June 25, 1940 (19th Parliament, 1st Session)

Right Hon. ERNEST LAPOINTE (Minister of Justice) moved:

Whereas the Employment and Social Insurance Act, 1935, a statute of the parliament of

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Canada which, in substance, provided for a system of compulsory unemployment insurance throughout Canada, has been held by the Judicial Committee of the Privy Council to be ultra vires of the parliament of Canada;
And whereas, if a uniform and effective system of compulsory unemployment insurance is to be adopted throughout Canada, it will be necessary to amend the British North America Act, 1867, to enable the parliament of Canada to enact the necessary legislation;
A humble Address be presented to His Majesty the King, in the following words:
To the King's Most Excellent Majesty:
Most Gracious Sovereign:
We, Your Majesty's most dutiful and loyal subjects, the Commons of Canada, in parliament assembled, humbly approach your majesty praying that you may graciously be pleased to cause a measure to be laid before the parliament of the United Kingdom to amend the British North America Act, 1867, and that such measure be expressed as follows:
An act to amend the British North America Act, 1867, relating to unemployment insurance.
Whereas the Senate and Commons of Canada in parliament assembled have submitted an address to His Majesty praying that his majesty may graciously be pleased to cause a measure to be laid before the parliament of the United Kingdom for the enactment of the provisions hereinafter set forth:
Be it therefore enacted by the King's Most Excellent Majesty by and with the advice and censent of the Lords Spiritual and Temporal, and Commons, in this present parliament assembled, and by the authority of the same, as follows:
1. Section ninety-one of the British North America Act, 1867, is amended by adding thereto as class 2A the following:
''2A. Unemployment insurance." and inserting such class in the enumeration of the classes of Subjects set forth in section ninety-one aforesaid, immediately after class two.
2. This act may be cited as the British North America Act, 1940, and the British North America Acts, 1867 to 1930, the British North America Act, 1907, and this act may be cited together as the British North America Acts, 1867 to 1940.
He said: Mr. Speaker, I need not refer to the desirability or even necessity of any scheme of unemployment insurance being national in its scope, because this parliament in 1935 recognized that fact by enacting legislation providing for a system of compulsory unemployment insurance. Since then many provinces and public bodies have signified their views in this matter, and more particularly before the royal commission on dominion-provincial relations, where in their briefs the provinces of Manitoba, Nova Scotia, Prince Edward Island, Saskatchewan and British Columbia specially mentioned the subject.
Various other public bodies such as the Edmonton Chamber of Commerce, the Canadian Manufacturers Association, the Trades and Labour Congress of Canada and similar associations have signified not only that they favoured such an insurance scheme but that in order to be effective it should be national in scope.
The privy council has ruled that this parliament at present does not possess the necessary jurisdiction to enact a national unemployment insurance scheme. I shall read only the concluding words of the decision of the privy council on their reference to it of the unemployment insurance act which passed this parliament in 1935:
If on the true view of the legislation it is found that in reality in pith and substance the legislation invades civil rights within the province or in respect of other classes of subjects otherwise encroaches upon the provincial field, the legislation will be invalid. To hold otherwise would afford the dominion an easy passage into the provincial domain. In the present case their lordships agree with the majority of the supreme court in holding that in pith and substance this act is an insurance act affecting the civil rights of employers and employed in each province, and as such is invalid.
I have referred to the royal commission on dominion-provincial relations. In its report the commission says, at page 39:
It is not surprising, therefore, that it has been generally recognized that if unemployment insurance is to be successful in Canada it must be on a national basis. The national employment commission emphasized that "there are great, indeed decisive, advantages in a national, in contrast to a provincial, system" of unemployment insurance. The Commission des Assurances Sociales de Quebec, as early as 1933, pointed out that, although it is possible for member states in a federation to have schemes of their own, "nevertheless elementary prudence urges us to give a federal character to insurance against unemployment." In a memorandum submitted to the executive council of the province of Quebec in February, 1939, by the Confederation des Travailleurs Catholiques du Canada, Inc., the following paragraph appears: "La C.T.C.C. tient 4 redire au gou-vernement federal qu'elle est en faveur d'un systeme d'assurance-chomage 4 base contribu-toire. . .notamment, en faveur d'une assurance-ehomage contributoire, etablie sur le plan national, suivant les recommandations de la Commission des Assurances sociales."
After careful examination we are convinced that a system of unemployment insurance can be established which will in no way interfere with the provisions of the Quebec civil code concerning labour contracts and contracts of hiring. In our public hearings representations from most provinces and from many public bodies supported the view that unemployment insurance should be within the jurisdiction of the dominion parliament. We have no hesitation in so recommending.
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Ever since the decision of the privy council it has been the intention that parliament should acquire the necessary power to enact a bill of the kind which will be introduced when the address is voted in this parliament and the necessary amendment made at Westminster to the British North America Act. Always we have tried to get the approval of the several provinces to an amendment of this kind, but it is only recently that unanimity has been signified in the matter. The objection which was raised by certain provinces, and more particularly in my own province by the then premier, was that it would be possible to establish unemployment insurance by concurrent or enabling legislation of the provinces as well as of the dominion. Needless to say we should have been very glad to accept that view had we thought that such a course was feasible, but the views of the officers of the crown have always been that this could not be done. When it is said, for instance, that old age pensions have been established by way of concurrent legislation, I would point out that there is all the difference in the world because we merely contribute to the amount which is spent by the various provinces for old age pensions; we contribute as much as seventy-five per cent, but there is no provision for contributions by employers and employees, and there is not the same necessity for our invading the provincial jurisdiction as there would be in establishing a scheme of unemployment insurance. The two cases are altogether different. Indeed if, as has often been suggested and even recommended by labour unions, the old age pensions scheme should be made a contributory one, the British North America Act would have to be amended to provide for a national contributory scheme.
As to the methods of cooperation in the legislative field which we have considered one after the other, the first that suggests itself is for the provinces to delegate to parliament their powers in relation to unemployment insurance. But there are several objections to that. It is extremely doubtful that such delegation would be legally effective, because by such action parliament cannot acquire jurisdiction. Lord Watson is reported to have observed during the argument of Canadian Pacific Railway Company v. Notre-Dame de Bon Secours, (1899) A.C. 367:
I think we must get rid of the idea that either one or other (parliament or the provincial legislature) can enlarge the jurisdiction of the other or surrender jurisdiction.
In the case of the Live Stock and Live Stock Products Acts, this method of delegation was resorted to and the courts have held the cooperative scheme to be unconstitutional.

