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The Court of Appeal (Section 26)

November 3, 2021

Alberta

,

Canada

Issue

How are constitutional questions referred by a province to the courts, and are decisions on references appealable?

Conclusion

The Lieutenant Governor in Council may refer to the Court of Appeal for hearing or consideration any matter the Lieutenant Governor in Council thinks fit to refer, and the Court of Appeal shall hear or consider the matter that is referred. If the matter referred to the Court of Appeal relates to the constitutional validity of an enactment of Alberta, the Attorney General of Canada shall be notified of the hearing in order that the Attorney General of Canada may be heard if the Attorney General of Canada sees fit. If any matter relating to a tax collection agreement between the Government of Canada and the Government of Alberta and entered into pursuant to the Alberta Personal Income Tax Act is referred to the Court, the Attorney General of any province or territory of Canada that has entered into a tax collection agreement of a like nature and having like purposes to the tax collection agreement entered into by the Government of Alberta may appear before the Court of Appeal, and is entitled to be heard as a party on the reference. The Court of Appeal or the Chief Justice of Alberta may direct that a person interested, or if there is a class of persons interested, that any one or more persons as representatives of that class be notified of the hearing and those persons are entitled to be heard at the hearing. When any interest affected is not represented by counsel, the Court of Appeal may in its discretion request counsel to argue the case in that interest, and the reasonable expenses of it shall be paid out of the General Revenue Fund. The Court of Appeal shall certify its opinion on the matter referred to it with the reasons for its opinion to the Lieutenant Governor in Council and the opinion shall be given in like manner as in the case of a judgment in an ordinary action, and a judge who differs from the opinion of the majority may in like manner certify that judge’s opinion with that judge’s reasons for it to the Lieutenant Governor in Council. The opinion of the Court is deemed a judgment of the Court, and an appeal lies from it as in the case of a judgment in an action (s. 26). (Judicature Act)

The Governor in Council may refer to the Court for hearing and consideration important questions of law or fact concerning the interpretation of the Constitution Acts, the constitutionality or interpretation of any federal or provincial legislation, the appellate jurisdiction respecting educational matters, by the Constitution Act, 1867, or by any other Act or law vested in the Governor in Council, or the powers of the Parliament of Canada, or of the legislatures of the provinces, or of the respective governments thereof, whether or not the particular power in question has been or is proposed to be exercised. The Governor in Council may refer to the Court for hearing and consideration important questions of law or fact concerning any matter, whether or not in the opinion of the Court ejusdem generis with the enumerations contained in subsection (1), with reference to which the Governor in Council sees fit to submit any such question. Any question concerning any of the matters mentioned in subsections (1) and (2), and referred to the Court by the Governor in Council, shall be conclusively deemed to be an important question. Where a reference is made to the Court under subsection (1) or (2), it is the duty of the Court to hear and consider it and to answer each question so referred, and the Court shall certify to the Governor in Council, for his information, its opinion on each question, with the reasons for each answer, and the opinion shall be pronounced in like manner as in the case of a judgment on an appeal to the Court, and any judges who differ from the opinion of the majority shall in like manner certify their opinions and their reasons (s. 54). (Supreme Court Act)

An appeal lies to the Court from an opinion pronounced by the highest court of final resort in a province on any matter referred to it for hearing and consideration by the lieutenant governor in council of that province whenever it has been by the statutes of that province declared that such opinion is to be deemed a judgment of the highest court of final resort and that an appeal lies therefrom as from a judgment in an action (s. 36). (Supreme Court Act)

In Reference re Greenhouse Gas Pollution Pricing Act, the Alberta Lieutenant Governor in Council referred a constitutional question to the Alberta Court of Appeal. The issue was whether the Greenhouse Gas Pollution Pricing Act, SC 2018, c 12 ("the GGPPA") was constitutional. The Court of Appeal held that Part 1 and Part 2 of the GGPPA were unconstitutional in their entirety.

