



COURT OF APPEAL FOR ONTARIO

CITATION: York (Regional Municipality) v. Tsui, 2017 ONCA 230

DATE: 20170322

DOCKET: C61067

Doherty, Pepall and Hourigan JJ.A.

BETWEEN

Her
    Majesty the Queen ex. rel.

The
    Regional Municipality of York

Respondent (Appellant)

and

Eric Tsui

Applicant (Respondent)

Chris G. Bendick, for the appellant

Alan N. Young, for the respondent

Daniel Huffaker, for the intervener, the Attorney
    General of Ontario

Heard: September 21, 2016

On appeal from the order of Justice William A. Gorewich of
    the Ontario Court of Justice, dated July 9, 2015 affirming the decision of
    Justice of the Peace R.S. Shousterman with reasons reported at 2013 ONCJ 643.

Pepall J.A.:

A.

Introduction

[1]

This appeal involves a constitutional battle over a municipal by-law and
    a body rub parlour.  The City of Vaughan passed By-law 315-2005 regulating the
    operation of body rub parlours in its jurisdiction. The respondent, Eric Tsui,
    owns and operates a body rub parlour that is licensed by the City of Vaughan. He
    was charged with contravening that section of the by-law governing operating
    hours.

[2]

Tsui challenged the by-law on the basis that it was unconstitutional. He
    argued that the by-law was outside of the municipalitys jurisdiction because
    it constituted criminal law.  Specifically, Tsui submitted that the by-laws
    provisions governing dress
[1]
were a prohibition against nudity and the hours of operation provision was a
    prohibition against prostitution.

[3]

A justice of the peace accepted Tsuis arguments and held that, in pith
    and substance, the by-laws provisions relating to hours of operation and dress
    were criminal in scope and invaded federal authority. As such, she struck the
    provisions as being
ultra vires
the municipality.

[4]

The Ontario Court of Justice dismissed the Citys appeal. Leave to
    appeal having been granted, the City now appeals to this court.

[5]

The Attorney General of Ontario intervened in the appeal to challenge
    the Ontario Court of Justices treatment of the scope of the provincial power
    to legislate to suppress conditions conducive to crime.

[6]

For the reasons that follow, I would allow the appeal and order a new
    trial.

B.

Background Facts

(1)

History of the By-law

[7]

About 20 years ago, body rub parlours were not permitted under the City
    of Vaughans comprehensive zoning by-law. In 1997, the City considered the
    licensing and regulation of body rub parlours. In April 1997, City Council
    directed staff to prepare a first report on suggested ways to control body rub
    parlours within the municipality and then, in March 1998, requested a second
    report on the potential implementation of a licensing by-law.

[8]

Council directed that the proposed by-law governing body rub parlours include
    restrictions on hours of operation. Residents had complained about possible
    illegal activity being undertaken at body rub parlours and the negative impact
    on surrounding areas. The hours of operation restriction would reduce the risk
    of illegal activity, which would in turn decrease the nuisance that such
    illegal activities created for surrounding businesses and residents.

[9]

Councils minutes of September 28, 1998 described some of this
    background, and addressed a September 23, 1998 report authored by Councillor
    Bernie Di Vona. The report that was reproduced in part in the minutes stated:

A strong and growing concern has been raised by many residents
    in Woodbridge regarding the presence of massage parlours
[2]
within industrial/commercial areas and most importantly, with the number of
    massage parlours that are opening, three have recently opened in Ward 3 (East
    Woodbridge). With many of these new massage parlours, their advertisements
    have included sexually explicit disclosure of the female anatomy leading one to
    conclude that the massage parlour may not carry out the use of a personal use
    establishment as desired by the City of Vaughan By-law.

Individuals have expressed that they have found large groups of
    adult males frequent some establishments mostly in the early morning hours. Should
    ladies of the night be operating in these establishments, the hours of
    restriction by-law will take the night away from the ladies of the night in
    Vaughan for the massage parlours.

Individuals operating close to a massage parlour, have
    expressed outrage that they cannot go out during their lunch to shop, walk or
    go to a restaurant, without being propositioned.

Businesses have expressed to me and also to Vaughan Council, at
    a recent Public Hearing that they are concerned with the possible establishment
    of a massage parlour.

The City of Vaughan has asked for a police investigation and it
    has been expressed that the investigation is continuing and that additional
    evidence from new massage parlours has been provided. Since the investigation
    of over 40 massage parlours, and the opening of three new massage parlours in
    Ward 3, the urgency exists that we move quickly and decisively.

It is a well known fact that specific types of businesses move
    from a highly regulated area to a low regulated area.

(a)

The 1999 By-law

[10]

On January 25, 1999, Council passed a stand-alone body rub parlour
    licensing by-law, By-law 30-99, respecting the licensing, regulating and
    inspecting of body rub parlours and those engaged in the business of providing
    body rubs in body rub parlours (the 1999 By-law). The preamble to the 1999 By-law
    stated:

WHEREAS section 224 of the
Municipal Act
, R.S.O. 1990
    c. M.45 (the Act as amended) authorizes the Council to pass by-laws for
    licensing, regulating, governing, classifying and inspecting body rub parlours
    and for revoking or suspending any such license and for limiting the number of
    licenses to be granted;

AND WHEREAS Part XVII.I of the
Municipal Act
authorizes the Council to pass by-laws for licensing, regulating and governing
    any business carried on within a municipality and includes the authority for Council
    to enact legislation with regard to persons who provide services in connection
    with any such businesses;

AND WHEREAS the Council deems it advisable, having regard to,
    among other matters, the health, welfare and safety of those within its
    jurisdiction, to enact a by-law to license, regulate, govern and inspect body
    rub parlours, and activities carried on in the business of the operation of
    body rub parlours.

[11]

The 1999 By-law addressed all manner of matters associated with the
    licensing and regulation of body rub parlours, including the design of
    premises, designated areas, signs and advertisements, and hours of operation. This
    1999 By-law was the predecessor to the substantially similar by-law that is in
    issue on this appeal.

(b)

The Zoning By-law

[12]

At about the same time it passed the 1999 By-law, the City passed By-law
    31-99. It designated commercial/industrial areas with low visibility to the
    general public as areas where body rub parlours could operate. Adult
    entertainment parlours (strip clubs) and adult video stores were also permitted
    in these areas.

(c)

The 2001 Consolidated By-law

[13]

On January 15, 2001, the City passed By-law 2-2001, which consolidated
    all City licensing by-laws for all business categories, including body rub
    parlours, into one licensing by-law. This by-law revised the hours of operation
    of establishments that served liquor to provide for a 2:00 a.m. closing, so as to
    ensure compliance with s.148(4) of the
Municipal Act, 2001
, S.O. 2001, c. 25,
which prohibits a
    municipality from regulating the hours of operation of a business that sells
    liquor under the authority of a licence issued under the
Liquor Licence Act
,
    R.S.O. 1990 c. L.19. Such businesses included adult entertainment parlours,
    which sell liquor, but did not include body rub parlours, which do not. The hours
    of operation applicable to body rub parlours remained the same as those prescribed
    in the 1999 By-law.

(d)

The 2005 By-law

[14]

In 2005, the Citys Committee of the Whole (Working Session) (a
    committee comprised of the Mayor and city councillors but not a meeting of Council)
    met to address investigation and enforcement processes and recommendations made
    by the Commissioner of Legal Services in conjunction with the Citys Senior
    Manager of Enforcement Services. One of the topics addressed related to body
    rub parlours. The April 26, 2005 minutes of that meeting included a report,
    which stated:

Although this is a matter that is covered in the Licensing By-law,
    the topic needs to be discussed separately. The City of Vaughan currently has
    23 body rub parlours of which only 5 are licensed. This kind of business has
    been known to employ young girls and immigrant women and usually operates as a
    front to prostitution. The conditions inside these operations are generally
    poor. In the past, special projects have been successful in closing some of
    these establishments down permanently, but as one closes it seems like another
    opens.

York Regional Police investigate these establishments and those
    in the other municipalities for Criminal Code and by-law violations. City of
    Vaughan Licensing Enforcement has been dedicating two days per month to
    enforcement of this industry.

