(Un)conventional

No, constitutional conventions cannot stop free trade within Canada

I didn’t write about the “Free the Beer” decision, R. v. Comeau, 2016 NBPC 3, when it came out this spring. It took me a very long time to read, and others beat me to it ― notably Benjamin Oliphant, to whose excellent analysis over at Policy Options Perspectives there is not much to add. There is one specific point, however, which concerns a pet peeve of mine, and which I do not think others have addressed, which in my mind justifies my doing so here, however belatedly. The point in question is the government’s argument that a constitutional convention meant that section 121 of the Constitution Act, 1867 ought not to be invoked to strike down legislation erecting barriers to inter-provincial trade.

Justice LeBlanc rejected this argument, just as he rejected the rest of the Crown’s submissions on his way to concluding that New Brunswick’s rules prohibiting the importation of alcohol from other provinces are unconstitutional because contrary to section 121. But although there is much to like about his decision overall, I think there is a bit more to say about this particular point than he did.

The Crown claimed, on the basis of an expert report by a political scientist, that the ever-evolving Canadian federalism had developed in such a way that

governments, rather than the courts, have taken on the lion’s share of responsibility for the management of the federation. This is accomplished in part by the courts’ recognition of constitutional conventions and by a judicious deferral to governments to maintain the balance of powers. [153]

One of the conventions in question is, according to the Crown’s expert, the “disuse” [169] of section 121:

governments do not use section 121 to challenge the protectionist policies of other governments. As such perhaps a convention has formed whereby section 121 is effectively rendered inoperative. [171]

The expert, moreover, saw section 121 as a sort of spent transitional provision, arguing that it is rather a convention that prevents the imposition of customs duties at provincial borders.

Justice LeBlanc responded by pointing out, quite rightly, that

[o]nce the Supreme Court of Canada strictly interpreted section 121 [in Gold Seal Ltd. v. Alberta (Attorney-General), (1921), 62 S.C.R. 424, as applying only] to custom duties, there was in reality nowhere else for the section to go. It strictly prohibited custom duties and nothing else. Its disuse became merely a matter of practice or custom. It was not possible for the section to be interpreted in any way to come to the aid of any other governmental policy or strategy.

In other words, Supreme Court precedent limited the scope of section 121 ― though it certainly did not abolish it, so that it is fanciful to claim that a constitutional convention has been doing the work that this provision has always done ― and it is for that reason that it was no longer invoked. That is true, so far as it goes, and it is understandable that a judge would say no more in the course of an opinion that is already quite long enough. But, as I noted above, there is more to say here.

It is worth pointing out that the Crown’s reliance on constitutional conventions in the course of an argument is a pretty remarkable thing. On an orthodox view, constitutional conventions are not enforceable by courts. The Crown analogized section 121 to the provisions of the Constitution Act, 1867 that enable the Governor General (acting on the advice of the federal government, of course) to disallow provincial legislation, which are rendered inoperative by a constitutional convention. Yet the Supreme Court expressed the view, in Reference re The Power of the Governor General in Council to Disallow Provincial Legislation and the Power of Reservation of a Lieutenant-Governor of a Province, [1938] S.C.R. 71, that these provisions were valid an in force as a matter of law. Similarly, in the Patriation Reference the Supreme Court said that conventions were not legal rules. So any attempt to invoke conventions as a sword rather than a shield (arguing that a claim should not be entertained because it asks the court to enforce conventions) faces an uphill battle, and indeed seems pretty desperate. It is telling, I think, that the Crown chose to make such an argument in Comeau.

Now, my own opinion is that the orthodox view that there is a sharp distinction between conventions and law is unfounded. Fabien Gélinas and I have suggested that, at least, conventions should inform the interpretation of the provisions of the written constitution. In a paper called “Towards a Jurisprudence of Constitutional Conventions”, (2011) 11:1 OUCLJ 29, I went further and argued that courts could actually treat conventions the way they treat common law constitutional rules, subject to justiciability concerns. While it is far from obvious that courts would endorse either of these approaches, and not very clear that the Crown in Comeau made much of an argument to show that they ought to, let’s assume that the court would have been bound to take a relevant convention into account in one way or another. Of course the question is whether there is such a convention here. Justice LeBlanc’s reasons suggest that the answer is “no.” But they ― understandably ― do not go into any detail on this point. A closer look shows that the Crown’s argument is completely off-base.

All constitutional conventions limit or eliminate he discretion that political actors seem to enjoy pursuant to other constitutional rules. For example, the law of the constitution leaves the sovereign with the choice to assent or not to bills that have passed the House of Commons and the Senate, but convention eliminates this discretion. The sovereign must assent. Geography does not figure among the criteria which the Supreme Court Act provides for the appointment of Supreme Court judges, other than those from Québec, but convention reduces the government’s discretion as to the advice it gives the Governor General by supplying additional geographic requirements.

What about the alleged convention here? The Crown’s expert points out that governments have refrained from suing each other on the basis of section 121. But even if that forbearance could be said to have acquired the status of a conventional rule, this convention could apply to governments ― the political actors whose behaviour contributed to the alleged rule’s emergence ― and only to governments. Not to citizens. To repeat, conventions stipulate how political actors exercise discretion. They do not dictate the behaviour of citizens. So while a convention may in effect nullify constitutional provisions that only empowers a political actor, such as those dealing with the disallowance power, they cannot “render[] inoperative” provisions that confer rights on citizens.

