A-820-83
Canadian Pacific Limited (Appellant)
v.
Canadian Transport Commission (Respondent)
Court of Appeal, Pratte, Ryan and MacGuigan
JJ.—Montreal, March 6; Ottawa, June 27, 1985.
Railways — Appeal from Railway Transport Committee
Order No. R-34836 directing Canadian Pacific Limited to
apply minima other than those set out in Uniform Classifica
tion of Accounts re locomotive rebuild costs — UCA pre
scribed for use by railways in Canada by RTC Order No.
R-32999 — S. 24(3) National Transportation Act authorizing
Committee to exercise powers and duties of Commission in
accordance with rules and regulations of Commission — S.
9(2) General Rules of Commission reserving to Commission
power to make rules and regulations — RTC Orders ultra
vires — UCA "regulation" within usual sense of word —
Appeal allowed — Railway Act, R.S.C. 1970, c. R-2, ss. 328,
330 — National Transportation Act, R.S.C. 1970, c. N-17, ss.
24(1),(3), 26(1)(a), 42(e) — Federal Court Act, R.S.C. 1970
(2nd Supp.), c. 10, ss. 28, 29 — Canadian Transport Commis
sion General Rules, C.R.C., c. 1142, s. 9(1),(2) — National
Energy Board Act, R.S.C. 1970, c. N-6, s. 88(1)(c) — Income
Tax Act, S.C. 1970-71-72, c. 63, s. 36.
Statutes — Statutory interpretation — Whether Uniform
Classification of Accounts adopted by Railway Transport
Committee Order No. R-32999 pursuant to s. 328 of Railway
Act "regulation" — Usual meaning of "regulation" and perti
nent legislative context considered — UCA, applying to several
railway companies, not "particular direction in special case"
— UCA more than guidelines since companies under legal
obligation to observe UCA system — RTC without jurisdiction
to make impugned Order — Interpretation Act, R.S.C. 1970,
c. I-23, ss. 2(1), 28 — Regulations Act, R.S.C. 1952, c. 235, s.
2(a)(i) — Statutory Instruments Act, S.C. 1970-71-72, c. 38
— Canadian Transport Commission General Rules, C.R.C., c.
1142, s. 9(2) — Railway Act, R.S.C. 1970, c. R-2, s. 328.
The facts, as well as a number of the issues herein, have been
summarized in the Editor's Note. The headnote is accordingly
restricted to the reasons for judgment of Ryan J. and those of
MacGuigan J. with respect to the issue of the jurisdiction of the
Railway Transport Committee to make Order No. R-34836
directing Canadian Pacific to apply minima other than those
set out in the Uniform Classification of Accounts and Order
No. R-32999 establishing the said Classification.
Held, the appeal should be allowed on the grounds that both
Orders are ultra vires and void. Since section 28 reviews are
superseded by specific appeal rights under other federal acts,
the section 28 application should be dismissed.
Per Ryan J.: Whether subsection 9(2) of the General Rules
of the Commission limits to the Commission itself the exercise
of the powers conferred on it by section 328 depends on
whether the power of prescription conferred by the section must
be exercised by "regulation" or "rule". Neither term is defined
in the Railway Act or in the National Transportation Act. The
Interpretation Act gives in its subsection 2(1) a definition of
"regulation" but that definition is expressed as being applicable
only to its use in the Act itself. In order to determine the
meaning of "regulation" or "rule" in subsection 9(2), regard
must be had to its "usual use" and to the pertinent legislative
context, i.e. the Railway Act and the National Transportation
Act.
E. A. Driedger in Construction of Statutes, states that the
term "regulation" is "usually understood to be a subsidiary law
of general application whereas an `order' is usually regarded as
a particular direction in a special case". Clearly, the UCA,
applicable to over 30 railway companies, cannot be described as
a "particular direction in a special case". The UCA is also
more than a set of guidelines since under subsection 328(6) of
the Railway Act, every railway company for which the UCA is
prescribed is under a legal obligation to keep its accounts in
accordance with that system. Furthermore, subsections 328(3)
and (4) confer on the Commission more that the mere power to
prescribe the manner in which accounts are to be kept. Finally,
the UCA may well have consequences for regulatory cost
analysis and income tax purposes.
The respondent's argument, that where the authority "to
prescribe" is to be exercised by regulation, the provision specifi
cally prescribes it, such as in section 330 of the Railway Act,
was not well founded. There is no such readily available "rule
of thumb" to be found, even by implication, in either the
Railway Act or in the National Transportation Act which can
be used to determine whether the UCA is a set of regulations.
