British Columbia (Attorney General) v. Alberta (Attorney General)

British Columbia (Attorney General) v. Alberta (Attorney General)
Court (s) Database
Federal Court Decisions
Date
2019-09-24
Neutral citation
2019 FC 1195
File numbers
T-982-19
Notes
Reported Decision
Decision Content
Date: 20190924
Docket: T-982-19
Citation: 2019 FC 1195
Ottawa, Ontario, September 24, 2019
PRESENT: Mr. Justice Sébastien Grammond
BETWEEN:
ATTORNEY GENERAL
OF BRITISH COLUMBIA
Plaintiff
and
ATTORNEY GENERAL
OF ALBERTA
Defendant
ORDER AND REASONS
TABLE OF CONTENTS
I. Background 5
A. Genesis of the Act 5
B. Contents of the Act 6
C. Proceedings in Alberta 7
D. Proceedings in this Court 8
II. Alberta’s Motion to Strike 9
A. Applicable Test 10
B. Jurisdiction 10
(1) Legislative History and Purpose of Section 19 13
(2) Wording and Implied Limitations 21
(3) Crown Immunity 26
C. Standing 30
D. Prematurity 32
III. British Columbia’s Motion for an Interlocutory Injunction 36
A. Analytical Framework 36
B. Serious Issue to be Tried 39
(1) The Process for Classifying Laws 40
(2) Interprovincial Commerce, Natural Resources and the Division of Powers 42
(3) Analysis 45
C. Irreparable Harm 51
(1) Principles and Burden of Proof 52
(2) The Evidence 53
(3) Analysis 56
D. Balance of Convenience 62
(1) Public Interest 63
(2) Inconvenience for the Defendant 65
(3) Strength of Plaintiff’s Case 66
(4) Summary 68
E. Terms of Injunction 69
IV. Disposition and Costs 70
[1]
Alberta has adopted the Preserving Canada’s Economic Prosperity Act, SA 2018, c P-21.5 [the Act]. This Act empowers the Minister of Energy of Alberta [the Minister] to require anyone who wishes to export natural gas, crude oil or refined fuels from Alberta to obtain a licence and to impose terms and conditions on such exports, including their quantity and destination. One of the factors that the Minister must consider before imposing such requirements is “whether adequate pipeline capacity exists to maximize the return on crude oil and diluted bitumen produced in Alberta.”
[2] British Columbia seeks a declaration that the Act is unconstitutional. It initially brought its action before the Alberta Court of Queen’s Bench, which stayed the action on the basis that the Federal Court would have jurisdiction over it. British Columbia then brought an action in this Court. It argues that the Act regulates interprovincial commerce, which is an area of exclusive federal jurisdiction, and that it is not saved by the exceptions contained in section 92A of the Constitution Act, 1867. Moreover, it asserts that the Act contravenes the prohibition of interprovincial customs duties in section 121 of the Constitution Act, 1867. According to British Columbia, the only purpose of the Act is to allow Alberta to cut British Columbia’s main source of petroleum products, in retaliation for its perceived opposition to the Trans Mountain pipeline expansion project.
[3] These reasons deal with two motions brought in the course of the action.
[4] First, Alberta brought a motion to strike British Columbia’s action on the basis that it is not within the jurisdiction of the Federal Court and that it is premature.
[5] Second, British Columbia brought a motion for an interlocutory injunction preventing the Minister from exercising her powers under the Act. In the alternative, it seeks an interlocutory injunction that would require the Minister to give 42 days’ notice before exercising those powers.
[6] I am dismissing Alberta’s motion to strike. Pursuant to section 19 of the Federal Courts Act, RSC 1985, c F-7, this Court has optional jurisdiction over interprovincial disputes. By legislation, the two provinces involved have opted into that jurisdiction. Alberta did not show any convincing reason why this jurisdiction would not encompass disputes regarding the constitutional validity of provincial legislation. Moreover, it is not premature to bring the matter before the Court at this time, as British Columbia challenges the Act itself and not any specific measure taken pursuant to the Act.
