Commission de transport de la Communauté urbaine de Québec v. Canada (National Battlefields Commission), [1990] 2 S.C.R. 838

National Battlefields Commission Appellant

v.

Commission de transport de la

Communauté urbaine de Québec Respondent

and

Attorney General of Quebec Intervener

indexed as: commission de transport de la communauté urbaine de québec v. canada (national battlefields commission)

File No.: 20941.

1990: January 22; 1990: October 4.

Present: Chief Justice Lamer* and Wilson, L'Heureux‑Dubé, Sopinka, Gonthier, Cory and McLachlin JJ.

on appeal from the court of appeal for quebec

Constitutional law ‑‑ Applicability of provincial statute ‑‑ Transportation ‑‑ Sightseeing service offered by federal commission on park territory administered by it ‑‑ Carrier hired by commission not holding transport permit required by provincial transport legislation ‑‑ Whether provincial legislation applies to federal commission, to its sightseeing transportation service or to carrier ‑‑ Transport Act, R.S.Q., c. T‑12, ss. 3, 4, 4.1, 5, 5.1, 32, 36, 40, 43 ‑‑ Bus Transport Regulation, (1987) 119 G.O. II 24, ss. 1, 12, 17, 21, 30, 31 ‑‑ Government Property Traffic Act, R.S.C., 1985, c. G‑6 ‑‑ Government Property Traffic Regulations, C.R.C. 1978, c. 887, ss. 3, 5, 6 ‑‑ Act respecting the National Battlefields at Quebec, S.C. 1908, c. 57.

Appellant Commission provides the public with a guided bus transportation service free of charge in the Québec National Battlefields Park administered by it under its enabling Act. Over the years, with only one exception when the work was given to respondent Commission, appellant has always contracted with businesses which did not hold the transport permit required by the Quebec Transport Act, which the Commission des transports du Québec is partly responsible for administering, including the issuing of permits. Respondent filed a motion for a declaratory judgment in the Superior Court, asking the court to declare that appellant may only offer the public a transport service in the territory administered by it through a holder of a transport permit issued pursuant to the Quebec Transport Act. The Superior Court dismissed the motion but this judgment was reversed by the Court of Appeal. This appeal is to determine whether the Transport Act and the Regulations adopted thereunder are applicable, in whole or in part, to the sightseeing transportation service offered by appellant.

Held: The appeal should be allowed.

Appellant could not be required to obtain a permit under the Quebec Transport Act if it decided to provide the sightseeing transportation service itself. Under s. 36 of the Act, no one is required to obtain a permit in order to provide a service free of charge.

Works, undertakings, services, things or persons which fall under federal jurisdiction are still subject to provincial statutes that are general in their application, provided however that the application of these provincial laws does not bear upon those subjects in what makes them specifically of federal jurisdiction. It is the fundamental federal responsibility for a thing or person that determines its specifically federal aspects, those which form an integral part of the exclusive federal jurisdiction over that thing or person. In the case of a federal service, its specific nature is affected if the provincial statute touches on a vital or essential aspect of its establishment, management or operation. In the present case, the permit system established by the Quebec Transport Act and governed by the Bus Transport Regulation is constitutionally inapplicable to the sightseeing transport service provided by appellant. Establishing this transport service in the territory of the park administered by it is an integral part of the mandate conferred on appellant by its enabling Act. Since the validity of this Act is not in dispute, federal jurisdiction over this service must be taken as established. Analysis of the provincial legislative provisions regarding the obtaining of a permit demonstrates the massive and intrusive impact they undeniably have on the vital and essential aspects of the federal service. The consequence of applying these provisions to the transportation service offered by appellant would be to make the setting up, substance and maintenance of the federal transport service subject to the largely discretionary control of the Commission des transports du Québec and the provincial government, when these aspects are within exclusive federal jurisdiction. The permit system created by the provincial legislation, taken as a whole, therefore cannot be applied to appellant. However, the federal service is not necessarily exempt from the application of provincial legislation dealing with safety in the transport industry, which is secured in the Transport Act by a separate mechanism from the permit system. The provisions dealing with safety are generally such that they rarely affect the vital or essential aspects of a service or undertaking.

Parliament has not incorporated by reference the provincial provisions on obtaining a transport permit through the Government Property Traffic Act and the Government Property Traffic Regulations. Under the federal legislation, the operation of a vehicle is prohibited on federal land "otherwise than in accordance with the laws of the province". However, the federal legislation applies only to the driver of the vehicle. Under the provincial legislation, the transport permit is legally required of the carrier or owner to operate the service, not of the driver to drive or operate the vehicle. There is thus no direct connection between the duty to obtain a transport permit and the driver or vehicle to which the federal regulations refer.

The doctrine of federal paramountcy, according to which federal legislation can render provincial legislation that is inconsistent with it inoperative, is inapplicable in this case since it has not been shown that there is any conflict between the federal and provincial statutes.

The carrier providing the transport service offered by appellant benefits from the immunity from application enjoyed by the service. The concept of constitutional inapplicability relates here to the federal service, certain vital aspects of which would be affected by the application of the provincial provisions. The status of the person providing this service is not relevant for this purpose: the permit system is simply not applicable to the service. However, the carrier is not absolutely exempt from the permit system administered by the Commission des transports du Québec. It covers him with regard to activities he may carry on outside the limits of the service he provides appellant.

