2022 QCCA 408, 2022 QCCA 408

Unofficial English Translation of the Judgment of the Court Bell Canada c. Directeur des poursuites criminelles et pénales (Office de la protection du consommateur) 2022 QCCA 408 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL Nos.: 500-10-007390-204 , 500-10-007391-202, 500-10-007403-205, 500-10-007404-203 (500-36-009305-197, 500-36-009307-193) DATE: March 24, 2022 CORAM : THE HONOURABLE MARIE-FRANCE BICH, J.A. MARTIN VAUCLAIR, J.A. CHRISTINE BAUDOUIN, J.A. No.: 500-10-007390-204 (500-36-009305-197) BELL CANADA APPELLANT – Respondent / Defendant v.

DIRECTOR OF CRIMINAL AND PENAL PROSECUTIONS (OFFICE DE LA PROTECTION DU CONSOMMATEUR) RESPONDENT – Appellant / Prosecutor and Attorney General of Quebec RESPONDENT – Appellant No.: 500-10-007391-202 (500-36-009307-193) TELUS COMMUNICATIONS INC. APPELLANT– Respondent / Defendant v.

DIRECTOR OF CRIMINAL AND PENAL PROSECUTIONS (OFFICE DE LA PROTECTION DU CONSOMMATEUR) RESPONDENT – Appellant / Prosecutor ATTORNEY GENERAL OF QUEBEC RESPONDENT – Appellant No.: 500-10-007403-205 (500-36-009307-193) ATTORNEY GENERAL OF QUEBEC APPELLANT – Appellant and DIRECTOR OF CRIMINAL AND PENAL PROSECUTIONS (OFFICE DE LA PROTECTION DU CONSOMMATEUR) APPELLANT – Appellant / Prosecutor v.

TELUS COMMUNICATIONS INC. RESPONDENT – Respondent / Defendant No.: 500-10-007404-203 (500-36-009305-197) ATTORNEY GENERAL OF QUEBEC APPELLANT – Appellant and DIRECTOR OF CRIMINAL AND PENAL PROSECUTIONS (OFFICE DE LA PROTECTION DU CONSOMMATEUR) APPELLANT – Appellant / Prosecutor v.

BELL CANADA RESPONDENT – Respondent / Defendant JUDGMENT [ 1 ] The appellants are appealing from a judgment rendered on June 11, 2020, by the Superior Court of the District of Montreal (the Honourable Chantal Corriveau), which set aside in part two judgments of the Court of Québec, Criminal and Penal Division (the Honourable Yvan Poulin), declared ss. 11.2 , 11.3 , 13 and 214.2 of the Consumer Protection Act to be constitutionally valid, applicable, and operative with respect to the appellants, but declared ss. 214.7 and 214.8 to be valid but inapplicable to them in some respects, and referred the file back to the Court of Québec [ translation] “for a hearing with respect to the offences charged under the Consumer Protection Act ” . [ 2 ] For the reasons of Baudouin, J.A., Bich and Vauclair, JJ.A. concurring, THE COURT : [ 3 ] DISMISSES the appeals in files 500-10-007390-204 and 500-10-007391-202, with legal costs against the appellants at every level; [ 4 ] ALLOWS , without costs, the appeals in files 500-10-007403-205 and 500-10-007404-203, for the sole purpose of EXPUNGING the conclusions in paragraphs [180] and [186] of the judgment a quo . [ 5 ] AMENDS paragraphs [179] and [185] of the conclusions of the judgment a quo to read: [179] DECLARES that ss. 11.2 , 11.3 , 13 , 214.2 and 214.7 of the Consumer Protection Act are constitutional and apply to the Respondent-Defendant Telus Communications Inc.; [185] DECLARES that s. 214.8 of the Consumer Protection Act is constitutionally valid, applicable, and operative with respect to the Respondent-Defendant Bell Canada.

MARIE-FRANCE BICH, J.A. MARTIN VAUCLAIR, J.A. CHRISTINE BAUDOUIN, J.A. Mtre Vincent De L’Étoile LANGLOIS LAWYERS Mtre Mélissa Beaudry BCE Mtre Mathieu Quenneville PRÉVOST FORTIN D’AOUST For Bell Canada

Mtre Yves Martineau STIKEMAN ELLIOTT Mtre Mathieu Quenneville PRÉVOST FORTIN D’AOUST For Telus Communications Inc. Mtre Simon Lavoie DIRECTOR OF CRIMINAL AND PENAL PROSECUTIONS For the Director of Criminal and Penal Prosecutions (Office de la protection du consommateur) Mtre Charles Gravel BERNARD, ROY (JUSTICE-QUÉBEC) For the Attorney General of Quebec Date of hearing: November 1, 2021 REASONS OF BAUDOUIN, J.A. [ 6 ] The constitutional validity of a series of provisions of the Consumer Protection Act [1] (“ CPA ”) enacted by the National Assembly in 2009 is at the heart of this appeal.

Generally, these provisions aim to regulate and control the content of contracts entered into between a merchant and a consumer, more specifically contracts for the sequential performance of services provided at a distance. *** [ 7 ] The appellants, Telus Communications Inc. (“Telus”) and Bell Canada (“Bell”), are two interprovincial telecommunications carriers under Parliament’s jurisdiction. [2] In the course of their business, they regularly enter into various agreements with consumers for the provision of wired or wireless telephone, television, or Internet services. [ 8 ] Following an investigation by the Office de la protection du consommateur (“OPC”), the Director of Criminal and Penal Prosecutions (“DCPP”) filed 364 charges against Telus and 2 charges against Bell.

Telus was charged with violating ss. 11.2 , 11.3 , 13 . 214.2 and 214.7 CPA between November 2012 and May 2013, and Bell was charged with violating s. 214.8 CPA , on or about February 16, 2015. [ 9 ] From the outset of the hearing of the complaints before the Court of Québec, the appellants argued the unconstitutionality of all these legislative provisions.

They challenge the validity , applicability , and operability of the provisions, arguing that they are ultra vires provincial jurisdiction, intrude on the core federal power over telecommunications, and frustrate the purpose of the Telecommunications Act [3] ( TA or the Act ). [ 10 ] The Honourable Yvan Poulin, J.C.Q. agreed, relying exclusively on the doctrines of interjurisdictional immunity and federal paramountcy, from the perspective of the federal power over telecommunications. [4] He declared the provisions in dispute inapplicable to the appellants and inoperative against them, but he did not rule on the essential and preliminary issue of their pith and substance or their connection to a constitutional power. [ 11 ] The DCPP and the Attorney General of Quebec (“AGQ”) appealed these decisions under art. 268 of the Code of Penal Procedure .

In a judgment rendered on June 11, 2020, the Superior Court of the District of Montreal (the Honourable Chantal Corriveau) allowed the appeal in part. [5] That judgment declared the impugned provisions intra vires Quebec’s jurisdiction, and applicable and enforceable against the appellants, except for ss. 214.7 and 214.8 CPA , which were declared inoperative for the period following the CRTC’s adoption in 2013 of the Wireless Code , which henceforth regulated the terms and conditions ( Wireless Code or Code ). [ 12 ] The Superior Court judgment gave rise to the four separate appeals, which are now before the Court.

Telus and Bell [6] ask that the Superior Court judgment be set aside, the Court of Québec judgment be upheld, and the impugned provisions declared ultra vires , or alternatively, declared inapplicable or inoperative against them.

The DCPP and the AGQ ask that the conclusions in the Superior Court judgment on the inoperability of ss. 214.7 and 214.8 CPA be set aside on the ground that they are extraneous to the issues in dispute and go beyond what was sought. [7] Telus and Bell agree with the position of the respondents on this question. [ 13 ] For the reasons that follow, the appeals of Telus and Bell are dismissed, and the appeals of the DCPP and the AGQ are allowed.