The Crown’s argument assumes, without even attempting to demonstrate, that section 121 is a provision that only concerns governments. But the assumption is unwarranted, and indeed galling. Constitutional provisions limiting the power of governments, such as section 121, exist in order to preserve the liberty of the citizens. In Attorney General of Nova Scotia v. Attorney General of Canada, [1951] S.C.R. 31, Chief Justice Rinfret wrote that even if Parliament and the legislatures agree to modify the constitutional division of powers by resorting to delegation, they cannot do so, because

[t]he constitution of Canada does not belong either to Parliament, or to the Legislatures; it belongs to the country and it is there that the citizens of the country will find the protection of the rights to which they are entitled. (34)

As the Chief Justice pointed out,

[i]t is part of that protection that Parliament can legislate only on the subject matters referred to it by section 91 and that each Province can legislate exclusively on the subject matters referred to it by section 92. (34)

But another part of that protection, of course, is that when the constitution removes a legislative power from both Parliament and the provinces, neither can arrogate such a power to itself, even with the connivance of the other. This is true of the power of constitutional amendment, for instance, and of the violation of Charter rights. And it is equally true of section 121. Were a court to accept to Crown’s (un)conventional argument to the contrary, it would transform the Canadian constitution from protection of the citizens’ freedom into a plaything for governments intent on limiting that freedom.

 

A Frozen Concept

Here is a stray thought inspired by the discussion of interjurisdictional immunities in the Supreme Court’s decision in Rogers Communications Inc. v. Châteauguay (City), 2016 SCC 23, about which I wrote yesterday. One way in which the Supreme Court has, or so it is often claimed, dismissed originalist constitutional interpretation is by comparing it to a theory of “frozen concepts” which cannot evolve as the times require. In Reference re Same-Sex Marriage, 2004 SCC 79, [2004] 3 S.C.R. 698, the Court proclaimed that

[t]he “frozen concepts” reasoning runs contrary to one of the most fundamental principles of Canadian constitutional interpretation: that our Constitution is a living tree which, by way of progressive interpretation, accommodates and addresses the realities of modern life. [22]

Speaking extra-judicially, then-Justice Binnie went one step further and referred to “a theory of frozen rights with no realistic prospect of a thaw.”

However, as Benjamin Oliphant and I explain in a recent paper, equating originalism with a simple belief that the concepts used in a constitutional text are “frozen” reflects a misunderstanding if not a misrepresentation of contemporary originalism, at least, or especially, of contemporary originalism which accepts a distinction between constitutional interpretation and construction. Indeed, as we further argue, the Court itself occasionally resorts to originalist reasoning, some of which could arguably be described as reflecting a “frozen concepts” view of constitutional law.

Be that as it may, the doctrine of interjurisdictional immunities is probably the single best example of a “frozen concept” in Canadian constitutional law. In Canadian Western Bank v. Alberta, 2007 SCC 22, [2007] 2 S.C.R. 3, the majority opinion stated that

interjurisdictional immunity is of limited application and should in general be reserved for situations already covered by precedent. This means, in practice, that it will be largely reserved for those heads of power that deal with federal things, persons or undertakings, or where in the past its application has been considered absolutely indispensable. [77]

The majority in Rogers Communications quoted this passage with approval, and approach the issue of interjurisdictional immunity accordingly, asking whether there was precedent for treating the location of radiocommunications equipment as belonging to the “core” of the federal power over radiocommunications.

This is not, strictly speaking, originalism. Along with the whole machinery of “pith and substance,” “double aspect,”  and “paramountcy,” it is a creature of constitutional construction ― the judicial development of doctrines necessary to give effect to a constitutional text, which is often insufficient to resolve a dispute on its own. (Canadian Western Bank sets out this development in great detail.) Constitutional construction, as Randy Barnett for example has argued, is not itself originalist ― only interpretation can be.

Yet the idea that interjurisdictional immunity is alive and well ― but only in those areas where there is precedent for its application is nothing if not the “freezing” of a constitutional concept ― albeit one developed by judges rather than provided by the constitutional text. For close to a century, the doctrine developed in fits and starts ― and then, in 2007, Justice Lebel and, of all people, Justice Binnie concluded that that was it, and that the time had come to freeze it in its then-current state. This decision is rather puzzling. For one thing, it seems to sit uneasily with the Supreme Court’s oft-repeated commitment to “living-treeism” ― reiterated in Canadian Western Bank, where the majority opinion insists that “the interpretation of [legislative] powers and of how they interrelate must evolve and must be tailored to the changing political and cultural realities of Canadian society.” [23] And for another, it is not clear that the normative arguments for treating a statutory or constitutional text as “frozen” until amended by the body that enacted it apply to a judicially-developed doctrine ― or at least that they can support a “freezing” of such a doctrine deeper than that effect by the usual principles of stare decisis.

Whether or not treating it in this way makes sense, the doctrine of interjurisdictional immunity is a “frozen concept” in Canadian constitutional law. It is one more reason to treat judicial protestations to the effect that such things are unknown this side of the border as too much. Slogans do not help us understand constitutional law, or anything else.

