Trade Commission-Mr. Hanson
In addition to the foregoing the commission is given investigational and advisory authority in connection with commodity standards, as covered by sections 15, 16, 17, 18 and 19.
The royal commission further recommended that the dominion trade commission should have authority to regulate trade practices by means of "cease and desist" orders directed to any person engaged in industry whose conduct seemed to the commission to be unfair. This same method of mandatory regulation had been resorted to by parliament when it enacted the Board of Commerce Act, 1919, chapter 37, 1910 George V, 1919, and the Combines and Fair Prices Act, 1919, chapter 45, 1910 George V, 1919. This legislation, which was to be read together, was held to be ultra vires by the privy council in the board of commerce case above referred to in which it was held that orders issued by the board of commerce prohibiting certain retail dealers from making unfair profits was beyond the jurisdiction of the federal parliament.
The legislation setting up such a board with power to make such regulatory and mandatory orders was not clothed or made under exceptional circumstances imperilling peace, order and good government of the dominion.
In this connection Lord Haldane makes the following observations:
The first question to be answered is whether the dominion parliament could validly enact such a law. Their lordships observe that the law is not one enacted to meet special conditions in war time. It was passed in 1919, after peace had been declared, and it is not confined to any temporary purpose, but is to continue without limit in time, and to apply throughout Canada. No doubt the initial words of section 91 of the British North America Act, 1867. confer on the parliament of Canada power to deal with subjects which concern the dominion generally, provided that they are not withheld from the powers of that parliament to legislate, by any of the express heads in section 92, untrammelled bv the enumeration of special heads in section 91. In may well be that the subjects of undue combination and hoarding are matters in which the dominion has a great practical interest. In special circumstances, such as those of a great war, such an interest might conceivably become of such paramount and overriding importance as to amount to what lies outside the heads in section 92, and is not covered by them. The decision in Russell v. The Queen (7 App. Cas., 829) appears to recognize this as constitutionally possible, even in time of peace; but it is quite another matter to say that under normal circumstances general Canadian policy can justify interference, on such a scale as the statutes in controversy involve, with the property and civil rights of the inhabitants of the provinces. It is to the legislatures of the provinces that the regulation and restriction of their civil rights have in general been exclusively confined, and as to these the provincial legislatures possess quasi-sovereign
(authority. _ It can, therefore, be only under necessity in highly exceptional circumstances, such as cannot be assumed to exist in the (present case, that the liberty of the inhabitants of the provinces may be restricted by the parliament of Canada, and that the dominion can intervene in the interests of Canada as a iwhole in questions such as the present one. Tor normally, the subject matter to be dealt (With in the case would be one falling within section 92. Nor do the words in section 91, tile regulation of trade and commerce," if .taken by themselves, assist the present dominion contention. It may well be, if the parliament of Canada had', by reason of an altogether exceptional situation, capacity to interfere, that these words would apply so as to enable that [DOT]parliament to oust the exclusive character of the provincial powers under section 92.
In this connection I may observe that in the original draft of the bill three sections were included which had to do with the question of mandatory and regulatory orders, the publication of price lists and other things of a like character.
Mr. Tilley, in his opinion submitted to the government, stated as follows;
Sections 28, 29 and 30 are, I think, invalid. [DOT]By subsection (3) of 28 a person who omits to comply with an order of the commission [DOT]made under the section is guilty of an offence [DOT]and liable on indictment or summary conviction to a penalty. While this provision gives section 28 the appearance of criminal law, I am [DOT]of the opinion that parliament cannot under criminal law authorize a commission to declare [DOT]what practices are unfair and to issue orders [DOT]prohibiting the practice and then attach criminal consequences to a breach of the order. Where the matters dealt with are provincial in character, the provincial legislature can provide the sanction.
Mr. Geoffrion in his opinion of May 15 states:
Sections 28, 29 and 39 of the bill as originally drafted also appear to me to be bad. The dominion can deal with unfair trade practices [DOT]under its jurisdiction concerning criminal law [DOT]but that is not what it does here. I would [DOT]think that the judgment on the first combines act which is set aside would apply here.
