The Extent of Federal Competence to Regulate CATV
Whither Goes the Wire?
I. Thesis
The past decade has seen a fantastic increase in the number of
Canadian households served by community antenna
television
(CATV) systems. For reasons including our low population density
and, perhaps most importantly, the desire of Canadians to watch
U.S. TV stations which in most cities cannot be received off-air
without expensive antennae, the proportion of households wired
for CATV is higher in Canada than anywhere else in the world.1
This special emphasis afforded CATV by the Canadian populace as
a preferred medium of communication demands that the responsible
level or levels of government adequately supervise CATV under-
takings and exercise a proper planning function over the industry,
so as to assure an optimum level of service to all.
It is the thesis developed in the following pages that even the
extreme physical limit of a CATV system, its connection lines to
tenants in apartment buildings, is a matter falling squarely within
the sole purview of the appropriate commissions and departments
of the national government.
I. Regulatory Competence Over Radio Communication:
Where We Have Been
It is especially worthy of note that the landmark case of In re
Regulation and Control of Radio Communication in Canada,’ the
first cause in this field to be litigated before a tribunal of ultimate
appeal, did not consider the constitutional jurisdiction of Parliament
in respect of radiotelegraphy in a vacuum. As early as this 1932
Reference, counsel representing the provinces of Quebec and Ontario
specifically pleaded before the Privy Council that the subject-matter
of radio communications should be severed, and such facets as
educational broadcasting and radio receiving apparatus should be
deemed matters of provincial competence as objects of property
and civil rights lying exclusively within the provinces’ respective
spheres of jurisdiction.3
‘Government of Canada, Telecommission, Instant World: A Report on
Telecommunications in Canada (Ottawa: Information Canada, 1971), p. 65.
2 [1932] A.C. 304, 3 Olmsted 18 (S.C.).
3 Ibid., at pp. 307-08.
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While this judgment of the Judicial Committee upholding sole
federal competence over all facets of radio communication
is
founded in part upon the presence in the specific case then at bar
of a duty to give effect to an international convention, 4 thus giving
rise to additional federal competence under the general, “peace,
order, and good government” clause,’ it was held too that the
federal competence over interprovincial “lines of… telegraphs” 6
granted in 1867 is to extend to control over the twentieth century
phenomenon of radio.7
The specific language used by Viscount Dunedin, speaking for
the Board, is especially worthy of note, as one trys to establish
whether this same power to regulate “telegraphs” extends to the
CATV franchise system carrying a television signal from its head-end
to a household receiving set:
Their Lordships… think broadcasting falls within the description of
“telegraphs”. No doubt in everyday speech telegraph is almost exclusively
used to denote the electrical instrument which by means of a wire
connecting that instrument with another instrument makes it possible
to communicate signals or words of any kind. But the original meaning of
the word “telegraph,” as given in the Oxford Dictionary, is: “An apparatus
for transmitting messages to a distance, usually by signs of some kind.”
Now a message to be transmitted must have a recipient as well as a trans-
mitter. The message may fall on deaf ears, but at least it falls on ears.’
While note, quite properly, may be taken of the emphasis upon
the statement of Viscount Dunedin that apparatus used purely for
radio reception necessarily forms a part of a unified undertaking,
the Radio Reference case is far from conclusive of the present
jurisdictional problem.
An extension of the 1932 Privy Council decision, which seems
to follow properly therefrom in law, is the decision of a five-judge
panel of the British Columbia Court of Appeal in Public Utilities
Commission v. Victoria Cablevision Ltd.9 While it had to admit sole
federal competence to regulate the defendant’s, “receiving… and
operating machinery” at the outset,10 the appellant commission in
that case had contended that respondent’s lines of cable represented
a separate undertaking severable for regulatory purposes. Note that
4 International Radiotelegraph Convention, Washington, 1927.
5Per the residual “general power” described in the opening words of s. 91
of the British North America Act, 1867: [1932] A.C. 304, at pp. 312-13.
GPer s. 92(10) (a) of the Act of 1867.
7 [1932] A.C. 304, at p. 314.
8 Ibid., at pp. 315-16.
9 (1965), 52 W.W.R. 286.
‘0 Ibid., at p. 288.
No. 4]
NOTES
the pleadings disclose no notion that some other rational division
of the undertaking might be made, as at the point of connection
to the internal wiring of residential buildings, for example.
The two principal judgments rendered make the point very
strongly that a telecommunications undertaking is, of necessity,
a unified and indivisible whole. Sheppard, S.A., quotes Lord Porter’s
words in Attorney-General for Ontario v. Winner and S.M.T. (Eastern)
Limited:
The question is not what portions of the undertaking can be stripped from
it without interfering with the activity altogether; it is rather what is the
undertaking which is in fact being carried on.’
