General Motors of Canada Ltd. v. City National Leasing

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General Motors of Canada Ltd. v. City National Leasing

Hearing: May 17, 18, 1988
Judgment: April 20, 1989


Full case name:	General Motors of Canada Limited v. City National Leasing
Citations:	[1989] 1 S.C.R. 641
Ruling:	Appeal dismissed.

Court membership

Chief Justice: Brian Dickson
Puisne Justices: Jean Beetz, William McIntyre, Antonio Lamer, Bertha Wilson, Gerald Le Dain, Gérard La Forest, Claire L'Heureux-Dubé, John Sopinka

Reasons given

Unanimous reason by: Lamer C.J.

Laws applied

Attorney General of Canada v. Canadian National Transportation, Ltd., [1983] 2 S.C.R. 206; MacDonald v. Vapor Canada Ltd., [1977] 2 S.C.R. 134

General Motors of Canada Ltd. v. City National Leasing [1989] 1 S.C.R. 641, is a leading Supreme Court of Canada decision on the scope of the Trade and Commerce powers of the Constitution Act, 1867 as well as the interpretation of the Ancillary doctrine.

1 Background
2 Opinion of the Court
- 2.1 Trade and commerce
- 2.2 Ancillary doctrine
3 See also
4 External link

[edit] Background

During the 1970s General Motors(GM) sold vehicles to City National Leasing (CNL) as well as one of it competitors. It was discovered that GM was giving CNL's competitor a better interest rate than CNL, which violated the federal Combines Investigation Act. In its defence GM argued that the provision in the Act that created the civil cause of action was outside the legislative competence of the federal government.

The motions judge found that the provision was ultra vires the federal government and struck it out. The Court of Appeal overturned the decision.

The issue before the Supreme Court was:

whether the Combines Investigation Act, either in whole or in part, was intra vires Parliament under s. 91(2) of the Constitution Act, 1867, and
whether s. 31.1 was within the legislative competence of Parliament.

[edit] Opinion of the Court

The Court found that the Act was valid under the General Trade and Commerce power, and that the provisions were necessarily incidental to the valid subject of the Act thus were valid as well.

[edit] Trade and commerce

The Court outlined the analysis for determining the constitutionality of a provision under the "general" branch of the Trade and Commerce power. First, it must be determined "whether the impugned provision can be viewed as intruding on provincial powers, and if so to what extent". Second, it must be determined "whether the act (or a severable part of it) in which the impugned provision is found is valid". This requires examination of several factors including those listed by the court:

the impugned legislation must be part of a general regulatory scheme;
the scheme must be monitored by the continuing oversight of a regulatory agency;
the legislation must be concerned with trade as a whole rather than with a particular industry;
the legislation should be of a nature that the provinces jointly or severally would be constitutionally incapable of enacting; and
the failure to include one or more provinces or localities in a legislative scheme would jeopardize the successful operation of the scheme in other parts of the country.

[edit] Ancillary doctrine

The Court then considered whether the provision could be found valid under the ancillary doctrine. In examining the test established Papp v. Papp, the Court re-articulated it. First, the law as a whole must be valid. If so, the Court must consider the degree of encroachment outside of the government's jurisdiction. If it is a serious encroachment the provision will only be upheld if it is necessarily incidental" to the function of the entire Act. For minor encroachments the provision need only have a "rational connection" to the entire Act. On the facts the Court found that the provisions were ancillary to the Act and so were upheld.