Fédération des producteurs de volailles du Québec v. Pelland

Fédération des producteurs de volailles du Québec v. Pelland
Collection
Supreme Court Judgments
Date
2005-04-21
Neutral citation
2005 SCC 20
Report
[2005] 1 SCR 292
Case number
29805
Judges
McLachlin, Beverley; Major, John C.; Bastarache, Michel; Binnie, William Ian Corneil; LeBel, Louis; Deschamps, Marie; Abella, Rosalie Silberman
On appeal from
Quebec
Subjects
Constitutional law
Notes
SCC Case Information: 29805
Decision Content
SUPREME COURT OF CANADA
Citation: Fédération des producteurs de volailles du Québec v. Pelland, [2005] 1 S.C.R. 292, 2005 SCC 20
Date: 20050421
Docket: 29805
Between:
André Pelland
Appellant
v.
Attorney General of Quebec and Fédération des producteurs de volailles du Québec
Respondents
‑ and ‑
Attorney General of Canada and Chicken Farmers of Canada
Interveners
Coram: McLachlin C.J. and Major, Bastarache, Binnie, LeBel, Deschamps and Abella JJ.
Reasons for Judgment:
(paras. 1 to 63):
Abella J. (McLachlin C.J. and Major, Bastarache, Binnie, LeBel and Deschamps JJ. concurring)
______________________________
Fédération des producteurs de volailles du Québec v. Pelland, [2005] 1 S.C.R. 292, 2005 SCC 20
André Pelland Appellant
v.
Attorney General of Quebec and Fédération
des producteurs de volailles du Québec Respondents
and
Attorney General of Canada and
Chicken Farmers of Canada Interveners
Indexed as: Fédération des producteurs de volailles du Québec v. Pelland
Neutral citation: 2005 SCC 20.
File No.: 29805.
2004: December 9; 2005: April 21.
Present: McLachlin C.J. and Major, Bastarache, Binnie, LeBel, Deschamps and Abella JJ.
on appeal from the court of appeal for quebec
Constitutional law — Distribution of legislative powers — Federal‑provincial chicken marketing scheme — Constitutionality of provincial component of scheme — Whether provincial scheme applicable to production of chicken intended for interprovincial market — An Act respecting the marketing of agricultural, food and fish products, R.S.Q., c. M‑35.1 — R_glement sur la production et la mise en march_ du poulet, R.R.Q., c. M‑35.1, r. 13.2 — Plan conjoint des producteurs de volailles du Qu_bec, R.R.Q., c. M‑35, r. 126.
Constitutional law — Delegation of regulatory powers — Referential incorporation of provincial legislation by federal regulatory body — Federal‑provincial chicken marketing scheme — Federal body, through Grant of Authority by Governor in Council, delegating its regulatory power over interprovincial and export trade to provincial marketing board and referentially incorporating provincial legislation — Whether administrative delegation and referential incorporation constitutional — Whether only Parliament can referentially incorporate provincial legislation.
The federal and provincial governments entered into a scheme with respect to the production and marketing of chicken in Canada. Under the scheme, the federal marketing agency set a global production quota for each province and the provincial board agreed to authorize its producers to globally produce and market no more chicken than the quantity fixed by the federal body as that province’s share of the national marketing target. The federal body, through a Grant of Authority by the Governor in Council, delegated its authority to allocate and administer the federal quotas and regulate the marketing of chicken in interprovincial and export trade to the provincial body. A chicken producer in a province is thus allocated by the provincial body a single quota applicable to all of his or her production and marketing of chicken, regardless of an intention to market the product intraprovincially, extraprovincially or both. In this case, the appellant, a Quebec chicken producer, grossly exceeded his allotted quota. The bulk of this production was exported to Ontario. The provincial board, in accordance with the penalty provisions found in the provincial regulations, automatically reduced his quota to zero and imposed a monetary penalty. The Superior Court rejected the appellant’s argument that the Quebec law was unconstitutional on the grounds that it affects interprovincial trade, and granted an interlocutory injunction. The Court of Appeal upheld the decision.
Held: The appeal should be dismissed.