Given the emphasis upon the functional unity of an undertaking,
which Viscount Dunedin had termed, “not a physical thing, but…
an arrangement, under which of course physical things are used,”‘2
the following conclusions of Maclean, J. A., seem valid:
I should observe at this point that the case clearly shows that the under-
taking of the respondent consists of an arrangement whereby broadcasting
signals are conveyed to the private receiving stations of its subscribers.
In my view, the exclusive legislative jurisdiction of Parliament extends
up to the point where the T.V. signal is received by the subscriber and
that the undertaking of the respondents is nothing more or less than an
integral part of the receiving facilities.13
Should “exclusive [federal] legislative jurisdiction” extend at
least to the point of physical connection to the home TV receiver,
there is no doubt left as to the validity of actions by the Government
of Canada relating either to standards of CATV connections within
apartment buildings, or to the terms upon which such connections
shall be effected.
The only possible question might relate to the issue of whether
or not the final link, the feed line within the building (or the build-
ing’s existing master antenna
television system) are somehow
serverable from the rest of the CATV system for regulatory purposes.
Judging by constitutional jurisprudence in allied areas, and apply-
ing normal processes of juridical exegesis, it appears that the obiter
dictum of Maclean, S.A., in the Victoria Cablevision case represents
the correct view of the law. The most recent decision of the Supreme
Court of Canada directly in point gives unqualified support of this
view.
11 [1954] A.C. 541, at p. 581; 3 Olmsted 775; cited 52 W.W.R. 290.
12 [1932] A.C. 304, at p. 315.
13 52 W.W.R. 286, at pp. 293-94, emphasis added.
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The “GO Train” case 5 involved a federal/provincial dispute
over authority to regulate fares charged on an autonomous Ontario
government-operated commuter rail service, which operated on the
lines of a section 92(10)(a) undertaking, the Canadian National
Railway. The judgment of the Court, in finding for the respondent
federal Commission, reached the following important conclusion:
It is clearly established that the Parliament of Canada has jurisdiction
over everything that physically forms part of a railway subject to its
jurisdiction.'(
Applying this rule, the strict ratio decidendi of “GO Train” to the
present problem, and in view of the definition of the scope of a
telecommunications undertaking established in the Radio Reference
case, additional support is to be found for federal regulation in the
present sphere. It is to be acknowledged that not all property or
enterprises of a CATV organization are to be federally regulated. If
Victoria Cablevision Limited were to purchase the famous Empress
Hotel located in the British Columbia capital, the hours of work of
the hotel’s chambermaids would remain a matter of provincial law:
the hotel would not serve as a part of a section 92(10)(a) under-
taking, connecting two or more provinces.’7
As regards other constitutional decisions in the telecommuni-
cations field, the courts appear to have evolved a test which, if
applied in the present case, seems certain to place the matter of
CATV hook-ups within apartment buildings squarely under federal
competence.
The manufacturing activities of Bell Canada’s subsidiary North-
ern Electric, in a plant producing goods principally for Bell Canada,
have been held by McRuer, C.J.H.C., to fall outside of the section
92(10)(a) power.’8 Unlike the case of stevedoring services provided
to interprovincial and international shipping,” he found the services
of Northern Electric’s plant and its production workers not “neces-
sary to the successful operation” of the section 92(10)(a) under-
taking. The services, he said, “could be carried on by any other
company … if Northern Electric ceased to manufacture.” 21
15 The Queen in right of Ontario v. Board of Transport Commissioners,
[1968] S.C.R. 118, 65 D.L.R. (2d) 425.
16 65 D.L.R. (2d) 425 at p. 432.
17 Cf. Canadian Pacific Railway Company v. Attorney-General for British
Columbia, [1950] A.C. 122 at p. 145; 3 Olmsted 637.
Is Regina v. Ontario Labour Relations Board, Ex parte Dunn, 39 D.L.R. (2d)
346, [1963] 2 O.R. 301.
19 Reference re Industrial Relations, [19553 S.C.R. 529, at p. 568.
20 39 D.L.R. (2d) 346, at p. 357.
21 39 D.L.R. (2d) 346, at pp. 358-59.
