Interpreting bijural legislation In response to the intricacies of interpreting and drafting bijural enactments in a mixed system of civil and common law, new rules of interpretation addressing specifically the challenges of bijural enactments were adopted in 2001. With a view to clarifying the interaction of federal legislation with provincial private law and particularly Quebec civil law, the following two important rules for the interpretation of bijural enactments were enacted as amendments to the Interpretation Act:49
8.1 Both the common law and the civil law are equally authoritative and recognized sources of the law of property and civil rights in Canada and, unless otherwise provided by law, if in interpreting an enactment it is necessary to refer to a province’s rules, principles or concepts forming part of the law of property and civil rights, reference must be made to the rules, principles and concepts in force in the province at the time the enactment is being applied.
8.2 Unless otherwise provided by law, when an enactment contains both civil law and common law terminology, or terminology that has a different meaning in the civil law and the common law, the civil law terminology or meaning is to be adopted in the Province of Quebec and the common law terminology or meaning is to be adopted in the other provinces.50 The rule in section 8.1 first declares that common law and civil law are equally authoritative in federal legislation and that they both represent a recognized source of the law of property and civil rights (private law). This declaration confirms and codifies the principle that federal legislation must be interpreted as referring to both the common law and the civil law systems and that both are equally authoritative and necessary components of the federal norm. This statement and rule reaffirm the principle of equality of our two legal traditions and it unequivocally recognizes the duality inherent in our federal legislation when it deals with matters of property and civil rights. Noticeably, it refers back to the constitutional division of powers between the provinces and the federal Government and ties in with, and has the weight of, a constitutional rule.51
A second element of the rule in section 8.1 is to require (it says “reference must be made to”) that federal legislation be completed or supplemented by the rules, principles and concepts of the law of property and civil rights (provincial private law).52 The supplemental or complementary character of provincial private laws in relation to federal law is not only confirmed but it is also set out as a requirement. This statutory duty to refer to provincial private law53 is subject to two conditions: 1 that it be necessary to so refer to the province’s private law, and 2 that the law not provide otherwise. Examples of situations where the statutory duty of reference to the requisite private law rules and concepts is not necessary would include federal enactments that do not touch upon provincial private law (pure criminal law or public law provisions) or enactments providing their own separate and independent private law rules as a more or less complete code that is dissociated from provincial private law rules.54 Other exceptions would include federal enactments where dissociation from one or 49 R.S.C. (1985), c. I-21. 50 Federal Law-Civil Law Harmonization Act, No 1, S.C.2001, c.4 (First Harmonization Act).51 St-Hilaire, supra note 22 at para 49: “It is the Constitution of Canada itself which provides that some federal laws have differing effects according to whether they are applied in Quebec or in the other provinces… To associate systematically all federal legislation with common law is to ignore the Constitution”. 52 See Peoples, supra note 27; 9041-6868 Quebec Inc. supra note 27, and St-Hilaire, supra note 27. 53 Henry L. Molot, supra note 40 p.15 describes the requirement as a “statutory duty of reference”. 54 Canada 3000 Inc., Re; Inter-Canadian (1991) Inc. (Trustee of), 2006 SCC 24: the concept of detention was interpreted as providing a separate federal remedy in a complete federal code, over and above any existing provincial remedies; Canada (Minister of National Revenue – M.N.R.) v. National Bank of Canada, 2004 F.C.A.