York Regional Police have expressed concern that without
    targeted enforcement of this industry, the crime associated with body rub
    parlours will escalate and the potential for homicides such as what happened in
    Markham a year ago will increase. They have also written a letter complaining
    about the lack of enforcement of Body Rub operations by the City of Vaughan.



This is an area which needs dedicated staff to work towards the
    goal of eliminating illegal body rub parlours and demonstrate that commitment
    to York Regional Police.

[15]

Attached to the report was a February 21, 2005 letter to the Vaughan
    City Clerk from the York Regional Police expressing concern about enforcement
    of Vaughans body rub parlour by-law and illegal body rub establishments.

[16]

Council received the report for information purposes, but did not act on
    the recommendations as they related to body rub parlours.

[17]

On December 12, 2005, the City replaced By-law 2-2001 with By-law
    315-2005 (the 2005 By-law), as the former was set to expire on January 30,
    2006 due to the 5-year sunset provision then contained in the
Municipal Act,
    2001
. The 2005 By-law was essentially a re-enactment of By-law 2-2001. Indeed,
    Council minutes dated November 21, 2005 state: The proposed comprehensive Licensing
    By-law for the upcoming five years contains few substantive amendments. However,
    as newly required by the
Municipal Act, 2001
, it contained an explanation
    of why the municipality was licensing and imposing conditions on various
    classes of businesses. Under the heading Reasons for Licensing and Imposing
    Conditions on Classes of Businesses, those for body rub parlours and attendants
    were described in Council minutes dated November 21, 2005:

Health and Safety: to encourage safe, proper operational and/or
    business practices, including but not limited to compliance with health
    regulations, building code requirements, fire code requirements and liquor
    regulations; to conduct police background checks of principals and attendants,
    attendant age checks and any applicable medical reviews; to ensure proper
    record keeping, including proper records of appointments, bookings and
    arrangements for services;

Consumer Protection: to ensure compliance with all applicable
    regulations, including but not limited to health requirements and regulations,
    age restrictions and ensuring attendants are adequately clothed to protect
    clients from improper exposure, etc.;

Nuisance Control: to ensure compliance with zoning
    requirements, noise control and other related requirements.

[18]

The 2005 By-law is the enactment in issue on this appeal. Section 13 of the
    2005 By-law governs body rub parlours.

(2)

Charge Under Appeal

[19]

As mentioned, Tsui was charged with contravening s. 13.0(1)(h) of the
    2005 By-law, which governs the operating hours of a body rub parlour. Section
    13.0(1)(h) provides:

No Body Rub Parlour Owner or Operator may permit a Body Rub
    Parlour to open or to remain open for business except in compliance with the
    provisions of section 13.4 respecting Hours of Operation.

[20]

Section 13.4(1) provides:

No Body Rub Parlour shall be open to the public and no Owner or
    Operator of a Body Rub Parlour may permit services to be provided and no
    Attendant at a Body Rub Parlour may provide services, except on the following
    days and between the following hours:

(a)   Monday
    to Friday from 9:00 a.m. to 10:00 p.m. of the same day;

(b)   Saturday
    from 9:00 a.m. to 6:00 p.m. of the same day;

(c)   Sunday
    from 10:00 a.m. to 5:00 p.m. of the same day.

These provisions governing hours of operation are
    substantially identical to those contained in ss. 4(j) and 11 of the original
    1999 By-law.

[21]

Since 2005, from time to time, the By-law has been amended.  At the times
    of the enactments of the 1999 By-law and the 2005 By-law, the maximum penalty
    was $25,000 for an individual and $50,000 for a corporation.  Although the
    Legislature gave municipalities the power to enact a penalty of imprisonment
    for a term not exceeding one year, neither the 1999 By-law nor the 2005 By-law
    contained such a provision.
[3]

[22]

Tsui was charged with permitting a body rub parlour to be open outside
    permitted times on July 8, 2012. The certificate of offence stated that the
    fine was $400.

[23]

Tsui was not charged under ss. 13.0(1)(o) or (p), which deal with dress in
    body rub parlours. Section 13.0(1)(o) provides that every attendant at a body
    rub parlour shall be clothed in a manner in which such persons pubic area and
    buttocks, and in the case of a woman, also her breasts, are completely covered
    by an opaque material. Section 13.0(1)(p) provides that every attendant shall ensure
    that every customer in a body rub parlour is clothed in a manner in which such
    persons pubic area and in the case of a woman, also her breasts, are
    completely covered by an opaque material.

[24]

Tsui brought an application before a justice of the peace requesting
    that all of s. 13 or, in the alternative, ss. 13.0(1)(h) and 13.4, be declared
    invalid on the basis that the pith and substance of the provisions is criminal
    in scope and therefore
ultra vires
the municipalitys legislative
    competence.

[25]

The justice of the peace did not quash all of s. 13. She did quash ss. 13.0(1)(h)
    and 13.4 dealing with hours of operation and, although Tsui had not been
    charged with contravention of the dress provisions, she also quashed ss. 13.0(1)(o)
    and (p) dealing with dress.

[26]

The City appealed to the Ontario Court of Justice, and the Ontario Court
    appeal judge (OCAJ) dismissed the Citys appeal.

(3)

Reasons of the Justice of the Peace

[27]

The justice of the peace commenced her analysis by acknowledging that
    there was no dispute that the City was entitled to license and regulate body
    rub parlours. She determined that, with the exception of the provisions
    governing dress (ss. 13.0(1)(o) and (p)) and hours of operation (ss. 13.0(1)(h)
    and 13.4), the pith and substance of s. 13 was the regulation of a business,
    which falls within s. 92 of the
Constitution Act, 1867
.

[28]

In contrast, the justice of the peace held that the provisions relating
    to dress and hours of operation were, in pith and substance, criminal. She therefore
    held that those provisions were
ultra vires
the municipality.

[29]

In analyzing the dress provisions, she rejected the Citys submission
    that they addressed health and safety and consumer protection concerns. Rather,
    she concluded that they amounted to an attempt to regulate nudity. As such, they
    amounted to criminal law and were
ultra vires
the City.

[30]

She then turned to the hours of operation provisions. She considered the
    evidence of Joseph Chiarelli, a City manager responsible for the development,
    administration, and enforcement of City by-laws, including the 2005 By-law.

[31]

Chiarellis evidence was that the hours of operation provisions were
    created in response to complaints from residents regarding possible illegal activity
    being undertaken at body rub parlours, and the negative impact that it was
    having on surrounding areas. The Citys rationale behind the hours of
    operation restriction was that it would reduce the risk of illegal activity,
    which would in turn decrease the nuisance that such illegal activities created
    for surrounding businesses and residents.

[32]

The justice of the peace inferred that the illegal activity referred
    to prostitution, although she subsequently observed that prostitution is legal
    in Canada, and that nuisance concerns were to be addressed through curtailing
    illegal activity. She relied on the 2005 report to Council that described the
    concerns of York Regional Police and the need for enforcement of body rub
    parlours.
[4]
She acknowledged, however, that it was unclear whether these concerns related
    to unlicensed establishments only, or to all body rub parlours be they legal or
    illegal.

[33]

She identified one objective of the impugned by-law as being to combat
    neighbourhood disruption and disorder. This was accomplished by relocating body
    rub parlours to industrial lands in the City and setting up adult entertainment
    districts which would, among other things, encompass body rub parlours. This
    was done, she reasoned, to remove prostitution and other sex related activities
    from residential neighbourhoods. She determined that another objective of the by-law
    was to safeguard the health and safety of the public by requiring individuals
    working in body rub parlours to be healthy and of a minimum age.

[34]

The justice of the peace noted that as far back as 1998, City Council
    had indicated that the purpose of imposing hours of operation in the by-law was
    to take the night away from the ladies of the night. This addressed
    prostitution, conduct that was traditionally criminal. She relied on the
    February 21, 2005 letter from the York Regional Police and Chiarellis evidence,
    which referenced the September 28, 1998 Council minutes and the 2001 By-law, to
    support her conclusion that the hours of operation provision was an attempt to
    regulate morality. As the zoning by-law had required body rub parlours to
    relocate to industrial areas with other adult entertainment businesses, she
    concluded that the Citys claim of nuisance was muted.

