Date: 20030710
Docket: A-210-02
Citation: 2003 FCA 302
CORAM: LINDEN J.A.
EVANS J.A.
MALONE J.A.
BETWEEN:
NEIGHBOURING RIGHTS COLLECTIVE OF CANADA (NRCC)
Applicant
and
SOCIETY OF COMPOSERS, AUTHORS AND MUSIC PUBLISHERS
OF CANADA (SOCAN);
and
DMX CANADA, GALAXIE, BELL EXPRESSVU, STAR CHOICE,
CANADIAN CABLE TELEVISION ASSOCIATION ("CCTA")
and SHAW COMMUNICATIONS
Respondents
and
THE COPYRIGHT BOARD
Intervener
Heard at Ottawa, Ontario, on May 21, 2003.
Judgment delivered at Ottawa, Ontario, on July 10, 2003.
REASONS FOR JUDGMENT BY: EVANS J.A.
CONCURRED IN BY: LINDEN J.A.
MALONE J.A.
Date: 20030710
Docket: A-210-02
Citation: 2003 FCA 302
CORAM: LINDEN J.A.
EVANS J.A.
MALONE J.A.
BETWEEN:
NEIGHBOURING RIGHTS COLLECTIVE OF CANADA (NRCC)
Applicant
and
SOCIETY OF COMPOSERS, AUTHORS AND MUSIC PUBLISHERS
OF CANADA (SOCAN);
and
DMX CANADA, GALAXIE, BELL EXPRESSVU, STAR CHOICE,
CANADIAN CABLE TELEVISION ASSOCIATION ("CCTA")
and SHAW COMMUNICATIONS
Respondents
and
THE COPYRIGHT BOARD
Intervener
REASONS FOR JUDGMENT
EVANS J.A.
A. INTRODUCTION
[1] This is an application for judicial review by the Neighbouring Rights Collective of Canada ("NRCC") to set aside a decision of the Copyright Board, reported as Socan Statement of Royalties, Pay Audio Services, 1997-2002 (Tariff 17.B) (Re) (2002), 19 C.P.R. (4th) 67 (C.B.) ("Tariff 17"). In this decision, the Board certified the first tariff respecting the royalties payable by the providers of digital pay audio services ("DPA") for the communication to the public of recorded music by telecommunication. DPA is delivered to subscribers by various broadcast distribution undertakings, such as cable and satellite direct-to-home distributors.
[2] NRCC represents performers and makers of recordings who are entitled to be paid an equitable remuneration for the communication of their recordings to the public by telecommunication: Copyright Act, R.S.C. 1985, c. C-42, subsection 19(1). The rights of the performers and makers are known as "neighbouring rights" because they are close to the intellectual property rights of authors.
[3] NRCC challenges the decision of the Board on two principal grounds. First, it alleges that the Board erred in law when it allocated half of the total royalties payable by DPA to the authors and composers of music represented by the respondent, the Society of Composers and Music Publishers of Canada ("SOCAN"), and half to the performers and makers of recordings represented by NRCC. NRCC says that, in making an equal allocation between SOCAN and NRCC, the Board overlooked the fact that NRCC's members, performers and makers, have separate rights to remuneration. This is a dispute between NRCC and SOCAN, collective societies which collect and distribute royalties on behalf of their members.
[4] Second, NRCC alleges that the Board erred in law in certifying a joint tariff for NRCC and SOCAN when each had submitted separate proposed tariffs for the Board's consideration. This issue concerns NRCC and the Canadian Cable Television Association ("CCTA"), which represents cable broadcasting distribution undertakings across Canada who must pay the royalties with respect to DPA. The Copyright Board has intervened on this issue because it involves the interpretation of its statutory powers to alter the terms and conditions attached to the royalties when it approves a tariff. SOCAN takes no position on this issue.
B. THE DECISION OF THE COPYRIGHT BOARD
[5] The decision of the Board in Tariff 17 deals with both Tariff 17.B, proposed by SOCAN for the years 1997-2002, and Tariff 17, proposed by NRCC for the years 1998-2002. The Board held a joint hearing on the proposed tariffs over the objections of the parties, and certified a single tariff, which has now expired. SOCAN and NRCC have filed proposed royalty tariffs with the Board to start on January 1, 2003.
[6] The Board's reasons deal at length with the percentage of the affiliation dues payable by the distribution undertakings for the use of DPA that should be paid as royalties to SOCAN and NRCC. The Board's assessment of the total worth of the contributions made by authors, performers and makers to the economic value of the communication of recorded music by DPA is not challenged in this application. Hence, it will not be necessary to consider this part of the decision in these reasons.
[7] NRCC submitted to the Board that it should allocate the royalties between its members and SOCAN's members on the basis that was adopted in a decision involving the private copying of CDs, Private Copying 1999-2000, Tariff of Levies to be Collected by CPCC (Re) (2000), 4 C.P.R. (4th) 15 (C.B.) ("Private Copying"). In that decision, the Board divided the royalties more or less equally among the three groups of rights holders, namely, authors, performers and makers.
