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Rio Hotel Ltd. v. New Brunswick (Liquor Licensing Board), [1987] 2 S.C.R. 59

 

Rio Hotel Limited        Appellant

 

v.

 

Liquor Licensing Board, established pursuant to the Liquor Control Act, R.S.N.B. 1973, c. L‑10, as amended                    Respondent

 

and

 

Attorney General for New Brunswick and Attorney General for Saskatchewan  Interveners

 

indexed as: rio hotel ltd. v. new brunswick (liquor licensing board)

 

File No.: 19949.

 

1986: October 6; 1987: July 29.

 


Present: Dickson C.J. and Beetz, Estey, McIntyre, Lamer, Wilson and Le Dain JJ.

 

on appeal from the court of appeal for new brunswick

 

                   Constitutional law ‑‑ Distribution of powers ‑‑ Criminal law power ‑‑ Nudity ‑‑ Provincial liquor licensing legislation providing for live entertainment licences subject to conditions ‑‑ Conditions prohibiting nude entertainment ‑‑ Whether or not provincial conditions an infringement on criminal law and hence ultra vires ‑‑ Constitutional Act, 1867, s. 92(13) ‑‑ Criminal Code, R.S.C. 1970, c. C‑34, ss. 159(2)(b), 163, 169, 170, 171 ‑‑ Liquor Control Act, R.S.N.B. 1973, c. L‑10, s. 63.01.

 

                   New Brunswick's Liquor Control Act required that liquor licence holders also hold an entertainment licence to which the Board could attach conditions with respect to live entertainment and contests held on the licensed premises. The conditions attaching to appellant's entertainment licence specified the degree of nudity acceptable and rules for staging events presupposing the removal of clothing. The Criminal Code , however, includes provisions dealing with nudity (s. 170 ), indecent acts (s. 169 ), immoral, indecent or obscene performances in a theatre (s. 163 ), indecent shows in public (s. 159(2) (b)), and causing a disturbance in or near a public place (s. 171 ). No submission was made here or in the Court of Appeal to the effect that the provisions of the Code did not apply to conduct within the licensed premises. At issue was whether or not the entertainment licence conditions imposed by the Board were an infringement upon the federal criminal power or whether these conditions could be appended to or enacted in support of a valid provincial legislative scheme.

 

                   Held: The appeal should be dismissed.

 

                   Per Dickson C.J. and McIntyre, Wilson and Le Dain JJ.: The provincial legislation at issue is intra vires the province. This legislation, which seeks to regulate the forms of entertainment used by the owners of licensed premises as marketing tools to boost sales of alcohol, is prima facie related to property and civil rights within the Province and to matters of a purely local nature. There was no direct conflict between the licence condition precluding nude entertainment and various provisions of the Code, notwithstanding some overlap. The double aspect doctrine operates. Breach of the provincially‑imposed licence conditions could result in suspension or cancellation of the liquor licence but did not entail penal consequences for either the nude entertainer or the holder of the licence. The relevant Code provisions, on the other hand, are designed primarily to punish entertainers and proprietors who breach the prohibitions on public nudity. The federal characteristics of this subject matter cannot be said to be palpably more important than the provincial characteristics. The provincial regulatory scheme relating to the sale of liquor in the province can operate concurrently with the federal Criminal Code  provisions without difficulty.

 

                   This was not an appropriate case in which to deal with freedom of expression as guaranteed by s. 2 (b) of the Canadian Charter of Rights and Freedoms .

 

                   Per Estey and Lamer JJ.: The provincial legislative activity here deals with the licensing of premises where the conditions form part of a general provincial regulatory program and consequently falls within s. 92(13) and/or (16). The licensing relates entirely to the local operations of premises engaged in the business of selling alcoholic beverages to the inhabitants where entertainment is a natural "marketing tool". It was not necessary to find support for this provincial legislation either under the alleged right of the province to regulate with respect to "local morality" or under the doctrine of paramountcy.

 

                   The longer the penalty and the closer the terminology comes to describing conduct traditionally criminal, the more doubtful the validity of the provincial enactment. Parliament's exclusive right to legislate with reference to criminal law and criminal procedure may not be eroded by provincial legislation disguised as that which is necessary to give effect to an otherwise valid provincial program. The impugned legislation, however, cannot be characterized as indistinguishable from the provisions of the Code.

 

                   The record before the courts on the issue of whether or not the constitutionally protected right to freedom of thought or expression had been infringed was inadequate and could not serve as a base upon which to build an argument that this law violated that right.

 

                   Per Beetz J.: The licensing conditions imposed by the Board constitute a valid provincial regulatory scheme that falls within the scope of s. 92(13)  and (16)  of the Constitution Act, 1867 . This scheme, in view of its valid provincial object, can operate concurrently with the Code provisions.

 

Cases Cited

 

By Dickson C.J.

 

                   Considered: Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161; distinguished: Westendorp v. The Queen, [1983] 1 S.C.R. 43; referred to: Attorney‑General for Ontario v. Attorney‑General for the Dominion, [1896] A.C. 348; Attorney‑General of Manitoba v. Manitoba Licence Holders' Association, [1902] A.C. 73; Hodge v. The Queen (1883), 9 App. Cas. 117; Russell v. The Queen (1882), 7 App. Cas. 829; Citizens Insurance Co. of Canada v. Parsons (1881), 7 App. Cas. 96; Smith v. The Queen, [1960] S.C.R. 776.

