Canadian National Railway Co. v. Canada (Attorney General)

Canadian National Railway Co. v. Canada (Attorney General)
Collection
Supreme Court Judgments
Date
2014-05-23
Neutral citation
2014 SCC 40
Report
[2014] 2 SCR 135
Case number
35145
Judges
McLachlin, Beverley; LeBel, Louis; Abella, Rosalie Silberman; Rothstein, Marshall; Cromwell, Thomas Albert; Karakatsanis, Andromache; Wagner, Richard
On appeal from
Federal Court of Appeal
Subjects
Administrative law
Notes
SCC Case Information: 35145
Decision Content
SUPREME COURT OF CANADA
Citation: Canadian National Railway Co. v. Canada (Attorney General), 2014 SCC 40, [2014] 2 S.C.R. 135
Date: 20140523
Docket: 35145
Between:
Canadian National Railway Company
Appellant
and
Attorney General of Canada,
Peace River Coal Inc. and
Canadian Industrial Transportation Association
Respondents
Coram: McLachlin C.J. and LeBel, Abella, Rothstein, Cromwell, Karakatsanis and Wagner JJ.
Reasons for Judgment:
(paras. 1 to 69)
Rothstein J. (McLachlin C.J. and LeBel, Abella, Cromwell, Karakatsanis and Wagner JJ. concurring)
cn v. canada (a.g.), 2014 SCC 40, [2014] 2 S.C.R. 135
Canadian National Railway Company Appellant
v.
Attorney General of Canada,
Peace River Coal Inc. and
Canadian Industrial Transportation Association Respondents
Indexed as: Canadian National Railway Co. v. Canada (Attorney General)
2014 SCC 40
File No.: 35145.
2014: January 14; 2014: May 23.
Present: McLachlin C.J. and LeBel, Abella, Rothstein, Cromwell, Karakatsanis and Wagner JJ.
on appeal from the federal court of appeal
Administrative law — Transportation law — Boards and tribunals — Judicial review — Standard of review — Governor in Council rescinding decision of Canadian Transportation Agency — Whether Governor in Council empowered to vary or rescind decision of Agency — Whether applicable standard of review is correctness or reasonableness — Canadian Transportation Act, S.C. 1996, c. 10, ss. 40 , 41 , 120.1 .
The confidential contract between PRC and CN for shipping coal specified that a fuel surcharge set out in Tariff 7402 would be applied when the monthly average price of highway diesel fuel equalled or exceeded the “strike price”. Tariff 7402 set the strike price at US$1.25 per gallon. CN could make unilateral changes to Tariff 7402, and the contract provided no mechanism for PRC to challenge any such change.
Shortly after the confidential contract took effect, CN introduced Tariff 7403, which provided for a higher strike price. Tariff 7402 and its lower strike price would remain in effect until the expiration of those contracts to which it applied. CN refused to apply the higher strike price to PRC’s traffic, and the Canadian Transportation Agency (“Agency”) dismissed PRC’s application under s. 120.1 of the Canada Transportation Act (“CTA ”) for an order that the strike price in Tariff 7402 be varied to reflect the higher strike price in Tariff 7403. The Canadian Industrial Transportation Association then filed a petition under s. 40 of the CTA requesting that the Governor in Council vary the Agency’s decision and direct the Agency that the confidential contract does not preclude the Agency from assessing the reasonableness of the fuel surcharge in Tariff 7402. The Governor in Council rescinded the Agency’s decision. On judicial review, the Federal Court found that the issue before the Governor in Council was one of pure jurisdiction, applied the correctness standard and set aside the Order of the Governor in Council, and restored the Agency’s decision. The Federal Court of Appeal, applying a reasonableness standard, set aside the judgment of the Federal Court and dismissed CN’s application for judicial review of the Governor in Council’s decision.
Held: The appeal should be dismissed.
Section 40 of the CTA confers broad authority on the Governor in Council to address any orders or decisions of the Agency, including those involving questions of law. Where Parliament intends to limit the Governor in Council’s authority, it does so expressly, but the only inherent limitation on the authority conferred by s. 40 is that the Governor in Council’s authority is limited to matters already dealt with by the Commission. Limitations like those placed on the right to appeal a decision of the Agency to the Federal Court of Appeal or on the Governor in Council’s authority under other legislation are not found in s. 40 .