Reference re Greenhouse Gas Pollution Pricing Act was an appeal from Reference re Greenhouse Gas Pollution Pricing Act, 2020 ABCA 74 (CanLII), as well as from similar references that had been brought in Ontario and Saskatchewan. The majority of the Supreme Court found that the GGPPA was constitutional.

In Reference Re Securities Act (Canada), the Government of Canada proposed to pass legislation that would regulate the securities industry. The proposed legislation would, inter alia, license and regulate the conduct of participants in the securities industry, regulate raising money from the public, provide for investigation and civil liability, and address systemic risk. The Government of Alberta challenged the constitutionality of the proposed legislation pursuant to s. 26 of the Judicature Act. The Court of Appeal held that the proposed legislation was ultra vires Parliament and that the Government of Canada did not properly apply the pith and substance doctrine.

Law

Section 24 of the Judicature Act, RSA 2000, c J-2 states:

Validity of enactment

24(1) If in a proceeding the constitutional validity of an enactment of the Parliament of Canada or of the Legislature of Alberta is brought into question, the enactment shall not be held to be invalid unless 14 days’ written notice has been given to the Attorney General of Canada and the Minister of Justice and Solicitor General of Alberta.

(2) When in a proceeding a question arises as to whether an enactment of the Parliament of Canada or of the Legislature of Alberta is the appropriate legislation applying to or governing any matter or issue, no decision may be made on it unless 14 days’ written notice has been given to the Attorney General of Canada and the Minister of Justice and Solicitor General of Alberta.

(3) The notice shall include what enactment or part of an enactment is in question and give reasonable particulars of the proposed argument.

(4) The Attorney General of Canada and the Minister of Justice and Solicitor General of Alberta are entitled as of right to be heard, either in person or by counsel, notwithstanding that the Crown is not a party to the proceeding.

(5) No person other than the Minister of Justice and Solicitor General of Alberta or counsel designated by the Minister of Justice and Solicitor General of Alberta shall, on behalf of Her Majesty in right of Alberta or on behalf of an agent of Her Majesty in right of Alberta, appear and participate in any proceeding within or outside Alberta in respect of a question referred to in subsection (1) or (2).

(6) If the Minister of Justice and Solicitor General of Alberta or counsel designated by the Minister of Justice and Solicitor General of Alberta appears in a proceeding within Alberta in respect of a question referred to in subsection (1) or (2), the Minister of Justice and Solicitor General of Alberta is deemed to be a party to the proceeding for the purpose of an appeal from an adjudication in respect of that question and has the same rights with respect to an appeal as any other party to the proceeding.

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Reference of questions for consideration

26(1) The Lieutenant Governor in Council may refer to the Court of Appeal for hearing or consideration any matter the Lieutenant Governor in Council thinks fit to refer, and the Court of Appeal shall hear or consider the matter that is referred.

(2) If the matter referred to the Court of Appeal relates to the constitutional validity of an enactment of Alberta, the Attorney General of Canada shall be notified of the hearing in order that the Attorney General of Canada may be heard if the Attorney General of Canada sees fit.

(3) If any matter relating to a tax collection agreement between the Government of Canada and the Government of Alberta and entered into pursuant to the Alberta Personal Income Tax Act is referred to the Court, the Attorney General of any province or territory of Canada that has entered into a tax collection agreement of a like nature and having like purposes to the tax collection agreement entered into by the Government of Alberta may appear before the Court of Appeal, and is entitled to be heard as a party on the reference.

(4) The Court of Appeal or the Chief Justice of Alberta may direct

(a) that a person interested, or

(b) if there is a class of persons interested, that any one or more persons as representatives of that class

be notified of the hearing and those persons are entitled to be heard at the hearing.

(5) When any interest affected is not represented by counsel, the Court of Appeal may in its discretion request counsel to argue the case in that interest, and the reasonable expenses of it shall be paid out of the General Revenue Fund.

