Ottawa, Ontario, this 20th day of April, 2005
PRESENT: THE HONOURABLE MR. JUSTICE JOHN A. O'KEEFE
BETWEEN:
- and -
REASONS FOR ORDER AND ORDER
O'KEEFE J.
[1] This is an application for judicial review pursuant to section 18.1 of the Federal Courts Act, R.S., 1985, c. F-7, of a decision of the Minister of Canadian Heritage (the "Minister") communicated to the applicant by letters received February 23, 2004 (the "February 23, 2004 letters") eliminating the eligibility of certain commercial newsletters published by the applicant to receive subsidies under the Publications Assistance Program ("PAP").
[2] The applicant requests an order:
1. Quashing the decision of the Minister to exclude from the postal subsidy under PAP, the following periodicals published by the applicant:
(i) The Tax Letter;
(ii) The Bluebook of CBS Stock Reports;
(iii) The MoneyLetter;
(iv) The FundLetter;
(v) Money Reporter;
(vi) The Investment Reporter;
(vii) Canadian Health Care Management;
(viii) The Dentaletter;
(ix) Canadian Mutual Fund Adviser;
2. Compelling the Minister to immediately reinstate the subsidy retroactively to all of the applicant's Canadian periodicals listed above;
3. In the alternative, an order referring the matter back to the Minister for redetermination in accordance with the following directions:
(i) That the Minister provide the applicant with a full opportunity to make detailed submissions on the exclusion of the applicant's Canadian periodicals;
(ii) That the Minister be limited in its decision-making regarding eligibility for subsidies to only those relevant factors identified in the PAP program. Further, that the Minister be directed specifically not to base any decision for eligibility for subsidies under PAP on considerations, or arbitrary considerations, of format or advertising requirements, and
(iii) An interim order requiring the Minister to immediately reinstate the applicant's Canadian periodicals to the subsidy program retroactively and requiring that the applicant's Canadian periodicals remain in the subsidy program under PAP pending the disposition of this application;
4. Costs of this application.
Background
[3] Postal subsidies have been available to Canadian publications for over 150 years. The purpose has been to provide support for Canadian publications through lower postal rates. Since 1997, through the PAP and in partnership with the Canada Post Corporation, the Department of Canadian Heritage (the "Department") has provided postal subsidies to eligible Canadian publications mailed in Canada for delivery in Canada. Eligible publishers receive funding through a "publisher's deposit account"(the "account") established for them at Canada Post. The full cost of mailing publications is charged to the account. The postal subsidy under PAP is then applied to the account to offset the mailing costs. This reduces the cost of distributing the publications.
[4] Postal subsidies are available to Canadian owned and controlled paid circulation publications that are accessible to the general public, that are published and printed in Canada and that meet certain editorial and (now) advertising requirements.
[5] Recipients of PAP funding must meet certain eligibility criteria as set out in the published PAP Applicant's Registration Guide. Prior to April 1, 2004, Canadian periodicals, newspapers and commercial newsletters were all eligible for PAP funding provided they met specified eligibility requirements.
[6] The applicant is a publicly traded company that publishes serial commercial periodicals, inter alia, specializing in investment advice, health care management and dentistry. The applicant has been in receipt of postal subsidies for various publications since 1967. Up to and including March 31, 2004, ten of the applicant's publications received the postal subsidy.
[7] In August 2001, the Minister initiated a review of the PAP. By letter dated September 23, 2002, all publishers who at that time were receiving PAP funding were notified of the anticipated redesign of the PAP and were invited to provide their comments. The PAP website also noted the anticipated redesign of the program and invited comments in advance of any changes being made.
[8] As of March 11, 2003, no newsletter publishers had provided any comments with respect to the redesign of the PAP.
[9] On June 27, 2003, the Minister issued a news release announcing that changes concerning eligibility would be made to the PAP between July and August. A subsequent news release was issued on July 8, 2003.
[10] By letter dated August 8, 2003, (the "August 8, 2003 letter") the applicant was informed that ten publications were being deregistered from the PAP, as the government was deregistering all newsletter publications. The applicant stated that it decided at that point to await further developments of the program as the actual date for deregistration of the publications was not until April 1, 2004. Furthermore, it was not apparent to the applicant at the time that the publications listed in the August 8, 2003 letter would remain in the category for deregistration given, among other things, the lack of definition of "commercial newsletter".
[11] At various times from late November 2003 to February 2004, the applicant either made inquiries about, or had discussions with, the Department about the deregistration of newsletters from the PAP.
