Canadian Western Bank et al. v. Alberta, 2005 ABCA 12

• Judge: McFadyen, Hunt and Berger, JJ.A.
• Court: Court of Appeal (Alberta)
• Case Date: January 14, 2005
• Citations: 2005 ABCA 12;(2005), 361 A.R. 112 (CA)

Can. Western Bk. v. Alta. (2005), 361 A.R. 112 (CA);

    339 W.A.C. 112

MLB headnote and full text

Temp. Cite: [2005] A.R. TBEd. JA.113

Canadian Western Bank, Bank of Montreal, Canadian Imperial Bank of Commerce, HSBC Bank Canada, National Bank of Canada, Royal Bank of Canada, The Bank of Nova Scotia and The Toronto-Dominion Bank (appellants/applicants) v. Her Majesty The Queen in Right of Alberta (respondent/respondent) and Alberta Insurance Council and Canadian Life and Health Insurance Association (intervenors)

(0303-0317-AC; 2005 ABCA 12)

Indexed As: Canadian Western Bank et al. v. Alberta

Alberta Court of Appeal

McFadyen, Hunt and Berger, JJ.A.

January 14, 2005.

Summary:

The Bank Act empowered federally chartered banks to promote an "authorized type of insurance". The Alberta Insurance Act and its Regulations regulated the sale of insurance ancillary to other goods and services, requiring banks promoting insurance to obtain a "restricted insurance agent's certificate of authority" and subjecting banks to certain market standards regulations. The banks challenged the constitutionality of those portions of the Insurance Act that would permit the province to regulate federally chartered banks. The banks submitted that the Insurance Act, while valid provincial legislation under the property and civil rights power, encroached upon the core activity of banking and was, accordingly, inapplicable to banks on the basis of the doctrine of interjurisdictional immunity. Alternatively, the banks argued that the doctrine of paramountcy made the provincial legislation inapplicable to the promotion of insurance by banks. The banks applied for a declaration that they were immune from the provincial regulatory scheme.

The Alberta Court of Queen's Bench, in a judgment reported (2004), 343 A.R. 89, dismissed the application. Federally chartered banks, in promoting authorized types of insurance as permitted by the Bank Act, were subject to the regulatory scheme of the Alberta Insurance Act and Regulations. The challenged provisions of the Act were valid provincial legislation under the province's property and civil rights power (Constitution Act, 1867, s. 92(14)). The doctrine of interjurisdictional immunity was inapplicable, because the promotion of authorized insurance was not at the "core" of banking; it was not part of the "basic, minimum or unassailable" aspects of that function. The paramountcy doctrine was also inapplicable. There was no operational conflict between federal legislation empowering banks to promote insurance and provincial legislation making banks subject to provincial regulation. The banks appealed.

The Alberta Court of Appeal dismissed the appeal.

Banks and Banking - Topic 1204

Powers of banks - Scope of "business of banking" - [See Constitutional Law - Topic 7286 ].

Constitutional Law - Topic 2511

Determination of validity of statutes or acts - General principles - Interjurisdictional immunity - [See Constitutional Law - Topic 7286 ].

Constitutional Law - Topic 3614

Paramountcy of federal statutes - Overlapping legislation - Conflict - What constitutes - [See Constitutional Law - Topic 7286 ].

Constitutional Law - Topic 6161

Federal jurisdiction (s. 91) - Banking - General - [See Constitutional Law - Topic 7286 ].

Constitutional Law - Topic 7286

Provincial jurisdiction (s. 92) - Property and civil rights - Regulatory statutes - Insurance business - The Bank Act empowered federally chartered banks to promote authorized insurance - The Alberta Insurance Act regulated the sale of insurance ancillary to other goods and services, requiring banks to obtain a "restricted insurance agent's certificate of authority" and subjecting them to certain market standards regulations - The banks challenged the constitutionality of those portions of the Insurance Act purporting to regulate federally chartered banks - The banks submitted that the Insurance Act, while valid provincial legislation under the property and civil rights power, encroached upon the core activity of banking and was, accordingly, inapplicable to banks on the basis of the doctrines of interjurisdictional immunity or paramountcy - The trial judge dismissed the banks' application for a declaration that they were immune from the provincial regulatory scheme - Federally chartered banks, in promoting insurance as permitted by the Bank Act, were subject to the regulatory scheme of the Alberta Insurance Act - The challenged provisions were valid provincial legislation under the province's property and civil rights power (Constitution Act, 1867, s. 92(14)) - The doctrine of interjurisdictional immunity was inapplicable, because the promotion of insurance was not at the "core" of banking; it was not part of the "basic, minimum or unassailable" aspects of that function - The paramountcy doctrine did not apply where there was no operational conflict between the federal and provincial legislation - The Alberta Court of Appeal affirmed the decision.

