Some Comments on Subsection 92(10) of the
Constitution Act, 1867
I.H. Fraser*
Beneath a deceptively simple appearance,
subsection 92(10) of the Constitution Act, 1867
conceals a scheme for the distribution of leg-
islative power which is subtle, sophisticated,
and powerful. The author examines some of
the leading decisions from the large body of
case law and finds that confusion and con-
ceptual uncertainty have long been obstacles
to a clear understanding of the provision. A
fundamental distinction, for example, must
be made between “works” and “undertak-
ings”. Jurisdiction over the one does not nec-
essarily give jurisdiction over the other. The
author argues that distinctions between intra-
and inter-provincial undertakings should be
drawn by examining the nature of the un-
dertaking’s function. On the other hand, a
functional analysis is not an appropriate method
for dividing intra-provincial works from in-
ter-provincial ones. While the conceptual dis-
tinctions enunciated are at times subtle, the
author concludes that they are fundamental
to a clear analysis of subsection 92(10), and
unless they are carefully understood and ap-
plied, confusion and inconsistency will con-
tinue to plague discussion of this basic
constitutional provision.
Derriere une apparente simplicit6, l’article
92(10) de la Loi constitutionnelle de 1867
cache un m~canisme de distribution du pou-
voir l6gislatif subtil, complexe et puissant.
L’auteur examine la jurisprudence et y d6-
couvre une certaine confusion et un manque
de clart6 conceptuelle qui emp~chent une
comprehension juste de cette disposition. Une
distinction fondamentale, par exemple, doit
8tre faite entre les <( travaux > et les <( entre-
prises > La juridiction sur les uns ne comprend
pas n&cessairement la juridiction sur les autres.
L’auteur pretend que la distinction entre les
entreprises intra- et inter-provinciales doit se
faire selon ]a fonction d’une activit6 donnre.
Par contre, cette analyse fonctionnelle ne
constitue pas une mrthode adequate pour dif-
ferencier les travaux intra- et inter-provin-
ciaux. Bien que rauteur reconnaisse le caract~re
parfois subtil de ces distinctions, il conclut
qu’elles forment la base d’une analyse claire
de l’article 92(10). A moins que ces distinc-
tions ne soient comprises et appliqu~es de
fagon rigoureuse, la confusion et l’illogisme
seront la r~gle plutft que ‘exception sous cet
article.
*LL.B. (McGill). The author is indebted to Professor Stephen A. Scott of McGill for his
instruction and assistance throughout the author’s studies at McGill. In particular, this essay
could not have been written without Professor Scott’s patient criticism and encouragement.
Any errors, of course, are those of the author alone.
@McGill Law Journal 1984
Revue de droit de McGill
558
McGILL LAW JOURNAL
[Vol. 29
Synopsis
I. General Introduction
A. Constitution Act, 1867
B. Quebec Resolutions
C. Ejusdem Generis
D. Effect
II. Works and Undertakings
A. Works as “Parts of” Undertakings
B. Undertakings as “Parts of” Works
1. Paragraph (c)
2. Paragraph (a)
a. Radio Reference
b. Labour Conventions
c. Winner
MI. Legislative Jurisdiction
A.
Introduction
1. GO Train
B. Character of the Jurisdiction over Undertakings
C. Character of the Jurisdiction over Works
1. Montcalm Construction
2. Notre Dame de Bonsecours
D. Exclusive and Concurrent
1. General Approach
2. Some Examples
3. Confficts
E. Paragraph (c)
1. Kettle River
2.
.Bourgoin
1984]
SUBSECTION 92(10)
IV. Intra-Provincial and Inter-Provincial
A. Works
1. Montreal Street Railway
2. B.C. Electric Railway
3. Luscar Collieries
4. A Synthesis
B. Undertakings
Conclusion
I. General Introduction
Subsection 10 of.section 92 of the Constitution Act, 18671 is a decep-
tively simple provision. Beneath the surface of its apparently straightforward
language lies a scheme for the distribution of legislative jurisdiction that is
both subtle and powerful. This essay attempts to lay bare some of the es-
sential structure of that scheme and, where necessary, restore an appreciation
for its sophistication.
A. Constitution Act, 1867
For the reader’s convenience, the relevant provisions of the Constitution
Act, 1867 are set out below.
91. It shall be lawful for the Queen, by and with the Advice and Consent
of the Senate and House of Commons, to make Laws for the Peace, Order,
and good Government of Canada, in relation to all Matters not coming within
the Classes of Subjects by this Act assigned exclusively to the Legislatures of
the Provinces; and for greater Certainty, but not so as to restrict the Generality
of the foregoing Terms of this Section, it is hereby declared that (notwithstand-
ing anything in this Act) the exclusive Legislative Authority of the Parliament
of Canada extends to all Matters coming within the Classes of Subjects next
herein-after enumerated; that is to say, …
29. Such Classes of Subjects as are expressly excepted in the Enumeration
of the Classes of Subjects by this Act assigned exclusively to the Legislatures
of the Provinces.
And any Matter coming within any of the Classes of Subjects enumerated
in this Section shall not be deemed to come within the Class of Matters of a
’30 & 31 Vict., c. 3 (U.K.). For the reader’s convenience, no further citations for this Act
will be given. Any reference to a statutory provision not supported by a citation may be assumed
to be to the Constitution Act, 1867.
REVUE DE DROIT DE McGILL
[Vol. 29
local or private Nature comprised in the Enumeration of the Classes of Subjects
by this Act assigned exclusively to the Legislatures of the Provinces.
92. In each Province the Legislature may exclusively make Laws in relation
to Matters coming within the Classes of Subject next herein-after enumerated;
that is to say, …
10. Local Works and Undertakings other than such as are of the following
Classes: –
(a) Lines of Steam or other Ships, Railways, Canals, Telegraphs, and other
Works and Undertakings connecting the Province with any other or others
of the Provinces, or extending beyond the Limits of the Province;
(b) Lines of Steam Ships between the Province and any British or Foreign
Country;
(c) Such Works as, although wholly situate within the Province, are before
or after their Execution declared by the Parliament of Canada to be for the
general Advantage of Canada or for the Advantage of Two or more of the
Provinces. …
13. Property and Civil Rights in the Province …
16. Generally all Matters of a merely local or private Nature in the Province.
In gross terms, the structure of subsection 92(10) is simple enough.
Legislative jurisdiction over all local works and undertakings is assigned to
the various Provincial legislatures, and then certain of these works and
undertakings are excepted from this general grant of jurisdiction. These
excepted works and undertakings are assigned to the exclusive legislative
jurisdiction of the Parliament of Canada both by implication and by the
express terms of subsection 91(29) and the “deeming clause” at the end of
section 91.2
Many years ago, Vincent C. MacDonald suggested that:
[N]o problem presented by the B.N.A. Act will be more barren of satisfactory
result than the attempt to construe s. 92(10)(c)… by the traditional legalistic
formula of discovering the intention only from the words as written. 3
Mr MacDonald’s suggestion might as easily be applied to the subsection as
a whole. It seems beyond argument, for example, that paragraphs (a) and
(b) do not sit comfortably in subsection 92(10):
It will be observed that paragraph 10 is not well expressed. The sub-paragraphs
a, b and c are stated as exceptions from “local works and undertakings,” but
the works and undertakings mentioned in sub-paragraphs a and b are not local,
and it is only in sub-paragraph c that any local works are described. The drafting
20n the “deeming clause” and its relationship to the rest of ss 91 and 92, see G. Browne,
The Judicial Committee and the British North America Act (1967). Professor Browne’s untimely
death was a great loss to Canadian constitutional scholarship.
3MacDonald, Parliamentary Jurisdiction by Declaration [ 1934] 1 D.L.R. 1, 2.
1984]
SUBSECTION 92(10)
561
would have been improved by transferring sub-paragraphs a and b directly to
the enumerations of s. 91.4
A. Quebec Resolutions
In point of fact, this was more or less the original arrangement of the
provisions. The relevant sections of the Quebec Resolutions are:
29. The general Parliament shall have power to make laws for the peace,
welfare, and good government of the federated provinces (saving the sover-
eignty of England), and especially laws respecting the following subjects: …
(8) Lines of steam or other ships, railways, canals and other works, con-
necting any two or more of the Provinces together or extending beyond the
limits of any Province.
(9) Lines of steamships between the federated provinces and other countries.
(10) Telegraphic communication and the incorporation of telegraphic
companies.
(11) All such works as shall, although lying wholly within any Province,
be specially declared by the Acts authorizing them to be for the general
advantage. ….
(18) Ferries between any province and a foreign country, or between any
two provinces …
(37) And generally respecting all matters of a general character, not spe-
cially and exclusively reserved for the local Governments and Legislatures. ….
43. The local Legislatures shall have power to make laws respecting the
following subjects: …
(13) Local works …
(18) And generally all matters of a private or local nature, not assigned to
the general Parliament.5
Why items 29(8) and 29(9) of the Quebec Resolutions should have been
transferred to section 92 of the Constitution Act, 1867 while item 29(18)
should have been left in the enumerated heads of federal jurisdiction as
subsection 91(13) is entirely mysterious. Indeed, the logical conundrum
posed by the actual arrangement of the provisions put the Judicial Com-
mittee through some polite analytic contortions in Winner.6 With great
respect, their Lordships’ “explanation ‘ 7 is less than satisfactory, and they
might have done better by bluntly conceding that the subsection was so
ineptly drafted that a literal reading would lead to an absurdity.
4E. Newcombe, The British North America Acts (1908) 103.
5W. Clement, The Law of the Canadian Constitution, 3r
6A.G. Ontario v. Winner [1954] A.C. 541, [1954] 3 All E.R. 177, [1954] 4 D.L.R. 657 (P.C.).
The Board comprised Lord Porter, Lord Oaksey, Lord Tucker, Lord Asquith of Bishopstone
and Lord Cohen.
d ed. (1916) 968-72.
7Ibid., 574.
McGILL LAW JOURNAL
[Vol. 29
C. Ejusdem Generis
Less obvious (but rather more difficult) problems arose as the courts
attempted to sort out the extent to which the terms “works” and “under-
takings” should be read ejusdem generis. After some early uncertainty, it
now seems well settled that when used in the introductory words of the
subsection, the phrase “works and undertakings” refers to all types of works
and undertakings, and not merely to those in the fields of transportation
and communication.
This is borne out by the fact that sub-paragraph (c), apparently referring back
to the principal clause, speaks of “such works” and in reliance on the sub-
paragraph Parliament has, with judicial approval, made declarations in respect
of works which are quite unrelated to transport and communication.8
On the other hand, when used in paragraph (a), the phrase is properly
interpreted ejusdem generis and confined to works and undertakings in these
fields. In practical terms, the effect of this limitation is a good deal less
important than might at first appear to be the case. By its express terms,
paragraph (a) applies only to works and undertakings that “connect” or
“extend”. Very few works will extend beyond the limits of a province with-
out connecting it to another, and it is hard to see how a work may connect
one province with another unless it serves as a transportation or commu-
nication link. This, at any rate, appears to be the approach generally taken
by the courts. If a work “connects”, then the courts seem to treat that fact
as conclusive evidence that the work is within the described genus.9 Much
the same might be said concerning connecting undertakings.
In effect, the real significance of the ejusdem generis construction is to
prevent the subsection from operating with respect to undertakings that
extend beyond the limits of a province without actually connecting it to
any other. While a transportation or communication work might extend into
another province (physically) without actually connecting it to any other
(functionally),’ 0 it seems fairly clear that a transportation or communication
undertaking cannot “extend” without “connecting”.
The practical importance of this limitation will, of course, vary in-
versely with the scope of federal jurisdiction under the trade and commerce
power described in subsection 91(2); although it might be that any federal
risdiction (1969) 47 Can. Bar Rev. 355, 356.
8McNaim, Transportation, Communication and the Constitution: The Scope of Federal Ju-
9See ibid., 359-60, where the major cases are collected.
10See the discussion following note 142, infra.
1984]
SUBSECTION 92(10)
jurisdiction over “extending” undertakings pursuant to subsection 92(10)
would have been curtailed by judicial interpretation much as the jurisdiction
conferred in subsection 91(1) has been.”
D. Effect
The classic description of the effect of subsection 92(10), (when read
in conjunction with subsection 91(29)), was given by Lord Atkinson on
behalf of the Judicial Committee in the Montreal Street Railway case.’ 2
It is admitted that by this declaration the railway to which it refers was with-
drawn from the jurisdiction of the provincial Legislature, that it passed under
the exclusive jurisdiction and control of the Parliament of Canada, and, small
and provincial though it was, stood to the latter in precisely the same relation,
as far as the enactments upon the true construction of which this case turns,
as do those great trunk lines, also federal railways, which traverse the Dominion
from sea to sea. …. 13
Now the effect of sub-s. 10 of s. 92 of the British North American Act is, their
Lordships think, to transfer the excepted works mentioned in sub-heads (a),
(b), and (c) of it into s. 91, and thus place them under the exclusive jurisdiction
and control of the Dominion Parliament.
These two sections must then be read and construed as if these transferred
subjects were specially enumerated in s. 91, and local railway as distinct from
federal railway were specifically enumerated in s. 92. 4
The important proposition that the “transferred subjects” should be
treated as if they had been specifically enumerated in section 91 is made
explicitly in the third of the passages quoted above. Implicit in the first of
these passages is the equally important proposition that there is no dis-
tinction in this respect between the jurisdiction conferred on the Parliament
of Canada under paragraphs (a) or (b) and the jurisdiction conferred under
paragraph (c). Taken together, these two propositions lead to the conclusion
that the application of provincial laws to “transferred” works or undertak-
ings is governed by the ordinary rules of constitutional interpretation, ir-
respective of whether federal jurisdiction stems from paragraph (a), paragraph
(b) or paragraph (c).
Although this analysis seems now to be accepted without argument,
some earlier commentators suggested that different considerations should
“ISee the passages from the judgment of Rinfret J., cited in the text at note 49, infra.
‘2CityofMontrealv. Montreal Street Railvay[1912] A.C. 333, (1912) 10 E.L.R. 281, (1912)
1 D.L.R. 681 (P.C.). The Board comprised Earl Loreburn L.C., Lord Macnaghten, Lord At-
kinson, Lord Shaw of Dunfermline and Lord Robson.
13lbid., 339.
141bid., 342.