[7] I am allowing British Columbia’s motion for interlocutory injunction. British Columbia has met the criteria usually applied by the courts for the issuance of such an injunction. It has shown that the validity of the Act raises a serious issue. It has demonstrated that an embargo of the nature evoked by the members of Alberta’s legislature when debating the Act would cause irreparable harm to the residents of British Columbia. I am rejecting Alberta’s argument that this harm is speculative, because it is reasonably certain and its triggering lies entirely within Alberta’s discretion. Lastly, British Columbia has shown that the balance of convenience is in its favour, given the strength of its case and the lack of any clear and identifiable negative consequences for Alberta if the injunction is granted.
I. Background
[8] To place the issues raised by these two motions in their proper context, I must first describe the circumstances that gave rise to the adoption of the Act and provide a summary of what the Act purports to accomplish. I will then outline the steps that British Columbia has taken in the Alberta Court of Queen’s Bench and in this Court to challenge the Act.
A. Genesis of the Act
[9] The Trans Mountain pipeline was built in the 1950s and links Edmonton, Alberta, with Burnaby, British Columbia. It is the main pipeline by which petroleum products are carried from Alberta to British Columbia. The pipeline’s owner, Kinder Morgan Canada Ltd. [Kinder Morgan], has proposed to expand its capacity by building an additional line along the original line. That project, known as the Trans Mountain expansion, or TMX, has sparked vigorous public debate and has given rise to a number of legal proceedings. It is not necessary to give a full account of those debates and proceedings here. It is sufficient to highlight the event that precipitated the adoption of the Act: Kinder Morgan’s decision, announced on April 8, 2018, to suspend all non-essential work on the Trans Mountain expansion project.
[10] The following day, in the Alberta legislature, the Minister of Energy indicated that the government would soon introduce legislation regarding that situation. Bill 12, which became the Act, was then tabled on April 16, 2018. During the debates in the legislature, members of both main political parties made statements suggesting that the purpose of the Act is to inflict economic hardship on British Columbia because of its opposition to the Trans Mountain expansion project. I will review these statements in more detail later in these reasons.
[11] The Act was adopted and received royal assent on May 18, 2018. It was proclaimed into force roughly a year later, on April 30, 2019, after a new government took office.
B. Contents of the Act
[12] The Act’s central provision is section 2, which empowers the Minister to require exporters of petroleum products to obtain a licence. It is worded as follows:
2(1) No person shall, without a licence, export from Alberta any quantity of natural gas, crude oil or refined fuels.
(2) Subsection (1) applies only where the Minister by order requires a person or class of persons to obtain a licence.
(3) Before making an order under subsection (2), the Minister shall determine whether it is in the public interest of Alberta to do so having regard to
(a) whether adequate pipeline capacity exists to maximize the return on crude oil and diluted bitumen produced in Alberta,
(b) whether adequate supplies and reserves of natural gas, crude oil and refined fuels will be available for Alberta’s present and future needs, and
(c) any other matters considered relevant by the Minister.
[13] Section 4 empowers the Minister of Energy to set the terms and conditions of export licences, including “the point at which the licensee may export from Alberta any quantity of natural gas, crude oil or refined fuels,” as well as restrictions on maximum quantities and methods of exportation. Section 7 makes it an offence to breach the provisions of the Act or the terms of a licence. An individual offender is liable to a daily fine of up to $1,000,000, and a corporate offender is liable to a daily fine of up to $10,000,000. Section 10 provides immunity from suit for the Minister, the Crown or Crown employees for actions done pursuant to the Act. Section 11 empowers the Lieutenant Governor in Council to make regulations respecting a number of subjects, including applications for a licence and the terms and conditions of licences.
[14] The Act is also subject to a two-year “sunset clause:” pursuant to section 14, the Act is repealed two years after it is proclaimed into force. The Legislative Assembly, however, may extend that period by resolution.
[15] To this day, the Minister of Energy has not exercised the powers conferred by the Act and the Lieutenant Governor in Council has not made any regulations pursuant to the Act.
C. Proceedings in Alberta
[16] A few days after the Act was given royal assent, British Columbia commenced an action before the Alberta Court of Queen’s Bench for a declaration that the Act is unconstitutional. That action was dismissed for prematurity, as the Act had not yet been proclaimed into force: British Columbia (Attorney General) v Alberta (Attorney General), 2019 ABQB 121.
