COMMENT
CHRONIQUE DE JURISPRUDENCE
Reference re Ownership of the Bed of the Strait of Georgia
and Related Areas and Reference re Newfoundland
Continental Shelf
A.L.C. de Mestral*
In 1984 the Supreme Court rendered two
judgments concerning the ownership of parts
of the continental shelfoffthe coasts of Canada.
Both decisions contain new elements. The
Court correctly moved away from the English
precedents in the Reference re Ownership of
the Bed of the Strait of Georgia and Related
Areas by taking a broader view, more in keep-
ing with Canadian history and geography, of
what can constitute inland waters interfauces
terrae. The Reference re Newfoundland Con-
tinental Shelf contains a more extensive re-
view of principles of international law than
we are accustomed to seeing from the Su-
preme Court. While this is a welcome sign,
some of the Court’s conclusions are not im-
mune from criticism. In particular, the hold-
ing that provinces cannot hold property
extraprovincially in other than a private ca-
pacity may well have been in too broad terms.
The character of provincial representation
abroad, or agreements signed with foreign
governments, might by implication be called
into question.
La Cour supreme du Canada a rendu en 1984
deux jugements sur le droit de proprirt6 de
certaines provinces sur le plateau continental
au large de leurs c~tes. Chaque decision est
innovatrice a sa faion. Dans la premiere, le
la proprite du lit du detroit
Renvoi relatif
de G~orgie et des regions avoisinantes, la Cour
s’carte ! bon droit des prcedents britan-
niques et donne une definition plus lib6rale
des <
qui s’adapte mieux A la r~alit6 historique et
grographique du Canada. La deuxi~me d6-
cision, le Renvoi relatif au plateau continen-
tal de Terre-Neuve, prsente une 6tude des
principes de droit international la plus 6la-
borne que nous ait fournie la Cour supreme
jusqu’A maintenant. Bien qu’il s’agisse en soi
d’un d~veloppement heureux, il n’en reste pas
moins que certaines conclusions prtent flanc
A Ia critique. Plus particuli~rement, la con-
clusion que les provinces ne peuvent acqu6rir
de biens A l’ext6rieur de leurs fronti~res qu’A
titre priv6 a peut-&re 6 formule en termes
trop g~n6raux. II s’ensuit que le statut des
provinces i l’6tranger de m~me que celui des
ententes auxquelles elles sont parties sont im-
plicitement remis en question.
*Of the Faculty of Law, McGill University.
@Revue de droit de McGill
McGill Law Journal 1985
McGILL LAW JOURNAL
[Vol. 30
In 1984 the Supreme Court of Canada rendered two remarkable judg-
ments settling outstanding questions with respect to the ownership of parts
of the continental shelf off the coasts of Canada. The decision in the Ref-
erence re Ownership of the Bed of the Strait of Georgia and Related Areas,
dealt with the lands under the Strait of Juan de Fuca, the Strait of Georgia,
Johnstone Strait and Queen Charlotte Strait. The Reference re Newfoundland
Continental Shelf 2 resolved the question of ownership and jurisdiction over
the continental shelf, but not over the bed of territorial sea, off the coasts
of Newfoundland and Labrador.
Both decisions, in particular the decision concerning the Newfoundland
continental shelf, were relatively predictable. 3 However, the decisions will
have important consequences. British Columbia will now exercise jurisdic-
tion over offshore oil and gas exploitation in the undersea lands in question,
and the Province may well have a stronger hand in negotiating fisheries
questions with the Federal Government in these waters. For Newfoundland,
the loss is a major political setback. At least in law, Newfoundland now
ceases to have any basis for regulating the activities of offshore oil and gas
‘(1984), [1984] 1 S.C.R. 388, 8 D.L.R. (4th) 161 [hereinafter cited to S.C.R. as Strait of
Georgia].
2(1984), [1984] 1 S.C.R. 86, 51 N.R. 362 [hereinafter cited to S.C.R. as Newfoundland
Reference].
