Amec Foster Wheeler Americas Limited v. Labourers’ International Union of North America, 2019 ONSC 5613

CITATION: Amec Foster Wheeler Americas Limited v. Labourers’ International Union of North America, 2019 ONSC 5613

DIVISIONAL COURT FILE NO.: 537/18
DATE: 20191001

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

Swinton, Backhouse and Wilton-Siegel JJ.

BETWEEN:

AMEC FOSTER WHEELER AMERICAS LIMITED

Applicant

– and –

LABOURERS’ INTERNATIONAL UNION OF NORTH AMERICA, ONTARIO PROVINCIAL DISTRICT COUNCIL, INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 793 and ONTARIO LABOUR RELATIONS BOARD

Respondents

COUNSEL:

William D. Anderson, for the Applicant

Lorne A. Richmond and Joshua Mandryk, for Labourers’ International Union of North America, Respondent

Kirsten Agrell and Steven Weisman, for International Union of Operating Engineers, Local 793, Respondent

Aaron Hart, for the Ontario Labour Relations Board, Respondent

HEARD at Toronto: July 25, 2019

Swinton J.:

Overview

[1] Amec Foster Wheeler Americas Ltd. (“Amec”) has brought this application for judicial review seeking to quash a decision of the Ontario Labour Relations Board (the “Board”) dated June 27, 2018. The Board granted applications for certification brought by the respondents Labourers’ International Union of North America, Ontario Provincial District Council, and the International Union of Operating Engineers, Local 793 (the “Unions”). Amec argues that the Board had no jurisdiction to grant these applications, because the employees affected by the decision were subject to federal labour relations jurisdiction.

[2] For the reasons that follow, I would dismiss this application for judicial review, as the Board correctly held that it had jurisdiction to apply the Labour Relations Act, 1995¸ S.O. 1995, c. 1 (the “LRA”) and grant the applications for certification.

Factual Background

[3] In early 2017, the Unions filed construction industry applications for certification with the Board in respect of Amec employees working at a project at Port Granby, Ontario. Amec held a contract to do work on the project related to the remediation of historic low-level radioactive waste and contaminated soil.

[4] The Port Granby Project is one of two projects that make up the Port Hope Area Initiative (“PHAI”), which commenced in 2001. The PHAI is a federal government project for the long-term management of historic low-level radioactive waste. Much of the waste resulted from the refining of radium and uranium by the former El Dorado nuclear plant.

[5] The old Port Granby Waste Management Facility is located on land owned by Atomic Energy Canada Limited (“AECL”), a federal Crown corporation. Low-level radioactive waste and other industrial contaminants have been stored on that land for many years. Serious concerns arose about the containment of the waste, because it is buried in trenches in the ground near Lake Ontario, and erosion and leakage have occurred on the site. As part of the PHAI, the waste is to be excavated and relocated to a new, engineered landfill repository that will be above ground and located approximately one kilometer from the old facility. This will be the new Port Granby Long-Term Waste Management Facility.

[6] There are three phases to the Port Granby project: environmental assessments (Phase 1, completed in 2009); construction and development (Phase 2); and long-term monitoring and maintenance of the new facility (Phase 3). The entire project is undertaken pursuant to a waste nuclear substance licence that was first issued to AECL and then to Canadian Nuclear Laboratories Ltd. (“CNL”) by the Canadian Nuclear Safety Commission (the “Commission”) pursuant to s. 24 of the federal Nuclear Safety and Control Act, S.C. 1997, c. 9 (the “NSCA”). The licence specifies that the licensee is authorized to “possess, package, transport, transfer, manage and store the nuclear substances … that are required for, associated with or arise from Phases 2 and 3 of the Port Hope Area Initiative – Port Granby Long-Term Waste Management Facility…”.

[7] According to the Board, “[t]he mandate of CNL includes the management of AECL’s (and Canada’s) radioactive waste liabilities” (at para. 25). As licensee, CNL is responsible for ensuring compliance with the terms of the NSCA and its licence.

[8] Amec is one of a number of subcontractors engaged by CNL to perform different aspects of the work at Port Granby. The parties agreed at the Board hearing that the proper employer was Amec Foster Wheeler Americas Limited (“Amec”). Amec is an international organization with headquarters in the United Kingdom. It employs approximately 36,000 employees worldwide and operates in many countries. Through its group of companies, it performs consulting, construction and construction management services in relation to various sectors. In Ontario, the list of its projects in 2016 ran to over 100 pages and included wind farms, highway reconstruction, and construction work at the Bruce Nuclear Generating Station.

[9] Amec Environmental and Infrastructure (“Amec E&I”), one of the Amec group of companies, partnered in a joint venture with Chicago Bridge & Iron Company and successfully bid on Contract C in respect of Phase 2 of the Port Granby Project. Their contractual responsibilities were for the construction of the new waste management facility, the excavation and transportation of approximately 450,000 cubic meters of historic low-level radiation waste and contaminated soils from the old facility to the new facility, and the transition to long-term monitoring and maintenance of the new facility. Amec E&I is in the business of environmental and infrastructure engineering, consulting and project management. Its work includes, but is not restricted to, environmental and soil remediation in the nuclear energy sector.

[10] Amec does not hold a licence from the Commission. The terms of its work are governed by the contract specifications set by CNL, and it is subject to CNL oversight. However, as the Board noted, the performance of the Contract C work is under Amec’s operational control and direction (at para. 45). Amec established a radiation protection zone around the site and controls access of its employees and subcontractors.

[11] Amec completed the construction of the waste depository cell at the new facility in Clarington in September 2016. Stage two of the contract, the remediation and restoration of the old facility and the excavation and transportation of the waste to the new facility, commenced in November 2016 and was ongoing at the time of the Board proceedings. Once the contract is performed, Amec will have no further role in the ongoing operation of the waste management facility.

Labour Relations Jurisdiction in Canada

[12] Labour relations are presumptively a matter of provincial jurisdiction pursuant to the province’s legislative authority over property and civil rights under s. 92(13) of the Constitution Act, 1867. Federal regulation of labour relations is exceptional and arises only where necessary to ensure an integral element of federal legislative competence.

[13] As the Supreme Court of Canada stated in Tessier Ltée v. Commission de la santé et de la sécurité du travail, 2012 SCC 23, [2012] 2 S.C.R. 3 at para. 17:

… the federal government has jurisdiction to regulate employment in two circumstances: when the employment relates to a work, undertaking, or business within the legislative authority of Parliament; or when it is an integral part of a federally regulated undertaking, sometimes referred to as derivative jurisdiction.

Thus, direct federal jurisdiction over labour relations and employment regulation arises when “the work, business or undertaking’s essential operational nature brings it within a federal head of power” (at para. 18). For example, a company may be a federal undertaking pursuant to s. 92(10) and s. 91(29) of the Constitution Act, 1867, because it is a transportation undertaking operating beyond provincial borders (s. 92(10)(a) and (b)), or it is a local work that has been declared by the Parliament of Canada to be for the general advantage of Canada pursuant to s. 92(10)(c). Federal jurisdiction over labour relations and employment regulation can also arise derivatively, when a local business has become so integrated with a federal undertaking that it essentially functions as part of the federally regulated entity and loses its distinct character (Tessier at paras. 45 and 46).

