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U.

VALIDITY OF THE MANITOBA ACT, IN RE.

Constitutional Law-Statute-Validity-Grain Futures Taxation
Act, 13 Geo. V., ch. 17 (Man.).

VERSAILLES SWEETS, LIMITED V. ATTORNEY-GENERAL OF CANADA.
Assessment and Taxes-Excise Tax-Dominion Sales Act, 5 Geo.
V., ch. 8, sec. 19, amended by 11-12 Geo. V., ch. 5, sec. 19 BBB.
and 12-13 Geo. V., ch. 47, sec. 13-Tax on Manufacturers-
Sale Direct to Consumers.

419

532

72

BAR

ADFORBRARY

REVIEW

TORONTO, JANUARY, 1924.

No. 1

VOL. II.

JUDICIAL COMMITTEE DIFFERENCES.

Professor Kennedy, in his analysis of the Canadian Constitution, draws attention to the views of Lord Haldane in reference to the character of the Canadian Constitution as expressed in Re The Initiative and Referendum Act, and contrasts them with Lord. Watson's conception of the same subject in Liquidators of the Maritime Bank of Canada v. The Receiver-General of New Brunswick.2 The two are, therefore, set out in parallel columns as follows:Lord Haldane:

Lord Watson:

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"The Act of 1867 where professes to curtail in any respect the rights and privileges of the Crown or to disturb the relations then subsisting between the sovereign and the provinces. The object of the Act was neither to weld the provinces into one, nor to subordinate provincial governments to a central authority, but to create a federal government in which they should all be represented, entrusted with the exclusive administration of affairs in which they had a common interest, each province retaining its independence and autonomy . . . As regards those matters which by sect. 92 are specially reserved for provincial legislation, the legislation of each

C.B.R.-VOL. II.-1

"The Executive Government of Canada was declared by the Act of 1867 to remain vested in the Queen, and, by s. 12, all powers, authorities and functions vested in or exercisable by the Governors or Lieutenant-Governors of the provinces brought into Confederation were, so far as the same continued in existence and were capable of being exercised after the Union in relation to the Government of Canada, to be vested in and exercisable by the Governor-General . . The scheme of the Act passed in 1867 was thus, not. to weld the provinces into one, nor to subordinate Provincial Governments to a central! authority, but to establish

1 (1919), A. C. 935.
(1892), A. C. 437, at p. 441.

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supreme as it was before the passing of the Act. Le Hodge v. The Queen (1), Lord Fitzgerald, delivering the opinion of this Board, said: When the British North America Act enacted that there should be a Legislature for Ontario, and that its legislative assembly should have exclusive authority to make laws for the province and for provincial purposes in relation to the matters enumerated in sect. 92, it conferred powers not in any sense to be exercised by delegation from or as agents of the Imperial Parliament, but authority as plenary and as ample within the limits prescribed by sect. 92 as the Imperial Parliament in the plenitude of its power possessed and could bestow. Within these limits of subject and area, the local legislature is supreme, and has the same authority as the Imperial Parliament or the Parliament of the Dominion."

Lord Haldane:

central government in which these provinces should be represented, entrusted with exclusive authority only in affairs in which they had a common interest. Subject to this each province was to retain its independence and autonomy and to be directly under the Crown as its head. Within these limits of area and subjects, its local legislature, so long as the Imperial Parliament did not repeal its own Act conferring this status, was to be supreme, and had such powers as the Imperial Parliament possessed in the plenitude of its own freedom before it handed them over to the Dominion and the provinces, in accordance with the scheme of distribution which it enacted in 1867.”

It will be observed that Lord Watson speaks of the creation of a "federal government" in which the Provinces were to retain their independence, autonomy and legislative powers in the sphere reserved for them. Lord Haldane substitutes "central government" and then adopts very much the language of Lord Fitzgerald, who speaks of the legislative authority as "conferred" by the British North America Act which Lord Haldane paraphrases as "handed over."

The root contrast must rest in these words used by Lord Watson: "As regards those matters which by sec. 92 are specially reserved for Provincial Legislation, the legislation of each Province continues as supreme as it was before the passing of the Act," and in those of Lord Haldane:

"The Provinces were to have fresh and much restricted constitu

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tions, their Governments being entirely remodelled defined powers and duties both derived from the Act of the Imperial Parliament which was their legal source.”