[8] The Board rejected this submission in Tariff 17 (at 78) because Private Copying concerned the mechanical or reproduction right in recorded music. Instead, it adopted the mode of allocation made in respect of the broadcast of recorded music by commercial radio stations in NRCC Statement of Royalties 1998-2002 (Tariff 1.A) (Re) (2000), 3 C.P.R. (4th) 350 (C.B.) ("Tariff 1.A"). That decision, like Tariff 17, involved the right to communication by telecommunication. In Tariff 1.A, the Board awarded the same royalty to NRCC as it had previously awarded to SOCAN, with the result that authors received 50% of the royalties, and performers and makers 25% each.
[9] Even though SOCAN and NRCC proposed separate tariffs in Tariff 17, the Board certified a joint tariff. Subsection 68(3) of the Copyright Act enables the Board to attach to royalties "the terms and conditions ... as the Board considers necessary". In Tariff 17 (at 86) the Board identified the advantages of certifying a joint tariff, particularly that it would provide users with "one-stop shopping" with respect to the royalties payable and relieve them of the burden of having to comply with multiple tariffs containing different terms and conditions.
C. ISSUES AND ANALYSIS
Issue 1: Was the Board's allocation of the royalties erroneous in law because it assumed that there is a single statutory right to remuneration for the performers and makers of recorded music, rather than two separate rights?
[10] The provisions of section 19 of the Copyright Act relevant to this issue are as follows.
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19. (1) Where a sound recording has been published, the performer and maker are entitled, subject to section 20, to be paid equitable remuneration for its performance in public or its communication to the public by telecommunication, except for any retransmission.
(2) For the purpose of providing the remuneration mentioned in subsection (1), a person who performs a published sound recording in public or communicates it to the public by telecommunication is liable to pay royalties
(a) in the case of a sound recording of a musical work, to the collective society authorized under Part VII to collect them;
...
(3) The royalties, once paid pursuant to paragraph (2)(a) or (b), shall be divided so that
(a) the performer or performers receive in aggregate fifty per cent; and
(b) the maker or makers receive in aggregate fifty per cent.
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19. (1) Sous réserve de l'article 20, l'artiste-interprète et le producteur ont chacun droit à une rémunération équitable pour l'exécution en public ou la communication au public par télécommunication - à l'exclusion de toute retransmission - de l'enregistrement sonore publié.
(2) En vue de cette rémunération, quiconque exécute en public ou communique au public par télécommunication l'enregistrement sonore publié doit verser des redevances_:
a) dans le cas de l'enregistrement sonore d'une oeuvre musicale, à la société de gestion chargée, en vertu de la partie VII, de les percevoir;
...
(3) Les redevances versées en application de l'alinéa (2)a) ou b), selon le cas, sont partagées par moitié entre le producteur et l'artiste-interprète.
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[11] It is common ground between the parties that subsection 19(1) creates two rights: performers and makers of recordings have separate rights to equitable remuneration. The fact that subsection 19(3) provides that, when paid, royalties payable under subsection 19(2) are to be divided equally between performers and makers does not mean that they have a single right to remuneration.
[12] The issue in dispute is whether the reasons of the Board indicate that it allocated the royalties on the erroneous view that performers and makers have only one right to remuneration. SOCAN took the position that, properly read, the reasons of the Board provide no support for the view advanced by NRCC that, when allocating the royalties between SOCAN and NRCC, the Board forgot that makers had their own separate right to remuneration. Since I have concluded that the Board did not interpret subsection 19(1) as creating a single right to remuneration for performers and makers, and the parties agree that subsection 19(1) creates two separate rights, I need not consider the standard of review applicable to the Board's interpretation of this provision.
[13] Counsel for NRCC correctly pointed out that in Tariff 17 the Board justified allocating the royalties equally between SOCAN and NRCC by relying on its decision in Tariff 1.A. Thus, the Board said in Tariff 17 (at 78):
For reasons outlined in earlier decisions, the Board finds that all things being equal, authors and composers should get the same as performers and makers.
In relying on Tariff 1.A, counsel argued, the Board erred in law in Tariff 17 for two reasons: Tariff 1.A was wrongly decided or, if it was correct, it was inapplicable to Tariff 17.
(i) Tariff 1.A was wrongly decided
[14] Although no application for judicial review was ever made, counsel for NRCC submitted that the decision in Tariff 1.A is legally erroneous because it is based on the view that the performers and makers of recorded music have only one right to remuneration. He supported his argument by referring the Court to passages in the Board's reasons in that case (especially at 377-78) where, in discussing the relative value of the contributions by various rights holders, the Board spoke only of authors and performers. The omission of any mention of the makers of recordings indicates, counsel argued, that the Board overlooked the fact that they had a right to equitable remuneration, separate from that of performers, for their contribution to the value of the communication of a recording to the public by telecommunication.