 

By Estey J.

 

                   Considered: Hodge v. The Queen (1883), 9 App. Cas. 117; L'Abbé v. Ville de Montréal, [1969] B.R. 1098; R. v. Skagstead and Skagstead (1963), 43 D.L.R. (2d) 315; Re Sharlmark Hotels Ltd. and Municipality of Metropolitan Toronto (1981), 32 O.R. (2d) 129; Cal Investments Ltd. v. City of Winnipeg (1978), 84 D.L.R. (3d) 699; Nova Scotia Board of Censors v. McNeil, [1978] 2 S.C.R. 662; Attorney General of Canada and Dupond v. City of Montreal, [1978] 2 S.C.R. 770; distinguished: Rio Hotel Ltd. v. Liquor Licensing Board (1983), 47 N.B.R. (2d) 436; Westendorp v. The Queen, [1983] 1 S.C.R. 43; disapproved: Re Koumoudouros and Municipality of Metropolitan Toronto (1985), 23 C.C.C. (3d) 286, reversing (1984), 45 O.R. (2d) 426, 11 C.C.C. (3d) 364; Re Nordee Investments Ltd. and City of Burlington (1984), 48 O.R. (2d) 123; Re Sherwood Park Restaurant Inc. and Town of Markham (1984), 48 O.R. (2d) 449; referred to: Attorney‑General for Ontario v. Attorney‑General for the Dominion, [1896] A.C. 348; Attorney‑General of Manitoba v. Manitoba Licence Holders' Association, [1902] A.C. 73; Bédard v. Dawson, [1923] S.C.R. 681; Scowby v. Glendinning, [1986] 2 S.C.R. 226; Attorney‑General for Ontario v. Hamilton Street Railway Co., [1903] A.C. 524; Proprietary Articles Trade Association v. Attorney‑General for Canada, [1931] A.C. 310; Reference re Validity of Section 5(a) of the Dairy Industry Act (Margarine Reference), [1949] S.C.R. 1; Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161; R. v. Verrette, [1978] 2 S.C.R. 838.

 

By Beetz J.

 

                   Referred to: Provincial Secretary of Prince Edward Island v. Egan, [1941] S.C.R. 396.

 

Statutes and Regulations Cited

 

Canadian Charter of Rights and Freedoms , s. 2 (b).

 

Constitution Act, 1867 , ss. 91(27) , 92(13) , (16) .

 

Criminal Code, R.S.C. 1970, c. C‑34, ss. 159(2) (b), 163 , 169 , 170 , 170(1) , 171 .

 

Liquor Act, R.S.S. 1940, c. 279, s. 264(9).

 

Liquor Control Act, R.S.N.B. 1973, c. L‑10, ss. 14(1)(a), (a.1), (b), 63, 63.01, 63.01(5).

 

Liquor Control Act, 1956, S.M. 1956, c. 40.

 

Municipal Act, R.S.O. 1970, c. 284.

 

                   APPEAL from a judgment of the New Brunswick Court of Appeal (1986), 29 D.L.R. (4th) 662, 47 N.B.R. 436, 124 A.P.R. 436, dismissing an application for judicial review of the constitutional validity of s. 63.01(5) of the Liquor Control Act, R.S.N.B. 1973, c. L‑10. Appeal dismissed.

 

                   Julie Durette and Kevin McNeil, for the appellant.

 

                   B. Richard Bell, for the respondent.

 

                   Marc Richard and Bruce Judah, for the inter­vener the Attorney General for New Brunswick.

 

                   Cheryl Crane, for the intervener the Attorney General for Saskatchewan.

 

                   The judgment of Dickson C.J. and McIntyre, Wilson and Le Dain JJ. was delivered by

 

1.                The Chief Justice‑‑The issue in this appeal is whether a province has legislative authority to prevent "nude entertainment" as one aspect of a legislative scheme regulating the sale of liquor in the province. I have had the benefit of reading the reasons for judgment prepared by my colleague, Justice Estey, and although I am in full accord with his disposition of the appeal, I prefer to reach that conclusion by a different route. I am happy to adopt Justice Estey's recitation of the facts and judicial history of this case.

 

2.                It has long been settled that under s. 92(13)  and (16)  of the Constitution Act, 1867 , the provinces are vested with legislative authority to regulate the conditions for the sale and consumption of alcohol within the province. See Attorney‑General for Ontario v. Attorney‑General for the Dominion, [1896] A.C. 348 (P.C.), and Attorney‑General of Manitoba v. Manitoba Licence Holders' Association, [1902] A.C. 73 (P.C.) It is also well settled that in regulating the distribution of alcohol, a province may attach conditions to any licence with a view to providing for the "good government" of liquor outlets. See Hodge v. The Queen (1883), 9 App. Cas. 117, at p. 131. It seems clear therefore that s. 63.01(5) of the Liquor Control Act, R.S.N.B. 1973, c. L‑10, as am., which permits the provincial Liquor Licensing Board to attach conditions to a liquor licence prohibiting "specified kinds of live entertainment" in licensed premises, is prima facie within the legislative competence of the New Brunswick Legislature.

