Division of Powers Factum
ASSIGNMENT Instructions – see attachment
The Government of Canada has appealed this decision to the University Court of Canada. Canada argues that the case is wrongly decided.
The Government of Prince Edward Island, together with the other provinces, oppose the appeal and argue that the Supreme Court of Canada made the right decision.
The sole issue before the University Court of Canada is whether the Act falls under the federal trade and commerce power or under the provincial power over property and civil rights.
IF YOU ARE RETAINED BY THE GOVERNMENT OF CANADA, please file written submissions as to why the Act is valid under the trade and commerce power and not a matter falling under property and civil rights.
IF YOU ARE RETAINED BY THE GOVERNMENT OF PRINCE EDWARD ISLAND, please file written submissions as to why the Act is invalid under the trade and commerce power and properly a matter falling under property and civil rights.
The Constitution Act of 1867 sets out the legislative powers of the Parliament of Canada on the one hand and the legislatures of the provinces on another, considering Canada is a federation (Lo, 2017). Section 91 grants the Parliament authority to legislate on matters related to criminal law, trade and commerce, Indians, and reserved lands. Notably, Canada’s Parliament has the residual power to legislate on Canada’s peace, order, and good governance (Lo, 2017). Conversely, Section 92 grants provincial legislatures the exclusive authority to formulate regulations that are related to matters such as the provinces’ property and civil rights, education, and anything of local and private nature (Lo, 2017). The judicial courts will then resolve the disputes within their jurisdictions and ensure a constitutional balance between provincial and federal powers.
The proposed Water Regulation Act has attracted two opposite views; on one end, the Canadian government argues that the Parliament of Canada has the legislative authority over the provisions as it is aligned with its powers to regulate trade and commerce. On the other end, the province of Prince Edward Island and other provinces have indicated that the Act falls under their provisional powers on property and civil rights as awarded by the Constitution Act of 1867. Thus, these powers give them legal jurisdiction over matters that are of local or private nature, specifically those involving contracts, property, and retail sales.
In this matter, the author argues that the Government of Canada needs to have legislative authority over the Water Regulation Act. The University Court of Canada looking into this appeal should consider the primary factor of water being a universal and multi-purpose flow resource that transgresses the provincial boundaries. The Regulation’s primary purpose is to protect consumers, foster a fair, competitive, and competitive, and finally contribute to the country’s water resources’ integrity and stability. Therefore, the fragmentation of its Regulation to different users, sectors, and governance scales will require constant intergovernmental coordination and cooperation in a bid to ensure high-quality standards are achieved across the board.
Parliament of Canada’s General Trade and Commerce Powers
The Constitution Act of 1867 has conferred authority on the Parliament of Canada to enforce laws that are related to the Regulation of trade and commerce (Lee, 2012). Furthermore, it has also conferred authority on the provinces to regulate matters pertaining to individual property and civil rights. In 1881, the High Court of Appeal clarified the scope of the powers of the Parliament on trade and commerce. In the case of Citizens Insurance Company of Canada v Parson, it was indicated that the scope of these federal legislative powers was limited to the trade that is interprovincial and international and to the Regulation of trade-related aspects applicable to the entire country (Lord, 2018). Notably, in the second matter of regulating the trade aspects related to the whole dominion, the Parliament is required to regulate only when the national interests are engaged in ways that are qualitatively distinct from provincial concerns. Therefore, just because a situation does exist in more than one province, that does not make it a valid reason for the Parliament to exercise federal trade and commerce jurisdiction. There is a need for the Parliament to have proper justification for its authority over the matter.
In determining which exercise of general power is valid, the Supreme Court indicated that they need to proceed with the principle of protecting the autonomy to both the Parliament and the provincial legislatures (Lord, 2018). The simultaneous application of federal and provincial legislation should not alter the exclusive nature of their respective powers, as set out in the Constitutional Act of 1967. As one order of government exercises its legislative power, it should not drain the others’ legislative power of its essence and effectiveness. Since maintaining the exclusive jurisdiction of the conferred legislative powers is not a straight-forward process, the CourtCourt in General Motors of Canada Ltd v City National Leasing developed the General Motors test (Lord, 2018). Notably, this test prevented the Parliament from infringement on provincial jurisdictions but also acknowledging its unique capacity to intervene in national trade issues.
The General Motors test involves five criteria to determine the constitutional validity of federal law to grant the Parliament that authority. The first criterion is that the legislation in question should be part of a regulatory scheme. The second criterion is that the scheme should be under the constant oversight of a regulatory agency (Lord, 2018). In reference to the disputed Water Regulation Act, this is a comprehensive water regulation framework for Canada as one national regulator runs it. This Act will provide a set of laws and rules that will foster uniform Regulation and enforcement nationally. Therefore, it is evident that this Act will become the guiding Regulation and not be a part of another regulatory scheme as outlined by the first criterion. The Water Regulation Act is a legislation that is national in scope and will also fall under a regulatory agency that pushes it towards being a federal law.
The third criterion is that the disputed legislation should be concerned with trade and commerce in entirety and not with a particular industry (Lord, 2018). This criterion means that the law needs to be general and not target specific companies, industries, or companies. An example is when the Supreme Court recognized the validity of the federal law handling competition and trademarks. This law cracked down the monopolistic practices to ensure that a healthy level of competition existed within the Canadian economy. The Canadian economy was treated as one integrated national unit and not the collection of distinct, separate local enterprises. The CourtCourt indicates that there were no queries on trademarks that applied across and between industries in different provinces.
Considering the Water Regulation Act, it goes beyond regulating just the industry’s producers and retailers. The water resources are a necessity for all persons and entities, and what the regulators do in this jurisdiction will affect them despite working in different environments (Bakker & Cook, 2011). A water resource is a unit that applies to everyone, making the law valid as it transcends local matters. The water resource sector has also undergone a considerable transformation from the local market to national and international issues. This is primarily due to the environmental policies focussed on maintaining natural resources.
The fourth criterion is that the disputed law should be of such nature that provinces acting alone or in concert may be constitutionally incapable of enacting it. The fifth criterion is that the failure to include one or more provinces in the disputed legislation scheme would compromise the successful operation in other parts of the country (Lord, 2018). As noted earlier, water is a universal and multi-purpose flow resource that transgresses the provincial boundaries. Canada’s water management and governance have also undergone a significant transformation that there has been a cognizant need for provinces to revise their laws and incorporate continuous innovation. As the provinces work towards improving their water quality standards and protect sources within their territories, their outreach is still limited. This law requires a strong federal presence that will handle the full scope of water-responsibilities.
The proposed Water Regulation Act is effective legislation that will give the Parliament a robust federal presence to handle essential issues related to it. Some current systemic risks and concerns are associated with the water resource, and also provinces are needed to achieve higher mitigation levels. Significant water resources are shared across the country, and leaving out a province only makes it difficult to achieve proper governance of the sources that are shared. The proposed Act on matters such as the requirements in registering, disclosing and reporting, the special duties of the producers and retailers, the regulatory framework for the prices and volumes, civil remedies, handling the regulatory and criminal offenses related to the water resource. These are issues in which a harmonized approach is more effective as it is possible to monitor the progress made on matters affecting everyone.
The Water Regulation Act surpasses the provincial mandate of the matter being of local or private nature. The evolution that the issue has undergone makes it a national concern of federal trade and commerce power. While one would think that it is handling one lucrative water industry, this industry does affect every Canadian and all institutions. The country does need its resource, and proper governance is an objective of the Parliament of Canada. Granting these powers to the highest level ensures that the provinces abide by it even as they bring in policies that work for their regions. As indicated, the federalism principle seeks to achieve a balance between federal and provincial powers. The entirety of the Water Regulation Act is a comprehensive regulation that provinces will look up to while coming up with policies to enforce within their boundaries.
The Pith and Substance of a Law
The constitutional validity of the Parliament or a province to have legal authority is determined by the pith and substance of the law when looking at it from a division of powers perspective (Lord, 2018). The pith and substance of the legislation of the law is primarily the true character of the disputed law. This is examined by considering the purpose and effects. The intrinsic evidence of the legislation, such as the purpose clause, will determine the purpose of the legislation (Lord, 2018). In this case, the Water Regulatory Act is focused on consumer protection, a competitive market that is fair and efficient and upholds the integrity and stability of the country’s water resources. Consumer protection has been identified as a matter in which its regulations are mostly national and enforced through national frameworks (Goldring, 1996). The rules will allow the correction of market failures and redress of any inequalities.
Additionally, consumers are now participants of a global market. Therefore, the Water Regulation Act is at the national level for protecting consumers across the country. It becomes easier to modify them to even reach global standard levels when it comes to natural resources.