Per MacGuigan J.: One must look to substance in order to
clarify the terminology related to delegated legislation. Section
328 empowers the Commission to create new rules to classify
and systematize railway accounting. The power must therefore
be either legislative or administrative. S. A. de Smith in
Judicial Review of Administrative Action defined a legislative
act as the "creation ... of a general rule of conduct without
reference to particular cases". Administrative acts included
"the application of a general rule to a particular case". The
conclusion that the Commission's power under section 328 is a
delegated legislative power seems inevitable. An analogy was
drawn between paragraph 88(1)(c) of the National Energy
Board Act and paragraph 42(e) of the National Transportation
Act which both explicitly require a similar power to be exer
cised through regulations.
There remains the question whether subsection 9(2) reserves
to the Commission itself all the powers in relation to delegated
legislation. The usual meaning of the term "regulation" was
stated by E. A. Driedger in Construction of Statutes. The basic
definition of that word has remained the same in Canada since
the Regulations Act of 1950. Under subparagraph 2(a)(i) of
that Act, regulation meant "a rule, order, regulation, by-law or
proclamation ... made, in the exercise of a legislative power
conferred by or under an Act of Parliament". The presumption
in favour of this usual meaning can only be offset by some
textual indication to the contrary. That is not the case here: the
usual meaning is reinforced by the coupling of "rules" with
"regulations" in subsection 9(2) and particularly the words
"including orders that establish or make effective such regula
tions or rules". In other words, the context of subsection 9(2)
suggests a broad interpretation of "regulation" rather than a
narrow one tailored for the unique purposes of the General
Rules or limited to the rules of practice and procedure. Fur
thermore, it is appropriate that the requirement of proceeding
by way of regulation should not be narrowly read in order that
the protections afforded by the Statutory Instruments Act in
terms of registration, publication and parliamentary scrutiny,
be more widely available to affected parties.
CASE JUDICIALLY CONSIDERED
REFERRED TO:
Martineau et al. v. Matsqui Institution Inmate Discipli
nary Board, [1978] 1 S.C.R. 118.
COUNSEL:
T. Moloney and H. C. Wendlandt for
appellant.
H. I. Wetston and W. G. McMurray for
respondent.
SOLICITORS:
Law Department, Canadian Pacific Limited,
Montreal, for appellant.
Canadian Transport Commission, Winnipeg,
for respondent.
EDITOR'S NOTE
The three reasons for judgment herein total 30
pages of manuscript. The Editor has decided to
report this case in an abridged format. Abridg
ments of the following portions of the reasons for
judgment have been prepared: the facts as set
out by MacGuigan J., the reasons for judgment of
Pratte J., and the reasons for judgment of Mac-
Guigan J. with respect to the appellant's second
and third submissions. The case was selected for
publication for its discussion of "fundamental
questions about the jurisdiction of the RTC and
indeed about the whole process of delegated
legislation".
This is an appeal by Canadian Pacific Limited
("CP") from Order No. R-34836 made on January
28, 1983 by the Railway Transport Committee
("RTC") of the Canadian Transport Commission
("CTC"). CP's accounting for its "Locomotive
Overhaul and Rebuild Program" was put into
question by the RTC. This led to a review of the
matter by means of a public hearing and to the
appointment of a Commissioner. The Commis
sioner's report was adopted as submitted by RTC
Order No. R-34836. By that Order, made under
the authority of section 328 of the Railway Act,
the RTC directed CP to apply minima other than
those given in section 1307 of the Uniform Clas
sification of Accounts ("UCA") with respect to
locomotive rebuild costs. The UCA was pre
scribed for use by railways in Canada by RTC
Order No. R-32999 of November 26, 1981. Its
purpose is "to define the method of accounting
for railways subject to regulation by the Railway
Transport Committee of the Canadian Transport
Commission".
Section 328 provides inter alla that the CTC
shall prescribe for CP a uniform classification and
system of accounts. By virtue of subsection 24(3)
of the National Transportation Act, the RTC may,
in accordance with the rules and regulations of
the Commission, exercise all the powers and
duties of the Commission. However, subsection
9(2) of the General Rules of the Commission
provides that all regulations and rules, including
orders that establish or make effective such regu
lations or rules, shall be made by the Commission.
