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The legal status of lottery schemes in Canada : changing the rules of the game Osborne, Judith Anne 1989

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THE LEGAL STATUS OF LOTTERY SCHEMES IN CANADA: CHANGING THE RULES OF THE GAME By JUDITH ANNE OSBORNE LL.B., The University of Edinburgh, 1977 M.A., The University of Toronto, 1978 A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF LAWS in THE FACULTY OF GRADUATE STUDIES (Faculty of Law) We accept t h i s thesis as conforming to the required standard Professor Michael A. Jackson Professor Dennis J . Pavlich THE UNIVERSITY OF BRITISH COLUMBIA August 1989 (c) Judith A. Osborne, 1989 In presenting this thesis in partial fulfilment of the requirements for an advanced degree at the University of British Columbia, I agree that the Library shall make it freely available for reference and study. I further agree that permission for extensive copying of this thesis for scholarly purposes may be granted by the head of my department or by his or her representatives. It is understood that copying or publication of this thesis for financial gain shall not be allowed without my written permission. Department of Q ^ p ^ < ^ Ql(=3 jL^&JA The University of British Columbia Vancouver, Canada Date 3gT)ftf/33-DE-6 (2/88) A B S T R A C T The term " l o t t e r y scheme" i s a generic one used i n the C r i m i n a l C o d e o f C a n a d a to encompass both true l o t t e r i e s and other games of chance. U n t i l 1969, the C r i m i n a l C o d e prohibited such gambling a c t i v i t i e s , with the exception of very small scale, occasional and private l o t t e r y schemes run for charitable purposes, and l o t t e r y schemes operated at a g r i c u l t u r a l f a i r s . This criminal p r o h i b i t i o n was a longstanding one which had existed i n Canada since before Confederation. Twenty years ago, however, the C r i m i n a l C o d e was amended to permit state-operated and state-licensed l o t t e r y schemes. As a consequence of t h i s relaxation of the criminal law, l e g a l i z e d gambling has, since the early 1970s, flourished and become firmly established i n Canadian society. In part, t h i s r e f l e c t s a general i n t e r n a t i o n a l trend; s i m i l a r developments have taken place i n the United States, A u s t r a l i a and Europe. In Canada, however, t h i s development occurred i n the absence of widespread public debate, p o l i t i c a l r a t i o n a l i z a t i o n or academic analysis. There i s not much known about how or why i t came about, i t s l e g a l v a l i d i t y , or what i t s implications are. This thesis addresses these neglected issues, provides some understanding of how the l e g a l status of l o t t e r y schemes was transformed i n 1969, why i t occurred and what its consequences have been. These aims are achieved through i i i an examination of f i v e d i s t i n c t but related research dimensions: l e g a l history, p o l i t i c a l process, l e g a l theory, c o n s t i t u t i o n a l law and administrative law. This study finds that what was a f a i r l y r a d i c a l change i n the rules regarding l o t t e r y schemes was achieved r e l a t i v e l y quickly, with a minimum of fuss and very l i t t l e i n the way of public discussion. I t was a s i l e n t transformation. This lack of debate i s at l e a s t p a r t l y responsible for the incoherent response on the part of some provinces, which soon took advantage of t h e i r a b i l i t y to conduct and manage l o t t e r y schemes, but d i d not appear to have an a r t i c u l a t e gaming control p o l i c y . I t i s shown that while there were well-established, p h i l o s o p h i c a l l y sound reasons for the removal of criminal sanctions from c e r t a i n gambling games, there were also p o l i t i c a l , s o c i a l and economic reasons which were equally i f not more important i n explaining i t s occurrence. These j u s t i f i c a t i o n s even overrode the l e g a l constraints of Canada's c o n s t i t u t i o n a l framework: the decriminalization of l o t t e r y schemes was achieved through a dubious interdelegation of powers between the federal and p r o v i n c i a l l e g i s l a t u r e s . Not only i s t h i s arrangement c o n s t i t u t i o n a l l y unsound, but i t also ignored the interests of an important segment of Canada's population: i t s aboriginal peoples. The r i g h t to conduct and control gaming on Indian lands i s the focus of a t r i - p a r t i t e j u r i s d i c t i o n a l struggle which w i l l l i k e l y soon force a re-examination of the l e g a l status l o t t e r y schemes i n Canada. V T A B L E OF CONTENTS A b s t r a c t i i I N T R O D U C T I O N 1 C H A P T E R O N E : A H I S T O R Y OF GAMING LAW I N CANADA 6 The New World 6 Gambling and the Law i n England 10 The Legal Status of Gambling i n Pre-Confederation Canada 21 Cofederation to C o d i f i c a t i o n 26 The Criminal Code of Canada 32 Tinkering With the Law 37 Revision and Reconsideration 47 C H A P T E R TWO: THE PROCESS OF D E C R I M I N A L I Z A T I O N 53 Prel iminary Manoevres 53 Government Proposals 58 The Federal-Provincial Struggle over Lo t t e r i e s 64 C H A P T E R T H R E E : THE C O N T R A C T I O N OF THE C R I M I N A L LAW 76 A Unique Enactment 76 The Legal Enforcement of Morality 79 Victimless Crime: the Limits of the Criminal Sanction 90 Making and Unmaking Criminal Law 96 C H A P T E R F O U R : L O T T E R Y SCHEMES AND THE C O N S T I T U T I O N 102 J u r i s d i c t i o n over Gambling 102 The Interdelegation of Power 112 Referential and Conditional L e g i s l a t i o n 122 C H A P T E R F I V E : I N D I A N GAMING 132 An Introduction to Indians and the Indian Act 134 Indian Gaming i n the United States 140 Indian Gaming Before the Courts 148 The Canadian Context: The Significance of Gaming on Reserves 160 Pr o v i n c i a l J u r i s d i c t i o n 168 Indian J u r i s d i c t i o n 180 C H A P T E R S I X : P R O V I N C I A L GAMING C O N T R O L : THE E X A M P L E OF B R I T I S H C O L U M B I A 190 P r o v i n c i a l Gaming Control 190 Models of Decriminalization 194 A Regulatory History of Gaming Control i n B r i t i s h Columbia 199 Statutory Authority to Regulate Gaming 207 Licensing Without Law 216 Remedies 223 vx CONCLUSIONS 239 BIBLIOGRAPHY 243 ACKNOWLEDGEMENTS I am gra t e f u l to Simon Fraser University for granting me a sabbatical leave which enabled me to pursue my studies. I would also l i k e to thank my friends and colleagues i n the School of Criminology at Simon Fraser University f o r t h e i r encouragement, support and use of the laser p r i n t e r . I would e s p e c i a l l y l i k e to thank Michael Jackson for agreeing to be my senior supervisor, despite h i s daunting workload. Above a l l , I would l i k e to thank Colin Campbell for piquing my in t e r e s t i n the topic and for being there. TO COLIN 1 INTRODUCTION This year marks the twentieth anniversary of the p a r t i a l decriminalization(1) of l o t t e r y schemes i n Canada. The term " l o t t e r y scheme" i s a generic one, used i n the Criminal Code of Canada(2) to encompass true l o t t e r i e s and other games of chance which, i n t h i s thesis, w i l l also be known as q u a s i - l o t t e r i e s . Section 207(4) of the Criminal Code, i n conjunction with s. 206(1), defines " l o t t e r y scheme" as "a game or any proposal, scheme, plan, device, contrivance or operation" which involves eit h e r disposing of any property by l o t s , cards, t i c k e t s , "or any mode of chance whatever"; disposing of any goods by a game of chance or a game of mixed chance and s k i l l i n which the contestant pays money or other valuable consideration; or inducing anyone to stake money or other valuable consideration "on the r e s u l t of any dice game, three-card monte, punch board, coin table or on the operation of a wheel of fortune". I t i s , therefore, despite i t s name, a l e g a l construct which encompasses much more than the true l o t t e r y scheme. 1 In t h i s thesis, "decriminalization" w i l l r e f e r to the repeal of laws that make cer t a i n forms of gambling i l l e g a l . The term " l e g a l i z a t i o n " w i l l r e f e r to state-operated or state-sanctioned gambling a c t i v i t i e s . This terminology i s adapted from the usage i n the report of the Twentieth Century Fund, Easy Money: Report of the Task Force on  Legalized Gambling (New York: T.C.F., 1974). 2 R.S.C. 1985, c. C-46. 2 Before the enactment of the C r i m i n a l L a w A m e n d m e n t A c t i n 1969,(3) the C r i m i n a l C o d e prohibited such gambling a c t i v i t i e s , with the exception of very small scale ( i . e . with a $50 p r i z e l i m i t ) , occasional and private l o t t e r y schemes run for charitable purposes and l o t t e r y schemes operated at a g r i c u l t u r a l f a i r s . This p r o h i b i t i o n was a longstanding one which had existed i n Canada since before Confederation. Nonetheless, twenty years ago, Parliament changed the rules to allow l e g a l i z e d gambling i n the form of l o t t e r y schemes. This amendment to the C r i m i n a l C o d e permitted the Government of Canada to conduct l o t t e r y schemes, but i t also allowed the provinces to conduct or authorize such schemes. For example, i t became lawful f o r a charitable or r e l i g i o u s organization "under the authority of a licence issued by the Lieutenant Governor i n Council of a province," to conduct and manage a l o t t e r y scheme i n that province.(4) More recently, l a t e i n 1985, Parliament divested the federal government of any capacity to conduct l o t t e r y schemes.(5) • The provinces now have sole j u r i s d i c t i o n . As a consequence of t h i s relaxation of the criminal law, l e g a l i z e d gambling has, since the early 1970s, 3 S.C. 1968-69, C.38, S.13. 4 C r i m i n a l C o d e o f C a n a d a , R.S.C. 1970, c. C-34, s . 1 9 0 ( 1 ) ( c ) . 5 T h e C r i m i n a l C o d e ( L o t t e r i e s ) A m e n d m e n t A c t , S.C. 1985, C. 52 . 3 flourished and become firmly established i n Canadian society. Right across the country, the opportunity to wager money on l o t t e r y t i c k e t s i s as close as the l o c a l corner store; i n western Canada, f a c i l i t i e s for playing bingo, blackjack and roulette are almost as convenient. In part, t h i s r e f l e c t s a general international trend. Similar developments have taken place i n the United States, A u s t r a l i a and Europe. In Canada, however, t h i s development took place i n the absence of widespread public debate, p o l i t i c a l r a t i o n a l i z a t i o n or academic analysis. There i s not much known about how or why i t came about, i t s l e g a l v a l i d i t y , or what i t s implications are. This i s somewhat sur p r i s i n g given the morally controversial nature of the subject matter: gambling has t r a d i t i o n a l l y been condemned for subverting the Protestant ethic that l i f e ' s rewards should r e s u l t from hard work and merit, not mere chance. The purpose of t h i s thesis, therefore, i s to address these neglected issues; to provide some understanding of how the l e g a l status of l o t t e r y schemes was transformed, why i t occurred, and what i t s consequences have been. Accordingly, the opening chapter surveys the roots of Canada's gaming laws i n English statutory enactments, t h e i r transplantation to the North American colonies and t h e i r evolution during the one hundred years following Confederation. Chapter Two examines the p o l i t i c a l process which produced the amendments to the Criminal Code and the lack of public debate which 4 attended them. These two sections, combined, provide a contextual understanding of the decriminalization of l o t t e r y schemes. The t h i r d chapter, which reviews the contributions of the philosophy and sociology of law to our understanding of the nature and scope of the criminal law, provides the t h e o r e t i c a l dimensions of the process. Having examined how and why the rules of the game were changed, the second part of the thesis i s devoted to an analysis of t h e i r most s i g n i f i c a n t l e g a l consequences. Chapter Four assesses the c o n s t i t u t i o n a l v a l i d i t y of the scheme that was adopted to permit the playing of l o t t e r i e s and games of chance. The Canadian constitution, as i t has been interpreted i n the courts, i s rather ambiguous regarding the categories of delegated, conditional and r e f e r e n t i a l l e g i s l a t i o n , which w i l l be shown to have implications for the status of the l o t t e r y scheme provision of the Criminal Code. In the succeeding chapter, another dimension of the c o n s t i t u t i o n a l issue i s addressed: the impact of the amendment on the powers of Canada's native peoples who, i n recent years, have begun to look to gambling as a much needed, independent, source of revenue. F i n a l l y , attention i s directed to the provincially-based regulatory structures which are . i m p l i c i t i n the federal decriminalization scheme. These structures represent a further expansion of administrative action i n contemporary Canadian society and t h e i r conformity with accepted 5 p r i n c i p l e s of administrative law i s assessed. In sum the f i n a l three chapters discuss the major consequences of the l e g a l transformation of l o t t e r y schemes.(6) The picture that emerges at the end of t h i s exercise i s of a l e g a l change s i g n i f i c a n t i n i t s own r i g h t and also i n terms of i t s broader impact, which received v i r t u a l l y no p r i o r consideration. I t has produced questions and controversies which remain to be resolved, by l i t i g a t i o n or l e g i s l a t i o n , more than two decades a f t e r the event. Undeniably, the l e g a l status of l o t t e r y schemes i n Canada has been transformed. This change of the rules i s , however, l e g a l l y problematic. 6 In t h i s second h a l f of the thesis, where reference i s made to the p r o v i n c i a l context, primary reference w i l l be to the s i t u a t i o n which pr e v a i l s i n B r i t i s h Columbia. 6 CHAPTER ONE A HISTORY OF GAMING LAW IN CANADA(1) The New World Gambling was not brought to Canada by European s e t t l e r s ; laws to pr o h i b i t and control gambling were. Recounting h i s f i r s t meetings with the North American Indians while anchored at Sainte-Croix, Jacques C a r t i e r noted the existence of premises used for the playing of games of chance, "where they gamble away a l l that they have, even the coverings of t h e i r nakedness. 1 1 (2) A French dignitary, v i s i t i n g the colony of New France i n 1606, commented on the gambling p r o c l i v i t i e s of the Micmac Indians:(3) I would add here, as to the practice of games of chance by our Savages, that they are so fond of i t that they sometimes gamble a l l that they possess, even t h e i r wives .... In a dish they put a number of beans coloured and painted on one side, and having stretched 1 The general terms "gambling" and "gaming" are often used as synonyms, as they are i n t h i s t h e s i s . S t r i c t l y speaking, however, not a l l gaming involves gambling, i . e . a game involving consideration, r i s k and a p r i z e . T r a d i t i o n a l l y , the l e g a l l y correct term i s "gaming", although gaming laws a c t u a l l y target gambling. For further discussion of gambling semantics see Campbell, "Gambling i n Canada" i n Jackson and G r i f f i t h s , Criminology i n Canada (Harcburt Brace Jovanovich, forthcoming). 2 Pouliot, La Grande Aventure de Jacques C a r t i e r (Quebec, 1934) p.65. 3 Lescarbot, History of New France (Toronto: The Champlain Society, 1911) p.389. 7 out a skin on the earth, they play on i t , slapping the skin with t h e i r dish, and by t h i s means the beans jump i n the a i r , and not a l l of them f a l l down on the coloured side, and herein l i e s the part of chance. And according to the gathering, they use a c e r t a i n number of reed stems which they give to the winner to keep the score. That gambling was widespread among the d i f f e r e n t Indian t r i b e s i s confirmed by the memoirs of Father Sagard who documented the importance of gaming i n the customs of the Huron Indians.(4) To the south, the aboriginal peoples of what became New England were described at the time of settlement by the c o l o n i a l governor as being "advanced gamblers".(5) Even i n the i s o l a t e d western reaches of the continent, anthropological and ethnological data confirm that the aboriginal inhabitants have p a r t i c i p a t e d i n gambling games since time immemorial.(6) I n i t i a l l y , the colonized Canadian t e r r i t o r i e s known as New France were subject to French law. In h i s extensive hi s t o r y of the l o t t e r y i n what i s now the province of Quebec, Labrosse describes two early enactments r e l a t i n g to the control of gambling, one emanating from France, the other from the l o c a l c o l o n i a l authority. The former, an ed i c t issued i n 1611 by Louis XIII, authorized raids on 4 Sagard, Le Grand Voyage au Pays des Hurons (Montreal: Les Amis de l ' H i s t o i r e , 1969) p.27. 5 Winslow, E. "Good News from New England" (London, 1624) c i t e d by Ashton, J . The History of Gambling i n England (New York: Burt Franklin, 1968. O r i g i n a l l y published, London: 1899) p.2. 6 e.g. Maranda, Coast S a l i s h Gambling Games (Ottawa: National Museums of Canada, 1984) . 8 gambling houses, ordering that "any person keeping a gambling den where cards or dice are played i n h i s house may be held responsible for the players' losses". Further, "judges may go there to seize the money, rings and jewels or other things exposed for play ... and d i s t r i b u t e the proceeds to the poor i n the hospitals". (7) The l a t t e r enactment, one of the f i r s t regulations promulgated by the Council of New France i n 1648, authorized the opening of a tavern i n Quebec City but directed the owner that "he s h a l l s u f f e r no scandal or drunkenness, or blasphemy or cursing nor any games of chance i n h i s house". (8) Despite such prohibi t i o n s , the early s e t t l e r s continued to indulge i n the gambling pastimes they had brought with them from Europe. According to the researches of one commentator, l o t t e r i e s i n p a r t i c u l a r were often used, with permission from the c o l o n i a l a u t h o r i t i e s , for poor r e l i e f and to finance large projects and gaming flourished "at a l l l e v e l s of society".(9) With the Treaty of Paris, 1763, which ceded the Franco-Canadian t e r r i t o r i e s to B r i t a i n , French law became ir r e l e v a n t . The Royal Proclamation of 17 63 replaced the e x i s t i n g French law with English law i n both c i v i l and 7 Labrosse, The Lottery: from Jacques C a r t i e r ' s day to  modern times (Montreal: Stanke, 1985) p.33. 8 Ibid at 34. 9 Labrosse, supra fn. 7 at 36, 45. 9 criminal matters. Although French c i v i l law was to be restored i n Quebec by the Q u e b e c A c t , 1 7 7 4 , the criminal law was not. A f t e r the colonies were separated into Lower and Upper Canada i n 1791 and given powers of l o c a l government,(10) the l e g i s l a t u r e of Upper Canada (now Ontario) chose to introduce English c i v i l law as of October 1792 and to advance the date of reception of English criminal law to September 1792.(11) Thereafter, the c o l o n i a l l e g i s l a t u r e s could augment the criminal law except insofar as such enactments were inconsistent with an Imperial law which by express words or necessary intendment was made applicable to the colonies.(12) In the eastern Canadian colonies, which were generally regarded to have been acquired by B r i t a i n by settlement rather than by conquest, the s e t t l e r s were considered to have brought with them the e x i s t i n g body of English law insofar as i t was suitable for l o c a l conditions. Reception of new English law continued u n t i l the colony was granted a l o c a l l e g i s l a t u r e . For Nova Scotia, New Brunswick and Prince Edward Island t h i s was to be the l a t t e r h a l f of the 18th century. In Newfoundland a l e g i s l a t i v e assembly was granted i n 1832. The dates of reception for western and northern 10 T h e C o n s t i t u t i o n a l A c t , 1 7 9 1 , 31 Geo.Ill, c.31. 11,40 Geo.Ill, c . l , s . l (U.C.) (1800) . 12 T h e C o l o n i a l L a w s V a l i d i t y A c t , 1 8 6 5 28 & 29 V i c t . , c.63 (Imp.) c l a r i f i e d the a p p l i c a b i l i t y of Imperial and Colonial enactments i n instances of c o n f l i c t . 10 Canada were natu r a l l y l a t e r : 1858 f o r B r i t i s h Columbia and 1870 f o r the p r a i r i e provinces and the northern t e r r i t o r i e s . ( 1 3 ) Thus, English criminal law was to provide the foundations for the development of a Canadian criminal law. Accordingly, i t i s to a b r i e f examination of the English criminal law pertaining to gambling and l o t t e r i e s that t h i s chapter now turns. Gambling and the Law i n England English law i s , of course, v i r t u a l l y synonymous with the term "common law" i . e . law which consists of the accumulated wisdom of centuries of j u d i c i a l decisions rather than being created by l e g i s l a t i v e enactment. As Colvin notes, English criminal law i n the 18th and 19th centuries was l a r g e l y a matter of common law, constructed through j u d i c i a l precedents.(14) The criminal law r e l a t i n g to l o t t e r i e s and gambling, as well as to betting and wagering, that i s , gaming i n general, i s , however, one of the few areas having a la r g e l y statutory genesis. 13 For a more det a i l e d discussion of the reception of English law i n Canada see Cote, "The Reception of English Law", (1977) 15 Alberta Law Review 29. 14 Colvin, P r i n c i p l e s of Criminal Law (Toronto: Carswell, 1986) p.3. 11 Indeed, i t i s a widely c i r c u l a t e d axiom that, at common law, a l l games were lawful except, perhaps, cockfighting.(15) Like most l e g a l aphorisms, however, i t s s i m p l i c i t y i s deceptive. I t i s perhaps more accurate to say that, at common law, the mere playing of games was lawful, but gaming which ran the r i s k of a breach of the peace, or other public nuisance was unlawful. In other words, although gaming per se was not viewed as unlawful, i t s c o l l a t e r a l consequences often were.(16) Accordingly, keeping a common gaming house was an offence at common law,(17) and Bacon states that excessive gaming was also unlawful:(18) I t seems that by the common law the playing of cards, dice etc., when practised innocently and as a recreation, the better to f i t a person for business, i s not at a l l unlawful nor punishable as any offence whatsoever .... from the destructive consequences of excessive gaming, both the Courts of law and equity have shown an abhorrence of i t . 15 e.g. Halsbury's Laws of England 4th ed.(London: Butterworths, 1973) Volume 4: Betting Gaming and Lo t t e r i e s , para. 7; Fagan, "The Enforcement of Gaming Debts i n B r i t a i n " , (1986) New York Journal of International and  Comparative Law 7. 16 U.S Department of Jus t i c e . L.E.A.A. The Development of  the Law of Gambling 1776-1976 (Washington D.C: U.S. Pri n t i n g O f f i c e , 1977) p.4. 17 Blackstone, Commentaries on the Laws of England (Philadelphia: Rees Welsh, 1899) Book IV, p.1572. Blackstone c l a s s i f i e s keeping a common gaming house as a public nuisance, an offence against "the public health and the public p o l i c e or oeconomy". 18 Bacon, Abridgement 7th ed. (London: Strahan, 1832) Vol. IV, p. 17. In The Case of the Monopolies (1603) 11 Co.Rep. 84; 77 Eng. Rep. 1260, the Court, i n an obite r comment remarked that "immoderate play" was contrary to the common law. 12 In h i s t r e a t i s e of the law of gaming, (19) Street devotes much of h i s e f f o r t s to challenging the persuasive s i m p l i c i t y of the notion that, at common law, a l l games were lawful, which has been adopted i n some j u d i c i a l decisions.(20) For example, he notes that the e a r l i e s t statute directed towards gaming, passed i n 1388,(21) provided that labourers and serving men s h a l l have bows and arrows and "leave tennis, f o o t b a l l , c o i t s , dice, casting of stone k a i l e s , and other such importune games". A class of games was thus known as "importune" at t h i s date. Accordingly, Street concludes, t h e i r character was determined by t h e i r harmfulness to the state and that t h i s statute was declaratory and not i n derogation of the common law.(22) This p o s i t i o n supports the argument made elsewhere that, u n t i l the early 1700s, i t was generally accepted that Parliament could not modify the basic p r i n c i p l e s of the common law and that early English statutes simply embodied i t , rather than overruling it.(23) Although t h i s issue of the status of gaming at common law i s fascinating, i t i s ultimately of l i t t l e relevance for the law of gaming. Even 19 The Law of Gaming (London: Sweet and Maxwell, 1937). 20 e.g. Jenks v. Turpin (1884) 13 Q.B.D. 505 at 516, 523 per Hawkins J . 21 12 Rich.II, c.6. 22 Street, supra fn. 19 at 5. 23 U.S. Department of Justice, supra fn. 16 at 3-4. 13 Street himself agrees that the law of gaming i s l a r g e l y a creature of statute.(24) Although the e a r l i e s t statute was, as was noted above, passed i n 1388, and arose from a perceived m i l i t a r y necessity as gaming apparently interfered with the pursuit of the martial arts, there were e a r l i e r , ordinances directed towards gaming. In h i s History of Gambling i n England Ashton points out that an edict was promulgated i n 1190 f o r the regulation of the C h r i s t i a n army under the command of Richard I and P h i l i p of France during the Crusade. I t prohibited any person i n the army, beneath the degree of knight, from playing at any sort of game for money. Knights and clergymen could play for money, but were not permitted to lose more than 20 s h i l l i n g s i n a 24 hour period. The two monarchs had the p r i v i l e g e of playing for whatever sums they pleased. (25) Like much of the l e g i s l a t i o n which was to succeed i t , t h i s m i l i t a r y decree attempted to proscribe gambling among the lower orders.(26) Reviewing the l e g i s l a t i o n of the Tudor and Stuart monarchs, Holdsworth comments that the medieval ideas as to the need for separate rules for the d i f f e r e n t s o c i a l classes 24 Street, supra fn.19 at (v). 25 Ashton, supra fn. 5 at 13. 26 e.g. 12 Rich.II, c.6 (1388) was directed at "labourers and serving men" and 17 Edw.IV, c.3 (1477) forbidding common gaming houses was directed at the veterans of the newly disbanded army. 14 were s t i l l recognized and enforced. Food and dress were s t i l l regulated with some minuteness "and games and pastimes which unprofitably occupied the time needed f o r m i l i t a r y t r a i n i n g , were prohibited".(27) A key example of t h i s i s Henry VIII's statute of 1541, An A c t e f o r Maytenence o f A r t y l l a r i e and d e b a r r i n g e o f u n l a w f u l Games.(28) A l l previous gambling enactments were amalgamated i n t h i s Act which enacted that: no manner of a r t i f i c e r , or craftsman of any handicraft or occupation, husbandman, apprentice, labourer, servant at husbandry, journeyman, or servant at a r t i f i c e r , mariners, fishermen, watermen, or any serving man, s h a l l from the said feast of the N a t i v i t y of St. John the Baptist, play at the tables, tennis, dice, cards, bowls, clash, coyting, logating, or any unlawful game, out of Christmas.... I t also made i t unlawful to maintain a house or place of dic i n g , carding or other gambling. Thus, although a game might not have been i l l e g a l p e r s e , i l l e g a l i t y attached i f i t were played for money i n public or i n a gaming house. This confirmed an important d i s t i n c t i o n between public gaming and gaming i n private. This l e g i s l a t i o n was to remain one of the central enactments for the control of gaming u n t i l 1845 when i t was repealed and p a r t i a l l y re-enacted by the Gaming Act.(29) In the intervening years, the e f f o r t s of Parliament were directed at proscribing new games which 27 Holdsworth, A History of English Law (3d ed.) (London: Methuen, 1966. F i r s t published, 1924) Vol.4, Book IV p.304. 28 33 Hen.VIII, c.9 (1541). 29 8 & 9 V i c t . , C.74. 15 appeared with regularity,(30) at the e f f e c t s of gambling among the upper classes, and at l o t t e r i e s . A f t e r the Restoration, gambling became increasingly popular among the aristocracy. In h i s study of the s o c i a l and l e g a l h i s t o r y of gaming from 1660 to 1845, Miers notes that although i t was e f f e c t i v e l y suppressed by Cromwell, the Restoration brought with i t the phenomenon of xdeep gaming', that i s , "continuous gaming over prolonged periods of time for high stakes, usually cash or s e c u r i t i e s on land".(31) This development had serious consequences i n what was e s s e n t i a l l y a land-based society. I t resulted i n large transfers of wealth, uncontrolled exchanges of mortgages, bonds, conveyances and other s e c u r i t i e s . As Blackstone observes, "among persons of superior rank [gaming] hath been frequently attended with the sudden ruin and desolation of ancient and opulent families".(32) The e a r l i e r concern with the e f f e c t s of gambling on m i l i t a r y readiness was replaced by a focus, on i t s consequences for the propertied classes. 30 e.g. 12 Geo.II, c.28 (1739) prohibited ace of hearts, pharoah, basset and hazard. A year l a t e r , 13 Geo.II, c.19 (1740) prohibited a l l games involving dice, except backgammon. 31 Miers, "A S o c i a l and Legal History of Gaming: From the Restoration to the Gaming Act, 1845", (Unpublished paper presented at the meeting of the West Coast Law and Society group, Simon Fraser University, Burnaby B.C., May, 1988) p. 4. 32 Supra fn. 17 at 170. 16 This provoked l e g i s l a t i o n aimed at cheating at play which was apparently widespread,(33) and at excessive gambling. Unlike the enactments directed at gambling among the lower classes, however, these provisions were l a r g e l y c i v i l i n nature. An Act against d e c e i t f u l , d i s o r d e r l y and excessive gaming was passed i n 1664.(34) I t provided that the v i c t i m of cheating or fraud could sue f o r three times the sum l o s t , sharing the sum so recovered with the Crown. I f the v i c t i m f a i l e d to sue within s i x months of the loss, then during the next year "any person" was permitted to sue i n h i s place and recover the loser's share as a reward. I t further declared that a l l s e c u r i t i e s i n excess of one hundred pounds s t e r l i n g for gaming debts incurred "at any one time or meeting" were void and unenforceable. These provisions were strengthened i n 1710 by An Act f o r better preventing of excessive and d e c e i t f u l gaming,(35) which set out what were to be the standard p r i n c i p l e s regarding gambling contracts and debts i n English c i v i l law. A l l notes, b i l l s and s e c u r i t i e s r e l a t i n g to gambling debts were void; anyone lo s i n g ten pounds s t e r l i n g or more could sue and the premium for fraud was increased to f i v e times the sum so acquired. 33 Miers, supra fn. 31 at 7. 34 16 Car.II, c.7 (1664). 35 9 Anne c.14 (1710). 17 As to the success of these measures, Miers observes,(36) These provisions are, given the conditions for the creation and enforcement of the law at the time, remarkable and imaginative ways of coping with a serious problem, but they do not appear to have enjoyed complete success. Starting from the premiss that card-playing or d i c i n g were themselves u n l i k e l y to diminish without some external pressure, the l e g i s l a t i v e t a c t i c was simply to make i t f i n a n c i a l l y unattractive to gamble on t h e i r outcome .... But these emasculating provisions also had a l i b e r a t i n g e f f e c t , since for the purposes of gambling transactions, money or i t s surrogates assumed a f i c t i t i o u s q u a l i t y : they f a c i l i t a t e d the gaming without t r a n s f e r r i n g anything of value between the players. The s c a r c i t y of actions .... suggests that, for many, gaming losses were indeed met as a matter of honour; the protection afforded to s e c u r i t i e s , on the other hand, does appear to have been a success. Although there were many who were ruined by deep gaming, t h i s ruination did not i n e v i t a b l y r e s u l t i n the wholesale transfer of r e a l property. S i m i l a r l y , i t was Blackstone's assessment that, although the l e g i s l a t i o n directed towards gaming was copious, i t met with l i t t l e success due mainly to the p r e v a i l i n g p ublic sentiment regarding such pastimes and the e f f o r t s of "our magistrates i n putting those laws i n execution".(37) Indeed, a survey conducted by a Select Committee of the House of Lords found that between 1662 and 1843 there were only 116 t r i a l s of unlawful games, and 44 actions on the e n f o r c e a b i l i t y of securities.(38) 36 Supra fn. 31 at 7-8. 37 Supra fn. 17 at 173. 38 Great B r i t a i n . House of Lords Select Committee on the Laws Respecting Gaming, Reports (London, 1844). 18 Regarding the li m i t e d u t i l i t y of l e g i s l a t i v e attempts to eradicate gambling, Holdsworth postulates that i t i s "the natural i n s t i n c t of mankind to gamble and bet". Accordingly, the most that can be achieved by l e g i s l a t i o n i s that excessive gambling should be made more d i f f i c u l t . He continues on a prophetic note,(39) Moreover, i f , as i n these cases of gambling and betting and drinking, practices e x i s t which are not per se immoral, and are so deeply rooted i n man's nature that they cannot be wholly suppressed, i t i s legitimate for the state to make some p r o f i t for i t s e l f by permitting t h e i r indulgence at a p r i c e . " F i n a l l y , he laments the abandonment of state l o t t e r i e s , for, by the time he was chronicling the h i s t o r y of English law, private and public l o t t e r i e s had been abolished, l a r g e l y due to the widespread fraud and corruption attending them. His po s i t i o n , which was to be ultimately accepted i n Canada, though not i n B r i t a i n , was that state l o t t e r i e s would be no worse than the e v i l s of i l l i c i t l o t t e r i e s and "at l e a s t the p r o f i t s accruing would be devoted to worthy causes".(40) Private l o t t e r i e s were not unknown i n England i n the l a t e Middle Ages, but they were forbidden by Royal proclamation as early as 1621.(41) The f i r s t s tate-authorized l o t t e r y was launched i n 1566 i n order to finance 39 Holdsworth, supra fn. 27 at 542. 40 Ibi d at 543. 41 Street, supra fn. 19 at 205. 19 the repair of harbours and other public works projects.(42) L o t t e r i e s quickly came to be viewed as a form of monopoly within the Royal Prerogative, hence the p r o s c r i p t i o n of private schemes. A l o t t e r y could only be run a f t e r i t s promoters had secured a patent from the Crown. Other early l o t t e r i e s were used for such projects as the V i r g i n i a plantations and improving the London water supply. They performed the function of modern-day taxation. In 1699 a l l l o t t e r i e s were declared to be public nuisances and were subject to a blanket p r o h i b i t i o n . In the future, the only permitted l o t t e r i e s would be those authorized by an Act of Parliament.(43) Using t h i s power, state l o t t e r i e s were revived i n 1710 and, except from 1814-1819, they were held annually u n t i l 1823 when they were f i n a l l y abolished by the Lott e r i e s Act, 1823.(44) They had become the target of growing c r i t i c i s m from both inside and outside of government. Writing i n 1776, the economist Adam Smith denounced the l o t t e r y as an inherently l o s i n g venture for the participants:(45) The chance of gain i s by every man more or less overvalued, and the chance of loss i s by most men undervalued ... that the chance of gain i s natu r a l l y 42 This f i r s t state l o t t e r y i s discussed extensively i n Ashton, supra fn. 5 at 222-224. 43 L o t t e r i e s Act 10 & 11 W i l l . I l l , c.17. 44 4 Geo.IV, c.60. 45 The Wealth of Nations (New York: The Modern Library, 1937) pp. 107-108. 20 overvalued, we may glean from the universal success of l o t t e r i e s . The world never saw, nor ever w i l l see a p e r f e c t l y f a i r l o t t e r y ; or one i n which the whole gain compensated for the whole lo s s ; because the undertaker would make nothing by i t .... The more t i c k e t s you [wager].. .upon, the more l i k e l y you are to be a loser. Buy them a l l and you are sure to lose. A House of Commons Committee, which was appointed i n 1808 to study l o t t e r i e s , concluded that "the foundation of the l o t t e r y system i s so r a d i c a l l y v i c i o u s , that your Committee f e e l convinced that under no system of regulations, which can be devised, w i l l i t be possible to adopt i t as an e f f i c a c i o u s source of revenue, and, at the same time, divest i t of a l l the e v i l s which i t has, hitherto, proved so baneful a source".(46) Afte r some delay, Parliament f i n a l l y acted on the Committee's recommendation to abolish l o t t e r i e s i n B r i t a i n and they have never been reinstated there. By the end of the 18th century, therefore, when the Canadian c o l o n i a l l e g i s l a t u r e s were beginning to enact t h e i r own laws, b u i l d i n g on the received English criminal law, there was a well-established, though not wholly e f f e c t i v e t r a d i t i o n of p r o h i b i t i n g gambling i n i t s various forms at common gaming houses, and public l o t t e r i e s were f a l l i n g into disfavour. 46 Cited by Ashton, supra fn. 5 at 238. 21 The Legal Status of ftamhiing i n Pre-Confederation Canada In Lower Canada (Quebec) there was an attempt i n the early 1800s to reinforce the imperial p r o h i b i t i o n of gambling i n common gaming houses. An Act More E f f e c t i v e l y to Provide f o r the Regulation of the Police i n Quebec, Montreal and Troi s - R i v i e r e s etc.(47) empowered l o c a l j u s t i c e s of the peace to impose penalties on "the pernicious v i c e of gaming which has become extremely prevalent i n public houses". In a curious echo of e a r l i e r English l e g i s l a t i o n , these a n t i -gambling provisions were directed at any gaming i n any house, out-house, apartment or ground belonging to or i n h i s or her occupation, f o r money liq u o r or otherwise, either with cards, dice, draughts, shuffle-board, s k i t t l e s , nine-pins, or with any other implement or i n any other manner of gaming, by any  journeyman. apprentice. labourer or servant (emphasis added). After Upper and Lower Canada were amalgamated into the Province of Canada under the Union Act, 1840, the l e g i s l a t u r e , i n what was e s s e n t i a l l y a l i q u o r l i c e n s i n g statute, enjoined "the keeper of every licensed inn ... or other house or place of public entertainment" to keep a "peaceable, decent and orderly" house and not to allow any person "to play any game whatsoever at which money or any thing which can be valued i n money s h a l l be won or l o s t " . The terms of gambling prohibitions were becoming much broader, i n that any game involving money was proscribed. At the same time, t h e i r geographical scope was also expanding. 47 57 G e o . I l l , c.16 (1817) (Lower Canada). 22 Regarding l o t t e r i e s , the s i t u a t i o n was more complex. Under received English law, l o t t e r i e s were a public nuisance unless authorized by the Crown. F a i r l y frequent resort was made to these enabling powers. In 1783, f o r example, Governor General Haldimand approved a p e t i t i o n from the l e g i s l a t i v e council of Lower Canada seeking permission to organize a l o t t e r y to ra i s e funds to b u i l d a prison i n Montreal. Over 4,500 pounds net was raised for t h i s project through the lottery.(48) In 1819, the l e g i s l a t u r e of Nova Scotia passed an Act authorizing a l o t t e r y to r a i s e money to b u i l d a bridge over the r i v e r Avon.(49) The c o l o n i a l governments found themselves having to r e l y on l o t t e r i e s f or much the same reason as England had had to i n the 16th and 17th centuries: there was no alternate source of public funding. In a new country with few sources of c a p i t a l , there 48 Labrosse, supra fn. 7 at 57 quotes from a l e t t e r sent by Haldimand to Lord North i n London i n which he states, "I had some reluctance to give my assent to the Ordinance for r a i s i n g by a l o t t e r y a sum of money for the purpose of bui l d i n g a prison at Montreal, but as a prison was necessary as I think i t was very unjust that the money of the B r i t i s h nation should be employed i n providing l o c a l conveniences for the inhabitants of t h i s province, I gave my assent to i t . " 49 1819 Nova Scotia Statutes at Large v.3,(1817-1826). As early as 1781, the Lieutenant Governor of the province had authorized the r a i s i n g of funds by l o t t e r y f or the bu i l d i n g of a public school i n Halifax. The text of t h i s royal proclamation i s set out i n f u l l i n Canada. House of Commons Debates (1934) 5th Sess. 17th Pa r i . Vol. I l l p, 3308. 23 was l i t t l e choice but to r a i s e money for public works by t h i s method.(50) I t has been noted that, i n the American colonies, one of the primary functions of l o t t e r i e s was to provide a way fo r i n d i v i d u a l s to dispose of property i n the face of a chronic currency shortage. I t was d i f f i c u l t to f i n d buyers with enough cash to purchase a large item which resulted i n houses and r e a l property being disposed of through private lotteries.(51) The evidence available suggests that the s i t u a t i o n was no d i f f e r e n t i n the Canadian colonies. Certainly, the i n i t i a l d i s t r i b u t i o n of land to s e t t l e r s was often done by l o t . For example, a government study of land settlement i n Upper Canada i n the post-Revolutionary War era describes the allotment of land to L o y a l i s t s and ex-military men as follows:(52) The procedure i n a c t u a l l y a l l o c a t i n g these lands was very simple . . . Where a surveyor placed a number of s e t t l e r s together on the land, they drew l o t s for t h e i r respective s i t e s . A f t e r twelve months' occupation, the holder of a c e r t i f i c a t e was considered e n t i t l e d to a permanent deed. 50 A s i m i l a r s i t u a t i o n prevailed i n the American colonies where many famous public i n s t i t u t i o n s such as Columbia, Harvard and Yale u n i v e r s i t i e s were established by funds raised through l o t t e r i e s : U.S. Department of J u s t i c e , supra fn. 16 at 75. 51 Weinstein and Deitch, The Impact of Legalized Gambling:  The Socio-Economic Consequences of Lo t t e r i e s and Off-Track  Betting (New York: Praeger, 1974) p. 8. 52 Ontario Department of Archives, Sixteenth Report: Land  Settlement i n Upper Canada 1783-1840 (by G.C. Paterson) (Toronto: King's Printer, 1921. 24 S i m i l a r l y , i n describing the settlement of c e r t a i n parts of Upper Canada, G u i l l e t notes that i n Glengarry County, for example, each township was assigned to a corps, the l o t s were then numbered and placed i n a hat and each s o l d i e r i n turn drew h i s grant.(53) I t was a short step from d i s t r i b u t i n g land by l o t to disposing of i t by l o t t e r y , which, s t r i c t l y speaking, was i l l e g a l under imperial law. Many s e t t l e r s d i d not remain long on t h e i r i n i t i a l grants of land, r e l i n q u i s h i n g them almost immediately. Again, the shortage of cash made l o t t e r i e s a popular method for disposing of land. Further, gambling i n land grants was established very early i n Canada.(54) Accordingly, i n 1856, the L e g i s l a t i v e Assembly of United Canada passed An Act for the Suppression of Lotteries.(55) The preamble asserted the d e s i r a b i l i t y of pr o h i b i t i n g "the practice of s e l l i n g lands, goods and chattels by l o t or chance". Without exception, the Act forbade the sale, barter, exchange or other method of disposal of any property "by l o t s , t i c k e t s , or any mode of chance whatever". Any l o t t e r y transaction was declared void, and the property involved f o r f e i t e d "to such person as s h a l l 53 G u i l l e t , Early L i f e i n Upper Canada (Toronto: University of Toronto Press, 1963, reprinted from 1933) p. 38. 54 Ibid at 53, 342. G u i l l e t notes that land grants were often wagered at horse races i n the "backwoods settlements" of Richmond, Perth and Bytown. 55 S.C. 1856, c.49; Can. Consol. Stat. 1859, c.95. 25 sue for the same by action" though no such f o r f e i t u r e could a f f e c t the r i g h t or t i t l e of a bona f i d e purchaser for value.(56) I t s terms were absolute. One commentator notes that these measures emanated from a l e g i s l a t u r e dominated by English, Protestant p o l i t i c i a n s who chose to override the interests of the French Catholic clergy which, for decades had been financing "good works" through l o t t e r i e s and bazaars.(57) Within four years, however, the t o t a l p r o h i b i t i o n was relaxed to permit r a f f l e s for p r i z e s of small value i . e . not exceeding $50, at bazaars held for charitable objects, as long as the permission of the municipality was f i r s t obtained.(58) Thus, the l e g i s l a t i v e assembly e x p l i c i t l y established a scheme which, with minor modifications, was to remain i n place f o r over a century: the p r o h i b i t i o n of a l l l o t t e r i e s and other games of chance with the exception of small-scale charitable operations under municipal control. 56 In 1864 l e g i s l a t i o n was enacted to make c l e a r that land which had been acquired by l o t t e r y or chance p r i o r to the 1850 l e g i s l a t i o n would not be disturbed: An Act to Quiet T i t l e s to Certain Properties Sold by Lot S.C. 1864, c.32. 57 Labrosse, supra fn. 7 at 82. An American commentary notes that Catholics have t r a d i t i o n a l l y been the r e l i g i o u s group le a s t opposed to gambling, with t h e i r o f f i c i a l p o s i t i o n being one of acceptance i f moderation i s practiced and fraud i s not involved: Weinstein and Deitch, supra fn. 51 at 8. Over the next one hundred years, the Catholic Church and the la r g e l y Catholic population i n Quebec would be consistently supportive of l o t t e r i e s . 58 An Act to Amend Chapter 95 of the Consolidated Statutes of Canada etc. S.C. i860, c.36. 26 Confederation to C o d i f i c a t i o n In 1867, the B r i t i s h North America Act(59) united the provinces of Nova Scotia, New Brunswick and Canada (Quebec and Ontario) "under the name of Canada". The other regions of Canada joined the union at various points between 1871 ( B r i t i s h Columbia) and 1949 (Newfoundland). A federal system was adopted for the Dominion of Canada, which made the d i s t r i b u t i o n of powers between the central and p r o v i n c i a l l e v e l s of government a key element of the 1867 Act.(60) For present purposes i t i s important to note that s.91(27) of the Act grants the federal Parliament the exclusive power to l e g i s l a t e i n r e l a t i o n to criminal law and procedure. As well, Parliament has the residual power to secure the peace, order and good government of Canada. The p r o v i n c i a l l e g i s l a t u r e s , on the other hand, have j u r i s d i c t i o n over property and c i v i l r i g h t s i n the province (s.92(13)) and a residuary power over matters of a merely l o c a l or private nature i n the province (s.92(16)). Consequently, the criminal p r o h i b i t i o n of gambling and l o t t e r i e s was a matter for the federal government of Canada. Nonetheless, i n the 59 30 & 31 Vict.,c.3.This statute i s now known as the Constitution Act, 1867. 60 For a more det a i l e d discussion of the B r i t i s h North America Act and Canadian federalism, see Hogg, Constitutional Law of Canada (Toronto: Carswell, 1977) chaps. 2-3. 27 years immediately following Confederation, p r o v i n c i a l l e g i s l a t u r e s continued to l e g i s l a t e i n r e l a t i o n to gambling. P r o v i n c i a l enactments o r i g i n a t i n g i n Nova Scotia and Ontario were designed to repress gambling. For example, i n l e g i s l a t i o n protecting public morals, the Nova Scotia l e g i s l a t u r e penalized keeping a common gaming house as well as running or taking part i n a l o t t e r y or raffle.(61) Ontario targeted gambling i n i t s l i q u o r l i c e n s i n g and Sunday observance l e g i s l a t i o n . The former penalized a l i c e n s e -holder who permitted gambling on the premises,(62) and the l a t t e r forbade gambling with dice, foot and horse races on Sundays.(63) These developments resulted p a r t l y from the fact that i t took the federal government almost ten years to produce l e g i s l a t i o n directed towards gambling and p a r t l y from the overlap between gambling and other a c t i v i t i e s , such as l i q u o r control, which were within p r o v i n c i a l j u r i s d i c t i o n . L e g i s l a t i o n enacted i n Quebec, by comparison, was q u a l i t a t i v e l y d i f f e r e n t i n that i t was permissive i n nature. An A c t t o Amend t h e Laws R e s p e c t i n g B a z a a r s and L o t t e r i e s 61 R.S.N.S. (5th ser.) 1884, c.160. 62 The L i q u o r L i c e n s e A c t R.S.O. 1887 c.194, s.73. 63 The L o r d ' s Day A c t R.S.O. 1887, c.203. P r o v i n c i a l Sunday observance l e g i s l a t i o n was declared to be u l t r a v i r e s i n A t t o r n e y G e n e r a l o f O n t a r i o v. H a m i l t o n S t r e e t R a i l w a y [1903] A.C. 524 (P.C.) and was replaced by a s i m i l a r federal enactment. 