Court of Appeal Decision of the Week

Municipal Law & Constitutional Paramountcy — Who Decides Where Mailboxes Go?

Case: Canada Post Corporation v. Hamilton (City), 2016 ONCA 767 (CanLII)

Keywords: Constitutional Law; Municipal Law; Doctrine of Paramountcy; Mailboxes

Synopsis:

Canada Post decides to roll-out the first phase of its conversion to community mail boxes in downtown Hamilton (exercising its powers to make Regulations under the Canada Post Corporation Act, R.S.C. 1985, c. C-10 (“CPCA”). In response, the City passes By-Law No. 15-091 establishing a regulatory regime; giving the City control over the installation of equipment (including community mail boxes) on municipal roads. Canada Post challenges the By-Law on constitutional and other grounds. It is entirely successful on its application.

On appeal, the City argues the Application Judge erred in drawing the following five conclusions (see para. 29):

  1. the By-Law is unconstitutionally vague;
  2. Canada Post is immune from the application of the By-Law because of Crown immunity;
  3. the By-Law is ultra vires the City on the basis that its pith and substance is a matter that comes under exclusive federal jurisdiction;
  4. the By-Law is inapplicable to Canada Post due to the doctrine of interjurisdictional immunity;
  5. if the By-Law were not ultra vires, it would nevertheless be inoperative due to the application of the Municipal Act and the doctrine of federal paramountcy.

The Court of Appeal concludes the City’s appeal must fail. Although the subject matter of the By-Law comes within the City’s jurisdiction, the By-Law nevertheless conflicts with federal legislation and is therefore inoperative under the doctrine of paramountcy.

Importance:

The decision provides an excellent summary of recent developments in Canadian constitutional law. The Court of Appeal took full advantage of an opportunity to clarify general principles surrounding the doctrines of ultra vires and paramountcy. These are important topics of discussion, not just for the legal profession, but also – and perhaps more importantly – for the character of Canadian federal traditions. What follows is our modest attempt to succinctly present some “highlights” from the decision.

As with any decision requiring the Court of Appeal to review constitutionally suspect legislation, the Court conducted a “pith and substance” analysis. At para. 32, the Court of Appeal (Miller J.A. writing for the Court) described this process as one of determining the “true character” or “true nature” of the challenged law (consistent with the Supreme Court of Canada in RJR-MacDonald Inc. v. Canada (Attorney General), 1995 CanLII 64 (SCC), [1995] 3 S.C.R. 199, at para. 29 and Canadian Western Bank v. Alberta, 2007 SCC 22 (CanLII), [2007] 2 S.C.R. 3, at para. 26).

For the Court of Appeal, determining the “pith and substance” of the By-Law required addressing two interrelated questions: “[w]hat in fact does the law do and why?” This inquiry may be expressed both as a search for the purpose of the enacting body, and the legal effect of the law itself (see para. 34). Critically, in determining the purpose of the enacting body, the Court of Appeal determined the analysis is not concerned with the “motives of government”. Citing Quebec (Attorney General) v. Canada (Attorney General), 2015 SCC 14 (CanLII), [2015] 1 S.C.R. 693, at paras. 35-38, the Court of Appeal stated: “The subject matter of legislation is thus distinct from the motives of government and of individuals within a government”. (See at para. 41).

As such, the Court of Appeal accepted the City’s submission the Application Judge had erred in characterizing the By-Law – specifically finding that the concepts of purpose and motive were confused in the analysis: “…the motives of individual Council members (or even the Council as a whole) do not of itself establish the pith and substance of the By-Law”. (See para. 51).

Alternatively, the Court of Appeal preferred an approach which emphasized the legal effect of the By-Law. In other words, what counts for the Court of Appeal is how the By-Law changes legal relationships. In this case, legal relationships were changed in the following two ways (see para. 53):

  • the By-Law “permitting process” requires all persons to obtain a permit before installing equipment and gives jurisdiction to a Director to grant/refuse installation based on City criteria;
  • the By-Law imposes a moratorium on the issuance of permits to Canada Post for community mailboxes for 120 days after Canada Post pays permit fees.

Following detailed analysis of these effects (see paras. 54-65), the Court of Appeal concluded the subject matter of the By-Law, involved “…the protection of persons and property from harm occasioned by equipment installed on municipal road allowances”.

Although the Court of Appeal determined it was “a short walk” from this characterization of the By-Law (as being in relation to protection of persons and property) to the conclusion the By-Law falls within provincial jurisdiction under ss. 92(10) and (13) of the Constitution Act, 1867, the Court ultimately determined the By-Law does impact the federal head of power over the postal service. (See para. 69).

The Court of Appeal concluded there is a conflict “in the relevant sense” as between the By-Law and federal legislative provisions (in similar fashion to the situation in British Columbia (Attorney General) v. Lafarge Canada Inc., 2007 SCC 23 (CanLII), [2007] 2 S.C.R. 86). A harmonious reading of the By-Law and the Regulation was not possible.

The Court found the following practical difficulty with the By-Law: “…what is at issue is not the location of a single mail receptacle, or even a few hundred mail receptacles. The CMBs are part of a national network.  These logistical problems would be magnified by the number of municipalities enacting such a by-law – each with their own decision-maker and criteria – that will collectively have veto power over the placement of CMBs nation-wide” (see para. 81).

A harmonious reading of the By-Law and regulation enabling Canada Post to give effect to the shift towards community mailboxes could not be found. The reason provided by the Court of Appeal was that, “The By-Law (together with the Manual) does not complete, or render more specific, the work begun in the Regulation. Instead it asserts a supervisory jurisdiction over the decision-making of Canada Post. It is not co-operative but competitive, displacing one discretionary authority with another.” (See para. 83).

The Court found the By-Law was inoperative to the extent of the conflict between itself and both the Canada Post Corporation Act, R.S.C. 1985, c. C-10 (“CPCA”) and Regulation. (See para. 87).

Counsel for the Appellant: Peter Griffin and Rory Gillis (Lenczner Slaght Royce Smith Griffin LLP, Toronto)

Counsel for the Respondent: John B. Laskin and Yael Bienenstock (Torys LLP, Toronto)

Counsel for the intervener, the Federation of Canadian Municipalities: Stéphane Ėmard-Chabot

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Posted: Wednesday, October 26, 2016