature for its dealings with intra-provincial
carriage. Parliament can at any time terminate the powers of
the Board in regard to inter-provincial carriage or alter the
manner in which those powers arp to be exercised. Should
occasion for immediate action arise the Governor General in
Council may act under s.5 of the Motor Vehicle Transport Act.
In my opinion there is here no delegation of law-making
power, but rather the adoption by Parliament, in the exercise of
its exclusive power, of the legislation of another body as it may
from time to time exist, a course which has been held constitu
tionally valid by this Court in Attorney General for Ontario v.
Scott and by the Court of Appeal for Ontario in Regina v.
Glibbery.
To summarize, the position up to this point then
is this: First, adoption by Parliament by reference
of provincial legislation to avoid its repetition in
the exercise of a federal power, is valid. (Attorney-
General for Ontario v. Scott and Attorney General
for Canada, [1956] S.C.R. 137.)
Secondly, Parliament can, in the proper exercise
of its powers under section 91 of the Constitution
Act, 1867 [30 & 31 Vict., c. 3 (U.K.) [R.S.C.
1970, Appendix II, No. 5] (as am. by Canada Act
1982, 1982, c. 11 (U.K.), Schedule to the Consti
tution Act, 1982, Item 1)], delegate to provincial
administrative bodies charged with the regulation
of intra-provincial industries, power to regulate the
same industries insofar as interprovincial and
export trade is concerned (the P.E.I. Potato Mar
keting Board case, supra).
Thirdly, the Governor in Council can, by regula
tion, validly adopt by reference contemporaneous
provincial legislation enacted in respect of an
endeavour in which the provinces are constitution
ally competent (Regina v. Glibbery, supra).
Fourthly, Parliament is entitled to adopt, in the
exercise of its exclusive legislative power, the legis
lation of another jurisdictional body, as it may
from time to time exist. (Coughlin v. Ontario
Highway Transport Board et al., supra).
The question which must now be addressed in
this case is, can the Unemployment Insurance
Commission to which paragraph 4(1)(d) of the
Unemployment Insurance Act, 1971 [S.C. 1970-
71-72, c. 48] granted the power (subject to the
approval of the Governor in Council) to make
regulations in respect of "employment in Canada
by Her Majesty in right of a province", adopt by
reference provincial legislation relating to
employees of a province, or is that power to be
exercised only by Parliament itself? I believe that
it can for two reasons. First, I am of the view that
the Glibbery case was correctly decided by the
Ontario Court of Appeal and it supports my opin
ion. Secondly, I fail to see how there can be a
distinction between this case and Glibbery only
because in the latter the Governor in Council was
authorized to make regulations while in this case
the Governor in Council was required simply to
approve of regulations made by the Commission.
Therefore, I conclude that the adoption by refer
ence in Regulation 8(2) of the Unemployment
Insurance Regulations [C.R.C., c. 1576], of the
Public Service Act or Civil Service Act of a prov
ince to determine employees of a province to be
insured under the Act, is a valid exercise of Parlia
ment's regulation making power and thus, is intra
vires. It is a logical extension of and is consistent
with the jurisprudence to which I have referred. It
is not a transfer of jurisdiction as urged by the
applicants. It is the incorporation into federal
legislation of the legislation of the only body
having the authority to determine what persons
have the qualifications to be employees of a prov
ince, namely the legislature of the province.
I would for those reasons dismiss the section 28
[Federal Court Act, R.S.C. 1970 (2nd Supp.), c.
10] application as it relates to subsection 8(2) of
the Regulations, and with respect to the other
attacks on the vires thereof, I would dismiss the
application for the reasons given by MacGuigan J.
* * *
The following are the reasons for judgment
rendered in English by
HUGESSEN J.: I have had the benefit of reading
the reasons for judgment prepared by my brothers
Urie J. and MacGuigan J. I am in full agreement
with Urie J. and wish to add only one brief
comment.
It appears to me that, in the exercise of the
regulatory power granted to it by paragraph
4(1)(d) of the Unemployment Insurance Act,
1971, to
4. (1) ... make regulations for including in insurable
employment
(d) employment in Canada by Her Majesty in right of a
province ...
the Commission could scarcely do otherwise than
adopt by reference the various provincial defini
tions as to what such employment is. In my opin
ion, the Crown and Legislature in each province in
the exercise of their prerogative and legislative
powers are not only the appropriate but the only
bodies who can define and determine what shall,
for all purposes, be deemed to be employment by
Her Majesty in right of that province.
I would conclude, as does Urie J., that the
section 28 application should be dismissed.
* * *
The following are the reasons for judgment
rendered in English by
MACGUIGAN J. (dissenting): This section 28
application puts in question the validity of the
method of participation of the province of British
Columbia in the federal unemployment insurance
program.
The five applicants each launched appeals to the
Tax Court of Canada from determinations made
by the respondent on January 23, 1985 at the
request of the intervenor, the Minister of Educa
tion of the province of British Columbia, that they
were not in insurable employment while working
for the British Columbia Ministry of the Educa
tion in the spring or early summer of 1984. The
applicants alleged that they were employees and
not independent contractors, even though each had
had to sign a written contract specifying independ
ent contractor status. The parties agreed that the
decision in the appeal of the first applicant would
apply as well to the other applicants. They also
agreed that the Court should first hear arguments
in support of that applicant's motion for a ruling
that subsection 8(2) of the Unemployment Insur
ance Regulations is ultra vires of the enacting
authority; if that motion failed, it was agreed that
the appeal would necessarily fail. The Tax Court
Judge dismissed the motion and this application is
brought to review and set aside that decision of
May 30, 1986.
The relevant parts of the Unemployment Insur
ance Act, 1971 ("the Act") are as follows:
3. (1) Insurable employment is employment that is not
included in excepted employment and is
(2) Excepted employment is
(e) employment in Canada under Her Majesty in right of a
province;
4. (1) The Commission may, with the approval of the Gov
ernor in Council, make regulations for including in insurable
employment
(d) employment in Canada by Her Majesty in right of a
province if the government of the province waives exception
and agrees to insure all its employees engaged in such
employment;
(5) A regulation made under this section may be conditional
or unconditional, qualified or unqualified, and may be general
or restricted to a specified area, a person or a group or class of
persons.
The relevant section of the Unemployment In
surance Regulations ("the Regulations") is as
follows:
8. (1) Employment in Canada by Her Majesty in right of a
province that would, except for paragraph 3(2)(e) of the Act,
be insurable employment is included in insurable employment if
the government of the province enters into an agreement with
the Commission whereby it agrees to waive exception and to
insure all employees engaged in such employment.
(2) For greater certainty, employment in Canada by Her
Majesty in right of a province, for the purposes of subsection
(1), only includes employment in Canada of employees who are
appointed and remunerated under the Public Service Act or
Civil Service Act of a province or who are employed in Canada
by a corporation, commission or other body that is for all
purposes, an agent of Her Majesty in right of the province.
The applicants contended that the Tax Court
Judge erred in failing to rule that subsection 8(2)
of the Regulations is ultra vires of the Canada
Employment and Immigration Commission ("the
Commission") as constituting an unlawful depar
ture from the Act. The burden of this argument is
that by its use of the term "all its employees"
paragraph 4(1) (d) of the Act limits the Commis
sion to a total opting into the Act and does not
permit a partial opting in.
It is common ground that a regulation may not
amend a statute but can operate only consistently
with the statute: The King v. National Fish Corn
. pony Ltd., [1931] Ex.C.R. 75; Ulin v. The Queen,
[1973] F.C. 319; [1973] 35 D.L.R. (3d) 738
(T.D:). However, the respondent argued that, on a
proper interpretation, the "if" clause of paragraph
4(1) (d), particularly since it is not preceded by a
comma, amounts to a precondition which is totally
satisfied once the province has given its initial
consent to the application of the Act to all its
employees, and that such consent was established
by the following regulation (B.C. Reg. 1/72, The
British Columbia Gazette—Part II, January 13,
1972):
CIVIL SERVICE ACT
REGULATION MADE BY THE CIVIL SERVICE COMMISSION
ON JANUARY 1, 1972, APPROVED BY ORDER IN COUNCIL
4721 ON DECEMBER 30, 1971, PURSUANT TO SECTION 9,
SUPERSEDING B.C. REG. 187/58.
Unemployment Insurance
1. The consent of the Government of the Province of British
Columbia is given to the application of the Unemployment
Insurance Act (1971) of Canada, as provided in section 4(1)(d)
of that Act, to all employees of the Government of the
Province.
2. B.C. Regs. 187/58, 39/60, and 158/61 are repealed.
The difficulty of this argument is indicated by the
fact that counsel for the respondent had no expla
nation to offer as to why, on that hypothesis, the
second part of the conditional clause ("and agrees
to insure all its employees engaged in such employ
ment") was needed at all, since the first part alone
("if the government of the province waives excep
tion") would overcome the exception otherwise
provided by paragraph 3(2)(e) of the Act. There is
no apparent reason why the notion of totality ("all
its employees") should be introduced only to be
completely merged in the opting-in procedure.
Nevertheless, it seems to me that the applicants
have exaggerated the significance of the word
"all". It is not the only qualifier of "employees,"
since that word is immediately followed by the
words "engaged in such employment." This latter
phrase and the whole notion of "employment in
Canada by Her Majesty in right of a province"
may reasonably be thought to require some specifi
cation. I do not believe that subsection 4(5), which
was referred to by both parties, covers such a
situation, but the introductory words of subsection
4(1) ("The Commission may, with the approval of
the Governor in Council, make regulations for
including in insurable employment") impliedly
give just such a power of specification to the
Commission in its general regulation-making
power.
I therefore conclude that this argument of the
applicants must fail, at least as long as the specifi
cation of the statutory generality is made by the
Commission itself.
This brings me to the larger issue raised by the
applicants, viz. the validity of the transfer of juris
diction by the Commission to the province of
British Columbia, through its incorporation of pro
vincial legislative standards under subsection 8(2)
of the Regulations. In the contention of the appli-
cà nts, this transfer renders subsection 8(2) ultra
vires as constituting a sub-delegation not author
ized by the Act which would permit the province
to be selective as to how many employees receive
coverage under the Act.
In Ex Parte Brent, [1955] 3 D.L.R. 587 (Ont.
C.A.), at pages 592-593, in quashing a deportation
order based on a regulation made by the Governor
in Council pursuant to his statutory powers, which
redelegated the regulatory power to special inquiry
officers, Laidlaw J. A. wrote for the Ontario Court
of Appeal concerning the regulation in question:
Its effect ... is not Regulation by His Excellency in Council
but Regulation individually by any number of Special Inquiry
Officers scattered throughout the country, each according to
his own "opinion." If these "opinions" always coincided, that
would be nothing short of miraculous; it would be cause for
astonishment if they ever coincided, considering the extreme
generality of the terms employed, the wide field each term
covers and the application of the words "temporarily or other
wise" either to conditions in Canada or in some other country.
In short, these limited powers of legislation, wide though the
limits of the subject-matter may be, which Parliament has
delegated to His Excellency in council have not been exercised
by the delegate at all, but, on the contrary, by him have been
redelegated bodily, for exercise not merely by some one other
individual but, respectively and independently of each other, by
every Special Inquiry Officer who sees fit to invoke them and
according to "the opinion" of each such sub-delegate.
I can find nothing in the Act expressly (or by inference, if
that is permissible) manifesting any intention to permit or
authorize any such procedure. On the other hand, it is reason
able to suppose that what Parliament had in contemplation was
the enactment of such Regulations relevant to the named
subject-matters, or some of them, as in His Excellency in
Council's own opinion were advisable and as, therefore, could
be of general application to persons seeking entry into Canada
regardless of the particular port of entry involved. Surely, what
was intended was legislation enacted by His Excellency in
Council according to his wisdom and broad experience, pre
scribing standards for the general guidance of Immigration
Officers and Special Inquiry Officers operating at or near the
borders of the country, not a wide divergency of rules and
opinions ever changing according to the individual notions of
such officers. The Regulation is invalid and the order of
deportation based upon it is invalid likewise, delegatus non
potest delegare.
The Supreme Court of Canada dismissed the
appeal, holding that "there is no power in the
Governor General-in-Council to delegate his au
thority to such officers": Attorney-General of
Canada v. Brent, [1956] S.C.R. 318, at page 321;
2 D.L.R. (2d) 503, at page 505.
The decision of the Ontario High Court respect
ing one provision of the Uranium Information
Security Regulations [SOR/76-644] is to the same
effect: Re Clark et al. and Attorney-General of
Canada (1978), 17 O.R. (2d) 593. Evans C.J.H.C.
there said at pages 608-609:
There is one aspect of the Regulations which causes some
concern. Section 2(a) prohibits the release of information con
cerning uranium but provides for two exceptions. The second
exception reads:
(ii) he does so with the consent of the Minister of Energy,
Mines and Resources ...
