T-2602-86
Gerald French, Maria de Vries, Marquis Mander-
ville, Edith Tripp, Nigel McAlpine, William Quig-
ley and The Canadian Postmasters and Assistants
Association (Plaintiffs)
v.
Canada Post Corporation (Defendant)
INDEXED AS: FRENCH V. CANADA POST CORP.
Trial Division, Addy J.—Ottawa, November 18
and 26, 1987.
Postal service — Closure of post offices by Canada Post
Corporation — Statutory provision "Corporation may ...
make regulations ... for the closure of post offices ..." per
missive, not mandatory — Canada Post Corporation having
broader authority than Post master General under former
legislation.
Construction of statutes — Canada Post Corporation Act, s.
17(1)(p) giving Corporation power to enact regulations dealing
with post office closures — Post offices closed in absence of
regulations — Interpretation Act, s. 28 requiring permissive
interpretation of "may" — Nothing in context of Act indicat
ing contrary intention.
This is a motion for a determination of a question of law. The
question is whether Canada Post Corporation has authority to
close post offices in the absence of regulations made for that
purpose. Although paragraph 17(1)(p) of the Canada Post
Corporation Act provides that the Corporation "may" make
regulations for the closure of post offices, no such regulations
have been made.
Held, the question should be answered in the affirmative.
The argument, that the Corporation's section 17 powers had
to be exercised by subordinate legislation rather than by
administrative decision because of the public nature of the Post
Office, could not be accepted. Even Government Departments
can act in the absence of regulation unless there is a prohibition
or condition imposed by statute.
Section 28 of the Interpretation Act requires that "may" be
construed as permissive unless the context indicates a contrary
intention. The plaintiffs argued that subsection 17(8) (which
enumerates specific circumstances wherein the Corporation can
derogate from regulations relating to postal rates) was super
fluous if subsection 17(1) was permissive. Subsection 17(8) was
required from an administrative standpoint to obviate the
necessity of enacting amending regulations whenever a special
contract is contemplated for one of the enumerated reasons.
The fact that the Corporation's powers were subject to the Act
(subsection 16(1)) was not sufficient to derogate from the
general principle that a statutory body, in the absence of
regulations, is not precluded from acting merely because it has
also been given the power to make regulations pertaining
thereto. Subsection 17(1) merely illustrated the Corporation's
broad regulation-making powers.
The Canada Post Corporation Act differed from its prede
cessor the Post Office Act, in which the purposes for which and
the means by which the Postmaster General could act were
specifically set out.
STATUTES AND REGULATIONS JUDICIALLY
CONSIDERED
Canada Post Corporation Act, S.C. 1980-81-82-83, c. 54,
ss. 5(1)(c),(2)(b),(e), 6 (as am. by S.C. 1984, c. 31, s.
14), 7 (as am. idem), 16(1) (as am. idem), 17(1),(8),
20(1) (as am. idem).
Financial Administration Act, R.S.C. 1970, c. F-10, ss.
69-78 (rep. by S.C. 1984, c. 31, s. 8).
Interpretation Act, R.S.C. 1970, c. I-23, s. 28.
Post Office Act, R.S.C. 1970, c. P-14.
CASES JUDICIALLY CONSIDERED
APPLIED:
CRTC v. CTV Television Network Ltd. et al., [ 1982] 1
S.C.R. 530; Maple Lodge Farms Ltd. v. Government of
Canada, [1982] 2 S.C.R. 2; Capital Cities Communica
tions Inc. et al. v. Canadian Radio-Television Commn,
[1978] 2 S.C.R. 141.
DISTINGUISHED:
Brant Dairy Co. Ltd. et al. v. Milk Commission of
Ontario et al., [1973] S.C.R. 131; (1972), 30 D.L.R. (3d)
559.
COUNSEL:
Alan R. O'Brien and Dougald E. Brown for
plaintiffs.
John B. Laskin and David P. Olsen for
defendant.
SOLICITORS:
Nelligan/Power, Ottawa, for plaintiffs.
Tory, Tory, DesLauriers & Binnington,
Toronto, for defendant.
The following are the reasons for order ren
dered in English by
ADDY J.: The plaintiffs in this action are
requesting a declaration to the effect that several
post offices recently closed by the defendant,
Canada Post, were unlawfully closed and are also
claiming a mandatory injunction requiring the
defendant to re-open them.
The present motion was launched on consent of
the parties to have the following question of law
determined:
Does the Canada Post Corporation have authority to close post
offices in the absence of regulations made for that purpose
pursuant to Section 17(1)(p) of the Canada Post Corporation
Act, S.C. 1980-81-82-83, c. 54 as amended?
There are no regulations dealing with the clos
ing of post offices.
