La Co-operative De Point-Aux-Roches v. United Food and Commercial Workers International Union, Local 278W, 1995 CanLII 10044

La Co-operative De Point-Aux-Roches v. United Food and Commercial Workers International Union, Local 278W

[1995] OLRB Rep. February 138

4174-93-R La Co-operative De Point-Aux-Roches, 1015195 Ontario Limited and Charles Desmarais, Applicants v. United Food and Commercial Workers International Union, Local 278W, and The United Brotherhood of Carpenters and Joiners of America - Local 3054, Responding Parties v. United Co-operative of Ontario and UCO Petroleum Inc., Intervenors v. Group of Employees, Objectors

BEFORE: Roman Stoykewych, Vice-Chair, and Board Members J. A. Rundle and H. Peacock.

APPEARANCES: Theodore Crljenica and Charles Desmarais for the applicants; Caroline Cohen and John Hammond for the United Food and Commercial Workers International Union, Local 278W; Mike McCreary and Ken Fenwick for the United Brotherhood of Carpenters and Joiners of America - Local 3054; no one appearing for the United Co-operative of Ontario; no one appearing for the UCO Petroleum Inc.

DECISION OF ROMAN STOYKEWYCH, VICE-CHAIR AND BOARD MEMBER, H. PEACOCK; February 3, 1995

1. This is an application brought under the provisions of sections 1(4) and 64 of the Labour Relations Act.

2. La Co-opdrative De Pointe-Aux-Roches (referred to by the parties and in this decision as "Stoney Point Co-op") is a co-operative incorporated pursuant to the provisions of the Co-operative Corporations Act, R.S.O. 1990 c. 35. Since 1947, the Stoney Point Co-op has been in the business of what was characterized as "supplying farm inputs and services" as well as merchandising grain at a number of locations in the County of Essex. The applicants (also referred to collectively in this decision as "the employer") Stoney Point Co-op, 1015195 Ontario Limited and Charles Desmarais claim that they stand in the relation of common employer as contemplated under section 1(4) of the Act. They also claim that as a result of certain transactions jointly effected by them, and in particular, the purchase of the assets of a number of farm co-operatives, a sale of a business within the meaning of section 64 of the Act has transpired. The applicants further claim that, as a result of the intermingling of the employees of the purchased co-operatives (who up to the present time have been represented by the responding party trade unions) with those of its existing operations (who are not represented by a trade union), the Board should terminate the bargaining rights of the respondents, or in the alternative, order that a vote be held pursuant to the provisions of section 64(8) of the Act to determine the wishes of the applicants' employees.

3. In response to the application, the responding party trade unions both raise the constitutional objection that the Board lacks jurisdiction to adjudicate upon this matter because the applicants' business is engaged in the operation of "works... for the general advantage of Canada" declared pursuant to the provisions of section 92(10)(c) of the Constitution Act. More particularly, it is the position of the respondents that the employees of the businesses that are the subject matter of this application are employed on or in connection with feed mills, feed warehouses, and seed cleaning mills that fall within the scope of the declaration in section 76 of the Canada Wheat Board Act, R.S.C. 1985, c. C- 24. Therefore, it is submitted, the labour relations of the applicants, in whole or in relevant part, are subject to the provisions of the Canada Labour Code R.S.C. 1985, C. L-2 and not to those of the Ontario Labour Relations Act.

4. In a decision of a differently constituted panel of the Board dated May 19, 1994, the parties were directed to provide in writing their positions and particulars of their evidence with respect to the constitutional issue and that this matter be heard on July 19 and 20, 1994. At the hearing, the parties were able to agree upon all material facts relevant to the constitutional issue, and argument proceeded on the basis of an agreed statement of fact as supplemented by certain documentary evidence and the submissions of counsel. The following is the Board's determination with respect to the constitutional issue before it.

I

5. Before proceeding to the evidence, it is useful to review the statutory and constitutional provisions that are at issue in this aspect of the proceeding. Section 92 (10) of the Constitution Act, 1867 provides as follows:

6. In each Province the Legislature may exclusively make Laws in relation to Matters coming within the Classes of Subject next hereinafter enumerated; that is to say,­

7. Local Works or Undertkings other than such as are of the following Classes:

(a) Lines of Steam or other Ships, Railways, Canals, Telegraphs, and other Works and Undertakings connecting the Province with any other or others of the Provinces, or extending beyond the Limits of the Province;

(b) Lines of Steam Ships between the Province and any British or Foreign Country;

(c) Such Works as, although wholly situate within the Province, are before or after the Execution declared by the Parliament of Canada to be for the general advantage of Canada or for the Advantage of Two or more of the Provinces.

6. Pursuant to its powers under section 92(10(c), the federal Parliament has declared that, among other things, feed mills, feed warehouses and seed cleaning mills, are "works ... for the general advantage of Canada". Section 76 of the Canada Wheat Board Act provides as follows:

7. For greater certainty, but not so as to restrict the generality of any declaration in the Canada Grain Act that any elevator is a work for the general advantage of Canada, it is hereby declared that all flour mills, feed mills, feed warehouses and seed cleaning mills, whether heretofore constructed or hereafter to be constructed, are and each of them is hereby declared to be works or a work for the general advantage of Canada and, without limiting the generality of the foregoing, every mill or warehouse mentioned or described in the schedule is a work for the general advantage of Canada.

8. The effect of a declaration pursuant to section 92(10)(c) of the Constitution Act is to bring the matter of the operation of "works" that are otherwise within the legislative jurisdiction of the provinces into that of the federal Parliament. The validity, in general terms, of the declaration found in section 76 of the Canada Wheat Board Act has been affirmed on numerous occasions by the Courts (Jorgenson v. A. G. Canada, 1971 CanLII 136 (SCC), [1971] S.C.R. 725; The Queen v. Thumlert (1959), 1959 CanLII 434 (AB SCAD), 20 D.L.R. (2d) 335; Chamney v. The Queen (1973), 1973 CanLII 197 (SCC), [1975] 2 S.C.R. 151; Re Shur Gain Division, Canada Packers Inc. and National Automobile, Aerospace and Agricultural Workers Union of Canada (C.A.W.-Canada) (1991), 1991 CanLII 13576 (FCA), 85 D.L.R. (4th) 317 (F.C.A.) and was not contested by the parties to the present proceeding. Similarly, consistent with this Board's finding in W. G. Thompson & Sons Limited, [1987] OLRB Rep. May 787, it was agreed by all the parties that the several feed mills, feed warehouses and seed cleaning mills on the sites now operated by the applicants were caught by its terms.

9. At issue in the present application is the effect that the presence of these works (which, as will be seen, form only a portion of the applicants' business) has upon the constitutional status of its labour relations, and more particularly, with respect to the labour relations of those operations recently incorporated into the applicants' business. It was the position of the responding party trade unions that the various operations of the applicants at these locations, which would otherwise fall within the provincial jurisdiction, were so integrated into the operations of the federally declared works located there (and which it characterized as "core federal undertakings") so as to render the entirety of those operations within the jurisdiction of the federal Parliament. For that reason, it was contended, this Board has no jurisdiction to hear the merits of this application. It should be noted that the employer, although agreeing that the feed mills, feed warehouses and seed cleaning mills on its premises were "affected" by the declaration in section 76 of the Canada Wheat Board Act, and although it participated fully in the presentation of the evidence and argument in this proceeding, nonetheless declined to take any position with respect to what further effect the operation of the works subject to the declaration might have upon our jurisdiction with respect to its labour relations.

10. Finally, it is to be noted that earlier in these proceedings, the responding parties took the position that the various grain elevators on the applicants' operations were also subject to the declaration pursuant to the Canada Grains Act (and referred to in section 76 of the Canada Wheat Board Act). However, having had the opportunity to further review the applicable statutory provisions, at the hearing it was agreed by both the applicants and the responding parties that the declaration had no application to the grain elevators on the applicants' premises and that position was withdrawn. Accordingly, subject to the responding parties' position that the grain elevators were integrated in the operation of the federal works, it was agreed that labour relations with respect to the grain elevators fell within the provincial jurisdiction and that the only types of "works" directly affected by the declaration were the feed mill, feed warehouses and the seed cleaning mills.

