Implied Powers, Express Powers and Statutory Text, Purpose and Context

In a previous post I expressed some scepticism about the distinction between express and implied statutory powers. In this post I suggest that the distinction should be jettisoned in favour of a focus on statutory interpretation, using the ordinary tools of text, purpose and context.

In terms of the importance of text, it is useful to contrast several Supreme Court of Canada decisions addressing the authority of the Canadian Radio-television and Telecommunications Commission. Bell Canada v. Bell Aliant Regional Communications dealt with the Commission’s rate-setting authority.[1] Having performed some economic wizardry, the Commission came up with a scheme whereby large companies (like Bell) providing residential telephone services in urban areas would be subject to a price cap. The cap was calculated by reference to inflation (which would typically permit rising prices) but also by reference to the lack of competition in the market (which the Commission accounted for by reducing the level of prices that could be charged). With low inflation, however, the cap would exert downward pressure on prices, leading the Commission to fear that new entrants would be dissuaded from trying their hand in the residential telephone market. So the Commission compromised: prices actually charged could be greater than the cap, but if so the large companies would have to put the difference in a so-called “deferral account”. In a subsequent decision, the Commission ordered the companies to spend the deferral accounts to improve accessibility for customers with disabilities, enhance broadband internet access in rural areas and distribute any remaining funds to urban telephone subscribers in the form of rebates. The large companies took issue with the requirement that the remaining funds should be distributed to subscribers.

The Supreme Court of Canada held that the Commission had the power to order the creation of deferral accounts and to control the distribution of the funds. Under section 27(1) of the Telecommunications Act,[2] the Commission has the authority to set “just and reasonable” rates; in doing so, s. 27(5) provides, the Commission “may adopt any method or technique that it considers appropriate”; the Commission’s conclusions on what is just and reasonable (and the methods or techniques to be used) are “binding and conclusive” (s. 52(1)); and the Commission could order a regulated company to use any accounting method (s. 37(1)(a)). In Abella J’s view, the statutory scheme “furthered enhanced” the traditionally wide discretion of the Commission in setting rates.[3] Indeed, the Commission was also to have regard for the (very) broad statutory objectives set out in the Act, permitting it to use a “diverse range of methods” to achieve those objectives.[4] In sum, the Commission was exercising “broad authority” that was “fully supported by unambiguous statutory language”.[5] It could, accordingly, require the creation of deferral accounts – indeed, this was a means of ensuring that the rates were just and reasonable[6] – and, as a corollary, regulate the distribution of the proceeds of those accounts.[7]

Similarly, in Bell Canada v. Canada (Canadian Radio-Television and Telecommunications Commission),[8] the breadth of the Commission’s rate-setting power was of central importance. There, the Commission had set an interim rate which it revisited in a subsequent hearing: economic circumstances had changed so much that the interim rate turned out not to be just and reasonable. For a unanimous Supreme Court, Gonthier J. held that the Commission had the requisite authority:

[I]nterim rates must be just and reasonable on the basis of the evidence filed by the applicant at the hearing or otherwise available for the interim decision.  It would be useless to order a final hearing if the appellant was bound by the evidence filed at the interim hearing.  Furthermore, the interim rate increase was granted on the basis that the length of the proceedings could cause a serious deterioration in the financial condition of the respondent.  Only once such an emergency situation was found to exist did the appellant ask itself what rate increase would be just and reasonable on the basis of the available evidence and for the purpose of preventing such a financial deterioration.  The inherent differences between a decision made on an interim basis and a decision made on a final basis clearly justify the power to revisit the period during which interim rates were in force…I am bolstered in my opinion by the fact that the regulatory scheme…gives the appellant very broad procedural powers for the purpose of ensuring that telephone rates and tariffs are, at all times, just and reasonable.  Within this regulatory framework, the power to make appropriate orders for the purpose of remedying interim rates which are not just and reasonable is a necessary adjunct to the power to make interim orders.[9]

