Dockets: A-231-15
A-63-16
A-67-16
Citation:
2016 FCA 217
|
CORAM:
|
GAUTHIER J.A.
BOIVIN J.A.
DE MONTIGNY J.A.
|
|
A-231-15
BETWEEN:
|
|
BELL CANADA AND
BELL MEDIA INC.
|
|
Appellants
|
|
and
|
|
ATTORNEY
GENERAL OF CANADA
|
|
Respondent
|
|
and
|
|
NATIONAL
FOOTBALL LEAGUE, NFL INTERNATIONAL LLC AND NFL PRODUCTIONS LLC
|
|
Interveners
|
|
A-63-16
BETWEEN:
|
|
NATIONAL FOOTBALL LEAGUE, NFL INTERNATIONAL LLC AND
NFL PRODUCTIONS LLC
|
|
Appellants
|
|
and
|
|
ATTORNEY
GENERAL OF CANADA
|
|
Respondent
|
|
A-67-16
BETWEEN:
|
|
BELL CANADA AND
BELL MEDIA INC.
|
|
Appellants
|
|
and
|
|
ATTORNEY
GENERAL OF CANADA
|
|
Respondent
|
|
and
|
|
TELUS
CORPORATION
|
|
Respondent
|
REASONS
FOR JUDGMENT
DE MONTIGNY J.A.
[1]
This is a consolidation of three statutory
appeals under subsection 31(2) of the Broadcasting Act, S.C. 1991, c. 11
(the Broadcasting Act or the Act). The appellants are seeking to
quash two broadcasting regulatory policies issued by the Canadian
Radio-television and Telecommunications Commission (the Commission) regarding
simultaneous substitution, in which the Commission enacted regulations
providing remedies in case of errors in simultaneous substitution, and
announced its intention to implement its policy not to permit simultaneous
substitution during the broadcast of the Super Bowl, and for the general
broadcast of specialty channels, starting in 2017.
[2]
The three appeals were consolidated by order of
this Court dated April 12, 2016, the appeal in file A-231-15 being designated
as the lead appeal. In conformity with this order, the following reasons will
be filed in the lead file and a copy thereof will be filed as Reasons for
Judgment in file numbers A-63-16 and A-67-16.
[3]
For the reasons that follow, I am of the view
that these appeals should be dismissed.
I.
Background
[4]
Simultaneous substitution has been an integral
part of the Canadian broadcasting system for more than 40 years. It is a
process by which the signal of a distant (usually American) station being
broadcast in Canada is replaced by the signal of a local Canadian broadcaster
that broadcasts comparable programming at the same time, such that Canadian
viewers tuning to an American channel will in fact view the same program from a
Canadian broadcaster, with Canadian commercials. This allows the broadcaster
holding the rights to market the program in Canada to maximize its audience and
advertising revenue.
[5]
The simultaneous substitution regime is set out
in the Broadcasting Distribution Regulations, S.O.R./97-555 (the Distribution
Regulations). Pursuant to section 7, the general rule is that the signal
of a programming service cannot be altered or deleted. As an exception,
sections 38 and 51 of the Distribution Regulations permit or
require the replacement of lower priority (usually American) signals with
higher priority (usually local) signals if the programming service to be
deleted and the programming service to be substituted are “comparable and simultaneously broadcast” (paras.
38(2)(a) and 51(1)(a) of the Distribution Regulations).
[6]
In October 2013, the Commission announced the
start of a broad public consultation initiative on the future of the television
system entitled Let’s Talk TV: A Conversation with Canadians (Let’s
Talk TV). That consultation proceeded in three phases: 1) an initial phase
for collecting public input by a variety of means; 2) a second phase for
compiling and sharing the information received, coupled with an interactive
questionnaire; and 3) a third phase which provided more opportunities,
including an oral hearing, for the public to provide input on proposals for new
approaches to Canadian television regulation (see Notice of Invitation,
Joint Appeal Book, vol. 2, Tab 6, pp. 413-415). The Commission announced the Let’s
Talk TV process was intended to involve significant and fundamental changes
to television regulation, in order to ensure that the broadcasting system
continues to serve Canadians in light of a rapidly changing broadcasting
environment.
[7]
At the beginning of the third phase, the
Commission issued the Broadcasting Notice of Consultation CRTC 2014-190 (Notice
2014-190), soliciting submissions and comments on specific issues,
including simultaneous substitution. The Notice 2014-190 mentioned
complaints regarding substitution errors particularly for live sports events,
and complaints from viewers that would prefer to see American commercials at
the Super Bowl, and sought comments on whether simultaneous substitution should
be maintained, and how changes should be implemented. Shortly before the commencement
of the public hearing that took place between September 8 and 19, 2014, the
Commission released another Broadcasting Notice of Consultation CRTC
2014-190-3 and further requested comments on various proposals for the
future regulation of the Canadian television system. On the issue of simultaneous
substitution, the Commission set out two proposals for discussion. According to
Option A, broadcasting distribution undertakings (BDU) would no longer be
permitted to perform simultaneous substitution, whereas according to Option B,
BDUs would not be permitted to perform simultaneous substitution for live event
programming (e.g. sporting events or award shows).
[8]
In Broadcasting Regulatory Policy CRTC
2015-25 issued on January 29, 2015 (the First Policy), the Commission
announced that it would continue to allow simultaneous substitution generally,
but would disallow its use for specialty channels (i.e. channels that are not
broadcast over the air and to which viewers subscribe through a BDU) and the
Super Bowl (starting at the 2016-2017 season), and would amend regulations to
be able to remove simultaneous substitution privileges and require that
licensees pay compensatory rebates when recurring, substantial errors occur in
the simultaneous substitution process.