[15] In my view, it would be very surprising if this highly specialized Board made such an elementary error, especially since in Private Copying, decided only four months after Tariff 1.A, the Board allocated the royalties more or less equally among authors, performers and makers. Indeed, in Tariff 17 the Board expressly referred (at 78) to the equal three-way split of the royalties in Private Copying.
[16] In any event, I am not persuaded that it can be inferred from the extracts to which counsel directed our attention that in Tariff 1.A the Board was of the view that there was a single statutory right to remuneration under subsection 19(1) and that makers did not have a right of their own.
[17] As counsel for SOCAN pointed out, the reasons in both Tariff 1.A. and Tariff 17 expressly refer to both performers and makers, including a sentence in the paragraph immediately preceding the passage in Tariff 1.A (at 377) on which counsel for NRCC so heavily relied as evidence that the Board thought that subsection 19(1) created only one right. Without detailing all the references to makers and performers in Tariff 1.A., I would note the Board's statement (at 371) that "... royalties should account for the rights of both makers and performers" (the emphasis is mine) as clearly indicating that the Board did not regard them as having a single right in which the makers' right to remuneration was somehow subsumed under that of the performers.
[18] Reviewing the reasons as a whole given in both Tariff 1.A and Tariff 17, I am not satisfied that in either case the Board thought that subsection 19(1) created a single right to remuneration for the performers and makers of recorded music. Rather, the Board was of the view that, in the contexts of those cases (communication rights), unlike that of Private Copying (a reproduction right), an equal division of the royalties between SOCAN and NRCC was appropriate.
[19] Moreover, the Board may not always refer separately in its reasons to performers and makers because it does not have to determine how to share the royalties between these two rights-holders. Subsection 19(3) effects an automatic equal division between performers and makers when the royalties are paid.
(ii) Tariff 1.A is distinguishable
[20] Counsel for NRCC submitted that, even if Tariff 1.A is itself unimpeachable, the Board erred in relying on it to support its decision in Tariff 17 because the issues in the two cases were quite different. In particular, he said, Tariff 1.A was not a royalties allocation case, but one in which the Board had to determine the economic value of the contributions of NRCC's members to the value of the broadcasting of musical recordings for the purpose of assessing the total amount of the royalties payable by commercial radio stations for communicating recordings to the public.
[21] Thus, counsel for NRCC argued, in Tariff 1.A the Board fixed the royalty payable to NRCC by reference to the royalty that it already approved for SOCAN and decided that it should be the same. In Tariff 17, on the other hand, the Board first fixed the total royalty and then, relying on Tariff 1.A, allocated it equally between SOCAN and NRCC.
[22] I am not persuaded that the Board erred in law in Tariff 17 when it relied on its previous decision in Tariff 1.A. A specialized administrative tribunal, such as the Board, is surely entitled to significant deference in the interpretation of its own jurisprudence. How much, I need not decide here. Suffice it to say that I am not persuaded that the Board committed any logical error in applying Tariff 1.A to the decision under review.
[23] I agree that Tariff 1.A was not an allocation case in the sense that, when NRCC's proposed tariff was considered by the Board, SOCAN's royalty had already been fixed. This was not the case in Tariff 17, where both the total amount of the royalties payable to SOCAN and NRCC, and the allocation between them, were decided in the same proceeding. However, in Tariff 1.A the Board in effect placed a relative value on the contribution of the members of SOCAN and NRCC by approving a royalty payable to NRCC by reference to that payable to SOCAN. As the Board stated in Tariff 1.A (at 378):
... there is no reason to believe that the use of sound recordings on radio stations has any greater value than the use of the underlying works.
[24] Indeed, in Tariff 1.A the Board identified (at 377) the central question before it as whether
to maintain a one-on-one relationship between the neighbouring rights and the authors' rights or to adjust the rate upwards.
Hence, I am not satisfied that the Board was wrong in law to have regarded Tariff 1.A as an appropriate analogy when determining the allocation of the royalties in Tariff 17. Incidentally, the Board's reference in the above quotation to the term "neighbouring rights" is another indication that it viewed performers and makers as having separate rights.
[25] Finally, counsel for NRCC submitted that the Board's recent decision in CMRRA/SODRAC Inc. Statement of Royalties, Reproduction of Musical Works 2001-2004 (Re) (C.B.; March 28, 2003) ("SODRAC") undermines the claim of rationality for the Board's position in Tariff 17 that it could not determine the relative values of the contributions of authors, performers and makers in a communication right by reference to a reproduction right. Counsel submitted that in SODRAC the Board decided to value a reproduction right on the basis of a communication right. This, counsel argued, was inconsistent with the Board's decision in Tariff 17 to disregard evidence submitted on behalf of NRCC relating to reproduction rights, and to value NRCC's communication right in that case by reference only to another communication right case.
