Ryan: ‘Cabinet Appeals’ and the CRTC
Executive Control of Administrative Action: ‘Cabinet Appeals’ and the CRTC Michael H. Ryan ______
The statutory provisions that empower the federal Cabinet to review decisions of the Canadian Radio-television and Telecommunications Commission in telecommunications and broadcasting matters are frequently criticized because of the perception that Cabinet intervention in the regulatory process poses a threat to the independence of the regulator and the integrity of its process. Although reforms have been adopted to address concerns about the lack of procedural fairness in the Cabinet appeal process, these have not allayed more fundamental concerns about the legitimacy of Cabinet intervention. The author examines issues such as the frequency of Cabinet intervention in CRTC decision-making, how the 2014 CanLIIDocs 327 pattern of interventions has evolved over time under successive governments, and the nature of the issues on which Cabinet has intervened to assist understanding of the degree of political intervention in CRTC decision-making and its implications. The author argues that the status quo, which relies heavily on ex post Cabinet review of individual CRTC decisions, is seriously flawed. He presents some specific suggestions for reform that involve limiting the range of issues on which Cabinet may intervene in telecommunications cases and adopting procedural safeguards, based on those that already apply in the issuing of Cabinet directions to the CRTC, that would apply to reviews of decisions in both telecommunications and broadcasting cases. ______
Introduction I. Statutory Framework A. Telecommunications Act B. Broadcasting Act II. Frequency of Cabinet Interventions III. Threshold for Review IV. Some Case Studies A. Telecommunications Competition Decisions B. The 6+5 Cases C. Other “Referral Back” Cases D. Consumer Issues E. Foreign Ownership and Control V. Summary, and Some Reform Proposals Appendices A. Decisions by the Governor-in-Council reviewing Telecommunications Decisions, 1906-2012 B. Decisions by the Governor-in-Council reviewing Broadcasting Decisions, 1968- 2012
of the Ontario Bar. Partner, Arnold & Porter (UK) LLP, Solicitors, London, UK. The author expresses his gratitude to Alan Hamilton, Stephen Schmidt and Richard Schultz for many helpful comments, and to the staff of the CRTC’s Information Resource Centre and of the Reference Services Division, Library and Archives Canada. © Michael H Ryan, 2014
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Electronic copy available at: http://ssrn.com/abstract=2403402 Ryan: ‘Cabinet Appeals’ and the CRTC
Introduction
The provisions of the federal Telecommunications Act1 and Broadcasting Act2 that empower the Executive in the person of the Governor in Council -- that is, the Cabinet -- review decisions of the Canadian Radio-television and Telecommunications Commission [CRTC or Commission] have frequently been the target of criticism3 because of the
1 SC 1993, c 38, s 12(1) [Telecommunications Act or TA]. 2 SC 1991, c 11, s 28(1) [Broadcasting Act or BA]. 3 The literature discussing the subject, most of which favours reforming or abolishing Cabinet reviews, is 2014 CanLIIDocs 327 substantial. Although much of it dates from the 1970s and 80s, it retains its relevance. See in particular the following reports by special commissions and Parliamentary committees: Royal Commission on Financial Management and Accountability, Final Report (Hull, PQ: Minister of Supply and Services Canada, 1979) at 319 (advocating the abolition of Cabinet appeals and use of other mechanisms for transmission of policy to agencies) [Lambert Commission Report]; Economic Council of Canada, Reforming Regulation (Hull, PQ: Minister of Supply and Services Canada, 1979) at 134 (advocating abolition of Cabinet appeals and use of policy directives as an alternative); Special Committee on Regulatory Reform, Report (Ottawa: Minister of Supply and Services Canada, 1981) (advocating the introduction of policy directions and the retention of Cabinet appeals) [Peterson Committee Report]; Report of the Task Force on Broadcasting Policy (Toronto: Minister of Supply and Services Canada, 1986) at 175 (recommending that power to set aside CRTC decisions not be included in the Broadcasting Act if Cabinet also has a general power of direction) [Caplan-Sauvageau Report]; Senate, Report of the Standing Committee on Transportation and Communications on the Subject- Matter of Bill C-62, An Act Respecting Telecommunications, 3rd Session, 34th Parliament (June 1992) at 24-25 (recommending abolition of power to vary or rescind telecom decisions and its replacement by a power to set aside or refer decisions back for reconsideration modeled on the BA). The Law Reform Commission of Canada [LRC] examined Cabinet involvement in the regulatory decision- making of various agencies, including the CRTC, in Independent Regulatory Agencies: A Framework for Decision Making (Ottawa: Minister of Supply and Services Canada, 1985) and, at 35-38, advocated use of policy directions in place of Cabinet appeals. Two studies that served as inputs for the LRC’s report also merit mention: L. Vandervort, Political Control of Independent Administrative Agencies (Ottawa: Minister of Supply and Services Canada, 1979) and C.C. Johnston, The Canadian Radio-television and Telecommunications Commission: A Study of Administrative Procedure in the CRTC (Ottawa: Minister of Supply and Services Canada, 1980). See in particular at 84-89. The academic literature includes several contributions by Hudson Janisch, including “Political Accountability for Administrative Tribunals,” a paper presented at the Conference on Administrative Justice, University of Ottawa, 27 January 1978; “The Role of the Independent Regulatory Agency in Canada” (1978) 27 UNBLJ 83; “Policy Making in Regulation: Towards a New Definition of the Status of Independent Agencies in Canada” (1979) 17 Osgoode Hall LJ 46; and “The Relationship Between Governments and Independent Regulatory Agencies: Will We Ever Get it Right?” (2012) 49 Alta L Rev 785 [Janisch 2012]. The literature also includes Richard J. Schultz, Federalism and the Regulatory Process (Montreal: The Institute for Research on Public Policy, 1979) (see esp at 16-18, 83); Andrew Roman, “Governmental Control of Tribunals: Appeals, Directives, and Non-Statutory Mechanisms” (1985) 10 Queen’s LJ 476; Donna Soble Kaufman, “Cabinet Action and the CRTC: An Examination of Section 23 of the Broadcasting Act” (1985) 26 Les Cahiers de droit 841 [Kaufman]; P. Kenniff et al., Le contrôle politique des tribunaux administratifs (Québec: Presses de l’Université Laval, 1978) [Kenniff]. The CRTC itself has been a particularly vocal critic of Cabinet appeals. See CRTC, Annual Report (1982- 83) at x (in which Chairman John Meisel said it would be “highly desirable to eliminate or drastically reduce” the power of Cabinet to review Commission decisions, and described the process as “an invitation to vested interests and lobbyists to converge on ministers in an effort to undo, behind closed doors, decisions reached by the Commission and based on public hearings where interested parties can react to one another’s arguments openly”); and CRTC, Notes for an address by A. Bureau, Chairman, Canadian Radio-television and Telecommunications Commission, to the Law Society of Upper Canada Conference on Communications Law and Policy (Toronto, 25 March 1988) at para 48 (describing the process as it was then structured as Footnote continued on next page 2
Electronic copy available at: http://ssrn.com/abstract=2403402 Ryan: ‘Cabinet Appeals’ and the CRTC perception that “Cabinet appeals” -- as these devices for Cabinet review of regulatory decisions are commonly referred to4 -- pose a threat to the independence of the regulator and the integrity of the regulatory process. As Estey J. remarked in the judgment he delivered on behalf of the Supreme Court of Canada in Attorney General of Canada v. Inuit Tapirisat, “it may be thought by some to be unusual and even counter-productive in an organized society that a carefully considered decision by an administrative agency, arrived at after a full public hearing in which many points of view have been advanced, should be susceptible of reversal by the Governor in Council.”5
In the past, much of the controversy arose as a result of the perceived unfairness of the
Cabinet appeal process. In Inuit, the Supreme Court concluded that the rules of natural 2014 CanLIIDocs 327 justice and fairness do not apply to Cabinet appeals and therefore declined to interfere with a Cabinet decision to grant a petition by Bell Canada from a CRTC decision setting telephone rates, even though the other parties to the proceedings before the CRTC had not been given an opportunity to respond to the petition before the Cabinet decision was rendered. Some of the concerns about fairness were later addressed in legislation. The Telecommunications Act
Footnote continued from previous page “unacceptable”) and at paras 39-46 (arguing that the co-existence of Cabinet appeals and powers of direction under the BA would “risk damaging the Commission’s status as an independent agency”). 4 The Cabinet review process is sometimes referred to as an “appeal”, especially when initiated by a petitioner rather than Cabinet itself. This is a misnomer. Cabinet’s power of review is better described as supervisory rather than appellate in nature: see CSP Foods Ltd. v. Canadian Transport Commission [1979] 1 FC 3 at 9-10 (CA). See also Re Davisville Investment Co. Ltd. and City of Toronto et al. (1977) 15 OR (2d) 553 (CA) and Re Canadian Pacific Express Ltd. and Snow (1981) 31 OR (2d) 120, aff’d 121 DLR (3d) 511 (CA). We will generally use the term “Cabinet review” to refer to the process. For convenience, the term “Cabinet” is often used herein to refer to the Governor in Council (sometimes abbreviated “GiC”), which is the body that is formally invested with the power to review CRTC decisions. Cabinet decisions are generally embodied in orders in council [OiCs]. OiCs made under the BA, supra note 2, are published in the Canada Gazette. Full text versions are available on line from 1998 at http://www.gazette.gc.ca and prior to 1998 at the Library and Archives Canada [LAC] website, http://www.collectionscanada.gc.ca. The website of the Department of Canadian Heritage (http://www.pch.gc.ca) contains links to most, but not all, OiCs made in response to petitions under the BA since 1993. OiCs made in telecommunications cases are not always readily accessible. OiCs varying CRTC orders made under the TA, supra note 1, are published in the Canada Gazette and are available online in the same manner as OiCs made in broadcasting cases, but OiCs declining to vary or rescind decisions are not published in the Canada Gazette; nor are any OiCs in telecommunications cases made before 1993 under predecessor legislation. (These unpublished decisions are also unavailable online at the Canada Gazette or LAC websites.)_However, the website of the Privy Council Office [PCO], http://www.pco-bcp.gc.ca lists OiCs made in telecommunications cases (as well as broadcasting cases) since 1990 (with full text versions after 2002). The website of the Department of Industry (http://www.ic.gc.ca) includes copies of most petitions and OiCs made under the TA since 1997. In the case of OiCs, we cite, where possible, to the Canada Gazette for printed versions, and to the Canada Gazette website (from 1998) and LAC website (before 1968) for online versions. Where a public source is not indicated, the OiC is in the author’s own files. 5 [1980] 2 SCR 735 at 756 [Inuit].
3 Ryan: ‘Cabinet Appeals’ and the CRTC and the Broadcasting Act now require Cabinet to comply with many of the same basic principles of procedural fairness as other statutory decision-makers. Petitioners seeking a Cabinet review of a CRTC broadcasting or telecommunications decision must now serve the CRTC with a copy of a petition,6 which the Commission is required to circulate to any persons who made oral representations to the Commission in relation to the decision that is the subject of the petition.7 The CRTC must maintain a public register of petitions made under the Broadcasting Act which must include a copy of each petition.8 A similar requirement is imposed on the Minister of Industry in respect of petitions made under the Telecommunications Act: the Minister is required to publish notice of receipt of such petitions and make petitions and responses publically available.9 Moreover, Cabinet is now 2014 CanLIIDocs 327 required to give reasons for decision.10
However welcome these procedural reforms have been, they have not allayed more fundamental concerns about the legitimacy of Cabinet intervention in CRTC decision- making. In 2006, the federally-appointed Telecommunications Policy Review Panel called for the repeal of Cabinet’s power to review CRTC telecom decisions, noting that “[t]he legislative framework within which the CRTC operates … makes it appear to be one of the least independent telecommunications regulatory agencies in any OECD country.”11 More recently, a former CRTC Vice-Chair of Telecommunications charged that the cumulative impact of government interventions in major CRTC decisions over the last few years threatens to “reduce the CRTC to a mere way station for disgruntled interests on the way to cabinet.”12 Despite such criticisms, successive governments of various political stripe have resisted calls to curtail or abolish Cabinet’s review power.
Is there a basis for the concern that the review power is invoked too often and in a way that amounts to political interference with the CRTC’s independence? The question provokes
6 TA, supra note 1, s 12(2); BA, supra note 2, s 29(1). 7 TA, supra note 1, s 12(3); BA, supra note 2, s 29(2). 8 BA, supra note 2, s 29(3). 9 TA, supra note 1, s 12(4). 10 TA, supra note 1, s 12(8); BA, supra note 2, s 28(5).. Before recommending a decision to Cabinet, the Minister must consult with the CRTC and the provinces: TA, supra note 1, s 13. There is no corresponding obligation under the Broadcasting Act. 11 Telecommunications Policy Review Panel, Final Report (Ottawa: Industry Canada, 2006) at 9-16 and 9- 18. 12 Richard French, “Second-guessing the CRTC comes at a price,” Globe and Mail (2 February 2011). Available at http://www.theglobeandmail.com/technology/tech-news/second-guessing-the-crtc-comes-at-a- price/article565220/.
4 Ryan: ‘Cabinet Appeals’ and the CRTC others: How frequently has Cabinet intervened in CRTC decision-making? How many cases are initiated by Cabinet of its own motion, and how many by petition by aggrieved persons? What percentage of cases result in the referral back of a decision to the CRTC for reconsideration, a variance of a decision, or the setting aside of a decision? Has the pattern of interventions evolved over time under successive governments? What are the issues on which Cabinet has intervened? It is surprising, given the long history of the debate over Cabinet appeals, and its occasional intensity, that the answer to these questions is not readily- available in the existing literature. Although there has been informed commentary on individual cases, no comprehensive review of experience with Cabinet appeals has yet been undertaken.13 It is one of the purposes of this article to make a contribution towards filling 2014 CanLIIDocs 327 this gap.
The discussion begins in section II with a description of the statutory framework governing Cabinet appeals under the Telecommunications Act and the Broadcasting Act, including a history of the provisions in the two Acts. In section III, we report on the frequency of Cabinet appeals. This section is based on lists of Cabinet decisions in telecommunications cases since 1906 and broadcasting cases since 1968 compiled for this article --1906 and 1968 being the dates when provision was first made for Cabinet reviews of regulatory decisions in the telecom and broadcasting sectors, respectively.
In Section IV, headed “Threshold for Review,” we refer to statements in which Cabinet has identified the principles that it has said guide the choice of matters in which it will intervene. In Section V, we provide some short “case studies” of Cabinet decisions. From this discussion, a picture emerges of the types of issues in which Cabinet has become engaged. This section also provides some insight into experience with “referrals-back.” Under both the Telecommunications Act and the Broadcasting Act, Cabinet has the option of referring decisions back to the CRTC for reconsideration. How the CRTC has responded to such referrals-back is an interesting aspect of the Cabinet appeal process that has been largely neglected.
