NIL/TU,O Child and Family Services Society v. B.C. Government and Service Employees' Union

NIL/TU,O Child and Family Services Society v. B.C. Government and Service Employees' Union
Collection
Supreme Court Judgments
Date
2010-11-04
Neutral citation
2010 SCC 45
Report
[2010] 2 SCR 696
Case number
32862
Judges
McLachlin, Beverley; Binnie, William Ian Corneil; LeBel, Louis; Deschamps, Marie; Fish, Morris J.; Abella, Rosalie Silberman; Charron, Louise; Rothstein, Marshall; Cromwell, Thomas Albert
On appeal from
British Columbia
Subjects
Constitutional law
Notes
SCC Case Information: 32862
Decision Content
SUPREME COURT OF CANADA
Citation: NIL/TU,O Child and Family Services Society v. B.C. Government and Service Employees’ Union, 2010 SCC 45, [2010] 2 S.C.R. 696
Date: 20101104
Docket: 32862
Between:
NIL/TU,O Child and Family Services Society
Appellant
and
B.C. Government and Service Employees’ Union
Respondent
‑ and ‑
Attorney General of Canada, Attorney General of Ontario,
Attorney General of Quebec, Attorney General of New Brunswick,
Attorney General of Manitoba, Attorney General of British Columbia,
Attorney General for Saskatchewan, British Columbia Labour Relations Board,
Canadian Human Rights Commission, Kwumut Lelum Child and Family
Services Society, Mohawk Council of Akwesasne, Assembly of First Nations
of Quebec and Labrador, First Nations of Quebec and Labrador Health and
Social Services Commission, First Nations Summit and Te’Mexw Nations
Interveners
Coram: McLachlin C.J. and Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell JJ.
Reasons for Judgment:
(paras. 1 to 47)
Joint Concurring Reasons:
(paras. 48 to 82)
Abella J. (LeBel, Deschamps, Charron, Rothstein and Cromwell JJ. concurring)
McLachlin C.J. and Fish J. (Binnie J. concurring)
______________________________
NIL/TU,O Child and Family Services Society v. B.C. Government and Service Employees’ Union, 2010 SCC 45, [2010] 2 S.C.R. 696
NIL/TU,O Child and Family Services Society Appellant
v.
B.C. Government and Service Employees’ Union Respondent
and
Attorney General of Canada, Attorney General of
Ontario, Attorney General of Quebec, Attorney General
of New Brunswick, Attorney General of Manitoba,
Attorney General of British Columbia, Attorney General
for Saskatchewan, British Columbia Labour Relations
Board, Canadian Human Rights Commission, Kwumut
Lelum Child and Family Services Society, Mohawk
Council of Akwesasne, Assembly of the First Nations of
Quebec and Labrador, First Nations of Quebec and
Labrador Health and Social Services Commission, First
Nations Summit and Te’Mexw Nations Interveners
Indexed as: NIL/TU,O Child and Family Services Society v. B.C. Government and Service Employees’ Union
2010 SCC 45
File No.: 32862.
2009: December 8; 2010: November 4.
Present: McLachlin C.J. and Binnie, LeBel, Deschamps, Fish, Abella, Charron, Rothstein and Cromwell JJ.
on appeal from the court of appeal for british columbia
Constitutional law — Division of powers — Labour relations — Aboriginal peoples — Child welfare agency providing services to Aboriginal children and families in British Columbia — Union applying to B.C. Labour Relations Board for certification as bargaining agent for child welfare agency’s employees — Agency arguing its labour relations within exclusive federal authority over Indians — Whether agency constitutes a federal undertaking based on its nature, operations and habitual activities — Whether Aboriginal aspects of agency’s operations and service delivery displace presumption of provincial jurisdiction over labour relations — Constitution Act, 1867, s. 91(24) .
NIL/TU,O Child and Family Services Society provides child welfare services to the children and families of seven First Nations in British Columbia. It has a unique institutional structure, combining provincial accountability, federal funding, and a measure of operational independence. In 2005, the Union applied to the B.C. Labour Relations Board to be certified as the bargaining agent for NIL/TU,O’s employees. NIL/TU,O objected, arguing that its labour relations fell within federal jurisdiction over “Indians” under s. 91(24) of the Constitution Act, 1867 , because its services are designed for First Nations children and families. The Board dismissed NIL/TU,O’s objection and certified the Union. On judicial review, the Supreme Court of British Columbia overturned the Board’s certification order, finding that even though NIL/TU,O’s operations served provincial ends, they did so by uniquely Aboriginal means. The British Columbia Court of Appeal allowed the Union’s appeal, concluding that NIL/TU,O’s operations — and therefore its labour relations — fell under provincial jurisdiction.
Held: The appeal should be dismissed.
Per LeBel, Deschamps, Abella, Charron, Rothstein and Cromwell JJ.: An application of the well‑established legal framework for determining the jurisdiction of labour relations on federalism grounds clearly and conclusively confirms that NIL/TU,O is a provincial undertaking. Its labour relations therefore fall under provincial jurisdiction and are subject to the B.C. Labour Relations Code. Canadian courts have long recognized that labour relations are presumptively a provincial matter. To displace that presumption, a court must conduct an inquiry having two distinct steps, the first being the “functional test”, which examines the nature, operations and habitual activities of the entity to determine whether it constitutes a federal undertaking. Only when this first test is inconclusive, should a court proceed to the second step, which is to ask whether the provincial regulation of that entity’s labour relations would impair the “core” of the federal head of power at issue. There is no reason why the jurisdiction of an entity’s labour relations should be approached differently when dealing with s. 91(24) of the Constitution Act, 1867 . The fundamental nature of the inquiry is — and should be — the same.
The essential nature of NIL/TU,O’s operation is to provide child and family services, a matter within the provincial sphere. It is regulated exclusively by the province, and its employees exercise exclusively provincial delegated authority. The identity of the designated beneficiaries may and undoubtedly should affect how those services are delivered, but they do not change the fact that the delivery of child welfare services, a provincial undertaking, is what NIL/TU,O essentially does. The presumption in favour of provincial jurisdiction over labour relations remains operative in this case. Since the question of whether an entity’s activities or operations lie at the “core” of a federal undertaking or head of power is not part of the functional test, and since the functional test is conclusive, an inquiry into the “core of Indianness” is not required.
Per McLachlin C.J. and Binnie and Fish JJ.: The central question in this case is whether the operation falls within the protected “core of Indianness” under s. 91(24) , defined as matters that go to the status and rights of Indians. The proposition that the “core of Indianness” should be considered only if the functional test is inconclusive does not withstand scrutiny because the essence of the functional test is whether the operation falls within the core of the federal power. The two‑stage test would mean that labour jurisdiction would be determined in many cases before consideration of the power under s. 91(24) is reached. Deciding labour jurisdiction in a case such as this without scrutiny of the federal power hollows out the functional test. Conversely, to deem any Aboriginal aspect sufficient to trigger federal jurisdiction would threaten to swallow the presumption that labour relations fall under provincial jurisdiction. The proper approach is simply to ask, as the cases consistently have, whether the Indian operation at issue, viewed functionally in terms of its normal and habitual activities, falls within the core of s. 91(24) . The functional analysis of the operation’s activities is not a preliminary step; rather it provides the answer to whether the activity falls within the protected core.
In the labour relations context, only if the operation’s normal and habitual activities relate directly to what makes Indians federal persons by virtue of their status or rights, can the presumption that provincial labour legislation applies be ousted. This is a narrow test. It recognizes that Indians are members of the broader population and, in their day‑to‑day activities, they are subject to provincial laws of general application. Only where the activity is so integrally related to what makes Indians and lands reserved for Indians a fundamental federal responsibility does it become an intrinsic part of the exclusive federal jurisdiction, such that provincial legislative power is excluded. In this case, the function or operation of NIL/TU,O is the provision of child welfare services under the umbrella of the province‑wide network of agencies providing similar services. The fact that NIL/TU,O employs Indians and works for the welfare of Indian children in a culturally sensitive way that seeks to enhance Aboriginal identity and preserve Aboriginal values does not alter that essential function. Moreover, NIL/TU,O’s ordinary and habitual activities do not touch on issues of Indian status or rights. As such, the child welfare services cannot be considered federal activities. This conclusion is not negated by the fact that the federal government has entered into an intergovernmental agreement with the province of British Columbia and NIL/TU,O, or because it agreed to partially fund the delivery of child welfare services on reserves. NIL/TU,O, as the deliverer of those services, is therefore bound by the applicable provincial legislation.
Cases Cited
By Abella J.
Applied: Northern Telecom Ltd. v. Communications Workers of Canada, [1980] 1 S.C.R. 115; Four B Manufacturing Ltd. v. United Garment Workers of America, [1980] 1 S.C.R. 1031; referred to: Consolidated Fastfrate Inc. v. Western Canada Council of Teamsters, 2009 SCC 53, [2009] 3 S.C.R. 407; Toronto Electric Commissioners v. Snider, [1925] A.C. 396; Reference re Industrial Relations and Disputes Investigation Act, [1955] S.C.R. 529; Reference re Minimum Wage Act of Saskatchewan, [1948] S.C.R. 248; Commission du salaire minimum v. Bell Telephone Co. of Canada, [1966] S.C.R. 767; Agence Maritime Inc. v. Conseil canadien des relations ouvrières, [1969] S.C.R. 851; Letter Carriers’ Union of Canada v. Canadian Union of Postal Workers, [1975] 1 S.C.R. 178; Canada Labour Relations Board v. City of Yellowknife, [1977] 2 S.C.R. 729; Construction Montcalm Inc. v. Minimum Wage Commission, [1979] 1 S.C.R. 754; Bell Canada v. Quebec (Commission de la santé et de la sécurité du travail), [1988] 1 S.C.R. 749; Ontario Hydro v. Ontario (Labour Relations Board), [1993] 3 S.C.R. 327; Sappier v. Tobique Indian Band (Council) (1988), 87 N.R. 1; Qu’Appelle Indian Residential School Council v. Canada (Canadian Human Rights Tribunal), [1988] 2 F.C. 226; Sagkeeng Alcohol Rehab Centre Inc. v. Abraham, [1994] 3 F.C. 449; Canadian Western Bank v. Alberta, 2007 SCC 22, [2007] 2 S.C.R. 3; Husky Oil Operations Ltd. v. Minister of National Revenue, [1995] 3 S.C.R. 453; Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161; Reference re Firearms Act, 2000 SCC 31, [2000] 1 S.C.R. 783; Kitkatla Band v. British Columbia (Minister of Small Business, Tourism and Culture), 2002 SCC 31, [2002] 2 S.C.R. 146; Fédération des producteurs de volailles du Québec v. Pelland, 2005 SCC 20, [2005] 1 S.C.R. 292.
By McLachlin C.J. and Fish J.
Referred to: Construction Montcalm Inc. v. Minimum Wage Commission, [1979] 1 S.C.R. 754; Four B Manufacturing Ltd. v. United Garment Workers of America, [1980] 1 S.C.R. 1031; Northern Telecom Ltd. v. Communications Workers of Canada, [1980] 1 S.C.R. 115; Paul v. British Columbia (Forest Appeals Commission), 2003 SCC 55, [2003] 2 S.C.R. 585; Dick v. The Queen, [1985] 2 S.C.R. 309; Delgamuukw v. British Columbia, [1997] 3 S.C.R. 1010; Consolidated Fastfrate Inc. v. Western Canada Council of Teamsters, 2009 SCC 53, [2009] 3 S.C.R. 407; Canadian Western Bank v. Alberta, 2007 SCC 22, [2007] 2 S.C.R. 3; Sagkeeng Alcohol Rehab Centre Inc. v. Abraham, [1994] 3 F.C. 449; Shubenacadie Band Council v. Canada (Human Rights Commission) (2000), 37 C.H.R.R. D/466; Sappier v. Tobique Indian Band (Council) (1988), 87 N.R. 1; Qu’Appelle Indian Residential School Council v. Canada (Canadian Human Rights Tribunal), [1988] 2 F.C. 226; Westbank First Nation v. British Columbia (Labour Relations Board) (1997), 39 C.L.R.B.R. (2d) 227; Commission de transport de la Communauté urbaine de Québec v. Canada (National Battlefields Commission), [1990] 2 S.C.R. 838; Natural Parents v. Superintendent of Child Welfare, [1976] 2 S.C.R. 751; Paul v. Paul, [1986] 1 S.C.R. 306; Derrickson v. Derrickson, [1986] 1 S.C.R. 285; Kitkatla Band v. British Columbia (Minister of Small Business, Tourism and Culture), 2002 SCC 31, [2002] 2 S.C.R. 146.
Statutes and Regulations Cited
Canada Labour Code, R.S.C. 1985, c. L‑2 .
Child, Family and Community Service Act, R.S.B.C. 1996, c. 46, ss. 2, 3, 4, 71(3), 91, 93(1)(g)(iii).
Constitution Act, 1867, ss. 91 , 92 .
Indian Act, R.S.C. 1985, c. I‑5, s. 88 .
Labour Relations Code, R.S.B.C. 1996, c. 244.
Society Act, R.S.B.C. 1996, c. 433.