2 8 p a s s e d b y t h e Q u e b e c l e g i s l a t u r e i n 1 8 6 9 , ( 6 4 ) e x p a n d e d t h e e x c e p t i o n s t o t h e Suppression of Lott e r i e s Act, 1856 f o u n d i n t h e Act o f 1 8 6 0 . T h e p r i n c i p l e s e c t i o n r e a d s , N o t w i t h s t a n d i n g e v e r y p r o v i s i o n t o t h e c o n t r a r y ... w h e n e v e r i t i s i n t e n d e d t o h o l d a b a z a a r o r l o t t e r y , t h e o b j e c t w h e r e o f i s t o a s s i s t i n t h e c o n s t r u c t i o n o r s u p p o r t o f a n y c h u r c h , c h a p e l , o r o t h e r r e l i g i o u s b u i l d i n g , o f a n h o s p i t a l , o f a n a s y l u m , o r a n y c h a r i t a b l e e s t a b l i s h m e n t w h a t e v e r , o r o f a n y e d u c a t i o n a l e s t a b l i s h m e n t , o r o f a c o l o n i z a t i o n s o c i e t y , w i t h i n t h e l i m i t s o f t h i s p r o v i n c e , o r t o a i d i n t h e p a y m e n t o f t h e d e b t t h e r e o f , s u c h b a z a a r o r l o t t e r y m a y t a k e p l a c e w i t h o u t a n y r e s t r i c t i o n a s t o a m o u n t ; p r o v i d e d t h e t h i n g s o f f e r e d o r t o b e d i s p o s e d o f b y l o t t e r y d o n o t c o n s i s t o f s u m s o f m o n e y , n o t e s , b a n k - n o t e s , b o n d s , d e b e n t u r e s o r o t h e r n e g o t i a b l e s e c u r i t i e s o f l i k e n a t u r e . T h e t e r m s o f t h i s a m e n d m e n t a r e u n d e n i a b l y b r o a d . A c c o r d i n g t o o n e o b s e r v e r i t r e s u l t e d f r o m t h e r e s t o r a t i o n o f a n a u t o n o m o u s l e g i s l a t u r e i n Q u e b e c w h i c h w a s s t r o n g l y i n f l u e n c e d b y t h e C a t h o l i c C h u r c h . T h e e l i m i n a t i o n o f t h e $ 5 0 r e s t r i c t i o n o n t h e v a l u e o f p r i z e s f a c i l i t a t e d t h e c r e a t i o n o f h u g e l o t t e r i e s r u n b y t h e C h u r c h : ( 6 5 ) Q u e b e c t h u s d i s s o c i a t e d i t s e l f c l e a r l y f r o m t h e l a w s t h a t c o n t i n u e d t o p r e v a i l i n t h e o t h e r p r o v i n c e s o f t h e n e w C o n f e d e r a t i o n , a l l o f w h i c h s t r i c t l y o b s e r v e d t h e r e s t r i c t i v e l a w o f 1 8 6 0 , r i g h t d o w n t o t h e y e a r 1 9 7 0 . B y 1 8 7 5 t h e P a r l i a m e n t o f C a n a d a h a d b e g u n t o d i r e c t i t s a t t e n t i o n t o w a r d s g a m b l i n g . I t s f i r s t t a r g e t w a s a t r a d i t i o n a l o n e : c o m m o n g a m i n g h o u s e s . T h e Suppression of Gaming Houses Act p r e s c r i b e d e x t e n s i v e p o l i c e p o w e r s o f e n t r y s e a r c h a n d s e i z u r e i n r e l a t i o n t o c o m m o n g a m i n g h o u s e s 6 4 S . Q . 1 8 6 9 , C . 3 6 . 6 5 L a b r o s s e , supra f n . 7 a t 8 3 , 8 4 . 29 and f a c i l i t a t e d prosecution and conviction by creating statutory presumptions regarding evidence of gaming and of what constitutes a common gaming house. For example, "any cards, dice, b a l l s , counters, tables or other instruments of gaming used i n playing any unlawful game" i s , under s . 3 of the A c t , evidence that the house, room or place where they are found i s used as a common gaming house, " u n t i l the contrary be made to appear". Further, the w i l l f u l obstruction of "any constable or o f f i c e r " seeking to enter a place suspected of being a common gaming house creates an evidentiary presumption that such place i s , absent proof to the contrary, a common gaming house.(66) A subsequent amendment added the punishment of persons found i n a common gaming house.(67) There were two additions to the federal law on gaming i n 1877: an enactment to repress betting and p o o l - s e l l i n g with the exception of bets between indi v i d u a l s , i . e . private wagers,(68) and a more unusual p r o h i b i t i o n of gambling on ce r t a i n p ublic conveyances,(69) which remained on the 66 Substantially s i m i l a r provisions remain part of Canadian criminal law. See C r i m i n a l Code o f Canada, R.S.C. 1985, c. C-46, s.198. 67 The S u p p r e s s i o n o f Gaming Houses Amendment A c t , S.C. 1877, C.33, S.4. 68 The R e p r e s s i o n o f B e t t i n g and P o o l - s e l l i n g A c t , S.C.1877, c.31. 69 The P r e v e n t i o n o f Gambling P r a c t i c e s i n c e r t a i n P u b l i c Conveyances A c t , S.C. 1877, c.32. 30 statute books u n t i l 1986.(70) When the l a t t e r was given f i r s t reading i n the House of Commons i t was explained that such a law was necessary because the managers of c e r t a i n large railways were complaining about the a c t i v i t i e s of "three card monte men" i . e . card sharps on t h e i r trains.(71) When the B i l l was considered i n committee, there was a l i v e l y discussion as to whether t h i s l e g i s l a t i o n could or should apply to B r i t i s h Columbia. The debate i s reported as follows:(72) Mr. Bunster said the miners of B r i t i s h Columbia must have something to amuse themselves with . . . [they] t r a v e l l e d a great deal on steamboats, and had to wile away the hours somehow. The miners were the bone and sinew of the country and delivered vast wealth from the bowels of the earth ... S i r James Douglas, one of the best of Governors, said: "Let the boys enjoy themselves", and t h i s was the correct p r i n c i p l e . He doubted very much whether the Dominion had the r i g h t to i n t e r f e r e with the Province i n these matters. The Government's response was that there would be no sp e c i a l rule for B r i t i s h Columbia. Nonetheless, as i t was not intended to apply the law to steamboats immediately, despite the express terms of the l e g i s l a t i o n , and as there were no railways i n that province at the time, "at present [the A c t ] would not apply to B r i t i s h Columbia".(73) I t was passed into law i n March 1877. 70 S.C. 1985, c. 52. 71 Canada, House of Commons, Debates (1877) 4th Sess. 3rd P a r i . 338. 72 Ibid. 73 Ibid. 31 The next l e g i s l a t i v e development was the f u r t h e r amendment o f the S u p p r e s s i o n o f L o t t e r i e s A c t , 1856. In 1883, p r o v i s i o n was made t o permit any i n c o r p o r a t e d s o c i e t y , " e s t a b l i s h e d f o r the encouragement of a r t " t o d i s t r i b u t e works o f a r t by l o t t e r y . ( 7 4 ) T h i s m i r r o r e d a B r i t i s h s t a t u t e of 1846 which l e g a l i z e d l o t t e r i e s run by A r t Unions " f o r the encouragement of the f i n e a r t s " . ( 7 5 ) The S t a t u t e s of Canada were r e v i s e d i n 1886. The amended 1856 A c t was amalgamated w i t h the R e p r e s s i o n o f B e t t i n g and P o o l - s e l l i n g A c t , 1877 t o become the L o t t e r i e s , B e t t i n g and P o o l - s e l l i n g A c t (76) and the l e g i s l a t i o n r e s p e c t i n g gaming houses and gambling on p u b l i c conveyances was r e i n a c t e d v i r t u a l l y unchanged.(77) The f i n a l enactment r e l a t i n g t o gambling p r i o r t o the c o d i f i c a t i o n o f the c r i m i n a l law i n 1892 was a s t a t u t e t a r g e t i n g gaming i n s t o c k s and merchandise.(78) The Preamble s t a t e s : Whereas gaming and wagering on the r i s e and f a l l i n v a l u e of s t o c k s and merchandise are d e t r i m e n t a l t o commercial and p u b l i c m o r a l i t y , and p l a c e s a f f o r d i n g f a c i l i t i e s f o r such gaming and wagering, commonly 74 L o t t e r i e s Amendment A c t , S.C. 1883, c.36. 75 9 & 10 V i c t . , c.48 (1846). 76 R.S.C. 1886, C.159. 77 R.S.C. 1886, c.158 and c.160, r e s p e c t i v e l y . 78 The Gaming i n S t o c k s and M e r c h a n d i s e A c t , S.C. 1888, c. 42. 32 c a l l e d bucket shops, are b e i n g e s t a b l i s h e d ; and i t i s expedient t o prevent such gaming and wagering . . . What i s b e i n g p r o h i b i t e d here i s not, of course, simple s p e c u l a t i o n on the Stock Market, but market r i g g i n g and what are known as d i f f e r e n c e t r a n s a c t i o n s , whereby a person i n t e n d s t o g a i n from the r i s e or f a l l i n the p r i c e o f s t o c k s and shares without any i n t e n t i o n o f ever a c q u i r i n g the same. They are f i c t i o n a l t r a n s a c t i o n s a g a i n s t the c l o c k . As one commentator notes, the Stock Exchange and i t s o p e r a t i o n s t o a c o n s i d e r a b l e e x t e n t l i e on the b o r d e r l a n d o f the s u b j e c t of gambling. A t the end of a s p e c u l a t i v e s a l e o r purchase, the r e s u l t t o the s p e c u l a t o r may be the same as i f he had e n t e r e d i n t o a mere d i f f e r e n c e t r a n s a c t i o n , "but he has employed a d i f f e r e n t machinery, and has u t i l i z e d s e p a r a t e l e g a l o b l i g a t i o n s which c o u l d have been s p e c i f i c a l l y e n f o r c e d , or f o r a breach of which damages c o u l d have been recovered."(79) The Criminal Code of Canada(80) The l e g i s l a t i o n enacted i n 1892 i s a code i n name o n l y . U n l i k e the codes found i n c i v i l law j u r i s d i c t i o n s , i t i s not o r g a n i z e d around, and d e r i v e d from, a r t i c u l a t e d r a t i o n a l p r i n c i p l e s , which are adhered t o c o n s i s t e n t l y and c o h e r e n t l y 79 C o l d r i d g e and Hawksford, The Law of Gambling (London: Reeves and Turner, 1895). 80 S.C. 1892, C.29. 33 throughout the body of the code. Rather, i t i s a body of law which represents a compromise between law derived from a common law heritage and a true code. The C r i m i n a l C o d e o f C a n a d a i s simply a compilation of the criminal law (common law and statute) as i t existed i n 1892. In introducing the B i l l into the House of Commons, i t s government sponsor, S i r John Thompson explained i t s genesis:(81) [W]hile we retained a l l the parts of our criminal law which we found i n the Revised Statutes that seemed to be p a r t i c u l a r l y applicable to Canada, we had i n a l l other portions of the measure followed the labours of the Commission i n Great B r i t a i n which was appointed to es t a b l i s h a criminal code, following p a r t i c u l a r l y the l a t e s t r e v i s i o n of t h e i r work. The work to which he refers i s that of S i r James Stephen, whose e f f o r t s to have the English criminal law c o d i f i e d were to be unsuccessful. His endeavours met with greater success in Canada. Indeed when those portions of the f i r s t C r i m i n a l C o d e that are devoted to gambling are examined, Stephen's influence i s evident. As i n h i s D i g e s t , gambling offences are c l a s s i f i e d as common nuisances; common gaming and betting houses are, along with common bawdy houses, 81 Canada. House of Commons, Debates 2d Sess. 7th P a r i . 1892, p. 2701. 34 designated as disorderly houses and Stephen's d e f i n i t i o n of a common gaming house i s adopted:(82) s.196. A common gaming-house i s -(a) a house, room or place kept by any person f o r gain, to which persons resort for the purpose of playing at any game of chance; or (b) a house, room or place kept or used f o r playing therein at any game of chance, or any mixed game of chance or s k i l l , i n which -(i) a bank i s kept by one or more of the players exclusively of the others; or ( i i ) i n which any game i s played the chances of which are not a l i k e favourable to a l l the players, including among the players the banker or other person by whom the game i s managed, or against whom the game i s managed, or against whom the other players stake, play or bet. Otherwise, the gambling provisions of the f i r s t C r i m i n a l Code were simply an amalgamation of the relevant chapters of the 1886 Revised Statutes and the Gaming i n S t o c k s and Mer c h a n d i s e A c t , 1888.(83) 82 c.f. Stephen, A Digest of the Criminal Law (London: Macmillan, 1877) a r t i c l e 181: "A common gaming house i s a house kept or used f o r playing therein at any game of chance, or any mixed game of chance and s k i l l , i n which (i) A bank i s kept by one or more of the players, exclusively of the others; or ( i i ) In which any game i s played the chances of which are not a l i k e favourable to a l l the players, including among the players the banker or other person by whom the game i s managed, or against whom the other players stake, play or bet." Stephen notes i n the appendix (Note XII) that "[t]here i s a good deal of d i f f i c u l t y of bringing into a c l e a r and systematic form the provisions of the various statutes r e l a t i n g to the suppression of disorderly houses, and es p e c i a l l y gaming houses." The complexity of gaming l e g i s l a t i o n i s a recurring theme i n i t s h i s t o r y . 83 The only provisions of t h i s e a r l i e r Canadian l e g i s l a t i o n not to be repealed and replaced by the provisions of the C r i m i n a l Code were those sections of the Gaming Houses A c t , ss.9 & 10, which enabled a magistrate to compel those i n d i v i d u a l s found i n a common gaming house to give evidence 35 When the Criminal Code was debated i n the House of Commons, the gambling sections received very l i t t l e attention. The l i m i t e d consideration they d i d receive was directed mainly at the sections r e l a t i n g to gambling on public conveyances. One Member c r i t i c i z e d them as "unnecessary legislation":(84) People can take care of themselves j u s t as well i n a railway carriage as they can i n a club or private house. I do not think the section i s a good one. I f a man choses to play for a d o l l a r or two i n a railway car, and loses i t , l e t him lose i t and have done with i t . I object to having laws on our Statute-book which are not observed. Constant l e g i s l a t i o n against s o c i a l habits which i s not enforced i s calculated to bring the law into contempt. This, however, was the only question directed towards the necessity for, and u t i l i t y of, the criminal sanctioning of gambling. The c o d i f i c a t i o n of Canada's criminal law brought with i t no major departures i n t h i s sphere. Nonetheless, i t did f i n a l l y r e - a l i g n the s i t u a t i o n i n Quebec with that p r e v a i l i n g i n the rest of the country. From 1869 to 1892, the Quebec government had e f f e c t i v e l y ignored the federal p r o h i b i t i o n of l o t t e r i e s , r e l y i n g on the more permissive p r o v i n c i a l l e g i s l a t i o n . This was challenged i n the Quebec courts i n May, 1892, at the same time that the Criminal Code was being debated i n the House of Commons. I t was, i n a l l p r o b a b i l i t y , a t e s t case to regarding the a c t i v i t i e s therein, and to r e l i e v e such witnesses of any criminal l i a b i l i t y for those actions. 84 Canada. House of Commons Debates, supra fn. 81 at 2976. 36 determine the fundamental issue of j u r i s d i c t i o n over l o t t e r i e s , pending the enactment of the Criminal Code. In R. v. Harper,(85) the defendants, l o t t e r y organizers, who were charged with an infringement of the federal L o t t e r i e s , Betting and P o o l - s e l l i n g Act, argued that such l e g i s l a t i o n was u l t r a v i r e s the Federal Parliament. They asserted that l e g a l controls on l o t t e r i e s were not true criminal offences, but "simple i n f r a c t i o n s " which were within the exclusive domain of the p r o v i n c i a l l e g i s l a t u r e . This r a t i o n a l e was rejected by the court which endorsed federal paramountcy i n the field:(86) [ I ] t cannot be denied that the Federal Parliament, i n which each province i s represented, has the power to declare obnoxious, injurious or mischievous anything which i t may believe to be so i n the i n t e r e s t of the Dominion at large .... the Federal Parliament had i m p l i c i t l y the r i g h t to consider l o t t e r i e s i n general, contrary to good order and the inte r e s t s of the public, to l e g i s l a t e against them .... This judgement, and the passage of the Criminal Code which soon followed, made i t cl e a r that, subject to the minor exceptions contained i n s.205 of the l a t t e r , l o t t e r i e s and other games of chance were i l l e g a l across Canada. For almost eighty years, t h i s s i t u a t i o n was to remain v i r t u a l l y unchanged. 85 (1892) 15 The Legal News 179 (Quebec Magistrates Court). 86 Ibid at 184-185 per Magistrate Dugas. 37 Tinkering with the Law A f t e r the enactment of the f i r s t Criminal Code, the provisions r e l a t i n g to gaming were, u n t i l 1969, subject only to f a i r l y minor revisions.(87) For example, s. 205, which prohibited l o t t e r i e s with c e r t a i n enumerated exceptions was amended i n 1900(88) to provide that small scale r a f f l e s could be conducted at any bazaar held for any "charitable or r e l i g i o u s object". Previously, s . 2 0 5 ( 6 ) ( b ) had referred only to bazaars for "any charitable object". At the same time, however, the exception found i n s . 2 0 5 ( 6 ) ( c ) , permitting "any d i s t r i b u t i o n by l o t among the members or t i c k e t holders of any incorporated society established for the encouragement of a r t , of any paintings" was repealed. From a reading of the debates i n the House of Commons on t h i s issue, i t would appear that t h i s exemption had been a source of controversy since soon a f t e r the Criminal Code was enacted and i t was f i r s t applied i n Quebec i n the wake of the decision i n R. v. Harper. In 1894, a Criminal Code (Amendment) B i l l which proposed to p r o h i b i t the a r t l o t t e r i e s received f i r s t reading,(89) but i t d i d not proceed 87 The only major change that occurred was i n r e l a t i o n to betting on horse races, the invention of the t o t a l i s e r and the introduction of on-track, pari-mutuel betting: S.C. 1910, c.10, s.3; S.C. 1913, c.13, s.13; S.C. 1920, c.43, s.6; S.C. 1922, c.16, ss.12 and 13; S.C. 1923, c.41, ss. 3,5 and 6. 88 S.C. 1900, C.46, s.3. 89 Canada. House of Commons, Debates 4th Sess. 7th Pari.(1894) Vol. I, p.364-5. This B i l l also proposed to 38 any further i n the l e g i s l a t i v e process. Then, during parliamentary debates i n May, 1899, a question was directed to the government as to i t s intention to respond to l o t t e r i e s i n Montreal disguised as associations f o r the promotion of a r t . The Prime Minister, S i r Wilfred Laurier responded that t h i s problem would be dealt with i n amendments which were then i n preparation and which were to be enacted i n the C r i m i n a l C o d e ( A m e n d m e n t ) A c t , 1 9 0 0 . ( 9 0 ) A rt l o t t e r i e s were prohibited, but at the same time, the C o d e was c l a r i f i e d v i s - a - v i s church r a f f l e s . That the thrust of the p r o h i b i t i o n of a r t l o t t e r i e s was directed mainly at Quebec i s confirmed by the fact that, i n 1906, s . 2 0 5 was further amended to provide that the p r o h i b i t i o n of l o t t e r i e s did not apply to "the Art Union of London, Great B r i t a i n , or the Art Union of Ireland",(91) bodies which functioned almost exclusively i n English-speaking Canada. In the 1906 r e v i s i o n of the C r i m i n a l C o d e , the gaming sections were l e f t l a r g e l y untouched. The most s i g n i f i c a n t change was the appearance of the term " l o t t e r y scheme", as opposed to the simple " l o t t e r y " , i n the side-headings of p r o h i b i t "church r a f f l e s and l o t t e r i e s permitted under s.205(6)(b)". 90 Canada. House of Commons, Debates 4th Sess. 8th.Pari. (1899) Vol.1, p.2323. 91 S.C. 1906, c.6. This focus on Quebec i s also evidenced by the deletion i n 1901 of the exception from the l o t t e r y p r o h i b i t i o n for "the Credit Foncier du Bas-Canada, or the Credit Foncier Franco-Canadien": S.C. 1901, c.42. 39 s.236 (formerly s.205). This expression was to become extremely important i n Canadian law, p a r t i c u l a r l y a f t e r 1969, and was ultimately interpreted to encompass not only l o t t e r i e s , but also other games of chance such as bingo, blackjack and roulette. Thus, as early as 1922,(92) the scope of the so-called " l o t t e r y section" of the Criminal Code was broadened i n scope to penalize anyone who disposes of any goods, wares or merchandise by any game or mode of chance or mixed chance and s k i l l i n which the contestant or competitor pays money or other valuable consideration; or who induces any person to stake or hazard any money or other valuable property or thing on the r e s u l t of any dice game, s h e l l game, punch board, coin table or on the operation of any wheel of fortune. This amendment was i t s e l f soon revised to allow many of the games proscribed therein to be played at a g r i c u l t u r a l f a i r s or exhibitions.(93) When t h i s proviso was f i r s t introduced i n the House of Commons, the Minister of J u s t i c e advised that the Department of Agriculture had recommended i t , b e l i e v i n g i t to be necessary i f a g r i c u l t u r a l f a i r s and exhibitions were to survive f i n a n c i a l l y . These f a i r s and 92 S.C. 1922, C.16, S . l l . 93 S.C. 1925, c.38, s.4 added a proviso to s.236(1) that the provisions of these two paragraphs did not apply to a g r i c u l t u r a l f a i r s or exhibitions "insofar as they do not re l a t e to any dice game, s h e l l game, punch board or coin table". In other words, disposing of goods etc. by games of chance i n which the competitor pays money to enter, and staking money on a wheel of fortune were permitted at such f a i r s and exhibitions. 40 e x h i b i t i o n s w e r e s e e n t o b e c r u c i a l i n t h e d e v e l o p m e n t a n d m a i n t e n a n c e o f i n t e r e s t i n a g r i c u l t u r e . ( 9 4 ) T h i s r e c o m m e n d a t i o n p a s s e d i n t o l a w i n 1925 a n d r e m a i n s i n e f f e c t . ( 9 5 ) D u r i n g t h e e c o n o m i c d e p r e s s i o n o f t h e 1 9 3 0 s , t h e r e was a r e - e x a m i n a t i o n o f t h e d e s i r a b i l i t y o f s t a t e l o t t e r i e s i n C a n a d a . ( 9 6 ) I n some q u a r t e r s , t h e y w e r e s e e n a s a p o t e n t i a l s o u r c e o f r e v e n u e f o r h o s p i t a l s a n d o t h e r f i n a n c i a l l y d e p r i v e d s o c i a l p r o g r a m s , a n d p r e s s u r e f o r t h e i r l e g a l i z a t i o n came f r o m a l l l e v e l s o f g o v e r n m e n t . A t t h e m u n i c i p a l l e v e l , f o r e x a m p l e , t h e M a y o r o f M o n t r e a l a d v o c a t e d a n a t i o n a l l o t t e r y t o h e l p t h e u n e m p l o y e d a t a m e e t i n g w i t h t h e m a y o r s o f O n t a r i o i n 1929, a n d i n 1 9 3 3 , M o n t r e a l ' s c i t y c o u n c i l u n a n i m o u s l y a d o p t e d a r e s o l u t i o n u r g i n g t h e p r o v i n c i a l g o v e r n m e n t t o l o b b y O t t a w a f o r a l o t t e r y t o b e n e f i t t h e u n e m p l o y e d . ( 9 7 ) The p o p u l a r i t y o f l o t t e r i e s i n Quebec h a d n e v e r r e a l l y a b a t e d , t h e 94 C a n a d a . H o u s e o f Commons, D e b a t e s 4 t h S e s s . 1 4 t h P a r i . ( 1925) V o l . V , p. 4204. 95 Criminal Code of Canada, R.S.C. 1985, s.206(3) a n d s.207(1) (c) . 96 A s i m i l a r r e - e v a l u a t i o n t o o k p l a c e i n B r i t a i n , i n l i g h t o f t h e i n t r o d u c t i o n o f t h e famous I r i s h S w e e p s t a k e s i n 1930: G r e a t B r i t a i n R o y a l C o m m i s s i o n o n L o t t e r i e s e t c . R e p o r t ( L o n d o n : H.M.S.O.,1932). The R o y a l C o m m i s s i o n u l t i m a t e l y recommended a g a i n s t r e i n s t a t i n g s t a t e l o t t e r i e s . I n t h e U n i t e d S t a t e s , b e g i n n i n g i n t h e D e p r e s s i o n a n d c o n t i n u i n g d u r i n g t h e S e c o n d W o r l d War, f e d e r a l a n d s t a t e l o t t e r y b i l l s b e g a n t o b e i n t r o d u c e d i n C o n g r e s s a n d t h e s t a t e l e g i s l a t u r e s : W e i n s t e i n a n d D e i t c h , s u p r a f n . 49 a t 14. 97 L a b r o s s e , supra f n . 7 a t 108, 110. 41 prohibitions i n the Criminal Code notwithstanding, but the c a l l f or a state l o t t e r y also came from other regions of the country. In Vancouver, for instance, a p l e b i s c i t e was held i n 1932 on the question Are you i n favour of l e g a l i z e d sweepstakes, to be operated under the d i r e c t control of the B r i t i s h Columbia government for the benefit of hospitals within the province? The vote was 25,735 to 9,777 i n favour of such a l o t t e r y . During the early 1930s there were several attempts to introduce l e g i s l a t i o n authorizing hospital sweepstakes (a form of lottery) i n Canada by the f a i r l y unusual route of b i l l s introduced i n the Senate, rather than i n the House of Commons. The f i r s t , i n 1931, was rejected by the Upper House; the second,in 1933, progressed to the Commons where i t was shelved i n d e f i n i t e l y ; the t h i r d , i n 1934, met with a si m i l a r fate, but i t was discussed extensively i n the House of Commons before i t too was allowed to lapse.(98) This was the most extensive public debate on l o t t e r i e s i n Canada up to that point and i s therefore worth close examination. The Prime Minister, the Hon. R.B. Bennett permitted government members a free vote, according to t h e i r 98 The chronology of these b i l l s and t h e i r progress through Parliament i s discussed extensively i n the debates i n the House of Commons: Debates (1934) 5th Sess. 17th P a r i . Vol. II, p. 2164 and V o l . I l l , pp. 2119 and 3277-3323. A private member's b i l l to amend the Criminal Code to permit provinces to conduct l o t t e r i e s for "educational or public charitable purposes" was also introduced i n the Commons i n 1934, but i t f a i l e d to receive second reading: Vol. I l l , pp 3476-77. 42 in d i v i d u a l views, and set aside a day, May 22, 1934, for discussion of the Hospital Sweepstakes B i l l . As one of the Members of Parliament pointed out, however, t h i s arrangement e f f e c t i v e l y gave the House "an opportunity to pronounce not so much on every d e t a i l of t h i s b i l l as on the question of l o t t e r i e s i n general."(99) The purpose of the B i l l i t s e l f was to empower the attorney general of any province to authorize a committee to conduct sweepstakes or l o t t e r i e s within the province f o r the benefit of hospitals. The most vocal support for the B i l l i n the House came from Quebec, where the p r o v i n c i a l government had recently enacted l e g i s l a t i o n authorizing a p r o v i n c i a l l o t t e r y , contingent on complementary federal action,(100) and also from B r i t i s h Columbia. Advocates and c r i t i c s of the B i l l frequently r e l i e d on very s i m i l a r arguments h i s t o r i c a l , moral, s o c i a l and f i s c a l - i n d i c a t i n g the m a l l e a b i l i t y of the issue. These same arguments were to be invoked again i n the 1950s and 1960s, but with d i f f e r e n t r e s u l t s . Those i n favour of the hospital sweepstakes proposal generally dismissed assertions of gambling's immorality as an i r r e l e v a n t issue: public opinion was c e r t a i n l y divided 99 Ibid at 3295 (Hon. F. R i n f r e t ) . 100 An Act to Authorize the Organization of a Lottery f o r Educational and Public Purposes S.Q. 1934, c. 6. This Act was never proclaimed into force. 43 and l e g i s l a t i o n was not going to cure t h i s one way or the other. The e x i s t i n g prohibitory law was i n e f f e c t i v e . L o t t e r i e s , p a r t i c u l a r l y foreign l o t t e r i e s such as the I r i s h Sweepstakes s t i l l thrived i n Canada, a l b e i t i l l i c i t l y . The l e g a l i z a t i o n of the domestic sweepstakes would impose stringent controls as the same time as i t would preserve respect f o r the law. The f a i l e d experiment with the pr o h i b i t i o n of li q u o r and the p o l i c y of state control which replaced i t was c i t e d approvingly by those espousing the sweepstakes' cause. Lo t t e r i e s i n aid of hospitals would do much to mitigate the e f f e c t s of the Depression, i t was argued. I t would be a "voluntary tax" i n an economy that could not absorb any further compulsory taxation. At the same time, i t would remove the cla s s b a r r i e r s to l e g a l gambling pastimes:(101) A l o t t e r y i s to the ordinary c i t i z e n what horse racing i s to society . . . Speculators have the stock markets and exchanges for gambling i n stocks and shares. These resorts are not available to the p l a i n , every day, c i t i z e n ... i t i s harsh discrimination that the day labourer on the farm, forest, mine, or high seas, i s the only one who i s to be l e g i s l a t e d out of the opportunity for indulging i n t h i s mild form of gambling. I t was also pointed out that l o t t e r i e s had a long pedigree i n B r i t a i n and Europe and were e n t h u s i a s t i c a l l y supported by the c i t i z e n r y of many countries, world wide. 101 Canada. House of Commons, Debates, supra fn. 96 at 3278-79 (J.A. Fraser). 44 Among the supporters of the B i l l from Quebec, there were those who thought that i t did not go f a r enough; that l o t t e r i e s should not be r e s t r i c t e d to the support of hospitals and that there should be a national l o t t e r y rather than a number of p r o v i n c i a l sweepstakes. Quebec's evident desire f o r some form of state-run l o t t e r y was an i n f l u e n t i a l factor i n the parliamentary debate, but on both sides of the issue. A Member representing an Ontario r i d i n g described the r e s u l t i n g tension as follows:(102) The b i l l under discussion i s important also f o r the reason that i t comes with endorsation of one of the p r o v i n c i a l l e g i s l a t u r e s . Naturally, when a b i l l comes so endorsed i t i s incumbent upon [us] to pay due consideration to the recommendations of that body. This i s a confederation of provinces and the action of the province must of necessity be given consideration. When a province indicates i t s desire to deal with questions that i t believes to be e n t i r e l y i n i t s own i n t e r e s t s , we have a r i g h t , i f the unity of confederation i s to be preserved, to pay attention to i t s demand. On the other hand, i f we are to preserve harmony i n our confederation, no one province has a r i g h t to force upon the dominion a condition of things that i s abhorrent to a great number of i t s c i t i z e n s .... Among the opponents to the B i l l i t i s c l e a r that the recent decision of a Royal Commission i n B r i t a i n not to reinst a t e l o t t e r i e s i n that country was much more persuasive than public sentiment i n Quebec. The opposition of the Anglican and United Churches to the proposal on moral grounds was also c i t e d . Repeated reference was made to the h i s t o r i c a l experience with l o t t e r i e s and t h e i r eventual a b o l i t i o n i n Enlightened' countries. I t was pointed out 102 Ibid at 3310 (J.L. Brown). 45 that, i n the case of the popular I r i s h Sweepstakes, le s s than 20 per cent of the t o t a l monies received a c t u a l l y found i t s way into the hospitals. One of the founding fathers of Canadian socialism, J.S. Woodsworth pointed out that the l o t t e r y might be a voluntary tax, but i t would also be a highly regressive one, with the tax burden f a l l i n g on the shoulders of those l e a s t able to pay.(103) There was also a technical, l e g a l argument against the B i l l put forward by the Secretary of State. In h i s view, i t was u l t r a v i r e s the federal Parliament to permit l o t t e r i e s i n the proposed manner. S e c t i o n 9 2 ( 7 ) of the B r i t i s h N o r t h A m e r i c a A c t vested j u r i s d i c t i o n over hospitals i n the provinces, and the minister could f i n d no authority f o r the federal government to empower the attorney general of a province to create a sweepstakes committee to r a i s e money for c e r t a i n p r o v i n c i a l purposes. Nothing le s s than an amendment to the Criminal C o d e would suffice.(104) The opponents of the B i l l succeeded i n s t a l l i n g i t s second reading, which e f f e c t i v e l y k i l l e d the proposal. Three subsequent attempts to get federal authorization for 103 I b i d at 3298 (J.S. Woodsworth). 104 I b i d at 3289 (Hon. CH. Cahan). The private member's b i l l which was introduced i n the House of Commons concurrently with the Sweepstakes B i l l and which proposed to amend the C r i m i n a l C o d e i n a manner consistent with the Secretary of State's l e g a l opinion, did not receive second reading: s u p r a fn. 96. 46 l o t t e r i e s i n the l a t e 1930s also met with defeat. (105) The Criminal Code was successfully amended i n 1938, however, to provide that a place i s not a common gaming house "while occupied or used by an incorporated bona f i d e s o c i a l club" nor i f i t i s "occasionally" used by charitable or r e l i g i o u s organizations, " i f the proceeds are used fo r the benefit of any charitable or r e l i g i o u s object".(106) In other words, gambling which took place as a means to an end such as charitable fund-raising or simple s o c i a l i z i n g , rather than as an end i n i t s e l f , was to be permitted. I t was not u n t i l 1950 that the l e g a l i z a t i o n of l o t t e r i e s re-emerged as a p o l i t i c a l issue. Somewhat symbolically, the government of Quebec enacted l e g i s l a t i o n creating a p r o v i n c i a l l o t t e r y to support education and health.(107) Without federal co-operation, i t remained a dead l e t t e r . 105 1st Reading March 16, 1938; P.M. Mackenzie King k i l l e d another b i l l ; March, 1939, V. Mallette introduced a private member's b i l l . These proposals are c i t e d i n Labrosse, supra fn. 7 at 121. 106 S.C. 1938, c.44, s.12. The stated aim of t h i s provision was to r a t i o n a l i z e the d e f i n i t i o n of a common gaming house with the exemption given to r a f f l e s for a charitable or r e l i g i o u s object found i n what was then s.236(6)(b) of the Code: Canada. House of Commons Debates (1938) Vol. IV, p.4316. 107 An Act to Promote the D i f f u s i o n of Education and the Protection of Health, S.Q. 1950, c.14. During the early 1940s, several provinces had enacted l e g i s l a t i o n to deal with perceived problems within p r o v i n c i a l boundaries r e l a t i n g to gambling, e.g. The Gaming and Betting Act of Ontario, S.O. 1942, c.19 and the Alberta Slot Machine Act, R.S.A., 1942, c.333, but i t was struck down by the courts as 47 Revision and Reconsideration Early i n 1949, the government of the day authorized the examination and study of the Criminal Code of Canada by means of a Royal Commission whose mandate was to revise ambiguities, adopt uniform language, eliminate inconsistencies, re-arrange provisions and Parts, s i m p l i f y and make the Code exhaustive.(108) This was the f i r s t time, since 1892, that the whole body of Canada's criminal law was to be subject to systematic study. By that point, the gaming sections of the Code, l i k e many of i t s other provisions, had been alt e r e d repeatedly i n a piece-meal fashion to meet the exigencies of p a r t i c u l a r situations and had been subjected to varying interpretations by the j u d i c i a r y . R a t i o n a l i z a t i o n was a desirable goal. The Criminal Law Revision Commissioners issued t h e i r report i n 1952,(109) and l e g i s l a t i o n based on t h e i r recommendations was passed i n 1954.(110) Regarding the being u l t r a v i r e s . See i n f r a , Chapter Four for a more det a i l e d discussion of these measures. 108 Canada. Order-in-Council P.C. 527 (3/2/1949) ; Order-in-Council P.C. 68/4633 (26/9/1950). 109 Canada. Royal Commission on the Revision of the Criminal Code, Report (Ottawa, 1952). 110 S.C. 1953-54, c.51. One of the most s i g n i f i c a n t changes of t h i s r e v i s i o n was the a b o l i t i o n of a l l common law offences, except contempt of court. Those common law offences which were thought to be worth preserving were s p e c i f i c a l l y amalgamated into the Criminal Code. 48 gaming provisions of the Code, however, t h i s exercise was without any immediate impact. The Commissioners chose not to deal with them, o f f e r i n g t h i s explanation:(111) Your Commissioners have considered the gaming sections of the Code. While we are of the opinion that these sections contain c e r t a i n inconsistencies and anomalies we have suggested no substantive changes because of the controversial nature of the matters involved. S i m i l a r l y , the Special Committee which was struck to consider the proposed revisions to the Criminal Code also chose to set aside the issue ( r e f e r r i n g to l o t t e r i e s i n p a r t i c u l a r ) , along with the defence of insanity and c a p i t a l and corporal punishment, on the grounds that these questions were "of such paramount importance that they could and should not be dealt with merely as in c i d e n t a l s " to the re v i s i o n of the Code. (112) In the debates i n the House of Commons i t s e l f , the omission of any revisions r e l a t i n g to gaming was uncontroversial as, by that time, the government was already proposing a special study of lotteries.(113) In the early months of 1954 a Parliamentary Special J o i n t 111 Supra fn 109 at 16. 112 Canada. Parliament. House of Commons.Special Committee on B i l l No. 93 "An Act respecting the Criminal Law etc." Minutes of Proceedings and Evidence (Ottawa: Queen's Printer, 1953) p. 297. 113 During the extremely b r i e f remarks on the relevant gaming sections made i n the course of parliamentary debate, i t was observed that i t was only the l o t t e r y provisions which were problematic. Other forms of gambling, such as "roulette and fan-tan" were dismissed as "undesirable i n our c i v i l i z a t i o n " - Canada. House of Commons Debates (1953-54) 1st Sess. 22d Pa r i . Vol. II p. 1030 (E.D. Fulton). 49 Committee was struck to examine the criminal law r e l a t i n g to c a p i t a l punishment, corporal punishment and l o t t e r i e s and to make recommendations regarding i t s amendment. After hearing submissions from a wide range of interested p a r t i e s - church groups, law enforcement o f f i c i a l s , e x h i b i t i o n boards, trade unions, s o c i a l agencies etc. - who put forward very s i m i l a r arguments to those heard i n the parliamentary debates on the Hospital Sweepstakes B i l l i n 1934, the Committee made several recommendations. The f i r s t was a decision, rather than a recommendation, to c l a s s i f y bingo and s i m i l a r games as being i n the same category as l o t t e r i e s . The Committee viewed bingo games as being within i t s terms of reference because they were not d i s s i m i l a r to l o t t e r i e s i n operation and because they were usually arranged and played by organizations having s i m i l a r purposes to those conducting l o t t e r i e s f o r benevolent purposes. Indeed, i t was recommended that the law be c l a r i f i e d "to insure that bingo and s i m i l a r games be subjected to the same prohibitions and controls as apply to lotteries".(114) Secondly, the Committee recognized that although there was widespread public support for l o t t e r i e s and bingos operated f o r charitable and benevolent purposes, they were , 114 Canada. Reports of the J o i n t Committee of the Senate and  House of Commons on Capital Punishment, Corporal Punishment  and L o t t e r i e s (Ottawa: Queen's Printer, 1956) paras. 1, 30. 50 more often than not, being run i n v i o l a t i o n of the terms of the Criminal Code, e.g. the prizes were worth more than $50 and had not previously been offered for sale, conditions which were found to be "unrealistic".(115) P o l i c i n g agencies found i t d i f f i c u l t to enforce e x i s t i n g laws i n the face of adverse public opinion. This caused two problems: contempt for the law and the absence of e f f e c t i v e controls. Accordingly, the chief recommendation of the Special J o i n t Committee was that the law r e l a t i n g to l o t t e r i e s should be relaxed i n some respects, and tightened up i n others. By making c l e a r which kinds of l o t t e r i e s would be l e g a l and under what kinds of conditions, then, i n theory at l e a s t , i t would become easier to enforce the law against i l l e g a l schemes:(116) The Committee therefore considers that the law should be amended with three purposes i n view. F i r s t , the prohibitions against l o t t e r i e s must be c l e a r l y stated; second, the inconsistencies i n the present law must be eliminated; and t h i r d , the types of l o t t e r i e s to be permitted must be c l e a r l y defined and subjected to e f f e c t i v e supervision and control. The implementation of t h i s p o l i c y w i l l r e s u l t i n the e f f e c t i v e p r o h i b i t i o n and r e s t r i c t i o n of several types of l o t t e r i e s now c a r r i e d on i n s p i t e of t h e i r dubious l e g a l i t y . I t w i l l also r e s u l t i n some relaxation of e x i s t i n g prohibitions to permit adequate and workable c o n t r o l . I t i s p r e c i s e l y because the Committee has concluded that the present prohibitory laws do not protect the public that i t i s disposed to recommend some relaxation i n l i n e with the same reforms introduced with respect to the control, sale and consumption of a l c o h o l i c beverages. Pro h i b i t i o n proved unworkable and led to many serious abuses; but the present system of l i c e n s i n g and control, which i s supported by the main body of public 115 Ibid at para. 37. 116 Ibid at para. 22. 51 opinion, has worked s a t i s f a c t o r i l y and on the whole appears to have contributed to e f f i c i e n t law enforcement. Accordingly, the Committee advocated a s t r i c t l i c e n s i n g and inspection system, administered by a competent p r o v i n c i a l authority, for charitable and benevolent organizations who wished to conduct a l o t t e r y . The f i n a l major recommendation put forward at t h i s time was that there should be no state l o t t e r i e s i n Canada. I t was not f e l t that they were an e f f i c i e n t way of r a i s i n g public funds, and that they would serve no useful purpose. On the contrary, the Committee considered that i t was the proper r o l e of the state to control and regulate such gambling a c t i v i t y as was permitted to i t s c i t i z e n s under the law. I t was highly inappropriate for the state i t s e l f to provide f a c i l i t i e s f or gambling to the public and to a c t i v e l y promote it.(117) In essence, the recommendations of the Committee regarding l o t t e r i e s and bingo were r e l a t i v e l y cautious and conservative. They envisaged a modest relaxation of one form of gambling which was i n l i n e with the scheme that had existed i n Canada for almost a century. Quebec's desire for a p r o v i n c i a l , or even a national l o t t e r y for broad s o c i a l purposes did not appear to be even a remote p o s s i b i l i t y . 117 Ibid at paras. 23-25. 52 The Committee's report on the criminal law r e l a t i n g to l o t t e r i e s met with l e g i s l a t i v e s i l e n c e . The gaming provisions, which had been untouched by the r e v i s i o n process, remained on the statute book, "warts and a l l " , u n t i l 1969. The decade of the 1960s, a period of turbulence and transformation for many aspects of society, was to see a r a d i c a l transformation of l e g a l status of gambling i n Canada. The process by which t h i s change was achieved w i l l be examined i n the next chapter. 53 C H A P T E R T W O T H E P R O C E S S O F D E C R I M I N A L I Z A T I O N P r e l i m i n a r y M a n o e u v r e s Although the recommendations of the Parliamentary Special J o i n t Committee to amend the C r i m i n a l C o d e i n regard to l o t t e r i e s for benevolent purposes had no immediate impact, i t i s c l e a r that, i n 1960, the federal government was considering l e g i s l a t i v e changes. In that year, at the annual meeting of the uniform law commissioners, the advisory body for co-ordinating law reform e f f o r t s across Canada, a d r a f t r e v i s i o n of the l o t t e r i e s provisions of the C o d e prepared i n the Department of J u s t i c e was considered and commented upon.(1) In February 1961, then Minister of Ju s t i c e , E.D. Fulton l e t i t be known more widely that the government was seriously studying the issue of l o t t e r i e s . ( 2 ) Some federal p o l i t i c i a n s were unwilling to wait for the government to act, however. Starting i n early 1961, there was a steady stream of private member's b i l l s r e l a t i n g to 1 Canada. Commissioners on Uniformity of L e g i s l a t i o n . Proceedings of the 42nd Annual Meeting (1960), p.43. The Commissioners continued to study Canada's gaming laws over the next few years. A committee was struck i n 1965 to determine "whether there are areas of the l o t t e r i e s problem in which the [Criminal Law] Section can be of assistance":Proceedings of the 47th Annual Meeting (1965) p. 44. The following year, the Section considered t h i s Committee's report and recommended against state l o t t e r i e s and o f f - t r a c k betting: Proceedings of the 48th Annual  Meeting (1966) p. 32. 2 Canada. House of Commons Debates (1960-61) Vol. I I , p. 2099-2100. 54 l o t t e r i e s which received f i r s t reading i n the House of Commons. Private members b i l l s , unless they are adopted or otherwise supported by the government, are r a r e l y successful, but they do serve to keep an issue i n the p o l i t i c a l arena. The f i r s t b i l l , " f o r the establishment of a Sweepstakes Commission for the benefit of ho s p i t a l s " was introduced i n the House i n February 1961. (3) This b i l l proposed that the Sweepstakes Commission would use i t s i n i t i a l c a p i t a l grant to organize and conduct a sweepstakes scheme whose p r o f i t s would be d i s t r i b u t e d on a pro rata basis according to the populations of the provinces. In other words, i t would be a national scheme. In 1962, there were two b i l l s , one proposing a national lottery(4) and one favouring l o t t e r i e s at the p r o v i n c i a l l e v e l "to provide f i n a n c i a l assistance to hospitals or f o r other welfare purposes under p r o v i n c i a l j u r i s d i c t i o n " . ( 5 ) I d e n t i c a l versions of t h i s l a t t e r b i l l , a l l proposing an amendment to what was then s.179 of the Code to allow p r o v i n c i a l governments to operate such l o t t e r i e s , were 3 B i l l C-36 An Act to provide f o r the Establishment of a Hospital Sweepstakes Board (1961). 4 B i l l C-36 An Act to Provide for a Canadian Lottery (1962). 5 B i l l C-56, An Act to amend the Criminal Code (Provincial Lotteries) (1962). 55 introduced repeatedly i n the House between 1963 and 1967.(6) A s l i g h t l y d i f f e r e n t version of t h i s b i l l , which received f i r s t reading i n June, 1967, would have exempted from s. 179 "a l o t t e r y organized and operated by a p r o v i n c i a l government for the purpose of providing f o r the payment i n the province of a dditional amounts with respect to family allowances and old age pensions. 1 1 (7) The advent of s o c i a l i z e d medicine had arguably rendered ho s p i t a l sweepstakes somewhat of an anomaly. Another proposed amendment to the C r i m i n a l C o d e , which received f i r s t reading i n successive years from 1963-1967 was A n A c t t o a m e n d t h e C r i m i n a l C o d e ( R a f f l e s a n d B i n g o f o r C h a r i t a b l e P u r p o s e s ) , ( 8 ) the aim of which appears to have been the implementation of some of the recommendations of the 1954 Special J o i n t Committee. I t did, however, steer c l e a r of the more contentious issue of true l o t t e r i e s . Rather, i t proposed to broaden the e x i s t i n g exemptions for charitable gaming and r a f f l e s at church bazaars to make i t possible for service clubs and s i m i l a r community service organizations as well as r e l i g i o u s organizations to r a i s e funds for charitable and r e l i g i o u s objects without the threat of prosecution. The explanation accompanying the b i l l 6 B i l l C-36 (1963); B i l l C-44 (1963); B i l l C-22 (1964); B i l l C-65 (1965); B i l l C-38 (1966) and B i l l C-43 (1967). 7 B i l l C-137, 2nd Sess. 27th P a r i . (1967). 8 B i l l C-73 (1963); B i l l C-65 (1964); B i l l C-15 (1965); B i l l C-84 (1966) and B i l l C-109 (1967). 56 stated that the e x i s t i n g exemptions were too narrow and that the law was unevenly applied across the country:(9) In some parts of Canada [service clubs, community service and r e l i g i o u s organizations] can carry on r a f f l e s and bingos not only on a regular basis i f desired, but also on a scale s u f f i c i e n t to meet the f i n a n c i a l needs for which they are held, without any interference by l o c a l law enforcement a u t h o r i t i e s who appear to pay no attention to the c l e a r provisions of the Criminal Code ... At the same time other such groups . .. are i n e f f e c t not permitted to carry out t h i s very same type of fund-raising a c t i v i t y by l o c a l law enforcement authorities who consider themselves obliged to enforce the provisions of the Criminal Code as they now stand i n t h e i r e n t i r e t y . [This b i l l ] i s designed to eliminate t h i s u n f a i r s i t u a t i o n and to ensure that a l l such groups are treated on a basis of equality that w i l l permit them to hold r a f f l e s and bingos i n a manner and on a scale s u f f i c i e n t for the charitable purposes intended. In the federal l e g i s l a t i o n that was ultimately enacted i n 1969, ideas from both of these series of private members' b i l l s would be incorporated. Another development which doubtless had great s i g n i f i c a n c e for the l o t t e r y debate, p a r t i c u l a r l y i n eastern Canada, was the advent of l e g a l i z e d l o t t e r i e s i n the north eastern region of the United States. In 1963 the state l e g i s l a t u r e i n New Hampshire authorized a state l o t t e r y which was f i r s t operated the following year.