[12] The Department designed the Commercial Newsletter Scale which was to be used in determining whether a publication is a newsletter for the purposes of eligibility in the PAP. In January 2004, the Commercial Newsletter Scale became generally available on the PAP website.
[13] The Department sent the applicant the February 23, 2004 letters stating that the ten previously listed publications were to be deregistered as of April 1, 2004 and enclosed a copy of the Commercial Newsletter Scale. The applicant stated that based on those two letters, the applicant concluded that any reconsideration by the Department was complete and the listed periodicals would be deregistered.
[14] As a result of a request dated February 26, 2004 from the applicant, the Minister reclassified one of the applicant's periodicals, "Investor's Digest of Canada", as a magazine published in newspaper format and it was therefore eligible for the postal subsidy.
[15] The notice of application requesting judicial review of the February 23, 2004 letters was filed on March 24, 2004. An amended notice of application was filed on March 25, 2004.
Issues
[16] The applicant frames the issue as follows:
1. Whether the Minister breached the duty of fairness owed to the applicant by:
(i) Failing to give notice to the applicant that the Minister was considering the elimination of commercial newsletters from PAP funding;
(ii) Failing to provide an opportunity for the applicant to make submissions on the elimination of its PAP funding;
(iii) Failing to disclose to the applicant, in advance of receiving submissions, the Minister's rationale for elimination of commercial newsletters from PAP funding.
[17] The respondent frames the issues as follows:
1. Are the February 23, 2004 letters decisions capable of being challenged by way of judicial review under section18.1 of the Federal Courts Act, supra?
2. If so, did the Minister breach the requirements of procedural fairness as alleged?
Applicant's Submissions
[18] The applicant submitted that the fact that a decision is administrative and affects the rights, privileges or interests of an individual is sufficient to trigger the application of the duty of fairness. The content of the duty of fairness is variable and flexible and depends upon an appreciation of the context of the particular statute and the rights affected.
[19] The values underlying the duty of procedural fairness relate to the principle that the individual or individuals affected should have the opportunity to present their case fully and fairly, and have decisions affecting their rights, interest or privileges made using a fair, impartial and open process, appropriate to the statutory, institutional and social context of the decision.
[20] The applicant, relying on Brunico Communications Inc. v. Canada (Attorney General), [2004] F.C.J. No. 789, submitted that a decision made by the Minister on a publication's eligibility for a postal subsidy is administrative in nature and gives rise to a duty of fairness. In Brunico, supra, the Court concluded that the Minister owed a relatively low level of procedural fairness to the applicant. The applicant submitted that in this case, that level of procedural fairness demanded, at the very least, that:
1. The applicant be given notice that the Department was considering the elimination of commercial newsletters from PAP funding;
2. The applicant be invited to make submissions on the elimination of its PAP funding, and
3. The applicant receive disclosure, in advance of its submissions, of the Department's rationale for elimination of commercial newsletters from PAP funding.
[21] The applicant submitted that procedural fairness demands, at the very least, notice of a potentially adverse decision. The notice provided by the Minister was insufficient, vague and breached the audi alteram partem rule of procedural fairness. Minimal procedural fairness demanded that, as a directly affected party, the applicant receive notice that its postal subsidy might be eliminated and be granted an opportunity to make representations. The applicant was not notified that the Minister was considering eliminating its eligibility for the postal subsidy, or the reasons for that elimination, and had no opportunity to present argument as to why commercial newsletters should continue to receive financial assistance.
[22] Legitimate Expectation
The applicant submitted that the Department had, in a letter dated May 2, 1996 (the "1996 letter"), assured the applicant that it would be consulted on any changes to the PAP. The applicant therefore had a legitimate expectation that the process would be followed, but it was not. The promise by the Department to consult the applicant also served to broaden the level of procedural fairness owed to the applicant.
Respondent's Submissions
[23] The respondent submitted that the February 23, 2004 letters are not reviewable decisions. They are merely courtesy letters which confirmed the August 8, 2003 decision to deregister certain of the applicant's publications. The February 23, 2004 letters also enclosed a copy of the Commercial Newsletter Scale. Therefore, the only reviewable decision is the letter of August 8, 2003.
[24] The respondent submitted that there is no evidence that the applicant sought reconsideration of the August 8, 2003 decision or that the Minister undertook to reconsider that decision. The only request for reconsideration was made by the applicant by letter dated February 26, 2004 with respect only to the Investor's Digest of Canada. On March 17, 2004, the Minister reclassified this publication as a magazine, thereby making it eligible for PAP funding.