Cases Cited

Referred to: Construction Montcalm Inc. v. Minimum Wage Commission, 1978 CanLII 18 (SCC), [1979] 1 S.C.R. 754; Bisaillon v. Keable, 1983 CanLII 26 (SCC), [1983] 2 S.C.R. 60; Cardinal v. Attorney General of Alberta, 1973 CanLII 980 (SCC), [1974] S.C.R. 695; Toronto Electric Commissioners v. Snider, 1925 CanLII 331 (UK JCPC), [1925] A.C. 396; Reference re Minimum Wage Act of Saskatchewan, 1948 CanLII 36 (SCC), [1948] S.C.R. 248; Reference re Industrial Relations and Disputes Investigation Act, 1955 CanLII 1 (SCC), [1955] S.C.R. 529; Commission du salaire minimum v. Bell Telephone Co. of Canada, 1966 CanLII 1 (SCC), [1966] S.C.R. 767; Bell Canada v. Quebec (Commission de la santé et de la sécurité du travail), 1988 CanLII 81 (SCC), [1988] 1 S.C.R. 749; Clark v. Canadian National Railway Co., 1988 CanLII 18 (SCC), [1988] 2 S.C.R. 680; Dick v. The Queen, 1985 CanLII 80 (SCC), [1985] 2 S.C.R. 309; Four B Manufacturing Ltd. v. United Garment Workers of America, 1979 CanLII 11 (SCC), [1980] 1 S.C.R. 1031.

Statutes and Regulations Cited

Act respecting the Communauté urbaine de Québec, R.S.Q., c. C‑37.3.

Act respecting the National Battlefields at Quebec, S.C. 1908, c. 57, preamble, s. 7.

Act to amend the Act respecting the National Battlefields at Quebec, S.C. 1914, c. 46, s. 4.

Bus Transport Regulation, (1987) 119 G.O. II 24, ss. 1, 12, 17, 21, 30, 31.

Code of Civil Procedure, R.S.Q., c. C‑25, art. 453.

Constitution Act, 1867, s. 91(1A).

Government Property Traffic Act, R.S.C., 1985, c. G‑6 [formerly R.S.C. 1970, c. G‑10].

Government Property Traffic Regulations, C.R.C. 1978, c. 887, s. 3 [am. SOR/84‑238, s. 1; am. SOR/89-341, s. 2], 5 [am. SOR/88‑93, s. 2], 6 [rep. & sub. idem, s. 3].

Transport Act, R.S.Q., c. T‑12, ss. 3, 4 [repl. 1981, c. 26, s. 1; am. 1986, c. 67, s. 2; 1989, c. 20, s. 6], 4.1 [ad. 1985, c. 35, s. 60], 5 [am. 1981, c. 8, s. 2; c. 26, s. 2; 1983, c. 46, s. 109; 1985, c. 35, s. 61; 1986, c. 67, s. 3; c. 92, s. 1; 1987, c. 97, s. 100; 1988, c. 67, s. 3], 5.1 [ad. 1986, c. 92, s. 2], 32 [am. 1981, c. 8, s. 10; c. 26, s. 6; 1983, c. 46, s. 113; 1984, c. 23, s. 23; 1985, c. 35, s. 63; 1986, c. 67, s. 7], 36 [am. 1983, c. 32, s. 1], 40 [am. 1981, c. 8, s. 13; repl. 1988, c. 67, s. 6], 43 [repl. 1981, c. 8, s. 15].

APPEAL from a judgment of the Quebec Court of Appeal, 1988 CanLII 464 (QC CA), [1988] R.L. 146, reversing a judgment of the Superior Court[1]. Appeal allowed.

Jean‑Marc Aubry, Q.C., for the appellant.

Pierre Daignault and France Bernier, for the respondent.

Alain Gingras, for the intervener.

//Gonthier J.//

English version of the judgment of the Court delivered by

GONTHIER J. -- The issue here is whether the Quebec Transport Act, R.S.Q., c. T‑12, and the regulations adopted thereunder are applicable in whole or in part to a federal sightseeing bus transportation service offered to the public by the National Battlefields Commission in the federal park administered by it, known as the Plains of Abraham Park.

1. Facts and Proceedings

The appellant, the National Battlefields Commission, was created in 1908 by the Act respecting the National Battlefields at Quebec, S.C. 1908, c. 57, as amended by S.C. 1914, c. 46, for the acquisition, management and control of the great historic battlefields at Québec, with the ultimate purpose of transforming these sites into a national park that can worthily commemorate the great events which happened there. For several years the appellant has provided the public with a guided bus transportation service free of charge in the Québec National Battlefields Park administered by it under its enabling Act. The provision of this service is delegated to third parties selected annually by calls for tenders. The designated bidder provides a bus which must be identified with the appellant's colours and the services of a driver who has to have the necessary certificates and permits to carry on his trade. The appellant determines the route, the number of stops, the frequency of the service and its duration.

The Act respecting the Communauté urbaine de Québec, R.S.Q., c. C‑37.3, gives the respondent, the Commission de transport de la Communauté urbaine de Québec, the right to provide any sightseeing bus service within the community's territory. Over the years, with only one exception when the work was given to the respondent, the appellant has always contracted with businesses which did not hold the transport permit usually required to operate a sightseeing bus service in the territory where the park is located. The permit is required by the Quebec Transport Act, which the Commission des transports du Québec is partly responsible for administering, including the issuing of permits.

The respondent filed a motion for a declaratory judgment in the Superior Court, in which it asked the court to [TRANSLATION] "declare that [the appellant] may only offer the public a transport service in the territory administered by it through a holder of a transport permit issued for this purpose by the Commission des transports du Québec pursuant to the Quebec [Transport Act]". Lebrun J. dismissed the motion.

The respondent appealed this decision. The Court of Appeal allowed the appeal, Dugas J., sitting ad hoc, dissenting.