3See J.B. Ballem, “Oil and Gas and the Canadian Constitution on Land and Under the Sea”
[1978] L.S.U.C. Special Lectures 251; K. Beauchamp, M. Crommelin & A.R. Thompson,
“Jurisdictional Problems in Canada’s Offshore” (1973) 11 Alta L. Rev. 431; A.L.C. de Mestral,
“The Law Applicable to the Canadian East-Coast Offshore” (1983) 21 Alta L. Rev. 63; C.
Douglas, “Conflicting Claims to Oil and Natural Gas Resources off the Eastern Coast of Canada”
(1980) 18 Alta L. Rev. 54; R.J. Harrison, “Jurisdiction Over the Canadian Offshore: A Sea of
Confusion” (1979) 17 Osgoode Hall L.J. 469; R.J. Harrison, “Natural Resources and the Con-
stitution: Some Recent Developments and Their Implications for the Future Regulation of the
Resource Industries” (1980) 18 Alta L. Rev. 1; R.J. Harrison, “The Offshore Mineral Resources
Agreement in the Maritime Provinces” (1978) 4 Dalhousie L.J. 245; I.L. Head, “The Canadian
Offshore Minerals Reference” (1968) 18 U.T.L.J. 131; I.L. Head, “The Legal Clamour Over
Canadian Off-Shore Minerals” (1967) 5 Alta L. Rev. 312; L.L. Herman, “The Need for a
Canadian Submerged Lands Act: Some Further Thoughts on Canada’s Offshore Mineral Rights
Problems” (1980) 58 Can. Bar Rev. 518; J.T. Ippolito, “Newfoundland and the Continental
Shelf From Cod to Oil and Gas” (1976) 15 Colum. J. Transnat’l L. 138; NJ. Inions, “Newfoundland
Offshore Claims” (1981) 19 Alta L. Rev. 461; AJ. Kovach, “An Assessment of the Merits of
Newfoundland’s Claim to Offshore Mineral Resources” (1975) 23 Chitty’s L.J. 18; G.V. La
Forest, “Canadian Inland Waters of the Atlantic Provinces and the Bay of Fundy Incident”
(1963) 1 Can. Y.B. Int’l Law 149; C. Martin, “Newfoundland’s Case on Offshore Minerals: A
Brief Outline” (1975) 7 Ottawa L. Rev. 34; G.S. Swan, “The Newfoundland Offshore Claims:
Interface of Constitutional Federalism and International Law” (1976) 22 McGill L.J: 541.
See also J. Brossard et al., Le territoire qu~b~cois (1970); G.V. La Forest, Natural Resources
and Public Property under the Canadian Constitution (1969); E Loriot, La thorie des eaux
historiques et le regime juridique du Golfe Saint-Laurent en droit interne et international (doc-
toral thesis, Universit6 Laval, 1972) [unpublished].
1985]
COMMENT
drilling or taxing revenues directly from this potentially highly lucrative
source. Newfoundland must now turn to the political process to obtain
satisfaction if it is to have any at all.
From a strictly legal standpoint, both decisions contain points of con-
siderable interest: in particular, the increasing sophistication of the Supreme
Court of Canada in its dealing with questions of international law relating
to the continental shelf, the territorial sea and inland waters. These matters
will be the subject of this comment.
The dispute in the case of the Reference re Ownership of the Bed of the
Strait of Georgia and Related Areas involved ownership of the lands, in-
cluding the mineral and other natural resources of the seabed not determined
by the Supreme Court of Canada in the reference Re Offshore MineralRights
of British Columbia,4 since they had been excluded by the terms of refer-
ence. 5 After sporadic negotiations lasting almost a decade, this matter was
brought to the Court of Appeal of British Columbia on reference by the
Lieutenant-Governor in Council of British Columbia. The British Columbia
Court of Appeal ruled three votes to two in favour of the Province. 6 Further
negotiations ensued over a period of years, but proved unsuccessful. The
matter was brought before the Supreme Court of Canada in October 1982.
