Sir LYMAN P. Durr C.J.C.:—The interrogatory referred to us is in the following terms :
"'Is Section 16 of the Special War Revenue Act, as enacted by section 1 of Chapter 54 of the Statutes of 1932 and amended by section 4 of Chapter 27 of the Statutes of 1940-41 ultra vires of the Parliament of Canada either in whole or in part, and if so in what particular or particulars or to what extent?’’
The said s. 16, as amended, reads as follows:
"16(1) Every person resident in Canada who, after the thirty- first day of December, 1931, insures or has insured his property situate in Canada in which he has an insurable interest, other than that of an insurer of such property, or renewscor has renewed any such insurance, against risks other than marine risks,
"‘(a) with any British or foreign company; or
"‘(b) with any exchange, the chief place of business of which exchange or of its principal attorney-in-fact is situate outside of Canada,
which, on or before the first day of July, 1932, or at the time such insurance is effected or renewed if after the last mentioned date, is not authorized under the laws of the Dominion of Canada to transact the business of insurance, shall, on or before the first day of March, 1933, and on or before the first day of March in each year thereafter, pay to the Minister, in addition to any other tax payable under any other existing law or statute,
a. tax of ten per centum of the net premiums paid or payable by such person in respect of such insurance for the next preceding calendar year.
((2) For the purpose of this section, every corporation carrying on business in Canada, shall be deemed to be a person resident in Canada.”
I have given to the arguments advanced in support of the validity of this enactment, as well as to those against it, the most prolonged and, I must admit, anxious consideration. Some of the arguments relied upon by the Provinces seem to open up rather far-reaching topics touching the powers of the Parliament of Canada concerning intercourse with other countries. I find it unnecessary to discuss such topics, because I think the question raised by the reference fails to be dealt with upon comparatively narrow ground.
I am unable to accept the argument that the enactment is prima facie valid as such and that the invalidity of the existing legislation relating to the transaction of the business of insurance is immaterial. In view of the decision in the Insurance ease of 1932 (Re Insurance Act & Special War Revenue Act, A.-G. Que. v. A.-G. Can., [1932], 1 D.L.R. 97, A.C. 41, 53 Que. K.B. 34), I see no eseape from the proposition advanced by the Provinces that s. 16 of the Special War Revenue Act, R.S.C. 1927, e. 179, as amended by the statutes of 1940 to 1941, is, in point of law, so related to the insurance legislation affecting British and foreign companies and extra-Canadian exchanges that if the insurance legislation is invalid s. 16 must fall with it. In this respect I see no admissible distinction between the two cases.
The point of substance, therefore, is whether this insurance legislation is invalid as a whole, or in such degree as to strike s. 16 with sterility.
It is convenient first to refer to the Act relating to British companies. By s. 2 (b) a British company is thus defined:
‘ "British company’ means any corporation incorporated under the laws of the United Kingdom of Great Britain and Northern Ireland or any British Dominion or possession other than Canada or a province of Canada for the purpose of carrying on the business of insurance.’’
Sections 116 and 117 are in these words:
• 116. There shall be established and maintained in the Department of Insurance a register in which shall be entered the names af all British companies registered under this Part and to which certificates of registry are granted.
4117. No British company shall transact the business of insurance in Canada, save as hereinafter expressly provided, unless it is registered and holds a certificate of registry from the Minister. ’ ‘
Section 118 requires, inter alia as a condition of registration, that a British company shall make a deposit with the Minister in any of the securities specified in s. 55 of the Act in the following sums, namely:
«(i) for a certificate of registry to transact the business of life insurance or fire insurance, the sum of one hundred thousand dollars, and
"‘ (ii) for a certificate of registry to transact any other class of insurance business, such sum as the Treasury Board may determine. ’ ‘
It appears then that by this legislation a British company is prohibited from making any contract of insurance in Canada, that is to say in any Province of Canada, and from performing in any such Province any act of inducement to enter into any such contract, or any act relating to the performance of any such contract, or rendering any service connected with any such contract in any such Province, unless it is registered, and among the conditions of such registration is that just mentioned.
One must consider the effect of these enactments in practice. Prior to the passing of this statute a British company has an agency in Toronto. It has complied with the provisions of the provincial law, whatever they may be, in respect of giving security for the benefit of its policy holders. The Dominion enactment comes into operation and the British company and its agents immediately come under the prohibition of s. 117 and the company and its agents become subject to the penalties prescribed by s. 142, which become exigible on the performance of any one or more of the acts constituting by definition the "business of insurance’’, unless and until it becomes registered under the Dominion statute.
I do not perceive any valid reason for holding that it would be beyond the powers of a. Province, in exercise of its authority to regulate the business of insurance in the Province, to require the registration of insurers, and to exact as conditions of obtaining such registration the deposit of security of a character similar to'that required by s. 118.
Assuming that the Dominion, in exercise of its control of trade and commerce under the second clause of s. 91, may regulate the business of insurance carried on by British companies as a branch of external trade and commerce, this does not give the Dominion authority to regulate their strictly provincial business; and it is my opinion that ss. 116, 117 and 118, if valid, do effect the regulation of such business. The general principle is well-settled and well-known. (The King v. Eastern Terminal Elevator Co., [1925], 3 D.L.R. 1, S.C.R. 484; A.-G. Can. v. A.-G. Ont., Reference re Weekly Rest in Industrial Undertakings Act etc., [1937], 1 D.L.R. 673, A.C. 326). The judgment of Lord Dunedin in the Insurance case of 1932 supra does not explicity deal with the provisions of the statute then under review that correspond with ss. 116, 117 and 118. Nevertheless, I think when that judgment is read as a whole its language points rather to the conclusion that, in the view of the great and lamented Judge who delivered it, these provisions stood in the same category as those relating to the forms of contracts and those governing transactions between an insurance company and its agents. It is not necessary, however, to consider whether this point is strictly ruled by Lord Dunedin’s judgment in the sense that these particular provisions were passed upon. The principle of exclusive provincial control of the business of insurance within the Province lies at the foundation of the judgment.
From this, it follows also that the corresponding enactments in the Foreign Insurance Companies Act 1932 (Can.), c. 47 are not intra vires. Those enactments, being legislation in relation to the business of insurance within the Province, are not (it flows from the reasoning of that judgment) alien legislation in the sense contemplated by the judgment in A.-G. Can. v. A.-G. Alta., 26 D.L.R. 288, [1916] 1 A.C. 588. On this point 1 think the words of Lord Dunedin in [1932] 1 D.L.R. at p. 105, A.C. at p. 51 are conclusive :
"‘What has got to be considered is whether this is in a true sense of the word alien legislation, and that is what Lord Haldane meant by ‘properly framed legislation.’ Their Lordships have no doubt that the Dominion Parliament might pass an Act forbidding aliens to enter Canada or forbidding them so to enter to engage in any business without a licence, and further they might furnish rules for their conduct while in Canada, requiring them, e.g., to report at stated intervals. But the sections here are not of that sort, they do not deal with the position of an alien as such; but under the guise of legislation as to aliens they seek to intermeddle with the conduct of insurance business, a business which by the first branch of the 1916 case has been declared to be exclusively subject to provincial law. Their Lord- ships have, therefore, no hesitation in declaring that this is not ‘properly framed’ alien legislation.’’
The case of extra-Canadian exchanges is not distinguishable. It follows that s. 16 is ultra vires.
It is perhaps unnecessary to add that nothing I have said is in any way inconsistent with the principle which precludes a Provinee from impairing by legislation the status and powers of a Dominion company.
The interrogatory referred to us should be answered ‘‘ Yes, in its entirety. ”