Administrative Law/Telecommunications: Standard of Review; Jurisdiction

Bell Canada v. Canada (Attorney General), 2019 SCC 66 (37896) (37897)

“For more than 40 years, the NFL’s Super Bowl game, which is played in the United States, had been broadcast in Canada in accordance with the “simultaneous substitution” regime. This regime, set out in various regulations made under the Broadcasting Act , allows for a television service provider to temporarily delete and replace the entire signal of a distant (usually national or international) television station with the signal of another (usually local) television station that is airing the same program at the same time. Simultaneous substitution is permitted by the CRTC to allow Canadian broadcasters to realize greater advertising revenues; since simultaneous substitution allows local television stations to maximize their audiences for specific programs, those stations are able to charge advertisers more for in-program commercials. Because the Canadian broadcast of the Super Bowl had been subject to the applicable simultaneous substitution regime, Canadians were prevented from viewing high-profile American commercials that were aired in the U.S. broadcast of the game.

In 2013, the CRTC initiated a broad public consultation for the purpose of reviewing the entire framework for the regulation of television in Canada. As part of this consultation, it held a public hearing seeking comments on simultaneous substitution, through which Canadians expressed frustration over their inability to see high-profile commercials aired on the U.S. broadcast of the Super Bowl. In August 2016, pursuant to s. 9(1) (h) of the Broadcasting Act , the CRTC issued an order (“Order”) prohibiting simultaneous substitution for the Super Bowl as of January 1, 2017, supported by reasons (“Decision”). This meant that Canadians would be free to view the U.S. broadcast that features American commercials. Bell and the NFL sought leave to appeal the Decision and Order to the Federal Court of Appeal pursuant to s. 31(2)  of the Broadcasting Act . Leave was granted but their appeals were unanimously dismissed.”

The S.C.C. (7:2, with joint dissenting reasons) allowed the appeals and quashed the CRTC Decision and Order.

The Chief Justice et al wrote as follows (at paras. 3-5, 57):

“The main question in these statutory appeals is whether the CRTC had the authority under s. 9(1) (h) of the Broadcasting Act  to issue the Final Order. The Federal Court of Appeal answered this question in the affirmative. Applying the standard of reasonableness, it held — on the basis of “the deference owed to the CRTC in its interpretation of its home statutes and the broad discretion conferred on the CRTC by paragraph 9(1) (h)” — that “the CRTC’s explanation of its jurisdiction to make the Final Order is justifiable, transparent, and intelligible and falls within the range of reasonable outcomes defensible in respect of the facts and the law” (2017 FCA 249, [2018] 4 F.C.R. 300, at para. 28).

We arrive at a different conclusion. The applicable standard must be determined in accordance with the framework set out in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, a case this Court heard together with these statutory appeals in order to “consider the law applicable to the judicial review of administrative decisions as addressed in Dunsmuir and subsequent cases” (Vavilov, at para. 6). Given that the appellants have challenged the CRTC’s Final Decision and Final Order by way of the statutory appeal mechanism provided for in s. 31(2)  of the Broadcasting Act , the appellate standards of review apply here (Vavilov, at paras. 36-52). And because the issues in these appeals raise legal questions that go directly to the limits of the CRTC’s statutory grant of power, and therefore plainly fall within the scope of the statutory appeal mechanism referred to above, the applicable standard is correctness.

Applying this standard, we are of the view that the Final Order was issued on the basis of an incorrect interpretation of the scope of the authority conferred on the CRTC under s. 9(1) (h). Properly interpreted, s. 9(1) (h) only authorizes the issuance of mandatory carriage orders — orders that require television service providers to carry specific channels as part of their cable or satellite offerings — that include specified terms and conditions. It does not empower the CRTC to impose terms and conditions on the distribution of programming services generally. Accordingly, because the Final Order does not actually mandate that television service providers distribute a channel that broadcasts the Super Bowl, but instead simply imposes a condition on those that already do, its issuance was not authorized by s. 9(1) (h) of the Broadcasting Act .

Because the CRTC did not, in the Final Order, purport to mandate the carriage of any particular programming services, but instead sought to “add a condition that must be fulfilled should a [television service provider] carry [a Canadian] station” that broadcasts the Super Bowl (Final Decision, at para. 63 (emphasis added)), the issuance of that order was not within the scope of its delegated power under s. 9(1) (h) of the Broadcasting Act . We would therefore quash the Final Order, as well as the Final Decision.”

Full Decision