When Court Jurisdiction Meets Statutory Interpretation: Windsor (City) v Canadian Transit Co

When Driedger’s “modern principle” was first articulated in Rizzo v Rizzo Shoes Ltd (Re), [1998] 1 SCR 27 as the SCC’s preferred approach to statutory interpretation, the onerous task of interpretation was thought to finally be resolved. Yet it has always astonished me how frequently the words of a statute continue to give rise to such divergent judicial interpretations. In Windsor (City) v Canadian Transit Co, 2016 SCC 54 [Windsor], for example, we see how Canada’s highest court grapples with (and ultimately splits over) the application of a seemingly unambiguous provision concerning the Federal Court’s jurisdiction.

Facts

The case at hand involves a relatively simple set of facts. The Canadian Transit Company (“CTC”) owns and operates the Canadian half of the Ambassador Bridge, which connects Windsor, Ontario with Detroit, Michigan. The CTC is also a creature of statute; it was incorporated by an Act of Parliament in 1921 called An Act to incorporate The Canadian Transit Company, SC 1921, c 57 [CTC Act]. Per sections 8 (a) and (e) of the CTC Act, the CTC is empowered to “construct, maintain and operate a … general traffic bridge across the Detroit river . . . with all necessary approaches, terminal facilities, machinery and appurtenances” and to “purchase, lease or otherwise acquire and hold lands for the bridge … and construct and erect and maintain buildings and other structures required for the convenient working of traffic to, from and over the said bridge.”

Between 2004 and 2013, the CTC purchased 114 residential properties in Windsor for the purpose of expanding the bridge and its facilities. The problem arose when the City of Windsor (“the City”) issued more than 100 repair orders against said properties in accordance with the City’s By-laws. When the CTC failed to comply with the repair orders on the grounds that the Ambassador Bridge was a federal undertaking and municipal by-laws cannot constitutionally apply to it, the City and the CTC launched appeals to both the Ontario Superior Court of Justice and the Federal Court to settle the matter.

When the case eventually came before the Supreme Court, the issue in dispute was confined to a question of jurisdiction: does the Federal Court have jurisdiction to decide whether the CTC must comply with the City’s by-laws and repair orders?

A (Seemingly) Unambiguous Provision

Pursuant to its constitutional authority under section 101 of the Constitution Act, 1867, 30 & 31 Victoria, c 3 (UK) [Constitution Act], Parliament created the Federal Court in 1971. The Federal Court is governed by the Federal Courts Act, RSC 1985, c F-7 [FCA]. In arguing its claim before the SCC, the CTC relied specifically on section 23 of the FCA:

23 Except to the extent that jurisdiction has been otherwise specially assigned, the Federal Court has concurrent original jurisdiction, between subject and subject as well as otherwise, in all cases in which a claim for relief is made or a remedy is sought under an Act of Parliament or otherwise in relation to any matter coming within any of the following classes of subjects: (…)

(c) works and undertakings connecting a province with any other province or extending beyond the limits of a province [emphasis added].

At first blush, section 23 would seem to trigger the Federal Court’s jurisdiction to oversee federal undertakings like those of the CTC. The SCC nonetheless split on its interpretation of the provision, with one side confining the available relief to the express words of the provision, and the other side examining the provision in the light of the statute’s broader objectives.

A Tale of Two Interpretations

The Majority:

Writing for the majority, Justice Karakatsanis begins by looking at the “essential nature” of the CTC’s claim. She dismisses three of the four declarations put forward by the CTC, suggesting instead that the “essential nature” of the CTC’s claim is a claim for interjurisdictional immunity. Justice Karakatsanis then touches on the role and jurisdiction of the Federal Court broadly, noting that the court is solely a creature of statute, and therefore “the language of the [Federal Court Act] is completely determinative of the scope of the Court’s jurisdiction” (para 33). From the get go, we see how Justice Karakatsanis sets the boundaries for the interpretive exercise, focusing on the words that appear in the statute to conduct her analysis.

Having framed the CTC’s claim as one of interjurisdictional immunity, Justice Karakatsanis applies the three-pronged test set out in ITO-International Terminal Operators Ltd v Miida Electronics Inc, [1986] 1 SCR 752 [ITO], used to determine whether the Federal Court has jurisdiction over a claim. Under the ITO test, the Federal Court will be found to have jurisdiction where “(1) a statute grants jurisdiction to the court, (2) federal law nourishes the grant of jurisdiction and is essential to the disposition of the case, and (3) that federal law is constitutionally valid” (Windsor, para 19)

In her analysis, Justice Karakatsanis looks to section 23 of the FCA, particularly the words “under an Act of Parliament of Canada or otherwise,” to find that the first part of the ITO test is not met. Citing Quebec North Shore Paper Co v Canadian Pacific Ltd, [1977] 2 SCR 1054, she notes that section 23 only grants jurisdiction to the Federal Court when the claimant is seeking relief under federal law. As such, the CTC’s “cause of action, or the right to seek relief, must be created or recognized by a federal statute” (Windsor, para 41). By extension, the CTC cannot claim relief simply by appealing to constitutional law, since it is not the constitutional law itself that gives the CTC its cause of action, but the FCA.

