A-798-88
Attorney General of Canada (Appellant)
v.
National Anti-Poverty Organization and Arthur
Milner (Respondents)
and
Bell Canada International Inc. and BCE Inc.
(Interveners)
INDEXED AS: NATIONAL ANTI-POVERTY ORGANIZATION V.
CANADA (ATTORNEY GENERAL) (CA.)
Court of Appeal, Pratte, Mahoney and Stone
JJ.A.—Ottawa, April 4, 5, 6 and May 15, 1989.
Telecommunications — Order in Council varying part of
CRTC decision on Bell Canada rate proposal dealing with
compensation for Bell employees temporarily transferred to
BCI — Whether some transfer costs borne by Bell's subscrib
ers and whether constituting cross-subsidy between Bell and
BCI — Governor in Council's decision matter of public conve
nience and general policy not reviewable by Court.
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 BCI — Order in Council
matter of public convenience or general policy not subject to
judicial review — Governor in Council not exceeding jurisdic
tion as no clear evidence acting beyond objects of statute for
sole purpose of assisting BCI — Doctrine of reasonable expec
tation (of being heard) not applicable as no "express promise"
nor "regular practice".
Bill of Rights — Right to fair hearing — Bill of Rights s.
2(e) not applicable as no "rights and obligations" of respon
dent determined by Order in Council.
Constitutional law — Charter of Rights — Equality rights
— Respondent not "individual" benefiting from s. 15 protec
tion — Alleged discrimination (not being given opportunity to
respond) not covered by s. 15.
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 affili
ate 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 the National Anti-Poverty Organization's request
for an adequate opportunity to formulate a reply, the Governor
in Council, acting under the authority of 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 acceding to BCE and
BCI's request.
The Trial Division allowed an action for a declaration that
the Order in Council was null and void. The Trial Judge
declared that the Governor in Council had deprived the
respondents of a fair hearing in accordance with the principles
of fundamental justice for determination of their rights arising
out of the CRTC decision and its earlier decision 86-17. This
denial of a hearing was found to be contrary to paragraph 2(e)
of the Bill of Rights. This is an appeal from that judgment.
Held, the appeal should be allowed.
This case could not be distinguished from Inuit Tapirisat
and the Trial Judge erred in doing so. Contrary to what was
found in the Trial Division, this was a matter of public conve
nience and general policy. The decision of the Governor in
Council was therefore final and not reviewable except possibly
on jurisdictional or other compelling grounds.
Paragraph 2(e) of the Bill of Rights could not apply in this
case because no rights or obligations unique to the respondents
were determined by the Governor in Council's decision. It was
neither for the Trial Judge nor for this Court to assume that
the Supreme Court had overlooked paragraph 2(e) when it
decided Inuit Tapirisat.
Nor was subsection 15(1) of the Charter applicable. The
respondent, NAPO, was not an individual within the meaning
of that provision. And, based on the recent Supreme Court
decision in Andrews v. Law Society of British Columbia, the
discrimination that is suggested in this case is not of the
character covered by section 15. The fact that the interveners
could file their petition and supporting material with the Gov
ernor in Council whereas the respondents may not have been
afforded an opportunity to respond before the Order in Council
was made, did not infringe a right that is guaranteed by that
section.
The Governor in Council did not exceed the jurisdiction
granted by subsection 64(1) by acting out of concern for the
international competitive position of BCI, a consideration not
mentioned in the statute. There were other public interest
reasons for the decision. BCI's position on the world scene was
not the sole or even the dominant consideration.
In the absence of any evidence of either an "express promise"
or a "regular practice", the doctrine of reasonable or legitimate
expectation can have no application.
STATUTES AND REGULATIONS JUDICIALLY
CONSI DERED
Canadian Bill of Rights, R.S.C. 1970, Appendix III, s.
2(e).
Canadian Charter of Rights and Freedoms, being Part I
of the Constitution Act, 1982, Schedule B, Canada Act
1982, 1982, c. 11 (U.K.), s. 15.
Canadian Radio-television and Telecommunications
Commission Act, S.C. 1974-75-76, c. 49, s. 14(2).
National Telecommunications Powers and Procedures
Act, R.S.C. 1970, c. N-17 (as am. by S.C. 1987, c. 34,
s. 302), s. 64(1).
National Transportation Act, R.S.C. 1970, c. N-17, s.
64(1).
Railway Act, R.S.C. 1970, c. R-2, ss. 321(1),(2) (as am.
by R.S.C. 1970 (1st Supp.), c. 35, s. 3).
CASES JUDICIALLY CONSIDERED
APPLIED:
Thorne's Hardware Ltd. et al. v. The Queen et al.,
[1983] 1 S.C.R. 106; Attorney General of Canada v.
Inuit Tapirisat of Canada et al., [1980] 2 S.C.R. 735,
rev'g [1979] 1 F.C. 710 (C.A.); Andrews v. Law Society
of British Columbia, [1989] I S.C.R. 143; (1989), 91
N.R. 255; Associated Provincial Picture Houses, Ld. v.
Wednesbury Corporation, [1948] 1 K.B. 223 (C.A.); Rex
v. Chiswick Police Station Superintendent, Ex parte
Sacksteder, [1918] I K.B. 578 (C.A.); Regina v. Gover
nor of Brixton Prison, Ex parte Soblen, [1963] 2 Q.B.
243 (C.A.); Council of Civil Service Unions v. Minister
for the Civil Service, [1985] A.C. 374 (H.L.).
REVERSED:
National Anti-Poverty Organization v. Canada (Attor-
ney General), [1989] I F.C. 208; (1989), 21 F.T.R. 33
(T.D.).
