Brant Dairy Co. v. Milk Commission of Ontario

Brant Dairy Co. v. Milk Commission of Ontario
Collection
Supreme Court Judgments
Date
1972-10-18
Report
[1973] SCR 131
Judges
Fauteux, Joseph Honoré Gérald; Abbott, Douglas Charles; Martland, Ronald; Judson, Wilfred; Ritchie, Roland Almon; Hall, Emmett Matthew; Spence, Wishart Flett; Pigeon, Louis-Philippe; Laskin, Bora
On appeal from
Ontario
Subjects
Administrative law
Decision Content
Supreme Court of Canada
Brant Dairy Co. v. Milk Commission of Ontario, [1973] S.C.R. 131
Date: 1972-10-18
Brant Dairy Company Limited and Walkerton Dairies Limited (Plaintiffs) Appellants;
and
The Milk Commission of Ontario and The Ontario Milk Marketing Board (Defendants) Respondents.
1972: March 20, 21, 22; 1972: October 18.
Present: Fauteux C.J. and Abbott, Martland, Judson, Ritchie, Hall, Spence, Pigeon and Laskin JJ.
ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.
Administrative law—Authority of Milk Commission to subdelegate to Marketing Board powers to make regulations with respect to milk—Whether regulations made by Board ultra vires—Applicability to appellants as producers, processors and distributors—Constitutional validity of regulations—The Milk Act, 1965 (Ont.), c. 72, ss. 8(1), (6), 11(2), 12(2)—O. Regs. 294/65, 52/68, 68/68, 70/68, 71/68.
The appellants, producers, processors and distributors of milk (and, in the case of the first appellant, also a transporter of milk), brought an action against the Milk Commission of Ontario and the Ontario Milk Marketing Board in which they sought a judgment declaring: (a) that Regulation 294/65 made by the Commission is ultra vires; (b) that four Regulations made by the Board, 52/68, 68/68, 70/68, 71/68 are ultra vires; and (c) that Regulations 52/68 and 70/68 of the Board do not apply to them as a result of ss. 11 and 12 of The Milk Act, 1965. The trial judge dismissed the action and the Court of Appeal affirmed his judgment.
In this Court, for the first time in the litigation, the appellants raised the question of the constitutional validity of the regulations under The Milk Act, 1965 as invading the exclusive power of Parliament in relation to interprovincial trade or as exceeding provincial legislative authority in allegedly encompassing extra-provincial and interprovincial milk marketing.
Held (Abbott, Martland, Judson and Ritchie JJ. dissenting): The appeal should be allowed and the orders of the Ontario Court of Appeal and of the trial judge set aside in so far as they sustained the validity of the whole of O. Reg. 52/68 and O. Reg. 68/68; these orders should be modified by a declaration that s. 4 of O. Reg. 52/68 and s. 3(4) of O. Reg. 68/68 are ultra vires.
With respect to the constitutional question raised by the appellants, all members of the Court agreed that it failed.
Per Fauteux C.J. and Hall, Pigeon and Laskin JJ.: The attack on O. Reg. 294/65 (which delegates certain of the Commission’s powers to the Board) failed, as did also the respective attacks on s. (3) (which requires every producer to sell the milk produced by him to the Board, and prohibits the sale to any other persons and also prohibits any person other than the Board from buying such milk) and s. (7) (which regulates transportation) of O. Reg. 52/68, on O. Reg. 70/68 (which, inter alia, requires processors to purchase milk from the Board and only from the Board) and on O. Reg. 71/68 (which deals in detail with transportation).
Section 4 of O. Reg. 52/68 is ultra vires. It purports to carry out what is delegated to the Board under subss. (i), (ii), (iii) and (iv) of s. 6 (i) of the Commission’s Regulation 294/65. These provisions of the Commission’s regulation merely repeat the terms of para. 11 of s. 8(1) of The Milk Act with the substitution of the words “marketing board” for the word “Commission” in the statute. Paragraph 11 of s. 8(1) is a “providing” clause; the Commission, and, by delegation, the Board are authorized to provide by regulation for a quota system and for quotas. What the Board has done has been to exercise the power in the very terms in which it was given. It has not established a quota system and allotted quotas, but has simply repeated the formula of the statute, specifying no standards and leaving everything in its discretion.