By contrast, in Barrie Public Utilities v. Canadian Cable Television Association,[10] the Commission ordered various utility companies to give the Association access to power poles, on the basis of s. 43(5) of the Telecommunications Act, which permits a service provider to “apply to the Commission for a right of access to the supporting structure for the purpose of providing such services and the Commission may grant the permission subject to any conditions that the Commission determines”. But this provision applied only to “transmission lines” located on public land, not to distribution lines on private land.[11] (The distinction between transmission and distribution is not obvious to the ordinary reader but is fundamental in the world of utilities regulation, where transmission and distribution are distinct functions.) And when read with the other subsections in s. 43, it was clear that the provision related to transmission lines, not power poles.[12] Given these features of the text, which tightly confined the Commission’s authority, it was inappropriate for the Commission to rely on its broad statutory objectives:

The consideration of legislative objectives is one aspect of the modern approach to statutory interpretation.  Yet, courts and tribunals must invoke statements of legislative purpose to elucidate, not to frustrate, legislative intent.  In my view, the CRTC relied on policy objectives to set aside Parliament’s discernable intent as revealed by the plain meaning of s. 43(5), s. 43 generally and the Act as a whole.  In effect, the CRTC treated these objectives as power-conferring provisions.  This was a mistake.[13]

By contrast to Bell Aliant, the text was tight, not loose, and the Commission could not use vague statutory objectives to broaden the scope of its authority. There could be no implicit power to order utilities companies to give access to power poles.

The distinction between jurisdiction-granting and power-conferring provisions took centre stage in Reference re Broadcasting Regulatory Policy CRTC 2010-167 and Broadcasting Order CRTC 2010-168, known as the Cogeco decision.[14] Here, the Commission sought to empower local television stations to negotiate deals with cable and satellite companies wishing to retransmit local signals. This case arose under the Commission’s jurisdiction over broadcasting. Section 3 of the Broadcasting Act sets out forty-odd statutory objectives as part of Canada’s national broadcasting policy, for which the Commission is responsible in terms of regulation and surveillance.[15] Previously, the Supreme Court had taken the view that in exercising its regulation-making powers, the Commission could properly have regard to the objectives set out in s. 3.[16] That was what the Commission had done: it referred to the broad basket clauses in ss. 9 and 10 (the licensing and regulation-making provisions of the Broadcasting Act) in tandem with the policy objectives in s. 3 to justify the creation of a ‘value for signal regime’.

In Cogeco, however, Rothstein J. for the majority held that “it was not sufficient for the CRTC to refer in isolation to policy objectives in s. 3 and deem that the proposed value for signal regime would be beneficial for the achievement of those objectives”: rather, it was “necessary to consider the jurisdiction granted to the CRTC under ss. 9 and 10 of the Act to attach conditions to licences and to make regulations”.[17] Again, the tightness of the text was critically important. Unlike in Bell Aliant, the Commission’s powers were tightly confined:

[In Bell Aliant, the] broad, express grant of jurisdiction authorized the CRTC to create and use the deferral accounts at issue in that case.  This stands in marked contrast to the provisions on which the broadcasters seek to rely in this case, which consist of a general power to make regulations under s. 10(1)(k) and a broad licensing power under s. 9(1)(b)(i).  Jurisdiction-granting provisions are not analogous to general regulation making or licensing authority because the former are express grants of specific authority from Parliament while the latter must be interpreted so as not to confer unfettered discretion not contemplated by the jurisdiction-granting provisions of the legislation. That is the fundamental point.  Were the only constraint on the CRTC’s powers under s. 10(1) to be found in whether the enacted regulation goes towards a policy objective in s. 3(1), the only limit to the CRTC’s regulatory power would be its own discretionary determination of the wisdom of its proposed regulation in light of any policy objective in s. 3(1).  This would be akin to unfettered discretion. 

Again, general objectives could not be used to make an end-run around specific constraints on regulation-making and licensing powers. The general cannot be permitted to swallow the specific.[18] Although the precise scope of the Cogeco decision – especially its general distinction between jurisdiction-granting and power-conferring provisions – is debatable,[19] it usefully highlights the importance of statutory text.

