Federal-Provincial Conference of First Ministers, The Powers Over the Economy: The Economic Union (8-12 September 1980)
By: Secretariat of the Conference
Citation: Federal-Provincial Conference of First Ministers, Report of the Continuing Committee of Ministers on the Constitution of First Ministers, The Powers Over the Economy: The Economic Union, Doc 800-14 (Ottawa: 8-12 September 1980).
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FEDERAL-PROVINCIAL CONFERENCE OF FIRST MINISTERS
Report of the Continuing Committee of Ministers
on the Constitution to First Ministers
THE POWERS OVER THE ECONOMY
A. THE ECONOMIC UNION
September 8-12, 1980
THE POWERS OVER THE ECONOMY
A. THE ECONOMIC UNION (Section 121)
The Ministers reviewed various proposals and alternatives to further and maintain the objective of an economic union.
Issues for the First Ministers’ Consideration
(1) Do governments accept provisions in the Constitution to safeguard the economic union?
(2) Do governments think that the principles contained therein should be enforceable?
(3) If there is agreement that enforceability is necessary then how should such enforceability be reflected within the Constitution?
(a) Should it be by recourse to the courts?
(b) Should it be through reference to a political mechanism such as a new Upper House (Council of the Provinces) or a First Ministers’ Conference?
(c) Should it be by some combination of (a) and (b) above – courts and a political mechanism?
(4) To what extent should there be provision for derogrations from the principles of the economic union?
Discussion focussed on two distinct alternatives on how the economic union should be furthered and maintained.
The first alternative focussed on the position advanced by the federal government which wished to minimize economic discrimination within Canada based on provincial or territorial boundaries. In its draft the federal government did not propose an absolute prohibition, recognizing there were differentiated social and economic policies of governments. Three different approaches are attached reflecting different ways of enforcing the objectives of the economic union. For the purposes of discussion the approaches have been identified as
(a) the “unduly impedes” test (Draft 1)
(b) the “non-discrimination” test (Draft 2)
(c) the “pitch and substance” test (Draft 3)
The second alternative (Draft 4) discussed by the Ministers and accepted by a majority of provinces was a statement of economic principles in the Constitution which does not limit federal and provincial legislative authority. It is similar in approach to the equalization draft. In addition the second alternative contains a statement committing governments to the ongoing systemic and co-operative review by them of the operation of the Canadian economic union.
The Ministers discussed various alternatives for referring derogations to a political body. Depending upon the form and responsibilities of a new Upper House (Council of the Provinces), provincial derogations might be referred to it for consideration. Such a review could take place after the courts had examined a particular law or practice and found it to be in contravention to the principles found in section 121. Another proposal was suggested which would permit provinces to submit specific derogations to a revised Upper Chamber prior to their enactment. Another alternative would be to have First Ministers’ Conferences discuss and possibly rule on provincial derogations.
|121.(1) Neither Canada nor a province shall by law or practice discriminate in a manner that unduly impedes the operation of the Canadian economic union on the basis of the province or territory of of residence or former residence of a person, on the basis of the province or territory of origin or destination of goods, services or capital or on the basis of the province or territory into which or from which goods, services or capital are imported or exported.||121.(1) This is based on the the original draft presented by the Government of Canada. Concern was expressed by provinces over the “unduly impedes” test as creating uncertainty, thereby leaving too much discretion to the courts.
Some provinces expressed concern over the inclusion of the word “practice”.
|(2) Nothing in subsection (1) renders invalid a law of Parliament or of a legislature enacted in the interests of public safety, order, health or morals.||(2) Derogation|
|(3) Subsection (1) does not render invalid a law of Parliament enacted||(3) Federal derogation|
|(a) in accordance with the principles of equalization and regional development recognized in section ; or|
|(b) in relation to a matter that is declared by Parliament in the enactment to be of an overriding national interest.||Saskatachewan suggests ratification by the upper house.|
|(4) Subsection (1) does not render invalid a law of a legislature||(4) Provincial derogation.|
|(a) providing for reasonable residency requirements as a qualification for the receipt of publicly provided goods or services||The Government of Canada agrees with the objective of (a) but reserves its position on the drafting.
