Judgments

Decision Information

Decision Content

T-845-88
National Anti-Poverty Organization and Arthur Milner (Plaintiffs)
v.
Attorney General of Canada (Defendant)
and
Bell Canada International Inc. and BCE Inc. (Intervenors)
INDEXED AS: NATIONAL ANTI-POVERTY ORGANIZATION V. CANADA (ATTORNEY GENERAL)
Trial Division, Muldoon J.—Ottawa, May 25, 26 and June 10, 27, 1988.
Telecommunications — Action for declaration Order in Council varying part of CRTC decision on Bell Canada rate proposal dealing with compensation for Bell employees tem porarily transferred to BC1 null and void — Whether some transfer costs borne by Bell's subscribers and whether con stituting cross-subsidy between Bell and BCI — Order in Council subject to judicial review — Governor in Council violating Bill of Rights, s. 2(e) as did not give plaintiff NAPO, opportunity to be heard.
Judicial review — Equitable remedies — Declarations — Order in Council varying part of CRTC decision on Bell Canada rate proposal dealing with compensation for Bell employees temporarily transferred to other company — Order in Council not matter of public convenience or general policy, therefore subject to judicial review — In absence of emergency or security intelligence exigencies, Governor in Council bound by audi alteram partem rule under Bill of Rights s. 2(e) — Here, rule infringed as plaintiff NAPO, not given opportunity to be heard — Semble: Metaphysically archaic to argue prerogative writ (issued in Sovereign's name) cannot be issued against Governor in Council (theoretically headed by Sover eign's regent); Sovereign not above law, and Parliament and government subject to Constitution.
Bill of Rights — Right to fair hearing — Before varying CRTC decision on Bell Canada rate proposal, Governor in Council must, in absence of emergency or security exigencies, give party before CRTC opportunity to be heard and accord representations serious consideration.
Constitutional law — Charter of Rights — Equality rights — Charter s. 15 rights not available to corporations — Individual plaintiff making out no case to be treated equally with similarly situated individual — In constitutional cases, dun' on courts to direct parties' arguments to relevant issues to
save constitutional principles from being subverted or overlooked.
Because its enterprise is akin to a public utility, Bell Canada is subject to the regulatory jurisdiction of the CRTC with respect, inter alia, to rates, costs and accounting procedures. Bell Canada's rates are approved by the CRTC according to factors such as revenues and revenue requirements. During CRTC hearings in 1986 and 1987 regarding the revenue requirements of Bell Canada, questions were raised as to whether Bell Canada cross-subsidized its arm's-length affiliate Bell Canada International Inc. (BCI) when employees were transferred to BCI to work on international assignments nor mally lasting two years or more. The concern was that some of the costs were being passed on to Bell's subscribers. In its decision 88-4 of March 17, 1988, the CRTC set the compensa tion to be paid to Bell or its regulated affiliate, Tele-Direct, for temporary transfer of employees at the 25% level (a 25% surcharge on the annual salary and labour-related costs of each employee). On March 25, 1988, a petition was submitted to the Governor in Council by Bell Canada Enterprises Inc. (BCE) and BCI, neither of which had been a party before the CRTC, requesting that the level be lowered.
Ignoring plaintiff National Anti-Poverty Organization (NAPO)'s request for an adequate opportunity to formulate a reply, the Governor in Council, acting under subsection 64(1) of the National Telecommunications Powers and Procedures Act (NTPP Act), issued Order in Council P.C. 1988-762 deciding, in effect, that the determination of the value of the transfers should be restricted to the use of audited costs associated with re-employment guarantees, and thereby acced ing to BCE and BCI's request.
These proceedings began as a motion for certiorari to quash Order in Council P.C. 1988-762. This was changed, on consent, to an action for a declaration that the Order in Council is null and void.
Held, the action should be allowed.
Semble: It is metaphysically archaic to argue that because prerogative writs are issued in the name of the Sovereign, they cannot be directed against a body of which the Sovereign's regent is the head, such as the Governor in Council. The Sovereign is not above the law, and the Parliament and govern ment of Canada are subject to the Constitution.
It is well established that orders in council are subject to judicial review especially when, as here, they do not deal with matters of public convenience or general policy. The Supreme Court of Canada decision in Thorne's Hardware, stands as authority for the proposition that neither the power vested in the Governor in Council nor the particular exercise of that power are beyond judicial review.
The principle that there is no immunity for orders in council unlawfully made was enunciated by the Supreme Court of Canada in the Inuit Tapirisat case. The long-standing principle that neither the Sovereign nor the Sovereign in Council is above
the law was confirmed recently by the Supreme Court of Canada in the Operation Dismantle case.
The powers accorded in subsection 64(1) of the NTPP Act, the exercise of which is considered herein, cannot be described as other than arbitrary, despotic and autocratic. The constitu tionality of that subsection, while doubtful, is not at issue here.
Although Estey J., in Inuit Tapirisat, characterized the power accorded under subsection 64(1) as "legislative", that power might more precisely be defined as a statutory power for intervention to correct or rescind decisions which do not con form to the government's assertion of policy in such matters. To describe that power as legislative misses the mark set by the Supreme Court in its later judgment in Thorne's Hardware, in all instances such as the present one where the power is not wielded "in matters of public convenience and general policy".
Furthermore, the judgment in Inuit Tapirisat precedes both the Charter and the revivification of the Bill of Rights in the Singh case. In that earlier case, Estey J. was free to lump together as a simply legislative function the intervention, for policy reasons, to correct a decision rendered as between con tending parties, and legislating for general public purposes. And he could then also conclude that the audi alteram partem rule did not apply to the Governor in Council when intervening in a CRTC decision made inter partes. Today, the exercise of the powers found in subsection 64(1) must be interpreted in consonance with the Constitution and the tenor of the law.
The plaintiffs initially relied on section 15 of the Charter. However, since the rights guaranteed therein can only be enjoyed by individuals, NAPO cannot invoke section 15. And the plaintiff, Milner, has made out no case to be treated equally with any similarly situated individual. In ordinary litigation, a court is not obliged to come to the rescue of a litigant whose pleadings are inept or otherwise off the target, but in a consti tutional case, it must not allow a private litigant's case to miscarry if that result would contort or contradict constitution al principles or imperatives. In accordance with that principle, counsel were directed to present argument as to the application of Canadian Bill of Rights, paragraph 2(e). In 1988, the Governor in Council is obliged, under paragraph 2(e), to respect the basic canon of "natural justice", fundamental jus tice or just plain ordinary fairness, audi alteram partem, before making a determination of the other party's rights and obliga tions. The Governor in Council, in the absence of emergency or security intelligence exigencies, cannot lawfully do otherwise.
So, although a cynic might ask whether there is any conse quence if the Governor in Council does not pay any attention to the responses of interested parties, the law in 1988 not only requires that all parties before the CRTC (other than the petitioner(s) to the Governor in Council) be accorded a reason able opportunity to respond in writing to the petition, but also that their responses, if any, be considered with as much care and concern as the original petition itself is considered.
The argument that judicial review under the Bill of Rights is somehow anti-majoritarian or undemocratic was to be answered by pointing out that the provisions for judicial review in the Charter and Bill of Rights had been put in place by popularly elected legislators.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Canada Corporations Act, R.S.C. 1970, c. C-32.
Canadian Bill of Rights, R.S.C. 1970, Appendix III, s. 2(e).
Canadian Charter of Rights and Freedoms, being Part 1 of the Constitution Act, /982, Schedule B, Canada Act /982, 1982, c. 11 (U.K.), ss. 1, 2, 7 to 15, 33.
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 Consti tution Act, 1982, Item 1).
Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.).
Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, ss. 2, 18.
Interpretation Act, R.S.C. 1970, c. 1-23, s. 28.
National Telecommunications Powers and Procedures Act, R.S.C. 1970, c. N-17 (as am. by S.C. 1987, c. 34, s. 302), ss. 1, 2, 64(1).
National Transportation Act, 1987, S.C. 1987, c. 34, ss. 301, 302, 303.
Order Varying Telecom Decision CRTC 88-4, SOR/88- 250 (P.C. 1988-762).
Railway Act, R.S.C. 1970, c. R-2, s. 321.
CASES JUDICIALLY CONSIDERED
APPLIED:
Thorne's Hardware Ltd. et al. v. The Queen et al., [1983] 1 S.C.R. 106; 143 D.L.R. (3d) 577; Operation Dismantle Inc. et al. v. The Queen et al., [1985] 1 S.C.R. 441; Singh et al. v. Minister of Employment and Immi gration, [1985] 1 S.C.R. 177; Smith, Kline & French Laboratories Ltd. v. Canada (Attorney General), [1987] 2 F.C. 359; (1986), 27 C.R.R. 286; 34 D.L.R. (4th) 584; 12 C.P.R. (3d) 385; 78 N.R. 30 (C.A.); R. v. Stoddard (1987), 59 C.R. (3d) 134 (Ont. C.A.); Ominayak v. Norcen Energy Resources Ltd. (1987), 83 A.R. 363 (Q.B.); Leighton v. Canada, T-165-85, Muldoon J., judg ment dated 18/5/88, F.C.T.D., not yet reported; Manito- ba (Attorney General) v. Metropolitan Stores Ltd., [1987] 1 S.C.R. 110; Rajpaul v. Canada (Minister of Employment and Immigration), [1988] 3 F.C. 157 (C.A.); Re B.C. Motor Vehicle Act, [1985] 2 S.C.R. 486.
