In Re Companies

In Re Companies
Collection
Supreme Court Judgments
Date
1913-10-14
Report
(1913) 48 SCR 331
Judges
Fitzpatrick, Charles; Davies, Louis Henry; Idington, John; Duff, Lyman Poore; Anglin, Francis Alexander; Brodeur, Louis-Philippe
On appeal from
Canada
Subjects
Constitutional law
Decision Content
Supreme Court of Canada
In Re Companies, (1913) 48 S.C.R. 331
Date: 1913-10-14
In the matter of the Incorporation of Companies in Canada.
1913: February 24-28; 1913: October 14.
Present: Sir Charles Fitzpatrick C.J. and Davies, Idington, Duff, Anglin and Brodeur JJ.
REFERENCE BY THE GOVERNOR GENERAL IN COUNCIL.
Constitutional law — Incorporation of companies — “Provincial objects”—Limitation—Doing business beyond the province—Insurance company—“Insurance Act, 1910”; 9 & 10 Edw. VII. c. 32, s. 3, s.-s. 3—Enlargement of company’s powers—Federal company—Provincial licence—Trading companies.
By sub-sec. 11, sec. 92 of “The British North America Act, 1867,” the legislature of any Province in Canada has exclusive jurisdiction for “The Incorporation of Companies with Provincial Objects.”
Held, per Fitzpatrick C.J. and Davies J., that the limitation defined in the expression “Provincial Objects” is territorial and also has regard to the character of the powers which may be conferred on companies locally incorporated.
Held, per Idington, Anglin and Brodeur JJ., that such limitation is not territorial but has regard to the character of the powers only.
Per Duff J.—Provincial objects means “objects” which are “provincial” in reference to the incorporating province. Whether the “objects” of a particular company as defined by its constitution are or are not “provincial” in this sense is a question to be determined on the facts of each particular case substantially as a question of fact.
Held, per Fitzpatrick C.J. and Davies J., that a company incorporated by a Provincial legislature has no power or capacity to do business outside of the limits of the incorporating Province but it may contract with parties residing outside those limits as to matters ancillary to the exercise of its powers.
Per Idington and Brodeur JJ.—Such company has, inherently, unless prohibited by its charter, the capacity to carry on the business for which it was created, in any foreign state or province whose laws permit it to do so.
Per Duff J.—A provincial company may conduct its operations outside the limits of the Province creating it so long as its business as a whole remains provincial with reference to its province of origin.
Per Anglin J.—Such a company has, inherently, unless prohibited by its charter, the capacity to accept the authorization of any foreign state or province to carry on, within its territory, the business for which it was created.
Held, per Fitzpatrick C.J. and Davies J., that a corporation constituted by a provincial legislature with power to carry on a fire insurance business with no express limitation as to locality has no power or capacity to make and execute contracts for insurance outside of the incorporating province or for insuring property situate outside thereof.,
Per Idington, Anglin and Brodeur JJ.—Such, a company has power to insure property situate within or without the incorporating province and to make contracts within or without the same to effect any such insurance. In respect to all such contracts it is not material whether the owner of the property insured is or is not a citizen or resident of the incorporating Province.
Per Duff J.—It is not necessarily incompatible with the provincial character of the “objects” of a provincial insurance company that it should have power to enter into outside the province contracts insuring property outside the province.
Held, per Fitzpatrick C.J. and Davies J.—A provincial fire insurance company cannot make contracts and insure property throughout Canada by availing itself of the provisions of sec. 3, sub-sec. 3, of 9 & 10 Edw. VII. ch. 32 (“The Insurance Act, 1910”).
Per Fitzpatrick C.J. and Davies J.—That such enactment is ultra vires so far as provincial companies are affected.
Per Brodeur J.—Such enactment is ultra vires of Parliament.
Per Idington J.—Part of said sub-section may be intra vires, but the last part providing for a Dominion licence to local companies is not.
