R. v. EllisDon Corporation Ltd.

R. v. EllisDon Corporation Ltd. Collection Decisions of the Court of Appeal Date 2008-11-24 Neutral citation 2008 ONCA 789 Docket numbers C47684 Judges Winkler, Warren Keith; Sharpe, Robert J.; Juriansz, Russell G. Subject Criminal Decision Content CITATION: R. v. EllisDon Corporation Ltd., 2008 ONCA 789 DATE: 20081124 DOCKET: C47684 COURT OF APPEAL FOR ONTARIO Winkler C.J.O., Sharpe and Juriansz JJ.A. BETWEEN Her Majesty the Queen (Ministry of Labour) Respondent and EllisDon Corporation Ltd., Blenkhorn-Sayers Structural Steel Corp., Paul McCormick, Daniel McCormick and Jason Orzechowski Appellants Peter W. Kryworuk and Andrew C. Murray, for the appellants EllisDon Corporation Ltd. and Jason Orzechowski Jerry Raso, for the appellant Paul McCormick Alan McConnell, for the appellant Blenkhorn-Sayers Structural Steel Corp. Grainne McGrath, Catherine Glaister and Rochelle Fox, for the respondent Heard: October 6, 2008 On appeal from the order of Justice Gisele M. Miller of the Superior Court of Justice dated August 14, 2007, with reasons reported at 74 W.C.B. (2d) 626, granting certiorari setting aside the judgment of Justice of the Peace Joanna T. Opalinski of the Ontario Court of Justice dated October 20, 2005, which quashed the charges against the appellants, and granting mandamus directing a trial on the merits. Sharpe J.A.: [1] The issue in this appeal is whether the Ontario Occupational Health and Safety Act, R.S.O. 1990, c.O.1 (“OHSA”) is constitutionally inapplicable to contractors and employees working on an expansion project at Pearson International Airport in Toronto. [2] The corporate appellants, EllisDon (a general contractor) and Blenkhorn (a subcontractor), along with the individual appellants (employees), were charged with offences under OHSA as a result of an injury sustained by one of Blenkhorn’s workers in a workplace accident at the airport. A justice of the peace accepted the appellants’ contention that the charges should be quashed on constitutional grounds. She held that the appellants’ work at Pearson was a vital, essential, an integral part of a core federal aeronautics undertaking and that as a consequence, the appellants were immune from the application of OHSA. [3] The respondent Ministry of Labour brought certiorari and mandamus proceedings challenging the decision. The application judge found that the justice of the peace had erred in her application of the applicable constitutional test and that as the appellants’ work was not vital, essential or integral to the continued operation of the core federal undertaking, there was no impediment to the application of OHSA. [4] For the following reasons, I would dismiss the appeal and hold that the appellants are subject to the application of OHSA. FACTS [5] The Greater Toronto Airport Authority (“GTAA”) is a federal corporation with a mandate to operate Pearson International Airport under the terms of a long-term lease with the federal government. The GTAA is managing a multi-year re-development project at Pearson that is projected to continue until at least 2020. [6] In 1997, the GTAA and the Ontario Ministry of Labour came to an understanding regarding the application of OHSA. The Ministry agreed not to enforce OHSA against the GTAA and the GTAA agreed that OHSA would apply to contractors doing construction on behalf of the GTAA at Pearson. The GTAA also agreed to cooperate with the Ministry by allowing OHSA inspectors to have access to the airport. [7] On May 13, 2002, a worker employed by Blenkhorn was seriously injured in a fall at a construction site at the airport. Ontario Ministry of Labour officials investigated and subsequently laid charges against EllisDon and its employee, Jason Orzechowski, as well as Blenkhorn and its employees, Paul and Daniel McCormick. [8] The accident occurred at the construction site of the Pier C, Terminal 3 expansion project. The Pier C project involved the addition of eight new gates to Terminal 3 and formed part of the larger re-development project at Pearson. EllisDon was the general contractor for the Pier C project pursuant to a lump sum contract awarded by the GTAA. EllisDon contracted with another company which, in turn, subcontracted with Blenkhorn for the supply and erection of structural steel work. EllisDon commenced construction on the Pier C project in November, 2001 and completed the project at the end of May, 2004. [9] EllisDon is a large general contractor that carries on business in Ontario and elsewhere. At the time of the charges forming the subject of this appeal, Blenkhorn was a multi-trades contractor incorporated under the laws of Ontario. It subsequently amalgamated with another company. Both EllisDon and Blenkhorn employed workers unionized under the provincial labour relations regime. [10] Both EllisDon and Blenkhorn have a long history of involvement in various construction projects at the airport. EllisDon has been involved in various construction projects at Pearson since 1989. EllisDon has developed considerable expertise and experience in airport construction and has also undertaken airport projects at several other Canadian cities. Blenkhorn has been involved in significant aspects of the Pearson re-development project since 1999. [11] Both EllisDon and Blenkhorn engage in a wide variety of construction projects. Between 2001 and 2004, both companies were involved in a number of construction projects outside of airport construction. The justice of the peace found that Pearson Airport work performed