Reference re Agricultural Products Marketing

Reference re Agricultural Products Marketing
Collection
Supreme Court Judgments
Date
1978-01-19
Report
[1978] 2 SCR 1198
Judges
Laskin, Bora; Martland, Ronald; Judson, Wilfred; Ritchie, Roland Almon; Spence, Wishart Flett; Pigeon, Louis-Philippe; Dickson, Robert George Brian; Beetz, Jean; de Grandpré, Louis-Philippe
On appeal from
Ontario
Subjects
Constitutional law
Decision Content
Supreme Court of Canada
Reference re Agricultural Products Marketing, [1978] 2 S.C.R. 1198
Date: 1978-01-19
In the Matter of an Appeal from the Court of Appeal for the Province of Ontario
And in the Matter of a reference to the Court of Appeal pursuant to The Constitutional Questions Act, R.S.O. 1970, Chapter 79, by Order-in-Council No. 956/76 respecting the Agricultural Products Marketing Act, R.S.C. 1970, c. A-7; the Farm Products Marketing Agencies Act, 19-20-21 Eliz. II, c. 65 and The Farm Products Marketing Act, R.S.O. 1970, c. 162 and certain Regulations and Orders passed thereunder.
1977: June 21, 22, 23, 24; 1978: January 19.
Present: Laskin C.J. and Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.
Constitutional law—Distribution of legislative authority—Agreement between federal and provincial Ministers of Agriculture regarding a comprehensive egg marketing scheme—Validity of legislation dealing with egg marketing scheme—Agricultural Products Marketing Act, R.S.C. 1970, c. A-7—Farm Products Marketing Agencies Act, 1970-71-72 (Can.), c. 65—The Farm Products Marketing Act, R.S.O. 1970, c. 162—The British North America Act, 1867.
An agreement was entered into between the federal Minister of Agriculture and federal marketing agency and their provincial counterparts in all the provinces whereby the parties agreed to establish a comprehensive egg marketing scheme under the Farm Products Marketing Agencies Act, 1970-71-72 (Can.), c. 65. The programme involved federal and provincial marketing plans establishing quotas for export, interprovincial and intraprovincial trade. The Canadian Egg Marketing Agency was established and set overall quotas for each Province. The Agency could also impose levies or charges on the marketing of eggs by egg producers and these were to be collected on behalf of the Agency by the local egg board. In Ontario the Ontario Farm Products Marketing Board set individual production quotas based on the Province’s quota set by the federal and also prohibited the possession of laying hens by persons without a quota. By Order-in-Council of April 7, 1976, the Executive Council of Ontario referred to
[Page 1199]
the Court of Appeal for Ontario under The Constitutional Questions Act, R.S.O. 1970, c. 79, thirteen questions relating variously to the validity of certain provisions of the Agricultural Products Marketing Act, R.S.C. 1970, c. A-7, of the Farm Products Marketing Agencies Act, 1972 (Can.), c. 65, of The Farm Products Marketing Act, R.S.O. 1970, c. 162, and of a number of orders and regulations under these three statutes. The reference concerned the interaction of the federal and provincial legislation and of the agencies established thereunder in the regulation and marketing of eggs, the possession of laying hens and levies collected for various purposes. The Court of Appeal upheld the validity of the challenged provisions with Dubin J.A. dissenting only as to the validity of s. 2(2)(a) of the federal Agricultural Products Marketing Act and of s. 4(a) of the Ontario Egg Order, S.O.R. 72-243, promulgated under that Act. The questions and answers are set forth in the reasons of Laskin C.J.
Held: The appeal should be allowed in part.
The answers by the Court of Appeal to those questions submitted to it as to which this further appeal was taken are varied only as to the answer to question 1, i.e. as to whether ss. 2 and 3 of the Agricultural Products Marketing Act, R.S.C. 1970, c. A-7, are ultra vires, which is answered “No, as to s. 2(1); yes, as to s. 2(2)(a); no, as to s. 2(2)(b); and no, as to s. 3 in respect of s. 2(1) and s. 2(2)(b)”.
Per Laskin C.J. and Judson, Spence and Dickson JJ.: P.E.I. Potato Marketing Board v. H.B. Willis Inc., [1952] 2 S.C.R. 392, gave a constitutional method of escape from the prohibition of the Nova Scotia Inter-Delegation case, [1951] S.C.R. 31, which denied authority for delegation of legislative power between Parliament and a provincial legislature. Willis permits delegation of administrative authority to a provincial board to exercise like regulatory authority in an area of federal competence as it exercises in the provincial area. The challenge to the validity of s. 2(1) of the Agricultural Products Marketing Act accordingly fails.