CONSIDERED:
Attorney General of Canada v. Inuit Tapirisat of Canada et al., [1980] 2 S.C.R. 735; Padfield v. Minister of
Agriculture, Fisheries and Food, [1968] A.C. 997 (H.L.).
REFERRED TO:
Re. Public Utilities Review Commission Act (1986), 52 Sask. R. 53; 26 Admin.L.R. 216 (C.A.); Jasper Park Chamber of Commerce (The) v. Governor General in Council, [1983] 2 F.C. 98 (C.A.); Re Doctors Hospital and Minister of Health et al. (1976), 12 O.R. (2d) 164 (Ont. H.C.); FAI Insurances Ltd v Winneke (1982), 41 ALR 1 (H.C.); Reade v. Smith, [1959] N.Z.L.R. 996 (S.C.); Aerlinte Eireann Teoranta v. Canada, [1987] 3 F.C. 383; 9 F.T.R. 29 (T.D.); C.E. Jamieson & Co. (Dominion) Ltd. et al. v. Attorney-General of Canada (1987), 37 C.C.C. (3d) 193; 12 F.T.R. 167 (F.C.T.D.).
COUNSEL:
Andrew J. Roman and Glen W. Bell for
plaintiffs.
Duff F. Friesen for defendant.
David Wilson for intervenors.
SOLICITORS:
Public Interest Advocacy Centre, Ottawa, for plaintiffs.
Deputy Attorney General of Canada for defendant.
Osler, Hoskin & Harcourt, Ottawa, for intervenors.
The following are the reasons for judgment rendered in English by
MULDOON J.: These proceedings began as an application pursuant to section 18 of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, direct ed against the Governor in Council as respondent, and seeking certiorari to quash Order in Council P.C. 1988-762 dated April 22 1988, [Order Vary ing Telecom Decision CRTC 88-4, SOR/88-250]. That decretal purports to vary, pursuant to subsec tion 64(1) of the National Telecommunications Powers and Procedures Act,' Telecom Decision CRTC 88-4 rendered March 17, 1988.
' On August 28, 1987, Royal Assent was accorded to the National Transportation Act, 1987, S.C. 1987, c. 34 which provides:
At the commencement of the hearing, counsel for the Governor in Council, who is also Crown counsel, and a member of the Attorney General's staff, raised a preliminary objection. His argument was not illogical but raised and praised some rather archaic black-letter anachronisms about the noble personage of Her Majesty the Queen, her Crown and dignity. Resorting to section 28 of the Interpretation Act, R.S.C. 1970, c. I-23, Crown counsel urged that because the Governor in Coun cil, admittedly a "federal board, commission or tribunal", acts on behalf of the Sovereign, certain principles of law applicable to the Crown apply also to the Governor in Council. The ancestral paradigm of certiorari being a prerogative writ issued by superior courts of record, in the Sover eign's name, so goes the reasoning, it is beyond the power (or at least unseemly) of the Court to issue such an order directed to a federal board, commis sion or tribunal of which the Sovereign's regent is the head, even if he or she be rarely ever present at cabinet meetings.
Therefore, Crown counsel submitted, since no prerogative writ or other mandatory order pursu ant to section 18 of the Federal Court Act may be directed against either the Crown, or allegedly against the Governor in Council, "the only avail able and appropriate manner of securing judicial review is by way of a proceeding brought against the Attorney General of Canada to obtain declara- tory relief against the Governor in Council". This may be a metaphysically archaic optic when every one has for ages known that the Sovereign is not
(Continued from previous page)
National Transportation Act
301. The long title of the National Transportation Act is repealed and the following substituted therefor:
"An Act respecting powers and procedures in relation to cer tain telecommunications matters"
302. Sections I and 2 of the said Act are repealed and the following substituted therefor:
"1. This Act may be cited as the National Telecommuni cations Powers and Procedures Act.
INTERPRETATION
2. In this Act,
"Commission" means the Canadian Radio-television and Telecommunications Commission;
"Minister" means the Minister of Communications; "Secretary" means such officer or employee of the Commis
sion as is designated by the Commission to carry out
secretarial duties for the Commission."
303. The heading preceding section 3 and sections 3 to 16 of the said Act are repealed.
above the law and since 1982, if not before, the Parliament and government of Canada are subject to the supreme law of Canada—the Constitution. Moreover it is clear that if Her Majesty even knows of these proceedings, she cannot feel person ally offended or aggrieved in that her overseas regent nominally in council could be obliged, if so adjudicated, to comply with an order of the Feder al Court, which in the case of certiorari would mean only that a cabinet decision would, on lawful grounds, be quashed. Those who like Crown coun sel pretend otherwise may counter-productively induce some of their fellow citizens to wish for more republican forms of government. Royal gov ernment ought not to be regarded and protected as a hothouse plant lest it become one. The common law of the Constitution can hardly be a living tree if constrained by a pathologically musty atavism as the sterile goal of its practitioners and judges.
The applicant's counsel, nevertheless, did not wish the argument to focus on the preliminary objection. After a recess during which all counsel had an opportunity to consult with their respective clients, and with each other, they returned with a form of notice of motion to which all counsel attested the consent of their respective clients. It runs thus:
MOTION BY APPLICANT FOR AN ORDER:
1. amending the style of cause so that the respondent is the Attorney General of Canada:
2. changing the proceeding from an application to an action in which the relief sought is a declaration that Order in Council P.C. 1988-762, 22 April 1988 is null and void, and trying the action today on the basis of the applicant's record, provided that no declaration is to be granted on the basis of a finding that the plaintiff's rights under section 15 of the Charter have been infringed until after the parties have exchanged pleadings and had an opportunity to exercise all of their pre-trial rights and there has been a separate trial of any issue that may be raised under section I of the Charter.
Counsel by mutual consent prepared a form of order to implement the above requests, which order was signed and pronounced on May 26, 1988. It accounts for the above displayed style of cause. Moreover, all counsel orally undertook for
their clients that the somewhat unorthodox meta morphosis of the nature of the proceedings, with their attendant foregoing of pleadings, discoveries and viva voce witnesses, to the extent provided, is not to be the subject of any appeal by any of them.
As can be seen this action may endure "until after the parties have exchanged pleadings and had an opportunity to exercise all their pre-trial rights" in regard to the question of whether the plaintiffs' rights, if any, under section 15 of the Canadian Charter of Rights and Freedoms [being Part I of the Constitution Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.)] have been infringed, and any issue which may be raised under section 1 of the Charter, have been tried. In order to obtain a relatively prompt resolution of the other matters in issue on May 25, extended by the volume of the plaintiffs' counsel's submissions over to May 26, and then still adjourned over to June 10 to hear from the defendant and the inter- veners, counsel may well have devised a barely workable new species of procedure, which they have undertaken with their eyes wide open, and about which they cannot now be heard to complain.
The corporate plaintiff, National Anti-Poverty Organization (NAPO), is a charitable organiza tion incorporated in May, 1973, under Part II of the Canada Corporations Act [R.S.C. 1970, c. C-32]. It purports to act, and to have intervened in the relevant proceedings before the Canadian Radiotelevision and Telecommunications Commis sion, (CRTC), on behalf of "low income families", according to its letters patent, who may or may not, but are assumed to favour its activities. The plaintiff, Arthur Milner, swears that he is an associate member of NAPO, and a Bell telephone subscriber, but he says nothing about whether he personally is a member of "a low income family". In any event, the CRTC accepted NAPO as an intervener in its proceedings and, indeed, awarded NAPO its costs of so appearing and participating therein. The Public Interest Advocacy Centre pro vided counsel for NAPO at the CRTC hearings according to the affidavit of Elizabeth MacKenzie.
Exhibit "A" to her first affidavit sworn May 6, 1988 is a copy of selected excerpts of Telecom Decision CRTC 88-4, being, in bilingual format, pages 1 (the title page) to 5 (including the table of contents and the first paragraph of the introduc tion) and pages 52 to 59. The decision bears the following headlines:
BELL CANADA -1988 REVENUE REQUIREMENT, RATE REBALANCING AND REVENUE SETTLEMENT ISSUES
BRITISH COLUMBIA TELEPHONE COMPANY- REVISIONS TO TRANSCANADA RATE SCHEDULE AND REVENUE SETTLEMENT ISSUES
The CRTC decision's introductory paragraph runs thus:
On 3 February 1987, the Commission received two applica tions from Bell Canada (Bell) under Tariff Notices 2269 and 2270. In the letter that accompanied these applications, Bell pointed out that in Interexchange Competition and Related Issues, Telecom Decision CRTC 85-19, 29 August 1985 (Decision 85-19), the Commission had indicated its intent to initiate a public review of the issues related to rate rebalanc- ing. In this context, the applications constituted a specific rate proposal for the Commission's consideration.