[35]

She held that the City had entered into criminal law and the hours of
    operation provision was
ultra vires
the City. The justice of the peace
    also noted that the hours of operation provisions were unfairly
    discriminatory because strip clubs are permitted to stay open until 2:00 a.m.,
    whereas body rub parlours must close at 10:00 p.m.

[36]

The justice of the peace then considered the double aspect doctrine, but
    determined that it was inapplicable.

[37]

Having concluded that the dress and hours of operation provisions were
ultra
    vires
the City, the justice of the peace invoked s. 52 of the
Constitution
    Act, 1867

and quashed ss.
    13.0(1)(h), (o), (p) and 13.4 of the 2005 By-law.

(4)

Appeal to the Ontario Court of Justice

[38]

The Ontario Court of Justice dismissed the Citys appeal. The OCAJ agreed
    with the justice of the peaces analysis and determined that she was correct in
    quashing the dress and hours of operation provisions of the 2005 By-law on the
    basis that, in pith and substance, they amounted to criminal law and were
    therefore
ultra vires
the City.

[39]

The OCAJ found that the justice of the peace had correctly rejected the
    Citys submission that the by-law was enacted to regulate nuisance and health
    and safety. He held that the justice of the peace did not err in relying on the
    extrinsic evidence in reaching her conclusion that the purpose of the hours of
    operation and dress provisions was to prohibit prostitution.

[40]

The OCAJ rejected the Citys submission that the 2005 By-law was a
    lawful exercise of its delegated provincial authority to suppress conditions
    that may lead to crime. At para. 95, the OCAJ noted: When the dominant feature
    of legislation is criminal, the authority of provincial power to suppress the
    conditions that may lead to crime is eliminated. The OCAJ distinguished
Chatterjee
    v. Ontario (Attorney General)
, 2009
    SCC 19, [2009] 1 S.C.R. 624,
because it involved legislation aimed
    at the general suppression of crime, as opposed to the singling out of a particular
    offence (in this case, prostitution).

[41]

The OCAJ reviewed the history and context of the legislation and
    observed that there was a clear connection between the enactment of the by-law
    and the desire to eliminate prostitution. He noted the references in the
    extrinsic evidence to ladies of the night and to body rub parlours operating
    as fronts for prostitution, as well as the letter from the York Regional Police
    enlisting the Citys help in enforcing the body rub parlour licensing regime.

[42]

He referenced the maximum fine of $100,000, which he concluded
    reinforced the justice of the peaces conclusion that the effect of the by-law
    is to stiffen, supplement or replace the criminal law.

[43]

The OCAJ also observed that there was only one report addressing
    nuisance concerns. It was from 1999, and, since then, there had been no
    evidence of nuisance concerns. He agreed that nuisance concerns would be
    muted because body rub parlours are confined to industrial areas.

[44]

Moreover, at para. 96, he echoed the justice of the peaces concerns and
    questioned how it could be said that nuisance caused by body rub parlours,
    which serve no alcohol, is such that they must close by 10:00 p.m., whereas the
    nuisance caused by adult entertainment establishments, which do serve alcohol, is
    either minimal or non-existent such that they are allowed to stay open until 2:00
    a.m.

[45]

He stated, at para. 96:

It is reasonable to conclude, as did the Justice of the Peace
    in the case at bar, that the enforcement and crackdown of 2006 was not caused
    by nuisance concerns but rather as a result of pressure from the York Regional
    Police who were unequivocal in what they were targeting.

[46]

Citing the Ontario Court of Justices decision in
1270627 Ontario
    Ltd. v. Kanata (City)
(1998), 49 M.P.L.R. (2d) 170 (Ont. S.C.), the OCAJ held
    that a law will not be upheld if there is a disassociation between the law and
    its reported objective. He likened the facts in this case to those in
Westendorp
    v. The Queen
, [1983] 1 S.C.R. 43, where the Supreme Court held that a
    by-law prohibiting a person from being on the street for the purposes of
    prostitution was
ultra vires
the City of Calgary.

[47]

In conclusion, the OCAJ found that the justice of the peace did not err
    in finding that in pith and substance, the impugned by-law provisions amounted
    to criminal law and therefore were
ultra vires
the City.

C.

Scope of the Appeal

[48]

To reiterate, Tsui was charged with contravening s. 13.0(1)(h) of the
    2005 By-law, by permitting a body rub parlour to be open outside of the
    permitted times, which are set out in s. 13.4. He was not charged with
    contravening either of the dress provisions found in ss. 13.0(1)(o) and
    (p). Accordingly, we must address the preliminary question of whether this
    court should limit the scope of the appeal to the provisions of the 2005 By-law
    under which Tsui was actually charged.

[49]

This court limited the scope of an appeal in similar circumstances in
R.
    v. Banks
, 2007 ONCA 19, 84 O.R. (3d) 1, a case involving charges of
    squeegeeing contrary to the
Safe Streets Act, 1999
, S.O. 1999, c. 8,
and the
Highway
    Traffic Act
, R.S.O. 1990, c. H.8.  In the absence of a live controversy,
    this court limited the appeals scope to the challenge of the constitutionality
    of the provisions of the provincial statutes under which the appellants were
    actually charged. In doing so, Juriansz J.A. noted, at para. 26, that making
    unnecessary pronouncements about the constitutionality of legislative
    provisions is an unwarranted exercise of judicial power. However, the parties
    were able to rely on the entire statute to assist in discerning the purpose and
    effects of the particular provisions in controversy.

[50]

Here, counsel for Tsui acknowledges that Tsui was only charged under
    the operating hours provision of the 2005 By-law and conceded that there was no
    jurisdiction for the justice of the peace to decide the dress provision. However,
    he also submitted that the dress provisions were relevant to the
    characterization of the by-law.

[51]

I propose to proceed on a basis similar to that adopted by this court in
    the
Banks
decision. As such, while only ss. 13.0(1)(h) and 13.4 of the
    2005 By-law dealing with hours of operation are in issue, reference may be had
    to the entire by-law, including the dress provisions, so as to characterize and
    ascertain the purpose and effect of the subsections under which Tsui was
    charged and their constitutionality.

D.

Issues

[52]

Pursuant to s. 139 of the
Provincial Offences Act
, R.S.O. 1990,
    c. P.33, an appeal lies from the Ontario Court of Justice to this court, with
    leave, on special grounds, upon any question of law alone. On September 18th,
    2015, Sharpe J.A. granted leave to appeal the decision of the OCAJ on three
    questions of law. These questions are at issue on this appeal:

i.

Did the OCAJ err in his consideration of the pith and substance of the
    by-law by focusing exclusively on the extrinsic evidence and failing to engage
    in the exercise of characterizing the purpose and effect of the provision of
    the by-law as it was enacted?

ii.

Did the OCAJ err by failing to give proper scope to the municipal
    objective of legislating to suppress conditions likely to produce crime?

iii.

Did the OCAJ err by holding that, in legislating conditions to suppress
    crime, a municipality cannot target a specific crime but must aim at crime in
    general?

E.

Discussion

[53]

First, I will address the standard of review, followed by a discussion
    of the constitutional framework, the municipal context, and the relevant criminal
    law provisions. Lastly, I will address the three questions of law at issue in
    this appeal.

(1)

Standard of Review

[54]

The standard of review on questions of constitutional interpretation is
    correctness. That said, the Supreme Court in
Bedford v. Canada (AG)
, 2013 SCC 72, [2013] 3 S.C.R. 1101,
established that absent reviewable error in the trial judges appreciation of
    the evidence, an appellate court should not interfere with the trial judges
    conclusions on social, legislative or adjudicative facts:
Bedford
, at
    paras. 49 and 56.

(2)

Constitutional Framework

[55]

The fundamental issue raised by this appeal involves a division of
    powers analysis. Was the enactment of the 2005 By-law within the Citys
    jurisdiction? Put differently, are the by-law provisions
ultra vires
the City, because they relate to a subject matter that is within the exclusive
    jurisdiction of Parliament under the
Constitution Act
,
1867
?