In general, then, the breadth of the statutory language at issue will be a key consideration in determining whether a claimed power is necessarily implicit in the statutory scheme.[20]

The importance of statutory purpose is evident from the ATCO case. A gas utility no longer needed a facility it owned in the Calgary area and wished to sell it. It made a significant capital gain when it sold the asset, due to the value of the land the facility was located on. Could the utility keep the profits, or should they be distributed to the ratepayers? Under provincial legislation, the Board had to approve any sale of assets by the utility.[21] The Board also had general authority to “make any further order and impose any additional conditions that the Board considers necessary in the public interest”.[22] Bastarache J. held that this power did not permit the Board to impose a profit-distribution condition on the sale of the defunct facility, notwithstanding its “infinitely elastic scope”. [23] The purpose of the power to set conditions was to protect consumers from degradations in service, to maximize a utility’s aggregate economic benefit (rather than one group of stakeholders) and to prevent favouritism to investors:

[I]t is not necessary for the Board in carrying out its mandate to order the utility to surrender the bulk of the proceeds from a sale of its property in order for that utility to obtain approval for a sale. The Board has other options within its jurisdiction which do not involve the appropriation of the sale proceeds, the most obvious one being to refuse to approve a sale that will, in the Board’s view, affect the quality and/or quantity of the service offered by the utility or create additional operating costs for the future…In my view, allowing the Board to confiscate the net gain of the sale under the pretence of protecting rate-paying customers and acting in the “public interest” would be a serious misconception of the powers of the Board to approve a sale; to do so would completely disregard the economic rationale of rate setting…[A] public utility is first and foremost a private business venture which has as its goal the making of profits.[24]

Put another way, the impressively broad authority could only be exercised to achieve the Board’s statutory objectives. Because the condition in ATCO did not relate to the raison d’etre of the regulatory compact, the Board had no power to impose it on the utility.[25]

By contrast, in Pierre v. McRae,[26] statutory purpose counselled in favour of implying a power. A coroner had been asked to investigate two deaths of young Indigenous men in northwestern Ontario. The families of the deceased raised concerns about the representativeness of the rolls from which coroners’ juries were selected. Having produced an affidavit detailing these concerns, the families asked the coroners to issue summonses to the director of court operations in the region to explain how the jury rolls had been constructed. The coroners refused and the families sought judicial review. Under the Coroners Act,[27] the coroner had the authority to compel the production of a jury roll and to direct that five people from the roll serve as jurors. The Ontario Court of Appeal held that the coroners had the power by necessary implication to compel information about the creation of the rolls in order to fulfil the statutory mandate under the Coroners Act:

The coroner’s mandate to arrange for an inquest jury must necessarily include the power to ensure that the jury is lawfully constituted. A lawfully constituted jury is one that is representative and impartial. To be representative and impartial, the jurors must initially be chosen from a jury roll … that is representative. Thus, to fulfill the mandate conferred by the Act, a coroner has the necessarily implied jurisdiction to inquire into the representativeness of a jury roll from which an inquest jury is chosen.[28]

An unrepresentative jury would be, from the point of view of the effective operation of the legislation, no jury at all.[29]

Consider, lastly, statutory context. To begin with, the cases discussed above relating to the Canadian Radio-television and Telecommunications Commission are exemplars of consideration of statutory context. In each instance, the Supreme Court looked to the overall scheme of the relevant legislation in order to develop a harmonious interpretation of the provisions at issue, or, less grandly, an interpretation that would ‘fit’ the statutory scheme as a whole.

Beyond the scheme of the legislation, other contextual considerations will influence whether a particular power should be recognized. Most importantly, the more coercive or consequential the power sought, the less likely it is that the power will be found to exist: relatively clear statutory authority is required for relatively coercive or consequential powers. Let us begin with Canada Labour Relations Board v. Quebecair.[30] A union brought an application to the Canada Labour Relations Board seeking a declaration that arrangements made by two airlines triggered substantive obligations under the Canada Labour Code.[31] Having first asked the airlines nicely to hand over documentations – a request that was politely refused – the Board sought to compel production in order to determine whether it should proceed to a formal hearing. In this regard, it invoked a statutory power to “compel a person who refuses to provide answers or information by summoning that person to attend, and thereupon require that person to testify and produce the documentary evidence”.[32] However, the Supreme Court of Canada held, this power was exercisable only in “the context of a formal hearing”.[33] It could not be used at a preliminary stage in the process, in part because of the “coercive” nature of the power: “because s. 118(a) is an exceptional provision which grants to a body a significant power, special attention must be given for this reason alone to any limits which are placed on the exercise of that power by the words of the provision granting it”.[34] As L’Heureux-Dubé J.A. (as she then was) once observed, “The power of constraint is a significant limitation on the principles of individual liberty” and as a consequence, “[l]egislation conferring that power must be construed with the greatest caution and the prescribed procedure must be regarded as a matter of strict law”.[35]

Another useful example is the decision in York University v. Canadian Copyright Licensing Agency (Access Copyright).[36] At issue here was the principle that there must be clear statutory authority to impose a requirement to pay monies. This constitutional fundamental has an important place in the common law tradition, given famous expression for instance in the interpretive principle “that taxes or charges may not be levied by the State or public authorities in the absence of express words. The courts will not permit the imposition of a tax or other fiscal measure through the use of slack or oblique language”:[37] “In no case is the exercise of the delegated authority more carefully scrutinized than in the case where it is claimed that it gives a right to impose any financial burden on the subject”.[38] Here, the Supreme Court had to determine whether tariffs issued by the Copyright Board are mandatory: Access Copyright had proposed an interim tariff, which the Board granted, but when Access Copyright sued York University to enforce the terms of the tariff, York University argued that the tariff was not mandatory. Access Copyright had argued “a collective society may sue for unpaid royalties against a user who makes a use of a work within the society’s repertoire when the use is not separately licensed or exempted by fair dealing”.[39] But no such conditions were found in the legislation. Accordingly, Abella J held, the tariff could not be mandatory, a requirement to pay monies must be based on “clear and distinct legal authority showing that this was Parliament’s intent”.[40] As there was “no such language creating a duty to pay approved royalties to a collective society that operates a licensing scheme anywhere in the Act”,[41] the tariff could not be mandatory. Where someone has voluntarily become a licensee, the tariff is payable. But if they do not, it is not. It would be up to Parliament to change the law or to Access Copyright to change its corporate structure in order to make tariffs mandatory. But having regard to constitutional principle, there was no basis for treating this tariff as mandatory. Express statutory authority was required.[42]

Quite what ‘personal liberty’ and ‘coercion’ might mean in this context is a difficult question, of course.[43] Whether such notions should have a place in interpreting the scope of statutory powers might be contested. After all, the protagonists in Quebecair and Access Copyright were well-resourced institutional actors, not frail naifs. Claims of statutory overreach based on lofty liberal ideals might benefit the powerful more than the downtrodden. Moreover, given the hazy contours of ‘personal liberty’ and ‘coercion’, it will be difficult for legislatures to predict with any degree of certainty when it needs to use ‘clear’ statutory language and, indeed, what ‘clear’ means.[44] As it happens, judicial solicitude for individual interests is balanced against an appreciation of the necessities of good administration. Accordingly, the Supreme Court of Canada has stated what might be called a principle of necessity in the following terms: “While the courts must refrain from overly expanding the powers of these regulators through judicial legislation, they must also avoid rendering them sterile by interpreting enabling legislation too formalistically”.[45] This is, indeed, a general interpretive principle in Canadian law, at the federal level[46] and provincially.[47]

As with any statutory interpretation exercise, absolute certainty is likely to be unattainable, as the provisions at issue will often be broad enough “to induce two people to spend good money in backing two opposing views as to their meaning”,[48] but it is more helpful in my view to think of statutory powers as a single category – identifiable by reference to statutory text, purpose and context – rather than as falling into two distinct categories of express powers and implied powers. There are only “statutory powers”.

[1] 2009 SCC 40, [2009] 2 SCR 764.

[2] SC 1993, c 38.

[3] Bell Aliant, at para. 41.

[4] Bell Aliant, at para. 48.

[5] Bell Aliant, at para. 50.

[6] Bell Aliant, at para. 72.

[7] Bell Aliant, at para. 56. See also Green v. Law Society of Manitoba, 2017 SCC 20, [2017] 1 SCR 360, at para. 42.

[8] [1989] 1 SCR 1722.

[9] Ibid., at pp. 1756-1757.

[10] 2003 SCC 28, [2003] 1 SCR 476.

[11] Ibid., at paras. 24-26.

[12] Ibid., at paras. 27-32.

[13] Ibid., at para. 42.

[14] 2012 SCC 68, [2012] 3 SCR 489.

[15] SC 1991, c. 11, ss. 3, 5.

[16] See e.g. CKOY Ltd. v. The Queen, [1979] 1 S.C.R. 2, at p. 11 :

The grant of power to enact regulations is given to the Commission by s. 16 of the statute. By its opening words, such a power is directed to be exercised “in furtherance of its objects”. Section 15 is entitled “Objects of the Commission”. For our purposes, the said objects may be briefly stated in the last words of s. 15, “with a view to implementing the broadcasting policy enunciated in section 3 of this Act”. Therefore, I agree with the courts below that the validity of any regulation enacted in reliance upon s. 16 must be tested by determining whether the regulation deals with a class of subject referred to in s. 3 of the statute and that in doing so the Court looks at the regulation objectively.

[17] Cogeco, at para. 23.

[18] Syndicat des employés de production du Québec et de l’Acadie v. Canada Labour Relations Board, [1984] 2 S.C.R. 412, at pp. 432-433, per Beetz J., discussing a general provision in the Board’s constitutive statute:

It is quite possible that s. 121 covers only the powers necessary to perform the tasks expressly conferred on the Board by the Code, as Pratte J. indicated. Nevertheless, I consider that even if it covers autonomous or principal powers, like that of ordering a reference to arbitration, and not merely incidental or collateral powers, it cannot cover autonomous powers designed to remedy situations which the Code has dealt with elsewhere, and for which it has prescribed specific powers, as is the case with unlawful strikes. Here, the legislator has not only specified the principal powers of the Board in s. 182, but its collateral powers as well in s. 183.1. These two sections contain an exhaustive description of the Board’s authority over unlawful strikes and cover it completely.

[19] As Professor Keyes observes:

This passage demonstrates concern about the breadth of regulation-making authority and makes a distinction turning on the specificity of an enabling provision: the more specific it is in describing the authority, the more likely it will be characterized as “jurisdiction-conferring” and capable of authorizing a particular regulatory measure. In contrast, “general regulation-making authority” must be interpreted to as not to create “unfettered” discretion. The premise of this distinction is that legislative bodies intend to exercise control over regulation-makers through the language of enabling provisions.[19]

John Mark Keyes, Executive Legislation, 3rd edition (2021) p. 200. See similarly Brandon Kain, « Developments in Communications Law: The 2012-2013 Term — The Broadcasting Reference, the Supreme Court and the Limits of the CRTC » (2014), 64 S.C.L.R. (2d) 63 – 111, par. 50; Société Radio Canada v. Canada (Attorney General), 2023 FCA 131.

[20] See similarly Chrysler Canada Ltd. v. Canada (Competition Tribunal), [1992] 2 SCR 394, at pp. 411-412.

[21] Gas Utilities Act, RSA 2000, c G-5, s. 26(2).

[22] Alberta Energy and Utilities Board Act, RSA 2000, c A-17, s. 15(3)(d). See also Public Utilities Act, RSA 2000, c P-45, s. 37:

In matters within its jurisdiction the Board may order and require any person or local authority to do forthwith or within or at a specified time and in any manner prescribed by the Board, so far as it is not inconsistent with this Act or any other Act conferring jurisdiction, any act, matter or thing that the person or local authority is or may be required to do under this Act or under any other general or special Act, and may forbid the doing or continuing of any act, matter or thing that is in contravention of any such Act or of any regulation, rule, order or direction of the Board.

[23] ATCO, at para. 75.

[24] ATCO, at paras. 77-78.

[25] See similarly Toronto Hydro-Electric System Ltd. v. Ontario Energy Board (2008), 298 DLR (4th) 231 (Ont. Div. Ct.).

[26] 2011 ONCA 187.

[27] RSO 1990, c C.37.

[28] 2011 ONCA 187, at para. 38.

