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Constitutional law — Construction of an airport on land belonging to the federal government — Contract with the federal government — Aeronautics — Nature of the undertaking — Application of provincial laws on wages and working conditions — British North Ameri­ca Act, ss. 91-92 — Minimum Wage Act, R.S.Q. 1964, c. 144 — Construction Industry Labour Relations Act, S.Q. 1968, c. 45 — Act respecting the Construction Industry, S.Q. 1970, c. 34 — Fair Wages and Hours of Labour Act, R.S.C. 1970, c. L-3, ss. 2, 3(1)(a).

The respondent Minimum Wage Commission sought to recover from appellant, Construction Montcalm Inc. (“Montcalm”), on behalf of the latter’s employees, wages, vacations and holidays and levies owed pursuant to the Minimum Wage Act and various provincial stat­utes governing labour relations in the construction industry. A constitutional issue arose whether such laws were applicable to employees of a Quebec building enterprise which, under a contract with the Crown in right of Canada, was doing construction work on the runways of a new international airport (Mirabel) on federal Crown land. The Superior Court judge answered in the negative, but a majority of the Court of Appeal concluded that Montcalm was subject to the wage legis­lation and decrees of the Province. Appellant appealed to this Court and made three submissions: (1) aeronau­tics is a class of subjects which comes under exclusive federal authority and comprises the construction of airports, including the conditions of employment of workers engaged in the construction of airports; furthermore, Mirabel airport is a federal work or undertaking; (2)

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provincial law does not apply on federal government lands; (3) the contract is governed by the Fair Wages and Hours of Labour Act, a federal statute.

Held (Laskin C.J. and Spence J. dissenting): The appeal should be dismissed.

Per Martland, Ritchie, Pigeon, Dickson, Beetz, Estey and Pratte JJ.: The issue must be resolved in the light of established constitutional principles, namely that the provinces have exclusive authority over labour relations and the terms of a contract of employment but, by way of exception to this principle, the federal Parliament may assert exclusive jurisdiction over these matters if it is shown that such jurisdiction is an integral part of its primary competence over some other single federal sub­ject (the Stevedoring case, [1955] S.C.R. 529). Thus Parliament has jurisdiction over the conditions of employment of a federal undertaking, that is one whose normal or habitual activities are a federal matter (Agence Maritime case, [1969] S.C.R. 851 and Letter Carriers’ case, [1975] 1 S.C.R. 178).

The first and primary argument of appellant does not meet the test set out in the Stevedoring case, as the construction of an airport is not in every respect an integral part of aeronautics. What wages shall be paid by an independent contractor like Montcalm to its employees engaged in the construction of runways is a matter so far removed from aerial navigation or from the operation of an airport that it cannot be said that the power to regulate this matter forms an integral part of federal competence over aeronautics. Notre-Dame de Bonsecours, [1899] A.C. 367, must be distinguished, since the impugned legislation does not purport to regu­late the structure of runways. Moreover, this argument implicitly but clearly ignores the requirement of the Agence Maritime and Letter Carriers’ cases that an undertaking cannot be characterized as a federal or provincial one on account of casual factors. In the case at bar, we have no choice but to presume that Montcalm is an ordinary building contractor, whose ordinary busi­ness is construction, a business which is not specifically federal. What a contractor builds is accidental, and the one work it happened to be constructing at the relevant time is not the decisive factor in determining the nature of the business.

Montcalm’s second submission cannot be admitted either. The exclusive power of the Province to make laws in relation to property and civil rights is territorially limited only by the words “in the Province”, and Mirabel is located in the Province. The enumeration of exclusive federal powers in s. 91 of the B.N.A. Act,

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including the power to make laws in relation to the public debt and property, operates as a limitation ratione materiae upon provincial jurisdiction, not as a territorial limitation. The impugned provisions do not relate to federal property, but they govern the civil rights of Montcalm and its employees on federal Crown lands; the latter do not constitute an extra-territorial enclave within provincial boundaries.

Montcalm’s third submission cannot succeed unless the impugned provisions are in conflict with the federal statute. It was incumbent upon Montcalm to establish that it could not comply with the provincial Act without committing a breach of the federal Act. Montcalm did not even attempt any such demonstration. Further, the impugned provisions add a term not to the contract between the federal government and Montcalm but to the contract between Montcalm and its employees, a term which is not incompatible with any applicable federal law.

Per Laskin C.J. and Spence J., dissenting: The con­tention that there can be a differentiation for constitu­tional purposes between construction and maintenance or operation of federal work or undertaking is inconsist­ent with a line of cases of the Privy Council and of this Court. In light of these precedents, the exclusive federal authority over aeronautics embraces authority over the construction as well as the maintenance of airports. Moreover, the case concerns a contract with the federal Crown for the execution of works on federal Crown land. Under s. 91(1A) of the B.N.A. Act, federal public property is within the exclusive domain of the federal Parliament, and the fact that what we have here is federal Crown property is itself enough to exclude pro­vincial legislation from any regulatory control over it and what is done on it. The contract between the Crown and Montcalm is also governed by federal statutes on wages and working conditions. If a province could extend its minimum wage legislation to such a federal Crown contract, this would be tantamount to adding a term to it, and it is clear that a Province cannot alter or modify the terms and conditions of a federal Crown contract entered into with a third party.

Toronto Electric Commissioners v. Snider, [1925] A.C. 396, followed; In re the validity of the Industrial Relations and Disputes Investigation Act, [1955] S.C.R. 529; In re the application of the Minimum Wage Act of Saskatchewan to an employee of a Revenue Post Office, [1948] S.C.R. 248; Quebec Minimum Wage Commission v. Bell Telephone Company of Canada, [1966] S.C.R. 767;

