Reference Re Alberta Statutes - The Bank Taxation Act; The Credit of Alberta Regulation Act; and the Accurate News and Information Act

Reference Re Alberta Statutes - The Bank Taxation Act; The Credit of Alberta Regulation Act; and the Accurate News and Information Act
Collection
Supreme Court Judgments
Date
1938-03-04
Report
[1938] SCR 100
Judges
Duff, Lyman Poore; Cannon, Lawrence Arthur Dumoulin; Crocket, Oswald Smith; Davis, Henry Hague; Kerwin, Patrick; Hudson, Albert Blellock
On appeal from
Alberta
Subjects
Constitutional law
Decision Content
Supreme Court of Canada
Reference Re Alberta Statutes ‑ The Bank Taxation Act; The Credit of Alberta Regulation Act; and the Accurate News and Information Act, [1938] SCR 100
Date: 1938-03-04
IN THE MATTER OF THREE BILLS PASSED BY THE LEGISLATIVE ASSEMBLY OF THE PROVINCE OF ALBERTA AT THE 1937 (THIRD SESSION) THEREOF, ENTITLED RESPECTIVELY:
" An Act Respecting the Taxation of Banks ";
" An Act to Amend and Consolidate the Credit of Alberta Regulations Act "; and
" An Act to Ensure the Publication of Accurate News and Information ";
and reserved by the Lieutenant-Governor for the signification of the Governor General's pleasure.
1938, Jan. 11, 12, 13, 14, 17, Mar. 4
PRESENT:—Duff C.J. and Cannon, Crocket, Davis, Kerwin and Hudson JJ.
Constitutional law—Alberta statutes—The Bank Taxation Act—The Credit of Alberta Regulation Act, 1937—The Accurate News and Information Act—The Alberta Social Credit Act—Constitutional validity—B.N.A. Act, 1867, ss. 91, 92
The Bank Taxation Act, The Credit of Alberta Regulations Act, 1937 and The Accurate News and Information Act are ultra vires of the provincial legislature of Alberta.
The Alberta Social Credit Act is ultra vires of the provincial legislature. Cannon J. expressing no opinion..
Per Duff C.J. and Davis and Hudson JJ.—Such legislation does not come within section 92 (13 or 16) of the B.N.A. Act; it is not within the power of that province to establish such statutory machinery with the functions for which this machinery is designed and to regulate the operation of it: such machinery, in part at least, as subject matter of legislation, comes within the field designated by "Currency," (s. 91 (14) B.N.A. Act).
Per Duff C.J. and Crocket, Davis, Kerwin and Hudson. JJ.—Such machinery, as established by The Alberta Social Credit Act, in its essential components and features, comes under head no. 15, "Banks and Banking."
Per Duff C.J. and Davis and Hudson JJ.—Even if such legislation is not strictly within the ambit of no. 14 ,or no, 15, or partly in one or partly in the other, then this legislation is ultra vires as its subject-matter is embraced within category no. 2 of s. 91, "Regulation of Trade and Commerce."
Held, by the Court, that the Bank Taxation Act is not an enactment in exercise of the provincial power to raise a revenue for provincial purposes by direct taxation, but is legislation which, in its true character and by ascertaining its effect in the known circumstances to which it is to be applied, relates to "Incorporation of Banks and Banking" (s. 91 (15) B.N.A. Act).
Per Duff C.J. and Cannon, Davis and Hudson JJ.—The rate of taxation provided by that Act must be prohibitive in fact and must be known to the Alberta legislature to be prohibitive. It is not competent to the provinces of Canada, by the exercise of their powers of taxation, to force banks which are carrying on business under the authority of the Bank Act to discontinue business; and taxation by one province on a scale which, in a practical business sense, is manifestly prohibitive is not a valid exercise of provincial legislative authority under section 92. Such legislation, though in the form of a taxing statute is "directed to" the frustration of the system of banking established by the Bank Act, and to the controlling of banks in the conduct of their business.
Per Crocket and Kerwin JJ.—The Bank Taxation Act, instead of being a taxing enactment, is merely a part of a legislative plan to prevent the operation within the province of those banking institutions which have been called into existence and given the necessary powers to conduct their business by the only proper authority, the Parliament of Canada.
