In Re Insurance Act, 1910

In Re Insurance Act, 1910
Collection
Supreme Court Judgments
Date
1913-10-14
Report
(1913) 48 SCR 260
Judges
Fitzpatrick, Charles; Davies, Louis Henry; Idington, John; Duff, Lyman Poore; Anglin, Francis Alexander; Brodeur, Louis-Philippe
On appeal from
Canada
Subjects
Constitutional law
Decision Content
Supreme Court of Canada
In Re Insurance Act, 1910, (1913) 48 S.C.R. 260
Date: 1913-10-14
In The Matter of Sections Four and Seventy of The Canadian “Insurance Act, 1910.”
1912: November 27, 29; 1913: October 14.
Present: Sir Charles Fitzpatrick C.J., and Davies, Idington, Duff, Anglin and Brodeur JJ.
REFERENCE BY THE GOVERNOR-GENERAL IN COUNCIL.
Constitutional law—Insurance—Foreign company doing business in Canada—Dominion license—9 & 10 Edw. VII. c. 32, ss. 4 and 70.
Held, per Fitzpatrick C.J. and Davies J., that sections 4 and 70 of The Act 9 & 10 Edw. VII. ch. 32 (the “Insurance Act, 1910”) are not ultra vires of the Parliament of Canada. Idington, Duff, Anglin and Brodeur JJ., contra.
Held, per Fitzpatrick C.J., and Davies J., that section 4 of said Act operates to prohibit an insurance company incorporated by a foreign state from carrying on its business within Canada if it does not hold a license from the Minister under the said Act and if such carrying on of the business is confined to a single province.
Per Idington J.—Section 4 does so prohibit if, and so far as it may be possible to give any operative effect to a clause bearing upon the alien foreign companies as well as others within the terms of which is embraced so much that is clearly ultra vires.
Per Duff, Anglin and Brodeur JJ.—The section would effect such prohibition if it were intra vires.
REFERENCE by the Governor General in Council of questions respecting the “Insurance Act, 1910,” to the Supreme Court of Canada for hearing and consideration.
The following are the questions so submitted.
P.C. 1259.
Certified Copy of a Report of the Committee of the Privy Council, approved by His Excellency the Administrator on the 29th June, 1910. On a memorandum dated 8th June, 1910, from the Minister of Justice, recommending that the following questions be referred to the Supreme Court of Canada for hearing and consideration, pursuant to the authority of section 60 of the “Supreme Court Act”:—
1. Are sections 4 and 70 of the “Insurance Act, 1910,” or any or what part or parts of the said sections ultra vires of the Parliament of Canada?
2. Does section 4 of the “Insurance Act, 1910,” operate to prohibt an insurance company incorporated by a foreign state from carrying on the business of insurance within Canada if such company do not hold a license from the Minister under the said Act, and if such carrying on of the business is confined to a single province?
The Committee submit the above recommendation for Your Excellency’s approval.
rodolphe boudreau,
Clerk of the Privy Council.
The following were the counsel who appeared at the hearing.
Newcombe K.C. and Lafleur K.C. for the Attorney-General of Canada.
Nesbitt K.C., Aimé Geoffrion K.C., Bayly K.C. and Christopher C. Robinson for the Provinces of Ontario, Quebec, New Brunswick and Manitoba.
S. B. Woods K.C. for the Provinces of Alberta and Saskatchewan.
Wegenast for the Manufacturers’ Association of Canada.
Gaudet for the Canadian Insurance Federation.
The Chief Justice.—The question in this reference is a narrow one, namely, whether section 4 of the “Insurance Act, 1910,” 9 and 10 Edw. VII. ch. 32, and section 70 which fixes the penalty for violations of section 4 are ultra vires of the Parliament of Canada.
Section 4 reads as follows:—
In Canada, except as otherwise provided by this Act, no company or underwriters or other person shall solicit or accept any risk, or issue or deliver any receipt or policy of insurance, or grant any annuity on a life or lives, or collect or receive any premium, or inspect any risk, or adjust any loss, or carry on any business of insurance, or prosecute or maintain any suit, action or proceeding, or file any claim in insolvency relating to such business, unless it be done by or on behalf of a company or underwriters holding a license from the Minister.
It is quite obvious that this Act is intended merely to regulate the business of insurance in Canada and in the Prohibition Case[1], Lord Watson said that in Citizens Insurance Company v. Parsons (2), the business of fire insurance was admitted to be a trade.
A review of the insurance legislation of Canada from 1868 downward, which is all set out in Mr. Newcombe’s factum, shews that the law as it was at the time of The Citizens Ins. Co. v. Parsons[2], contains substantially the same provision as section 4 now in question. The court is not called upon to consider the question as to how far the Parliament of Canada could override the statutory conditions of any province by legislating with respect to the conditions which should attach to all contracts of insurance in Canada. The question narrows itself down apparently to this: Assuming that under property and civil rights the provincial legislatures have jurisdiction to legislate generally with respect to insurance companies doing business in the province, in view of the fact that insurance is a class of business in which it is essential that the public interest should be safeguarded, and this business has always been of great importance and particularly in recent years has grown to be of enormous magnitude, cannot the Dominion Parliament legislate with respect to this subject under the head of “Peace, Order and Good Government,” just as it has been held to have jurisdiction in the matter of intoxicating liquors? The following references in support of this proposition are of importance.
In The Citizens Ins. Co. v. Parsons[3], at page 114, Sir Montague Smith says:—
It was further argued on the part of the Appellants that the Ontario Act was inconsistent with the Act of the Dominion Parliament, 38 Vict. ch. 20, which requires fire insurance companies to obtain licenses from the Minister of Finance as a condition to their carrying on the business of insurance in the Dominion, and that it was beyond the competency of the provincial legislature to subject companies who had obtained such licenses, as the appellants companies had done, to the conditions imposed by the Ontario Act. But the Legislation does not really conflict or present any inconsistency. The statute of the Dominion Parliament enacts a general law applicable to the whole Dominion requiring all insurance companies, whether incorporated by foreign, Dominion or Provincial authority to obtain a license from the Minister of Finance, to be granted only upon compliance with the conditions prescribed by the Act. Assuming this Act to be within the competency of the Dominion Parliament, as a general law applicable to foreign and domestic corporations, it in no way interferes with the authority of the legislature of the Province of Ontario to legislate in relation to the contracts which corporations may enter into in that province.
Sir Montague Smith in the same judgment refers to the weight to be attached to the exercise of jurisdiction by the Federal Parliament.
In the argument of the Dominion Liquor License Case[4], at p. 67, Sir Farrer, afterwards Lord, Herschell, in his argument, referring to the Dominion “Insurance Act,” says:—
I do not think it was questioned that the Dominion Act was a perfectly good Act, which did require all insurance companies throughout the Dominion to take out a Dominion license but it was held that the Ontario legislation was not inconsistent with it.
Sir Montague Smith remarked:—
I forget what the facts were, but I suppose that the case did not interfere with the license to be taken out under the Dominion Act.
In short it may be safely stated that the whole report of the Parsons Case[5] shews that it was assumed by both sides that it was within the power of the Parliament of Canada to grant licenses.
Again, at p. 165, Sir Farrer Herschell says:—
Take the statute which was under consideration in the Citizens Ins. Co. v. Parsons (7 App. Cas. 96), which was in no way disapproved by that judgment. The Dominion Parliament of Canada had said, in order for the general safety and to prevent people from being swindled by bubble companies, no insurance company shall carry on business in the Dominion without a license; that license being granted by the Dominion government. Of course, these insurance companies carried on their business in the provinces; there was nowhere else for them to carry it on, it may in one or it may in all. But the Parliament said: you shall not carry on your, business without a license from the Dominion Government, and certainly no suggestion was made by this Board in that case that the law was invalid, because that would have been an easy solution of the matter. Instead of that, the court proceeded to shew that the legislation in the particular case was not inconsistent with the general Dominion legislation.
