TELUS COMMUNICATIONS INC. Applicant v. VIDÉOTRON LTÉE, 2022 FC 726

Date: 20220517 Docket: T-1335-21 Citation: 2022 FC 726 Toronto, Ontario, May 17, 2022 PRESENT: Mr. Justice Diner BETWEEN: TELUS COMMUNICATIONS INC. Applicant and VIDÉOTRON LTÉE , BELL MOBILITY INC., BRAGG COMMUNICATIONS INC., CITYWEST CABLE AND TELEPHONE CORP, COGECO CONNEXION INC., COMCENTRIC NETWORKING INC., ECOTEL INC., IRISTEL INC., LEMALU HOLDINGS LTD., 1085459 ONTARIO LTD. O/A KINGSTON ONLINE SERVICES, MULTIBOARD COMMUNICATIONS INC., 508896 ALBERTA LTD.

O/A NETAGO, NEXICOM INC., ROGERS COMMUNICATIONS CANADA INC., SASKATCHEWAN TELECOMMUNICATIONS, SOGETEL INC., STAR SOLUTIONS INTERNATIONAL INC., TBAYTEL, TERRESTAR SOLUTIONS INC., THOMAS COMMUNICATIONS LTD., VALLEY FIBER LTD., FIBRENOIRE INC. AND XPLORNET COMMUNICATIONS INC. Respondents and ATTORNEY GENERAL OF CANADA Intervener JUDGMENT AND REASONS [ 1 ] This is a judicial review of the determination, made by a delegate of the Minister of Industry [the Minister], that Vidéotron ltée [Vidéotron] was eligible to bid on set-aside spectrum in the 2021 3500 MHz spectrum auction [the Auction].

Consistent with the prescribed process, the set-aside eligibility determination [the Decision] was made on April 21, 2021 and shared with Vidéotron, but did not become public until the results of the Auction were released by the Department of Innovation, Science and Economic Development Canada [ISED] on July 29, 2021.

The spectrum in question is critical for the development of fifth generation [5G] technology standards of cellular networks for mobile phones and other technologies across Canada. [ 2 ] The Decision, which permitted Vidéotron to bid on and obtain set-aside spectrum in British Columbia, Alberta and Manitoba [together Western Canada], is now challenged by TELUS Communications Inc. [TELUS] on procedural and substantive grounds. For the reasons that follow, I find the set-aside eligibility assessment process and the Minister’s decision to have been fair and reasonable, and will dismiss the Application. I.

Background A. Statutory Framework [ 3 ] Spectrum is a limited public resource that consists of electromagnetic waves of various frequencies, which facilitate the use of communication technologies and services including mobile phones, satellites, two-way radio and broadcasting. The Minister, to whom authority is conferred by the Department of Industry Act , SC 1995, c 1 , the Radiocommunication Act , RSC 1985, c R-2 and the Radiocommunication Regulations , SOR/96-484 , is responsible for spectrum management in Canada.

Management of spectrum plays a critical role for Canada, fostering the growth of telecommunications and ensuring that radiocommunications services, from cellphones to air traffic control, are properly managed and free from interference. [ 4 ]

Section 7 of the Telecommunications Act , SC 1993, c 38 sets out the objectives of Canadian telecommunications policy, which include: rendering reliable, affordable, high quality telecommunications services accessible to Canadians in all regions of Canada; enhancing efficiency and competitiveness; stimulating research and encouraging innovation; and, fostering increased reliance on market forces (for s 7, and other statutory provisions referenced in these Reasons, see Annex A). The Canadian Radio-Television and Telecommunications Commission [CRTC], as prescribed in

Part III of the Telecommunications Act , regulates telecommunications services including the approval of rates and conditions of service. [ 5 ] Section 5(1) of the Radiocommunication Act confers broad powers on the Minister to, inter alia , issue licenses, fix and amend their terms and conditions, and to plan the allocation and use of spectrum. These licenses are critical to the operation of any mobile phone network and are issued from time to time to telecommunication service providers by way of auctions.

The bidding process for the attribution of licenses is competitive and s 5(1.4) of the Radiocommunication Act allows the Minister to prescribe rules, standards and conditions applicable to the system of competitive bidding. B. Spectrum Licenses [ 6 ] Spectrum licenses allow their holders to use specified frequencies within defined geographic areas. Service areas are divided and

further subdivided based on " “tiers.” " Tier 1 is a single national service area covering all of Canada. Tier 2 consists of 14 large service areas covering the entire country, and in some cases corresponds to an entire province. For instance, British Columbia, Alberta, and Manitoba are each distinct Tier 2 service areas. Tiers 3 and 4, by contrast, consist of smaller regional, and more localized service areas, respectively.

Tier 2 and Tier 4 service areas were relevant for the determination of eligibility to bid on set-aside spectrum in the Auction. [ 7 ] The 2021 3500 MHz Auction was the latest in a series of four spectrum auctions that have taken place since 2008. The three prior auctions took place in the decade from 2008 through 2018, namely the ASW-1 (2008), ASW-3 (2015) and 600 MGz (2018) auctions. Consistent with the objectives of the Telecommunications Act , these spectrum auctions have included " “pro-competitive measures” " , intended to enhance competition among mobile phone service providers.

The principles underlying the measures are found in Framework for Spectrum Auctions in Canada , published in 2011 by ISED (then Industry Canada). Spectrum caps, for example, impose limits on the width of spectrum a particular licensee can hold. [ 8 ] Spectrum set-asides, another pro-competitive measure, reserve a certain portion of spectrum for carriers who do not meet the definition of " “national mobile service providers” " [NMSPs]. An NMSP, by definition, holds more than 10% of the national market share.

Currently, there are three NMSPs - TELUS, Bell and Rogers. [ 9 ] The specific criteria for eligibility to bid on set-aside spectrum has varied in the 2008, 2015, 2018 and 2021 auctions. In 2008, eligibility for set-aside spectrum was reserved to new entrants, defined as those who held less than 10% of national wireless market share based on revenue. In 2015, set-aside eligibility rules were much more specific.

They varied depending on the service areas in question, and potential bidders needed to already be providing commercial mobile wireless services and demonstrate specific network coverage in each relevant service area. In 2018, eligibility requirements for set-aside spectrum related to the provision of services, but were less stringent and less detailed than in 2015. For example, while set-aside eligible bidders had to be providing commercial telecommunications service in the relevant Tier 2 service areas, there was no minimum customer threshold or level of coverage requirement.

C. 2021’s 3500 MHz Spectrum Auction [ 10 ] The 3500 MHz band of spectrum, as mentioned above, is crucial for the deployment of 5G mobile technology standards for cellular networks. 5G provides opportunities for innovative, interconnected and data intensive applications, operating at higher speeds and providing increased bandwidth than prior standards. 5G requires large amounts of spectrum in a variety of frequency bands. [ 11 ] The process leading to the 2021 Auction and the impugned set-aside eligibility assessment process began in 2019.

In June 2019, ISED announced a public Consultation on a Policy and Licensing Framework for Spectrum in the 3500 MHz Band . [ 12 ] Extensive consultations followed, involving broad participation by stakeholders across the country, including both TELUS and Vidéotron, which led ISED to make a series of policy decisions that would govern the Auction. In March 2020, ISED released the Policy and Licensing Framework for Spectrum in the 3500 MHz Band [the Framework ]. This voluminous document sets out the policy underpinning of and ground rules for the Auction.

The bidder application and qualification stage, which includes set-aside eligibility determinations (the subject of this judicial review); the bidding stage to obtain spectrum licenses; and the post-auction license renewal process, are all comprised within the Framework . [ 13 ] To promote competition for the Auction, the Framework implemented a set-aside of 50 MHz of spectrum, consisting of approximately 25% of the spectrum up for auction, to be reserved for eligible service providers (which excluded NMSPs).

The Framework referred to prior use of set-asides having contributed to growth and competiveness of regional providers. The Framework also referred to findings of the Competition Bureau citing the market power possessed by NMSPs, the high barrier to entry in certain areas, and the lower prices enjoyed by customers in areas where regional providers had established market share.

Paragraphs 36-44 of the Framework , in addition to other relevant excerpts referenced below, have been reproduced in Annex B to these Reasons. [ 14 ] Eligibility to bid on the set-aside spectrum was established in " “Decision D2” " of the Framework .

