BETWEEN:
and
CANADIAN TRANSPORTATION AGENCY,
KENMORE AIR HARBOUR INC., 547471 BC LTD.
(FORMERLY AMIGO AIRWAYS CORPORATION) and
SEAIR SEAPLANES LTD.
Heard at Vancouver, British Columbia, on May 29, 2007.
Judgment delivered from the Bench at Vancouver, British Columbia, on May 29, 2007.
REASONS FOR JUDGMENT OF THE COURT BY: SEXTON J.A.
Docket: A-465-06
Citation: 2007 FCA 211
CORAM: DÉCARY J.A.
LINDEN J.A.
SEXTON J.A.
BETWEEN:
NANAIMO PORT AUTHORITY
Appellant
and
CANADIAN TRANSPORTATION AGENCY,
KENMORE AIR HARBOUR INC., 547471 BC LTD.
(FORMERLY AMIGO AIRWAYS CORPORATION) and
SEAIR SEAPLANES LTD.
Respondents
REASONS FOR JUDGMENT OF THE COURT
(Delivered from the Bench at Vancouver, British Columbia, on May 29, 2007)
[1] This appeal arises out of the imposition of certain passenger fees by the Nanaimo Port Authority (NPA) upon passenger seaplane operators relating to passenger services carried out by them into or out of Nanaimo Harbour.
[2] The seaplane operators (complainants) filed a complaint with the Canadian Transport Agency (the Agency) arguing that there was unjust discrimination between themselves and other passenger carriers using the port facilities. The complainants argued that a situation of undue preference and undue disadvantage was created between themselves and other carriers with whom they were in competition.
[3] The fee imposed on the complainants was $1.50 for each passenger transported into or out of Nanaimo Harbour. The complainants claimed that the other carriers either paid no passenger fees or paid fees lower than those imposed on the complainants.
[4] The Agency found that the fees imposed on the complainants were unjustly discriminatory and held that “a more reasonable approach would be to treat all users equitably by charging the same passenger fees”. In making this finding, the Agency carried out a thorough analysis of the different rates imposed by the different carriers.
Standard of Review
(a) Privative Clause
[5] Section 31 of the Canada Marine Act (CMA) states that findings of the Agency on a question of fact within its jurisdiction are binding and conclusive.
[6] Section 41(1) of the CMA provides that a decision of the Agency is subject to appeal only on a question of law or jurisdiction.
[7] These sections suggest deference should be given to decisions of the Agency.
(b) Expertise of the Decision Maker
[8] The Agency is an administrative tribunal with extensive expertise. This also points to deference.
(c) Purpose of the Act
[9] The legislative purpose of the CMA is to provide the Agency with the necessary authority to administer a complex and technical scheme for inter alia managing complaints concerning fees set by port authorities. This suggests deference.
(d) Nature of the Problem
[10] The issue in this appeal involves the Agency’s conclusion based on evidence that the NPA’s current passenger fee tariff was unjustly discriminatory. This also suggests deference.
[11] We conclude that on issues of fact, the review of the Agency’s decision should be on a standard of patent unreasonableness.
[12] On issues of mixed fact and law, the standard should be that of reasonableness simpliciter
[13] On issues of law, the standard is correctness.
[14] We are unable to conclude that the findings of fact made by the Agency were patently unreasonable.
[15] The issue of what constitutes “unjust discrimination” is one of fact and law. The Appellant argued that the Agency erred in interpreting this phrase. We do not agree. The Agency said in its decision (para 72):
While section 50 of the CMA does allow discrimination in fees between classes of users, the Agency is of the opinion that where the classes of users are in direct competition with one another, there cannot be any undue preference or undue disadvantage for one competitor over another. If the notion that a fast ferry, BC Ferries and a float plane operator are separate classes of users is accepted and the passengers carried by each are used as a basis for a fee, then there should be equitable treatment of these passengers. The Agency is of the opinion that the fact that the NPA fixed a “passenger fee” for fast ferry operators that was lower than the “passenger fee” fixed for float plane operators and a “passenger fee” for BC Ferries that was much lower than the “passenger fees” for these two users introduced undue preference and undue disadvantage between direct competitors. The Agency finds that this created an additional element of unjust discrimination in the passenger “passenger fees.”