Counsel for the applicants argues that this offends the maxim
delegatus non potest delegare. After considering s. 9 of the Act
and s. 2 of the Regulations, I have come to the conclusion that
s. 2(a)(ii) is ultra vires the Atomic Energy Control Board. I
agree with Mr. Sopinka's submission that the Minister of
Energy, Mines and Resources is effectively doing the regulat
ing. Counsel for the respondent argued that this was compa
rable to a case of agency rather than delegation. However,
there are no guidelines provided for the Minister and there is no
indication that the Board maintains a principal—agency type
of arrangement with the Minister. The real effect of the
exemption is to vest the Regulation-making power of the Board
in the Minister. The Minister could give exemptions to every
one and could effectively nullify the application of the
Regulations.
In Judicial Review of Administrative Action, 3rd ed. (1973),
S.A. de Smith considers the principles to be considered in
applying the maxim delegatus non potest delegare, at pp.
268-9:
(a) Where an authority vested with discretionary powers
affecting private rights empowers one of its committees
or sub-committees, members or officers to exercise those
powers independently without any supervisory control
by the authority itself, the exercise of the powers is
likely to be held invalid .... (Madoc Township v. Quin-
lan (1972), 21 D.L.R. (3d) 136; R. V. Sandler, ibid
[(1971), 21 D.L.R. (3d) 286].
(b) The degree of control ... maintained by the delegating
authority over the acts of the delegate or sub-delegate
may be a material factor in determining the validity of
the delegation. In general the control preserved ... must
be close enough for the decision to be identifiable as that
of the delegating authority. (Osgood v. Nelson (1872)
L.R. 5 H.L. 636; Devlin v. Barnett [1958] N.Z.L.R. 828
... Hall v. Manchester Corporation (1915) 84 L.J. Ch.
734, 741 ... Cohen v. West Ham Corporation [1933]
Ch. 814, 826-827 ... R. v. Board of Assessment, etc.
(1965) 49 D.L.R. (2d) 156)...
(c) It is improper for an authority to delegate wide discre
tionary powers to another authority over which it is
incapable of exercising direct control, unless it is
expressly empowered so to delegate. (Kyle v. Barbor
(1888) 58 L.T. 229) ... A Canadian provincial market
ing board, exercising delegated authority, could not
sub-delegate part of its regulatory powers to an interpro-
vincial authority. (Prince Edward Island Potato Mar
keting Board v. Willis (H.B.) Inc. [1952] 2 S.C.R. 391).
On the basis of these principles, I have concluded that
s. 2(a)(ii) is ultra vires.
Counsel for the respondent referred me to the case of Refer
ence re Validity of Regulations as to Chemicals, [ 1943] S.C.R.
1, [1943] 1 D.L.R. 248, 79 C.C.C. 1. In that case, the
Governor-General in Council was empowered to make such
Regulations as he might by reason of the existence of the war
deem necessary or advisable for the defence of Canada. The
Court held that this power was wide enough to permit subdele-
gation to the Controller of Chemicals ....
The approach of the Supreme Court of Canada in the
Chemicals Reference case is dictated by the exigencies of the
war-time situation. That is not so in the present case.
The applicants contend that these cases show
that the Act should be read so as to prohibit
sub-delegation. The respondent attempts to distin
guish this line of cases by arguing in effect that
when the transfer of jurisdiction is inter-govern
mental, the Courts have consistently found such
transfers to be adoptions by reference rather than
impermissible sub-delegation.
Inter-delegation between Parliament and the
legislatures was held unconstitutional in Attorney
General of Nova Scotia v. Attorney General of
Canada et al., [1951] S.C.R. 31; [1950] 4 D.L.R.
369, where the Supreme Court held that contem
plated legislation in Nova Scotia entitled "An Act
Respecting the Delegation of Jurisdiction from the
Parliament of Canada to the Legislature of Nova
Scotia and vice versa" would not be constitutional
ly valid, if enacted, since neither Parliament nor a
legislature can delegate to the other its powers, nor
receive the other's powers. Law Reform Commis
sioner Gérald V. LaForest (as he then was), in
"Delegation of Legislative Power in Canada"
(1975), 21 McGill L.J. 131, at pages 146-147
comments that "the first reaction of the courts
both here and in other federations (for example,
the United States) is to attempt to protect the
general structure of the constitution by finding a
constitutional bar to delegation." However, he
adds that in time "devices are invented to permit
some transfer of functions. This has been true not
only in Canada but also in other federations, such
as the United States and Australia." In Canada it
took the Supreme Court only a little more than a
year to develop the first such device, viz., the
adoption of a provincial board or agency by the
federal Parliament and Government as its own:
Prince Edward Island Potato Marketing Board v.