The provincial legislative component of the federal‑provincial chicken marketing scheme is constitutional and can operate to limit the production of chicken destined exclusively for the interprovincial market. The core character of the provincial legislative component does not relate to setting quotas or fixing prices for exported goods or to attempting to regulate interprovincial or export trade. Rather, its purpose is to establish rules that allow for the organization of the production and marketing of chicken within Quebec, and to control chicken production to fulfill provincial commitments under a cooperative federal‑provincial agreement. Any impact of this legislation on extraprovincial trade is incidental. Chicken producers within the province who have received a quota from the provincial body are free to market their products intraprovincially, extraprovincially (with a licence from the federal body) or in some combination of the two, so long as they do not exceed their individual quotas. The fact that the appellant’s quota was reduced to zero had nothing to do with a provincial attempt to regulate interprovincial or export trade, and everything to do with a flagrant disregard for his production quota. [33-34] [37] [43-44]
The delegation of regulatory powers and the referential incorporation of provincial legislation by the federal body under the Grant of Authority were constitutional. The Grant of Authority, which satisfies the wording and intent of the delegation of power provision of the Farm Products Agencies Act , falls squarely within a well‑established body of precedent upholding the validity of administrative delegation in aid of cooperative federalism. When the federal legislation and regulations and the Grant of Authority are considered together, it is clear that Parliament intended at all times to retain its administrative control over the provincial body through the federal marketing agency, and there is no indication that the Grant of Authority attempted to expand provincial legislative authority. Lastly, there is no basis in this case for elevating the claim that only Parliament can referentially incorporate provincial legislation to the level of a constitutional principle. [55] [57] [59]
Cases Cited
Applied: Reference re Agricultural Products Marketing Act, [1978] 2 S.C.R. 1198; referred to: Kitkatla Band v. British Columbia (Minister of Small Business, Tourism and Culture), [2002] 2 S.C.R. 146, 2002 SCC 31; Carnation Co. v. Quebec Agricultural Marketing Board, [1968] S.C.R. 238; Reference re The Farm Products Marketing Act, [1957] S.C.R. 198; Attorney‑General for Manitoba v. Manitoba Egg and Poultry Assn., [1971] S.C.R. 689; Canadian Industrial Gas & Oil Ltd. v. Government of Saskatchewan, [1978] 2 S.C.R. 545; Central Canada Potash Co. v. Government of Saskatchewan, [1979] 1 S.C.R. 42; British Columbia (Milk Board) v. Grisnich, [1995] 2 S.C.R. 895; P.E.I. Potato Marketing Board v. H. B. Willis Inc., [1952] 2 S.C.R. 392; Coughlin v. Ontario Highway Transport Board, [1968] S.C.R. 569; Attorney General of Nova Scotia v. Attorney General of Canada, [1951] S.C.R. 31; Peralta v. Ontario, [1988] 2 S.C.R. 1045.
Statutes and Regulations Cited
An Act respecting the marketing of agricultural, food and fish products, R.S.Q., c. M‑35.1, s. 1, 45, 64, 93(2), (3), (4), (5), (6), 94.
Canadian Chicken Licensing Regulations, SOR/81‑517.
Canadian Chicken Marketing Agency Quota Grant of Administrative Authority, P.C. 1991‑1090, ss. 2, 3, 4.
Canadian Chicken Marketing Quota Regulations, 1990, SOR/90‑556, ss. 2, 3, 4, 5(1), (3), 6, 7.
Chicken Farmers of Canada Proclamation, SOR/79‑158, ss. 6(1), 9.
Constitution Act, 1867, ss. 91(2) , 92(10) , 92A .
Farm Products Agencies Act, R.S.C. 1985, c. F‑4, ss. 16(1) , 21 , 22 .
Federal‑Provincial Agreement with respect to the establishment of a Comprehensive Chicken Marketing Program in Canada (1978).
Plan conjoint des producteurs de volailles du Québec, R.R.Q., c. M‑35, r. 126.
Règlement sur la production et la mise en marché du poulet, R.R.Q., c. M‑35.1, r. 13.2, ss. 1, 53, 54, 90, 92.
Authors Cited
Hogg, Peter W. Constitutional Law of Canada, vol. 1, loose‑leaf ed. Scarborough, Ont.: Carswell, 1992.
APPEAL from a judgment of the Quebec Court of Appeal (Fish, Rousseau‑Houle and Chamberland JJ.A.), [2003] Q.J. No. 3331 (QL), affirming a decision of Crôteau J., [2001] Q.J. No. 5828 (QL). Appeal dismissed.
Louis H. Lacroix, François Chevrette and Sébastien Locas, for the appellant.
Pierre‑Christian Labeau, for the respondent the Attorney General of Quebec.
Pierre Brosseau and Nancy Lemaire, for the respondent Fédération des producteurs de volailles du Québec.
René LeBlanc, for the intervener the Attorney General of Canada.
David K. Wilson and M. Lynn Starchuk, for the intervener the Chicken Farmers of Canada.
The judgment of the Court was delivered by
1 Abella J. — Over 25 years ago, this Court decided that a federal-provincial scheme with respect to the production and marketing of eggs was constitutional. André Pelland, a Quebec chicken farmer whose production is subject to a similar scheme, seeks a review of the scheme’s constitutionality.
Background
2 In a landmark 1978 case which has come to be known as the “Egg Reference” (Reference re Agricultural Products Marketing Act, [1978] 2 S.C.R. 1198), this Court unanimously affirmed the constitutional validity of a national agricultural marketing scheme collaboratively crafted by Parliament and the provinces in response to the Court’s evolving jurisprudence. The Egg Reference has since become the blueprint for federal-provincial marketing schemes.
3 After the release of the Egg Reference, the federal and provincial governments entered into the 1978 Federal-Provincial Agreement with respect to the establishment of a Comprehensive Chicken Marketing Program in Canada (“Federal-Provincial Agreement”).
4 To ensure effective marketing and a dependable supply of chicken to Canadian consumers, the Federal-Provincial Agreement was designed to weave together the legislative jurisdiction of both levels of government in order to ensure a seamless regulatory scheme. The integration of the federal and provincial components of the scheme is achieved through s. 22(3) of the Farm Products Agencies Act, R.S.C. 1985, c. F-4 . (The relevant provisions are attached as appendices to these reasons.) Section 22(3) enables a federal marketing agency to authorize a provincial body to perform any function relating to interprovincial or export trade in the regulated product that the federal agency is authorized to perform. Pursuant to the Canadian Chicken Marketing Agency Quota Grant of Administrative Authority (“Grant of Authority”), P.C. 1991‑1090, June 13, 1991, the federal marketing agency delegated its authority to Quebec’s chicken marketing board, the Fédération des producteurs de volailles du Québec (“Fédération”). The Grant of Authority authorized the provincial body to allocate and administer federal quotas in accordance with both the federal Canadian Chicken Marketing Quota Regulations, 1990, SOR/90‑556, and such relevant rules as were in force from time to time in the province.
5 Implementing its part of the terms of the Federal-Provincial Agreement, and pursuant to what is now s. 16(1) of the Farm Products Agencies Act , the federal government created a federal chicken marketing agency, then known as the Canadian Chicken Marketing Agency and now called the Chicken Farmers of Canada (“CFC”). It was expressly empowered by s. 22(1) of the Farm Products Agencies Act to implement a marketing plan and make such orders and regulations, subject to the approval of the Governor in Council, as were necessary for the execution of the plan.
6 The provincial component of the scheme in Quebec is the subject of the constitutional challenge before us and is embodied in An Act respecting the marketing of agricultural, food and fish products, R.S.Q., c. M-35.1, and the Règlement sur la production et la mise en marché du poulet, R.R.Q., c. M‑35.1, r. 13.2. In 1971, the Plan conjoint des producteurs de volailles du Québec, R.R.Q., c. M-35, r. 126 (“Plan”), was adopted pursuant to what is now s. 45 of the provincial legislation. The Plan is administered by the Fédération and governs all production and marketing of chicken within the province of Quebec.
7 The function of the federal body is to assess the national market and set a global production quota for each province. It assigns a marketing quota to each province representing that province’s share of the national market.
8 Each provincial body then adopts as its intraprovincial production quota the exact share federally assigned to it. It agrees to authorize its local producers to globally produce and market no more chicken than the quantity fixed by the federal body as that province’s share of the national marketing target. To produce and market chickens in Quebec, a farmer must receive a quota allocation from the Fédération and produce no more than his or her allocated quota for a given period. A producer in a province receives a single quota applicable to all of his or her production and marketing of chicken, regardless of intended destination.
9 In order to facilitate the integration of production and marketing quotas, the federal body delegates its authority to regulate the marketing of chickens in interprovincial and export trade to the provincial body, in this case the Fédération. Once producers obtain a production and marketing quota from the Fédération, they are free to decide where their product will be sold. Neither the federal nor the provincial body sets distinct intraprovincial or extraprovincial marketing quotas.
10 In this way, the federal-provincial scheme combines in one body, the Fédération, provincial jurisdiction over production and intraprovincial marketing, and federal jurisdiction over extraprovincial marketing. The federally and provincially assigned quotas dovetail so that the total quantity of chicken produced in Canada does not exceed the agreed-upon national marketing total.
11 Because Mr. Pelland produced 4,425,030 kg in excess of his allotted quota for the relevant periods, the Fédération, in accordance with the penalty provisions found in the provincial regulations, automatically reduced his quota to zero and imposed a monetary penalty in the amount of $2,433,766.50. In addition, it sought an interlocutory injunction.
12 Crôteau J. granted the injunction: [2001] Q.J. No. 5828 (QL). He found that Mr. Pelland produced and sold about 29 times his quota, representing almost 50 percent of the surplus produced in Quebec for the relevant periods.
13 In the Court of Appeal of Quebec, Rousseau-Houle J.A., writing for a unanimous court (Fish and Chamberland JJ.A.), dismissed Mr. Pelland’s appeal on the grounds that this Court’s decision in the Egg Reference was determinative of the constitutional issue raised by the appellant: [2003] Q.J. No. 3331 (QL).
14 After leave was granted in October 2003, McLachlin C.J. stated the following constitutional questions:
1. Can An Act respecting the marketing of agricultural, food and fish products, R.S.Q., c. M‑35.1, and the Règlement sur la production et la mise en marché du poulet, R.R.Q., c. M‑35.1, r. 13.2, constitutionally apply ex proprio vigore to limit the production of chickens destined exclusively to the interprovincial market?
2. If not, do An Act respecting the marketing of agricultural, food and fish products, R.S.Q., c. M‑35.1, and the Règlement sur la production et la mise en marché du poulet, R.R.Q., c. M‑35.1, r. 13.2, nonetheless apply to limit the production of chickens destined exclusively to the interprovincial market by virtue of s. 22(3) of the Farm Product Marketing Agencies Act, R.S.C. 1985, c. F‑4 , and the Canadian Chicken Marketing Agency Quota Grant of Administrative Authority, P.C. 1991‑1090?
15 In my view, the 1978 Federal-Provincial Agreement, like the scheme in the Egg Reference, both reflects and reifies Canadian federalism’s constitutional creativity and cooperative flexibility. For the reasons that follow, and based largely on a generation of constitutional jurisprudence from this Court, I would dismiss the appeal.
Analysis
A. The Constitutional Validity of the Provincial Production and Marketing Legislation
16 Mr. Pelland does not dispute that he grossly exceeded his allocated quota. Rather, he challenges the interlocutory injunction obtained by the Fédération on the grounds that the entirety of his produce is exported to Ontario and not marketed in the province of Quebec. He argues that the provincial marketing Act and regulations can only apply to the production of chickens destined for Quebec markets, not those intended exclusively for interprovincial markets.
17 Mr. Pelland does not base his argument on the pith and substance of the provincial marketing Act and the provincial chicken regulation; instead, he urges the Court to conclude that placing quota restrictions on products destined for export is not a provincial matter. He does not challenge the validity of the provincial scheme, but argues that it cannot apply to the production of chicken destined solely for interprovincial markets. The scheme he proposes as an alternative would be bifurcated: a federal quota for export production and a provincial one for intraprovincial trade.
18 Mr. Pelland relies on Laskin C.J.’s statement in the Egg Reference that the provincial law and regulations at issue there would not be valid if they occurred “with a view to limiting interprovincial or export trade” (p. 1287). However, this comment was made in the context of considering whether the law and regulations were in pith and substance a provincial matter. Ultimately, as explained later in these reasons, Laskin C.J. found that they were. This comment, therefore, does not support the proposition that provincial laws found valid under a pith and substance analysis are inapplicable to export trade.
19 Contrary to Mr. Pelland’s submissions, in my view the pith and substance of the provincial marketing Act and the provincial chicken regulations are at the heart of this appeal. In order to determine whether the provincial component of the scheme is unconstitutional because it intrudes into a federal head of power, it is necessary first to determine its core character.