 

3.                The difficulty in this case, however, arises because, in granting entertainment licence 5199‑E to Rio Hotel Ltd., the Liquor Licensing Board imposed a condition preventing all "nude entertainment". The appellant contends that this condition relates to public morality and therefore falls within the exclusive jurisdiction of the federal Parliament under the criminal law power of s. 91(27)  of the Constitution Act, 1867 . Parliament has indeed enacted legislation which relates directly or indirectly to public nudity (ss. 159(2) (b), 163 , 169  and 170  of the Criminal Code ). It is common ground that these Criminal Code  provisions are intra vires the Parliament of Canada. The dispute therefore resolves itself into the following question: Can a provincial prohibition of nude entertainment attached to a liquor licensing scheme operate notwithstanding the more general but related prohibitions contained in the Code?

 

4.                The Attorney General for New Brunswick submits that the impugned licence condition is part of a legislative scheme which "has a purpose entirely different from that sought to be served by the criminal law". While the criminal law addresses nudity and obscenity, the licence condition is simply directed toward the types of entertainment available as a marketing device for the sale of liquor within the province. This submission clearly calls into play the "aspect doctrine" first articulated by the Privy Council in the late nineteenth century. The doctrine was summarized neatly by Their Lordships in Hodge v. The Queen, at p. 130: "subjects which in one aspect and for one purpose fall within sect. 92, may in another aspect and for another purpose fall within sect. 91". The inverse proposition is equally true. See also Russell v. The Queen (1882), 7 App. Cas. 829, and Citizens Insurance Co. of Canada v. Parsons (1881), 7 App. Cas. 96.

 

5.                The operation of the aspect doctrine was discussed fully by this Court in Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161, and the relationship between federal legislative paramountcy and the aspect doctrine was explained in some detail. It is unnecessary to here reiterate the analysis. Suffice it to say that when a particular legislative subject matter can be said to have a "double aspect", so that viewed in one light the subject falls within the legislative competence of Parliament and, viewed in another light, within the legislative competence of a provincial legislature, federal legislation will only be paramount when there is a direct conflict with the relevant provincial legislation. Mere duplication does not constitute a "direct conflict". Rather, the phrase suggests that for federal paramountcy to operate, the related federal and provincial legislation must be contradictory. Relying upon the holding of Martland J. in Smith v. The Queen, [1960] S.C.R. 776, the majority in Multiple Access Ltd. held, at p. 191:

 

In principle, there would seem to be no good reasons to speak of paramountcy and preclusion except where there is actual conflict in operation as where one enactment says "yes" and the other says "no"....

 

The double aspect doctrine will apply whenever the contrast between the relative importance of the federal and provincial characteristics of a particular subject matter is not sharp.

 

6.                Applying these principles to the circumstances of the case at bar, I conclude that the provincial legislation which authorizes the impugned licence condition is intra vires the Legislature of New Brunswick. The legislation is, as I have stated, prima facie related to property and civil rights within the Province and to matters of a purely local nature. The Legislature seeks only to regulate the forms of entertainment that may be used as marketing tools by the owners of licensed premises to boost sales of alcohol. Although there is some overlap between the licence condition precluding nude entertainment and various provisions of the Code, there is no direct conflict. It is perfectly possible to comply with both the provincial and the federal legislation. Moreover, the sanction for breach of the provincially‑imposed licence conditions is suspension or cancellation of the liquor licence. No penal consequences ensue for the nude entertainer or for the holder of the licence. Under the relevant Code provisions, the primary object is obviously to punish entertainers and proprietors who breach the prohibitions on public nudity. I cannot say that the federal characteristics of this subject matter are palpably more important than the provincial characteristics. The provincial regulatory scheme relating to the sale of liquor in the Province can, without difficulty, operate concurrently with the federal Criminal Code  provisions.

 

7.                I should point out that the instant case is distinguishable from the situation discussed in Westendorp v. The Queen, [1983] 1 S.C.R. 43. In that case, the City of Calgary enacted a by‑law purportedly in relation to the use of city streets. In fact, one section of the by‑law was a blatant and colourable attempt to punish prostitution. That section was held by this Court to be an "intruded provision" that bore no relation, either in subject‑matter or in the scale of penalties, to the remainder of the by‑law. In other words, the prostitution provision could not be said to relate to any head of provincial jurisdiction; it was not truly part of a regulatory scheme authorized under s. 92(13)  or (16)  of the Constitution Act, 1867 . The licence conditions in the instant case are only part of a comprehensive scheme regulating the sale of liquor in New Brunswick. There is no colourable intrusion upon a federal head of jurisdiction.

 

8.                Finally, I agree with Estey J. that this is not an appropriate case in which to deal with freedom of expression as guaranteed by s. 2 (b) of the Canadian Charter of Rights and Freedoms .

 

9.                I would dismiss the appeal with costs.

 

                   The following are the reasons delivered by

 

10.              Beetz J.‑‑I agree with the Chief Justice and with Mr. Justice Estey that the licensing conditions imposed by the Board constitute a valid provincial regulatory scheme that falls within the scope of s. 92(13)  and (16)  of the Constitution Act, 1867 . I also agree with the Chief Justice that this scheme, in view of its valid provincial object, can operate concurrently with the Criminal Code  provisions: see Provincial Secretary of Prince Edward Island v. Egan, [1941] S.C.R. 396.

