Judgments

[1996] 2 F.C. 371

T-956-90

Her Majesty the Queen (Plaintiff)

v.

St. Lawrence Cruise Lines Inc. (Defendant)

Indexed as: Canada v. St. Lawrence Cruise Lines Inc. (T.D.)

Trial Division, Dubé J.—Ottawa, December 4, 1995 and January 30, 1996.

Administrative law — Basic principles — Delegated legislation — Whether regulatory provision imposing passenger charges on cruise vessels using public dock while exempting ferries ultra vires Public Harbours and Port Facilities Act — Review of leading cases on exercise of discretionary powers — Objective of national ports policy — Act, s. 12 empowering Governor in Council to regulate for management, use of public harbours including imposition of charges — Understandable fees may vary according to vessel type — Definition of “vessel” within Minister’s discretion — No discrimination between persons similarly situated as all cruise vessels charged — Ferries not similarly situated as providing different service.

Maritime law — Harbours — Delegated legislation — Whether Government Wharves Regulations ultra vires Public Harbours and Port Facilities Act as (1) not authorized by Act (2) based on irrelevant considerations (3) discriminatory — Passenger charges in respect of cruise vessels using public dock — Local ferry using same dock free of charges — Objective of national ports policy — Regulatory powers of Governor in Council set out in Act — Definition of “cruise vessel” in Regulations excluding ferry — Whether Regulations going beyond confines of Act in distinguishing between “cruise vessel” and other vessels — S. 12 of Act affording Minister discretion to impose fees on cruise vessels — Understandable fees may vary according to vessel type.

This was an action for passenger charges incurred under the Public Harbours and Port Facilities Act and the Government Wharves Regulations. Since 1988 the defendant has owned and operated passenger cruise vessels which use a public port facility at Kingston, Ontario to embark and disembark passengers.

Act, section 3 declares the objectives of the national ports policy as including the creation of an efficient system of public harbours for the achievement of national, regional and local economic and social objectives and to provide equitable treatment to users of Canadian ports. The broad definition of “vessel” in section 2 includes every description of ships. Section 12 permits the Governor in Council to make regulations for the management, control, development and use of any public port facility, including the imposition of rates, tolls, fees or charges on vessels and persons using the facility. The local ferry, which uses the same dock as do defendant’s vessels, is excluded from the definition of “cruise vessel” and the payment of fees. The defendant submitted that the Regulations were ultra vires on the grounds that (1) they were not authorized by the Act; (2) the purpose of the Regulations was based on irrelevant considerations; and (3) they were discriminatory. The defendant submitted that one of the objectives of the national ports policy is the equitable treatment of users of Canadian ports and that the statute provides for the imposition of fees and other charges upon a vessel and does not confer a power to differentiate between cruise vessels, passenger vessels, day-trippers or ferries. It argued that the Minister’s stated objectives of increasing harbour fees to enhance cost recovery with respect to the public harbours infrastructure and to support the federal government’s deficit reduction exercise was not a valid ground for distinguishing between ferry and cruise vessel passengers. Finally, the defendant argued that the cruise vessel passenger fee was clearly discriminatory, and there was no legislative authority in the empowering Act for the Governor in Council to create such a distinction.

Held, the action should be allowed.

(1) The Governor in Council had properly exercised his discretion. The Regulations were legislated pursuant to the enabling statute and were not ultra vires on any of the grounds submitted by the defendant. Section 12 affords the Minister sufficient discretion to introduce Regulations imposing fees on cruise vessels.

(2) The definition of “vessel” is within the Minister’s discretion. Under section 4 of the Act, the Minister is responsible for achieving the objective of the national ports policy. If the purpose of the exercise is to raise revenues and reduce the deficit, it is valid and authorized under section 3 as providing efficient service under the national ports policy.

