Judgments in Canadian Western Bank and Lafarge Canada

The SCC has released two important decisions dealing with federalism and the division of powers: they discuss the scope of the interjurisdictional immunity doctrine and the use of the federal paramountcy doctrine.

In Canadian Western Bank, et. al v. Her Majesty The Queen in Right of Alberta, the appellant banks challenged changes made to the Alberta Insurance Act that rendered federal banks that were selling insurance subject to provincial regulation. The banks argued that they should be immune from such legislation because of the interjurisdictional immunity doctrine, or alternatively, that the changes conflict with the Bank Act, and federal paramountcy should cause the Alberta legislation to be inoperative. These arguments were not persuasive at the trial and appellate levels, and proved not to be persuasive to the SCC either. From the headnote,

The Insurance Act and its associated regulations apply to the banks’ promotion of insurance. The fact that Parliament allows a bank to enter into a provincially regulated line of business such as insurance cannot, by federal statute, unilaterally broaden the scope of an exclusive federal legislative power granted by the Constitution Act, 1867. When promoting insurance, the banks are participating in the business of insurance and only secondarily furthering the security of their loan portfolios. The banks’ claim to interjurisdictional immunity must therefore be rejected, and they have to comply with both federal and provincial laws because the paramountcy doctrine is not engaged in this case.

For reference, Corey Wall, in an earlier post, voiced some candid comments about this case.

In the companion case, B.C. (AG) v. Lafarge Canada Inc. and Vancouver Port Authority, the question was whether the Vancouver Port Authority (“VPA”) had the authority under the federal Canada Marine Act to approve the building of a shipping facility on VPA land without needing the approval of city zoning by-laws. The VPA argued that their property fell under s.91(1A) of the Constitution Act, 1867 or that the management of those lands was vital to the “Navigation and Shipping” power under s.91(10); and because of this, was therefore deserving of protection under the interjurisdictional immunity doctrine. In the alternative, they argued that conflicts in legislation should render the municipal by-laws inapplicable by way of federal paramountcy. The SCC agreed with this alternative argument. From the headnote,

This case should be decided on the basis of federal paramountcy, not interjurisdictional immunity. As explained in Canadian Western Bank v. Alberta, released concurrently the doctrine of interjurisdictional immunity should generally not be applied where the legislative subject matter presents a double aspect and both federal and provincial authorities have a compelling interest. Were there to be no valid federal land use planning controls applicable to the site, federalism does not require a regulatory vacuum, which would be the consequence of interjurisdictional immunity. The matter at issue here — the development of waterfront lands — could potentially fall under either provincial or federal jurisdiction, depending on the ownership of the lands and on the use to which it is proposed that they be put. Waterfront lands do not cease to be “within the province” by reason of their potential use for federally regulated activities, but the federal power will be paramount to the provincial power where valid federal and provincial laws are applicable to different aspects of the proposed use and come into operational conflict.

Keep it tuned here in the upcoming days for commentary on these decisions.

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