The appellant argues (1) that the RTC lacked
jurisdiction to make Order No. R-34836; (2) that,
in any event, it lacked jurisdiction on the grounds
that the notice of the public hearing was inade
quate and that the Commissioner has exceeded
its authority, and (3) that there was no evidence
to support the Commissioner's finding.
Pratte J. concurred with the disposition and
reasons of MacGuigan J. His Lordship shared Mr.
Justice MacGuigan's view that Order No. R-34836
was void, since the authority of the RTC to make it
was derived from Order No. R-32999 which was
itself void. Subsection 9(2) of the General Rules of
the Commission specifies that the committees of
the Commission have no authority to adopt regu
lations. Order No. R-32999, which prescribes a
Uniform Classification of Accounts, is clearly in
the nature of a regulation. The respondent's argu
ment that the word "regulations" in subsection
9(2) of the General Rules is not used in its usual
sense but merely refers to prescriptions which are
expressly required by a specific statutory provi
sion, was rejected.
The following are the reasons for judgment
rendered in English by
RYAN J.: I have had the benefit of reading the
reasons for judgment of Mr. Justice MacGuigan. I
agree with his proposed disposition of the appeal
and of the section 28 application. I also agree with
his reasons for his proposed disposition except only
that I would express rather differently my reasons
for agreeing that the Railway Transport Commit
tee (the "Committee") lacked authority to make
Order No. R-32999 establishing the Uniform
Classification of Accounts (the "UCA").
By Order No. R-32999 of November 26, 1981,
• the Committee prescribed the UCA "for use by all
railways subject to the jurisdiction of the
Committee".
Section 328 of the Railway Act [R.S.C. 1970, c.
R-2] provides:
328. (1) The Commission shall prescribe for the Canadian
National Railway Company and the Canadian Pacific Railway
Company a uniform classification and system of accounts and
returns of their assets, liabilities, revenues and working expen
diture that relate to railway operations.
(2) The Commission may prescribe for any other railway
company within the legislative authority of the Parliament of
Canada a uniform classification and system as described in
subsection (1), or a condensed form thereof.
(3) The Commission shall prescribe the items that shall be
classed as items relating to railway operations in the accounts
and returns.
(4) The Commission shall prescribe the classes of property
for which depreciation charges may properly be included under
operating expenses in the accounts, and the rate or rates of
depreciation that shall be charged with respect to each of the
classes of property.
(5) The Commission or person appointed or directed by the
Commission under this Act to make an inquiry or report may
inspect and take copies of the accounts and other documents of
any railway company within the legislative authority of the
Parliament of Canada.
(6) Every railway company for which the uniform or con
densed classification and system of accounts and returns is
prescribed shall keep its accounts in accordance with the pre
scribed classification and system.
(7) The Commission shall review and revise as necessary the
uniform classification of accounts, at intervals not longer than
every two years, to ensure that railway companies maintain
separate accounting
(a) of the assets and earnings of their rail and non-rail
enterprises; and
(b) of their operations by modes of transport.
Subsections (1) and (3) of section 24 of the
National Transportation Act [R.S.C. 1970, c.
N-17] provide:
24. (1) For the purposes of performing its duties under this
Act the Commission shall establish the following committees
consisting of not less than three commissioners, exclusive of the
President who shall be ex officio a member of every such
committee:
(a) railway transport committee;
(b) air transport committee;
(c) water transport committee;
(d) motor vehicle transport committee;
(e) commodity pipeline transport committee; and
(f) such other committees as the Commission deems
expedient.
(3) Notwithstanding anything in the Railway Act or the
National Energy Board Act governing matters before the Com
mission, a committee of the Commission may, in accordance
with the rules and regulations of the Commission, exercise all
the powers and duties of the Commission and the orders, rules
or directions made or issued by a committee of the Commission
have effect, subject to subsection (4), as though they were
made or issued by the Commission.
The authority vested in the Commission by sub
sections 328(1) and (2) of the Railway Act may
thus be exercised by the Committee "in accord
ance with the rules and regulations of the Commis-
Sion". Paragraph 26(1)(a) of the National Trans
portation Act provides:
26. (1) Without affecting its powers under any other Act to
make regulations, the Commission may make rules and regula
tions for the attainment of the objects of this Act and in
particular, but without limiting the generality of the foregoing,
may make rules and regulations
(a) respecting the manner in which any committees of the
Commission shall perform their functions and the duties and
functions to be performed by the committees of the
Commission;
The Canadian Transport Commission General
Rules [C.R.C., c. 1142] (the "General Rules"),
effective prior to September 1, 1983, provide in
part:
9. (1) Unless otherwise directed by the Commission and
subject to section (2), each committee shall perform all func
tions of the Commission under the enactments herein men
tioned after its name:
(a) Railway Transport Committee:
(vii) Railway Act,
(2) Notwithstanding anything in these Rules, all regulations
and rules, including orders that establish or make effective such
regulations or rules, shall be made by the Commission.
