Court headnote

Re The Farm Products Marketing Act
Collection
Supreme Court Judgments
Date
1957-01-22
Report
[1957] SCR 198
Judges
Kerwin, Patrick; Taschereau, Robert; Rand, Ivan Cleveland; Locke, Charles Holland; Cartwright, John Robert; Fauteux, Joseph Honoré Gérald; Abbott, Douglas Charles; Nolan, Henry Grattan
On appeal from
Canada
Subjects
Constitutional law
Decision Content
Supreme Court of Canada
RE THE FARM PRODUCTS MARKETING ACT, [1957] S.C.R. 198
Date: 1957-01-22
IN THE MATTER OF A REFERENCE RESPECTING THE FARM PRODUCTS MARKETING ACT, R.S.O. 1950, CHAPTER 131, AS AMENDED.
1956, Apr. 24, 25, 26, Nov. 19, 20, 1957, Jan. 22
PRESENT: Kerwin C.J. and Taschereau, Rand, Locke, Cartwright, Fauteux, Abbott and Nolan JJ.
Constitutional law Regulation of trade and commerce Provincial marketing schemes—Validity of The Farm Products Marketing Act, R.S.O. 1950, c. 131, as amended, and regulations and orders thereunder.
The Governor General in council referred to the Court certain questions as to the validity of parts of The Farm Products Marketing Act (Ontario) and orders and regulations made under it in relation to "schemes" for the marketing of hogs, peaches and vegetables. By an amendment passed after the order of reference the Legislature declared that the purpose and intent of the Act were "to provide for the control and regulation in any or all respects of the marketing within the Province of farm products including the prohibition of such marketing in whole or in part". The principal attack on the legislation was based upon the contention that it was an infringement of the power of the Parliament of Canada in relation to the regulation of trade and commerce. It was also argued that the licensing provisions involved indirect taxation and that the legislation conflicted with parts of the Combines Investigation Act, R.S.C. 1952, c. 31, the Criminal Code, 1953-54 ('Can.), c. 51, the Agricultural Products Marketing Act, R.S.C. 1952, c. 6, and the Live Stock and Live Stock Products Act, R.S.C. 1952, c. 167.
The questions were answered by the Court as follows:
Section 3(1) (l), as re-enacted in 1955, empowers the Farm Products Marketing Board to authorize a marketing agency "to conduct a pool or pools for the distribution of all moneys received from the sale of the regulated product and [require] any such marketing agency, after deducting all necessary and proper disbursements and expenses, to distribute the proceeds of sale in such manner that each person receives a share of the total proceeds in relation to the amount, variety, size, grade and class of the regulated product delivered by him".
Per Kerwin C.J. and Rand J.: On the assumption that the Act applies only to intraprovincial transactions as defined in the reasons, this clause is not ultra vires.
Per Taschereau, Fauteux and Abbott JJ.: The clause is intra vires.
Per Locke and Nolan JJ.: If the pool is limited to products marketed for use within the Province and excludes products marketed or purchased for export either in their natural state or after treatment the clause is intra vires.
Per Cartwright J.: The clause is ultra vires, since it empowers the Board to authorize a marketing agency to make an equalization of returns to producers, taking from some a part of the price they have received and paying it to others who have obtained a less favourable price.
Regulation 104 of C.R.O. 1950, as amended, purports to set up a "scheme" for the marketing of hogs for processing and providing for a local board and a committee in each of seven districts of the Province. Per Kerwin C.J., Taschereau, Rand, Locke, Fauteux, Abbott and Nolan JJ.: This regulation is intra vires.
Per Cartwright J.: The regulation is invalid because it does not constitute a "scheme" within the meaning of the Act.
Regulation 102/1955 provides for compulsory licensing of all processors (i.e., persons who slaughter hogs or have hogs slaughtered for them) and shippers, and for the creation o4 a marketing agency through which all hogs must be marketed.
Per Kerwin C.J.: Assuming that this regulation deals only with control of the sale of hogs for consumption within the Province, or to packing plants or other processors whose products will be consumed therein, the regulation is intra vires.
Per Taschereau, Fauteux and Abbott JJ.: The regulation is intra vires.
Per Rand J.: The licences provided for by this regulation are trade regulating licences and not for revenue purposes only, and since there is nothing in the regulation to restrict the ordinary meaning of its language it is in excess of the powers given to the Board by the statute and is therefore ultra vires.
Per Locke and Nolan JJ.: The regulation is ultra vires except to the extent that it authorizes the control of the marketing of hogs sold for consumption within the Province or to =packing plants or other processors purchasing them for the manufacture of pork products within the Province. The provision for licensing is intra vires so long as the power is not used to prevent those desiring to purchase hogs or pork products for export.
Per Cartwright J.: The regulation is invalid for the reason given under question 2.
An order of the marketing agency prescribes a "service charge" for each hog marketed under the scheme.
Per Kerwin C.J., Taschereau, Rand, Locke, Fauteux, Abbott and Nolan JJ.: This order is intra vires.
Per Cartwright J.: The order is invalid for the reason given under question 2.
5 and 6. Regulation 145/54, dealing with the marketing of peaches, requires every grower to pay licence fees at a stated rate for each ton or fraction thereof of peaches delivered to a processor and requires the processor to deduct these licence fees and forward them to the local board. Regulation 126/52 contains similar provisions in respect of the marketing of vegetables for processing.
Per Kerwin C.J., Taschereau, Rand, Locke, Fauteux, Abbott and Nolan JJ.: These orders are intro vires.
Per Cartwright J.: On the material before the Court it is impossible to determine the validity of these orders.
7. A proposed amendment to the Act would empower the Board to authorize a local board "(i) to inquire into and determine the amount of surplus of a regulated product, (ii) to purchase or otherwise acquire the whole or such part of such surplus of a regulated product as the marketing agency may determine, (iii) to market any surplus of a regulated product so purchased or acquired, (iv) to require processors who receive the regulated product from producers to deduct from the moneys payable to the producer any licence fees payable by the producer 'to the local board and to remit such licence fees to the local board, (v) to use such licence fees to pay the expenses of the local board and the losses, if any, incurred in the marketing of the surplus of the regulated product and to set aside reserves against possible losses in marketing the surplus of the regulated product, and (vi) to use such licence fees to equalize or adjust returns received by producers of the regulated product".
Per Kerwin C.J. and Rand J.: This amendment as interpreted in the reasons is not ultra vires.
Per Taschereau, Fauteux and Abbott JJ.: Clauses (i) to (iv) are intra vires but clause (v), except to the extent that it authorizes the use of licence fees to pay the expenses of the local board, and the whole of clause (vi), are ultra vires.
Per Locke and Nolan JJ.: The amendment is intra vires except that that part of clause (v) which authorizes the imposition of licence fees to provide moneys to pay for the losses referred to and to set up reserves and for the purposes referred to in clause (vi), is ultra vires.
Per Cartwright J.: Clauses (v) and (vi) are ultra vires but the other clauses are intra vires.
8. Per curiam: The Board would not have power under the proposed amendment to authorize a local board to impose licence fees and to use those licence fees to equalize or adjust returns to the producers.
REFERENCE under s. 55 of the Supreme Court Act. The terms of the order of reference are set out in the reasons of Locke J., post, p. 220.
F. P. Varcoe, Q.C., and E. R. Olson, for the Attorney General of Canada.
C. R. Magone, Q.C., for the Attorney-General for Ontario.
M. Hoyt, for the Attorney General for New Brunswick.
J. 0. C. Campbell, Q.C., for the Attorney-General of Prince Edward Island.
J. R. Dunnet, for the Attorney-General for Saskatchewan. H. J. Wilson, Q.C., for the Attorney General for Alberta.
R. H. Milliken, Q.C., and R. A. Milliken, for Canadian Federation of Agriculture and others.
H. E. Harris, Q.C., for Ontario Federation of Agriculture and others.
J. J. Robinette, Q.C., and P. B. C. Pepper, counsel appointed by the Court to represent persons opposed to the legislation.