DISTINGUISHED:
R. v. Big M Drug Mart Ltd. et al., [1985] 1 S.C.R. 295;
Roncarelli v. Duplessis, [1959] S.C.R. 121; Re Doctors
Hospital and Minister of Health et al. (1976), 68 D.L.R.
(3d) 220 (Ont. Div. Ct.); Re Toohey: Ex parte Northern
Land Council (1981), 38 ALR 439 (H.C.).
REFERRED TO:
Homex Realty and Development Co. Ltd. v. Corporation
of the Village of Wyoming, [1980] 2 S.C.R. 1011; FAI
Insurances Ltd v Winneke (1982), 41 ALR 1 (H.C.);
South Australia (State of) v O'Shea (1986), 73 ALR 1
(H.C.); Minister of Indian Affairs and Northern De
velopment v. Ranville et al., [1982] 2 S.C.R. 518; Smith,
Kline & French Laboratories Ltd. v. Canada (Attorney
General), [1987] 2 F.C. 359 (C.A.); Re Workers' Com
pensation Act, 1983 (Nfld.), [1989] I S.C.R. 922; Earl
Fitzwilliam's Wentworth Estates Co. Ld. v. Minister of
Town and Country Planning, [1951] 2 K.B. 284 (C.A.);
Hanks v. Minister of Housing and Local Government,
[1963] 1 Q.B. 999.
COUNSEL:
Duff F. Friesen, Q.C. for appellant.
Andrew J. Roman and Robert E. Horwood
for respondent.
François Lemieux and David Wilson for
interveners.
SOLICITORS:
Deputy Attorney General of Canada for
appellant.
Public Interest Advocacy Centre, Ottawa, for
respondent.
Osler, Hoskin & Harcourt, Ottawa, for
interveners.
The following are the reasons for judgment
rendered in English by
STONE J.A.: The issue in this appeal concerns
the validity of Order in Council P.C. 1988-762
[Order Varying Telecom Decision CRTC 88-4,
SOR/88-250] adopted by the Governor in Council
on April 22, 1988 in purported exercise of powers
conferred by subsection 64(1) of the National
Telecommunications Powers and Procedures Act
[R.S.C. 1970, c. N-17 (as am. by S.C. 1987, c. 34,
s. 302)], ("the Act"), whereby decision 88-4 of the
Canadian Radio-television Telecommunications
Commission ("CRTC") dated March 17, 1988
was varied. By a judgment rendered June 27,
1988,' the Trial Division declared that the Gover
nor in Council had deprived the respondents of a
fair hearing in accordance with the principles of
fundamental justice for determination of their
rights arising out of the CRTC decision and its
earlier decision 86-17. In the Trial Judge's view
this denial of a hearing was contrary to paragraph
2(e) of the Canadian Bill of Rights [R.S.C. 1970,
' Reported as National Anti-Poverty Organization v.
Canada (Attorney General), [1989] 1 F.C. 208; (1989), 21
F.T.R. 33 (T.D.).
Appendix III], and accordingly he declared the
Order in Council "null and void and of no force
and effect".
Bell Canada and Bell Canada International Inc.
("BCI") are wholly owned subsidiaries of BCE
Inc. ("BCE"). The CRTC has regulatory author
ity over Bell Canada but not over either BCE or
BCI. This authority includes the power to regulate
the telephone rates Bell Canada charges its
customers. 2 BCI is a party to a consulting contract
with the Kingdom of Saudi Arabia and has in turn
entered into an arrangement with Bell Canada by
which employees of that company are temporarily
transferred or loaned to BCI so as to enable it to
carry out those consulting obligations. The issue of
the appropriate compensation to be paid to Bell
Canada for these transferred employees came
before the CRTC for determination in 1986 and
resulted in decision 86-17. By that decision the
CRTC determined that the appropriate compensa
tion should be a 25% contribution calculated on an
imputed cost comprising the aggregate of the
annual salary and the labour related costs of each
employee immediately prior to transfer, and that
these costs should be adjusted, where applicable,
for any normal salary increases during the period
of transfer, but should not include any salary
adjustments attributable solely to an overseas
posting.
In October, 1987 the CRTC initiated proceed
ings to establish Bell Canada's revenue require
ments for 1988. A public hearing was held. Bell
Canada asked that the compensation issue be re
opened and that decision 86-17 be changed. The
respondents, as interveners, supported the con
tinued operation of that decision. Neither BCE nor
BCI participated in the hearing. In the material
2 The CRTC's authority is derived from subsection 14(2) of
the Canadian Radio-television and Telecommunications Com
mission Act, S.C. 1974-75-76, c. 49, as amended:
14....
(2) The Executive Committee and Chairman shall exer
cise the powers and perform the duties and functions in
relation to telecommunication, other than broadcasting,
vested by the Railway Act, the National Telecommunica
tions Powers and Procedures Act or any other Act of Parlia
ment in the Commission and the President thereof,
respectively.
presented by Bell Canada to the CRTC was a
letter of July 14, 1987 from the Minister of Com
munications to the Chairman of BCE with refer
ence to a meeting that had been held between
them on December 23, 1986. The Minister
observed that the forthcoming CRTC hearing
would provide "the opportunity to reach a final
solution to this problem" and that it would also
meet BCE's particular concern "that the issue of
appropriate compensation for use of Bell Canada
employees by BCI be clarified for 1988 and subse
quent years, so as to allow BCI to effectively plan
and transact its future business endeavours". The
Minister then went on to state:
1 have carefully reviewed the evidence that was filed during the
hearing on Decision 86-17 and it appears to me that the 25
percent mark-up ordered by the CRTC may indeed be inappro
priate. However, the Commission may have chosen this number
because of the absence of audited costing information relating
to the transfer of Bell employees to BCI. Accordingly, it would
seem appropriate, at the October 1987 hearing, for Bell
Canada to file additional substantive evidence, such as an
audited report verifying that the costs associated with the
temporary transfer of employees to BCI are recovered by Bell
Canada. I would expect an independent analysis of this type to
be an important factor in resolving this issue.