Per Anglin J.—The said enactment is ultra vires except in so far as it deals with companies incorporated by or under Acts of the legislature of the late Province of Canada.
Held, that the powers of a company incorporated by a provincial legislature cannot be enlarged either as to locality or objects, by the Dominion Parliament nor by the legislature of another Province.
Held, per Fitzpatrick C.J. and Davies J.—The legislature of a province has no power to prohibit companies incorporated by the Parliament of Canada from carrying on business within the province without obtaining a licence so to do from the provincial authorities and paying fees therefor unless such licence is imposed in exercise of the taxing power of the province. And only in the same way can the legislature restrict a company incorporated for the purpose of trading throughout the Dominion in the exercise of its special trading powers or limit the exercise of such powers within the province. Brodeur J. contra.
Per Idington J.—A company incorporated by the Dominion Parliament in carrying out any of the enumerated powers contained in sec. 91 cannot be prohibited by a provincial legislature from carrying on business, or restricted in the exercise of its powers, within the province though subject to exercise of the exclusive jurisdiction to make laws in relation to “direct taxation within the province.” But a company incorporated under the general powers of Parliament must conform to all the duly enacted laws of a province in which it seeks to do business.
Per Duff J.—A company incorporated under the residuary legislative power of the Dominion is not in any province where it carries on business subject to the legislative authority of the province in relation to matters falling within the subject “incorporation of companies”; but as regards all other matters falling within the enumerated subjects of section 92 it is subject to such legislative jurisdiction just as a natural person or an unincorporated association would be in like circumstances. The enactments of sections 139, 152, 167 and 168 of the British Columbia “Companies Act” are valid.
Per Anglin J.—The provincial legislature may impose a licence and exact fees from any Dominion company if the object be the raising of revenue, or obtaining of information, “for provincial, local or municipal purposes” but not if it is to require the company to obtain provincial sanction or authority for the exercise of its corporate powers. And the legislature cannot restrict a company incorporated for the purpose of trading throughout the Dominion in the exercise of its special powers nor limit the exercise of such powers within the province, nor subject such company to legislation limiting the nature or kind of business which corporations not incorporated by it may carry on or the powers which they may exercise within the province.
REFERENCE by the Governor General in Council of questions respecting the incorporation of companies to the Supreme Court of Canada for hearing and consideration.
The questions so referred to the court were the following:—
In the matter of a Reference by His Excellency the Governor General in Council to the Supreme Court of Canada pursuant to section 60 of the “Supreme Court Act” of certain questions for hearing and consideration as to the respective legislative powers under the “British North America Acts” of the Dominion of Canada and the Provinces of Canada in relation to the incorporation of companies and as to the other particulars therein stated.
A report of the Committee of the Privy Council, approved by His Excellency the Governor General on the 9th May, 1910.
“The Committee of the Privy Council have had under consideration a report, dated 2nd May, 1910, from the Minister of Justice, stating that important questions of law have arisen as to the respective legislative powers under the “British North America Acts” of the Dominion of Canada and the Provinces of Canada in relation to the incorporation of companies and as to the other particulars hereinafter stated, and it is expedient that these questions should be judicially determined.
“The Minister accordingly recommends that under the authority of section 60 of the “Supreme Court Act,” Revised Statutes of Canada, 1906, chapter 139, the following questions be referred by Your Excellency in Council to the Supreme Court of Canada for hearing and consideration, namely:—
“1. What limitation exists under the ‘British North America Act, 1867,’ upon the power of the provincial legislatures to incorporate companies?
“What is the meaning of the expression ‘with provincial objects’ in section 92, article 11, of the said Act? Is the limitation thereby defined territorial, or does it have regard to the character of the powers which may be conferred upon companies locally incorporated, or what otherwise is the intention and effect of the said limitation?
“2. Has a company incorporated by a provincial legislature under the powers conferred in that behalf by section 92, article 11, of the ‘British North America Act, 1867,’ power or capacity to do business outside of the limits of the incorporating province? If so, to what extent and for what purpose?