[9]
In support of these determinations, the
Commission reasoned that since the simultaneous substitution regime is an
exception to the general rule against altering or deleting a programming
service upon distribution, the “burden of proof”
was on broadcasters and BDUs. In the Commission’s view, the record demonstrated
that simultaneous substitution was still of significant benefit to Canadian
broadcasters since it allowed them to monetize their investments in programming
rights, and put that revenue towards developing Canadian programming. However,
the Commission considered that the practice should no longer be allowed for
specialty channels. It also stated that based on comments from the public and
the fact that American advertising is an integral part of the Super Bowl,
simultaneous substitution would not be allowed for this program starting in the
2016-2017 season. The Commission acknowledged that the current rights-holder’s
contract extended beyond that time, but considered that this would provide it
with a reasonable timeframe to make adjustments. Finally, the Commission stated
that broadcasters and distributors have an obligation to ensure that
simultaneous substitution is done properly, and that they are currently not
meeting the required level of service. The Commission announced its intention
to amend its regulations so that broadcasters making substitution errors can
lose their simultaneous substitution privileges for a period of time or
particular type of programming, and to require that BDUs that make such errors
provide compensatory rebates to customers.
[10]
The Commission did not specify how it would
implement these policy reforms, except to say that it would issue a notice of
consultation seeking comments on the text of the proposed amendments to the Distribution
Regulations.
[11]
On May 5, 2015, the Court granted Bell Canada
and Bell Media Inc. (collectively referred to as Bell) leave to appeal from the
First Policy in file number A-231-15. The NFL was given leave to intervene.
[12]
Bell Canada is the parent company of Bell Media
Inc., a broadcaster that holds exclusive broadcasting rights in Canada for the
Super Bowl until the 2018-2019 season based on a contract concluded with NFL
International LLC (NFLI) in 2013. They also broadcast certain specialty
channels. Bell Canada is also the parent company of Bell ExpressVu Limited
Partnership, a BDU that is a party to the proceedings in file numbers A-63-16
and A-67-16.
[13]
The National Football League (the League) is an
unincorporated association of 32 separately owned member clubs, each of which
operates a professional football team. NFLI and NFL Productions LLC
(Productions) are limited liability companies whose operations include
producing, licensing and distributing programming relating to NFL football. The
League, NFLI and Productions will be referred to collectively as the NFL.
[14]
In this appeal, Bell and the NFL challenged the
First Policy on the grounds of: i) denial of procedural fairness; ii) unlawful
administrative law discrimination; iii) unauthorized retrospective regulation
and interference with vested rights; iv) unreasonableness; and v) lack of
jurisdiction to enact the regime addressing simultaneous substitution errors.
The Attorney General also raised a number of issues as to whether the First
Policy was a “decision” subject to appeal, and
whether the appeal was premature.
[15]
On July 23, 2015, the Commission issued Broadcasting
Notice of Consultation CRTC 2015-330 (Notice 2015-330), together
with Broadcasting Information Bulletin CRTC 2015-329 (Bulletin
2015-329) entitled “Simultaneous substitution errors”.
These documents gave further details about changes that the Commission had
decided to make to the simultaneous substitution regime, and requested comments
on the draft regulations implementing penalties and rebates for simultaneous
substitution errors, which the Commission had announced in its First Policy.
The Bulletin 2015-329 indicated that the elimination of broadcasters’
simultaneous substitution rights for the Super Bowl would be implemented not by
regulation, as stated in the First Policy, but by an order made under paragraph
9(1)(h) of the Broadcasting Act. Bell and the NFL provided
comments in response to the Notice 2015-330.
[16]
In Broadcasting Regulatory Policy CRTC
2015-513, issued on November 19, 2015 (the Second Policy), the Commission
announced the enactment and coming into force of the Simultaneous
Programming Service Deletion and Substitution Regulations, S.O.R./2015-240
(the Substitution Regulations) which implemented a regime to
address substitution errors. The relevant provisions read as follows:
|
Decision by Commission
4(3) A licensee must not delete a programming service and
substitute another programming service for it if the Commission decides under
subsection 18(3) of the Broadcasting Act that the deletion and
substitution are not in the public interest.
|
Décision du Conseil
4(3) Le titulaire ne peut retirer un service de programmation et y
substituer un autre service de programmation si le Conseil rend une décision,
en vertu du paragraphe 18(3) de la Loi sur la radiodiffusion, portant
que le retrait et la substitution ne sont pas dans l’intérêt public.
|
|
Compensation
5(2) A licensee must provide compensation to its customers if the
Commission decides under subsection 18(3) of the Broadcasting Act that
the licensee deleted and substituted a programming service in a manner that,
through its own actions, resulted in recurring substantial errors and did not
establish that it exercised due diligence to avoid those errors.
|
Indemnisation
5(2) Le titulaire doit indemniser ses clients dans les cas où le
Conseil rend une décision, en vertu du paragraphe 18(3) de la Loi sur la
radiodiffusion, portant que le retrait et la substitution entraînent, en
raison des agissements du titulaire, des erreurs substantielles récurrentes
et que celui-ci n’a pas démontré avoir fait preuve de diligence afin de les
éviter.
|
[17]
With respect to the loss of the right to request
simultaneous substitution provided at subsection 4(3) of the Substitution
Regulations, the Commission noted that it already had the power under
the previous simultaneous substitution regime to order that simultaneous
substitution not be performed where it is not in the public interest. On
compensatory rebates under subsection 5(2) of the Substitution Regulation,
the Commission noted that this provision does not create a new power, but
simply makes necessary amendments to ensure that the regime continues to
fulfill its policy objectives. The Commission stated that this provision was
remedial, and not equivalent to administrative monetary penalties. Finally, the
Commission stated its intention to issue an order under paragraph 9(1)(h)
of the Broadcasting Act to exclude the Super Bowl from the simultaneous
substitution regime.