I would like to assure you that, as a matter of policy, the
Government of Canada strongly supports the activities of firms
such as Bell Canada International in seeking overseas contracts
and appreciates the contributions that such endeavours make
towards job creation, maintaining a positive trade balance, and
promoting Canadian technology and expertise abroad. In the
government's view, and as provided for in Bill C-13, the
shareholders of Bell Canada Enterprises should accept the risks
and obtain the rewards of these activities. At the same time, the
government supports the role of the CRTC in ensuring that
Bell Canada subscribers are not called upon to subsidize direct
ly or indirectly, or be subsidized by, the unregulated and
competitive activities of affiliated companies.
In accordance with this policy, and provided that Bell Canada
submits, as evidence, an audited verification that the costs
associated with the temporary transfer of its employees to BCI
are recovered fully by Bell Canada, I would be prepared to
review any future decision of the CRTC, which failed to reflect
these principles. So, for example, were the Commission to
establish or impute a level of compensation from BCI to Bell
Canada that exceeded the audited cost directly and indirectly
associated with these transfers, I would be prepared to recom
mend to the Governor in Council appropriate action to ensure
that BCI can continue to compete effectively in international
markets and thus maintain its valued contribution to Canada's
export earnings and overall economic prosperity.
The parties appear to have been in agreement
before the CRTC that the appropriate compensa
tion to be determined should not result in any
cross-subsidization by Bell Canada subscribers of
BCI's international business activities. The CRTC,
in "Conclusions" appearing at pages 58-59 of its
decision, rejected Bell Canada's position, allowing
instead for the continued operation of decision
86-17. It said:
3) Conclusions
The Commission has not been persuaded that the approach to
compensation for temporarily transferred employees prescribed
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 impression 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 Com
mission finds persuasive CAC's argument that Bell, by virtue of
these guarantees, absorbs a large part of the risk that BC!
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 additional 25%
contribution in connection with intercorporate transactions. In
this regard, the Commission notes that when Bell employees
are merely loaned to BCI, rather than being temporarily trans
ferred, 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 circum
stances, 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 BCI may be experiencing in the international mar
ketplace do not provide sufficient justification for a departure
from the Commission's policy that Bell subscribers should not
be obliged to subsidize the competitive endeavours of Bell
affiliates.
The Commission notes that Bell employees are now temporarily
transferred to affiliates other than BCI, and that employees of
Tele-Direct are also temporarily transferred to affiliates. The
Commission has therefore determined that, for regulatory pur
poses, the compensation for any employee temporarily trans
ferred from either Bell or Tele-Direct to any affiliated company
shall be as prescribed in Decision 86-17. 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.
On March 25, 1988 BCE and BCI filed a
petition with the Governor in Council pursuant to
subsection 64(1) of the Act. The respondent, The
National Anti-Poverty Organization ("NAPO")
received no notice of this petition and learned of its
existence from an official of the Department of
Communications. A letter written by NAPO to the
Clerk of the Privy Council dated April 19, 1988
requesting a copy of the petition and supporting
material and an opportunity to reply to it before it
was disposed of, went unanswered. This was fol
lowed three days later on April 22, 1988 by adop
tion of the Order in Council P.C. 1988-762. It
deleted the five above quoted paragraphs of the
CRTC decision and substituted the following:
The costs associated with the temporary transfer of employees
consist solely of the accounting costs, being the costs of select
ing 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 guarantees. Therefore, for regulatory purposes,
the compensation for any employee temporarily transferred
from either Bell Canada or Tele-Direct to any affiliated com
pany 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 temporarily
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 identi
fied 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 information and docu
mentation that would be useful to the Commission in making
its determination.
A government press release was put out on the
same date. It deserves to be recited in its entirety.
Ottawa—The Governor in Council has varied CRTC Decision
88-4 to ensure that Bell Canada International (BC!) is not
unfairly placed at a disadvantage in the highly competitive
international telecommunications market because of an arbi
trary financial calculation. The variance includes measures to
protect the interest of Bell Canada subscribers and prevent any
cross-subsidy between Bell Canada 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, is a subsidiary of Bell
Canada Enterprises, is not regulated by the CRTC. It is a
wholly-owned Canadian company that has provided telecom
munications consulting services to governments and telecom
munications companies in some 70 countries over the past 20
years. The hundreds of Canadian 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 con
tracts also have led to significant sales of Canadian-made
products ranging from wire and sophisticated switching equip
ment to automobiles.
During CRTC hearings in 1986 and 1987 regarding the
revenue requirements of Bell Canada, questions were raised as
to whether Bell Canada cross-subsidizes its arm's-length affili
ate* when employees are transferred to BCI to work on
international assignments that typically last two years or more.
Under this arrangement, BCI pays all costs of salary and other
benefits of the transferred employees during the period of the
transfer. It also pays a fee to Bell Canada that covers its costs
related to the transfers. Some intervenors at the revenue hear
ing felt Bell Canada should also be compensated by BCI for
additional costs, including: expertise, goodwill, savings in
employment agency fees, job guarantees to Bell employees, and
the flexibility provided to BCI in being able to return
employees to Bell and bring them back as required. On the
other hand, Bell Canada argued that all direct costs of the
arrangement are paid and that the indirect costs are adequately
covered by the administrative fees paid to Bell Canada by BCI;
consequently there is no cross-subsidy.
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 contribution would
be a 25 per cent surcharge on the annual salary and labour-
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 trans
fer 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 International requesting
that the level be lowered.