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Letter Carriers’ Union of Canada v. Canadian Union of Postal Workers, [1975] 1 S.C.R. 178; Canada Labour Relations Board v. City of Yellowknife, [1977] 2 S.C.R. 729; Agence Maritime Inc. v. Canada Labour Relations Board, [1969] S.C.R. 851; Johannesson. v. The Rural Municipality of West St. Paul, [1952] 1 S.C.R. 292; City of Toronto v. Bell Telephone Co., [1905] A.C. 52; Ottawa v. Shore and Horwitz Construction Co. (1960), 22 D.L.R. (2d) 247; R. v. Beaver Foundations Ltd. (1968), 69 D.L.R. (2d) 649; R. v. Concrete Column Clamps (1961) Ltd., [1972] 1 O.R. 42; Re United Association of Journeymen, etc. Local 496 and Vipond Automatic Sprinkler Co. Ltd. (1976), 67 D.L.R. (3d) 381; Madden v. Nelson and Fort Sheppard Railway Co., [1899] A.C. 626; Workmen’s Compensation Board v. Canadian Pacific Railway Company, [1920] A.C. 184; Campbell-Bennett Ltd. v. Comstock Midwestern Ltd., [1954] S.C.R. 207; Attor­ney General of the Province of Quebec v. Kellogg’s Co., [1978] 2 S.C.R. 211; Cardinal v. Attorney General of Alberta, [1974] S.C.R. 695; R. v. Smith, [1942] O.W.N. 387; Spooner Oils Ltd. v. Turner Valley Gas Conservation Board, [1933] S.C.R. 629; Ross v. Regis­trar of Motor Vehicles, [1975] 1 S.C.R. 5; Attorney General of Manitoba v. Manitoba Licence Holders’ Association, [1902] A.C. 73, referred to; R. v. Baert Construction Ltd., [1974] 4 W.W.R. 135, aff. by (1974), 51 D.L.R. (3d) 265, applied; Canadian Pacific Railway v. Notre-Dame de Bonsecours, [1899] A.C. 367, distinguished.

APPEAL against a decision of the Court of Appeal[1] reversing a judgment of the Superior Court. Appeal dismissed, Laskin C.J. and Spence J. dissenting.

François Mercier, Q.C., and Rolland Forget, for the appellant.

Benoit Belleau, André Tremblay and Serge Benoît, for the respondent.

Olivier Prat, for the intervenor, the Attorney General of Quebec.

William Henkel, Q.C., and C. J. Cummings, for the intervenor, the Attorney General of Alberta.

William N. Lawton, for the intervenor, the Attorney General of Saskatchewan.

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The judgment of Laskin C.J. and Spence J. was delivered by

THE CHIEF JUSTICE (dissenting)—This appeal, which is here by leave of this Court, involves the question whether certain Quebec wage decrees, applicable to employment in the construction industry in Quebec, may constitutionally be enforced against a Quebec construction company in respect of its employees engaged in the carrying out of a contract on federal Crown land for the construction of runways for the new Mirabel airport that was being built in a region of the Prov­ince of Quebec. The question was answered in the negative by Carignan J. of the Quebec Superior Court but on appeal a majority of the Quebec Court of Appeal, Montgomery J.A. dissenting, concluded that the appellant contractor was sub­ject to the wage legislation and decrees of the Province in the carrying out of the contract with the federal Crown.

In my opinion, Montgomery J.A. was right and the majority of the Quebec Court of Appeal wrong. Turgeon J.A. (with whom Crête J.A. agreed) in giving the majority judgment, acknowl­edged the exclusive jurisdiction of Parliament in relation to aeronautics, but drew a distinction be­tween the construction of an airport and the opera­tion or maintenance of a completed airport. It was his view that because the construction of the run-ways related to an airport not yet in being, it could not be said that the exclusive federal power in relation to aeronautics was being invaded; and hence the contractor remained subject to provin­cial legislation respecting the wage entitlement of his employees while they were engaged on the federal project, and until the project was com­pleted and the airport was in operation. What Turgeon J.A. appears to have fixed is a temporal test for the exercise of constitutional authority. Montgomery J.A. in his dissenting reasons has shown sufficiently how unreal the temporal test is, saying that “[it] could have this curious result: that if limited operation should start at the new airport before construction were completed, then the construction workers would at that time pass from provincial to federal jurisdiction”.

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I think the proper approach, supported by the cases discussed below, is a functional test under which there can be no constitutional distinction between the construction and operation of a feder­al work or undertaking or any facility which only the Parliament of Canada could authorize. It has, however, been urged by the respondent and by the supporting intervenors that, even accepting the functional test, provincial legislation may still apply to certain aspects of the construction as contrasted with the operation of the federal work. This position is, in my opinion, no less unreal than the view taken by Turgeon J.A. It might just as well be argued that construction could not proceed without a provincial or municipal building permit, a proposition which has only to be stated to be revealed as completely unsupportable: see Ottawa v. Shore and Horwitz Construction Co.[2] and cf. City of Toronto v. Bell Telephone Co.[3]

The case, which originated in a claim by the Quebec Minimum Wage Commission to recover on behalf of the appellant’s employees the defic­iency in wages and allied monetary items, pursu­ant to Quebec legislation and decrees, was argued on certain admissions which were as follows:

[TRANSLATION] 1. Defendant is a construction com­pany and as such obtained from Her Majesty the Queen in right of Canada contracts for the construction of runways at the new International Airport located at Ste. Scholastique, district of Terrebonne, province of Quebec;

2. All the aforementioned work was specifically authorized by the federal legislative authority and was awarded to defendant by orders of the Governor General in Council;

3. All the aforementioned work was carried out on land belonging to Her Majesty the Queen in right of Canada;

4. Defendant admits paragraph 1 of the statement of claim; [on the standing of the Commission as against the defendant]

5. Defendant admits the quantum of the claim in so far as it is subordinate to and governed by provincial legislation;

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When leave was sought to come here, appropri­ate steps were taken to propound a constitutional question which was formulated as follows:

Are the Minimum Wage Act, R.S.Q. 1964, c. 144, the Construction Industry Labour Relations Act, Statutes of Quebec 1968, c. 45, an Act Respecting the Construc­tion Industry, Statutes of Quebec 1970, c. 34, and an Act to amend the Construction Industry Labour Rela­tions Act and the Supplemental Pension Plans Act, Statutes of Quebec 1971, c. 46, as well as Decrees 4599 and 4795 of 1970 and amendments, enacted by the National Assembly of Quebec and the Lieutenant-Gov­ernor in Council, which statutes and decrees govern, in Quebec, the labour relations in the construction industry, rendered inoperative with regard to the construction workers employed by contractors doing construction work under contracts with the Queen in Right of Canada on lands owned by the Crown in Right of Canada and if not, are they inoperative with regard to the job site at Mirabel?