Here it should be noted that Bell is one of two wholly owned Canadian subsidiaries of one of the two interveners, Bell Canada Enterprises Inc. (BCE), the holding company of the Bell group of companies and enterprises. BCE manages interests in telecommunication services, telecommunications equipment manufacturing, energy, printing and real estate. The other intervener, Bell Canada International Inc. (BCI) is also a wholly owned Canadian subsidiary of BCE. BCI has provided telecommunications consulting services to govern ments and corporations in some 70 countries over the past 20 years, according to its solicitors' memorandum of fact and law. Bell was the partici pant in the CRTC proceedings. Its owner BCE, and its sibling subsidiary BCI, were not partici pants in the hearing before the CRTC, but they were the petitioners who induced the Governor in Council to promulgate Order in Council P.C. 1988-762, and they are the interveners in these present proceedings in this Court. Unlike its parent (or owner) BCE, and its sibling BCI, Bell is subject to the regulatory jurisdiction of the CRTC in respect to various matters, including rates, costs and accounting procedures, because of the type of
its enterprise, akin to a public utility, which it chooses to pursue for gain.
These regulatory issues arise because only Bell is regulated, providing as it does, services contem plated by the relevant regulatory legislation. In order to fulfill its international contracts, BCI temporarily hires from time to time certain employees of, and transferred from, Bell and other regulated Canadian telecommunications compa nies. During the time such employees are engaged by BCI, all direct costs such as pay, benefits and incidental expenses are borne exclusively by BCI. In addition pursuant to present arrangements be tween Bell and BCI, the sibling BCI pays to Bell certain indirect costs of engaging Bell's employees, thus:
(a) a once-only fee of $1,840 for each employee transferred for more than 30 days;
(b) a once-only fee of $455 for each employee "repatriated" to Bell;
(c) a once-only fee of $90 for each extension of leave of absence for any employee seconded to BCI; and
(d) in addition, an annual fee of $1,000 per employee engaged by BCI, in order to offset possible unknown costs, or unascertained costs which Bell might incur in regard to such employee.
The question before the CRTC was whether Bell was charging BCI enough for the engagement by BCI of Bell's experts to meet the needs of BCI's consultation contracts.
Another vantage from which to view this ques tion is to enquire whether Bell's charges for the loan of its employees are so little as to impose some of the costs thereof on Bell's subscribers. It is apparent from a reading of the excerpts of the CRTC's reasons and orders, CRTC 88-4 above mentioned, CRTC 88-6 a copy of which is exhibit "A" to Elizabeth MacKenzie's supplementary affidavit sworn May 10, 1988, and the partial transcript which is exhibit "K" to that supplemen tary affidavit, that the CRTC's hearings and examination of the matter of Bell's aforesaid charges for the lending of its employees were lengthy, painstakingly elaborate, careful, profound and fair.
It is appropriate to examine some few selected passages, at least, from Telecom Decision CRTC 88-4 [hereinafter sometimes: Decision 88-4], which are among those annexed as exhibit "A" to Elizabeth MacKenzie's affidavit sworn May 6, 1988. It is useful to note that the CRTC's Decision 88-4 is a "rate decision concerning Bell Canada made pursuant to section 321 of the Railway Act, R.S.C. 1970, [c.] R-2" as is admitted by the interveners, BCE and BCI, on page 10 of their memorandum of fact and law, filed herein on May 25, 1988.
Here, then, are some few selected passages from Decision 88-4 [at pages 52 to 54]:
V INTERCORPORATE TRANSACTIONS
A. Compensation for Temporarily Transferred Employees
I) Background
In Decision 86-17, the Commission determined that the appropriate compensation for employees temporarily trans ferred to Bell Canada International Inc. (BCI) was a 25% contribution calculated on an imputed cost comprising the aggregate of the annual salary and the labour related costs of each such employee immediately prior to transfer. It was also determined that these costs should be adjusted, where appli cable, for any normal salary increases during the period of transfer, but should not include any salary adjustments attributable solely to an overseas posting.
Bell also stated that, in a letter attached to its Memoranda of Support dated 14 July 1987 and addressed to Mr. A.J. de Grandpré, Chairman of BCE Inc. (BCE), formerly Bell Canada Enterprises Inc., the Minister of Communications had indicated, in effect, that the level of compensation for regulatory purposes should not exceed the audited costs directly and indirectly associated with these transfers.
In a letter to the Commission dated 9 October 1987 and filed as CRTC Exhibit 2, the Minister of Communications stated that the remarks in her letter of 14 July 1987 did not instruct the Commission on how to deal with the transfer of revenues between Bell and BCI. The letter also stated that it was not the Minister's intention to leave the impression that the determination of the value of these transfers should be restricted to the use of accounting costs.
The Court heard much of these letters to and from the Minister during the course of the respective oral presentations of counsel. The importance attached to them by the plaintiffs' counsel will be mentioned later on.
Then, from pages 54 through to 58, the CRTC very carefully summarized the respective positions
of the parties before it: Bell, the Canadian Busi ness Telecommunications Alliance (CBTA, repre senting large business users) and the Consumers' Association of Canada (CAC), and again, Bell in reply. The CRTC also noted that "Ontario, CBTA et al and CAC ... all expressed the view that the regulatory treatment set out in Decision 86-17 continues to be appropriate" (page 56) whereas "Bell ... expressed the view that the Commission should not feel constrained by its finding in Deci sion 86-17, but (page 57) should regard the matter in the light of factors and developments outlined during the proceeding" (page 58).
The CRTC then set out [at pages 58-59] its conclusion on this matter of compensation to Bell for having lent, and for lending, its employees to BCI or any affiliated company.
3) Conclusions
The Commission has not been persuaded that the approach to compensation for temporarily transferred employees pre scribed in Decision 86-17 should be changed. Bell has chosen to address the question of whether a cross-subsidy exists solely on the basis of accounting costs. The Commission rejects this view and is of the opinion that accounting costs alone do not capture the full costs involved in temporary employee transfers to BCI. The Commission notes in this regard the Minister's letter, dated 9 October 1987, in which she stated: "... it was not my intention to leave the impres sion that the determination of the value of these transfers should be restricted to the use of accounting costs."
Among the costs not included in the accounting costs are those costs associated with the re-employment guarantees. The Commission finds persuasive CAC's argument that Bell, by virtue of these guarantees, absorbs a large part of the risk that BCI might, at some point, be unable to find sufficient work for its employees.
In Decision 86-17, the Commission noted that the company had been reasonably successful in achieving the traditional 25% contribution in connection with intercorporate transac tions. In this regard, the Commission notes that when Bell employees are merely loaned to BC!, rather than being temporarily transferred, BCI compensation to Bell includes a 25% contribution on employee salaries and benefits, and that the approach adopted in Decision 86-17 is consistent with that practice.
In the Commission's view, the question of whether or not a cross-subsidy exists is best determined by reference to the fair market value of the goods or services being supplied. If Bell is supplying goods or services to a non-arm's length company at less than fair market value, it is subsidizing that company. The Commission realizes that fair market value is, in these circumstances, difficult to determine. However, there is nothing on the record of this proceeding to indicate
that the proxy for the fair market value of temporarily transferred employees adopted in Decision 86-17 is not appropriate. In the Commission's view, difficulties BC! may be experiencing in the international marketplace do not provide sufficient justification for a departure from the Com mission's policy that Bell subscribers should not be obliged to subsidize the competitive endeavours of Bell affiliates.
The Commission has adjusted the company's 1988 revenue requirement to reflect its decision regarding the annual compensation for temporarily transferred employees. The Commission estimates that, for regulatory purposes, this will increase the company's 1988 net income after taxes by about $4 million.
Telecom Decision CRTC 88-4 was released on March 17, 1988. On March 25, BCE and BCI, neither of which had been a party before the CRTC, filed a petition pursuant to subsection 64(1) of the National Telecommunications Powers and Procedures Act, above cited. They requested the Governor in Council to vary Deci sions 86-17 and 88-4. That petition was submitted in confidence because it was alleged to contain commercially sensitive information about BCE and BCI. Obviously, no copies of the petition were circulated to or among any of the parties which had opposed Bell before the CRTC.
After NAPO learned of the existence of the petition, it contacted the General Counsel of BCE and requested a copy of it and its supporting material. Counsel for BCE indicated, however, that a copy of the petition would be made avail able to officials of NAPO, provided that they would not make it public. NAPO declined the offer, just as it had (with other parties) previously refused to accept that condition of confidentiality sought by Bell on behalf of BCE and BCI toward the concluding sessions of the CRTC's hearing on the matter.
On this little contretemps the Court agrees with the defendant's counsel. NAPO is whining that because it would not accept the proviso for confi dentiality, it never did get to examine the petition. In this regard NAPO has simply to face up to the hardships it must accept in choosing the row it elects to hoe. An imposition of confidentiality for commercially sensitive information is not so for eign to administrative law proceedings as to create shock or complaint. But NAPO has to decide
whether it wishes to follow the paths of adminis trative law proceedings or to follow the paths of politics. It is unlikely to achieve much satisfaction in following both simultaneously, but none can forbid NAPO from such courses. NAPO, clearly by inference, was just itching to publicize the petition's contents and supporting material. The Court is not moved by NAPO's complaint in this regard, assuming that the information about BCE and BCI were indeed sensitive, a matter which might have been determined later, and honour ably, too. If NAPO's political role be legitimate, and it is, then so is the caution evinced by a competitive commercial enterprise in regard to its sensitive information. NAPO wilfully blinded itself.
Since it was unable to obtain an unrestricted, public copy of the petition submitted to the Gover nor in, Council by BCE and BCI, NAPO, on April 19, 1988, delivered by hand to the Clerk of the Privy Council a letter (exhibit "B" to Ms. Mac- Kenzie's affidavit sworn May 6, 1988) requesting the Governor in Council not to dispose of the petition until NAPO secured a copy of it and had an adequate opportunity to formulate a reply.
The Governor in Council replied, rather in the manner of Frontenac, by issuing Order in Council P.C. 1988-762 on April 22, 1988. Frontenac could have been excused because of the emergency of his circumstances, but NAPO was accorded no other reply. It was denied any reasonable opportunity to make even wilfully blind submissions. No emer gency has been asserted by any party hereto.
The Governor in Council purports to act in lawful invocation of subsection 64(1) of the Na tional Telecommunications Powers and Proce dures Act (NTPP Act). This very text was once subsection 64(1) of the National Transportation Act. It runs thus:
64. (1) The Governor in Council may at any time, in his discretion, either upon petition of any party, person or com pany interested, or of his own motion, and without any petition or application, vary or rescind any order, decision, rule or regulation of the Commission, whether such order or decision is made inter partes or otherwise, and whether such regulation is general or limited in its scope and application;
and any order that the Governor in Council may make with respect thereto is binding upon the Commission and upon all parties.
Since all parties in this present action acknowl edged that the Governor in Council, when acting pursuant at least to subsection 64(1) above recited, is a "federal board, commission or other tribunal" within the meaning of that term's definition in section 2 of the Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, it will be convenient and far from insulting to refer to the Governor in Council by the English pronoun "it". In such manner, the Court and the parties can grammatically accom modate the exigencies of paragraph 18(b) of the Federal Court Act.
Here is the answer made by the Governor in Council only three days after it received NAPO's unacknowledged letter. A copy of P.C. 1988-762 is exhibit "C" to Ms. E. MacKenzie's affidavit sworn May 6, 1988.
Whereas the Canadian Radio-television and Telecom munications Commission rendered Telecom Decision CRTC 86-17 on October 14, 1986, in which it found that an appropriate compensation for Bell Canada employees tem porarily transferred to Bell Canada International Inc. would be a twenty-five per cent contribution to be calculated on an imputed cost comprising the aggregate of the annual salary and labour related costs of each such employee, immediately prior to transfer;
Whereas on March 17, 1988, the Commission determined in Telecom Decision CRTC 88-4 that, for regulatory pur poses, the compensation for any employee temporarily trans ferred from either Bell Canada or Tele-Direct (Publications) Inc. to any affiliated company should be as prescribed in Telecom Decision CRTC 86-17;
Whereas on March 25, 1988, BCE Inc. and Bell Canada International Inc. filed a petition pursuant to subsection 64(1) of the National Telecommunications Powers and Procedures Act asking the Governor in Council to vary or rescind that part of Telecom Decision CRTC 86-17, as well as that part of Telecom Decision CRTC 88-4 dealing with the compensation paid by Bell Canada International to Bell Canada for employees temporarily transferred from Bell Canada to Bell Canada International;
And Whereas the Governor in Council has determined that it is in the public interest to vary Telecom Decision CRTC 88-4.
Therefore Her Excellency the Governor General in Coun cil, on the recommendation of the Minister of Communica tions, pursuant to subsection 64(1) of the National Telecom munications Powers and Procedures Act, hereby varies Telecom Decision CRTC 88-4 rendered March 17, 1988, by deleting at pages 58 and 59 the five paragraphs under the
heading "3) Conclusions" and substituting therefor the following:
"The costs associated with the temporary transfer of employees consist solely of the accounting costs, being the costs of selecting and reintegrating Bell Canada employees, extending their leave of absence and other administrative costs directly associated with their transfer, and the costs associated with the re-employment guaran tees. Therefore, for regulatory purposes, the compensation for any employee temporarily transferred from either Bell Canada or Tele-Direct to any affiliated company shall be as follows:
(a) for each employee transferred for periods exceeding 30 days, a one time fee of $1,840;
(b) for each employee repatriated, a one time fee of $455;
(c) for each extension of a leave of absence for an employee, a one time fee of $90;
(d) an annual fee of $1,000 for each employee tem porarily transferred; and
(e) in addition to the amounts specified in paragraphs
(a) to (d), an annual fee to be determined by the
Commission, which fee is to be equivalent to the cost
associated with providing a guarantee of re-employment. In order for the Commission to determine the amount identified in (e), Bell Canada is required to file with the Commission, by June 15, 1988, its audited costs associated with the re-employment guarantees, and all relevant infor mation and documentation that would be useful to the Commission in making its determination."
Certified to be a true copy—Copie certifiée conforme
"P. Tellier"
Clerk of the Privy Council—Le greffier du Conseil Privé
And so, despite the Minister's earlier assurance on October 9, 1987 to the CRTC's Chairman that "it was not my intention to leave the impression [in even earlier correspondence with the Chairman & C.E.O. of BCE] that the determination of the value of these transfers [of Bell's employees] should be restricted to the use of accounting costs" [exhibit "J" to Ms. MacKenzie's affidavit sworn May 10, 1988], the Order in Council really comes down to a restriction to the use of "audited costs associated with the re-employment guarantees". Of course, the Minister and the Governor in Coun cil are not bound in law by the Minister's previous letters to soothe the apprehensions of the interven- ers' executives about Decision 86-17 prior to the CRTC hearing which ultimately produced Deci sion 88-4. Those executives enjoyed perfect liberty to approach, and engage in correspondence with, the Minister, as did CAC, NAPO and CBTA et al. The whole correspondence is copied as exhibits
"C", "D", "E", "F", "G", "H" and "J" to the supplementary affidavit sworn May 10, 1988.
Now, it should also be noted that on April 22, 1988, the same date as that of P.C. 1988-762, the Information Services of the Minister's department, called Communications Canada, issued a com- muniqué on the very subject of the variation of CRTC Decision 88-4. This news release (exhibit "D" to the affidavit of Ms. MacKenzie, sworn May 6) is too long, to recite in full here, running as it does to 2 1 / 4 full pages. A reasonable sampling of its passages, including the one which is impugned by the plaintiffs is warranted. The plain tiffs do not mean to be facetious when they char acterize the communiqué as the "reasons for deci sion" of the Governor in Council.
NEWS RELEASE COMMUNIQUÉ
APRIL 22, 1988 FOR IMMEDIATE RELEASE
Governor in Council varies CRTC decision regarding
Bell Canada
OTTAWA—The Governor in Council has varied CRTC Deci sion 88-4 to ensure that Bell Canada International (BCI) is not unfairly placed at a disadvantage in the highly competi tive international telecommunications market because of an arbitrary financial calculation. The variance includes meas ures to protect the interests of Bell Canada subscribers and prevent any cross-subsidy between Bell and BCI.
At issue is the level of fees paid by BCI to Bell Canada when Bell employees are temporarily transferred to BCI to work on international consulting contracts. BCI, a subsidiary of Bell Canada Enterprises, is not regulated by the CRTC. It is a wholly-owned Canadian company that has provided telecommunications consulting services to governments and telecommunications companies in some 70 countries over the past 20 years. The hundreds of Canadians employed by BCI have helped establish Canada's reputation as a world leader in the provision of high-technology goods and services. BCI's consulting contracts also have led to significant sales of Canadian-made products ranging from wire and sophisticat ed switching equipment to automobiles.
In the absence of detailed financial analysis of these indirect costs by Bell Canada, the CRTC concluded, based on the evidence before them, that an appropriate contribu tion would be a 25 per cent surcharge on the annual salary and labor-related costs of each employee. In its decision 88-4 of March 17, 1988, the Commission set the compensation to be paid to Bell or its regulated affiliate, Tele-Direct, for
temporary transfer of employees at the 25 per cent level. On March 25, 1988, a petition was submitted to the Governor in Council by Bell Canada Enterprises and Bell Canada Inter national requesting that the level be lowered.
In response to this petition, the Government has reviewed the evidence presented before the CRTC. The fundamental principle underlying this review has been the Government's commitment that Bell Canada subscribers should not be required to cross-subsidize the operations of its unregulated affiliate. The Government has also been guided by its recog nition of the important economic contribution made to all regions of the country as a result of the international sale of Canadian telecommunications goods and services.
