The facts
I shall reduce the facts, which are not really in dispute,
to their simplest form.
The appellant operates a cruise service travelling among
Kingston, Ottawa, Montréal and Québec. The cruises it offers last for
relatively long periods, in that the passengers spend at least one night on
board. Its vessels stop along the way at a number of ports, including
Kingston, where they use the Crawford Dock. On days when its vessels stop at
the Crawford Dock to embark or disembark passengers, it berths at the dock at
about 2:00 p.m. and leaves at about 7:00 p.m. Between 1988 and 1995, the
cruises took place on board the Canadian Empress, which has a capacity
of 66 passengers; between 1990 and 1992, cruises were also offered on the Victorian
Empress, whose passenger capacity does not appear in the record. In 1994,
for example, the cost of a four or five night cruise ranged from $860 to
$1,370.
In 1986, the Governor in Council amended the Regulations to
impose a charge of $3.00 per passenger solely in respect of cruise vessels that
were engaged "in a voyage during which the passengers are on board the
vessel for at least one overnight period". The amount of the charge is
set out in Schedule VII to the Regulations, and has fluctuated over the years.
The Minister of Transport (the "Minister") is
relying on this amendment to the Regulations in demanding payment from the
appellant of $60,937.12 in respect of the period from 1988 to 1995; that figure
corresponds to the number of passengers who used the Crawford Dock multiplied
by the amount of the charge payable. The amount in question has been paid into
court, pending the decision of this Court.
The evidence shows that during the years in issue other
cruise vessels, including the Island Queen, which has a capacity of 300
passengers, and the Island Belle, which has a smaller capacity, offered
only day cruises and used the Crawford Dock in the same manner, for the same
purposes and more often than the appellant's vessels, but did not pay the
charges set out in Schedule VII since their passengers did not spend any nights
on board during their cruise.
The evidence further shows that the appellant's vessels did
not berth at the Crawford Dock during the night and that all cruise vessels
paid the berthage charges set out in the Regulations, regardless of whether the
cruise was for one day, as in the case of the Island Queen, or several
days, as in the case of the appellant's vessels. These berthage charges were
established on the basis of the length of the vessel and the number of days or
fractions of days during which the vessel was berthed.
Lastly, it is common ground, based on the documents entered
in evidence by consent, that the objective of the Governor in Council in
imposing charges in respect of cruises that included as least one night on
board was to generate revenue regardless of the specific manner in which
passengers used harbour facilities, and that the Governor in Council had
targeted these cruises because the charges imposed were not a "significant
portion" of the cost of their cruise. The following documents are
particularly relevant:
-a letter from the Minister of
Transport dated April 10, 1986, in response to a letter written by the
president of the appellant company, Mr. Clark:
Please inform Mr. Clark
that the proposed increases in harbour fees and the introduction of a Cruise
Vessel Passenger Charge are required to reflect the rising costs of providing
the public harbours and ports infrastructure. They will also add to the level
of cost recovery for public harbours and ports, which is part of the federal
government's deficit reduction exercise.
As a result of
consultations with users and departmental officials, the proposals have been
revised. The new Cruise Vessel Passenger Charge will not come into effect
until 1 April 1987, and will be $3.00 per passenger. This is to allow time to
reflect the charge in cruise vessel fares for the 1987 season. The charge does
not apply to day cruises or ferry operations, and it is assessable when a
vessel uses a public port facility to embark or disembark passengers.
You can assure Mr.
Clark that his operation and his particular concerns were taken into account in
the development of this passenger charge. In fact, certain modifications were
made to the wording to ensure that a vessel leaving from and returning to the
same public port facility, such as Kingston, would pay the charge only once at
that port.
I have been informed that the Department of Fisheries and Oceans is not
intending to introduce a cruise vessel passenger charge. ...
[A.B.,
at pp. 22-23]
-A letter from the Canadian
Coast Guard dated some time in February 1989, in response to a letter from Mr.
