Labatt Breweries of Canada Ltd. v. Attorney General of Canada, [1980] 1 S.C.R. 914 (1979)

Supreme Court of Canada

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Labatt Breweries of Canada Ltd. v. Attorney General of Canada, [1980] 1 S.C.R. 914 (1979)

Supreme Court of Canada

Labatt Breweries of Canada Ltd. v. Attorney General of Canada, [1980] 1 S.C.R. 914

Date: 1979-12-21

Labatt Breweries of Canada Limited (Plaintiff) Appellant;

and

The Attorney General of Canada (Defendant) Respondent;

and

The Attorney General of the Province of Quebec Intervenant.

1979: June 27, 28; 1979: December 21.

Present: Laskin C.J. and Martland, Ritchie, Pigeon, Dickson, Beetz, Estey, Pratte and Mclntyre JJ.

ON APPEAL FROM THE FEDERAL COURT OF APPEAL

Food and drugs-Standards for labelling-Beer labelled "Special Lite"-Likely to be mistaken for "Light Beer"-Food and Drugs Act, R.S.C. 1970, c. F-27, ss. 6, 25(1)-Food and Drug Regulations, C.R.C., c. 870, ss. B.02.130 to B.02.135.

Constitutional law-Food and Drugs Act-Invalidity of provisions establishing standards for beer-British North America Act, 1867, ss. 91, 91(2), 91(27), 92(13)-Food and Drugs Act, R.S.C. 1970, c. F-27, ss. 6, 25(1)-Food and Drug Regulations, C.R.C., c. 870, ss. B.02.130 to B.02.135.

The appellant began marketing a new brand of beer which it labelled "Labatt's Special Lite". The product contained 4 per cent alcohol (as indicated on the label) whereas according to the standard prescribed by the Food and Drug Regulations a "Light Beer" should contain no more than 2.5 per cent alcohol. The appellant sought a declaration that its product "is not likely to be mistaken for a light beer within the standard set out" in regulation B.02.134 enacted pursuant to s. 25(1)(c) of the Food and Drugs Act. The trial judge found that the appellant had not violated s. 6 of the aforesaid Act and granted the declaration. The Federal Court of Appeal came to the opposite conclusion and set aside the judgment of the Trial Division. Hence the appeal to this Court on two questions: (1) Whether appellant violated s. 6 of the Food and Drugs Act; (2) Whether ss. 6 and 25(1)(c) of the Act and regulations B.02.130 to 135 inclusive were constitutionally valid.

Held by Martland, Ritchie, Dickson, Beetz and Estey JJ. (Laskin C.J. and Pigeon and Mclntyre JJ. dissenting): The appeal should be allowed with costs and a declaration issue that s. B.02.130 to B.02.135 of the Food and Drug Regulations are invalid and that ss. 6 and 25(1)(c) of the Food and Drugs Act are ultra vires Parliament in so far as they relate to malt liquors. Held by Pratte J.: The appeal should be allowed with costs and the judgment of the trial judge restored.

Per Martland, Dickson, Beetz and Estey JJ.: The sale of Labatt's Special Lite Beer, unless labelled simply as "beer", being the common name prescribed for use with reference to a product which conforms to the standards of beer as prescribed in the regulations, is a violation of s. 6 of the statute, without more. Here the appellant, by the adoption of the coined word "lite" and by associating it with the common name "beer" to produce a phonetic equivalent to another food, "light beer", whose prescribed common name is "light beer" has sold as a light beer a product which conforms not with regulation B.02.134 (which describes a "Light Beer") but which conforms with B.02.130 (which describes a "Beer"). The description "lite beer" must, in the ordinary usage of the language today, be synonymous with light beer, and the appellant's product, having an alcoholic content of 4 per cent, does not conform with the standards prescribed.

As to the constitutional issue it requires an answer to the following question: what is the constitutional basis for the enactment by Parliament of the contested portions of the Act? The possible sources of this sovereign power include the federal authority under s. 91 of the B.N.A.Act in respect of criminal law, trade and commerce, and peace, order and good government.

Firstly there is no basis for the detailed regulation of the brewing industry in the production and sale of its product as a proper exercise of the federal authority in criminal law. Similarly the jurisdiction of Parliament in matters related to health, considered as an aspect of criminal law, has no application here.

Secondly the trade and commerce head of s. 91 of the B.N.A.Act cannot be applied to the regulation of a single trade, even though it be on a national basis. Here we are concerned with the proper regulatory authority in connection with the production process of a single industry and, to some extent, with the sale of its products, the latter being concerned largely with the use of labels or identification. Nowhere are the impugned statutory regulations or provisions concerned with the control or regulation of the extra-provincial distribution of these products or their movement through any channels of trade. On the contrary, their main purpose is the regulation of the brewing process itself by means of a "legal recipe". Even if the Food and Drugs Act were to cover a substantial portion of Canadian economic activity, one industry or trade at a time, by a varying array of regulations or trade codes applicable to each i...

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