It appears by the last returns published by the Insurance Department under the authority of Parliament and of the legislatures of Ontario, Quebec and Manitoba that:—
1. The amount of fire insurance in force in Canada at December 31, 1912, in companies licensed by the Dominion was $2,684,355,895, and in companies licensed by the provinces, $949,863,538. The premiums paid for this insurance in 1912 amounted to $30,144,264.
The amount of life insurance in force at the said date in companies licensed by the Dominion was $1,070,308,669, and in companies licensed by the provinces, $14,700,988, the number of Dominion policies being 1,497,397.
The premiums paid in 1912 on this insurance amounted to $36,092,719.
The amount of premiums paid to companies licensed by the Dominion in 1912 for insurance other than fire and life amounted to $10,262,049.
2. No figures are available shewing the amount of insurance in force at the time of Confederation. The earliest report is that for the business of the year 1872 from which I take the following:—
The amount of fire insurance in force in December 31, 1872, was $251,725,940.
The amount of premiums paid in 1872 was $2,653,612.
The amount of life insurance in force at December 31, 1872, was $61,365,648.
The amount of premiums paid in 1872 on this insurance was $2,068,953.
So far as appears from this report no return was made of business other than fire and life insurance.
That the Parliament of Canada may legislate with respect to matters which affect property and civil rights when they have attained such dimensions as to affect the body politic of the Dominion, is clearly established. See Russell v. The Queen[6], at page 839. Also, and particularly, see the judgment of Lord Watson in Attorney-General for Ontario v. Attorney-General for Canada[7], at pages 359 and 360.
My answer to the first question is, No.
My answer to the second question is, Yes.
Davies J.—I do not desire in these reasons for my answers to the questions put upon this reference to repeat what I have already said in the reasons for my answers to the questions on the reference respecting companies generally.
It is impossible, however, to avoid some repetition if one is to make one’s opinion in the special questions submitted at all clear.
The Dominion Parliament has doubtless the right to impose restrictions upon companies of its own creation enacted in section 4 now under discussion. That I understand is not questioned.
It is conceded on the other hand that the exclusive legislative control over provincial insurance companies carrying on their business wholly within the province rests with the province creating such companies. The legislation here in question recognizes this and exempts from its operation and application every such provincial company.
I have already, in the Companies Reference[8], expressed the opinion that the limitation upon the provincial objects is amongst other things territorial and that the Dominion statute professing to confer upon them extra territorial powers by means of a license is ultra vires.
If I am right, the Act does not apply at all to provincial companies. Of course, if there is no territorial limitation upon the powers of those companies, and they can legally carry on their business extra territorially and throughout the Dominion, they would not come within the exception of the Act.
My object in mentioning this is to have it clearly understood that the Act, the section of which is in question and under review, exempts from its application provincial companies confining their business to the provinces creating them which in my opinion they are bound to do.
The exemption is based upon the implication that the limitation upon the exclusive powers given to the provinces to incorporate companies “with provincial objects” is at any rate a territorial one, and the Dominion Parliament proceeding upon that implication and assumption and conceding that such exclusive power should not be invaded by its legislation, declares that the Act shall not apply to such companies. It was evidently not the intention of the Dominion Parliament to entrench upon this exclusive power given to the local legislatures, but while carefully excluding from the operation of the Act all provincial companies created by virtue of it, to enact Dominion legislation which should as far as possible effectively regulate and control the business of insurance as carried on generally throughout the whole Dominion by Canadian and foreign companies alike.