[26] I am not at all sure that I agree with counsel's characterization of the Board's reasoning in SODRAC, nor with his submission that the two decisions proceed on contradictory bases. In SODRAC, the Board was dealing with a claim for a royalty in respect of commercial radio stations' copying of recordings onto their computers before broadcasting them. The Board concluded that, in that context, the value of the reproduction right was only one-third that of the communication right.
[27] In any event, an inconsistency between the reasoning in SODRAC and Tariff 17 would not justify the Court in reviewing for correctness the Board's decision in Tariff 17 to distinguish between a communication right and a reproduction right for the purpose of the present case: Domtar Inc. v. Quebec (Commission d'appel en matière de lésions professionnelles), [1993] 2 S.C.R. 756 at 795-97. Nor does SODRAC demonstrate that it was patently unreasonable for the Board in Tariff 17 to have adopted the analysis in Tariff 1.A.
(iii) Conclusion
[28] Counsel for NRCC conceded that, but for these alleged errors, the Board's allocation of royalties in Tariff 17 was not unlawful. Consequently, since in my opinion the Board did not err as alleged by NRCC, I do not agree with NRCC's arguments on Issue 1.
Issue 2: Did the Board err by ignoring NRCC's evidence on the relative values of the contributions made by authors, performers and makers to the value of the communication to the public by DPA of recorded music?
[29] Counsel for NRCC submitted that the Board committed a reviewable error by ignoring the evidence adduced by NRCC when it determined the relative contributions of authors on the one hand, and performers and makers on the other, to the value of the communication of recorded music to the public by DPA. In the absence of any other evidence on this issue, counsel argued, the Board's determination should be set aside under paragraph 18.1(4)(d) of the Federal Court Act, R.S.C. 1985, c. F-7, as based on an erroneous finding of fact made in a perverse or capricious manner or without regard to the material before it.
[30] After referring to the extensive evidence on various commercial aspects of DPA provided by witnesses called on behalf of both SOCAN and NRCC, and by objectors to the proposed tariffs, the Board said (at 72):
As informative as the evidence provided may have been, and for reasons stated below, the analytical framework and the approach used by the Board to derive the tariff rate make it unnecessary to review this evidence in detail.
As I have already noted, the Board adopted its approach in Tariff 1.A, also a communication right decision, and divided the royalties equally between SOCAN and NRCC.
[31] I do not agree that the Board "ignored" NRCC's evidence. It is clear from the Board's reasons that it was very well aware of this evidence. However, having decided that Tariff 1.A was an appropriate analogy for Tariff 17, the Board simply did not accept NRCC's evidence, which was based largely on the sale of recordings, where the royalty share was for the reproduction right. In Tariff 17, NRCC adduced no evidence on the relative contributions of authors, performers and makers to the value of the right respecting the communication to the public by telecommunication of recorded music.
[32] Since I have concluded that the Board did not commit a reviewable error when it based the allocation of royalties on its commercial broadcasting decision, it was entitled to reject NRCC's evidence in favour of its analysis in Tariff 1.A.
Issue 3: Did the Board misuse the discretion conferred by subsection 68(3) of the Copyright Act in certifying a single tariff for SOCAN and NRCC when the parties had submitted separate proposed tariffs for the Board's consideration and did not consent to the certification of a single tariff?
[33] It was agreed that subsection 68(3) of the Copyright Act is the provision most directly relevant to determining whether the Board erred in law in this respect.
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68. (3) The Board shall certify the tariffs as approved, with such alterations to the royalties and to the terms and conditions related thereto as the Board considers necessary, having regard to
(a) any objections to the tariffs under subsection 67.1(5); and
(b) the matters referred to in subsection (2).
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68. (3) Elle homologue les projets de tarif après avoir apporté aux redevances et aux modalités afférentes les modifications qu'elle estime nécessaires compte tenu, le cas échéant, des oppositions visées au paragraphe 67.1(5) et du paragraphe (2).
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Subsection 68(2), referred to in subsection 68(3), provides:
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68. (2) In examining a proposed tariff for the performance in public or the communication to the public by telecommunication of performer's performances of musical works, or of
sound recordings embodying such performer's performances, the Board
(a) shall ensure that...
(iii) the payment of royalties by users pursuant to section 19 will be made in a single payment; and
(b) may take into account any factor that it considers appropriate.
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68. (2) Aux fins d'examen des projets de tarif déposés pour l'exécution en public ou la communication au public par télécommunication de prestations d'oeuvres musicales ou d'enregistrements sonores constitués de ces prestations, la Commission_:
a) doit veiller à ce que_: ...
(iii) le paiement des redevances visées à l'article 19 par les utilisateurs soit fait en un versement unique;
b) peut tenir compte de tout facteur qu'elle estime indiqué.
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[34] Although not directly relevant, subsection 66.7(1) also illustrates the breadth of the adjectival powers that Parliament has conferred on the Board.
