Board of Commerce case

Following the end of the First World War, there was a rapid rise in the cost of living in the Canadian economy. In response, the Parliament of Canada passed the Board of Commerce Act, 1919[2] and the Combines and Fair Prices Act, 1919.[3] The assigned the Board of Commerce two main functions:

• Investigate and restrain combinations, monopolies, trusts and mergers constituting a "combine."
• Inquire into and enforce prohibitions against hoarding and profiteering.

In pursuit of its functions, the Board issued an order, prohibiting certain clothing manufacturers in Ottawa from charging higher than specified profit margins. That triggered a dispute as to the Acts' constitutionality, and the Board referred the matter to the Supreme Court of Canada by way of stated case under s. 32 of the Board of Commerce Act, posing the following reference questions:

1. Has the Board lawful authority to make the order?
2. Has the Board lawful authority to require the Registrar or other proper officer of the Supreme Court of Ontario to cause the order when issued to be made a rule of said Court?

Anglin J

The Supreme Court split 3–3 on the question of the constitutionality of the legislation. Anglin J, joined by Davies CJ and Mignault J considered the Acts to be intra vires and repeated the observation he had previously made in the Insurance Act Reference:

When a matter primarily of civil rights has attained such dimensions that it affects the body politic of the Dominion and has become of national concern it has in that aspect of it, not only ceased to be "local and provincial" but has also lost its character as a matter of "civil rights in the province" and has thus so far ceased to be subject to provincial jurisdiction that Dominion legislation upon it under the "peace, order and good government" provision does not trench upon the exclusive provincial field and is, therefore, valid and paramount.[4]

However, given the Privy Council's rulings in Citizen's Insurance Co. v. Parsons and the Local Prohibition case, he rested his decision to uphold the Acts on the basis of the federal trade and commerce power as well as on the federal power relating to peace, order and good government.[5]

Idington, Duff, and Brodeur JJ, in separate opinions, held that they were ultra vires. In particular, Duff J had concerns as to the interpretation of the nature of the power of peace, order and good government:

In truth if this legislation can be sustained under the residuary clause, it is not easy to put a limit to the extent to which Parliament through the instrumentality of commissions (having a large discretion in assigning the limits of their own jurisdiction, see sec. 16), may from time to time in the vicissitudes of national trade, times of high prices, times of stagnation and low prices and so on, supersede the authority of the provincial legislatures. I am not convinced that it is a proper application of the reasoning to be found in the judgments on the subject of the drink legislation, to draw from it conclusions which would justify Parliament in any conceivable circumstance forcing upon a province a system of nationalization of industry.[6]

An appeal was then filed with the Privy Council.

Lord Haldane

Lord Haldane, for the Council, found that the Acts were ultra vires the jurisdiction of the Parliament of Canada, as they could not be justified under any heading of federal power enumerated in s. 91 of the British North America Act, 1867.

Haldane's statement as to the nature of the criminal law power was later described by Lord Atkin in Proprietary Articles Trade Association v. Attorney General of Canada[8] as not being a definition. Instead, it was held to be "the criminal law in its widest sense," including the ability to make new crimes, and the only relevant standard to apply is whether the act would attract penal consequences. In addition, while the matter of the trade and commerce power did not need to be decided in that case, the Board declared that it wished to dissociate themselves from Haldane's previous comment: "No such restriction is properly to be inferred from that judgment."

• Combines Investigation Act

• R. S. Khemani; W. T. Stanbury, eds. (1991). Historical Perspectives on Canadian Competition Policy. Halifax: Institute for Research on Public Policy. p. 255. ISBN 0-88645-136-1.