(6) The Court of Appeal shall certify its opinion on the matter referred to it with the reasons for its opinion to the Lieutenant Governor in Council and the opinion shall be given in like manner as in the case of a judgment in an ordinary action, and a judge who differs from the opinion of the majority may in like manner certify that judge’s opinion with that judge’s reasons for it to the Lieutenant Governor in Council.

(7) The opinion of the Court is deemed a judgment of the Court, and an appeal lies from it as in the case of a judgment in an action.

The Supreme Court Act, RSC 1985, c S-26 stipulates:

References by Governor in Council

Referring certain questions for opinion

53 (1) The Governor in Council may refer to the Court for hearing and consideration important questions of law or fact concerning

(a) the interpretation of the Constitution Acts;

(b) the constitutionality or interpretation of any federal or provincial legislation;

(c) the appellate jurisdiction respecting educational matters, by the Constitution Act, 1867, or by any other Act or law vested in the Governor in Council; or

(d) the powers of the Parliament of Canada, or of the legislatures of the provinces, or of the respective governments thereof, whether or not the particular power in question has been or is proposed to be exercised.

Other questions

(2) The Governor in Council may refer to the Court for hearing and consideration important questions of law or fact concerning any matter, whether or not in the opinion of the Court ejusdem generis with the enumerations contained in subsection (1), with reference to which the Governor in Council sees fit to submit any such question.

Questions deemed important

(3) Any question concerning any of the matters mentioned in subsections (1) and (2), and referred to the Court by the Governor in Council, shall be conclusively deemed to be an important question.

Opinion of Court

(4) Where a reference is made to the Court under subsection (1) or (2), it is the duty of the Court to hear and consider it and to answer each question so referred, and the Court shall certify to the Governor in Council, for his information, its opinion on each question, with the reasons for each answer, and the opinion shall be pronounced in like manner as in the case of a judgment on an appeal to the Court, and any judges who differ from the opinion of the majority shall in like manner certify their opinions and their reasons.

Notice to be given to provinces interested

(5) Where the question relates to the constitutional validity of any Act passed by the legislature of any province, or of any provision in any such Act, or in case, for any reason, the government of any province has any special interest in any such question, the attorney general of the province shall be notified of the hearing in order that the attorney general may be heard if he thinks fit.

Notice to interested persons

(6) The Court has power to direct that any person interested or, where there is a class of persons interested, any one or more persons as representatives of that class shall be notified of the hearing on any reference under this section, and those persons are entitled to be heard thereon.

Appointment of counsel by Court

(7) The Court may, in its discretion, request any counsel to argue the case with respect to any interest that is affected and with respect to which counsel does not appear, and the reasonable expenses thereby occasioned may be paid by the Minister of Finance out of any moneys appropriated by Parliament for expenses of litigation.

Additionally, s. 36 states:

Appeals from references by lieutenant governor in council

36 An appeal lies to the Court from an opinion pronounced by the highest court of final resort in a province on any matter referred to it for hearing and consideration by the lieutenant governor in council of that province whenever it has been by the statutes of that province declared that such opinion is to be deemed a judgment of the highest court of final resort and that an appeal lies therefrom as from a judgment in an action.

In Reference re Greenhouse Gas Pollution Pricing Act, 2020 ABCA 74 (CanLII), the Alberta Lieutenant Governor in Council referred a constitutional question to the Alberta Court of Appeal. The issue was whether the Greenhouse Gas Pollution Pricing Act, S.C. 2018, c. 12, s. 186 ("the GGPPA") was constitutional. The Court of Appeal held that Part 1 and Part 2 of the GGPPA were unconstitutional in their entirety:

[338] No matter how narrowly other courts have sought to characterize the “matter” of this Act, the new federal head of power claimed in this Reference fails this part of the national concern test. Whether the “matter” is characterized as the “regulation of GHG emissions” at the one end or “establishment of minimum national GHG emissions pricing standards to reduce GHG emissions” at the other, the result is the same. The scale of impact on provincial jurisdiction is irreconcilable with the fundamental distribution of legislative power under the Constitution. This is quite apart from the fact it is also irreconcilable with the provinces’ proprietary powers as owners of their natural resources.

