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A-66-81
The Canadian Broadcasting League (Appellant) v.
Canadian Radio-television and Telecommunica tions Commission and Kingston Cable T.V. Lim
ited (Respondents)
Court of Appeal, Urie, Le Dain JJ. and Kelly D.J.—Toronto, March 24; Ottawa, June 30, 1982.
Broadcasting — Appeal from decision of CRTC allowing respondent Kingston Cable T.V. Limited to amend its cable television broadcasting licence by increasing installation fee and maximum monthly fee to subscribers — Whether CRTC authorized by statute or regulation to approve, by way of amendment of licence, such amendment — Broadcasting Act giving CRTC power to issue and amend licences, fix fees and supervise broadcasting system — Whether Commission has general authority to fix fees cable television licensee may
charge When considering validity of regulations under s. 16 or conditions to licence, one must examine whether regulations or conditions fit into one of classes in s. 3 — Where CRTC issues a cable television broadcasting licence conferring a territorial monopoly, authority to fix fees exists by necessary implication to further policy objectives of s. 3 — Specific statutory criteria not required Appeal dismissed — Broad casting Act, R.S.C. 1970, c. B-11, ss. 3, 15, 16(1)(b),
17(1)(a),(b), 26(1) Cable Television Regulations, C.R.C., c. 374, s. 17 — Canadian Radio-television and Telecommunica tions Commission Act, S.C. 1974-75-76, c. 49.
This is an appeal under the Broadcasting Act from a decision of the CRTC allowing the respondent Kingston Cable T.V. Limited to amend its cable television broadcasting licence by increasing the amount of the installation fee and the maximum monthly fee it may charge its subscribers. Leave was granted by the Court of Appeal on one ground only: whether the CRTC was authorized by statute or regulation to approve such an amendment. The precise issue as to the validity of the CRTC's decision is whether paragraph 17(1)(a) confers authority on the CRTC to authorize that amendment.
Held, the appeal is dismissed. Cable television is subject to regulation under the Broadcasting Act as a "broadcasting receiving undertaking" within the definition of "broadcasting undertaking" in section 2. The decision of the Commission approved an application to amend the licence of Kingston Cable T.V. Limited, thus purporting to be an exercise of the authority conferred by paragraph 17(1)(b) of the Act to amend the conditions to which a licence has been made subject by an exercise of the authority conferred by paragraph 17(1)(a).
Because the validity of section 17 of the Regulations, which rests on the regulation-making power contained in paragraph 16(1)(b) of the Act, is also in issue the question becomes an issue of the CRTC's power, generally, to fix such fees, not just as a condition of a licence. The appellant argues that the power to regulate rates and fees must be supported by express statu tory authority, which power, under the Broadcasting Act, is not given to the CRTC. In addition, it is not a power that should exist by necessary implication, as this would have far-reaching effects. The respondents contend that the Act is comprehensive enough to support such power because a broad view is to be taken of the CRTC's powers to implement the broadcasting policy set out in section 3. Also, the power to set fees exists by necessary implication just as does the policy of the CRTC that cable television licensees enjoy a territorial monopoly. When determining the validity of a regulation made under section 16, as well as conditions to a licence made under paragraph 17(1)(b), the same principles apply. One must determine whether the regulation or condition fits within one of the classes set out in section 3. A broad view is to be taken of what is embraced by that section having regard to the latitude or discretion that has been committed to the CRTC to determine what may be necessary in a particular case for the furtherance of its policy objectives. Where the CRTC issues a cable televi sion broadcasting licence that confers a territorial monopoly, it must necessarily have the authority to fix as a condition the maximum fees which a licensee may charge subscribers, if it is to further the policy objective of ensuring the widest possible public access to the services of the Canadian broadcasting system, as contained in paragraph 3(c). The CRTC is capable of considering, in the exercise of its authority, the interests of subscribers and the financial resources required by a licensee to provide the quality of service contemplated in section 3, without the need of specific statutory criteria.
CASES JUDICIALLY CONSIDERED
APPLIED:
Capital Cities Communications Inc., et al. v. Canadian Radio-Television Commission et al., [1978] 2 S.C.R. 141; CKOY Limited v. The Queen, [1979] 1 S.C.R. 2.