2. Judgments Below

Superior Court

The trial judge noted that Parliament has legislated regarding traffic on Crown lands in the Government Property Traffic Act, R.S.C., 1985, c. G‑6 (formerly R.S.C. 1970, c. G‑10), and the Government Property Traffic Regulations, C.R.C. 1978, c. 887, as amended by SOR/80‑619, 84‑238, 88‑93 and 89‑341, and that these provisions apply to the territory administered by the appellant, a Crown agent. In his view the federal government has pre‑emptively legislated regarding traffic on its territory and has thus overridden the carrier's duty to hold a permit issued pursuant to the Quebec legislation.

The judge was apparently referring to the doctrine of federal paramountcy, according to which federal legislation can render provincial legislation that is inconsistent with it inoperative. Although the parties did not raise this question in this Court, I feel nonetheless that I should point out that this doctrine cannot be applied in the present case. For federal paramountcy to apply, there must be a conflict between the statutes and nothing of this kind has been shown. The trial judgment thus seems to me to be erroneous to the extent that it is based on this doctrine; the latter is clearly inapplicable, and I dispose of it forthwith.

Court of Appeal, 1988 CanLII 464 (QC CA), [1988] R.L. 146

McCarthy J.A. -‑ Reasons Concurred in by Bisson J.A.

In the opinion of McCarthy J.A., the application of the principles set out in Construction Montcalm Inc. v. Minimum Wage Commission, 1978 CanLII 18 (SCC), [1979] 1 S.C.R. 754 was sufficient to dispose of the case. First, no federal property constitutes a self‑contained enclave in provincial territory. The National Battlefields Park is no exception to the rule and is in general subject to provincial law. Second, "federal . . . services and businesses remain subject to provincial law as long as provincial law does not reach them quâ federal organizations" (p. 150; the passage is taken from Construction Montcalm, supra, at p. 774). He concluded that in the case at bar the requirement that carriers obtain a provincial permit does not interfere with the appellant's operation of its business. Refusing to rule on what the situation would be if the Commission were operating the transport service itself, McCarthy J.A. confined himself to the following statement, at p. 151:

[TRANSLATION] I would allow the appeal, with costs, and declare that if the respondent through an intermediary offers the public a transport service in the territory administered by it, it can only do so through a holder of a transport permit issued for this purpose by the Commission des transports du Québec pursuant to the Transport Act, R.S.Q., c. T‑12; without costs at trial.

The appeal was accordingly allowed.

Dugas J. (ad hoc) -‑ Dissenting

Dugas J. first established that, in view of the strict government control to which it is subject, the appellant is an agent of the Crown. In his opinion, the bus transport service offered by the appellant is part of the mandate conferred on it by Parliament, and he explained this as follows at p. 155:

[TRANSLATION] The Battlefields Park is the place where the most significant event in Canada's history occurred. It was appropriate that it be developed and opened to Canadians so they could learn about their history. Organizing visits to the area is as much part of the mandate of the [appellant] as developing the area. Intervention by the Commission des transports du Québec would interfere with the full exercise by [the appellant] of the mandate it has been given to acquire, manage and control the national battlefields at Québec.

As regards the applicability of the Quebec Transport Act and the regulations adopted thereunder to the transport service itself, Dugas J. concluded that the federal Parliament has not adopted by reference the provincial rules regarding the operation of a transport service for sightseeing purposes. In his opinion, if these rules were applicable, the Commission des transports du Québec would in practice have control of bus visits and the appellant would be prevented from organizing visits to the park using a bus as it wishes. Dugas J. added, at pp. 156‑57:

[TRANSLATION] It seems to me that the welcome extended to visitors to a national park cannot be separated from the administration of such a park. The jurisdiction being claimed for the Commission des transports du Québec over bus visits to this Park would affect [the appellant's] essential function, which is to develop the National Battlefields Park and facilitate access by the public. This jurisdiction of the Commission des transports would act as a provincial impediment to the full exercise by [the appellant] of the powers conferred on it.

Dugas J. would thus have dismissed the appeal.

3. Issues

The following constitutional questions were stated by Lamer J., as he then was, with the parties' agreement, on December 7, 1988:

1.Does the Quebec Transport Act, R.S.Q. 1977, c. T‑12, apply to Her Majesty the Queen in Right of Canada or the appellant, the National Battlefields Commission, her agent?

2.Does the Quebec Transport Act, R.S.Q. 1977, c. T‑12, and the regulations enacted thereunder apply with respect to the transportation service offered by the appellant in view of s. 91(1A) of the Constitution Act, 1867?

3.Does the Quebec Transport Act, R.S.Q. 1977, c. T‑12, and the regulations enacted thereunder apply to a carrier carrying out, on behalf of the National Battlefields Commission, a transportation service in the National Battlefields Park?

4. Analysis

The case now before the Court began with a motion for a declaratory judgment pursuant to art. 453 of the Quebec Code of Civil Procedure, R.S.Q., c. C‑25, of which the Attorney General of Canada was not notified. This fact necessitates certain preliminary observations.

First, it should be pointed out that the purpose of a motion for a declaratory judgment is to enable litigants to apply to the courts for the solution to a legal issue presenting a genuine problem, a solution which takes the form of a declaration by the court. With the participation and consent of the parties, this Court stated three constitutional questions that encompass the legal problems giving rise to the genuine problem. These questions will be used to focus and frame the discussion, but I should point out that this is not a reference and that this Court is in no way bound by the way in which the constitutional questions were stated: Bisaillon v. Keable, 1983 CanLII 26 (SCC), [1983] 2 S.C.R. 60, at p. 71. These questions are to be used as guides in arriving at a solution to the problem; I shall answer them in so far as it is necessary to resolve this problem.

Secondly, I would note that the constitutionality of the Acts and regulations under consideration is not in any way in dispute. Although the Attorney General of Quebec intervened, no notice of a constitutional question was served on him or on the Attorney General of Canada. I shall therefore take the constitutionality of the relevant legislation as established, without thereby deciding the point.

