The “Return to Unanimity” in Insite and Division of Powers Jurisprudence: Chief Justice McLachlin’s “Oversight”

Between 2000 and 2008, under Chief Justice McLachlin’s oversight, the Supreme Court of Canada (“SCC”), was unanimous in its disposition of division of powers issues in 25 rulings or reference opinions. Then, after the 2009 division in Consolidated Fastfrate Inc v Western Canada Council of Teamsters, [2009] 3 SCR 407, the SCC divided sharply in all six federalism rulings released in 2010.

In 2011, it seemed the SCC would likely continue this trend of division on federalism issues; this was particularly expected in Canada (AG) v PHS Community Services Society, 2011 SCC 44 [Insite], in regards to the interjurisdictional immunity (IJI) doctrine, as it seemed likely the apparently “decentralist” bloc of Deschamps and LeBel JJ. would side with the application of provincial IJI and be opposed by the apparently “centralist” bloc of McLachlin C.J. and Binnie and Fish JJ. However, the SCC was not only unanimous in Insite, but was also unanimous in the recently released decision in Reference re Securities Act, 2011 SCC 66, regarding the federal government’s s. 91(2) general power to regulate trade and commerce.

It appears a “return to unanimity” may be occurring in the Court under Chief Justice McLachlin’s oversight of division of powers jurisprudence in 2011, especially since four of the six federalism rulings divided upon in 2010 split regarding the role of the IJI doctrine. While these rulings split on how to apply IJI after Canadian Western Bank v Alberta, [2007] 2 SCR 3 [Canadian Western Bank], the SCC ruling in Insite unanimously reaffirmed the previous decision to apply IJI with restraint by restricting it to existing precedent that has only protected federal powers.

Also, in stating that “before applying the doctrine of interjurisdictional immunity in a new area, courts should ask whether the constitutional issue can be resolved on some other basis,” (para 65), the Insite ruling confirmed the doctrinal ordering conclusion of Canadian Western Bank that an analysis of paramountcy should precede application of IJI. However, this development in 2011 comes after much controversy over the unreciprocal test for IJI articulated by McLachlin C.J. in Quebec (Attorney General) v Canadian Owners and Pilots Association, [2010] 2 SCR 536 [COPA], in 2010, and may be a significant factor as to why the court has achieved unanimity in its two most recent, major cases relating to federalism issues.

Chief Justice McLachlin’s Different Type of “Oversight” in COPA

In COPA, Chief Justice McLachlin displayed a different type of ‘oversight’, one that implied an omission or error rather than watchful supervision; in her stated reasoning, she used one-sided language when she claimed “the test [for IJI] is whether the provincial law impairs the federal exercise of the core competence” (para 43). Thus, the implication expressed was the doctrine has no theoretical ability to apply reciprocally to protect provincial powers; in a direct response to this quote, Deschamps J. wrote in Quebec (Attorney General) v Lacombe, [2010] 2 SCR 453 [Lacombe]:

[W]ith all due respect for the Chief Justice, I believe that she is getting away from both the letter and spirit of Canadian Western Bank when she suggests that the doctrine of interjurisdictional immunity is limited to the protection of federal powers… (para 109)

Regardless of whether this ‘oversight’ was purposeful or unintentional, Deschamps and Lebel JJ. in Lacombe still criticized the Chief Justice’s approach in COPA as promoting “a more centralized form of federalism” that “opens the door for predation upon provincial jurisdiction” (para 184). In order to remain true to “the letter and spirit of Canadian Western Bank,” a future decision would have to avoid completely ousting the theoretical potential of the doctrine to apply reciprocally, find a way to restrict practical application of IJI to existing precedents protecting federal powers, and not disturb the logic underlying the SCC’s doctrinal ordering conclusion.

The SCC’s Rejection of IJI in Insite – The Short Decision and Bright Line Argument

In Insite, under Chief Justice McLachlin’s watchful ‘oversight’, the Court was able to achieve all of those objectives; this was difficult because Huddart J.A. stated at the British Columbia Court of Appeal (BCCA) that

[i]f interjurisdictional immunity is not available to a provincial undertaking on the facts of this case, then it may well be said the doctrine is not reciprocal and can never be applied to protect exclusive provincial powers. (para 176)

However, Chief Justice McLachlin was still able to achieve unanimity in rejecting IJI by avoiding both detailed discussion of the facts of Insite and specific rejection of the arguments presented at the BCCA.

Strikingly, Chief Justice McLachlin’s reasoning on IJI is much shorter in Insite than in cases like COPA where she found IJI applicable to the federal aeronautics power; whereas she spent 36 paragraphs justifying her application of IJI in COPA and discussed the facts in detail, her decision on IJI in Insite spans 13 paragraphs of which only five specifically discuss the facts of the case instead of recent developments to the doctrine. Within those 13 paragraphs, the SCC gave three reasons for rejecting the notion that the delivery of health care services constitutes a ‘core’ of the provincial health power that should be protected by IJI:

1. The Court’s reluctance to identify new ‘cores’ of power where IJI applies;
2. The parties in the case failed to identify a delineated ‘core’ of a “broad and extensive” provincial power over healthcare;
3. The desire to avoid potentially creating legal vacuums where Parliament could not legislate on controversial medical procedures.

The Chief Justice’s decision refers to the second reason as more important, in part because the “broad and extensive” provincial health power “extends to thousands of activities and to a host of different venues” (para 68). In this line of thinking, the SCC seems to once again follow the logic of Canadian Western Bank that “a broad application of the [IJI] doctrine to ‘activities’ creates practical problems of application much greater than in the case of works or undertakings…whose limits are more readily defined” (para 42).

Here, it is particularly important to note the SCC decision speaks repeatedly only of a ‘core’ power related to health, and the test involving essential and vital elements of ‘undertakings’ seems to have been avoided in the Court’s stated reasoning. Whereas Huddart J.A. repeatedly classified Insite as a provincial healthcare ‘undertaking’, McLachlin C.J.C. does not refer to it as an ‘undertaking’ at all.

Even though Canadian Western Bank stated “in theory, the doctrine is reciprocal: it applies [also] to protect provincial heads of power and provincially regulated undertakings from federal encroachment,” (para 35), it is much easier to say a “bright line” cannot be drawn around an abstract, “broad and extensive” provincial health power than to say a “bright line” cannot be drawn around a provincial undertaking defined as a “strictly regulated health facility” (Insite, para 18). In focusing her discussion on ‘core’ powers rather than ‘undertakings’ when making her “bright line” argument, Chief Justice McLachlin was able to achieve unanimity following the reasoning in Canadian Western Bank, and thus reaffirm a restricted role for IJI while not completely ousting the potential for expansion of the doctrine in a reciprocal direction.

Paradoxical Practical Problems Created by the Use of Provincial IJI and Federal Paramountcy

It was conceded in Insite that “if interjurisdictional immunity does not apply, the federal prohibitions on drugs in the CDSA apply to Insite…by operation of paramountcy” (para 72). If the SCC had been willing to accept the argument of Huddart J.A. in favour of reciprocal IJI as well, then Insite would have emerged as a case where provincial IJI was at odds with federal paramountcy. Dwight Newman recently wrote an article discussing practical problems that would arise if this scenario occurred, and stated that

[i]n such an event, a paradoxical set of conclusions would emerge whereby the federal legislation is inapplicable to the provincially regulated matters but where the provincial regulation is itself inoperative to the extent of its inconsistency with the federal legislation. (3)

In such a paradoxical situation, the Court would have to revisit their doctrinal ordering conclusion, from Canadian Western Bank, that an analysis of paramountcy should occur before IJI because the SCC’s “logic of [this approach], in part, is to see if courts can avoid the creation of new IJI precedents” (Newman, 3); however, any application of provincial IJI would necessarily involve new precedent since it has only been applied in favour of federal powers thus far. Nevertheless, in this hypothetical paradox, the Court would have an equally difficult time justifying a prioritization of provincial IJI over federal paramountcy because “the supposed logic of reversing the order would similarly falter in that it does not respect all requirements of federalism” (Newman, 3).

Conclusion

It is certainly possible that all of the Court, including both McLachlin C.J. and Deschamps J., considered such paradoxical problems when making their final decision; this also may have influenced them towards uniting around a unanimous decision reaffirming the limited scope of IJI instead of continuing to divide themselves along their apparently “centralist” and “decentralist” positions. Now that the Reference re Securities Act has also produced a unanimous decision, it will be interesting to see whether this “return to unanimity” regarding federalism jurisprudence will continue on into 2012 as well.