The Dunsmuir framework, which applies to administrative decision makers generally and not just to administrative tribunals, applies to adjudicative decisions of the Governor in Council made under s. 40 , and the applicable standard of review is reasonableness. It is now well established that deference will usually result where a decision maker is interpreting its own statute or statutes closely connected to its function, with which it will have particular familiarity. Parliament has recognized that the Governor in Council has particular familiarity in the area of economic regulation and transportation law and policy is closely connected to the Governor in Council’s review function. The presumption of deference applies and is not rebutted. Whether a party to a confidential contract can bring a complaint under s. 120.1 is a question of law which does not fall within one of the established categories of questions to which correctness review applies. There is no issue of constitutionality or competing jurisdiction between tribunals. The question at issue is not a question of central importance to the legal system as a whole. Finally, it is an issue of statutory interpretation and could not be a true question of jurisdiction or vires of the Governor in Council.
The Governor in Council’s conclusion that a party to a confidential contract is able to bring a complaint under s. 120.1 in certain circumstances was reasonable. It is supported by the facts and the wording of s. 120.1(1). The conclusion that the existence of a confidential contract did not bar a shipper from applying for a reasonableness assessment under s. 120.1(1) is consistent with the terms of the CTA , which do not preclude the Agency from reviewing the reasonableness of a charge contained in a tariff applicable to more than one shipper, whether or not it is incorporated by reference into a confidential contract. In addition, it was open to the Governor in Council to conclude that Parliament’s intent in enacting s. 120.1 was to provide a measure of protection for shippers. Accordingly, without deciding whether in any particular case a confidential contract would preclude a shipper from relief under s. 120.1 , leaving access to the s. 120.1 complaint mechanism available to parties to confidential contracts can reasonably be said to be consistent with that intention. The Governor in Council’s interpretation of s. 120.1 was reasonable.
Cases Cited
Referred to: Attorney General of Canada v. Inuit Tapirisat of Canada, [1980] 2 S.C.R. 735; Public Mobile Inc. v. Canada (Attorney General), 2011 FCA 194, [2011] 3 F.C.R. 344; British Columbia (Attorney General) v. Canada (Attorney General), [1994] 2 S.C.R. 41; Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27; R. v. Morgentaler, [1993] 3 S.C.R. 463; Canada (Canadian Human Rights Commission) v. Canada (Attorney General), 2011 SCC 53, [2011] 3 S.C.R. 471; Placer Dome Canada Ltd. v. Ontario (Minister of Finance), 2006 SCC 20, [2006] 1 S.C.R. 715; Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190; Katz Group Canada Inc. v. Ontario (Health and Long‑Term Care), 2013 SCC 64, [2013] 3 S.C.R. 810; Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2, [2012] 1 S.C.R. 5; Smith v. Alliance Pipeline Ltd., 2011 SCC 7, [2011] 1 S.C.R. 160; Alberta (Information and Privacy Commissioner) v. Alberta Teachers’ Association, 2011 SCC 61, [2011] 3 S.C.R. 654.
Statutes and Regulations Cited
Broadcasting Act, S.C. 1991, c. 11, s. 28 .
Canada Marine Act, S.C. 1998, c. 10, ss. 52(2) , 94(3) .
Canada Oil and Gas Operations Act, R.S.C. 1985, c. O‑7, s. 51 .
Canada Transportation Act, S.C. 1996, c. 10, ss. 40 , 41 , 120.1 , 126 , 161 , 162(1) , 165(1) , (3) .
National Transportation Act, S.C. 1966-67, c. 69.
National Transportation Act, 1987, S.C. 1987, c. 34, s. 120.
Pilotage Act, R.S.C. 1985, c. P‑14, s. 35(7) .
Railway Act, S.C. 1888, c. 29, s. 11(r).
Railway Act, 1868, S.C. 1868, c. 68, s. 23.
Railway Act, 1903, S.C. 1903, c. 58.
Telecommunications Act, S.C. 1993, c. 38, s. 12 .
Authors Cited
Canada. House of Commons. Debates of the House of Commons of the Dominion of Canada, vol. LVIII, 3rd Sess., 9th Parl., March 20, 1903, pp. 248 and 259.
Canada. House of Commons. House of Commons Debates, vol. XI, 1st Sess., 27th Parl., January 10, 1967, p. 11630.
Canada. House of Commons. Standing Committee on Transport, Infrastructure and Communities. Evidence, No. 2, 2nd Sess., 39th Parl., November 22, 2007, pp. 1‑2.
Canada. House of Commons. Standing Committee on Transport, Infrastructure and Communities. Evidence, No. 3, 2nd Sess., 39th Parl., November 27, 2007, pp. 1‑2.
Canada. Parliamentary Information and Research Service. Legislative Summary LS‑569E. “Bill C‑8: An Act to Amend the Canada Transportation Act (Railway Transportation)”, by David Johansen, Law and Government Division, November 2, 2007, revised June 27, 2008.
Canada. Transport Canada. Freedom to Move: The Legislation: Overview of National Transportation Legislation 1986. Ottawa: Transport Canada, 1986.
Coyne, H. E. B. The Railway Law of Canada. Toronto: Canada Law Book Co., 1947.
Sullivan, Ruth. Sullivan on the Construction of Statutes, 5th ed. Markham, Ont.: LexisNexis, 2008.
APPEAL from a judgment of the Federal Court of Appeal (Dawson, Gauthier and Stratas JJ.A.), 2012 FCA 278, 440 N.R. 217, [2012] F.C.J. No. 1438 (QL), 2012 CarswellNat 4527, setting aside a decision of Hughes J., 2011 FC 1201, 398 F.T.R. 218, [2011] F.C.J. No. 1469 (QL), 2011 CarswellNat 4297. Appeal dismissed.
Guy J. Pratte, Nadia Effendi and Éric Harvey, for the appellant.
Peter Southey and Sean Gaudet, for the respondent the Attorney General of Canada.
Forrest C. Hume and Cynthia A. Millar, for the respondents Peace River Coal Inc. and the Canadian Industrial Transportation Association.
The judgment of the Court was delivered by
Rothstein J. —
I. Overview
[1] In The Railway Act, 1868, S.C. 1868, c. 68, the Governor in Council was given the power to approve railway freight rates in Canada. In 1903, the regulation of freight rates devolved to the Board of Railway Commissioners and the role of the Governor in Council changed to that of a reviewing body with the power to vary or rescind decisions of the Board of Railway Commissioners. Section 40 of the Canada Transportation Act, S.C. 1996, c. 10 (“CTA ”), continues this role for the Governor in Council to vary or rescind any decision or order of the Canadian Transportation Agency (“Agency”).
[2] The questions at issue in this appeal centre on whether the Governor in Council was empowered to vary or rescind a decision of the Agency on a point of law. In my respectful opinion, the Governor in Council has such authority.
II. Facts
[3] This appeal concerns a confidential contract between the Canadian National Railway Company (“CN”) and Peace River Coal Inc. (“PRC”). PRC operates a coal loading facility at Trend, British Columbia. The confidential contract, effective for the period from January 1, 2008 to June 30, 2010, was for shipping coal from Trend to Ridley Terminals in Prince Rupert, British Columbia.
[4] The confidential contract incorporated by reference all applicable tariffs, rules and regulations. In particular, it incorporated “Fuel Surcharge Tariff CN 7402 series, supplements thereto or reissues thereof”, which provided for the addition of a mileage-based fuel surcharge to the base rate CN charged for carriage of freight. The surcharge would be applied when the monthly average price of highway diesel fuel equalled or exceeded a set price called the “strike price”. Tariff 7402 set the strike price at US$1.25 per gallon. CN and PRC both understood that, during the lifetime of the contract, CN could unilaterally make changes to Tariff 7402. The contract did not provide a mechanism for PRC to challenge any change to the Tariff unilaterally made by CN.
[5] On February 21, 2008, CN advised its customers that, effective April 1, 2008, it would be introducing Tariff 7403, which provided for a strike price of US$2.30 per gallon. However, Tariff 7402 would remain in effect until the expiration of those contracts to which Tariff 7402 applied.
[6] PRC asked CN to apply Tariff 7403 to PRC’s traffic as of April 1, 2008. CN declined this request.
[7] On April 22, 2008, PRC applied to the Agency under s. 120.1 of the CTA for an order establishing a reasonable fuel surcharge to apply to PRC’s traffic. PRC requested that the Agency require CN to vary its charges in Tariff 7402 to reflect the charges in Tariff 7403; that is, that its rates for the movement of its coal from Trend to Ridley Terminals in its confidential contract could not be increased by a fuel surcharge until the strike price of US$2.30 per gallon was equalled or exceeded.
[8] On motion by CN, the Agency dismissed PRC’s application on the ground that PRC was asking the Agency to amend its confidential contract, which the Agency said it did not have the jurisdiction to do. PRC did not seek leave to appeal to the Federal Court of Appeal, despite having the option to do so pursuant to s. 41 of the CTA , which provides for a right of appeal, on leave being obtained, on a matter of law or jurisdiction brought within one month of the Agency’s decision.
[9] Six months after the Agency’s decision, the Canadian Industrial Transportation Association (“CITA”), a trade association representing the interests of shippers, filed a petition with the Governor in Council requesting a variance of the Agency’s decision pursuant to s. 40 of the CTA . PRC is a member of CITA. CITA asked the Governor in Council to direct the Agency that the confidential contract between PRC and CN does not preclude the Agency from assessing the reasonableness of the fuel surcharge in Tariff 7402. On June 10, 2010, the Governor in Council rescinded the Agency’s decision.
III. Relevant Statutory Provisions
[10] The relevant statutory provisions are contained in the Appendix. The statutory provisions most directly at issue in this appeal are ss. 40 , 41 and 120.1 of the CTA .
IV. Administrative Decisions
A. The Decision of the Agency
[11] CN brought a preliminary motion before the Agency, seeking to dismiss PRC’s application on two grounds: (1) the Agency did not have jurisdiction to amend the terms of a confidential contract under s. 120.1 of the CTA and (2) the fuel surcharge was part of the rate for the movement of traffic such that s. 120.1(7) would preclude review of the surcharge under s. 120.1 of the CTA .
[12] The Agency found that PRC was seeking to have the fuel surcharge provided for in the contract changed to reflect a different fuel surcharge.
[13] Citing certainty and predictability of contract, the Agency found that the parties were bound by the contract and that it had no jurisdiction to change the terms of a contract under s. 120.1 . The Agency did not find it necessary to go on to consider whether the fuel surcharge forms part of the rate for the movement of traffic within the meaning of s. 120.1(7). The Agency dismissed PRC’s application.
B. The Decision of the Governor in Council
[14] The Governor in Council rescinded the Agency’s decision. The Order in Council, P.C. 2010-749, stated that s. 120.1 of the CTA is a complaint-based regulatory remedy against unreasonable charges for the movement of traffic imposed by a railway company. Section 120.1 is aimed at benefiting all shippers subject to the charges in the challenged tariff rather than only benefiting the complainant. The complaint filed by PRC was for the benefit of all shippers subject to the charge contained in Tariff 7402, which applies to more than one shipper.
[15] The Order in Council stated that the Governor in Council was of the opinion that, while the existence and terms and conditions of a confidential contract are relevant to whether PRC will benefit from an order made by the Agency under s. 120.1 , the confidential contract had no bearing on the reasonableness of a charge in a tariff that applies to more than one shipper and is not a tariff referred to in s. 165(3) of the CTA .
V. Judicial History
A. Federal Court of Canada, 2011 FC 1201, 398 F.T.R. 218
[16] CN sought judicial review of the Governor in Council’s decision. Hughes J. set aside the Order of the Governor in Council and restored the Agency’s decision. Hughes J. characterized the issue before the Governor in Council as one of “pure jurisdiction” as it centred on the Agency’s jurisdiction over PRC’s application and determined that the applicable standard of review was correctness (para. 68).
[17] Hughes J. found that PRC was seeking to have the fuel surcharge in the contract changed to reflect a different fuel surcharge. He also held that Tariff 7402 was part of the “rate” for the movement of traffic and was therefore exempt from review by the Agency on the basis of s. 120.1(7). The Agency had no power to vary a contract entered into by the parties and did not have jurisdiction to review rates which are covered by the s. 120.1(7) exemption. Although the Governor in Council has the authority to determine questions of law and jurisdiction, the decision of the Governor in Council to rescind the Agency’s decision was incorrect.
B. Federal Court of Appeal, 2012 FCA 278, 440 N.R. 217
[18] The Federal Court of Appeal set aside the judgment of the Federal Court and dismissed CN’s application for judicial review of the Governor in Council’s decision.
[19] Applying a reasonableness standard, Dawson J.A. held that the decision of the Governor in Council was reasonable. She determined that “[t]he effect of the Governor in Council’s decision was to impugn the Agency’s factual determination that [PRC]’s application sought ‘an order requiring new fuel surcharge rates to apply to the confidential contract . . .’” (para. 43). The Governor in Council substituted its own view, which was that PRC’s application was for the benefit of all shippers. Dawson J.A. held that the characterization by the Governor in Council of the nature of PRC’s application to the Agency was a question of fact that carried a policy component. Accordingly, it was not necessary for the Federal Court of Appeal to consider whether the Governor in Council is a proper forum for determining questions of law and jurisdiction.
[20] Dawson J.A. concluded that the specific remedy sought, together with the fact that s. 120.1 is “‘aimed at benefiting all shippers subject to the . . . challenged tariff’ provided a basis upon which the Governor in Council could reasonably conclude that [PRC]’s application ‘was for the benefit of all shippers subject to the alleged charge’” (para. 50). She held that the Governor in Council’s decision was supported by the evidence and fell within a range of outcomes defensible in respect of the facts and law. The decision was therefore reasonable. In addition, as the Agency declined to decide whether the fuel surcharge was part of the rate for the movement of traffic within the meaning of s. 120.1(7), the Federal Court judge sitting on judicial review erred by determining this issue, which remained a live issue before the Agency. The s. 120.1(7) issue was not a proper basis for setting aside the decision of the Governor in Council. Making the judgment that the Federal Court ought to have pronounced, the Federal Court of Appeal dismissed CN’s application for judicial review.
VI. Issues
[21] This appeal raises four issues:
(1) What was the nature of the question answered by the Governor in Council in this case?
(2) What is the scope of the Governor in Council’s authority under s. 40 of the CTA ?
(3) What is the applicable standard of review?
(4) Does the Governor in Council’s decision withstand judicial review?
VII. Background to the Regulatory Scheme
A. Section 120.1 of the CTA
[22] Section 120.1 was added to the legislation following a 2001 statutory review of the CTA and as part of amendments aimed at updating the legislative framework (Parliamentary Information and Research Service, Legislative Summary LS-569E, “Bill C-8: An Act to Amend the Canada Transportation Act (Railway Transportation)”, revised June 27, 2008, at p. 1). Shippers had expressed concerns about incidental or ancillary charges, applied over and above freight rates for the movement of traffic. Examples of such charges include those imposed for cleaning cars, storing cars, weighing product and demurrage, a charge imposed for taking longer than the permitted free time to load or unload a car. Unlike rates for the movement of traffic from origin to destination, which may be challenged through final offer arbitration, shippers had limited recourse to challenge incidental or ancillary charges established unilaterally by the railway companies (Standing Committee on Transport, Infrastructure and Communities, Evidence, No. 2, 2nd Sess., 39th Parl., November 22, 2007, at p. 2).
[23] The amendments came as part of a move towards partial re-regulation in the rail sector after two decades of deregulation. Beginning with legislative reform in 1987 and continuing with further amendments in 1996, the goals of deregulation were to increase efficiency and improve service in the rail industry in Canada (Standing Committee on Transport, Infrastructure and Communities, Evidence, No. 3, 2nd Sess., 39th Parl., November 27, 2007, at pp. 1-2). Although deregulation was seen to achieve these aims, rail services were and are not provided in a perfectly competitive marketplace. In certain circumstances, the railway companies were seen to have superior market power to shippers. This superior market power of the railway companies, combined with the complaints of shippers over railway service and rates, led to Parliament’s efforts to respond to these concerns (Standing Committee on Transport, Infrastructure and Communities, November 22, 2007, at p. 1). As the Honourable Lawrence Cannon, Minister of Transport, Infrastructure and Communities explained: “I believe the time has come to rebalance the legislative framework in favour of shippers” (ibid., at p. 2).
[24] In the context of this “rebalancing” in favour of shippers, s. 120.1 was introduced to provide a new remedy for shippers who are subject to unreasonable charges or associated terms and conditions for the movement of traffic or for the provision of incidental services that are found in a tariff that applies to more than one shipper, other than a tariff resulting from a decision of an arbitrator in a final offer arbitration. It provides that, if, on complaint in writing to the Agency, the Agency finds that the charges or associated terms and conditions are unreasonable, the Agency may establish new charges or associated terms and conditions. Under s. 120.1(7), this complaint-based remedy does not apply to rates for the movement of traffic from origin to destination.
B. Confidential Contracts
[25] Under s. 126 of the CTA , carriers and shippers may enter into confidential contracts. A confidential contract may pertain to the rates to be charged by the railway company to the shipper, reductions or allowances pertaining to rates in tariffs, rebates or allowances pertaining to rates in tariffs or confidential contracts, any conditions relating to the traffic to be moved by the railway company and the manner in which the railway company shall fulfill its service obligations.
[26] Confidential contracts were introduced in 1987 amendments to railway legislation (National Transportation Act, 1987, S.C. 1987, c. 34, s. 120). Parliament provided for confidential contracts in order to promote flexibility in negotiations between railway companies and shippers for rates and services (Freedom to Move: The Legislation: Overview of National Transportation Legislation 1986 (1986), at p. 8). Confidential contracts provide an alternative to the historic requirement that a railway company could only charge a rate in respect of the movement of traffic if the rate was set out in a tariff that had been issued and published by the railway company.
[27] Where a rate is not contained in a confidential contract, typically when a confidential contract expires, a shipper dissatisfied with the rate proposed by the railway company may submit the matter to the Agency for final offer arbitration (CTA, s. 161 ). The Agency itself does not conduct the final offer arbitration. Rather, if the parties do not agree upon the arbitrator or if no arbitrator is chosen, the arbitrator will be appointed by the Agency (CTA, s. 162(1) (a)). However, a party to a confidential contract cannot submit a matter governed by the confidential contract to the Agency for final offer arbitration unless the parties consent (CTA, s. 126(2) ).
[28] As the evidence in this case established, it is common railway industry practice to include a term in confidential contracts which incorporates by reference all of the railway’s tariffs covering ancillary and incidental charges (CITA petition, at para. 27, cited in Federal Court of Appeal reasons, at para. 38).
VIII. Analysis
A. The Nature of the Question Answered by the Governor in Council
[29] The Governor in Council rescinded the Agency’s decision. PRC argues, and the Federal Court of Appeal found, that the issue before the Governor in Council was predominantly fact-based and, in addition, carried a policy component. PRC submits that the Agency mischaracterized its application as it was not in fact seeking to have the Agency amend the terms of its confidential contract. Rather, PRC alleges that a finding by the Agency that the fuel surcharge in Tariff 7402 is unreasonable could result in an order from the Agency requiring CN to vary the fuel surcharge, such that a higher strike price would apply to shippers subject to Tariff 7402, including PRC. As I understand it, PRC’s position is that, because the confidential contract states that fuel surcharges would be subject to supplements or reissuances of Tariff 7402, any variance of the fuel surcharge would be incorporated by reference into the confidential contract by reason of the issuance of a supplement to or reissuance of Tariff 7402, without constituting an amendment to the contract. Accordingly, the Agency mischaracterized PRC’s application and the Governor in Council simply disagreed with the Agency in this regard — a question of fact that it says carried a policy component in light of the purpose of s. 120.1.
[30] The Order in Council contained two key findings. First, the Governor in Council found that PRC’s complaint was for the benefit of all shippers subject to the fuel surcharge contained in Tariff 7402. Tariff 7402 applied to more than one shipper and was not a tariff referred to in s. 165(3) of the CTA (a tariff resulting from a decision of a final offer arbitrator). As these are the statutory conditions for bringing a complaint, PRC’s application met the requirements of s. 120.1 of the CTA .
[31] Second, the Governor in Council stated that while the existence of a confidential contract between a railway company and a complainant and the terms and conditions of such contract are relevant to the question of whether the complainant will benefit from any order made by the Agency under that section, a confidential contract has no bearing on the reasonableness of the charge that is found in a tariff that applies to more than one shipper.
[32] Having regard to these two findings, the Governor in Council determined that the Agency can hear a complaint brought by a party to a confidential contract under s. 120.1 . The necessary implication of the Governor in Council’s key findings is that, where an applicant meets the statutory requirements of s. 120.1(1), the Agency must consider the reasonableness of the charge, notwithstanding the existence of a confidential contract. The decision therefore held that a confidential contract is not an impediment to a shipper’s ability to bring a complaint under s. 120.1 about charges in a tariff that applies to more than one shipper. This decision was a matter of statutory interpretation.
[33] An issue of statutory interpretation is a question of law. In the present case, policy considerations that are at the heart of the complaint mechanism underlie the question of whether a party to a confidential contract can bring a complaint under s. 120.1 . These policy considerations include the market power of a railway company in some circumstances and the relatively weaker position of shippers in those circumstances. These policy considerations may be at the root of the Governor in Council’s interest in the statutory interpretation issue. However, although there may be policy considerations underlying the question at issue, that does not transform the nature of the question to one of policy or fact. The question of whether a party to a confidential contract can bring a complaint under s. 120.1 is one of law.
B. The Scope of the Governor in Council’s Authority Under Section 40 of the CTA
[34] That the Governor in Council answered a question of law in this case raises the issue of whether the Governor in Council has the authority to do so. CN argues that s. 40 of the CTA does not confer authority on the Governor in Council to determine matters of law or jurisdiction. Rather, questions of law or jurisdiction must be appealed to the Federal Court of Appeal pursuant to s. 41 of the CTA . The Governor in Council only has authority to determine questions of fact and policy. With respect, I cannot agree.
[35] For ease of reference, I produce the text of ss. 40 and 41(1) here:
40. The Governor in Council may, at any time, in the discretion of the Governor in Council, either on petition of a party or an interested person or of the Governor in Council’s own motion, vary or rescind any decision, order, rule or regulation of the Agency, whether the decision or order is made inter partes or otherwise, and whether the rule or regulation is general or limited in its scope and application, and any order that the Governor in Council may make to do so is binding on the Agency and on all parties.
41. (1) An appeal lies from the Agency to the Federal Court of Appeal on a question of law or a question of jurisdiction on leave to appeal being obtained from that Court on application made within one month after the date of the decision, order, rule or regulation being appealed from, or within any further time that a judge of that Court under special circumstances allows, and on notice to the parties and the Agency, and on hearing those of them that appear and desire to be heard.
[36] The basic rule of statutory interpretation is that “the words of an Act are to be read in their entire context, in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament”: R. Sullivan, Sullivan on the Construction of Statutes (5th ed. 2008), at p. 1, citing E. A. Driedger, The Construction of Statutes (1974), at p. 67.
[37] Section 40 does not contain any express limitations on the Governor in Council’s authority. Unlike s. 41, which places a number of restrictions on the right of appeal to the Federal Court of Appeal, s. 40 states that the Governor in Council may at any time vary or rescind any decision, order, rule or regulation of the Agency on petition of a party or an interested person, or even on the Governor in Council’s own motion. There is no language in the provision that suggests the Governor in Council’s authority is in any way circumscribed, nor is the Governor in Council’s authority restricted to answering issues of fact or policy.
[38] In Attorney General of Canada v. Inuit Tapirisat of Canada, [1980] 2 S.C.R. 735, this Court described s. 64 of the National Transportation Act, the predecessor provision to the current s. 40, as providing for an “unlimited or unconditional” right to petition the Governor in Council, a “quite different” avenue of review from the right of appeal on questions of law or jurisdiction to the Federal Court of Appeal (p. 745). Section 64 was substantially the same as the current s. 40.
[39] As Estey J. explained, “[t]here can be found in s. 64 nothing to qualify the freedom of action of the Governor in Council, or indeed any guidelines, procedural or substantive, for the exercise of its functions under subs. (1)” (p. 745). (Although Estey J.’s conclusion, at p. 759, that the trappings of procedural fairness could not be implied into the provision may not represent the current view of how natural justice operates in an administrative context, the issue of procedural fairness owed by the Governor in Council is not before this Court.) Of course, the Governor in Council is “constrained by statute” and cannot, in the course of exercising its authority under s. 40, enact or change a law of Parliament (Public Mobile Inc. v. Canada (Attorney General), 2011 FCA 194, [2011] 3 F.C.R. 344, at para. 29; see Inuit Tapirisat, at p. 752).
[40] For the purposes of this appeal, it remains the case that the only inherent limitation is that the Governor in Council is not empowered to address issues arising under the CTA ab initio: “Cabinet’s authority is restricted to matters already dealt with by the Commission, and such matters must be orders, decisions, rules or regulations . . .” (British Columbia (Attorney General) v. Canada (Attorney General), [1994] 2 S.C.R. 41, at p. 119, citing B. S. Romaniuk and H. N. Janisch, “Competition in Telecommunications: Who Polices the Transition?” (1986), 18 Ottawa L. Rev. 561, at p. 628). In this sense, the Governor in Council does not have any substantive law-making capacity by virtue of s. 40 ; however, this restriction does not mean that questions of law are excluded from the scope of the Governor in Council’s authority on review of Agency decisions.
[41] By contrast, where Parliament intended to circumscribe an avenue of review, it did so expressly. Section 41, for example, places a number of restrictions on the right to appeal a decision of the Agency to the Federal Court of Appeal: appeals under s. 41 are limited to questions of law or jurisdiction, leave to appeal must be obtained and the application for leave must be made within one month of the date of the decision, order, rule or regulation being appealed from, unless there are special circumstances which justify extending the time limit. The limitations contained in s. 41 provide strong indication that Parliament directed its attention to the issue of restrictions on the avenues of review and included intended limitations expressly.
[42] Unlike s. 40 of the CTA , Parliament has expressly limited the scope of the Governor in Council’s authority under other legislation. The Broadcasting Act, S.C. 1991, c. 11 , empowers the Governor in Council to set aside or refer back decisions made by the Canadian Radio-television and Telecommunications Commission only if the Governor in Council is “satisfied that the decision derogates from the attainment of the objectives of the broadcasting policy set out in subsection 3(1) ” of the legislation (s. 28(1) ). This kind of limitation is not found in s. 40 of the CTA . The indication is that where Parliament has intended to limit the Governor in Council’s authority, it has done so expressly.
[43] CN argues that s. 40 should be read as limiting the Governor in Council’s authority to questions of fact or policy on the basis of the legislative history of ss. 40 and 41 . CN maintains that Parliament’s intention was to leave questions of law to the courts.
[44] However, the legislative history is ambiguous. Although some of the Hansard references to which reference was made seem to indicate that Parliament’s intention was for the Governor in Council to review questions of fact and policy (Debates of the House of Commons of the Dominion of Canada, vol. LVIII, 3rd Sess. 9th Parl. (“1903 Debates”), March 20, 1903, at p. 248, per Hon. A. G. Blair, and vol. XI, 1st Sess., 27th Parl. (“1967 Debates”), January 10, 1967, at p. 11630, per Hon. J. W. Pickersgill), the Hansard also contains ministerial statements suggesting that the Governor in Council’s power was intended to be untrammelled (1903 Debates, March 20, 1903, at p. 259, per Hon. A. G. Blair).
[45] The 1967 Debates include a statement by the Minister of Transport that the legislation provided for “an appeal on questions of fact to the governor in council” (January 10, 1967, at p. 11630). Although this correctly states the Governor in Council’s legislative authority to determine questions of fact, this statement does not provide evidence of Parliament’s intention to limit the Governor in Council’s authority to reviewing questions of fact alone. In addition, although he was Minister of Transport at the time of the 1967 enactment of the National Transportation Act, S.C. 1966-67, c. 69, Mr. Pickersgill’s interpretation of earlier enactments by other parliaments do not provide evidence of the intent of the legislature at the time of the earlier enactments. As such, the Hansard evidence does not establish an unambiguous parliamentary intention to limit the authority of the Governor in Council.
[46] In my view, the Hansard evidence does confirm that Parliament intended to prevent questions of fact from being appealed to the Federal Court of Appeal. This does not, without more, demonstrate that the Governor in Council’s role was intended to be limited to review of questions of fact or policy alone.
[47] This Court has observed that, while Hansard evidence is admitted as relevant to the background and purpose of the legislation, courts must remain mindful of the limited reliability and weight of such evidence (Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, at para. 35; R. v. Morgentaler, [1993] 3 S.C.R. 463, at p. 484; Sullivan, at pp. 608-14). Hansard references may be relied on as evidence of the background and purpose of the legislation or, in some cases, as direct evidence of purpose (Canada (Canadian Human Rights Commission) v. Canada (Attorney General), 2011 SCC 53, [2011] 3 S.C.R. 471, at para. 44, per LeBel and Cromwell JJ.). Here, Hansard is advanced as evidence of legislative intent. However, such references will not be helpful in interpreting the words of a legislative provision where the references are themselves ambiguous (Placer Dome Canada Ltd. v. Ontario (Minister of Finance), 2006 SCC 20, [2006] 1 S.C.R. 715, at para. 39, per LeBel J.). Accordingly, the evidence relied on by CN in this case does not support the argument that an implied restriction to questions of fact and policy should be read into the otherwise broad and unrestricted language in s. 40 .
[48] CN submits that it is rare for the Governor in Council to vary or rescind an administrative decision on a question of law. I accept that it is unusual for the Governor in Council to determine a question of law and agree that the Governor in Council is generally concerned with issues of policy and fact. Although it is rare for the Governor in Council to determine a question of law, this does not mean that the Governor in Council has no authority under the statute to do so. Indeed, parties may prefer to comply with the requirements of s. 41 and seek leave to appeal to the Federal Court of Appeal, where a traditional full hearing on the matter will be carried out. Although these may be practical or strategic considerations, they do not alter the fact that the legislation does not restrict the Governor in Council from determining a question of law.
[49] Accordingly, petitions to the Governor in Council are not restricted to issues of fact or policy. The Governor in Council has the authority to answer legal question