[18]
After being granted leave, the NFL and Bell each
filed appeals of the Second Policy, on February 24, 2016 (file number A-63-16)
and February 29, 2016 (file number A-67-16) respectively. In these appeals, it
is argued that the decision to prohibit simultaneous substitution at the Super
Bowl by order is beyond the scope of the Commission’s jurisdiction under paragraph
9(1)(h) of the Broadcasting Act and conflicts with the Copyright
Act, R.S.C. 1985, c. C-45 and a number of international treaties. They also
made additional arguments regarding the Commission’s lack of jurisdiction to
enact the Substitution Regulations. As previously mentioned, all
three appeals were consolidated on April 12, 2016. Telus Corporation was
granted limited participation rights as respondent in the consolidated appeal
based on its participation in the underlying consultation process before the
Commission.
[19]
On February 3, 2016, the Commission issued
Broadcasting Notice of Consultation CRTC-2016-37 (Notice 2016-37)
inviting comments on a proposed distribution order to be made under
paragraph 9(1)(h) of the Broadcasting Act that would prohibit
simultaneous substitution for the Super Bowl, beginning with the 2017 broadcast
of the Super Bowl.
II.
Issues
[20]
The parties have submitted a number of issues with
respect to both policies. In the first appeal, the Attorney General had submitted
that the First Policy was not a “decision or order”
within the scope of section 31 of the Broadcasting Act, pursuant to
which an appeal lies only from a decision or order, and that the appeal was
premature. As part of the Second Policy, the Substitution Regulations
have been promulgated and the Commission has thereby rendered a final decision
encompassing the form and substance of its policy determinations to implement a
penalty and rebate regime for simultaneous substitution errors. Accordingly, the
Attorney General has not raised in A-67-16 dealing with the Second Policy, a
preliminary argument with respect to the remedial regime.
[21]
The remaining issues to be decided in this
appeal, therefore, can be framed as follows:
A.
Is the appeal of the policy determination to
eliminate simultaneous substitution for the Super Bowl and for specialty
services premature?
B.
Does the Commission lack jurisdiction to enact a
remedial regime for simultaneous substitution errors?
III.
Analysis
A.
Is the appeal of the policy determination to
eliminate simultaneous substitution for the Super Bowl and for specialty
services premature?
[22]
Pursuant to subsection 31(2) of the Broadcasting
Act, an appeal to this Court lies only from a “decision
or order” of the Commission. The Attorney General submits that the two policies,
insofar as they pertain to disallow simultaneous substitution for the Super
Bowl effective in 2017, are in the nature of statements of intent to exercise
statutory powers in the future. As such, it is argued that they do not qualify
as decisions or orders within the meaning of subsection 31(2). I agree.
[23]
Bell contends that the Commission made a final
and binding decision to disallow simultaneous substitution for the Super Bowl
effective in 2017 and that such a decision is not open to reconsideration. It
relies for that proposition on the wording used by the Commission, referring to
that policy change as a “decision”. Under the
heading “Implementation”, for instance, the
Commission states in its First Policy that it will issue a notice of
consultation “seeking comment on the text of proposed
amendments to the Regulations required to enact the policy changes in this
decision” (see First Policy; Joint Appeal Book, vol. 2, Tab 3, p. 243 at
para. 23). Bell also noted in reply to the Attorney General’s argumentation on
prematurity in A-231-15 that the Commission has not asked for comments on the
substantive decision to disallow simultaneous substitution for the Super Bowl,
but only on the text of proposed amendments to the Distribution Regulations
required to implement its decision. In its latest Notice 2016-37, issued
on February 3, 2016, the Commission initiated its Call for comments on a
proposed distribution order prohibiting simultaneous substitution for the Super
Bowl (Call for comments on the Super Bowl) and again reiterated that
the proposed order would implement a Commission policy “decision”
(Notice 2016-37, Joint Appeal Book, vol. 1, Tab F, p. 37).
[24]
These arguments are far from determinative, for
several reasons. First of all, the Commission also refers to the proposed
change as a “statement of intent” or a “policy determination” (see, for example, the Second
Policy, Joint Appeal Book, vol. 1, Tab G, pp. 47-49 at paras. 20 and 27). More
importantly, it is the substance and the effect of the impugned “decision” that is of relevance, as opposed to the
choice of words used by the Commission to refer to it.
[25]
It is interesting to note that the Commission
itself considered the arguments made by the NFL in response to its Call for
comments on the proposed Simultaneous Programming Service Deletion and
Substitution Regulations (Call for comments on the Substitution
Regulations) to be premature, to the extent that it had not yet issued an
order excluding the Super Bowl from the simultaneous substitution regime
(Second Policy, Joint Appeal Book, vol. 1, Tab G, p. 48 at para. 26). As a
matter of fact, the policy reform proposed by the Commission has no direct,
immediate or legal effect on the appellants unless and until they are formally
implemented through regulation or order. The Broadcasting Act clearly
stipulates that statements and guidelines made by the Commission on any matter
within its jurisdiction are not binding on the Commission (Broadcasting Act,
s. 6). This is to be contrasted with section 7 of the same Act,
according to which directions of general application on broad policy matters
issued by the Governor in Council are binding on the Commission.
