Canadian National Railway Co. v. Canada (Attorney General) et al., (2014) 458 N.R. 150 (SCC)

• Judge: McLachlin, C.J.C., LeBel, Abella, Rothstein, Cromwell, Karakatsanis and Wagner, JJ.
• Court: Supreme Court (Canada)
• Case Date: January 14, 2014
• Jurisdiction: Canada (Federal)
• Citations: (2014), 458 N.R. 150 (SCC);2014 SCC 40;371 DLR (4th) 219;[2014] ACS no 40;[2014] 2 SCR 135;240 ACWS (3d) 262;[2014] SCJ No 40 (QL)

CNR v. Can. (A.G.) (2014), 458 N.R. 150 (SCC)

MLB headnote and full text

[French language version follows English language version]

[La version française vient à la suite de la version anglaise]

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Temp. Cite: [2014] N.R. TBEd. MY.017

Canadian National Railway Company (appellant) v. Attorney General of Canada, Peace River Coal Inc. and Canadian Industrial Transportation Association (respondents)

(35145; 2014 SCC 40; 2014 CSC 40)

Indexed As: Canadian National Railway Co. v. Canada (Attorney General) et al.

Supreme Court of Canada

McLachlin, C.J.C., LeBel, Abella, Rothstein, Cromwell, Karakatsanis and Wagner, JJ.

May 23, 2014.

Summary:

Peace River Coal Inc., in its complaint to the Canadian Transportation Agency under s. 120.1 of the Canada Transportation Act, sought an order establishing reasonable fuel surcharge rates for the carriage of its coal by the Canadian National Railway Company (CN). The Agency described the complaint as a request for "an order requiring new fuel surcharge rates to apply to the confidential contract for carriage of its traffic by CN", and dismissed the application, finding that it had no jurisdiction to change the terms of the confidential contract. The Canadian Industrial Transportation Association (CITA), a shipper association of which Peace River was a member, submitted a petition to the Governor in Council to vary the decision, in the public interest. The Governor in Council issued an Order in Council rescinding the Agency's decision, pursuant to s. 40 of the Act. CN applied for judicial review of the Governor in Council's decision.

The Federal Court, in a decision reported at (2011), 398 F.T.R. 218, allowed CN's application and restored the Agency's decision. The Attorney General of Canada appealed. An appeal was also filed by Peace River and CITA. The appeals were consolidated for hearing.

The Federal Court of Appeal, in a decision reported at (2012), 440 N.R. 217, allowed the appeals and restored the decision of the Governor in Council. The reviewing judge erred by applying the correctness standard of review. Applying the reasonableness standard of review, the Court concluded that the decision of the Governor in Council was reasonable. CN appealed.

The Supreme Court of Canada dismissed the appeal.

Administrative Law - Topic 3205.2

Judicial review - General - Governmental action - [See fifth Carriers - Topic 1070 ].

Administrative Law - Topic 3211

Judicial review - General - Review of exercise of statutory power - [See fifth Carriers - Topic 1070 ].

Carriers - Topic 1005

Federal legislation - General - National Transportation Act (now Canada Transportation Act) - General - The Supreme Court of Canada discussed the legislative framework of s. 120.1 of the Canada Transportation Act - "Section 120.1 was added to the legislation following a 2001 statutory review of the Act and as part of amendments aimed at updating the legislative framework ... . Shippers had expressed concerns about incidental or ancillary charges, applied over and above freight rates for the movement of traffic. ... The amendments came as part of a move towards partial re-regulation in the rail sector after two decades of deregulation. ... In the context of this 'rebalancing' in favour of shippers, s. 120.1 was introduced to provide a new remedy for shippers who are subject to unreasonable charges or associated terms and conditions for the movement of traffic or for the provision of incidental services that are found in a tariff that applies to more than one shipper, other than a tariff resulting from a decision of an arbitrator in a final offer arbitration. It provides that, if, on complaint in writing to the Agency, the Agency finds that the charges or associated terms and conditions are unreasonable, the Agency may establish new charges or associated terms and conditions. Under s. 120.1(7), this complaint-based remedy does not apply to rates for the movement of traffic from origin to destination." - See paragraphs 22 to 24.