[17] On May 1, 2019, the day after the Act was proclaimed into force, British Columbia brought a new action before the Alberta Court of Queen’s Bench. It also sought an interlocutory injunction. Alberta, for its part, sought to have the action dismissed on the basis that British Columbia lacked standing.
[18] On July 19, 2019, Justice Hall of the Alberta Court of Queen’s Bench allowed Alberta’s motion in part and stayed British Columbia’s action: British Columbia (Attorney General) v Alberta (Attorney General), 2019 ABQB 550. Justice Hall held that under section 25 of Alberta’s Judicature Act, RSA 2000, c J-2, only the Attorneys General of Canada and Alberta have standing to seek a declaration of unconstitutionality before the Alberta courts. He went on to consider whether the Federal Court would have jurisdiction over the matter pursuant to section 19 of the Federal Courts Act and concluded as follows, at paragraphs 43–44:
While I have accepted the AGAB’s argument that only the AGCanada and the AGAB have standing to seek a declaration of constitutional invalidity of Alberta legislation in the Alberta courts, absent a claim for any other relief, this conclusion does not leave the AGBC without recourse and it does not immunize the AGAB from a constitutional challenge to the Act.
The above discussion suggests that Parliament and the provincial legislatures have enacted the requisite legislation to give the Federal Court jurisdiction in interprovincial disputes of this nature, which further suggests the AGBC has standing to bring its action before that court.
[19] I am informed that no appeal was taken of Justice Hall’s order.
D. Proceedings in this Court
[20] On June 14, 2019, British Columbia filed the present action. I understand that the statement of claim is substantially similar to the one filed in the Alberta Court of Queen’s Bench. By order of my colleague Justice Alan Diner, the action was put in abeyance while the Alberta Court of Queen’s Bench was considering Alberta’s motion to dismiss.
[21] On August 14, 2019, at the request of both parties, my colleague Prothonotary Kathleen Ring ordered that the case be specially managed and, on August 15, the Chief Justice designated me as the case management judge. I ordered that the case no longer be held in abeyance. British Columbia then filed its motion for an interlocutory injunction and Alberta, its motion to strike, and I set a timetable leading to the hearing of those two motions. It was agreed that the evidence in support of British Columbia’s motion would be the same as filed in support of a similar motion before the Alberta Court of Queen’s Bench.
II. Alberta’s Motion to Strike
[22] Alberta asks that British Columbia’s action be struck on two grounds: it is not within the jurisdiction of the Federal Court, and it is premature. I am dismissing Alberta’s motion to strike, because Alberta failed to identify any grounds to negate this Court’s jurisdiction and because the matter is ripe for judicial decision.
[23] In the following pages, after explaining the test that guides the Court on a motion to strike, I will analyse Alberta’s arguments with respect to jurisdiction and prematurity. As I consider that some of Alberta’s arguments are better described as a challenge to British Columbia’s standing to pursue this action, I will address them as such in a separate section.
A. Applicable Test
[24] Rule 221 of the Federal Courts Rules, SOR/98-106, provides that, on motion, the Court may strike out a pleading, such as British Columbia’s statement of claim, if that pleading “discloses no reasonable cause of action” or “is otherwise an abuse of the process of the Court.” In R v Imperial Tobacco Ltd, 2011 SCC 42 at paragraph 17, [2011] 3 SCR 45, the Supreme Court of Canada described as follows the test to be applied to a motion to strike:
A claim will only be struck if it is plain and obvious, assuming the facts pleaded to be true, that the pleading discloses no reasonable cause of action […]. Another way of putting the test is that the claim has no reasonable prospect of success. Where a reasonable prospect of success exists, the matter should be allowed to proceed to trial […]
B. Jurisdiction
[25] A motion to strike may be grounded in the Court’s lack of jurisdiction. Nevertheless, the test remains the same: the action will be struck only if it is plain and obvious that the Court does not have jurisdiction: Alberta v Canada, 2018 FCA 83 at paragraph 20 [Alberta v Canada]; Apotex Inc v Ambrose, 2017 FC 48 at paragraphs 36–39, [2017] 4 FCR 510; Windsor (City) v Canadian Transit Co, 2016 SCC 5 at paragraph 24, [2016] 2 SCR 617 [Windsor].
[26] Given that the jurisdictional issue was fully argued and that it does not turn on any findings of fact, I am in a position to decide it. I find that this Court has jurisdiction over British Columbia’s action.