 

11.              I would dismiss the appeal with costs.

 

                   The reasons of Estey and Lamer JJ. were delivered by

 

12.              Estey J.‑‑This appeal concerns the interplay between provincial regulations relating to the sale of alcoholic beverages in the province and the several provisions in the Criminal Code  relating to conduct in a field said to be entertainment.

 

13.              The Province of New Brunswick enacted a comprehensive statute setting forth a licensing system of outlets throughout the province where citizens can purchase alcoholic beverages. The operators of the Rio Hotel Ltd. obtained two licences under this statutory program: the first was for the establishment of the premises themselves as a liquor outlet, and the second was an entertainment licence relating to the provision of live entertainment. This entertainment licence included a number of conditions. It is these latter conditions with which this appeal is principally concerned.

 

14.              There can be no doubt at this stage in the constitutional history of Canada that the provinces have the authority under s. 92(13)  or (16)  to establish by legislation a plan for the sale and consumption of alcoholic beverages throughout the province: Attorney‑General for Ontario v. Attorney‑General for the Dominion, [1896] A.C. 348 (P.C.); Attorney‑General of Manitoba v. Manitoba Licence Holders' Association, [1902] A.C. 73 (P.C.) It has also been determined that in the course of regulating that distribution system, the province can prohibit certain activities inside the premises licensed under the statutory plan: Hodge v. The Queen (1883), 9 App. Cas. 117 (P.C.) Historically, some provinces have in the past prohibited all forms of entertainment and all activities other than the consumption of the alcoholic beverages in these licensed premises. For example, in the Province of Saskatchewan, The Liquor Act, R.S.S. 1940, c. 279, s. 264(9), provided as follows:

 

                   264. ...

 

                   (9) No slot machine, playing cards, vaudeville attraction, dancing, musical device, radio or any other form of entertainment, or any gambling device whatsoever, shall be permitted in that part of the hotel specified in the licence where beer may be kept, sold and consumed.

 

15.              Meanwhile, the Parliament of Canada, by a series of provisions in the Code, has legislated with respect to nudity (s. 170 ), indecent acts (s. 169 ), immoral, indecent or obscene performances in a theatre (s. 163 ), indecent shows in public (s. 159(2) (b)), and causing a disturbance in or near a public place (s. 171 ). Some of these provisions relate to specified premises and others are made applicable at large. It may well be that Parliament could legislate with respect to conduct in taverns specifically, as in the case of theatres, but there is no such provision in the Code at present and apparently no court has been required to answer this question thus far in our constitutional history.

 

16.              Under the Liquor Control Act, R.S.N.B. 1973, c. L‑10, the Province of New Brunswick established a Liquor Licensing Board which has the duty to issue, refuse, cancel or suspend liquor licences. Under s. 63, the Board may grant a number of different licences to sell liquor, such as a "tavern licence", a "restaurant licence" or a "cabaret licence". In 1983, the Act was amended so as to provide for an additional licensing requirement in s. 63.01. This new section provides that no holder of a liquor licence shall make available "live entertainment within premises in respect of which his licence is issued unless he holds a licence issued under this section". Section 63.01(5) also provides that the Board may attach conditions to a licence issued under s. 63.01, and in doing so the Board may "regulate and restrict the nature and conduct of live entertainment and may prohibit specified kinds of live entertainment".

 

17.              On 24 May, 1984, entertainment licence 5199‑E was granted to the appellant, Rio Hotel Ltd., pursuant to s. 63.01 of the Liquor Control Act. The following conditions were attached to this licence:

 

1.In granting Entertainment Licences the Board will NOT approve nude entertainment or other types of live entertainment that in any form or manner exposes to public view the genital areas or buttocks of a male performer or the genital areas or buttocks or breasts of a female performer.

 

2.All licensees providing entertainment that involves performances, contests, acts or activities that presuppose the removal of any piece or article of clothing at any stage thereof, or presuppose a particular state of undress for the performance, contest, act or activity itself, by either male or female performers, and including but not restricted to striptease dancers, gogo dancers, exotic dancers, models, female impersonators, wet clothing contests, best body parts contests, and bands, singers or musicians, shall adhere to the following restrictions which shall be conditions attached to their licences:

 

(A)All such entertainers must perform on an elevated stage ONLY;

 

(B)The stage must be constructed and located so as to allow the entertainers to enter and exit from the stage without proceeding through those areas of the premises in which liquor may be served or consumed;

 

(C)Patrons of the premises shall NOT be seated or at any time be closer than two meters from the stage during any such performance;

 

(D)The entertainers shall NOT mingle, associate or socialize with the patrons at any time before, during or following their performance.

 

3.In granting entertainment licences the Board will also prohibit or restrict other types of entertainment which in its judgment is detrimental to the orderly operation of a licensed premises.

 

18.              It is important to note that the Code provisions above and the conditions attached to the provincial licence can be distinguished in that the Code provisions are primarily directed at punishing the entertainer and/or the proprietor in question, whereas the provincial regulation only applies to the owner of the licensed premises and not to the entertainer. No submission was made in this Court or in the Court of Appeal to the effect that the provisions of the Code mentioned above did not apply to conduct within these licensed premises. The issue therefore is whether or not these licensed conditions imposed by the Board are an infringement upon the federal criminal power or whether these conditions may be appended to or enacted in support of a valid provincial legislative scheme.

