What was the legal reasoning behind the law’s rejection in the Margarine Reference case?

The law's rejection in the Margarine Reference case was primarily based on the reasoning that it was disguised as health regulation to control trade. The Supreme Court of Canada determined that the legislation, which aimed to restrict the sale of margarine in favor of butter, was not a genuine health measure but rather an attempt to serve economic interests by limiting competition.

The underlying legal principle at issue was the balance of powers between federal and provincial jurisdictions concerning trade and commerce. The Court concluded that while provinces have the authority to enact health regulations, this law overstepped that jurisdiction by effectively regulating a specific product for competitive advantage rather than for true health concerns. This demonstrates the principle that legislation must genuinely relate to its stated purpose and cannot disguise economic motives as health protection.

This rationale reflects the broader themes of federalism and the protection of trade rights within Canada, illustrating how courts scrutinize the motives behind legislation to ensure that regulatory powers are not misused.