by EllisDon amounted to between 3 and 15% of its operations as a whole and that performed by Blenkhorn amounted to approximately 29% of its entire operations. [12] Neither EllisDon nor Blenkhorn formed a separate unit or division for the purposes of the Pier C project or for airport work in general. However, both EllisDon and Blenkhorn employed individuals, including the individual appellants, who specialized in airport development, and both companies maintained site offices to administer their work at Pearson. [13] Because the airport was operating as the Pier C project proceeded, extensive planning and coordination was required to ensure that the construction work did not interfere with the operation of the airport. The GTAA assumed responsibility for this coordination and reserved the right to direct EllisDon and Blenkhorn on matters such as hours of work, scheduling and access to specific areas of the airport. MOTION TO QUASH [14] The justice of the peace held that the work performed by the appellants for the GTAA was of a vital, essential, an integral nature to the operation of the airport as it could not be done without extensive involvement, supervision and coordination with the GTAA and other federal entities. She found that the work was so intertwined with the operation of the airport that the appellants had been elevated into the federal sphere. APPLICATION FOR CERTIORARI AND MANDAMUS [15] The application judge held that the justice of the peace had erred by focusing only the work done by EllisDon and Blenkhorn at the airport as distinct from their operations as a whole. The application judge also concluded that the work done by the appellants was not physically, operationally or functionally integrated with the operation of the airport. She concluded that as the work being done by the appellants was not vital, essential or integral to the continued operation of the GTAA, the appellants were subject to OHSA. She therefore quashed the decision of the justice of the peace and sent the matter back for trial. ISSUES [16] The issues raised by the appellants may be summarized as follows: (1) Did the application judge apply the applicable constitutional test? (2) Did the application judge err in the application of that test by focusing on the work done by EllisDon and Blenkhorn as going concerns as opposed to their work at Pearson? (3) Did the application judge err in finding that the appellants’ work was not vital, essential or integral to the continued operation of the GTAA? (4) Did the application judge apply the appropriate standard of review? ANALYSIS (1) General constitutional principles [17] The federal government has exclusive legislative authority with respect to aeronautics by virtue of its residual power under s. 91 of the Constitution Act, 1867 to make laws for the “Peace, Order and good Government of Canada”: Re Regulation and Control of Aeronautics in Canada, [1932] A.C. 54 (P.C.). Under s. 92(10), the federal government also has exclusive jurisdiction in relation to “Works and Undertakings connecting the Province with any other or others of the Provinces, or extending beyond the Limits of the Province”. Federal jurisdiction over aeronautics and federal works and undertakings is plainly engaged in relation to the GTAA: Greater Toronto Airports Authority v. Mississauga (City) (2000), 50 O.R. (3d) 641 ( C.A. ), leave to appeal to S.C.C. refused, [2001] 1 S.C.R. ix. [18] Provincial occupational health and safety legislation falls within s. 92(13) of the Constitution Act, 1867, which grants exclusive jurisdiction to the provinces over “Property and Civil Rights in the Province”. OHSA is valid provincial legislation under this head of power. As valid provincial legislation, OHSA may incidentally affect matters beyond provincial jurisdiction, including federally regulated undertakings such as the GTAA. As a general rule, “merely incidental effects will not disturb the constitutionality of an otherwise intra vires law” and validly enacted provincial laws apply to everyone in the province: see e.g. Global Securities Corp. v. British Columbia (Securities Commission) , [2000] 1 S.C.R. 494, at para. 23; British Columbia (Attorney General) v. Lafarge Canada Inc., [2007] 2 S.C.R. 86, at para. 64. [19] These general rules are subject, however, to the doctrine of interjurisdictional immunity. The doctrine is based on principle that the “classes of subject” in ss. 91 and 92 must be assured “a basic, minimum and unassailable content” immune from the application of legislation enacted by the other level of government: Canadian Western Bank v. Alberta, [2007] 2 S.C.R. 3, at para. 33; Bell Canada v. Québec (Commission de la santé et de la sécurité du travail), [1988] 1 S.C.R. 749, at p. 839. Although, in theory, the doctrine is reciprocal and applies to the benefit of both the provinces and the federal government, historically, “the jurisprudential application of the doctrine has produced somewhat “asymmetrical” results”: Canadian Western Bank at para. 35. Thus, when the doctrine is successfully invoked, provincial legislation is inapplicable or “read down” to the extent that it unacceptably intrudes upon a protected “core” of federal jurisdiction. [20] In Canadian Western Bank, the Supreme Court of Canada refined the test for the level of intrusion necessary to trigger the doctrine of interjurisdictional immunity. The Court held at para. 48: It is when the adverse impact of a law adopted by one level of government increases in severity from “affecting” to “impairing” (without