Finally, I would note that certain statutes and regulations relied on by the parties have been the subject of amendments, mostly minor, since the date on which the proceedings were instituted. I intend to refer in my reasons to the provisions as they read at the present time, so that the declaratory judgment rendered can resolve in a practical and certain manner the problem faced by the parties.

Keeping these points in mind, I propose to deal with the case on the merits, discussing the constitutional questions in the order in which they were stated.

A.Does the Quebec Transport Act, R.S.Q. 1977, c. T‑12, apply to Her Majesty the Queen in Right of Canada or the appellant, the National Battlefields Commission, her agent?

The parties questioned the applicability of the Transport Act (the Act) should the National Battlefields Commission decide to provide the sightseeing transport service itself. The record indicates that the Commission has always previously used independent contractors to provide the service. Arguments were presented to the Court by both parties regarding the immunity from application which the Commission might then enjoy as an agent of the Crown. In my opinion it is not necessary, in view of the actual wording of the provisions the application of which is at issue, to rule on the question of immunity in order to resolve the difficulty.

The provisions of the Act the application of which is at issue are those dealing with the obligation to have a permit in order to operate a transport service. At trial the Commission de transport de la Communauté urbaine de Québec asked the court to declare that a transport permit issued pursuant to the Act was necessary for the service offered to the public within the territory of the Québec National Battlefields Park, and I intend to confine myself to considering the provisions dealing with the permit system. The Act itself indicates that the appellant would not be in any way required to obtain a permit if it decided to provide the transport service itself.

Under the Act no one is required to obtain a permit in order to provide a service free of charge. The general obligation regarding permits is set out in the first paragraph of s. 36 of the Act:

36. Notwithstanding any inconsistent provision of any general law or special act, no person may act as carrier or provide the services of a means of transport or transport system for direct or indirect remuneration unless he holds the permit prescribed for that purpose by regulation. [Emphasis added.]

The Bus Transport Regulation, (1987) 119 G.O. II 24, as amended by (1988) 120 G.O. II 674, and adopted pursuant to the Act, contains the substantive provisions relating to bus transport permits. Section 1 reads as follows:

1. Transport of persons by bus or minibus for reward shall require a bus transport permit issued by the Commission des transports du Québec. [Emphasis added.]

Anyone undertaking to act as a carrier for reward must obtain a permit. This is true, for example, of the independent carrier to whom the appellant pays a lump sum to provide the service; but if the appellant decided to act as a carrier itself by acquiring a bus and retaining the services of a driver by a contract of employment, no permit would be necessary since the service is offered free of charge.

It thus appears that the appellant could not be required to obtain a permit under the Act if it decided to provide the service itself. It is not necessary to consider the problems regarding the division of powers and Crown immunity that may influence the applicability of the permit system to the appellant, as the latter is exempted from them by the very terms of the Act.

The second constitutional question is broader and its solution more complex.

B.Does the Quebec Transport Act, R.S.Q. 1977, c. T‑12, and the regulations enacted thereunder apply with respect to the transportation service offered by the appellant in view of s. 91(1A) of the Constitution Act, 1867?

To answer this question it is first necessary to make certain clarifications regarding the mandate given to the appellant Commission to provide a transport service. The applicability of the provincial provisions can then be considered, first in light of the constitutional distribution of legislative powers and then in light of the scope of the federal legislation which, according to the respondent, incorporated the provincial provisions by reference.

(a) Mandate of the National Battlefields Commission

The respondent and the Attorney General of Quebec discussed the scope of the appellant's mandate to set up a sightseeing bus transport service on the Plains of Abraham. The respondent adopted the argument of the Attorney General, who maintains that the appellant has no authority to provide a public or sightseeing transport service in the territory administered by it.

The respondent admits, however, the accuracy of the following passages from the reasons of Dugas J., dissenting on appeal (at pp. 155‑56):

[TRANSLATION] Organizing visits to the area is as much part of the mandate of the Battlefields Park Commission as developing the area.

It seems to me that the welcome extended to visitors to a national park cannot be separated from the administration of such a park.

It submits that the appellant's jurisdiction over "visits", "welcome" and "access" in the Park does not make it an agent of the federal Crown in transport matters.

Determining the extent of the appellant Commission's mandate requires a review of the relevant provisions of its enabling Act, the Act respecting the National Battlefields at Quebec.

To begin with, the preamble contains the following passages:

WHEREAS it is desirable in the public interest of Canada to acquire and preserve the great historic battlefields at Quebec, restoring so far as possible their principal features, so as to make them a Canadian National Park; . . . And whereas it is expedient to provide for the constitution of a commission for the acquisition, management and control, subject to the provisions of this Act, of the said battlefields and the moneys contributed for the said purposes: . . .

Section 7 also provides that the Commission may:

7. . . .

(c) lay out and construct on or through the said lands such avenues, drives or paths, gardens, squares or other works as are, in the opinion of the commission, desirable for the improvement of the grounds and the conversion thereof into a national park of a character to commemorate worthily the great events which happened there. [Emphasis added.]

This Act was amended in 1914 by the Act to amend the Act respecting the National Battlefields at Quebec, S.C. 1914, c. 46. Section 4 of this amending Act provides that the Commission may make by‑laws for:

4. . . .

(d)the maintenance, preservation, and protection of the lands, works and other property belonging to the Commission or under its jurisdiction, control or care, and the access of the public thereto; [Emphasis added.]

In view of the general purposes of the Act, these provisions seem to me to be broad enough to authorize the establishment by the appellant of a sightseeing bus transport system. As Dugas J. noted in his dissent in the Court of Appeal, it is somewhat hard to separate the organization of visits to the area from the more general purpose of developing the cultural heritage represented by this site. The commemorative function of such a park, associated with the historical events that took place there, also makes it virtually essential that there be a guide who can perform that function by providing information. As the Park comprises a vast area which covers more than one battlefield, the use of a bus to tour it seems more than a mere convenience. Clearly, the average tourist cannot be expected to walk around such a site on foot. The appellant's mandate must include the power to use the means necessary to carry it out.

In my opinion, in keeping with ordinary statutory interpretation, establishing a bus service is an integral part of the mandate conferred on the appellant Commission by its enabling Act. Let us now consider whether this service is subject to the provincial legislation in question.

(b) Applicability of the Provincial Legislation

Before going any further, I shall reiterate that the constitutional validity of the Act respecting the National Battlefields at Quebec is not in dispute and it is therefore taken as established here. We have seen that the establishment of the bus service in the Park territory is an integral part of the mandate conferred on the Commission by this Act; federal legislative jurisdiction over this service is thus taken as established as well. The question that arises concerns the applicability of provincial legislation to this federal service.

Additionally, I note that the constitutional validity of the provincial legislation in question is also not in dispute. It is the constitutional applicability of this legislation to the federal service which alone is at issue.

(i) Interjurisdictional Immunity From Application

The appellant argues first that the mere fact of the Crown's ownership right over the Plains of Abraham, a right which is not disputed here, could legally exclude the application of the provincial legislation in question. This proposition is apparently based on the enclave theory mentioned by Laskin J. in dissent in Cardinal v. Attorney General of Alberta, 1973 CanLII 980 (SCC), [1974] S.C.R. 695. This theory was categorically rejected by this Court in Construction Montcalm Inc. v. Minimum Wage Commission, supra. In that case Beetz J. said the following for the majority, at pp. 777‑78:

In its second submission, Montcalm contends that provincial law does not apply on federal Crown lands. Again I disagree. The exclusive power of the Province to make laws in relation to property and civil rights under s. 92(13) of the Constitution is territorially limited only by the words "in the Province", and Mirabel is located in the Province. The enumeration of exclusive federal powers in s. 91 of the Constitution, including the power to make laws in relation to the public debt and property, operates as a limitation ratione materiae upon provincial jurisdiction, not as a territorial limitation. . . . Federal Crown lands do not constitute extra‑territorial enclaves within provincial boundaries any more than indian reserves.

There is thus no foundation for the argument that the Plains of Abraham form a federal enclave immune from provincial legislation. Construction Montcalm clearly established that in principle a valid provincial law of general application applies to works, undertakings, services, things or persons which otherwise fall under federal jurisdiction.

As an exception to this principle, however, Parliament can assert exclusive legislative jurisdiction excluding the application of provincial statutes to the specifically federal aspects of such things or persons. The classic example is that of legislative jurisdiction over labour relations, where this Court has established that provincial legislation dealing with this area ‑‑ a matter in principle reserved for the provinces: Toronto Electric Commissioners v. Snider, 1925 CanLII 331 (UK JCPC), [1925] A.C. 396 ‑‑ is not applicable to federal undertakings even if the legislation is otherwise valid: Reference re Minimum Wage Act of Saskatchewan, 1948 CanLII 36 (SCC), [1948] S.C.R. 248; Reference re Industrial Relations and Disputes Investigation Act, 1955 CanLII 1 (SCC), [1955] S.C.R. 529; Commission du salaire minimum v. Bell Telephone Co. of Canada, 1966 CanLII 1 (SCC), [1966] S.C.R. 767. After discussing the content of this exception in the field of labour relations in Bell Canada v. Quebec (Commission de la santé et de la sécurité du travail), 1988 CanLII 81 (SCC), [1988] 1 S.C.R. 749, at pp. 762‑63 (the third proposition), Beetz J. for the Court stated as follows the general rule giving rise to this type of exception, known as interjurisdictional immunity from application:

It should however be noted that the rules stated in this third proposition appear to constitute only one facet of a more general rule: works, such as federal railways, things, such as land reserved for Indians, and persons, such as Indians, who are within the special and exclusive jurisdiction of Parliament, are still subject to provincial statutes that are general in their application, whether municipal legislation, legislation on adoption, hunting or the distribution of family property, provided however that the application of these provincial laws does not bear upon those subjects in what makes them specifically of federal jurisdiction: Canadian Pacific Railway Co. v. Corporation of the Parish of Notre Dame de Bonsecours, [1899] A.C. 367 . . .; Natural Parents v. Superintendent of Child Welfare, 1975 CanLII 143 (SCC), [1976] 2 S.C.R. 751 . . .; Dick v. The Queen, 1985 CanLII 80 (SCC), [1985] 2 S.C.R. 309; Derrickson v. Derrickson, 1986 CanLII 56 (SCC), [1986] 1 S.C.R. 285.

The immunity pertaining to federal status applies to things or persons falling within federal jurisdiction, some specifically federal aspects of which would be affected by provincial legislation. This is so because these specifically federal aspects are an integral part of federal jurisdiction over such things or persons and this jurisdiction is meant to be exclusive.

It is the fundamental federal responsibility for a thing or person that determines its specifically federal aspects, those which form an integral part of the exclusive federal jurisdiction over that thing or person: Clark v. Canadian National Railway Co., 1988 CanLII 18 (SCC), [1988] 2 S.C.R. 680, at p. 708. For example, the specifically federal nature of Indians has been described by the expressions "Indianness" or "status and rights of Indians", which reflect the fundamental federal responsibility for Indians in the Canadian constitutional and historical context. For example, a provincial statute on hunting cannot apply to Indians to the extent that it affects their status as Indians: Dick v. The Queen, 1985 CanLII 80 (SCC), [1985] 2 S.C.R. 309, whereas provincial labour relations law may apply to Indians in so far as it does not affect Indianness: Four B Manufacturing Ltd. v. United Garment Workers of America, 1979 CanLII 11 (SCC), [1980] 1 S.C.R. 1031.

