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Attorney General (Que.) v. Kellogg’s Co. of Canada et al.

[1978] 2 SCR 211 Court SCC Decision date 1978-01-19 English

PartiesAttorney-General of the Province of Quebec Appellant·Kellogg’s Company of Canada and Kellogg’s of Canada Limited Respondents

Counsel (10)
Raynold Langlois and André Tremblay, for the appellant.
Philippe Cas grain, Q.C., Pierre Fournier and Claude Laporte, for the respondents.
Paul Ollivier, Q.C., and Alice Desjardins, Q.C., for the Attorney General of Canada.
J.D. Hilton, Q.C., for the Attorney-General of Ontario.
Stephen Grace, for the Attorney-General of Nova Scotia.
W.G. Burke-Robertson, Q.C., for the Attorney-General of British Columbia.
William Henkel, Q.C., for the Attorney-General of Alberta.
Ken Lysyk, Q.C., and G.V. Peacock, for the Attorney-General of Saskatchewan.
Solicitors for the appellant: Langlois, Drouin & Laflamme, Quebec.
Solicitors for the respondents: Byers, Casgrain, McNally, Dingle, Benn & Lefebvre, Montreal.

Judges Laskin, Bora; Martland, Ronald; Judson, Wilfred; Ritchie, Roland Almon; Spence, Wishart Flett; Pigeon, Louis-Philippe; Dickson, Robert George Brian; Beetz, Jean; de Grandpré, Louis-Philippe

Decision Majority (4) · MARTLAND J.

On appeal from Quebec

Subjects Constitutional law

Contents

Majority

The judgment of Laskin C.J. and Judson and Spence JJ. was delivered by

THE CHIEF JUSTICE (dissenting)—The issue in this case is whether a provincial statute and a regulation thereunder relating to advertising intended for children may constitutionally be applied to preclude a manufacturing company from advertising its products on television through picture signals received in the Province from television stations in the Province. I have had the advantage of seeing the reasons proposed by my brother Martland in which he has set out the relevant legislation and regulation, and also the two constitutional issues raised in this appeal. Unlike him, I would answer both questions in the affirmative, treating the second question, however, as more properly one concerning the power of a Province to give its legislation an extraprovincial reach. It is not strictly necessary to deal with the second question and I would be content to affirm the majority of the Quebec Court of Appeal which gave an affirmative answer to the first question and did not go beyond it.
This Court established in two recent decisions that federal competence in relation to television, and in relation even to cablevision which relies on and retransmits television signals, embraces exclusive authority to deal with the content of television programmes: Capital Cities Communications Inc. v. Canadian Radio-Television Commission, judgment delivered on November 30, 1977 and as yet unreported[3]; The Public Service Board et al. v.
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Dionne et al., judgment delivered on November 30, 1977 and as yet unreported[4]. We are urged, however, to say that because the provincial statute and regulation are invoked against the advertiser and not against the medium and that because the Province may control advertising in the Province by persons doing business there, where the business is subject to provincial regulatory control in the Province, there is no intrusion upon federal competence in relation to television.
I am unable to accept this approach to the central issue in this appeal. In my opinion, it is an approach which runs counter to the position taken by this Court in McKay v. The Queen[5]. There, a zoning by-law forbade the display of signs on certain residential property except as expressly permitted. It was addressed to the occupier of the property, analogously to the situation here, where the prohibition was addressed to the advertiser. Nonetheless, this Court, albeit by a majority only, held that the by-law could not constitutionally be applied to prevent the posting of federal election signs on the property that was subject to the by-law. Matters relating to federal elections and to the conduct thereof are, of course, within exclusive federal competence. If the by-law in the McKay case would not validly apply to federal election signs I do not see how the legislation and regulation here can validly apply to the use of television. To hold that it can is to overrule what was decided in the McKay case.
We are not concerned here with the use of advertising in any general sense or as related to some activity, whether it be a local trade or the practice of a profession, which is within provincial legislative jurisdiction. Cases such as Cowen v. Attorney-General for British Columbia[6], do not, therefore, touch the matter that is before us. We are concerned rather with the right to resort to a particular medium which is within exclusive federal competence, and the generality of the challenged provincial legislation and regulation does not aid the Province in extending its prohibition of
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advertising to a medium which is outside of its legislative jurisdiction. The effect of the position taken by the appellant and by supporting intervenors is to uphold the provincial legislation and regulation even if they expressly forbade an advertiser to use cartoon advertising on television, the theory being that it is the advertiser who is aimed at and not the television stations in the Province. I regard this as no less vulnerable than the by-law zoning land against use as an airport, which this Court struck down in Johannes son v. Rural Municipality of West St. Paul[7].
The principle espoused by the appellant in this case amounts to an assertion of some sort of ancillary power in the Province, an assertion that if the Province has a legislative power base in relation to some activity or trade in the Province it may constitutionally extend its authority to embrace objects which, strictly, are outside its competence. The argument would have the Court determine the aim or purpose of the provincial legislation and, finding it valid from a provincial point of view, would have the Court permit an extension into an otherwise forbidden field. This is not and has never been part of our constitutional prescriptions. Provincial powers are limited, and it has always been a canon of construction to interpret and confine provincial legislation to matters within its specified powers where its terms would, in their generality, support a wider compass. This was the technique employed in Shannon v. Lower Mainland Dairy Products Board[8] and the technique employed in the McKay case, supra.
In so far as the British North America Act may be said to recognize an ancillary power or a power to pass legislation necessarily incidental to enumerated powers, such a power resides only in the Parliament of Canada: see Attorney-General of Ontario v. Attorney-General of Canada[9]. However, it has been made manifest by this Court that
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it is not invariably necessary for the Parliament of Canada to rely on an ancillary power to support its competent legislation. It may be supported in the ordinary way by evaluation of the thrust of the legislation: see Nykorak v. Attorney-General of Canada[10]. Indeed, as was shown recently by the judgment of this Court in John A. MacDonald and Railquip Enterprises Ltd. v. Vapor Canada Ltd.[11], the Parliament of Canada can no more trespass on a provincial field than can a Province encroach upon a federal field of legislative power. This cannot be done directly by expressly embracing matters outside of the competence of the legislating authority, nor can it be done indirectly by the silent approach, by refraining from explicit inclusion but then proceeding to an embracing application.
It is this indirect approach which is evident here and I would reject it.
This case, on its facts, does not raise an issue as to the power of a Province, under the legislation and regulation now before us, to apply them to forbid an advertiser to use a telecast originating in another Province but seen in the legislating Province. That would be to reach into extraprovincial activity as well as into a medium which is within exclusive federal competence even in respect of purely intraprovincial operations. I put this situation simply to expose the assertion of the appellant herein for what it is, namely, an attempt to control the content of television programmes. I do not think a rational distinction can be drawn between television programmes which originate with the television station or come in from outside the Province and those which are bought and paid for by a commercial advertiser. Whether and in what circumstances he can use that medium is for its regulatory agency to determine under competent federal legislation.
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I would dismiss the appeal with costs. There should be no costs to or against any of the intervenants.

The judgment of Martland, Ritchie, Pigeon, Dickson, Beetz and de Granpré JJ. was delivered by

MARTLAND J.

MARTLAND J.—Paragraph (o) of s. 102 of the Consumer Protection Act, c. 74, Statutes of Quebec, 1971, empowered the Lieutenant Governor in Council to make regulations “to determine standards for advertising goods, whether or not they are the object of a contract, or credit, especially all advertising intended for children”. In pursuance of this authority O.C. 3268-72 was enacted dated October 31, 1972, to amend the General Regulations enacted as O.C. 1408-72, dated May 24, 1972, by adding Division XI-A entitled “Advertising intended for children”. Paragraph (n) of s. 11.53, contained in this Division, provided that:
11.53 No one shall prepare, use, publish or cause to be published in Quebec advertising intended for children which:
…
(n) employs cartoons:
The French version of par. (n) reads:
n) emploie un dessin animé ou une bande illustrée (cartoon);
Four complaints were filed by the appellant against the respondent Kellogg’s Company of Canada which, along with the respondent Kellogg’s of Canada Limited, are hereinafter jointly referred to as “Kellogg”, alleging breaches of this regulation in connection with televised advertisements of Kellogg’s products over Channel 7 in Sherbrooke and Channels 6 and 12 in Montreal. The appellant sought an injunction to restrain the commission of further infractions.
In the petition for the issuance of an injunction order the appellant alleged that Kellogg [TRANSLATION] “did prepare, use, publish or cause to be published advertising intended for children which employed a cartoon, namely, an advertisement for a Kellogg product shown on the same channel”.
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Kellogg’s solicitors made certain admissions, which included the statement that several paragraphs of the petition should be modified [TRANSLATION] “by inserting the words “in the province of Ontario and for T.V. broadcasting in the province of Quebec” after the word “did” in each of them, and the same are admitted as modified”.
Kellogg opposed the issuance of an injunction order on the ground that par. (n) was unconstitutional or inoperative to the extent that it applied to the use of cartoons on television in advertising intended for children.
The trial judge ordered the granting of the injunction. His decision was reversed on appeal by a majority of two to one.
The constitutional issues raised on the appeal to this Court were defined as follows:
(1) Is Section 11.53(n) of the General Regulation (A.C. 1408-72 of the 24th of May 1972) adopted pursuant to the Consumer Protection Act (L.Q. 1971, c. 74) as amended by regulation A.C. 3268-72 of the 31st of October, 1972, unconstitutional, ultra vires or inoperative to the extent that it applies to the publication and to the use of cartoons on television in advertising intended for children?
(2) Is the said section unconstitutional, ultra vires or inoperative for the reason that, to the extent that it prevents the publication in Quebec of advertising produced in Ontario, it encroaches on Parliament’s legislative power in respect of interprovincial trade?
The Attorney-General of Canada has intervened to support the judgment, holding the impugned enactments ultra vires; the Attorneys-General for Ontario, Nova Scotia, British Columbia, Saskatchewan and Alberta intervened to support the appeal.
Two points should be noted at the outset. The first is that the injunction was sought, not against the television stations which televised the advertisements, but as against Kellogg, the manufacturer of the goods which it sought to advertise by means of animated cartoons. The second is that
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the attack against par. (n) is limited. The power of the province to enact this provision is not questioned, except to the extent that it would apply to the use of cartoons on television.
This being so, it is not necessary to consider the general power of a province to exercise control over advertising in Quebec intended for children. The provincial power to enact such legislation under s. 92(13) and (16), if not under s. 93, of the British North America Act would appear to be clear. The basic issue is as to whether a provincial law restricting the type of advertising intended for children which may be used by a manufacturer or vendor of goods within the province can preclude him from advertising, by means of television, in breach of the restriction.
The majority of the Court of Appeal took the view that the regulation in question was an attempt to legislate on the content of broadcasting, that this was a matter exclusively within federal legislative power and that the appellant was not entitled to its injunction. Reference was made to In re Regulation and Control of Radio Communication in Canada[12], in which the Privy Council held that the legislative power of the Federal Parliament extended to radio communication under s. 91(29) of the British North America Act as being an undertaking connecting one province with another.
Reference was then made to the judgment of the Ontario Court of Appeal in Re C.F.R.B. and Attorney-General for Canada[13], which decided that the scope of the Privy Council decision was not limited to the physical means of communication, but extended to program content. That case was concerned with the constitutional validity of s. 28 of the Broadcasting Act, R.S.C. 1970, c. B-11, which prohibited a broadcaster from broadcasting a program, advertisement or announcement of a partisan character in relation to a provincial election on the day of an election or on the day preceding it. The case is concerned with the extent of federal control over a broadcast undertaking licensed under federal legislation.
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Reference was also made to the judgment of the Federal Court of Appeal in the case of In re Capital Cities Communications Inc. et al.[14], in which, relying upon the C.F.R.B. case, it is stated, at p. 25: “The legislative authority of Parliament extends over the content of broadcasts as well as over the physical undertaking of the television reception unit”.
Subsequent to the judgment of the Court of Appeal in the present case, this Court dismissed an appeal from the judgment of the Federal Court of Appeal in the Capital Cities case. The constitutional issues involved in the Capital Cities case were as to the power of Parliament to regulate cable distribution systems and to empower the Canadian Radio-Television Commission to regulate the reception of television signals emanating from a source outside Canada and the regulation of the transmission of such signals within Canada. It was held that Parliament had such power. The judgment of this Court is not yet reported[15].
The federal power to regulate cable distribution systems was also considered in the case of The Public Service Board et al. v. Dionne et al. In that case it was held by the Court of Appeal of Quebec that the regulatory powers of the Quebec Public Service Board under the Public Service Board Act (R.S.Q. 1964, c. 229) did not extend to the regulation of a cable distribution system in Quebec. This judgment was upheld on an appeal to this Court in a decision which is not yet reported[16].
The judgment of the majority of the Court of Appeal in the present case concludes with the following statement:

[TRANSLATION] This means that television, including the intellectual content of the programs, is one of the subject-matters of legislation enumerated in s. 91 of the constitution, and consequently, any provincial legislation on the subject is of necessity inoperative (Commission du salaire minimum v. The Bell Telephone Company of Canada, [1966] S.C.R. 767).

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The cases to which I have referred specifically above all dealt with the legislative power to regulate and control broadcast undertakings engaged in the transmission and reception of radio or television signals. That power is not in issue in the present case. What is in issue here is the power of a provincial legislature to regulate and control the conduct of a commercial enterprise in respect of its business activities within the province. The majority of the Court of Appeal appears to hold the view that the federal power in respect of the broadcast undertaking is decisive. I do not think that it is.
The issue in the Bell[17] case was as to whether the Quebec Minimum Wage Act was applicable to wages paid by Bell Telephone Company, which was an undertaking of the kind described in subs. 10(a) and (c) of s. 92 of the British North America Act, to its employees. In deciding that it was not so applicable the ground of decision was stated as follows, at p. 777:
In my opinion, regulation of the field of employer and employee relationships in an undertaking such as that of the respondent’s, as in the case of the regulation of the rates which they charge to their customers, is a “matter” coming within the class of subject defined in s. 92(10(a) and, that being so, is within the exclusive legislative jurisdiction of the Parliament of Canada. Consequently, any provincial legislation in that field, while valid in respect of employers not within exclusive federal legislative jurisdiction, cannot apply to employers who are within that exclusive control.
Unlike the Bell Company, Kellogg is not an undertaking falling within par. (a) or par. (c) of s. 92(10) of the British North America Act and we are concerned, in this case, with the application of par. (n) of s. 11.53 of the General Regulations to it.
Turgeon J.A., who dissented in the Court of Appeal, was of the opinion that the aim and purpose of the regulation under consideration was within provincial power under s. 92(13) and (16) of the British North America Act, and that it was not rendered invalid because, incidentally, it affected a federal power. He placed reliance upon
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the judgment of this Court in Attorney-General for Ontario v. Barfried Enterprises Ltd.[18]
The legislation under consideration in that case was The Unconscionable Transactions Relief Act, R.S.O. 1960, c. 410. The Act empowered the Court to grant relief in respect of money lent if it found the “cost of the loan” to be excessive and the transaction to be “harsh and unconscionable”. The “cost of the loan” included interest. The Court’s power included power to re-open the transaction and to relieve the debtor from payment of any sum in excess of the sum adjudged by the Court to be fairly due. The validity of the Act was attacked on the ground that it was legislation in respect of interest, a subject matter under the exclusive legislative power of Parliament under s. 91(19) of the British North America Act. The Court of Appeal so found. The validity of the statute was upheld in this Court on the basis that the legislation was not in relation to interest but was legislation with respect to the amendment or reformation of a contract in which the cost of the loan was excessive and which was harsh and unconscionable. Judson J., at p. 577, said this:
The fact that interference with such a contract may involve interference with interest as one of the constituent elements of the contract is incidental. The legislature considered this type of contract as one calling for its interference because of the vulnerability of the contract as having been imposed on one party by extreme economic necessity. The Court in a proper case is enabled to set aside the contract, rewrite it and impose the new terms.
The object of the regulation in Division XI-A made under the Consumer Protection Act is clear. It is sought to protect children in Quebec from the harmful effect of the kinds of advertising therein prohibited. The power of a provincial legislature to legislate so as to restrict or prohibit certain kinds of advertising was recognized by this Court in Cowen v. Attorney General for British Columbia[19]. Legislation restricting the advertising of liquor in Ontario was upheld by Schatz J., in R. v. Telegram Publishing Co. Ltd.[20] Hinkson J., in
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Benson & Hedges (Canada) Ltd. v. Attorney-General for British Columbia[21], upheld two provincial statutes which prohibited the advertising of liquor and of tobacco in British Columbia. The submissions made by those who contested the validity of this legislation in the latter case were similar to those made in this Court in the case of Canadian Indemnity Company v. Attorney-General of British Columbia[22]. In that case a declaration was sought that the Automobile Insurance Act, 1973 (B.C.), c. 6, and the Insurance Corporation of British Columbia Act, 1973 (B.C.), c. 44, were invalid. These statutes introduced a universal compulsory insurance plan to be administered by the Insurance Corporation of British Columbia, an agent of the Crown. The effect was to create a monopoly in respect of automobile insurance in British Columbia. The attack was made by a number of insurance companies who claimed that the legislation interfered with interprovincial trade in insurance and that it was in relation to federally incorporated companies. With respect to the first point, in the judgment of this Court it was said, at p. 512:
The purpose of the legislation in question is to provide for the compulsory insurance of motor vehicles registered in British Columbia and of automobile drivers licensed in British Columbia through a corporation incorporated in British Columbia, which is a government controlled monopoly. It controls the business of automobile insurance in British Columbia.
The impact of the legislation upon the appellants’ automobile insurance business in British Columbia could not be more drastic. However, that effect of the legislation upon companies whose operations are interprovincial in scope does not mean that the legislation is in relation to interprovincial trade and commerce. The aim of the legislation relates to a matter of provincial concern within the Province and to property and civil rights within the Province.
As its name indicates, the purpose of the Consumer Protection Act is the protection of consumers in Quebec by regulating the commercial conduct of persons engaged in the sale of goods in that province. Part of this regulation involves the con-
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trol of the advertising which is used in effecting such sales. Paragraph (n), under attack in this case, is one of several restrictions imposed in connection with advertising intended for children. It forbids the use of a particular kind of advertising considered to have a special appeal to children.
In my opinion this regulation does not seek to regulate or to interfere with the operation of a broadcast undertaking. In relation to the facts of this case it seeks to prevent Kellogg from using a certain kind of advertising by any means. It aims at controlling the commercial activity of Kellogg. The fact that Kellogg is precluded from using televised advertising may, incidentally, affect the revenue of one or more television stations but it does not change the true nature of the regulation. In this connection the case of Carnation Company Ltd. v. The Quebec Agricultural Marketing Board[23] is analogous.
Kellogg is not exempted from the application of restriction upon its advertising practices because it elects to advertise through a medium which is subject to federal control. A person who caused defamatory material to be published by means of a televised program would not be exempted from liability under provincial law because the means of publication were subject to federal control. Further, he could be enjoined from repeating the publication. In my opinion the position of Kellogg in relation to this regulation is analogous. It cannot justify conduct which has been rendered illegal because it is using the medium of television.
Throughout these reasons I have stressed the fact that it is Kellogg and not the television station which is sought to be enjoined. The question is whether Kellogg’s conduct has been regulated by the provincial legislation. Whether the regulation could be applied to the television station itself or whether an injunction against Kellogg would bind such station does not arise in this case and I prefer to express no opinion with respect to it.
In my opinion par. (n) is within the power of the province to enact and applies to all persons who
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employ advertising as a means of selling their goods in the Province of Quebec.
A second argument raised by Kellogg is that which is stated in the second question defined by the Court. It is contended that because the television advertising used by Kellogg in Quebec was produced in Ontario the regulation encroached upon the federal power to legislate in respect of interprovincial trade under s. 91(2) of the British North America Act. In my opinion this contention fails. The aim of regulation (n) was certainly not to control interprovincial trade in television programs and it does not do so. The impact of the regulation may affect such trade, but only indirectly. The case made by Kellogg on this issue is the same as that submitted unsuccessfully in the Carnation case and in the Canadian Indemnity case and in my opinion cannot succeed in the light of those decisions.
The majority of the Court of Appeal did not express any view with respect to this submission. Turgeon J.A., dealt with the issue in the following passage in his reasons, with which I agree:
[TRANSLATION] Rightly or wrongly, I do not fully understand the nature of appellants’ argument. The appellant companies do not deal in the cartoons which they have had produced in Ontario for their own use in the province of Quebec—not for sale in the province of Quebec in the ordinary course of their business. In the circumstances it seems to me that this is not interprovincial trade.
In any case, it appears to me that a province is entitled to regulate the use within its own borders of a product made in another Canadian province. Otherwise, it could be maintained that provincial jurisdiction cannot prevent the sale in Quebec of food unfit for human consumption, if such food is imported from another province.
Finally, it was contended that if the regulation was, in other respects, intra vires of the province, Parliament had already legislated in respect of the matter of broadcast advertising and, this being so, the federal legislation was paramount.
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Section 16 of the Broadcasting Act, R.S.C. 1970, c. B-11, defines the powers of the Canadian Radio-Television Commission. Paragraph (b) of subs. (1) provides that, in furtherance of its objects the Commission, on the recommendation of its Executive Commission, may, inter alia, “make regulations applicable to all persons holding broadcasting licences
…
(ii) respecting the character of advertising and the amount of time that may be devoted to advertising,”
In fact the Commission has not exercised this power, and so there is no federal legislation governing the character of broadcast advertising. Consequently, this is not a case in which it becomes necessary to determine whether a conflict exists between federal and provincial legislation on similar subject matters.
In my opinion both of the constitutional questions submitted for argument should be answered in the negative. I would allow the appeal, set aside the judgment of the Court of Appeal and restore the judgment at trial, with costs to the appellant as against the respondent throughout. There should be no costs payable by or to any of the intervenants.
Appeal allowed with costs, LASKIN C.J. and JUDSON and SPENCE JJ. dissenting.
Solicitors for the appellant: Langlois, Drouin & Laflamme, Quebec.
Solicitors for the respondents: Byers, Casgrain, McNally, Dingle, Benn & Lefebvre, Montreal.

Footnotes

  1. [1] [1975] C.A. 518.
  2. [2] [1974] C.S. 498.
  3. [3] now reported [1978] 2 S.C.R. 141.
  4. [4] now reported [1978] 2 S.C.R. 191.
  5. [5] [1965] S.C.R. 798.
  6. [6] [1941] S.C.R. 321.
  7. [7] [1952] 1 S.C.R. 292.
  8. [8] [1938] A.C. 708.
  9. [9] [1894] A.C. 189.
  10. [10] [1962] S.C.R. 331.
  11. [11] [1977] 2 S.C.R. 134.
  12. [12] [1932] A.C. 304.
  13. [13] (1973), 38 D.L.R. (3d) 335.
  14. [14] [1975] F.C. 18.
  15. [15] now reported [1978] 2 S.C.R. 141.
  16. [16] now reported [1978] 2 S.C.R. 191.
  17. [17] [1966] S.C.R. 767.
  18. [18] [1963] S.C.R. 570.
  19. [19] [1941] S.C.R. 321.
  20. [20] (1960), 25 D.L.R. (2d) 471.
  21. [21] (1972), 27 D.L.R. (3d) 257.
  22. [22] [1977] 2 S.C.R. 504.
  23. [23] [1968] S.C.R. 238.

Cases cited

Statutes and regulations cited

  • Broadcasting Act
  • Unresolved citations
    • Paragraph (o)
    • s. 102 of the Consumer Protection Act
    • Paragraph (n)
    • s. 11.53
    • (n)
    • Section 11.53(n)
    • s. 92(13)
    • (16)
    • s. 93
    • s. 91(29) of the British North America Act
    • s. 92 of the British North America Act
    • (a)
    • (c)
    • s. 92(10) of the British North America Act
    • (16) of the British North America Act
    • s. 91(19) of the British North America Act
    • s. 91(2) of the British North America Act
    • Paragraph (b)
    • subs. (1)