Held, by the Court, that The Credit of Alberta Regulation Act, 1937, is legislation in relation to "Banking" (s,. 91 (15) B.N.A. Act); and, per Duff C.J. and Davis and Hudson. JJ., it is also legislation in relation to "The regulation of trade and commerce " within the meaning of section 91 (2).
Per Duff C.J. and Davis and Hudson JJ.—This Act is a part of a general scheme of legislation of which The Social Credit Act is really the basis; and, that latter Act being ultra vires, ancillary and dependent legislation falls with it.
Held, by the Court (except Cannon J.) that The Alberta Accurate News and Information Act forms part of the general scheme of social credit legislation, the basis of which is The Alberta Social Credit Act; and since that Act is ultra vires, ancillary and dependent legislation must fall with it.
Per Duff C.J. and Davis J.—Under the constitution established by the B.N.A. Act, legislative power for Canada is vested in one Parliament and that statute contemplates a parliament working under the influence of public opinion and public discussion. The Parliament of Canada possesses authority to legislate for the protection of that right; and any attempt to abrogate that right of public debate or to suppress the traditional forms of the exercise of such right (in public meeting or through the press) would be incompetent to the legislatures of the provinces. Moreover, the law by which 'the right of public discussion is protected existed at the time of the enactment of The British North America Act and the legislature of Alberta has not the capacity under section 129 of that Act to alter that law by legislation obnoxious to the principle stated.
Per Cannon J.—The mandatory and prohibitory provisions of the Alberta Accurate News and Information Act interfere with the free working of the political organization of the Dominion. They have a tendency to nullify the political rights of the inhabitants of Alberta and of the citizens outside the province, as citizens of Canada, and cannot be considered as dealing with matters purely private and local in that province. The federal parliament is the sole authority to curtail, if deemed expedient and in the public interest, the freedom of the press in discussing public affairs and the equal rights in that respect of all citizens throughout the Dominion. These subjects were matters of criminal law before Confederation, have been recognized by Parliament as criminal matters and have been expressly dealt with by the criminal code. Such an Act is an attempt by the legislature to amend the Criminal Code in this respect and to deny the advantage of section 133 (a) of that Code to the newspaper publishers,
REFERENCE by His Excellency the Governor General in Council to the Supreme Court of Canada in the exercise of the powers conferred by section 55 of the Supreme Court Act (R.S.C., 1927, c. 35) of the following questions as contained in the Order in Council referring these questions to the Court :
Whereas there has been laid before His Excellency the Governor General in 'Council, a report from the Minister of Justice, dated November 2nd, 1937, representing:
1. That it has been, and is, the avowed object of the present Government of the province of Alberta (since its advent to office in September, 1935) to inaugurate in the said province "a new economic order" upon the principles or plan of the theory known as Social Credit:
2. That the said government has since the date afore-mentioned secured the enactment by the legislature of the province of Alberta of the following statutes, more or less directly related to the policy of effectuating the object hereinbefore recited, namely:
Statutes of Alberta
1936 (1st Sess.)
Chapter 5, entitled " An Act Respecting Social Credit Measures," assented to April 3, 1936.
Chapter 6 entitled "An Act Respecting the Refunding of the Bonded Indebtedness of the Province," assented to April 7, 1936.
Chapter 66 entitled " An Act to Amend the Department of Trade and Industry Act," assented to April 7, 1936 (2nd Sess.)
Chapter 1 entitled " An Act to Provide the People of Alberta with Additional Credit," assented to September 1, 1936.
Chapter 2 entitled "An Act to Provide for the Reduction and Settlement of Certain Indebtedness," assented to September 1, 1936. Chapter 3 entitled " An Act to Amend and Consolidate the Debt Adjustment Act, 1933," assented to September 1, 1936.
Chapter 4 entitled "An Act Respecting Prosperity Certificates," assented to September 1, 1936.
Chapter 9 entitled "An Act to Amend the Department of Trade and Industry Act," assented to September 1, 1936.