Counsel for the Dominion at bar submitted that the legislation in question could be supported on several of the enumerated powers of legislation assigned to the Dominion in the 91st section of its Constitutional Act. They relied upon the criminal law and the subject of aliens, but I am clearly of the opinion that the legislation cannot be supported under either of these enumerated powers. Parliament when enacting this insurance legislation was not dealing with the subject-matter of “aliens” as such or with criminal law as such. It was dealing with the subject-matter of insurance attempting to regulate that business so far as it was not within the exclusive powers of the province and as part of such regulations requiring insurance companies within its legislative jurisdiction to take out a license and make certain deposits of money with the Finance Minister and be subject to inspection while carrying on such business.
It was the regulation and not the prohibition of a business that Parliament was dealing with and I shall subsequently attempt to shew the distinction is of vital importance on one at least of the grounds on which the power of the Dominion to enact the legislation is concerned.
The other enumerated powers of the Dominion under which it was sought to uphold the validity of this legislation was that of “the regulation of trade and commerce.” If section 4 in question can be brought within that enumerated power all doubt as to its validity would at once be ended.
In the case of City of Fredericton v. The Queen[9] this court held that the provisions of the “Canada Temperance Act, 1878,” prohibiting the traffic in intoxicating liquors came within this enumerated power. On appeal to the Judicial Committee of the Privy Council, sub nomine Russell v. The Queen[10], this judgment was not sustained as coming within the regulation of trade and commerce, but was sustained, as I understand the judgment, on the ground that the Act in question came within the general powers of legislation respecting peace, order and good government and not within the class of subjects assigned exclusively to the provincial legislatures. In the later prohibition case, Attorney-General for Ontario v. Attorney-General for the Dominion[11], at pp. 362-3, Lord Watson, in stating the opinion of their Lordships on the case before them, said that the decision in Russell v. The Queen[12] must be accepted as an authority that the respective provisions of the “Canada Temperance Act, 1886,” must receive effect as valid enactments relating to the peace, order and good government of Canada and he went on to explain that as these enactments were prohibitive and not regulative their Lordships were unable to regard them as regulations of trade and commerce. He further explains that the object of the Act was
not to regulate retail transactions between those who trade in liquors and their customers, but to abolish all such transactions within every provincial area in which its enactments have been adopted.
In other words, because the aim and purpose of the Act was not regulation but prohibition, their Lordships could not agree that it was legislation under the “Regulation of Trade and Commerce.” The inference I draw from the language of the judgment is that if the provisions of the enactment there in question had been regulation instead of prohibition they would have been sustained as valid under the enumerated sub-section.
In the Judicial Committee in Citizens Ins. Co. v. Parsons[13], Sir Montague Smith said, at p. 113:— Construing, therefore, the words “regulation of trade and commerce” by the various aids to their interpretation above suggested, they would include political arrangements in regard to trade requiring the sanction of Parliament, regulation in matters of interprovincial concern, and it may be that they would include general regulation of trade affecting the whole Dominion. Their Lordships abstain on the present occasion from any attempt to define the limits of the authority of the Dominion Parliament in this direction. It is enough for the decision of the present case to say that, in their view, its authority to legislate for the regulation of trade and commerce does not comprehend the power to regulate by legislation the contracts of a particular business or trade, such as the business of fire insurance in a single province.
In this view of the case it became unnecessary to consider how far the general power to make regulations of trade and commerce when competently exercised by the Dominion Parliament might legally modify or affect property and civil rights. But I take it as settled law now at any rate that regulation of trade and commerce when competently exercised by the Dominion Parliament may legally modify and affect any of the exclusive powers of the legislatures of the provinces.
The point decided in the Citizens Ins. Co. v. Parsons[14], was of an extremely limited character and to the effect that the regulation of insurance contracts within a province as to the terms and conditions of the contract was within the legislative power of the province as a matter of property and civil rights and did not affect the regulations of trade and commerce.
It is conceded that the Judicial Committee has never yet expressly assigned to this power over trade and commerce, any Dominion legislation which has come before it. The furthest they have gone in that direction is I think to be found in the above quotation from the judgment of the Judicial Committee in the Citizens Insurance Company Case[15],
it may be the words would include general regulation of trade throughout the whole Dominion.
It seems to me that such a general regulation of trade though confined to one particular branch of trade would also come within the jurisdiction of the Dominion and that this special legislation now in controversy may well be held within that enumerated power.
That insurance is a trade in one sense at least seems clear, and that it is one affecting the whole Dominion and all classes and conditions of its people is beyond controversy. That in some of its branches at least, such as the insurance of cargoes or property carried from one province to another by land or sea or both, it is a subject-matter of interprovincial concern which could only properly be legislated upon by the Dominion Parliament would, on the construction I put upon the powers of provincial companies, seem also clear. My general conclusion in the absence of any distinct authority is that the subject-matter of insurance generally throughout the Dominion but not including provincial insurance limited to the province may well be held as within the regulative power of Parliament under the enumerated clause relating to trade and commerce. The legislation in question here is assuredly of a character that no provincial legislature could competently enact. So far as provincial legislatures can competently deal with the subject-matter of insurance companies the Act in question in terms does not apply or interfere. The section under consideration would seem undoubtedly good so far as it applied to interprovincial trade insurance and my conclusion on the whole subject is that it may fairly on the authority of the decision of the prohibition case respecting the validity of the “Canada Temperance Act” be held good as a regulation of trade.
If I am wrong in that then I hold that it comes within the Dominion Parliament’s general power of legislation for the peace, order and good government of Canada. Holding as I do the view that the limitation upon the provincial power to incorporate companies is territorial and confined to the provinces, then all other legislative power upon that subject-matter must be vested in the Dominion Parliament. If on the general question of the incorporation of companies the power of the provinces to legislate is strictly limited to their respective territorial areas, then it would necessarily follow that all companies with power larger than provincial must be incorporated by the Dominion Parliament and of course be entirely subject to its jurisdiction and control.
If the legislation in question is sustainable only on the general powers of the Dominion relating to peace, order and good government then in my opinion the subject-matter of it is one which to-day has become of national interest and importance, affecting the body politic of the Dominion as a whole and being so would on the authority of the Prohibition Case[16], be paramount legislation.
It would seem strange indeed if the Parliament of Canada, on a subject-matter affecting directly the lives, property and interests of a very large proportion of its inhabitants could not legislate either to prohibit foreign companies which may or may not be responsible or reliable from engaging in the business at all in Canada; and still more strange if such Parliament could not regulate these companies in the carrying on of their business in Canada by requiring them to make deposits of money as an assurance of their reliability and take out a license and subject themselves to inspection or otherwise as Parliament may decide.
As a fact ever since the year following Confederation, now more than forty years ago, Parliament has assumed the right so to legislate and the legislation for the past 25 years at least has been substantially in the form the constitutionality of which is now challenged.
The subject-matter of the legislation in question is of a Dominion and not of a provincial character. In its Dominion aspect it is not certainly within any of the exclusive powers of the provincial legislatures and so far as companies incorporated by these legislatures can competently and legally operate and carry on their business they are exempted from the operation of the legislation.
The policy of regulating the business of insurance throughout Canada by foreign companies as well as Dominion companies to the extent of requiring deposits from them as a guarantee of their responsibility and subjecting them to inspection and to the obligation of obtaining a license to operate has been a feature of Dominion legislation since 1868, the year following the Union. It is beyond doubt regulative legislation only and its subject-matter may, I think, be appropriately described as the trade or business of insurance. The fact that with provincial companies excepted the legislation applies to foreign companies and to Dominion companies only and that it has remained unchallenged as to its constitutionality until now is not without significance and weight.