Having found that the Federal Court lacks jurisdiction to hear the CTC’s application, Justice Karakatsanis concludes that the Federal Court is an inappropriate forum for dealing with the CTC’s claim and strikes the CTC’s notice of application.

Dissent:

Unlike the majority, the minority of the court adopts a far more contextual approach in assessing the question of jurisdiction. Before addressing the provision in question, Justices Moldaver and Brown begin by considering the historical objectives of the Federal Court. They conclude that the Federal Court’s jurisdiction under section 23 should be construed broadly, since the Court’s creation was in large part motivated by an intention to ensure that members of the public would have recourse to a court with national jurisdiction, and to enable litigants living in different parts of the country to have a common forum in which to enforce their legal rights.

On the specific issue of the Federal Court’s jurisdiction over the CTC’s claim, Justices Moldaver and Brown begin by dismissing the need to define the “essential nature” of the claim—as the majority did—before embarking on the three-step test under ITO. In doing so, they draw a distinction between whether a court has jurisdiction over a claim, and whether a court should exercise its jurisdiction over a claim. In their view, an “essentially” relevant claim may be helpful in providing an answer to the first question, but not the second.

As in the majority judgment, Justices Moldaver and Brown go through the three-stage ITO analysis to assess the Federal Court’s jurisdiction over the CTC’s claim. Where their paths diverge from the majority, however, is at the first stage of the test: whether there had been a statutory grant of jurisdiction by the Federal Court.

On this point, Justices Moldaver and Brown also consider the meaning of the words of section 23 of the FCA, “under an Act of Parliament or otherwise.” Following Bensol Customs Brokers Ltd v Air Canada, [1979l 2 FC 575 (CA), they conclude that a claim falls under an Act of Parliament or otherwise “when that statute is the law which, assuming the claim to be well founded, would be the source of the plaintiff’s right” (para 9). In effect, so long as the “relief sought is intimately related to rights and obligations conferred by an Act of Parliament,” it need not matter that the relief “flows from a different legal source” (Windsor, para 94).

Since the CTC’s claim is directly related to a “federal work and undertaking” arising from an Act of Parliament, subsection 23(c) confers a statutory grant of jurisdiction on the Federal Court. By extension, each of the four declarations made by the CTC are sufficiently tied to its rights and obligations conferred by the statute. Justices Moldaver and Brown then proceed to go through the rest of the ITO analysis, before concluding that the Federal Court has jurisdiction over the CTC’s claim, but may decline to exercise it in the interests of expediency.

Perhaps most important are Justices Moldaver and Brown’s remarks about the implications of adopting a narrow interpretation of section 23(c). They suggest that the majority’s interpretation of the provision is “unduly narrow and inconsistent” with Parliament’s intent to create a Federal Court (para 96). Since the purpose of having a national forum to adjudicate national issues would be frustrated, it would “inevitably require claimants to go to provincial superior courts to enforce some of their federally created rights and obligations” (para 97) and would lead to increased jurisdictional disputes.

Concluding Thoughts

More interesting than the substantive law at play in Windsor is the display of two very different interpretative approaches. In Justice Karakatsanis’ majority judgment, we see the Court primarily concerned with staying as faithful as possible to the words of the FCA. Recourse to the FCA’s broader objectives is taken only to showcase the Federal Court’s limited jurisdiction in contrast to that of the provincial superior courts. For Justices Moldaver and Brown, however, the historical objectives of the Federal Court bookend their analysis, and their insistence on construing the Federal Court’s jurisdiction broadly is ultimately crucial to their reading of the provision. Looking forward, I am curious to see if, and to what extent, these differing interpretive approaches can themselves be reconciled.

My sense is that the interpretation proffered by the minority is much more in keeping with Driedger’s modern principle. On one hand, it recognizes the broad historical development of the Federal Court on its own terms, rather than considering the Federal Court’s mandate only in relation to that of the superior courts. On the other hand, it addresses the quasi-constitutional jurisdiction afforded to the Federal Courts under section 101 of the Constitution Act. This approach is reflected in the words of Justice Bastarache in Canada (Human Rights Commission) v Canadian Liberty Net, [1998] 1 SCR 626:

As is clear from the face of the Federal Court Act, and confirmed by the additional role conferred on it in other federal Acts, in this case the Human Rights Act, Parliament intended to grant a general administrative jurisdiction over federal tribunals to the Federal Court. Within the sphere of control and exercise of powers over administrative decision-makers, the powers conferred on the Federal Court by statute should not be interpreted in a narrow fashion. This means that where an issue is clearly related to the control and exercise of powers of an administrative agency, which includes the interim measures to regulate disputes whose final disposition is left to an administrative decision-maker, the Federal Court can be considered to have a plenary jurisdiction (para 36).