[27] British Columbia grounds this Court’s jurisdiction to hear its action in section 19 of the Federal Courts Act and parallel provincial statutes. Section 19 reads as follows:
19. If the legislature of a province has passed an Act agreeing that the Federal Court, the Federal Court of Canada or the Exchequer Court of Canada has jurisdiction in cases of controversies between Canada and that province, or between that province and any other province or provinces that have passed a like Act, the Federal Court has jurisdiction to determine the controversies.
19. Lorsqu’une loi d’une province reconnaît sa compétence en l’espèce, — qu’elle y soit désignée sous le nom de Cour fédérale, Cour fédérale du Canada ou Cour de l’Échiquier du Canada — la Cour fédérale est compétente pour juger les cas de litige entre le Canada et cette province ou entre cette province et une ou plusieurs autres provinces ayant adopté une loi semblable.
[28] Most Canadian provinces have enacted legislation accepting this Court’s jurisdiction in such matters. British Columbia’s Federal Courts Jurisdiction Act, RSBC 1996, c 135, s 1, recognizes this Court’s jurisdiction over “controversies between British Columbia and any other province of Canada that has passed an Act similar to this Act.” Section 27 of Alberta’s Judicature Act does the same, with respect to “controversies between Alberta and any other province or territory of Canada in which an Act similar to this Act is in force.”
[29] The concept common to the three relevant statutes is that, in English, of “controversy” and, in French, of “litige.” One could be forgiven for thinking that there is obviously a “controversy” or “litige” between British Columbia and Alberta regarding the constitutional validity of the Act. Nevertheless, words in legislation should not be read in isolation and they sometimes take on a technical meaning. Thus, relying on the historical evolution of what became section 19 of the Federal Courts Act and authorities that have interpreted its language or similar phrases, Alberta argues that Parliament never intended to allow this Court to judge the constitutional validity of provincial legislation.
[30] I underscore that Alberta’s challenge is not based on constitutional grounds. Alberta does not assert that the declaration sought by British Columbia exceeds the bounds of section 101 of the Constitution Act, 1867, as delineated in cases such as Quebec North Shore Paper v Canadian Pacific Ltd, [1977] 2 SCR 1054, and ITO-Int’l Terminal Operators v Miida Electronics, [1986] 1 SCR 752. Indeed, when this Court exercises jurisdiction over interprovincial disputes pursuant to section 19 of the Federal Courts Act and corresponding provincial legislation, the constitutional source of its jurisdiction is found not only, and perhaps not mainly, in section 101, but also in section 92(14), which grants provinces jurisdiction over the administration of justice: Alberta v Canada, at paragraph 34. This is an example of cooperative federalism that the courts have been loath to overturn: Fédération des producteurs de volailles du Québec v Pelland, 2005 SCC 20 at paragraph 38, [2005] 1 SCR 292; Reference re Pan‑Canadian Securities Regulation, 2018 SCC 48 at paragraph 18 [Second Securities Reference].
[31] Thus, Alberta’s challenge to this Court’s jurisdiction involves essentially an exercise in statutory interpretation. I will thus have resort to the usual methods of interpretation, namely, reviewing the wording, context and purpose of the relevant provision. Context includes other provisions of the same statute, other legislation and general constitutional principles. Purpose may be gleaned from an analysis of the statute itself as well as the circumstances in which it was enacted. I will also heed the Supreme Court of Canada’s advice that legislation granting jurisdiction to the Federal Court must be given a generous and liberal, rather than a narrow, interpretation: Canada (Human Rights Commission) v Canadian Liberty Net, [1998] 1 SCR 626 at paragraph 34.
(1) Legislative History and Purpose of Section 19
[32] I will begin with a review of the circumstances that led to the enactment of what became section 19 of the Federal Courts Act. Not only will this elucidate the purpose of that provision; it will also dispose of Alberta’s main argument – that Parliament specifically considered the issue of challenges to the validity of provincial legislation and chose to ascribe jurisdiction over such challenges to the Supreme Court only and not to the Exchequer Court, the ancestor of today’s Federal Court.