Up to this point, the approach of this article is descriptive rather than critical. In Section VI, we set out some proposals for reform of the Cabinet review process with a view to
13 Vandervort, supra note 3 at App B includes a list of OiCs disposing of petitions pursuant to statute from the decisions of statutory regulators made between January 1968 and February 1979. See also Kenniff, supra note 3, which includes a review of Cabinet decisions made in respect of the CTC, CRTC and National Energy Board decisions during the same period.
5 Ryan: ‘Cabinet Appeals’ and the CRTC addressing some of the concerns about legitimacy of Cabinet intervention in CRTC decision- making alluded to above.
I. Statutory Framework
A. Telecommunications Act
The Telecommunications Act gives the CRTC a mandate to regulate telecommunications carriers, including access to and use of their networks and the rates they charge for their services. In certain cases, the CRTC also has the power to impose penalties for breach of its rules. The CRTC is required to exercise its powers and perform its duties in accordance with the broad objectives of Canadian telecommunications policy set out in section 7 of the Act.14 2014 CanLIIDocs 327
The Telecommunications Act was enacted in 1993, but Cabinet’s engagement in the regulation of telecommunications began a century earlier. In 1892, in response to concerns about the growing power of the Bell Telephone Company of Canada,15 Parliament amended the 1881 private act incorporating the company to impose a requirement that its existing rates could not be increased without the consent of Cabinet.16 Bell was to make only one application for a rate increase under the 1892 legislation (in 1897). The process, which included an examination of the books of the company by the Department of Finance, was a protracted, and by any standard, an unsatisfactory one. Public antipathy toward Bell and opposition by several municipalities divided Cabinet and the process ended after 18 months without a Cabinet decision, demonstrating the incapacity of Cabinet to function effectively as regulator.17 In 1902, an attempt was made to depoliticize the rates issue by empowering Cabinet to commission a judge to enquire into and report or whether any increase or reduction should be made.18
During this same period, the government was debating how to deal with issues of railway regulation, which was also mired in political controversy and indecision. The
14 TA, supra note 1, ss 23-29, 41, 47. 15 For an account of developments during this period, see Jean-Guy Rens, Invisible Empire: A History of the Telecommunications Industry in Canada (Montreal and Kingston: McGill-Queen’s University Press, 2001) at 92 et seq.[Rens]. See also G.M. McCabe, Regulation of the Telephone Industry in Canada: The Formative Years (Unpublished thesis submitted to the Faculty of Graduate Studies and Research, McGill University, August 1985) at 50-54 [McCabe]. 16 SC 1897, c 67, s 3. 17 McCabe, supra note 15 at 54-59. See also Rens, supra note 15 at 92-93, who describes the government’s attempts at regulation as “a complete fiasco.” 18 SC 1902 c 41, s 3(3). Other amendments gave Cabinet the authority to both increase and reduce rates instead of merely responding to requests for increases: Ibid, s 3(1).
6 Ryan: ‘Cabinet Appeals’ and the CRTC outcome of that debate was a decision to transfer Cabinet responsibilities over railways (exercised by Cabinet’s Railway Committee) to a new Board of Railway Commissioners, which would operate more independently of Cabinet than the Railway Committee. Under the Railway Act, 1903, the Board assumed all the powers, authorities, and duties of the Committee.19 As if to underline its independence, the Board was made a “Court of Record.”20 Despite the wide scope of its mandate and the breadth of the Board’s powers, Cabinet was to retain the power of final decision. The Act of 1903 provided that decisions of the Board would be subject not only to appeal to the courts on questions of law and jurisdiction,21 but also to revision by Cabinet. The Act of 1903 provided that
The Governor in Council may, at any time, in his discretion, either upon petition of any party, 2014 CanLIIDocs 327 person or company interested, or of his own motion, and without any petition or application, vary, change or rescind any order, decision, rule or regulation of the Board,....22
During the debate in the House on the proposed legislation, the Minister of Railways and Canals said that “[t]he Governor in Council ... would have complete and absolute jurisdiction to revise any order or decision of the Board.” 23
Within a few years of the establishment of the Board, it was decided that the Board should also assume the Railway Committee’s responsibility for regulation of telegraph and telephone rates.24 As a consequence, the Board’s telecom decisions, too, became subject to Cabinet review. The provision for Cabinet review was carried forward through subsequent iterations of the Railway Act and successor legislation largely unaltered until it was replaced by section 12 of the Telecommunications Act in 1993. Section 12(1) provides as follows:
12. (1) Within one year after a decision by the Commission, the Governor in Council may, on petition in writing presented to the Governor in Council within ninety days after the decision, or on the Governor in Council’s own motion, by order, vary or rescind the decision or refer it back to the Commission for reconsideration of all or a portion of it.
The current provision differs from its predecessors in some significant respects:
19 SC 1903, c 58, s 8(2) [RWA 1903]. Railway regulation and telecommunications regulation remained in the hands of the Board until 1938 when the Board’s name was changed to the Board of Transport Commissioners [BTC]. The latter was succeeded in 1967 by the Canadian Transport Commission [CTC]. In 1976, authority to regulate telegraph and telephone companies was transferred to the CRTC. 20 RWA 1903, supra note 19, s 8(1). 21 Ibid, s 44(3). 22 Ibid, s 44(2). 23 Debates of the House of Commons (20 March 1903) at 259 [Hansard]. 24 See SC1906, c 42, s30(1) and SC1908, c61,s4. See alsoSC1906, c61, s2(RWA 1903, supra note 19, made applicable to Bell Telephone Company of Canada).
7 Ryan: ‘Cabinet Appeals’ and the CRTC
First, as already noted, the exercise of the Cabinet review power is now subject to some procedural safeguards;25
Second, an express power to refer decisions back to the CRTC for reconsideration was added;26
Finally, a time constraint was imposed on Cabinet’s authority to intervene (which had previously been open-ended). Cabinet is now required to act within one year of the relevant CRTC decision.27
The power of review extends to all CRTC decisions, with only one exception. When the
Telecommunications Act was amended in 2005 to give the CRTC the authority to impose 2014 CanLIIDocs 327 monetary penalties for violation of its rules regulating unsolicited communications, it was provided that the CRTC’s decisions on such matters would not be subject to Cabinet review.28
The Telecommunications Act also conferred on Cabinet a power to issue binding directions to the CRTC on broad policy matters with respect to the objectives of Canadian telecommunications policy set out in section 7 of the Act.29 The expectation of many who advocated the introduction of a power of direction was that government would use the power to provide ex ante policy guidance to the CRTC and thereby eliminate or reduce reliance on ex post Cabinet reviews. However, Cabinet has exercised the direction power only once in the twenty years since its introduction.30 In view of some of the discussion that follows, it is noteworthy that proposed directions are subject to Parliamentary oversight. In 1979, the Lambert Commission advocated that government should be empowered to issue directions to independent agencies on broad policy matters in the manner now authorized by the Telecommunications Act, but also expressed concern about the potential for undue political
25 See Introduction. In addition to the provisions mentioned, see TA, supra note 1, s 13, which provides that, before making a recommendation to Cabinet concerning disposition of a petition made under s 12, the Minister of Industry must consult with provincial governments. 26 TA, supra note 1, s 12(5). Section 12(7) provides that, where the Commission confirms or varies a decision referred back, or does not complete its reconsideration of the decision before any date specified under paragraph (5), Cabinet may vary or rescind the decision within ninety days after the confirmation or variation of the decision or the specified date, as the case may be. 27 Ibid, s 12(1). 28 Ibid, s 72.15. 29 Ibid, s 8. Before making a recommendation to Cabinet under s 8, the Minister must consult with provincial governments: ibid, s 13. 30 See Order issuing a Direction to the CRTC on Implementing the Canadian Telecommunications Policy Objectives, PC 2006-1534 (14 December 2006), 140:26 C Gaz II 2344, online: PCO < http://www. pco- bcp.gc.ca>.
8 Ryan: ‘Cabinet Appeals’ and the CRTC influence being brought to bear on the regulatory process.31 To address those concerns, the Lambert Commission recommended that proposed directions be subject to procedural safeguards, and the commission’s recommendations are reflected in the Telecommunications Act: proposed directions must be published in the Canada Gazette and laid before each House of Parliament for at least 40 days; the Minister must consult the Commission before taking these steps and again when the order is in definitive form before it is finalized; a reasonable opportunity must be given to interested persons to make representations to the Minister with respect to the proposed order; and after an order is made, the Minister must have it laid before each House of Parliament on any of the first fifteen days on which that House is sitting.32 2014 CanLIIDocs 327
B. Broadcasting Act
The Broadcasting Act gives the CRTC a broad mandate to “regulate and supervise all aspects of the Canadian broadcasting system with a view to implementing the broadcasting policy set out in subsection 3(1)” of the Act. Section 3(1) identifies a number of specific policies. For example, section 3(1)(d)(i) states that “the Canadian broadcasting system should serve to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada….”. The CRTC is given extensive licensing and regulation-making powers to allow it to further these policies.33
Prior to 1968, broadcasting licences were issued by the Minister of Transport, subject to the approval of the Governor in Council.34 The Minister was advised in respect of licensing matters by the Board of Broadcast Governors [BBG],35 which had been created in 1958 to regulate television and radio broadcasting.36 When the BBG was replaced in 1968 by the Canadian Radio-Television Commission37 (which in 1976 became the Canadian Radio- television and Telecommunications Commission38), the CRTC assumed the licensing authority which had up until then been exercised by the Minister and Cabinet.
31 Supra note 3 at 317. 32 TA, supra note 1, s 10. 33 BA, supra note 2, ss 3(1), 5(1), 9 and 10. 34 Broadcasting Act, SC 1958, c22, s 12(2) [BA 1958]. 35 Ibid, s 12(1). 36 Ibid, s 10. 37 Broadcasting Act,SC1968,c25 [BA 1968]. 38 Canadian Radio-television and Telecommunications Commission Act, SC 1975-76-77, c. 49 [now RSC 1985, c C-22, as am.]
9 Ryan: ‘Cabinet Appeals’ and the CRTC
While it was intended that the CRTC would operate more independently than the BBG, that independence, like that of the Board of Railway Commissioners, would have its limits. As the Secretary of State (Judy LaMarsh) explained on second reading of the Bill that became the Broadcasting Act, 1968:
Although it has happened very seldom in the past that the recommendations of the [BBG] have been rejected by the Governor in Council, the important thing to remember is that there have been occasions in the past when such recommendations were deemed to be contrary to the public interest, and it is certainly not without possibility that such a situation could occur again in the future.39
Section 23(1) of the Act provided as follows:
23. (1) The issue, amendment or renewal by the Commission of any broadcasting licence may be set aside, or may be referred back to the Commission for reconsideration and hearing by the
Commission, by order of the Governor in Council made within sixty days after the issue, 2014 CanLIIDocs 327 amendment or renewal ....
Cabinet was also given the power to set aside the issue, amendment or renewal a licence that had been referred back to the Commission and confirmed.40
Section 23(1) was replaced in 1991 by section 28(1) of the Broadcasting Act, which remains in force. Section 28(1) provides as follows:
28. (1) Where the Commission makes a decision to issue, amend or renew a licence, the Governor in Council may, within ninety days after the date of the decision, on petition in writing of any person received within forty-five days after that date or on the Governor in Council’s own motion, by order, set aside the decision or refer the decision back to the Commission for reconsideration and hearing of the matter by the Commission, if the Governor in Council is satisfied that the decision derogates from the attainment of the objectives of the broadcasting policy set out in subsection 3(1).
There are some significant differences between section 28(1) and its counterpart in section 12 of the Telecommunications Act. While Cabinet’s powers under section 12 extend to virtually all decisions of the CRTC under the Telecommunications Act, section 28 limits Cabinet’s authority to intervene in broadcasting matters in three respects. First, section 28(1) applies only to licensing decisions: Cabinet has no power to interfere with other Commission decisions, such as the making of regulations.41 Second, the power to review decisions “to issue, amend or review” licences does not include the power to review decisions to refuse to grant a licence. Finally, under the Telecommunications Act, Cabinet has the power to vary or rescind or refer a decision back to the Commission for reconsideration, but under the Broadcasting Act, Cabinet’s options are more limited; it may set aside a decision or refer a
39 Hansard, supra note 23 (November 1, 1967) at 3753, cited in Kaufman, supra note 3 at 846. 40 BA, supra note 2, s 23(4). 41 The BA empowers the Commission to make regulations in respect of a wide range of matters “in furtherance of its objects:” BA, supra note 2, s 10(1).
10 Ryan: ‘Cabinet Appeals’ and the CRTC decision back to the Commission for reconsideration and hearing, but it may not vary a decision.
The Broadcasting Act includes a power of direction, but, like the power of review, it is significantly narrower than the corresponding provision in the Telecommunications Act. Section 26(1) of the Broadcasting Act provides that
26(1). The Governor in Council may, by order, issue directions to the Commission (a) respecting the maximum number of channels or frequencies for the use of which licences may be issued within a geographical area designated in the order; (b) respecting the reservation of channels or frequencies for the use of the Corporation or for any special purpose designated in the order;
(c) respecting the classes of applicants to whom licences may not be issued or to whom amendments or 2014 CanLIIDocs 327 renewals thereof may not be granted; and (d) prescribing the circumstances in which the Commission may issue licences to applicants that are agents of a province and are otherwise ineligible to hold a licence, and the conditions on which those licences may be issued.
Procedures similar to those applicable to directions made under the Telecommunications Act apply: draft directions must be published in the Canada Gazette, laid before Parliament, and the CRTC must be consulted.42
II. Frequency of Cabinet Interventions
In order to gauge the frequency of Cabinet interventions in CRTC decision-making, we compiled a list of OiCs made by Cabinet pursuant to section 12 of the Telecommunications Act and predecessor legislation since 1906 -- the year that the Board of Railway Commissioners assumed responsibility for the regulation of telecommunications from Cabinet (see Appendix A). We also compiled a similar list of OiCs made pursuant to section 28(1) of the Broadcasting Act and predecessor legislation since 1968, the year that the Canadian Radio-Television Commission was established as the broadcasting licensing authority (see Appendix B). We then selected the forty-five year period since 1968 -- which includes the final nine years during which the CTC was the telecom regulator before its responsibilities in that area were transferred to the CRTC -- for examination. The results are presented in Table 1. We found that:
From 1968 to 2012, Cabinet reviewed a total of 65 CTC and CRTC telecom decisions. Nineteen of the decisions were reviewed of Cabinet’s own motion and
42 BA, supra note 2, s 26(2)-(4).
11 Ryan: ‘Cabinet Appeals’ and the CRTC
the remainder in response to petitions.43 Cabinet decided to vary, rescind or refer back 26 decisions.
During the same period, Cabinet reviewed a total of 114 CRTC broadcasting decisions. Eight of these were reviewed of Cabinet’s own motion.44 Cabinet decided to set aside four and refer back 18 decisions (a total of 22).
The total number of decisions reviewed between 1968 and 2012 therefore comes to 179 and the total number of decision varied, rescinded/set aside or referred back to 48. These are not large numbers when compared to the number of decisions that the Commission issues each year. In 2012 alone, the CRTC issued in excess of 700 “regulatory policies,”
“decisions,” “orders” and “notices of consultation.” The comparatively small number of 2014 CanLIIDocs 327 instances where Cabinet has reviewed a decision, and the even smaller number of cases where Cabinet has varied, rescinded/set aside or referred back a decision, might seem to suggest that the role of Cabinet in CRTC decision-making is marginal. This would be too hasty a judgment. Many of the 700 or so measures adopted in 2012 addressed purely administrative matters, such as the approval of changes to pages in telecom carriers’ tariffs or minor amendments to broadcasting licences. But other decisions addressed significant issues of public policy. It is of course, this subset of decisions that is most likely to attract Cabinet review. A proper understanding of the importance of Cabinet’s role in the CRTC’s decision- making requires a closer examination of the decisions themselves, which we provide in Section IV.
We also examined the propensity of different governments to intervene during the period 1968-2012. During the seven-year period from 2006 to 2012, the present government led by Prime Minister Stephen Harper varied, rescinded or referred back five telecom decisions (and publicly intervened in a sixth case45). During the same period, the Harper government also
43 To the 10 OiCs expressly identified as having been decided by Cabinet of its own motion, we have added nine OiCs made in circumstances that indicate that Cabinet was acting of its own motion. The 19 relevant decisions are marked with an asterisk in Appendix A. 44 In these eight cases, there is no evidence that a petition was filed. The relevant decisions are marked with an asterisk in Appendix B. 45 In 2011, the CRTC decided to permit telephone companies to introduce usage-based billing of Internet service providers’ use of their facilities. Negative public reaction prompted the CRTC to initiate a review of its decision, but this was done under the cloud of a warning by the Minister of Industry that, "regardless of the outcome of the CRTC review, under a Conservative government, this ruling will not be implemented." The CRTC subsequently reversed its decision. See Billing practices for wholesale residential high-speed access services, Telecom Regulatory Policy CRTC 2011-703 (15 November 2011), online: CRTC
The active engagement in CRTC decision-making which has been a feature of the Harper government is not without precedent. The second Trudeau government, which held office from early 1980 to mid-1984, intervened in seven telecom and six broadcasting cases. (However, five of the telecom interventions and four of the broadcasting interventions were linked to a single issue -- implementation of the government’s 6+5 anti-inflation 2014 CanLIIDocs 327 programme.46) The Mulroney government, which was in office during the nine-year period from late 1984 to mid-1993, intervened in eight telecom cases and six broadcasting cases. (However, six of the telecom decisions related to a dispute between Call-Net and the CRTC over the former’s attempts to launch a discounted public long distance telephone service.47)
Footnote continued from previous page http://www.theglobeandmail.com/technology/tech-news/politics/tories-side-with-consumers-in-clash-over- internet-billing/article565474/. The case is critically reviewed in Janisch 2012, supra note 3. 46 These cases are discussed below. 47 These cases are also discussed below.
13 Ryan: ‘Cabinet Appeals’ and the CRTC
Table 1 - Number of Decisions by the Governor in Council reviewing and denying petitions to review CTC and CRTC Telecommunications and Broadcasting Decisions, by year, 1968-2012 l r 8 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 a t a o 6 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 1 1 t o e 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 T Y
d m s e o n k c d 48 o c e i
n 2 1 1 5 1 2 3 1 1 1 1 1 1 2 1 2
a 26 l s i i e b c
c s T e d e e r D
r
, . f r d d o e
e f a . i 49 50 e o r o 1 1 5 1 1 3 1 1 3 1 1 1 2 22 r r a N v B l r l k e e n r t i ’ b n a t l p r v r 2014 CanLIIDocs 327 o u a
Trudeau Trudeau Mulroney m Chrétien Harper C a T G M C m
o y s c b e e 2 4 1 3 5 1 3 3 1 2 2 2 2 1 3 1 1 3 3 1 1 3 1 3 3 3 3 3 1 65 l s t d e e a e n T r C i
e f b . d o a i
d . s C a o n o o
N 2 8 1 1 1 2 5 5 3 3 10 4 2 2 1 3 4 5 9 10 1 2 4 2 5 2 5 2 2 3 1 1 1 2 114 r c B l r
8 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 a a t o 6 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 1 1 1 e t o 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 Y 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 T
Source: See Appendices A and B
48 Decisions of the Harper government. 49 Decision of the Mulroney government. 50 Decision of the Campbell government.
14 Cabinet appeals and the CRTC [as posted on SSRN on 2014-04-01].docx Ryan: ‘Cabinet Appeals’ and the CRTC
III. Threshold for Review
While Cabinet has never attempted to define in a conclusive fashion the principles it will apply in deciding whether or not to intervene in a CRTC decision, the statement it made in a 1961 telecom case appears to remain a generally reliable guide to practice. In that case, Cabinet said that “in appeals to the Governor-in-Council from orders and judgments of the Board of Transport Commissioners, it is the practice not to interfere with such orders and judgments unless it is evident that the Board has proceed upon some wrong principle, or that the Board has otherwise been subject to error; where the matters at issue, …, are questions of fact depending 2014 CanLIIDocs 327 upon their solution on evidence deduced before the Board, or otherwise matters in respect of which the Board is particularly fitted to determine, it is the practice, except as aforesaid, not to interfere with the findings of the Board.”51
Cabinet has also said that it will not intervene where a petition raises questions of jurisdiction and of law that may be appealed to the courts.52
The Chrétien government adopted a deferential approach that has not always characterized the behaviour of its successors or predecessors. Explaining Cabinet decisions denying petitions for variance of recent telecom decisions, the Minister of Industry (John Manley) emphasized that “[w]e must leave the CRTC to regulate. When it comes to intervening in CRTC decisions, we must set the bar high. If we don’t, we undermine the independent regulatory authority. These decisions involve matters best left to the regulator.”53 In a 2003 press statement that
51 PC 1961-638 (28 April 1968), 83 Cdn Railway and Transport Cases 112. See also PC 1920-1560 (8 July 1920), Library and Archives Canada, MIKAN No. 1383092, denying a petition by the City of Toronto to rescind the BTC’s decision in In re Bell Telephone Co. Increased Tolls (1919), 25 Cdn Railway Cases 1, which is to similar effect. 52 PC 1918-2518 (15 October 1915), cited in R. Kerr, The Board of Transport Commissioners for Canada: a review of its constitution, jurisdiction and practice (Ottawa: Queen’s Printer, 1957) at 7-8 [Kerr]. 53 Speaking Notes for the Honourable John Manley, Minister of Industry, CANARIE/NET 2000, (28 June 2000) at para 12, cited in the Canadian Cable Telecommunications Association’s response dated 7 November 2005 to the petitions to the Governor in Council requesting a review of Regulatory framework for voice communication services using Internet Protocol, Telecom Decision CRTC 2005-28 (May 12, 2005), online: CRTC
15 Ryan: ‘Cabinet Appeals’ and the CRTC accompanied a decision denying another petition, his successor (Allan Rock) said that Cabinet “will rarely vary a decision of the Commission, except in extraordinary circumstances.”54
The rationale for limiting Cabinet involvement in regulatory decision-making is plain. One of the purposes of establishing a separate body to regulate telecom and broadcasting was to free government of the responsibility for day-to-day administration of these two sectors. In addition, as Cabinet noted in one early railway case, there is the question of expertise: “The members of the Board, in addition to their own long and varied experience, have available for the purpose of
their investigations a permanent staff of expert officers and a complete system of records, which 2014 CanLIIDocs 327 render that tribunal peculiarly qualified to deal with the intricate and highly technical subjects …”.55
Interventions have sometimes been justified on the basis that a decision raises an issue outside the purview of the CRTC. In 1977, the CRTC declined to approve an agreement between Telesat Canada (a provider of satellite services) and the telephone companies that comprised the Trans-Canada Telephone System [TCTS] providing terrestrial services. One of the effects of the agreement would have been to transform Telesat Canada into a carrier’s carrier providing services solely to the telephone companies. The CRTC concluded that such an arrangement was not in the public interest.56 Cabinet reversed the decision.57 In a press release issued in conjunction with Cabinet’s decision, the Minister of Communications (Jeanne Sauvé) justified Cabinet’s intervention on the basis that
the range of factors affecting the policy issues is far wider than that which the CRTC could reasonably be expected to consider. Many of these issues lie well beyond the purview of the Commission. Because adequate statutory mechanisms through which the government could have provided clear policy guidance to the CRTC are not yet available, the Commission was unable to accord these policy matters due consideration. The government’s conclusions have accordingly reflected its view of these
54 Government of Canada, News Release (26 March 2003), cited in H. Janisch, "Firing on All Cylinders: Responsibilities in Canadian Telecommunications Regulation", attachment to the submission of TELUS Communications Inc. to the Telecommunications Policy Review (15 August 2005) at para 32. 55 PC 1933-349 (25 February 1933), cited in Kerr, supra note 52 at 8. 56 Telesat Canada, Proposed Agreement with Trans-Canada Telephone System, Telecom Decision CRTC 77-10 (24 August 1977), 111:36 C Gaz I 4838, online: LAC < http://www.collectionscanada.gc.ca > [Telesat-TCTS]. 57 PC 1977-3152 (3 November 1977) [PC 1977-3152].
16 Ryan: ‘Cabinet Appeals’ and the CRTC
broader issues while taking full account of the views of the CRTC and all interested parties who either participated in the hearing or have since made representations to the Governor in Council.58
IV. Some Case Studies
The data presented in Table 1 provides a high-level picture of Cabinet engagement in CRTC decision-making, but an understanding of the complexity of Cabinet’s relationship to the CRTC requires a closer examination of the cases. In the following section, key cases are grouped according to the theme or subject of Cabinet’s interventions. 2014 CanLIIDocs 327 A. Telecommunications Competition Decisions
Cabinet has frequently exercised its review power to promote competition in the telecommunications sector. This has sometimes translated into endorsement of pro-competitive decisions by the CRTC, but in other cases Cabinet has actively intervened to set the direction and pace of change. The CRTC initiated the move toward competition in telecommunications markets in 1979 by approving an application by CNCP Telecommunications for an order requiring Bell Canada to permit CNCP to interconnect its national telecommunications network with Bell Canada’s local network so that CNCP could provide a competing private line telephone service.59 When Bell Canada petitioned Cabinet for rescission of the decision, Cabinet denied the petition.60 The Cabinet decision did not provide reasons for the decision (as was customary before 1993), but in a separate news release the Minister of Communications (David MacDonald) said that the CRTC decision “is clearly consistent with the priorities of the new
58 Information Services, Department of Communications, News Release (3 November 1977) at 2. Given the scope of the CRTC’s mandate, the explanation that Cabinet intervention was justified because the issues raised were outside the purview of the CRTC seems dubious. See P. Kenniff, “Political Control of Independent Regulatory Agencies,” in P. Garant, ed, Aspects of Anglo-Canadian and Quebec Administrative Law, Travaux du Laboratoire de Recherche sur la Justice Administrative (No 3)(Québec: Faculté du Droit, Université Laval, March 1979) at 77, who comments that “[t]he manner in which this policy was communicated to the parties before the C.R.T.C. and to the general public [ie, by News Release] would indicate that the Government was perhaps more concerned with salvaging the C.R.T.C.’s image (and its own) than with giving a policy direction for future guidance.” 59 CNCP Telecommunications: Interconnection with Bell Canada, Telecom Decision CRTC 79-11 (17 May 1979), 113:Supp C Gaz I 1, online: LAC < http.www.collectionscanada.gc.ca >. 60 PC 1979-2036 (26 July 1979).