[56]

The
Constitution Act, 1867

gives Parliament exclusive
    legislative authority over criminal law (with the exception of the constitution
    of courts of criminal jurisdiction) under s. 91(27). The provinces are given exclusive
    legislative authority over (i) Shop, Saloon, Tavern, Auctioneer, and other Licences
    in order to the raising of a Revenue for Provincial, Local, or Municipal
    Purposes, under s. 92(9), and (ii) property and civil rights in the
    province, under s. 92(13). Thus, the provinces have authority to regulate the
    conduct of most businesses and recreation in the province: see P.W. Hogg,
Constitutional
    Law of Canada
, loose-leaf (2016-Rel. 1), 5th ed. (Toronto: Thomson Reuters
    Canada Ltd., 2007), at pp. 18-19. That authority extends to the imposition of
    limits on the hours of operation of commercial establishments:
Lieberman v.
    The Queen
,
[1963] S.C.R.
    643. Under s. 92(15) of the
Constitution Act, 1867
, the provinces also
    have the authority to impose punishment by fine, penalty or imprisonment for
    the purpose of enforcing otherwise valid provincial laws.

[57]

The Supreme Court has provided considerable guidance on how to proceed
    with a division of powers analysis.

(a)

Pith and Substance

[58]

The first step is to determine the matter of the legislation in issue.
    The analysis involves an examination of: (i) the purpose of the enacting body,
    and (ii) the legal effect of the law:
Reference re

Firearms Act
,
    2000 SCC 31, [2000] 1 S.C.R. 783, at para. 16. This exercise is traditionally
    known as determining the laws pith and substance:
Chatterjee
,
at para. 16.

(i)

Purpose

[59]

The purpose of the enacting body is determined by examining both
    intrinsic and extrinsic evidence:
R. v. Keshane
, 2012 ABCA 330, 69 Alta. L.R. (5th) 1
,
    at para. 21, leave to appeal refused, [2013] S.C.C.A. No. 53.

[60]

Intrinsic evidence consists of the content of the enactment itself. In
Chatterjee
,
    Binnie J. observed, at para. 17: While a court is not bound by an enactments purpose
    clause when considering the constitutional validity of an enactment, a
    statement of legislative intent is often a useful tool.

[61]

Extrinsic evidence, such as legislative debates or Hansard, may also be relevant
    in determining the purpose of the enacting body, but the evidence must be
    reliable and should not be given undue weight. The Supreme Court addressed this
    point in
Firearms Reference
, at para. 17:

A laws purpose is often stated in the
    legislation, but it may also be ascertained by reference to extrinsic material
    such as Hansard and government publications. While such extrinsic material was
    at one time inadmissible to facilitate the determination of Parliaments
    purpose, it is now well accepted that the legislative history, Parliamentary
    debates, and similar material may be quite properly considered as long as it is
    relevant and reliable and is not assigned undue weight. Purpose may also be
    ascertained by considering the mischief of the legislation  the problem
    which Parliament sought to remedy. [Citations omitted.]

[62]

Importantly, the purpose of the enacting body must
    not be confused with the enacting bodys motive, or with the motive of any
    individual member: see
Canada Post Corporation v. Hamilton (City)
,
2016 ONCA 767, 403 D.L.R. (4th) 695, at para. 40;
Quebec
    (AG) v. Canada (AG),
2015 SCC 14, [2015] 1 S.C.R. 693, at
    paras. 35-38.

(ii)

Legal Effect

[63]

When examining the legal effect of the enactment, the court looks at how
    it affects the rights and liabilities of those subject to its terms and the
    actual or predicted practical effect of the law:
R. v. Morgentaler
,
[1993] 3 S.C.R 463, at pp. 482-3.

(b)

Assignment to a Head of Power

[64]

Once the pith and substance has been identified, the second step in the
    analysis is to assign the matter of the challenged legislation to a head of
    power under either ss. 91 or 92 of the
Constitution Act, 1867
.

[65]

A good deal of overlap between property, an area of provincial
    jurisdiction, and crime, an area of federal jurisdiction, may be expected. In
Chatterjee
,
    at para. 24, Binnie J. explained this overlap by quoting from p. 403 of
Reference
    re Adoption Act
, [1938] S.C.R. 398:

While, as subject matter of legislation, the
    criminal law is entrusted to the Dominion of Parliament, responsibility for the
    administration of justice and, broadly speaking, for the policing of the
    country, the execution of the criminal law, and
the
    suppression of crime
and disorder
, has from the beginning of
    Confederation been recognized as the responsibility of the provinces. [Emphasis
    in original.] [Citations omitted.]

[66]

An example of this overlap is found in
Bédard
    v. Dawson
, [1923] S.C.R. 681. There, the Supreme Court
    upheld the validity of a provincial law that authorized a judge to close a common
    bawdy house for up to one year, notwithstanding the prohibition in the
Criminal
    Code

against keeping a common bawdy house. The court
    held that the impugned law dealt with property and civil rights by providing
    for the suppression of a nuisance. In concluding that the law was within the
    provinces jurisdiction, Idington J. stated, at p. 684:

[I]
t is the duty of the legislature to do
    the utmost it can within its power to anticipate and remove, so far as
    practicable, whatever is likely to tend to produce crime.

Further, Duff J. stated, at p. 684:

The legislation impugned seems to be aimed at suppressing
    conditions calculated to favour the development of crime rather than at the
    punishment of crime. This is an aspect of the subject in respect of which the
    provinces seem to be free to legislate.

[67]

Where measures enacted pursuant to a provincial power overlap with a
    federal power, the court must identify the dominant feature of the measure:
Chatterjee
,
at para. 29. If the dominant feature is
    the subject matter of provincial authority, the enactment will not be
    invalidated because of an incidental intrusion into the criminal law:
Chatterjee
,
    at para. 29.

[68]

Chatterjee
dealt with a provincial civil
    forfeiture law that was enacted to compensate victims of crime and to deter
    crime. The former purpose was within provincial competence. The latter purpose
    was considered to be broad enough that both the federal and provincial
    governments could pursue it. In that case,
the Supreme Court discussed
    the provinces jurisdiction to suppress conditions likely to favour the
    commission of crimes. Binnie J. stated, at para. 40:

The Constitution permits a province to enact
    measures to deter criminality and to deal with its financial consequences so
    long as those measures are taken in relation to a head of provincial competence
    and do not compromise the proper functioning of the
Criminal Code
.



There is no general bar to a provinces enacting
    civil consequences to criminal acts provided the province does so for its own
    purposes in relation to provincial heads of legislative power. [Citations
    omitted.]

[69]

Further, in
Goodwin v. British Columbia
    (Superintendent of Motor Vehicles
)
, 2015 SCC
    46, [2015] 3 S.C.R. 250, the Supreme Court affirmed, at para. 32: [A]
    provincial statute will not invade the federal power over criminal law merely
    because its purpose is to target conduct that is also captured by the
Criminal
    Code
.

[70]

As described by the intervener, provincial laws have been upheld in a
    range of activities that are the subject of
Criminal Code
provisions. In
    addition to
Bédard
,

other examples include: banning nude
    entertainment in licensed establishments notwithstanding the provisions in the
Criminal
    Code
regarding nudity (
Rio Hotel Ltd. v. New Brunswick (Liquor
    Licensing Board)
, [1987] 2 S.C.R. 59, at pp. 63-5); and requiring the
    registration of sex offenders, notwithstanding the provisions in the
Criminal
    Code
regarding sexual assault (
R. v. Dyck
, 2008 ONCA 309, 90 O.R.
    (3d) 409, at paras. 52, 59 and 60).

[71]

Overlapping powers are often unavoidable. The double aspect doctrine
    acknowledges that some laws simultaneously have both a federal and a provincial
    purpose, roughly equal in importance, and both levels of government may
    legislate with respect to different aspects of the same matter. Provided that
    the federal and provincial laws do not conflict, that is, they are not
    contradictory, and that each laws purpose is anchored in an appropriate head
    of power, both laws will be deemed valid:
Canadian Western Bank v. Alberta
,
    2007 SCC 22, [2007] 2 S.C.R. 3, at para. 30;
Rio Hotel
, at pp. 65-6;
Alberta
    (Attorney General) v. Moloney
, 2015 SCC 51, [2015] 3 S.C.R. 327, at para.
    15; Hogg, at pp. 15-12 to 15-14.

