Judgments

Decision Information

Bell Canada v. Canada (Canadian Radio-television and Telecommunications Commission)

Collection	Judgments
Date	1987-07-10
Report citation	[1988] 1 F.C. 296
File numbers	A-737-86
Subjects	Construction of Statutes Telecommunications

Decision Content

A-737-86

Bell Canada (Appellant) v.

Canadian Radio-television and Telecommunica tions Commission (Respondent)

INDEXED AS: BELL CANADA V. CANADA (CANADIAN RADIO- TELEVISION AND TELECOMMUNICATIONS COMMISSION)

Court of Appeal, Pratte, Marceau and Hugessen JJ.—Montréal, May 21 and 22; Ottawa, July 10, 1987.

Telecommunications — Canadian Radio-television and Telecommunications Commission (CRTC) — Jurisdiction — Appeal from CRTC order directing Bell Canada (Bell) to give subscribers one-time credit of 206 million dollars — CRTC granting interim rate increase in 1984, but suspending increase in 1985 due to Bell's improved financial performance — Subsequently finding Bell earned excess revenues in 1985 and 1986 — Appeal allowed — CRTC not having jurisdiction to make order — Railway Act only giving CRTC power to approve, suspend or disallow tariffs and tolls — Bell's obligation to charge tolls previously approved not exposing Bell to order not fixing tolls and tariffs — Railway Act, s. 321(5) giving CRTC power to make orders with respect to all matters relating to traffic, tolls and tariffs, only defining powers in context of Act, and not creating fundamental new powers — Order relating to profits and revenues, not tolls and tariffs — Case law that public utility board not having au thority to deal with excess or deficiency of earnings — CRTC not having jurisdiction to order retroactive decrease of tolls — Power to vary rates in s. 63 of National Transportation Act not implying power to vary with retroactive effect — "Vary" neutral with respect to power to act retroactively — National Transportation Act, s. 57(2) power to make interim orders and to reseve for later final determination, distinguished from s. 57(1) and s. 63 power to make orders finally disposing of matter — Regulatory role prospective only as indicated by Railway Act, s. 320(2), tolls "to be" charged.

Construction of statutes — National Transportation Act, s. 63 giving Commission power to "review, rescind, change, alter or vary" any order — Power to vary not implying power to change rates retroactively — "Vary" neutral with respect to power to act retroactively — Parliament not intending s. 63 to give Commission power to destroy rights created by original order — S. 57(2) giving Commission power to make interim

order, "instead of making an order final in the first instance" — S. 57 of general nature meant to apply to all orders and decisions of Canadian Transport Commission and CRTC— S. 57(2) order not intended to finally dispose of application as opposed to s. 57(1) or s. 63 order — "Interim" meaning "in the meantime" — Presumption against retrospective operation of legal enactment.

This is an appeal from a decision of the CRTC directing Bell Canada to give its subscribers a one-time credit of 206 million dollars representing alleged excess revenue earned in 1985 and 1986. In May, 1984, Bell's application for rate increases was denied but in December, the Commission granted a 2 per cent interim rate increase. In April, 1985, the CRTC refused to grant final approval of this increase and decided to postpone the matter until a hearing in 1986. In August, 1985, the Commission directed Bell to suspend the interim rate increases due to Bell's improved financial performance. Although Bell sought to withdraw its application for a general rate increase, the CRTC decided to proceed, in that the question of the appropriate rate of return for Bell had not been reviewed at an oral hearing since 1981. This hearing resulted in the decision in dispute. The Commission considered the question of what was a permissible return on equity, and determined that Bell had earned excess revenue of 206 million dollars in 1985 and 1986. It then provided for a rate reduction effective January I, 1987. With respect to 1985 and 1986 it directed Bell to give a one-time credit to subscribers of record. The issue is whether the CRTC had the statutory power to make such an order. The appellant submits that the Commission is empowered only to prescribe tolls. The respondent adopted two contrary ap proaches in reply: I) the Commission is not limited to prescrib ing tolls; 2) the order to allow a credit must be treated merely as a means of giving effect to the establishment of rates for a period already past.

Held (Hugessen J. dissenting), the appeal should be allowed. The Commission did not have jurisdiction to make the disputed order.