In the case of a federal undertaking, it will generally be said that its specific nature is affected if the provincial statute touches on a vital or essential aspect of its establishment, management or operation, as is generally the case with a labour relations statute: Bell Canada v. Quebec (Commission de la santé et de la sécurité du travail), supra; Commission du salaire minimum v. Bell Telephone Co. of Canada, supra. This particular application of the test can be transposed to the case of a federal service, which in several functional aspects corresponds to the concept of an undertaking. In the case at bar federal jurisdiction over this service is taken for granted; the question then is whether the provincial legislation affects the federal service in one of its vital or essential aspects regarding its establishment, management or operation.

The Quebec Transport Act applies in general to the coordination, rationalization and development of transportation in the province. Within this general framework, certain responsibilities and powers are conferred on the Minister of Transport and the government (Division III); the Commission des transports du Québec is also established and significant licensing and investigative powers are conferred on it (Divisions V and VI). I shall examine these aspects of the Act and the regulations adopted thereunder which, in the appellant's submission, may affect essential aspects of the transport service offered by it.

The Act gives the Minister the responsibility, subject to approval by the Government, for taking steps to improve transport costs, rates and tariffs in the province "while coordinating and integrating them" (s. 3). The Minister may, in the course of his duties, grant subsidies and require any carrier to file an operating report with him (ss. 4 and 4.1). General regulatory powers are conferred on the government under the Act. These include:

5. In addition to the other regulatory powers conferred upon it by this Act, the Government may, by regulation,

(c) determine what activities require a permit, provide exceptions to the activities requiring a permit as regards types of persons or goods carried, kinds of carriers, and, where such is the case, as regards the place of the main establishment of such carrier, the kinds of services, the means of transport or transport systems used and the territory or distance covered, and prescribe conditions for the carrying on of such an activity or the availing of such an exception and fix the duration of such exception;

(d) determine the nature and classes of permits, establish standards permitting the determination of the minimum and maximum number of permits, and prescribe the conditions on which a permit may be issued and those on which a person may hold a permit and provide for exceptions to those conditions;

(e) prescribe conditions for the maintaining, assignment or transfer of a permit where there is a transfer of ownership or change of control of a means of transport or a transport system, or an acquisition contemplated in section 44;

(f) determine the minimum or maximum term of a permit, prescribe that a permit is not renewable, exempt a permit from the renewal procedure provided in section 37.1, prescribe the conditions on which a permit may be renewed and determine the cases where a permit may be renewed by the administrator of the Commission;

(g) fix the requirements applicable to the management and financing of means of transport or transport systems, the equipment of carriers, the exchange of equipment and the establishment or change of lines or routes of carriers;

(h) prescribe standards for the tariffs, rates or costs of transport, the leasing of vehicles and transport brokerage;

(m) fix the requirements applicable to a cost estimate, contract or bill of lading in respect of a carrier;

(n) determine the minimum stipulations to be included in a carrier contract and prescribe the minimum coverage of a civil liability insurance policy or guarantee of solvency required of a carrier; [Emphasis added.]

It may be noted forthwith that there are very few aspects of a transport service that are not subject to regulation, directly or indirectly, by the government. Most aspects of transport in the province are controlled by a permit system, and it is the subjection of the federal service to this permit system which is at issue here.

Under s. 5.1 of the Act, the government may confer on the Commission des transports du Québec a discretionary power to issue, renew or transfer permits. The permit system and the general powers of the Commission are set out by the Act in Division V, titled "Commission des transports". The general powers of the Commission are stated in s. 32:

32. The Commission may, within the scope of the regulations,

(1) issue permits and fix the valid period thereof;

(2) transfer any permit or any right granted by a permit;

(3) impose conditions and restrictions on the use of a permit and limit the use of certain services of a permit holder to certain users;

(4) in its own right or on application, fix scales of charges, which may include minimum, maximum or both minimum and maximum charges, and change, suspend or cancel all or some of them;

(5) receive scales of charges for filing, which may include minimum, maximum or both minimum and maximum charges, and change, suspend or cancel all or some of them;

(6) perform any other functions conferred on it by law. [Emphasis added.]

The permit system established by the Act turns on the general obligation imposed by the first paragraph of s. 36, which we noted above:

36. Notwithstanding any inconsistent provision of any general law or special act, no person may act as carrier or provide the services of a means of transport or transport system for direct or indirect remuneration unless he holds the permit prescribed for that purpose by regulation.

Most of the provisions relating to the permit system are contained in regulations, but certain aspects are dealt with in the Act directly. For example, s. 40 allows the Commission, in its own right or on request, to "change, suspend or revoke the permit of a carrier" if he alters the services he is authorized to provide under his permit without authorization from the Commission or if he "does not provide service up to the standard the public is entitled to expect, all things considered". Section 43 further provides that no permit holder "may discontinue, reduce or extend the services his permit authorizes him to provide or change the conditions thereof without prior authorization from the Commission".

The Bus Transport Regulation ("the Regulation") represents the exercise by the government of its general regulatory power over the specific sector of passenger bus transport. Section 1 first restates the general requirement for a permit, mentioned earlier:

1. Transport of persons by bus or minibus for reward shall require a bus transport permit issued by the Commission des transports du Québec.