[72]

Most importantly, a healthy approach to federalism mandates a
    presumption of constitutionality. The division of powers analysis is shaped by
    this principle.

[73]

In summary, the pith and substance of the enactment is determined by examining
    its purpose and legal effect. The examination may include both intrinsic and
    extrinsic evidence. Only then is regard had to the heads of legislative
    competence. A province may legislate in relation to conduct that is encompassed
    by the
Criminal Code
,
provided that the pith and substance of the law relates to a provincial head of
    power and the federal and provincial legislation do not conflict.

(3)

Municipal
    Context

[74]

A by-law is a creature of a municipality. As a municipalitys authority
    is delegated by the provincial legislature, a by-law must be rooted in
    provincial authority.

[75]

As mentioned, under the
Constitution Act, 1867
, the province
    has legislative licensing authority to raise revenue for, among other things,
    municipal purposes. Both the
Municipal Act
, R.S.O. 1990, c. M.45
[5]
,
    and the
Municipal Act, 2001
delegate authority to municipalities. The
Municipal
    Act
governed the passage of the original 1999 By-law, and the
Municipal
    Act, 2001
was in place at the time of the enactment of the 2005 By-law dealing
    with the issues in this appeal.

[76]

The
Municipal Act, 2001
introduced some new provisions relevant
    to this case that were not contained in the
Municipal Act
. Although both
    statutes provided that a local municipality may license, regulate and govern
    any business wholly or partially carried on within the municipality,
[6]
a limitation on this authority existed in s. 150(2) of the
Municipal Act,
    2001
that did not exist in the predecessor statute.

[77]

Section 150(2) stated that except as otherwise provided, a municipality
    may only exercise licensing powers, including imposing conditions, for the
    purposes of health and safety, nuisance control, or consumer protection. Section
    150(3) stated that a by-law licensing or imposing any condition on any business
    was to include an explanation as to why the municipality was licensing or
    imposing the conditions and how that reason related to the purposes in s. 150(2).
[7]

[78]

Both statutes also provided express power to local municipal councils to
    pass by-laws for the purposes of licensing, regulating, governing, and
    inspecting body rub parlours, and for revoking or suspending any such licence.

[79]

The statutes also provided that the power to license, regulate and govern
    a business included the power to impose conditions, including those restricting
    the hours of operation of the business.

[80]

In light of these provisions, the City had the power to enact a by-law
    licensing and regulating body rub parlours. The Citys authority extended to
    regulation of the premises, persons engaged in the business, and closing times.
    Indeed, the parties did not dispute that the City is entitled to license and
    regulate body rub parlours for the purposes of promoting health and safety, effecting
    nuisance control or ensuring consumer protection.

[81]

Finally, s. 429 of the current
Municipal Act, 2001
prescribes a
    municipalitys authority to establish fines for by-law offences. Although not
    the case in 1999 or 2005, a municipality now has the discretion to impose a
    fine of up to $100,000.
[8]
This maximum fine is higher than the fine in force at the time relevant to the
    issue of constitutionality, as, contrary to the findings of the justice of the
    peace and the OCAJ, versions of the
Municipal Act

and the
Municipal
    Act, 2001

that were in force when the 1999 By-law and the 2005
    By-law were passed each provided for a maximum fine of $25,000 for an
    individual and $50,000 for a corporation.

(4)

Relevant
    Criminal Law Provisions

[82]

As stated by Hogg in
Constitutional Law of Canada
, at pp. 18-3
    to 18-5, Parliaments power to enact criminal law has proved very difficult
    to define. In
Proprietary Articles Trade Association v. Canada (AG)
,
[1931] AC 310, at p. 324, Lord Atkin
    advanced a definition of criminal law using the question, Is the act
    prohibited with penal consequences?  However, subsequent jurisprudence considered
    this definition to be too wide; it had to be supplemented with a third
    ingredient. This ingredient was identified in
Canadian Federation of
    Agriculture v. Attorney-General of Quebec et al.
,
[1949] S.C.R. 1 (
Margarine
    Reference
), as being a typically criminal public purpose. In that case, Rand
    J. said, at p. 50, that a prohibition was not criminal unless it served a
    public purpose which can support it as being in relation to criminal law. Safeguarding
    morality was one such purpose.
[9]


[83]

In summary, to constitute criminal law, the impugned enactment requires
    a prohibition and a penal consequence.  In addition, the prohibition has to
    serve a criminal public purpose.

[84]

When the justice of the peace heard Tsuis application, this court had
    released its decision in
Bedford
. This court upheld the decision of
    the Superior Court of Justice declaring s. 212(1)(j) of the
Criminal Code
,
which prohibited living off the avails
    of prostitution, unconstitutional, and striking prostitution from the
    definition of common bawdy house for the purposes of s. 210 of the
Criminal
    Code
.

[85]

The Supreme Court agreed with that determination, except that it also found
    s. 213(1)(c) of the
Criminal Code
, which prohibited communicating in public for the purposes of
    prostitution,
to be unconstitutional.

[86]

Accordingly, at the time of the hearing, prostitution itself was not
    illegal, and prostitution was not contained in the definition of a common bawdy
    house. The latter was limited to the practice of acts of indecency.

[87]

The
Criminal Code
does address nudity. Section 174 states that
    everyone who, without lawful excuse, is nude in a public place, or is nude and
    exposed to public view while on private property, whether or not the property
    is his or her own, is guilty of an offence punishable on summary conviction.

(5)

Issue 1: The
    Pith and Substance of the By-law

(a)

Positions of the Parties

[88]

The appellant submits that the OCAJ made three errors in considering the
    pith and substance of the 2005 By-law provisions.

[89]

First, he erred by relying almost exclusively on extrinsic evidence and failing
    to consider the intrinsic evidence. The intrinsic evidence included: the
    general structure of the by-law, which revealed an intent to license and
    regulate businesses; and the by-laws purpose clause, which reflected a concern
    for the health, safety and welfare of City residents. The intrinsic evidence
    reveals that compliance with the hours of operation and dress provisions were
    conditions of holding a body rub parlour licence and that these provisions
    aimed to suppress conditions likely to produce criminal activity relating to
    the operation of a common bawdy house.

[90]

Second, the OCAJ erred by considering irrelevant extrinsic evidence that
    deserved no weight. In particular, he should not have considered the report
    that referred to comments from the York Regional Police, which post-dated the
    original enactment of the substantially similar 1999 By-law. Further, he misapprehended
    the report authored by Councillor Di Vona that is referred to in Councils
    minutes dated September 28, 1998.

[91]

Finally, the OCAJ erred by failing to consider the legal effect of the hours
    of operation provisions. The restrictions imposed by the 2005 By-law were licensing
    requirements. They did not apply to the public at large. They were not
    prohibitive, but rather were preventative in nature, and there was also no conflict
    between the
Criminal Code
and the 2005 By-law.

[92]

In contrast, Tsui submits that neither the justice of the peace nor the
    OCAJ erred in making their findings and conclusions, and deference is owed to
    their decisions.

[93]

Tsui submits that intrinsic evidence was examined. This included the maximum
    fine for violating the by-law, which Tsui argues far exceeds regulatory fines
    for related conduct in other jurisdictions.

[94]

Moreover, Tsui submits that in determining that the 2005 By-law had a criminal
    purpose, it was relevant to consider that the prior zoning of body rub parlours
    into industrial areas of the City effectively eliminated any nuisance concerns.
    Further, reliance was properly placed on the inexplicable distinction between
    body rub parlours and other adult entertainment establishments - the latter can
    stay open until 2:00 a.m. and operate with no nudity restrictions. This
    distinction properly informed the OCAJs assessment of whether the by-law was
    an attempt to supplement the criminal law. Furthermore, the dearth of evidence
    linking nudity in body rub parlours to the risk of communicable disease
    demonstrated that the restriction was a veiled attempt to supplement criminal
    prohibitions on nudity and common bawdy houses.