Chapter 11 entitled " An Act Respecting the Interest Payable on Debentures and Other Securities of the Province," 'assented to September 1, 1936.
Chapter 12 entitled "An Act Respecting the Interest Payable on the Securities of Municipalities," assented to September 1, 1936.
Chapter 16 entitled "An Act to Amend the Judicature Act," assented to September 1, 1936.
1937 (1st Sess.)
Chapter 9 entitled " An Act to Amend and Consolidate the Debt Adjustment Act, 1936," assented to June 17, 1937.
Chapter 10 entitled " An Act Respecting the Issuance and Use of Alberta Social Credit," assented to April 14, 1937.
Chapter 11 entitled " An Act Respecting Proceedings in Respect of Debentures Guaranteed by the Province," assented to April 14, 1937.
Chapter 12 entitled " An Act Respecting the Interest Payable on Debentures or Other Securities Guaranteed by the Province," assented to April 14, 1937.
Chapter 13 entitled " An Act Respecting the Interest Payable on Debentures and Other Securities of the Province," assented to April 14, 1937.
Chapter 30 entitled " An Act to Provide for the Postponement of the Payment of Certain Indebtedness," assented to April 14, 1937.
Chapter 83 entitled "An Act to Amend the Prosperity Certificates Act," assented to June 17, 1937. 1937 (2nd Sess.)
Chapter 1 entitled "An Act to Provide for the Regulation of the Credit of the Province of Alberta," assented to August 6, 1937.
Chapter 2 entitled "An Act to Provide for the Restriction of the Civil Rights of Certain Persons," assented to August 6, 1937.
Chapter 5 entitled "An Act to Amend the Judicature Act," assented to August 6, 1937.
1937 (3rd Sess.)
"An Act to Amend the Debt Adjustment Act, 1937," assented to October 5, 1937.
"An Act to Amend and Consolidate the Licensing of Trades and Businesses Act," assented to October 5, 1937.
3. That by Order in Council, dated August 17, 1937 (P.C. 1985), passed on the recommendation and for the reasons set out in the annexed report of the Minister of Justice, it was ordered that the following Acts of the legislature of the province of Alberta, intituled respectively:‑
" An Act to Provide for the Regulation of the Credit of Alberta";
" An Act to Provide for the Restriction of Civil Rights of Certain Persons "; and
"An Act to Amend the Judicature Act";
being chapters one, two and five, respectively, of the statutes of the said province, 1937, assented to on the 6th day of August, 1937, and received by the Secretary of State of Canada on the 10th day of August, 1937, be disallowed; that upon the same date, the Deputy of the Governor General did certify under his sign manual and seal that the said Acts were received by him on the 10th day of August, 1937; and that by proclamation of His Honour the Lieutenant-Governor of the province of Alberta, dated August 27, 1937, published in the issue of the Canada Gazette of September 11, 1937 (at page 686), reciting the tenor of the said Order in Council and Certificate, the disallowance of the said Acts was duly signified.
4. That following upon the disallowance of the Acts aforementioned, the following Bills, namely: Bill No. 1 "An Act Respecting the Taxation of Banks";
Bill No. 8 "An Act to Amend and Consolidate the Credit of Alberta Regulation Act"; and
Bill No. 9 "An Act to ensure the Publication of Accurate News and Information,"
passed by the Legislative Assembly of the province of Alberta at the 1937 (Third Session) thereof, were by His Honour the Lieutenant-Governor of Alberta, on the 5th October, 1937, reserved for the signification of the Governor General's pleasure; and that authentic copies of the Bills so reserved were received by the Secretary of State of Canada on the 12th October, 1937;
6. That in a submission set forth in a letter of October 12th, 1937, to the Right Honourable the Prime Minister of Canada, the Honourable William Aberhart, Premier of the Government of the province of Alberta, stated, with reference to said Bill No. 8: " Should there be any doubt as to the constitutional validity of the press bill, we have no objection whatever to having it referred to the courts along with the question of disallowance," and, after making certain observations with particular reference to said Bills Nos. 1 and 8, concluded: " For all these reasons we contend that the question of disallowance and the press bill might well be referred to the courts for a decision."