[Page 1200]
With regard to s. 2(2) of that Act it is time that there was an end to making the validity of intraprovincial marketing schemes turn on fine distinctions between what is truly price fixing and what are adjustment levies when in both situations the thrust of the scheme is to provide for orderly marketing and to equalize the position and the returns of producers or vendors or both, by pooling production and controlling marketing. There are compelling reasons to set aside the doctrine in Crystal Dairy, [1933] A.C. 168, a case which has already been effectively overruled in respect of the validity of provincially authorized expenses or administration levies. Section 2(2)(a) of the Act is therefore invalid as ultra vires the Parliament of Canada. This result is not, however, catastrophic because it is left to the provincial legislatures to deal with price arrangements including provision for adjustment levies in the context of their valid legislation in relation to intraprovincial marketing. The power is where it should be in this respect.
Per Martland, Ritchie, Pigeon, Beetz and de Grandpré JJ.: Section 2(1) of the Agricultural Products Marketing Act (Canada) contemplates the delegation to a provincial marketing board of authority over interprovincial and export trade. It is clearly within the principle of the Willis case, [1952] 2 S.C.R. 392, and therefore intra vires, as is s. 3 in respect thereto. Section 2(2) provides for levies in respect of products in intraprovincial trade (s. 2(2)(a)) and in extraprovincial trade (s. 2(2)(b)). Sub-paragraph 2(2)(a) purports to authorize the granting to a provincial board or agency of the authority to impose and to use levies or charges in relation to the powers granted to such board under the laws of any province with respect to the marketing of any agricultural product locally within the province. Such levies are not taxes when they are not collected for purposes other than defraying expenses or effecting adjustment or redistribution amongst producers. It is proper to overrule what may be left of the judgment in Crystal Dairy. This might well be considered as the logical development of the decision in Crawford and Hillside Farm Dairy, [1960] S.C.R. 346. The net result of the scheme upheld in that case was an equalisation of returns among producers which gave them, in the end, the same monetary returns as adjustment levies would have yielded in a simpler manner. The courts will look through any scheme in order to strike down all attempts to do indirectly what cannot be done directly. If the complex scheme was valid and not just a colourable device this is proof enough that the direct method, the adjustment levies, are not unconstitutional as long as
[Page 1201]
they are confined to intraprovincial operations [as they were in A.G. Saskatchewan v. A.G. Canada, [1949] A.C. 110]. As adjustment levies are within provincial jurisdiction the federal legislation on the subject is invalid.
The Farm Products Marketing Agencies Act (Canada) is not invalid. However federal intrusion into local trade would be just as unconstitutional if done by buying and selling as if done by any other method, save in the case of operations by federal agencies acting for proper federal purposes.
As to the validity of the several sections of The Farm Products Marketing Act of Ontario, a legislature may delegate powers to an agency as much as it sees fit. Further as there is no reason to consider this Act as going beyond its professed intent the impugned sections are not invalid.
Questions 8 and 9 concern the validity of the egg producers quota regulations made under the authority of the Ontario Act. The control of production, whether agricultural or industrial, is prima facie a local matter, a matter of provincial jurisdiction. Egg farms, the kind of factories in which feed is converted into eggs and fowl, are local undertakings subject to provincial jurisdiction under s. 92(10) of the B.N.A. Act, unless they are considered “agriculture” in which case by virtue of s. 95 the jurisdiction is provincial subject to the overriding authority of Parliament. The Carnation case, [1968] S.C.R. 238, is however conclusive in favour of provincial jurisdiction over undertakings where primary agricultural products are transformed into other food products. It is a conclusion which cannot be different even if the whole production is going into extraprovincial trade. An operator cannot claim exemption from provincial control by electing to devote his entire output to extraprovincial trade and there is 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. In consequence a workable control scheme has to be effective with respect to all eggs irrespective of intended disposition. Egg farms are, like any other farms, local undertakings subject to provincial authority irrespective of the destination of their output and that legislative authority extends to the control of production as to quantity. This
[Page 1202]
does not imply any provincial control of extraprovincial trade. The provincial regulations in question were not aimed at such extraprovincial trade and in so far as it effects this trade it is only complementary to the federal regulations. This is perfectly legitimate, otherwise federal-provincial cooperative action in regulating a commodity in both intraprovincial and extraprovincial trade would be impossible. Provinces may not make use of their control over local undertakings to regulate extraprovincial marketing but this does not prevent the use of provincial control to complement federal regulation of interprovincial trade.