Decision D2 limited set-aside eligibility to service providers meeting the following description: Eligibility to bid on set-aside spectrum will be limited to those registered with the CRTC as facilities-based providers that are not national mobile service providers , and that are actively providing commercial telecommunications services to the general public in the relevant Tier 2 service area of interest , effective as of the date of application to participate in the 3500 MHz auction.

Services that are regulated under the Broadcasting Act will not be considered as “commercial telecommunications services” for the purposes of set-aside eligibility, however all services that are regulated under the Telecommunications Act may qualify. [Decision D2, para 64 of the Framework ; emphasis added.] [ 15 ] It is important to note that the licenses were being issued for the more localized Tier 4 service areas, but the eligibility criteria above refer to a bidder providing services anywhere in the larger Tier 2 service area.

A bidder interested in obtaining spectrum in the Tier 4 service area of Steinbach, Manitoba, for example, need only be actively providing commercial telecommunications services to the general public somewhere in the relevant Tier 2 service area of Manitoba, such as Winnipeg, to be eligible to bid on set-aside spectrum in Steinbach [ 16 ] In response to concerns raised as to how " “general public” " would be defined, the Framework clarified that it could include " “businesses, enterprises and institutions in addition to traditional ‘residential customers’, and that ‘providers who are actively offering commercial telecommunications services to any of these consumers will be considered set-aside-eligible as long as they meet the additional eligibility criteria’” " (at para 60, Framework ). [ 17 ] In addition to set-aside spectrum, the Framework also imposed non-transferability measures.

These were intended to ensure that set- aside licenses would not be transferrable to set-aside ineligible entities for at least five years of the license term, in order to strike a

balance between deterring speculation – for example, by bidders intending to simply resell instead of actually deploying licenses – and awarding spectrum to entities who were positioned to use it. [ 18 ] Potential bidders applying for set-aside eligibility would be required to demonstrate their eligibility by providing relevant documentation to ISED describing 1) the services offered in the relevant area; 2) the retail/distribution network; and, 3) how subscribers access services and the number of subscribers in the area (para 64, Framework ). [ 19 ]

Section 12.5 of the Framework outlined that ISED would review the application forms and associated documents after the closing date for submissions of applications. During this initial review, ISED would identify any errors in the forms and determine whether any additional information related to affiliates or associated entities was required. For the purposes of set-aside eligibility applications, ISED would assess eligibility to obtain licenses in Tier 4 service areas based on the relevant Tier 2 service areas of interest.

ISED could also make written requests for further information and could verify the information that was provided. Applicants who failed to comply with the written requests would be rejected. Rejected applications, including cases where a response to a request was received but found to nevertheless be deficient, would be returned to the Applicant (paras 435-440, Framework ). [ 20 ] In December 2020, ISED published responses to questions, and updates about the Auction in Responses to Clarification Questions on the Policy and Licensing Framework for Spectrum in the 3500 MHz Band the [Clarification Document].

On March 15, 2021, the Clarification Document was updated to provide the following question and response regarding set-aside eligibility: QUESTION 3.3: How does being an affiliate affect an applicant’s set-aside-eligibility? RESPONSE 3.3: An applicant may be eligible to qualify as a set-aside-eligible bidder based on the eligibility of its affiliated entities or, where an applicant is a partnership, on the eligibility of the partners who control the applicant.

As long as the applicant itself is not affiliated with or controlled by a national mobile service provider, and where one or more affiliates or controlling partners of the applicant is registered with the Canadian Radio-television and Telecommunications Commission (CRTC) as a facilities-based provider , that applicant may be qualified as set-aside-eligible to bid in all licence areas where an affiliate or controlling partner is actively providing commercial telecommunications services to the general public in the relevant Tier 2 service area , as set out in

section 6.1 of the Framework. All applicants must disclose their affiliates and, where applicable, any controlling partners of the applicant in their application form. Applicants who wish to be considered as set-aside-eligible bidders will have to indicate and explain for each licence area, if they are directly eligible or through which affiliate or controlling partner, they are eligible. [Emphasis added.] [ 21 ] ISED’s assessment of applications was a closed process, as had been the case in previous spectrum auctions.

This was to ensure the integrity of the 3500 MHz Auction, and to protect confidential information provided in the applications. The Clarification Document indicated that ISED would not release, to the public, post-auction documentation regarding where bidders applied, or the basis upon which successful applications were granted.

Response 2.11 of the Clarification Document provided: …as in past auction processes, a list of all qualified bidders, along with information related to their beneficial ownership, affiliates, and associated entities, will be made public via ISED’s website in accordance with the timelines stated … The number of eligibility points, financial deposit amounts, and eligibility status, including set-aside eligibility, will not be published .

ISED makes its rulings on applicant set-aside eligibility based upon the information provided by the applicant as assessed against the set-aside eligibility criteria in accordance with the Framework. [Emphasis added.] [ 22 ] However, in accordance with Response 2.11 above, ISED did release a list of all qualified bidders to the public, along with information about their beneficial ownership, affiliates and associated entities. D.

The 3500 MHz Auction [ 23 ] The Auction ultimately generated revenue of $8.91 billion for the Government of Canada. [ 24 ] Vidéotron applied, and was ultimately determined eligible, to be a set-aside bidder in the Tier 2 service areas in question for this judicial review, Manitoba, Alberta and British Columbia, on the basis of services provided by its affiliate, Fibrenoire Inc. [Fibrenoire].

On July 29, 2021, Vidéotron was the successful bidder for 128 set-aside licenses across 45 license areas in Western Canada. [ 25 ] On August 3, 2021, TELUS wrote to ISED questioning the set-aside eligibility findings regarding Vidéotron and requesting a complete record of the material they filed. [ 26 ] ISED responded with an August 11, 2021 letter explaining the finding that, based on a review of Vidéotron’s application materials and verification of publicly available services, Vidéotron was eligible as a set-aside bidder in accordance with the Framework and Clarification Document.

ISED also stated that in accordance with the prescribed process, it would not release Vidéotron’s documentation. [ 27 ] On August 26, 2011, TELUS commenced this application for judicial review. E. Procedural Background at the Federal Court [ 28 ] A motion for an interlocutory injunction to stay the issuance of the licenses to Vidéotron in Western Canada, brought in September

2021 by TELUS, was dismissed by Justice Grammond of this Court by Order and Reasons dated October 22, 2021 ( Telus Communications Inc. v. Vidéotron Ltée , 2021 FC 1127 [ Telus v. Vidéotron ] ). [ 29 ] The Minister proceeded to issue the licenses assigned through the 3500 MHz Auction on December 17, 2021. [ 30 ] The Attorney General of Canada [AGC] was granted leave to intervene in these proceedings, and initially did not produce a complete tribunal record due to confidentiality concerns expressed by Vidéotron. TELUS and Vidéotron each brought competing motions, for disclosure and confidentiality, respectively.

Vidéotron’s motion was dismissed by an Order of Prothonotary Tabib, dated December 6, 2021, which circumscribed the disclosure process for confidential information. Vidéotron appealed this order. [ 31 ] Ultimately, the parties resolved their disagreement on consent and, on February 3, 2022, Justice Pentney issued a protective confidentiality Order pursuant to Rules 151 and 152 of the Federal Courts Rules, SOR/98-106 . TELUS, Vidéotron and the AGC each thereafter provided a redacted public version, in addition to a confidential private version of their respective records. TELUS’ affiant, Mr.

Mulvihill, was allowed to access and provide evidence based on the full record. Vidéotron and the AGC also presented affiants, Messrs. Dennis Béland and Daniel Anderson respectively, both of whom, like Mr. Mulvihill, annexed extensive evidence to their Affidavits. [ 32 ] The entire judicial review hearing proceeded in public before me, without any need to resort to in camera discussions. One of the other Respondents, Iristel Inc., provided their submissions in a public record, and without having had access to the confidential records of TELUS, Vidéotron and the AGC.

Representatives of some of the other Respondents, along with other members of the public, also listened to the virtual hearing. [ 33 ] Mindful of these individuals, the open court principle, and in the interests of the administration of justice remaining public, no confidential information from any of TELUS, Vidéotron or the AGC’s confidential records is contained in these Reasons. As such, there are no redactions, nor any need for a confidential set of reasons to be released separately. II. Decision under Review A.