The business of life insurance alone in Canada carried on by the companies Dominion and foreign which come within the purview of the Act in question has to-day reached proportions which may well be described as enormous if not colossal. As to the mere amount of this assurance, it runs up into hundreds of millions of dollars. The ramifications of such business extend to every city, town, village and hamlet of the Dominion. The beneficiaries of these assurances are constantly moving from one part of the Dominion to the other. The failure of one or more of these companies carrying the enormous obligations their contracts assume in Canada would be a national disaster. Their proper regulation and the conditions on which foreign companies should be permitted to operate in Canada would seem necessary therefore from a Dominion or national standpoint. The fact that any such foreign company may limit its operation for the time to a single province would not in my opinion relieve it from compliance with the law. It is the subject-matter of its operation which brings it within the control of the Dominion legislation and not the amount of those operations or the limits within which they are carried on. This observation would also apply to persons and not companies engaging in the insurance business.
But it is not alone because the companies to which the section extends are Dominion and foreign, nor because of the enormous proportions and extent to which the business covered by the legislation has grown in volume and with respect to persons and properties which the subject-matter embraces affecting greatly the happiness, comfort and welfare of such a large and yearly increasing proportion of the Dominion’s population, nor because some of its branches are clearly interprovincial, nor because the Dominion has exercised unchallenged legislative power with respect to it substantially in the form now before us for so many years that I hold this legislation to be valid but because the combination of these various facts and reasons convince me that the regulation and control of these insurance companies is necessary in the interests of the inhabitants of the Dominion as a whole and because I do not see how it would be possible for provincial legislation effectively to deal with the subject.
Lastly it seems to me that if the legislation is upheld under the Dominion general powers and not its enumerated ones the Prohibition Case[17], is authority that when so legislating on subject-matters which have attained national importance and affects the body politic of the Dominion the legislation is plenary and must be given effect to even if it affects subject-matters within the exclusive powers of the local legislatures.
As I have said, I think the subject-matter of this legislation has reached this state of national importance and in fact to a greater extent that had the sale of liquors prohibited by the “Canada Temperance Act” of 1886 and the legislation with regard to the form which the regulation should take is entirely within the province of the Dominion of Canada. Having reached this conclusion as to the 4th section, it follows of course that section 70 providing sanctions for its due enforcement would also be valid.
For these reasons, I answer the first question in the negative and the second question in the affirmative.
Idington J.—To answer any questions involving, as these now submitted do, an accurate apprehension of the power of Parliament, we must first ask ourselves whether the power asserted can be rested upon any of the enumerated legislative powers specifically assigned by section 91 of the “British North America Act” or by other sections thereof to the exclusive legislative authority of Parliament.
Whatever enactment can be rested thereon is maintainable. When it cannot be so maintained we must then ask if it touches upon any of the subject-matters assigned by section 92 or other section of the said Act to the exclusive legislative authority of the provincial legislatures.
If in any such case it trenches upon any of the powers thus assigned these legislatures, it is to that extent ultra vires.
If it can be maintained as resting solely upon the power given Parliament in section 91, over the “peace, order and good government” of Canada, without invoking any of the enumerated powers therein, and without trenching upon any of these powers given the legislatures, then it is intra vires.
What thus rests in this limitation of these words “peace, order and good government” in said section, I shall hereinafter refer to as the residual power of Parliament. In a sense it is exclusive, but it is not what I refer to as the exclusive power of Parliament. This latter term I apply to what may be used to override all other powers conferred by said Act.
My observation of the needless confusion of thought which so often exists in the minds of those dealing with the “British North America Act,” is my excuse for venturing to set out what seems elementary.
Counsel in submitting the question herein and supporting the legislation challenged, correctly apprehended the great value it would be in the way of maintaining same if he could bring it within the enumerated legislative powers I first referred to and sought to rest it upon sub-section 2 of section 91, specifying “The regulation of Trade and Commerce.”
Notwithstanding all the learning gathered so carefully from dictionary, literary and legal authorities, I cannot find that the demonstration of what may in some instances be called a trade, even if insurance business fell within them in some such cases, does much to help us to interpret this phrase.
