Capital Cities Comm. v. C.R.T.C., [1978] 2 SCR 141

SUPREME COURT OF CANADA

Capital Cities Comm. v. C.R.T.C., [1978] 2 S.C.R. 141

Date: 1977-11-30

Capital Cities Communications Inc., Taft Broadcasting Company and WBEN, Inc. Appellants;

and

Canadian Radio-Television Commission Respondent;

and

Rogers Cable TV Limited, Coaxial Colourview Limited and Bramalea Telecable Limited

and

The Attorney General for Canada, The Attorney General for Ontario, The Attorney General for Quebec, The Attorney General for British Columbia, The Attorney General for Saskatchewan, The Attorney General for Alberta Intervenants.

1977: January 26, 27, 28; 1977: November 30.

Present: Laskin CJ. and Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré JJ.

ON APPEAL FROM THE FEDERAL COURT OF APPEAL

Constitutional law — Cabletelevision — Deletion of commercial messages — Regulation by C.R.T.C. — Treaties — Broadcasting Act, R.S.C. 1970, c. B-11, ss. 3, 17, 29 — Radio Act, R.S.C. 1970, c. R-1, s. 2 — General Radio Regulations — Inter-American Radio-communications Convention of December 13, 1937 — B.N.A. Act, ss. 91, 92(10).

Radio and television — Cablevision — Deletion of commercial messages — Regulation by C.R.T.C. — Treaties — Broadcasting Act, R.S.C. 1970, c. B-11, ss. 3, 17, 29 — Radio Act, R.S.C. 1970, c. R-I, s. 2 — General Radio Regulations — B.N.A. Act, ss. 91, 92(10).

The appellants operated television broadcasting sta­tions in Buffalo, New York, and their broadcasts were receivable in nearby Canadian communities. Some of their programmes and commercial messages were paid for by Canadian sponsors. The intervenant Rogers Cable TV Limited was licensed under the Broadcasting Act to operate, within a specified area in a part of Toronto, a community and cable television distribution system and

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to receive broadcasts of the appellants' stations. The appellants were not, and were not required to be, li­censed under the Broadcasting Act by the respondent CRTC. What precipitated the matters giving rise to this appeal was Rogers' decision to delete commercial messages from the programmes received from the appellants' stations and to transmit the appellants' programmes to its subscribers with substituted announcements of its own.

Previous to July 1971 there had been a long standing Department of Transport policy accepted by CRTC that cable television systems should not alter the signals received from broadcasting stations. This policy against alteration was withdrawn by CRTC on July 16, 1971, after public hearings and the consideration of numerous briefs and letters in response "to the urgency of adopting a cablevision policy to facilitate a harmonious development of television and cable television". Rogers applied to the CRTC for amendment of its licence to permit deletion of commercial messages and substitution of commercial messages of its own. The appellants inter­vened to oppose the amendment. The CRTC decided that it would not permit Rogers to insert replacement signals carrying commercial messages but did authorize deletion of the commercial messages received by Rogers on condition that public service announcements be inserted in replacement. Following the decision of the CRTC the appellants appealed to the Federal Court of Appeal pursuant to s. 26 of the Broadcasting Act and concurrently brought applications to that Court for review of the CRTC decisions pursuant to s. 28 of the Federal Court Act R.S.C. 1970 (2nd Supp.), c. 10. These appeals and applications were dismissed. Leave to appeal further was granted on certain questions of law [see pp. 150-1].

Held (Pigeon, Beetz and de Grandpré JJ. dissenting): The appeal should be dismissed.

Per Laskin C.J. and Martland, Judson, Ritchie, Spence and Dickson JJ.: On the question of the status of the appellants (Question 5); the substantive issues of proprietary or legal right (of the appellants) were being directly litigated in other proceedings. The appellants should not however be denied standing. Their position was somewhat inconsistent but there were economic considerations behind the constitutional challenge.

On the question of constitutionality (Question 2): While the Supreme Court is not bound by judgments of the Privy Council, any more than by its own judgments,

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the Radio Case, [1932] A.C. 304, was correctly decided under ss. 91 and 92(10)(a) of the B.N.A. Act and is relevant. That and other precedents on the definition of "undertaking" leave no doubt that federal legislative authority extends to the regulation of the reception of television signals emanating from a source outside Canada and to the regulation of the transmission of such signals within Canada. Further, it would be incongruous to admit this federal legislative jurisdiction to the extent conceded but to deny the continuation of regulatory authority because the signals are intercepted and sent on to the viewing public though a different technology. There are not two undertakings involved in the operation of a cable distribution system simply because the recep­tion is through Herzian waves and the transmission is not. Programme content regulation is inseparable from regulating the undertaking through which programmes are received and sent on as part of the total enterprise. Finally, since programmes of local origination were not involved in the facts on which the constitutional issue was raised, the argument that a cable distribution system was necessarily a local work or undertaking in respect of 'signals transmitted within the Province by coaxial cable could not be accepted.

On the question of the jurisdiction of the CRTC (Question l): The challenge to the authority of the CRTC was rightly rejected by the Federal Court of Appeal. A cable distribution system, at least one which receives signals from a broadcaster and sends them through the system, is broadcaster and is, in that respect at least, within the regulatory and licensing authority of the CRTC; a view reinforced by s. 29(3) of the Broadcasting Act. The present case was not concerned with closed circuit systems independent of broadcasting as defined in the Act. Section 3(c) of the Act does not protect cable distribution systems from CRTC authority to permit deletion of commercial messages received by them. Further the Act read as a whole and s. 17(1)(a) read in its context make it clear that s. 17(1)(6) refers simply to any change in the terms governing any licence issued by the Executive Committee.

On the question of alleged excess of jurisdiction (Question 3): Having regard to the embracive objects committed to the CRTC under s. 15 of the Act, extend­ing to all aspects of the Canadian broadcasting system with a view to implementing the broadcasting policy set

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out in s. 3, it was quite proper for the CRTC to lay down guidelines in respect of cable television.

On the international convention issue (Question 4): The CRTC is not an agent or arm of the Canadian Government and as such bound by the terns of a convention (in this case the Inter-American Radio Com­munication Convention of 1937 to which the U.S.A. was also a party) in the same way as the Government. The CRTC is a federal regulatory agency with defined statutory powers. In any event there would be no domestic, internal consequences of the Convention unless they arose from implementing legislation giving the Conven­tion legal effect within Canada.

Per Pigeon, Beetz and de Grandpré JJ. dissenting: On the question of constitutionality. The issue on appeal concerns exclusively the jurisdiction of the CRTC to authorize the deletion of commercials from TV televi­sion programmes received by hertzian waves from U.S. stations. Irrespective of any other consideration, Caloil Inc. v. Attorney General of Canada, [19711 S.C.R. 543, is conclusive authority in support of Federal jurisdiction to control such matters.

On the question of jurisdiction of the CRTC: This question must be considered on the basis that the impugned CRTC order authorized Rogers to appropri­ate the commercial value of the appellants programmes carried on their cable network. To sustain such order it must be found either that CRTC has the power to authorize such appropriation or that the operators may lawfully do it without such authorization unless prohib­ited from so doing by CRTC. Neither position is sus­tainable. While licensees do not own the channel assigned to them and only enjoy a privilege which may be revoked by the licensing authority, the licence is revocable only for cause and is really exclusive (quite a different situation from operators on citizen band or amateur channels). For the CRTC to authorize the deletion in question was an interference with the rights conferred by the licence of the broadcasters and the taking away of part of the broadcasters' rights in respect of their legitimate clientele.

On the international convention issue: as Canada is a party to the Inter-American Radiocommunication Con­vention which deals with radio interference of an international character and with retransmissions. The lan­guage of the Convention shows that the parties were well aware that they were dealing with a developing

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technology. The general intention should be given effect to in the light of the present developments, rather than on a strict construction of the language used. While Rogers does not interfere with the hertzian waves from the appellants stations Rogers should be considered as broadcasting to their numerous subscribers. That the rebroadcasting is done by coaxial cable should make no difference when the net result is the same. If Rogers were not considered to be rebroadcasting they would have to be considered as a conduit and, on that view of the case, the deletion of commercials would be interfer­ence. Rogers is subject to the General Radio Regula­tions and thereby obliged to observe the Convention. The CRTC is bound to take judicial notice of the Convention and cannot validly authorize any violation of its provisions.

[In re Regulation and Control of Radio Communi­cation in Canada, [1932] A.C. 304; Public Utilities Commission v. Victoria Cablevision Ltd. (1965), 52 W.W.R. 286; Re CFRB and Attorney-General of Canada, [1973] 3 O.R. 819; La Régie des Services Publics v. Dionne, [1978] 2 S.C.R. 191; Attorney-Gene­ral for Ontario v. Winner, [1954] A.C. 541; United Artists Television, Inc. v. Fortnighlty Corporation (1967), 377 F. 2d 872, reversed (1968), 392 U.S. 390; Validity and applicability of the Industrial Relations and Disputes Investigation Act (the Stevedoring case), [1955] S.C.R. 529; C.P. Ry. Co. v. A.G. (B.C.) et al., [1950] A.C. 122; Caloil Inc. v. Attorney-General of Canada, [1971] S.C.R. 543; R. v. Port of London Authority ex p. Kynoch, [1919] 1 K.B. 176; British Oxygen Co. v. Board of Trade, [1971] A.C. 610; R. v. Chief Immigration Officer, Heathrow Airport, [1976] 3 All E.R. 843, referred to.]

APPEAL from a judgment of the Federal Court of Appeal[1] dismissing an application for judicial review and appeal under the Federal Court Act, s. 28 and the Broadcasting Act, s. 26. Appeal dismissed, Pigeon, Beetz and de Grandpré JJ. dissent­ing.

G. F. Henderson, Q.C., B. A. Crane, and E. Binavince, for the appellants.

J. J. Robinette, Q.C., T. G. Heitzman, and Peter Grant, for the respondent.

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D. J. Wright, Q.C., and B. C. MacDonald, for the intervenants Rogers et al.

