Docket: A-60-16
Citation: 2016 FCA 242
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CORAM:
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TRUDEL J.A.
BOIVIN J.A.
DE MONTIGNY J.A.
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BETWEEN:
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THE ATTORNEY
GENERAL OF CANADA
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Appellant
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and
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ZONE3-XXXVI
INC.
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Respondent
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REASONS FOR JUDGMENT
DE MONTIGNY J.A.
[1]
This is an appeal and a cross-appeal against a
decision by a Federal Court judge (the Judge) allowing the respondent’s
application for judicial review in part. The Judge set aside the decision
rendered by the Minister of Canadian Heritage (the Minister) refusing to issue
a Canadian Film or Video Production Certificate (the Certificate), but refused
to order the Minister to grant the Certificate or to issue it himself; he
instead referred the case back to the Minister for reconsideration.
[2]
After reviewing the record and hearing the
submissions from each party’s counsel, I am of the view that the principal
appeal must be allowed and that, accordingly, it is not necessary to render a
decision on the cross-appeal. In my opinion, the decision rendered by the
Minister was reasonable with respect to the relevant legislative and regulatory
provisions, and the decision-making process met the requirements of procedural
fairness in this case.
I.
Facts
[3]
On September 25, 2013, the respondent filed
an application with the Minister of Canadian Heritage to obtain a certificate
allowing it to obtain a tax credit for one of its television productions. The
respondent, Zone3-XXXVI Inc. (Zone3), is a corporation created under the Canada
Business Corporations Act, R.S.C. 1985, c. C-44.
[4]
The Canadian Film or Video Production Tax Credit
(CPTC or Tax Credit) is one of the incentive programs administered through the
income tax system aimed at encouraging and stimulating the development of the
television production industry. The credit amounts to 25% of the qualified
labour expenditures of a Canadian-controlled production corporation and applies
to films with a high level of Canadian content.
[5]
Under subsections 125.4(1) and (3) of the Income
Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (the Act), a
qualified corporation may claim a CPTC for a “Canadian
film or video production” described in subsection 1106(4) of
the Income Tax Regulations, C.R.C. c. 945 (the Regulations). According
to the latter provision, a “Canadian film or video
production” means a production in respect of which the Minister has
issued a certificate attesting that it meets a certain number of the conditions
listed in that subsection. However, excluded from certificate eligibility are
11 production types listed under the definition of “excluded production” in the Regulations,
specifically, “a production in respect of a game,
questionnaire or contest (other than a production directed primarily at
minors).” The relevant provisions of the Act and Regulations are
attached hereto as an appendix.
[6]
In accordance with the Regulations, it is the
Minister’s responsibility to assess the CPTC eligibility criteria of a production.
This assessment is done on the basis of information provided by the producer
and on the recommendation of the Canadian Audio-Visual Certification Office
(CAVCO), a unit of the Department specializing in implementation of this type
of tax credit. Once it has been determined that a production meets all of the
requirements of the Act and Regulations, the Minister issues a certificate that
will allow the production company to claim the tax credit when they file their
income tax return with the Canada Revenue Agency (CRA).
[7]
The Act and Regulations are supplemented by
Guidelines adopted by the Minister pursuant to subsection 125.4(7) of the
Act. Under that provision, the Minister is allowed to adopt Guidelines “respecting the circumstances under which the conditions in
the definition Canadian film or video production certificate” are
satisfied. It also states that these Guidelines are not statutory instruments
as defined in the Statutory Instruments Act, R.S.C., 1985, c. S-22.
[8]
On April 2, 2012, the Minister published a
58-page guide (CPTC Program Guidelines), to help producers submit a CPTC
application to CAVCO. It contains a summary of the requirements for a
production to qualify and also explains how the program is administered by
CAVCO; it includes clarifications on the documents and information required and
definitions of the various types of productions. Specifically, it states the
scope of a “production in respect of a game,
questionnaire or contest (other than a production directed primarily at minors)”
in the following terms:
A program featuring games of skill and
chance, as well as quizzes. Note: Productions of this genre directed at
minors are eligible; however, programming that uses or features copyrighted and
commercially available goods, such as games or other products directed
primarily at minors, whether sponsored or not, are ineligible.
Guidelines, Appeal Book, vol. 2, at
page 392 (the English version of this provision is reproduced in the
appendix) [bold in the original]
[9]
On September 25, 2013, Zone3 submitted an
application to CAVCO to obtain a certificate for the production “On passe à l’histoire” [Going Down in History] (the
Production) to be eligible for the CPTC. In its application, Zone3 describes
the Production as being in the “magazine” genre.
The accompanying synopsis describes the Production in the following terms:
Hosted by Chantal Lamarre, On passe à l’histoire
is a new general knowledge quiz that is both fun and educational, with each
episode dealing with the life and times of a real historical or contemporary
figure.
The premise is a simple one: the program
delves into the story of Cleopatra, Molière or even J.F. Kennedy.... This
pretext gives rise to 60 minutes of questions covering a range of
categories—facts, curiosities and pop culture—about the person chosen and the
world in which he or she lived. The three contestants—Quebec stars or
celebrities—are lively, witty and funny.
To flesh out the educational component of
the program, the presenter is supported by a “learned historian,” who will
provide additional insight on a variety of topics. In addition, a
multi-instrumentalist will provide musical entertainment by playing music
adapted to each episode.
Synopsis, Appeal
Book, vol. 2, at page 442.
[10]
After watching the DVD of the Production, the
CAVCO officer responsible for the assessment felt that it was an excluded
production because it included a quiz show. Applying the usual procedures as
set out in the affidavit of Johanne Mennie, Director of CAVCO (See Appeal
Book, vol. 2, at page 372), the file was sent to the Advisory
Committee, whose 10 members agreed with the officer’s finding. The file
was then brought to the attention of CAVCO’s Compliance Committee, comprised of
four senior analysts and managers, who also unanimously adopted the officer’s
recommendation that the Production be excluded since it includes a game,
questionnaire or contest.
[11]
On August 25, 2014, an advance notice of
denial was sent to the respondent to advise that CAVCO’s intentions were to
recommend that their application for a certificate be denied. That decision was
justified as follows:
CAVCO’s viewing of the production ON
PASSE À L’HISTOIRE (I) revealed that each episode follows a game show
format with a historical theme. The host of the show introduces the contestants,
who compete against each other by answering a series of questions on the
topic(s) chosen for the episode. In addition, ON PASSE À L’HISTOIRE (I)
is associated with a “quiz”-type computer application that viewers can use to
play along with the contestants at home while watching the series.
Advance notice
of denial, Appeal Book, vol. 2 at pages 469–470 [emphasis in
original]
[12]
Using the option provided for in the Guidelines
to submit new information that may influence the assessment of the file, the respondent’s
representative sent CAVCO an elaborate argument to show that the Production was
a “magazine” type show, characterized by [translation] “its
strong informative content, which is presented in a fun and upbeat manner”
(Appeal Book, vol. 2, at pages 572–577). It is argued therein
that the exclusion set provided for in the Regulations essentially means
productions with the primary goal of presenting a game show, not productions
such as this one in which the use of a “game,” “questionnaire” or “contest”
formula is not the primary objective of the Production and merely served as a
pretext or tool for making the informational content of the Production more
amusing. It is alleged that the informative content is so substantial that the
Société de développement des entreprises culturelles (SODEC)—that plays a role
in Quebec is similar to that played by CAVCO—described the Production as a “documentary series.”
[13]
The CAVCO Compliance Committee examined these
submissions and asked the respondent for clarifications on other allegedly
similar productions mentioned by its representative, which were allegedly
granted a CPTC. After examining the synopsis of these productions, the
Committee maintained its position and CAVCO consequently forwarded its
recommendation to the Minister to refuse to issue the certificate for the
Production. The Minister’s decision was sent to the respondent on
February 2, 2015.
[14]
In his notice of denial, the Minister stated his
agreement with CAVCO’s recommendation, according to which the Production in
question is a production that includes a game, questionnaire or contest under
subparagraph 1106(1)(b)(iii) of the Regulations, for the reasons set out
in the advance notice of denial. In what appears to be a reply to the arguments
raised by the respondent’s representative following the advance notice of
denial, the Minister added that: (a) the fact that the production is
described as a “general entertainment” program
or that the contestants are celebrities does not change the fact that the
production does in fact include a game, a quiz or a contest; (b) how SODEC
qualifies this production is irrelevant; and (c) each application under
the CPTC Program is decided on its own merit.
[15]
As previously mentioned, the appellant filed the
CAVCO Director’s affidavit in support of its defence in Federal Court.