As a result of this review, the Government has concluded that the compensation levels proposed by the CRTC are arbitrary and appear to be excessive and potentially damag ing to Canada's interests internationally. The Government has been unable to identify any other jurisdiction where surcharges of such a magnitude are applied to the transfer of employees in similar circumstances, between regulated tele communications companies and their unregulated affiliates. The Government also notes that levels of compensation paid by BCI to Bell Canada are the same as those paid by BCI to other regulated Canadian telecommunications companies when their employees are temporarily assigned to work on BCI projects. In view of these factors, the Government is of the view that the level set by the CRTC would subject BCI to unequal treatment in relation to its Canadian competitors and place it at a severe disadvantage in relation to its major international competitors.
In addition, the Government is of the view that the one indirect cost suggested by the intervenors that requires spe cific compensation is the re-employment guarantee offered to Bell Canada employees when they transfer to BCI and has varied the decision so that Bell Canada will be reimbursed for this cost. Since no evidence has been presented before the CRTC to quantify this cost the Governor in Council requires that Bell Canada file with the Commission, by June 15, 1988, its audited costs associated with the re-employment guarantees and all relevant information and documentation which would be useful to the Commission in making its own determination.
The communiqué was issued either simultane ously with, or right after, the promulgation of the order in council. It was not issued by the Governor in Council, but emanated from the "Press Secre tary, Minister's Office, Ottawa ..." (page 3), apparently through "Information Services" also in Ottawa, and it bears the Government logo for the Department of Communications. Being a news release meant to inform the public and thereby to promote favourable opinion of the intervention by the Governor in Council, it is not shown to be anything like a "regulatory impact statement"
which is formulated before any order in council is composed or promulgated, and which operates for and as the factual basis upon which an order in council is made.
Thus, whereas it may, by strong inference, be shown that the Governor in Council could have been misled and misinformed by a prior regulatory impact statement in formulating an order in coun cil, the same notion does not operate for a news release possibly composed by a Minister's press secretary. The plaintiffs' counsel urged the Court, without contradiction by opposing counsel, to adopt a worldly attitude and evince inherent understanding of how these matters really work. By that standard, one would not place much reli ance on such a news release, for knowledgeable persons understand that in the releases of the federal and provincial governments of no matter which partisan stripe there is a goodly element of puffery for political advantage. Indeed, if by seren dipitous coincidence additional good effects of an order in council can be perceived beyond the limits imposed by the fundamental statute, why should any Minister's press secretary worth his or her salt not fold them into the resulting communiqué? There is, in that news release, no evidence even by inference that when it passed the Order in Council P.C. 1988-762, the Governor in Council was even aware of the contents of the news release, and there is certainly no inference that it was misin formed or misled by that news release, which may be considered as having been formulated after the event.
There is much jurisprudence holding that an order in council or a Minister's direction which purports to override a board's or commission's mandatory duties (Re. Public Utilities Review Commission Act (1986), 52 Sask. R. 53; 26 Admin.L.R. 216 (C.A.)), or which purports to deal with a different type or kind of order or to do something extraneous to or different from the scope of the Commission's decision (Jasper Park Chamber of Commerce (The) v. Governor General in Council, [1983] 2 F.C. 98 (C.A.), at page 115; Re Doctors Hospital and Minister of Health et al. (1976), 12 O.R. (2d) 164 (Ont. H.C.), at page 176), is voidable by curial declaration and of no effect. There is jurisprudence to the same effect in sibling countries of the same parliamentary and
common law traditions in their public law as Canada, even though they have not the same constitutional imperatives or rights for everyone as those expressed in Canada. Those jurisprudential authorities are Padfield v. Minister of Agricul ture, Fisheries and Food, [1968] A.C. 997 (H.L.) from England, and FAI Insurances Ltd y Winneke (1982), 41 ALR 1 (H.C.) from Australia. In the latter case, Gibbs C.J. cites to the like effect Reade v. Smith, [1959] N.Z.L.R. 996 (S.C.) from New Zealand.
In a slightly different context, where the Gover nor in Council makes regulations of wide, if not general, import where there is no lis or direct intervention in the decision of any adjudicatory board, tribunal or commission or other statutory power wielder, the Supreme Court of Canada in Thorne's Hardware Ltd. et al. v. The Queen et al., [1983] 1 S.C.R. 106; 143 D.L.R. (3d) 577, per Dickson J., the present chief Justice of Canada, writing for the unanimous Court, teaches [at pages 111 S.C.R.; 581 D.L.R.]:
Decisions made by the Governor in Council in matters of public convenience and general policy are final and not reviewable in legal proceedings. Although, as I have indicat ed, the possibility of striking down an order in council on jurisdictional or other compelling grounds remains open, it would take an egregious case to warrant such action. This is not such a case. [Emphasis not in original text.]
Remarkably, counsel for the plaintiffs and counsel for the interveners both cited the foregoing pas sage in argument on behalf of their respective clients.
Analytically viewed, the decision made here by the Governor General in Council pursuant to sub section 64(1) of the NTPP Act is not in a matter of public convenience or general policy. The inter vention of the Governor in Council here operates in a matter of private convenience for and on behalf of two unregulated corporations BCE and BCI, the interveners in the case at bar. It does not operate in a matter of general policy, but rather the particular policy enunciated in the Minister's letters and in P.C. 1988-762 itself, of requiring the CRTC to base Bell's compensation on the audited statements—to take an accountant's approach to previously spent dollars and cents and not an actuary's approach to incidence of forecastable risk. Thus, on the authority of the Thorne's Hard-
ware judgment, both the power vested in the Gov ernor in Council, and the particular exercise of that power, are not beyond judicial review.
The declaration of that principle of no immunity for orders in council when and if made unlawfully was enunciated by the Supreme Court in Attorney General of Canada v. Inuit Tapirisat of Canada et al., [1980] 2 S.C.R. 735, at page 748. Confirma tion of the firmly long-standing principle that nei ther the Sovereign nor the Sovereign in Council, including the Sovereign's Canadian regent, is above the law, was expressed in latter years by the Supreme Court once again in Operation Dismantle Inc. et al. v. The Queen et al., [ 1985] 1 S.C.R. 441, at page 455.
In order to make a fair review of the particular exercise of the powers accorded pursuant to sub section 64(1) of the National Telecommunications Powers and Procedures Act, one must examine and consider it with care. Except for the admitted ly confining existence of an "order, decision, rule or regulation of the Commission" which is analo gous to jurisdiction as is a spark of ignition, there is almost no confinement to the conflagration of powers vested by Parliament in the Governor in Council. That body may thereon at any time, either upon petition of any party, person or com pany interested, or of its own motion, and without any petition or application, simply do what it will to or about any CRTC decision such as Telecom Decision 88-4, even though rendered inter partes; and whatever the cabinet does about or to such regulation, its order is binding upon the CRTC and all parties. It is difficult to describe those powers in adjectives other than arbitrary, despotic and autocratic.
The question of whether, in times of no emer gency, it is constitutionally legitimate for the Par liament of Canada to accord by ordinary legisla tion to the Governor in Council albeit narrowly confined but otherwise absolute powers of unlimit ed duration, especially when there is no legislative attempt to invoke section 33 of the Charter or section 2 of the Canadian Bill of Rights [R.S.C. 1970, Appendix III], is a question which must be left to another day. The plaintiffs' counsel in open
court eschewed and foreswore in these proceedings any attack on the vires of Parliament to enact subsection 64(1) of the NTPP Act. The attack is upon the manner in which the Governor in Council exercised those powers.
What manner of powers is accorded? In the Inuit Tapirisat judgment, Estey J. characterized the powers as legislative. He made several refer ences of that nature in [ 1980] 2 S.C.R. thus:
[at pages 752 to 754]
The Commission is empowered by s. 321 of the Railway Act, supra, and the section of the CRTC Act already noted to approve all charges for the use of telephones of Bell Canada. In so doing the Commission determines whether the proposed tariff of tolls is just and reasonable and whether they are discriminatory. Thus the statute delegates to the CRTC the function of approving telephone service tolls with a directive as to the standards to be applied. There is thereafter a secondary delegation of the rate-fixing function by Parlia ment to the Governor in Council but this function only comes into play after the Commission has approved a tariff of tolls; and on the fulfillment of that condition precedent, the power arises in the Governor in Council to establish rates for telephone service by the variation of the order, decision, rule or regulation of the CRTC. While the CRTC must operate within a certain framework when rendering its decisions, Parliament has in s. 64(1) not burdened the executive branch with any standards or guidelines in the exercise of its rate review function. Neither were procedural standards imposed or even implied ... The executive branch cannot be deprived of the right to resort to its staff, to departmental personnel concerned with the subject matter, and above all to the comments and advice of ministerial members of the Council who are by virtue of their office concerned with the policy issues arising by reason of the petition whether those policies be economic, political, commercial or of some other nature. Parliament might otherwise ordain, but in s. 64 no such limitation had been imposed on the Governor in Council in the adoption of the procedures for the hearing of petitions under subs. (1).