II

Stoney Point Co-op Prior to Alleged Sale

10. As indicated, the Stoney Point Co-op has been engaged in the farm input and grain merchandising business for many years. The business entails the operation of grain elevators, the sale and application of fertilizer and pesticides, the sale of farm seed, farm feed, hardware supply

and bulk petroleum. In general, the co-operative provides a broad range of products and services required by farmers for the operation of farms in the Essex County area, although a portion of its bulk petroleum business is also related to the supply of industrial customers in the nearby Windsor area. Prior to the events in 1993 that, it is claimed, gave rise to a common employer relationship and the sale of a business, the co-operative operated out of three locations in Essex County: its main location at Stoney Point, Ontario, and smaller operations in nearby Belle River and Rochester Township, Ontario. As noted above, none of the employees of the Stoney Point Co-op prior to the transactions which gave rise to the present application were represented by a trade union.

11. The Stoney Point, Ontario location consists of a complex of grain elevators and silos, offices, a workshop, a farm supply retail store, a bulk petroleum plant, pesticide warehouse, blender and fertilizer warehouse. None of these facilities are subject to the declaration under section 76 of the Canada Wheat Board Act, and in themselves, would not be subject to federal jurisdiction. However, also present on the Stoney Point location is a seed cleaning mill, in which seed is cleaned, sorted and bagged, and a warehouse in which the bagged seed and animal feed is stored. It was agreed by all concerned that the seed mill and the feed warehouse would be affected by the declaration in section 76. The Board was directed to the evidence that the financial transactions relating to the sale of seed and feed, as well as those related to petroleum sales and distribution, fertilizer and grain sales, and the sale of sundry retail items all either took place in the retail store or are electronically linked to a centralized accounting system operating out of the Stoney Point administrative offices, where the sale or credit is recorded. There are no administrative or operational distinctions drawn between sales of seed, on the one hand, and of the remaining products and services, on the other, and it would appear that the sales of both categories of transactions would be conducted by the same personnel. Similarly, employees working in the seed cleaning aspects of the employer's operations would also work in the other areas.

12. The Board was provided with little direct evidence as to the proportion of sales or other commercial activity that are attributable to the seed mill and feed warehouse aspects of the Stoney Point location. Nevertheless, from our review of the evidence regarding the physical description of the location, and from the evidence relating to the activities of the persons employed at the Stoney Point location, we are satisfied that the seed mill and feed warehouse constitute a relatively minor part of the business at Stoney Point. Thus, of the approximately thirty employees working at or out of the Stoney Point location, only one employee is assigned on a regular basis to the seed mill and warehouse operations, although other employees may be assigned to such work on an as needed basis. By contrast, six full-time office employees are engaged in the administrative aspects of the business (which, it appears, may include the regulation of certain aspects of the seed mill operation), eight employees are engaged in the sales and delivery of bulk petroleum, and fourteen employees are primarily engaged in the operations of the other aspects of the Stoney Point location that are not subject to the declaration.

13. The evidence discloses that the applicants' operations at Belle River, Ontario also include a designated federal work, i.e., a warehouse in which feed is stored and from which feed is sold. However, as in the Stoney Point location, the warehouse appears to be a relatively minor aspect of a complex that, in itself, would be a provincially-regulated operation. Thus, in addition to the warehouse facility, the Belle River location consists of a gas bar, convenience store, car wash and garden centre. It appears that, as in the Stoney Point facility, the transactions relating to the feed warehouse are performed in the retail store, alongside the transactions relating to the other aspects of the business. However, once again, the Board was not provided any direct evidence with respect to the proportion of commercial activity represented by the feed warehouse at the Belle River location although from all the circumstances, it would appear to be very minor indeed. In particular, it is noteworthy that of the 18 employees engaged at the complex, no employee was assigned primarily to work in or in connection with the warehouse. By contrast, 6 persons were employed on a full-time basis as sales clerks in the store, while 12 part-time employees attended at the gas bar and car wash.

14. Finally, the Co-op's Rochester Township location consists only of a single grain elevator, employing two persons who are deployed from the Stoney Point location. All parties conceded that the grain elevator does not fall within the scope of the declaration in section 76 of the Canada Wheat Board Act. However, because the Rochester location was a branch of the Stoney Point operation, and administratively linked with that operation, it was submitted that, it too, was closely integrated into the overall operation.

Transactions Effected by 1015195 Ontario Limited

i.) Harrow Farmers Co-operative Association Limited

15. The applicant 1015195 Ontario Limited ("101") is a corporation incorporated under the laws of the Province of Ontario, and is owned solely by the Stoney Point Co-op. 101 was incorporated for the purpose of the purchase of the assets of other farm co-operatives in the Essex County area with an eye to the commercial integration into their overall operation of the Stoney Point Co­op.

16. Pursuant to this mandate, in May, 1993, 101 purchased the assets of the Harrow Farmers Co-operative Association Limited ("Harrow Co-op"). Prior to the transactions at issue in this application, the Harrow Co-op had carried on its business, which was similar in nature to that of Stoney Point Co-op, at two locations in Essex county, those being at the Town of Harrow and at McGregor, Ontario. The employees at the Harrow and McGregor locations were represented by the responding party United Brotherhood of Carpenters and Joiners of America ("Carpenters").

17. The Harrow location consists of a feed mill, a feed warehouse, two grain elevators, numerous grain silos, a petroleum depot, and a retail store with an adjacent chemical vault and machine shop. These facilities have been at this location since approximately 1960. Previously, the area used as a chemical vault was used to house a seed cleaning operation. However, that operation was destroyed in a fire in 1989 and was not used for seed cleaning purposes at any time relevant to this application.

18. There are two elevators and ten silos at the Harrow location which receive wheat, corn and beans from local farmers. The evidence indicates that farmers would drive their wagons to dump their grain in the grain elevators. From there, the grains would be transferred to the nearby silos for storage. The evidence concerning the use of the grain stored in the silos, and in particular, the proportion of the grain utilized in the feed mill operations is extremely unsatisfactory: thus, the statement of facts relates only that "some" of the grain received is used in production of feed at the mill. The remainder of the grain is sold and shipped to Windsor for use or transport elsewhere. Farmers would receive payment for their product brought to the elevator at the nearby store.

19. The feed mill at Harrow is a plant in which grain is processed into various animal feeds, and then bagged for sale. The feeds are produced by blending and mixing wheat, oats, cracked corn, soybean meal and other ingredients. Once blended and bagged, the feed is stored in the adjacent warehouse. The scale of operations of the feed mill appears to be relatively modest: approximately three to four tonnes per week of the feed is sold and transported elsewhere, including to the Stoney Point location; the remaining two to three tonnes per week are sold on location to farmers.

20. Farmers purchase the feed by going to the nearby store, where, as noted previously, transactions relating to the sale of grain, petroleum and other retail items are also effected. At the store, a customer's order is recorded, payment is made, and the feed is then loaded by employees at the feed warehouse or is picked up by the farmer directly at the mill. However, the sale of feeds constitutes only a portion of the total sales by the store. Especially during the spring months, the sale of seed, fertilizers, chemicals and pesticides accounts for a large majority of the sales. In the remaining months of the year, approximately 40% of the sales relate to feed, although there is no indication in the evidence what proportion of those sales are with respect to feed actually produced at the Harrow mill. Similarly, there was no evidence to indicate what overall proportion of the store's annual sales were attributable to the sale of feed, although given the above figures, and the submissions of counsel to the effect that sales would be particularly brisk during the spring months, it would appear to be substantially less than half. Finally, adjacent to the store is a gas bar operated on a year-round basis. All commercial transactions with respect to the gas bar were conducted at the store. Once again, no evidence was forwarded with respect to the proportion of store sales attributable to the gas bar.

