Judgments

Decision Information

Decision Content

T-8340-82
Alberta Government Telephones (Applicant) v.
Canadian Radio-television and Telecommunica tions Commission and CNCP Telecommunica tions (Respondents)
and
Attorney General of Canada (Intervenor)
Trial Division, Reed J. — Edmonton, May 28, 29, 30, 31; Ottawa, October 26, 1984.
Telecommunications — Jurisdiction — CRTC — Applicant provincial Crown agent operating telecommunications system
— Seeking to prohibit CRTC from hearing application requir ing it to provide interconnection services — Regulatory au thority of CRTC over applicant — Applicant non-local under taking — Crown immunity — Provincial Crown not bound by federal legislation unless by express statement or necessary implication — No waiver of immunity — Prohibition allowed
— Railway Act, R.S.C. 1970, c. R-2, ss. 5, 102(1)(c),(d), 130(1), 265(1),(7), 320(1),(7),(12) (as am. by S.C. 1974-75-76, c. 41, s. 1) — The Railway Act, 51 Vict., c. 259, s. 3 — The Government Railways Act, R.S.C. 1886, c. 38 — Government Railways Act, R.S.C. 1970, c. G-11 — National Transporta tion Act, R.S.C. 1970, c. N-17 (as am. by S.C. 1976-77, c. 26)
— Aeronautics Act, R.S.C. 1970, c. A-3 (as am. by S.C. 1976-77, c. 26) — Public Utilities Board Act, R.S.A. 1980, c. P-37.
Constitutional law — Distribution of powers — Provincial Crown agent operating telecommunications system — Whether undertaking local or interprovincial — Test: significant amount of continuous and regular interprovincial activity — Nature of enterprise, not physical equipment, crucial feature — Physical and sufficient organizational interconnection plac ing enterprise within federal jurisdiction — Factual determi nation — Undertaking interprovincial, not merely local in nature — Constitution Act, 1867, 30 & 31 Vict., c. 3 (U.K.) IR.S.C. 1970, Appendix II, No. 5] (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1), s. 92(10)(a),(c).
Crown — Immunity — Whether applicant, provincial Crown agent operating telecommunications services, bound by federal legislation — Description of "Her Majesty" in s. 28 Interpre tation Act not imparting into s. 16 of Act immunity for Crown in all its emanations — Provincial Crown not bound by federal legislation unless by express statement or necessary implica tion or waiver of immunity — No express statement in Rail way Act — Necessary implication arising out of text of statute
— Legi.lative provisions relied upon no assistance — No waiver of immunity — Benefit-burdens doctrine — Applicant
not submitting to regulatory authority of CRTC by participat ing in benefits — Interpretation Act, R.S.C. 1970, c. I-23, ss. 3(1),(2), 14(2)(a), 16, 28 — Railway Act, R.S.C. 1970, c. R-2 — An Act respecting the Royal Style and Titles, R.S.C. 1970, c. R-12.
This is an application for a writ of prohibition to prevent the CRTC from proceeding with an application made to it by CNCP. CNCP seeks an order from the CRTC requiring Alberta Government Telephones (AGT) to provide intercon nection services to CNCP. It is argued that the CRTC lacks jurisdiction on the grounds that (1) AGT is a local work or undertaking therefore subject to exclusive provincial jurisdic tion pursuant to subsection 92(10) of the Constitution Act, 1867 (the constitutional issue) and (2) as a provincial Crown agent AGT is not bound by federal legislation (the Crown immunity issue).
The facts indicate that the telecommunications facilities of AGT are physically connected to the systems of other telecom munications carriers outside Alberta by microwave and buried cable. AGT takes signals emanating from its subscribers (or from outside Alberta) and transmits them to points outside Alberta (or within Alberta). On the organizational level, there exists an unincorporated entity, TransCanada Telephone System (TCTS), of which AGT is an integral part, composed of the various member telecommunications carriers. Each member retains ultimate control over its own telecommunica tions system.
Held, the application should be allowed. (1) Constitutional issue
The applicable test for deciding whether the undertaking is local or interprovincial is to determine whether it engages in a significant amount of continuous and regular interprovincial activity. The "pith and substance" test, argued by AGT as being the proper test, is used to determine the validity of the legislation, a matter not at issue in the instant case. The issue is whether AGT, once created, can be validly regulated by federal legislation because of the nature of its undertaking.
AGT contends that since its physical facilities do not extend outside the boundaries of the province of Alberta, it does not engage in interprovincial activity. Paragraph 92(10)(a) of the Constitution Act, 1867 applies not only to undertakings "extending beyond the limits of the Province", but also to undertakings "connecting the Province with any other or others of the Provinces". The paragraph does not require that physical facilities exist outside the province in order for the enterprise to be classified as an interprovincial undertaking. Furthermore, AGT's argument places emphasis on the location and nature of the physical facilities of the enterprise, which emphasis is not supported by the authorities.
The crucial feature, then, is the nature of the enterprise itself, not the physical equipment it uses. AGT's physical facilities are used to provide its customers local, interprovincial
and international telecommunications services without discrimi nation. Its services are totally integrated. One could not sepa rate the local from the non-local without emasculating AGT's enterprise as it presently exists.
The decision of the Supreme Court of Canada in Kootenay & Elk Railway Co. v. Canadian Pacific Railway Co., [19741 S.C.R. 955 is of no assistance to the applicant. In that case, the Court was concerned only with the railway company before any interconnection had in fact taken place. There was given a clear indication that, once the interconnection with the American railway was made, the character of the whole enterprise might be changed and become subject to federal legislation.
Physical interconnection, however, is not enough to sweep an enterprise under federal jurisdiction. Regard must be had to the organizational structure of the enterprise. There must be, according to the applicant, a sufficient organizational intercon nection. The applicant submits that this element is not present in the case at bar: TCTS is not a legal entity and thus cannot be said to provide services to anyone; the contracting parties provide services to their own customers and retain ultimate control over their own telecommunications systems.
That argument was not convincing. It was too fine a legal distinction on which to base what is really a factual determina tion. The existence of TCTS, and AGT's participation in it, demonstrate the common and joint telecommunications enter prise which exists. It demonstrates that AGT operates its telecommunications undertaking as an interprovincial under taking not merely local in nature. Although AGT may, from a legal standpoint, retain control over its own facilities, it could not, as a practical reality, separate itself from the joint TCTS enterprise without destroying its telecommunications system in its present form.
Finally, the fact that neither Parliament nor the federal government have attempted during the past 80 years to regu late AGT does not mean that there is thereby created some sort of constitutional squatters rights. AGT is a non-local undertak ing as described in paragraph 92(10)(a) of the Constitution Act, 1867.
(2) Crown immunity issue
Section 16 of the Interpretation Act provides that no enact ment is binding on Her Majesty "except only as therein men tioned or referred to". Section 28 of the Act defines "Her Majesty" as the Sovereign of all Her Realms and Territories. The contention that the section 28 description imported to section 16 an immunity for the Crown in all its emanations (including the Crown in right of the province of Alberta) could not be accepted. Section 28 is merely a description of Her Majesty's title as it appears in An Act respecting the Royal Style and Titles.