 

19.              The principal debate in this appeal focusses on the first condition attached to the entertainment licence, supra, which the appellant argues is purely and simply the enactment by the province of criminal law. The Province of New Brunswick has in the past enacted similar regulations which found themselves before the courts in Rio Hotel Ltd. v. Liquor Licensing Board (1983), 47 N.B.R. (2d) 436 (C.A.), which for convenience will hereafter be referred to as "Rio 1". The statute before the Court [R.S.N.B. 1973, c. L‑10] in those proceedings provided as follows:

 

                   14(1) The Board may cancel a licence or permit or suspend a licence or permit for such period as it considers proper where, after a hearing in accordance with section 12, the board is satisfied that

 

(a) the person to whom the licence or permit was issued has violated a provision of this Act or the regulations or has failed to comply with any condition of the licence or permit,

 

(a.1) entertainment in licensed premises to which the licence or permit relates was immoral, indecent or obscene, or

 

(b) such other grounds for cancellation or suspension of a licence or permit, as prescribed in this Act, exist.

 

20.              These regulations closely follow the terminology of the Code and indeed would appear to be the establishment of an offence identical with that in s. 159(2) of the Code, except that the provincial legislation is applicable only to conduct within licensed premises. The New Brunswick Court of Appeal in Rio 1, supra, found this regulation to be ultra vires the province as an invasion of the federal criminal competence.

 

21.              It need hardly be observed that a province could provide in its liquor control legislation a condition that a conviction of the licensee under the Code would be grounds for cancellation of the licence. It does not follow, however, that it is open to the province to reenact the criminal provision and accomplish the same result by effectively "convicting" the licensee of a criminal offence already existing in federal law, under its own process and in its own forum.

 

22.              As already noted there have been several cases where the provincial regulation of conduct within licensed premises has been held valid. In Hodge v. The Queen, supra, the Privy Council held that a regulation of the provincial Liquor Licence Commissioners, which prohibited the use of a billiard table during any time when the sale of liquor was prohibited by the Liquor Licence Act, was intra vires the province under s. 92(16) . Their Lordships held at p. 131 that "the powers intended to be conferred by the Act in question, when properly understood, are to make regulations in the nature of police or municipal regulations of a merely local character for the good government of taverns ... and such as are calculated to preserve, in the municipality, peace and public decency, and repress drunkenness and disorderly and riotous conduct".

 

23.              In L'Abbé v. Ville de Montréal, [1969] B.R. 1098, the Quebec Court of Appeal held that a by‑law of the City of Montreal, which provided that it was unlawful for the employees and entertainers in establishments dispensing alcoholic beverages to "mingle with the customers of the establishment, to drink, dance or sit at the same table or counter with a customer", was intra vires the City of Montreal. Casey J.A. stated, at p. 1101, that as regards establishments serving alcoholic beverages it is "essential that the City have the power to do what it can to prevent abuses and to assure that such establishments be operated so as to preserve peace and order and to conform with communal standards of decency and good morals". The Court found, at p. 1102, that the by‑law in question did not encroach on the field of criminal law, and that the acts contemplated by the by‑law did not fall "into an area already indicated by the Federal Government as being within the general field of criminal law".

 

24.              In R. v. Skagstead and Skagstead (1963), 43 D.L.R. (2d) 315, the Manitoba Court of Appeal found that a section of the provincial Liquor Control Act, 1956, S.M. 1956, c. 40 which provided that "no person shall be disorderly in licensed premises" was valid provincial legislation in relation to the administration of the Liquor Control Act and the control of premises licensed thereunder. The pith and substance of this regulation was to control the operation of licensed premises "for the purpose and to the extent necessary to enforce the stringent statutory provisions for regulating such licensed premises" (at p. 316). Further, "no effort was made by the Legislature to copy any part of the Criminal Code  nor to amplify or enlarge any Code prohibitions" (at p. 317). The court further held that the use of the word "disorderly" in the by‑law did not make it the same offence as in s. 171 of the Code (formerly s. 160 ) which relates to causing a disturbance in a public place.

 

25.              In Re Sharlmark Hotels Ltd. and Municipality of Metropolitan Toronto (1981), 32 O.R. (2d) 129, (later overturned by the Ontario Court of Appeal in Re Koumoudouros and Municipality of Metropolitan Toronto (1985), 23 C.C.C. (3d) 286), the Ontario Divisional Court, Saunders J. speaking for a unanimous Court (1984) 45 O.R. (2d) 426, 11 C.C.C. (3d) 364, considered an amendment to the Municipal Act, R.S.O. 1970, c. 284, which authorized municipalities to pass by‑ laws licensing, regulating and inspecting "adult entertainment parlours". The Court concluded that the legislation addressed the regulation of a permitted business and was thus intra vires the province. Pursuant to this provision in the Municipal Act, the City of Toronto had enacted a by‑law which provided for the regulation of "adult entertainment parlours" (which includes, but is not limited to, premises licensed to serve alcohol). This by‑law prohibited entertainers in these parlours from exposing specified areas of the body. This provision was also held to be in relation to the regulation of a permitted business and within the powers of the municipality. Although the Code included nudity provisions in s. 170 , the impugned by‑law was upheld. The Code offences refer to morality, indecency or obscenity. The Divisional Court found that the by‑law did not address these issues. The by‑law may have been designed to create conditions to prevent crime or even as legislation relating to morality, but it nonetheless did not encroach on the forbidden field of criminal law. It is but another illustration of the subtle but discernible distinction between criminal legislation and regulation established to support and promote the operation of valid provincial legislative object.