The issue centres around certain provisions of
sections 16 [as am. by S.C. 1984, c. 31, s. 14] and
17 of the above-mentioned Canada Post Corpora
tion Act (hereinafter referred to as "the Act"),
namely:
16. (1) In carrying out its objects and duties under this Act,
the Corporation has the capacity, and subject to this Act, the
rights, powers and privileges of a natural person.
17. (1) The Corporation may, with the approval of the
Governor in Council, make regulations for the efficient opera
tion of the business of the Corporation and for carrying the
purposes and provisions of this Act into effect, and, without
restricting the generality of the foregoing, may make
regulations
(p) providing for the closure of post offices, the termination
of rural routes and the termination of letter carrier routes;
The question is whether the word "may" in
subsection 17(1) above is merely permissive and
empowering or whether it is mandatory in the
sense that Canada Post, in order to be able to close
post offices, is obliged to ensure that regulations
are enacted dealing with the subject, rather than
by mere administrative decisions unsupported by
regulations.
Counsel for the plaintiffs points out that the
objects of Canada Post are extremely public (see
specially paragraphs 5(1)(c) and 5(2)(b) and (e)
of the Act) and that the Corporation is subject to
Government control. For instance, sections 6 [as
am. by S.C. 1984, c. 31, s. 14] and 7 [as am. idem]
give Government the power of appointment to and
removal from the Board of Directors including the
Office of the Chairman, subsection 20(1) [as am.
idem] requires the Corporation to comply with
such directives as the Minister may from time to
time give it and, as an "agency corporation",
pursuant to the Financial Administration Act
[R.S.C. 1970, c. F-10], the Governor in Council,
the Minister and the President of the Treasury
Board, pursuant to sections 69 to 78 [repealed by
S.C. 1984, c. 31, s. 8] of this last-mentioned Act
may exercise supervisory control over Canada
Post.
It is therefore argued that, because of the very
public nature of the Post Office and the right of
Government to maintain control over it, which
arises in part from the exclusive rights over the
handling and delivery of mail granted to the Cor
poration, the latter's actions provided for in section
17 of the Act, are required to be exercised in a
public fashion pursuant to regulations, that is, by
subordinate legislation, rather than by mere ad
hoc administrative decisions.
The activities of the various Departments of
Government are every bit as public as those of the
defendant and the Government control exercised
over them is more direct and complete, yet, when a
Department acts within the scope of the subject-
matter with which it is charged, it may do so in the
absence of any regulation dealing with the matter,
unless there is some contrary prohibition or condi
tion imposed by statute. Neither the public nature
of the activity nor the degree of Government con
trol by themselves, impose any requirement for the
existence of regulations as a condition of the
Department exercising its mandate. I see no reason
why they should do so in the case of a Crown
Corporation.
Counsel for the plaintiffs relied to a large extent
on the Supreme Court of Canada decision in Brant
Dairy Co. Ltd. et al. v. Milk Commission of
Ontario et al., [1973] S.C.R. 131; (1972), 30
D.L.R. (3d) 559. But this was a case where powers
were being delegated and subdelegated. Further
more, a regulation had actually been passed and it
was held to be defective because it merely repeated
the statutory provisions regarding powers to dele
gate. The distinction regarding powers to delegate
was subsequently drawn by the Supreme Court in
the case of CRTC v. CTV Television Network Ltd.
et al., [1982] 1 S.C.R. 530, where the Chief
Justice stated, at page 541:
The Brant Dairy case was concerned with an attempted delega
tion to a subordinate agency of power conferred upon a senior
agency, the power being exercised (improperly, as held by this
Court) by a wholesale delegation thereof in the same terms in
which it was imposed. That is not this case, where there is
specification of regulation-making power in CRTC and licens
ing power in the Executive Committee. What counsel for CTV
appeared to contend was that the regulation-making power
embraced what was provided by the condition and in that,
somewhat remote, sense the Executive Committee was given
power by delegation in the terms in which it had been reposed
in CRTC. I disagree with this attempted application of the
Brant Dairy case. Either the Executive Committee has the
power it exercised in imposing the condition or it did not. If not,
the matter turned on construction of the relevant provisions of
ss. 16 and 17 and not on any principles of delegation and
subdelegation.
The Supreme Court of Canada also dealt with
the subject subsequently in the case of Maple
Lodge Farms Ltd. v. Government of Canada,
[1982] 2 S.C.R. 2, which dealt with the Export
and Import Permits Act [R.S.C. 1970, c. E-17].
McIntyre J., in delivering judgment of the Court,
approved the unanimous decision of the Federal
Court of Appeal [[1981] 1 F.C. 500] in that
matter as expressed by Le Damn J. regarding the
situation where words normally construed as per
missive are to be taken as mandatory. He stated,
at page 5:
Looking at these provisions as a whole, I am of the opinion
that section 8 of the Act confers upon the Minister a discretion
as to whether or not to issue an import permit in a particular
case. Section 28 of the Interpretation Act, R.S.C. 1970, c. I-23,
requires, of course, that the word "may" in section 8 be
construed as permissive unless the context indicates a contrary
intention. See McHugh v. Union Bank of Canada [1913] A.C.