The question remains whether section 16 should be interpret ed as referring to the federal Crown as well as the provincial Crown. Whether Crown immunity be considered as a canon of statutory construction or as an aspect of prerogative rights, there would be today persuasive reasons for the view that such immunity in federal legislation related only to the federal and
not to the provincial Crown. This flows from the division between legislative functions and prerogative rights in our federation. In any event, whether the Crown immunity rule be an historical inheritance from the days when governments were less active in non-traditional government areas, or when the unity of the Crown was a factual reality, it still remains part of our law. Accordingly, it is clear that AGT will not be governed by the Railway Act nor by the regulatory authority of the CRTC unless the relevant provisions of the statute either by express statement or by necessary implication bind the provin cial Crown or unless it can be said that AGT has waived its Crown immunity.
Express statement or necessary implication
There is no express statement in the Railway Act binding the provincial Crown. CNCP argues that AGT is bound as a matter of necessary implication, and that a finding of necessary implication arises out of the text of the statute itself. AGT's argument, that the Supreme Court of Canada in Her Majesty in right of the Province of Alberta v. Canadian Transport Commission, [1978] 1 S.C.R. 61 and in R. v. Eldorado Nuclear Ltd., [1983] 2 S.C.R. 551, intended to rule out the necessary implication doctrine, was not convincing. Such an assertion might have been justified had the Supreme Court considered the interaction of sections 3 and 14 of the Interpre tation Act with section 16 of the said Act.
CNCP's first argument, based on sections 102(1)(c) and (d) and 130(1) of the Railway Act, was to be rejected on the ground that those sections were irrelevant.
CNCP's second argument, based on subsection 320(1) and section 5 of the Railway Act (in its present form and as it appeared in the Railway Act of 1888), should also be rejected. It was unreasonable to interpret the present provisions with respect to telecommunications carriers by reference to a provi sion dating from 1888 respecting railways, given the disorderly growth of the Railway Act.
Waiver of immunity
CNCP argues that AGT by its actions has waived its right to immunity and is therefore bound by the Railway Act. It relies on the Supreme Court of Canada decision in The Queen in the Right of the Province of Ontario v. Board of Transport Com missioners, [1968] S.C.R. 118. In that case, the Supreme Court applied the benefit-burdens doctrine: where a govern ment waives its immunity by taking advantage of legislative provisions, it will be taken to have assumed both the benefits and the burdens thereunder; it cannot choose merely the advan tageous provisions. But it would be stretching that doctrine too far to hold that AGT, by its participation in the benefit of the TCTS agreements, had submitted itself to the general jurisdic tion of the CRTC. There is no nexus between the waiver of immunity with respect to the TCTS agreements and the claim being made by CNCP that AGT be ordered to provide it with interconnection. The conclusion might be different if CNCP were a member of TCTS or if the requested interconnection related to an existing AGT/CNCP agreement.
Finally, CNCP's argument that AGT is an agent of the provincial Crown in so far as it provides local telecommunica tions services but once it moved beyond that realm of activity it lost that status, must be rejected. The incorporating power of a federal or provincial government is quite distinct from its legislative jurisdiction. The Supreme Court decisions in Fulton et al. v. Energy Resources Conservation Board et al., [1981] 1 S.C.R. 153 and in Kootenay & Elk (supra) seem to indicate that a provincial legislature can incorporate entities to operate in federally-regulated fields.
CASES JUDICIALLY CONSIDERED
DISTINGUISHED:
The Queen in the Right of the Province of Ontario v. Board of Transport Commissioners, [1968] S.C.R. 118; Toronto Transportation Commission v. The King, [1949] S.C.R. 510; Schwella, John F. v. The Queen and Hydro Electric Power Commission of Ontario et al., [1957] Ex.C.R. 226.
CONSIDERED:
Capital Cities Communications Inc. et al. v. Canadian� Radio-Television Commn., [1978] 2 S.C.R. 141; In de Regulation and Control of Radio Communication in Canada, [1932] A.C. 304 (P.C.); Toronto Corporation v. Bell Telephone Company of Canada, [1905] A.C. 52 (P.C.); Public Service Board et al. v. Dionne et al., [1978] 2 S.C.R. 191; Kootenay & Elk Railway Co. v. Canadian Pacific Railway Co., [1974] S.C.R. 955; Luscar Collieries v. McDonald, [1927] A.C. 925 (P.C.); Her Majesty in right of the Province of Alberta v. Canadian Transport Commission, [1978] 1 S.C.R. 61; R. v. Eldorado Nuclear Ltd., [1983] 2 S.C.R. 551; 50 N.R. 120.
REFERRED TO:
Attorney-General for Ontario v. Israel Winner, [1954] A.C. 541 (P.C.); Fulton et al. v. Energy Resources Conservation Board et al., [1981] 1 S.C.R. 153; [1981] 4 W.W.R. 236; R. v. Borisko Brothers Quebec Ltd. (1969), 9 C.C.C. (2d) 227 (Que. S.P.); Re Windsor Airline Limousine Services Ltd. and Ontario Taxi Association 1688 et al. (1980), 30 O.R. (2d) 732 (H.C.); Construc tion Montcalm Inc. v. Minimum Wage Commission, [1979] 1 S.C.R. 754; Northern Telecom Ltd. v. Com munications Workers of Canada, [1980] 1 S.C.R. 115; Re Ottawa-Carleton Regional Transit Commission and Amalgamated Transit Union, Local 219 [sic] et al. (1983), 144 D.L.R. (3d) 581 (Ont. H.C.), affirmed (1984), 1 O.A.C. 177 (C.A.); Arrow Transfer Co. Ltd. and Canadian Assoc. of Industrial, Mechanical and Allied Workers, Local I (B.C.) and General Truckdrivers and Helpers Union, Local 31 (Intervener), [1974] 1 Canadian LRBR 29 (B.C.); Attorney General of Manitoba v. Forest, [1979] 2 S.C.R. 1032; Maritime Bank of Canada (Liquidators of) v. Receiver-General of New Brunswick, [1892] A.C. 437 (P.C.); Bonanza Creek Gold Mining Company v. Rex, [1916] 1 A.C. 566 (P.C.);
Attorney-General for the Dominion of Canada v. Attor- ney-General for the Province of Ontario, [1898] A.C. 247 (P.C.); Regina v. Secretary of State for Foreign and Commonwealth Affairs, Ex parte Indian Association of Alberta, [1982] Q.B. 892 (C.A.); Province of Bombay v. Municipal Corporation of the City of Bombay and Another, [1947] A.C. 58 (P.C.); In re Silver Brothers Ld., [1932] A.C. 514 (P.C.); Conseil des Ports Nationaux v. Langelier et al., [1969] S.C.R. 60; Canadi- an Broadcasting Corporation, Television Station C.B.O.F.T. et al. v. The Queen, [1983] 1 S.C.R. 339.
COUNSEL:
John D. Rooke, W. Henkel and D. W Kin- loch for applicant.