17 Ryan: ‘Cabinet Appeals’ and the CRTC government in encouraging competition wherever feasible within Canadian industry, particularly in those sectors with a high technological growth potential.”61
A few months later, the CRTC issued another controversial pro-competitive decision by relaxing restrictions in Bell Canada’s tariffs that limited customers’ freedom to attach their own equipment to its network.62 Bell Canada and the Government of Ontario both petitioned Cabinet to rescind the decision. This petition too was denied.63 In a joint statement, the Minister of Communications (Francis Fox) and the Minister of Industry Trade and Commerce (Herb Gray) said that Cabinet had considered the two main concerns expressed by the petitioners -- 2014 CanLIIDocs 327 concerning the technical standards to govern attachments and the impact of the CRTC decision on Canadian industry and trade -- but indicated that those concerns would be addressed in other ways.64
When the CRTC liberalized the provision of public long distance telephone services in 1992,65 the incumbent telephone companies petitioned Cabinet to vary the decision to give them freedom to compete more freely with new entrants.66 In a move that can be interpreted as an endorsement of the CRTC’s initiative, Cabinet did not respond publicly to the petition and the petition was subsequently withdrawn.67
The CRTC and Cabinet took opposing views, however, when Call-Net Telecommunications Ltd. introduced a discount long distance telephone service. The Call-Net service permitted groups of customers to shares private lines leased from the telephone companies by Call-Net as a way of avoiding telephone company long-distance charges, but the service was seen by the
61 Information Services, Department of Communications, News Release (1 August 1979) at 2. 62 Interim Requirements regarding the Attachment of Subscriber Provided Terminal Services, Telecom Decision CRTC 80-13 (5 August 1980), 114:33 C Gaz I 4936, online: LAC < http://www.collectionscanada.gc.ca >. 63 PC 1981-1223 (7 May 1981). 64 Cited in Restrictive Trade Practices Commission, Telecommunications in Canada: Phase I - Interconnection (Ottawa: Consumer and Corporate Affairs Canada, 1981) at 164-5. 65 Competition in the Provision of Public Long Distance Voice Telephone Services and Related Resale and Sharing Issues, Telecom Decision CRTC 92-12 (12 June 1992), online: CRTC
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CRTC as incompatible with its policy prohibiting competition in the provision of public long distance telephone services. The CRTC directed carriers to cease supplying lines to Call-Net.68 Call-Net asked the CRTC to review and vary its decision. The CRTC declined to do so, but stayed implementation of its decision for 30 days to allow Call-Net an opportunity to arrange its affairs in a way that complied with its policy.69 Call-Net petitioned Cabinet to vary the decision. In an unusual sequence of decisions, Cabinet granted Call-Net a 30 day extension of the CRTC stay,70 which it subsequently extended to 240 days71 and finally to 330 days.72 In the decision granting the third extension, Cabinet rejected Call-Net’s petition to vary the CRTC decision. 2014 CanLIIDocs 327 When the Cabinet stay elapsed, Bell proceeded to disconnect services to Call-Net. Call-Net thereupon applied to the CRTC for an order requiring Bell Canada not to disconnect Call-Net’s facilities, which was denied,73 and to the Federal Court of Appeal for leave to appeal the CRTC’s decision, which was granted.74 When the application for leave was successful, Cabinet stayed implementation of the disconnection decision until final disposition of the Call-Net appeal.75
Although the Call-Net appeal was ultimately unsuccessful,76 while the appeals proceedings were still pending, the CRTC announced its intention to initiate a proceeding to consider liberalizing its policies concerning resale and sharing of private lines.77 Cabinet thereupon made
68 Bell Canada - Application to deny the resale by Call-Net Telecommunications Ltd of services and facilities provided by Bell Canada and CNCP Telecommunications, Telecom Decision CRTC 87-5 (22 May 1987), online: CRTC
19 Ryan: ‘Cabinet Appeals’ and the CRTC a fifth order -- this time extending its stay of the CRTC disconnection decision until thirty days after the release of the CRTC’s final decision in the proposed resale and sharing proceeding.78 When the CRTC decided to liberalize resale and sharing and directed the telephone companies to file tariffs implementing the decision within 90 days. 79 Cabinet then made a sixth and final order by extending the stay that had been granted in its fifth order until 90 days after the release of the CRTC decision, thereby ensuring that Call-Net could remain operative until the new tariffs took effect.80
Cabinet overruled the CRTC on a second competition issue in 2006. The Commission had 2014 CanLIIDocs 327 ruled that the telephone companies’ local VoIP services are a species of local exchange telephone service and should be regulated as such. It accordingly denied requests to forbear from regulation. 81 In response to petitions, Cabinet ordered the CRTC to reconsider its decision, citing in particular section 7 of the Telecommunications Act specifying that it is an objective of Canadian telecommunications policy to rely on market forces to the maximum extent feasible.82 In response, the CRTC eased some of its rules applicable to VoIP, but otherwise affirmed its original ruling that local VoIP services were close substitutes for local exchange services and, given the incumbent telephone companies’ dominance in the local exchange services market, that it would not be appropriate to forbear from regulation.83 Cabinet was not satisfied with this outcome. Schultz comments that
The consequences of the CRTC’s response for both its decision and its relationship with political authorities, especially [Minister of Industry Ivan] Bernier, were dramatic and immediate. Bernier viewed both the confirmation of its initial decision and its total disregard of the reasons Cabinet had sent back the decision for reconsideration as arrogant and a wilful dismissal of political policy direction. Convinced that this was evidence that the CRTC was currently out of control and “did not get it”,
78 Order Varying Telecom Decision CRTC 88-9, PC 1989-1238 (22 June 1989), 123:14 C Gaz II 3285, online: LAC < http://www.collectionscanada.gc.ca >. 79 Resale and Sharing of Private-Line Services, Telecom Decision CRTC 90-3 (1 March 1990), online: CRTC
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Bernier easily persuade his cabinet colleagues that a Liberal-appointed commission was not sympathetic to the “new” government’s policy direction in telecommunications.84
Acting of its own motion, Cabinet varied the CRTC decision by ordering the CRTC to refrain from regulating telephone company local VoIP services provided through high-speed connections.85
The impact of the CRTC’s perceived intransigence had another consequence. In a contemporaneous proceeding, the CRTC had prescribed a test to be used in determining when 86 CRTC would forbear from regulation of local telephone markets. Some carriers petitioned 2014 CanLIIDocs 327 Cabinet for a change to the test adopted by the Commission, arguing that it was too restrictive. Cabinet agreed. Only seven months after reversing the CRTC’s local VoIP decision, Cabinet also varied the CRTC’s local forbearance decision.87 The CRTC and Cabinet decisions are complex, but a flavour of the difference between the CRTC-mandated test and the modified test adopted by Cabinet is reflected in their respective approaches to two key issues. The first was the use of market share as a trigger for deciding when forbearance is appropriate. The CRTC had determined that forbearance would be granted, inter alia, if the incumbent local telephone company lost 25% market share to rivals. Cabinet rejected the use of a market share loss test and decided that the presence in an area of two competitors (wireline or wireless) would be sufficient to trigger forbearance so long as those competitors were capable of serving 75% of the relevant area, irrespective of the extent of the incumbent’s loss of market share.
A second point on which the CRTC and Cabinet differed was on the size of the area to be used to determine whether the first criterion was met. The CRTC determined that the market share loss should be measured across a “local forbearance region” [LFR] corresponding to
84 Richard Schultz, “Telecommunications Policy: What a Difference a Minster Can make” in Allan M. Maslove ed, How Ottawa Spends 2008-2009: A More Orderly Federalism? (Montreal and Kingston: McGill-Queen’s University Press, 2008) at 147. 85 Order Varying Telecom Decision CRTC 2005-28, PC 2006-1314 (11 September 2006), 140:24 C Gaz II 1941, online: PCO < http://www. pco-bcp.gc.ca>. Cabinet said that local VoIP services that use high-speed internet access and special handsets are different to conventional local exchange services, that it would be consistent with the telecommunications policy objectives to refrain from regulating the former type of service, and that forbearance from regulation would stimulate competition and innovation. 86 Forbearance from the regulation of local exchange services, Telecom Decision CRTC 2006-15 (6 April 2006), online: CRTC
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Statistic Canada’s census metropolitan area in the case of urban areas and one or more economic regions (also a unit devised by Statistics Canada) in other cases. However, Cabinet decided that “LFRs are not the appropriate geographic component of a relevant market, as they are too vast to retain administrative practicality and do not reflect a social and economic community of interest.”88 Cabinet decided that the relevant market was the much smaller local exchange.89 The combined effect of these two changes was to significantly lower the threshold for forbearance. Cabinet also decided to speed the pace of forbearance by including in its decision a stipulation that applications for forbearance relating to local exchanges located in eleven major urban areas 2014 CanLIIDocs 327 should be given priority by the Commission.90
B. The6+5Cases
In 1982, the federal government introduced an “Administered Prices Program” to control inflation. Under the program, increases in the prices of various services under federal control were to be limited to 6% in the first year of the program and 5% in the second year unless it could be demonstrated that “exceptional circumstances” existed. Implementation of the 6+5 program in the telecommunications sector was quite straightforward. Exercising its powers under section 12, Cabinet, acting of its own motion, ordered that recent CRTC decisions approving rate increases for five telecommunications carriers under its jurisdiction be varied to substitute reduced increases that conformed with the limits prescribed by the 6+5 program.91 Implementation of the policy in the broadcasting sector proved more problematic and the experience highlights the difference between Cabinet’s authority under the Telecommunications Act and its more circumscribed authority under the Broadcasting Act. At the time, rates charged by cable companies were generally subject to caps set by the CRTC as a condition of licence.
88 Ibid at 410. 89 Ibid at 411. 90 Ibid at 413. 91 Order Varying Telecom Decision 81-15, PC 1982-2350 (5 August 1982), 116:18 C Gaz II 2998 (varying rates of Bell Canada); Order Varying Telecom Decision 81-13, PC 1982-2558 (18 August 1982), 116:17 C Gaz II 2882 (varying rates of Telesat Canada); Order Varying Telecom Decision 81-4, PC 1982-2579 (18 August 1982), 116:17 C Gaz II 2880 (varying rates of NorthwesTel Inc); Order Varying Telecom Decision 81-20, PC 1982-2580 (18 August 1982), 116:17 C Gaz II 2885 (varying rates of Terra Nova Telecommunications); Order Varying Telecom Decision 81-26, PC 1982-2581 (18 August 1982), 116:17 C Gaz II 2881 (varying rates of CNCP Telecommunications), all online: LAC < http://www.collectionscanada.gc.ca >.
22 Ryan: ‘Cabinet Appeals’ and the CRTC
Because the Broadcasting Act does not confer on Cabinet a power to vary broadcasting decisions, but only to set them aside or refer them back for reconsideration, Cabinet could not intervene in the same direct fashion to control increases in broadcasters’ rates. This presented Cabinet with a dilemma when, in 1983, during the second year of the 6+5 program, the CRTC allowed two cable companies to increases their rates by more than the percentages indicated by the 6+5 policy.92 The CRTC made no reference to the 6+5 program in its decisions and made no attempt to demonstrate the existence of the “exceptional circumstances” that would have justified a departure from the 6+5 caps on increases. Cabinet, exercising its authority under the 2014 CanLIIDocs 327 Broadcasting Act, referred the two decisions back to the CRTC, citing the policy, expressing the opinion that it was material to the two decisions to consider whether an exception to the policy was justified, and concluding that the CRTC had “failed to identify and consider or failed to identify and consider adequately the exceptional circumstances that would justify the increase.”93 Rather than amend its orders accordingly, the CRTC issued a Public Notice in which it indicated that it would reconsider the decisions and invited public comment. The Commission also indicated that the rate increases would remain in effect in the meantime.94 When the CRTC rendered its decision on the referrals-back some six months later, it declined to amend its original decisions. It concluded that it was in the public interest to allow the increases “to ensure quality of service to the subscribers of the undertakings.” The Commission made no finding concerning whether or not “exceptional circumstances” existed. Indeed, it did not even advert to the issue.95
Two weeks after Cabinet referred the two decisions back to the CRTC, the CRTC approved amendments to two other broadcasting licences, again authorizing increases in rates in excess of
92 Câblevision Nationale Ltée, Decision CRTC 83-534 (7 July 1983), 117:21 C Gaz I 6420, and Câblevision Nationale Ltée, Decision CRTC 83-535 (7 July 1983), 117:21 C Gaz I 6421, both online: LAC < http://www.collectionscanada.gc.ca >. 93 Order Referring back to the CRTC Certain Decisions Amending Broadcasting Licences of Câblevision Nationale Ltée, PC 1983-2665 (24 August 1983), 117:17 C Gaz II 3369, and Order Referring back to the CRTC a Decision Amending the Broadcasting Licence of Télécâble Vidéotron Ltée, PC 1983-2666 (24 August 1983), 117:17 C Gaz II 3370, both online: JUSTICE
23 Ryan: ‘Cabinet Appeals’ and the CRTC
6+5.96 The CRTC’s decision on the first two referrals-back had not yet been delivered, but the fact that the CRTC’s had proceeded to approve increases in two new cases appears to have convinced Cabinet that referring the new decisions back was not likely to secure the result Cabinet sought. Rather than refer the two new decisions back, Cabinet set them aside, stating simply that it was in the public interest to do so.97
C. Other “Referral Back” Cases
The 6+5 Cases demonstrate how a resolute CRTC, protective of its independence and 2014 CanLIIDocs 327 confident in its policies, can in some cases prevail over the will of Cabinet. These are not isolated examples. Cabinet’s track record on referrals back can be described as mixed, at best. There have been 18 referrals back of broadcasting decisions. A simple tally indicates that ten of the referrals back resulted, as happened in the 6+5 Cases, in a confirmation of the original decision by the CRTC without substantive change.98 In two additional cases, the issues referred back became moot before a new CRTC decision was rendered.99 In only six cases did the CRTC change its original decision on reconsideration.100
96 MSA Cablevision Ltd, Decision CRTC 83-763 (6 September 1983), 117:38 C Gaz I 8360 and Western Cablevision Ltd, Decision CRTC 83-764 (6 September 1983), 117:38 C Gaz I 8361, both online: LAC < http://www.collectionscanada.gc.ca >. 97 Order Setting Aside Amendments to the Broadcasting Licence of MSA Cablevision Ltd. Issued by the CRTC, PC 1983-3238 (18 October 1983), 117:17 C Gaz II 4056, and Order Setting Aside Amendments to the Broadcasting Licence of Western Cablevision Limited Issued by the CRTC, PC 1983-3239 (18 October 1983), 117:17 C Gaz II 4057, both online: JUSTICE
24 Ryan: ‘Cabinet Appeals’ and the CRTC
The Manitoba Cable Cases101 provide another good example of how referrals back have not always played out in the manner Cabinet intended. In 1976, the CRTC approved two licences for the operation of cable television systems in Manitoba. In accordance with its ownership policy, the CRTC imposed a condition in both licences requiring that the licensees must own the infrastructure critical to delivery of their services -- the “local head-end” used to receive signals for distribution, the amplifiers used to modulate the signals, and the “drops” connecting customers to the distribution systems. The government of Manitoba and The Manitoba Telephone System [MTS], the monopoly-supplier of telephone service which it owned, 2014 CanLIIDocs 327 petitioned the Governor in Council to set aside the decisions, arguing that the local telephone company should own the relevant infrastructure. At the time, there was still uncertainty about the extent of federal jurisdiction over cable programming and, against that background, the Canadian and Manitoba governments reached an agreement under which the federal government accepted the principle that telephone company facilities could be used by broadcasters, notwithstanding the CRTC’s established ownership policy, and the provincial government accepted federal jurisdiction over cable programming. On the day the agreement was entered into, Cabinet made an order setting aside the two licences issued by the CRTC.102
As a result of Cabinet’s decision, the CRTC re-launched the licensing process. In the Public Announcement instituting the new process, the CRTC identified concerns arising out of the ownership issue and invited comment on the terms and scope of the federal-provincial agreement.103 The Commission ultimately awarded the new licences to different applicants.104 In doing so, the CRTC authorized the new licensees to lease distribution plant and the amplifier component of their systems from MTS -- an arrangement consistent with the federal-provincial agreement that was not previously permissible under the CRTC’s ownership policy; but the
101 Winnipeg Videon Limited, Decision CRTC 76-650 (16 September 1976), 110:39 C Gaz I 4856 and Grand Valley Cablevision Limited, Decision CRTC 76-651 (16 September 1976), 110:39 C Gaz I 4857, both online: LAC < http://www.collectionscanada.gc.ca >. 102 PC 1976-2761 (10 November 1976), online: JUSTICE
25 Ryan: ‘Cabinet Appeals’ and the CRTC
Commission also reiterated its position that licensees must own the local head-ends, subscriber drops and inside wire -- requirements that were inconsistent with the Canada-Manitoba agreement.105 The Commission said the following:
The Commission is not entitled to discharge its statutory responsibilities in a permissive or selective way. The Commission is under a legal obligation to ensure that cable television licensees are in a position to respond to the requirements of the Broadcasting Act including any directions from the Governor-in-Council. The Commission cannot subject its authority to limitations imposed from any other source unless in conformity with the Broadcasting Act. It is not free to accept a cable television operator’s argument of being frustrated from complying with Commission regulatory policy or regulations because of
conditions imposed by other municipal, provincial, or federal authority.106 2014 CanLIIDocs 327
Although Cabinet had no express power to refer telecommunications decision back to the CRTC before the enactment of the Telecommunications Act in 1993,107 Cabinet has sometimes made its views on a matter before the Commission known before the Commission has rendered its decision, thereby giving the Commission scope to decide the case in conformity with those views. But the CRTC has often adopted the approach reflected in the 6+5 Cases and the Manitoba Cable Cases and ruled in accordance with its own views on policy and its own interpretation of its statutory mandate even when these are known to differ with Cabinet’s view. The difference between Cabinet’s powers under the Broadcasting Act and the Telecommunications Act means, however, that the view that has prevailed is not always the CRTC’s. Telesat-TCTS, referred to above, provides a good example.108 The CRTC declined to approve an agreement between Telesat Canada and the members of TCTS.109 Before the matter came before the CRTC, the Minister wrote to Telesat Canada expressing the government’s approval in principle for the proposed agreement, “without prejudice to the role of the C.R.T.C. in relation to those matters that fall within the jurisdiction of the C.R.T.C.” The letter was submitted in evidence. Although the letter was stated to be “without prejudice,” it made clear the Minister’s view that the public interest favoured approval of the agreement, which was the very issue that the Commission was called upon to decide. The Commission adverted to the letter in
105 PA 1977, supra note 104 at 4507-9; Vandervort, supra note 3 at 93. 106 PA 1977, supra note 104 at 4505. 107 TA, supra note 1, s 12(1). 108 See Section IV. Globalive, infra note 135, provides another, more recent, example. 109 Supra note 56.