Willis (H.B.) Inc., [ 1952] 2 S.C.R. 392.
Professor Peter Hogg, Constitutional Law of
Canada, 1977, at page 237 speculates that the
Nova Scotia Inter-delegation case has over the
years been implicitly overruled. The late E. A.
Driedger, in "The Interaction of Federal and Pro
vincial Laws" (1976), 54 Can. B. Rev. 695, at page
710, n. 54, offers an alternative analysis:
In a comment Constitutional Law — The Inter-Delegation
Doctrine: A Constitutional Paper Tiger? (1969), 47 Can. Bar.
Rev. 271, K. Lysyk asks this question: "Let us suppose that
instead of speaking in terms of delegating authority to make
laws (as did the proposed legislation considered in the Nova
Scotia case), the Nova Scotia legislature simply repealed all
provisions of its own Act and substituted a section which
purported to incorporate the terms of the federal Act, as the
latter might from time to time exist, making the same appli
cable to all industries, works and undertakings otherwise within
the exclusive jurisdiction of the provincial legislature. Would
this `incorporation by reference' be constitutionally sound?"
The answer undoubtedly is Yes.
Indeed, the distinction between delegated and
referential legislation is a simple one: in the case of
delegated legislation, the delegatee's authority is
derived from the delegator, who may at any time
revoke the powers of his agent; in the case of
adoption by reference the authority to enact the
legislation comes from the Constitution and not
from the other legislative body. When the legisla
tor purports to adopt the law of another legislature
not only as it exists but also as it is amended from
time to time, which is evidently the intention in
subsection 8(2), the situation is quite similar to
delegation in that the adopting legislature in prac
tice yields its right to amend its own legislation to
the other legislature. Such anticipatory incorpora
tion by reference might well have been character
ized by the Courts as a delegation.
Nevertheless, in Attorney-General for Ontario
v. Scott and Attorney General for Canada, [1956]
S.C.R. 137 the Supreme Court of Canada upheld
interlocking British and Ontario legislation con
cerning maintenance orders. Rand J. said at page
142 that the legislative scheme was a case of
adoption and not of delegation because "the action
of each legislature is wholly discrete and independ
ent of the other, a relation incompatible with
delegation." Decisions of similar import cited by
the respondent are: Lord's Day Alliance of
Canada v. Attorney General of British Columbia,
[1959] S.C.R. 497; Coughlin v. Ontario Highway
Transport Board et al., [1968] S.C.R. 569; R. v.
Smith, [1972] S.C.R. 359. The anticipatory incor
poration which existed in the Scott case was recog
nized by the Supreme Court, but does not seem to
have been considered material by the Court in that
case. Nevertheless, in the Coughlin case the
majority held that anticipatory incorporation was
valid on the authority of the Scott case. In the
Smith case the Court went even further and held
in effect that Parliament could and did authorize a
provincial transport board, to which it had trans
ferred jurisdiction over extra-provincial transpor
tation, to impose licence restrictions on extrapro-
vincial undertakings which it did not impose on
local undertakings. The Smith case may perhaps
be taken to dispense with the requirement that the
delegatee have independent legislative power. In
any event, in my view there is clearly no problem
with the transfer by Parliament of federal legisla
tive power over unemployment insurance coverage
to a province, provided that this is accomplished
by incorporation by reference and not by actual
delegation.
However, the respondent's problem remains.
Counsel for the respondent was able to point to
only a single case, Regina v. Glibbery, [1963] 1
C.C.C. 101 (Ont. C.A.), where the inter-adoption
had occurred, not by statute, but by regulation. In
the Glibbery case the conviction of the accused for
driving carelessly in the defence establishment of
Camp Borden, contrary to a provision of the
Ontario Highway Traffic Act [R.S.O. 1960, c.
172] in conjunction with a provision of the federal
Government Property Traffic Regulations [P.C.
1952-4076], was upheld, where the effect of the
federal Regulations was to incorporate the provi
sions of the provincial Act as they existed or were
amended from time to time. The value of this
precedent is much diminished by the fact that the
point in question here was evidently not argued
before the Ontario Court of Appeal, which three
times (on pages 104-105) refers to the issue as one
as to what Parliament might or might not do. This
same oversight is repeated by the Supreme Court
in the Coughlin case, supra, at page 575 (S.C.R.)
where it approves Glibbery.
