Professional Documents
Culture Documents
Date: 20110204
Docket: T-26-10
B E T W E E N:
PUB L I C M O BI L E I N C.
Applicant
and
A T T O RN E Y G E N E R A L O F C A N A D A,
G L O B A L I V E W I R E L ESS M A N A G E M E N T
C O RP., B E L L C A N A D A, R O G E RS
C O M M UNI C A T I O NS IN C., SH A W
C O M M UNI C A T I O NS IN C., A ND T E L US
C O M M UNI C A T I O NS C O M PA N Y
Respondents
and
A L L I A N C E O F C A N A DI A N C I N E M A,
T E L E V ISI O N A ND R A DI O A R T ISTS,
C O M M UNI C A T I O NS, E N E R G Y A ND
PAP E R W O R K E RS UNI O N O F C A N A D A, A ND
F RI E NDS O F C A N A DI A N BR O A D C AST I N G
Interveners
R E ASO NS F O R JUD G M E N T A ND JU D G M E N T
[1] This is an application for judicial review brought under the provisions of section 18.1 of the
Federal Courts Act, R.S. 1985, c. F-7 of a Decision dated December 10, 2009, made by the
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Governor in Council pursuant to section 12(1) of the Telecommunications Act, S.C. 1993, c. 38. By
that Decision, the Governor in Council varied a Decision of the Canadian Radio-television and
Council determined that the Respondent Globalive Wireless Management Corp. met the
[2] For the reasons that follow, I find that the Applicant Public Mobile Inc. has standing to bring
this Application, that the Decision of the Governor in Council is quashed, that the Judgment will be
stayed for forty-five days and that costs are to be spoken to.
IND E X
T H E PA R T I ES paragraphs 3 to 7
B A C K G R O UND F A C TS paragraphs 8 to 13
T H E G O V E RN O R I N C O UNCIL’S DECISION paragraphs 38 to 59
ISSU ES paragraphs 60 to 61
COURT’S SUPERVISORY FUNCTION
– SE C T I O N 18.1 paragraphs 62 to 65
JUD G M E N T
T H E PA R T I ES
[3] The Applicant Public Mobile Inc. successfully participated in 2008 in an auction of radio
2010. Public Mobile received a letter from the CRTC stating that Public Mobile was required to
satisfy the CRTC as to whether it complied with the Canadian ownership requirements of the
Telecommunications Act. The Record indicates that as of the date of filing of the Record, Public
[4] The Respondent Attorney General of Canada represents the Governor in Council in these
proceedings.
[5] The Respondent Globalive Wireless Managements Corp. also successfully participated in
the auction of radio frequency spectrum in securing the right to use radio frequencies that would
permit it to provide wireless telecommunications services to the public subject to compliance with
the provisions of the Telecommunications Act. The CRTC held a hearing as to whether Globalive
complied with the Canadian ownership requirements of that Act. The CRTC, in its Decision,
determined that Globalive did not meet the provisions of section 16(1) of that Act in that it was
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determination.
[6] The Respondents Bell Canada, Rogers Communications Inc., Shaw Communications and
Telus Communications, like Public Mobile and Globalive, also successfully participated in the
auction of radio frequency spectrum. They were not required to demonstrate to the CRTC that they
met the requirements of the Telecommunications Act, presumably since they had already been
offering and providing wireless communication services in Canada. Only Telus appeared in these
proceedings. It made submissions at the hearing supportive of the positions taken by the Applicant
Public Mobile.
[7] The Alliance of Canadian Cinema, Television and Radio Artists; the Communications,
Energy and Paperworkers Union of Canada and; Friends of Canadian Broadcasting were each
granted intervener status in these proceedings. They were commonly represented by the same
Counsel who provided written submissions and addressed the Court at the hearing. Those
submissions were supportive of the positions taken by the Applicant Public Mobile.
B A C K G R O UND F A C TS
including the Telecommunications Act, supra, and the Radiocommunication Act, R.S. 1985, c R-2
and its Regulations SOR/96-484. The Telecommunications Act has an unusual history. It can be
traced back to the Railway Act 1903, 3 Edw. VII, c. 58, although it has undergone several revisions,
[9] Wireless telecommunication is enabled by electronic devices which make use of the
electromagnetic spectrum. This spectrum encompasses a broad range of radio frequencies which are
treated as a public resource owned and administered by the federal government. The government
determines what frequencies may be used by what persons and for what purposes. Certain portions
of the frequency spectrum may become available for commercial use, such as by those offering cell
phone services, and have been sold by auction conducted by the federal government. The auction
relevant to the issues here commenced in the latter part of 2007 when the federal government
publicly announced the licensing framework for the issuance of spectrum licences in the Advanced
Wireless Services (AWS) band. The auction was held in mid 2008 and several parties were
successful in acquiring AWS spectrum licences. Among them were Globalive, Public Mobile, Bell,
Rogers, Shaw and Telus. Sums ranging up to over $900 million dollars were paid by various of
these parties for such licences. Globalive paid over $440 million for its licences.