20 The requisite approach was recently discussed by LeBel J. in Kitkatla Band v. British Columbia (Minister of Small Business, Tourism and Culture), [2002] 2 S.C.R. 146, 2002 SCC 31, at paras. 53-54, a case involving provisions of the Heritage Conservation Act, R.S.B.C. 1996, c. 187:
A pith and substance analysis looks at both (1) the purpose of the legislation as well as (2) its effect. First, to determine the purpose of the legislation, the Court may look at both intrinsic evidence, such as purpose clauses, or extrinsic evidence, such as Hansard or the minutes of parliamentary committees.
Second, in looking at the effect of the legislation, the Court may consider both its legal effect and its practical effect. In other words, the Court looks to see, first, what effect flows directly from the provisions of the statute itself; then, second, what “side” effects flow from the application of the statute which are not direct effects of the provisions of the statute itself: see R. v. Morgentaler, [1993] 3 S.C.R. 463, at pp. 482‑83. Iacobucci J. provided some examples of how this would work in Global Securities Corp. v. British Columbia (Securities Commission), [2000] 1 S.C.R. 494, 2000 SCC 21, at para. 23:
The effects of the legislation may also be relevant to the validity of the legislation in so far as they reveal its pith and substance. For example, in Saumur v. City of Quebec, [1953] 2 S.C.R. 299, the Court struck down a municipal by‑law that prohibited leafleting because it had been applied so as to suppress the religious views of Jehovah’s Witnesses. Similarly, in Attorney‑General for Alberta v. Attorney‑General for Canada, [1939] A.C. 117, the Privy Council struck down a law imposing a tax on banks because the effects of the tax were so severe that the true purpose of the law could only be in relation to banking, not taxation. However, merely incidental effects will not disturb the constitutionality of an otherwise intra vires law. [Emphasis added.]
(See also P. W. Hogg, Constitutional Law of Canada (loose-leaf ed.), vol. 1, at § 15.5(d))
21 The essential character of an analogous scheme was scrutinized in the Egg Reference. Under the scheme at issue in that case, the Canadian Egg Marketing Agency set overall quotas for each province. It was created as a result of an agreement between the federal Minister of Agriculture, the federal marketing agency, and their counterparts in all provinces. The goal was to establish a comprehensive national egg marketing scheme. The federal Agency was given authority to set overall provincial quotas and to impose levies or charges on the marketing of eggs by egg producers, to be collected on its behalf by the provincial egg marketing boards. In Ontario, the Ontario Farm Products Marketing Board was the provincial board setting individual egg production quotas for its producers based on the province’s assigned quota. The Ontario legislation also prohibited egg production by anyone who did not have a quota.
22 In the Egg Reference, this Court confirmed that the regulation of agricultural production is essentially a local matter within provincial jurisdiction pursuant to s. 92(10) of the Constitution Act, 1867 . The Court reached the following relevant conclusions: although constitutional jurisdiction over marketing is divided, agricultural production is prima facie a local matter under provincial jurisdiction; the provincial scheme was not aimed at controlling extraprovincial trade, but was deemed to be coordinated and integrated with the regulations established under federal authority; and, most pertinently, producers could not claim exemption from provincial control over production by electing to devote their entire output to extraprovincial trade.
23 Any effect of the provincial egg marketing and production scheme on extraprovincial trade was found to be incidental to the constitutionally permissible purpose of controlling agricultural production within the context of a cooperative federal-provincial agreement.
24 While disagreeing about the exact scope of the relevant provincial head of power, Pigeon J., for the five-person majority, and Laskin C.J., in a minority concurring opinion, agreed that the provincial component of this marketing scheme was constitutional because its purpose did not extend beyond production and trade within the province. They also both accepted that if the true purpose of the provincial legislation had been to regulate interprovincial and export trade, it would have been ultra vires.
25 Pigeon J. held that because agricultural production is prima facie within provincial jurisdiction, production quotas could be imposed by a province on all its producers, regardless of the ultimate destination of the goods produced. A producer could not evade a province’s jurisdictional authority over production by producing goods destined for an export or extraprovincial market:
No operator can claim exemption from provincial control by electing to devote his entire output to extraprovincial trade. I can find no basis for the view that there must be a division of authority at the stage of production between what will be going into intraprovincial and what will be going into extraprovincial trade. [Emphasis added; p. 1295.]