By its incorporation of the definition of employ
ment found in provincial Public Service or Civil
Service Acts, the Commission not only transfers to
provinces the determination of "employment in
Canada by Her Majesty in right of a province,"
but also impliedly sanctions the changes which
provinces may from time to time make in the
determination of employees "who are appointed
and remunerated" under those Acts. Accepting
that this transfer of jurisdiction is rightly charac
terized as adoption by reference rather than as
delegation, I cannot conclude that this transfer has
been made by Parliament. It is the Commission
which by section 4 of the Act is given the initiating
power to make regulations (subject only to the
approval of the Governor in Council) for including
in insurable employment otherwise exempted pro
vincial employees, and thus in its discretion to
qualify and specify what needs to be qualified and
specified, but there is not a word in the Act which
explicitly confers on the Commission the power to
transfer its jurisdiction further.
The fact that the question has apparently not
been thought to be sufficiently in doubt to be
contraverted before now,'- or that both govern
ments appear in support of the same interpreta
tion, cannot be taken as decisive of the issue. As
the application itself indicates, there are other
interests to be taken into account than those of
governments.
It might be argued that a power to transfer
jurisdiction should be seen to be implied in the
Act, especially in the light of the recent Supreme
Court decisions, which indicate a clear preference
for a functional approach over the old "watertight
compartments" view of the Privy Council (as in
Attorney-General for Canada v. Attorney-Gener
al for Ontario, [1937] A.C. 326, at page 354;
[1937] 1 D.L.R. 673, at page 684). In my view a
Court has no trouble in recognizing that the Act
allows employment in Canada by Her Majesty in
right of a province to be further defined. But I do
not see how a court can take it upon itself, by
implication from concepts rather than from con
text, to deduce that any such definition should
occur through provincial legislation. The statute
says that it shall be done by the Commission, with
the approval of the Governor in Council. Even if
Parliament wanted to accommodate the provinces
beyond other employers, it could do so adequately,
though admittedly less directly, if the Act is read
as enabling the Commission to adjust its regula
tions from time to time according to any changes
in provincial legislation.
But Parliament may also have intended that a
province which abandons its excepted status
should be bound by the same definition of master-
and-servant relationship as governs other employ-
ers—in other words, that the form of contract
which its economic power enables it to impose on
those who work for it should be subject to judicial
scrutiny to determine the true relationship between
the parties, as in the case of all other employers. In
that event, the law is as stated by Lord Denning in
2 Except in Gilbert v. Minister of National Revenue, Nation
al Revenue file no. 751, where Walsh J. rejected an argument
that the predecessor provision of the Regulations was ultra
vires of the Commission.
Massey v. Crown Life Insurance Co., [1978] 2 All
E.R. 576 (C.A.), at page 679 would govern:
The law, as I see it, is this: if the true relationship of the parties
is that of master and servant under a contract of service, the
parties cannot alter the truth of that relationship by putting a
different label upon it ... On the other hand, if their relation
ship is ambiguous and is capable of being one or the other
[contract of service or for services], then the parties can remove
that ambiguity, by the very agreement itself which they make
with one another. The agreement itself then becomes the best
material from which to gather the true legal relationship
between them.
On the basis of this principle, the Judicial Com
mittee of the Privy Council in Narich Pty Ltd v
Comr of Pay-Roll Tax, [1984] I.C.R. 286, held
that a weight-loss lecturer who worked for a com
pany that was the franchisees throughout Aus-
tralia of Weight Watchers International Inc. was
an employee, despite an express clause to the
contrary in her contract.
The presence of the word "all" in paragraph
4(1)(d) of the Act might be taken to indicate an
inclination on Parliament's part thus to leave work
contracts with the provincial governments to judi
cial interpretation.
The form of provincial participation in unem
ployment insurance is of sufficient importance and
questions of provincial participation in federal pro
grams have been so litigated in the past that
Parliament, it seems to me, must be deemed to
have known that wordless implication would not be
enough to achieve incorporation by reference.
I would therefore allow the application, set aside
the decision of the Tax Court Judge and remit the
matter for hearing and decision on the basis that
subsection 8(2) of the Regulations is ultra vires of
the Commission and of no force and effect in
relation to the province of British Columbia.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.