REVUE DE DROIT DE McGILL
[Vol. 29
come into play with respect to works transferred to federal legislative ju-
risdiction by virtue of a declaration under paragraph (c). Mr Hanssen took
the following approach:
For example, assume that a power dam which would otherwise be within
provincial jurisdiction is the subject of a declaration under 92(10)(c) and there-
fore within federal jurisdiction; the provincial government could probably take
jurisdiction on the basis of 92(13), property and civil rights in the province,
or 92(16), generally all matters of a merely local or private nature in the prov-
ince. The validity of the provincial legislation would depend on whether there
was in existence federal legislation which had dealt with the matter with which
the provincial legislation purported to deal. If the federal government had not
occupied the field, then the provincial legislation would be valid.’ 5
While it may well be that the full extent of the “deeming clause” at the
end of section 91 is not entirely clear, the clause most certainly would operate
to foreclose any possibility of provincial jurisdiction on the basis of sub-
section 92(16).16
As for the application of subsection 92(13), a logical extension of Mr
Hanssen’s analysis would appear to give provincial legislatures jurisdiction
over “Beacons, Buoys and Lighthouses”‘ 7 (to cite but one example) to the
extent that these have not been dealt with in federal legislation. This position
is in conflict with the orthodox analysis, expressed succinctly by Lord Wat-
son on behalf of the Judicial Committee in Union Colliery:’ 8
The abstinence of the Dominion Parliament from legislating to the full limit
of its powers, could not have the effect of transferring to any provincial leg-
islature the legislative power assigned to the Dominion by s. 91 of the Act of
1867.19
Phineas Schwartz, while conceding the weight of the orthodox view as
expressed by Lord Watson, suggested that the rather unusual nature of the
declaratory power would justify a different treatment of the resulting leg-
islative jurisdiction:
Considering that the legislative power involved is power that the Dominion
gave itself by declaration,.. .[Lord Watson’s] statement would allow the Do-
minion to place an area of control in limbo, in a forbidden category, by making
15Hanssen, The Federal Declaratory Power Under the British North America Act (1968) 3
Man. L.J. 87, 92-3. Although the passage is not entirely clear, it seems that Mr. Hanssen was
referring only to Provincial legislation enacted after the declaration. He may, however, have
been of the view that “post-declaration” and “pre-declaration” legislation stood on the same
footing.
‘6Supra, note 2.
17Sub-s. 91(9).
18Union Colliery Co. v. Bryden [1899] A.C. 580, (1899) 68 L.J.P.C. 118. The Board comprised
Lord Watson, Lord Hobhouse, Lord Macnaghten, Sir Richard Couch and Sir Edward Fry.
19Ibid., 588.
19841
SUBSECTION 92(10)
a declaration over a particular work and not legislating on that work. …[I]f
we accept the unoccupied field approach because of the essential difference
between this interpolated part of s. 91 and the rest of s. 91, there will always
be provincial legislation ready for application if the Dominion does not utilize
its jurisdiction. On the other hand, if we treated interpolated 10(c) as any other
part of s. 91, there is the danger that valid provincial interests will be overlooked.
This question has its practical ramifications in the consideration of the status
of any provincial legislation when the Dominion removes its declaration, or
even, for that matter, narrows it. If the “unoccupied field” theory with its
concomitant concept of dormant provincial legislation is applicable, then any
surrender by the Federal Parliament of authority by declaration would instan-
taneously revive the dormant provincial legislation. On the other hand, if we
take the view that a declaration nullifies provincial legislation applicable to
the work before the declaration, then of necessity the province would be ob-
ligated to repass desirable legislation. 20
To some extent, of course, Mr Schwartz’s analysis raises political rather
than legal questions. However, in his discussion of the legal position of”pre-
declaration” provincial laws, Mr Schwartz failed to consider what seems to
be the most precise interpretation. The transfer of legislative jurisdiction
from a provincial legislature to the Parliament of Canada should not, it is
submitted, “nullify” existing provincial legislation; indeed, it should have
no effect whatsoever on such legislation. The general rule of Canadian con-
stitutional law would appear to be that the transfer of legislative jurisdiction
does not affect the validity of previously-enacted legislation, provided that
such legislation was validly enacted in the first instance by a competent
legislative body.2 1
If this were not the rule then, for example, any Imperial statutes still
in force in Canada as of April 17, 1982 which have not been re-enacted by
the Parliament of Canada or the appropriate provincial legislature would
have lost their legal authority in Canada with the coming into force of the
Constitution Act, 198222 (assuming that this Act effected a complete transfer
of legislative jurisdiction from the U.K. Parliament to the appropriate Canadian
legislative bodies). The better view would seem to be that such a result was
neither intended nor achieved.
Thus, if the Parliament of Canada were to make a declaration over a
particular work, but not otherwise provide for it, provincial legislation would
20Schwartz, Fiat by Declaration – S. 92(10)(c) of The British North America Act (1960) 2
Osgoode Hall L.J. 1, 15.
21In other words, s. 129 of the Constitution Act, 1867 is, in large part, declaratory only. For
example, see J. Clarence-Smith & J. Kerby, Private Law in Canada (1975) vol. 1, 135-9 for
the history of early land grants under the authority of the Nova Scotia legislature in parts of
that Province which subsequently became New Brunswick and Prince Edward Island.
22Schedule B of the Canada Act, 1982, c. 11 (U.K.).
McGILL LAW JOURNAL
[Vol. 29
continue to apply.23 Naturally, the same result would obtain with respect
to federal legislation after the revocation or limitation of a declaration.
Otherwise validly-enacted federal legislation would continue to apply until
such time as the provincial legislature in question chose to exercise its newly-
re-acquired jurisdiction. 24
II. Works and Undertakings
Subsection 92(10) distributes legislative jurisdiction over “works” and
“undertakings”: these are the basic units, or objects, of jurisdiction. A clear
understanding of what these two terms mean is therefore essential to a clear
understanding of the subsection as a whole. Regrettably, confusion, rather
than clarity, is the rule. “At times, .. .the terms ‘works’ and ‘undertakings’
have been used inter-changeably”, 25and the cases are full of references to
works that “form part of’ undertakings and to undertakings that “form part
of’ works. As the discussion of legislative jurisdiction later in this essay
tries to show, inaccuracies of this sort can give rise to badly mistaken hold-
ings.26 A restatement of some fundamental points about the nature of a
work, the nature of an undertaking and the relationship between the two is
therefore not without value.
It must always be kept in mind that the two terms, “work” and “un-
dertaking”, refer to two different orders of reality. A work “is a physical
thing.”‘ 27 It has a concrete existence in the tangible world. An undertaking,
on the other hand, “is not a physical thing, but is an arrangement under
23See A. Lefroy, Canada’s Federal System (1913) 364-71, for some early comments on the
question.
24 A. Lajoie, Le Pouvoir declaratoire du Parlement (1969) 77, puts the position thus:
La competence demeure, mais, elle devient inop~rante quant A l’objet, tant que la
. En effet, 1’exercice du pouvoir d~claratoire n’a pas
d&claration reste en vigueur…
pour consequence l’annulation de la 16gislation provinciale ni ]a suppression per-
manente de la competence provinciale: iI en paralyse seulement 1’exercice. [Em-
phasis omitted].
Although Ms. Lajoie’s conclusions are, in general, deserving of the highest respect, here she
seems to have understated the effect of a declaration on Provincial legislative competence. The
better view would seem to be that Provincial competence is actually eradicated (in the sense
of having been completely transferred), albeit only for so long as the declaration remains in
force. Admittedly, this distinction may be of little more than academic interest: in practice,
the two analyses would appear to arrive at the same conclusion as to a declaration’s legal
effects.
25McNairn, supra, note 8, 358-9.
26See the discussion following note 63, infra; and see McKercher, Parliament’s Declaratory
Power (1955) 20 Sask. Bar Rev. 3, for a very clear treatment of the problem as it arises under
paragraph (c).
2 7Montreal Street Railway, supra, note 12, 342.
1984]
SUBSECTION 92(10)
which of course physical things are used” .28 An undertaking has no concrete
existence in the tangible world, but exists only as a construct of the legal
imagination. While a work is a part of the physical world around us, an
undertaking is really nothing but a product of legal theory.
Put another way, although a work must always be a res, an undertaking
as the Board’s opinion in Winner made
may be nothing more than a spes –
clear:
Their Lordships are not prepared to accept the contention that an under-
taking has no existence until it is carried into effect or is capable of being
lawfully carried out. It may be an undertaking at any rate if the promoter has
done everything which was necessary on his part to put it in motion, and has
made all the essential arrangements. 29
It is somewhat remarkable that in spite of these clear judicial pro-
nouncements there continues to be considerable confusion as to whether or
not the meanings of these two terms may overlap in some way. This con-
fusion is even more surprising when it is remembered that the two terms
are used together in the subsection and it has been authoritatively estab-
lished that they are to be read disjunctively. 30
A. Works as “Parts of” Undertakings
The inaccurate reading of “undertaking” may, in part, have its roots
in 19th Century English company law cases (especially railway debenture
cases) where the term was usually held to embrace what might otherwise
be described as “works”. 31 However, even in that context, where an instru-
ment referred both to an undertaking and to the lands owned by that un-
dertaking, it was held that lands were not included in the meaning of the
2 81n Re Regulation and Control of Radio Communication in Canada [1932] A.C. 304, 315,
[1932] 2 D.L.R. 81, [1932] 1 W.W.R. 563 (P.C.) [hereinafter cited to A.C. as Radio] [emphasis
added]. The Board comprised Viscount Dunedin, Lord Blanesburgh, Lord Merrivale, Lord
Russell of Killowen and Sir George Lowndes.
29Supra, note 6, 575. See also Colonial Building and Inv. Association v. A.G. Quebec (1883)
9 A.C. 157, 164-5 (P.C.); Corporation of Toronto v. Bell Telephone Co. of Canada [1905] A.C.
52, 58-9 (P.C.) It does seem a little ironic that “a promoter” may find himself embroiled in a
constitutional battle for legislative jurisdiction over his “undertaking” even before he has an
insurable interest in it, but this appears to be the state of the law. Strictly speaking, there is a
conceptual distinction between the “undertaking”, (an activity, business, enterprise, or orga-
nization), and its “promoter” (the operator, owner, or undertaker), an artificial or natural person.
However, the term is conventionally used in both senses, and any attempt to introduce a more
precise terminology would likely produce more ambiguity than it would eliminate.
30Supra, note 6, 571-4.
31For example: Re Panama, New Zealand, and Australian Royal Mail Co. (1870) 5 Ch. App.
REVUE DE DROIT DE McGILL
[Vol. 29
term “undertaking”. 32 Simply as a matter of construction, then, it seems
only sensible to conclude that in subsection 92(10), “undertakings” do not
include “works”: two terms are used because the subsection deals with two
distinct and completely separate kinds of entity.33
Of course, in practical terms, the physical things owned or used by an
enterprise are very much a “part of’ that enterprise, and ordinary or com-
mercial usage reflects this practical reality. As is often the case, however,
what leads to clarity in ordinary usage can lead to profound confusion in
constitutional interpretation. If works were to be considered, in constitu-
tional terms, as forming “part of’ the undertakings that owned or used
them, then legislative jurisdiction over a work could be determined only
by reference to the jurisdiction over the undertaking of which it was a part.
In other words, subsection 92(10) would operate to assign legislative juris-
diction over works, as such, only insofar as these works were unowned and
unused. At the very least, such a reading of the subsection seems artificial
and inelegant.
All of which is not to say that jurisdiction over an undertaking does
not, in any sense, give rise to control over its works. 34 However, the extent
of an undertaking – what it includes or does not include –
and the degree
to which jurisdiction over that undertaking includes regulatory authority
over its works are two conceptually distinct questions.
B. Undertakings as “Parts of” Works
To read the term “works” as if it might include what would otherwise
be described as undertakings seems even more eccentric. Yet such a reading
has been suggested, not only in the context of paragraph (c), but also in the
context of paragraph (a).
1. Paragraph (c)
Despite explicit authority to the contrary, 35 commentators have felt
obliged to suggest that “works” in paragraph (c) includes undertakings be-
cause the effect of a declaration over a work pursuant to paragraph (c)
appears to be “to bring within federal authority not only the physical shell
or facility but also the integrated activity carried on therein; in other words,
32Wickham v. New Brunswick & Canada Railway (1865) 1 L.R.P.C. 64, (1865) 16 E.R. 158
(N.B.).
96 D.L.R. (3d) 385 (B.C. S.C.); E. Driedger, Construction of Statutes 2nd ed. (1983) 109-11.
33See Architectural Institute of British Columbia v. Lee’s Design and Engineering Ltd (1979)
34See the discussion preceding note 62, infra.
35Supra, note 12, 342.
19841
SUBSECTION 92(10)
the declaration operates on the work in its functional character.” 36 Later in
this essay, an attempt will be made to demonstrate that one need not stretch
the meaning of the term “works” in order to explain this result.37 The
Parliament of Canada may enjoy considerable control over the undertakings
that use a declared work, even though these undertakings are not “part of”
the work.
2. Paragraph (a)
a. Radio Reference
Insofar as paragraph (a) is concerned, the major source of confusion is
the following passage from the Judicial Committee’s opinion in the Radio
reference:
Their Lordships cannot but think that much of the argument depends on
an unwarranted deduction taken from a sentence to be found in the judgment
delivered by Lord Atkinson in the case of City of Montreal v. Montreal Street
Ry. Co. His Lordship, after saying “the matters thus transferred are.. .,” quotes
the sections (a), (b) and (c) and then adds: “These works are physical things,
not services.” Mignault J.38 in the aviation case assumed that this sentence
applied not only to (c) which deals with “works” only, but also to (a) and (b),
and this view has obviously influenced the conclusions of the minority in this
case. Now in the first case their Lordships see no reason why the word “works”
should not be referred to the same word standing alone in (c) and not be
extended to (a) where it is conjoined with “undertaking,” and to (b) where it
is not used at all. But if their Lordships’ surmise as to the view of the Board
as expressed by Lord Atkinson is wrong, then they are not bound by and would
not agree with the widened proposition. In the wider sense it was in no way
necessary for the judgment in the case. 39
Mr Schwartz has correctly summarized the effect of this passage:
Lord Atkinson in an imprecise reference to s. 92(10) stated [in Montreal
Street Railway], “These works are physical things, not services”. Clarifying the
exact reference, Viscount Dunedin [in the Radio reference] surmised that the
use of “works” in 10(c) is other than in 10(a) and that the meaning of works
in (c) is physical things in contradiction to “undertakings” which is “not a
physical thing but is an arrangement under which of course physical things are
used.” Referring to Cannon J. who assumed that Lord Atkinson’s equation of
“works” and “physical things” applied to all of s. 92(10), Viscount Dunedin
held this definition applied only to 92(10)(c). On the other hand, this definition
36B. Laskin, Canadian ConstitutionalLaw, 4th ed. (1975) 480. See also P. Hogg, Constitutional
Law of Canada (1977) 324 and 330-1; McNairn, supra, note 8, 358-9; Lajoie, supra, note 24,
58-66; Schwartz, supra, note 20, 7-8; Hanssen, supra, note 15, 93-5; contra, McKercher, supra,
note 26.
37See the discussion following note 93, infra.
38This should be Cannon 1.
39Supra, note 28, 315.