21. At the time the Stoney Point Co-op took over operation of the facility, there were six persons employed at the Harrow location. Only one person was assigned specifically to the feed mill, although another employee appears to have worked there regularly. In addition, it appears that a number of the employees would work in the feed warehouse on an as needed basis.

22. The McGregor location has been operated as a branch of the Harrow operations for many years. It consists of a grain elevator, seven silos, a warehouse in which feed is stored, and a store at which the feed is sold. The warehouse and the store occupy one building. The warehouse is used to store livestock feed such as "chicken-feed". All the feed is obtained from the Harrow location, and consists both of feed that is processed at the Harrow location as well as that processed elsewhere. However, there was no evidence as to the proportion of the feed warehoused at McGregor that is produced at Harrow. The feed is sold to farmers in the surrounding area. All financial transactions with respect to the sale of feed are conducted in the store. With the exception of such items as dog and cat foods, animal feed is the only product normally sold at the McGregor store.

23. The elevator at the McGregor location receives wheat, corn and soya beans from farmers in the surrounding area. Local farmers drive their trucks to the elevator and deposit their grain there. The grain is then moved up through the elevator by a conveyor and then augured to one of the seven silos. Farmers store grain there and wait for the price to increase or, if the price is satisfactory at the time, sell it directly to the Co-op. Farmers are charged a fee for the storage. There was no evidence presented to us with respect to the ultimate destination of the grain stored at McGregor.

24. There is only one employee assigned to work at the McGregor location, although during the busy times of the year, he may be assisted by an employee sent from the Harrow location. Once again, the evidence is sparse as to the relative commercial significance of the feed aspect of the operation at McGregor. However, the evidence does indicate the grain purchasing element of the operation to be substantial, and occupies the majority of the sole employee's working time.

ii.) United Co-operatives of Ontario

25. In December, 1993, 101 purchased the assets of an additional four farm service centres that had to that time been owned and operated by the United Co-operatives of Ontario ("U.C.O."). These facilities were located at Cottam, Oldcastle, Kingsville and Comber, Ontario. With the exception of the Comber location, whose operations were not affected by the bargaining rights of any trade union, the employees engaged in the work at these facilities were subject to a collective agreement between the U.C.O. and the responding party United Food and Commercial Workers International Union.

26. The Cottam site is a complex that consists of a wide range of facilities including a farm supply retail store, grain elevators and silos, a merchandise warehouse, a fertilizer depot, a bulk petroleum storage depot, a workshop, a bulk chemical storage shed, and administrative offices. In addition there is a seed cleaning mill and a feed warehouse adjacent to the retail store. Little evidence was presented with respect to the relative commercial significance of the seed cleaning and feed warehousing aspects of the Cottam operation, although from the description of the various facilities and activities at the site, they would appear to be very minor indeed. The work on the seed cleaner is seasonal, lasting approximately for a month in the spring and a month in the fall. During these times, the seed cleaning facility was characterized as "busy", although there was no other evidence as to the overall significance of the activity.

27. Otherwise, there appeared to be a considerable amount of activity at the Cottam site. In addition to the retail sale of a wide range of farm implements and input products, the employees at Cottam are engaged in the sale and distribution of bulk petroleum, the purchase and storage of grain, as well as the sale and custom application of fertilizer and pesticides for farms. In support of the responding parties' position that the operation of the seed cleaner and feed warehouse was integrated into the operation of the remainder of the operations at Cottam, it was pointed out that financial transactions regarding seed and feed were conducted inside the store in which other articles (including seed produced and bagged elsewhere) are purchased, that the same scales used to purchase and sell grain was used to weigh the cleaned and bagged seed, and that the feed warehouse is situated adjacent to the retail store. Finally, the evidence was that although only "some" of the employees would be primarily responsible for the work at the seed cleaning operation, other employees would assist them on an as needed basis. Nevertheless, there was no evidence with respect to the overall proportion of time spent on work related to seed cleaning or feed warehousing, whether on an individual or group basis. The Board notes, however, that of the six employees assigned to the Cottam site, none of them is assigned primarily to perform seed cleaning duties.

28. The Arner, Ontario location operates as a branch facility of the Cottam, Ontario operation. None of the parties asserted that there were any federally declared works on the site. The location consists of a grain elevator and nearby silos, where local farmers bring grain to be graded and stored. There is a small office where invoices are issued to the farmers and other minor administrative matters relating to the sale and storage of the grain are performed. Employees from the Cottam site are assigned to work at the Amer location on an as needed basis.

29. The Comber, Ontario location consists of a country elevator located next to railway tracks. There are no employees assigned to the Comber location, and they are assigned from the Stoney Point site on an as needed basis. There was no evidence with respect to the regularity of the work at this location.

30. The facility at Kingsville, Ontario consists of a retail store complex, that features a green house, a lawn and garden centre, a fertilizer warehouse, a blender where fertilizer is mixed, a pesticide warehouse and a gas bar. In addition, on the site there is a feed warehouse, whose product is sold at the retail store. The evidence indicates that the five employees at the site perform a wide range of duties, including those related to the warehouse, on an as needed basis. However, none of the employees works primarily in the feed warehouse, nor is there any evidence with respect to the relative commercial significance of the feed warehouse aspect of the operation.

However, bearing in mind the various other facilities present at the site, the feed warehouse would appear to be a relatively minor aspect of the operations at the Kingsville site.

31. The circumstances of the Oldcastle location are similar to those at Kingsville. The portions of the Oldcastle location purchased from U.C.O. in December, 1993, similarly consists of a retail farm input store with a wide range of supplies. Its facilities include a greenhouse, lawn and garden centre, fertilizer warehouse, grain silos and an administrative office. In addition, there exists on the site a feed and seed warehouse, whose contents are sold at the retail store. No employee is assigned to perform work primarily in the feed warehouse, although any of the eight employees may work there on an as-needed basis. The Board was provided with no evidence as to the regularity of the work performed there, nor was there any evidence as to the relative commercial significance of the feed elements of the operation. Finally, there was nothing in the materials before us to let us determine whether feed storage, rather than seed storage, was the primary use of the warehouse building. Under all of the circumstances, it is safe to assume that the feed warehousing operates, at the highest, as one among many other aspects of the business at Kingsville and constitutes a relatively minor aspect of its overall operations.

iii.) Integration of Operations after the Transactions

32. Subsequent to the sales, a number of the operations of the various facilities were consolidated into the structure of the Stoney Point Co-op. Primarily, this entailed a centralization and consolidation of the administrative operations of the Co-op, as well as the rationalization of the sale and distribution of bulk petroleum products and the pesticide services offered by the various facilities. Thus, the evidence indicates that the electronic accounting system operating in the presale Stoney Point Co-op was now extended to the locations purchased from Harrow and U.C.O., such that the commercial transactions effected at each of the locations in the system are now recorded in the centralized accounting system. This, of course, would include the sale of feed processed at the Harrow feed mill and the seed milled at the other locations and the purchase of the products related to the operation of those facilities.

33. In addition, the evidence indicates that the Stoney Point Co-op entered into a joint venture agreement with a corporation formerly controlled by the Harrow Co-op to facilitate the sale and distribution of petroleum products throughout the area that is serviced by the now-enlarged operations. Otherwise, there appears to have been little effort to further co-ordinate any activities related to the elements of the operations that are directly affected by the declaration. It should be noted in this regard that the product of the Harrow feed mill continues to be distributed to other locations for sale in the new Stoney Point system, although the evidence does not disclose the proportion of the product that is so distributed, nor does it indicate the proportion of feed sold in the co-op system that originates at the Harrow mill.