Vidéotron’s Set-Aside Eligibility Application [ 34 ] Vidéotron’s set-aside eligibility application, which formed part of the broader application to participate in the Auction that was required of all prospective bidders, consisted of completing a series of standardized forms established by ISED, attaching supporting documentation, and submitting the completed application confidentially on April 5, 2021. [ 35 ] Vidéotron’s application confirmed that: Fibrenoire was an affiliate registered with the CRTC as a facilities-based provider, indicated all of the Tier 2 areas where Vidéotron wished to apply for set-aside eligibility, and identified all of the Tier 4 areas where it was already providing commercial telecommunications services to the general public. [ 36 ] Vidéotron also attached documentation marked as confidential to its application, which included detailed descriptions addressing how Vidéotron met the set-aside eligibility criteria, including: descriptions of the services offered by Vidéotron and Fibrenoire in their respective service areas as well as their sales and distribution networks, the numbers of clients served, and how those clients accessed their services.

B. The Assessment and Verification Process [ 37 ] As indicated above, the Framework provided that ISED would review the completed forms and associated documents, assess eligibility and, if necessary, request further information and verify the information provided. [ 38 ] The AGC’s affiant, Daniel Anderson, a Manager in the Spectrum Licensing and Policy Branch at ISED, was responsible for the set- aside eligibility assessments of all applicants. He had also been responsible for leading the policy development for the 3500 MHz Auction.

A form called " “3500 MHz Auction Set-Aside Eligibility Assessment (Form 4)” " the [Assessment Form] was used to record Mr. Anderson’s evaluations of the 19 applications for eligibility as set-aside bidders, between the application deadline of April 6, 2021 and April 22, 2021, at which point a list of qualified bidders would be published. [ 39 ] According to his Affidavit, Mr. Anderson began his assessment of Vidéotron’s set-aside eligibility on April 7, 2021, the day after the application deadline, entering information from the application directly onto the Assessment Form.

He verified that both Fibrenoire and Vidéotron were indeed registered with the CRTC as facilities-based providers, which is reflected on the Assessment Form. [ 40 ] Vidéotron had indicated in its application that it qualified for set-aside in British Columbia, Alberta, and Manitoba through its affiliate, Fibrenoire. Vidéotron claimed that Fibrenoire had customers in each of these Western provinces as well as Northern Ontario, but did not indicate who or where they were. Mr.

Anderson testified that he wanted to verify the information provided by Fibrenoire about their services, including their distribution network in Western Canada, but was unable to do so using their website. [ 41 ] As a result, Mr. Anderson states in his Affidavit that he asked Nancy Macartney, one of his ISED colleagues who was participating in the assessment and verification process, to contact Vidéotron to request further details. On April 9, 2021, Ms.

Macartney sent a letter to Vidéotron through secure electronic post, citing the criteria set out in the Framework for establishing set-aside eligibility and requesting that detailed information be provided for each of four service areas, namely Northern Ontario, and the Western Canadian provinces at issue in this case - Manitoba, Alberta and British Columbia. [ 42 ] On April 12, 2021, Mr. Béland, a Vice-President of Regulatory Affairs at Quebecor Inc. and Vidéotron’s affiant in the present application, replied on behalf of Vidéotron. Mr.

Béland’s reply provided a more detailed description of the various categories of services provided by Fibrenoire in Western Canada, a list of customers, and detailed explanations of how business customers accessed the

services, how equipment was distributed and what particular services were provided to each customer. One excerpt of the letter, for instance, reads as follows: [ translation ] Fibrenoire is actively providing business telecommunications services to the general public in service areas 2-008, 2-009, 2- 010, 2-012 and 2-013, as it currently provides symmetrical speed connectivity services over dedicated fibre links to retail business customers with commercial operations in these areas.

In addition to these fibre connectivity services, a growing portion of Fibrenoire’s customers also subscribe to services such as wireless backup connectivity and over-the-top networking applications. . . . For each of the four categories of service provided, Fibrenoire ensures that the customer’s sites are connected to its backbone network through fibre access facilities (except for the minority of SD-WAN cases where coaxial cable or wireless facilities are used).

Except in some areas of Toronto where Fibrenoire operates its own backbone Internet network, these fibre access facilities are sourced from business partners operating networks in the areas in question. However, even when it sources others’ fibre access facilities, Fibrenoire provides the equipment on the customer’s premises. Furthermore, in all cases, Fibrenoire is fully responsible for monitoring and managing the connectivity provided to the customer.

Subject to the availability of adequate facilities from its business partners, Fibrenoire is ready to provide telecommunication services anywhere in the service areas . . . . . . When a new retail business customer contacts Fibrenoire for the first time, they are immediately assigned to a dedicated sales representative. This representative works with the customer to assess their needs, determine the most appropriate service category and negotiate a service contract. Typically, multi-year service commitments are required to ensure the most advantageous pricing.

The assigned sales representative will then personally see to the delivery and installation of the equipment at the customer’s premises (see more details below) and will be available to the customer to resolve any activation issues that may arise. The sales representative also works with the customer on an ongoing basis to ensure that the service ordered continues to best meet the customer’s needs.

Generally speaking, Fibrenoire’s dedicated sales representatives are physically located in Quebec, as Fibrenoire’s customers in the above-mentioned areas are most often branches of large Quebec companies that already have a well-established business relationship with the company. Nevertheless, Fibrenoire has a growing list of retail business customers headquartered outside of Quebec, who are well served by the Quebec-based sales experts. [ 43 ] To verify that new business customers could obtain services from Fibrenoire in Western Canada, Mr.

Anderson deposes that he placed two anonymous calls to Fibrenoire, using a blocked number. First, he posed as a potential business client with offices in Vancouver and Calgary and asked if Fibrenoire could provide services. The next day, he placed a second call posing as a potential business client with offices in Winnipeg and Thunder Bay. In both cases, Fibrenoire responded that it could offer internet services but that it would not be through Fibrenoire’s own infrastructure, but rather arranged through third-party infrastructure. [ 44 ] At the end of the Assessment Form for Vidéotron, Mr.

Anderson recommended that Vidéotron be granted set-aside eligibility in all the service areas where it applied, including Western Canada. For each of the Tier 2 service areas in Western Canada, Mr. Anderson indicated, " “Provides OTT [over the top] services to businesses through affiliate Fibrenoire” " and at the end of the form he wrote " “Provides internet services to business through Fibrenoire as wholesaler.” " [ 45 ] Mr. Anderson deposes that on April 19, 2021, after completing his assessment, he met with ISED’s Senior Director, Mathew Kellison [the Minister’s delegate]. Mr.

Anderson states that he explained his assessment of the application, the response received to ISED’s written request, the verifications he had completed by telephone, and the rationale for his recommendation. He also states that Mr. Kellison indicated that he agreed that Vidéotron met the requirements for set-aside eligibility in each of the areas in which it had applied. [ 46 ] The Minister’s delegate made the Decision on behalf of the Minister on April 21, 2021, which is indicated on an internal document called " “3500 MHz Auction Application Assessment Form” " [the Compiled Assessment Form].

At the time the decision was made, the Minister’s delegate had the completed Assessment Form, all materials provided to ISED by Vidéotron (including the April 12 letter cited at para 42of these Reasons) and the Compiled Assessment Form before him on a USB key (as noted in a Response to Undertaking email from the AGC, at p. 1106 of the Applicant’s Record). [ 47 ] The next day, April 22, 2021, ISED published its list of qualified bidders.

The findings on set-aside eligibility were shared with each applicant but were not made public prior to the auction, in accordance with the Framework and the Clarification Document. III. Issues and Analysis [ 48 ] TELUS submits two arguments in support of their application for judicial review. First, TELUS argues that the Minister failed to respect the duty of procedural fairness that was owed.