No. 4]
NOTES
The latter case can be contrasted to Regina v. Ontario Labour
Relations Board, Ex parte Northern Electric Company Limited,2
a 1970 decision of Mr. Justice Lacourciere. Power to regulate the
labour relations of employees engaged by the company to install
electrical equipment in the telecommunications systems of Bell
Canada, the Canadian Broadcasting Corporation, the Canadian Over-
seas Telecommunications Corporation, and Canadian National/Can-
adian Pacific Telecommunications was this time in question. The
1963 decision was found to be distinguishable from the situation
before Lacourciere, J.,23 on the ground that the installers’ activities
contributed directly and immediately to, “connecting one Province
with another, within the meaning of … section 92(10)(a). ‘ ’24 The
judgment reiterated, on the basis of Victoria Cablevision, the Radio
Reference case, and City of Toronto v. Bell Telephone Co. of Ca-
nada,2
1 that,
On a proper reading of the cases, it would appear that, once the work
or undertaking extends extra-provincially in some aspects,2 6 the whole work
falls under federal competence 27
He continues:
There is also the element of the physical connection of the works,
which are linked through the air waves and otherwises as effectively as
if a wire connection, or a rail connection existed. Thus, the reasoning of
the GO Train case … would appear to be here applicable? 8
One further passage in this judgment is of special interest in
the present circumstances. Lacourciere, J., reminds us that only a
“consistent and regular” use of any physical facility as part of a
section 92(10)(a) undertaking is necessary to allow that facility
to be regulated federally, rather than provincially under the author-
ity of sub-sections 92(13) and (16) of the British North America Act
of 1867.20 In Regina v. Cooksville Magistrate’s Court, Ex parte Liquid
Cargo Lines Ltd.,30 which is cited in Ex parte Northern Electric,
Haines, 3., upheld federal regulatory competence over the labour
relations of a trucking firm, on the basis of section 92(10)(a),
though it had only one truck depot –
in Ontario; it only employed
22 11 D.L.R. (3d) 640.
23Ibid., at pp. 644-46.
24 Ibid., at p. 653.
25 [1905] A.C. 52, 1 Olmsted 507.
20GAll radio communications appear to so extend in the Radio Reference
decision: [1932] A.C. 304, at p. 315.
2711 D.L.R. (3d) 640, at pp. 653-54, emphasis added.
28 Ibid., at p. 654.
201d.
30 [1965] 1 O.R. 84, 46 D.L.R. (2d) 700 (High Ct.).
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residents of Ontario; it hauled 98.4% of its loads intraprovincially;
and it carried goods through 90% of its annual cargo miles without
leaving Ontario.31
The Liquid Cargo line of reasoning, extended to telecommuni-
cations undertakings, as suggested by Lacourciere, J., would recog-
nize an overriding federal competence to regulate circuits in apart-
ment buildings used both by CATV signals and other electronic
transmissions. A coaxial cable, for example, carrying a CATV hook-
up plus a closed circuit T.V. picture of callers at the front door is
thus placed under a paramount federal regulatory competence.
III. Regulatory Competence Over CATV Circuits:
How Far We Can Go.
The foregoing examination has concentrated upon the specific
interpretations afforded the scope of federal competence under
section 92 (10) (a) of the British North America Act, 1867 to regulate
interprovincial telecommunications undertakings. Good logic de-
mands, though, that a more basic and fundamental jurisprudential
question be asked –
a question which the courts are likely to pose,
in the event that the matter presently being considered gives rise
to the litigation of the extent of federal power to “trench” upon
provincial authority, under sub-sections
(13) and (16) of section
92, regarding the respective rights of apartment residents and CATV
franchisees on the one hand, and building owners on the other.
This question is, When federal and provincial spheres of authority
necessarily conflict, which level of government is to be deemed
paramount?
The final clause of section 91 of the British North America Act,
1867 reads as follows:
And any matter coming within any of the Classes of Subjects enumerated
in this Section shall not be deemed to come within the Class of Matters
of a local or private Nature comprised in the Enumeration of the Classes
of Subjects by this Act assigned exclusively to the Legislatures of the
Provinces.
While there is here a hint of the paramountcy of the federal sphere,
there also seems to be present a suggestion that the list of federal
powers is to be read restrictively, with provincial powers to be
viewed expansively. Furthermore, the concluding sub-section of
31 [1965] 1 O.R. 84, at pp. 85-86. See also Re Tank Truck Transport Ltd. (1960),
25 D.L.R. (2d) 161 (Ont. High Ct.); Regina v. Borisko Brothers Quebec Limited
(1969), 29 D.L.R. (3d) 754 (Que. Ct. Sess., appeal to C.A. refused, loc. cit.).
No. 4]
NOTES
section 92 states that the respective legislatures’ competence shall
extend to include,
16. Generally all Matters of a merely local or private Nature in the
Province.
From the simple textual statements, though far from clear, one is
rather inclined to conclude that any situation of conflicting or
overlapping jurisdiction might properly be decided in favour of the
provinces.
This has not been the interpretation given the British North
America Act, 1867 by the courts. At least since 1887, the Privy Council
has considered the matter to have been a long-settled issue:
And [their Lordships] adhere to the view which has always been taken
by this Committee, that the Federation Act exhausts the whole range of
legislative power, and that whatever is not thereby given to the provincial
legislatures rests with the parliament.3 2
The point has arisen over the last century in numerous contexts.