(10) Although i n i t i a l revenues f e l l short of o f f i c i a l expectations, i t started a trend which was to spread through v i r t u a l l y every state i n the union i n the following years. Even i f Canadians 9 B i l l C-73, 1st Sess. 26th P a r i . (1963), Explanatory Notes. 10 N.H. Rev. Stat. Ann. # 284:2 (1985). 57 could not patronize a p r o v i n c i a l or national l o t t e r y , access to the American market was often j u s t a short drive away. P a r t i c u l a r l y i n Quebec there was growing pressure at p r o v i n c i a l and municipal l e v e l s for the i n s t i t u t i o n of l o t t e r i e s . Montreal i n p a r t i c u l a r , i n the second h a l f of the 1960s was confronted with huge b i l l s for Expo '67 and was facing the prospect of even larger ones fo r the Olympic Games which were to be held there i n 1976. Although by 1968, the federal government had begun to act on the issue of l o t t e r i e s , the municipality of Montreal chose to take matters into i t s own hands and i n s t i t u t e d a "voluntary tax": the general public could become voluntary taxpayers of the c i t y by making monthly contributions of $2 and thereby become e l i g i b l e to p a r t i c i p a t e i n a monthly draw for valuable prizes i n the form of s i l v e r ingots. I t was widely recognized that t h i s was a barely disguised l o t t e r y and i t was eventually struck down by the Supreme Court of Canada as being i n contravention of the p r o h i b i t i o n of l o t t e r i e s i n the C r i m i n a l C o d e . ( 1 1 ) The e n t i r e issue of gambling had also been considered at length by a commission of inquiry into the administration 11 C i t y o f M o n t r e a l v . A t t o r n e y G e n e r a l o f Q u e b e c , [1970] S.C.R. 332. By the time t h i s decision was issued, l a t e i n 1969, i t had been overtaken by amendments to the C r i m i n a l C o d e permitting state l o t t e r i e s . 58 of j u s t i c e on criminal and penal matters i n Quebec.(12) P o l l s conducted for the commission indicated widespread support f o r the idea of a state l o t t e r y and the commission cautioned of the e v i l s which can r e s u l t when law and public opinion are out of step.(13) I t concluded that rather than p r o h i b i t i t , the state should use gambling's "enormous resources" to finance "essential s o c i a l reforms". Accordingly, the following recommendation was issued:(14) [G]ambling must be s o c i a l i z e d . By that we mean that the State authorizes gambling, but organizes i t f o r i t s own benefit and without intermediaries. Consequently there i s no issuing of permits or licences i n favour of private enterprise. This appears to us to be the only r e a l i s t i c attitude. Before t h i s report was issued, the federal government introduced l e g i s l a t i o n which was fundamentally to a l t e r the le g a l status of ce r t a i n forms of gambling i n Canada. Government Proposals Late i n 1967, the Minister of Ju s t i c e i n the L i b e r a l government of Prime Minister Lester Pearson, Pierre Trudeau introduced into the House of Commons an omnibus b i l l to amend several aspects of the Criminal Code. They included the decriminalization of, i . e . the removal of criminal 12 Quebec. Commission of Inquiry into the Administration of Ju s t i c e etc. Crime. J u s t i c e and Society. Vol. 3: Crime i n Quebec - Organized Crime (Quebec Cit y : 1969). 13 Ibid at 74-75. 14 Ibid at 87. 59 sanctions from, abortion, homosexual practices and l o t t e r y schemes, under ce r t a i n circumstances.(15) B i l l C-195 proposed i n t e r a l i a to introduce section 179A which would allow state l o t t e r i e s at the option of the federal or p r o v i n c i a l governments, the broadening of ch a r i t y gaming along the l i n e s suggested by the Parliamentary Special Committee i n 1954, the continuation of the e x i s t i n g exemption f o r gaming at a g r i c u l t u r a l f a i r s and exhibitions and the creation of a new exemption for gaming at public places of amusement under p r o v i n c i a l l i c e n c e . This d r a f t l e g i s l a t i o n also made cl e a r that the term " l o t t e r y scheme" as i t was used i n the Code was not to be r e s t r i c t e d to true l o t t e r i e s , but encompassed any "game", that i s , any game of chance or mixed chance and s k i l l . Although t h i s B i l l was abandoned when Parliament was dissolved f o r the general e l e c t i o n i n 1968, i t was reintroduced i n a v i r t u a l l y i d e n t i c a l form i n December of that year, a f t e r the Liberals were re-elected under the leadership of Pierre Trudeau. In r e l a t i o n to l o t t e r y schemes, i t represented a r a d i c a l departure from the ex i s t i n g law: i t decriminalized s i g n i f i c a n t forms of gambling, but i n a rather unique and i n d i r e c t fashion. Criminal laws generally conform to a pattern of a pr o h i b i t i o n to be met with a sanction, with l e g a l l y 15 B i l l C-195, 2nd Sess., 27th P a r i . , 1967. 60 recognized excuses and j u s t i f i c a t i o n s taken into account. In its most straightforward form, decriminalization would r e s u l t i n the t o t a l withdrawal of the law from the targeted a c t i v i t y . This was the option chosen by the government for homosexual acts between consenting adults, consistent with its p o l i c y of keeping the state xout of the bedrooms of the nation'. Regarding l o t t e r i e s and related games, however, the p r o h i b i t i o n and related sanctions were to remain i n the C o d e , but they would not apply i f those a c t i v i t i e s were authorized by the federal government i n one instance, and p r o v i n c i a l governments i n the others.(16) The p o l i c y proposed here was what has been termed a " l i c e n s i n g model" of decriminalization because the a c t i v i t y was to be allowed under state permit.(17) The criminal law was to be replaced by other forms of l e g a l controls. The b i l l ' s sponsor, the Minister of J u s t i c e , John Turner described the proposed amendments concerning 16 There are only two remotely s i m i l a r provisions: what i s now s . 8 3 of the C r i m i n a l C o d e , R.S.C. 1985, c.C-46, which exempts p r o v i n c i a l l y authorized boxing matches from the p r o h i b i t i o n of p r i z e f i g h t s ; and s . 2 8 7 made le g a l abortions contingent upon the approval of p r o v i n c i a l l y appointed and supervised therapeutic abortion committees. This provision was found to contravene the C a n a d i a n C h a r t e r o f R i g h t s a n d F r e e d o m s , s . 7 and to be of no force and e f f e c t i n R . v . M o r g e n t a l e r e t a l . , (1988), 37 C.C.C.(3d) 449 (S.C.C). 17 Skolnick and Dombrink, "The Legalization of Deviance", (1978) 16 Criminology 193 at 200. See i n f r a Chapter Six f o r a more det a i l e d discussion of the d i f f e r e n t models of decriminalization. 61 l o t t e r i e s as incorporating "a fundamentally new approach":(18) [T]he amount and nature of gaming which w i l l be permitted w i l l depend to a considerable extent on the po l i c y of p r o v i n c i a l authorities i n issuing ...licences ...The attitude towards l o t t e r i e s i n Canada varies i n various parts of the country. The proposed amendment w i l l provide to an appreciable degree, for recognition of that fa c t . The nature of the proposed amendments might be described as l o c a l option within prescribed l i m i t s set out i n the Code. Indeed, the o f f i c i a l j u s t i f i c a t i o n f or the new provisions was premised almost exclusively on the notion of the lack of a national consensus regarding l o t t e r y schemes. Both i n the House and i n Committee hearings, the Minister denied that these changes resulted from p r o v i n c i a l pressure, although the provinces were reported to be i n favour of them:(19) To the best of our knowledge ... we have received no formal submissions eit h e r f o r or against t h i s p a r t i c u l a r provision from any p r o v i n c i a l government ... We are assessing public opinion i n t h i s country. We f e e l that public opinion i s not unanimous about i t and that i t might vary from region to region. We are, therefore, leaving i t to the regions, as that public opinion may be interpreted by t h e i r p r o v i n c i a l governments that t h e i r p r o v i n c i a l Attorneys General have control over whether or not there should be l o t t e r i e s permitted within p r o v i n c i a l boundaries. S t r i c t l y speaking, t h i s may have been true - that none of the p r o v i n c i a l governments had made a formal submission at that precise time requesting authorization of a state 18 Canada. House of Commons Debates. 1st Sess. 28th P a r i . (1968-69) p. 4721. 19 e.g. Canada. Proceedings of House of Commons Standing  Committee on Ju s t i c e and Legal A f f a i r s . 1st Sess. 28th P a r i . (1968-69) p.331. 62 l o t t e r y . Nonetheless, as has been indicated, pressure had been bu i l d i n g i n Quebec for some time for the province to be given the power to conduct l o t t e r i e s . The denial of p r o v i n c i a l pressure to decriminalize l o t t e r i e s was, therefore, inaccurate. The lobbying was, however, coming mainly from a single province and i t was perhaps i m p o l i t i c for the national government to acknowledge that the criminal law was being amended s o l e l y to accommodate the wishes of that region. A more un i v e r s a l l y applicable r a t i o n a l e was employed: the moral ambiguity of gambling. The proposed section 179A was e x p l i c i t l y r a t i o n a l i z e d on moral grounds, on the basis that the necessary s o c i a l consensus fo r p r o h i b i t i o n was lacking. Varying public opinion on the issue was asserted i n Parliament, but was not empirically demonstrated. Outside of Quebec, there had been v i r t u a l l y no public discussion of l e g a l i z e d gambling and i t s merits since the Parliamentary Special J o i n t Committee hearings fourteen years previously. The moral argument offered by the J u s t i c e Minister was not altogether a compelling one. Nonetheless, anchoring the l o t t e r i e s amendment to the issue of public ambivalence was consistent with the underlying rationale for other provisions of the omnibus b i l l directed at v i c e or so-called v i c t i m l e s s crimes. While the l i b e r a l i z a t i o n of charitable gambling was uncontentious, the amendments permitting state l o t t e r i e s 63 were not without t h e i r detractors. The arguments which, to that point had been successful i n maintaining the l e g a l s t a t u s q u o were raised again, but to no a v a i l . For example, it was argued that such l o t t e r i e s were an i n e f f i c i e n t mechanism fo r r a i s i n g money for state purposes and that they were, i n e f f e c t , a highly regressive form of taxation.(20) It was also pointed out that the Protestant Church was opposed to the changes.(21) This opposition had no impact. During the Committee stage of the l e g i s l a t i v e process only two minor amendments to the l o t t e r y provisions were considered and adopted: c l a r i f i c a t i o n that charitable gaming and gaming at a public place of amusement d i d not include dice games, three card monte, punch boards and coin tables; and the removal of f i n a n c i a l l i m i t s f or l o t t e r y schemes at a g r i c u l t u r a l f a i r s and exhibitions.(22) The revised provisions passed into law with the res t of the omnibus b i l l i n May 1969(23) with remarkable ease when the contentiousness of i t s subject matter - abortion, homosexuality and gambling - i s considered. This very juxtaposition may, i n part, account f o r the b i l l ' s success. The government of the day was determined that the package 20 Canada. House of Commons Debates s u p r a fn. 18 at 5378 (S. Knowles). 21 I b i d at 7776. 22 Canada. Proceedings of the House of Commons Standing  Committee on Ju s t i c e and Legal A f f a i r s s u p r a fn. 19 at 17-6. 23 T h e C r i m i n a l L a w A m e n d m e n t A c t , S.C. 1968-69, c.38. 64 had to be debated and considered i n committee as a whole, so that the r e j e c t i o n of a part would compromise the e n t i r e b i l l . One Member of Parliament, commenting on the scope of the b i l l and i t s implications observed:(24) I do say t h i s , and perhaps i t i s very abrupt to say i t , that I think i t i s a package to get through c e r t a i n things we would not normally have got through unless i t was i n t h i s package. The strategy was successful. The enactment of S . 1 7 9 A , i n the words of then Minister of Ju s t i c e , "withdraws the app l i c a t i o n of the criminal law and makes [ l o t t e r y schemes] a question of c i v i l , public policy."(25) This assessment was to be confirmed i n the strongest terms over the following f i f t e e n years. T h e F e d e r a l - P r o v i n c i a l S t r u g g l e o v e r L o t t e r i e s Not s u r p r i s i n g l y , the government of Quebec was the f i r s t to take advantage of the permissive terms of S . 1 7 9 A of the C r i m i n a l C o d e . By the end of 1969, the National Assembly had enacted l e g i s l a t i o n establishing two Crown corporations: the Regie des l o t e r i e s et courses du Quebec and the Societe d'exploitation des l o t e r i e s et courses du Quebec.(26) The main function of the former i s to supervise horse racing and 24 Canada. Proceedings of the Standing Committee etc.. s u p r a fn. 19 at 145 (E. Wolliams). 25 Canada. House of Commons Debates s u p r a fn. 18 at 7780. 26 L o i s u r l e s L o t e r i e s e t C o u r s e s , S.Q. 1969, c.28. 65 the issuing of licences for charitable gaming. The Societe was set up to conduct p r o v i n c i a l l o t t e r i e s . The other provinces were somewhat slower to get involved i n l o t t e r i e s , but, i n keeping with e a r l i e r predictions that l o t t e r i e s would spread inexorably once they had been introduced i n one region of Canada, (27) they p r o l i f e r a t e d r a p i d l y across the country during the early 1970s.(28) Since 1969, true l o t t e r i e s have become firml y entrenched i n Canadian culture,(29) and a s i g n i f i c a n t source of government revenues.(30) Further, p a r t i c u l a r l y i n western Canada, the broad statutory d e f i n i t i o n of a " l o t t e r y scheme" has been used to accommodate the expansion of ch a r i t y gaming 27 During debates on the l o t t e r y question i n 1934, several p o l i t i c i a n s expressed doubt that l o t t e r i e s could be confined within p r o v i n c i a l boundaries: e.g. Canada. House of Commons Debates (1934) Vol. I l l , 3316-17. 28 Manitoba set up a l o t t e r y i n A p r i l 1970.; Alberta, Saskatchewan, B r i t i s h Columbia and the Yukon joined with Manitoba i n 1974 to conduct l o t t e r i e s under the umbrella of the Western Canada Lottery Foundation; Ontario's f i r s t l o t t e r y was held i n 1975; and i n 1976, Newfoundland, New Brunswick, Nova Scotia and Prince Edward Island began issuing l o t t e r y t i c k e t s through the A t l a n t i c Lottery Corporation. 29 Canadian culture has also become heavily dependent on l o t t e r i e s f o r funding. See Canada Council, L o t t e r i e s and the  a r t s : The Canadian Experience 1970-1980 (Ottawa: Canada Council, 1982). 30 For example, i n 1983-84, l o t t e r i e s generated a t o t a l income i n excess of $126 m i l l i o n for members of the Western Canada Lottery Foundation: W.C.L.F., Annual Report 1983-84 (Winnipeg, 1984). 66 i n the form of bingo and casino-style games of chance that do not involve dice e.g. blackjack and roulette.(31) The terms of S.179A(1)(a) also permitted the government of Canada "to conduct and manage a l o t t e r y scheme i n accordance with regulations made by the Governor i n Council". In 1969, when the l o t t e r y amendments were introduced, however, the Minister of J u s t i c e stated that the federal government had no intention of e s t a b l i s h i n g a l o t t e r y scheme "at present". This p a r t i c u l a r provision was apparently included simply for reasons of "symmetry":(32) I t seemed l o g i c a l to the government that i f the criminal law were to be withdrawn from l o t t e r i e s managed by private organizations, charitable and r e l i g i o u s , or by a g r i c u l t u r a l f a i r s , an option should also l i e with the p r o v i n c i a l government i t s e l f or with an agent of a p r o v i n c i a l government, and, since t h i s was being done, that the criminal law should be t o t a l l y withdrawn i n i t s application to the federal government i n t h i s area as well. By 1973, however, the government of Canada had had a change of heart. The Olympic Lottery Corporation of Canada received i t s charter from the federal government i n that year and proceeded to conduct l o t t e r i e s to r a i s e funds for the Olympic Games i n Montreal. One observer notes that the national government's intrusion into state l o t t e r i e s was not welcome, though Quebec was supportive of t h i s p a r t i c u l a r 31 For an analysis of casino gaming i n Alberta, f o r example, see Campbell and Ponting, "The Evolution of Casino Gambling i n Alberta", (1984) 10 Canadian Public Policy 142. 32 Canada. House of Commons Debates supra fn. 18 at 7780-7781 (J.N. Turner). 67 scheme since i t would receive most of the funds thereby generated.(33) This was followed by the creation of a federal l o t t e r y corporation, Loto-Canada, i n 1976. The perceived i n e f f i c i e n c i e s of Loto-Canada were to become an e l e c t i o n issue i n 1979, with the federal opposition party promising to dismantle i t and to vacate the l o t t e r y f i e l d i n favour of the provinces i f elected. The Progressive Conservative party was indeed elected, and the newly formed government took steps to enable i t to make good on t h i s undertaking. The federal minister responsible for l o t t e r i e s signed an agreement with h i s p r o v i n c i a l counterparts according to which, Loto-Canada would cease operations on December, 1979 and the provinces would pay $24 m i l l i o n annually to the federal government i n compensation.(34 This arrangement was not f i n a l i z e d i n the form of l e g i s l a t i o n , however. Accordingly, when the short-l i v e d Conservative government l o s t the general e l e c t i o n i n February, 1980, Loto-Canada was resuscitated, and some of i t s reserve funds were used to research the po t e n t i a l for future federal involvement i n l o t t e r i e s , i n p a r t i c u l a r i n sports pools. 33 Labrosse, The Lottery: From Jacques C a r t i e r 7 s Day to  Modern Times (Montreal: Stanke, 1985) p. 166. 34 The text of t h i s agreement i s set out i n Labrosse, supra fn. 33 at 179-181. 68 L e g i s l a t i o n creating the Sports Pool Corporation was passed i n 1983,(35) and i t commenced operations the following year. I t also became the subject of l i t i g a t i o n between the federal government and the provinces.(36) Before the Federal Court had the opportunity to consider the merits of the argument of the provinces that the federal governments actions were i n breach of the 1979 agreement, there was another general e l e c t i o n and the Conservatives were returned to power with an overwhelming majority. Once again, negotiations were commenced between the two l e v e l s of government to s e t t l e the issue of control over true l o t t e r i e s . This time, however, the r e s u l t i n g agreement was t o be f i n a l i z e d by an amendment to the C r i m i n a l C o d e o f C a n a d a . In June, 1985, the federal minister for sport and the p r o v i n c i a l ministers responsible for l o t t e r i e s signed an agreement that, i n exchange for the federal government rel i n q u i s h i n g any claim to conduct l o t t e r i e s and r e i n f o r c i n g p r o v i n c i a l control of l o t t e r i e s and gaming, the provinces would make annual contributions to the federal Treasury as well as $100 m i l l i o n to the Calgary Winter Olympic Games and would bring a h a l t to t h e i r l i t i g a t i o n against the federal government regarding l o t t e r i e s . This agreement which was i n 35 S.C. 1983, c. 51. 36 A t t o r n e y s G e n e r a l o f a l l t h e P r o v i n c e s o f C a n a d a v . T h e Q u e e n i n R i g h t o f C a n a d a (Fed.Ct. T-622-84). 69 the form of a contract, complete with a consideration clause, was also contingent on consequential amendments to the Criminal Code being proclaimed no l a t e r than December 31, 1985.(37) The l e g i s l a t i o n that was drafted proposed to repeal the provision of what was then s.190 of the Code, which permitted the government of Canada to conduct and manage l o t t e r y schemes, to make exemptions from the criminal p r o h i b i t i o n of l o t t e r y schemes the exclusive domain of the p r o v i n c i a l authorities.(38) In other words, the federal government was to be divested of any capacity to conduct l o t t e r i e s . The provinces were to have sole j u r i s d i c t i o n . The time frame i n the June agreement d i d not permit l e i s u r e l y consideration of the Criminal Code amendments. There was almost no public discussion of the measure which proposed a r a d i c a l r e d i s t r i b u t i o n of government power. The l o t t e r i e s b i l l was given f i r s t reading i n October, 1985. As a r e s u l t of an a l l - p a r t y agreement, a b r i e f discussion i n the Commons was substituted for a reference to the Standing Committee on J u s t i c e and Legal A f f a i r s . This debate and the second and t h i r d readings of the b i l l took place i n less 37 The f u l l text of t h i s agreement i s set out i n Canada. Senate Proceedings of the Standing Senate Committee on Legal  and Constitutional A f f a i r s (1984-85) 1st Sess. 33rd Pari.' Issue # 31, Appendix "Leg-31-C". 38 An Act to Amend the Criminal Code (L o t t e r i e s ) , B i l l C-81, (1984-85). 70 than three hours on November 6, 1985.(39) In the Senate, i t was given f i r s t reading the following day, and second reading on November 27th. The Senate Standing Committee on Legal and Constitutional A f f a i r s gave the proposals a c l o s e r examination, but, despite serious reservations, ultimately concluded that they should be "approved without amendment".(40) The b i l l received Royal Assent on December 20th and was proclaimed i n force on the f i n a l day of the year.(41) Parliament e f f e c t i v e l y "rubber-stamped" an agreement negotiated by federal and p r o v i n c i a l government o f f i c i a l s . In less than twenty years the l e g a l status of l o t t e r i e s and a f f i l i a t e d forms of gambling, i . e . " l o t t e r y schemes", had been fundamentally altered: instead of being l a r g e l y prohibited under the criminal law, they were l e g a l i z e d under p r o v i n c i a l authority. They had been transferred from one l e v e l of government to the other by l e g i s l a t i o n giving e f f e c t to a f e d e r a l - p r o v i n c i a l contract. Undoubtedly, both l e v e l s of government may enter into contracts and may sue and be sued on the basis of them. In t h i s instance, however, they were not contracting the usual sense of the word, for 39 Canada. House of Commons Debates (1984-85) Vol. 128, pp. 8415-8434. 40 Canada Senate Proceedings of the Standing Committee on  Legal and Constitutional A f f a i r s , supra fn. 38, Issue # 35, p.15. 41 S.I./86-5, Canada Gazette. (January, 22, 1986) p.468. 71 goods or services, but to re-apportion governmental power and to terminate l i t i g a t i o n i n return f o r substantial consideration, i n accordance with s t r i c t time l i m i t s . The Senate Standing Committee was concerned enough about t h i s development to seek a l e g a l opinion. Counsel offered the following assessment:(42) In my opinion the subject matter of t h i s agreement i s c l e a r l y the exercise of powers of executive government. The contract i s entered into by ministers who represent governments of which they are members. I would submit that the r e s u l t i n g agreement i s not a private contract but a p o l i t i c a l arrangement ... i f there i s a breach of those p o l i t i c a l commitments, the proper forum f o r the resolution would not be the Court; the proper forum would be i n the p o l i t i c a l chambers of government. In other words, the "contract", being i n r e a l i t y a mere p o l i t i c a l commitment, was not l e g a l l y binding and not j u s t i c i a b l e , then or i n the future. Nonetheless, the contractual format was eminently successful i n securing p r o v i n c i a l autonomy regarding l o t t e r y schemes. In practice, i t was i r r e l e v a n t that, de jure, the respective governments were not bound by the contract, because they and Parliament c l e a r l y f e l t bound de facto. Law reform, i n t h i s instance, was e s s e n t i a l l y a bureaucratic or executive process rather than a l e g i s l a t i v e one. In large part, t h i s r e s u l t s from the transformation of gaming l e g i s l a t i o n into a f e d e r a l - p r o v i n c i a l issue, and, as 42 Canada Senate, Proceedings of the Standing Committee etc. supra fn. 38, Issue # 34, p. 12. 72 p o l i t i c a l s c i e n t i s t s point out, f e d e r a l - p r o v i n c i a l r e l a t i o n s i n Canada are characterized by the dominance of the executive branches of both l e v e l s of government.(43) The f e d e r a l - p r o v i n c i a l negotiation process i s one from which l e g i s l a t u r e s and non-governmental int e r e s t s are v i r t u a l l y excluded. As Fletcher and Wallace observe, i t i s de rigeur to view with alarm the tendency for f e d e r a l - p r o v i n c i a l agreements to be made with l i t t l e of no reference to l e g i s l a t i v e bodies.(44) Where l e g i s l a t i o n i s forthcoming (and many agreements can be implemented without i t ) governments are generally loathe to make changes i n hard-won agreements i n order to s a t i s f y l e g i s l a t o r s . Any debate tends to be s l i g h t and inconsequential. They note further that members of the opposition p a r t i e s are nearly always completely blocked out of the process. Much of the time, therefore, f e d e r a l - p r o v i n c i a l i n t e r a c t i o n i s a "closed bureaucratic loop".(45) One eminent c o n s t i t u t i o n a l lawyer comments that, while i t may be f r u s t r a t i n g f o r l e g i s l a t o r s to f i n d that t h e i r r o l e i s confined to r a t i f y i n g arrangements made elsewhere, federal Parliament i s too 43 e.g. Smiley, Canada i n Question: Federalism i n the  E i g h t i e s 3rd ed. (Toronto: McGraw-Hill Ryerson, 1980) p. 91. 44 "Federal-Provincial Relations and the making of Public P o l i c y i n Canada: etc." i n Simeon (ed.) D i v i s i o n of Powers  and Public Policy (Toronto: University of Toronto Press, 1985) pp. 125-205 at 128-29. 45 Ib i d at 186-88. 73 dominated by Cabinet and the party system to be a suitable forum f o r f e d e r a l - p r o v i n c i a l adjustment.(46) This pattern c e r t a i n l y holds true f o r the amendments made to Canadian gaming l e g i s l a t i o n i n 1985. Federal-p r o v i n c i a l negotiations occurred primarily between the federal Minister of State for Fitness and Amateur Sport and p r o v i n c i a l ministers responsible for l o t t e r i e s . Speaking before the Senate Standing Committee, the Minister of Sport j u s t i f i e d the amendments to the Code as representing "good f i s c a l responsibility".(47) I t was only i n the f i n a l stages of t h i s process that there was any consultation with the federal Minister of J u s t i c e and the p r o v i n c i a l Attorneys-General on the amendments to the Criminal Code, which i s noteworthy given the primary r e s p o n s i b i l i t y that these ministers have for criminal j u s t i c e p o l i c y and law enforcement. As a r e s u l t of t h e i r input, some minor amendments were made to the l o t t e r i e s b i l l , but none were inconsistent with the substance of the proposals contained i n the f e d e r a l - p r o v i n c i a l agreement signed i n June, 1985. As indicated, within s i x months, the b i l l became law almost automatically. 46 Hogg, Constitutional Law of Canada 2nd ed. (Toronto: Carswell, 1985) p. 108. 47 Canada. Senate Proceedings of the standing Committee etc. supra fn. 38, Issue # 29, p. 15. 74 Both i n terms of process and of defining the scope of the criminal law of Canada, the 1985 amendment creates a curious precedent. Were the federal and p r o v i n c i a l governments to agree, a s i m i l a r process could be used to amend other areas of the criminal law by allowing the provinces to license and regulate prohibited a c t i v i t i e s . Not only does t h i s f a c i l i t a t e a decentralized criminal law and i n t e r - p r o v i n c i a l inconsistencies, but i t also reduces governmental accountability. As one observer points out, a government cannot e a s i l y be held responsible f o r i t s actions i f i t can pl a u s i b l y blame t h e i r consequences, or lack thereof, on another l e v e l of government that i s eithe r competitively or co-operatively involved i n the same f i e l d of activity.(48) Indeed, as w i l l be shown i n Chapter Five, t h i s i s exactly what has happened i n r e l a t i o n to the issue of native gaming. In any event, under the terms of Part VII of the current Criminal Code, the federal government continues to proscribe gambling, but only to the extent that i t has not been authorized by the provinces. I t i s a mere residual r o l e . True l o t t e r i e s , bingo and other games of chance have become legitimate forms of public entertainment as well as sources of revenue for p r o v i n c i a l treasuries and charitable and r e l i g i o u s organizations. 48 Stevenson, "The Di v i s i o n of Powers" i n Simeon (ed.) supra fn. 45. pp.71-123 at 114. See also Smiley, supra fn. 44 at 53. 75 In B r i t a i n , changes such as these would be unthinkable without there f i r s t being extensive i n v e s t i g a t i o n and discussion i n the form of a royal commission. (49) In the United States, s i m i l a r developments necessitated amendments to state constitutions, p l e b i s c i t e s and government studies.(50) In Canada the decriminalization of these forms of gambling has been a v i r t u a l " s i l e n t revolution".(51) Nonetheless, the impact has been profound. In subsequent chapters the implications for the d i v i s i o n of powers under the Constitution w i l l be discussed, as well as the consequential e f f e c t s of the l a t t e r on Canada's native peoples. The new r o l e for the provinces i n regulating public gaming w i l l also be addressed. F i r s t , however, the decriminalization of " l o t t e r y schemes" w i l l be examined within the context of l e g a l / p h i l o s o p h i c a l and l e g a l / s o c i o l o g i c a l analyses of the appropriate ambit for criminal law. 49 e.g. B r i t a i n . Report of the Royal Commission on Gambling (London: H.M.S.O. Cmnd. 7200, 1978). 50 e.g. U.S. Commission on the Revision of the National POlicy Toward Gambling, Gambling i n America (Washington D.C.:Government Pr i n t i n g O f f i c e , 1976) and U.S. Council of State Governments, Gambling: A Source of State Revenues (Lexington, 1973). 51 This phrase i s borrowed from Jacob's recent analysis of the transformation of divorce law i n the United States: A S i l e n t Revolution: Routine Policy Making and the  Transformation of Divorce Law i n the United States (Chicago: University of Chicago Press, 1988). 76 C H A P T E R T H R E E T H E C O N T R A C T I O N O F T H E C R I M I N A L L A W A U n i q u e E n a c t m e n t Like most other common law countries, Canada has become a firm adherent to what could be termed a "there ought to be a law against i t " mentality. The criminal law has been regularly invoked as the solution to a myriad of r e a l and apparent s o c i a l problems. In t h i s p o l i c y process, the appropriateness of such a response has, by and large, been unquestioned. In recent years, however, the Law Reform Commission of Canada, i n s t i t u t e d i n 1970, has devoted considerable e f f o r t to promoting the p r i n c i p l e of r e s t r a i n t i n the use of the criminal law, (1) though with l i t t l e success i n terms of any r e a l reduction i n the scope of the Criminal C o d e and related statutes. The Criminal L a w Amendment Act(2), which was f i r s t introduced i n 1967 and passed i n May, 1969, thus predating the work of the Law Reform Commission, was at the time, and 1 The Commission's p o s i t i o n on the use of the criminal law i s as follows: "So criminal law must be an instrument of l a s t resort. I t must be used as l i t t l e as possible. The message must not be d i l u t e d by o v e r k i l l - too many laws and offences and charges and t r i a l s and prison sentences. Society's ultimate weapon must stay sheathed as long as possible. The watchword i s r e s t r a i n t - r e s t r a i n t applying to the scope of criminal law, to the meaning of criminal g u i l t , to the use of the criminal t r i a l and to the criminal sentence." Law Reform Commission of Canada, Report #3: Our  Criminal Law (Ottawa: Information Canada. 1976) p. 27. 2 S.C. 1968-69, C.38. 77 remains, a rare occurrence: a genuine l e g i s l a t e d contraction of the ambit of Canada's criminal law. Lottery schemes, adult homosexual practices and abortion, were i n varying degrees released from the t a i n t of criminal prohibition.(3) The purpose of t h i s chapter i s to explore on a t h e o r e t i c a l l e v e l why t h i s change i n r e l a t i o n to l o t t e r i e s and other games of chance took place. This amendment to the C r i m i n a l C o d e was part of a package of morally contentious reforms. Gambling, homosexuality and abortion are among a number of behaviours which are often described as " s i n s " or, i n secular discourse, "vices". They are a c t i v i t i e s which are generally private, p r i n c i p a l l y involving the a w i l l i n g p a r t i c i p a n t ( s ) . As Skolnick observes, the term "vice" often suggests pleasure and popularity, as well as immorality. I t has a dual character: i t i s conduct that can be simultaneously enjoyed and deplored, often by the same individuals.(4) 3 In the United States s i m i l a r r e s u l t s were often achieved through the courts rather than through l e g i s l a t i o n e.g. the access to abortion r e s u l t i n g from the Supreme Court's decision i n R o e v . W a d e , 410 U.S. 113 (1973). Since the entrenchment of the C a n a d i a n C h a r t e r o f R i g h t s a n d F r e e d o m s , t h i s avenue for l e g a l change has also opened up i n Canada e.g. i n R . v . N o r g e n t a l e r e t a l . , (1988), 37 C.C.C.(3d) 449, the Supreme Court of Canada found that the r e s t r i c t i o n s which remained on abortions a f t e r the 1969 amendment were unconstitutional. 4 Skolnick, House of Cards (Toronto: L i t t l e , Brown, 1978) p.8; "The S o c i a l Transformation of Vice", (1988) 51 Law and  Contemporary Problems 9. Abortion, however, while often described as a s i n , i s r a r e l y termed a vice, and does not have the same connotation of pleasure as the other behaviours. 78 Vices are i n essence morally ambiguous. Nonetheless, they have t r a d i t i o n a l l y , although not consistently, been subject to criminal sanctions. During the 19th century, the repressive V i c t o r i a n era, such behaviours were increasingly brought under the aegis of the criminal law. Once these laws were created, they obtained a c e r t a i n immutability, regardless of whether or not they were enforced or indeed enforceable. One commentator notes that i t i s generally quite d i f f i c u l t to rescind such laws by express l e g i s l a t i v e act. P o l i t i c i a n s tend to shy away from confronting these controversial and p o l a r i z i n g issues.(5) Consequently, as Friedmann observes, i t i s often easier to achieve " t a c i t l e g a l change" through an informal p o l i c y of non-enforcement of the law.(6) As the" previous chapters indicate, i n the decades preceding the enactment of the omnibus b i l l i n 1969, such a p o l i c y of non-enforcement of gambling prohibitions was adopted i n many areas across Canada. Ultimately, however, Parliament did chose to enact l i b e r a l i z i n g l e g i s l a t i o n r e l a t i n g to gambling, homosexual practices and abortion. I t was to be the only enactment of i t s kind. Drug use, s o l i c i t i n g for the purposes of p r o s t i t u t i o n and obscene publications, which might also come within the d e f i n i t i o n of 5 Rich, Crimes Without Victims: Deviance and the Criminal Law (Washington, D.C: University Press of America, 1978) p. 27. 6 Friedmann, Law i n a Changing Society (2d ed.) (London: Stevens, 1972) p. 32. 79 vice s or morally ambiguous behaviour, are s t i l l prohibited under Canadian criminal law. T h e L e g a l E n f o r c e m e n t o f M o r a l i t y The formal rationale offered by the government of the day for the l o t t e r y provisions of the C r i m i n a l L a w A m e n d m e n t A c t centred on the notion of moral ambiguity: that, i n Canada i n the mid-1960s, a national consensus was lacking for the continued c r i m i n a l i z a t i o n of these a c t i v i t i e s . Accordingly, permitting or p r o h i b i t i n g l o t t e r y schemes was to become a regional or p r o v i n c i a l r e s p o n s i b i l i t y . ( 7 ) The l e g a l status of l o t t e r i e s would r e f l e c t l o c a l values. I m p l i c i t i n t h i s j u s t i f i c a t i o n i s the notion that society's values and the criminal law should be congruent; that the criminal law should r e f l e c t those values and not try to impose a common standard where none e x i s t s ; and that there are si t u a t i o n s i n which resort to the criminal law as a method of s o c i a l control i s inappropriate. This o f f i c i a l reasoning i s c l e a r l y r e f l e c t i v e of a l e g a l philosophy of considerable pedigree, r e s t i n g as i t does on the work of such notables as Jeremy Bentham and John Stuart M i l l . (8) One of the main tasks assumed by these 7 See Chapter Two, fn. 19 and surrounding text. 8 The work of Bentham and M i l l and of t h e i r adherents and detractors has been examined minutely i n numerous 80 Enlightenment philosophers was that of enunciating a r a t i o n a l theory for state action, p a r t i c u l a r l y i n the form of l e g i s l a t i o n . They sought to define an appropriate r o l e f o r law i n a j u s t society. The foundations f o r t h e i r work were a c t u a l l y l a i d i n the 13th century by St. Thomas Aquinas who prescribed the following r e l a t i o n s h i p between law and vice:(9) Law i s l a i d down for a great number of people of which the great majority have no high standard of morality, therefore i t does not forbid a l l the vices from which upright men can keep away but only those grave ones which the average man can avoid and c h i e f l y those which do harm to others and have to be stopped i f human society i s to be maintained, such as murder, t h e f t and so f o r t h . In other words, law should be reserved f o r serious misconduct which i s harmful to others. The key determinant of "harm to others" was to become central to the work of John Stuart M i l l , a u t i l i t a r i a n who owed much to h i s predecessor, Bentham. Jeremy Bentham constructed a theory of l e g i s l a t i o n for achieving the public good. He viewed every law as an e v i l because i t infringed on i n d i v i d u a l l i b e r t y . I t became a necessary e v i l only where the acts i t sought to prevent "are r e a l l y e v i l s , and that these e v i l s , are greater than those employed to prevent commentaries. The discussion that follows does not purport to be anything but a b r i e f review of t h e i r ideas, p a r t i c u l a r l y as they might r e l a t e to l e g i s l a t i v e controls on gambling. 9 Summa Theoloqiae. c i t e d i n Lee, Law and Morality (Oxford: O.U.P., 1986) p. 9. 81 them."(10) This was the p r i n c i p l e of u t i l i t y . Further, l e g i s l a t o r s had to be s a t i s f i e d that criminal sanctions would be an e f f e c t i v e deterrent; that punishment would not produce a greater mischief than the criminal act and that there were no other means of preventing the wrongdoing. In r e l a t i o n to t h i s l a t t e r concern - the prevention of crime ,- Bentham had a unique perspective. He advocated the encouragement of "amusements" for two reasons: the pleasure of the pastimes themselves and t h e i r tendency to weaken "dangerous i n c l i n a t i o n s " . In h i s l i s t of suitable amusements he included the following:(11) The invention of plays and pastimes, whether a t h l e t i c or sedentary, among which games of cards hold a distinguished rank. Games of hazard should alone be excluded. These t r a n q u i l sports have brought the sexes together, have diminished ennui, that malady pe c u l i a r to the human race, e s p e c i a l l y to the opulent classes and to the old. I t should be noted that he did not exclude a l l games of chance from h i s l i s t of suitable pastimes, only hazard. He c l e a r l y saw a p o s i t i v e r o l e f o r moderate gaming which, i n hi s view, should be encouraged rather than be prohibited by the criminal law.(12) 10 Bentham, Theory of L e g i s l a t i o n (London: Trubner, 1879) p. 48. 11 Ib i d at 376-77. 12 Bentham noted that governments had not e n t i r e l y neglected t h i s branch of p o l i c y , but had pursued i t to make the population passive and submissive to the government, rather than "to render the c i t i z e n s more united among themselves, more happy, more industrious, more^virtuous": i b i d at 377. Interestingly, t h i s view of l e g a l i z e d gambling as a p a c i f i e r 82 Regarding vices i n general, Bentham was of the opinion that i n d i v i d u a l s were the best judges of t h e i r own in t e r e s t s . Where they could injure no-one but themselves, the law should leave them alone:(13) I f they deceive themselves, i t i s to be supposed that the moment they discover t h e i r error they w i l l a l t e r t h e i r conduct. The power of the law need i n t e r f e r e only to prevent them from i n j u r i n g each other. As one commentator on the Benthamite approach to determining the appropriate r o l e for criminal law states, however objective i t might appear to be on the surface, i t does not reduce criminal l e g i s l a t i o n to a process of s t r i c t c a l c u l a t i o n . There i s room for dispute regarding the actual consequences of conduct i t i s sought to p r o h i b i t , as well as i n the designation of such consequences as harmful.(14) Nonetheless, Bentham drew attention to the continuing need to s c r u t i n i z e e x i s t i n g criminal laws i n a c r i t i c a l l i g h t and not to enact any new laws without s i m i l a r d e l i b e r a t i o n . M i l l took a very s i m i l a r u t i l i t a r i a n approach i n determining the nature and l i m i t s of the power which can legi t i m a t e l y be exercised by society over the i n d i v i d u a l , focussing on harm to others:(15) of the working classes i s a contemporary c r i t i c i s m which i s not infrequently voiced. 13 Ibid at 63. 14 Hughes, "Morals and the Criminal Law", (1962) 71 Yale Law  Journal 662 at 665. 15 M i l l , On Liberty (New York: Appleton-Century Crofts, 1947) p. 9. 83 [The simple] p r i n c i p l e i s , that the sole end f o r which mankind are warranted, i n d i v i d u a l l y or c o l l e c t i v e l y , i n i n t e r f e r i n g with the l i b e r t y of the action of any of t h e i r number, i s s e l f - p r o t e c t i o n . That the only purpose for which power can be r i g h t f u l l y exercised over any member of a c i v i l i z e d community, against h i s w i l l , i s to prevent harm to others. His own good, e i t h e r physical or moral, i s not a s u f f i c i e n t warrant. As with Bentham's l e g i s l a t i v e formula, t h i s would seem to exclude gambling unless i t can be shown to harm in d i v i d u a l s other than the players themselves. M i l l acknowledged that although the gambler might only harm him/herself immediately, the * r i p p l e e f f e c t ' of that harm might ultimately impact on others. Nonetheless, he maintained that such a c t i v i t i e s could only be dealt with by law when they lead a person to v i o l a t e "a d i s t i n c t and assignable o b l i g a t i o n to any other person" which would take i t out of the "self-regarding class".(16) He did, however, admit that the state could do i n d i r e c t l y what i t should not do d i r e c t l y , i . e . the taxation or l i c e n s i n g of questionable goods and services i n order to discourage conduct which i t deems contrary to the best interests of the i n d i v i d u a l , as long as such a measure also had revenue-raising purposes:(17) [ I ] t must be remembered that taxation for f i s c a l purposes i s absolutely i n e v i t a b l e ; that i n most countries i t i s necessary that a considerable part of that taxation should be i n d i r e c t ; that the State, therefore, cannot help imposing penalties, which to some persons may be prohibitory, on the use of some a r t i c l e s of consumption, i t i s hence the duty of the 16 Ib i d at 80-81. 17 Ibi d at 102-103. 84 State to consider, i n the imposition of taxes, what commodities the consumer can best spare; and a f o r t i o r i , to s e l e c t i n preference those which i t deems the use, beyond a very moderate quantity, to be p o s i t i v e l y injurious. Taxation, therefore, .... up to the point which produces the largest amount of revenue .... i s not only admissible, but to be approved of. So-called * s i n taxes' have become an i n t e g r a l part of state financing. They pose a dilemma fo r the State, however, which M i l l d i d not address: the tension between r e i n i n g i n the s e l f - d e s t r u c t i v e impulses of i t s c i t i z e n s and maximizing state revenues. As one contemporary observer argues, although the regulation of l i q u o r and other vices derived t h e i r impetus from p a t e r n a l i s t i c motives, over time, control over revenue becomes more of an imperative.(18) At best M i l l ignored t h i s dilemma; at worst, he assumed that the state would i n e v i t a b l y resolve i t i n the best i n t e r e s t s of the i n d i v i d u a l . The u t i l i t a r i a n l e g i s l a t i v e philosophy of Bentham and M i l l did not meet with u n c r i t i c a l acceptance and whole-hearted acceptance from eith e r p o l i t i c i a n s or j u r i s t s . I t s key c r i t i c i n the 19th century was the i n f l u e n t i a l scholar and would-be c o d i f i e r of English criminal law, S i r James Stephen. His t r e a t i s e , Liberty. Equality. Fraternity , which was f i r s t published i n 1873 as a response to M i l l ' s On  Liberty. advocated that law had to replace r e l i g i o n i n the realm of the enforcement of morality. Accordingly, i t was necessary to use the criminal law to protect society; to 18 Brown-John, Canadian Regulatory Agencies etc. (Toronto: Butterworths, 1981) p. 47. 85 e s t a b l i s h and maintain r e l i g i o n s ; to e s t a b l i s h and maintain morality and to make al t e r a t i o n s i n e x i s t i n g forms of government or s o c i a l institutions.(19) While he agreed with M i l l and Bentham that sometimes the costs of using i n the criminal law, i n terms of public expense and the invasion of i n d i v i d u a l privacy, outweigh the possible benefits, he was of the opinion that t h i s only held true i n r e l a t i o n to "mere vi c e s " such as ingratitude and "perfidy". (20) On the other hand, there were "acts of wickedness so gross and outrageous that s e l f - p r o t e c t i o n apart they must be prevented at any costs to the offender and punished i f they occur with exemplary severity".(21) These sentiments mirrored V i c t o r i a n attitudes towards the use of the criminal law to regulate private morality and no doubt permeated Stephen's work on a d r a f t criminal code upon which the f i r s t Criminal Code of Canada was based. Consequently, Canadian criminal law has leaned towards what Friedmann has termed a fundamentalist approach to the function of criminal law, using i t to defend and protect c e r t a i n moral values and to punish v i c e , including gambling.(22) 19 Stephen, Liberty. Equality. Fraternity (Cambridge: C.U.P.,1967) p. 61. 20 Ibid at 151. 21 Ibid at 163. By " s e l f - p r o t e c t i o n " Stephen means the protection of the members of society from harm. 22 Friedmann, supra fn.6 at 191. 86 Attention to the issue of the appropriate function of the criminal law was renewed i n the l a t e 1950s when the report of the Wolfenden Committee on Homosexual Offences and Pr o s t i t u t i o n i n England was published.(23) The general p r i n c i p l e underlying the Committee's s p e c i f i c proposals, which included the decriminalization of private, consensual homosexual acts, was that there i s a realm of conduct which, i r r e s p e c t i v e of i t s morality or immorality, i s "not the law's business" and by i t s very nature f a l l s outside the legitimate scope of the criminal law.(24) I t was t h i s underlying rationale, rather than the Committee's s p e c i f i c proposals which proved to be the ca t a l y s t f o r the famous *debate' between the English judge, Patrick Devlin and l e g a l scholar, H.L.A. Hart. Lord Devlin agreed that the Wolfenden Committee had posed an important question, i . e . what the function of the criminal law should be, but disagreed with i t s answer. In his view, the criminal law must uphold the "common morality" as determined through the medium of the legendary ^reasonable man'; immorality, for the purpose of the law, i s what every " r i g h t minded person" i s presumed to consider 23 Great B r i t a i n Committee on Homosexual Offences and Pr o s t i t u t i o n , Report (London: H.M.S.O.,1957) Cmnd. 247. 24 Ibid at 24. 87 immoral.(25) Devlin could not accept the private/public morality dichotomy and concluded that "the suppression of v i c e i s as much the law's business as the suppression of subversive a c t i v i t i e s " . The cumulative e f f e c t of private immorality was detrimental to the public weal.