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Landmark Federal Court Judgment Overturns Cabinet Decision in Globalive Case

By Howard Knopf, Esq.

Justice Roger Hughes (pictured above) of the Federal Court has issued a landmark judgment reversing Cabinet's reversal of the CRTC Globalive decision.

Although Cabinet has the power to overrule the CRTC, Cabinet must follow the intent of the statute that confers upon it this power.  He says:

[117] In the first of the above ?Whereas? clauses, the Governor in Councilmisdirected itself in
law  by interpreting the Canadian ownership and control requirements of the Telecommunications
Act ,to use its words, ?in a way that ensures access to foreign capital, technology and experience is
encouraged?.  While the Governor in Council is correct in saying in the same clause that ?the Act
does not impose limits on foreign investment? it must be kept in mind that the Act does not refer
anywhere to ?foreign investment? or to ?foreign capital, technology and experience?. What the Act
does say is that telecommunications has an essential role in the maintenance of Canada?s identity
and sovereignty and provides a policy objective which requires Canadian ownership and control to
be promoted. There is no policy objective in the Act that encourages foreign investment. The Act
provides tests as to Canadian ownership and control including in subsection 16(3)(c) that a
corporation not be otherwise controlled by a non-Canadian. The intent of the Act is clear that a
situation such as this is to be determined in a manner so as to ensure that there is Canadian control. 
Where there is a concern that foreign investment and other factors may put Canadian control at risk
then it is the promotion of Canadian control that is to be the essential criterion upon which the
matter is to be determined. It is for Parliament not the Governor in Council to rewrite the Act.

(emphasis added)

There will be much analysis of this decision, which I found on the very worthy http://www.thewirereport.ca/ website. It is not yet on the Federal Court website, though it will no doubt appear very soon.

There was a voluminous record in this proceeding going back more than one year. There was a two day hearing involving several very high powered parties on January 19 and 20, 2011. Justice Hughes' 57 page decision followed 15 days later on February 4, 2011.

HK

Full post as published by Excess Copyright on February 05, 2011 (boomark / email).