According to TELUS, ISED failed to adhere to the procedure it established for itself, and failed also to maintain adequate records of the steps taken in the assessment of Vidéotron’s set-aside eligibility. [ 49 ] Second, TELUS submits that the decision of the Minister was unreasonable. It argues that ISED’s reasoning process was incoherent and lacked transparency, and that the determination could not be justified in light of the factual record and the Framework’s set-aside

eligibility criteria. [50] TELUS argues that Vidéotron should be disqualified as a set-aside bidder in Western Canada, and that the spectrum licenses it wonthere should be revoked, and that a new auction should be held, for which Vidéotron should not be eligible to participate. [51] The Respondents and the Intervener assert, on the other hand, that there were no flaws in either the reasonableness or fairness of theset-aside eligibility determination, and that this application should be dismissed. A.

Standard of Review [52] While the Parties and the Intervener disagree on the outcome of this application, they agree on the applicable standards of review.First, with respect to the issue of procedural fairness, the Court must ask whether, having regard to all the circumstances, the procedurewas fair and just (Canadian Pacific Railway Company v. Canada (Attorney General), 2018 FCA 69 at paras 54-56 [CPR]; Ahousaht FirstNation v.

Canada (Indian Affairs and Northern Development), 2021 FCA 135 at para 31). [53] Such an assessment often involves a consideration of the non-exhaustive list of factors outlined by the Supreme Court in Baker vCanada (Minister of Citizenship and Immigration), (SCC), [1999] 2 SCR 817 [Baker], and entails assessing "“with asharp focus on the nature of the substantive rights involved and the consequences for an individual, whether a fair and just process wasfollowed”" (CPR, at para 54). [54] The Parties also agree that the second issue entails considering whether the Minister’s decision was reasonable.

In Canada(Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 [Vavilov], the Supreme Court set out a revised framework todetermine the standard of review, whereby reasonableness is the presumptive standard. The Parties agree that there is no reason to departfrom the reasonableness standard in this case. B. Preliminary Issues [55] I will begin my analysis with two preliminary matters that were raised by Vidéotron and TELUS respectively, namely (

i) TELUS’slack of standing to bring the application, and (ii) the improper contents of the Anderson and Béland affidavits. [56] First, Vidéotron asserts that TELUS has no standing to bring this judicial review because, as an NMSP, TELUS was not entitled toparticipate in the Auction for set-aside spectrum, and thus has no direct interest in the matter. TELUS contests this argument, assertingthat they were directly affected by the breach to their right to a procedurally fair process.

The AGC takes no position on the issue, but asTELUS points out, the AGC does acknowledge that the Minister had at least a minimal duty of procedural fairness toward TELUS. [57] The second preliminary issue is TELUS’ argument that the Affidavit evidence of Messrs. Anderson and Béland was inappropriateand seeks to impermissibly add to the tribunal record (paras 59-63, 65 and 68 of the Anderson Affidavit and para 47 of the BélandAffidavit). (

i) TELUS has direct standing to bring the application [58]

Section 18.1(1) of the Federal Courts Act, RSC 1985, c F-7, states: 18.1

(1) Anapplication forjudicial reviewmay be made bythe AttorneyGeneral ofCanada or byanyone directlyaffected by thematter in respectof which relief issought. 18.1

(1) Unedemande decontrôle judiciairepeut être présentéepar le procureurgénéral du Canadaou par quiconqueest directementtouché par l’objetde la demande. Vidéotron argues that TELUS, as an NMSP, had no right to bid for set-aside spectrum, the eligibility assessment determination which itchallenges in this judicial review. [59] As a result, Vidéotron contends that TELUS is not directly affected by the matter in which it seeks relief. Vidéotron relies onSoprema Inc. v.

Canada (Attorney General), 2021 FC 732 [Soprema], which in turn relies on CanWest MediaWorks Inc. v Canada(Health), 2007 FC 752 [CanWest] (aff’d 2008 FCA 207). Soprema and CanWest stand for the principle that for an applicant to beconsidered ‘directly affected’, the matter at issue must be one which adversely affects their legal rights, imposes legal obligations, orprejudicially affects them directly.

Vidéotron relies on Soprema, and CanWest for the proposition that commercial or economic harm isnot, in itself, sufficient to ground standing. [60] Vidéotron also relies on other cases refusing standing due to a lack of adverse impact to legal rights, including Novo NordiskCanada Inc. v Canada (Health), 2019 FC 822 at paras 8-9, which held that commercial or economic harm is not sufficient to grant directstanding where the party’s legal rights are not affected and the party is not prejudiced.

Similarly, Vidéotron relies on Ultima Foods Inc. vCanada (Attorney General), 2012 FC 799 [Ultima Foods] at paras 102-103, where a licence granted to a third party for the importationof yogurt was held not to impose rights or obligations on another party.

[ 61 ] TELUS counters that having been an active participant both in the consultation and the bidding processes of the Auction, its legitimate expectations of procedural fairness were undermined by how the set-aside eligibility determination process unfolded. TELUS argues that Irving Shipbuilding Inc. v.

Canada (Attorney General) , 2009 FCA 116 [ Irving ] provides a complete answer to the standing issues. [ 62 ] TELUS acknowledges that it was not eligible to bid on set-aside spectrum, but nevertheless points out that it competed directly against Vidéotron during the phase of the auction which concerned the assignment of spectrum frequencies. TELUS notes that all the participants in the Auction had to apply to qualify, and set-aside eligibility determinations were simply one component of the broader application process in which all prospective bidders participated.

As a participant in the Auction, TELUS contends that it has standing on the basis of its expectation of a fair process. [ 63 ] I agree that this is not a particularly compelling example of being directly prejudiced. It is especially telling that TELUS is not joined in pursuing this application by any of the set-aside eligible bidders who participated in the Auction, who would have had a relatively greater interest in seeing set-aside eligibility determinations being made fairly, and who would have been even more directly affected by bidding directly against Vidéotron for set-aside spectrum.

Their silence in this application has not gone unnoticed. [ 64 ] Nevertheless, I find that TELUS has a sufficient basis to assert that its legal rights are affected, and to ground its standing to bring this Application, on account of its arguments regarding the procedural unfairness of the ISED process.

Even if the content of the duty owed to it is found to be minimal, the fact that TELUS participated actively in the consultation leading to the Auction, and indeed, applied and participated in the Auction itself, there is no denying that they had a direct interest in the entirety of the Auction process being conducted fairly. In Irving , Justice Evans wrote at para 28: In my view, the question of the appellants’ standing should be answered, not in the abstract, but in the context of the ground of review on which they rely, namely, breach of the duty of procedural fairness.

Thus, if the appellants have a right to procedural fairness, they must also have the right to bring the matter to the Court in order to attempt to establish that the process by which the submarine contract was awarded … violated their procedural rights. If [the government department] owed the appellants a duty of fairness and awarded the contract to [the contract bid winner] in breach of that duty, they would be “directly affected” by the impugned decision.

If they do not have a right to procedural fairness, that should normally conclude the matter. [ 65 ] I note that in Ultima Foods , which Vidéotron relies on, the circumstances were distinguishable. There, the applicants, firms in the Canadian yogurt market, opposed import permits that allowed another Canadian yogurt processor to import yogurt into Canada.

The Court did not accept that the applicants would be directly affected or experience prejudice as a result of the decision to grant the import permits, despite their claims that the decision threatened their businesses, and would reduce revenues and threaten the supply chain of Greek yogurt in Canada.

The Court held the applicants did not have standing because they were only going to be impacted economically by the permits being awarded to the prospective yogurt importer. [ 66 ] Vidéotron further argues that Justice Grammond already dismissed TELUS’ economic arguments on the market distortion impact of the Auction in Telus v. Vidéotron ,at paras 69-77 . I agree with Justice Grammond’s finding as it pertains to his assessment of the irreparable harm component of an interlocutory injunction.

However, I cannot agree that TELUS’ failure to establish irreparable harm in their injunction application amounts to a finding that the result of the Auction did not have any direct financial impact.

The impossibility of predicting the outcome or quantifying the financial impact of an Auction scenario where Vidéotron was determined not to be eligible to bid on set-aside spectrum in Western Canada, does not inexorably lead to a finding that TELUS suffered no direct financial impact. [ 67 ] Furthermore, unlike Ultima Foods , TELUS was not simply a competitor on the sidelines of an administrative process that did not concern them.