(26) Hart's response was firmly i n the u t i l i t a r i a n mold, determining the scope of the criminal law by reference to the "harm to others" p r i n c i p l e . Regarding the r e l a t i o n s h i p between law and morality he stated:(27) No doubt we would a l l agree that a consensus of moral opinion on c e r t a i n matters i s e s s e n t i a l i f society i s to be worth l i v i n g i n . Laws against murder, t h e f t and much else would be of l i t t l e use i f they were not supported by a widely di f f u s e d conviction that what these laws fo r b i d i s also immoral. So much i s obvious. But i t does not follow that everything to which the moral vetoes of accepted morality attach i s of equal importance to society; nor i s there the s l i g h t e s t reason for thinking of morality as a seamless web: one which w i l l f a l l to pieces carrying society with i t , unless a l l i t s emphatic vetoes are enforced by law. Hart also c r i t i c i z e d Devlin's notion of a "common morality" on the grounds that i t obscures an important d i s t i n c t i o n between the morality which happens to be accepted and shared by a society (^positive' morality) and an i d e a l (or ^ c r i t i c a l ' ) morality. To enforce the former, Hart argued, ran the danger of entrenching society's 25 Devlin, The Enforcement of Morals (London: Oxford U.P.,1959) p. 16. 26 Ibi d at 15. 27 Hart. "Immorality and Treason", The Listener (July 30, 1959) p.162 at 163. 88 prejudices under the banner of morality.(28) A s i m i l a r d i s t i n c t i o n was made by Dworkin between moral convictions and "mere prejudices, personal aversions, a r b i t r a r y dogmas and r a t i o n a l i z a t i o n s " . The actual moral convictions of a community, providing they constitute a genuine "discriminatory morality", Dworkin suggested, might well be enforced by the criminal law; but the "morality" which consists i n mere emotional aversion, no matter how widespread, i s a morality only i n a weak "anthropological sense" and i s undeserving of le g a l enforcement.(29) Other commentators have also c r i t i c i z e d Devlin's concept of "common morality" not on the basis of h i s misconception of what counts as a common morality, but on the basis that i t ignores the value p l u r a l l i s m which ex i s t s i n modern s o c i e t i e s outside of a central core of shared values. For example, Wollheim wrote that, according to the philosophy of li b e r a l i s m , the i d e n t i t y and continuity of a society rests not on the possession of a single "common morality" but on the mutual t o l e r a t i o n of d i f f e r e n t moralities.(30) 28 Hart Law. Liberty and Morality (Stanford: Stanford U.P., 1963) p. 70. 29 Dworkin, "Lord Devlin and the Enforcement of Morals", (1966) 75 Yale Law Journal 1001. 30 Wollheim, "Crime, Sin and Mr Ju s t i c e Devlin" ,(1959) 13 Encounter 34. See also Nagel, "The Enforcement of Morals" i n Kurtz (ed.) Moral Problems i n Contemporary Society (Englewood C l i f f s , N.J.: Prentice-Hall, 1969) pp.137-160. 8 9 A s o n e o b s e r v e r n o t e s , t h e l i b e r a l c r i t i q u e o f D e v l i n ' s p o s i t i o n o n c r i m i n a l l a w a n d m o r a l i t y b e c a m e t h e o r t h o d o x y o f t h e 1 9 6 0 s . ( 3 1 ) I n C a n a d a , t h e b a n n e r w a s t a k e n u p b y M o r t o n i n h i s b r i e f b u t i n f l u e n t i a l c o l l e c t i o n o f l e c t u r e s o n t h e f u n c t i o n o f c r i m i n a l l a w i n 1 9 6 2 . ( 3 2 ) H e a s k e d , " I s t h e c r i m i n a l l a w t h e r e t o s a v e t h e c i t i z e n f r o m s i n o r t o s e e t h a t h e g e t s h o m e s a f e l y ? " H e o p t e d f o r t h e l a t t e r . A s f o r t h e e x i s t i n g s t a t e o f C a n a d i a n c r i m i n a l l a w , t h e r e w e r e , i n h i s e s t i m a t i o n , a n u m b e r o f p r o h i b i t i o n s i n t h e Criminal Code i n t h e " s a v e t h e m f r o m s i n " c a t e g o r y w h i c h s h o u l d b e r e m o v e d . ( 3 3 ) - H i s c o n c e p t i o n o f t h e c r i m i n a l l a w w a s t h a t i t s h o u l d p l a y a n e d u c a t i v e o r i n c u l c a t i v e r o l e w i t h i n a v e r y m o d e s t s p h e r e o f a c t i o n : ( 3 4 ) T h e t h e s i s t h a t o n e o f t h e f u n c t i o n s o f c r i m i n a l l a w i s t o a c t a s a s o c i a l c o n d i t i o n i n g d e v i c e p e r m i t s a s e n s i b l e s o l u t i o n t o t h e p r o b l e m o f t h e r e l a t i o n s h i p b e t w e e n l a w a n d m o r a l i t y . I n t h i s t h e s i s , t h e f u n c t i o n o f c r i m i n a l l a w i s n o t t o e n f o r c e , b u t t o c r e a t e o r h e l p c r e a t e a c o m m o n m o r a l i t y . T h e p u r p o s e i s n o t t o r e f l e c t , b u t t o c r e a t e o r r e i n f o r c e t h e d e e p a n d u n g o v e r n a b l e f e e l i n g s l i k e i n d i g n a t i o n , d i s g u s t a n d t h e s e n s e o f t h e a b o m i n a b l e , b y w h i c h t h e o r d i n a r y c i t i z e n i s , i n p a r t , c o n t r o l l e d . T h e n e c e s s i t y f o r s o c i e t y t o c r e a t e a n d p e r p e t u a t e s u c h a c o n d i t i o n i n g d e v i c e e x i s t s , i n m y v i e w , o n l y i n t h e a r e a s o f p r o t e c t i o n t o w h i c h t h e W o l f e n d e n C o m m i t t e e r e f e r r e d , i . e . b o u n d s o f common m o r a l i t y s h o u l d e n c o m p a s s o n l y t h e p r e s e r v a t i o n o f p u b l i c o r d e r a n d d e c e n c y , t h e p r o t e c t i o n o f t h e c i t i z e n f r o m i n j u r y , a n d t h e p r e v e n t i o n o f e x p l o i t a t i o n o f t h e w e a k . 3 1 L e e , supra f n . 9 a t 2 8 . 3 2 M o r t o n , T h e F u n c t i o n o f C r i m i n a l L a w i n 1 9 6 2 ( T o r o n t o : C . B . C . P u b l i c a t i o n s , 1 9 6 2 ) . 3 3 I b i d a t 5 - 7 . 3 4 I b id a t 3 8 . 90 Hence, the p r e v a i l i n g l e g a l philosophy of the 1960s advocated and j u s t i f i e d the actions taken by Parliament i n the C r i m i n a l L a w A m e n d m e n t A c t i n 1969: gambling i n the form of buying l o t t e r y t i c k e t s or playing other games of chance might be c r i t i c i z e d as f o o l i s h and foolhardy, but i t was not of a nature deserving universal criminal condemnation.(35) During t h i s same time period, however, the over-reach of the criminal law was being c r i t i c i z e d not only by l e g a l philosophers but also by s o c i a l s c i e n t i s t s . V i c t i m l e s s C r i m e ; t h e L i m i t s o f t h e C r i m i n a l S a n c t i o n A f t e r decades of focussing almost excl u s i v e l y on criminal behaviour and theories of crime causation, s o c i o l o g i s t s and criminologists began to turn t h e i r attention to the r o l e that criminal law i t s e l f plays i n the c r i m i n a l i z a t i o n process. The l a b e l l i n g perspective, which came to the fore i n t h i s era, emphasized that criminal behaviour i s nothing more than what the law says i t i s . Becker stressed t h i s i n h i s famous statement:(36) 35 On the t o p i c of gambling's pot e n t i a l for harm, Geis notes that i t i s one of the less serious vices i n regard to i t s d i r e c t harm to the i n d i v i d u a l : " I t has no physical consequences except by i n d i r e c t i o n . I t i s not apt to be p a r t i c u l a r l y time consuming. I t may engender a philosophy rather u n r e a l i s t i c i n terms of mundane existence, but i t i s arguable whether such a philosophy i s more detrimental than enabling to an i n d i v i d u a l . " Not the Law's Business (Rockville: N.I.M.H., 1972) p. 245. 36 Becker, Outsiders: Studies i n the Sociology of Deviance (New York: The Free Press, 1963) p. 9. 91 [S]ocial groups create deviance by making those rules whose i n f r a c t i o n constitutes deviance, and by applying those rules to p a r t i c u l a r people and l a b e l i n g them as outsiders. From t h i s point of view, deviance i s not a q u a l i t y of the act the person commits, but rather a consequence of the application by others of rules and sanctions to an "offender". The deviant i s one to whom that l a b e l has successfully been applied; deviant behavior i s behavior that people so l a b e l . (Emphasis i n the o r i g i n a l ) Accordingly, many forms of criminal behaviour could be "cured" by changing the criminal law. The primary area i n which the removal or repeal of the criminal law was advocated, was that of vice, e.g. sexual conduct, drug use, p r o s t i t u t i o n and gambling. The term "victimless crime" was f i r s t coined by Schur, a lawyer and s o c i o l o g i s t , i n 1965 when he attempted an empirical study of the costs or consequences of using the criminal law to sanction private, consensual practices.(37) Perhaps the most obvious consequence i s that such laws are criminogenic: they create crime and criminals and drive the provision of the forbidden goods and services underground onto the black market where they may be monopolized by *organized crime'. These laws tend to be neither routinely enforced nor obeyed, which creates disrespect for the law as a whole. Because they are concerned almost exclu s i v e l y with behaviour that takes place i n private, when these laws are 37 Schur, Crimes Without Victims: Deviant Behavior and  Public P o l i c y (Englewood C l i f f s , N.J.: Prentice-Hall, 1965. He expounds on the same theme i n a debate with the philosopher, Bedau i n Victimless Crimes: Two Sides of a  Controversy (Englewood C l i f f s , N.J.: Prentice-Hall, 1974). 92 enforced, objectionable law enforcement practices, including p o l i c e corruption, are often used.(38) There are also substantial human costs: the curtailment of i n d i v i d u a l freedom of choice and personal degradation. Schur •concludes:(39) To marshall empirical evidence as has been done here i s not to argue for an extreme u t i l i t a r i a n i s m i n which i t i s assumed that some kind of quantitative c a l c u l a t i o n can produce authoritative answers to complex moral questions. In the absence of universal moral consensus, assessments of evidence and weighings of alt e r n a t i v e s w i l l necessarily e n t a i l reference to p a r t i c u l a r value hierarchies; the reasoning by which an analyst would support h i s judgement can, of course, be made known and i n turn be assessed by others. Inevitably, a u t i l i t a r i a n or r e l a t i v i s t i c stance implies uncertainty. One who adopts such a stance denies himself as well as others the comfort of absolutes. Yet such uncertainty may not be inappropriate to a world i n which presumably less-than-perfect p o l i c y decisions are made continuously ... I f we cannot have c e r t a i n t y i n our recourse to the criminal law, perhaps at l e a s t we would be wise to exercise r e s t r a i n t . The solution he of f e r s i s "decriminalization", not so much because the targeted behaviours have been wrongly defined as s o c i a l problems, but because they are s o c i a l problems better dealt with by other mechanisms. In other words, decriminalization does not necessarily mean the complete absence of controls, j u s t of criminal sanctions. 38 Packer notes that gambling offences share with narcotics laws the dubious d i s t i n c t i o n of having produced the major portion of the U.S. Supreme Court's decisions on i l l e g a l searches, wiretapping and other forms of e l e c t r o n i c surveillance, and entrapment: The Limits of the Criminal  Sanction (Stanford: Stanford U.P., 1968). 39 Schur and Bedau, supra fn. 37 at 46-7. 93 Doing nothing i s r a r e l y a v i a b l e alternative.(40) Indeed, Schur notes that the means by which goods and services might be l e g a l l y provided under a p o l i c y of decriminalization are important considerations which may influence the acceptance of s p e c i f i c p o l i c y proposals. Accordingly, medical or administrative regulation of vices i s often proposed as a substitute method of s o c i a l control.(41) Schur's campaign of decriminalization, premised on the notion that laws proscribing v i c t i m l e s s crime produce more s o c i a l harm than good, has c l e a r and d i r e c t l i n k s to l i b e r a l l e g a l theory. He was joined i n h i s task by several eminent s o c i a l scientists,(42) perhaps none more i n f l u e n t i a l than Herbert Packer. In h i s seminal work, The Limits of the  Criminal Sanction, he addressed himself to what the criminal law might best, and most e f f e c t i v e l y , be used for, bearing in mind i t s enormous costs. To t h i s end he constructed a 40 Schur, s u p r a fn. 37 at 178. The d i f f e r e n t models of decriminalization and t h e i r l e g a l implications are discussed i n f r a i n Chapter 6. 41 I b i d . Thus, for example, the decriminalization of l i q u o r consumption and gambling has generally r e l i e d on alternate p o l i c i e s of t i g h t administrative controls. See, for example, the discussion of alcohol control by Levine: "The B i r t h of American Alcohol Control etc " (1985) Contemporary Drug  Problems 63, and of gaming control by Skolnick: House of  Cards s u p r a fn. 4. 42 e.g. Kadish, "The C r i s i s of Over-Criminalization", (1967) 374 Annals of the American Academy of P o l i t i c a l and S o c i a l  Science 157; Skolnick, "Coercion to Virtue: The Enforcement of Morals", (1968) 41 Southern C a l i f o r n i a Law Review 588; Geis, s u p r a fn. 35. 94 "bench mark" for the optimal use of the criminal sanction:(43) The c r i t e r i a for choice seem so c l e a r that i t may be t r i t e to rehearse them. They include the following: (1) The conduct i s prominent i n most people's view of s o c i a l l y threatening behavior, and i s not condoned by any s i g n i f i c a n t segment of society. (2) Subjecting i t to the criminal sanction i s not inconsistent with the goals of punishment. (3) Suppressing i t w i l l not i n h i b i t s o c i a l l y desirable conduct. (4) I t may be dealt with through even-handed and nondiscriminatory enforcement. (5) Cont r o l l i n g i t through the criminal process w i l l not expose that process to severe q u a l i t a t i v e or quantitative s t r a i n s . (6) There are no reasonable a l t e r n a t i v e s to the criminal sanction for dealing with i t . Applying these c r i t e r i a , he concluded that sexual practices, obscene publications, p r o s t i t u t i o n , drug use, abortion and gambling should not be subject to criminal sanctions. He f e l t that gambling i n p a r t i c u l a r was an appropriate f i e l d i n which to experiment with alternate s o c i a l sanctions, because of i t s r e l a t i v e l y low opprobrium r e l a t i v e to other vices.(44) The work of Schur, Packer and others on the appropriate use of the criminal law i s i n many respects l e s s abstract than the analyses of the l e g a l philosophers, being based on empirical data and o f f e r i n g s p e c i f i c p o l i c y proposals. This development i s taken a step further by Morris and Hawkins i n 43 Packer, supra fn. 38 at 296. 44 Ibid at 353. 95 The Honest P o l i t i c i a n ' s Guide to Crime Control.(45) As i t s t i t l e suggests, the thrust of t h i s book i s e s s e n t i a l l y pragmatic, though c l e a r l y informed by the t h e o r e t i c a l debates of the 1960s. The f i n a n c i a l costs of the e x i s t i n g over-reach of the criminal law are emphasized to a much greater extent that they were i n the work of the other analysts, which probably r e f l e c t s the f a c t that by the c l o s i n g years of the decade, affluence was being replaced by rampant i n f l a t i o n and economic recession. In the decriminalization of gambling Morris and Hawkins saw an opportunity not only to reduce the scope of the criminal law and cut the costs of law enforcement, but also to generate revenues fo r the state:(46) We do not face a choice between abolishing or l e g a l i z i n g gambling; the choice i s between leaving gambling and the vast p r o f i t s which accrue from i t i n the hands of criminals or c i t i z e n s taking i t over and running i t for the benefit of society or, by l i c e n s i n g and taxation measures, c o n t r o l l i n g i t . In other words, they argue that an increase i n state revenues could be a b e n e f i c i a l e f f e c t of a streamlined criminal law. As w i l l be discussed i n the following section, however, others maintain that these f i s c a l benefits have been the primary cause i n the decriminalization of gambling. 45 (Chicago: University of Chicago Press, 1970). 46 Ib i d at 11. 96 Making and Unmaking Criminal Law As the preceding pages indicate, the i n t e l l e c t u a l climate of the 1960s favoured the kind of changes that were enacted i n the Criminal Law Amendment Act, 1969. I t i s tempting, therefore, simply to view t h i s enactment as an example of enlightened law-making: prudent and tolerant policy-makers f i n a l l y recognized the errors of past c r i m i n a l i z a t i o n e f f o r t s and made the necessary adjustments. To some extent, t h i s i s probably true. I t i s , however, u n l i k e l y to be the sole, or even the most compelling reason for the government's action. I f i t was, i t would make the absence of s i m i l a r enactments r e l a t i v e to other vices problematic. There had to be other factors which influenced the l e g i s l a t i v e process. This f i n a l section of the chapter w i l l attempt to i s o l a t e what those other factors might have been. The North American experience with the criminal p r o h i b i t i o n of alcohol consumption a f t e r the f i r s t world war has provided an ide a l opportunity to study the factors which influence the making and unmaking of criminal law and the l i m i t s of the criminal sanction. One of the most enlightening analyses i s Gusfield's Symbolic Crusade, which exposes the symbolic functions that law reform often serves. He portrays the enactment of the 18th Amendment to the con s t i t u t i o n of the United States, which enacted Prohibition, as the high point of the struggle to assert the 97 public dominance of 19th century middle-class values. I t represented "the v i c t o r y of Protestant over Catholic, r u r a l over urban, t r a d i t i o n over modernity, the middle c l a s s over both the upper and lower strata".(47) On the r e l a t i o n s h i p between law and status, he observes,(48) Since governmental actions symbolize the p o s i t i o n of groups i n the status structure, seemingly ceremonial or r i t u a l acts of government are often of great importance to many s o c i a l groups. Issues which seem f o o l i s h or impractical items are often important for what they symbolize about the s t y l e or culture which i s being recognized or derogated. Being acts of deference or degradation, the i n d i v i d u a l finds i n governmental action that h i s own perceptions of h i s status i n the society are confirmed or rejected. The f a c t that the Prohibition law was not and perhaps could not be enforced n u l l i f i e d i t s instrumental e f f e c t s but not i t s symbolic import; the r e s p e c t a b i l i t y of i t s supporters was honoured i n the breach. Referring to gambling, Gusfield notes that i n s t i t u t i o n a l i z e d systems of evasion have often been maintained over very long periods of time without damaging the symbolic status and s o c i a l v a l i d i t y of the l e g a l norms.(49) Applying h i s observations to the Canadian context, i t i s possible to interpret the l e g a l norms which prevailed before 1969 i n r e l a t i o n to gambling, and p a r t i c u l a r l y l o t t e r i e s , as symbolizing the dominance of Anglo-Protestant 47 Gusfield, Symbolic Crusade (Urbana: University of I l l i n o i s Press, 1963) p.7. 48 Ibi d at 11. 49 Ibid at 126. 98 values. As the previous chapters c l e a r l y demonstrate, l o t t e r i e s were heavily favoured i n Catholic Quebec, but attempts within the province to evade federal prohibitions or to have the Criminal Code amended or new l e g i s l a t i o n enacted were s i n g u l a r l y unsuccessful. I l l i c i t gambling flourished. Nonetheless, the dominant l e g a l values were those of English Canada. The repeal of the criminal p r o h i b i t i o n of l o t t e r y schemes may be explained i n part by the strengthening of Quebec's power i n Canada's p o l i t i c a l scheme which took place i n the 1960s - the "-Quiet Revolution'. Quebec i n the 1950s has been described as "a picture of s o c i a l and p o l i t i c a l backwardness".(50) A decade l a t e r , Quebec l o s t i t s profound sense of i n f e r i o r i t y : ( 5 1 ) Everywhere there was a new self-confidence, a new sense of d i r e c t i o n , a new sense that Quebec people were highly competent and q u a l i f i e d , capable of developing an advanced,modern technological society based on t h e i r own resources and t h e i r own a b i l i t i e s . This alone was a major revolution, from which much else was to flow. Among these consequences was the emergence of Quebec as a force to be reckoned with i n f e d e r a l - p r o v i n c i a l r e l a t i o n s and a d i s t i n c t enhancement i n the s o c i a l status of francophone culture. Increasingly, Quebec had the power to achieve changes which had eluded i t s grasp since before Confederation.(52) The decriminalization of l o t t e r y schemes 50 Stevenson, U n f u l f i l l e d Union (3rd ed.) (Toronto: Gage, 1989) p. 99. 51 Fitzmaurice, Quebec and Canada (London: Hurst, 1985) p. 55. 52 For a more det a i l e d discussion of t h i s transformation see, for example, Morin, Quebec versus Ottawa (Toronto: 99 i s a r g u a b l y j u s t one e x a m p l e o f t h e e f f e c t s o f t h i s new-f o u n d p o w e r . A n a l y z i n g t h e r e p e a l o f t h e P r o h i b i t i o n l a w , G u s f i e l d h i g h l i g h t s t h e r o l e t h a t e c o n o m i c f a c t o r s p l a y e d i n t h e p r o c e s s . The D e p r e s s i o n s t r e n g t h e n e d t h e demand f o r i n c r e a s e d e m p l o y m e n t a n d t a x r e v e n u e s w h i c h a r e - o p e n e d b e e r a n d l i q u o r i n d u s t r y w o u l d b r i n g . ( 5 3 ) M o r e r e c e n t r e s e a r c h o n t h e f a c t o r s p r e c i p i t a t i n g t h e l e g a l i z a t i o n o f g a m b l i n g i n t h e U n i t e d S t a t e s h a s a l s o f o c u s s e d o n t h e i m p e t u s o f e c o n o m i c p r e s s u r e s . F o r e x a m p l e , i n t h e i r s t u d y o f l e g a l c o n t r o l s o n v i c e i n N e v a d a , G a l l i h e r a n d C r o s s e x p l a i n t h a t t h e e n a c t m e n t o f l i b e r a l i z i n g l e g i s l a t i o n h a d l i t t l e t o do w i t h m o r a l l y e n l i g h t e n e d l a w - m a k i n g a n d a l o t t o do w i t h e c o n o m i c c o n s i d e r a t i o n s . ( 5 4 ) I n d e e d , i n many a r e a s o f t h e U n i t e d S t a t e s , t h o u g h n o t i n C a n a d a , l e g a l i z e d g a m b l i n g was e x p r e s s l y r a t i o n a l i z e d o n t h e g r o u n d s o f i t s r e v e n u e - r a i s i n g p o t e n t i a l . ( 5 5 ) A s one A u s t r a l i a n c o m m e n t a t o r n o t e s , m o d e r n -U n i v e r s i t y o f T o r o n t o P r e s s , 1976) a n d McWhinney, Quebec a n d  t h e C o n s t i t u t i o n 1960-1978 ( T o r o n t o : U.T.P., 1 9 7 9 ) . 53 G u s f i e l d , supra f n . 47 a t 127. 54 G a l l i h e r a n d C r o s s , M o r a l s L e g i s l a t i o n W i t h o u t M o r a l i t y (New B r u n s w i c k , N . J . : R u t g e r s U n i v e r s i t y P r e s s , 1 9 8 3 ) . 55 S e e , f o r e x a m p l e , The T w e n t i e t h C e n t u r y F u n d , E a s y Money (New Y o r k : T w e n t i e t h C e n t u r y F u n d , 1974) a n d D o m b r i n k , O u t l a w B u s i n e s s m e n (Ph.D. T h e s i s ) ( U n i v e r s i t y o f C a l i f o r n i a , B e r k e l e y , 1 9 8 1 ) . 100 i . e . permissive - gambling l e g i s l a t i o n i s being shaped by p r i n c i p l e s of economic u t i l i t y : ( 5 6 ) [G]ambling i s increasingly being evaluated as to i t s external productive e f f e c t s . I t must now be seen to have a t e l e o l o g i c a l purpose - ei t h e r to generate welfare revenues, or to eradicate i l l e g a l gambling, or to r e v i t a l i z e a stagnant regional economy. By the l a t e 1960s, Canada, l i k e most western nations, was experiencing the onset of f i s c a l c r i s i s . ( 5 7 ) S i g n i f i c a n t l y , the Criminal Law Amendment Act d i d not simply decriminalize l o t t e r y schemes and throw them open to private enterprise. Rather, they were to be run by or on behalf of the government, federal or p r o v i n c i a l , with concomitant benefits to public c o f f e r s , or they were to provide additional or alternate sources of revenue for charitable or r e l i g i o u s organizations. Perhaps the moral r e d e f i n i t i o n of these forms of gambling was as much a r e s u l t of i t s perceived economic benefits as i t was of p h i l o s o p h i c a l l y enlightened lawmaking. The explanation for the contraction of the ro l e criminal law i n r e l a t i o n to l o t t e r y schemes i s undoubtedly multi-dimensional. The foregoing discussion has attempted to 56 McMillen, "The Sting: State Regulation of Gambling", Unpublished paper presented to the 3rd Law and Society Conference i n Canberra, 1985. 57 For a det a i l e d discussion of t h i s era see O'Connor, The  F i s c a l C r i s i s of the State (New York: St Martin's Press, 1973) . 101 explore at l e a s t some of i t s d i f f e r e n t aspects i n order to provide a measure of understanding as to why t h i s l e g a l change took place. Having examined the how and why of the decriminalization of l o t t e r y schemes i n Canada, the t h e s i s now turns to an examination i t s l e g a l consequences. A reduction i n the scope of the criminal law, p a r t i c u l a r l y i n a federal system of government, can have a broader c o n s t i t u t i o n a l impact and, because i t r a r e l y e n t a i l s *doing nothing', often merely transfers r e s p o n s i b i l i t y f o r c o n t r o l l i n g the targeted behaviour onto another branch of the l e g a l system. Accordingly, the remainder of the t h e s i s w i l l assess the impact t h i s change has had, p a r t i c u l a r l y i n the areas of c o n s t i t u t i o n a l and administrative law. 102 C H A P T E R F O U R L O T T E R Y S C H E M E S A N D T H E C O N S T I T U T I O N O F C A N A D A ( 1 ) In a study of the law of gambling conducted f o r the United States government, i t was astutely observed that reform "of the heart", that i s , of gambling law, "may have .... consequences i n the extremities", and that "seldom can any issue be worked out by the consideration of only one body of law."(2) The remaining chapters w i l l be devoted to examining some of the more s i g n i f i c a n t consequences of the decriminalization of l o t t e r y schemes i n Canada, the f i r s t being i t s implications for the country's most fundamental l e g a l rules, i t s c o n s t i t u t i o n a l law. J u r i s d i c t i o n o v e r Gambling Almost from the outset of Confederation, with i t s a l l o c a t i o n of powers between the federal and p r o v i n c i a l l e v e l s of government, the power to l e g i s l a t e i n r e l a t i o n to gambling has been a contentious issue. As was discussed i n the f i r s t chapter, two years a f t e r the passage of the B r i t i s h N o r t h A m e r i c a A c t (now the C o n s t i t u t i o n A c t , 1 8 6 7 ) , the province of Quebec enacted A n A c t t o A m e n d t h e L a w s 1 Some of the ideas i n t h i s chapter were f i r s t developed i n an a r t i c l e written by the author and a co-author: Osborne and Campbell, "Recent Amendments to Canadian Lottery and Gaming Laws etc.", (1988) 26 Osaoode H a l l Law Journal 19. 2 U.S. Department of J u s t i c e . L.E.A.A. The development of  the Law of Gambling 1776-1976 (Washington, D.C: U.S. Government Pr i n t i n g O f f i c e , 1977) p. 933. 103 Respecting Bazaars and Lotteries.(3) This statute was permissive i n nature, e f f e c t i v e l y repealing prohibitory c o l o n i a l enactments within the province, and i t continued to be enforced despite subsequent federal l e g i s l a t i o n of a contrary t e n o r . ( 4 ) From 1869 to 1892, the Quebec government ignored the federal p r o h i b i t i o n of l o t t e r i e s , r e l y i n g on the province's more l i b e r a l provisions. Shortly before the Criminal Code was enacted i n 1892, however, the v a l i d i t y of the Quebec statute was challenged i n the courts, a l b e i t at a rather low l e v e l . In R. v. Harper,(5) the Act Respecting Lotteries and Bazaars was held to be u l t r a v i r e s the province. The defendants had argued that l o t t e r i e s , being misdemeanours under the common law, did not f a l l within the criminal law power given to the federal government i n s.91(27) of the B r i t i s h North America Act, 1867 (now the Constitution Act, 1867) . The magistrate l e f t t h i s issue open, deciding that the federal government had enacted a n t i - l o t t e r y l e g i s l a t i o n under "the power which i s expressly given to i t to pass laws to maintain peace and good order i n Canada, which, besides, i s inherent to i t s 3 S.Q. 1869, c.36. I t provided that, "Notwithstanding every provision to the contrary" l o t t e r i e s and bazaars may be held where t h e i r object i s to a s s i s t r e l i g i o u s , charitable or educational establishments; "provided the things offered or to be disposed of by l o t t e r y do not consist of sums of money, notes, bank-notes, bonds, debentures or other negotiable s e c u r i t i e s of l i k e nature." 4 e.g. The Lott e r i e s Amendment Act, S.C. 1883, c.36. 5 (1892) 15 The Legal News 179 (Quebec Magistrates Court). 104 c o n s t i t u t i o n and i t s sovereign power."(6) The Quebec l e g i s l a t i o n was a dead l e t t e r and, shortly thereafter, Parliament enacted the Criminal Code, including i n i t the p r o h i b i t i o n of l o t t e r i e s and other forms of gaming. This i n i t i a l j u r i s d i c t i o n a l t u s s l e over l o t t e r i e s and bazaars i l l u s t r a t e s the r e a l i t y of federalism i n Canada. The d i v i s i o n of powers between a central and regional governments i s generally regarded as an e s s e n t i a l feature of a federal constitution.(7) One observer notes that Canadian federalism, throughout most of i t s history, has been characterized by c o n f l i c t and controversy regarding the d i v i s i o n of powers. Federal and p r o v i n c i a l governments have sought to expand t h e i r sphere of l e g i s l a t i v e power at one another's expense, and have not infrequently accused each other of poaching on the power guaranteed them by the constitution.(8) The issue of j u r i s d i c t i o n over gaming re-emerged f i f t y years l a t e r a f t e r a number of provinces enacted supplementary measures to curb gambling i n the face of what were perceived to be inadequate federal controls. For 6 Ibi d at 185. 7 e.g. Dicey, Introduction to the Study of the Law of the  Constitution 10th ed. (London: Macmillan, 1961, p. 151 and Wheare, Federal Government 4th ed. (New York: Oxford University Press, 1964) p. 10. 8 Stevenson, "The D i v i s i o n of Powers" i n Simeon (ed.) D i v i s i o n of Powers and Public Policy (Toronto: University of Toronto Press, 1985) pp. 71-123 at 71. 105 example, i n 1942, the Legislature of Ontario passed the Gaming and Betting Act,(9) which provided that a court may, on application, order the clos i n g f or a period of up to a year, of premises i n respect of which there had been a conviction under the disorderly house, betting and bookmaking provisions of the Criminal Code, within the previous three months. Where a cl o s i n g order was made and the premises were thereafter used i n v i o l a t i o n of the order, the registered owner and any person found therein at the time were deemed to have v i o l a t e d the order and were g u i l t y of an offence. In enacting t h i s l e g i s l a t i o n , the province r e l i e d on i t s j u r i s d i c t i o n over property r i g h t s i n the province. In R. v. Lamontagne,(10) however, the Ontario Court of Appeal found the Gaming and Betting Act to be i n v a l i d , being an encroachment on the federal criminal law power. The a c t i v i t y which v i o l a t e d the cl o s i n g order and exposed the accused to punishment, e.g. keeping a common gaming house, was already an offence under the Code. Accordingly, the Court characterized the Act as a statute which operated e s s e n t i a l l y as criminal law i n a f i e l d already covered by the Criminal Code.(11) 9 S.O. 1942, c.19. 10 [1945] 4 D.L.R. 161 (Ont. C.A.). 11 For further discussion of t h i s case see Abel, Laskin's  Canadian Constitutional Law 4th ed. (Toronto: Carswell, 1975) p. 369. 106 The Supreme Court of Canada was f i r s t confronted with the issue of the power to l e g i s l a t e i n r e l a t i o n to gambling i n 1954 i n J o h n s o n v . A t t o r n e y G e n e r a l f o r A l b e r t a . ( 1 2 ) The p r o v i n c i a l statute being challenged i n t h i s instance was the S l o t M a c h i n e A c t of Alberta,(13) which provided that s l o t machines were incapable of ownership within that province and could therefore be confiscated on ap p l i c a t i o n to the courts. The province maintained that t h i s was a v a l i d exercise of i t s powers over property and c i v i l r i g h t s and matters of a l o c a l and private nature contained i n s s . 9 2 ( 1 3 ) and 9 2 ( 1 6 ) of the B . N . A . A c t . This contention was rejected by the majority. Mr. Jus t i c e Rand stated that the C r i m i n a l C o d e dealt comprehensively with the subject matter of the pr o v i n c i a l statute, which was patently that of gambling. Deploring t h i s attempt to displace the C o d e , he concluded that any l o c a l l e g i s l a t i o n of a supplementary nature that would tend to weaken or confuse that enforcement would be an interference with the exclusive power of Parliament.(14) The 12 [1954] S.C.R. 127. 13 R.S.A. 1942, c.333. Several of the other provinces had also enacted l e g i s l a t i o n directed towards s l o t machines i n the 1920s and 1930s. They had mixed success at surviving c o n s t i t u t i o n a l challenges at the l e v e l of the p r o v i n c i a l appellate court: i n R . v . K a r m i n o s , [1936] 2 D.L.R. 353, the Saskatchewan Court of Appeal struck down that province's s l o t machine statute; i n R . v . L a n e , [1937] 1 D.L.R. 212, however, the Supreme Court of New Brunswick found s i m i l a r s l o t machine l e g i s l a t i o n to be within the l e g i s l a t i v e competence of the province. 14 S u p r a fn. 12 at 138. 107 opinion expressed by Mr. J u s t i c e Locke was even more emphatic:(15) The determination of t h i s matter does not, i n my opinion, depend alone upon the f a c t that i f the p r o v i n c i a l l e g i s l a t i o n was lawfully enacted there would be a d i r e c t clash with the terms of the C r i m i n a l C o d e ; rather i t i s my opinion that the main reason i s that the exclusive j u r i s d i c t i o n to l e g i s l a t e i n r e l a t i o n to gaming l i e s with Parliament under head (27) of s.91. The most recent attempt by a province to enter the f i e l d of gaming was the "voluntary tax" scheme i n s t i t u t e d by the c i t y of Montreal i n 1968, which was b r i e f l y discussed i n Chapter Two. The c i t y council approved a fund-raising scheme whereby the general public could become voluntary taxpayers of the c i t y by making monthly contributions of $2, thus becoming e l i g i b l e to p a r t i c i p a t e i n a monthly draw for valuable prizes i n the form of s i l v e r ingots. I t was widely recognized that t h i s was a barely disguised l o t t e r y and, i n a b r i e f judgement, the Supreme Court of Canada o f f i c i a l l y characterized i t as such, s t r i k i n g i t down as being i n contravention of the p r o h i b i t i o n of l o t t e r i e s i n the C r i m i n a l C o d e . ( 1 6 ) From 1982 to 1969, therefore, the courts were quite c l e a r on the j u r i s d i c t i o n a l issue: l e g i s l a t i o n r e l a t i n g to 15 I b i d at 155. 16 C i t y o f M o n t r e a l v . A t t o r n e y G e n e r a l f o r Q u e b e c , [1970] S.C.R. 332. By the time t h i s decision was issued, l a t e i n 1969, i t had already been overtaken by the amendments to the C r i m i n a l C o d e permitting state-operated and state-licensed l o t t e r y schemes. 108 gaming and l o t t e r i e s was within the exclusive j u r i s d i c t i o n of Parliament. Were i t not for the express terms of the C r i m i n a l C o d e i n i t i a l l y enacted i n 1969 and broadened i n 1985, i t i s c e r t a i n that p r o v i n c i a l l e g i s l a t u r e s would have had no j u r i s d i c t i o n to permit the operation of l o t t e r y schemes. With the proclamation of those amendments to the C o d e , the j u r i s d i c t i o n a l issue was recast i n terms of whether the federal criminal law power can, i n the words of one of the few c o n s t i t u t i o n a l scholars to analyze the issue, "sustain the establishment of a regulatory scheme i n which an administrative agency or o f f i c i a l exercises discretionary authority."(17) I t has already been noted that the model of decriminalization adopted for l o t t e r y schemes by Parliament i n 1969 was not one of t o t a l withdrawal of the law from the a c t i v i t y . Rather, l o t t e r i e s and other games of chance would be permitted only where they were conducted by the federal government or conducted or authorized by a p r o v i n c i a l government. S p e c i f i c a l l y , what was then S.179A of the C o d e provided that i t was lawful "(a) f o r the Government of Canada to conduct and manage a l o t t e r y scheme i n accordance with regulations made by the Governor i n Council ... (b) for the government of a province ... to conduct and manage a l o t t e r y scheme ... i n accordance with any law enacted by the l e g i s l a t u r e of that province ... (c) f o r a charitable or r e l i g i o u s organization, under the authority of a licence issued by the Lieutenant-17 Hogg, Constitutional Law of Canada 2nd ed. (Toronto: Carswell, 1985) p. 415. 109 Governor i n Council ... to conduct and manage a l o t t e r y scheme i n that province ... (d) f o r an a g r i c u l t u r a l f a i r or e x h i b i t i o n ... under the authority of a licence issued by the Lieutenant-Governor i n Council ... to conduct and manage a l o t t e r y scheme i n that province ... and (e) for any person, under the authority of a l i c e n c e issued by the Lieutenant-Governor i n Council ... to conduct and manage a l o t t e r y scheme at a public place of amusement i n that province ... Whereas Abel states that the federal authority i n r e l a t i o n to criminal law comprises not only the creation of new crimes, but also the l e g a l i z a t i o n of conduct which was criminal at Confederation or which was subsequently proscribed as criminal,(18) the s i m p l i c i t y of h i s p o s i t i o n seems best suited to situations where there i s a t o t a l withdrawal of the law. Hogg, on the other hand, points out that the courts have consistently struck down regulatory schemes set up within the confines of the criminal law.(19) In large part, the cases to which he r e f e r s concerned the establishment of f e d e r a l l y constituted regulatory agencies which had broad discretionary powers i n an i n d i r e c t attempt by the federal government to do what i t could not do directly.(20) S e c t i o n 1 7 9 A of the C o d e can be distinguished from these examples on the basis that they enable the 18 Abel, s u p r a fn. 11 at 825. 19 Hogg, s u p r a fn. 17 at 416-7. 20 e.g. A t t o r n e y G e n e r a l o f O n t a r i o v . R e c i p r o c a l I n s u r e r s [1924] A.C. 328 (P.C.) which struck down a section of the C r i m i n a l C o d e making i t an offence to carry on the business of insurance without a licence from the federal Minister of Finance on the grounds that i t encroached on p r o v i n c i a l j u r i s d i c t i o n to regulate industry within a province. 110 exercise of p r o v i n c i a l j u r i s d i c t i o n rather than encroach upon it.(21) Nonetheless, Hogg also examines several provisions of the C o d e , including the l o t t e r y scheme enabling section, i n which c e r t a i n conduct i s prohibited, but a power of dispensation i s granted to an administrative authority and concludes that they too are open to c r i t i c i s m . (22) Two of the examples he c i t e s are s . 8 3 of the C o d e , (23) which exempts from the p r o h i b i t i o n of p r i z e f i g h t i n g "any boxing contest held with the permission or under the authority of an a t h l e t i c board or commission or s i m i l a r body established by or under the authority of the l e g i s l a t u r e of a province f o r the control of sport within a province". S e c t i o n . 2 8 7 , which has recently been invalidated by the Supreme Court of Canada,(24) exempted from the p r o h i b i t i o n of abortions, those approved by a p r o v i n c i a l l y regulated therapeutic abortion committee. The c o n s t i t u t i o n a l i t y of t h i s l a t t e r provision i n terms of the d i v i s i o n of powers was challenged i n one of a number 21 I t should be noted that the provision which allowed federal regulation of l o t t e r i e s i n the form of a s t a t e -conducted scheme was repealed i n 1985. This amendment w i l l be discussed i n greater d e t a i l i n f r a . 22 Hogg, s u p r a fn.17 at 417. 23 R.S.C. 1985, C.C-42. 24 In R . v . M o r g e n t a l e r e t a l . , (1988) 37 OC.C. (3d) 449, the section was found to contravene s . 7 of the C a n a d i a n C h a r t e r o f R i g h t s a n d F r e e d o m s . I l l of cases involving Dr. Henry Morgentaler.(25) In t h i s instance, the challenge was dismissed. The Chief J u s t i c e alone addressed himself to the issue of whether the federal government could decriminalize conduct by t r a n s f e r r i n g regulation of i t to a p r o v i n c i a l body. Laskin adopted the approach taken by Abel and stated that "Parliament may determine what i s not criminal as well as what i s , and may hence introduce dispensations or exemptions i n i t s criminal l e g i s l a t i o n . 1 1 (26) In Hogg's view, t h i s i n t e r p r e t a t i o n seems too broad since i t would permit the kind of regulatory-scheme-in-the-guise-of-criminal-law which has been consistently n u l l i f i e d i n the past. Regarding the l o t t e r y scheme provision, he expresses no opinion as to i t s v a l i d i t y beyond t h i s general caveat.(27) Instead, he p o s i t s , but does not apply, a t e s t of "colourability":(28) [T]he more elaborate the regulatory scheme, the more l i k e l y i t i s that the Court w i l l c l a s s i f y the dispensation or exemption as being regulatory rather than criminal. The r e a l i t y of the s i t u a t i o n i n r e l a t i o n to l o t t e r i e s and other games of chance i s that the provinces are generally happy with the arrangement and have no i n t e r e s t , at present, i n challenging i t . One could conclude that, i n 25 Morgentaler v. The Queen [1976] 1 S.C.R. 616. 26 Ibid at pp. 626-27. 27 Hogg, supra fn. 17 at 417. 28 Ibid. 112 t h i s instance, the end i s seen as j u s t i f y i n g the j u r i s d i c t i o n a l l y dubious means by which i t was achieved. The Interdeleqation of Power Apart from the d i v i s i o n of powers issue, there i s also a question to be addressed regarding whether or not the federal government has the power to act i n the p a r t i c u l a r way that i t did, i . e . by t r a n s f e r r i n g the control over l o t t e r y schemes to the provinces. In examining t h i s issue, one must bear i n mind not only the 1969 amendment, but also the further amendment of 1985, the r e s u l t of which was to divest the federal government of a l l authority to operate l o t t e r y schemes. In other words, the power to conduct and authorize l o t t e r i e s and other games of chance became the exclusive domain of the provinces. To an increasing extent, l e g i s l a t i v e bodies are unable to enact a l l necessary l e g i s l a t i o n for e f f e c t i v e government. They are, as the Law Reform Commission of Canada has pointed out, (29) unable to deal with a l l the pertinent issues i n adequate d e t a i l thus necessitating intermediate measures between enacting statutes and i n d i v i d u a l i z e d d e c i s i o n -making. Consequently, the pattern which has evolved i s for 29 Law Reform Commission of Canada, Report #26: Independent  Administrative Agencies (Ottawa: L.R.C.C., 1985) p. 17. 113 Parliament or a p r o v i n c i a l l e g i s l a t u r e to l e g i s l a t e a s k e l e t a l statutory scheme and then delegate to a subordinate body the power to enact the details.(30) This l e g i s l a t i v e strategy permits greater f l e x i b i l i t y i n applying broad provisions to changing circumstances, a f a s t e r administrative response, innovation and experimentation.(31) In s . 2 0 7 of the C r i m i n a l C o d e , Parliament has outlined general exemptions from the p r o h i b i t i o n of l o t t e r i e s and games of chance, leaving the authorization, l i c e n s i n g and control of the exceptions to the provinces.(32) The l a t t e r , however, are not subordinate to the federal authority. Rather, they are co-ordinate or equal i n status.(33) Unlike the Australian constitution, there i s i n the Canadian co n s t i t u t i o n no express power of interdelegation between federal and p r o v i n c i a l a u t h o r i t i e s . One view i s that there i s i n fact a c o n s t i t u t i o n a l p r o h i b i t i o n against i t : the i n c l u s i o n of the term "exclusively" i n s . 9 1 of the C o n s t i t u t i o n A c t , 1 8 6 7 , which describes the powers of the federal government, precludes the authorization of a 30 This was j u d i c i a l l y approved i n H o d g e v . T h e Q u e e n (1883) 8 A.C. 117 (P.C.). 31 Jones and de V i l l a r s , P r i n c i p l e s of Administrative Law (Toronto: Carswell, 1985) p. 58. 32 The d e t a i l s of the administrative mechanisms which have been set up by the provinces i n u t i l i z i n g t h e i r powers under s . 2 0 7 w i l l be examined i n greater d e t a i l i n Chapter 6 i n f r a . 33 Hogg, s u p r a fn. 17 at 80. 114 delegation of l e g i s l a t i v e power to any instrumentality, including a p r o v i n c i a l legislature.(34) The courts, though, have been somewhat more ambivalent, moving from an absolute r e j e c t i o n of the interdelegation of l e g i s l a t i v e power to the creation of exceptions. In C.P.R. v. Notre Dame de Bonsecours, f o r example, Lord Watson endorsed the following statement:(35) The Dominion cannot give j u r i s d i c t i o n , or leave j u r i s d i c t i o n , with the province. The p r o v i n c i a l parliament cannot give l e g i s l a t i v e j u r i s d i c t i o n to the Dominion parliament. I f they have i t , e i t h e r one or the other of them, they have i t by v i r t u e of the Act of 1867. I think we must get r i d of the idea that eit h e r one or the other can enlarge the j u r i s d i c t i o n of the other or surrender j u r i s d i c t i o n . A Royal Commission on Dominion-Provincial Relations reporting i n 1940 supported the idea of delegation,(36) but, a decade l a t e r , the Supreme Court rejected an interdelegation of powers between Parliament and a p r o v i n c i a l l e g i s l a t u r e as unconstitutional.(37) The so-c a l l e d Nova Scotia Interdelegation case, i n Hogg's opinion, 34 Driedger, "The Interaction of Federal and P r o v i n c i a l Law", (1976) 54 Canadian Bar Review 695 at 698. 35 [1899] A.C. 367 (P.C.) at 373. This was a remark made i n argument. Although not t e c h n i c a l l y binding, i t has been highly persuasive i n subsequent cases. 36 Cited i n Abel, supra fn. 11 at 2. A more recent government-commissioned study took a s i m i l a r p o s i t i o n : Canada. Task Force on Canadian Unity, A future Together:  Recommendations of the task Force on Canadian Unity (Ottawa, 1979) p. 104. 37 Attorney General for Nova Scotia v. Attorney General f o r Canada [1951] S.C.R. 31. 115 was based on the view that such interdelegation would disturb the scheme of the d i s t r i b u t i o n of powers i n the Constitution Act, 1867. Parliament and the Legislatures should not be permitted to agree to a l t e r that pattern i n the absence of e x p l i c i t c o n s t i t u t i o n a l authority. There being none, the Court would allow none to be implied.(38) Nonetheless, i t soon became c l e a r that t h i s decision was to have a r e s t r i c t e d application. The Nova Scotia statute at issue concerned the delegation of powers between l e g i s l a t i v e bodies. I t would have authorized the p r o v i n c i a l government to delegate to Parliament the power to l e g i s l a t e with respect to employment i n areas under p r o v i n c i a l j u r i s d i c t i o n . Reciprocally, the Nova Scotia Legislature was to receive from Parliament the power to make laws i n r e l a t i o n to employment i n industries under federal; j u r i s d i c t i o n . (39) What was struck down was an interdelegation of l e g i s l a t i v e power. Within a year of t h i s decision being handed down, the Supreme Court made i t c l e a r that t h i s was the precise extent of i t s a p p l i c a t i o n . In P.E.I. Marketing Board v. H.B. W i l l i s Inc.,(40) the Court upheld a delegation of power between Parliament and a p r o v i n c i a l l y appointed board. Mr J u s t i c e Kerwin stated,(41) 38 Hogg, supra fn. 17 at 296. 39 Russell, Leading Constitutional Decisions 3rd ed. (Ottawa: Carleton U.P., 1984) p.470-71. 40 [1952] 2 S.C.R. 392. 41 I b i d at 405. 116 Having been v a l i d l y established by the Legislature, [the p r o v i n c i a l board] has the capacity to receive and accept the authority authorized by Parliament to be conferred upon i t by the Governor-General i n Council. The Court r a t i o n a l i z e d that, rather than choosing i t s own executive o f f i c e r s for carrying out i t s l e g i s l a t i o n , the federal government had simply chose a p r o v i n c i a l body instead. The r o l e of that board was characterized as being p r i m a r i l y administrative rather than l e g i s l a t i v e . Accordingly, the question to be answered becomes one of whether or not the arrangement i n s.207 of the Criminal Code involves a proscribed delegation of l e g i s l a t i v e powers. The terms of s.207(1)(a) e x p l i c i t l y require the enactment of p r o v i n c i a l l e g i s l a t i o n as a prerequisite f o r state-conducted l o t t e r i e s and would appear to come within the r u l e enunciated i n the Nova Scotia Interdelegation case: 207.