C. R. O. Munro, Q.C. and Michael Ryan for respondent CNCP Telecommunications. Eric A. Bowie, Q.C. and D. J. Rennie for intervenor Attorney General of Canada. Gregory van Koughnett for respondent Canadian Radio-television and Telecommuni cations Commission.
SOLICITORS:
Burnet, Duckworth & Palmer, Calgary, for applicant.
Law Department, Canadian Pacific Limited, Montreal, for respondent CNCP Telecom munications.
Deputy Attorney General of Canada for respondent Canadian Radio-television and Telecommunications Commission and inter- venor Attorney General of Canada.
The following are the reasons for order ren dered in English by
REED J.: This is an application for a writ of prohibition to prevent the Canadian Radio-televi sion and Telecommunications Commission (the CRTC) from proceeding with an application made to it by CNCP Telecommunications. The CNCP application seeks an order from the CRTC requir ing Alberta Government Telephones (AGT) to provide facilities for the interchange of telecom munication traffic between the telegraph and tele phone systems and lines operated by CNCP and those operated by AGT. The application also asks, among other things, that the CRTC set the com pensation therefor.
AGT argues that the CRTC has no jurisdiction to deal with this application. Two reasons for this contention are given: (1) AGT is a local work or undertaking and consequently not within the con stitutional jurisdiction of the federal Parliament (the constitutional issue); (2) AGT is a provincial Crown agent and therefore not within the jurisdic tion of the CRTC because it is not bound by the relevant federal legislation (the Crown immunity issue).
CNCP's application to the CRTC is made pur suant to subsections 320(7) and (12), and subsec tions 265(1) and (7) of the Railway Act, R.S.C. 1970, c. R-2 as amended [by S.C. 1974-75-76, c. 41, s. 1]. Despite its name, this Act contains within it the regulatory provisions governing telecom munication enterprises falling within its scope. The Act accords the authority to exercise the regulato ry power so established to the CRTC.
The relevant sections, noted above, are some what tortuous in their construction and therefore I do not propose to set them out here. Suffice it to say that if either of the two contentions raised by AGT are valid, the CRTC has no jurisdiction to deal with the application before it. If both are invalid, the CRTC has jurisdiction.
EDITOR'S NOTE
The Editor has chosen to omit some 15 pages of these reasons for judgment. The deleted ma terial, entirely factual in nature, consists in a review of:• the physical facilities of both Alberta Government Telephones and the Canadian tele communications system; the range of services offered; rates charged and the contractual arrangements, organization, management and functions of the TransCanada Telephone System.
Summarizing some of the salient facts: the tele communications facilities of AGT are physically connected to the systems of other telecommunica tions carriers outside the province of Alberta: by microwave at two places on the Saskatchewan border, at two places on the British Columbia border, at one location on the United States border and at one location on the border with the North west Territories, and by buried cable across the borders at various points. In describing this
microwave linkage as physical I am using that word in its broadest sense. I am not unmindful of Lord Porter's comments in Attorney-General for Ontario v. Israel Winner, [1954] A.C. 541 (P.C.) at page 574, that to characterize the flow of an electric discharge across the frontier of a province as a physical connection is a fanciful suggestion. However, it is clear from the Supreme Court decision in Capital Cities Communications Inc. et al. v. Canadian Radio-Television Commn., [1978] 2 S.C.R. 141 at page 159, that the technology of transmission is not the legislatively significant factor.
AGT takes signals emanating from its subscri bers' telephone sets and transmits them to points outside Alberta; it takes signals emanating from outside Alberta and transmits them to the intend ed receiver in Alberta; and in some cases it may transmit signals through Alberta.
AGT's physical telecommunications facilities not only connect at the borders, there is also a more pervasive integration. The same telephone sets, line, exchanges and microwave networks are used for the provision of local and interprovincial services as well as international ones. It is clear that many AGT employees are involved in the provision of both intraprovincial and extraprovin- cial services without distinction.
On the organizational level there exists an unin- corporated entity, TCTS [TransCanada Telephone System]; composed of the various member tele communications carriers, each having an equal voice. This organization, of which AGT is an integral part, both at the managerial level and seemingly at the staff level, engages in planning for the construction and operation of the overall network which is comprised of each members' facilities; sets technical standards; establishes terms and conditions under which telecommunica tions services will be provided by the members; performs a joint marketing function; determines rates; acts as the pivotal entity for negotiating and implementing agreements for the provision of international services; operates a system of revenue sharing through the TCTS Clearing House.
Constitutional Issue
AGT contends that the CRTC does not have constitutional jurisdiction to order it to provide interconnection services to CNCP because AGT is a local work or undertaking and therefore subject to exclusive provincial jurisdiction pursuant to sub section 92(10) of the Constitution Act, 1867 [30 & 31 Vict., c. 3 (U.K.) [R.S.C. 1970, Appendix II, No. 5] (as am. by Canada Act 1982, 1982, c. 11 (U.K.), Schedule to the Constitution Act, 1982, Item 1)]:
92. In each Province the Legislature may exclusively make Laws in relation to Matters coming with the Classes of Sub jects next herein-after enumerated; that is to say,-
10. Local Works and Undertakings other than such as are of the following Classes:—
a. Lines of Steam or other Ships, Railways, Canals, Tele graphs, and other Works and Undertakings connecting the Province with any other or others of the Provinces, or extending beyond the Limits of the Province:
The first point to consider is the applicant's contention that the proper test for deciding wheth er an undertaking is local or interprovincial under subsection 92(10) is to determine whether the pith and substance of its activity is local or interprovin- cial. It is contended that it is not enough to determine whether the undertaking engages a sig nificant amount of continuous and regular inter- provincial activity. In support of this proposition were cited: Attorney-General for Ontario v. Israel Winner, [1954] A.C. 541 (P.C.) at page 582; Fulton et al. v. Energy Resources Conservation Board et al., [1981] 1 S.C.R. 153; [1981] 4 W.W.R. 236; R. v. Borisko Brothers Quebec Ltd. (1969), 9 C.C.C. (2d) 227 (Que. S.P.); and Re Windsor Airline Limousine Services Ltd. and Ontario Taxi Association 1688 et al. (1980), 30 O.R. (2d) 732 (H.C.) at pages 736-737.
There may in fact be little difference between the two tests cited above but, in my view, it is the latter which has been developed in the jurispru dence. The pith and substance concept is one used in determining the vires of legislation; I think it confuses matters to also employ it for the purpose of determining the nature (interprovincial or local) of an undertaking. The pith and substance test will, of course, be applicable if the validity of
legislation is challenged, for example, as invalid for being designed to regulate intraprovincial or extraprovincial undertakings, as the case may be, but often this will not be the issue. The legislation will often, on its face, be neutral, the issue will be whether it applies to govern certain enterprises given the nature (local or interprovincial) of those enterprises. In this case there is no need to deter mine the vires of the legislation at all. I did not understand counsel for CNCP to be arguing that the Alberta legislation creating AGT is invalid nor that the Public Utilities Board Act of Alberta [R.S.A. 1980, c. P-37] is invalid. The issue, rather is whether AGT, once created, can be validly regulated by federal legislation because of the nature of its undertaking.