[95]

Finally, the findings of fact made by both courts were amply supported
    by the extrinsic evidence of an improper purpose.

[96]

As mentioned, the AG intervened in the appeal. Counsel confined his
    submissions to the issue of the scope of provincial  and by extension,
    municipal  authority to legislate to suppress conditions that are conducive to
    crime. In particular, the AG submits that the OCAJ erred to the extent that he
    held that provincial legislatures are limited to legislating to suppress
    conditions that are conducive to crime
in general
,
    and cannot legislate to suppress conditions that are conducive to a specific
Criminal
    Code
offence.

(b)

Analysis of the Pith and Substance

[97]

I would give effect to the Citys position on pith and substance. The
    pith and substance of the hours of operation provision is business licensing,
    and the courts below erred in concluding otherwise. In doing so, they failed to
    consider the relevant intrinsic evidence, considered irrelevant extrinsic
    evidence, and failed to consider the legal effect of the provision in issue.

(i)       Failure to Examine
    Intrinsic Evidence

[98]

I agree with the City that the OCAJ overlooked the failure of the
    justice of the peace to consider the intrinsic evidence. This included the
    statement of legislative intent found in the by-laws preamble, the structure
    of the by-law itself, and the absence of provisions containing characteristics
    of criminal law.

[99]

At para. 88 of his reasons, the OCAJ observed that the justice of the peace
    was clear, after assessing the real nature of the legislation, in ruling it was
ultra vires
. The difficulty with this statement is that the justice of
    the peace did not assess the legislation. Rather, she recited the two sections
    of the by-law dealing with hours of operation and then concentrated her
    analysis on extrinsic evidence relating to the by-law. Significantly in my
    view, nowhere does the justice of the peace discuss the preamble to the by-law,
    which identifies the licensing and regulatory purpose that underlies the
    enactment. To repeat, a statement of legislative intent, while not determinative,
    is a useful tool:
Chatterjee
, at para. 17. Here, the justice of the peace,
    and then the OCAJ, ignored this interpretative aid. Although form alone is not controlling,
    the intrinsic evidence must be examined: see
Morgentale
r at para. 51. That
    did not occur here.

[100]

An examination
    of the by-laws preamble reveals a stated purpose of licensing, having regard
    to health, safety, consumer protection and nuisance. The conditions of holding
    a body rub parlour licence include hours of operation and dress requirements. As
    with any other business regulated by a municipality, it is not surprising that hours
    of operation are encompassed by such a regulatory scheme.  Regulating hours as
    a condition of licensing serves to address the parameters of the operation of a
    body rub parlour and eliminates late hours that may be conducive to crime
    associated with the operation of a common bawdy house.  The provisions nullified
    by the justice of the peace were rationally connected to the Citys stated
    objective, the elimination of nuisance associated with the operation of a
    common bawdy house.  Neither judge addressed this stated purpose.

[101]

In addition, neither
    the OCAJ nor the justice of the peace examined the structure of the by-law. The
    structure reflects a process designed to issue or refuse business licences and
    to monitor compliance with the terms of those licences. The hours of operation
    and dress requirements are conditions associated with holding a body rub
    parlour licence and also suppress conditions likely to produce criminal
    activity.  They are similar to other provisions in the by-law which are
    anchored in the licensing of a business and are designed to curtail the nuisance
    caused by the presence of common bawdy houses by suppressing conditions likely
    to lead to the commission of crime.  (See s.13.3(1) c)  access to the body rub
    parlour shall be kept unlocked; s.13.3(1) d) no part of the body rub parlour
    shall be used as a dwelling or for sleeping purposes or contain therein a bed
    or other furniture which is commonly used or which may be used for sleeping
    purposes; and s.13.3(1) k)  every door to a massage room must have windows of
    a size not less than 36 cm. by 36 cm.)

[102]

An examination
    of the intrinsic evidence also reveals that the by-law contains no prohibition
    against prostitution or against keeping a common bawdy house within the City. 
    The provisions amount to preventative measures.  Moreover, the provisions do
    not apply to the public at large, but just to the regulated business.

[103]

Tsui submits
    that the by-laws extraordinary penalty, the prior zoning of body rub parlours
    into industrial areas of the City, and the Citys inexplicable distinction
    between body rub parlours and other adult entertainment establishments reflect
    the intrinsic evidence and legal effect relied upon in the lower court
    decisions. Counsel relies on
Morgentaler
,

in which the court spoke of fines ranging from
    $10,000 to $50,000 as being a reflection of a criminal law purpose.

[104]

Dealing firstly
    with the penalty, I do not accept Tsuis submission.  First, the City simply
    incorporated the quantum and language of the provincial statute into the
    various iterations of the by-law.  Second, the significance of the dollar
    amount of the fines at issue in
Morgentaler
must be looked at in the
    context of that decision, which was decided over 20 years ago. Further, s. 429
    of the
Municipal Act, 2001
only now provides for a maximum fine of
    $100,000 for municipal offences.  At the time of the original 1999 By-law and
    the 2005 By-law, the maximum fine was $50,000 for a corporation and $25,000 for
    an individual.  Lastly, the prescribed penalties applied to all activities
    regulated under the 2005 By-law, not just the body rub parlour provisions. The
    prescribed penalties did not reflect a criminal law purpose.

[105]

As for the
    location of body rub parlours in the City, the content of the original 1999 By-law
    and the 2005 By-law on operating hours and dress was identical. The nuisance at
    issue was described as being in industrial/commercial areas. The nuisance
    concern continued, despite the body rub parlours being situated in industrial
    areas.
[10]
There was no evidence that suggested that nuisance found in any
    industrial/commercial area differed from that in an industrial area.

[106]

Lastly, the
    distinction between body rub parlours and adult entertainment establishments reflected
    a jurisdictional limitation on the municipalitys legislative authority. As the
    latter category of establishments carried liquor licences, the power to
    regulate their hours of operation rested with the province and not the
    municipality.
Pimenova v. Brampton (City)
(2004), 49 M.P.L.R. (3d) 1 (Ont. S.C.)
, a decision that
    both judges relied on, failed to recognize this limitation. The City was
    entitled to address nuisance concerns relating to the presence of body rub
    parlours by enacting provisions restricting hours of operation even though it
    could not do so with respect to adult entertainment establishments.  To the
    extent it could reduce the communitys nuisance concerns, it was open for the
    City to act.

[107]

Here, the justice
    of the peace, upheld by the OCAJ, failed to consider the intrinsic evidence and
    based her decision on extrinsic evidence.  They failed to engage in the
    exercise of characterizing the purpose and effect of the by-law.  While a court
    is entitled to examine extrinsic evidence, as discussed in the next section, it
    can be dangerous to simply rely on extrinsic evidence and such evidence must be
    relevant and should not be assigned undue weight: see
Keshane
, at
    para. 21.

(ii)      Consideration of Extrinsic Evidence

[108]

This brings me
    to the extrinsic evidence. In my view, the justice of the peace  and
    subsequently, the OCAJ  relied on irrelevant extrinsic evidence. Also, in
    considering whether the by-law was enacted to curb nuisance, the courts below
    misapprehended the evidence, resulting in reviewable error.


[109]

First, there is
    no evidence that Council ever adopted or acted on the 2005 report. Indeed, the
    evidence is to the contrary; it was simply received for information purposes. 
    Secondly, there was no transcript of Councils discussions, and so, apart from
    the fact that it was received only for information purposes and not adopted,
    the record is incomplete. As stated in
Keshane
, at para. 24, caution
    must be used in relying on extrinsic evidence where the extrinsic material cannot
    be assessed in the context of a complete record.

[110]

In
Pimenova
,
    which the justice of the peace relied on, the state of the record was
    considerably different. There, the extrinsic evidence was a council report that
    was tabled immediately prior to the passage of the by-law amendments in issue. In
    any event,
Pimenova

was decided before
Chatterjee
, and the application judge in
Pimenova

did not consider the intrinsic evidence,
    the legal effect of the law, or the suppression of crime as a legitimate
    municipal objective. Rather, the application judges finding of
    unconstitutionality was largely based on the discriminatory distinction in the
    restrictions on the hours of operation relating to adult entertainment dance establishments,
    which, as discussed, a municipality had no legislative authority to regulate. As
    such, the decision is of limited assistance.

[111]

Thirdly, the
    language of the 2005 By-law on hours of operation and nudity mirrored that of
    the original 1999 By-law which predated the 2005 report.  The judges ignored
    this temporal reality.  Lastly, and in any event, Councils motives  or in
    this case, the motives of the York Regional Police  should not be the focus of
    the pith and substance analysis:
Canada Post
, at para. 40.

[112]

I also agree
    with the City that there was a misapprehension of the evidence. The contents of
    the Di Vona Report that were reproduced in Councils minutes of September 1998
    concerned the presence of [body rub] parlours within industrial/commercial
    areas and the complaints generated as a result of these establishments. The
    justice of the peace reasoned, and the OCAJ agreed, that the nuisance concern
    was muted because the body rub parlours were being moved to industrial areas.
    This was a palpable and overriding error.

[113]

The Di Vona Report
    commences with: A strong and growing concern has been raised by many residents
    in Woodbridge regarding the presence of [body rub] parlours within
    industrial/commercial areas. While some of the concerns expressed related to
    areas populated with shops and restaurants, they were not confined to those
    areas; industrial areas were included in the description, and the nuisance
    concern originated in those areas.  There was no evidence that suggested that
    the description of industrial/commercial constituted a designation that
    differed from industrial. Furthermore, in his report, Di Vona was not proposing
    a prohibition against prostitution. Taking the night away simply removed late
    hours.

[114]

Ultimately, the OCAJ
    and the justice of the peaces emphasis on the extrinsic evidence was
    misplaced. This is particularly so in light of their failure to adequately consider
    the relevant intrinsic evidence, as outlined above.

(iii)

Legal Effect

[115]

Lastly, the OCAJs
    acceptance of the justice of the peaces conclusion that the legal effect of
    the by-law was to stiffen, supplement or replace the criminal law cannot be
    sustained. The by-law provision under which Tsui was charged reflects no such
    thing. It merely prescribes the hours during which the business may operate  a
    completely legitimate objective. Business licensing falls under a provincial
    head of power. As such, it was legitimate for the by-law as a whole to address
    the suppression of conditions likely to produce crime, a topic to which I turn
    to next.

(iv)

Summary

[116]

In
    summary, the justice of the peace and the OCAJ ignored significant intrinsic
    evidence and misapprehended the evidence.  They failed to examine and
    characterize the purpose of the by-law and misstated the legal effect of the
    by-law provision in issue. The pith and substance of the hours of operation
    provision, and that of the 2005 By-law as a whole, is business licensing. The
    by-law is designed to regulate a business operating within its municipal
    borders. It was also aimed at the curtailment of nuisance, for which there was
    evidentiary support, and at suppressing conditions that are conducive to crime.

(6)

Issue 2: Suppression of Conditions Likely to Produce Crime

(a)      Positions of the Parties

[117]

The appellant
    submits that suppression of crime is a valid municipal objective. It must be
    tied to a provincial head of power  in this case, a municipalitys delegated
    authority to regulate conduct within licensed premises pursuant to ss. 92(9)
    and 92(13).  It argues that the OCAJ lost sight of the fact that the impugned
    provisions were also part of a business licensing regime, and therefore a
    municipality may regulate conduct within licensed premises pursuant to ss.
    92(9) and 92(13) even when that conduct is related to criminal law and
    morality: see
Rio Hotel Ltd
.  The OCJA failed to give proper scope to
    the municipal objective of legislating to suppress conditions likely to produce
    crime.

[118]

Further, to the
    extent there was any jurisdictional overlap, the provincial aspects of the 2005
    By-law overwhelmingly outweigh the federal aspects. The dominant purpose of the
    By-law therefore relates to ss. 92(9) and 92(13) of the
Constitution Act,
    1867
,
and the provisions
    are
intra vires
the City.

[119]

Tsui responds by
    submitting that unlike provincial legislatures, pursuant to the
Municipal
    Act, 2001
, a municipality may only exercise its licensing powers for one
    of three purposes: health and safety, nuisance, and consumer protection. For the
    2005 By-law to have been validly enacted, both the restrictions imposed and the
    conditions of crime targeted must relate to one of these three purposes.

[120]

The AG submits
    that as long as the pith and substance of the law relates to a provincial head
    of power, a province may validly legislate to suppress conditions of crime in
    relation to conduct that is also captured by an offence under the
Criminal
    Code
. Legislating to suppress conditions that are likely to favour the
    commission of crimes has repeatedly been held to be within provincial competence
    under s. 92(13) and s. 92(16) of the
Constitution Act, 1867
.

(b)     Analysis of the Citys
    Authority to Enact a By-law that Serves to Suppress Conditions Likely to Produce
    Crime

[121]

To reiterate, a
    province may enact measures to deter criminality providing they are taken in
    relation to a head of provincial competence:
Chatterjee
. The 2005
    By-law is anchored in the provinces authority over property and civil rights (s.
    92(13)) and licences (s. 92(9)). Together, these sections create a power of
    regulation through licences:
Smith v. St. Albert (City)
, 2014 ABCA
    76, 93 Alta. L.R. (5th) 295, at para. 47. The province has delegated that
    authority to the municipality through the
Municipal Act, 2001
. Accordingly,
    as the subject-matter of the 2005 By-law relates to a provincial head of power,
    namely business licensing, it was open to the municipality to enact a by-law that
    serves to suppress conditions conducive to crime.

[122]

An examination
    of the 2005 By-law as a whole reveals a licensing scheme of which the hours of
    operation and dress provisions are a part.  The by-law establishes conditions
    designed to regulate businesses operating in the municipality.  It defies
    reason that prescribed hours of operation would not be a legitimate condition
    for the licensing of a business.

[123]

As for the dress
    provision, in
Rio Hotel Ltd.
, the prohibition against nudity was a
    licensed condition in a by-law.  The Supreme Court cited with approval the
    decision of
Re Sharlmark Hotel and Municipality of Metropolitan Toronto
(1981), 32 O.R. (2d) 129.
[11]
Although the
Criminal Code
included nudity provisions, the impugned
    by-law was upheld.  Estey J. wrote, at pp. 73-4:

The by-law may have been designed
    to create conditions to prevent crime or even as legislation relating to
    morality, but it nonetheless did not encroach on the forbidden field of
    criminal law.  It is but another illustration of the subtle but discernible distinction
    between criminal legislation and regulation established to support and promote
    the operation of a valid provincial legislative object.



In each of the above-cited cases
    the provincial regulation in question was directed at the orderly operation of
    the licensed premise in question, be it a tavern, adult entertainment parlour,
    or a massage parlour.  Conduct which would detract from the efficiency and
    orderliness of these operations was either the grounds for the cancellation of
    the licence or for process in the criminal courts of the provincial offence
    established in support of the provincial regulation

The same holds true in this case.

[124]

Contrary to
    Tsuis submissions, the suppression of conditions conducive to crime was
    reflected in the preamble and structure of the by-law, and in the relevant extrinsic
    evidence. There was also evidence to support the Citys perception of nuisance.
    There is no requirement that a municipal council have hard evidence before
    passing a by-law; the evidence may be impressionistic rather than factual, and
    courts owe deference to
municipalities

in the exercise of their
    valid regulatory powers on behalf of the citizens who elect them

:
    see
Adult Entertainment Assn. of Canada v. Ottawa (City)
, 2007 ONCA
    389, 224 O.A.C. 267, at para. 30. Each level of government has a responsibility
    for its citizens. Here, the City was acting to protect its citizens from
    nuisance in the community. The presumption of constitutionality seeks to thwart
    the undermining of that objective.

[125]

In any event, the
    dominant purpose of the provisions in issue do not amount to criminal law.

