Trade and Commerce
Encyclopedia
In Canadian constitutional law, section 91(2) of the Constitution Act, 1867
provides the federal government with the authority to legislate on matters related to the regulation of Trade and Commerce. This power is generally balanced against the provincial power over property and civil rights
under section 92(13) as well as "matters of a local nature" under section 92(16).
The trade and commerce clause was first examined in Citizen's Insurance Co. v. Parsons
(1881). The Privy Council identified two branches of the clause. A matter could fall under the inter-provincial branch if it concerned "international and interprovincial trade", or in the alternative, it could fall under the general trade branch if it concerned the "general regulation of trade affecting the Dominion as a whole".
, but the power was still read strictly. In R. v. Eastern Terminal Elevator Co.
(1925), a federal law regulating trade of provincially produced grain destined entirely for export was found not to be within the meaning of inter-provincial trade. Similar marketing schemes were held to be invalid on the same basis
Many federal laws were struck down on the basis that it regulated transactions that took place solely within the province.
With the abolishment of appeals to the Privy Council the interpretation of the power became broader. In Caloil Inc. v. Canada (1971) the Court upheld a law prohibiting the movement of imported oil as a form of regulating inter-provincial trade.
The most significant decision was the Reference re Agricultural Products Marketing Act
(1978) where the Supreme Court upheld a federal egg marketing scheme that imposed quotas of different provinces. This was a particularly broad interpretation of inter-provincial trade as it included even egg producers who did not export their products.
The Court has also considered the effect of provincial law on the trade and commerce power. In Carnation Co. v. Quebec Agricultural Marketing Board
, the Court held that provincial regulations that had an incidental effect on inter-provincial trade was valid. However, if the provincial scheme limits the free flow of trade between provinces than it will be struck down.
. The Court listed five indicia of a valid law under the general trade branch. In this case it was found that the inquiry must consider whether the law was part of a regulatory scheme, whether there was an agency to oversee the scheme, whether the matter concerned trade as a whole, whether the provinces could have been incapable of enacting such a scheme, and whether the failure of a province to participate would jeopardize the scheme.
The regulation of general trade must be broad and sweeping, and cannot single out a particular trade or industry. In Labatt Breweries v. Canada (1979), the Court held that the regulation of the composition of "light beer" under the Food and Drugs Act was invalid as it was too narrow to be directed towards trade.
Constitution Act, 1867
The Constitution Act, 1867 , is a major part of Canada's Constitution. The Act created a federal dominion and defines much of the operation of the Government of Canada, including its federal structure, the House of Commons, the Senate, the justice system, and the taxation system...
provides the federal government with the authority to legislate on matters related to the regulation of Trade and Commerce. This power is generally balanced against the provincial power over property and civil rights
Property and civil rights
In Canadian constitutional law, section 92 of the Constitution Act, 1867 provides the provincial government with the exclusive authority to legislate on matters related to property and civil rights in the Province. Note that civil rights in this context is different from what is understood as civil...
under section 92(13) as well as "matters of a local nature" under section 92(16).
The trade and commerce clause was first examined in Citizen's Insurance Co. v. Parsons
Citizen's Insurance Co. v. Parsons
Citizen's Insurance Company of Canada v. Parsons , 7 App. Cas. 96 is a major Canadian constitutional case decided by the Judicial Committee of the Privy Council...
(1881). The Privy Council identified two branches of the clause. A matter could fall under the inter-provincial branch if it concerned "international and interprovincial trade", or in the alternative, it could fall under the general trade branch if it concerned the "general regulation of trade affecting the Dominion as a whole".
Inter-provincial trade
Initially the scope for inter-provincial trade was set very narrowly by the Privy Council. In the Board of Commerce case, the Privy Council suggested that the trade and commerce power applied only as an ancillary power to some other valid federal power. This principle was eventually rejected in Toronto Electric Commissioners v. SniderToronto Electric Commissioners v. Snider
Toronto Electric Commissioners v. Snider, [1925] AC 396 is a famous Canadian constitutional decision of the Judicial Committee of the Privy Council where the Council struck down the federal Industrial Disputes Investigation Act, precursor to the Canada Labour Code...
, but the power was still read strictly. In R. v. Eastern Terminal Elevator Co.
R. v. Eastern Terminal Elevator Co.
R. v. Eastern Terminal Elevator Company, [1925] S.C.R. 434 is an early constitutional decision of the Supreme Court of Canada on the Constitution's Trade and Commerce power...
(1925), a federal law regulating trade of provincially produced grain destined entirely for export was found not to be within the meaning of inter-provincial trade. Similar marketing schemes were held to be invalid on the same basis
Many federal laws were struck down on the basis that it regulated transactions that took place solely within the province.
With the abolishment of appeals to the Privy Council the interpretation of the power became broader. In Caloil Inc. v. Canada (1971) the Court upheld a law prohibiting the movement of imported oil as a form of regulating inter-provincial trade.
The most significant decision was the Reference re Agricultural Products Marketing Act
Reference re Agricultural Products Marketing Act
Reference re Agricultural Products Marketing Act , [1978] 2 S.C.R. 1198 is a landmark constitutional decision of the Supreme Court of Canada on federal-provincial agreements where the Court unanimously upheld the validity of the Agricultural Marketing Act...
(1978) where the Supreme Court upheld a federal egg marketing scheme that imposed quotas of different provinces. This was a particularly broad interpretation of inter-provincial trade as it included even egg producers who did not export their products.
The Court has also considered the effect of provincial law on the trade and commerce power. In Carnation Co. v. Quebec Agricultural Marketing Board
Carnation Co. v. Quebec Agricultural Marketing Board
Carnation Co. Ltd. v. Quebec Agricultural Marketing Board [1968] S.C.R. 238 is a leading constitutional decision of the Supreme Court of Canada on the federal authority over trade and commerce under section 91 of the Constitution Act, 1867...
, the Court held that provincial regulations that had an incidental effect on inter-provincial trade was valid. However, if the provincial scheme limits the free flow of trade between provinces than it will be struck down.
General trade
The general trade branch was considered in General Motors of Canada Ltd. v. City National LeasingGeneral Motors of Canada Ltd. v. City National Leasing
General Motors of Canada Ltd. v. City National Leasing [1989] 1 S.C.R. 641, is a leading Supreme Court of Canada decision on the scope of the Trade and Commerce powers of the Constitution Act, 1867 as well as the interpretation of the Ancillary doctrine....
. The Court listed five indicia of a valid law under the general trade branch. In this case it was found that the inquiry must consider whether the law was part of a regulatory scheme, whether there was an agency to oversee the scheme, whether the matter concerned trade as a whole, whether the provinces could have been incapable of enacting such a scheme, and whether the failure of a province to participate would jeopardize the scheme.
The regulation of general trade must be broad and sweeping, and cannot single out a particular trade or industry. In Labatt Breweries v. Canada (1979), the Court held that the regulation of the composition of "light beer" under the Food and Drugs Act was invalid as it was too narrow to be directed towards trade.