Judgments

Decision Information

Central Western Railway Corp. v. U.T.U.

Collection	Judgments
Date	1988-01-28
Report citation	[1989] 2 F.C. 186
File numbers	A-29-87
Subjects	Constitutional Law Labour Relations Railways

Decision Content

A-29-87

Central Western Railway Corporation (Applicant)

United Transportation Union, The Brotherhood of Maintenance of Way Employees, Canadian Signal and Communications Union, Brotherhood of Locomotive Engineers and Canada Labour Rela tions Board (Respondents)

INDEXED AS: CENTRAL WESTERN RAILWAY CORP. v. U. T. U.

Court of Appeal, Marceau, Hugessen and Lacombe JJ.—Montréal, October 28 and 29, 1987; Ottawa, January 28, 1988.

Constitutional law — Distribution of powers — Application to review Canada Labour Relations Board decision sale of railway governed by Canada Labour Code — Line entirely within province — Whether line federal work, undertaking or business — Whether integral part of federal undertaking Whether western grain transportation network federal under taking — Whether interprovincial railway — Whether Parlia mentary declarations line work for general advantage of Canada valid and applicable — Whether sale of line changing constitutional character under s. 92(10)(a) or (c) — Whether federal character of line extending to undertaking.

Labour relations — Provincial company purchasing from CNR railway line entirely within province — Whether bound by existing collective agreements — Constitutional law distri bution of powers issues.

Railways — Provincial company purchasing line from CNR

— Formerly part of interprovincial railway, but now device preventing access to CN tracks — Line entirely within province

— Whether federal work — Whether character as work extending to undertaking (labour relations) — Canada Labour Relations Board correctly holding purchaser bound by existing collective agreements.

This was an application to review a decision of the Canada Labour Relations Board that the sale of a railway line was governed by section 144 of the Canada Labour Code, so that the new owner was bound by the existing collective agreements. Central Western bought a rail line, located entirely within Alberta, from CNR. The line served area grain elevators. Central Western brought grain cars to various elevator points, filled them and brought them back to Ferlow Junction, where they were picked up by CNR employees for delivery through out the province and beyond. CNR employees returned the empty grain cars to Ferlow Junction. A "locked open point derail device", controlled by CNR, prevented Central West-

ern's trains from passing freely onto the CNR tracks and vice versa. The Board held that Central Western was a federal work, undertaking or business as an integral part of a federal undertaking. The Board concluded that there were enough ties between Central Western and three federal undertakings: the CNR, the grain elevators and feed mills and the western grain transportation network, to make it a federal work or undertaking.

Held (Hugessen J. dissenting), the application should be dismissed.

Per Marceau J: The Board's conclusion was correct, but its reasoning was ill-founded. (1) The western grain transportation network was not a federal undertaking. It was not a singular and autonomous undertaking existing as an independent entity, and its establishment could not be supported by any specific field of exclusive federal jurisdictional power. (2) Although the grain elevators west of Thunder Bay were under federal juris diction because they had been declared works for the general advantage of Canada, Central Western, a transportation under taking, was not an integral part of the elevators' business which was to receive, handle, and store, but not transport, grain. Its services were not so essential as to be integral when they could be replaced by using trucks. (3) The connections between Central Western and the CNR did not require that the two entities be treated as one to regulate their activity. Although both companies benefitted from their relationship, and Central Western could hardly operate without the CNR, that did not prevent them from being separate businesses or undertakings. Even if Central Western was an essential element in the CNR's dealings with some of its clients, CNR's operations were not so dependent upon those of Central Western as to make the latter an "integral", "vital" and "permanent" part of CNR operations.

Central Western's line fell under paragraph 92(10)(a) of the Constitution Act, 1867, as an interprovincial railway and sub- sidiarily, under paragraph 92(10)(c) as having been the subject of Parliamentary declarations. Prior to its sale to Central Western, the line was an indivisible and integral part of the Canadian National network. Such a character attached to the work itself, and did not disappear when the line changed owners, or because its connection with the CNR's line was controlled by a special device. A radical change in the use and function of the line would be required to change its characterization.

In any case, Central Western's rail line had been validly declared to be for the general advantage of Canada. Even if such declarations were unnecessary when enacted because Cen tral Western's line was already an indivisible part of an inter- provincial railway, they could not be ignored. As to the submis sion that the declarations no longer applied since the line was

not owned by one of the companies referred to in the statutory provisions, it could not have been contemplated that a change of ownership would change the constitutional character of the work. Nor did the approval of the sale to a provincial company by the Governor General in Council impliedly render ineffec tive the declarations. Although Parliament can at any time rescind its own declaration, the Governor General in Council has no such power. Parliament must expressly intervene to change the constitutional characterization of a "matter".

Cases holding that the construction, repair or maintenance of a federal work could be carried out without the labour relations falling under federal jurisdiction were to be distinguished from the situation of an undertaking, such as this, whose raison d'être was to operate a federal work.

Per Lacombe J.: Central Western's line fell within federal jurisdiction because it was still subject to a declaration under paragraph 92(10)(c) of the Constitution Act, 1867 that it was a work for the general advantage of Canada. The change in ownership did not alter the effect of the paragraph 92(1)(c) declaration, since only Parliament could repeal it. The line was no longer an integral part of an interprovincial railway. Nor was it an integral part of a core federal undertaking. None of the three core federal undertakings identified by the Board formed a proper basis for upholding the Board's jurisdiction.

The entire railway undertaking, including labour relations, fell within federal competence. Central Western's employees were engaged in the day-to-day operation of a railway under taking operating over a federal work. Their involvement was of an ongoing character and essential to the employer's operation of a railway. Regulation of the conditions of employment was an integral part of federal competence over the matter.

Per Hugessen J. (dissenting): The Board had no jurisdiction to make the decision under review. Central Western's line was not a primary federal work or undertaking within paragraph 92(10)(a) (interprovincial railway). As a work, it was entirely within the province and was physically separated from CNR's line, which connects with other provinces. As an undertaking, it did not connect Alberta to other provinces. Nor was it function ally integrated with a core federal undertaking. CNR was not dependent upon Central Western. That Central Western may have been wholly dependent upon CN was irrelevant. The grain elevators were federal works, but not part of the railway works or undertakings. The "western grain transportation network" was not an undertaking at all, let alone a core federal undertak ing. It was nothing more than an agglomeration of persons,

things and policies, with no identifiable person or corporation acting as undertaker.

Central Western's line, as a work, was subject to a declara tion that it was for the general advantage of Canada, and thus within federal jurisdiction. But the declaration applied to the works, not the undertaking. Labour relations are not subject to federal jurisdiction simply because labour is performed on or in connection with a federal work. Labour relations are within provincial competence, unless jurisdiction over them is an inte gral part of Parliament's primary competence over some other single federal subject. Regulation of labour relations was not an integral element of federal authority over use of the track.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

An Act to incorporate Canadian National Railway Com pany and respecting Canadian National Railways S.C. 1919, c. 13, s. 18.

Canada Grain Act, S.C. 1970-71-72, c. 7.

Canada Labour Code, R.S.C. 1970, c. L-1, ss. 2, 108 (as

am. by S.C. 1972, s. 18, s. 1), 144 (as am. idem). Canadian National Railways Act, R.S.C. 1970, c. C-10,

ss. 18(1), 23, 31.

Canadian Wheat Board Act, R.S.C. 1970, c. C-12. Central Western Railway Corporation Act, S.A. 1984, c. 71.

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), ss. 91(29), 92(10).

Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28. Railway Act, R.S.C. 1970, c. R-2, s. 6(1)(c).

CASES JUDICIALLY CONSIDERED

APPLIED:

Northern Telecom Ltd. v. Communications Workers of Canada, [1980] 1 S.C.R. 115; Northern Telecom Canada Ltd. et al. v. Communication Workers of Canada et al., [1983] 1 S.C.R. 733; Canadian Pacific Railway Com pany v. Attorney-General for British Columbia and Attorney-General for Canada, [1950] A.C. 122 (P.C.); Luscar Collieries v. McDonald, [1927] A.C. 925 (P.C.).

DISTINGUISHED:

Luscar Collieries Ltd. v. McDonald, [1925] S.C.R. 460; [1925] 3 D.L.R. 225; Montreal Tramways Co. v. Lachine, Jacques-Cartier and Maisonneuve Railway Co. (1914), 50 S.C.R. 84; Kootenay & Elk Railway Co. v. Canadian Pacific Railway Co., [1974] S.C.R. 955; Gen-

era! Teamsters, Local 362, and Stern Transport Ltd. and Byers Transport Limited (1986), 12 CLRBR (NS) 236; Canada Labour Code (Re), [1987] 2 F.C. 30 (C.A.).

CONSIDERED:

British Columbia Electric Ry. Co. Ltd. et al. v. Canadian National Ry. Co. et al., [1932] S.C.R. 161; Construction . Montcalm Inc. v. Minimum Wage Commission, [ 1979] I S.C.R. 754; Re Canada Labour Code (1986), 72 N.R. 348 (F.C.A.); Montreal City v. Montreal Street Railway Company, [1912] A.C. 333 (P.C.); In re Regulation and Control of Radio Communication in Canada, [1932] A.C. 304 (P.C.); Attorney-General for Ontario v. Israel Winner, [1954] A.C. 541 (P.C.); Commission du Salaire Minimum v. Bell Telephone Company of Canada, [1966] S.C.R. 767; Reference re Industrial Relations and Dis putes Act, [1955] S.C.R. 529; R. v. Thumlert (1959), 28 W.W.R. 481 (Alta. S.C.A.D.); Chamney v. The Queen, [1975] 2 S.C.R. 151; The Queen in The Right of The Province of Ontario v. Board of Transport Commission ers, [1968] S.C.R. 118.