The fact that the powers conferred are to be carried out on a basis that the Board deems proper does not entitle it to keep its standards out of the regulation. The “deem proper” clause of the empowering statute gives the Board (as subdelegate) a wide scope in setting up a quota system and in fixing quotas but it does not allow the Board to escape its obligation to embody its policies in a regulation.
A statutory body which is empowered to do something by regulation does not act within its authority by simply repeating the power in a regulation in the words in which it was conferred. That evades exercise of the power and, indeed, turns a legislative power into an administrative one. It amounts to a redelegation by the Board to itself in a form different from that originally authorized; and that this is illegal is evident from the judgment of this Court in Attorney General of Canada v. Brent, infra.
For the same reasons, s. 3(4) of O. Reg. 68/68 (which deals with the licensing of milk producers) is also ultra vires. The provision in question is an exercise of the delegated power set out in s. 6 (c) of O. Reg. 294/65 and comes directly from (and repeats in its words) the power conferred upon the Commission by para. 3 of s. 8(1) of the Act.
Per Fauteux C.J. and Abbott, Martland, Judson, Ritchie, Hall, Pigeon and Laskin JJ.: The appellants’ contention that ss. 11 and 12 of The Milk Act exempt them from the regulations requiring them to sell their production to the Board and then purchase from the Board such quantities as they require for their processing operation was rejected.
Per Spence J.: The appeal should be allowed as outlined by Laskin J. and in addition s. 3 of O. Reg. 52/68 and ss. 3 and 5 of O. Reg. 70/68 should be set aside. The said s. 3 of O. Reg. 52/68 and ss. 3 and 5 of O. Reg. 70/68 are ultra vires as being contra to the plain provisions of s. 11(2) and s. 12(2) of The Milk Act and therefore beyond any power contained therein.
Per Abbott, Martland, Judson and Ritchie JJ., dissenting: The judgments in the Courts below dismissing the declaratory action should be affirmed.
What the Commission has done in O. Reg. 294/65 is to delegate to the Board its powers as to licensing and quota fixing as defined in s. 8(1), para. 3, and s. 8(1), para. 11, in the precise terms of the Act. There is no requirement in the Act either as to licences or quotas that the Commission itself should fix standards, and it has under the statute the power to delegate to the Board all its discretionary powers with reference to these two matters.
The objections against the four regulations made by the Board, 52/68, 68/68, 70/68, 71/68, failed. [Attorney General of Canada v. Brent, [1956] S.C.R. 318; Verdun v. Sun Oil Co, Ltd., [1952] 1 S.C.R. 222, applied; Robbins et al. v. Ontario Flue-Cured Tobacco Growers’ Marketing Board, [1965] S.C.R. 431, not followed; Mungoni v. Attorney-General of Northern Rhodesia, [1960] A.C. 337; Reference re Regulations (Chemicals), [1943] S.C.R. 1, referred to; Crawford et al. v. Attorney-General of British Columbia et al., [1960] S.C.R. 346, distinguished.]
APPEAL from a judgment of the Court of Appeal for Ontario[1], dismissing an appeal from a judgment of Donohue J. Appeal allowed, Abbott, Martland, Judson and Ritchie JJ. dissenting.
B.H. Kellock, for the plaintiffs, appellants.
J.J. Robinette, Q.C., and H.E. Harris, Q.C., for the defendant, respondent, Ontario Milk Marketing Board.
C.L. Dubin, Q.C., F.J. Gallant, Q.C., and R.P. Armstrong, for the defendant, respondent, Milk Commission of Ontario.
T.B. Smith, for the Attorney General of Canada.
John D. Hilton, Q.C., for the Attorney-General of Ontario and Minister of Justice.
M. Trudeau, Q.C., for the Attorney-General of Quebec.
G.S. Cumming, Q.C., for the Attorney-General of British Columbia.
The judgment of Fauteux C.J. and of Hall, Pigeon and Laskin JJ. was delivered by
LASKIN J.—The legal questions in this appeal arise out of the contention of the appellants that as owners of dairy farms with their own herds of cattle, carrying on integrated operations of producing, processing and distributing milk and fluid milk products, they are not subject to regulatory authority asserted over them under The Milk Act, 1965 (Ont.), c. 72, and certain regulations thereunder. They allege that it is unlawful to require them to sell their milk to the Ontario Milk Marketing Board, and unlawful to oblige them to buy milk from the Board for processing and distribution to customers. One of the appellants, Brant Dairy Company Limited, is also a transporter of milk, and claims that this activity too is beyond lawful regulation by the Board.
