April 16, 1928

LIB
CON

George Halsey Perley

Conservative (1867-1942)

Sir GEORGE PERLEY:

These treaties

between Great Britain and Spain which the government is now proposing that Canada shall become a party to have to do with commerce and navigation. Do these overlap at all, or does the convention made between Canada and Spain deal with entirely different matters from those that are dealt with in the treaties with Great Britain?

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LIB

James Alexander Robb (Minister of Finance and Receiver General)

Liberal

Mr. ROBB:

We are adhering to the

British trade treaty so that we get the lowest rates for our nationals doing business in Spain.

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CON

George Halsey Perley

Conservative (1867-1942)

Sir GEORGE PERLEY:

Quite so; but if Canada agrees to become a party to the British treaty with Spain, will that not supersede the convention made between Canada and Spain in 1925?

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LIB

James Alexander Robb (Minister of Finance and Receiver General)

Liberal

Mr. ROBB:

In 1925 we agreed to start

negotiations for a treaty; this is the consummation of that agreement.

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CON
LIB
CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

I wonder, Mr Chairman, if the attention of the Prime Minister has been directed to this bill. The other day I had occasion to draw attention to the fact that some of these conventions which were submitted for our approval had the effect of placing obligations upon the provinces, and that under our constitution exclusive power to deal with certain matters was vested in the legislatures of the provinces and not in the federal parliament. My right hon. friend the Prime Minister referred me to the section of the British North America Act dealing with this matter. I was perfectly aware of the section, but I do not apprehend that it could ever be taken as enabling us to amend our constitution by the aid of a convention made between Great Britain and a foreign state and approved by us. I do not think that even the credulity of the Prime Minister could be imposed upon to that extent, although the other day he said that he did not happen to be a lawyer.

This bill contains three sections: the first is merely the title; the second sanctions three treaties, one a treaty of commerce and navigation, the other an agreement between the United Kingdom and Spain, and the third a convention between the same powers; the third section provides that the act shall come into force on proclamation. There is, of course, a distinction in international law between a treaty, an agreement and a convention. The first schedule sets out the treaty of commerce and navigation between the

Treaty with Spain

United Kingdom and Spain exchanged at Madrid on April 23, 1924. May I direct attention to article 3?

The subjects of each of the contracting parties in the territories of the other shall be at full liberty to acquire and possess every description of property, movable and immovable, which the laws of the other contracting party permit or shall permit, the subjects or citizens of any other foreign country to acquire and possess. They may dispose of the same by sale, exchange, gift, marriage, testament, or in any other manner, or acquire the same by inheritance under the same conditions which are or shall be established with regard to subjects of the other contracting party. They shall not be subjected in any of the cases mentioned to any taxes, imposts or charges of whatever denomination other or higher than those which are or shall be applicable to subjects of the other contracting party.

It happens that succession duties are wholly within the purview of the provincial legislatures, and that they have enacted laws dealing with such duties. The method devised for the purpose of collecting taxation in that form differs in the several provinces, and in some instances differs with respect to the residence of the persons affected. This article purports to put the residents of Spain in the same position and upon the same basis as the residents of any other foreign state, and I think it might be important to consider whether we are not taking an obligation with regard to the provinces that was never contemplated in connection with a treaty, because not only does that article deal with this matter, but there are other articles that deal with military obligations, which clearly are within the power of this parliament. At the top of page four the continuation of article 4 provides that:

They-

The subjects of each of the contracting parties within the territories of the other.

-shall similarly be exempted from all judicial, administrative and municipal functions whatever, other than those imposed by laws relating to juries, as well as from all contributions, whether pecuniary or in kind, imposed as an equivalent for personal service, and finally from any military exaction or requisition.

