2018: The SCC Year In Review

This article summarizes the 10 most significant Supreme Court cases of 2018, as selected by Gowling WLG's Supreme Court of Canada Services Group. The Supreme Court released 59 decisions last year, across a broad spectrum of legal subject-matter areas. It's always a difficult task to select 10 (and sometimes we have to sneak a couple extra cases because they are just too important to exclude). The decisions are not listed in rank order but, rather, grouped by subject-matter where possible.

1. R v. Comeau, 2018 SCC 15

   In R v Comeau, (popularly known as the "free the beer" case), the Supreme Court unanimously upheld the constitutional validity of a New Brunswick law restricting the importation of liquor from other provinces, while also commenting on the proper role of stare decisis in the common law courts.

   Mr. Comeau, who had been arrested after importing a large quantity of beer and liquor into New Brunswick from Quebec, challenged the constitutionality of the NB law on the basis that section 121 of the Constitution Act, 1867 renders section 134(b) of the Liquor Control Act unconstitutional and therefore of no force or effect. Section 121 provides that "All Articles of the Growth, Produce or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the Provinces."

   The New Brunswick Provincial Court found section 134(b) to be of no force and effect against Mr. Comeau and therefore dismissed the charge. In doing so, the trial judge relied on testimony from a historian who opined that the Supreme Court of Canada's interpretation of section 121, set out nearly a century ago in Gold Seal Ltd v Attorney-General for the Province of Alberta (1921), 62 SCR 434, was inconsistent with the intentions of the Constitution's drafters. The need to correct this error, the trial judge held, justified departing from this binding precedent.

   The Court was thus called upon to decide two issues: (1) did the trial judge err in departing from a binding precedent and providing his own interpretation of section 121?; and (2) what is the proper interpretation of section 121?

   With regards to the first issue, the Court noted that departing from vertical stare decisis on the basis of new evidence requires that the new evidence "fundamentally shif[t]" how jurists understand the legal question at issue. The high threshold was not met in this case. While historical evidence can be helpful in interpreting constitutional events, a re-assessment of historical events was not sufficient to constitute "evidence of social change."

   The Court then proceeded to uphold section 134(b) and confirm the provinces' relatively broad authority in enacting trade-restricting legislation. Section 121 does not impose "absolute free trade across Canada", which would render any law restricting free trade and free movement of goods throughout Canada unconstitutional. Instead, in order to be struck down pursuant to section 121, a law must meet two conditions. First, there must be a tariff-like effect on cross-border trade. For example, a complete prohibition or burdensome import licenses would have the same effect as a tariff. Second, impeding trade must be the law's primary purpose.

   The Court found that section 134(b) does function like a tariff, meeting the first condition. However, its primary purpose was to restrict access to anynon-Corporation liquor within the framework of a broader liquor management scheme establishing a provincial monopoly on the sale of liquor within the boundaries of New Brunswick. Thus, section 134(b)'s effect on interprovincial trade is "only incidental in light of the objective." As a result, the second condition was not met and the Court quashed Mr. Comeau's acquittal.

   Comeau upholds the status quo with regards to the regulation of interprovincial trade, while clarifying the scope of section 121's effect. Provinces may restrict imports from other provinces so long as the restriction fits within a broader legislative objective. The Court's comments on stare decisis also confirm the importance of precedent and the circumstances in which trial courts can overturn binding precedent.

2. Reference re Pan Canadian Securities Regulation, 2018 SCC 48

   The federal government and various provincial and territorial governments proposed to implement a national cooperative system for the regulation of capital markets in Canada (the "Cooperative System") with the following four main components:

   Uniform Provincial and Territorial Legislation: A model provincial and territorial statute (the "Model Provincial Act") dealing with the day-to-day aspects of the securities trade; Complementary Federal Legislation: A proposed federal statute (the "Draft Federal Act") aimed at preventing and managing systemic risk and establishing criminal offences relating to financial markets; A National Regulator: A national securities regulator (the "Authority") charged with administering this coordinated regime. The Authority would also have the power to make regulations under the supervision of the Council of Ministers. The Council of Ministers: The Authority and its Board of Directors would operate under the supervision of a Council of Ministers, comprised of the ministers responsible for capital markets regulation in each participating province and the federal Minister of Finance. The system's framework was set out in an agreement (the "Memorandum") between the participating governments. The Memorandum contemplated that the Council of Ministers would play a role in making amendments to the proposed legislative enactments.

   The Government of Québec referred the following two questions pertaining to the proposed Cooperative System to the Québec Court of Appeal:

   Does the Constitution of Canada authorize the implementation of pan-Canadian securities regulation under the authority of a single regulator, according to the model established by the most recent publication of the "Memorandum of Agreement regarding the Cooperative Capital Markets Regulatory System"? Does the most recent version of the draft of the federal "Capital Markets Stability Act" exceed the authority of the Parliament of Canada over the general branch of the trade and commerce power under subsection 91(2) of the Constitution Act, 1867? A majority of the Québec Court of Appeal answered both questions in the negative. Various provinces appealed this decision: the Attorney General of Canada appealed on both questions; the Attorney General of British Columbia appealed on the first question; and the Attorney General of Québec appealed on the second question.

   The Supreme Court of Canada unanimously held that question 1 should be answered in the affirmative and question 2 should be answered in the negative, thereby upholding the proposed national cooperative system.

   Question 1

   The Supreme Court of Canada held that the Constitution authorized the implementation of pan-Canadian securities regulation under the authority of a single regulator in accordance with the terms set out in the Memorandum. The Cooperative System does not improperly fetter the legislatures' sovereignty. The principle of parliamentary sovereignty preserves the provincial legislatures' right to enact, amend and repeal their securities legislation independently of the Council of Ministers' approval. As such, the legislatures remain free to reject the proposed statutes and any amendments. The Court also concluded that the Cooperative System does not involve an impermissible delegation of law-making authority. The Council of Minister's role in approving amendments to the Model Provincial Act is different from the delegation of primary legislative authority. As the provisions of the Model Provincial Act will only have the force of law if they are properly enacted by the legislature of a province, the Council of Ministers remained subordinate to the sovereign will of the legislature.

   Question 2

   After conducting the two-stage analytical framework for the review of legislation on federalism grounds, the Supreme Court of Canada concluded that the proposed Draft Federal Act was intra vires as within Parliament's power over trade and commerce under s. 91(2) of the Constitution Act, 1867.

   On the question of characterization, the Court held that the pith and substance of the Draft Federal Act was to control systemic risk having the potential to create material adverse effects on the Canadian economy. With respect to classification, the Court relied on the framework established...