In response to this petition, the Government has reviewed the
evidence presented before the CRTC. The fundamental princi
ple underlying this review has been the Government's commit
* This may be an error in the text, as BCI's relationship with
Bell Canada was non-arm's length.
ment 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 recognition 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 arbi
trary and appear to be excessive and potentially damaging 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 telecommunications
companies and their unregulated affiliates. The Government
also notes that the 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.
The Government agrees with the CRTC that the payment
formula should clearly compensate Bell Canada for all direct
costs associated with the transfer of employees. To this end, it
has ordered that Bell Canada and Tele-Direct should be com
pensated at the following levels for each employee transferred
for more than 30 days:
a) a one-time fee of $1,840;
b) for each employee who returns to Bell, a one-time fee of
$455;
c) for each extension of a leave of absence, a one-time fee of
$90; and
d) an annual fee of $1000 to offset any additional adminis
trative costs.
In addition, the Government is of the view that the one
indirect cost suggested by the intervenors that requires specific
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 re-imbursed 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 relief sought by the respondents in the Trial
Division was for a writ of certiorari quashing the
Order in Council on four specified grounds:
I. the respondent acted without jurisdiction because its deci
sion was made for a purpose not authorized by the relevant
legislation;
2. the respondent acted without jurisdiction because its deci
sion was based on irrelevant considerations;
3. the respondent acted without jurisdiction because it failed to
accord procedural fairness to the applicants; specifically, the
respondent decided the matter in secret when it knew that
there were interested parties such as the applicants who had
not been given notice of the petition, a copy of the petition
and supporting material, and an adequate opportunity to
respond before the decision was made;
4. the respondent's failure to accord the applicants an opportu
nity equal to that of Bell Canada Enterprises Inc. and Bell
Canada International Inc. to participate in the decision-
making process constitutes a denial of their right to the
equal protection and equal benefit of the law, contrary to
subsection 15(1) of the Canadian Charter of Rights and
Freedoms;
However, at the hearing an order was made on
consent changing the application to an action for a
declaration that the Order in Council was null and
void. The learned Trial Judge dealt only with the
last two grounds of attack. After concluding that
no right guaranteed by subsection 15(1) of the
Charter [Canadian Charter of Rights and Free
doms, being Part I of the Constitution Act, 1982,
Schedule B, Canada Act 1982, 1982, c. 11 (U.K.)]
had been infringed, he found that the Order in
Council was null and void and of no force and
effect for infringement of the respondents' rights
under paragraph 2(e) of the Canadian Bill of
Rights. He was of the opinion that the decision of
the Governor in Council was not a matter "of
public convenience and general policy" (Thorne's
Hardware Ltd. et al. v. The Queen et al., [1983] 1
S.C.R. 106, per Dickson J. (as he then was), at
page 111), but that it "operates in a matter of
private convenience for and on behalf of two
unregulated corporations BCE and BCI". To the
argument that the case was governed by Attorney
General of Canada v. Inuit Tapirisat of Canada et
al., [1980] 2 S.C.R. 735, the Trial Judge gave the
following answer, at pages 23-24:
This power to make decisions in matters of private convenience
and discrete policy is a special power to govern the deliberative
and administrative 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 may be regarded as having been overtaken
somewhat by intervening and momentous events. Two such
events are the 1982 amendments of the Constitution and the
revivification of the Bill of Rights by the Supreme Court of
Canada in Harbhajan Singh & al. v. Minister of Employment
and Immigration, [1985] 1 S.C.R. 177 at pages 226 to 231.
He went on to say at page 26 that while Inuit
Tapirisat "declared the law as • it had stood .. .
such an analysis is no longer valid".
It was argued before us that the learned Judge
erred in the following ways, namely,
(a) by not applying Inuit Tapirisat which was
binding on the Trial Division;
(b) by treating the Governor in Council's decision
as one of "private convenience" and "discrete
policy" and thereby misapplying the Supreme
Court's decisions in Inuit Tapirisat and
Thorne's Hardware;
(c) by imposing limits on the exercise of the power
vested by Parliament in the Governor in Coun
cil under subsection 64(1) of the Act when no
such limits were imposed by Parliament itself;
(d) by misconstruing paragraph 2(e) of the
Canadian Bill of Rights.
While supporting the judgment, the respondents
contend that the Trial Judge erred in finding that
subsection 15(1) of the Canadian Charter of
Rights and Freedoms was inapplicable, and in
failing to address their submission that the Gover
nor in Council exceeded his jurisdiction. Finally,
they say that they had a "reasonable expectation"
to be heard before the petition was disposed of by
the Governor in Council, an expectation that was
not respected in this case. These questions were
argued at length before this Court. I turn now to
deal with each of them.
Is the case governed by Inuit Tapirisat?
In Inuit Tapirisat, NAPO and Inuit Tapirisat of
Canada intervened in a proceeding initiated by the
CRTC to deal with a proposed increase in tele
phone rates to be charged by Bell Canada to
subscribers in Ontario and Quebec. Being dissatis
fied with the outcome, the interveners then sought
to have the CRTC decision varied or rescinded by
way of a petition addressed to the Governor in
Council pursuant subsection 64(1) of the National
Transportation Act, R.S.C. 1970, c. N-17, as
amended. Subsection 64(1) read:
64. (1) The Governor in Council may at any time, in his
discretion, either upon petition of any party, person or company
interested, or of his own motion, and without any petition or
application, vary or rescind any order, decision, rule or regula
tion of the Commission, whether such order or decision is made
inter partes or otherwise, and whether such regulation is gener
al 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.
The subsection is identical in wording to subsec
tion 64(1) of the Act. The dispute before the
Courts centered on a refusal by the Governor in
Council to accord the petitioners an opportunity to
respond to a cross-petition filed by Bell Canada.