If You Build It

A good decision for federalism and for property rights from the Supreme Court

This morning, the Supreme Court has delivered its decision in Rogers Communications Inc. v. Châteauguay (City), 2016 SCC 23, holding that a municipality cannot prevent a telecommunications company from building an antenna at a site authorized by the federal government, since under the constitution that government has exclusive competence over radiocommunications. I believe this is the right decision from the standpoint of federalism doctrine and policy. It is also, if only coincidentally, a good decision from the standpoint of property rights.

Simplifying somewhat, the case arose out of Rogers’ attempt to build an antenna for its cellular network in Châteauguay, on a site that it had leased from a willing owner. Federal rules required it to obtain permission from the federal government and also to consult the municipality, while allowing the federal government to resolve any conflict with local authorities. Rogers did all this, and initially the municipality gave it the green light. However, after citizens concerned about the supposed effects of radio waves on their health and the environment petitioned the municipal authorities, they changed their mind and tried to get Rogers to agree to build its antenna on a different location. The owner of that site, however, was not willing to lease it out to Rogers, while the municipality tried to expropriate it, Rogers was unwilling to wait until expropriation proceedings would conclude, and decided to go ahead with its original project. The municipality responded by issuing, and subsequently renewing, a “notice of reserve” which signified its intention to expropriate the site, and prevented Rogers from building there.

Rogers argued that this was both unconstitutional and in bad faith and thus invalid under municipal law. In reasons by Justices Wagner and Côté, an eight-judge majority held that the notice was not a valid exercise of a provincial, and therefore a municipal, power. Justice Gascon, who concurred, was of the view that while the notice was a valid exercise of provincial power, it was inapplicable to Rogers by virtue of the doctrine of interjurisdictional immunity.

* * *

The municipality argued that its “ultimate purpose in establishing the reserve was to protect the health and well‑being of its residents living close to” Rogers’ chosen site for its antenna, “and to ensure the development of its territory” ― purposes that fall within the provincial and therefore municipal jurisdiction. The majority of the Supreme Court disagreed, however. The notice of reserve was clearly intended to forestall Rogers’ work on the antenna. It had no other purpose or effect than to interfere with its choice of location, which falls within the federal jurisdiction over radiocommunications. The majority added that

[e]ven if the adoption of a measure such as this addressed health concerns raised by certain residents, it would clearly constitute a usurpation of the federal power over radiocommunication. [46]

Thus, in “pith and substance,” the “matter” with which the notice of reserve dealt was radiocommunications, and the notice was ultra vires ― beyond the competence of the body that enacted it.

The majority acknowledged that the Supreme Court’s division of powers jurisprudence favoured flexibility and “co-operative federalism.” This principle, however,

can neither override nor modify the division of powers itself. It cannot be seen as imposing limits on the valid exercise of legislative authority … Nor can it support a finding that an otherwise unconstitutional law is valid. … [F]lexibility has its limits, and this approach cannot be used to distort a measure’s pith and substance at the risk of restricting significantly an exclusive power granted to Parliament. [39, 47]

The majority added that holding otherwise, or finding that the notice of reserve had a “double aspect” ― i.e. that it dealt with a provincial “matter” at the same time as a federal one ―

could encourage municipalities to systematically exercise the federal power to choose where to locate radiocommunication infrastructure while alleging local interests in support of their doing so. [47]

In his concurrence, a rather exasperated-sounding Justice Gascon disagrees, saying that he

find[s] it a bit much to suggest that a flexible approach to the pith and substance doctrine could encourage municipalities to hide behind local interests in order to exercise a federal power. [95]

He concludes that Châteauguay acted “not simply to control the siting of a radiocommunication system, but rather to respond to its residents’ concerns” [100] regarding health and the development of the municipality’s territory. In Justice Gascon’s view, the majority goes astray in not adopting a sufficiently flexible approach to the “pith and substance” analysis, and also in overemphasizing the practical effects of the notice of reserve at the expense of its purposes.

However, Justice Gascon agrees with the majority that even if the municipality had the constitutional authority to issue the notice of reserve, the notice would be inapplicable to Rogers by virtue of interjurisdictional immunity. The choice of locations for communications equipment has already been determined to fall within the “core” of the federal power, and the municipality’s attempt to prevent Rogers from building its equipment at a site approved by the federal government in the exercise of that power rose to the level “impairment” sufficient to trigger the application of the immunity doctrine.

* * *

As I mentioned at the outset, I believe the Court ― and specifically, the majority ― has it right. At the level of doctrine, I think that the majority is right to conclude that the reserve notice was ultra vires the municipality. As it noted, all the notice did was interfere with the choice of location of Rogers’ equipment. The fact that the motivation for this interference had to do with health and development concerns does not change the fact that the notice itself only had to do with radiocommunications.

Indeed, Justice Gascon’s approach ― finding that the notice of reserve was, in pith and substance, related to health and local development but could not apply to the only party to whom it was ever intended to apply strikes me as rather artificial. As the majority notes, the case is different from one in which, as in Quebec (Attorney General) v. Canadian Owners and Pilots Association, 2010 SCC 39, [2010] 2 S.C.R. 536, the law at issue is one “of general application that has numerous legal and practical effects,” [48] only a small subset of which are constitutionally suspect. It makes sense to resolve such a case by applying the doctrine of interjurisdictional immunity to prevent this small subset of effects from occurring while allowing the law as a whole to stand undisturbed. Justice Gascon invokes interjurisdictional immunity to deprive the notice of reserve of its effect and raison d’être. It seems more logical to say that the notice is simply void, because it is entirely about a federal, not a provincial, “matter.”