Between the United Kingdom and Spain there would be no difficulty, but when you come to deal with a country such as Canada that is a federal union, you cannot cover "judicial, administrative and municipal functions;" these are solely within the jurisdiction of the provinces. It shows the difficulties that arise in connection with the mere sanctioning by this parliament of a treaty made between the United Kingdom and Spain, and thus imposing upon us all the obligations, duties and responsibilities under the treaty so negotiated. Section 92 of the British North

America Act distinctly says that the provincial legislatures shall have exclusive jurisdiction in respect to judicial, administrative and municipal matters. Section 132, dealing with treaties being binding alike upon the Dominion and the provinces did not and could not contemplate the possibility of a treaty negotiated between Great Britain and Spain, and sanctioned by this parliament, imposing upon the provinces a restriction of their legislative powers as defined by the British North America Act. I think the Prime Minister will agree with me that this must be so, otherwise we should be placed in a most difficult position. If the articles that I have read impose those restrictions upon the provincial legislatures, the truth is that the British North America Act has, pro tanto, been amended; and it cannot possibly be contended that that was in the mind of the parliament at Westminster when it gave us our constitution.

Now I come to the agreement which is printed at page 12 of the bill, regulating:

the treatment to be accorded in the territories of each of the high contracting parties to the companies registered in the territories of the other, have for this purpose named as their pi enipotentiaries.

With respect to federal companies, the right hon. Prime Minister will at once agree with me that our sanctioning of this agreement would carry with it all the power that might be necessary. But to say that companies having provincial objects, and wholly within the powers of the provincial legislatures, should, be affected by legislation of this kind, would seem to me to be something that was not intended by the British North America Act, and it might get us into this difficulty: some of the provinces might accord more favourable terms to, say, a United States company than to a Spanish company, and the Dominion would be confronted with the complaint that we had not performed our obligations under the treaty; but there is no power in this Dominion to enforce any such view on the provinces with respect to an agreement of this nature. It will be observed that some of these sections touch upon the very difficult and dangerous subject of provincial taxation, over which clearly this parliament has no jurisdiction, when you come to deal with the right of the province to impose taxation on any company that may be registered within its boundaries for the purpose of transacting business. The convention was not signed until April 5, 1927, and accompanying it is a letter from the British ambassador as well as one from the Spanish ambassador.

I do not desire to do more than merely point out the difficulties as I see them, be-

Treaty with Spain

cause I do not think that they are limited to this particular case. I had occasion the other afternoon, when we were discussing the sanitary conventions-they were not treaties- which were negotiated through the League of Nations, to look into the question generally, and I must say I do not think it was ever intended, or that it will be held by the courts, to be within the power of a treaty, a convention or an agreement-and there is a clear distinction in law between the three things- negotiated between Spain and Great Britain, and given sanction by a legislative act on our part, to affect the constitutional jurisdiction of the provinces as defined by section 92 of the British North America Act. And yet that is inevitable in this instance if we declare this to be a part of the law of Canada, and do not provide any limitations, or, as the Americans say, reservations, with respect to not affecting companies or businesses or the legislative power and jurisdiction of the several legislatures. I certainly have some difficulty in my own mind regarding it, and I direct the attention of the Prime Minister (Mr. Mackenzie King) to the matter, for I think it is worthy of more than passing notice, having regard to what would be the effect upon some of the businesses that are directly mentioned in (a) the treaty, (b) the convention, and (c) the agreement itself.

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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

The section

of the British North America Act, to which my hon. friend made special reference, is 132:

The parliament and government of Canada shall have all powers necessary or proper for performing the obligations of Canada or of any province thereof, as part of the British Empire, towards foreign countries, arising under treaties between the empire and such foreign countries.

As I suggested the other day, there may be room for debate on the significance of the word "empire" as respects its application to any one part of the empire, but I should be inclined to think, looking at the clause as it reads, that it was clearly intended to give the federal government full power and authority to make any treaty coming within the scope of its jurisdiction which it might wish to enter into with another country-a power sufficiently comprehensive to cover just such a situation as my hon. friend has in mind where there might be a possibility of conflict with the provinces. However, that is a matter of interpretation which, as the hon. member has said, it would be well to have carefully considered, and I shall bring it to the attention of the Minister of Justice (Mr. Lapointe) with a view to ascertaining whether in his opinion it has any special bearing upon this particular case.

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CON

James Dew Chaplin

Conservative (1867-1942)

Mr. CHAPLIN:

I wish to call the attention of the Prime Minister to article 10, in which we in this parliament propose to protect the Spanish wine dealer as against anything that the provincial legislature may do, while we are not attempting to protect the Canadian wine dealer from what the same legislature may do in this regard.

