You can say this for federalism: it’s been great for lawyers. It’s been good for historians, too, actually.
Recently, a lot of lawyers have kept busy arguing over whether Canada should have a national securities regulator and whether the Constitution allows one.
Securities aren’t actually mentioned in the Constitution itself. The courts in Alberta and Quebec have already said the Constitution forbids federal regulation in that area. On the other side of the issue, the federal government argues a national securities regulator is perfectly constitutional. The Supreme Court’s decision on the question is pending.
Trade and commerce is plainly federal, as are banking, currency, interest, bills of exchange, and promissory notes. These are all economic matters that sound rather similar to securities regulation. On the other hand, property and civil rights are plainly a provincial power. If securities trading is just an aspect of contract law, then it’s probably a subject for provincial regulation.
It all comes down to how you read the clauses of the Constitution Act as drafted in the 1860s. Lawyers have been kept busy trying to persuade judges on how to do that almost since its initial drafting.
In the 1870s, when William Parsons decided his insurance company had denied a claim he felt entitled to, the matter looked like grounds for a routine bit of commercial litigation. But while it was an Ontario law that gave him grounds to sue, Citizens Insurance Co. believed insurance was a federal matter. So did the federal minister of finance.
The constitutional point made its way through all of the courts, which made nice work for the insurance company’s law firm, the predecessor of McCarthy Tétrault LLP. But in the end, the courts found for Parsons and the province.
Similarly, lumber barons Peter McLaren and Boyd Caldwell had a simple commercial dispute over control of log-driving streams. That was until Queen’s Park and Ottawa began to fight over which level of government had the constitutional authority to regulate commerce on rivers and streams. Much litigation flowed from that one.
In Canada’s early years, the provinces won most of those constitutional battles with Ottawa. Up until the 1930s, when the courts forbade vigorous federal efforts against the Depression on the grounds that those powers rested with the provincial governments, the provinces and their legal counsel had a great run.
All of those decisions permanently confirmed Canada’s federal nature. Not only were the provinces declared to be sovereign in matters that were under their jurisdiction, they also got authority over many fields that might have been federal had the court cases gone differently.
That legal trend began to reverse itself later in the 20th century. Federal authority grew massively during and after the Second World War, and the Supreme Court became less sympathetic to the provinces’ claims.
Among historians, the trend seems to have been almost the reverse. There was a long tradition of historians who were appalled by the courts’ ideas about provincial sovereignty and power. These historians, led by Donald Creighton but supported by political scientist Eugene Forsey and legal scholar Frank Scott, believed that the architect of the Canadian Confederation was Sir John A. Macdonald, a determined and persistent centralist.
Lately, even as the courts have seemed more convinced by Ottawa’s claims, some historians have been giving new attention to the provinces. Look closely at the making of the Canadian Constitution, they suggest. Macdonald’s vision was centralist, for sure, but his view was blunted, hemmed in, and defeated during the constitutional negotiations. The only constitution the fathers of Confederation could accept was a truly federal one. Macdonald, of course, wasn’t the sole author of the Constitution.
There’s a historical suggestion that the framers concluded that anything that was essential to defending and preserving strong regional cultures within Canada had to be local: education, charity, language, and even distinct legal systems. But as for anything essential to building up a strong national economic unit, they tended to want to put those matters in federal hands. Does securities regulation sound more like a federal kind of thing?
Once again, Supreme Court judges must decide whether a particular field is more like trade and commerce or like property and civil rights. Of course, the decision will shape legal and financial history. But the judges will be taking part in a big historical debate, too. It’s likely to be continued by both lawyers and historians for quite a while yet.
Christopher Moore’s newest book is The British Columbia Court of Appeal: The First Hundred Years. His web site is christophermoore.ca.