[14] In either situation - direct jurisdiction or derivative jurisdiction - the Supreme Court has emphasized that “we determine which level of government has labour relations authority by assessing the work’s essential operational nature” (at para. 18). The Court also emphasized that the analysis focuses on “the enterprise as a going concern and considers only its ongoing character” (at para. 19).

The Board’s Decision

[15] The Board held a five day hearing in which it considered an agreed statement of facts and heard evidence and argument. In lengthy reasons, it analyzed the evidence and the constitutional jurisprudence, and concluded that the labour relations of Amec came within provincial jurisdiction. The Board rejected Amec’s arguments that it came within federal jurisdiction, either directly as a federal work or undertaking, or by way of derivative jurisdiction. Accordingly, the labour relations of Amec and its employees at the Port Granby Project were subject to provincial jurisdiction under the constitution.

The Standard of Review

[16] The parties agree that the standard of review in this application is correctness, as the Board was applying principles of constitutional law.

[17] However, the Board also made findings of fact in its decision. While the parties had relied on an agreed statement of facts, the Board also heard evidence over the course of the hearing. Its findings of fact are entitled to deference, and those findings of fact should not be overturned unless they are unreasonable. As stated in Consolidated Fastfrate Inc. v. Western Canada Council of Teamsters, 2009 SCC 53, [2009] 3 S.C.R. 407 at para. 26:

Where it is possible to treat the constitutional analysis separately from the factual findings that underlie it, curial deference is owed to the initial findings of fact …

Issues

[18] Amec argues that the Board erred in finding that provincial labour relations law applies in this case. Amec submits that it is subject to federal labour relations legislation, not provincial, either because it is a federal undertaking, or because it performs essential and vital work for a federal undertaking, resulting in derivative jurisdiction.

Amec is Not a Federal Work or Undertaking

[19] Federal jurisdiction over uranium derives from the peace, order and good government clause in s. 91, as well as the exercise of the declaratory power in ss. 92(10)(c) and 91(29) of the Constitution Act, 1867 (see Ontario Hydro v. Ontario (Labour Relations Board), 1993 72 (SCC), [1993] 3 S.C.R. 327). Section 92(10)(c) excludes from provincial jurisdiction local works declared by Parliament to be for the general advantage of Canada or for the advantage of two or more provinces, even though those undertakings are wholly situated in the province.

[20] Parliament has exercised its declaratory power pursuant to s. 71 of the NSCA, which states:

Any work or undertaking constructed for the development, production or use of nuclear energy or for the mining, production, refinement, conversion, enrichment, processing, reprocessing, possession or use of a nuclear substance or for the production, possession or use of prescribed equipment or prescribed information is declared to be a work or undertaking for the general advantage of Canada. (emphasis added)

[21] Section 26 of the NSCA sets out the requirement for a licence. Subject to the regulations, a person must have a licence in order to

(a) possess, transfer, import, export, use or abandon a nuclear substance, prescribed equipment or prescribed information;

(b) mine, produce, refine, convert, enrich, process, reprocess, package, transport, manage, store or dispose of a nuclear substance” …

[22] There is no dispute that AECL, PHAI and CNL and their respective labour relations are within federal jurisdiction. The Port Granby Project is federally regulated pursuant to the NSCA, given that it is a work or undertaking constructed for the possession of a nuclear substance.

[23] Amec first argues that the Board erred in finding that it was not a work or undertaking declared to be for the general advantage of Canada pursuant to s. 71 of the NSCA. Essentially, Amec argues that it is a work or undertaking constructed for the possession of a nuclear substance – that is, the nuclear waste it is excavating and transporting to the new facility. It emphasizes the degree to which it controls the project site – for example, it has erected a fence around the worksite, and it controls access to the site. It is subject to detailed regulations under the NSCA with respect to the handling of nuclear substances, and it has possession of those substances, at a minimum, when its employees and subcontractors excavate the waste and contaminated soil, transport them and deposit them at the new waste management facility’s site.

[24] I disagree. Although Amec argues that it is in “possession” of nuclear substances, its physical possession is not enough to make Amec a federal undertaking. The wording of s. 71 of the NSCA is clear - Amec must be a work or undertaking that was constructed for the possession of nuclear waste to come within the declaration. That requires an examination of the operations of Amec as an ongoing concern, as the Supreme Court stated in Tessier. Such an examination demonstrates that Amec is not such a work or undertaking.

[25] The nuclear waste is the property of AECL and the Government of Canada. Amec is in physical possession only as a result of the contract with CNL, the licensee in charge of the project. Moreover, Amec is involved with nuclear substances only on a temporary basis while it performs part of its contract, a contract dealing with construction and demolition. It is CNL that has the licence to possess the nuclear substance, and it bears the responsibility for dealing with the nuclear waste in accordance with the NSCA, as set out earlier in these reasons. CNL’s Port Granby project is a work or undertaking of the kind contemplated by the declaration in s. 71 of the NSCA.

[26] This is not a case like Pronto Uranium Mines Ltd. v. Ontario (Labour Relations Board), 1956 153 (ON SC), [1956] O.R. 862 (S.C.J.), where the labour relations of companies engaged in mining and concentrating uranium ore were held to fall within federal jurisdiction. Those companies clearly fell within the declaratory language of the predecessor to s. 71 of the NSCA dealing with uranium mines.

[27] Nor is this a case like Ontario Hydro, where a narrow majority of the Supreme Court held that the labour relations of employees of Ontario Hydro engaged in the generation of nuclear energy fell within federal jurisdiction. Again, these employees were directly involved in nuclear power generation, and accordingly, the work came within the declaration, leading a majority of the Supreme Court to hold that federal labour relations law applied.

[28] As the Supreme Court made clear in Tessier, in determining whether an entity is a federal undertaking, one looks at the essential operational nature of the business. Amec is a large international company normally operating in construction and consulting work in a variety of settings, both in Ontario and elsewhere. It is not a work constructed for the purpose of possessing nuclear substances, nor is that its essential operation. Thus, Amec is not a work or undertaking covered by the declaration in s. 71 of the NSCA.

[29] In the alternative, Amec argues that it is a federal undertaking because it stands in the place of CNL in carrying out the excavation and relocation of the waste. It submits that its employees are “employed on or in connection with the operation of” the Port Granby project, citing s. 4 of the Canada Labour Code, R.S.C. 1985, c. L-2 (the “Code”). In response, the Unions argue that Amec is engaged in construction and demolition work for CNL, but it is not a part of or subsumed in the federal undertaking.

[30] The reference to s. 4 of the Code does not assist in determining whether Amec is a federal undertaking. Section 4 applies only if Amec is determined to be a federal work or undertaking, after applying the constitutional jurisprudence. In order to characterize Amec’s work or undertaking as federal in nature, one must look at the essential nature of its operations, considering the “normal or habitual activities of the business as those of ‘a going concern’, … without regard for exceptional or casual factors” (Construction Montcalm Inc. v. The Minimum Wage Commission, 1978 18 (SCC), [1979] 1 S.C.R. 754 at p. 769; citation omitted).

[31] At issue in Construction Montcalm was the application of provincial employment legislation to a company performing construction work at Mirabel Airport. The company argued that the construction of a runway was an integral part of the federal government’s competence over aeronautics. The majority of the Supreme Court of Canada rejected the argument, concluding that the one contract did not determine the nature of the construction undertaking for constitutional purposes.

