Judgments

[1995] 3 F.C. 3

A-489-94

Syndicat professionnel des ingénieurs d’Hydro-Québec (Applicant)

v.

Hydro-Québec, Attorney General of Quebec, Attorney General of New Brunswick (Respondents)

and

Syndicat des employé-e-s de métier d’Hydro-Québec, Syndicat des employé-e-s de techniques professionnelles et de bureau d’Hydro-Québec, Syndicat des technicien-nes d’Hydro-Québec (Interveners)

and

Canada Labour Relations Board (Tribunal)

Indexed as: Syndicat professionnel des ingénieurs d’Hydro-Québec v. Hydro-Québec (C.A.)

Court of Appeal, Hugessen, Décary JJ.A. and Chevalier D.J.—Montréal, May 15; Ottawa, May 24, 1995.

Crown — Prerogatives — Application for judicial review of refusal by Canada Labour Relations Board to certify union for lack of jurisdiction — Hydro-Québec operating nuclear plant, pleading immunity as mandatary corporation of Crown in right of province — Reluctance of courts to erode Crown immunity — Not influenced by fact recognition of Crown immunity resulting in legal vacuum — Hydro-Québec not bound expressly, by necessary implication under Canada Labour Code — No waiver of immunity — Not losing immunity by engaging in federal undertaking.

Labour relations — Canada Labour Relations Board (CLRB) refusing to certify union as Crown immunity claimed by Hydro-Québec — Whether Canada Labour Code intended to apply to provincial Crown corporations operating nuclear plant — Parliament not expressing clear intent to apply Part I of Code to Hydro-Québec — No nexus between activities of Hydro-Québec at nuclear plant and provisions of Part I.

This was an application for judicial review of a decision of the Canada Labour Relations Board refusing to certify the applicant union for lack of jurisdiction based on the immunity claimed by Hydro-Québec in its capacity as a mandatary corporation of the Crown in right of the province. The applicant union is an association representing all unionized engineers of Hydro-Québec, including those working at the Gentilly II nuclear plant. Following a recent judgment of the Supreme Court of Canada that the collective labour relations of persons working in nuclear establishments are subject to the legislative jurisdiction of the Parliament of Canada, and in particular to the Canada Labour Code, the applicant submitted to the Board an application for certification covering all engineers working at the said nuclear plant. In response to that application, Hydro-Québec successfully pleaded its immunity. The issue was whether Parliament intended the Canada Labour Code to apply to a mandatary corporation of the Crown in right of a province operating a nuclear plant, and if not, whether by its actions Hydro-Québec has given up its immunity.

Held, the application should be dismissed.

Section 17 of the Interpretation Act which is at the heart of the matter allows Parliament to bind the Crown in right of Canada as well as in right of the provinces. The Crown will be bound by legislation only if the statute contains express language to this effect, if it appears from the provisions of the statute as a whole that Parliament clearly intended to bind the Crown or if the purpose of the statute would be wholly frustrated or reduced to an absurdity if the Crown were not bound. In the first case, there is said to be a loss of immunity by an express legislative provision, and in the second and third cases, the immunity is said to be lost by necessary implication. The courts have sought to preserve the Crown immunity privilege and have not been deterred by the fact that a recognition of Crown immunity may yield a legal vacuum. In the case at bar, Hydro-Québec was not bound by the Canada Labour Code either expressly, by necessary implication or because of a clear intent to bind it. The amendments brought to the Canada Labour Code in 1993 with the adoption of the Telecommunications Act were added in order to include provincial Crown corporations operating in the telecommunications field within the scope of each of the three Parts of the Canada Labour Code. From this express inclusion it must follow that those corporations operating in the nuclear control field are not so included. Since Parliament has not expressed any clear intent to apply the provisions of Part I of the Canada Labour Code to Hydro-Québec in so far as it operates a nuclear plant, the latter enjoys Crown immunity.

