BANKING AND THE CONSTITUTION: UNTESTED LIMITS OF FEDERAL JURISDICTION

Abstract

This article examines the constitutional framework underpinning the Canadian financial system in relation to what the authors suggest are essentially untested limits of federal jurisdiction over banks and banking pursuant to section 91(15) of the Constitution Act, 1867. After raising the possibility that the constitutional framework in relation to banking can be otherwise explained by different textual bases in the Act of 1867, the authors turn to a consideration of present regulatory concerns emanating from both the significant bifurcation of jurisdiction governing Canadian financial institutions engaged in what can be described as the business of banking, and the failure of Parliament to define comprehensively banking undertakings in functional terms. The article then considers current perceptions on the constitutional limits of federal jurisdiction and discusses case law, which the authors observe is thus far indeterminate. Overall, the authors conclude that the status quo discloses a broad field of concurrent federal and provincial jurisdiction in relation to what could be functionally described as banks and banking activities; that potential remains for a reassertion of federal legislative competence, although gradually established fields of related provincial legislative competence may have modified the reach of federal regulatory authority in practical terms; and that, ultimately, the constitutional scope of banking jurisdiction is as much an affair for Parliament to resolve as it may be a problem for judicial resolution.