From the policy perspective, these details matter little. What is important is that the Supreme Court’s decision allows the federal government to exercise its constitutional powers without being impeded by nimbyists all over the country who would raise this or that local concern ― if not some scientifically discredited theory, as seems to have been the case here ― to prevent any national infrastructure being built. The constitution makes federal government responsible for telecommunications ― as well as for physical inter-provincial links, such as railways and, perhaps most importantly in the current political context, pipelines, for a good reason. These matters have to be treated at a national scale because of the holdout issues and collective action problems that would arise if the provinces ― and, a fortiori, municipalities ― could stand in the way or had to deal with them on their own.

Appeals to co-operative federalism are misguided in this context. After the Supreme Court handed down another decision limiting the power of that principle, the one in the gun-registry litigation, Quebec (Attorney General) v. Canada (Attorney General), 2015 SCC 14, [2015] 1 S.C.R. 693, I tentatively suggested that the principle the Supreme Court applied was that of competitive rather than co-operative federalism. Competitive federalism is usually understood as involving competition between members of the federation (i.e. provinces in Canada) to get individuals and businesses to move from to another. But the Court’s federalism jurisprudence fosters “vertical” competition between the federal government and the provinces, I wrote, “for the political benefits that result from enacting policies that citizens want to see enacted.” Such competition is fine so long as its costs can be internalized by the voters for whose benefit it exists. For instance, when Québec sets up its own gun registry to replace the one scrapped by the federal government, Québec taxpayers will pay for it. But when the preferences of one set of voters are satisfied at the expense of others, what takes place is not competition, but rent-seeking. Allowing municipalities to interfere with the development of infrastructure that benefits people well beyond their borders in order to allay the local voters’ concerns would encourage just that sort of behaviour. The Supreme Court was right to step in to prevent it.

* * *

I briefly turn now to the property rights perspective on this case. The Supreme Court has seldom been solicitous of property or economic rights (except, that is, the economic rights of unionized labour), and there is no reason to think that property rights concerned it here. However, it is worth pointing out that, even if unintentionally, the Court’s decision is a clear win for property rights and freedom of contract. Consider that Rogers had found a willing lessor for the land it needed to build its antenna. The owner of the alternative site proposed by the municipality, by contrast, did not want to do business with Rogers. So the municipality wanted to expropriate her, and deprive the owner of Rogers’ preferred site of a business opportunity. And when that plan failed, it decided to expropriate the owner of that site as well. This casual indifference to property rights and economic liberty of the municipality’s own citizens is disheartening, and even if the Supreme Court preserves these rights by a happy accident, its decision is worth celebrating for that reason.

Conflict and Frustration

Last Friday, the Supreme Court issued decisions in three cases dealing with the federal paramountcy doctrine, which holds that when both a federal and a provincial statutes are applicable to a situation, the federal one prevails, and the provincial one is rendered inoperative, to the extent ― if any ― of the conflict between them. In this post, I will comment on two of these decisions, Alberta (Attorney General) v. Moloney, 2015 SCC 51, and 407 ETR Concession Co. v. Canada (Superintendent of Bankruptcy), 2015 SCC 52, which deal largely with the specific issue of the kinds of conflict that can arise between a federal and a provincial statute, and how to distinguish between them.

The Court is split, with Justice Gascon writing for a seven-judge majority in both cases, and Justice Côté (with the agreement of the Chief Justice) concurring in judgment but disagreeing about the reasoning. Yet it seems to me that this conflict within the court is quite unnecessary, and only serves to illustrate the unsatisfactory character of the Supreme Court’s jurisprudence on the issue of paramountcy (as well as some other federalism issues not in play in these cases), about which I complained after its previous engagements with this topic in Marine Services International Ltd. v. Ryan Estate, 2013 SCC 44, [2013] 3 S.C.R. 53 and in Bank of Montreal v. Marcotte, 2014 SCC 55, [2014] 2 S.C.R. 725.

* * *

The issue in both Moloney and 407 Concession was whether provincial laws which prevented a person from renewing a driver’s license or registering an automobile unless he or she paid back certain debts ― one related to a traffic accident caused while driving uninsured in Moloney and one resulting from an accumulation of unpaid road tolls in 407 Concession ― could be applied to persons whose debts had been released through a bankruptcy. Bankruptcy law is a federal competence, and the federal Bankruptcy and Insolvency Act provides rules governing a bankrupt’s release from all “claims provable in bankruptcy,” which the debts in question were conceded to be. Provincial law, meanwhile, doesn’t force the bankrupt to satisfy these claims but, by making it impossible for him or her to keep driving on the province’s roads, creates a very strong incentive to do so.

All the judges agreed that this amounted to a conflict between federal and provincial law, which triggered the application of the doctrine of federal paramountcy, so that provincial law became inoperative. The provinces cannot refuse to register the vehicles of persons discharged from bankruptcy in order to induce them to pay the debts from which the bankruptcy was supposed to have released them. But, as I mention above, the judges did not agree about the reasons for this conclusion.