Cases Noticed:

Citizens Insurance Co. of Canada v. Parsons (1881), 7 App. Cas. 96 (P.C.), refd to. [para. 32].

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1; 2002 SCC 33, refd to. [para. 38].

Bank of Nova Scotia et al. v. Superintendent of Financial Institutions (B.C.) et al. (2003), 178 B.C.A.C. 118; 292 W.A.C. 118; 11 B.C.L.R.(4th) 206; 2003 BCCA 29, leave to appeal refused, [2003] S.C.C.A. No. 229, disagreed with [para. 42].

Bell Canada v. Commission de la santé et de la sécurité du travail (Qué.) and Bilodeau et al., [1988] 1 S.C.R. 749; 85 N.R. 295; 15 Q.A.C. 217, refd to. [paras. 43, 121].

Montcalm Construction Inc. v. Minimum Wage Commission (Que.) et al., [1979] 1 S.C.R. 754; 25 N.R. 1, refd to. [para. 45].

Air Canada v. Liquor Control Board (Ont.) et al., [1997] 2 S.C.R. 581; 214 N.R. 1; 102 O.A.C. 1, refd to. [para. 45].

Ordon et al. v. Grail, [1998] 3 S.C.R. 437; 232 N.R. 201; 115 O.A.C. 1, refd to. [paras. 46, 121].

Mississauga (City) v. Greater Toronto Airports Authority et al. (2000), 138 O.A.C. 1; 50 O.R.(3d) 641 (C.A.), refd to. [para. 48].

Paul v. Forest Appeals Commission (B.C.) et al., [2003] 2 S.C.R. 585; 310 N.R. 122; 187 B.C.A.C. 1; 307 W.A.C. 1; 2003 SCC 55, refd to. [para. 49].

Bank of Montreal v. Hall, [1990] 1 S.C.R. 121; 104 N.R. 110; 82 Sask.R. 120, refd to. [paras. 52, 133].

Burrardview Neighbourhood Association v. Vancouver (City) et al., [2004] 7 W.W.R. 27; 194 B.C.A.C. 78; 317 W.A.C. 78; 2004 BCCA 104, leave to appeal granted, [2004] S.C.C.A. No. 185, refd to. [para. 54].

Morgan v. Prince Edward Island (Attorney General), [1976] 2 S.C.R. 349, refd to. [para. 63].

Bank of Toronto v. Lambe (1887), 12 App. Cas. 575 (P.C.), refd to. [para. 63].

Tenant v. Union Bank of Canada, [1894] A.C. 31 (P.C.), refd to. [para. 68].

Alberta (Attorney General) v. Canada (Attorney General), [1947] A.C. 503 (P.C.), refd to. [para. 68].

Turgeon v. Dominion Bank, [1930] S.C.R. 67, refd to. [para. 68].

Canadian Pioneer Management Ltd. et al. v. Labour Relations Board (Sask.) et al., [1980] 1 S.C.R. 433; 31 N.R. 361; 2 Sask.R. 217, refd to. [para. 70].

Multiple Access Ltd. v. McCutcheon et al., [1982] 2 S.C.R. 161; 44 N.R. 181, refd to. [para. 89].

M & D Farm Ltd. et al. v. Manitoba Agricultural Credit Corp., [1999] 2 S.C.R. 961; 245 N.R. 165; 138 Man.R.(2d) 161; 202 W.A.C. 161, refd to. [para. 93].

114957 Canada Ltée (Spraytech, Société d'arrosage) et al. v. Hudson (Town), [2001] 2 S.C.R. 241; 271 N.R. 201; 2001 SCC 40, refd to. [para. 94].

