Issue hadn’t been decided by previous SCC decision related to the same provision, but fresh review leads to the same result
The Federal Court of Appeal has determined, in Bell Canada v. 7265921 Canada Ltd., that the CRTC has overstepped its legislative bounds by imposing a “wholesale code” (the Code) which regulates affiliation agreements between programming undertakings (PUs) and broadcasting distribution undertakings (BDUs). The wholesale code was made mandatory via Broadcasting Order 2015-439 (the Order).
Bell Canada, a PU, argued that the Code and Order are beyond the authority of the CRTC on the basis that:
- the Supreme Court of Canada had already decided this issue in the case of Cogeco;
- adopting the Code is not within the jurisdiction conferred on the CRTC by paragraph 9(1)(h) of the Broadcasting Act; and
- the Code, by operation, conflicts with Bell’s sole right to telecommunicate or authorize telecommunication of its copyright works and to licence the use of those works under the Copyright Act.
On the first issue, all three judges of the Federal Court of Appeal determined that that Cogeco case did not dispose of the issue. That case dealt with the question of whether the CRTC was authorized to implement a regime that allowed broadcasters to negotiate directly with BDUs for the retransmission of all of their signals (the CRTC found it wasn’t). The application of paragraph 9(1)(h) in this particular case remained an open question, still to be resolved. And the majority of the court resolved it be determining that the CRTC did not have jurisdiction to create the Code and issue the Order.
Applying a standard of reasonableness, the majority of the Court determined that s. 9(1)(h) does not grant a general power to regulate the terms and conditions of affiliation agreements. The section reads:
9 (1) Subject to this Part, the Commission may, in furtherance of its objects,
(h) require any licensee who is authorized to carry on a distribution undertaking to carry, on such terms and conditions as the Commission deems appropriate, programming services specified by the Commission.
Justices Wood and Nadon concluded that the CRTC’s apparent interpretation of this provision goes beyond the “ordinary meaning” of the language in paragraph 9(1)(h) and is not reasonably supported by a textual, contextual and purposive interpretation of the legislation. They concluded, it is not reasonable to expand the language of paragraph 9(1)(h) by way of necessary implication to include powers necessary to fulfill the CRTC’s mandate.
On the question of whether this scheme conflicts with Bell Canada’s rights under the Copyright Act, all three judges found that there was no conflict. Although the Code would restrict how a content owner (the PU) may exercise its copyright by limiting some of the terms and conditions it is allowed to include in an affiliation agreement, they are nevertheless free to decide whether to enter into an affiliation agreement at all, and the content owner would still retain control over how and when its copyright works will be used.
In addition, the Code does not conflict with Parliament’s purpose in creating a carefully balanced copyright regime. It does not purport to regulate copyright interests of the programming undertakings, but instead establishes minimum terms and conditions governing the affiliation agreements themselves. These agreements only come into being when the programming undertaking has decided it wants to license the use of its copyright. The programming undertaking can refuse the telecommunication of their copyright protected programs without their consent.