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LIB

James Alexander Robb (Minister of Finance and Receiver General)

Liberal

Mr. ROBB:

I do not know that my hon.

friend has made himself quite clear; I am not sure that I understand just what objection he is taking to article 10.

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CON

James Dew Chaplin

Conservative (1867-1942)

Mr. CHAPLIN:

My understanding of the

matter is this: If the provincial authorities in this country were to put a local tax on Spanish wines or French wines, then we undertake to see that these wines shall be placed in no worse position than our own wines. I want to point out that the local authorities now tax Canadian wines. You propose to see that they shall not tax foreign wines, but you are not taking any notice of the fact that they are taxing the Canadian product.

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LIB

James Alexander Robb (Minister of Finance and Receiver General)

Liberal

Mr. ROBB:

My hon. friend has a wrong

interpretation of the matter. The imported product will pay the same tax as the native.

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CON
CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

The point made by my

hon. friend from Lincoln has not, I think, been apprehended by the minister. Article 10 in the second paragraph reads:

The produce or manufacture of either of the contracting parties imported into the territories of the other, and intended for warehousing or transit, shall not be subject to any internal tax.

There is already an internal tax in Ontario on its own wine, and my hon. friend is pointing out that Spanish wine paying the customs and excise duties will be free from any internal tax in that province. I wish to draw the attention of the Prime Minister to this fact: Section 132 of the British North

America Act must be read with sections 91 and 92, and the effect of the proper interpretation of the three sections is this, that any treaty negotiated by the Dominion shall have force and effect upon Canada only within the ambit of thd powers conferred upon this parliament by section 91; and to the extent that we have powers, under the constitution, affecting the provinces, the provinces are thereby bound. There are cases without number which I might mention. But surely it never could be contended that a treaty -I will not discuss either agreements or conventions inasmuch as "treaty" is used in section 132 of the British North America Act

Treaty with Spain

-negotiated between a foreign state and Great Britain, to which we give our approval, could deprive the legislature of any province of its plenary powers. Such a contention is certainly at variance with the statement of the law made by Lord Lorebum in the Privy Council. It would simply imply that the plenipotentiaries of Canada and of some other country might sign a treaty which, without reference to a province, could deprive that province of its legislative power with respect to every subject matter that might be dealt with in that treaty. It is perfectly clear that this is not the law; it is not at any rate the law heretofore understood by jurists of repute. No jurist of repute has ever suggested for a moment that a treaty could encroach upon that ground. The provinces could be affected only in so far as this parliament might act within the limit of its powers over the provinces, -but not within the constitutional jurisdiction and plenary powers of the provinces. Surely no treaty can take away from any provincial body its legislative power; it can affect only those powers which the Dominion may exercise in the province. That is to say, this parliament might denude itself of every power which it has a right to exercise in every one of the nine provinces, and the provinces would thereby be bound. But the legislative jurisdiction of the legislatures, conferred on them by the British North America Act, cannot be limited, restrained, restricted or destroyed by any treaty made at Madrid to which we give sanction. Surely it is unnecessary to point that out. Under the rules of interpretation the sections of the British North America Act must be read together, and the sections conferring exclusive powers upon the Dominion and the provinces respectively must be read with section 132. Any treaty that may be negotiated between Great Britain and any foreign state, and to which we may become a party, will bind the provinces to the extent to which the parliament of Canada may have jurisdiction over those provinces This parliament has widle jurisdiction over the provinces, ibut within the purview of the powers conferred by the constitution upon provincial legislatures, nothing short of the legislative power of the Imperial parliament can deprive the legislature of its constitution. The effect is that the constitution of the province might be wiped out; one must always carry these matters to a logical conclusion, and that is what this means. It had not occurred to me the other day until it was read, but I remember very well my early teachings in connection with matters of this kind, and they are

very simple. This parliament is the entity which speaks for Canada; under the federal system and under the powers conferred upon parliament by section 132, this is the national entity. In that case it was not contemplated that our parliament should negotiate a treaty; it was intended only to deal with a treaty negotiated with respect to the British Empire of which we are a part, and that treaty has power, force and application binding the provinces to the extent to which the parliament of Canada can exercise power over them. It cannot be suggested, however, that you can take away the legislative power of the free legislatures of the nine provinces by a treaty negotiated in Madrid, to whi-Ch we give our approval.