The provincial legislature may delegate its legislative powers, as has recently been held by the privy council in the case of Shannon v. Lower Mainland Dairy, and, conceivably, some central body, say the dominion commission, could be vested with legislative power by each of the nine provinces. But I think, first, that most of the provinces would strongly object to delegating such a power to a body not responsible to them.
Secondly, there is the objection that at any time any province may withdraw the power that she has delegated. A third objection is that the sum total of provincial powers is probably insufficient, constitutionally, to establish a national system. For instance, can Quebec raise money by a levy which may be used to pay benefits outside of Quebec? If Quebec cannot do so then its delegate on the federal commission, as I have mentioned, could not, merely by reason of the fact that it is the delegate also of eight other provinces.
Other recognized methods of cooperation are known as legislation by reference, conjoint legislation and conditional legislation.
The first two are almost identical. The first is a method whereby parliament enacts a statute which is then adopted by the provinces by reference. By the second mode of procedure both parliament and the legislature would enact the same act in the same terms. These two methods have been resorted to when doubt exists as to which legislature, the central or the local, has authority. The danger of this reasoning lies in the possibility that both statutes may be invalid because each exceeds the power of the enacting legislature. The example I have given of Quebec having no right to levy taxes within the province to be used to pay expenditure in the rest of Canada applies here. Such a taxing provision would be unconstitutional, just as a dominion act to impose taxation on Quebec citizens to be spent in Quebec would be invalid. Another objection is that in the enforcement of the law a difficulty would arise as to which one of the two statutes should be used and we might select the one which the court would declare unconstitutional. Then again, in the case of legislation by reference the provincial act would be bad if the dominion act was bad, since the latter was a nullity and the provincial act based on it would also be a nullity.
Conditional legislation is another mode of procedure, whereby legislation of a legislature operates upon the fulfilment of a condition. For instance, if all the nine provinces were enacting a similar insurance scheme in identical terms which would become operative as the

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result of some dominion action, namely by parliament or by the governor in council, the " condition " would be the dominion action. The insurance conditions and the levy would be provided for by the provincial legislatures, while the dominion, in addition to bringing the nine provincial statutes into force on a given date, would establish a central commission and would provide funds for administrative expenses. All the objections which I have submitted to the other modes of operation apply also to this one; and I am afraid, and it is also the view of the officers of the crown, that there would be danger in respect of constitutionality which would not justify the parliament of Canada in entering, before being sure of its validity, upon a big undertaking which would cost millions of money.
I have spoken only of the legal side. There are also practical objections which I desire to mention.
1. You would have to get the concurrence of nine legislatures each of which will, quite properly, have its own ideas, influenced by local requirements, as to the proper provisions of an unemployment insurance act.
2. You must hold this concurrence through the difficult first years of the application of the act, when, by practice and experience, amendments will be found desirable; and then you would have to have in each case the consent of every one of the nine legislatures before proposing these amendments.
3. You must persuade nine provinces to submit to administration by a body which is not responsible to them.
4. The necessary levy to provide insurance benefits must be imposed on the clear understanding that the funds raised thereby and turned over to the commission are to be utilized to pay benefits throughout Canada. The result might be, for example, that Quebec contributions would, in certain circumstances, be utilized to pay benefits outside Quebec.
The final and the most important objection of all is that there is nothing to prevent one or two or three provinces from withdrawing from the scheme and then the whole undertaking would be compromised.
I believe I have sufficiently shown that we cannot proceed to introduce a bill to establish unemployment insurance in Canada without resorting to the application for an amendment, which is a very simple one, to the British North America Act, and to which now fortunately all the provinces agree, so that this parliament shall be invested with full power; then the bill will be introduced.