(3) The Regulations were not discriminatory. Discrimination may result from distinctions if their effects are unequal as between persons who are similarly situated. There was, however, no evidence that the passenger fees were not imposed on all cruise vessels. They were not imposed on the local ferry, but it was not the same type of vessel and did not provide the same type of service and was therefore not similarly situated.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

Government Wharves Regulations, C.R.C., c. 881, s. 2 “cruise vessel” (as enacted by SOR/86-493, s. 1).

Pilotage Act, S.C. 1970-71-72, c. 52.

Public Harbours and Port Facilities Act, R.S.C., 1985, c. P-29, ss. 2 “vessel”, 3(1), 12(1).

Referendum Act, S.C. 1992, c. 30.

CASES JUDICIALLY CONSIDERED

CONSIDERED:

Metropolitan Toronto, The Municipality of v. The Corporation of the Village of Forest Hill, [1957] S.C.R. 569; (1957), 9 D.L.R. (2d) 113; Bunce and Town of Cobourg, Re, [1963] 2 O.R. 343; (1963), 39 D.L.R. (3d) 513 (C.A.); Tegon Developments Ltd. and Montreal Trust Company v. City of Edmonton and Alberta Minister of Culture (1977), 8 A.R. 384; 81 D.L.R. (3d) 543; 5 Alta. L.R. (2d) 63 (S.C.A.D.); affd [1979] 1 S.C.R. 98; (1978), 7 Alta. L.R. (2d) 292; 24 N.R. 269; Alaska Trainship Corporation et al. v. Pacific Pilotage Authority, [1981] 1 S.C.R. 261; (1981), 120 D.L.R. (3d) 577; 35 N.R. 271; Montréal (City of) v. Arcade Amusements Inc. et al., [1985] 1 S.C.R. 368; (1985), 14 D.L.R. (4th) 161; 29 M.P.L.R. 220; 58 N.R. 339; Roncarelli v. Duplessis, [1959] S.C.R. 121; (1959), 16 D.L.R. (2d) 689; Padfield v. Minister of Agriculture, Fisheries and Food, [1968] A.C. 997 (H.L.); Thorne’s Hardware Ltd. et al. v. The Queen et al., [1983] 1 S.C.R. 106; (1983), 143 D.L.R. (3d) 577; 46 N.R. 91; Haig v. Canada; Haig v. Canada (Chief Electoral Officer), [1993] 2 S.C.R. 995; (1993), 105 D.L.R. (4th) 577; 156 N.R. 81.

AUTHORS CITED

Dussault, René and Louis Borgeat. Administrative Law: A Treatise, 2nd ed., vol. 1, trans. Murray Rankin. Toronto: Carswell, 1985.

Holland, D. C. and J. P. McGowan. Delegated Legislation in Canada. Toronto: Carswell, 1989.

Jones, D. P. and A. S. de Villars. Principles of Administrative Law, 2nd ed. Toronto: Carswell, 1994.

Keyes, J. M. Executive Legislation: Delegated Law Making by the Executive Branch. Toronto: Butterworths, 1992.

ACTION for annual fees imposed under Public Harbours and Port Facilities Act and Government Wharves Regulations for the use of a public dock. Action allowed.

COUNSEL:

Marie-Louise Wcislo for plaintiff.

J. Kenrick Sproule for defendant.

SOLICITORS:

Deputy Attorney General of Canada for plaintiff.

Marler, Sproule, Castonguay, Montréal, for defendant.

The following are the reasons for judgment rendered in English by

Dubé J: The plaintiff, as represented by the Minister of Transport (the Minister), claims passenger charges incurred by the defendant, St. Lawrence Cruise Lines Inc. (St. Lawrence Cruise) under the Public Harbours and Port Facilities Act[1] (the Act) and the Government Wharves Regulations,[2] as amended, SOR/86-493 (the Regulations).