The theory of waiver of immunity is based on the presumption that when the Crown agrees to take advantage of a statute it implicitly agrees to accept the limitations imposed by it. Hydro-Québec had not waived its immunity by signing a collective agreement with employees working in the nuclear power industry and by obtaining authority to operate its nuclear plant from the Atomic Energy Control Commission. There was not a sufficiently close nexus between the benefit received by Hydro-Québec in obtaining an operating licence and the duty of being subject to the Board’s jurisdiction as regards Part I of the Canada Labour Code. There was no connection between the activities of Hydro-Québec at its Gentilly II nuclear plant and the provisions of Part I of the Canada Labour Code, and the mere exercise by Hydro-Québec of its power to engage in a federal undertaking did not cause it to lose its immunity in respect of the Canada Labour Relations Board. It is Parliament’s responsibility to enact legislation filling the vacuum in which the union members find themselves.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Atomic Energy Control Act, R.S.C., 1985, c. A-16, s. 18.

Atomic Energy Control Regulations, C.R.C., c. 365, s. 9 (as am. by SOR/78-58, ss. 7, 8; SOR/90-191, s. 2).

Canada Labour Code, R.S.C., 1985, c. L-2, ss. 2 (as am. by S.C. 1990, c. 44, s. 7), 5.1 (as enacted by S.C. 1993, c. 38, s. 88), 123(1)(c) (as am. by R.S.C., 1985 (1st Supp.), c. 9, s. 2; S.C. 1993, c. 38, s. 89), 123.1 (as enacted by R.S.C., 1985 (1st Supp.), c. 9, s. 3), 167(1)(e) (as am. by S.C. 1993, c. 38, s. 90).

Hydro-Québec Act, R.S.Q. 1977, c. H-5, s. 13.

Interpretation Act, R.S.C., 1985, c. I-21, s. 17.

Labour Code, R.S.Q. 1977, c. C-27.

Professional Syndicates Act, R.S.Q. 1977, c. S-40.

Railway Act, R.S.C. 1970, c. R-2.

Telecommunications Act, S.C. 1993, c. 38, ss. 88, 89, 90.

CASES JUDICIALLY CONSIDERED

FOLLOWED:

Alberta Government Telephones v. Canada (Canadian Radio-television and Telecommunications Commission), [1989] 2 S.C.R. 225; [1989] 5 W.W.R. 385; (1989), 26 C.P.R. (3d) 289; 98 N.R. 161; IBEW v. Alberta Government Telephones, [1989] 2 S.C.R. 318; [1989] 5 W.W.R. 455; (1989), 68 Alta. L.R. 71; 94 N.R. 264.

DISTINGUISHED:

Ontario Hydro v. Ontario (Labour Relations Board), [1993] 3 S.C.R. 327; (1993), 107 D.L.R. (4th) 457; 93 CLLC 14,061; 158 N.R. 161; 66 O.A.C. 241; [1993] O.L.R.B. Rep. 1071; Bank of Montreal v. Attorney General (Que.), [1979] 1 S.C.R. 565; (1978), 96 D.L.R. (3d) 586; 25 N.R. 330; Sparling v. Quebec (Caisse de dépôt et placement du Québec), [1988] 2 S.C.R. 1015; (1988), 55 D.L.R. (4th) 63; 41 B.L.R. 1; 89 N.R. 120; 20 Q.A.C. 174.

APPLICATION for judicial review of a decision of the Canada Labour Relations Board refusing to certify the applicant union as representative of Hydro-Québec’s engineers employed at a nuclear plant. Application dismissed.

COUNSEL:

Gary H. Waxman for applicant.

Jean Leduc for respondent Hydro-Québec.

Alain Gingras for respondent Attorney General of Quebec.

C. Gabriel Bourgeois for respondent Attorney General of New Brunswick.

Richard Bertrand for interveners.

SOLICITORS:

Gary H. Waxman, Montréal, for applicant.

Loranger, Marcoux, Montréal, for respondent Hydro-Québec.

Deputy Attorney General of Quebec, Québec, for respondent Attorney General of Quebec.

Deputy Attorney General of New Brunswick, Fredericton, for respondent Attorney General of New Brunswick.

Trudel, Nadeau, Lesage, Larivière et Associés, Montréal, for interveners.