Division II, titled "Issue, Renewal and Transfer of Permits", is of particular interest. Section 12 lays down the general conditions considered by the Commission in issuing a permit:

12. The Commission shall issue a bus transport permit to a person who applies therefore [sic] where it considers that:

(1) the applicant possesses relevant knowledge or experience for competently carrying out the activity for which the permit is requested;

(2) the applicant gives evidence of sufficient financial grouding [sic] to insure the establishment and the viability of his undertaking;

(3) the applicant has sufficient human and material resources at his disposal to administer his undertaking efficiently;

(4) the services for which the applicant requests a permit fulfill needs of the clientele or the population of the territory to be served;

(5) the projected revenues are sufficient to insure the profitability of the services for which the permit is requested.

(6) the issue of the permit requested by the applicant is not likely to entail the disappearance of any other bus transport service or appreciably affect the quality thereof. [Emphasis added.]

Section 17 sets out the conditions that may be attached to a permit by the Commission:

17. When issuing, renewing or delivering a permit, the Commission shall indicate its duration and shall determine the places that the licence holder is authorized to service, the routes, schedules and frequency of the trips he is authorized to make, the capacity and the category of the bus he is authorized to use, the clientele of his service, as well as other operating conditions and restrictions attached to his permit. [Emphasis added.]

The rates and tariffs attached to a permit are governed by a filing procedure prescribed by s. 21. Specific provisions are made for each category of permit relating to bus transport. Those dealing with tourist transport are as follows:

30. The holder of a tourist transport permit is authorized to provided [sic] sightseeing tours on routes, to places and according to schedules specified in his permit.

Where the tariff for a tourist transport service is fixed per vehicle, the Commission shall specify on the permit the minimum period of time required to cover a route rather than a schedule.

31. The holder of a tourist transport permit shall ensure that a guide accompagnies [sic] tourists along the entire route to inform them about the points of interest to be seen.

The bus driver may serve as guide. [Emphasis added.]

A detailed analysis of these provisions of the Act and the Regulation in my view demonstrates the massive and intrusive impact they undeniably have on the vital and essential aspects of the federal service.

The respondent admits that the appellant could not be subject to provincial regulations regarding routes and procedures, including the obligation to provide a guide, tariffs and the period in which the service will be provided. These aspects are mentioned in ss. 17, 21, 30 and 31 of the Regulation currently in effect, which embody certain powers conferred on the Commission by s. 32 of the Act. These sections of the Regulation further authorize the Commission to regulate areas where the service may be provided, schedules that must be observed, frequency of trips, categories of buses and clientele of the service. All these aspects directly affect the very concept and substance of the federal service and are accordingly within exclusive federal jurisdiction, like the plans for a future airport: Construction Montcalm, supra, at p. 771. These aspects of the provincial provisions are thus clearly not applicable to the federal service; but contrary to what was argued by the respondent, the inapplicability of provincial legislation goes beyond these few aspects and must in my view extend to the permit system taken as a whole.

Application of the permit system would appear to place the appellant Commission at the mercy of the largely discretionary decisions of the Commission des transports du Québec on fundamental aspects of the service it offers the public under its mandate. The impact the permits system would have on certain vital or essential aspects of the federal service may be illustrated by a few examples.

Section 17 of the Regulation leaves the list of operating conditions and restrictions attached to the permit open. If this is a discretionary power granted to the Commission ‑‑ which is possible under s. 5.1 of the Act, but which I do not have to decide here ‑‑ it seems quite clear that the appellant Commission cannot be subject to it without losing ultimate control over the substance of the service it provides under its mandate.

At another level, certain conditions for obtaining a permit set out by the government in s. 12 of the Regulation also affect vital aspects of the federal service. Under subs. (4), the Commission may refuse to issue a permit if it considers that the service provided does not fulfill the needs of the population of the territory to be served. This condition affects the fundamental decision to create a service and so impinges on its very existence, making the Commission des transports du Québec responsible for evaluating the need for the service in accordance with its view of the population's requirements. Subsection (5) authorizes a degree of interference by the Commission des transports in the gratuitous nature of the service, the budget assigned to it and the amount paid by the Commission to a contractor for providing it. Subsection (6) also touches on the advisability of setting up the service and allows the Commission to deny a permit in accordance with considerations completely unrelated to the appellant Commission's mandate.

The Act itself contains certain provisions affecting the federal service in some of its essential aspects. We have seen that under s. 40, a permit holder must obtain authorization from the Commission des transports to alter the services it provides, otherwise it may have its permit changed, suspended or revoked by the Commission. The Commission may also order the Régie de l'assurance automobile du Québec to withdraw the registration plate and registration certificate of any vehicle used by the holder of a permit. There seem to be few limits on the discretion of the Commission des transports in authorizing a holder to alter the services provided, and in my opinion the appellant Commission's control over the substance of the service it offers is thereby affected. The holder of a permit is also subject to the same penalties, under s. 40, if he "does not provide service up to the standard the public is entitled to expect, all things considered". Here again, it is to be feared that this expression leaves much too great a scope for the Commission des transports to interfere in the very design of the service.

Accordingly, in my view it is the permit system taken as a whole which cannot be applied to the appellant Commission. The consequence of applying the legislation on permits would be to make the setting up, substance and maintenance of the federal transport service subject to the largely discretionary control of the Commission des transports and the government, when these aspects are within exclusive federal jurisdiction. The Regulation is therefore constitutionally inapplicable to the federal service, as are the provisions of the Act dealing with the permit system.

I hasten to add that this does not mean that the federal service is necessarily exempt from the application of provincial legislation dealing with safety in the transport industry, which is secured in the Act by a separate mechanism from the permit system. Indeed, the provisions dealing with safety are generally such that they rarely affect the vital or essential aspects of a service or undertaking. They rather tend to touch on certain secondary aspects of operations, which may often be likened to the example given in Construction Montcalm, supra, at p. 771, of the requirement by a province that workers wear a protective helmet on all construction sites, a requirement which was applicable to the site of a new airport.