[32] A similar conclusion was reached by the Ontario Court of Appeal in R. v. EllisDon Corporation Ltd., 2008 ONCA 789, a case involving the application of provincial health and safety legislation to a construction project at Pearson Airport. The construction activities were extensive and ongoing for many years and required close coordination between the company and the airport operations. Nevertheless, the company was held to be subject to provincial labour legislation – there, health and safety legislation.

[33] In my view, this case is similar to Construction Montcalm and EllisDon. Amec is a large construction and consulting business, carrying out operations throughout Ontario and in other jurisdictions around the world. The work it was performing at Port Granby was a one-time contract for construction and demolition work. According to the evidence before the Board, Amec was using ordinary construction and demolition techniques used on other sites, including ones with hazardous waste.

[34] Significantly, Amec acts in accordance with the specifications in the contract that were established by the licensee, CNL. It has no corporate relationship with CNL. Rather, it deals with CNL in a contractual relationship, and there is no evidence that it will be engaged with the remediation of nuclear waste at the site once the contract ends. Thus it is not integrated with CNL’s operation in such a way that it can be characterized as the federal work or undertaking engaged in the possession and storage of nuclear waste.

[35] Moreover, the present case is not like Westcoast Energy Inc. v. Canada (National Energy Board), 1998 813 (SCC), [1998] 1 S.C.R. 322, where the Supreme Court had to determine whether the gathering and processing of natural gas were an integral part of an interprovincial pipeline and so subject to federal jurisdiction. The majority held that the gathering and processing were functionally integrated and subject to common management, control and direction, and so subject to federal jurisdiction (at paras. 49 and 69). In contrast here, as I have said, Amec’s operations are not functionally integrated with those of CNL, nor is there common management and control of Amec’s and CNL’s operation.

[36] In sum, I agree with the Board’s conclusion at para. 126 of its reasons:

In the end I find that this is the fairer and more accurate characterization of the role of Amec and what it is doing at Port Granby. Amec itself, the undertaking we are examining here, is not part of the nuclear industry subject to federal regulation and not part of the declaration in section 71 of the NSCA. It is a large construction company building a project (to the extent that the words project or facility themselves do not inherently overstate essentially excavating buried contaminated soil, transporting it to a newly built cell, burying and leaving it there, and returning the landscape to either what it looked like before or to make it fit into the surrounding environment), which when completed it will turn over to its owners (the federal government) and depart.

[37] Accordingly, Amec is not subject to direct federal jurisdiction as a federal work or undertaking.

Amec is not a Vital, Essential or Integral Part of the Federal Undertaking

[38] In the alternative, Amec relies on derivative jurisdiction, arguing that it is a vital or integral part of the federal undertaking and therefore, its labour relations with workers at Port Granby come within federal constitutional jurisdiction.

[39] A company may be subject to federal jurisdiction over labour relations on the basis of derivative jurisdiction, provided that the work it is performing is vital, essential or integral to a federal undertaking’s operations. Again, this requires a factual inquiry into the nature of the work of Amec, and the degree to which its operations are integrated with those of the federal undertaking (Tessier, above at paras. 46, 48 and 49). This is largely a fact-driven inquiry, and there is some overlap with the analysis of direct jurisdiction above. At para. 55 of Tessier, the Supreme Court stated,

In short, if there is an indivisible, integrated operation, it should not be artificially divided for purposes of constitutional classification. Only if its dominant character is integral to a federal undertaking will a local work or undertaking be federally regulated; otherwise, jurisdiction remains with the province.

[40] In an earlier case, Northern Telecom v. Communications Workers, 1979 3 (SCC), [1980] 1 S.C.R. 115, the Supreme Court of Canada had set out factors to be considered in determining whether an enterprise formed an integral part of a federal undertaking (at p. 135). These factors have been described, in more generic words, by the Federal Court of Appeal in Syndicat des agents de sécurité Garda, Section CPI-CSN v. Garda Canada Security Corp., 2011 FCA 302 at para. 36:

a. the general nature of the service provider’s operation as a going concern and, in particular, the role of the services within that operation;

b. the nature of the corporate relationship between the service provider and the other companies that it serves, notably the federal undertaking at issue;

c. the importance of the work done for the federal undertaking at issue as compared with other customers of the service provider; and

d. the physical and operational connection between the services provided and the federal undertaking at issue and, in particular, the extent of these services in the operation of the federal undertaking as a whole.

[41] In both Construction Montcalm and EllisDon, above, the Courts held that construction activity at an airport was not vital, essential or integral to the operation of the airport and the construction companies remained subject to provincial employment laws. The Supreme Court in Construction Montcalm drew a distinction between the application of provincial laws respecting the location or building specifications for an airport, which are within exclusive federal jurisdiction, and the manner of carrying out construction work. It held that the federal interest in aeronautics did not extend to the labour relations of those carrying out construction work. In EllisDon, the Ontario Court of Appeal reached the same conclusion. While noting that the lengthy construction project required close coordination with the airport authority, that was not the same as integration in the airport operations (at para. 45).

[42] In Construction Montcalm, the majority focused on the nature of the construction company’s work, stating at p. 776:

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.

[43] Amec is similar to the companies that have been found to be local works in the construction cases above. As a going concern, it is a construction and consulting company with many customers in many sectors and many locations. The evidence shows that the work of Amec E&I is not restricted to environmental and soil remediation in the nuclear energy sector. More importantly, Amec, not Amec E&I, is the employer for purposes of the certification applications, and its work is not concentrated in remediation in the nuclear energy sector.

[44] Looked at from the perspective of Amec’s operations, the contract at Port Granby is one of many contracts that Amec has for construction. There is no contemplation that Amec will have an ongoing role in the operation of the facility once it completes this contract.

[45] Turning to the relationship of Amec and CNL, the licensee for the project, one finds no corporate relationship. The parties are in a contractual relationship whereby Amec provides construction and demolition work on the project. It is one of a number of contractors, as it holds only one of the contracts for Phase 2.

[46] Amec is not functionally integrated with CNL’s operations at Port Granby, as were the installers in Northern Telecom v. Telecommunication Workers, 1983 25 (SCC), [1983] 1 S.C.R. 733 (Northern Telecom No. 2). There, a discrete unit of Telecom installers devoted the majority of their time to installing equipment for Bell, a federal communications undertaking. In contrast, Amec has a temporary contract for construction and demolition. It is not engaged on a long-term basis in the Port Granby Project – in particular, it has no contemplated role, at the moment, in the operation of the facility once it is complete.

[47] Amec argues that its employees were hired for the Port Granby project and are a distinct unit. However, the evidence does not indicate that the employees are employed in a separate division. The fact that the employees may have been hired locally does not change the fact that Amec does not have a discrete, ongoing operation at Port Granby.

[48] More importantly, the Amec employees’ work, while important to the completion of the demolition and construction phase of the Port Granby waste management project, is not a part of the continuing operation of the waste management facility. I note that the Supreme Court of Canada stated in Tessier that “[t]o be relevant at all, a federal undertaking’s dependency on a related operation must be ongoing” (at para. 61).