REFERRED TO:
Interprovincial Pipe Line Limited v. National Energy Board, [1978] 1 F.C. 601 (C.A.); Terra Communications Ltd. et al. v. Communicomp Data Ltd. et al. (1974), 1 O.R. (2d) 682.
APPEAL. COUNSEL:
A. J. Roman for appellant.
A. Cohen and P. A. Wylie for respondent, Canadian Radio-television and Telecommuni cations Commission.
P. Genest, Q.C. and I. A. Blue for respondent, Kingston Cable T.V. Limited.
SOLICITORS:
The Public Interest Advocacy Centre, Toron- to, for appellant.
Canadian Radio-television and Telecom munications Commission, Ottawa, for respondent, Canadian Radio-television and Telecommunications Commission.
Cassels, Brock, Toronto, for respondent, Kingston Cable T.V. Limited.
The following are the reasons for judgment rendered in English by
LE DAIN J.: This is an appeal by leave, pursuant to subsection 26(1) of the Broadcasting Act, R.S.C. 1970, c. B-11, from Decision CRTC 80-101 [5 C.R.T. 786] issued February 12, 1980 by the Canadian Radio-television and Telecom munications Commission wherein the Commission approved in part an application by the respondent Kingston Cable TV Limited (hereinafter "King- ston") to amend its cable television broadcasting licence by increasing the amount of the installation fee and the maximum monthly fee which it may charge to its subscribers.
The operative part of the Commission's decision reads as follows:
Following a Public Hearing held in Toronto, Ontario on 14 November 1979, the Canadian Radio-television and Telecom munications Commission announces that it approves in part an application to amend the cable television broadcasting licence for Kingston, Ontario by increasing the installation fee from $15.00 to $25.00 and the maximum monthly fee from $6.00 to $6.50. The Commission approves an installation fee of $25.00 and a partial increase in the maximum monthly fee to $6.25.
The appeal is brought by the Canadian Broad casting League (hereinafter "CBL"), which was an intervener before the Commission.
Leave to appeal was sought on the following three grounds:
1. Parliament does not have jurisdiction under Section 91 of the British North America Act to confer upon the Respondent, Canadian Radio-Television and Telecommunications Commis sion the power to fix fees charged to subscribers for the use of cable t.v. systems;
2. The Canadian Radio-Television and Telecommunications Commission is not authorized by statute to fix such installation and maximum monthly fees for the use by subscribers of cable t.v. systems;
3. The Respondent, Canadian Radio-Television and Telecom munications Commission erred in principle in fixing a rate of return which was not based on a rate of return on capital invested by the Respondent, Kingston Cable T.V. Limited.
Leave to appeal was granted by this Court on December 11, 1980 on the following terms:
Leave to appeal is granted on the second ground only of the three grounds set forth in the applicant's notice of motion, namely, whether the Canadian Radio-Television and Telecom munications Commission was authorized by statute or regula tion to approve, by way of amendment of the licence, the installation fee and the maximum monthly fee which the respondent cable television licencee [sic] may charge to its subscribers. The application is dismissed in respect of the first and third grounds.
The applicable statute and regulations are the Broadcasting Act and the Cable Television Regu lations, C.R.C., c. 374. Cable television is subject to regulation under the Act as a "broadcasting receiving undertaking" within the definition of "broadcasting undertaking" in section 2. See Capital Cities Communications Inc., et al. v. Canadian Radio- Television Commission et al., [1978] 2 S.C.R. 141, at page 166.
The relevant provisions of the Act for purposes of the issue in the appeal are sections 3, 15, 16(1)(b) and 17(1)(a) and (b).
Section 3 of the Act, under the heading "Broad- casting Policy for Canada", is as follows:
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 eco nomic 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 stat utes and regulations, is unquestioned;
(d) the programming provided by the Canadian broadcasting system should be varied and comprehensive and should pro-
vide reasonable, balanced opportunity for the expression of differing views on matters of public concern, and the pro gramming provided by each broadcaster should be of high standard, using predominantly Canadian creative and other resources;
(e) all Canadians are entitled to broadcasting service in English and French as public funds become available;
(f) there should be provided, through a corporation estab lished by Parliament for the purpose, a national broadcasting service that is predominantly Canadian in content and character;
g) the national broadcasting service should
(i) be a balanced service of information, enlightenment and entertainment for people of different ages, interests and tastes covering the whole range of programming in fair proportion,
(ii) be extended to all parts of Canada, as public funds become available,
(iii) be in English and French, serving the special needs of geographic regions, and actively contributing to the flow and exchange of cultural and regional information and entertainment, and
(iv) contribute to the development of national unity and provide for a continuing expression of Canadian identity;
(h) where any conflict arises between the objectives of the national broadcasting service and the interests of the private element of the Canadian broadcasting system, it shall be resolved in the public interest but paramount consideration shall be given to the objectives of the national broadcasting service;
(i) facilities should be provided within the Canadian broad casting system for educational broadcasting; and
(j) the regulation and supervision of the Canadian broadcast ing system should be flexible and readily adaptable to scien tific and technical advances;
and that the objectives of the broadcasting policy for Canada enunciated in this section can best be achieved by providing for the regulation and supervision of the Canadian broadcasting system by single independent public authority.
Section 15, under the heading, "Objects of the Commission", provides:
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.
Paragraph 16(1)(b) confers authority on the Commission to make regulations as follows:
16. (1) In furtherance of its objects, the Commission, on the recommendation of the Executive Committee, may
(b) make regulations applicable to all persons holding broad casting licences, or to all persons holding broadcasting licences of one or more classes,
(i) respecting standards of programs and the allocation of broadcasting time for the purpose of giving effect to paragraph 3 (d),
(ii) respecting the character of advertising and the amount of time that may be devoted to advertising,
(iii) respecting the proportion of time that may be devoted to the broadcasting of programs, advertisements or announcements of a partisan political character and the assignment of such time on an equitable basis to political parties and candidates,
(iv) respecting the use of dramatization in programs, advertisements or announcements of a partisan political character,
(v) respecting the broadcasting times to be reserved for network programs by any broadcasting station operated as part of a network,
(vi) prescribing the conditions for the operation of broad casting stations as part of a network and the conditions for the broadcasting of network programs,
(vii) with the approval of the Treasury Board, fixing the schedules of fees to be paid by licensees and providing for the payment thereof,
(viii) requiring licensees to submit to the Commission such information regarding their programs and financial affairs or otherwise relating to the conduct and management of their affairs as the regulations may specify, and
(ix) respecting such other matters as it deems necessary for the furtherance of its objects; and
Paragraphs 17(1)(a) and (b) provide in part for the licensing authority of the Commission as follows:
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
(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 nation al broadcasting service contemplated by section 3;
(b) upon application by a licensee, amend any conditions of a broadcasting licence issued to him;
The relevant provision of the Cable Television Regulations is section 17, which reads:
17. No licensee shall charge any fee or other sum of money for
(a) any service provided by its undertaking, or
(b) the use of its undertaking,
in excess of the amount authorized by the Commission.
Although section 16 of the Regulations refers to the installation fee it would not appear to have a direct bearing on the issue in the appeal. It pre scribes the duty of a licensee to install equipment "on receipt of the amount of the installation fee authorized by the Commission", or where appli cable, an amount equal to the actual expense of installation, which a licensee is authorized by section 16 to charge in certain circumstances. I may observe here, for such significance as it may have, that it was asserted by counsel for the Com mission at the hearing, and as I understood not disputed, that the installation fee authorized by the Commission was also intended to be a max imum fee, although not expressed as such in the Commission's decision.
Since the decision of the Commission approves an application to amend the cable television licence of Kingston it purports to be an exercise of the authority conferred by paragraph 17(1)(b) of the Act to amend the conditions to which a licence has been made subject by an exercise of the au thority conferred by paragraph 17(1)(a). The pre cise issue as to the validity of the Commission's decision would appear, therefore, to be whether paragraph 17(1)(a) confers authority on the Com mission to fix, as a condition of a licence, the installation fee and the maximum monthly fee which a cable television licensee may charge to its subscribers. The appeal was also argued, however, as if the validity of section 17 of the Regulations, which rests on the regulation-making authority conferred by paragraph 16(1)(b) of the Act, was directly involved as a legal foundation of the Com mission's decision. That provision prohibits a licen see from charging fees in excess of those author ized by the Commission. If valid, it provides a legal basis for authorizing or fixing maximum fees, apart from paragraph 17(1)(a) of the Act. I am, therefore, inclined to agree that its validity should be considered at the same time as the authority conferred by paragraph 17(1)(a), since what is really being put in issue by the appeal is the general authority of the Commission to fix the fees which a cable television licensee may charge to its subscribers and not simply whether that can be
done, as a matter of form, as a condition of a licence.
It is a curious feature of this appeal that it is the consumer-oriented CBL which challenges the au thority of the Commission to control the fees of cable television licensees and it is the licensee Kingston which defends the Commission's author ity, but the particular interests or motives of the parties to the appeal cannot, of course, affect the consideration of the issue of statutory construction which is raised by it.
Counsel for CBL contended that there must be express statutory authority for a power to regulate rates or fees and that the Broadcasting Act does not confer such authority on the Commission. He argued that because of the nature and effect of rate regulation and the need of authorized criteria or standards for its exercise it is not a power which should be found to exist by necessary implication. He said that an implied power of rate regulation would be a wholly arbitrary and uncontrolled power. An attempt was made to show by various examples, including the authority under section 320 of the Railway Act, R.S.C. 1970, c. R-2, to regulate tolls in respect of telegraph and telephone which was formerly vested in the Canadian Trans port Commission and was transferred to the CRTC by section 14 of the Canadian Radio- television and Telecommunications Commission Act, S.C. 1974-75-76, c. 49, that such authority is always conferred by express statutory provision. It was pointed out that the issue has larger implica tions than the power to regulate the rates or fees which a cable television licensee may charge to its subscribers since, if such authority is found in the Act in the absence of express provision, it must extend to the rates or fees, if any, which other broadcasting licensees may charge for service.
Counsel for Kingston, supported by counsel for the Commission, contended that judicial authority indicates that a broad view is to be taken of the Commission's powers for the purpose of imple menting the broadcasting policy set out in section
3 of the Act, and that on such a view, the terms of the Act are comprehensive enough to include the power to regulate the fees which a cable television licensee may charge to its subscribers. In the alternative, it was contended that such a power exists by necessary implication on the principle that was applied by this Court in Interprovincial Pipe Line Limited v. National Energy Board, [1978] 1 F.C. 601 (C.A.) and is set out in Hals- bury's Laws of England, 3rd ed., vol. 36, para. 657, page 436 as follows: "The powers conferred by an enabling statute include not only such as are expressly granted but also, by implication, all powers which are reasonably necessary for the accomplishment of the object intended to be secured." In support of the necessity of such au thority it was emphasized that by an established policy of the Commission cable television licensees enjoyed a territorial monopoly. This was not dis puted by CBL, and it has been the subject of judicial notice: see Terra Communications Ltd. et al. v. Communicomp Data Ltd. et al. (1974), 1 O.R. (2d) 682 at 696; Capital Cities Communica tions Inc., et al. v. Canadian Radio-Television Commission et al., [1978] 2 S.C.R. 141 at pages 180-181.
Counsel for Kingston and the Commission placed particular reliance on the judgment of the Supreme Court of Canada in CKOY Limited v. The Queen on the relation of Lorne Mahoney, [1979] 1 S.C.R. 2, as indicating in their submis sion, the broad view which must be taken of the Commission's powers. The issue in that case was the validity of a Regulation prohibiting a station or network operator from broadcasting a telephone interview or conversation with a person without that person's prior consent, unless the person tele phoned the station for the purpose of participating in the broadcast. A majority of the Court held the Regulation to be valid under section 16 of the Act as being in furtherance of policy expressed in section 3. The majority found that the impugned Regulation dealt with "standards of programs" in subparagraph 16(1)(b)(î) and "programming", including high standards of programming, in para graph 3(d), but it also found support for the Regulation in subparagraph 16(1)(b)(ix), which confers authority on the Commission to make regulations "respecting such other matters as it
deems necessary for the furtherance of its objects", and thereby refers to the whole of section 3.