For the majority, there existed an “operational conflict” between the federal and the provincial laws at issue, meaning that “it is impossible to comply with both.” [Moloney, 18] The conflict must be “clear, direct or definite,” [22] but in asking whether a conflict exists the court need not limit itself “to the actual words or to the literal meaning of the words of the provisions at issue.” [23] The ordinary methods of statutory interpretation are to be used. In Moloney,

the test for operational conflict cannot be limited to asking whether the respondent can comply with both laws by renouncing the protection afforded to him or her under the federal law or the privilege he or she is otherwise entitled to under the provincial law. … [T]he laws at issue give inconsistent answers to the question whether there is an enforceable obligation: one law says yes and the other says no. [60]

For the majority, this is sufficient for a finding of conflict. Similarly, in 407 Concession, “[u]nder the federal law, the debt is not enforceable; under the provincial law, it is. The inconsistency is clear and definite. One law allows what the other precisely prohibits.” [25]

The concurrence disagreed. In its view, the majority’s

analysis contrasts with the clear standard that has been adopted for the purpose of determining whether an operational conflict exists in the context of the federal paramountcy test: impossibility of dual compliance as a result of an express conflict [and] conflates the two branches of the federal paramountcy test, or at a minimum blurs the difference between them and returns the jurisprudence to the state it was at before the second branch was recognized as a separate branch. [Moloney, 93]

So long as the discharged bankrupt does not drive, the province has no “leverage to compel payment of the debt” and “the literal requirement of the federal statute is, strictly speaking, met. It therefore follows that the two acts can operate side by side without conflict.” [97] The same was true in 407 Concession. Indeed, courts should favour findings of no operational conflict, including by interpreting ambiguous federal legislation narrowly so as to make room for provincial laws to operate alongside it.

In the concurrence’s view, these cases, and perhaps most others where the doctrine of paramountcy is invoked, ought to be analyzed under the heading of the frustration of the purpose of the federal statute. This makes it possible to carefully analyze the purpose of the federal law and to take into account the federal government’s view of whether this purpose is being frustrated by the operation of the provincial legislation, and generally to foster a co-operative approach to federalism that embraces the concurrent operation of federal and provincial laws in the same area.

Ultimately, the concurrence endorses the majority’s view that the frustration-of-federal-purpose test is met in these cases. Bankruptcy law aims at the “financial rehabilitation” of the bankrupt, allowing (and/or providing the incentive for) him or her to re-integrate economic life free from the burden of past debts. Giving the province the ability to demand payment of some debts goes against this purpose. If the bankrupt wants to drive, he or she must pay out; it is as though the debts at issue were not a thing of the past. And while a creditor might be able to “revive” a debt in exchange for fresh consideration, letting a bankrupt drive is not good consideration because the province has no authority to prevent a person from driving on account of his or her failure “to satisfy a … debt that was released in bankruptcy” [81] to begin with.

* * *

Given this ultimate agreement, the apparent conflict between the majority and the concurrence is a bit surprising. Justices Gascon and Côté trade mutual accusations of making one or the other “branch” of the paramountcy test “meaningless” [69; 128], but never actually explain why these accusations are serious ones. What would be lost if the two branches of the test were fused?

Like the doctrine of federal paramountcy itself, the two-branch test used to apply it was created by the Supreme Court itself. Unlike the doctrine, however, it is both a relatively recent creation, and one that can be dispensed with. It seems to me that the “operational conflict” branch of the test can easily be, not just “rendered meaningless,” but abandoned altogether.

To be sure, Justice Côté quotes the majority reasons in Quebec (Attorney General) v. Canadian Owners and Pilots Association, 2010 SCC 39, [2010] 2 S.C.R. 536, at par. 64, for the proposition that “[c]laims in paramountcy may arise from two different forms of conflict.” But that statement is itself only asserted, not explained. Justice Côté claims that

[w]hile it is true that [these two branches of the paramountcy test] overlap, it is not true that a finding of an operational conflict in the first branch will necessarily entail a finding of frustration of a federal purpose in the second branch. An overlap between the two forms of conflict does not mean the branches are necessarily redundant. [107]

Unfortunately, Justice Côté does not give any examples of situations where an operational conflict would not coincide with a frustration of the purpose of the federal law. She only states that “[t]he federal scheme may be drafted in a manner that does not match the record of Parliament’s intent, but that results in an express conflict with a provincial law,” [107] but the ― purely hypothetical ― possibility of such poor legislative drafting seems like a very weak reason for preserving a legal distinction that will, in practice, (almost?) never make any difference, and yet will generate disagreement and confusion.

It seems to me that the “operational conflict” branch of the paramountcy test should simply be discarded. Impossibility of dual compliance should be regarded as an instance ― perhaps the clearest, but not the only possible instance ― of a frustration of the federal purpose.  What Justice Côté says about the way to analyze frustration of purpose makes sense, at least so long as one accepts the general thrust of the Supreme Court’s federalism jurisprudence which favours what it terms co-operation (but which I believe is actually competition) resulting from the concurrent operation of federal and provincial legislation. But it’s not clear to me that one cannot approach frustration of purpose in the way described by Justice Côté unless one insists on a rigid separation and a narrow definition of the “operational conflict” branch of the paramountcy test.

* * *

In the meantime, the situation is a bit like the one that prevailed in administrative law before Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190. The Supreme Court had first created a “patent unreasonableness” standard of review, and then, considering that it was too narrow, added an additional one, called “reasonableness simpliciter” ― without discarding “patent unreasonableness.” As a result, courts wasted a great deal of time deciding which of the two applied. Similarly after articulating the “operational conflict” test for the application of the paramountcy doctrine, the Supreme Court concluded that it did not capture all the situations where the doctrine should apply and, instead of simply broadening the test, added another one on top of it. As a result, courts will waste time in inconsequential efforts to figure out which of the two should be applied, before arriving to the same result.