[10] The successful bidders then had to obtain a licence from the Minister of Industry under the
provision of the Radiocommunication Act and Regulations, supra. Among the matters upon which
the Minister had to be satisfied was that the party was “Canadian owned and controlled” within the
meaning of section 10 of those Regulations. This section uses wording identical to section 16(3) of
the Telecommunications Act, which will be discussed later. The Minister did not hold hearings or
deliver a reasoned decision under the Radiocommunication Regulations. A licence was simply
issued. All parties, including Public Mobile, Globalive, Telus and the other corporate Respondents,
[11] The second hurdle was for Public Mobile and Globalive to demonstrate to the CRTC that
each of them met the eligibility requirements of the Telecommunications Act and, in particular,
Canadian ownership and control. For this purpose, these parties had to provide information and
make submissions to the CRTC. The CRTC also invited submissions from other interested persons.
It conducted separate hearings for each of Globalive and Public Mobile Inc. in public and in
camera. On October 29, 2009, the CRTC released its Decision CRTC 2009-678 respecting
Globalive. It determined that Globalive was in fact controlled by a non-Canadian and, therefore, it
did not meet the requirements of section 16 of the Telecommunications Act, and was not currently
[12] Section 12 of the Telecommunications Act provides that, within a stipulated period, the
Governor in Council may, on petition presented to it, or on its own motion, by order, vary or rescind
a CRTC Decision or send all or a portion of it back for reconsideration. In this case, the Governor in
Council on its own motion undertook a review of the CRTC Decision. Section 13 of the Act
requires that each province be given the opportunity to make submissions. This was done. The
parties, including Globalive and Public Mobile, made further written submissions to the Governor
in Council. Other submissions may have also been received. The Attorney General’s Counsel was
[13] On December 10, 2009, the Governor in Council released its Decision P.C. 2009-2008, the
effect of which was to vary the CRTC Decision aforesaid, and to determine that Globalive was not
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telecommunications common carrier. This is the Decision that is the subject of this judicial review.
C R T C D E C ISI O N 2009-678
[14] The CRTC released its Decision, 2009-678, respecting whether Globalive fell within the
provisions of the Telecommunications Act, on 29 October 2009. The CRTC determined that
Globalive did not meet the requirements set out in section 16 of the Act and was currently not
Decision:
[15] The evidence before the CRTC constituted documents and submissions from Globalive. It
appears that during the course of the proceedings, Globalive made certain amendments to some of
the documents, particularly those related to financing arrangements between it and an entity known
[16] At paragraph 30 of its Decision, the CRTC determined that Orascom was a non-Canadian
entity within the meaning of the Regulations. This finding was not challenged by the Governor in
Council.
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[17] The matter of principal concern for the CRTC was whether Globalive met the requirements
(a) not less than eighty per cent of the members of the board of
directors of the corporation are individual Canadians;
[18] The first two of these provisions (a) and (b) are what are referred to as “legal control”. The
CRTC found that Globalive met these requirements. The Governor in Council did not vary that
finding. That finding was not challenged at the hearing before me.
[19] The point of controversy as between the CRTC and the Governor in Council, and as argued
before me at the hearing, was whether Globalive met the provision of subsection 16(3)(c) of the
discussion as to this point at paragraphs 34 and 35 with reference to what has been called the
Canadian Airlines decision. The Governor in Council acknowledged that this decision was pertinent
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and no challenge in that respect was raised at the hearing before me. The CRTC wrote at paragraphs
Control in fact
…There is no one standard definition of control in
fact but generally, it can be viewed as the ongoing power
or ability, whether exercised or not, to determine or decide
the strategic decision-making activities of an enterprise. It
can also be viewed as the ability to manage and run the
day-to-day operations of an enterprise. Minority
shareholders and their designated directors normally have
the ability to influence a company as do others such as
bankers and employees. The influence, which can be
exercised either positively or negatively by way of veto
rights, needs to be dominant or determining, however, for it
to translate into control in fact.
[20] At paragraphs 36 and 37 of its Decision, the CRTC acknowledged that a careful
consideration of the facts in a particular case was required, and enumerated four major matters that
it would consider:
corporate governance;
shareholder rights;
commercial arrangements between Globalive and non-
Canadians; and
economic participation of Globalive and non-Canadians.