This conclusion is made all the more obvious by the added right in s. 64(1) that the Governor in Council may "of his motion" vary or rescind any rule or order of the Commission. This is legislative action in its purest form where the subject matter is the fixing of rates for a public utility such as a telephone system.
[at pages 758 to 760]
The Governor in Council under s. 64(1) is entitled to vary decisions on telephone tariffs already made by another body, but this difference does not strike me as material. Nor does the fact that a citizen may invoke the review procedure of s. 64(1) via petition, while no comparable right existed under the English act, constitute a valid ground of distinction. There is only one review procedure under s. 64(1) though it may be triggered in two ways, i.e., by petition or by the Governor in Council's own motion. It is clear that the orders in question in Bates and the case at bar were legislative in
nature and I adopt the reasoning of Megarry J. to the effect that no hearing is required in such cases. I realize, however, that the dividing line between legislative and administrative functions is not always easy to draw: see Essex County Council v. Ministry of Housing and Local Government ((1967), 66 L.G.R. 23 (Ch.D.)).
Where, however, the executive branch has been assigned a function performable in the past by the Legislature itself and where the res or subject matter is not an individual concern or a right unique to the petitioner or appellant, different considerations may be thought to arise. The fact that the function has been assigned as here to a tier of agencies (the CRTC in the first instance and the Governor in Council in the second) does not, in my view, alter the political science pathology of the case. In such a circumstance the Court must fall back upon the basic jurisdictional supervisory role and in so doing construe the statute to determine whether the Governor in Council has performed its functions within the boundary of the parliamentary grant and in accordance with the terms of the parliamentary mandate.
In any case, I can discern nothing in s. 64(l) to justify a variable yardstick for the application to that section of the principle of fairness according to the source of the informa tion placed before the Governor in Council for the disposition of the respondents' petition. The basic issue is the interpreta tion of this statutory provision in the context of the pattern of the statute in which it is found. In my view, once the proper construction of the section is determined, it applies consist ently throughout the proceedings before the Governor in Council.
Just eight short years ago in 1980, the jurispruden- tial world was not quite the same as it is now. Parliament and elected federal and provincial legislators and legislatures have acted decisively and considerably changed the legal and constitu tional basis for the lengthy and didactic explana tion by Estey J. as to why the Supreme Court of Canada, in 1980, simply, in a black-letter way, followed "this statutory provision in the context of the pattern of the statute in which it is found".
In so far as purely legislative powers delegated by Parliament to the executive branch little, if anything, has been changed. This Court has held that truly legislative powers, (for example, to make regulations under, and consonant with the tenor of a statute), granted to either the federal or provin cial executive are superior powers of much greater legal hardiness than municipal regulatory powers: Aerlinte Eireann Teoranta v. Canada, [1987] 3 F.C. 383, at pages 391 and 400 to 405; 9 F.T.R. 29
(T.D.), at pages 34 and 39 to 42; and C.E. Jamie- son & Co. (Dominion) Ltd. et al. v. Attorney-Gen eral of Canada (1987), 37 C.C.C. (3d) 193, at pages 231 to 244; 12 F.T.R. 167 (F.C.T.D.), at pages 194 to 204.
The power to legislate, in a parliamentary democracy, conjures up the introduction of a pro posal for legislation—a "bill"—in an open, public and (except for the Senate) democratically elected assembly, where the members have the right to debate it by criticism, opposition and even praise- ful explanation, and where the government of the day usually but with certain exceptions stakes its continuing right to exist as such upon the outcome of the vote if it also bears an expression of confi dence in the government of the day. The federal legislature in Canada is composed of the Senate, the House of Commons and the Sovereign, repre sented by the Governor General. It legislates. Thus, when Estey J., in Inuit Tapirisat, character ized the power accorded under subsection 64(1) as "legislative" he could not have had the above described legislative process, power and institution in mind. He meant a power delegated by Parlia ment through legislation. Certainly, as held in that case (at page 752 S.C.R.) the power is not judicial or adjudicatory. The continuum of adjudicatory proceedings leads from the CRTC not to the Gov ernor in Council, but to the Appeal Division of this Court. The power given by subsection 64(1) might more precisely be defined as a statutory power for intervention to correct or rescind decisions which do not conform to the government's assertion of policy in such matters. To describe that power as legislative misses the mark set by the Supreme Court in the later judgment in Thorne's Hard ware, earlier cited, in all instances such as the present one where the power is not wielded "in matters of public convenience and general policy". Determining the Saint John harbour boundaries from time to time is a truly legislative power. However correcting the decision of the CRTC in Bell's case, according to the Government's discrete policy on the calculation of Bell's appropriate com pensation for lending its employees to BCI, by directing the CRTC as to what exclusive factors to utilize in making that calculation, is something less legislative in the sense described in Thorne's
Hardware. It is not a matter of public convenience nor of general policy.
This power to make decisions in matters of private convenience and discrete policy is a special power to govern the deliberative and administra tive conclusions and actions of the CRTC. It does not operate entirely at large, but only in relation to those decisions, orders or regulations made by the Commission which the Governor in Council wishes to change or quash. It operates also in and over the realm of persons' rights and obligations as may be determined by the proceedings before the CRTC. This demonstrates the importance of noting that the judgment in Inuit Tapirisat must be regarded as having been overtaken somewhat by intervening and momentous events. Two such events are the 1982 amendments of the Constitution [Constitu- tion Act, 1982, Schedule B, Canada Act 1982, 1982, c. 11 (U.K.)] and the revivification of the Bill of Rights by the Supreme Court of Canada in Singh et al. v. Minister of Employment and Immigration, [1985] 1 S.C.R. 177, at pages 226 to 231.
The 1982 amendments to and patriation of the Constitution are momentous not only for the entrenchment of the Canadian Charter of Rights and Freedoms and all which that entails, but also because Canadian legislators effectively added to the written definitions of what manner of country Canada is. The two are distinct for the new written definitions, although some of them are written into the Charter, are quite independent of its provi sions, and stand for all purposes as constitutional definitions of Canada. The first such definition was expressed in the opening words of the Consti tution Act, 1867 [30 & 31 Viet., 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)] ordaining that Canada was to have "a Constitution similar in Principle to that of the United Kingdom". Thus were imported all of the unwritten constitutional conventions and traditions including those con stituted by and incorporated into the common law which is the basis of all public law in Canada and
all provinces. Further refinements were imported by jurisprudence, but in 1960 once again the legis lative branch, for the Dominion that time, further defined Canada in writing by declaring that the Canadian Nation is founded on principles which acknowledge inter alia "a society of free men and free institutions" who and which "remain free only when freedom is founded upon respect for moral and spiritual values and the rule of law". These descriptions, which precede the substantive provi sions of the Bill of Rights, were enacted by Parlia ment in the context of the laws of Canada only, but not the provincial laws. Once more, in 1981 and 1982, elected legislators both federal and pro vincial (with the unelected legislators of the Senate) posited further legal and constitutional definitions of Canada in the final amendments which they persuaded the Parliament at Westmin- ster to pass in regard to Canada's constitution. Again the description that Canada is founded upon principles which "recognize the supremacy of God and the rule of law" appears, but this time constitutionally entrenched vis-à-vis both national and provincial laws and institutions, in this "free and democratic society" which imposes only "such reasonable limits" on Canadians' "rights and free doms" guaranteed by the Charter, as are "pre- scribed by law as can be demonstrably justified". Like the federal Bill of Rights before it, the Char ter sets its face against treating people unfairly unequally or arbitrarily; and when and if Parlia ment should ever seek to do so, those earlier legislators exacted that it do so deliberately by providing that such legislation must state that it is enacted to operate notwithstanding the Bill of Rights and/or section 2 or sections 7 to 15 of the Charter.
So, the Charter has been entrenched and the Bill of Rights has been revived since the Supreme Court, speaking through Estey J., rendered its judgment in Inuit Tapirisat. Although Estey J. was cognizant of a distinction between intervening, for policy reasons, to correct a decision rendered as
between contending parties, and legislating for general public purposes (at page 752 S.C.R.), yet he was then free to lump the two functions to gether as a simply legislative function. As if to confirm that characterization of function, when Estey J. asked if there were a duty to observe natural justice or at least a lesser duty of fairness (at page 745 S.C.R.), he ultimately answered in the negative (at pages 755-756 S.C.R.) because "in so doing, the Cabinet . .. must be free to consult all sources which Parliament itself might consult had it retained this function". That is to say, because the power to intervene inter partes is blended or lumped in with the power to legislate, and in legislating the legislator is not obliged (at least between elections) to consult everyone or hear everyone, then, His Lordship concluded, that durable basic principle of fundamental justice audi alteram partem did not constrain the Governor in Council when intervening in a CRTC decision made inter partes. No doubt Mr. Justice Estey declared the law as it had stood on October 7, 1980, but such an analysis is no longer valid in 1988.