92: deemed trust provisions in federal tax law were complete and explicit as to their effect such that provincial
other provincial private law is implicitly or expressly provided by law. This might include federal provisions dealing with matters of aboriginal law, matters of Crown prerogative, maritime law, and even matters of international law that supersede the duty to refer to private laws and require uniform country-wide application. Such matters do not require a reference to provincial private law as they are interpreted as autonomous branches of federal law that depend on external sources separate and independent from provincial private laws.55 A third aspect of the rule in section 8.1 is its ambulatory effect. Where reference is made to a provincial private law rule, principle or concept in a federal enactment, such reference will encompass the provincial private law in effect at the time of application of the federal enactment.56 This rule provides automatic updating of federal references to provincial laws as these laws are amended from time to time. Thus, where a federal provision refers to a provincial private law concept or rule that has been amended (eg the new civil law concept of extra-contractual liability that replaces the concept of delictual liability) and where that provision is not adapted to reflect the change in provincial law, new section 8.1 would require that the provision be read as referring to the new concept or rule. While this aspect of section 8.1 might provide a good back up system for upgrading references to provincial law pending the revision of all federal legislation, legislative interventions in individual federal provisions will still be necessary to effect more intricate adaptations where the interaction with provincial private law is more complex. Be that as it may, the introduction of these rules calls for a new attitude of the federal legislator vis à vis the interaction of its legislation with provincial private law. This is why a wholesale administrative revision of the federal statute book and regulations was mandated and will soon lead to a third harmonization bill in a series that will go on until all existing federal statutes and regulations are revised. As well, all new federal legislation is now systematically revised at the drafting stage to adapt it to Quebec civil law.57
The Program for the Harmonization of Federal Legislation with the Private Law of the Province of Quebec has considerably different objects and purposes from harmonization in the European Economic Union and from other international and inter-jurisdictional unification exercises in relation to private law (Unidroit, UNCITRAL, US Uniform Code of Commerce, even Canadian Uniform Law Conference endeavours). The harmonization of federal legislation seeks to provide better access to justice in the Canadian federation and is also linked to linguistic rights and national unity considerations.58 It is not a comparative law exercise motivated by legislative reform of the law with a
law did not apply; in Théberge v. Galerie d’Art du Petit Champlain inc.  2 S.C.R. 336, the historical common law definition of copyright was only concerned with economic rights and did not address moral aspects of the transaction as the civil law concept did; A.Y.S.A. v. Canada Revenue Agency  F.C.A.136: not necessary to have recourse to the common law of Ontario as the federal tax law already defined charity in a manner that precluded the application of provincial law. 55 See ITO-International Terminal Operators Ltd.v. Miida Electronics Inc.,  1 S.C.R. 752 at 771 (“[T]he term ‘Canadian maritime law’ includes all that body of law which was administered in England by the High Court on its Admiralty side in 1934 as such law may, from time to time, have been amended by the federal Parliament, and as it has developed through judicial precedent to date.”). 56 Henry L. Molot, supra note 40 at p.16. 57 All federal legislation is revised to ensure bijural application, since 2002. This includes tax legislation of the Department of Finance where Technical Bills and Budget Bills are revised in cooperation with Finance drafters. Research and development for a number of more thorny issues continues and will require further adjustments in future Bills. 58 The Preamble to the First Harmonization Act reads: “WHEREAS all Canadians are entitled to access to federal legislation in keeping with the common law and civil law traditions; “WHEREAS the civil law tradition of the Province of Quebec, which finds its principal expression in the Civil Code of Québec, reflects the unique character of Quebec society; “WHEREAS the harmonious interaction of federal legislation and provincial legislation is essential and lies in an interpretation of federal legislation that is compatible with the common law or civil law traditions, as the case may be;
view to developing uniform standards and stamping out diversity, rather it purports to acknowledge and reflect diversity as much as possible while pursuing national interests.59 The issue also arises whether common law judicial precedents fall within the meaning of the phrase “unless otherwise provided by law” for the purposes of the exception to the duty to refer to private law in sections 8.1 and 8.2. It would appear that case law does not provide a valid justification for the application of the exception to the duty to refer to provincial law.60 Case law predating the introduction of section 8.1 and ignoring provincial private law needs to be revisited and reassessed in light of the statutory duty to refer to provincial private law in section 8.1. It was ruled recently that cases decided in relation to common law jurisdictions and setting out a “comprehensive judicial test” to determine whether a taxpayer was an employee or a self employed person, for the purposes of contributions under the federal Employment Insurance Act, did not apply in Quebec where the Civil Code of Quebec now specifically provides the “sole legal criteria” of subordination as the test for the status of employee. Although pre-existing case law that disregards provincial private law is no exception to section 8.1, courts may well decide that some case law is founded on an express or implicit intention to dissociate federal legislation from one or other