It has never struck me that the phrase “Trade and Commerce” could be properly broken into two or more pieces in order to give this sub-section its correct interpretation; and still less to make every trade, as such, subject to the exclusive authority of Parliament as a way out of the difficulty of finding an appropriate meaning for the whole phrase.
I do not think the busy insurance agent following his trade or calling, falls any more within the scope of this sub-section than the farmer, or fisherman, or blacksmith, or grocer, or anybody else following his trade; not even the lawyer following his honest trade, and undoubtedly having much to do with commerce. Life insurance as a whole hardly seems more fitted to be classed as within the ordinary meaning of trade and commerce. And accidents, against which insurance may be had, will happen outside of acts or transactions involved in trade and commerce. Guarantees are needed in many forms, but are not entirely confined to business involving trade and commerce.
And the chief branch of marine insurance, most closely related of all insurances to trade and commerce, seems to be excepted from the Act.
It is to be observed that this very legislation, so far as its principle of dealing with insurance companies foreign to a province is concerned, was before the court in the case of the Citizens Ins. Co. v. Parsons[18]. And this very power over trade and commerce was there invoked to shew that the Ontario Act intituled “An Act to secure uniform conditions in Policies of Fire Insurance” was ultra vires a local legislature. The nature of the power is discussed on pages 112 and 113 of that case, and on page 114 the relation of the Ontario Legislature thereto is dealt with.
Can any one imagine that, if this power and its exclusive character overriding all local powers had been deemed to be what we are now asked to hold, the decision in that case would have been what it was and the judgment have stood so long the sheet anchor of provincial rights? I need not repeat here, but adopt what is said on pages 112 and 113, and refer in addition thereto to section 121. Why was that inserted if the Dominion Parliament was to have the sole interprovincial regulative power relative to trade and commerce? In this connection we may refer with profit to the cases in the Supreme Court of the United States interpreting the section of their Constitution giving Congress its powers, and which reads thus in subsection 3:—
To regulate commerce with foreign nations and among the several States and with the Indian tribes.
The latest decision thereon relative to this question of insurance seems to be New York Life Ins. Co. v. Cravens[19], and the court there held that the subject-matter of insurance did not fall within the term “commerce” as there used. See also Paul v. Virginia[20].
The decisions of the Judicial Committee of the Privy Council upon the subject of prohibition relative to the liquor traffic in the case of Russell v. The Queen[21], and The Attorney-General for the Dominion v. The Attorneys-General for the Provinces[22], seem to have proceeded upon the residual power in Parliament, though the court was invited there, as we are now, to rest upon the power to regulate trade and commerce.
It is true that in the first of these cases the court declined to specify on which ground it rested and intimated it was not to be taken as having discarded the power of trade and commerce. The chief point to be noticed in both cases is a reluctance to rely upon any of such specific powers though the subject-matter of the legislation in question there lent itself much more readily to give place to such an argument than does this Act dealing with all sorts of insurance. True it was said that Act was prohibitive and not regulative. Quite so, but must we assume that except by way of criminal legislation Parliament may prohibit anything it sees fit? Whatever may be well said of some kinds of insurance and their close relationship to the subjects of trade and commerce as being conceivably assignable in such an instrument as the “British North America Act” under the description used in and for the purpose of sub-section 2, when we consider the composite character of this insurance Act it seems impossible to rest it as an entirety upon the said sub-section. And if it were permissible for purposes of interpretation to trace the genesis of its drafting we should find the present pretensions were still more unfounded than they appear from what I have urged.
I am afraid we must put aside for the present this sub-section which has been brought out so often in despair to support doubtful arguments.
I think the old residual power of Parliament to make laws for the peace, order and good government of Canada, must alone be relied upon in this emergency.
I now turn to the first question and find the sections submitted apply to persons as well as companies, and the many questions involved in this first one may be simplified and best answered by testing the validity of such legislation when applied to the individual.
The section 4 reads thus:—
4. In Canada, except as otherwise provided by this Act, no company or underwriters or other person shall solicit or accept any risk, or issue or deliver any receipt or policy of insurance, or grant any annuity on a life or lives, or collect or receive any premium, or inspect any risk, or adjust any loss, or carry on any business of insurance, or prosecute or maintain any suit, action or proceeding, or file any claim in insolvency relating to such business, unless it be done by or on behalf of a company or underwriters holding a license from the Minister.
Can I say that Parliament is acting intra vires when enacting that
no * * * person shall * * * grant any annuity on a life or lives * * * unless it be done by or on behalf of (some one) holding a license from the Minister?
Surely if there is any civil right everybody has been supposed to have enjoyed, it is that of doing this very thing and no person but the local legislature can take it away. If it be answered, this is an insurance Act and it is not within the purview of the Act to deal with wills or ordinary contracts, I ask how or where am I to draw the line?
I know of no such urgent situation as to take away from men their ordinary civil right even if some should expand the operation thereof beyond its daily use, and do so for other considerations than usually move thereto.
And if insurance can be so treated why not everything else men engage in or can engage in?
This assertion of power to put everyone under the license of the Minister, does not seem to me a thing that falls, as of course by mere assertion of Parliament desiring it, within the only power whereby it may try to invade the civil rights of one living in a province.
And what is true of the rights of a dweller in a province must be true also regarding the rights of all his agents acting in the same province. Each is protected by the law of the province in regard to his contracts made within same province. Their contracts in these regards as well as in every other regard are good, and cannot be invalidated by anything Parliament may try to enact but cannot.
All that is involved therein and in the several ways specified in said section 4, I must hold as ultra vires Parliament.
Then as to insurance companies incorporated by a province, I think they must be held to have whilst acting in the province the same rights as the individuals I have referred to dwelling therein.
It was held in the case of Citizens’ Ins. Co. v. Parsons[23], already referred to, that it was competent for the provincial legislature to so enact relative to the contracts of a foreign company, or of one which might be the creation of Parliament, when made in a province so enacting, that it must comply with the conditions imposed by the legislature for the form of contract, and the company be bound by what the legislature specified such contracts were to be held to mean and could not contract itself out of such act. Much more must a home company the creation of the legislature be so bound. It seems futile to suggest that Parliament can by such legislation as this invade such exclusive jurisdiction of the provinces.
It is answered, that as to such companies the Act excepts them from its operation. I do not so read the Act. In the Act of 1868 there was an excepting provision, which was changed by the Act of 1886, 49 Vict. ch. 45, sec. 3, sub-sec. (e), so as to read more stringently in that regard and that was later amended to read as it does now in sub-sec. (b), of sec. 3, of the present Act, which is as follows:—
to any company incorporated by an Act of the legislature of the late Province of Canada, or by an Act of the legislature of any province now forming part of Canada, which carries on the business of insurance wholly within the limits of the province by the legislature of which it was incorporated, and which is within the exclusive control of the legislature of such province.
The clear effect of that is to exclude from the exception in favour of provincial companies, such of them as might choose, though acting within their corporate powers, to do business, for example, in the United States, and thus leave them subject to the penalties added as sanctions of the Act and make their contracts illegal if the sanction is valid.
In the case of The Canadian Pacific Railway Co. v. The Ottawa Fire Ins. Co.[24], the question of the right of a corporate creation of a province to do anything beyond its limits was raised, in an incidental manner only, but thought to be so relevant to the issues in the case that a second and special argument was had in this court in regard thereto.
I examined the matter then in as thorough a manner as I knew how, and came to the conclusion that corporate creations of a local legislature acting under section 92, sub-section 11, had inherent in their creation and must always have been intended to have inherent in their creation the same rights as other corporations to do business wherever it was to be found so far as the doctrine of the comity of nations wou