And whereas the Minister of Justice reports that doubts exist or are entertained as to whether the legislature of the province of Alberta has legislative jurisdiction to enact the provisions of said Bills Nos. 1, 8 and 9 (authentic copies whereof are hereto annexed); and, reserving for the time being the consideration of what advice ought to be tendered to the Governor General as to the propriety of signifying, or of withholding signification of, the royal assent to the said Bills, he is of opinion that it is expedient that the question aforementioned should be referred to the Supreme Court of Canada for judicial determination.
Now, therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of Justice and pursuant to the provisions of section 55 of the Supreme Court Act, is pleased to refer and doth hereby refer the following questions to the Supreme Court of Canada for hearing and consideration: 1. Is Bill No. 1, entitled " An Act Respecting the Taxation of Banks" or any of the provisions thereof and in what particular or particulars or to what extent intra vires of the legislature of the province of Alberta?
2. Is Bill No. 8, entitled "An Act to amend and Consolidate the Credit of Alberta Regulation Act" or any of the provisions thereof and in what particular or particulars or to what extent intra vires of the legislature of the province of Alberta?
3. Is Bill No. 9, entitled "An Act to ensure the Publication of Accurate News and Information" or any of the provisions thereof and in what particular or particulars or to what extent intra vires of the legislature of the province of Alberta?
E. J. LEMAIRE,
Clerk of the Privy Council.
Aimé Geoffrion K.C., J. Boyd McBride K.C. and C. P. Plaxton K.C. for the Attorney-General of Canada.
O. M. Biggar K.C., W. S. Gray K.C. and J. J. Frawley K.C. for the Attorney-General for Alberta.
W. N. Tilley K.C., R. C. McMichael K.C., W. F. Chipman K.C. and A. W. Rogers K.C. for the Chartered Banks.
W. N. Tilley K.C. and H. P. Duchemin K.C. for the Canadian Press.
J. L. Ralston K.C., S. W. Field K.C. and R. de W. MacKay K.C. for the Alberta newspapers.
The judgment of Duff C.J. and Davis J. was delivered by
THE CHIEF JUSTICE.—The three Bills referred to us are part of a general scheme of legislation and in order to ascertain the object and effect of them it is proper to look at the history of the legislation passed in furtherance of the general design.
It is no part of our duty (it is, perhaps, needless to say) to consider the wisdom of these measures. We have only to ascertain whether or not they come within the ambit of the authority entrusted by the constitutional statutes (the British North America Act and the Alberta Act) to the legislature of Alberta and our responsibility is rigorously confined to the determination of that issue. As judges, we do not and cannot intimate any opinion upon the merits of the legislative proposals embodied in them, as to their practicability or in any other respect.
It will be necessary, first of all, to examine with some care the central measure, which is The Alberta Social Credit Act, and to arrive at a proper conception of its character from the constitutional point of view.
Various declarations throughout the enacting provisions of this statute, as well as in the preamble, leave no room for doubt as to its objects. We cite verbatim some of these declarations because we think it is important to have before us the language selected by the Legislature itself to describe the purpose of the legislation and the general nature and functions of the machinery which is to be put into operation,
To appreciate the significance of these declarations, however, it is necessary to advert to the constitution and nature of the three bodies set up by the statute for the administration of the Act as well as to the statutory definition of " Alberta Credit."
There is, first, a Board which is designated simply as " The Board"; the first members of which are named by the statute, their successors being appointed by the Legislature. Then there is the Provincial Credit Commission which is to be appointed by the Board; and here it is convenient to mention the duties of the Commission in determining the value of " Alberta Credit." " Alberta Credit " is defined by section 2 (a) as,
the unused capacity of the industries and people of the province of Alberta to produce wanted goods and services.
