



COURT OF APPEAL FOR ONTARIO

CITATION: Canada Post Corporation v. Hamilton (City), 2016
    ONCA 767

DATE: 20161019

DOCKET: C60687

Doherty, Epstein and Miller JJ.A.

BETWEEN

Canada Post Corporation

Applicant (Respondent)

and

City of Hamilton

Respondent (Appellant)

Peter Griffin and Rory Gillis, for the appellant

John B. Laskin and Yael Bienenstock, for the respondent

Stéphane Ėmard-Chabot, for the intervener, the
    Federation of Canadian Municipalities

Heard: February 2, 2016

On appeal from the judgment of Justice Alan C.R. Whitten
    of the Superior Court of Justice, dated June 11, 2015, with reasons reported at
    2015 ONSC 3615, 126 O.R. (3d) 501.

Miller J.A.:

A.

Overview

[1]

Does the respondent, Canada Post Corporation, have the authority to make
    unilateral decisions about the placement of community mailboxes? This is
    ultimately a question of constitutional law and is at the heart of this appeal.

[2]

At the time of Confederation, a national postal service was essential to
    the development of a national economy. Like much other national infrastructure,
    jurisdiction over postal services was allocated to the federal Parliament by the
Constitution Act, 1867
. Parliament most recently exercised that
    law-making power by enacting the
Canada Post Corporation Act
, R.S.C.
    1985, c. C-10 (
CPCA
), a statute that vests responsibility for
    establishing and operating the postal service in Canada Post, a federal crown
    agent.

[3]

Traditional postal services play a much reduced role in contemporary business
    and personal communications. Electronic communications have sharply reduced the
    demand for traditional postal services, contributing to a significant reduction
    in Canada Posts revenues. To adapt to this structural decline in revenue,
    Canada Post announced it would restructure its delivery services away from door-to-door
    delivery and towards community mailbox (CMB) delivery. Unsurprisingly, this move
    has attracted opposition. The appellant, City of Hamilton, among other
    municipalities, has strenuously opposed Canada Posts plan to phase out
    door-to-door mail delivery in established neighbourhoods. Although the City has
    urged Canada Post to adopt other cost-saving options, like reduced home
    delivery, it recognizes that the decision to switch to CMBs is a decision for Canada
    Post and not for the City. The City maintains, however, that it has a
    supervisory role  effectively, a veto  over Canada Posts site selection for
    CMBs within the boundaries of the City.

[4]

In response to a decision by Canada Post to roll-out the first phase of
    its conversion to CMBs in downtown Hamilton, the City passed a by-law
    establishing a regulatory regime that gives it control over the installation of
    equipment, including CMBs, on municipal roads: By-Law No. 15-091 (the
    By-Law). Canada Post challenged that By-Law in the Superior Court of Justice on
    constitutional and other grounds, and was entirely successful on its
    application.

[5]

In my view, the Citys appeal from that decision must fail. Although the
    subject matter of the By-Law comes within the Citys jurisdiction, it nevertheless
    conflicts with federal legislation and is therefore inoperative under the
    doctrine of paramountcy to the extent it applies to Canada Post.

B.

Background

(1)

Canada Posts Authority

[6]

Canada Post receives its authority and responsibility for the postal
    service from the
CPCA
. The
CPCA
grants Canada Post the
    authority, with the approval of the Governor in Council, to make regulations
    governing the design, placement and use of any receptacle  intended for the
    posting or delivery of mail: s.19(1)(k).

[7]

Relying on this authority, Canada Post promulgated the
Mail
    Receptacles Regulations
, SOR/83-743 (the Regulation). Section 3 of the
    Regulation provides that Canada Post may install  in any public place,
    including a public roadway, any receptacle  to be used for the collection,
    delivery or storage of mail. Section 4 further provides that no person may
    relocate or remove a mail receptacle without Canada Posts prior authorization.

[8]

These provisions authorizing Canada Post to place mail receptacles on
    municipal roads continue in Canada Post a power that was previously enjoyed by
    the Postmaster General. Under
The Post Office Act
,
1867
, c.
    10, s. 10(14), the Postmaster General was authorized to place mail receptacles
    in the streets  or other public place
where he may
    consider such Letter Box to be necessary
 (emphasis added). A later
    version of that statute was more explicit in the grant of discretion: the
    Postmaster General shall administer  the Canada Post Office, and  provide and
    arrange for the erection of letter boxes or other receptacles
at such locations as he deems appropriate
 (emphasis
    added):
The Post Office Act
, S.C. 1950-51, c. 57, s.5(f). The power to
    install mail receptacles on municipal roads is a power that has been exercised
    by Canada Post and its predecessors from Confederation.

[9]

Significantly, in carrying out its statutory object of operating the
    postal service in Canada, Canada Post is required to have regard to  the need
    to conduct its operations on a self-sustaining financial basis while providing
    a standard of service that will meet the needs of the people of Canada:
CPCA
,
    s. 5(2)(b). Meeting the postal service needs of Canadians on a self-sustaining
    basis has become increasingly difficult. Toward that end, Canada Post announced
    on December 11, 2013 a Five-Point Action Plan intended to better realize this
    dual obligation. An integral part of that plan is the replacement of all home
    delivery with CMBs by 2019.

(2)

The
    Citys Opposition to Canada Posts Plan

[10]

There has been significant opposition to Canada Posts plan, not least in
    the City of Hamilton. On February 26, 2014, the City Council approved a
    resolution advising Canada Post and the federal government that it oppose[d]
    the discontinuation of door-to-door mail delivery service, and setting out
    conditions that Canada Post should meet if it nevertheless replaced door-to-door
    service with CMBs. These conditions included that, in selecting sites for CMBs,
    Canada Post take into account City concerns such as the impact on traffic
    flows, parking and winter road maintenance, and that it consult with prescribed
    public and private groups about the site selection process.