APPEAL from a judgment of the British Columbia Court of Appeal (Finch C.J.B.C. and Frankel and Groberman JJ.A.), 2008 BCCA 333, 81 B.C.L.R. (4th) 318, 258 B.C.A.C. 244, 434 W.A.C. 244, 296 D.L.R. (4th) 364, 155 C.L.R.B.R. (2d) 1, 80 Admin. L.R. (4th) 282, [2008] 10 W.W.R. 388, 2009 C.L.L.C. ¶220‑011, [2008] 4 C.N.L.R. 57, [2008] B.C.J. No. 1611 (QL), 2008 CarswellBC 1773, reversing a decision of Cullen J., 2007 BCSC 1080, 76 B.C.L.R. (4th) 322, 284 D.L.R. (4th) 42, 147 C.L.R.B.R. (2d) 289, [2008] 4 W.W.R. 287, 2007 C.L.L.C. ¶220‑044, [2007] B.C.J. No. 1609 (QL), 2007 CarswellBC 1671. Appeal dismissed.
Walter G. Rilkoff, Lisa A. Peters and Nicole K. Skuggedal, for the appellant.
Kenneth R. Curry and Catherine Ann Sullivan, for the respondent.
Peter Southey and Sean Gaudet, for the intervener the Attorney General of Canada.
Sean Hanley and Bruce Ellis, for the intervener the Attorney General of Ontario.
Sylvain Leboeuf and Monique Rousseau, for the intervener the Attorney General of Quebec.
Gaétan Migneault, for the intervener the Attorney General of New Brunswick.
Cynthia Devine, for the intervener the Attorney General of Manitoba.
Paul E. Yearwood, for the intervener the Attorney General of British Columbia.
R. James Fyfe, for the intervener the Attorney General for Saskatchewan.
Elena Miller, for the intervener the British Columbia Labour Relations Board.
Philippe Dufresne and Valerie Phillips, for the intervener the Canadian Human Rights Commission.
John W. Gailus and Christopher G. Devlin, for the intervener the Kwumut Lelum Child and Family Services Society.
Jacques A. Emond and Colleen Dunlop, for the intervener the Mohawk Council of Akwesasne.
David Schulze and Barbara Cuber, for the interveners the Assembly of the First Nations of Quebec and Labrador and the First Nations of Quebec and Labrador Health and Social Services Commission.
Arthur C. Pape and Richard B. Salter, for the intervener the First Nations Summit.
Robert J. M. Janes and Karey M. Brooks, for the intervener the Te’Mexw Nations.
The judgment of LeBel, Deschamps, Abella, Charron, Rothstein and Cromwell JJ. was delivered by
[1] Abella J. — NIL/TU,O Child and Family Services Society (“NIL/TU,O”) provides child welfare services to certain First Nations children and families in British Columbia. It has a unique institutional structure, combining provincial accountability, federal funding, and a measure of operational independence.
[2] None of the parties dispute that child welfare is a matter within provincial legislative competence under the Constitution Act, 1867 . NIL/TU,O does not challenge the constitutional validity of the Child, Family and Community Service Act, R.S.B.C. 1996, c. 46, as it applies to Aboriginal people. Nor is the issue whether the federal government can enact labour relations legislation dealing with “Indians”. It clearly can. The issue in this appeal is whether NIL/TU,O’s labour relations nonetheless fall within federal jurisdiction over Indians under s. 91(24) because its services are designed for First Nations children and families.
[3] For the last 85 years, this Court has consistently endorsed and applied a distinct legal test for determining the jurisdiction of labour relations on federalism grounds. This legal framework, set out most comprehensively in Northern Telecom Ltd. v. Communications Workers of Canada, [1980] 1 S.C.R. 115 and Four B Manufacturing Ltd. v. United Garment Workers of America, [1980] 1 S.C.R. 1031, and applied most recently in Consolidated Fastfrate Inc. v. Western Canada Council of Teamsters, 2009 SCC 53, [2009] 3 S.C.R. 407, is used regardless of the specific head of federal power engaged in a particular case. It calls for an inquiry into the nature, habitual activities and daily operations of the entity in question to determine whether it constitutes a federal undertaking. This inquiry is known as the “functional test”. Only if this test is inconclusive as to whether a particular undertaking is “federal”, does the court go on to consider whether provincial regulation of that entity’s labour relations would impair the “core” of the federal head of power.
[4] The “core” of whatever federal head of power happens to be at issue in a particular labour relations case has never been used by this Court to determine whether an entity is a “federal undertaking” for the purposes of triggering the jurisdiction of the Canada Labour Code, R.S.C. 1985, c. L-2 . Since in my view the functional test conclusively establishes that NIL/TU,O is a provincial undertaking, I do not see this case as being the first to require an examination of the “core” of s. 91(24) .
Background
[5] In 1997, seven First Nations collectively incorporated NIL/TU,O under British Columbia’s Society Act, R.S.B.C. 1996, c. 433, to establish a child welfare agency that would provide “culturally appropriate” services to their children and families. NIL/TU,O operates out of offices on the Tsawout reserve and provides its services to the members of the “Collective First Nations”, currently comprised of the Beecher Bay, Pacheedaht, Pauquachin, Songhees, T’Sou‑ke, Tsartlip and Tsawout First Nations.
[6] In 2005, the British Columbia Government and Service Employees’ Union applied to the British Columbia Labour Relations Board to be certified as the bargaining agent for all employees of NIL/TU,O, excluding the executive director. NIL/TU,O objected, arguing that its labour relations fell under federal jurisdiction.
[7] The Board dismissed NIL/TU,O’s objection. NIL/TU,O was, in the Board’s view, an “‘Indian’ organization” ((2006), 122 C.L.R.B.R. (2d) 174, at para. 47). However, without some connection to the exercise of federal legislative power, that “‘Indian’ content” did not attract federal jurisdiction over labour relations (para. 47). The Board accordingly certified the Union under the B.C. Labour Relations Code, R.S.B.C. 1996, c. 244. A three-member panel of the Board subsequently dismissed NIL/TU,O’s request for reconsideration ((2006), 127 C.L.R.B.R. (2d) 137).
[8] On judicial review, Cullen J. of the Supreme Court of British Columbia granted the application on the grounds that NIL/TU,O’s labour relations fell under federal jurisdiction and were therefore not within the Board’s authority (2007 BCSC 1080, 76 B.C.L.R. (4th) 322). He found that NIL/TU,O’s operations and activities had a federal dimension and, even though those operations served provincial ends, they did so by uniquely Aboriginal means. Cullen J. accordingly overturned the Board’s certification order.
[9] The Union then sought and obtained certification from the Canada Industrial Relations Board under the Canada Labour Code . Despite its federal certification, the Union appealed Cullen J.’s decision to the British Columbia Court of Appeal where Groberman J.A., writing for a unanimous court, concluded that NIL/TU,O’s operations — and therefore its labour relations — fell under provincial jurisdiction (2008 BCCA 333, 81 B.C.L.R. (4th) 318). In his view, nothing in the Child, Family and Community Service Act, the design of NIL/TU,O’s operations or the nature of NIL/TU,O’s services took NIL/TU,O outside provincial jurisdiction. Primary provincial jurisdiction over labour relations was not “ousted” simply because NIL/TU,O’s operations “engage[d] the interests of [A]boriginal groups” or because NIL/TU,O provided services in a “culturally sensitive” manner (para. 62).
[10] For somewhat different reasons, I agree with the conclusion of the British Columbia Court of Appeal and the British Columbia Labour Relations Board that NIL/TU,O’s labour relations fall under provincial jurisdiction and are therefore subject to the British Columbia Labour Relations Code. I would therefore dismiss the appeal.
Analysis
[11] Jurisdiction over labour relations is not delegated to either the provincial or federal governments under s. 91 or s. 92 of the Constitution Act, 1867 . But since Toronto Electric Commissioners v. Snider, [1925] A.C. 396 (P.C.), Canadian courts have recognized that labour relations are presumptively a provincial matter, and that the federal government has jurisdiction over labour relations only by way of exception. This exception has always been narrowly interpreted (Snider; Reference re Industrial Relations and Disputes Investigation Act, [1955] S.C.R. 529 (the “Stevedoring case”); Reference re Minimum Wage Act of Saskatchewan, [1948] S.C.R. 248; Commission du salaire minimum v. Bell Telephone Co. of Canada, [1966] S.C.R. 767; Agence Maritime Inc. v. Conseil canadien des relations ouvrières, [1969] S.C.R. 851; Letter Carriers’ Union of Canada v. Canadian Union of Postal Workers, [1975] 1 S.C.R. 178; Canada Labour Relations Board v. City of Yellowknife, [1977] 2 S.C.R. 729; Construction Montcalm Inc. v. Minimum Wage Commission, [1979] 1 S.C.R. 754; Northern Telecom; Four B; Bell Canada v. Quebec (Commission de la santé et de la sécurité du travail), [1988] 1 S.C.R. 749; Ontario Hydro v. Ontario (Labour Relations Board), [1993] 3 S.C.R. 327; Consolidated Fastfrate, at paras. 27-28).
[12] The approach to determining whether an entity’s labour relations are federally or provincially regulated is a distinct one and, notably, entails a completely different analysis from that used to determine whether a particular statute is intra or ultra vires the constitutional authority of the enabling government. Because the regulation of labour relations falls presumptively within the jurisdiction of the provinces, the narrow question when dealing with cases raising the jurisdiction of labour relations is whether a particular entity is a “federal work, undertaking or business” for purposes of triggering the jurisdiction of the Canada Labour Code .
[13] The principles underpinning this Court’s well-established approach to labour relations jurisdiction are set out by Dickson J., writing for a unanimous Court, in Northern Telecom. The case dealt with the jurisdiction of the labour relations of a subsidiary of a telecommunications company which was itself unquestionably a federal “work, undertaking or business” under s. 92(10) (a) of the Constitution Act, 1867 . Adopting Beetz J.’s majority judgment in Construction Montcalm, Dickson J. described the relationship between the division of powers and labour relations as follows:
(1) Parliament has no authority over labour relations as such nor over the terms of a contract of employment; exclusive provincial competence is the rule.
(2) By way of exception, however, Parliament may assert exclusive jurisdiction over these matters if it is shown that such jurisdiction is an integral part of its primary competence over some other single federal subject.
(3) Primary federal competence over a given subject can prevent the application of provincial law relating to labour relations and the conditions of employment but only if it is demonstrated that federal authority over these matters is an integral element of such federal competence.
(4) Thus, the regulation of wages to be paid by an undertaking, service or business, and the regulation of its labour relations, being related to an integral part of the operation of the undertaking, service or business, are removed from provincial jurisdiction and immune from the effect of provincial law if the undertaking, service or business is a federal one. [p. 132]
[14] He then set out a “functional test” for determining whether an entity is “federal” for purposes of triggering federal labour relations jurisdiction. Significantly, the “core” of the telecommunications head of power was not used to determine, as part of the functional analysis, the nature of the subsidiary’s operations:
(5) The question whether an undertaking, service or business is a federal one depends on the nature of its operation.
(6) In order to determine the nature of the operation, one must look at the normal or habitual activities of the business as those of “a going concern”, without regard for exceptional or casual factors; otherwise, the Constitution could not be applied with any degree of continuity and regularity. [Emphasis added; p. 132.]
[15] Four B, decided the same year as Northern Telecom, also adopted the principles from Construction Montcalm, and again found the functional test, which examined the “normal or habitual activities” of the entity, to be determinative. The issue in Four B was whether provincial labour legislation applied to a provincially incorporated manufacturing operation that was owned by four Aboriginal band members, employed mostly band members, and operated on reserve land pursuant to a federal permit. Beetz J., for the majority, set out the governing principles and concluded that the “operational nature” of the business was provincial:
In my view the established principles relevant to this issue can be summarized very briefly. With respect to labour relations, exclusive provincial legislative competence is the rule, exclusive federal competence is the exception. The exception comprises, in the main, labour relations in undertakings, services and businesses which, having regard to the functional test of the nature of their operations and their normal activities, can be characterized as federal undertakings, services or businesses . . . .
There is nothing about the business or operation of Four B which might allow it to be considered as a federal business: the sewing of uppers on sport shoes is an ordinary industrial activity which clearly comes under provincial legislative authority for the purposes of labour relations. Neither the ownership of the business by Indian shareholders, nor the employment by that business of a majority of Indian employees, nor the carrying on of that business on an Indian reserve under a federal permit, nor the federal loan and subsidies, taken separately or together, can have any effect on the operational nature of that business. By the traditional and functional test, therefore, The Labour Relations Act applies to the facts of this case, and the Board has jurisdiction. [Emphasis added; pp. 1045-46.]
Beetz J. was satisfied that the functional test was conclusive and that Four B was a provincial undertaking.
[16] At no point, in discussing the functional test, does Beetz J. mention the “core” of s. 91(24) or its content. In fact, he makes it clear that only if the functional test is inconclusive as to whether a particular undertaking is “federal”, should a court consider whether provincial regulation of labour relations would impair the “core” of whatever federal regulation governed the entity.
[17] He went on to discuss, in obiter, whether this conclusion would have been different if the functional test had been inconclusive:
The functional test is a particular method of applying a more general rule namely, that exclusive federal jurisdiction over labour relations arises only if it can be shown that such jurisdiction forms an integral part of primary federal jurisdiction over some other federal object: the Stevedoring case.
Given this general rule, and assuming for the sake of argument that the functional test is not conclusive for the purposes of this case, the first question which must be answered . . . is whether the power to regulate the labour relations in issue forms an integral part of primary federal jurisdiction over Indians and Lands reserved for the Indians. The second question is whether Parliament has occupied the field by the provisions of the Canada Labour Code . [Emphasis added; p. 1047.]
[18] In other words, in determining whether an entity’s labour relations will be federally regulated, thereby displacing the operative presumption of provincial jurisdiction, Four B requires that a court first apply the functional test, that is, examine the nature, operations and habitual activities of the entity to see if it is a federal undertaking. If so, its labour relations will be federally regulated. Only if this inquiry is inconclusive should a court proceed to an examination of whether provincial regulation of the entity’s labour relations would impair the core of the federal head of power at issue.
[19] Notwithstanding this Court’s long-standing approach, a different line of authority has uniquely emerged when courts are dealing with s. 91(24) (see Sappier v. Tobique Indian Band (Council) (1988), 87 N.R. 1 (F.C.A.); Qu’Appelle Indian Residential School Council v. Canada (Canadian Human Rights Tribunal), [1988] 2 F.C. 226 (T.D.), at p. 239; Sagkeeng Alcohol Rehab Centre Inc. v. Abraham, [1994] 3 F.C. 449 (T.D.), at pp. 459-60). This divergent analysis proceeds, contrary to Four B, directly to the question of whether the “core” of the head of power is impaired, without applying the functional test first. Moreover, rather than considering whether the regulation of the entity’s labour relations would impair the “core” of a federal head of power, these decisions have examined instead whether the nature of the entity’s operations lay at the “core” and therefore displaced the presumption that labour relations are provincially regulated.
[20] There is no reason why, as a matter of principle, the jurisdiction of an entity’s labour relations should be approached differently when s. 91(24) is at issue. The fundamental nature of the inquiry is — and should be — the same as for any other head of power. It is an inquiry with two distinct steps, the first being the functional test. A court should proceed to the second step only when this first test is inconclusive. If it is, the question is not whether the entity’s operations lie at the “core” of the federal head of power; it is whether the provincial regulation of that entity’s labour relations would impair the “core” of that head of power. Collapsing the two steps into a single inquiry, as the trial judge and the Court of Appeal did, and as the Chief Justice and Fish J. do in their concurring reasons, transforms the traditional labour relations test into a different test: the one used for determining whether a statute is “inapplicable” under the traditional interjurisdictional immunity doctrine. The two-step inquiry preserves the integrity of the unique labour relations test; the single-step approach extinguishes it.
[21] With great respect, therefore, to the contrary views of the Chief Justice and Fish J., I do not agree that consideration of the “core” of a federal head of power is part of the functional test, the first step of the analysis. Whether an activity lies at the “core” of a federal undertaking or head of power is an analysis carried out in the narrow confines of interjurisdictional immunity: see Canadian Western Bank v. Alberta, 2007 SCC 22, [2007] 2 S.C.R. 3. The functional test is not an alternate method of determining whether an activity lies at the “core”; rather, the functional test looks to whether the “undertaking, service or business is a federal one” (Northern Telecom, at p. 132).
[22] The difference between these two approaches is significant. The “core” of a federal head of power might not capture the scope or potential reach of federal legislative jurisdiction, as the Court held in Canadian Western Bank. Additionally, it is possible for an entity to be federally regulated in part and provincially regulated in part. To the extent that the functional test is inconclusive as to jurisdiction over the labour relations of an entity, the presumption of provincial jurisdiction will apply in such a case unless the core of the federal head of power would be impaired by provincial regulation of the entity’s labour relations. It is only in this circumstance of an inconclusive finding about the application of the functional test that this narrow analysis of the “core” of the federal power will be engaged.
[23] This brings us to the application of the Four B test to the circumstances of this case. The delivery of child welfare services in British Columbia is governed by the Child, Family and Community Service Act. The Act sets out a detailed child protection regime for the province that is administered by “directors” appointed by the Minister for Child and Family Development (s. 91).
[24] The province of British Columbia (represented by a director appointed under the Act), the federal government (represented by the Minister of Indian Affairs) and NIL/TU,O (representing the Collective First Nations) are parties to a tripartite delegation agreement, first signed in 1999 and later confirmed in 2004 (“2004 Agreement”). Under this agreement, the provincial government, as the keeper of constitutional authority over child welfare, delegated some of its statutory powers and responsibilities over the delivery of child welfare services to the Collective First Nations to NIL/TU,O. This delegation is anticipated by s. 93(1)(g)(iii) of the Act, which permits a provincial director to make agreements for the delivery of statutory child welfare services with legal entities representing Aboriginal communities. The federal government’s role in the arrangement is limited to financing NIL/TU,O’s provision of certain services to certain children.