McFarland, Q.C., for Theodore Parker. After the argument the Court called for further argument and directed that notice be given by the Attorney-General for Ontario to all other parties represented on the original hearing and to the Attorneys-General of Quebec, Manitoba, British Columbia and Newfoundland. The direction of the Court was as follows:
On the assumption that the Act and the three schemes with the regulations applicable to them extend to the marketing of all hogs, peaches and designated vegetables delivered to a processor in the province to be processed, the Court directs the following question to be argued on Monday, November 19, 1956:
Is the regulation of trade so prescribed, controlling production, transportation and sale, including the designation of an exclusive selling agency and fixing the price, to the processor, of these products, within the authority of the Province in respect of such of them as are, in the usual course of production and trade, intended or destined to be or will be exported from the Province in interprovincial or foreign trade? Would the power of the Province extend to the control of the manufacture or processing? For example: liquor may be distilled in a Province solely for export; is the purchase, including the price to be paid therefor, of locally grown grain or other ingredients, within such Provincial regulation? Similarly in the case of wheat grown locally and sold to a miller within the Province whose market is both within and without the Province; of hogs sold to a packer for curing and intended in whole or in part for shipment without the Province; of pulpwood sold to pulp or paper manufacturers for similar disposal; of fish processed by canners for similar disposal; and many other products in the same category of processing and distribution. Can the holding of a licence or the payment of a licence fee by a processor of products for export be made a condition of the processing in the case of (a) a Dominion company, or (b) a Provincial company? Is there a jurisdictional difference between the manufacture of liquor from grain and the processing of hogs into pork, ham or bacon and the similar contrasting treatment of other products, in relation, for example, to the control of marketing and price to the manufacturer or processor? If a distinction is to be made, what is the test or principle to be applied?
F. P. Varcoe, Q.C., and E. R. Olson, for the Attorney General of Canada.
C. R. Magone, Q.C., and H. E. Harris, Q.C., for the Attorney-General for Ontario and the Attorney-General of Prince Edward Island.
C. A. Seguin, Q.C., for the Attorney-General of Quebec.
M. M. Hoyt, for the Attorney General of New Brunswick.
W. Burke-Robertson, Q.C., for the Attorney-General for British Columbia.
J. R. Dunnet, for the Attorney-General for Saskatchewan. H. J. Wilson, Q.C., for the Attorney General for Alberta.
R. H. Milliken, Q.C., for Canadian Federation of Agriculture and others.
H. E. Harris, Q.C., for Ontario Federation of Agriculture and others.
J. J. Robinette, Q.C., and P. B. C. Pepper, counsel appointed by the Court.
THE CHIEF JUSTICE:—This is a reference by His Excellency the Governor General in Council as to the validity of one clause of one section of The Farm Products Marketing Act of the Province of Ontario, R.S.O. 1950, c. 131, of certain regulations made thereunder, of an order of The Ontario Hog Producers' Marketing Board, of a proposed amendment to the Act, and of a suggested authorization by the Farm Products Marketing Board if that amendment be held to be intra vires. On such a reference one cannot envisage all possible circumstances which might arise and it must also be taken that it is established that it is not to be presumed that a Provincial Legislature intended to exceed its legislative jurisdiction under the British North America Act, although the Court may, on what it considers the proper construction of a given enactment, determine that the Legislature has gone beyond its authority.
Subsequent to the date of the order of reference, the Act was amended by c. 20 of the statutes of 1956, which came into force the day it received Royal Assent, s. 1 of which reads as follows:
1. The Farm Products Marketing Act is amended by adding thereto the following section:
1a. The purpose and intent of this Act is to provide for the control and regulation in any or all respects of the marketing within the Province of farm products including the prohibition of such marketing in whole or in part.
Without entering into a discussion as to what is a declaratory law, since the term may have different connotations depending upon the matter under review, it is arguable that, for present purposes, this amendment should be read as part of The Farm Products Marketing Act, but, in any event, the first question submitted to us directs us to assume that that Act as amended down to the date of the reference applies only in the case of "intra-provincial transactions". This term means "existing or occurring within a province"; see Shorter Oxford English Dictionary, including "intraparochial" as an example under the word "intra". As will appear later, the word "marketing" is defined in the Act, but, in accordance with what has already been stated, I take it as being confined to marketing within the Province.
Question 1 is as follows :
1. Assuming that the said Act applies only in the case of intraprovincial transactions, is clause (l) of subsection 1 of section 3 of The Farm Products Marketing Act, R.S.O. 1950 chapter 131 as amended by Ontario Statutes 1951, chapter 25, 1953, chapter 36, 1954, chapter 29, 1955, chapter 21, ultra vires the Ontario Legislature?
Clause (l) of subs. (1) of s. 3 referred to, as re-enacted by 1955, c. 21, s. 2, provides :
3. (1) The Board may, …
(l) authorize any marketing agency appointed under a scheme to conduct a pool or pools for the distribution of all moneys received from the sale of the regulated product and requiring any such marketing agency, after deducting all necessary and proper disbursements and expenses, to distribute the proceeds of sale in such manner that each person receives a share of the total proceeds in relation to the amount, variety, size, grade and class of the regulated product delivered by him and to make an initial payment on delivery of the product and subsequent payments until the total net proceeds are distributed.
For a proper understanding of the terms used in this clause and of the provisions of the Act it is necessary to refer to what is proposed by the latter.
The Board is the Farm Products Marketing Board and " 'farm products' includes animals, meats, eggs, poultry, wool, dairy products, grains, seeds, fruit, fruit products, vegetables, vegetable products, maple products, honey, tobacco and such articles of food or drink manufactured or derived in whole or in part from any such product and such other natural products of agriculture as may be designated by the regulations" (s. 1(b) ). " 'Regulated product' means a farm product in respect of which a scheme is in force" (s. 1(g)). Provision is made for the formulation of a scheme for the marketing or regulating of any farm product upon the petition of at least 10 per cent. of all producers engaged in the production of the farm product in Ontario, or in that part thereof to which the proposed scheme is to apply. " "'Marketing' means buying, selling and offering for sale and includes advertising, assembling, financing, packing and shipping for sale or storage and transporting in any manner by any person, and 'market' and 'marketed' have corresponding meanings" (s. 1(e), as re-enacted by 1955, c. 21, s. 1). The scheme may provide for a "marketing agency" designated by the Board in its regulations. Once the scheme is approved by the Board the latter's regulations will apply according to the farm products dealt with thereby.
It seems plain that the Province may regulate a transaction of sale and purchase in Ontario between a resident of the Province and one who resides outside its limits; that is, if an individual in Quebec comes to Ontario and there buys a hog, or vegetables, or peaches, the mere fact that he has the intention to take them from Ontario to Quebec does not deprive the Legislature of its power to regulate the transaction, as is evidenced by such enactments as The Sale of Goods Act, R.S.O. 1950, c. 345. That is a matter of the regulation of contracts and not of trade as trade and in that respect the intention of the purchaser is immaterial. However, if the hog be sold to a packing plant or the vegetables or peaches to a cannery, the products of those establishments in the course of trade may be dealt with by the Legislature or by Parliament depending, on the one hand, upon whether all the products are sold or intended for sale within the Province or, on the other, whether some of them are sold or intended for sale beyond Provincial limits. It is, I think, impossible to fix any minimum proportion of such last-mentioned sales or intended sales as determining the jurisdiction of Parliament. This applies to the sale by the original owner. Once a statute aims at "regulation of trade in matters of inter-provincial concern" (The Citizens Insurance Company of Canada v. Parsons; The Queen Insurance Company v. Parsons[1]), it is beyond the competence of a Provincial Legislature. The ambit of head 2 of s. 91 of the British North America Act, "The Regulation of Trade and Commerce" has been considerably enlarged by decisions of the Judicial 'Committee and expressions used in some of its earlier judgments must be read in the light of its later pronouncements, as is pointed out by Sir Lyman Duff in Re Alberta Statutes[2]. In fact, his judgment in Re The Natural Products Marketing Act, 1934[3], which is justly considered as the locus classicus, must be read in conjunction with and subject to his remarks in the later case. The concept of trade and commerce, the regulation of which is confided to Parliament, is entirely separate and distinct from the regulation of mere sale and purchase agreements. Once an article enters into the flow of interprovincial or external trade, the subject-matter and all its attendant circumstances cease to be a mere matter of local concern. No change has taken place in the theory underlying the construction of the British North America Act that what is not within the legislative jurisdiction of Parliament must be within that of the Provincial Legislatures. This, of course, still leaves the question as to how far either may proceed, and, as Lord Atkin pointed out in the Natural Products Marketing Act case, supra, at p. 389, neither party may leave its own sphere and encroach upon that of another.