[11]

Canada Post stayed its course. In June 2014, it announced that it would
    convert 36,000 residential addresses in the City to CMBs. As part of this plan,
    in September 2014, Canada Post provided the City with approximately 1,000 intended
    CMB locations, which would be the first phase of some 4,000 city-wide
    installations.

[12]

In response, City Council adopted a motion on September 24, 2014 that not
    only acknowledged Canada Posts exclusive jurisdiction over postal services in
    Canada, but also asserted the Citys authority to regulate with respect to public
    highways, the protection of property, the prevention of nuisance, and the
    health, safety and well-being of its residents. It objected that Canada Post
    did not have in place appropriate criteria for the location of CMBs that would
    safeguard the health and safety of residents, and voiced concerns about the convenience,
    accessibility, and security of CMBs.

[13]

The City Council therefore directed its staff to provide it with a
    report with respect to options available to the City to
prevent
    installation
of community super mailboxes in the Citys road allowances
pending agreement
with Canada Post on appropriate
    locational criteria and such other measures as may be necessary to prevent
    safety hazards, property damage or nuisance, before the installation of
    community mailboxes by Canada Post proceeds (emphasis added). In the interim,
    City staff advised Canada Post, by letter dated October 3, 2014, that staff
    would not assist Canada Post with the implementation of CMBs by providing any
    comment at that time on its proposed locations for CMBs.

[14]

The report, which was submitted to City Council on February 4, 2015, recommended
    that the Mayor write to the Prime Minister and Minister of Transport to
    express its opposition to the elimination of home mail delivery. It also
    recommended that the Mayor request the immediate suspension of the roll-out of
    CMBs so that: (1) Canada Post could engage in full and meaningful
    consultation with the City, and (2) the federal government could amend the Regulation
    to recognize the Citys authority to regulate the installation and maintenance
    of community mailboxes in public roadways.

[15]

The scope of the full and meaningful consultation advocated by the
    report was not directed only (or even primarily) to the siting of CMBs; the
    consultation was to explore other options short of the elimination of home
    mail delivery such as reduced frequency of delivery.

[16]

Tellingly, the report noted that the Regulation currently provide[s]
    authority for Canada Post to install community mailboxes on municipally-owned
    property, without limitation. It objected that the Regulation failed to
    recognize a municipalitys primary responsibility for public roads. Finally,
    the report recommended that City staff be directed to include CMBs in a forthcoming
    road installations by-law, which was planned by the Public Works Committee.

(3)

By-Law
    15-091

[17]

The City adopted the recommendation, and on April 15, 2015, the City
    enacted By-Law No. 15-091, regulating the installation of equipment on City
    roads.

[18]

Section 3.1(1) of the By-Law prohibits any person from undertaking any
    work (defined to include any installation of equipment on a road) without
    first obtaining a permit in accordance with the By-Law and the Citys Roads 
    Equipment Installation Manual (the Manual). There was a problem, however, in
    that the existing Manual did not address above-ground equipment and so there
    were no criteria in place to govern the permitting of CMBs.

[19]

To address this lacunae, the By-Law includes a moratorium provision
    prohibiting the Citys Director of Engineering Services from considering any
    permit application from Canada Post for installing CMBs or issuing any permits to
    Canada Post until 120 days after Canada Post paid an upfront fee of $200 for
    each of the first 500 CMB permits. According to s. 4.1, the stated purpose of
    the moratorium period is as follows:

to temporarily stop work with respect to the installation of
    equipment accessed by the public (community mailboxes and any similar
    equipment) while the Director develops appropriate standards to be added to the
    Roads  Equipment Installation Manual and takes all other necessary steps for
    the processing of these permits.

Temporarily stopping this work will ensure that the
    installation of large numbers of community mailboxes by Canada Post Corporation
    in established neighbourhoods is regulated in accordance with appropriate
    standards.

[20]

Part 5 of the By-Law establishes the permit application process, and the
    powers of the Director. The Directors powers are discretionary, and include
    the power to refuse a permit for non-compliance with the By-Law or Manual: s.
    5.3(1). The Director is authorized, by s. 6.3(1), to impose conditions that the
    Director considers appropriate for the protection of a road, any property abutting
    a road or of any person.

[21]

The Manual was updated prior to the hearing of the application. Nevertheless,
    as Canada Post has not paid the $100,000 permit fee set by the City, the moratorium
    remains in effect.

(4)

Canada
    Posts Application

[22]

Canada Post successfully challenged the By-Law on six grounds, and the
    application judge declared it to be inapplicable and inoperative with respect
    to the installation of CMBs by or on behalf of Canada Post.

[23]

First, the application judge held the By-Law was inoperative in respect
    of CMBs on the basis of vagueness.

[24]

Second, he held that the By-Law was of no effect insofar as CMBs were
    concerned as it contravened s. 14(1) of the
Municipal Act, 2001
, S.O.
    2001, c. 25. Section 14(1) renders a by-law in conflict with a federal Act or
    regulation of no effect. The application judge concluded there was a conflict
    because the By-Law frustrated the purpose of the Regulation, which he characterized
    as the time sensitive need for [Canada Post] to carry out its mandate with
    respect to delivery of mail on a self-sustaining financial basis.

[25]

Third, the application judge characterized the subject matter of the By-Law
    as in pith and substance the control of the location of CMBs, which he
    concluded is 
ultra vires
the authority of the City, even though it is
    within an aspect, i.e. roads, that the City has jurisdiction. The application
    judges conclusion on
vires
was influenced by his view that the By-Law
    was adopted as a means to stop the transition to CMBs: [t]he by-law was
    purposely created by councillors with the avowed intention of stopping the
    transition of home delivery to CMBs, an intention expressed in a by-law which
    essentially takes over [Canada Posts] decision making in choosing a business
    model.

[26]

Fourth, he held the By-Law intruded into the core federal jurisdiction
    over the postal service, and was inapplicable to Canada Post by operation of
    the doctrine of interjurisdictional immunity.

[27]

Fifth, he held that Canada Post was not bound by the By-Law on the basis
    of Crown immunity.

[28]

Sixth, although the application judge concluded that the By-Law was
ultra
    vires
, had he concluded otherwise, he would nevertheless have held it to
    be inoperative vis-à-vis Canada Post due to the doctrine of paramountcy.

C.

issues

[29]

On appeal, the City argues that the application judge erred in drawing
    the following five conclusions:

(1)

The By-Law is
    unconstitutionally vague.

(2)

Canada Post is immune from the application of the By-Law because of
    Crown immunity.

(3)

The By-Law is
ultra vires
the City on the basis that its pith
    and substance is a matter that comes under exclusive federal jurisdiction.

(4)

The By-Law is inapplicable to Canada Post due to the doctrine of
    interjurisdictional immunity.

(5)

If the By-Law were not
ultra vires
, it would nevertheless be
    inoperative due to the application of the
Municipal Act
and the
    doctrine of federal paramountcy.

D.

Analysis

[30]

The focus of these reasons is on the questions of
vires
and
    paramountcy, which are decisive of the appeal. The other issues raised by the
    City  vagueness, Crown immunity, and interjurisdictional immunity  will be
    disposed of summarily.

Division of powers
:
Vires
and Paramountcy

[31]

The following section first articulates the general principles of the
    division of powers analysis, specifically the doctrines of
ultra vires
and paramountcy, and then applies them to the facts of this appeal.

(1)

The general principles

(a)

Pith and Substance

[32]

The first step in a division of powers analysis is to characterize the
    law being challenged. This characterization is a matter of determining the
    pith and substance of the challenged law:
Union Colliery Co. of British
    Columbia v. Bryden
, [1899] A.C. 580 (P.C.), at p. 587. In more contemporary
    language, this step has been described as determining the true character (
RJR-MacDonald
    Inc. v. Canada (Attorney General)
, [1995] 3 S.C.R. 199, at para. 29) or
    true nature of the law (
Canadian Western Bank v. Alberta
, 2007 SCC
    22, [2007] 2 S.C.R. 3, at para. 26) or of identifying the matter to which
    [the law] essentially relates (
Canadian Western Bank
, at para. 26).

[33]

Although the terminology is well-settled, there is no single test for
    determining a laws matter and, as the Supreme Court cautioned in
R v. Morgentaler
,
    [1993] 3 S.C.R. 463, at p. 481, [t]he approach must be flexible and a
    technical, formalistic approach is to be avoided.

[34]

The initial question of what is a laws pith and substance invites two
    prior questions: [w]hat in fact does the law do and why?:
Quebec
    (Attorney General) v. Canadian Owners and Pilots Association
, 2010 SCC 39,
    [2010] 2 S.C.R. 536, at para. 17 (
COPA
), citing D. W. Mundell,
    Tests for Validity of Legislation under the British North America Act: A Reply
    to Professor Laskin (1955), 33 Can. Bar Rev. 915, at p. 928;see also Grégoire
    Webber, Asking Why in the Study of Human Affairs, (2015) 60:1 Am. J. Juris.
    51 at p. 54. These two paths of inquiry are often expressed as a search for:
    (1) the purpose of the enacting body, and (2) the legal effect of the law:
Canadian
    Western Bank
, at para. 27;
Reference re Firearms Act (Can.)
, 2000
    SCC 31, [2001] 1 S.C.R. 783, at para. 16. These two inquiries are related: while
    purpose is often the key to constitutional validity, [l]egal effect is often
    a good indicator of the purpose of the legislation:
Morgentaler
, at pp.
    482-83.

(i)

Effect of the law

[35]

The effect of the law can include both (1) legal effect, and (2) the practical
    consequences that result from legislation:
Morgentaler
, at pp. 482-83;
Quebec (Attorney General) v. Lacombe
, 2010 SCC 38, [2010] 2 S.C.R.
    453, at para. 20.

[36]

Acts of legislation are, paradigmatically, reasoned plans enacted either
    to change or confirm existing legal rights and obligations of persons. Thus, the
    legal effect of legislation is determined from the terms of the legislation
    itself, by asking how the legislation affects the legal rights and obligations
    of those subject to it (
Morgentaler
at p. 480. See also, Richard Ekins,
The Nature of Legislative Intent
(Oxford: Oxford University Press,
    2012), at pp. 121-27).

[37]

The effects of legislation are an important indicator of its purpose.
    The Supreme Court has cautioned, however, that the enquiry into effects not be
    truncated by considering only the
means
chosen by the legislature and
    ignoring the more ultimate ends. For example, in
Ward v. Canada (Attorney
    General)
, 2002 SCC 17, [2002] 1 S.C.R. 569, a federal regulation
    prohibited the sale of two types of young seals. The Supreme Court rejected the
    argument that the subject matter of the legislation was the regulation of the
    sale of seal products, which would be a matter within provincial jurisdiction
    (i.e., as a matter related to property and civil rights in the province). The
    immediate effect of the regulation was to prohibit the sale of seals. But this effect
    was only an intermediate end: a means, by way of removing the financial
    incentive to hunt seals and curtailing the commercial hunt, to achieve the more
    ultimate end of protecting a fisheries resource. An adequate account attends to
    both the intended effects and means chosen to bring them about.

(ii)

Purpose of the enacting body

[38]

The effects of legislation are one guide to its purpose, but there are
    others, bearing in mind that the relevant purpose for analysis is, as Binnie J.
    stated at para. 27 of
Canadian Western Bank
, the purpose of the enacting
    body in enacting the legislation, and not the purpose of any individual member.

[39]

In determining the purpose of the enacting body, a reviewing court may consider
    both intrinsic evidence (evidence contained within the text, such as statements
    in a preamble or a purpose clause) and extrinsic evidence (evidence outside of
    the text, such as minutes of parliamentary debates):
Canadian Western Bank
,
    at para. 27.

[40]

This analysis is not concerned with the motives of the government in
    proposing the legislation, or the motives of the enacting body or of any of its
    individual members:
Quebec (Attorney General) v. Canada (Attorney General)
,
    2015 SCC 14, [2015] 1 S.C.R. 693, at paras. 35-38 (
Gun Registry II
).
    Motive, in this context, should be understood as the desire to achieve some end
    other than the immediate change in legal rights and obligations achieved by the
    legislation.

[41]

For example, in
Gun Registry II
, the Supreme Court considered Quebecs
    argument that federal legislation resulting in the destruction of a firearms
    database was motivated by a desire to prevent or hinder Quebec from developing
    its own long-gun registry. The court decided that although that may well have
    been the governments motive, it did not play a role in the characterization of
    the matter of the legislation. At para. 38, the court commented:

Quebecs submissions, in our respectful view, confuse the
    subject matter of s. 29 of the
ELRA
with Canadas motives and the
    means employed by Parliament. In determining the true character of s. 29,
    we are not concerned with whether destroying the data is good policy, whether
    Canadas motives were sound, or whether the destruction of that data conflicts
    with the policy objectives of Quebec. We recognize that the federal
    governments ultimate goal may well have been to prevent Quebec from creating
    its own long-gun registry. We also accept that the destruction of the data is
    the means chosen by Canada because of its irremediable nature. That being
    said, these considerations are not indicative of a colourable purpose from a
    division of powers perspective. An intention on the part of one level of
    government to prevent another from realizing a policy objective it disagrees
    with does not, on its own, lead to the conclusion that there is an encroachment
    on the other level of governments sphere of exclusive jurisdiction.

The subject matter of legislation is thus distinct
    from the motives of government and of individuals within a government.

(b)

Heads
    of power

[42]

Once the matter of the challenged legislation is ascertained, the next
    step is to determine whether the matter comes within one of the heads of power
    allocated to the enacting legislative body by s. 91 or s. 92 of the
Constitution
    Act
,
1867
. If not, the legislation is
ultra vires
and
    void.

[43]

Legislation will not be
ultra vires
, however, simply because its
    subject matter, for another purpose, could have fallen under the jurisdiction
    of the other level of government under a different head of power. The double
    aspect doctrine provides that subjects which in one aspect and for one purpose
    fall within sect. 92, may in another aspect and for another purpose fall within
    sect. 91:
Hodge v. The Queen
(1883), 9 A.C. 117, at p. 130 (P.C.). Accordingly,
    the doctrine contemplates that some subjects will fall equally under two
    distinct heads of power, one federal and one provincial:
Rogers
    Communications Inc. v. Châteauguay (City)
, 2016 SCC 23, 397 D.L.R. (4th)
    611, at para. 50.

(c)

Paramountcy

[44]

This double aspect raises the possibility of conflict between valid
    federal and provincial laws that both deal with the same subject matter. The
    doctrine of paramountcy stipulates that such conflict is to be resolved in
    favour of federal legislation:
Canadian Western Bank
, at para. 32.
    Where there is a conflict, federal legislation is paramount and the conflicting
    provincial legislation is inoperative to the extent of the conflict.

[45]

The Supreme Court has recently clarified its jurisprudence on what is
    required for a conflict:
Alberta (Attorney General) v. Moloney
, 2015
    SCC 51, [2015] 3 S.C.R. 327, at paras. 17-29. It summarized when a conflict
    will occur, at para. 29:

[I]f the operation of the provincial law has the effect of
    making it impossible to comply with the federal law, or if it is technically
    possible to comply with both laws, but the operation of the provincial law
    still has the effect of frustrating Parliaments purpose, there is a conflict.

[46]

With those legal principles in mind, I now turn to an examination of the
    Citys By-Law.

(2)

Application of Principles

(a)

Pith and Substance of the By-Law

[47]

What is the pith and substance, or subject matter, of the By-Law?

[48]

On the Citys submission, the purpose of the By-Law is the regulation of
    the installation of equipment (including CMBs) on municipal roads. The
    rationale is supplied by the pre-amble to the By-Law, which notes the Citys
    authority under the
Municipal Act
to pass by-laws for municipal
    purposes, with specific reference to its responsibility for ensuring that
    persons are protected from injury, property is protected from damage, and
    disruption is minimized for those using the road as well as for abutting
    properties.

[49]

The application judge rejected this submission and accepted Canada
    Posts argument that the true purpose of the By-Law is revealed in the
    circumstances of its enactment, including the vocal opposition of Council to
    the imposition of CMBs, and statements of individual Council members expressing
    a desire to derail the implementation of CMBs and control the process of
    conversion. He concluded that this intention to stop the transition was
    expressed in the By-Law itself.

[50]

The application judge found that the By-Law was purposely created by
    councillors with the avowed intention of stopping the transition of home delivery
    to CMBs. From this characterization of purpose, he concluded that the By-Laws
    subject matter is the regulation of postal services.

[51]

I accept the Citys submission that the application judge erred in
    characterizing the pith and substance of the By-Law. In particular, I am of the
    view that he erred in confusing the concepts of purpose and motive. Although
    the Council members were opposed to the imposition of new CMBs, and one or more
    members may have hoped the By-Law would derail the implementation of Canada
    Posts CMB plan, the motives of individual Council members (or even the Council
    as a whole) do not of itself establish the pith and substance of the By-Law. To
    reiterate, [a]n intention on the part of one level of government to prevent
    another from realizing a policy objective it disagrees with does not, on its
    own, lead to the conclusion that there is an encroachment on the other level of
    governments sphere of exclusive jurisdiction:
Gun Registry II
, at
    para. 38.

[52]

The application judge erred by focusing on whether Council was
    generally opposed to CMBs or whether individual members of Council harboured a
    hope that the By-Law might derail Canada Posts plan. A better guide to the
    By-Laws purpose, and ultimately its subject matter, is its legal effect, or
    the change it works in legal rights and obligations.

[53]

As I will discuss, the By-Law changes legal relationships in two ways:
    (1) it creates a permitting process that requires all persons to obtain a
    permit before installing equipment on city roads and gives jurisdiction to the
    Director to grant or refuse an installation permit based on criteria set by the
    City; and (2) it imposes a moratorium on issuing permits to Canada Post for
    CMBs for 120 days after Canada Post pays permit fees for the first 50 CMBs,
    totalling $100,000.

(i)

The permit
    provisions

[54]

As noted above, Part 3 of the By-Law prohibits work - which includes the
    installation of equipment on City roads - without a permit. Part 5 vests the  Director
    with authority to issue or refuse permits, and requires the Director, in making
    a decision, to have regard for the Roads  Equipment Installation Manual,
    which was updated to address all above-ground equipment installations
    subsequent to the passing of the By-Law.

[55]

The criteria in the updated Manual governing above-ground equipment,
    which are meant to constrain the exercise of the Directors discretion, include
    matters such as the accessibility of equipment for persons with disabilities,
    vehicular and pedestrian safety, setbacks, respect for privacy of occupants of
    nearby homes, and protection of trees. Several of these criteria are vague and
    open-ended and can only be applied through the exercises of discretion.

[56]

Significantly, these criteria do not address the efficiency or modality
    of mail delivery. The Director is not vested with any authority to grant or
    refuse a permit based on any judgment about the adequacy of mail service that
    would result. The subject matter of this part of the By-Law is the regulation
    of municipal rights of way for the protection of the physical safety of persons
    and property.

[57]

The By-Law is readily distinguishable from the notice of reserve that
    was held to be
ultra vires
in
Rogers Communication.
In that
    case, the municipality argued that its purpose in issuing a notice of reserve,
    which prevented Rogers from installing a cell phone tower on a property for
    which it had received federal approval, was to protect the health and
    well-being of residents living close to that property. The Supreme Court
    rejected this characterization, instead classifying the notice as a matter of
    choosing the location of a radiocommunication antenna system. It concluded that
    the notice was
ultra vires
the province as it was an exercise of an
    exclusive federal power over radiocommunications. To have decided otherwise,
    the Court explained, could encourage municipalities to systematically exercise
    the federal power to choose where to locate radiocommunication infrastructure
    while alleging local interests in support of their doing so (para. 47.) To
    have decided otherwise would have expanded the scope of municipal jurisdiction
    well beyond the division settled by the
Constitution Act, 1867
.

[58]

Here, the pith and substance of the By-Law is to protect against risks
    of harm to property and harm to persons using municipal roadways. Unlike in
Rogers
,
    the By-Law is of general application, establishing standards that govern the
    implementation of all equipment on City roads. And unlike the notice in
Rogers
,
    it does not prohibit CMBs or restrict their placement in a way that would be
    tantamount to prohibition.

(ii)

The moratorium provision

[59]

Unlike the general permit provisions, the moratorium provision is
    expressly and exclusively directed at Canada Post. However, it is important to
    note the close connection between the moratorium provision and the permitting
    process. The moratorium provision is not an indirect prohibition, but is in the
    service of the permitting process.

[60]

The purpose of the 120-day period was to allow time for the City to
    develop the standards that would govern the issuance of permits. Those
    standards have now been developed.

[61]

The purpose of the permitting fees was, according to the City, to enable
    the City to hire extra staff to manage the permitting process, which includes:
    (1) implementing a system to track and manage the permit application process;
    (2) assessing the need for an agreement between Canada Post and the City to
    address infrastructure impacts, upgrade costs, and operations impacts; and
    (3) hiring additional staff to process the permit applications.

[62]

Although Part 4 of the By-Law was occasioned by the pending wide-scale
    installation of CMBs, the By-Law was already under revision in train when it
    was adapted to address the CMB roll-out. As previously noted, it is otherwise
    of general application, applying to all equipment installations on municipal
    road allowances. The fact that it specifically addresses CMBs in one provision
     the moratorium  does not negate its character as a law of general
    application. As the City argued, the express mention of CMBs in the By-Law was
    necessary to its success as a comprehensive ordinance regulating the
    installation of equipment on City roads, and the mere fact that Canada Post was
    expressly addressed in the By-Law is not itself problematic: see
Kitkatla
    Band

v. British Columbia (Minister of Small Business, Tourism and
    Culture)
, 2002 SCC 31, [2002] 2 S.C.R. 146, at paras. 66 and 76 (the mere
    mention of the word Aboriginal in a statute does not render it
ultra
    vires
the province). The scale of the roll-out of CMBs posed an immediate
    logistical problem for the City. The moratorium provision was needed to enable
    the City to work up the necessary infrastructure to regulate the location of
    CMBs.

[63]

The requirement that Canada Post pay $100,000 in permit fees up front
    should be understood in this light. Canada Posts standard procedure on CMB
    roll-outs is to consult with the host municipality. It recognizes that this
    consultation imposes costs on the municipality, and its practice is to pay $50
    per installation. The City has judged this payment to be inadequate to cover
    the costs of the permit process, and requires a fee of $200 per CMB. While the By-Law
    extracts a fee that is four times the rate that Canada Post pays voluntarily,
    that does not change the subject matter analysis.

[64]

Although Canada Post has refused to pay the fee, there is no evidence on
    the record that the imposition of the fee would create an obstacle to Canada
    Post such that the matter of the By-Law should be characterized as being in
    relation to mail delivery rather than the regulation of the use of municipal
    rights of way. In other words, this case is unlike
the situation in
Attorney-General for Alberta v.
    Attorney-General for Canada
, [1939] A.C. 117 (P.C.), where a provincial
    tax on banks was so excessive that the only available inference was that its
    purpose was not to raise revenue through taxation (a valid provincial object),
    but to put banks out of business. Its dominant purpose was therefore held to be
    the regulation of banks rather than the raising of revenue through taxation.

[65]

I therefore conclude that the application judges characterization of
    the subject matter of the by-law is an error of law. The subject matter is,
    much as the City contends, the protection of persons and property from harm
    occasioned by equipment installed on municipal road allowances.

[66]

The next step in the analysis is to determine whether this subject
    matter comes within a head of power allocated to the provinces by the
Constitution
    Act
,
1867
.

(b)

Heads
    of power

[67]

Municipalities hold such powers as are delegated to them by provincial
    legislatures. The City of Hamilton locates its ultimate authority for the
    impugned By-Law in ss. 92(10) and (13) of the
Constitution Act, 1867
, respectively
    the powers over local works and undertakings, and property and civil rights in
    the province.

[68]

It is a short walk from the characterization of the By-Law as being in
    relation to the protection of persons and property from harm occasioned by
    equipment installed on municipal road allowances, to the conclusion that the By-Law
    comes within provincial jurisdiction under ss. 92(10) and (13).

[69]

The subject matter of the By-Law does, however, as the application judge
    correctly noted, also impact the federal head of power over the postal service,
    set out in s. 91(5) of the
Constitution Act
,
1867
. That led the
    application judge to conclude, incorrectly in my view, that the By-Law usurps
    the jurisdiction of Canada Post, which under the
CPCA
has the power,
    with the approval of the Governor in Council, to make regulations governing the
    placement of mail receptacles. In particular, the application judge erred in the
    application of the double aspect doctrine. The doctrine provides that the
    authority of one level of government to legislate with respect to a subject
    matter does not mean the other level of government does not have the authority
    to legislate with respect to another aspect of the same subject matter for
    another purpose:
Canadian Western Bank
, at para. 30.

(c)

Conclusion
    on
vires

[70]

The By-Law falls within the Citys jurisdiction. That conclusion invites
    the next step of the division of powers analysis, which is to determine whether
    there is a conflict between the By-Law and any federal legislative provisions.

[71]

For the reasons that follow, I conclude that there is a conflict, in the
    relevant sense, and that the federal provisions are paramount and the By-Law is
    therefore inoperative to the extent that it applies to Canada Post.

(d)

Paramountcy

[72]

As set out above, there are two types of conflict that can ground a
    paramountcy analysis: operational conflict, and frustration of the purpose of
    federal law. Only the latter is at issue: it is common ground that the
    application judge correctly concluded there was no operational conflict.

[73]

The City says the application judge erred by focussing on a conflict
    with a federal purpose at large, or the purpose behind Canada Posts business
    plan, rather than the purpose of any legislative instrument. It argues that the
    doctrine of paramountcy requires conflict with a legislative instrument, and
    cannot be invoked where there is only conflict with a business plan of a Crown
    corporation.

[74]

I do not agree with this reading of the application judges reasons. He
    described the federal purpose as follows:

[84] The federal purpose advanced is the time sensitive need
    for [Canada Post] to carry out its mandate with respect to delivery of mail on
    a self-sustaining financial basis. As mentioned declining mail usage in the
    face of electronic communications at the same time as an increase in the number
    of residences has made door-to-door delivery of transactional mail the most
    expensive form of delivery. Accordingly, [Canada Post] actively seeks to
    transition to CMBs to reduce eventually its labour force, which is one of its
    most costly components of mail delivery.

[85] Also as set out, the [Regulation] allows for the
    installation of mail receptacles in public places, including a public roadway.
    A CMB is clearly a receptacle within the ambit of the regulation. City employee
    affidavits and correspondence with [Canada Post] clearly acknowledged the
    mandate of [Canada Post].

These paragraphs, read together, show that the object
    of the application judges federal purpose analysis was not the business plan
    of Canada Post, but rather the Regulation, taken together with the
CPCA
.
    The relevant conflict is between the By-Law, which the application judge
    interpreted as giving final authority over the location of mail receptacles to
    the City, and the federal purpose of the Regulation and the
CPCA
,
    which grant sole decision-making power over the location of mail receptacles to
    Canada Post.

[75]

The City further objects, relying on the Supreme Courts decision in
COPA
,
    that the application judge erred because the Regulation is merely permissive
    (in that it allows but does not require Canada Post to install any receptacles
    on municipal roads) and a permissive regulation cannot, without more, ground
    the requirement for a conflict for paramountcy analysis. The City relies on
COPA
,
    where the court stated, in part, at paras. 66 and 68:

The standard for invalidating provincial legislation on the
    basis of frustration of federal purpose is high; permissive federal
    legislation, without more, will not establish that a federal purpose is
    frustrated when provincial legislation restricts the scope of the federal
    permission: see

114957 Canada
    Ltée (Spraytech, Société darrosage) v. Hudson (Town)
, 2001 SCC 40, [2001]
    2 S.C.R. 241.



As discussed above, invocation of federal paramountcy on the
    basis of frustration of purpose, as opposed to operational conflict, requires
    clear proof of purpose; mere permissive federal legislation does not
    suffice.

[76]

I disagree with the Citys reading of
COPA
. The propositions
    that
COPA
advances are these: (1) there is a heavy burden on the party
    claiming paramountcy to establish that there is a conflict; (2) to find a
    conflict on the second branch, there must be clear proof of purpose, and (3)
    the mere existence of a permissive federal legislative provision is not of
    itself sufficient proof of federal purpose. In
COPA
, there was some
    uncertainty as to the federal purpose in promulgating regulations that
    generally permitted persons to construct aerodromes without prior approval. The
    court rejected the argument that the existence of the regulations permitting
    the construction of aerodromes were, in themselves, sufficient proof of a
    particular purpose that had been alleged ­- encouraging widespread
    construction of aviation facilities:
COPA
, at para. 68.

[77]

I see no similar uncertainty as to the purpose of the Regulation,
    particularly in light of the long history of the Postmaster Generals
    discretion over the placement of mail receptacles.

[78]

In my view this appeal is more similar, factually, to
British
    Columbia (Attorney General) v. Lafarge Canada Inc
., 2007 SCC 23, [2007] 2
    S.C.R. 86. In that case, the
Canada Marine Act
, S.C. 1998, c. 10,
    vested in the Vancouver Port Authority the authority to make decisions about
    the development of the Vancouver Port, including the approval of a development
    by Lafarge Canada that would contravene city by-laws. The court held that there
    was a conflict between the federal purpose under the
Canada Marine Act
of vesting authority in the Vancouver Port Authority, and the permitting
    by-laws of Vancouver.

[79]

Similarly, in this appeal, the federal purpose of the
CPCA
and the
    Regulation in conferring on Canada Post the power to place mail receptacles on
    municipal roads is in furtherance of the objects of Canada Post, which include
    having regard to the need to conduct its operations on a self-sustaining
    financial basis while providing a standard of service that will meet the needs
    of the people of Canada:
CPCA
, s. 5(2)(b). The By-Law, by giving the
    City a veto over the siting of mail receptacles, conflicts with the federal purpose
    behind the Regulation.

[80]

The City objects that unlike the siting of the cellphone tower in
Rogers
,
    which is discussed above, the exact placement of a CMB is a fine grained
    matter that cannot, in its nature, have any substantial bearing on the
    operations of Canada Post. Allowing the City the authority to relocate a CMB
    down the street will not impact the operations of Canada Post, the City argues,
    and it may enhance public access.

[81]

Again, I cannot agree with this submission. The record demonstrates that
    the process of converting mail delivery to CMBs is complex, not only due to the
    necessary coordination with third parties such as residential customers,
    municipalities, and contractors, but also because of the internal procedures
    that Canada Posts collective agreements mandate when Canada Post restructures
    a mail delivery route. Were the City to refuse approval for even a few sites,
    it would require Canada Post to redraw its mail delivery routes and restart the
    cycle of consultation with customers, volume mail delivery counts, route
    restructuring and staffing, and hiring contractors. And there is of course no
    guarantee that sites selected in the subsequent round would meet with City
    approval. Furthermore, what is at issue is not the location of a single mail
    receptacle, or even a few hundred mail receptacles. The CMBs are part of a
    national network.  These logistical problems would be magnified by the number
    of municipalities enacting such a by-law  each with their own decision-maker
    and criteria  that will collectively have veto power over the placement of
    CMBs nation-wide.

[82]

The City additionally argues that there is no conflict because the
    Regulation and the By-Law can be read together, and that respect for the
    constitutional principles of co-operative federalism and subsidiarity require
    giving effect to a harmonious interpretation of the By-Law and Regulation, if
    at all possible.

[83]

A harmonious reading of the By-Law and the Regulation, however, is not,
    in my view, possible. It is not a matter, as the City suggests, of the
    Regulation not providing any standards for implementation of the CMBs and the
    By-Law supplying this defect. It is true that the Regulation does not set out
    criteria to govern the location of CMBs. Canada Post of course has policies and
    standards that it has adopted for site selection, including policies governing
    consultation with communities and municipal governments. The By-Law (together
    with the Manual) does not complete, or render more specific, the work begun in
    the Regulation.  Instead it asserts a supervisory jurisdiction over the
    decision-making of Canada Post. It is not co-operative but competitive,
    displacing one discretionary authority with another.

[84]

The constitutional principle of subsidiarity cannot, as was held by a
    plurality in
Reference re Assisted Human Reproduction Act
, 2010 SCC
    61, [2010] 3 S.C.R. 457, at para 72,
per
McLachlin C.J., be invoked to
    alter the division of powers. As with all constitutional principles, however,
    it can play a role in statutory interpretation and in the development and
    application of legal doctrine, including the doctrine of paramountcy. The City argues
    that respect for subsidiarity, understood as the proposition that governmental
    decisions should be taken at the level of government closest to the affected
    parties, should lead to a harmonious interpretation of the
CPCA
,
    Regulation, and the By-Law.

[85]

Further, the intervener argues that municipalities have a historical
    right of way management role that should be respected in the division of
    powers analysis, not only because municipalities are better placed to
    coordinate the demands placed on road allowances by competing users, but also
    because this is a function that has been historically exercised by
    municipalities. This argument draws some support from another aspect of
    subsidiarity that has been affirmed by legal academics: that the reason that higher
    levels of government and authority should not displace the pre-existing
    initiatives of lower levels of government and civic society, is because there
    is something inherently valuable in local institutions and communities being
    able to maintain their own projects and commitments: see e.g., N.W. Barber
    & Richard Ekins, Situating Subsidiarity (2016) 61:1 Am. J. Juris 5.

[86]

Nevertheless, no matter how it is articulated, the principle of
    subsidiarity has no application on these facts. The power of the Postmaster
    General (and its successor, Canada Post) to locate mail receptacles in its
    national network, free of interference, has existed from Confederation and has been
    continuously exercised. Canada Post is not displacing any pre-existing local
    initiatives. And as I noted with respect to the argument from co-operative
    federalism, a harmonious reading of the
CPCA
and Regulation together
    with the By-Law is not possible.

[87]

I therefore conclude that there is a conflict between the By-Law on the
    one hand, and the
CPCA
and the Regulation on the other, and the
    application judge made no error in so finding. The By-Law is thus inoperative
    to the extent of the conflict, including both the permitting and moratorium provisions
    as they apply to Canada Post.

[88]

As the application judge found, the conclusion that there is a conflict
    for division of powers purposes similarly resolves the question of whether the
    By-Law is inconsistent with s. 14(1) of the
Municipal Act
, which renders
    a by-law that is in conflict with a federal act or regulation of no effect.

[89]

While the paramountcy conclusion disposes of the appeal, I will briefly
    touch on the other issues raised by the City.

Other Issues

(1)

Vagueness

[90]

When Canada Post commenced its application and included vagueness among
    the By-Laws infirmities, the City had not yet drafted its update to the Manual.
    As noted above, it did so shortly before the application was argued. Although
    the application judge determined the By-Law was impermissibly vague, even with
    the criteria contained in the updated Manual, Canada Post concedes on appeal
    that the By-Law is not vague.

[91]

In my view, the concession is proper. The application judge erred in
    characterizing the By-Law as standardless and vague in view of the standards
    set out in the Manual. The situation facing the City was appropriately
    addressed through a delegation of authority so that discretion, exercised in
    individual cases and guided by the criteria set out in the Manual, could be
    applied to particular circumstances:
Batty v. Toronto (City)
, 2011
    ONSC 6862, 108 O.R. (3d) 571, at para. 120.

(2)

Crown Immunity

[92]

Given my conclusion on the doctrine of paramountcy, I consider it  unnecessary
    to answer this question.

(3)

Interjurisdictional immunity

[93]

The doctrine of interjurisdictional immunity protects the core of a
    legislative head of power from impairment by the actions of a government at the
    other level:
COPA
, at para. 26. Its application involves two steps:
    (1) determining whether a statute or measure adopted by a government at one
    level trenches on the core of a power of the other government, and (2)
    determining whether the effect of the statute or measure on the protected power
    is sufficiently serious to trigger the application of the doctrine:
COPA
,
    at para 27.

[94]

Its application has wide-ranging consequences and as the Supreme Court
    recently reiterated, it should be applied with restraint and in general be
    reserved for situations already covered by precedent:
Bank of Montreal v.
    Marcotte
, 2014 SCC 55, [2014] 2 S.C.R. 725, at para. 63, citing
Canadian
    Western Bank
, at paras. 67 and 77.

[95]

I agree with the Citys submission that Canada Post has not identified any
    precedent recommending the application of this doctrine. It is not sufficient that
    the doctrine has in the past been applied to the head of power of postal
    services. There needs to be a closer nexus with the actual subject matter of
    the By-Law.

[96]

As this case presents a novel situation with respect to interjurisdictional
    immunity, the application judge needed to identify some exceptional rationale
    for extending the doctrine and did not do so. Accordingly, I am of the view
    that the application of the doctrine in this instance is an error of law.

E.

Fresh evidence

[97]

The City sought leave to introduce fresh evidence consisting of reports
    of a decision of the Government of Canada, following the election of 2015, to
    temporarily discontinue the roll-out of conversion to CMBs. The evidence does
    not assist in the resolution of the legal issues in this appeal.

F.

Disposition

[98]

For these reasons, I would deny leave to admit the fresh evidence and
    would dismiss the appeal.

[99]

If the parties are unable to agree on costs, they may make brief written
    submissions, not exceeding three pages (excluding an attached bill of costs). Canada
    Post shall file its submissions within 15 days from the date of these reasons,
    and the City shall fill its response within 10 days of receipt of Canada Posts
    submissions.

Released: DD OCT 19 2016

B.W. Miller J.A.

I agree. Doherty
    J.A.

I agree. Gloria
    Epstein J.A.