The attack asserted in the statement of claim was
that the Governor in Council had failed to observe
natural justice or, at least, fairness in dealing with
the petitioners. The case reached the Supreme
Court after this Court' reversed a judgment of the
Trial Division [[1979] 1 F.C. 213] striking out the
statement of claim on the ground that it disclosed
no reasonable cause of action.
What was crucial to the decision in Inuit
Tapirisat was the nature of the action or function
performable by the Governor in Council under
subsection 64(1) of the National Transportation
Act. Was it administrative or legislative? If the
latter, then no need would arise for the Governor
in Council to hold any kind of hearing, to give
reasons for decision or even to acknowledge the
petition. The Supreme Court viewed the function
as legislative. At pages 752-754, Estey J. reasoned:
I turn now to a consideration of s. 64(1) in light of those
principles. Clearly the Governor in Council is not limited to
varying orders made inter partes where a lis existed and was
determined by the Commission. 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 deter
mines whether the proposed tariff of tolls is just and reasonable
3 [l979] 1 F.C. 710.
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
Parliament 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 services 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 func
tion. Neither were procedural standards imposed or even
implied. That is not to say that the courts will not respond
today as in the Wilson case supra, if the conditions precedent to
the exercise of power so granted to the executive branch have
not been observed. Such a response might also occur if, on a
petition being received by the Council, no examination of its
contents by the Governor in Council were undertaken. That is
quite a different matter (and one with which we are not here
faced) from the assertion of some principle of law that requires
the Governor in Council, before discharging its duty under the
section, to read either individually or en masse the petition
itself and all supporting material, the evidence taken before the
CRTC and all the submissions and arguments advanced by the
petitioner and responding parties. The very nature of the body
must be taken into account in assessing the technique of review
which has been adopted by the Governor in Council. 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, commer
cial 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. (I).
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. The practicality of giving notice to "all
parties", as the respondent has put it, must have some bearing
on the interpretation to be placed upon s. 64(1) in these
circumstances. In these proceedings the respondent challenged
the rates established by the CRTC and confirmed in effect by
the Governor in Council. There are many subscribers to the
Bell Canada services all of whom are and will be no doubt
affected to some degree by the tariff of tolls and charges
authorized by the Commission and reviewed by the Governor in
Council. All subscribers should arguably receive notice before
the Governor in Council proceeds with its review. The conclud
ing words of subs. (1) might be said to support this view where
it is provided that:
... any order that the Governor in Council may make with
respect thereto is binding upon the Commission and upon all
parties.
I read these words as saying no more than this: if the nature of
the matter before the Governor in Council under s. 64 concerns
parties who have been involved in proceedings before the
administrative tribunal whose decision is before the Governor
in Council by virtue of a petition, all such persons, as well as
the tribunal or agency itself, will be bound to give effect to the
order in council issued by the Governor in Council upon a
review of the petition. Different terminology to the same effect
is found in predecessor statutes and I see no basis for reading
into this statute any different parliamentary intent from that
which I have ascribed to these words as they are found now in
s. 64(1).
I do not regard as a sound basis for distinguish
ing that case the circumstance that the Governor
in Council afforded no opportunity to answer a
cross-petition before he reached his decision,
whereas in this case an opportunity to respond to a
petition was not afforded. In each, the Governor in
Council was engaged in determining a matter per
taining to Bell Canada rates within the broad
discretionary power conferred by Parliament
under subsection 64(1) of either statute. Unless
Inuit Tapirisat can be distinguished on some other
ground, it would have to be applied and the appeal
allowed.
Is the decision of the Governor in Council one of
"private convenience" and "discrete policy"?
The learned Trial Judge considered the present
case distinguishable because in Inuit Tapirisat the
Governor in Council was concerned with a matter
of public convenience and general policy whereas,
here, as he put it at page 227, the matter was one
of "private convenience for and on behalf of two
unregulated corporations BCE and BCI". He
acknowledged that if the matter were one of public
convenience and general policy, the opinion of
Dickson J. in Thorne's Hardware, supra, at page
111 would apply:
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 indicated, 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.
The Trial Judge went on to say at page 19 of his
reasons, that because of this difference "the power
vested in the Governor in Council, and the particu
lar exercise of that power, are not beyond judicial
review". Accordingly, we must therefore consider
whether, as the appellant and interveners contend,
the matter before the Governor in Council (as in
Inuit Tapirisat) was one of public convenience and
general policy.
There can be no question that both BCE and
BCI were entitled to present a subsection 64(1)
petition notwithstanding that they had not par
ticipated in the CRTC proceedings. Also, while
the Governor in Council was required to act within
a given statutory mandate, it should be noted that
the appropriateness of the compensation to be paid
for Bell Canada employees temporarily transferred
to BCI had a direct bearing on Bell Canada's
revenue requirements for 1988 and, accordingly,
an indirect bearing on rates chargeable to Bell
Canada's subscribers. Such rates had to be both
"just and reasonable" and non-discriminatory. 4
The fact that some advantage might flow from
that decision in favour of BCI could not, in my
view, alter its true nature so as to render it a
matter of private convenience falling outside the
Subsections 321(1) and (2) [as am. by R.S.C. 1970 (1st
Supp.), c. 35, s. 3] of the Railway Act, R.S.C. 1970, c. R-2
read:
321. (1) All tolls shall be just and reasonable and shall
always, under substantially similar circumstances and condi
tions with respect to all traffic of the same description
carried over the same route, be charged equally to all persons
at the same rate.