McGILL LAW JOURNAL
[Vol. 29
of “undertakings” applies to the whole of head (10). It would appear then,
from these cases that while “works” in 10(c) is limited to physical things,
“works” in 10(a) is not so restricted.40
On its face, Lord Atkinson’s dictum is not at all imprecise, and its
meaning seems quite clear: the term “works”, wherever it appears in sub-
section 92(10), means “physical things, not services”. However, a rather
peculiar misinterpretation of the dictum had taken hold in Canada. Clement,
for example, wrote that “the works and undertakings covered by these classes
have been described by the Privy Council as ‘physical things, not ser-
vices’.”‘ 41 Why Lord Atkinson should have been thought to mean “works
and undertakings” when he said only “works” is not at all clear, but this
was a common reading of the dictum; and, on this basis, a number of
Canadian judges had concluded that paragraph (a) could not be applied at
all unless some “physical thing” provided an inter-provincial connection.
The example provided by Viscount Dunedin in the Radio Reference is
an apt one. Here, from the Aeronautics reference, 42 is Cannon J.’s reason
for holding that subsection 92(10) could not be applied to aviation:
[A]viation, even if designated as aerial navigation, is not a subject enumerated
in section 91, or in subsection 10 of s. 92. The works and undertakings con-
necting a province with another province or extending beyond the limits of
the province are “physical things, not services”, as pointed out by Lord At-
kinson in City of Montreal v. Montreal Street Railway. The airlines cannot be
assimilated to railways or physical things and [thus] this authority applies with
singular force to exclude fe4eral control of aviation, unless the latter is assim-
ilated to inter-provincial lines of navigation.4 3
Now this bizarre misinterpretation could easily have been corrected if
Viscount Dunedin had simply made it clear that Lord Atkinson had said
“works” and had meant “works” – not “works and undertakings”. How-
ever, rather than clarify the meaning of Lord Atkinson’s dictum in this
40Supra, note 20, 7.
41Supra, note 5, 747 [emphasis added]. In fairness to Clement, he did later write: “It is
obvious that a continuous or even actual physical connection is not contemplated in some of
the classes mentioned.. .and, perhaps, the use of the word ‘undertaking’ indicates that physical
connection between the different parts of the undertaking is not essential, so long as the un-
dertaking as a whole has to do with physical things worked and controlled as one, though
spread over different provinces.” Ibid., 748. However, even in this passage, the link with
“physical things” is seen as vital.
42Re Regulation and Control of Aeronautics in Canada [1930] S.C.R. 663, [1931] I D.L.R.
13.43Ibid., 716 [emphasis added]. The somewhat cryptic reference to “lines of navigation” seems
to be directed to subsection 91(10).
1984]
SUBSECTION 92(10)
fashion, Viscount Dunedin dealt with the problem by restricting the appli-
cation of the dictum to paragraph (C). 4 4 As Mr Schwartz has pointed out,
the result of this approach is that while in paragraph (c), “works” means
only “physical things,” in paragraph (a) “works” may mean more than just
“physical things”. In other words, “works” has a much broader meaning
in paragraph (a) than it does in paragraph (c).
Logically, it would seem the converse would be more reasonable inasmuch as
“works” in 10(a) is accompanied by “undertakings” which would by definition
cover the usage of the “works”, while in 10(c) “works” stands alone without
the crutch of “undertakings”, and one would think that by itself its meaning
would be broader 45
To understand why Viscount Dunedin preferred this illogical construc-
tion of the subsection, it will be necessary to examine some of the arguments
put forward by the provinces in the Radio case itself.
Before the Supreme Court, the provinces had conceded that there might
be a limited federal role in the regulation of radio communications but had
vigourously asserted that there remained room for a strong provincial pres-
ence in the field. At the heart of this contention was the assertion that all
radio receiving sets (and possibly even some transmitting stations) were
essentially local works. Rinfret J. had combined this argument with the
misreading of Lord Atkinson’s dictum to produce a powerful case for pro-
vincial dominance in the field.
En soi, l’appareil 6metteur et l’appareil rdcepteur sont des objets de pro-
pri6t6 “d’une nature locale” situ~s dans la province, au sens de l’article 92.46
…[J]e ne crois pas qu’on puisse pr~tendre que, par le seul fait que ces travaux
ont une repercussion au delI des frontires d’une province, ils perdent leur
caract~re local.
Je suppose un phare qui serait 6rigE sur le territoire d’une province mais
suffisamment pros de Ia fronti~re pour que ses feux et sa lumire soient projet~s
sur le territoire d’une autre province. I1 me semble que l’on ne pourrait en
conclure que ce phare cesse d’Etre un ouvrage d’une nature locale au sens du
paragraphe 10 de l’article 92.41…
Mais on objecte que le sujet dont il s’agit n’est pas l’appareil 6metteur ou
r’appareil r~cepteur en soi, que la veritable question est la communication qui
s’6tablit entre les deux appareils et que, comme il est impossible de restreindre
cette communication aux limites d’une province, il en r~sulte qu’elle tombe
dans le domaine f-dral.48
44Contemporary authors had no doubt that this was the effect of Viscount Dunedin’s remarks:
see MacDonald, supra, note 3, 12.
45Supra, note 20, 7.
46 Re Regulatation and Control Radio Communication [1931] S.C.R. 541, 556, [1930] 1
D.L.R. 141.
47Ibid., 557.
48 Ibid., 558.
REVUE DE DROIT DE McGILL
[Vol. 29
The learned judge then went on to consider how far the exceptions in
subsection 92(10) could have application. Paragraphs (b) and (c) obviously
had no bearing, so Rinfret J. turned his attention to paragraph (a):
L’interpr~tation souveraine qui doit nous guider dans la port~e qu’il faut
donner A ce sous-paragraphe a 6t6 donn~e par le Conseil Priv6 dans la cause
de Montreal v. Montreal Street Railway. Il y est dit, en r6ferant aux travpux
dont il s’agit dans ce sous-paragraphe: “These works are physical things, not
services.” Or, la distinction fondamentale entre ]a radiocommunication et la
communication par tlgraphe, tlphone ou autres travaux du meme genre
auxquels s’applique le sous-paragraphe (a) du paragraphe 10 est prdcis6ment
que ]a radiocommunication peut 8tre un “service”, mais elle n’est pas un
“physical thing”.
En outre, il n’existe pas de connexion physique entre ‘appareil 6metteur
et l’appareil r6cepteur, comme le fil qui, dans le 161graphe et le t6ldphone, relic
‘endroit d’ofi sont 6mis les sons ou les signaux A l’endroit ofi ils sont regus.
A la rigueur, une ligne de radiocommunication 6tablie par une firme com-
merciale pour le service du public partant d’une ou de plusieurs stations d’6-
mission fixes qu’elle poss~derait dans une province et qui transmettrait des
messages de toutes natures A l’aide des ondes hertziennes A des stations de
r6ception fixes, dont la firme serait 6galement propri6taire, et qui seraient si-
tu6es dans d’autres provinces, constitueraient un “undertaking” tombant sous
la juridiction fed6rale. I1 semblerait cependant que, dans ce cas, le pouvoir
fted6ral procderait non pas du sous-paragraphe (a) du paragraphe 10 de ‘article
92, mais du paragraphe 2 de ‘article 91 concernant “The regulation of trade
and commerce”. 49
As Rinfret J.’s rigourous treatment of the question makes plain, in terms
of subsection 92(10) there are four potential elements in radio communi-
cation: (i) the transmitting work; (ii) the transmitting undertaking; (iii) the
receiving work; and (iv) the receiving undertaking.
Viscount Dunedin and his colleagues made no secret of their desire to
avoid dividing legislative jurisdiction over these elements between the Do-
minion Parliament and the provincial legislatures. In practical terms, this
meant bringing all these elements under federal control because, as even
the provinces conceded, some aspects of radio communication would nec-
essarily fall within the federal ambit no matter how restrictively the juris-
diction of the Dominion Parliament was described. The argument put forward
by Rinfret J. clearly outlined the difficulties facing the Board if it attempted
to accomplish its self-appointed task (complete federal control) using con-
ventional constitutional analysis.
This may be one of the reasons that the Board chose to stress the
importance of the 1927 International Radiotelegraph Convention. The Board
may have felt that the Convention would provide a broader base for federal
49 Jbid., 558-9.
1984]
SUBSECTION 92(10)
jurisdiction, especially in light of the recently-issued opinion in the Aero-
nautics reference. 50 Nonetheless, it soon became clear that the terms of the
Convention could not, by themselves, provide a fully convincing rationale
for complete federal control.
To be sure, the regulation of transmitting worksrwas clearly covered by
the Convention and so brought within federal competence, and the regu-
lation of transmitting undertakings might also be brought within its terms.
However, it was next to impossible to see how performance of its duties
under the Convention would require the Dominion Parliament to regulate
receiving works and undertakings. Rather reluctantly, the Board therefore
moved from a consideration of the Convention back to an examination of
subsection 92(10). This meant, of course, that the Board had to meet the
arguments put forward by Rinfret J.
In terms of subsection 92(10) the Board could bring the first and third
elements (the “undertaking” elements) within federal jurisdiction by making
it clear that Lord Atkinson’s dictum applied only to works, and not to works
and undertakings. If undertakings were not physical things, but rather, were
“arrangements under which physical things are used”, it would follow that
for the purposes of subsection 92(10), their “connection” could be consid-
ered in functional rather than physical terms. Once the Board had estab-
lished that paragraph (a) could be applied to “connecting” undertakings
even in the absence of a physical link, it then became possible to say that
radio broadcasters and their listeners were all engaged in an inter-provincial
communications undertaking connecting provinces, functionally, by the in-
ter-provincial transmission of messages. Given that the same transmission
signals would, in theory, reach both intra- and extra-provincial listeners;
and given that all listeners would, in theory, have access to both intra- and
extra-provincial signals, it could be argued that the “undertaking of broad-
casting” could not be divided into separate intra- and inter-provincial
components.
However, even if all of this very broadly defined “undertaking” of
broadcasting fell with federal jurisdiction under subsection 92(10); and even
if transmitting works could be brought under federal control by virtue of
the Convention, this would still leave the fourth element, the radio receiving
work, within provincial jurisdiction.
The heart of the provincial argument advanced by Rinfret J. had been
that radio works were local works, and so within the provincial sphere.
50Re Regulation and Control of Aeronautics in Canada [1932] A.C. 54, [1932] 1 D.L.R. 58,
[1931] 3 W.W.R. 625 (P.C.). For a vehement contemporary reaction to this aspect of the Radio
Board’s opinion, see Ewart, The Radio Case (1932) 10 Can. Bar Rev. 298.
McGILL LAW JOURNAL
[Vol. 29
Considered as “physical things”, radio receivers undoubtedly were (and are)
local works because they do not physically extend beyond the limits of a
single province. The fact that these local works might be used by the inter-
provincial “undertaking of broadcasting” would not, of itself, suffice to bring
them within the exclusive legislative jurisdiction of the Parliament of Canada
any more than the use of intra-provincial roads or railways by inter-pro-
vincial carriers suffices to bring these local works under federal jurisdic-
tion.5′ In short, in order to bring radio receivers entirely with federal jurisdiction,
the Radio Board would have to:
(i) hold that these apparently local works were “part of” an inter-
provincial undertaking; or
(ii) hold that these apparently local works were “part of” an inter-
provincial work.
The Board itself had effectively foreclosed the first possibility by making
it clear that the term “undertaking” was not to be interpreted as referring
to physical things themselves, but only to the “arrangements” for their use.
However, if it could be said that the term “works” might include a “non-
physical” element, then the second option might well be exercised. It might
be said that physically unconnected local works could be functionally con-
nected in such a way that they formed a single inter-provincial work –
at
least for constitutional purposes.
Obviously, Lord Atkinson’s dictum to the effect that “works” did not
include “services” presented a formidable obstacle to this interpretation of
paragraph (a), and so Viscount Dunedin and the Board proceeded to hold
that the dictum should be applied only to paragraph (c).
Caught between the Scylla of an artificial construction and the Char-
ybdis of divided control over radio communication, the Radio Board opted
for an artificial construction. As a result, the Board was able to find that
radio communication involved not only an inter-provincial undertaking
(broadly conceived):
Their Lordships have therefore no doubt that the undertaking of broad-
casting is an undertaking “connecting the Province with other Provinces and
extending beyond the limits of the Province.” 52
but also, as the next sentence in the opinion makes clear, an inter-provincial
work in the form of a telegraph (broadly conceived):
But further, as already said, they think broadcasting falls within the description
of “telegraphs.” No doubt in everyday speech telegraph is almost exclusively
51 Winner, supra, note 6.
52Radio, supra, note 28, 315.
1984]
SUBSECTION 92(10)
used to denote the electrical instrument which by means of a wire connecting
that instrument with another instrument makes it possible to communicate
signals or words of any kind. But the original meaning of the word “telegraph”,
as given in the Oxford Dictionary, is: “An apparatus for transmitting messages
to a distance, usually by signs of some kind.”’53
So the four elements became two, and both came entirely within federal
jurisdiction. The first section of this passage served to bring the first and
third elements of radio communication (the transmitting and receiving un-
dertakings) together under federal legislative jurisdiction. The second sec-
tion of the passage ensured that the second and fourth elements (the transmitting
and receiving works) were joined and placed securely within the federal
sphere. Both findings were essential to the complete assertion of federal
authority in the field. Viscount Dunedin and his colleagues were keenly
aware that radio receiving works could not be brought completely under
federal control except by establishing that they were not merely local works.
So, two otherwise intra-provincial works connected functionally (but not
physically) by an inter-provincial undertaking became one inter-provincial
work; a telegraph, more or less.
The treatment of the Board’s opinion on the Radio reference by later
Boards and in the Canadian courts is a fascinating topic in its own right.
However, for the purposes of this essay, only two of these later “clarifica-
tions” of the holding in Radio need be considered.
b. Labour Conventions
The Labour Conventions54 Board was especially anxious to reject the
view that the Radio Board had relied upon the 1927 International Radi-
otelegraph Convention to support federal legislative authority in the field of
radio communication; and despite the unambiguous language of the earlier
opinion, it did just that. However, in the process, the Labour Conventions
Board also cast doubt on the whole of the Radio Board’s analysis of sub-
section 92(10).
Lord Atkin admitted that the holding in Radio presented “some
difficulties”:
But when that case [the Radio Reference] is examined it will be found that
the true ground of the decision was that the convention in that case dealt with
classes of matters which did not fall within the enumerated classes of subjects
53Ibid., 315-6 [emphasis added].
54A.G. Canada v. A.G. Ontario [1937] A.C. 326, [1937] 1 D.L.R. 673, [1937] 1 W.W.R. 299
(RC.) The Board comprised Lord Atkin, Lord Thankerton, Lord Macmillan, Lord Wright M.R.
and Sir Sidney Rowlatt.