[33] At Confederation the idea of judicial review was well understood. Colonial legislatures and governments exercised limited power. Courts had the power to strike down colonial legislation that contradicted Imperial legislation, as was made clear by the Colonial Laws Validity Act, 1865. Barry L. Strayer summarizes the situation as follows, in The Canadian Constitution and the Courts, 3rd ed (Toronto: Butterworths, 1988) at 14 [Strayer, Constitution].
We can thus see that, as Confederation approached, the judges and lawyers in the colonies of British North America must have been familiar to some degree with the British doctrine of judicial review of colonial legislation. Courts in other colonies had exercised this function, some British North American courts had at least exercised an analogous function, and the English courts had not hesitated to deal with colonial legislative validity where it was relevant to their proceedings. The Judicial Committee, as the supreme judicial body of the colonial system, had provided ample precedents for judicial review. Its practice would have led the colonial courts to consider the question of validity where necessary, in anticipation of that issue being dealt with in London on appeal.
[34] One feature of that form of review must be underlined. Every judge in the country, whatever the level of court, is empowered to review the constitutional validity of legislation. Today, comparative constitutional lawyers call this “diffuse” or “decentralized” judicial review, as the mandate of applying the constitution is not entrusted to a single, specialized court. Using the example of the United States, Professor Favoreu and his colleagues describe the concept as follows in Droit constitutionnel, 21st ed. (Paris: Dalloz, 2019) at 257 [Favoreu, Droit constitutionnel]:
[translation]
Applied to the American system, characterizing judicial review as “diffuse” means that any federal or State judge may review legislation on constitutional grounds … the judge seized of the matter in the first instance has jurisdiction to decide all the issues arising in a case, whether they be civil, criminal, administrative or constitutional.
[35] While the concept of judicial review was well known, the structure of the judicial institutions that would enforce the federal division of powers established by the new constitution was very much a matter of debate. Non-judicial means, such as the federal cabinet’s disallowance power or arbitration (see, in this regard, Alberta v Canada, at paragraph 31), were used for some time. Nevertheless, the Fathers of Confederation foresaw that the courts would play a major role, although they disagreed as to whether the Judicial Committee of the Privy Council in London or a Canadian general court of appeal should be entrusted with the final determination of disputes regarding the division of powers: Strayer, Constitution, at 15–22. Moreover, there were many conceptual obstacles to the judicial resolution of disputes involving governments, including Crown immunity and the concept of the indivisibility of the Crown.
[36] In 1875, a significant step in adapting the judiciary to the new federal structure was taken with the enactment of the Supreme and Exchequer Courts Act, SC 1875, c 11. Relevant to this discussion are the means provided by Parliament for the resolution of intergovernmental disputes, including disputes as to the validity of legislation, which in that era would mostly be related to the division of powers.
[37] The first means was the federal government’s reference power. Instead of waiting for a case to wind its way through the various levels of courts, the government could refer a question directly to the Supreme Court, in particular when the validity of legislation was at stake. This power has been used repeatedly ever since. A significant proportion of our constitutional law now stems from advisory opinions issued by the Supreme Court in reference cases.
[38] Two other means were also provided. As Alberta relies strongly on the wording of the relevant provision of the Supreme and Exchequer Courts Act, it is useful to set it out in full here, and to separate its various components for ease of reading:
54. When the Legislature of any Province forming part of Canada shall have passed an Act agreeing and providing that the Supreme Court, and the Exchequer Court, or the Supreme Court alone, as the case may be, shall have jurisdiction in any of the following cases, viz.: –
54. Lorsque la législature d’une province faisant partie du Canada aura passé un acte convenant et décrétant que la Cour Suprême et la Cour de l’Échiquier, ou la Cour Suprême seulement, selon le cas, auront juridiction dans aucun des cas suivants, savoir :
(1st) Of controversies between the Dominion of Canada and such Province;
(1.) Les contestations entre la Puissance du Canada et cette province;
(2nd) Of controversies between such Province and any other Province or Provinces, which may have passed a like Act;
(2.) Les contestations entre cette province et quelque autre province ou quelques autres provinces qui auront passé un acte semblable;
(3rd) Of suits, actions or, proceedings in which the parties thereto by their pleadings shall have raised the question of the validity of an Act of the Parliament of Canada, when in the opinion of a Judge of the Court in which the same are pending such question is material;
(3.) Les poursuites, actions ou procédures dans lesquelles les parties auront, par leur plaidoyer, soulevé la question de la validité d’un acte du parlement du Canada, lorsque, dans l’opinion d’un juge de la cour devant laquelle elle est pendante, cette question est essentielle;
(4th) Of suits, actions, or proceedings in which the parties thereto by their pleadings shall have raised the question of the validity of an Act of the Legislature of such Province, when in the opinion of a Judge of the Court in which the same are pending such question is material;
(4.) Les poursuites, actions ou procédures dans lesquelles les parties auront, par leur plaidoyer, soulevé la question de la validité d’un acte de la législature de cette province, lorsque, dans l’opinion d’un juge de la cour devant laquelle elle est pendante, cette question est essentielle;
then this section and the three following sections of this Act shall be in force in the class or classes of cases in respect of which such Act so agreeing and providing, may have been passed.