“Has a company incorporated by a provincial legislature for the purpose, for example, of buying and selling or grinding grain, the power or capacity, by virtue of such provincial incorporation, to buy or sell or grind grain outside of the incorporating province?
“3. Has a corporation constituted by a provincial legislature with power to carry on a fire insurance business, there being no stated limitation as to the locality within which the business may be carried on, power or capacity to make and execute contracts—
“(a) within the incorporating province insuring property outside of the province;
“(b) outside of the incorporating province insuring property within the province;
“(c) outside of the incorporating province insuring property outside of the province?
“Has such a corporation power or capacity to insure property situate in a foreign country, or to make an insurance contract within a foreign country?
“Do the answers to the foregoing inquiries, or any and which of them, depend upon whether or not the owner of the property or risk insured is a citizen or resident of the incorporating province?
“4. If in any or all of the above mentioned cases, (a), (b) and (c), the answer be negative, would the corporation have throughout Canada the power or capacity mentioned in any and which of the said cases, on availing itself of the ‘Insurance Act,’ Revised Statutes of Canada, 1906, chapter 34, as provided by section 4, sub-section 3?
“Is the said enactment, Revised Statutes of Canada, 1906, chapter 34, section 4, sub-section 3, intra vires of the Parliament of Canada?
“5. Can the powers of a company incorporated by a provincial legislature be enlarged, and to what extent, either as to locality or objects by
“(a) the Dominion Parliament?
“(b) the legislature of another province?
“6. Has the legislature of a province power to prohibit companies incorporated by the Parliament of Canada from carrying on business within the province unless or until the companies obtain a licence so to do from the government of the province, or other local authority constituted by the legislature, if fees are required to be paid upon the issue of such licences?
“For examples of such provincial legislation, see Ontario, 63 Vict. ch. 24; New Brunswick, Cons. Sts., 1903, ch. 18; British Columbia, 5 Edw. VII. ch. 11.
“7. Is it competent to a provincial legislature to restrict a company incorporated by the Parliament of Canada for the purpose of trading throughout the whole Dominion in the exercise of the special trading powers so conferred or to limit the exercise of such powers within the province?
“Is such a Dominion trading company subject to or governed by the legislation of a province in which it carries out or proposes to carry out its trading powers limiting the nature or kinds of business which corporations not incorporated by the legislature of the province may carry on, or the powers which they may exercise within the province, of imposing conditions which are to be observed or complied with by such corporations before they can engage in business within the province?
“Can such a company so incorporated by the Parliament of Canada be otherwise restricted in the exercise of its corporate powers or capacity, and how, and in what respect by provincial legislation?
“The Committee submit the same for approval.
“F. K. Bennetts,
“Asst. Clerk of the Privy Council.”
P.C. 1069.
A report of the Committee of the Privy Council, approved by His Excellency the Governor General on the 30th May, 1910.
“The Committee of the Privy Council, on the recommendation of the Minister of Justice, advise that the order in Council of the 9th May, 1910, referring certain questions to the Supreme Court of Canada for hearing and consideration, be amended by substituting for the fourth of the said questions the following:—
“4. If in any or all of the above mentioned cases, (a), (b) and (c), the answer be negative, would the corporation have throughout Canada the power or capacity mentioned in any and which of the said cases on availing itself of the ‘Insurance Act, 1910,’ 9 and 10 Edw. VII. ch. 32, sec. 3, sub-sec. 3?
“Is the said enactment, the ‘Insurance Act, 1910,’ ch. 32, sec. 23, sub-sec. 3, intra vires of the Parliament of Canada?
“F. K. Bennetts,
“Asst. Clerk of the Privy Council.”
A report of the Committee of the Privy Council, approved by His Excellency the Governor General on the 26th September, 1910.