THE LEGISLATIVE CONTEXT [ 14 ] The enactment of the impugned provisions was part of a long modernization process of the CPA undertaken by the Quebec legislature in 2006 in the wake of Téléphone Guèvremont . [8] In that judgment, the Supreme Court ruled that a telecommunications undertaking that provided interprovincial and international signal carrier service was within Parliament’s jurisdiction, even if its physical equipment was strictly local. That decision led to the abolition of the Régie des télécommunications du Québec in 1997 and to

amendments of the related CPA provisions. The Minister of Justice at the time remained of the view, however, that despite the abolition of the Régie des télécommunications, these telecommunications carriers were nevertheless still subject to the CPA . [9] [ 15 ] Following consultations by the OPC, certain issues with telephone service contracts, the unilateral amendment of contracts, and extended warranties and gift cards were identified as requiring a stricter legislative framework. Accordingly, the CPA was amended by Bill 60, first by the addition of general provisions that apply indiscriminately to all types of contracts and concern: (

i) the conditions to amend a contract (s. 11.2), (ii) the scope of clauses that allow merchants to unilaterally cancel the contract (ss. 11.3 and 11.4), and (iii) the limits of penalty clauses (s. 13). [10] [ 16 ] These provisions are worded as follows:

11.2. Any stipulation under which a merchant may amend a contract unilaterally is prohibited unless the stipulation also (

a) specifies the elements of the contract that may be amended unilaterally; (

b) provides that the merchant must send to the consumer, at least 30 days before the amendment comes into force, a written notice drawn up clearly and legibly, setting out the new clause only, or the amended clause and the clause as it read formerly, the date of the coming into force of the amendment and the rights of the consumer set forth in subparagraph c; and (

c) provides that the consumer may refuse the amendment and rescind or, in the case of a contract involving sequential performance, cancel the contract without cost, penalty or cancellation indemnity by sending the merchant a notice to that effect no later than 30 days after the amendment comes into force, if the amendment entails an increase in the consumer’s obligations or a reduction in the merchant’s obligations.

However, except in the case of an indeterminate- term service contract, such a stipulation is prohibited if it applies to an essential element of the contract, particularly the nature of the goods or services that are the object of the contract, the price of the goods or services or, if applicable, the term of the contract. Any amendment of a contract in contravention of this

section cannot be invoked against the consumer. This

section does not apply to the amendment of a contract extending variable credit as provided for in

section 129. 11.2. Est interdite la stipulation prévoyant que le commerçant peut unilatéralement modifier le contrat à moins que cette stipulation ne prévoie également:

a) les éléments du contrat pouvant faire l’objet d’une modification unilatérale;

b) que le commerçant doit, au moins 30 jours avant l’entrée en vigueur de la modification, transmettre au consommateur un avis écrit, rédigé clairement et lisiblement, contenant exclusivement la nouvelle clause ou la clause modifiée ainsi que la version antérieure, la date d’entrée en vigueur de la modification et les droits du consommateur énoncés au paragraphe c;

c) que le consommateur pourra refuser cette modification et résoudre ou, s’il s’agit d’un contrat à exécution successive, résilier le contrat sans frais, pénalité ou indemnité de résiliation, en transmettant un avis à cet effet au commerçant au plus tard 30 jours suivant l’entrée en vigueur de la modification, si la modification entraîne l’augmentation de son obligation ou la réduction de l’obligation du commerçant.

Toutefois, à moins qu’il ne s’agisse d’un contrat de service à durée indéterminée, une telle stipulation est interdite à l’égard d’un élément essentiel du contrat, notamment la nature du bien ou du service faisant l’objet du contrat, le prix de ce bien ou de ce service et, le cas échéant, la durée du contrat. La modification d’un contrat faite en contravention des dispositions du présent

article est inopposable au consommateur. Le présent

article ne s’applique pas à une modification d’un contrat de crédit variable visée à l’article 129.

11.3. Any stipulation under which the merchant may unilaterally cancel a fixed-term service contract involving sequential performance is prohibited, except under articles 1604 and 2126 of the Civil Code and, in the latter case, only in accordance with

article 2129 of the Code. A merchant who intends to cancel an indeterminate-term service contract involving sequential performance must notify the consumer in writing at least 60 days before the date of cancellation if the consumer has not defaulted on his obligation. 11.3 . Est interdite la stipulation qui réserve à un commerçant le droit de résilier unilatéralement un contrat de service à exécution successive à durée déterminée, sauf en application des articles 1604 et 2126 du Code civil et, dans ce dernier cas, que conformément à l’article 2129 de ce code.

Un commerçant qui prévoit résilier un contrat de service à exécution successive à durée indéterminée doit, si le consommateur n’est pas en défaut d’exécuter son obligation, lui transmettre un avis écrit, au moins 60 jours avant la date de la résiliation. 13. Any stipulation requiring the consumer, upon the non-performance of his obligation, to pay a stipulated fixed amount or percentage of charges, penalties or damages, other than the interest accrued, is prohibited.

The prohibition under the first paragraph does not apply to contracts of sale or long-term contracts of lease of automobiles, except with respect to charges and subject to the conditions set out in the regulation. This

section does not apply to a contract of credit. 13 . Est interdite la stipulation qui impose au consommateur, dans le cas de l’inexécution de son obligation, le paiement de frais, de pénalités ou de dommages, dont le montant ou le pourcentage est fixé à l’avance dans le contrat, autres que l’intérêt couru . L’interdiction prévue au premier alinéa ne s’applique pas, sauf à l’égard des frais et sous réserve des conditions prévues au règlement, au contrat de vente ou de louage à long terme d’une automobile. Le présent

article ne s’applique pas à un contrat de crédit. [ 17 ] Next, specific provisions were enacted under a new division in the Act entitled “ Contracts involving sequential performance for a service provided at a distance ”. These provisions concern the information to be included in such a contract (s. 214.2 CPA ) and the indemnity a merchant can claim from a consumer who unilaterally cancels a contract (ss. 214.7 and 214.8 CPA ): 214.1. This division applies to contracts involving sequential performance for a service provided at a distance. However, it does not apply to contracts governed by Division VI, even if entered into by a person listed in

section 188. 214.2 . The contract must be evidenced in writing and include (

a) the name and address of the consumer and the merchant; (

b) the merchant’s telephone number and, if 214.1. La présente

section s’applique au contrat à exécution successive de service fourni à distance. Toutefois, elle ne s’applique pas au contrat de service à exécution successive visé à la

section VI du présent chapitre, même lorsque ce dernier est conclu par une des personnes énumérées à l’article 188. 214.2. Le contrat doit être constaté par écrit et indiquer:

a) le nom et l’adresse du consommateur et ceux du commerçant;

b) le numéro de téléphone ainsi que, le cas échéant, l’adresse technologique du commerçant;

available, the merchant’s technological address; (

c) the place and date of the contract; (

d) a detailed description of the service or of each of the services to be provided under the contract; (

e) the monthly rate for each of the services to be provided under the contract, including the monthly rate for any optional services, or the monthly cost if the rate is calculated on a basis other than a monthly basis; (

f) the monthly rate for each of the associated costs or the monthly cost if the rate is calculated on a basis other than a monthly basis; (

g) the total amount the consumer must pay each month under the contract; (

h) any restrictions on the use of the service or services as well as the geographical limits within which they may be used; (

i) the description of any goods sold or offered as a premium on the purchase of the service or services, specifying whether they are reconditioned, and their regular price; (

j) the description of any service offered as a premium; (

k) if applicable, the nature of the economic inducements given by the merchant in consideration of the contract, including such premiums as a rebate on the price charged for goods or services purchased or leased on the making of the contract; (

l) the total value of any economic inducements prescribed by regulation to be used to calculate the cancellation indemnity that may be charged to the consumer under

section 214.7 ;

c) le lieu et la date du contrat;

d) la description détaillée de chacun des services faisant l’objet du contrat;

e) le tarif mensuel de chacun des services faisant l’objet du contrat, y compris le tarif mensuel des services optionnels, ou son coût mensuel si le tarif est calculé sur une base autre que mensuelle;

f) le tarif mensuel de chacun des frais connexes ou son coût mensuel si le tarif est calculé sur une base autre que mensuelle;

g) le total des sommes que le consommateur doit débourser mensuellement en vertu du contrat;

h) le cas échéant, les restrictions d’utilisation de chacun des services faisant l’objet du contrat ainsi que les limites géographiques à l’intérieur desquelles ces services peuvent être utilisés;

i) le cas échéant, la description et le prix courant du bien vendu ou offert en prime à l’achat du service; la description du bien doit préciser s’il s’agit d’un bien remis à neuf;

j) le cas échéant, la description du service offert en prime;

k) le cas échéant, la nature des bénéfices économiques consentis par le commerçant en considération du contrat, notamment la prime, dont la remise partielle sur le prix de vente ou de location d’un bien ou d’un service acheté ou loué à l’occasion de la conclusion du contrat;

l) le cas échéant, le montant total des bénéfices économiques déterminés au règlement devant servir au calcul de l’indemnité de résiliation qui pourra être exigée du consommateur en vertu de l’

article 214.7 ;

(

m) a statement that only the value of the economic inducements referred to in subparagraph l will be used to calculate the cancellation indemnity charged to the consumer; (

n) the manner of easily obtaining information on the rate for services that are not provided under the contract, and the rate for services that are subject to restrictions or geographical limits as mentioned in subparagraph h ; (

o) the term and expiry date of the contract; (

p) without limiting the scope of

section 214.6 , the circumstances allowing the consumer to rescind, cancel or amend the contract and the related terms and costs or indemnity, if any; and (

q) the formalities that must be fulfilled by the consumer to terminate the contract upon its expiry. This information must be presented in the manner prescribed by regulation. 214.6. The consumer may, at any time and at the consumer’s discretion, cancel the contract by sending a notice to the merchant. The cancellation takes effect by operation of law on the sending of the notice or the date specified in the notice.

The total of the charges the merchant may then claim from the consumer, other than the price of the services provided to the consumer calculated at the rate provided in the contract, constitutes the contract cancellation indemnity. For the purposes of this paragraph, a service contract or a contract for the lease of goods concluded on the making of or in consideration of the service contract forms a whole with that contract.

m) la mention que seuls les bénéfices économiques prévus au paragraphe l serviront au calcul de l’indemnité de résiliation qui pourra être exigée du consommateur;

n) la manière d’obtenir aisément les renseignements relatifs au tarif d’utilisation des services qui ne font pas l’objet du contrat et des services qui sont utilisés au- delà des restrictions et des limites prévues au paragraphe h ;

o) la durée et la date d’expiration du contrat;

p) sans restreindre la portée de l’

article 214.6 , les circonstances permettant au consommateur de résoudre, de résilier ou de modifier le contrat ainsi que, le cas échéant, les conditions et les frais ou l’indemnité de résolution, de résiliation ou de modification;

q) les conditions que le consommateur doit respecter pour mettre fin au contrat à son échéance. Ces renseignements doivent être présentés de la manière prévue au règlement. 214.6. Le consommateur peut, à tout moment et à sa discrétion, résilier le contrat en transmettant un avis au commerçant. Cette résiliation de plein droit prend effet à compter de la transmission de cet avis ou à la date indiquée à cet avis par le consommateur.

Toutes les sommes que le commerçant peut alors réclamer du consommateur, autres que le prix des services qui lui ont été fournis, calculé au tarif prévu au contrat, constituent l’indemnité de résiliation. À cette fin, le contrat de service ou de location d’un bien conclu à l’occasion ou en considération du contrat de service forme un tout avec ce dernier.

214.7 . If the consumer unilaterally cancels a fixed-term contract in consideration of which one or more economic inducements were given to him by the merchant, the cancellation indemnity may not exceed the value of the economic inducements determined by regulation that were given to him. The indemnity decreases as prescribed by regulation. When no economic inducement determined by regulation was given to the consumer, the maximum indemnity the merchant may charge is the lesser of $50 and an amount representing not more than 10% of the price of the services provided for in the contract that were not supplied. 214.7.

En cas de résiliation unilatérale par le consommateur d’un contrat à durée déterminée en considération duquel un bénéfice économique lui a été consenti par le commerçant, l’indemnité de résiliation qui peut être exigée du consommateur ne peut excéder le montant des bénéfices économiques déterminés par règlement qui lui ont été consentis en considération de ce contrat. Le montant de cette indemnité décroît selon les modalités prévues au règlement.

Lorsqu’aucun bénéfice économique déterminé par règlement n’a été consenti au consommateur, l’indemnité maximale que peut exiger le commerçant correspond à la moindre des sommes suivantes: 50 $ ou une somme représentant au plus 10% du prix des services prévus au contrat qui n’ont pas été fournis. 214.8 .

If the consumer unilaterally cancels an indeterminate-term contract, no cancellation indemnity may be claimed from the consumer unless the merchant gave the consumer a rebate on all or part of the sales price of the goods purchased in consideration of the service contract and entitlement to the rebate is acquired progressively according to the cost of the services used or the time elapsed. In such a case, the cancellation indemnity may not exceed the amount of the unpaid balance of the sales price of the goods at the time the contract was made. The indemnity decreases as prescribed by regulation. 214.8.

En cas de résiliation unilatérale par le consommateur d’un contrat à durée indéterminée, aucune indemnité de résiliation ne peut lui être réclamée, à moins que le commerçant ne lui ait consenti une remise partielle ou totale du prix de vente d’un bien acheté en considération du contrat de service et que le bénéfice de cette remise s’acquiert progressivement en fonction du coût des services utilisés ou en fonction du temps écoulé. L’indemnité ne peut alors excéder le montant du solde du prix de vente du bien au moment de la conclusion du contrat.

Le montant de cette indemnité décroît selon les modalités prévues au règlement. [ 18 ] Furthermore, in addition to the legislative provisions in the CPA that are the subject of this constitutional challenge, the appeals also involve the TA , because Telus and Bell argue that the impugned provisions intrude upon the very essence of the TA and frustrate its purpose.

Section 7 of the TA sets out the statute’s main principles and orientations. It is worthwhile reproducing certain excerpts from that section:

7 It is hereby affirmed that telecommunications performs an essential role in the maintenance of Canada’s identity and sovereignty and that the Canadian telecommunications policy has as its objectives (

a) to facilitate the orderly development throughout Canada of a telecommunications system that serves to safeguard, enrich and strengthen the social and economic fabric of Canada and its regions; (

b) to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada; (

c) to enhance the efficiency and competitiveness, at the national and international levels, of Canadian telecommunications; … (

f) to foster increased reliance on market forces for the provision of telecommunications services and to ensure that regulation, where required, is efficient and effective; (

g) to stimulate research and development in Canada in the field of telecommunications and to encourage innovation in the provision of telecommunications services; (

h) to respond to the economic and social requirements of users of telecommunications services; and 7 La présente loi affirme le caractère essentiel des télécommunications pour l’identité et la souveraineté canadiennes; la politique canadienne de télécommunication vise à :

a) favoriser le développement ordonné des télécommunications partout au Canada en un système qui contribue à sauvegarder, enrichir et renforcer la structure sociale et économique du Canada et de ses régions;

b) permettre l’accès aux Canadiens dans toutes les régions — rurales ou urbaines — du Canada à des services de télécommunication sûrs, abordables et de qualité;

c) accroître l’efficacité et la compétitivité, sur les plans national et international, des télécommunications canadiennes; …

f) favoriser le libre jeu du marché en ce qui concerne la fourniture de services de télécommunication et assurer l’efficacité de la réglementation, dans le cas où celle- ci est nécessaire;

g) stimuler la recherche et le développement au Canada dans le domaine des télécommunications ainsi que l’innovation en ce qui touche la fourniture de services dans ce domaine;

h) satisfaire les exigences économiques et sociales des usagers des services de télécommunication; [ 19 ]

Section 47 of the TA gives the CRTC the mandate to implement these principles and, to that end, grants it a wide range of powers and duties that it must exercise in a manner that achieves the objectives set out by Parliament. The CRTC must also comply with the Order Issuing a Direction to the CRTC on Implementing the Canadian Telecommunications Policy Objectives . [11]

Section 1(

a) of the Direction requires that the CRTC rely on market forces to achieve its objectives. [ 20 ] Similarly, the TA attributes several powers and duties to the CRTC, among them the power to regulate the rates and conditions of service for telecommunications services:

24. The offering and provision of any telecommunications service by a Canadian carrier are subject to any conditions imposed by the Commission or included in a tariff approved by the Commission. 25.