alors la présente section et les trois sections immédiatement suivantes du présent acte seront en vigueur dans la catégorie ou les catégories de cas à l’égard desquels tel acte convenant et décrétant comme susdit, pourra avoir été passé.
[39] Section 55 then states that the Exchequer Court will hear cases falling under the first and second categories mentioned in section 54, with an appeal lying to the Supreme Court. Section 56 sets out the procedure applicable to the third and fourth categories as follows:
56. In the cases thirdly and fourthly mentioned in the next preceding section but one, the Judge who has decided that such question is material, shall order the case to be removed to the Supreme Court in order to the decision of such question, and it shall be removed accordingly, and after the decision of the Supreme Court, the said case shall be sent back, with a copy of the judgment on the question raised, to the Court or Judge whence it came, to be then and there dealt with as to justice may appertain.
56. Dans les cas en troisième et quatrième lieux mentionnés dans l’avant-dernière section immédiatement précédente, le juge qui aura décidé que cette question est essentielle ordonnera que la cause soit portée devant la Cour Suprême, afin que cette question y soit décidée, et elle y sera portée en conséquence; et après la décision de la Cour Suprême, la cause sera renvoyée, avec copie du jugement sur la question soulevée, à la cour ou au juge dont elle provient, pour y être alors décidée suivant la justice.
[40] Alberta argues that the fundamental difference between the first two categories of cases, which fall within the jurisdiction of the Exchequer Court, and the last two, which fall under the exclusive jurisdiction of the Supreme Court, is that the last two categories of cases relate to the validity of legislation, whereas the first two do not. In other words, the “controversies” mentioned in the first two paragraphs cannot relate to the validity of legislation, which is only mentioned in the last two paragraphs. If something is mentioned in one place but omitted in another, the omission is significant – the Latin maxim, inclusio unius, exclusio alterius, is often used to convey the idea. It follows, according to Alberta, that Parliament intended to withhold from the Exchequer Court the power to strike down provincial legislation. With respect, this is a misreading of those provisions.
[41] Alberta’s argument fails to appreciate that, through those sections, Parliament provided two fundamentally different vehicles for the resolution of disputes that were expected to arise in the new federal context. Given those differences, the maxim inclusio unius, exclusio alterius cannot be applied. Let me explain.
[42] At the time of Confederation, because of the then prevailing views of Crown immunity and indivisibility, there was no obvious judicial forum for the resolution of disputes between governments in a federal system. The first two paragraphs of section 54, the substance of which is now embodied in section 19 of the Federal Courts Act, thus created a new kind of jurisdiction, which would overcome the limitations flowing from Crown immunity and indivisibility. With respect to interprovincial disputes, they also provided a forum that is not a court of one of the provinces involved. In R (Canada) v R (Prince Edward Island), [1978] 1 FC 533 (CA) at 558 [Canada v PEI], Chief Justice Jackett commented as follows on the purpose of those provisions:
In my view, this legislation (section 19 and the provincial “Act”) creates a jurisdiction differing in kind from the ordinary jurisdiction of municipal courts to decide disputes between ordinary persons or between the Sovereign and an ordinary person. It is a jurisdiction to decide disputes as between political entities and not as between persons recognized as legal persons in the ordinary municipal courts.
[43] (Here, the Chief Justice uses the phrase “municipal courts” as a synonym of “domestic courts,” in opposition to international courts.)