The unsatisfying dispute between the majority and the concurrence in Moloney and in 407 Concession is a reminder, if one was needed, that conflict and frustration tend to go together. The Supreme Court’s attempts to disentangle them serve no useful purpose.

Cooperative, or competitive?

The critics of the Supreme Court’s decision in the long-gun registry case, Quebec (Attorney General) v. Canada (Attorney General), 2015 SCC 14,  have lamented the majority’s failure to make good on what seemed like the promise of cooperative federalism in the Court’s recent jurisprudence. In La Presse + today, Jean Leclair argues that the judges in the majority “most certainly weaken the principle of cooperative federalism, which they had so extolled” (translation mine). Striking a more optimistic note over at I-CONnect, Paul Day hopes the dissent will “become the point of departure for Canadian courts and commentators interested in exploring ‘cooperative federalism’.” There certainly has been much talk about cooperative federalism in connection with this case, and more broadly in recent years. But what if the phrase were not an apt description for the Supreme Court’s actual concerns? I am, very tentatively, inclining to the idea that it would have been more accurate to speak not of cooperative, but of competitive federalism.

Now, the “competitive” part of competitive federalism usually refers to “horizontal” competition between the components in a federation (e.g. the States in the United States or the provinces in Canada). The idea is that these components will compete with each other by enacting different policies on the same subject. Individuals and businesses will “purchase” these different policies by moving from one jurisdiction to another one, whose policies they prefer and, similarly to what happens in the marketplace, this competition will show whose policy is the most attractive one, or allow a differentiation between the regulators allowing the preferences of persons with different tastes to be satisfied.

Applying this idea to the “vertical” context of competition between the federation and the components is not straightforward, because in the vertical context, the central legislature will normally hold a trumping power (e.g. through the Supremacy Clause under the U.S. Constitution or the paramountcy doctrine in Canadian constitutional law). The competition is not entirely fair, since one of the competitors can pretty much declare himself the winner. And that’s when the competition can take place at all. Because the two levels of legislatures have different legislative powers, there are many areas over which they cannot compete.

But, in the Canadian context at least, vertical competitive federalism is not impossible. Indeed, under the guise of encouraging “cooperative federalism,” the Supreme Court has actively promoted it. As prof. Daly notes, the Court

has employed cooperative federalism as an interpretive principle to reshape constitutional law: most notably, the doctrine of interjurisdictional immunity–premised on the existence of exclusive zones of federal and provincial authority in the areas of competence set out in the Constitution Act, 1867–has been reduced to virtually nothing.

While I do not think that “virtually nothing” is quite correct, because interjurisdictional immunity still applies, at least, in “situations already covered by precedent” (Canadian Western Bank v. Alberta, [2007] 2 S.C.R. 3, 2007 SCC 22, at par. 77), the Court’s unwillingness to expand its application is indeed the most significant consequence of what it describes as its embrace of the cooperative federalism principle. But it seems to me that the limitation of interjurisdictional immunity is conducive to competition rather than cooperation. So, too, are the Court’s insistence on interpreting the notion of conflict between federal and provincial law narrowly, so as to limit the scope of potential application of the paramountcy doctrine, and the application of the “double aspect” doctrine, which allows concurrent jurisdiction over “matters” deemed to be at once federal in one “aspect” and provincial in another. Together, these principles in the Supreme Court’s federalism jurisprudence counteract, in part, the two factors that make vertical competition in a federation difficult. Limiting the scope of interjurisdictional immunity expands the areas over which Parliament and the provincial legislatures have concurrent jurisdiction and which both can regulate, while limiting the application of the paramountcy doctrine results in fewer occasions on which Parliament’s regulation prevails simply by virtue of being Parliament’s.

Of course, the vertical competition for which the Court thus makes room isn’t quite the same as horizontal federal competition. The option of moving away from a set of policies one doesn’t like is off the table, because Parliament’s policies are applicable throughout the country. But voters still have the option of rewarding the government that enacts the policies they support, and punishing the one that doesn’t. The competition between the two levels of government is thus not for citizens and businesses who can move from one jurisdiction to the next, but for the political benefits that result from enacting policies that citizens want to see enacted.

This brings me back to the gun registry issue. Québec presented the registry as the product of federal-provincial cooperation; the dissenting judges at the Supreme Court, as well as their academic supporters such as profs. Leclair and Daly accepted that characterization. But isn’t it at least as plausible to regard the federal registry as the product of competition between Parliament and the legislatures for the political benefits of satisfying the citizenry’s preferences in the area of gun control? Parliament created the registry because it, or its masters in the executive, thought that this would have political benefits for them. Now, however, a differently constituted Parliament, catering to a different electoral coalition, thinks that it will benefit from enacting a different policy.

Seen from this perspective, the issue for the Supreme Court was not whether a partner in a cooperative venture had acted disloyally, but whether one competitor had to assist the other in implementing a policy it chose to discard. Imposing a requirement to do so would have restricted the freedom of the market for policies and might conceivably have deterred entrants, contrary to the Court’s apparent policy of encouraging vertical regulatory competition within the Canadian federation.

