 Hello, this is Wayland Chow and this is the Constitution of Canada Part 2. In this part, we'll look at the division of lawmaking powers. In Part 1, we talked about how the Constitution or specifically the Constitution Act 1867 creates our federal system of government. So that government is made up of two levels. We have the national government being the Parliament of Canada and local or regional governments that we call provincial governments that each have a provincial legislature. To have that kind of system, we need rules that allocate specific lawmaking powers to each level of government. The allocation or division of lawmaking power in our federal system is determined by sections 91, 92 and 93 of the Constitution Act 1867. We'll first look at section 91 which allocates power to the federal Parliament. We'll first focus on the wording in the preamble of section 91. If we look at near the top there, it refers to the Senate and the House of Commons. So those two legislative bodies make up the two parts of the federal Parliament. So in Canada, for a federal statute to become law, the proposed legislation is first in the form of a bill. The bill is first considered by the House of Commons and if it's approved by a majority of the House of Commons, it moves on to the Senate. And if the majority of the Senate approves, it's still not law. It still has to go through one more step. It needs to be approved or assented to by the Queen or the Queen's representative in Canada called the Governor General. So that final step is called royal assent. So the reference to the Queen here is to the current holder of the English throne which is Queen Elizabeth II. So she is the Queen of England, but she also happens to be the Queen of Canada. Canada is still a constitutional monarchy with the Queen as the head of state. So there is a legal requirement that every piece of legislation needs to be approved or assented to by the Queen or her representative before it becomes law. And that consent is always provided. The other part of section 91 I wanted to point out to you is the wording at the very end which says the exclusive legislative authority of the Parliament of Canada extends to all matters coming within the classes of subjects next here and after enumerated. So that's just very fancy language essentially saying that here below there is a list of subject matter that constitutes the powers of the federal Parliament. We're not going to look at every single federal lawmaking power under section 91, but we'll point out some of the more significant ones, especially those that are important to the regulation of business. The first significant power is under section 91-2, the regulation of trade and commerce. The thing to keep in mind with this power is that it is applied in a much narrower sense than the wording suggests. Just saying trade and commerce seems to suggest that the federal government has the ability to regulate almost any kind of economic activity in Canada, which is actually not the case. The regulation of trade and commerce refers to the federal government's ability to regulate international and inter-provincial trade. So any kind of economic activity, any kind of trade within a province cannot be regulated by the federal Parliament but can be regulated by the provincial governments. So an example of an exercise of this power by the federal government is the entering into of international trade treaties. Not too long ago the NAFTA treaty was revised through negotiations between Canada, the U.S., and Mexico. So the revised treaty is called the Canada-United States-Mexico Agreement, or CUSMA for short. The U.S. government likes to call it the USMCA, we like to call it CUSMA. So that was done by the federal government in the exercise of their power to regulate trade and commerce. Section 91-2A gives the federal government power over unemployment insurance. So that's why it's the federal government that administers the Employment Insurance Program. And by the way, it used to be called unemployment insurance until about around the 1980s. The then federal government under Brian Mulroney renamed the program Employment Insurance. Section 91-3 gives the federal Parliament the ability to impose taxes. So the federal government in Canada imposes all kinds of different taxes, including personal income tax, corporate income tax, and a number of different consumption taxes, including the GST and HST. And taxes are administered and collected by a government agency, a federal government agency called Canada Revenue Agency or CRA for short. The postal service is the responsibility of the federal parliament under Section 91-5. Canada Post is a Crown Corporation owned by the federal government. The census and the collection of statistics is the responsibility of the federal government. The specific government department that is responsible for this is called Statistics Canada. The power over navigation and shipping essentially refers to any kind of transportation by water. So boats and ships on water, it can be commercial shipping, it can also be pleasure or boating. Like if you have a boat at the cottage and you need a boating license, that license is obtained from the federal government. Bankruptcy and coinage is issued by the federal government through the institution called the Royal Canadian Mint. The banking industry is regulated by the federal government under 91-15. The specific legislation is called the Bank Act and the government agency is the Office of the Superintendent of Financial Institutions or OSFI for short. Bankruptcy and insolvency is regulated