provincial private law system and apply it uniformly across Canada. Uniform application that is contrary to provincial private law is only warranted under section 8.1 where reference to provincial law is not necessary or where a clear intention to derogate from provincial private law is expressly or implicitly provided in the federal legislation.61 A question that often arises in dealing with the rule in section 8.1 is whether it applies retroactively to a time before its introduction in the First Harmonization Act, in June of 2001? The rule in section 8.1 is declaratory in nature as it merely restates the law that has always existed and as such applies to fact situations arising before 2001. This is borne out by the ambulatory nature of the rule. However, while section 8.1 is intended to apply in the interpretation of statutory provisions that involve a transaction or event in progress, it is not intended to reopen transactions or events that are over and the legal effect of which is already spent. Therefore one must consider carefully the particular operation of the federal provision in order to give full effect to the scheme and intent of the federal provision without “WHEREAS the full development of our two major legal traditions gives Canadians enhanced opportunities worldwide and facilitates exchanges with the vast majority of other countries; “WHEREAS the provincial law, in relation to property and civil rights, is the law that completes federal legislation when applied in a province, unless otherwise provided by law; “WHEREAS the objective of the Government of Canada is to facilitate access to federal legislation that takes into account the common law and civil law traditions, in its English and French versions; “AND WHEREAS the Government of Canada has established a harmonization program of federal legislation with the civil law of the Province of Quebec to ensure that each language version takes into account the common law and civil law traditions; “NOW, THEREFORE, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:”59 Martin Boodman, “The Myth of Harmonization of Laws” in Contemporary Law / Droit Contemporain(Cowansville, Éditions Yvon Blais, 1992), p. 126 at p. 149 & (1991) American Journal of Comparative Law, 669 concludes that all systems of law are by definition harmonized and that harmonization is vague and meaningless without clear relationships, purposes and objects with elements to be harmonized in a particular project. See also Marie Claude Gervais, “Harmonization and Dissonance: Language and Law in Canada and Europe, Program to Harmonize Federal Legislation with the Civil Law of the Province of Quebec, Assumption of Complementary and Methodological Issues”, in The Harmonization of Federal Legislation with the Civil Law of the Province of Quebec and Canadian Bijuralism, 2nd publication, Booklet 1: pp. 10-18. which is also available at www.bijurilex.gc.ca. 60 See 9041-6868 Québec Inc. v. M.N.R., supra note 27 paras 5, 6 and 7, and Henry L. Molot, supra note 40 p.
19. 61 The argument that judicial precedents should not be regarded as “law” for purposes of the exclusion in section 8.1, intimates that such precedents, to displace provincial law, need to be based on explicit provisions of federal law or absolutely necessary implications (emphasis in original) thereof – see Roderick A. Macdonald, Provincial Law and Federal Commercial Law (1992) 7 Banking and Finance Law Review 437-51 at 447; Aline Grenon supra note 17 at pp. 16-17; Pierre Archambault supra note 28 at para. 30, and David Duff supra note 16 at 49; see also 9041-6868 Quebec Inc., supra note 27.
reopening past transactions or events that have already attained their legal effects under the scheme of the federal legislation.62 The rule in section 8.2 states that the terminology of bijural enactments must be read and interpreted in a manner that is consonant with the legal system of the province of application. Accordingly, for purposes of applying a provision that contains both common law and civil law terminology (for example when the expression “real property or immovable” is used) the reader is reminded to interpret the provision using civil law terminology in Quebec (“immovable”) and common law terminology elsewhere (“real property”). By the same token, when the meaning of a term used in a bijural provision is different under both systems, the reader must ensure that the civil law meaning is applied in Quebec and the common law meaning is applied elsewhere. This rule, like the rule in section 8.1, sets out as a statutory presumption of complementarity that may similarly be reversed when the law provides otherwise. The presumption that civil law terminology applies in Quebec and that common law terminology applies elsewhere in Canada is particularly reassuring for readers of federal enactments who are not familiar with both of our private law systems as it enables anyone to understand and apply federal enactments in the private law system of the province with which that person is familiar. Conversely, for anyone who works on private law issues with cross-border application, familiarity with both legal systems becomes an important asset in the practice of federal law. Drafters are undoubtedly in the latter group. Further assistance in the interpretation of bijural federal enactments is also provided through various interpretative tools. The Department of Justice of Canada publishes a record of bijural terminology63 that succinctly explains the bijural problems encountered in a provision and describes the solutions adopted to resolve them in each language version of the bijural provision. The Department of Finance of Canada also describes in its technical notes for tax bills the adaptations made in the application of bijural tax provisions to Quebec. In summary, the interpretation rules in sections 8.1 and 8.2 are predicated on the recognition that federal laws in Canada have a composite structure calling on diverse provincial private law. Federal law must take account of provincial private law as it provides supplemental rules that form part of, and complete, federal law. Bijuralism flows from this composite architecture and, as we have seen, may lead to variations in the application of federal legislation based on differences in the provincial