The argument in this Court reached the question of the constitutional validity of the regulations under The Milk Act as invading the exclusive power of Parliament in relation to inter-provincial trade or as exceeding provincial legislative authority in allegedly encompassing extra-provincial and interprovincial milk marketing. The Act itself is not challenged, and I question therefore whether a constitutional issue in the strict sense is raised by regulations which (if the submissions of the appellants are correct) would fall on the simple ground that they were beyond the powers delegated to the authorities making them. Be that as it may, it is by implication alone and not through any express terms of the regulations that their validity is challenged. In such a case, and absent any evidence of administrative practice under the regulations that would support the claim of invalidity, a construction comporting with the limits of provincial legislative competence must be given. The constitutional challenge therefore fails.
A second contention of the appellants, which also goes to the heart of their case, is that O. Reg. 294/65 (and especially s. 6(c) and (i)) is ultra vires the Milk Commission of Ontario which promulgated it; and that O. Reg. 52/68 (particularly ss. 3, 4 and 7), O. Reg. 68/68 (particularly s. 3), O. Reg. 70/68 (particularly ss. 3, 4 and 5) and O. Reg. 71/68 are ultra vires the Ontario Milk Marketing Board which issued them. An understanding of the thrust of this submission necessitates a reference to the scheme of The Milk Act, to the delegated powers which it confers and to the terms of the impugned regulations.
The Act is very much skeleton legislation. Section 2 declares its purpose, as follows:
2. The purpose and intent of this Act is to provide for the control and regulation in any or all respects of,
(a) the marketing within Ontario of milk, cream or cheese, or any combination thereof, including the prohibition of such marketing in whole or in part; and
(b) the quality of milk, milk products and fluid milk products within Ontario.
It establishes the Milk Commission of Ontario as a body corporate responsible to the Minister of Agriculture, and between them they hold the key to the operation of the Act under the supervising authority of the Lieutenant-Governor in Council.
Regulatory authority in respect of milk, cream or cheese depends initially upon the establishment of a plan for which a recommendation to the Minister is made by the Commission acting favourably upon a petition of producers (s. 6). Paramount authority for the establishment of plans and for constituting marketing boards to administer them is conferred upon the Lieutenant-Governor in Council (s. 7(1)). The plan in force in the present case, the Ontario Milk Marketing Plan, referable to milk and cheese, was promulgated on October 28, 1965, by the Lieutenant-Governor in Council under O. Reg. 202/65, concurrently with the proclamation of The Milk Act itself, and the regulation established the Ontario Milk Marketing Board thereunder.
The advent of this plan opened the way for the Commission to exercise its extensive powers, in respect of milk and cheese as regulated products, under ss. 4(2) and 8 of the Act. The Act nowhere confers any original delegated regulatory authority upon a marketing board constituted under a plan (except that under s. 10 a marketing board is authorized to inspect books, records and premises), but makes it dependent upon subdelegation to it of powers of the Commission. This subdelegation is authorized by ss. 4(4) and 8(6), to which I will make further reference.