[49] Amec argues that its labour relations should be subject to federal jurisdiction in order to ensure safe handling of the nuclear waste. It emphasizes the detailed provisions of the NSCA governing the safety of nuclear energy workers, and the importance of s. 49, which deals with strikes and lockouts. Section 49 states:

Notwithstanding the occurrence of a legal strike or lockout, every person commits an offence who

(a) while in charge of a nuclear facility, fails to ensure that there is present in that facility at all times the staff required, under the licence for that facility, to maintain that facility in a safe condition; or

(b) does not report for duty at a nuclear facility or who, while on duty at a nuclear facility, withdraws their services, except where the person is not required to report or is relieved in accordance with a procedure set out in the licence for that facility.

[50] I do not accept this argument. Amec and its employees, while working on the Port Granby site, are subject to the provisions of the NSCA that apply to their activities. Amec is also subject to detailed provisions in its contract with CNL. In my view, the federal interest in the regulation of nuclear substances is met by regulating the licensee, CNL, as well as the application of the appropriate provisions of the Act and regulations to Amec.

[51] However, Amec has not demonstrated that the application of provincial labour relations legislation would “impair the protected core of federal jurisdiction” in relation to the control of nuclear substances (EllisDon at para. 21). These provisions largely deal with the safe handling and monitoring of nuclear substances. They do not address worker health and safety standards more broadly, nor do they deal with employment conditions and labour relations.

[52] That brings me to s. 49. It is not clear that s. 49 is meant to apply to a related undertaking doing construction work for the federal undertaking. The wording suggests that it is meant to apply to the licensee and its employees operating a nuclear facility in the event of a strike or lockout.

[53] In any event, s. 49, as worded, does not refer to strikes or lockouts under federal labour relations legislation – that is, it does not suggest that a “strike” in s. 49 is limited to a strike under the federal regime. As worded, the provision could apply to strikes and lockouts at a local undertaking. However, in my view, s. 49 does not lead to the conclusion that it is vital or essential that all labour relations of Amec need to be subject to federal jurisdiction.

[54] The following passage from the Board’s decision, in my view, accurately describes the significance of these NSCA provisions (at para. 152):

Moreover, the suggestion of Amec that the NSCA provided any “complete code” to labour relations is, at a minimum, greatly overstated. First, there are always federal statutes that apply to provincially regulated construction sites and their labour relations (if only the Income Tax Act, Employment Insurance Act, Canada Pension Plan Act, the Criminal Code, terrorism laws etc.). Second, Amec’s core business is not regulated by the NSCA or the CNSC – CNL’s is. It is CNL that requires the license, not Amec. All Amec does is build in accordance with its contract with CNL – which as a matter of contract may incorporate some of the conditions of CNL’s license. In terms of employment relationships, all the NSCA does is regulate levels of radiation exposure (and specifically nuclear – it is an offence in section 45(h) of the NSCA to terminate an employee who has received an excessive dosage of radiation) and specifically makes it an offence in section 49 to leave a nuclear facility inadequately staffed (or its employees fail to report to work) in the event of a lawful lockout or strike (which obviously contemplates strikes or lockouts that can be lawful and whose lawfulness is regulated elsewhere than in the NSCA) and the Unions specifically noted that the NSCA does not stipulate (either explicitly or implicitly) that such lawfulness is determined by the Canada Labour Code obviously implying that such lawfulness could be determined under provincial legislation. At most, if anything at all, these NSCA provisions touch upon conditions of employment in an ancillary manner (like workers engaged in the construction of airports referred to in Montcalm). If anything, it could be said that these sections of the NSCA imposed obligations on CNL or any license holder, as much, if not more, than on Amec or any construction contractor hired by CNL or the license holder.

[55] Finally, on this point, I do not agree with the dissenting opinion that the determination of the issue of derivative jurisdiction turns on a conclusion about Parliament’s intent with respect to the regulation of labour relations. As set out above, I do not believe that Parliament has expressed an intent to regulate labour relations in general, but rather is concerned with safety regulation. But more importantly, the determination of federal jurisdiction under the derivative jurisdiction doctrine does not turn on the terms of particular federal legislation, but rather the relationship between the operations of the federal undertaking and the entity providing services to it – that is, the relationship of Amec with the federal undertaking.

[56] This brings me to Ramkey Communications Inc. v. Labourers’ International Union of North America, Provincial District Council, 2018 ONSC 4791 (Div. Ct.). In this case, the Divisional Court overturned a certification decision of the Board, which had certified the union to represent employees installing, maintaining and repairing telecommunications networks. Leave to appeal the decision has been granted by the Ontario Court of Appeal, and the appeal was scheduled to be heard in September, 2019.

[57] Ramkey turned on the issue of derivative jurisdiction, as the parties agreed that Ramkey was not itself a telecommunications company. The Court drew a distinction between construction work in a case like Construction Montcalm and the work of the installers, which was held to be integral to the provision of telecommunications and operational in nature, given that the work involved maintenance and enhancement of the network on an ongoing basis. As well, 99% of the company’s work was performed for telecommunications networks such as Rogers (at paras. 53 and 58).

[58] Ramkey is clearly distinguishable on its facts from the present case. We are dealing here with a one-time construction and demolition operation for a federal undertaking. Amec performs similar services for many customers, and it is not closely integrated with CNL and its operations at Port Granby.

[59] Finally, Amec also relies on the Federal Court of Appeal decision in Garda. Garda operated a detention centre for foreign nationals, detained under federal immigration legislation, pursuant to a contract with the Government of Canada. The Court determined that Garda’s services “are essential to the effective detention of foreign nationals held under a federal statute”, and carried out its duties in accordance with federal legislation, policy and directives (at para. 71).

[60] There is a key difference between Garda and the present case. Amec is performing a construction contract that will come to an end. It has no ongoing role in the operations of the nuclear waste management facility. Garda, in contrast, was operating a detention centre for the immigration services on an ongoing basis, a centre that was an important part of the federal regulation of immigration.

[61] On the facts of the present case, the Board correctly concluded that Amec is not performing an essential or vital role in the operations of the federal undertaking, nor is its activity integral to the operation of the nuclear waste management facility. It is engaged in one construction and demolition contract. Considering its activities on an ongoing basis, as one is required to do by the jurisprudence, Amec is not an essential part of the nuclear waste management operations of the federally regulated undertaking, CNL. Therefore, this is not a case where the doctrine of derivative jurisdiction applies.

Conclusion

[62] Accordingly, the application for judicial review is dismissed.

[63] Costs to each of the respondent Unions are fixed at $5,000, as agreed by the parties. The Board does not seek costs.

Swinton J.

I agree _______________________________

Backhouse J.

Wilton-Siegel J. (Dissenting)

[1] I have reviewed the decision of my colleagues and adopt the factual background and the statement of the standard of review set out therein. I agree that Amec is not itself a federal work or undertaking for the reason that it does not exercise control and direction over the Port Granby Project jointly with CNL. However, I am of the opinion that Amec is subject to federal jurisdiction by way of derivative jurisdiction. The Board excluded derivative jurisdiction on two principal grounds – that Amec’s involvement was in respect of construction only and that Amec’s work in respect of the Port Granby Project was one of many construction projects performed by it in Ontario. I will set out the reasons for my conclusion by first addressing the applicable principles in Montcalm and Ontario Hydro, which engage the first of the Board’s reasons, and then addressing the application of the test for derivative jurisdiction to the facts in this case, which will consider, among other issues, the second of the Board’s reasons.