“On a memorandum dated 23rd September, 1910, from the Minister of Justice, submitting — with reference to the Order in Council of 30th May, 1910, amending an Order in Council of 9th May, 1910, referring certain questions to the Supreme Court of Canada for hearing and consideration — that a clerical error has occurred in the concluding sentence of the question stated by the said Order in Council of 30th May, 1910, in that section 3 is erroneously described as section 23. The said concluding sentence should read as follows: ‘Is the said enactment, the “Insurance Act, 1910,” ch. 32, sec. 3, sub-sec. 3, intra vires of the Parliament of Canada?’
“The Minister, therefore, recommends that the said Order in Council of 30th May, 1910, be amended accordingly.”
The Committee submit the same for approval.
F. K. Bennetts,
Asst. Clerk of the Privy Council.
The following counsel appeared.
Newcombe K.C. and Atwater K.C. for the Attorney General of Canada.
Nesbitt K.C., Lafleur K.C., Aimé Geoffrion K.C. and Christopher C. Robinson for the Provinces of Ontario, Quebec, Nova Scotia, New Brunswick, Prince Edward Island and Manitoba.
S. B. Woods K.C. for Alberta and Saskatchewan.
Chrysler K.C. for the Manufacturers’ Association of Canada.
ANSWERS OF THE JUDGES.
The Chief Justice.—The first two questions in this reference can be dealt with together, and this has been done by counsel in argument.
To those two questions my general answer is: The words “Provincial objects” in section 92 (11) are intended to be restrictive; they have reference to the matters over which legislative jurisdiction is conferred by that section, i.e., matters “which are, from a provincial point of view, of a local or private nature” (Lord Watson, Prohibition Case[1]).
The Parliament of Canada can alone constitute a corporation with capacity to carry on its business in more than one province. Companies incorporated by local legislatures are limited in their operations to the territorial area over which the incorporating legislature has jurisdiction. Comity cannot enlarge the capacity of a company where that capacity is deficient by reason of the limitations of its charter or of the constituting power. Comity, whatever may be the legal meaning of the word in international relations, cannot operate between the provinces so as to affect the distribution of legislative power between the Dominion and the provinces under the “British North America Act.”
This does not imply that a provincial company may not, in the transaction of its business, contract with parties or corporations residing outside of the province in matters which are ancillary to the exercise of its substantive powers. I use the terms “substantive” and “ancillary” as descriptive of the two classes of powers inherent in the company, as these are used in the judgment of the Judicial Committee in City of Toronto v. Canadian Pacific Railway Co.[2].
It was contended on behalf of the provinces that a distinction must be drawn between trading companies or companies which simply buy or sell commodities, and companies such as manufacturing industries, the incorporation of which contemplates a physical existence within the province; but if the view above expressed as to the capacity of the provincial company is correct, no distinction can be made. In both cases, the substantive functions of the company must be confined to the incorporating province; but as incidental or ancillary thereto such provincial company would not be precluded from entering into contracts with persons or corporations beyond the province, or suing or being sued in another province.
The answer to the third and fourth inquiries respecting insurance companies is covered by the opinions expressed by me in the Ottawa Fire Insurance Co. v. Canadian Pacific Railway Co.[3].
The Parliament of Canada alone can constitute a corporation with powers to carry on its business throughout the Dominion; Colonial Building Co. v. Attorney-General of Quebec[4]; and two or more
provinces by joint action, whether by comity or otherwise, cannot extend the powers of a provincial corporation so as to cover the field assigned by the “British North America Act” to the Dominion.
Question 5. Answer: Distinguishing between comity and capacity it follows from the view above expressed of the limited capacity which the province can confer that neither another province nor the Dominion can enlarge by consent or comity the capacity which a company has received from the incorporating province.