(1) Notwithstanding any of the provisions of t h i s Part r e l a t i n g to gaming and betting, i t i s lawful (a) for the government of a province, e i t h e r alone or i n conjunction with the government of another province, to conduct and manage a l o t t e r y scheme i n that province, or i n that and the other province, i n accordance with any law enacted by the l e g i s l a t u r e of  that province; (emphasis added). The power delegated to the Lieutenant Governor i n Council i n s.207(1)(b)-(d) to licence various bodies to conduct and manage l o t t e r y schemes, may, according to the wording of s.207(2), also involve l e g i s l a t i v e action on the part of the p r o v i n c i a l l e g i s l a t u r e . This subsection provides that a lice n c e may contain such terms and conditions as the Lieutenant Governor, or a person or authority designated by 117 him/her, "or any law enacted by the l e g i s l a t u r e of that province may prescribe". Even i f the reference to p r o v i n c i a l l e g i s l a t i o n i n s . 2 0 7 ( 2 ) were to be ignored, to come within the r u l e l a i d down i n P . E . I . M a r k e t i n g B o a r d , the Lieutenant Governor must be characterized as a p r o v i n c i a l board or agency. The cl o s e s t the Supreme Court of Canada has come to the issue i s in the A n t i - I n f l a t i o n R e f e r e n c e , ( 4 2 ) where Chief J u s t i c e Laskin acknowledged that there was a question whether Parliament had the power to delegate l e g i s l a t i v e authority to the Lieutenant Governor i n Council, made passing reference to the B r i t i s h Columbia Supreme Court decision i n E x p a r t e K l e i n y s , ( 4 3 ) but concluded that i t was not an issue which had to be decided i n that p a r t i c u l a r case. The B.C. judgement had upheld the delegation by Parliament to the Lieutenant Governor of a province of powers over the custody of insane persons, found i n the C r i m i n a l C o d e . On a close reading of t h i s case, however, i t i s c l e a r that the judge attached a great deal of s i g n i f i c a n c e to the f a c t that the Lieutenant Governor had an inherent prerogative power over the custody of insane persons by v i r t u e of the B.C. C o n s t i t u t i o n A c t , s . 6 5 of the B . N . A . A c t and the T e r m s o f 42 R e A n t i - I n f l a t i o n A c t , [1976] 2 S.C.R. 373 at 430-1. 43 [1965] 3 C.C.C. 102. 118 Union, (1872). In other words, s/he did not a c t u a l l y derive that power from the provisions of the Criminal Code:(44) The Crown as parens patriae i s e n t i t l e d , by i t s inherent prerogative, to the custody of a l l insane persons, for the purpose of protecting the community. I t i s extremely doubtful that a prerogative power to licenc e l o t t e r y schemes could be s i m i l a r l y maintained. Consequently, Ex parte Kleinys has questionable a p p l i c a t i o n i n the context of s.207 of the Code. The actual delegation of power i n s.207 has been considered by the courts i n only one instance to date, and i t was decided without reference to the r o l e of the Lieutenant Governor. In R. v. Furtney et al.,(45) the Crown appealed the respondents' a c q u i t t a l s on charges of counselling the conduct of bingo operations i n a manner not authorized pursuant to s.207, i . e . i n v i o l a t i o n of the terms and conditions issued by the Ontario Ministry of Consumer and Corporate Relations. At t r i a l , the p r o v i n c i a l court judge had acquitted them on the basis, i n t e r a l i a , that Parliament i n s.207 had improperly delegated i t s criminal law power to the provinces. On appeal, Mr. J u s t i c e Campbell of the Supreme Court of Ontario reversed t h i s f i n d i n g based on the argument that the scheme provided i n s.207 i s analogous to that set up under the federal F i s h e r i e s Act, 44 Ibid at 105, per Ruttan J . , quoting from R. v. Martin (1854), 2 N.S.R. 322. 45 Unreported decision, Supreme Court of Ontario, 13/9/88. This decision i s not being appealed. 119 which had been recently upheld by the p r o v i n c i a l Court of Appeal i n Re Peralta et a l . , and the Queen i n r i g h t of Ontario et al.(46) In Mr. J u s t i c e Campbell's understanding, [ i t ] upheld the delegation i n the federal F i s h e r i e s Regulations of power to a p r o v i n c i a l minister to issue f i s h i n g licences and to impose terms and conditions. The court held that the e f f e c t of the federal regulations was to set general p o l i c y and i n s e t t i n g i n d i v i d u a l f i s h i n g quotas within those p o l i c y guidelines the p r o v i n c i a l minister was acting i n a manner consistent with the regulations. This i s a misreading of Re Peralta and other decisions dealing with the nature of the federal F i s h e r i e s Act and the regulations made thereunder. Re Peralta a c t u a l l y confirmed that the f i s h i n g quotas were inserted by the p r o v i n c i a l Minister pursuant to federal l e g i s l a t i o n , not p r o v i n c i a l enactments.(47) A b r i e f examination of the l e g i s l a t i v e scheme set up under the F i s h e r i e s Act comparative to the Criminal Code arrangement i s useful at t h i s juncture. The regulation of f i s h e r i e s i s c l e a r l y a matter of federal competence under s.91(12) of the Constitution Act, 1867, which gives Parliament exclusive j u r i s d i c t i o n to l e g i s l a t e regarding "Sea Coast and Inland F i s h e r i e s " . Accordingly, the F i s h e r i e s Act was enacted. The power to do so was confirmed by the Privy Council i n F i s h e r i e s Reference,(48) but i t was pointed out that the s.91(12) head 46 (1985) 49 O.R. (2d) 705. (Ont.C.A.). 47 Ibid at 716, per MacKinnon A.C.J.O. 48 [1898] A.C. 700. 120 of power did not confer proprietary r i g h t s over the f i s h e r i e s . Thus, where f i s h i n g r i g h t s are owned by the province, the province may l e g i s l a t e i n r e l a t i o n to f i s h e r i e s under the p r o v i n c i a l power to manage and s e l l p u b l i c lands.(49) As one observer notes, t h i s overlapping of authority has been resolved i n practice by the delegation of administrative - as opposed to l e g i s l a t i v e - powers from the federal to the p r o v i n c i a l governments. Parliament enacts l e g i s l a t i o n which includes a delegation to the Governor i n Council (not the Lieutenant Governor i n Council) to make regulations f o r carrying out the purposes and provisions of the A c t , ( 5 0 ) and then, i n conjunction with each province, enacts regulations which are administered by the o f f i c e r s of a p r o v i n c i a l ministry.(51) Thus, the O n t a r i o F i s h e r y R e g u l a t i o n s , f o r example, are a c t u a l l y federal regulations administered by a p r o v i n c i a l body. They are p r o v i n c i a l regulations i n name only, but federal enactments i n law,(52) and cannot be ass a i l e d as being u l t r a v i r e s the provinces. The c o n s t i t u t i o n a l i t y of t h i s arrangement was upheld i n R e S h o a l L a k e B a n d , ( 5 3 ) which was c i t e d approvingly i n R e 49 C o n s t i t u t i o n A c t , 1 8 6 7 , s . 9 2 ( 5 ) . 50 F i s h e r i e s A c t , R.S.C. 1985, c.F-14, s.43. 51 Pibus, "The Fisheries Act and Native Fishing Rights i n Canada: 1970-1980", (1981) 39 University of Toronto Faculty  of Law Review 42 at 44. 52 C o n s o l i d a t e d R e g u l a t i o n s o f C a n a d a , 1978, c.849. 53 (1978) 25 O.R.(2d) 334(Ont.H.Ct.) Cory J . held that the federal F i s h e r i e s A c t adopted the machinery provided by the 121 Peralta and also i n a more recent decision of the Ontario Court of Appeal, R. v. Agawa,(54) i n which i t was stated, the learned summary conviction appeal court judge treated the Ontario Fishery Regulations as i f they were p r o v i n c i a l laws subject to Indian treaty r i g h t s because they are administered by p r o v i n c i a l o f f i c i a l s . The delegation of administrative authority over the Ontario Fishery Regulations i s a proper exercise of Parliament's l e g i s l a t i v e authority and does not a l t e r t h e i r status as federal laws. As w i l l be shown i n Chapter Six, the regulatory instruments enacted pursuant to s.207 of the Criminal Code are not i n the same mode. They are p r o v i n c i a l provisions issued by p r o v i n c i a l o f f i c i a l s . Accordingly, the analogy drawn between the l e g i s l a t i v e schemes i n the F i s h e r i e s Act and s.207 of the Code i n Furtney et a l . , i s not a v a l i d one and the c o n s t i t u t i o n a l i t y of the l a t t e r remains suspect.(55) p r o v i n c i a l Game and Fish Act by means of the regulations and that t h i s was a v a l i d adoption of administrative authority. 54 [1988] 3 C.N.L.R. 73. 55 I t i s i n t e r e s t i n g to note that when the o r i g i n a l Criminal Law Amendment B i l l was considered by the Criminal Law Section of the Commission on Uniformity of L e g i s l a t i o n i n 1968, concerns were expressed i n some quarters as to the a d v i s a b i l i t y of p r o v i n c i a l as opposed to federal l i c e n s i n g for l o t t e r y schemes. Accordingly, i t was suggested that consideration should be given to l i c e n s i n g based on federal regulations, but administered by the provinces, i . e . a scheme s i m i l a r to that found i n the F i s h e r i e s Act: Canada. Commissioners on Uniformity of L e g i s l a t i o n , Proceedings of  the 50th Annual Meeting (1968) p. 36. 122 Referential and Conditional L e g i s l a t i o n The scope of the p r o h i b i t i o n of f e d e r a l - p r o v i n c i a l interdelegation i n the Nova Scotia Interdelegation case has also been r e s t r i c t e d by the characterization of instances of l e g i s l a t i v e co-operation between the two l e v e l s of government as r e f e r e n t i a l or conditional l e g i s l a t i o n when, i n r e a l i t y , they represent a true delegation of powers. In other words, the ambit of these v a l i d techniques of l e g i s l a t i v e co-operation has been broadened with a corresponding narrowing of the i n v a l i d technique. As defined by Russell, r e f e r e n t i a l l e g i s l a t i o n incorporates the v a l i d enactments of another l e g i s l a t i v e body; conditional l e g i s l a t i o n makes the carrying out of the p o l i c y stated i n a statute conditional upon the act of another government agency.(56) His usage i s not uniform, however. As a r e s u l t , the d i s t i n c t i o n between the two i s not always c l e a r cut. For example, Abel categorizes criminal prohibitions which also contain exemptions from t h e i r operation as "conditional";(57) Driedger, however, defines the l o t t e r y scheme exemption provision as " l e g i s l a t i o n by reference". (58) As s.207 of the Criminal Code has been 56 Russell, supra fn. 39 at 471. 57 Abel supra fn. 11 at 825. He does not d i s t i n g u i s h between prohibitions which are conditional on federal action and those contingent on p r o v i n c i a l processes. 58 Driedger supra fn. 34 at 704-5. 123 t y p i f i e d as permissible r e f e r e n t i a l or conditional l e g i s l a t i o n , i t w i l l be more f u l l y explored i n that context. The key cases i n t h i s area concern the federal L o r d ' s Day A c t . In 1903, the J u d i c i a l Committee of the Privy Council struck the L o r d ' s Day A c t o f O n t a r i o as an encroachment on the federal criminal law power.(59) Hogg notes that, p r i o r to t h i s decision, i t had been widely assumed that Sunday observance was within p r o v i n c i a l competence as a matter of property and c i v i l r i g h t s within the province, or as a matter of a merely l o c a l or private nature i n the province.(60) The federal l e g i s l a t i o n which was enacted shortly thereafter prohibited a number of a c t i v i t i e s on Sundays, but the p r i n c i p a l sections created exemptions.(61) For example, s.8 made i t a punishable offence to run or conduct Sunday excursions "except as provided by any p r o v i n c i a l Act or law now or hereafter i n force". The province of Manitoba enacted l e g i s l a t i o n to l i m i t the a p p l i c a tion of the federal prohibitions i n that province so that i t would be lawful to run or conduct excursions to resorts within the province.(62) 59 A t t o r n e y G e n e r a l o f O n t a r i o v. H a m i l t o n S t r e e t R a i l w a y [1903] A.C. 524 (P.C.). 60 Hogg s u p r a f n . 17 at 305. 61 L o r d ' s Day A c t R.S.C. 1906, C. 153. 62 R.S.M. 1913, C.119, S . l . 124 The v a l i d i t y of t h i s l e g i s l a t i o n was challenged i n L o r d ' s D a y A l l i a n c e o f C a n a d a v . A t t o r n e y G e n e r a l f o r M a n i t o b a , ( 6 3 ) with the p l a i n t i f f s maintaining that i t constituted an interdelegation of powers. The Privy Council deemed i t relevant to ask "whether or not i t would have been within the competence of the Legislature of Manitoba e f f e c t i v e l y to enact i t had there been on t h i s subject of Sunday excursions no previous Dominion l e g i s l a t i o n at a l l " in order to determine i f t h i s was a statute " i n force" within the meaning of the federal exemption, and thus be l e g i s l a t i o n by reference. This meant i t had to be c l a s s i f i e d as l e g i s l a t i o n other than criminal law, which seemed u n l i k e l y i n l i g h t of the Privy Council's decision i n H a m i l t o n S t r e e t R a i l w a y . Nonetheless, the Privy Council managed to f i n d that the Manitoba statute was v a l i d p r o v i n c i a l l e g i s l a t i o n , although the ra t i o n a l e i s f a r from convincing or comprehensible:(64) L e g i s l a t i v e permission to do on Sunday things or acts which persons of s t r i c t e r Sabbatarian views might regard as Sabbath breaking i s no part of the criminal law where the acts and things permitted had not previously been prohibited. Such permission might aptly enough be described as a matter a f f e c t i n g " c i v i l r i g h t s in the Province" or as one of "a merely l o c a l nature i n the Province". Speaking for the unanimous Court, Lord Blanesburgh continued:(65) 63 [1925] A.C. 384 (P.C.). 64 I b i d at 392, per Lord Blanesburgh. 65 I b i d at 394. 125 [W]hat the Parliament of Canada may do i n t h i s matter i t may also forbear to do, and permissive P r o v i n c i a l l e g i s l a t i o n e f f e c t i v e for i t s purpose, because the Parliament of Canada has not previously intervened at a l l , can be no l e s s e f f e c t i v e a f t e r such intervention i f by i t s very terms the previous l i b e r t y of the Provinces i n t h i s matter remains unaffected. In each case, the P r o v i n c i a l Legislature i s exercising a power which, i n the one case by silence and i n the other case i n words, the Parliament of Canada has l e f t i n t a c t . What the Privy Council seems to be saying here i s that, because Sunday a c t i v i t i e s were not criminal u n t i l the federal A c t was passed i n 1906, and because that statute preserved p r o v i n c i a l powers i n t h i s sphere, the federal l e g i s l a t i o n did not expand p r o v i n c i a l j u r i s d i c t i o n as a true interdelegation would, and that i t therefore constituted v a l i d r e f e r e n t i a l l e g i s l a t i o n . Driedger indicates that the decision has inherent weaknesses. (66) F i r s t the form used i n the federal l e g i s l a t i o n was delegation. That i s , the statutory formula "except as provided by any p r o v i n c i a l Act or law now or hereafter i n force" constituted an express i n v i t a t i o n to the l e g i s l a t u r e s to make exceptions to criminal offences. Further, i n order to determine the competence of a p r o v i n c i a l statute enacted a f t e r the federal Act, i t should be read i n i t s whole context, which must include that federal statute. That fact, i n Driedger's estimation, i s relevant i n determining the " p i t h and substance" of the p r o v i n c i a l l e g i s l a t i o n . Even i f i t i s an Act which the 66 Driedger supra fn. 34 at 706. 126 province could enact apart from the federal statute, i t might not, i n t h i s context, be related to any of the stated heads of p r o v i n c i a l powers. Looked at from t h i s perspective, the Manitoba statute, standing alone, hardly made sense. Examined r a t i o n a l l y , what i t d i d was define was define what i s not a crime.(67) Accordingly, the province was exercising a delegated power. Even accepting the judgement i n Lord's Day A l l i a n c e at face value, i t has questionable a p p l i c a b i l i t y i n assessing the v a l i d i t y of s.207 of the Code. In that section, there i s no question of Parliament coming fresh to the f i e l d of p r o h i b i t i n g l o t t e r i e s and games of chance, and preserving " i n t a c t " a v a l i d p r o v i n c i a l power. As has been demonstrated, the p r o h i b i t i o n of gaming has been part of Canadian criminal law since the c o l o n i a l era. Thus, although Driedger maintains that s.207 i s not a delegation of power as, i n the absence of the p r o h i b i t i o n , a p r o v i n c i a l l e g i s l a t u r e could regulate l o t t e r i e s as being property and c i v i l rights,(68) i f one applies h i s c r i t i c i s m s of the Lord's Day A l l i a n c e case, h i s p o s i t i o n i s untenable. E x i s t i n g by i t s e l f , the p r o v i n c i a l regulation of l o t t e r y schemes t e l l s only h a l f the story. The federal provision enables the provinces to act i n a sphere from which they would otherwise have been excluded. This section does not merely xborrow' independently v a l i d 67 Ibid. 68 Ibid at 705. 127 p r o v i n c i a l enactments. The l a t t e r would be i n v a l i d but for the terms of s . 2 0 7 i t s e l f . A more recent examination of the format of the L o r d ' s D a y A c t by the Supreme Court of Canada b a s i c a l l y duplicated the Privy Council p o s i t i o n . In L o r d ' s D a y A l l i a n c e v . A t t o r n e y G e n e r a l f o r B r i t i s h C o l u m b i a , ( 6 9 ) i t unanimously upheld the v a l i d i t y of a Vancouver by-law exempting the municipality from the operation of portions of the L o r d ' s D a y A c t . I t was adjudged to be a "misconception" of the operation of the A c t to say that i t s e f f e c t was to create a delegation of federal power to the provinces. In Mr. J u s t i c e Rand's view, i t could not be open to serious debate that Parliament may l i m i t the operation of i t s own l e g i s l a t i o n and may do so upon any event or condition.(70) Both Hogg and Weiler, eminent c o n s t i t u t i o n a l law scholars, are c r i t i c a l of t h i s decision i n a way that i s also damning for s . 2 0 7 of the C o d e . For example, Hogg comments that i f the making of Sunday observance law i s a matter of criminal law outside p r o v i n c i a l competence, as was decided i n H a m i l t o n S t r e e t R a i l w a y , then the repealing of a Sunday observance law i s equally a matter of criminal law outside p r o v i n c i a l competence. The Vancouver by-law had no s i g n i f i c a n c e except as a removal of a criminal p r o h i b i t i o n , 69 [1959] S.C.R. 497. 70 I b i d at 509-10. 128 which i s outside p r o v i n c i a l competence as surely as the imposition of a criminal p r o h i b i t i o n . He concludes that the decision i s inconsistent with the Nova Scotia Interdelegation case.(71) S i m i l a r l y , Weiler characterizes the opting-out clause i n the Lord's Day Act as amounting, fun c t i o n a l l y , to Parliament delegating to p r o v i n c i a l l e g i s l a t u r e s the power to amend i t s criminal law i n accordance with d i f f e r e n t and changing sentiments i n the respective provinces.(72) In true r e f e r e n t i a l l e g i s l a t i o n , where Parliament adopts a p a r t i c u l a r piece of e x i s t i n g p r o v i n c i a l l e g i s l a t i o n f o r i t s own use, i t i s easy enough to d i s t i n g u i s h i t from an interdelegation of power. I t i s , i n Lysyk's words, "a l e g i s l a t i v e short-cut".(73) But where future p r o v i n c i a l enactments are involved, as i s the case with the l o t t e r y scheme exemption, the incorporation i s , i n r e a l i t y , delegation by another name. J u d i c i a l ingenuity has, however, confined the p r o h i b i t i o n against interdelegation to a narrow range. As a r e s u l t , Lysyk concludes, "the doctrine i s one which may t e s t the ingenuity of, but seems u n l i k e l y to confound, a careful draftsman".(74) Nonetheless, Weiler 71 Hogg supra fn. 17 at 306-07. 72 Weiler, "The Supreme Court and the Law of Canadian Federalism", (1973) 23 University of Toronto Law Journal 307 at 315. 73 Lysyk, "The Interdelegation Doctrine: A Constitutional Paper Tiger?", (1969) 47 Canadian Bar Review 271 at 274. 74 Ibid at 277. 129 cautions that, because the d i s t i n c t i o n between r e f e r e n t i a l or conditional l e g i s l a t i o n and interdelegation i s e s s e n t i a l l y one of name rather than of substance, the Supreme Court has l e f t i t s e l f free to resurrect the l a t t e r when and i f i t may wish to do so some time i n the future.(75) By l i m i t i n g the interdelegation doctrine to such narrow confines, the courts have f a c i l i t a t e d c o n s t i t u t i o n a l f l e x i b i l i t y . In e f f e c t , they have conceded that the executives of the federal and p r o v i n c i a l governments are prim a r i l y responsible for the d i s t r i b u t i o n of l e g i s l a t i v e authority where there i s mutual agreement.(76) One viewpoint i s that t h i s means of e f f e c t i n g informal c o n s t i t u t i o n a l change i s es s e n t i a l to national s u r v i v a l . Co-operative federalism through f e d e r a l - p r o v i n c i a l negotiations and agreements allows an on-going r e d i s t r i b u t i o n of powers without recourse to the courts or to the formal amending process.(77) The other side of the coin are the costs to be paid f o r co n s t i t u t i o n a l f l e x i b i l i t y . De jure or de facto delegation 75 Weiler supra fn. 72 at 106-7. 76 Ib i d at 317. 77 Hogg supra fn. 17 at 106-7. 130 runs the r i s k of creating either an over-powerful central government or a toothless federation. I t may encourage pressure by one l e v e l of government on the other to t r a n s f e r powers which would be better exercised by the l e v e l of government to which they were given.(78) Further, c o n s t i t u t i o n a l f l e x i b i l i t y , i n the guise of co-operative federalism, reduces the accountability of governments to t h e i r l e g i s l a t i v e bodies and electorates and gives p o l i t i c i a n s p l a u s i b l e reasons for f a i l i n g to act when action i s c l e a r l y needed.(79) Smiley o f f e r s the following assessment of the fundamental defect of such f l e x i b i l i t y : ( 8 0 ) [T]he federal system i s cut a d r i f t from i t s c o n s t i t u t i o n a l base and becomes a regime shaped d e c i s i v e l y by the bargaining powers of the federal and p r o v i n c i a l governments rather than by l e g a l norms. One segment of the population which i s experiencing the tangible costs of the questionable process used to decriminalize l o t t e r y schemes i s Canada's aboriginal peoples, s p e c i f i c a l l y native Indians. This new arrangement, to which they were not a party, purports to subject them to p r o v i n c i a l j u r i s d i c t i o n i n the matter of l o t t e r y schemes. I f Indians bands wish to conduct gambling operations on Indian 78 Canadian Bar Association, Toward a New Canada, quoted i n Magnet, Constitutional Law of Canada (Toronto: Carswell, 1983) p. 93. 79 Smiley, Canada i n Question: Federalism i n the Eighties 3rd ed. (Toronto: McGraw-Hill, 1980) p. 53. 80 Ibid at 54. 131 lands, they must, the federal and p r o v i n c i a l governments argue, seek a p r o v i n c i a l licence. The complex dimensions of t h i s claim and the counterclaims w i l l be examined i n the next chapter. 132 CHAPTER FIVE INDIAN GAMING In the l a s t two decades, Canada's indigenous peoples have been engaged i n a rejuvenated campaign f o r l e g a l recognition of aboriginal t i t l e to c e r t a i n lands and for some measure of p o l i t i c a l autonomy or r i g h t to s e l f government. Regarding the native Indian population, as d i s t i n c t from the Metis and Inuit peoples, the White Paper released i n 1969,(1) which proposed to dismantle the apparatus of the Indian Act,(2) and eliminate any vestiges of s p e c i a l status accorded to Indian peoples, i s considered by many to be "the single most important c a t a l y s t " i n r a i s i n g the p o l i t i c a l consciousness of Indian peoples.(3) Coincidentally, t h i s i s the same time span that has accommodated the spread of l e g a l i z e d gambling i n Canada i n the form of l o t t e r y schemes. These two d i s t i n c t developments have merged i n the l a s t few years as several Indian bands across the country, following the example set by Indian t r i b e s i n the United 1 D.I.A.N.D..Statement of the Government of Canada on Indian  Poli c y . 1969 (Ottawa: Queen's Printer, 1969). 2 R.S.C.1970, c.I-6. 3 Boldt and Long (eds.), The Quest for Justice:Aboriginal  Peoples and Aboriginal Rights (Toronto:University of Toronto Press,1985) p. 7 and Mason "Canadian and United States Approaches to Indian Sovereignty", (1983) 21 Osgoode H a l l Law Journal 422 at 433. 133 States, have sought to conduct organized gambling a c t i v i t i e s , p a r t i c u l a r l y bingos, on reserves, without the r e q u i s i t e p r o v i n c i a l licences. This has led to criminal charges being l a i d , r e s u l t i n g i n convictions i n some instances, a l b e i t with symbolic penalties, and i n stays of proceedings being entered i n others.(4) The basic issue i s one of j u r i s d i c t i o n . The bands and the provinces are each claiming the r i g h t to regulate gambling on reserves, while the federal government maintains that i t has no j u r i s d i c t i o n i n t h i s sphere. This chapter w i l l examine the merits of these competing j u r i s d i c t i o n a l claims, focussing i n p a r t i c u l a r on the a p p l i c a b i l i t y of p r o v i n c i a l enactments such as a l o t t e r y l i c e n s i n g scheme to Indians and Indian lands, as well as on assertions of native sovereignty. Given the p a r a l l e l s i t u a t i o n i n the United States, some attention w i l l also be directed to the l e g a l s i t u a t i o n there f o r comparative purposes. 4 Indian and Northern A f f a i r s Canada (INAC), Gaming on  Reserves (Ottawa:INAC,1987) Annex J, d e t a i l s some of the charges and confrontations which have arisen i n the l a s t few years. 134 An Introduction to Indians and the Indian Act In order to provide a context f o r the analysis which follows, i t i s necessary to begin with some b r i e f remarks regarding the l e g a l p o s i t i o n of Indian peoples i n Canada. Although there was an i n i t i a l semblance of willingness to t r e a t the Indians as having some form of sovereignty, as evidenced by the t r e a t i e s made with the B r i t i s h Crown, the European settlement of Canada ultimately meant p o l i t i c a l , l e g a l , s o c i a l and c u l t u r a l subservience f o r her native peoples. At Confederation, the power to l e g i s l a t e for "Indians and Lands reserved for Indians" was assigned to the federal arm of government by section 91(24) of the Constitution Act, 1867.(5) As Ponting and Gibbins indicate, t h i s a l l o c a t i o n of Indian issues to the federal l e v e l can be traced back to an e a r l i e r concern of the Imperial government i n London that the chief threat to the native population would l i k e l y come from land-hungry s e t t l e r s who also c o n t r o l l e d the l o c a l and p r o v i n c i a l governments. In 1867, the federal government was the most distant from l o c a l government, where i t existed, and the only a l t e r n a t i v e where 5 30-31 V i c t . , c.3 as amended. 135 i t d i d not ( i . e . the western t e r r i t o r i e s ) . ( 6 ) This i s echoed by Sanders:(7) "[T]he decision to give r e s p o n s i b i l i t y to the more distant l e v e l of government removed Indian p o l i c y from d i r e c t competition with l o c a l i n t e r e s t s . " The l e g i s l a t i v e p o l i c y of the federal government under t h i s head of power did not, however, depart dramatically from that of pre-Confederation enactments which were designed to " c i v i l i z e " the Indians and assimilate them into the dominant culture. The Indian Act, which was f i r s t passed i n 1876 was merely a consolidation of pre-existing p r o v i n c i a l and t e r r i t o r i a l l e g i s l a t i o n that dealt with Indians.(8) The general scheme of the Indian Act, operational to t h i s day, i s e s s e n t i a l l y p a t e r n a l i s t i c . I t prescribes a complex system for defining and r e g i s t e r i n g Indians, administering t h e i r lands and regulating t h e i r lives.(9) The ultimate r e s p o n s i b i l i t y rests with the federal government minster charged with Indian a f f a i r s , and t h i s despite the fa c t that, since the very early days, powers of l o c a l government have devolved on the i n d i v i d u a l reserves. The Act 6 Ponting and Gibbins, Out of Irrelevance (Toronto: Butterworths, 1980) p. 7. 7 Sanders, "The Friendly Care and Directing Hand of the Government: A Study of Government Trusteeship of Indians i n Canada" (Unpublished paper, 1977) p. 6. 8 B a r t l e t t , "The Indian Act of Canada", (1978) 27 Buffalo  Law Review 581; Ponting and Gibbins supra fn.6 at 8. 9 Morse, "Aboriginal Peoples and the Law" i n Morse (ed.) Aboriginal Peoples and the Law etc. (Ottawa:Carleton University Press,1985) pp.1-15 at 1. 136 tinkered with t r i b a l arrangements to produce a system of band councils which possess "very modest" by-lawmaking powers.(10) As one commentator notes, t h i s creates a fundamental inconsistency between the encouragement of l o c a l self-government on the reserves and the insistence on t o t a l control i n the hands of the Minister.(11) The by-lawmaking powers, which are now found i n s . 8 1 of the A c t , are generally confined to matters with which a r u r a l municipality would be concerned. They are, of course, subordinate to regulations enacted pursuant to the I n d i a n A c t but also to the more pernicious power of disallowance vested i n the Minister of Indian A f f a i r s by v i r t u e of s . 8 2 of the A c t : " s . 8 2 ( 2 ) A by-law made under section 81 comes into force f o r t y days a f t e r a copy thereof i s forwarded to the Minister pursuant to subsection (1), unless i t i s disallowed by the Minister within that period..." As w i l l be shown, t h i s power of disallowance i s very important i n the context of l o t t e r y schemes, as many bands have attempted to enact by-laws to authorize gambling operations. A l l except one have been disallowed by the Minister. The I n d i a n A c t i s undeniably extensive i n i t s ambit. As Hogg points out, Parliament has taken the view that i t may 10 Nakaratsu, "A Constitutional Right of Indian S e l f -Government", (1985), 43 University of Toronto Faculty of Law  Review 72 at 75. 11 B a r t l e t t , s u p r a fn.8 at 584. 137 l e g i s l a t e for Indians on matters which otherwise would l i e outside i t s j u r i s d i c t i o n a l competence e.g. the rules which govern the succession to the property of deceased Indians. He suggests that while there might be some question whether these enactments are i n p i t h and substance i n r e l a t i o n to Indians or to lands reserved for Indians, the courts would probably uphold any provision which could be r a t i o n a l l y related to i n t e l l i g i b l e Indian policies.(12) Extensive though the Indian Act may be, i t i s c e r t a i n l y not exhaustive. Other federal statutes, such as the Criminal Code and the Fi s h e r i e s Act apply on reserves independent of the Indian Act, and i n fact may p r e v a i l over i t . In other words, l e g i s l a t i o n i s applied to the native population that i s not t a i l o r e d to meet t h e i r p a r t i c u l a r needs and values.(13) Beyond that, p r o v i n c i a l laws of general a p p l i c a t i o n have moved to f i l l i n other gaps. Before 1951, however, the application of p r o v i n c i a l l e g i s l a t i o n to Indians tended to depend on whether the incident concerned took place on or o f f a reserve. The courts allowed only very l i m i t e d p r o v i n c i a l j u r i s d i c t i o n on reserves.(14) In 1951, what i s now section 88 of the Indian Act was introduced. I t makes a l l p r o v i n c i a l laws of general 12 Hogg, Constitutional Law of Canada 2d ed. (Toronto: Carswell,1985) p. 554. 13 Morse, supra fn.9 at 8. 14 B a r t l e t t , supra fn.8 at 603. 138 a p p l i c a t i o n applicable to Indians, subject to t r e a t i e s and federal l e g i s l a t i o n , and except to the extent that they c o n f l i c t with the A c t and i t s regulations. This amendment has been characterized i n both p o s i t i v e and negative terms. Hogg, for example, states that s . 8 8 does not expand the body of p r o v i n c i a l law that applies to Indians, but i n f a c t l i m i t s it.(15) B a r t l e t t , on the other hand, i s of the opinion that s . 8 8 represents a "massive i n t r u s i o n of p r o v i n c i a l j u r i s d i c t i o n " into the powers of government to which band councils might otherwise lay claim.(16) I t unquestionably legitimated a r o l e for p r o v i n c i a l governments on Indian reserves which, by i t s own terms, i s l i m i t e d only by t r e a t i e s , where they ex i s t , and by the presence of federal enactments. In turn, i t may preempt band by-laws. With the entrenchment of the C o n s t i t u t i o n A c t , 1 9 8 2 , ( 1 7 ) there now exists the p o t e n t i a l for l i m i t s on the p r o v i n c i a l and federal l e g i s l a t i v e presence on the reserves by v i r t u e of s e c t i o n 3 5 ( 1 ) : "The e x i s t i n g aboriginal and treaty r i g h t s of the aboriginal peoples of Canada are hereby recognized and affirmed." Hence, to the extent that any l e g i s l a t i v e enactment c o n f l i c t s with an e x i s t i n g aboriginal or treaty r i g h t , i t w i l l be of no force or e f f e c t . 15 Hogg, s u p r a fn.12 at 561. 16 B a r t l e t t , s u p r a fn.8 at 607. 17 Enacted by the C a n a d a A c t , 1982 (U.K.) c. 11, Schedule B. 139 A complex l e g a l s i t u a t i o n thus p r e v a i l s i n r e l a t i o n to "Indians and lands reserved for Indians". Federal, p r o v i n c i a l and native governments constitute an uneasy, often unco-operative partnership, i n which the partners do not have equal access to power. The r e d i s t r i b u t i o n of power v i s - a - v i s l o t t e r y schemes i s a good i l l u s t r a t i o n of t h i s power d i f f e r e n t i a l . Indian bands were not a party to the negotiations which took place i n the early 1980s to resolve the f e d e r a l - p r o v i n c i a l struggle over l o t t e r i e s , nor were they consulted by the Senate Committee on Legal and Constitutional A f f a i r s when i t was examining the Criminal Code (Lotteries) Amendment B i l l . ( 1 8 ) None of the exemptions l a i d out i n s.207 of the Code allow for Indian band councils to operate permitted l o t t e r y schemes. Indian i n t e r e s t s were, at best, overlooked and, at worst, ignored. I t seems to have been taken for granted that they should be treated exactly the same as each p r o v i n c i a l population concerned, subject to p r o v i n c i a l regulatory schemes, regardless of whether they were appropriate to band needs and aspirations. Given the experience i n the United States i n the past 15-20 years, t h i s statutory silence and assumption of i d e n t i c a l regulatory treatment was extremely short-sighted. When l e g a l i z e d gambling, p a r t i c u l a r l y l o t t e r i e s , began to spread through the American states i n the l a t e 1960s and early 1970s, some American Indian bands began running so-18 B i l l C-81, 1st Sess. 33rd Par i , 1984-85. 140 c a l l e d "monster" bingo games, card rooms and other gambling enterprises, generating substantial revenues, without state sanction. State and county governments then i n s t i g a t e d l e g a l action against the bands concerned. In 1987, the United States Supreme Court rendered a decision i n one of these cases which endorsed the r i g h t of Indian t r i b e s to conduct gambling operations on t h e i r lands i n c e r t a i n situations.(19) I f Canadian Indian bands continue t h e i r current gaming practices, there i s an extreme l i k e l i h o o d that the Supreme Court of Canada w i l l be c a l l e d upon to decide the l e g a l merits of these actions. Accordingly, before analyzing these merits, the American experience w i l l be examined as i t o f f e r s some enlightening comparisons. I n d i a n G a m i n g i n t h e U n i t e d S t a t e s What Rose has termed the " t h i r d wave"(20) of l e g a l i z e d gambling i n the United States began i n the mid-1960s with state l o t t e r i e s and has grown to encompass the transformation of New Jersey into a destination casino 19 C a b a z o n B a n d o f M i s s i o n I n d i a n s v . C a l i f o r n i a , 1 0 7 S.Ct. 1083 (1987); 55 Law Week 4225. 20 Rose, Gambling and the Law (Hollywood: Gambling Times, 1986) p . l . 141 resort, video gambling, o f f - t r a c k betting, l e g a l card rooms, char i t y bingos and Indian bingos:(21) Legalized gambling has become the biggest growth industry of the 1980s on the nation's Indian reservations. At l e a s t 100 of the 283 Indian t r i b e s i n the United States are considering s e t t i n g up bingo games on t r i b a l land. The Rincon Indian Tribe i s the t h i r d t r i b e i n San Diego County to set up high-stakes gambling. The t r i b e , with only 500 members,is b u i l d i n g a bingo h a l l that w i l l seat 1,000. The Seminole Tribe i n F l o r i d a reported that i t s bingo operation grossed more than $20 m i l l i o n i n 1982, r e s u l t i n g i n a net p r o f i t of $2.7 m i l l i o n for the t r i b e ' s 1,500 members. Similar operations have been set up i n Maine, Minnesota and Washington." This has provoked vehement state opposition. As one observer notes, to the states, counties and c i t i e s involved, i t seems to s i g n i f y an appropriation of t h e i r r i g h t to govern, "a menacing intrusion on l o c a l control and on state plenary powers".(22) At the federal l e v e l , however, the response has been more p o s i t i v e . For example, the Department of the I n t e r i o r , which has the primary r e s p o n s i b i l i t y for Indian A f f a i r s i n the U.S., has made grants and has guaranteed loans for the purpose of constructing bingo f a c i l i t i e s . ( 2 3 ) The Secretary of the I n t e r i o r has approved t r i b a l ordinances e s t a b l i s h i n g and regulating gaming a c t i v i t i e s . ( 2 4 ) The federal government 21 Ibid at 210. 22 DeDomenicis, "Betting on Indian Rights" (1983) 3 C a l i f o r n i a Lawyer 29. 23 U.S. Senate Report. (1986)No.99-493, p.5. 24 U.S. House of Representatives Report. (1986)No.99-488, p. 10. 142 is on record as being opposed to a proposal mooted i n the early 1980s to give the states control of gambling a c t i v i t i e s on reservations:(25) "Such a proposal i s inconsistent with the President's Indian Po l i c y Statement of January 24, 1983 [26]...A number of t r i b e s have begun to engage i n bingo and s i m i l a r gambling operations on t h e i r reservations for the very purpose enunciated i n the President's Message. Given the often l i m i t e d resources which t r i b e s have fo r revenue producing a c t i v i t i e s , i t i s believed that t h i s kind of revenue producing p o s s i b i l i t y should be protected and enhanced." Consequently, Indian gaming i s at the centre of a struggle between the states to assert t h e i r j u r i s d i c t i o n and the Indian t r i b e s to r e j e c t it. This struggle i s a recurring one and requires some elucidation. Canada and the United States have adopted l a r g e l y p a r a l l e l p o l i c i e s v i s - a - v i s t h e i r Indian populations, v a c i l l a t i n g between assimilation and separation, but always exerting p a t e r n a l i s t i c control.(27) American courts have, however, been more prepared than t h e i r Canadian counterparts 25 These statements were r e l i e d on i n C a l i f o r n i a v . C a b a z o n B a n d o f M i s s i o n I n d i a n s at the Court of Appeals l e v e l : 783 F.2d 900 at 904-5 (1986). 26 " I t i s important to the concept of self-government that t r i b e s reduce t h e i r dependence on Federal funds by providing a greater percentage of the cost of t h e i r self-government." Quoted i n C a l i f o r n i a v . C a b a z o n B a n d o f M i s s i o n I n d i a n s , s u p r a fn. 19 at 4229 27 Mason, s u p r a fn.3 at 423. 143 to play at l e a s t l i p service to the notion of Indian sovereignty. The c o n s t i t u t i o n a l arrangements i n the United States are somewhat d i f f e r e n t from those i n Canada. Indian a f f a i r s are only p e r i p h e r a l l y referred to i n the Constitution:(28) "Congress i s authorized to regulate Commerce...with the Indian Tribes." This i s the only express grant of federal power over Indians. There i s no d i r e c t American equivalent to s. 91(24) of the Constitution Act, 1867. Since the decision of the U.S. Supreme Court i n United States v. Kagama,(29) t h i s c o n s t i t u t i o n a l gap has been i r r e l e v a n t . While the Court recognized that there was no e x p l i c i t c o n s t i t u t i o n a l j u s t i f i c a t i o n for federal assertions of j u r i s d i c t i o n over Indians and Indian land, i t decided that that power must re s t with eit h e r the states or with the federal government. The Court opted for an inherent power over Indian a f f a i r s vested i n the federal l e v e l of government. Indian autonomy over Indian a f f a i r s beyond a narrow range was not given any consideration.(30) 28 United States C o n s t i t u t i o n . a r t i c l e 1, paragraph 8, clause 18 (Indian Commerce Clause). 29 118 U.S. 375 (1886). 30 For a trenchant c r i t i c i s m of t h i s decision as well as of U.S. Indian p o l i c y as a whole, see Kronowitz et a l . , "Towards Consent and Cooperation: Reconsidering the p o l i t i c a l Status of Indian Nations", (1987) 22 Harvard C i v i l  R i g h t s - C i v i l L i b e r t i e s Law Review 507. 144 The exclusion of state i n t e r e s t s on Indian reserves, characterized by one source as being "an insurmountable wall" from 1831-1882,(31) has, however, been eroded by the courts over the l a s t century. As Kronowitz et a l . note, many states have extended t h e i r l e g a l controls over Indians and Indian lands situated within state borders, and have been supported i n t h i s by the Supreme Court.(32) The Court now subscribes to a view that Indian reservations are a part of the surrounding state.(33) State laws w i l l therefore apply unless they have been preempted by federal legislation.(34) This expansion of state i n t e r e s t s has been achieved, not at the cost of federal power, but at the expense of Indian interests:(35) "[Recent Supreme Court] decisions...reverse the long-standing presumption of the exclusion of state j u r i s d i c t i o n over Indians and es t a b l i s h a presumption of state j u r i s d i c t i o n unless Congress has s p e c i f i c a l l y pre-empted state law. Taken together, they p o t e n t i a l l y leave no area of t r i b a l j u r i s d i c t i o n untouched by the states. The Court's decisions necessitate Indian challenges to state action through expensive and time-consuming l i t i g a t i o n , and provide strong incentives for states to assert t h e i r j u r i s d i c t i o n over Indians and Indian t e r r i t o r y within t h e i r borders." 31 Haslam, "Indian Sovereignty: Confusion Pr e v a i l s " , (1988) 63 Washington Law Review 169 at 170. 32 Kronowitz et a l . , s u p r a fn. 30 at 561. 33 O r g a n i z e d V i l l a g e o f K a k e v . E g a n , 369 U.S. 60 (1962); R i c e v . R e n n e r , 463 U.S. 713 (1983). In the l a t t e r decision, Madam Ju s t i c e O'Connor stated (at 723) that "'absolute' federal j u r i s d i c t i o n was not always exclusive j u r i s d i c t i o n " . 34 M c C l a n a h a n v . A r i z o n a , 411 U.S. 164 (1973). 35 Kronowitz et a l . , s u p r a fn.30 at 569-70. 145 Putting aside t h i s discussion of the expansion of state controls on Indian reserves temporarily, i t should also be noted that, unlike i t s Canadian counterpart, the United States c o n s t i t u t i o n vests the criminal law power i n the states. Consequently, the federal government preserved i t s j u r i s d i c t i o n over Indian a f f a i r s by creating a separate system of criminal laws for the reserves. The G e n e r a l C r i m e s A c t ( 3 6 ) sets out the powers of the federal government to punish offences by non-Indians against the person or property of Indians, and offences by Indians against the person or property of non-Indians. The M a j o r C r i m e s A c t ( 3 7 ) also gives the central government j u r i s d i c t i o n over fourteen s p e c i f i c offences committed by Indians on reserves. These serious offences aside, t r i b a l governments have exclusive j u r i s d i c t i o n over crimes committed by Indians against Indians occurring on t r i b a l lands. The states, on the other hand, have exclusive power over a l l off-reservation crimes involving non-Indians and Indians. This arrangement begs the question of who has j u r i s d i c t i o n over crimes committed by non-Indians on reservations. In O l i p h a n t v . S u q u a m i s h I n d i a n T r i b e , ( 3 8 ) the 36 18 U.S.C. # 1152 (1982) 37 18 U.S.C. # 1153 (1982) 38 435 U.S. 191 (1978). 146 Supreme Court held that the states had that power, r e j e c t i n g the Indian claim that the t r i b a l courts had j u r i s d i c t i o n . The f i n a l component of t h i s j u r i s d i c t i o n a l scheme regarding criminal law, i s the federal enactment Public Law 280,(39) which has proved to be the most s i g n i f i c a n t l e g i s l a t i v e factor i n Indian gaming l i t i g a t i o n . Enacted i n 1953, t h i s statute delegates to the states some of the federal government's power to regulate a c t i v i t i e s on reservations.(40) Congress had expressed some concern regarding apparent lawlessness on some reservations and i n response granted the s i x states with the largest Indian populations (Alaska, C a l i f o r n i a , Minnesota, Nebraska, Oregon and Wisconsin) complete criminal j u r i s d i c t i o n and more li m i t e d c i v i l j u r i s d i c t i o n over reservations within t h e i r borders.(41) Any other state could assume such j u r i s d i c t i o n by statute or state c o n s t i t u t i o n a l amendment, which has added another nine states to the l i s t . ( 4 2 ) Since 1968, however, t r i b a l consent to state j u r i s d i c t i o n i s required.(43) 39 18 U.S.C. #1162, 28 U.S.C. #1360 (1982 and Supp. I I I ) . 40 McDonnell, "Federal and State Regulation of Gambling and Liquor Sales Within Indian Country", (1985) 8 Hamline Law  Review 599 at 606. 41 DeDomenicis, supra fn.22 at 31. 42 Arizona, F l o r i d a , Idaho, Iowa, Montana, Nevada, North Dakota, Utah and Washington. 43 Indian C i v i l Rights Act,25 U.S.C. ##1321-1322,1326 (1982). 147 The Supreme Court f i r s t considered P u b l i c L a w 2 8 0 i n B r y a n v . I t a s c a C o u n t y , ( 4 4 ) which focussed on the ap p l i c a t i o n to Indians of the rather ambiguous grant of c i v i l j u r i s d i c t i o n which was also included i n the Law. The Court held that the states were only granted c i v i l j u r i s d i c t i o n over private c i v i l s u i t s between Indians and Indians and between Indians and non-Indians. The Court reasoned that t r i b a l governments would be rendered toothless i f they were subject to the f u l l spectrum of state and county c i v i l regulations. The Court created a c a r e f u l d i s t i n c t i o n between the criminal and c i v i l sections of P u b l i c L a w 2 8 0 which was to become c r u c i a l i n the Indian gaming decisions. Turning s p e c i f i c a l l y to gambling, the federal government enacted prohibitory l e g i s l a t i o n i n 1951 which provides that i t i s i l l e g a l to operate a gambling device within the boundaries of an Indian reservation.(45) The term "gambling device" encompasses s l o t machines, roulette wheels and s i m i l a r devices. I t would not necessarily a f f e c t bingo games.(46) The O r g a n i z e d C r i m e C o n t r o l A c t of 1970,(47) 44 426 U.S. 373 (1975). 45 15 U.S.C. #1175 (1982) 46 Indeed, i n U n i t e d S t a t e s v . F a r r i s , 624 F.2d 890 (1980), a prosecution brought against the Puyallup Indians who were operating a casino, the l i m i t e d range of t h i s enactment was noted as was "the conspicuous caution" of the casinos to avoid the use of gambling devices which would be caught by i t (at 896). 47 18 U.S.C. #155 (1982). 148 which makes i l l e g a l gambling a federal offence, also applies on reservations, but only i f they are situated i n states where gambling i s a v i o l a t i o n of state law. As was mentioned e a r l i e r , gambling has been l e g a l i z e d i n the majority of states i n the Union. Indian Gaming Before t h e Courts P r i o r to the Supreme Court's decision i n C a l i f o r n i a v. Cabazon Band of Mission Indians,(48) the Indian gaming cases f e l l into two categories: those based on Public Law 280 (PL 280) and those invoking the Organized Crime Control A c t (OCCA). The former comprise the larger group and w i l l be considered f i r s t . As has been noted above, PL 280 contains a grant of power from the federal to the state l e v e l of criminal and c i v i l law j u r i s d i c t i o n on Indian reservations and the Supreme Court had been ca r e f u l to l i m i t the scope of the c i v i l powers. In Seminole Tribe of F l o r i d a v. Butterworth,(49) the F i f t h C i r c u i t considered whether PL 280 acted to make Florida's bingo statute applicable to the Seminole t r i b e ' s bingo operations. The F l o r i d a statute 48 Supra fn.19. 