The Commission’s authority is conferred in different terms under s. 4 and under s. 8 respectively, and the difference is, in my view, important on the question of the validity of the Board’s regulations that are attacked in this case. Before turning to these sections, I wish to refer to certain definitions under s. 1 of the Act, as follows:
9. “distributor” means a person engaged in selling or distributing fluid milk products directly or indirectly to consumers;
11. “fluid milk products” means the classes of milk and milk products processed from grade A milk and designated as fluid milk products in the regulations;
12. “grade A milk” means milk designated as grade A milk in the regulations;
15. “marketing” means buying, selling and offering for sale, and includes advertising, assembling, storing, distributing, financing, packing and shipping and transporting in any manner by any person, and “market” and “marketed” have corresponding meanings;
23. “processing” means heating, pasteurizing, evaporating, drying, churning, freezing, separating into component parts, combining with other substances by any process or otherwise treating milk or cream in the manufacture or preparation of milk products or fluid milk products;
24. “processor” means a person engaged in the processing of milk products or fluid milk products;
25. “producer” means a producer of milk, cream or cheese;
27. “regulated product” means milk, cream or cheese, or any combination thereof, in respect of which a plan is in force; Section 4 opens by providing in subs. (1) that “the Commission shall exercise such powers and perform such duties as are conferred or imposed upon it by or under this Act”. It is followed by s. 4(2) which states that “Without limiting the generality of subsection 1, the Commission may” do a series of things enumerated under eleven paragraphs (a) to (k) inclusive. Among the things that it may do are these:
(d) require persons engaged in producing or marketing a regulated product to register their names, addresses and occupations with the Commission or marketing board;
(e) require persons engaged in producing or marketing a regulated product to furnish such information relating to the production or marketing of the regulated product as the Commission or marketing board determines;
(f) appoint persons to inspect the books, records, documents and premises of persons engaged in producing or marketing a regulated product;
(g) stimulate, increase and improve the marketing of milk and milk products by such means as it deems proper;
(h) co-operate with a marketing board or a marketing agency of Canada or of any province of Canada for the purpose of marketing any regulated product;
(k) take such action and make such orders and issue such directions as are necessary to enforce the due observance and carrying out of the provisions of this Act, the regulations, any plan or any agreement or award.
Then comes a subdelegation power, embraced in s. 4(4) which reads:
The Commission may delegate to a marketing board such of its powers under subsection 2 as it deems necessary and may at any time terminate any such delegation.
In contrast to s. 4, which on its face entitles the Commission to proceed on an ad hoc basis with respect to the matters enumerated, s. 8 obliges the Commission to act thereunder by making regulations. Section 8(1) begins with these words:
The Commission may make regulations with respect to regulated products generally or to any regu- lated product, and, without limiting the generality of the foregoing, may make regulations,
and there are then listed, by consecutive numbering, forty-five paragraphs which delineate what may be the subject-matter of the regulations. Among these paragraphs are the following:
1. providing for the licensing of any or all persons before commencing or continuing to engage in the producing, processing or marketing of a regulated product;
2. prohibiting persons from engaging in the producing, processing or marketing of any regulated product, except under the authority of a licence;
3. providing for the refusal to issue a licence to commence to engage in the producing, processing or marketing of a regulated product where the applicant is not qualified by experience, financial responsibility or equipment to properly engage in the business for which the application was made, or for any other reason that the Commission deems proper;
4. providing for the suspension or revocation of, or the refusal to issue or renew, a licence to continue to engage in the producing, processing or marketing of a regulated product, for failure to observe, perform or carry out the provisions of this Act, the regulations, any plan or any order or direction of the Commission or marketing board;
11. providing for,
i. the marketing of a regulated product on a quota basis,
ii. the fixing and allotting to persons of quotas for the marketing of a regulated product on such basis as the Commission deems proper,
iii. the refusing to fix and allot to any person a quota for the marketing of a regulated product for any reason that the Commission deems proper,
iv. the cancelling or reducing of, or the refusing to increase, a quota fixed and allotted to any person for the marketing of a regulated product for any reason that the Commission deems proper, and v. the terms and conditions upon which a person may market a regulated product in excess of the quota fixed and allotted to him;
13. providing for the control and regulation of any regulated product, including the times and places at which the regulated product may be marketed;
16. authorizing a marketing board to determine from time to time the price or prices that shall be paid for the regulated product or any class, variety, grade or size of the regulated product, and to determine different prices for different parts of Ontario;
18. authorizing a marketing board to pay from service charges imposed under paragraph 17 its expenses in carrying out the purposes of the plan;