Questions 6 and 7. Answer: The right of the province to restrict the operations of the Dominion companies by the imposition of a licence fee was based upon the decisions of Bank of Toronto v. Lambe[5]; Brewers’ and Maltsters’ Association v. Attorney-General for Ontario[6], and the Manitoba Licence Holders’ Case[7], and these cases are undoubtedly authority for the exercise of the licensing power where the licence is a bonâ fide exercise of the taxing power of the province; but it was clearly established by the case of La Cie. Hydraulique de St. François v. Continental Heat and Light Co.[8], that a province cannot exclude a Dominion company from its territory and it cannot do indirectly what it is precluded from doing directly, and to require a licence to be obtained not for revenue purposes, but in reality to shut out the operations of such corporation, is not within the power of the provincial Parliament. The province might well require that foreign corporations should be registered and file evidence of their corporate powers, names of officers and other details respecting the internal affairs of the company for registration purposes, and impose penalties for noncompliance with such legislation by way of fine; but such legitimate exercise of its powers is quite a different thing from legislation which, under the disguise of a licence requirement, is intended to prevent, or has the effect of preventing, the operation of foreign companies within the territory of the province.
Davies J. — This reference for the opinion of the judges of this court on the questions submitted involves a consideration and determination of the meaning of Canada’s Constitutional Act and especially of sub-sec. 11 of sec. 92, “The Incorporation of Companies with Provincial Objects.” We are asked whether there is any, and if any, what limitation expressed in this sub-section and as to the meaning of the words “provincial objects” together with a number of subsidiary questions to which I will later refer. The vital and substantial question, however, before us is as to the meaning of the words “with provincial objects.” Is it necessarily a limitation? If so, is the limitation a territorial and provincial one or is it a limitation of a legislative character only covering all such subject-matters as are assigned in sec. 92 to the exclusive jurisdiction of the provincial legislatures but without regard to area?
Among the “classes of subjects” assigned to the exclusive jurisdiction of the Parliament of Canada “the incorporation of companies” is not expressly mentioned except in sub-sec. 15, “Banking, Incorporation of Banks, and the Issue of Paper Money.” It is not, however, denied that the Parliament of Canada has under the residuum of power assigned to it the power to incorporate companies to carry on throughout Canada the objects for which they are incorporated. If any possible doubt at any time existed on the point after the decision in the case of Citizens Ins. Co. v. Parsons[9], it seems to have been set at rest by the judgment of the Judicial Committee delivered by Lord Chancellor Loreburn in the case of Attorney-General of Ontario v. Attorney-General for Canada[10]. In dealing with cases where the text of what he calls a completely self-governing constitution founded upon a written organic instrument such as the “British North America Act” says nothing expressly, he says, p. 583:—
It is not to be (presumed that the constitution withholds the powers altogether. On the contrary it is to be taken for granted that the power is bestowed in some quarter unless it be extraneous to the statute itself (as for example a power to make laws for some part of His Majesty’s dominions outside of Canada) or otherwise is clearly repugnant to it’s sense. For whatever belongs to self government in Canada belongs to the Dominion or the provinces within the limits of the “British North America Act.”
The respective powers of the Dominion Parliament and the provincial legislature to incorporate companies has received some consideration by the Judicial Committee in the cases of The Citizens Ins. Co. v. Parsons[11], above referred to, and Colonial Building and Investment Association v. Attorney-General of Quebec[12]. In the former case Sir Montague Smith speaking for their Lordships says at p. 116, with respect to the Dominion’s enumerated power to legislate in respect to trade and commerce:— In the first place, it is not necessary to rest the authority of the Dominion Parliament to incorporate companies on this specific and enumerated power. The authority would belong to it by its general power over all matters not coming within the classes of subjects assigned exclusively to the legislatures of the provinces, and the only subject on this head assigned to the provincial legislature being “the incorporation of companies with provincial objects,” it follows that the incorporation of companies for objects other than provincial falls within the general powers of the parliament of Canada.
In the Colonial Building Case[13], Sir Montague Smith who again delivered the judgment of the Judicial Committee after affirming their Lordships’ adherence to the view expressed by them in the Citizens Insurance Co. of Canada v. Parsons[14] as to the respective powers of the Dominion and provincial legislatures in regard to the incorporation of companies, goes on to say, at p. 165:—
The Company was incorporated with powers to carry on its business consisting of various kinds throughout the Dominion. The Parliament of Canada could alone constitute a corporation with these powers.