The question is whether subsection 9(2) of the
General Rules has the effect of limiting to the
Commission itself exercise of the powers conferred
on the Commission by section 328 of the Railway
Act. The answer depends on whether the power of
prescription conferred by the section must be exer
cised by a "regulation" or "rule" as those terms
are used in the subsection. Neither the term "regu-
lation" nor the term "rule" is defined in the Rail
way Act or in the National Transportation Act. In
subsection 2(1) of the Interpretation Act [R.S.C.
1970, c. I-23], the meaning of "regulation" is
extended to include a number of matters, some of
which might not fall readily within the usual sense
of the word; but "regulation", as defined in subsec
tion 2(1), is expressed as being applicable only to
its use "in this Act", that is to say, its use in the
Interpretation Act itself. The definition is not
included in section 28 of the Interpretation Act
which defines terms for purposes of "every
enactment".
As Mr. Justice MacGuigan indicates, it is clear
that neither the term "regulation" nor the term
"rule" can be said to have a single meaning. To
determine the sense in which "regulation" or
"rule" is used in subsection 9(2) of the General
Rules, it is useful to have regard to the usual way
in which the term is used, if it can be said to have
a "usual use", and to read subsection 9(2) in
relevant context. Obviously the Railway Act and
the National Transportation Act provide pertinent
context.
Mr. Justice MacGuigan has quoted E. A.
Driedger, Construction of Statutes (2nd ed.,
1983). The passage he quotes appears at page 304:
The term "regulation" is usually understood to be a subsidi
ary law of general application, whereas an "order" is usually
regarded as a particular direction in a special case.
Can it be said that the UCA is "a subsidiary law
of general application"?
The UCA is applicable not merely to the
Canadian National and the Canadian Pacific.
Over 30 railway companies are listed on page 11 of
the UCA as being under the jurisdiction of the
Railway Transport Committee of the Canadian
Transport Commission.
The purpose of the UCA is set out in its section
1001:
The purpose of the UCA is to define the method of accounting
for railways subject to regulation by the Railway Transport
Committee of the Canadian Transport Commission. It provides
accounting instructions and the framework of accounts for the
rail operations of such carriers. It also provides instructions for
the recording of operating statistics and defines the categories
for such data.
The UCA can hardly be described as "a particu
lar direction in a special case".
Under subsection 328(6) of the Railway Act,
every railway company for which the UCA is
prescribed is under legal obligation to "keep its
accounts in accordance with the prescribed clas
sification and system". The UCA is thus more
than a set of guidelines.
Subsections 328(3) and (4) are particularly sig
nificant. Under these subsections the Commission
must prescribe the items "that shall be classed as
items relating to railway operations". The Com
mission is also required to "prescribe the classes of
property for which depreciation charges may prop
erly be included under operating expenses". It is
also required to prescribe "the rate or rates of
depreciation that shall be charged".
The powers vested in the Commission thus go
beyond the power merely to prescribe the manner
in which accounts are to be kept.
Exercise of section 328 powers may also have
important consequences for regulatory purposes.
Section 1102.05 of the UCA reads:
The Canadian Transport Commission's "Railway Costing
Regulations" state the basis of costs for regulatory purposes. In
keeping with the above regulations, it is the intention of the
Committee that the UCA be used as the primary source of data
for regulatory cost analysis.
The UCA may also have significant income tax
consequences: see section 36 of the Income Tax
Act [S.C. 1970-71-72, c. 63] .
I am of the view that the UCA is a subordinate
legislative instrument subjecting a significant
number of railway companies to a variety of rules
which they are under legal obligations to observe;
these rules may well have consequences for pur
poses of regulatory cost analysis and taxation.
The respondent, however, places particular reli
ance on context in submitting that Order No.