[25] The 2004 Agreement established NIL/TU,O’s responsibility for delivering services provided for in the Act to the Collective First Nations’ children and their families and confirmed the rights of those children to be connected to their culture and to receive “culturally appropriate” services from NIL/TU,O (arts. 2.1(a) and (d)). It provides that the province of British Columbia has legislative authority in respect of child welfare and that the director is responsible for administering the Act (Preamble, art. D). The 2004 Agreement also provides, however, that NIL/TU,O has the right to “care for and protect NIL/TU,O Children and to preserve their connection to their culture and heritage through the delivery of culturally appropriate Services” (Preamble, art. G).
[26] When providing delegated statutory services, NIL/TU,O’s employees are always accountable to the directors appointed under the Act (2004 Agreement, arts. 5.1 and 5.2), and NIL/TU,O is required, at all times, to deliver its delegated services in accordance with the Act (2004 Agreement, arts. 3.1 and 4.2). In providing these statutory services, NIL/TU,O must uphold the Act’s paramount considerations, namely, the safety and well-being of children, and must comply with the following principles (s. 2):
(a) children are entitled to be protected from abuse, neglect and harm or threat of harm;
(b) a family is the preferred environment for the care and upbringing of children and the responsibility for the protection of children rests primarily with the parents;
(c) if, with available support services, a family can provide a safe and nurturing environment for a child, support services should be provided;
(d) the child’s views should be taken into account when decisions relating to a child are made;
(e) kinship ties and a child’s attachment to the extended family should be preserved if possible;
(f) the cultural identity of [A]boriginal children should be preserved;
(g) decisions relating to children should be made and implemented in a timely manner.
[27] NIL/TU,O must also provide its statutory services in accordance with the service delivery principles listed in s. 3 of the Act:
(a) families and children should be informed of the services available to them and encouraged to participate in decisions that affect them;
(b) [A]boriginal people should be involved in the planning and delivery of services to [A]boriginal families and their children;
(c) services should be planned and provided in ways that are sensitive to the needs and the cultural, racial and religious heritage of those receiving the services;
(d) services should be integrated, wherever possible and appropriate, with services provided by government ministries, community agencies and Community Living British Columbia established under the Community Living Authority Act;
(e) the community should be involved, wherever possible and appropriate, in the planning and delivery of services, including preventive and support services to families and children.
[28] In addition, NIL/TU,O is bound by the factors that, according to the Act, define the “best interests of a child”, namely the child’s safety, physical and emotional needs, level of development, cultural, racial, linguistic and religious heritage; the importance of continuity in the child’s care; the quality of the relationship between the child and his or her parent or other person; the effect of maintaining that relationship; the child’s views; and the effect on the child in the event of a delayed decision (s. 4(1)). If a child is Aboriginal, the importance of preserving the child’s cultural identity must also be considered when determining what is in his or her best interests (s. 4(2)). It is of note that under s. 71(3) of the Act, when an Aboriginal child is in care, priority must be given to placing the child with the child’s extended family, a family within the child’s Aboriginal cultural community, or another Aboriginal family. Alternative placement options are considered only if these parameters cannot be met.
[29] The specific statutory powers delegated to NIL/TU,O by the province are set out in a “Delegation Matrix” appended to the 2004 Agreement. There are several categories of delegated authority. Most of the NIL/TU,O employees exercising delegated authority operate at the lower category, category 12, which means that they can provide support services for families, administer voluntary care and special needs agreements, and establish residential resources for children in care. Some employees have category 13 authority, which gives them the responsibility for guardianship of children and youth in continuing custody in addition to the lower category powers.
[30] None of NIL/TU,O’s employees have category 14 or 15 authority, which are the highest levels contemplated by the regime. Practitioners with category 15 authority are the only ones who are authorized to provide the full range of child protection services set out in the Act, including the apprehension of children in need of protection. Category 14 is reserved for new child protection workers who operate under the supervision of a category 15 practitioner. Therefore, when a child in NIL/TU,O’s care is in need of protection, an issue that exists in approximately 20 to 30 percent of NIL/TU,O’s files, NIL/TU,O employees have no authority to provide the necessary services.
[31] In all cases, a director under the Act can intervene to ensure NIL/TU,O’s compliance with the Act (2004 Agreement, art. 4.3). When a dir