49 658 F.2d 310 (1981). 149 permitted small scale, charitable bingos. The Seminoles operated a permanent, commercial f a c i l i t y . Relying on the Supreme Court's decision i n Bryan v. Itasca, the Court determined that, i f the statute was c l a s s i f i e d as "prohibitory" or criminal, i t would apply; i f i t were designated "regulatory" or c i v i l , however, i t would not. I t was observed that one could not simply point to the i n c l u s i o n of penal sanctions i n the F l o r i d a statute and conclude that i t was prohibitory. A much more sophisticated analysis was required, focussing on the public p o l i c y of the state on the issue of bingo and the intent of the l e g i s l a t u r e i n enacting the bingo statute. This analysis produced a determination that the bingo statute was " c i v i l -regulatory" i n nature and hence not applicable to the Seminole operations:(50) "Bingo appears to f a l l i n a category of gambling that the state has chosen to regulate by imposing c e r t a i n l i m i t a t i o n s to avoid abuses. Where the state regulates the operation of bingo h a l l s to prevent the game of bingo from becoming a money-making business, the Seminole Indian t r i b e i s not subject to that regulation and cannot be prosecuted for v i o l a t i n g the l i m i t a t i o n s imposed.... L e g i s l a t i v e intent determines whether the statute i s regulatory or prohibitory, and although the state of F l o r i d a p r o h i b i t s l o t t e r i e s i n general, exceptions are made for c e r t a i n forms of gambling including bingo." In other words, as long as the state permits bingo to some degree, then the Indians are free to operate bingos without state constraint. I t i s not c l e a r whether the Court was 50 I b i d at 314-15. going so f a r as to say, that as long as the state permitted some forms of gambling that the Indian t r i b e s could operate any and a l l forms of gambling operations. What i s more important, though, i s that the Court took as i t s reference point the state's l e g i s l a t i v e p o l i c y . That, not Indian i n t e r e s t s , was to be the decisive factor. A s i m i l a r case, Oneida v. Wisconsin,(51) reached a s i m i l a r conclusion. The State of Wisconsin permitted the playing of bingo, but regulated the conduct of games by l i c e n s i n g , control and taxation. Again, the Court was faced with the task of categorizing the nature of these bingo laws i n order to determine whether they would apply to Indian-run operations. Employing the analysis used i n Seminole Indians, i t concluded that they were c i v i l rather than c r i m i n a l . The Wisconsin Chief Judge was, however, reluctant simply to leave i t at that, finding i t "too mechanical" an approach.(52) He chose to buttress h i s finding by presenting i t against a so-called "back-drop" of t r i b a l sovereignty. He recognized the continued existence of sovereign r i g h t s inhering i n the Indian t r i b e s , though i n a much more r e s t r i c t e d form than they d i d 150 years ago, and the h i s t o r i c a l l y l i m i t e d r o l e for state intervention on t r i b a l 51 518 F.Supp. 712 (1981). 52 Ibid at 719, per Crabb, Chief Judge. 151 lands.(53) These deliberations produced the following conclusion:(54) "Keeping i n mind the backdrop of Indian sovereignty against which Public Law 280 must be measured, as well as that 'eminently sound and v i t a l canon ... that statutes passed for the benefit of dependent t r i b e s ... are to be l i b e r a l l y construed, doubtful expressions being resolved i n favour of the Indians', ... I conclude that when Congress conferred j u r i s d i c t i o n on the State of Wisconsin to enforce i t s criminal laws on the Oneida Reservation, Congress intended to l i m i t the exercise of that j u r i s d i c t i o n to. enforcement of laws generally p r o h i b i t i n g a c t i v i t i e s that the state determined are too dangerous, unhealthy, or otherwise detrimental to the well-being of the state's c i t i z e n s . ...[This] conclusion ... appears to be i n keeping with present federal p o l i c y encouraging t r i b a l s e l f -government . 1 1 With i t s concern to respect t r i b a l sovereignty by l i m i t i n g state j u r i s d i c t i o n , O n e i d a , i n moving away from the narrow c l a s s i f i c a t i o n issue, i s o v e r a l l the most favourable of the cases f o r Indian i n t e r e s t s . In B a r o n a G r o u p o f C a p i t a n G r a n d B a n d v . D u f f y , ( 5 5 ) the Southern D i s t r i c t Court of C a l i f o r n i a rendered a decision consistent with the F l o r i d a and Wisconsin cases. C a l i f o r n i a permitted some bingo games a l b e i t under s t r i c t regulation. Indian t r i b e s were not bound by those c i v i l enactments. Although not as dismissive of Indian i n t e r e s t s as the court i n S e m i n o l e T r i b e v . B u t t e r w o r t h , the court i n B a r o n a focussed mainly on the c l a s s i f i c a t i o n issue, noting that i t 53 I b i d at 715. 54 I b i d at 720. 55 694 F.2d 1185 (1982). 152 was a close question and "not susceptible of easy application".(56) This d i f f i c u l t y was acknowledged by the U.S. Supreme Court i n C a l i f o r n i a v . C a b a z o n B a n d o f M i s s i o n I n d i a n s . ( 5 7 ) In a 6:3 decision, the Court endorsed the c l a s s i f i c a t i o n scheme adopted i n the lower courts for determining whether state laws applied to Indian reservations by v i r t u e of PL 280. This r a t i f i c a t i o n was, however, rather lukewarm:(58) "I t i s not a b r i g h t - l i n e rule, however; and . . . and argument of some weight may be made that the bingo statute i s prohibitory rather than regulatory. But i n the present case, the court [of Appeals] reexamined the state law and reaffirmed i t s holding i n Barona, and we are reluctant to disagree with that court's view of the nature and intent of the state law at issue here." The Court was c a r e f u l to point out that each state law must be examined i n d e t a i l before they can be characterized as regulatory or prohibitory.(59) If the decision had rested there, i t would merely have been subject to the c r i t i c i s m l e v i e d against S e m i n o l e T r i b e v . B u t t e r w o r t h , i . e . that state p o l i c y i s the determining factor. But, l i k e the Wisconsin court i n O n e i d a , the Supreme Court was compelled to place the c l a s s i f i c a t i o n scheme for PL 280 i n a larger context. In t h i s instance, however, i t 56 I b i d at 1189. 57 S u p r a fn.19. 58 I b i d at 4227. 59 I b i d . 153 was not a back-drop of t r i b a l sovereignty, but the general issue of state j u r i s d i c t i o n on reserves. From the outset, the Court underlined that i t had not, in previous decisions, established "an i n f l e x i b l e per se r u l e " precluding state j u r i s d i c t i o n over t r i b e s and t r i b a l members i n the absence of congressional consent.(60) Indeed, the Court recognized a ro l e for the state regardless of the federal p o s i t i o n " i f the state in t e r e s t s at stake are s u f f i c i e n t to j u s t i f y the assertion of state authority".(61) Accordingly, there was to be a balancing of federal, state and Indian in t e r e s t s i n determining the a p p l i c a b i l i t y of state laws to Indian lands. The state i n t e r e s t asserted i n C a b a z o n was the prevention of organized crime. The legitimacy of t h i s concern was recognized, but, i n the absence of any evidence of organized criminal involvement i n the Cabazon gambling operations, the Supreme Court was not prepared to override "compelling" federal and t r i b a l i n t e r e s t s of encouraging t r i b a l s e l f - s u f f i c i e n c y and economic development.(62) What t h i s implies i s that i f there is some degree of evidence of organized crime (however that might be defined) on Indian reservations, then state 60 I b i d at 4228. 61 I b i d at 4229, quoting from N e w M e x i c o v . M e s c a l e r o A p a c h e T r i b e , 462 U.S. at 334. 62 C a l i f o r n i a v . C a b a z o n , i b i d at 4230. 154 l e g i s l a t i o n , whether or not i t i s merely "regulatory" w i l l apply. To summarize the Cabazon decision: the Supreme Court constructed a two-pronged t e s t for determining state j u r i s d i c t i o n on Indian lands under PL 280. F i r s t , should the state l e g i s l a t i o n be characterized as criminal-prohibitory or c i v i l - r e g u l a t o r y ? Secondly, even i f i t i s designated a c i v i l enactment, are state interests s u f f i c i e n t l y important to make i t applicable nonetheless? Regarding the f i r s t aspect of t h i s t e s t , Turner c r i t i c i z e s i t as a s s i m i l a t i o n i s t , because t r i b a l i n t e r e s t s are held i n abeyance while the p o l i c y i n t e r e s t s of the state are assessed. This, he argues w i l l produce non-uniform and incongruous r e s u l t s due to p o l i c i e s which vary dramatically from state to state.(63) This c r i t i c i s m pales beside the one offered by Kronowitz et a l . , which i s directed at the second aspect of the Cabazon t e s t . I t deserves to be quoted i n full:(64) "Even more dangerous to the future of t r i b a l s e l f -government, however, was the Court's deference to state i n t e r e s t s . ... The Court refused to recognize that the c r i t i c a l i n t e r e s t at stake i s the sovereign r i g h t of the t r i b e s to govern reservation a f f a i r s free from state i n t r u s i o n . In f a i l i n g to do so, Cabazon i l l u s t r a t e s the modern Court's continuing willingness to use unique factual situations to render general, 63 Turner, "Evolution, Assimilation and State Control of Gambling i n Indian Country: etc.", (1988) 24 Idaho Law  Review 317 at 335. 64 Kronowitz et a l . , s u p r a fn. 30 at 583. 155 open-ended opinions i n Indian law. The ra t i o n a l e used by the Court, although granting a short-term v i c t o r y f o r the Indian p l a i n t i f f s i n Cabazon, may e a s i l y be applied to the detriment of other t r i b e s seeking protection from state j u r i s d i c t i o n a l i n t r u s i o n i n the future." I t i s f a i r to say that the Supreme Court's decision i s perhaps not as benign as i t may f i r s t appear to be. In Cabazon, the a p p l i c a b i l i t y of the Organized Crime Control Act (OCCA) to Indian gambling operations was also considered. The Court recognized that there was a c o n f l i c t between the decisions of the lower courts on t h i s issue. In U.S. v. Farris,(65) for example, the Puyallup Indians i n Washington were running casinos without any approval or licence from the State Gambling Commission. Although PL 280 had been adopted by the state, i t covered only eight s p e c i f i c subject areas, and gambling was not included i n them. Having acknowledged t h i s , the court then considered whether the casino operations v i o l a t e d OCCA's p r o h i b i t i o n of i l l e g a l gambling. As was indicated e a r l i e r , there must therefore be a v i o l a t i o n of state law for OCCA to apply. The state of Washington allowed some forms of gambling, but i t had s t r i c t regulations against professional gambling. These regulations d i d not, however, apply to Indians on Indian land. Nonetheless, i t was held that OCCA was applicable because the casino operations contravened the state's public p o l i c y against professional gambling. The judge who 65 624 F.2d 890 (1980). 156 dissented i n t h i s case summed up the l o g i c a l d i f f i c u l t i e s with t h i s view:(66) " I t exceeds the l i m i t s of reasonable construction to hold that conduct which could not be punished under the state law i s nonetheless "a v i o l a t i o n of the law of [the] State" within the meaning of 18 U.S.C. # 155. Conduct to which the law i s inapplicable does not v i o l a t e the law i n the ordinary meaning of those words. The idea that a person can transgress state law by conduct not punishable under that state law i s inconsistent with minimum notions of notice and fai r n e s s . " F a r r i s was applied to the OCCA argument raised i n Barona.(67) The C a l i f o r n i a court explained that whether a t r i b a l a c t i v i t y i s "a v i o l a t i o n of the law of a state" within the meaning of OCCA depends on whether i t v i o l a t e s the "public p o l i c y " of the state, the same t e s t for app l i c a t i o n of state law under PL 280. Hence, i t concluded that the Barona's bingo operations were not contrary to the public p o l i c y of C a l i f o r n i a . This merging of the t e s t s for OCCA and PL 280 would appear to l i m i t the a p p l i c a b i l i t y of the federal enactment to those states i n which gambling i s completely prohibited. Compare t h i s i nterpretation with the decision i n U.S. v. Dakota,(68) where the Michigan court stated that although the state l e g i s l a t i o n was not applicable to Indians on Indian land, i t could be incorporated by reference into OCCA 66 I b i d at 898 per Browning, C i r c u i t J . 67 Supra fn.55 at 1190. 68 796 F.2d 186 (1986). 157 to determine whether the gambling was i l l e g a l . There was no need, therefore to divine state "public p o l i c y " on the issue; i f Indians engage i n gambling operations above s t a t u t o r i l y defined l e v e l s which are i l l e g a l o f f the reserve under state law, t h i s i s a v i o l a t i o n of OCCA. This approach was j u s t i f i e d on the basis that OCCA i s a federal statute and raises no danger of encroachment on Indian sovereignty by the states.(69) There i s c e r t a i n l y no d i r e c t state encroachment, but the incorporation of state statutory standards i n federal l e g i s l a t i o n has exactly the same impact on Indian autonomy as i f they were applied d i r e c t l y . The Supreme Court i n C a b a z o n chose not to resolve t h i s inconsistency, but i t did make an observation which w i l l l i k e l y l i m i t the use of OCCA against Indian gambling operations:(70) "There i s nothing i n OCCA in d i c a t i n g that the States are to have any part i n enforcing federal crimes or are authorized to make arrests on Indian reservations that in the absence of OCCA they could not e f f e c t . We are not informed of any federal e f f o r t s to employ OCCA to prosecute the playing of bingo on Indian reservations, although there are more than 100 such enterprises currently i n operation, many of which have been i n existence f o r several years, for the most part with the encouragement of the Federal Government." In the wake of the Supreme Court's decision i n C a b a z o n , the federal government reactivated e a r l i e r , f a i l e d e f f o r t s to l e g i s l a t e a regulatory scheme for gambling operations i n 69 I b i d at 188. 70 C a l i f o r n i a v . C a b a z o n , s u p r a fn. 19 at 4228. 158 Indian country. In 1983 a b i l l known as the Indian Gambling and Control A c t had been introduced i n Congress.(71) Designed to meet concerns regarding the supervision of t r i b a l gambling a c t i v i t i e s , i t proposed to e s t a b l i s h minimum federal standards by requiring the adoption of t r i b a l ordinances to regulate gambling operations and by requiring background checks on in d i v i d u a l s and management firms involved i n the t r i b a l gaming operations. Further, the Secretary of the I n t e r i o r would have to approve a l l t r i b a l gambling ordinances and management contracts entered into by an Indian t r i b e for the operation and management of the gambling operations. This b i l l f a i l e d to pass that session of Congress and was reintroduced i n i d e n t i c a l form i n 1985.(72) In addition a Senate version was also introduced which provided for the creation of Indian-controlled Gaming Commissions to supervise Indian gambling enterprises.(73) Neither of these were passed into law. Late i n 1988, however, i n the dying days of the Reagan Administration, the Indian Gaming Regulatory A c t became law.(74) This Act establishes an National Indian Gaming Commission and a t r i - p a r t i t e regulatory scheme. T r a d i t i o n a l forms of Indian gambling are within the exclusive control of 71 H.R. 4566, 98th Cong., 1st Sess. (1983). 72 H.R. 1920, 99th Cong., 1st Sess. (1985). 73 S. 902, 99th Cong., 1st Sess. (1985). 74 Public Law 100-497, 100th Congress (Oct. 1988). 159 the t r i b e s ; bingo games w i l l be supervised by the Commission; every other form of gambling (e.g. casino games, l o t t e r i e s , pari-mutuel betting) requires the Indian t r i b e s to enter into a "compact" with the state i n which the reservation i s situated. Inevitably, t h i s l a t t e r provision has provoked extensive c r i t i c i s m and opposition from the t r i b e s , who perceive i t as an u n j u s t i f i e d encroachment on t h e i r sovereignty. Consequently, several court challenges have been launched. The Indian gaming issue i n the United States i s , therefore, s t i l l the subject of controversy and c o n f l i c t . I t i s viewed by the Indian t r i b e s as being important not only i n i t s own r i g h t as a v i t a l t o o l of economic regeneration, but also i n a symbolic sense, serving as a focus for the larger issue of Indian sovereignty. The remainder of t h i s chapter w i l l examine the dimensions of the Indian gaming issue i n Canada. 160 The Canadian Context; The Significance of fiamhUwg on Reserves(75) Indian bands view the r i g h t to control gambling on the reserves as important for several reasons. I t i s , as was indicated i n the opening chapter, a t r a d i t i o n a l pastime of c u l t u r a l s i g n i f i c a n c e for native Indians. For example, Maranda i n her e t h n o l o g i c a l / h i s t o r i c a l study of the Coast S a l i s h Indians, found that gambling had deep, h i s t o r i c roots i n t h e i r culture.(76) I t served as a form of s o c i a l expression and as a forum i n t h e i r p o l y t h e i s t i c r e l i g i o n f o r supernatural power. The gambling games of dice, d i s c and bone, hand or s l a h a l were seen to be an expression of man's power a f f i l i a t i o n s . Power was an element which could a f f e c t the outcome of each gambling event, and the games would themselves be an endorsement of the "power favour", as they gave tangible and observable v e r i f i c a t i o n of the influence of power. (77) The hand, bone or s l a h a l game i s the only Coast S a l i s h gambling game of aboriginal o r i g i n s t i l l being played today. Modern forms of gambling, such as bingo and p u l l t i c k e t s , have taken the place of the others. The 75 While much of the succeeding commentary w i l l be applicable to a l l parts of Canada, attention w i l l often be focussed on the p a r t i c u l a r s i t u a t i o n that p r e v a i l s i n B r i t i s h Columbia since time and space precludes a more comprehensive analysis. 76 Maranda, Coast S a l i s h Gambling Games,Canadian Ethnology Service Paper # 93 (Ottawa: National Museums of Canada, 1984). 77 Ibid at ( v i ) . 161 continued s i g n i f i c a n c e of the bone game i s noted by Starr who observes that the Gitksan on the Skeena River s t i l l observe and maintain a t r a d i t i o n a l c h i e f t a i n p o s i t i o n whose Indian name i s "Gambling Chief":(78) "He derives h i s power and p o s i t i o n of Chief as a r e s u l t of h i s s k i l l and cunning i n the bone game. The Chief p a r t i c i p a t e s equally with other Gitksan c h i e f s of high rank i n t h e i r potlach ... T r a d i t i o n a l l y , the Gitksans gambled for the r i g h t to win s p o i l s of war which then became the common property of the house (or clan) of the chief who won i t . The communal ownership of gambling winnings i s i n keeping with the fundamental and unique Indian philosophy of communal ownership of property. 1 1 Gambling has, therefore, always been a s o c i a l l y acceptable a c t i v i t y i n Indian communities and remains so. As i n other communities, bingo and other forms of gambling play an important s o c i a l function. Increasingly, however, band councils are coming to appreciate the revenue generating p o t e n t i a l that gambling has for the reserves. In B r i t i s h Columbia, f o r example, the Gitksan i s one of the bands running i t s own bingo operations, the proceeds from which are kept i n the community for projects such as community and treatment centres and funding court challenges. In recent years, there has been increasing attention given to economic development on reserves. In part, t h i s stems from the federal government which wants to reduce Indian dependence on federal funding. But i t also r e f l e c t s a 78 "Submission to the Task Force on Gaming on Reserves", i n INAC, Gaming on Reserves, supra fn.4 at 35. 162 determination on the part of the bands to reassert control over t h e i r own a f f a i r s . Economic dependency stems d i r e c t l y from the structure o f the I n d i a n A c t and i t s underlying philosophy of paternalism. Under the terms of t h i s l e g i s l a t i o n , Indian land i s protected by provisions which exclude Indian people from taxes, l i e n s , mortgages or other charges on t h e i r lands. These provisions have, however, made i t d i f f i c u l t f or Indians to enter the modern debtor society. Ponting and Gibbins observe that they have made i t next to impossible for Indians to ra i s e outside investment c a p i t a l , f o r p o t e n t i a l l y valuable Indian land cannot be mortgaged so that there i s reliance on the federal government for the c a p i t a l needed to promote economic development. The ostensibly protective provisions of the A c t "now serve as a shackle on Indian self-reliance".(79) S e c t i o n 8 7 of the I n d i a n A c t exempts from taxation the int e r e s t s of an Indian or a band i n reserve or surrendered lands and the personal property of the same situated on a reserve. As B a r t l e t t points out, the denial of the a b i l i t y of other governments to tax a community may secure the autonomy of that community.(80) He further comments that, regardless of the powers of government possessed by a 79 S u p r a fn.6 at 10. 80 "Taxation" i n Morse (ed.) s u p r a fn. 9 at 579. 163 community, an exemption from taxation w i l l encourage economic development of that community.(81) That only holds true, however, i f the community has resources of i t s own to finance such development. P o l i t i c a l power i s , to a large extent, dependent on economic power. The l e g i s l a t i o n which protects Indians from external taxation also l a r g e l y prevents them from developing t h e i r own tax base. Section 83 of the Indian Act provides that where a band "has reached an advanced state of development, the council of the band may, subject to the approval of the minister make by-laws for" i n t e r a l i a "the r a i s i n g of money by the assessment and taxation of int e r e s t s i n land i n the reserve of persons lawfully i n possession thereof". A government task force recently concluded that band taxation powers are underdeveloped due to the l i m i t a t i o n s set out i n s. 83 and that t h i s i s incompatible with the basic need of bands for tax revenue to pay for the in f r a s t r u c t u r e required to a t t r a c t and support business.(82) Even i f more l i b e r a l taxation powers were given to the bands there i s a r e a l question of whether, given the socio-demographic p r o f i l e of many Indian bands, they would have much impact. A study of Indian lands i n B r i t i s h Columbia and 81 Ibid. 82 INAC. Task Force on Indian Economic Development. Summary  of the report to the Deputy Minister. INAC (Ottawa: Supply and Services Canada, 1986) p. 21. 164 the Yukon i n the l a t e 1970s found that the vast majority have a population of 300 or l e s s and that t h i s small s i z e creates problems. They lack the minimum population, e s p e c i a l l y i n the labour force age group, to sustain v i a b l e economic development enterprises, and t h e i r populations are too small to permit the band to r e a l i z e economies of scale i n the d e l i v e r y of services.(83) Limited business opportunities and high unemployment are hardly factors conducive to the nourishment of a healthy tax base. A recent government review of gaming on reserves offered the following assessment:(84) "Most Indian communities are on the periphery of the Canadian economic system regardless of t h e i r geographic locat i o n . This i s e s p e c i a l l y so i n the remote areas where there tend to be few economic opportunities. There i s a l i m i t to the number of jobs, even l o w - s k i l l jobs, i n the primary resources sector. Moreover, given the e x i s t i n g f i s c a l r e s t r a i n t , government funds cannot be expected to meet a l l economic development requirements. Many bands do not have an adequate tax base on which to r a i s e s i g n i f i c a n t funds additional to what i s provided by federal budgeting which must concentrate f i r s t on c r i t i c a l areas of need such as housing. In these circumstances, gaming provides a rare opportunity for the bands to r a i s e revenues for community purposes by "voluntary taxation"."85 83 Ponting and Gibbins, supra fn. 6 at 36. The recent task force on Indian economic development also concluded that small markets on Indian reserves have stunted the growth of the r e t a i l and manufacturing sectors of the native business community - INAC. Task Force on Indian Economic Development, supra fn.82 at 11. 84 INAC, supra fn. 4 at 13. 85 By a t t r a c t i n g non-natives onto the reserves to play bingo etc. the bands would not be wholly r e l i a n t on t h e i r own members to generate revenues. Such enterprises would also 165 The Task Force might also have mentioned that federal p r o v i n c i a l c o n f l i c t over the provision of s o c i a l services on reserves has compounded the s i t u a t i o n . The provinces acknowledge that the federal government has the r i g h t to l e g i s l a t e regarding Indians and the lands reserved f o r them. Some go further to assert that the federal government has the t o t a l r e s p o n s i b i l i t y to l e g i s l a t e and provide services for Indians on reserves. The federal government's p o s i t i o n i s that while i t has the c o n s t i t u t i o n a l r i g h t to l e g i s l a t e on (and provide services to) Indians, where i t chooses not to exercise that r i g h t , the normal d i v i s i o n of powers set out i n the con s t i t u t i o n p r e v a i l s . (86) In the area of s o c i a l services, therefore, the provinces would, i n the absence of federal action, be responsible for the provision of these c o s t l y services. In many instances, the p r o v i n c i a l governments have chosen not to assume t h i s r e s p o n s i b i l i t y , r e s u l t i n g i n the s o c i a l impoverishment of the reserves. In the words of one observer, reserve Indians "are caught i n a f i n a n c i a l squeeze and a j u r i s d i c t i o n a l conflict".(87) Gambling revenues o f f e r the opportunity to loosen t h i s v i s e . As Starr indicates, the general objective of Indian bands i n conducting bingos etc. on reserves i s to supplement perhaps stem the flow of native gambling expenditures o f f the reserve. 86 Ponting and Gibbins, supra fn.6 at 182. 87 Morse, supra fn. 9 at 8. 166 the annual operating budget that i t receives from the federal government. The aim i s to draw natives and non-natives onto the reserves to gamble. The p r o f i t s are used to provide band members with community programs not otherwise affordable under the core funding. (88) I t i s a way of improving the immediate conditions of l i f e on reserves while at the same time furthering economic autonomy to some degree. Indian peoples recognize that self-government i s intertwined with economic development. Without the l a t t e r , self-government i s a meaningless phrase.(89) Gambling means money and money equates with power. Even i f , as the Task Force on Gaming on Reserves suggests, the revenue from gambling i s often f a i r l y modest,(90) band-run bingos s t i l l represent an affirmation of Indian control over t h e i r own lands, that the band councils are the ones to make the decisions as to whether or not any type of a c t i v i t y can be ca r r i e d out on t h e i r lands. The fundamental issue to be resolved here i s whether they are l e g a l l y e n t i t l e d to conduct gambling operations on reserves without a p r o v i n c i a l l i c e n c e . There are several p o s s i b i l i t i e s to consider. In the preceding chapter, the c o n s t i t u t i o n a l i t y of the tran s f e r of 88 Supra fn. 78 at 2. 89 See the comments made by Chief Gabriel Gopher of the North Battleford D i s t r i c t Chiefs to the Task Force on Indian Economic Development, supra fn. 82 at 46. 90 Supra fn.4 at 13-18. power over l o t t e r y schemes from the federal to the p r o v i n c i a l governments was s c r u t i n i z e d . This issue has obvious implications for j u r i s d i c t i o n over gaming on reserves. I f the transfer of power over l o t t e r i e s and games of chance were to be struck down as being i n v a l i d , gambling would once more be firmly within federal j u r i s d i c t i o n , and any gambling on Indian reserves would, absent any other l e g a l l y compelling argument, require federal consent. This would at l e a s t restore the t r a d i t i o n a l c o n s t i t u t i o n a l arrangements regarding Indian a f f a i r s by precluding p r o v i n c i a l involvement. As the Task Force on Gaming on Reserves notes, some bands would be w i l l i n g to accept federal regulation, but for others such an arrangement would be an unacceptable compromising of inherent aboriginal r i g h t s over gaming on reserves.(91) For the purposes of the succeeding discussion, however, the c o n s t i t u t i o n a l v a l i d i t y of the f e d e r a l - p r o v i n c i a l arrangement w i l l be assumed, without prejudice to the preceding analysis. Secondly, there are independent arguments to be made that gaming control enactments i n some provinces, B r i t i s h Columbia i n p a r t i c u l a r , offend basic p r i n c i p l e s of administrative law which may a f f e c t t h e i r l e g a l effectiveness both on and o f f Indian lands. These issues w i l l be held i n abeyance u n t i l the f i n a l chapter where they 91 Supra fn. 4 at 19. This p o s i t i o n w i l l be examined i n f r a , following the discussion of the application of p r o v i n c i a l enactments on reserves. 168 w i l l undergo rigorous analysis. For present purposes, however, t h e i r v a l i d i t y w i l l also be assumed. In the remainder of t h i s chapter, the focus w i l l be on two key questions: whether p r o v i n c i a l gaming provisions and l i c e n s i n g requirements are applicable on Indian lands under the terms of s . 8 8 of the I n d i a n A c t , and whether Indians on reserves have an inherent r i g h t to regulate t h e i r own a f f a i r s , including gambling. P r o v i n c i a l J u r i s d i c t i o n Although the federal government has exclusive j u r i s d i c t i o n over "Indians and Lands reserved f o r Indians",(92) p r o v i n c i a l l e g i s l a t i o n may apply on reserves i f i t conforms to s . 8 8 of the I n d i a n A c t : "Subject to the terms of any treaty and any other Act of the Parliament of Canada, a l l laws of general ap p l i c a t i o n from time to time i n force i n any province are applicable to and i n respect of Indians i n the province, except to the extent that such laws are inconsistent with t h i s Act or any order, rule, regulation or by-law made thereunder, and except to the extent that such laws make provision f o r any matter for which provision i s made by or under the Act." The f i r s t issue to be examined i s whether p r o v i n c i a l l o t t e r y and gambling enactments are "laws of general ap p l i c a t i o n " . One of the key cases on the a p p l i c a b i l i t y of 92 C o n s t i t u t i o n A c t , 1 8 6 7 , s . 9 1 ( 2 4 ) . 169 p r o v i n c i a l l e g i s l a t i o n "to and i n respect of Indians i n the province" i s C a r d i n a l v . A t t o r n e y G e n e r a l o f A l b e r t a , ( 9 3 ) i n which i t was stated that "[n]o statute of the p r o v i n c i a l l e g i s l a t u r e dealing with Indians or t h e i r lands as such would be v a l i d and e f f e c t i v e , but there i s no reason why general l e g i s l a t i o n may not a f f e c t them." Within C a r d i n a l one of the main issues i n contention was whether or not such p r o v i n c i a l laws apply through r e f e r e n t i a l incorporation i n s . 8 8 of the I n d i a n A c t , i . e . i t s terms become federal law and apply to Indians as such, or whether they apply independently as long as the subject matter comes within p r o v i n c i a l j u r i s d i c t i o n . The former view, often referr e d to as the "enclave theory" - that Indian reserves are federal enclaves from which p r o v i n c i a l laws are excluded - was rejected by the majority. I t supported the view that s . 8 8 simply declares that, within i t s terms, p r o v i n c i a l laws apply of t h e i r own force. Accordingly, p r o v i n c i a l gaming control l e g i s l a t i o n , to be applicable " i n respect of Indians" must at the very l e a s t come within one the enumerated heads of s . 9 2 of the C o n s t i t u t i o n A c t , 1 8 6 7 . There are several which could encompass a p r o v i n c i a l l o t t e r y l i c e n s i n g scheme: s . 9 2 ( 9 ) authorizes the provinces to impose "Shop, Saloon, Tavern, Auctioneer and other Licences i n order to the r a i s i n g of a Revenue fo r P r o v i n c i a l , Local or Municipal Purposes"; the 93 [1974] 2 S.C.R.695. 170 provinces have power over property and c i v i l r i g h t s ( s . 9 2 ( 1 3 ) ) and also over matters of a l o c a l or private nature ( s . 9 2 ( 1 6 ) ) . Three Supreme Court of Canada decisions i n recent years have considered the extent to which Indians enjoy immunity from otherwise v a l i d p r o v i n c i a l l e g i s l a t i o n . In F o u r B M a n u f a c t u r i n g L t d . v . U n i t e d G a r m e n t W o r k e r s o f A m e r i c a , ( 9 4 ) the Court established that a law which i s within p r o v i n c i a l j u r i s d i c t i o n under s . 9 2 applies to Indians of i t s own force unless i t a f f e c t s "an i n t e g r a l part of primary federal j u r i s d i c t i o n over Indians and Lands reserved f o r the Indians". I t would be v i r t u a l l y impossible to sustain such an argument i n r e l a t i o n to p r o v i n c i a l gaming enactments i n the face of the unqualified, e x p l i c i t , federal divestment of control over the area found i n the C r i m i n a l C o d e . In K r u g e r a n d M a n u e l v . T h e Q u e e n , ( 9 5 ) the Supreme Court held that the term "laws of general a p p l i c a t i o n " i n s . 8 8 excluded any law that, "by i t s e f f e c t , impairs the status or capacity of a p a r t i c u l a r group" (emphasis added). More recently, however, the Court l i m i t e d the scope of t h i s exemption by defining as a law of general a p p l i c a t i o n one which has the e f f e c t of impairing Indian status, provided that i t does not "overtly or colourably ... single out 94 [1980] 1 S.C.R. 1031. 95 [1978] 1 S.C.R. 104. 171 Indians f o r spec i a l treatment and impair t h e i r status as Indians."(96) Consequently, as Monachan and Petter observe, it i s the purpose of the law, rather than i t s e f f e c t , that determines whether i t i s a "law of general a p p l i c a t i o n " within the meaning of s . 8 8 . ( 9 7 ) P r o v i n c i a l gaming control provisions would not be excluded from t h i s d e f i n i t i o n of a "law of general ap p l i c a t i o n " . The regulations do not preclude native groups which have a charitable or r e l i g i o u s purpose from applying for and being granted licences to conduct bingos and other l o t t e r y schemes. Indeed, i n 1986 the Federal Court of Appeal overruled the Minister of National Revenue and granted a native Indian organization charitable status under the I n c o m e T a x A c t . ( 9 8 ) Nonetheless, as Starr comments, although most Indians and Indian bands are poor, they are neither charitable nor r e l i g i o u s organizations.(99) Even i f a p r o v i n c i a l enactment q u a l i f i e s as a "law of general a p p l i c a t i o n " i t s application to Indians w i l l be precluded i f i t i s inconsistent with the I n d i a n A c t "or any 96 R . V . D i c k , [1985] 2 S.C.R. 309. 97 Monachan and Petter, "Developments i n Constitutional Law: The 1985-86 Term", (1987) 9 Supreme Court Law Review 69 at 162. 98 N a t i v e C o m m u n i c a t i o n s S o c i e t y o f B . C . v . T h e M i n i s t e r o f N a t i o n a l R e v e n u e , (1986) 11(8) Canadian Human Rights  Advocate 7. 99 S u p r a fn. 78 at 10. 172 order, rule, regulation or by-law made thereunder". As was noted above,(100) s . 8 7 of the I n d i a n A c t provides an exemption from taxation for the property i n t e r e s t s of Indians on reserves as follows: "... the following property i s exempt from taxation, namely: (a) the i n t e r e s t of an Indian or a band i n reserve or surrendered lands; and (b) the personal property of an Indian or band situated on a reserve; and no Indian or band i s subject to taxation i n respect of the ownership, occupation or use of any property mentioned i n paragraph (a) or (b) or i s otherwise subject to taxation i n respect of any such property;". For the purposes of s . 8 8 , i t must be determined whether or not the l i c e n s i n g of gambling a c t i v i t i e s can be categorized as a form of taxation from which reserve Indians are exempt. As B a r t l e t t points out, s . 8 7 w i l l a f f o r d an exemption only i n respect of taxation; i t affords no protection to f i n a n c i a l l e v i e s which are otherwise classified.(101) The courts have distinguished between taxes and licences i n the application of s . 8 7 of the Indian Act. For example, i n A t t o r n e y G e n e r a l f o r Q u e b e c v . W i l l i a m s , ( 1 0 2 ) the Court, i n considering the nature of a one d o l l a r l i c e n s i n g fee under p r o v i n c i a l tobacco tax 100 See fn. 79 and surrounding text. 101 B a r t l e t t , Indians and Taxation (Saskatoon: Native Law Centre, 1980). 102 (1944) 82 C.C.C. 166 (Quebec Ct. Sess.). 173 l e g i s l a t i o n , drew a d i s t i n c t i o n between a li c e n s e which i s merely a permit and one which i s a form of taxation:(103) "... tax i s a general word which includes any contribution imposed by a competent authority to assure the services of the State. License would be a permission to do any act whatsoever. Although demanded with a view to regulation, i t could nevertheless i n c i d e n t a l l y comprise an amount of money capable of assuring the services of the State. From t h i s i t may be r e a l i z e d that i f a license seems to be imposed s o l e l y to assure revenue f o r the State, such permit i s no longer a license but a tax, whatever may be the word used i n the text of the Act." In B r i t i s h Columbia, for example, the Terms and Conditions Respecting Licensing of Lottery Events impose licence fees of $50 and two per cent of gross revenues f o r bingos with prizes exceeding $500 and of $10 f o r those bingos o f f e r i n g prizes of less than $500. These r e l a t i v e l y minor licence fees would seem to be i n the category of a permit rather than a tax. There i s , however, another argument which might be made: that the proceeds of gambling events (which go to charitable or r e l i g i o u s organizations) are a substitute for tax d o l l a r s . In other words, i f the province did not allow these groups to r a i s e revenues for themselves, the province i t s e l f would have to provide the s o c i a l services and community amenities funded by those organizations through tax revenues. P r o v i n c i a l l y licensed gambling, from t h i s perspective, i s a form of surrogate taxation. The concept of 103 Ibid at 169, per Guerin J . Sess. 174 true l o t t e r i e s as a form of i n d i r e c t taxation i s quite widely accepted and well-documented.(104) Regarding quasi-l o t t e r i e s , however, t h i s argument i s more speculative and would require f a i r l y minute analysis of p r o v i n c i a l s o c i a l services spending patterns before and a f t e r the expansion of gambling that has occurred p a r t i c u l a r l y i n the past decade. Just as the Indian bands who are interested i n promoting gambling are using i t as a substitute f o r powers of taxation, the p r o v i n c i a l governments are also using gambling revenues as an a l t e r n a t i v e to d i r e c t taxation. One f i n a l issue regarding the a p p l i c a b i l i t y of s.88 of the Indian Act which must be examined i s the impact of band by-laws which purport to authorize and regulate gaming on reserves. Section 88 provides that p r o v i n c i a l l e g i s l a t i o n which duplicates or c o n f l i c t s with a by-law w i l l not apply " i n respect of Indians". As was discussed above, s.81 of the Act provides band councils with rather l i m i t e d powers to enact by-laws.(105) 104 See e.g. Johnson, "An Economic Analysis of L o t t e r i e s " , (1976) 24 Canadian Tax Journal 639; Livernois, "The Redistributive E f f e c t s of L o t t e r i e s : Evidence from Canada", (1987) 15 Public Finance Quarterly 339; McLoughlin, "The L o t t e r i e s Tax", (1979) 1 Canadian Taxation 16 and Vai l l a n c o u r t and Grignon, "Canadian Lo t t e r i e s as Taxes: Revenues and Incidence", (1988) 36 Canadian Tax Journal 369. 105 See fn. 10 and surrounding text. 175 In a 1981 decision of the Quebec Court of Appeal they were categorized as follows:(106) "The powers conferred by s.81 are f i r s t of a l l , powers to regulate, and to regulate only "administrative statutes". In other words, a band council has, i n t h i s area, the same sort of l e g i s l a t i v e powers as those possessed by the council of a municipal corporation. The power to give e f f e c t to regulations cannot extend beyond these administrative statutes; they are accessory and nothing more." The band councils are, according to t h i s determination, a th i r d - r a t e , rather than a t h i r d order of government. There have been attempts by more than 220 band councils to enact by-laws enabling bingo and other l o t t e r y schemes on Indian reserves pursuant to s . 8 1 ( m ) ( 1 0 7 ) . A l l but one, passed i n 1979, were disallowed by the Minister of Indian A f f a i r s under the power contained i n s . 8 2 . ( 1 0 8 ) The reason given for t h i s action i s that the Criminal C o d e takes precedence over the Indian A c t . Starr reveals that, i n an open l e t t e r to a l l Chiefs and Councils i n B r i t i s h Columbia dated October 23, 1986, the Regional Director of Economic Development offered the following j u s t i f i c a t i o n : ( 1 0 9 ) "As you probably know, the Criminal Code takes precedence over the Indian Act. Thus the Department has 106 R e S t a c e y a n d M o n t o u r a n d t h e Q u e e n , (1981) 63 C.C.C (2d) 61, per Bernier J.A. 107 "The council of a band may make by-laws ... f o r any or all of the following purposes, namely: ... (m) the control and p r o h i b i t i o n of public games, sports, races, a t h l e t i c contests and other amusements". 108 Starr, s u p r a fn. 78 at 2-3. 109 I b i d at 4-5. 176 had no choice but to disallow the by-laws, notwithstanding our recognition of the economic benefits that can be generated by gaming a c t i v i t i e s . " In other words, the federal government considers i t s e l f bound by the agreement i t made with the provinces i n 1985 to vacate the f i e l d of regulating l o t t e r y schemes. And, despite the f a c t that the C r i m i n a l C o d e and the I n d i a n Act are both federal statutes, the former i s ranked above, and i s deemed to p r e v a i l over the l a t t e r . The federal government i s thus unprepared to recognize that Indian bands have the power under the by-law provision, or otherwise, to remedy the f a i l u r e to address Indian i n t e r e s t s i n the 1985 f e d e r a l -p r o v i n c i a l agreement regarding j u r i s d i c t i o n over permitted gambling. As Lyon indicates, the practice of ignoring Indian enactments which purport to remedy such d e f i c i e n c i e s , stems from the enactment of s . 8 8 of the I n d i a n Act which induces the b e l i e f that p r o v i n c i a l laws f i l l a l l l e g i s l a t i v e gaps.(110) Starr argues i n the strongest terms that t h i s represents an unnecessarily narrow approach to band by-law making powers and one which i s at odds with the federal government's own view of the r o l e that t h i s power w i l l play in r e a l i z i n g the future aspirations of Indian peoples regarding self-government.(Ill) She refers to two court 110 Lyon, "Constitutional Issues i n Native Law", i n Morse (ed.), s u p r a fn. 9 at 421. 111 Starr, s u p r a fn. 78 at 10-15. 177 d e c i s i o n s i n w h i c h t h e r e i s j u d i c i a l a c k n o w l e d g e m e n t o f t h e i n t e n t i o n o f t h e C a n a d i a n g o v e r n m e n t t o e x p a n d t h e p o w e r o v e r l o c a l b a n d a f f a i r s i n t h e p u r s u i t o f I n d i a n s e l f -g o v e r n m e n t t h r o u g h e c o n o m i c s e l f - r e l i a n c e . ( 1 1 2 ) H e r a r g u m e n t s a r e b o l s t e r e d b y r e c e n t amendments made t o t h e I n d i a n A c t w h i c h e x p a n d t h e t a x a t i o n p o w e r s o f b a n d c o u n c i l s . ( 1 1 3 ) T h i s s i t u a t i o n u n d e r s c o r e s w h a t t o I n d i a n s i s a n i n c o n t r o v e r t i b l e p o l i t i c a l f a c t : t h a t t h e p r o v i n c e s h a v e f a r more p o w e r o v e r f e d e r a l p o l i c i e s , e v e n t h o s e r e g a r d i n g I n d i a n s t h a n do t h e a b o r i g i n a l p e o p l e s t h e m s e l v e s . A s l o n g a s t h e M i n i s t e r o f I n d i a n A f f a i r s c o n t i n u e s t o e x e r c i s e h i s v e t o p o w e r o v e r b a n d b y - l a w s a u t h o r i z i n g g a m b l i n g a c t i v i t i e s o n t h e r e s e r v e s , t h e r e i s l i m i t e d o p p o r t u n i t y t o t e s t t h e i r v a l i d i t y b e f o r e t h e c o u r t s . A c a s e was r e c e n t l y b r o u g h t b e f o r e t h e F e d e r a l C o u r t b y a b a n d f o r a d e c l a r a t i o n t h a t t w o b y - l a w s , u n r e l a t e d t o g a m i n g , a d o p t e d b y t h e b a n d c o u n c i l w e r e i n f o r c e n o t w i t h s t a n d i n g t h e i r d i s a l l o w a n c e b y t h e M i n i s t e r . ( 1 1 4 ) The f e d e r a l t r i a l j u d g e d i s m i s s e d t h e a c t i o n o n t h e g r o u n d s t h a t 112 I b i d . S e e W h i t e b e a r B a n d C o u n c i l v . C a r p e n t e r s P r o v i n c i a l C o u n c i l , [ 1 9 8 2 ] 3 C . N . L . R . 1 8 1 ( S a s k . C . A . ) a n d W a s k a g a n i s h B a n d v . B l a c k n e d , [ 1 9 8 6 ] 3 C . N . L . R . 1 6 8 ( Q u e . P r o v . C t . ) 113 A n A c t t o a m e n d t h e I n d i a n A c t ( d e s i g n a t e d l a n d s ) , B i l l C - 1 1 5 , S.C. 1 9 8 6 - 8 7 - 8 8 . 114 T w i n n e t a l . v . C a n a d a ( M . I . A . N . D . ) , (1987) 6 F.T.R. 4 1 . 178 there was no requirement of fairness i n the exercise of the power of disallowance and that the purpose of empowering the Minister to disallow by-laws i s i n part to allow him/her to take into account larger i n t e r e s t s going beyond those of the band itself.(115) Regarding gambling by-laws, these larger i n t e r e s t s would be those of the provinces and of maintaining f e d e r a l - p r o v i n c i a l harmony. The judge did recognize, however, that i t was at l e a s t arguable that the power of disallowance has some implied l i m i t a t i o n i n that "it may not be used to f r u s t r a t e completely the purposes of the Indian Act".(116) I t could be argued that the blanket disallowance of gambling by-laws i s f r u s t r a t i n g federal p o l i c y to secure the economic independence of Indians. I f band councils cannot get t h e i r by-laws before the courts for a j u d i c i a l assessment of t h e i r v i r e s then perhaps a challenge to the power of the Minister under s . 8 2 might be pursued. The foregoing discussion i l l u s t r a t e s that s e c t i o n 2 0 7 o f the C r i m i n a l C o d e and s e c t i o n 8 8 of the I n d i a n A c t have combined to constitute a s i g n i f i c a n t area of p r o v i n c i a l control over a c t i v i t i e s on reserves. The arguments put forward, however, indicate that the p r o v i n c i a l seal around the authorization and regulation of l o t t e r y schemes i s not 115 I b i d at 45. 116 I b i d at 44 per Strayer J . 179 watertight. But these arguments can be c r i t i c i z e d on the basis that they define Indian power to control gambling by reference to federal and p r o v i n c i a l j u r i s d i c t i o n . They proceed on the basis that those powers, rather than those of Indians, are the c r u c i a l determinants. As was stated e a r l i e r , even i f p r o v i n c i a l j u r i s d i c t i o n were to be rejected and replaced by federal regulation of gambling, t h i s would be unacceptable to those who favour Indian c o n t r o l . The f i n a l section of t h i s chapter w i l l be directed to an examination of these assertions of Indian j u r i s d i c t i o n . 