[21] As to the first of these four matters, corporate governance, the CRTC determined that
consideration of three points was required: composition of boards of directors, quorum provisions,
Corporate governance
[22] On the first point, composition of the boards of directors, the CRTC analyzed the facts and
determined, at paragraph 45, that certain amendments were required to satisfy it on this point:
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[23] On the second point, quorum provisions, the CRTC concluded at paragraph 49 that provided
amendments were made as requested in paragraph 45, the quorum provisions could be satisfied:
Commission’s analysis and determination
[24] On the third point, appointment of officers, the CRTC determined that it had no concern. At
paragraph 53 it wrote:
[25] The second major matter addressed by the CRTC was shareholders’ rights. In this regard,
commencing at paragraph 54 of its Decision, the CRTC dealt with liquidity rights, eligible
purchasers and veto rights. It concluded as to the first, liquidity rights, at paragraph 59 of its
Decision that, even in their revised form, liquidity rights provided an indication of Orascom’s
59. The Commission considers that the liquidity rights in the revised
documents are an improvement on the array of rights originally
granted to Orascom as minority voting shareholder. Nevertheless,
the liquidity rights, even in their revised form, provide an indication
of Orascom's influence over the venture. The specification of a floor
price and the imposition of a cap on the proceeds generated in the
event that AAL sells its shares are inconsistent with the relative
voting interests of the shareholders.
[26] On the second point, eligible purchasers, the CRTC concluded at paragraph 64 of its
[27] On the third point, veto rights, the CRTC concluded at paragraphs 71 and 72 of its Decision
Commission’s analysis and determination
[28] The third major matter addressed by the CRTC was commercial arrangements between
Globalive and non-Canadians. In that respect, the CRTC considered a Technical Services
[29] With respect to the Technical Services Agreement (TSA), the CRTC determined that such
an agreement resulted in continued influence by Orascom over operating and strategic decisions
Commission’s analysis and determination
[30] With respect to the Trademark Agreement (WIND) the CRTC determined that it provided
[31] The final major matter considered by the CRTC was economic participation of Globalive
and non-Canadians. On this matter, the CRTC considered both equity participation and financing
arrangements.
[32] As to equity participation, the CRTC determined that while there was an avenue of
influence, it was not sufficient to convert that influence to control. It wrote at paragraphs 90 and 94:
A. Equity participation
90. The overall equity positions of the shareholders are the same
under both the pre-hearing and the revised structures. The
combination of Orascom's voting and non-voting shares in GIHC
translates into 65.1 percent of Globalive's total equity.
...
[33] As to the financing arrangements, the CRTC devoted much attention to this matter in its
Decision and determined, at paragraph 112, that the high level of debt in the hands of a non-
Canadian was unacceptable. The CRTC began its discussion at paragraphs 95 and 96 of its
Decision:
B. F inancing arrangements
Commission’s analysis and determination
110. During the oral phase of the public hearing, Globalive noted
that Orascom and AAL had planned to rely heavily on external
financing to capitalize Globalive. However, following completion of
the AWS auction, Globalive's efforts to obtain external financing to
replace Orascom's loans coincided with a major downturn in the
credit markets. Orascom indicated that it is not interested in
remaining Globalive's major lender and is committed to transferring
its loans to an outside party. However, at this time, Orascom remains
the major source of financing for Globalive in the near term.
111. Globalive stated during the oral phase of the public hearing
that the capital investment required for a national wireless start-up is
well over $1 billion. Having raised approximately $600 million,
Globalive will require significant further capital in order to complete
its network rollout. The Commission considers that Globalive's
dependence upon Orascom for financing may well increase in the
near term, given its inability to date to attract substantial third-party
financing.
[35] The conclusion reached by the CRTC was set out at paragraphs 113 to 119 of its Decision. It
determined that each of the factors considered may lead to an avenue for influence, when combined
they translated into the ability to control in fact (see section 16(3)(c) of the Telecommunications Act,
supra). It wrote:
Conclusion
117. Given the changes that were made during the public hearing
and presuming that the additional changes that have been identified
in this decision are made, these elements taken together, while
significant, would not cause the Commission, in the circumstances of
this case, to reach a decision that Orascom is in a position of
influence that is both dominant and determining.
119. In light of all the above, the Commission finds that Globalive
is controlled in fact by Orascom, a non-Canadian. Therefore, the
Commission concludes that Globalive does not meet the
requirements set out in section 16 of the Act and is not currently
eligible to operate as a telecommunications common carrier.