G. W. Ainslie, Q.C., D. Friesen, and A. Desjar­dins, for the intervenant Attorney General of Canada.

D. Hilton, Q.C., and E. Goldberg, for the intervenant Attorney General for Ontario.

R. Langlois, and A. Tremblay, for the interve­nant Attorney General for Quebec.

M. H. Smith, for the intervenant Attorney Gen­eral for British Columbia.

W. Henkel, Q.C., and Peter Feasdale, for the intervenant Attorney General for Alberta.

Lysyk, Q.C., for the intervenant Attorney General for Saskatchewan.

The judgment of Laskin C.J. and Martland, Judson, Ritchie, Spence and Dickson JJ. was deliv­ered by

THE CHIEF JUSTICE—The issues in this appeal arise out of three decisions of the Canadian Radio-Television Commission (now the Canadian Radio-television and Telecommunications Commission: see 1975 (Can.), c. 49) issued on May 1, 1974, made in pursuance of applications by Rogers Cable TV Limited, Coaxial Colourview Limited and Bramalea Telecable Limited for amendment of their respective cable television licences "to permit commercial deletion and substitution on a random basis on all United States television sta­tions carried from time to time on the basic service which presently includes channels 2, 4 and 7 Buf­falo". The applications, made by telex, went on to say: "A random basis means three or more substi­tutions per evening on at least one of the Channels in alternation. All substitution messages would be special promotional information to subscribers such as free antenna removal, discounts for annual prepayment, additional channel offerings and the like as well as messages of general public interest." Since Rogers and the other two applicants are associated companies with a common interest, it will suffice to deal with Rogers' application alone as a basis for crystallizing and dealing with the

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issues that are now before this Court.

Rogers' licence, which is formally a licence to carry on a "broadcasting receiving undertaking", as defined in the Broadcasting Act, 1967-68 (Can.), c. 25, now R.S.C. 1970, c. B-l 1 (to which reference will be made later in these reasons) authorized it to serve certain areas of Metropolitan Toronto with an off-air broadcasting receiving antenna at a specified location. The licence speci­fied eleven television broadcasting stations whose signals or programmes could be received by Rogers and distributed or retransmitted by it on the same or different channels, a large number of AM and FM Radio stations whose signals or programmes it could similarly receive and distrib­ute and seven channels which the licensee could use for programmes of its own local origination. Among the eleven television broadcasting stations included in the licence were three Buffalo stations, operated respectively by the three appellant com­panies and whose signals or programmes were carried over channels 2, 4 and 7.

The appellants were not and were not required to be licensed by the respondent CRTC. Their programmes reached Canadian viewers in areas adjacent to Buffalo, including Toronto, and were freely available to those whose television sets could directly receive those programmes. They could however receive them, and other programmes too which their sets could not attract, by becoming subscribers of Rogers through the latter's cable operation. I will consider the nature of that opera­tion later on in these reasons. What precipitated the matters now before this Court was Rogers' decision, made and carried out some time prior to October, 1973, to delete commercial messages from the programmes received from the appel­lants' stations and to transmit those programmes to its subscribers without those messages but with substituted announcements of its own. The appel­lants threatened and, indeed, took legal action against Rogers, and this litigation is pending in

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lower Courts. Rogers thereupon applied for amendment of its licence in terms already noted.

The appellants intervened, apparently without objection, in the public hearings held by CRTC to consider the applications of Rogers and the two other applicants. Among the grounds advanced by the appellants in opposition to the licence amendment sought by the applicants was a challenge to the jurisdiction of CRTC. The respondent Com­mission granted the applications in part in a deci­sion dated May I, 1974. Since a strong attack was mounted by counsel for the appellants on the reference to and reliance upon a policy statement of the CRTC in the making of its decision, it is desirable that 1 reproduce here the material parts of the decision. It is as follows:

With regard to the licensee's proposal to implement commercial deletion and substitution on a random basis on all United States television stations carried from time to time on its basic service, the Commission's Cable Policy Statement of July 1971 states that:

The Commission will permit the removal by cable television licencees of the commercial value contained in the signals of stations not licensed to serve Canada. While cable television licensees will not be permitted to sell replacement commercial messages themselves, they will be encouraged to make contractual arrange­ments with Canadian television stations in their areas to insert replacement signals carrying commercial messages sold by the Canadian television stations.

In accordance with its policy statement, the Commission authorizes the licensee to delete commercial messages from U.S. television signals on a random basis as applied for. The objectives of the Commission's com­mercial deletion policy is to restore the logic of the local licence and strengthen Canadian Television service. Revenue and other benefits derived from the implemen­tation of the policy are intended to strengthen broadcasters. Accordingly, since the licensee has not made contractual arrangements with Canadian television sta­tions in its area, the Commission will not permit the licensee to insert replacement signals carrying commer­cial messages. Nor is the Commission willing to permit the licensee to insert messages containing promotional information to its subscribers since this is not consistent

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with the Commission's policy objective. Instead, the Commission authorizes the licensee to delete on condi­tion that it inserts in replacement of the deleted messages public service announcements and other similar suitable replacement material.

The Commission is aware that statements of claim have been' filed in the Federal Court against the licensee by stations in Buffalo. Where litigation occurs that may affect the ability of licensees to carry out their obliga­tions under the Broadcasting Act, the Commission is properly concerned that licensees not voluntarily settle such litigation on terms that may inhibit their ability to conform with Commission policy and requirements under the Broadcasting Act. Hence, in such circum­stances, the Commission's consent must first be obtained before any terms of settlement and, in particular, any injunction is voluntarily consented to by any licensee.

The application to distribute an announcement and message service is approved on an experimental basis until expiry of the present licence. It is understood that this service will not be supported by commercial advertising.

The application to distribute airport arrival and other digital information is approved on an experimental basis until expiry date of the present licence. It is understood that this service will not be supported by commercial advertising and that it will be a visual rather than an audio service.

The policy statement referred to and quoted in small part in the decision aforesaid is embodied in a document of considerable length, dated July 16, 1971, and entitled,

Canadian Broadcasting
"A Single System"
Policy Statement on Cable Television

There had been a prior policy statement on cable television issued on May 13, 1969 in which CRTC said that "[it] accepted, for the time being, the long-standing Department of Transport policy that cable television systems should not alter the signals received from broadcasting stations". The quota­tion is from the policy statement of July 16, 1971, and it continues as follows:

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Since then, the Commission has carried out extensive studies which demonstrate that the unaltered carriage of some of these signals disrupts the ability of Canadian television stations to fulfil their mandate.

The policy statement of July 16, 1971 was made after public hearings and the consideration of numerous briefs and letters, and in response, as CRTC saw it, to the urgency of adopting a cablevision policy to facilitate a harmonious de­velopment of television and cable television.

Following the decisions of May l, 1974 the appellants took appeals to the Federal Court of Appeal pursuant to s. 26 of the Broadcasting Act and, concurrently, brought applications to that Court for review of the decisions pursuant to s. 28 of the Federal Court Act, R.S.C 1970 (2nd Supp.), c. C-10. The appeals and applications were dismissed on January 17, 1975, reasons of the Federal Court of Appeal[2] being delivered by Thurlow J.A. (as he then was) and by Ryan J.A., with whom Urie J.A. concurred. Leave to appeal to this Court was granted on five questions as follows:

1. Did the Federal Court of Appeal err in holding that the Canadian Radio-Television Commission had jurisdiction, pursuant to the Broadcasting Act, R.S.C. 1970, c. B-11, to regulate cable distribution systems which receive and distribute television signals?

2. Did the Federal Court of Appeal err in holding that the Broadcasting Act insofar as it conferred such jurisdiction on the Canadian Radio-Television Com­mission, was intra vires of the Parliament of Canada'?

3. Did the Federal Court of Appeal err in failing to hold that the Canadian Radio-Television Commission exceeded its jurisdiction?

(a) in attempting to regulate in accordance with a policy statement which was without legal force and effect, and,

(b) by stating that the licensee should obtain the Com­mission's consent before entering into terms of settlement which might inhibit its ability to conform

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with the Commission's policy and require­ments under the Broadcasting Act.

4. Did the Federal Court of Appeal err in failing to hold that the Decisions of the Canadian Radio-Television Commission were contrary to the Inter-American Radio-communications Convention, 1937 and there-fore invalid?

5. Did Thurlow J. err in holding that the applicants had no proprietary or other legal rights in the signals transmitted into Canadian air space from their broadcasting stations in the United States?

Following the granting of leave to appeal on the foregoing five questions, the appellants applied ex parte, pursuant to the Rules of this Court, to give notice to the Attorney-General of Canada and to the Attorneys-General of the Provinces of the con­stitutional question raised in the appeal and refor­mulated the question as follows:

Whether the Broadcasting Act, RSC 1970, Chapter B-11, and regulations made thereunder, are ultra vires the Parliament of Canada insofar as they purport to regulate, or to authorize the Canadian Radio-Television Commission to licence and to regulate the content of programs carried by CATV systems situated wholly within Provincial boundaries.

An order to that effect was made on April 30, 1975. For some unexplained reason the order, including the reformulated question, was not included in the Appeal Case that was filed on September 9, 1975. It had, however, been served on the respective Attorneys-General and it stipu­lated that applications to intervene were returnable on June 6, 1975.

In their factums, the intervening Attorneys-General did address themselves to the question of which they were given notice. The question merely sharpened the issue reflected in the constitutional question which was among those on which leave to appeal was given, and may be taken as responsive to the scope of the constitutional issue reflected in the reasons given by Ryan J.A. in the Federal Court of Appeal. I do not think that anything turns on the different ways in which the constitu­tional issue in this case was framed, and I regard that issue, in both of its manifestations, as contained

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in question 2 of the questions in appeal.

I propose to deal with these questions in the following order: first, question 5; second, question 2, the basic constitutional question; third, question l; fourth, question 3, and fifth, question 4.

Question 5, Status of the Appellants

Although this question is raised in terms which would invite this Court to determine what, if any, are the proprietary or other legal rights of the appellants in their signals upon their entry into Canadian air space, especially as against Rogers and its associated companies, the issue arising out of Thurlow J.A.'s observations was related by counsel to the status of the appellants in the Federal Court and now in this Court. The substan­tive issues of proprietary or legal right are being litigated directly in other proceedings.