19. authorizing a marketing board to use any class of licence fees and other moneys payable to it for the purposes of paying the expenses of the marketing board, carrying out and enforcing this Act and the regulations and carrying out the purposes of the plan under which the marketing board is constituted;
20. authorizing a marketing board to establish a fund in connection with the plan for the payment of any moneys that may be required for the purposes mentioned in paragraph 19;
31. providing that the regulated product shall be marketed by, from or through the marketing board, and prohibiting any person from marketing any of the regulated product except by, from or through the marketing board;
32. authorizing any marketing board to prohibit the marketing of any class, variety, grade or size of any regulated product;
33. requiring any person who produces a regulated product to offer to sell and to sell the regulated product to or through the marketing board constituted to administer the plan under which the regulated product is regulated;
34. prohibiting any person from processing, packing or packaging any of the regulated product that has not been sold to, by or through the marketing board constituted to administer the plan established for the control and regulation of the marketing of the regulated product; 35. authorizing any marketing board to require the price or prices of the regulated product to be paid to or through the marketing board; and to recover such price or prices by suit in a court of competent jurisdiction;
36. authorizing a marketing board to purchase or otherwise acquire such quantity or quantities of the regulated product as the marketing board deems advisable and to sell or otherwise dispose of such quantity or quantities of the regulated product so purchased or otherwise acquired;
37. authorizing any marketing board to conduct a pool or pools for the distribution of all moneys received from the sale of the regulated product, and requiring such marketing board, after deducting all necessary and proper disbursements and expenses, to distribute the remainder of the moneys received from the sale in such manner that every producer receives a share of the remainder of the moneys received from the sale in relation to the amount, class, variety, grade and size of the regulated product delivered by him, and authorizing such marketing board to make an initial payment on delivery of the regulated product and subsequent payments until all the remainder of the moneys received from the sale is distributed to the producers;
Subdelegation of the Commission’s regulation-making powers under s. 8(1) to a marketing board is authorized by s. 8(6) which reads:
The Commission may delegate to a marketing board such of its powers under subsection 1 as it deems necessary, and may at any time terminate any such delegation.
I observe here that the regulation-making power of the Commission is, broadly speaking, of two kinds or classes. One class concerns regulations “providing” “prohibiting” or “requiring” certain things. The second class (as in paras. 16, 18, 19, 20, 32, 35, 36 and 37, all of which have been quoted above) concerns regulations “authorizing” a marketing board to do the things enumerated. The distinction between the two classes is one that the Commission observed in its O.Reg. 294/65, to which I will refer presently. It is, in my view, an important distinction that bears directly on the validity of the regulations of the Board that are challenged in this case.
For about three years after The Milk Act was enacted and proclaimed, there were no powers exercised or regulations made that interfered with the appellants’ conduct of their businesses. After the Ontario Milk Marketing Plan had been established by O. Reg. 202/65 of October 28, 1965, the Commission issued O. Reg. 294/65, effective November 1, 1965. This regulation was a wholesale delegation to the Board of certain of the Commission’s powers under s. 4(2) of the Act, as appears by s. 5 of the regulation, and also of certain of the Commission’s regulation-making authority, as appears by s. 6 of the regulation. I reproduce s. 5 of the regulation which, as a comparison will show, is exactly in the words of s. 4(2)(d)(e)(g) and (h) of the Act:
5. The Commission delegates to the marketing board the power,
(a) to require persons engaged in producing or marketing milk to register their names, addresses and occupations with the marketing board;
(b) to require persons engaged in producing or marketing milk to furnish such information relating to the production or marketing of milk as the marketing board determines;
(c) to stimulate, increase and improve the marketing of milk by such means as the marketing board deems proper;
(d) to co-operate with a marketing board or a marketing agency of Canada or of any province of Canada for the purpose of marketing milk.
Section 6 of the Commission’s regulation aforementioned delegates to the Board the substantial portion of the Commission’s “providing”, “prohibiting” and “requiring” authority. Nineteen clauses, (a) to (s), are included in s. 6, reproducing the wording, literally in most cases, of paras. 1 to 8 inclusive of s. 8(1) of the Act, paras. 11 to 15 inclusive of the said s. 8(1), and paras. 17, 33, 34, 44, 45 and 31 thereof, in that order. Section 7 of the Commission’s regulation acts upon its power to “authorize” a marketing board to do the matters enumerated in paras. 16, 18, 19, 20, 32, 35, 36, 37 and 43 of the Act and uses the terms thereof.
The effect of O. Reg. 294/65, in its delegation to the Board was, in the first place, to substitute the Board for the Commission for the exercise of the powers granted by s. 4(2) of The Milk Act; second, it amounted to an exercise by the Commission of various of its powers under s. 8(1) to “authorize” the Board to do the things specified in the powers, and in this respect it put the Board in the same position as to those powers as it was in by the delegation to it of the powers under s. 4(2) of the Act; and third, it passed to the Board the various powers of the Commission to “provide”, “prohibit” or “require” certain things by regulation. (The italicizing is mine.)
