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| Sara Blake |
In Teksavvy Solutions Inc. v. Bell Canada, 2024 FCA 121, the Federal Court of Appeal said it may.
The court upheld as reasonable a 2019 decision of the Canadian Radio-television and Telecommunications Commission (CRTC). That decision had set just and reasonable rates that must be paid by Internet service providers, which lack their own infrastructure, for access to infrastructure built and maintained by telecommunications companies against whom they compete for customers.
The telecommunications companies asked the CRTC to review its 2019 decision. After a hearing, the CRTC concluded that its 2019 decision was substantially incorrect on 13 of 14 issues relating to its costing methodology. It determined a new costing methodology that resulted in a decision that increased the rates payable.
An Internet service provider appealed to the Federal Court of Appeal with leave. The statutory right of appeal is limited to questions of law or jurisdiction, with leave of the Court. The court ruled that questions of law include purely legal questions and extricable legal principles, but not questions of fact or of mixed law and fact, nor matters of discretion — and that questions of jurisdiction include issues of procedural fairness. No presumption that the appeal raises a question of law or jurisdiction arises from the granting of leave to appeal. It is not enough for a lawyer to assert that the appeal concerns the statute or a “legal test.” The court will look behind clever pleading to the substance of the issues.
The court noted that the question of how to go about rate-setting is a matter of discretion and policy founded on industry appreciation and specialized technical study. These are matters resting at the core of the CRTC’s exclusive jurisdiction.
In this case, the court ruled that the substance of the appeal concerned the CRTC’s policy choices and exercise of its discretion in setting just and reasonable rates. These issues are not reviewable.
The Internet service provider argued that the CRTC failed to apply any “method” or “technique” in revising the rates. These are statutory terms. I note that it’s an odd argument in that the entire decision of the CRTC is about “costing methodology.” The court rejected the argument that a method or technique for setting just and reasonable rates must be mathematical or based on objective data. The court ruled that the CRTC may be influenced by policy considerations, informed by multiple, often conflicting inputs, over which reasonable minds may differ, including regulatory experience, evolving circumstances, subjective assessments, factual appreciation and many rival methodologies. The court regarded this as a challenge to the CRTC’s choice of methods or techniques — that is, its exercise of discretion.
The Internet service provider argued that the doctrine of legitimate expectations required that the 2019 methodology continue to be applied. The court rejected this argument because the doctrine does not grant substantive rights and because the CRTC has explicit statutory authority to vary its decisions.
A significant context in this case concerns the ongoing nature of setting just and reasonable rates. Even though rate-setting decisions are termed “final,” there really is no final decision. Rates may be revised on many grounds, including changing circumstances, new information and new policy analyses leading to a different understanding of what is just and reasonable.
Allegations that the chair of the CRTC was biased were dismissed for failure to raise them during the proceedings before the CRTC.
The Internet service provider has sought leave to appeal to the Supreme Court of Canada.
Sara Blake is the author of Administrative Law in Canada, 7th edition, LexisNexis Canada. Her practice is restricted to clients who exercise statutory and regulatory powers.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the author’s firm, its clients, Law360 Canada, LexisNexis Canada or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
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