[P.E.I. Potato Marketing Board v. H.B. Willis Inc., [1952] 2 S.C.R. 392; Carnation Co. Ltd. v. Quebec Agricultural Marketing Board, [1968] S.C.R. 238 followed; Lower Mainland Dairy Products Sales Adjustment Committee v. Crystal Dairy Ltd., [1933] A.C. 168, 1 D.L.R. 82, [1932] 3 W.W.R. 639 overruled; Re: Quebec Magistrates’ Court, [1965] S.C.R. 772; Attorney General for Saskatchewan v. Attorney General for Canada, [1949] A.C. 110; Madden v. Nelson and Fort Shefford Railway Co., [1899] A.C. 626; Shannon et al. v. Lower Mainland Dairy Products Board, [1938] A.C. 708; Reference re Anti-Inflation Act, [1976] 2 S.C.R. 373; The King v. Eastern Terminal Elevator Co., [1925] S.C.R. 434; Jorgenson v. Attorney General of Canada, [1971] S.C.R. 725; C.N.R. v. Nor-Min Supplies Ltd., [1977] 1 S.C.R. 322; Reference re The Farm Products Marketing Act of Ontario, [1957] S.C.R. 198; Attorney General for Manitoba v. Manitoba Egg and Poultry Association et al., [1971] S.C.R. 689; Burns Foods Limited et al. v. Attorney General for Manitoba et al., [1975] 1 S.C.R. 494; Attorney General for Ontario et al. v. Attorney General of Canada et al., [1912] A.C. 571; Reference re Natural Products Marketing Act, [1937] A.C. 377; Coughlin v. Ontario Highway Transport Board, [1968] S.C.R. 569; Brant Dairy Co. v. Milk Marketing Commission of Ontario, [1973] S.C.R. 131; Attorney General of Nova Scotia v. Attorney General of Canada (Nova Scotia Inter-Delegation Case), [1951] S.C.R. 31; Reference re Regulations (Chemicals) under the War Measures Act, [1943] S.C.R. 1; Murphy v. C.P.R. Co. et al, [1958] S.C.R. 626; Caron v. The King, [1924] A.C. 999; Reference re Employment and Social Insurance Act, [1937] A.C. 355; Lawson v. Interior Tree Fruit and Vegetable Committee of Direction, [1931] S.C.R. 357; Ontario Boys’ Wear Ltd. v.
[Page 1203]
Advisory Committee, [1944] S.C.R. 349; Lower Mainland Dairy Products Board v. Turner’s Dairy Ltd., [1941] S.C.R. 573; Crawford and Hillside Farm Dairy Ltd. v. Attorney‑General of British Columbia, [1960] S.C.R. 346; Hill v. The Queen, [1977] 1 S.C.R. 827; Paquette v. The Queen, [1977] 2 S.C.R. 189; McNamara Construction (Western) Ltd. v. The Queen, [1977] 2 S.C.R. 654; Gold Seal Ltd. v. Dominion Express Co. (1921), 62 S.C.R. 424 referred to; Attorney-General for Ontario v. Reciprocal Insurers, [1924] A.C. 328 distinguished.]
APPEAL from a judgment of the Court of Appeal for Ontario[1] in the matter of a reference of certain questions under The Constitutional Questions Act, R.S.O. 1970, c. 79. Appeal allowed in part.
Herman Turkstra, Peter Hogg and Joseph Nadel, for Ontario Egg Producers and other interested parties.
R.W. Cosman, for interested Egg Producers.
Marcel Trudeau, Q.C., and Yves Sylvestre, for the Attorney General for Quebec.
Pierre Paradis and Gérald A. Beaudoin, Q.C., for l’Association des producteurs d’æufs québécois.
opposing the legislation
V.L. Freidin and J. McMurchy, for the Attorney General of Ontario and Ontario Farm Products Marketing Board.
T.B. Smith, Q.C., and D.M. Low, for the Attorney General of Canada.
François Lemieux and Scott McLean, for the Canadian Egg Marketing Agency.
J.J. Robinette, Q.C., and H.E. Harris, Q.C., for the Ontario Egg Producers Marketing Board.
Pierre Blain, Q.C., for la Fédération des producteurs d’æufs de consommation du Québec.
Martin E. Herschorn, for the Attorney General of Nova Scotia.
[Page 1204]
N.D. Shende and J.R. MacInnes, for the Attorney General of Manitoba.
Wm. Henkel, Q.C., for the Attorney General of Alberta.
supporting the legislation
The judgment of Laskin C.J. and Judson, Spence and Dickson JJ. was delivered by
THE CHIEF JUSTICE—By Order in Council of April 7, 1976, the Executive Council of Ontario referred to the Ontario Court of Appeal thirteen questions relating variously to the validity of certain provisions of the Agricultural Products Marketing Act, R.S.C. 1970, c. A-7, of the Farm Products Marketing Agencies Act, 1972 (Can.), c. 65, of The Farm Products Marketing Act, R.S.O. 1970, c. 162, as amended, and of a number of orders and regulations under these three statutes. The reference concerned the interaction of the federal and provincial legislation and of the agencies established thereunder in the regulation of the marketing of eggs in the intraprovincial, interprovincial and export trade in that product.