III

34. Having regard to this evidence, it was the position of the responding party trade unions that the Board lacks jurisdiction to adjudicate upon this matter because the labour relations of the co-ops allegedly purchased by the applicants fall within the federal domain. Relying upon the recent decisions of the Supreme Court of Canada in Ontario Hydro v. Ontario Labour Relations Board et al., 1993 CanLII 72 (SCC), [1993] 3 S.C.R. 327, [1993] OLRB Rep. Oct. 1071 and Bell Canada v. Quebec (Commission de la sante et de la securite du travail), 1988 CanLII 81 (SCC), [1988] 1 S.C.R. 749, it was argued that the operation of any of the federally declared "works" on the sites necessarily entailed the existence of a "federal undertaking" there. Accordingly, it was submitted that, at the very least, the employment relationship of those persons working on or directly in connection with those works would fall within the scope of the provisions of the Canada Labour Code.

35. Nevertheless, it was recognized that a finding to that effect would not in itself oust this Board's jurisdiction to hear the present application since the substantial majority of the relevant operations fell outside the scope of the federal declaration in the Canada Wheat Board Act. To this end, it was argued further that, in the context of the Stoney Point Co-op, the operation of the feed mill, the seed cleaning mills and the various feed warehouses constituted "core federal undertakings" that operated in a relationship of sufficient integration with the remaining aspects of the locations so as to also bring them within federal jurisdiction. Counsel referred us to numerous authorities, both of this Board, and of the Courts, to support this position, including Reference re Industrial Relations and Disputes Act, 1955 CanLII 1 (SCC), [1955] S.C.R. 529, Montcalm Construction Inc. v. Minimum Wage Commission et al, 1978 CanLII 18 (SCC), [1979] 1 S.C.R. 754, C.S.P. Foods Ltd. and Canada Labour Relations Board et al. 1978 CanLII 3574 (FCA), [1979] 2 F.C. 23, Canadian Communications Structures Inc., [1992] OLRB Rep. July 777.

36. It is to be noted that although in their pleadings both responding parties took the position that the entirety of the applicants' operations were within the federal jurisdiction, that argument was not advanced by the responding parties at the hearing. Instead, it was the thrust of their submissions that the operation of those portions of the now enlarged Co-op that had previously been operated by Harrow and U.C.O. were the proper subject matter of the present inquiry and their submissions focused exclusively upon the integration of what were asserted to be the "core federal undertakings" with the "subsidiary" elements of the operations present at those sites.

37. On behalf of the employer, it was argued that the "core-subsidiary" analysis proposed by the trade unions was not appropriate in circumstances where there was, as in the present case, only one integrated undertaking present. Instead, it submitted, the initial task for the Board was the constitutional characterization of the undertaking, which the applicant equated with the integrated business operations of the Stoney Point Co-op in its entirety. Although as noted above, the employer declined to take a position on the constitutional question, it was submitted, among other things, that it was open for the Board to find that the presence of an integrated federal aspect in that undertaking was sufficient to render the labour relations of the applicants federal in their entirety. In support of that proposition, counsel relied upon Attorney-General for Ontario and Others v. Winner et al., [1955] A.C. 541 (P.C.), Toronto v. Bell Telephone Co. [1905] A.C. 52, and Transit Windsor, [1993] OLRB Rep. July 698.

38. Counsel fairly conceded that the application of this principle appeared to be restricted to "transportation and communication cases”, (and thus, with respect to "works" and "undertakings" that are federal by virtue of the provisions of sections 92(10)(a) and (b) of the Constitution Act). It was nonetheless submitted that an approach in which the constitutional character of the business taken in its entirety was appropriate in the context of the present constitutional issue and was urged upon us. However, when the source of the federal power that is being exercised in the present circumstances is taken into account, i.e., the declaration only of "works" under section 92(10)(c), we cannot agree that an analysis of the undertaking as a whole is the appropriate starting point in determining its scope. It is important to note that in the caselaw referred to us by counsel, and in cases such as Re Ottawa-Carleton Regional Transit Commission (1983), 1983 CanLII 1936 (ON CA), 44 O.R. (2d) 560 (Ont. C.A.) the Courts' inquiry into the "essential nature of the undertaking" in question is consistent with the provision of the Constitution Act that deems "undertakings" that connect the Provinces to be within the federal jurisdiction. It follows from such an inquiry that the entire undertaking falls within the federal jurisdiction even if only a tiny fraction of the overall operation of the business is so engaged (Re Ottawa-Carleton, supra). The inquiry in the present case, however, is of a fundamentally different sort since the basis upon which federal jurisdiction is claimed is not with respect to the "undertaking", but with respect to "works". Especially in light of the recent decision of the Supreme Court of Canada in Ontario Hydro, supra, in which the scope and nature of the federal declaratory power over "works" was exhaustively analyzed, it is clear that the approach most consistent with the character of the federal power being asserted under section 92(10)(c) consists of the identification and determination of the scope of operation of the "works" that are affected by the declaration.

39. In Ontario Hydro, supra, the Court considered the effect of the exercise of the federal declaratory power over nuclear facilities upon the labour relations associated with the operation of those facilities. Although the issue of the precise dividing line between the jurisdictions was not directly before the Court, and although the majority of the Court did not speak with a single voice, the Court nevertheless articulated principles that are germane to the issue before this Board. All members of the Court, including those joining in the dissenting opinion of laccobucci J., were in agreement that, for the purpose of determining the scope of the federal power under section 92(10)(c), it is necessary to characterize the "works" not merely as a physical entity, but in the functional sense, having regard to the "integrated activities carried out therein." ( citing Laskin's Constitutional Law (5th Edition, 1986), vol. 1, p. 629). Further, although they did so for differing reasons, a majority of the Court determined that the scope of the federal power was not restricted to "the physical shell" of the works, but their operations necessarily entailed (per LaForrest J.), or entailed on a prima facie basis (per Lamer C.J.C.), the labour relations of persons employed on or in connection with the federal works.

40. While it was suggested at the hearing that, on those grounds, it was appropriate to consider the entirety of the Stoney Point Co-op as an integrated undertaking for purposes of characterization of the federal power, we cannot agree that Ontario Hydro, supra, stands for the proposition that there remains no operative distinction between "works" and "undertakings" and that, therefore, whether it is the works or the undertaking that are declared should be a matter of indifference to us. To be sure, in Ontario Hydro, a majority of the Court rejected the notion that because the declaratory powers under section 92(10)(c) extend only to the "works" and not to the "undertaking" (as is the case in the powers accorded to the federal Parliament under section 92(10)(a) and (b)), the provincial character of labour relations related to such "works" would not be affected by a declaration pursuant to that provision. That is to say, the Court held that "works" can have labour relations associated with them. Nonetheless, although the Court rejected the works/undertaking distinction for that purpose, both the plurality holding of LaForrest J. and the concurring decision of Lamer C.J.C. make it clear that the scope of the declaratory power over works extends only so far as is necessary to give effect to the federal power being extended into what was previously the provincial domain, and only so far as it is necessary to give that power operational meaning. In this respect, both majority holdings determine that federal authority over labour relations extend only with respect to employees engaged "on or in connection with" the nuclear operations of Ontario Hydro and that the non-nuclear aspects of the Ontario Hydro undertaking would not be affected by the federal declaratory power.