[25] The respondent submitted that the applicant's decision to await further development of the program as the actual date for deregistration was not until April 1, 2004, and the statement that it was not apparent at the time that the applicant's publications listed in the August 8, 2003 letter would remain in the category for deregistration, was not reasonable and cannot justify the applicant's inaction in commencing an application for judicial review. The August 8, 2003 letter clearly stated that all newsletter publications including the listed publications would be deregistered from PAP eligibility as of April 1, 2004.
[26] The respondent submitted that pursuant to subsection 18.1(2) of the Federal Courts Act, supra, an application for judicial review must be brought within 30 days of the date the decision was first communicated to the applicant. The applicant is more than one year out of time to commence an application for judicial review of the August 8, 2003 decision. The applicant has not sought an extension of time to commence an application nor are there any reasons in the record justifying an extension of time.
[27] The applicant has not provided any satisfactory explanation for the delay in applying for judicial review of the decision, nor exhibited any real intention to proceed between receipt of the decision and receipt of a subsequent courtesy letter. Accordingly, the Court should not grant the applicant an extension of time to commence an application for judicial review of the August 8, 2003 decision.
[28] Nature of the Decision and the Duty of Fairness
The respondent submitted that the Minister's decision to redesign the PAP, and as a result deregister the applicant's publications, was administrative in nature and affected the applicant's interests. As such, the respondent agrees that a duty of fairness existed.
[29] The Minister owed the applicant a minimum duty of fairness, namely, that an applicant be advised of the case it had to meet and that the Minister act in accordance with her own published guidelines.
[30] In the present case, the Minister advised the applicant of upcoming eligibility changes to the PAP and provided the applicant a meaningful opportunity to participate in the consultation process. As such, the Minister met her duty of fairness.
[31] The record before the Court establishes that the applicant was sufficiently notified of pending significant changes to the PAP and had ample time to participate in the consultation process in a meaningful way. The applicant was notified of the upcoming redesign of the PAP by the September 23, 2002 letter and was invited to provide submissions. The letter clearly indicated that the submissions would be factored into the decision-making process and provided a web address for more information on the consultation process.
[32] The minimum requirement of fairness in this case does not require that the applicant be advised that the eligibility of commercial newsletters could be affected by the possible changes to the PAP. The term "redesign" connotes an overhaul of the program. The September 23, 2002 letter should have signaled to the applicant that it could be affected by the changes to the PAP.
[33] Furthermore, in October 2002, the PAP website notified the public of the anticipated program redesign and again invited submissions prior to any decision being taken. Further, opportunities to make submissions and to request reconsideration were available to the applicant even after receiving the August 8, 2003 letter.
[34] The applicant admitted that after the receipt of the August 8, 2003 letter, it chose to not to respond to the invitation for submissions or to seek further clarification of the pending redesign. That the applicant did not participate in the consultation process was a result of its own inaction and the applicant cannot now reasonably assert that it was not afforded the opportunity to participate in the process.
[35] Applicant did not have a Legitimate Expectation
The respondent submitted that the legitimate expectations doctrine does not create substantive rights. Further, in order to establish a legitimate expectation, there must be clear, unequivocal and unqualified representations made to the individual. The applicant relied on the 1996 letter for its assertion of legitimate expectation. Any assurance in that letter that the applicant would be consulted related to the changes in the administration of the PAP from Canada Post Corporation to the Department of Canadian Heritage in 1996/1997, and did not relate to the redesign of the PAP in 2001.
[36] The respondent submitted that in the alternative, even if it can be said that the 1996 letter gave rise to a legitimate expectation with respect to the changes in 2003/2004, the Minister satisfied the assurance that the applicant would be "included in future discussions regarding the Program".
[37] The respondent requested the application be dismissed with costs.