TELUS, though admittedly not eligible to bid on set aside spectrum, was nonetheless a direct participant in the broader Auction and, as I will discuss further below, had a legitimate interest in the entire process being conducted fairly. [ 68 ] As such, I am not prepared to accept Vidéotron’s invitation to find the Court has no jurisdiction to hear the application. Having said that, establishing standing, and proving unfairness, are two completely different matters. (ii) TELUS’ Objections to the Affidavits of Messrs.

Béland and Anderson [ 69 ] As I do not find it necessary to refer at all to the affidavit of Vidéotron’s affiant, Mr. Béland, to dispose of this application, I will limit my comments on this issue to the impugned sections of the Anderson affidavit, namely, paragraphs 59-63, 65 and 68. [ 70 ] TELUS argues that it was inappropriate for Mr. Anderson, a key ISED representative involved in the selection process, to provide the evidence contained in the impugned paragraphs of his affidavit which was commissioned approximately nine months after the Decision was made. TELUS cites Canada v.

Kabul Farms Inc., 2016 FCA 143 at para 38 [ Kabul Farms ] and Leahy v. Canada (Citizenship and Immigration) , 2012 FCA 227 [ Leahy ] at para 145 , for the proposition that supporting affidavits on judicial review cannot be used as an after-the-fact means of augmenting or bootstrapping the reasons of the decision-maker. [ 71 ] TELUS accordingly requests that the Court disallow paragraphs 59-63, 65, and 68 of the Anderson (AGC) Affidavit.

Those paragraphs are reproduced at Annex C of these Reasons. [ 72 ] The AGC counters that admission of the Anderson Affidavit is both proper and necessary in these circumstances, since it meets two of the exceptions which allow for admission of affidavit evidence on judicial review: (

a) to describe the background circumstances of the highly administrative Auction selection, and (

b) to counter the allegations of procedural unfairness raised by the Applicant. The AGC contends that for both (

a) and (b), the information is otherwise unavailable, and in neither case does it bootstrap or attempt to shore up the Decision with any additional reasons or justification for the conclusion. Rather, the AGC submits that the affidavit provides important evidence as to how the process was conducted, how the decision was made, the steps taken and how information was communicated.

[ 73 ] Broadly speaking, TELUS is correct that a well accepted principle of administrative law restricts the evidentiary record on judicial review to that which was before the administrative decision-maker ( Association of Universities and Colleges of Canada v. Canadian Copyright Licensing Agency (Access Copyright) , 2012 FCA 22 [ Access Copyright ] at para 19 ; Leahy , at para 145 ). [ 74 ] However, there are exceptions to this rule as the AGC points out.

For example, parties can file affidavits on judicial review which provide " “general background in circumstances where that information might assist [the Court] in understanding the issues relevant to the judicial review” " ( Access Copyright , at para 20 ; see also Delios v. Canada (Attorney General) , 2015 FCA 117 at paras 43-45 [ Delios ]; Bernard v. Canada (Revenue Agency) , 2015 FCA 263 at para 22-28 ). [ 75 ] I agree with the AGC that the entirety of Mr.

Anderson’s Affidavit, including the impugned paragraphs, are helpful and orienting in providing general background information to the Court on the underlying administrative context and the decision-making process conducted by ISED for the Auction. This is especially so given the tight timeframes and confidentiality concerns that were inherent to the process, which had implications for the way it was conducted. Mr.

Anderson describes the steps and practices followed by him and his team with respect to form completion, eligibility assessment, information verification and confidential correspondence, as well as final approvals. [ 76 ] Given the circumstances, this information assists the Court to better understand the set-aside eligibility determination process and further, to consider the procedural fairness arguments that have been raised, in context.

The Affidavit does not provide any additional reasons or justification not included in the Decision, nor does it stray into opinion or facts not within the affiant’s knowledge. I will accordingly decline to disallow or strike the impugned paragraphs of the Anderson Affidavit. It is admitted it in its totality. [ 77 ] As an aside, I note that the Anderson Affidavit stands in stark contrast to the one produced by TELUS’s affiant, Mr. Mulvihill, a former ISED employee now employed by TELUS, upon which TELUS relied heavily. Mr.

Mulvihill’s testimony was largely concerned with his perception of the underlying intentions that lead to the development of the Framework , informed by his prior employment at ISED, which coincided with the 2018 600 MHz auction. He did not participate in eligibility determinations in either the 2018 or 2021 auctions, or the development of the Framework itself. Though he was not qualified as an expert witness, significant portions of Mr. Mulvihill’s affidavit and subsequent cross-examination stray consistently into argument and opinion on the intentions leading to the Framework and the appropriate

interpretation of the set-aside eligibility criteria, views, which I must add, are simply not born out by the Framework or Clarification Document. [ 78 ] As I was neither asked to formally disregard or strike any paragraphs of the Mulvihill Affidavit, I have considered it alongside the testimony of Mr. Anderson, to the extent that the information can be considered relevant, reliable and known to the affiant. C.

Procedural Fairness [ 79 ] After reading the records of the participants in this judicial review, and considering the applicable jurisprudence, I am satisfied that the Minister’s set-aside eligibility determination process and the manner in which it was conducted was fair and just having regard to all the circumstances. I set out my reasons for that finding here. [ 80 ] Ac cording to TELUS, an application of the Baker factors ( set out in Baker , at paras 23-28 ), suggests that the set-aside eligibility determination attracts a significant degree of procedural fairness.

The Applicant relies on the fact that neither the Radiocommunication Act nor the applicable ISED policies provide a mechanism for review or appeal of the Decision, combined with the importance of the impact of the Decision for TELUS’ own interests, and the public interest more broadly. [ 81 ] TELUS also submits that the Minister undertook to abide by a specific procedure, whereby it would assess whether applicants met the set-aside eligibility criteria by requiring documentation of the services being offered in the relevant service area, the retail/distribution network and the number of subscribers in the service area.

The publication of these eligibility criteria in advance, following an extensive public consultation process, created - in TELUS’s submission - legitimate expectations that the procedure set out by Minister would be followed. [ 82 ] The Respondents and Intervener all counter that the Baker factors would more appropriately lead to a conclusion that the degree of procedural fairness owed to TELUS was minimal, and that in any event, ISED adhered to all the rules in the procedure it set out for itself, and the process was entirely fair. [ 83 ] The non-exhaustive list of Baker factors were recently summarized at para 77 of Vavilov as including: (1) the nature of the decision being made and the process followed in making it; (2) the nature of the statutory scheme; (3) the importance of the decision to the individual or individuals affected; (4) the legitimate expectations of the person challenging the decision; and (5) the choices of procedure made by the administrative decision maker (see also Baker , at paras 23-27 ; Congrégation des témoins de Jéhovah de St-Jérôme- Lafontaine v.

Lafontaine (Village) , 2004 SCC 48 , [2004] 2 S.C.R. 650, at para. 5 ). [ 84 ] I am unpersuaded that a significant degree of procedural fairness was owed to TELUS in the process leading to set-aside eligibility determinations, given the Baker factors, reviewed in sequence below. (

i) The nature of the Decision was purely administrative [ 85 ] Having reviewed and considered the Framework more broadly and the actual set-aside eligibility criteria in particular, in addition to the Clarification Document, the forms associated with the application, and Mr. Anderson’s Affidavit, I conclude that the nature of the Decision, namely the assessment of applicants’ eligibility to bid on set-aside spectrum, was a straight forward and purely administrative process. I note that Justice Grammond concluded similarly ( TELUS v.

Vidéotron, at para 37). [ 86 ] With the added benefit of a full record now before me, it is clear that the process was intentionally designed to be confidential, and prospective bidders did not have any participatory rights in the assessment of one another’s applications. The process was crafted in accordance with the Framework , which involved broad public consultation in which TELUS participated extensively.

(ii) The statutory scheme empowers the Minister to prescribe the process [ 87 ] The statutory scheme places full control over the process with the Minister, as outlined above. Prospective bidders were aware from ISED’s published process that they did not have participatory rights to review or challenge their competitors’ applications.

Indeed, this was essential to the confidentiality and integrity of the Auction process, as demonstrated in numerous parts of the Framework , including paragraphs 247, 257, 422, 424 and 440. [ 88 ] What is more, ISED clearly indicated that documentation revealing the basis for a bidder’s eligibility would not be published ( Clarification Document at Response 2.11, reproduced above at para 21).

