Docket: A-337-13
Citation:
2015 FCA 126
CORAM:
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NOËL C.J.
PELLETIER J.A.
SCOTT J.A.
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BETWEEN:
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BELL CANADA, BELL MOBILITY INC., MTS INC., NORTHERNTEL, LIMITED
PARTNERSHIP, ROGERS COMMUNICATIONS PARTNERSHIP, SASKATCHEWAN
TELECOMMUNICATIONS, TÉLÉBEC, SOCIÉTÉ EN COMMANDITE and TELUS COMMUNICATIONS
COMPANY
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Appellants
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and
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AMTELECOM LIMITED PARTNERSHIP, BRAGG COMMUNICATIONS INC., DATA
& AUDIO-VISUAL ENTERPRISES WIRELESS INC., GLOBALIVE WIRELESS MANAGEMENT
CORP., HAY COMMUNICATIONS CO-OPERATIVE LIMITED, HURON TELECOMMUNICATIONS
CO-OPERATIVE LIMITED, MORNINGTON COMMUNICATIONS CO-OPERATIVE LIMITED, NEXICOM
MOBILITY INC., NORTHWESTEL INC., PEOPLE’S TEL LIMITED PARTNERSHIP, PUBLIC MOBILE
INC., QUADRO COMMUNICATIONS CO-OPERATIVE INC., QUEBECOR MEDIA INC., SOGETEL
MOBILITÉ INC., THUNDER BAY TELEPHONE, VAXINATION INFORMATIQUE, CONSUMERS’
COUNCIL OF CANADA, DIVERSITYCANADA FOUNDATION, MEDIA ACCESS CANADA, MOUVEMENT
PERSONNE D’ABORD DU QUÉBEC, PUBLIC INTEREST ADVOCACY CENTRE, CONSUMERS’
ASSOCIATION OF CANADA, COUNCIL OF SENIOR CITIZENS’ ORGANIZATIONS OF BRITISH
COLUMBIA, OPENMEDIA.CA, SERVICE DE PROTECTION ET D’INFORMATION DU
CONSOMMATEUR, UNION DES CONSOMMATEURS, CANADIAN WIRELESS TELECOMMUNICATIONS
ASSOCIATION, COMMISSIONER FOR COMPLAINTS FOR TELECOMMUNICATIONS SERVICES
INC., COMPETITION BUREAU OF CANADA, GLENN THIBEAULT, HER MAJESTY THE QUEEN IN
RIGHT OF ALBERTA, GOVERNMENT OF MANITOBA, GOVERNMENT OF THE NORTHWEST
TERRITORIES, HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, ATTORNEY GENERAL OF
QUEBEC, GOVERNMENT OF YUKON, OFFICE OF THE PRIVACY COMMISSIONER OF CANADA,
CATHERINE MIDDLETON, TAMARA SHEPHERD, LESLIE REGAN SHADE, KIM SAWCHUK,
BARBARA CROW, SHAW TELECOM INC., TERRY DUNCAN, GLENN FULLERTON, TANA
GUINDEBA, NASIR KHAN, MICHAEL LANCIONE, ALLAN MUNRO, FREDERICK A. NAKOS,
RAINER SCHOENEN and DANIEL SOKOLOV
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Respondents
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REASONS FOR
JUDGMENT
PELLETIER J.A.
[1]
On June 3, 2013, the Canadian Radio-television
and Telecommunications Commission (CRTC) issued Telecom Regulatory Policy CRTC
2013-271 (the Wireless Code or the Code) which it described as “a mandatory code of conduct for providers of retail wireless
voice and data services”. The Code dealt with a number of consumer
concerns with respect to wireless services including the opacity of wireless
service contracts, excessive charges for data overages and data roaming, and
early cancellation charges. The Code imposes a number of mandatory terms in
future contracts between consumers and the appellants.
[2]
The aspect of the Code which gives rise to the
present appeal is the coming into force of these provisions. The Code provides
that it will take effect on December 2, 2013, and will apply to all new or
amended wireless service contracts offered from that day forward. However, and
herein lies the rub, the Code goes on to stipulate that it will apply to all
contracts, no matter when they were concluded, as of June 3, 2015 (the
drop-dead date).
[3]
The drop-dead date is a problem because there
are a large number of three-year contracts which will not have matured by June
3, 2015. Should wireless customers take advantage of the Code by cancelling
these contracts before their maturity date, the appellants (the wireless
service providers) will be unable to collect early cancellation fees on those
contracts even though they may not have fully recovered any incentives offered
to consumers to enter into those contracts, incentives which usually took the
form of discounted equipment prices.
[4]
A number of the affected wireless service
providers (i.e. cell phone companies) have challenged the CRTC’s imposition of
a drop-dead date on the ground that it is beyond the CRTC’s jurisdiction to
make retrospective rules or to interfere with vested rights.
[5]
For the reasons that follow, I would dismiss the
appeal with costs.
I.
LEGAL AND FACTUAL MATRIX
[6]
The CRTC is a creation of the Canadian
Radio-television and Telecommunications Commission Act, R.S.C., 1985, c.
C-22. The powers of the CRTC are set out in various pieces of legislation,
including the Telecommunications Act, S.C. 1993, c. 38 (the Act).
Broadly speaking, it is charged with the regulation of the telecommunications
industry in Canada. Pursuant to section 34 of the Act, the CRTC has the power
to refrain from the exercise of its regulatory mandate in relation to a
telecommunications service or a class of service “where
the Commission finds as a question of fact that to refrain would be consistent
with the Canadian telecommunications policy objectives.” Historically,
the CRTC has chosen not to regulate the wireless communications industry.
[7]
In 2012, the CRTC undertook a public
consultation to determine if conditions in the wireless industry had changed so
that its policy of forbearance should be reviewed. Following that consultation,
it concluded that it need not embark upon regulation of wireless rates but
that, in response to broad consumer dissatisfaction with various terms of
service, it should promulgate a code of conduct for wireless service providers.
The CRTC found its power to do so in s. 24 of the Act and in the
objectives of Canada’s telecommunications policy, as articulated in paragraphs
7(a), (b), (f), and (h) of the Act: see Telecom
Decision CRTC 2012-556, at paragraphs 22-27. The provisions relied upon by
the CRTC are reproduced below for ease of reference:
24. The offering
and provision of any telecommunications service by a Canadian carrier are
subject to any conditions imposed by the Commission or included in a tariff
approved by the Commission.
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24. L’offre et la
fourniture des services de télécommunication par l’entreprise canadienne sont
assujetties aux conditions fixées par le Conseil ou contenues dans une
tarification approuvée par celui-ci.
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7. It is hereby
affirmed that telecommunications performs an essential role in the
maintenance of Canada’s identity and sovereignty and that the Canadian
telecommunications policy has as its objectives
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7. La présente
loi affirme le caractère essentiel des télécommunications pour l’identité et
la souveraineté canadiennes; la politique canadienne de télécommunication
vise à :
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(a) to facilitate
the orderly development throughout Canada of a telecommunications system that
serves to safeguard, enrich and strengthen the social and economic fabric of
Canada and its regions;
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a) favoriser le
développement ordonné des télécommunications partout au Canada en un système
qui contribue à sauvegarder, enrichir et renforcer la structure sociale et
économique du Canada et de ses régions;
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(b) to render
reliable and affordable telecommunications services of high quality
accessible to Canadians in both urban and rural areas in all regions of
Canada;
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b) permettre
l’accès aux Canadiens dans toutes les régions — rurales ou urbaines — du
Canada à des services de télécommunication sûrs, abordables et de qualité;
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(f) to foster
increased reliance on market forces for the provision of telecommunications
services and to ensure that regulation, where required, is efficient and
effective;
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f) favoriser le
libre jeu du marché en ce qui concerne la fourniture de services de
télécommunication et assurer l’efficacité de la réglementation, dans le cas
où celle-ci est nécessaire;
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(h) to respond to
the economic and social requirements of users of telecommunications services;
and
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h) satisfaire les
exigences économiques et sociales des usagers des services de
télécommunication;
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[8]
Following extensive consultations with the
public and the industry, the CRTC developed the Wireless Code. It addresses a
number of issues but the relevant ones, for our purposes, are early
cancellation charges and the coming into force of the Code itself.
[9]
The CRTC noted in the Code that consumers
considered that three year contracts combined with early cancellation charges
made it difficult for them to change wireless service providers and to keep up
with technological change. The CRTC concluded that consumers should be able to
switch wireless service providers, upgrade devices and take advantage of
competitive offers every two years “in order to
contribute to a more dynamic marketplace and to enable consumers to take
advantage of technological advances”: Wireless Code at paragraph 216.