By section 5 (1) there is to be an account in the treasury of the province known as the Provincial Credit Account. The Commission is to determine, in the manner prescribed by the Act, the value for each year of the
unused capacity of the industries and people of the province of Alberta to produce wanted goods and services;
in other words, the value in money (section 2 (k)) of " Alberta Credit." This amount is to be credited to the Provincial Credit "Account and " at the end of each year the amount " in this account " which shall not have been drawn upon in that year shall be written off." The decisions of the Board and of the Commission in the determination of the annual money value of this " unused capacity " are to be final and are to govern the Provincial Treasurer in the establishment and maintenance of the " Provincial Credit Account." It is this " Alberta Credit " annually determined and credited to the Provincial Credit Account which constitutes, according to the plan of the statute, a fund of credit that is to be employed and put into circulation through the machinery set up by the Act in order to facilitate the exchange of goods ,and services and generally to effectuate the purposes of the Act.
Then, there is the Alberta Credit House which is a department of the provincial administration, constituted by the Commission and a body corporate; and which is to maintain branches throughout the province.
A reference is also necessary to Treasury Credit Certificates. These are issued by the Provincial Treasurer against the Provincial Credit Account from time to time through the Credit House system.
Among the declarations expounding the purpose of the statute we refer to these:—
By the preamble it is affirmed :
the people of Alberta, rich in natural wealth and resources both actual and potential, are yet heavily in debt and have been unable to acquire and maintain a standard of living such as is considered by them to be both desirable and possible; and
* * * the existing means or system of distribution and exchange of wealth is considered to be inadequate, unjust and not suited to the welfare, prosperity and happiness of the people of Alberta.
Section 7 provides:
It is the intent and purpose of this Act to provide for the issue of Treasury Credit Certificates to such extent as may be requisite for the purpose of increasing the purchasing power of the consumers of Alberta as to make such purchasing power conform to the productive capacity of the people 'of the province for the production and delivery of wanted goods and services, which capacity is declared to be the measure of Alberta Credit.
Section 31 declares:
The Commission shall so function and administer this Act for the purpose and to the intent that the Treasury Credit Certificate Account in all branches shall be maintained in balance at all times. It is the intent of this Act to control the volume of the means of payment for goods and services in harmony with the ability of the whole province to produce and consume them on a rising standard of living, so that excess expansion of credit and a consequent undue advance in the price level shall not occur, and that the present system of issuing credit through private initiative for profit, resulting in recurrent deflations and inflations shall cease.
With this section, section 33 should be read. It is in the following words :
In order to establish a system of circulating credit which shall at all times conform to the capacity of the industries and people of Alberta for the production of wanted goods and services; it is hereby declared to be the policy of the Legislative Assembly of Alberta to prevent the undue expansion of credit as well as to eliminate the contraction of credit in time of slackening trade. It is the true meaning and intent of this Act, whenever deemed necessary by the Commission, that the controls over supply of credit through open market operations and the discount rate shall be employed as heretofore to maintain a balanced credit structure.
To these should be added the following statements in the Social Credit Measures Act (1936) which has been repealed:
* * * the existence of indigence and unemployment throughout a large portion of the population demonstrates the fact that the present monetary system is obsolete and a hindrance to the efficient production and distribution of goods; and
* * * the electors of the province are favourable to the adoption in the province of a measure based .on what are generally known as Social Credit principles, their general objects being to bring about the equation of consumption to production, and to afford to each person a fair share in the cultural heritage of the people in the province;
and this statement from the Credit House Act (1936) also repealed :
2 (a) "Alberta Credit" means the credit provided by the Credit House for facilitating the exchange of goods and services within the province.
Section 36 (b) should also be noticed:
36. In addition to the specific powers 'conferred by this Act, the Commission shall be empowered,—
(b) to examine into, consider, investigate and formulate proposals 'having for their object the increase of the purchasing power of the consumer by means of social dividends, compensating discounts or by any other means and the payment to the producer of any commodity of a just price and the allowance to any dealer in a commodity of a fair commission on turnover, and for such purposes to ascertain all necessary facts relating thereto, and to report to the Board as to the feasibility of applying any such proposal or any modification thereof having regard to the economic circumstances of 'the province and of the various businesses, industries, trades and vocations of the people of the Province.