Legal Services, Canada Labour Relations Board, Ottawa, for Canada Labour Relations Board.

The following is the English version of the reasons for judgment rendered by

Décary J.A.: The issue is whether the Canada Labour Relations Board (the Board) has jurisdiction under Part I of the Canada Labour Code [R.S.C., 1985, c. L-2] to certify the Syndicat professionnel des ingénieurs d’Hydro-Québec (the applicant) as representative of Hydro-Québec’s engineers working at the Gentilly II nuclear plant. The Board said that in its opinion it lacked jurisdiction on account of the immunity which Hydro-Québec could claim to have in its capacity as a mandatary corporation of the Crown in right of the province.

The applicant union is an association of employees incorporated pursuant to the Professional Syndicates Act.[1] For over twenty years it has represented all the unionized engineers of Hydro-Québec under a statutory provincial certification granted pursuant to subsection 21(6) of the Quebec Labour Code[2] (the Quebec Code). There has always been a single collective agreement between the parties, periodically renegotiated and applicable to all the engineers, including those assigned to the Gentilly II nuclear plant. Accordingly, since this nuclear plant came on line the working conditions of the engineers employed there have been governed by the collective agreements concluded between Hydro-Québec and the applicant.

On October 4, 1993, following a judgment rendered by the Supreme Court of Canada a few days earlier in Ontario Hydro v. Ontario (Labour Relations Board)[3] (hereinafter Ontario Hydro), in which the Court had concluded that the collective labour relations of persons working in nuclear establishments are subject to the legislative jurisdiction of the Parliament of Canada, and in particular to the Canada Labour Code,[4] the applicant submitted to the Board an application for certification covering all engineers working for the Hydro-Québec Direction gestion nucléaire. In response to this application for certification, Hydro-Québec successfully pleaded its immunity.

The issue in the case at bar is more limited than would appear at first glance. There is no question of the division of powers or of constitutional classification. It is common ground that the powers in question, namely collective labour relations at the Gentilly II nuclear plant, belong to Parliament. It is established that the Quebec Code does not apply, or no longer applies, to these labour relations. It is not in dispute that but for the immunity relied on by Hydro-Québec in its capacity as a mandatary corporation of the Crown in right of the province,[5] the Canada Labour Code would automatically apply. In short, what remains to be decided is whether Parliament intended the Canada Labour Code to apply to mandatary corporations of the Crown in right of a province operating a nuclear plant, and if not whether by its actions Hydro-Québec has given up its immunity.

Crown immunity

The legislative provision which is at the heart of the matter is section 17 of the Interpretation Act:[6]

17. No enactment is binding on Her Majesty or affects Her Majesty or Her Majesty’s rights or prerogatives in any manner, except as mentioned or referred to in the enactment.

This provision allows Parliament to bind the Crown in right of Canada as well as in right of the provinces (see Alberta Government Telephones v. Canada (Canadian Radio-television and Telecommunications Commission)[7] (hereinafter AGT)).

The Crown will only be bound by legislation if the statute contains express language to this effect, if it appears from the provisions of the statute as a whole that Parliament clearly intended to bind the Crown or if the purpose of the statute would be wholly frustrated or reduced to an absurdity (as opposed simply to an undesirable result) if the Crown were not bound.[8] In the first case, there is said to be a loss of immunity by an express legislative provision, and in the second and third cases, the immunity is said to be lost by necessary implication.

Crown immunity is a privilege belonging to the Crown which the courts have taken great care not to erode if any other course was possible. The Supreme Court finally agreed, but only reluctantly, that the Crown could be bound other than by express language, and here again it was quick to point out that:[9]

… any exception to the normal Crown immunity rule based on a necessary implication should be narrowly confined. As a result, an intention to bind the Crown is not to be inferred merely from the fact that the provisions of a statute will not operate smoothly or efficiently if the Crown is not bound, nor from the fact that if the Crown is not bound the statute will have only a limited application.