The fundamental test applied by the Supreme Court of Canada as to
jurisdiction over offshore lands was the same as that propounded in 1967:
namely, whether those lands below the low water mark were part of the
Province upon its entry into Confederation. The historical record was clearly
fraught with considerable ambiguity, and this is reflected in the sharp di-
vision of opinion between majority and dissenting opinions in both the
British Columbia Court of Appeal and the Supreme Court of Canada. British
Columbia argued successfully that the definition of the Province in the
Imperial Statute of 1866,7 setting out the seaward boundary of British Columbia
as “the Pacific Ocean”, 8 indicated a clear policy to include all these waters
within the colony of British Columbia. This definition had its origin in the
Oregon Treaty of 1846, 9 the Letters Patent establishing the colony of Van-
couver Island, and the Imperial Acts of 1858 and 1863 which first established
the colony of British Columbia.10 In essence, the lawyers for the Federal
4(1967), [1967] S.C.R. 792, 65 D.L.R. (2d) 353.
51bid. at 796: “Outside the harbours, bays, estuaries and other similar inland waters, to the
outer limit of the territorial sea of Canada …
6(1976), [1977] 1 B.C.L.R. 97.
7An Act for the Union of the Colony of Vancouver Island with the Colony of British Columbia
(U.K.), 29 & 30 Vict., c. 67.
8lbid., article 7.
9Oregon Treaty, June 15, 1846, United States-Canada, T.S. 120.
10Supra, note 1 at 402-21.
REVUE DE DROIT DE McGILL
[Vol. 30
Attorney-General were unable to overcome this claim despite the fact that
it is not clear in law when the waters of the two colonies attained the status
of inland waters inter fauces terrae, and despite the fact that it was not
British practice at that period in the nineteenth century to lay absolute claim
to such extensive bodies of water as those involved here. Indeed, the dis-
sentingjudgment of Madam Justice Wilson is very hard to refute. She argued
with great learning and skill that the Province had not successfully sub-
stantiated either its claim that one colony or both colonies had been granted
or laid claim to these waters as inland waters, or its claim that the common
law, as it existed in 1871, would have granted these waters that status.”
The majority of the Court shied away from a highly technical discussion
of the case law regarding the definition of inland waters inter fauces terrae,
and instead adopted an approach better suited to Canadian geography. In
holding that the definition of the boundary of British Columbia was the
Pacific Ocean, the majority of the Supreme Court of Canada did little more
than indicate to the Federal Attorney-General that insufficient evidence had
been adduced to rebut the argument of British Columbia. The majority did
not really answer Madam Justice Wilson’s learned arguments that the com-
mon law existing in 1871 and applicable in England today would not admit
such extensive bodies of water as the Strait of Juan de Fuca and Georgia
Strait to the definition of inland waters inter fauces terrae. The cases relied
upon by Madam Justice Wilson, apart from a few rare Canadian decisions
such as the Conception Bay case, 12 are English precedents developed over
centuries by the courts of Great Britain to deal with the particularities of
the geography of the British Isles. Such decisions 13 relate to a very different
geography than that of Canada, and have always presented Canadian lawyers
and Canadian courts with very great difficulty in determining whether at
common law certain bodies of water should enjoy the status of inland waters
inter fauces terrae. These bodies of water are generally much more vast than
comparable British waters and frequently form part of a much more acci-
dented and enclosed coastline than the one around the British Isles.
A further problem arising out of the tests in the British Isles is that the
historical and customary tests which form part of the common law, as well
as the tests based on pure geography and physical conformation, could
seldom be applied in Canada, given the very short time within which Canadian
Ibid. at 427-71.
2Direct United States Cable Co. Ltd v. Anglo-American Telegraph Co. Ltd (1877), 2 A.C.
394, 36 L.R. 265 (P.C.).
“3 See, inter alia, Harris v. Owners of the “Franconia” (1877), 2 C.RD. 173; Mortenson v.
Peters (1906), 14 S.L.T. 227 (H.C. of Justiciary); The “Fagernes” (1927), [1927] P. 311 (C.A.);
Post Office v. Estuary Radio Ltd (1967), [1968] 2 Q.B. 740 (C.A).