I note also that the pith and substance concept has been used (e.g. Winner case (supra)) by the courts to indicate that they will not be prepared to classify as either local or extraprovincial enter prises which attempt to masquerade as one or the other but are not genuinely so. This is referred to in Hogg, Constitutional Law of Canada, at page 327 as an instance of "the familiar colourability doctrine applied to interprovincial undertakings". Even this usage of the concept "pith and sub stance" in relation to the nature of an undertaking has been overtaken, it seems to me, by the develop ment of a test requiring a "significant amount of continuous and regular extraprovincial activity".
This test does not demand that the extraprovin- cial portion of an undertaking's enterprise must dominate but it does mean that occasional and irregular extraprovincial activity will not lead to a characterization of the enterprise as falling within federal jurisdiction. See generally: Construction Montcalm Inc. v. Minimum Wage Commission, [1979] 1 S.C.R. 754; Northern Telecom Ltd. v. Communications Workers of Canada, [1980] 1 S.C.R. 115 at pages 131-133; Re Ottawa-Carleton Regional Transit Commission and Amalgamated Transit Union, Local 219 [sic] et al. (1983), 144 D.L.R. (3d) 581 (Ont. H.C.), affirmed (1984), 1 O.A.C. 177 (C.A.), especially pages 183-186.
The second point to note is that there is agree ment that AGT's enterprise constitutes an under taking as that term has been used in subsection 92(10). The dispute is whether it should be charac terized as a local undertaking, or as one "connect- ing the Province with any other or others of the Provinces, or extending beyond the Limits of the Province".
The evidence seems to leave little scope for anything but a conclusion that AGT engages in a significant degree of continuous and regular inter- provincial activity, and therefore must be classified as the latter.
AGT's argument that this is not the case focusses on two aspects of its undertaking: (1) its physical facilities do not extend outside the bound aries of the province of Alberta (if one ignores the Lloydminster situation and the spill-over along the border which occurs in the case of the mobile service), and (2) TCTS is not a legal entity—the organizational structure of TCTS is such that each member retains ultimate control over its own tele communications system, thus the proper charac terization of the enterprise is an aggregation of local systems, not an integrated national system.
I would paraphrase AGT's first argument as follows: the evidence that the TCTS microwave network in Alberta is identical with that of AGT's does not prove that AGT is an integral part of a federal undertaking; rather it is suggestive of the fact that there is no such undertaking at all, but rather that the so called "national network" is merely an aggregate of local and regional systems. AGT does not provide services of any kind outside the borders of Alberta; it merely provides the means by which its customers can access the users of other telecommunications systems in other juris- dictions, it does not provide the service itself.
The first hurdle this argument has to face is the text of paragraph 92(10)(a) itself. That text does not merely bring within the scope of paragraph 92(10)(a) undertakings "extending beyond the Limits of the Province", it also applies to "Under- takings connecting the Province with any other or others". The words of the paragraph do not seem to require that in order to be classified as an
interprovincial undertaking there must be physical facilities of that undertaking existing outside the province.
In addition, it seems to me that AGT's argu ment places undue emphasis on the location and nature of the physical facilities of the enterprise, which emphasis the jurisprudence does not bear out. An "undertaking" was defined in In re Regu lation and Control of Radio Communication in Canada, [1932] A.C. 304 (P.C.) at pages 314-315. In that case it was argued that a broadcasting enterprise was not an undertaking because the "Works and Undertakings" in paragraph 92(10)(a) referred to physical things, not services, and also because the transmitter and receivers were property operating wholly within their respective provinces. The Judicial Committee of the Privy Council said:
The argument of the Province really depends on making, as already said, a sharp distinction between the transmitting and the receiving instrument. In their Lordships' opinion this cannot be done.... Broadcasting as a system cannot exist without both a transmitter and a receiver. The receiver is indeed useless without a transmitter and can be reduced to a nonentity if the transmitter closes. The system cannot be divided into two parts, each independent of the other.
"Undertaking" is not a physical thing, but is an arrangement under which of course physical things are used.
Their Lordships have therefore no doubt that the undertak ing of broadcasting is an undertaking "connecting the Province with other Provinces and extending beyond the limits of the Province." But further, as already said, they think broadcasting falls within the description of "telegraphs." No doubt in every day speech telegraph is almost exclusively used to denote the electrical instrument which by means of a wire connecting that instrument with another instrument makes it possible to com municate signals or words of any kind. But the original mean ing of the word "telegraph," as given in the Oxford Dictionary, is: "An apparatus for transmitting messages to a distance, usually by signs of some kind." Now a message to be transmit ted must have a recipient as well as a transmitter. The message may fall on deaf ears, but at least it falls on ears. Further, the strict reading of the word "telegraph," making it identical with the ordinary use of it, has already been given up in Toronto Corporation v. Bell Telephone Co. of Canada. [Underlining added.]
The decision in Toronto Corporation v. Bell Telephone Company of Canada, [ 1905] A.C. 52 (P.C.), of course, dealt with a company which has and had facilities in two provinces (Ontario and Quebec) and whose incorporating statute gave it authority so to operate. In that context the Judicial
Committee of the Privy Council, at page 59, described the company's activities as follows:
The undertaking of the Bell Telephone Company was no more a collection of separate and distinct businesses than the under taking of a telegraph company which has a long-distance line combined with local business, or the undertaking of a railway company which may have a large suburban traffic and miles of railway communicating with distant places.
In addition I note that in the Capital Cities case (supra) at page 159 the Supreme Court referred to interprovincial undertakings as ones "which reach out beyond the Province in which their physical apparatus is located"; and in Public Service Board et al. v. Dionne et al., [1978] 2 S.C.R. 191 at page 197:
In all these cases, the inquiry must be as to the service that is provided and not simply as to the means through which it is carried on.
The crucial feature then is the nature of the enterprise itself, not the physical equipment it uses. AGT offers to its customers, local, interpro- vincial and international telecommunications ser vices. Its physical facilities are used to provide all three without discrimination—the services are totally integrated. Indeed, one could not separate the local from the non-local without emasculating AGT's enterprise as it presently exists.
The applicant relies heavily on the recent Supreme Court decision in Kootenay & Elk Rail way Co. v. Canadian Pacific Railway Co., [1974] S.C.R. 955. In that case the Supreme Court held that the Kootenay and Elk Railway Company was not part of an extraprovincial undertaking and therefore its incorporation by the British Columbia government was valid. The company had been incorporated to build and operate a railway to within one-quarter inch of the United States border. It was proposed that the railway would be operated by Kootenay's crews up to the border, then the crews of the Burlington company would take over and operate the trains south of the border.