26 This is the conclusion Mr. Pelland seeks to set aside, primarily on the basis of Laskin C.J.’s minority opinion expressing the concern that if the focus of the provincial legislation had been the regulation of extraprovincial interests, it would have been beyond the province’s jurisdiction. The possibility that specifically caused Laskin C.J. to articulate a caveat to Pigeon J.’s opinion was that of a province using its regulatory jurisdiction over production to “choke off” interprovincial trade at its very source:
It is true that a Province cannot limit the export of goods from the Province, and any provincial marketing legislation must yield to this. How then, it may be asked, can it be allowed to accomplish this forbidden end by choking off interprovincial trade at its very source, at the point of production? [p. 1286]
27 Based on this analysis, Mr. Pelland submits that this Court ought to reconsider the constitutionality of a marketing scheme like the one he is regulated by, find the provincial component of the scheme to be unconstitutional, and confine the jurisdiction of provincial marketing boards to production for provincial marketing only.
28 It seems to me that the impugned legislation is constitutionally valid whether the majority or minority opinion in the Egg Reference is applied. Pigeon J. did not dispute that provincial legislation which is aimed at regulating extraprovincial trade is ultra vires. He held only that agricultural production is prima facie a provincial matter:
In my view, the control of production, whether agricultural or industrial, is prima facie a local matter, a matter of provincial jurisdiction. [p. 1293]
He qualified this position, however, by stating:
This does not mean that such power is unlimited, a province cannot control extraprovincial trade, as was held in the Manitoba Egg Reference [[1971] S.C.R. 689] and in the Burns Foods case [[1975] 1 S.C.R. 494]. However, “Marketing” does not include production and, therefore, provincial control of production is prima facie valid. In the instant case, the provincial regulation is not aimed at controlling the extraprovincial trade. In so far as it affects this trade, it is only complementary to the regulations established under federal authority. In my view this is perfectly legitimate, otherwise it would mean that our Constitution makes it impossible by federal-provincial cooperative action to arrive at any practical scheme for the orderly and efficient production and marketing of a commodity which all governments concerned agree requires regulation in both intraprovincial and extraprovincial trade. [Emphasis added; p. 1296.]
Laskin C.J. was in substantial agreement with this analysis:
The primary object is to regulate marketing in intraprovincial trade. Although it would not be a valid regulation of such marketing to impose quotas on production with a view to limiting interprovincial or export trade, I am not persuaded that I should give s. 21a, seen in the context of the Ontario Farm Products Marketing Act of which it is part, that construction. [Emphasis added; pp. 1286-87.]
29 With respect, I have difficulty seeing how Laskin C.J.’s reasons in the Egg Reference assist Mr. Pelland or yield a fertile basis for reconsidering the constitutionality of the provincial component of the scheme in this case. In a passage of equal applicability to the present case, Laskin C.J. wrote that:
It is clear that the intention was to mesh federal and provincial regulatory control so as to embrace both the producers who market their production in a particular Province and those who seek to export their production to another Province or beyond Canada. It was certainly open to the federal authorities to fix the respective provincial shares of Canadian egg production for the purpose of regulating the movement of eggs in interprovincial or export trade. The share so fixed for a particular Province would establish a limitation for that Province in respect of its own marketing policies. Hence, the fact that a Province has adopted the same share percentage does not per se rule out its connection with intraprovincial trade. The adoption provides no more than a reference point by which to measure the provincial approach to marketing quotas for producers in the Province. I do not think that the use of this reference point amounts to an invasion of federal authority in relation to interprovincial trade. Rather, and the terms of the challenged Regulation so indicate, it is enacted under a recognition of that authority and an appreciation of the control of that trade under federal legislation. In short, it envisages that there will be interprovincial and export marketing by producers in Ontario. [Emphasis added; pp. 1282-83.]