REVUE DE DROIT DE McGILL
[Vol. 29
in s. 92, or even within the enumerated classes in s. 91. Part of the subject-
matter of the convention, namely – broadcasting, might come under an enum-
erated class, but if so it was under a heading “Inter-provincial Telegraphs,”
expressly excluded from s. 92.55
In essence, the Labour Conventions Board was suggesting that subsec-
tion 92(10) did not apply at all, but that if it did apply, it did so because
of the existence of “Inter-Provincial Telegraphs”. The existence of an inter-
provincial “undertaking of broadcasting” was never mentioned as a possible
basis for federal jurisdiction.
c. Winner
By way of contrast, the Winner Board accepted that the Radio case
involved an inter-provincial undertaking, but expressly denied that there
could have been an inter-provincial work:
In the Radio case there was no connecting work, only a connecting un-
dertaking, unless the somewhat fanciful suggestion were to be adopted that the
flow of an electric discharge across the frontier of a province is to be regarded
as a physical connexion.56
This is as clear a repudiation of the Radio Board’s “functional con-
nection” analysis as could be found. For the purposes of subsection 92(10),
the extent of a work is to be measured only in terms of its physical attributes.
A work that does not physically extend beyond the limits of a province is
not an inter-provincial work, no matter how intimate a functional connec-
tion it may have with other works in other provinces.
On the basis of this very clear statement in Winner, it seems safe to
say that Viscount Dunedin’s highly artificial interpretation of Lord Atkin-
son’s dictum has been discarded. Freed from the illogical constraints im-
posed upon it by the Radio reference, the statement applies with equal force
throughout subsection 92(10), from the introductory words through to par-
agraph (c). Throughout subsection 92(10), “works are physical things, not
services”.
III. Legislative Jurisdiction
A.
Introduction
It should be quite clear from the foregoing that for constitutional pur-
poses a work can never –
properly be said to
“form part of’ an undertaking (or vice-versa). In other words, a work and
in any circumstances –
551bid., 351 [emphasis added].
56Supra, note 6, 574.
19841
SUBSECTION 92(10)
an undertaking can never be bound up together in such a way that legislative
jurisdiction over the one would, ipsofacto, give rise to legislative jurisdiction
over the other. However, this is not to say that legislative jurisdiction over
a work does not give rise to some degree of legislative control over the
undertakings that use the work; or that legislative jurisdiction over an un-
dertaking does not give rise to some degree of legislative control over the
works used by that undertaking.
For example, where an intra-provincial undertaking uses an inter-pro-
vincial work, then that undertaking may fall under federal control to the
extent of that use, but it must be kept in mind that this regulatory power
arises out of the legislative jurisdiction over the work, not out of any leg-
islative jurisdiction over the undertaking as such. Thus, federal control over
the undertaking extends only so far as it is necessarily incidental to the
exercise of legislative jurisdiction over the work.
This most important point was expressed with admirable clarity by
Kerwin J. in Quebec Railway, Light & Power Company v. The Town of
Beauport57 in the context of a declaration under paragraph (c):
Upon the declaration being made that the works of the Company were for the
general advantage of Canada,
the effect of subsection 10 of s. 92 of The British North America Act is …
to transfer the … works mentioned.., into s. 91 and thus to place them
under the exclusive jurisdiction and control of the Dominion Parliament.
City of Montreal v. Montreal Street Ry. Co.
It is the “works”, however, and not the Company that is thus brought within
the jurisdiction of the Dominion. Section 2 of the 1895 Act 58 cannot by itself
effect any such result but the “works” being considered as an enumerated head
57[1945] S.C.R. 16, [1945] 1 D.L.R. 145 [hereinafter cited to S.C.R. as Beauport].
58The first two sections of the Act in question, S.C. 1895, c. 59, read as follows (s. 1 is arguably
the most notorious paragraph (c) declaration in Canadian constitutional history):
1. The undertaking of the Quebec, Montmorency and Charlevoix Railway Com-
pany, a body incorporated as mentioned in the preamble, and hereinafter called
“the Company,” is hereby declared to be a work for the general advantage of Canada.
2. The Company as now organized and constituted under the said Acts of the
province of Quebec is hereby declared to be a body politic and corporate within
the legislative authority of the Parliament of Canada; and this Act and The Railway
Act of Canada shall apply to the Company and its undertaking, instead of the said
Acts of the province of Quebec and The Railway Act of Quebec: Provided that
nothing in this section shall affect anything done, any rights or privilege acquired,
or any liability incurred under the said Acts of the province of Quebec prior to the
time of the passing of this Act, –
to all which rights and privileges the Company
shall continue to be entitled and to all of which liabilities the Company shall con-
tinue to be subject.
McGILL LAW JOURNAL
[Vol. 29
of section 91, Parliament may enact such further legislation as is necessarily
incidental to the exercise of its jurisdiction over them [the works].5 9
Similarly, in the exercise of its legislative jurisdiction over inter-pro-
vincial undertakings, the Parliament of Canada may acquire considerable
control over some intra-provincial works. However, the works themselves
are not independently the objects, as it were, of federal legislative authority.
The object of federal jurisdiction is the undertaking: the work may be con-
trolled only so long as it is used by the inter-provincial undertaking, and
only to the extent that such control is necessarily incidental to the exercise
of federal legislative jurisdiction over the undertaking.
Undoubtedly, confusion on these points is common. The cases fre-
quently assert that a work forms part of an undertaking60 or that an un-
dertaking forms part of a work, 6′ and Kerwin J. is one of the few to have
recognized that jurisdiction over the one does not necessarily give jurisdic-
tion over the other (even though it may give rise to extensive control). Of
course, at first glance, this lack of precision may not seem to have much
practical importance. 62 This initial appearance is deceptive.
1. GO Train
Consider, for example, the facts of the GO Train case. 63 The Province
of Ontario wished to operate a commuter train service entirely within the
limits of that Province. The service would be operated using rolling stock
owned by the Province of Ontario, but the trains would run over an inter-
provincial work –
the C.N.R.’s main line along the Great Lakes.
The narrow question in dispute was: “Whether the tolls to be charged
by Ontario in respect of the Commuter Service are subject to the jurisdiction
of the Board of Transport Commissioners. ‘ 64 The parties were agreed that
the Commissioners had jurisdiction over any “tolls” within the definition
of that term in the then Railway Act, 65 and the Supreme Court held that
the statutory definition properly covered the amounts Ontario was to charge
the commuters. This conclusion is unquestionably correct. 66
59Supra, note 57, 33.
60For example, see ibid., 24 (per Rinfret C.J.), 29 (per Davis J.).
61For example, see ibid., 22 (per Rinfret C.J.).
62McNairn, supra, note 8, 359, writes: “This equation [of “works” with “undertakings”]
63The Queen in Right of Ontario v. Board of Transportation Commissioners [1968] S.C.R.
makes little difference in respect of sub-paragraph (a)….
118, (1967) 65 D.L.R. (2d) 425 [hereinafter cited to S.C.R. as GO Train].
I4bid., 122.
65R.S.C. 1952, c. 234.
66See the discussion following note 85, infra.
1984]
SUBSECTION 92(10)
However, the Court was also asked the broader question: “Whether the
Commuter Service comes within the legislative jurisdiction of the Parlia-
ment of Canada”. 67 After reciting and summarizing some of the evidence
on how the service was to operate, the Court restated the issue before it in
the following terms:
On the basis of what has just been said as to the nature of the Commuter
Service it remains to be seen whether it can be said to be a local work or
undertaking within the meaning of head 10 of s. 92 of The British North
America Act.68
Now it should be obvious that while a commuter service may own
works, or operate works, or make use of works, a commuter service itself
cannot possibly be said to be a work. Lord Atkinson’s dictum bears repeating:
“These works are physical things, not services.”‘ 69 A commuter service, then,
can only be said to be an undertaking. Just as the C.N.R. and C.P.R. are
both undertakings and not works (though both own, operate and make use
of numerous and extensive works), so too with the “Commuter Service”
under examination in the GO Train case. Thus, what “remained to be seen”
in GO Train had nothing to do with the status of the Commuter Service as
a work of any sort, local or otherwise. The issue before the Court was whether
the Commuter Service was an inter- or intra-provincial undertaking.
This is not merely a linguistic quibble. There was conceptual confusion
at the heart of the analysis in the GO Train judgment, and the following
passages demonstrate the kind of fundamental errors which were committed
as a result of this confusion:
Counsel for appellant did not contend that the Commuter Service wholly
escaped federal legislative jurisdiction, he [sic] conceded that for such matters
as signals and safety, the commuter trains would be subject to the same rules
as other trains. ….
Counsel for appellant also felt obliged to concede that the train crews would
be subject to federal labour laws not provincial. This cannot be true on any
other basis than that the commuter service70 is not a distinct undertaking but
part of the railway operations from the physical point of view. The criterion
for the application of the labour laws as well as for the application of the safety
rules is the same: whether the undertaking connects the province with any other.7′
Now insofar as it applies to the regulation of labour relations, the prop-
osition advanced in the emphasized sentence is eminently orthodox. It is
67Supra, note 63, 122.
68Ibid., 126 [emphasis added].
69Montreal Street Railway, supra, note 12, 342 [emphasis added].
70It is almost certain that there is no significance to the fact that this is the only place in the
report where the words “commuter service” appear without being capitalized.
71Supra, note 63, 128 [emphasis added].
REVUE DE DROIT DE McGILL
[Vol. 29
well settled that jurisdiction over an undertaking generally includes juris-
diction over its labour relations. Therefore, if the undertaking is inter-pro-
vincial in range, the Parliament of Canada has jurisdiction over its labour
relations, but if the undertaking is intra-provincial, then jurisdiction lies
with a provincial legislature. 72
However, to assert that the same criterion should be used to determine
the application of safety rules is to contradict a long line of solidly-estab-
lished judgments. Jurisdiction over safety rules has always been held to be
part of the jurisdiction over the work, and quite independent ofjurisdiction
over the undertaking. If the work is inter-provincial, the Parliament of Canada
will have legislative jurisdiction over safety rules regardless of the character
of the undertaking against which these rules are to be enforced. 73 Similarly,
even inter-provincial undertakings must comply with the provincial safety
rules when they use intra-provincial works. 74 The inter-provincial under-
taking in Winner came under federal legislative authority, and so its labour
relations would have been governed by federal legislation. Yet, as the Ju-
dicial Committee made perfectly clear, there could be no doubt that the
undertaking was subject to provincial road regulations:
It would not be desirable, nor do their Lordships think it would be possible,
to lay down the precise limits within which the use of provincial highways
may be regulated [by the province]. Such matters as speed, the side of the road
upon which to drive, the weight and lights of vehicles are obvious examples….75
Of course, the distinction between jurisdiction over a work and juris-
diction over an undertaking cannot be drawn if works can form part of
undertakings and vice-versa; and, as the passages already quoted suggest, in
the GO Train judgment the Supreme Court was perfectly content to accept
this fusion of the corporeal and incorporeal realms. This reading of the
72Re Eastern Canada Stevedoring Co. [1955] S.C.R. 529, 592, [1955] 3 D.L.R. 721 (perAbbott
J.) [hereinafter cited to S.C.R. as Stevedores]; Commission du salaire minimum v. Bell Tele-
phone Co. [1966] S.C.R. 767, 772, (1966) 59 D.L.R. (2d) 145 [hereinafter cited to S.C.R. as
C.s.m. v. Bell Telephone]; Agence maritime Inc. v. Conseil canadien des relations ouvribres
[1969] S.C.R. 851, 859-60, (1969) 59 D.L.R. (2d) 145. Naturally, this analysis speaks only to
the position under subsection 92(10). The labour relations of even purely intra-provincial
undertakings may fall under Federal jurisdiction where that jurisdiction derives from some
other provision of the Constitution Act, 1867. Such is the case with aeronautics or banking
undertakings, for example.
73Corporation of Toronto v. Canadian Pacific Railvay [1908] A.C. 54, (1908) 7 C.R.C. 282
74 Winner, supra, note 6.
75Ibid., 576.
(P.C.); Toronto Railway v. Corporation of Toronto [1920] A.C. 426 (P.C.).
19841
SUBSECTION 92(10)
earlier passages is explicitly confirmed by the summary of the holding in
Luscar Collieries76 that appears near the end of the GO Train judgment:
The decision in [Luscar Collieries] shows that even a work which is of
itself local, such as a provincial railway, may become a part of a federal un-
dertaking by being put under the same management through an agreement
with the latter.77
Having lost sight of the distinction between works and undertakings,
the Court (and counsel, too, apparently) naturally found it difficult to keep
in mind the essential difference between jurisdiction over safety rules (which
follows legislative jurisdiction over the work) and jurisdiction over labour
relations (which follows legislative jurisdiction over the undertaking). By
conceding federal legislative jurisdiction over safety rules, counsel conceded
the parties were in agreement that the work fell
nothing of importance –
under federal jurisdiction. But, by conceding federal jurisdiction over labour
relations, counsel in effect conceded the main issue in dispute – primary
jurisdiction over the undertaking itself.78
B. Character of the Jurisdiction over Undertakings
On the level of first principles, the outlines of the jurisdiction over an
undertaking are clear enough. Similar formulations may be found in several
cases, among them C.s.m. v. Bell Telephone.
In my opinion all matters which are a vital part of the operation of an
interprovincial undertaking as a going concern are matters which are subject
to the exclusive jurisdiciton of the federal parliament within s. 91(29). 79
Although there is in theory no reason to suppose that the character of
the jurisdiction over a work should be any different, there is little express
authority on the question in the modem cases.
76Luiscar Collieries, Ltd v. McDonald [1927] A.C. 925, [1927] 4 D.L.R. 85 (P.C.).
77Supra, note 63, 128.
781n fairness to counsel, the labour relations question was by no means a straightforward
one. “It was stated in the application that the train crews on the Commuter Service would be
those of the Canadian National Railways performing services for the Ontario Government on
an agency basis under terms and conditions to be provided for in a formal agreement to be
entered into in the near future.” Ibid., 121-2. Counsel may well have concluded that the link
between the crews and the GO Train service management would not be sufficiently strong to
establish an employment relationship. If the crews remained C.N.R. employees, then juris-
diction over their labour relations would, of course, remain with the Parliament of Canada.
79Supra, note 72, 772.
McGILL LAW JOURNAL
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C. Character of the Jurisdiction over Works
1. Montcalm Construction
The nearest thing to explicit consideration of the point is found in the
following extract from the reasons of Beetz J. in Montcalm Construction:80
To decide whether to build an airport and where to build it involves aspects
of airport construction which undoubtedly constitute matters of exclusive fed-
eral concern… Similarly, the design of a future airport, its dimensions, the
materials to be incorporated into the various buildings, runways and structures,
and other similar specifications are, from a legislative point of view and apart
from contract, matters of exclusive federal concern. 8
What Beetz J. seems to be suggesting is that legistative jurisdiction over a
work is confined to those matters that relate to the physical structure of the
work, and to those matters alone.
2. Notre Dame de Bonsecours
In the course of his reasons, 82 Beetz J. supported his analysis by quoting
the following passage from the opinion delivered by Lord Watson on behalf
of the Judicial Committee in the Notre Dame de Bonsecours case:8 3
80Construction Montcalm Inc. v. Commission du salaire minimum [1979] 1 S.C.R. 754,
(1978) 93 D.L.R. (3d) 641, (1978) C.L.L.C. 14 [herinafter cited to S.C.R.].