Per Marceau J.: 1. The argument that the Commission is not limited to prescribing tolls is based on Bell's status as a public utility whose works have been declared to be for the general advantage of Canada, and the role of the Commission in preventing Bell from abusing its privileged position as operator of a monopoly. The respondent relied on paragraph 46(1)(b) of the National Transportation Act which gives the Commission general powers to make "orders or regulations ... for carrying the Railway Act into effect" and subsection 321(5) of the Railway Act which gives the Commission power to make orders with respect to all matters relating to traffic, tolls and tariffs. In order to regulate the nature and quality of services provided, the CRTC must have a supervising and regulating authority which goes beyond the fixing of tariffs and tolls. But the Act

does not give the Commission power to deal with tariffs and tolls other than by approving, suspending or disallowing them. Bell's sole obligation with respect to tariffs and tolls is to charge only those tolls previously approved, and the existence of such an obligation cannot expose Bell to an order which in no way fixes tariffs or tolls. Subsection 321(5) did not intend to say otherwise as its purpose was to define powers in the sole context of the Railway Act. A general power to make orders for the purpose of carrying other statutes into effect does not create fundamental new powers. The order in dispute relates to profit and revenue. Merely because the main source of that profit and revenue has been charges for services rendered established in accordance with tariffs approved by the Commis sion does not make them a matter "relating to traffic, tolls and tariffs". Calgary (City) & Home Oil Co. v. Madison Natural Gas Co. & Br. American Utilities Ltd. (1959), 19 D.L.R. (2d) 655 (Alta. S.C.), is authority for the proposition that a public utility board such as the Commission does not have authority to deal with an excess or deficiency of earnings.

2. The second argument is that the true nature of the decision is a "disallowance" of the tolls for 1985 and 1986 and its true effect is to bring about a substitution "of a tariff satisfactory to the Commission" pursuant to paragraph 321(4)(b) of the Railway Act. That reasoning displayed a confusion between the decision's goal and its true nature. That distinction was crucial when the issue is whether there was power to make the order actually made. The true nature of an order is determined by the command it contains, which may be identified by determining how the order can be enforced. The question then arises as to whether the Commission had jurisdic tion to order a retroactive decrease of tolls.

It was argued that section 63 of the National Transportation Act giving the Commission power to "review, rescind, change, alter or vary any decision made by it" implies the power to do it retroactively. This argument was based on subsection 57(2) of the National Transportation Act which permits the CRTC to make interim orders "instead of making an order final" and to reserve for later a final determination. It was argued that this express statutory power included the power to correct retroac tively what was ordered in the interval. But the power to vary does not imply the power to do it with retroactive effect. "Vary" is neutral with respect to the power to act retroactively. Parliament did not intend by enacting section 63 of the Nation al Transportation Act to give the CRTC power to destroy, as opposed to protect, rights created by its original order.

It was argued that to give subsection 57(2) a real purpose, the interim order had to be given a meaning other than that of a mere temporary order since the power to make an order having an effect for a limited time is already provided for in subsection 57(1) and section 63. An order under subsection 57(1) and section 63, finally disposes of an application and an order under subsection 57(2) does not, as indicated by the

words "instead of making a final order" in subsection 57(2), Section 57 applies to all orders made by the Canadian Trans port Commission and the CRTC, and not specifically to orders establishing tariffs and tolls. The word, "interim" itself does not suggest anything more than "in the meantime". The power to make an interim order does not imply a power to make a final order regulating differently the period covered by the initial order.

A number of cases were cited where the power to act retroactively was recognized in order to prevent prejudice to an applicant arising from the time required to approve its applica tion. The Commission does not, however, have the power to disallow retroactively rates it has already approved, bearing in mind the presumption against retrospective operation of any legal enactment.

Parliament did not intend to confer on the CRTC a regulato ry role that would be retrospective as well as prospective. The Commission controls tolls to be charged (subsection 320(2) of the Railway Act). It is these tolls which are subject to approval and the only obligation imposed on Bell is to limit its charges to the tolls approved.

Also, if the Commission could act forward and backward all the care put into the process of approving the rates based on forecasts would be useless. Subsection 321(1) requires that all tolls be just and reasonable. Parliament has set up a particular scheme to realize this goal which can fail, although rarely, to the benefit of either Bell or the customers.

Per Pratte J.: The CRTC has no power to force Bell to part with revenues earned as a result of having charged rates approved by the Commission. Nor could it approve rates on the basis that the telephone company will later have to reimburse its subscribers if those rates were too high. It may only approve rates that it considers at that time to be just and reasonable.