[44] The last two paragraphs of section 54 create a very different mechanism. It was an attempt to implement what is now known, in other countries, as “concentrated” or “centralized” judicial review: Favoreu, Droit constitutionnel at 266; Juliane Kokott and Martin Kaspar, “Ensuring Constitutional Efficacy” in Michel Rosenfeld and András Sajó, eds., Oxford Handbook of Comparative Constitutional Law (Oxford: Oxford University Press, 2012) 795 at 807–15. The idea was that, contrary to the existing situation, ordinary courts would not decide constitutional issues arising in cases before them, but would rather refer them to a single, centralized constitutional court, which would be the Supreme Court: Peter H. Russell, “The Jurisdiction of the Supreme Court of Canada: Present Policies and a Programme for Reform” (1968) 6 Osgoode Hall LJ 1 at 7–8. There would be, in Professor Favoreu’s words, [translation] “a specific constitutional court endowed with a monopoly on constitutional interpretation:” Favoreu, Droit constitutionnel, at 266. The intention to implement such a system is made clear by the process laid out in section 56, although its use was not compulsory, but left to the discretion of the judge hearing the case.
[45] In making recourse to this process optional, Parliament perhaps anticipated that it could not deprive provincial superior courts of the jurisdiction to apply the constitution: Canada (Attorney General) v Law Society of British Columbia, [1982] 2 SCR 307. This optional nature may explain why the process appears never to have been used. In any event, it was repealed in 1974 as part of the overhaul of the Supreme Court’s jurisdiction, and concentrated judicial review remains foreign to our constitutional tradition.
[46] The difference between the two mechanisms provided for in section 54 must be emphasized and demonstrates why Alberta’s argument fails. The first mechanism is exclusively geared towards disputes between governments and is aimed at providing a forum when none was thought to exist. The second one pertains to constitutional issues arising in everyday litigation, in particular litigation between private parties. It is easy to understand why Parliament wanted only constitutional questions to be referred to the Supreme Court by other courts. This does not mean, however, that the constitutional validity of a provincial statute could never be challenged under the Exchequer Court’s jurisdiction over intergovernmental disputes. The two mechanisms provided for in section 54 are simply unrelated and they are not mutually exclusive.
[47] Quite the contrary, the goals pursued by Parliament in enacting what became section 19 suggest that it should receive a generous interpretation. As Chief Justice Jackett noted, the aim was to create a new jurisdiction to deal with intergovernmental disputes. It would have been obvious to the members of Parliament – several of whom had participated in the Confederation debates during which the issue was expressly raised – that such disputes would include issues regarding the compliance of legislation with the constitutional division of powers. Other than in the course of private litigation, there was no obvious judicial forum to resolve such issues. Provincial governments were not yet empowered to refer questions to the court of appeal of their province and could not refer a question directly to the Supreme Court: James L Huffman and MardiLyn Saathoff, “Advisory Opinions and Canadian Constitutional Development: The Supreme Court’s Reference Jurisdiction” (1990) 74 Minn L Rev 1251 at 1259.
[48] Thus, contrary to Alberta’s submissions, the legislative history of section 19 does not show that constitutional issues fall outside its purview. To the contrary, the context in which it was enacted tends to demonstrate that it should be given a wide interpretation and that its authors understood that the “controversies” that this Court must resolve would include controversies as to the validity of legislation.
[49] Alberta also argues that irrespective of the scope of section 19 of the Federal Courts Act, any claim made against Alberta under that provision must also come within the purview of section 27 of its Judicature Act. That is obviously true. Given, however, that those provisions form part of an interlocking federal-provincial statutory scheme, I am reluctant to ascribe them different meanings in the absence of an explicit indication to that effect. Alberta says that such an indication is provided by other provisions of the Judicature Act. The Alberta legislature would not, as the argument goes, have given the Federal Court a wider jurisdiction over constitutional issues than to the province’s own courts. With respect, this is speculative. In addition to being based on assumptions that I do not wish to discuss here, this argument overlooks that it is equally possible that the Alberta legislature shared Parliament’s wish to provide a national forum for the resolution of intergovernmental disputes, including those involving the validity of legislation, and intended to fill any gaps that might have existed in that respect.