81Ibid., 770-I, per Beetz J. The learned judge had earlier remarked that: “The issue was also
discussed as if the Mirabel Airport were a federal work or undertaking, and it could indeed
be argued that an international airport is a work which forms part of an undertaking connecting
a Province with a foreign country or extending beyond the limits of a Province.” Ibid., 769.
Apart from the unfortunate phrase “forms part of’, the passage raises complex questions
concerning the distinction between jurisdiction over works and undertakings pursuant to sub-
s. 92(10), and jurisdiction over the same pursuant to the general (residuary or POGG) power.
Beetz J. seems to treat the two as equivalent, but this is probably not the case.
82Ibid., 772.
83Canadian Pacific Railway v. Corporation of Notre Dame de Bonsecours [1899] A.C. 367
(P.C.). The Board comprised the Lord Chancellor, Lord Watson, Lord Hobhouse, Lord Mac-
naghten, Lord Morris, Lord Shand and Lord Davey. Put briefly, the case turned on the appl-
icability of a provincial statute which required the cleaning of drainage ditches. The C.P.R.
had argued that there were valid federal provisions covering the same matter and that, in any
case, provincial legislation of this sort was not applicable to it or to its railway ditches, because
these were matters within the exclusive jurisdiction of the Parliament of Canada. Thus, the
case dealt with the extent of legislative jurisdiction over both works (which is of concern here)
and undertakings. Although the Board’s theoretical exposition of the law seems perfectly sound,
the actual result is more than a little difficult to justify on a theoretical level. The simplest
rationale may be the best: the Board felt that the cleaning of ditches had as much to do with
property and civil rights in the province as it did with the operation of an inter-provincial
work or undertaking (ie., that this was an area of concurrent jurisdiction); and that none of
the applicable federal legislation conflicted with the provincial statute.
19841
SUBSECTION 92(10)
The British North America Act, whilst it gives the legislative control of
the appellants’ railway qua railway to the Parliament of the Dominion, does
not declare that the railway shall cease to be a part of the provinces in which
it is situated, or that it shall, in other respects, be exempted from the jurisdiction
of the provincial legislatures. Accordingly, the Parliament of Canada has, in
the opinion of their Lordships, exclusive right to prescribe regulations for the
construction, repair, and alteration of the railway, and for its management, and
to dictate the constitution and powers of the company….84
In many respects, this is a most difficult passage to interpret. On the
one hand, it might be suggested that the passage serves to limit jurisdiction
over a work to those matters which involve the physical structure of the
work. Though the point is not made precisely in these terms, this seems to
be the interpretation favoured by Beetz J. in Montcalm Construction. At
the other extreme, if the reference to the “dictation” of the “constitution
and powers of the company” is taken to refer to the scope of jurisdiction
over a work, then it is hard to see any matter which might fall outside its
range. It would appear, however, that both of these interpretations involve
a distortion of Lord Watson’s intended meaning.
The term “railway” (or its twentieth-century synonym “system”) is
often used in a somewhat ambiguous manner. The term can, of course, be
used to mean:
(i) railway works –
equipment; or
(ii) railway undertakings –
operate or make use of these works.
that is to say, tracks, rolling stock and other
that is to say, the entities which own,
In many of the cases, it is all but impossible to determine whether the
term “railway” should be taken as meaning works, undertakings or both.
However, in the Notre Dame de Bonsecours case, Lord Watson was very
careful to distinguish between the appellants (the C.P.R., a railway under-
taking) and the appellants’ railway “qua railway” (a work). Throughout the
Board’s opinion, the term “railway” is used only to refer to railway works.
It therefore seems reasonable to suggest that the grammatical division of
the key sentence is not accidental, but reflects Lord Watson’s intention to
deal with two sources of legislative jurisdiction.
On this reading, the first section of the sentence describes the scope of
federal jurisdiction over a work, while the second section of the sentence
describes the scope of federal jurisdiction over an undertaking. The Parlia-
ment of Canada thus has the “exclusive right”:
1. to prescribe regulations
84Ibid., 372.
REVUE DE DROIT DE McGILL
[Vol. 29
(a) for the construction, repair, and alteration of the railway and
(b) for its management; and
2. to dictate
(a) the constitution [of the company] and
(b) [the] powers of the company.
In other words, although Lord Watson did not intend to imply that
jurisdiction over a work could include such company law matters as the
“constitution and powers of the company”, his Lordship did recognize that
jurisdiction over a work is not confined merely to matters involving its
physical structure, but also includes matters concerning “its management”.
On the whole, then, Lord Watson’s dictum seems to confirm that jurisdiction
over works and jurisdiction over undertakings may be similarly described:
each is limited to those matters which go to essential aspects of the structure,
operation or management of the work or undertaking, as the case may be.
In general terms, this theoretical position is not problematic. As might
be expected, however, problems will arise when it becomes necessary to
allocate a particular matter to one jurisdiction or another.
D. Exclusive and Concurrent
It is not always immediately obvious whether a given matter should
be more properly thought of as falling within the jurisdiction over a work,
or within the legislative jurisdiction over the undertaking using the work.
Very few of the decided cases have found it necessary to address the question
because most of the conflicts that have come before the courts have involved
railways, and in this area of activity, the work and the undertaking are
usually both inter-provincial. Indeed, on the basis of the case law, all that
can be said with any certainty is that safety regulations (or “traffic” regu-
lations) fall within the jurisdiction over the work, and that labour relations
regulations fall within the jurisdiction over the undertaking. 85
1. General Approach
Beyond the bounds of explicit authority, the proper approach to any
analysis of the question is suggested by W.R. Lederman’s treatment of the
general problem of “exclusive” and “concurrent” fields of jurisdiction.
If the federal features of the challenged law are deemed clearly to be more
important than the provincial features of it, then the power to pass that law
is exclusively federal. In other words, for this purpose the challenged law is
classified by its leading feature, by its more important characteristic, by its pith
and substance. And if, on the other hand, the provincial features are deemed
85See, supra, notes 72-3.
19841
SUBSECTION 92(10)
clearly more important than the federal ones, then power to pass the law in
question is exclusively provincial.8 6 . ..
Accordingly, if there is sufficient contrast in relative importance between
the competing federal and provincial features of the challenged law, then in
spite of extensive overlap the interpretative tribunal can still allot exclusive
legislative power one way or the other. Once exclusive power has been deter-
mined to exist for either legislature, then the so-called doctrine of abstinence
simply expresses the implication of this negatively. If the federal parliament
does not choose to use its power of regulation in a particular exclusive federal
field, nevertheless a province cannot enter the field with provincial legislation.
The activity concerned simply remains unregulated.
But what if the federal and provincial aspects of the challenged law seem
to be of equivalent importance? What if there is no real contrast in this respect?
This leads to the second main interpretive situation.
If.. .it develops that the federal and provincial aspects of the challenged
that they are on the same level of signif-
then the allocation of exclusive power one way or the other is not
law are of equivalent importance –
icance –
possible. …
necessary, explains much of Canadian constitutional law.87
Accordingly, the idea of mutual exclusion if practical, but concurrency if
2. Some Examples
Labour relations, for example, “has everything to do with” 88 the reg-
ulation of an undertaking, but virtually “nothing to do with”89 the regulation
of a work. There being, in effect, no overlap, regulation of labour relations
falls “exclusively” within the jurisdiction over the undertaking.
In the area of traffic or safety regulations there is, of course, some
overlap. It would no doubt inconvenience an inter-provincial bus under-
taking if its buses had to run on the right-hand side of the road in one
province and on the left-hand side in another. However, much more than
inconvenience would result if some of the buses on a province’s roads ran
on the left-hand side while some ran on the right.90 Deciding the direction
of travel on public roads is, in relative terms, of much greater importance
to the operation of the work than it is to the operation of the undertaking.
Thus, despite the overlap, traffic or safety regulations fall exclusively within
the jurisdiction over the work.
In the case of “tolls”, to take a final example, the conflicting claims of
the two jurisdictions would appear to be evenly balanced. The charging of
McGill L.J. 185, 187.
86Lederman, The Concurrent Operation of Federal and Provincial Laws in Canada (1963) 9
87Ibid., 188.
88Montcahn Construction, supra, note 80, 771.
89Ibid.
90A point grasped by Davis J. in Beauport, supra, note 57, 30.
McGILL LAW JOURNAL
[Vol. 29
tolls is obviously an essential element in the “management” of a work:
indeed, it is hard to see how a legislative body could be said to have juris-
diction over the management of a work if it was not competent to regulate
the tolls charged or paid for the use of the work. However, an equally strong
case can be made that the regulation of tolls to be charged or paid by an
undertaking is a vitally important aspect of the jurisdiction over that un-
dertaking. Thus, regulation of tolls seems to be a matter falling within both
jurisdictions.
3. Confficts
Given that a concurrent sphere or field has been established, what if both
the federal parliament and the provincial legislatures have entered the field
with statutes? What if ‘the two legislations meet’? 9′
The answer to this question appears to have been given with some
precision in the McCutcheon case92 and need not be dealt with here in any
detail.
E. Paragraph (c)
Some commentators have felt compelled to suggest that where para-
graph (c) is concerned, a different analysis must prevail. Either the term
“work” must be read, as Viscount Dunedin read it, to include services as
much as physical things; or, in the alternative, the jurisdiction over a work
subject to a declaration under paragraph (c) must, in some respects, be
significantly broader than that which would attach to a work subject to
federal jurisdiction by virtue of paragraph (a).93 Professor Hogg combined
these two propositions in the following analysis:
The distinction between works and undertakings is further blurred by the
fact that the effect of a declaration over a work “must surely be to bring within
federal authority not only the physical shell of the activity [sic, or the facility]
but also the integrated activity carried on therein; in other words, the decla-
ration operates on the work in its functional character”. That this is correct is
demonstrated by cases in which the declaration has been followed by an as-
sertion of regulatory jurisdiction over the activity related to the work. Perhaps
the clearest examples are the declarations that grain elevators and various kinds
of mills and warehouses are works for the general advantage of Canada. The
purpose of these declarations was to assume the regulatory jurisdiction over
the grain trade which had been denied to the federal Parliament by The King
v. Eastern Terminal Elevator Co. (1925). It has been held that these declarations
are effective to authorize federal regulation of the delivery, receipt, storage and
9’Lederman, supra, note 86, 189.
92Multiple Access Ltd v. McCutcheon [1982] S.C.R. 161, (1982) 138 D.L.R. (3d) 1, (1982)
44 N.R. 181.
93See, supra, note 36.
1984]
SUBSECTION 92(10)
processing of the grain, that is to say, the activities carried on in or about the
“works”. 94
However, properly understood, federal jurisdiction over the declared
works would seem broad enough to reach any of the activities carried on
in the works (although perhaps not all that might be carried on “about” the
works) without this jurisdiction having any special character. Nor is it nec-
essary to blur the distinction between works and undertakings in order to
explain this result. One may accept that jurisdiction to some extent “operates
on the work in its functional character” –
that is to say, operates on “its
and yet refuse to accept that “a change in function would
management” –
destroy the effect of the declaration and require the making of a new one
to maintain federal jurisdiction. ’95 Jurisdiction over a work of necessity
includes an element of control over its uses, whatever these uses may be:
but jurisdiction over a work merely extends to these uses, it does not stem
from them.
The only cases in this area which cause real difficulty are those which
seem to involve what might be called the company law aspects ofjurisdiction
over paragraph (c) works. Of these, two in particular have been relied upon
by commentators. Therefore, although a full treatment of all the relevant
cases would be impractical, a closer examination of these two decisions
might be worthwhile.
1. Kettle River
Ms. Lajoie, for example, takes a rather broad view of federal jurisdiction
over company law matters with respect to provincially-incorporated com-
panies that are incorporated to own or operate works subsequently made
subject to a declaration.
En ce qui concerne la 16gislation provinciale post~rieure i ]a d~claration,
la position des compagnies cr66es par les autorit~s provinciales differe selon
qu’il s’agit de compagnies qui ont pour seul objet une enterprise ou des travaux
d~clar~s A l’avantage g~nral du Canada, ou au contraire, de compagnies for-
mdes pour la r~alisation d’une ou plusieurs fins provinciales autres que ‘ouv-
rage d~clar6.
Dans le premier cas, la situation est exactement Ia m8me que celle des
compagnies cr66es par le parlement ‘ed~ral. Dans le second cas, les compagnies
restent sujettes i la r~glementation provinciale pour tout ce qui concerne leurs
activit~s relatives A d’autres fins provinciales que l’object de ]a dclaration. 6
94Hogg, supra, note 36, 330-1.
95Laskin, supra, note 36, 480.
96Lajoie, supra, note 24, 85-6.
REVUE DE DROIT DE McGILL
[Vol. 29
In support of her first proposition, Ms. Lajoie cites the Kettle River
case,97 “ofi il a
t dcid6 qu’apr~s une declaration concernant l’entreprise
d’une compagnie de ce genre, la IUgislature n’avait plus la competence de
modifier la charte qui avait ant&ieurement W emise sous son autorit6.” 98
The dispute giving rise to the Kettle River case is a long and complex
one, and a brief summary of its history may help put the judgment in proper
perspective. The Vancouver, Victoria and Eastern Railway and Navigation
Company (“V.V. & E.”) had been provincially incorporated in 1897. In 1898,
the Parliament of Canada declared all the works “which the company by
its said Act of incorporation is empowered to undertake and operate” to
be works for the general advantage of Canada. Sometime later, the Great
Northern Railway Company (“Great Northern”) gained control of the V.V.
& E. The V.V. & E. then began to assemble land to construct a line that
would cross the tracks of a provincial railway, the Grand Forks and Kettle
River Railway Company (“Kettle River”). The purpose of all this was,
practically speaking, to extend the Great Northern system up from the town
of Marcus, in the United States, to the town of Republic, British Columbia.
As Walkem J. said in one of the many judgments generated as a result of
this project, “it is common knowledge that such a scheme, if permitted,
would have the effect of diverting the business of smelting in the Boundary
district and placing it in the hand of our American neighbours.” 99
The Kettle River company, no doubt for commercial as much as for
patriotic reasons, launched a series of legal actions to delay or arrest the
Great Northern’s plans. One of these actions struck at the V.V. & E.: Kettle
River attempted to have the V.V. & E.’s charter revoked. Before Walkem
J., Kettle River succeeded on its application for an order permitting an
action, ex rel., against the V.V. & E. The matter came before Irving J. for
reconsideration because the V.V. & E. had not been represented at the orig-
inal hearing.
By section 4 of the Crown Franchises Regulation Act, the Provincial
Attorney-General is authorized to bring an action against any corporation, (1.)
“Contravening or offending against its act of incorporation…” or (4.) “Mis-
using a franchise or privilege conferred upon it by law”… 00
The points raised against the Company on the application for leave were:
(1.) That it had not confined itself to the line of railway prescribed by the
97A.G. British Columbia Ex Rel. Kettle River Valley Railway v. Vancouver, Victoria and
Eastern Railway and Navigation Co. (1902) 9 B.C.R. 338 (S.C.) [hereinafter cited as Kettle
River].
98Lajoie, supra, note 24, 86n. The case is also discussed in Lefroy, supra, note 23, 365.