(1) No Canadian carrier shall provide a telecommunications service except in accordance with a tariff filed with and approved by the Commission that specifies the rate or the maximum or minimum rate, or both, to be charged for the service. … 27.

(1) Every rate charged by a Canadian carrier for a telecommunications service shall be just and reasonable. 24. L’offre et la fourniture des services de télécommunication par l’entreprise canadienne sont assujetties aux conditions fixées par le Conseil ou contenues dans une tarification approuvée par celui-ci. 25 .

(1) L’entreprise canadienne doit fournir les services de télécommunication en conformité avec la tarification déposée auprès du Conseil et approuvée par celui- ci fixant — notamment sous forme de maximum, de minimum ou des deux — les tarifs à imposer ou à percevoir. … 27.

(1) Tous les tarifs doivent être justes et raisonnables. [ 21 ] Last, s. 34 TA creates a regime of forbearance whereby the CRTC may or even must make a determination to refrain from the exercise of certain powers conferred upon it by the Act , including the power to regulate rates and conditions of service for telecommunications services in certain circumstances. The determination rests essentially on whether the CRTC considers the Canadian telecommunications market sufficiently competitive.

Section 34 is drafted as follows:

(1) The Commission may make a determination to refrain, in whole or in part and conditionally or unconditionally, from the exercise of any power or the performance of any duty under sections 24, 25, 27, 29 and 31 in relation to a telecommunications service or class of services provided by a Canadian carrier, where the Commission finds as a question of fact that to refrain would be consistent with the Canadian telecommunications policy objectives.

(2) Where the Commission finds as a question of fact that a telecommunications service or class of services provided by a Canadian carrier is or will be subject to competition sufficient to protect the interests of users, the Commission shall make a determination to refrain, to the extent that it considers appropriate, conditionally or unconditionally, from the exercise of any power or the performance of any duty under sections 24, 25, 27, 29 and 31 in relation to the service or class of services.

(3) The Commission shall not make a determination to refrain under this

section in relation to a telecommunications service or class of services if the Commission finds as a question of fact that to refrain would be likely to impair unduly the establishment or continuance of a competitive market for that service or class of services.

(4) The Commission shall declare that sections 24, 25, 27, 29 and 31 do not apply to a Canadian carrier to the extent that those sections are inconsistent with a determination of the Commission under this section. 34

(1) L e Conseil peut s’abstenir d’exercer — en tout ou en

partie et aux conditions qu’il fixe — les pouvoirs et fonctions que lui confèrent normalement les articles 24, 25, 27, 29 et 31 à l’égard des services — ou catégories de services — de télécommunication fournis par les entreprises canadiennes dans les cas où il conclut, comme question de fait, que son abstention serait compatible avec la mise en œuvre de la politique canadienne de télécommunication.

(2) S’il conclut, comme question de fait, que le cadre de la fourniture par les entreprises canadiennes des services — ou catégories de services — de télécommunication est suffisamment concurrentiel pour protéger les intérêts des usagers — ou le sera —, le Conseil doit s’abstenir, dans la mesure qu’il estime indiquée et aux conditions qu’il fixe, d’exercer les pouvoirs et fonctions que lui confèrent normalement les articles 24, 25, 27, 29 et 31 à l’égard des services ou catégories de services en question.

(3) Le Conseil ne peut toutefois s’abstenir, conformément au présent article, d’exercer ses pouvoirs et fonctions à l’égard des services ou catégories de services en question s’il conclut, comme question de fait, que cela aurait vraisemblablement pour effet de compromettre indûment la création ou le maintien d’un marché concurrentiel pour leur fourniture.

(4) Le Conseil doit déclarer que les articles 24, 25, 27, 29 et 31 ne s’appliquent pas aux entreprises canadiennes dans la mesure où ils sont incompatibles avec toute décision prise par lui au

titre du présent article. [ 22 ] In 2013, the CRTC stopped refraining in this area and adopted the Wireless Code , which thereafter governed certain relationships between telecommunications companies and consumers with the aim of protecting consumers.

For example, it contains provisions relating to plain language and information that must be included in contracts, a prohibition on unilateral changes by the service provider to key contract terms and conditions, or the calculation of early cancellation fees that may be charged to consumers, which vary based on whether the term of the contract is fixed or indeterminate. However, this Code was adopted after the offences alleged against Telus and Bell . When the OPC filed the statements of offence underlying this dispute, none of the rules in the CRTC’s Code was in force.

THE JUDGMENT A QUO [ 23 ] The Superior Court had before it an appeal from a judgment of the Court of Québec.

After an overview of the circumstances, the trial judge’s reasons, and the standard of intervention to which it was held, the Superior Court concluded that the trial judge had erred in law, which led it to intervene and perform a de novo analysis to determine whether the impugned provisions were constitutionally valid. [ 24 ] The Superior Court judge was of the view that the Court of Québec judge erred in law in analyzing the division of powers without first determining [ translation ] “the purpose of the impugned provisions, which undoubtedly colours his conclusions”. [12] According to the Superior Court judge, the Court of Québec could not find the impugned provisions inapplicable and inoperative on the basis of the doctrines of interjurisdictional immunity and federal paramountcy without first analyzing their pith and substance, not under the TA , but under the CPA , and then determining their constitutionality.

[ 25 ] The Superior Court judge then conducted her own analysis of the pith and substance of the impugned provisions. She reviewed the provisions in turn and identified their respective purposes and effects, relying on the parliamentary debates surrounding their enactment.

She acknowledged, as indeed the appellants noted at the hearing, that ss. 214.7 and 214.8 C.P.A. [ translation ] “were enacted to cover contracts for cellular telephone, Internet, or cable service, satellite television service, or remote surveillance, where several abuses have been observed”, and that the [ translation ] “ legislator intervened to improve regulation of these types of contracts”. [13] [ 26 ] That exercise nevertheless led her to conclude that the pith and substance of the impugned provisions is [ translation ] “primarily concerned with regulating the legal relationship between the consumer and the merchant in the context of new technologies such as contracts for cellular and residential telephones, cable television, Internet access ...” . [14] She was therefore of the view that they were intra vires the province’s power under s. 92(10) CA 1867 – intra-provincial trade – and s. 92(13) CA 1867 – property and civil rights – and s. 92(16) CA 1867 – matters of a merely local nature . [15] Moreover, she found that the validity of the CPA provisions was not based on the double aspect doctrine, because their dominant purpose is to [ translation ] “regulate the legal relationship between a consumer and a merchant essentially in the context of contracts involving the sequential performance of a service provided at a distance”. [16] [ 27 ] The judge then examined in turn the doctrines of interjurisdictional immunity and federal paramountcy and provided a complete picture of their respective scope and application, as developed by the Supreme Court in several leading cases on this subject. [17] [ 28 ] Turning to the first doctrine, after analyzing the content of the federal competence over telecommunications and determining that the rates and terms of services provided by a federal undertaking form part of the vital and essential element of this competence, the judge found that the impugned provisions impact [ translation ] “either the operability of services provided [by Telus and Bell] or the fees paid by consumers” and that [ translation ] “[t]hey thus trench on the core of the federal telecommunications power”. [18] She was nevertheless of the view that Telus and Bell had not established that these provisions impaired their activities, operating model or [ translation ] “the exercise of the federal power to ensure the orderly development of telecommunications in Canada or the ability of federal undertakings to provide “reliable and affordable telecommunications services of high quality”” [19] within the meaning of s. 7 of the TA .

She also added that the potential economic impact of such provisions does not constitute “impairment” as defined by the case law. [20] As a result, the impugned provisions apply to Telus and Bell. [ 29 ] As for the second doctrine, that is, the doctrine of federal paramountcy, the judge was of the view that in this case there existed no conflict between the TA and the validly enacted provisions of the CPA , at least not with respect to the period the CRTC, through s. 34 TA , opted to refrain from regulating the rates and terms and conditions of service offered by telecommunications companies in the matters concerned.

At the outset, those rates and services were subject to market rules, and therefore to the rules otherwise existing in Quebec in the Civil Code and the CPA. [ 30 ] She came to the following conclusion: [ translation ] [155] In conclusion, the Court finds that the respondents have failed to establish that it is impossible to comply with both enactments or that the provincial legislation frustrates the federal purpose, and therefore the doctrine of federal paramountcy does not apply.

Accordingly, the impugned provisions remained operative in respect of the respondents at the material time. [ 31 ] The judge ended her analysis of the federal paramountcy doctrine by ruling that, for the period following the adoption of the Wireless Code , which is equivalent to a federal regulation, there was an operational conflict with ss. 214.7 and 214.8 CPA , and that, however minor it may be, the conflict rendered those provisions inoperative for the future with respect to Telus and Bell.

This conclusion is the subject of separate appeals filed by the DCPP and the AGQ. [ 32 ] Before the Court, Telus framed the issues in dispute as follows: • Did the appeal judge err in law in determining the pith and substance of the provisions and in finding them constitutionally valid? • Did the appeal judge err in law in the application of the doctrine of federal paramountcy of federal legislation in finding the provisions constitutionally operative? • Did the appeal judge err in law in finding the provisions constitutionally applicable because there was no impairment? [ 33 ] Before answering these questions, a short review of the constitutional principles governing the division of powers is in order.

ANALYSIS Constitutional analysis The division of powers: pith and substance [ 34 ] The guidelines and principles for determining the constitutional validity of a legislative provision based on the division of powers have been well established in the case law, principally in the Supreme Court’s decision in Canadian Western Bank . [21] The first step consists in an analysis of the pith and substance of the provision at issue by identifying the raw material, the dominant purpose, the true or essential character underlying the impugned provisions.

The analysis must focus on both the purpose and effects of the legislation under review. [22] Once the purpose has been identified in this way, the judge seized of the matter must determine whether the provisions at issue are related to the jurisdiction of the enacting legislature. [23] [ 35 ] This step necessarily precedes the analysis of the constitutional doctrines of federal paramountcy and interjurisdictional immunity, both of which are predicated on the constitutional validity of the impugned statute or provisions.

In other words, if the provisions do not pass the first step of the pith and substance analysis and the connection of the provisions to the jurisdiction of the

enacting legislature, then they are unconstitutional and there is no need to take the analysis any further. [24] [ 36 ] To characterize the impugned provisions, one must first identify their true purpose or the objective sought by the legislature, by considering the intrinsic evidence, that is, the legislation at issue, but also, if necessary, the

preamble of the act, its structure, and its general purpose.

Then follows the examination of the extrinsic evidence, for example, the parliamentary or preparatory debates or all the relevant factual circumstances prior to the enactment of the provisions that can identify the true purpose beyond appearances. [25] Next are considered the law’s effects, or in other words, “[its] legal and practical purposes”. [26] [ 37 ] I note that the Supreme Court [27] stated that a flexible approach tailored to the modern conception of federalism, which allows for some overlapping and favours a spirit of cooperation, is to be preferred over a watertight compartment approach to the legislative powers set out in the CA 1867 . [ 38 ] Once this step is complete, the classification of the provisions under sections 91 or 92 of the CA 1867 is necessary to ensure that the level of government that enacted the measures in question had the authority to do so.

A matter can in fact be classified under more than one head of power and will be intra vires if it can be connected to the jurisdiction of the enacting authority. Positions of the parties (

a) Telus [ 39 ] Telus argues that the Superior Court judge erred in law by substituting her own analysis for that of the Court of Québec judge, when the latter had committed no palpable and overriding error justifying interference. [ 40 ] Telus’s brief essentially adopts the reasoning of the Court of Québec judge and attempts to show that it is correct.

Telus argues that the abolition of the Régie des télécommunications in 1997 meant that the National Assembly rightly considered that it did not have jurisdiction over contracts with telecommunications companies since federal jurisdiction over such matters [ translation ] “cannot be divided so that allegedly “local” aspects remain under provincial jurisdiction”. It also noted that the ensuing repeal of s. 5(

c) CPA at the time excluded telecommunications contracts from the CPA ’s aegis. According to Telus, the trial judge did not commit a palpable and overriding error in concluding from the parliamentary proceedings that all the impugned provisions were primarily concerned with telecommunications companies. [ 41 ] Telus also notes that the Superior Court judge committed several errors in departing from the trial judge’s findings on the effects of the impugned provisions.

She limited her analysis to the effects the National Assembly declared it was seeking by enacting the impugned decisions, failed to consider that s. 214.2 CPA could not be separated from the other impugned provisions, and erroneously concluded that ss. 11.3 , 13 , 214.2 , 214.7 , and 214.8 do not impose stricter standards on telecommunications companies than standards of the general law set out in the Civil Code of Québec . [ 42 ] In short, according to Telus, the Court of Québec judge correctly concluded that the pith and substance of the impugned provisions was to [ translation ] “regulate the conditions, terms, and rates for telecommunications services”.

Although the Superior Court judge also noted that the pith and substance of the provisions was primarily concerned with regulating the legal relationship between the consumer and the merchant in the context of new technologies such as contracts for cellular and residential telephones, cable television, Internet access, remote surveillance, and satellite radio, she erred in attributing the impugned provisions to the provincial power over consumer protection. (

b) Bell [ 43 ] Bell essentially adopts the arguments of Telus, adding that it is clear from the wording of s. 214.8 CPA that this provision regulates the terms for indemnities claimed by merchants, and that, as the judge found, the parliamentary debates establish that the provision applies only to merchants operating in the telecommunications sector. [ 44 ] Therefore, Bell is of the view that the pith and substance of s. 214.8 CPA is to regulate the conditions, terms, and rates for telecommunications services, a subject matter clearly within the purview of Parliament’s jurisdiction.

Having determined that this provision concerns telecommunications contracts, the Superior Court judge could not attribute it to the provincial power over property and civil rights.

Furthermore, she erred in justifying the attribution she made by the similarity between s. 214.8 CPA and art. 2129 CCQ, since the former provision imposes stricter limits than the latter on the amounts a service provider can collect when a customer unilaterally cancels a contract. [ 45 ] In its brief, Bell adds that, with regard to itself, the judge could not analyze federal paramountcy in terms of the Code , since the offence alleged against it concerns a contract for wired telephone, television, or Internet services.

In addition, Bell argues that when the statement of offence was issued, Broadcasting and Telecom Regulatory Policy CRTC 2014-576 regulated this type of contract and that, incidentally, it did not prohibit telecommunications companies from claiming indemnities for unilateral cancellation by the customer. On this basis, Bell concludes that, except for the matters regulated by this policy, the CRTC refrained from regulating the rates for telecommunications services, which means that s. 214.8 CPA interferes with the determination to refrain. (

c) The Attorney General of Quebec and the DCPP (“the respondents”) [ 46 ] The respondents argue that the Superior Court judge had to intervene in the face of the obvious error committed by the trial judge, who considered the pith and substance of the impugned provisions by reference solely to the federal telecommunications regime. Moreover, she clearly understood the pith and substance of the impugned provisions, and her conclusion was consistent with the CPA ’s larger purpose.

They also note that ss. 214.7 and 214.8 merely enshrine the principle already found in art. 2129 CCQ in the specific context of contracts for telecommunications services and do not change the state of the law. [ 47 ] According to the respondents, all the impugned provisions relate to both the provincial heads of power under ss. 92(13) and

(16) CA 1867 , and they add that [ translation ] “the mere fact that these provisions apply to other types of contracts than contracts for telecommunications services”, such as contracts for [ translation ] “legal, medical, educational, entertainment or other services” provided at a distance, precludes them from being connected with the federal power over telecommunications undertakings. Application to this case The standard of intervention [ 48 ] In my view, the Superior Court judge was correct to intervene and to find that the trial judge had erred in law in characterizing the impugned provisions.

She could therefore conduct her own analysis of the evidence to characterize and then connect the provisions of the CPA to a head of power. Indeed, like her, I am of the view that the trial judge applied the wrong legal framework when analyzing the purpose and effects of the impugned provisions, since he examined them only from the perspective of the federal government’s jurisdiction over telecommunications, which coloured his reasoning.

His analysis of the intrinsic and extrinsic evidence was also coloured in the same way, which has a double impact: first, it relied on an error in law, and second, it cannot be dissociated from the judge’s finding that [ translation ] “the province directly governs the content of the federal power over telecommunications”. [28] [ 49 ] Indeed, at the outset, and before even examining the provisions at issue, the judge addressed Telus’s field of activity and then proceeded immediately to examine the scope of the federal jurisdiction over telecommunications and its regulation.

Yet such considerations are irrelevant when characterizing the provisions of the CPA .

With respect, as in Chatterjee [29] and the Reference re Securities Act, [30] the trial judge allowed the scope of the federal power to dictate his conclusion concerning the purpose and effects of the impugned provisions, thereby committing an error in law. [ 50 ] I am therefore of the view that, contrary to what Telus and Bell argue, the Superior Court judge was correct in finding that the Court of Québec judge erred in law in having [ translation ] “analyzed the division of powers without determining the purpose of the impugned provisions”. [31] The standard of intervention in constitutional matters is correctness. [32] In this case, however, and with respect, the reasons of the Court of Québec judge reveal that he deliberately refrained from identifying the pith and substance of the impugned provisions (characterization and connection/classification), which, like the evidence, he examined solely in light of the exclusive federal jurisdiction over telecommunications.

For these reasons, the Superior Court judge had to intervene. The analysis by the Superior Court [ 51 ] That said, it will now be determined whether the Superior Court judge’s analysis contained errors in law that allow this Court to intervene, as the appellants argue. [ 52 ] The Superior Court correctly stated the applicable legal principles. She began with a detailed analysis of the provisions at issue, by reference to both intrinsic and extrinsic evidence. She first examined ss. 11.2 , 11.3 and 13 CPA , which fall under the General Provisions of Title 1 ( Contracts regarding Goods and Services ) of the CPA .

She correctly stated that these provisions are not restricted to contracts for services involving sequential performance. She determined their purpose and application in the context of the contractual relationship between telecommunications companies and consumers [33] to be, in particular, greater transparency by the merchant to promote a better balance between the rights and obligations of the parties to a consumer contract. [ 53 ] Next, she further noted that ss. 214.2 , 214.7 , and 214.8 appear in

Chapter III under the division on Contracts involving sequential performance for a service provided at a distance . Although the judge noted that the CPA does not contain any definition of a contract involving the sequential performance for a service provided at a distance, she concluded that [ translation ] “it may be understood as a service contract for “cellular and residential telephone, cable television, Internet access, remote surveillance, and satellite radio,” among other things”.

She determined the purpose of each provision and concluded that their effect was to restore a legal balance between consumers and businesses, not to regulate the content of contracts in minute detail and thereby to dictate how the networks should be operated and the services provided, as Telus and Bell argue. [ 54 ] The Superior Court drew a parallel between these provisions and the analogous standards established by the Civil Code of Québec , which constitutes the general law of Quebec, to which telecommunications carriers are subject in any event. [34] The Court came to the following conclusion: [ translation ] [67] Thus, the detailed analysis of the purpose and effects of the impugned provisions reveals that their pith and substance is primarily concerned with regulating the legal relationship between the consumer and the merchant in the context of new technologies such as contracts for cellular and residential telephones, cable television, Internet access, remote surveillance, and satellite radio. [ 55 ] Although the Superior Court judge, like the parties, treats the impugned provisions as a whole with a single pith and substance, I am instead of the view that the first sections included among the general provisions of the CPA should be distinguished from the second ones, which are intentionally aimed more specifically at contracts involving sequential performance for a service provided at a distance.

That said, given my conclusions that both series of provisions are intra vires provincial jurisdiction, this failure to distinguish does not seem to me to be decisive in the end. 1. Determination of the pith and substance The purpose of the provisions in dispute [ 56 ] Overall, I share the Superior Court judge’s reading of the provisions in dispute. It is clear from her reasons that she carefully considered the intrinsic and extrinsic evidence for each provision at issue, and her conclusion as to their purpose is in my view exempt from any error of law.

(

a) Intrinsic evidence [ 57 ] It is clear to me that the primary purpose of each of the impugned provisions is to regulate a practice that, in the view of the legislator, unduly benefitted merchants to the detriment of consumers. Indeed, the wording of each

section prohibits or restricts certain provisions in favour of merchants or imposes certain obligations on them. [ 58 ] The purpose of s. 11.2 CPA is to prohibit merchants from unilaterally amending an essential element of any contract – except an indeterminate-term contract – entered into with a consumer. An essential element of the contract means its nature, or, if applicable, its term. The other elements of a contract cannot be unilaterally amended unless the consumer is notified of the amendment and has, in exchange, an opportunity to rescind or cancel that contract. [ 59 ]

Section 11.3 CPA applies only to the cancellation of service contracts involving sequential performance. Where the contract is of indeterminate term, the legislator requires that the consumer be given sufficient notice of the cancellation. A fixed-term contract can be cancelled only in accordance with the rules of the Civil Code of Québec whereby the consumer’s default must be serious or repeated ( art. 1604 , para. 2, CCQ) and the merchant must then make reparation for any injury caused to the consumer( art. 2126 , para. 1, CCQ), just as it must repay any advances received in excess of what was earned and compensate for any other injury (art. 2129 paras. 2 and 3 CCQ). [ 60 ]

Section 13 CPA aims to prevent the merchant from making consumers pay a fixed amount of charges, penalties, or damages upon the non-performance of their obligations, except with respect to two well-defined types of contract: contracts of sale or long-term contracts of lease of automobiles. [ 61 ] As mentioned above, ss. 214.2 , 214.7 and 214.8 CPA are along the same lines, but they specifically target contracts involving sequential performance for services provided at a distance. Therefore, at first glance, their scope is more limited.

The first of these three provisions lists all the information this type of contract must contain and requires that the contract be in writing. [35] These requirements are an indication of the legislature’s intention to ensure the consumer has access to all of the relevant information before agreeing to enter into a contract. [ 62 ] Sections 214.7 and 214.8 CPA are complimentary and must be read with s. 214.6 CPA because they grant rights and obligations to the merchant and the consumer in the event the consumer cancels the contract. [ 63 ] The consumer may cancel the contract at any time by sending a notice to the merchant (s. 214.6, para. 1, CPA ).

In addition to the amounts owing for services already provided, the merchant may then claim from the consumer only the cancellation indemnity (s. 214.6, para. 2, CPA ), defined in ss. 214.7 CPA (in the case of fixed-term contracts) and 214.8 CPA (in the case of indeterminate-term contracts). The Superior Court judge was therefore correct in stating that these three provisions convey the intention to entrench the consumer’s right of cancellation and to cap the amounts a merchant can claim.

She was also correct in noting that these provisions specify the terms and conditions of application of the general rules set out in the Civil Code , namely arts. 6, 1373, 1375, 1439, 1604, 1617, 2126, and 2129 (to which arts. 7, 1437, 1590, 1622-1623 and 2125 CCQ may be added), to consumer contracts, including contracts involving sequential performance and, among them, contracts for services provided at a distance. [ 64 ] Considering the intrinsic evidence, I am of the view that the purpose of all these provisions, taken as a whole, is to curb various practices by merchants towards consumers, particularly, one might add, in the case of contracts involving sequential performance for a service. (

b) Extrinsic evidence [ 65 ] The analysis of the extrinsic evidence does not change anything. While it may cover a wide range of evidence, in this case it is relatively well circumscribed in the legislative history to the various parliamentary debates and press briefings by the Minister of Justice at the time. [36] [ 66 ] A comprehensive and careful reading of this evidence does not support the appellants’ position.

The judge’s analysis does not invite the Court’s intervention because she correctly noted that it is clear from the parliamentary debates and the Minister’s public interventions that the primary objective of the impugned provisions is greater transparency by the merchant, to remedy the particularly abstruse nature of certain mobile telephone services contracts, [37] to limit the amounts that can be claimed by merchants in the event of cancellation, to allow consumers to be released from their obligations towards telecommunications companies in certain circumstances when they are no longer able to fulfill them, without too heavy a burden, in short [ translation ] “to promote a better balance between the rights and obligations of the parties to a consumer contract”. [38] [ 67 ] Thus, as the judge noted, even if the impugned provisions – in particular ss. 214.2 , 214.7 , and 214.8 CPA , but also ss. 11.2 , 11.3 and 13 , which apply to contracts entered into with telecommunications carriers – apply to them, the fact remains that the legislature’s primary purpose is to protect consumers and to promote a better balance between the rights and obligations of the parties to such consumer contracts.

I see no error that would justify the intervention of this Court. The effects [ 68 ] Essentially, the Court must determine the [ translation ] “legal or practical consequences” [39] of the provisions at issue.

First, from a legal perspective, while the Civil Code already includes general provisions covering this kind of contract, the impugned provisions of the CPA certainly provide additional deterrent effect to the obligations imposed since, one, they are of public order and, two, failure to comply now entails a penal sanction. [40] Whether the Civil Code provisions already in force are more or less onerous than those in the CPA appears irrelevant at this stage of the analysis. [ 69 ] Next, from a practical standpoint, the effects sought were often mentioned in the parliamentary proceedings and are closely

connected to their purpose. [41] Essentially, the effects sought by the legislature were to promote healthy competition by allowing consumers to better compare offers since they would easily be able to understand [ translation ] “what they were committing to and how much it would cost them to terminate the contract”. [42] Clearly, these provisions forced the appellants to change some of their contractual practices, not to regulate telecommunications rates, but to protect consumers entering into such contracts.

Indeed, in an increasingly complex consumer market, the primary purpose is still to put an end to commercial practices considered abusive so that consumers are provided with a high level of protection. and thus to ensure a better balance between consumers and merchants. [ 70 ] Regardless, as the Supreme Court recalled in References re Greenhouse Gas Pollution Pricing Act , a law’s practical effects are side effects, especially where, as here, the impugned provisions have been in force for only a short time.

It follows that “any prediction of future practical effect is necessarily short-term, since the court is not equipped to predict accurately the future consequential impact of legislation”. [43] The general economic consequences raised by the appellants, or the financial constraints that threaten their economic well-being and, in turn, the attainment of the objectives of the TA , which are not already incurred by the application of the Civil Code , are at best currently in the realm of prediction. [ 71 ] Thus, in light of the above, the judge was correct in rejecting the appellants’ argument that the pith and substance of the impugned provisions was [ translation ] “to regulate the content of Business contracts in minute detail, thereby dictating how the Networks should be operated and the Services provided.” [44] An analysis of the pith and substance of the provisions leads instead to the conclusion that the purpose of the impugned provisions as a whole is to regulate and put an end to certain practices by merchants that are detrimental to consumers, particularly practices adopted with respect to contracts involving sequential performance, to regulate the legal relationship between the consumer and the merchant in the context of new technologies such as contracts for cellular and residential telephones, cable television, Internet access, subscriptions for the supply and use of online video games, wireless data storage, remote surveillance, satellite radio, and even subscriptions to databases.

The classification [ 72 ] As discussed, the Superior Court judge determined that the provisions in question can be assigned to the provincial power under s. 92(10) in relation to intra-provincial trade, s. 92(13) in relation to property and civil rights, and s. 92(16) regarding matters of a purely local nature. [ 73 ] In BMO , the Supreme Court ruled that consumer protection falls under provincial jurisdiction by way of s. 92(13) of the CA 1867 and that the provincial legislative provisions related to a head of power listed in s. 92 are valid and, in the absence of impairment, apply to federal undertakings under s. 91 CA 1867 , despite the federal government’s exclusive jurisdiction over all vital aspects of their operations. [45] The same principle applies to works and undertakings falling under ss. 92(1)(a),(b), or (

c) CA 1867 . [ 74 ] Considering the pith and substance of the provisions at issue, I find that they are at the core of the provincial jurisdiction over contracts and thus fall within the ambit of s. 92(13) of the CA 1867 in relation to property and civil rights. It is not necessary, therefore, to consider their relevance to ss. 92(10) and 92(16). [ 75 ] Accordingly, like the trial judge, I am of the view that the pith and substance of the impugned provisions, both by their purpose and by their effects, falls under the provincial legislative power and are therefore intra vires . 2.

The division of powers: the doctrine of interjurisdictional immunity [ 76 ] The doctrine of interjurisdictional immunity operates to prevent laws enacted by one level of government from impermissibly trenching on the vital, unassailable core of jurisdiction reserved for the other level of government.

Thus, an intra vires law will be declared inapplicable to the extent the infringement constitutes an impairment, that is, a serious and significant intrusion [46] (defined as “a midpoint between sterilization and mere effects” [47] ) on the core activity under the jurisdiction of the other level of government. [ 77 ] It must be noted that, since CWB, this doctrine no longer has the importance or the scope it once had.

Its application is “very restricted” [48] and it is now considered out of step with a contemporary view of cooperative federalism, which advocates that valid legislation enacted concurrently by both levels of government be upheld, when possible.

Although the application of interjurisdictional immunity has not been abolished, it is reserved for situations already covered by precedent, primarily because the search for the “core” of a given head of power creates uncertainty and evolution. [49] [ 78 ] While the regulation of rates to ensure the orderly development and efficient operation of radiocommunication in Canada and the maintenance of an efficient telecommunications network may be considered part of the core of Parliament’s jurisdiction over telecommunications, as the trial and appellate judges found in this case, and as the Supreme Court has recognized on at least three occasions, [50] it is not necessarily the case for the other aspects invoked by the appellants, on which they claim the impugned provisions have an impact, namely telecommunications services and some of their conditions of service, including the standards governing telecommunications contracts of services. [ 79 ] In addition to not being based on any convincing precedent, I find that this suggestion extends the core of telecommunications jurisdiction beyond its “minimum unassailable content”.

Moreover, the appellants have not shown that it is absolutely necessary for Parliament to have jurisdiction over every facet of contracts entered into by telecommunications companies to pursue the purposes for which it was conferred jurisdiction over the matter, that is, to ensure the proper management of those undertakings and the orderly and coordinated development of a telecommunications network. [ 80 ] While it is essential that telecommunications companies enter into contracts with consumers to provide them with their services, not all of the rights and obligations contained in those contracts are essential to fulfilling their mission and achieving the objectives of the TA .

Thus, to assert that the core of federal jurisdiction in this matter extends to all the terms and conditions of telecommunications services contracts or to all the “conditions of service” for such services is to unduly restrict or even set aside all of the provincial legislation that is in furtherance of the public interest by ensuring a balance and protecting consumers. [51] It is tantamount to giving these companies “sweeping immunity” that is not justified. [52]

[ 81 ] As the Supreme Court recalled: [53] [45] Further, a broad use of the doctrine of interjurisdictional immunity runs the risk of creating an unintentional centralizing tendency in constitutional

interpretation. … Commentators have noted that an extensive application of this doctrine to protect federal heads of power and undertakings is both unnecessary and “undesirable in a federation where so many laws for the protection of workers, consumers and the environment (for example) are enacted and enforced at the provincial level.” [ 82 ] Nevertheless, assuming that the impugned provisions of the CPA affect the core federal power over the regulation of telecommunications services, what now remains to be determined is whether they seriously impair or trench on the core of Parliament’s power over telecommunications to the point of threatening that power.

After analysis, I believe they do not. It is indisputable that the provisions at issue affect the rates of telecommunications services, and even trench on that purpose, but they do not impair the federal power to implement the objectives of the TA . [54] [ 83 ] In BMO , the Supreme Court clearly distinguishes provincial measures that have an impact on activities of federal undertakings in the banking sector from those prohibiting their activities: [55] [69] The present appeals are distinguishable from COPA .

In addition to the directly relevant precedent on the federal aeronautics power, COPA also involved provincial statutory provisions that amounted to a blanket ban, under certain conditions, on an activity that fell within the core of the federal aeronautics power. As the Court pointed out, applying these provincial provisions would force Parliament to pass legislation to countermand the provincial rules, failing which the activity could not occur at all. The same is not true for the CPA provisions at issue here.

The disclosure and remedy provisions do affect how banks carry out a certain aspect of their activities, but as discussed above that effect does not amount to impairment. It is hard to imagine how these provisions would force Parliament to pass legislation to countermand them, failing which it would be impaired in its ability to achieve the purpose for which exclusive jurisdiction over banking was conferred. For these reasons, we conclude that the Court of Appeal was correct in holding that interjurisdictional immunity is not engaged. [ 84 ] This is also the case here.

Although the provisions of the CPA affect certain aspects of the activities of telecommunications undertakings because they set out rules for contracts entered into with consumers, these are not situations where Parliament has no other choice but to legislate to exclude them, failing which otherwise its exclusive jurisdiction and the activities of telecommunications undertakings could not be carried out in keeping with the objectives of the TA . [ 85 ] First, with respect to the fixing of rates, although ss. 11.3, 13, 214.7 and 214.8 CPA limit the amounts a telecommunications undertaking can claim in the context of its contractual relationships with consumers, and s. 11.2 CPA prevents such an undertaking from changing the rates for services governed by an ongoing fixed-term contract, that does not seriously affect or impair Parliament’s power to fix rates.

These provisions target specific aspects of consumer contracts, leaving the other elements (for example, the price of telephones or any of the services offered by telecommunications undertakings) to free-market rules. [ 86 ] Nor has Telus established that the impugned provisions impair Parliament’s ability to maintain continuous and efficient telecommunications services.

Contrary to what Telus submits, it is difficult to see how s. 11.2 CPA might prevent Telus from performing urgent or unplanned work to ensure the proper functioning of its network, or that it will have to amend its contracts with consumers to take into account the requirements of its partners, particularly with respect to roaming fees, or that s. 11.3 CPA would prevent it from terminating certain contracts, which would have an impact on the network’s efficiency. [ 87 ] In addition, contrary to what Telus argues, s. 214.2 CPA , which prescribes the information that must appear in any contract involving sequential performance for a service provided at a distance, does not affect the rates of telecommunications undertakings because it primarily concerns the material presentation of contracts and the information necessary for their conclusion and performance. [ 88 ] Ultimately, the impact of the impugned CPA provisions on the core federal power does not seriously impair or trench on that core, as defined by the Supreme Court in matters of interjurisdictional immunity.

The impugned provisions do not impair Parliament from implementing the objectives or a rate policy, or from developing rules to ensure the maintenance of a reliable and efficient telecommunications network. While they definitely affect certain specific aspects of the pricing of services and perhaps, even more remotely, the work and operations that telecommunications undertakings must perform to maintain their network, Canadian federalism and the restricted application of this doctrine do not preclude them. 3.

The division of powers: the doctrine of federal paramountcy [ 89 ] The appellants raise this doctrine in the alternative to convince the Court that the impugned provisions are on the whole inoperative in this case. In this scenario, when there is a conflict between a validly enacted provincial law and federal law, the provincial law is outweighed and becomes inoperative to the extent of the conflict.

There are two forms of conflict. [56] The first is operational conflict or conflict of effects, where it is impossible to comply with both laws concurrently because one says “yes” and the other says “no”. [57] There must be actual conflict.

The mere existence of a duplication, addition, or supplement to the federal legislation does not meet this requirement. [58] The second is frustration of purpose between the federal scheme and the provincial provisions, where the provincial provisions frustrate the purpose of the federal law. [59] As the Supreme Court recalled in COPA : [60] The standard for invalidating provincial legislation on the basis of frustration of federal purpose is high; permissive federal legislation, without more, will not establish that a federal purpose is frustrated when provincial legislation restricts the scope of the federal permission…. [ 90 ] It should be recalled that the fact that Parliament has legislated in respect of a matter does not lead to the presumption that in so doing it intended to rule out any possible provincial action in respect of that subject, especially in the absence of very clear statutory language to that effect. [61] For this reason, among others, the courts knowingly avoid giving this doctrine too broad a scope and instead favour a harmonious, flexible, and compatible

interpretation of the provisions at issue.

[91] The doctrine of federal paramountcy therefore must promote the coexistence of federal and provincial laws rather than a strictand inflexible

interpretation of the rules in isolation, thereby bringing about a conflict.[62] The Supreme Court stated as follows on thematter:[63] [20] …The fundamental rule of constitutional

interpretation is, instead, that “[w]hen a federal statute can be properly interpreted so asnot to interfere with a provincial statute, such an

interpretation is to be applied in preference to another applicable construction whichwould bring about a conflict between the two statutes”: Canadian Western Bank, at para. 75, citing Attorney General of Canada v. LawSociety of British Columbia, (SCC), [1982] 2 S.C.R. 307, at p. 356; see also Ryan Estate, at para. 69. [21] Given the guiding principle of cooperative federalism, paramountcy must be narrowly construed. Whether under the operationalconflict or the frustration of federal purpose branches of the paramountcy analysis, courts must take a “restrained approach”, andharmonious

interpretations of federal and provincial legislation should be favoured over

interpretations that result in incompatibility:Reference re Securities Act, 2011 SCC 66 , [2011] 3 S.C.R. 837, at paras. 59-60, citing OPSEU v.

Ontario (Attorney General), (SCC), [1987] 2 S.C.R. 2, at p. 18, per Dickson C.J. (concurring); see also Canadian Western Bank, at paras. 37 and 75. [92] Telus argues that when the offences were committed, Parliament had entrusted the CRTC, to the exclusion of any other agency,with the exclusive mandate of creating a complete regulatory scheme to achieve and implement the objectives of the Act on a nationalscale, including the establishment of telecommunications rates and their regulation.

Such a [translation] “highly complex and specializedexercise” can only be done by the CRTC. [93] According to Telus, the fact that the Wireless Code had not yet been adopted at the time is irrelevant, since s. 34 TA conferred apositive obligation on the CRTC to refrain from exercising its powers when it found that the degree of competition in the wirelessservices market was sufficient to protect the interests of users.

This power to refrain, which is the reflection of a considered legislativechoice, is not an invitation to the provinces to invade federal jurisdiction, because telecommunications conditions, terms, and ratesremain regulated by the TA and subject to the exclusive jurisdiction of the CRTC. [94] The respondents reply that the power to refrain pursuant to s. 34 TA does not expressly exclude the application of provincial lawsbut rather achieves the approach advocated by the Supreme Court, of coexistence between provincial and federal laws. [95] Like the appellate judge, I am not convinced that the federal regulatory scheme constitutes a complete code that excludes theapplication of any other legislation.

The issue of whether the CRTC’s forbearance in this instance was a refusal to regulate the market ora decision not to regulate is secondary.

Through its forbearance, the CRTC, as required by the TA, expressed its determination that, inthis instance, it considered the telecommunications market sufficiently competitive to protect the interests of users. [96] In my view, not regulating the market by imposing its own specific rules and standards means that the market is left in its currentstate, that is, subject to free market forces and to the rules of law that apply to and regulate the market, including, of course, those arisingfrom provincial law, which in Quebec is the Civil Code of Québec and the CPA.[64] [97] In Canada, the free market in the telecommunications industry is necessarily based, at least in part, on rules of law that are underprovincial jurisdiction, like those concerning property and civil rights, which of course include the protection of consumers’ contractualinterests and the contractual relationships between consumers and service providers.[65] [98] This situation is similar to the one the Supreme Court examined in BMO, except that in the case at bar, the objective of the TAinvoked by the appellants is [translation] “to eliminate the barriers which fragmented the internal market, leaving one unifiedtelecommunications market, thereby favouring coherent, uniform and predictable national rules...” by implementing a [translation]“comprehensive and exhaustive regulatory” regime. [99] Just like banking, which is under federal jurisdiction, telecommunications is also dependent on fundamental provincial rules suchas the basic rules of contract, including consumer contracts in general and contracts involving sequential performance for a serviceprovided at a distance.[66] In BMO, the Supreme Court stated the following: [79] Sections 12 and 272 do not provide for “standards applicable to banking products and banking services offered by banks”, butrather articulate a contractual norm in Quebec.

Merchants must bring costs to the attention of consumers and, failing to do so, cannotclaim them. This requirement does not amount to setting

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