The five Judge Court of Appeal upheld the validity of the challenged provisions, with Dubin J.A. dissenting only as to the validity of s. 2(2)(a) of the federal Agricultural Products Marketing Act and of s. 4(a) of the Ontario Egg Order, S.O.R. 72-243 promulgated under the Act. The majority reasons were delivered by MacKinnon J.A. and concurring reasons, relating particularly to s. 2(2) of the Act, differing from those of the majority were delivered by Wilson J.A. The Court of Appeal found it unnecessary to answer three of the questions referred to it, namely questions 8, 11 (a) and 13.
The order of reference recites the considerations which moved the Government of Ontario to put the various questions to the Court of Appeal and they are as follows:
WHEREAS questions have arisen as to the authority of the Ontario Egg Producers Marketing Board to collect levies imposed on the marketing of eggs;
[Page 1205]
AND WHEREAS questions have arisen as to the validity of the imposition of the levies themselves;
AND WHEREAS questions have arisen as to the authority of the Ontario’ Egg Producers Marketing Board to impose quotas for the possession of fowl in Ontario and quotas for the production of eggs in Ontario;
AND WHEREAS it is thought fit to have the authority of the Ontario Egg Producers Marketing Board determined with more precision and as expeditiously as possible in regard to all the above matters by referring certain questions to the Court of Appeal for hearing and consideration.
The Honourable the Attorney General therefore recommends that pursuant to section 1 of the Constitutional Questions Act being Chapter 79 of the Revised Statutes of Ontario, 1970, there be referred to the Court of Appeal for hearing and consideration the questions hereinafter set forth:
…
Preceding these considerations in the order of reference was a narrative of various facts and measures relating to the regulatory schemes arising out of and established pursuant to the challenged legislation. Lengthy as the narrative is, it is relevant material for the consideration of the Court and I reproduce it in full:
…
“The number of eggs produced in Ontario during the period January 1, 1973 to August 31, 1975 which have been marketed intraprovincially, interprovincially and in export trade is as follows:
In 1973—151,688,580 dozen,
In 1974—148,770,120 dozen, and
In the period January 1, 1975—
August 31, 1975—94,700,040 dozen.
Levies have been imposed on the marketing of eggs by Ontario egg producers pursuant to two Acts of the Parliament of Canada, the Agricultural Products Marketing Act, R.S.C. 1970, Chapter A-7, and the Farm Products Marketing Agencies Act, 19-20-21, Eliz. II, Chapter 65.
AGRICULTURAL PRODUCTS MARKETING ACT, R.S.C. 1970, c. A-7
Pursuant to the Ontario Egg Order S.O.R./72-243, passed pursuant to the Agricultural Products Marketing Act, the Ontario Egg and Fowl Producers Marketing Board (now the Ontario Egg Producers Marketing Board) was authorized to make Orders fixing, imposing
[Page 1206]
and collecting levies or charges from persons engaged in the marketing of eggs.
The Ontario Egg Producers Marketing Board passed Orders imposing such levies as follows:
S.O.R./72-246
S.O.R./72-306
S.O.R./73-228
S.O.R./75-217
These Orders required egg producers to pay to the Ontario Egg Producers Marketing Board the amount of money specified therein for each dozen eggs marketed.
FARM PRODUCTS MARKETING AGENCIES ACT, 19-20-21, ELIZ. II, C. 65
An agreement was entered into on November 20th, 1972 between the Federal Minister of Agriculture, the National Farm Products Marketing Council, the Minister of Agriculture and Food for Ontario, the Ontario Farm Products Marketing Board, the Ontario Egg and Fowl Producers Marketing Board (now the Ontario Egg Producers Marketing Board) and their counterpart in all other provinces. The parties agreed to establish a comprehensive egg marketing programme under the Farm Products Marketing Agencies Act, 19-20-21, Eliz. II, Chapter 65.
The Farm Products Marketing Agencies Act, section 17 empowered the Governor in Council to establish an agency with powers relating to inter alia, eggs marketed in interprovincial and export trade.
The Canadian Egg Marketing Agency (hereinafter referred to as “CEMA”) was established on December 19th, 1972 pursuant to the Farm Products Marketing Agencies Act by the Canadian Egg Marketing Agency Proclamation, S.O.R./73-1.
The Farm Products Marketing Agencies Act, section 18(1)(c) provides:
“A proclamation establishing an agency shall set out the terms of any marketing plan that the agency is empowered to implement.”
The Farm Products Marketing Agencies Act, section 23(1)(b) provides that:
“Subject to the proclamation by which it is established and to any subsequent proclamation altering its
[Page 1207]
powers, an agency may implement a marketing plan the terms of which are set out in the proclamation establishing it...”