[10]
The CRTC went on to conclude that the
fundamental barrier to consumers taking advantage of competitive offers every
two years was not the use of three year contracts but the high early
cancellation fees: Wireless Code at paragraph 217. This led it to conclude that
“early cancellation fees must be significantly limited
to empower consumers to take advantage of competitive offers and technological
advances at least every two years”: Wireless Code at paragraph 218. The
CRTC went on to find that it was appropriate to limit the period over which
early cancellation fees would be payable to 24 months which, in the CRTC’s
view, would minimize the costs of switching wireless service providers and
ultimately result in a more competitive marketplace.
[11]
Insofar as the calculation of early cancellation
fees is concerned, the CRTC found that the relevant factors were (1) whether a
mobile device is offered at a reduced price as part of the contract (“a subsidized device”) and (2) whether the contract is
for a fixed term or an indefinite term. When the CRTC’s conclusions with
respect to early cancellation fees are applied to various combinations of
factors (1) and (2), the result is the formula for calculation for early
cancellation fees set out at paragraph 234 of the Code, reproduced below for
ease of reference:
234. If a customer cancels a contract before the end of the commitment
period, a WSP [wireless service provider] must not charge the customer any fee
or penalty other than the early cancellation fee, which must be calculated in
the manner set out below:
(i) When a subsidized device is provided as part of the contract
a) for fixed-term contracts: The early
cancellation fee must not exceed the value of the device subsidy. The early
cancellation fee must be reduced by an equal amount each month, for the lesser
of 24 months or the total number of months in the contract term, such that the
early cancellation fee is reduced to $0 by the end of the period.
b) for indeterminate contracts: The early
cancellation fee must not exceed the value of the device subsidy. The early
cancellation fee must be reduced by an equal amount each month, over a maximum
of 24 months, such that the early cancellation fee is reduced to $0 by the end
of the period.
(ii) When the contract does not include a subsidized device
a) for fixed-term
contracts: The early cancellation fee must not
exceed the lesser of $50 or 10 percent of the minimum monthly charge for the
remaining months of the contract, up to a maximum of 24 months. The early
cancellation fee must be reduced to $0 by the end of that period.
b) for indeterminate contracts: A WSP must
not charge an early cancellation fee.
[12]
Had the Code provided that these conditions
would apply going forward as of a given date, this appeal would not have been
taken. But the Code provided that it would apply to all new and amended
contracts beginning December 2, 2013, until June 3, 2015, at which point the
Code would apply to all contracts, no matter when they were concluded.
[13]
The CRTC set out its rationale for its
conclusions on this point at paragraphs 360-367 of the Code. As this rationale
will be examined in detail later in these reasons, it is sufficient, at this
point, to summarize its reasoning. The purpose of the Code is to ensure that
consumers can make informed choices and thereby make the market more dynamic.
The CRTC considered that it was in the best interests of consumers that the
Code be implemented as soon as possible and that it was essential that the
transition period to full implementation of the Code be as short as possible,
having regard to the practical constraints faced by the wireless service
providers. The optimum time to make the Code applicable to all contracts is
June 3, 2015, which balanced the need for speedy implementation and the costs
imposed on the wireless service providers.
[14]
The CRTC’s determination on the issue of
implementation date is found in paragraphs 368-369 of the Code:
368. In light of the above, the Commission determines that all aspects of
the Wireless Code will take effect on 2 December 2013.
369. The Commission finds that where an
obligation relates to a specific contractual relationship between a WSP and a
customer, the Wireless Code should apply if the contract is entered into,
amended, renewed, or extended on or after 2 December 2013. In addition, in
order to ensure that all consumers are covered by the Wireless Code within a
reasonable time frame, the Wireless Code should apply to all contracts, no
matter when they were entered into, by no later than 3 June 2015.
(my emphasis)
[15]
Further on in the Code, at paragraph 394, the
CRTC specifically directs that wireless service providers provide services to
consumers and small businesses according to the terms of the Code, as a
condition of providing these services pursuant to section 24 of the Act.
[16]
The relief sought in this appeal is that the
second sentence of paragraph 369, italicized above, be struck out.
II.
ISSUES
1. Does paragraph 369 of the Code, in particular the second sentence
thereof, operate retrospectively or affect vested rights?
2. If so, what is the standard of review of the CRTC’s decision to make
such an order?
3. Having regard to the standard of review, and if it is the case that
the second sentence of paragraph 369 gives the Code retrospective effect, was
the CRTC’s decision to give it that effect reasonable?
1.
Does paragraph 369 of the Code, in particular
the second sentence thereof, operate retrospectively or affect vested rights?
[17]
The wireless service providers’ case turns on
two related questions which are essentially two aspects of the same question.
