Federal Court: Canadian Cabinet is Bound by Telecommunications Statute in its Decisions

In a decision of the Federal Court that seemed to catch a number of observers by surprise, Justice Roger Hughes has found that a controversial decision (Cabinet Decision) by the federal Cabinet to overturn a ruling of the Canadian Radio-television and Telecommunications Commission (CRTC) was made without legislative authority and should therefore be struck down. The Cabinet Decision made in December, 2009 had nullified a CRTC ruling to deny a licence to Globalive Wireless Managements Corp (Globalive) to operate a wireless telecom service. The CRTC’s denial decision was based on its finding that the level of foreign control of Globalive exceeded the permitted threshold under the Telecommunications Act. The Cabinet’s move to grant the licence was the subject of an earlier E-TIPS® mini-article, “Canadian Cabinet Approval for New Wireless Entrant a Surprise Holiday Package” (Vol 8, No 13, December 16, 2009). Judicial review proceedings in the Federal Court to overturn the Cabinet Decision had been launched by a Globalive competitor, and Justice Hughes’ ruling was released on February 4, 2011. In his reasons for judgment, he affirms two obligations on a decision-making body such as the federal Cabinet when reviewing the decision of a statutory tribunal: (i) consider the relevant criteria set out in the governing statute (for example, the “essential role [of telecommunications] in the maintenance of Canada’s identity and sovereignty”, and (ii) exclude irrelevant criteria. On this latter point, Justice Hughes noted that the Cabinet Decision referred to “access to foreign capital, technology and experience” as positive factors in its decision-making, yet there is no reference in the statute to any of these as criteria to be taken into account. The Cabinet Decision was therefore subject to errors of law, said Justice Hughes, and was struck down. However, the effect of the decision was stayed for a period of 45 days, to permit the parties to pursue appeals or other remedies. The case is Public Mobile Inc et al v Attorney General of Canada et al 2011 FC 130, and the full text of the reasons is available here: http://www.scribd.com/doc/48183364/T-26-10-Judgment Summary by: Richard Potter