A-257-89
Ferguson Bus Lines Ltd. (Applicant)
v.
Amalgamated Transit Union, Local 1374
(Respondent)
A-255-89
Greyhound Lines of Canada Ltd. (Applicant)
v.
Canada Labour Relations Board, Amalgamated
Transit Union, Local 1374, Ferguson Bus Lines
Ltd. and Alberta Motor Transport Board
(Respondents)
INDEXED AS: FERGUSON Bus LINES LTD. v. AMALGAMATED
TRANSIT UNION, LOCAL 1374 (C.A.)
Court of Appeal, Urie, Mahoney and Desjardins
JJ.A.—Calgary, March 7; Ottawa, March 26,
1990.
Labour relations — Interprovincial bus company contracting
out two routes within Alberta to local carrier — Local opera
tor non-unionized — Whether bound by collective agreement
between union and interprovincial carrier — Whether arrange
ment constituting sale of part of business — No single man
agement or physical connection — Canada Labour Relations
Board lacking jurisdiction.
Constitutional law — Distribution of powers — Labour
relations — No federal authority over labour relations unless
integral to competence over federal subject — Interprovincial
bus company contracting out two routes within province to
local carrier — Operations of local carrier continuing under
provincial jurisdiction.
Judicial review — Applications to review — Canada Labour
Relations Board improperly seeking to be heard when juris
diction not at issue and matter not one where Board's expertise
helpful to Court — Board having no right to be heard on
constitutional issue — Attorney General, not Board, having
duty to represent public interest.
In 1988, Greyhound decided that it was no longer economical
for it to operate a bus service on two routes in Alberta. The
Alberta Motor Transport Board indicated that it would allow
Greyhound to discontinue them if another carrier would pro
vide service. The applicant, Ferguson, a non-unionized local bus
company, obtained a special permit from the Alberta Motor
Transport Board and Greyhound contracted out the two routes
to Ferguson which had to operate them under Greyhound's
name and according to its standard of operation. As equipment
to service these routes, Greyhound sold Ferguson two motor
coaches from a group of vehicles that it_wanted to get rid of.
The union applied to the Canada Labour Relations Board for
a determination that there had been a sale of part of Grey
hound's business to Ferguson and a declaration that the collec
tive agreement between the union and Greyhound was binding
on Ferguson.
The Board found that Ferguson came under federal jurisdic
tion on the basis that it was operationally part of a single
undertaking in the constitutional sense, the two routes remain
ing a part of Greyhound's core federal undertaking. The Board
found that the contract constituted a sale of a business and
that, for the purposes of these routes, Ferguson was bound by
the collective agreement.
Two issues were before the Court on these section 28 applica
tions: (1) Did Ferguson's activities carried out in Greyhound's
name come under Federal jurisdiction? (2) Had there been the
sale of a business within the meaning of the Act?
Held, Ferguson's application should be allowed; that of
Greyhound dismissed.
Per Desjardins J.A. (Urie J.A. concurring):
(1) Parliament has no authority over labour relations unless
jurisdiction is an integral part of its primary competence over
some other single federal subject. Ferguson's undertaking was,
local: moving people, luggage and parcels within Alberta. The
work of Ferguson employees remains intraprovincial. Ferguson
does not provide an interprovincial service. The agreement
between Greyhound and Ferguson did not amount of a single
management and there was no physical connection such as
existed in cases of this kind involving railways. In accepting
Greyhound's former routes, the operation of Ferguson as a
going concern did not change. Nor could it be said that
Ferguson was operating two distinct undertakings: an intrapro-
vincial school bus and coach business and an interprovincial
service for Greyhound.
(2) This question did not require consideration in view of the
answer to the first one.
Greyhound's application had to be quashed as it was not a
party "directly affected" within the meaning of Federal Court
Act, subsection 28(2).
Per Mahoney J.A.: The Canada Labour Relations Board is
unique among federal administrative tribunals in being oblivi
ous to the impropriety of seeking to be heard when its jurisdic
tion is not at issue. The Board should accept with grace the
Court's unwillingness to entertain its submissions and realize
that its decisions will be adequately defended by those having
an economic interest in so doing. It is only in cases where its
particular expertise is required that participation—so potential
ly damaging to it—should be countenanced. The Board is
unable to assist the Court in deciding whether a business has
been sold. Nor has the Board a right to be heard on a
constitutional issue such as the legislative jurisdiction of Parlia-
ment. Should the public interest need representation, that is the
duty of the Attorney General.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Canada Labour Code, R.S.C., 1985, c. L-2, ss. 4, 22, 44,
46.
Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.) (as
am. by Canada Act, 1982, 1982, c. 11 (U.K.),
Schedule to the Constitution Act, 1982, Item 1)
[R.S.C., 1985, Appendix II, No. 5], s. 92(10)(a).
Federal Court Act, R.S.C., 1985, c. F-7, s. 28.
Motor Transport Act, R.S.A. 1980, c. M-20, s. 20.
CASES JUDICIALLY CONSIDERED
APPLIED:
CAIMAW v. Paccar of Canada Ltd., [1989] 2 S.C.R.
983; (1989), 62 D.L.R. (4th) 437; [1989] 6 W.W.R. 673;
102 N.R. 1; Northwestern Utilities Ltd. et al. v. City of
Edmonton, [1979] 1 S.C.R. 684; (1978), 12 A.R. 449; 89
D.L.R. (3d) 161; 7 Alta. L.R. (2d) 370; 23 N.R. 565;
B.C.G.E.U. v. Indust. Rel. Council (1978), 26 B.C.L.R.