I do not think this case is much comfort for the applicant. While the Supreme Court held that the Kootenay company was not part of an extraprovin- cial undertaking, the Court was concerned only
with the company before any interconnection had in fact taken place. The issue the Court dealt with was whether or not a provincial legislature could incorporate a company to construct a line to within one-quarter inch of the border as Kootenay con templated. At the same time that an affirmative response was given to that question, there was also given clear indication that, once the interconnec tion with the Burlington railway was made, the character of the whole enterprise might be changed. At page 982:
In summary, my opinion is that a provincial legislature can authorize the construction of a railway line wholly situate [sic] within its provincial boundaries. The fact that such a railway may subsequently, by reason of its interconnection with another railway and its operation, become subject to federal regulation does not affect the power of the provincial legislature to create it.
In addition to focussing on the construction of the railway, Mr. Justice Martland, who wrote for the majority of the Court in the Kootenay & Elk case, at page 980 referred to the decision in Luscar Collieries v. McDonald, [1927] A.C. 925 (P.C.). In that case a railway branch line operating entire ly within one province and owned by the respond ents for their own industrial purposes was held to be an interprovincial undertaking. At page 932, the Judicial Committee of the Privy Council said:
It is, in their view, impossible to hold as to any section of that system which does not reach the boundary of a Province that it does not connect that Province with another. If it connects with a line which itself connects with one in another Province, then it would be a link in the chain of connection, and would properly be said to connect the Province in which it is situated with other Provinces.
In the present case, having regard to the way in which the railway is operated, their Lordships are of opinion that it is in fact a railway connecting the Province of Alberta with others of the Provinces .... There is a continuous connection by railway between the point of the Luscar Branch farthest from its junction with the Mountain Park Branch and parts of Canada outside the Province of Alberta. [Underlining added.]
In the Luscar case, the branch line was not operated by the owner but was operated by Canadian National pursuant to an agreement with the owner. This inter-related operation was signifi cant, both in the eyes of the Judicial Committee and for Mr. Justice Martland in the Kootenay & Elk case. He wrote at pages 980-981:
In Luscar Collieries, Limited v. McDonald, the question was as to the power of the federal Railway Board to make an order
for running rights over the appellant's line .... The ground of decision in that case was, however, the fact that the Luscar line was operated by C.N.R.
It is of interest to note, in that case, that the statute which authorized the construction of the Luscar line was enacted by the Alberta Legislature, and that it also provided for the Luscar company entering into an agreement with C.N.R. for the operation of its railway. It is clear that the purpose of the Luscar line was to assist in marketing its coal beyond the province. There was no suggestion in that case that the Alberta Legislature could not enact such a provision. The point of the case was that once the line, by reason of its operation, had become a part of an inter-provincial railway system it became subject to federal regulation. [Underlining added.]
It is clear, then, as AGT contends, physical interconnection may not be enough to sweep an enterprise under federal jurisdiction. Something more is needed and this has been described as how the system is operated.
This then brings us to AGT's second argument. It argues that the second requisite element for the finding of an interprovincial undertaking (what I will call sufficient organization interconnection) is not present. To paraphrase the argument: TCTS is not a legal entity and thus cannot be said to provide services to anyone; the contracting parties provide services to their own customers in their own systems and interchange traffic with other carriers; that is so even though, for commercial or public relations reasons, AGT has chosen to repre sent itself (in conjunction with other telecommuni cations undertakings) as jointly operating a na tional telecommunications network; and while the parties have agreed to unanimously agree, they retain ultimate control over their own telecom munications systems.
I do not find this argument convincing. It seems to me it gives too much importance to the niceties of legal structure rather than focussing on the realities of the situation. Implicit in the argument is an admission that if TCTS were an incorporated organization it would clearly be an interprovincial undertaking. This is too fine a legal distinction on which to base what is really a factual determina-
tion. I note that in Northern Telecom Ltd. v. Communications Workers of Canada, [ 1980] 1 S.C.R. 115, at pages 132-133 the Supreme Court quoted from the British Columbia Labour Rela tions Board decision in Arrow Transfer Co. Ltd. and Canadian Assoc. of Industrial, Mechanical and Allied Workers, Local 1 (B.C.) and General Truckdrivers and Helpers Union, Local 31 (Intervener), [ 1974] 1 Canadian LRBR 29 [at pages 34 and 35]:
In each case the judgment is a functional, practical one about the factual character of the ongoing undertaking and does not turn on technical, legal niceties of the corporate structure or the employment relationship.
The issue in those cases was, of course, whether the respective enterprises were extraprovincial so as to fall within federal labour relations jurisdic tion.
In my view, the existence of TCTS, and AGT's participation in it, demonstrates the common and joint telecommunications enterprise which exists. It demonstrates that AGT operates its telecom munications undertaking as an interprovincial undertaking and not as one merely local in nature. Also, as a legal proposition AGT may retain con trol over its own facilities; but as a practical reality it could not separate itself from the joint TCTS enterprise without destroying its telecommunica tions system in its present form. The fact that unanimous agreement is required by TCTS mem bers should not disguise the constraints, the exist ence of the integrated system and the interdepend ence of the members will impose.
Repeated reference was made to the fact that the federal Parliament and government have never attempted, during the 80 years or so during which telephone systems have grown up, to regulate AGT. Bell Canada, which operates in Ontario and Quebec and which has been declared pursuant to paragraph 92(10)(c) to be a work for the general advantage of Canada, has been federally regulat ed; so has the British Columbia Telephone Com pany (also the subject of a paragraph 92(10)(c) declaration) and CN with respect to its "North- west Telephone system". Telesat Canada is, of
course, federally regulated. The fact that constitu tional jurisdiction remains unexercised for long periods of time or is improperly exercised for a long period of time, however, does not mean that there is thereby created some sort of constitutional squatters rights. (Refer: Attorney General of Manitoba v. Forest, [1979] 2 S.C.R. 1032 for a case in which unconstitutional action had remained unchallenged for ninety years.)
I conclude, therefore, that AGT is a non-local undertaking as described in paragraph 92(10)(a) of the Constitution Act, 1867.
Crown Immunity Issue
Prima facie the Crown (both federal and provin cial) is a legal person and without special rules respecting Crown immunity would fall under the clear wording of the relevant sections of the Rail way Act.
The applicant's argument, however, is that as an agent of the provincial government, it is not bound by federal legislation unless that legislation expressly states that it is intended to bind the Crown provincial. The argument relies on section 16 of the federal Interpretation Act, R.S.C. 1970, c. 1-23 and the definition of "Her Majesty" set out in section 28 of that Act.
Section 16 provides:
16. No enactment is binding on Her Majesty or affects Her Majesty or Her Majesty's rights or prerogatives in any manner, except only as therein mentioned or referred to.
The definition of "Her Majesty" in section 28 of the Interpretation Act (applicable to all federal enactments) provides:
28....
"Her Majesty", "His Majesty", "the Queen", "the King" or "the Crown" means the Sovereign of the United Kingdom, Canada and Her other Realms and Territories, and Head of the Commonwealth;
This definition is read back into section 16 of the Act by virtue of subsection 3(2):
3....
(2) The provisions of this Act apply to the interpretation of this Act.