REFERRED TO:

The King v. Eastern Terminal Elevator Co., [ 1924] Ex.C.R. 167; affd [1925] S.C.R. 434; Canadian National Railway Co. v. Nor-Min Supplies Ltd., [1977] 1 S.C.R. 322; CTC Telecommunications Systems, Inc. c.o.b. as Canadian Telecommunications Group and Communica tions Workers of Canada (1985), 10 CLRBR (NS) 231 (Ont.); Cannet Freight Cartage Ltd. (In re), [1976] 1 F.C. 174 (C.A.); Re The Queen and Cottrell Forwarding Co. Ltd. (1981), 124 D.L.R. (3d) 674 (Ont. Div. Ct.); Henuset Rentals Ltd. v. United Association of Journey men and Apprentices of the Plumbing and Pipefitting Industry, Local Union 488 (1981), 6 Sask. R. 172 (C.A.); Re Maritime Engineering Limited, Labourers' Interna tional Union of North America, Local 1115, and Attor ney General of Nova Scotia (1979), 33 N.S.R. (2d) 484 (S.C.A.D.); Kelowna v. Labour Relations Bd. of B.C. et al., [1974] 2 W.W.R. 744 (B.C.S.C.); Hamilton, Grims- by and Beamsville R. Co. v. Atty.-Gen. for Ontario (1916), 29 D.L.R. 521 (P.C.).

AUTHORS CITED

Finkelstein, Neil Laskin's Canadian Constitutional Law, vol. 1, 5th ed. Toronto: Carswell, 1986.

Fraser, Ian H. "Some comments on Subsection 92(10)(c) of the Constitution Act, 1867" (1983-84), 29 McGill L.J. 557.

Hogg, Peter W. Constitutional Law of Canada, 2nd ed. Toronto: Carswell, 1985.

Lajoie, Andrée Le pouvoir déclaratoire du Parlement, Montréal: Les Presses de l'Université de Montréal, 1969.

Schwartz, Phineas "Fiat by Declaration—S. 92(10)(c) of the British North America Act" (1960-63) 2 Osgoode L.J. 1.

COUNSEL:

Thomas W. Wakeling and Gerald D. Chipeur for applicant.

James L. D. Shields for respondent Brother hood of Locomotive Engineers.

Judah Levinson for respondent Canada Labour Relations Board.

Douglas J. Wray, for respondents United Transportation Union, Canadian Signal and Communications Union, The Brotherhood of Maintenance of Way Employees.

H. Scott Fairley for Attorney General of Canada.

SOLICITORS:

Milner & Steer, Edmonton, for applicant.

Soloway, Wright, Houston, Greenberg, O'Grady, Morin, Ottawa, for respondent Brotherhood of Locomotive Engineers.

Legal Service, Canada Labour Relations Board, Ottawa, for respondent Canada Labour Relations Board.

Caley & Wray, Toronto, for respondents United Transportation Union, Canadian Signal and Communications Union, The Brotherhood of Maintenance of Way Employees.

Gowling & Henderson, Ottawa, for respon dent Attorney General of Canada.

The following are the reasons for judgment rendered in English by

MARCEAU J.: The issue in this section 28 [Fed- eral Court Act, R.S.C. 1970 (2nd Supp.), c. 10] application is whether Part V of the Canada Labour Code, R.S.C. 1970, c. L-1 applies to the employer-employee relations of the applicant cor poration. Its difficulty and implication will readily be seen when the facts that led to it are known. They are not in dispute and can briefly be summarized.

The applicant ("Central Western") was created by a special Act of the Alberta Legislature in 1984 (the Central Western Railway Corporation Act, S.A. 1984, c. 71). It operates a rail line between

Ferlow Junction and Dinosaur, a distance of approximately 105 miles, all of which is located within the province of Alberta. This rail line, known as the Stettler Subdivision, a name it bore while the track and associated lands were owned by the Canadian National Railway Company (CNR), was acquired by Central Western in 1985. The transfer of ownership of the rail line has in no way changed its essential purpose: to provide ser vice to grain elevators in that region. Essentially, Central Western's operations consist in bringing empty grain cars from Ferlow Junction to various elevator points on the Stettler line and bringing the cars back once they are filled with grain. The CNR employees bring the empty cars to Ferlow Junction and pick up the filled cars for delivery throughout the province and beyond. By means of a piece of equipment referred to as a "locked open point derail device", which is under the control of CNR, Central Western's trains are prevented from passing freely on to the CNR tracks at either terminus.

Shortly after the acquisition by Central Western of the Stettler Subdivision, the four respondent unions herein brought an application before the Board for an order that the sale of the line was governed by the provisions of section 144 [as am. by S.C. 1972, c. 18, s. 1] of the Canada Labour Code so that the new owner was bound by the collective agreements to which they and the CNR were parties.' Central Western opposed the application. Submitting that it was not a federal work, undertaking or business, the basic condition for it to be subject to the provisions of Part V of the Canada Labour Code, as more precisely con-

'Section 144 reads in part thus:

144. (1) In this section,

"business" means any federal work, undertaking or business and any part thereof;

"sell", in relation to a business, includes the lease, transfer and other disposition of the business.

(2) Subject to subsection (3), where an employer sells his business,

(a) a trade union that is the bargaining agent for the employees employed in the business continues to be their bargaining agent;

(Continued on next page)

firmed in section 108 [as am. idem] of the Code, 2 Central Western disputed the power of the Board to entertain the unions' application. The Board rejected the submission and, affirming its jurisdic tion, made the order sought. Central Western immediately launched the present section 28 application.

The approach adopted by the Board and the reasoning it followed to arrive at the conclusion that Central Western was a federal work, under taking or business subject to federal labour legisla tion are set out in lengthy reasons a brief outline of which should be sufficient to appreciate the appli cant's objections.

The first part of the reasons is devoted to a complete review of the history of the Stettler Subdivision, of the incorporation of Central West ern, of that corporation's structure and operations and its relations with the CNR. Then comes the central analysis. An allusion is made to the possi bility that Central Western may be covered by a declaration that it is a work for the general advan tage of Canada under paragraph 92(10)(c) 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 Constitution Act, 1982, Item 1)]' but any

(Continued from previous page)

(b) a trade union that made application for certification in respect of any employees employed in the business before the date on which the business is sold may, subject to this Part, be certified by the Board as their bargaining agent;

(e) the person to whom the business is sold is bound by any collective agreement that is, on the date on which the business is sold, applicable to the employees employed in the business; and

(d) the person to whom the business is sold becomes a party to any proceeding taken under this Part that is pending on the date on which the business was sold and that affects the employees employed in the business or their bargaining agent.

2 The section reads as follows:

108. This Part applies in respect of employees who are employed upon or in connection with the operation of any federal work, undertaking or business and in respect of the employers of all such employees in their relations with such employees and in respect of trade unions and employers' organizations composed of such employees or employers.

3 The paragraph is only referred to without being reproduced in the reasons. I will come to it later.

necessity for dealing with the issue is discarded in view of the fact that a conclusion can be more easily reached on the basis of another approach. This other approach is said to be based on a basic premise. "In the transportation industry", it is stated, "there are generally two ways that federal jurisdiction is triggered": when there "is an extra- provincial element in the work or undertaking in question" and when "the operations of an other wise provincial work or undertaking are an inte gral part of a federal undertaking." 4 The first approach is declared of no avail in the absence of the extra-provincial element required, but the second, which brings into play the principles and guidelines established in the two leading cases of Northern Telecom Ltd. v. Communications Work ers of Canada, [1980] 1 S.C.R. 115, at pages 132-133 and [Northern Telecom Canada Ltd. et al. v. Communication Workers of Canada et al.] [1983] 1 S.C.R. 733, at pages 770-774, is seen as being determinative. Three federal undertakings with which Central Western, as a going concern, can be seen as being connected are first identified: the CNR, the elevators and feed mills situated along the railway line and the western grain trans portation network. There follows an analysis of the physical and operational connection between Cen tral Western and each of the three possible candi dates from which it is concluded that with each of them there are enough ties to make Central West ern a federal work or undertaking.

Counsel for the applicant naturally disputes the validity of the Board's reasoning and I must say that I too have difficulties with it.

First, I do not think that the "western grain transportation network" can be seen as a federal undertaking for the purpose of applying the test set forth by the Northern Telecom judgments.

4 The two approaches here referred to by the Board may have been suggested to it by its own Act but, in fact, they are the two situations where an otherwise local work or undertaking may fall under paragraph 92(10)(a) of the Constitution Act, 1867. This too will be discussed later.

This national communication system is a goal achieved through various means, it is not a singu lar and autonomous undertaking existing as an independent entity and in any event its establish ment would not, considered in itself, be supported by any specific field of exclusive federal jurisdic tional power. (One may refer on this point to the comments of Lord Reid in Canadian Pacific Rail way Company v. Attorney-General for British Columbia and Attorney-General for Canada (the Empress Hotel case), [1950] A.C. 122 (P.C.), especially at pages 140 et seq.).

