Role of s. 2 of Canada Transportation Act was to displace presumption of Crown immunity

Transportation - Carriers - Fares and freight rates

Terms of Union of Newfoundland with Canada required Canada to maintain freight and passenger ferry service on “constitutional route” between North Sydney, Nova Scotia and Port aux Basques, Newfoundland and Labrador. Respondent, federal Crown corporation, had been carrying out that constitutional obligation, and it was paid substantial subsidies by Canada. Petitioner, privately-owned corporation, was respondent’s competitor, repeatedly complained to federal government about respondent’s low rates, and level of federal subsidies paid to respondent, which it claimed distorted market and caused it harm. Petitioner also complained about failure to take into account National Transportation Policy (NTP) set out in s. 5 of Canada Transportation Act (CTA) in setting respondent's rates. Petitioner applied for judicial review challenging Minister of Transport’s (Minister) decision approving respondent's 2016/17 commercial freight rates. Federal Court determined that it was respondent who made decision to implement rates, but in making decision it was not “federal board, commission or other tribunal” within meaning of s. 2(1) of Federal Courts Act (FCA) and did not have jurisdiction to review decision. Federal Court considered several issues in event its decision on jurisdiction was wrong holding that petitioner did not have direct standing to bring application, but it exercised its discretion to grant public interest standing to petitioner. Federal Court held that NTP was not required consideration in setting rates, so failure to consider NTP when setting rates was not reviewable error and dismissing petitioner’s application. Petitioner appealed. Appeal dismissed. Federal Court considered relevant factors in deciding to grant public interest standing to petitioner, and there was no basis to interfere with its exercise of discretion. Federal Court made no palpable and overriding error or any extricable error of law in determining that respondent made rate decision and there was ample evidence supporting conclusion that it was respondent who made decision. Federal Court erred in concluding that it did not have jurisdiction to review rate decision made by respondent. In making rate decision respondent was exercising its powers of natural person conferred by Canada Business Corporations Act (CBCA). Federal Court was wrong to read that statute out of definition of “federal board, commission or other tribunal”. Considering its role as Crown corporation fulfilling constitutional obligation, respondent was public body, and its rate decision was of public not private character. Federal Court's conclusion that CBCA was not “Act of Parliament” within meaning of definition of “federal board, commission or other tribunal” in FCA was inconsistent with plain meaning of definition, which referred to powers conferred by or under “Act of Parliament” without qualification. Federal Court's floodgates concern was exaggerated and did not justify limited interpretation. Judicial review was limited to decisions by public bodies that had public character. Setting of rates was matter of contractual responsibility, and its source was respondent's statutory power to contract. Rate-setting decision had public character and it was clear that respondent was public body for purpose of judicial review, and it had public policy objective. Nature of decision was of public character and it arose from respondent's role in fulfilling constitutional obligation and from potential effect of rates on accessibility of service that was constitutionally required to provide. petitioner's challenge to decision based on failure to consider NTP raised issue of public law going to legality of state decision-making and prerequisites for judicial review of rate decision were made out. Federal Court correctly determined that there was no legal requirement to consider NTP in setting rates Federal Court's decision reflected proper application of required textual, contextual and purposive approach to interpretation of s. 5 of CTA, and it was fully consistent with authorities. Federal Court correctly concluded that role of s. 2 of CTA was to merely displace presumption of Crown immunity, rather than to render NTP substantive limitation on exercise of regulatory authority. Section 3 was not meaningless if it was not interpreted as requiring Minster to consider NTP in making decisions, but it played role in ensuring that both limited provisions of CTA that referred to NTP, and regulatory provisions CTA contained, were given their proper application. If Minister did make rate decision, he was not required to consider NTP in doing so and thus, there was no basis to come to different conclusion respecting respondent in its rate-setting role.

Oceanex Inc. v. Canada (Transport) (2019), 2019 CarswellNat 5444, 2019 FCA 250, Eleanor R. Dawson J.A., Judith Woods J.A., and J.B. Laskin J.A. (F.C.A.); affirmed (2018), 2018 CarswellNat 753, 2018 FC 250, Cecily Y. Strickland J. (F.C.).

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