Ryan J.A., with whom Urie J.A. agreed, did not question the appellants' status which, as I have already noted, was not challenged in the proceedings before CRTC. In these circumstances, and having regard to the fact that the issues now before us arose out of the deletion of commercial messages from the appellants' programmes received by Rogers and its associated companies, at their antennae, I would not, at this stage of the proceedings, deny standing to the appellants. I hold this opinion notwithstanding the somewhat inconsistent position of the appellants, who do not complain of the free and untrammelled reception of their programmes by television receiving sets in Canada and who, indeed, as their counsel put it, are very happy to have their programmes received so long as the entire programmes, commercials included, are received; but who do complain of deletion of commercial messages by cablevision systems which receive the programmes and transmit them to subscribers. Economic considerations are thus behind the constitutional challenge.

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Question 2, Constitutionality

The submissions of the appellants on this ques­tion were supported by the Attorneys-General of Ontario, Quebec, British Columbia and Alberta. The contrary position of CRTC was supported by the Attorney-General of Canada, in large part by the Attorney-General of Saskatchewan and by Rogers and its associated companies, intervenors as were the various Attorneys-General.

In dealing with the constitutional authority of Parliament to regulate cable distribution systems which receive and distribute television signals, I leave to one side, so far as the present case is concerned, the determination of regulatory author­ity over programmes carried by such systems which are of their own origination and which are transmitted to their subscribers in the Province of such origination, and hence not received by other owners of television sets in the Province.

The main argument of the appellants and of those in support of their position is that legislative jurisdiction is divided in respect of regulation of television signals received by cablevision compa­nies. Exclusive federal jurisdiction is conceded so far as concerns the reception of foreign or domes-tic television signals at the antennae of the cablevi­sion companies. It is contended, however, that once received at those antennae federal legislative power is exhausted, and any subsequent distribu­tion of those signals, whether in the same or modified form, within a particular Province is a matter exclusively for that Province.

In advancing this contention, the appellants and supporting Attorneys-General would both distin­guish and limit the effect of the Radio case (In re Regulation and Control of Radio Communication in Canada[3]), and, consequently, of cases in provin­cial Courts which have followed and relied on the Radio case, such as Public Utilities Commission v.

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Victoria Cablevision Ltd.[4], Re CFRB and Attor­ney-General of Canada[5], and La Régie des Services Publics v. Dionne, a recent judgment of the Quebec Court of Appeal, delivered on January 12, 1977 and as yet unreported, and now on appeal to this Court[6]. The point strongly made by counsel for the appellants was that the issue in the Radio case had to be assessed according to its particular facts, based as they were on the technology of the time which did not include cable distribution systems.

There were two questions referred to the Supreme Court of Canada in the Radio case, as follows:

1. Has the Parliament of Canada jurisdiction to regulate and control radio communication, including the transmission and reception of signs, signals, pictures and sounds of all kinds by means of Hertzian waves, and including the right to determine the character, use and location of apparatus employed?

2. If not, in what particular or particulars or to what extent is the jurisdiction of Parliament limited?

This Court, by a majority, answered the first question in the affirmative and hence did not have to answer the second question. When the case came to the Privy Council, that tribunal noted that the Supreme Court had given its decision in the Radio case without the advantage, if any, of the Privy Council's decision in the Aeronautics case (In re Regulation and Control of Aeronautics in Canada[7], which had not then been handed down but which did come down before the appeal was heard in the Radio case. Although both cases invited a consideration of federal treaty-imple­menting powers, I need not pursue that aspect for the purposes of the present case. [The Privy Coun­cil did hold in the Radio case that federal legisla­tion implementing the International Radiotele­graph Convention of 1927, to which Canada was a party as an independent signatory, was competent to Parliament as being for the peace, order and good government of Canada, since it dealt with a

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matter that was not explicitly mentioned in s. 91 or s. 92 of the British North America Act.]

Since the two Provinces, Quebec and Ontario, which opposed federal competence in relation to radio broadcasting, had urged that even if federal power embraced enforcement of an international convention it did not extend to inter-provincial broadcasting, the Privy Council went further in its reasons to deal more broadly with the question of competence in the field of radio broadcasting, as, indeed, it was obliged to in order to answer the main question referred to the Supreme Court. The Privy Council, addressing itself to the provincial contention, phrased it in these words (at pp. 313-315):

… even supposing that it were possible to draw a rigid line between inter-Provincial and Dominion broadcasting, there is something more to be said. It will be found that the argument for the Provinces really depends on a complete difference being established be­tween the operations of the transmitting and the receiv­ing instruments. The Province admits that an improper use of a transmitting instrument could by invasion of a wavelength not assigned by international agreement to Canada bring into effect a breach of a clause of the convention. But it says this view does not apply to the operation of a receiving instrument... .

The argument of the Province really depends on making, as already said, a sharp distinction between the transmitting and the receiving instrument. In their Lordships' opinion this cannot be done. Once it is conceded, as it must be, keeping in view the duties under the convention, that the transmitting instrument must be so to speak under the control of the Dominion, it follows in their Lordships' opinion that the receiving instrument must share its fate. Broadcasting as a system cannot exist without both a transmitter and a receiver. The receiver is indeed useless without a transmitter and can be reduced to a nonentity if the transmitter closes. The system cannot be divided into two parts, each independent of the other.

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In rejecting the provincial contention, the Privy Council founded exclusive federal power in the combined effect of the concluding words of s. 91 and of s. 92(10)(a). It stated its view as follows (at p. 315):

Their Lordships have therefore no doubt that the undertaking of broadcasting is an undertaking "connect­ing the Province with other Provinces and extending beyond the limits of the Province". But further, as already said, they think broadcasting falls within the description of "telegraphs".

No doubt in everyday speech telegraph is almost exclu­sively used to denote the electrical instrument which by means of a wire connecting that instrument with another instrument makes it possible to communicate signals or words of any kind. But the original meaning of the word "telegraph," as given in the Oxford Dictionary, is: "An apparatus for transmitting messages to a distance, usu­ally by signs of some kind." Now, a message to be transmitted must have a recipient as well as a transmitter. The message may fall on deaf ears, but at least it falls on ears. …

And it added, in conclusion (at p. 317):

Although the question had obviously to be decided on the terms of the statute, it is a matter of congratulation that the result arrived at seems consonant with common sense. A divided control between transmitter and receiv­er could only lead to confusion and inefficiency.

The Privy Council's attribution of federal au­thority to that portion of s. 92(10)(a) which by exception invests Parliament with power in rela­tion to undertakings "connecting the Province with any other or others of the Provinces or extending beyond the limits of the Province" may properly be amplified, in my opinion, by what emerged from its reasons for judgment in Attorney-General for Ontario v. Winner[8], at p. 574, namely, that an undertaking will fall within the quoted words of the exception in s. 92(10)(a) even if it has its point of commencement outside the Province, so that it "extends in"; the words "extending beyond the limits of the Province" are not confined to situa­tions where an undertaking commences in the Province and "extends out".

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The question that arises as a result of the Radio case is whether the broad sweep of the reasons, stemming from a question that specifically referred to transmission and reception by means of Hertzian waves (but as an included means of radio communication), should be limited for the purposes of the present case because the Hertzian waves end at the antennae of the cable distribution systems and the signals carried by such waves are then converted for transmission through coaxial cables to subscribers' television sets.

Both appellants and respondent accepted the description of the technology of television and of cable distribution systems as recited by the United States Court of Appeals, Second Circuit, in United Artists Television, Inc. v. Fortnightly Corporation[9], a copyright case. Chief Judge Lum­bard, at pp. 875-6, described the operations as follows:

... Television broadcasting equipment first translates the sight and sound of the program being broadcast into two voltages, the video signal, which measures the inten­sity of light at each spot on a photosensitive screen inside the camera as it is scanned by an electron beam, and the audio signal which measures the intensity of sound. These two changing voltages are then encoded in a radio frequency carrier wave for broadcasting; the video signal is used to modify, or modulate, the ampli­tude, or maximum strength, of the carrier wave, and the audio signal is used to modulate the frequency of the carrier wave. The modulated carrier wave is then broadcast by an antenna as electromagnetic radiation. When this radiation strikes a home television antenna, it induces a voltage between the antenna terminals which reproduces the modulated carrier wave. The reproduced carrier wave is then conducted into the television set, and there demodulated to yield reproductions of the video and the audio signals. The video signal controls the intensity of a scanning electron beam, which reproduces on the electroluminescent interior of the television tube the image seen by the camera, and the audio signal controls the speaker of the set. Since the broadcast radiation propagates at the speed of light, the whole process of television broadcasting and reception consumes a fraction of a second.

The radiation broadcast by a television broadcasting station, when it strikes the corresponding antenna of one of defendant's CATV systems, induces in it a reproduction

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of the station's modulated radio frequency carrier wave just as it does in a home antenna. The CATV system's "head end equipment," housed in a small build­ing near the antennas, then amplifies the carrier wave, converts it if it is a high-frequency, or high-band, VHF wave (channel 7 to 13) to one of the low-band VHF channels (2 to 6) in order to reduce losses in transmis­sion through the system's coaxial cables, narrows its frequency range, and then propagates it as electromag­netic radiation through the system's cables. The radia­tion, amplified by numerous trunkline and distribution amplifiers along the cables, is transmitted at nearly the speed of light to the terminals of subscribers' television sets, in most cases through matching transformers.

Before 1958 and after 1964 the function of converting high-band to low-band VHF waves at each system's "head end" was performed by equipment which hetero­dyned an incoming wave, that is, mixed it with a locally produced wave whose frequency was chosen so that the beat wave resulting from the mixing, whose frequency was the difference between the frequencies of the two mixed waves, possessed the desired frequency. From 1958 to 1964 the same function was performed by units which demodulated the video signal of the incoming wave and used it to remodulate a locally produced wave of the desired frequency, and which heretodyned the audio component of the incoming wave. Thus broadcast television programs have never been made visible or audible within defendant's CATV systems... .