By section 42, the substance of which is given below, the Lieutenant-Governor in Council has full power to give effect to any report of the Commission in so far as its recommendations are not contrary to the policy of the statute, even to the extent of altering and supplementing the provisions of the statute itself. These declarations enable us to affirm with certainty (1) that the evil as the Legislature conceives it with which the statute is intended to grapple is the inability of the people of Alberta to attain to a proper standard of living by reason of the inadequate supply or the unfair distribution of purchasing power; and (2) that, broadly speaking, the enactments in the statute are designed, to employ the phraseology of the authors of the legislation, to equate purchasing power or effective demand with productive capacity; and, moreover, it is easily susceptible of demonstration by reference to the provisions of this statute in detail and to those of the cognate legislation that these measures proceed upon this fundamental postulate, viz., that the economic ills which they aim at curing arise primarily from financial causes and, particularly, from the circumstance that bank credit, which constitutes in the main, in point of volume, the circulating medium of payment and exchange in this country, is issued through private initiative for private profit. And, speaking in general terms, the statute sets up the machinery of a financial system which is to be administered by statutory authority and the predominant function of which is to provide a form of credit designated as " Alberta Credit " which is to be made accessible to consumers and others through the channels created by the Act, and which is to circulate as a medium of exchange and payment.
Alberta credit (the nature of which is described as explained above) is distributed by the Provincial Treasurer by means of Treasury Credit Certificates; and it is his duty to issue through the Credit House system Treasury Credit Certificates in such amounts and at such times as may be required for the purposes of the statute. In particular, it is his duty to issue such certificates to the branches or other agencies for the purpose of providing the credits established pursuant to the requirements of section 13 for, that is to say,
(a) a discount on prices to consumers at retail;
(b) government services;
(c) interest free loans;
(d) debt payments;
(e) export subsidies;
(f) provincial consumers' dividends;
(g) such other purposes as the Lieutenant-Governor in Council at the request of the Board may by order so declare. As to the purposes mentioned in section 13 (g), it should be noticed that, by section 36 (a), in addition to the other powers conferred by the Act, the Commission is empowered to transfer Treasury Credit Certificates in any manner consistent with the purpose of this Act.
The Commission is, moreover, specifically authorized by section 5 (3) to advance Alberta credit to persons engaged in
agriculture or manufacturing or industry * * * and * * * to defray the costs of the building of a home or for establishing or maintaining any business, vocation, calling or for public service.
It is also authorized to negotiate any transfer of Alberta credit with any person, firm or corporate body " entitled to Alberta credit."
Then the Lieutenant-Governor in Council is authorized (section 10),
on the advice of the Board * * * (to) declare that all claims against the province for the payment of any money out of any appropriation of public money made by the Legislative Assembly * * * shall be satisfied by the transfer to such person of an amount of Alberta Credit.
equivalent to the amount of such claim, with a proviso that, in the case of contractual obligations, all parties must agree.
Municipal corporations (by s. 12) are authorized to accept transfers of Alberta credit in satisfaction of any claim and to transfer such Alberta credit to persons who are willing to accept the same in satisfaction or partial satisfaction of their claims for the carrying out of any public work.
Two principal methods are provided for securing access to Alberta Credit by the population generally as individuals. One of the means adopted for this purpose is designated the "Consumers' Dividend,"—a monthly grant of Alberta credit to everybody falling within the designation of "persons entitled to Alberta credit," which includes virtually everybody who is twenty-one years of age, a British subject, resident and domiciled in Alberta, the amount of which is determined by the Commission. The payment of these dividends is provided by Treasury Certificates issued to each branch for the amount that branch has to disburse and the branch issues credit vouchers to the recipients of the dividend in payment thereof.
The second method is by use of the retail discount rate, which constitutes, perhaps, the cardinal feature of the statutory plan. This is a rebate by which purchasers of goods and services are subsidized through a reduction of price compensated by a corresponding credit to the retailer. It is applicable to sales of goods and services to ultimate consumers by persons qualified to " dispense " the discount. In order to qualify for this purpose, a retailer must enter into an agreement with the Commission, one term of which, if the Commission so requires, is that he will deal only with wholesalers and primary producers who have entered into agreements with the Commission pursuant to the provisions of the statute. The discount rate is fixed by the Commission and is determined by the ratio of the money value of the " unused productive capacity " of Alberta to the value of the total capacity.