(2) A company shall not in respect of tolls or any services
or facilities provided by the company as a telegraph or
telephone company,
(a) make any unjust discrimination against any person or
company;
(b) make or give any undue or unreasonable preference or
advantage to or in favour of any particular person or
company or any particular description of traffic, in any
respect whatever; or
(c) subject any particular person or company or any par
ticular description of traffic to any undue or unreasonable
prejudice or disadvantage, in any respect whatever;
and where it is shown that the company makes any discrimi
nation or gives any preference or advantage, the burden of
proving that the discrimination is not unjust or that the
preference is not undue or unreasonable lies upon the
company.
Governor in Council's subsection 64(1) mandate of
varying or rescinding the CRTC's earlier determi
nation. If I am right in this, then Inuit Tapirisat
must be applied for, as Dickson J. re-emphasized
in Thorne's Hardware, in a matter of public con
venience and general policy a decision of the Gov
ernor in Council is "final and not reviewable in
legal proceedings" except possibly on jurisdictional
or other compelling grounds in an egregious case.
What limits bound the Governor in Council in
carrying out his subsection 64(1) mandate?
The appellant raises this broad question in
attacking the conclusion below that it was incum
bent upon the Governor in Council before dispos
ing of the subsection 64(1) petition to afford the
respondents an opportunity of answering it. I shall
deal presently with the precise legal basis upon
which the judgment is founded—paragraph 2(e) of
the Canadian Bill of Rights. At this juncture I
need only consider whether the acceptance of
NAPO's position by the CRTC on the matter of
compensation obliged the Governor in Council to
afford them the opportunity that was sought. In
my opinion, it would be wrong to view this case as
in any way involving a determination by the Gov
ernor in Council of a right or obligation peculiar to
NAPO or, as Estey J. put it at page 758, that it
involves "a matter of individual concern or a right
unique" to that organization. 5 That being so, in
my view, the only limits that bound the Governor
in Council in exercising his discretion are those
laid down in Inuit Tapirisat.
Does paragraph 2(e) of the Canadian Bill of
Rights apply?
The Trial Judge was of opinion that Inuit
Tapirisat may be regarded as having been overtak
en somewhat by the recent amendments to the
5 In Homex Realty and Development Co. Ltd. v. Corporation
of the Village of Wyoming, [1980] 2 S.C.R. 1011, and FAI
Insurances Ltd v Winneke (1982), 41 ALR 1 (H.C.) such a
right or concern was at issue. And see South Australia (State
of) v O'Shea (1986), 73 ALR 1 (H.C.) at p. 6.
Constitution and by revivification of the Canadian
Bill of Rights in Singh. He proceeded to construe
subsection 64(1) of the Act as obliging the Gover
nor in Council to accord the respondents a fair
hearing in accordance with the principles of funda
mental justice for the determination of their rights
and obligations before disposing of the petition.
Paragraph 2(e) of the Canadian Bill of Rights
provides:
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 accord
ance with the principles of fundamental justice for the deter
mination of his rights and obligations;
I have already recited some of the reasons which
compelled the Trial Judge to the conclusion that
the matter was governed by this paragraph. He
elaborated his views at pages 239-240 of his rea
sons for judgment:
It [the Governor in Council] 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 obligations". After all in subsection 64(1) in
rélating to the Governor in Council, the expression "in his
discretion" is employed.) NAPO, representing Bell's subscri-
bers—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 partem—
hear the other party, before making a determination of the
other party's rights and obligations. 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 com-
pensation which the CRTC adjudged to be its due for the sake
of not raising the rates it charges to subscribers, and the
subscribers, represented by NAPO, have indeed had their
rights and obligations determined, 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 obligations contemplated by
paragraph 2(e) of the Canadian Bill of Rights.
The question for us, as it was for him, is the
applicability of paragraph 2(e) in the circum
stances of this case. The fine point, in my view, is
whether the Governor in Council in exercising his
discretion under subsection 64(1) of the Act,
thereby determined any "rights and obligations"
of the respondents.
The appellant and the interveners advance two
contrary arguments. They say that paragraph 2(e)
can have no application to what Inuit Tapirisat
has classified as the "legislative" act represented
by an order in council made pursuant to subsection
64(1) of the Act. They say too that in performing
an act of this nature, being directed to the public
at large or, at any rate, to the sizeable segment of
the public that Bell Canada subscribers represent,
no "rights and obligations" of the respondents
were put at stake; it was not intended to be subject
to the procedural safeguards that might otherwise
be available in a matter involving individual con
cern or unique right.
The intervention of NAPO in the CRTC pro
ceedings was on behalf of members of the general
public. They were entitled to participate in that
capacity, and (as they were able to do) to persuade
the CRTC to their particular point of view. In the
end, however, no "rights" or "obligations" unique
to them were determined by that decision; such
rights, if any, flowed to all of Bell Canada's sub
scribers regardless whether they participated or
not. Nothing in subsection 64(1) of the Act
restricted the Governor in Council in varying
CRTC decision 88-4, provided the variation did
not result in unjust and unreasonable rates or rates
that were discriminatory, as would have been the
case had the principle against cross-subsidization
been offended by the Order in Council. Such was
the nature of the process involved both before the
CRTC and the Governor in Council. With respect,
it was not for the learned Trial Judge nor is it for
this Court to assume that the Supreme Court
overlooked paragraph 2(e) when it decided Inuit
Tapirisat. That Court is free to depart from a
prior decision of its own if it finds a compelling
reason for so doing (see Minister of Indian Affairs
and Northern Development v. Ranville et al.,
[1982] 2 S.C.R. 518, at page 527). We must leave
to that Court what may constitute a compelling
reason. Parliament, of course, is itself free to adopt
any procedural safeguards it may choose to apply
to subsection 64(1) decision-making. In the mean
time, I must agree with the appellant and the
interveners that paragraph 2(e) of the Canadian
Bill of Rights can have no application in this
matter.
Is subsection 15(1) of the Charter applicable?