The two questions are whether the CRTC has jurisdiction to make retrospective
orders and to make orders which interfere with vested rights. It appears to me
that orders which interfere with vested rights must necessarily have
retrospective (if not retroactive) effect since the rights were acquired before
the orders were made. The question arises because it is alleged that the second
sentence of paragraph 369 either has retrospective application or that it
interferes with vested rights. The first point which must be addressed is
whether this premise is correct, in the sense that the wireless service
providers’ characterization of the issue is legally sound.
[18]
The locus classicus of the explanation of
the difference between retroactive and retrospective legislation is found in E.
A. Driedger, "Statutes: Retroactive Retrospective
Reflections" (1978), 56 Can. Bar Rev. 264, at pp. 268-69,
quoted with approval in Épiciers Unis Métro-Richelieu Inc., division "Éconogros" v. Collin, 2004 SCC 59, [2004]
3 S.C.R. 257 at paragraph 46:
A retroactive statute is one that operates
as of a time prior to its enactment. A retrospective statute is one that
operates for the future only. It is prospective, but it imposes new results in
respect of a past event. A retroactive statute operates backwards.
A retrospective statute operates forwards, but it looks backwards
in that it attaches new consequences for the future to an event that
took place before the statute was enacted. A retroactive statute changes
the law from what it was; a retrospective statute changes the law from
what it otherwise would be with respect to a prior event [Emphasis in original].
[19]
In the present case, the question is whether the
second sentence of paragraph 369 operates retrospectively by attaching new
consequences to an event that took place before the Code was enacted. Prior to
the enactment of the Code, a consumer who sought early termination of a service
contract which provided for the payment of early cancellation fees would be
liable to pay those fees. After the enactment of the Code, the same consumer,
subject to the same contract, could, after June 3, 2015, terminate that contract
without being liable for early cancellation fees. Thus, with the passage of the
Code, the consequences of early termination after June 3, 2015, have been
changed for both the consumer and the wireless service provider. The consumer
is relieved from an obligation which he would otherwise have had in the event
of early cancellation and the wireless service provider is deprived of a remedy
he would otherwise have had in the event of early cancellation. The present
consequences of a past act are changed by the application of the Code to
contracts concluded before the Code came into force.
[20]
As for the question of interference with vested
rights, the respondents’ argument is that payment of early cancellation fees is
contingent upon early cancellation and therefore is not a vested right. That
argument ignores the reality of the transaction between the consumer and the
wireless service provider. Where a wireless service provider offers the
consumer a device at a discounted price in return for the consumer entering
into a contract of a given length, it has a vested right to the revenue stream
provided in the contract, including the portion attributable to repayment of
the device subsidy. It is true that there is an element of contingency in the
payment of early cancellation charges since these do not become payable except
in the event of early cancellation. But to the extent that early cancellation
charges are simply the accelerated repayment of a portion of the contract
amount, they are simply a different mode of discharging a present obligation.
[21]
The same argument can be made in the case where
a consumer receives a lower rate in return for entering into a fixed term
contract. The wireless service provider has a vested right to the revenue
stream fixed by the contract. To the extent that the early cancellation charge
is the accelerated payment of a portion of that revenue stream, it too is a
simply a different mode of payment of an existing obligation.
[22]
As result, I am of the view that the application
of the Code to contracts concluded before the Code came into effect is an
interference with vested rights and gives the Code retrospective application.
2.
If so, what is the standard of review of the
CRTC’s decision to make such an order?
[23]
The question in issue is whether the Act
authorizes the CRTC to make rulings with
retrospective effect or which interfere with vested rights?
[24]
It is important to note that the CRTC did not
explicitly address this issue even though the matter was argued before it and
it was provided with a legal opinion which said it did not have the power to
make such an order: A.B. pp. 2342-2349. As a result, this is similar to Alberta
(Information and Privacy Commissioner) v. Alberta Teachers' Association,
2011 SCC 61, [2011] 3 S.C.R. 654 (Alberta Teachers), where the issue was
an implied decision on a point which had not been argued before the tribunal.
This is a case where the tribunal implicitly decided an issue which was argued
before it by making the order it did.
[25]
If the standard of review is correctness, the
absence of reasons is not an issue because the reviewing court simply provides
its own view of the correct decision. That said, the absence of reasons does
not allow the reviewing court to default to a correctness standard of review:
see Alberta Teachers at paragraph 50. On the other hand, if the standard
of review is reasonableness, the question of how reasonableness is to be
assessed in the absence of reasons arises.