(2d) 145 (C.A.); Construction Montcalm Inc. v. Mini
mum Wage Commission, [1979] 1 S.C.R. 754; (1978),
93 D.L.R. (3d) 641; 79 C.L.L.C. 14,190; 25 N.R. l;
Northern Telecom Ltd. v. Communications Workers of
Canada, [1980] 1 S.C.R. 115; (1979), 79 C.L.L.C.
14,211; 28 N.R. 107; Alberta Government Telephones v.
Canada (Canadian Radio-television and Telecommuni
cations Commission), [1989] 2 S.C.R. 225; [1989] 5
W.W.R. 385; 26 C.P.R. (3d) 289; 98 N.R. 161; Canadi-
an Air Line Employees' Association v. Wardair Canada
(1975) Ltd., [1979] 2 F.C. 91; (1979), 25 N.R. 613.
DISTINGUISHED:
General Teamsters, Local 362 and Byers Transport Lim
ited et al. (1986), 65 di 127; 12 CLRBR (NS) 236
(C.L.R.B. 571); The Queen in the Right of the Province
of Ontario v. Board of Transport Commissioners, [1968]
S.C.R. 118; (1967), 65 D.L.R. (2d) 425; Luscar Collier
ies Ltd. v. McDonald, [1925] S.C.R. 460; Northern
Telecom Canada Ltd. et al. v. Communication Workers
of Canada et al., [1983] 1 S.C.R. 733; (1983), 147
D.L.R. (3d) l; 48 N.R. 161.
CONSIDERED:
Bernshine Mobile Maintenance Ltd. v. Canada Labour
Relations Board, [1986] 1 F.C. 422; (1985), 22 D.L.R.
(4th) 748; 85 C.L.L.C. 14,060; 62 N.R. 209 (C.A.);
Montreal City v. Montreal Street Railway Company,
[1912] A.C. 333 (P.C.).
REFERRED TO:
Highway Truck Service Ltd. v. Canada Labour Relations
Board (1985), 62 N.R. 218 (F.C.A.); Capital Cities
Communications Inc. et al. v. Canadian Radio-Televi
sion Commn., [1978] 2 S.C.R. 141; (1977), 81 D.L.R.
(3d) 609; 36 C.P.R. (2d) 1; 18 N.R. 181; Canadian
Pacific Railway Company v. Attorney-General for Brit-
ish Columbia and Attorney-General for Canada, [1950]
A.C. 122 (P.C.); Canada (Canada Post Corp.) v.
C.U.P.W., A-762-87, Pratte J.A., judgment dated
28/1/88, F.C.A., not reported.
COUNSEL:
William J. Armstrong for applicant.
W. J. Johnson for respondent.
David J. Corry for Greyhound Lines.
Graham Clarke for Canada Labour Relations
Board.
SOLICITORS:
Laird, Armstrong, Calgary, for applicant.
McGown, Johnson, Calgary, for respondent.
Fenerty, Robertson, Fraser & Hatch, Cal-
gary, for Greyhound Lines.
Legal Services, Canada Labour Relations
Board, Ottawa, for Canada Labour Relations
Board.
The following are the reasons for judgment
rendered in English by
MAHONEY J.A.: I have had the advantage of
reading in draft the reasons for judgment proposed
by Madame Justice Desjardins and am in entire
agreement with them and the dispositions of these
applications she proposes. I wish only to add a few
words of my own, as I promised its counsel, with
respect to the unaccountable persistence of the
Canada Labour Relations Board in seeking to be
heard by this Court when its jurisdiction is in no
way in issue and when there are no "considera-
tions, rooted in [its] specialized jurisdiction or
expertise .. . which may render reasonable what
would otherwise appear unreasonable to someone
not versed in the intricacies of the specialized
area", vid. CAIMAW v. Paccar of Canada Ltd.'
' [1989] 2 S.C.R. 983, at p. 1016.
This Board seems oblivious to the impropriety of
such a course of conduct. In my experience, it is
unique in that respect among the countless federal
administrative tribunals. While some others may
occasionally seek to be heard when they have no
business doing so, none press for the right with
such monotonous regularity and most accept with
grace the rationality of our unwillingness to hear
them. Not so this Board. Even a tribunal such as
the National Transportation Agency, which has a
statutory right to be heard, 2 has to date claimed
that right with becoming restraint. One might
think that, armed with its privative clause, 3 the
Canada Labour Relations Board would be more,
rather than less, confident than other tribunals
that the correctness of its decisions could be ade
quately defended by parties with an interest, usu
ally economic, in doing so.
The fundamental basis for holding the Board's
conduct objectionable was succinctly stated in
Northwestern Utilities Ltd. et al. v. City of
Edmonton. It is that:
Such active and even aggressive participation can have no other
effect than to discredit the impartiality of an administrative
tribunal either in the case where the matter is referred back to
it, or in future proceedings involving similar interests and issues
or the same parties. 4
The decision of the Supreme Court of Canada in
Paccar does not, in my opinion, vest the Board
with a respectable excuse to demand to be heard in
every case where one of its decisions is alleged to
be patently unreasonable. As stated in Paccar, it is
only when its expertise may cast some light imper
ceptible to ordinary mortals on the subject that
participation so potentially damaging to it should
be countenanced. It is to that limited extent that
Paccar has qualified the criteria authoritatively
established by Northwestern Utilities. Further
more, the presence of such an issue does not open
the door to the Board addressing other issues any
more than does a genuine challenge to its
jurisdiction.
2 National Transportation Act, 1987, R.S.C., 1985 (3rd
Supp.), c. 28, s. 65(4).
3 Canada Labour Code, R.S.C., 1985, c. L-2, s. 22.
4 [1979] 1 S.C.R. 684, at p. 709.