[339] For these reasons, acceding to the federal government’s invocation of the national concern doctrine because of the clarion call of today’s discourse – something must be done – comes at an unacceptably high cost both to the provinces’ exclusive jurisdiction to manage their own affairs and to the citizens of each province. The federal government is attempting to use a valid domestic and international concern about climate change to vary the division of powers in Canada, but without a constitutional amendment. However, simply because reducing GHG emissions is a pressing international problem and one of concern to Canadians generally across this country does not justify abrogating the existing division of powers in Canada.

D. Conclusion on National Concern Doctrine

[340] For the reasons given, Canada’s argument that this Act is constitutional based on the national concern doctrine fails.

[341] The Supreme Court has noted, with respect to s 125 of the Constitution Act, 1867, which prevents one level of government taxing the other, that “the power to tax is the power to destroy”.[210] But the power to tax is not the only power to destroy. Undermining the provinces’ powers through federal legislation which might at first blush appear benign, but which is anything but, is equally destructive. To uphold the Act under the national concern doctrine would substantially override the provinces’ powers under several heads of power under s 92, as well as s 92A, and their proprietary rights as owners of their natural resources.

XV. Conclusion

[342] For the reasons given, it is our opinion that Parts 1 and 2 of the Act are unconstitutional in their entirety.

Reference re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11 (CanLII) was an appeal from Reference re Greenhouse Gas Pollution Pricing Act, 2020 ABCA 74 (CanLII), as well as from similar references that had been brought in Ontario and Saskatchewan. The majority of the Supreme Court found that the GGPPA was constitutional:

[1] In 2018, Parliament enacted the Greenhouse Gas Pollution Pricing Act, S.C. 2018, c. 12, s. 186 (“GGPPA”). Three provinces challenged the constitutionality of the GGPPA by references to their respective courts of appeal. The question divided the courts. In split decisions, the courts of appeal for Saskatchewan and Ontario held that the GGPPA is constitutional, while the Court of Appeal of Alberta held that it is unconstitutional. Those decisions have now been appealed to this Court.

[2] The essential factual backdrop to these appeals is uncontested. Climate change is real. It is caused by greenhouse gas emissions resulting from human activities, and it poses a grave threat to humanity’s future. The only way to address the threat of climate change is to reduce greenhouse gas emissions. In the Paris Agreement, U.N. Doc. FCCC/CP/2015/10/Add.1, December 12, 2015, states around the world undertook to drastically reduce their greenhouse gas emissions in order to mitigate the effects of climate change. In Canada, Parliament enacted the GGPPA as part of the country’s effort to implement its commitment.

[3] However, none of these facts answer the question in these appeals. The issue here is whether Parliament had the constitutional authority to enact the GGPPA. To answer this question, the Court must identify the true subject matter of the GGPPA and then classify that subject matter with reference to the division of powers set out in the Constitution Act, 1867 (“Constitution”). In doing so, the Court must give effect to the principle of federalism, a foundational principle of the Canadian Constitution, which requires that an appropriate balance be maintained between the powers of the federal government and those of the provinces.

[4] Below, I conclude that the GGPPA sets minimum national standards of greenhouse gas price stringency to reduce greenhouse gas emissions, pollutants that cause serious extraprovincial harm. Parliament has jurisdiction to enact this law as a matter of national concern under the “Peace, Order, and good Government” clause of s. 91 of the Constitution. National concern is a well-established but rarely applied doctrine of Canadian constitutional law. The application of this doctrine is strictly limited in order to maintain the autonomy of the provinces and respect the diversity of Confederation, as is required by the principle of federalism. However, Parliament has the authority to act in appropriate cases, where there is a matter of genuine national concern and where the recognition of that matter is consistent with the division of powers. In this case, Parliament has acted within its jurisdiction.

[5] I also conclude that the levies imposed by the GGPPA are constitutionally valid regulatory charges. In the result, the GGPPA is constitutional.

In Reference Re Securities Act (Canada), 2011 ABCA 77 (CanLII), the Government of Canada proposed to pass legislation that would regulate the securities industry. The proposed legislation would, inter alia, license and regulate the conduct of participants in the securities industry, regulate raising money from the public, provide for investigation and civil liability, and address systemic risk. The Government of Alberta challenged the constitutionality of the proposed legislation pursuant to s. 26 of the Judicature Act, RSA 2000, c J-2. The Court of Appeal held that the proposed legislation was ultra vires Parliament and that the Government of Canada did not properly apply the pith and substance doctrine:

[1] The Government of Canada proposes to pass legislation that would regulate the securities industry in Canada. The Government of Alberta challenges the constitutionality of this proposed legislation. The Alberta Lieutenant Governor in Council has referred the following questions to this Court:

1. Does the Parliament of Canada have the legislative authority under the Constitution Act, 1867:

(a) to pass sections 295, 296 and 297 of the Budget Implementation Act, 2009 S.C. 2009, c.2,

(b) to pass legislation that is co-extensive in substance with the Alberta Securities Act and similar to the draft Securities Act appended to the Final Report and Recommendations of the Expert Panel on Securities Regulation, and

(c) to pass legislation that is the same as or similar to the Proposed Canadian Securities Act - Sessional Paper No. 8525-403-10?

2. Does the Parliament of Canada have jurisdiction under the Constitution Act, 1867 to pass legislation that would exclude the application of the Alberta Securities Act:

(a) to market participants who elect to be regulated under the federal regime only, as recommended in the Final Report and Recommendations of the Expert Panel on Securities Regulation,

(b) to market participants who have a substantial connection to a jurisdiction other than Alberta, as recommended in the Final Report and Recommendations of the Expert Panel on Securities Regulation, or

(c) by an express paramountcy clause or similar unilateral action, as recommended in the Final Report and Recommendations of the Expert Panel on Securities Regulation?

The Reference was made by Order in Council 20/2010, as amended by Order in Council 181/2010, pursuant to s. 26 of the Judicature Act, R.S.A. 2000, c. J-2.

[...]

[48] In conclusion, the proposed federal securities legislation represents the intrusion of the federal government into an area long occupied by the provincial governments. Regulation of the professions, regulation of specific industries, regulation of particular types of contracts, and regulation of forms of property have always been considered to fall under provincial powers. The Government of Canada obviously feels that national regulation of the securities industry would be in the national interest. A number of the provinces object, on the basis that regional autonomy, diversity, and priorities will be sacrificed. One of the fundamental principles of the Canadian federation was to preserve local powers and local diversity, to enable the promotion of local interests: Consolidated Fastfrate Inc. at paras. 29-30. As the Supreme Court has noted, fostering co‑operation among governments and legislatures for the common good is a key feature of successful federalism. The division of power represents an understanding reached on the nature of Canadian federalism that should not lightly be disrupted by any one level of government or the courts. If the Government of Canada wants a paradigm shift in the power to regulate the securities industry, the way to accomplish that is through negotiation with the provinces, not by asking the courts to reallocate the powers under the Constitution Act through a radical expansion of the trade and commerce power: Canadian Western Bank at para. 24; Reference re Employment Insurance Act at para. 10.

[49] Question 1(c) posed in the Reference should be answered in the negative. While the criminal law prohibitions likely would survive on a stand-alone basis, the proposed national securities act only seeks to implement them as part of the overall unconstitutional regulatory regime. In light of that answer, questions 1(a) and (b) need not be answered. The second question posed in the Reference relates to certain recommendations of the Expert Panel. There is no clear indication on this record that the federal government proposes to enact legislation to implement the recommendations of the Expert Panel, and there is no draft legislation available to the Court to demonstrate exactly how those recommendations would be implemented. The argument on the Reference was primarily directed at the first question, and in all the circumstances it is inappropriate to attempt to answer the second question at this time.

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