by the federal government. The relevant legislation is called the Bankruptcy and Insolvency Act. Legislation regulating intellectual property including patents and copyrights is the responsibility of the federal parliament. The federal government agency is called the Canadian Intellectual Property Office. Immigration and citizenship is the responsibility of the federal government under Section 91-25, which refers to naturalization and aliens. The legal requirements to be married or to be divorced are set by the federal parliament. However, the rules governing the splitting of assets or the sharing of assets on a divorce or separation are not federal, but they are set by each provincial government. Criminal law is the responsibility of the federal parliament under Section 91-27. The major piece of criminal law legislation in Canada is called the Criminal Code. In the Criminal Code, you will find offenses for all the usual crimes that we're all aware of, murder, kidnapping, theft, and some business-related crimes, especially fraud. So you will see all of the rules for those offenses in the Criminal Code. The last federal lawmaking power I'll talk about is called the Residual Power. It may not sound very interesting or important, but it actually is. The residual power arises from the wording in the preamble of Section 95, which I've highlighted there, which says, in relation to all matters not coming within the classes of subjects by this act assigned exclusively to the legislatures of the provinces. What the residual power is, let me explain what that wording means, essentially, what the effect of that wording is, is that if we take a step back, the Constitution Act 1867 or the original act called the BNA or British North America Act was passed in 1867. So the people who wrote the Constitution Act 1867 or BNA Act realized that the world is a constantly changing place and that they could try to list as many subject matter in Section 91, 92, 93 that could capture all the various subject matter in the world that existed in 1867. But they realized that there will be things that will be created in the world that they would not be aware of, the things that would arise in the future. So the way they wrote the Constitution Act 1867 is that if there's some subject matter that is not listed in the Constitution Act, if it's not in Section 91, 92, or 93, if it's not mentioned there, then the power to regulate this unlisted subject matter belongs to the federal parliament. And we've come to call that power the residual power. Some of the examples of the subject matter that falls within the residual power that the federal government has authority to regulate and actually does regulate is air travel. Airplanes and air travel, airports are all regulated by the federal government. Another example of residual power is the regulation of telecommunications and broadcasting like TV stations, cell phone networks. All of that is regulated by the federal government. The federal agency that regulates that, by the way, is called the CRTC. Let's now look at the provincial lawmaking powers that are set out in the Constitution Act 1867. In Section 92, there is a list of subject matter that the provincial legislatures have responsibility over. One of the most important provincial lawmaking powers is found in Section 9213, which refers to property and civil rights in the province. Now, it may not, at first blush, sound like much, but it actually is. This is the power, essentially, that gives provinces the ability to regulate most business transactions or the economy in general in each of the provinces. It gives them the ability, for example, to regulate the stock market, the Toronto Stock Exchange is regulated by the Ontario government. Any kind of consumer or business transactions can be regulated under this power. So if we look at the words property and civil rights and understand what they mean, so property is essentially any transaction dealing with property. For example, if you are buying a home, if you're buying real estate, the ownership of your home would be registered in a registry that is run by the provincial government. The other words in Section 9213 is civil rights, and these words cause some confusion. The modern meaning of civil rights refers to human rights, such as freedom of expression, right not to be detained without proper reason, freedom of religion. The use of the term civil rights in the Constitution Act 1867 does not refer to human rights. The meaning here is the best way to look at it is if you replace the word civil with private, private rights. So any situation that involves private legal rights, so that would include contracts. Contracts create legal rights between private parties. So essentially any situation involving a contract, an economic transaction, could be regulated under 9213. Section 92-2 gives the provinces the ability to impose taxes. In Ontario, for example, the government imposes a number of different taxes including personal income tax, corporate income tax, sales taxes including HST. Another very important provincial power is the responsibility for hospitals and the healthcare system in general. We've been thus far talking a lot about our system of government being made up of the federal government and the provincial governments, but you may have been wondering where the municipal governments fit in, how are they created? The Constitution Act 1867 creates only the federal parliament and the provincial legislatures. The municipal governments like City of Mississauga, City of Toronto, they're all governed by their own city councils. Those municipal governments are created under this power, under 92-8, the power over municipal institutions in the province. So how that works is that each province has the right to create municipal governments. So let's say the City of Mississauga. The City of Mississauga and the City Council was created by a piece of legislation passed by the Ontario government. The Ontario government under that legislation gives the Mississauga City Council certain powers to make laws and the City Council will use those powers, or we call them delegated powers, will use those delegated powers to make bylaws, so bylaws such as building requirements or parking rules that are created by city governments. A licensing of businesses, including liquor licenses, is the responsibility of the provincial government in Ontario. If you have a restaurant, let's say, and you want to serve alcohol, you will need a liquor license. You would apply to the Liquor Licensing Control Board of Ontario to get that license. If you have a business that operates only in Ontario, you can incorporate a corporation under provincial law. And this is under 9211, which gives the provinces the power to create legislation regarding the incorporation of companies with provincial objects. Section 9214 gives the provinces the responsibility for the court system. And finally, there is a catch-all power under 9216, which gives provincial governments power over generally all matters of a merely local or private nature in the province. So that's essentially saying if it doesn't fit into any of the other categories on the list or any other subject matter on the list, but it's still something that is strictly about that province or within that province, then the province has the legal right to pass legislation regarding that matter. The last very significant power that provincial governments have under the Constitution Act of 1867 is the power over education, and that stems from Section 93. So that includes elementary schools, high schools, colleges, and universities. They are all regulated by the provincial government. So with all these division of power rules that we've looked at, how are they applied? If you remember from Part 1, we looked at Section 52, or 2 subsection 1 specifically of the Constitution Act of 1867. It says that the Constitutional Act is the supreme law of Canada, and that any law that is inconsistent with the Constitution is of no force or effect. So by applying that section, if we have a law that's been created by a government, it could be federal government, it could be provincial government, or even a municipal government, if the validity of that law is challenged, that law can be said to be either intravirus or ultra-virus. So those are Latin terms. Intravirus means that the law was created within the scope of the government's authority. In other words, they had a legal right to create that law. Ultra-virus means that the law was created outside the scope of the government's authority, meaning the government did not have legal authority or legal rights to make that law. So if a law is found to be intravirus, that law is held to be valid. If it's ultra-virus, that law would be considered invalid. It's as if the law did not exist. Let's look at a specific case as an example. A long time ago, so this was earlier in the first half of the 20th century, there was butter and then came along a competing product called margarine. The people in the dairy industry, especially dairy farmers, were very concerned that this new product, margarine, would take away sales from butter. So they were able to convince the federal government, in this case, to pass legislation. So this legislation was called the Dairy Industry Act. Under a particular section, Section 5a, it says that no person shall manufacture import into Canada or offer, sell, or have in his possession for sale any margarine or other substitute for butter, basically banning the manufacturer, the importation, sale, or possession of margarine, basically making it an illegal substance, more or less. So the validity of that legislation or this specific section was challenged or was considered by the Supreme Court of Canada in a case that the decision was released in 1949. So the specific legal issue here was whether or not that Section 5a was ultra-virus of the Parliament of Canada, either in whole or apart, and if so, what particular or particular is and to what extent. In other words, did the federal Parliament have the legal rights under the Constitution Act 1867, which back then was called the BNA Act? Did they have the legal right or legal authority to pass Section 5a as a law? So the Supreme Court of Canada rendered its decision here. They said that banning the import of margarine is a valid exercise of federal power under the regulation of trade and commerce. Remember, trade and commerce is interpreted as giving the federal Parliament the right to regulate inter-provincial and international trade. So they said, okay, you can ban the import of margarine. That's a valid exercise of the federal government's power. But then the Supreme Court also said banning the sale and manufacture of margarine is ultra-virus of the federal Parliament. In other words, the federal Parliament does not have a right to ban the sale and manufacture of margarine because that concerns property and civil rights. And property and civil rights is a provincial power under Section 92. So the federal Parliament, so that part, that banning the sale and manufacture of margarine was invalid. So they had no right, the federal Parliament had no right to do that.