The Farm Products Marketing Agencies Act, section 2(e)(vi) provides that the marketing plan includes:
“The imposition and collection by the appropriate agency of levies or charges from persons engaged in the growing or production of the regulated product or the marketing thereof…”
Section 10 of the Canadian Egg Marketing Agency Proclamation, S.O.R./73-1 authorized CEMA, by order or regulation, to impose levies or charges upon persons engaged in the production of eggs or the marketing thereof. That section also provides that CEMA may, with the concurrence of a commodity board (which includes the Ontario Egg Producers Marketing Board) appoint that commodity board to collect on its behalf levies or charges imposed by any such order or regulations.
Levies have been imposed by CEMA as follows:
S.O.R./73-284 (Canada Egg Marketing Levies Order)
S.O.R./74-89 (Canada Egg Marketing Levies Order)
S.O.R./74-207 (Canada Interim Egg Levies Order)
S.O.R./75-173 (Canada Interim Egg Levies Order)
In addition, CEMA has imposed levies providing for the fixing and imposing of egg levies for the Agency’s purchasing programme and for the collecting of levies as follows:
S.O.R./74-208 (Canada Egg Purchasing Levies Order)
S.O.R./74-329 (Canada Egg Purchasing Levies Order)
S.O.R./74-393 (Canada Egg Purchasing Levies Order)
S.O.R./74-562 (Canada Egg Purchasing Levies Order)
S.O.R./74-644 (Canada Egg Purchasing Levies Order)
S.O.R./75-89 (Canada Egg Purchasing Levies Order)
S.O.R./75-174 (Canada Egg Purchasing Levies Order)
[Page 1208]
Pursuant to S.O.R./73-284 the Ontario Egg Producers Marketing Board was appointed to collect the levies imposed by CEMA.
Pursuant to Ontario Regulation 595/72, section 10, passed pursuant to The Farm Products Marketing Act of Ontario, R.S.O. 1970, c. 162 the Ontario Egg Producers Marketing Board is required to collect the levies imposed by CEMA.
In addition Regulation S.O.R./73-274 was passed and deals with the obtaining of information by CEMA from egg producers engaged in the production of eggs for, or the marketing of eggs in interprovincial or export trade; and S.O.R./73-286 was passed and dealt with the licensing of persons engaged in the marketing of eggs in interprovincial or export trade.
To date certain Ontario egg producers have not complied with the legislation in regard to levies, the result of which is that $392,124.50 of levies which should have been received by the Ontario Egg Producers Marketing Board have not been received. In addition certain egg producers have commenced legal action challenging the validity of such levies and the Statement of Claim of one such action is appended hereto.
QUOTAS FOR THE POSSESSION OF FOWL AND PRODUCTION OF EGGS
The Ontario Egg and Fowl Producers Marketing Board was continued and renamed the Ontario Egg Producers Marketing Board by Ontario Regulation 593/72 passed pursuant to The Farm Products Marketing Act of Ontario.
By Ontario Regulation 594/72 passed pursuant to The Farm Products Marketing Act of Ontario the Farm Products Marketing Board provided for the Ontario Egg Producers Marketing Board to exercise certain powers.
By S.O. 1975, Chapter 6, the Farm Products Marketing Act of Ontario was amended to provide for quotas for, inter alia, the possession of fowl and the production of eggs within Ontario.
By Ontario Regulation 434/75 the Farm Products Marketing Board of Ontario authorized the Ontario Egg Producers Marketing Board to exercise powers in relation to such quotas.
The Ontario Egg Producers marketing Board has, pursuant to Ontario Regulation 434/75, passed Regulations fixing and allotting quotas for the possession of fowl and the production of eggs as follows:
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Regulation No. 2-75, dated June 5, 1975
Regulation No. 3-75, dated June 5, 1975
Regulation No. 5-75, dated June 11, 1975
Regulation No. 6-75, dated June 11, 1975
Regulation No. 7-75, dated June 25, 1975…”
Those opposing the validity of the legislation, in bringing an appeal to this Court, moved for the usual directions as to service of notice of the constitutional questions on the Attorney‑General of Canada and on the Attorneys-General of the Provinces and as to interventions by them and by other interested persons and as to other related matters. The order for directions made on April 4, 1977 contained a reduced number of questions for the consideration of this Court and it will be useful to contrast these questions with those referred to the Ontario Court of Appeal (and showing the answers given by that Court) in the following parallel columns:
Questions Referred
Questions on Appeal Here
1. Are sections 2 and 3 of the Agricultural Products Marketing Act, R.S.C. 1970, Chapter A-7, ultra vires the Parliament of Canada in whole or in part and if so, in what respect and to what extent?
Answer 1. No
1. Are sections 2 and 3 of the Agricultural Products Marketing Act, R.S.C. 1970, Chapter A-7, ultra vires the Parliament of Canada in whole or in part and if so, in what respect and to what extent?
