Reference Re Validity of Section 5 of the Dairy Industry Act, also known as the Margarine Reference or as Canadian Federation of Agriculture v Quebec , is a leading ruling of the Supreme Court of Canada, upheld on appeal to the Judicial Committee of the Privy Council, on determining if a law is within the authority of the Parliament of Canada's powers relating to criminal law. In this particular case, the Court found that a regulation made by Parliament was ultra vires. Though the regulation contained sufficient punitive sanctions, the subject matter contained within it was not the kind that served a public purpose. The case was decided by the Judicial Committee of the Privy Council on appeal from the Supreme Court of Canada, as the cause for appeal arose before the abolition of such appeals in 1949. The decision by Rand J was upheld in 1951, and the case has been cited in federalism disputes many times since.
Background
Under Section 91 of the Constitution Act, 1867, Parliament receives exclusive powers to legislate in regard to the criminal law. The precise meaning of the criminal law power, however, had proved controversial. In the Board of Commerce case, the JCPC seemingly chose to define criminal law power as limited to prohibiting only what was criminal in 1867. This was overturned in Proprietary Articles Trade Assn. v. A.-G. Can., in which it was found criminal law means Parliament could legitimately prohibit any act "with penal consequences." The problem with the latter decision was that it gave Parliament an excuse to legislate in regard to many matters. The matter came before the courts again with the Margarine Reference, where the following reference question was posed to the Supreme Court of Canada: In this case, Parliament had legislated against the production and trade of margarine, in order to give dairy businesses assurances that margarine would not threaten their existence. This legislation actually dated back to 1886, and it was claimed in the law that the real purpose was to target a product that was "injurious to health." If true, that would have made margarine a fair target for criminal law, but the federal government admitted before the courts that the assessment was simply false.
At the Supreme Court of Canada
The Court ruled: Rand J, in his concurring opinion for the majority, struck down the prohibition on production of margarine on the grounds that it was not valid criminal law. The prohibition on importation of margarine, however, was upheld under the federal Trade and Commerce power. He outlined a test to determine if a law fell under the criminal law: Two requirements must be met for a law to be criminal in nature:
the law must be a prohibition with a penal sanction.
the law must be directed towards a public purpose.
Rand also listed a few objectives that would qualify as legitimate public purposes, namely "Public peace, order, security, health, morality." The ruling was appealed to the Privy Council, on the grounds that the legislation was valid under the following:
