## Facts

- City National Leasing (CNL) leased fleets of vehicles across Canada and bought most General Motors (GM) vehicles through franchised dealers rather than directly from GM.
- From 1970 to 1980, CNL received “interest rate support” financing through a program offered via GMAC.
- CNL alleged GM provided “preferential” interest rate support to CNL’s competitors beyond what CNL received, effectively disadvantaging CNL in the market.
- CNL claimed this conduct constituted unlawful price discrimination under s. 34(1)(a) of the Combines Investigation Act (CIA) and sought damages under s. 31.1, which created a private civil cause of action for losses caused by specified CIA violations.
- GM moved to strike portions of the claim, arguing (i) s. 34(1)(a) did not apply absent direct sales by GM to CNL or competitors, (ii) s. 31.1 was beyond Parliament’s authority because it intruded into provincial property and civil rights, and (iii) s. 31.1 was not retroactive.
- The Ontario Court of Appeal held s. 34(1)(a) could apply despite lack of direct sales, but agreed in substance that s. 31.1 was constitutionally invalid and not retroactive.
- The Attorney General of Canada and multiple provinces intervened on the federalism questions.

## Issues

1. Whether the CIA, as a whole, is within Parliament’s general trade and commerce power under Constitution Act, 1867, s. 91(2).
2. Whether s. 31.1 (creating a private damages action) is within Parliament’s authority as part of, or ancillary to, a valid federal competition scheme, notwithstanding provincial jurisdiction over property and civil rights.
3. Whether s. 31.1 applies retroactively to conduct occurring before its coming into force.

## Decision

- The Supreme Court of Canada dismissed GM’s appeal and answered both constitutional questions in the affirmative.
- The CIA was upheld as valid federal legislation under the general branch of the trade and commerce power.
- Section 31.1 was upheld as constitutionally valid under the ancillary doctrine because it was sufficiently integrated into the federal competition scheme.
- The Court construed s. 31.1 as non-retroactive absent clear legislative intent to impose liability for pre-proclamation conduct.

## Legal Principles

- The federal “general trade and commerce” power supports legislation aimed at economy-wide regulation of trade and competition when the law forms part of a national regulatory scheme.
- A structured inquiry for the general trade and commerce branch considers whether:
  - the law is part of a general regulatory scheme;
  - the scheme is overseen by a regulatory agency;
  - the law concerns trade as a whole rather than a single industry;
  - provinces, alone or together, are constitutionally incapable of enacting the scheme; and
  - exclusion of a province would jeopardize successful operation elsewhere in the country.
- Under the ancillary doctrine, a provision that intrudes into provincial jurisdiction may be upheld if:
  - the intrusion is assessed for its extent; and
  - the provision is sufficiently integrated with a valid federal scheme so that the intrusion is justified.
- Creating a private civil remedy can be a valid enforcement mechanism when tightly linked to a constitutionally valid federal regulatory program.
- Statutes are presumed not to operate retroactively without clear legislative intent.

## Conclusion

The Court sustained federal competition regulation as a national economic scheme within the general trade and commerce power and upheld a private damages action as an ancillary enforcement measure, while rejecting retroactive application of the civil remedy absent clear statutory direction.


Gen. Motors of Can. Ltd. v. City Nat’l Leasing, [1989] 1 S.C.R. 641 (Can. 1989)