Carriers - Topic 1070

Federal legislation - Canadian Transport Commission (now Canadian Transportation Agency) - Review of Canadian Transportation Agency action by Governor in Council - The Governor in Council determined that the Canadian Transportation Agency could hear a complaint under s. 120.1 of the Canada Transportation Act, brought by a party to a confidential contract - The Supreme Court of Canada considered the nature of the question answered by the Governor in Council - "An issue of statutory interpretation is a question of law. In the present case, policy considerations that are at the heart of the complaint mechanism underlie the question of whether a party to a confidential contract can bring a complaint under s. 120.1. These policy considerations include the market power of a railway company in some circumstances and the relatively weaker position of shippers in those circumstances. These policy considerations may be at the root of the Governor in Council's interest in the statutory interpretation issue. However, although there may be policy considerations underlying the question at issue, that does not transform the nature of the question to one of policy or fact. The question of whether a party to a confidential contract can bring a complaint under s. 120.1 is one of law." - See paragraphs 29 to 33.

Carriers - Topic 1070

Federal legislation - Canadian Transport Commission (now Canadian Transportation Agency) - Review of Canadian Transportation Agency action by Governor in Council - The Governor in Council, under s. 40 of the Canada Transportation Act (CTA), rescinded a decision of the Canadian Transportation Agency, on a question of law (the question of whether a party to a confidential contract could bring a complaint under s. 120.1 of the CTA) - The Supreme Court of Canada held that the Governor in Council had such authority - "Section 40 does not contain any express limitations on the Governor in Council's authority. ... There is no language in the provision that suggests the Governor in Council's authority is in any way circumscribed, nor is the Governor in Council's authority restricted to answering issues of fact or policy. ... For the purposes of this appeal, it remains the case that the only inherent limitation is that the Governor in Council is not empowered to address issues arising under the CTA ab initio ... . In this sense, the Governor in Council does not have any substantive law-making capacity by virtue of s. 40; however, this restriction does not mean that questions of law are excluded from the scope of the Governor in Council's authority on review of Agency decisions." - See paragraphs 37 to 40.

Carriers - Topic 1070

Federal legislation - Canadian Transport Commission (now Canadian Transportation Agency) - Review of Canadian Transportation Agency action by Governor in Council - The Supreme Court of Canada held that the Governor in Council, on review of a decision of the Canadian Transportation Agency, had the authority to answer a question of law -Section 40 of the Canada Transportation Act (CTA) did not contain any express limitations on the Governor in Council's authority - "By contrast, where Parliament intended to circumscribe an avenue of review, it did so expressly. Section 41, for example, places a number of restrictions on the right to appeal a decision of the Agency to the Federal Court of Appeal ... The limitations contained in s. 41 provide strong indication that Parliament directed its attention to the issue of restrictions on the avenues of review and included intended limitations expressly. Unlike s. 40 of the CTA, Parliament has expressly limited the scope of the Governor in Council's authority under other legislation. ... The indication is that where Parliament has intended to limit the Governor in Council's authority, it has done so expressly." - See paragraphs 41 and 42.

Carriers - Topic 1070

Federal legislation - Canadian Transport Commission (now Canadian Transportation Agency) - Review of Canadian Transportation Agency action by Governor in Council - The Governor in Council, under s. 40 of the Canada Transportation Act (CTA), rescinded a decision of the Canadian Transportation Agency, on a question of law (the question of whether a party to a confidential contract could bring a complaint under s. 120.1 of the CTA) - CN argued that s. 40 should be read as limiting the Governor in Council's authority to questions of fact or policy, on the basis of the legislative history of ss. 40 and 41 - The Supreme Court of Canada stated that "the legislative history is ambiguous. ... As such, the Hansard evidence does not establish an unambiguous parliamentary intention to limit the authority of the Governor in Council. ... This Court has observed that, while Hansard evidence is admitted as relevant to the background and purpose of the legislation, courts must remain mindful of the limited reliability and weight of such evidence ... Accordingly, the evidence relied on by CN in this case does not support the argument that an implied restriction to questions of fact and policy should be read into the otherwise broad and unrestricted language in s. 40." - See paragraphs 43 to 47.

Carriers - Topic 1070

Federal legislation - Canadian Transport Commission (now Canadian Transportation Agency) - Review of Canadian Transportation Agency action by Governor in Council - The Supreme Court of Canada stated that the Dunsmuir framework was the appropriate mechanism for the court's judicial review of an adjudicative decision of the Governor in Council under s. 40 of the Canada Transportation Act (CTA) - "When the Governor in Council exercises its statutory authority under s. 40 of the CTA, it engages in its own substantive adjudication of the issue brought before it. The decision of the Governor in Council is then subject to judicial review by the Federal Court ... . In this way, the court exercises a supervisory function over the Governor in Council, a public authority exercising the statutory powers delegated to it under s. 40 of the CTA. ... The precedents instruct that the Dunsmuir framework applies to administrative decision-makers generally and not just to administrative tribunals. The Dunsmuir framework thus is applicable to adjudicative decisions of the Governor in Council." - See paragraphs 51 to 54.