Now it is still arguable that competition in a federal context must be loyal, and that Parliament had failed to respect that requirement, or indeed that competition has no place in this context. Either way, you can endorse my re-interpretation of the case, as an analytical matter, and still believe that its outcome was a mistake. But I would suggest that the majority’s decision is at least more consistent with the Court’s previous cooperative competitive federalism jurisprudence than its critics allow, and that, conversely, the dissent’s position involves a greater departure from the previously accepted principles than defenders claim.

How to Be Good Neighbours

Sometimes, the soundness of a position only becomes apparent by comparison with the alternative. So it has been, for me, in the gun registry litigation, which has finally concluded this morning with the Supreme Court’s decision in Quebec (Attorney General) v. Canada (Attorney General), 2015 SCC 14. The majority finds that contrary to Québec’s claims, the federal government was entitled to destroy the long gun registration data it had accumulated while registering such guns was mandatory, regardless of provincial objections. The dissenters, for their part, would have held that the statutory provision requiring the destruction of the data is unconstitutional ― but that Québec is not constitutionally entitled to the data, whose fate must be settled by a political negotiation. The dissenters present their position as the more realistic one ― yet their proposed remedy is, in my view, so unpragmatic as to show that this position is unsound.

* * *

The majority, in terse reasons by Justices Cromwell and Karakatsanis, with whom the Chief Justice and Justices Rothstein and Moldaver agree, mostly relies on the principles of federalism ― understood, primarily, as a clear division of legislative powers ― and parliamentary sovereignty. The principle of co-operative federalism, which Québec invoked, can it the majority’s view serve

to provide flexibility in separation of powers doctrines, such as federal paramountcy and interjurisdictional immunity. It is used to facilitate interlocking federal and provincial legislative schemes and to avoid unnecessary constraints on provincial legislative action. [17]

But it neither amounts to a self-standing constraint on the exercise of legislative powers by either the federal Parliament or the provincial legislatures, nor “impose[s] a positive obligation to facilitate cooperation where the constitutional division of powers authorizes unilateral action.” [20] Furthermore, the province cannot invoke its reliance on or expectation of the continued existence of the gun registry. Parliament must remain free to abolish what it had previously created. The majority also concludes that provincial participation in the operation of the registry was limited and merely a part of the framework established by federal law.

The majority holds that the provision of the legislation abolishing the long gun registry which requires the destruction of the data was within Parliament’s legislative competence. As the creation of the registry was valid legislation in relation to criminal law, so must be its abolition, and so also must be provision settling the question of what is to happen to the now-unneeded data. The reasons that motivated Parliament to settle that question in the particular way it did rather than otherwise are irrelevant. Nor does a desire to make life more complicated, at a practical level, for the other level of government translate into a constitutionally cognizable harm:

[a]n intention on the part of one level of government to prevent another from realizing a policy objective it disagrees with does not, on its own, lead to the conclusion that there is an encroachment on the other level of government’s sphere of exclusive jurisdiction. [38]

Since Québec could not “validly enact legislation that deals with what will happen with the data of the repealed scheme,” [40] Parliament’s enactment of such legislation does not impede the exercise of any provincial powers.

* * *

In contrast to the majority’s, the dissenting reasons, jointly written by Justices Lebel, Wagner, and Gascon, with the agreement of Justice Abella, try to convey the impression of careful attention to the real-life background of the dispute. The dissent starts with a history of gun control in Canada, and includes repeated reference to the Polytechnique Massacre and the importance of gun control to Québec. It emphasizes the statements of various federal politicians (including the future prime minister Stephen Harper) and officials regarding the collaborative nature of the Canadian gun control regime. It also delves deeply into the mechanics of that regime’s operation, and details the ways in which provincial officials contribute information to and rely on its linchpin, the Canadian Firearms Information System database, highlighting the fact that, although legislation suggests that provincially- and federally-collected data ought to be distinct, they are, in reality, very much intertwined.

This leads the dissent to the conclusion that the long gun registry, as part of the broader gun control regime, is the fruit of a “partnership” between the federal government and Québec. This partnership “is consistent with the spirit of co‑operative federalism,” having

enabled the federal and provincial governments to work together, rather than in isolation, to achieve both federal (criminal law) and provincial (public safety and administration of justice) purposes. [149]

Upholding the principle of (co-operative federalism) thus requires “protect[ing]” such partnerships

both when they are implemented and when they are dismantled. It would hardly make sense to encourage co‑operation and find that schemes established in the context of a partnership are valid while at the same time refusing to take this particular context into account when those schemes are terminated. [152]

A legislature that wants to dismantle a partnership must “tak[e] into account the reasonably foreseeable consequences of the decision to do so for the other partner” [153] ― and so must the courts, when they consider the constitutionality of the resulting legislation.

The dissent’s final approach to the issue in the case still takes the form of a traditional division of powers analysis. It concludes that the “true purpose” of the provision requiring the destruction of the gun registry data without offering it to the provinces “is to ensure that the information on long guns can no longer be used for any provincial purposes.” [176] But because registration falls, fundamentally, under the provincial power over property and civil rights, this provision does too, and is thus, in “pith and substance,” not valid federal legislation in relation to criminal law. Nor can it be justified as ancillary to the broader, valid, exercise of the criminal law power resulting in the abolition of the registry. For one thing, it is not necessary, in order to abolish the federal registry, to refuse to hand over the data to the provinces; for another, in the context of the Canada-Québec “partnership,” the encroachment on the provincial powers is too serious to be justified as ancillary.