The essential facts are admitted. Since 1988, St. Lawrence Cruise owned and operated the Canadian Empress and in addition, during the years 1990-1992, the Victorian Empress, both of which are passenger cruise vessels, and used the Crawford Dock, a public port facility in the City of Kingston for purposes of embarking and disembarking passengers. St. Lawrence Cruise received invoices totalling $52,636.27 as of November 28, 1994. Pursuant to an order of this Court dated April 23, 1990, St. Lawrence Cruise deposited into Court the yearly fees claimed by the Minister in order to be allowed to continue using the Crawford Dock.

St. Lawrence Cruise claims that it has no legal obligation to pay the charges on the ground that the new Regulations are ultra vires the Act pursuant to which they were enacted. At the hearing of this matter counsel for the defendant fully outlined the three bases upon which he rested his ultra vires arguments: (1) the new Regulations are not authorized by the Act; (2) the purpose of the new Regulations is based on irrelevant considerations; (3) the new Regulations are discriminatory.

1- The new Regulations are not authorized by the Act

Counsel for the defendant divided his first basis of attack into two grounds. First, the new Regulations create two different categories of fee payers and second, they ignore the purpose of the enabling statute.

The objective of the national ports policy is outlined in subsection 3(1) of the Act which reads as follows:

3. (1) It is hereby declared that the objective of the national ports policy for Canada is to create a system of public harbours that

(a) is an effective instrument of support for the achievement of Canadian international trade objectives and of national, regional and local economic and social objectives;

(b) is efficient;

(c) provides accessibility and equitable treatment in the movement of goods and persons to users of Canadian ports; and

(d) is coordinated with other marine activities and surface and air transportation systems.

Section 2 of the Act defines the word “vessel” as follows:

2. …

“vessel” includes every description of ship, boat or craft used or capable of being used solely or partly for marine navigation without regard to method or lack of propulsion, a dredge, a floating elevator, a floating home, an oil-rig, a sea-plane, a raft or boom of logs or lumber and an air cushion vehicle.

Section 12 of the Act outlines the regulatory powers of the Governor in Council and more specifically provides as follows at paragraphs 12(1)(i) and 12(1)(j):

12. (1) The Governor in Council may make regulations for the management, control, development and use of any public harbour or public port facility, including regulations

…

(i) for the imposition and collection of rates or tolls on vehicles, vessels and persons coming onto or into or using any public harbour or public port facility and on goods or cargoes landed from or shipped on board those vessels, transhipped by water within the limits of any public harbour or stored on or moved across any public port facility;

(j) prescribing the fee or charge to be paid for the use of any public harbour or any public port facility and for any service provided thereat by the Minister.

On June 1, 1986, the Regulations were amended to include a definition of “cruise vessel”:

2. …

“cruise vessel” means a vessel carrying passengers for a fare where the vessel is engaged in a voyage during which the passengers are on board the vessel for at least one overnight period, but does not include a ferry;

Counsel notes that one of the objectives of the national ports policy is to provide equitable treatment to users of Canadian ports and that the definition of “vessel” under the Act is very broad and does not include a distinction between “cruise vessel” and other vessels such as day-trippers, day-cruisers or ferries. He also underlines the fact that the power to make regulations is for the management, control, development and use of public harbours. It has been clearly established by administrative law jurisprudence that the courts do not permit a regulation to go beyond the confines of its parent Act.[3] Counsel claims that the principle refers to a general regulatory power or an omnibus clause which does not exist in this Act. In Metropolitan Toronto, The Municipality of v. The Corporation of the Village of Forest Hill,[4] the Supreme Court of Canada in 1957 struck out a regulation which intended to bring into effect a program of fluoridation. The enabling Act’s purpose was to ensure the provision of pure and wholesome water to the villagers. Cartwright J. said (at page 580) that “[i]n pith and substance the by-law relates not to the provision of a water supply but to the compulsory preventive medication of the inhabitants of the area”.

The two authors of Delegated Legislation in Canada, Denys C. Holland and John P. McGowan, in their paragraph on the interpretation of specific powers, write as follows (at page 196):[5]

We have seen that the courts’ attitudes towards the interpretation of enabling clauses will vary according to the extent to which regulations made under them will affect the rights of the individual. While the effect of potential regulatory interference with these rights is therefore a significant interpretive aid, the starting point for any judicial analysis must always be the plain meaning of the words used by the legislature.