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66.7 (1) The Board has, with respect to the attendance, swearing and examination of witnesses, the production and inspection of documents, the enforcement of its decisions and other matters necessary or proper for the due exercise of its jurisdiction, all such powers, rights and privileges as are vested in a superior court of record.
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66.7 (1) La Commission a, pour la comparution, la prestation de serments, l'assignation et l'interrogatoire des témoins, ainsi que pour la production d'éléments de preuve, l'exécution de ses décisions et toutes autres questions relevant de sa compétence, les attributions d'une cour supérieure d'archives.
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[35] Counsel for NRCC argued that Parliament has not expressly conferred on the Board the power to certify a single tariff when parties have proposed separate tariffs and do not consent to the certification of a single tariff. He submitted that subsection 68(3) is inapplicable because it only empowers the Board to modify the tariffs proposed by the collective societies, with such alterations to the royalties and the terms and conditions related to the royalties as the Board considers necessary. Converting two separate tariffs into a single tariff is not, he submitted, an alteration to the royalties or to the terms and conditions attached to them.
[36] In order to address this issue, I must decide he following three questions.
(i) Mootness
[37] Counsel for CCTA urged the Court not to decide the validity of the single tariff, on the ground that, since Tariff 17 has now expired, the issue is moot. However, the Court has discretion to decide a moot issue when to do so would be in the interests of justice and would make an appropriate use of scarce judicial resources: Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342.
[38] In my opinion, this is such a case. First, since new tariffs will be proposed and approved from time to time, and CCTA favours a single tariff and NRCC does not, there is a continuing adversarial relationship between CCTA and NRCC on this issue. Second, since the question of whether the Board may certify a single tariff against the wishes of the parties is likely to resurface, it would be an efficient use of resources to decide it now: it is a question of law that has been fully argued in this application; it is of some importance to the Board in this and other proceedings; and it is not fact-specific. Given the procedural or remedial nature of the issue and its ongoing significance for the parties, it is not "political overreaching" for the Court to decide whether the Board may certify a single tariff when two or more have been submitted, even if, on the facts of this case, the question is moot.
(ii) Standard of review
[39] In order to decide if the Board committed an error of law in certifying a single tariff, it is first necessary to apply a pragmatic and functional analysis to determine the standard of review applicable to this aspect of the Board's decision.
(a) access to the court
[40] The Copyright Act contains neither a right of appeal from the Board to the Court, nor a preclusive clause sheltering the Board's decisions from judicial review. This factor in the functional and pragmatic analysis is therefore neutral on the applicable standard of review: 2003 SCC 19">Dr. Q v. College of Physicians and Surgeons of British Columbia, 2003 SCC 19 at para. 27.
(b) relative expertise of the Board on the issue in dispute
[41] This factor requires an assessment of whether the expertise of the administrative agency on the issue in dispute exceeds that of the reviewing court. If it does, a deferential standard of review is indicated. In order to make this assessment, a reviewing court must consider the extent of the expertise of both the agency and the court, and the nature of the problem before the administrative agency.
[42] As for the general scope of the Copyright Board's expertise, it is relevant to note that the Board has no explicit policy-making and legislative powers, but performs its functions on a case-by-case basis. Nonetheless, its function is highly specialized and its subject-matter is of a technical nature. The Board's statutory mandate requires it to set the rates of remuneration payable to the collective societies that represent various copyright holders, and to determine what terms and conditions, if any, should be attached to the royalties. In exercising this broad rate-setting discretion, the Board must balance the competing interests of copyright holders, service providers and the public.
[43] In addition, it is relevant to note that, like other federal regulatory agencies, the Board is an independent specialist administrative tribunal which informs itself through both the evidence adduced and the submissions made on behalf of interested parties at its hearings, and the contributions of its staff.
[44] In contrast, courts have no institutional front-line experience in economic regulation, and lack an understanding of the technical complexity and polycentric policy aspects of the various regulatory contexts in which administrative agencies, including the Copyright Board, operate.
[45] The nature of the problem before the Board in this case, namely, whether to certify a single tariff in Tariff 17, is one of law, since it involves the scope of a procedural or remedial provision in the Board's enabling legislation. More particularly, the question is whether the Board's discretion under subsection 68(3) to certify the tariffs submitted, "with such alterations to the royalties and to the terms and conditions related thereto", authorizes the Board to issue one tariff when the parties submitted two separate tariffs for the Board's consideration and did not consent to the certification of a single tariff.
[46] That this question may well arise in other proceedings before the Board, and that the Board's answer to it in Tariff 17 is likely to have precedential significance, militate towards review for correctness. On the other hand, unlike the question in Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers, [2002] 4 F.C. 3 (C.A.), the disputed provision in this application is not one that a court might have to decide in the context of an action for copyright infringement.