(P.C.) 299; Smith & Rhuland Limited v. The Queen, on the
relation of Brice Andrews [1953] 2 S.C.R. 95. This is not a
case for application of the principle recognized in Julius v. The
Right Rev. the Lord Bishop of Oxford (1879-80) 5 App. Cas.
214 and referred to in The Labour Relations Board of Sas-
katchewan v. The Queen on the relation of F.W. Woolworth
Co. Ltd. [1956] S.C.R. 82 at page 87, that permissive words
may be construed as creating a duty where they confer a power
the exercise of which is necessary to effectuate a right. [The
underlining is mine.]
In support of his argument that the word "may"
in subsection 17 (1) is not merely permissive or
empowering, counsel for the plaintiffs points out
that paragraph 17(1)(d) authorizes the Corpora
tion to make regulations prescribing the rates of
postage and he then refers to subsection 17(8)
which states that "Notwithstanding subsection (1),
the Corporation may prescribe rates of postage
otherwise than by regulation". He invites the
Court to conclude that, if under subsection 17(1)
the Corporation was not actually required to make
regulations dealing with matters listed in para
graphs (a) to (s), subsection 17(8) would be
entirely superfluous.
Counsel for the defendant replied that subsec
tion 17(8) gives the Corporation the right and the
power to derogate from any regulations which
might have been enacted relating to rates of post
age, where the specific circumstances mentioned in
subsection 17(8) exist, namely, where there has
been an agreement between the Corporation and
another person providing for the variation of post
age rates for bulk mail, the preparation of mail-
able matter to facilitate processing, the provision
of experimental services, etc. Therefore, there is
still a very good reason for the existence of subsec
tion 17(8), when subsection 17(1) is interpreted as
being merely permissive or empowering. If the
Post Office should decide to enact general regula
tions regarding postal rates, one can easily con
ceive that, from an administrative standpoint,
there would be a real need for subsection 17(8) in
order to obviate the requirement of enacting
amending regulations in order to meet an individu
al case where a special contract is contemplated
for one of the reasons provided for in that
subsection.
Pursuant to subsection 16(1) Canada Post not
only has the capacity of a natural person but it
also enjoys the same rights, powers and privileges.
The mere fact that the rights, powers and privi
leges are expressed to be "subject to this Act" does
not, where there is no clear prohibition or limita
tion to the contrary, detract from the general
principle that a statutory body, in the absence of
regulations pertaining to any matter within the
legitimate scope of operations, is not precluded
from acting, where the action is deemed necessary
or desirable for the proper furtherance of its
objects, merely because it has also been given the
power to make regulations pertaining thereto.
Where regulations are in effect, it must of course
conform to them but, until then, it remains free to
take administrative actions in pursuance of those
objects (Capital Cities Communications Inc. et al.
v. Canadian Radio-Television Commn, [1978] 2
S.C.R. 141; CRTC v. CTV Television Network
Ltd. et al., supra). The Chief Justice in the Capi
tal Cities case stated the issue as follows, at page
170:
The issue that arises therefore is whether the Commission or
its Executive Committee acting under its licensing athority, is
entitled to exercise that authority by reference to policy state
ments or whether it is limited in the way it deals with licence
applications or with applications to amend licenses to conformi
ty with regulations. I have no doubt that if regulations are in
force which relate to the licensing function they would have to
be followed even if there were policy statements that were at
odds with the regulations. The regulations would prevail
against any policy statements. However, absent any regula
tions, is the Commission obliged to act only ad hoc in respect of
any application for a licence or an amendment thereto, and is it
precluded from announcing policies upon which it may act
when considering any such applications?
The Court found that there was no requirement
to act by regulations.
The Act differs markedly from its predecessor
legislation, the Post Office Act [R.S.C. 1970, c.
P-14], where, instead of a broad authority, the
legislation specifically listed the purposes for
which and the means by which the Postmaster
General could act.
Section 28 of the Interpretation Act, R.S.C.
1970, c. I-23, states that in every enactment
" `may' is to be construed as permissive". It would,
in my view, take much more than a mere state
ment in subsection 16(1) that the broad powers of
a natural person therein granted are "subject to
this Act", to lead one to the conclusion that the
word "may" in subsection 17(1) is to be construed
as imposing an obligation to enact regulations
before the Post Office is to act on any of the
matters dealt with therein.
The specific provisions of subsection 17(1) are
merely illustrations of the broad powers to make
regulations which that subsection grants the Cor
poration. I can find nothing, either in the Act itself
when read as a whole or in its general purpose
provisions or in any of its sections to warrant the
finding that plaintiffs urge upon the Court.
For the above reasons, the question, as submit
ted, will be answered in the affirmative. There will
be no costs.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.