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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

My hon. friend has raised a very large question, and I hesitate even to attempt to make a contribution to it by way of debate. It does seem to me, however, that some power in the state must have the authority to make treaties, and that authority to whoever it belongs must be plenary. Situations may arise where it would be quite impossible for the federal government to negotiate a treaty with another nation, which it was in the interests of the Dominion to conclude, without to some extent overriding some of the alleged exclusive powers of the provinces. In such a case it could hardly be assumed that, if it were in the national interest to have such a treaty made, this could not be done because some provision therein appeared to override some particular jurisdiction of a province. I just raise that point as the other side of the question, and I think my hon. friend will see clearly that in giving to the parliament of this country the power to make treaties under the British North America Act', in the terms of the section which I have read, it must have been intended that all the powers which were needed for that purpose were being given, even though they did appear in some particulars to come into conflict with certain rights reserved to the provinces. In other words in treaty-making the national interest must be paramount when brought into apparent conflict with the interest of any province.

With respect to this particular treaty, a clause is contained therein which provides for its termination by either party upon the giving of three months' notice, and perhaps I could put at rest any concern which my hon. friend may have as to our intentions by saying that if it did appear that a serious conflict was about to arise between the provinces and the Dominion with regard to any of the

Treaty with Spain

sections to which we are now referring, rather than have such a conflict, the treaty itself could be abrogated as far as we are concerned.

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LIB

James Alexander Robb (Minister of Finance and Receiver General)

Liberal

Mr. ROBB:

Perhaps the hon. member for Lincoln has misunderstood article 10 by reading only that part of it which appears on page 6. If he follows that article on page 7 he will find the following words:

The produce or manufacture of either of the contracting parties imported into the territories of the other, and intended for warehousing or transit, shall not be subjected to any internal duty.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

I do not desire to argue this question before the committee, but I wish to direct the attention of the Prime Minister to section 132 of the British North America Act, which is as follows:

The parliament and government of Canada shall have all powers necessary or proper for performing the obligations of Canada or of any province thereof, as part of the British Empire, towards foreign countries, arising under treaties between the empire and such foreign countries.

That is, they shall have all powers necessary or proper to perform the obligations of Canada or of any province thereof. Certainly these obligations must be read subject to the constitutional grant of powers by the British North America Act to the several provinces. This question really raises the whole issue of sovereign power, and the right of this Dominion to negotiate any treaty. There is no grant of power by section 132 to negotiate a treaty; far from it. That section contemplates that the treaty shall be negotiated by someone else; it says, "between the empire." In this particular treaty there is a reservation providing that the treaty shall not apply to the Dominion, to India or to Australia unless their parliaments, in terms, accept, adopt or sanction the treaty. We sanction the treaty; by so doing we make ourselves a party to every term of it, and my point is that the language is not apt to make such a treaty binding upon the various component parts of this confederation which have their grant of plenary powers from the parliament at Westminster. Section 92 of the British North America Act says". . . .may exclusively make laws. . . .", but section 91 grants to this parliament the right to make laws for the peace, order and good government of Canada as a whole. It is further provided that where there is no exclusive grant of powers, if there is any conflict between the federal and provincial power the federal power shall prevail. As the Privy Council has so often said, however, this is not so as against the enumerated classes of subjects in section 92, over which the legislatures have exclusive jurisdiction.

Possibly this is a difficult matter to argue in committee, and I merely direct attention to it because it does occur to me that as the matter stands it is of far-reaching consequence and it was never intended that the mere approval or sanction by Canada of a treaty negotiated between two outstanding portions of the empire or between two foreign nations to which the empire was a party should have the effect of repealing, pro tanto, the power of the legislatures of the provinces which is said to be exclusive. I quite agree with the Prime Minister that there must be a national entity, and that national entity is Canada. Canada is composed of several provinces; but the national entity has power to make laws for the national well being. These laws thus made for the national well being, however, must not conflict with the exclusive jurisdiction conferred upon the provinces by the constitution with respect to those numerated classes of subjects in section 92 of the act, and some of the articles of the treaty deal in terms with matters solely within the exclusive jurisdiction of provincial legislatures, being designated and named classes of subjects over which the legislature alone has jurisdiction-not jurisdiction concurrently with this parliament but exclusive jurisdiction in the terms of the constitution itself. I merely submit the matter to the committee because it was new to me when I first read this treaty, and I felt that it was of considerable importance and at least worthy of the attention of the committee and possibly of the law officers of the crown, as well as the attention of those responsible for our commitments with respect to foreign treaties.