The Attorney General of Quebec had intervened in the Court of Appeal and he was joined in interven­tion here by the Attorney General of Alberta and the Attorney General of Saskatchewan. The admissions of fact aforementioned and the course of argument before this Court made it clear that the issue here was much narrower than that set out in the constitutional question propounded at the request of the appellant. It may perhaps be useful to point out here that neither the Chief Justice, before whom ex parte applications to state consti­tutional questions usually come, nor the other members of the Court who may be asked to set such questions, seek to thwart an applicant in posing such questions unless it is very clear that there is no constitutional issue that arises in the litigation. The members of the Court do assist in formulating the questions sought to be put but simply as a matter of insisting on clarity. The responsibility rests initially on the applicant who is, of course, aware that once a constitutional question is propounded for the consideration of the Court notice thereof must be given to the Attorney General of Canada and to the Attorneys General of the Provinces.

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The appellant in this Court pitched his argu­ment in the main on the exclusive federal power in relation to aeronautics, drawing at the same time on parallel situations arising in respect of construc­tion concerning other activities or enterprises within exclusive federal legislative authority. One such activity involving construction was considered by this Court in Campbell-Bennett Ltd. v. Com­stock Midwestern Ltd.,[4] where what was in issue was the right to assert a mechanic’s lien under provincial legislation against an oil pipe line extending from a point in Alberta to a point in British Columbia, and hence a work or undertak­ing falling within the excepting words in s. 92(10)(a) of the British North America Act so as to be subject to federal legislative authority. That case is, no doubt, distinguishable from the present one, if only because the enforcement of a mechan­ic’s lien, involving the possibility of sale, would involve dismemberment of an enterprise under fed­eral regulatory control. I point to it, however, because the fact that it may have been under construction did not make it any less within feder­al jurisdiction than it would have been if it had been in operation and was undergoing repairs.

The contention that there can be a differentia­tion for constitutional purposes between construc­tion and maintenance or operation of a federal work or undertaking is inconsistent with a line of cases beginning with C.P.R. v. Notre-Dame de Bonsecours[5], dealing with railways which come under federal regulatory authority. In that case, the Privy Council supported the exclusive author­ity of the Parliament of Canada to prescribe regu­lations for the construction, repair and alteration of the railway and for its management. It also said that a Province would be exceeding its powers “if it attempted [to interfere] with the structure or management of a work withdrawn entirely from provincial jurisdiction, such as a work authorized by the Dominion by legislation in execution of its powers under s. 92(10)(a)” (at p. 226). What is true as to railways must be equally true as to airports. I do not see how it can be suggested that

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construction referable to a railway is within exclu­sive federal competence but construction in respect of a federal enterprise, like an airport or a urani­um mine that does not move across provincial boundaries is not. If a company engaged in the construction of an interprovincial railway was working across provincial boundaries, could it be suggested that its employees would be subject to provincial wage legislation according to which side of a provincial boundary it was working on at a particular period?

It is not only provincial wage legislation but other controls referable to construction that appear to me to be inapplicable to enterprises within exclusive federal regulatory control. In City of Toronto v. Bell Telephone Co., supra, the Privy Council was faced with a contention that a com­pany, authorized by federal legislation to carry on a telephone business, and in that connection to construct and maintain its lines along or under any public highways or streets, was required to obtain municipal permission to construct its lines in the municipality of Toronto. The submission was rejected and the Privy Council supported the view that legislative jurisdiction was to be judged by the terms of the empowering enactment. Moreover, and on this its view is particularly relevant here, the Privy Council also rejected the contention that federal jurisdiction did not arise until there was an actual connection of the telephone lines between different provinces. This opinion denies, in my view, the basis of Turgeon J.A.’s judgment that there is a valid distinction to be made on constitu­tional grounds between the construction of an enterprise that is within federal regulatory author­ity and the operation of such an enterprise. The distinction becomes more obviously empty if it is sought to be applied to differentiate, for constitu­tional purposes, new construction and construction by way of repair of an operating enterprise.

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I wish to refer in this connection to the judg­ment of this Court in Quebec Minimum Wage Commission v. Bell Telephone Company of Canada[6]. There the appellant Commission purported to impose certain levies upon the respond­ent, pursuant to the provincial Minimum Wage Act and by-laws enacted thereunder, measured by a fractional percentage of the wage paid to its employees. As is the case here, there was no express exclusion of federal enterprises nor, indeed, any express inclusion, and so the question was whether the provincial provisions could consti­tutionally be applied to the respondent. This Court, affirming the Quebec Court of Appeal said “no”, relying mainly on the judgments of the Court In re the application of the Minimum Wage Act of Saskatchewan to an employee of a Revenue Post Office[7] and on the Stevedoring[8] case. Again, I see nothing in this Bell Telephone case that turns on a distinction between construction and opera­tion. Martland J., who spoke for the Court, was concerned of course with an operating enterprise but this factual situation would not appear to have been a determining consideration in excluding the application of the provincial directives. I refer to two passages in his reasons, at pp. 772 and 774 respectively:

... I feel that the regulation and control of the scale of wages to be paid by an interprovincial undertaking, such as that of the respondent, is a matter for exclusive federal control.

... a statute which deals with a matter which, apart from regulatory legislation, would have been the subject matter of contract between employer and employee, e.g., rates of pay or hours of work, affects a vital part of the management and operation of the undertaking to which it relates. This being so, if such regulation relates to an undertaking which is within s. 92(10)(a), (b) or (c), in my opinion it can only be enacted by the federal parliament.

It is worthwhile to dwell briefly on the Sas­katchewan Minimum Wage case, supra. It involved an attempt by the Province of Saskatchewan

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wan  [sic] to apply its wage legislation to a person employed temporarily by the postmistress of a revenue post office to work exclusively in post office operations. There was a contract situation there as here, but admittedly, the postmistress was an employee of the Crown and the appellant herein was not. The essential point, in my view, was the exclusive involvement in the work of the post office, a federal Crown enterprise. This Court emphasized that the employment was in the busi­ness of the post office. More closely related to the present case is the situation in the Stevedoring case where a stevedoring company, not itself oper­ating the enterprise which was subject to exclusive federal regulatory control, was held bound in its relations with its employees, working exclusively on loading and unloading ships engaged in interna­tional service, by federal labour relations legisla­tion.