The Board’s Reliance on Montcalm

[2] The Board concluded that Amec’s activities under Contract C were no different than any other construction contract and therefore its labour relations were a matter of provincial jurisdiction. In reaching this decision, the Board relied heavily on an analogy with the factual circumstances in Montcalm. Under this analogy, the new waste management facility is the counterpart of the new Mirabel airport being constructed and Amec is the counterpart of Construction Montcalm Inc., the company constructing the runways. In my view, this analogy is inappropriate in the present circumstances. I am of the opinion that the regulatory scheme enacted under the NSCA in the present case brings into play the principles articulated in Ontario Hydro for the reasons set out below.

[3] The starting point for the analysis is the statement of Beetz J. in Montcalm at p. 771:

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. … 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 a 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: [citations omitted]. …

[4] On the basis of the foregoing principle, the case law reflects a division between the “construction” of a federal undertaking and the “maintenance” or “operations” of the undertaking. Labour relations in respect of the former are subject to provincial jurisdiction while labour relations in respect of the latter may engage federal jurisdiction.

[5] The Board found that the activities of Amec constituted “construction” with the result that labour relations were subject to provincial jurisdiction. This approach, however, ignores or minimizes the significance of the fact that Amec’s “construction” activities require the “possession of nuclear substances” for which the federal government has established a specific regulatory regime under the NSCA directed toward the health and safety of affected employees, the general public and the environment.

[6] Indeed, this concern for the health and safety of affected employees, the public and the environment is at the heart of the NSCA. As discussed below, it is found, among other places, in the preamble to the NSCA, the provisions of that statute and the broad regulation-making powers of the Commission under the NSCA.

[7] In the present case, therefore, the mode or manner of Amec’s performance of Contract C directly engages a matter of primary federal competence, being federal jurisdiction over the “possession of nuclear substances” under the NSCA with a view to ensuring the health and safety of employees engaged in such activities and of the public at large. Moreover, the “possession of nuclear substances” is not merely incidental to Amec’s “construction” activity – it is fundamental to its obligations under Contract C. In contrast, in Montcalm, the federal government had not established a comparable regulatory regime with respect to the construction of the runways pursuant to its jurisdiction in respect of aeronautics. Accordingly, regulation of the mode or manner of construction of the airport did not engage a matter of primary federal competence. Put another way, Montcalm assumes that the federal government has not addressed the mode or manner of “construction” activity in a manner which engages a matter of federal interest.

[8] A closer analogy to the present case than Montcalm is Securiguard Services Limited, 2005 CIRB 342. In that case, the Canada Industrial Relations Board found that employees of a security company providing perimeter security to the Vancouver airport authority were subject to federal jurisdiction notwithstanding that all other employees of the company were subject to provincial labour relations jurisdiction. A significant, if not determinative, consideration in that case was the fact that the employees were enforcing, on behalf of the airport, security measures developed in compliance with schedules under the Aeronautics Act. Accordingly, unlike Montcalm, in Securiguard, the federal government regulated the mode or manner of carrying out Securiguard’s contract with the airport authority pursuant to the exercise of its jurisdiction over aeronautics.

[9] The significance of federal regulation of the mode or manner of carrying out a contract involving a federal undertaking is that the principles articulated by the Supreme Court in Ontario Hydro will apply. In that decision, the issue for the court was whether the federal interest in the “control and supervision of the …application and use of atomic energy” directly implicates the regulation of labour relations of employees of Ontario Hydro who are employed on or in connection with nuclear facilities that were subject to s.18 of the Atomic Energy Control Act, R.S.C. 1985, c. A-16 (the “AECA”). The majority held that it did to the extent that the employees were engaged in the production of nuclear energy. Section 18 declared works and undertakings constructed, among other things, for the “production, use and application of atomic energy” to be works for the general advantage of Canada.

[10] In Ontario Hydro, Lamer J. found the primary indication of Parliament’s interest in the production of atomic energy in s. 18 of the AECA. He suggested that the scope of that interest was indicated by the preamble to that statute which addressed matters pertaining to health, safety and security arising in connection with the production of atomic energy. In addition, he considered that the broad regulation-making power regarding matters of health, safety and security given to the Atomic Energy Control Board (the predecessor to the Commission under the NSCA) further made clear the federal government’s interest in labour relations affecting nuclear energy.

[11] Lamer J. went on to address how the “stringent and detailed obligations” of licensees under the AECA might be reflected in collective agreements between management and employees of nuclear facilities where monitoring, notification and protection are concerned:

I think that it can be foreseen how these stringent and detailed obligations of licensees such as Ontario Hydro might be reflected in collective agreements between the management and employees of nuclear facilities, especially where dosage monitoring, notification, and protection are concerned. The various restrictions on who may be employed at the facility might be incorporated into the collective agreement. The Atomic Energy Control Board's training and experience requirements might influence the negotiation and drafting of promotion and seniority clauses. An employee's failure to use the required safety equipment, or to observe required safety procedures, could be the subject of discipline governed by the collective agreement. The labour relations board might have to distinguish between a legitimate plant shut-down and an illegal lock-out during a labour dispute. The requirement that the collective agreement conform to the regulatory requirements of the statute, regulations and licence might be relevant to proceedings to determine whether the parties were bargaining in good faith. Other examples of the mutual concerns in the regulations and most collective agreements are not difficult to anticipate.

[12] Lamer J. observed that the foregoing demonstrated that “the matters of concern to management and labour in drafting and negotiating a collective agreement are reflected in the regulations [under the AECA], and that the interests in both cases are quite similar.” He concluded that, “as is the case with the AECA, Parliament's regulation of nuclear facilities, under the concerns of health, safety and security, includes a strong employment and labour relations component.”

[13] I pause to observe that this observation is critical to the result both in Ontario Hydro and in the present circumstances. In my view, the principle in Ontario Hydro is that the existence of a federal scheme for the regulation of health and safety matters pertaining to employees, in the present case to “nuclear energy workers” under the NSCA, necessarily implies, and requires, federal jurisdiction over the labour relations of the workers involved. I do not think it is possible to conclude after Ontario Hydro that, as a legal matter, Parliament’s intention can be limited to health and safety regulation and not also extend to labour relations regulation. Nor do I think it is practical to attempt to draw this distinction, at least on the record in this case. I also do not think that the fact that the federal regulatory regime does not address worker health and safety standards more broadly but is largely limited to the safe handling and monitoring of “nuclear substances”, as the majority points out, detracts from the necessary implication of a federal intention to regulate labour relations that results from such federal regime.

[14] Since Ontario Hydro, the AECA has been replaced by the NSCA which broadened the scope of federal regulation to extend to the “possession of nuclear substances.” I see no difference for present purposes between the “application and use of atomic energy” under the AECA and the “possession of nuclear substances” under the NSCA, in this case being the radiation waste in the course of its excavation, transportation and deposition in the new cell. The provisions of the NSCA which are comparable to the provisions of the AECA upon which the decision in Ontario Hydro is based support a similar conclusion in respect of the “possession of nuclear substances” by CNL or its subcontractors, including Amec.

[15] The extension of the federal interest to the regulation of activities regarding the “possession of nuclear substances” is made clear, among other places, in the preamble to the NSCA which provides as follows:

WHEREAS it is essential in the national and international interests to regulate the development, production and use of nuclear energy and the production, possession and use of nuclear substances …; [emphasis added]

[16] In addition, as mentioned, section 71 of the NSCA is broader than s. 18 of the AECA. It provides that:

[A]ny work or undertaking constructed for…the possession … of a nuclear substance…is declared to be a work or undertaking for the general advantage of Canada.”