In practice, the courts will be required to determine the scope of either

(i) a specific grant of power, or

(ii) of the omnibus provision in the enabling clause.

And at page 197, the authors further describe what they mean by specific grants of power, as follows:

When we speak here of grants of power, we are speaking of “power” in the wider of two senses. What we mean in essence is the delegation of legislative authority in any form other than the omnibus clause.

And the authors continue at page 198:

Where subordinate legislation has been made pursuant to a specific grant of power as in the restricted sense above, the trend has been toward a literal interpretation of the statutory language.

Counsel argues that since there is no omnibus clause in the Act, the powers delegated to the Governor in Council are restricted to a literal interpretation of section 12 of the Act and more specifically paragraphs 12(1)(i) and (j).

In an Ontario Court of Appeal decision, Bunce and Town of Cobourg, Re,[6] the municipality had been granted the power to classify shops according to the type of merchandise it sold. At page 346, the Court held there was no power in the municipal council to subdivide the class and make those shops falling within one subdivision subject to the by-law and others not. The Court said that the by-law was “unfair and unreasonable”.

In his book Executive Legislation, John Mark Keyes,[7] under the heading “Defining Terms and Requirements” dealt with provisions that expressly define terms as well as those that narrow or expand their meaning. The rule is that the limits on these defining provisions are related “to the interpretive rule that terms found in executive legislation have the meaning that they have in the enabling legislation”. He wrote as follows (at pages 210-211):

Defining a term used in enabling or coordinate legislation is, in itself, innocuous. However, when the definition modifies requirements, rights, benefits or authority imposed or conferred under enabling or coordinate legislation, it is likely to be ultra vires. The greater the modification, the greater the chance that the definition will be struck down. Definitions that alter the meaning of terms that define the scope of the enabling legislation are particularly prone to attack on this basis.

Definitions in executive legislation are most frequently struck down when there is no express authority to define terms, or when the enabling authority is an omnibus clause, even when expanded by subjective terminology. However, definitions made under more specific enabling provisions have also been struck down.

Counsel invites the Court to conclude that there is no such defining power to be found in paragraph 12(1)(i) or 12(1)(j). The definition of “vessel” under the Act is quite clear and there is no ability granted to the Governor in Council to change that definition by way of regulations. The statute provides for fees and other charges to be imposed upon a vessel or its cargo and allows no power to differentiate between cruise vessels, passenger vessels, day-trippers or ferries.

Moving on to the second prong of his first argument, that is the new Regulations are ultra vires because they do not conform to the stated purpose of the Act, counsel returns to the same author, John Mark Keyes and to his chapter 9 entitled “Enabling Provisions”, under the heading “Authorized Purposes”. The author writes as follows (at pages 187-188):

The purposes for which executive legislative authority is conferred always affect its scope. However, their effects vary depending on the degree to which they are expressed in the enabling legislation and are linked to the legislative authority. Express purposes that are clearly linked to the legislative authority give it content. They also affect the authorized matters in so far as they embrace particular matters, preventing the authority from being exercised in relation to matters that have nothing to do with the authorized purposes.

Counsel asks the question: do the new Regulations promote the equitable treatment in the movement of persons to users in Canadian ports? He answers that they do not. He offers as an example the local ferry, the Island Queen, which embarks and disembarks passengers from Crawford Dock several times a day, yet she is excluded from the new definition and the fees in question. He submits that the only substantial difference between the two classes of passengers is that the passengers on board a cruise have a greater capacity to pay then those taking the ferry. The real raison d’être for the cruise vessel passengers fee, as expressed by the Minister in a letter to the local Member of Parliament, is to raise revenue. Therefore, the fee is not imposed in an equitable way consistent with the objective of the national ports policy as expressed in section 3 of the Act.

2- The purpose of the new Regulations is based on irrelevant considerations

In their book Principles of Administrative Law,[8] David Phillip Jones and Anne S. de Villars, discuss this matter under the heading “The Abuse of an Improper Intention: Unauthorized or Ulterior Purpose, Bad Faith, Irrelevant Considerations” (at page 149). They write as follows (at pages 149-150):

Of course, it will frequently be a nice question of statutory interpretation as to whether the particular purpose for which the statutory power is being exercised has been authorized or not by the legislation….

On the other hand, only one of these phrases may be applicable to describe the particular error committed by the statutory delegate. In particular, the courts may be reluctant to find the existence of bad faith, even where the delegate has acted for an improper purpose or on irrelevant considerations. Bearing in mind this terminological difficulty, it is useful to consider examples of each one of these categories.

Counsel affirms that there is no question of bad faith in the case at bar, merely ulterior purposes or irrelevant considerations. The authors refer by way of illustration to an Alberta decision,[9] as follows (at page 151):

The courts’ approach to this problem is well illustrated by the decision in Tegon Developments Ltd. v. Edmonton City Council. The case involved a resolution by city council prohibiting any development or demolition which might conflict with the historical character of the Old Strathcona area of Edmonton. Although the Planning Act specifically provided that a municipal council might make resolutions respecting “(a) the use of land in specific areas, or (b) any special aspects of specific kinds of development and the manner of their control”, Moir J.A. held that the resolution in question purported to use this statutory power for an unauthorized purpose.

The Supreme Court of Canada in Alaska Trainship Corporation et al. v. Pacific Pilotage Authority,[10] dealt with the validity of the inclusion of a ship’s flag as consideration in exemption from, or waiver of, compulsory pilotage. The Chief Justice said as follows (at page 268):

It is obvious from the opening words of s. 14(1) that the regulation-making power of an Authority is circumscribed by the requirement that the regulations must be in pursuance of or in conformity with its objects. Those objects are specified in s. 12 of the Act in the following terms:

12. The objects of an Authority are to establish, operate, maintain and administer in the interests of safety an efficient pilotage service within the region set out in respect of the Authority in the Schedule.

The Court ruled that the ship’s flag could not be fairly said to be a matter of safety in the realization of the objective of the authority under the Pilotage Act [S.C. 1970-71-72, c. 52]. In his letter, above referred to and dated April 10, 1986, to the local member of Parliament, the Honourable Flora MacDonald, Minister of Employment and Immigration, the Minister wrote as follows in answer to concerns expressed by the defendant:

Please inform Mr. Clark that the proposed increases in harbour fees and the introduction of a Cruise Vessel Passenger Charge are required to reflect the rising costs of providing the public harbours and ports infrastructure. They will also add to the level of cost recovery for public harbours and ports, which is part of the federal government’s deficit reduction exercise.

As a result of consultations with users and departmental officials, the proposals have been revised. The new Cruise Vessel Passenger Charge will not come into effect until 1 April 1987, and will be $3.00 per passenger. This is to allow time to reflect the charge in cruise vessel fares for the 1987 season. The charge does not apply to day cruises or ferry operations, and it is assessable when a vessel uses a public port facility to embark or disembark passengers.

Thus, according to the defendant, the twofold objective of the new fees is to raise the revenue and reduce the deficit. Counsel argues that the stated objective is not a valid ground for making a distinction between those who use the facilities to take a ferry and those who embark on a cruise vessel. In fact, ferry passengers make much greater use of the wharf than cruise passengers.

3- The new Regulations are discriminatory

The authors of Administrative Law: A Treatise, the treatise mentioned earlier, René Dussault and Louis Borgeat, deal with discrimination by the legislature or regulatory authorities in these terms (at page 435):

As has been previously mentioned, the Legislature and regulatory authorities are prohibited from enacting standards which discriminate on certain grounds, such as sex or race. This prohibition is based upon provisions of a constitutional or quasi-constitutional nature, and is rigorously enforced by the courts. However, the criteria for discrimination set out in these provisions are not the only ones that are subject to judicial supervision insofar as the exercise of a regulation-making power is concerned. Indeed, the courts often consider that Parliament alone must possess this delicate power which consists in disadvantaging one category of citizens in relation to another.

Thus, discrimination is a boundary surrounding the exercise of the regulation-making power. Counsel claims that it is patently apparent, that there is discrimination “in the neutral sense of the word” between the day-cruisers and the overnight passenger vessels: the power to make regulations does not carry the power to create exemptions of a discriminatory nature. The author John Mark Keyes in his book entitled Executive Legislation: Delegated Law Making by the Executive Branch, quoted earlier, writes as follows under the heading of “Discrimination” (at pages 225-227):

An earlier and quite distinct form of review for discrimination relates exclusively to delegated legislation. It is sometimes referred to as “administrative law discrimination” and is based on an interpretive presumption that requires clear authority for discriminatory delegated legislation. Although this form of review has been overshadowed in Canada by the constitutional and quasi- constitutional provisions just mentioned, it is still viable and, outside Canada, it is the principal basis on which executive legislation is reviewed for discrimination.

The notion of equality is bound up in the rule of law. Although Dicey’s formulation of equality in this context is now outdated, it helps explain the differences between administrative law discrimination and human rights discrimination. For Dicey, discrimination had to do with the administration of the law, as opposed to the law itself. If one views executive legislation as a form of administration of law, then discrimination exists to the extent that it is not contemplated by the “law” that authorizes it.

…

Administrative law discrimination is a far less sophisticated notion. It arises when legislation expressly distinguishes among the persons to whom it applies. These distinctions do not necessarily depend on the immutable or integral characteristics required for Charter discrimination. Discrimination may arise on the basis of other distinctions if their effects are unequal as between persons who are similarly situated. Finally, it is often found to arise regardless of the rationality of the distinctions. Administrative law discrimination provides a basis for invalidating delegated legislation unless discrimination is authorized by the enabling legislation.

Counsel submits that he can attack subordinate legislation on the basis of discrimination if the enabling legislation does not endow the delegated power with the authority to make the distinction between two types of vessels. The landmark decision in administrative law discrimination cases is Montréal (City of) v. Arcade Amusements Inc. et al.,[11] wherein the Supreme Court of Canada considered a by-law passed by the city of Montréal for the purpose of restricting entry into amusement arcades to persons under the age of 18. The Supreme Court struck in part the impugned subordinate legislation on the basis that it was discriminatory and there was no specific authority within the enabling statute to make the distinction that the by-law attempted to make. Beetz J. (at page 406) wrote as follows:

Contemporary academic opinion in Quebec, inter alia, recognizes the rule stated by Lord Russell of Killowen in Kruse v. Johnson, supra. Thus, Louis-Philippe Pigeon wrote in Rédaction et interprétation des lois, 1978, at p. 34:

[translation] Another important observation has to be made regarding the regulatory power. It is the following: the power to make regulations does not include a power to adopt discriminatory provisions. In other words, unless the legislation authorizing it states the contrary a regulation must apply to everyone in the same way. If the intent is to make a distinction, this must be stated. One of the interesting decisions on this point is Rex v. Paulowich, [1940] 1 W.W.R. 537; and there are many others.

Similarly, in their Traité de droit administratif, t. I, 1984, p. 558, René Dussault and Louis Borgeat observed:

[translation] This rule clearly has the corollary that any discriminatory regulation not authorized by legislation is illegal.

Consequently, counsel submits that the cruise vessel passenger fee is clearly discriminatory. Further, there is no legislative authority in the empowering Act for the Governor in Council to create such a distinction.

4- The proper exercise of discretion

Plaintiff’s counsel readily admits that the new cruise vessel passenger charge is a mechanism to raise revenue for the federal government but submits that this objective is specifically set out in section 3 of the enabling statute. Section 3 declares that the objective of the national ports policy is to create a system of public harbours for the achievement of national as well as regional, local, economic and social objectives. The defendant may argue that he has been inequitably treated and in that he has faced discrimination, but equity does not imply that all people are treated exactly the same way. Different persons who are differently situated may be treated differently. This defendant and the ferry operators are not similarly situated and they are not identical parties.

Section 12, the regulation-making section of the Act, stipulates that the Governor in Council may make regulations for the management, control, development and use of any port facility. These are very broad powers. More precisely, paragraph 12(1)(i) authorizes the Governor in Council to impose and collect rates or tolls on vessels using any port facility. Paragraph 12(1)(j) empowers the Governor in Council to prescribe the fee or charge for the use of any of these facilities. If, in the Governor in Council’s opinion, day-cruise operators should not be subjected to these fees, that is a valid exercise of his discretion. The language of the opening subsection 12(1) is broad and wide enough to authorize the creation of a class by way of a definition and such definitions are an essential part of regulations. It must also be borne in mind that it is not the passengers but the owners of the vessels that are required to pay the fees.

5- Analysis

In my view, the Governor in Council properly exercised his discretion. The new Regulations were duly legislated pursuant to the enabling statute and I cannot find that they are ultra vires on any of the grounds submitted by the defendant. While I am in full agreement with the able presentation of the basic principles of administrative law made by counsel for the defendant, I beg to differ with his application of these principles to the facts of the instant case. Section 12 of the Act affords the Minister sufficient discretion to bring in the new Regulations imposing new fees on cruise vessels. First, a brief review of the jurisprudence in the matter of the exercise of discretionary powers.

In Roncarelli v. Duplessis,[12] the Supreme Court of Canada provided a basic definition of the proper exercise of discretion, as follows (at page 140):

In public regulation of this sort there is no such thing as absolute and untrammelled “discretion”, that is that action can be taken on any ground or for any reason that can be suggested to the mind of the administrator; no legislative Act can, without express language, be taken to contemplate an unlimited arbitrary power exercisable for any purpose, however capricious or irrelevant, regardless of the nature or purpose of the statute. Fraud and corruption in the Commission may not be mentioned in such statutes but they are always implied as exceptions. “Discretion” necessarily implies good faith in discharging public duty; there is always a perspective within which a statute is intended to operate; and any clear departure from its lines or objects is just as objectionable as fraud or corruption. Could an applicant be refused a permit because he had been born in another province, or because of the colour of his hair? The ordinary language of the legislature cannot be so distorted.

In Padfield v. Minister of Agriculture, Fisheries and Food,[13] the House of Lords in 1968 further examined the exercise of a discretion granted to a government Minister as follows (at page 1030):

It is implicit in the argument for the Minister that there are only two possible interpretations of this provision” either he must refer every complaint or he has an unfettered discretion to refuse to refer in any case. I do not think that is right. Parliament must have conferred the discretion with the intention that it should be used to promote the policy and objects of the Act; the policy and objects of the Act must be determined by construing the Act as a whole and construction is always a matter of law for the court. In a matter of this kind it is not possible to draw a hard and fast line, but if the Minister, by reason of his having misconstrued the Act or for any other reason, so uses his discretion as to thwart or run counter to the policy and objects of the Act, then our law would be very defective if persons aggrieved were not entitled to the protection of the court. So it is necessary first to construe the Act.

In 1983, the Supreme Court of Canada in Thorne’s Hardware Ltd. et al. v. The Queen et al.[14] had to deal with the question whether a federal order in council expanding the boundaries of St. John’s Harbour to include private property was ultra vires. The Court said that although an order in council made pursuant to a statutory power is subject to judicial review, it is not the function of the Court to investigate the motives which impelled the federal Cabinet to enact it. Moreover, where the evidence shows that it was not passed in bad faith (in the instant case bad faith is not alleged by the defendant) but for valid economic policy and political reasons it should not be struck down. Dickson J. (as he then was) said as follows (at page 117):

The appellants acknowledge that s. 7 does give the federal Cabinet jurisdiction to expand the harbour limits. They say, however, that this can only be done with an eye to the “administration, management and control” of the harbour and that the section does not authorize expansion for the purpose of increasing the Board’s revenues.