Relevant Statutory Provisions
[38] Subsection 18.1(2) of the Federal Courts Act, R.S., 1985, c. F-7 states:
| 18.1(2) An application for judicial review in respect of a decision or an order of a federal board, commission or other tribunal shall be made within 30 days after the time the decision or order was first communicated by the federal board, commission or other tribunal to the office of the Deputy Attorney General of Canada or to the party directly affected by it, or within any further time that a judge of the Federal Court may fix or allow before or after the end of those 30 days. |
|
18.1(2) Les demandes de contrôle judiciaire sont à présenter dans les trente jours qui suivent la première communication, par l'office fédéral, de sa décision ou de son ordonnance au bureau du sous-procureur général du Canada ou à la partie concernée, ou dans le délai supplémentaire qu'un juge de la Cour fédérale peut, avant ou après l'expiration de ces trente jours, fixer ou accorder. |
[39] The relevant sections of the Department of Canadian Heritage Act, S.C. 1995, c. 11 state:
| 4(1) The powers, duties and functions of the Minister extend to and include all matters over which Parliament has jurisdiction, not by law assigned to any other department, board or agency of the Government of Canada, relating to Canadian identity and values, cultural development, heritage and areas of natural or historical significance to the nation.
5. In exercising the powers and performing the duties and functions assigned to the Minister by section 4, the Minister shall initiate, recommend, coordinate, implement and promote national policies, projects and programs with respect to Canadian identity and values, cultural development, heritage and areas of natural or historical significance to the nation.
7. To facilitate the implementation of any program of the Minister under this Act, the Minister may (a) provide financial assistance in the form of grants, contributions and endowments to any person; |
|
4(1) Les pouvoirs et fonctions du ministre s'étendent de façon générale à tous les domaines de compétence du Parlement non attribués de droit à d'autres ministères ou organismes fédéraux et liés à l'identité, aux valeurs, au développement culturel et au patrimoine canadiens et aux lieux naturels ou historiques d'importance pour la nation.
5. Dans le cadre de ses pouvoirs et fonctions, le ministre a pour tâche d'instaurer, de recommander, de coordonner et de mettre en oeuvre les objectifs, opérations et programmes nationaux en matière d'identité, de valeurs, de développement culturel et de patrimoine canadiens et pour ce qui a trait aux lieux naturels et historiques d'importance pour la nation et d'en faire la promotion.
7. Pour faciliter la mise en oeuvre des opérations ou programmes prévus par la présente loi, le ministre peut: a) accorder une aide financière sous forme de subventions, contributions ou dotations; |
Analysis and Decision
[40] Are the February 23, 2004 letters decisions capable of being challenged by way of judicial review under section 18.1 of the Federal Courts Act, supra?
The respondent has submitted that the decision to deregister the applicant's newsletters was made in the August 8, 2003 letter, and no judicial review of the decision contained in the August 2003 letter was commenced. The respondent submitted that the February 23, 2004 letters were reminder letters in respect of the decision made on August 8, 2003. I have reviewed the August 8, 2003 letter and the letters of February 23, 2004 and I note that the February 23, 2004 letters do not state that the letters are reminder letters. In fact, the letters in part state that:
To ensure Program provisions relating to eligibility criteria are fully respected, we are providing a Commercial Newsletter Scale, used to identify your publication type for the above-mentioned title(s).
[41] There was no mention of the scale in the August 8, 2003 letter and this is understandable since the evidence indicated that the scale was only made known in or about December 2003. For these reasons, I am of the view that the February 23, 2004 letters are new decisions and are subject to judicial review.
[42] Did the respondent owe a duty of procedural fairness to the applicant?
The parties are in agreement that a minimal duty of fairness was owed to the applicant by the respondent. In Brunico Communications Inc. v. Canada (Attorney General), [2004] F.C.J. No. 789, von Finckenstein J. of this Court stated:
13. In this case, the decision was of an administrative nature and it affected the privileges and interests of the applicant. Therefore, the Minister did owe the applicant a duty of fairness.
What was the nature of this duty of fairness?
14. The content of the duty of fairness varies according to the context. Several factors have been identified as important to defining the content of the duty of fairness in a given situation (Baker v. Canada (M.C.I.), [1999] 2 S.C.R. 817 at pages 837-844):
1. the nature of the decision being made and the decision making process,
2. the nature of the statutory scheme and terms of the statute pursuant to which the decision maker acts
3. the importance of the decision to the individual affected by it,
4. the procedures chosen by the decision maker, particularly if the statute has left the choice of such procedures to the decision maker.
15. An additional consideration regarding the nature of the duty of fairness is the legitimate expectation of the individual affected by the decision (Baker, supra). In Canada (Minister of Employment and Immigration) v. Bendahmane, [1989] 3 F.C. 16 (F.C.A.), Hugessen J.A., in a statement that has since been cited with approval by several courts, discussed the doctrine of the legitimate expectation as follows at pages 31-32:
The applicable principle is sometimes stated under the rubric of "reasonable expectation" or "legitimate expectation". It has a respectable history in administrative law and was most forcefully stated by the Privy Council in the case of Attorney-General of Hong Kong v. Ng Yuen Shiu, [1983] 2 A.C. 629 (P.C.) ... Lord Fraser of Tullybelton put the matter thus (at page 638):
... when a public authority has promised to follow a certain procedure, it is in the interest of good administration that it should act fairly and should implement its promise, so long as implementation does not interfere with its statutory duty. The principle is also justified by the further consideration that, when the promise was made, the authority must have considered that it would be assisted in discharging its duty fairly by any representations from interested parties and as a general rule that is correct. ¶
16. As a general principle, the Court seeks to find an appropriate balance between efficient administrative practices and the effective participation of the parties (Brown and Evans, Judicial Review of Administrative Action in Canada (1998).
¶
17. Based upon the above factors, the Minister owed a relatively low level of procedural fairness to the applicant in this case. The decision being made by the Minister was primarily administrative in nature and was made pursuant to a broad discretionary power granted to her by the Act. It was also made in a non adversarial context (Jada Fishing v. Canada (Minister of Fisheries and Oceans) (2002), 41 Admin. L.R. (3d) 281 (F.C.A.)). Although there was no appeal to the Minister's decision, it was open to the applicant to apply for funding the following year, which it did successfully in this case.
I would adopt the same level of procedural fairness in the present case.
[43] Did the respondent breach the duty of procedural fairness that it owed to the applicant?
The applicant has received the postal subsidy since approximately 1967, and its postal costs will increase approximately $316,360 per year as a result of the loss of the subsidy. The applicant stated that it was not made part of any consultative process leading up to the removal of the postal subsidy for its publications. This, the applicant claimed, was a breach of the duty of procedural fairness owed to it. The respondent stated that the applicant was given an opportunity for input as the Department issued a notice on September 23, 2002 announcing the launch of a PAP redesign consultation website, and in October 2002, the PAP website notified the public of the anticipated redesign and invited submissions prior to any decision being made.
[44] The applicant noted that the respondent issued a departmental news release dated June 27, 2003 which announced that there would be changes to the PAP. The release read in part as follows:
The changes to the PAP mainly concern eligibility. The new criteria being introduced will make the program accessible to approximately 100 additional community newspapers, including French-language newspapers, and approximately 150 ethnocultural, minority official-language, and Aboriginal periodicals.
(applicant's record volume II, page 455).
[45] I am of the opinion that the applicant, after either reading the September 23, 2002 notice or viewing the website, could not be expected to conclude that there would be a limitation of eligibility resulting in the loss of the postal subsidy for some of its publications. In Gallant v. Canada, [1989] 3 F.C. 329 at page 341 (F.C.A.), Marceau J.A. stated:
The rationale behind the audi alteram partem principle, which simply requires the participation, in the making of a decision, of the individual whose rights or interests may be affected, is, of course, that the individual may always be in a position to bring forth information, in the form of facts or arguments, that could help the decision-maker reach a fair and prudent conclusion. . . .
[46] In order to comply with the level of procedural fairness required in this case, the September 23, 2002 notice to the applicant should have contained enough particulars so that it would be aware that the postal subsidy might be eliminated for some of its publications and it then should have been afforded the opportunity to make representations concerning the elimination of the subsidies for its publications. This did not occur. I am therefore of the opinion that there was a breach of the duty of procedural fairness owed to the applicant.
[47] The application for judicial review is allowed and the decision to exclude the nine named publications from the postal subsidy under the PAP is quashed. The matter is referred back to the Minister for redetermination.
[48] The applicant shall have its costs of the application.
[49] Because of my findings above, I need not deal with the other issues.
ORDER
[50] IT IS ORDERED that:
1. The application for judicial review is allowed and the decision to exclude the nine named publications from the postal subsidy under the PAP is quashed. The matter is referred back to the Minister for redetermination.
2. The applicant shall have its costs of the application.
J.F.C.
Ottawa, Ontario
April 20, 2005
FEDERAL COURT
NAME OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-604-04
STYLE OF CAUSE: MPL COMMUNICATIONS INC.
- and
ATTORNEY GENERAL OF CANADA
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: November 1, 2004
REASONS FOR ORDER AND ORDER OF: O'KEEFE J.
APPEARANCES:
Mr. J. Bruce Carr-Harris
Ms. Susanne Pereira
FOR RESPONDENT
FOR APPLICANT
John H. Sims, Q.C.
Deputy Attorney General of Canada
FOR RESPONDENT