[26]
This Court has held in a previous decision that
policy guidelines issued by the Commission, albeit in the context of the Telecommunications
Act, S.C. 1993, c. 38 (the Telecommunications Act), cannot be
assimilated to “decisions” (see Canadian
Institute of Public and Private Real Estate Co. v. Bell Canada, 2004 FCA
243, [2004] F.C.J. No. 1103 [Canadian Institute]). In that case, the
Commission imposed a condition on all local exchange carriers providing local
telephone services to customers in multi-dwelling units (MDU), but expressly
declined to impose such conditions on the private owners of MDUs. Instead, it
set out guidelines that should assist parties in their negotiation of access
arrangements on the basis of just and expedient conditions, and stated that if
negotiations did not succeed it would take such further action as is appropriate,
and if necessary make an order. The Court agreed with the respondents that
policy guidelines issued by the Commission are not “decisions”
within the meaning of subsection 64(1) of the Telecommunications Act,
which is substantially to the same effect as subsection 31(2) of the Broadcasting
Act. The Court wrote:
Subsection 64(1) of the Act provides a right
of appeal from a “decision” of the CRTC on questions of law or jurisdiction
with the leave of this Court. The Order of this Court granting leave to appeal
was made without prejudice to the respondents’ right to argue that this Court
does not have the jurisdiction to hear the appeal and that the appeal was
premature. In our opinion, this Court does not have the jurisdiction to hear
this appeal because the statements by the CRTC regarding its jurisdiction in
future cases do not constitute a “decision” within the meaning of subsection
64(1) of the Act. The CRTC has not imposed any binding conditions or orders
affecting the legal rights of private owners of MDUs. (…) It has simply stated,
that, depending on the circumstances, it would be prepared to make such an
order in the future. It did not articulate in which circumstances an order
would be appropriate nor the terms that would be included in a particular order.
Canadian Institute, para. 5
[27]
Counsel for Bell submits that the case at bar
can be distinguished from Canadian Institute because the Commission
itself has stated that it has made a decision on the matters that are the
subject of the appeal. It is true that the Commission appears to have made up
its mind and to be set on implementing its policy decision. Until it has done
so, however, it is of no consequence with respect to this proceeding. The
Commission itself has made it very clear on more than one occasion that its
policy determinations will be implemented through regulation or order (see, for
example, Notice 2015-330, Joint Appeal Book, vol. 1, Tab H at pp. 54 and
56; Bulletin 2015-329, Joint Appeal Book, vol. 1, Tab I at pp. 65
and 69).
[28]
The rationale underlying Canadian Institute
is that, at least for the purposes of subsection 64(1) of the Telecommunications
Act (and, by extension, of subsection 31(2) of the Broadcasting Act),
a decision is characterized by the imposition of “binding
conditions or orders affecting the legal rights” of a party. Put
otherwise, a statement about how an administrative decision-maker intends to
act in the future has no legal effect. The cases relied upon by Bell in support
of its argument do not detract from that principle and indeed underscores the
general rule that decisions and orders must be final in nature to be considered
by courts of law (see Brink’s Canada Ltd. v. Canada (Human Rights
Commission), [1996] 2 F.C.R. 113at paras. 46 and 51, 105 F.T.R. 215 (F.C.T.D.);
Ipsco Inc. v. Sollac, Aciers d’Usinor, 1999 CarswellNat 1026 at para. 4,
1999 CanLII 8080 (F.C.A.); Wilson v. Atomic Energy of Canada Limited,
2015 FCA 17 at paras. 24-41, [2015] 4 F.C.R. 467; Tomen v. Ontario Teachers’
Federation, 1994] O.J. No. 1585 at para. 26, 19 O.R. (3d) 371 (Gen. Div.).
In fact, policy “decisions” of the Commission, like
the First Policy, share many of the characteristics of White Papers, whereby
governments present their policy preferences before tabling legislation and
seek reactions from stakeholders and all those affected by the contemplated
policy change. These are clearly not justiciable, and the same goes for the
impugned policies of the Commission insofar as they have not been implemented
by regulation or order.
[29]
There are also sound policy reasons for this
Court not to intervene at such an early stage of the process. First, as
submitted by the respondent, the Court does not have the full record to assess
the scope of the Commission’s authority. It is to be expected that the Commission,
as a result of its Call for comments on the Super Bowl under Notice
2016-37, will refine its analysis and offer its rationale to support
whatever order it may come up with after considering the appellants’ arguments.
This Court should defer to Commission’s expertise, experience and reasoning
before coming to its own conclusions on the validity of such an order (see Forest
Ethics Advocacy Association v. Canada (National Energy Board), 2014 FCA 245
at paras. 42-44, [2015] 4 F.C.R. 75). The process should follow its course and
the appellants should not be allowed to sidestep it by bringing what amounts
for all intents and purposes to a request for a judicial opinion. The
Commission has the authority pursuant to section 17 of the Broadcasting Act
to determine questions of law, which extends to resolving questions about its
own jurisdiction. I would therefore agree with the respondent that this Court should
have before it the Commission’s own analysis of the appellants’ arguments for
the proper exercise of its appellate functions.
[30]
Moreover, the history of this proceeding shows
that much could still happen before the Commission actually implements its
policy decision. As previously mentioned, the Commission first announced its
intention to eliminate simultaneous substitution for the Super Bowl by way of
an amendment to the Distribution Regulations (see First Policy, Joint
Appeal Book, vol. 2, Tab 3, p. 243 at paras. 22-23). Then, the Commission
reversed its course and announced that simultaneous substitution would be
eliminated for the Super Bowl through an order pursuant to paragraph 9(1)(h)
of the Broadcasting Act (see Second Policy, Joint Appeal Book,
vol. 1, Tab G, p. 48 at para. 27).
[31]
Counsel for Bell counters that the Commission
has not sought comments on the substantive decision that it made, but only on
the text of the proposed distribution order regarding simultaneous substitution
for the Super Bowl. While this is no doubt true, strictly speaking, it would
not preclude the Commission from deciding not to pursue its course of action,
or alternatively from altering the order to either broaden its scope (e.g., to
capture other types of events) or to make it effective only at the expiry of
the agreement between the NFL and Bell. The result of the consultation should
not be prejudged, and the administrative process should follow its course
before the Court is called upon to adjudicate what may well turn out to be a
moot issue. This is not only more respectful of the specialized body put in
place by Parliament to oversee the regulatory regime applying to a complex
field of activity, but it is also a better use of scarce judicial resources.
[32]
Bell also submitted that the appellants will be
left without any effective means of challenging the policy decisions of the
Commission if this appeal is dismissed for being premature. Again, this
argument is premised on the notion that there are two distinct decisions being
made by the Commission, the first one being the policy determination and the
second one being its implementation by order or otherwise. Yet, as I have tried
to demonstrate in the preceding paragraphs of these reasons, this is all part
of an ongoing process that will eventually culminate with the enactment of an
order. I fail to see how Bell could be estopped from appealing such an order,
should one come to be made, especially in light of this appeal being dismissed
(with respect to the simultaneous substitution for the Super Bowl) on the basis
of it being premature.
[33]
The NFL also argued that this appeal will be
moot if the validity of an order prohibiting simultaneous substitution for the
Super Bowl is not decided before the next Super Bowl in February 2017. It is
obviously in the interest of all potentially affected parties that the
Commission arrives at a final decision long before February 2017 to allow for a
timely application for leave to appeal. In any event, and as conceded by
counsel for the NFL, a motion for a stay and for an expedited hearing could be
filed before this Court if time was of the essence.
[34]
For all of the foregoing reasons, I am of the
view that an appeal does not lie pursuant to subsection 31(2) of the Broadcasting
Act with respect to what was, at the time of the hearing, an anticipated
proposed distribution order or regulation prohibiting simultaneous substitution
for the Super Bowl. The Court has been informed that, subsequent to the hearing
of this matter, the Commission released on August 19, 2016 its Broadcasting
Regulatory Policy CRTC 2016-334 and Broadcasting Order CRTC 2016-335.
Pursuant to paragraph 9(1)(h) of the Broadcasting Act, the
Commission issued a distribution order through which simultaneous substitution
will no longer be authorized for the Super Bowl, effective January 1, 2017. The
panel, however, is not seized of that Order and ought not to express any views
as to its legality.
[35]
The same reasoning applies with even more
strength concerning the policy determination to disallow simultaneous
substitution for the benefit of specialty channels. In its Notice of Appeal in
file number A-231-15, Bell submits that it was denied procedural fairness as a
result of the Commission’s failure to give it notice of the prohibitions that
it proposed to implement with respect to specialty channels and its
after-the-fact imposition of a burden of proof on broadcasters and BDUs to show
that simultaneous substitution continues to have merit. I note that this ground
of appeal was not raised by Bell in file number A-67-16.
[36]
It would be most inappropriate to assess the
adequacy of a consultation process before it has even been completed. In its
First Policy, the Commission disclosed its view that BDUs should no longer be
allowed to provide simultaneous substitution for specialty services, and
indicated that it will amend the Distribution Regulations accordingly
(First Policy, Joint Appeal Book, vol. 2, Tab G, p. 47 at para. 18). Under the
heading “Implementation”, it also stated that it
will issue a notice of consultation seeking comment on the text of proposed
amendments to the Distribution Regulations required to enact the policy
changes in that decision. As mentioned previously, a Call for comments on
the Super Bowl was eventually made on a proposed distribution order
prohibiting simultaneous substitution for the Super Bowl, but no such
consultation has been launched so far with respect to proposed amendments to
the Distribution Regulations designed to implement a policy change
relating to simultaneous substitution for specialty channels. As a result, we
are even further removed from the implementation of this policy change than we
are from the implementation of an order prohibiting simultaneous substitution
for the Super Bowl.
[37]
In any event, although this is not strictly
necessary given my views on prematurity, I would venture to add that there has
been no breach of procedural fairness by the Commission. Applying the factors
developed in Baker v. Canada (Minister of Citizenship and Immigration),
[1999] 2 S.C.R. 817 at paras. 23-28, 174 D.L.R. (4th) 193 to determine the
content of procedural fairness obligations in a particular context, I am of the
view that the requirements are minimal in the circumstances of the present
case. The “decision” to be made by the
Commission is in the nature of a policy “decision”,
which calls for the exercise of considerable discretion and the consideration
of multiple polycentric factors. This is not the kind of decision that
typically attracts a high level of procedural fairness. Bell was entitled to
have its views heard and taken into account, but had no legitimate expectation of
a particular outcome.
[38]
Having carefully reviewed the record, it is
clear that Bell was given fair notice that the entire practice of simultaneous
substitution was up for discussion, and was made aware of the concerns raised
by Canadians during Phase I and II of the Let’s Talk TV consultation process. Prior
to the public hearing that commenced on September 8, 2014, the Commission
summarized those concerns and specifically referenced Canadians’ preference for
seeing American commercials during the Super Bowl (see Notice 2014-190 at
paras. 54-61). With respect to the elimination of simultaneous substitution for
specialty services and to the institution of a remedial regime, it appears from
the transcript that the issue was specifically raised by the Commission during
Bell’s presentation (see Transcript of Bell’s Oral Submissions, paras.
5329-5341 and 5358, Joint Appeal Book, vol. 11, Tab 69, pp. 3392-3393). It
cannot be said, therefore, that Bell was not given notice of the issues
examined by the Commission and of the potential remedies that were being
considered. Bell was provided every opportunity to make representations and to
alert the Commission of the foreseeable impacts of its decision, and was in no
way precluded from doing so merely because the Commission did not spell out all
the conceivable outcomes of the consultation.
B.
Does the Commission lack jurisdiction to enact a
remedial regime for simultaneous substitution errors?
[39]
Turning to the second appeal of Bell concerning
the promulgation of the Substitution Regulations, it is well established
that regulations, just like statutes, benefit from a presumption of validity.