In considering the Regulation effects, the CourtCourt looked into the legal impact and the practical impact (Lord, 2018). This is primarily the direct effects of the Regulation itself and any of the “side effects’ coming from the application of the Regulation. The latter are the indirect effects of the Regulation. Notably, the direct impact of these regulations will be on all the consumers of the water industry. It is the mandate of the whole country to ensure that the resources are optimally utilized and protected means the Regulation’s effect is across the entire country. The provinces are to look into how they formulate policies in line with their jurisdictions while achieving the main objectives of the regulatory Act.
The author argues that the proposed Water Regulation Act does fall under the “trade and Commerce” powers that have been granted to the Parliament of Canada. An Analysis of the Act through the General Motors test and its true character demonstrates a rule that should be at a national level. The Regulation does not fall under the property and civil rights whose powers have been granted to provinces such as Prince Edward Island. The Water resource goes beyond the local and private nature of matters handled by the provinces. To this effect, the University Court of Canada looking into the Regulation should consider it a federal law with powers that lie with the Parliament of Canada.

Bakker, K., & Cook, C. (2011). Water governance in Canada: Innovation and fragmentation. Water Resources Development, 27(02), 275-289.
Goldring, J. (1996). Consumer Protection, Nation‐State, Law, Globalization, and Democracy. Journal of Computer‐Mediated Communication, 2(2).
Lee, I.B. (2012). The General Trade and Commerce Power after the Securities Reference. Retrieved from https://www.law.utoronto.ca/utfl_file/count/documents/lee/Lee_GRT_2012.pdf
Lo, K. (2017). Constitutional Turf Wars: A Quick Look at Federalism Issues in Securities Regulation Reference re Securities Act, 2011 SCC 66, [2011] 3 SCR 837. Retrieved from https://canliiconnects.org/en/commentaries/46533
Lord, F. (2018). Parliament’s General Trade and Commerce Power. Retrieved from https://lop.parl.ca/sites/PublicWebsite/default/en_CA/ResearchPublications/201832E

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