The argument made is that since "Her Majesty" is described in section 28 as the Sovereign of all Her Realms and Territories, this imparts into fed eral statutes the concept of the indivisibility of the Crown and particularly into section 16 an immuni ty for the Crown in all its emanations (one of which is the Crown in right of the province of Alberta).
I have some difficulty with this reliance on the definition in section 28. It is merely a description of Her Majesty's title as it appears in An Act respecting the Royal Style and Titles, R.S.C. 1970, c. R-12. More importantly, if the section 28 description of Her Majesty carries with it a con cept of the indivisibility of the Crown, then it seems to me it would impart into federal legisla tion immunity for all the governments and sub- units thereof around the world for which Her Majesty is Sovereign. I am not unmindful of the fact that foreign governments (Commonwealth or otherwise) are accorded immunity from much domestic law by operation of other legal rules or presumptions. Nevertheless, I find it difficult to accept, conceptually, that the operation of section 16 of the Interpretation Act, as fed by the defini tion of Her Majesty in section 28 accords to all agencies of government for which Her Majesty is Sovereign immunity from federal legislation.
In addition, it seems to me that this kind of literal reading of section 16 together with section 28 would mean that the enacting clauses of all federal legislation would have to be interpreted as referring not only to Her Majesty in right of the federal government of Canada, but also to Her Majesty in all her other emanations.
What then of section 16, if it is not interpreted as being fed by the definition of "Her Majesty" set out in section 28? Should it be interpreted as referring only to the Crown federal or should it also be interpreted as granting immunity to the Crown provincial as well?
Crown immunity is sometimes considered a canon of statutory construction, sometimes an aspect of prerogative rights. (See McNairn, Gov-
emmental and Intergovernmental Immunity in Australia and Canada (1977) at page 1; Hogg, Constitutional Law of Canada (1977) at pages 163 and 172; Hogg, Liability of the Crown (1971) at page 166.) Under either interpretation there would be, today, persuasive reasons for thinking that such immunity in federal legislation related only to the Crown federal and not to the Crown provincial. This flows from the fact that both the legislative functions and prerogative rights in our federation are divided.
As a canon of statutory interpretation, there is really no reason to suppose that the omission in a federal statute of a section expressly binding the Crown provincial is always the product of a con scious decision by Parliament that the provincial Crown should not be bound. More likely it is the failure of anybody to consider the question (this immunity can have serious consequences when a commercial activity, for example, such as invest ment in securities and other financial instruments, is carried on by a provincial government agency). If the immunity were only applicable to what might be called governmental activities, its rationale would become clear—to prevent one level of government effectively subordinating the other. But when the immunity is carried also by a gov ernment business or commercial agency, especially one in which competing private enterprises are subject to government regulation, the rationale is a bit more difficult to understand.
In so far as the Crown immunity rule is said to emanate from the Crown's prerogative it is hard to understand how, in Canada, this can be the source of provincial immunity from federal legislation. The prerogative does not have a unified existence in our federation. Constitutional jurisprudence clearly indicates that the prerogative rights of the Crown are divided in accordance with the federal and provincial division of legislative jurisdiction. See generally: Maritime Bank of Canada (Liquidators of) v. Receiver-General of New Brunswick, [1892] A.C. 437 (P.C.); Bonanza Creek Gold Mining Company v. Rex, [1916] 1 A.C. 566 (P.C.); Attorney-General for the Dominion of Canada v. Attorney-General for the
Province of Ontario, [1898] A.C. 247 (P.C.). And for a recent British case discussing the concept of the unity of the Crown see: Regina v. Secretary of State for Foreign and Commonwealth Affairs, Ex parte Indian Association of Alberta, [1982] Q.B. 892 (C.A.).
In any event, whether the rule be an historical inheritance from the days when governments were less active in what are often called non-traditional government areas, or whether it is an historical inheritance from the days when the unity of the Crown was a factual reality (i.e. prior to the development of responsible government and prior to the development of independent nations under the same Crown) it is with us still. Chief Justice Laskin in Her Majesty in right of the Province of Alberta v. Canadian Transport Commission (P.W.A. case), [1978] 1 S.C.R. 61, at page 71, wrote:
There may be something to be said for the view that, having regard to the nature of Canada's federal system, the notion of the indivisibility of the Crown should be abandoned. The Constitution of Canada distributes legislative power between a central Parliament and provincial Legislatures and prerogative or executive power (which is formally vested in the Queen) is similarly distributed to accord with the distribution of legisla tive power, thus pointing to different executive authorities. Decisions of the Courts, including decisions of the Privy Coun cil, have, however, treated a general reference to the Crown in provincial legislation and in federal legislation as referring to the Crown indivisible. It is enough to refer in this respect to the judgment of the Judicial Committee in Dominion Building Corporation v. The King ... .
And at page 76:
... the common law rule as part of what I may call Crown law is an historic principle that was part of the law of this country from its beginning; and it remained part of our law under the federal structure brought into force in 1867, both for the advantage of the Crown in right of Canada and of the Crown in right of a Province. In my view, the Alberta Government, if not entitled to the shelter provided by s. 16 of the federal Interpre tation Act, is entitled to rely on the common law expressed in the Bombay case. In either case, I hold it not to be bound by ss. 19 and 20 of the Air Carrier Regulations.
Accordingly, it is clear that unless the relevant provisions of the Railway Act, either expressly or implied, bind the Crown provincial, or unless one can say that AGT has waived its Crown immunity, AGT will not be governed by that statute, nor by the regulatory authority of the CRTC.
(a) Express Statement—Necessary Implication
At common law, the rule clearly was that the Crown was not bound unless it was expressly stated to be so in the statute, or unless such conclusion arose as a matter of necessary implica tion. (Hogg, Constitutional Law of Canada (1977) at page 172; McNairn, Governmental and Inter- governmental Immunity in Australia and Canada (1977) page 1; Maxwell on The Interpretation of Statutes (12th ed. 1969) page 161.) There is no express statement in the Railway Act binding the Crown provincial but the respondent argues that AGT is bound as a matter of necessary implication.
Counsel for the respondent CNCP argues that there are two branches to the doctrine of necessary implication: (1) necessary implication which arises because it is said the purpose of the statute would be frustrated if the Crown was not bound (refer: Province of Bombay v. Municipal Corporation of the City of Bombay and Another, [1947] A.C. 58 (P.C.)); and (2) necessary implication which arises out of the text of the statute itself. He concedes that he is not arguing that a finding of necessary implication arises in this case out of the first. Rather, he is arguing that a finding of necessary implication arises out of the text of the statute itself.
Counsel for the applicant argues that whatever the position at common law had once been, the necessary implication doctrine should be con sidered, now, in either formulation, to be dead. He based his argument on the comments of Chief Justice Laskin in the P.W.A. case, respecting the Privy Council decision in In re Silver Brothers Ld., [1932] A.C. 514. At pages 74-75 of the P.W.A. case, Chief Justice Laskin wrote:
The Privy Council rejected the argument of "necessary implication" advanced on behalf of the federal Crown's posi tion, holding it to be ruled out by s. 16 of the Interpretation Act. It said this on the point (at p. 523):
Next it was said that inasmuch as the Bank Act and Bankruptcy Act not only dealt with preferences, but (inter alia) with Crown preferences, there is an "irresistible implication" that the Act was meant to deal with all Crown preferences. The simple answer to this is to fix one's eyes on s. 16, and it becomes apparent that it is a contradiction in terms to hold that an express statement can be found in an "irresistible implication."