99yale Hotel Co. v. Vancouver Victoria and Eastern Railway and Navigation Co. (1902) 9
B.C.R. 66, 69-70 (S.C.) [hereinafter cited as Yale Hotel]. The preceding summary of facts is
drawn principally from the reports of this case and of Kettle River.
‘Kettle River, supra, note 97, 340-1.
1984]
SUBSECTION 92(10)
Provincial charter; (2.) That it had not been commenced within two years; (3.)
That no map of the whole line, as contemplated by the Provincial charter, had
been filed, but merely sections, or parts of the line; (4.) That it was part of the
Great Northern Railway, and that in permitting the Great Northern Railway
to acquire shares in the Company there had been a contravention of the re-
quirement of section 21 of the Provincial Act of incorporation. It is on the
fourth ground only that I find any difficulty in disposing of the case, because
the first, second and third grounds are purely matters relating to the physical
construction of the road, and are dealt with by the Dominion Railway Act.’ 0′
Irving J. expressed the grounds for his judgment setting aside the orig-
inal order in the following way:
I am inclined to the opinion that when the Dominion authority declared
that the undertaking was one for the general benefit of Canada, it wholly re-
moved the Company from the Provincial authority, just as if it had been
originally incorporated by the Dominion of Canada.1’02
On this wide ground, the decision clearly supports Ms. Lajoie’s con-
clusions and is very much against the analysis offered elsewhere in this
essay. If a declaration over its works could serve to remove the company
’01Ibid., 341. The provincial Act in question is the Vancouver, Victoria and Eastern Railvay
and Navigation Conpany Act, 1897, S.B.C. 1897, c. 75 [hereinafter referred to as “the provincial
Act”]. The pertinent section reads:
21. The Company shall not sell, lease or otherwise dispose of or part with the
undertaking hereby authorised, or any part thereof, unless it shall have first obtained
the consent of its shareholders representing at least two-thirds in value of the sub-
scribed capital of the Company expressed by resolution in an annual or special
general meeting thereof called for such purpose, nor unless nor until all the terms,
conditions and considerations of such sale, lease or other disposal have been sub-
mitted to the Lieutenant-Governor in Council, duly approved, and the consent
thereof expressed by Order in Council.
’02Ibid. The federal Act in question is An Act Respecting the Vancouver, Victoria and Eastern
Railway and Navigation Company, S.C. 1898, c. 89 [hereinafter referred to as “the Dominion
Act”]. Its relevant provisions are:
1. In this Act the expression “the Company” means the body corporate and politic
heretofore created by the Act mentioned in the preamble under the name of the
Vancouver, Victoria and Eastern Railway and Navigation Company; and the works
which the Company by its said Act of incorporation is empowered to undertake
and operate are hereby declared to be works for the general advantage of Canada.
3. The Company may lease or sell its works, or any part thereof, to the Canadian
Pacific Railway Company, on such terms and conditions, and for such period as is
agreed upon between the directors of the said companies: Provided that the lease
or sale be sanctioned by the consent in writing of every shareholder of the Company,
and by the Governor in Council; or failing such consent of every shareholder, then
by two-thirds of the votes of the shareholders present or represented by proxy at a
special general meeting duly called for the purpose, and by the approval of the
Governor in Council, after notice of the proposed application therefor has been
published in the Canada Gazette, and in a newspaper published at Vancouver in
British Columbia for at least four weeks previous to the hearing of such application;
and a duplicate of the said lease or instrument of sale shall, within thirty days after
its execution, be deposited in the office of the Secretary of State of Canada, and
notice of such deposit shall be given by the Company in the Canada Gazette.
McGILL LAW JOURNAL
(Vol. 29
(an undertaking) “wholly” from provincial jurisdiction, then the legislative
juridsiction conferred by paragraph (c) would be much more extensive than
that conferred elsewhere in subsection 92(10). At the very least, it would
appear that “works” in paragraph (c) included “undertakings”. However,
on its facts, all that the case actually decided is that the Attorney General
of a province cannot take action against a company for the improper dis-
position of a declared work where the mechanism for such a disposition is
governed by a federal statute.
Indeed, Irving J. himself expressed the reasons for his judgment some-
what more narrowly in a later passage:
The point on which I decide this application is that the Provincial Leg-
islature, in passing the Crown Franchise Regulation Act, was dealing only with
matters within their own legislative powers.
I do not say that the Crown Franchise Regulation Act is ultra vires. It is
applicable to Provincial Crown franchises, but in my opinion it is inapplicable
to the defendant Company by reason of the Dominion legislation in 1898. I
think if the learned Judge had had this called to his attention he would have
taken the same view as I do, and in that event he would have refused to act
under the statute. 0 3
Now the “learned Judge” in question (Walkem J.) had been the judge
in first instance in an earlier injunction proceeding between these parties, 10 4
and Irving J. had sat on the appeal from Walkem J.’s order.’0 5 Irving J.
could have had no doubt, then, as to Walkem J.’s general familiarity with
the “Dominion legislation in 1898”. What Irving J. may have meant is that
the learned judge had not had section 3 of the Dominion Act recited to him
in full. In large measure, section 3 or the Dominion Act and section 21 of
the provincial Act covered the same matters, the sale or lease of the V.V. &
E.’s works.
It is certainly arguable, of course, that neither section 21 of the pro-
vincial Act nor section 3 of the Dominion Act actually covered the sale of
the V.V. & E.’s shares (as opposed to the sale of its works,) and it would
seem that the case could easily have been disposed of on this ground.
However, to the extent that both provisions were applicable, they must
be understood to have addressed the matter of the ownership of the com-
pany’s works, 106 and the better view would seem to be that the regulation
103Ibid., 342.
‘4yale Hotel, supra, note 99, 68.
05Ibid., 71.
0 6 0r to the identity of their operator, at the very least. The term “undertaking” in the
1
Provincial statute seems to have been used in its “company law” sense rather than its “con-
stitutional law” sense; that is to say, it refers both to the business of the company as a going
concern and to the company’s property.
19841
SUBSECTION 92(10)
of the ownership of a declared work is a matter falling with the exclusive
jurisdiction over the work.’ 07 On this basis, the Dominion Parliament had
exclusive jurisdiction to legislate with respect to the disposition of the V.V.
& E.’s declared works, even though it had no legislative jurisdiction over
the V.V. & E. (an undertaking) as such. Thus, section 3 of the Dominion
Act was validly enacted and served to repeal section 21 of the provincial
Act. 08 In permitting the Great Northern to acquire control of its works, the
V.V. & E. was committing a breach of a Dominion Act, and the Crown
Franchises Regulation Act, 1897 of British Columbia’ 0 9 was not applicable
to such a breach.
Even if it is argued that jurisdiction in this matter is concurrent, the
Dominion legislation would still serve to render the provincial provision
inoperative. Companies incorporated by special Acts possess only those
powers specifically conferred upon them by those Acts. Company actions
beyond those powers are ultra vires 10 In section 11 of the provincial Act
of incorporation the company had been given a general power “to purchase,
hold, receive or take land or other property and also to alienate, sell or
otherwise dispose of the same”. ” Section 2 of the Dominion Act provided
only that nothing in it “shall be construed in any way to affect or render
inoperative any of the provisions of the said Act of incorporation which
authorized the Company to undertake, own and operate the said works as
aforesaid.””l2 The general power to “alienate, sell or otherwise dispose of
same” was therefore not preserved. Expressio unius est exclusio alterius.
Thus, the only authority for the disposition of the company’s works is, once
again, section 3 of the Dominion Act, and, once again, the Crown Franchises
Regulation Act, 1897 of British Columbia could not apply to a breach of a
Dominion Act.
In summary, then, Irving J.’s general statement of the applicable prin-
ciple should be treated with the utmost caution. To use the words of a
prominent English jurist: “In the wider sense it was in no way necessary
for the judgment in the case.” Considered for what it actually decides, rather
than for its unnecessarily broad dictum, the Kettle River case is not incon-
sistent with the analysis offered in this essay.
’07Lajoie, supra, note 24, 97-108, takes the view that jurisdiction in this area is concurrent.
108If not explicitly, then by implication. See Driedger, supra, note 33, 226-36, and Dr Lu-
shington’s classic formulation in The India (1864) 33 L.J.P.M. & A. 193, [1861-73] All E.R.
Rep. 490 (Adm.).
109S.B.C. 1897, c. 9.
10 0n the doctrine of ultra vires in company law generally, see L. Gower, Modern Company
Law, 4th ed. (1979) 161 et seq.
IS.B.C. 1897, c. 75, sub-s. 11(d).
12S.C. 1898, c. 89, s. 2 [emphasis added].
REVUE DE DROIT DE McGILL
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2. Bourgoin
Ms. Lajoie also uses the Bourgoin 13 case to support her analysis of the
extent of the legislative jurisdiction created by paragraph (c). Strictly speak-
ing, however, the decision in Bourgoin did not involve the declaratory power
at all.
The relevant facts of the case may be briefly expressed. The works of
a Quebec-based railway company had been made the object of a declaration
under paragraph (c). The company subsequently attempted to transfer these
works to another corporate entity (using the Province of Quebec as an
intermediary) and then wind up its affairs. Ultimately, the transaction was
struck down by the Judicial Committee, but not because of the declaration.
To be sure, the relevant Dominion statute did indeed contain a declaration
pursuant to paragraph (c) in respect of the company’s then existing works,
but:
By the 5th section of the same statute it was enacted that the continuations of
the line thereby authorized should be deemed to be railways or a railway to
be constructed under the authority of a special Act passed by the Parliament
of Canada, and that the company should be deemed to be a company incor-
porated for the construction and working of such railways and railway…. .114
As the title of the statute recounts,” 15 the continuations “thereby au-
thorized” were to reach from Quebec into Ontario. Thus, the company had
been federally incorporated for the purposes of constructing and operating
an inter-provincial railway, and was authorized to do so by the same en-
actment. Federal jurisdiction over this incorporation and authorization therefore
derived from paragraph (a), not paragraph (C).”1 6
In the event, the company was either unable or unwilling to complete
these inter-provincial extensions to its line and apparently wished to free
itself from federal regulation. The transfer of the undertaking and its works
from federal to provincial jurisdiction was to be accomplished by a so-
phisticated transaction “between the company and the Government of Quebec
which is embodied in the notarial act or deed of the 16th of November,
’13Bourgoin v. La Companie du cheinin defer de Montreal (1880) 5 A.C. 381 (P.C.). The
Board comprised Sir James W. Colvile, Sir Barnes Peacock, Sir Montague E. Smith and Sir
Robert P. Collier. See Lajoie, supra, note 24, 47-8, 81, and 85-6.
114Tbid., 403.
1″5An Act to empower the Montreal Northern Colonization Railvay Company to extend its
line from Deep River to a point of intersection with the proposed Canadian Pacific Railway
and also to extend its line to Sault Ste. Marie, the Georgian Bay and Lake Superior, or to unite
its line with any line of Railvay extending to the points above mentioned, S.C. 1873, c. 82.
116 See Corporation of Toronto v. Bell Telephone Co. of Canada, supra, note 29.
1984]
SUBSECTION 92(10)
1875, and in Act 39 Vict. c. 2, of the Legislature of Quebec”. 17 Their Lord-
ships were of the view that the transaction as a whole could not be supported:
The combined effect, therefore, of the deed and of this statute, if the
transaction was valid, was to transfer a federal railway, with all its appurte-
nances, and all the property, liabilities, rights, and powers of the existing com-
pany to the Quebec Government, and, through it, to a company with a new
title and a different organization; to dissolve the old federal company, and to
substitute for it one which was to be governed by, and subject to, provincial
legislation.
It is contended on the part of the Appellants that this transaction was
invalid, and altogether inoperative to affect the obligation of the company.
They insist that, by the general law and by reason of the special legislation
which governed it, the company was incompetent thus to dissolve itself, to
abandon its undertaking, and to transfer that, and its own property, liabilities,
powers, and rights to another body, without the sanction of an Act of a com-
petent Legislature; and, further, that the Legislature of Quebec was incompetent
to give such sanction. This contention appears to their Lordships to be well
founded. 18
Insofar as the company’s corporate organization was concerned, their
Lordships held that these were matters within the exclusive legislative ju-
risdiction of the Parliament of Canada. The company having been validly
incorporated by an Act of the Parliament of Canada, the legislature of Quebec
naturally had no jurisdiction to effect its dissolution. As noted earlier, this
branch of the judgment in no way relied upon federal jurisdiction pursuant
to a declaration under paragraph (c).
The other ground on which the judgment [under appeal] proceeds, and which
has been chiefly insisted upon here, is more plausible. It is that the company
had power, under the second sub-section of the 7th section of the Railway Act,
1868, to “alienate, sell, and dispose of its lands;” that the transaction of 1875,
even if invalid as a whole, is severable, and that the company must be taken
to have sold by it their land to the Government of Quebec in the exercise of
that power.’ 19
Their Lordships held that the contract was not severable, and so the
purported sale, though it might otherwise have been good, could not be
allowed to stand in the particular circumstances of the case.’ 20 In short, the
transaction in Bourgoin was set aside on the basis of paragraph (a) and the
ordinary principles of contract law. Nothing in the case is relevant to a
consideration of federal jurisdiction pursuant to paragraph (c).
“17Bourgoin, supra, note 113, 398.
1sIbid., 402.
119lbid., 406-7.
‘2 Ibid., 407.
McGILL LAW JOURNAL
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IV. Intra-Provincial and Inter-Provincial
While it may be true that the courts and the commentators have not
always realized the importance of making a clear distinction between works
and undertakings (or between the jurisdiction over each), the distinction
between intra- and inter-provincial works or undertakings has long been an
important focus of attention.
Despite this, the cases in this area are, taken as a group, the most
unsatisfactory of any in Canadian constitutional law. No attempt will be
made here to reconcile all these cases on their own terms: the various dicta
are simply too confused, confusing and contradictory to be harmonized in
any global sense. However, it is possible to arrange the results of the major
cases, considered on their particular facts, into a coherent whole, and an
attempt will be made to do this.
A. Works
As a first step, a practical difference in the acquisition of jurisdiction
over works under paragraph (a) and under paragraph (c) should be noted.
The jurisdiction over works assigned in paragraph (a) is both automatic and
expansive. The Parliament of Canada need do nothing to acquire jurisdic-
tion over a work pursuant to paragraph (a). Once an inter-provincial work
comes into existence, jurisdiction over it is automatically vested in the
Parliament of Canada by virtue of subsections 92(10) and 91(29). Further-
more, any additions to the work, if they form part of it, also automatically
fall within federal jurisdiction as they are built.