30 As a substantive matter, neither judgment in the Egg Reference deviated from this Court’s defining prior analysis in Carnation Co. v. Quebec Agricultural Marketing Board, [1968] S.C.R. 238. In Carnation, Martland J., writing for a unanimous Court, undertook a careful review of this Court’s jurisprudence, including Reference re The Farm Products Marketing Act, [1957] S.C.R. 198, and concluded that:
The view of the four judges in the Ontario Reference was that the fact that a transaction took place wholly within a province did not necessarily mean that it was thereby subject solely to provincial control. The regulation of some such transactions relating to products destined for interprovincial trade could constitute a regulation of interprovincial trade and be beyond provincial control.
While I agree with the view of the four judges in the Ontario Reference that a trade transaction, completed in a province, is not necessarily, by that fact alone, subject only to provincial control, I also hold the view that the fact that such a transaction incidentally has some effect upon a company engaged in interprovincial trade does not necessarily prevent its being subject to such control.
I agree with the view of Abbott J., in the Ontario Reference, that each transaction and each regulation must be examined in relation to its own facts. . . . They did not purport directly to control or to restrict such trade. There was no evidence that, in fact, they did control or restrict it. The most that can be said of them is that they had some effect upon the cost of doing business in Quebec of a company engaged in interprovincial trade, and that, by itself, is not sufficient to make them invalid. [Emphasis added; pp. 253-54.]
31 This analysis underlies the concern expressed by Laskin C.J. in the Egg Reference, and it arises whenever there is overlapping jurisdiction. Laws enacted under the jurisdiction of one level of government often overflow into or have incidental impact on the jurisdiction of the other governmental level. That is why a reviewing court is required to focus on the core character of the impugned legislation, as this Court did in Carnation; Attorney-General for Manitoba v. Manitoba Egg and Poultry Assn., [1971] S.C.R. 689; the Egg Reference; Canadian Industrial Gas & Oil Ltd. v. Government of Saskatchewan, [1978] 2 S.C.R. 545; and Central Canada Potash Co. v. Government of Saskatchewan, [1979] 1 S.C.R. 42.
32 Turning to an examination of the essence of the provincial component of the 1978 federal-provincial chicken marketing scheme, one observes at the outset that the scheme is functionally identical to Ontario’s egg marketing and production legislation considered in the Egg Reference. Like that case, the parties agree that the provisions of the Constitution Act, 1867 engaged by the federal-provincial chicken marketing scheme at issue here are s. 91(2) , which confers jurisdiction over trade and commerce to the federal government, and s. 92(10) , which gives provincial governments jurisdiction over local works and undertakings.
33 As previously indicated, once the national quota for chicken production is divided among the provinces, a producer must be allotted an individual production quota in order to produce chicken in the province. Chicken producers within each province receive only one individual marketing and production quota.
34 The provincial chicken regulation expresses quotas in square meters of barn space, clearly tying quotas to physical production within Quebec. The quota assigned to each producer in a province does not distinguish between what can be marketed within the province and what can be marketed extraprovincially; rather, the decision whether to market internally or externally is up to each producer once he or she obtains the proper licences (Canadian Chicken Licensing Regulations, SOR/81-517). Quebec’s chicken producers are free to market their products intraprovincially, extraprovincially or in some combination of the two, so long as they do not exceed their individual quotas.
35 The only requirements imposed on provincial producers wishing to export their product are that they obtain a marketing and production quota from the Fédération and a licence from the federal body. A producer may not engage in the marketing of chicken in interprovincial or export trade without the appropriate licence. The licensing requirement, however, is not onerous. On receipt of a valid application, the federal body is required to issue a licence. For its part, the producer is required to abide by the applicable laws and to make regular reports detailing its extraprovincial sales. The amount of chicken that a producer may export is not specified on the licence and is, in theory, limited solely by the quota amount assigned by the Fédération.
36 It is important to stress that in examining the provincial laws at issue in the Egg Reference, both Laskin C.J. and Pigeon J. agreed that they were constitutional because they did not purport to, nor did they in fact, directly control or restrict export trade. The same is true of the provincial scheme in this case.
37 The core character of the provincial legislative component of the federal-provincial chicken marketing scheme is not to set quotas or fix prices for exported goods or to attempt to regulate interprovincial or export trade. As in the Egg Reference, its purpose is to establish rules that allow for the organization of the production and marketing of chicken within Quebec and to control chicken production to fulfill provincial commitments under a cooperative federal-provincial agreement. Any impact of this legislation on extraprovincial trade is incidental.
