Tuesday, February 8, 2011

Judicial review of Cabinet decisions

Public Mobile Inc. v. A.G. (Can) 2011 FC 130 deals with a remarkable circumstance where a decision of Cabinet was quashed by the Federal Court.

The CRTC had ruled Globalive, a recent entrant to Canada's telecom market, failed to meet foreign-ownership rules because most of its equity and debt is owned by Orascom, an Egyptian telecom carrier. This decision was overturned by the Governor in Council which held Globalive is Canadian-controlled, noting that most of the company's voting shares are owned by Canadians and most of its board seats are occupied by Canadians. The Governor in Council's decision was clearly politically motivated – not that such is necessarily a bad thing. Industry Minister Tony Clement expressly said the Federal Government's desire to promote competition in the wireless industry was a key factor in the government decision.

The Federal Court noted that even decisions of the Governor in Council are subject to review:

[62] The general supervisory function of the Courts over administrative powers exercised by government decision-makers was considered by the Supreme Court of Canada in Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190. All public authority exercises of decision-making powers must find their source in law, whether derived from the enabling statute or the pertinent common law, or civil law. This principle recognizes that even the Governor in Council must adhere to the rule of law and to the statutory enactments of Parliament.

Once having found the Governor in Council's decisions are subject to review the remainder of the decision is fairly straightforward administrative law. The Court found the decision had to be correct:

[105] As determined above, the Decision of the Governor in Council involves legal findings and is to be determined on a standard of correctness.

Having found that correctness applied the Court found the decision was based on improper considerations (para 116 – 119) and had to be quashed.

The decision of the Governor in Council was certainly politically based. One suspects the Federal Government did not anticipate the decision would be reviewed by the Courts and certainly some might argue the matter ought not to have been justiciable. Nevertheless, the decision was, or should have been, constrained by statute, and the decision was made regardless of the statutory underpinnings.

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