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In Canadian Constitutional law, section 91(2) of the Constitution Act, 1867 provides the federal government with the authority to legislate on matters related to the regulation of Trade and Commerce. This power is generally balanced against the provincial power over property and civil rights under section 92(13) as well as "matters of a local nature" under section 92(16).

The trade and commerce clause was first examined in Citizen's Insurance Co. v. Parsons (1881). The Privy Council identified two branches of the clause. A matter could fall under the inter-provincial branch if it concerned "international and interprovincial trade", or in the alternative, it could fall under the general trade branch if it concerned the "general regulation of trade affecting the Dominion as a whole".

Inter-provincial trade


Initially the scope for inter-provincial trade was set very narrowly by the Privy Council. In the Board of Commerce case, the Privy Council suggested that te trade and commerce power only applied as an ancillary power to some other valid federal power. This prinicple was eventually rejected in Toronto Electric Commissioners v. Snider, but the power was still read strictly. In R. v. Eastern Terminal Elevator Co. (1925), a federal law regulating trade of provincially produced grain destined entirely for export was found not to be within the meaning of inter-provincial trade. Similar marketing schemes were held to be invalid on the same basis Natural Products Marketing Reference (1937).

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