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LIB

William Lyon Mackenzie King (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Liberal

Mr. MACKENZIE KING:

There is just one point with regard to what my hon. friend has said. I agree with him that in negotiating any treaty the federal government should have the utmost regard for all matters reserved to the exclusive jurisdiction of the provinces, but I think my hon. friend will agree that as to the Dominion and the empire as a whole, at the time the British North America Act was drafted the position with respect to treaty-making powers was not as clear at it is to-day. It is now conceded with respect to matters of primary or exclusive concern to the Dominion that we have the full right to negotiate, sign and ratify a treaty which formerly might have been held to belong to the British Empire as a whole. The powers of this parliament with regard to a treaty such as we are now discussing are complete in all particulars, and are not affected by the wording of the section as it appears.

Treaty with Spain

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LIB

Lucien Cannon (Solicitor General of Canada)

Liberal

Mr. CANNON:

I have listened very attentively to the argument put forward by the leader of the opposition. The hon. gentleman has stressed one point-that it would seem a rather extraordinary thing that the federal government would be able to impose obligations on the provinces in connection with matters and subjects which are enumerated in the British North America Act as being within the exclusive jurisdiction of those provinces. That is the argument which my hon. friend put before the committee. But when we come to examine the relative authority of both the federal parliament and1 the provincial legislatures throughout the Dominion we have to make a distinction between the authority of the Dominion government acting in internal matters, and the authority of that government in matters which are outside of Canada and are international in character. It is no new principle to-day to say that one authority could impose obligations on a provincial or secondary power. For instance, up to recent years the Imperial government could impose obligations in international matters on the Dominion by legislation passed in the Imperial house in relation to questions which were enumerated as being within the exclusive jurisdiction of the Dominion parliament. Why could it be so? It could be so because the British government at that time was the authority which could deal in these matters with foreign powers. Now Canada has altered her position. To-day if we wish to enter into agreements, or if we wish to sign any treaties with foreign countries, we have an authority in Canada that is able to do so and that authority is the federal parliament. Section 132 of the British North America Act covers this matter, but as the leader of the opposition has rightly said, when the British North America Act was enacted in 1867 the relation, as between this Dominion and the British parliament in connection with international matters was not that which exists to-day. In 1867 it was said that when the British government entered into a treaty with some country which affected Canada, the authority in Canada which would provide that the obligations under the treaty would be lived up to would be the Dominion parliament. Now the situation is somewhat changed, and no treaty is to be regarded as binding on Canada unless that treaty has been signed or ratified by this country itself. But there is no doubt in my mind that whenever, in any treaty, there is a stipulation which affects a province, that province is bound by any act of this federal parliament, otherwise it would be absolutely impracticable for Canada to deal with foreign countries.

In conclusion I wish to call your attention to a similar situation which exists in the United States. The states in the American union have much greater and much wider powers than the provinces in Canada, because if in Canada the residuary power lies within federal jurisdiction, in the neighbouring union the residuary power lies within the jurisdiction of the states. To put my argument in another form: When the United States of

America came into existence the different states retained their authority except and only to the limit of the authority which they conceded to the federal government. But here in Canada all authority was given to the central government except and in so far only as authority to deal with local matters was given to the provinces. So that even though the individual states of the union have a much greater authority than our individual provinces, the American government enters frequently into treaties with foreign powers. Every provision of those treaties is lived up to and the central government at Washington sees to it that treaties are properly observed. The doctrine of exclusive legislation by the provinces may apply when it is a question of internal administration in Canada, but when it comes to international matters the one central authority is empowered to deal with these matters and it can do so under the three existing provisions of the British North America Act: first, by

exercising the authority which is given to us to pass any law which is necessary for the peace, order and good government of Canada; secondly, under the authority which we have by reason of our possessing the residuary powers; thirdly, from the expressed authority which is given to us by section 132 of the British North America Act.

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April 16, 1928