2. Are S.O.R./72-243; (Ontario Egg Order) S.O.R./72-246, S.O.R./72-306, S.O.R./73-228 and S.O.R./75-217 (Ontario Egg Marketing Levies Orders) ultra vires the enabling legislation, the Agricultural Products Marketing Act, R.S.C. 1970, Chapter A-7, in whole or in part and if so, in what respect and to what extent?
Answer 2. No
2. Are S.O.R./72-243; (Ontario Egg Order) S.O.R./72-246, S.O.R./72-306, S.O.R./73-228 and S.O.R./75-217 (Ontario Egg Marketing Levies Orders) ultra vires the enabling legislation, the Agricultural Products Marketing Act, R.S.C. 1970, Chapter A‑7, in whole or in part and if so, in what respect and to what extent?
3. Do sections 2(e)(vi), 18(1)(c) and 23(1)(b) and 23(1)(g) of the Farm Products Marketing Agencies Act, 19‑20-21, Eliz. II, Chapter 65, authorize the imposition and collection of levies or charges?
Answer 3. Yes
3. Is the Farm Products Marketing Agencies Act, 19-20-21, Eliz. II, Chapter 65, and in particular
(a) Sections 2(e)(vi), 18 and 23 and
(b) Sections 6, 7, 17 and 32
ultra vires the Parliament of Canada in whole or in part and if so, in what respect and to what extent?
4. Is the Farm Products Marketing Agencies Act, 19-20-21, Eliz. II, Chapter 65, and in particular
(a) Sections 2(e)(vi), 18 and 23 and
4. (a) Is S.O.R./73-1 (Canadian Egg Marketing Agency Proclamation) ultra vires the enabling legislation the Farm Products Marketing Agencies Act,
[Page 1210]
(b) Sections 6, 7, 17 and 32
ultra vires the Parliament of Canada in whole or in part, and if so, in what respect and to what extent?
Answer 4. No
19-20-21, Eliz. II, Chapter 65, in whole or in part and if so, in what respect and to what extent?
(b) Is S.O.R./73-1 section 10 ultra vires the enabling legislation the Farm Products Marketing Agencies Act, 19‑20-21, Eliz. II, Chapter 65, in whole or in part and if so, in what respect and to what extent?
5. (a) Is S.O.R./73-1 (Canadian Egg Marketing Agency Proclamation) ultra vires the enabling legislation the Farm Products Marketing Agencies Act, 19‑20-21, Eliz. II, Chapter 65, in whole or in part and if so, in what respect and to what extent?
Answer 5. (a) No
5. (a) Are S.O.R./73-284 (Canada Egg Marketing Levies Order), S.O.R./74-89 (Canada Egg Marketing Levies Order), S.O.R./74-207 (Canada Interim Egg Levies Order), S.O.R./75-173 (Canada Interim Egg Levies Order) ultra vires the enabling legislation, The Farm Products Marketing Agencies Proclamation, in whole or in part, and if so, in what respect and to what extent?
(b) Is S.O.R./73-1 section 10 ultra vires the enabling legislation the Farm Products Marketing Agencies Act, 19‑20-21, Eliz. II, Chapter 65, in whole or in part and if so, in what respect and to what extent?
Answer 5. (b) No
(b) Are S.O.R./74-208 (Canada Egg Purchasing Levies Order), S.O.R./74‑329 (Canada Egg Purchasing Levies Order), S.O.R./-74-393 (Canada Egg Purchasing Levies Order), S.O.R./74-562 (Canada Egg Purchasing Levies Order), S.O.R./74-644 (Canada Egg Purchasing Levies Order), S.O.R./75-89 (Canada Egg Purchasing Levies Order) and S.O.R./75-174 (Canada Egg Purchasing Levies Order) ultra vires the enabling legislation, the Farm Products Marketing Agencies Proclamation, in whole or in part, and if so, in what respect and to what extent?
6. (a) Are S.O.R./73-284 (Canada Egg Marketing Levies Order), S.O.R./74-89 (Canada Egg Marketing Levies Order), S.O.R./74-207 (Canada Interim Egg Levies Order), S.O.R./75-173 (Canada Interim Egg Levies Order) ultra vires the enabling legislation, The Farm Products Marketing Agency Proclamation, in whole or in part, and if so, in what respect and to what extent?
Answer 6. (a) No
(b) Are S.O.R./74-208 (Canada Egg Purchasing Levies Order),
6. Is S.O.R./73-286 (Canadian Egg Licensing Regulations) ultra vires the enabling legislation, The Farm Products Marketing Agencies Act and the Canadian Egg Marketing Proclamation, in whole or in part, and if so, in what respect and to what extent?