In IBEW v. Alberta Government Telephones[10] (hereinafter IBEW), the Chief Justice added:

As this Court concluded in R. v. Ouellette, [1980] 1 S.C.R. 568, an express statement that the Crown is bound may be unnecessary (though it no doubt clarifies the matter as a matter of legislative drafting) in those limited situations where it can be said that “Her Majesty” may be “implicitly bound by legislation if that is the interpretation which the legislation must be given when it is placed in its context” (at p. 575, emphasis added).

The courts will not be influenced in their interpretation of the statute in question by the legal vacuum which a recognition of Crown immunity may produce, unless such recognition frustrates the application of the legislation as a whole.[11] In IBEW,[12] in which the issue was the same as in the case at bar, Dickson C.J. said the following in this regard:

… the gap created by Parliament’s failure to bind the provincial Crown in the Code may be inconvenient or even undesirable as a matter of operation or policy, but until Parliament chooses to fill the vacuum with an express statement that gives effect to this concern, the role of the judiciary is only to determine if the legislation would be wholly frustrated should the Crown in right of a province be excluded from the relevant provisions of the statute. Any suggestion that the purposes of Part V of the Code would be wholly frustrated should the provincial Crown not be bound thereto must be rejected. The vast majority of employees of federal undertakings would continue to be covered by Part V of the Code despite the immunity of the Crown in right of the provinces therefrom.

Is Hydro-Québec bound by the Canada Labour Code in the case at bar?

It is not bound expressly: that is certain. It is equally clear that in view of the comments by the Chief Justice just cited it is not bound by necessary implication because the legislative purpose is wholly frustrated. Is it bound by necessary implication because of a clear intent to bind it?

Counsel for the applicant sought by an analysis of the Atomic Energy Control Act[13] to demonstrate that Parliament by necessary implication intended that the Canada Labour Code should apply to undertakings such as the Gentilly II nuclear plant covered by section 18 of that Act. In his submission it is inconceivable that, realizing the health and safety problems presented for employees and the general public by the operation of nuclear plants, Parliament did not intend to make those employees subject to the provisions of the Canada Labour Code.

This approach is precisely what the courts should avoid in seeking to determine whether Parliament intended to bind the Crown by necessary implication. Reference should be made to the legislation in question, here the Canada Labour Code, and only to that, in seeking to determine Parliament’s intent in a given case. While the Atomic Energy Control Act may well apply to the Crown by necessary implication, as to which I express no opinion, it clearly can be of no assistance in this Court’s attempt to determine what Parliament intended with respect to the Canada Labour Code. For different legislation the intent may well be different.

The applicant, forced to fall back on the provisions of the Canada Labour Code itself to determine whether Parliament intended to bind the Crown, could do no better than refer the Court to section 123.1 [as enacted by R.S.C. (1985) (1st Supp.), c. 9, s. 3] to be found in Part II dealing with occupational safety and health, and reading as follows:

123.1 The Governor in Council may by order exclude, in whole or in part, from the application of this Part or any specified provision thereof employment on or in connection with any work or undertaking that is regulated pursuant to the Atomic Energy Control Act.

This section does not support the applicant’s argument: quite the contrary. It does not mention the Crown by name and the general language used is of the kind which the Supreme Court warned other courts against in AGT.[14] There are other forms of employment than those in the undertakings said to be to the advantage of Canada, which in any case are not necessarily operated by Crown corporations:[15] those may fall within the scope of the Atomic Energy Control Act or of the Regulations adopted thereunder, and I cannot in any way presume that this section necessarily applies to the Crown.

Furthermore, section 123.1 only covers Part II of the Code, and even if it did bind the Crown by necessary implication would only do so in respect of Part II, not Part I, the only one which has any bearing on the case at bar.[16]

Finally, the reading of section 123.1 suggested by the applicant disregards other provisions of the Code, section 5.1 [as enacted by S.C. 1993, c. 38, s. 88] in Part I, paragraph 123(1)(c) [as am. by R.S.C., 1985 (1^st Supp.), c. 9, s. 2; S.C. 1993, c. 38, s. 89] in Part II and paragraph 167(1)(e) [as am. by S.C. 1993, c. 38, s. 90] in Part III, which suggest a completely different interpretation. These sections, which read as follows,

5.1 This Part applies in respect of any Canadian carrier, as defined in section 2 of the Telecommunications Act, that is an agent of Her Majesty in right of a province and in respect of the employees of the carrier.

…

123. (1) Notwithstanding any other Act of Parliament or any regulations thereunder, this Part applies to and in respect of employment

…

c) by a Canadian carrier, as defined in section 2 of the Telecommunications Act, that is an agent of Her Majesty in right of a province.

…

167. (1) This Part applies

…

(e) to or in respect of any Canadian carrier, as defined in section 2 of the Telecommunications Act, that is an agent of Her Majesty in right of a province.

were added to the Canada Labour Code in 1993 when the Telecommunications Act was adopted.[17]

These amendments were clearly added in order to offset the effects of the IBEW decision,[18] in which the Supreme Court had held that employees of provincial Crown corporations operating an interprovincial telecommunications system were not subject to what was then Part V of the Canada Labour Code (and which has since become Part I). From this express inclusion of provincial Crown corporations operating in the telecommunications field within the scope of each of the three Parts of the Canada Labour Code it must follow that those corporations operating in the nuclear control field are not so included. When Parliament takes care to expressly bind certain Crown corporations in this way and for certain purposes, we may conclude that it intended to bind only those corporations, and only for those purposes. In the circumstances, the “necessary implication” works against the applicant’s arguments.

The applicant relied heavily on these remarks by La Forest J. in Ontario Hydro:[19]

Finally, the appellant Ontario Hydro advanced the notion that federal legislation should be so interpreted as not to apply to corporations set up to advance a provincial purpose. It conceded, however, that it was not a Crown agent and so not entitled to Crown immunity in the traditional sense. The Attorney General for New Brunswick did, however, argue that Crown immunity should apply where Crown agency is established. It is, therefore, right to say that the latter argument cannot stand in view of my holding that provincial laws regarding labour relations are inapplicable to works falling within the exclusive legislative jurisdiction of Parliament, since such legislation falls within the core of that jurisdiction.

I certainly cannot attach to these remarks the meaning suggested for them by the applicant. Not only are they merely an obiter dictum, as Ontario Hydro was not a Crown agent, but they were made in a context in which it seems to me La Forest J. was discussing not the immunity resulting from section 17 of the Interpretation Act, but that deriving from the theory of intergovernmental constitutional immunity rejected in AGT.[20]

I therefore conclude that Parliament has not expressed any clear intent to apply the provisions of Part I of the Canada Labour Code to Hydro-Québec in so far as it operates a nuclear plant. Hydro-Québec therefore enjoys Crown immunity.

Waiver of immunity

The Crown may lose its immunity by waiving it. The theory of waiver was recently explained by Dickson C.J. in AGT.[21] This theory is grounded essentially on the following presumption: when the Crown agrees to take advantage of a statute it implicitly agrees to accept the limitations imposed by the statute. However, since this presumption collides directly with the Crown immunity rule and is actually an exception to that rule, the courts here again must exercise restraint before concluding that there has been a waiver. As the Chief Justice pointed out at page 291:

In my view, the scope of the benefit/burden exception must be fashioned using the underlying doctrine as a reference point. Because of the necessarily deferential approach the courts must take on questions of Crown immunity, given s. 16 [now 17] and the test laid out earlier in this judgment for what it takes to mention or refer to the Crown, it would be inconsistent with the presumption of immunity to carve out a wide-ranging exception to the presumption. An exception cannot swallow a rule, which is, it seems to me, what must happen if the benefit/ burden doctrine were broadened such that the Crown would be bound by all of the burdens of a regulatory statute no matter how unrelated to the benefits gained by the Crown from that statute. In other words, a fairly tight (sufficient nexus) test for the benefit/burden exception follows from the strict test for finding a legislative intention to bind the Crown.

In the applicant’s submission, Hydro-Québec waived its immunity by signing a collective agreement and obtaining authority to operate its nuclear plant from the Atomic Energy Control Commission.