And again, at p. 166:—
What the Act of incorporation has done is to create a legal and artificial person with capacity to carry on certain kinds of business, which are defined, within a defined area, viz., throughout the Dominion. Among other things, it has given to the association power to deal in land and buildings, but the capacity so given only enables it to acquire and hold land in any province consistently with the laws of that province relating to the acquisition and tenure of land. If the company can acquire and hold it, the Act of incorporation gives it capacity to do so.
“Capacity” and “powers” are here used as synonymous and the conclusion I draw from a careful study of these two judgments is that the Judicial Committee intended to affirm the proposition that the Parliament of Canada alone could confer a capacity upon a company exercisable in more than one of the Dominion’s provinces.
In a later case which came before their Lordships, La Compagnie Hydraulique de St. François v. Continental Heat and Light Co.[15], their Lordships held that the respondent company incorporated by the Dominion Parliament could not be restrained from operating under its statutory powers at the suit of the appellant company which under later Quebec statutes had the exclusive power of so operating in the locality chosen by the respondent.
The judgment was based upon the broad ground that several decisions of the Board had established
that where a given field of legislation is within the competence both of the Dominion and Provincial legislatures, and both have legislated the Dominion enactment must prevail over that of the province if the two are in conflict as they dearly are in the present case.
No distinction is here made between legislation by the Dominion Parliament under its general powers and legislation by it under some one of its enumerated powers. When legislating under these latter it is clear that Dominion legislation is paramount. I have not understood it to be so when legislating under its general power unless when exercised with reference to a subject matter which had attained national importance. Mr. Lafleur suggested that in this appeal the Judicial Committee were dealing with a company incorporated under the exception to sub-sec. 10 of sec. 92, which formed part of the enumerated powers of the Dominion Parliament under sub-sec. 29 of sec. 91, and that this would explain the language of the judgment. But so far as the report of the case goes there does not seem any ground for the suggestion. On the contrary the judgment seems to assume that it was merely formulating propositions which had already been approved of and acted upon by the Judicial Committee. The decisions on which their Lordships rely are not expressly given but I assume that they had in mind amongst others the Prohibition Case of Attorney-General for Ontario v. Attorney-General, for the Dominion[16], where their Lordships upheld the validity of the “Canada Temperance Act, 1886,” enacted by the Dominion Parliament, and held that although it was not legislation within the enumerated powers of that Parliament, but was enacted under the general power to legislate for the peace, order and good government of Canada still it was paramount legislation because it was on a subject matter unquestionably of national interest and importance and which had attained such dimensions as to affect the body politic of the Dominion, and further that in so far as the provisions of any provincial statute came into collision with the “Canada Temperance Act”
the Provincial must yield to Dominion legislation and must remain in abeyance until the “Dominion Act” was repealed by the Parliament which passed it.