R-32999 is not a "regulation" or "rule" within
subsection 9(2) of the General Rules, whatever
may be the "usual sense" in which these terms are
used, and in submitting that the UCA is not itself
a collection of rules and regulations falling within
subsection 9(2). The respondent drew particular
attention to the circumstance that subsection
328(1) of the Railway Act requires the Commis
sion to prescribe a uniform classification and
system of accounts and returns for the Canadian
National Railway Company and the Canadian
Pacific Railway Company, but does not stipulate
the manner in which the system is to be prescribed.
Authority "to prescribe" is conferred on the Com
mission by other provisions of the Railway Act and
the National Transportation Act; if, however, the
authority is to be exercised by "regulation", the
provision, it was submitted, specifically prescribes
that it shall be exercised in that way. Section 330
of the Railway Act, appearing in close proximity
to section 328, is an example. I do not, however,
find this circumstance very helpful in determining
whether the UCA is a set of regulations. Obviously
a regulation made under subsection 330(1) would
be a regulation falling within subsection 9(2) of
the General Rules, and the authority to make it
would obviously be reserved by that subsection to
the Commission. It would not, however, follow
that an order made pursuant to subsection 328(1)
or (2) or both could not be a regulation simply
because the subsections do not in terms require the
authorized prescription to be made by regulation. I
am afraid there is no such readily available "rule
of thumb" to be found, even by implication, in
either the Railway Act or the National Transpor
tation Act, a "rule of thumb" which can be used in
answering the question whether the UCA is a set
of regulations. I agree with Mr. Justice Mac-
Guigan that it is necessary "to look to substance".
And that is what I have done.
In my view the UCA is a "regulation" as that
term is usually understood, and I see nothing in
the legislative context in which subsection 9(2) of
the General Rules appears which would cause me
to read the term "regulation" as used in that
subsection in other than its usual sense.
* * *
The following are the reasons for judgment
rendered in English by
MACGUIGAN J.:
EDITOR'S NOTE
The appellant's third argument, that there was
no evidence in support of the Commissioner's
finding, cannot be sustained. According to Mac-
Guigan J., the Commissioner's own words in the
concluding section of the report clearly show that
he was responding to the evidence.
The appellant's second contention was seen as
equally unsupportable. According to His Lordship,
the words "so to capitalize the cost of the work
involved in the Canadian Pacific Limited Locomo
tive Overhaul and Rebuild Program", which are
present in the appointment of the Commissioner
and in the notice of public hearing, are broad
enough to confer both the requisite jurisdiction
and adequate notice of the purpose of the hear
ing. Those words make it apparent that a wide
meaning should be given to the otherwise ambig
uous expression "other minima". Courts should
not render useless the administrative process by
imposing unduly technical requirements of notice
or unduly narrow readings of jurisdiction, when it
is obvious from the process that the parties
involved understood the issues at the time.
However, the appellant's first contention is
another matter entirely, one which raises funda
mental questions about the jurisdiction of the RTC
[Railway Transport Committee] and indeed about
the whole process of delegated legislation.
The contention was stated by the appellant as
follows: the RTC purported to make Order No.
R-34836 under section 328 of the Railway Act
and, in particular, in furtherance of section 1307
of the UCA, which in turn purports to have been
promulgated under the same provision of the Rail
way Act; by virtue of subsection 24(3) of the
National Transportation Act a committee of the
Commission may, in accordance with the rules and
regulations of the Commission, exercise all the
powers à nd duties of the Commission, but subsec
tion 9(2) of the General Rules of the CTC
[Canadian Transport Commission] expressly pro
vides that a regulation-making power granted to
the Commission shall not be exercised by a com
mittee such as the RTC; the power conferred upon
the CTC by section 328 of the Railway Act is by
its nature a regulation-making power, and the
UCA, which purports to have been made under
that section, is of the nature of a regulation or
regulations; consequently, the RTC had no juris
diction to make Order No. R-34836.
Section 328 of the Railway Act reads as follows:
328. (1) The Commission shall prescribe for the Canadian
National Railway Company and the Canadian Pacific Railway
Company a uniform classification and system of accounts and
returns of their assets, liabilities, revenues and working expen
diture that relate to railway operations.
(2) The Commission may prescribe for any other railway
company within the legislative authority of the Parliament of
Canada a uniform classification and system as described in
subsection (1), or a condensed form thereof.
(3) The Commission shall prescribe the items that shall be
classed as items relating to railway operations in the accounts
and returns.