At no point did TELUS or any other bidder challenge the process the government announced, as it could have, and indeed, has done in the past (see TELUS v Canada (Attorney General) , 2014 FC 1 , [2015] 2 FCR 3). (iii) The importance of the Decision to TELUS was minimal [ 89 ] TELUS, as an NMSP, was explicitly barred by the eligibility criteria from bidding on the set-aside portion of the available spectrum.

TELUS’ interest in the determination that Vidéotron was eligible is not akin to an applicant bidding directly against Vidéotron for set-aside spectrum or, an applicant who may have found themselves assessed as ineligible to bid for set-aside spectrum despite presenting a similar application to Vidéotron’s. No such competitors brought an application. An application previously filed by Bell Canada, another NMSP, has since been discontinued.

In any event, the impact of the Decision on TELUS was certainly minimal. [ 90 ] I am not prepared to conclude, as Vidéotron invites this Court to do and as I have addressed above - that this factor has the effect of disqualifying TELUS from applying for judicial review of the process.

I accept that TELUS, as a participant in the broader Auction, has a limited procedural and financial interest in the outcome. [ 91 ] However, given the fact that TELUS was barred from obtaining set-aside spectrum from the beginning, and that they admit their interest in the outcome to be largely economic, this factor suggests that whatever scarce expectation of procedural fairness to which TELUS is entitled as regards the set-aside eligibility determinations, is correspondingly minimal. In Airbus Helicopters Canada Limited v.

Canada (Attorney General) , 2015 FC 257 [ Airbus ], Justice Roy held at para 116: Generally speaking, if one were to place the guarantees of procedural fairness along a spectrum, they would be significantly more elaborate where fundamental human rights are being adjudicated, with the other end of the spectrum being occupied by cases in which commercial interests are at play. Here, the discretion conferred on the Minister is considerable. There is no dispute on that front. The consultation that was held was by choice, with no legal obligation.

There is no doubt that the Minister must act impartially and in good faith. But this was not an adjudication or a process that can be likened to the quasi- judicial function. [ 92 ] In Airbus , the applicant challenged a consultation process that preceded a procurement for the purchase of helicopters, stating that the consultations conducted by government representatives were tailored to enable the winning bidder to obtain the contract and further that the Minister had breached its legitimate expectations.

The Court disagreed and found that while the applicant was entitled to expect that the procedure adopted by the Minister would be followed, this expectation was fulfilled and an informed observer would recognize the quality of the process that was put in place ( Airbus , at paras 121-123 ). [ 93 ] Accordingly, and given the present context where TELUS is a participant in the broader Auction, but not a direct competitor in the set-aside portion for which Vidéotron was assessed to be eligible, the importance of the Decision to TELUS suggests that TELUS’ expectation of procedural fairness would be no greater than the one recognized in Airbus : at the limited end of the spectrum. (iv) TELUS was entitled to expect that the process would be followed [ 94 ] As with Airbus , and as the Parties essentially agree, TELUS’ legitimate expectations as a participant in the broader Auction was limited to an expectation that ISED would follow the procedure it had publicly set out for itself. (

v) Choices of procedure: The Minister chose to require documentation describing compliance and to allow information requests and verifications [ 95 ] Once again, while they disagree on whether Vidéotron adequately documented their set-aside eligibility application, the Parties are agreed that the Minister chose to require prospective bidders to provide relevant documentation to ISED including descriptions of the services being offered in the relevant service areas, the retail/distribution network and how subscribers accessed the services (see para 14 of these Reasons, which reproduces Decision D2 of the Framework ). [ 96 ] There is also no dispute among the parties that

section 12.5 of the Framework explicitly empowered ISED to review the application forms, assess eligibility, request further information and verify the information received, all within tight timelines that were made publicly available. The bidder qualification process, including a link to the Table of Key Dates, was detailed at paragraphs 435-440 of the Framework . [ 97 ] Finally, as I have noted above, the application materials, the set-aside eligibility assessment process itself, and the results, were all intentionally kept confidential.

Indeed this too was explicitly indicated to the parties in Response 2.11 of the Clarification document. (vi) Conclusion and analysis: the degree of procedural fairness owed was minimal and, having regard to the circumstances, was met [ 98 ] Having reviewed the Baker factors in the context of the present application, I conclude that the degree of procedural fairness owed by the Minister to TELUS was minimal and was limited to complying with the process it had set out for itself. I also find, having regard

to all of the circumstances, that the Minister complied with this duty and the procedure followed was fair and just. (

a) The process was followed [ 99 ] TELUS argues that the Minister breached the duty of procedural fairness by failing to maintain adequate records of its internal decision-making. The Framework , and the Assessment Form, required all applicants provide documentation to ISED demonstrating their eligibility under the bidding requirements. TELUS points to an excerpt of

section 12.5 of the Framework , which reads: " “Applicants that do not comply with ISED’s written requests will have their application to participate in the auction rejected.” " TELUS contends that since the Assessment Form indicates " “no” " for whether documentation was submitted in respect of Fibrenoire’s retail/distribution network for the Tier 2 service areas in Western Canada, the Court should conclude that Vidéotron did not comply with ISED’s written requests and should have had their application rejected. [ 100 ] TELUS further submits that Mr.

Anderson failed to document the contents of his calls to Fibrenoire and that in any event, those calls were not a verification, as was allowed by the Framework , but rather an impermissible attempt to gather key information missing from the application. TELUS qualifies this as an impermissible bid repair, analogous to the procurement environment, where a clarification submitted by a bidder goes beyond the contents of the bid and provides new information. [ 101 ] In support of its argument, TELUS cites a series of decisions from the Canadian International Trade Tribunal, as well as Francis H.V.A.C.

Services Ltd. v. Canada (Public Works and Government Services) , 2017 FCA 165 [ Francis ] , where the Federal Court of Appeal explained, at para 22: I agree that there is no doubt that bidders cannot make material corrections or amend their bids after the bid’s closing date. The requirements found in an RFP must be met at the time of bid closing, and a procurement entity is not entitled to consider information submitted after that date. “Bid repair”, as it has come to be known, is considered to be an indirect way of allowing a late bid.

The rationale behind the rule against bid repair is easy to understand: allowing a bid to be modified or altered after the fact would undermine the bidding process itself, as it would allow a change to be made to a bid at a time when the bids of others are known or could be known. [Citations omitted.] [ 102 ] While I am not in disagreement with any of the principles cited by TELUS with respect to procurement, I cannot agree that they apply to this set-aside eligibility assessment process.

A final selection and award after a procurement process, and the eligibility determination for the set-aside portion of the Auction, are fundamentally different processes with distinct stakes and outcomes. A procurement that results in a binding contract, to the exclusion of other bidders, fundamentally contrasts from the Auction’s bidder qualification process, and in this case, the set-aside eligibility determination. [ 103 ] Here, there was no limit to the number of prospective bidders that could be determined eligible to bid on set-aside spectrum, so long as they met the criteria.

Indeed, the stated purpose of set-aside spectrum was to increase competition. The mere submission of an application for set-aside eligibility would, if compliant, only qualify the applicant to bid, and would not guarantee the obtention of a 3500 MHz spectrum license, or give rise to a contract. [ 104 ] In Francis , on the other hand, a compliant bid was due by a specific closing date and the complete and compliant bid in response to a tender could have given rise to a contract.

The circumstances are clearly distinct. [ 105 ] Furthermore, here, the Framework explicitly provided that additional information could be requested and verified by ISED officials during the eligibility assessment process (see paras 435 and 437 of the Framework ). This type of iterative process was not akin to a bid repair, which is prohibited conduct within the purview of a government procurement.

To the contrary, it demonstrates that, in accordance with the purpose of increasing competition, the process was intentionally designed to facilitate increased participation and to provide ISED with the flexibility required to ensure prospective bidders could correct errors, and to request or verify further information where necessary. [ 106 ] In short, the procedures established for the eligibility assessment of the Auction - which were developed in consultation with TELUS were fundamentally different from a government procurement process. [ 107 ] In assessing whether the stated process was complied with, I note that Vidéotron provided written documentation in support of the application with detailed explanations describing how all of the criteria for set-aside eligibility were met.

