The appellant municipality sought to enforce Ontario's building code and development charge regime against a massive redevelopment project at a federally owned international airport operated under long-term leases.
The court held that the entire redevelopment, including terminals, runways, utilities, and air navigation facilities, fell within Parliament's exclusive jurisdiction over aeronautics and also formed part of a federal undertaking, such that provincial laws directly regulating building design, permits, and development charges were constitutionally inapplicable under interjurisdictional immunity.
The court further held that provincial land and property development legislation could not apply to the federal Crown's continuing property interest in leased airport lands.
Ancillary claims based on the ground lease, common law compensation, and refusal of fire services were rejected, with the municipality directed to pursue the statutory grant-in-lieu regime instead.