[47] Furthermore, the question concerns the Board's power to grant a remedy of a kind that is unfamiliar in litigation conducted in the courts. I would refer in this context to the well-known passage in [1983] 1 S.C.R. 245">Canada Labour Relations Board v. Halifax Longshoremen's Association, [1983] 1 S.C.R. 245 at 255, where Laskin C.J. said:
Even more in fashioning a remedy conferred in such broad terms is the Board's discretion to be respected than when it is challenged as exceeding its jurisdiction to determine whether there has been a breach of a substantive provision of the [Canada Labour] Code.
[48] Nonetheless, it may be claimed that the question at issue in the present case should be characterized as "jurisdictional" precisely because it concerns the interpretation of a grant of statutory remedial discretion. It is the kind of provision that, in the words of Beetz J. in [1984] 2 S.C.R. 412">Syndicat des employés de production du Québec et l'Acadie v. Canada Labour Relations Board, [1984] 2 S.C.R. 412 at 420 ("l'Acadie"), "describes, lists and limits the powers of an administrative tribunal", and hence attracts review on a standard of correctness.
[49] Indeed, in Performing Rights Organization of Canada Ltd. v. Canadian Broadcasting Corporation (1986), 7 C.P.R. (3d) 433 (F.C.A.) ("Performing Rights"), it was held that whether the predecessor of the Copyright Board, on the basis of statutory provisions somewhat different from those now in force, could merge two tariffs submitted by the applicant was a jurisdictional question, which the Board was found to have decided correctly.
[50] In my opinion, however, a lot of water has gone under the judicial review bridge since Beetz J. formulated the test in l'Acadie for determining which provisions of an enabling statute an administrative agency must interpret correctly if its decision is to withstand judicial review for jurisdictional error when protected by a strong preclusive clause. See, for example, Professional Association of Foreign Service Officers v. Canada (Attorney General), 2003 FCA 162 at para. 11 (per Strayer J.A.).
[51] That a statutory provision comfortably seems to fit the description of one that "describes, lists and limits the powers of an administrative tribunal" is no longer conclusive of the standard of review, even when the scope of a tribunal's remedial powers is at issue. For the following reasons, resort to the language of jurisdiction as used in l'Acadie no longer enables a reviewing court to avoid a pragmatic and functional analysis in order to determine the standard of review.
[52] First, the l'Acadie test for identifying "jurisdictional" provisions in an agency's statute predates the emergence of the pragmatic and functional approach for determining the standard of review first propounded in U.E.S., Local 298 v. Bibeault, [1988] 2 S.C.R. 1048 by Beetz J., four years after he wrote the reasons for judgment of the Court in l'Acadie. In my view, there is a logical incompatibility between a pragmatic and functional analysis for determining the appropriate standard of review, and a formalistic approach that purports to identify certain statutory provisions as attracting correctness review because they describe, define or limit the powers of an administrative agency. The fact of the matter is that every statutory provision that prescribes the circumstances that must exist, or be taken into account, before an agency decides a matter or takes some action can be said to describe, define or limit its powers.
[53] Second, in cases decided after Bibeault, the Supreme Court of Canada has indicated that a specialist agency's interpretation of its remedial powers is not necessarily reviewable on a correctness standard: see especially, Royal Oak Mines Inc. v. Canada (Labour Relations Board), [1996] 1 S.C.R. 369, and Canadian Union of Public Employees, Local 301 v. Montreal (City), [1997] 1 S.C.R. 793.
[54] However, unlike the labour boards under review in Royal Oak Mines and CUPE, Local 301, the Copyright Board's decisions are not protected by a preclusive clause. Nonetheless, the grant of discretion to the Board to certify a tariff as approved, with such alterations to the royalties and the terms and conditions attached thereto as it considers necessary, is unusually broad. The matters to which the Board is to have regard in considering the exercise of the power conferred by subsection 68(3) include those referred to in subsection 68(2), which, for NRCC tariffs, include "any factor that [the Board] considers appropriate": paragraph 68(2)(b). The unusual breadth of the Board's statutory discretion indicates a legislative intention that the Board's view of its scope should be given deference: 2003 SCC 19">Dr. Q at para 31.
[55] Third, to the extent that the Supreme Court of Canada continues to have regard to a statutory provision's "jurisdictional" nature in the l'Acadie sense when determining the standard of review, it is only as one part of one factor of the pragmatic and functional analysis, namely the nature of the problem before the agency: Chieu v. Canada (Minister of Citizenship and Immigration), [2002] 1 S.C.R. 84 at paras. 22 and 24.
[56] Taking into account both the relative expertise of the Board and the Court, and the nature of the problem before it, I have concluded that the Board is better placed than the Court to determine if its powers include the certification of a single tariff when the parties have neither submitted, nor consented to one. This is not a question of law that is relevant to copyright infringement proceedings, but is of a specialized nature that arises in the course of proceedings that Parliament has entrusted to the exclusive jurisdiction of the Board. And, as the Board's reasons in Tariff 17 indicate, the issue engages the Board's regulatory expertise to a greater extent than any of the general principles of statutory interpretation developed by the courts as the bases on which they interpret legislation.