[36] As to paragraph 115 above, the CRTC issued an erratum on 4 November 2009, in which the
words “liquidity rights” near the end of that paragraph, were replaced with the words “Eligible
Purchasers” so as to read:
[37] It was this Decision that the Governor in Council, on its own motion, undertook to review.
T H E G O V E RN O R I N C O UN C I L’S D E C ISI O N
[38] On December 10, 2009 the Privy Council released the Decision of the Governor in Council,
P.C. 2009-2008. This Decision comprised two parts. The first four pages set out a series of
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“Whereases” with a concluding “Therefore”. Attached as a Schedule were twenty-four paragraphs
which amended several paragraphs of the CRTC Decision in various respects. The result was, as set
out in paragraph 23 of the Schedule, to vary the CRTC Decision and to determine that Globalive
was not controlled in fact by Orascom, a non-Canadian, and that Globalive was eligible to operate
[39] Section 12(8) of the Telecommunications Act stipulates that when the Governor in Council
makes an order such as this, reasons shall be set out. Mr. Heintzman, Counsel for Globalive,
Order is set out in the “Whereas” pages and the decision under section 16 as to whether Globalive is
in fact not controlled by non-Canadians is set out in the Schedule. Mr. MacKinnon, for the Attorney
Order and the Reasons. Counsel for the Applicant and those supporting the Applicant were puzzled
[40] I prefer to consider the first four “Whereas” pages as being akin to what is sometimes
CRTC had identified four areas of concern with respect to control in fact:
[42] The final paragraph of the first page stated that the debt financing was the main reason that
the CRTC found that Globalive did not meet the Canadian ownership and control requirements:
[43] At the top of the second page, the Governor in Council stated what it considered to be a
[44] This appears to reflect that which is set out in subsections 7(b), (c) and (d) of the
Telecommunications Act:
Objectives
...
[45] The Governor in Council then referred to the bidding process for spectrum, and that
Globalive was a successful bidder. In the fourth paragraph on the second page, the Governor in
Council acknowledged that Globalive must satisfy the Canadian ownership and control
[46] These requirements are set out in subsection 16(3) of the Act previously referred to. They
are the “legal” and “control in fact” requirements.
ownership and control as set out in section 7(d) of the Telecommunications Act is somehow to be
considered as flexible and possibly subordinate to other considerations, such as that set out in
section 7(c), the enhancement of efficiency and competitiveness. One policy objective cannot be
subordinate to another:
7 or anywhere else in the Telecommunications Act; namely, that access to foreign capital technology
[49] The Governor in Council’s Decision next acknowledged that the test respecting control was
both legal and factual and, as found by the CRTC, the legal requirements had been met. No party
in section 16(3)(c) of the Telecommunications Act, was expressed in the form of a double negative
[51] When asked whether this use of a double negative was purely a semantical exercise,
Counsel for Globalive said no. This position was supported by Counsel for the Attorney General.
They argued that this wording made room for a situation where a broadly held multi-national entity
may have control. In this respect, they argued, control could be in the hands of an entity that was
“not a non-Canadian”.
“Reasons” (not otherwise described or indicated as to where they could be found) which are said to
[53] The first two “Whereas” paragraphs on page 4 state that submissions have been sought from
provincial governments and that the submissions made by Globalive and others at the CRTC
hearing have been of benefit to the Governor in Council. Reference is also made to “additional
submissions” by others. The Applicant sought disclosure of these submissions and the Attorney
was not pursued with any vigour by Applicant’s Counsel at the hearing.