Law Society of British Columbia v. Mangat, [2001] 3 S.C.R. 113; 276 N.R. 339; 157 B.C.A.C. 161; 256 W.A.C. 161; 2001 SCC 67, refd to. [paras. 97, 121].

Rothmans, Benson & Hedges Inc. v. Saskatchewan et al., [2004] 3 W.W.R. 589; 238 Sask.R. 250; 305 W.A.C. 250; 2003 SKCA 93, refd to. [para. 98].

Reference Re Firearms Act (Can.), [2000] 1 S.C.R. 783; 254 N.R. 201; 261 A.R. 201; 225 W.A.C. 201; 2000 SCC 31, refd to. [para. 102].

Roncarelli v. Duplessis, [1959] S.C.R. 121, refd to. [paras. 112, 135].

City National Leasing Ltd. v. General Motors of Canada Ltd., [1989] 1 S.C.R. 641; 93 N.R. 326; 32 O.A.C. 332, refd to. [para. 121].

Ontario Public Service Employees' Union et al. v. Ontario (Attorney General) et al., [1987] 2 S.C.R. 2; 77 N.R. 321; 23 O.A.C. 161, refd to. [para. 121].

Statutes Noticed:

Bank Act, S.C. 1991, c. 46, sect. 409(1), sect. 409(2), sect. 416(1), sect. 416(2), sect. 416(4) [para. 28].

Bank Act Regulations (Can.), Insurance Business (Banks and Bank Holding Companies) Regulations, SOR/92-330, sect. 2, sect. 5(1), sect. 7(1) [para. 28].

Insurance Act, R.S.A. 2000, c. I-3, sect. 1(n), sect. 1(bb), sect. 454(1)(a), sect. 454(2), sect. 468(1), sect. 482 [para. 28].

Insurance Act Regulations (Alta.), Insurance Agents and Adjusters Regulation, Reg. 122/2001, sect. 12, sect. 13, sect. 14, sect. 15, sect. 16, sect. 17, sect. 18 [para. 28].

Insurance Agents and Adjusters Regulation - see Insurance Act Regulations (Alta.).

Insurance Business (Banks and Bank Holding Companies) Regulations - see Bank Act Regulations (Can.).

Authors and Works Noticed:

Canada, Department of Finance, Reforming Canada's Financial Sevices Sector: A Framework for the Future (1999), generally [para. 101].

Canada, Standing Committee on Finance, The Future Starts Now: A Study on the Financial Services Sector in Canada, (1998), generally [para. 101].

Canada, Standing Senate Committee on Banking, Trade and Commerce, Sixteenth Report of the Committee (1985), generally [para. 109].

Canada, Task Force on the Future of the Canadian Financial Services Sector, Report of the Task Force: Change, Challenge and Opportunity (MacKay Task Force Report) (1998), paras. 83, 95 to 97 [para. 21].

Hogg, Peter W., Constitutional Law of Canada (3rd Ed. 1992), p. 402 [para. 121].

Hogg, Peter W., Constitutional Law of Canada (4th Ed. 1997) (Looseleaf), pp. 5-21 [para. 61]; 15-7 [para. 102]; 15-8 [para. 63]; 16-6 [para. 98]; 23-2 [para. 35]; 57-2 [para. 102].

MacKay Task Force Report - see Canada, Task Force on the Future of the Canadian Financial Services Sector, Report of the Task Force: Change, Challenge and Opportunity.

Mitchell, Graeme, Developments in Constitutional Law: The 2001-2002 Term (2002), 18 S.C.L.R.(2d) 75, p. 142 [para. 98].

Counsel:

N. Finkelstein, J. Galway and C. Beagan Flood, for the appellants;

R.J. Normey and L.C. Enns, for the respondents;

R.D. Gibson and K.L. Hurlburt, for the intervenor, Alberta Insurance Council;

D.J. Wilson and R.B. White, Q.C., for the intervenor, Canadian Life and Health Insurance Association.

This appeal was heard on June 11, 2004, before McFadyen, Hunt and Berger, JJ.A., of the Alberta Court of Appeal.

The judgment of the Court of Appeal was delivered on January 14, 2005, when the following opinions were filed:

Hunt, J.A. (McFadyen, J.A., concurring) - see paragraphs 1 to 118;

Berger, J.A., concurring reasons - see paragraphs 119 to 136.