Reference re Broadcasting Regulatory Policy CRTC 2010-167 and Broadcasting Order CRTC 2010-168

Reference re Broadcasting Regulatory Policy CRTC 2010-167 and Broadcasting Order CRTC 2010-168
Collection
Supreme Court Judgments
Date
2012-12-13
Neutral citation
2012 SCC 68
Report
[2012] 3 SCR 489
Case number
34231
Judges
McLachlin, Beverley; LeBel, Louis; Deschamps, Marie; Fish, Morris J.; Abella, Rosalie Silberman; Rothstein, Marshall; Cromwell, Thomas Albert; Moldaver, Michael J.; Karakatsanis, Andromache
On appeal from
Federal Court of Appeal
Subjects
Communications law
Statutes
Notes
SCC Case Information: 34231
Decision Content
SUPREME COURT OF CANADA
Citation: Reference re Broadcasting Regulatory Policy CRTC 2010-167 and Broadcasting Order CRTC 2010-168, 2012 SCC 68, [2012] 3 S.C.R. 489
Date: 20121213
Docket: 34231
IN THE MATTER OF the Broadcasting Act, S.C. 1991, c. 11 ;
AND IN THE MATTER OF the Canadian Radio-television and Telecommunications Commission’s Broadcasting Regulatory Policy CRTC 2010-167 and Broadcasting Order CRTC 2010-168;
AND IN THE MATTER OF an application by way of a reference to the Federal Court of Appeal pursuant to ss. 18.3(1) and 28(2) of the Federal Courts Act, R.S.C. 1985, c. F-7 .
Between:
Cogeco Cable Inc., Rogers Communications Inc.,
TELUS Communications Company and Shaw Communications Inc.
Appellants
and
Bell Media Inc. (formerly CTV Globemedia Inc.), V Interactions Inc., Newfoundland Broadcasting Co. Ltd. and Canwest Television Limited Partnership
Respondents
- and -
Canadian Radio-television and Telecommunications Commission
Intervener
Coram: McLachlin C.J. and LeBel, Deschamps, Fish, Abella, Rothstein, Cromwell, Moldaver and Karakatsanis JJ.
Reasons for Judgment:
(paras. 1 to 83)
Joint Dissenting Reasons:
(paras. 84 to 126)
Rothstein J. (McLachlin C.J. and LeBel, Fish and Moldaver JJ. concurring)
Abella and Cromwell JJ. (Deschamps and Karakatsanis JJ. concurring)
Reference re Broadcasting Regulatory Policy CRTC 2010-167 and Broadcasting Order CRTC 2010-168, 2012 SCC 68, [2012] 3 S.C.R. 489
IN THE MATTER OF the Broadcasting Act, S.C. 1991, c. 11 ;
AND IN THE MATTER OF the Canadian Radio-television and Telecommunications Commission’s Broadcasting Regulatory Policy CRTC 2010-167 and Broadcasting Order CRTC 2010-168;
AND IN THE MATTER OF an application by way of a reference to the Federal Court of Appeal pursuant to ss. 18.3(1) and 28(2) of the Federal Courts Act, R.S.C. 1985, c. F-7 .
Cogeco Cable Inc., Rogers Communications Inc., TELUS
Communications Company and Shaw Communications Inc. Appellants
v.
Bell Media Inc. (formerly CTV Globemedia Inc.),
V Interactions Inc., Newfoundland Broadcasting
Co. Ltd. and Canwest Television Limited Partnership Respondents
and
Canadian Radio-television and Telecommunications Commission Intervener
Indexed as: Reference re Broadcasting Regulatory Policy CRTC 2010-167 and Broadcasting Order CRTC 2010-168
2012 SCC 68
File No.: 34231.
2012: April 17; 2012: December 13.
Present: McLachlin C.J. and LeBel, Deschamps, Fish, Abella, Rothstein, Cromwell, Moldaver and Karakatsanis JJ.
on appeal from the federal court of appeal
Communications law — Broadcasting — Canadian Radio-television and Telecommunications Commission (“CRTC”) adopting policy establishing market-based value for signal regulatory regime — Policy empowering private local television stations (“broadcasters”) to negotiate direct compensation for retransmission of signals by cable and satellite companies (“broadcasting distribution undertakings” or “BDUs”), as well as right to prohibit BDUs from retransmitting those signals if negotiations unsuccessful — Whether CRTC having jurisdiction under Broadcasting Act to implement proposed regime — Broadcasting Act, S.C. 1991, c. 11, ss. 2 , 3 , 5 , 9 , 10 .
Legislation — Conflicting legislation — CRTC adopting policy establishing market-based value for signal regulatory regime — Policy empowering broadcasters to negotiate direct compensation for retransmission of signals by BDUs, as well as right to prohibit BDUs from retransmitting those signals if negotiations unsuccessful — Whether proposed regime conflicting with Copyright Act — Whether Copyright Act limiting discretion of CRTC in exercising regulatory and licensing powers under Broadcasting Act — Broadcasting Act, S.C. 1991, c. 11, ss. 2 , 3 , 5 , 9 , 10 — Copyright Act, R.S.C. 1985, c. C-42, ss. 2 , 21 , 31 , 89 .
Responding to recent changes to the broadcasting business environment, in 2010 the CRTC sought to introduce a market-based value for signal regulatory regime, whereby private local television stations could choose to negotiate direct compensation for the retransmission of their signals by BDUs, such as cable and satellite companies. The new regime would empower broadcasters to authorize or prohibit BDUs from retransmitting their programming services. The BDUs disputed the jurisdiction of the CRTC to implement such a regime on the basis that it conflicts with specific provisions in the Copyright Act . As a result, the CRTC referred the question of its jurisdiction to the Federal Court of Appeal, which held the proposed regime was within the statutory authority of the CRTC pursuant to its broad mandate under the Broadcasting Act to regulate and supervise all aspects of the Canadian broadcasting system, and that no conflict existed between the regime and the Copyright Act .
Held (Deschamps, Abella, Cromwell and Karakatsanis JJ. dissenting): The appeal should be allowed. The proposed regulatory regime is ultra vires the CRTC.
Per McLachlin C.J. and LeBel, Fish, Rothstein and Moldaver JJ.: The provisions of the Broadcasting Act , considered in their entire context, may not be interpreted as authorizing the CRTC to implement the proposed value for signal regime.
No provision of the Broadcasting Act expressly grants jurisdiction to the CRTC to implement the proposed regime, and it was not sufficient for the CRTC to find jurisdiction by referring in isolation to policy objectives in s. 3 and deem that the proposed value for signal regime would be beneficial for the achievement of those objectives. Establishing any link, however tenuous, between a proposed regulation and a policy objective in s. 3 of the Act cannot be a sufficient test for conferring jurisdiction on the CRTC. Policy statements are not jurisdiction-conferring provisions and cannot serve to extend the powers of the subordinate body to spheres not granted by Parliament. Similarly, a broadly drafted basket clause in respect of regulation making authority (s. 10(1) (k)), or an open-ended power to insert “such terms and conditions as the [regulatory body] deems appropriate” when issuing licences (s. 9(1) (h)) cannot be read in isolation, but rather must be taken in context with the rest of the section in which it is found. Here, none of the specific fields for regulation set out in s. 10(1) pertain to the creation of exclusive rights for broadcasters to authorize or prohibit the distribution of signals or programs or the direct economic relationship between BDUs and broadcasters. Reading the Broadcasting Act in its entire context reveals that the creation of such rights is too far removed from the core purposes intended by Parliament and from the powers granted to the CRTC under that Act.
Even if jurisdiction for the proposed value for signal regime could be found within the text of the Broadcasting Act , the proposed regime would conflict with specific provisions enacted by Parliament in the Copyright Act . First, the value for signal regime conflicts with s. 21(1) because it would grant broadcasters a retransmission authorization right against BDUs that was withheld by the scheme of the Copyright Act . A broadcaster’s s. 21(1) (c) exclusive right to authorize, or not authorize, another broadcaster to simultaneously retransmit its signals does not include a right to authorize or prohibit a BDU from retransmitting those communication signals. It would be incoherent for Parliament to set up a carefully tailored signals retransmission right in s. 21(1) , specifically excluding BDUs from the scope of the broadcasters’ exclusive rights over the simultaneous retransmission of their signals, only to enable a subordinate legislative body to enact a functionally equivalent right through a related regime. The value for signal regime would upset the aim of the Copyright Act to effect an appropriate balance between authors’ and users’ rights as expressed by Parliament in s. 21(1) .
Second, further conflict arises between the value for signal regime and the retransmission rights in s. 31 , which creates an exception to copyright infringement for the simultaneous retransmission by a BDU of a “work” carried in local signals. The value for signal regime envisions giving broadcasters deletion rights, whereby the broadcaster unable to agree with a BDU about the compensation for the distribution of its programming services would be entitled to require any program to which it has exclusive exhibition rights to be deleted from the signals of any broadcaster distributed by the BDU. The value for signal regime would effectively overturn the s. 31 exception, entitling broadcasters to control the simultaneous retransmission of works while the Copyright Act specifically excludes retransmission from the control of copyright owners, including broadcasters. In doing so, it would rewrite the balance between the owners’ and users’ interests as set out by Parliament in the Copyright Act . Because the CRTC’s value for signal regime is inconsistent with the purpose of the Copyright Act , it falls outside of the scope of the CRTC’s licensing and regulatory jurisdiction under the Broadcasting Act .
Section 31(2)(b), which provides that in order for the exception to copyright to apply the retransmission must be “lawful under the Broadcasting Act ”, is also not sufficient to ground the CRTC’s jurisdiction to implement the value for signal regulatory regime. A general reference to “lawful under the Broadcasting Act ” cannot authorize the CRTC, acting under open-ended jurisdiction-conferring provisions, to displace the specific direction of Parliament in the Copyright Act . Finally, the value for signal regime would create a new right to authorize and prevent retransmission, in effect, amending the copyright conferred by s. 21 . Thus the value for signal regime would create a new type of copyright and would do so without the required Act of Parliament, contrary to s. 89 .
Per Deschamps, Abella, Cromwell and Karakatsanis JJ. (dissenting): The CRTC determined that the proposed regime was necessary to preserve the viability of local television stations and ensure the fulfillment of the broadcasting policy objectives set out in s. 3(1) of the Broadcasting Act . Courts have consistently determined the validity of the CRTC’s exercises of power under the Broadcasting Act by asking whether the power was exercised in connection with a policy objective in s. 3(1) . This broad jurisdiction flows from the fact that the Act contains generally-worded powers for the CRTC to regulate and supervise all aspects of the Canadian broadcasting system, to impose licensing conditions, and to make regulations as the CRTC deems appropriate to implement the objects set out in s. 3(1) .
The proposed regime is within the CRTC’s regulatory jurisdiction since it is demonstrably linked to several of the basic operative broadcasting policies in s. 3 . The regime is merely an extension of the current regime, which places conditions, including financial ones, on BDUs for the licence to retransmit local stations’ signals. This broad mandate to set licensing conditions in furtherance of Canada’s broadcasting policy is analogous to the CRTC’s broad mandate to set rates, recently upheld by this Court in Bell Canada v. Bell Aliant Regional Communications, 2009 SCC 40, [2009] 2 S.C.R. 764.
The proposed regime does not create a conflict with the Copyright Act . It does not give local stations a copyright in the retransmission of their television signals. BDUs derive their right to retransmit signals only from licences granted pursuant to s. 9 of the Broadcasting Act , and must meet the conditions imposed by the CRTC on their retransmission licences, including those set out in the proposed regime. Nothing in either the definition of “broadcaster” or in s. 21(1) (c) of the Copyright Act immunizes BDUs from licensing requirements put in place by the CRTC in accordance with its broadcasting mandate.
The BDUs’ argument that the proposed regime creates royalties for local signals contrary to s. 31(2) (d) of the Copyright Act , turns s. 31(2) (d) on its head. Section 31(2) (d) simply requires that BDUs pay a royalty to copyright owners for retransmitting “distant signals”. This provision has nothing to do with whether the BDUs can be required to compensate local stations for a different purpose, namely, to fulfill the conditions of their retransmission license under the Broadcasting Act .
Cases Cited
By Rothstein J.
Referred to: Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559; Reference re Broadcasting Act, 2012 SCC 4, [2012] 1 S.C.R. 142; Barrie Public Utilities v. Canadian Cable Television Assn., 2003 SCC 28, [2003] 1 S.C.R. 476; CKOY Ltd. v. The Queen, [1979] 1 S.C.R. 2; Bell Canada v. Bell Aliant Regional Communications, 2009 SCC 40, [2009] 2 S.C.R. 764; ATCO Gas and Pipelines Ltd. v. Alberta (Energy and Utilities Board), 2006 SCC 4, [2006] 1 S.C.R. 140; Ontario v. Canadian Pacific Ltd., [1995] 2 S.C.R. 1031; R. v. Nova Scotia Pharmaceutical Society, [1992] 2 S.C.R. 606; Théberge v. Galerie d’Art du Petit Champlain inc., 2002 SCC 34, [2002] 2 S.C.R. 336; Mattel, Inc. v. 3894207 Canada Inc., 2006 SCC 22, [2006] 1 S.C.R. 772; R. v. Ulybel Enterprises Ltd., 2001 SCC 56, [2001] 2 S.C.R. 867; Pointe-Claire (City) v. Quebec (Labour Court), [1997] 1 S.C.R. 1015; Friends of the Oldman River Society v. Canada (Minister of Transport), [1992] 1 S.C.R. 3; Toronto Railway Co. v. Paget (1909), 42 S.C.R. 488; Lévis (City) v. Fraternité des policiers de Lévis Inc., 2007 SCC 14, [2007] 1 S.C.R. 591; British Columbia (Attorney General) v. Lafarge Canada Inc., 2007 SCC 23, [2007] 2 S.C.R. 86; CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13, [2004] 1 S.C.R. 339; Society of Composers, Authors and Music Publishers of Canada v. Canadian Assn. of Internet Providers, 2004 SCC 45, [2004] 2 S.C.R. 427; Tele-Mobile Co. v. Ontario, 2008 SCC 12, [2008] 1 S.C.R. 305; Canadian Admiral Corp. v. Rediffusion, Inc., [1954] Ex. C.R. 382; Rogers Communications Inc. v. Society of Composers, Authors and Music Publishers of Canada, 2012 SCC 35, [2012] 2 S.C.R. 283, [2012] 2 S.C.R. 283.
By Abella and Cromwell JJ. (dissenting)
Lévis (City) v. Fraternité des policiers de Lévis Inc., 2007 SCC 14, [2007] 1 S.C.R. 591; R. v. Ulybel Enterprises Ltd., 2001 SCC 56, [2001] 2 S.C.R. 867; CKOY Ltd. v. The Queen, [1979] 1 S.C.R. 2, aff’g (1976), 13 O.R. (2d) 156; Canadian Radio-Television and Telecommunications Commission v. CTV Television Network Ltd., [1982] 1 S.C.R. 530; Capital Cities Communications Inc. v. Canadian Radio-Television Commission, [1978] 2 S.C.R. 141; Telecommunications Workers Union v. Canadian Radio-television and Telecommunications Commission, 2003 FCA 381, [2004] 2 F.C.R. 3; Assn. for Public Broadcasting in British Columbia v. Canadian Radio-television and Telecommunications Commission, [1981] 1 F.C. 524, leave to appeal refused, [1981] 1 S.C.R. v; Société Radio-Canada v. Métromédia CMR Montréal Inc. (1999), 254 N.R. 266; Canadian Broadcasting League v. Canadian Radio-television and Telecommunications Commission, [1983] 1 F.C. 182, aff’d [1985] 1 S.C.R. 174; Canadian Motion Picture Distributors Assn. v. Partners of Viewer’s Choice Canada (1996), 137 D.L.R. (4th) 561; Bell Canada v. Bell Aliant Regional Communications, 2009 SCC 40, [2009] 2 S.C.R. 764; Barrie Public Utilities v. Canadian Cable Television Assn., 2003 SCC 28, [2003] 1 S.C.R. 476; ATCO Gas and Pipelines Ltd. v. Alberta (Energy and Utilities Board), 2006 SCC 4, [2006] 1 S.C.R. 140; CCH Canadian Ltd. v. Law Society of Upper Canada, 2004 SCC 13, [2004] 1 S.C.R. 339; Théberge v. Galerie d’Art du Petit Champlain inc., 2002 SCC 34, [2002] 2 S.C.R. 336.
Statutes and Regulations Cited
Broadcasting Act, S.C. 1991, c. 11, ss. 2 “broadcasting”, “broadcasting undertaking”, “distribution undertaking”, “program”, “programming undertaking”, 3, 5, 9, 10.
Canada-United States Free Trade Agreement Implementation Act, S.C. 1988, c. 65, ss. 61 , 62 .
Copyright Act, R.S.C. 1985, c. C-42, ss. 2 “broadcaster”, “communication signal”, “compilation”, “copyright”, “dramatic work”, “telecommunication”, 2.4(1)(b), 3(1), (1.1), 21, 23(1)(c), 31, 71 to 74, 76(1), (3), 89.
Federal Courts Act, R.S.C. 1985, c. F-7, ss. 18.3 , 28(2) .
Interpretation Act, R.S.C. 1985, c. I-21, s. 2 “Act”, “enactment”.
Local Signal and Distant Signal Regulations, SOR/89-254, ss. 1, 2.
Radiocommunication Act, R.S.C. 1985, c. R-2 .
Telecommunications Act, S.C. 1993, c. 38, s. 27 .
Treaties and Other International Instruments
Free Trade Agreement between the Goverment of Canada and the Government of the United States of America, Can. T.S. 1989 No. 3.
Authors Cited
Canada. Canadian Radio-television and Telecommunications Commission. Broadcasting Regulatory Policy CRTC 2010-167. Ottawa: The Commission, 2010.
Canada. House of Commons. Sub-Committee on the Revision of Copyright of the Standing Committee on Communications and Culture. A Charter of Rights for Creators: Report of the Sub-Committee on the Revision of Copyright. Ottawa: House of Commons, 1985.
Driedger, Elmer A. Construction of Statutes, 2nd ed. Toronto: Butterworths, 1983.
Handa, Sunny, et al. Communications Law in Canada (loose-leaf ed.). Markham: LexisNexis, 2000 (Including Service Issues 2012).
McKeown, John S. Fox on Canadian Law of Copyright and Industrial Designs, 4th ed. Toronto: Thomson/Carswell, 2009 (loose-leaf updated 2012, release 3).
Sullivan, Ruth. Sullivan on the Construction of Statutes, 5th ed. Markham, Ont.: LexisNexis, 2008.
Vaver, David. Intellectual Property Law: Copyright, Patents, Trade-marks, 2nd ed. Toronto, Ont.: Irwin Law, 2011.
APPEAL from a judgment of the Federal Court of Appeal (Nadon, Sharlow and Layden-Stevenson JJ.A.), 2011 FCA 64, 413 N.R. 312, 91 C.P.R. (4th) 389, [2011] F.C.J. No. 197 (QL), 2011 CarswellNat 398. Appeal allowed, Deschamps, Abella, Cromwell and Karakatsanis dissenting.
Neil Finkelstein, Steven G. Mason and Daniel G. C. Glover, for the appellant Cogeco Cable Inc.
Gerald L. Kerr-Wilson and Ariel Thomas, for the appellants Rogers Communications Inc. and TELUS Communications Company.
Kent E. Thomson, James Doris and Sarah Weingarten, for the appellant Shaw Communications Inc.
Benjamin Zarnett, Robert Malcomson, Peter Ruby and Julie Rosenthal, for the respondents Bell Media Inc. (formerly CTV Globemedia Inc.), V Interactions Inc. and Newfoundland Broadcasting Co. Ltd.
No one appeared for the respondent Canwest Television Limited Partnership.
No one appeared for the intervener.
The judgment of McLachlin C.J. and LeBel, Fish, Rothstein and Moldaver JJ. was delivered by
Rothstein J. —
I. Introduction
[1] The Canadian Radio-television and Telecommunications Commission (“CRTC”) has authority under the Broadcasting Act, S.C. 1991, c. 11 , to regulate and supervise the Canadian broadcasting system. In 2010, the CRTC sought to introduce a market-based value for signal regulatory regime, whereby private local television stations (referred to as such or as “broadcasters”) could choose to negotiate direct compensation for the retransmission of their signals by broadcasting distribution undertakings (“BDUs”), such as cable and satellite companies. The new regime would empower broadcasters to authorize or prohibit BDUs from retransmitting their programming services. The reference question in this appeal is whether the CRTC has jurisdiction to implement the proposed regime.
[2] The Broadcasting Act grants the CRTC wide discretion to implement regulations and issue licences with a view to furthering Canadian broadcasting policy as set out in the Broadcasting Act . However, these powers must be exercised within the statutory framework of the Broadcasting Act , and also the larger framework including interrelated statutes. This scheme includes the Copyright Act, R.S.C. 1985, c. C-42 : Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, at paras. 44-52. As such, the CRTC, as a subordinate legislative body, cannot enact a regulation or attach conditions to licences under the Broadcasting Act that conflict with provisions of another related statute.
[3] In my opinion, the value for signal regime does just that and is therefore ultra vires.
II. Facts and Procedural History
[4] Broadcasters acquire, create and produce television programming, and are licensed by the CRTC to serve a certain geographic area within the reach of their respective signal transmitters. BDUs, such as cable or satellite television service providers, pick up the over-the-air signals of broadcasters and distribute them to the BDUs’ subscribers for a fee. Even though broadcasters’ signals are free to anyone equipped with a television and an antenna, more than 90 percent of Canadians receive these signals as part of their cable service (transcript, at p. 2).
[5] BDUs must be licensed by the CRTC pursuant to s. 9 of the Broadcasting Act . Under the current regulatory model, the CRTC requires BDUs to provide certain benefits to broadcasters, in the nature of mandatory carriage and contributions to a local programming improvement fund accessible by certain local television stations. However, the broadcasters do not receive fees directly from the BDUs for the carriage of their signals.
[6] As noted by the Federal Court of Appeal (“FCA”), 2011 FCA 64, 413 N.R. 312, at para. 6, the CRTC has concluded that the existing model does not adequately deal with recent changes to the broadcasting business environment, which have caused advertising revenues for broadcasters to fall, while the revenues of BDUs have increased. As the FCA observed, the CRTC has concluded that this has resulted in a significant shift in their relative market positions and a financial crisis for broadcasters.
[7] As a solution, the CRTC seeks to implement what it terms a “value for signal regime”. This regime would permit broadcasters to negotiate with BDUs the terms upon which the BDUs may redistribute their signals. These are its main features:
- Broadcasters would have the right, every three years, to choose either to negotiate with BDUs for compensation for the right to retransmit the broadcaster’s programming services, or to continue to operate under the existing regulatory regime;
- A broadcaster who participates in the value for signal regime would forego all existing regulatory protections, including, for example, mandatory distribution of its signals as part of the basic package of BDU television services, and the right to require a BDU to delete a non-Canadian program and substitute it with the comparable program of the broadcaster, where the two programs are simultaneously broadcast and retransmitted by the BDU;
- The CRTC would only involve itself in the negotiations for the value for signal regime if the parties do not negotiate in good faith or if they request the CRTC to arbitrate;
- If no agreement is reached between the broadcaster and the BDU on the value of the distribution of the local television’s programming services, the broadcaster could require the BDU to delete any program owned by the broadcaster or for which it has acquired exclusive contractual exhibition rights from all signals distributed by the BDU in the broadcaster’s market.
The proposed regime is fully described in Broadcasting Regulatory Policy CRTC 2010-167 (2010) (“2010 Policy”) (A.R., vol. II, at p. 1).
[8] The BDUs disputed the jurisdiction of the CRTC to implement such a regime on the basis that it conflicts with specific provisions in the Copyright Act . As a result, the CRTC referred the following question to the FCA:
Is the Commission empowered, pursuant to its mandate under the Broadcasting Act , to establish a regime to enable private local television stations to choose to negotiate with broadcasting distribution undertakings a fair value in exchange for the distribution of the programming services broadcast by those local television stations?
A. Federal Court of Appeal — Sharlow J.A. (Layden-Stevenson J.A. Concurring)
[9] Sharlow J.A., writing for the majority, found the proposed regime to be within the statutory authority of the CRTC. She found that the Broadcasting Act confers a broad mandate on the CRTC to regulate and supervise all aspects of the Canadian broadcasting system. Sharlow J.A. rejected the BDUs’ argument that the proposed regime conflicts with the Copyright Act . She found that s. 21(1) of the Copyright Act gives a broadcaster a copyright in the signals it broadcasts, including the sole right to authorize a BDU to retransmit those signals (para. 33). In her opinion, while s. 31(2) provides that the s. 21 copyright is not infringed by a BDU when it retransmits a station’s local signal, s. 31(2) (b) provides that the retransmission must be “lawful under the Broadcasting Act ” (para. 38). She concluded that “the BDUs’ statutory retransmission rights in subsection 31(2) of the Copyright Act [are] subject to paragraph 31(2) (b), [and that] Parliament has ranked the objectives of Canada’s broadcasting policy ahead of those statutory retransmission rights” (para. 40).
B. Federal Court of Appeal — Nadon J.A. (Dissenting)
[10] In Nadon J.A.’s view, the proposed value for signal regime is ultra vires the powers of the CRTC because it conflicts with Parliament’s “clear statement in paragraph 31(2) (d) of the Copyright Act that royalties must be paid only for the retransmission of distant signals and not for the retransmission of local signals” (para. 49). In his view, Parliament’s expressed intention to treat local and distant signals differently is a limit on the CRTC’s jurisdiction to impose conditions under the Broadcasting Act (para. 73). Given the exhaustiveness of the statutory copyright law, in Nadon J.A.’s opinion, the CRTC’s regime must be ultra vires (para. 85).
III. Analysis
[11] The scope of the CRTC’s jurisdiction under the Broadcasting Act must be interpreted according to the modern approach to statutory interpretation. Per Elmer A. Driedger’s formulation, adopted multiple times by this Court,
the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.
(See, e.g., Bell ExpressVu, at para. 26, per Iacobucci J., citing E. A. Driedger, Construction of Statutes (2nd ed. 1983), at p. 87.)
[12] In addition,
. . . where the provision under consideration is found in an Act that is itself a component of a larger statutory scheme, the surroundings that colour the words and the scheme of the Act are more expansive.
(Bell ExpressVu, at para. 27)
The entire context of the provision thus includes not only its immediate context but also other legislation that may inform its meaning (R. Sullivan, Sullivan on the Construction of Statutes (5th ed. 2008), at p. 411).
[13] In my respectful opinion, for two reasons, the provisions of the Broadcasting Act , considered in their entire context, may not be interpreted as authorizing the CRTC to implement the proposed value for signal regime. First, a contextual reading of the provisions of the Broadcasting Act themselves reveals that they were not meant to authorize the CRTC to create exclusive rights for broadcasters to control the exploitation of their signals or works by retransmission. Second, the proposed regime would conflict with specific provisions enacted by Parliament in the Copyright Act .
A. The CRTC’s Jurisdiction Under the Broadcasting Act
[14] The reference question asks whether the CRTC has the jurisdiction to implement the proposed value for signal regime. Answering the question requires interpreting the powers granted to the CRTC under the Broadcasting Act and establishing whether the Copyright Act limits the discretion of the CRTC in the exercise of its regulatory and licensing powers. The relevant sections of the Broadcasting Act and of the Copyright Act are annexed to these reasons (see Appendix).
[15] There is no doubt that the licensing and the regulation-making powers granted to the CRTC are broad. The Broadcasting Act describes the mission of the CRTC as regulating and supervising “all aspects of the Canadian broadcasting system with a view to implementing the broadcasting policy set out in subsection 3(1) ” (s. 5(1) ).
[16] The powers granted to the CRTC are found in ss. 9 and 10 of the Broadcasting Act . Section 9 grounds the CRTC’s licensing power. Among other things, it gives the CRTC the authority to establish classes of licences, issue licences and require licensees to perform certain acts “in furtherance of its objects”. Under s. 9(1)(b)(i), the issuance of the licences may be subject to such terms and conditions “as the Commission deems appropriate for the implementation of the broadcasting policy set out in subsection 3(1) ”.
[17] Section 10 confers on the CRTC the power to make regulations. It allows the CRTC to make regulations “in furtherance of its objects” and enumerates 10 specific areas for regulations. On their face, these pertain mainly to such matters as setting the standards for programs, the allocation of broadcasting time for different types of content and the carriage of certain programming services by distribution undertakings. However, s. 10(1)(k) is a basket clause granting the CRTC the residual authority to make regulations “respecting such other matters as it deems necessary for the furtherance of its objects”.
[18] Section 3(1) of the Broadcasting Act declares at length the broadcasting policy for Canada, which this Court summarized in Reference re Broadcasting Act, 2012 SCC 4, [2012] 1 S.C.R. 142 (“ISP Reference”), at para. 4, as:
. . . the policy objectives listed under s. 3(1) of the Act focus on content, such as the cultural enrichment of Canada, the promotion of Canadian content, establishing a high standard for original programming, and ensuring that programming is diverse.
[19] In substance, the value for signal regime would regulate the economic relationships between BDUs and broadcasters. The salient feature is that the CRTC would grant individual broadcasters an exclusive right to require deletion of the programming to which they hold exhibition rights from all signals transmitted by the BDU. This program deletion right is intended to give the broadcasters the necessary leverage to require compensation from the BDUs.
[20] No provision of the Broadcasting Act expressly grants jurisdiction to the CRTC to implement the proposed regime. However, the broadcasters submit that ss. 9(1) (b)(i) and 9(1) (h) empower the CRTC to dictate the terms of the carriage relationship between broadcasters and BDUs, in furtherance of Canadian broadcasting policy (R.F., at para. 65). The broadcasters submit that the power to do this also exists under s. 10(1) (g), which empowers the CRTC to make regulations “respecting the carriage of any foreign or other programming services by distribution undertakings” and s. 10(1) (k) which allows regulations to be made “respecting such other matters as [the CRTC] deems necessary for the furtherance of its objects”.
[21] In its 2010 Policy, the CRTC determined:
. . . in order to fulfil the policy objectives set out in section 3(1) of the Act, the system needs revision so as to permit privately-owned television broadcasters to negotiate with BDUs to establish the fair value of the product provided by those broadcasters to BDUs. [para. 163]
The CRTC referred specifically only to s. 3(1) (e) and (f) of the Broadcasting Act (see para. 152 of the 2010 Policy). In their factum, the broadcasters add s. 3(1) (g), (s) and (t), 9 and 10 (R.F., at paras. 63-65, 69, 74-79 and 87). The CRTC did not refer to the jurisdiction-conferring provisions in ss. 9 and 10 .
[22] Policy statements, such as the declaration of Canadian broadcasting policy found in s. 3(1) of the Broadcasting Act , are not jurisdiction-conferring provisions. They describe the objectives of Parliament in enacting the legislation and, thus, they circumscribe the discretion granted to a subordinate legislative body (Sullivan, at pp. 387-88 and 390-91). As such, declarations of policy cannot serve to extend the powers of the subordinate body to spheres not granted by Parliament in jurisdiction-conferring provisions.
[23] In my opinion, to find jurisdiction, it was not sufficient for the CRTC to refer in isolation to policy objectives in s. 3 and deem that the proposed value for signal regime would be beneficial for the achievement of those objectives. As stated by Gonthier J., writing for the majority of this Court in Barrie Public Utilities v. Canadian Cable Television Assn., 2003 SCC 28, [2003] 1 S.C.R. 476:
. . . courts and tribunals must invoke statements of legislative purpose to elucidate, not to frustrate, legislative intent. In my view, the CRTC relied on policy objectives to set aside Parliament’s discernable intent as revealed by the plain meaning of s. 43(5), s. 43 generally and the Act as a whole. [para. 42]
It is therefore necessary to consider the jurisdiction granted to the CRTC under ss. 9 and 10 of the Act to attach conditions to licences and to make regulations.
[24] The broadcasters argue that the test for the CRTC’s jurisdiction in enacting regulations under s. 10 of the Broadcasting Act is whether the regulation objectively refers to one of the objectives in s. 3 . They rely on this Court’s decision in CKOY Ltd. v. The Queen, [1979] 1 S.C.R. 2, where the majority of the Court, per Spence J., stated, at p. 11:
. . . the validity of any regulation enacted in reliance upon s. 16 [now s. 10 ] 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.
[25] In my opinion, CKOY cannot stand for the proposition that establishing any link, however tenuous, between a proposed regulation and a policy objective in s. 3 of the Act is a sufficient test for conferring jurisdiction on the CRTC. Such an approach would conflict with the principle that policy statements circumscribe the discretion granted to a subordinate legislative body.
[26] The difference between general regulation making or licensing provisions and true jurisdiction-conferring provisions is evident when this case is compared with Bell Canada v. Bell Aliant Regional Communications, 2009 SCC 40, [2009] 2 S.C.R. 764. In Bell Aliant, this Court was asked to determine whether the creation and use of certain deferral accounts lay within the scope of the CRTC’s express power to determine whether rates set by telecommunication companies are just and reasonable. The CRTC’s jurisdiction over the setting of rates under s. 27 of the Telecommunications Act, S.C. 1993, c. 38 , provides that rates must be just and reasonable. Under that section, the CRTC is specifically empowered to determine compliance with that requirement and is conferred the express authority to “adopt any method or technique that it considers appropriate” for that purpose (s. 27(5) ).
[27] This broad, express grant of jurisdiction authorized the CRTC to create and use the deferral accounts at issue in that case. This stands in marked contrast to the provisions on which the broadcasters seek to rely in this case, which consist of a general power to make regulations under s. 10(1)(k) and a broad licensing power under s. 9(1)(b)(i). Jurisdiction-granting provisions are not analogous to general regulation making or licensing authority because the former are express grants of specific authority from Parliament while the latter must be interpreted so as not to confer unfettered discretion not contemplated by the jurisdiction-granting provisions of the legislation.
[28] That is the fundamental point. Were the only constraint on the CRTC’s powers under s. 10(1) to be found in whether the enacted regulation goes towards a policy objective in s. 3(1) , the only limit to the CRTC’s regulatory power would be its own discretionary determination of the wisdom of its proposed regulation in light of any policy objective in s. 3(1) . This would be akin to unfettered discretion. Rather,
discretion is to be exercised within the confines of the statutory regime and principles generally applicable to regulatory matters, for which the legislature is assumed to have had regard in passing that legislation.
(ATCO Gas and Pipelines Ltd. v. Alberta (Energy and Utilities Board), 2006 SCC 4, [2006] 1 S.C.R. 140, at para. 50, per Bastarache J.)
[29] A broadly drafted basket clause, such as s. 10(1)(k), or an open-ended power to insert “such terms and conditions as the [regulatory body] deems appropriate” (s. 9(1)(h)) cannot be read in isolation: ATCO, at para. 46. Rather, “[t]he content of a provision ‘is enriched by the rest of the section in which it is found . . .’” (Ontario v. Canadian Pacific Ltd., [1995] 2 S.C.R. 1031, at para. 64, per Gonthier J., citing R. v. Nova Scotia Pharmaceutical Society, [1992] 2 S.C.R. 606, at pp. 647-48; see also Sullivan, at pp. 228-29). In my opinion, none of the specific fields for regulation set out in s. 10(1) pertain to the creation of exclusive rights for broadcasters to authorize or prohibit the distribution of signals or programs, or to control the direct economic relationship between the BDUs and the broadcasters.
[30] However, the broadcasters submit that s. 10(1)(g), which enables the CRTC to make regulations “respecting the carriage of any foreign or other programming services”, and s. 9(1)(h), which empowers the CRTC to require a licensed BDU “to carry . . . programming services specified by the Commission”, together with the broad wording of ss. 10(1)(k) and 9(1)(b)(i), empower the CRTC to “dictate the terms of the carriage relationship between broadcasters and BDUs” (R.F., at para. 65). Thus, the CRTC would, in their opinion, have jurisdiction to implement the proposed regime.
[31] I cannot agree. On their face, ss. 9(1)(h) and 10(1)(g) could, for example, allow the CRTC to require the BDUs to distribute to Canadians certain types of programs, arguably, because they are deemed to be important for the country’s cultural fabric. However, it is a far cry from concluding that, coupled with ss. 10(1)(k) and 9(1)(b)(i), they entitle the CRTC to create exclusive control rights for broadcasters.
[32] This interpretation is consistent with a reading of the Act in its entire context. The Broadcasting Act has a primarily cultural aim. The other powers enumerated in s. 10(1) deal with such matters as the allocation of broadcasting time and the setting of standards for programs. In addition, the objectives of the Broadcasting Act , declared in s. 3(1) , when read together, target “the cultural enrichment of Canada, the promotion of Canadian content, establishing a high standard for original programming, and ensuring that programming is diverse” (ISP Reference, at para. 4). While such declarations of policy may not be invoked as independent grants of power, they should be given due weight in interpreting specific provisions of an Act: Sullivan, at pp. 388 and 390-91. Parliament must be presumed to have empowered the CRTC to work towards implementing these cultural objectives; however, the regulatory means granted to the CRTC to achieve these objectives fall short of creating exclusive control rights.
[33] In sum, nowhere in the Act is there a reference to the creation of exclusive control righ