1985]
CHRONIQUE DE JURISPRUDENCE
history has unfolded and the infrequency of human activity in many out-
lying coastal areas. The Supreme Court therefore was entirely correct in
taking a broader view of what might constitute inland waters inter fauces
terrae. Surely if any waters are inter fauces terrae they are the waters between
the mainland of British Columbia and Vancouver Island.
This decision may well do much to assist Canadian lawyers and courts
in the future in determining that other significant special bodies of water
lying off the coasts of Canada, such as the Bay of Fundy, the Gulf of St.
Lawrence, Hudson Bay, Hudson Strait, and indeed the full expanse of waters
lying between the various Islands of the Canadian Arctic Archipelago, merit
the designation of inland waters inter fauces terrae at international law and
at common law. Should this be the case, the Supreme Court of Canada will
not only have assisted in reducing a major uncertainty as to the legal status
of many important bodies of water off Canada’s coasts at common law, but
equally may assist the Government of Canada in reaching a definitive legal
and policy decision as to the status of these waters as internal waters at
international law, thus removing any ambiguity as to whether they might
also be considered territorial seas, economic zones, or possibly even high
seas.
On a number of issues, the Newfoundland Reference is even more in-
teresting in its implications for the future. Again the Supreme Court of
Canada broke little new ground in the basic test which is applied to deter-
mine whether the continental shelf belonged to the Province of Newfoundland
and Labrador. The question turned on whether the continental shelf formed
part of the Province upon its entry into Confederation in 1949. In seeking
to determine whether Newfoundland in 1949, unlike British Columbia in
1871, could succeed in showing that the continental shelf formed part of
the Province on its entry into Confederation, the Court applied three further
tests:
(1) international law must have recognized the right to explore and exploit
in the continental shelf prior. to Newfoundland’s entry into Confedera-
tion on March 31, 1949;
(2) the Crown in right of Newfoundland must have been in a position to
acquire these rights;
(3) the Crown in right of Newfoundland must not have lost those rights
under the Terms of Union with Canada.’ 4
Chief Justice Dickson, speaking for the majority of the Court, dealt first
with questions 2 and 3 respecting Canadian domestic law. Starting from the
14Newfoundland Reference, supra, note 2 at 98.
McGILL LAW JOURNAL
[Vol. 30
premise that, by definition, a colony, and subsequently a province, did not
enjoy, as a matter of law, extraterritorial legislative competence,’ 5 he stated:
A particular example of the extraterritorial incompetence of colonies is
that they were incapable of acquiring new territory. Boundaries could only be
altered by the British authorities in the form of an order in council under the
Colonial Boundaries Act.’ 6
The Chief Justice reasoned further that
[i]t is only when a former colony, as a matter of constitutional law, acquires
external sovereignty that it can also acquire continental shelf rights. Until such
time it is the British Crown that is the beneficiary of the extraterritorial rights
over the continental shelf accorded by international law.’ 7
By parity of reasoning, Chief Justice Dickson concluded that the first
nine Canadian provinces never gained extraterritorial legislative compe-
tence: “They have never acquired external sovereignty. They are thus in-
capable of acquiring continental shelf rights.”‘ 8 It was therefore necessary
for Newfoundland to overcome the burden of proving that it possessed
extraterritorial legislative competence and that it possessed external sov-
ereignty in order to make its case before the Court.
Chief Justice Dickson was prepared to accept that Newfoundland, dur-
ing the period from 1926 to 1934 (as witnessed by the Balfour Declaration
and the designation of Newfoundland as a Dominion in the Statute of West-
minster), had possessed the capacity to legislate extraterritorially and indeed
had possessed external sovereignty. 19 However, in the opinion of the Court,
the effect of the Newfoundland Act,20 and the subsequent imposition of
Commission Government from the period of 1934 to 1949, had the effect
of depriving Newfoundland not only of its external sovereignty but even of
its internal sovereignty.21 To reach this conclusion, the Court considered
the historical record of international contacts alleged by the Attorney-Gen-
eral of Newfoundland. The Court was not convinced that the Common-
wealth Relations Office treated Newfoundland as having the capacity to act
as an independent state during the period from 1934 to 1949. Nor was the
Court prepared to accept arguments based on the Terms of Union, specif-
ically terms 7 and 39 referring to provincial natural resources. The Court
held that these natural resources could only be those situated within the
territory of Newfoundland and that the Terms held no reference to the
151bid. at 100.