Although Fortnightly Corporation v. United Artists Television, Inc.[10] was a copyright case, I find apt, for the purposes of the present case, the following observations (at p. 399) by Stewart J. delivering the opinion of the Supreme Court of the United States:

… Essentially, a CATV system no more than enhances the viewer's capacity to receive the broadcast­er's signals; it provides a well-located antenna with an efficient connection to the viewer's television set. It is true that a CATV system plays an "active" role in making reception possible in a given area, but so do ordinary television sets and antennas. CATV equipment is powerful and sophisticated, but the basic function the equipment serves is little different from that served by the equipment generally furnished by a television viewer.

[Page 159]

If an individual erected an antenna on a hill, strung a cable to his house, and installed the necessary amplify­ing equipment, he would not be "performing" the programs he received on his television set. The result would be no different if several people combined to erect a cooperative antenna for the same purpose. The only difference in the case of CATV is that the antenna system is erected and owned not by its users but by an entrepreneur.

I am unable to accept the submission of the appellants and of the Attorneys-General support­ing them that a demarcation can be made for legislative purposes at the point where the cable distribution systems receive the Hertzian waves. The systems are clearly undertakings which reach out beyond the Province in which their physical apparatus is located; and, even more than in the Winner case, they each constitute a single undertaking which deals with the very signals which come to each of them from across the border and transmit those signals, albeit through a conversion process, through its cable system to subscribers. The common sense of which the Privy Council spoke in the Radio case seems to me even more applicable here to prevent a situation of a divided jurisdiction in respect of the same signals or programmes according to whether they reach home television sets and the ultimate viewers through Hertzian waves or through coaxial cable.

The fallacy in the contention on behalf of the Attorney-General of' Ontario and of the Attorneys-General of Quebec and of British Columbia, and, indeed, of the appellants, is in their reliance on the technology of transmission as a ground for shifting constitutional competence when the entire undertaking relates to and is dependent on extra-provin­cial signals which the cable system receives and sends on to subscribers. It does not advance their contentions to urge that a cable distribution system is not engaged in broadcasting. The system depends upon a telecast for its operation, and is no more than a conduit for signals from the telecast, interposing itself through a different technology to bring the telecast to paying subscribers.

I agree with the submission of counsel for the Attorney-General of Quebec that since the Radio

[Page 160]

reference was concerned with a general question of legislative jurisdiction it was not itself determina­tive of the validity of any specific legislation. The constitutional question posed in the present case is, however, in the context of particular legislation, the Broadcasting Act enacted in 1968, but consti­tutionality is posited on the basis that the Act authorizes the regulation of cable distribution sys­tems which receive and distribute television sig­nals. Such signals may, of course, come by Hertzi­an waves from within a particular Province as well as from without it. The contention appears to be that since there is a local character to the cable distribution system in its physical aspect, and it may be receiving signals intraprovincially, it does not fall under total federal legislative authority. I understood, however, that it was conceded that federal jurisdiction was exclusive in respect of the receipt of signals at the antenna of the cable distribution system, wherever be their point of emanation. If that be the case, I do not see how legislative competence ceases in respect of those signals merely because the undertaking which receives them and sends them on to its local subscribers does so through a different technology.

In addition to the foregoing submissions, which do not differ from those made by others opposing federal jurisdiction, counsel for the Attorney-Gen­eral of Quebec denied federal authority over the content of cable television, at least at the point of distribution through the coaxial cables. This, however, simply rephrases the issue in the present case without changing its substance. What the reformu­lation suggests, however, is that the Parliament of Canada may regulate, perhaps by a licensing system, the equipment or machinery through which signals are received in international or inter-provincial transmission but that is all. There was a time when licensing of receiving sets was pre-scribed by federal legislation; but if, as is alleged, there is no authority to regulate content, it is difficult to understand how there can be a consti­tutional basis for federal licensing of receiving sets in a Province, or even of transmitting apparatus which sends signals by way of international and interprovincial transmission. To put the matter in another perspective, it would be as if an interprovincial

[Page 161]

or international carrier of goods could be licensed for such carriage but without federal con­trol of what may be carried or of the conditions of carriage.

This submission amounts to a denial of any effective federal legislative jurisdiction of what passes in interprovincial or international communi­cation, whether by radio or television, and is in truth an invitation to this Court to recant from the Radio case. It would, presumably, leave federal authority in relation to "telegraphs" intact, although reducing the meaning of that head of power from the meaning attributed to it by the Privy Council in the Radio case.

Although this Court is not bound by judgments of the Privy Council any more that it is bound by its own judgments, I hold the view that the Radio case was correctly decided under the terms of ss. 91 and 92(10)(a). Implicit in the objection raised to federal legislative authority in relation to the content of television programmes as they are trans­mitted by cable distribution systems is an attenua­tion of the meaning of the words "undertaking … extending beyond the limits of the Province" in s. 92(10)(a).

The Privy Council remarked in the Radio case that " 'undertaking' is not a physical thing but is an arrangement under which of course physical things are used" ([1932] A.C. 304, at p. 315). It returned to the matter in the Winner case where it distinguished a connecting work and a connecting undertaking, saying that "in the Radio case there was no connecting work only a connecting undertaking unless the somewhat fanciful suggestion were to be adopted that the flow of an electrical discharge across the frontier of a Province is to be regarded as a physicial connection" ([1954] A.C. 541, at p. 574). The technology of cable television does not make the operation of a cable distribution system which draws on signals emanating from outside Canada any less an "undertaking" than the radio operations which were the subject of enquiry in the Radio case. The word has been given a large meaning, as indicated by the references

[Page 162]

by Kellock J. in the Stevedoring case[11], at p. 556 to the broad view taken in both the Winner case[12], where the word "undertaking" was used interchangeably with "enterprise" and in the Empress Hotel case[13], where it was equated with "organization".

I am therefore in no doubt that federal legisla­tive authority extends to the regulation of the reception of television signals emanating from a source outside of Canada and to the regulation of the transmission of such signals within Canada. Those signals carry the programmes which are ultimately viewed on home television sets; and it would be incongruous, indeed, to admit federal legislative jurisdiction to the extent conceded but to deny the continuation of regulatory authority because the signals are intercepted and sent on to ultimate viewers through a different technology. Programme content regulation is inseparable from regulating the undertaking through which programmes are received and sent on as part of the total enterprise.

Another answer to the contention made on behalf of the Attorney-General of Quebec is pro­vided by the submissions made by counsel for the Attorney-General of Saskatchewan. Pointing to the way in which the constitutional question was phrased for consideration by this Court, counsel was of the opinion that legislative jurisdiction over foreign commercial content fell within exclusive federal authority in so far as the carrier system in the Province made use of the signals emanating from outside Canada.

Moreover, in supporting federal legislative au­thority in the particular relation in which the question about it arises here, counsel emphasized that Parliament has legislative authority in rela­tion to importation. He did not take issue with the position of the other intervenants that Rogers operates a provincial carrier system, but he did contend that in the present case control over content

[Page 163]

was competent to Parliament by reason of its authority in relation to the regulation of trade and commerce and, further, relying on the judgment of this Court in Caloil Inc. v. Attorney-General of Canada[14], he asserted that since Parliament may, in connection with its authority to regulate imports, impose restrictions in subsequent transac­tions in the imported product, there is an appli­cable analogy to its regulation here of the use or substitution of commercial messages carried by signals entering Canada from a source outside.

I cannot accept the submission made on behalf of the Attorney-General of Ontario that there are two undertakings involved in the operation of a cable distribution system, which receives and transmits television signals, simply because the transmission of the same signal to subscribers that it receives through Hertzian waves is done through a different technology. An attempt was made to support this submission by reference to railway and trucking cases but, without entering upon any discussion of them, it is enough to say that, in my opinion, they do not support the proposition that an interprovincial carrier of freight or passengers, which in its business brings freight or passengers to their destination by using combined rail and bus facilities, is in respect of that business operating two undertakings rather than one combined undertaking.

Similarly, I do not accept the contention made on behalf of the Attorneys-General of Quebec and of British Columbia that, prima facie, a cable distribution system is a local work or undertaking in respect of signals received from outside Canada and transmitted within the Province through coax­ial cable. I have already pointed out that programmes of local origination are not involved in the facts on which the constitutional issue under review has been raised.

Question l, Jurisdiction of the Commission

This question relates to the scope of the Broadcasting Act and to whether it delegates authority to the Canadian Radio-Television Commission to

[Page 164]

regulate cable distribution systems. The challenge to the authority of the Commission was rejected by the Federal Court of Appeal and, in my opinion, rightly so.

The contentions of the appellants on this issue are based, in the main, on the definition of "broadcasting" in s. 2 of the Act, a definition which embraces the definition of "radiocommunication" in the same section and which, in the result, according to the appellants, amounts to a limita­tion of meaning, as follows: transmission of signals by Hertzian waves intended for direct reception by the general public. Emphasis is placed on the concluding words of the definition of radiocommu­nication, namely, the words "without artificial guide". What emerges from the submissions of the appellants is a contention of severance of cable distribution systems as receiving systems from broadcasting transmitting stations, a contention not unlike that advanced in respect of the constitu­tional question.

The definitions of "broadcasting" and of "radio-communication" are as follows:

"broadcasting" means any radiocommunication in which the transmissions are intended for direct recep­tion by the general public;…

"radiocommunication" means any transmission, emis­sion or reception of signs, signals, writing, images, sounds or intelligence of any nature by means of electromagnetic waves of frequencies lower than 3,000 Gigacycles per second propagated in space without artificial guide;

It may be noted that radiocommunication embraces reception of signals by Hertzian waves as well as transmission of such signals.

