With possible airport privatization on the horizon for Canadian airports, and thanks to Liberal Transport Minister Marc Garneau’s recent promise to introduce legislation loosening restrictions on foreign investment in airlines, airports have become a hot topic in the media. However, airports can often seem like mini-cities unto themselves, where competing stakeholders are pitted against each other. Along with an airport come retail services, security concerns, diplomatic relationships, transportation needs, and zoning restrictions, just to name a few. Given the overlapping and often countering interests at play at an airport, it is often confusing to determine the governing regime.

The framing of powers is not just an academic argument. For example, several contractors involved with the 2012 Vancouver airport expansion infrastructure projects found out the hard way that their builders’ liens could not be enforced against the federal government. The decision in British Columbia (Attorney General) v. Vancouver International Airport Authority (see our October 2012 Blakes Bulletin: Provincial Builders’ Liens Do Not Apply to Core Federal Leases) is a good reminder for contractors and suppliers on airport infrastructure projects that they may not be protected by provincial builders’ lien legislation if their invoices go unpaid.

Given the above, before a governing body tries to get an airport regulation to take flight or a financier, supplier or contractor becomes involved with an airport project, it is prudent practice to first conduct a division of powers analysis.

COMPETING POWERS

The Constitution Act 1867 (Canada) (Constitution) is the framework for federalism within Canada; it allocates legislative power between the federal and provincial governments. Under the Constitution, the federal Parliament has jurisdiction over aeronautics, and the provincial government has jurisdiction over property and civil rights in the provinces. At an airport, these powers compete with one another.

The federal power to regulate aeronautics is embodied in the Aeronautics Act (Canada) (Act). A registered aerodrome (i.e., “any area of land, water (including the frozen surface thereof) or other supporting surface used, designed, prepared, equipped or set apart for use either in whole or in part for the arrival, departure, movement or servicing of aircraft and includes any buildings, installations and equipment situated thereon or associated therewith) is subject to the Act, as well as the Canadian Aviation Regulations promulgated pursuant to the Act. Regarding land use, Transport Canada Aviation (TCA) indicates that federal zoning regulations apply for federal airports, certified airports and airport sites in order to prevent uses of surrounding lands that are incompatible with airport operations. Such federal regulation requires reasonable attempts to come to agreement with the province on land use surrounding the airport. TCA has indicated that they agree that provincial regulation may apply to some operations on aerodrome lands to the extent that the activity is not integral to aeronautics. The determination of applicable provincial regulation is a legal one, and is not prescribed by TCA.

The test for determining the jurisdiction over an airport’s activities is the “interjurisdictional immunity” test. The two-pronged test requires the federal party relying on the immunity doctrine to show that the provincial regulation impacts the core of the federal power over aeronautics and that it impairs the core of that power. The jurisprudence suggests that the content of the core of federal power involves decisions relating to the location, design and operation of aeronautics undertakings. A finding of impairment is a fact-based determination. Based on the jurisprudence, a regulation that raises the cost of development, such as minimum wage requirements, would not impair the federal power. However, regulations that essentially prohibit aeronautics activity or development or impact safety of aviation operations, such as land use regulations, are more likely to impair the federal power. In order to attract the application of the immunity doctrine, a threshold issue will be whether or not the activity in question is in fact integral to aeronautics. The jurisprudence suggests that there is room for provincial regulation to operate where there is mixed use or where an activity is too remote to be considered integral to aeronautics.