Unexplained and accepted as reported simply this Hydraulic Company Case[17] would conclude and settle the difficulties as between Dominion and Provincial legislation, as to which the vital questions on this reference are asked. In the late case of The City of Montreal v. Montreal Street Railway Co.[18], Lord Atkinson speaking for their Lordships of the Judicial Committee, at p. 343, sums up the result of the various decisions of the Judicial Committee on the meaning of these two important sections 91 and 92 of our Constitutional Act, and seems clearly (pp. 343-4) to adopt the view that it is only Dominion legislation enacted under some one of the enumerated powers of section 91, or which is necessarily incidental to the powers conferred therein which can encroach upon or invade any class of subjects which are exclusively assigned to the provincial legislatures. I do not think, however, that their Lordships intended to reverse or overrule their previous decision with respect to the constitutionality of the “Canada Temperance Act” or to question the construction put in that decision upon the general powers of the Dominion to legislate upon matters not enumerated in the 91st section, but which unquestionably had attained national interest and importance, or to determine that the Dominion in legislating under these general powers upon such matters of national interest and importance must not trench upon any of the enumerated subjects in section 92, assigned to the provincial legislatures. If their Lordships did so intend then it would seem to me that the result would be tantamount to a declaration that the “Canada Temperance Act” was ultra vires of the Parliament of Canada. I venture to think that if their Lordships intended to deny the power of the Dominion Parliament when legislating under its general powers on matters unquestionably of national interest and importance, which have attained dimensions affecting the body politic of the Dominion to trench upon any of the enumerated powers of the Provincial legislatures they would have used different language from that which they have used. Such a construction of the Act would practically deny to the Dominion Parliament power to grapple effectively with any great national evil or condition quite beyond the powers of the legislatures to deal with because the prohibition against trenching upon provincial powers would be fatal. I have no doubt that this was one of the grounds on which their Lordships in the Prohibition Case[19], upheld the Dominion legislation as intra vires. That the “Canada Temperance Act,” 1886, did trench upon “Property, and Civil Rights” seems beyond argument, and still as I understand it, the legislation was upheld because its subject matter had attained national importance and such dimensions as affected the body politic of the Dominion. Lord Watson did not find that it was legislation within any of the Dominion’s enumerated powers, but accepted the previous decision of the Judicial Committee in Russell v. The Queen[20], as authority
that the restrictive provisions of the Act of 1886, when they have been duly brought into operation in any provincial area within the Dominion must receive effect as valid enactments relating to the peace, order and good government of Canada.
Lord Watson went on to say further that their Lordships were unable to regard the prohibitive enactments of the Canadian statute of 1886 as “Regulations of Trade and Commerce” for the reason that the object of the Act was not to regulate but to abolish all retail transactions between those who trade in liquor and their customers within every area where the Act is brought into operation.
The validity of the Act was therefore maintained solely under the Dominion’s general powers to legislate for the peace, order and good government of Canada, although it directly affected property and civil rights in provincial areas and was in conflict with provincial legislation on the same subject-matter of legislation. And the ground on which its validity was upheld was that the subject-matter was one of national importance affecting the body politic of the Dominion. My understanding of the decision is that such legislation forms an exception to the general rule that legislation under the peace, order and good government clause must not trench upon the enumerated powers of section 92. The result would be that while Dominion legislation generally under the peace, order and good government power might be good if it only affected incidentally the enumerated powers of the provincial legislatures under section 92, it could only directly affect and overrule legislation under those enumerated powers when enacted on such subject-matters of unquestioned national interest and importance as had attained dimensions affecting the body politic of the Dominion.
If the observations and decisions of the Judicial Committee in the several cases I have referred to as to the powers conferred upon the provincial legislatures with respect to the incorporation of companies are not conclusive as to the nature, character and extent of these powers and we construe sections 91 and 92 of our Constitutional Act broadly and generally and apart from authority we cannot fail to observe what care was apparently taken to assign to the provinces exclusive jurisdiction over all matters or subjects of a purely provincial or local or private nature while assigning to the Dominion jurisdiction over all other matters or subjects relating to the peace, order and good government of Canada as a whole. Bearing this in view and reading with critical care the 16 subsections of section 92 in which these exclusive powers are expressed, one fails to find anything to support an argument by which the exercise of any of them could have been intended to have a direct extra-provincial object or purpose. Words of provincial limitation of some sort or character are to be found in each one of the 16 sub-sections. These words vary, naturally, as the subject-matter requires; but whether the words or phrases used are “for provincial purposes,” or “for provincial, local or municipal purposes,” or “of the province,” or “in the province,” or “in or for the province,” or “with provincial objects,” they one and all indicate a consistent and uniform purpose of limiting the constitutional powers conferred to matters and subjects purely provincial or merely local or private as distinguished from those which were either Dominion wide in their extent or related to or affected more than one of the provinces.