For augmenting purchasing power, the principal agency appears to be this retail discount rate. A subsidy in this form, by way of reduction of price, it is, perhaps, assumed, will not be attended with the same risk of consequential inflation as a direct subsidy to consumers; especially as the rate, being fixed by reference to the ratio between the value of unusued capacity for production and the value of total capacity may be supposed to diminish with augmentation of production. A condition of the operation of this device is, of course, the provision of some means for compensating the seller for the reduction in price and, since the province of Alberta has no legislative control over the creation of currency or legal tender or bank credits, compensation in any of these forms would ordinarily be supplied by means of taxation, or in other words, ultimately from the pockets of people living in Alberta or owning property there. Such difficulties the statutory plan proposes to avoid by the establishment of Alberta credit as a fund of credit for employment, as we have seen, as a means of exchange and payment.
The statute recognizes that extra-provincial debts will in most cases have to be paid in currency and declares that they shall be so paid when desired by the " other party"; and certain enactments of the statute appear to be intended to make provision for this. It is recognized, in other words, that it would not be practicable for Alberta to establish a system under which legal tender is wholly dispensed with.
As regards intra-provincial transactions, authority is given to everybody to receive Alberta credit in payment of goods and services, but here again the Legislature has obviously recognized its lack of authority to make such acceptance compulsory by direct legislative enactment. Nevertheless, it is clear from the declarations above quoted, as well as from the statute as a whole that the substitution generally in internal commerce of Alberta credit for bank credit and legal tender as the circulating medium is of the very essence of the plan.
The object being to provide increased purchasing power, it is, as explained, of the essence of the scheme that this shall be brought about, not by subsidizing consumers directly, but, mainly by a rebate in prices through the application of the retail discount rate. As that necessarily involves the provision of some means for compensating the seller, and since the compensation provided is compensation out of Alberta credit, it is clear enough that this device could only be made practicable in connection with transactions where the price is paid in Alberta credit, and the discount rate will itself, of course, be paid in the same way.
The practicability of the scheme, the feasibility of it as a means of accomplishing the declared purpose of the legislation, postulates, therefore, a willingness on the part of sellers of goods and services, in Alberta transactions, to accept Alberta credit in payment; in other words, acceptance generally in Alberta of Alberta credit as the circulating medium.
The Credit House is, as already observed, the agent of the Provincial Treasurer through which Alberta credit circulates. The Credit House is to accept deposits of currency and securities, to transfer credit, to receive deposits of credit vouchers and of transfers of Alberta credit. It can convert currency and negotiable instruments on demand into Alberta credit. It is to issue credit vouchers in payment of the consumers' dividend. It is probably intended to issue discount vouchers. Alberta credit on deposit with a branch may be drawn against by a customer by means of any instrument in the form prescribed by the Commission. The forms of credit vouchers and discount vouchers and of transfers are to be settled by regulation by the Commission.
It is expressly provided that a transfer of credit becomes effective on delivery; that is to say, on presentment to a branch of the Credit House. In other words, it is equivalent to an order which is to be honoured on demand. Bankers' credit may be described as the " right to draw cheques on a bank "; and the practical exercise of this right involves either the transfer of credit to another on the books of the same bank, or on the books of another bank, or payment to the payee in legal tender at his discretion. A customer of the Credit House has no right to require payment of legal tender at his discretion, unless his ; deposit is a currency deposit, and cannot transfer such a right to another, but, save in that respect, he is, and must necessarily be, if the system is really to be operative, in relation to his account in the Credit House, in the same position as the customer of a bank.
The question arises: Is legislation of this type competent to a province as within the ambit of Property and Civil Rights within the Province (no. 13) or Matters merely local or private within the Province (no. 16) ; or does the subject matter of it fall within the categories of matters set apart by section 91 under the enumerated heads of that section to be exclusively regulated and controlled by the central legislative authority acting in behalf of the people of Canada as a whole?
The question thus stated puts a dilemma which is not strictly complete because, of course, a subject matter of legislation, though not within any of the enumerated heads of section 91, may still be outside the ambit of section 92.