As a result, it is for the appellants to demonstrate the invalidity of the
challenged regulation, and the Court will prefer, to the extent possible, the
construction of the regulation that will render it intra vires (see Katz
Group Canada Inc. v. Ontario (Health and Long-Term Care), 2013 SCC 64at
paras. 25-26, [2013] 3 S.C.R. 810; John Mark Keyes, Executive Legislation,
2d ed. (Markham: LexisNexis, 2010), at pp. 544-550 [Keyes, Executive
Legislation]; Donald J.M. Brown and John M. Evans, Judicial Review of
Administrative Action in Canada, loose-leaf (Toronto: Cavasback Publishing,
2009) at 15:3200 and 15:3230. Needless to say, the economic or political
underpinnings of a regulation do not form part of the inquiry to be conducted
by this Court in assessing its validity, nor does the likelihood of its success
in achieving its stated objectives (Thorne’s Hardware Ltd. v. The Queen,
[1983] 1 S.C.R. 106 at pp. 112-113, 143 D.L.R. (3d) 577; CKOY Ltd. v. The
Queen, [1979] 1 S.C.R. 2 at p. 12, 90 D.L.R. (3d) 1 [CKOY]; Keyes, Executive
Legislation at p. 266).
[40]
Bell argues that the Commission has no
jurisdiction to impose penalties or require the payment of monetary rebates to
compensate for errors made during the simultaneous substitution process. The
Attorney General has conceded that subsection 18(3) of the Broadcasting Act,
pursuant to which the Commission may “issue any
decision (…) in connection with any complaint or representation made to the
Commission or in connection with any other matter within its jurisdiction under
[the] Act” is not sufficient to ground the validity of the remedial
regime enacted by the Commission. This type of “basket
clause” is informed by the statutory context in which it is found, as
submitted by Bell; although section 18 addresses hearings and procedure before
the Commission, it has nothing to do with penalties or rebates. A matter must
otherwise be within the jurisdiction of the Commission before it can exercise
its authority to hear and decide a complaint.
[41]
Bell further contends that the power to impose
remedies such as penalties and rebates must be conferred explicitly by
Parliament to the Commission, as is the case in the Telecommunications Act
at sections 72-001 to 72.2. No such power is found in the Broadcasting Act,
according to Bell. Pursuant to section 12 of the Broadcasting Act, the
Commission is only empowered to issue an order requiring or forbidding a person
to do any act or thing that the person is required or forbidden to do under the
Act; such an order may be made and enforced as an order of the Federal
Court or of any superior court of a province, and is enforceable in the same
manner as an order of that court (see s. 13 of the Broadcasting Act).
The contravention of a regulation or an order is also a summary conviction
offence pursuant to subsection 32(2) of the Broadcasting Act.
These are the only penalties explicitly provided for in the Act.
[42]
Whether the Commission has the authority to
enact the remedial regime at stake in the case at bar is to be decided on a
standard of reasonableness. Despite Bell’s argument to the contrary, it is
beyond dispute, in my view, that deference is owed to an administrative body’s
interpretation of its home statute. Not only has this principle been firmly
established by the Supreme Court in Dunsmuir v. New Brunswick, 2008 SCC
9 at para. 54, [2009] 1 S.C.R. 190 and reiterated ever since (see, for example,
Smith v. Alliance Pipeline Ltd, 2011 SCC 7 at para. 28, [2011] 1 S.C.R.
160; Alberta (Information and Privacy Commissioner) v. Alberta Teachers’
Association, 2011 SCC 61 at para. 30, [2011] 3 S.C.R. 654; McLean v.
British Columbia (Securities Commission), 2013 SCC 67 at para 33, [2013] 3
SCR 895), but this Court has confirmed in Bell Canada v. Amtelecom Limited
Partnership, 2015 FCA 126 at paras. 37-39 that the expertise of the
Commission extends to the delineation of its own jurisdiction in applying its
home statutes. Accordingly, this Court shall only intervene if the Commission’s
construction of its delegated powers falls outside the range of possible and
acceptable outcomes.
[43]
There is a long-standing principle that a
pecuniary burden cannot be imposed on a person except upon clear and distinct
legal authority (Liverpool Corp. v. Arthur Maiden Ltd., [1938] 4 All E.R.
200; Canadian Cable Television Association v. American College Sports
Collective of Canada Inc., [1991] 3 F.C. 626, [1991] F.C.J. No. 502 (F.C.A.).
This is precisely why administrative monetary penalties schemes, such as the
one found in the Telecommunications Act at sections 72.001 to72.2, are
explicitly authorized by statute (see generally Law Reform Commission of
Saskatchewan, Administrative Penalties: A Consultation Paper (June
2009), citing a number of pieces of legislation containing such schemes,
including The Securities Act, 1988, S.S. 1988-89, c. S-42.2; Securities
Act, R.S.O. 1990, c. S.5; The Saskatchewan Insurance Act, R.S.S.
1978, c. S-26; The Trust and Loan Corporations Act, 1997, S.S. 1997, c.
T-22.2; and The Alcohol and Gaming Regulation Act, 1997, S.S. 1997, c.
A-18.011).
[44]
The Commission, in its various decisions, and
the Attorney General, in its written and oral submissions, contend that the
remedial regime set out in its Substitution Regulations is not punitive
but rather aims only to serve the public interest and to further the policy
objectives of the Broadcasting Act. In Bulletin 2015-329,
the Commission stated that the forthcoming amendments to the simultaneous
substitution regime were meant “to ensure that the
policy objectives of the Act continue to be achieved”, and that they
were “not intended to be punitive”. It added
that “their sole purpose is to provide a remedy to
particular members of the broadcasting system in order to make sure that the
system, as a whole, continues to achieve the objectives of the Act…” (see
Bulletin 2015-329, Joint Appeal Book, vol. 1, Tab I, pp. 66-67).
[45]
In its Second Policy announcing that it had made
the Substitution Regulations, the Commission reiterated that the
simultaneous substitution regime generally fulfills an important role in
achieving the policy objectives of the Act, and added that recurring
substantial errors in the manner in which the regime is carried out “jeopardize[s] the integrity of the simultaneous substitution
regime as a whole” along with “its ability to
contribute to the policy objectives of the Act as a whole”. It added:
With respect to section 4(3) of the
Regulations regarding the loss of the right to request simultaneous
substitution, as noted earlier the current simultaneous substitution regime
already includes the provision that the Commission may order that simultaneous
substitution not be performed where it finds that to do so would not be in the
public interest.
As regards section 5(2) of the Regulations
relating to compensation for customers, this requirement is necessary to ensure
that the harm to the broadcasting system can be remedied. Therefore, by making
these Regulations, the Commission is not creating a new power or imposing a new
rule. Instead, it is simply modifying the existing simultaneous substitution
regime where necessary to ensure that it continues to fulfill the policy
objectives of the Act. The revisions are remedial and are not equivalent to
AMPs [administrative monetary penalties].
Second Policy, Joint Appeal Book, vol. 1,
Tab G, p.48 at paras. 24-25
[46]
Are these statements a sham or a smoke-screen? I
do not believe so. Courts ought to presume that an administrative and regulatory
body like the Commission is genuine and transparent in publicly stating the
rationale behind the exercise of its purported powers. In the case at bar,
there is nothing to suggest that the Commission is trying to achieve through
the back door what it could not do explicitly or more directly. Moreover, the
removal of a broadcaster’s simultaneous substitution privileges and the amount
of compensation to be paid by a BDU to its customers will be determined in an
administrative and regulatory context, in the course of a proceeding under
subsection 18(3) of the Broadcasting Act, and not in a criminal
or quasi-criminal setting. As this Court has indicated in Genex
Communications Inc. v. Canada (A.G.), 2005 FCA 283 at para. 166, [2005]
F.C.J. No. 1440, the purpose of a public hearing conducted pursuant to
subsection 18(3) is not to determine for punitive purposes whether a licensee has
committed one or more offences, but rather to find out whether it is
appropriate to take one of the courses of action enumerated in subsection 18(1)
(which includes the making of an order under subsection 12(2)), in the public
interest and in compliance with Charter values and the implementation of
broadcasting policy in Canada. It is also to be noted that monetary rebates
that BDUs may be ordered to make as compensation are to be paid to the
customers, and not to the regulator or to the government. I agree with the
Attorney General that this indicia supports the conclusion that the measure is
remedial as opposed to punitive.
[47]
At the end of the day, I am of the view that the
remedial regime put in place by the Commission is more properly characterized
as a necessary adjunct or an implied complement to the broad powers bestowed
upon it to accomplish Parliament’s objectives. Indeed, a careful reading of the
Broadcasting Act confirms the broad scope and the wide discretion
of the powers conferred on the Commission to implement Canadian broadcasting
policy. As the Supreme Court stated in Reference re Broadcasting Regulatory
Policy CRTC 2010-167 and Broadcasting Order CRTC 2010-168, 2012 SCC 68 at
para. 15, [2012] 3 S.C.R. 489 [Reference re Broadcasting]:
There is no doubt that the licensing and the
regulation-making powers granted to the CRTC are broad. The Broadcasting Act
describes the mission of the CRTC as regulating and supervising “all aspects of
the Canadian broadcasting system with a view to implementing the broadcasting
policy set out in subsection 3(1)”(s. 5(1))”.
[48]
Viewed in that perspective, the powers of the
Commission are indeed as broad as they can be. The policy objectives listed
under subsection 3(1) of the Broadcasting Act, although focused on the
content of programming, also capture a number of economic considerations,
especially as they relate to BDUs. That being said, and as broad as they are,
these policy objectives cannot be the test for the Commission’s jurisdiction
and will not be sufficient in and of themselves to ground a regulation.
Responding to an argument made in reliance of a statement in CKOY
according to which the validity of a regulation must be assessed by determining
whether it deals with a class of subjects referred to in section 3 of the Broadcasting
Act, the Supreme Court had this to say:
…CKOY cannot stand for the
proposition that establishing any link, however tenuous, between a proposed
regulation and a policy objective in s. 3 of the Act is a sufficient
test for conferring jurisdiction on the CRTC. Such an approach would conflict
with the principle that policy statements circumscribe the discretion granted
to a subordinate legislative body.
Reference re Broadcasting at para. 25 [emphasis in the original]
[49]
It is therefore to section 10 of the Broadcasting
Act, which grants the Commission its delegated authority to make
regulations, that the Court must turn to in order to assess the validity of any
given regulation adopted by the Commission. This is not to say that the
broadcasting policies and objectives enumerated at section 3 of the Broadcasting
Act must be totally disregarded and cannot be taken into account in
determining the breadth of the regulatory powers conferred upon the Commission;
as the Supreme Court recognized in Reference re Broadcasting, Parliament
must be presumed to have empowered the Commission to work towards implementing
these objectives. When all is said and done, the challenge for the Court is
always to breathe flexibility into the regulation-making powers of the
Commission while avoiding to broaden them beyond Parliament’s intent. As the
Supreme Court aptly cautioned in Bell Canada v. Canada (Canadian
Radio-Television and Telecommunications Commission), [1989] 1 S.C.R. 1722
at p. 1756, 60 D.L.R. (4th) 682:
The powers of any administrative tribunal
must of course be stated in its enabling statute but they may also exist by
necessary implication from the wording of the act, its structure and its
purpose. Although courts must refrain from unduly broadening the powers of such
regulatory authorities through judicial law-making, they must also avoid
sterilizing these powers through overly technical interpretations of enabling
statutes.