As the process allowed, ISED requested further information in writing. [ 108 ] As I have noted, the Framework allowed for an iterative process, where the bidder would submit information, ISED could request corrections or additional information, and could perform the requisite verifications to ensure compliance with eligibility criteria. Prospective bidders would be informed of whether they had been found eligible within the prescribed period.

This iterative process, including the post-submission verifications, should come as no surprise to Auction participants: not only being spelled out in the Framework, at paras 435, 437, but also indicated on the set-aside eligibility form. [ 109 ] Following ISED’s written request for further information, Vidéotron complied and provided additional documentation that satisfied the departmental officials overseeing the set-aside eligibility assessment process. Mr. Anderson considered the additional information and conducted a verification of that information by placing independent anonymous phone calls.

He was ultimately satisfied that Vidéotron met the requirements. He shared the Assessment Form with his supervisor, the Minister’s delegate, and participated in a team meeting wherein he explained the rationale for his recommendation that Vidéotron be determined eligible. The Minister’s delegate agreed with the analysis, and signed the Compiled Assessment Form. [ 110 ] Despite TELUS’ insistence on the " “no” " appearing on the Assessment Form, I find TELUS to be overly concerned with formality and to be elevating, in literal terms, the form above its substance.

As the Respondent Iristel pointed out during the hearing, the forms to

be completed are subordinate to the Framework itself, and are not meant to add to the requirements to be met by applicants. [ 111 ] Particularly where, as here, a decision making process does not lend itself to the production of a single set of reasons, one has to consider not only the physical form, but the entire surrounding context in a highly administrative process ( Vavilov , at para 137 ).

Here, the fact that the Minister’s delegate was ultimately satisfied that Vidéotron met the eligibility criteria, had the requisite explanations and documentation before him, and signed the approval, is clear from the Compiled Assessment Form. [ 112 ] Even if the " “retail and distribution network” " itself was not independently documented by Vidéotron, it was abundantly described and substantiated in the initial and response documents that were provided by Vidéotron, which were independently assessed and verified by Mr. Anderson.

I am not prepared to hold ISED or Vidéotron to a standard more exigent than what is explicitly set out in the Framework (at para 64 and Decision D2), as further discussed below in response to TELUS’ challenge to the reasonableness of the Decision. [ 113 ] In order to demonstrate that they met the eligibility criteria of actively providing commercial telecommunications services to the general public in the relevant Tier 2 service areas, Vidéotron was required to provide documentation which would include descriptions of: the services being offered in the relevant service areas; the retail and distribution network; and, how subscribers accessed the services and the numbers of subscribers in the service areas.

It is clear to me from the initial and follow-up materials that were provided in addition to the Assessment Form, that Mr. Anderson, after requesting further information and conducting his independent verification, was satisfied that Vidéotron had done exactly that and was satisfied that they were set-aside eligible. (

b) The Maintenance of adequate records [ 114 ] As for the maintenance of adequate records, TELUS cites the Treasury Board of Canada’s Directive on Service and Digital , at sections 4.3.2-4.3.3 [TBS Directive], and its Policy on Service and Digital [TBS Policy]. The TBS Directive requires employees of the Government of Canada to document " “their activities and decisions of business value” " (at s. 4.3.3.1).

Paragraph 4.3.2.10 of the TBS Policy, entitled " “Recordkeeping” " , reads that Deputy Heads are responsible for: Ensuring that decisions and decision-making processes are documented to account for and support the continuity of departmental operations, permit the reconstruction of how policies and programs have evolved, support litigation readiness, and allow for independent evaluation, audit and review. [ 115 ] Citing the TBS Directive and the TBS Policy, TELUS submits that the failure of Mr. Anderson to document the contents of his calls, and of Mr.

Anderson and the Minister’s delegate to keep minutes of their meeting, were both procedurally unfair given the magnitude of the decision under review. [ 116 ] TELUS also argues that no approvals by the Minister’s delegate appear on the Assessment Form, or on any other document produced by ISED.

TELUS once again relies on Leahy , at paras 100, 119-121, 137 , and Kabul Farms , at para 34 , this time for the proposition that the adequate records were not kept. [ 117 ] I disagree with both of TELUS’ contentions, namely, 1) that the Minister was required to keep more detailed records than it did, and 2) that the evidentiary record was deficient or " “so thin that [the Court] cannot properly assess whether the decisions were correct or reasonable” " ( Leahy , at para 100 ). [ 118 ] The Minister’s delegate’s signature and approval are documented on the Compiled Assessment Form, which also clearly indicates all the ISED employees involved in the business decision in question, along with their respective responsibilities in the process.

That form lists Mr. Anderson as the set-aside eligibility reviewer. Furthermore, the Assessment Form was completed by Mr. Anderson at the time of his work on the file, and indicates his assessment of how Vidéotron met the set-aside eligibility criteria for each of the service areas in question. [ 119 ] I do not find - nor do the Framework , the TBS Directive or the TBS Policy require– that the record-keeping obligation extended to keeping recordings or detailed minutes of all internal discussions or verification processes.

Given the nature of the eligibility assessment, and the compressed timelines involved, such a requirement would go well beyond what was required. [ 120 ] In sum, I find that the Minister followed its process in assessing Vidéotron’s set-aside eligibility and that the process was adequately documented, consistent with what could have been legitimately expected by the affected parties. Having regard to all of the circumstances, I find the process of assessing Vidéotron’s set-aside eligibility to have been fair and just. D.

The Decision was reasonable [ 121 ] A court performing a reasonableness review scrutinizes the decision in search of the hallmarks of reasonableness – justification, transparency and intelligibility – to determine whether it is justified in relation to the relevant factual and legal constraints ( Vavilov , at para 99 ).

Both the outcome and the reasoning process must be reasonable and the decision must be based on an internally coherent and rational chain of analysis, justified in relation to the facts and the law ( Vavilov , at paras 83-85 ). [ 122 ] TELUS argues that two aspects of the Decision fail to meet this standard. [ 123 ] First, TELUS argues that Mr. Anderson’s use of the terms " “wholesaler” " , " “OTT” " and " “phone” " on the Assessment Form were unreasonable on account of their incoherence, ambiguity, and unintelligibility.

TELUS further submits that key information was missing from the reasons, namely the phone calls that were placed, such that the Decision lacks transparency. [ 124 ] Second, TELUS argues that Vidéotron’s application was non-compliant with the Framework’s eligibility criteria, and the Decision therefore cannot be justified in light of the factual record; the only reasonable conclusion was to reject it. Each of these two arguments contesting the Decision’s reasonableness are analysed next.

(

i) Transparency and intelligibility of terms used in the Decision [ 125 ] TELUS submits that Mr. Anderson’s use of the term " “wholesaler” " in the Assessment Form is confusing, ambiguous and unintelligible and that " “reseller” " would have been a more appropriate term since, as is undisputed by the parties, Fibrenoire buys access to the infrastructure of other carriers in Western Canada and then resells it to its own customers.

TELUS submits that this may have confused the Minister’s delegate and it is not clear he understood Vidéotron to be a reseller without its own infrastructure in the Tier 2 service areas in question. TELUS contends that on either meaning of the term wholesaler, Fibrenoire cannot reasonably be considered to actively provide commercial telecommunications services to the general public. [ 126 ] Similarly, TELUS argues Mr. Anderson’s use of the term " “OTT” " on the Assessment Form was ambiguous and unintelligible in the circumstances.

TELUS notes that the term is frequently used in the broadcasting context to describe a method of service delivery by a company that provides streaming content, but does own the underlying facilities or delivery network. As such, TELUS contends that one can only guess at what the Minister’s delegate would interpret such a term appearing on the Assessment Form to mean, since, in TELUS’ submission, it is not well-suited to describe the services provided specifically within the telecommunications industry. [ 127 ] Finally, TELUS claims that Mr.

Anderson’s use of the term " “Phone” " was unintelligible having been written in the " “comments” "

section of the Assessment Form, related to retail/distribution network. TELUS argues that this notation is unclear, raising multiple

interpretations and making it impossible for the Court to be satisfied that an acceptable line of reasoning was employed. [ 128 ] Accordingly, TELUS submits, Mr. Anderson either verified the retail distribution network by making phone calls – in which case he ought to have used the " “verified via” " box and not the " “comments” " box to indicate his observation – or, alternatively, he intended to indicate that the retail distribution network was marketed to Fibrenoire’s Western Canada clients by phone. Either way, TELUS contends, the Court is left guessing. It cannot fill in the reasons for the decision maker.