I have already pointed out that the port was not expanded only for the purpose of increasing revenues, and that “rationalization” of maritime activity in the area was also an important factor. It seems to me that “rationalization” in the sense indicated above easily falls within the scope of the powers conferred by s. 7(2).

In the Thorne’s Hardware case, supra, the appellant also argued that the order in council only provided for the imposition and collection of “tolls” whereas in fact “taxes” were imposed. Dickson J. succinctly disposed of that argument as follows (at page 123):

To show that the Board’s fees were ultra vires as “taxes” it would at least be necessary to show that the Board’s revenues were significantly greater than the cost of providing harbour facilities and services to the public and no such showing was attempted here.

In the instant case, there was no attempt to show that the fees raised were significantly greater than the costs of providing the facilities in question.

Finally, in Haig v. Canada; Haig v. Canada (Chief Electoral Officer),[15]¹⁵ the Supreme Court of Canada was asked to rule on the validity of an order in council made pursuant to the Referendum Act [S.C. 1992, c. 30] (Canada). The Court held that both the decision to hold a referendum and the decision as to the number of provinces in which a referendum will be held are policy decisions left entirely to governments and legislatures as they involve matters of political consideration. Madam Justice L’Heureux-Dubé amplified as follows (at pages 1046-1047):

… the Governor in Council is not required to justify the reasons for any particular exercise of his discretion. As Dickson J. said in Thorne’s Hardware Ltd. v. The Queen, [1983] 1 S.C.R. 106, at pp. 112-113:

Governments do not publish reasons for their decisions; governments may be moved by any number of political, economic, social or partisan considerations.

…

The motives which might have guided the decision of the Governor in Council to hold a referendum are not here in dispute, and it is not the task of courts to second-guess the legislature on its political judgment.

Summing up, the objective of the national ports policy for Canada is to create a system of public harbours that is efficient for the achievement of national, regional and local economic and social objectives, and provides accessibility and equitable treatment in the movement of goods and persons. The very broad description of “vessel” under section 2 of the Act includes every description of ships. Section 12 empowers the Governor in Council to make regulations for the management, control, development and use of public harbour facilities including the imposition of rates, tolls, fees or charges for vessels and persons using the facilities. There are many types of vessels using such facilities and understandably such fees may vary according to the vessels involved.

Clearly, the definition of “vessel” is within the discretion of the Minister who under section 4 of the Act is charged with the responsibility of achieving the objective of the national ports policy. If the purpose of the exercise is to raise revenues and reduce the deficit, that twofold purpose is not only a laudable purpose but a valid and authorized purpose under section 3 of the Act so as to provide efficient service under the national ports policy.

Neither can it be said that the new Regulations are discriminatory. As written by the author John Mark Keyes in his book Executive Legislation: Delegated Law Making by the Executive Branch, quoted earlier (at page 226) “[d]iscrimination may arise on the basis of other distinctions if their effects are unequal as between persons who are similarly situated". There is no evidence that the passenger fees are not imposed on all cruise vessels. The only evidence is that they are not imposed (in accordance with the new Regulations) on the local ferry, the Island Queen, which, obviously, is not the same type of vessel and does not provide the same type of service and is therefore not similarly situated.

Consequently, I find that the Regulations in question are not ultra vires the enabling statute and that the plaintiff is entitled to the passenger cruise vessel charges in issue in this action for the years 1988-1995 inclusive (the amount for 1995 has now been determined to be $8,300.85 and paid into Court). Thus, the plaintiff is entitled to the sum of $60,937.12, pre-judgment interests on that amount, post-judgment interests and costs.

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