[126]

First, as
    mentioned, the licensing conditions only apply to the licence holder for a body
    rub parlour, not to the public at large. It is not an enactment of general
    application. As in
Smith
, the conditions are part of a larger,
    comprehensive regulatory scheme that establishes conditions for obtaining and
    maintaining business licences: at para. 50. Second, the purpose is to reduce
    nuisance by regulating body rub parlours so as to suppress conditions conducive
    to crime. The beneficiaries of the 2005 By-law are the citizens of Vaughan, not
    the victims of any crime. Third, as reflected in the general provisions of the
    licencing by-law, the penalty for operating outside of the prescribed hours is
    a fine and/or the suspension or revocation of the licence; there is no
    prohibition of any criminal act. There is also no duplication with the criminal
    law. The provisions are preventative, not prohibitive.

[127]

The OCAJ erred
    by failing to give proper scope to the municipal objective of business
    licensing and legislating to suppress conditions likely to produce crime. The
    dominant purpose of the by-law provisions related to s. 92(9) and 92(13) of the
Constitution Act, 1867
and were the proper subject matter of
    provincial authority. Further, there was evidence of nuisance to support the
    municipalitys exercise of authority under the
Municipal Act, 2001
.

(7)

Issue 3: A Municipality May Target a Specific Crime in Enacting Conditions
    to Suppress Crime

(a)

Positions of the Parties

[128]

The appellant
    submits that the OCAJ erred in agreeing with the justice of the peace that in
    legislating conditions to suppress crime, a municipality cannot target a
    specific crime, but instead must target crime in general. This is contrary to
    the jurisprudence: see
Smith
,
Keshane
,
Prince Edward
    Island (Provincial Secretary) v. Egan
, [1941] S.C.R. 396,
Ross v. Ontario
    (Registrar of Motor Vehicles)
, [1975] 1 S.C.R. 5, and
Goodwin
.

[129]

The AG supports
    the appellants position on this issue and notes that
Chatterjee
did
    not stand for the proposition that provincial laws that suppress conditions
    conducive to particular crimes are
ultra vires
.
Goodwin
,
    which was decided after the judgment under appeal and is discussed below, is a
    complete answer to this issue.

[130]

In oral
    argument, Tsui conceded that municipalities may target a specific crime. He
    submits, however, that if a province or municipality singles out a crime, there
    is a stronger inference that the enacting body is trying to suppress crime
    because of its criminal nature, and not because of a secondary community
    impact. Tsui emphasizes that legislation to suppress the conditions conducive
    to crime must be anchored in a valid provincial head of power. There is no
    free-standing power to suppress crime.

(b)

Analysis

[131]

In my view, the
    OCAJ erred in determining that a municipality, in the exercise of provincial
    delegated authority, is limited to legislating to suppress conditions that are
    conducive to crime in general. The jurisprudence does not reflect such a
    conclusion.

[132]

The OCAJ held
    that in
Chatterjee
, the legislation was aimed at the general
    suppression of crime  no aim was taken at any particular category of criminal
    conduct. As such, he reasoned that the justice of the peace correctly concluded
    that the City was improperly targeting a specific crime, namely prostitution.

[133]

The key, as
    discussed, is that the exercise of provincial authority must engage, in pith
    and substance, a matter within provincial legislative competence. The
    legislation may then also suppress conditions conducive to crime. It matters
    not whether this extends to crime in general, or to a particular crime. The
    Supreme Court has not suggested such a limitation.

[134]

Chatterjee
must be read in context. It was addressing legislation aimed at a variety of
    unlawful activities  hence the reference to crime in general. In addition, the
    court referred with approval to
Egan
and
Ross
, two decisions involving
    provincial legislation aimed at deterring impaired driving, notwithstanding
    its status as a federal offence.

[135]

More recently,
    in
Goodwin
, the Supreme Court stated, at paras. 29 and 32:

At the end of the day, the purposes and effects of a law must
    be considered together, rather than in isolation, to determine its pith and
    substance.
No doubt the ARP [automatic roadside prohibition] scheme has
    incidental impacts on criminal law.

No doubt it targets, in part,
    specific criminal activity
and imposes serious consequences, without the
    protections attendant on criminal investigations and prosecutions. However, the
    consequences relate to the regulation of driving privileges. In my view, the
    chambers judge was correct in characterizing the pith and substance of the ARP
    scheme as the licensing of drivers, the enhancement of highway traffic safety,
    and the deterrence of persons from driving on highways when their ability is
    impaired by alcohol.



Provincial drunk-driving programs and the criminal law will
    often be interrelated. Some provincial schemes have relied incidentally on
    criminal convictions. A number of provincial courts of appeal have also upheld
    schemes that are not dependent on criminal convictions but rely incidentally on
Criminal Code
provisions.
This jurisprudence makes clear that a
    provincial statute will not invade the federal power over criminal law merely
    because its purpose is to target conduct that is also captured by the
Criminal
    Code
.
[Emphasis added.] [Citations omitted.]

[136]

It is evident
    from
Goodwin
that Tsuis submissions on this final issue must fail.
    Where the pith and substance of the legislation comes under a head of
    provincial authority, it may also aim to suppress conditions conducive to
    crime, even if those conditions relate to a specific
Criminal Code

offence.
    The OCAJ improperly narrowed the scope of provincial authority to legislate to
    suppress conditions conducive to crime.

F.

DISPOSITION

[137]

In conclusion,
    for these reasons, the decisions of the OCAJ and the justice of the peace must
    be overturned. I would allow the appeal and order a new trial. None of the
    parties requested costs and none are ordered.

Released:

MAR 22 2017                                    S.E.
    Pepall J.A.

DD                                                    I
    agree Doherty J.A.

I
    agree C.W. Hourigan J.A.





[1]
Tsui was not charged under the by-laws dress provisions.



[2]
In the minutes, body rub parlours are described as massage parlours.



[3]
Section 32 now provides that contravention of the 2005 By-law may lead to a
    fine of up to $100,000.



[4]
She stated that Councils consideration of the report took place on May 9,
    2005. There was no sworn evidence to this effect. Tsui was advised that a document
    entitled Extract from Council Meeting Minutes of May 9, 2005 was available
    online and he downloaded it from the Citys website. As discussed, based on the
    sworn evidence of Chiarelli, Council received this report, which was described
    in the minutes of the April 26, 2005 meeting of the Citys Committee of the
    Whole (Working Session), for information purposes. Similarly, the justice of
    the peaces reliance on a May 25, 2005 report was based on the same online
    source.



[5]

As repealed by
An Act to revise the Municipal Act and to amend or
    repeal other Acts in relation to municipalities
, S.O. 2001, c. 25, s. 484.



[6]
See s. 252.2(1) of the
Municipal Act

and s. 150(1) of the
Municipal
    Act, 2001
.

The
Municipal Act, 2001
has since been amended. The authority for local municipalities to license
    businesses is in s. 151(1) of the current
Municipal Act, 2001
.



[7]

Sections 150(2) and 150(3) have since been repealed.



[8]
In addition, a special fine, designed to eliminate any economic advantage or
    gain from contravention of the by-law, may exceed the sum of $100,000.
    Cumulative daily fines may also exceed the sum of $100,000.



[9]

Although not referred to by the parties,
Reference
    re Assisted Human Reproduction Act
, 2010 SCC 61, [2010] 3
    S.C.R. 457, addresses the scope of the criminal law power. However, this was in
    a regulatory context and no agreement on definition is reflected in the three
    sets of reasons.  It would appear though, that there is consensus that the
    three-part
Margarine Reference

test remains
    the starting point of the analysis.  See the discussion by Patrick J. Monahan,
    Byron Shaw and Padraic Ryan,
Constitutional Law
, 5
th
ed. (Toronto: Irwin Law Inc. 2017) at pp. 349-350
    and 361-362 and Hogg at p. 18-8 to 18-8.1.



[10]

The Di Vona Report, which describes the presence of massage
    parlours within industrial/commercial areas, was adopted by Council on September
    28, 1998 before the 1999 By-law was passed.



[11]
Later overturned by the Ontario Court of Appeal in
Re Koumoudouros and Municipality
    of Metropolitan Toronto
(1985), 23 C.C.C. (3d) 286.