What is relevant on the question at hand are the provisions of the Act assigning powers to the Com­mission. The powers are related to the realization of the objects of the Act set out in s. 3. So far as relevant here (and in relation to question 3 dealt with below) the objects are as follows:

3. It is hereby declared that

(a) broadcasting undertakings in Canada make use of radio frequencies that are public property and such

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undertakings constitute a single system, herein referred to as the Canadian broadcasting system, comprising public and private elements;

(b) the Canadian broadcasting system should be effectively owned and controlled by Canadians so as to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada;

(c) all persons licensed to carry on broadcasting undertakings have a responsibility for programs they broadcast but the right to freedom of expression and the right of persons to receive programs, subject only to generally applicable statutes and regulations, is unquestioned;

(d) the programming provided by the Canadian broadcasting system should be varied and comprehen­sive and should provide reasonable, balanced opportu­nity for the expression of differing views on matters of public concern, and the programming provided by each broadcaster should be of high standard, using predominantly Canadian creative and other resources;

…

Sections 15, 16 and 17 of the Act define the powers, respectively, of the Commission and of its Executive Committee. They are in the following terms:

15. Subject to this Act and the Radio Act and any directions to the Commission issued from time to time by the Governor in Council under the authority of this Act, the Commission shall regulate and supervise all aspects of the Canadian broadcasting system with a view to implementing the broadcasting policy enunciated in section 3 of this Act.

16. (1) In furtherance of its objects, the Commission, on the recommendation of the Executive Committee, may

(a) prescribe classes of broadcasting licences;

17. (1) In furtherance of the objects of the Commis­sion, the Executive Committee, after consultation with the part-time members in attendance at a meeting of the Commission, may

(a) issue broadcasting licences for such terms not exceeding five years and subject to such conditions related to the circumstances of the licensee

(i) as the Executive Committee deems appropriate for the implementation of the broadcasting policy enunciated in section 3, and

[Page 166]

(ii) in the case of broadcasting licences issued to the Corporation, as the Executive Committee deems consistent with the provision, through the Corporation, of the national broadcasting service contemplated by section 3;

(b) upon application by a licensee, amend any condi­tions of a broadcasting licence issued to him;

(c) issue renewals of broadcasting licences for such terms not exceeding five years as the Executive Com­mittee considers reasonable and subject to the condi­tions to which the renewed licences were previously subject or to such other conditions as comply with paragraph (a);

…

Germane to the foregoing provisions are the definitions of "broadcasting licence" and "broadcasting undertaking", found in s. 2 of the Act. They read as follows:

"broadcasting licence" or, in Parts II and III, "licence" means a licence to carry on a broadcasting undertak­ing issued under this Act;

"broadcasting undertaking" includes a broadcasting transmitting undertaking, a broadcasting receiving undertaking and a network operation, located in whole or in part within Canada or on a ship or aircraft registered in Canada;

It is patent to me that a cable distribution system, at least one which receives signals from a broadcaster and sends them through the system, is a broadcasting receiving undertaking and is in that respect at least within the regulatory and licensing authority of the Commission. This view is reinforced by s. 29(3) of the Act which is as follows:

29. ...

(3) Every person who carries on a broadcasting undertaking without a valid and subsisting broadcasting licence therefore [sic], or who, being the holder of a broadcast­ing licence, operates a broadcasting undertaking as part of a network other than in accordance with the condi­tions of such licence, is guilty of an offence and is liable on summary conviction to a fine not exceeding one thousand dollars for each day that the offence continues.

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The present case, I should emphasize, is not con­cerned with close circuit systems independent of broadcasting as defined in the Act.

There is an element of incongruity in the present case in that the Rogers companies, which operate cable distribution systems and are licensed under the Act, do not doubt their liability to the author­ity of the Commission and it is the appellants, although not licensed by the Commission, which object to the licensing control exercised by the Commission over the licensees.

More than general regulatory authority is, however, challenged in the present case under the terms of the Act. It is argued that the powers of the Commission do not encompass the regulation of the content of television programmes and, in any event, do not extend to interference with any such programmes once the signals have been received at the antennae of cable distribution sys­tems. Attention is directed to s. 3(c) of the Act and to s. 17(1)(b), and I set them out again for convenient reference:

3.           ...

(c) all persons licensed to carry on broadcasting undertakings have a responsibility for programs they broadcast but the right to freedom of expression and the right of persons to receive programs, subject only to generally applicable statutes and regulations, is unquestioned;

17. (1) In furtherance of the objects of the Commis­sion, the Executive Committee, after consultation with the part-time members in attendance at a meeting of the Commission, may

(b) upon application by a licensee, amend any condi­tions of a broadcasting licence issued to him;

I find no merit in the submission, made under s. 3(c), that cable distribution systems are protected thereunder against any Commission authority to permit deletion of commercial messages received by them, I call agree that the licensees mentioned in s. 3(c) are broadcasting transmitting stations, but it does not follow that cable distribution systems

[Page 168]

are covered by the words "the right of persons to receive programs ... is unquestioned". (It was conceded that there are no "generally appli­cable statutes and regulations" other than the Broadcasting Act and any regulations thereunder.) The words more aptly apply to ultimate receivers of programmes but, whether they do or not, I would not read s. 3(c), a general object clause, as prevailing over the specific licensing authority of the Commission, an authority which is under a generally applicable statute. Mr. Robinette sub­mitted, on behalf of the Commission, that having regard to s. 16(1)(b)(iii) and (iv) of the Act and to s. 28(2) (which refer to "programs, advertisements or announcements"), the word "program" in s. 3(c) should be read as excluding commercial messages or advertising. 1 do not need to rely on this submission in the present case.

A second contention urged against what the Commission did in this case turns on the scope of s. 17(1)(b) of the Act, empowering the Executive Committee "upon application by a licensee, [to] amend any conditions of a broadcasting licence issued to him". It is alleged that the licences held by the Rogers companies did not contain any conditions which could be said to be amended by what was done here in authorizing deletion of commercial messages and substitution of public service announcements. This seems to me to fly in the face of the provisions of the licences held by the Rogers companies who were authorized thereunder to receive and distribute the signals of the very stations operated by the appellants.

The appellants would give a strictly technical meaning to the word "conditions" and a limited meaning to the word "amend" in s. 17(1)(b). In my opinion, the Act, read as a whole, and s. 17(1) read in its context, make it abundantly clear to me that s. 17(1)(b) refers simply to any change in the terms governing any licence issued by the Execu­tive Committee. The words in s. 17(l) are not to be construed as if they were part of a common law conveyance.

[Page 169]

Question 3, Alleged Excess of Jurisdiction

On the assumption of jurisdiction in the sense canvassed in the answer to question 1, two further issues are raised touching the exercise of authority by the Commission in the present case. Paragraph (b) of question 3 refers to that portion of the Commission's decision in which it made its consent a prerequisite to any settlement by the respondents of litigation initiated against them by the appel­lants in the Federal Court. I can find no basis in the Act for this requirement. The concern of the Commission that any settlement should not preju­dice the ability of the respondents to carry out their obligations under the Broadcasting Act is understandable, but the Commission has licensing control which it can exercise to secure such con­formity. There may be issues in a settlement which could not be of any concern to the Commission in respect of its authority, and it is an overreaching for it to include a requirement in its decision of its consent to the settlement of private litigation. This part of the decision is clearly severable; indeed, it was not argued by the appellants that the whole decision must fall if this part was beyond the Commission's authority.

Paragraph (a) of question 3 alleges an excess of jurisdiction because the Commission's decision was based on a policy statement and not on law or regulation. Two points are made in respect of this submission; first, s. 3(c) is again invoked to support the assertion that there can be no regulation of programme content unless there are applicable regulations (and none were shown to exist); and s. 16(1) is referred to which authorizes regulations, applicable to all persons holding broadcast licences, with respect to such matters as standards of programmes, the character of advertising and the proportion of time that can be devoted to programmes, advertising or announcements. There are requirements that must be met both under s. 16(2) and under the Statutory Instruments Act, 1970-71-72 (Can.), c. 38 before any regulation becomes effective and it was asserted, without contradiction, that there were as yet no regulations respecting cable distribution systems.

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The issue that arises therefore is whether the Commission or its Executive Committee acting under its licensing authority, is entitled to exercise that authority by reference to policy statements or whether it is limited in the way it deals with licence applications or with applications to amend licenses to conformity with regulations. I have no doubt that if regulations are in force which relate to the licensing function they would have to be followed even if there were policy statements that were at odds with the regulations. The regulations would prevail against any policy statements. However, absent any regulations, is the Commission obliged to act only ad hoc in respect of any application for a licence or an amendment thereto, and is it precluded from announcing policies upon which it may act when considering any such applications?

Apart from the argument that the Commission's powers do not extend to cable distribution systems, an argument which I have rejected, it is not contended by the appellants that the policy statement, to which reference was made in the decision in this case, deals with matters going beyond the Com­mission's authority. Reference is, however, made to ss. 16 and 17 of the Act, dealing respectively with power to make regulations and power to issue and amend licences, both of which are qualified by the opening words "in furtherance of its objects". The appellants seemed to regard these provisions as requiring an input of the policy considerations in s. 3 only as regulations are promulgated or on an individual basis when applications are under consideration.

The respondent's position on the foregoing contentions was that since the Commission held a hearing on the application of the Rogers compa­nies, a hearing at which the appellants were heard as to the policy of the Commission and as to the merits of the application, the power of the Com­mission could not be challenged as having been exercised improperly. Reliance was also placed on what was said by Bankes L.J. in R. v. Port of London Authority ex p. Kynoch[15], at p. 184 and

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by the House of Lords in British Oxygen Co. v. Board of Trade[16], at p. 624.

In my opinion, having regard to the embracive objects committed to the Commission under s. 15 of the Act, objects which extend to the supervision of "all aspect of the Canadian broadcasting system with a view to implementing the broadcasting policy enunciated in section 3 of the Act", it was eminently proper that it lay down guidelines from time to time as it did in respect of cable television. The guidelines on this matter were arrived at after extensive hearings at which interested parties were present and made submissions. An overall policy is demanded in the interests of prospective licensees and of the public under such a regulatory regime as is set up by the Broadcasting Act. Although one could mature as a result of a succession of applica­tions, there is merit in having it known in advance.

The objection taken under para. (a) of question 3 must, accordingly, be dismissed.