(ii) Adoption by Reference

The respondent argues that Parliament has adopted all the provincial transport legislation by reference through the Government Property Traffic Act and the Government Property Traffic Regulations. The effect of such a reference would be to make the provincial provisions in question applicable to the federal service by authority of Parliament, so that the federal service would have to have a permit from the Commission des transports.

By an amendment on March 16, 1984, SOR/84‑238, the Government Property Traffic Regulations became applicable to the territory of the Plains of Abraham. The sections referring to the provincial legislation read as follows:

Registration and Permits

5. (1) Except as provided in subsection (2) [exception made for South Klondike Highway], no person shall operate a vehicle on a highway unless

(a) he holds all licences and permits that he is, by the laws of the province and the municipality in which the highway is situated, required to hold in order to operate the vehicle in that province and municipality; and

(b) the vehicle is registered and equipped as required by the laws of the province and the municipality in which the highway is situated.

Compliance with Provincial and Municipal Laws

6. (1) Except as provided in subsection (2) [exception made for South Klondike highway], no person shall operate a vehicle on a highway otherwise than in accordance with the laws of the province and the municipality in which the highway is situated.

(3) For the purposes of this section, in the event of any inconsistency between the provisions of the Government Property Traffic Act and these Regulations and the provisions of the laws of the province and the municipality in which the highway is situated and the laws of the Yukon Territory, the provisions of the Government Property Traffic Act and these Regulations prevail to the extent of the inconsistency.

The appellant suggests, like Dugas J., dissenting on appeal, that the federal legislation covers only the operation of vehicles on federal land, and that is all. In the appellant's submission, the federal government has adopted by reference only the provincial rules governing the operation of vehicles, and the requirements relating to the permits and licences that must be held by those operating a vehicle on such roads. In my opinion, one has to agree that the offences mentioned in the federal regulations relate to the operator of the vehicle.

It is also true, however, that the substance of those offences clearly and non‑exhaustively includes all the provincial requirements relating to the vehicle itself. If a vehicle is not to be driven illegally, it must be "registered and equipped as required by the laws of the province and the municipality" concerned. Additionally, the operation of a vehicle is prohibited in general "otherwise than in accordance with the laws of the province".

Under s. 36 of the Transport Act, the duty to obtain a permit is imposed on the carrier, that is, the person providing or carrying on the transport service. This duty does not in any way apply to the driver of a vehicle used by the carrier. On the face of it, it would seem that the driver of a vehicle could not be convicted of an offence under these sections of the federal regulations because of the carrier's failure to obtain the necessary permit. The permit is legally required of the carrier or owner to operate the service, not of the driver to drive or operate the vehicle. I therefore see no direct connection between the duty to obtain a transport permit on the one hand and the driver or vehicle to which the sections of the federal regulations refer on the other.

I am accordingly of the view that the federal legislation has not incorporated the provincial provisions on obtaining a transport permit.

C.Does the Quebec Transport Act, R.S.Q. 1977, c. T‑12, and the regulations enacted thereunder apply to a carrier carrying out, on behalf of the National Battlefields Commission, a transportation service in the National Battlefields Park?

There is no need to dwell at length on this question, the substance of which I answered earlier. The concept of constitutional inapplicability relates here to the federal service, certain vital or essential aspects of which would be affected by the application of the provincial provisions. The status of the person providing this service is not relevant for this purpose: the permit system is simply not applicable to the service. The carrier may benefit from this immunity from application enjoyed by the service, and it is therefore not necessary to examine the application of Crown immunity to him.

It goes without saying that the carrier is not absolutely exempt from the permit system administered by the Commission des transports. It covers him with regard to activities he may carry on outside the limits of the service he provides the appellant Commission. What is decided here is that the provincial system does not apply with respect to the federal service: in other words, the mere fact that the carrier provides the federal service does not require him to obtain a permit from the Commission des transports du Québec.

5. Answers to Constitutional Questions and Decision

For these reasons, I would answer the constitutional questions as follows:

1.Does the Quebec Transport Act, R.S.Q. 1977, c. T‑12, apply to Her Majesty the Queen in Right of Canada or the appellant, the National Battlefields Commission, her agent?

Answer:It is not necessary to answer this question: the Act does not require a permit for a service provided without reward.

2.Does the Quebec Transport Act, R.S.Q. 1977, c. T‑12, and the regulations enacted thereunder apply with respect to the transportation service offered by the appellant in view of s. 91(1A) of the Constitution Act, 1867?

Answer:As the federal jurisdiction over the sightseeing transport service provided by the appellant is not at issue, the permit system established by the Act and governed by the Bus Transport Regulation is constitutionally inapplicable to it, which does not exempt the service from the application of the other provisions of the Act.

3.Does the Quebec Transport Act, R.S.Q. 1977, c. T‑12, and the regulations enacted thereunder apply to a carrier carrying out, on behalf of the National Battlefields Commission, a transportation service in the National Battlefields Park?

Answer:The carrier providing the transport service may benefit from the aforementioned immunity from application enjoyed by the service, but is still potentially subject to provincial legislation in respect of such activities as he may undertake or have undertaken otherwise than as part of the federal service.

The appeal is therefore allowed, with costs throughout.

Appeal allowed with costs.

Solicitor for the appellant: The Attorney General of Canada, Ottawa.

Solicitors for the respondent: Levasseur, Ouellet, Québec.

Solicitors for the intervener: Alain Gingras and Jean Bouchard, Ste‑Foy.

• Chief Justice at the time of judgment.

[1] Sup. Ct. Québec, No. 200-05-003038-846, April 4, 1985 (Lebrun J.).