SCC excludes businesses operating in federally regulated fields from provincial licensing regime

On May 30, the Supreme Court of Canada (SCC) released a decision of great interest to businesses whose activities fall under the exclusive jurisdiction of the federal Parliament, such as international marine ports or airports. The issue before the SCC in Opsis Airport Services Inc. v. Quebec (Attorney General)¹ was whether Quebec’s Private Security Act (PSA), a provincial statute adopted by the Quebec legislature, applied to businesses operating in fields within the exclusive jurisdiction of the federal Parliament, such as airport and marine facility security. 

The SCC unanimously allowed the two appeals, finding the provincial statute wholly inapplicable pursuant to the constitutional doctrine of interjurisdictional immunity. The doctrine of interjurisdictional immunity aims to preserve the core of an exclusive federal or provincial power from being impaired by the other level of government, and the SCC has traditionally applied it with restraint. The application of the doctrine in this appeal confirms it has not been entirely sidelined by the court and may remain a useful tool for those operating in a field subject to federal jurisdiction to reduce compliance with multiple levels of government regulation.

Background and decisions from the Court of Appeal of Quebec

Opsis Airport Services Inc. provides specialized services to the airport sector. It operates the emergency call centre at Montréal-Pierre Elliott Trudeau International Airport. Quebec Maritime Services (QMS) is a company operating in the international maritime shipping industry. It is tasked with overseeing and controlling access to marine facilities at the Pointe-au-Pic terminal. 

Both Opsis and QMS were charged with operating an enterprise offering private security activities without holding the appropriate agency licence, contrary to the PSA. The Court of Appeal of Quebec affirmed the application of the PSA.² While acknowledging that Opsis’s and QMS’s operations fell within the exclusive jurisdiction of the federal Parliament, the majority found that the impugned provisions of the PSA requiring Opsis and QMS to hold a licence did not go so far as to impair the core of the federal jurisdiction over aeronautics, navigation and shipping. 

SCC judgment

Like the Court of Appeal, the SCC found that Opsis’s and QMS’s activities – relating to airport and marine security – unquestionably fell within the core of the federal powers over aeronautics and navigation. Unlike the Court of Appeal, however, the SCC held that the licensing regime provided under the PSA actually impaired the core of Parliament’s exclusive jurisdiction. 

The SCC found that the provincial regime subjected the appellants’ permission to operate to the control of the Bureau de la sécurité publique (BSP), a regulatory body responsible for applying the PSA. Rejecting the Court of Appeal’s conclusion, the SCC found that the BSP’s powers to suspend, cancel or refuse to renew a licence, as well as to issue directives to a licence holder, impaired the core of federal jurisdiction over aeronautics, navigation and shipping. Finding the impugned provisions in the PSA to be inseverable from the rest of the statute, the SCC concluded that the appropriate remedy was to read down the statute as a whole so that the appellants are excluded from its scope. 

The SCC explains that interjurisdictional immunity is to be applied with restraint, with preference given to the doctrine of cooperative federalism wherein the laws of both the province and the federal government are applied. Furthermore, interjurisdictional immunity should only be relied upon when the core of the exclusive power of parliament or the provincial legislature is “seriously or significantly trammeled,” which was found to be the case here.  

Takeaways

• For businesses offering services to clients operating in areas under the exclusive jurisdiction of Parliament, the SCC’s decision is intended to promote uniformity and predictability in applying legislation and may help to limit intrusions by provincial legislation into their activities.
• For businesses operating in areas under the exclusive jurisdiction of Parliament, the SCC’s decision revitalizes the doctrine of interjurisdictional immunity as a ground for challenging provincial legislation thought to impair the core of an exclusive federal power. However, from a practical perspective, it will remain uncertain as to how much intrusion by provincial legislation is enough to become an impairment and inapplicable to a business that operates in a field of exclusive federal jurisdiction.

The authors would like to thank Michèle-Lise Lepage, articling student, for her contribution to preparing this legal update.