26 Ryan: ‘Cabinet Appeals’ and the CRTC its decision,110 but nevertheless approved the agreement. The decision was overturned by Cabinet of its own motion.111
A referral back is not always prompted by a disagreement with CRTC policy. The 1983 Pay Television Decision112 is a case where Cabinet may have simply wanted a better articulation of that policy. In that case, the Commission decided to issue six new broadcasting licences authorizing the provision of pay television services, including regional general interest services, a national special interest service and a national general interest service. The CRTC regarded the licensing of the national general interest service as significant because, in its view, “the existence 2014 CanLIIDocs 327 of a national general interest pay television service is essential to provide a strong national dimension for pay television in Canada.” A few months later, the CRTC issued two additional broadcasting licences for regional general interest services.113 All of the licensees quickly fell into financial difficulties. The CRTC subsequently granted an amendment to the licence of Allarcom,114 which had originally been licensed to provide a general interest service in Alberta. The amendment permitted Allarcom to extend its service into Manitoba, Saskatchewan and the Northwest Territories. Cabinet, clearly concerned about the implications for the national general interest service and the prospects for the pay-tv business generally, referred the decision back to the CRTC for reconsideration on the grounds the Commission had failed to consider or did not consider adequately “whether the amendment may place the licensee [i.e., Allarcom] in an enhanced position to that foreseen in [the Pay Television Decision] to compete with the national general interest licensee without being subject to requirements comparable to those imposed by the Commission on the national general interest licensee” and “whether and to what extent the
110 Ibid at 14-15, 20. 111 PC 1977-3152, supra note 57. 112 Pay Television, Decision CRTC 82-240 (18 March 1982), 116:13 C Gaz I 2331, online: LAC < http://www.collectionscanada.gc.ca >. Two Commissioners dissented, inter alia, on the ground that a plurality of service providers would fragment audiences and revenues: ibid at 2363-4. This was no doubt also one of the concerns that prompted Cabinet’s subsequent intervention. 113 Regional French-language Pay Television Service for Eastern Canada (Quebec, Ontario and the Atlantic Region), Decision CRTC 82-1023 (23 November 1982), 116:49 C Gaz I 91149, and Regional English-language Pay Television Service for the Province of British Columbia and the Yukon Territory, Decision CRTC 83-115 (21 February 1983), 117:10 C Gaz I 2099, both online: LAC < http://www.collectionscanada.gc.ca >. 114 Regional English-language Pay Television Service for the Provinces of Manitoba and Saskatchewan and the Northwest Territories, Decision CRTC 83-576 (27 July 1983), 117:32 C Gaz I 7154, online: LAC
27 Ryan: ‘Cabinet Appeals’ and the CRTC amendment accords with the objectives of the Canadian pay television system … and, in particular, as to the respective roles and obligations of a regional, general interest licensee and the national general interest licensee in light of the apparent evolution of the overall market structure of the Canadian pay television system.”115 It does not appear to have been Cabinet’s objective to have the extension to the Allarcom licence rescinded. As the Minister of Communications (Francis Fox) indicated in a press release issued with the OiC referring the matter back, Cabinet "does not necessarily disagree with the CRTC's decision to extend Allarcom's service", but “it is important for the CRTC to provide a further rationale for its 2014 CanLIIDocs 327 decision and explain how it now views the future evolution of pay television in Canada".116 The CRTC explained its rationale in its subsequent decision, and also confirmed, “without change, variation or alteration,” the amendment of Allarcom's licence.117
D. Consumer Issues
In 1958, Cabinet varied a telecommunications rate decision for the first time since it divested itself of its role as regulator in the aftermath of the 1897 Bell Canada rate case.118 The company whose rates were in issue was again Bell and the experience was again a difficult one for Cabinet. The Board of Transport Commissioners had granted Bell increases in its rates for exchange and long distance services and equipment, partly on the basis of expenses that took into account a tax equalization reserve which reflected the difference between the capital cost allowance claimed by the company for income tax purposes and the company’s (significantly lower) booked depreciation. As the Board acknowledged, the treatment of taxes was controversial, but it had recently allowed railways to adopt the course proposed by Bell. It therefore approved the Bell approach for the purposes of the immediate application, indicating
115 Order Referring back to the CRTC a Decision Amending the Broadcasting Licence of Allarcom Limited, PC 1983-2878 (20 September 1983), 117:19 C Gaz II 3687, online: JUSTICE
28 Ryan: ‘Cabinet Appeals’ and the CRTC that the matter would continue to be scrutinized and that it might require review in the future. Increases in rates designed to yield about $10 million were approved.119
As they had in 1897, municipalities mounted a public campaign challenging the decision and they were again successful, at least initially, in blocking Bell’s plans. The Diefenbaker government granted a petition by the municipalities for rescission of the decision. Consistent with the ruling it had made a few weeks earlier in respect of the Board’s decision concerning treatment of the tax issue in the railway rate case, Cabinet directed the Board that, “as a principle of rate making policy, credits to tax equalization reserves shall not be regarded as necessary 2014 CanLIIDocs 327 expenses or requirements in determining rates and charges.”120
Bell promptly returned to the Board with a new application. Consistent with the letter, but hardly the spirit of Cabinet’s decision, Bell proposed to close the gap between its capital cost allowance and its booked depreciation by limiting its claim for capital cost allowance in the relevant years, with the result that its income tax expense would increase. The Board saw no reason to interfere with a management decision to accelerate the payment of income tax and the consequent increase in income tax expense.121 The Board approved rate increases designed to yield $17.5 million122 -- an amount considerably larger than the amount approved in the original decision. The new decision, too, was appealed to Cabinet, but Cabinet had by then lost its appetite for intervention and rejected the petition.123 The government was apparently satisfied that the Board had struck a balance between the interests of the telephone user and the interests of the company.124 According to one commentator, the whole experience left Diefenbaker
119 Re Bell Telephone Company Increase in Rates (1958), 76 Cdn Railway and Transport Cases 267 [Bell 1958 No. 1]. See in particular at 291-5, 301-2. 120 PC 1958-602 (29 April 1958), RG2, A1a, vol 2216. The implementation of the BTC decision was suspended twice by the GiC, in PC 1958-111 (24 January 1958), LAC, RG2, A1a, vol 2213. and PC 1958-306 (18 February 1958), LAC, RG2, A1a, vol 2214, pending delivery of its final decision. See Laurence B. Mussio, Telecom Nation: Telecommunications, Computers, and Governments in Canada (Montreal and Kingston: McGill-Queen’s University Press, 2001) at 21958~)7-28 [Mussio] for a discussion of the case. 121 Re Bell Telephone Company Increase in Rates (1958), 78 Cdn Railway and Transport Cases 1 at 15-24. 122 Ibid at 27 and 30. 123 PC 1958-1625 (27 November 1958), LAC, RG2, A1a, vol 2226. The implementation of the BTC decision was suspended by the GiC in PC 1958-1480 (23 October 1958), LAC, RG2, A1a, vol 2224, pending delivery of its final decision. 124 According to Mussio, supra note 120 at 37.
29 Ryan: ‘Cabinet Appeals’ and the CRTC
“considerably chastened.” He now realized that “intervention into the complexities of the regulatory mechanism held as many perils as potential political advantages.” The government even contemplated removing Cabinet’s veto power in rate matters, but was ultimately persuaded that government could not relinquish its role because the issues at stake were often too important to be left to the regulator.125 The case raises an obvious question about the extent to which Bell manipulated the regulatory process to achieve its ultimate goal, but for our purposes the more interesting question concerns the extent to which the regulator was a willing party to a strategy that could be seen as undermining Cabinet’s decision and allowing the Board to reassert its 2014 CanLIIDocs 327 authority.
For decades following, Cabinet generally avoided becoming embroiled in consumer rate issues,126 but there were two instances when the pressure for action proved irresistible.127 In 1973, Cabinet intervened to vary a CTC decision approving a sharp increase in Bell Canada service charges payable by residential customers.128 The increase was the fifth permitted in seven years and not only provoked protests from consumers but reinforced a growing view
125 Ibid at 37-8. 126 Cabinet declined to intervene in consumer rate issues raised in the following cases: CNT: Increases in Telephone Rates in Northwest Canada, Telecom Decision CRTC 77-3 (7 April 1977), 111:17 C Gaz I 2104, online: LAC < http://www.collectionscanada.gc.ca >, petition to vary denied, PC 1977-2028 (14 July 1977); Bell Canada, Increase in Rates, Telecom Decision CRTC 77-7 (1 June 1977), 111:24 C Gaz I 3158, online: LAC < http://www.collectionscanada.gc.ca >, petitions to vary denied, PC 1977-2026 (14 July 1977) and PC 1977-2027 (14 July 1977); Bell Canada - Interexchange Rates in the Remote North, Telecom Decision CRTC 85-16 (7 August 1985), online: CRTC
30 Ryan: ‘Cabinet Appeals’ and the CRTC within government that the CTC and its procedures were ill-suited to dealing with consumer issues. The crisis of confidence was contributed to by the CTC itself, which had a few years earlier expressed doubts about its capacity to regulate telecommunications effectively while also discharging its responsibilities for regulating rail, aviation and shipping. In Parliament, the New Democratic Party seized on the controversy surrounding the CTC decision to call for nationalization. The (Liberal) government became convinced that legislative reform involving transfer of the CTC’s responsibilities for telecom regulation to the CRTC was the best way to address the situation, but in light of the government’s minority position, that solution was 2014 CanLIIDocs 327 difficult to implement. To deal with the immediate controversy, Cabinet first suspended implementation of the CTC’s increases in service charges “in order to provide sufficient time for a review of the said decision”, and then, two months later, varied the CTC’s decision by revoking the service charge increases.129
In 1994, prompted by petitions by consumer groups, Cabinet intervened once again on the politically-sensitive local rate issue.130 The CRTC had directed telephone companies to “rebalance” their telephone rates by implementing staged increases of $2 per month in local rates over the next three years and by reducing long distance rates by a corresponding amount. In response to pressure from consumer groups to moderate or abandon the proposed local rate increases, Cabinet directed the CRTC to reconsider its plan and stayed the increases in the meantime. On reconsideration, the CRTC reaffirmed the need for and the benefits of rate rebalancing and directed telephone companies to implement the first and second annual increases mandated in its original decision, but, apparently in deference to Cabinet’s concerns, postponed its decision with respect to the third planned increase pending the outcome of a future proceeding. The CRTC also directed the telephone companies to proceed with plans to make corresponding reductions in long distance rates.131 The new decision provoked a new round of petitions, this time by the telephone companies, who persuaded Cabinet to intervene and to
129 Bell Canada (Application “A”), [1973] Cdn Transport Cases 95, varied PC 1973-871 (9 April 1973) (delaying implementation of tariffs), PC 1973-1765 (21 June 1973) (revoking increases in certain service charges) and PC 1973-1827 (29 June 1973) (revoking increases in service charges other than those previously revoked). 130 Order Varying Telecom Decision CRTC 94-19, PC 1994-2036 (13 December 1994), 128:26 C Gaz II 4272, online: JUSTICE < http://www.laws-lois.justice.gc.ca >. 131 Implementation of Regulatory Framework - Splitting of the Rate Base and Related Issues, Telecom Decision CRTC 95-21 (31 October 1995), online: CRTC
31 Ryan: ‘Cabinet Appeals’ and the CRTC eliminate the requirement for mandated reductions in long distance rates. Cabinet accepted that, in the period of transition to competition in long distance services then underway, market forces should be allowed to set the level of rates. 132
E. Foreign Ownership and Control
The Telecommunications Act stipulates that it is an objective of Canadian telecommunications policy “to promote the ownership and control of Canadian carriers by Canadians.”133 The Act gives substance to that policy by prohibiting a carrier from operating 2014 CanLIIDocs 327 unless it satisfies objective criteria (in the form of rules fixing a minimum number of Board seats to be held by Canadians and a minimum percentage of voting shares to be owned by Canadians), and an additional requirement that the carrier must not be controlled by non-Canadians.134
In Globalive, Cabinet overturned a CRTC determination that a newly-licensed wireless carrier, Globalive Wireless Management Inc., better known as WIND, was not “controlled in fact” by Canadians and was therefore ineligible to operate under the Act.135 The case assumed political importance because the result of the CRTC decision was to disqualify a potential competitor at a time when it was the government’s stated goal to encourage increased competition in wireless services.
The background is as follows. Globalive had been among the successful bidders in an auction for the right to use radio frequency spectrum for the provision of mobile telephone services conducted by the Minister of Industry (Tony Clement) in 2008. The Minister had duly issued Globalive a licence under the Radiocommunication Act authorizing the company to
132 Order Varying Telecom Decision CRTC 95-21, PC 1995-2196 (19 December 1995), 130:1 C Gaz II 96, online: JUSTICE < http://www.laws-lois.justice.gc.ca >. Cabinet also cited the possibility that mandated reductions could reduce investment. 133 TA, supra note 1, s 7(d). 134 Ibid, ss 16(3)-(4). 135 Review of Globalive Wireless Management Corp. under the Canadian ownership and control regime, Telecom Decision CRTC 2009-678 (29 October 2009), online: CRTC
32 Ryan: ‘Cabinet Appeals’ and the CRTC operate as a radiocommunication carrier.136 Globalive’s principal shareholder was Orascom, an Egyptian company. Since radiocommunication carriers must comply with Canadian ownership and control rules similar to those imposed on telecommunications carriers under the Telecommunications Act, 137 one of the matters the Minister was required to consider before licensing Globalive was whether the company was controlled in fact by non-Canadians. Although the Minister is not required to make public reasons for his licensing decisions, it is presumed that the Minister considered the control issue and concluded that Globalive was not foreign-controlled. 2014 CanLIIDocs 327
In 2009, the CRTC instituted its own examination of Globalive’s ownership and control.138 Although Globalive argued that its ownership and control had already been examined by the Minister in conjunction with the company’s licensing under the Radiocommunication Act,139 the CRTC said that it had a separate mandate under the Telecommunications Act to ensure compliance with that Act.140 After a public proceeding, the CRTC issued a decision in which it found that Orascom held less than 1/3rd of Globalive’s voting shares (within the limit on foreign ownership of voting shares set by the Act), but that Orasom held almost two-thirds of Globalive’s total equity when non-voting shares were also considered, as well as essentially all of the company’s debt. The CRTC also examined a number of agreements between Globalive and its shareholders that potentially impinged on Globalive’s independence.141 These findings formed the foundation for the CRTC’s conclusion that Globalive was controlled in fact by a non-Canadian and therefore not eligible to operate.142
The Minister immediately announced that Cabinet would review the CRTC decision on its own motion. In its decision overturning the CRTC, Cabinet accepted the CRTC’s findings of
136 Radiocommunication Act, RSC 1985, c R-2, as am, s 5(1)(a). The sequence of event is described in TD 2009- 678, supra note 135 at paras 1-9. 137 Radiocommunication Regulations, SOR/96-484, as am, s 10. 138 TD 2009-678, supra note 135. 139 Transcript of Proceeding (23 September 2009) at paras 176-183, online: CRTC, http://www.crtc.gc.ca/partvii/eng/2009/8657/c12_200910316.htm>. 140 Ibid at paras 9-11. 141 TD 2009-678, supra note 135 at paras 34-112. 142 Ibid at para 119.