[Page 1211]
S.O.R./74-329 (Canada Egg Purchasing Levies Order), S.O.R./-74-393 (Canada Egg Purchasing Levies Order), S.O.R./74-562 (Canada Egg Purchasing Levies Order), S.O.R./74-644 (Canada Egg Purchasing Levies Order), S.O.R./75-89 (Canada Egg Purchasing Levies Order), and S.O.R./75-174 (Canada Egg Purchasing Levies Order) ultra vires the enabling legislation, The Farm Products Marketing Agency Proclamation, in whole or in part, and if so, in what respect and to what extent? Answer 6. (b) No
7. Is S.O.R./73-286 (Canadian Egg Licensing Regulations) ultra vires the enabling legislation, The Farm Products Marketing Agencies Act and the Canadian Egg Marketing Proclamation, in whole or in part, and if so, in what respect and to what extent?
Answer 7. No
7. Are sections 4, 5, 6, 8, 9, 10, 15(a) and 22 of The Farm Products Marketing Act of Ontario and amendments thereto ultra vires the Legislature of Ontario in whole or in part, and if so, in what respect and to what extent?
8. Is S.O.R./73-274 (Canadian Egg Information Regulations) ultra vires the enabling legislation, Farm Products Marketing Agencies Act, 19-20-21, Eliz. II, Chapter 65, in whole or in part and if so, in what respect and to what extent?
Answer 8. Not answered
8. Is Ontario Regulation 595/72 ultra vires the legislative power of Ontario in whole or in part and if so, in what respect and to what extent?
9. Are sections 4, 5, 6, 8, 9, 10, 15(a) and 22 of The Farm Products Marketing Act of Ontario and amendments thereto ultra vires the Legislature of Ontario in whole or in part, and if so, in what respect and to what extent?
Answer 9. No
9. Is section 21a of The Farm Products Marketing Act of Ontario ultra vires the Legislature of Ontario in whole or in part and if so, in what respect and to what extent?
10. Is Ontario Regulation 595/72 ultra vires the legislative power of Ontario in whole or in part and if so, in what respect and to what extent?
Answer 10. No
10. Are Regulations 2, 3, 5, 6 and 7 for the year 1975 passed by the Ontario Egg Producers Marketing Board ultra vires the enabling legislation, The Farm Products Marketing Act of Ontario, in whole or in part, and if so, in what respect and to what extent?
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11. (a) Is Ontario Regulation 595/72 ultra vires the enabling legislation, The Farm Products Marketing Act, R.S.O. 1970, Chapter 162 in whole or in part, and if so, in what respect and to what extent?
Answer 11. (a) Not answered
(b) Do Ontario Regulation 315, R.R.O. 1970, Ontario Regulation 316, R.R.O. 1970, Ontario Regulations 46/71, 184/72, 593/72 and 594/72, 239/73, 243/73, 183/74, 184/74, 764/74 or any of them affect the imposition and collection of levies in whole or in part and if so, in what respect and to what extent?
Answer 11. (b) No
12. Is section 21a of The Farm Products Marketing Act of Ontario ultra vires the Legislature of Ontario in whole or in part and if so, in what respect and to what extent?
Answer 12. No
13. Are Regulations 2, 3, 5, 6 and 7 for the year 1975 passed by the Ontario Egg Producers Marketing Board ultra vires the enabling legislation, The Farm Products Marketing Act of Ontario, in whole or in part, and if so, in what respect and to what extent?
Answer 13. Not answered
It will be apparent from the foregoing lists of questions that the present appeal excludes any challenge to the answers given below to questions 3, 8 and 11.
II
Counsel involved in the reference before the Ontario Court of Appeal agreed that the Case on Appeal filed in this Court should include the order of reference, the order for directions respecting the proceedings in this Court and two documents entitled respectively “Background Information Submitted by the Attorney-General of Ontario” (a document of about 15 pages) and “Memorandum of Information Submitted by Persons Opposed to the Validity of the Legislation” (a document of about 125 pages). Supplementary material was filed jointly by the Attorney-General of Ontario and the Ontario Farm Products Marketing Board, and included in this material was a 1972 Report (The Ross Report) of a Royal Commission on the
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Egg Industry in Ontario.
The background information supplied by the Attorney-General of Ontario was accepted by the Canadian Egg Marketing Agency and by the Ontario Egg Producers Marketing Board, who were separately represented, as well as by the Attorney-General of Ontario and the Ontario Farm Products Marketing Board, who were jointly represented—all of whom supported the validity of the legislation, orders and regulations involved in this Reference—as a statement of the facts and considerations against which the issues of validity could and should be determined. It was also referred to for the same purpose by the challenging appellants but the extensive additional material provided by the appellants was not viewed with reciprocal hospitality by the proponents of the legislation, orders and regulations. They alleged it to be irrelevant to the questions at issue, but in so far as it puts a different interpretation on the same basic facts—those reflected in the background memorandum of the Attorney-General of Ontario—it represents nothing more fearsome than argument which must be assessed for its relevancy and cogency in the same way as that offered by the proponents, whether in their factums or in oral submissions to the Court. There are in the appellants’ material statements of information by three Ontario egg producers referring to their experiences under the marketing plans and the adverse effect upon them of the system of levies and quotas. Other parts of the material consist, as counsel for those in opposition to the legislation say, of “information… obtained from government agency and board sources and in part from the discovery of documents in one levy action against the Ontario Board”. To some extent it is directed to the effect of the marketing system as bearing on the Constitutional questions before this Court. However, I find no such factual differences in the appellants’ memorandum of information as to put this Court to a choice that would influence the result to be reached on the questions that must be answered.
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An examination of the material in the Case on Appeal and of the supplementary material, and of the statutes, orders and regulations to which this material is related gives the following picture of the interlocking scheme of control of egg marketing, both as to price and supply, established under federal and provincial authority.
The egg market in Canada and in the Provinces is a strictly regulated market, involving control of prices, the fixing of producing and marketing quotas, the imposition of several classes of levies upon producers and a surplus (over quota) egg removal programme through which eggs surplus to the table market are disposed of mainly to egg processors, although some may be redirected to the table market. This control programme is based on the table market, that is on the retail purchase of fresh eggs for consumption, representing in 1975 (according to the material before this Court) 92 per cent of eggs in the market, the other 8 per cent representing processing eggs used in the manufactured products market.
The main control agencies, in respect of the present case, are the Canadian Egg Marketing Agency established under s. 17 of the Farm Products Marketing Agencies Act, 1972 (Can.), c. 65, hereinafter referred to as CEMA, and the Ontario Egg Producers Marketing Board, established by Ontario Regulation 593/72 (as a continuation of a differently named board) under The Farm Products Marketing Act, R.S.O. 1970, c. 162, as amended,, hereinafter referred to as the Ontario Egg Board. CEMA was born of a proclamation of December 19, 1972, S.O.R./73-1, which followed upon an agreement between Canada and all the Provinces, and the marketing agencies of the parties, for the establishment of a comprehensive plan to regulate the marketing of eggs in Canada. Schedules to the agreement set out the terms of the proposed plan, involving the integration of federal and provincial prescriptions, and including the scheme of organization and powers of the
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contemplated CEMA, as later established by S.O.R./73-1.
The control programme envisaged identical quotas for producers, whether in intraprovincial trade or in the interprovincial or export market, fixed by the national and provincial agencies in relation to an assigned egg production to each of the Provinces. Section 3 of the CEMA proclamation shows the dozen quantities and relative percentages assigned to each Province in the following table:
3. …
TABLE
Column I
Column II
Column III
1.
British Columbia
57,250,000
12.055
per cent
2.
Alberta
41,344,000
8.704
”
3.
Saskatchewan
22,611,000
4.760
”
4.
Manitoba
54,189,000
11.408
”
5.
Ontario
181,267,000
38.161
”
6.
Quebec
78,647,000
16.556
”
7.
New Brunswick
8,683,000
1.828
”
8.
Nova Scotia
19,504,000
4.106
”
9.
Prince Edward Island
3,028,000
0.637
”
10.
Newfoundland
8,477,000
1.785
”
The authority for this division in the CEMA proclamation is s. 24 of the federal Farm Products Marketing Agencies Act, reading as follows:
24. A marketing plan to the extent that it allocates any production or marketing quota to any area of Canada, shall allocate that quota on the basis of the production from that area in relation to the total production of Canada over a period of five years immediately preceding the effective date of the marketing plan. In allocating additional quotas for anticipated growth of market demand, the marketing agency shall consider the principle of comparative advantage of production.
The Court was told by counsel for the appellants that the percentages were modified in June, 1976 by S.O.R./76-371 but the modifications do not, of course, affect the constitutional issues that are before the Court. I should note that the production and percentage figure for Ontario, shown in the Table reproduced above, was prescribed by
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Ontario Regulation 595/72 of December 28, 1972, made under The Ontario Farm Products Marketing Act, and in furtherance of the dovetailing Ontario Egg Producers’ Marketing Plan established by Ontario Regulation 593/72 of November 22, 1972, also made under The Ontario Farm Products Marketing Act.
In short, the overall scheme was to assign to each Province a share of the national market and to relate the quotas of producers in each Province to the particular share. Ontario went further by placing all laying hens on a quota basis and prohibiting possession of laying hens by persons without a quota. This was done by Board Regulation 2-75 of June 5, 1975, which was authorized by Ontario Regulation 434/75 of May 8, 1975, which in turn rested on the authority of s. 21a of The Farm Products Marketing Act, enacted by 1975 (Ont.), c. 6. The appellants take an objection to the Regulation as embracing the possession of laying hens whose production is solely for the interprovincial or export trade and, beyond this, attack the validity of s. 21a. The attack on the section is the subject of question 9 herein.
The material before the Court states that the Ontario quota system above-mentioned does not apply to persons who possess