So far I have been dealing with the issue before this Court in terms only of the exclusive federal authority in relation to aeronautics, embracing authority over the construction as well as the maintenance of airports. There is, however, a wider and more telling basis for supporting the judgment at trial and the dissenting reasons of Montgomery J.A. I refer to the fact that we are dealing here with a contract with the federal Crown for the execution of works on federal Crown land.

Federal public property is within the exclusive domain of Parliament under s. 91(1A), and wheth­er or not the words “public property” therein carry a wider significance than what is comprehended by federal Crown property, the fact that what we have here is federal Crown property is itself enough to exclude provincial legislation from any regulatory control over it and what is done on it. I refer to the judgment of this Court given by Duff C.J.C. in Spooner Oils Ltd. v. Turner Valley Gas Conservation Board[9], at pp. 643-44 where he said this:

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... The Dominion Lands Act and the Regulations enacted pursuant to it, give statutory effect to plans for dealing with Dominion public lands, including lands containing petroleum and natural gas, which, it must be assumed, were conceived by Parliament, and the authorities nominated by Parliament, as calculated to serve the general interest in the development and exploi­tation of such lands and the minerals in them. It is not competent to a provincial legislature pro tanto to nullify the regulations, to which Parliament has given the force of law in execution of such plans, by limiting and restricting the exercise of the rights in the public lands, created by such regulations in carrying the purpose of Parliament into effect. Indeed, an administrative order, which the legislature has professed to endow with the force of statute, directed against a tract of public land, the property of the Dominion, held by a lessee under the Regulations of 1910 and 1911, and which professed to regulate the exercise, by the lessee, of his right to take gas and petroleum from the demised lands, would truly be an attempt to legislate in relation to a subject reserved for the exclusive legislative jurisdiction of the Dominion by s. 91(1), “The Public*** Property” of the Dominion.

There was in force in relation to the Mirabel airport property a contract between the Crown and the appellant. That contract was governed, inter alia, by the Fair Wages and Hours of Labour Act, R.S.C. 1970, c. L-3. Section 3(1)(a) of the Act reads as follows:

3. (1) ..

(a) all persons in the employ of the contractor, sub-contractor, or any other person doing or contracting to do the whole or any part of the work contemplated by the contract shall during the continuance of the work be paid fair wages;

“Fair wages” is defined in s. 2 of the Act in these terms:

2. In this Act

“fair wages” means such wages as are generally accepted as current for competent workmen in the district in which the work is being performed for the character or class of work in which such workmen are respec­tively engaged; but shall in all cases be such wages as are fair and reasonable and shall in no case be less than the minimum hourly rate of pay prescribed by or pursuant to Part III of the Canada Labour Code;

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Part III of the Canada Labour Code, to which the definition points, deals with standard hours, wages, vacations and holidays. The relevant provisions thereof as they appear in the Code, being R.S.C. 1970, c. L-l, s. 35 as enacted by R.S.C. 1970 (2nd Supp.), c. 17, s. 8, are as follows:

35. (1) Except as otherwise provided by or under this Division, an employer shall pay to each employee of the age of seventeen years and over a wage at the rate of not less than one dollar and seventy-five cents an hour or not less than the equivalent of that rate for the time worked by him where the wages of the employee are paid on any basis of time other than hourly.

(1.1) The Governor in Council may from time to time, by order, increase the minimum hourly wage established by subsection (1), but no order made under this subsection is of any force or effect until a date specified in the order that is at least three months after the date of publication thereof in the Canada Gazette.

Since the Parliament of Canada has specified a minimum wage (and, indeed other monetary advantages in Part III of the Canada Labour Code which it is unnecessary to list) and the provision so made is by statute (s. 3(1)(a) of the Fair Wages and Hours of Labour Act) made a condition of the contract with the appellant, I think it is not within the competence of the Province to extend its minimum wage legislation to such a federal Crown contract. This would be tantamount to adding a term to it and I think it is clear that a Province cannot alter or modify the terms and conditions of a federal Crown contract entered into with a third party.

There is another point worth notice. The respondent Commission does not allege in its demand that the particular employees of the appellant were working on other projects during the period in which it was engaged in carrying out the contract with the federal Crown. I should have thought that this would have been mentioned if it was the fact. However, even if they were working elsewhere from time to time, it would not alter my conclusion. The matter would then be simply one of making the appropriate calculations and keeping

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proper accounts to exclude work done under the federal Crown contract from subjection to the provincial decrees.

Mention was made during the course of the argument of the difficulty that could be presented where a contractor having a collective agreement with its employees governed by provincial law undertook a federal Crown project. Would a sepa­rate certification of the employees’ union be required and what would happen to the existing collective agreement? These issues do not arise here and I would not find them insoluble if they did. I point out only that the issues would be the same if the contractor was involved in operation or maintenance rather than construction, having regard to the admission that where operation and maintenance of a federal Crown project under a contract with the Crown are concerned, the rela­tions of the contractor and its employees are com­pletely outside of provincial wage regulation.

In the result, I would allow the appeal, set aside the judgment of the Quebec Court of Appeal and restore the judgment at trial. The appellant should have its costs throughout.

The judgment of Martland, Ritchie, Pigeon, Dickson, Beetz, Estey and Pratte JJ. was delivered by

BEETZ J.—My conclusions differ from those of the Chief Justice whose reasons I have had the advantage of reading. He has quoted the admis­sions relating to the factual context of this case as well as the constitutional question and stated the views of the courts below. I am accordingly relieved from the task of doing the same.

The claim of the Minimum Wage Commission is a civil claim to recover wages, paid vacations and holidays, health insurance premiums and other social security levies from Construction Montcalm Inc. (Montcalm), a building contractor, on behalf of the latter’s employees, together with ancillary levies and penalties for a total amount of $13,481.24 the quantum of which is not in dispute.

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This amount is claimed pursuant to various provi­sions of the Minimum Wage Act, R.S.Q. 1964, c. 144 and amendments, the Construction Industry Labour Relations Act, S.Q. 1968, c. 45, An Act respecting the construction industry, S.Q. 1970, c. 34 and orders in council and ordinances passed under the authority of these Acts. Some of the provisions were enacted in 1970 for the temporary settlement of problems caused by labour strife then prevailing in the Quebec construction industry; but in the main these measures are laws of general application regulating labour relations and the conditions of employment, including wages, in the Quebec construction industry. It was not dis­puted, as indeed it could not be, that laws of this kind relate to matters coming within the class of subjects of property and civil rights in the Province and are intra vires of the provincial legislature. The issue is whether such laws are constitutionally applicable to the employment of workers employed by a building contractor who, under contract with the Crown in right of Canada, is doing construc­tion work on the runways of a new international airport (Mirabel) on federal Crown land.

The issue must be resolved in the light of estab­lished principles the first of which is that Parlia­ment has no authority over labour relations as such nor over the terms of a contract of employment; exclusive provincial competence is the rule: Toronto Electric Commissioners v. Snider[10]. By way of exception however, Parliament may assert exclusive jurisdiction over these matters if it is shown that such jurisdiction is an integral part of its primary competence over some other single federal subject: In re the validity of the Industrial Relations and Disputes Investigation Act[11] (the Stevedoring case). It follows that primary federal competence over a given subject can prevent the application of provincial law relating to labour relations and the conditions of employment but only if it is demonstrated that federal authority over these matters is an integral element of such federal competence; thus, the regulation of wages

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to be paid by an undertaking, service or business, and the regulation of its labour relations, being related to an integral part of the operation of the undertaking, service or business, are removed from provincial jurisdiction and immune from the effect of provincial law if the undertaking, service or business is a federal one; In re the application of the Minimum Wage Act of Saskatchewan to an employee of a Revenue Post Office[12], (the Reve­nue Post Office case); Quebec Minimum Wage Commission v. Bell Telephone Company of Canada[13] (the Bell Telephone Minimum Wage case); Letter Carriers’ Union of Canada v. Canadian Union of Postal Workers[14] (the Letter Carriers’ case). The question whether an under-taking, service or business is a federal one depends on the nature of its operation: Pigeon J. in Canada Labour Relations Board v. City of Yellowknife[15], at p. 736. But, in order to determine the nature of the operation, one must look at the normal or habitual activities of the business as those of “a going concern”, (Martland J. in the Bell Tele­phone Minimum Wage case at p. 772), without regard for exceptional or casual factors; otherwise, the Constitution could not be applied with any degree of continuity and regularity; Agence Maritime Inc. v. Canada Labour Relations Board[16] (the Agence Maritime case); the Letter Carriers’ case.

The main submission made on behalf of Montcalm starts from the premise that aeronautics is a class of subjects which comes under exclusive fed­eral authority; Johannesson v. The Rural Munici­pality of West St. Paul[17]. It was contended that aeronautics comprises the matter of airports and that the construction of airports, including the conditions of employment of workers engaged in the construction of airports, whoever employs them, is an integral part of aeronautics.

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The issue was also discussed as if the Mirabel airport were a federal work or undertaking, and it could indeed be argued that an international airport is a work which forms part of an undertaking connecting a province with a foreign country or extending beyond the limits of a province. An obiter dictum of Lord Watson in Canadian Pacific Railway v. Notre-Dame de Bonsecours[18] (the Notre-Dame de Bonsecours case) at p. 372 was quoted to us in support of Montcalm’s main submission:

.. the Parliament of Canada has, in the opinion of their Lordships exclusive right to prescribe regulations for the construction, repair and alteration of the railway, and for its management, and to dictate the constitution of the company;

(Underlining is mine.)

The construction of an airport, it was argued, is as much a matter for exclusive federal control as the construction of a federal railway.

In my view, the main submission is not supported by the principles enunciated above: it does not meet the test set out in the Stevedoring case according to which Parliament has no authority over labour relations except in so far as such authority is an integral element of its primary jurisdiction over some other matter; furthermore, it implicitly but clearly ignores the requirement of the Agence Maritime and Letter Carriers’ cases that an undertaking, service or business be not characterized as a federal or provincial one on account of casual factors.

The construction of an airport is not in every respect an integral part of aeronautics. Much depends on what is meant by the word “construc­tion”. To decide whether to build an airport and where to build it involves aspects of airport con­struction which undoubtedly constitute matters of exclusive federal concern: the Johannesson case. This is why decisions of this type are not subject to municipal regulation or permission: the Johannesson case; City of Toronto v. Bell Telephone Co.[19];

[Page 771]

the result in Ottawa v. Shore and Horwitz Con­struction Co.[20] can also be justified on this ground. Similarly, the design of a future airport, its dimen­sions, the materials to be incorporated into the various buildings, runways and structures, and other similar specifications are, from a legislative point of view and apart from contract, matters of exclusive federal concern. The reason is that deci­sions made on these subjects will be permanently reflected in the structure of the finished product and are such as to have a direct effect upon its operational qualities and, therefore, upon its suita­bility for the purposes of aeronautics. But the mode or manner of carrying out the same decisions in the act of constructing an airport stand on a different footing. Thus, the requirement that workers wear a protective helmet on all construction sites including the construction site of a new airport has everything to do with construction and with provincial safety regulations and nothing to do with aeronautics: see R. v. Beaver Foundations Ltd.[21] and R. v. Concrete Column Clamps (1961) Ltd.[22] See also Re United Association of Journey-men, etc. Local 496 and Vipond Automatic Sprin­kler Co. Ltd.[23], where Cavanagh J. of the Alberta Supreme Court held that “the fact of construction of a building called an air terminal does not ... show that the construction is connected with aeronautics” and that, while an aerodrome is a federal work, employees constructing such a build­ing are subject to provincial labour relations legis­lation. In my opinion what wages shall be paid by an independent contractor like Montcalm to his employees engaged in the construction of runways is a matter so far removed from aerial navigation or from the operation of an airport that it cannot be said that the power to regulate this matter forms an integral part of primary federal compe­tence over aeronautics or is related to the opera­tion of a federal work, undertaking, service or business. (For the purpose of the main submission, it is unnecessary to express any view as to whether Parliament could, in a provision of an ancillary nature, incidentally touch upon the conditions of

[Page 772]

employment of workers engaged in the construc­tion of airports).

The Notre-Dame de Bonsecours case is relied on by Montcalm. The Judicial Committee held that provincial legislation prescribing the cleaning of ditches was intra vires of the provincial legisla­ture and applicable to a federal railway since it did not affect the structure of the railway. Lord Wat­son’s dictum, quoted above, is preceded by this statement: (at p. 372)

The British North America Act, whilst it gives the legislative control of the appellants’ railway qua railway to the Parliament of the Dominion, does not declare that the railway shall cease to be part of the provinces in which it is situated, or that it shall, in other respects, be exempted from the jurisdiction of the provincial legislatures.

(Underlining is mine.)

Lord Watson’s dictum is then followed by the following passage (at pp. 372 and 373):

It was obviously in the contemplation of the Act of 1867 that the “railway legislations”, strictly so called, appli­cable to those lines which were placed under its charge should belong to the Dominion Parliament. It therefore appears to their Lordships that any attempt by the Legislature of Quebec to regulate by enactment, wheth­er described as municipal or not, the structure of a ditch forming part of the appellant company’s authorized works would be legislation in excess of its powers. If, on the other hand, the enactment had no reference to the structure of the ditch, but provided that, in the event of its becoming choked with silt or rubbish, so as to cause overflow and injury to other property in the parish, it should be throughly cleaned out by the appellant com­pany, then the enactment would, in their Lordships’ opinion, be a piece of municipal legislation competent to the Legislature of Quebec.

(Underlining is mine.)

The views of the Judicial Committee were fur­ther explained in Madden v. Nelson and Fort Sheppard Railway Company[24], where a provincial statute aimed at obliging federal railway companies

[Page 773]

to erect proper fences on their railways by imposing civil liability upon them for the killing or maiming of cattle, was found ultra vires (at pp. 628 and 629):

Their Lordships think it unnecessary to do more than to say that in this case the line seems to have been drawn with sufficient precision in the case of the Canadian Pacific Ry. Co. v. Corporation of the Parish of Notre-Dame de Bonsecours where it was decided that although any direction of the provincial legislature to create new works on the railway and make a new drain and to alter its construction would be beyond the jurisdiction of the provincial legislature, the railway company were not exempted from the municipal state of the law as it then existed—that all landowners, includ­ing the railway company, should clean out their ditches so as to prevent a nuisance. It is not necessary to do more here than to say that this case raises no such question anywhere near the line, because in this case there is the actual provision that there shall be a liability on the railway company unless they create such and such works upon their roadway. This is manifestly and clearly beyond the jurisdiction of the provincial legislature.

(Underlining is mine.)

These passages make it clear that what the Judicial Committee had in mind in referring to the power of regulating the construction of a railway was those directions which result in the structural alteration of a federal work, or in the creation of new works, or, presumably and a fortiori, in the prohibition of new works. But, as is shown by the Notre-Dame de Bonsecours case, at p. 374, pro­vincial law applies even if it affects “the physical condition” of a railway ditch, as long as “the structure of the ditch” remains intact.

In the case at bar, the impugned legislation does not purport to regulate the structure of run-ways. The application of its provisions to Montcalm and its employees has no effect on the struc­tural design of the runways; it does not prevent the runways from being properly constructed in accordance with federal specifications; nor has it even been shown, assuming it could be, that “the physical condition” of the runways, as opposed to

[Page 774]

their structure, is affected by the wages and condi­tions of employment of the workers who build them.

The Notre-Dame de Bonsecours case is one of a line of cases which have established the general principle that federal works, undertakings, services and businesses remain subject to provincial law as long as provincial law does not reach them quâ federal organizations, that is, as long as provincial law does not regulate them under some primary federal aspect. Thus was it held in Workmen’s Compensation Board v. Canadian Pacific Railway Company,[25] that a federal railway is subject to a provincial scheme providing for the compensation of workers accidentally injured in the course of their employment. The general principle was quali­fied in this sense that the application of provincial law must not interfere with the operation of a federal undertaking (City of Toronto v. Bell Tele­phone Co.), or result in its dismemberment (Campbell-Bennett Limited v. Comstock Mid-western Limited[26]). This qualification is irrelevant in the case at bar where the application of provin­cial law would neither interfere with the operation of a federal undertaking nor result in the dismem­berment of a federal work. The principle was further qualified when it was held in the Bell Telephone Minimum Wage case that the regula­tion of the labour relations of a federal undertak­ing, service or business is a matter for exclusive federal control. But Montcalm is not a federal undertaking, service or business.

There is some analogy in this respect between this case and Attorney General of the Province of Quebec v. Kellogg’s Co.[27] The Quebec Court of Appeal had concluded, relying on the Bell Tele­phone Minimum Wage case, that the prohibition by the Province of the use of cartoons for advertis­ing intended for children was constitutionally inop­erative to the extent that it applied to the use of cartoons on television. The judgment of the Court of Appeal was reversed. Martland J., speaking for the majority said that:

[Page 775]

Unlike the Bell Company, Kellogg is not an undertak­ing falling within paragraph (a) or paragraph (c) of s. 92(10) of the British North America Act ... . (at p. 222)

In my opinion this regulation does not seek to regulate or interfere with the operation of a broadcast undertak­ing. (at p. 225)

Montcalm is not an aeronautics undertaking any more than Kellogg was a broadcasting undertak­ing.

This brings me to my second point with respect to Montcalm’s main submission, the nature of Montcalm’s ordinary business.

The record reveals little with respect to the nature of Montcalm’s business or operation. All we know from the admissions made by the parties is that Montcalm is a construction undertaking. It was also admitted in the course of argument that Montcalm is a provincially incorporated company. In its factum, Montcalm describes itself as [TRANSLATION) “a company whose main business is construction”. We do not know the nature of the construction work generally done by Montcalm; we do not know either whether for any period of time Montcalm’s work was confined to the Mirabel project or whether Montcalm’s employees who worked on the Mirabel project may have been employed by it on other projects. We do not know the duration of Montcalm’s involvement in the Mirabel project. There is nothing to indicate that Montcalm’s work was confined to this single project or that Montcalm generally worked for the Government of Canada or its agencies, assuming that it would make a difference. Given these cir­cumstances, we have no choice but to presume that Montcalm’s business is that of an ordinary build­ing contractor subject to the conditions of work generally prevailing in the construction industry and of which we are entitled to take cognizance in so far as they are common knowledge. If the facts were otherwise, it was incumbent upon Montcalm to allege and prove them.

In submitting that it should have been treated as a federal undertaking for the purposes of its labour relations while it was doing construction work on the runways of Mirabel, Montcalm postulates that the decisive factor to be taken into consideration is

[Page 776]

the one work which it happened to be constructing at the relevant time rather than the nature of its business as a going concern. What is implied, in other words, is that the nature of a construction undertaking varies with the character of each con­struction project or construction site or that there are as many construction undertakings as there are construction projects or construction sites. The consequences of such a proposition are far reach­ing and, in my view, untenable: constitutional au­thority over the labour relations of the whole construction industry would vary with the charac­ter of each construction project. This would produce great confusion. For instance, a worker whose job it is to pour cement would from day to day be shifted from federal to provincial jurisdiction for the purposes of union membership, certification, collective agreement and wages, because he pours cement one day on a runway and the other on a provincial highway. I cannot be persuaded that the Constitution was meant to apply in such a disinte­grating fashion.

To accept Montcalm’s submission would be to disregard the elements of continuity which are to be found in construction undertakings and to focus on casual or temporary factors, contrary to the Agence Maritime and Letter Carriers decisions. Building contractors and their employees frequent­ly work successively or simultaneously on several projects which have little or nothing in common. They may be doing construction work on a runway, on a highway, on sidewalks, on a yard, for the public sector,. federal or provincial, or for the private sector. One does not say of them that they are in the business of building runways because for a while they happen to be building a runway and that they enter into the business of building highways because they thereafter begin to do construc­tion work on a section of a provincial turnpike. Their ordinary business is the business of building. What they build is accidental. And there is noth­ing specifically federal about their ordinary business.

It does not appear to me that Montcalm’s posi­tion is supported by any aspect of the Revenue Post Office case or the Stevedoring case. It was

[Page 777]

held in the former that the Saskatchewan Minimum Wage Act did not apply to a person tem­porarily employed by the postmistress of a revenue post office to work exclusively in post office opera­tions. But the temporary employment was employment in the continuous operation of a federal service. In the Stevedoring case this Court held that a stevedoring organization servicing ships engaged exclusively in international shipping was subject to federal law with respect to its labour relations; this was a reference and the order of reference recited that the operations of the steve­doring company during the relevant navigation season consisted exclusively in the loading and unloading of ships engaged in international shipping; the Court (Rand J. dissenting) took the view that it could not go beyond the order; Kellock J. said (at p. 561) that the issue had to be considered “on the footing of the continuance of the situa­tion” and Cartwright J. (as he then was) said (at p. 584) that the answer to the constitutional ques­tion “should be based on the assumption that the operations of the company are as ... described” in the order.

In my opinion, Montcalm’s main submission fails.

In its second submission, Montcalm contends that provincial law does not apply on federal Crown lands. Again I disagree. The exclusive power of the Province to make laws in relation to property and civil rights under s. 92(13) of the Constitution is territorially limited only by the words “in the Province”, and Mirabel is located in the Province. The enumeration of exclusive federal powers in s. 91 of the Constitution, including the power to make laws in relation to the public debt and property, operates as a limitation ratione materiae upon provincial jurisdiction, not as a territorial limitation. The impugned provisions relate neither to federal property nor to any other federal subject but to civil rights and, in my view, they govern the civil rights of Montcalm and its employees on federal property. Federal Crown lands do not constitute extra-territorial enclaves within provincial boundaries any more than indian

[Page 778]

reserves. What Martland J. wrote for the majority of this Court in Cardinal v. Attorney General of Alberta,[28] at p. 703, with respect to indian reserves is equally applicable to federal Crown lands:

In my opinion, the test as to the application of Provin­cial legislation within a Reserve is the same as with respect to its application within the Province and that is that it must be within the authority of s. 92 and must not be in relation to a subject-matter assigned exclusive­ly to the Canadian Parliament under s. 91. Two of those subjects are Indians and Indian Reserves, but if Provin­cial legislation within the limits of s. 92 is not construed as being legislation in relation to those classes of sub­jects (or any other subject under s. 91) it is applicable anywhere in the Province, including Indian Reserves, even though Indians or Indian Reserves might be affected by it. My point is that s. 91(24) enumerates classes of subjects over which the Federal Parliament has the exclusive power to legislate, but it does not purport to define areas within a Province within which the power of a Province to enact legislation, otherwise within its powers, is to be excluded.

See also Rex v. Smith,[29] where the Ontario Court of Appeal held, rightly in my respectful opinion, that provincial legislation relating to hunting out of season and to the use of fire-arms without a licence applied to a battery sergeant-major on a military camp: in doing the acts complained of the sergeant-major was not performing any military duty; and the mere fact that the Government of Canada had acquired and used the land for federal purposes did not “remove either the land itself or the persons upon it wholly outside Provincial jurisdiction, as if it were foreign territory”.

The case of Spooner Oils Ltd. v. Turner Valley Gas Conservation Boad[30] [sic], is quite distinguishable: under the provincial legislation therein found ultra vires, the terms of federal Crown land leases granted pursuant to the authority of a federal statute could be specifically altered by the uncontrolled

[Page 779]

discretion of a provincial administrative board and the effect of valid federal provisions could thereby be nullified; furthermore, the deter­mination of the case depended on the special provi­sions of an agreement between the Government of Canada and Alberta confirmed and given the force of law by the British North America Act, 1930.

Montcalm’s second submission fails.

Montcalm’s third submission, as I understand it, is that the field is occupied by the Fair Wages and Hours of Labour Act, R.S.C. 1970, c. L-3. The trial judge found merit in this argument.

The contract between the Crown in right of Canada and Montcalm was governed inter alia by s. 3(1)(a) of the Fair Wages and Hours of Labour Act:

3. (1) ...

(a) all persons in the employ of the contractor, sub-contractor, or any other person doing or contracting to do the whole or any part of the work contemplated by the contract shall during the continuance of the work be paid fair wages;

“Fair wages” is defined in s. 2 of the Act:

“fair wages” means such wages as are generally accepted as current for competent workmen in the district in which the work is being performed for the character or class of work in which such workmen are respec­tively engaged; but shall in all cases be such wages as are fair and reasonable and shall in no case be less than the minimum hourly rate of pay prescribed by or pursuant to Part III of the Canada Labour Code;

The effect of these provisions is to provide for minimum wages to be paid to all persons in the employ of contractors under contract with the Government of Canada for the construction, remo­delling, repaid or demolition of any work. But the Act does not forbid the Crown from entering into a contract with a contractor who pays more than the minimum to his employees. Nor does the Act prevent the operation of provincial law providing for the payment of minimum wages or actual

[Page 780]

wages equivalent to or in excess of the minimum federal requirement.

Montcalm’s third submission cannot succeed unless the impugned provisions are in conflict with the Fair Wages and Hours of Labour Act: Ross v. Registrar of Motor Vehicles[31]. Here again, it was incumbent upon Montcalm to establish that it could not comply with provincial law without com­mitting a breach of the federal Act. Montcalm did not even attempt any such demonstration. It argues in its factum that the federal Act provides not only for wages but also for overtime, unfair labour practices, etc., and that, in several instances, such provisions “may” differ from those of provincial law. This is not good enough. Montcalm had to prove that federal and provincial law were in actual conflict for the purposes of this case. It did not so prove.

I must also respectfully disagree with the propo­sition that the impugned provisions add a term to the contract between the Crown in right of Canada and Montcalm. What they do is to add to the contract between Montcalm and its employees a term which is not incompatible with any applicable federal law. Admittedly, such a term is likely to affect the federal purse in the end because all contractors will take provincially regulated wages into consideration in bidding on federal contracts. But the effect, indirect and remote, does not differ from the like effects of innumerable provincial laws: Attorney General of Manitoba v. Manitoba Licence Holders’ Association[32].

Montcalm’s third submission fails.

The case at bar presents many similarities with R. v. Baert Construction Ltd.[33]

[Page 781]

Baert Construction, a provincially incorporated construction company, was charged with failing to pay the minimum wages required under provincial law to four of its employees engaged in the con­struction of buildings to be used for school and staff accommodation by the Department of Indian Affairs and Northern Affairs on federally owned land, the Fisher River Indian Reservation. One issue was the alleged conflict between provincial law and the Fair Wages and Hours of Labour Act. But the preliminary issue was whether provincial law was applicable at all to Baert Construction in view of exclusive federal authority over the public debt and property and Indians and lands reserved for the Indians (ss. 91(1A) and 91(24) of the Constitution). Kopstein, Prov. J. held that provin­cial law was applicable to Baert Construction since jurisdiction over labour relations was not an inte­gral part of exclusive federal powers; he went on to comment that the Fair Wages and Hours of Labour Act was ultra vires of Parliament. Baert Construction was convicted. Baert Construction appealed to the Manitoba Court of Appeal and the Attorney-General of Canada intervened. Counsel for Manitoba argued that the federal and provin­cial statutory provisions were not in conflict but that the provincial law was complementary to the federal legislation, a position supported by counsel for Canada and accepted by the Court of Appeal. The Court of Appeal took the view that it was not necessary to adjudicate upon the constitutionality of the federal legislation. Counsel for Baert Con­struction did not press the argument that provin­cial law did not apply on account of exclusive federal jurisdiction over Indians and lands reserved for the Indians but contended that it could not govern employees under a federal contract for work to be performed on federal Crown land. The Manitoba Court of Appeal did not accede to this submission and dismissed the appeal. Matas J.A. speaking for himself and for Guy J.A. had this to say (at pp. 270 and 271):

[Page 782]

Counsel did not go so far as to suggest that the four employees would be subject to federal laws relating to certification and labour relations generally; in the isolated instance of this particular project, federal law would apply; on the conclusion of the project, provincial law would again apply to employees of Baert.

In my view, this argument is based on an artificial division of legislative competency. From a practical point of view it would be a strange result if federal legislation, providing for a minimum standard, could be interpreted so as to require that standard to apply to a part of contractor’s work force, for part of the time, where there was intermittent employment under a feder­al contract on federal land. The result would be chaos and would be contrary to the intent of labour legislation, both federal and provincial.

I find myself in substantial agreement with the Manitoba Court of Appeal.

In the result, I would dismiss the appeal with costs throughout.

Appeal dismissed with costs, LASKIN C.J. and SPENCE J. dissenting.

Solicitors for the appellant: Guertin, Gagnon and Lafleur, Montreal.

Solicitors for the respondent: Bergeron, Bel­leau, Turcotte, Laliberté, Dubuc and Corbeil, Montreal.

Solicitors for the Attorney General of Quebec: de Grandpré, Colas, Amyot, Lesage, Deschênes and Godin, Montreal.

Solicitor for the Attorney General of Alberta: William Henkel, Edmonton.

Solicitor for the Attorney General of Saskatch­ewan: William N. Lawton, Regina.



[1] [1975] C.A. 675, [1976] R.D.T. 347.

[2] (1960), 22 D.L.R. (2d) 247.

[3] [1905] A.C. 52.

[4] [1954] S.C.R. 207.

[5] [1899] A.C. 367.

[6] [1966] S.C.R. 767.

[7] [1948] S.C.R. 248.

[8] [1955] S.C.R. 529.

[9] [1933] S.C.R. 629.

[10] [1925] A.C. 396.

[11] [1955] S.C.R. 529.

[12] [1948] S.C.R. 248.

[13] [1966] S.C.R. 767.

[14] [1975] 1 S.C.R. 178.

[15] [1977] 2 S.C.R. 729.

[16] [1969] S.C.R. 851.

[17] [1952] 1 S.C.R. 292.

[18] [1899] A.C. 367.

[19] [1905] A.C. 52.

[20] (1960), 22 D.L.R. (2d) 247.

[21] (1968), 69 D.L.R. (2d) 649.

[22] [1972] 1 O.R. 42.

[23] (1976), 67 D.L.R. (3d) 381.

[24] [1899] A.C. 626.

[25] [1920] A.C. 184.

[26] [1954] S.C.R. 207.

[27] [1978] 2 S.C.R. 211.

[28] [1974] S.C.R. 695.

[29] [1942] O.W.N. 387.

[30] [1933] S.C.R. 629.

[31] [1975] 1 S.C.R. 5.

[32] [1902] A.C. 73.

[33] [1974] 4 W.W.R. 135 aff’d (1974), 51 D.L.R. (3d) 265.

 

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