33 Ryan: ‘Cabinet Appeals’ and the CRTC fact, but differed with the CRTC on the interpretation and application of the concept of control to those facts, concluding that Globalive was not controlled by non-Canadians and substituting a decision that the company was eligible to operate.
VI. Some Reform Proposals
Although the Cabinet review process has been in place in telecommunications matters since 1906, and in broadcasting matters since 1968, exercise of the power continues to attract
controversy. Despite the procedural reforms introduced post-Inuit, the perception remains 2014 CanLIIDocs 327 (rightly, in our view) that the process threatens the independence of the regulator and the integrity of the regulatory process by exposing decision-making to political interference. Although some provinces have responded to these concerns by curtailing use of the mechanism,143 at the federal level, there is no discernible trend toward reduced recourse to the review power. As we indicated above, Cabinet has since 1968 reviewed 179 decisions on petition or of its own motion, and varied, rescinded/set side or referred back 26 decisions in telecommunications cases and 22 in broadcasting cases. We regard these figures as significant in themselves, but, apart from the actual cases of Cabinet intervention, the impact of the possibility of Cabinet intervention surely has a real, if unquantifiable impact on decision-making across a range of cases.
Those that favour retention of the Cabinet review power frequently argue that agencies such as the CRTC are extensions of the Executive and that it is appropriate that they should be directly answerable to the Executive for their decisions. There are at least two weaknesses in this understanding of the relationship between Cabinet and independent agencies such as the CRTC. The first is that the CRTC is not simply an arm of the Executive like a government department: the CRTC derives its mandate from Parliament.144 The second lies in the identification of the Executive with Cabinet. In a recent article, Lorne Sossin challenges the
143 The Cabinet Appeals Abolition Act, SBC 1993, c 38, repealed provisions in 15 statutes providing for cabinet appeals from regulatory and ministerial decisions. The Good Government Act, SO 2009, c 33, repealed provisions in six statutes providing for cabinet appeals from regulatory decisions. Neither Act abolished all appeals: there continues to be provision for appeals, for example, from certain decisions of the British Columbia Environmental Appeal Board and the Ontario Municipal Board: see, respectively, Environmental Management Act, SBC 2003, c 53, s 97 and Planning Act, RSO 1990, c P13, s 34(29.1). 144 This is a point made by the Lambert Commission, supra note 3 at 317, among others.
34 Ryan: ‘Cabinet Appeals’ and the CRTC notion that the Executive is synonymous with Cabinet and postulates that the Executive should be understood instead as embracing the wider “web of constitutionally mediated, institutional relationships” that exist among Cabinet, the public service and independent administrative agencies.145 While Cabinet supremacy may remain one of the essential underpinnings of our constitutional model, a modern understanding of Cabinet’s role should also acknowledge the role of independent decision-makers and show restraint and respect for independent decision- making.146
How to find an appropriate balance between the need to preserve the CRTC’s autonomy 2014 CanLIIDocs 327 while ensuring an appropriate level of political control, and how to institutionalize the required arrangements, are vexing issues with no simple solution. Hudson Janisch recognized the dilemma and the elusive nature of a resolution when he said that “[w]e are never going to abandon independent regulatory agencies, nor will we give up on ultimate political control.... It will never be a question of whether there should be political control, only how it can be achieved without excessively compromising the integrity of the regulatory agencies.”147 However, in common with many others who have addressed the issue, the author is of the view that the status quo, which relies heavily on ex post Cabinet review of individual CRTC decisions, is seriously flawed. What can we do to move towards achievement of a better balance between autonomy and political control? We offer two specific suggestions. The first is that the scope of the Cabinet review power in telecommunications matters should be narrowed. While the power to review CRTC decisions is confined in broadcasting matters to decisions to issue, renew or amend broadcasting licences, essentially all telecommunications decisions are subject to review. The result is a serious political overreach . There is a range of matters which fall within the CRTC’s remit where it is difficult to justify the need for Cabinet review. Removal of decisions in these matters from the purview of Cabinet review would contribute to establishment of a better balance. These matters include (but are not limited to) CRTC decisions relating to the following matters:
145 Lorne Sossin, “The Puzzle of Independence for Administrative Agencies” (2009) 26 Nat’l J Const L 1 at 7-8. 146 Ibid at 22. 147 Janisch 2012, supra note 3 at 820. Emphasis in original.
35 Ryan: ‘Cabinet Appeals’ and the CRTC
specifying the classes of telecommunications service providers that are required to have a licence to provide international telecommunications services;148
determining that the activity of an affiliate of a carrier is integral to the provision of a basic telecommunications service by the carrier and that the earnings of the affiliate should therefore be treated as revenues of the carrier in determining whether the carriers’ rates are just and reasonable for rate-making purposes;149
authorizing or prescribing, or refusing to authorize or prescribe, limitations on a 2014 CanLIIDocs 327 carrier’s liability in respect of telecommunications services;150
determining the costs of providing telecommunications services;151
designating, or refusing to designate as confidential and thereby restricting access to information provided in proceedings before the Commission;152 and
ordering, prohibiting or regulating the use by any person of the telecommunications facilities of a carrier for the provision of unsolicited telecommunications.153
We would also specifically exclude decisions concerning foreign ownership from the scope of a revised power of review. Whether a carrier or broadcaster is controlled in fact by a non- Canadian is a matter that should be determined by the CRTC alone, and subject to review only in a court of law on the grounds of unreasonableness. In the author’s view, there is no persuasive argument that can be made for permitting Cabinet to substitute its own views on such an issue for that of the CRTC, as occurred in the Globalive case.
While the matters listed above could be specifically excluded from the scope of the review power, it would be preferable to state which decisions are amenable to review. That list should be strictly confined to matters that may engage important issues of public policy, such as:
148 TA, supra note 1, s 16(1). 149 Ibid, s 33. 150 Ibid, s 31. 151 Ibid, s 37. 152 Ibid, s 38. 153 Ibid, s 41.
36 Ryan: ‘Cabinet Appeals’ and the CRTC
whether a rate is just and reasonable154 and whether a carrier has, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminated or given an undue preference. 155 Regulatory authority over these matters carries with it the power to design rate structures, which has implications for politically-sensitive matters such as the relative level of local versus long distance rates, and consumer versus business rates.
whether a service should be “deregulated”. 156 2014 CanLIIDocs 327 whether carriers should be required to connect their systems to other systems and the terms and conditions that should apply.157 Historically, regulation of interconnection has determined whether competition would be permitted in a particular market and, once competition has been introduced, the important issue of the terms on which carriers have wholesale access to each other’s networks.
The need for extension of the power of review to other matters is hard to justify on the ground that the possibility of Cabinet review is essential to Cabinet’s policy-making role.
The second suggestion for reform applies equally to telecommunications and broadcasting . There is at present a curious asymmetry between the procedures that govern the issuance of directions by Cabinet and those that apply to Cabinet’s exercise of the review power. In the
154 TA, supra note 1, s 27(1). 155 Ibid, ss 27(2) and 28. Under s 27(5), a determination by the CRTC in any case that a carrier has complied with these requirements or s 27(1) requiring that rates are just and reasonable is deemed a question of fact. Under s 52(1), Commission determinations on questions of fact are “binding and conclusive.” It appears to follow that a CRTC finding on an issue of compliance cannot be disturbed by Cabinet on review, and this would seem to be an appropriate restriction. Section 52(1) does not appear, however, to preclude Cabinet from revising rates on a prospective basis. In Public Mobile, supra note 135, , it was argued that s 52(1) applies to appeals to the courts but not to Cabinet reviews, but the point is not referred to in the judgments. The argument depends on the linking of TA s. 52(1) to RWA 1903, supra note 19, s 42(3), which provided that the Board of Railway Commissioners’ decisions on questions of fact were “binding and conclusive on all courts.” The italicized words were omitted in the 1906 consolidation and the provision was carried forward in that revised form over subsequent consolidations and later into legislation applicable to telecommunications, and ultimately into the TA. 156 Ibid, s 34; that is, whether it would be consistent with the Canadian telecommunications policy objectives for the Commission to refrain from exercising its powers to regulate the rates and other aspects of a service, or whether competition would be sufficient to protect the interest of users, and any conditions that should attach to the making of such decisions.. 157 Ibid, s 40.
37 Ryan: ‘Cabinet Appeals’ and the CRTC former case, provision is made for Parliamentary oversight of Cabinet by providing that draft directions must be laid before Parliament and published in the Canada Gazette, and that the CRTC must be consulted before directions are put in final form. No similar procedures apply to the issuance of orders in council varying, rescinding/setting aside and referring CRTC decisions back for reconsideration. This procedural asymmetry undoubtedly goes far in explaining Cabinet’s manifest preference for the use of ex post interventions over the use of ex ante directions.
When the Lambert Commission made the recommendations that are now reflected in the 2014 CanLIIDocs 327 arrangements that govern the issuance of directions, it also considered whether an appropriate set of procedures could be developed for "political appeals" to “protect the integrity of the regulatory process.” The commission ultimately concluded that it was “highly doubtful” that this could be accomplished “without unduly adding to the burden on Cabinet”. The difficulty it perceived would exist in establishing suitable procedures was one of the reasons it advocated abolition of Cabinet appeals.158 We can only speculate now on whether, in light of the subsequent decision not to implement its recommendation to abolish Cabinet appeals, the Lambert Commission would, despite its misgivings about the associated burden, have favoured the imposition of some checks on the use of the review power similar to those it recommended be attached to the exercise of the direction power. It is time to revisit this issue. Serious consideration should now be given to extending the procedures that already apply to the making of directions to the issuance of orders in council varying, rescinding/setting aside and referring CRTC back for reconsideration.
Implementation of these modest reforms would achieve a better balance between the independence of the CRTC and Cabinet which would enhance respect for the regulatory process while continuing to acknowledge the shared role of these two institutions in regulatory decision- making.
158 Ibid at 319.
38 Ryan: ‘Cabinet Appeals’ and the CRTC
Appendix A Decisions by the Governor-in-Council reviewing Telecommunications Decisions 1906 to 2012159
Note: An asterisk * denotes a decision made by the GiC of its own motion.
GiC Decision BTC/CTC/CRTC Telecom Decision GiC Action PC 1920-1560 BTC, In re Bell Telephone Co. Increased Petitions by Toronto et al. denied. Tolls (1919), 25 CRC 1 PC Letter dated BTC, Bell Telephone Co. v. Toronto Petition by Toronto. Decision REFERRED BACK to Board without 6 October 1921 (1921), 27 CRC 231 decision for rehearing in junction with new Bell rate application. Note: The new application was disposed on in BTC, Bell Telephone Co. v. Ontario
(1922), 27 CRC 277. 2014 CanLIIDocs 327 PC 1958-602 BTC, Re Bell Telephone Company Petitions by municipalities. Decision RESCINDED. Note: The Increase in Rates (1958), 76 CRTC 267 implementation of the BTC decision was suspended twice by the GiC, in PC 1958-111 and 1958-306, pending delivery of its final decision PC 1958-1625 BTC, Re Bell Telephone Company Petitions by provinces and municipalities denied. Note: The Increase in Rates (1958), 78 CRTC 1 implementation of the BTC decision was suspended by the GiC in PC 1958-1480 pending delivery of its final decision PC 1961-638 BTC Decision dated April 28, 1961 Petition by Commercial Telegraphers’ Union denied authorizing the establishment of a joint telegraph office and pooling of revenues by CNR and CPR PC 1973-1765* CTC Decision dated March 30, 1973 Decision VARIED to revoke increase in certain service charges. Note: The approving rate increases for Bell Canada decision had been previously varied in PC 1973-871 to change the date on which increases in service charges were set to become effective “in order
159 Source: See supra note 4.
39 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision BTC/CTC/CRTC Telecom Decision GiC Action to provide sufficient time for a review of the said decision” by the GiC PC 1973-1827* Ibid. Decision VARIED to revoke increase in service charges (other than those previously revoked by PC 1973-1765) PC 1977-2026 Petition by NAPO denied PC 1977-2027Telecom Decision 77-7, approving rate Petition by Inuit Tapirisat denied. Note: An application to set aside the increases for Bell Canada decision of the GiC for breach of the rules of natural justice was denied in Inuit Tapirisat of Canada v. Canada, [1980] 2 SCR 735 PC 1977-2028 Telecom Decision 77-3, concerning rate Petition by Inuit Tapirisat denied increases for Canadian National telephone
services in Northwest Canada 2014 CanLIIDocs 327 PC 1977-3152* Telecom Decision 77-10, refusing to Petitions received. Decision VARIED by GiC’s own motion to substitute approve the Telesat Canada Proposed wording approving the agreement. Notes: A News Release was issued with Agreement with the TransCanada the OiC on November 3, 1977. In Consumers’ Assoc. of Canada v. AG, Telephone System [1979] 1 FC 433 (TD), an application for a declaration that the GiC did not have the power to vary Decision 77-10 by causing an entirely different result to obtain was dismissed. PC 1979-2036 Telecom Decision 79-11, granting CNCP Petition by Bell Canada denied. Note: A News Release was issued with the Telecommunications private line OiC by the Government of Canada on 1 August 1979 interconnection with Bell Canada PC 1981-260 Telecom Decisions 78-7 and 79-1, Petition by Bell Canada denied concerning regulatory treatment of revenues from operations in Saudi Arabia PC 1981-1223 Telecom Decision 80-13, prescribing Petitions by Government of Ontario and Bell Canada denied. Note: interim requirements for attachment of Statement by Ministers Francis Fox (Communications) and Herb Gray customer-provided terminal equipment to (Industry, Trade and Commerce) issued as a News Release on 7 May 1981
40 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision BTC/CTC/CRTC Telecom Decision GiC Action Bell Canada’s network PC 1981-3456* Telecom Decision 81-13, requiring Decision VARIED by GiC’s own motion to substitute an order amending Telesat Canada to file or re-file tariffs Telesat’s tariffs to broaden the class of customers eligible for certain limiting the availability of certain services services. Note: The decision had been previously varied in PC 1981-2151 to a defined group of customers to extend the filing date for tariffs “in order that the national policy implications of the decision may be reviewed and thereafter, if necessary, the decision may be further varied or rescinded” and again in PC 1981- 3382 to extend further the date for the filing of tariffs pending a final decision PC 1982-2350* Telecom Decision 81-15, approving Decision VARIED by GiC’s own motion to substitute rate increases of 6%
changes in rates charged by Bell Canada in 1982 and 5% in 1983 2014 CanLIIDocs 327 PC 1982-2558* Telecom Decision 81-13, approving Decision further VARIED by GiC’s own motion to substitute rate changes in rates charged by Telesat increases of 6% in 1982 and 5% in 1983 Canada PC 1982-2579* Telecom Decision 81-4, approving Decision VARIED by GiC’s own motion to substitute increases of 6% in changes in rates charged by NorthwesTel 1982 and 5% in 1983 Inc. PC 1982-2580* Telecom Decision 81-20, approving Decision VARIED by GiC’s own motion to substitute increases of 6% in changes in rates charged by Terra Nova 1982 and 5% in 1983 Telecommunications PC 1982-2581* Telecom Decision 81-26, approving Decision VARIED by GiC’s own motion to substitute increases of 6% in changes in rates charged by CNCP 1983 and 5% in 1984 Telecommunications PC 1983-3244* Telecom Order 83-417, approving Decision VARIED by GiC’s own motion to postpone the effective date of increases in rates charged by Bell Canada the CRTC-approved rate increase for various competitive services
41 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision BTC/CTC/CRTC Telecom Decision GiC Action PC 1987-1099 Telecom Decision 85-16, respecting Petition by Inuit Tapirisat denied Bell’s rates for interexchange service in the Far North PC 1987-2134* Telecom Decision 87-14, staying Decision VARIED to extend the stay of execution granted in Telecom execution of Decision 87-5, determining Decision 87-14. Note: See Note to PC 1988-265 that a service provided by Call-Net is not an “enhanced service” PC 1987-2349* Ibid. Decision VARIED to extend further the stay of execution granted in Telecom Decision 87-14. Notes: A News Release dated 20 November 1987 was issued with the OiC by the Government of Canada. See also note to
PC 1988-265. 2014 CanLIIDocs 327 PC 1988-265* Ibid. Decision VARIED to extend further the stay of execution granted in Telecom Decision 87-14. Notes: A News Release dated 12 February 1988 was issued with the OiC by the Government of Canada. An application for a declaration that PC 1987-2349 and PC 1988-265 were invalid since the Governor in Council had exhausted his power to vary when he first varied Telecom Decision 87-5 in PC 1987-2134 PC 1988-762 Telecom Decision 88-4, fixing Petition by BCE Inc. and Bell Canada International Inc. Decision VARIED compensation for employees temporarily to vary the compensation payable. Notes: A News Release was issued with transferred from Bell Canada to affiliated the OiC on 22 April 1988 by the Government of Canada. In Canada companies (Attorney General) v. National Anti-Poverty Organization [1989] 3 FC 684, the Federal Court of Appeal reversed a decision of the Trial Division declaring the OiC "null and void and of no force and effect" on the ground that the GiC had deprived the respondents of a fair hearing on the subject matter of the Petition. PC 1988-2386* Telecom Letter Decision 88-9, denying an Decision VARIED so that the effective date of Telecom Letter Decision application by Call-Net for an order 88-9 postponed until the date following the final judicial determination of
42 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision BTC/CTC/CRTC Telecom Decision GiC Action requiring Bell Canada not to disconnect Call-Net’s appeal of Telecom Letter Decision 88-9 Call-Net’s facilities PC 1989-1238* Ibid. Decision VARIED so that the effective date of Telecom Letter Decision 88-9 would be 30 days following the decision of the CRTC in its review of resale and sharing of private line voice services PC 1990-620* Ibid. Decision VARIED so that the effective date of Telecom Letter Decision 88-9 would be 90 days following the decision of the CRTC in its review of resale and sharing of private line voice services or on such later date fixed by the CRTC for tariffs giving effect to the latter decision PC 1990-0218 Telecom Decisions 86-7 and 86-593, Petition denied approving general regulations for 2014 CanLIIDocs 327 telecommunications services PC 1991-1145 Telecom Decision 90-28, fixing a rate of Petition by Telesat Canada. Decision VARIED to vary the allowed rate of return on investment for Telesat Canada return PC 1991-2409 Telecom Decision 90-15, setting rates for Petition by Nfld Tel to set aside decision refusing to allow the company to Newfoundland Tel add assets purchased from Terra Nova Tel to be included in its rate base at full purchase price denied PC 1992-2206 Telecom Decision 92-11, concerning Petition (to delay the deadline for the filing of reseller tariffs) denied status of resellers under the Railway Act __ Telecom Decision 92-12, authorizing Petition by Stentor Telecom Policy Inc. withdrawn interconnection with telephone company local networks to provide competitive public long distance telephone services PC 1993-0200 Ibid. Petition by CEWC et al. denied PC 1993-0201 Ibid. Petition by TWU denied
43 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision BTC/CTC/CRTC Telecom Decision GiC Action PC 1994-2036 Telecom Decision 94-19, authorizing Petitions received. Decision REFERRED BACK to CRTC to reconsider increases in local rates and directing rate rebalancing proposals and, in doing so, to consider Phase III cost telephone companies to file “rate allocations in light of external benchmarks; and to stay implementation in rebalancing proposals” the meantime. Notes: A News Release was issued with the OiC on December 13, 1994 by the Government of Canada. The CRTC reconsidered its decision as part of Telecom Decision 95-21. See infra. PC 1995-1808 Telecom Decision 95-4, concerning Petition by CBTA denied contribution charges PC 1995-2196 Telecom Decision 95-21, adopting a plan Petition by AGT, Stentor and People for Affordable Telephone Service. for local rate increases and long distance Decision VARIED (inter alia) to eliminate the requirement for reductions
rate decreases for telephone companies in long distance rates. 2014 CanLIIDocs 327 __ Telecom Decision 95-17, relating to Petition by Teleglobe. Note: No action by GiC within time prescribed by international bypass s.12 (1). PC 1996-1001 Telecom Decision 95-14, granting Petitions by White Directory and other publishers. Decision VARIED to independent telephone directory replace majority decision with minority decision allowing access to listing publishers access to non-confidential information subject to the condition that such information not be re-sold to residential telephone listing information third parties held by telephone companies __ Telecom Letter Decision 97-10, removing Petition by Teleglobe withdrawn restrictions on overseas calls by private line PC 1998-0428 Telecom Order 97-803, concerning the Petition by CFIB denied restructuring by Bell Canada of business rates for local exchange services PC 1998-1135 Telecom Decision 97-21, respecting the Petition by Chisasibi Telecom Assoc. denied implementation of the regulatory
44 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision BTC/CTC/CRTC Telecom Decision GiC Action framework for Quebec-Telephone and Télébec ltée PC 1998-2322 Telecom Decisions 97-18 and 98-2, Petition by C. Morin denied respecting the implementation of price cap regulation and interim local rate increases PC 2000-1050 Telecom Decision 99-15, respecting rates Petition by Call-Net Enterprises Inc. denied for local loops PC 2000-1051 Telecom Decision 99-20, respecting Petition by AT&T Canada et al. denied contribution rates
PC 2000-1052 Telecom Decision 99-16, respecting the Petition by Governments of Manitoba and Saskatchewan and petitions by 2014 CanLIIDocs 327 basic local rate subsidy mechanism Canadian Co-op Assoc. et al. denied. Note: In a separate order, PC 2000- 1053, the GiC ordered that the CRTC report annually, for the next five years, on the state of competition PC 2001-2209 Telecom Decision 2000-745, respecting Petition by Amtelecom et al. denied modifications to the contribution regime PC 2002-833 Telecom Decision 2001-435, denying an Petition by CAB et al. Denied application to exempt Telesat and Telesat Mobile from contribution charges PC 2003-385 Telecom Decision 2002-34, establishing Petition by AT&T Canada denied. Note: A Statement by the Minister of the second price cap Industry (Allan Rock) dated 26 March 2003 was issued with the OiC. PC 2003-1151 Telecom Decision 2002-61, concerning Petition by Québecor denied alleged anti-competitive cross- subsidization of Bell ExpressVu PC 2003-1152 Decision 2002-67, denying an application Petition by TELUS denied to review and vary Decision 2000-745 and
45 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision BTC/CTC/CRTC Telecom Decision GiC Action Decision 2001-238 concerning contribution PC 2005-0701 Telecom Decision 2004-35, establishing Petitions by CMA et al. denied telemarketing rules __ Telecom Decision 2006-27, concerning Petition by Federally Regulated Employers - Transportation and quality of service indicators and rate Communications. Note: No action by GiC within the time prescribed by s adjustment plans 12 but the CRTC varied Decision 2006-27 in Decision 2007-26 PC 2006-305 Telecom Decision 2005-28, deciding to Various petitions received. Decision REFERRED BACK to the CRTC for refrain from exercising certain regulatory reconsideration. Note: The Commission confirmed its original decision in powers in relation to certain VoIP services Decision 2006-53. See PC 2006-1314. 2014 CanLIIDocs 327 PC 2006-1314* Telecom Decision 2006-53, reconsidering Decision VARIED to require CRTC to forbear from regulating retail local Telecom Decision 2005-28 (above) and access - independent VoIP services confirming in part and varying in part PC 2007-0150 Telecom Decision 2006-9, concerning Petition by Barrett Xplore Inc. denied. Note: Appeals from Decision 2006- disposition of funds in telephone company 9 were dismissed in Bell Canada v. Bell Aliant Regional Communications, deferral accounts 2009 SCC 40 PC 2007-532 Telecom Decision 2006-15, prescribing a Petitions by Gov’t of Saskatchewan, Coalition for Competitive test to be used in determining when CRTC Telecommunications and Aliant Telecom Inc. et al. Decision VARIED to would forebear from regulation substitute a different test for forbearance for retail local exchange services __ Telecom Decision 2007-43, denying an Petition by TBayTel et al. Note: No action by GiC within time prescribed application to review and vary certain by s12 (1). subsidy rates for tax-exempt small incumbent local exchange carriers PC 2008-0772 Telecom Decision 2007-27, concerning Petition regarding payphone rates by PIAC denied the price cap framework for large incumbent LECs and rates for basic
46 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision BTC/CTC/CRTC Telecom Decision GiC Action telephone services in rural and HCSAs and pay telephones PC 2008-1922 Decision 2008-1, concerning the use of Petition by Axia Supernet Ltd. denied deferral account funds PC 2008-1923 Decision 2008-6, concerning the Petition by Imagine Canada Inc. et al. denied application of the Unsolicited Telecommunications Rules to charities PC 2009-2006 Telecom Decisions 2008-118, reviewing Petition by MTS Allstream denied and confirming Telecom Decision 2008- 17 concerning the classification of wholesale Ethernet services 2014 CanLIIDocs 327 PC 2009-2007 Telecom Decision 2008-117 and Telecom Petitions by Bell Aliant and Bell Canada, and by TELUS. Decision Order 2009-111, relating to the provision REFERRED BACK to CRTC to reconsider the obligation imposed on of wholesale internet access services incumbent telephone and cable companies to provide high-speed internet service to their competitors on a wholesale basis in light of considerations identified by the GiC. Note: See Telecom Regulatory Policy 2010-632 PC 2009-2008* Telecom Decision 2009-678, concerning Decision VARIED by GiC’s own motion to reverse CRTC’s determination compliance of Globalive with Canadian that Globalive not compliant with Canadian ownership and control ownership and control requirements requirements and therefore in eligible to operate as a Canadian carrier. Note: An application to set aside the Decision of the GiC was granted but an appeal from the Federal Court Decision was subsequently allowed and the decision of the GiC restored: Public Mobile Inc. v. Canada, 2011 FC 130, appeal allowed (sub nom. Globalive Wireless Management Corp. v. Public Mobile Inc.) 2011 FCA 194. PC 2010-1587 Telecom Decision 2010-11, denying a Petition by TELUS denied. Note: An appeal from Decision 2009-85 was request to vary Telecom Decision 2009-85 denied in TELUS v. CRTC, 2010 FCA 191 dealing with terms and conditions for
47 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision BTC/CTC/CRTC Telecom Decision GiC Action services provided by Bell Canada to DND __ Telecom Decision 2010-802, concerning Petition by Vaxination Informatique withdrawn. Note: The CRTC usage-based billing for gateway access suspended implementation of its decision and initiated a review. The services Minister of Industry made a public statement that the GiC would overturn the original decision if confirmed by the CRTC. The decision was varied by the CRTC in Telecom Regulatory Policy 2011-703 __ Telecom Decision 2010-805, concerning Petition by Rogers. Notes: No action by GiC within time prescribed by s12 the use of wireless technology and (1). In Bell Canada v. Canada (AG), [2011] FCJ No. 1375, the Federal deferral account funds for extending Court dismissed an application seeking (1) to quash the publication in the broadband service, and Telecom Decision Canada Gazette of notice of a Petition , and (2) to prohibit the Governor in
2011-28, concerning the use of deferral Council from considering the Petition itself 2014 CanLIIDocs 327 account funds PC 2012-944 Telecom Regulatory Policy 2011-291 and Petition by ACTQ/OTA denied. Note: An application for a stay of Telecom Decision 2011-733, concerning Decision 2011-733 and other decisions pending disposition of the Petition the introduction of local telephone by the GiC was denied in L’Association des Compagnies de Téléphone du competition in rural areas Québec Inc. v. AG, 2012 FCA 203
48 Ryan: ‘Cabinet Appeals’ and the CRTC
Appendix B Decisions by the Governor-in-Council reviewing Broadcasting Decisions 1968 to 2012160 Note: An asterisk * denotes a decision made by the GiC of its own motion.
GiC Decision CRTC Broadcasting Decision GiC Action [1968 to 1976] Note: There were reportedly nine petitions made to the GiC pursuant to BA 1968, s 23 between 1968 and 1976, including seven made between 1974 and 1976. None of these petitions was successful.161 PC 1976-2761* Decisions 76-650 and 651(licences to Licences SET ASIDE. Note: The CRTC issued new licences with changed serve Selkirk, Portage La Prairie and conditions in Decisions 77-468 and 77-469
Brandon) 2014 CanLIIDocs 327 PC 1977-1508 Decision 77-193 (re Capital Cable Petition denied Cooperative) PC 1978-3577 Decisions 78-623 and 624, 78-629 and Petitions denied 630, 78-631 and 632 and 78-635 and 636 (issuing licences for cable services in rural Alberta) PC 1979-191 Decision 78-724 (licence application by Petition denied proposed BC cable company) PC 1982-1508 Decision 82-240 issuing six broadcasting Petition denied licences to carry out pay television services in Canada
160 Source: See supra note 4. 161 See Kenniff, supra note 3 at 123-6. None of these nine decisions appears to have been dealt with by way of OiC.
