Section 91(2) of the Constitution Act, 1867

Section 91(2) of the Constitution Act, 1867, also known as the trade and commerce power, grants the Parliament of Canada the authority to legislate on:

2. The Regulation of Trade and Commerce.

The development of Canadian constitutional law has given this power characteristics that are unique from those that are specified in the United States Constitution's Commerce Clause and the Australian Constitution's interstate trade and commerce power.

First examined in Citizen's Insurance Co. v. Parsons (1881), Sir Montague Smith of the Judicial Committee of the Privy Council determined its scope thus:

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Therefore, Parsons establishes three basic propositions about the trade and commerce power that have underlined all subsequent jurisprudence:

Initially the scope for extraprovincial trade was set very narrowly by the Privy Council. In the Board of Commerce case, the Privy Council suggested that the trade and commerce power applied only as an ancillary power to some other valid federal power. This principle was eventually rejected in Toronto Electric Commissioners v. Snider and Proprietary Articles Trade Association v. Attorney General of Canada, but the power was still read strictly.

In R. v. Eastern Terminal Elevator Co. (1925), a federal law regulating trade of provincially produced grain destined entirely for export was found not to be within the meaning of extraprovincial trade. As Duff J. (as he then was) noted in his opinion:

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