We are unable to conclude that this finding was unreasonable.
[16] The Appellant argues that the Agency erred in law in failing to interpret the Act as permitting the NPA to charge fees on a commercial basis taking into consideration costs of providing services. The Appellant says this because of the Agency’s holding that passenger fees should be set equitably, that is passengers should be treated the same. We do not accept the Appellant’s argument. The Agency accepted that fees could be set taking into account commercial realities but said that if the NPA was going to set fees unrelated to cost, then it should do so in a non-discriminating manner. We interpret the Agency’s reasons as leaving as an option to the NPA the possibility of setting a tariff based not on passenger fees, but based rather on commercial principles including cost. This might involve, by way of example, setting fees for ferries as opposed to float planes based on the cost to the NPA of servicing the various types of transport. If however, the NPA insists on maintaining passenger fees as its basis for its tariffs, then it must do so on an equitable basis. In this connection, the Agency said:
[42] As an overall policy matter, the Agency finds that discrimination in fees (or the preference or disadvantage in respect of fees) becomes unjust (or undue or unreasonable) when the fees are not functionally and rationally connected to the costs of providing the service or, as in the Adventure Tours Decision, are not otherwise integral to some established broader economic strategy of the port authority. On this latter point, for example, Member Tulk found that it was commercially acceptable for the St. John’s Port Authority to offer tour boat operators a choice of renting a Pier 7 kiosk or paying a levy per passenger for the use of Pier 7 as a reasonable solution to the commercial viability of Pier 7.
[43] The Agency finds that the opposite of “unjust fees” are fees that are “just” or “justifiable”. In the context of sections 49 to 53 of the CMA, this means that the fees must at a minimum be part of a cogent financial plan, one that is accepted as a general commercial practice which, as far as a port is concerned, balances port commercial viability, safety, security and fairness to port users. If the evidence in any particular case shows that the fees in issue are random or arbitrary, even if issued with the best of intentions, then they may run afoul of section 50 of the CMA.
. . .
[74] After giving careful thought to the situation faced by the NPA where it is not possible to establish any direct relationship between some costs and individual port users and where an assessment of the relative burden imposed on the NPA by these different users is difficult, the Agency is of the opinion that a more reasonable approach would be to treat all users equitably. In other words, if a port authority is faced with this set of circumstances and is going to focus on passenger volumes carried by different users as a basis for generating additional revenue, then all passengers should be treated the same. This approach has been suggested by the complainants where all passengers would be charged the same fee regardless of the type of passenger service utilized. Such an approach would be a straightforward means of generating additional revenue to cover revenue shortfalls. As well, such an approach would not result in situations of undue preference or undue advantage.
[Emphasis is mine]
[17] For these reasons, we would dismiss the appeal with costs to the Respondents with the exception of the Canadian Transportation Agency which has not asked for costs.
FEDERAL COURT OF APPEAL
SOLICITORS OF RECORD
DOCKET: A-465-06
STYLE OF CAUSE: NANAIMO PORT AUTHORITY v. CANADIAN TRANSPORTATION AGENCY ET AL.
PLACE OF HEARING: Vancouver, British Columbia
REASONS FOR JUDGMENT BY: DÉCARY J.A.
LINDEN J.A.
SEXTON J.A.
DELIVERED FROM THE BENCH BY: SEXTON J.A.
DATED: May 29, 2007
APPEARANCES:
Simon Wells FOR
THE APPELLANT
Ryan Garrett
Andray Renaud FOR
THE RESPONDENTS
Ron Ashley
Robert W. Grant
SOLICITORS OF RECORD:
|
Davis &
Company LLP |
FOR THE APPELLANT |
|
John H. Sims, Q.C. Deputy
Attorney General of Canada |
|
Heenan Blaikie LLP
Vancouver, B.C.