Whether (b) is necessary in light of subsections (1) and (2) is not certain.
|(b) enacted in relation to the reduction of economic disparities between regions wholly within a province that does not discriminate to a greater degree against persons resident or formerly resident outside the province or against goods, services or capital from outside the province than it does against persons resident or goods, services or capital from a region within the province.||Depending on the type of adjudication process, some provinces wishes to see a broader area of derogations
Saskatchewan proposed two further derogations relating to monopolies owned and operated by the province and the export from the province of government-owned capital.
Nova Scotia suggests a derogation which would recognize the special case of have-not provinces.
|(5) Nothing in subsection (2) or (3) renders valid a law of Parliament or a legislature that impedes the admission free into any province of goods, services or capital originating in or imported into any other province or territory.|
|(6) Nothing in this section confers any legislative authority on Parliament or a legislature.|
|(7) A law or practice of Parliament or a legislature that is found inconsistent with subsection (1) by final judgment of a court of competent jurisdiction shall stand and be deemed to be valid and operative, unless repealed or rescinded, for six months after the date of the judgment during which time the [New Second Chamber] shall consider the law and if the [New Second Chamber] ratifies the law or practice as being desirable public policy notwithstanding that it is inconsistent with subsection (1), the law shall continue to stand thereafter.||(7) This subsection provides for a mechanism whereby laws or practices considered by individuals and/or other governments to be discriminatory could be reviewed by a political body after a court had found them to be in contravention of subsection (1).|
|121. (1) Canada is an economic union within which all persons may move without discrimination based on province or territory of residence or former residence and within which all goods, services and capital may move without discrmination based on province or territory of origin or entry into Canada or of destination within or of export from Canada.||121. (1) This draft is based on a draft presented by the Government of Canada on August 26 and was designed to overcome provincial concerns. Most provinces feel that while this subsection diminishes the discretion of the court, it does not give sufficient latitude for reasonable derogations from the principles contained within the subsection.|
|(2) Neither Canada nor a province shall by law or practice contravene the principle expressed in subsection (1).||(2) The concern expressed above may be overcome by reinserting the unduly impedes test in subsection (2).|
REMAINDER OF THIS DRAFT AS IN DRAFT 1.
|121. (1) It is hereby declared that Canada is an economic union and||(a) every citizen of Canada and every person lawfully admitted to Canada for permanent residence has the right,||(i) to move to and reside in any province or territory,||(ii) to pursue the gaining of a livelihood in any province or territory without discrimination based on residence or former residence.||(iii) to acquire and hold property in any province or territory in Canada, and||(b) all goods, services and capital may move freely and without discrimination within Canada based on the province or territory of origin or destination.||(2) Neither Parliament nor a legislature may enact a law that in its pith and substance is inconsistent with subsection (1).||(2) The “pith and substance” clause is thought by Ontario to provide a more accurate judicial test than “unduly impedes” or other such phrases and would effectively replace most of the specific derogations contained in the other drafts||(3) Neither the Government of Canada nor of a province shall engage in any practice that is intended to operate in a manner that is inconsistent with subsection (1).|
THIS DRAFT CAN BE EXTENDED BY THE PROCESS ENVISAGED IN SUBSECTION (7) OF DRAFT 1.
|121. (1) Without altering the legislative or other authority of Parliament or the legislatures or of the Government of Canada or the governments of the Provinces or the rights of any of them with respect to the exercise of their respective legislative or other authority:|
|(a) Parliament and the legislatures, together with the Government of Canada and the governments of the Provinces, are committed to|
|(i) the maintenance and enhancement of the Canadian economic union,|
|(ii) the movement throughout Canada of persons, goods, services and capital without discrimination by Canada or any Province, by law or practice, in a manner that unjustifiably impedes the operation of the Canadian economic union, and|
|(iii) the harmonization of federal and provincial laws, policies, and practices that affect the Canadian economic union; and|
|(b) pursuant to the commitments specified in clause (a), the Government of Canada and the governments of the Provinces are committed to the ongoing, systematic and co-operative review by them of the operation of the Canadian|