Carriers - Topic 1070

Federal legislation - Canadian Transport Commission (now Canadian Transportation Agency) - Review of Canadian Transportation Agency action by Governor in Council - A shipper applied to the Canadian Transportation Agency under s. 120.1 of the Canada Transportation Act (CTA), for an order establishing a reasonable fuel surcharge for its traffic - The Agency dismissed the application on the ground that it did not have the jurisdiction to amend the confidential contract between the shipper and the carrier - The Governor in Council, pursuant to s. 40 of the CTA, rescinded the Agency's decision - The Supreme Court of Canada held that the applicable standard of review of the Governor in Council's decision was reasonableness - "Economic regulation is an area with which the Governor in Council has particular familiarity. ... The presumption of reasonableness review therefore applies to adjudicative decisions of the Governor in Council under s. 40. ... [F]urther support is found in the history of the Governor in Council's involvement in the regulation of railways in Canada. ... The presumption of deference is not rebutted here. ... This is also not a question of central importance to the legal system as a whole. ... In this case, the Governor in Council was interpreting the CTA, legislation closely related to its economic regulation review function. This issue of statutory interpretation does not fall within any of the categories of questions to which a correctness review applies." - See paragraphs 56 to 62.

Carriers - Topic 1070

Federal legislation - Canadian Transport Commission (now Canadian Transportation Agency) - Review of Canadian Transportation Agency action by Governor in Council - A shipper (PRC) applied to the Canadian Transportation Agency under s. 120.1 of the Canada Transportation Act (CTA), for an order establishing a reasonable fuel surcharge for its traffic - The Agency dismissed the application on the ground that it did not have the jurisdiction to amend the confidential contract between the shipper and the carrier - The Governor in Council, pursuant to s. 40 of the CTA, rescinded the Agency's decision - The Supreme Court of Canada held that the decision of the Governor in Council was reasonable - "The Governor in Council concluded that, while the terms of a confidential contract are relevant to whether PRC may benefit from any order made by the Agency, the existence of a confidential contract does not bar a shipper from applying for a reasonableness assessment under s. 120.1(1). This conclusion is consistent with the terms of the CTA ... There was also no evidence in this case that the parties attempted to contract out of the availability of the s. 120.1 remedy ... . The Governor in Council's interpretation of s. 120.1(1) is also supported by a reasonable view of the provision's purpose. ... Leaving access to the s. 120.1 complaint mechanism available to parties to confidential contracts can reasonably be said to be consistent with Parliament's intention to provide a measure of protection for shippers. The Governor in Council's decision is supported by the facts and the wording of s. 120.1(1), and it is consistent with Parliament's intention." - See paragraphs 63 to 67.

Crown - Topic 842

Governor General - Status, role and powers of - [See second Carriers - Topic 1070 ].

Railways - Topic 1004

Regulation - General - National Transportation Act (now Canada Transportation Act) - Interpretation - [See Carriers - Topic 1005 ].

Railways - Topic 7003

Tariffs, rates and tolls - General - Interpretation - [See Carriers - Topic 1005 ].

Statutes - Topic 1644

Interpretation - Extrinsic aids - Legislative history - Legislative debates - [See fourth Carriers - Topic 1070 ].

Statutes - Topic 2614

Interpretation - Interpretation of words and phrases - Modern rule (incl. interpretation by context) - Legislative or statutory context - [See third Carriers - Topic 1070 ].

Statutes - Topic 5517

Operation and effect - Delegated legislation - Orders-in-council - Judicial review - [See fifth, sixth and seventh Carriers - Topic 1070 ].

Cases Noticed:

Inuit Tapirisat of Canada and National Anti-Poverty Organization v. Canada (Attorney General), [1980] 2 S.C.R. 735; 33 N.R. 304, refd to. [para. 38].

Public Mobile Inc. v. Canada (Attorney General) et al., [2011] 3 F.C.R. 344; 420 N.R. 50; 2011 FCA 194, refd to. [para. 39].

British Columbia (Attorney General) v. Canada (Attorney General), [1994] 2 S.C.R. 41; 166 N.R. 81; 44 B.C.A.C. 1; 71 W.A.C. 1, refd to. [para. 40].

Rizzo & Rizzo Shoes Ltd. (Bankrupt), Re, [1998] 1 S.C.R. 27; 221 N.R. 241; 106 O.A.C. 1, refd to. [para. 47].

R. v. Morgentaler, [1993] 3 S.C.R. 463; 157 N.R. 97; 125 N.S.R.(2d) 81; 349 A.P.R. 81, refd to. [para. 47].

Canada (Attorney General) v. Mowat, [2011] 3 S.C.R. 471; 422 N.R. 248; 2011 SCC 53, refd to. [para. 47].