In contrast, federal jurisdiction over paragraph (c) works is discretion-
ary and limited. Even if a work is, in fact, for the general advantage of
Canada, the Parliament of Canada acquires no jurisdiction over it until it
is declared to be so by that Parliament. Federal jurisdiction derives from
the declaration –
and its limits are the
limits found in the declaration itself. Thus, additions or extensions to the
declared work will come within Federal jurisdiction only if they come within
the terms of the declaration. It follows that where federal legislative authority
derives from paragraph (c), a single work may fall in part under federal
jurisdiction and in part under provincial jurisdiction.
and only from the declaration –
Which leads to a related point concerning the operation of paragraphs
(a) and (c). For constitutional purposes, all works must be classified as being
intra- or inter-provincial in range, and, of course, all works must come under
either provincial or federal jurisdiction. However, while these two groupings
often overlap, they are not completely congruent. Put another way, all inter-
provincial works come under federal jurisdiction, but not all works under
1984]
SUBSECTION 92(10)
federal jurisdiction are inter-provincial works. Similarly, all works under
provincial jurisdiction are intra-provincial works, but not all intra-pro-
vincial works come under provincial jurisdiction.
It is most important that these elementary points be kept in mind when
examining the cases in this area because there is a regrettable tendency in
some of the commentaries to focus on the “connection” question as if it
were invariably relevant to the question of jurisdiction. While this may well
be so with respect to paragraph (a), where paragraph (c) is concerned, the
question “is there one work or two?” is often irrelevant and always secondary.
1. Montreal Street Railway
The interaction among these various considerations is well illustrated
in the first major “connection” case, Montreal Street Railway.
There are in the city of Montreal and the adjacent township two so-called
railways. One of these is the.. .Park Railway, and the other the.. .Street Rail-
way. These railways being constructed on the island in the St. Lawrence on
which the city of Montreal stands are, of course, situate wholly within the
province of Quebec. They connect physically at several points both within and
near the limits of the city, and arrangements have been entered into between
the companies owning them by which the cars of each railway run over the
lines of the other, and passengers are conveyed from points on one system to
points on the other over the permanent way of both.’21
The Park Railway apparently provided a less convenient and more
expensive service to the residents of the Mount Royal Ward than it provided
to the residents of the town of Notre Dame de Grace, and a complaint to
that effect was filed with the Board of Railway Commissioners. The works
of the Park Railway had been the object of a paragraph (c) declaration. 22
Thus the Commissioners certainly had jurisdiction to regulate the use of
those works. However, the Commissioners not only ordered the Park Rail-
way to remove the discrimination in rates and services, but they also ordered
that the Street Railway should “enter into any agreement or agreements
that may be necessary to enable” the Park Railway to carry out the other
provisions of the order.123 The Street Railway successfully appealed against
’21Supra, note 12, 338.
’22An Act Respecting the Montreal Park and Island Railvay Company, S.C. 1894, c. 84. If
the lines of the Park Railway and the lines of the Street Railway formed a single work at the
time, it may be that the declaration was invalid. It is certainly arguable that Parliament’s
declaratory power must be exercised over a work as a whole, and cannot be exercised against
only a portion of a work.
123(1910) 43 S.C.R. 197.
REVUE DE DROIT DE McGILL
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this order to the Supreme Court of Canada and succeeded again before the
Judicial Committee. The question of law to be considered was:
Whether upon the true construction of sections 91 and 92 of the British North
American Act, and of section 8 of the Railway Act of Canada, the Montreal
Street Railway is subject in respect of its through traffic with the Montreal Park
and Island Railway Company, to the jurisdiction of the Board of the Railway
Commissioners of Canada.124
Now there can be little doubt that the lines of the Park Railway and
the lines of the Street Railway formed a single work. Although the two lines
were separately owned, they were physically connected and, as the Judicial
Committee’s opinion makes clear, to a significant degree the two lines were
operated as a single unit: “the cars of each railway run over the lines of
other and passengers are conveyed from points on one system to points on
the other over the permanent way of both”. However, the “connection ques-
tion” was never addressed by the Judicial Committee, let alone decided,
because it was irrelevant to the resolution of the legal issue in dispute.
Insofar as federal jurisdiction pursuant to paragraph (a) was concerned,
it made no difference at all whether the lines of the Park Railway and the
lines of the Street Railway formed one work or two. Even if the two lines
did form a single work, that work remained an intra-provincial one, because
neither line ran off the island of Montreal. It must be remembered that
paragraph (a) applies to works connecting a “Province with any other or
others of the Provinces, or extending beyond the limits of the Province”.
The fact that a work connects with or is part of a work which comes under
federal jurisdiction does not, of itself, serve to bring the work within this
description. Paragraph (a) applies only to inter-provincial works. All intra-
provincial works, whether under federal jurisdiction or not, are beyond its
scope.
Insofar as paragraph (c) was concerned, the declaration had been made
only with respect to the works of the Park Railway. Even if the two lines
formed a single work, the declaration, by its terms, applied only to that part
of the work belonging to the Park Railway. Thus, there could be no federal
jurisdiction over the lines of the Street Railway on the basis of the decla-
ration under paragraph (c).
After dismissing the general power and the trade and commerce power
as possible bases for federal jurisdiction in the matter, the Judicial Com-
mittee neatly expressed the above conclusions:
It follows, therefore, that the Act and Order if justified at all must be
justified on the ground that they are necessarily incidental to the exercise by
’24Supra, note 12, 340.
1984]
SUBSECTION 92(10)
the Dominion Parliament of the powers conferred upon it by the enumerated
heads of s. 91. Well, the only one of the heads enumerated in s. 91 dealing
expressly or impliedly with railways is that which is interpolated by the transfer
into it of sub-heads (a), (b) and (c) of sub-s. 10 of s. 92. Lines such as the Street
Railway are not amongst these.’25
The Judicial Committee recognized that traffic passed freely between
the two lines, but quite properly rejected the suggestion that such an inter-
change should, of itself, be sufficient to give the Parliament of Canada ju-
risdiction “to exercise control over the ‘through’ traffic of such a purely local
thing as a provincial railway properly so called, if only it be connected with
a federal railway”. 26 Insofar as the through traffic “is carried on over the
federal line, it can be controlled by the Parliament of Canada, [and] so far
as it is carried over a non-federal provincial line it can be controlled by the
provincial Legislature”. 27
It is clear that the result in Montreal Street Railway would have been
correct even if one were to assume that the two lines were being run by a
single undertaking. Because the undertaking would have been intra-pro-
vincial in range, it would not have come under federal jurisdiction pursuant
to paragraph (a), and federal jurisdiction over the undertaking pursuant to
paragraph (c) would have been strictly confined to its activities in respect
of the declared work only. Federal jurisdiction under paragraph (c) is ju-
risdiction over works: the undertakings which own, operate or make use of
declared works are not themselves objects of federal jurisdiction. Thus,
federal control over such undertakings does not extend to their operation
of undeclared works. This is precisely the point taken up by the Supreme
Court of Canada in the B.C. Electric Railway case. 128
2. B.C. Electric Railway
For the purposes of this essay, the somewhat complicated relationships
among the various parties need not be explored in detail. Suffice it to say
that the British Columbia Electric Railway Company (“B.C.E.R.”) operated
a number of railways in the Province, all by electric (as opposed to steam)
locomotion. Among these were the Central Park line and the Lulu Island
line. The Central Park line was owned by the B.C.E.R., but the Lulu Island
line was not. It was owned by the Vancouver and Lulu Island Railway
Company (“V. & L.I.”), a provincially-incorporated company which appears
1251bid., 344.
126Ibid., 344-5.
127Ibid., 346.
128British Columbia Electric Railway v. Canadian National Railway [ 1932] S.C.R. 161; rev’g
(sub nom. North Fraser Harbour Commissioners v. British Columbia Electric Railway) (1929)
35 C.R.C. 384 (Bd Ry Comm’rs). The summary of facts that follows is drawn from both reports.
McGILL LAW JOURNAL
[Vol. 29
to have become a wholly-owned subsidiary of the C.P.R. In 1901, the V. &
L.I. leased its lines to the C.P.R. (for 999 years), and shortly thereafter, all
of the V. & L.I.’s works were declared to be for the general advantage of
Canada. The declaration thus covered only the Lulu Island Line, and not
the Central Park Line. Some years after the declaration, the C.P.R. engaged
the B.C.E.R. to operate the Lulu Island Line on the C.P.R.’s behalf.
The Central Park line (owned and operated by the B.C.E.R.) connected
at one end with the tracks of the C.N.R. and, at the other, with the tracks
of the Lulu Island line (operated but not owned by the B.C.E.R.). At its
other end, the Lulu Island line connected with the tracks of the C.P.R.
A number of local businessmen successfully petitioned the Board of
Railway Commissioners for an order directing that the C.N.R. and the
B.C.E.R. publish and file “between stations on the Vancouver and Lulu
Island Railway and points on the Canadian National Railways via direct
“connection between the companies [i.e., via the Central Park line], joint
rates on the same basis as those now published between said Vancouver
and Lulu Island points and stations on the Canadian Pacific Railway”. 129
On appeal to the Supreme Court of Canada it was held that the Commis-
sioners did not have jurisdiction to issue the order.
As noted earlier, the regulation of tolls is a matter falling concurrently
within the jurisdiction over a work and the jurisdiction over an undertaking.
Therefore, the order would have been good if either the work or the un-
dertaking had been within Federal jurisdiction. Both points were taken up
by the court, which first rejected the argument that all of the B.C.E.R.’s
operations fell under Federal jurisdiction merely because a part of its op-
erations involved the use of a declared work:
It does not follow that the Board acquired jurisdiction over.. .[the whole
of the B.C.E.R.’s operations].. .by virtue merely of its operation also of another
line of railway which is under Dominion jurisdiction. There is nothing ab-
normal about its being under provincial jurisdiction in connection with its
operation of the one, and under Dominion jurisdiction in connection with its
operation of the other. .. 130
It is, however, urged that, by virtue of the British North America Act,
section 92, head 10 (a),jurisdiction is conferred on the Board over this company
in connection with its operation of the provincial or Central Park line, or part
of it, because that part forms a connecting link between two lines of railway
admittedly under the jurisdiction of the Board, one of which extends beyond
the limits to the province, and because it handles traffic over its provincial lines
to and from lines of railway under Dominion jurisdiction, extending beyond
129North Fraser Harbour Commissioners, ibid., 391-2.
t30Supra, note 128, 167.
1984]
SUBSECTION 92(10)
1
the limits of the province, pursuant to agreements with companies owning and
operating those lines under Dominion jurisdiction.13
Again, there can be little doubt that the Central Park line and the Lulu
Island line formed a single work. Although separately owned, the two lines
were physically connected and were operated as a unit by the same under-
taking, using rolling stock owned by that undertaking. However, once again,
the resulting work was not therefore elevated into the position of a paragraph
(a) work. Insofar as the Central Line connected with (or was part of) the
Lulu Island line, it merely connected with (or was part of) a railway which
“was itself nothing more than a local line which had been declared to be a
work for the general advantage of Canada”.’ 32
The only possibility for the application of paragraph (a) to the Central
Park line rested on its physical connection with the C.N.R. Apparently
relying on Montreal Street Railway and Luscar Collieries, but without fully
articulating its reasons, the court rejected this line of argument. 133 The rel-
evance of the Montreal Street Railway holding to a consideration of federal
jurisdiction pursuant to paragraph (a) is not entirely clear, because neither
of the works in the earlier case was an inter-provincial work. However, the
decision in Luscar Collieries is very much on point.
3. Luscar Collieries
Luscar Collieries, Limited (“Luscar”) owned a short stretch of railway
tracks in Alberta (the “Luscar Branch”). The Luscar Branch had been built
by Luscar but it was operated by the C.N.R. Under the terms of the operating
agreement the C.N.R. was to grant Luscar rebates on the coal Luscar shipped
over the C.N.R.’s lines, and when the total of the rebates granted had fully
13’Ibid., 167-8 [emphasis added].
32Ballem, Constitutional Validity of Provincial Oil and Gas Legislation (1963) 41 Can. Bar
Rev. 199, 223. McNairn is apparently of the view that the Lulu Island line could also be
considered as an inter-provincial work. “However federal jurisdiction over the declared railway
could perhaps also be based on its treatment as an interprovincial railway in view of a number
of factors; its connexion with the C.P.R. trunk system, albeit that an electric system-steam
system interchange has its functional limitations, its ownership by a wholly owned subsidiary
of the C.P.R., and its 999 year lease to the C.P.R.”. Supra, note 8, 384n. McNairn fails to
mention the strongest ground for this conclusion, which is that the line seems to have been
one of those operated for some years (either prior to or shortly after the declaration, and
apparently under steam), by the C.P.R. “directly, as part of its railway system, until these were
taken over for electric operation by the B.C.E.R.”. British Columbia Electric Railway, supra,
note 128, 164; and see the Commissioners’ report, supra, note 128, 35 C.R.C. 384, 386. If the
declaration was not bad from its inception (as it would be if the joint operation by the C.P.R.
occurred prior to it), then the better view would seem to be that the declaration served to fix,
for constitutional pruposes, the local character of the work so that it could not thereafter be
assimilated into an inter-provincial work.
133Supra, note 128, 169-70.
REVUE DE DROIT DE McGILL
[Vol. 29
compensated Luscar for the construction costs of the Luscar Branch, the
line was to become the property of the C.N.R. The Luscar Branch connected
to the tracks of the Mountain Park Railway which, in turn, connected to
the C.N.R.’s tracks. The owners of the Mountain Park Railway had con-
cluded an identical operating agreement with the C.N.R.
Before the conditions for the transfer of the Luscar branch had been
met, the owner of a nearby coal lease applied to the Board of Railway
Commissioners for an order: (a) “granting him running rights over the [Lus-
car Branch].. .and (b)… requiring the Canadian National Railways to grant
permission for the construction of a spur track” connecting his coal lease
and the Luscar Branch.134 The Commissioners decided that they had juris-
diction to issue the order applied for, 35 and Luscar was unsuccessful in its
appeal to the Supreme Court on this issue. 136
When the dispute came before the Judicial Committee, Lord Warring-
ton of Clyffe expressed their Lordships’ reasons for concluding that the
Commissioners did indeed have jurisdiction to issue the order in question. 137
Their Lordships agree with the opinion of Duff J. that the Mountain Park
Railway and the Luscar Branch are, under the circumstances hereinbefore set
forth, a part of a continuous system of railways operated together by the Canadian
National Railway Company, and connecting the Province of Alberta with other
Provinces of the Dominion. It is, in their view, impossible to hold as to any
section of that system which does not reach the boundary of a Province that
it does not connect that Province with another. If it connects with a line which
itself connects with one in another Province, then it would be a link in the
chain of connection, and would properly be said to connect the Province in
which it is situated with other Provinces.
In the present case, having regard to the way in which the railway is
operated, their Lordships are of opinion that it is in fact a railway connecting
the Province of Alberta with others of the Provinces, and therefore falls within
s. 92, head 10 (a), of the Act of 1867. There is a continuous connection by
railway between the point of the Luscar Branch farthest from its junction with
the Mountain Park Branch and parts of Canada outside the Province of Alberta.
If under the agreements hereinbefore mentioned the Canadian National Rail-
way Company should cease to operate the Luscar Branch, the question whether
134McDonald v. Luscar Collieries, Ltd (1924) 31 C.R.C. 266 (Bd Ry Comm’rs).
135The Commissioners took jurisdiction originally on the basis of the Railway Act, 1919,
S.C. 1919, c. 68, sub-s. 6(c). Ibid., 267.
136The Supreme Court divided on the validity of the purported declaration, but sustained
the Commissioner’s jurisdiction on the basis of paragraph (a). The Judicial Committee point-
edly refused to consider the status of the “open-ended” declaration in the Railway Act, 1919,
S.C. 1919, c. 68, s. 6, and based its decision entirely on paragraph (a). Therefore, the paragraph
(c) arguments will not be addressed here. Luscar Collieries, supra, note 76, 932-3.
137The Board comprised Viscount Haldane, Viscount Sumner, Lord Wrenbury, Lord Darling
and Lord Warrington of Clyffe.
19841
SUBSECTION 92(10)
under such altered circumstances the railway ceases to be within s. 92, head
10 (a), may have to be determined, but that question does not now arise. 138
4. A Synthesis
As noted earlier, all the various dicta from these cases cannot possibly
be harmonized. However, it is possible to extract some coherent principles
from their results, if each is considered carefully in light of its particular
facts.
Mr Ballem has argued that both Montreal Street Railway and B.C.
Electric Railway can be distinguished from cases such as Luscar Collieries
(which involve paragraph (a) works) because the two cases first mentioned
“involved connections [only] with railway systems that normally would not
have been under federal jurisdiction”; 139 that is to say, “systems” subject
to Federal jurisdiction pursuant to a declaration under paragraph (c). This
is unquestionably true so far as Montreal Street Railway is concerned but
in B. C. Electric Railway there was also a connection with the C.N.R.’s inter-
provincial line. As the passages quoted above from the B. C. Electric Railway
judgment make quite clear, the Supreme Court was well aware that the
Central Park line connected with two “Federal” railway lines “one of which
extends beyond the limits of the province”‘140 and was therefore subject to
Federal jurisdiction under paragraph (a).
If Luscar Collieries and B. C. Electric Railway cannot be distinguished
as Mr Ballem has suggested, does it follow that the holdings in these two
cases are contradictory or inconsistent, as Mr McNairn seems to have implied:
Common operation is given prominence in Luscar yet in the B.C. Electric
Ry. case the British Columbia company operated the mile section of its line
in common with the connecting line that had been declared to be for the general
advantage of Canada. To rationalize the two cases one must either attribute
greater significance to other unemphasized features of Luscar, such as the fact
that the Canadian National Railway had a potential proprietary interest in the
lines themselves on payment of certain rebates and perhaps, additionally, high-
light on the other side the limitations of the connexion between electrical and
steam systems.’ 4′
As the discussion above on the Montreal Street Railway decision sug-
gests, common operation of the Central Park line (“the mile section”) and
the Lulu Island line (“the connecting line”) could have no possible bearing
on the application of paragraph (a) to the case. Neither line was inter-
provincial in range. If the Central Park line and the C.N.R.’s line had been
’38Supra, note 76, 932-3.
’39Ballem, supra, note 132, 224.
140Supra, note 128, 168.
‘tMcNairn, supra, note 8, 386.
McGILL LAW JOURNAL
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under common operation, it would indeed be difficult to rationalize the two
judgments, but this was not, of course, the situation before the court in B. C.
Electric Railway –
as the court itself was careful to stress. 142
Thus, Luscar Collieries and B.C. Electric Railway can properly be ra-
tionalized in the following manner: the test for determining whether a “phys-
ical thing” is a distinct local work or is an integral part of an inter-provincial
work is the presence of both:
1. physical unity; and
2. unity of operation.
In Luscar Collieries, both elements were present. In B.C. Electric Rail-
way, there was no common operation of the local and inter-provincial works.
In that case, common operation extended only over the two local works,
one of which, as it happened, fell under federal jurisdiction.
Although there is no explicit authority on point, it is submitted that
there is one additional relevent factor: – unity of ownership. This assertion
may be derived from first principles and its value may be tested by con-
sidering a hypothetical variation on the facts found in Luscar Collieries.
Suppose that the C.N.R. had in fact acquired the ownership of the Luscar
Branch and the Mountain Park Railway, but subsequently, as the coal fields
they serviced became exhausted, had decided to cease operating the lines
itself and had leased the lines to a local operator to use for short-haul traffic
in the area.
It might be said with justice that the work thus put under local operation
no longer served to connect the province with any others, but could it rightly
be said that the work no longer extended beyond the limits of the province.
The phrase “connecting the Province with any other or others of the Prov-
inces” undoubtedly has a functional connotation, and Luscar Collieries and
B.C. Electric Railway are therefore certainly correct in insisting that for a
work to “connect”, there must be both physical unity and unity of operation
(sometimes termed “functional unity” or “common operation”). However,
the phrase “extending beyond the limits of a Province” has no such con-
notation and so it seems inappropriate to insist that common operation
should be one of the criteria for determining whether a particular “physical
thing” is a distinct local work or is an integral part of an inter-provincial
work that extends beyond the limits of a province. To do so is, in effect, to
insist that jurisdiction over a work could flip back and forth between the
Parliament of Canada and the provincial legislatures, depending on the
range of the use to which the work is being put, even though the physical
range of the work remains unchanged.
142Supra, note 128, 168-70.
19841
SUBSECTION 92(10)
Surely, insofar as works are concerned, it would be thoroughly unsound
to elevate the analysis of function to such a controlling position in the
allocation of jurisdiction under subsection 92(10). In the Radio case, Vis-
count Dunedin suggested that the presence of a functional connection should
in and of itself be permitted to establish federal jurisdiction over a work in
the absence of a physical connection. If it is right to reject this suggestion,
then it seems rather eccentric to accept that the absence of a functional
connection should in and of itself be permitted to destroy federal jurisdiction
over a work in the presence of a physical connection.
In sum, it is suggested that the proper test for determining whether a
given “physical thing” is a distinct local work or is an integral part of an
inter-provincial work is the presence of both:
1. physical unity; and either
2. (a) unity of operation, or
(b) unity of ownership.
“Extending” works will have physical unity and unity of ownership;
“connecting” works, on the other hand, will have physical unity and unity
of operation. Now it may be that the indicia of “common operation” have
yet to be laid out in any detail. Nonetheless, the general outlines of the
concept seem clear enough. The test is a simple, functional one: are the
physically connected works operated as a unit? The similarity between an
investigation of this sort and an examination of the relationship between
intra- and inter-provincial undertakings should be evident.
B. Undertakings
The task of distinguishing between intra- and inter-provincial under-
takings is, in relative terms, not at all problematic. Federal jurisdiction over
undertakings, as such, can arise only pursuant to paragraphs (a) and (b).
Undertakings themselves can never be the objects of federal jurisdiction
pursuant to a declaration under paragraph (c). Thus, the jurisdictional ques-
tion is primarily the question, “is there one undertaking or two?” and the
dominant consideration will be the existence of a functional connection.
The courts need determine only if the activity in question is itself inter-
provincial in range; or, if it is intra-provincial in range, whether or not it
is functionally connected to some inter-provincial undertaking in such a
way as to form part of that undertaking.
On the basis of Corporation of Toronto v. Bell Telephone Company of
Canada and Winner it seems clear that where a single person (natural or
artificial) is engaged in one activity –
such as the carriage of passengers by
bus or the transmission of telephone signals –
then the “undertaking in
REVUE DE DROIT DE McGILL
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question is in fact one and indivisible.. .[and] the fact that it might be carried
on otherwise than it is.. .[does not make] it or any part of it any the less
an interconnecting undertaking”. 143 Intra- and inter-provincial manifesta-
tions of the same activity should not be considered as “a collection of
separate and distinct businesses”. 144 In effect, where there is only one ac-
tivity, the fact that intra- and inter-provincial aspects of the activity are
carried on by a single person is taken as conclusive evidence that the two
aspects are functionally connected so that there is only one undertaking.
Naturally, this is not to say that all the activities carried on by a single
person must necessarily be considered to be parts of a single undertaking,
as Lord Porter made clear on behalf of the Judicial Committee in the Em-
press Hotel case: “A company may be authorized to carry on, and may in
fact carry on, more than one undertaking”. 145 Where there is more than
one activity, the fact that these activities are carried on by a single person
may be suggestive, but it is certainly not conclusive.
Moreover, the fact that the two activities may be complementary “does
not prevent them from being separate businesses or undertakings”.146 It
may be that if the local activity is conducted “solely or even principally”‘ 147
as an adjunct to the inter-provincial undertaking, the local activity could
be considered as forming a part of that inter-provincial undertaking. How-
ever, it seems that the true test centres on the degree to which the local
activity is necessary to the functioning of the inter-provincial undertaking.
In the Stevedores reference, for example, it was said that the loading
and unloading of ships was “part and parcel”‘ 48 of a shipping undertaking,
and that the functioning of an inter-provincial shipping undertaking was
“entirely dependent” 149 on the stevedoring activity. Now there is, of course,
a clear functional distinction between the loading and unloading of cargo
at a terminal and the transportation of that cargo to and from such a ter-
minal. However, the transportation activity is completely dependent upon
the stevedoring activity, and because of that functional dependence, the
stevedoring activity could properly be considered an integral part of the
inter-provincial transportation undertaking, despite the fact that the activity
was different in character and purely intra-provincial in range.
143Winner, supra, note 6, 581.
’44Corporation of Toronto v. Bell Telephone, supra, note 29, 59.
145Canadian PacificRailway v. A.G. British Columbia [1950] A.C. 122, 143, [1950] 1 D.L.R.
721, [1950] 1 W.W.R. 220 (P.C.). The Board comprised Lord Porter, Lord Greene, Lord Morton
of Henryton, Lord Reid and Rinfret C.J.C.
1461bid., 144.
147Ibid.
148Supra, note 72, 537, per Kerwin C.J.
149Ibid., 534, per Kerwin C.J.
1984]
SUBSECTION 92(10)
In Northern Telecom (1983),150 there was again a marked functional
distinction between the intra-provincial activity (installation of telephone
switching and transmission equipment) and the inter-provincial activity
(provision of telephone service). Again, though, the Supreme Court held
that there was only one undertaking, because the intra-provincial activity
was an “essential part of the operations process”‘ 5’ of the inter-provincial
activity and “vital, in itself, to the continuous operation” 52 of the undertaking.
The key point here is that it must be the inter-provincial undertaking
which is dependent upon the otherwise intra-provincial activity. An intra-
provincial undertaking will not be considered as forming part of an inter-
provincial undertaking where it is the intra-provincial undertaking that is
the dependent activity. In the Cannet case, 53 for example, an otherwise
local freight-forwarding company was entirely dependent on the C.N.R. for
the transportation of shipments from the freight-forwarder’s terminals in
Ontario to destinations in other provinces. The Federal Court of Appeal
was quite clear “that the only interprovincial undertaking involved in this
case is that of the C.N.R. and that a shipper on that railway from one
province to another does not, by such activity, become the operator of an
inter-provincial undertaking”. S54
As a final note: if the GO Train case is rightly decided, then it may be
that where the local activity and the inter-provincial activity are the same,
and both are carried on using the same inter-provincial work, then the two
activities should be considered as forming parts of a single undertaking,
even though they are carried on by entirely different persons. This result
seems difficult, albeit not impossible, to reconcile with the cases noted above
(especially Winner), and it is respectfully submitted that insofar as it con-
cerned the Parliament of Canada’s jurisdiction over the Commuter Service
as an undertaking (that is to say, with respect to Question 2) the case was
wrongly decided.
Conclusion
The “undertaking” cases demonstrate how easily complicated fact pat-
terns can be analyzed if the basic concepts used in subsection 92(10) are
clearly understood. By reading “works and undertakings” in paragraph (a)
ejusdem generis, it becomes clear that only transportation and communi-
cation undertakings are within the scope of the provision. From this it
n5ONorthern Telecom Canada Ltd v. Communication Workers of Canada [1983] 1 S.C.R.
733, (1983) 147 D.L.R. (3d) 1, (1983) 48 N.R. 161.
1’Ibid., 773, per Dickson J.
’52Ibid., 767, per Estey J.
’53Re Cannet Freight Cartage Inc. [1976] 1 EC. 174, (1975) 60 D.L.R. (3d) 473 (C.A.).
1541bid., 178 (per Jackett C.J.), 181 (per Heald J.).
McGILL LAW JOURNAL
[Vol. 29
follows that undertakings which merely “extend” are not addressed in par-
agraph (a). Transportation and communication undertakings obviously serve
to transport or communicate something from one place to the next. They
“connect” different locations in a functional sense. The problem of distin-
guishing intra- from inter-provincial undertakings is thus a problem of func-
tional analysis.
Where the functioning of an inter-provincial activity is dependent upon
the operation of an intra-provincial activity, the courts have recognized that
there is only one undertaking, regardless of how many distinct persons are
involved in its operation. By the same token, where this dependent rela-
tionship does not exist, the courts have properly refused to accept that there
must be one undertaking merely because there is only one “undertaker”.
Of course, where the same activity is carried on both locally and inter-
provincially in an integrated manner by one operator, there are sound policy
reasons for placing these activities under a single jurisdiction. There being
no powerful theoretical objection to such a treatment, the courts have quite
sensibly taken this course and held that only one undertaking exists.
There has been a tendency, however, to use functional analysis to re-
solve problems involving subsection 92(10) works, and this is highly in-
appropriate. Obviously, physical connection cannot be the sole focus of
analysis where paragraph (a) works are concerned: few driveways in the
nation would escape federal regulation on that basis. Moreover, given that
the provinces are, strictly speaking, already firmly connected to one another,
in the sense that they physically join at their borders (with the exception,
of course, of Prince Edward Island), it seems clear that connecting works
must provide more than a purely physical link. However, physical connec-
tion is more than a “mere fact”.155 Works are, after all, physical things and
their physical relationship to one another must surely be the most important
fact to be considered in determining their constitutional status.
It is submitted, then, that physical unity should raise a presumption in
favour of the application of paragraph (a). The presumption may be rebutted
by demonstrating that the physically connected works do not have unity of
operation or unity of ownership. Where there is no common operation, then
for constitutional purposes there will be -no connecting work; and where
there is no common ownership, for constitutional purposes there will be no
extending work.
Here, as in any analysis pursuant to subsection 92(10), it is vitally
important to realize that there is a significant conceptual distinction between
55This unfortunate phrase seems to have surfaced for the first time in British Cohmbia
Electric Railway, supra, note 128, 170.
1984]
SUBSECTION 92(10)
607
works and undertakings, and that jurisdiction over the one does not nec-
essarily give rise to jurisdiction over the other –
even though legislative
jurisdiction over one may give rise to extensive regulatory control over the
other.
Once the conceptual distinctions that subsection 92(10) relies upon are
understood, the proper application of its provisions is not problematic.
These distinctions are sometimes subtle, but they are clear; and unless they
are thoroughly understood and rigourously applied, inconsistency and con-
fusion will be the rule in both the theory and practice of constitutional law
in this area.