[57] Thus, the Board explained in its reasons (at 85-87) that a single tariff document containing both the amount that service providers must pay to each collective, and one set of terms and conditions, would ease the administrative burden on providers who might otherwise have to consult more than one document to determine both their total liability and the different terms and conditions attaching to the multiple royalties.
[58] The Board considered NRCC's objections, but concluded on the basis of the experience with the single tariff that has been in place for retransmission rights, that a single tariff for DPA was unlikely to cause significant problems for NRCC and that the advantages of a single tariff were considerable. Nonetheless, the Board decided not to designate a single agent to collect the royalties, but to leave it to NRCC and SOCAN to reach an agreement on an integrated royalty payment system.
[59] It seems clear to me from the Board's reasons that whether its broad powers over the royalties and the terms and conditions attached to them enable it to certify a single tariff is intimately linked to the performance of its statutory functions, including issues of regulatory efficiency and fairness. Although this question has an importance that extends beyond the facts of this case, and is thus likely to have precedential effect, the Board's understanding of the administration of tariffs and of balancing the competing economic interests at stake, is more relevant than any general knowledge of law or legal principles to determining whether subsection 68(3) authorizes the Board unilaterally to certify a single tariff.
[60] Accordingly, the relative expertise of the agency and the reviewing court on the issue in dispute, often described as the most important factor in the pragmatic and functional analysis (see, for example, Pushpanathan v. Canada (Minister of Citizenship and Immigration) [1998] 1 S.C.R. 982 at paras. 32-33), indicates a legislative intention that the Court should exercise considerable restraint in reviewing the Board's decision to certify a single tariff.
(c) purpose of the statute
[61] This factor in the pragmatic and functional analysis requires a consideration of the purposes of the statutory scheme as a whole, as well as those of the particular provision in dispute. The purpose of the Copyright Act as a whole is to ensure that the creators of literary, musical and other works are compensated for others' use of them. More particularly, the provisions of Part VII of the Copyright Act establishing a scheme for the collective administration of the various copyrights that may inhere in a particular work are presumably intended to minimize the costs of enforcement. The Act seeks to balance in the public interest the competing claims of producers, users and consumers.
[62] To this end, Parliament established the Copyright Board to administer the scheme by approving royalties and invested it with the powers necessary for it to discharge its regulatory responsibilities in a complex area. Rapid and profound technological developments are reshaping the market and require sophisticated regulatory responses in order to ensure that all who contribute value to the recording of a musical work are fairly compensated, and that consumers are not prejudiced. In 2003 SCC 19">Dr. Q (at para. 31), the Supreme Court recently re-emphasized that deference is indicated by a statutory scheme in which a specialized tribunal is granted broad discretion to balance in the public interest competing rights and economic interests.
[63] As for the purpose of subsection 68(3) itself, Parliament presumably intended it to equip the Board with the powers necessary to enable it to implement its decisions in an effective and efficient manner. Hence, it conferred a very wide discretion on the Board to certify royalties, including, in the case of NRCC tariffs, the power to take into account such factors as it considers appropriate. Review on a standard of correctness would be incompatible with these purposes.
(d) conclusion
[64] On the basis of this analysis, I have concluded that whether the Board may unilaterally merge tariffs is not a question that is reviewable on the correctness standard. I have given particular weight to two factors. First, although the question is ultimately one of statutory interpretation, it also concerns the crafting of appropriate remedial or procedural devices. Hence, the question is very much within the area of the expertise of the Board, which enjoys exclusive jurisdiction over the approval of tariffs submitted by collective societies. Second, the statutory discretion conferred on the Board to enable it to perform its functions is very broad.
[65] Finally, the emergence of the pragmatic and functional analysis for determining the standard of review has overtaken the purely "jurisdictional" approach adopted in Performing Rights for determining whether the former Copyright Appeal Board had a power to merge tariffs.
[66] On the other hand, courts seem generally reluctant to select patent unreasonableness as the standard of review applicable to the determination of questions of law by adjudicative tribunals that are not protected by a strong preclusive clause. However, I would make an exception in this case and have concluded that patent unreasonableness is the appropriate standard of review. My reasons are as follows.
[67] First, as I have already noted, subsection 68(3) and, in this case, paragraph 68(2)(b) confer the widest possible regulatory discretion on the Board so that it can balance in the public interest the competing economic interests of copyright holders, service providers and consumers. Writing for the majority in Mount Sinai Hospital Center v. Québec (Minister of Health and Social Services), [2001] 2 S.C.R. 281 at paras. 57-58, Binnie J. observed that patent unreasonableness would normally be the appropriate standard for reviewing the exercise of a broad subjective grant of discretion. In this regard, he referred to Sheehan v. Ontario (Criminal Injuries Compensation Board) (1975), 52 D.L.R. (3d) 728 (Ont. C.A.), where the Board was to "have regard to all such circumstances as it considers relevant", and, for this reason, would be entitled to "enhanced" deference, that is, its decisions should be reviewed only for patent unreasonableness.