Following her examination on affidavit, an untranslated working tool entitled “Decision Tree,” which she had mentioned in her
responses, was produced by the appellant. According to the Director, that
working tool is for internal use only and is used to ensure a certain degree of
consistency among the employees called upon to determine whether a production
includes a “game, questionnaire or contest”
within the meaning of the Regulations (Affidavit of Johanne Mennie, Appeal
Book, vol. 2, p. 370 at paragraphs 40–41).
[16]
For the purposes of this analytical framework,
three questions appear to be determinative: (a) Do the contestants compete
to win? In the affirmative, a second question must be asked: (b) Is the
same group of contestants kept for the duration of the series? If the answer to
this second question is negative, we move on to the third question: (c) Do
the tasks or games have objective results (true or false)? If there is an
objective answer to the questions asked, then we are faced with a production
including a game, questionnaire or contest, which is eligible only if it
targets minors and does not use or present games or other products mainly
designed for minors. Moreover, a footnote states the following: “If there are non-game show/contest elements then we need to
determine whether it is ‘primarily’ a game show/contest or not. Prolonged
set-up to a challenge should still be considered part of the challenge.”
II.
The impugned decision
[17]
The Federal Court held that CAVCO and the
Minister had broken their duty of procedural fairness towards the respondent,
and that the reasons for denial were themselves “seriously
inadequate,” thereby overturning the decision rendered on
February 2, 2015, refusing to grant the certificate for the Production, a
necessary element for obtaining a CPTC. Conversely, the Court refused to order
the Minister to grant the certificate, expressing the view that it was
preferable to refer the matter back to the Minister for reconsideration.
[18]
On the merits, the Federal Court determined that
the advance notice and notice of denial were fundamentally flawed since the
reasons do not include a serious analysis of the true nature or the main
feature of the Production, and do not address the arguments formulated by the
respondent in its submissions to CAVCO. Paragraph 60 of the decision under
appeal provides a good summary of the Judge’s reasoning with respect to the
reasonableness of the reasons:
Moreover, the reasons provided by CAVCO and
the Minister do not actually deal with the applicant’s main argument regarding
its description of the Production as a “magazine” or “documentary” series—which
qualifies the production for a CPTC because these two genres are not mentioned
in subparagraphs 1701(1)(b)(i) to (xi) of the Regulations. In the absence
of articulate reasoning, the final outcome is arbitrary and capricious. The
sparse reasons of the advance notice and notice of denial do not allow this
Court to verify whether the Minister actually questioned whether the
Production is primarily a “game” or a “contest” under
subparagraph 1106(1)(b)(iii) of the Regulations. The current reasons do
not allow the Court to understand why, in practice, several productions also
featuring “games of skill and chance, as well as quizzes” were certified in the
past by the Minister because they were “eligible productions”. [Emphasis in the
original]
[19]
Moreover, the Judge criticized the Minister for
having tried to fill any gaps in the reasons for denial given to the respondent
by invoking clarifications provided by CAVCO’s Director in her affidavit and,
more specifically, regarding the “Decision Tree.”
In the Judge’s view, the justification provided a posteriori do not
appear in the reasons for the impugned decision and would even contradict some
important aspects therein. Given that this is not a simple working tool to the
extent that the document refers to additional and new criteria not found in the
Regulations, nor in the Guidelines, the respondent had, in its opinion, a legitimate
expectation that the advance notice of denial list the criteria to allow it to
make relevant representations. This breach of procedural fairness tainted the
legality of the ministerial denial and, to the Judge, therefore constituted a
second basis for justifying the Court’s intervention.
III.
Issues
[20]
The principal appeal raises the following two
questions:
a) Was the Minister’s decision not to issue a certificate to Zone3 on
the grounds that the series includes “a game,
questionnaire or contest” reasonable?
b) Did the process followed by the Minister and CAVCO to render the
decision meet the applicable requirements of the duty of procedural fairness in
the circumstances?
[21]
Additionally, the cross-appeal filed by the
respondent raised the issue of whether the Judge erred in refusing to issue an
order to require the Minister to grant Zone3 a certificate. In the light of the
manner in which I suggest disposing of the principal appeal, the cross-appeal
becomes moot and it is therefore not necessary to answer that question.