180 Indian J u r i s d i c t i o n The authorization, operation and regulation of gaming on reserves i s one aspect of a much larger issue requiring resolution by the Canadian p o l i t y : the a l l o c a t i o n or d i v i s i o n of power between federal, p r o v i n c i a l governments and Canada's indigenous peoples. During the past few decades , the claims of the l a t t e r to c e r t a i n inalienable r i g h t s , p a r t i c u l a r l y to land, but also to a s i g n i f i c a n t measure of self-government, have been asserted i n the strongest terms. They stem from the fundamental proposition that native peoples are sovereign nations rather than dependents of the state. While that sovereignty may have been ignored or denied i n the past, i t was not extinguished. As Flanagan observes, "[a] sovereign nation retains i t s r i g h t of self-determination even when i t i s under external domination. 1 1 (117) Acceptance of t h i s p o s i t i o n involves a r e d e f i n i t i o n of established views. Thus, for example, Venne o f f e r s the following re-evaluation of the powers and functions of band councils:(118) "Bands and band councils are often described as "creatures of statute", created as federal m u n i c i p a l i t i e s and exercising delegated powers. Indian Chiefs and Councils have rejected t h i s analysis and are 117 "From Indian T i t l e to Aboriginal Rights" i n Knafla (ed.), Law and Jus t i c e i n New Land: etc. (Toronto: Carswell, 1986) p. 99. 118 Venne, "Indian J u r i s d i c t i o n " i n INAC, Gaming on  Reserves. supra fn. 5 at 2. 181 asserting a contrary proposition: Indian governments have extensive powers of self-government, including taxation, which are not delegated from the federal government. The source of Indian government j u r i s d i c t i o n i s not the Indian Act, but rather a pre-e x i s t i n g or "aboriginal" r i g h t of s e l f government that has not been extinguished." There i s a growing body of l i t e r a t u r e which examines the h i s t o r i c a l roots and l e g a l status of these claims.(119) To some extent, t h e i r existence, at l e a s t on a symbolic l e v e l , i s now beyond dispute with the enactment of s . 3 5 of the C o n s t i t u t i o n A c t , 1 9 8 2 , which recognizes and affirms the " e x i s t i n g aboriginal and treaty r i g h t s of the aboriginal peoples of Canada".(120) The doctrine of aboriginal r i g h t s i s , as S l a t t e r y indicates, a basic p r i n c i p l e of Canadian common law that defines the c o n s t i t u t i o n a l l i n k s between the Crown and aboriginal peoples and regulates the i n t e r a c t i o n between the Canadian l e g a l system and native r i g h t s , laws and institutions.(121) The precise content of "aboriginal r i g h t s " as enshrined i n the Constitution i s , however, unclear. 119 e.g. Boldt and Long (eds.), s u p r a fn. 3; Flanagan, s u p r a f n . 117; Morse, s u p r a fn. 9 and Slattery, "Understanding Aboriginal Rights", (1987) 66 Canadian Bar Review 725. 120 Because of the broad d e f i n i t i o n given to "aboriginal peoples" i n s . 3 5 - i t includes the Indian, Inuit and Metis peoples - the p o t e n t i a l impact of t h i s provision extends beyond native Indians. 121 Slattery, s u p r a fn. 119 at 732. 182 Mason describes s.35 as, at a minimum, s e t t i n g a f l o o r f o r native rights.(122) In Lyon's view, there i s a range of p o s s i b i l i t i e s encompassed by t h i s provision which go beyond t i t l e to land and hunting and f i s h i n g r i g h t s to include the r i g h t to l i v e under t r a d i t i o n a l forms of government and to be governed by customary laws.(123) There i s increasing recognition being given to the p o s i t i o n that s.35 recognizes the existence of a r i g h t to self-government, often described as a " t h i r d order of government" with powers p a r a l l e l to those of the federal and p r o v i n c i a l governments.(124) The concepts of aboriginal r i g h t s and of native self-government have evolved r a p i d l y i n recent years and have become in e x t r i c a b l y connected. One observer has characterized the r e l a t i o n s h i p i n symbiotic terms: self-government i s advocated as an aboriginal r i g h t , and a v a r i e t y of aboriginal r i g h t s are advanced as aspects of native s e l f -government. (125) Certainly, to have some c o n s t i t u t i o n a l status and protection, the r i g h t to self-government must be anchored to some source i n the Constitution.(126) 122 Mason, supra fn. 3 at 438. 123 Lyon, supra fn. 110 at 419. 124 S l a t t e r y , "The Hidden Constitution: Aboriginal Rights i n Canada", i n Boldt and Long (eds.), supra fn. 3 at 137. 125 Tennant, "Aboriginal Rights and the Penner Report on Indian S e l f Government" i n Boldt and Long (eds.), supra fn. 3 at 321. 126 Nakaratsu, supra fn. 10 at 81. 183 The recognition of the r i g h t of self-government as an aboriginal r i g h t was advocated strongly by the Special Committee of the House of Commons which examined Indian self-government i n the early 1980s. I t recommended that s.91(24) of the Constitution Act, 1867 should be interpreted to allow Parliament to enact laws i n a l l f i e l d s (including those reserved to the provinces i n s.92) insofar as they r e l a t e to "Indians and Lands reserved f or the Indians". Parliament should then proceed to vacate these areas of j u r i s d i c t i o n to recognized Indian governments. Consequently, v i r t u a l l y the entire range of law-making, p o l i c y , program delivery, law enforcement and adjudication powers would be avai l a b l e to a native government within it's t e r r i t o r y . (127) In the Committee's view, native governments would derive t h e i r legitimacy not from Parliament, nor from the Constitution i t s e l f , but from the pre-existing r i g h t s of aboriginal peoples which the Constitution does not create, but merely recognizes.(128) The precise nature of the aboriginal r i g h t s that are recognized by s.35 i s the subject of considerable debate, mostly stemming from the inc l u s i o n of the phrase " e x i s t i n g aboriginal and treaty r i g h t s " within i t s terms. In addition, there has been no l e g i s l a t i v e action to implement the 127 Canada House of Commons, Report of the Special Committee  on Indian Self-Government (Penner Report) (Ottawa: Supply and Services, 1983) at 329. 128 Ibid at 328. 184 recommendations of the House of Commons Subcommittee, nor have the c o n s t i t u t i o n a l conferences attended by federal, p r o v i n c i a l and native leaders with the aim of f l e s h i n g out the precise scope of t h i s provision met with any success. There i s a measure of consensus among academic writers that an aboriginal or treaty r i g h t which has not been extinguished, but simply r e s t r i c t e d or l i m i t e d by l e g i s l a t i o n , i s an e x i s t i n g r i g h t within s . 3 5 . A representative statement of t h i s view i s provided by McNeil, who propounds t h i s t e s t for determining " e x i s t i n g " rights:(129) "A workable t e s t that might be applied to determine whether a p a r t i c u l a r r i g h t has been extinguished or merely rendered unexercisable would be to ask whether the r i g h t would be restored i f the l e g i s l a t i o n a f f e c t i n g i t was repealed. I f the answer i s no, then the r i g h t must have been extinguished; i f yes, i t must s t i l l e x i s t and therefore i s e n t i t l e d to c o n s t i t u t i o n a l protection under section 35(1)." The criminal law i s one area i n which Indian peoples are claiming t h e i r r i g h t to self-determination. Venne o f f e r s t h i s assessment:(130) "The Criminal Code i s a law of general a p p l i c a t i o n that does not specify as applying to Indians. I t no doubt was assumed that Indians, being considered B r i t i s h subjcets, were to be covered by the Code. How does the 129 McNeil, "The Constitutional Rights of the Aboriginal Peoples of Canada", (1982) 4 Supreme Court Law Reporter 255 at 258. See also Slattery, "The Constitutional Guarantee of Aboriginal and Treaty Rights", (1983) 8 Queen's Law Journal 232. 130 Venne, supra fn. 118 at 25. 185 Criminal Code re l a t e , i f at all, to the continuance of Indian customary "criminal" law? There has been no s p e c i f i c statute terminating the Indian law, thus i t continues to " e x i s t " . Indian criminal j u r i s d i c t i o n has been removed by federal and p r o v i n c i a l p o l i c y , but these p o l i c i e s cannot be defined as an extinguishment. 1 1 I f , to use McNeil's t e s t , the C r i m i n a l C o d e were to be repealed v i s - a - v i s i t s a p p l i c a b i l i t y to native peoples on t h e i r lands, the r i g h t to self-determination on t h i s issue could quite e a s i l y be revived. According to t h i s scenario, inherent aboriginal r i g h t s would, according to the Task Force on Gaming on Reserves, take precedence over the C r i m i n a l C o d e and the I n d i a n Act.(131) To focus s p e c i f i c a l l y on the l o t t e r y scheme provisions of the C o d e , i t can be argued quite strongly that they have, in e f f e c t , already been repealed by federal evacuation of the area, leaving the way c l e a r for a r e - a c t i v a t i o n of Indian j u r i s d i c t i o n over the f i e l d . As was i l l u s t r a t e d above, there i s ample evidence that gambling i s a t r a d i t i o n a l Indian a c t i v i t y , an e s s e n t i a l part of native culture, although not i n the form i t assumes today.(132) As one native leader notes, i t would be u n r e a l i s t i c to expect that an aboriginal r i g h t exercised i n the l a t e 1980s would s t i l l take i t s ancient form.(133) 131 S u p r a fn. 4 at 28. 132 See fn. 76 and surrounding text. 133 Ahenakew, "Aboriginal T i t l e and Aboriginal Rights: The Impossible Task of I d e n t i f i c a t i o n and D e f i n i t i o n " , i n Boldt and Long (eds.), s u p r a fn. 3 at 27. 186 This i s , i n fact, the basis on which several Indian bands are claiming the power to conduct gambling operations on reserves. In B r i t i s h Columbia, f o r example, the Gitksan and Kitimaat t r i b a l councils assert that gambling i s an e x i s t i n g aboriginal r i g h t within the meaning of s.35 of the Constitution Act, 1982.(134) In the face of p r o v i n c i a l opposition to these assertions and counter-claims of exclusive p r o v i n c i a l j u r i s d i c t i o n regarding l o t t e r i e s and games of chance, the c o n f l i c t w i l l have to be resolved sooner or l a t e r . As experience i n the United States has shown, i t i s important, from the native perspective, that i t be done i n a manner which does not create or enhance p r o v i n c i a l control over Indian a f f a i r s . One solution which might be pursued i s the amendment of the Criminal Code and of the Indian Act to indicate c l e a r l y that neither federal nor p r o v i n c i a l gaming enactments apply to l o t t e r y schemes conducted on reserves by band councils. I t i s u n l i k e l y that t h i s would be done u n i l a t e r a l l y by the federal government without extensive consultation with the provinces. I t i s equally u n l i k e l y that the provinces would concede to such changes without considerable concessions being made to them, by the federal government. 134 Starr, supra fn. 78 at 35. The Gitksan p o s i t i o n i s set out i n more d e t a i l i n an interview with t r i b a l president, Don Ryans reported i n Kahtpu, v o l . 6(11), 6/6/88. 187 A more s a t i s f a c t o r y , long-term solu t i o n would be an amendment to the Constitution to provide, within a r i g h t of aboriginal self-government, j u r i s d i c t i o n over gaming on Indian lands. The immediate prospects f o r t h i s kind of so l u t i o n are not favourable i n view of the f a i l u r e of the c o n s t i t u t i o n a l conferences mandated by s . 3 5 . 1 of the C o n s t i t u t i o n A c t , 1 9 8 1 to reach any agreement regarding the issue. The other a l t e r n a t i v e i s adjudication: asking the courts to determine j u r i s d i c t i o n over gaming on Indian lands i n l i g h t of s . 3 5 of the C o n s t i t u t i o n A c t , 1 9 8 1 . There i s not, as yet, a large body of case law on the impact of t h i s c o n s t i t u t i o n a l provision. A recent decision of the Ontario Court of Appeal, however, sounds a cautionary note. In R . v . A g a w a , ( 1 3 5 ) the Court was asked to decide whether the r i g h t to f i s h without a licence was an " e x i s t i n g treaty r i g h t " within the terms of s . 3 5 . In the appellant's case, the Court found that h i s treaty f i s h i n g r i g h t s had not been extinguished, but merely r e s t r i c t e d by a l i c e n s i n g requirement. I t went on to say that hunting and f i s h i n g r i g h t s could not be divorced from the r e a l i t i e s of l i f e i n present-day Canada, which required the conservation and management of f i s h stocks. Accordingly, Indian treaty r i g h t s were held to be subject to reasonable l i m i t a t i o n s , such as l i c e n s i n g requirements, despite the fa c t the s . l of the 135 [1988] 3 C.N.L.R.73 (Ont. C.A.). 188 C h a r t e r o f R i g h t s a n d F r e e d o m s does not apply to s . 3 5 of the Constitution A c t . The exercise of Indian treaty r i g h t s , i t was said, involved a balancing of the i n t e r e s t s and values  of the r i g h t s of others. The Court of Appeal did not specify the e n t i r e range of i n t e r e s t s that might be taken into account i n determining the scope of " e x i s t i n g aboriginal and treaty r i g h t s " . I t could, p o t e n t i a l l y include p r o v i n c i a l i n t e r e s t s . I f i t does, then t h i s t e s t bears more than a passing s i m i l a r i t y to that enunciated by the U.S. Supreme Court i n C a l i f o r n i a v . C a b a z o n B a n d o f M i s s i o n I n d i a n s , ( 1 3 6 ) - that t r i b a l j u r i s d i c t i o n can be l i m i t e d by state l e g i s l a t i o n i f state i n t e r e s t s are adjudged to be s u f f i c i e n t l y compelling. I t remains to be seen whether the Supreme Court of Canada w i l l endorse such an approach to aboriginal and treaty r i g h t s and allow p r o v i n c i a l i n t e r e s t s a c r i t i c a l r o l e . This chapter has established that native gaming i s an issue which twenty years ago, would have been a matter between band councils and the federal government, which has exclusive j u r i s d i c t i o n over both Indian a f f a i r s and criminal law and procedure. As a r e s u l t of a f e d e r a l - p r o v i n c i a l agreement of 1985, on which Indians were not consulted, the 136 S u p r a fn. 19. 189 rules regarding control over l o t t e r y schemes were changed and i t was transformed into a dispute between band councils and p r o v i n c i a l governments. There i s , as a r e s u l t , a struggle over the power to gamble on Indian lands. The outcome of t h i s struggle could have an important impact on the much larger issue of the struggle f o r Indian sovereignty. 190 C H A P T E R S I X P R O V I N C I A L G A M I N G C O N T R O L : T H E E X A M P L E O F B R I T I S H C O L U M B I A P r o v i n c i a l G a m i n g C o n t r o l The focus of the previous two chapters was on what might be termed the hidden implications of the l e g a l transformation of l o t t e r y schemes i n that they are not immediately obvious on the face of s e c t i o n 2 0 7 of the C r i m i n a l C o d e . ( 1 ) These c o n s t i t u t i o n a l issues are of c r u c i a l s i g n i f i c a n c e nonetheless. In t h i s f i n a l chapter attention i s directed an equally important and more immediately d i s c e r n i b l e consequence of the decriminalization of l o t t e r y schemes: the growth of p r o v i n c i a l gaming controls to regulate l e g a l i z e d l o t t e r i e s and q u a s i - l o t t e r i e s . Gambling i s s t i l l prohibited by the C r i m i n a l C o d e unless i t has been licensed by the appropriate p r o v i n c i a l authority, or i s being conducted by the province i t s e l f . I m p l i c i t i n t h i s federal scheme of p a r t i a l d ecriminalization are provincially-based regulatory structures to control public gaming. If a province i s to take advantage of the federal exemption from criminal sanctions, i t must inaugurate some system for regulating gambling a c t i v i t i e s . For the purposes of the following analysis, i t i s h e l p f u l , at t h i s juncture, to set out the express terms of s . 2 0 7 : 1 R.S.C. 1985, C.C-46 191 *'s.207(l) Notwithstanding any of the provisions of t h i s Part r e l a t i n g to gambling and betting, i t i s lawful (a) for the government of a province, e i t h e r alone or i n conjunction with the government of another province, to conduct and manage a l o t t e r y scheme i n that province, or i n that and such other province, i n accordance with any law enacted by the l e g i s l a t u r e of  that province; (b) for a charitable or r e l i g i o u s organization, pursuant to a licence issued by the Lieutenant Governor  i n Council of a province or by such other person or  authority i n the province as may be s p e c i f i e d by the  Lieutenant Governor i n Council thereof.to conduct and manage a l o t t e r y scheme i n that province i f the proceeds from the l o t t e r y scheme are used for a charitable or r e l i g i o u s object or purpose; (c) for the board of a f a i r or e x h i b i t i o n or an operator of a concession leased by that board, to conduct and manage a l o t t e r y scheme i n a province where the Lieutenant Governor i n Council of the province ...has (1) designated that f a i r or exh i b i t i o n as a f a i r or exh i b i t i o n where a l o t t e r y scheme may be conducted and managed, and ( i i ) i s s u e d a licence for the conduct and management of  a l o t t e r y scheme to that board or operator; (d) f o r any person, pursuant to a licenc e issued bv  the Lieutenant Governor i n Council... to conduct and manage a l o t t e r y scheme at a public place of amusement i n that province.... (2) Subject to t h i s Act a licence issued by or under the authority of the Lieutenant Governor i n Council .... may contain such terms and conditions r e l a t i n g to the  conduct, management and operation of of p a r t i c i p a t i o n  i n the l o t t e r y scheme to which the licence r e l a t e s as the Lieutenant Governor i n Council ... or any law enacted by the l e g i s l a t u r e of that province may prescribe." (Emphasis added) Under t h i s l e g i s l a t i v e system, four p a r t i e s are designated as q u a l i f i e d to "conduct and manage a l o t t e r y scheme": a p r o v i n c i a l government; charitable or r e l i g i o u s organizations; f a i r and exh i b i t i o n boards and concessionaires; and any person at a public place of 192 amusement. Two regulatory configurations were prescribed: i n accordance with any law, for a p r o v i n c i a l government and under the authority of a p r o v i n c i a l l y issued licence, which may contain terms and conditions r e l a t i n g to the management, conduct and operation of the l o t t e r y scheme, fo r the remaining three parties.(2) Although not a l l provinces have embraced i t to the same extent,(3) there has, o v e r a l l , been a massive expansion of l e g a l i z e d gambling. Accordingly, t h i s has necessitated the evolution of new regulatory structures within p r o v i n c i a l governments. In western Canada, for example, there currently e x i s t the Manitoba Lotteries Foundation, the Saskatchewan, Alberta and B r i t i s h Columbia Gaming Commissions and the B r i t i s h Columbia Lottery Corporation. In addition, there i s the Western Canada Lotteries Foundation, which co-ordinates the operation of true l o t t e r i e s i n Alberta, Saskatchewan, Manitoba and the Yukon and North West T e r r i t o r i e s , and the I n t e r p r o v i n c i a l Lottery Corporation, which i s the co-ordinating body for a l l p r o v i n c i a l true l o t t e r y schemes, the area i n which the greatest expansion i n l e g a l i z e d gambling has occurred. 2 When t h i s provision was f i r s t enacted i n 1969, the federal government was also designated as e l i g i b l e to "conduct and manage a l o t t e r y scheme i n accordance with regulations made  by the Governor i n Council ..." This was repealed i n 1985: S.C. 1985, c.52. 3 For a comparison of the extent of gambling across Canada, see Beare et a l . , Legalized Gaming i n Canada. 1988 (Ottawa: Ministry of the S o l i c i t o r General, 1988). 193 Government regulation of t h i s type comes under the r u b r i c of administrative law. One of the key Canadian t r e a t i s e s on the topic notes that administrative law evolved as a consequence of the rapid growth i n the scope and d i v e r s i t y of administrative action i n Canada and other countries i n the twentieth century, and the corresponding need to subject i t to l e g a l control.(4) At every l e v e l , the state has become increasingly involved i n regulating the l i v e s and a f f a i r s of i t s c i t i z e n s . P r o v i n c i a l regulation of a person's access and a b i l i t y to engage i n l e g a l gambling a c t i v i t i e s i s another facet of t h i s administrative expansion. In t h i s chapter, t h i s new f i e l d of administrative action r e s u l t i n g from the amendment to the Criminal Code w i l l be s c r u t i n i z e d , using the precepts of administrative law. The l a t t e r i s , as Thomas points out, a comparatively new and open-ended arena of practice and study:(5) "Defined broadly, i t involves the o f f i c i a l means that society adopts to control how administrative agencies make decisions that a f f e c t i n d i v i d u a l s , groups and organizations. More s p e c i f i c a l l y , i t r e f e r s to that portion of statute law which prescribes the structure and functions of departments and agencies, grants them authority to make rules and decisions, provides f o r the supervision and use of discretionary authority, and sets f o r t h remedies i n the event of i l l e g a l behaviour or procedural i r r e g u l a r i t i e s on the part of 4 Dussault and Borgeat, Administrative Law: A Treatise (2nd ed.) Vol. I (Toronto: Carswell, 1985) p.11. 5 Thomas, "Administrative Law Reform: Legal vs. p o l i t i c a l controls on administrative d i s c r e t i o n " , (1984) 27 Canadian  Public Administration 120. 194 administrative e n t i t i e s . I t i s almost t r i t e to observe that ensuring the accuracy, i n t e g r i t y , fairness, effectiveness and accountability of administrative decision-making represents an enormous challenge when the scope and complexity of government has expanded so greatly." Considerations of time and space preclude an examination of gaming controls i n each province and t e r r i t o r y . Instead, attention w i l l be concentrated on the s i t u a t i o n i n B r i t i s h Columbia, which, i n terms of the l e v e l of l e g a l i z e d gambling i t permits and how i t i s controlled, i s not a t y p i c a l among the western provinces. Taking the quotation set out above as a reasonable d e f i n i t i o n of the functions of administrative law, the following discussion w i l l u t i l i z e i t s indices of statutory authority, structure, function, d i s c r e t i o n and remedies to examine how B r i t i s h Columbia has chosen to regulate gaming over the past two decades, and the l e g a l implications of the choices that have been made. Models of Decriminalization Before proceeding with the stated task of analyzing the regulation of gaming i n B r i t i s h Columbia, there i s an a p r i o r i issue to be addressed, i . e . the structure of decriminalization which was adopted i n 1969, i . e . - the sub s t i t u t i o n of p r o v i n c i a l regulation or control i n place of federal p r o h i b i t i o n . This w i l l provide a useful context 195 against which to assess subsequent developments i n p r o v i n c i a l p o l i c y . As was discussed b r i e f l y i n Chapter Two, when the federal government acted to decriminalize l o t t e r y schemes, i t d i d not opt for the "do nothing" a l t e r n a t i v e to the use of the criminal law or what Skolnick and Dombrink have categorized as the " n u l l i f i c a t i o n model" of decriminalization of vice.(6) Rather, i t chose to adopt what they term a " l i c e n s i n g " or regulatory model of decriminalization(7) because gambling i s allowed under state permit or state operation. Consequently, l e g a l controls on gambling have c e r t a i n l y not disappeared with the onset of decriminalization. As Skolnick and Dombrink observe,(8) "the l e g i s l a t i v e p r o h i b i t i o n may be l i f t e d , but the government does not retreat. I f anything, regulation may o f f e r a purer case of "control" than p r o h i b i t i o n . " Although the concept of decriminalization i s apparently permissive, i t i s , when implemented, frequently of a highly i n t e r v e n t i o n i s t and coercive character. One area where t h i s has been p a r t i c u l a r l y evident i s i n li q u o r control p o l i c y i n both Canada and the United States. A f t e r the p o s t - F i r s t World War experiments with alcohol p r o h i b i t i o n met with resounding f a i l u r e , they were replaced i n both countries by 6 Skolnick and Dombrink, "The Legalization of Deviance", (1978) 16 Criminology 193 at 200. 7 Ibid at 204. 8 Ibid at 196. 196 s t r i c t alcohol control, which, i n the words of one observer, "aimed to s u b s t a n t i a l l y strengthen and enhance government power and involvement ... to construct and administer a system of regulation f a r more pervasive, i n t r u s i v e and e f f e c t i v e than anything before established".(9) Thus, government regulation replaced not only state p r o h i b i t i o n , but also the unrestrained marketplace. When a regulatory model of decriminalization i s used, state control expands rather than contracts. The c o r o l l a r y of t h i s , noted by Kane, i s that, when government regulates s o c i a l or economic a c t i v i t i e s , such as the consumption of alcohol, the purchase of l o t t e r y t i c k e t s or the playing of bingo, i t necessarily r e s t r i c t s the freedom of individuals.(10) Part of the r a t i o n a l e i s paternalistic.(11) Those who drink or gamble to excess r i s k i n j u r i n g themselves and/or others i n some way. While government regulation implies a tolerance of conduct that causes, or has the p o t e n t i a l for harm, as Hawkins and Thomas 9 Levine, "The b i r t h of American alcohol c o n t r o l : prohibition,the power e l i t e , and the problem of lawlessness", (1985) Contemporary Drug Problems 63 at 97. 10 Kane, Consumers and Regulators: Intervention i n the  Federal Regulatory Process (Montreal: I.R.P.P.,1980) p.8. 11 Breyer o f f e r s the following explanation of paternalism as a j u s t i f i c a t i o n for government regulation: "Although i n some cases the f u l l and adequate information needed to reach a r a t i o n a l decision may be available to the decision-maker i n the marketplace, some may argue that he w i l l nevertheless make the wrong decision and therefore government regulation i s needed." Breyer, "Analyzing Regulatory F a i l u r e etc.", (1979) 92 Harvard Law Review 549 at 558-59. 197 argue,(12) i t i s a l i m i t e d tolerance and i t also implies that the government knows best. I t may also f a c i l i t a t e other government objectives which may not be mutually compatible. For example, l i q u o r control i s a p r o f i t a b l e source of government revenue.(13) State-operated l o t t e r i e s also have revenue-generating p o t e n t i a l . The paternalism inherent i n c o n t r o l l e d consumption of alcohol or l o t t e r i e s must be reconciled with the government's need for revenue. Regulation, unlike criminal p r o h i b i t i o n which i s e s s e n t i a l l y one-dimensional, frequently must accommodate a number of competing goals. Thus, the decriminalization of gambling effected i n 1969 ent a i l e d a s h i f t "from the r e l a t i v e conceptual s i m p l i c i t y of criminal p r o h i b i t i o n to the subtlety and complexity of administrative regulation."(14) I t was, perhaps, a development with which few provinces were immediately ready or equipped to handle. 12 Hawkins and Thomas, "The Enforcement Process i n Regulatory Bureaucracies" i n Hawkins and Thomas (eds.) Enforcing Regulation (Boston: Kluwer-Nijhoff, 1984) pp.3-22 at 4. 13 Acheson, "Revenue vs. Protection: the p r i c i n g of wine by the L.C.B.O.", (1977) 10 Canadian Journal of Economics 246. Acheson also points out that l i q u o r control also represents an opportunity to protect domestic producers of a l c o h o l i c drinks. 14 Skolnick and Dombrink, supra fn.6 at 194. 198 As was demonstrated i n Chapter Two, the pressure to decriminalize l o t t e r y schemes came p r i n c i p a l l y from Quebec, which, p r i o r to 1969, was the only province a c t i v e l y pursuing the p o s s i b i l i t y of extensive l e g a l i z e d l o t t e r i e s . The province immediately took advantage of the amendment to the C r i m i n a l C o d e and created two new Crown corporations: the Regie des l o t e r i e s et courses du Quebec and the Societe d'exploitation des l o t e r i e s et courses du Quebec.(15) I t was arguably the only province even minimally prepared f o r t h i s new power. Nonetheless, the other provinces were not slow to u t i l i z e i t and l o t t e r y schemes p r o l i f e r a t e d across Canada during the early 1970s, but administrative structures analogous to the Regie and the Societe d i d not generally appear u n t i l the following decade.(16) While the absence of such bodies d i d not necessarily mean that the regulation of gaming was lacking i n the other provinces, i t was, as w i l l be seen i n the context of B r i t i s h Columbia, of a much more a d h o c , unstructured and informal nature. 15 L o i s u r l e s l o t e r i e s e t c o u r s e s , S.Q. 1969, c. 28. The Regie's main function was to supervise horse racing and the issuing of licences for charitable gaming. The Societe was set up to conduct p r o v i n c i a l l o t t e r i e s . 16 The Manitoba Lotteries and Gaming Control Commission was established i n 1980 ( T h e L o t t e r i e s a n d G a m i n g C o n t r o l A c t S.M. 1980, c.61); the Alberta Gaming Commission was established i n 1981 (Alberta Order-in-Council 124/81) and the B r i t i s h Columbia Gaming Commission was established i n 1987 (B.C. Order-in-Council 612/87). 199 A R e g u l a t o r y H i s t o r y ftf ««mjng C o n t r o l i n B r i t i s h C o l u m b i a In t h i s section a b r i e f factual account of gaming control i n the province w i l l be offered i n order to demonstrate i t s chronological evolution and major trends, and to indicate the l e g a l issues which w i l l subsequently be analyzed. 1970-74; The Quiet Period The B.C. government waited almost a year before exercising i t s authority under what was then S . 1 7 9 A of the C r i m i n a l C o d e to l e g a l i z e public gaming i n the province. In A p r i l , 1970, regulations were enacted "pursuant to section 179A of the Criminal Code".(17) At t h i s point, the province was only interested i n l i c e n s i n g charitable or r e l i g i o u s groups who wanted to conduct l o t t e r y schemes, and gambling at a g r i c u l t u r a l f a i r s or exhibitions. Accordingly, the Attorney General was designated as the l i c e n s i n g authority and was vested with a discretionary power to issue licences. A small Licensing Branch was created within the ministry f o r t h i s task. The regulations themselves set up a rudimentary l i c e n s i n g system, which was refined on matters of d e t a i l i n 1971 and 1973.(18) 1974: P r o v i n c i a l Lotteries and L e g i s l a t i o n 17 B.C.Reg. 108/70. 18 B.C.Reg. 4/71; B.C.Reg. 17/73. 200 In May 1974, B.C. joined with i t s western neighbours, Alberta, Saskatchewan and Manitoba, to form the Western Canada Lottery Foundation to conduct and manage true l o t t e r i e s i n those provinces. The Foundation was set up as a corporate structure with two dir e c t o r s from each province responsible for corporate policy.(19) Each province was responsible f o r the marketing of p r o v i n c i a l l o t t e r i e s within i t s borders, and i n B.C., t h i s r e s p o n s i b i l i t y f e l l to the Lottery Branch created by the newly enacted Lottery Act.(20) The creation of the Lottery Branch was not mandatory under the terms of the Act. "The minister", who was unspecified, was given the d i s c r e t i o n to "e s t a b l i s h within h i s ministry a branch of the public service for administering t h i s Act and the regulations".(21) The Branch was duly created to carry out dual functions. I t s primary r e s p o n s i b i l i t y was the conduct and management of p r o v i n c i a l l o t t e r i e s : e s s e n t i a l l y d i s t r i b u t i o n and inventory c o n t r o l . 19 I t i s currently known as the Western Canada Lottery Corporation,and the Yukon and Northwest T e r r i t o r i e s have associate membership. The Ontario Lottery Corporation, Loto-Quebec and the A t l a n t i c Lottery Corporation perform s i m i l a r functions i n t h e i r respective regions. The I n t e r p r o v i n c i a l Lottery Corporation controls nation-wide true l o t t e r i e s . 20 S.B.C. 1974, C.51; R.S.B.C. 1979, C.249. 21 Ibid, s.4. Regarding regulations, the Act s p e c i f i e s that the Lieutenant Governor i n Council may make regulations "respecting the conduct and operation of l o t t e r i e s by the Province" and "prescribing terms, conditions and fees respecting licences required under the regulations" (s.9). 201 Of l e s s importance was i t s r e s p o n s i b i l i t y f o r the regulation and l i c e n s i n g of other l o t t e r y schemes within the province. The L o t t e r y A c t also provided f o r the creation of administrative body, the Lott e r i e s Advisory Committee charged with advising and a s s i s t i n g the minister respecting the administration of the Act, regulations, "or any matter respecting the conduct of l o t t e r i e s " ( s . 3 ) . This Committee has yet to be created. F i n a l l y , the A c t created a Lottery Fund, a separate f i n a n c i a l e n t i t y within the Pr o v i n c i a l Treasury, into which a l l proceeds from the conduct and operations of l o t t e r i e s were to be paid ( s . 6 ) . I n i t i a l l y , disbursements from the Fund were r e s t r i c t e d to " c u l t u r a l or recreational purposes or f o r preserving the c u l t u r a l heritage of the Province", but s.7(b) of the L o t t e r y A c t was subsequently amended to allow money to be paid out "fo r any other purpose consistent with the objects of the Western Canada Lottery Foundation".(22) (Subsequently, B r i t i s h Columbia withdrew from the Foundation i n 1985, and the provision now permits disbursements " f o r any other purpose the minister considers to be i n the public interest").(23) 22 S.B.C. 1977, C.76, S.21. 23 S.B.C. 1985, c.50, s.12, e f f e c t i v e 7/7/87 (B.C.Reg. 194/87). Thus, for example, i t was announced i n the f a l l of 1988 that the province would use $162 m i l l i o n i n l o t t e r y funds to create a regional and municipal renewal scheme: "Regions H i t Jackpot" P r o v i n c i a l Report ( F a l l , 1988). 202 The f i n a l development of 1974 was the t r a n s f e r of the r e s p o n s i b i l i t y f o r p r o v i n c i a l l o t t e r i e s and l i c e n s i n g from the Attorney General to the Minister of the P r o v i n c i a l Secretary and Government Services.(24) The reason for t h i s r e a l l o c a t i o n of m i n i s t e r i a l r e s p o n s i b i l i t y i s unclear, although i t may have been designed to remove true l o t t e r i e s from the perceived connotations associated with the Ministry of the Attorney General and i t s law enforcement functions. Certainly, true l o t t e r i e s have remained under the aegis of the more neutral and bureaucratic P r o v i n c i a l Secretariat, whereas the regulation of other l o t t e r y schemes was transferred back to the Attorney General i n 1986. 1975-85: Growth i n Gaming During t h i s period there were r e l a t i v e l y few changes i n the regulatory structure of gaming control, while at the same time there was an exponential growth i n gambling a c t i v i t i e s within the province. For example,in 1978, the province extended the range of permitted gambling by allowing charity-run casinos, o f f e r i n g blackjack and roulette to be set up.(25) The expansion of these casinos and of commercial bingo h a l l s providing services to charitable groups gained momentum during the f i r s t h a l f of the 1980s. 24 B.C.Reg.436/74. 25 B.C.Reg.265/78. 203 I r o n i c a l l y , the gaming control machinery was downsized during t h i s period. This was due i n part to the divorcing of the management of true l o t t e r i e s from the Lottery Branch i n 1982. I t became the sole r e s p o n s i b i l i t y of the Western Canada Lottery Foundation, with i t s p r o v i n c i a l headquarters i n Richmond. The reduced Lottery Branch, which was also adversely affected by the government's p o l i c y of r e s t r a i n t , implemented i n 1983, was l e f t with the r e s p o n s i b i l i t y for l i c e n s i n g gaming for charitable purposes and at a g r i c u l t u r a l f a i r s . 1985-86:The Fork i n the Road As was previously mentioned, i n A p r i l 1985, B r i t i s h Columbia withdrew from the Western Canada Lottery Foundation, and the B.C. Lottery Corporation was formed under the Lottery Corporation Act.(26) I t s mandate i s "to develop, undertake, organize, conduct and manage l o t t e r y schemes on behalf of the government", to co-ordinate l o t t e r y a c t i v i t i e s with the other provinces, to provide l o t t e r y supplies and "to do such other things as the minister may require from time to time" (s.4) . By the year's end, the B.C. Lottery Corporation and i t s counterparts i n other provinces were to have the exclusive power to conduct l o t t e r i e s i n Canada by v i r t u e of an amendment to the 26 S.B.C. 1985, C.50. 204 C r i m i n a l C o d e . ( 2 7 ) S t a b i l i t y was achieved i n r e l a t i o n to true l o t t e r i e s . Regarding state-licenced gaming, however, t h i s was to be a more turbulent period. There was growing public concern, expressed through the media,(28) about the rapid expansion of gambling a c t i v i t i e s i n the province. The government's response was to repeal the e x i s t i n g regulations enacted pursuant to the L o t t e r y A c t and what was then s . 1 9 0 of the C r i m i n a l C o d e ( 2 9 ) and to replace them with "Policy Directives Respecting Licensing of Lottery Events i n B r i t i s h Columbia".(30) These instruments were issued by the Minister of the P r o v i n c i a l Secretary who reserved the r i g h t "to modify or replace the Policy Directives at any time, and they supersede a l l other p o l i c y guidelines and regulations". To a l l intents and purposes, however, the P o l i c y Directives were a s l i g h t l y modified, more extensive version of the former regulations. The Public Gaming Control Branch (formerly the Lottery Branch) was charged with administering p r o v i n c i a l l i c e n s i n g 27 T h e C r i m i n a l C o d e ( L o t t e r i e s ) A m e n d m e n t A c t , S.C. 1985, c. 52. 28 e.g. Bolan, "Small Groups Lose Out to Lure of Big Bingo", Vancouver Sun 3/8/85; Mclntyre "Cops Probe Casino Operations", The Province 15/12/85 and Sagi, "Casino Gambling a Big Ante Business", Vancouver Sun 30/12/85. 29 B.C.Reg. 123/86. 30 Order i n Council 1093/86. 205 of gaming fo r charitable purposes and at a g r i c u l t u r a l f a i r s . Late i n the year, m i n i s t e r i a l r e s p o n s i b i l i t y for such l i c e n s i n g was transferred back to the Ministry of the Attorney General. 1987-89; Consideration and Consolidation In A p r i l 1987, the Attorney General appointed a Gaming Commission to develop p o l i c y for gaming within the province.(31) Its f i r s t task i n t h i s regard was to provide a comprehensive report on gaming a c t i v i t i e s i n the region. In addition to t h i s policy-making function, the Gaming Commission also assumed the power to issue licences under what was then s.190 of the Criminal Code and to prescribe "terms and conditions" for those licences.(32) The Attorney General issued "terms and conditions" which replaced the "p o l i c y d i r e c t i v e s " i n the interim. Alberta o f f e r s an i n t e r e s t i n g comparison at t h i s juncture. There, i n 1979, the government struck a C i t i z e n s ' Advisory Committee on Gaming to report to a caucus task force. A key recommendation i n the Committee's f i n a l report was the establishment of a separate regulatory agency. The Alberta Gaming Commission was established by Order i n 31 Order i n Council 612/87. 32 Order i n Council 579/87. 206 Council i n 1981.(33) In B.C. t h i s p o l i c y development process was compressed and reversed with the appointment of the Commission at the outset and the consolidation of p o l i c y advice and l i c e n s i n g functions. With the creation of the Commission, a body of the type described by Rankin as a "quasi-independent regulatory agency",(34) the government moved the l i c e n s i n g function out of the regular departmental bureaucracy. The Committee's report was issued i n January, 1988,(35) and although not a l l of i t s recommendations have been implemented, i t was generally well received on a l l sides. I t remains the p r o v i n c i a l l i c e n s i n g body and has since issued revised terms and conditions for l i c e n s i n g . The Public Gaming Branch performs support and enforcement functions. F i n a l l y , i n June 1988, the Commission and the Gaming Branch were transferred to the newly created Ministry of the S o l i c i t o r General following government reorganization. 33 Alberta Order i n Council 124/81. See Campbell and Ponting, "The Evolution of Casino Gambling i n Alberta", (1984) 10 Canadian Public Policy 142. 34 Rankin, "The Cabinet and the Agencies: Toward Accountability i n B r i t i s h Columbia", (1985) 19 U.B.C.Law  Review 25 at 33. 35 B.C. Gaming Commission, Report to the Attorney General bv  the Gaming Commission on the Status of Gaming i n B r i t i s h  Columbia ( V i c t o r i a , 1988). 207 At present, gaming control i n B r i t i s h Columbia has two d i s t i n c t aspects: the regulation of true l o t t e r i e s through a p r o v i n c i a l Crown corporation and the l i c e n s i n g of other permitted l o t t e r y schemes by an administrative agency. The Lottery Corporation and the Gaming Commission are c l e a r l y key structures. They do not, however, re s t on s i m i l a r l e g a l foundations. The Corporation has an e x p l i c i t statutory base, a l e g i s l a t i v e mandate and an e x p l i c i t f i s c a l and p o l i t i c a l accountability. The Commission, by comparison, has only vague and tenuous statutory connections. I t i s not a statutory creation. The structure and functions of the Commission are l e g a l l y amorphous. For example, i t f e l l h e i r to l i c e n s i n g t o o l s c a l l e d terms and conditions, which were formerly p o l i c y d i r e c t i v e s , which were formerly regulations. Their l e g a l status i s , at best, ambiguous. I t i s to an examination of statutory authority, the l i c e n s i n g function, l e g a l remedies and the respective roles of the Lottery Corporation and the Gaming Commission that t h i s chapter now turns. Statutory Authority to Regulate Gaming B r i t i s h Columbia's authority to regulate gaming a c t i v i t i e s i n the province i s not an o r i g i n a l or inherent power. I t stems d i r e c t l y from the federal government's exclusive j u r i s d i c t i o n over criminal law and procedure found 208 i n s . 9 1 ( 2 7 ) of the C o n s t i t u t i o n A c t , 1 8 6 7 . The discussion i n Chapter Four makes c l e a r that, were i t not f o r the exemptions l a i d out i n the C r i m i n a l C o d e , p r o v i n c i a l l e g i s l a t u r e s would have no j u r i s d i c t i o n to permit the operation of l o t t e r y schemes therein prohibited. Parliament has e f f e c t i v e l y delegated i t s power over l o t t e r y schemes ei t h e r to the p r o v i n c i a l legislature,(36) (should the province wish to conduct and manage them i t s e l f ) , or to the Lieutenant Governor i n Council.(37) In s . 2 0 7 of the C r i m i n a l C o d e , Parliament has outlined general exemptions to the p r o h i b i t i o n of l o t t e r y schemes, leaving t h e i r authorization, l i c e n s i n g and control to the provinces. The arguments regarding the c o n s t i t u t i o n a l v a l i d i t y of t h i s arrangement have already been extensively examined, and those observations w i l l not be repeated here. Nonetheless, it should be noted that those arguments have considerable s i g n i f i c a n c e i n the present context. Even i f the c o n s t i t u t i o n a l v a l i d i t y of t h i s arrangement were to be confirmed, there s t i l l remain a number of concerns regarding the statutory authority i n B r i t i s h Columbia to ground the regulatory structure authorizing and c o n t r o l l i n g l o t t e r y schemes. 36 C r i m i n a l C o d e , s.207(1)(a). 37 I b i d , s. 207(1)(b)-(f). 209 Canada adheres to the p r i n c i p l e of parliamentary democracy or responsible government. I t i s axiomatic to such a system that regulatory a c t i v i t i e s must be founded on the authority of the l e g i s l a t u r e . As one commentator notes, i t i s important to be aware that such interventions cannot be based upon some inherent power of the central authority, but must be based upon an e x p l i c i t l e g a l provision.(38) I t i s es s e n t i a l , under a parliamentary system of responsible government, to assure the accountability of regulators to ministers and to the l e g i s l a t u r e , whether the regulators function i n a crown corporation, a board or commission, or within a government department.(39) The touchstone i s what i s c a l l e d the parent l e g i s l a t i o n which provides the framework for the delegated authority. There must be statutory mandate. Rankin notes that when regulatory structures are set up, statutory goals should be spelled out i n l e g i s l a t i o n , otherwise the l e g i s l a t u r e i n e f f e c t i s issuing "a blank cheque to make policies".(40) The parent Act i s the "l e g a l l i n c h p i n " which should provide a "coherent 38 Kane, supra fn. 10 at p.8. 39 Economic Council of Canada, Interim Report (Ottawa: Supply Responsible Regulation: An and Services, 1979) p.31. 40 Rankin, supra fn. 34 at p. 35. 210 framework"(41) i n which to accommodate what W i l l i s r e f e r s to as " c o n f l i c t i n g desires":(42) "The administrator wants enough room i n h i s statutory powers to be able to do what i s sensible i n carrying out p o l i c y ; on the other hand he also wants, fo r h i s own protection, some guidance from that organ of r e s p e c t a b i l i t y , h i s l e g i s l a t u r e , on what he i s supposed to do with them. The c i t i z e n wants the administrator to be able to do what i s sensible when that would be to h i s , the c i t i z e n ' s advantage but he more often wants to be able to plan h i s l i f e without having to second guess what some [administrator] w i l l do." The p r o v i n c i a l power to regulate public gaming comes from s.207 of the Code, but that provision does not resemble the kind of parent l e g i s l a t i o n normally encountered i n a delegation of l e g i s l a t i v e power. I t expressly and impliedly envisages the existence of p r o v i n c i a l law - what might be c a l l e d "step-parent" l e g i s l a t i o n - to provide the immediate statutory authority for the regulatory a c t i v i t i e s such as a government monopoly or l i c e n s i n g . For the s i t u a t i o n to be otherwise, i t would r e s u l t i n p r o v i n c i a l gaming control bodies being p o l i t i c a l l y accountable to Parliament, through the Minister of J u s t i c e , i f at a l l . I n i t i a l l y , however, B r i t i s h Columbia, i n enacting l o t t e r y regulations, r e l i e d s o l e l y on the very general statutory authority found i n what was then S.179A of the 41 Law Reform Commission of Canada, Report #26: Independent  Administrative Agencies (Ottawa: L.R.C.C..1985) p. 16. 42 W i l l i s , The McRuer Report: Lawyers' Values and C i v i l Servants' Values", (1986) 18 University of Toronto Law  Journal 351 at 357. 211 Criminal Code: the power of the Lieutenant Governor or a designate to issue licences which may contain terms and conditions to permit gambling for c e r t a i n purposes. These regulations imposed l i c e n s i n g fees. The s i g n i f i c a n c e of t h i s i s noted by Jones and de V i l l a r s commenting on the c r i t e r i a employed by the Parliamentary Standing Committee which s c r u t i n i z e s federal subordinate l e g i s l a t i o n . That Committee objects i f a regulation contains provisions requiring payment to be made to the Crown or to any other authority i n consideration of any licence or service to be rendered, "or prescribes the amount of any such charge or payment without express authority to that e f f e c t having been provided i n the enabling statute".(43) The B.C. regulations were lacking i n t h i s regard. In 1974, the province acted to put the regulation of public gaming on a more secure statutory footing, with the enactment of the Lottery Act. I t provided a l e g i s l a t i v e base for the Lottery Branch, the Lottery Fund and the Advisory Committee and delegated to the Lieutenant Governor the power to make l o t t e r y regulations. The p o l i c y objectives of these creations were l e f t undefined. In t h i s regard, Rankin states,(44) "To the extent that the l e g i s l a t i v e goals have been only s k e l e t a l l y defined i n statutes, i t becomes 43 Jones and de V i l l a r s , P r i n c i p l e s of Administrative Law (Toronto: Carswell, 1985) p. 81. 44 Rankin, supra fn.34 at p. 36. 