Whether it would have accepted an argument of "necessary implication" apart from s. 16 aforesaid is another matter. As I already indicated, I am unable to accept it in the present case under the common law rule, nor do I think it arises here under the present s. 16 of the Interpretation Act.
Counsel also relies on R. v. Eldorado Nuclear Ltd., [1983] 2 S.C.R. 551 at page 560; 50 N.R. 120 at page 126:
Section 16 of the Interpretation Act requires an express provi sion to make an act binding on the Crown.
And at page 562 S.C.R.; 127 N.R.:
In Canada, the head of state is Her Majesty the Queen, the reigning monarch of the United Kingdom. By providing that "no enactment is binding on Her Majesty ... except only as therein mentioned or refered to", Parliament has put the state, commonly referred to as the Crown, beyond the reach of Acts of Parliament that are not expressly made applicable to the Crown. [Underlining added.]
While the facts in the two cases mentioned may not have been such as to substantiate a finding of necessary implication, I am not entirely convinced that the Supreme Court intended to rule out the necessary implication doctrine as completely as counsel for the applicant AGT contends.
I would feel more comfortable with the assertion that the Supreme Court had ruled out both branches of the necessary implication doctrine if it were clear that it had considered the second branch of this doctrine and the interaction of sections 3 and 14 with section16 of the Interpreta tion Act.
Subsection 3(1) provides:
3. (1) Every provision of this Act extends and applies, unless a contrary intention appears, to every enactment .... [Under- lining added.]
Paragraph 14(2)(a)
14....
(2) Where an enactment contains an interpretation section or provision, it shall be read and construed
(a) as being applicable only if the contrary intention does not appear...
In any event, it will not be necessary to decide whether the Supreme Court has in fact gone as far as counsel for the applicant contends unless there is a convincing argument based on the text of the relevant legislation that the Crown provincial is bound as a matter of necessary implication.
Counsel argues that two aspects of the Railway Act lead to this conclusion. The first argument is based on sections 130(1) and 102(1)(c) and (d). Subsection 102(1) accords to companies regulated thereby the authority to purchase lands necessary for the undertaking and to carry the undertaking upon the lands of any person "located in the line of the railway". Subsection 130(1) prohibits the com pany taking possession of, using or occupying "any lands vested in the Crown, without the consent of the Governor in Council". The argument is that if the Crown was not expressly bound by the Act and did not fall within the term person as that word is used in the Act, the exclusion clause in subsection 130(1) would not be necessary.
I find this argument unconvincing. The question is whether telecommunication carriers which are agents of the provincial Crown fall under the regulatory provisions which govern those kinds of enterprises. The sections in question relate to land owners whose land might be taken by the construc tion of a railway undertaking. If the argument were whether a railway could enter on provincial Crown lands as on the lands of any other person, then the exclusion clause might be relevant as an aid to interpretation. But I do not find it assists Counsel for the respondent CNCP in his argument that provincial Crown telecommunication carriers are bound by the Act.
The second argument is based on subsection 320(1) and section 5:
320. (1) .. .
"company" means a railway company or person authorized to construct or operate a railway, having authority to construct or operate a telegraph or telephone system or line, and to charge telegraph or telephone tolls, and includes also tele graph and telephone companies and every company and person within the legislative authority of the Parliament of Canada having power to construct or operate a telegraph or telephone system or line and to charge telegraph or telephone tolls;
5. Subject as herein provided, this Act applies to all persons, railway companies and railways, within the legislative authority of the Parliament of Canada, whether heretofore or hereafter, and howsoever, incorporated or authorized, except Government railways, to which however it applies to such extent as is specified in any Act referring or relating thereto.
It is argued that it would not have been necessary to exclude "Government railways" if subsection 320(1) had not been intended to include Crown- owned or-operated undertakings. The historical antecedents to section 5 make it clear that "Gov- ernment railways" refers to railways vested in Her Majesty in right of Canada. The original version of what is now section 5 appeared in The Railway Act of 1888, 51 Vict., c. 259, s. 3. As in the case of the present Railway Act, the 1888 statute con tained no definition of "Government railways". But chapter 38 of the Revised Statutes of 1886 was entitled The Government Railways Act. It is reasonable to assume that Government railways were excluded from regulation by the 1888 Act because they were already otherwise regulated. The Government Railways Act is still in force and is now R.S.C. 1970, c. G-11.
Again, this argument is not convincing. If tele communication carriers had been expressly cov ered by the Act in 1888, as they are now, the argument would have had more force. But given the topsy-like growth of the Railway Act, I do not think it reasonable to interpret the present provi sions respecting telecommunication carriers by a reference to a provision dating from 1888 respect ing railways.
Accordingly, I have not found that a convincing argument that the provincial Crown is bound by necessary implication arises out of the textual provisions of the statute.
I find equally unconvincing the argument that when Parliament amended the National Trans portation Act [R.S.C. 1970, c. N-17] and the Aeronautics Act [R.S.C. 1970, c. A-3] in 1977, (S.C. 1976-77, c. 26) following the P.W.A. deci sion, to make them expressly binding on the Crown, the Railway Act was not amended at the same time because it already bound the Crown. It seems more likely that the scope of operation of the Railway Act was simply not considered.
(b) Waiver of Immunity
CNCP argues, however, that even if AGT is not bound by the Railway Act as a matter of necessary implication, it is so bound because by its actions AGT has waived its right to immunity. This rea soning relies on decisions such as The Queen in the Right of the Province of Ontario v. Board of Transport Commissioners, [1968] S.C.R. 118; Toronto Transportation Commission v. The King, [1949] S.C.R. 510; and Schwella, John F. v. The Queen and Hydro-Electric Power Commission of Ontario et al., [1957] Ex.C.R. 226.
CNCP's argument is that AGT is only part of the TCTS organization and network by virtue of the CRTC's approval of the TCTS Connecting Agreement and various other agreements. There fore, it is argued AGT wants the advantages of being part of an integrated national network approved under the Railway Act without what it perceives to be the disadvantages of being subject to the entire regulatory scheme.
The agreements involving AGT which the CRTC has approved* are: the 1971 TCTS inter connection and service agreement with the Ameri- can Telephone and Telegraph Company (AT&T); the 1972 interconnection agreement between AGT and CNR and amendments thereto in 1973, 1976 and 1977; the TCTS interconnection and operat ing agreement of 1975 with Teleglobe; a 1979 agency agreement between all members of TCTS; the 1978 TCTS agreement with Telenet; the 1979 TCTS agreement with Tymnet; interim approval in 1983 of the TCTS agreement with the Ameri- can Satellite Company; interim approval in 1983 of the TCTS agreement with MCI Telecommuni cations Corporation.