Nothing in the record or argument leads me to
suspect that the expertise of the Canada Labour
Relations Board endows it with anything of par
ticular value when it comes to deciding whether or
not the sale of a business has occurred. It is not
without significance that, when invited to make
representations on that issue since it was cast in
terms of patent unreasonableness, the Board had
nothing to say.
Finally, and it should have been unnecessary to
say it but for the Board's argument, a challenge to
the legislative jurisdiction of Parliament is not a
challenge to the Board's jurisdiction within the
contemplation of Northwestern Utilities. The
Board had no right to be heard on the constitution
al issue. Should the public interest require
representation in such a case, it is the right and
responsibility of the Attorney General, not the
Board, to provide it.
URIE J.A.: I agree.
* * *
The following are the reasons for judgment
rendered in English by
DESJARDINS J.A.: This Court is seized with two
applications pursuant to section 28 of the Federal
Court Act, R.S.C. 1985, c. F-7, one between Fer-
guson Bus Lines Ltd. v. Amalgamated Transit
Union, Local 1374, A-257-89 and another between
Greyhound Lines of Canada Ltd. v. Canada
Labour Relations Board, Amalgamated Transit
Union, Local 1374, Ferguson Bus Lines Ltd., and
Alberta Motor Transport Board, A-255-89. Both
were heard together. These applications deal with
a decision of the Canada Labour Relations Board
(the "Board") which concluded that the labour
relations of a portion of the operations of Ferguson
Bus Lines Ltd. ("Ferguson") were federal on
account of an agreement made by Ferguson with
Greyhound Lines Canada Ltd. ("Greyhound") as
imposed by the Alberta Motor Transport Board.
Greyhound decided in late 1988 it was no longer
economical to service and use its own equipment
and chauffeurs on two routes connecting Calgary
(Alberta) to Oyen (Alberta) and return, and Red
Deer (Alberta) to Consort (Alberta) and return.
The Alberta Motor Transport Board, acting under
the authority of the Motor Transport Act,'
refused to cancel Greyhound's permit but indicat
ed it would allow Greyhound to discontinue the
service as long as some other transportation com
pany took over under Greyhound's name and
standard of operation.
Ferguson purchased from Greyhound two 1975
M.C.I. Model MC-8 motor coaches for the sched
uled trips. These buses were part of a group of
twenty-two vehicles Greyhound had decided to
sell. 6 At the relevant time, Ferguson owned one
hundred and four buses. Ninety-seven were of the
school bus type. Seven were highway coaches.' It
employed approximately eighty individuals, all
non-unionized. Ferguson assigned two of its drivers
to the new routes, with a third as a spare driver.
While Greyhound's permit was maintained,' the
Alberta Motor Transport Board, on December 1,
1988, approved the issuance of a section 20 special
permit 9 to Ferguson on the following conditions:
ALBERTA
MOTOR TRANSPORT BOARD
OPERATING AUTHORITY CERTIFICATE
SECTION 20
SECTION 20
To allow vehicles registered in the name of Ferguson Bus Lines
Ltd. to operate in accordance with Section 19 and Section 26 of
the Intra-Provincial Public Bus Route Certificate 00-0360412
issued to Greyhound Lines of Canada Ltd.
5 R.S.A. 1980, c. M-20.
6 A.B., at p. 54.
' A.B., at p. 20.
8 A.B., at pp. 73-74-75.
' Section 20 of the Motor Transport Act, R.S.A. 1980,
c. M-20 reads:
20. The Board may issue a special permit authorizing the
operation of a public vehicle in any instance where the
operation of a public vehicle is otherwise prohibited under
this Act or any order under this Act, and may specify
(a) the duration of the special permit, and
(b) the conditions to which the special permit is subject.
CONDITIONS:
A copy of the Greyhound Lines of Canada Ltd. Public Bus
Route Certificate to this permit to be carried in the vehicles.
This permit is valid only so long as Greyhound Lines of Canada
Ltd. and Ferguson Bus Lines Ltd. retain their contractual
agreement. [A.B., at pp. 77 and 82.]
According to the services agreement contracted
between Greyhound and Ferguson, dated January
1, 1989, and referred to in the special permit,
Ferguson undertakes to operate the routes in ques
tion for and on behalf of Greyhound which retains
its services (section 2.00). Greyhound sets the
schedules and tariffs (section 3.00). Pick-ups and
departures are from locations specified by Grey
hound and are carried out to meet connecting
Greyhound bus services (section 3.02). The driv
ers, supplied by Ferguson, are required to meet
governmental and Greyhound safety standards.
Greyhound retains the right to instruct the drivers
accordingly and may cause Ferguson to remove
and replace any delinquent driver (section 5.00).
Greyhound is entitled to examine the coaches for
the purpose of insuring the security of the passen
gers, luggage and parcels (section 6.07). The ad
vertising for the service is done by Ferguson at the
expense and with the approval of Greyhound.
Greyhound is given the right to affix signs and
removable decals on the motor coaches (section
7.00). Greyhound provides all necessary pick-ups
and destination facilities, terminal agents, bus
tickets, bus bills, express receipts, drivers' reports,
printed schedules and tariffs and other Greyhound
documents (section 9.01). Ferguson carries insur
ance while Greyhound is named an insured to the
limit of its interest (section 11.02). Termination of
the agreement may be effected by mutual agree
ment or through a breach of contract, from negli
gence in the performance of the agreement or
following a bankruptcy (section 13.00). Ferguson
is not permitted, without Greyhound's consent, to
apply directly to the Alberta Motor Transport
Board for authorization to provide further services
on the two routes or to compete with Greyhound
for a period of two years following the termination
of the agreement (section 17.00).
Greyhound ceased to operate its motor coaches
effective January 16, 1989. Ferguson started the
service the same day. '° The routes represent 10 to
15% of Ferguson's gross revenues. "
The respondent's union applied to the Canada
Labour Relations Board' 2 under section 44 of the
Canada Labour Code 13 for a determination that
there had been a sale of a part of Greyhound's
business to Ferguson and a declaration that the
collective agreement between Amalgamated
Transit Union, Local 1374, and Greyhound was
binding on Ferguson.
The Board held that Ferguson came under fed
eral jurisdiction and that a sale, as defined in the
Act, had occurred between Greyhound and Fergu-
son. On the first issue, the Board referred to the
principles it had set in its earlier decision of Gen
eral Teamsters, Local 362 and Byers Transport
10 A.B., at p. 54
" A.B., at p. 55.
12 A.B., at p. 55.
13 R.S.C., 1985, c. L-2.
44. (1) In this section and sections 45 and 46,
"business" means any federal work, undertaking or business
and any part thereof;
"sell", in relation to a business, includes the lease, transfer
and other disposition of the business.
(2) Subject to subsections 45(1) to (3), where an employer
sells his business,
(a) a trade union that is the bargaining agent for the
employees employed in the business continues to be their
bargaining agent;
(b) a trade union that made application for certification in
respect of any employees employed in the business before
the date on which the business is sold may, subject to this
Part, be certified by the Board as their bargaining agent;
(c) the person to whom the business is sold is bound by
any collective agreement that is, on the date on which the
business is sold, applicable to the employees employed in
the business; and
(d) the person to whom the business is sold becomes a
party to any proceeding taken under this Part that is
pending on the date on which the business was sold and
that affects the employees employed in the business or
their bargaining agent.
Section 46 of the Code provides:
46. Where any quesion arises under section 44 or 45 as to
whether or not a business has been sold or as to the identity
of the purchaser of a business, the Board shall determine the
question.
Limited et a1., 14 distinguished it on the facts, and
said: 15
In essence, one does not consider whether Ferguson is "neces-
sarily incidental" etc. to Greyhound's core federal undertaking
(the traditional test for local undertakings that provide a
service to the core federal undertaking). Rather, one must
consider if Ferguson is operationally part of a single undertak
ing in the constitutional sense. Ferguson is not by itself federal;
but it is part of Greyhound's undertaking. The provisions of the
Agreement already cited demonstrate to what extent the two
routes now run by Ferguson are still part of the core federal
undertaking. [Emphasis added.]
On the second issue, the sale of business, the
Board reasoned that "a part of a business was
transferred and Ferguson stepped into the shoes of
Greyhound for the purposes of the two routes". 16
The following order was issued:"
NOW, THEREFORE, it is hereby declared by the Canada Labour
Relations Board that the agreement entered into between Grey
hound Lines of Canada Ltd. and Ferguson Bus Lines Ltd.
referred to above constitutes a sale of business within the
meaning of the Code and that Ferguson Bus Lines Ltd. is
bound by the collective agreement in effect between Greyhound
Lines of Canada Ltd. and Amalgamated Transit Union, Local
1374, for the purposes of the operation of these two routes.
Counsel for the applicants and for the union
were heard although some doubt was expressed as
to the interest of Greyhound in bringing its own
section 28 application since it is not named in the
order, in contrast with requesting leave to inter
vene in Ferguson's section 28 application. The
Board was, for its part, directed to limit its obser
vations within the terms set by the Supreme Court
of Canada in a long series of cases, the latest being
CAIMAW v. Paccar of Canada Ltd. 18 There, La
Forest J., for the majority, stated the limited role
of a board before a court of law in the following
way:"
14 (1986), 65 di 127 and 12 CLRBR (NS) 236 (CLRB 571).
15 A.B., at p. 167.
16 A.B., at p. 169.
17 A.B., at p. 171.
18 [1989] 2 S.C.R. 983.
14 At p. 1014.
... the Industrial Relations Council has standing before this
Court to make submissions not only explaining the record
before the Court, but also to show that it had jurisdiction to
embark upon the inquiry and that it has not lost that jurisdic
tion through a patently unreasonable interpretation of its
powers.
La Forest J. cited an earlier case Northwestern
Utilities Ltd. et al. v. City of Edmonton, 20 where
Estey J., for a unanimous court, said at pages
708-709:
The Board has a limited status before the Court, and may not
be considered as a party, in the full sense of that term, to an
appeal from its own decisions. In my view, this limitation is
entirely proper. This limitation was no doubt consciously
imposed by the Legislature in order to avoid placing an unfair
burden on an appellant who, in the nature of things, must on
another day and in another cause again submit itself to the rate
fixing activities of the Board. It also recognizes the universal
human frailties which are revealed when persons or organiza
tions are placed in such adversarial positions.
La Forest J. then continued: 21
In that case, the Board has presented "detailed and elaborate
arguments" in support of the merits of its decision. Estey J., at
p. 709, commented:
Such active and even aggressive participation can have no
other effect than to discredit the impartiality of an adminis
trative tribunal either in the case where the matter is referred
back to it, or in future proceedings involving similar interests
and issues or the same parties. The Board is given a clear
opportunity to make its point in its reasons for its decision,
and it abuses one's notion of propriety to countenance its
participation as a full-fledged litigant in this Court, in com
plete adversarial confrontation with one of the principals in
the contest before the Board itself in the first instance."
In these circumstances, the tribunal is limited to an explanatory
role and "to the issue of its jurisdiction to make the order in
question".
Estey J., then, however, limited the meaning of jurisdiction
so as not to "include the transgression of the authority of a
tribunal by its failure to adhere to the rules of natural justice".
He continued (p. 710):
In such an issue, when it is joined by a party to proceedings
before that tribunal in a review process, it is the tribunal
which finds itself under examination. To allow an adminis
trative board the opportunity to justify its action and indeed
to vindicate itself would produce a spectacle not ordinarily
contemplated in our judicial traditions.
20 [1979] 1 S.C.R. 684.
21 At p. 1015.
La Forest J. cited with approval Taggart J.A. in
B.C.G.E.U. v. Indust. Rel. Council [(1988), 26
B.C.L.R. (2d) 145 (C.A.), at page 1531: 22
The traditional basis for holding that a tribunal should not
appear to defend the correctness of its decision has been the
feeling that it is unseemly and inappropriate for it to put itself
in that position. But when the issue becomes, as it does in
relation to the patently unreasonable test, whether the decision
was reasonable, there is a powerful policy reason in favour of
permitting the tribunal to make submissions. That is, the
tribunal is in the best position to draw the attention of the court
to those considerations, rooted in the specialized jurisdiction or
expertise of the tribunal, which may render reasonable what
would otherwise appear unreasonable to someone not versed in
the intricacies of the specialized area. In some cases, the parties
to the dispute may not adequately place those considerations
before the court, either because the parties do not perceive
them or do not regard it as being in their interest to stress
them.
None of the parties contested the jurisdiction of
the Board to decide the issue as to whether the
activities of Ferguson came under federal or pro
vincial jurisdiction. 23 The Board was not heard on
the merits of the constitutional issue since it had
ample opportunity to express itself in its decision.
It was only heard as to whether it had lost jurisdic
tion through a patently unreasonable interpreta
tion of its powers.
The Alberta Motor Transport Board was not
represented.
The issues before us are those that were before the
Canada Labour Relations Board, namely:
(a) whether the activities of Ferguson carried in
the name of Greyhound come under federal
jurisdiction;
(b) whether a sale of business within the mean
ing of the Act has taken place as between
Greyhound and Ferguson.
22 Supra, at p. 1016.
23 Canada Labour Code, R.S.C., 1985, c. L-2, ss. 4, 44, 46.
a) Whether the activities of Ferguson carried in
the name of Greyhound come under federal
jurisdiction:
The starting point in the search for constitution
al jurisdiction over a labour relations matter is the
decision of the Supreme Court of Canada in Con
struction Montcalm Inc. v. Minimum Wage
Commission 24 where Beetz J. for the majority sets
the principles to be followed:
The issue must be resolved in the light of established princi
ples the first of which is that Parliament has no authority over
labour relations as such nor over the terms of a contract of
employment; exclusive provincial competence is the rule:
Toronto Electric Commissioners v. Snider, ([1925] A.C. 396).
By way of exception however, Parliament may assert exclusive
jurisdiction over these matters if it is shown that such jurisdic
tion is an integral part of its primary competence over some
other single federal subject: In re the validity of the Industrial
Relations and Disputes Investigation Act ([1955] S.C.R. 529)
(the Stevedoring case). It follows that primary federal compe
tence over a given subject can prevent the application of
provincial law relating to labour relations and the conditions of
employment but only if it is demonstrated that federal author
ity over these matters is an integral element of such federal
competence; thus, the regulation of wages to be paid by an
undertaking, service or business, and the regulation of its
labour relations, being related to an integral part of the opera
tion of the undertaking, service or business, are removed from
provincial jurisdiction and immune from the effect of provincial
law if the undertaking, service or business is a federal one; In re
the application of the Minimum Wage Act of Saskatchewan to
an employee of a Revenue Post Office ([1948] S.C.R. 248),
(the Revenue Post Office case); Quebec Minimum Wage Com
mission v. Bell Telephone Company of Canada ([1966] S.C.R.
767) (the Bell Telephone Minimum Wage case); Letter Carri
ers' Union of Canada v. Canadian Union of Postal Workers
([1975] 1 S.C.R. 178) (the Letter Carriers' case). The question
whether an undertaking, service or business is a federal one
depends on the nature of its operation: Pigeon J. in Canada
Labour Relations Board v. City of Yellowknife ([1977] 2
S.C.R. 729), at p. 736. But, in order to determine the nature of
the operation, one must look at the normal or habitual activities
of the business as those of "a going concern", (Martland J. in
the Bell Telephone Minimum Wage case at p. 772), without
regard for exceptional or casual factors; otherwise, the Consti
tution could not be applied with any degree of continuity and
regularity; Agence Maritime Inc. v. Canada Labour Relations
Board ([1969] S.C.R. 851) (the Agence Maritime case); the
Letter Carriers' case.
24 [1979] 1 S.C.R. 754, at pp. 768-769.
These principles enunciated by Beetz J. were
later summarized by Dickson C.J. in Northern
Telecom Ltd. v. Communications Workers of
Canada: 25
(1) Parliament has no authority over labour relations as such
nor over the terms of a contract of employment; exclusive
provincial competence is the rule.
(2) By way of exception, however, Parliament may assert
exclusive jurisdiction over these matters if it is shown that such
jurisdiction is an integral part of its primary competence over
some other single federal subject.
(3) Primary federal competence over a given subject can pre
vent the application of provincial law relating to labour rela
tions and the conditions of employment but only if it is demon
strated that federal authority over these matters is an integral
element of such federal competence.
(4) Thus, the regulation of wages to be paid by an undertak
ing, service or business, and the regulation of its labour rela
tions, being related to an integral part of the operation of the
undertaking, service or business, are removed from provincial
jurisdiction and immune from the effect of provincial law if the
undertaking, service or business is a federal one.
(5) The question whether an undertaking, service or business is
a federal one depends on the nature of its operation.
(6) In order to determine the nature of the operation, one must
look at the normal or habitual activities of the business as those
of "a going concern", without regard for exceptional or casual
factors; otherwise, the Constitution could not be applied with
any degree of continuity and regularity.
Ferguson's undertaking is primarily local. The
only issue is whether, by way of exception, that
portion of its undertaking, which is engaged in the
servicing of the two former Greyhound routes, is
federal. It is undisputed that Greyhound's activi
ties come under federal jurisdiction since it is an
undertaking "connecting the Province with any
other or others of the Provinces, or extending
beyond the Limits of the Province". 26
In endeavouring to apply the legal principles,
one is reminded that the facts are essential to a
proper characterization of the activities carried
out. The following remarks by Dickson C.J. for the
majority in Alberta Gorvernment Telephones v.
Canada (Canadian Radio-television and Tele-
25 [1980] 1 S.C.R. 115, at p. 132.
26 Paragraph 92(10)(a) of the Constitution Act, 1867, 30 &
31 Vict., c. 3 (U.K.) (as am. by Canada Act, 1982, 1982, c. 11
(U.K.), Schedule to the Constitution Act, 1982, Item 1)
[R.S.C., 1985, Appendix II, No. 5].
communications Commission) 27 are highly rele
vant:
It is impossible, in my view, to formulate in the abstract a
single comprehensive test which will be useful in all of the cases
involving s. 92(10)(a). The common theme in the cases is
simply that the court must be guided by the particular facts in
each situation, an approach mandated by this Court's decision
in Northern Telecom, 1980, supra. Useful analogies may be
found in the decided cases, but in each case the determination
of this constitutional issue will depend on the facts which must
be carefully reviewed as was done by the trial judge in the
present appeal.
The decision the Board referred to in its reasons,
and which was distinguished on the facts, is Gen
eral Teamsters, Local 362 and Byers Transport
Limited et al. 25 While different from the case at
bar, it has the advantage of representing one end
of the constitutional spectrum, that of provincial
jurisdiction. Byers was a commercial trucking
company carrying general freight within and be
tween the three most westerly provinces and the
Northwest Territories. It operated a terminal in
Lethbridge which involved trucking goods between
Calgary and Lethbridge as well as pick-up and
delivery and loading and unloading in Lethbridge.
It decided to close its Lethbridge terminal. Two
former Byers employees under the name of Stern
undertook the pick-up and delivery and loading
and unloading in Lethbridge. A local operator, R
& K Transportation Enterprises Ltd., did the
hauling between Lethbridge and Calgary. Byers
contributed only trailers to the new arrangement.
About 75% of Stern's business involved goods
coming from or destined for the Byers operation.
The other 25% involved dealings with R & K.
There was at the corporate level, no common
ownership, control or direction between the com
panies. In order to ensure that goods got from
their point of origin to their proper destination,
there were interlining arrangements among Stern,
R & K and Byers. Byers produced the bill of
lading as well as the pro-bill containing total
charges and, normally, the breakdown of the inter-
lining charges. It was industry practice that where
goods were routed through several companies, only
one bill of lading and one pro-bill was emitted. It
was also industry practice to have trailers of one
27 [1989] 2 S.C.R. 225, at p. 258.
28 (1986), 65 di 127; 12 CLRBR (NS) 236 (C.L.R.B. 571).
company used by another. Fees were distributed
according to a specific arrangement between Byers
and Stern. The billing arrangement between Byers
and Stern was done through R & K. The Board
concluded that there was coordination but no inte
gration between Byers and Stern. Coordination, it
decided, did not amount to integration: 29
Coordination among transport companies is not sufficient to
make them a single undertaking in the constitutional sense In
re Cannet Freight Cartage Limited, [1976] 1 F.C. 174 (C.A.);
Metrans (Western) Inc., supra. Although undertakings in the
constitutional sense need not coincide with corporate arrange
ments (Bernshine Mobile Maintenance Ltd. (1984), 56 di 83; 7
CLRBR (NS) 21; 84 CLLC 16,036 (CLRB no. 465), affirmed
by the Federal Court of Appeal, Bernshine Mobile Mainte
nance Ltd. v. Canada Labour Relations Board, [1986] 1 F.C.
422; (1985), 62 N.R. 209, and 85 CLLC 14,060), in the
present circumstances, corporate independence, has produced
operational independence and the latter is what is of real
constitutional significance.
We do not think anything in this case turns on the percentage
of the goods handled by Stern that have an ultimate extrapro-
vincial origin or destination. Rather, what is significant is that
Stern, or for that matter R & K, have nothing to do with those
goods crossing provincial borders. When one is identifying
constitutional undertakings in the transportation industry, one
examines the operations of the business, not the itinerary of the
persons or goods being transported (Winner et al.; supra;
Cannet Freight Cartage Limited, supra; Metrans (Western)
Inc., supra). If constitutional jurisdiction depended on the
itinerary of goods and persons, almost every local transporta
tion enterprise would be federal since they would be bound to
be some ultimate extraprovincial origins or destinations. We do
not look at the itinerary of the persons or goods because it is
not the constitutional basis of their regulation that is at issue—
rather it is the constitutional basis of the regulation of the
transportation undertaking that is in question.
This also explains why simple coordination among various
transportation undertakings does not transform them into a
single undertaking in the constitutional sense. The itineraries of
persons and goods are not planned according to the dictates of
business organization. To get persons and goods to their intend
ed destination, there must be coordination among various enter
29 Supra, at pp. 132-133.
prises, but that cannot make the transportation industry one
gigantic single constitutional undertaking. [Emphasis added.]
The cases of Bernshine Mobile Maintenance
Ltd. v. Canada Labour Relations Board, 30 North
ern Telecom Canada Ltd. et al. v. Communication
Workers of Canada et a1. 3 ' and Alberta Govern
ment Telephones v. Canada (Canadian Radio-
television and Telecommunications Commission) 32
stand on the other side of the spectrum, that of
integration with a federal undertaking. In Bern-
shine, the truck wash (including refrigeration com
partment) and the tire maintenance operation for
trucks that regularly crossed provincial borders
were held to come under federal jurisdiction,
because of an operational integration with the
trucking operation, despite the fact that the main
tenance work was carried on locally by an enter
prise separate from the core interprovincial under
taking. Bernshine (the truck wash and repair
operation) had one customer, Reimer. The work
done by Bernshine was critical to the successful
operation of Reimer. Without properly maintained
trucks, Reimer could not have operated its inter-
provincial undertaking. 33
In Northern Telecom Canada Ltd. et al. v.
Communication Workers of Canada et al., the
majority decided that the labour relations of the
installers at Telecom came under federal jurisdic
tion. Estey J. for the majority noted at pages
766-767 "[t]he almost complete integration of the
installers' daily work routines with the task of
establishing and operating the telecommunications
network" which, in his view, made "the installa
tion work an integral element in the federal
works". In arriving at the conclusion which he said
he had reached "with much hesitation and after
much consideration of the views advanced by
30 [1986] 1 F.C. 422 (C.A.).
31 [1983] 1 S.C.R. 733.
32 [1989] 2 S.C.R. 225.
33 See also Highway Truck Service Ltd. v. Canada Labour
Relations Board (1985), 62 N.R. 218 (F.C.A.).
others in support `of their conclusions" 34 he said at
page 768:
Several factors, however, seem to me to be overpowering. It
seems to me that the assignment of these labour relations to the
federal sphere reflects the nature of the work of the employees
in question, the relationship between their services and the
federal works, the geographic realities of the interprovincial
scope of the work of these employees transcending as they do
several provincial boundaries, and the close and complete inte
gration of the work of these employees and the daily expansion,
refurbishment and modernization of this extensive telecom
munication facility. [Emphasis added.]
In the Alberta Government Telephones case, the
Supreme Court of Canada found that Alberta
Government Telephones (AGT) was, through vari
ous commercial arrangements of a bilateral and
multilateral nature, organized in a manner which
enabled it to play a crucial role in the national
telecommunication system. It was "through the
organizational mechanisms", described in that
case, that AGT was able to provide to "its local
subscribers services of an interprovincial and inter
national nature". 35
What distinguished the case at bar from Byers,
from a factual point of view, are the section 20
permit issued to Ferguson and the services agree
ment between Ferguson and Greyhound. Do these
arrangements, which ensure a close liaison be
tween the two operations, change the character of
that portion of Ferguson's undertaking so as to
make it an integral part of Greyhound?
With reference to Estey J.'s considerations in
the Northern Telecom case, it appears that the
nature of Ferguson's work, before and after Janu-
ary 1, 1989, remains the same, i.e. the moving of
people, luggage and parcels between points within
Alberta. The geographic realities of the work of
the employees of Ferguson operating the routes in
question are still purely intraprovincial. The rela
tionship between Ferguson's services and Grey
hound's is more in the nature of one where Grey
hound had contracted out two routes to Ferguson
which must operate them under Greyhound's
name and standard of operation. The relationship
34 The jurisdictional dispute related to Northern Telecom's
employees had had a long history which is referred to at pp.
745-749 of the majority judgment.
35 Alberta Government Telephones, supra, at p. 262.
is comparable to what was said by Jackett C.J. in
Canadian Air Line Employees' Association v.
Wardair Canada (1975) Ltd., [1979] 2 F.C. 91, at
pages 96-97:
A particular activity may be reasonably incidental to the
operation of a federal work, undertaking or business without
being an essential component of such operation. For example,
an interprovincial railway may have its own laundry facilities
or its own arrangement for preparing food for passengers, or,
alternatively, it may send its dirty linen to an outside laundry or
buy prepared food. Generally speaking, where such an activity
is carried on by the operator of the federal work, undertaking
or business as an integral part thereof, it is indeed a part of the
operation of the federal work, undertaking or business. Where,
however, the operator of the federal work, undertaking or
business carries on the operation thereof by paying ordinary
local businessmen for performing such services or for supplying
such commodities, the business of the person performing the
service or preparing the commodities does not thereby
automatically become transformed into a business subject to
federal regulation ...
To sum up ... as I understand the law, where something is
done as an integral part of the operation of a federal work,
undertaking or business and that something is reasonably
incidental to such operation, it may be regulated by Parliament
as part of the regulation of that work, undertaking or business
even though it is not essential to the operation of such a work,
undertaking or business; but where such a thing is made the
subject of a separate local business or businesses, it cannot be
regulated by Parliament merely because, if it were done as an
integral part of operating a federal work, undertaking or busi
ness, it could, as such, be regulated by Parliament.
Ferguson is not in the business of providing an
interprovincial service to the public in the way
AGT made available interprovincial and interna
tional telephone communications. Not only did
AGT's physical telecommunication facilities con
nect at the border through the transmission and
reception of electronic signals at the border within
the meaning of the Capital Cities case, 36 but the
pervasive integration of AGT's telephone service
was such that the same telephone sets, lines,
exchanges and microwave networks were used for
the provision of local and interprovincial services
as well as international ones. 37 Dickson C.J.
agreed with Reed J. that AGT could not separate
itself from Telecom Canada without altering the
36 Capital Cities Communications Inc. et al. v. Canadian
Radio-Television Commn., [1978] 2 S.C.R. 141.