‘6lbid. at 100-1.
171bid. at 102-3.
18lbid. at 103.
19Ibid. at 105.
20NefoundlandAct, 1933 (U.K.), 24 & 25 Geo. V., c. 2.
2’Newfoundland Reference, supra, note 2 at 110.
1985]
COMMENT
offshore. Thus, in the view of the Court, the British Crown had made no
effort to transfer jurisdiction and ownership over the offshore to Newfoundland
at the moment of union. The Court reached this conclusion on the basis of
the somewhat tenuous argument that, since the rights referred to in term
37 and section 109 of the Constitution Act, 1867 are public property rights
and since a province was incapable of holding property outside the province,
term 37 could not have applied to the continental shelf outside the province.
Taking the argument one step further, this time on the basis of inter-
national law, Chief Justice Dickson rejected the argument of the Attorney-
General of Newfoundland by holding that, since the rights enjoyed by a
state in the continental shelf are “sovereign rights” 22 and not property rights,
any claim based upon term 37 of the Terms of Union must fail. Furthermore,
since jurisdiction over the continental shelf was an incident of external
sovereignty, the effect of the Terms of Union upon Newfoundland attaining
the status of a province of Canada would be to transfer jurisdiction over
the continental shelf to Canada, which alone possessed the external sov-
ereignty necessary to acquire continental shelf rights.
The Court’s review of international law as it existed in and prior to
March 1949 was equally incisive. In the first place, the Court suggested that
Newfoundland had not shown that any claim had been made by the ap-
propriate Newfoundland or United Kingdom authority in order to bring
the continental shelf under its jurisdiction. 23 Secondly, Chief Justice Dick-
son rejected any suggestion that the continental shelf doctrine had so crys-
tallized by March 1949 that Newfoundland had acquired ipso jure jurisdiction
over the continental shelf. In what must be one of the most interesting and
extensive reviews of international law sources in recent Canadian Supreme
Court decisions, Chief Justice Dickson concluded that the continental shelf
doctrine, although in existence by 1949, did not reveal state practice suffi-
cient to constitute a binding rule of customary international law.24 It is
interesting to note that the Court stated that “in order to constitute a custom
there must be substantial uniformity or consistency, and general accept-
ance”.25 Newfoundland sought to argue on the basis of the language of the
North Sea Continental Shelf case,26 where it was stated that the continental
shelf constituted “a natural prolongation of [the] land territory [of a state]
into and under the sea [and that these rights] exist ipso facto and ab initio
22Geneva Convention on the Continental Shelf, 499 U.N.T.S. 311, art. 2 (opened for signature
29 April 1958; entered into force 10 June 1964).
23Newfoundland Reference, supra, note 2 at 116.
24Ibid. at 124.
25Ibid. at 118.
26North Sea Continental Shelf (Ger. v. Den. & Neth.), [1969] I.C.J. 3.
REVUE DE DROIT DE McGILL
[Vol. 30
by virtue of its sovereignty over the land”.27 In rejecting this contention,
Chief Justice Dickson suggested that the International Court of Justice could
not have intended to suggest retroactivity.28 He continued with the following
interesting and perhaps controversial passage:
The development of customary or conventional international law is, by defi-
nition, the development of new law. There is no concept in international law
of discovering law that always was. In our view, continental shelf rights have
no retroactive application to a time before they were recognized by interna-
tional law. 29
In any event, as Chief Justice Dickson concludes, if the retroactivity
argument were to succeed on the basis of rights given to Canada in later
years by virtue of international law, these rights would not inhere to
Newfoundland but rather to Canada, given that Canada alone was com-
petent to acquire sovereign rights.30
Finally, the Court noted that nothing in the Constitution Act, 1867,
section 92(13) or section 92A(l), would indicate that a province possessed
extraterritorial legislative jurisdiction. On the contrary, according to the
Court, the conclusion that Canada has the right to exploit the continental
shelf leads easily to the conclusion that Canada has legislative jurisdiction
by virtue of the powers vested in Parliament over the peace, order and good
government of Canada.
This judgment is remarkable in a number of ways. First, the Supreme
Court would appear to be prepared to analyse and deal with the concepts
of public international law with much greater freedom than it has in previous
decisions of this nature. This is a welcome development, even if there is
some room left for argument on particular points, such as the standard of
proof of a customary rule or the invocation of certain international law
authorities (including Professor Frangois, special rapporteur of the Inter-
national Law Commission in 1950, whose views on the continental shelf
were recognized even at that early date to be highly conservative). What is
more controversial is the suggestion that since rights over the continental
shelf are sovereign rights and not property rights, a province is inherently
incapable of acquiring them. This conclusion may well be correct, but it is
difficult to follow Chief Justice Dickson fully when he suggests that
[o]utside their boundaries the provinces can hold no such public property;
whatever extraprovincial property they do hold –
such as provincial offices
27Nevfoundland Reference, supra, note 2 at 125.
28Ibid. at 126.
29Ibid.
30Ibid.
1985]
CHRONIQUE DE JURISPRUDENCE
is held by them as private property in their capacity as
in foreign countries –
legal persons.3′
If this is also correct, it is a view which will go far to limit further
attempts by provincial authorities to establish a capacity to deal with foreign
governments on anything but a private basis, and calls into question the
character of their representation abroad and indeed any agreement which
might be signed on behalf of a province with a foreign government. This
view surely runs into conflict with the decision of the English Court of
Appeal in the case of Mellenger v. New Brunswick Development Corp.,32
where the Court treated the acts and property of New Brunswick in Great
Britain as enjoying the benefits of sovereign immunity. In this respect, the
Supreme Court of Canada may well have gone too far, but clearly the de-
cision as a whole reinforces a long-held federal view that only the Crown
in right of Canada can represent Canada vis-i-vis other nation states.
What will be the impact of these opinions upon the final resolution of
questions still pending as to the status of the continental shelf and the seabed
of other areas off the Canadian coast? While Re Offshore Mineral Rights of
British Columbia may have brought some comfort to those who argue that
the subsoil of the Bay of Fundy and the Gulf of St. Lawrence are part of
the respective provinces, it is unlikely that this decision brings any comfort
to Nova Scotia, which has long but less vociferously argued that it too has
continental shelf rights. 33 The only point clearly left open by the Court is
that raised by the Newfoundland Court of Appeal in the Reference Re Min-
eral and Other Natural Resources of the Continental ShelJ’ 4 on the issue of
provincial ownership and jurisdiction over a three-mile territorial sea. This
question was not before the Court and is not to be prejudged by the Court’s
decision in respect of the continental shelf. Newfoundland may well yet
succeed in maintaining its argument that it possessed a three-mile territorial
sea on the day of its entry into Confederation and thereby enjoys legislative
jurisdiction and ownership over the seabed and subsoil out to three miles. 35
3 Ibid. at 115.
32 (1971), [1971] 2 All E.R. 593, [1971] 1 W.L.R. 604 (C.A.).
33From a political standpoint this dispute has been set to rest by the Canada-Nova Scotia
Oil and Gas Agreement, S.C. 1983-84, c. 29.
34(1983), 145 D.L.R. (3d) 9, 41 Nfld & P.E.I.R. 271.
35The author wishes to commend to the attention of readers the extraordinary volume and
quality of the research done by the Federal and Provincial advocates in preparing this and
related cases. This research, the results of which were put before the courts in evidence, will
be the bench-mark for any further scholarly work in this field.