The Board acted on the foregoing delegated authority under the four regulations which are questioned by the appellants, namely O. Reg. 52/68, filed on February 26, 1968; O. Reg. 68/ 68, filed on March 1, 1968; O. Reg. 70/68 and 71/68, filed on that same day. It is by virtue of these orders that The Milk Act, about three years after its enactment, took effect against the appellants.
Before dealing with the legal effect of these regulations of the Board, I propose to deal with the attack by the appellants on s. 6(c) and (i) of the Commission’s regulation O. Reg. 294/65. These provisions of that regulation read as follows:
6. The Commission delegates to the marketing board, its powers to make regulations with respect to milk,
(c) providing for the refusal to issue a licence to commence to engage in the producing of milk where the applicant is not qualified by experience, financial responsibility or equipment to properly engage in the business for which the- application was made, or for any other reason that the marketing board deems proper;
(i) providing for,
(i) the marketing of milk on a quota basis,
(ii) the fixing and allotting to persons of quotas for the marketing of milk on such basis as the marketing board deems proper,
(iii) the refusing to fix and allot to any person a quota for the marketing of milk for any reason that the marketing board deems proper,
(iv) the cancelling or reducing of, or the refusing to increase, a quota fixed and allotted to any person for the marketing of milk for any reason that the marketing board deems proper, and
(v) the terms and conditions upon which a person may market milk in excess of the quota fixed and allotted to him;
The quoted provisions delegate to the Board the Commission’s powers under paras. 3 and 11 of s. 8(1) of the Act. The basis of the attack on this delegation is that the Commission’s powers under these paragraphs were associated with a duty conferred on it alone; the language of the Act was express that what “the Commission deems proper” was to govern. I cannot agree with this reading of paras. 3 and 11 of s. 8(1). In authorizing unqualified delegation by the Commission to the Board, the Act envisaged a substitution of the latter for the former to the extent that the Commission deemed it proper to do so. I take this to mean that the Commission could lawfully invest the Board with the discretion originally committed to the Commission in the carrying out of the powers conferred by the Act.
The discretions associated with the powers vested in the Commission by paras. 3 and 11 were as fully delegable as the powers themselves, of which, indeed, they are inseparable parts: see Mungoni v. Attorney-General of Northern Rhodesia[2], at p. 350. If the contrast with the power set out in s. 4(2) (e) of the Act (ending with the words “as the Commission or marketing board deems proper”) is relied on, my view would be that it leads to the opposite conclusion to that urged by counsel for the appellants; and that is that s. 4(2) is couched so as to permit a partial delegation of an otherwise integrated power and discretion, while paras. 3 and 11 of s. 8(1) do not permit an associated operation of the powers thereunder by the Commission and the Board concurrently; rather, there must be delegation of an entirety or none at all. In my opinion, therefore, the attack on O. Reg. 294/65 fails.
Turning to the Board regulations above-mentioned, the challenge to O. Reg. 52/68 is directed particularly to ss. 3, 4 and 7 thereof, which are in these terms:
3. (1) Every producer shall offer to sell and sell the milk produced by him to the marketing board.
(2) No producer shall offer to sell or sell the milk produced by him to any person other than the marketing board.
(3) No person other than the marketing board shall buy milk from a producer.
4. (1) All grade A milk bought by the marketing board from a producer shall be sold by the producer and bought by the marketing board on a quota basis.
(2) The marketing board may fix and allot to persons quotas for the marketing of milk on such basis as the marketing board deems proper.
(3) The marketing board may refuse to fix and allot to any person a quota for the marketing of milk for any reason that it deems proper.
(4) The marketing board may cancel or reduce or refuse to increase the quota fixed and allotted to any person under subsection 2 for any reason that it deems proper.
7. (1) The milk of producers shall be transported by persons appointed by the marketing board as its agents for that purpose.
(2) No person shall transport milk produced by a producer other than a person appointed by the marketing board as its agent for that purpose. Section 3 of O. Reg. 52/68 is an exercise of the delegated power found in s. 6(o) of O. Reg. 294/65 which, in turn, was a delegation by the Commission, in almost literal terms, of the power conferred upon it by s. 8(1), para. 33 of the Act. I find the Board’s exercise of the delegated power unexceptionable; it has by regulation provided exactly what para. 33 required it, as a subdelegate, to do.
