E. The Canadian Economic Union and the Constitution
| Author | Patrick J. Monahan - Byron Shaw |
| Pages | 316-323 |
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The issue of interprovincial barriers to trade within the Canadian economic union has been a recurring issue on the Canadian political agenda. In 1994, the government of Canada and the governments of the provinces and territories signed the Agreement on Internal Trade,111designed to re-
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duce or eliminate these barriers. The agreement itself has been a mixed success.112It is not legally enforceable and has led to minimal changes in federal and provincial laws and regulations. Given its limited success, the question arises whether Parliament possesses sufficient authority to legislate directly so as to reduce or eliminate barriers to internal trade within Canada. This, in turn, raises the question of whether Parliament has the constitutional jurisdiction to legislate to enhance the proper and efficient functioning of the Canadian economic union.
For most of the first century after Confederation, the courts in Canada and in England evinced little concern over the effect that constitutional jurisprudence might have on the proper functioning of the Canadian economic union. However, two important Supreme Court cases have recognized that maintaining and strengthening the Canadian economic union is a key principle underlying the Canadian constitutional framework. The cases have also expressly stated that Parliament has the legislative authority to enact legislation designed to enhance the functioning of the economic union.
We have already examined Morguard Investments Ltd. v. De Savoye113 and Hunt v. T & N plc114in the context of Parliament’s peace, order, and good government power in Chapter 8. The cases are also relevant in terms of the scope of the federal trade and commerce power. In Mor-guard, La Forest J. concluded that a regime of mutual recognition of judgments across the country "is inherent in a federation." He also stated that the "integrating character of our constitutional arrangements" may have important implications for the division of legislative authority between Parliament and the provincial legislatures. La Forest J. identified certain key elements of the Canadian constitutional framework that are directed to the creation of a single country:
A common citizenship ensured the mobility of Canadians across provincial lines, a position reinforced today by s. 6 of the Charter. ... In particular, significant steps were taken to foster economic integration. One of the central features of the constitutional arrangements incorporated in the Constitution Act, 1867 was the creation of a common market. Barriers to interprovincial trade were removed by s. 121.
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Generally trade and commerce between the provinces was seen to be a matter of concern to the country as a whole; see Constitution Act, 1867, s. 91(2). The Peace, Order and Good Government clause gives the federal Parliament powers to deal with interprovincial activities.... And the combined effect of s. 91(29) and s. 92(10) does the same for interprovincial works and undertakings.115
In Hunt, La Forest J. expanded on Morguard. He held that a provincial "blocking" statute that prohibited the removal of documents relating to a business concern in Quebec was constitutionally inapplicable to other provinces. La Forest J. began by noting that legal systems and rules must respect the diversity of societies and differences in legal systems. But respect for diversity must be tempered by the need to coordinate diversity, since the failure to ensure coordination will mean that "the anarchic system’s worst attributes emerge, and individual litigants will pay the inevitable price of unfairness." La Forest J. stated that the rules developed in the context of private international law may well be inappropriate in the context of a federal system. The legal rules applicable between the constituent units in Canada must take account of the "legal interdependence under the scheme of confederation established in 1867."116La Forest J. then explored the significance of the Morguard case. The main objective of the Morguard decision was to reform certain common law rules regarding recognition and enforcement of judgments, which were "rooted in an outmoded conception of the world that emphasized sovereignty and independence, often at the cost of unfairness." These rules were said to be unsuited to a modern era "when international transactions involve a constant flow of products, wealth and people across the globe."117Moreover, La Forest J. stated that these outmoded rules are particularly inappropriate within the context of the Canadian federation, referring to, among other things, "the common market created by the union":
Among the factors I identified [in Morguard] that would also support a more cooperative spirit in recognition and enforcement were (1) common citizenship, (2) interprovincial mobility of citizens, (3) the common market created by the union as reflected in ss. 91(2), 91(10), 121 and the peace, order and good government clause, and (4) the essentially unitary structure of our judicial system with the Supreme Court of Canada at its apex.118
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