Question 4, The International Convention Issue

Counsel for the appellants made a number of submissions connected with Canada's adherence as a party to the Inter-American Radio Communica­tions Convention of 1937 to which the United States was also a party. The submissions, which were put forward in challenge of the validity of the decision of the Commission to permit deletion of the commercial messages emanating from the appellants as part of their programmes, were as follows: (1) The Commission was an agent of the Canadian Government and as such bound by the terms of the Convention; (2) the Broadcasting Act should be interpreted in the light of the Conven­tion, or in such a way as not to violate Canada's international obligations thereunder; and (3), the most important submission, the implementation of the Convention to have domestic effect was prescribed by s. 3(1)(c) of the Radio Act, (1938) (Can.), c. 50 and such implementation is presently in place pursuant to s. 7(1)(d) and s. 8 of the Radio Act, R.S.C. 1970, c. R-l and under s. 11 of

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the Radio Regulations, Part II which makes effec­tive as part of federal law articles 11 and 21 of the Convention.

The Convention under discussion was signed by Canada and other parties thereto on December 13, 1937 and ratified by Canada on December 22, 1938 on which date Parts I, III and IV thereof became effective. Part III which consists of articles 11 to 22 inclusive is the relevant part of the Convention for present purposes. Section 3(1)(c) of the Radio Act of 1938 reads as follows:

3. (1) The Governor in Council may

(c) accede to any international convention in connec­tion with radio, and make such regulations as may be necessary to carry out and make effective the terms of such convention…

The present Radio Act, by s. 7(1)(d), confers upon the responsible Minister the power to make regulations

… to carry out and make effective the terms of any international agreement, convention or treaty respecting telecommunications to which Canada is a party.

Section 8(1) is in these terms:

8. (1) The Minister shall take such action as may be necessary to secure, by international regulation or otherwise, the rights of Her Majesty in right of Canada in telecommunications matters and shall consult the Canadian Radio-television and Telecommunications Commission with respect to all such matters, that, in his opinion, affect or concern broadcasting.

Turning to the appellants' submissions in the order in which they were made, I am unable to appreciate how it can be said that the Commission is an agent or arm of the Canadian Government and as such bound by the Convention provisions in the same way as the Government. There is nothing in the Broadcasting Act, nor was our attention directed to any other legislation which would give the Commission any other status than that of a federal regulatory agency established with defined statutory powers. There is nothing to show that it derives any authority from the Convention or that the Convention, per se, qualifies the regulatory

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authority conferred upon the Commission by the Broadcasting Act. Indeed, if the contention of the appellants has any force under its first submission it can only relate to the obligations of Canada

under the Convention towards other ratifying signatories. There would be no domestic, intern 1 consequences unless they arose from implementing legislation giving the Convention a legal effect within Canada.

The second submission asks this Court to say that the provisions of the Broadcasting Act are ambiguous in so far as they relate to the powers of the Commission, and that as an aid to their con­struction resort should be had to the terms of the Convention. I do not find any ambiguity that would require resort to the Convention, which is, in any event, nowhere mentioned in the Broadcasting Act; and certainly the Convention per se cannot prevail against the express stipulations of the Act: cf. R. v. Chief Immigration Officer, Hea­throw Airport[17], at p. 850.

This brings me to the final submission as to the effect, if any, of an alleged implementation of the Convention so as to restrict the powers of the Commission.

I do not see how s. 8(1) of the Radio Act has any bearing on the point advanced by the appel­lants, but s. 7(1)(d) and existing regulations under the Radio Act must be considered. "Telecommuni­cations" referred to in s. 7(1)(d) is defined in s. 2 of the Radio Act as follows:

"telecommunication" means any transmission, emission or reception of signs, signals, writing, images or sounds or intelligence of any nature by wire, radio, visual or other electro-magnetic system.

This is a definition which in its mention of "radio" embraces, of course, the meaning given to "radio" in s. 2 of the Act, and that meaning is a descrip­tion of Hertzian waves. The appellants point to s. 11 of the General Radio Regulations, Part II as

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applicable to the present case and to the Rogers companies. It is in these terms:

11. The licensee shall observe the provisions of the International Telecommunication Convention and any ' bilateral or multi-lateral telecommunication agreements for the time being in force and those regulations pertain­ing to the operation of radio that are made under the said convention and agreements.

The contention is that the Convention relied upon here was in force pursuant to the Radio Act of 1938 and is now covered by s. 11 aforementioned. The particular terms of the Convention invoked by the appellants are articles I I and 2 1 . Article I 1 is a provision entitled "General Principles" and reads as follows:

ARTICLE Il
General Principles

(a) The contracting Governments recognize the sov­ereign right of all nations to the use of every radio broadcasting channel.

(b) The American Governments, upon the sole condi­tion that no interference will be caused to the services of another country, may assign any frequency and any type of wave to any radio station under their authority.

(c) Nevertheless, the Governments recognize that, until technical development reaches a state that per­mits the elimination of radio interference of interna­tional character, regional arrangements are essential in order to promote standardization and to minimize such interference.

(d) For the solution of those problems which, because of special propagation characteristics and interference conditions of radio transmission in the various geo­graphical zones require special provisions, the con­tracting Governments agree to divide the American continent into three regions, designated as the northern zone, the central zone, and the southern zone (Annex 3).

Assuming that this article has any application to television, I do not see how it assists the appellants' contention that the powers of the Commission, so far as they were used to authorize the deletion of commercial messages from the programmes of the appellants, are restricted thereby. Article 11 merely confirms national claims to the use of radio

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channels and to the right of the signatories to the Convention to assign radio frequencies provided this will not cause interference to the services of another signatory. It is concerned with the elimi­nation of radio interference, as for example through overlapping frequencies, and not with programming.

There is, moreover, another answer to this third submission of the appellants. Section 11 of the Radio Regulations concerns licensees under the Radio Act, and it is the fact that the Rogers companies hold only technical construction and operating certificates under the Radio Act; their programming licences are held under the Broadcasting Act which is not a statute in implementa­tion of the Convention.

Article 21 of the Convention, under the heading "Retransmissions", reads:

ARTICLE 21

Retransmissions

The contracting Governments shall take appropriate measures to ensure that no program transmitted by a broadcasting station may be retransmitted or rebroad­cast, in whole or in part, by any other station without the previous authorization of the station of origin.

The rebroadcasting station shall announce at suitable periods during the retransmission the nature of the broadcast, the location and the official call letters or other identification of the station of origin.

One answer to the arguments of the appellants under this article was provided by Ryan J.A. in the Federal Court of Appeal, noting in his reasons that "any other station" refers to any other broadcast­ing station, and the Rogers companies are not of that class but are rather broadcasting receiving undertakings. Further, as pointed out by the respondent, Article 21 itself contemplates particu­lar implementation of its provisions by the con­tracting Governments, and only if there has been such implementation and to the extent thereof can domestic force be given to the article. In the present case, although licences issued to cable distribution systems prior to 1970 included a provision

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against the alteration of any signals received from a broadcasting station without the consent of that station, the regulation which authorized this condition was revoked in 1970, and there is no longer any prohibition against authorizing altera­tions of signals received from a broadcasting sta­tion. I should add that it is by no means clear that article 21 of the Convention has any application to cable distribution systems but I need not decide that here.

In the result, I would dismiss the appeal with costs in this Court and would answer the questions presented for the consideration of this Court as follows:

Question 1:       No.

Question 2:       No.

Question 3:

(a): No.

(b): Yes.

Question 4:       No.

Question 5: The issue stated in this ques­tion does not arise for deter­mination here, but standing should not be denied on that account to the appellants in this Court.

There will be no costs to or against any of the intervenants.

The judgment of Pigeon, Beetz and de Grandpré JJ. was delivered by

PIGEON J. (dissenting)—Each of the appellants operates a Buffalo TV station whose broadcasts are received in an area including Toronto. Rogers Cable TV Limited, Coaxial Colourview Limited and Bramalea Telecable Limited operate cable networks ("CATV") distributing TV and FM sig­nals to some 120,000 subscribers (as of October 1, 1973) in and around Toronto. They will be hereaf­ter referred to as "Rogers".

On July 16, 1971, the respondent Canadian Radio-Television Commission (the "Commission") issued a "Policy statement on cable television" including the following:

... The Commission will permit the removal by cable television licensees of the commercial value contained in

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the signals of stations not licensed to serve Canada. While cable television licensees will not be permitted to sell replacement commercial messages themselves, they will be encouraged to make contractual arrangements with Canadian television stations in their areas to insert replacement signals carrying commercial messages sold by the Canadian television stations.

On August 16, 1973, Rogers sent to the respondent the following Telex message:

Three threatening registered letters just arrived on behalf of Channels 2, 4 and 7, Buffalo signed by Gordon Henderson pursuant to our random commercial deletion and substitution policies. The Rogers Group of Compa­nies hereby apply for a licence amendment to permit commercial deletion and substitution on a random basis on all United States Television Stations carried from time to time on the basic service which presently includes channels 2, 4 and 7 Buffalo. A random basis means three or more substitutions per evening on at least one of the Channels in alternation. All substitution messages would be special promotional information to subscribers such as free antenna removal, discounts for annual prepayment, additional channel offerings and the like as well as messages of general public interest. Please include as part of our licence amendment application which we hope will be heard at the public hearing in November.

The appellants intervened to oppose this applica­tion which was granted by the Commission under date May 1, 1974. An appeal to the Federal Court of Appeal, together with an application under s. 28 of the Federal Court Act, was dismissed on Janu­ary 17, 1975. An appeal to this Court was taken by leave of this Court. On this appeal notice of a constitutional question was given with respect to the Commission's authority "to license and to regulate the content of programs carried by CATV systems situated wholly within provincial boundar­ies". The Attorney-General for Canada intervened to support the legislation and the Attorneys-Gen­eral for the provinces of Ontario, Quebec, British Columbia, Saskatchewan and Alberta, to challenge it.