On the test to be applied to determine the validity of a regulation purporting to be made under section 16, Spence J., delivering the judg ment of the majority, said at pages 11-12:
The grant of power to enact regulations is given to the Commission by s. 16 of the statute. By its opening words, such a power is directed to be exercised "in furtherance of its objects". Section 15 is entitled "Objects of the Commission". For our purposes, the said objects may be briefly stated in the last words of s. 15, "with a view to implementing the broadcast ing policy enunciated in section 3 of this Act". Therefore, I agree with the courts below that the validity of any regulation enacted in reliance upon s. 16 must be tested by determining whether the regulation deals with a class of subject referred to in s. 3 of the statute and that in doing so the Court looks at the regulation objectively. However, I also agree with Evans J.A. when he states:
It is obvious from the broad language of the Act that Parliament intended to give to the Commission a wide lati tude with respect to the making of regulations to implement the policies and objects for which the Commission was created.
Therefore, whether we consider that the impugned regulation will implement a policy or not is irrelevant so long as we determine objectively that it is upon a class of subject referred to in s. 3.
With respect to subparagraph 16(1)(b)(ix) as a foundation for the Regulation, Spence J. said at pages 13-14:
I find a basis for the enactment of Regulation 5(k) also in s. 16(1)(b)(ix) of the statute. It is to be noted that its very broad words are not, as are those of s. 16(1)(b)(i), confined to the policy expressed in s. 3(d) and, therefore, authorize one enact ment of regulations to further any policy outlined in the whole of s. 3. It was submitted that s. 16(1)(b)(ix) should be confined to matters of procedure since it followed s. 16(1)(b)(viii) enabling the Commission to require licensees to submit infor mation. But the information which may be required under (viii) is very broad covering not only the licensees' financial affairs but "programs" and "the conduct and management of their affairs." Therefore, the information obtained under a regula tion enacted by virtue of s. 16(1)(b)(viii) may well provide the basis for a regulation which the Commission might deem necessary under s. 16(1)(b)(ix). Such regulation would, of course, have to be to further the "Broadcasting Policy of Canada" but it might be difficult to fit it under any of the other numbered paragraphs of s.16(1)(b). I find it of some impor tance that the broad words appearing in s. 16(1)(b)(ix) "as it deems necessary" emphasize the discretion granted to the Commission in determining what is necessary for the further-
ance of its objects. Therefore, even if the word "programming" were to receive the narrow meaning advanced by counsel for the appellant, then s. 16(1)(b)(ix) would authorize the enact ment of Regulation 5(k). So, the said regulation may well be in furtherance of the policy set out in, for instance, s. 3(c), that is, responsibility for the programmes which the licensee broad casts.
Spence J. also referred at page 14 to the "broad interpretation" given by Laskin C.J. "to the Com mission's powers under s. 15 of the Broadcasting Act" in Capital Cities Communications, supra, where the Chief Justice spoke at p. 171 of "the embracive objects committed to the Commission under s. 15 of the Act".
I conclude from these passages in the judgment of Spence J. in the CKOY case that while it is for the Court to determine objectively whether a regu lation deals with or is upon a subject referred to in section 3 of the Act, a broad view is to be taken of what is embraced by that section, having regard to the latitude or discretion that has been committed to the Commission to determine what may be necessary in a particular case for the furtherance of its policy objectives.
What was said concerning the validity of a regulation under section 16 applies equally in my opinion to the validity of a condition attached to a licence under paragraph 17(1)(a). That section begins, like section 16, with the words "In further ance of the objects of the Commission", and empowers the Executive Committee to subject a broadcasting licence to such conditions related to the circumstances of the licensee as it "deems appropriate for the implementation of the broad casting policy enunciated in section 3", an author ity that is, if anything, even broader than that which is conferred by subparagraph 16(1)(b)(ix).
Where the Commission issues a cable television broadcasting licence that confers a territorial monopoly it must surely have the authority to fix as a condition of that right the maximum fees which the licensee may charge to its subscribers. That would appear to be not only appropriate but necessary to further the policy objective of assur ing the widest possible public access to the services
of the Canadian broadcasting system, an objective that is explicitly referred to by the words "the right .. . to receive programs" in paragraph 3(c) and is implicit in the whole of section 3 because of the importance attached to broadcasting in the life of the country. In the exercise of this authority the Commission must, of course, consider not only the interests of subscribers but also the financial resources required by a licensee to provide the quality and extent of service contemplated by sec tion 3. That is something which the Commission is capable of doing without the need of specific statu tory criteria or directions.
For these reasons I am of the opinion that the Commission's decision was valid, and I would accordingly dismiss the appeal.
URIE J.: I agree.
KELLY D.J.: I concur.
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