necessarily “sterilizing” or “paralyzing”) that the “core” competence of the other level of government (or the vital or essential part of an undertaking it duly constitutes) is placed in jeopardy. [21] The issue on this appeal is whether the application of OHSA to the appellants would impair the protected core of federal jurisdiction in relation to the GTAA. (2) The constitutional test for application of OHSA to the appellants [22] The test for determining whether the appellants’ activities at Pearson render them subject to OHSA is set out by Dickson J. in Northern Telecom v. Communications Workers, [1980] 1 S.C.R. 115 (“Northern Telecom No. 1”), at p. 132: First, one must begin with the operation which is at the core of the federal undertaking. Then the courts look at the particular subsidiary operation engaged in by the employees in question. The court must then arrive at a judgment as to the relationship of that opera­tion to the core federal undertaking, the necessary relationship being variously characterized as “vital”, “essential” or “integral”. [23] Dickson J. summarized six constitutional principles, derived from Construction Montcalm Inc. v. Min. Wage Com., [1979] 1 S.C.R. 754, to frame and guide this analysis at p. 132: (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 prevent the application of provincial law relating to labour relations and the conditions of employment but only if it is demonstrated 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 undertaking, service or business, and the regulation of its labour relations, 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. [24] The central issues dividing the parties to this appeal can be distilled from these principles. Is the relationship between the appellants’ activities and the GTAA “vital”, “essential” or “integral” to the operation of the GTAA? Is federal regulation of the safety of the working conditions of employees of EllisDon and Blenkhorn integral to federal competence over aeronautics? The answer to these questions depends upon the nature of EllisDon and Blenkhorn’s operations – what are their normal or habitual activities as going concerns – and the relationship between their operations and the operation of the GTAA. [25] Dickson J. also outlined, at p. 135, the nature of the factual inquiry to resolve these issues. That test, as applied to this case, calls for inquiry into the following matters: (i) the general nature of EllisDon and Blenkhorn’s operations as going concerns and, in particular, the role of those working at Pearson within their operations; (ii) the nature of the corporate relationship between EllisDon and Blenkhorn and the GTAA; (iii) the importance of the work done by EllisDon and Blenkhorn for the GTAA as compared with other customers; (iv) the physical and operational connection between the appellants’ work and the GTAA and, in particular, the extent of the involvement of the appellants’ work at the airport in the operation and institution of the GTAA as an operating system. (3) Application of the test [26] The application judge correctly identified this test and I now turn to the manner in which it should be applied. (i) EllisDon and Blenkhorn as going concerns [27] The justice of the peace focused on the appellants’ particular work at the airport rather than on their normal or habitual activities. The appellants say that this was the correct approach and that the application judge erred by insisting that the issue turned on the nature of the entire range of their normal or habitual activities. [28] This submission seems to me to be fundamentally at odds with the authorities. [29] In Construction Montcalm, the court held that provincial minimum wage legislation did apply to the workers of a contractor engaged in the construction of an airport. There, as here, the construction company was involved in a variety of projects and there was no discrete unit or division within the company devoted solely to the project. Writing for the majority, Beetz J. held, at p. 776, that to apply federal jurisdiction in such a situation “would be to disregard the elements of continuity which are to be found in construction undertakings and to focus on casual or temporary factors”, contrary to established principles. He continued: Building contractors and their employees frequent­ly work successively or simultaneously on several projects which have little or nothing in common. They may be doing construction work on a runway, on a highway, on sidewalks, on a yard, for the public sector, federal or provincial, or for the private sector. One does not say of them that they are in the business of building runways because for a while they happen to be building a runway and that they enter into the business of building highways because they thereafter begin to do construc­tion work on a section of a provincial turnpike. Their ordinary business is the business of building. What they build is accidental. And there is noth­ing specifically federal about their ordinary business. [Emphasis added.] [30] I agree with the respondent that one cannot ignore the fact that most of what the appellants do has nothing to do with the GTAA. EllisDon and Blenkhorn concede that the justice of the peace did not make a factual finding that their airport operations could or should be considered to be functionally separate from the rest of their operations. I agree with the respondent that such a finding is, in any event, not available on the record. Despite their long history of working on various airport construction projects, neither EllisDon nor Blenkhorn created definable, discrete divisions or units exclusively involved in airport construction. In addition, they employed workers unionized under the provincial labour relations regime and retained the liberty to move those workers on and off the airport site as the demands of their overall operations required. As the application judge observed at para. 21 of her reasons, “the airport workers in this case are not an entity separate from those working on other company projects and cannot be divided from those other workers except in an artificial way.” [31] This is a very different situation than that existing in Northern Telecom v. Communication Workers, [1983] 1 S.C.R. 733 (“Northern Telecom No. 2”), a case relied on by the appellants. There, the issue was whether “all the operations relating to installers of Telecom carried on east of a vertical line through Brighton in Eastern Ontario” (emphasis added) were governed by federal or provincial jurisdiction with respect to labour relations: Northern Telecom No. 2 at p. 737. That discrete, clearly defined and functionally separate unit devoted 80% of its time to the installation of equipment for Bell, a federal undertaking. [32] Given the nature of the corporate appellants’ operations, I fail to see how exempting the appellants from the uniform operation of provincial labour and workplace safety legislation would be consistent with the coherent application of constitutional principles. They would be subjected on a haphazard basis to either federal or provincial authority as they came to and left the GTAA. Beetz J.’s comments in Construction Montcalm, at p. 776, are apposite: a worker whose job it is to pour cement would from day to day be shifted from federal to provincial jurisdiction for the purposes of union membership, certification, collective agreement and wages, because he pours cement one day on a runway and the other on a provincial highway. I cannot be persuaded that the Constitution was meant to apply in such a disinte­grating fashion. [33] Subjecting EllisDon and Blenkhorn’s workers one day to regulation under federal labour standards and the next day to provincial labour standards would ignore Dickson J.’s caution in Northern Telecom No. 1, at p. 132, that if one does not look “at the normal or habitual activities of the business as those of ‘a going concern’, without regard for exceptional or casual factors”, the Consti­tution will “not be applied with any degree of continuity and regularity.” [34] I would add that, contrary to the appellants’ submission, application of this principle to the present case does not amount to deciding a constitutional case on considerations of efficiency contrary to the admonition in Ontario Hydro v. Ontario (Labour Relations Board), [1993] 3 S.C.R. 327. That case involved divided jurisdiction over a single enterprise where different rules applied to different employees, not different rules applying to the same employees as they move from one job to the next. [35] I conclude that the application judge did not err by focusing on the appellants’ overall operations and by concluding that the first factor in Northern Telecom No. 1 points in favour of provincial jurisdiction. (ii) Nature of the corporate relationship [36] There is no corporate relationship between EllisDon and Blenkhorn on the one hand, and the GTAA on the other. While both companies made a series of successful contract bids for projects at Pearson, neither had an ongoing legal relationship with the GTAA or any guarantee that future bids would be accepted. [37] This situation is in marked contrast to that existing in Northern Telecom No. 2 where Bell Canada , the federal undertaking, controlled Telecom, the entity found to be subject to federal jurisdiction. [38] Thus, this factor weighs against federal jurisdiction and in favour of the application of OHSA to the appellants. (iii) Importance of the work done for the GTAA as compared with other customers [39] The justice of the peace found that Pearson airport work amounted to between 3 and 15% of EllisDon’s total construction work and about 29% of Blenkhorn’s work. As the respondent points out, these percentages are significantly lower than those found to exist in cases where federal jurisdiction was upheld: 100% in the “Stevedores’ case” (Validity and Applicability of the Industrial Relations and Disputes Investigation Act, [1955] S.C.R. 529); 90% in the “letter carriers case” (Reference re Minimum Wage Act ( Saskatchewan) , [1948] S.C.R. 248); and 80% in Northern Telecom No. 2. I note that in Northern Telecom No. 2, Dickson J. stated, at p. 774, that the case was “very close to the boundary line between federal and provincial jurisdiction”. [40] This factor, like the first two factors, weighs against federal jurisdiction and in favour of provincial jurisdiction. (iv) Physical and operational connection to the GTAA [41] It is common ground that the degree of physical and operational connection between EllisDon and Blenkhorn on the one hand, and the GTAA on the other, is a dominant factor in determining whether there is an integral relationship between the appellants and the GTAA. [42] The appellants submit that as the construction is being conducted alongside a functioning and operating airport, there must be extensive coordination with the GTAA in order to avoid interference with the airport’s normal activities. They say that the application of provincial workplace safety legislation could, for example, allow the provincial authorities to shut down all or part of the airport to uphold provincial safety standards in the event of a serious accident. [43] The respondents meet this submission as follows: “keeping out of the way” of the federal undertaking is distinct from – indeed the opposite of – being integrated in the operation of that federal undertaking. Any incidental effect of the enforcement of provincial workplace safety standards on the operation of the airport, according to the respondent, is minimal and acceptable under the governing constitutional principles. [44] I agree with the respondent and see no error in the application judge’s conclusion that the degree of physical and operational integration between the appellants and the GTAA falls short of the degree required to invoke federal jurisdiction. [45] I accept that extensive coordination by the GTAA was required to accommodate the construction work since the project proceeded while the airport was operating. However, coordination is not the same as integration. The construction project proceeded beside, not as part of, the operating airport. As the respondent argues, keeping out of the way of the operation of the airport is really the opposite of being integral to that operation. The construction will facilitate the operation of the airport in the future once it is completed, but the construction work carried on by the appellants during the Pier C expansion project was quite separate and distinct from the operation of the airport. [46] In my view, it is particularly telling that the GTAA, the very entity responsible for the operation of the airport, has agreed to accept the application of OHSA to all contractors, including EllisDon and Blenkhorn. Surely if there were any serious threat, as the appellants submit, that busy-body provincial inspectors acting pursuant to provincial jurisdiction under OHSA would interfere in some way with the airport’s operations, the GTAA would have asserted interjurisdictional immunity. [47] I recognize, of course, that certain decisions in relation to airport construction fall within exclusive federal jurisdiction. As this court held in Toronto Airports Authority, application of provincial regulations pertaining to building design, materials, and the alteration of buildings may invade the core of federal jurisdiction in relation to aeronautics. Decisions relating to building design and materials, as the court held in Construction Montcalm at p. 771, “will be permanently reflected in the structure of the finished product” and will “have a direct effect upon its operational qualities, and, therefore, upon its suitability for the purposes of aeronautics”. These matters are to be distinguished from the mode or manner of construction. Again, to quote Beetz J. in Construction Montcalm, at p. 771: “the requirement that workers wear a protective helmet on all construction sites including the construction site of a new airport has everything to do with construction and with provincial safety regulations and nothing to do with aeronautics.” [48] I do not agree that Construction Montcalm should be distinguished on the ground that in that case, the airport was not yet operational. While working on the expansion of an existing and operating airport is bound to require a special level of coordination, here, as in Construction Montcalm, the safety standards imposed upon the appellants by OHSA have everything to do with construction and nothing to do with aeronautics. (3) Standard of review [49] I turn, finally, to the issue of whether the application judge applied the appropriate standard of review. [50] The application judge found that the justice of the peace erred in: (1) defining the work done by the appellants in terms of work being done for the airport as distinct from the operations of each company as a going concern; and (2) concluding that the physical, operational and functional connection between the operation of each company and the federal undertaking made the former vital, essential and integral to the latter. [51] The appellants submit that these were issues of mixed fact and law and that absent palpable and overriding error, the application judge had no right to interfere. I disagree. [52] With respect to the first issue, the application judge identified a legal error: by focusing on the corporate appellants’ operations at the airport rather than on their overall operations, she held that the justice of the peace did not apply the correct constitutional test. The standard of review is clearly correctness. [53] The second issue involves the constitutional effect of the evidence. I agree with the respondent that the appropriate standard of review on an application of this kind is correctness: see R. v. Mercy Seafoods Ltd., [2008] N.S.J. No. 315 (C.A.). Any other standard would permit different results on the same facts, an intolerable result in the constitutional realm. As stated in Dunsmuir v. New Brunswick , 2008 SCC 9, at para. 58: correctness review has been found to apply to constitutional questions regarding the division of powers between Parliament and the provinces in the Constitution Act, 1867…. Such questions, as well as other constitutional issues, are necessarily subject to correctness review because of the unique role of s. 96 courts as interpreters of the Constitution. [Citations omitted.] CONCLUSION [54] Accordingly, I would dismiss the appeal. “Robert J. Sharpe J.A.” I agree W. Winkler C.J.O.” “I agree R.G. Juriansz J.A.” RELEASED: November 24, 2008