[22]
The appellant raised another question in his
appeal, related to the examination of the motion to strike he had filed at the
opening of the hearing on the merits of the application for judicial review. In
a separate order issued on January 5, 2016 (2016 FC 7), the
Judge dismissed a motion to strike most of the paragraphs in the affidavit of
the president of the production corporation-respondent, as well as the
affidavits of various heads of other production corporations aimed essentially
at filing DVDs of episodes of allegedly similar productions that had received a
CPTC in the past. However, he reserved the right to conduct further
investigation into the admissibility as evidence, the relevance or the weight
to lend to these pieces of evidence. In the decision under appeal, the Judge
dismissed any preliminary objection by the appellant as to the admissibility or
relevance of any piece of evidence it considers in his reasons, and applied mutatis
mutandis the criteria and reasons mentioned in his previous decision.
[23]
Indeed, as a general rule, an application for
judicial review must be assessed on the basis of the file that was before the
original decision-maker. However, there are certain exceptions to this rule, in
particular, when an affidavit provides general background in circumstances
where that information might assist the Court in understanding the issues
relevant to the dispute, or even when an affidavit is necessary to bring to the
attention of the reviewing court procedural defects (such as bias) that cannot
be found in the certified tribunal record (see Association of Universities
and Colleges of Canada v. Canadian Copyright Licensing Agency (Access
Copyright), 2012 FCA 22, at paragraphs 17–19,
[2012] F.C.J. No. 93 [Access Copyright]; Delios v.
Canada (Attorney General), 2015 FCA 117, at
paragraphs 41–46, [2015] F.C.J. No. 549).
[24]
In this case, I have not been convinced that the
Judge made a palpable and overriding error in exercising his discretionary
power by dismissing the motion to strike submitted to him by the appellant. The
Judge clearly identified the applicable legal principles and justified his
decision on the argument that the evidence referred to in the motion to strike
was helpful in shedding relevant light on application of the factors identified
in Baker v. Canada (Minister of Citizenship and Immigration),
[1999] 2 S.C.R. 817, 174 D.L.R. (4th) 193 [Baker],
and, more specifically, regarding the legitimate expectations the respondent
may have had in having the Production certified by the Minister. As regards the
Judge’s comments on the late filing of the motion, I am of the view that they
were not determinative factors in exercising his discretion. Nor should they
be, particularly when the adverse party was not caught by surprise, as was the
case here, insofar as the doctrine of this Court and the Federal Court holds
that preliminary motions should be discouraged and left up to the trial judge
to decide issues of admissibility of evidence whenever possible (see in
particular Access Copyright, at paragraph 11; Armstrong v.
Canada (Attorney General), 2005 FC 1013, at paragraph 37,
141 A.C.W.S. (3rd) 5).
IV.
Analysis
[25]
When it is seized of an appeal from a judgment pertaining
to a judicial review proceeding, the role of this Court is to determine whether
the trial judge correctly identified the applicable standard of review and that
he applied it appropriately. In other words, this Court must, for all practical
purposes, step into the shoes of the trial judge and examine the impugned
administrative decision in accordance with the relevant standards of review (Agraira
v. Canada (Public Safety and Emergency Preparedness),
2013 SCC 36, at paragraph 46,
[2013] 2 S.C.R. 559).
[26]
In this case, there is no doubt (and the parties
agree) that the reasonableness standard of review applies to decisions rendered
by the Minister under the authority of sections 125.4 of the Act and 1106
of the Regulations. This was also the doctrine propounded by the Federal Court
when it was called upon to decide such issues (see Productions Tooncan
(XIII) Inc. v. Canada (Minister of Canadian Heritage),
2011 FC 1520, at paragraph 40, 404 F.T.R. 19, citing Tricon
Television29 Inc. v. Canada (Minister of Canadian Heritage),
2011 FC 435, at paragraph 31,
[2011] F.C.J. No. 547). These cases involve questions of mixed
fact and law, and the role of the judicial review judge is not to decide
whether he would have rendered the same decision, but rather to assess the
justification of the decision, the transparency and the intelligibility of the
decision-making process, and to also ensure that the decision falls within the
range of possible, acceptable outcomes which are defensible in respect of the
facts and law (Dunsmuir v. New Brunswick, 2008 SCC 9, at
paragraph 47, [2008] 1 S.C.R. 190).