An interim decision may not be varied retroactively. It is merely a temporary decision that does not finally dispose of the case before the tribunal.

Section 63 does not authorize the Commission to modify a previous decision retroactively. A decision that modifies a previous decision retroactively does more than alter the previ ous decision. It prescribes that this alteration will be deemed to have been made prior to when it was actually made. A tribunal which is vested with the power to rescind and vary its decisions does not possess the authority to modify them retroactively. This does not conflict with the decision in Bakery and Confec tionery Workers International Union of America, Local No. 468 et al. v. White Lunch Ltd. et al., [1966] S.C.R. 282. There the three orders of the provincial Labour Relations Board were not modified retroactively as the changes were not deemed to have been made on dates prior to those of the modifying orders. The amending orders had "retroactive effect" because they resulted in the new employer being bound by decisions made in the past. "Retroactive" was used in a loose sense. The Supreme Court did not hold that the power conferred on a tribunal to

modify its previous decisions includes the power to prescribe that the modifications shall be deemed to have been made on a date prior to the date on which they were actually made.

Per Hugessen J. (dissenting): The B.C.C.A. in Re Eurocan Pulp & Paper Co. Ltd. and British Columbia Energy Commis sion et al., interpreting a different regulatory scheme, found that the power to fix rates retroactively exists. That decision was quoted with no indication of disapproval in Nova, An Alberta Corporation v. Amoco Canada Petroleum Co. Ltd. et al., [1981] 2 S.C.R. 437.

The Commission's power flows directly from the fact that its order was an interim order made pursuant to subsection 57(2) of the National Transportation Act. Subsection 57(1) empow ers the Commission to make orders subject to suspensive or resolutory conditions. Subsection 57(2) adds to the existing powers. But an interim order cannot simply be one which is subject to later, prospective revision by the Commission because all orders fixing tariffs may be so revised, even on the Commission's own motion. It can only be one, which like all rate orders, has prospective effect, but on which the Commis sion reserves "further directions" which may be retroactive to the date the order was made. The argument that even if the Commission had power to revise its interim order, it could do so only with respect to the two per cent increase, could not be accepted. When a rate is increased on an interim basis, the whole of the rate so increased becomes an interim rate and subject to revision.

The Commission, having decided that the rates charged in 1985 and 1986 were not just and reasonable and having determined the amount of excess revenues, was faced with finding a fair and practical solution. The manner of revising the rates is an "administrative matter" properly left to the Com mission's determination.

The Commission's order relates to tariffs and tolls. As such it falls within subsection 321(5) of the Railway Act giving the Commission power to make orders with respect to all matters relating to tolls and tariffs in all other matters not expressly provided for.

STATUTES AND REGULATIONS JUDICIALLY CONSIDERED

An Act to incorporate The Bell Telephone Company of Canada, S.C. 1880, c. 67, s. 46 (as am. by S.C. 1882, c. 95, s. 4).

CRTC Telecommunications Rules of Procedure, SOR/ 79-554.

Canadian Radio-television and Telecommunications Commission Act, S.C. 1974-75-76, c. 49.

National Transportation Act, R.S.C. 1970, c. N-17, ss. 45(2) (as am. by S.C. 1977-78, c. 22, s. 18), 46(1), 48 (as am. idem), 57, 58, 63, 64 (as am. by R.S.C. 1970 (2nd Supp.), c. 10, s. 65).

Railway Act, R.S.C. 1970, c. R-2, ss. 320(2) (as am. by R.S.C. 1970 (1st Supp.), c. 35, s. 2), (3),(6), 321(1),(2) (as am. idem, s. 3), (4),(5).

CASES JUDICIALLY CONSIDERED

APPLIED:

Calgary (City) & Home Oil Co. v. Madison Natural Gas Co. & Br. American Utilities Ltd. (1959), 19 D.L.R. (2d) 655 (Alta. S.C.); R. v. Board of Commissioners of Public Utilities (N.B.) Ex parte Moncton Utility Gas Ltd. (1966), 60 D.L.R. (2d) 703 (N.B.S.C.).

DISTINGUISHED:

Bakery and Confectionery Workers International Union of America, Local No. 468 et al. v. White Lunch Ltd. et al., [1966] S.C.R. 282; 56 D.L.R. (2d) 193; aff'g R. v. B.C. Labour Relations Board, Ex parte White Lunch Ltd. (1965), 51 D.L.R. (2d) 72 (B.C.C.A.); Re Coseka Resources Ltd. and Saratoga Processing Co. Ltd. et al. (1981), 126 D.L.R. (3d) 705 (Alta. C.A.); Re Eurocan Pulp & Paper Co. Ltd. and British Columbia Energy Commission et al. (1978), 87 D.L.R. (3d) 727 (B.C.C.A.); Nova, An Alberta Corporation v. Amoco Canada Petroleum Co. Ltd. et al., [1981] 2 S.C.R. 437; United States v. New York Central R. Co., 73 L. ed. 619 (1929 S.C.).

CONSIDERED:

Young v. Adams, [1898] A.C. 469 (P.C.).

REFERRED TO:

Algar v. Middlesex County Council. In the matter of the Local Government Superannuation Act, 1937, and 1939, [1945] 2 All E. R. 243 (K.B.D.); Edmonton, City of et al. v. Northwestern Utilities Limited, [1961] S.C.R. 392.

AUTHORS CITED

Coté, Pierre-André. The Interpretation of Legislation in Canada. Cowansville, (Que.): Les Éditions Yvon Biais Inc., 1984.

Romaniuk, Bohdan and Hudson N. Janisch. "Competi- tion in Telecommunications: Who Polices the Transi tion?" (1986), 18 Ottawa L.R. 561.

COUNSEL:

Louise Martin, Q.C. and Gérald R. Tremblay for Bell Canada.

Janet Yale for Consumers Association of Canada.

Raynold Langlois, Q. C., Greg van Koughnett and Lisa de Wilde for Canadian Radio-televi sion and Telecommunications Commission.

Michael Ryan for CNCP Telecommunica tions.

Graham R. Garton for Attorney General of Canada.

Michel Robert, Q.C., Andrew Roman and Pierre-Paul Lavoie for National Anti-Poverty Organization.

Ken Engelhart for Canadian Business Tele communications Alliance.

SOLICITORS:

Clarkson, Tétrault, Montréal, for Bell Canada.

Janet Yale, General Counsel, Consumers' Association of Canada, Ottawa, for Consum ers' Association of Canada.

Raynold Langlois, Q.C., Greg van Koughnett and Lisa de Wilde, Counsel, CRTC, Ottawa, for Canadian Radio-television and Telecom munications Commission.

Michael Ryan, Counsel, Canadian Pacific Law Department, Toronto, for CNCP Tele communications.

Deputy Attorney General of Canada for Attorney General of Canada.

Michel Robert, Q.C., Andrew Roman and Pierre-Paul Lavoie, Counsel, Public Interest Advocacy Centre, Ottawa, for National Anti- Poverty Organization.

Kenneth G. Engelhart, General Counsel, Toronto, for Canadian Business Telecom munications Alliance.

The following are the reasons for judgment rendered in English by

Pratte J.: I agree with my brother Marceau and merely wish to add a few observations.

On its face, the order made by the Commission on October 14, 1986, directing the appellant to give its subscribers of record on that date a one time credit of $206,000,000 is not retroactive. Indeed, it merely orders that something be done in the future. If the order is thus viewed as not being retroactive, its legal justification seems, at first sight, to be found in subsection 57(2) of the National Transportation Act [R.S.C. 1970, c. N-171.' The Commission clearly made interim orders under that subsection prescribing the rates

' That subsection reads thus:

57... .

(2) The Commission may, instead of making an order final in the first instance, make an interim order, and reserve further directions either for an adjourned hearing of the matter, or for further application.

to be charged by the appellant from January 1, 1985, and apparently reserved itself the right to give further directions with respect to that matter. The order here under attack seems to be such a further direction. The flaw in that reasoning is that it does not take into account that the further directions that may be made under subsection 57(2) must be directions that the Commission is otherwise empowered to make and could have made in the first instance. In my view, the Com mission has no power to force a telephone com pany to part with the revenues earned as a result of having charged the rates approved or fixed by the Commission. It would not have the authority, either, to approve or prescribe rates on the condi tion that the telephone company will later have to reimburse its subscribers if those rates then appear to have been too high. The only rates that the Commission may approve or prescribe, be it by final or interim decisions, are those that the Com mission considers at that time to be just and reasonable.

