Thursday, December 22, 2011

SCC decision on national securities regulation keeps PIPEDA's constitutionality as an open question

Today, the Supreme Court of Canada released its decision in Reference re Securities Act. The Court based much of its decision on existing caselaw, including the General Motors case, which requires certain criteria to be met for the proper exercise of the General Trade and Commerce Power:

As held in General Motors, to fall under the general branch of s. 91(2), legislation must engage the national interest in a manner that is qualitatively different from provincial concerns. Whether a law is validly adopted under the general trade and commerce power may be ascertained asking (1) whether the law is part of a general regulatory scheme; (2) whether the scheme is under the oversight of a regulatory agency; (3) whether the legislation is concerned with trade as a whole rather than with a particular industry; (4) whether it is of such a nature that provinces, acting alone or in concert, would be constitutionally incapable of enacting it; and (5) whether the legislative scheme is such that the failure to include one or more provinces or localities in the scheme would jeopardize its successful operation in other parts of the country. These indicia of validity are not exhaustive, nor is it necessary that they be present in every case. [from the headnote]

It thus remains a live issue whether PIPEDA meets these criteria. The fact that British Columbia, Alberta and Quebec are able to "opt out" by implementing their own substantially similar legislation undermines both (4) and (5).

It will be interesting to see if any such challenge is made or if the Quebec Court of Appeal reference re PIPEDA's constitutionality is ever dusted off.

1 comment:

John G said...

The Uniform Law Conference of Canada was on the verge of adopting a Uniform Privacy Act when the federal government, which had been leading the project, introduced PIPEDA and stopped working with the ULCC. The Uniform Act was never picked up again, but there was a clear potential for uniform provincial legislation (interlocking with federal law). More evidence of possible provincial action...