(4) The Commission shall prescribe the classes of property
for which depreciation charges may properly be included under
operating expenses in the accounts, and the rate or rates of
depreciation that shall be charged with respect to each of the
classes of property.
(5) The Commission or person appointed or directed by the
Commission under this Act to make an inquiry or report may
inspect and take copies of the accounts and other documents of
any railway company within the legislative authority of the
Parliament of Canada.
(6) Every railway company for which the uniform or con
densed classification and system of accounts and returns is
prescribed shall keep its accounts in accordance with the pre
scribed classification and system.
(7) The Commission shall review and revise as necessary the
uniform classification of accounts, at intervals not longer than
every two years, to ensure that railway companies maintain
separate accounting
(a) of the assets and earnings of their rail and non-rail
enterprises; and
(b) of their operations by modes of transport.
The relevant parts of section 9 of the Canadian
Transport Commission General Rules, C.R.C., c.
1142, in effect prior to September 1983 are as
follows:
9. (1) Unless otherwise directed by the Commission and
subject to section (2), each committee shall perform all func
tions of the Commission under the enactments herein men
tioned after its name:
(a) Railway Transport Committee:
(i) sections 22, 23, 27 and 63 of the Act, in respect of
railways,
(ii) Canadian National Railways Act,
(iii) Federal Court Act,
(iv) Government Railways Act,
(v) Maritime Freight Rates Act,
(vi) National Energy Board Act,
(vii) Railway Act,
(viii) Part IV of the Transport Act,
(ix) Railway Relocation and Crossing Act, and
(x) Anti-Inflation Act, in respect of railways, and pursu
ant to Order in Council P.C. 1975-3060 of December 23,
1975;
(2) Notwithstanding anything in these Rules, all regulations
and rules, including orders that establish or make effective such
regulations or rules, shall be made by the Commission.
The respondent replies that the UCA is not a
collection of regulations but a set of accounting
instructions prescribed for Canadian railway com
panies, that section 328 does not specify the
manner in which such a system is to be prescribed,
and that the regulations and rules which must be
made by the full Commission are only those which
determine its practice and procedure.
Whatever legal problem may be found to exist
will relate not only to Order No. R-34836 of
January 28, 1983, but also to Order No. R-32999
of November 26, 1981, establishing the UCA
itself, since this was by sole action of RTC, even
though its earlier versions were established by the
Board of Transport Commissioners for Canada,
the predecessor of the CTC. The issue therefore
has broad implications.
Counsel for the appellant laid considerable
emphasis, in oral argument, on the use of the word
"prescribe" in subsection 328(1) ("The Commis
sion shall prescribe ... a uniform classification
and system of accounts"), which he submitted
carried the implication of regulation-making.
However, if there is one thing which is crystal-
clear in the confused microcosm of delegated legis
lation, it is that no conclusion should be drawn
from terminology alone, since it has been remark
able for its inconsistency. As it was put in the
Third Report of the Special Committee on Statu
tory Instruments (Queen's Printer for Canada,
Ottawa, 1969), at page 12:
It is not too unusual to find in statutory conjunction power to
make "orders", "rules" and "regulations", with no indication as
to what the difference is. The confusion of names is not only
due to the use of many different words for the same thing. It is
aggravated by the use of the same word for different things.
The word "order" is used for an administrative act, for a
judicial act, for a legislative act and for a prerogative act.
Despite the consequent enactment of the Statutory
Instruments Act in 1971 [S.C. 1970-71-72, c. 38],
there can be no confidence that the terminology
has been entirely rationalized. The only safe
course is to look to substance.
What does the Railway Act in section 328 mean
in requiring the Commission to "prescribe ... a
uniform classification and system of accounts"?
What does subsection 9(2) of the General Rules
withhold from the RTC in requiring that "all
regulations and rules, including orders that estab
lish or make effective such regulations or rules,
shall be made by the Commission"?
It was not argued that the Commission's power
under section 328 is judicial or quasi-judicial, for
it is clearly a power not to interpret pre-existing
criteria but to create new rules to classify and
systematize railway accounting. It must therefore
be either a legislative or an administrative power.
Legislation, whether original or delegated, and
administration are closely related: they are on the
same side of the coin, as it were. Legislation
precedes; administration follows. Legislation
establishes criteria; administration applies them.
S. A. de Smith puts the distinction this way (Judi-
cial Review of Administrative Action, 4th ed. by J.
M. Evans, London, Stevens & Sons Limited, 1980,
at page 71):
A distinction often made between legislative and administra
tive acts is that between the general and the particular. A
legislative act is the creation and promulgation of a general rule
of conduct without reference to particular cases; an administra
tive act cannot be exactly defined, but it includes the adoption
of a policy, the making and issue of a specific direction, and the
application of a general rule to a particular case in accordance
with the requirements of policy or expediency or administrative
practice.
In the light of analysis the conclusion that the
Commission's power under section 328 is a dele
gated legislative power seems inevitable. Indeed, a
similar power to prescribe "a uniform system of
accounts ... to any class of company" in para
graph 88(1)(c) of the National Energy Board Act
[R.S.C. 1970, c. N-6] is explicitly required to be
exercised through regulations, as is the more lim
ited power to prescribe "forms of accounts and
records to be kept by operators of motor vehicle
undertakings" under paragraph 42(e) of the Na
tional Transportation Act itself.
To escape this conclusion, the respondent
impliedly contends that the Commission's power
under section 328, relating to a mere set of
accounting instructions, is of a sub-legislative
character, perhaps on the analogy of administra
tive rules, directives or guidelines. The flaw in such
an approach is that such directives are by defini
tion lacking in the status of law (Martineau et al.
v. Matsqui Institution Inmate Disciplinary Board,
[1978] 1 S.C.R. 118), whereas the respondent is
here seeking to impose legal consequences on CP
under the same UCA. I find no alternative to
interpreting section 328 as bestowing a delegated
legislative power and therefore as requiring imple
mentation through action taken in the exercise of
legislative power.
The question remains whether the exemption
from RTC jurisdiction of "all regulations and
rules" by subsection 9(2) of the General Rules
reserves to the Commission itself all power in
relation to delegated legislation. The usual mean
ing of regulation is stated by E. A. Driedger,
Construction of Statutes, 2nd ed. Toronto, Butter-
worths, 1983, at page 304, as follows:
The term "regulation" is usually understood to be a subsidi
ary law of general application, whereas an "order" is usually
regarded as a particular direction in a special case.
Although there was some fine-tuning of the defini
tion of regulation with the Statutory Instruments
Act in 1971, the basic definition has remained the
same in Canada since the Regulations Act in 1950
[R.S.C. 1952, c. 235]. Subparagraph 2(a)(i) of
that Act provided: "In . this Act ... `regulation'
means a rule, order, regulation, by-law or procla
mation ... made, in the exercise of a legislative
power conferred by or under an Act of Parlia
ment" (emphasis added). The alternative defini
tion in section 2 of the Interpretation Act is even
broader, since it extends to the exercise of any
power under a statute.
The point is not whether such definitions for
mally apply to the passage in question, but rather
that the definitions, in particular that found first
in the Regulations Act and then in the Statutory
Instruments Act, are declaratory of the usual
meaning of the term "regulation". The presump
tion in favour of this usual meaning could be offset
only by some textual indication to the contrary.
But in fact the usual meaning is reinforced by the
context here: the coupling of "rules" with "regula-
tions" in subsection 9(2) and particularly the
words "including orders that establish or make
effective such regulations or rules". In other
words, the context suggests a broad interpretation
of regulation rather than a narrow one tailored for
the unique purposes of the General Rules, or lim
ited to rules of practice and procedure.
Moreover, in the light of the special protections
for the public that the Statutory Instruments Act
establishes with respect to regulations, in terms of
examination by the Department of Justice, trans
mission, registration, publication, laying before
Parliament, and parliamentary scrutiny through
the Standing Joint Committee on Regulations and
other Statutory Instruments, I believe it is appro
priate that the requirement of proceeding by way
of regulation should not be narrowly read, in order
that these protections be more widely available to
affected parties.
Finally, the absence of these usual procedures,
with which the RTC would be familiar from their
participation in the work of the CTC, leads to the
conclusion that the RTC did not even purport to
exercise regulation-making power in relation to the
UCA. Therefore, even if, contrary to my analysis,
the RTC did possess the same regulation-making
power as the CTC, it did not intend to exercise
that power in making the UCA.
Since in my view both Orders No. R-34836 and
No. R-32999 are ultra vires and void, I would
allow the appeal and certify this opinion to the
Commission. As section 29 of the Federal Court
Act [R.S.C. 1970 (2nd Supp.), c. 10] provides that
section 28 review is superseded by specific appeal
rights under other federal Acts, the section 28
application should be dismissed.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.