Signature of collective agreement

The applicant submitted that by signing a collective agreement with employees working in the nuclear sector, in which as Ontario Hydro confirmed industrial relations are governed by the Canada Labour Code, Hydro-Québec agreed by implication to be subject to the provisions of that Code.

This argument is without merit. When Hydro-Québec signed the collective agreement, it intended to be bound by the Quebec Labour Code. I do not see how it is possible to infer implicit coverage by one statute from express coverage by another. It is one thing to say that the Crown waived immunity in respect of a statute which it knew governed the contract and on which it intended to rely. It is quite another thing to say that the Crown waived its immunity in respect of legislation which it did not know governed the contract and on which it did not in any way intend to rely.

The cases cited by the applicant, Bank of Montreal v. Attorney General (Que.)[22] and Sparling v. Quebec (Caisse de dépôt et placement du Québec),[23] clearly cannot apply here. In Bank of Montreal the Supreme Court held that where the Crown in right of a province opens a bank account it enters into a banking contract the rules and consequences of which it by implication knows and accepts. In Sparling the Supreme Court held that by purchasing the shares of a company governed by a federal statute a provincial Crown corporation implicitly accepted the benefits and duties associated with that act, including that of filing an insider trading report.

Accordingly, in those two cases the Crown was aware of the applicable legislation, knew without the necessity of any express provision what it was undertaking by signing the contract and sought to benefit from the advantages of the legislation in question; what is more, the immunity was pleaded against that statute, not as in the case at bar against legislation other than that governing the contract at the time of signature. I do not see how it can be argued here that Hydro-Québec waived its immunity by contract when at the time it signed the contract it did not even know that such immunity was at issue.

Licence application

When under section 9 of the Atomic Energy Control Regulations[24] (the Regulations) it obtained a licence to operate the Gentilly II nuclear plant, Hydro-Québec certainly took advantage of the Atomic Energy Control Act. However, as Dickson C.J. pointed out in AGT[25] that does not mean that Hydro-Québec is accordingly bound by all the obligations of the regulatory statute. It must still be shown that there was a sufficiently close nexus between the benefit obtained and the duty which it is sought to impose, that of being subject to the Board’s jurisdiction as regards Part I of the Canada Labour Code.

In AGT the Supreme Court held that AGT had not waived Crown immunity in respect of the CRTC by choosing to accept the benefits resulting from its participation in a national telecommunications network governed by the Railway Act [R.S.C. 1970, c. R-2] and regulated by the CRTC pursuant to that Act. A fortiori the same is true when the regulatory agency is not the one designated in the statute taken advantage of by the Crown. In the case at bar Hydro- Québec is pleading its immunity not in respect of the Atomic Energy Control Commission but of the Canada Labour Relations Board, which is not even mentioned in the Atomic Energy Control Act or in the Regulations.

I sought in vain for “a sufficient nexus” between the benefits and duties when the legislation in question itself contains no provision to suggest that the Board has any part to play in administering the legislation and when, moreover, its implementing regulations include health and safety standards supervision of which is assigned not to the Board but to the Control Commission, inspectors and medical advisors.

I also do not see any basis for concluding that the benefit received by Hydro-Québec in obtaining an operating licence “[was] conditional upon compliance with the restriction,”[26] namely being subject to the Board’s jurisdiction.

I have thus arrived at the same conclusion as that formed by Dickson C.J. and Wilson J. on a similar point in IBEW,[27] at pages 330, 331 and 333. It is clear in the case at bar that there can be no connection or nexus between the activities of Hydro-Québec at its Gentilly II nuclear plant and the provisions of Part I of the Canada Labour Code, and I do not feel that the mere exercise by Hydro-Québec of its power to engage in a federal undertaking caused it to lose its immunity in respect of the Canada Labour Relations Board.

For these reasons, I would dismiss the application for judicial review. However, I would urge Parliament to fulfil its responsibility as soon as possible so as to fill the vacuum in which members of the applicant union find themselves.

Hugessen, J.A.: I concur.

Chevalier D.J.: I concur.

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