[26]
The Supreme Court’s decision in Dunsmuir v.
New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190 (Dunsmuir), at
paragraphs 47-48, made the tribunal’s reasons the centerpiece of the reasonableness
analysis. In Newfoundland and Labrador Nurses' Union v. Newfoundland and
Labrador (Treasury Board), 2011 SCC 62, [2011] 3 S.C.R. 708 at paragraphs 14,
the Supreme Court nuanced this position when it held that adequacy of reasons
was not a stand-alone ground of review and that “reasons
must be read together with the outcome and serve the purpose of showing whether
the result falls within a range of possible outcomes.” In Alberta
Teachers, the Supreme Court, drawing on Dunsmuir, held that while
reasonableness could be assessed by reference to the reasons "which could be offered in support of a decision"
there were limits to this power to supplement a tribunal’s reasons: see Alberta
Teachers at paragraph 53. Quoting from the British Columbia Court of
Appeal’s decision in Petro-Canada v. British Columbia (Workers' Compensation
Board), 2009 BCCA 396, 276 B.C.A.C. 135 at paragraphs 53 and 56, the
Supreme Court found that a court could not “reformulate
a tribunal's decision in a way that casts aside an unreasonable chain of
analysis in favour of the court's own rationale for the result": Alberta
Teachers at paragraph 54.
[27]
How then is a reviewing Court to proceed in
circumstances such as this? Generally speaking, the matter should be remitted
to the tribunal to allow it to give reasons which can then form the basis of a
reasonableness analysis. However, given the fact that June 3, 2015, is rapidly
approaching, that is not an option here. Where a reasonable basis for the
decision is apparent to the reviewing court, the decision should simply be
upheld as reasonable. However, it will generally be inappropriate to find that
there is no reasonable basis for the tribunal’s decision without giving it an
opportunity to provide one: see Alberta Teachers at paragraph 55. While
this is very respectful of a tribunal’s jurisdiction, it is cold comfort indeed
to the parties, particularly in a case such as this where the point in issue
was argued before the tribunal. In such a case, fairness to the parties
requires that the reviewing court undertake its own standard of review analysis
and, if it concludes that the applicable standard is reasonableness, assess the
reasonableness of the decision. This is what I propose to do.
[28]
The question then is whether the standard
of review of the CRTC’s interpretation of section 24 of the Act, as implemented
in the second sentence of paragraph 369, is correctness or reasonableness.
[29]
The wireless service providers argue that this
is either a question of jurisdiction or a question of general importance to the
legal system which is outside the CRTC’s special expertise. They rely on the
authority of this Court’s decision in MTS Allstream Inc. v. Edmonton (City
of), 2007 FCA 106, [2007] 4 F.C.R. 747 (MTS Allstream). In that case, this court, citing Barrie Public Utilities
v. Canadian Cable Television Assn., 2003 SCC 28, [2003] 1 S.C.R. 476, held
that the question of whether the CRTC had the legal authority to hear an
application about fees to be paid for use of municipal lands was reviewable on
the standard of correctness because the question was one of statutory
interpretation in relation to a question which was of general importance to the
legal system and did not engage the CRTC’s specialized expertise. The
appellants argue the CRTC has no special expertise in the interpretation of the
Act to determine if it has the legal authority to promulgate a Code with
retrospective effect.
[30]
I note that in Wheatland County v. Shaw
Cablesystems Limited, 2009 FCA 291, [2009] F.C.J. No. 1264 (Wheatland),
this Court resiled from the position taken in MTS Allstream in light of
the later jurisprudence of the Supreme Court in Dunsmuir and Canada
(Citizenship and Immigration) v. Khosa, 2009 SCC 12, [2009] 1 S.C.R. 339:
see Wheatland, at paragraphs 52-54.
[31]
The current state of the law on this question
was recently summarized by the Supreme Court in Tervita Corp v. Canada
(Commissioner of Competition), 2015 SCC 3, [2015] S.C.J. No. 3 at paragraph
35:
The questions at issue are questions of law arising under the Tribunal's
home statute and therefore a standard of reasonableness presumptively applies (Dunsmuir
v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190, at para. 54; Smith v.
Alliance Pipeline Ltd., 2011 SCC 7, [2011] 1 S.C.R. 160, at para. 28, per
Fish J.; Alberta (Information and Privacy Commissioner) v. Alberta Teachers'
Association, 2011 SCC 61, [2011] 3 S.C.R. 654, at para. 30).
