R v Eastern Terminal Elevator Co

R v Eastern Terminal Elevator Co
Supreme Court of Canada
Hearing: 9–10 March 1925 Judgment: 5 May 1925
Full case name	The King v. Eastern Terminal Elevator Co.
Citations	1925 CanLII 82 (SCC) , [1925] SCR 434
Prior history	APPEAL from the judgment of the Exchequer Court of Canada, [1924] ExCR 167
Ruling	Judgment of the Exchequer Court affirmed.
Holding
It is not within the power of Parliament to regulate in the provinces particular occupations by a licensing system and otherwise, and of local works and undertakings, as such, however important and beneficial the ultimate purpose of the legislation may be.
Court Membership
Chief Justice	Anglin CJC
Puisne Justices	Idington, Duff, Mignault and Rinfret JJ
Reasons given
Majority	Duff J, joined by Rinfret J
Majority	Mignault J
Majority	Idington J
Dissent	Anglin CJC

R v Eastern Terminal Elevator Co^[1] is an early constitutional decision of the Supreme Court of Canada on the Constitution's Trade and Commerce power.

Background

The Canada Grain Act was passed in 1912^[2] to control and regulate, through The Board of Grain Commissioners,^[3] the trade in grain. It provided for:

• the licensing of all owners and operators of elevators, warehouses and mills and certain traders in grain;
• the supervision of the handling and storage of grain in and out of elevators, etc.; and
• the prohibition of persons operating or interested in a terminal elevator from buying or selling grain, as well as
• provisions for inspection and grading.

The Act was amended in 1919 by adding s. 95(7) which provided that, if at the end of any crop year in any terminal elevator "the total surplus of grain is found in excess of one-quarter of one per cent of the gross amount of the grain received in the elevator during the crop year," such surplus would be sold for the benefit of the Board.

For the 1920 crop year, Eastern Elevator was determined to have a surplus of 1,107,330 pounds, found in its elevator at Port Arthur, Ontario. The Board commenced an action in the Exchequer Court of Canada to recover the value of such grain, which was calculated to be $43,431. Eastern Elevator, in its defence, pleaded there was no surplus, and that s. 95(7), as well as The Canada Grain Act itself, always were and are now ultra vires of the Parliament of Canada.

At the Exchequer Court

Alexander Kenneth Maclean, President of the Exchequer Court,^[4] confined his ruling to the effect of s. 95(7) only, determining it to be ultra vires.^[5] In stating this, he ruled that:

• it dealt with the right of ownership of the surplus of grain, as well as
• being an attempt to regulate profits or dealings which give rise to profits,

both of which fell within the provincial jurisdiction over property and civil rights.

The ruling was appealed to the Supreme Court.

At the Supreme Court of Canada

The Exchequer Court's ruling was affirmed.

In his ruling, Duff J held that the marketing of grain, even though it was all destined for export (some of the grain stored on the site was for local markets), fell under provincial jurisdiction with respect to property and civil rights.^[6] However, the Parliament of Canada could still assume jurisdiction if it invoked its power with respect to works and undertakings.^[7]

Mignault J, in his ruling, also rejected the idea that the matter could be regarded as a "national emergency" under the residual peace, order and good government power. He also rejected the federal contention that s. 95(7) could be supported under s. 95 of the British North America Act, as it dealt not with agriculture but with a product of agriculture, and therefore was an article of trade.^[8]

Anglin CJC, in dissent, held that the Act could be upheld as a matter of national concern, citing jurisprudence dating back to Russell v. The Queen.^[9]

Impact

Following the decision, the Canada Grain Act was amended to declare all grain elevators in Canada to be federal "works and undertakings" for the general advantage of Canada.^[10]

Eastern Elevator was subsequently cited in 1936 by Duff CJ in his ruling in the Natural Products Marketing Reference,^[11] which was cited with approval by Lord Atkin on appeal to the Privy Council.^[12] Lord Atkin's approval was later cited in support of the Privy Council's 1950 ruling in the Margarine Reference, in that part dealing with the federal trade and commerce power.

The decision represents a high point of the Supreme Court's adoption of the Privy Council's view of an exceptionally narrow interpretation of the federal government's trade and commerce power, which began to be relaxed in 1971 in Caloil Inc. v. Canada.

References

1. R. v. Eastern Terminal Elevator Co. 1925 CanLII 82, [1925] SCR 434 (5 May 1925), Canada)
2. 2 Geo. V, (Can.) ch. 27 (1912), which was added to the Act by 9-10 Geo. V, ch. 40 (1919), and further amended by 10 Geo. V, ch. 6 (1919, 2nd session)
3. replaced in 1971 by the Canadian Grain Commission
4. Ian Bushnell (1997). "11: The Maclean Years, 1923–1942". The Federal Court of Canada: A History, 1875-1992. Toronto: University of Toronto Press. ISBN 0-8020-4207-4. Retrieved 2013-01-06.
5. Bushnell 1997, p. 106
6. Eastern Elevator, pp. 446–447
7. Eastern Elevator, p. 448
8. Eastern Elevator, p. 457
9. Eastern Elevator, pp. 442–444
10. Canada Grain Act, R.S.C. 1985, c. G-10, s. 55
11. Reference re legislative jurisdiction of Parliament of Canada to enact the Natural Products Marketing Act, 1934, and The Natural Products Marketing Act Amendment Act, 1935 1936 CanLII 21, [1936] SCR 398 (17 June 1936), Canada)
12. The Attorney General of British Columbia v The Attorney General of Canada and others [1937] UKPC 9, [1937] AC 377 (28 January 1937)