[17] The scope of the intended federal jurisdiction regarding the “possession of nuclear substances” is expressed in s. 3(a) of the NSCA. That provision specifically provides that one of the purposes of the statute is the limitation of the risks to the health and safety of persons and the environment that are associated with the “possession…of nuclear substances”. In addition, the objects of the Commission include, in section 9(a)(i), the regulation of the possession of nuclear substances to prevent unreasonable risk to the environment and to the health and safety of persons associated with such possession. Sections 21(1)(j) and 37(2)(h) of the NSCA deal with the authorization of the return to work of persons whose dose of radiation has or may have exceeded the prescribed radiation dose limits. Further, s. 44(1) of the NSCA grants the Commission the power to make regulations regarding, among other things, the protection of “nuclear energy workers” (which includes Amec’s employees) as well as regulations respecting the protection of the environment and the health and safety of persons associated with the possession, management, transport, storage and disposal of nuclear substances, whether or not “nuclear energy workers”.

[18] Collectively, these provisions evidence Parliament’s intention that the health and safety regime established by and under the NSCA is intended to apply to the “possession of nuclear substances”. In such circumstances, as mentioned, I think Ontario Hydro necessarily also implies a Parliamentary intention to regulate the labour relations of workers engaged in such activities.

[19] In this regard, I note that neither the Board nor the Unions suggested that federal jurisdiction regarding health, safety and security matters arising from the “possession of nuclear substances” could co-exist with provincial jurisdiction over Amec’s labour relations. This is consistent with the position of the Unions that the regulatory regime established under the NSCA does not apply to Amec, apart from s. 49 thereof and two other inconsequential provisions. Nor, as mentioned, do I think that such a jurisdictional result is feasible given the extent and nature of the requirements imposed by the regulatory regime established under the NSCA. As a related matter, I also do not think that it is possible to conclude on the record that the provisions of the federal regulatory regime touch, at most, upon conditions of employment in an “ancillary manner” as the Board concluded in paragraph 152 of the Board decision, which has been cited above.

[20] To summarize the foregoing, therefore, the federal government has jurisdiction over matters pertaining to nuclear energy, including the “possession of nuclear substances” resulting from such production. In the exercise of that jurisdiction, the federal government has established a regulatory regime that addresses, among other things, health and safety risks to the public and to employees involved in the “possession of nuclear substances”. This regulatory regime directly impacts the mode or manner in which contracts between third parties and a federal undertaking that involve the “possession of nuclear substances” are performed. The provisions of the regulatory regime established by the NSCA and the regulations thereunder engage matters that could be the subject of any collective agreement between any such third parties and their employees. While I have sympathy for the position of the Unions that labour relations pertaining to the construction sector are presumptively a matter of provincial jurisdiction, in this case, on the basis of the foregoing, I conclude that Ontario Hydro compels the result that labour relations pertaining to activities that involve the “possession of a nuclear substance” are subject to federal jurisdiction.

[21] Based on the foregoing analysis, Amec’s labour relations would be a matter of federal jurisdiction if its activities involve the “possession … of nuclear substances.”

[22] The Board was alert to this issue. In addition, at the hearing, the Unions raised a number of issues that were directed to finding that the federal regime regarding health, safety and security did not apply to Amec’s activities because it was not in “possession” of “nuclear substances” in any meaningful manner. I propose to address these issues at this stage as they also inform the appropriate characterization of Amec’s activities pursuant to Contract C, which is necessary for application of the test for derivative jurisdiction.

[23] In summary, I am of the opinion that Amec’s actions in respect of the excavation, transportation and deposition of the radioactive waste contemplated by Contract C constitute the “possession of nuclear substances”. In this regard, the following considerations are relevant.

[24] First, the Board concluded that Amec did not have “possession” of the radioactive waste under Contract C for the purposes of s. 71 of the NSCA on a number of grounds. The Board reasoned that Amec did not have “operational possession” as CNL was the license holder and therefore the party that had true control over the radioactive waste. The Board also concluded that the physical act of holding contaminated soil in the excavator buckets operated by Amec employees was not the type of “possession” intended by s. 71 of the NSCA. The Board then concluded that the action of transportation of radioactive waste on behalf of another party without a necessary or explicit transfer of possession, which the Board considered would require Commission approval, was not sufficient to displace the presumption of provincial jurisdiction over labour relations.

[25] In reaching this conclusion, I think the Board erred in failing to interpret “possession” in the context of the federal interest in the health and safety of affected employees and the general public. In this context, the fact that the radioactive waste was and remained the property of AECL and the Government of Canada is irrelevant. More significantly, the fact that CNL, as the licence holder, has legal control over the radioactive waste is not determinative. CNL is conducting the Port Granby Project almost exclusively through third-party contractual arrangements. In respect of Phase 2 of the Project (setting aside the water treatment facility), CNL can only exercise that control by delegating authority and control to Amec pursuant to Contract C. In other words, in implementing Contract C, Amec is “possessing” the radioactive waste in the exercise of CNL’s authority and on CNL’s behalf. Most importantly, the activities of excavation, transportation and deposition of radioactive waste in the context of an acknowledged federal undertaking are surely the very types of activities which the health and safety regime established by the NSCA is intended to address. These circumstances are qualitatively different from the simple ownership of a residential property having contaminated soil in a lawn or garden to which the Board referred as beyond the intended concept of “possession” under the NSCA.

[26] Second, to the extent Amec does possess radioactive substances, the Unions argue that the essence of its work involves moving contaminated earth which is typical construction/demolition activity. They say that the essential elements of the work are typical elements used in bulk excavation and construction of contaminated cells for contaminated materials of all kinds. While this may be correct, in my view, it misses the essential point. Traditional construction/demolition activity does not involve the “possession of nuclear substances” which requires a specialized health and safety regime to ensure worker safety, even in the case of low-level radiation waste. This regime differs from provincial legislation dealing with other contaminates in soil in this important respect.

[27] Third, I do not think that the fact that the radioactive waste at issue is characterized as “low-level” is of any significance. It is not disputed that it is sufficiently radioactive to meet the threshold of a “nuclear substance” under the NSCA. The Court must respect the legislated standard. In any event, the record before the Court does not permit a finding that the radioactive waste can be treated as contaminated soil that is adequately addressed for health and safety purposes by provincial legislation. Radioactive substances are qualitatively different from other contaminated substances. They require extensive regulation in the interest of the safety of the individuals who handle them and the public more generally. In short, the federal regulatory regime in this area addresses unique hazards of radioactive materials that cannot be dismissed for present purposes as no different than any other contaminant or as involving traditional construction/demolition activity as, in effect, did the Board.

[28] Lastly, I see no basis for concluding that the federal interest in addressing the health and safety of affected workers and the public in respect of the “possession of nuclear substances” arises, in respect of the Port Granby Project, only upon commencement of Phase 3 of the Project. This issue raises a further conceptual issue regarding the Port Granby Project.