[32]
Since the interpretation of the Act, and in
particular section 24 is a question of law, the reasonableness standard
presumptively applies. That presumption can be rebutted in a limited number of
ways:
One case in which it can be rebutted is
where a contextual analysis reveals that the legislature clearly intended not
to protect the tribunal’s jurisdiction in relation to
certain matters; the existence of concurrent and non‑exclusive
jurisdiction on a given point of law is an important factor in this regard (Tervita,
at paras. 35‑36 and 38‑39; McLean, at para. 22; Rogers, at para. 15).
Another such case is where general questions
of law are raised that are of importance to the
legal system and fall outside the specialized administrative tribunal’s area of
expertise (Dunsmuir, at paras. 55 and 60).
Mouvement laïque québécois and Alain
Simoneau v. City of Saguenay and Jean Tremblay, 2015
SCC 16, at paragraphs 46-47
[33]
In this case, there is no issue of concurrent
and non-exclusive jurisdiction in relation to the interpretation of those
provisions of the Act which confer jurisdiction on the CRTC. The only time a
court might be called upon to interpret those provisions is in the course of a
judicial review of the CRTC’s interpretation of those provisions. This is not a
case like Rogers Communications Inc. v. Society
of Composers, Authors and Music Publishers of Canada, 2012 SCC 35, [2012] 2
SCR 283 (Rogers), where the Copyright Board and a superior court “may each have to consider the same legal question at first
instance” which leads to the inference that Parliament “was not to recognize superior expertise of the Board
relative to the court with respect to such legal questions”: Rogers,
at paragraph 15.
[34]
This leaves the issue of whether the question
before the CRTC is one of general importance to the legal system which falls
outside the CRTC’s special expertise. The wireless service providers’ position
is that “whether a rule-making body has jurisdiction to
make rules that interfere with vested rights or that have retrospective effect
is of fundamental importance to the legal system”: Appellant’s
Memorandum of Fact and Law at paragraph 46. I think it is more correct to say
that the principle of law is that “The general rule is
that statutes are not to be construed as having retrospective operation unless
such a construction is expressly or by necessary implication required by the
language of the Act”: Gustavson Drilling (1964) Ltd v. M.N.R., [1977] 1
S.C.R. 271 at page 282. When the principle is stated in terms of vested rights,
it is formulated as follows: “…the underlying
assumption being that, when Parliament intends prejudicially to affect such
rights or such a status, it declares its intention expressly, unless, at all
events, that intention is plainly manifested by unavoidable inference”:
Spooner Oils Ltd. v. Turner Valley Gas Conservation Board, [1933] S.C.R. 629,
at p. 638, quoted with approval in Dikranian v. Quebec (Attorney General), 2005
SCC 73, [2005] 3 S.C.R. 530 at paragraph 33.
[35]
In my view, these two principles are simply the
same principle expressed in two different ways: once from the point of view of
temporal application and once from the point of view of consequential effects.
In both cases, the principle is, by its very terms, a rebuttable presumption
applicable to the interpretation of laws: see R. Sullivan, Sullivan on the
Construction of Statutes, Sixth Edition, Markham, LexisNexis, 2014, at page
761. The issue in the appeal is not the principle itself but rather its
application to the facts of this case.
[36]
To the extent that a tribunal is entitled
to deference in the interpretation of its home statute, it must equally be
entitled to deference in the use which it makes of the tools of statutory
interpretation. It would be illogical to find that while a tribunal’s
interpretation of its home statute was presumptively entitled to deference, its
use of the rules of interpretation, or its treatment of rebuttable
presumptions, was to be assessed on the standard of correctness. This would
simply be a back door application of the correctness standard.
[37]
Even if one assumes that the presumption against
retrospective legislation is a law of general application, that question calls
for review on the correctness standard only if the question is outside the
tribunal’s specialized expertise. The question of what is outside the tribunals
specialized expertise was also considered in McLean v. British Columbia
(Securities Commission), 2013 SCC 67, [2013] 3 S.C.R. 895 where the Court wrote:
Third, and most significantly, the problem
with the appellant's argument is her narrow view of the Commission's expertise.
In particular, the appellant argues that limitation periods "are not in
themselves part of substantive securities regulation, the area of the
[Commission's] specialised expertise"…
The answer, as this Court has repeatedly
indicated since Dunsmuir, is that the resolution of unclear language in
an administrative decision maker's home statute is usually best left to the
decision maker. That is so because the choice between multiple reasonable
interpretations will often involve policy considerations that we presume the
legislature desired the administrative decision maker - not the courts - to
make. Indeed, the exercise of that interpretative discretion is part of an
administrative decision maker's "expertise".