The special words of limitation as to the meaning of which we are asked are found in the 11th sub-section. “The incorporation of companies with provincial objects.” The power given is an exclusive one. The words “with provincial objects” are clearly words of limitation. The addition of the word “only” or the words “and no others” would not alter or change the nature or extent of the limitation. In my opinion the limitation is as to area, the area is that of the province. The company to be incorporated is one with an object or functional purpose to be carried out within the province as distinguished from one with a more general object or purpose, that is one extending to two or more provinces or to the Dominion at large. The limitation has doubtless reference not only to the area within which the companies are to operate but to the subject-matters over which exclusive legislative jurisdiction is conferred on the provinces by section 92. The argument for the provinces was that it related only to these subject-matters and had no reference to area. I cannot so read it. As was said by the Judicial Committee in the case Colonial Building and Investment Association v. Attorney-General of Quebec[21], before referred to, the Parliament of Canada can alone constitute a corporation with power to carry on its business throughout the Dominion. If the provincial argument is sound that the limitation was not intended to have a reference to area but solely to the subject-matters assigned exclusively to the provinces to legislate upon it is strange that the draftsmen and framers of the Act should have used such inapt language to express their intention as is to be found in sub-section 11. The phrase “classes of subjects” is used many times over in the Act and if the intention was to add a limitation to the power to incorporate companies which would have no reference to area but should apply only to the subject matters assigned to the exclusive legislative powers of the provinces one would imagine that the draftsman would have continued the use of his favourite phrase and made the sub-section to read “The Incorporation of Companies upon or for any of the classes of subjects assigned exclusively to the provincial legislatures.”
The result of the acceptance of the provincial contention would be that the provincially incorporated companies would have equal capacity with Dominion incorporated companies to carry on their business throughout Canada. The only difference would be that the provincial companies would do so by virtue of the comity or permission of the provinces other than the one incorporating the company which might be withheld or withdrawn while the Dominion companies would do so by virtue of the inherent powers they derived from their Acts or letters of incorporation.
Such a result would seem to me not only to violate the cardinal principles adopted in the distribution of legislative powers between the Dominion and the provinces of confining the exclusive powers of the provincial legislatures to the province alone and assigning the residuum of legislative power to the Dominion Parliament but is at variance with the rule of construction many times adopted with respect to legislation alike Dominion and provincial of prohibiting that being done indirectly which cannot be done directly.
In the view, however, which I take of the character of the limitation contained in the provincial power to incorporate companies this question of the company carrying on its business beyond the area of the province which created it does not arise. If I am right that the limitation on the power of a province to incorporate companies is a territorial one and limited to the province as distinguished from the Dominion at large then it is plain that every charter granted by statute, or letters patent under the “Companies Act,” by the province must have that constitutional limitation read into it and I cannot understand how any doctrine of the comity of nations could avail either to enlarge the limited constituent powers of a company or the limited area within which the exercise of unlimited powers of a company were constitutionally confined.
The argument of inconvenience arising from the construction of the Act I have reached was pressed very strongly and it was said air Bar that many companies with millions of capital had been incorporated by the provinces and would be seriously hampered if they were not allowed to carry on their business throughout the Dominion in all the provinces which did not expressly prohibit their doing so. In the first place the constitutional limitation upon the exercise by these provincial companies of their powers while preventing them from carrying on their business or exercising their functional powers outside of the province would not prevent them doing everything within or without the province incidentally necessary to the carrying out of any of these functional powers.
A provincial company incorporated for the manufacture and sale of any article while confined to the province creating it so far as the manufacture and sale of the article was concerned could doubtless purchase outside of the province the machinery and raw material necessary to enable it to carry out the purposes for which it was brought into existence and so while confined to the province in carrying on its business of selling its manufactured products could do so to any one willing to buy from any other province so long as it did not attempt to carry on its business in such other province. But I cannot see, unless my construction of our constitutional Act is entir