The dissent accordingly concludes that the provision at issue is unconstitutional, being beyond Parliament’s legislative powers. However, it also finds that Québec “has not established a legal basis for its claim to the data.” It is not the courts’ role to order the federal government to hand over the gun registry data. Rather, as the data are the “fruit” of a partnership, it is for the partners themselves to decide, as a political matter, how to dispose of them. The province, no more than the federal government, cannot make that decision unilaterally. Since they failed to make that decision at the moment of creating the partnership, they must do so now, by means of a negotiation.

* * *

As I mentioned at the outset, I believe that the majority has the better of the argument here. I find its argument that, since the province could not itself decide what is to happen to the data, the data’s destruction cannot be frustrating the exercise of a provincial legislative power compelling. By contrast, the dissent’s claim that Parliament is “encroaching” on provincial jurisdiction strikes me as unpersuasive. All that Parliament does is to make an eventual exercise of the provincial legislative power more costly (financially and, perhaps, though unlikely in this case, politically). The province is still free to act, so long as it is willing to pay the price. That might not be nice of Parliament but, as I will presently explain, I don’t think that Parliament is under a duty to be nice here.

Before doing so, I want to return to my point about the dissent’s proposed remedy. As I wrote after the oral argument, where Justice Wagner had floated his and his colleagues’ eventual proposed solution,

[d]eclaring a duty to negotiate might have worked (hypothetically of course) in the secession context, where the end point of a successful negotiation would be clear (i.e. a peaceful separation), although the details would need to be worked out. Here, the parties have an irreconcilable disagreement over what the end state would be (data handover or data destruction). What can they negotiate about?

It is striking that, at the conclusion of an opinion that presents itself as attuned to the political realities, a pragmatic rebuttal to a rather dogmatic majority judgment the dissenters propose a remedy that would utterly fail to solve the dispute before it and result in protracted, acrimonious, and ultimately futile negotiations. This is not pragmatism, but either naïveté or a rather cynical bet that, as the negotiations drag on and on, the current federal government will be replaced by one more favourable to Québec’s claims later this year. More importantly though, in my view, the dissent’s proposed remedy amounts to an acknowledgement that Québec’s claim was ultimately political, not legal. “Co-operative federalism” was an attempt to bridge the gap between the two, but even for the dissent, it was not enough.

Still, doesn’t the idea have some value? Shouldn’t there be, in a federation, a sense of good-neighbourliness preventing the two orders of government from exercising their powers in a manner which, though superficially legitimate, imposes serious costs ― something like the neighbourhood disturbances or nuisances of private law ― on each other? Well, perhaps. But there is an important requirement of good-neighbourliness that the majority opinion actually serves much better than the dissent. The majority’s reasoning means that both the federal government and the provinces are clear about their own, and the other’s, entitlements when they embark on a joint venture. If they go ahead, they know the risks. The dissent’s reasoning would only have served to generate confusion about who may do what, and under what circumstances. It is good fences that make good neighbours.

Beavertail Western

Suppose you are the sheriff of a remote town in the Wild West. John, the man who used to run the town’s saloon ― the only saloon within a hundred-mile radius as it happens ― passed away, and left the saloon to a son of his, name of Steve. However, unlike John, who was never fewer than two sheets in the wind himself, Steve is a teetotaller, and abhors the bottle. So he decides to close down the establishment ― not to sell it, but to close it down altogether, and smash the bottles to smithereens. And he told everybody who’ll listen without shooting him (which isn’t a great many people, but they talk, so word spread and you heard all about it) that the point is to make sure nobody will open another saloon anytime soon, so as to get the townsfolk to stop drinking already, repent their sins, and start living like decent, law-abiding citizens.

Now, just as Steve is about to embark on the bottle-smashing fun, a guy rides in and demands that he hand over some of the alcohol, so that he can open a saloon of his own. Not that he has a building, or personnel, or much of anything ready, but never mind that. And as Steve refuses, the stranger barges in and demands that you call up the posse and put the fear of God into that obnoxious moralizer.

Steve is telling you it’s his booze, and he’s entitled to do whatever he wants with it. The guy is telling you that by doing that, he’s preventing him from doing something that he is perfectly entitled to do ― opening up a saloon that is ― and that since he has no use for the stuff anyway, it’s just mean and in bad faith. So what do you do? Never mind the law. You are the law, and there’s no other to be had. You’re going on first principles here. If you think that Steve ought to hand over the booze this guy is demanding, you’ll tell Steve that he’s got to do it ― or else. Will you?

As you’re thinking about it, and maybe have even come to a decision, the guy reveals that he is Steve’s estranged brother Phil. You hadn’t recognized him, because he’d been away for a while, but now that he’s told you, you know it’s true. A brother. Family and all that. So, does that change your answer? And then Phil tells you that he’d actually helped John collect those bottles. Would ride around all day to buy the finest moonshine in the state and bring it to pops. Steve retorts that not only is Phil exaggerating the extent of his involvement, but John also paid him for what little work he did put in, and he’s got the books to prove it. Do you think it matters? Are you going to investigate just what Phil did and didn’t do, and whether he was compensated for it?

Over to you, Sheriff.