Section 4 of O. Reg. 52/68 is of another order. It purports to carry out what is delegated to it under subss. (i), (ii), (iii) and (iv) of s. 6(i) of the Commission’s Regulation 294/65. These provisions of the Commission’s regulation merely repeat the statutory terms of para. 11 of s. 8(1) with the substitution of the words “marketing board” for the word “Commission” in the statute. Paragraph 11 of s. 8(1) is a “providing” clause; the Commission, and, by delegation, the Board are authorized to provide by regulation for a quota system and for quotas. What the Board has done has been to exercise the power in the very terms in which it was given. It has not established a quota system and allotted quotas, but has simply repeated the formula of the statute, specifying no standards and leaving everything in its discretion.
I am of the opinion that s. 4 of O. Reg. 52/68 is ultra vires. The fact that the powers conferred are to be carried out on a basis that the Board deems proper does not entitle it to keep its standards out of the regulation. The “deem proper” clause of the empowering statute gives the Board (as subdelegate) a wide scope in setting up a quota system and in fixing quotas but it does not allow the Board to escape its obligation, as I read the statute, to embody its policies in a regulation.
A statutory body which is empowered to do something by regulation does not act within its authority by simply repeating the power in a regulation in the words in which it was conferred. That evades exercise of the power and, indeed, turns a legislative power into an administrative one. It amounts to a redelegation by the Board to itself in a form different from that originally authorized; and that this is illegal is evident from the judg- ment of this Court in Attorney General of Canada v. Brent[3].
In the Brent case, what was in issue was the exercise of power delegated to the Governor in Council by the Immigration Act to make regulations respecting enumerated matters. What the Governor in Council did was to embody the very powers in a regulation which confided their application to a special inquiry officer. This was held to be an invalid subdelegation; it converted the required reflection in a regulation of the opinion of the Governor in Council into an unregulated exercise from time to time of the opinion of a special inquiry officer.
The principle is the same here. The Board was required to legislate by regulation. Instead, it has purported to give itself random power to administer as it sees fit without any reference point in standards fixed by regulation.
The same point of principle that emerges from the Brent case was taken earlier in this Court in Verdun v. Sun Oil Co. Ltd.[4] There the municipality was authorized under provincial legislation to act by by-law, inter alia, to regulate the location within the municipality of industrial and commercial establishments and other buildings intended for special purposes, and to divide the municipality into districts or zones for the purpose of such regulation and, with respect to each of such districts or zones, to prescribe various matters enumerated in the provincial grant of authority. What the municipality did by by-law was (to quote the words of Fauteux J., as he then was, speaking for this Court) “to leave ultimately to the exclusive discretion of the members of the Council of the City, for the time being in office, what it was authorized by the provincial Legislature…to actually regulate by by-law” (at p. 229). The learned Justice of this Court went on to say this (and it is highly appropriate to the present case):
Thus, section 76 [of the by-law] effectively transforms an authority to regulate by legislation into a mere administrative and discretionary power to cancel by resolution a right which, untrammelled in the absence of any by-law, could only, in a proper one, be regulated.
It was contended that the validity of the s. 4 of O. Reg. 52/68 is established by the judgment of this Court in Robbins et al. v. Ontario Flue-Cured Tobacco Growers’ Marketing Board[5], which affirmed judgments by the Ontario Court of Appeal[6], and by Grant J.[7], rejecting a challenge to certain regulations made by the Tobacco Board in pursuance of powers delegated to it by the Ontario Farm Products Marketing Board. The judgments of this Court and of the Ontario Court of Appeal are founded on that of Grant J., and I propose to examine its rationale with reference to the issue whether the delegated power herein was exceeded in the sense that it was not exercised according to its terms. I need not enlarge on the proposition that a statutory body like the Board in this case, especially one which is a subdelegate, must stay strictly within its powers; and unless there is adequate statutory language to that end, as was found to exist in Reference re Regulations (Chemicals)[8], it cannot redelegate, either to itself or to any one else the powers conferred upon it alone to be exercised by regulation.