 

26.              The Court of Appeal of Manitoba examined the regulation of massage parlours by a municipality in Cal Investments Ltd. v. City of Winnipeg (1978), 84 D.L.R. (3d) 699. The regulations required people working in a massage parlour to wear "non‑transparent outer garments" from the neck to the knee. It was found that the pith and substance of the by‑law was the regulation of the massage parlour trade and did not invade the federal power over criminal law. The by‑law was not concerned with morality but rather was designed to regulate the manner in which the trade in question should be carried on.

 

27.              In each of the above‑cited cases the provincial regulation in question was directed at the orderly operation of the licensed premise in question, be it a tavern, adult entertainment parlour, or a massage parlour. Conduct which would detract from the efficiency and orderliness of these operations was either the grounds for the cancellation of the licence or for process in the criminal courts of the provincial offence established in support of the provincial regulation.

 

28.              This interpretation of the valid exercise of provincial jurisdiction regarding licensed premises finds further support in the decision of this Court in Nova Scotia Board of Censors v. McNeil, [1978] 2 S.C.R. 662. In McNeil, this Court considered the validity of provincial legislation granting broad censorship powers over exhibitions, performances, and films in Nova Scotia. The provincial legislation in question provided for the licensing and regulation of theatres. The statute provided that no theatre owner could exhibit any film that had not been authorized by the Amusement Regulation Board. The legislation granted the Board the authority to revoke or cancel any licence issued under the Act if the theatre owner violated the Act.

 

29.              The five member majority of the Court held the legislation (except for one regulation) to be intra vires the province on the basis that the impugned legislation addressed the regulation of a trade or business within the province, properly falling within the scope of s. 92(13)  of the Constitution Act, 1867 . The Court also found the legislation valid on the grounds that it was regulatory and preventative rather than penal; the legislation was not concerned with creating a criminal offence or providing for its punishment (as in Bédard v. Dawson, [1923] S.C.R. 681). Finally, the Court upheld the legislation as addressing the determination of "what is and what is not acceptable for public exhibition on moral grounds", this being a matter of a "local and private nature in the Province" within the meaning of s. 92(16)  of the Constitution Act, 1867 , (at p. 699). The most persuasive ground upon which to uphold this legislation is that the regulation relates to the valid regulation of a trade or business within the province. It is possible that the reference to the provincial jurisdiction over the morality of the public exhibition in question, as being a matter of a "local and private nature", could be distinguished. It may well be (although it is not necessary, in my view, to decide so now) that this point in McNeil will be confined by the courts to the precise facts of that case.

 

30.              In McNeil, supra, the Court did find one regulation imposed by the Act to be ultra vires the Province. Regulation 32 prohibited the performance of any "indecent or improper performance" in any theatre. The Court, speaking through Ritchie J., struck down this regulation as being "indistinguishable from the like provisions of the Criminal Code " (at p. 699). This provision would have led to the problem of the enforcement of criminal law in the guise of a provincial regulatory scheme. It thereby carried the legislative activities of the province into the realm of s. 91(27)  and hence its condemnation.

 

31.              In Attorney General of Canada and Dupond v. City of Montreal, [1978] 2 S.C.R. 770, this Court addressed an analogous situation. The municipality was found constitutionally capable of regulating parades on public streets as being a "local matter" authorized by s. 92(16)  of the Constitution Act, 1867 . Citing Hodge v. The Queen, supra, as authority for the proposition that the municipality can act to preserve peace and repress disorderly conduct in the context of a valid provincial program, the Court held that the municipality could regulate in relation to the municipal public domain. The regulation was in nature preventative, not punitive. This was, therefore, a valid exercise of provincial jurisdiction. Dupond, supra, was a pre‑Charter  case raising only the issue of s. 91(27)  of the Constitution Act, 1867 . The control and regulation of traffic on the streets is a matter of local concern and parades by their very nature usurp the entire use of a street or throughway for the use and benefit of one cause or body. The chaos which could result from unannounced, extended and repeated arrogation of the streets by one body or group might dislocate the entire community. Transportation and communication in large urban areas are a vital, albeit local, concern and as such have been assigned constitutionally to the province and through it to the municipality.

 

32.              This sometimes narrow line between the valid criminal law exercise by Parliament and valid exercise by the province of a right to create licensing provisions or various other regulations or prohibitions in support of an otherwise valid provincial legislation program has seen many instances where the provincial legislation was struck down: Westendorp v. The Queen, [1983] 1 S.C.R. 43; Rio Hotel Ltd. v. Liquor Licensing Board, ("Rio 1"), supra; Re Koumoudouros and Municipality of Metropolitan Toronto, supra; Re Nordee Investments Ltd. and City of Burlington (1984), 48 O.R. (2d) 123 (C.A.); and Re Sherwood Park Restaurant Inc. and Town of Markham (1984), 48 O.R. (2d) 449 (C.A.)