[27]
The same does not hold true for questions
involving the application of the rules of procedural fairness. These issues
must be reviewed according to the standard of correctness, as per the
unequivocal doctrine of the Supreme Court in that regard (see in particular Canada
(Citizenship and Immigration) v. Khosa, 2009 SCC 12, at
paragraph 43, [2009] 1 S.C.R. 339; Mission Institution
v. Khela, 2014 SCC 24, at paragraph 79,
[2014] 1 S.C.R. 502).
[28]
Since the Judge correctly identified these
standards of review, the only question before this Court is whether he
correctly applied them in the light of the evidence before him. That is the point
that I will now examine.
A.
Was the Minister’s decision not to issue a
certificate to Zone3 on the grounds that the series includes “a game, questionnaire or contest” reasonable?
[29]
The question for the Judge to answer was whether
the decision rendered by the Minister is based on a rational justification and
falls within the range of possible acceptable outcomes, in view of the Act and
Regulations. In taking this approach, a judge must show deference and avoid
substituting the decision he would have made for that of the administrative
decision-maker. As my colleague, Justice Stratas, reiterated in Exeter
v. Canada (Attorney General), 2011 FCA 253, at paragraph 15, 423 N.R. 262:
Under reasonableness review, the Court is
not permitted to make its own decisions and substitute its views on these
matters for those of the Tribunal. In particular, the Court is not permitted to
draw new findings of fact nor to exercise its own fact-based discretion.
Rather, the Court is limited to considering whether the decisions of the
Tribunal fall within a range of possible outcomes that are defensible on the
facts and the law: Dunsmuir, supra at paragraph 47. Put
another way, the Tribunal is entitled to a “margin of appreciation within the
range of acceptable and rational solutions”: Dunsmuir, supra at
paragraph 47. In practice, this Court can interfere only where the
Tribunal has erred in a fundamental way.
[30]
As indicated previously, the Regulations do not
specify what types of productions may be granted a CPTC; rather, it uses an
exclusion approach. Under subsection 1106(4), a “Canadian
film or video production” means a film or video production, “other than an excluded production,” of a prescribed
taxable Canadian corporation in respect of which the Minister has issued a
certificate. Moreover, subsection 1106(1) defines the concept of “excluded production” and paragraph (b) of that
definition lists 11 types of productions that fall under that category.
[31]
In view of the architecture of the Regulations,
the Minister was not required to inquire as to whether the Production could be
treated as a “documentary” or a “magazine,” much less take into consideration how
SODEC treated this Production. Not only are the underlying reasons for this
decision and the applicable statutory and legal instruments not in evidence,
but in addition, the Minister was not bound by that decision, as the Judge also
acknowledged at paragraph 61 of the decision under appeal. What is more,
and at the risk of repeating myself, the Minister’s role was not to qualify the
Production, but rather to ensure that it did not fall under one of the excluded
production categories in the Regulations.
[32]
Now, what does precisely provide
subparagraph 1106(1)(b)(iii) of the Regulations? It refers to the
exclusion of a production “in respect of” a
game, questionnaire or contest. The fact that these terms themselves are very
broad in scope is not in dispute. The ordinary meaning of “comporter” [in respect of] implies the notion of “inclure” [to include] or “impliquer”
[to involve], “comprendre” [to include] or “contenir” [to contain, include], as evidenced in the
definitions of this term in Le Nouveau Petit Robert, 2015 and Le
grand Larousse encyclopédique, 2007. The same is true for the words “in respect of,” which the Supreme Court referred to
as words of “the widest possible scope” and was
probably the widest of any phrase intended to convey some connection between
two related subject matters (see Sarvanis v. Canada,
2002 SCC 28, at paragraph 20,
[2002] 1 S.C.R. 921; Nowegijick v. The Queen,
[1983] 1 S.C.R. 29, at page 39,
144 D.L.R. (3rd) 193.
[33]
The respondent does not dispute that the
Production includes a game, questionnaire or contest component. Moreover, the
respondent would be hard-pressed to argue the contrary, considering that the
synopsis provided in support of its application described the Production as a “new general knowledge quiz.” At the hearing, counsel
for Zone3 argued that this was an error made by a new employee. Not only does
the file contain no evidence to that effect, what is more, the alternative
description of the Production, which the respondent tried to present in
response to the advance notice of denial, was of no help. Even assuming that
the quiz was a backdrop for presenting informative content (rather than the
opposite, as the synopsis suggested), it would not follow that the Minister’s
decision to exclude the Production under subparagraph 1106(1)(b)(iii) is flawed.