41. While the plurality decision of LaForrest J. declines to enter into the question of the methods to be used in the course of determining the scope of federal authority in this respect, the decision of the Chief Justice makes it clear that the principles applicable to circumstances in which there are federally declared works operating in the context of a provincially regulated enterprise are those utilized by the Courts and labour relations tribunals in determining whether the work of employees is integrated into a "core federal undertaking":

The special problems raised by such divided activities within a single enterprise were canvassed by this Court in Northern Telecom Canada Ltd. v. Communications Workers of Canada, [1983] 1 5CR. 733. Most of Northern Telecom's employees were subject to provincial labour law. However, some employees were "installers", who installed telephone equipment in Bell Canada's telephone network. The Canada Labour Relations Board determined that the installers were not employed on or in connection with the federal enterprise that was Bell Canada, and who were outside its jurisdiction. This Court held that the installers were sufficiently integrated into the operations of Bell Canada to fall within federal labour relations jurisdiction. Writing for a majority of this Court, Estey J. described the inquiry before the Court, as it had been outlined by Dickson J. (as he then was) in an earlier incarnation of the litigation (Northern Telecom Ltd. v. Communications Workers of Canada, 1979 CanLII 3 (SCC), [1980] 1 S.C.R. 115). Dickson J. wrote (at p. 133):

In the case at bar, the first step is to determine whether a core federal undertaking is present and the extent of that undertaking. Once that is settled, it is necessary to look at the particular subsidiary operation, i.e., the installation department of Telecom, to look at the "normal and habitual activities" of that department as a "going concern", and the practical and functional relationship of those activities to the core federal undertaking.

42. Having regard to those principles, the Chief Justice found that the "normal and habitual activities" of persons employed in the course of the production of nuclear energy at Ontario Hydro's nuclear facilities was integrated into the operation of the federally declared works such that their labour relations were subject to federal regulation. However, the scope of operations of the federal works was narrowly defined and the term "on or in connection with" given a restrictive meaning. Indeed, the opinion of the Chief Justice appears to rest upon the lack of integration of the two functions, noting that "[o]nce the heat energy is produced, it matters little how it was produced for the rest of the generation phase."

43. To summarize to this point, then, in determining the scope of the federal power under section 92(10)(c), it is necessary to look at the "works" in question in an operational sense. At least on a prima facie basis, the federal power extends to the regulation of labour relations of persons engaged "on or in connection with" the operation of the federal works so understood. Because it is the "works", rather than the "undertaking" that are subject to the declaration, the scope of the federal power extends only so far as is necessary to effect the operation of the federal purpose set out in the declaration, and does not necessarily extend to the entire business in which the federal works operate. In circumstances (such as the present ones) in which there are federal works operating in the context of a business that is otherwise engaged in provincially-regulated activities, the appropriate method for determining the scope of the federal authority is the analysis traditionally used by the courts to determine whether the work activity entailed in operations subsidiary to a federal undertaking are "integrated" into the activities of that federal undertaking. (See also Eugene Kalwa, [1994] OLRB Rep. Mar. 277, where this Board, on the basis of considerations expressed above, found that the work of an inspector of nuclear facilities was in connection with the federally declared works.)

IV

44. Because the core/subsidiary analysis referred to in the Ontario Hydro, supra, decision requires application to a considerably different factual context in the present application (where the issue is the degree of integration of the applicants' various operations with the feed mill, feed warehouses and seed cleaning mills), it is useful to review it in more detail. The general principles underlying this question are well-established and have been articulated in a number of decisions of the Courts and labour relations boards. In Northern Telecom Ltd. v. Communications Workers of Canada et al ("Northern Telecom 1"), 1979 CanLII 3 (SCC), [1980] 1 S.C.R. 115 Dickson J. summarized the relevant principles in the following manner:

(1) Parliament has no authority over labour relations as such nor over the terms of a contract of employment; exclusive provincial competence is the rule.

(2) 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.

(3) 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.

(4) Thus, the regulation of wages 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.

(5) The question whether an undertaking, service or business is a federal one depends on the nature of its operation.

(6) In order to determine the nature of the operation, one must look at the normal and habitual activities of the business as those of a "going concern", without regard for exceptional or casual factors; otherwise, the Constitution could not be applied with any degree of continuity and regularity.

45. In determining the scope of the federal authority over labour relations, the courts have embarked upon an operational or functional inquiry in order to ensure that the constitutional provisions granting power to the federal government are given effect, while at the same time respecting the claims to provincial competence over the subject matter of labour relations. (Montcalm Construction Inc. v. Minimum Wage Commission, supra; Ontario Hydro, supra.) In this respect, the Courts have not permitted the niceties of corporate organization or proprietary claims to be determinative of whether the labour relations of an undertaking are subject to the federal jurisdiction. Rather, the focus of the inquiry has been upon the relationship between the services rendered by the employees in question and the operation of the federal works or undertaking in order to determine, whether in practical terms, those works are part of the federal undertaking. (Northern Telecom No. 2, supra, per Estey J.) Accordingly, just as the presence of federal works in a business will render its labour relations federal only to the extent necessary to achieve the federal objective set out in the declaration, (Ontario Hydro, supra.) the mere fact that a business has no corporate ties to a federal undertaking does not preclude it from also falling under federal jurisdiction if its operations are integrated into those of an undertaking operating federal works. (Northern Telecom No. 2, supra.)

46. The analytical approach that has been generally adopted in this respect is most usefully summarized in Arrow Transfer Company, Ltd., 74 CLLC 16,130, a decision of the British Columbia Labour Relations Board that has received considerable judicial approval:

They [the Courts] begin with the operation which is at the core of the federal undertaking (e.g. railway, shipping, or the postal service). They then look at the particular subsidiary operation engaged in by the employees whose collective bargaining is in question and reach a judgment about the relationship of that operation to the basic federal undertaking. The judges have used a variety of terms to characterize the part the particular operation may play in the over-all enterprise. It must have a "vital", "essential", "integral", "important", or "intimate" role in the undertaking if it is to fall within the jurisdiction of Parliament. As was said earlier, that has been the conclusion about the relationship of stevedoring to shipping and of mail pick-up to the postal service; the opposite conclusion was reached regarding the relationship of a hotel to the railroad. In each case the judgment is a functional, practical one about the factual character of the ongoing undertaking and does not turn on the technical, legal niceties of the corporate structure of the employment relationship.

47. The cases demonstrate that the extent or degree of integration of the function performed with that of a federal undertaking necessary to oust provincial jurisdiction is necessarily

high since, as noted, the real issue is whether, as a matter of fact, the work of the employees of the subsidiary operation is a functional part of the federal operation or undertaking. Thus, in finding that stevedoring work, which would otherwise fall within the provincial jurisdiction was federal in nature, the Supreme Court in Reference re Validity of Industrial Relations and Disputes Act (Can.) ("Stevedores' Case"), supra, concluded that it was "an integral part" of and "necessarily incidental to" the work of interprovincial shipping (per Estey J.) and that the shipping operations were "entirely dependent upon the services of the stevedores of the Company" (per Taschereau J). To similar effect, in Northern Telecom No. 2, supra, in finding that the labour relations of installers of certam telephone equipment were federally regulated, the Supreme Court noted the "almost complete integration of the day to day function" of those installers (who were employees of a company that was otherwise provincially regulated) with the operation of the telecommunications network owned by Bell Canada, a federal undertaking. It is to be noted that the functional relationship between the federal undertaking and the subsidiary operation was extremely close: indeed, in Estey J.'s characterization, it was a "very close, tightly scheduled integration of the services performed by the installers and the acceptance of those services by the employees of Bell into the telecommunications network without interruption of the performance of the network at any time". In short, the work of the installers was seen as an inherent part of the work processes engaged in by the federally regulated business. (See also Canadian Communications Structures Inc., supra.)

48. Conversely, in Canadian Pacific Railway Company and A. G. for B. C. et al., 1949 CanLII 278 (UK JCPC), [1950] A.C. 122 (J.C.P.C.), the court found the operation of the Empress Hotel in Victoria not to be sufficiently integrated into the operations of the railway undertaking notwithstanding that both the railway and the hotel were owned and operated by the same company. In characterizing the operation of the hotel as a "convenience" associated with the federal undertaking, the court made it clear that an element of functional or operational necessity must be present in the relationship between the subsidiary operation and the federal undertaking before the provincial jurisdiction would be displaced. This requirement has also been expressed in terms of a temporal analysis of the work process, in which the construction of an airport was characterized as being merely "preliminary" to the operation of the federal work and therefore remaining within the provincial jurisdiction. (Montcalm Construction Inc., supra.) In this respect, it appears that the Courts, in assessing the character of the connection between the two entities, will embark upon an examination of whether the work of the subsidiary operation is, by its very nature, in some way inherent in, or essential to, the operation of the core federal undertaking.