* The CRTC approval being sought is that required pursuant to subsection 320(11) of the Railway Act:
320... .
(11) All contracts, agreements and arrangements between the company and any other company, or any province, munici pality or corporation having authority to construct or operate a telegraph or telephone system or line, whether such authority is derived from the Parliament of Canada or otherwise, for the regulation and interchange of telegraph or telephone messages or service passing to and from their respective telegraph or telephone systems and lines, or for the division or apportion ment of telegraph or telephone tolls, or generally in relation to the management, working or operation of their respective tele-
(Continued on next page)
The 1976 TCTS Connecting Agreement itself did not initially receive approval. In 1977, the CRTC turned down Telesat's application for approval of that agreement (Telecom Decision CRTC 77-10). The CRTC's decision was based on a conclusion that approval would significantly prejudice regulatory control over Telesat's autono my and create a non-competitive situation not in the public interest. The Governor in Council varied the CRTC decision by P.C. 1977-3152, essentially approving the Connecting Agreement as originally proposed by the members of TCTS. Again in 1981 the CRTC refused to approve certain aspects of an application dealing with increases and decreases in TCTS rates. (Telecom Decision CRTC 81-13.) It was this non-approval which gave rise to the peti tion to the Governor in Council [submitted on July 23, 1981]. This petition was signed by all members of TCTS. The Governor in Council varied the original CRTC decision by P.C. 1981-3456.
Apart from the petition to the Governor in Council, however, AGT has never been the peti tioner seeking CRTC approval for any of the agreements. The applications have always been brought by either Bell Canada, British Columbia Telephone, Telesat or Canadian National Rail ways. This reflects the fact that these companies have always clearly been seen as required to obtain CRTC approval before becoming a party to any of the agreements in question. While AGT has bene fited from the agreements, it has not taken the initiative in seeking CRTC approval, nor does it seem to have been treated by CRTC as required to do so. To what extent then can AGT be said to have waived its Crown immunity?
Counsel for CNCP relied heavily on the Supreme Court decision in The Queen in the Right
(Continued from previous page)
graph or telephone systems or lines, or any of them, or any part thereof, or of any other systems or lines operated in connection with them or either of them, are subject to the approval of the Commission, and shall be submitted to and approved by the Commission before such contract, agreement or arrangement has any force or effect.
of the Province of Ontario v. Board of Transport Commissioners (the Go -Train case), [1968] S.C.R. 118. In that case the government of Ontario wanted to operate a commuter service between Pickering-Toronto-Hamilton. It had reached a provisional agreement with CN to use its trackage; the rolling stock would belong to Ontario; the crews would be CN's but would per form the work for Ontario on an agency basis. The agreement, of course, had to be approved by the CTC. The implementation of the agreement also involved the discontinuance by CN of four trains. The CTC approved the agreement and the discon tinuance of the trains but asserted jurisdiction over the tolls to be charged by Ontario for the commut er service.
In response to the argument that Ontario was not subject to CTC jurisdiction on the grounds of Crown immunity, the Supreme Court stated at page 124:
Her Majesty in right of Ontario has, apart from an agreement in principle with the Canadian National Railways, no right to operate the Commuter Service and therefore no right to levy tolls for the carriage of passengers over part of the Canadian National Railways lines. Such rights as Ontario has are derived either from such agreement or from the Railway Act and therefore are subject to the conditions prescribed in that Act, one of these being that tolls are within the jurisdiction of the Board of Transport Commissioners.
It appears to us that Ontario can no more claim to be exempt in the operation of the Commuter Service from the application of the general provisions of the Railway Act respecting tolls than British Columbia could claim to be exempt from the general provisions of the Customs and Excise Acts in the operation of its Liquor Control Board, as was held in Attorney- General of British Columbia v. Attorney-General of Canada.
Thus, the Court applied what is sometimes called the benefit-burdens doctrine. If a government waives its immunity by taking advantage of legis lative provisions, it will be taken to have assumed both the benefits and the burdens thereunder; it cannot choose merely the advantageous provisions.
In the present case, however, while AGT may receive many benefits from the CRTC, approval of the TCTS Connecting Agreement and various other agreements, I do not think one can say that AGT has thereby submitted itself to the Railway Act in all its aspects. There is no nexus between
the waiver of immunity with respect to the TCTS agreements and the claim being made by CNCP (that AGT be ordered to provide it with intercon nection). AGT can be taken to have waived immunity with respect to burdens related to the operation of TCTS and other agreements. Thus, if CNCP were a member of TCTS, it would be a different matter; or, if the requested interconnec tion related to an existing AGT/CNCP agreement, one could see a sufficient nexus. But I think it stretches the waiver doctrine too far to hold that AGT by its participation in the benefit of the TCTS agreements, has submitted itself to the gen eral jurisdiction of the CRTC.
The other two cases (Schwella, John F. v. The Queen and Hydro-Electric Power Commission of Ontario et al. and Toronto Transportation Com mission v. The King, (supra)) are distinguishable from the facts in this case in the same way as is the Go -Train case. Both deal with the application of the Ontario Contributory Negligence Act to the Crown. In both cases the Crown specifically relied on that Act to obtain a benefit and there was a direct nexus between the benefit being claimed and the application of the other sections of the Act to the Crown.
One last argument needs to be addressed. It was argued by CNCP that AGT is an agent of the Crown only for the purpose of exercising the au thority conferred on it by its incorporating statute, and that that authority did not extend to engaging in interprovincial and international activities. Thus, while AGT might be an agent of the provin cial Crown in so far as it provides local telecom munications services, once it moved beyond that realm of activity it lost its status as agent of the provincial Crown. (Conseil des Ports Nationaux v. Langelier et al., [ 1969] S.C.R. 60; Canadian Broadcasting Corporation, Television Station C.B.O.F.T. et al. v. The Queen, [1983] 1 S.C.R. 339; R. v. Eldorado Nuclear Ltd., [1983] 2 S.C.R. 551; 50 N.R. 120.)
Frankly, I do not entirely understand this argu ment. It seems to me the incorporating power of a federal or provincial government is quite distinct from its legislative jurisdiction. I do not under stand the jurisprudence to say that a provincial legislature can not incorporate entities to operate in federally-regulated fields. Indeed, the Supreme
Court decisions in the Fulton and in the Kootenai & Elk cases (supra) both seem to indicate the exact opposite.
Before concluding, I will make one comment or the evidence. Counsel for AGT resisted ever) attempt to have introduced in evidence any infor mation dealing with TCTS. Indeed, he refused tc allow Mr. Fyles, the AGT officer, whose affidavit had been filed in support of AGT's application, tc answer, on cross-examination, any questions deal ing with TCTS. It was only after a court order hac been obtained that Mr. Fyles was eventually com pelled to answer some of those questions. It is necessary to keep this in mind when reading the responses of Mr. Fyles on his second examination The responses were not the product of spontaneous cross-examination but were given after there hac been time to study the questions and prepare carefully framed replies.
For the reasons given above, an order will issue prohibiting the CRTC from proceeding with the application of September 17, 1982, made to it b) the CNCP.
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