McLean, cited
above, at paragraphs 30, 33
[38]
The notion of a tribunal’s specialized expertise
has evolved to include the exercise of “interpretative
discretion” so that the CRTC is presumed to have the required expertise
to resolve the question of whether section 24 authorizes it to promulgate a
Code with retrospective effect.
[39]
The conclusion which flows from this is that presumption
of review of the CRTC’s interpretation of its home statute on the standard of
reasonableness has not been rebutted by the wireless companies.
[40]
That said, because the reasonableness analysis
in a case such as this is based entirely on the tribunal’s factual findings and
policy statements, there is an opportunity to conflate the question of the
tribunal’s power to do a thing and the reasonableness of the tribunal’s doing
of the thing. The fact that a tribunal exercises a power reasonably does not
mean that it has the jurisdiction (vires) to exercise that power in the
first place. The question must be whether the tribunal’s factual findings and policy
findings point to the conclusion that without such a power the tribunal cannot
fulfill its mandate.
3. Having regard to the
standard of review, and if it is the case that the second sentence of paragraph
369 gives the Code retrospective effect, was the CRTC’s decision to give it
that effect reasonable?
[41]
What rationale did the CRTC offer for its
decision to make the Code apply to all contracts after June 3, 2015, regardless
of when those contracts were concluded?
[42]
At paragraphs 360-367 of the Code, the CRTC set
out its analysis with respect to the implementation date for Code. It began by
restating the purpose of the Code, namely that consumers be empowered to make
informed choices in the competitive market so as to contribute to making that
market more competitive. For that reason, the CRTC considered that it was in
the best interests of consumers that the Wireless Code be implemented as soon
as practicable.
[43]
The CRTC went on to note that if the Wireless
Code applied only to contracts entered into after December 2, 2013, (“new contracts”), many consumers who were locked into
pre-existing contracts would not fully benefit from the Code until those
contracts expired or were amended. The Commission was of the view that it was
essential that the transition period for the implementation of the Wireless
Code should be as short as possible so as to ensure that all consumers benefit
from the Code in a reasonable period. The CRTC noted that unreasonable delays
in the implementation of the Code for some customers “could
be considered undue discrimination”: Wireless Code at paragraph 365.
[44]
The CRTC did recognize that there were practical
reasons why immediate application of the Code to all existing contracts might
not be proportionate, given that the costs and resources necessary to
immediately implement the Code would outweigh the relative benefit to
consumers.
[45]
On the basis of the evidence filed in the
hearings which it held, the CRTC was aware that if the Code applied to new and
amended contracts only, approximately half of all wireless service customers
would be covered by the Code within one year of its implementation date.
Furthermore, the evidence before the CRTC showed that a large proportion of the
consumers amend or extend their contracts prior to their expiry so that the
Code would apply to most contracts in less than 2 years. The CRTC reasoned that
at that point, the burden on wireless service providers to amend the remaining
contracts would be substantially reduced.
[46]
In a communication to the wireless service providers
industry association dated June 18, 2013, the CRTC, drawing on information
provided by the wireless service providers in the course of the hearing
process, the CRTC advised that “the evidence suggests
that approximately 80% of wireless customers, depending on the service
provider, would be covered by the Code by 3 June 2015”: A.B. at p. 2618.
[47]
Before looking more closely at the CRTC’s
reasoning, one can eliminate from further consideration the question of “undue discrimination”, which the CRTC raised a as a
possible issue if implementation of the Code were “unreasonably
delayed”. Undue discrimination is a reference to section 27 of the Act
which prohibits a carrier, in the provision of services, to unjustly
discriminate or give an unjust preference to any person, including itself.
Undue discrimination and unjust discrimination appear to be used
interchangeably: see Broadcasting Regulatory Policy CRTC 2011-522
at paragraph 11, General Authorizations for Broadcasting Distribution
Undertakings, at paragraph 3(c).
[48]
Assuming for the sake of this argument that
undue discrimination does not require a specific intention to discriminate, it
must nonetheless result from a deliberate choice by a carrier. To suggest that
wireless service providers would engage in undue discrimination as a result of
phasing in the implementation of the Code according to the CRTC’s direction is
absurd.