[68] Second, the interpretation of a remedial or procedural power of the Board should be afforded particular latitude because the exercise of the power is integral to a complex regulatory scheme and can have only an indirect and limited effect on individuals' economic interests.
(iii) Is it patently unreasonable to interpret subsection 68(3) as authorizing the Board to merge tariffs ?
[69] Although the reasons in Tariff 17 do not expressly refer to the legal basis of the power to certify a single tariff, the Board presumably assumed that subsection 68(3) provided it with the necessary authority to do so. While the reasons do not explicitly engage in an analysis of the relevant statutory provision, they do provide a cogent explanation of why the Board decided to certify a single tariff. In order to satisfy the Court that it is patently unreasonable to conclude that subsection 68(3) confers on the Board the power to certify a single tariff without the consent of the parties, NRCC must establish that it is obvious that the Board's decision lacks any rational basis. This is a very difficult test for an applicant for judicial review to meet and I am not persuaded that NRCC has succeeded.
[70] First, it is not immediately apparent from the language of the statutory provision that altering the proposed tariffs by certifying a single tariff containing the total royalties payable by DPA providers, and the terms and conditions with which they must comply, cannot rationally be considered to be within the Board's broad discretion to make "such alterations to the royalties and to the terms and conditions related thereto as the Board considers necessary". Merging multiple tariffs has the effect of informing DPA providers of their total liability for royalties and of subjecting them to a single set of terms and conditions with which they must comply.
[71] Second, the reasons given by the Board for its decision, namely, lightening the administrative burdens of DPA providers and the absence of any significant prejudice to the collective societies, are rationally related to the Board's discharge of its regulatory function of balancing in the public interest the competing interests of copyright holders and service providers.
[72] Third, while NRCC may find a single tariff inconvenient and may be potentially prejudiced by it, it does not make some startling inroad into highly prized private legal rights. Indeed, the Board's wide power over the amount and allocation of the royalties payable to copyright holders is far more significant for the interested parties than an ancillary power with respect to the form of the tariff certified.
[73] In any event, if NRCC is adversely affected by the certification of a single tariff in Tariff 17, any prejudice is likely to be small. Each tariff is of limited duration and the parties are not thereby required to submit a joint tariff for subsequent years in which they must present common evidence on value, propose a tariff for the same number of years and target the same distributors. Indeed, NRCC has already proposed a separate tariff on behalf of its members in respect of the period starting January 1, 2003.
[74] Further, NRCC will be at liberty to argue before the Board that, in light of any actual or potential difficulties caused by a single tariff, the Board should certify separate tariffs next time. The principle that an agency may not fetter the exercise of its discretion prevents the Board from refusing to consider such submissions on the ground that it is unalterably committed to a single tariff policy.
D. CONCLUSIONS
[75] For these reasons, I would dismiss the application for judicial review with costs payable by NRCC to SOCAN.
"John M. Evans"
J.A.
"I agree
A.M. Linden
J.A."
"I agree
B. Malone
J.A."
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-210-02
STYLE OF CAUSE: Neighbouring Rights Collective of Canada (NRCC) v. Society of Composers, Authors and Music Publishers of Canada (SOCAN) et al.
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: May 21, 2003
REASONS FOR JUDGMENT BY: Evans J.A.
CONCURRED IN BY: Linden J.A.
Malone J.A.
DATED: July 10, 2003
APPEARANCES:
Mr. David R. Collier FOR THE APPLICANT
Mr. Y.A. George Hynna FOR SOCAN
Mr. Gerald L. Kerr-Wilson FOR CANADIAN CABLE TELEVISION
Ms. Rachelle Frenette ASSOCIATION
Ms. Lise Bertrand FOR GALAXIE
Mr. Jeremy F. deBeer FOR THE INTERVENER
Mr. Mario Bouchard
SOLICITORS OF RECORD:
Ogilvy Renault FOR THE APPLICANT
Montreal, Quebec
Gowling Lafleur Henderson LLP FOR SOCAN
Ottawa, Ontario
Bell ExpressVu FOR BELL EXPRESSVU
Hull, Quebec
- 2 -
Canadian Cable Television Association FOR CANADIAN CABLE TELEVISION
Ottawa, Ontario ASSOCIATION
Canadian Broadcasting Corporation FOR GALAXIE
Montreal, Quebec
Corus Entertainment Inc. FOR DMX CANADA
Toronto, Ontario
Star Choice Communications Inc. FOR STAR CHOICE
Ottawa, Ontario
Copyright Board Canada FOR THE INTERVENER
Ottawa, Ontario
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