The exclusion of a production in respect of a game, questionnaire or contest is
broad enough to include the Production in this case, regardless of the relative
importance accorded to the quiz aspect compared to the historical or
informative content.
[34]
In that regard, counsel for the respondent
argued that it would be unreasonable for the Minister to exclude a production
on the mere fact that it includes a game, questionnaire or contest. The Judge
seems to have accepted that argument, expressing the view that the “fundamental flaw” of the advance notice and notice of
denial stems from the fact that the reasons do not include any serious analysis
of the “true nature” or “main
feature” of the Production. With all due respect, I am of the view that
this conclusion is without merit.
[35]
The language of the Regulations does not
quantify the importance required of the game, questionnaire or contest
component for a production to be excluded. Even the Guidelines provide that
this exclusion targets programs “featuring”
games of skill and chance, as well as quizzes. The Minister therefore had broad
discretionary power in this regard, and the CAVCO Director also explained in
her affidavit and her examination the efforts that were made to ensure a
certain consistency through the “Decision Tree.”
I will come back to this tool in my analysis of the procedural fairness
requirements.
[36]
It is not for the reviewing court to incorporate
conditions or parameters not found in statutes or regulations. If one had
wanted to delineate or limit the Minister’s discretion, the Act or Regulations
would have so provided. It is also interesting to note that certain exclusions
set out in the definition of “excluded production”
in the Regulations are accompanied by clear qualifiers. This excludes a
production that is “produced primarily for industrial,
corporate or institutional purposes,” as well as a production, other
than a documentary, “all or substantially all of which
consists of stock footage” (see definition of “excluded
production” in subsection 1106(1), subparagraphs (b)(x) and
(b)(xi) of the Regulations [emphasis added]). In fact, even the exclusion of a
production including a game, questionnaire or contest mentions that it does not
apply to a production “directed primarily at minors”
[emphasis again added].
[37]
It was therefore not for the Judge, as part of a
review on the legality of the Minister’s decision, to limit his discretion and
to add to the Regulations, by requiring that he rule on the main feature or
true nature of the Production. Nothing of that sort is set out in the Act and
Regulations, and with no clear indication to the contrary, it is not for the judiciary
to take the role of the legislature or to limit the broad discretionary power
conferred upon the Minister, except in very rare cases in which it can be
demonstrated that the impugned decision was made arbitrarily. That is not the
case here.
[38]
Even supposing that one can conclude that the
wording of subparagraph 1106(1)(b)(iii) of the Regulations, where is found
the definition of “excluded production,” is
ambiguous and opens the door to the more restrictive interpretation that the
respondent suggests, the Court should nevertheless exercise deference and
resist the temptation to substitute its interpretation for that of the Minister.
The reasonableness standard assumes that there can be more than one acceptable
outcome. As the Supreme Court noted in McLean v. British Columbia
(Securities Commission), 2013 SCC 67, at paragraph 40,
[2013] 3 S.C.R. 895:
The bottom line here, then, is that the
Commission holds the interpretative upper hand: under reasonableness review, we
defer to any reasonable interpretation adopted by an administrative
decision maker, even if other reasonable interpretations may exist.
Because the legislature charged the administrative decision-maker rather than
the courts with “administer[ing] and apply[ing]” its home statute (Pezim,
at pg. 596), it is the decision-maker, first and foremost, that has the
discretion to resolve a statutory uncertainty by adopting any interpretation
that the statutory language can reasonably bear. Judicial deference in such
instances is itself a principle of modern statutory interpretation. [Emphasis
in the original]
[39]
In short, the Minister’s decision must stand. It
clearly falls within the range of possible, acceptable outcomes, in the light
of the broad discretion conferred on the Minister by the exclusion passage, and
by the respondent’s own description of its production. The Minister’s decision
is based on a reasonable interpretation of the Regulations, and was rendered
following an established decision-making process, under which all authorities
recommended that the Production be excluded.
[40]
Lastly, I find the decision rendered by the
Minister to be perfectly intelligible. Not only do the reasons stated in the
letter of refusal provide an understanding of the reasons for which it was
determined that the Production included a game, questionnaire or contest and
could thus not be issued a certificate, but in addition, the reasons satisfy the
arguments raised by the respondent following the advance notice of denial. Even
though it was not required to do so, CAVCO considered the other productions
certified in the past that the respondent had submitted as evidence and found
that they were different from the Production at issue in this case.