[29] CNL’s physical possession of a “nuclear substance”, being the low level radiation waste, occurs no later than the commencement of the implementation of its contract with Amec, that is, during Phase 2. Accordingly, I see no basis for concluding that the federal interest does not also commence with Phase 2 of the Project rather than Phase 3. For this reason, as discussed further below, I also do not think that it is correct to consider that on-going “operations” of the Port Granby Project do not commence until Phase 3 of the Project, as the Board did in this case. While the Board’s approach allows for an analogy to the circumstances in Montcalm, it does so at the cost of disregarding the real on-going monitoring activities of Amec in compliance with the federal regulatory regime during Phase 2. I will return to these conclusions below.

The Test for Derivative Jurisdiction

[30] With this background, I turn to the issue of derivative jurisdiction. The issue for the Court is whether Amec’s contractual involvement in the Port Granby Project is “vital”, “essential” or “integral” to the Project.

[31] The approach to be adopted was confirmed by Dickson J. in Northern Telecom Ltd v Communications Workers of Canada, 1979 3 (SCC), [1980] 1 SCR 115 at p. 132:

A recent decision of the British Columbia Labour Relations Board, Arrow Transfer Co. Ltd. [[(1974] 1 Can. L.R.B.R. 29], provides a useful statement of the method adopted by the courts in determining constitutional jurisdiction in labour matters. First, one must begin with the operation which is at the core of the federal undertaking. Then the courts look at the particular subsidiary operation engaged in by the employees in question. The court must then arrive at a judgment as to the relationship of that operation to the core federal undertaking, the necessary relationship being variously characterized as "vital""essential" or "integral". As the Chairman of the Board phrased it, at pp. 34-5:

In each case the judgment is a functional, practical one about the factual character of the ongoing undertaking and does not turn on technical, legal niceties of the corporate structure or the employment relationship.

[32] In this case, the operation that is at the core of the federal undertaking is the Port Granby Project. Essentially, the Project involves the on-going monitoring and maintenance of low-level radioactive waste currently stored in a site near Lake Ontario which will be excavated, and transported to, and deposited into, a new waste management facility. In connection with these activities, the Project also requires the construction of the new waste management facility, described as “an engineered above ground cell”, and ancillary works.

[33] The factors to be considered in determining whether an enterprise forms an integral part of a federal undertaking set out by Dickson J. in Northern Telecom at p. 132, and rephrased more recently by the Federal Court of Appeal in Garda Canada at para. 36, have been set out above. I will address each in turn.

[34] Amec’s business and operations in Ontario have been generally described above. In respect of this proceeding, Amec’s employees will be engaged pursuant to Contract C in the excavation at the existing site of the low-level radiation waste, comprising approximately 450,000 cubic metres, the transportation of the waste to the new site, the deposition of such waste in the new cell, and remediation of the existing site.

[35] The equivalent to the “subsidiary operation” in Northern Telecom are the activities of Amec provided by way of a third-party contractor relationship. The licensee, CNL, is conducting the Port Granby Project almost exclusively using third-party contractors. The fact that Amec is a third-party contractor with CNL, or that Amec could be replaced by another qualified contractor, therefore cannot exclude a finding that its relationship to the Port Granby Project is “vital”, “essential” or “integral”. It is more important for this purpose that Amec is the entity that is carrying out the implementation of Phase 2 of the Port Granby Project (other than construction of the water treatment plant) and that, if it were to cease operations, Phase 2 of the Project would stop.

[36] The importance of the work performed by Amec for the undertaking compared to other service providers to CNL depends upon the characterization of that work. The Board chose to minimize the importance by characterizing it as primarily “construction” activities that are related to the construction of the new cell. By implication, the work performed by Amec is less important than the work to be performed by the contractor to be selected to perform Phase 3 of the Port Granby Project. In my view, however, this characterization misses several important aspects of Amec’s work in the context of federal regulation.

[37] I accept that the mere construction of the new cell does not constitute, on its own, a sufficient relationship to the Port Granby Project to render Amec’s activities “vital”, “essential” or “integral” to the Project under the principle in Montcalm. However, as discussed above, the essence of the Port Granby Project is the possession and control of the low-level radiation waste with a view to ensuring the safety of the public. As mentioned, CNL’s possession and control over these “nuclear substances” is not deferred until completion of the deposition in the new cell. It took possession with the grant of the licences to take over the existing site. Similarly, pursuant to Contract C, Amec took possession of the historic radiation waste upon taking control of the current site or, at the latest, upon the commencement of the excavation and transportation of that waste from the current site. Indeed, if the new waste management cell is a federal work or undertaking for the general advantage of Canada pursuant to s. 71 of the NSCA, it would appear that the current waste management site is also such a federal work. Moreover, the record does not disclose any significant difference between Amec’s monitoring activities during Phase 2 and the monitoring activities under the Phase 3 contract.

[38] For these reasons, in my opinion, the stark dividing line between “construction” and on-going “operations” applied by the Board in order to analogize the situation to Montcalm is inappropriate. CNL’s, and Amec’s, monitoring operations began, at the latest, upon commencement of the excavation and transportation of the historic radiation waste from its current site to the new cell. For the same reasons, I think that Amec’s activities are far more important to CNL’s performance of its obligations under its licences for the Port Granby Project than either the environmental assessments in Phase 1, which were a pre-condition to the Project itself, or the construction of the water treatment facility in Phase 2, which do appear to fall more squarely within the concept of “construction” and are a useful contrast with Amec’s activities.

[39] The foregoing analysis is also important for consideration of the physical and operational connection between the services provided by Amec and the Port Granby Project. While I agree with the majority that Amec is not itself a federal work or undertaking, that finding does not exclude a finding that its activities are central to the Port Granby Project for the reasons discussed above. The reality is that Amec is the entity that has been physically implementing the Port Granby Project, as contemplated by CNL’s licenses, since 2016.

[40] In the consideration of derivative jurisdiction, it is also important to note that Montcalm requires that two interrelated questions be addressed. Functional integration is significant only if it engages a matter of federal interest. This is most clearly demonstrated in the following dicta of Sharpe J.A. in R v. EllisDon Corporation Ltd., 2008 ONCA 789 at para. 24:

The central issues dividing the parties to this appeal can be distilled from [the principles articulated by Dickson J. in Northern Telecom v. Communications Workers, 1979 3 (SCC), [1980] 1 S.C.R. 115 at p. 132]. Is the relationship between the appellants’ activities and the GTAA “vital”, “essential” or “integral” to the operation of the GTAA? Is federal regulation of the working conditions of EllisDon and Blenkorn integral to federal competence over aeronautics? [emphasis added]

[41] I have addressed the functional integration of Amec’s activities in respect of the Port Granby Project above. Focussing on the second question, for the reasons set out above, I am of the opinion that federal regulation of the working conditions of Amec is integral to federal competence over the Port Granby Project by virtue of the federal competence over “nuclear substances” under the NSCA and, in particular, over health and safety issues pertaining to the “possession of nuclear substances”. Amec’s services specifically engage a federal interest, being the health and safety of affected employees, the public and the environment in the handling of such substances. Among other things, this is reflected in the specific obligations imposed on Amec’s employees under the NSCA and regulations thereunder. Accordingly, I conclude that Amec’s services pertain to distinctly federal work, being work that involves, in a material manner, the “possession of nuclear substances”.

[42] On the basis of the foregoing, I consider that the operations of Amec under Contract C are “vital”, “essential” or “integral” to the Port Granby Project. It remains to address a few arguments raised by the parties that have not been considered in the foregoing analysis.

[43] First, the Unions argue that, because Amec and its employees are subject on a contractual basis to the applicable provisions of the NSCA, the federal interest in the regulation of “nuclear substances” is met by regulating the licensee, CNL. On this basis, they say there is no need to subject Amec’s “presumptively provincial construction workforce to federal labour relations legislation to ensure that these objectives are met”. I do not agree for two reasons.

[44] As I read the case law, the issue for the Court is not whether there is a need for federal jurisdiction but rather whether Parliament has expressed its intention to regulate labour relations in respect of the Port Granby Project, specifically in respect of those aspects of the Project involving the excavation, transportation and deposition of the historic low-level radiation waste. For the reasons set out above, I am of the opinion that Parliament has indicated its intention to do so.

[45] In addition, this argument ignores the application of the regulatory regime under the NSCA in respect of third-party contractors such as Amec. Parliament has chosen to regulate the “possession of nuclear substances” directly by the enactment of statutory obligations in the NSCA and indirectly by the grant of wide-ranging powers to the Commission including extensive authority regarding the enactment of regulations. The regulatory scheme under the NSCA applies both to licensees under the Act, being CNL in this case, and to “nuclear energy workers”, which it is understood includes Amec’s employees on the Port Granby Project. It also extends to every person “who performs work that is referred to in a licence” for the purposes of s. 17 of the General Nuclear Safety and Control Regulations SOR/2000-202, which provision sets out obligations of such workers. These obligations include, among other things, compliance with measures established by a licensee, in this case CNL, to protect the environment and the health and safety of persons, to maintain security, to control levels and doses of radiation, and to control releases of radioactive nuclear substances and hazardous substances into the environment. Parliament has therefore expressly subjected Amec’s employees to federal regulation under the NSCA and regulations thereunder.

[46] On the other hand, the statutory regulatory scheme does not apply, at least on an express basis, to Amec as a third-party contractor with CNL, except for the obligation inherent in s. 49(a) of the NSCA, which provides that it is an offence to fail to ensure the presence at all times of staff to maintain a nuclear facility in safe condition. Amec is otherwise only indirectly required to comply with the requirements under the NSCA by virtue of its contractual obligations to CNL under Contract C.

[47] Among other things, this regime leaves open issues such as the application of s. 49 of the NSCA as noted by my colleagues. In addition, if Amec is not subject to federal labour relations jurisdiction, there is a potential for conflict between the provisions of any collective agreement to which Amec is a party and either or both of Amec’s contractual obligations and the obligations of its employees under the NSCA, in addition to the question of the operation of s. 49. In the absence of federal jurisdiction over labour relations in these circumstances, there is therefore a risk that federal jurisdiction regarding the possession and handling of “nuclear substances” will be attenuated and thereby public safety will be compromised. This concern is an important consideration on its own, as well as in the context of the two remaining issues to be addressed below.

[48] Second, I accept that Tessier suggests that a federal undertaking’s dependency on a related operation must be on-going. However, Tessier did not address circumstances in which Parliament had specifically legislated requirements involving the health and safety of the public and of the employees involved. More significantly, because monitoring of the radioactive waste began with Phase 2 of the Port Granby Project as discussed above, if Phase 2 and Phase 3 were conducted by the same contractor, I do not think that the principle in Tessier would limit federal jurisdiction to the monitoring of the “nuclear substances” after they had been deposited in the new cell. That is, I do not think that Tessier would result in a line being drawn for jurisdictional purposes between Phase 2 and Phase 3. For this reason, I think it is artificial to distinguish between two periods in which there is a single regulatory regime addressing health and safety.

[49] Lastly, the Unions argue that Tessier requires that Amec’s employees engaged in the performance of Contract C must be, on an on-going basis, in a definable, functionally discrete unit exclusively devoted to federally related activity that is severable from the rest of Amec’s operations. They submit that this requirement is not satisfied because the Amec employees engaged in the Port Granby Project are not employed in a separate division, the Project represents a small proportion of Amec’s business, and Amec’s involvement in the Port Granby Project is time-limited. This was the second ground for the Board’s decision.

[50] There is no doubt that, if the sole issue were Amec’s on-going character, Amec would fail to satisfy the onus of rebutting provincial jurisdiction. As in Tessier, the amount of its work in the area of nuclear energy, or even of work within federal jurisdiction generally, is too small to demonstrate a basis for federal jurisdiction over its labour relations. In this respect, I agree with the majority decision. However, that is too narrow a focus for present purposes. In my view, the law is not as inflexible as the Unions suggest. The Board’s approach excluded the possibility that Amec’s labour relations in respect of the nuclear energy sector could be severed from its other business activities. I think such a determination is open to the Court in this case notwithstanding that the applicable case law provides that such a result requires exceptional circumstances.

[51] In the present case, Amec’s employees on the Port Granby Project were hired locally and required specific training under the regulatory regime established under the NSCA. Amec has also established a specific management team for the Project. There is no evidence that the Amec employees at issue move between Amec construction projects. The limited evidence suggests a probability that such employees are both functionally and geographically separate and are, effectively, a discrete unit exclusively devoted to the Port Granby Project for the time required to perform Contract C. Moreover, the Port Granby Project was the only job site listed in the respective applications of the Unions for certification and the Project was the only work performed by Amec on the dates of the applications.

[52] In addition, the decisions of the Federal Court in Garda and of the Canadian Industrial Relations Board in Securiguard evidence the fact that the essential issue is whether the services provided by Amec to the Port Granby Project differ in a material respect from the services offered to other “construction” clients. The existence of a separate contract for distinctive services is sufficient to separate such services from a company’s other operations, notwithstanding that the other employees of the company are governed by provincial labour relations jurisdiction.

[53] While this is admittedly a close call, I think that the services provided by Amec to the Port Granby Project are distinct from its other “construction” contracts and unique for the reason that they are subject to the very stringent regime of the NSCA and the regulations thereunder relating to the “possession of nuclear substances”. Amec’s performance of Contract C requires implementation of a specialized regime pertaining to health, safety and security that is specific to the unique circumstances of dealing with radioactive materials.

[54] Ultimately, I think that concern for the safety of the public, and of the employees involved, and respect for the federal regulatory regime in respect of these concerns, are more important considerations in the determination of whether derivative jurisdiction applies in this case than the absence of one or more of the criteria set out in the case law in respect of construction-related businesses. To be clear, however, in my view these considerations would imply a federal jurisdiction over Amec’s labour relations that is limited to the Amec employees engaged on the Port Granby Project.

Conclusion Regarding This Judicial Review Application

[55] Based on, and subject to, the foregoing, I would grant Amec’s judicial review application.

Wilton-Siegel J.

Released: October 1, 2019

CITATION: Amec Foster Wheeler Americas Limited v. Labourers’ International Union of North America, 2019 ONSC 5613

DIVISIONAL COURT FILE NO.: 537/18
DATE: 20191001

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

Swinton, Backhouse and Wilton-Siegel JJ.

BETWEEN:

AMEC FOSTER WHEELER AMERICAS LIMITED

Applicant

– and –

LABOURERS’ INTERNATIONAL UNION OF NORTH AMERICA, ONTARIO PROVINCIAL DISTRICT COUNCIL, INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 793 and ONTARIO LABOUR RELATIONS BOARD

Respondents

REASONS FOR JUDGMENT

Swinton J.

Wilton-Siegel J. (Dissenting)

Released: October 1, 2019