49 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision CRTC Broadcasting Decision GiC Action PC 1982-2958* Decision 82-1 (amending various pay-TV Decision to impose annual Canadian programming expenditure licences) requirement SET ASIDE by GiC’s own motion PC 1983-2665* Decisions 83-534 etc (amending Decisions REFERRED BACK to reconsider whether there are Câblevision Nationale licence) “exceptional circumstances” that would justify the increase in charges allowed by the Commission in light of Government’s 6+5 anti-inflation program. Note: The CRTC confirmed the original decision without changes in Decision 84-442 PC 1983-2666* Decisions 83-538 (amending Télécâble Decisions REFERRED BACK to reconsider whether there are Vidéotron licence) “exceptional circumstances” that would justify the increase in charges allowed by the Commission in light of Government’s 6+5 anti-inflation
program. Note: The CRTC confirmed the original decision without 2014 CanLIIDocs 327 changes in Decision 84-442 PC 1983-2878* Decision 83-576 (amending Allarcom Decision REFERRED BACK to consider whether licence amendment licence) accords with the objectives of the Canadian pay television system. Note: A Statement by the Minister of Communications (Francis Fox) dated September 21, 1983 was issued with the OiC. Note: The CRTC confirmed the original decision without changes in Decision 84-1 PC 1983-3238* Decision 83-763 (amending MSA Decision allowing increases in licensee’s installation charges exceeding Cablevision licence) increases permitted by Government’s 6+5 anti-inflation programme SET ASIDE PC 1983-3239* Decision 83-764 (amending Western Decision allowing increases in licensee’s installation charges exceeding Cablevision licence) increases permitted by Government’s 6+5 anti-inflation programme SET ASIDE PC 1984-1387 Decision 84-214 (issuing a licence to Petition denied Saskatoon Telecable) PC 1984-3778 Decision 84-857 (amending Premier Petition denied
50 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision CRTC Broadcasting Decision GiC Action Cablesystems licence) PC 1984-2625 Decision 84-445 (issuing a licence to Petition denied Chinavision Canada) PC 1984-4059 Decision 84-899 (issuing licence to Petition received. Decision REFERRED BACK to consider impact of Omineca Cablevision) licensing on persons residing outside of the immediate limits of the Village of Fort St. James, British Columbia. Note: The CRTC amended the original decision in Decision 85-705 PC 1984-4060 Decision 84-915 etc (amending certain Petition denied licences to authorize provisions of satellite programming) 2014 CanLIIDocs 327 PC 1985-710 Decision 85-13 (amending the licence of Petition denied Moffat Communications) PC 1985-3466 Decision 85-884 etc (renewing certain FM Petition denied licences) PC 1985-3467 Decision 85-929 (renewing the licence of Petition denied Campbell River TV) PC 1986-1619 Decision 86-434 (issuing a licence to Petition denied Armadale Communications) PC 1986-2689 Decision 86-976 etc (renewing and Petition denied amending certain licences) PC 1986-2690 Decision 86-990 (amending Westcom Petition received. Decision REFERRED BACK to provide an opportunity licence) for the people in the area affected by the placement of the transmission towers to make their views known. Note: The CRTC confirmed the original decision with changes in Decision 87-376.
51 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision CRTC Broadcasting Decision GiC Action PC 1987-85 Decision 86-1139 (approving licence Petition received. Decision REFERRED BACK to reconsider on the application by Ian Mackay) ground that application was not sufficiently publicized to allow all interested parties the opportunity to comment. Note: The CRTC confirmed the original decision without changes in Decision 88-462. PC 1987-172 Decision 86-1185 (approving licence Petition denied application by Radio Beauce) PC 1987-815 Decision 87-151 (approving licence Petitions received. Decision REFERRED BACK to consider the impact application by Nation’s Capital) the licensing of applicant could have on the CTV network and consequently on the Canadian broadcasting system. Note: The issue having become moot, the CRTC confirmed the original decision without
changes in Decision 88-275. 2014 CanLIIDocs 327 PC 1987-961 Decision 87-166 (approving licence Petitions received. Decision REFERRED BACK on the ground that applications by Telemedia CRTC failed to consider adequately the representations of the local Communications Inc. et al.) residents. Notes: The CRTC confirmed the original decision without changes in Decision 87-831. That decision was also the subject of a petition. See below. PC 1987-991 Decision 87-189 (approving licence Petition denied applications) PC 1987-1379 Decision 87-344 (amending licence of Petition denied Viking Cable) PC 1987-1453 Decision 87-376 (amending licence of Petition denied. Note: Decision 87-376 was a decision rendered as a Westcom) consequence of the referral back ordered in PC 1986-2690 PC 1987-2220 Decision 87-701 (approving application of Petition denied Racetracks Management for a licence) PC 1987-2342 Decision 87-810 (renewing certain Petition denied
52 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision CRTC Broadcasting Decision GiC Action licences) PC 1987-2388 Decision 87-831 (confirming Decision 87- Petition denied 166) PC 1988-144 Decision 87-895 etc (amending certain Petition denied licences) PC 1988-203 Decision 87-921 (amending licence of Petition denied Victoria Communications) PC 1988-1489 Decision 88-376 (amending and denying Petition denied amendments of certain licences) 2014 CanLIIDocs 327 PC 1988-2495 Decision 87-896 etc (approving Petition denied applications for licences for specialty services) PC 1988-2813 Decision 88-794 (approving licence Petitions denied application of CION-FM) PC 1989-2537 Decision 89-838 (amending licence of Representations received. Decision REFERRED BACK to explain CHEZ-FM) Commission's rationale for departing from its usual method of calculating Canadian content. Note: The licensee having voluntarily accepted an amendment to its licence, the CRTC confirmed the original decision with changes in Decision 90-512 PC 1990-2202 Decision 90-693 (issuing a licence to Petition denied Rawlco) PC 1990-2575 Decision 90-1042 (issuing a licence to A1 Petition denied Cable) PC 1992-2066 Decision 92-454 (amending the licence of Petition denied
53 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision CRTC Broadcasting Decision GiC Action Shaw Cablesytems) PC 1993-837 Decision 93-37 (approving application by Petition denied CHUM to acquire assets of CKLW et al.) PC 1993-1799 Decisions 93-235 and 236 Petitions received. Decisions REFERRED BACK to assess the availability of recorded Canadian music in the formats utilized in digital audio services and explain why licensees cannot make greater use of Canadian music content, rationale for the approval of different levels of Canadian music content for the two licences, why the said undertakings should not make maximum use of the resource of Canadian telecommunications facilities for the distribution of Canadian programming in Canada, and the rationale
for not requiring that these services be received in all parts of Canada. 2014 CanLIIDocs 327 Note: Circumstances having changed, the CRTC amended the original decision in Decision 94-670. PC 1993-1890 Decision 93-324 (approving application Petition denied by CHUM to acquire assets of CKKW et al.) PC 1994-1435 Decision 94-281 (approving licence Petition denied application by CHUM for specialty television service) PC 1994-1436 Decision 94-286 (approving licence Petition denied application by Premier Choix for specialty television service) PC 1994-1437 Decision 94-285 approving licence Petition denied application by CBC for specialty television service) PC 1994-1936 Decision 94-704 (amending licences of Petition denied
54 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision CRTC Broadcasting Decision GiC Action various cable companies) PC 1995-399 Decision 94-923 (renewing licence of Petition denied CIWW) PC 1995-400 Decision 94-924 (approving licence Petition denied applications by Rogers Cable) PC 1995-1908 Decision 95-569 (approving licence Petition denied application by CTEQ) PC 1995-1911 Decision 95-591 (amending licence of Petition denied various cable companies) 2014 CanLIIDocs 327 PC 1995-1912 Decision 95-615 (renewing licence of Petition denied CHAM) PC 1996-353 Decisions 95-901 etc (approving licence Petition denied application by ExpressVu) PC 1996-354 Decisions 95-904 etc (approving licence Petition denied applications for DTH) PC 1996-355 Decision 95-910 (approving licence Petition denied application by Sky Cable) PC 1996-356 Decisions 95-911 etc Petitions received. Decisions REFERRED BACK to assess availability of Canadian recorded music in formats utilized by digital audio services, whether pay audio programming should make greater use of Canadian content, how to calculate compliance with French-language Canadian content and music selection requirements. Notes: The CRTC confirmed the original decision without changes in Decision 96-479. The new decision was the subject of petitions to the GiC: see PC 1996-1583.
55 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision CRTC Broadcasting Decision GiC Action PC 1996-1583 Decision 96-479 (confirming Decisions Petitions denied 95-911, supra) PC1996-1734 Decisions 96-418 to 433 etc Petition received. Decisions REFERRED BACK to reconsider treatment of guarantees of long-term financing of certain licensees. Note: The CRTC confirmed the original decision without changes in Decision 97-137. PC 1996-1819 Decision 96-603 (approving licence Petition denied application by Treehouse TV) PC 1996-1885 Decision 96-632 (amending licence of Petition denied CJFP)
PC 1996-1896 Decisions 96-630 and 631 Petition received. Decisions REFERRED BACK to assess the impact of 2014 CanLIIDocs 327 licensing a second company in a small market. Note: The CRTC confirmed the original decision without changes in Decision 97-282. PC 1997-39* Decisions 96-674 etc Decisions REFERRED BACK to reconsider treatment of guarantees of long-term financing of certain licensees. Note: The CRTC confirmed the original decision without changes in Decision 97-137 PC 1997-132 Decision 96-731 (approving licence Petition denied applications by Craig Broadcasting Systems) PC 1997-682 Decision 97-82 (amending the licence of Petition denied CFMB) PC 1997-683 Decision 97-47 (amending the licence of Petition denied CFJO-FM) PC 1997-811 Decision 96-41 etc. (amending/renewing Petition denied various licences)
56 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision CRTC Broadcasting Decision GiC Action PC 1997-973 Decision 97-193 (approving licence Petition denied application by TELUS) PC 1997-1441 Decision 97-293 (approving licence Petition denied application by CBC) PC 1997-1442 Decision 97-294 (approving licence Petition denied application by CBC) PC 1997-1520 Decision 97-362 (approving licence Petition denied application by CBC) PC 1997-1598 Decision 97-370 (approving licence Petition denied application by LOOK TV) 2014 CanLIIDocs 327 PC 1998-990 Decisions 98-76 etc (amending licences of Petition denied Allarcom et al.) PC 1999-693 Decision 99-19 (approving licence Petition denied application by Blackburn Radio) PC 1999-1453 Decisions 99-109 to112 (approving Petition denied licence applications for French-language specialty TV services) PC 2000-1462 Decision 2000-203 (approving licence Petition denied applications by Milestone Radio) PC 2000-1463 Decision 2000-205 (approving licence Petition denied application by PrimeTime) PC 2000-1550 Decision 2000-219 (approving licence Petition denied application by CHUM)
57 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision CRTC Broadcasting Decision GiC Action __ Decision 2000-340 (denying licence Note. GiC advised petitioner by letter that GiC does not have the power to application by Star Ray TV) set aside a decision denying a licence application or to refer it back to the Commission for reconsideration and hearing PC 2001-2006 Decisions 2001-457 and 458 (renewing Petition denied licences of CTV and CanWest) PC 2001-2403 Decision 2001-628 (approving licence Petition denied application by Newcap) PC 2002-132 Decision 2001-678 (approving licence Petition denied application by CPAM Radio Union.com)
PC 2002-330 Decision 2001-757 (approving licence Petitions received. Decision REFERRED BACK to assess options for 2014 CanLIIDocs 327 application by World Television Network) carriage of multicultural services to broader audience. Note: The CRTC confirmed the original decision without material changes in Broadcasting Decision 2003-57 PC 2002-779 Broadcasting Decision 2002-39 Petition denied (approving licence application by Multivan Broadcast) PC 2002-966 Broadcasting Decision 2002-81 Petition denied (approving licence application by Craig Broadcast Systems) PC 2002-1154 Broadcasting Decision 2002-82 Petition denied (approving licence application by Rogers Broadcasting) PC 2003-179 Broadcasting Decision 2002-377 Petition denied (renewing licence of CPAC)
58 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision CRTC Broadcasting Decision GiC Action PC 2003-1049 Broadcasting Decision 2003-115 Petition denied (approving licence application by Canadian Multi-cultural Radio) PC 2005-228 Broadcasting Decision 2004-538 Petition denied (approving licence application of CFTF) PC 2005-609 Broadcasting Decision 2005-15 Petition denied (approving applications by Astral and Corus to acquire radio undertakings) PC 2005-1635 Broadcasting Decision 2005-246 and 247 Petition denied (approving applications by Canadian 2014 CanLIIDocs 327 Satellite Radio and Sirius Canada for licences) PC 2005-1636 Broadcasting Decision 2005-248 Petition denied (approving licence application by CHUM) PC 2005-1772 Broadcasting Decision 2005-338 and 339 Petition denied (approving licence application by IT Productions and South Asian Broadcasting) PC 2006-746 Broadcasting Decision 2006-193 Petition denied (approving licence application by Allarco) PC 2006-1150 Broadcasting Decisions 2006-323 and 324 Petition denied (approving licence application by Newcap and CHUM) PC 2007-1604 Broadcasting Decision 2007-246 (issuing Petitions received. Decision REFERRED BACK to reconsider whether licence to National Broadcast Reading service is of exceptional importance and therefore should be carried on
59 Ryan: ‘Cabinet Appeals’ and the CRTC
GiC Decision CRTC Broadcasting Decision GiC Action Services) digital basic service. Note: The CRTC confirmed the original decision with changes in Broadcasting Decision 2008-12 PC 2007-1605 Broadcasting Decision 2007-246 Petition denied (renewing the licences of TQS et al.) PC 2008-1586 Broadcasting Decision 2008-129 Petition denied (renewing the licences of CFJP-TV Montréal et al.) PC 2008-1769 Petitions received. Decisions REFERRED BACK to reconsider and Broadcasting Decision 2008-222 explain its approach to evaluating the needs of official language minorities. (approving applications by Astral Media PC 2008-1770 Note: The CRTC confirmed the original decision with changes in
Radio inc. and by Frank Torres) 2014 CanLIIDocs 327 Broadcasting Decision 2009-481. PC 2009-1442 Broadcasting Decision 2009-318 Petition denied (approving licence application by Bayshore Broadcasting) PC 2010-90 Broadcasting Decision 2009-673 Petition denied (approving licence application by CBC) PC 2011-541 Broadcasting Decision 2011-41 Petition denied (approving licence application by Golden West Broadcasting) PC 2012-1043 Broadcasting Decision 2012-308 Petition denied (approving licence applications by Multicultural Broadcast Corp and Jim Pattison) Broadcast Group) PC 2012-1650 Broadcasting Decision 2012-485 Petition denied
60 Ryan: ‘Cabinet Appeals’ and the CRTC 2014 CanLIIDocs 327
61