Canadian Human Rights Commission v. Canada (Attorney General) - see Canada (Attorney General) v. Mowat.

Placer Dome Canada Ltd. v. Ontario (Minister of Finance), [2006] 1 S.C.R. 715; 348 N.R. 148; 210 O.A.C. 342; 2006 SCC 20, refd to. [para. 47].

New Brunswick (Board of Management) v. Dunsmuir, [2008] 1 S.C.R. 190; 372 N.R. 1; 329 N.B.R.(2d) 1; 844 A.P.R. 1; 2008 SCC 9, refd to. [para. 50].

Shoppers Drug Mart Inc. et al. v. Ontario (Minister of Health and Long-Term Care) et al., [2013] 3 S.C.R. 810; 451 N.R. 80; 312 O.A.C. 169; 2013 SCC 64, refd to. [para. 51].

Katz Group Canada Inc. v. Ontario (Minister of Health and Long-Term Care) - see Shoppers Drug Mart Inc. et al. v. Ontario (Minister of Health and Long-Term Care) et al.

Catalyst Paper Corp. v. North Cowichan (District), [2012] 1 S.C.R. 5; 425 N.R. 22; 316 B.C.A.C. 1; 537 W.A.C. 1; 2012 SCC 2, refd to. [para. 54].

Alliance Pipeline Ltd. v. Smith, [2011] 1 S.C.R. 160; 412 N.R. 66; 2011 SCC 7, refd to. [para. 55].

Alberta Teachers' Association v. Information and Privacy Commissioner (Alta.) et al., [2011] 3 S.C.R. 654; 424 N.R. 70; 519 A.R. 1; 539 W.A.C. 1; 2011 SCC 61, refd to. [para. 55].

Statutes Noticed:

Canada Transportation Act, S.C. 1996, c. 10, sect. 40, sect. 41, sect. 120.1, sect. 126 [Appendix].

Authors and Works Noticed:

Canada, Hansard, House of Commons Debates of the Dominion of Canada, vol. LVIII, 3rd Sess., 9th Parliament (March 20, 1903), pp. 248, 259 [para. 44].

Canada, Hansard, House of Commons Debates, vol. XI, 1st Sess., 27th Parliament (January 10, 1967), p. 11630 [para. 44].

Canada, Parliamentary Information and Research Service, Legislative Summary LS-569E, Bill C-8, An Act to Amend the Canada Transportation Act (Railway Transportation) (2008), p. 1 [para. 22].

Canada, Standing Committee on Transport, Infrastructure and Communities, Evidence, No. 2, 2nd Sess., 39th Parliament (November 22, 2007), pp. 1 [para. 23]; 2 [paras. 22, 23].

Canada, Standing Committee on Transport, Infrastructure and Communities, Evidence, No. 3, 2nd Sess., 39th Parliament (November 27, 2007), pp. 1 to 2 [para. 23].

Canada, Transport Canada, Freedom to Move: The Legislation: Overview of National Transportation Legislation (1986), p. 8 [para. 26].

Coyne, H.E.B., The Railway Law of Canada (1947), p. 6 [para. 57].

Driedger, Elmer A., The Construction of Statutes (1974), p. 67 [para. 36].

Hansard - see Canada, Hansard, House of Commons Debates.

Romaniuk, B.S., and Janisch, H.N., Competition in Telecommunications: Who Polices the Transition? (1986), 18 Ottawa L. Rev. 561, p. 628 [para. 40].

Sullivan, Ruth, Sullivan on the Construction of Statutes (5th Ed. 2008), pp. 1 [para. 36]; 608 to 614 [para. 47].

Counsel:

Guy J. Pratte, Nadia Effendi and Éric Harvey, for the appellant;

Peter Southey and Sean Gaudet, for the respondent, the Attorney General of Canada;

Forrest C. Hume and Cynthia A. Millar, for the respondents, Peace River Coal Inc. and the Canadian Industrial Transportation Association.

Solicitors of Record:

Borden Ladner Gervais, Ottawa, Ontario; Canadian National Railway Company, Montreal, Quebec, for the appellant;

Attorney General of Canada, Toronto, Ontario, for the respondent, the Attorney General of Canada;

Davis, Vancouver, British Columbia, for the respondents, Peace River Coal Inc. and the Canadian Industrial Transportation Association.

This appeal was heard on January 14, 2014, before McLachlin, C.J.C., LeBel, Abella, Rothstein, Cromwell, Karakatsanis and Wagner, JJ., of the Supreme Court of Canada. In reasons written by Rothstein, J., the Court delivered the following judgment, dated May 23, 2014, in both official languages.