CANADIAN FEDERALISM'S UNDERLYING QUESTION: WHAT IT IS AND WHY IT MATTERS.

• Author: Wright, Wade K.

The text of the federal-provincial division of powers in sections 91 to 95 of the Constitution Act, 1867 (1) seems to place a premium on exclusive jurisdiction. (2) It explicitly confers overlapping (or concurrent) jurisdiction over only four subjects. (3) It also indicates explicitly, several times, that jurisdiction over the subjects listed in the many other heads of legislative power is conferred "exclusively". (4) And yet, there is now a good deal of jurisdictional overlap in Canada's federal system--much more than the text of the division of powers seems to contemplate. (5) This is true of the division of powers as it functions in practice, outside of the courts, but also as it is interpreted and applied by the courts. Even so, jurisdictional

exclusivity has not been abandoned altogether, at least by the courts. (6) As a result, the courts' division of powers decisions now exhibit a complex mixture of exclusivity and overlap, with the balance between the two varying over time, and the specific policy context. (7)

One key corollary of this constitutional development is that, in division of powers cases, the courts now regularly confront what this paper calls federalism's underlying question. This underlying question consists of two fundamental choices--a choice between exclusive and overlapping jurisdiction (and/or perhaps law), and a closely interrelated choice between regulatory unity and diversity. (8)

The increase in overlapping regulatory spaces described earlier has been acknowledged and debated by the courts and legal scholars for decades, as have the judicial doctrines and decisions associated with it. (9) And yet, in writing about this development, the courts and legal scholars have often neglected the important role that the underlying question has come to play in the courts' decision making in individual division of powers cases. (10) Moreover, the courts and legal scholars tend to write as if there is (or should be) "one theory to rule them all" (11)--including a uniform level of exclusivity or overlap, and regulatory unity or diversity, across different policy contexts. As a result, even when the underlying question is somehow acknowledged, it is typically treated in an abstract, acontextual way, neglecting the context-specific approach that the courts have adopted to it. A few legal scholars--Bruce Ryder in particular--have discussed this context-specific approach, but their work is the exception and is generally not recent. (12) We thus lack a framework for thinking about the underlying question, as well as a fully developed account of why it now plays such a key role and the implications it holds for the federal system and the role of the courts within it.

This gap in the legal scholarship about the underlying question has taken on renewed significance in recent years. For several decades, the Supreme Court of Canada largely refrained from imposing limits on federal and provincial jurisdiction. (13) It thus increasingly seemed that the context-specific approach that Ryder and a few other astute observers identified in earlier decisions had been abandoned in favour of an approach that uniformly favoured overlap and regulatory diversity over exclusivity and regulatory unity, regardless of the policy context. (14) If this approach had prevailed, the underlying question would have significantly decreased in importance. (15) In recent years, though, the Court has re-embraced some jurisdictional limits. (16) However, once again, it has not done so uniformly. It has again adopted a context-specific approach, embracing varying levels of exclusivity and overlap, and regulatory unity and diversity, in different policy contexts. (17) The underlying question has thus assumed renewed importance. Yet, even so, it continues to be neglected. (18)

The importance of the underlying question is evident in two significant recent division of powers controversies. The first involves several challenges to the federal government's carbon pricing scheme, a central plank of its plan to address climate change. (19) The second involves several challenges to different provincial laws and municipal decisions that all relate (directly or indirectly) to the Trans Mountain Expansion Project, a controversial oil pipeline project linked to Alberta's oil sands. (20) These challenges all engage an iteration of the underlying question, pitting claims of federal exclusivity (in the case of the pipeline challenges) or provincial exclusivity (in the case of the carbon pricing scheme) against claims of overlap.

This paper aims to fill the gap in the legal scholarship about the underlying question, by describing what it is and why it matters. In doing so, it highlights the vital role the underlying question now plays in the courts' decisions, and the federal system more broadly. It also highlights the context-specific approach that the courts have adopted to the underlying question, by favouring varying levels of exclusivity and overlap, and regulatory unity and diversity, in different policy contexts.

The paper is organized in four parts. Part I provides essential background for this paper's discussion of the underlying question by defining key terms. Part II addresses why the underlying question has come to play such an important role in the courts' decisions and why they nonetheless seem inclined to neglect it. Part III identifies what the underlying question is and how it manifests in the courts' decisions. It sets out a framework that captures its central features, then offers a partial sketch of what factors seem to drive the courts' responses to it, and concludes with several case studies that reveal its actual impact. Part IV addresses why an understanding of the underlying question matters.

Two key caveats should be noted at the outset. First, this paper is largely descriptive and analytical in orientation, not prescriptive. It does not consider whether--or how--the underlying question should inform the decisions of the courts in division of powers cases. It also does not address what should influence the decision making of the courts when they encounter the underlying question. A discussion of these prescriptive questions is outside the scope of this paper and so is left to future work. This paper seeks to start a conversation about the underlying question by unpacking its role and its implications for the federal system and the role of the courts within it.

Second, this paper does not argue that the two choices associated with the underlying question fully explain the division of powers decisions of the courts. It claims, more modestly, that once we bring the underlying question into focus, we are, unlike now, at least looking in the right place for answers and can then begin the hard work of determining, among other things, whether a coherent and principled account of the courts' choices is possible--and if so, what it is, or if not, why not.

1. SETTING THE STAGE: DEFINING EXCLUSIVITY AND OVERLAP

   This part sets the stage for the discussion of the underlying question in this paper by defining some of the key terminology that it uses in exploring it. (21)

   Let me start with the notion of jurisdiction. (22) The term "jurisdiction" refers, in this context, to which order of government--the federal Parliament or the provincial legislatures--has the legal power or authority to make (or not make) law in a particular policy context. (23) It speaks, in short, to which of the two gets to decide.

   What do I mean by exclusive and overlapping jurisdiction? Exclusive jurisdiction involves the sole legal power to enact laws dealing with a particular subject, however defined. (24) It both empowers, enabling one order of government to enact laws dealing with a subject, and disempowers, prohibiting the other order from doing so. Overlapping jurisdiction, in contrast, involves the joint or shared legal power to enact laws dealing with a subject. Like exclusive jurisdiction, it operates to empower, but unlike exclusive jurisdiction, it does not also operate to disempower; both orders of government therefore have the required legal power or authority to intervene.

   Exclusivity and overlap can be measured in two ways. They can be measured with reference to the formal legal analysis that is used by the courts in division of powers cases. This can be called the legal approach. They can also be measured with reference to the practical results of the doctrines or decisions that are developed, interpreted, and applied by the courts. This can be called the functional approach.

   This paper adopts the functional approach. It focuses primarily on whether division of powers doctrines or decisions allow federal and provincial laws that are the same or substantially similar in substance (with the exception of the differences in territorial--national versus provincial--reach that are usually involved). The legal approach is not adopted because it can obscure how much overlap results or could result from a legal analysis. Take as an example how exclusivity is understood under the modern approach to the pith and substance doctrine, which is the doctrine used by the courts in determining whether a law is invalid on division of powers grounds. Under the modern approach to the doctrine, exclusivity is understood to allow laws that deal predominantly with a subject that falls within the jurisdiction of the enacting order of government, even if they have "incidental effects... that may be of significant practical importance" on the jurisdiction of the other order of government. (25) If the legal approach was used to determine what exclusivity entails, the potential that this creates for laws to function in the same regulatory space in the same or similar ways would be obscured. (26) The functional approach captures these similarities at the practical level.

   Exclusive and overlapping jurisdiction, understood using this functional approach, can be...