Second, I am not prepared to accept that the fact that Central Western's main operations are devoted to providing service to the grain elevators is sufficient to trigger federal jurisdiction. It is true that the grain elevators west of the city of Thunder Bay are under federal jurisdiction since they, with the feed mills, have been declared works for the general advantage of Canada under the Canada Grain Act, S.C. 1970-71-72, c. 7, as well as under the Canadian Wheat Board Act, R.S.C. 1970, c. C-12. They may therefore, I agree with the Board, constitute a possible core federal undertak ing for local works or businesses. I do not see, however, how Central Western, as a transportation undertaking, can be an integral part of elevators whose business is the receiving, handling, storing, weighing, grading, cleaning and discharging, but not transporting grain. I do not see either how Central Western's operations can be so "vital" and "essential" to the elevators' business as to consti tute an integral part thereof as required by the Northern Telecom test, as I understand it, bearing in mind in particular that the services of Central Western could very well be dispensed with, if necessary, and replaced by a system making use of trucks. (See on those points: The King v. Eastern Terminal Elevator Co., [1924] Ex.C.R. 167; affd [1925] S.C.R. 434; Canadian National Railway Co. v. Nor-Min Supplies Ltd., [1977] 1 S.C.R. 322; see also CTG Telecommunications Systems, Inc. c.o.b. as Canadian Telecommunications

Group and Communications Workers of Canada (1985), 10 CLRBR (NS) 231 (Ont.), at page 261.

Finally, it does not appear to me that the con nections between Central Western as a business and a going concern and the CNR, the national railway, are such that the two undertakings ought to be treated as being one for the purpose of regulating their activity. It is true that the two companies benefit from their relationship and indeed that Central Western could hardly even operate without the CNR; but the situation was not that much different in the Empress Hotel case, supra, and yet the Privy Council refused to draw therefrom a conclusion of integration. The often- quoted statement of Lord Reid in that case is here opposite (at page 144):

No doubt the fact that there is a large and well-managed hotel at Victoria tends to increase the traffic on the appellant's system; it may be that the appellant's railway business and hotel business help each other, but that does not prevent them from being separate businesses or undertakings.

It is true also that, to fulfill the obligation it may have assumed of carrying to its final destination the grain brought to and handled by the elevators situated along the track between Ferlow Junction and Dinosaur, the CNR must now rely, on a permanent basis, on services provided by Central Western's operations. But if that makes Central Western an essential element in the CNR's deal ings with some of its clients, it certainly does not make the operations of the CNR dependent upon those of Central Western so as to make the latter an "integral", "vital" and "permanent" part of the operations of the former.

So, I am not at all convinced that the reasoning followed by the Board is well-founded. It does not necessarily follow, however, that its conclusion is wrong. I now think that it is, indeed, the right one but, of course, to support it another reasoning is required. I come to that reasoning.

The provisions of the Constitution Act, 1867 on the basis of which the question of constitutional jurisdiction arising here must be resolved are con tained in subsection 92(10) which must be read in relation to subsection 91(29). They provide as follows:

91. It shall be lawful for the Queen, by and with the Advice and Consent of the Senate and House of Commons, to make Laws for the Peace, Order, and good Government of Canada, in relation to all Matters not coming within the Classes of Subjects by this Act assigned exclusively to the Legislatures of the Provinces; and for greater Certainty, but not so as to restrict the Generality of the foregoing Terms of this Section, it is hereby declared that (notwithstanding anything in this Act) the exclusive Legislative Authority of the Parliament of Canada extends to all Matters coming within the Classes of Subjects next hereinafter enumerated; that is to say,-

29. Such Classes of Subjects as are expressly excepted in the Enumeration of the Classes of Subjects by this Act assigned exclusively to the Legislatures of the Provinces.

92. In each Province the Legislature may exclusively make Laws in relation to Matters coming within the Classes of Subjects next hereinafter enumerated; that is to say,-

10. Local Works and Undertakings other than such as are of the following Classes:—

(a) Lines of Steam or other Ships, Railways, Canals, Telegraphs, and other Works and Undertakings con necting the Province with any other or others of the Provinces, or extending beyond the Limits of the Province;

(b) Lines of Steam Ships between the Province and any British or Foreign Country:

(c) Such Works as, although wholly situate within the Province, are before or after their Execution declared by the Parliament of Canada to be for the general Advan tage of Canada or for the Advantage of Two or more of the Provinces. 5

5 Section 2 of the Canada Labour Code incorporates these provisions of the Constitution Act, 1867 in its definition of "federal work, undertaking or business" to which the Code applies. It reads in part thus:

2. In this Act

"federal work, undertaking or business" means any work, undertaking or business that is within the legislative au thority of the Parliament of Canada, including without restricting the generality of the foregoing:

(Continued on next page)

It is my view that the Stettler Subdivision, as it is now operated, falls directly under paragraph (a) of subsection 92(10) as being an interprovincial railway (the possibility that the Board rejected before reaching the conclusion that paragraph 92(10)(a) indeed applied but because the under taking was connected to an interprovincial one), and subsidiarily, under paragraph (c) as having been the subject of a declaration (the possibility that the Board declined to consider).

My reason for thinking that the Stettler Sub division, as it is used, must be seen as a railway connecting a province with other provinces within the meaning of paragraph 92(10)(a) of the Con stitution Act, 1867 can be easily put. Prior to its sale to Central Western, this line between Ferlow Junction and Dinosaur formed an indivisible and integral part of the Canadian National network. It seems to me that such a character, which attaches to the work itself, cannot be seen as having disap peared for the sole reason that the line is now owned and operated by a different corporate entity, or that its connection with the CNR's line is now controlled by a special device. Being oper ated exactly as it was previously, the line remains a segment of a railway "connecting the province with other provinces". A radical change in the use and function of the line would, I suggest, have been required to change that perspective. Had the Stettler Subdivision become, in its operation, a tourist attraction hauling paying passengers from scenic spot to scenic spot, for example, then there would be ground for concluding that the line has left behind its old character and acquired a new one. Nothng of the sort has occurred here.

(Continued from previous page)

(b) a railway, canal, telegraph or other work or undertak ing connecting any province with any other or others of the

provinces, or extending beyond the limits of a province;

(h) a work or undertaking that, although wholly situated within a province, is before or after its execution declared by the Parliament of Canada to be for the general advan tage of Canada or for the advantage of two or more of the provinces; and

I see no meaningful difference in the situation we have here and that which was before the Privy Council in the case of Luscar Collieries v. McDonald, [1927] A.C. 925 (P.C.) where the conclusion reached was expressed as follows (at pages 932-933):

... having regard to the way in which the railway is operated, their Lordships are of opinion that it is in fact a railway connecting the Province of Alberta with others of the Provinces, and therefore falls within s. 92, head 10(a), of the Act of 1867. There is a continuous connection by railway between the point of the Luscar Branch farthest from its junction with the Mountain Park Branch and parts of Canada outside the Prov ince of Alberta.

On the other hand, it seems to me that the decision in British Columbia Electric Ry. Co. Ltd. et al. v. Canadian National Ry. Co. et al., [ 1932] S.C.R. 161 must be distinguished in that the one-mile stretch of rail in question there had not previously been operated by a national company as an indivis ible part of a national railway system. The deci sions rendered in cases of severance and sale of part of federal undertakings, (as, for instance, in the case of General Teamsters, Local 362, and Stern Transport Ltd. and Byers Transport Lim ited (1986), 12 CLRBR (NS) 236) must also be readily distinguished. As put by one of the counsel for the respondents: "once an undertaking is severed, there remains nothing common to the two branches except, possibly, a degree of coordination or cooperation in the two businesses. Where a work is severed, however, 6 the physical premises and the physical connection remain. The work remains the same as it was prior to the sale. An undertaking which is divided between two compa nies, one of which operates its local aspects and another its inter-provincial aspects, effectively becomes two separate undertakings which may be judged separately. The same should not be said of an interprovincial work which is notionally divided".

6 For a discussion and an analysis of the cases on the distinction between a work and an undertaking, see Neil Fin- kelstein, Laskin's Canadian Constitutional Law, vol. 1, 5th ed. Toronto: Carswell 1986, at pp. 628-629.

Even if I am wrong in thinking that the Stettler Subdivision comes under paragraph 92(10)(a) of the Constitution Act, 1867, I would still see it as falling under federal jurisdiction by operation of paragraph 92(10)(c). Indeed, in my understanding of its history, it has more than once been declared by Parliament to be for the general advantage of Canada, and there is no reason to believe that these declarations have been expressly or tacitly repealed since or for some other reason have become ineffective.

The Stettler Subdivision is a rail line which was part of the Canadian Northern Railway system by virtue of an amalgamation between the Alberta Midland Railway Company and the Canadian Northern Railway Company, in July 1909. By 1919, the Government of Canada had acquired ownership and control of the Canadian Northern Railway Company. In that year, An Act to incor porate Canadian National Railway Company and respecting Canadian National Railways, S.C. 1919, c. 13 created the CNR and authorized the Crown to transfer the stock of Canadian Northern Railway to the CNR. Section 18 of that Act read as follows:

18. The works of any of the Companies comprised in the Canadian Northern System which have not heretofore been declared to be works for the general advantage of Canada are hereby declared to be works for the general advantage of Canada, and the works of any Company or Companies hereaf ter from time to time declared by the Governor in Council to be comprised in the Canadian Northern System are hereby declared from and after the date of the making of such declaration by the Governor in Council to be works for the general advantage of Canada.

A first schedule to that Act listed, as the first constituent company, The Canadian Northern Railway Company, and a second schedule identify ing the lines of railway constructed by the Canadi- an Northern Western Railway Company referred specifically to what appears to me to be the line that was to become known as the Stettler Subdivi sion, when it spoke of a line "from a point on the constructed line between Big Valley and Stettler, south-easterly to a junction with the Saskatoon- Calgary line". This was a first declaration which still appears, with only slight modifications as to

its form, in subsection 18 (1) of the present Canadian National Railways Act [R.S.C. 1970, c.

C-10].'

It is not the only one. The Railway Act, R.S.C. 1970, c. R-2 contains a declaration to the same effect. It is to be found in paragraph 6(1)(c) which provides as follows:

6. (1) The provisions of this Act, without limiting the effect of section 5, extend 'and apply to

(c) every railway or portion thereof, whether constructed under the authority of the Parliament of Canada or not, now or hereafter owned, controlled, leased, or operated by a company wholly or partly within the legislative authority of the Parliament of Canada, or by a company operating a railway wholly or partly within the legislative authority of the Parliament of Canada, whether such ownership, control, or first mentioned operation is acquired or exercised by purchase, lease, agreement or other means whatsoever, and whether acquired or exercised under authority of the Parlia ment of Canada, or of the legislature of any province, or otherwise howsoever; and every railway or portion thereof, now or hereafter so owned, controlled, leased or operated shall be deemed and is hereby declared to be a work for the general advantage of Canada.

I see no reason why these declarations which are among the basic provisions of two of the most important federal statutes should be denied their full constitutional meaning and effect. An atempt to raise doubt as to their validity or applicability was made on behalf of the applicant but, in my view, to no avail.

To dispute the validity of the declaration, two lines of argument were adopted. It was suggested first that the declarations were unconstitutional because they were too general and lacked the specificity required for them to be fully meaning ful. The argument was suggested by an opinion expressed by Mr. Justice Duff (as he then was) in the course of his reasons in the case Luscar Col lieries Ltd. v. McDonald, [1925] S.C.R. 460; [1925] 3 D.L.R. 225. But as I read the comments of Duff J. to which reference was made (at pages

7 It now reads thus:

18. The railway or other transportation works in Canada of the National Company and of every company mentioned or referred to in Part I or Part I1 of the schedule and of every company formed by any consolidation or amalgamation of any two or more of such companies are hereby declared to be works for the general advantage of Canada.

476-477 S.C.R.; 236-237 D.L.R.), the concern of the learned Justice was with respect to works not yet executed and even not yet in contemplation of being executed. I fail to see how a declaration which clearly refers to works already in existence could be considered non-existent simply because its terms would be said to be too general.

It was argued more specially that the declara tions were void, in so far as the Stettler Subdivi sion was concerned, because, at the time they were enacted, that line was already an indivisible part of an interprovincial railway and as such did not need to be declared for the general advantage of Canada to fall under federal jurisdiction. I am not sure that the argument could even be advanced with respect to the very first specific declaration of 1911, and, in any event, it does not impress me. Even if the declarations were, when enacted, "unmeaning" or "unnecessary", as was said by some judges to underline that they had then no independent constitutional consequence, it does not follow that they can simply be ignored as if they have never been made. Parliament, in its wisdom, has seen fit to make the declarations in spite of their possible so-called "unmeaningness" no doubt for some reason, which reason may well be, if not only for greater certainty, to cover eventual sever ances like the one which occurred here.

The objections to the applicability of the decla rations, assuming their validity, were again two fold. It was said that the Stettler Subdivision was no longer covered, since it was no longer owned by one of the companies referred to and identified in the statutory provisions. The argument was based on the assumption that the reference to ownership in the declarations was made not merely as a means of identification of the works but as a necessary qualification. I do not agree with that assumption. It is the work which has been declared for the advantage of Canada and I fail to see how

it could have been contemplated that it would cease to be so, not as a result of a transformation in its use and operation, but as a mere change in the corporate entity owning it. It was said finally that, if the Stettler Subdivision was initially cov ered by the declarations, the approval of its sale by the Governor General in Council, pursuant to sec tions 23 and 31 of the Canadian National Rail ways Act, had had the effect of putting an end to any consequence that could have derived there from. This ultimate argument seeks support in the decision of the Supreme Court in Montreal Tram- ways Co. v. Lachine, Jacques-Cartier and Mai- sonneuve Railway Co. (1914), 50 S.C.R. 84 where the majority expressed the opinion that the author ization, by special Act of Parliament, of the sale, to a provincial company, of some property of a Dominion railway had, by necessary implication, rendered ineffective a declaration that had previ ously been made with respect to that property. The distinction however is obvious. Parliament can rescind at any time its own declaration; I know of no power of the sort in the Governor General in Council.

I have taken care to discuss and reject each of the arguments advanced in support of the proposi tion that federal jurisdiction over the Stettler Sub division cannot come from a declaration under paragraph (c) of head 10 of the Constitution Act, 1867. But behind my reply to the various points raised, it will have been seen that my overall reaction is similar to that which I had when I analysed the situation under paragraph (a). I cannot accept that the effect of a declaration of national interest by Parliament could be made to disappear, without the express intervention of Par liament itself, any more than I could be convinced that the interprovincial character of a portion of a national railway system could disappear simply by a change of ownership. Indeed, it would seem quite inappropriate if a change in the constitutional characterization of a "matter" could be effected by a mere sale between corporate persons with no corresponding change in the underlying constitu tional values that determined the classification in the first instance. So, in my judgment, the Stettler Subdivision is not only a railway connecting sever-

al provinces within the meaning of paragraph 92(10(a) of the Constitution Act, 1867, it is also a work with respect to which declarations under paragraph 92(10) (c) of that Act are in full effect.

Is this situation determinative of the issue before us? It is if one is entitled to deduce, from the fact that the Stettler Subdivision is a federal work, that the labour relations of Central Railway fall under federal jurisdiction and are to be governed by Part V of the Canada Labour Code. And I think that this is indeed the case, a view manifestly shared by all counsel none of them having disputed it, but I realize that there is a difficulty.

It may be said that the federal character of the Stettler Subdivision, as a railway under paragraph 92(10)(a) or as a work under paragraph 92(10)(c), ought not to be extended to Central Railway the undertaking on the sole basis of the relation between the two. The argument could be that there is no reason why federal works should not be used by provincial undertakings, and sup port could be sought in those cases which have now clearly established that the construction, repair or maintenance of a federal work could be carried out by an undertaking without the labour relations falling under federal jurisdiction. (See, for exam ple, Construction Montcalm Inc. v. Minimum Wage Commission, [ 1979] 1 S.C.R. 754; Re Canada Labour Code (1986), 72 N.R. 348 (F.C.A.)). It is my opinion, however, that a basic difference must be seen here between, on the one hand, an undertaking which is only called upon to participate in the construction, repair or mainte nance of a federal work, or which happens to use such a work to conduct its operations and, on the other hand, the undertaking whose sole reason for being is to operate on a continuing basis the federal work, to exploit its productive capacity, to make it produce, so to speak, the "national general benefit" expected from it. The national dimension present in the case of the latter, makes it normal, it

seems to me, that the federal character of the work would attract federal jurisdiction over all essential aspects of the operation thereof. This, in any event, is the position taken by Parliament in enacting section 108 of the Canada Labour Code which reads:

108. This part applies in respect of employees who are employed upon or in connection with the operation of any federal work, undertaking or business and in respect of the employers of all such employees in their relations with such employees and in respect of trade unions and employers' organ izations composed of such employees or employers. (I under lined the words I consider most significant in support of my proposition.)

These are the reasons why I think that the decision of the Board was right and that this application should be dismissed.

* * *

The following are the reasons for judgment rendered in English by

HUGESSEN J. (dissenting): Central Western Railway Corporation is a company incorporated by an Act of the Legislature of Alberta. It runs a railway. The trackage is located wholly within Alberta and consists of a little over one hundred miles of the former Canadian National Railway line connecting Edmonton and Calgary. It pur chased the line and the right-of-way (but no roll ing stock) from the CNR. The line was previously known as the Stettler Subdvision of the CNR. Prior to the sale, the line interconnected with the CNR's line but it no longer does so. CN has installed and controls a device known as a "locked open point derail" at the place where the two lines meet. This device physically separates the system of Central Western from that of CN by a gap large enough to derail any train passing over it while it is open. Thus, without CN's permission,

traffic cannot pass from Central Western's line onto CN's line or vice versa.

Central Western owns three locomotives, which it purchased elsewhere, as well as some other miscellaneous rolling stock. The vast bulk of its business is the transportation of grain. This grain is carried in rail cars which are owned by neither CN nor Central Western. CN brings them empty to the terminus of Central Western's line, whence Central Western takes them to a number of grain elevators along the route, where they are spotted; when the cars are filled with grain, Central West ern brings them back to its terminus point, where CN picks them up and takes them on its main line to various points outside Alberta.

Central Western has eight employees including the president and vice-resident. The only question to be determined on this section 28 application is whether Central Western's labour relations are subject to federal jurisdiction. The Canada Labour Relations Board so found in the decision under review.

The rule in labour relations in Canada is provin cial competence; federal jurisdiction is exceptional. The locus classicus is found in the six principles stated by Dickson J. (as he then was) in Northern Telecom Ltd. v. Communications Workers of Canada, [1980] 1 S.C.R. 115 (Northern Telecom No. 1), at page 132:

(I) Parliament has no authority over labour relations as such nor over the terms of a contract of employment; exclusive provincial competence is the rule.

(2) By way of exception, however, Parliament may assert exclusive jurisdiction over these matters if it is shown that such jurisdiction is an integral part of its primary competence over some other single federal subject.

(3) Primary federal competence over a given subject can pre vent the application of provincial law relating to labour rela tions and the conditions of employment but only if it is demon-

strated that federal authority over these matters is an integral element of such federal competence.

(4) Thus, the regulation of wages to be paid by an undertak ing, service or business, and the regulation of its labour rela tions, being related to an integral part of the operation of the undertaking, service or business, are removed from provincial jurisdiction and immune from the effect of provincial law if the undertaking, service or business is a federal one.

(5) The question whether an undertaking, service or business is a federal one depends on the nature of its operation.

(6) In order to determine the nature of the operation, one must look at the normal or habitual activities of the business as those of "a going concern", without regard for exceptional or casual factors; otherwise, the Constitution could not be applied with any degree of continuity and regularity.

As was made clear in that case and in the subsequent decision in Northern Telecom Canada Ltd. et al. v. Communication Workers of Canada et al., [1983] 1 S.C.R. 733 (Northern Telecom No. 2), federal jurisdiction in labour relations is engaged not only where there is a primary federal undertaking but also where there is a subsidiary undertaking which is physically and operationally integrated into a core federal undertaking.

The question thus becomes whether Central Western is itself a primary federal undertaking or is functionally integrated with some other core federal undertaking so as to make its labour rela tions subject to the Canada Labour Code.' That question, in its turn, requires a consideration of the provisions of subsections 91(29) and 92(10) of the Constitution Acts, 1867 to 1982:

29. Such Classes of Subjects as are expressly excepted in the Enumeration of the Classes of Subjects by this Act assigned exclusive to the Legislatures of the Provinces.

8 R.S.C. 1970, c. L-1.

92. In each Province the Legislature may exclusively make Laws in relation to Matters coming within the Classes of Subjects next hereinafter enumerated; that is to say,-

10. Local Works and Undertakings other than such as are of the following Classes:—

(b) Lines of Steam Ships between the Province and any British or Foreign Country;

Subsection 92(10) speaks of both "works" and "undertakings". In my view, it is essential to a proper understanding of the text to bear this fact in mind and to know that "works" and "undertak- ings" are two quite separate things.

In Montreal City v. Montreal Street Railway Company, [1912] A.C. 333, Lord Atkinson, speak ing for the Privy Council and referring particularly to the words of paragraph 92(10)(c), said [at page 342]:

These works are physical things, not services.

The words of Lord Atkinson were repeated by Viscount Dunedin, speaking for the Privy Council, In re Regulation and Control of Radio Communi cation in Canada, [1932] A.C. 304, at page 315, where he went on to draw the obvious distinction between the "works" alone of paragraph 92(10)(c) and the "works and undertakings" of paragraph 92(10)(a):

"Undertaking" is not a physical thing, but is an arrangement under which of course physical things are used.

The Privy Council returned to the matter in Attorney-General for Ontario v. Israel Winner, [1954] A.C. 541. Lord Porter, speaking for the Board, said, at pages 571-572:

The first proposition involves a close and careful consider ation of the terms and effect of section 92(10)(a). The argu-

ment was put in a number of ways. In the first place it was said that works and undertakings must be read conjunctively, that the subsection has no operation unless the undertaking is both a work and an undertaking—the former a physical thing and the latter its use. There was, it was maintained, in the present instance no work, and the existence of a work was an essential element in order to make the subsection applicable. The neces sity for the existence of both elements might, it was said, be illustrated by considering the case of a railway, where there was both a track and the carriage of goods and passengers over it, and in constructing the words "works and undertaking" regard must be paid to the words associated with them in the subsection.

Their Lordships do not accept the argument that the combi nation of a work and an undertaking is essential if the subsec tion is to apply. Perhaps the simplest method of controverting it is to point out that the section begins by giving jurisdiction to the provinces over local works and undertakings. If, then, the argument were to prevail, the province would have no jurisdic tion except in a case where the subject-matter was both a work and an undertaking. If it were not both, but only one or the other, the province would have no authority to deal with it, and at any rate under this section local works which were not also undertakings and local undertakings which were not works would not be subject to the jurisdiction of the province—a result which, so far as their Lordships are aware, has never yet been contemplated. Moreover, in subsection (l0)(c) the word "works" is found uncombined with the word "undertakings," a circumstance which leads to the inference that the words are to be read disjunctively so that if either works of udertakings connect the province with others or extend beyond its limits, the Dominion, and the Dominion alone, is empowered to deal wth them.

The case of steamships is an even more potent example of the difficulty of reconciling the suggested construction with the wording of the section. Lines of steamships between the prov ince and any British or foreign country can carry on their operations without the existence of any works. The only con necting link which they provide is by passing to and fro from the one to the other. Their Lordships must accordingly reject the suggestion that the existence of some material work is of the essence of the exception. As in ships so in buses it is enough that there is a connecting undertaking.

That works are separate and distinct from undertakings and that the two words are to be read disjunctively in subsection 92(10) was again con firmed by the Supreme Court in Commission du Salaire Minimum v. Bell Telephone Company of Canada, [1966] S.C.R. 767, at page 772.

Finally there is the assertion, in my respectful

view incontrovertible, by Rand J. in the Stevedor- ing reference [at page 553]: 9

Undertakings, existing without works, do not appear in 92(10)(c) and cannot be the subject of such a delaration. 10

If I have found it necessary to insist on the distinction between "works" and "undertakings", it is because the word "railway" is often used interchangeably to designate either. As a work, a railway is a line of track and the attendant right- of-way and installations; as an undertaking, it is a business with assets (including, but not by any means limited to, the railway work) and employees.

Against this background, three possible routes have been suggested by which Central Western's labour relations may be subject to federal jurisdic tion. These are:

1. That Central Western is itself a primary federal work or undertaking within the meaning of paragraph 92(10) (a);

2. That Central Western is a subsidiary under taking which is functionally integrated with a core federal undertaking so as to bring its labour rela tions under federal control. Three possible federal core undertakings are identified:

A. The CNR;

B. The grain elevators lying along the Central Western line;

9 Reference re Industrial Relations and Disputes Act, [1955] S.C.R. 529.

1° I cannot accept the view propounded by some commenta tors that this passage is support for the proposition that under takings existing with works can be subject to a paragraph 92(10)(c) declaration. See P. Schwartz "Fiat by Declaration" (1960-63) 2 Osgoode Hall L.J. 1; Andrée Lajoie, Le pouvoir déclaratoire du Parlement, Montréal, Les Presses de l'Univer- sité de Montréal, 1969. This interpretation seems to postulate a drafting error, either in the omission of "undertakings" from paragraph (c) or in their inclusion in paragraph (a); it also ignores the very express judicial opinions which I have quoted. For a better view, see I. H. Fraser, "Some comments on subsection 92(10)(c) of the Constitution Act, 1867", (1983-84) 29 McGill L.J. 557. The latter author gives a particularly helpful and rigorous analysis of paragraph 92(10)(c) and the various attempts at its interpretation.

C. The "western grain transportation network".

3. That Central Western is a work which has been made the object of a declaration under para graph 92(10)(c).

Each of these must be examined in turn.

1. Central Western as a primary federal work or undertaking

The proposition that Central Western is a work or undertaking connecting Alberta with any other provinces or extending beyond the limits of Alber- ta was not accepted by the Board and was not urged before us with any vigour. It can, I think, be disposed of fairly readily. As a work, the line of Central Western is wholly contained within the limits of Alberta and is physically separated from the line of the CNR, which connects with other provinces. The only decision which could conceiv ably support federal jurisdiction is Luscar Collier ies v. McDonald, [1927] A.C. 925 (P.C.). That decision concerns a branch line over which trains could pass directly onto the interprovincial line and which was, in fact, operated by an interprovin- cial railway undertaking. Neither of those condi tions exist here. Indeed the situation of Central Western is even stronger than that which obtained in British Columbia Electric Ry. Co. Ltd. et al. v. Canadian National Ry. Co. et al., [1932] S.C.R. 161, where a branch which made direct connection at each end with interprovincial railways but which was owned and operated by a provincial undertaking was held not to be subject to federal jurisdiction. "

" See also Kootenay & Elk Railway Co. v. Canadian Pacific Railway Co., [19741 S.C.R. 955, which upheld provincial jurisdiction over a railway which was to run to within one-quar ter of an inch of the international boundary at a point where another railway was to run to within one-quarter of an inch of the other side of the boundary. The authority of the case is perhaps weakened, however, not only by strong dissenting views but also by the fact that the railway had not, in fact, been built and the decision dealt only with the project rather than with the reality.

Nor can Central Western as a railway undertak ing be seen as connecting Alberta with other prov inces or extending beyond provincial limits. The employees of Central Western never take their trains off their employer's trackage and they could not, even if they wanted to, drive the the rolling stock onto a line which might eventually lead them beyond provincial boundaries.

2. Central Western as a subsidiary undertaking integrated to a core federal undertaking

A. The CNR—There is no indication whatever that the CNR is in any way dependant upon Central Western for its operations. Quite the con trary. CN sold the Stettler Subdivision to Central Western and had for some years prior to the sale been attempting to abandon the line. The fact that Central Western may be wholly dependent on CN in order to carry out its railway undertaking is, of course, irrelevant for our purposes since it has never been the case that a provicial undertaking became subject to federal jurisdiction simply because it is wholly dependent for its existence on a federal undertaking; the freight forwarders deci sions are a good illustration of this. ' 2

B. The grain elevators—These are federal works having been declared to be for the general advantage of Canada by Parliament pursuant to paragraph 92(10)(c). As has been indicated, how ever, that declaration can only operate with respect to a work and not an undertaking. They are not part of the railway works. As undertakings, the elevators are as functionally distinct from the railway as they are from the farmers' trucks which deliver grain to them. An elevator serves for the receipt, grading, handling and storage of grain but not for its transportation. And even if the shipping of grain was seen as being essential to the function of an elevator (as opposed to its use), it is not by any means clear that such function is dependent upon the railway.

' 2 See Cannet Freight Cartage Ltd. (In re), [1976] 1 F.C. 174 (C.A.); Re The Queen and Cottrell Forwarding Co. Ltd. (1981), 124 D.L.R. (3d) 674 (Ont. Div. Ct.).

C. "Western grain transportation network"— This was the principal basis upon which the Board founded its decision. In my view and with respect, it is simply untenable to view the "western grain transportation network" as being a core federal undertaking. At the most basic level, it cannot be regarded as an undertaking at all since there is no identifiable person or corporation which acts as undertaker. The very expression "western grain transportation network" appears to be a construct based on the references in Northern Telecom No. 2 to Bell's interprovincial telecommunications net work. The distinction is, of course, obvious. The Bell network is an identifiable undertaking with a single integrated direction. The "western grain transportation network" is an agglomeration of persons, things and policies. It is an abstraction. Indeed the concept represents a quantum leap in the extension of federal jurisdiction. If there is really a national grain transportation network such as to support federal jurisdiction over every local grain transportation undertaking, it must presum ably extend to road transportation of grain as well. Also the finding in Northern Telecom No. 2 would result in the federal jurisdiction over every provin cial telephone company which was linked to or formed part of a national "Canadian telecommuni cations network". Those are propositions which I cannot accept.

3. Central Western as a work declared to be for the general advantage of Canada

Immediately prior to the sale by CNR to Cen tral Western, the line was the subject of a declara tion under paragraph 92(10)(c). That statutory declaration had existed in varying forms since the days when the line had been the property of the Canadian Northern Railway. Its most recent form appears in subsection 18(1) of the Canadian Na tional Railways Act. 13 The relevant words read:

13 R.S.C. 1970, c. C-10.

18. (I) The railway or other transportation works in Canada of the National Company ... are hereby declared to be works for the general advantage of Canada.

Here again the distinction between works and undertakings is vital. 14 What has been declared to be for the general advantage of Canada are the works of CNR. For the purposes of our case, that means the line of tracks comprising the Stettler Subdivision. It does not mean the undertaking carried out by the CNR on those tracks. If it did, the declaration would, of course, have ceased to have effect as soon as the CNR sold the right-of- way and stopped carrying on its undertaking there on. As it is, however, since the declaration envis ages only works or physical things, those works do not change or become any less for the general advantage of Canada by reason of a simple change in their ownership. 15 I am, accordingly, of the view that Central Western's line, as a work, continues to be subject to the declaration and therefore to fall within federal jurisdiction.

That does not resolve the question, however. There is, as far as I am aware, no case which holds that labour relations are subject to federal jurisdic tion simply because the labour is performed on or in connection with a federal work. That is hardly surprising. Works, being physical things, do not have labour relations. Undertakings do. In the passage from Northern Telecom No. 1 quoted at the beginning of these reasons, Dickson J. is care ful to talk of the labour relations of an "undertak-

14 Paragraph 2(h) of the Canada Labour Code asserts federal jurisdiction over

2....

As I have attempted to show, this provision is constitutionally incompetent in so far as it extends to undertakings not other wise within federal authority. As can be seen, however, subsec tion 18(l) only touches the "works" of the CN R.

15 It might well be otherwise if the line were abandoned; would it then cease to be a railway work? The point does not arise for decision here.

ing, service or business". There is of course no reason why federal works should not be used by provincial undertakings to conduct their opera tions. Thus it has been held that a provincial railway may interconnect with and run its trains over the tracks of a railway which is federal by virtue of a paragraph 92(10)(c) declaration with out thereby losing its provincial character: Mon- treal City v. Montreal Street Railway Company, supra.

It seems clear also that the construction, repair or maintenance of a federal work is not a matter which is for that reason subject to federal labour relations jurisdiction. It is difficult to conceive of a work more federal in character than an airport or a bridge on the transcontinental railway line but the Supreme Court, in Construction Montcalm Inc. v. Minimum Wage Commission, [1979] 1 S.C.R. 754, and this Court, in Canada Labour Code (Re), [1987] 2 F.C. 30, have held that they were subject to provincial labour jurisdiction. In the same vein, it has been held that undertakings engaged in the construction of interprovincial pipelines 16 or federal wharves" (both of which are clearly "works") are subject to provincial labour relations legislation. The other side of that coin is that municipal employees who operate an airport, viewed as an undertaking rather than a mere physical work,' 8 are under federal labour relations jurisdiction. 19

16 Henuset Rentals Ltd. v. United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry, Local Union 488 (1981), 6 Sask. R. 172 (C.A.).

17 Re Maritime Engineering Limited, Labourers' Interna tional Union of North America, Local 1115, and Attorney General of Nova Scotia (1979), 33 N.S.R. (2d) 484 (S.C.A.D.).

" The word "airport", like "railway", may be used to desig nate either a work or an undertaking.

" Kelowna v. Labour Relations Bd. of B.C. et al., [1974] 2 W.W.R. 744 (B.C.S.C.).

It is difficult to know the precise extent of federal jurisdiction over a work declared to be for the general advantage of Canada under paragraph 92(10)(c). It is perhaps unwise that we attempt to trace the limits here. Certainly it would appear, to paraphrase Beetz J. in Construction Montcalm Inc., supra, to extend to decisions as to whether and where to construct the work, its design, dimen sions and the materials to be employed.

It may well be that, as suggested by some commentators, the effect of a declaration under paragraph 92(10(c) is

... to bring within federal authority not only the physical shell or facility but also the integrated activity carried on therein 20

The cases cited to support this proposition, how ever, do not extend federal jurisdiction beyond what is necessary to the regulation of the use of the work itself. R. v. Thumlert (1959), 28 W.W.R. 481 (Alta. S.C.A.D.); and Chamney v. The Queen, [1975] 2 S.C.R. 151, deal with federal regulation of the type, quantity and manner of receipt of grain into elevators which have been declared to be works for the general advantage of Canada. As stated by Martland J. in the latter case [at page 159], the result of the declaration was

that Parliament could control the quantities of grain which could be received into an elevator ....

There is, however, no authority for holding that federal jurisdiction extends generally to all the operations of persons using or owning the work and particularly to their labour relations.

I return again to the governing principle. This is how it was stated by Beetz J. in Construction Montcalm, supra [at pages 768-769]:

The issue must be resolved in the light of established princi ples the first of which is that Parliament has no authority over labour relations as such nor over the terms of a contract of

20 Neil Finkelstein. Laskin's Canadian Constitutional Law, vol. 1; 5th edition, Toronto: Carswell, 1986, at p. 629; Peter W. Hogg, Constitutional Law of Canada, 2nd edition, Toronto: Carswell, 1985, at p. 492.

employment; exclusive provincial competence is the rule: Toronto Electric Commissioners v. Snider [[1925] A.C. 396]. By way of exception however, Parliament may assert exclusive jurisdiction over these matters if it is shown that such jurisdic tion is an integral part of its primary competence over some other single federal subject: In re the validity of the Industr:.1 Relations and Disputes Investigation Act [[1955] S.C.R. 529] (the Stevedoring case). It follows that primary federal compe tence over a given subject can prevent the application of provincial law relating to labour relations and the conditions of employment but only if it is demonstrated that federal author ity over these matters is an integral element of such federal competence; thus, the regulation of wages to be paid by an undertaking, service or business, and the regulation of its labour relations, being related to an integral part of the opera tion of the undertaking, service or business, are removed from provincial jurisdiction and immune from the effect of provincial law if the undertaking, service or business is a federal one ....

The undertaking and business of Central West ern are provincial and local in character. Its track- age and right-of-way are subject to federal juris diction by virtue of a declaration under paragraph 92(10)(c). Federal authority extends to the use which may be made of the track but regulation of the labour relations of the user is not an integral element of that authority. Effective control of the work does not require control of the undertaking. Accordingly, the Canada Labour Relations Board had no jurisdiction to make the decision under review.

I would allow the section 28 application and set aside the impugned decision of the Canada Labour Relations Board.

* * *

The following are the reasons for judgment rendered in English by

LACOMBE J.: I have had the advantage of read ing in draft form the reasons for judgment of Mr. Justice Marceau and Mr. Justice Hugessen. I concur in the final result reached by Marceau J. that this section 28 application be dismissed; with respect however, I disagree with him that Central Western comes under the jurisdiction of the Canada Labour Relations Board because it is still an integral part of an interprovincial railway. In

addition to Hugessen J.'s cogent reasons that it is not so, I would make the following observations.

Only counsel for the respondent, the Brother hood of Locomotive Engineers made the argument that this line of railway is subject to federal juris diction under paragraph 92(10)(a) of the Consti tution Act, 1867, independently on its own and regardless of its relatedness to one or more of the core federal undertakings identified by the Board. To support this proposition, great reliance was placed on the cases of Luscar Collieries v. McDonald, [1927] A.C. 925 (P.C.); and Kootenay & Elk Railway Co. v. Canadian Pacific Railway Co., [1974] S.C.R. 955.

In its decision, the Board alluded to this argu ment and, correctly in my view, rejected it. Case- book, volume 16, page 2509:

Here, C.W.R.C.'s operations clearly do not extend beyond the limits of the Province of Alberta, nor do they directly connect Alberta with any of the other provinces. In this regard, C.W.R.C. does not meet the tests for federal jurisdiction.

Before the sale to Central Western, the Stettler Subdivision formed part of the CNR railway system connecting the province of Alberta with other provinces, and in addition, had been declared by the Parliament of Canada to be for the general advantage of Canada, pursuant to paragraph 92(10)(c) of the Constitution Act, 1867. It was admittedly a federal work, business or undertaking within the meaning of sections 2 and 108 of the Canada Labour Code. The issue is therefore whether the sale of the line to and its operation by a provincially constituted company changed the constitutional character of this railway.

The transaction which occurred in November 1986 effected drastic changes in the control, oper ations and character of this line. The railway is wholly situated within the province of Alberta, extending for a distance of approximately 105 miles from Ferlow Junction in the south to Dino saur Junction in the south-central area of the

province. Although the same commodity, export grain is carried over its tracks, its operations as a business are now confined within the boundaries of the province, that of servicing nine grain elevators located along its line, and operated by four grain companies. Empty grain cars are delivered by CNR trains at Ferlow Junction to Central West ern, which then spots them at the various grain elevators and, once filled by the grain companies, returns them to Ferlow Junction, where they are removed and carried to Vancouver by CNR trains.

After the sale, the Stettler line has been physi cally disconnected and actually severed from CNR tracks by a four-inch gap at both ends of the line, so that Central Western's trains do not cross over and do not travel on CNR tracks. Likewise, CNR trains do not run on Central Western trackage. At Ferlow Junction as well as at the other end, there is a locked open derail device, under CNR control which, when operated, permits access to Central Western tracks by CNR locomotives only for the purpose of delivering empty grain cars to and of picking up loaded grain cars from Central West ern. Central Western owns its locomotive equip ment which cannot be moved off its tracks. Since grain cars are owned by governmental authorities and not by the CNR, its trains do not move CNR property over its line nor do CNR trains carry any grain over its tracks.

As a work or as an undertaking, the Stettler Subdivision is no longer operated as a unit with the rest of the CNR lines. Physically and operational ly, it is not part of the CNR interprovincial rail way system. The fact that it was so before the sale is immaterial for constitutional adjudication pur poses. It is now owned, managed and operated exclusively by a provincially incorporated company which is totally separate from the CNR. Literally therefore, it is not a work or undertaking "con- necting the Province with any other or others of the Provinces, or extending beyond the limits of the Province" within the meaning of paragraph 92(10)(a) of the Constitution Act, 1867; it does neither of those things, that of connecting with

other provinces or extending beyond the limits of the province.

In Luscar Collieries v. McDonald, [1927] A.C. 925 (P.C.), a local colliery company had built a short line of railway to carry the coal from its mine to another line which branched from the CNR line extending beyond the province of Alber- ta. By agreement, the Luscar line and the other branch line were operated by the Canadian Na tional Railways and traffic would pass without interruption from these lines to such parts outside the province of Alberta which were served by the Canadian National system. The Privy Council, affirming the Supreme Court of Canada, held that the Luscar line was part of a system of railways operated together and connecting the province of Alberta with other provinces. Lord Warrington of Clyffe wrote, at pages 932-933:

In the present case, having regard to the way in which the railway is operated, their Lordships are of opinion that it is in fact a railway connecting the Province of Alberta with others of the Provinces, and therefore falls within s. 92, head 10(a), of the Act of 1867. There is a continuous connection by railway between the point of the Luscar Branch farthest from its junction with the Mountain Park Branch and parts of Canada outside the Province of Alberta.

It would appear that the fact that the local line was, by agreement, operated by the same railway company that owned and operated the rest of the system connecting the province of Alberta with other provinces was a material consideration for the decision. Lord Warrington observed, at page 933:

If under the agreements hereinbefore mentioned the Canadian National Railway Company should cease to operate the Luscar Branch, the question whether under such altered circumstances the railway ceases to be within s. 92, head 10(a), may have to be determined, but that question does not now arise.

In British Columbia Electric Ry. Co. Ltd. et al. v. Canadian National Ry. Co. et al., [ 1932] S.C.R. 161, Smith J., writing for the majority, referred to the Luscar case, and said, at pages 169-170:

The decision is expressly put upon the way in which the railway is operated by the Canadian National Railway Com pany under the agreements, and it is intimated that if that

company should cease to operate the appellant's branch, the question whether, under such altered circumstances, that branch ceases to be within s. 92, head 10(a), might have to be determined. The question thus left undetermined is the very question that arises in the present case, because the Park line is not operated by the Canadian National Railway Company, nor by the appellant, the British Columbia Electric Railway Com pany, as the operator of the Vancouver & Lulu Island Railway, on behalf of the Canadian Pacific Railway.

The mere fact that the Central Park line makes physical connection with two lines of railway under Dominion jurisdic tion would not seem to be of itself sufficient to bring the Central Park line, or the portion of it connecting the two federal lines, within Dominion jurisdiction.

The Montreal Street Railway case referred to above seems to be authority against that view.

In that case, the Supreme Court of Canada held that the Board of Railway Commissioners, had no jurisdiction over a one-mile line which formed a direct connecting link between two lines of rail ways under federal jurisdiction, one an interpro- vincial railway, and the other, an intraprovincial railway which had been declared to be for the general advantage of Canada. This short stretch of railways was held to be within provincial jurisdic tion although it was operated by the same provin- cially incorporated company that operated the intraprovincial line which had been the subject of the declaration by Parliament. The Court rejected the argument that the line was part of a contin uous system of railways extending beyond the limits of the province.

The respondent Union attempted to make much of the case of Kootenay & Elk Railway Co. v. Canadian Pacific Railway Co., [1974] S.C.R. 955 to support its claim that the Stettler Subdivision, even after its sale to C.W.R.C., was a work or was still an integral part of a railway connecting the province of Alberta with the rest of Canada. How ever, in view of the number of conflicting and rather confusing issues raised in that case, one should not read into it more than what was actual ly decided. One of the issues dealt with and clearly determined by the Court concerned the powers of a province to incorporate a company for the pur pose of constructing a railway wholly situated within the province, although at the time of incor poration, it was envisaged that it could eventually engage in extraprovincial activities. The Supreme

Court by a majority held, that a province has such powers.

In addition, that case is clearly distinguishable on the facts from the case at bar. The total project in that case called for the construction of two lines of railways on each side of the Canada-U.S. border for the purpose of carrying coal mined in British Columbia over the Canadian and Ameri- can lines in the United States and thence back to a point in British Columbia for shipment to Japan. The Canadian company was not to have any roll ing stock or equipment which would be supplied by the U.S. railway and which the latter's crews would bring into Canada and turn over to the Canadian company's crews. The latter would take the trains down to the coal mines for loading and return them to a point on the Canadian side of the border where they would be taken over by the U.S. railway's crews. The two lines were to be built each within one-quarter of an inch from the border on each side, but the one-half inch gap thus creat ed in the trackage would not hinder the free passage of trains over the respective tracks. There would be complete physical and operational inte gration of the two lines.

It should be noted that the two railway compa nies had applied to the Canadian Transport Com mission inter alia for an order granting leave to join the two proposed railway lines and for leave to the U.S. Railway to operate its trains on the Canadian line for the purpose of providing a free interchange of trains. The Commission had ruled that it would have granted the applications if in its view a provision of the Railway Act had not prohibited the intended interchange of traffic be tween the two lines, which ruling was overturned by the Supreme Court.

It was therefore subsumed in the background of that case that since the two lines were to be joined together, the Canadian line, if and when construct-

ed, would be in fact and would be operated in fact as a railway extending beyond the limits of the province.

However, the Kootenay case has not repudiated the authority of the decisions rendered in the Montreal Street Railway case and the British Columbia Electric Ry. case, supra. The point was made crystal clear by Mr. Justice Martland. He relied on them to affirm provincial jurisdiction to incorporate a railway company in such peculiar circumstances. Writing for Abbott and Ritchie JJ., he said at page 979:

The first point, which is clear, is that the Kootenay railway would not connect the Province of British Columbia with any other province, nor would it extend beyond the limits of the province. In Montreal Street Railway Company v. The City of Montreal, in the reasons for judgment delivered by Duff J., as he then was, in this Court [(1910), 43 S.C.R., 197 at p. 227] it was said, after referring to s. 92(10) and s. 91(29) of the B.N.A. Act:

The exclusive authority to legislate in respect of a railway wholly within a province is by virtue of these enactments vested in the provincial legislature, unless that work be declared to be for the general advantage of Canada; in that case, exclusive legislative authority over it is vested in the Dominion.

He then reviewed the Luscar Collieries case, supra, more or less to distinguish it, pointing out that the ground of decision was that the local line was operated by the CNR and that because it was so operated it had become a part of an interprovin- cial railway system. He quoted extensively and with approval from the reasons for judgment of Smith J. in the British Columbia Electric Ry. case, notably the passage, cited hereinabove, where Smith J. held that physical connection of a short line of railway, operated by a provincially incorpo rated company, with two federal lines was insuffi cient of itself to bring it within federal jurisdiction. Immediately thereafter, Martland J. concluded his reasons on the point by saying at page 982:

In summary, my opinion is that a provincial legislature can authorize the construction of a railway line wholly situate within its provincial boundaries. The fact that such a railway may subsequently, by reason of its interconnection with another railway and its operation, become subject to federal regulation does not affect the power of the provincial legislature to create it.

That case did not decide that the Kootenay line was an extraprovincial undertaking. Martland J. earlier in his reasons, said at page 979:

The respondent contends, however, that, while Kootenay's works do not extend beyond the province, its undertaking was not local in character. But in determining the legislative power of the British Columbia Legislature to incorporate Kootenay we are concerned with the nature of the undertaking which it authorized. That undertaking is one which is to be carried on entirely within the province.

The Kootenay case is a rather unusual case and it is for that reason too uncertain a precedent from which to draw any firm conclusion, which would be applicable in the present case. On the authority of the British Columbia Electric Railway decision, which can hardly be distinguished from the facts obtaining in this case, one is forced to conclude that Central Western's railway is a local work and undertaking, as it is no longer an integral part of an interprovincial railway.

One is also driven to this conclusion if one denies, as I do, that the CNR qualifies as a proper core federal undertaking in order to bring Central Western's labour relations into federal jurisdiction. Under the principles enunciated by the Supreme Court of Canada in the Northern Telecom decisions 21 in order to trigger federal jurisdiction, the subsidiary operation must be physically and operationally integrated to the core federal under taking. The Stettler Subdivision ceased to be a part of the CNR railway system when it was purchased by Central Western and the line was physically disjoined from the CNR tracks after the sale. If there is no physical and operational con nection between Central Western and the CNR, which could bring their relationship within the rules of the Northern Telecom decisions, absent such connection, Central Western cannot be said to be still an integral part of an interprovincial railway under paragraph 92(10)(a) of the Consti tution Act, 1867. It is neither a subsidiary opera tion to nor a territorial extension of the CNR activities. It is an integral part of neither a core

21 Northern Telecom Ltd. v. Communications Workers of Canada, [1980] 1 S.C.R. 115 and Northern Telecom Canada Ltd et al. v. Communication Workers of Canada et al., [1983] 1 S.C.R. 733.

federal undertaking nor of an interprovincial railway.

I share the views expressed by my colleagues that none of the three core federal undertakings identified by the Board, can form a proper basis for upholding the board's jurisdiction in the present case.

I agree with them that Central Western falls within federal jurisdiction because, as a work, it is still subject to the declaration made under para graph 92(10)(c) of the Constitution Act, 1867. As the Stettler Subdivision, it has been declared by Parliament on more than one occasion to be for the general advantage of Canada. The change in its ownership did not alter the continuing effect of the declaration, since only Parliament, not the Governor in Council, can lift or repeal such decla ration by a proper subsequent enactment. Hamil- ton, Grimsby and Beamsville R. Co. v. Atty.-Gen. for Ontario (1916), 29 D.L.R. 521 (P.C.). I am in respectful disagreement with Hugessen J. that Central Western's labour relations are within pro vincial competence.

The Stettler Subdivision remains a federal rail way line despite its acquisition by Central West ern. There is a railway undertaking which is now being carried on over this federal work by Central Western and that fact makes the whole of the undertaking, including its labour relations, to fall within federal competence.

It will remain so as long as Central Western operates its business on a line which continues to be affected by the statutory declaration. The Stettler Subdivision is in all respects as complete a federal work as are all the other lines of our national railway companies which are federal, the statutory declarations notwithstanding, because they extend beyond a particular province or con nect one province with other provinces. It stands on the same footing and is governed by the same constitutional principles.

In this connection, it is worth recalling the words of Lord Atkinson in Montreal City v. Mon-

treal Street Railway Company, [1912] A.C. 333 (P.C.), at page 339:

Railways so declared were in this case called "federal" railways to distinguish them from railways situate wholly within a province, and under the exclusive control of the provincial Legislature styled provincial railways. It is admitted that by this declaration the railway to which it refers was withdrawn from the jurisdiction of the provincial Legislature, that it passed under the exclusive jurisdiction and control of the Parliament of Canada, and, small and provincial though it was, stood to the latter in precisely the same relation, as far as the enactments upon the true construction of which this case turns, as do those great trunk lines, also federal railways, which traverse the Dominion from sea to sea, and were originally constructed and are now worked in exercise of the powers conferred by the statutes of the Parliament of the Dominion of Canada.

In The Queen in The Right of The Province of Ontario v. Board of Transport Commissioners, [1968] S.C.R. 118, the Supreme Court of Canada held that a commuter train service owned and operated by the province of Ontario came within federal jurisdiction. The commuter service was using its own rolling stock manned by train crews from the CNR under an agency contract but was utilizing the CNR tracks to run its trains. This last-mentioned factor was the prime consideration for the Court's conclusions that the then Board of Transport Commissioners had jurisdiction to set the tolls charged to the service users, as appears from the following passage of the Court's joint opinion, at page 127:

In the present case, the constitutional jurisdiction depends on the character of the railway line not on the character of a particular service provided on that railway line. The fact that for some purposes the Commuter Service should be considered as a distinct service does not make it a distinct line of railway. From a physical point of view the Commuter Service trains are part of the overall operations of the line over which they run. It is clearly established that the Parliament of Canada has juris diction over everything that physically forms part of a railway subject to its jurisdiction.

Central Western's employees are engaged in the day-to-day operations of a railway undertaking carrying on its business as a going concern over a federal work. They will not be employed in the construction, maintenance or repair of a federal work as was the case in Construction Montcalm Inc. v. Minimum Wage Commission, [1979] 1

S.C.R 754. In Northern Telecom Canada Ltd. et al. v. Communication Workers of Canada et al., [1983] 1 S.C.R. 733, Dickson J. (as he then was) makes the point at page 773:

In Montcalm, once the airport was completed, the construction workers would have nothing more to do with the federal undertaking.

In the case at bar, the employees' involvement is of an ongoing character and lies at the heart of the employer's essential activities of operating a rail way over a federal work. This was not so in the case of: Canada Labour Code (Re), [ 1987] 2 F.C. 30 (C.A.), where construction workers of an independent contractor were employed in the con struction of steel and concrete bridges on CNR's railway lines in British Columbia. They had noth ing to do with the actual operation of the lines. In the concluding paragraph of his reasons, Mac- Guigan J. pointed out, at pages 51-52:

As the Board itself put it, "The reconstructed bridge is presum ably expected to last a long time but the actual work does not." The work here, whether thought of as construction or as maintenance, is discrete in nature and temporary in duration. Unlike that of the Northern Telecom installers, the work here has no aspect of continuity or permanence. The work is limited and terminal.

In the present state of the law, there cannot be such a work-undertaking dichotomy, whereby in the case of a railway company conducting its local operations on a federal line, the labour relations of the undertaking would be subject to provincial jurisdiction, whereas all other aspects of the utili zation of the line, qua federal work such as signals and safety would be regulated by federal author ity. The regulation of the conditions of employ ment of Central Western's employees forms an integral part of the primary federal competence over the matter coming within the class of subject mentioned in paragraph 92(10)(c) of the Consti tution Act, 1867 and is directly related to the day-to-day utilization of a federal work. It must be emphasized that the Parliament of Canada, under subsection 91(29), has exclusive legislative author ity over all matters coming within such classes of

subjects as are expressly excepted in subsection 92(10) of the Constitution Act, 1867.

Unless and until the declaration by Parliament ceases to have effect with respect to the Stettler Subdivision, both the work and the undertaking of Central Western are subject to federal jurisdiction. It would be odd that, for example, the Canadian Transport Commission would have jurisdiction over Central Western's trackage, on which it oper ates its railway undertaking, whereas the Canada Labour Relations Board would be without jurisdic tion over its employees by whom it carries its business on and about the same declared federal work. By way of exception to the general rule that labour relations are within provincial competence, federal competence over Central Western's labour relations is an essential element of Parliament's exclusive authority to make laws with respect to a work it has declared to be for the general advan tage of Canada.

For this reason, but for this reason alone, I would dismiss this section 28 application.

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