Order in council not necessary to authorize Minister of Transport to enter into bilateral agreement

Federal court | Transportation | Carriers | Fares and freight rates

Jurisdiction. O Inc. was corporation carrying on business in area of short sea shipping and intermodal freight transportation. MAI Inc. was parent Crown providing services on two routes with mix of commercial and passenger traffic. As part of Constitution of Canada, Canada was constitutionally obliged to provide ferry service between North Sydney, Nova Scotia and Port aux Basques, Newfoundland and Labrador (constitutional route). This service was effected by MAI Inc.. Minister of Transport approved rates for MAI Inc.’s commercial freight services for constitutional route. O Inc. claimed that Minister permitted MAI Inc. to charge freight rates that were heavily subsidized, compete unfairly with and were detrimental to O Inc. and that decision was made without taking into account relevant considerations of national transportation policy. O Inc. brought application for judicial review to challenge decision. Application dismissed. There was no legislative basis conferring rate-setting on Minister and no delegation. MAI Inc.’s ability to set its rates arose from informal amendment of bilateral agreement, which amendment was agreed to by Canada and MAI Inc. as parties to that contract. MAI Inc. was not exercising jurisdiction or power conferred by or under Parliament or order made pursuant to prerogative of Crown when it made 2016/2017 freight rate decision, it was not acting as federal board, commission or tribunal pursuant to s. 2(1) of Federal Courts Act and as result, Federal Court did not have jurisdiction under s. 18(1) of Act. There was no legislative requirement that order in council be issued to permit Minister to enter into bilateral agreement, there was no legislative requirement that order in council be issued to permit this and Minister had authority and capacity to enter into contracts. As result, order in council was not necessary to authorize Minister to enter into bilateral agreement or to amend it.

Oceanex Inc. v. Canada (Transport) (2018), 2018 CarswellNat 753, 2018 FC 250, Cecily Y. Strickland J. (F.C.).

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