49. This point was recently underscored in Central Western Railway Corporation v. United Transportation Union et al., 1990 CanLII 30 (SCC), [1990] 3 S.C.R. 1112, the most recent decision of the Supreme Court of Canada in which the question of the requisite degree of integration of a subsidiary operation into a federal works or undertaking was examined. In that case, the Court found that the operation of a branch-line railway, which served no other purpose than the delivery of grain from elevators to the main CN track, was nonetheless insufficiently integrated into the operations of either of those federal operations so as to fall within the federal jurisdiction. The requirement of operational necessity, which was articulated by Dickson C.J.C. as the "dependence" of the federal undertaking upon the operations of the subsidiary, was expressed with particular clarity with respect to the railway's connection with the grain elevators:

…..the elevators are not dependent upon the continued operation of Central Western. Elevators exist to receive, grade, handle and store grain but are not directly concerned with the transportation of grain. Grain could be transported from the elevators by alternative means, such as trucking, without altering the usefulness of the elevators along the line. There is thus an insufficient nexus between the grain elevators and Central Western to bring the railway within federal jurisdiction. (per Dickson C.J.C., p. 1143)

50. Finally, in addition to considering the nature of the function being performed, the Courts have considered the integration of the work into the federal operation in quantitative terms. As was noted in the Ontario Hydro, supra, decision, the Courts will look to the "normal and habitual" nature of the activity in question and in this respect, will disregard the casual or exceptional performance of duties, even if they are integral to the operation of the federal undertaking. Thus, in Northern Telecom No. 2, supra, the Court stressed not only the nature of the functions of the installers, but also paid considerable attention to the fact that the employees concerned spent almost all of their time performing that function. Underlying this principle is an essentially practical concern: were casual and exceptional factors allowed to come into play in the course of the determination of who has legislative competence over a person's employment, "the Constitution could not be applied with any degree of continuity and regularity." (Northern Telecom No. 1, supra.)

V

51. It is with these considerations in mind that we turn our attention to the responding parties' assertion that the operations of the entirety of the applicants' business at the purchased sites are, for constitutional purposes, integrated into the operation of its feed mill, seed cleaner and feed warehouses.

52. Turning first to the Harrow site, the presence there of both a feed mill and a feed warehouse clearly marks that location as the highwater mark of "federal" activity. Only one employee is assigned to work on the feed mill on a regular basis, and it operates with significant degree of functional interrelationships only with the nearby grain elevators and silos and retail store. With respect to the grain facilities, it is clear that although the silos and elevators are useful for the operation of the feed mill, they are not essential or necessary to the operation of such a facility in the sense articulated in the jurisprudence. It was conceded by counsel in argument that it would be possible to operate the feed mill without the use of the extensive storage facilities present at the site: the grain used in the production process could be supplied to the mill by means of any number of other instrumentalities and in fact, farmers occasionally bring their grain directly to the mill to have it processed there on a "whil-U-wait" basis. In that respect, the grain elevators and silos are analogous to the branch line railway in the Central Western case, supra, which, although performing an important supply function with respect to two federal undertakings, was nonetheless not performing an operationally necessary one because that function was not inherent to the operation of the mill and could, in any event, be performed by other means.

53. It is noteworthy in this respect that the numerous silos and elevators present at the Harrow site operate for the primary purpose of engaging in the provincially-regulated grain trade, and its function of supplying grain to the mill appears to be its secondary function. We note in particular that the evidence indicates that only "some" of the grain stored in the silos and elevators is stored for use in the mill, and thus, we are satisfied that even if storage facilities of some kind were a requisite part of the production process, the character of the particular storage facilities present at the Harrow site are not functionally necessary to effect that operational purpose.

54. Finally, the evidence does not compel us to conclude that the work in the grain elevators and silos constitutes an inherent part of the production process at the mill, which we take to be the processing of grains and other materials into animal feeds (see Shur Gain, supra.) From our review of the materials before us, we are satisfied that to the extent that the work can be characterized as related to the operation of the federal operation, it is preliminary to the work involved in the processing of feed and in that respect, is analogous to the construction of an airport. In sum, we are satisfied that the grain elevators and silos on the Harrow site are not an integral part of the feed mill operations situated there, but are, at most, a convenient adjunct to it. Accordingly, we find that work on or in connection with the grain storage facilities on the Harrow site is not subject to federal regulation.

55. More difficult is the question of the work involved in the operation of the retail store at Harrow since in that case, the evidence is clear that feed produced at the mill or stored at the adjacent warehouse is sold there. Moreover, there is some authority for the proposition that the work involved in the sale of the product of feed mills is integral to its operation. (See in particular, C.S.P. Foods, supra; but, cf. Regina v. Saskatchewan Wheat Pool (1978), 1978 CanLII 1819 (SK CA), 89 D.L.R. (3d) 755 (Sask. C.A.)) However, upon careful consideration of all the circumstances, we are not satisfied that the work in the retail store at the Harrow site can be characterized as "normal and habitual activities" in relation to the operation of the federal works. It is important to note that the store at the site performs a wide variety of functions, only one of which is the sale of feed. Further, it is clear that the sale and storage of feed is not a principal aspect of the overall operation of the store and thus, of the employees working there. Assuming, without deciding, that the sale of feed from the Harrow mill constitutes a function that is integral to the operation of the mill, we are not satisfied that the work of employees at the store entails a sufficiently regular connection to the operation of the mill to warrant a finding that their labour relations fall within the ambit of federal regulation.

56. In Northern Telecom No. 2, supra, despite the evidence that virtually all the employees' work was closely integrated into the work processes of the federal undertaking, the Court felt compelled to comment that, nonetheless, the decision fell "close to the line". Similarly, in coming to the conclusion that the work involving the sale of feed products was subject to federal jurisdiction, the court in C.S.P. Foods, supra, found that the sale of feed products was a "substantial" part of the operation in question. In the present circumstances, the Board infers that the work in the store would only occasionally involve the employees in feed sales, and even then, it is unclear as to whether the transactions would be with respect to feed produced at the Harrow mill or stored at its warehouses. Similarly, although employees at the store may on occasion be requested to perform functions in the feed mill, this is clearly on a casual, "as needed" basis. Conversely, we find it likely that the predominant part of the work at the store would involve activity altogether unrelated to the operation of the feed mill and feed warehouse, such as recording transactions regarding grain (which, as we have found above, are not functionally integrated into the operation of the feed mill), facilitating the sale of products in the retail store, making arrangements with respect to the sale of petroleum products, and servicing the gas bar. On balance, we are satisfied that the work, so characterized, falls significantly short of the line drawn in the Northern Telecom decision, and accordingly, we find that work in connection with the operation of the store not to be "normal and habitual" activity related to the operation of the feed mill and feed warehouse at the Harrow site.

57. Having so found, work at the remaining aspects of the Harrow site can be dealt with summarily, particularly since counsel for the responding parties conceded that the claim to their being within the federal jurisdiction rested upon their connection with the operation of the store. Even were the work in the store to be part of the operation of the federal work, we were provided no authority for the kind of constitutional leapfrogging proposed by the responding party. The work entailed in the operation of the bulk petroleum depot, the administrative offices, the chemical vault and the machine shop cannot under any test formulated by the Courts or this Board be seen as integrated into the operation of the feed mill or the feed warehouse. Indeed, that work exhibits a rather fortuitous connection with the operation of the feed mill and warehouse such that it is difficult to characterize its relationship even as one of operational convenience. Accordingly, the Board has no hesitation in concluding that their operation does not attract federal regulation.