[54] The third paragraph of the fourth page sets out a criterion used by the Governor in Council
in coming to its Decision; namely, whether Canadians would be deprived of a more competitive
wireless telecommunication market. This criterion reflects the wording set out in section 7(c) of the
Telecommunications Act:
[55] The penultimate paragraph of the Decision appears to open the door for Globalive to enter
[56] The final paragraph of the Governor in Council’s Decision is a “Therefore” paragraph that
[57] The Schedule in many respects tracks the language of the CRTC Decision, but makes
several changes which affect the resulting determination as it was made by the CRTC. These
include findings as to whether the structure of the board of directors ensured that non-Canadian
nominees could be elected, whether the debt financing structure could result in undue influence by a
non-Canadian, the effect of liquidity rights, the definition of eligible purchasers of shares, the effect
of the Technical Service Agreement and the Trademark Agreement; all of which led the CRTC to
[58] I accept the summary reflecting several of these differences between the CRTC Decision
and the Governor in Council’s Decision, as presented in the Applicant’s written submissions:
AAL’s Liquidity Rights
WIND brand
Debt Financing
Conclusion
ISSU ES
[60] I accept the succinct statement of issues as set out in the Attorney General’s Memorandum:
1. Whether Public Mobile has standing, and whether it has an effective remedy under
2. Whether the Governor in Council acted within the statutory mandate in varying the
[61] There will be sub-issues considered as well. I will begin with general comments as to
COURT’S SUPERVISORY FUNCTION – SE C T I O N 18.1
[62] The general supervisory function of the Courts over administrative powers exercised by
government decision-makers was considered by the Supreme Court of Canada in Dunsmuir v. New
Brunswick, [2008] 1 S.C.R. 190. All public authority exercises of decision-making powers must
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find their source in law, whether derived from the enabling statute or the pertinent common law, or
civil law. This principle recognizes that even the Governor in Council must adhere to the rule of law
and to the statutory enactments of Parliament. Bastarache and LeBel JJ wrote at paragraphs 27 to 29
of Dunsmuir:
A. Judicial Review
[63] Section 18.1 of the Federal Courts Act gives to the Federal Court the power of judicial
review in respect of a decision of a federal board, commission or other tribunal, and the power to
grant relief where it has been determined that any one of a number of grounds as set out in
18.1
(b) declare invalid or unlawful, or quash, set aside or set aside and
refer back for determination in accordance with such directions as it
considers to be appropriate, prohibit or restrain, a decision, order,
act or proceeding of a federal board, commission or other tribunal.
Grounds of review
(4) The F ederal Court may grant relief under subsection (3) if it is
satisfied that the federal board, commission or other tribunal
[64] The Supreme Court of Canada has recently considered the nature of judicial review under
the provisions of section 18.1 in its unanimous decision in Canada (Attorney General) v. TeleZone
Inc., 2010 SCC 62. It wrote that judicial review is directed at the legality, reasonableness and
designed to enforce the rule of law and adherence to the Constitution (paragraph 24). It also wrote
that the enactment of the Federal Courts Act, as amended, was designed to enhance government
[65] In the present case, this judicial review is to be undertaken with a view of determining
the Courts is to enforce the rule of law, to determine whether there has been adherence to the
Constitution with respect to the procedures employed and actions taken and to determine the
ISSU E 1: Whether Public Mobile has standing, and whether it has an effective
a) Standing
[66] Public Mobile, just as Globalive, was a successful bidder in the auction of radio frequency
spectrum. It has received a licence from the Minister of Industry to offer wireless communication
services in Canada using that spectrum. It was required by the CRTC to demonstrate that it was
[67] The remaining Respondents, other than the Attorney General, have also been successful
bidders and received licences. They were not required to demonstrate to the CRTC that they were
Canadian owned and controlled, presumably since they were already active in the Canadian
marketplace.
[68] Only Globalive had experienced a change in its position. It was a successful bidder at the
auction; it received a licence from the Minister of Industry. The CRTC determined that it could not
operate in Canada, as it was not Canadian owned and controlled. That decision was reversed by the
Governor in Council.
[69] Much has been written as to who has standing to challenge a decision of a federal board or
tribunal. I reviewed some of this jurisprudence recently in Air Canada v. Toronto Port Authority,
2010 FC 774, particularly at paragraphs 58 to 66, paying attention, among other cases, to the recent
decision of the Federal Court of Appeal in Irving Shipbuilding Inc. v. Canada (Attorney General),
2009 FCA 116, 314 DLR (4th) 430 and to Ferring Inc. v. Canada (Minister of Health), 2007 FCA
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276, 370 N.R. 263. I concluded at paragraph 65 of Air Canada that there was no simple formula
whereby a person having a commercial interest can be said to have or to lack standing. The context
of the situation and the basis for judicial review must be considered.
[70] I drew the attention of the parties at this hearing to the very recent decision of the Federal
where Stratas JA for the Court considered both direct standing and public interest standing at
paragraphs 57 to 59:
C. Analysis
(1) Did the appellant have standing to bring the applications for
judicial review?
(b) the party seeking public interest standing has a genuine or direct
interest in the outcome of the litigation; and
(c) there is no other reasonable and effective way to bring the issue
before the Court.
[71] This discussion in B’Nai Brith should not be taken to mean that the only persons who have
standing to challenge a decision are those whose own interests were immediately affected or those
who find themselves representing a public interest within certain enumerated criteria. As Evans JA
wrote in Irving Shipbuilding, supra, the question of standing cannot be answered in the abstract.
Standing must be considered in the context in which the review arises. He wrote at paragraphs 28,
32 and 33:
... most if not all judicial review statutes are drafted against
the background of the common law of judicial review. Even
the more comprehensive among them ... can only sensibly be
interpreted in the common law context ...
...
[72] The approach of the Courts as to the standing of those seeking judicial review should tend to
be inclusive rather than exclusory. By way of analogy, the Supreme Court of Canada, recently wrote
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a unanimous decision in Canada (Attorney General) v. McArthur, 2010 SCC 63, saying at
paragraphs 11 and 12, that one should not exaggerate the exclusive nature of section 18 of the
Federal Courts Act; a person should not be put through unnecessary and unproductive procedural
hoops.
[73] Referring, for instance, to Thorson v. Canada (Attorney General), [1975] 1 S.C.R. 138, one
can understand the attitude of the Courts in exercising judicial discretion, particularly the majority
decision at pages 161 and 162 where it allowed a member of the Canadian public (albeit a former
President of the Exchequer Court) with no particular or unique interest, to challenge the
[74] One can even go much further back in history in referring to the Roman/Jewish historian
Flavius Josephus in Book II of his dissertation “Against Apion” written toward the end of the first
century of the Common Era, where he considered the writings of the Phonecians, Chaldeans and
Egyptians in respect of the laws of the Jewish nation and wrote at verse 28 (I refer to the latter
portion):
“If any judge takes bribes, his punishment is death; he that overlooks
one that offers him a petition, and this when he is able to relieve him,
is a guilty person.”
[75] It all comes to the same thing. If there is merit to the issue raised, the Court should be lenient
in permitting standing.
[76] In the present case, Public Mobile, Globalive and the other corporate Respondents, were all
in the same commercial situation. They all bid at the spectrum auction. All were successful. All got
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licences. The CRTC said that one of them, Globalive, was not eligible, particularly on the CRTC’s
view of foreign control and the debt structure of Globalive. The Governor in Council reversed that
decision saying that the reversal was applicable only in this instance.
[77] Public Mobile was involved in the whole process. It made submissions to the Governor in
Council. The impact was clearly stated by Mr. Alex Krstajic, chief executive officer of Public
Mobile in his cross-examination in these proceedings conducted April 6, 2010, where he said in
answer to questions 181 and 182, notwithstanding the objection of his own Counsel:
BY MR. HUBBARD:
181. Q. Sir, you would agree with me that Public Mobile has
no direct interest in this Governor in Council decision?
MR. HUBBARD: What’s the basis for the refusal, Counsel?
foreign capital and another can’t? Yes, yes, it directly
impacts me.
[78] Counsel for the Attorney General argued that the Applicant did not “plead” the nature of the
standing which it claimed in order to secure judicial relief. This is an application, not an action. The
reviewed this situation in my decision in Air Canada, supra, at paragraphs 77 to 85. Even if there
were requirements for pleadings, to “plead” standing in the Notice of Application would be to
well aware of the arguments raised as to standing. Nobody was taken by surprise. Each party argued
the matter fully. I reject any argument as to lack of “pleading”.
[79] I find that Public Mobile has sufficient interest in the matters at issue so as to be a person
b) Alternative Remedy
[80] The Attorney General’s Counsel argued that Public Mobile should not be allowed standing
because it has an effective alternate remedy. This point was not vigorously pursued at the hearing.
The argument is not based on any provision in the Telecommunications Act or other relevant statute;
rather, it relies on a suggestion that certain legal tactics may be pursued by Public Mobile that may
result in providing it with some relief that it may see as favourable. I repeat those tactics as
66. The only means by which Public Mobile can achieve legal
certainty for its expressed concern is for the company to request a
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[81] The Attorney General cited the decision of the Federal Court of Appeal in Canada (Border
Services Agency) v. C.B. Powell Ltd., 2010 FCA 61 for the proposition that a party can proceed to
the court system only after all adequate remedial resources in the administrative process have been
exhausted.
[82] I agree that where the applicable statute or regulations provide for appeals, reviews and
other such remedies in respect of decisions, it is appropriate that such avenues be exhausted before
recourse to the courts. This does not mean that an opposing party who can offer legal strategies that
may or may not work can, by suggesting such strategies, frustrate access to the courts. That is all
ISSU E 2: Whether the Governor in Council acted within its statutory mandate in
[84] It is common ground that the Telecommunications Act, S.C. 1993, c. 38 is the relevant
statute under which both the CRTC and the Governor in Council made their decisions. Sections 4
and 5 of that Act provide any person, other than a broadcasting undertaking, who operates any
transmission facility of a Canadian carrier, is subject to the Act. Each of these terms is a defined
term and, for purposes of these Reasons, it can be accepted that each of Public Mobile, Globalive
[85] Section 7 of the Act sets out the objectives of Canadian telecommunications policy. It says:
Objectives
[86] Sections 8, 10 and 11 of the Act permit the Governor in Council, by order, to issue directions
to the CRTC on broad policy matters with respect to Canadian telecommunications policy
[87] Section 12(1) of the Act permits the Governor in Council, on its own motion or on petition
from another, by order, to vary or rescind or send back to the CRTC any CRTC decision. Section
12(8) requires reasons to be given. Section 13 requires consultation with the provincial government.
12. (1) Within one year after a decision by the Commission, the
Governor in Council may, on petition in writing presented to the
Governor in Council within ninety days after the decision, or on the
Governor in Council’s own motion, by order, vary or rescind the
decision or refer it back to the Commission for reconsideration of all
or a portion of it.
…
Reasons
…
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Provincial consultation
[88] Section 72(15) exempts from a review by the Governor in Council decisions of the CRTC as
to violation of its orders and imposition of a penalty. This is not relevant here.
[89] Section 16(1) of the Act provides that a Canadian carrier is eligible to operate as a
Eligibility
[90] Subsection 16(3) of the Act which is pertinent here, defines what is Canadian-owned and
(a) not less than eighty per cent of the members of the board of
directors of the corporation are individual Canadians;
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[91] It is agreed that the ‘legal control” requirements of subsections 16(3) (a) and (b) have been
in fact” provision of subsection 16(3)(c) had been met.
[92] Section 47 of the Act provides that the CRTC shall exercise its powers with a view to
47. The Commission shall exercise its powers and perform its duties
under this Act and any special Act
[93] Section 52 of the Act is directed at findings of fact by the CRTC. Subsection 52(1) provides
Pending proceedings
[94] Sections 60 through 63 of the Act deal with decisions of the CRTC. Section 64(1) provides
for an appeal to the Federal Court of Appeal on any question of law or of jurisdiction:
[95] The constant theme of the Act is adherence to Canadian telecommunications policy
objectives. Those objectives are set out in section 7 of the Act. The opening paragraph of section 7
and sovereignty.
b) F indings of F act
[96] Subsection 52(1) of the Telecommunications Act as reproduced above, provides that a
[97] Counsel for Globalive traced this provision back to section 59 of the National
Transportation Act, R.S. 1985, c. N-20 and right back to the Railway Act, 3 Edw. VII, c. 58, section
the Governor in Council. They argue that the Railway Act of 1903 should not reach “beyond the
grave” so as to constrain the modern Telecommunications Act.
[99] To determine whether the question as to the reach of subsection 52(1) of the Act applies to
the Governor in Council’s Decision, the Court must first consider whether the Governor in Council
disturbed a “finding of fact” by the CRTC.
[100] The Supreme Court of Canada provided useful guidance on this issue in Housen v.
Nikolaisen [2002] 2 S.C.R. 235. The majority decision written by Iacobucci and Major JJ noted the
important distinction between findings of fact and conclusions drawn from those findings, which
conclusions are sometimes, somewhat carelessly, also called findings of fact. If a Court finds that a
person committed acts A and B and failed to commit act C, these are findings of fact. If the Court
then concludes that as a result, the person was negligent, that is a conclusion drawn from the
findings of fact. The result is termed a question of mixed fact and law. The majority wrote at
paragraph 26:
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[101] Once it is determined that a finding is one of mixed fact and law, the Court must consider
whether the alleged error is purely one of law that is subject to review on the correctness standard.
[102] The Decision of the Governor in Council did not disagree with the CRTC on its factual
determinations. It disagreed with the CRTC as to the conclusions to be drawn from those facts. This
is quite apparent, for instance, with reference to the following “Whereas” clauses at page 3:
[103] This is also apparent in reading the Schedule, much of which has been set out earlier in these
[104] I conclude, therefore, that the Governor in Council has not made any different findings of
fact than those found by the CRTC. However, the Governor in Council has drawn different
conclusions from those findings. It has made a legal determination drawn from those facts. As such,
the findings of the Governor in Council based on a legal determination are to be judicially reviewed
c) Legal Findings
[105] As determined above, the Decision of the Governor in Council involves legal findings and is
to be determined on a standard of correctness. The governing legal provisions are those of the
Telecommunications Act.
[106] The legal basis upon which the Governor in Council has stated that its Decision was made
has been set out at page 2 of the “Whereas” recitals:
[107] The Governor in Council has in many respects adhered to and acknowledged the Canadian
telecommunication policy objectives as set out in section 7 of the Act. However, the Governor in
Council has stepped outside those provisions by inserting a previously unknown policy objective
into section 7; namely, that of ensuring access to foreign capital, technology and experience.