[41]
In any event, the Minister was justified in not
taking into account past assessments of other productions, given that he had a
duty to determine whether the Production was considered excluded on the sole basis
of the language of the Regulations. That is what he argues when he writes that “. . . each application under the CPTC Program is decided
upon its own merit, and the eligibility of each production is determined
according to the requirements of the Act and the Regulations” (Notice of
denial, Appeal Book, vol. 2, at page 487). That statement is entirely
consistent with the case law holding that an administrative decision-maker must
take into account the applicable law and specific circumstances of each case,
and not consider to what extent the case under review may resemble a past
situation (see Communications, Energy and Paperworkers Union of Canada,
Local 30 v. Irving Pulp & Paper, Ltd., 2013 SCC 34, at
paragraph 6, [2013] 2 S.C.R. 458; Altus Group Ltd. v.
Calgary (City), 2015 ABCA 86, at paragraph 16,
599 A.R. 223; Paul Daly, “The Principle
of Stare Decisis in Canadian Administrative Law,”
(2016) 49:1 R.J.T. 757, at pages 767 et seq.) The same
specifically holds true when the administrative decision-maker is not
exercising a quasi-judicial role, and if the language of the enabling statute
accord it broad discretionary powers and do not set out a specific procedure to
follow when exercising their decision-making power.
[42]
For all of the above reasons, I take the view
that the Minister’s decision was reasonable and that the Judge erred in finding
that the reasons set out in the notice of denial were flawed.
B.
Did the process followed by the Minister and
CAVCO to render the decision meet the applicable requirements of the duty of
procedural fairness under the circumstances?
[43]
It is not disputed that the requirements arising
from the concept of procedural fairness must be adapted according to the
specific context of each case. At paragraphs 23–27 of Baker, the
Supreme Court propounded five factors (that list was not exhaustive) that
had to be taken into account to determine what is required by the duty of
procedural fairness: (1) the nature of the decision being made and the
process followed in making it; (2) nature of the statutory scheme and the
terms of the statute pursuant to which the body operates; (3) the
importance of the decision to the individual or individuals affected;
(4) the legitimate expectations of the person challenging the decision;
and (5) the choices of procedure made by the agency.
[44]
In this case, applying these criteria can only
lead us to conclude that the imposed by the principle of requirements for
procedural fairness were minimal. The decision in issue is purely
administrative in nature, and the process established by the Act and
Regulations has none of the characteristics of a quasi-judicial procedure.
Moreover, the tax credit available upon the issuance of a certificate merely
calls into play economic interests. Without downplaying the importance of the
amounts at issue (especially given the fact that the Minister’s decision will
no doubt be the same for the application regarding the Production’s second
season), the fact does remain that this case is a far cry from the type of law
at issue in Baker (i.e. the right to remain in Canada on humanitarian
and compassionate grounds). Moreover, I note that the respondent could have
applied for a preliminary notice of entitlement, in accordance with
section 1.12 of the Guidelines. With that type of notice, had it been
sought, the respondent would have known the Minister’s position prior to
investing funds into the Production.
[45]
As regards the legitimate expectations the
respondent corporation may have had, they could only be procedural in nature,
as the Judge also acknowledged (see Canada (Attorney General) v. Mavi,
2011 SCC 30, at paragraphs 68 et seq.,
[2011] 2 S.C.R. 504 [Mavi]). In this case, neither the
Act nor the Regulations require that the Minister follow a specific procedure
in exercising the discretion conferred upon him as to whether to issue a
certificate. Only the Guidelines provide for the sending of an advance notice,
and the possibility that a qualified production corporation can make
representations in response to that advance notice. In this case, that
procedure was followed.
[46]
I therefore am of the view that the requirements
of procedural fairness were minimal in the treatment of the file submitted to
the Minister by the respondent for the purpose of obtaining a certificate to
qualify for a tax credit. The Minister’s sole duty consisted of sending an
advance notice of denial to the respondent and to allow it the opportunity to
provide additional information that might change the assessment of the
application, under section 1.16 of the Guidelines. The Minister met that
requirement. Not only did he provide the reason why he considered the
Production to be a game show, but the evidence shows that the respondent’s
reply was duly considered. As regards the reasons propounded in support of the
decision itself, they were clear enough for the respondent to understand why
the certificate had been denied. Considering the absence of any right to appeal
and the minimal level of procedural fairness that the respondent was entitled
to expect, the reasons did not need to be exhaustive or detailed; in this case,
they were more than sufficient to satisfy what might be legitimately expected
by a production corporation seeking to obtain a tax credit.