 

33.              This Court in Westendorp, supra, struck down a Calgary by‑law which purported to control the practice of prostitution on the streets of that city. Conduct relating to prostitution is a classic or traditional crime of great antiquity that clearly falls within the mandate of Parliament under the Constitution Act, 1867 . The city sought unsuccessfully to uphold the validity of this provincial regulation as an aspect of provincial control of traffic in the streets. The thrust of the by‑law was not however aimed at traffic but was, in pith and substance, criminal law legislation. As Laskin C.J. said at pp. 53‑54:

 

If a province or municipality may translate a direct attack on prostitution into street control through reliance on public nuisance, it may do the same with respect to trafficking in drugs. And, may it not, on the same view, seek to punish assaults that take place on city streets as an aspect of street control!

 

34.              As was stated in Scowby v. Glendinning, [1986] 2 S.C.R. 226, at p. 236, "Criminal law is easier to recognize than to define. It is easier to say what is not criminal law than what is." In Scowby, supra, this Court (at pp. 236‑38) founded its discussion of the ambit of the federal power in criminal law on the following three cases: Attorney‑General for Ontario v. Hamilton Street Railway Co., [1903] A.C. 524, at pp. 528‑29; Proprietary Articles Trade Association v. Attorney‑General for Canada, [1931] A.C. 310, at p. 324; and Reference re Validity of Section 5(a) of the Dairy Industry Act (Margarine Reference), [1949] S.C.R. 1, at p. 49. The Court then concluded at p. 238:

 

The terms of s. 91(27) of the Constitution must be read as assigning to Parliament exclusive jurisdiction over criminal law in the widest sense of the term. Provincial legislation which in pith and substance falls inside the perimeter of that term broadly defined is ultra vires. Parliament's legislative jurisdiction properly founded on s. 91(27)  may have a destructive force on encroaching legislation from provincial legislatures, but such is the nature of the allocation procedure in ss. 91 and 92 of the Constitution.

 

35.              In Dupond, supra, the activity essentially related to the efficient operation of the streets and the prevention of conditions which in turn could give rise to disorderly conduct on a large scale. Thus it was regulation both with reference to the streets and with reference to the prevention of the incidence of crime, both of which are valid provincial objects. In Westendorp, supra, the thrust of the local legislation was the control of activity historically recognized as criminal and while the focus of the by‑law was on the streets, it could not, except on a colourable basis, be described as street traffic legislation.

 

36.              In Koumoudouros, supra, the Divisional Court found provincial regulations not unlike those before the Court in this appeal to be valid. The regulations in this case specified dress restrictions for entertainers in "adult entertainment parlours", prohibiting exposure of specified areas of the entertainer's body. The Court of Appeal (at (1985), 23 C.C.C. (3d) 286) reversed the finding of the Divisional Court and struck down this regulation on the basis that the province was seeking to regulate public morals, a matter falling under s. 91(27) .

 

37.              A similar result can be found in Nordee, supra, in which the Ontario Court of Appeal struck down municipal dress regulations in places for the "lodging, reception, refreshment, or entertainment of the public". Although the Court did find that the regulation was duly enacted as part of a licensing scheme within provincial jurisdiction, the Court found that the by‑law conflicted with s. 170(1) of the Code, the provision governing nudity. In such a conflict, the Court held that the federal legislation must prevail (Multiple Access Ltd. v. McCutcheon, [1982] 2 S.C.R. 161). Shortly thereafter the result in Nordee was again upheld by the Ontario Court of Appeal in Re Sherwood Park, supra, however on different grounds. The Court in Re Sherwood Park simply held that the regulation was not part of the valid provincial regulatory scheme and was an invasion of federal criminal law power; the Court did not rely upon the doctrine of paramountcy.

 

38.              As in the case presently before the Court, the regulations in Koumoudouros, Nordee, and Re Sherwood Park related only to premises duly licensed and regulated by the province. The regulations in Koumoudouros were restricted to "adult entertainment parlour[s] licensed under The Liquor Licence Act". The regulations in Nordee and Re Sherwood Park were restricted to "eating establishments", defined as places for the "reception, refreshment or entertainment" of the public. Nonetheless, the Ontario Court of Appeal held in all three cases that the impugned regulations were ultra vires the province. In my respectful view, the dispositions in Koumoudouros, Nordee and Re Sherwood Park, supra, were in error.

 

39.              The segregation of the federal and the provincial powers in all the authorities cited above relates to two different situations. The first situation concerns the regulation of licensed premises, and the provincial enactment in question goes to the imposition of conditions to be maintained by the licensee in order to maintain his licence. The second situation occurs where a province purports to append penalties to a valid provincial undertaking such as the regulation of streets in a municipality. In the former case, it is much easier to determine provincial validity because the reference to conduct is only in relation to the operation of an activity which properly falls within provincial competence. Thus the licensing program is part of a general provincial regulatory program. Consequently, the provincial legitimacy is found in s. 92(13)  and/or (16). In the second category the problem is rendered more difficult by the fact that the provincial regulation reaches outside premises owned or controlled by a provincial licensee. In that circumstance, the province again must find a valid provincial regulatory program and must confine the offences created in support of that program to those which are reasonably necessary for that purpose.

 

40.              The longer the penalty and the closer the terminology comes to describing conduct traditionally criminal, the more doubtful the validity of the provincial enactment. The exclusive right in Parliament to legislate with reference to criminal law and criminal procedure may not be eroded by provincial legislation disguised as that which is necessary to give effect to an otherwise valid provincial program. In Westendorp, supra, the municipality failed to demonstrate the existence of such a program, but in Dupond, supra, the Court was able to discern the existence of such legitimate provincial activity. In Rio 1, supra, at p. 441, despite the fact that the impugned legislation was part of a valid provincial licensing scheme, the provision in question was found to be indistinguishable from the like provision of the Code. Therefore, as in Westendorp, supra, the legislation clearly invaded the exclusive criminal jurisdiction of Parliament and was ultra vires the province. However, in this appeal, the impugned legislation cannot be characterized as indistinguishable from the provisions of the Code. It is, rather, a valid provincial regulation that forms an important and integral part of a valid provincial licensing scheme.

 

41.              It is clear, therefore, that we are here concerned with provincial legislative activity in the first category described above and, in particular, we are concerned with a provincial licensing scheme in relation to the sale of alcohol. The control of the sale of alcoholic beverages has, since the earliest times in our constitutional history, engaged the attention of the courts. It is clear from judgments cited above and many others that both sovereignties have a legitimate interest in some element of the production, distribution and consumption of alcohol. The province historically has always been found to have an interest in the sale of alcoholic beverages within the province. Attorney‑General for Ontario v. Attorney‑General for the Dominion, supra, and Attorney‑General of Manitoba v. Manitoba Licence Holders' Association, supra, find provincial jurisdiction in both s. 92(13)  (property and civil rights) and s. 92(16)  (matters of a merely local or private nature in the province). The supervision of taverns, beverage rooms, hotels, restaurants and other facilities to which the public may have recourse for the consumption of alcoholic beverages lends itself by its very nature to local administration. There is, of course, the omni‑ present national interest in criminal conduct in or out of these premises but it is to the province that the Constitution Act, 1867  looks for the daily establishment and supervision of these businesses. By their very nature these premises are matters of local interest and concern and they clearly operate within the realm of property and civil rights. It is not surprising, therefore, to find, albeit with some historic lapses, the regulatory root for these activities within the provincial legislature. Where the program is founded on a licensing system with regulations and conditions related to the provision of a licence, and where the province does not purport to establish an offence that is criminal in character, it is clearly constitutionally legitimate. The valid provincial regulatory program is the licensing system. In the circumstances of this appeal the picture is even clearer because the licensing system is related entirely to the local operations of premises engaged in the business of selling alcoholic beverages to the inhabitants. Entertainment is a natural "marketing tool", to use the words of the respondent, in these premises. In today's market it would seem essential that provident regulations concerning the consumption of alcoholic beverages should take the availability and the nature of entertainment in these premises into account in determining the public interest in the granting and renewal of licences for the operation of these outlets.

 

42.              As a result, in this appeal there is to be found a provincial legislative program relating to the li‑ censing of premises for the sale of alcoholic beverages and for the employment of entertainment as an aid to the marketing of those services. All of this falls within the provincial ambit. It is not necessary to find support for this provincial legislation either under the alleged right of the province to regulate with respect to "local morality" (McNeil, supra) or under the doctrine of paramountcy as it is outlined in Multiple Access Ltd. v. McCutcheon, supra.  In this regard, I respectfully disagree with the Court of Appeal below in this appeal. If the impugned legislation was in pith and substance in relation to criminal law, as was found in Scowby v. Glendinning, supra, (at p. 236), it would fall within the "exclusive jurisdiction" of Parliament. Instead, the impugned legislation now before this Court does not touch upon the forbidden field of criminal law but is a regulation enacted in relation to a valid provincial licensing scheme.

 

43.              Brief reference was made by the appellant in this Court to the application of s. 2 (b) of the Canadian Charter of Rights and Freedoms  to this provincial legislation. Section 2 (b) provides:

 

                   2. Everyone has the following fundamental freedoms:

 

                                                                    ...

 

(b) freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication;

 

The record before the courts on this issue is woefully inadequate and cannot serve as a base upon which to build an argument that this law violates the above provision of the Charter . The nature of the conduct, said to amount to nude dancing, is not revealed in the record. There is no description of any such conduct, the extent of the alleged nudity, the nature of the "expression" in question, or anything else of a factual nature germane to this issue (R. v. Verrette, [1978] 2 S.C.R. 838). Accordingly, the Court did not call upon the respondent to reply on that matter. I therefore do not find it necessary to deal with this issue in this appeal.

 

44.              I therefore would dismiss the appeal with costs.

 

                   Appeal dismissed with costs.

 

                   Solicitors for the appellant: Valcourt, Picard, Morneault, Durette & McNeil, Edmundston.

 

                   Solicitors for the respondent: Wood, Buchanan & Bell, Fredericton.

 

                   Solicitors for the intervener the Attorney General for New Brunswick: Bruce Judah and M. Richard, Fredericton.

 

                   Solicitor for the intervener the Attorney General for Saskatchewan: Kenneth W. McKay, Regina.

 

 

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