private law component of federal laws. Asymmetries or differences in the application of federal legislation are normal in the federal bijural context of sections 8.1 and 8.2 and when federal policies and legislation cannot be applied consistently and coherently, adaptations become necessary to avoid disparities or gaps and to achieve similar federal policies for Quebec and the other provincial jurisdictions. In this manner, harmonization maintains the right balance between the competing needs of coherence in national policy objectives (through greater uniformity) and provincial autonomy as expressed in private law diversity. Bridging bijural gaps in federal legislation is routinely done as part of the ordinary drafting process where Bills are co-drafted by an Anglophone common law lawyer and a Francophone civil law lawyer with the help of comparative law experts who ensure the best trans-systemic fit. Increasingly, however, harmonization has to be implemented upstream at the policy development level, before the drafting process, to avoid couching federal policies in a policy structure or design that is too tightly wrapped up in legal concepts at odds with bijuralism. A good example is the use of the concepts of “legal” and “beneficial ownership” throughout federal legislation where these concepts have no equivalent in the civil law system.64 Such legal traps could be avoided by more sensitivity to bijuralism at the policy development stage. 62 See in this respect Sullivan, Driedger, supra note 15 at p. 548; and Coté, supra note 36 at pp. 115-137. 63 See http://canada.justice.gc.ca/en/ps/bj/harm/Index.html. 64 A similar problem exists in international tax Conventions for the avoidance of double taxation that refer to the concept of beneficial ownership where that concept is foreign to the legal system of certain contracting civil law States like the Nederlands. In Indofood International Finance Ltd. c. JPMorgan Chase Bank N.A., 
These new interpretation rules have significant implications for the drafting of federal legislation. The interpreter must now assume the complementarity of federal legislation and provincial private law; similarly lawmakers65 and drafters should anticipate and adapt their legislation in light of their combined effect with provincial private laws. Only where this is not possible or necessary would federal legislation be dissociated from provincial private laws, and such dissociation would nonetheless set out clearly how the federal rule should apply in the provincial private law environment from which it is dissociated. Lawmakers and drafters must now design and draft federal legislation so as to either adequately embrace, or derogate from, the private law rules, concepts and principles of each of the 13 provincial or territorial private law jurisdictions. Fortunately this process involves mostly fine tuning federal laws so that they better reflect civil law rules, concepts and institutions. Typically, changes in terminology are made to ensure that federal provisions work in a civil law environment and that the federal policies are achieved for Quebec. For example, references to “movable” and “immovable” property are added alongside “personal” and “real” property, to “hypothec” alongside “mortgage”, to “extra-contractual civil liability” alongside “liability in torts”, or to “solidarily” alongside “jointly and severally”, all with the view to adequately addressing similar civil law rules and concepts.66
Some adaptations are more complex67 and require the invention of an equivalent rule or concept where the rule or concept used in the federal provision does not have any equivalent in the other legal system. For example, federal rules for the taxation of usufructs in Quebec have been adapted using as a model the rules for the taxation of trusts even though civil law usufructs are not trusts legally and resemble more life interests. The tax concept of a “partial gift” (contribution to a charity where a part of the contribution is used to purchase tickets or a meal offered by the charity to raise funds) has been invented for common law jurisdictions to allow the deduction of charitable contributions that would be valid under Quebec civil law but not at common law.68 In the Federal Real Property and Federal Immovables Act,69 “immovable” is defined as including the rights of a lessee over such property in the Province of Quebec. This ensures that Quebec leases are treated in the same manner as leasehold interests at common law even though such leases do not amount to a real right (interest in land) and the lessee does not hold an immovable (real property) but rather only has a personal right in relation to that property. To sum up, the new rules of construction of bijural enactments buttress the complementarity of federal legislation with provincial private law by setting complementarity as the default system where it is necessary to refer to private law. This forces lawmakers and drafters to unequivocally embrace or derogate from provincial private laws. It is now up to federal lawmakers to anticipate differences in the application of federal legislation caused by incompatible provincial private laws and to bridge, as required, gaps and disparities by derogating from the apprehended effect of inconsistent provincial private laws. EWCA Civ 158 (England and Wales Court of Appeal (Civil Division)) the Court of Appeal found that this concept had acquired an “international” meaning based on the commentaries of the OECD model convention that included certain intermediaries and conduits. 65 See “Cabinet Directive on Law Making” on the website of the Privy Council of Canada: www.pco.gc.ca (publications). 66 See Bijural Terminology Records, supra note 63. 67 Beware of those who say that harmonization is just a symbolic exercise and that it suffices to throw in a few Quebec buzz words and the problem will disappear. 68 At common law there is no gift if any consideration is received; proposed subsections 248(30)-(33) create a regime similar in its effects to the civil law partial donation with a view to allowing that portion of the transaction that is a “true gift”, notwithstanding the consideration given for the “non-gift” portion of the transaction. 69 S.C. 1991, c. 50, harmonized in S.C. 2001, c.4, section 11.