Perhaps the most off-quoted determination of the conflict is that
of Lord Tomlin, speaking for the Privy Council in the Fisheries Act
Reference:
There can be a domain in which provincial and Dominion legislation may
overlap, in which case neither legislation will be ultra vires if the field
is clear, but if the field is not clear and the two legislations meet the
Dominion legislation must prevail…33
Instances in which this formulation has been applied by the Supreme
Court of Canada are innumerable 34; it was last adopted in a unani-
mous decision of a full, nine-judge panel of the Court last year.3 5
While such a situation of conflict involving federal power over
telecommunications and a provincial power over property and civil
rights in the province has not been litigated at the Supreme Court
of Canada level, one regarding the similar aeronautics power has.
In Johanneson v. West St. Paul,3
a city bylaw, passed pursuant
to the Manitoba Municipal Act, purported to regulate an airport
established by a federal licence holder. The following opinions were
given by Kellock and Locke, IT., respectively; they are representative
of the views of the entire Court:
32 Bank of Toronto v. Lambe, (1887), 12 App. Cas. 575, at p. 588, 1 Olmsted
222.
[1930] A.C. 111, at p. 118; 2 Olmsted 617.
33 Attorney-General for Canada v. Attorney-General for British Columbia,
34 E.g., Smith v. The Queen, [1960] S.C.R. 776, 25 D.L.R. (2d) 225; O’Grady v.
Sparling, [1960] S.C.R. 804, 25 D.L.R. (2d) 145; Stephens v. The Queen, [1960]
S.C.R. 823, 25 D.L.R. (2d) 296.
35 Caloil Inc. v. Attorney-General of Canada, (1971), 20 D.L.R. (3d) 472, at p.
477. (per Pigeon, J.).
30 [1952] 1 S.C.R. 292.
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It is no doubt true that legislation of the character involved in the
provincial legislation regarded from the standpoint of the use of property
is normally legislation as to civil rights, but use of property for the
purposes of an aerodrome, or the prohibition of such use cannot, in my
opinion, be divorced from the subject matter of aeronautics or aerial
navigation as a whole. If that be so, it can make no difference from the
standpoint of a basis for legislative jurisdiction on the part of a province
that Parliament may not have occupied the field.37
In my opinion, the position taken by the province … cannot be maint-
ained. Whether the control and direction of aeronautics in all its branches
be one which lies within the exclusive jurisdiction of Parliament, and this I
think to be the correct view, or whether it be a domain in which Provin-
cial and Dominion legislation may overlap, I think the result must be
the same.38
The delimitation of federal authority in the present matter is
hinted at by Stark, J., in Re Oshawa Cable TV Ltd. and Town of
Whitby.3 9 While holding (in obiter) that, “… CATV operations are
outside of provincial jurisdiction and are completely within the
power of the federal Legislature,” he acknowledged the fact that
this does not allow disregard of provincial laws of general appli-
cation, as contrasted with those statutes which would tend to
“sterilize” the undertaking. 40
IV. Conclusion
If, on a practical basis, the effect of not regulating the terms
and manner of entry of cable signals into apartment buildings is
to jeopardize the whole CATV undertaking, in layman’s language,
to render it of significantly more cost to the consumer, it
is then
submitted that all necessary interference with provincial property
and civil rights laws will be rendered intra vires the federal govern-
ment. The key word in the preceeding sentence, however, is ne-
cessary. Just as the aeronautics power will not validate federal
actions akin to zoning of lands near airports,41 so too the Govern-
ment of Canada, acting through the Minister of Communications
or the Canadian Radio-Television Commission, by Order-in-Council
37 Ibid., at p. 311.
38 Ibid., at p. 325. See also Jorgenson v. North Vancouver Magistrates (1959),
28 W.W.R. 265 (B.C. C.A.).
39 (1969), 4 D.L.R. (3d) 224 (Ont. High Ct.).
40 Ibid., at p. 231, emphasis added; following Attorney-General for Ontariu v.
Winner and S.M.T. (Eastern) Limited, [1954] A.C. 541, 3 Olmsted 775.
41 Bramalea Consolidated Developments Ltd. v. Attorney-General for Ontario
and the Minister of Municipal Affairs of Ontario, [1971] 2 O.R. 570 (C.A.).
No. 4]
NOTES
or otherwise, cannot regulate the over-all design of apartment build-
ings, except as is necessary to control the quality and cost of
residents’ CATV services.
In concluding the analysis of the constitutional basis for federal
action in this sphere, the attention of the general reader is drawn
to the fact, that, although the limited area is one of federal regu-
latory competence, in the absence of any action by the Government
of Canada general provincial laws governing property and civil
rights shall prevail. The relationships between and among the lessee,
proprietor, and CATV franchisee will continue to be governed by
the common law and civil law of property and contract of the
respective provinces.
J. David Fine*
* Third year Law student, of the Senior Board of Editors of Volume 19 of
the McGill Law Journal.