[47]
The respondent argued that the Minister had broken
his duty of procedural fairness by not informing the respondent in the advance
notice of denial of the existence of the “Decision
Tree” to which I have already alluded. I cannot accept this argument. On
the one hand, the Minister is not bound by that working tool, and the
reasonableness of his decision must be assessed only in accordance with the Act
and Regulations (and peripherally with the Guidelines). The respondent
certainly could have challenged the criteria adopted in the “Decision Tree” or proposed others to determine
whether a production is a “game, questionnaire or
contest;” but once again, it is not the adequacy of the working tools
the Minister can equip himself with to make his recommendations that is under
judicial review, but solely the final decision rendered by the Minister in
exercising the power conferred upon him by the Governor in Council by way of
regulation.
[48]
On the other hand, the CAVCO Director testified
to the effect that the purpose of that document is to promote consistency in
the processing of files that various CAVCO analysts are called on to treat,
with respect to productions for which a prima facie case has been
established that they include a game, questionnaire or contest (Affidavit of
Johanne Mennie, Appeal Book, vol. 2, page 370, at paragraphs 40–41).
Moreover, a brief review of the “Decision Tree”
confirms that the purpose of its application is usually to promote producers
given that it limits the scope of the exclusion set out in the Regulations. The
situation would no doubt be different had that tool expanded the scope of
exclusion related to games, questionnaires and contests; in the event that the
application of an overly restrictive internal tool would result in a decision
that is not within the range of possible, acceptable outcomes with respect to
the Regulations, that decision would be deemed unreasonable.
[49]
Lastly, I would add that the fate of other
productions could not create legitimate expectations for the respondent. As
indicated previously, the doctrine of reasonable expectations can only give
rise to procedural rights (Mavi, at paragraphs 68 et seq.; Genex
Communications Inc. v. Canada (Attorney General), 2005 FCA 283,
at paragraph 191, 260 D.L.R. (4th) 45; Old St. Boniface
Residents Assn. Inc. v. Winnipeg (City), [1990] 3 S.C.R. 1170,
at page 1204, 75 D.L.R. (4th) 385). In any event, one
cannot assume, on the sole basis of the evidence submitted by the respondent,
that CAVCO changed its practices and modified its interpretation of the
Regulations. The Minister is clearly not bound by the conclusions that the
respondent may draw from the fact that the productions it considers to resemble
the one at issue in this case were deemed eligible for the CPTC program. Had
the respondent wanted to ensure that its reading of the decisions rendered by
the Minister in respect of other productions was correct and qualified it to
claim a tax credit for its own production, the respondent simply had to submit
a preliminary notice of entitlement. Having not availed itself of that
possibility, the respondent cannot now invoke its own assessment of a few past
decisions to support the notion that the exclusion of its Production resulted
from a change in the Minister’s approach.
[50]
With all due respect, I am therefore of the
opinion that the trial judge could not conclude, on the sole basis of the
respondent’s perception and on his own view of a few productions submitted in
evidence, that “CAVCO and the Minister decided to
unilaterally change their practices and to differently interpret which
productions qualify for the CPTC Program” (Decision under appeal, at
paragraph 52). Such a conclusion not only disregards the testimony to the
contrary by the CAVCO Director, but also does not take into account the fact
that the productions presented as evidence as part of the judicial review
procedure represent only a selective sample of productions assessed by CAVCO,
that each production must be assessed based on its unique characteristics, that
determining what constitutes a game, questionnaire or contest is not an exact
science, and that the Minister could have made a mistake in the past.
V.
Conclusion
[51]
For all of the above reasons, I am therefore of
the opinion that the appeal must be allowed and that the decision of the trial
judge must be set aside. Rendering the judgment that should have been handed
down in Federal Court, I would consequently dismiss the respondent’s
application for judicial review, with costs. It is not necessary to rule on the
cross-appeal, which is moot in the light of my findings on the principal appeal.
“Yves de Montigny”
“I agree.
Johanne Trudel J.A.”
“I agree.
Richard Boivin J.A.”
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