Secondly it erred by limiting its Decision to Globalive only. What is the effect of so doing?
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[108] There is no doubt that the Governor in Council is bound by the Act and that the Courts may,
by way of judicial review, determine whether the Governor in Council has acted within or outside
the provisions of the Act. The Supreme Court of Canada has recently followed such a practice in
Montreal (city) v. Montreal Port Authority, 2010 SCC 14. LeBel J for the Court wrote at paragraphs
33 and 47:
[109] The Supreme Court of Canada in dealing with a decision of the Governor in Council in
reviewing a decision of the CRTC in Canada (Attorney General) v. Inuit Tapirisat of Canada,
[1980] 2 S.C.R. 735 stated the same principles. Estey J for the Court wrote at page 748:
Let it be said at the outset that the mere fact that a statutory
power is vested in the Governor in Council does not mean that it is
beyond review. If that body has failed to observe a condition
precedent to the exercise of that power, the court can declare that
such purported exercise is a nullity.
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[111] The issues in the Inuit Tapirisat case are different from the issues in the present case in that
Inuit Tapirisat was dealing with the procedural aspects concerning a decision of the Governor in
Council. In the present case, we are dealing with the legal basis for such a decision.
[112] The Federal Court of Appeal in Canada (Canadian Wheat Board) v. Canada (Attorney
General), 2009 FCA 214, 392 N.R. 149 had stated that it is settled law that the Governor in Council
must stay within its boundaries of the enabling statute. Noël JA for the Court wrote at paragraph 37:
[113] A decision-maker such as the Governor in Council is not only required to take into
consideration the relevant statutory criteria, but also to exclude irrelevant criteria. Binnie J for the
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majority of the Supreme Court of Canada in Canadian Union of Public E mployees (C.U.P.E.) v.
[114] The same proposition was stated by Cory J (as he then was) in delivering the judgment of
at page 174:
It has been held that even if made in good faith and with the best of
intentions, a departure by a decision-making body from the objects
and purposes of a statute pursuant to which it acts is objectionable
and subject to review by the Courts.
[115] The Governor in Council in this case misdirected itself in law, particularly as expressed in
the “reasons” as set out in the following “Whereas” clauses:
[116] In the present case, the Telecommunications Act makes it clear in the opening portion of
section 7 that telecommunications has an essential role in the maintenance of Canada’s identity and
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sovereignty. Subsection 7(d) states as a policy objective the promotion of ownership and control of
Canadian carriers by Canadians. Section 16 of the Act requires legal control and control in fact to
be Canadian.
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
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.
[118] In the second of the above “Whereas” clauses, the Governor in Council acted outside the
legal parameters of the Act in stating that its Decision impacts only on Globalive. The
Page: 55
Governor in Council cannot restrict its interpretation to one individual and not to others who may
[119] These improper considerations were fundamental to the determination of the Governor in
Council to reverse the Decision of the CRTC. Therefore, the Decision of the Governor in Council
must be quashed.
C O N C L USI O NS
[120] For the reasons provided, I have determined that the Applicant Public Mobile has standing
to seek judicial review of the Decision of the Governor in Council dated 10 December 2009. That
[121] Counsel for Globalive submitted that, in the event that I made such a determination, it would
be reasonable to stay the determination for a period of time so as to permit Globalive and any other
relevant person to pursue such appeals and other remedies as may be available. I will stay my
C OSTS
[122] I invited Counsel for the parties to make submissions as to costs of the hearing. After
discussion, it was determined that those submissions could be made after the release of these
Reasons. I invite Counsel, therefore, to provide written submissions as to costs, both allocation and
quantum, not to exceed three (3) pages, within thirty (30) days of the date of release of these
Reasons.
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JUD G M E N T
dated December 10, 2009 is null and void in that it was determined on a
period of forty-five (45) days from the date of the release of the Reasons and
Judgment herein;
costs, both as to the allocation and quantum, not to exceed (3) pages in
length, within thirty (30) days from the date of the release of the Reasons and
Judgment herein.
"Roger T. Hughes"
Judge
F E D E R A L C O UR T
SO L I C I T O RS O F R E C O RD
DO C K E T: T-26-10
P L A C E O F H E A RI N G : Ottawa, Ontario
D A T E D: February X X, 2011
APPE A R A N C ES:
Michael H. Ryan
Arnold & Porter LLP, London,
England
SO L I C I T O RS O F R E C O RD: