Tuesday, November 17, 2015

Paramountcy of Federal Legislation

Alberta (Attorney General) v. Moloney, 2015 SCC 51:

[18]                          A conflict is said to arise in one of two situations, which form the two branches of the paramountcy test: (1) there is an operational conflict because it is impossible to comply with both laws, or (2) although it is possible to comply with both laws, the operation of the provincial law frustrates the purpose of the federal enactment.

[19]                          What is considered to be the first branch of the test was described as follows in Multiple Access, the seminal decision of the Court on this issue:

In principle, there would seem to be no good reasons to speak of paramountcy and preclusion except where there is actual conflict in operation as where one enactment says "yes" and the other says "no"; "the same citizens are being told to do inconsistent things"; compliance with one is defiance of the other. [Emphasis added; p. 191.]

In Western Bank, Binnie and LeBel JJ. referred to this passage as "the fundamental test for determining whether there is sufficient incompatibility to trigger the application of the doctrine of federal paramountcy" (para. 71). Under that test, the question is whether there is an actual conflict in operation, that is, whether both laws "can operate side by side without conflict" (Marine Services, at para. 76) or whether both "laws can apply concurrently, and citizens can comply with either of them without violating the other": Western Bank, at para. 72; see also Sun Indalex Finance, LLC v. United Steelworkers, 2013 SCC 6, [2013] 1 S.C.R. 271, at para. 60; Marine Services, at para. 68; British Columbia (Attorney General) v. Lafarge Canada Inc., 2007 SCC 23, [2007] 2 S.C.R. 86, at paras. 77 and 81-82; Garland v. Consumers' Gas Co., 2004 SCC 25, [2004] 1 S.C.R. 629, at para. 53; Smith v. The Queen, [1960] S.C.R. 776, at p. 800, per Martland J.  

... .

[25]                          If there is no conflict under the first branch of the test, one may still be found under the second branch. In Bank of Montreal v. Hall, [1990] 1 S.C.R. 121, the Court formulated what is now considered to be the second branch of the test.  It framed the question as being "whether operation of the provincial Act is compatible with the federal legislative purpose" (p. 155).  In other words, the effect of the provincial law may frustrate the purpose of the federal law, even though it does "not entail a direct violation of the federal law's provisions": Western Bank, at para. 73.

[26]                          That said, the case law assists in identifying typical situations where overlapping legislation will not lead to a conflict.  For instance, duplicative federal and provincial provisions will generally not conflict: Bank of Montreal v. Marcotte, 2014 SCC 55, [2014] 2 S.C.R. 725, at para. 80; Western Bank, at para. 72; Multiple Access, at p. 190; Hall, at p. 151. Nor will a conflict arise where a provincial law is more restrictive than a federal law:  Lemare Lake, at para. 25; Marine Services, at paras. 76 and 84; Quebec (Attorney General) v. Canadian Owners and Pilots Association, 2010 SCC 39, [2010] 2 S.C.R. 536 ("COPA"), at paras. 67 and 74; Western Bank, at para. 103; Rothmans, at paras. 18 ff.;Spraytech, at para. 35; Irwin Toy Ltd. v. Quebec (Attorney General), [1989] 1 S.C.R. 927, at p. 964.  The application of a more restrictive provincial law may, however, frustrate the federal purpose if the federal law, instead of being merely permissive, provides for a positive entitlement: Quebec (Attorney General) v. Canada (Human Resources and Social Development), 2011 SCC 60, [2011] 3 S.C.R. 635 ("HRSD"), at paras. 32-33 and 36; Lafarge, at paras. 84-85; Mangat, at para. 72; Hall, at p. 153.  As will become evident from the discussion below, this appeal involves two laws that directly contradict each other, rather than a provincial law which does not fully contradict the federal one, but is only more restrictive than it: see M & D FarmClarke v. Clarke, [1990] 2 S.C.R. 795. 

[27]                          Be it under the first or the second branch, the burden of proof rests on the party alleging the conflict.  Discharging that burden is not an easy task, and the standard is always high.  In keeping with co-operative federalism, the doctrine of paramountcy is applied with restraint.  It is presumed that Parliament intends its laws to co-exist with provincial laws.  Absent a genuine inconsistency, courts will favour an interpretation of the federal legislation that allows the concurrent operation of both laws: Western Bank, at paras. 74-75, citing Attorney General of Canada v. Law Society of British Columbia, [1982] 2 S.C.R. 307 ("Law Society of B.C."), at p. 356; see also Rothmans, at para. 21; O'Grady v. Sparling, [1960] S.C.R. 804, at pp. 811 and 820.  Conflict must be defined narrowly, so that each level of government may act as freely as possible within its respective sphere of authority: Husky Oil, at para. 162, per Iacobucci J. (dissenting, but not on this particular point), referring to Deloitte Haskins and Sells Ltd. v. Workers' Compensation Board, [1985] 1 S.C.R. 785, at pp. 807-8, per Wilson J. 

[28]                          This is not to say, however, that courts must refrain from applying the doctrine where the two laws are genuinely inconsistent.  In the assessment of such inconsistency for the purposes of paramountcy, a provincial intention to interfere with the federal jurisdiction is neither necessary nor sufficient.  In fact, an intention to intrude may call into question the independent validity of the provincial law: Husky Oil, at paras. 44-45.  The focus of the paramountcy analysis is instead on the effect of the provincial law, rather than its purpose:

. . . there need not be any provincial intention to intrude into the exclusive federal sphere of bankruptcy . . . in order to render the provincial law inapplicable. It is sufficient that the effect of provincial legislation is to do so.  [Emphasis added.]

(Husky Oil, at para. 39)

Assessing the effect of the provincial law requires looking at the substance of the law, rather than its form. The province cannot do indirectly what it is precluded from doing directly: Husky Oil, at para. 39.

[29]                          In sum, if the operation of the provincial law has the effect of making it impossible to comply with the federal law, or if it is technically possible to comply with both laws, but the operation of the provincial law still has the effect of frustrating Parliament's purpose, there is a conflict.  Such a conflict results in the provincial law being inoperative, but only to the extent of the conflict with the federal law: Western Bank, at para. 69; Rothmans, at para. 11; Mangat, at para. 74.  In practice, this means that the provincial law remains valid, but will be read down so as to not conflict with the federal law, though only for as long as the conflict exists: Husky Oil, at para. 81; E. Colvin, "Constitutional Law — Paramountcy — Duplication and Express Contradiction — Multiple Access Ltd. v. McCutcheon" (1983), 17 U.B.C.L. Rev. 347, at p. 348.

Of the Law Societies of Upper Canada and Nunavut 

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