Administrative decisions – no matter how discretionary or administrative in nature – must nonetheless be not only justifiable, but also justified. [ 129 ] An applicant in a judicial review has the burden of showing there are sufficiently serious shortcomings, consisting of central or significant flaws, to render the decision unreasonable ( Vavilov , at para 100 ). This burden cannot be met by demonstrating superficial or peripheral missteps.

Reviewing Courts must also remain attentive to decision makers’ demonstrated expertise; an outcome which might on its surface appear puzzling may " “nevertheless [accord] with the purposes and practical realities of the relevant administrative regime and [represent] a reasonable approach given the consequences and the operational impact of the decision” " ( Vavilov , at para 93 ). [ 130 ] I am unpersuaded by TELUS’ arguments, which, even if they were accepted, would only amount to superficial shortcomings.

Furthermore, TELUS’ arguments are highly formalistic, elevating form over substance, and invite the Court to engage in a " “line-by-line treasure hunt for error” " instead of looking at the record holistically and paying due sensitivity to the administrative regime ( Vavilov , at paras 102-103 ).

Where, as here, a Decision does not lend itself to the production of a formal set of reasons, the Court must look to the record as a whole to understand the decision and uncover its rationale ( Vavilov , at para 137 ). [ 131 ] To isolate words and remove them from their broader context, is akin to cropping a person out of one background and dropping them into another.

While certainly possible to do, the doctored picture depicts an altered reality from that seen by the original viewers, and interferes with the new viewer’s ability to situate the person in their original surroundings – somewhat akin to removing the dots from a written page so that one cannot connect them. [ 132 ] One cannot, in the process of judicial review, jettison the plain meaning of words and disregard the broader context in which those words belong, and instead invite the Court to proffer an alternate view. Here, TELUS invites the Court to divorce the words used by Mr.

Anderson from their ordinary meaning by removing them from their context, proffering an alternative meaning, and shedding doubt on which

interpretation was adopted by the Minister’s delegate. This kind of overly semantic exercise is inconsistent with the instructions in Vavilov in assessing reasonableness, namely that reasonableness takes its colour from the context, and that remaining sensitive to the context of every situation is how reviewing Courts can assess the legal and factual constraints that bear on the decision in question ( Vavilov , at paras 89-90 ). [ 133 ] Vidéotron’s application to ISED included an explanation of how it qualified to bid on set-aside spectrum, along with details regarding Fibrenoire’s role. Mr.

Anderson did not simply accept that explanation. Rather, he investigated it, requested additional information, and conducted a verification to ensure they were actively providing services in the relevant Tier 2 areas. Once satisfied, he summarized his findings on the Assessment Form. That form, along with Vidéotron’s application materials, was then placed before the Minister’s delegate, who determined Vidéotron to be eligible. [ 134 ] Mr. Anderson’s words, like any others within one document, could certainly be cut and pasted out of their broader context, isolated, and then assigned a different meaning.

However, there is no evidence to suggest that there was any doubt as to the meaning of these terms, or that either Mr. Anderson or the Minister’s delegate engaged in such word-smithing. [ 135 ] To accept TELUS’ argument would require this Court to ignore the full record, including Vidéotron’s application materials, which were before the Minister’s delegate, in addition to Mr. Anderson’s Affidavit and subsequent testimony in cross-examination. Such an approach would also ignore Mr. Anderson and the Minister’s delegate’s knowledge and respective roles in the process.

It would unreasonably elevate a trivial, semantic exercise, and replace the abundantly reasonable and readily apparent

interpretation that the Minister’s Delegate adopted. It would fail to take the entire record into account, as the reviewing Court is called to do. [ 136 ] I am no more convinced by TELUS’ argument today than my colleague Justice Grammond was for the interlocutory stay in Telus v. Vidéotron , at para 47 , and I have the added benefit of a full and unredacted record that was unavailable to him. [ 137 ] The nature of the services provided by Vidéotron and their retail distribution network were described in great detail in the application documents.

The meaning of " “wholesaler” " and " “OTT” " , read in that context, are abundantly clear to me: Fibrenoire relied on third party infrastructure to provide commercial telecommunications services to businesses in Western Canada.

[ 138 ] Indeed, it appears to have been clear to both Vidéotron and ISED, as it is to me, that as long as Fibrenoire too was a facilities-based provider registered with the CRTC, actively providing commercial telecommunications services to the general public in the relevant Tier 2 areas, the Framework’s eligibility criteria was unconcerned with whose underlying infrastructure was being used to deliver the services. [ 139 ] Under the circumstances, it is unrealistic for TELUS to argue that the Minister’s delegate, would not have understood the intended meaning of these terms, nor is there any evidentiary basis to support the argument, particularly in light of the fact that the recommendation and the rationale were discussed prior to the final decision, and Vidéotron’s documents were before the Minister’s delegate at the time. [ 140 ] The same is true of the use of the word " “phone” " on the Assessment Form, read in context.

I read its use to indicate that the Fibrenoire’s retail distribution network was accessible and delivered by phone with personal support, as described in the Vidéotron’s materials submitted in support of the application. As the Respondent Iristel pointed out, given that the record shows Vidéotron’s customer base in Western Canada consisted of business clientele, it makes perfect sense that their distribution network would be available by phone.

Furthermore, there was no requirement for them to have a brick and mortar retail network. [ 141 ] Even if I am mistaken, and the use of phone was intended to indicate the verification method, this minor ambiguity is entirely insufficient to render the decision unreasonable, given the other contents of the Assessment Form, the affidavit and cross-examination of Mr.

Anderson, and the broader context of the process governed by the Framework . [ 142 ] I conclude my remarks on transparency and intelligibility of the decision with Vavilov’s reminder to reviewing Courts that in judicial review, written reasons given by an administrative body must not be assessed against a standard of perfection. Rather, the Court must be able to discern a reasoned explanation for the decision (see also Alexion Pharmaceuticals Inc. v. Canada (Attorney General) , 2021 FCA 157 at para 7 ).

This exercise requires deference and respectful attention to the demonstrated experience and expertise of the decision maker, the practical realities of the administrative regime, and the operational impact of the decision. [ 143 ] In light of the context, the forms, the application materials and the letters exchanged reveal a rational chain of analysis ( Vavilov , at para. 103 ; Riccio v. Canada (Attorney General) , 2021 FCA 108 at para 22 ). The meaning ascribed to the words " “phone” " , " “wholesale” " and " “OTT” " by Mr.

Anderson, read in context, were notations to reflect the due diligence he conducted in assessing Vidéotron’s compliance with the eligibility criteria. The Decision that followed, considered in context, is transparent and intelligible. (ii) The record is adequately documented [ 144 ] TELUS further submits, as with their procedural fairness arguments above, that the lack of records of Mr.

Anderson’s phone calls and of his meeting with the Minister’s delegate where he explained the rationale for his recommendation, makes it impossible for the Court to perform its role of scrutinizing the decision, and is thus unreasonable. [ 145 ] For the same reasons as above, I disagree. Having regard to the context, the record, the confidentiality and tight timelines inherent to the process, along with the guiding Framework and Clarification Document, there was no requirement for ISED to keep more detailed records than it did.

It acted reasonably in this regard. (iii) Incorrect customer statistics did not impact the reasonableness of the Decision [ 146 ] TELUS also notes that when Vidéotron responded to the Minister’s written request, it disclosed and corrected some cases of over- reporting of the numbers of its customers in Western Canada, as a result of double counting. TELUS further notes that the Assessment Form reflects the numbers originally given to ISED, rather than the corrected numbers disclosed by Vidéotron in its response.

TELUS submits that the Minister’s delegate thus had incorrect factual information before him when he made the Decision, with an inflated customer count for Western Canada. This, according to TELUS , is a significant error since the numbers of customers would have directly informed the question of whether Vidéotron was actively providing services to the general public. [ 147 ] I have reviewed the figures appearing on both the

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