Canada v PHS Community Services Society: Interjurisdictional Immunity – Remaining Uncertainties and the Resulting Implications
This post is one of two winning papers submitted by JD students at Osgoode Hall Law School, York University as a written assignment for Prof. Richard Haigh’s State and Citizen course.
In its 2007 ruling, the Supreme Court of Canada (“SCC”) addressed the controversies regarding interjurisdictional immunity in Canadian Western Bank v The Queen in Right of Alberta,  2 SCR 3 [CWB], by narrowing the doctrine to a twofold test. After identifying a “core” established by precedent, the Court then decided whether an impugned provision impaired either the core competency or an undertaking of that core competency (at para 48). Given the judicial discrepancies that arose over this second condition (see Quebec (Attorney General) v Lacombe,  2 SCR 453 [Lacombe], Quebec (Attorney General) v Canadian Owners and Pilots Association,  2 SCR 536), the recent case of Canada (Attorney General) v PHS Community Services Society,  3 SCR 134 [Insite], presented an opportunity for clarification. The Court unanimously ruled that interjurisdictional immunity was inapplicable to provincial healthcare because, among other considerations, these undertakings were too broad for “the restrained application of the doctrine called for by the jurisprudence” (para 68). This essay will explore the aspects of the twofold test left unanswered by the Court and argue that these have implications for the doctrine and federalism broadly.
As the case of Lacombe demonstrates, it is no trivial concern that the second part of the test leaves questions unanswered. Writing for the majority, Chief Justice McLachlin appeared to favour the application of impairment to the core competency approach. According to the majority, a possible prohibition on aerodromes would clearly impair the core of the federal power over aeronautics (para 66). Dissenting, Justice Deschamps preferred to apply impairment to the core competency’s undertaking. She states, the “test is that of the impairment of activities, not that of merely affecting the core of the protected power,” (para 114) since the latter created confusion between the issue of validity and applicability (para 115). Despite the divergence of opinion, both views are in keeping with the doctrine outlined in CWB. Additional jurisprudence is therefore required to provide the courts with the necessary tools to determine under which circumstances either approach should be applied.
In the SCC’s application of interjurisdictional immunity in Insite, the twofold approach was neither addressed nor clarified by the Court. In her ruling, Chief Justice McLachlin dismissed interjurisdictional immunity as an established core of provincial healthcare as it lacks precedent, is too “broad and extensive,” and is not exclusive (paras 67-68). Introducing the doctrine here would be “neither necessary nor helpful” (para 70). Regrettably, her analysis and discussion of interjurisdictional immunity’s background and drawbacks make no reference to the twofold method outlined in CWB despite the discussion in Lacombe. Failure to articulate the twofold method raises the question of whether the Court recognizes the significance of this debate or whether the majority in Lacombe is the approach to follow. Although the Court did not wish to “disturb settled competencies and introduce uncertainties” (para 70) it would have been helpful if it had provided clarification.
Following the Insite decision, there are important implications for both interjurisdictional immunity and federalism. The broad interpretation of the doctrine is “antithetical to co-operation between the levels of government” and the ideals of cooperative federalism as outlined by Justices Binnie and Lebel in CWB (at para 116). Likewise, this approach overemphasizes the notion of “watertight compartments” while ignoring the reality that most social problems are interconnected and require creative solutions (see Bruce Ryder, “The Demise and Rise of the Classical Paradigm in Canadian Federalism: Promoting Autonomy for the Provinces and First Nations”). On the other hand, the narrower approach of focusing on the activities of the core competency risks the creation of numerous smaller exceptions that frustrate uniformity. This is consistent with allowing overlap in modern cooperative federalism. Applying one or the other in isolation has, as Ryder says, broad centralizing or narrow decentralizing impacts on federalism. A balance of both approaches applied correctly and with reciprocity has the potential to maximize the legislative powers for federal and provincial governments alike. Unfortunately, for our purposes, the Court does not address which method should be adopted. More importantly, no attention is given to find a balance between the two or identify circumstances where one approach is favoured over the other. This issue has yet to be resolved.
Chief Justice McLachlin’s application of interjurisdictional immunity with respect to Insite did not address the doctrine’s remaining uncertainties. A balance must be achieved between the broad core competency approach that creates a more dualistic version of federalism and the narrow undertaking approach which fosters a more cooperative form (CWB, para 116). While some clarity to the doctrine has been achieved in recent years, the courts still need to address key remaining questions: do we apply impairment to the core competency or to the narrow undertaking; or are there circumstances when we should favour one approach over the other?