[29] See also C.C.W. v. Ontario Health Insurance Plan (2009), 305 DLR (4th) 538, at paras. 75-77 (Ont. Div. Ct.); Callaghan v. Canada (Chief Electoral Officer), 2011 FCA 74, at paras. 57-69; Canada (Attorney General) v. Vorobyov, 2014 FCA 102, at paras. 45-47. Compare Balancing Pool v. TransAlta Corporation, 2013 ABCA 409, at para. 38 (investigative power helpful but not necessary).

[30] [1993] 3 SCR 724.

[31] RSC 1970, c. L-1.

[32] Quebecair, at p. 735.

[33] Ibid., at p. 736.

[34] Ibid., at p. 737.

[35] Ibid., at p. 738, citing and translating Tremblay v. Séguin, [1980] C.A. 15, at p. 16.

[36] 2021 SCC 32.

[37] Hogan, Morgan and Daly, Administrative Law in Ireland, 5th ed., at para. 12-40. This principle flows from Attorney-General v. Wilts United Dairies, Ltd. (1921), 37  L.T.R. 884 (C.A.), at p. 885, aff’d (1922), 91 L.J.K.B. 897 (H.L.), where Scrutton L.J. held:

It is conceivable that Parliament, which may pass legislation requiring the subject to pay money to the Crown, may also delegate its powers of imposing such payments to the Executive, but in my view the clearest words should be required before the Courts hold that such an unusual delegation has taken place.  As Chief Justice Wilde said in Gosling v. Veley, 12 Q.B., at p. 407 : “The rule of law that no pecuniary burden can be imposed upon the subjects of this country, by whatever name it may be called, whether tax, due, rate or toll, except upon clear and distinct legal authority, established by those who seek to impose the burthen, has been so often the subject of legal decision that it may be deemed a legal axiom, and requires no authority to be cited in support of it.”

[38] Gruen Watch Co. of Canada Ltd. v. Attorney-General of Canada, [1950] O.R. 429 (H.C.), at p. 438, per McRuer CJHC.

[39] 2021 SCC 32, at para. 31.

[40] Canadian Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57, [2015] 3 S.C.R. 615, at para. 107, per Rothstein J.

[41] Ibid., at para. 32.

[42] See also 3188825 Canada inc. c. Ville de Montréal, 2019 QCCA 1075, at para. 22, citing ATCO at para. 79.

[43] Brown and Evans comment, on statutory interpretation generally, not limiting themselves to implied powers:

[T]he concept of a government with limited powers has also been understood to mean that grants of authority should be construed so as to interfere as little as possible with the rights of individuals. And, to this end, courts have developed a range of presumptions for use in the interpretation of statutes that grant administrative power, the overall thrust of which has been to require legislatures to spell out unequivocally any powers they intend to confer on a public official or institution that limits or removes an individual’s common law rights. For example, the requirement of a clear statement has been applied to legislation that interferes with the conduct of a business, the practice of a profession, the enjoyment of property, and the enjoyment of vested rights. Furthermore, the analogous presumption that a grant of authority does not confer power with retroactive effect is rooted in the notion that individuals should be able to rely on the law in order to plan their lives and order their affairs…

Judicial Review of Administrative Action (Carswell, looseleaf), at 13:1320. Citations omitted.

[44] See also Jason Varuhas, “The Principle of Legality” (2020) 79 Cambridge Law Journal 578.

[45] Bell Canada v. Canada (Canadian Radio-television and Telecommunications Commission), [1989] 1 S.C.R. 1722, at p. 1756.

[46] See e.g. Interpretation Act, RSO 1990, c I.11, s. 28(b); Interpretation Act, RSBC 1996, c 238, s. 27(2).

[47] Interpretation Act, RSC 1985, c I-21, s. 31(2):

Where power is given to a person, officer or functionary to do or enforce the doing of any act or thing, all such powers as are necessary to enable the person, officer or functionary to do or enforce the doing of the act or thing are deemed to be also given.

[48] John Willis, “Statute Interpretation in a Nutshell” (1938) 16 Canadian Bar Review 1, at pp. 4-5.

This content has been updated on June 19, 2023 at 18:09.