Clark:
As you have indicated,
the passenger charge represents a charge for the use of the facility, not
unlike wharfage and berthage charges historically reflected in the tariff
schedule. Revenues from public port tariffs contribute to the upgrading and
restoration of facilities to make them safe for vehicle and passenger traffic
associated with cruise vessel activity. Day cruises were specifically exempted
from the cruise vessel passenger charge to avoid the situation where the $3.00
charge would represent a significant portion of the overall fares charged to
passengers. Apart from this exemption for day cruises, overnight cruise
vessels and tour operations across the country are subject to the charge. Day
cruises continue to be subject to all other public port tariffs such as
berthage.
[A.B.,
at pp. 26-27]
-Transport Canada's accounts
receivable, describing the charges for which payment was sought as
"passenger fees" ("droits imposés au passager").
The trial judge rejected the appellant's arguments relating
to the invalidity of the impugned sections. He stated that he was of the view
that the Regulations did not violate the principle of equitable treatment set
out in paragraph 3(1)(c) of the Act, since all overnight cruise vessels
were affected; that the purpose of the Governor in Council's action, which was
to raise revenue and reduce the deficit, was a valid purpose; and that the
distinction between long-term cruises and short-term cruises was not
discriminatory. With respect, I believe that the trial judge erred and that he
should have dismissed the Crown's action.
A procedural question
At the hearing, the Court queried about the power of the
Crown in this instance to bring action against the owner of the vessels rather
than the passengers, to recover the unpaid charges. When the charges claimed
are "in respect of a vessel", subsection 13(1) of the Act provides
that they may be recovered from the owner of the vessel or the owner of the
cargo, while "in the case of any person using a public harbour or public
port facility", subsection 13(2) provides that the charges "are
payable by that person".
Since, after reserving judgment to consider the matter, I
have reached the conclusion that the charges in issue could not be recovered, I
need not decide whether, in the event that the charges could be recovered, the
Crown was right to consider the charges claimed to be charges in respect of the
vessel and, accordingly, to bring action against the owner of the vessel.
The substantive issue
The first thing that must be done when the validity of a
regulation has been challenged is to construe the enabling statute. We must be
careful not to apply the principles of interpretation laid down in the case law
to the regulations without first considering the scope of the specific grant of
regulatory power made by the legislation in question. As Lord Reid observed in
Padfield et al. v. Minister of Agriculture, Fisheries and Foods et al.,
... Parliament must have conferred
the discretion with the intention that it should be used to promote the policy
and objects of the Act; the policy and objects of the Act must be determined by
construing the Act as a whole and construction is always a matter of law for
the court. In a matter of this kind it is not possible to draw a hard and fast
line, but if the Minister, by reason of his having misconstrued the Act or for
any other reason, so uses his discretion as to thwart or run counter to the
policy and objects of the Act, then our law would be very defective if persons
aggrieved were not entitled to the protection of the court. So it is necessary
first to construe the Act.
In Roncarelli v. Duplessis, Rand J. wrote:
In public regulation of
this sort there is no such thing as absolute and untrammelled
"discretion", that is that action can be taken on any ground or for
any reason that can be suggested to the mind of the administrator; no
legislative Act can, without express language, be taken to contemplate an
unlimited arbitrary power exercisable for any purpose, however capricious or
irrelevant, regardless of the nature or purpose of the statute. ... [T]here is
always a perspective within which a statute is intended to operate; and any
clear departure from its lines or objects is just as objectionable as fraud or
corruption. Could an applicant be refused a permit because he had been born in
another province, or because of the colour of his hair? The ordinary language
of the legislature cannot be so distorted.
As well, in Montreal v. Arcade Amusements Inc.,
Beetz J. adopted the following observation by Louis-Philippe Pigeon in Rédaction
et interprétation des lois:
[translation]
Another important
observation has to be made regarding the regulatory power. It is the
following: the power to make regulations does not include a power to adopt
discriminatory provisions. In other words, unless the legislation authorizing
it states the contrary a regulation must apply to everyone in the same way. If
the intent is to make a distinction, this must be stated. ...
What does the Public Harbours and Ports Facilities Act
say, what does it permit, in this case?
Section 3 of that Act defines "national ports
policy" in terms of four roles or characteristics, including the
following, at paragraph 3(1)(c):
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(c) provides
accessibility and equitable treatment in the movement of goods and persons to
users of Canadian ports; and
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c) de garantir aux usagers des ports canadiens l'égalité
de traitement et le libre accès aux services de transport de marchandises et
de passagers;
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This legislative objective is exceptional. It would seem that there
are only two other statutes in the body of federal legislation that speak in
these terms, and curiously, those two statutes also relate to "national
ports policy". They are the Canada Ports Corporation Act
and the Harbour Commissions Act. Even the National Transportation Act,
1987 does not use this language, although
paragraph 3(1)(e) of that Act conveys a similar concept:
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(e) each
carrier or mode of transportation, so far as practicable, bears a fair
proportion of the real costs of the resources, facilities and services
provided to that carrier or mode of transportation at public expense,
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e) chaque transporteur ou mode de transport supporte,
dans la mesure du possible, une juste part du coût réel des ressources,
installations et services mis à sa disposition sur les fonds publics;
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I note that the Aeronautics Act contains no similar or
analogous provision.
Given that Parliament has taken exceptional pains to add
this requirement of equitable treatment to the text of the Act itself, I deduce
from this that it intended to give users of Canadian harbours broader rights
than the rights that stem from the implied requirement of non-discrimination
which the courts generally read into enactments.
We were told by counsel for the respondent that the
impugned regulations were made with the objective of raising revenue and
reducing the deficit. She added, at the hearing, that the charges are imposed
on the appellant company, regardless of what particular use it makes of the
port facilities: it is not, she said, a user fee. The objective of the
Governor in Council is not in dispute in the instant case. The issue here is
therefore not what motives guided the Governor in Council,
but rather whether the objective is consistent with what the enabling statute
authorizes.
The objective of raising revenue and reducing the deficit
is certainly permitted by paragraphs 3(1)(a) and (b), and it is
at least implicitly recognized in the fact that the Minister is granted general
powers of administration (section 4) and development (subsection 12(1)).
However, any action taken with that objective must be taken in the manner
permitted by the Act, and the Act does not authorize it unless it is in
connection with the use made of the facilities (I would note that it is common
ground in this case that the charges are in respect of the use of the
facilities rather than in respect of coming into port). While the amount of
the charges need not reflect the exact cost of the use made of the facilities,
the charges imposed must be related to a particular use and users must be
treated equitably.
I am of the view that imposing charges solely on overnight
cruise vessels that make the same use of port facilities as do day cruisers
does not comply with the principle of equitable treatment, which I interpret to
mean that where use is equal, and absent any other valid objective which would
permit a distinction to be made, all vessels in the same class should be
treated equally. I find it hard to see why, for example,
if the use of port facilities is equal, a sardine fishing boat should not
receive the same treatment as a lobster fishing boat, or berthing fees for two
yachts should vary based on their respective market values. The objectives
defined in subsection 3(1) of the Act are complementary, as the word
"and" indicates. Certainly the Minister may impose fees to raise
revenue and reduce the deficit, but in so doing he must "provide equitable
treatment" to cruise vessels. In this case, the impugned provisions are
inconsistent with that objective.
In deciding that the Act does not authorize the Governor in
Council to distinguish between overnight cruise vessels and day cruisers, as he
did in this case, and accordingly that the impugned provisions are invalid, I
am actually adopting the same approach as led the Supreme Court of Canada, in Alaska
Trainship, and Denault J., in Great Lakes
Pilotage Authority Ltd v. Misener Shipping Ltd.,
to strike down certain regulations in respect of pilotage.
In my view, this is sufficient to dispose of the matter.
Counsel for the appellant invited us to decide that the Act does not permit the
Governor in Council to define the word "vessel", by regulation,
otherwise than as that word is defined in the Act, and that the Regulations
cannot contain provisions that apply to certain classes of vessels and not to others.
I am in agreement with the first of these propositions, but not with the
second. The Regulations could not include in "vessel" a class that
was not included in the definition of the word "vessel" set out in
the Act; in this instance, the argument is academic since in the English
version Parliament has used the word "includes" rather than
"means", and since the definition given, "every description of
ship, boat or craft ...", is sufficiently broad to encompass cruise
vessels. On the other hand, it is implicitly necessary, for the administration
of the Act, that it be possible for the Regulations to distinguish among
certain classes of vessels. The objective defined in paragraph 3(1)(a)
of the Act, I think, allows special status to be conferred on fishing vessels,
for example, as paragraph 28(c) of the Regulations does, and the
objective defined in paragraph 3(1)(d) would also, in my view, allow for
ferries, which are connected with the ground transportation system, to be
treated as a class apart. I do not share the opinion of counsel for the
appellant that an express statutory provision is required in order for classes
or sub-classes to be established by regulation.
In closing, I would like to comment briefly on certain
decisions of the Federal Court on which the respondent and the trial judge
relied; they are: Gulf Trollers Assn., Aerlinte Eireann
Teorante v. Canada (Minister of Transport), New
Brunswick Broadcasting Co., Ltd. v. C.R.T.C.
and Airport Taxicab (Malton) Association v. Canada (Minister of Transport).
In Gulf Trollers, public notices were issued
by fishery officers under the Fisheries Act imposing restrictions on
fishermen engaged in commercial salmon fishing that were not imposed on sport
fishermen. The applicable Act contained no requirement of equitable treatment,
and the case was decided on a point of constitutional law rather than
administrative law. In any event, the case did not address the possibility of
establishing distinctions within a class, for example sport fishermen.
In Aerlinte, the Aeronautics Act
then in force did not guarantee equitable treatment. The Air Services Fees
Regulations established different landing fees for domestic flights,
international flights and transoceanic flights; the fees were established on
the basis of the weight of the aircraft and the evidence had established that
the costs of building and maintaining runways and providing passenger services
were higher in the case of transoceanic flights; the Court found that, on the
facts, there was no discrimination. The respondent relied on a passage from
the reasons of the Court, at page 228, which is mere obiter, and which
is, moreover, of debatable merit. At bottom, that decision supports the
appellant's position, in that it confirms that the Governor in Council may
determine the amount of the fees he imposes on the basis of the use made of the
public facilities in question by a carrier and its passengers, without being
guilty of discrimination.
In New Brunswick Broadcasting,
in which this Court recognized that the CRTC had the power to establish classes
of persons who are entitled to use frequencies, the Broadcasting Act
contained a provision that gave the Commission the power to establish such
classes. That decision is of little use to us here.
In Airport Taxicab, the impugned regulations,
which had been made under the Department of Transport Act, permitted
separate permits to be issued to taxi drivers and limousine drivers. The
regulations had been made with the aim of ending a war that had been going on
between the drivers in question. Section 25 of the Act in question gave the
Governor in Council the power to "make such regulations as he deems
necessary for the management, maintenance, proper use and protection
...". The Act contained no requirement of equitable treatment. Rouleau
J. concluded, first, that the purpose of the statutory provisions was, inter
alia, to allow the Crown to limit, control and supervise the conduct of
commercial activity carried on within the boundaries of airports, and that the
impugned regulations reflected that objective. Second, he concluded that there
was nothing in the evidence to indicate unequal or discriminatory treatment. I
do not see how this decision can help the respondent.
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