[Page 178]

It does not appear to me that there is any need in the present case to consider in a general way the extent of federal jurisdiction over CATV. We are concerned here exclusively with the Commission's jurisdiction to authorize the deletion of commer­cials from TV programs received by hertzian waves from U.S. broadcasting stations. This means that we are solely concerned with the regulation of the use that may be made of signals received from a foreign country by persons licensed to receive them for commercial purposes i.e., distribution to subscribers. In my view, this means that, irrespec­tive of any other consideration, the judgment of this Court in Caloil Inc. v. Attorney General of Canada[18], is conclusive authority in support of federal jurisdiction to control such use. Laskin J., as he then was, stated as follows the ground on which there was unanimous agreement (at p. 553):

… the admitted authority of Parliament to regulate importation of goods from foreign countries was validly exercised in this case in including as part of the regula­tory scheme a provision restricting the area of distribu­tion of the goods within Canada by their importer.

Without dwelling at any length on the technical aspects of TV broadcasting and CATV, I find it necessary to devote some consideration to the eco­nomic structure of those operations. The income of TV broadcasters is essentially derived from the sale of commercials. The value of their programs lies therefore in the size of the audience they attract because the price they can obtain for the advertising spots depends on the size of that audi­ence. They may, of course, sell time for broadcast­ing speeches and the like, but it is clear from the material in the case that, when the commercials are deleted from an ordinary TV program its commercial value is taken away. TV stations are not presently operating in a way which would enable them to obtain payment from program viewers.

On the other hand, CATV operates on the basis of providing a service to subscribers in consider­ation of an installation charge and a monthly fee. For some subscribers CATV is the only practical way of obtaining satisfactory signals, for many others, besides eliminating problems inherent in an

[Page 179]

antenna, it also provides a greater variety or better quality of signals. Irrespective of the reasons which bring set owners to CATV, the fact is that it reaches a large and growing number of TV set owners amounting to a commercially significant proportion of the TV stations audience, in some cases as much as 60 per cent. As mentioned in Notes published in the Harvard Law Review (Vol. 79, 1965-66, pp. 366-367), connection of a TV set to CATV usually means that signals are no longer received otherwise.

It is therefore apparent that if CATV operators were allowed to delete commercials from TV programs generally and to sell substitute messages for their own benefit, the whole economic basis of TV broadcasting stations, as well as of private FM radio stations, could ultimately be seriously affected. Hence the question: Does the TV and FM broadcasters' interest in their signals carried over CATV, depend exclusively on the policy of the licensing authority in that respect? The Policy statement of July 16, 1971, seems to imply the view that CATV operators could lawfully appro­priate the commercial value of programs distribut­ed to their subscribers, if not prohibited to do so by the licensing authority. It says:

While cable television licensees will not be permitted to sell replacement commercial messages themselves, they will be encouraged to make contractual arrangements with Canadian television stations in their areas to insert replacement signals carrying commercial messages sold by the Canadian television stations. (Italics added)

Rogers did not contract for the sale of substitute commercials through Canadian TV stations and it is therefore unnecessary to consider how such appropriation of the commercial value of appel­lants' program should be characterized. However, when threatened with legal proceedings, Rogers obviously became concerned with the validity of the assumptions inherent in the Policy statement. They therefore sought and obtained from the

[Page 180]

Commission an order which they now seek to support as a condition appended to their licences. To avoid, as much as possible, going into matters which are or may be the subject of other litigation, I will not dwell upon the civil aspect of the opera­tion authorized by the Commission beyond noting that it involves the appropriation by the CATV operators of some of the commercial value of the appellants' broadcasts in the area served by Rogers, to the extent that TV sets in that area are fed by CATV rather than by an antenna. This appropriation is being made partly to Rogers' ben­efit (promotional information), partly the benefit of what Rogers consider a general public interest to be served.

I fail to see on what basis a distinction should be made in respect of the validity of the impugned order depending on the beneficiary of the substi­tute messages, Furthermore, there is no minimum proportion of general public interest messages specified. It seems to me that, from a legal point of view, the question must be considered on the basis that the impugned order authorizes Rogers to appropriate the commercial value of the appel­lants' programs carried on their CATV network. While the order does not permit the appropriation for the purpose of realizing a profit by selling substitute messages, I do not see what difference it makes whether the possible benefit is limited to the promotion of their business or may be expanded to include a realization by sale, as contemplated in the Policy statement. It therefore appears to me that in order to uphold the impugned order, it must be found that the Commission has the power of authorizing CATV operators to appropriate to themselves the value of TV programs carried on their network or it must be held that those operators may lawfully do it without such authorization unless prohibited by the Commission.

In considering whether either position is sustainable, one should bear in mind the nature of the right enjoyed by broadcasters. We must not be misled by the statement that licensees do not own the channel assigned to them, that they only enjoy a privilege which may be revoked by the licensing authority. The licence is not revokable at will but

[Page 181]

only for cause and, furthermore, it is really exclu­sive. The licensees of TV channels are not in the same situation as operators on citizen band or amateur band channels. A channel is assigned to a TV station in exclusivity within the area it is designed to serve and no licence will be granted to a station in another area if its signals are likely to cause interference. The Policy statement calls the TV station licence a "franchise". Although immaterial, the channel licensed to a TV station is therefore just as exclusive in its service area as the territory licensed to a CATV operator. These oper­ators are clearly in the situation of utilities li­censed to serve a definite territory on terms and conditions subject to control by the licensing au­thority. It is clear that each of them enjoys by his licence an exclusive franchise to serve his allotted territory. I can see no reason why the situation of each TV broadcaster in respect of his assigned channel would be legally inferior because his chan­nel is immaterial.

In view of what I have just said, it appears to me that the Commission could not authorize a CATV operator to delete commercials from TV programs broadcast by a station licensed for a channel in the area. It would be an interference with the rights conferred by the licence. It would mean that the Commission would take away a part of the broadcaster's rights in respect of its legitimate clientele. It is equally clear, in my view, that CATV operators could not, apart from any condition or policy established by the Commission, appropriate to themselves the commercial value of broadcasts from licensed stations carried on their network, by selling commercials to be substituted for those that are broadcast by the station. It would be an infringement of the rights derived from the licence and possibly other rights also. The case of broadcasts from remote stations brought in by CATV would be different. It is doubtful if they would suffer injury by alteration of their signals in an area where they would otherwise not be received. In the Policy statement the Commission was concerned

[Page 182]

with the detriment suffered by a local station under those conditions due to the competi­tion for the audience, but it is not an invasion of the licensed channel.

In the instant case, the programs from which commercial messages were being removed and replaced by Rogers did not come from Canadian licensed stations but from neighbouring U.S. sta­tions. However, this was done in an area where the signals from those stations can be received directly on their assigned channels. The Policy statement makes it clear that, while it intended to guard jealously the interest of the Canadian TV stations, it intended to promote in their interest the kind of economic aggression against U.S. stations in which Rogers has been indulging at its urging:

The Commission has indicated in previous policy announcements how unlimited penetration by United States stations on a wholesale south to north basis would completely destroy the licensing logic of the Canadian broadcasting system as established by the Broadcasting Act. If a solution is not found to integrate cable into the overall system, the impact, by fracturing the economic basis of the private broadcasters, would also disrupt the Canadian cultural, educational and information impera­tives of both the public and private sectors of the Canadian broadcasting system.

Of course, there is nothing new in protectionism. Governments have for a long time been levying customs duties, setting quotas or decreeing embargoes for a variety of reasons with which courts of law are not to be concerned. However, the Commission is not the Government and it does not enjoy the executive privilege which sometimes results in what is called "acts of state" against which a foreigner has no remedy before the courts. The Commission is an agency directed by the statute governing it, the Broadcasting Act (R.S.C., c. B-11) to implement the broadcasting policy enunciated in s. 3 of the Act. The first two paragraphs of s. 3 read:

[Page 183]

3. It is hereby declared that

(a) broadcasting undertakings in Canada make use of radio frequencies that are public property and such undertakings constitute a single system, herein referred to as the Canadian broadcasting system, comprising public and private elements;

(b) the Canadian broadcasting system should be effectively owned and controlled by Canadians so as to safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada;

…

In addition to those provisions, it is necessary to consider that Canada is a party to the Inter-American Radiocommunications Convention of December 13, 1937 of which articles 11 and 21 are as follows:

Article 11
General Principles

(a) The contracting Governments recognize the sov­ereign right of all nations to the use of every radio broadcasting channel.

(b) The American Governments, upon the sole condi­tion that no interference will be caused to the services of another country, may assign any frequency and any type of wave to any radio station under their authority.

(c) Nevertheless, the Governments recognize that, until technical development reaches a state that per­mits the elimination of radio interference of interna­tional character, regional arrangements are essential in order to promote standardization and to minimize such interference.

(d) For the solution of those problems which, because of special propagation characteristics and interference conditions of radio transmission in the various geo­graphical zones require special provisions, the con­tracting Governments agree to divide the American continent into three regions, designated as the northern zone, the central zone, and the southern zone (Annex 3).

Article 21
Retransmissions

The contracting Governments shall take appropriate measures to ensure that no program transmitted by a broadcasting station may be retransmitted or rebroad­cast, in whole or in part, by any other station without the previous authorization of the station of origin.

[Page 184]

The rebroadcasting station shall announce at suitable periods during the retransmission the nature of the broadcast, the location and the official call letters or other identification of the station of origin.

In respect of those stipulations of the Conven­tion, the first questions arising are whether the deletion of the commercials effected by Rogers is an "interference" with the signals of the U.S. stations and whether the distribution of the U.S. stations programs by Rogers to their subscribers is a retransmission or rebroadcast by another station. Rogers' submission is that the Convention contem­plates only interference with hertzian waves and rebroadcast by the same means. When the Con­vention was executed, CATV was unknown and unforeseen and, if articles 11 and 21 are read in light of the techniques available at the time, Rogers' submission may be unassailable, but I do not think they are properly to be so read.