I am not unmindful of the decision in the privy council in the Proprietary Articles Trade Association case, reported in 1931 Appeal Cases, page 210, where it was held that the legislation in question, being in its pith and substance within enumerated heads of section 91, it was not material that it affected property and civil rights in the province . . . and it further decided that it was unnecessary to discuss whether the legislation was intra vires also under section 91, head 2, "The regulation of Trade and Commerce." The difference between the Board of Commerce ease and the PA..T.A. case in substance is that, in the first case, the legislation endeavoured to make the commission of a prohibited offence which was not
Trade Commission-Mr. Hanson
in. its pith and substance a crime, criminal legislation. In the latter case, according to the judgment of Lord Atkin, if the legislation in its pith and substance was criminal in character, it was intra vires.
I submit, therefore, that the government was justified in not including in the bill presently before parliament provisions for the regulation of monopoly in the sense that I have outlined or for mandatory and regulatory orders such as is contemplated by the findings of the commission to which I have referred. Counsel have unanimously advised that the commission could not be clothed with these powers.
However, amendments have been introduced in bill 73, an act to amend the criminal code, (clauses 5 and 6) to carry out the recommendation of the commission with regard to unfair trade practices in so far as this may be done. A further recommendation in this connection was that the commission might require any person to publish price lists and this too was thought to be ultra vires.
The bill now before the house, therefore, naturally divides itself into five main departments of activity, namely:
1. Administration of the Combines Investigation Act.
2. Investigation of complaints respecting unfair trade practices.
3. Supervision of commodity standards.
4. Issue of new securities.
5. Price and production agreements.
There is also the general power of investigation into unfair trade practices and provision for fair trade conferences, cooperation with boards of trade, and economic investigation, to which are attached enabling powers.
A further outstanding provision of the bill is the initiation of the office of director of public prosecutions. Hitherto in Canada we have never had such an officer but in the United Kingdom they have had a director of public prosecutions with most beneficial results to the body politic, and I commend unreservedly this provision of the bill to the house and to the country.
I have not hitherto made specific reference to the powers of the commission to investigate the capital structure of companies and the issue of new securities as recommended by the royal commission. In the Dominion Companies Act itself and in the amendments contained in the bill proposed by the hon. Secretary of State will be found provisions which, in my opinion, go a long way towards meeting the recommendations of the royal commission, and in section 26 of the bill it has been provided that the commission shall have the power, if requested by the Secretary of State,
who is charged with the operation of the Companies Act, to investigate and review the capital structure of any company incorporated by or under any act of parliament proposing to issue new shares, debentures or other securities to the public. Ample provision is made for the furnishing of such information as the commission may require, and provision is further made that the commission may disapprove or reject any such issue but shall not give formal approval to an issue. These provisions, together with the provisions of the Companies Act as proposed to be amended, should go a long way to meet the recommendations of the royal commission in this regard.
I should add that on page 272 of the report the royal commission further recommended that the commission should have investigational and advisory powers upon economic questions generally. This recommendation is implemented by clause 25 of the bill. In my opinion, however, that clause requires a slight amendment by inserting in the sixth line after the words "economic council" the following words: "Established under the
Economic Council of Canada Act 1936."
I am not unmindful of the fact that in its recommendations regarding the problem of state control, the royal commission recommended the establishment of a distinct trade and industry commission with a structure consisting of five members appointed by the governor in council as a semi-autonomous board under the president of the privy council, and with a status both in its authority and in its relation to the responsible minister and parliament, to be similar to that of the board of railway commissioners with administrative, advisory and investigatory functions.
The structure of the commission set up under this act frankly does not carry out the terms of that recommendation but on the contrary constitutes a commission consisting of three commissioners, the members of which shall be the members for the time being of the tariff board as established pursuant to the Tariff Board Act, chapter 55, 1031, who shall by virtue of holding office as members of the said board and by virtue of the bill be the commissioners under this bill.
Objection may be taken to this method of constituting a dominion trade and industry commission, but I assure the house and the country that the government has given the most careful consideration to this aspect of the matter, and has arrived at the conclusion that if the functions of a dominion trade and industry commission can be efficiently carried on by a presently existing board, it is in the