Today especially, because of the persistent labours of the executive and legislative branches of Canadian governments we are constitutionally described as the very antithesis of a state in which arbitrary, despotic or autocratic powers, such as are found in subsection 64(1), are dished out and left in the hands of any State board, commission or other tribunal. It is not too bold to suggest that Parliament, in reposing such powers in any person or body of persons, including the Cabinet, must be taken to expect that those powers in their exercise will be interpreted in consonance with the Consti tution and the tenor of the law.
The plaintiffs emphasized section 15 of the Charter as their basis of attack on Order in Coun cil P.C. 1988-762. They have little comfort in that provision for it essentially exacts of all persons in authority to treat similarly people who are similar ly situated in terms of status, plight or legal posi tion. Section 15, in force since April 17, 1985, declares that every individual is equal before and under the law, having the right to equal protection
and benefit of the law without discrimination as to various human attributes and characteristics.
Section 15 does not guarantee corporations any rights of equality or non-discrimination. That proposition was stated positively although paren thetically by a unanimous panel of this Court's Appeal Division in Smith, Kline & French Laboratories Ltd. v. Canada (Attorney General), [1987] 2 F.C. 359; (1986), 27 C.R.R. 286; 34 D.L.R. (4th) 584; 12 C.P.R. (3d) 385; 78 N.R. 30 where at pages 364 F.C. in footnote 2; 290 C.R.R.; 588 D.L.R; 388 C.P.R.; 30 N.R., the Court held:
Any possible problems resulting from the attempt by corpo rate plaintiffs to assert rights which can only be enjoyed by individuals are resolved by the Trial Judge's finding, not put in issue on appeal, that the individual plaintiffs possessed the necessary standing to assert the claims in their own behalf.
An application for leave to appeal to the Supreme Court of Canada was dismissed: [1987] 1 S.C.R. xiv. First of all none of the parties or interveners can assert a right of equality to the Sovereign, by whatever designation of The Queen, the Crown, the Governor General in Council, the Government of Canada or any of its emanations or the various boards, commissions or other tribunals which are creatures of statute. So it can be taken as estab lished in the following jurisprudence: R. v. Stod- dard (1987), 59 C.R. (3d) 134 (Ont. C.A.), per Tarnopolsky J.A. at page 145; Ominayak v. Norcen Energy Resources Ltd. (1987), 83 A.R. 363 (Q.B.) and Leighton v. Canada, (F.C.T.D. T-165-85, May 18, 1988 not yet reported).
Here, the only party who is an individual, the plaintiff Arthur Milner has made out no case to be treated equally with any similarly situated individual. Like the two corporate interveners, he was not a party to the proceedings before the CRTC. Howerver, unlike BCE or BCI, neither was Mr. Milner a party or even a would-be party to the proceedings undertaken pursuant to subsec tion 64(1). The corporate parties herein appear to be relatively similarly situated but section 15 of the Charter holds nothing for or against any of them since it operates in the realm of quintessen-
tially human, not corporate, rights. Thus the plain tiffs' invocation of section 15 of the Charter as a basis of attack on the Cabinet's promulgation of P.C. 1988-762 simply fails on that ground.
The arguments of all counsel and the question ing of them by the Court ranged much further than section 15 of the Charter. In ordinary adver sary litigation the Court is not obliged to come to the rescue of a litigant whose pleadings are inept or otherwise off the target. However as was most clearly implied by Mr. Justice Beetz for the unani mous Supreme Court of Canada in Manitoba (Attorney General) v. Metropolitan Stores Ltd., [1987] 1 S.C.R. 110, at page 135, in constitutional cases courts "have found it necessary to rise above the interests of private litigants up to the level of the public interest". The Court, in a constitutional case, must not allow a private litigant's case to miscarry if that result would contort or contradict constitutional principles or imperatives. So although the plaintiffs started by invoking section 15 of the Charter, the Court directed the lawyers' arguments also to the application of paragraph 2(e) of the Canadian Bill of Rights, R.S.C. 1970, Appendix III. Even although the plaintiffs origi nally made no reference to that provision of the Bill of Rights, the Court bears a responsibility to and under the Constitution to keep respect for the Constitution paramount, and to save its principles from being subverted, if such be the case, or perhaps equally bad, from being overlooked or ignored in the premises. So, the debate at trial included discussion of paragraph 2(e) of the Bill of Rights, as it ought to have done in these circumstances.
The Canadian Bill of Rights is of quasi-consti tutional import, unlike the Charter which is consti tutionally entrenched and binding on all legisla tures and governments in Canada, including the federal Parliament and government. The Bill of Rights is an Act of Parliament which received Royal Assent on August 10, 1960. In its section 2, the Bill of Rights enacts and declares how every other law of Canada, that is, every federal law, is
to be construed and applied as to its meaning and operation. Paragraph 2(e) ordains:
2. Every law of Canada shall, unless it is expressly declared by an Act of the Parliament of Canada that it shall operate notwithstanding the Canadian Bill of Rights, be so construed and applied as not to abrogate, abridge or infringe or to authorize the abrogation, abridgment or infringement of any of the rights or freedoms herein recognized and declared, and in particular, no law of Canada shall be construed or applied so as to
(e) deprive a person of the right to a fair hearing in accordance with the principles of fundamental justice for the determination of his rights and obligations;
For many years it seemed to be assumed that the Bill of Rights existed in a moribund state. Then, in 1985, the equally divided approaches of the Supreme Court of Canada invoked respectively the Charter and the Bill of Rights by coming to the one effective conclusion, in the previously cited case of Singh. No submissions were made at the time of its first hearing but, as in the case at bar, the Supreme Court of its own motion called for submissions upon the application of the Canadian Bill of Rights. In the result, Mr. Justice Beetz wrote for half of the number of the sitting judges in support of the applicability of the Bill of Rights.
An important passage in the reasons of Beetz J. is reported on page 228 S.C.R. and runs as follows:
... I am not absolutely clear whether or not it was conceded by the Attorney General that the "rights" referred to in s. 2(e) of the Canadian Bill of Rights are not the same rights or rights of the same nature as those which are enumerated in s. 1, including "the right of the individual to life, liberty, security of the person ... and the right not to be deprived thereof except by due process of law".
Be that as it may, it seems clear to me that the ambit of s. 2(e) is broader than the list of rights enumerated in s. 1 which are designed as "human rights and fundamental free doms" whereas in s. 2(e), what is protected by the right to a fair hearing is the determination of one's "rights and obliga tions", whatever they are and whenever the determination process is one which comes under the legislative authority of the Parliament of Canada. It is true that the first part of s. 2 refers to "the rights or freedoms herein recognized and declared", but s. 2(e) does protect a right which is funda mental, namely "the right to a fair hearing in accordance with the principles of fundamental justice" for the determi nation of one's rights and obligations, fundamental or not. It is my view that, as was submitted by Mr. Coveney, it is
possible to apply s. 2(e) without making reference to s. l and that the right guaranteed by s. 2(e) is in no way qualified by the "due process" concept mentioned in s. 1(a). [Emphasis not in original text.]
Further at pages 238 and 239, His Lordship is reported as holding that the Bill of Rights applies equally to statutory provisions enacted both before and after the adoption of the Bill of Rights. More over, in a recent unanimous decision of the Appeal Division of this Court relating to sponsors' rights to fair procedures before the Immigration Appeal Board, Rajpaul v. Canada (Minister of Employ ment and Immigration), [1988] 3 F.C. 157, para graph 2(e) was further nourished, in this finding expressed by Mr. Justice Mahoney [at page 159]:
The learned Trial Judge has cited considerable impeccable authority in support of his conclusion that paragraph 2(e) of the Canadian Bill of Rights [R.S.C. 1970, Appendix Ill] applies to the hearing of the appeal. We will not repeat that authority; we do agree with the conclusion.
Corporations are not included in the meaning of "individuals", but, for better or for worse they are subsumed into "persons". Thus paragraph 2(e) can be seen to apply to individual human beings as well as to corporations. The determination process by the Governor in Council demonstrably comes under the legislative authority of the Parliament of Canada, being accorded by subsection 64(1) of the NTPP Act.
Here, then, was a decision, CRTC 88-4 (preced- ed by CRTC 86-17) made upon a fair adjudication of issues raised by contending parties, in which NAPO was a party whose standing and contribu tion to the debate were recognized by the CRTC's award of costs in NAPO's favour. Thereupon two unregulated related companies went behind the notional "curtain" in order to "whisper" a petition into the Cabinet's ear, seeking rescission or varia tion of an important part of that hard-fought, but fairly fought, CRTC decision. It was "whispering" in the sense that it was asserted to be a confiden tial petition. NAPO perhaps ill-advisedly declined to accept the condition of confidentiality and thereby figuratively blinded itself, but it did ask, in its letter to the Clerk of the Privy Council, for time within which to prepare a counter-proposal.