At the trial the respondents unsuccessfully
asserted that by proceeding as he did, the Gover
nor in Council infringed a right enshrined in sub
section 15(1) of the Charter by treating them
differently from the appellant whose petition and
material in support were received and considered
by the Governor in Council before the petition was
disposed of.
I am in respectful agreement with the learned
Trial Judge that subsection 15(1) of the Charter is
inapplicable in the circumstances. It reads:
15. (1) Every individual is equal before and under the law
and has the right to the equal protection and equal benefit of
the law without discrimination and, in particular, without
discrimination based on race, national or ethnic origin, colour,
religion, sex, age or mental or physical disability.
In my view, the fact (as is argued) that NAPO is a
non-profit corporation does not render it an
"individual" for purposes of subsection 15(1). Nor
do I think that NAPO is assisted by the fact that
the Supreme Court in R. v. Big M Drug Mart Ltd.
et al., [1985] 1 S.C.R. 295 (per Dickson J., at
page 313) construed the word "anyone" in subsec
tion 24(1) of the Charter as including "individuals
(whether real persons or artificial ones such as
corporations)", when the word employed in sub-
section 15 (1) is "individual" 6 rather than "any-
one". Finally, I am inclined to the view that
Milner's subsection 15(1) rights (if indeed there
are any) were not infringed. He neither personally
intervened before the CRTC nor sought an oppor
tunity to respond to Bell Canada's petition before
it was disposed of. This leaves his status to now
assert infringement of a subsection 15(1) right at
least doubtful. In light of the view I am about to
express, it is unnecessary to deal further with the
point.
The "right" here asserted is not one that, in my
view, is guaranteed by subsection 15(1). At the
date of the decision below, the Supreme Court of
Canada had yet to pass upon the nature of the
equality rights enshrined in subsection 15(1). It
has since done so: Andrews v. Law Society of
British Columbia, [1989] 1 S.C.R. 143; (1989), 91
N.R. 255.'
The views of McIntyre J. as to the nature of
subsection 15(1) rights, though contained in a
dissenting judgment, were generally accepted by
the other members of the Court. At pages 178
S.C.R.; 298-299 N.R. he noted:
The right to equality before and under the law, and the rights
to the equal protection and benefit of the law contained in s. 15,
are granted with the direction contained in s. 15 itself that they
be without discrimination. Discrimination is unacceptable in a
democratic society because it epitomizes the worst effects of the
denial of equality, and discrimination reinforced by law is
particularly repugnant. The worst oppression will result from
discriminatory measures having the force of law. It is against
this evil that s. 15 provides a guarantee.
And in answering the question posed at pages 173
S.C.R.; 300 N.R.: "What does discrimination
mean?", that learned Judge gave this answer at
pages 174-175 S.C.R.; 302 N.R.:
1 would say then that discrimination may be described as a
distinction, whether intentional or not but based on grounds
relating to personal characteristics of the individual or group,
which has the effect of imposing burdens, obligations, or disad
vantages on such individual or group not imposed upon others,
or which withholds or limits access to opportunities, benefits,
6 See Smith, Kline & French Laboratories Ltd. v. Canada
(Attorney General), [1987] 2 F.C. 359 (C.A.).
'Andrews has since been applied in Reference Re Workers'
Compensation Act, 1983 (Nfld.), [1989] 1 S.C.R. 922.
and advantages available to other members of society. Distinc
tions based on personal characteristics attributed to an
individual solely on the basis of association with a group will
rarely escape the charge of discrimination, while those based on
an individual's merits and capacities will rarely be so classed.
Based on that decision, the "discrimination"
that is suggested in the present case is not of the
character that subsection 15 (1) of the Charter is
aimed at preventing. The fact that the interveners
could file their petition and supporting material
with the Governor in Council whereas the respon
dents may not have been afforded an opportunity
to respond before the Order in Council was made,
did not infringe a right that is guaranteed by that
section.
Did the Governor in Council exceed his jurisdic
tion?
The argument advanced by the respondents is
that the Governor in Council exceeded his jurisdic
tion under subsection 64(1) of the Act by acting
out of concern for the international competitive
position of BCI. Statements of the Minister in her
letter of July 14, 1987 to the Chairman of BCE as
well as others contained in the government press
release of April 22, 1988, are relied upon in this
connection. In that letter the Minister wrote:
I would like to assure you that, as a matter of policy, the
Government of Canada strongly supports the activities of firms
such as Bell Canada International in seeking overseas contracts
and appreciates the contributions that such endeavours make
towards job creation, maintaining a positive trade balance, and
promoting Canadian technology and expertise abroad ... So,
for example, were the Commission to establish or impute a level
of compensation from BCI to Bell Canada that exceeded the
audited cost directly and indirectly associated with these trans
fers, I would be prepared to recommend to the Governor in
Council appropriate action to ensure that BCI can continue to
compete effectively in international markets and thus maintain
its valued contribution to Canada's export earnings and overall
economic prosperity.
The following statements in the press release are
complained of:
The Governor in Council has varied CRTC Decision 88-4 to
ensure that Bell Canada International (BCI) is not unfairly
placed at a disadvantage in the highly competitive international
telecommunications market because of an arbitrary financial
calculation.
The Government has also been guided by its recognition 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.
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.
According to the respondents, these statements
show, indeed, that the Governor in Council acted
in bad faith, exceeding his jurisdiction by basing
his decision on a consideration that is not within
the scheme, objects or purposes of the Act. 8 The
statements must not be viewed in isolation. Other
evidence explaining the action taken is found in
the Order in Council where it is said that "that it
is in the public interest" to so decide. Moreover,
both the Minister in her letter of July 14, 1987 and
the government press release of April 22, 1988
state that there should be no cross-subsidization
between Bell Canada and BCI. The only point of
difference between the Governor in Council and
the CRTC was in the manner the appropriate
compensation should be calculated having regard
to that principle.
The nature of the decision and of the decision-
maker is not to be overlooked. It is well to remind
ourselves of the distinction that is apparent in
Inuit Tapirisat between the Governor in Council
acting within the statutory mandate conferred by
Parliament and the various policy concerns that
might lead him to do so. That he may take account
of such concerns is made clear in that case. They
are also identified, and bear repeating. At page
753, Estey J. said:
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
8 1n Roncarelli v. Duplessis, [1959] S.C.R. 121, Rand J.
said, at p. 140:
"Discretion" necessarily implies good faith in discharging
public duty; there is always a perspective within which a
statute is intended to operate; and any clear departure from
its lines or objects is just as objectionable as fraud or
corruption.
Re Doctors Hospital and Minister of Health et al. (1976), 68
D.L.R. (3d) 220 (Ont. Div. Ct.) and Re Toohey: Ex parte
Northern Land Council (1981), 38 ALR 439 (H.C.) are illus
trative of a statutory body exceeding its discretionary mandate
by acting for a single unauthorized purpose.
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, commer
cial or of some other nature.
The international competitive position of BCI was
obviously a policy matter which the Governor in
Council could and did take into account.
I do not find in the record any clear evidence
that the Governor in Council acted for the sole
purpose of assisting BCI and for no other purpose.
To so conclude would require that we turn a blind
eye to other parts of the evidence, and to treat the
decision more or less as a mere sham. 9 It is
apparent that the calculation of the compensation
pursuant to the CRTC decision was considered to
be "arbitrary", and also that it appeared "exces-
sive and potentially damaging to Canada's inter
ests internationally" and would subject BCI to
"unequal treatment" and place it at "a severe
disadvantage in relation to its major international
competitors".
Even if one were to assume that the Governor in
Council acted with a dual purpose in mind (one
falling within his mandate i.e. rate setting, and the
other falling outside his mandate i.e. concern for
BCI's international competitive position), I doubt
that this could advance the respondents' case. 10 In
Thorne's Hardware, for example, there was evi-
9 Courts have pointed out that the exercise of a statutory
discretion "must be a real exercise of discretion" (per Lord
Greene M.R. in Associated Provincial Picture Houses, Ld. v.
Wednesbury Corporation, [1948] 1 K.B. 223 (C.A.) at p. 228),
not "something which would be illegal or to enable some
subsequent act to be done which would itself be illegal" (per
Lord Warrington in Rex v. Chiswick Police Station Superin
tendent, Ex parte Sacksteder, [ 1918] 1 K.B. 578 (C.A.), at p.
589), or that clothes an illegal order "with the garments of
legality simply for the sake of appearances" (per Donovan L.J.
in Regina v. Governor of Brixton Prison, Ex parte Soblen,
[1963] 2 Q.B. 243 (C.A.), at p. 308).
10 In the administrative law field, judges have sometimes
spoken of the need in such a case to seek out the "dominant"
purpose for exercising a statutory discretion (see Earl Fitzwil-
liam's Wentworth Estates Co. Ltd. v. Minister of Town and
Country Planning, [1951] 2 K.B. 284 (C.A.), per Denning L.J.
at p. 307; compare Hanks v. Minister of Housing and Local
Government, [1963] 1 Q.B. 999, at pp. 1018-1020).
dence that the Governor in Council acted to
expand the limits of a harbour both as a means of
increasing revenues and in rationalization of mari
time activities in the area, the latter being within
and the former being beyond the objects of the
statute. The Court nevertheless concluded that the
action fell within the Governor in Council's man
date. At page 117 Dickson J. said:
The appellants acknowledge that s. 7 does give the federal
Cabinet jurisdiction to expand the harbour limits. They say,
however, that this can only be done with an eye to the
"administration, management and control" of the harbour and
that the section does not authorize expansion for the purpose of
increasing the Board's revenues.
1 have already pointed out that the port was not expanded
only for the purpose of increasing revenues, and that "rationali-
zation" of maritime activity in the area was also an important
factor. It seems to me that "rationalization" in the sense
indicated above easily falls within the scope of the powers
conferred by s. 7(2).
Did the respondents have a "reasonable expecta
tion" of being heard?
The respondents seek to rely on the evolving
doctrine of "reasonable expectation" or, as some
courts have called it, "legitimate expectation". It is
nowhere better described than by 'Lord Fraser of
Tullybelton in Council of Civil Service Unions v.
Minister for the Civil Service, [1985] A.C. 374
(H.L.), at page 401:
But even where a person claiming some benefit or privilege has
no legal right to it, as a matter of private law, he may have a
legitimate expectation of receiving the benefit or privilege, and,
if so, the courts will protect his expectation by judicial review
as a matter of public law. This subject has been fully explained
by my noble and learned friend, Lord Diplock, in O'Reilly v.
Mackman, [1983] 2 A.C. 237 and I need not repeat what he
has so recently said. Legitimate, or reasonable, expectation may
arise either from an express promise given on behalf of a public
authority or from the existence of a regular practice which the
claimant can reasonably expect to continue.
See also the discussion of Lord Diplock at pages
408-409.
It is only necessary to observe at this point that
no evidence exists in the record such as plainly
establishes the existence of either an "express pro
mise" or a "regular practice". In the absence of
such evidence, the doctrine can have no applica
tion.
Disposition
In summary, I am satisfied for the foregoing
reasons that Order in Council P.C. 1988-762 is
valid. Accordingly, I would allow the appeal and
set aside the judgment of the Trial Division. As the
parties are agreed that there be no costs, none
should be ordered.
PRATTE J.A.: I agree.
MAHONEY J.A.: I agree.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.