May 27, 2020

Telecommunications; Division of Powers & Municipal Bylaws

Calgary (City) v Bell Canada Inc., 2020 ABCA 211 (CanLII)

Keywords: Telecommunications; Division of Powers; Municipal Bylaw

Synopsis:

The City of Calgary and the Respondents (Bell Canada Inc., Rogers Communications Canada Inc., Shaw Communications Inc., and Telus Communications Inc.) are unable to reach an agreement on access to City rights-of-way for the construction of transmission lines.

The Respondents challenge the constitutional validity of the City of Calgary Bylaw 17M2016, Being a Bylaw of the City of Calgary to Regulate the Process for Access and Use of Municipal Rights-Of-Way Bylaw (the “Bylaw”) as it applies to telecommunications services.

The Chambers Judge finds that the Bylaw, as it applied to telecommunications services, was in pith and substance legislation in respect of telecommunications which is properly a subject of federal jurisdiction under s. 92(10)(a) of the Constitution Act, 1867. The Chambers Judge directs that, in order to ensure constitutional compliance, the words “telecommunications services” be severed from the definition of “utility provider” in the Bylaw.

The City appeals. The Court of Appeal dismisses the appeal.

Importance:

The Majority noted: “This appeal highlights the tension between telecommunication carriers, who must ensure high-quality and uninterrupted service across provincial borders, and cities, who have a legitimate interest in managing and regulating their rights-of-way.” (See para. 2).

In dissent, Wakeling J.A. starts: “This is an important constitutional division-of-powers case.” (See para. 129).

The Majority cited Newbury J.A.’s “compelling” constitutional reasons and analysis in Reference re Environmental Management Act (British Columbia), 2019 BCCA 181 at paras. 4-19, and noted the Supreme Court of Canada endorsed them in Reference re Environmental Management Act, 2020 SCC 1. (See para. 54).

For a detailed description of the applicable constitutional framework, see paras. 55-65 of the Majority’s reasons.

The applicable constitutional provision, s. 92(10)(a) reserves to the federal government jurisdiction over “Lines of Steam or other Ships, Railways, Canals, Telegraphs, and other Works and Undertakings connecting the Province with any other or others of the Provinces, or extending beyond the Limits of the Province”.

In order to find the Bylaw ultra vires, its pith and substance must fall under this federal head of power. (See para. 94).

Here, the Court of Appeal was satisfied that the Bylaw interfered with federal telecommunications powers under s. 92(10)(a):

The principles from these cases as applied to this appeal lead to the conclusion that the Bylaw is ultra vires. Even though the City made the Bylaw applicable to provincially regulated utilities in addition to the federally regulated Telecoms, the Bylaw will significantly affect the operation of the Telecoms as interprovincial carriers of the national telecommunications system. Jurisdiction over interprovincial undertakings, which includes telecommunications, was allocated to Parliament to allow a singular regulator to consider concerns beyond each municipality. That regulator is the CRTC, and the Telecommunications Act has legislated the manner in which municipal consent and access is to take place.

In the result, we conclude that the pith and substance (or dominant purpose) of the Bylaw as it relates to the Telecoms, is to regulate the location, construction, operation, maintenance and preservation of telecommunications networks, a matter that has been exclusively allocated to Parliament. Therefore, the Bylaw is ultra vires. (See paras. 110-111).

Although, in the Majority’s view, this conclusion was “the end of the matter” (see para. 112), the Majority briefly outlined and addressed “dominion paramountcy, interjurisdictional immunity and co-operative federalism” at paras. 119-127.

Ultimately, however, the Majority concluded that, to the extent that the Bylaw applies to telecommunications it was ultra vires: “We uphold the remedy granted by the chambers judge: to sever the words “telecommunications services” from the definition of “utility provider” in s. 3(1) of the Bylaw.” (See para. 128).

The presence of detailed, strongly written, dissenting reasons from Wakeling J.A. signal that, despite the Majority’s view, this indeed may not be “the end of the matter”. Justice Wakeling notes that Calgary has 15,000 lane kilometers of public right-of-way, with an approximate asset value of $11B (see para. 178) and concludes the City’s Bylaws and federal jurisdiction can “work in harmony” (see para. 349). With 351 paras. in total, of which 222 were in dissent, plus another 200 footnotes (that’s in the dissent only), is that a strong enough telecommunications signal for our Supreme Court to consider Leave to appeal? And does his decidedly independent approach to a constitutional division of powers analysis (his new 5-part test), which the majority pointed out was not the S.C.C.-endorsed test, does that more independent approach increase or diminish the signal strength re a possible Ottawa sojourn for four Calgary lawyers?

As Canadian telecoms roll out their “5G” capabilities across the country, is S.C.C. input on these issues fundamentally important for both Canadian municipalities and the telecommunications industry alike? Qui vivra, verra.

Counsel for the Appellant: Ola Malik & S.L. Best (City of Calgary, Calgary)

Counsel for the Respondents: Tamela Coates, Q.C. & Ricki-Lee Gerbrandt (Lawson Lundell LLP, Calgary)