These statements do not differ except as to the retention of Provincial powers, which appears to have been Lord Watson's view, whereas Lords Fitzgerald and Haldane treat them as conferred by the Act or as handed over thereby from the Imperial Parliament.

Mr. Kennedy's real complaint relates to Lord Haldane's more ample explanation of why he does not use the word "federal" in describing the Dominion Government set up by the British North America Act, which is to be found in Attorney-General for the Commonwealth of Australia v. Colonial Sugar Co., Ltd., and he might have added, in the Bonanza Co. v. Rex. In the first of these cases Lord Haldane said:

"In a loose sense the word 'federal' may be used, as it is there used, to describe any arrangement under which self-contained States agree to delegate their powers to a common Government with a view to entirely new Constitutions even of the States themselves. But the natural and literal interpretation of the word confines its application to places in which these States, while agreeing on a measure of delegation, yet in the main continue to preserve their original Constitutions. Now, as regards Canada, the second of the resolutions, passed at Quebec in October, 1864, on which the British North. America Act was founded, shows that what was in the minds of those who agreed on the resolutions was a general Government charged with matters of common interest, and new and merely local Governments for the Provinces. The Provinces were to have fresh and much restricted Constitutions, their Governments being entirely remodelled. This plan was carried out by the Imperial Statute of 1867. By the 91st section a general power was given to the new Parliament of Canada to make laws for the peace, order, and good government of Canada, without restriction to specific subjects, and excepting only the subjects specifically and exclusively assigned to the provincial legislatures by sec. 92. There followed an enumeration of subjects which were to be dealt with by the Dominion Parliament, but this enumeration was not to restrict the generality of the power conferred on it. The Act, therefore, departs widely from the truè federal model adopted in the Constitution of the United States, the tenth amendment to which declares that the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively or to their people. Of

3 (1914), A. C. 237, at p. 253.

4 [1916] 1 A. C. 556.

the Canadian Constitution the true view appears, therefore, to be that, although it was founded on the Quebec Resolution and so must be accepted as a treaty of union among the then Provinces, yet when once enacted by the Imperial Parliament it constituted a fresh departure, and established new Dominion and Provincial Governments with defined powers and duties both derived from the Act of the Imperial Parliament, which was their legal source."

In the Bonanza Creek Gold Mining Co. v. The King, Lord Haldane quotes the Colonial Sugar case, and proceeds:—

"The principle actually adopted (in the British North America Act), was not a federation in the strict sense, but one under which the constitutions of the provinces had been surrendered to the Imperial Parliament for the purpose of being refashioned. The result has been to establish wholly new Dominion and Provincial Governments, which defined powers and duties, both derived from the statute which was their legal source, the residual powers and duties being taken away from the old provinces and given to the Dominion."

After referring to secs. 12, 64 and 65 of the British North America Act, he says:

"The effect of these sections of the British North America Act is that, subject to certain express provisions in that Act, and to the supreme authority of the Sovereign, who delegates to the GovernorGeneral and through his instrumentality to the Lieutenant-Governors the exercise of the prerogative on terms defined in their commissions, the distribution under the new grant of executive authority in substance follows the distribution under the new grant of legislative powers. In relation, for example, to the incorporation of companies in Ontario with provincial objects the powers of incorporation which the Governor-General or Lieutenant-Governor possessed before the Union must be taken to have passed to the Lieutenant-Governor of Ontario so far as concerns companies with this class of objects. Under both sec. 12 and sec. 65 the continuance of the powers thus delegated is made by implication to depend on the appropriate Legislature not interfering."

The way apparently in which, in the Bonanza case, the Law Lords. reconciled the idea of surrender and re-grant with the ability of the "Legislature of the Province to keep the power alive if there existed in the Executive at the time of Confederation a power to incorporate companies with provincial powers," was to lay it down that "the words of sec. 92 are wide enough to enable the Legislature" to do this. It is also stated that by virtue of secs. 12 and 65 "the powers

[1916] A. C. 566.

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