Saturday, February 05, 2011

Federal Court Judgment Overturns Cabinet Decision in Globalive Case

The Honourable ROGER T. HUGHES
(Credit: Couvrette)

Justice Roger Hughes (pictured above) of the Federal Court has issued a notable and inevitably controversial judgment reversing Cabinet's reversal of the CRTC Globalive decision.

Although Cabinet has the power to overrule the CRTC, Cabinet must follow the intent of the statute that confers upon it this power.  He says:

[117] In the first of the above “Whereas” clauses, the Governor in Council misdirected itself in
law  by interpreting the Canadian ownership and control requirements of the Telecommunications
Act ,to use its words, “in a way that ensures access to foreign capital, technology and experience is
encouraged”.  While the Governor in Council is correct in saying in the same clause that “the Act
does not impose limits on foreign investment” it must be kept in mind that the Act does not refer
anywhere to “foreign investment” or to “foreign capital, technology and experience”. What the Act
does say is that telecommunications has an essential role in the maintenance of Canada’s identity
and sovereignty and provides a policy objective which requires Canadian ownership and control to
be promoted. There is no policy objective in the Act that encourages foreign investment. The Act
provides tests as to Canadian ownership and control including in subsection 16(3)(c) that a
corporation not be otherwise controlled by a non-Canadian. The intent of the Act is clear that a
situation such as this is to be determined in a manner so as to ensure that there is Canadian control. 
Where there is a concern that foreign investment and other factors may put Canadian control at risk
then it is the promotion of Canadian control that is to be the essential criterion upon which the
matter is to be determined.
It is for Parliament not the Governor in Council to rewrite the Act.

(emphasis added)

There will be much analysis of this decision, which I found on the very worthy website. It is not yet on the Federal Court website, though it will no doubt appear very soon.

This is the latest of many decisions since Dunsmuir to probe the "sempeternal" question of standard of review, although review of cabinet decisions is quite rare. One had hoped that the issue would have been put to rest by the Supreme Court of Canada's decisions in Housen, Dunsmuir and Khosa. There was also a pronouncement on standard of review in Calgene, delivered by the SCC as recently as on the second day that this case was being heard. . However, the Federal Court and, most notably, the Federal Court of Appeal have seemed lately to be, with respect,  rather unpredictable and not notably consistent with respect to the application of the standard of review jurisprudence. Hopefully, if the SCC takes CMEC's K-12  fair dealing case along with the SOCAN "previews" case, which it has already agreed to take, we will get further needed guidance, since standard of review is likely to be an important issue in these cases.

It will be interesting to see what effect, if any, Justice Hughes' decision - assuming that it stands - could have on the recent very controversial UBB ruling from the CRTC, which the Government has indicated it will not allow to stand.

There was a voluminous record in this proceeding going back more than one year. There was a two day hearing involving several very high powered parties on January 19 and 20, 2011. Justice Hughes' 57 page decision followed 15 days later on February 4, 2011.


PS - here's a direct link to the Federal Court posting of the decision.

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