The whole of the two sections must be considered; and, of course, in light of the judicial interpretation of them. The second of the enumerated categories of section 91 is defined by the words " The Regulation of Trade and Commerce." The same section comprises a number of other categories of subjects which in great part, at least, would, if full scope were given to the words "Regulation of Trade and Commerce" in their ordinary sense, fall under head no. 2. Among them are Currency and Coinage (no. 14) ; Incorporation of Banks, Banking and the Issue of Paper Money (no. 15) and Legal Tender (no. 20).
In respect of " any matter coming within any " of these " classes of subjects" the authority of the Parliament of Canada is " exclusive "; and "legislation falling strictly within any of the classes " so enumerated " is not within the legislative competence of the provincial legislatures under section 92" (The Fisheries case)[1].
Indeed, by the explicit words of the concluding paragraph of section 91, " any matter coming within any of " these " classes of subjects shall not be deemed to come within the class of matters of a local and private nature " assigned exclusively to the provinces. It is settled by the decision of the Privy Council in A.G. for Ontario v. A.G. for Canada[2] (as interpreted in the Great West Saddlery Co. v. The King[3]) that if a given subject-matter falls within any class of subjects enumerated in section 91, "it cannot be treated as covered by any of those within section 92."
The general character of the classes of subjects enumerated in section 91, especially of those mentioned above (Trade and Commerce, Currency and Coinage, Banks and Banking, Legal Tender), is important. A comparison of the nature of these subjects with the subjects included in section 92 seems to suggest that credit (including credit in this novel form) as a medium for effecting the exchange of goods and services, and the machinery for issuing and circulating it, are among the matters assigned to the Dominion under section 91 and not among those intended to be assigned to the provinces under any of the categories of section 92.
The categories (of s. 91) mentioned having been committed for legislative action to Parliament, which represents the people of Canada as a whole, we find it difficult to suppose that it could have been intended, under the general headings Property and Civil Rights, Matters merely local or private, that a single province might direct its powers of legislation under section 92 to the introduction, maintenance and regulation of this novel apparatus for all commercial, industrial and trading operations.
For our present purpose, we are, once again, not in the least concerned with any question of the practicability of the scheme; which will necessarily depend, as we have seen, upon the general acceptance, by the people of Alberta, of Alberta credit as a medium of payment in intra-provincial transactions. In order to test the validity of the legislation we must, we think, envisage the plan in practice as the statute contemplates it.
Our conclusion is that it is not within the power of the province to establish statutory machinery with the functions for which this machinery is designed and to regulate the operation of it. Weighty reasons could be urged for the conclusion that, as subject matter of legislation, in part at least, it comes within the field designated , by "Currency" (no. 14 'of section 91). We think the machinery in its essential components and features comes under head no. 15, Banks and Banking; and if the legislation is not strictly within the ambit of no. 14 or no. 15, or partly in one and partly in the other, then we are satisfied that its subject matter is embraced within category no. 2, Trade and Commerce, and that it does not come within section 92.
First, as to banking. A banker has been defined as " a dealer in credit." True, in ordinary speech, bank credit implies a credit which is convertible into money. But money as commonly understood is not necessarily legal tender. Any medium which by practice fulfils the function of money and which everybody will accept in payment of a debt is money in the ordinary sense of the words even although it may not be legal tender; and this statute envisages a form of credit which will ultimately, in Alberta, acquire such a degree of confidence as to be generally acceptable, in the sense that bank credit is now acceptable; and will serve as a substitute therefor.
Sections 31 and 33, which have been quoted above, are most important in this connection.
Furthermore, sections 32, 34 and 35 (1) all contemplate the maintenance and control of credit by operations which would appear to be substantially banking operations.
It will be observed that full powers are vested in the Commission to give effect to the general provisions of the Act by regulation; and that, moreover, the Board is invested with authority to assist any proposal calculated to " equate " consumption with production; and, further-more, that the Lieutenant-Governor in Council, by section 42, is authorized, for the purpose of giving effect to the intent and purpose of the statute, upon the request of the Board, to alter or supplement the provisions of the Act for the purpose of providing for matters arising out of the operation of the Act for which no provision is made, provided that such change is not contrary to the policy of the Act. The "policy" o