[49]
Does the CRTC’s reasoning leading to the
imposition of the June 3, 2015, drop-dead date satisfy the “necessary implication” test with respect to the
implied interpretation of section 24 which its decision evidences? Since it is
conceded by all that section 24 does not explicitly authorize the CRTC to make
rules with retrospective application, it can only do so if that power must
arise by necessary implication because without such a power, it could not
fulfill its statutory mandate. : see Gustavson Drilling (1964) Ltd. v.
Canada (Minister of National Revenue - M.N.R.), [1977] 1 S.C.R. 271.
[50]
The Code implements several of the policy
objective of the Act, particularly paragraph 7(f) – fostering increased
reliance on market forces for the provision of services- and paragraph 7(h) –
responding to the social and economic requirements of users. To that extent,
the CRTC’s objectives are grounded in the Act and in the Canadian
telecommunications policy. This is an important factor in ensuring that the
CRTC’s position is not simply “saying it’s so makes it
so.” As a result, the promulgation of the Code as a whole is a matter
squarely within the CRTC’s mandate and within the Act’s policy objectives.
[51]
The issue is the timing of that implementation.
The CRTC found that it was in the best interests of consumers that the Code be
implemented as soon as possible and that it was essential that the transition
period be as short as possible. These are both question which are intimately
tied to the objectives of the Code itself. They are also questions which depend
on the exercise of the CRTC’s intimate knowledge of the telecommunications
industry and its regulatory environment. To that extent, they are
determinations of fact made by the CRTC in the exercise of its mandate, or to
put the matter another way, they are determinations which are permeated by the
CRTC’s factual expertise, both generally and specifically in the context of
this proceeding.
[52]
Because these conclusions are so heavily
dependent upon the CRTC’s factual assessments, it appears to me that they are beyond
the scope of our review, which is limited to question of law and jurisdiction. Put
another way, one could not question whether it really is essential that the
Code be implemented as soon as practicable without engaging in a factual
analysis designed to undermine the CRTC’s own factual analysis. This is not our
function in a statutory appeal from a specialized tribunal.
[53]
Our role, in the circumstances of this case, is
to examine the rationale given for the decision to see if there is a rational
basis for it. Having set aside the question of undue discrimination, the
remaining reason for the retrospective application of the Code is the CRTC’s
finding that enabling consumers to make informed choices in the competitive
market will contribute to making that market even more competitive.
[54]
It is important to recall that while this
dispute centers on the effect of the implementation of the Code on early
cancellation charges, it is the Code as a whole which is being implemented. The
Code contains a large number of other provisions dealing with consumer choice
and consumer protection. It covers such topics as the use of plain language in
contracts, specific terms to be included in post-paid and pre-paid service
contracts, the provision of critical information, changes to contract terms,
bill management, mobile device issues, security deposits and disconnection: see
A. B. pp 76-83. It is therefore an error to assess the CTRC’s decision solely
through the lens of early cancellation fees.
[55]
When one considers the Code as a whole, one can
see that one of its effects will be to put more information in the hands of
consumers. To the extent that the functioning of any market is dependent on the
quality of the information available to market participants, the coming into
force of the Code should make the market for wireless services more dynamic as
consumers make better informed choices at more frequent intervals. It is not
unreasonable to conclude that achieving this state of affairs is indeed in the
best interests of consumers.
[56]
Does it follow from this that the Code should
therefore be implemented as soon as practicable? At paragraph 365 of the Code,
the CRTC noted that if the Code only applies to new contracts, “many Canadians with pre-existing wireless contracts will not
fully benefit from the Wireless Code until these pre-existing contracts expire
or are amended.” Given the CRTC’s intention to put more information into
the hands of consumers so as to increase the dynamism of the market, it is
reasonable to have all consumers on the same footing as soon as possible. It is
perhaps this limited non-technical view of “undue discrimination”
which the CRTC had in mind. From the point of view of the regulation of the
retail market in voice and data wireless services, the CRTC could reasonably consider
that section 24, by necessary implication, gives it the power to impose the
Code retrospectively.
[57]
As a result, on the basis of the record before
this Court, I am of the view that the CRTC’s implicit interpretation of section
24 to the effect that it [the CRTC] has the right to make the Wireless Code
applicable to contracts concluded before the Code came into effect is
reasonable. I would add, however, that since the CRTC did not address the legal
issue explicitly, and since the reasoning in this case is a function of its own
facts, this decision is no wider than those facts. Whether the CRTC has the
implied power to legislate retrospectively in any other case remains to be
determined when it arises.
[58]
For these reasons, I would dismiss the
appeal with costs.
"J.D. Denis Pelletier"
“I agree
Noel C.J.”
“I agree
Scott J.A.”