(2) Wording and Implied Limitations
[50] Alberta also argues that the word “controversy” should not receive a broad meaning, but should rather be interpreted according to certain Canadian precedents or in a manner similar to the phrase “cases and controversies” in the constitution of the United States. Of course, I am bound by the pronouncements of higher courts as to the meaning of section 19. A careful review of the cases invoked by Alberta, however, does not evince any intention of narrowing the scope of section 19 in the manner suggested. Moreover, the American jurisprudence regarding “cases and controversies” has simply not been applied in Canada.
[51] Alberta argues that for a case to come under section 19, it must involve a “legal right, obligation or liability.” That phrase is taken from the reasons of Justice Le Dain in Canada v PEI, at 583. Justice Le Dain, however, did not set out to describe the outer limits of section 19. He was using those terms to make the point that Prince Edward Island’s claim in that case fell squarely within section 19. The full passage is as follows:
The term “controversy” is broad enough to encompass any kind of legal right, obligation or liability that may exist between Governments or their strictly legal personification. It is certainly broad enough to include a dispute as to whether one Government is liable in damages to another.
[52] Justice Le Dain simply did not address the issue of whether a challenge to the validity of legislation could be described as a “controversy.” Likewise, the reference to “contract or trust” in Ontario (Attorney General) v Canada (Attorney General) (1907), 39 SCR 14 at 45–46 was more a description of the issue at hand than of the outer limits of the predecessor to section 19.
[53] Another early Supreme Court case provides more insight into the scope of section 19. Province of Ontario v Dominion of Canada (1909), 42 SCR 1, aff’d [1910] AC 637 (PC), was not a challenge to the validity of legislation, but a claim by Canada to be reimbursed by Ontario for the annuities paid according to a treaty with certain Indigenous peoples of that province. After the treaty was made, the Privy Council held that, contrary to Canada’s assumption, the “extinguishment” of aboriginal title benefitted Ontario. Canada’s claim to reimbursement was not based on a right recognized by statute or the common law, but on general concepts of equity and on an analogy with the concept of quasi-contract in the civil law tradition. It is in that context that Justice Duff wrote the following passage, quoted in Alberta’s memorandum, at 118–119:
The “Exchequer Court Act” confers upon that court jurisdiction to decide a controversy such as this. It says nothing about the rule to be applied in reaching a decision; but it is not to be supposed that (acting as a court) that court is to proceed only upon such views as the judge of the court may have concerning what (in the circumstances presented to him) it would be fair and just and proper that one or the other party to the controversy should do. I think that in providing for the determination of controversies the Act speaks of controversies about rights; pre-supposing some rule or principle according to which such rights can be ascertained; which rule or principle could, it should seem, be no other than the appropriate rule or principle of law. I think we should not presume that the Exchequer Court has been authorized to make a rule of law for the purpose of determining such a dispute; or to apply to such a controversy a rule or principle prevailing in one locality when, according to accepted principles, it should be determined upon the law of another locality.
[54] Likewise, Justice Idington wrote, at 101:
We should, I think, first consider the nature of the jurisdiction given by section 32 of the “Exchequer Court Act” in assigning to that court the power to determine “controversies” arising between the Dominion and a province that has acceded thereto.
The language is comprehensive enough to cover claims founded on some principles of honour, generosity or supposed natural justice, but no one in argument ventured to say the court was given any right to proceed upon any such ground. It seemed conceded that we must find a basis for the claim either in a contractual or (bearing in mind that the controversy is the Crown against the Crown for both parties act in the name of the Crown) quasi-contractual relation between the parties hereto or on some ground of legal equity.
[55] In making these remarks, both justices were emphasizing Canada’s need to identify a legal basis for its claim. “Rights,” “contract” or “legal equity” were potentially the most relevant legal concepts in that particular case, although the Court eventually dismissed Canada’s claim, as it had not contracted with Ontario for the reimbursement of the treaty annuities. Insofar as we can deduce anything regarding the meaning of “controversy” in section 19 of the Federal Courts Act, it is that such a controversy must be able to be decided on legal grounds, as opposed to moral or policy grounds.
[56] Alberta also relies heavily on the American jurisprudence dealing with Article III of the United States constitution, which uses the words “cases” and “controversies” to delineate the jurisdiction of the federal judiciary. Those concepts have been interpreted as putting important restrictions on what is known as a “facial challenge,” that is, a challenge to the validity of legislation consi