Had the Governor in Council set a time for reply or even acknowledged NAPO's request in any manner, these reasons would be infinitely shorter, if expressed at all. The Governor in Coun cil was, after all, not about to embark upon a truly legislative enactment in "a matter of public conve nience or general policy", to hearken back to the Supreme Court's judgment in Thorne's Hardware Ltd. It was, rather, about to intervene into a CRTC decision made between contending parties, on what amounts to the privately whispered peti tion of non-parties.
It was about to exercise its power of corrective guidance in a particular matter of a determination of the parties' rights and obligations. (There is no consequence to the employment in paragraph 2(e) of the personal pronoun in "his rights and obliga tions". After all in subsection 64(1) in relating to the Governor in Council, the expression "in his discretion" is employed.) NAPO, representing Bell's subscribers—so recognized by the CRTC— and Bell itself were about to have their rights and obligations determined by the Governor in Council.
The Governor in Council went ahead, simply ignoring NAPO's request to be "heard", in the sense of making written submissions. In 1988, the Governor in Council is obliged to respect the basic canon of "natural justice", "fundamental justice" or just plain ordinary fairness, audi alteram par- tem—hear the other party, before making a deter mination of the other party's rights and obliga tions. The Governor in Council, in the absence of emergency or security intelligence exigencies, cannot lawfully do otherwise.
Order in Council P.C. 1988-762 effects such a determination even although it refers the matter back to the CRTC, because the Order in Council fetters the considerations to be admitted by the CRTC by restricting them to Bell's audited costs, and forecloses wider considerations about which the Minister, in earlier correspondence, said she would not wish to leave a mistakenly restricted impression. Thus Bell, to obtain the compensation which the CRTC adjudged to be its due for the sake of not raising the rates it charges to subscrib-
ers, and the subscribers, represented by NAPO, have indeed had their rights and obligations deter mined, despite the reference back to the CRTC. Because all of this ordering, charging and regulat ing occurs pursuant to laws of Canada, there is no dilution or denigration of the very rights and obli gations contemplated by paragraph 2(e) of the Canadian Bill of Rights.
Order in Council P.C. 1988-762 must be quashed, but without prejudice to the undoubted right of the Governor in Council to address the matter anew, but lawfully, by calling for responses from everyone, person, firm or corporation who, or which, was a party to the proceedings before the CRTC. That is the only way to ensure to them— whether they actually respond or not—the right to a fair hearing in accordance with the principles of fundamental justice for the determination of their rights and obligations.
A cynic might ask whether there is any conse quence if the Governor in Council does not pay any attention to such responses. The answer can be found in the reasons of Estey J. in the Inuit Tapirisat case, fron which one may draw many and various teachings. Thus, one could apply to the imaginary cynic's question that which Estey J. wrote at page 753 about the situation in which the Governor in Council would make no examination of the contents of a petition. The same would apply to a response. It would simply be unlawful— with all that entails—to ignore either a petition or a reply from the other parties, because such disre gard would constitute no "hearing" at all. The Governor in Council habitually employs numerous intelligent and wholly literate people to help in such matters, its staff, as well as departmental personnel concerned with the subject-matter, all mentioned by Estey J. on page 753 S.C.R., to whom it may lawfully resort for help in consider ing replies as well as petitions.
In the United Kingdom, and in that part desig nated administratively as England and Wales, there is clearly no Canadian Bill of Rights in force, only the common law of rights and obliga tions. So, in Padfield v. Minister of Agriculture, Fisheries and Food earlier cited, where a discre tion to refer complaints was accorded by Act of
Parliament to the Minister, the same cynical ques tion arose. Lord Pearce is reported, at pages 1053 and 1054 A.C. as writing:
It is quite clear from the Act in question that the Minister is intended to have some duty in the matter. It is conceded that he must properly consider the complaint. He cannot throw it unread into the waste paper basket. He cannot simply say (albeit honestly) "I think that in general the investigation of complaints has a disruptive effect on the scheme and leads to more trouble than (on balance) it is worth; I shall therefore never refer anything to the commit tee of investigation." To allow him to do so would be to give him power to set aside for his period as Minister the obvious intention of Parliament, namely, that an independent com mittee set up for the purpose should investigate grievances and that their report should be available to Parliament. This was clearly never intended by the Act. Nor was it intended that he could silently thwart its intention by failing to carry out its purposes. I do not regard a Minister's failure or refusal to give any reasons as a sufficient exclusion of the court's surveillance. If all the prima facie reasons seem to point in favour of his taking a certain course to carry out the intentions of Parliament in respect of a power which it has given him in that regard, and he gives no reason whatever for taking a contrary course, the court may infer that he has no good reason and that he is not using the power given by Parliament to carry out its intentions. In the present case, however, the Minister has given reasons which show that he was not exercising his discretion in accordance with the intentions of the Act.
In that same judgment, Lord Upjohn is reported in these words, at page 1058 A.C.:
The Minister in exercising his powers and duties, conferred upon him by statute, can only be controlled by a prerogative writ which will only issue if he acts unlawfully. Unlawful behaviour by the Minister may be stated with sufficient accuracy for the purposes of the present appeal (and here I adopt the classification of Lord Parker C.J., in the Divisional Court): (a) by an outright refusal to consider the relevant matter, or (b) by misdirecting himself in point of law, or (c) by taking into account some wholly irrelevant or extraneous consideration, or (d) by wholly omitting to take into account a relevant consideration.
There is ample authority for these propositions which were not challenged in argument. In practice they merge into one another and ultimately it becomes a question whether for one reason or another the Minister has acted unlawfully in the sense of misdirecting himself in law, that is, not merely in respect of some point of law but by failing to observe the other headings I have mentioned. [Emphasis not in original text.]
Such was the state of the common law in England as long ago as 1968.
In Canada, today in 1988, the law not only requires that all parties before the CRTC (other than the petitioner(s) to the Governor in Council) be accorded a reasonable and timely opportunity to respond in writing to the petition, but also that their responses (if any) be considered with as much care and concern as the original petition itself is considered. That is to say the petition and any responses must be considered meticulously and seriously. If the Governor in Council were to con sign such responses, literally or figuratively, to the waste paper basket, nothing in subsection 64(1) could save that body from acting utterly unlawful ly and it would be lawfully subject, in first instance at least, to public exposure by anyone who would know of it.
The duty to receive representations inescapably imports the duty to accord serious consideration to those representations, because any less consider ation would clearly deprive the other parties of the right to a fair hearing in accordance with the principles of fundamental justice for the determi nation of their rights and obligations. Any less consideration, therefore, would violate paragraph 2(e) of the Canadian Bill of Rights. No party was able to point to any provision of federal statute law to the express effect that subsection 64(1) of the NTPP Act can "operate notwithstanding the Canadian Bill of Rights".
It should not have been necessary for this Court alone to interpret the powers of the Governor in Council under subsection 64(1), when intervening in a decision made between discretely contending parties, in accordance with the Bill of Rights. Parliament itself might have so restrained the application of subsection 64(1) by means of appro priate amending legislation. Again, the law offi cers of the Crown might have advised such restrained interpretation and exercise of the statu tory powers. The Court is not necessarily the institution of first resort and it would prefer not to be such.
Still, judicial review is legitimate at any stage of the conflict despite the view, strongly held in some quarters in the United States of America and even in Canada, that judicial review is somehow anti- majoritarian, a polite expression for undemocratic. Indeed it is obvious that in Canada, the constitu-
tional instruments of judicial review in the Bill of Rights and the Charter, have been composed and emplaced by popularly elected legislators. It was the Supreme Court in its majority judgment in Re B.C. Motor Vehicle Act, written by Lamer J. which, some would say "ironically" repudiated the anti-majoritarian theory of judicial review. The minority concurred in the result. The citation is [1985] 2 S.C.R. 486 and, at page 497, there is reported this cogent passage:
This is an argument which was heard countless times prior to the entrenchment of the Charter but which has in truth, for better or for worse, been settled by the very coming into force of the Constitution Act, 1982. It ought not to be forgotten that the historic decision to entrench the Charter in our Constitution was taken not by the courts but by the elected representatives of the people of Canada. It was those elected representatives who extended the scope of constitutional adjudication and entrusted the courts with this new and onerous responsibility. Adjudication under the Charter must be approached free of any lingering doubts as to its legitimacy.
The same may be said of the general genesis of the Canadian Bill of Rights and adjudication under it. The legislature however is capable of undertaking much more appropriate and comprehensive reform of the law in consonance with the Bill of Rights and the Charter, because the Court's role is con fined to the piecemeal scope of each particular case which happens to be presented from time to time.
In conclusion then, Order in Council P.C. 1988- 762 will be declared to be null and void and of no force and effect for infringement of the plaintiffs' rights pursuant to paragraph 2(e) of the Canadian Bill of Rights, without prejudice to any action on the part of the Governor in Council to re-articulate its powers pursuant to subsection 64(1) of the NTPP Act on the same subject but in a lawful manner, as prescribed herein.
Counsel for the respective parties and the inter- veners were all in agreement about not awarding any costs of, or incidental to, these proceedings. The Court concurs.
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