See also ATCO Gas & Pipelines Ltd v.
Alberta (Energy & Utilities Board), 2006 SCC 4 at paras. 50-51 and 73, [2006]
1 S.C.R. 140; R. v. 974649 Ontario Inc., 2001 SCC 81 at para. 70, [2001]
3 S.C.R. 575
[50]
I agree with counsel for the Attorney General that
paragraphs 10(1)(c) and 10(1)(g) of the Broadcasting Act
provide a clear legal foundation for the remedial regime implementing
consequences for disruptive simultaneous substitution errors. Pursuant to these
provisions, the Commission has the authority to enact regulations “respecting” standards of programs and the carriage of
programming services by BDUs. The Broadcasting Act couches these
powers broadly, thereby empowering the Commission to ensure that the objectives
set out in section 3 will be met. It is not too great a stretch to consider
that if programming is not provided to subscribers in a manner that allows them
to view that programming in its entirety and free from repetition errors, the
Canadian broadcasting system will not achieve its stated purposes, which call
upon the Commission to “safeguard, enrich and
strengthen the cultural, political, social and economic fabric of Canada”
(Broadcasting Act, subpara. 3(1)(d)(i)) and to “provide efficient delivery of programming at affordable
rates, using the most effective technologies available at reasonable cost”
(Broadcasting Act, subpara. 3(1)(t)(ii)).
[51]
As if this was not sufficient, Parliament has
expanded even more broadly the scope of the Commission’s regulatory powers by
enacting that it may make regulations “respecting such
other matters as it deems necessary for the furtherance of its objects”
(Broadcasting Act at para. 10(1)(k)). This subjective language
clearly signals Parliament’s intent to confer upon the Commission a wide margin
of appreciation and discretion in its regulation-making function, and courts
have consistently held that such language significantly narrows down the scope
of judicial intervention. As Elmer A. Driedger wrote:
A wider authority is conferred if a
subjective test of necessity is prescribed. Thus, power may be conferred on the
Governor in Council to make such regulations as he deems necessary
(advisable, expedient) for carrying out the purposes of the Act. In such a
case, … the regulation-making authority is the sole judge of necessity and the
courts will not question his decision, except possibly if bad faith were
established. There is, therefore, a vast difference between the two following examples
in the extent of the power conferred:
May make such regulations as may
be necessary for carrying out the provisions of this Act. May make such
regulations as he deems necessary for carrying out the provisions of
this Act.
…
Even greater authority is conferred by
authorizing a delegate to make such regulations as he deems necessary
for a stated purpose…
Elmer A. Driedger, “Subordinate
Legislation” (1960) 38 Can. B. Rev. 1 at pp. 28-29 [emphasis in the original],
as quoted in Aves v. Nova Scotia (Public Utilities Board) (1973), 39
D.L.R.(3d) 266 at paras. 25-26, 5 N.S.R. (2d) 370(N.S. C.A.). See also: Apotex
Inc. v. Canada (Attorney General), [2000] 4 F.C. 264 at para. 66, [2000]
F.C.J. No. 634(F.C.A.); Teal Cedar Products (1977) Ltd. v. Canada (C.A.),
[1989] 2 F.C. 158 at paras. 15-16, 13 A.C.W.S. (3d) 140 (F.C.A.); Keyes,
Executive Legislation at pp. 322 and 328
[52]
I am mindful of the fact that, broad as it may
be, the regulation enacted pursuant to paragraph 10(1)(k) must have a
rational and plausible connection with the objectives of the Broadcasting Act.
In the case at bar, I am prepared to accept that such a link has been
established. The regulation adopted to address issues relating to simultaneous
substitution comes as a result of an extensive consultation with Canadians. As
reported by the Commission, there appears to be ongoing frustration with the
frequency of errors made during the simultaneous substitution process. While
recognizing that this process is still of significant benefit to Canadian
broadcasters, allowing them to benefit from a greater return on their
programming rights and thereby to invest more in the production of Canadian
programming, the Commission determined that some measures had to be taken to
ensure the integrity of the simultaneous substitution regime itself and the fulfillment
of the policy objectives of the Broadcasting Act as a whole. There is
nothing in this rationale that strikes me as being too far removed from the
true objectives of the Broadcasting Act; quite to the contrary,
the remedial regime appears to be a calibrated response to what the Commission
found to be a real deficiency in the broadcasting system, and it therefore
falls squarely within the ambit of its regulation-making authority pursuant to
paragraph 10(1)(k) of the Broadcasting Act.
[53]
Furthermore, I agree with Bell that a broadly
drafted basket clause such as paragraph 10(1)(k), cannot be read in
isolation, but rather must be taken in context with the rest of the section in
which it is found, as stated by the Supreme Court in Reference re
Broadcasting at paragraph 29. However, the case at bar may be distinguished
from that decision of the Supreme Court in that a number of the specific fields
for regulation set out in subsection 10(1) do pertain to simultaneous
substitution and the creation of an afferent enforcement regime. In my view,
the Supreme Court’s statement in Reference re Broadcasting should not be
read as voiding of any meaning all open-ended provisions such as paragraph
10(1)(k). It simply stood for the proposition that a provision “is enriched by the rest of the section in which it is found”,
which is a simple restatement of the modern interpretive approach. In a case
such as the present, where other sections can be read as supporting an
administrative decision-maker’s authority to enact envisaged measures, a basket
clause should only reinforce such authority.
IV.
Conclusion
[54]
For all of the foregoing reasons, I am therefore
of the opinion that the remedial regime set out in the Second Policy has been
validly adopted, and that the appeals should be dismissed.
[55]
The parties have advised the Court that they are
not seeking costs.
"Yves de Montigny"
“I agree
Johanne
Gauthier J.A.”
“I agree
Richard Boivin J.A.”
Email this Content