2 1 2 d i f f i c u l t t o c r i t i c i z e t h e d e c i s i o n s o f r e g u l a t o r y a g e n c i e s f o r n o t m e e t i n g g o a l s d e l e g a t e d b y t h e l e g i s l a t u r e . T h e i n e v i t a b l e c o n s e q u e n c e o f t h e f a i l u r e t o p r o v i d e d e f i n i t e s t a t e m e n t s o f s t a t u t o r y p o l i c y i s t h a t " b r o a d d i s c r e t i o n m a k e s a p o l i t i c i a n o u t o f t h e r e g u l a t o r " . " T h e L o t t e r y A c t ' s i n a d e q u a c i e s n o t w i t h s t a n d i n g , i t d i d a t l e a s t a n c h o r t h e r e g u l a t i o n o f p u b l i c g a m i n g i n p r o v i n c i a l l e g i s l a t i o n . F o r o v e r a d e c a d e , i t w a s t o b e t h e s t a t u t o r y b a s i s o f g a m i n g c o n t r o l i n B . C . T h e n , i n 1 9 8 5 , t h e r e g u l a t i o n o f t r u e l o t t e r i e s w a s p l a c e d o n a d i f f e r e n t a n d m o r e s e c u r e f o o t i n g . T h e B . C . L o t t e r y C o r p o r a t i o n w a s c r e a t e d u n d e r t h e L o t t e r y C o r p o r a t i o n A c t w i t h a d e t a i l e d l e g a l s t r u c t u r e a n d a n e x p l i c i t s t a t u t o r y m a n d a t e : " s . 4 T h e o b j e c t s o f t h e c o r p o r a t i o n a r e ( a ) t o d e v e l o p , u n d e r t a k e , o r g a n i z e , c o n d u c t a n d m a n a g e l o t t e r y s c h e m e s o n b e h a l f o f t h e g o v e r n m e n t . ( b ) w h e r e a u t h o r i z e d b y t h e m i n i s t e r , t o e n t e r i n t o a g r e e m e n t s t o d e v e l o p , u n d e r t a k e , o r g a n i z e , c o n d u c t a n d m a n a g e l o t t e r y s c h e m e s o n b e h a l f o f o r i n c o n j u n c t i o n w i t h t h e g o v e r n m e n t o f C a n a d a o r t h e g o v e r n m e n t o f a n o t h e r p r o v i n c e , o r a n a g e n t o f e i t h e r o f t h e m , ( c ) w h e r e a u t h o r i z e d b y t h e m i n i s t e r , t o e n t e r i n t o t h e b u s i n e s s o f s u p p l y i n g a n y p e r s o n w i t h c o m p u t e r s o f t w e a r , t i c k e t s o r a n y o t h e r t e c h n o l o g y , e q u i p m e n t o r s u p p l i e s r e l a t e d t o t h e c o n d u c t o f l o t t e r i e s i n o r o u t o f t h e P r o v i n c e , o r a n y o t h e r b u s i n e s s r e l a t e d t o t h e c o n d u c t o f l o t t e r i e s , a n d ( d ) t o d o s u c h o t h e r t h i n g s a s t h e m i n i s t e r m a y r e q u i r e f r o m t i m e t o t i m e . " T h e C o r p o r a t i o n i s r e q u i r e d t o s u b m i t a n a n n u a l r e p o r t t o t h e m i n i s t e r w h o m u s t p r e s e n t i t t o t h e L e g i s l a t u r e a s s o o n a s p r a c t i c a b l e ( s . 7 ( 4 ) ) . A l s o , t h e d i r e c t o r s o f t h e 213 Corporation, i n s.10 of the A c t , are given the power to make regulations. The use of Crown corporations as instruments of public p o l i c y i s common at both l e v e l s of government i n Canada and has been the instrument of choice f o r the conduct and management of true l o t t e r i e s . There i s an extensive l i t e r a t u r e on Crown corporations which w i l l not be reviewed systematically here.(45) Su f f i c e i t to say that, generally speaking, they are an alt e r n a t i v e to ei t h e r public regulation of private sector a c t i v i t y or d i r e c t departmental conduct of an activity.(46) The former option was not permissible under the C r i m i n a l Code, which reduced the choice a v a i l a b l e . Langford observes that a Crown corporation i s more l i k e l y to be used i n situations where i t i s f e l t that the managerial techniques and structures commonly i d e n t i f i e d with the corporate form w i l l be more l i k e l y to r e s u l t i n the e f f e c t i v e and e f f i c i e n t performance of a s p e c i f i c task than w i l l the use of a t r a d i t i o n a l , h i e r a r c h i c a l departmental bureaucracy with i t s r i g i d i t y , routine and p o l i t i c a l 45 e.g. Canada. Privy Council O f f i c e , Crown Corporations:  Direction. Control. Accountability, (Ottawa: Supply and Services, 1977) and Prichard', (ed.) Crown Corporations i n  Canada: The Calculus of Instrument Choice. (Toronto: Butterworths, 1983). 46 Trebilcock and Prichard, "Crown Corporations: The Calculus of Instrument Choice", i n Prichard (ed.), supra fn. 45, pp.1-97 at 7. 214 influence.(47) They are established to give a measure of independence to the management of c e r t a i n types of a c t i v i t i e s . In r e l a t i o n to true l o t t e r i e s , the corporate form provides some appearance of distance from d i r e c t government without unduly attenuating government contr o l . Thus, as Trebilcock and Prichard note,(48) by e s t a b l i s h i n g public ownership through the corporate form, "the government i s able to make a symbolic statement that i t i s denying the forces of the market place and is determined to maintain control over the p r i c e , supply and channels of d i s t r i b u t i o n of the product i n order to encourage moderation i n i t s consumption. 1 1 When the B . C . L o t t e r y C o r p o r a t i o n A c t was passed, i t did not formally repeal the L o t t e r y A c t . With the e f f e c t i v e removal of true l o t t e r i e s from i t s aegis, however, i t s scope was much reduced. Further, i n June 1986, a l l regulations enacted pursuant to the L o t t e r y A c t and what was then s . 1 9 0 of the C r i m i n a l C o d e were repealed and replaced by "Policy D i r e c t i v e s " issued by the Minister of P r o v i n c i a l Secretary and Government Services pursuant simply to s . 1 9 0 . The i n i t i a l arrangement set up i n 1970 was restored, with l i c e n s i n g being conducted without reference to a p r o v i n c i a l statutory base. This remains i n e f f e c t , although the Policy Directives have been replaced by "Terms and Conditions" 47 Langford, "Crown Corporations as Instruments of P o l i c y " i n Doern and Aucoin (eds.), Public P o l i c y i n Canada (Toronto: Macmillan, 1979) pp.239-274 at 239. 48 Trebilcock and Prichard, s u p r a fn.45 at p.73. 215 issued by the B.C. Gaming Commission. The Lottery Act has become v i r t u a l l y i r r e l e v a n t . This development might be p a r t i a l l y explained by an amendment to s.207(2) of the Code enacted i n January, 1986.(49) P r i o r to that date, the subsection provided that a licen c e issued by ot under the Lieutenant Governor's authority might contain "such terms and conditions r e l a t i n g to the management and conduct of the l o t t e r y scheme to which the licence r e l a t e s " as the Lieutenant Governor may prescribe. Subsection 207(2) now reads: "Subject to t h i s Act, a licence issued by or under the authority of the Lieutenant Governor i n Council of a province .... may contain such terms and conditions r e l a t i n g to the conduct, management and operation of or  p a r t i c i p a t i o n i n the l o t t e r y scheme to which the licence r e l a t e s as the Lieutenant Governor i n Council of that province, the person or authority i n the province designated by the Lieutenant Governor i n Council thereof or any law enacted by the l e g i s l a t u r e  of that province may prescribe." [New provisions underlined] A s t r i c t i n t e r p r e t a t i o n of the wording of t h i s subsection would appear to make p r o v i n c i a l l e g i s l a t i o n optional. I t i s argued, however, that such a construction i s tenable only i f [l] t h e term "law" found i n the subsection i s used i n the sense of primary l e g i s l a t i o n , and [2]that terms and conditions would otherwise be found i n subordinate l e g i s l a t i o n enacted under a delegation of power found i n parent l e g i s l a t i o n . 49 S.C.1985, c.52. This i s the amendment which divested the federal government of any power to conduct and manage l o t t e r y schemes. 216 To f i n d otherwise would, i n e f f e c t , allow l i c e n s i n g by and on behalf of the province without any reference to p r o v i n c i a l law. Nonetheless, i t seems that B r i t i s h Columbia has chosen to view s.207(2) as making p r o v i n c i a l l e g i s l a t i o n regarding the l i c e n s i n g of l o t t e r y schemes as optional.(50) Statutory authority i s d i s t i n c t l y lacking. Licensing Without Law Where public gaming i s to be conducted and managed other than by the province i t s e l f , the Criminal Code makes p r o v i n c i a l l i c e n s i n g mandatory.* I t i s hardly suprising that t h i s i s the form of regulation which was chosen. One observer notes that, a f t e r *the criminal law method', l i c e n s i n g i s the t o o l most frequently used by the state i n enforcing s o c i a l policy.(52) Williams argues that l i c e n s i n g permits a c l o s e r surveillance of conduct than i s possible under the ordinary criminal law.(53) I t c e r t a i n l y allows an 50 I t should be noted that B.C. i s not alone i n t h i s regard. Alberta's regulatory structure, upon which B.C.'s i s l a r g e l y modelled, i s v i r t u a l l y i d e n t i c a l . Ontario also subscribes to a s i m i l a r arrangement. * In the b r i e f review of the l i t e r a t u r e on l i c e n s i n g which follows, c e r t a i n words and phrases w i l l be underlined i n order to indicate the assumption of an e x p l i c i t l i c e n s i n g law found therein. 52 W i l l i s , supra fn.42 at 354-55. 53 Williams, "Control By Licensing", [1967] Current Legal  Problems 81. 217 administrative assessment, i n advance, regarding the presence of l e g a l requirements or the absence of le g a l  objections.(54) The thrust i s e s s e n t i a l l y preventative. In any event, a licence grants a permission to do what i s otherwise i l l e g a l , ( 5 5 ) and i s one of the oldest devices of administrative control.(56) According to Freund,(57) i t can be used f o r a va r i e t y of purposes, but l i c e n s i n g of the type found i n the context of p r o v i n c i a l gaming control represents "the administrative l i f t i n g of a l e g i s l a t i v e p r o h i b i t i o n . The primary l e g i s l a t i v e thought i n li c e n s i n g i s not pr o h i b i t i o n but regulation, to be made e f f e c t i v e by the formal general denial of a r i g h t which i s then made i n d i v i d u a l l y a v a i l a b l e by an administrative act of approval, c e r t i f i c a t i o n , consent or permit." I t i s also an example of what Friedman c a l l s " h o s t i l e l i c e n s i n g " i n that i t i s imposed on the licensed group who had no p a r t i c i p a t i o n i n the dr a f t i n g and enactment of the l i c e n s i n g laws and have no say i n the l i c e n s i n g process. He compares i t to " f r i e n d l y l i c e n s i n g " which i s usually induced by a trade or professional association to enforce 54 Freund, "Licensing" i n Encyclopaedia of the So c i a l  Sciences Vol.9 (New York: Macmillan, 1937) pp.447-451 at 447. 55 Law Reform Commission of Canada, Working Paper # 51:  Pol i c y Implementation.Compliance and Administrative Law. " (Ottawa: L.R.C.C.,1986) p.67. 56 Foulkes, Administrative Law (6th ed.) (London: Butterworths, 1986) p.93. 57 Freund, supra fn.54. 218 professional norms and r e s t r i c t access to the licensed occupations.(58) Having received the authorization from Parliament to licence l o t t e r y schemes, a province, i n deciding to act upon i t must determine several basic issues. According to one administrative lawyer,(59) these are - who i s to be the l i c e n s i n g authority; - what w i l l the applicant have to show to get a l i c e n c e ; - i s i t to be subject to conditions, and of what kind; - i s there to be an appeal against a r e f u s a l or against the conditions. I f so, to whom and on what grounds? In any system of responsible government, i t goes almost without saying that the answers to these questions should be found i n the law. I t should, i n Street's words "be a simple matter to f i n d out what l i c e n s i n g powers exist."(60) The Law Reform Commission of Canada has stated that normally, a licensee i s governed by "generally applicable l e g i s l a t e d standards" and by " s p e c i f i c conditions included i n the l i c e n c e " and, providing the licensee complies with the l e g a l 58 Friedman, "Freedom of Contract and Occupational Licensing 1890-1910 etc.", (1965) 53 C a l i f o r n i a Law Review 487 at 495-496. 59 Foulkes, supra fn.56 at 94. 60 Street, J u s t i c e i n the Welfare State (2nd ed.) (London: Stevens and Sons, 1975) p.82. 219 r e q u i r e m e n t s s/he i s f r e e t o p u r s u e t h e r e l e v a n t a c t i v i t y . ( 6 1 ) The C r i m i n a l Code of Canada i s , o f c o u r s e , a p u b l i c e n a c t m e n t b u t i t p r o v i d e s l i t t l e g u i d a n c e t o p o t e n t i a l a n d a c t u a l l o t t e r y scheme l i c e n s e e s . From t h a t f e d e r a l s t a t u t e , t h e y c a n f i n d o u t t h a t t h e y m u s t b e e i t h e r a c h a r i t a b l e o r r e l i g i o u s o r g a n i z a t i o n w h i c h m u s t u s e t h e p r o c e e d s f o r a c h a r i t a b l e o r r e l i g i o u s o b j e c t o r p u r p o s e ; a b o a r d o f a f a i r o r e x h i b i t i o n o r a n o p e r a t o r o f a c o n c e s s i o n , o r someone who w a n t s t o r u n a s m a l l - s c a l e l o t t e r y scheme a t a p u b l i c p l a c e o f amusement. A n y f u r t h e r i n f o r m a t i o n m u s t come f r o m t h e p r o v i n c i a l l e v e l o f g o v e r n m e n t . U n t i l 1 9 8 6, l o t t e r y r e g u l a t i o n s i n t h e p r o v i n c e o f B r i t i s h C o l u m b i a w e r e g a z e t t e d p u r s u a n t t o t h e R e g u l a t i o n A c t , ( 6 2 ) a n d t h u s , i n t h e o r y a t l e a s t , w e r e a c c e s s i b l e t o t h e g e n e r a l p u b l i c , i n c l u d i n g l i c e n s e e s . T h o s e r e g u l a t i o n s w e r e r e p e a l e d a n d r e p l a c e d b y p o l i c y d i r e c t i v e s , w h i c h i n t u r n w e r e r e p l a c e d b y t e r m s a n d c o n d i t i o n s , n e i t h e r o f w h i c h h a v e b e e n p u b l i s h e d i n t h e B.C. G a z e t t e . The l e g a l s t a t u s o f t h e s e i n s t r u m e n t s d e s e r v e s f u r t h e r c o n s i d e r a t i o n . A m i n i s t e r i a l p o l i c y d i r e c t i v e i s a phenomenon w h i c h , a l t h o u g h f a i r l y r e c e n t , i s b e c o m i n g i n c r e a s i n g l y common i n C a n a d a . I n t h e i r a d m i n i s t r a t i v e l a w t r e a t i s e , D u s s a u l t a n d 61 Law R e f o r m C o m m i s s i o n o f C a n a d a , s u p r a f n . 5 5 a t 4 1 . 62 R.S.B.C. 1979, C . 3 6 1 . 220 Borgeat describe the d i r e c t i v e as a governmental norm regulating the a c t i v i t y of public servants. I t i s r a r e l y based on an express statutory provision. More commonly, i t s source i s i n the general powers of the government. Unlike a regulation, the d i r e c t i v e i s i m p l i c i t i n i t s o r i g i n and i s directed mainly to the in t e r n a l organization of the administration and i t s public servants.(63) In short, i t i s "a r u l e of conduct of an in t e r n a l nature made by an administrative authority pursuant to a general power of control, i n order to structure the action of one's subordinates, and for which f a i l u r e to obey i s subject to an administrative and non-judicial sanction."(64) The m i n i s t e r i a l p o l i c y d i r e c t i v e s issued i n 1986 respecting the l i c e n s i n g of l o t t e r y events i n B.C. would not appear to f i t t h i s d e f i n i t i o n . F i r s t l y , they were not prim a r i l y of an in t e r n a l nature, being directed to the licensee as much as the l i c e n s i n g authority. Secondly, the province does not possess a general power of control over l o t t e r y schemes. F i n a l l y , although f a i l u r e to follow the di r e c t i v e s may have resulted i n d i s c i p l i n a r y action f o r the administrator, i t may also have resulted i n criminal sanctions f o r the licensee. Operating a l o t t e r y scheme without a licence, or i n v i o l a t i o n of the terms and conditions of a licence takes the operator outside the scope of the exemptions provided i n s.207 of the Code and i s a criminal offence under s.207(3) subject to a maximum 63 Dussault and Borgeat, supra fn.4 at 17. 64 Ibid at 329. 221 punishment of two years' imprisonment.(65) Conversely, while p o l i c y d i r e c t i v e s are i n t e r n a l l y binding, they are not j u s t i c i a b l e . They do not confer l e g a l l y enforceable r i g h t s on t h i r d p a r t i e s even though such pa r t i e s may be adversely affected by non-compliance.(66) While i t recognizes the d e f i n i t i o n of d i r e c t i v e s offered by Dussault and Borgeat, the Law Reform Commission of Canada, i n i t s report on independent administrative agencies, concentrates on a much narrower conception of the phenomenon. According to the Commission, d i r e c t i v e s are in s t r u c t i o n s s p e c i f i c a l l y authorized by statute to be issued by Cabinet or a minister and issued i n a formal instrument to bind an agency to the p o l i c y the government intends to see followed on a given question and should have the form of regulations. They are of a l e g i s l a t i v e rather than an administrative nature.(67) This comes closer to describing the character of the l o t t e r y l i c e n s i n g p o l i c y d i r e c t i v e s , but they were not s p e c i f i c a l l y authorized by statute, nor were they constituted as regulations. As Starr 65 This p o t e n t i a l outcome renders the f a i l u r e to publish the p o l i c y d i r e c t i v e s and terms and conditions i n the Gazette even more questionable. 66 Law Reform Commission of Canada, supra fn.41 at p. 24, fn.28. An good example of t h i s are the d i r e c t i v e s issued by the Commissioner of Penitentiaries which have been held by the Supreme Court of Canada not to be l e g a l l y enforceable by prison inmates even though they were adversely affected by the f a i l u r e of the authorities to follow the d i r e c t i v e s : Martineau v. The Queen, [1978] 1 S.C.R.118. 67 Ibid at pp. 23-4 and 26. 222 indicates,(68) the provisions of the l o t t e r y d i r e c t i v e s were c l e a r l y intended to be regulatory i n nature, but were not v a l i d l y enacted regulations. In any event, the p o l i c y d i r e c t i v e s have been repealed and replaced by terms and conditions which are issued by the B.C. Gaming Commission, but which are not gazetted. A recent decision of the Ontario Supreme Court found that such terms and conditions are not regulations or statutory instruments and there i s no requirement that they be gazetted. In R. v. Furtney et al.,(69) the Court rejected the respondents' argument that they were charged with an offence unknown to law because the terms and conditions, although referred to i n l o t t e r y licences, were not published. As was indicated above however, operating a l o t t e r y without or i n v i o l a t i o n of a licence constitutes a federal Criminal Code offence, which, of course, i s an offence known to law. The terms and conditions, and the p o l i c y d i r e c t i v e s which preceded them, would appear to come clos e s t to what English commentators have termed " q u a s i - l e g i s l a t i o n " . F i r s t adopted by Megarry i n 1944,(70) i t encompasses law-which-is-not-a-law, e.g. administrative arrangements and p r a c t i c e 68 Starr, "Submission to Task Force on Gaming on Reserves" i n Indian and Northern A f f a i r s Canada, Gaming on  Reserves:etc. (Ottawa: I.N.A.C, 1987) p. 9. 69 Unreported decision, Supreme Court of Ontario, 13/9/88. 70 Megarry, "Administrative Quasi-Legislation", (1944) 60 Law Quarterly Review 125. 223 notes. I t . i s c r i t i c i z e d f o r i t s haphazard mode of promulgation (71) and for the lack of l e g a l controls over it.(72) Ganz recently subjected the concept of quasi-l e g i s l a t i o n to rigorous analysis and concluded that i t has i n d i r e c t l e g a l e f f e c t . Thus, for example, a grant or renewal of a licence i s made conditional upon compliance with quasi-l e g i s l a t i o n and conditions based on the q u a s i - l e g i s l a t i o n are attached to the licence.(73) This i s e s s e n t i a l l y the le g a l s i t u a t i o n i n B r i t i s h Columbia regarding l o t t e r y l i c e n s i n g . I t i s achieved without recourse to a formal l e g a l base. Nonetheless, i t has an i n d i r e c t l e g a l e f f e c t which i s bolstered by the Criminal Code offence of operating an unauthorized l o t t e r y scheme. Remedies As was stated above, (74) one of the functions of administrative law i s to provide remedies for i l l e g a l behaviour or procedural i r r e g u l a r i t i e s on the part of the administrative authority. Those remedies are generally 71 Ibid at p.128 72 Ganz, Quasi-Leqislation: Recent Developments i n Secondary  L e g i s l a t i o n (London: Sweet and Maxwell, 1987) p.25. 73 Ibid at p. 16. 74 Supra fn.4 and surrounding text. 224 sought through j u d i c i a l review of the administrative action.(75) Having set out the o r i g i n s , nature and scope of the regulation of public gaming through l i c e n s i n g , t h i s section w i l l examine the l e g a l remedies which might be avai l a b l e i n instances of administrative abuse i n the l i c e n s i n g process. J u d i c i a l review i s based on the fundamental p r i n c i p l e that powers can be v a l i d l y exercised only within t h e i r true l i m i t s . Consequently, a court w i l l only examine the l e g a l i t y of an administrative decision and not i t s merits.(76) U n t i l recently, the procedural requirements for j u d i c i a l review were antiquated and complex. One commentator notes that the fa c t that the scope, grounds and procedure of j u d i c i a l review varied according to the decision i n issue, the character of the decisionmaker and the kind of defect alleged meant that, at common law, an otherwise v a l i d claim fo r j u d i c i a l review could be defeated by an error i n the 75 J u d i c i a l review i s d i s t i n c t from any r i g h t of appeal from a decision of an administrative body. One observer notes that there i s no inherent r i g h t of appeal i n such circumstances; i t i s a statutory r i g h t - Klassen "Appeals from Administrative Tribunals" i n C.L.E.S.B.C., Administrative Law (Vancouver: C.L.E.S.B.C., 1988) pp.3.2.01-09 at 3.2.01. Nonetheless, the B.C. Gaming Commission provides a non-statutory r i g h t of appeal to the Commission " i n respect of an action, order or decision of the Gaming Commission or the Public Gaming Branch, t h e i r members, o f f i c e r s or employees". These "Gaming Commission Appeal Procedural Rules" are set out i n C.L.E.S.B.C., Administrative Law p.1.3.23. 76 Tokar, "Administrative Law: C o d i f i c a t i o n of the Grounds of J u d i c i a l Review", (1984) 14 Manitoba Law Journal 171 at 172. 225 choice of remedy.(77) With the enactment of the J u d i c i a l R e v i e w P r o c e d u r e A c t of B.C.(78) these procedural d i f f i c u l t i e s have been la r g e l y eliminated. J u d i c i a l Review of Delegated Powers The l o t t e r y l i c e n s i n g scheme i n B r i t i s h Columbia, as indicated, has a key deficiency i n terms of i t s statutory underpinning and delegated power. During the 1980s, the courts i n B.C. have been receptive to the use of subdelegation arguments to attack administrative action. The essence of such arguments i s , as Bryden indicates,(79) that discretionary decision-making authority has been redelegated to subordinate o f f i c i a l s without appropriate guidelines having been provided for the exercise of that d i s c r e t i o n or that the power to subdelegate has not been granted expressly or impliedly by the relevant l e g i s l a t i o n . Accordingly, i n R e M i a a n d t h e M e d i c a l S e r v i c e s C o m m i s s i o n o f B . C . ( 8 0 ) the issuance and denial of b i l l i n g numbers to doctors was found not to be authorized by the M e d i c a l S e r v i c e s A c t , c o n s t i t u t i n g an excess of j u r i s d i c t i o n . S i m i l a r l y , i n W e s t e r n C a n a d a W i l d e r n e s s C o m m i t t e e e t a l . , v . M i n i s t e r o f 77 Kaplan, " J u d i c i a l Review Under the J u d i c i a l review Procedure Act" i n C . L . E . S . B . C . , s u p r a fn.106, pp.3.1.01-15 at 3.1.05. 78 S.B.C. 1976, C.25; R.S.B.C. 1979, C.209. 79 Bryden, "Non-Traditional Decision-making" i n C . L . E . S . B . C . , s u p r a fn. 75 pp.1.2.01-09 at 1.2.03. 80 (1985) 17 D. L.R. (4th) 385 (B.C.S.C). 226 the Environment,(81) members of a public i n t e r e s t group sought a declaration that the decision-making power of a ministry o f f i c i a l was u l t r a v i r e s and a permit to hunt wolves from a i r c r a f t was accordingly n u l l and void. The relevant statute gave the o f f i c i a l the authority to issue permits i n accordance with regulations made by the Lieutenant Governor i n Council, but those regulations simply transferred the authority to issue permits without l e g i s l a t i v e guidance. The B.C. Supreme Court found that t h i s did not constitute "a complete scheme of standards and c r i t e r i a by which the o f f i c e r i s to be guided" and was therefore an unlawful subdelegation of a discretionary power. Regarding l o t t e r y l i c e n s i n g , there i s no constituent l e g i s l a t i o n e stablishing the B.C. Gaming Commission and defining i t s powers. I t has been designated by the Lieutenant Governor i n Council i n an Order i n Council as the p r o v i n c i a l body responsible for issuing both terms and conditions and the actual licences. There i s , however, no "complete scheme of standards and c r i t e r i a " by which i t i s to be guided. A related argument also based on the subdelegation p r i n c i p l e may also be f r u i t f u l . In h i s a r t i c l e examining recent developments i n the area of subdelegation, Keyes 81 (1988) 25 B.C.L.R. (2d) 93 (B.C.S.C). 227 observes that there are numerous cases i n which the issue i s not one of the transfer of power from a delegate to a subdelegate. Rather, the issue i s the delegation of a l e g i s l a t i v e power so that i t i s exercised administratively or that an authority has attempted to use an administrative power to achieve something which should have been done through delegated legislation.(82) Thus, f o r example, i t might be argued that designation of the B.C. Gaming Commission as the rule-making body for l o t t e r y l i c e n s i n g without l e g i s l a t e d guidelines, r e s u l t s i n the l i c e n s i n g scheme being established administratively. In such instances the courts have imposed what i s , i n ef f e c t , a duty to make law i n order to enable those who are subject to such a regulatory scheme to know the law and to structure t h e i r a f f a i r s accordingly. For example, the Canadian Transport Commission was prohibited from imposing conditions i n a i r c a r r i e r licences through a general order,(83) and a p r o v i n c i a l rent commission was found to have improperly fettered i t s d i s c r e t i o n by considering i n t e r n a l p o l i c y guidelines which should have been, and subsequently were, promulgated as regulations.(84) 82 Keyes, "From D e l e g a t u s to the Duty to Make Law", (1987) 33 McGill Law Journal 50 at 78. 83 N o r t h C o a s t A i r S e r v i c e s L t d . v . C a n a d i a n T r a n s p o r t C o m m i s s i o n , [1968] S.C.R. 940, c i t e d by Keyes, s u p r a fn.82 at p. 81. 84 D a l e C o r p . v . R e n t R e v i e w C o m m i s s i o n , (1983) N.S.R. (2d) 138 (S.C.A.D.) c i t e d by Keyes, s u p r a fn.82 at p. 82. 228 Keyes cautions that t h i s duty to make law must be considered i n l i g h t of the Supreme Court's decision i n C a p i t a l C i t i e s I n c . v . C . R . T . C . (85) i n which i t was held that the parent l e g i s l a t i o n did not compel the C.R.T.C. to use i t s regulation-making powers.(86) Instead, the Commission could regulate cable t e l e v i s i o n on an a d h o c basis, laying down informal "guidelines" for the exercise of i t s l i c e n s i n g d i s c r e t i o n . Keyes o f f e r s the following assessment:(87) "The decision i n C a p i t a l C i t i e s flows from a broad reading of the C.R.T.C.'s twin administrative and l e g i s l a t i v e powers. Laskin C.J.C. refused to divide these powers, but rather recognized the administrative exigencies that warranted the f l e x i b i l i t y of issuing informal guidelines or "quasi-law" to provide d i r e c t i o n for the exercise of the C.R.T.C.'s administrative powers without binding i t s d i s c r e t i o n as regulations would have done. The decision suggests that when the regulation of a p a r t i c u l a r area i s i n i t s i n i t i a l stages, the considerations underlying the duty to make law can be s a t i s f i e d other than by making delegated l e g i s l a t i o n . . . " The B.C. Gaming Commission also possesses l e g i s l a t i v e and administrative powers: the power to prescribe terms and conditions for l o t t e r y l i c e n s i n g and the power to grant li c e n c e s . The regulation of public gaming i n the province i s s i m i l a r l y i n i t s i n i t i a l stages. Conceivably, therefore, C a p i t a l C i t i e s could apply to preserve the present structure u n t i l gaming control had reached a l e v e l of maturity. I t 85 [1978] 2 S.C.R. 141. 86 Keyes, s u p r a fn.82 at p. 83. 87 I b i d at 84. 229 should be noted, however, that the C.R.T.C., unlike the B.C. Gaming Commission, i s a statutory creation. The combination of the absence of law i n l i c e n s i n g and i n the c o n s t i t u t i o n and operating procedures of the l i c e n s i n g body could be viewed as permitting too great a f l e x i b i l i t y i n the p r o v i n c i a l regulation of l o t t e r y schemes. Consequently, a duty to make law i n e i t h e r or both of these areas could be imposed by the courts. J u d i c i a l Review of the Exercise of Discretion In order to carry out t h e i r mandate, most regulatory a u t h o r i t i e s possess discretionary decision-making powers. There are no s t r i c t guidelines to confine t h e i r decisions on c e r t a i n issues. Administrative law requires that discretionary powers must be exercised properly i . e . i n good f a i t h , without an improper f e t t e r i n g of the d i s c r e t i o n , without taking into account improper considerations and conversely, without ignoring relevant considerations. The most s i g n i f i c a n t discretionary power of the B.C. Gaming Commission i s the determination of e l i g i b i l i t y for a licence, which involves an evaluation of the applicant. For example, the Commission w i l l assess whether an applicant-organization constitutes a charitable or r e l i g i o u s organization. Such groups are e l i g i b l e for a licence i f the proceeds from the l o t t e r y scheme are used for a charitable 230 or r e l i g i o u s object or purpose(88). The C r i m i n a l C o d e does not further define these terms and relevant court decisions are scant and l a r g e l y unhelpful(89). In the most recent version of the Terms and Conditions, "charitable object or purpose" i s defined i n r e l a t i v e l y vague terms as the r e l i e f of poverty; the advancement of education and/or r e l i g i o n ; and other purposes b e n e f i c i a l to the community. The Commission has i t s e l f recently expressed a desire to have cle a r e r guidelines for determining e l i g i b l e groups.(90) In the meantime, a group which i s denied a licence could ask the courts to determine whether that d i s c r e t i o n was properly exercised. There are very few reported cases dealing with p r o v i n c i a l l i c e n s i n g of l o t t e r y schemes. One of these, B i n g o E n t e r p r i s e s L t d . e t a l . v . M a n i t o b a L o t t e r i e s a n d G a m i n g L i c e n s i n g B o a r d , ( 9 1 ) addresses the c u r t a i l i n g of a discretionary power. The applicant owned two premises at which i t conducted games of bingo f o r charitable 88 C r i m i n a l C o d e , s . 2 0 7 ( 1 ) ( b ) . 89 e.g. In L a R o s e v . P l e u t y , (1971), 5 C.C.C.(2d) 528 (Alta.S.C.) i t was held to be i n s u f f i c i e n t f o r the money to be raised f o r a charitable purpose; the sponsoring organization must also be a charitable organization. The court found that a c e r t a i n organization running a c h a r i t y r a f f l e was not such an organization, but f a i l e d to state the c r i t e r i a which were used to make t h i s determination. 90 B.C. Gaming Commission, News and Views ( V i c t o r i a : B.C.G.C) Vol.1, # 3, December, 1988. 91 (1983) 2 Administrative L.R. 286 (Man.C.A.) 231 organizations who were i n possession of a l i c e n c e from the Manitoba Licensing Board. The Board adopted a p o l i c y of not l i c e n s i n g organizations who wanted to use the second of these premises. Bingo Enterprises i n i t i a t e d l e g a l proceedings as a r e s u l t , seeking i n t e r a l i a a declaration that the conduct of the Board was unlawful. The Manitoba Court of Appeal found that although Bingo Enterprises was not an applicant for a licence i t had a s u f f i c i e n t i n t e r e s t i n the issue to be e n t i t l e d to a remedy. Further, while the Board had a d i s c r e t i o n as to whether i t would issue such licences, i t could not single out the applicant f o r s p e c i a l treatment, unrelated to any general policy:(92) " I t might not be unlawful for the l o t t e r i e s board to adopt a p o l i c y to issue fewer licences or to r e s t r i c t licences to a p a r t i c u l a r s i z e of accommodation, or to issue licences i n a manner which prevents the establishment of a gaming house, or to issue licences i n a manner which w i l l assure that bingos w i l l be held i n areas which w i l l service c e r t a i n geographic portions of the c i t y or province. Within such general p o l i c y guidelines the p l a i n t i f f would have to function i n common with a l l others seeking to host such events. What the l o t t e r i e s board cannot do i s s i n g l e out Bingo Enterprises f o r s p e c i a l treatment that i s not related to any such general p o l i c y . " This decision confirms that, i n exercising a discretionary decision-making power, i t i s acceptable to adopt a general p o l i c y regarding the factors to be taken into account, although de Smith notes that t h i s cannot be done to the extent that consistency i s pursued at the 92 I b i d at p. 296 per O'Sullivan J.A. 232 expense of the merits of i n d i v i d u a l cases.(93) I t i s unacceptable, however, to have a p o l i c y which states that applications of a c e r t a i n type w i l l not be entertained. One commentator observes that there i s a d i v i d i n g l i n e between "the legitimate pursuit of a general p o l i c y i n a matter of administration" and "the enforcement of an extra-statutory regulation".(94) To return to a recurring theme of t h i s chapter, such a hidden rule means that interested p a r t i e s are denied adequate knowledge of how an administrative authority w i l l exercise i t decision-making power i n a p a r t i c u l a r s i t u a t i o n . J u d i c i a l Review of an Error of Law ex f a c i e Although the courts w i l l not review the substantive and procedural merits of a case, they w i l l step i n to correct an error of law on the face of the record of an administrative decision. In the recent case of Charity Vending Ltd. v. Alberta Gaming Commission e t al.(95) a manufacturer of a p u l l - t i c k e t vending machine sought a declaration regarding the decision of the Gaming Commission that t h i s machine was a s l o t machine. The Criminal Code does not permit charitable groups to operate s l o t machines. Consequently, the Gaming 93 de Smith, J u d i c i a l review of Administrative Action (4th ed.) (London: Stevens, 1980) p. 311-12. 94 Molot, "The Self-Created Rule of P o l i c y and Other Ways of Exercising Administrative Discretion", (1972) 18 McGill Law  Journal 310 at 324. 95 (1988), 43 C.C.C.(3d) 250 (Alta. Q.B.). 233 Commission was refusing to issue licences to those groups who sought to use the applicant's machines. In the Court of Queen's Bench, the application was granted. I t was held that the machine i n question d i d not constitute a s l o t machine as defined i n the Criminal Code and that the Commission's decision to p r o h i b i t the use of them was u l t r a v i r e s and void. The Commission misdirected i t s e l f i n law by taking into account a point of law which was wrong. This decision, however, has since been reversed on appeal with the i n i t i a l determination of the machine as a s l o t machine being restored.(96) J u d i c i a l Review of Procedure P r i o r to the Supreme Court of Canada's decision i n N i c h o l s o n v . H a l d i m a n d - N o r f o l k B o a r d o f P o l i c e C o m m i s s i o n e r s ( 9 7 ) there were close l i m i t s on the extent to which the courts would impose procedural obligations on regulatory bodies. The rules of natural j u s t i c e (encompassing the r i g h t to a hearing and to an impartial ajudicator) were imposed only upon j u d i c i a l or quasi-j u d i c i a l bodies. The a d m i n i s t r a t i v e / j u d i c i a l d i s t i n c t i o n was 96 C h a r i t y V e n d i n g v . A l b e r t a G a m i n g C o m m i s s i o n , unreported decision of the Alberta Court of Appeal, 21/11/88. The Court also brought into question the use of j u d i c i a l review procedure for reviewing a p o l i c y which was not "a decision d i r e c t l y a f f e c t i n g the applicant for r e l i e f " , i . e . the manufacturer was not an applicant for a licence, but a mere supplier to licencees. This issue was not decided as the Gaming Commission chose not to r a i s e i t . 97 [1979] 1 S.C.R. 311. 234 therefore c r u c i a l i n t h i s regard. Reid and David note that l i c e n s i n g functions could be c l a s s i f i e d e i t h e r way. There were no hard and fa s t r u l e s. I t depended on the c h a r a c t e r i s t i c s of the p a r t i c u l a r l i c e n s i n g scheme.(98) With the introduction of a duty to observe procedural fairness incumbent upon administrative decision-makers i n Nicholson, the Supreme Court rendered the a d m i n i s t r a t i v e / j u d i c i a l d i s t i n c t i o n v i r t u a l l y i r r e l e v a n t from the viewpoint of the a v a i l a b i l i t y of j u d i c i a l review. As to how t h i s might a f f e c t p r o v i n c i a l gaming control procedures, the decisions i n Energy Probe v. Atomic Energy Control Board(99) and Scarborough Community Legal Services v. The Queen(lOO) should be considered. Energy Probe concerned a challenge to a decision of the A.E.C.B. to renew a licence on the basis of an a l l e g a t i o n of pecuniary bias on the part of a Board member. Reed J . noted that the p a r t i e s were unanimous that the l i c e n s i n g function of the A.E.C.B. was an administrative one and not j u d i c i a l or q u a s i - j u d i c i a l . Accordingly, the doctrine of fairness enunciated i n Nicholson applied to the A.E.C.B.'s l i c e n s i n g decisions. He concluded that the duty to act f a i r l y must 98 Reid and David, Administrative Law and Practice (2d ed.) (Toronto: Butterworths, 1978) pp.137-8 and 148. 99 [1984] 2 F.C. 227 (F.C.T.D.), affirmed by F.C.A. [1985] 1 F.C. 563, leave to appeal to S.C.C. refused. 100 [1985] 2 F.C. 555 (F.C.A.). 235 include a requirement for an unbiased decisionmaker. Any other conclusion would undercut the whole concept of the requirement of a duty of fairness.(101) Mullan adds a caveat to t h i s decision which might l i m i t i t s a p p l i c a b i l i t y i n the gaming control sphere. He argues that the Federal Court judge was dealing with l i c e n s i n g functions which i n r e a l i t y were more j u d i c i a l or quasi-j u d i c i a l than they were administrative and suggests that, for l i c e n s i n g schemes which are t r u l y administrative, "predispositions, firmly-held p o l i c y preferences, and the l i k e may and perhaps should be more r e a d i l y tolerated."(102) There i s thus some ambiguity as to whether the Gaming Commissioners must be free of a l l bias. Scarborough Community Legal Services on the other hand, suggests f a i r l y c l e a r l y that the r i g h t to procedural fairness i n obtaining a licence to conduct a l o t t e r y scheme does not encompass the r i g h t to make representations beyond the i n i t i a l application, or the r i g h t to a hearing. In that case S.C.L.S., which was denied status as a registered c h a r i t y by the Minister of National Revenue argued that i t had been denied natural j u s t i c e or procedural fairness due to a f a i l u r e to receive p r i o r notice of the case against i t 101 Energy Probe supra fn.99 at p. 233-34, per Reed J . 102 Mullan, "Natural J u s t i c e - The Challenges of Nicholson, Deference Theory and the Charter" i n F i n k e l s t e i n and Rogers (eds.) Recent Developments i n Administrative Law (Toronto: Carswell, 1987) pp.1-52 at 17. 236 and the opportunity to meet that case. The majority rejected t h i s argument, holding that the function of the Minister i n dealing with an application for r e g i s t r a t i o n as a c h a r i t y i s s t r i c t l y administrative. The Court did suggest, however, that d i f f e r e n t considerations would apply to the revocation of such registration:(103) "While a decision to revoke a previously recognized s p e c i a l status on the ground of unacceptable conduct has the e f f e c t of penal conviction and the function of making i t may probably be said to be q u a s i - j u d i c i a l , i t being s i m i l a r to that of a judge presiding over a penal t r i b u n a l , a decision to deny an applicant the r i g h t to be given s p e c i a l status on the facts and evidence submitted by him, lacks the basic c h a r a c t e r i s t i c s of an adjudication i n t e r p a r t e s by a court of law." Regarding the l i c e n s i n g of l o t t e r y schemes, however, termination i s inherent. Licences are issued f o r a s p e c i f i e d number of l o t t e r y schemes i n a given period, with no guarantee of renewal. Thus, while licences can be revoked for cause, the renewal of licences i s arguably the more si g n f i c a n t power and i s treated procedurally the same as new a p p l i c a t i o n . J u d i c i a l review of administrative action cannot remedy every l e g a l deficiency i n a l o t t e r y l i c e n s i n g scheme, but i s does present a possible avenue of redress not only for those seeking a licence, but perhaps also for those involved i n 103 S c a r b o r o u g h C o m m u n i t y L e g a l S e r v i c e s , s u p r a fn.100 at pp.575-76 per Marceau J . 237 the business of providing f a c i l i t i e s and supplies(104) and for other i n t e r e s t groups.(105) I t does, however, represent a short-term, i n d i v i d u a l i z e d solution to a problem which demands r a d i c a l l e g i s l a t i v e action. Twenty years ago Parliament created a new area requiring p r o v i n c i a l regulation: l e g a l i z e d gambling. The development of p r o v i n c i a l gaming controls, within B r i t i s h Columbia at l e a s t , has not been smooth. In part, t h i s i s a t t r i b u t a b l e to the s i n g u l a r i t y of the status of l e g a l i z e d gambling. I t s i t s ambivalently between the j u r i s d i c t i o n of the federal and p r o v i n c i a l l e v e l s of government. Not a l l the growing pains are unique to gaming control, however. For example, Janisch has noted that, i n general, regulatory p o l i c y i s not i n s p i r a t i o n a l but incremental:(106) "In other words, one does not have i n s p i r a t i o n a l thoughts on regulatory p o l i c y ; one has experience, makes mistakes, t r i e s to make adjustments, has experiments...." Experience i n B r i t i s h Columbia has resulted i n a bifurcated system of control focussing on the B.C. Lottery Corporation and the B.C. Gaming Commission. The former has been 104 e.g. B i n g o S u p p l i e s L t d . s u p r a fn.91 c.f. C h a r i t y V e n d i n g s u p r a fn.96. 105 e.g. E n e r g y P r o b e , s u p r a fn.99, and W e s t e r n C a n a d a W i l d e r n e s s C o m m i t t e e , s u p r a fn.81. 106 Evidence submitted to the Parliamentary Committee on Regulatory Reform, quoted i n Rankin, s u p r a fn.34 at p . 41-2. 238 formalized i n l e g i s l a t i o n ; the l a t t e r operates i n a l e g a l no man's land. I n i t i a l l y , perhaps, regulatory structures and procedures were required to be p a r t i c u l a r l y f l e x i b l e to allow experimentation and adjustment. Nonetheless, such a s i t u a t i o n cannot be allowed continue i n d e f i n i t e l y without damaging the infra s t r u c t u r e of parliamentary democracy and responsible government. The B.C. Gaming Commission has i t s e l f recognized the need for a l e g a l foundation f o r a l l the a c t i v i t i e s of the Commission and the Public Gaming Branch i n a new p r o v i n c i a l statute and regulations.(107) This was not one of the Commission's recommendations which was immediately acted upon by the government, but the enactment of such l e g i s l a t i o n would provide the statutory base which i s currently lacking i n the l i c e n s i n g of l o t t e r y schemes. Licensing i n the absence of law ought to become an h i s t o r i c a l footnote. 107 B.C. Gaming Commission, supra fn.35 at p.1-3. 239 CONCLUSIONS The stated aim of t h i s thesis was to provide some understanding of how the l e g a l status of l o t t e r y schemes i n Canada has been transformed i n the l a s t twenty years, why i t occurred and what i t s consequences have been. I t was a task e n t a i l i n g l e g a l research i n a number of diverse areas, which i n i t s e l f i s an indicator of the complexity of the agenda. As a consequence of t h i s , there i s no s i n g l e , unifying conclusion, but rather a number of related c l o s i n g remarks. The opening chapters demonstrated the h i s t o r i c a l and p o l i t i c a l dimensions of the transformation process. H i s t o r i c a l l y , European-style l o t t e r i e s were used i n t h i s country for r a i s i n g revenues for public works projects before the introduction of taxation schemes, and also for r a i s i n g money for "good causes". The former were abolished i n the early 19th century, but the l a t t e r , except for a b r i e f hiatus, have been allowed, but on a very small scale. These r e s t r i c t i o n s were l i f t e d i n 1969 and, at the same time, state l o t t e r i e s were reintroduced as a form of i n d i r e c t taxation. This r a d i c a l change i n the rules was done r e l a t i v e l y quickly, with a minimum of fuss and very l i t t l e i n the way of public discussion. I t was a s i l e n t transformation. There were, i t was shown, well-established, p h i l o s o p h i c a l l y sound reasons for the removal of criminal 240 sanctions from c e r t a i n gambling games, but there were also p o l i t i c a l , s o c i a l and economic reasons which were equally, i f not more important i n explaining i t s occurrence. And, regardless of the v a l i d i t y of the reasons fo r the decriminalization of l o t t e r y schemes, i t had to be accomplished not within the realms of some i d e a l l e g a l system, but within the parameters of Canada's c o n s t i t u t i o n a l framework. In a federal system l i k e the one e x i s t i n g i n t h i s country, where the criminal law power belongs to the central government, account should have been taken of c o n s t i t u t i o n a l imperatives. In t h i s instance, however, the l e g i s l a t i v e drafters devised an innovative exemption from the operation of criminal sanctions for l o t t e r y schemes: a provision of the Criminal Code made them l e g a l i f they were operated or licensed by a p r o v i n c i a l authority, or, u n t i l 1985, i f they were conducted by the federal government. In view of the c o n s t i t u t i o n a l p r o s c r i p t i o n of the interdelegation of powers between l e g i s l a t i v e bodies, t h i s arrangement i s dubious at best. Instead of taking l o t t e r y schemes out of the Code altogether and simply leaving i t to the provinces to intervene as they saw f i t , or of adopting a federal regulatory scheme administered by the provinces, t h i s highly questionable a l t e r n a t i v e was chosen which e f f e c t i v e l y r e d i s t r i b u t e d l e g i s l a t i v e authority without a c o n s t i t u t i o n a l amendment and ultimately resulted i n federal control over l o t t e r y schemes being exchanged i n 1985 for p r o v i n c i a l cash. 241 The sub s i l e n t i o nature of the process by which l e g a l i z e d l o t t e r y schemes were created i n 1969 and t o t a l l y removed from federal j u r i s d i c t i o n i n 1985 has had serious consequences. The lack of debate i s at l e a s t p a r t l y responsible f o r the incoherent response on the part of some provinces, which soon took advantage of t h e i r a b i l i t y to conduct and manage l o t t e r y schemes, but d i d not appear to have an a r t i c u l a t e gaming control p o l i c y . That, combined with the singular nature. of the decriminalization arrangement, has i n B r i t i s h Columbia at lea s t , produced a regulatory scheme developed without reference to a s o l i d statutory base, providing sound and well-developed l e g a l parameters. The executive f e d e r a l - p r o v i n c i a l agreement of 1985, which led to the federal government divesting i t s e l f of a l l power over l e g a l i z e d l o t t e r y schemes, perpetuated a t r a d i t i o n of f a i l i n g to take into account an important segment of Canada's population: i t s aboriginal peoples. I t was shown that gambling games have been played i n t h i s country since time immemorial by the native Indians, but that when i t was s e t t l e d by Europeans, gambling was criminalized without regard to these long-established Indian t r a d i t i o n s . Just as native in t e r e s t s were disregarded when gambling was made a criminal offence, they were s i m i l a r l y ignored i n the decriminalization process and i n the r e d i s t r i b u t i o n of control over l o t t e r y schemes. The 242 difference t h i s time, however, i s that Indian bands are not w i l l i n g to acquiesce. The gambling controversy i s seen as being important i n i t s own r i g h t , and as a vehicle for furthering Indian sovereignty. I t i s t h i s issue more than any other which w i l l , i n a l l l i k e l i h o o d , force a re-examination of the l e g a l status of l o t t e r y schemes. 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