37 Alberta Government Telephones v. C.R.T.C., supra, at
p. 260.
fundamental nature of AGT's enterprise. 38 Here,
had the Alberta Motor Transport Board not inter
vened, Greyhound could have abandoned the line
to Ferguson. The fundamental nature of Fergu-
son's operation would not have been altered. It
would have remained a bus service entirely owned
and operated by Ferguson although offering coor
dinated services with a federal undertaking.
The arrangements between Ferguson and Grey
hound are substantially different from those
amounting to a single management as can be
found in The Queen in the Right of the Province
of Ontario v. Board of Transport
Commissioners, 39 (Go Train case) and in Luscar
Collieries Ltd. v. McDonald. 40 In the Go Train
case, the Canadian National Railway ("CN")
applied to the Board of Transport Commissioners
for authority to discontinue four passenger trains
operating between Toronto and Hamilton. The
Minister of Highways for Ontario decided to oper
ate a Commuter Service from Toronto westerly to
Hamilton and easterly to Pickering utilizing the
CN trackage all the way. Arrangements were to
be concluded according to which the train crews
on the Commuter Service would be those of the
CN performing services for the Ontario Govern
ment on an agency basis. The rolling stock would
belong to the Ontario Government. The Supreme
Court of Canada held that the constitutional juris
diction depended on the character of the railway
line, not on the character of a particular service
provided on that line. From a physical point of
view, the Commuter Service trains were part of
the overall operation of the line over which it ran.
Federal jurisdiction was conceded over such mat
ters as signals, safety and labour relations. The
Court held that the tolls of the Commuter Service
came under federal jurisdiction. In Luscar Col
lieries, three branch lines (Luscar Branch, Moun
tain Park Branch and Coal Branch) were built by
coal companies but were operated by what later
became the CN. The coal companies were gradu
ally to be reimbursed through a rebate on charges
38 Alberta Government Telephones v. C.R.T.C., supra, at
p. 265.
39 [1968] S.C.R. 118.
40 [1925] S.C.R. 460.
for the carriage of coal. The arrangements were
such that ultimately the federal undertaking would
become the owner of the branch lines. The majori
ty of the Court held that since the branch lines
were worked as part of the federal undertaking,
they were part of the same railway system. Even if
the legal title had not yet passed to the federal
undertaking, this, in itself, was not a circumstance
sufficiently important to segregate the branch lines
from the principal line for the purposes of legisla
tive jurisdiction. 41 In a sense, here, Ferguson is
running on Greyhound's privilege to operate (the
section 20 permit) and is using Greyhound's termi
nal facilities and documents. But there is no
common "trackage", or physical connection, in
any way similar to those found in these railway
cases, and there is no single management.
Although in that portion of its operation, Fergu-
son, like Bernshine, has arrangements with only
one customer, Ferguson, as a "going concern", has
not changed because it has accepted Greyhound's
former routes; it manages its own operation, with
buses it owns, running on highways within
Alberta.
The arrangement between Ferguson and Grey
hound is not even as close as the one described in
the Through Traffic case 42 where provincial juris
diction was maintained. There, the federal under
taking (the Park Railway) connected physically at
several points with a local tramway service (the
Street Railway). Arrangements had been made
according to which the cars of each railway com
pany would run over the lines of the other. Passen
gers were conveyed from points on one system to
points on the other over the permanent way of
both. Yet, it was held that the Board of Railway
Commissioners for Canada had no jurisdiction to
issue an order as against the local service with
respect to the through traffic. The Judicial Com
mittee of the Privy Council commented that it
41 Supra, at pp. 475-476.
42 Montreal City v. Montreal Street Railway Company,
[1912] A.C. 333 (P.C.).
would be a "most unworkable and embarrassing
arrangement" 43 to have a local line subject to the
provincial jurisdiction for its local traffic and sub
ject to the jurisdiction of the Parliament of
Canada for its through traffic.
I would finally add that the case at bar is hardly
one where Ferguson, as in the Empress Hotel
case 44 or as in the case of a pharmacy business
offering postal services on a franchise agreement,'"
could be deemed to operate two distinct undertak
ings, an intraprovincial school bus and coach ser
vice and an interprovincial service for Greyhound.
As stated by Dickson J. in the Alberta Government
Telephones case, 46 "the case law clearly estab
lishes that if a work or undertaking falls within
paragraph 92(10)(a), it is removed from the juris
diction of the provinces and exclusive jurisdiction
lies with the federal Parliament".
For these reasons, I conclude that the portion of
Ferguson's operations, carried on pursuant to the
section 20 special permit and the services agree
ment with Greyhound, comes under provincial
jurisdiction.
The Board therefore has no jurisdiction over
Ferguson's activities.
(b) Whether a sale of business within the meaning
of the Act has taken place as between Grey
hound and Ferguson:
Having arrived at the conclusion I have on the
first issue, I need not consider the second one.
I would allow Ferguson's section 28 application,
file no. A-257-89 and, pursuant to paragraph
43 Supra, at pp. 340-341.
44 Canadian Pacific Railway Company v. Attorney-General
for British Columbia and Attorney-General for Canada,
[1950] A.C. 122 (P.C.).
45 Canada (Canada Post Corp.) v. C.U.P. W. (January 28,
1988), A-762-87 (F.C.A.) [unreported].
46 Supra, at p. 257.
28(1)(a) of the Federal Court Act, 47 I would set
aside the Canada Labour Relations Board's order
dated May 2, 1989. I would quash Greyhound's
section 28 application, file no. A-255-89 since
Greyhound is not a party "directly affected by the
decision or order" within the meaning of subsec
tion 28(2) of the Federal Court Act.
URIE J.A.: I agree.
47 See Canada Labour Code, R.S.C., 1985, c. L-2, s. 22.
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.