The Ianguage of the Convention shows that the parties were well aware that they were dealing with a developing technology. It appears to me that the general intention should be given effect in the Iight of present developments, rather than on a strict construction of the language used. I must agree that Rogers do not interfere with hertzian waves radiating from the appellants' antennae, these waves can still be received on their assigned channels by a suitable antenna. However, the effect of the CATV set-up is that, in effect, the appellants' programs are now available to CATV subscribers only as delivered by Rogers. The latter are "broadcasting undertakings" under the Broadcasting Act. They should therefore be considered as broadcasting to their numerous subscribers. It seems to me that to hold that this is not a retrans­mission or rebroadcast within the meaning of article 21 of the Convention, is to fail to give effect to the true intention. It is to allow the intention to be defeated by using a different means to accom­plish the same result. If Rogers after picking-up the appellants' programs with a suitable aerial were rebroadcasting them by hertzian waves on another channel against appellants' opposition, it would be a clear violation of article 21. Why

[Page 185]

should it make a difference from the point of view of the Convention if this rebroadcasting is done by means of coaxial cables, when the net result is essentially the same?

Some of the legal consequences of the transmis­sion of TV programs by coaxial cable were con­sidered, in respect of copyright legislation, in two cases that came at the same time, one before this Court, the other before the Supreme Court of the United States. The case in this Court was Com­posers, Authors and Publishers Association of Canada Ltd. v. CTV Television Network Ltd.[19] The question was whether CTV was infringing composers' copyright by transmitting programs to stations holding licences to broadcast the copy-righted works. After finding that such transmis­sion to the stations was not "a communication of the works" within the literal meaning of the stat­ute, this Court held that, on the basis of the intention disclosed by the language of the treaty annexed to the statute, it did not constitute an infringement, the treaty provision being aimed only at radio communications to the public i.e., broadcasts. Shortly afterwards, the Supreme Court of the United States reversed the judgment of the Federal Court of Appeals which has been pressed on us (Fortnightly Corp. v. United Artists[20]. Its conclusion was that the CATV operator (Fortnightly Corp.) did not infringe the rights of the copyright holders in distributing to its subscribers television programs broadcasts by stations holding a copyright licence. Stewart J. said in giving the opinion of the Court (at pp. 395-396):

At the outset it is clear that the petitioner's systems did not "perform" the respondent's copyrighted works in any conventional sense of that term, or in any manner envisaged by the Congress that enacted the law in 1909. But our inquiry cannot be limited to ordinary meaning and legislative history, for this is a statute that was drafted long before the development of the electronic phenomena with which we deal here. In 1909 radio itself was in its infancy, and television had not been invented.

[Page 186]

We must read the statutory language of 60 years ago in the light of drastic technological change.

In my view the same principle is a fortiori to be applied in construing an international convention as in construing a statute. While the language may reflect the state of technological development at the time of writing, this should not serve to stifle the application of the principles enunciated. The intention disclosed should be applied to unforeseen developments instead of being restricted to what was in existence at the time of writing. In Fortnightly Corp. CATV was adjudged to be merely a conduit bringing to the viewers the programs broadcast by the licensed TV stations. In view of the grounds of the decision, a different conclusion would, I think, have been reached if the programs had been recorded and rebroadcast by the CATV operator. It would have been new performances rather than a means of bringing the broadcasts to their audience.

In the present case, I doubt whether Rogers can properly be said to be interfering with the recep­tion of appellants' broadcasts when deleting com­mercials and substituting new messages. I rather incline to the view that Rogers are rebroadcasting appellants' programs. However, I feel sure that it must be one or the other. If Rogers are not con­sidered as rebroadcasting, then this means that they are considered as a mere conduit and, in that view of the case, the deletion of commercials is an interference.

I can find no merit in the contention that no TV station has so far complained of a CATV operator rebroadcasting its programs without its authoriza­tion. It is obvious that when the whole programs of a station are carried by a CATV operator it suffers no detriment, but on the contrary may gain an advantage. However, the situation becomes radi­cally different when, instead of delivering to the subscribers the whole programs as received, com­mercials are deleted and other messages are sub­stituted. In so doing, as I have previously pointed out, the CATV operator, instead of allowing the broadcasting station to retain the commercial

[Page 187]

value of its programs, appropriates it to itself or to other interests. I can see no reason why, under such circumstances, the broadcasters may not rely on the Convention provisions to object to such rebroadcasting without their authorization.

The next question is whether the appellants can rely on the international convention on an appeal to the courts from the decision of the Commission. The Radio Act, (R.S. c. R-1, s. 7) includes the following provision:

7. (1) The Minister may make regulations

(d) to carry out and make effective the terms of any international agreement, convention or treaty respect­ing telecommunications to which Canada is a party;

Pursuant to the predecessor of this enactment, the General Radio Regulations established by SOR/63/297 included the following provision which is still in force:

11. The licensee shall observe the provisions of the International Telecommunication Convention and any bilateral or multi-lateral telecommunication agreements for the time being in force and those regulations pertain­ing to the operation of radio that are made under the said convention and agreements.

When this regulation was enacted, all radio licences including those of TV stations and CATV networks were issued under the Radio Act. However, when the Broadcasting Act was enacted in 1968 (1967-1968 (Can.) c. 25), it was provided that licences to broadcasting undertakings, an expression which includes CATV as well as TV stations, would be issued by the Commission with the Department of Transport issuing a "technical construction and operating certificate". Rogers' submission is that, as a result of this change, they are not licensees within the meaning of Regulation 11. In my view, such technical construction of the Regulation is unjustified. The word "licensee" is not defined in the General Radio Regulations or

[Page 188]

in the Radio Act. Under ordinary circumstances it would apply only to licensees under that Act. However, this is a very special situation. The licensing function has been divided between two governmental authorities. Although Rogers are not licensees under the Radio Act, they are licensees in respect of their broadcasting undertaking. Nothing in the legislation enacted in 1968 or in the amend­ments to the Regulations indicates any intention to free broadcasting undertakings from the obligation of complying with Convention provisions. Regula­tion 11 was merely left unchanged. Under such circumstances this should mean that its scope and meaning remain unchanged.

Even on the assumption that Reg. 11 is now inapplicable to broadcasting undertakings, I cannot agree that the Commission may properly issue authorizations in violation of Canada's treaty obligations. Its duty is to implement the policy established by Parliament. While this policy makes no reference to Canada's treaty obligations, it is an integral part of the national structure that external affairs are the responsibility of the Federal Gov­ernment. It is an oversimplification to say that treaties are of no legal effect unless implemented by legislation. In this connection I would refer to the judgment of the English Court of Appeal in Post Office v. Estuary Radio Ltd.[21] The question was whether a broadcasting station erected in the sea beyond the three-mile limit in force when the Wireless Telegraphy Act, 1949 was enacted, could be said to be operating illegally because it was now within the extended limits established by an international convention proclaimed by an Order in Council. Diplock L.J. said (at pp. 756-7):

It is common ground that the area included in the internal waters of the United Kingdom under the Con­vention, at any rate as respects "bays," is greater than that previously claimed by the Crown. No question,

[Page 189]

therefore, arises as to the Crown's right to abandon sovereignty without the authority of Parliament; and the Convention, of which this court must take judicial notice, thus constituted a declaration by the Crown of an extension to the area over which it would claim to exercise territorial sovereignty as internal waters of the United Kingdom when the Convention came into force, as it did, on September 10, 1964-a matter which lies within the sole prerogative power of the Crown without any constitutional need for the consent of Parliament. Had the Convention stood alone, it would have been binding upon this court and conclusive as to the area comprised in the "territorial waters" of the United Kingdom. But on September 25, 1964, it was followed by another declaration by the Crown in the form of an Order in Council, and this, since it is later in date, is the document by which we are bound and which we have to construe. If its meaning is clear, we must give effect to it, even if it is different from that of the Convention, for the Crown may have changed its mind in the period which elapsed between its ratification of the Convention on March 14, 1960, and the promulgation of the Order in Council, and the Crown has a sovereign right, which the court cannot question, to change its policy, even if this involves breaking an international convention to which it is a party and which has come into force so recently as fifteen days before.

But there is a presumption that the Crown did not intend to break an international treaty (see Salomon v. Commissioners of Customs and Excise), and if there is any ambiguity in the Order in Council, it should be resolved so as to accord with the provisions of the Convention in so far as that is a plausible meaning of the express words of the order…

Applying those principles, I would say that, on the appeal from the decision of the Commission, judicial notice ought to be taken that, by virtue of the Convention the appellants had a legal interest entitled to protection in the use of their assigned channels, for broadcasts in an area extending into Canada. Therefore the Commission could not validly authorize an interference with this interest in violation of the convention signed by Canada. I do not think it was argued that such interference was a tort and, on that account also, it could not be lawfully authorized by the Commission. I wish to stress that I am expressing no opinion either way on those two questions.

[Page 190]

It was contended on behalf of the appellants that the Commission's decision was invalid because it could properly be made only by regula­tion rather than in the exercise of administrative discretion. I do not find it necessary in this case to consider to what extent the Commission may exer­cise its powers by means of conditions appended to licences rather than by regulations. However, I wish to state that nothing in these reasons is to be taken as implying a departure from what was decided by the majority in Brant Dairy Co. v. Milk Commission of Ontario 22

For those reasons, I would allow the appeal and set aside the judgment of the Federal Court of Appeal and orders 74-100, 74-101, 74-102 of the Canadian Radio-Television Commission. The appellants are not asking for costs and none should be awarded to or against any party.

Appeal dismissed, PIGEON, BEETZ and DE GRANDPRÉ J.J. dissenting.

Solicitors for the appellants: Gowling & Hen­derson, Ottawa.

Solicitor for the respondent: J. E. Lawrence, Ottawa.

Solicitors for the intervenant Rogers Cable TV Limited: Peyton, Biggs & Graham, Toronto.

Solicitor for the Attorney General of Canada: D. S. Thorson, Ottawa.

Solicitor for the Attorney General of Ontario: F. W. Callaghan, Toronto.

Solicitors for the Attorney General of Quebec: Langlois, Drouin, Roy, Fréchette & Gaudreau, Quebec.

Solicitor for the Attorney General of British Columbia.' David H. Vickers, Victoria.

Solicitor for the Attorney General of Alberta: W. Henkel, Edmonton.

Solicitor for the Attorney General of Saskatch­ewan: K. Lysyk, Vancouver.

22 [1973] S.C.R. 131.