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 1 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: