r v. TELUS, 2019 QCCQ 2143

Unofficial English Translation of the Judgment of the Court Directeur des poursuites criminelles et pénales c. Telus Communications inc. 2019 QCCQ 2143 JP 2213 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL “Criminal and Penal Division” No.: 500-61-404980-154 DATE: April 12, 2019 PRESIDING: THE HONOURABLE YVAN POULIN, J.C.Q. DIRECTOR OF CRIMINAL AND PENAL PROSECUTIONS Prosecutor v. TELUS COMMUNICATIONS INC. Defendant JUDGMENT 1.

OVERVIEW [ 1 ] The Prosecutor claims that the Defendant has violated certain provisions of the Consumer Protection Act (hereinafter CPA ) governing the content of contracts entered into between a merchant and a consumer. The statements of offence were served in 2014 following an investigation by the Office de la protection du consommateur (hereinafter OPC) aimed at ensuring compliance with the CPA by various undertakings offering communication products and services. [ 2 ] According to the Prosecutor, the offences were allegedly committed by the Defendant between November 2012 and May 2013.

They consisted in violations of provisions added to the CPA in 2009 [1] to ensure better supervision of wireless telephony industry and other related industries. [ 3 ] The present case challenges the constitutionality, scope and nature of these new provincial legislative provisions. In substance, the Court must rule on the following three questions: (

a) Are the new provisions of the CPA constitutionally valid, applicable and operative with regard to the Defendant? (

b) Are the alleged penal offences known in law? (

c) Has it been proved beyond a reasonable doubt that they were committed? [ 4 ] The Prosecutor maintains that the Defendant is subject to these new measures, even if it is a federally regulated carrier. It argues that the new CPA provisions, which introduce certain mandatory contractual requirements, aim to better protect consumers and apply to so-called “federal” companies. According to the Prosecutor, failure to comply with these new measures can be validly punished by penal proceedings. In its opinion, the offences at issue have been proved beyond any reasonable doubt.

[ 5 ] Based on sections 91 and 92 of The Constitution Act, 1867 as well as principles of case law regarding division of powers, the Defendant maintains that the new provisions of the CPA are invalid or, alternatively, are inapplicable and inoperative with regard to it. According to the Defendant, these provisions are ultra vires the powers of the provincial legislature and fall within Parliament’s field of jurisdiction.

Alternatively, these provisions should, in its opinion, be declared inapplicable and inoperative with regard to it under the doctrines of interjurisdictional immunity and federal paramountcy. [ 6 ] Apart from the constitutional argument, the Defendant submits that the offences alleged against it are unknown in law. In this regard, it relies on the principles defined by the Supreme Court in Blouin v. Longtin [2] to claim that no penal offence results from failure to comply with these new legislative measures.

Although failure to comply with these measures could be punished through civil proceedings or an injunction, the Defendant claims that the legislature would not have wanted them to be punished through penal proceedings. In its view, this flows from an application of the principles of legal

interpretation as to the wording, overall context, purpose, structure and background of the provisions and the legislative regime in question. [ 7 ] In addition to the foregoing, the Defendant makes specific individual arguments connected with each of the alleged violations. In the Defendant’s view, the violations of sections 11.2, 11.3, 13, 214.2 and 214.7 of the CPA have not been proved beyond any reasonable doubt.

This is the result, it says, of an analysis of the wording of the contractual clauses that concern us with regard to the essential elements of the alleged violations. [ 8 ] Although certain other provinces [3] have enacted laws intended to govern the wireless telephone industry with regard to consumer protection, up to now none of these laws has been challenged constitutionally. [ 9 ] The Attorney General of Quebec intervened in this case to defend the constitutional validity of the legislative provisions at issue.

For the sake of efficiency and with the consent of the parties, this case is being heard jointly with the penal proceedings instituted in Directeur des poursuites criminelles et pénales c. Bell Canada , [4] in which an analogous constitutional argument was raised. [ 10 ] At the hearings, the Prosecutor and the Defendants presented their evidence on the merits concerning the circumstances of the alleged offences. Thereafter, the Defendants and the Attorney General of Quebec presented testimony and documentary evidence relating to the constitutional issue.

All the arguments, both on the merits and on the constitutional issue, were subsequently submitted by the parties. [ 11 ] Now we must rule on these issues in the limited and specific context of the penal proceedings instituted against the Defendant. For the reasons that follow, the Court finds that the provisions of the CPA that are at issue are not constitutionally applicable to the Defendant on account of the doctrine of interjurisdictional immunity, and are inoperative with regard to it on account of the doctrine of federal paramountcy.

As a result of this finding, it is neither necessary nor expedient to rule on the other issues raised by the parties. [ 12 ] For the purposes of this judgment, the Court will first deal with the Defendant’s field of activity, federal jurisdiction over telecommunications, and the main characteristics of federal regulation in this area. The Court will then analyze the context and nature of the amendments made to the CPA by the provincial legislature and then briefly summarize the OPC investigation that followed.

Finally, the Court will deal with the constitutional argument with regard to the limited jurisdictional powers attributed to it by the legislature. 2. THE DEFENDANT’S FIELD OF ACTIVITY [ 13 ] The Defendant offers a range of communication products and services in all Canadian provinces and territories. It has set up a network to provide mobile telephone, home telephone, television and Internet services to residential and business customers. It operates this network across Canada in compliance with the applicable federal regulations.

Its activities are supervised and governed by a vast body of legislation and regulation enacted by Parliament. [5] [ 14 ] To operate its network, the Defendant holds spectrum licences issued under the authority of the federal Minister of Industry under the Radiocommunication Act [6] and its regulations. These licences are granted through a tightly regulated spectrum auction process. They have a number of conditions and technical requirements, including certain obligations in terms of network deployment. [ 15 ] Since 2014, the Defendant has paid more than three billion dollars to acquire these spectrum licences.

According to the evidence, it spends between one and two billion dollars a year to develop and maintain its entire network. This spending essentially goes toward maintaining or extending overall network coverage and capacity.

In addition, it is necessary to ensure that the carrier remains competitive and can respect the terms of the spectrum licences it holds. [ 16 ] According to the Telecommunications Act , the “conditions of service” for the offering and provision of any telecommunications services to consumers by the Defendant are imposed by the Canadian Radio-television and Telecommunications Commission (hereinafter CRTC). [7] Since the Defendant is a “telecommunications common carrier” providing a “telecommunications service” within the meaning of

section 2 of the Act, its activities are subject to the powers of the CRTC.

[ 17 ] The decisions and policies of the CRTC imposing the conditions of service for telecommunication services are applicable to the Defendant. As we will see later on, the CRTC has very broad jurisdiction over this issue. It includes in particular the power to make decisions and develop policies to protect consumers. The adoption of the Wireless Code of 2013 is precisely the result of the exercise of this power. The same is true, as we shall also see later on, of other measures developed by the CRTC in the past 25 years. 3.

FEDERAL JURISDICTION [ 18 ] The Defendant is an interprovincial carrier operating in a field under federal jurisdiction within the meaning of the Constitution. Pursuant to sections 92(10) (

a) and 91(29) of the Constitution Act, 1867 , Parliament has exclusive legislative authority in matters of interprovincial telecommunications. [ 19 ] Over the years, the courts have on a number of occasions been called on to rule, as in the case at bar, on the constitutional validity of certain legislative or regulatory measures arising specifically in the field of telecommunications, or having effects thereon. The courts have several times affirmed Parliament’s exclusive legislative authority over interprovincial telecommunications common carriers.

In many cases, they declared certain provincial measures invalid, inapplicable or inoperative under one or the other of the constitutional doctrines relied on in this case. [ 20 ] In 1989, in Alberta Government Telephones v. Canada (C.R.T.C) [8] (hereinafter AGT ), the Court ruled that a telephone company established by an Alberta statute was subject to federal jurisdiction. From a factual point of view, the Court dismissed the argument that the company was only local in nature.

Thus, because of the circumstances supported by the evidence, the Court determined that the company’s field of activity meant that it was exclusively subject to the jurisdiction, decisions and policies of the CRTC. On page 257, the Court indicated: [t]he case law clearly establishes that if a work or undertaking falls within s. 92(10)(

a) it is removed from the jurisdiction of the provinces and exclusive jurisdiction lies with the federal Parliament … [ 21 ] In 1994, in Téléphone Guèvremont Inc. v. Québec (Régie des télécommunications) (hereinafter Téléphone Guèvremont ), [9] the Court made the same finding by ruling that a Quebec undertaking was itself also subject to federal jurisdiction.

Considering all the circumstances, the Court determined that the Régie des télécommunications du Québec, which had been set up by the provincial legislature in 1988 to control the field of telecommunications, did not have jurisdiction over the undertaking in question. According to the Court, the Régie’s decisions could not be set up against it. On account of this absence of legislative jurisdiction, the Régie was later abolished. [ 22 ] Parliament’s legislative authority over telecommunications undertakings was reiterated in 2016 in Rogers Communications Inc. v. Châteauguay (City) [10] (hereinafter Rogers ).

In that case, the Court struck down a regulatory measure by which a municipality sought to prevent a telecommunications undertaking from installing an antenna for the purpose of operating its telecommunications network. After analyzing the circumstances, a majority of the Court ruled that the pith and substance of this measure fell within federal jurisdiction in relation to telecommunications rather than provincial jurisdiction in relation to property and civil rights. As a result, this measure was declared ultra vires . 4. THE MAIN CHARACTERISTICS OF FEDERAL REGULATION [ 23 ]

Part III of the Telecommunications Act grants the CRTC complete jurisdiction in relation to determine the conditions of service for telecommunication services: ss. 23 to 34. In exercising this jurisdiction, the CRTC enjoys vast powers, the scope and extent of which are defined by the Act [11] and the rules of practice of the CRTC. [12] [ 24 ] The Telecommunications Act came into force in 1993 following the AGT ruling, supra . By passing this statute, the Parliament of Canada sought to update and modernize the legislative framework applicable to telecommunications common carriers.

To do so, it decided to entrust most of the regulation of communications to a unique and specialized agency. [ 25 ] At the time that the statute was being passed, the Minister of Communications, Perrin Beatty, explained that the purpose of the new legislation was to set uniform, national standards to govern telecommunications: … Bill C-62 will do exactly that. It will eliminate the barriers which fragment our internal market, leaving us with one unified telecommunications market .

It will establish a coherent policy for the entire country that will be co-ordinated by one regulatory agency, the CRTC . … [13] … Industry will win by having one national market, national standards across the country and a simplified and more flexible regulatory system . Provinces will win by having more productive businesses and more input in setting policy than ever before in the history of our country. Canadians as a people will win because we will be able to build upon the strengths of our one great winner in the high-tech field.

Canadians as individuals will benefit by having guaranteed base levels of service across the country no matter where they live. [14] [Emphasis added.] [ 26 ] In substance, the Telecommunications Act is characterized by the following: - It affirms that “telecommunications performs an essential role in the maintenance of Canada’s identity and sovereignty” (s. 7); - It defines the objectives of Canadian telecommunications policy (s. 7);

- It assigns responsibility for regulating communications, including conditions of service and rates, to a single specialized agency, the CRTC (ss. 23 to 47); - It gives the Governor in Council the power to issue directions of general application to the CRTC with respect to Canadian telecommunications policy (s. 8); - It defines the scope of the CRTC’s powers in a broad and liberal manner (s. 32, and ss. 47 to 63); and - It introduces the concept of forbearance that must guide the CRTC in exercising its powers, including the power to determine conditions of service for telecommunications services (s. 34). [ 27 ] With regard to powers of implementation, the Act provides for administrative, civil and penal penalties in the case of non- compliance with the CRTC’s decisions and guidelines (ss. 72 to 74).

The Act further stipulates that the CRTC’s decisions are subject to a right of appeal before the Federal Court of Appeal (s. 64) and to the Governor in Council’s power to vary, rescind or refer (s. 12). [ 28 ] The concept of forbearance is a fundamental and distinctive characteristic of the Telecommunications Act . Although Parliament granted a broad jurisdiction to the CRTC, it set guidelines for its exercise by explicitly subjecting it to a power and duty of forbearance. [ 29 ]

Section 34 stipulates that in exercising its powers, the CRTC must refrain from the exercise of any power if “a telecommunications service or class of services… is or will be subject to competition sufficient to protect the interests of users”. Furthermore, this same provision allows that the CRTC may refrain from the exercise of any power where that “would be consistent with the Canadian telecommunications policy objectives”: Forbearance Forbearance by Commission 34

(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 . Idem

(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. Exception

(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. Effect of forbearance

(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. [ 30 ] Under this section, it is clear that the power and duty of forbearance apply to the measures to determine the conditions of service for telecommunications services. Although it could have decided otherwise, Parliament determined that the CRTC had to take this factor into account in exercising its absolute jurisdiction. [ 31 ] It should be remembered that under

section 47 of the Act, the CRTC must exercise its powers “with a view to implementing the Canadian telecommunications policy objectives” as defined in

section 7. In exercising its powers, it must consider a multitude of factors and balance varied interests that go well beyond those of consumers and carriers. [15] [ 32 ] Under

section 8 of the Act, the CRTC must also consider the Order Issuing a Direction to the CRTC on Implementing the Canadian Telecommunications Policy Objectives , [16] which also restricts the exercise of regulatory powers to situations in which it is necessary: 1. In exercising its powers and performing its duties under the Telecommunications Act , the Canadian Radio-television and Telecommunications Commission (the “Commission”) shall implement the Canadian telecommunications policy objectives set out in

section 7 of that Act, in accordance with the following: (

a) the Commission should : (

i) rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy objectives, and

(ii) when relying on regulation, use measures that are efficient and proportionate to their purpose and that interfere with the operation of competitive market forces to the minimum extent necessary to meet the policy objectives ; (

b) the Commission, when relying on regulation , should use measures that satisfy the following criteria, namely, those that: (

i) specify the telecommunications policy objective that is advanced by those measures and demonstrate their compliance with this Order , (ii) if they are of an economic nature, neither deter economically efficient competitive entry into the market nor promote economically inefficient entry , (iii) if they are not of an economic nature, to the greatest extent possible, are implemented in a symmetrical and competitively neutral manner, and (iv) if they relate to network interconnection arrangements or regimes for access to networks, buildings, in-building wiring or support structures, ensure the technological and competitive neutrality of those arrangements or regimes, to the greatest extent possible, to enable competition from new technologies and not to artificially favour either Canadian carriers or resellers; and ; (

c) the Commission, to enable it to act in a more efficient, informed and timely manner, should adopt the following practices, namely, (

i) to use only tariff approval mechanisms that are as minimally intrusive and as minimally onerous as possible , (ii) with a view to increasing incentives for innovation and investment in and construction of competing telecommunications network facilities, to complete a review of its regulatory framework regarding mandated access to wholesale services, to determine the extent to which mandated access to wholesale services that are not essential services should be phased out and to determine the appropriate pricing of mandated services, which review should take into account the principles of technological and competitive neutrality, the potential for incumbents to exercise market power in the wholesale and retail markets for the service in the absence of mandated access to wholesale services, and the impediments faced by new and existing carriers seeking to develop competing network facilities , (iii) to publish and maintain performance standards for its various processes, and (iv) to continue to explore and implement new approaches for streamlining its processes . [ 33 ] This unique legislative regime results from the particularities of an industry that is in a constant state of rapid change.

It attests to the clear determination of the Parliament of Canada to limit regulation strictly to cases in which it is required. [ 34 ] Obviously, this legislative regime reflects a fully conscious and thoughtful choice by Parliament.

This is clear from an explanatory document that was published when this legislation was adopted, in 1992, by the federal Minister of Communications, Perrin Beatty: The most important new power the act accords the CRTC is the power to forbear from exercising its normal regulatory powers in relation to services provided by Canadian carriers where it deems there is sufficient competition to protect users' interests . Until now, the CRTC could not refrain from regulating the carriers under its jurisdiction .

This ran counter to the general trend in modern societies toward more reliance on market forces, and had frequently been criticized by the industry. The new legislation authorizes the CRTC, in exercising its powers, to take into account the degree of competition in the provision of services. Thus, it may refrain from regulating if it deems that there is sufficient competition to ensure that just and reasonable rates for services are established, and to prevent any unjust, undue or unreasonable discrimination, preference or disadvantage .

However, the act provides that, whenever the CRTC determines that the service is no longer subject to sufficient competition, the Commission must resume the exercise of its normal powers and duties. [17] [Emphasis added.] [ 35 ] In the past, in application of this particular legislative characteristic, the CRTC refrained from regulating certain facets of the provision of telecommunications services. [18] A number of decisions rendered by the CRTC refer to this obligation to refrain to justify a refusal to intervene. [ 36 ] On the other hand, when necessary, the CRTC has specifically exercised its jurisdiction in this matter.

Without being exhaustive, let us point out that the CRTC has: - Approved the structure and mandate of the Commissioner for Complaints for Telecommunications Services (the Agency) whose mission is to protect consumers; [19] - Required telecommunications service providers to be members of the Agency; [20] - Regulated early cancellation fees, [21] the portability of telephone numbers, [22] disconnection of services [23] and Internet traffic management practices and mobile data; [24] and - Regulated the scope, nature and conditions of contracts between providers and consumers. [25]

[ 37 ] It is important to mention that until the adoption of The Wireless Code of 2013, [26] the CRTC had formally refrained, under its obligation of forbearance, from regulating certain aspects of the provision of telecommunications services. [ 38 ] It was after analyzing and considering all the factors mentioned above, including the Canadian telecommunications policy and the direction given by order, and then weighing all the interests involved, taking into account the particularities of the telecommunications industry, that the CRTC decided to implement a mandatory code of conduct applying to all such service providers. [ 39 ] The decision in which the CRTC reached this conclusion includes more than 400 paragraphs analyzing the relevant factors as well as the position of numerous interveners.

The decision came following comments and representations from more than 5,000 participants including more than 20 wireless service providers, and more than 10 consumer defence groups, the governments of certain provinces and territories, as well as several provincial public agencies, including the Office de la protection du consommateur du Québec. [27] [ 40 ] The federal Wireless Code , which came into effect on December 2, 2013, contains standards and mandatory requirements concerning the contractual conditions applicable, critical information, postpaid and prepaid services, changes to contracts, billing, roaming charges, unlocking, loss, theft and repair of devices, contract cancellation and extension, and disconnection. [28] [ 41 ] After new consultations in 2017, the Code was clarified and amended by the CRTC. [29] 5.

PROVINCIAL LEGISLATIVE INTERVENTION [ 42 ] The provisions of the CPA that are the subject of the present dispute – and form the basis of the penal proceedings instituted against the Defendant – came into force about four years before the CRTC adopted The Wireless Code .

These provincial legislative provisions were adopted at a time when the CRTC refrained from regulating this specific aspect of telecommunications because of the obligation of forbearance set out by the Parliament of Canada. [ 43 ] Although the 2009 amendments are drafted in broad terms, the evidence adduced at the hearing establishes that the provincial legislative initiative was especially inspired by the objective of having a tighter framework for the wireless telephone and telecommunications sector specifically in order to better protect consumers. [ 44 ] To properly grasp the provincial legislature’s intention, it is necessary to trace the history of the impugned provisions by examining the origins of the CPA . 5.1.

Quebec consumer law [ 45 ] Consumer law comprises measures of public order that have as their main objective to restore the contractual balance between merchants and consumers by prohibiting certain business practices deemed fraudulent and by governing certain aspects of their contractual relations. [30] [ 46 ] Historically, Quebec consumer law developed essentially around two successive consumer protection statutes, adopted in 1971 and 1978 respectively, which were later completed by certain provisions of public order provided in the Civil Code of Québec . [31] [ 47 ] Initially, telecommunications contracts were specifically excluded from the scope of application of the CPA.

Section 5 of the CPA of 1978 stipulated the following in this regard: 5. The following are exempt from the application of the title on contracts regarding goods and services and the title on trust accounts: (

a) insurance and annuity contracts, except credit contracts entered into for the payment of insurance premiums; (

b) contracts of sale of electricity or gas by a distributor within the meaning of the Act respecting the Régie de l’énergie (Revised statutes, 1964,

chapter 87), by Hydro-Québec established by the Hydro-Québec Act (Revised statutes, 1964,

chapter 86), by a municipality or by a cooperative established under the Rural Electrification Act (1945,

chapter 48); (

c) contracts of public services made under an authorization of the Régie des services publics. [ 48 ] This exclusionary rule was carried forward in 1988 when the Régie des télécommunications replaced the Régie des services publics. On this occasion,

section 5(

c) of the CPA was amended as follows: 5. The following are exempt from the application of the title on contracts regarding goods and services and the title on trust accounts: … (

c) contracts regarding any telecommunications service supplied by an operating company within the meaning of

section 2 of the Act respecting the Régie des télécommunications (chapter R-8.01 ). [ 49 ] This legislative choice was intended to prevent duplication. Since local telecommunications common carriers were already subject to the supervisory authority of specialized agencies, [32] the legislature determined that the CPA would not apply to contracts of that nature. [ 50 ] The purpose was to avoid a multiplicity of regulatory regimes by making these contracts subject to a single regulatory entity. This exclusion also demonstrated a resolve to assign supervision of this type of contract to an agency possessing the necessary expertise

to take into account the specificities inherent in this industry. [ 51 ] As of its creation, the Régie des télécommunications was given the power to determine terms, conditions and rates for the telecommunications services under its jurisdiction.

At that time, contracts of this type were not subject to the CPA . [ 52 ] The debate surrounding the setting up of the Régie shows that the provincial legislature wanted to govern so-called “local” telecommunications common carriers so as to affirm and further consolidate Quebec’s [ translation ] “jurisdictional position” in this industry. [33] [ 53 ] However, not long after the Régie des télécommunications was set up, the Supreme Court rendered two leading cases which had the effect of curbing this resolve by very significantly limiting the number of telecommunications common carriers that could be considered “local” as far as the constitution was concerned. [ 54 ] In 1989, in the AGT decision, [34] supra, the Court made an Alberta telephone company subject to the jurisdiction of the CRTC by finding that it was an interprovincial undertaking and not a local one. [ 55 ] Then, four years later, in Téléphone Guèvremont , [35] supra, the Court declared that the decisions of the Régie des télécommunications du Québec could not be set up against the telephone company in question because it was an interprovincial undertaking for constitutional purposes. [ 56 ] It was in the wake of these two decisions, and more specifically Téléphone Guèvremont , that the provincial legislature decided to abolish the Régie des télécommunications [36] which no longer had a real raison d’être.

In December 1997, before the National Assembly’s Committee on Public Finances, Minister Jacques Léonard explained this decision in the following manner: [ translation ] We are changing ministries, Mr. Speaker, because this is about the Act respecting the Régie des télécommunications , which has been repealed. And so, this Régie is now inoperative, in respect of the mandate it was given by this Act, further to a judgment of the Supreme Court of Canada, which denies Quebec the right to govern telecommunications. This was a sad day for Quebec, which lost things it thought it had .

While this Régie did not exist for long, it had many hopes and aspirations, but very few achievements, when all is said and done. And now it is inoperative because of this Supreme Court judgment . The remaining mandates of the Régie specified in different statutes do not justify maintaining this agency and will be given, as appropriate, to the Régie de l’énergie, as we will see in

section II of the bill. [37] [Emphasis added.] [ 57 ] After the abolition of the Régie, the provincial legislature continued to exclude telecommunications contracts from the application of the CPA. At the time that the Régie was abolished, in 1997,

section 5(

c) of the CPA was amended to read as follows: 5. The following are exempt from the application of the title on contracts regarding goods and services and the title on trust accounts: … (

c) contracts regarding any telecommunications service supplied by an operating company. [ 58 ] This provision remained unchanged for almost a decade. 5.2.

Legislative amendment of 2006 [ 59 ] The process of more tightly regulating the wireless telephone sector was set in motion in 2006 as part of various amendments aimed at modernizing the CPA. [ 60 ] On the occasion of the enactment of certain measures related to the growing phenomenon of online shopping and distance contracts, the provincial legislature decided to repeal the exclusion for telecommunications contracts. [38] [ 61 ] During the initial presentation of the bill in the National Assembly, in November 2006, Minister of Justice Yvon Marcoux said: [ translation ] … There are also consequential provisions because of an amendment to the Act respecting the Régie des télécommunications in 1997.

Therefore, there should have been a consequential amendment at that time . And the change that was made does not include any change to the Office de la protection du consommateur’s ability to intervene in contracts and business practices, especially with regard to cellphones, and in that regard, it was therefore not necessary to amend the Act, as the Office already has powers regarding contracts.

Also, with regard to cellphones, the Office de la protection du consommateur has announced that it would be setting up, in early 2007, a round table of carriers operating in that field and consumer associations to identify problems and relevant solutions. [39] [Emphasis added.] [ 62 ] Although this amendment was depicted as a simple “consequential amendment”, it is clear that it constituted a major and very important shift by the provincial legislature. This amendment had a very significant effect: for the first time in history,

telecommunications contracts became subject to Title I of the CPA . [ 63 ] On December 14, 2006, Minister of Justice Yvon Marcoux made the following comments at the final passage of the Act: [ translation ] Mr. Speaker, another change that we are making to the Consumer Protection Act : we have repealed what is called

section 5(

c) of the Act, which has become obsolete because in 1997 the Act respecting the Régie des télécommunications was repealed . S ection 5(

c) remained in the Consumer Protection Act and resulted in some confusion for telecommunications common carriers regarding the application of certain provisions of the Consumer Protection Act . By repealing

section 5(c), we resolve any ambiguity about the Office de la protection du consommateur’s ability to intervene in the field of telecommunications, particularly concerning cellphones .

And I would just like to mention that over the past year the Office received many requests for information and support as well as complaints concerning telecommunications, mainly about contracts for the rental and use of cellphones. [40] [Emphasis added.] [ 64 ] These comments reveal the legislature’s explicit resolve to make the content of telecommunications contracts subject to provincial legislation, in spite of the rulings in AGT and Téléphone Guèvremont , supra. 5.3.

Background of the legislative amendments of 2009 [ 65 ] The process of more tightly regulating the telecommunications sector was stepped up and accelerated in the months following this legislative amendment. [ 66 ] In its annual report tabled in the National Assembly for the years 2006-2007, the OPC pointed out that the 2006 amendment eliminated [ translation ] “the exclusion of telecommunications services from the application of the Act”. [41] [ 67 ] In its 2007-2008 annual report, the OPC mentioned the work of a round table in preparing a list of current problems in the cellphone sector; [42] the OPC mentioned that in fall 2007, the telecommunications common carriers had refused to subscribe to a set of rules of conduct through a voluntary commitment; and the OPC confirmed that it had undertaken the preparation of amendments to the CPA in order to [ translation ] “correct the problems identified”. [ 68 ] Finally, in the 2008-2009 annual report, the OPC describes future legislative amendments: [ translation ] Proposed amendments to the Consumer Protection Act resulting from these consultations were presented by the Office to the Minister of Justice.

These proposals concern the introduction of a specific regime aimed at creating a better framework for distance service contracts, including telecommunications contracts, such as for wireless (cellular) telephone services. [43] [Emphasis added.] [ 69 ] Bill 60 was tabled in the National Assembly by Minister of Justice Kathleen Weil on June 16, 2009. At a press conference held that day, the Minister pointed out that the bill was intended to modernize the CPA.

Appearing together with the President of the OPC at the time, the Minister outlined the government’s objective in modernizing the Act in the following words: [ translation ] … The legislative amendments we are proposing seek to ensure that consumers are adequately protected, particularly with distance contracts involving sequential performance. In this manner, we are specifically targeting cellphone, pay TV and Internet services . In the past few years, the telecommunications industry has seen growth in the number of complaints from consumers.

This explains why telecommunications services were the second-largest source of complaints at the Office de la protection du consommateur, after automobile sales and repair. Furthermore, we are concerned about young consumers, who often buy these technologies without a real understanding of the costs involved in using them and the charges incurred for cancellation that are provided in the contract. The proposed measures therefore seek to govern contractual relations in this expanding industry .

They deal with the information that carriers must disclose in contracts, the prohibition of unfair clauses, rules governing the cancellation of these contracts and the penalty to be paid by consumers in the event of cancellation on their part .

Based on the provisions of the Civil Code of Québec , the proposed measures adapt the Act to the needs of consumers who use these services in an environment that is both complex and changing, in terms of both technology and business practices . … [44] [Emphasis added.] [ 70 ] At this press conference, the Minister justified the measures by emphasizing the many complaints that the OPC had received about the telecommunications industry.

She pointed out that Quebec was the very first province to legislate in this area under its jurisdiction over property and civil rights provided in the Constitution. [ 71 ] When questioned about a possible constitutional issue, the Minister said she was of the opinion that some precedents affirmed the right of the provinces to legislate in this manner. [ 72 ] In the months that followed the press conference, Bill 60 followed the normal process of being enacted into law.

During the debates and the detailed study of the bill, the Minister, the OPC representatives, and the various participants discussed the different amendments proposed by referring almost exclusively to examples and situations from the telecommunications industry. [ 73 ] Even though other industries were sometimes mentioned, the telecommunications industry was clearly central to the discussions.

Although the CRTC’s jurisdiction in this matter, or the rulings in AGT and Téléphone Guèvremont , supra , were not referred to, it seems that the conditions of service for telecommunications services were a focus of concern and debate at the National Assembly. This is clear from the extrinsic evidence adduced at the hearing. [45]

5.4. The new CPA provisions [ 74 ] The CPA amendments were given royal assent [46] on December 4, 2009, and came into force and effect on June 30, 2010. They introduced various provisions, including those that are the subject of the present dispute and are all integrated under Title I of the Act, which is entitled “Contracts Regarding Goods and Services”. Essentially, these measures may be divided into three categories. 5.4.1. Sections 11.2 to 11.4 of the CPA [ 75 ] These sections were added to

Chapter I (General Provisions) of Title I (Contracts Regarding Goods and Services) of the Act. They prohibit certain contractual stipulations regarding the unilateral amendment (s. 1.2) to or the unilateral cancellation (s. 11.3) of a contract. These prohibitions are drafted 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. 11.3. 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. 5.4.2.

Section 13 of the CPA [ 76 ] This

section is also part of

Chapter I (General Provisions) of Title I (Contracts Regarding Goods and Services) of the Act. It prohibits contractual stipulations requiring the consumer, upon the non-performance of his obligation, to pay a stipulated fixed amount of charges, penalties or damages: 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. [ 77 ] In the pre-2010 version, this

section read as follows: 13. Any stipulation requiring the consumer, upon the non-performance of his obligation, to pay costs other than the interest accrued, is prohibited. This

section does not apply to a contract of credit. 5.4.3. Sections 214.2, 214.7 and 214.8 of the CPA [ 78 ] These three sections form an integral part of an entirely new Division entitled “Contracts Involving Sequential Performance for a Service Provided at a Distance” which was added to

Chapter III (Provisions Relating to Certain Contracts) of Title I (Contracts Regarding Goods and Services) of the Act. This Division consists of sections 214.1 to 214.11. [ 79 ] The sections disputed in the present case concern information that must be contained in this type of contract (s. 214.2) and the cancellation indemnity (ss. 214.7 and 214.8). These sections read as follows: DIVISION VII CONTRACTS INVOLVING SEQUENTIAL PERFORMANCE FOR A SERVICE PROVIDED AT A DISTANCE 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 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; (

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. … 214.7. 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. 214.8.

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. [ 80 ] It should be noted that the new legislation does not include the definition of the terms “contracts involving sequential performance for a service provided at a distance” within the meaning of the CPA. 6. INVESTIGATION BY THE OFFICE DE PROTECTION DU CONSOMMATEUR [ 81 ] The investigation which led to the present dispute was launched by the OPC shortly after these new legislative provisions came into force.

The aim of this investigation was to determine whether the contracts of the main telecommunications undertakings operating in Quebec were compliant with these new measures.

[82] After having analyzed certain contracts between the Defendant and Quebec consumers, the OPC submitted an investigationreport recommending that the Director of Criminal and Penal Prosecutions institute proceedings in connection with certain stipulationsallegedly prohibited by the Act. [83] At the outset, the penal proceedings concerned 37 separate contracts. The Prosecutor found a total of 364 offences. During thetrial, the Prosecutor re-weighed its evidence and asked the Court to release or acquit the Defendant on the counts relating to 25 of these 37 contracts.

At the present stage of the proceedings, the case is therefore limited to the clauses of the 12 remaining contracts.[47] [84] The Prosecutor argues that these 12 contracts contain stipulations prohibited by the CPA. He alleges that certain clauses violatethe new sections 11.2, 11.3, 13, 214.2 and 214.7 of the Act. [85] The Defendant denies all these contraventions and argues that the clauses, as they stand, do not contravene these provisions,which it claims cannot in any case be sanctioned by penal proceedings.

The Defendant also differentiates fixed-term contracts fromindeterminate-term contracts and maintains that the Prosecutor errs in his characterization and

interpretation of the contractual clauses. [86] It contends that the Prosecutor and the OPC are wrong in arguing that the networks, numbers, facilities, coverage area androaming charges are essential elements of the contracts. It argues that the termination clauses are consistent with CPA requirements andthat certain services mentioned in the contracts were offered free of charge, excluding them as a result from the scope of the CPA. [87] In any event, the Defendant argues that the OPC’s

interpretation significantly obstructs the provision of telecommunicationsservices. It pleads that the CRTC should regulate this essential and major aspect of this ever-changing industry. It maintains that thefederal legislation is a comprehensive code built on multiple factors that cannot be directly or indirectly obstructed by the provinciallegislature based on incomplete considerations. [88] At trial, the 12 consumers explained the nature and circumstances surrounding the signing of these contracts.

None of themclaimed to have been prejudiced in any manner whatsoever in their contractual relationship with the Defendant. Furthermore, it is notdisputed that the Defendant entered into these agreements for purposes of providing one or more telecommunications services. Theexistence, content and wording of the contractual clauses are not at issue. [89] First and foremost, the debate concerns whether or not these new legislative measures apply to the Defendant with respect tothe division of powers. In addition, the dispute concerns the scope and extent of these measures in connection with the

interpretation ofthe aforementioned contractual clauses. 7. LIMITED JURISDICTIONAL POWER [90] It is well established that the Court of Quebec has subject-matter jurisdiction. Contrary to the Superior Court, the Court ofQuebec does not possess an inherent jurisdiction or power. In the present case, the Court is conducting a trial in penal matters underpowers conferred by the Code of penal procedure read in conjunction with the CPA. The ambit of its jurisdiction therefore directlydepends on the scope of these laws. [91] In accordance with the principles set out by the Supreme Court in R. v.

Lloyd,[48] the Court does not have the jurisdictionalpower to formally declare that a law is invalid under

section 52 of the Constitutional Act, 1982. It may, however, rule on theconstitutionality of a legislative provision incidentally to its jurisdiction in penal matters. If it determines that a provision is invalid,inapplicable or inoperative under the applicable constitutional doctrines, the Court may then refuse to apply this provision in the casebefore it. [92] In paragraphs 15 and 19 of R. v. Lloyd, the Supreme Court stated as follows on the matter: [15] The law on this matter is clear.

Provincial court judges are not empowered to make formal declarations that a law is of no force oreffect under s. 52(1) of the Constitution Act, 1982; only superior court judges of inherent jurisdiction and courts with statutory authoritypossess this power. However, provincial court judges do have the power to determine the constitutionality of a law where it is properlybefore them. As this Court stated in R. v. Big M Drug Mart Ltd., (SCC), [1985] 1 S.C.R. 295, at p. 316, “it has alwaysbeen open to provincial courts to declare legislation invalid in criminal cases.

No one may be convicted of an offence under an invalidstatute.” … [19] The effect of a finding by a provincial court judge that a law does not conform to the Constitution is to permit the judge to refuse toapply it in the case at bar. The finding does not render the law of no force or effect under s. 52(1) of the Constitution Act, 1982.

It is opento provincial court judges in subsequent cases to decline to apply the law, for reasons already given or for their own; however, the lawremains in full force or effect, absent a formal declaration of invalidity by a court of inherent jurisdiction. [Emphasis added.] [93] Even though Lloyd involves a challenge based on an inconsistency with the Charter, it stands to reason that the rule defined bythe Supreme Court also applies to situations where the constitutional argument is based on the doctrines and principles relating to thedivision of powers, as in this case. 8.

OPPORTUNENESS OF RULING ON THE CONSTITUTIONAL ISSUE [94] In this case, it would be in the best interests of the administration of justice to determine whether the new CPA provisions areconstitutionally applicable to the Defendant. This question has been debated back and forth, and a very substantial amount of evidencehas been adduced.

Furthermore, the record includes all the factual and legal bases allowing a ruling to be made on this major issue. [95] Bearing in mind the specific, distinctive features of these penal proceedings, the Court considers that it would not beappropriate to interpret the CPA provisions without first ensuring that they are constitutionally applicable to the Defendant. Such anapproach in this case would be contrary to the proper administration of justice.

[ 96 ] Although the courts may, in certain cases, refrain from ruling on issues that are not necessary to decide in order to settle a dispute, [49] it is not the case here. The present constitutional challenge, which is based on a breach of the rules of the division of powers, is likely to determine the outcome of the present dispute, which is not necessarily the case for other grounds. In light of all the circumstances, it is therefore appropriate and necessary to decide on this issue. 9.

THE CONSTITUTIONAL PRINCIPLES [ 97 ] When the constitutionality of a legislative provision is challenged on the basis of the division of powers, the courts may resort to various applicable constitutional doctrines to determine whether this challenge should be allowed. [ 98 ] It is common ground that the measures adopted by Parliament and the legislatures are presumed to be constitutionally valid.

It follows that the burden is on the party challenging the measure to prove that is ultra vires, inapplicable or inoperative. [50] [ 99 ] In their analysis of the constitutional validity of legislative or regulatory measures relating to the division of power, the courts must take into account the principle of co-operative federalism, which recognizes that the overlapping of federal and provincial measures is sometimes unavoidable.

However, as the majority of the Supreme Court recalled in Rogers , supra, at paragraph 39: [39] However, although co-operative federalism has become a principle that the courts have invoked to provide flexibility for the

interpretation and application of the constitutional doctrines relating to the division of powers, such as federal paramountcy and interjurisdictional immunity, it can neither override nor modify the division of powers itself . It cannot be seen as imposing limits on the valid exercise of legislative authority: Quebec (At​torney General) v. Canada (Attorney General) , at paras. 17-19. Nor can it support a finding that an otherwise unconstitutional law is valid . This Court commented as follows in Reference re Securities Act , at para. 62 : In

summary, notwithstanding the Court’s promotion of cooperative and flexible federalism, the constitutional boundaries that underlie the division of powers must be respected. The “dominant tide” of flexible federalism, however strong its pull may be, cannot sweep designated powers out to sea, nor erode the constitutional balance inherent in the Canadian federal state . [ 100 ] The study of the constitutionality of a measure focuses on the authority for adopting and applying it rather than on its wisdom or optimality.

In Reference Re Securities Act of 2011, the Supreme Court recalls in paragraph 90 that: [90] … Efficaciousness is not a relevant considera​tion in a division of powers analysis. … The courts do not have the power to declare legislation constitutional simply because they conclude that it may be the best option from the point of view of policy . The test is not which jurisdiction — federal or provincial — is thought to be best placed to legislate regarding the matter in question.

The inquiry into constitutional powers under ss. 91 and 92 of the Constitution Act, 1867 focuses on legislative competence, not policy. [51] [Emphasis added.] [ 101 ] The search for a certain degree of consistency and predictability in applying laws is not completely unknown to the analysis of some constitutional doctrines. At paragraph 45 in Consolidated Fastfrate Inc. c.

Western Canada Council of Teamsters , the Supreme Court emphasizes that: [45] Any hope of gleaning from the jurisprudence a definitive rule that would resolve all jurisdictional questions concerning transportation works and undertakings is surely naive. While certainty may be too lofty an ambition, a degree of consistency and predictability is still preferable and, in my opinion, attainable .

Interpretive consistency in the s. 92(10) context is important both to preserve the federal-provincial balance and to allow regulators to know the extent of their jurisdiction and parties to reasonably predict the jurisdiction under which they fall. As Binnie and LeBel JJ. noted in their discussion of federalism in Canadian Western Bank , “a certain degree of predictability . . . is essential” (para. 23). [52] [Emphasis added] [ 102 ] In this case, the Defendant challenges the constitutionality of the new CPA provisions based on three separate constitutional doctrines.

The Defendant argues that these provisions are invalid (under the pith and substance doctrine), inapplicable with regard to it (under the doctrine of interjurisdictional immunity), and inoperative with regard to it (under the doctrine of federal paramountcy). [ 103 ] At paragraph 35 in Rogers , supra , the majority explains the differences that characterize the three constitutional doctrines concerning their respective effects: [35] A court must conduct the pith and substance analysis before inquiring into the application of the doctrines of interjurisdictional immunity and fed​eral paramountcy, both of which are predicated on the constitutional validity of the impugned statute or measure.

If the doctrine of interjurisdictional immunity applies, the impugned measure remains valid but has no application with regard to the core of the power of the other level of government that it impairs: Canada (Attorney General) v. PHS Com​munity Services Society , 2011 SCC 44 , [2011] 3 S.C.R. 134 , at para. 58 . Similarly, where the doc​trine of federal paramountcy applies, the impugned provincial measure is rendered inoperative to the extent of its incompatibility with the federal legisla​tion: Canadian Western Bank , at para. 69 ; Law So​ciety of British Columbia v.

Mangat , 2001 SCC 67 , [2001] 3 S.C.R. 113 , at para. 74 . [53] [Emphasis added.] [ 104 ] Before making a more in-depth analysis of this case, it is appropriate to recall the circumstances that may give rise to the application of any of these constitutional doctrines. 9.1. The pith and substance doctrine

[105] To determine whether a legislative measure is ultra vires the powers of the level that enacted it, the Supreme Court teaches usthat a two-step analysis must be carried out: The first step is to determine the “pith and substance” or essential character of the law.

The second step is to classify that essentialcharacter by reference to the heads of power under the Constitution Act, 1867 in order to determine whether the law comes within thejurisdiction of the enacting government.[54] [106] If the determination of the pith and substance of a measure shows that it falls within the jurisdiction of the enacting legislativebranch, it will be declared intra vires.

Conversely, if it concerns a matter that is outside the jurisdiction of this legislative branch, it willbe considered invalid or ultra vires. [107] The pith and substance of a measure is determined by identifying its subject matter, bearing in mind its purpose and itseffects.[55] [108] In order to determine the purpose of an impugned measure, “both intrinsic evidence, such as purpose clauses, or extrinsicevidence, such as Hansard or the minutes of parliamentary commit​tees” must be considered.[56] As for the effects of the impugnedmeasure, the legal effect and the practical consequences of its application must be taken into account.[57] [109] When the constitutional challenge is limited to a single part of a larger legislative regime, the Supreme Court teaches in Quebec(Attorney General) v.

Canada (Attorney General) that: [30] Where the challenge concerns a particular provision which forms part of a larger scheme, the pith and substance analysis beginswith the challenged provision: Kitkatla Band, at para. 56. However, the “matter” of the provision must be considered in the context ofthe larger scheme, as its relationship to that scheme may be an important consideration in determining its pith and substance: Kirkbi AGv.

Ritvik Holdings Inc., 2005 SCC 65, [2005] 3 R.S.C. 302, at paras. 20-21.[58] [110] However, in paragraph 31 of this decision, the Supreme Court recalls that the court must be careful not to endorse a“colourable” statute: [31] Courts must be careful not to endorse a “colourable” statute, that is, one that in form appears to relate to a matter within thelegislative competence of the enacting order of government, but in substance addresses a matter falling outside its competence: see Hogg,at p. 15-19; Reference re Upper Churchill Water Rights Reversion Act, (SCC), [1984] 1 S.C.R. 297.

The colourabilitydoctrine simply means that “form is not controlling in the determination of essential character”: A. S. Abel, “The Neglected Logic of 91and 92” (1969), 19 U.T.L.J. 487, at p. 494; Hogg, at p. 15-20. Courts are, for good reasons, reluctant to find legislation to be colourable:H. Brun, G. Tremblay and E. Brouillet, Droit constitutionnel (6th ed. 2014), at p. 464.

There is a danger that any broader application ofthe colourability doctrine may lead the courts to exceed their role of determining the constitutionality of legislation and, instead, expressdisapproval of either the policy of the statute or the means by which the legislation seeks to carry it out: Hogg, at p. 15-20; see alsoWard, at para. 26. [Emphasis added.] [111] In some situations, a measure may affect a matter that can be connected equally to two separate fields of jurisdiction.

In suchcases, the “double aspect" concept may be considered by the courts in the pith and substance analysis: [66] Canadian constitutional law has long rec​ognized that the same subject or “matter” may possess both federal and provincial aspects.This means that a federal law may govern a matter from one perspective and a provincial law from another. The federal law pursues anobjective that in pith and substance falls within Parliament’s jurisdic​tion, while the provincial law pursues a different objective that fallswithin provincial jurisdiction … .

This con​cept, known as the double aspect doctrine, allows for the concurrent application of bothfederal and provincial legislation, but it does not create con​current jurisdiction over a matter … .[59][Emphasis added.] [112] The pith and substance of a measure will always depend on the set of circumstances.

In Rogers, supra, the majority of theSupreme Court stated that the measure at issue was ultra vires and dismissed the argument based on the “double aspect” doctrine, whichwas raised by the municipality: [51] As we explained above, in the case at bar, the pith and substance of the notice of a reserve is the choice of the location ofradiocommunication infrastructure.

We cannot see in this an equivalence between the federal aspect, that is, the power overradiocommunication, and the provincial aspects, namely the protection of the health and well-being of residents living nearby and theharmonious de​velopment of the municipality’s territory. [52] Furthermore, a finding that the siting of ra​diocommunication infrastructure has a double aspect would imply that both the federaland pro​vincial governments can legislate in this regard, which would contradict the precedent established by the Privy Council in In reRegulation and Con​trol of Radio Communication in Canada to the ef​fect that the federal jurisdiction over the siting of such infrastructureis exclusive. [53] For these reasons, we are of the opinion that the notice of a reserve is ultra vires, because it con​stitutes an exercise of the powerover radiocommu​nication, which is an exclusive federal power.[60] [Emphasis added.]

[ 113 ] In Videotron c. Ville de Gatineau , [61] the Superior Court ruled along the same lines by finding that the pith and substance of some municipal by-laws fell within Parliament’s power over interprovincial telecommunications rather than the provincial legislatures’ jurisdiction over property and civil rights. 9.2.

The doctrine of interjurisdictional immunity [ 114 ] The doctrine of interjurisdictional immunity protects a “minimum content” or “core" of a legislative head of power from being impaired by the other level of government. [62] [ 115 ] In order to determine whether a measure adopted by one level of government is inapplicable to an undertaking reporting to the other level of government, the Supreme Court states that a two-step analysis must be carried out: [59] … Its application involves two steps .

The first is to determine whether a statute enacted or measure adopted by a government at one level trenches on the “core” of a power of the other level of government.

If it does, the second step is to determine whether the effect of the statute or mea​sure on the protected power is sufficiently serious to trigger the application of the doctrine: COPA , at para. 27. [63] [Emphasis added.] [ 116 ] In paragraphs 60 and 61 of Rogers , supra, the Supreme Court points out that this doctrine must be applied with restraint and that it is generally reserved for situations that are already covered by precedent: [60] In Canadian Western Bank , the Court explained that the doctrine of interjurisdictional immunity must be applied with restraint, since a broad application of interjurisdictional immunity appears to be “inconsistent . . . with the flexible federalism that the constitutional doctrines of pith and substance, double aspect and federal paramountcy are designed to promote”: para. 42; see also para. 67. [61] This is why the application of the doctrine of interjurisdictional immunity is generally reserved for situations that are already covered by precedent.

The Court explained this as follows in Canadian Western Bank , at paras. 77-78 : As we have already noted, interjurisdictional immunity is of limited application and should in general be reserved for situations already covered by precedent.

This means, in practice, that it will be largely reserved for those heads of power that deal with federal things, persons or undertakings, or where in the past its application has been considered absolutely indispensable or necessary to enable Parliament or a provincial legislature to achieve the purpose for which exclusive legislative jurisdiction was conferred, as discerned from the constitutional division of powers as a whole, or what is absolutely indispensable or necessary to enable an undertaking to carry out its mandate in what makes it specifically of federal (or provincial) jurisdiction. . . . [ 117 ] Also in Rogers , supra, at paragraph 70, the Court summarizes the principles regarding the degree of impairment required to find a statute inapplicable: [70] In Canadian Western Bank , the Court held that it is not enough for the provincial legislation simply to “affect” that which makes a federal subject or object of rights specifically of federal jurisdiction: “The difference between ‘affects’ and ‘impairs’ is that the former does not imply any adverse consequence whereas the latter does” (para. 48).

In that same paragraph, the Court explained that “[i]t is when the adverse impact of a law adopted by one level of government increases in severity from ‘affecting’ to ‘impairing’ (without necessarily ‘sterilizing’ or ‘paralyzing’)” that the doctrine of interjurisdictional immunity may be applied.

This is why “impairment” suggests a serious or significant intrusion on the core of the power, that is, “a midpoint between sterilization and mere effects”: COPA, at para. 44. [64] [ 118 ] As we will see below, the courts have in the past applied this constitutional doctrine in the telecommunications sphere to avoid interference with the essential and vital elements of federal jurisdiction. This was, in fact, the case in Rogers , supra. 9.3.

The doctrine of federal paramountcy [ 119 ] The doctrine of federal paramountcy allows a provincial statute to be declared inoperative insofar as it creates a conflict with a federal statute. [ 120 ] At paragraph 18, in Alberta (Attorney General) v.

Moloney , the Supreme Court states that a conflict may arise in one of two situations: [18] A conflict is said to arise in one of two situations, which form the two branches of the paramountcy test: (1) there is an operational conflict because it is impossible to comply with both laws, or (2) although it is possible to comply with both laws, the operation of the provincial law frustrates the purpose of the federal enactment . [65] [ 121 ] In paragraphs 28 and 29 of this decision, the Court specifies the following concerning the framework for this constitutional doctrine to apply: [28] … In the assessment of such inconsistency for the purposes of paramountcy, a provincial intention to interfere with the federal jurisdiction is neither necessary nor sufficient . … The focus of the paramountcy analysis is instead on the effect of the provincial law, rather than its purpose … [29] In sum, if the operation of the provincial law has the effect of making it impossible to comply with the federal law, or if it is technically possible to comply with both laws, but the operation of the provincial law still has the effect of frustrating Par​liament’s purpose, there is a conflict.

Such a conflict results in the provincial law being inoperative, but only to the extent of the conflict with the federal law : Western Bank , at para. 69; Rothmans , at para. 11; Mangat , at para. 74 . In practice, this means that the provincial law

remains valid, but will be read down so as to not conflict with the federal law, though only for as long as the conflict exists: Husky Oil , at para. 81; E. Colvin, “ Constitutional Law — Paramountcy — Duplication and Express Contradiction — Multiple Access Ltd. v. McCutcheon” (1983), 17 U.B.C. L.

Rev. 347, p. 348. [Emphasis added.] [ 122 ] According to the Court, there will be a conflict under the second part of the test if the effect of the provincial statute is to prevent, circumvent or frustrate the achievement of the purpose of the federal law. [66] [ 123 ] Since these principles have been established, let us now analyze how they apply to this case. 10. ANALYSIS AND APPLICATION [ 124 ] It has been established that the federal Parliament has the exclusive authority to enact interprovincial telecommunications legislation. This results from sections 92(10) (

a) and 91(29) of The Constitution Act, 1867 , and the case law which has interpreted these provisions. [ 125 ] Since the earliest days of Confederation, Parliament has exercised this exclusive legislative jurisdiction by enacting laws whose purpose and effect has been to regulate this matter.

Today, federal parliamentarians have chosen to occupy this area of jurisdiction by implementing a comprehensive national regulatory regime that takes into account the specific situation of an ever-changing industry, which recognizes the essential nature of telecommunications for Canadians, and defines Canadian telecommunications policy objectives. [ 126 ] By establishing this unique legislative regime, federal parliamentarians considered it appropriate to confer very broad jurisdiction on a specialized agency, the CRTC.

They expressly granted it vast powers, including the very specific power of regulating the rates and conditions of service for telecommunications services. They defined multiple factors to be considered by the CRTC in the exercise of this authority.

In addition, they explicitly chose to subject the exercise of this authority to a power and duty of forbearance. [ 127 ] This area of jurisdiction is fully and entirely occupied by the federal government, which regulates all its aspects, ranging from the issuance of operating permits and licences to the location of telecommunications towers, and including the delivery, rates and the conditions of service for services. [ 128 ] Historically, the Supreme Court has protected the jurisdiction of Parliament over telecommunications by declaring certain provincial measures invalid, inapplicable or inoperative under the aforementioned constitutional doctrines.

Apart from the decisions in AGT , Téléphone Guèvremont and Rogers , which have already been discussed and which we will return to later, it should be noted that the courts have ruled: - That provincial measures restricting the construction, location and maintenance of telephone networks were not applicable to telecommunications undertakings; [67] - That a provincial statute on minimum wage was not applicable to Bell Canada; [68] and - That a provincial statute regulating workplace health and safety conditions was inapplicable to Bell Canada. [69] [ 129 ] The context in which the new provisions were enacted was described earlier.

As of 2006, with a view to protecting consumers, the provincial legislature took measures to further regulate the conditions of service for telecommunications services. [ 130 ] While the CRTC legally refrained from dealing with such matters given the unique specificities of its absolute jurisdiction, the provincial legislature decided to enact its own contractual requirements and standards with a view to applying them to the telecommunications industry. [ 131 ] Even though the provincial provisions were drafted in broad terms, the legislative history and extrinsic evidence show that they were enacted with that in mind and their direct effect was to regulate this industry, which was already closely regulated by the federal government based on rules carefully adapted to the uniqueness of this industry. [ 132 ] By adopting these measures, the provincial legislature failed to consider the factors and requirements imposed by the federal parliamentarians on the CRTC because of the special characteristics of this industry. [ 133 ] It is clear that the provincial measures have the effect of dictating conditions of service for telecommunications, from a different and much narrower perspective than that of the specialized agency with this responsibility. [ 134 ] It follows that the province directly governs the content of the federal power over telecommunications. 10.1.

The pith and substance doctrine [ 135 ] Based on these elements, the Defendant contends that the new CPA provisions are ultra vires the powers of the provincial legislature. [ 136 ] If several arguments seem to advocate for such a conclusion, others could hypothetically convince a judge that the impugned provisions, which may be applied to other industries, and which form part of a general regime, are still intra vires in light of the double aspect doctrine within a context of cooperative federalism. [ 137 ] Given that the Court does not in any case have the authority to declare the constitutional invalidity of these provisions under

section 52 of the Constitution Act, 1982 , and because of the result of the analysis of the other two constitutional doctrines, the Court

finds that it is not necessary to rule on the validity of these measures under the pith and substance doctrine. [ 138 ] In this particular context, the Court refrains from deciding on this issue and shows judicial deference in this regard. 10.2.

Doctrine of interjurisdictional immunity [ 139 ] The Defendant has shown that the doctrine of interjurisdictional immunity applies here. [ 140 ] First, it has been established that the CPA provisions trench on the core of the federal power over telecommunications. [ 141 ] The determination of the conditions of service for telecommunications services is a crucial and fundamental aspect in the exercise of the federal power.

In the eyes of the Court, it is part of its core and is inseparable from the federal government’s responsibility to ensure the orderly development and efficient operation of telecommunication based on Canadian telecommunications policy objectives. [ 142 ] In Rogers , supra, the Supreme Court recognized that the location, construction and maintenance of telecommunications towers are part of the core federal power. In support of its reasoning, the Court cited with approval, the following excerpt from Michael H.

Ryan, where he states that the regulation of telecommunications rates and services also forms part of the core of the federal power: I suggested that the regulation of [telecommunications service providers’] rates and services , and the location, construction and maintenance of their networks and facilities, are matters that the case law indicates are “essential and vital” or, “absolutely indispensable and necessary” to the performance of the undertakings’ federal mandate. As such, these form part of the “core” federal competence unde

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