58. The work entailed in the operation of the sites formerly owned by the U.C.O., that is, the facilities at Cottam, Arner, Oldcastle, and Kingsville is similar in nature to that at the Harrow store in the sense that a portion of it could entail functions that are in connection with the operation of a federal work. Even more so than at Harrow, however, it is clear that the warehousing of feed and its subsequent sale, as well as the operation of the seed cleaning mill is but one operation among many others engaged in by the employees of what are essentially rural department stores. The businesses operating at each of the sites offer a wide range of products and services, ranging from pesticide sales and application to retail lawn and garden centres to bulk petroleum sales, that have, at the highest, a tangential connection to the operation of the "federal undertakings" in question.

59. In quantitative terms, the evidence does not suggest that the federal elements of the operations are anything but a minor component of the overall operation of the sites. Although the evidence regarding the actual work of the employees is left for the Board to surmise, what is clear is that none of the employees engaged at these sites work primarily in direct connection with the seed cleaning mills or feed warehousing operations. We note that, to the extent that the other employees are requested to work on the seed cleaning operations, it is on a seasonal and casual basis, and therefore the work cannot be considered part of their "normal and habitual" activities. Furthermore, it would appear most probable in all of the circumstances that employees working in the retail operations would spend only a small portion of their time actually engaged in work related to the operation of the feed warehouses. Bearing this in mind, we conclude that the work entailed in the operation of these retail facilities, although occasionally entailing work that we are prepared to assume is integral to the operation of the federal works, nonetheless cannot be fairly characterized as work in connection with a federal undertaking as it is understood in the jurisprudence. Accordingly, we are satisfied that the work at these stores also does not attract federal regulation and is therefore subject to the provisions of the Ontario Act.

VI

60. To summarize, we have not been persuaded by the responding party trade unions that the operation of the grain elevators, silos, retail store and other operations at the Harrow site are sufficiently integrated into the operation of the feed mill and feed warehouse situated there so as to be subject to regulation by the federal Parliament. Similarly, we have concluded that the work of employees engaged in the operation of the sites at Cottam, Arner, Oldcastle, and Kingsville is insufficiently integrated with the operation of the various federal works situated there to fall within the federal jurisdiction. Having so determined, it is apparent to us that the labour relations of a substantial bulk of the operations of the applicants at the locations it purchased in 1993 are subject to regulation by the Province of Ontario, and that consequently, this Board is cloaked with jurisdiction to proceed with the merits of the present application.

61. We note that no party took the position at the hearing that the overall operations of the applicants were subject to federal jurisdiction, nor that its operations at the Stoney Point and Belle River locations were subject to federal regulation. Accordingly, although there would appear to be little material difference between the relationship of the federal works to the remainder of the operations situated there with the circumstances that obtain at Harrow, we decline to make any ruling with respect to that issue.

62. Finally, we make no determination at this point in the proceedings with respect to our jurisdiction over labour relations of the remaining aspects of the applicants' operations (namely, the work of the employee assigned to operate the feed mill at the Harrow location, and of the employee engaged at the McGregor location). Given that we have already ruled that we have juris­

diction to hear the merits of this application, a ruling as to the constitutional status of their labour relations would be unnecessary and gratuitous.

63. In conclusion, for the reasons expressed above, we are not persuaded that the responding parties' objection to our constitutional authority to hear the merits of the present application are well-founded and are satisfied that we have jurisdiction to hear the matter.

64. The matter is referred to the Registrar for scheduling of the merits of the application.

DECISION OF BOARD MEMBER J. A. RUNDLE; February 3, 1995

1. I dissent from the position taken by the majority in this award. I would have upheld the trade unions' position that the applicants business is engaged in the operation of "works... for the general advantage of Canada", declared pursuant to the provisions of section 93(10)(c) of the Constitution Act.

2. The respondent trade unions' argument supporting their position for federal jurisdiction focused on the relationship between the retail stores and the federal declared works (the feed, and seed mills and warehouses) at the various branches of Stony Point. The trade unions' argument, which I support, was essentially that because the stores were sufficiently integrated with the federal works, the stores themselves then were under federal jurisdiction. It would then flow that the other operations at the various sites (gas bars and garden centres) were also under federal jurisdiction because they were integrated with the retail stores. The majority of the Board in its award pointed out that the test for federal jurisdiction focuses on the degree of integration between the subsidiary operation and the federal undertaking. The majority found that there had to be "normal and habitual" integrated activity between the retail stores and the federal works in order to fall within federal jurisdiction. The majority found that this level of integration did not exist between the stores and the federal works. In its analysis the majority used the Harrow operation as representative of all the stores at Stony Point. The majority found that the work in the store very infrequently involved feed sales and that the predominate part of the work at the store involved activity unrelated to the feed mill and warehouse. Further, that the portion of the stores annual revenues attributable to the sale of feed appeared to be less than half. As a result of these findings the majority found the interactions between the store and the declared works did not meet the threshold of "normal and habitual".

3. The two federal works at the Harrow site, the feed mill and a feed warehouse as well at the retail store, grain silos, the petroleum depot, chemical vault and the machine shop all comprise integral parts of one business. Indeed all these components are run as one integrated business at Harrow. The majority, in my respectful submission, has to view the Harrow operation as one business, not as a series of individual components. All the components including the federal works comprise one business which is how the operation has always functioned and which was the evidence before us. The evidence discloses that there are two federal works at the Harrow site, a feed mill and a feed warehouse. All transactions related to the sale of grain at Harrow take place, naturally, at the store. One employee was specifically assigned to the feed mill and a number of employees worked in the feed warehouse on an "as needed basis". Clearly the work force of the "business" comprised the pool of employees from whom individuals were drawn to work in the various components of the business, including the feed mill and feed warehouse. In my view this common staffing of the federal works and the other components creates a high degree of integration between these components. The majority found that there were no employees assigned exclusively to the feed warehouse; instead a "number" of the employees would work in the feed warehouse on an "as needed basis". (paragraph 21) It therefore seems evident that employees move freely between the two departments and are responsible for duties in both. This common staffing, with employees moving back and forth between these two areas performing duties in both suggest a high degree of integration.

4. The activities of the retail store as they relate to the feed mill and feed warehouse are actually quite substantial and do constitute "normal and habitual activity". The majority found that feed sales during the spring months were "particularly brisk" and that "in the remaining months of the year approximately 40% of the sales were related to feed". (See paragraph 20 of the award) With respect, the feed sales represent a significant portion of the stores activity, and that as an activity, account for 40% of sales for eight months of the year and account for brisk sales for the remaining four months. Therefore this can only represent a "normal and habitual" component of the store's total activity. The test for constitutional jurisdiction has often been characterized as a factual one, that not surprisingly turns on the particular circumstances of each case. In Northern Telecom Ltd. v. Communication Workers of Canada, 1979 CanLII 3 (SCC), [1980] 1 S.C.R. 115 (Northern Telecom Ni), the court stated at page 133 that the analysis:

"is a functional practical one about the factual character of the ongoing undertaking".

In Central Western Railway Corporation v. United Transportation Union et al, 1990 CanLII 30 (SCC), [1990] 3 S.C.R. 1112 at page 1140, the court affirmed that the test for jurisdiction:

"should be flexible and attentive to the facts of each particular case".

The application of the jurisdiction test requires an evaluation of particular circumstances within a particular context, and not the application of mechanical formulas. It is an exercise of judgement on the part of the adjudicator. The majority found that, activity that constitutes approximately 40% of annual sales, does not meet the required threshold. However the test requires a judgement call, not that specific criteria be applied. There is, with respect, no "magic number", no specific criteria that must be met. While the majority found that 40% of sales did not represent a sufficient amount of activity, there is nothing special about the figure of 40%; I would argue that 40% is actually sufficient to warrant federal jurisdiction.

5. The majority justification for its finding relies on the quantity of the store's time and revenue that relates to the feed mill and feed warehouse. With respect, a quantitative analysis is inappropriate in determining jurisdiction. Case law in the transportation area has indicated that even a limited amount of work related to a federal undertaking can trigger federal jurisdiction. Findings of federal jurisdiction have been made when only 3% of a transit system's total yearly working hours were extra provincial. (Transit Windsor, OLRB Rep. July 1993 at 698), or where only 1% of a bus chartering company's total revenues were from extra provincial charters (Charterways Transportation Limited, [1993] OLRB Rep. Nov. 1125). And in Re Ottawa-Carleton Regional Transit Commission and Amalgamated Transit Union, Local 279 et al, (1983) 44 O.R. (2d) (C.A.) at 560, the municipal transit system was found to be under federal jurisdiction because 2-4% of its operations extended from Ottawa into Hull, Quebec. I acknowledge that the transportation cases may be distinguished from the present case as the test for jurisdiction has traditionally turned on the criteria of "regular and continuous" activity. However, in Re of Ottawa-Carleton, the court made a valuable observation regarding the drawbacks in applying a quantitative analysis. At page 570 the court said:

"There are problems inherent in a quantitative approach. For example, the question must always arise, where should the line be drawn in any particular case? Should the critical ratio be 80-20, 90-10, 95-5 or 60-40"?

Even if the Re Ottawa-Carleton case is distinguishable because it is a transportation case, the articulation of the problems created by a quantitative analysis, of where to draw the line are still very relevant. The majority finds that transactions from the feed warehouse that account for approximately 40% is not sufficient to constitute "normal and habitual activity", then what does? And how will it be determined how much is enough. The application of this quantitative analysis by the Board raises, with respect, problems of arbitrariness and lack of predictability.

6. C.S.P. Foods Ltd. and CLRB et al, 1978 CanLII 3574 (FCA), [1979] 2FC 23, supports the principle that the marketing area of a feed related business is integral to its operation. The court found that the marketing office for the Saskatchewan and Manitoba wheat pools was an integral part of a federally regulated grain related business, and therefore came under federal jurisdiction. At page 31 the court said:

“….the marketing of the manufactured product [was] just as essential [a] component of the entire operation as the work of the mill employee who weighs the farmer's rapeseed or who operates the crushing mill".

Clearly the stores in Stoney Point play as critical a role in the Stoney Point business as the marketing office did in C.S.P. Foods, and should therefore be under federal jurisdiction.

7. I note that for purposes of this hearing the parties agreed that labour relations with respect to the grain elevators fell within provincial jurisdiction. As it is the Board's usual practice to honour the parties agreement, I do so regardless of my personal views on this particular issue.

8. At paragraph 52, the majority seems to rely on Central Western Railway Corporation v. United Transportation Union et al, 1990 CanLII 30 (SCC), [1990] 3 S.C.R. 1112 which is the most recent decision of the Supreme Court of Canada in which the question of the requisite degree of integration of a subsidiary operation into a federal works or undertaking was examined, as standing for the proposition that one must examine whether a component of a business might be dispensed with, or "performed by other means". By such reasoning, the presence of a federal works in the integrated business could potentially be ignored. With respect, this case does not stand for the proposition the majority says it does and consequently is of little assistance in determining the case before us. The Canadian Western Railway case did not involve an integrated business, as this case does. It involved a short railway spur which, on the facts, was clearly a work or undertaking situated entirely within the province of Alberta, and it had no physical or other connection with the CNR, a railway clearly under federal jurisdiction. Absent any other relevant factors, therefore, it was beyond dispute that the railway spur was under provincial jurisdiction. It was contended however, that because the railway spur serviced a number of grain elevators, themselves under federal jurisdiction, this brought the railway spur under federal jurisdiction. The court rejected this proposition, holding that the elevators were not dependent upon the continued operation of the railway spur. The elevators could use any means of transportation, and the fact they chose to use the railway spur did not bring the spur itself under federal jurisdiction.

9. With respect, this case does not stand for the proposition that one can hypothetically dismantle the component parts of an integrated business, in order to determine whether the owner of the business might not have integrated them. The case involved several businesses, not one, and the court simply determined that merely because they were useful to each other did not make them integral parts of each other for constitutional purposes.

10. To accept, as the majority appears to do, that one must theorize about whether the owner of the enterprise might have done things differently, would involve turning a number of constitutional propositions upside down. The entire functional test of jurisdiction requires an analysis of what the enterprise does, not what it might have done. There is nothing in the Central Western Railway case that, in my view, suggests differently.

11. I return to my original proposition that we are dealing with one integrated business enterprise - and the federal works on each site are fully integrated into that business - they are not viewed as a separate independent component - they are part of the total business. As stated earlier it is my position that the stores are under federal jurisdiction therefore the other aspects of the operations on each site are also under federal jurisdiction. All operations on each site are fully integrated into the store's operations. All the financial transactions related to the other aspects of the operation are conducted through the stores. The employees working on each site can be called upon to work in any aspect of the operation including the feed mill or the feed warehouse. If the stores are federal, as I contend they are, then the rest of each site, and the entire Stoney Point operation, must also be federal in order to facilitate viable labour relations. To do otherwise would allow parts of each site to be under different labour relations jurisdiction. One can only begin to imagine the chaos and problems this situation would create. Due to the fact that employees at each site move about from one component to another, they could be moving from provincial to federal jurisdiction every time they walked from the gas bar into the store, or from the garden centre to the feed mill. This kind of split jurisdiction is clearly unacceptable as it would lead to labour relations problems. The court commenting on a similar situation in Construction Montcalm Inc. v. Minimum Wage Commission et al, 1978 CanLII 18 (SCC), [1979] 1 SCR 754, said at page 776:

"...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".

The stores, in my respectful submission, are within federal jurisdiction therefore the rest of the operations at each site are also within federal jurisdiction. To do otherwise, would result in labour relations chaos. The court did allow split jurisdiction in Ontario Hydro v. Ontario Labour Relations Board et al, 1993 CanLII 72 (SCC), [1993] 3 SCR 327, but that case is clearly distinguishable. The operation at Ontario Hydro dealt with relatively discrete, separate divisions within the entire corporate entity; the nuclear and non-nuclear divisions. There was no evidence of the sort of employee interchange, similar to what we have here. In the Stoney Point operations there are no such separate departments, and because of the small scale of the business, and the movement of personnel within the different operations, it would be impossible to create the divisions upon which Ontario Hydro relies. As a factual matter, the Court proceeded upon the assumption that the federal and provincial works were severable for constitutional purposes, that is not the case here.

12. At paragraph 38 and following, the majority appear to read the Ontario Hydro case as standing for the proposition that there is a fundamental distinction between the treatment of "undertakings" and "works" for constitutional purposes. With respect, I do not agree that such a distinction, if it exists at all, has the impact the majority appears to believe it has, nor do I believe it compels a different result in this case. I believe this case highlights the futility of attempting to limit federal jurisdiction only to particular "works" while extending jurisdiction to the rest of the business. This is particularly so, where as here, the federal works are integrated into one business. As I indicated, the court in Ontario Hydro proceeded on the assumption that the federal works and the rest of the business were severable for constitutional purposes, and that a dividing line could be drawn between persons employed in connection with the federal works and persons who are not. Such a dividing line cannot be drawn here. To allow mixed federal and provincial jurisdiction over one integrated business will, in my view, do nothing but produce confusion and uncertainty.

13. The majority declined to make any determination as to the jurisdiction that would apply to the feed mill at Harrow and the McGregor location. With respect, the work at these two sites is clearly federal and to not so find would split the Stoney Point operation between federal and provincial jurisdiction which would lead to the same serious labour relations concerns mentioned earlier.

14. In conclusion, I would have found that the Stoney Point sites including the feed mill at

Harrow and the McGregor location fell within federal legislation for labour relations purposes. As

a result the Board has no jurisdiction to adjudicate the section 1(4) and 64 application.