Mr. Robinette suggested that there was an inconsistency between the judgment of Mr. Justice Duff in Lawson v. Interior Tree Fruit and Vegetable Committee of Direction[4], and his judgment in The King v. Eastern Terminal Elevator Company[5]. However, all that was decided in the latter case was that Parliament had exceeded its jurisdiction while in the former it was held that the British Columbia statute under review was ultra vires.
It was contended by Mr. Pepper that the Combines Investigation Act, R.S.C. 1952, c. 314, and ss. 411 and 412 of the Criminal Code, 1953-54 (Can.), c. 51, and the Agricultural Prices Support Act, R.S.C. 1952, c. 3, are relevant and prevent the Ontario Legislature from enacting clause (l) of subs. (1) of s. 3 of The Farm Products Marketing Act and therefore the administrative agencies provided for by that Act, from operating. The point is determined against that contention as to the Combines Investigation Act by the decision of this Court in Ontario Boys' Wear Limited et al. v. The Advisory Committee et al.[6]. With respect to that Act and also to the sections of the Criminal Code referred to, it cannot be said that any scheme otherwise within the authority of the Legislature is against the public interest when the Legislature is seized of the power and, indeed, the obligation to take care of that interest in the Province. The Agricultural Prices Support Act and in fact all Acts of Canada of a similar nature contain merely provisions for the assistance of agriculture. A final argument was advanced to the effect that the legislation conflicted with s. 25 of the Live Stock and Live Stock Products Act, R.S.C. 1952, c. 167, which reads:
25. Notwithstanding anything in this Part, any farmer or drover may sell his own live stock at a stockyard on his own account.
This is merely a provision in ease of the other sections of that particular Act.
In view of the wording of question 1, I take clause (l) of subs. (1) of s. 3 of The Farm Products Marketing Act as being a successful endeavour on the part of the Ontario Legislature to fulfil its part while still keeping within the ambit of its powers. On the assumption directed to be made and reading the clause so as not to apply to trans-actions which I have indicated would be of a class beyond the powers of the Legislature, my answer to the first question is "No".
Question 2 asks whether a certain regulation as amended respecting the marketing of hogs is ultra vires the Lieutenant-Governor in Council. The order in council was made in pursuance of the statute and, as the wording may be construed as contemplating only local trade, the objection, in view of what has already been stated, is without foundation. Nor can I agree (a) that the scheme does not contain substantive terms and therefore is really not a scheme at all; (b) that it is necessary that there should be prior approval by the producers.
I assume that the regulation of the Farm Products Marketing Board referred to in question 3 deals only with the control of the sale of hogs for consumption within the Province, or to packing plants or other processors whose products will be consumed therein. The provision for licensing is not ultra vires and a company incorporated by letters patent under the Companies Act of Canada, with power to carry on the business of a packing plant throughout the nation, is bound to comply with a general licensing law.
My answer to question 4 is that the order of The Ontario Hog Producers' Marketing Board fixing the service charges to be imposed by the marketing agency is not ultra vires the Board, as the matter is covered by the decision of the Privy Council in Shannon et al. v. Lower Mainland Dairy Products Board[7]). For the same reason, I think similar answers must be given to questions 5 and 6, the first relating to the marketing of peaches for processing and the latter to the marketing of vegetables for processing.
As to questions 7 and 8, I agree with the reasons of my brother Rand.
My answers to the questions are as follows:
Question 1: On the assumption that the Act is restricted to intraprovincial transactions as defined in these reasons, the answer is No.
Question 2: No.
Question 3: Assuming that the Regulation deals only with the control of the sale of hogs for consumption within the Province, or to packing plants or other processors whose products will be consumed therein, the answer is No.
Question 4: No.
Question 5: No.
Question 6: No.
Question 7: On the interpretation given to the proposed amendment the answer is No.
Question 8: No.
TASCHEREAU J. agrees in the answers of Fauteux and Abbott JJ.
RAND J.:—This reference raises questions going to the scope of Provincial authority over trade. They arise out of The Farm Products Marketing Act, R.S.O. 1950, c. 131, as amended, which deals comprehensively with the matter connoted by its name and out of certain schemes formed under it. Its object is to accord primary producers of farm products the advantages of various degrees of controlled marketing, for which it provides provincial and local machinery.
General jurisdiction over its administration is exercised by the Farm Products Marketing Board; regulation is by way of schemes for the marketing of any product; under a scheme, a local board, district committees and county groups are organized; and the marketing may be carried out exclusively by an agency designated by the Board upon the recommendation of the local board.
The questions put, which assume the Act to be limited in application to local trade, call for answers which make it necessary to examine and define the scope of local trade to the extent of the regulation provided. The enquiry must take into account regulatory power over acts and transactions which while objectively appearing to be consummated within the Province may involve or possess an interest of interprovincial or foreign trade, which for convenience I shall refer to as external trade.
The products embraced include
animals, meats, eggs, poultry, wool, dairy products, grains, seeds, fruit, fruit products, vegetables, vegetable products ... and ... articles of food or drink manufactured or derived in whole or in part from any such product.
"Marketing" means buying, selling, assembling, packing, shipping for sale or storage and transporting in any manner by any person. The marketing board may establish negotiating agencies which may adopt or determine by agreement minimum prices and other features of marketing, and prohibit the marketing of any class, variety, grade or size of a product. It may require a licence to be taken out by every person for producing, marketing or processing a product with fees payable at various times and in different amounts. The Board may authorize an agency to control the times and places for marketing, the quantity, grade, class and price of products to be marketed, and to exercise other powers conferred by the statute on the Board.
Although not specifically mentioned in s. 92 of the British North America Act, there is admittedly a field of trade within provincial power, and the head or heads of s. 92 from which it is to be deduced will be considered later. The power is a subtraction from the scope of the language conferring on the Dominion by head 2 of s. 91 exclusive authority to make laws in relation to the regulation of trade and commerce, and was derived under an interpretation of the Act which was found necessary
in order to preserve from serious curtailment, if not from virtual extinction, the degree of autonomy which, as appears from the scheme of the Act as a whole, the provinces were intended to possess
(per Duff J. in Lawson v. Interior Tree, Fruit and Vegetable Committee of Direction[8]. In examining the legislation for the purpose mentioned we should bear in mind Lord Atkin's admonition in Attorney-General for British Columbia v. Attorney-General for Canada et al.[9], that
the legislation will have to be carefully framed, and will not be achieved by either party leaving its own sphere and encroaching upon that of the other.
The definitive statement of the scope of Dominion and Provincial jurisdiction was made by Duff C.J. in Re The Natural Products Marketing Act, 1934[10]. The regulation of particular trades confined to the Province lies exclusively with the Legislature subject, it may be, to Dominion general regulation affecting all trade, and to such incidental intrusion by the Dominion as may be necessary to prevent the defeat of Dominion regulation; interprovincial and foreign trade are correspondingly the exclusive concern of Parliament. That statement is to be read with the judgment of this Court in The King v. Eastern Terminal Elevator Company[11], approved by the Judicial Committee in Attorney-General for British Columbia v. Attorney-General for Canada, supra, at p. 387, to the effect that Dominion regulation cannot embrace local trade merely because in undifferentiated subject-matter the external interest is dominant. But neither the original statement nor its approval furnishes a clear guide to the demarcation of the two classes when we approach as here the origination, the first stages of trade, including certain aspects of manufacture and production.
That demarcation must observe this rule, that if in a trade activity, including manufacture or production, there is involved a matter of extraprovincial interest or concern its regulation thereafter in the aspect of trade is by that fact put beyond Provincial power. This is exemplified in Lawson v. Interior Tree Fruit and Vegetable Committee of Direction, supra, where the Province purported to regulate the time and quantity of shipment, the shippers, the price and the transportation of fruit and vegetables in both unsegregated and segregated local and interprovincial trade movements.
A producer is entitled to dispose of his products beyond the Province without reference to a provincial marketing agency or price, shipping or other trade regulation ; and an outside purchaser is entitled with equal freedom to purchase and export. Processing is one of a number of trade services that may be given products in the course of reaching the consumer: milling (as of grain or lumber), sorting, packing, slaughtering, dressing, storing, transporting, etc. The producer or purchaser may desire to process the product either within or beyond the Province and if he engages for that with a local undertaking (using that expression in a non-technical sense), such as a packing plant—and it would apply to any sort of servicing—he takes that service as he finds it but free from such Provincial impositions as are strictly trade regulations such as prices or the specification of standards, which could no more be imposed than Provincial trade marks. Regulation of that nature could directly nullify external trade vital to the economy of the country. Trade arrangements reaching the dimensions of world agreements are now a commonplace; interprovincial trade, in which the Dominion is a single market, is of similar importance, and equally vital to the economic functioning of the country as a whole. The Dominion power implies responsibility for promoting and maintaining the vigour and growth of trade beyond Provincial confines, and the discharge of this duty must remain unembarrassed by local trade impediments. If the processing is restricted to external trade, it becomes an instrumentality of that trade and its single control as to prices, movements, standards, etc., by the Dominion follows: Re The Industrial Relations and Disputes Investigation Act[12]. The licensing of processing plants by the Province as a trade regulation is thus limited to their operations in local trade. Likewise the licensing of shippers, whether producers or purchasers, and the fixing of the terms and conditions of shipment, including prices, as trade regulation, where the goods are destined beyond the Province, would be beyond Provincial power.
Local trade has in some cases been classed as a matter of property and civil rights and related to head 13 of s. 92, and the propriety of that allocation was questioned. The production and exchange of goods as an economic activity does not take place by virtue of positive law or civil right; it is assumed as part of the residual free activity of men upon or around which law is imposed. It has an identity of its own recognized by head 2 of s. 91. I cannot agree that its regulation under that head was intended as a species of matter under head 13 from which by the language of s. 91 it has been withdrawn. It happened that in The Citizens Insurance Company of Canada v. Parsons; The Queen Insurance Company v. Parsons[13], assuming insurance to be a trade, the commodity being dealt in was the making of contracts, and their relation to head 13 seemed obvious. But the true conception of trade (in contradistinction to the static nature of rights, civil or property) is that of a dynamic, the creation and flow of goods from production to consumption or utilization, as an individualized activity.
The conclusive answer to the question is furnished by a consideration of s. 94 which provides for the uniformity in Ontario, New Brunswick and Nova Scotia of "all or any of the laws relative to property and civil rights". It is, I think, quite impossible to include within this provision regulation of local trades; that appears to be one feature of the internal economy of each Province in which no such uniformity could ever be expected. What the language is directed to are laws relating to civil status and capacity, contracts, torts and real and personal property in the common law Provinces, jural constructs springing from the same roots, already more or less uniform, and lending themselves to more or less permanence. In some degree uniformity has been achieved by individual Provincial action in such legislation, for instance, as that of contributory negligence.
Head 16 contains what may be called the residuary power of the Province: Attorney-General for Ontario v. Attorney-General for the Dominion et al.[14], and it is within that residue that the autonomy of the Province in local matters, so far as it might be affected by trade regulation, is to be preserved. As was recognized in the Parsons case, supra, this points up the underlying division of the matters of legislation into those which are primarily of national and those of local import. But this is not intended to derogate from regulation as well as taxation of local trade through licence under head 9 of s. 92, nor from its support under head 13.
It is important to keep in mind, as already observed, that the broad language of head 2 of s. 91 has been curtailed not by any express language of the statute but as a necessary implication of the fundamental division of powers effected by it. The interpretation of this head has undergone a transformation. When it was first considered by this Court in Severn v. The Queen[15] and The City of Fredericton v. The Queen[16], the majority views did not envisage the limitation now established; that was introduced by the judgment in the Parsons case, supra. The nadir of its scope was reached in what seemed its restriction to a function ancillary to other Dominion powers; but that view has been irretrievably scotched.
The powers of this Court in the exercise of its jurisdiction are no less in scope than those formerly exercised in relation to Canada by the Judicial Committee. From time to time the Committee has modified the language used by it in the attribution of legislation to the various heads of ss. 91 and 92, and in its general interpretative formulations, and that incident of judicial power must, now, in the same manner and with the same authority, wherever deemed necessary, be exercised in revising or restating those formulations that have come down to us. This is a function inseparable from constitutional decision. It involves no departure from the basic principles of jurisdictional distribution; it is rather a refinement of interpretation in application to the particularized and evolving features and aspects of matters which the intensive and extensive expansion of the life of the country inevitably presents.
The reaches of trade may extend to aspects of manufacture. In Attorney-General for Ontario v. Attorney-General for the Dominion et al., supra, the Judicial Committee dealt with the question whether the Province could prohibit the manufacture within the Province of intoxicating liquor, to which the answer was given that, in the absence of conflicting legislation of Parliament, there would be jurisdiction to that effect if it were shown that the manufacture was carried on under such circumstances and conditions as to make its prohibition a merely local matter in the Province. This involves a limitation of the power of the Province to interdict, as a trade matter, the manufacture or production of articles destined for external trade. Admittedly, however, local regulation may affect that trade: wages, workmen's compensation, insurance, taxes and other items that furnish what may be called the local conditions underlying economic activity leading to trade.
The federal character of our constitution places limits on legislative acts in relation to matters which as an entirety span, so to speak, the boundary between the two jurisdictions. In The King v. Eastern Terminal Elevator Company, supra, for example, there was a common storage of grain destined both to local and external trade. The situation in City of Montreal v. Montreal Street Railway[17] was equally striking: there Parliament was held incapable of imposing through rates over a local railway on traffic passing between points on that line and points on a connecting Dominion railway; the only regulation open was declared to be parallel action by Legislature and Parliament, each operating only on its own instrumentality. Although by that means the substantial equivalent of a single administration may be attained, there is a constitutional difference between that co-operating action and action by an overriding jurisdiction. It follows that trade regulation by a Province or the Dominion, acting alone, related to local or external trade respectively, before the segregation of products or manufactures of each class is reached, is impracticable, with the only effective means open, apart from conditional regulation, being that of co-operative action; this, as in some situations already in effect, may take the form of a single board to administer regulations of both on agreed measures.
On the foregoing interpretation of the scope of Provincial regulation of trade, the questions put to us may now be considered.
Three of them go to the validity of two provisions of the Act, s. 3(1) (l), authorizing the marketing of a product by means of a pool, and a proposed amendment, para. (ss), to s. 7(1) authorizing the purchase of the surplus of a regulated product and its marketing and the use of licence fees to recoup any loss suffered. The remaining five questions go to regulations made in one case by the Lieutenant-Governor in council, in three cases by the Farm Products Marketing Board, and in one by The Ontario Hog Producers' Marketing Board.
Clause (l) of subs. (1) of s. 3 of the statute reads:
The Board may, …
authorize any marketing agency appointed under a scheme to conduct a pool or pools for the distribution of all moneys received from the sale of the regulated product and requiring any such marketing agency, after deducting all necessary and proper disbursements and expenses, to distribute the proceeds of sale in such manner that each person receives a share of the total proceeds in relation to the amount, variety, size, grade and class of the regulated product delivered by him and to make an initial payment on delivery of the product and subsequent payments until the total net proceeds are distributed.
Co-operative disposal may take different forms: it may be that of an exclusive local marketing by an agency, either as owner or agent, by which the products are disposed of and the returns equalized, a form, I should say, within the authority of the Province; or, in the interest of convenience and economy, the producers, as contemplated by the Act here, would make their own sales with all moneys made returnable to the agency, for the recovery

Court headnote

Re The Farm Products Marketing Act Collection Supreme Court Judgments Date 1957-01-22 Report [1957] SCR 198 Judges Kerwin, Patrick; Taschereau, Robert; Rand, Ivan Cleveland; Locke, Charles Holland; Cartwright, John Robert; Fauteux, Joseph Honoré Gérald; Abbott, Douglas Charles; Nolan, Henry Grattan On appeal from Canada Subjects Constitutional law Decision Content Supreme Court of Canada RE THE FARM PRODUCTS MARKETING ACT, [1957] S.C.R. 198 Date: 1957-01-22 IN THE MATTER OF A REFERENCE RESPECTING THE FARM PRODUCTS MARKETING ACT, R.S.O. 1950, CHAPTER 131, AS AMENDED. 1956, Apr. 24, 25, 26, Nov. 19, 20, 1957, Jan. 22 PRESENT: Kerwin C.J. and Taschereau, Rand, Locke, Cartwright, Fauteux, Abbott and Nolan JJ. Constitutional law Regulation of trade and commerce Provincial marketing schemes—Validity of The Farm Products Marketing Act, R.S.O. 1950, c. 131, as amended, and regulations and orders thereunder. The Governor General in council referred to the Court certain questions as to the validity of parts of The Farm Products Marketing Act (Ontario) and orders and regulations made under it in relation to "schemes" for the marketing of hogs, peaches and vegetables. By an amendment passed after the order of reference the Legislature declared that the purpose and intent of the Act were "to provide for the control and regulation in any or all respects of the marketing within the Province of farm products including the prohibition of such marketing in whole or in part". The principal attack on the legislation was based upon the contention that it was an infringement of the power of the Parliament of Canada in relation to the regulation of trade and commerce. It was also argued that the licensing provisions involved indirect taxation and that the legislation conflicted with parts of the Combines Investigation Act, R.S.C. 1952, c. 31, the Criminal Code, 1953-54 ('Can.), c. 51, the Agricultural Products Marketing Act, R.S.C. 1952, c. 6, and the Live Stock and Live Stock Products Act, R.S.C. 1952, c. 167. The questions were answered by the Court as follows: Section 3(1) (l), as re-enacted in 1955, empowers the Farm Products Marketing Board to authorize a marketing agency "to conduct a pool or pools for the distribution of all moneys received from the sale of the regulated product and [require] any such marketing agency, after deducting all necessary and proper disbursements and expenses, to distribute the proceeds of sale in such manner that each person receives a share of the total proceeds in relation to the amount, variety, size, grade and class of the regulated product delivered by him". Per Kerwin C.J. and Rand J.: On the assumption that the Act applies only to intraprovincial transactions as defined in the reasons, this clause is not ultra vires. Per Taschereau, Fauteux and Abbott JJ.: The clause is intra vires. Per Locke and Nolan JJ.: If the pool is limited to products marketed for use within the Province and excludes products marketed or purchased for export either in their natural state or after treatment the clause is intra vires. Per Cartwright J.: The clause is ultra vires, since it empowers the Board to authorize a marketing agency to make an equalization of returns to producers, taking from some a part of the price they have received and paying it to others who have obtained a less favourable price. Regulation 104 of C.R.O. 1950, as amended, purports to set up a "scheme" for the marketing of hogs for processing and providing for a local board and a committee in each of seven districts of the Province. Per Kerwin C.J., Taschereau, Rand, Locke, Fauteux, Abbott and Nolan JJ.: This regulation is intra vires. Per Cartwright J.: The regulation is invalid because it does not constitute a "scheme" within the meaning of the Act. Regulation 102/1955 provides for compulsory licensing of all processors (i.e., persons who slaughter hogs or have hogs slaughtered for them) and shippers, and for the creation o4 a marketing agency through which all hogs must be marketed. Per Kerwin C.J.: Assuming that this regulation deals only with control of the sale of hogs for consumption within the Province, or to packing plants or other processors whose products will be consumed therein, the regulation is intra vires. Per Taschereau, Fauteux and Abbott JJ.: The regulation is intra vires. Per Rand J.: The licences provided for by this regulation are trade regulating licences and not for revenue purposes only, and since there is nothing in the regulation to restrict the ordinary meaning of its language it is in excess of the powers given to the Board by the statute and is therefore ultra vires. Per Locke and Nolan JJ.: The regulation is ultra vires except to the extent that it authorizes the control of the marketing of hogs sold for consumption within the Province or to =packing plants or other processors purchasing them for the manufacture of pork products within the Province. The provision for licensing is intra vires so long as the power is not used to prevent those desiring to purchase hogs or pork products for export. Per Cartwright J.: The regulation is invalid for the reason given under question 2. An order of the marketing agency prescribes a "service charge" for each hog marketed under the scheme. Per Kerwin C.J., Taschereau, Rand, Locke, Fauteux, Abbott and Nolan JJ.: This order is intra vires. Per Cartwright J.: The order is invalid for the reason given under question 2. 5 and 6. Regulation 145/54, dealing with the marketing of peaches, requires every grower to pay licence fees at a stated rate for each ton or fraction thereof of peaches delivered to a processor and requires the processor to deduct these licence fees and forward them to the local board. Regulation 126/52 contains similar provisions in respect of the marketing of vegetables for processing. Per Kerwin C.J., Taschereau, Rand, Locke, Fauteux, Abbott and Nolan JJ.: These orders are intro vires. Per Cartwright J.: On the material before the Court it is impossible to determine the validity of these orders. 7. A proposed amendment to the Act would empower the Board to authorize a local board "(i) to inquire into and determine the amount of surplus of a regulated product, (ii) to purchase or otherwise acquire the whole or such part of such surplus of a regulated product as the marketing agency may determine, (iii) to market any surplus of a regulated product so purchased or acquired, (iv) to require processors who receive the regulated product from producers to deduct from the moneys payable to the producer any licence fees payable by the producer 'to the local board and to remit such licence fees to the local board, (v) to use such licence fees to pay the expenses of the local board and the losses, if any, incurred in the marketing of the surplus of the regulated product and to set aside reserves against possible losses in marketing the surplus of the regulated product, and (vi) to use such licence fees to equalize or adjust returns received by producers of the regulated product". Per Kerwin C.J. and Rand J.: This amendment as interpreted in the reasons is not ultra vires. Per Taschereau, Fauteux and Abbott JJ.: Clauses (i) to (iv) are intra vires but clause (v), except to the extent that it authorizes the use of licence fees to pay the expenses of the local board, and the whole of clause (vi), are ultra vires. Per Locke and Nolan JJ.: The amendment is intra vires except that that part of clause (v) which authorizes the imposition of licence fees to provide moneys to pay for the losses referred to and to set up reserves and for the purposes referred to in clause (vi), is ultra vires. Per Cartwright J.: Clauses (v) and (vi) are ultra vires but the other clauses are intra vires. 8. Per curiam: The Board would not have power under the proposed amendment to authorize a local board to impose licence fees and to use those licence fees to equalize or adjust returns to the producers. REFERENCE under s. 55 of the Supreme Court Act. The terms of the order of reference are set out in the reasons of Locke J., post, p. 220. F. P. Varcoe, Q.C., and E. R. Olson, for the Attorney General of Canada. C. R. Magone, Q.C., for the Attorney-General for Ontario. M. Hoyt, for the Attorney General for New Brunswick. J. 0. C. Campbell, Q.C., for the Attorney-General of Prince Edward Island. J. R. Dunnet, for the Attorney-General for Saskatchewan. H. J. Wilson, Q.C., for the Attorney General for Alberta. R. H. Milliken, Q.C., and R. A. Milliken, for Canadian Federation of Agriculture and others. H. E. Harris, Q.C., for Ontario Federation of Agriculture and others. J. J. Robinette, Q.C., and P. B. C. Pepper, counsel appointed by the Court to represent persons opposed to the legislation. McFarland, Q.C., for Theodore Parker. After the argument the Court called for further argument and directed that notice be given by the Attorney-General for Ontario to all other parties represented on the original hearing and to the Attorneys-General of Quebec, Manitoba, British Columbia and Newfoundland. The direction of the Court was as follows: On the assumption that the Act and the three schemes with the regulations applicable to them extend to the marketing of all hogs, peaches and designated vegetables delivered to a processor in the province to be processed, the Court directs the following question to be argued on Monday, November 19, 1956: Is the regulation of trade so prescribed, controlling production, transportation and sale, including the designation of an exclusive selling agency and fixing the price, to the processor, of these products, within the authority of the Province in respect of such of them as are, in the usual course of production and trade, intended or destined to be or will be exported from the Province in interprovincial or foreign trade? Would the power of the Province extend to the control of the manufacture or processing? For example: liquor may be distilled in a Province solely for export; is the purchase, including the price to be paid therefor, of locally grown grain or other ingredients, within such Provincial regulation? Similarly in the case of wheat grown locally and sold to a miller within the Province whose market is both within and without the Province; of hogs sold to a packer for curing and intended in whole or in part for shipment without the Province; of pulpwood sold to pulp or paper manufacturers for similar disposal; of fish processed by canners for similar disposal; and many other products in the same category of processing and distribution. Can the holding of a licence or the payment of a licence fee by a processor of products for export be made a condition of the processing in the case of (a) a Dominion company, or (b) a Provincial company? Is there a jurisdictional difference between the manufacture of liquor from grain and the processing of hogs into pork, ham or bacon and the similar contrasting treatment of other products, in relation, for example, to the control of marketing and price to the manufacturer or processor? If a distinction is to be made, what is the test or principle to be applied? F. P. Varcoe, Q.C., and E. R. Olson, for the Attorney General of Canada. C. R. Magone, Q.C., and H. E. Harris, Q.C., for the Attorney-General for Ontario and the Attorney-General of Prince Edward Island. C. A. Seguin, Q.C., for the Attorney-General of Quebec. M. M. Hoyt, for the Attorney General of New Brunswick. W. Burke-Robertson, Q.C., for the Attorney-General for British Columbia. J. R. Dunnet, for the Attorney-General for Saskatchewan. H. J. Wilson, Q.C., for the Attorney General for Alberta. R. H. Milliken, Q.C., for Canadian Federation of Agriculture and others. H. E. Harris, Q.C., for Ontario Federation of Agriculture and others. J. J. Robinette, Q.C., and P. B. C. Pepper, counsel appointed by the Court. THE CHIEF JUSTICE:—This is a reference by His Excellency the Governor General in Council as to the validity of one clause of one section of The Farm Products Marketing Act of the Province of Ontario, R.S.O. 1950, c. 131, of certain regulations made thereunder, of an order of The Ontario Hog Producers' Marketing Board, of a proposed amendment to the Act, and of a suggested authorization by the Farm Products Marketing Board if that amendment be held to be intra vires. On such a reference one cannot envisage all possible circumstances which might arise and it must also be taken that it is established that it is not to be presumed that a Provincial Legislature intended to exceed its legislative jurisdiction under the British North America Act, although the Court may, on what it considers the proper construction of a given enactment, determine that the Legislature has gone beyond its authority. Subsequent to the date of the order of reference, the Act was amended by c. 20 of the statutes of 1956, which came into force the day it received Royal Assent, s. 1 of which reads as follows: 1. The Farm Products Marketing Act is amended by adding thereto the following section: 1a. The purpose and intent of this Act is to provide for the control and regulation in any or all respects of the marketing within the Province of farm products including the prohibition of such marketing in whole or in part. Without entering into a discussion as to what is a declaratory law, since the term may have different connotations depending upon the matter under review, it is arguable that, for present purposes, this amendment should be read as part of The Farm Products Marketing Act, but, in any event, the first question submitted to us directs us to assume that that Act as amended down to the date of the reference applies only in the case of "intra-provincial transactions". This term means "existing or occurring within a province"; see Shorter Oxford English Dictionary, including "intraparochial" as an example under the word "intra". As will appear later, the word "marketing" is defined in the Act, but, in accordance with what has already been stated, I take it as being confined to marketing within the Province. Question 1 is as follows : 1. Assuming that the said Act applies only in the case of intraprovincial transactions, is clause (l) of subsection 1 of section 3 of The Farm Products Marketing Act, R.S.O. 1950 chapter 131 as amended by Ontario Statutes 1951, chapter 25, 1953, chapter 36, 1954, chapter 29, 1955, chapter 21, ultra vires the Ontario Legislature? Clause (l) of subs. (1) of s. 3 referred to, as re-enacted by 1955, c. 21, s. 2, provides : 3. (1) The Board may, … (l) authorize any marketing agency appointed under a scheme to conduct a pool or pools for the distribution of all moneys received from the sale of the regulated product and requiring any such marketing agency, after deducting all necessary and proper disbursements and expenses, to distribute the proceeds of sale in such manner that each person receives a share of the total proceeds in relation to the amount, variety, size, grade and class of the regulated product delivered by him and to make an initial payment on delivery of the product and subsequent payments until the total net proceeds are distributed. For a proper understanding of the terms used in this clause and of the provisions of the Act it is necessary to refer to what is proposed by the latter. The Board is the Farm Products Marketing Board and " 'farm products' includes animals, meats, eggs, poultry, wool, dairy products, grains, seeds, fruit, fruit products, vegetables, vegetable products, maple products, honey, tobacco and such articles of food or drink manufactured or derived in whole or in part from any such product and such other natural products of agriculture as may be designated by the regulations" (s. 1(b) ). " 'Regulated product' means a farm product in respect of which a scheme is in force" (s. 1(g)). Provision is made for the formulation of a scheme for the marketing or regulating of any farm product upon the petition of at least 10 per cent. of all producers engaged in the production of the farm product in Ontario, or in that part thereof to which the proposed scheme is to apply. " "'Marketing' means buying, selling and offering for sale and includes advertising, assembling, financing, packing and shipping for sale or storage and transporting in any manner by any person, and 'market' and 'marketed' have corresponding meanings" (s. 1(e), as re-enacted by 1955, c. 21, s. 1). The scheme may provide for a "marketing agency" designated by the Board in its regulations. Once the scheme is approved by the Board the latter's regulations will apply according to the farm products dealt with thereby. It seems plain that the Province may regulate a transaction of sale and purchase in Ontario between a resident of the Province and one who resides outside its limits; that is, if an individual in Quebec comes to Ontario and there buys a hog, or vegetables, or peaches, the mere fact that he has the intention to take them from Ontario to Quebec does not deprive the Legislature of its power to regulate the transaction, as is evidenced by such enactments as The Sale of Goods Act, R.S.O. 1950, c. 345. That is a matter of the regulation of contracts and not of trade as trade and in that respect the intention of the purchaser is immaterial. However, if the hog be sold to a packing plant or the vegetables or peaches to a cannery, the products of those establishments in the course of trade may be dealt with by the Legislature or by Parliament depending, on the one hand, upon whether all the products are sold or intended for sale within the Province or, on the other, whether some of them are sold or intended for sale beyond Provincial limits. It is, I think, impossible to fix any minimum proportion of such last-mentioned sales or intended sales as determining the jurisdiction of Parliament. This applies to the sale by the original owner. Once a statute aims at "regulation of trade in matters of inter-provincial concern" (The Citizens Insurance Company of Canada v. Parsons; The Queen Insurance Company v. Parsons[1]), it is beyond the competence of a Provincial Legislature. The ambit of head 2 of s. 91 of the British North America Act, "The Regulation of Trade and Commerce" has been considerably enlarged by decisions of the Judicial 'Committee and expressions used in some of its earlier judgments must be read in the light of its later pronouncements, as is pointed out by Sir Lyman Duff in Re Alberta Statutes[2]. In fact, his judgment in Re The Natural Products Marketing Act, 1934[3], which is justly considered as the locus classicus, must be read in conjunction with and subject to his remarks in the later case. The concept of trade and commerce, the regulation of which is confided to Parliament, is entirely separate and distinct from the regulation of mere sale and purchase agreements. Once an article enters into the flow of interprovincial or external trade, the subject-matter and all its attendant circumstances cease to be a mere matter of local concern. No change has taken place in the theory underlying the construction of the British North America Act that what is not within the legislative jurisdiction of Parliament must be within that of the Provincial Legislatures. This, of course, still leaves the question as to how far either may proceed, and, as Lord Atkin pointed out in the Natural Products Marketing Act case, supra, at p. 389, neither party may leave its own sphere and encroach upon that of another. Mr. Robinette suggested that there was an inconsistency between the judgment of Mr. Justice Duff in Lawson v. Interior Tree Fruit and Vegetable Committee of Direction[4], and his judgment in The King v. Eastern Terminal Elevator Company[5]. However, all that was decided in the latter case was that Parliament had exceeded its jurisdiction while in the former it was held that the British Columbia statute under review was ultra vires. It was contended by Mr. Pepper that the Combines Investigation Act, R.S.C. 1952, c. 314, and ss. 411 and 412 of the Criminal Code, 1953-54 (Can.), c. 51, and the Agricultural Prices Support Act, R.S.C. 1952, c. 3, are relevant and prevent the Ontario Legislature from enacting clause (l) of subs. (1) of s. 3 of The Farm Products Marketing Act and therefore the administrative agencies provided for by that Act, from operating. The point is determined against that contention as to the Combines Investigation Act by the decision of this Court in Ontario Boys' Wear Limited et al. v. The Advisory Committee et al.[6]. With respect to that Act and also to the sections of the Criminal Code referred to, it cannot be said that any scheme otherwise within the authority of the Legislature is against the public interest when the Legislature is seized of the power and, indeed, the obligation to take care of that interest in the Province. The Agricultural Prices Support Act and in fact all Acts of Canada of a similar nature contain merely provisions for the assistance of agriculture. A final argument was advanced to the effect that the legislation conflicted with s. 25 of the Live Stock and Live Stock Products Act, R.S.C. 1952, c. 167, which reads: 25. Notwithstanding anything in this Part, any farmer or drover may sell his own live stock at a stockyard on his own account. This is merely a provision in ease of the other sections of that particular Act. In view of the wording of question 1, I take clause (l) of subs. (1) of s. 3 of The Farm Products Marketing Act as being a successful endeavour on the part of the Ontario Legislature to fulfil its part while still keeping within the ambit of its powers. On the assumption directed to be made and reading the clause so as not to apply to trans-actions which I have indicated would be of a class beyond the powers of the Legislature, my answer to the first question is "No". Question 2 asks whether a certain regulation as amended respecting the marketing of hogs is ultra vires the Lieutenant-Governor in Council. The order in council was made in pursuance of the statute and, as the wording may be construed as contemplating only local trade, the objection, in view of what has already been stated, is without foundation. Nor can I agree (a) that the scheme does not contain substantive terms and therefore is really not a scheme at all; (b) that it is necessary that there should be prior approval by the producers. I assume that the regulation of the Farm Products Marketing Board referred to in question 3 deals only with the control of the sale of hogs for consumption within the Province, or to packing plants or other processors whose products will be consumed therein. The provision for licensing is not ultra vires and a company incorporated by letters patent under the Companies Act of Canada, with power to carry on the business of a packing plant throughout the nation, is bound to comply with a general licensing law. My answer to question 4 is that the order of The Ontario Hog Producers' Marketing Board fixing the service charges to be imposed by the marketing agency is not ultra vires the Board, as the matter is covered by the decision of the Privy Council in Shannon et al. v. Lower Mainland Dairy Products Board[7]). For the same reason, I think similar answers must be given to questions 5 and 6, the first relating to the marketing of peaches for processing and the latter to the marketing of vegetables for processing. As to questions 7 and 8, I agree with the reasons of my brother Rand. My answers to the questions are as follows: Question 1: On the assumption that the Act is restricted to intraprovincial transactions as defined in these reasons, the answer is No. Question 2: No. Question 3: Assuming that the Regulation deals only with the control of the sale of hogs for consumption within the Province, or to packing plants or other processors whose products will be consumed therein, the answer is No. Question 4: No. Question 5: No. Question 6: No. Question 7: On the interpretation given to the proposed amendment the answer is No. Question 8: No. TASCHEREAU J. agrees in the answers of Fauteux and Abbott JJ. RAND J.:—This reference raises questions going to the scope of Provincial authority over trade. They arise out of The Farm Products Marketing Act, R.S.O. 1950, c. 131, as amended, which deals comprehensively with the matter connoted by its name and out of certain schemes formed under it. Its object is to accord primary producers of farm products the advantages of various degrees of controlled marketing, for which it provides provincial and local machinery. General jurisdiction over its administration is exercised by the Farm Products Marketing Board; regulation is by way of schemes for the marketing of any product; under a scheme, a local board, district committees and county groups are organized; and the marketing may be carried out exclusively by an agency designated by the Board upon the recommendation of the local board. The questions put, which assume the Act to be limited in application to local trade, call for answers which make it necessary to examine and define the scope of local trade to the extent of the regulation provided. The enquiry must take into account regulatory power over acts and transactions which while objectively appearing to be consummated within the Province may involve or possess an interest of interprovincial or foreign trade, which for convenience I shall refer to as external trade. The products embraced include animals, meats, eggs, poultry, wool, dairy products, grains, seeds, fruit, fruit products, vegetables, vegetable products ... and ... articles of food or drink manufactured or derived in whole or in part from any such product. "Marketing" means buying, selling, assembling, packing, shipping for sale or storage and transporting in any manner by any person. The marketing board may establish negotiating agencies which may adopt or determine by agreement minimum prices and other features of marketing, and prohibit the marketing of any class, variety, grade or size of a product. It may require a licence to be taken out by every person for producing, marketing or processing a product with fees payable at various times and in different amounts. The Board may authorize an agency to control the times and places for marketing, the quantity, grade, class and price of products to be marketed, and to exercise other powers conferred by the statute on the Board. Although not specifically mentioned in s. 92 of the British North America Act, there is admittedly a field of trade within provincial power, and the head or heads of s. 92 from which it is to be deduced will be considered later. The power is a subtraction from the scope of the language conferring on the Dominion by head 2 of s. 91 exclusive authority to make laws in relation to the regulation of trade and commerce, and was derived under an interpretation of the Act which was found necessary in order to preserve from serious curtailment, if not from virtual extinction, the degree of autonomy which, as appears from the scheme of the Act as a whole, the provinces were intended to possess (per Duff J. in Lawson v. Interior Tree, Fruit and Vegetable Committee of Direction[8]. In examining the legislation for the purpose mentioned we should bear in mind Lord Atkin's admonition in Attorney-General for British Columbia v. Attorney-General for Canada et al.[9], that the legislation will have to be carefully framed, and will not be achieved by either party leaving its own sphere and encroaching upon that of the other. The definitive statement of the scope of Dominion and Provincial jurisdiction was made by Duff C.J. in Re The Natural Products Marketing Act, 1934[10]. The regulation of particular trades confined to the Province lies exclusively with the Legislature subject, it may be, to Dominion general regulation affecting all trade, and to such incidental intrusion by the Dominion as may be necessary to prevent the defeat of Dominion regulation; interprovincial and foreign trade are correspondingly the exclusive concern of Parliament. That statement is to be read with the judgment of this Court in The King v. Eastern Terminal Elevator Company[11], approved by the Judicial Committee in Attorney-General for British Columbia v. Attorney-General for Canada, supra, at p. 387, to the effect that Dominion regulation cannot embrace local trade merely because in undifferentiated subject-matter the external interest is dominant. But neither the original statement nor its approval furnishes a clear guide to the demarcation of the two classes when we approach as here the origination, the first stages of trade, including certain aspects of manufacture and production. That demarcation must observe this rule, that if in a trade activity, including manufacture or production, there is involved a matter of extraprovincial interest or concern its regulation thereafter in the aspect of trade is by that fact put beyond Provincial power. This is exemplified in Lawson v. Interior Tree Fruit and Vegetable Committee of Direction, supra, where the Province purported to regulate the time and quantity of shipment, the shippers, the price and the transportation of fruit and vegetables in both unsegregated and segregated local and interprovincial trade movements. A producer is entitled to dispose of his products beyond the Province without reference to a provincial marketing agency or price, shipping or other trade regulation ; and an outside purchaser is entitled with equal freedom to purchase and export. Processing is one of a number of trade services that may be given products in the course of reaching the consumer: milling (as of grain or lumber), sorting, packing, slaughtering, dressing, storing, transporting, etc. The producer or purchaser may desire to process the product either within or beyond the Province and if he engages for that with a local undertaking (using that expression in a non-technical sense), such as a packing plant—and it would apply to any sort of servicing—he takes that service as he finds it but free from such Provincial impositions as are strictly trade regulations such as prices or the specification of standards, which could no more be imposed than Provincial trade marks. Regulation of that nature could directly nullify external trade vital to the economy of the country. Trade arrangements reaching the dimensions of world agreements are now a commonplace; interprovincial trade, in which the Dominion is a single market, is of similar importance, and equally vital to the economic functioning of the country as a whole. The Dominion power implies responsibility for promoting and maintaining the vigour and growth of trade beyond Provincial confines, and the discharge of this duty must remain unembarrassed by local trade impediments. If the processing is restricted to external trade, it becomes an instrumentality of that trade and its single control as to prices, movements, standards, etc., by the Dominion follows: Re The Industrial Relations and Disputes Investigation Act[12]. The licensing of processing plants by the Province as a trade regulation is thus limited to their operations in local trade. Likewise the licensing of shippers, whether producers or purchasers, and the fixing of the terms and conditions of shipment, including prices, as trade regulation, where the goods are destined beyond the Province, would be beyond Provincial power. Local trade has in some cases been classed as a matter of property and civil rights and related to head 13 of s. 92, and the propriety of that allocation was questioned. The production and exchange of goods as an economic activity does not take place by virtue of positive law or civil right; it is assumed as part of the residual free activity of men upon or around which law is imposed. It has an identity of its own recognized by head 2 of s. 91. I cannot agree that its regulation under that head was intended as a species of matter under head 13 from which by the language of s. 91 it has been withdrawn. It happened that in The Citizens Insurance Company of Canada v. Parsons; The Queen Insurance Company v. Parsons[13], assuming insurance to be a trade, the commodity being dealt in was the making of contracts, and their relation to head 13 seemed obvious. But the true conception of trade (in contradistinction to the static nature of rights, civil or property) is that of a dynamic, the creation and flow of goods from production to consumption or utilization, as an individualized activity. The conclusive answer to the question is furnished by a consideration of s. 94 which provides for the uniformity in Ontario, New Brunswick and Nova Scotia of "all or any of the laws relative to property and civil rights". It is, I think, quite impossible to include within this provision regulation of local trades; that appears to be one feature of the internal economy of each Province in which no such uniformity could ever be expected. What the language is directed to are laws relating to civil status and capacity, contracts, torts and real and personal property in the common law Provinces, jural constructs springing from the same roots, already more or less uniform, and lending themselves to more or less permanence. In some degree uniformity has been achieved by individual Provincial action in such legislation, for instance, as that of contributory negligence. Head 16 contains what may be called the residuary power of the Province: Attorney-General for Ontario v. Attorney-General for the Dominion et al.[14], and it is within that residue that the autonomy of the Province in local matters, so far as it might be affected by trade regulation, is to be preserved. As was recognized in the Parsons case, supra, this points up the underlying division of the matters of legislation into those which are primarily of national and those of local import. But this is not intended to derogate from regulation as well as taxation of local trade through licence under head 9 of s. 92, nor from its support under head 13. It is important to keep in mind, as already observed, that the broad language of head 2 of s. 91 has been curtailed not by any express language of the statute but as a necessary implication of the fundamental division of powers effected by it. The interpretation of this head has undergone a transformation. When it was first considered by this Court in Severn v. The Queen[15] and The City of Fredericton v. The Queen[16], the majority views did not envisage the limitation now established; that was introduced by the judgment in the Parsons case, supra. The nadir of its scope was reached in what seemed its restriction to a function ancillary to other Dominion powers; but that view has been irretrievably scotched. The powers of this Court in the exercise of its jurisdiction are no less in scope than those formerly exercised in relation to Canada by the Judicial Committee. From time to time the Committee has modified the language used by it in the attribution of legislation to the various heads of ss. 91 and 92, and in its general interpretative formulations, and that incident of judicial power must, now, in the same manner and with the same authority, wherever deemed necessary, be exercised in revising or restating those formulations that have come down to us. This is a function inseparable from constitutional decision. It involves no departure from the basic principles of jurisdictional distribution; it is rather a refinement of interpretation in application to the particularized and evolving features and aspects of matters which the intensive and extensive expansion of the life of the country inevitably presents. The reaches of trade may extend to aspects of manufacture. In Attorney-General for Ontario v. Attorney-General for the Dominion et al., supra, the Judicial Committee dealt with the question whether the Province could prohibit the manufacture within the Province of intoxicating liquor, to which the answer was given that, in the absence of conflicting legislation of Parliament, there would be jurisdiction to that effect if it were shown that the manufacture was carried on under such circumstances and conditions as to make its prohibition a merely local matter in the Province. This involves a limitation of the power of the Province to interdict, as a trade matter, the manufacture or production of articles destined for external trade. Admittedly, however, local regulation may affect that trade: wages, workmen's compensation, insurance, taxes and other items that furnish what may be called the local conditions underlying economic activity leading to trade. The federal character of our constitution places limits on legislative acts in relation to matters which as an entirety span, so to speak, the boundary between the two jurisdictions. In The King v. Eastern Terminal Elevator Company, supra, for example, there was a common storage of grain destined both to local and external trade. The situation in City of Montreal v. Montreal Street Railway[17] was equally striking: there Parliament was held incapable of imposing through rates over a local railway on traffic passing between points on that line and points on a connecting Dominion railway; the only regulation open was declared to be parallel action by Legislature and Parliament, each operating only on its own instrumentality. Although by that means the substantial equivalent of a single administration may be attained, there is a constitutional difference between that co-operating action and action by an overriding jurisdiction. It follows that trade regulation by a Province or the Dominion, acting alone, related to local or external trade respectively, before the segregation of products or manufactures of each class is reached, is impracticable, with the only effective means open, apart from conditional regulation, being that of co-operative action; this, as in some situations already in effect, may take the form of a single board to administer regulations of both on agreed measures. On the foregoing interpretation of the scope of Provincial regulation of trade, the questions put to us may now be considered. Three of them go to the validity of two provisions of the Act, s. 3(1) (l), authorizing the marketing of a product by means of a pool, and a proposed amendment, para. (ss), to s. 7(1) authorizing the purchase of the surplus of a regulated product and its marketing and the use of licence fees to recoup any loss suffered. The remaining five questions go to regulations made in one case by the Lieutenant-Governor in council, in three cases by the Farm Products Marketing Board, and in one by The Ontario Hog Producers' Marketing Board. Clause (l) of subs. (1) of s. 3 of the statute reads: The Board may, … authorize any marketing agency appointed under a scheme to conduct a pool or pools for the distribution of all moneys received from the sale of the regulated product and requiring any such marketing agency, after deducting all necessary and proper disbursements and expenses, to distribute the proceeds of sale in such manner that each person receives a share of the total proceeds in relation to the amount, variety, size, grade and class of the regulated product delivered by him and to make an initial payment on delivery of the product and subsequent payments until the total net proceeds are distributed. Co-operative disposal may take different forms: it may be that of an exclusive local marketing by an agency, either as owner or agent, by which the products are disposed of and the returns equalized, a form, I should say, within the authority of the Province; or, in the interest of convenience and economy, the producers, as contemplated by the Act here, would make their own sales with all moneys made returnable to the agency, for the recovery

Re The Farm Products Marketing Act

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R v Brown

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Re The Farm Products Marketing Act

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R v Brown

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