38 With respect, I see no principled basis for disentangling what has proven to be a successful federal-provincial merger. Because provincial governments lack jurisdiction over extraprovincial trade in agricultural products, Parliament authorized the creation of federal marketing boards and the delegation to provincial marketing boards of regulatory jurisdiction over interprovincial and export trade. Each level of government enacted laws and regulations, based on their respective legislative competencies, to create a unified and coherent regulatory scheme. The quota system is an attempt to maintain an equilibrium between supply and demand and attenuate the inherent instability of the markets. To achieve this balance, it cannot exempt producers who seek to avoid production control limits by devoting all or any of their production to extraprovincial trade.
39 Mr. Pelland also suggested that the Court consider the analysis in Central Canada Potash as offering analagous guidance. With respect, however, that case is not applicable. It turned on “the true nature and character” of the operative provincial scheme (p. 75). In Central Canada Potash, in fact, Laskin C.J. affirmed the decision of this Court in the Egg Reference. At issue was the constitutional validity of provincial regulations in Saskatchewan whereby each producer’s share of potash production was allocated based solely on production capacity. It was common ground that at the time the regulations were made, almost all Saskatchewan-produced potash was sold in interprovincial and export trade. The case was decided before s. 92A was added to the Constitution Act, 1867 , enlarging provincial powers over non-renewable natural resources.
40 Laskin C.J. found that the purpose of the regulations was to regulate the marketing of potash through the fixing of a minimum selling price applicable to the permitted production quota. The only market for which the scheme had any significance was the export market. Citing the Egg Reference, he held that while it is true that production controls and conservation measures with respect to natural resources in a province are ordinarily matters within provincial authority, the situation may be different where a province establishes a marketing scheme with price fixing as its central feature. He found Saskatchewan’s legislation to be ultra vires because it took direct aim at the production of potash destined for export and had the intended effect of regulating the export price.
41 In Mr. Pelland’s case, however, quotas are not being imposed on production with a view to limiting interprovincial trade, the hypothetical situation left open by Laskin C.J.’s minority judgment in the Egg Reference. Unlike Central Canada Potash, where the provincial scheme took direct aim at production destined for export, or the Manitoba Egg and Poultry case in which the provincial scheme was designed to restrict or limit the free flow of trade between provinces, the cooperative scheme at issue in this case is designed, like the scheme in the Egg Reference, to integrate federal and provincial marketing and production programmes.
42 At best, Mr. Pelland might argue that his production was effectively “choked off” by the reduction of his quota to zero through the penalty provisions of the provincial legislation. It is true that in his case the penalty provisions had this effect. But since the purpose of the provincial legislation is not to strangle export production, and since Mr. Pelland had been entitled, if he so chose, to export his entire quota of chickens, he cannot argue that the limits on his production and marketing contradict the purpose of the provincial legislation.
43 Mr. Pelland had his quota reduced not to control what he exported to extraprovincial markets, but in proportionate and formulaic response to his overproduction, regardless of the intended market. An individual producer like Mr. Pelland receives a single production quota, regardless of marketing destination. The fact that his quota was reduced to zero had nothing to do with a provincial attempt to regulate interprovincial or export trade, and everything to do with a flagrant disregard for his production quota.
44 Accordingly, the answer to the first constitutional question is affirmative, namely, the provincial legislation is constitutional and can operate to limit the production of chickens destined exclusively for the interprovincial market.
B. Administrative Delegation and Referential Incorporation
45 Mr. Pelland’s alternative argument is that the Grant of Authority in this case was constitutionally improper.
46 In British Columbia (Milk Board) v. Grisnich, [1995] 2 S.C.R. 895, the Court held that a provincial administrative body does not need to specify on the face of a decision the exact source of the authority to make it. So long as a provincial marketing board is properly endowed with both federal and provincial powers, the court will not look behind any given decision.
47 If, however, there is a deficiency in the federal-provincial scheme, the court may scrutinize the impugned decision of the provincial board to determine the authority under which it was made. The question then becomes whether the decision is constitutionally sustainable given the legislative or administrative defect.
48 I see no such defect in this case. The federal body, through the Grant of Authority, properly delegated its regulatory power over interprovincial and export trade to the Fédération.
49 Mr. Pelland concedes that a provincial marketing board may impose quota restrictions on products destined for export if there is a prop