BETWEEN:
(Defendant)
and
CANADIAN ASSOCIATION OF BROADCASTERS
(The Plaintiff Association),
GROUPE TVA INC., CTV TELEVISION INC.,
THE SPORTS NETWORK INC.,
2953285 CANADA INC. (o.b.a. Discovery Channel Canada),
LE RÉSEAU DES SPORTS (RDS) INC., THE COMEDY NETWORK INC.,
1163031 ONTARIO INC. (o.b.a. Outdoor Life Network),
GLOBAL COMMUNICATIONS LIMITED, GLOBAL TELEVISION
NETWORK QUEBEC LIMITED PARTNERSHIP, PRIME TV, GENERAL
PARTNERSHIP, CHUM LIMITED, CHUM OTTAWA INC., CHUM
TELEVISION VANCOUVER INC. and PULSE24 GENERAL PARTNERSHIP
(The Corporate Plaintiffs)
(Plaintiffs in T-2277-03)
VIDÉOTRON LTÉE, VIDÉOTRON (RÉGIONAL) LTÉE, and CF CABLE TV
INC.
Respondents
(Plaintiffs in T-276-04)
Heard at Ottawa, Ontario, on June 6, 2006.
Judgment delivered from the Bench at Ottawa, Ontario, on June 6, 2006.
REASONS FOR JUDGMENT OF THE COURT BY: EVANS J.A.
Docket: A-476-05
Citation: 2006 FCA 208
CORAM: LÉTOURNEAU J.A.
NOËL J.A.
EVANS J.A.
BETWEEN:
HER MAJESTY THE QUEEN
Appellant
(Defendant)
and
CANADIAN ASSOCIATION OF BROADCASTERS
(The Plaintiff Association),
GROUPE TVA INC., CTV TELEVISION INC.,
THE SPORTS NETWORK INC.,
2953285 CANADA INC. (o.b.a. Discovery Channel Canada),
LE RÉSEAU DES SPORTS (RDS) INC., THE COMEDY NETWORK INC.,
1163031 ONTARIO INC. (o.b.a. Outdoor Life Network),
GLOBAL COMMUNICATIONS LIMITED, GLOBAL TELEVISION
NETWORK QUEBEC LIMITED PARTNERSHIP, PRIME TV, GENERAL
PARTNERSHIP, CHUM LIMITED, CHUM OTTAWA INC., CHUM
TELEVISION VANCOUVER INC. and PULSE24 GENERAL PARTNERSHIP
(The Corporate Plaintiffs)
Respondents
(Plaintiffs in T-2277-03)
and
VIDÉOTRON LTÉE, VIDÉOTRON (RÉGIONAL) LTÉE, and CF CABLE TV
INC.
Respondents
(Plaintiffs in T-276-04)
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Ottawa, Ontario, on June 6, 2006)
[1] This is an appeal by Her Majesty The Queen from a decision of Hugessen J. of the Federal Court on a motion under Rule 220 of the Federal Courts Rules to determine the following two questions of law:
(a) Is Part II of the Broadcasting Licence Fee Regulations, 1997, SOR/97-144 ultra vires s. 11 of the Broadcasting Act, S.C. 1991, c. 11, as amended, if the fees imposed thereunder are considered to be a tax?
(b) Does s. 11 of the Broadcasting Act, S.C. 1991, c. 11 as amended, constitute an ineffective delegation of Parliament's taxation authority if the fees imposed thereunder are considered to be a tax?
[2] Hugessen J. answered both questions in the affirmative, holding that a "fee" and a "tax" are distinct and mutually exclusive legal categories. The power in subsection 11(1) of the Broadcasting Act to establish a schedule of fees to be paid by licensees cannot be interpreted, when read in the context of the section as a whole, to authorize the imposition of a tax. Having concluded that the Act did not authorize the imposition of a tax, he held that the Regulations would be ultra vires the Act if Part II licence fees constitute a tax.
[3] In view of this conclusion, it was not strictly necessary for Hugessen J. to consider whether Parliament had effectively delegated its power to tax consistently with section 53 of the Constitution Act, 1867. Nonetheless, he expressed the opinion (at para. 12) that section 11 of the Act was not sufficiently "clear, specific and explicit" to constitute a delegation to the CRTC of Parliament's constitutional power to tax.
[4] Hugessen J.'s decision is reported as Canadian Association of Broadcasters v. Her Majesty the Queen, 2005 FC 1217.
[5] We should say at the outset that whether Part II licence fees charged by the CRTC are "fees" or a "tax" is not before us. That is a question to be decided in the main action. For the purpose of this appeal, we must assume that the licence fees constitute a tax. Accordingly, nothing in these reasons may be taken as an expression of an opinion on whether this assumption is correct.
[6] The principal argument advanced on behalf of the Crown was that subsection 11(2) of the Act authorized the CRTC to calculate licence fees by reference to any criteria it deemed appropriate, including the revenues of the licensees and their performance in respect of the objectives established by the Commission. Counsel argued that Parliament had thereby authorized the imposition of a charge (to use a neutral word) with the essential characteristics of a tax. Hence, Parliament had delegated to the CRTC its power to impose a tax, without using the word "tax".
[7] We do not agree. In our view, the legal distinction between a fee and a tax is fundamental and, as Major J. said in Eurig Estate (Re), [1998] 2 S.C.R. 565 at para. 41, a power to prescribe a fee does not include a power to impose a tax. Despite the broad discretion conferred on the CRTC by Parliament to determine the bases on which to prescribe fees, we are not persuaded that Parliament thereby intended to blur the distinction between fees and taxes, and to authorize the imposition of a tax when it used the word "fees".
[8] We note that section 11 of the Act is silent on another incident of a tax, namely, that it need not be related to the overall cost of the operation of any statutory scheme of which it is a part. In this case, the total amount of the licence fees charged has, for some years, greatly exceeded the cost of the regulation of broadcasting.
[9] We agree with counsel for the Crown that Hugessen J. may have taken too narrow a view of a "fee" when he seemed to limit it to a user fee: that is, a fee payable for services. As counsel indicated, the word "fee" found in section 11 may also include other kinds of regulatory charge.
[10] However, we agree with Hugessen J. that "fee" does not usually include a "tax" and we are not persuaded that section 11 can be interpreted to displace the normally mutually exclusive legal categories of fees and taxes.
[11] In view of our conclusion that the power in section 11 to prescribe a fee does not authorize the imposition of a tax, we need express no opinion on the second question put to Hugessen J. in the motion.
[12] For these reasons, the appeal will be dismissed with costs to the respondents.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-476-05
APPEAL FROM A JUDGMENT OR AN ORDER OF THE FEDERAL COURT DATED SEPTEMBER 9, 2005, FEDERAL COURT FILE NOS. T-2277-03 AND T-276-04
STYLE OF CAUSE: HMQ v. CANADIAN ASSOCIATION OF
BROADCASTERS ET AL.
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: June 6, 2006
REASONS FOR JUDGMENT OF THE COURT: (Létourneau, Noël, Evans JJ.A.)
RENDERED FROM THE BENCH BY: Evans J.A.
APPEARANCES:
Mr. F.B. (Rick) Woyiwada for the Appellant
Mr. Francisco Couto
Barbara A. McIsaac, Q.C. for the Respondents, Canadian Association
Mr. Howard R. Fohr of Broadcasters et al.
Mr. Daniel Urbas for the Respondents, Vidéotron Ltée et al.
SOLICITORS OF RECORD:
John H. Sims, Q.C. for the Appellant
Deputy Attorney General of Canada
McCarthy Tétrault LLP for the Respondents, Canadian Association
Ottawa, Ontario of Broadcasters et al.
Borden, Ladner, Gervais LLP for the Respondents, Vidéotron Ltée et al.
Montréal, Québec