There is a similarity in the powers conferred upon the Ontario Farm Products Marketing Board in the Robbins case and those conferred upon the Commission in the present case. In the Robbins case too the Marketing Board was authorized to delegate its regulation-making powers to a local board. There, as here, it was given broad powers to make regulations under s. 8 (the same section number in both cases). Both The Farm Products Marketing Act, now R.S.O. 1970, c. 162, which was involved in the Robbins case, and The Milk Act were amended in their respective sections 8 by 1968-69 (Ont.), c. 37, s. 3(3) and by 1968-69 (Ont.), c. 67, s. 1, to add the following paragraph thereto (and I quote here the amendment to The Milk Act):
Where the Commission authorizes a marketing board to exercise any of the powers mentioned in subsection 1, the marketing board, in the exercise of such powers, may make regulations or orders or issue directions.
I point to this amendment as bearing directly on the issue raised by s. 4 of O. Reg. 52/68. In distinguishing regulations, orders and directions, it points up the legislative character of regulations. Nothing, in my opinion, turns on the inclusion in the aforesaid amendment of The Milk Act of a section providing that O. Reg. 294/65, O. Reg. 52/68, O. Reg. 68/68 and O./Reg. 70/68, inter alia, shall be deemed to have been made under The Milk Act as amended by the added clause above-quoted and shall be deemed to have been filed under The Regulations Act on the day of actual filing. The regulations in question remained such after as well as before the amendment.
The powers invoked in the Robbins case were not, however, only those under s. 8 as it had been amended by 1962-63 (Ont.), c. 45 (which were powers referable to any regulated product), but were also particular powers, in extension of those in s. 8, conferred by a new s. 18, also enacted by 1962-63 (Ont.), c. 45 and applicable to tobacco alone. In so far as the Robbins case turned on the retrospective application of the regulations to the 1963 tobacco year, it is clearly of no consequence for the present case. There are other distinguishing features based on the content of some of the regulations passed by the Tobacco Board which reflected known standards upon which that Board acted in enacting limitations and prohibitions upon the production of tobacco in view of the surpluses that had accumulated.
Where the Robbins case is similar to the present one is in the way the Tobacco Board exercised its delegated power to make regulations (in the words of s. 18(2) (a) of the statute) “providing for the refusal to grant a licence for the producing of tobacco for any reason that the Board deems proper”. The delegation to it of this power by the Farm Products Marketing Board was, of course, in those words, with the substitution of “local board” for “Board”. The Tobacco Board acted on this delegation by enacting this regulation:
The local board may refuse to grant a licence to produce tobacco for any reason that the local board deems proper.
Grant J. in sustaining the validity of this regulation said this (at pp. 66-67):
The 1963 amendments to the Act make it clear that it was the intention of the Legislature to confer an unrestricted discretion on the local board to grant or refuse licences to produce tobacco, annual tobacco acreage allotments and tobacco marketing quotas. There are no limits in the Act to the discretion granted to the Board and there is nothing therein requiring the Board to set up standards.
I do not think that this is a correct analysis of the Act in question. It ignores the fact that not only delegation but subdelegation is involved, and that the power is circumscribed by the obligation to exercise it through regulations. This was the point taken by this Court in the Brent case. The passage quoted above from the reasons of Grant J. in the Robbins case puts the power into the category of an original grant of authority exercisable ad hoc or treats the power as if it was included among those given generally by s. 4 of The Milk Act, or the similar s. 4 of The Farm Products Marketing Act. I have already pointed out that s. 8 is of a different order.
I do not overlook the discretionary element in the grant of authority to the Commission and, by subdelegation, to the Board in this case and, similarly, to the relevant tribunals in the Robbins case. What is objectionable, in my view of the law, is not the breadth of the delegation or the subdelegation but the failure of the subdelegate (and it would equally be a failure in the Com- mission itself as delegate) to provide even a minimum of direction and specification in s. 4 of O. Reg. 52/68. The Commission was given a discretion to fix the “law” on enumerated matters, and was authorized to subdelegate its power to the Board. Either one, as the regulation-making authority, could retain discretion as to the execution or application of the “law”, but that is not this case so far as s. 4 is concerned. There was no “law” stated.
The Board appreciated the need to offer some guide lines to those ov