If the order under attack, in spite of its terms, is viewed as being retroactive in that it, in effect, modified the interim orders as of the date on which those orders had been made, the question then arises whether the Commission, which clearly had the power to change the interim orders, had the power to change them retroactively. It is said that this power flows from subsection 57(2) of the National Transportation Act, which authorizes the Commission to make interim orders, and from section 63 which empowers the Commission to "review, rescind, change, alter or vary any order or decision made by it".

The respondents invoke the decisions of the Alberta Court of Appeal in Re Coseka Resources Ltd. and Saratoga Processing Co. Ltd. et al. 2 in support of their submission that the interim orders that subsection 57(2) empowers the Commission to make are orders that the Commission may later rescind or vary retroactively. Like Marceau J., I cannot agree with the reasons given in support of

2 (1981), 126 D.L.R. (3d) 705 (Alta. C.A.).

that decision. In my opinion, an interim decision is not a decision that may be rescinded or varied retroactively by the tribunal that made it; it is merely a temporary decision that does not finally dispose of the case before the tribunal.

As to section 63, I do not read it as authorizing the Commission to modify a previous decision retroactively. Retroactivity is a legal fiction. It is a fiction because, in reality, a cause that does not exist cannot produce any effect. It follows that a decision that modifies a previous decision retroac tively does something more than alter the previous decision since, in addition, it prescribes that this alteration will be deemed to have been made on a date prior to that on which it was actually made. For that reason, I am of opinion that a tribunal which is vested with the mere power to rescind and vary its decisions does not possess the authority to modify them retroactively. This opinion may seem to be in conflict with the decision of the Supreme Court of Canada in Bakery and Confectionery Workers International Union of America, Local No. 468 et al. v. White Lunch Ltd. et al. 3 The conflict, however, is merely apparent. That case involved the Labour Relations Board of British Columbia which had, under its governing statute, the power to "reconsider . .. vary or cancel" its decisions. The Board had modified three of its decisions by substituting in those decisions the name of White Lunch Ltd. for the name of the employer that was named in them. The three decisions in question were a certification order, an order enjoining the employer to cease to intimidate its employees and an order that the employer was to reinstate two employees. It is apparent from the decision of the British Columbia Court of Appeal in that case 4 that the three orders of the Board had not been modified retroactively and that the modi fying orders of the Board had not prescribed that the changes in three orders would be deemed to have been made on dates prior to those of the modifying orders. The argument in that case was that the amending orders had what was referred to as a retroactive effect because they resulted in the

3 [1966] S.C.R. 282.

4 R. v. B.C. Labour Relations Board, Ex parte White Lunch Ltd. (1965), 51 D.L.R. (2d) 72.

new employer being bound by decisions made in the past in proceedings to which he was not a party. The word "retroactive" in that argument was used in a very loose sense and when the Supreme Court rejected it and held that the power to vary previous decisions conferred on the Board included the power to vary retroactively, it used it in the same sense. In other words, the Supreme Court, in that case, never held that the power conferred on a tribunal to modify its previous decisions comprises, in addition to the power to modify those decisions, the power to prescribe that the modifications ordered by it shall be deemed to have been made on a date prior to the date on which they were actually made.

* * *

The following are the reasons for judgment rendered in English by

MARCEAU J.: On October 14, 1986, the Canadi- an Radio-television and Telecommunications Commission ("CRTC" or "the Commission") ren dered a decision (Telecom Decision CRTC 86-17) in which inter alia it directed Bell Canada ("Bell" or "the Company"), to give its subscribers of record a one-time credit of 206 million dollars representing alleged excess revenue earned by the Company in 1985 and 1986. This is an appeal by Bell, following leave granted by this Court under section 64 of the National Transportation Act [as am. by R.S.C. 1970 (2nd Supp.), c. 10 s. 65], against that direction. Bell submits that the Com mission had no jurisdiction to make it. Its position is supported in part by CNCP Telecommunica tions, but all the other many intervenors dispute the merit of the appeal. While the question, being purely one of law, could be addressed and the discussion carried out on the basis of only a brief statement of facts, a more complete review of the background in which it arose may be required to

fully appreciate some of the arguments which have been advanced and will have therefore to be considered.

Before coming to that review, however, I will take the time to reproduce the main statutory enactments which give the Commission its author ity over Bell. Several provisions are involved and some will have to be more thoroughly analyzed later on in the course of these reasons but I think that a careful reading of them, all at once, will give a general perspective which may be extremely helpful. These provisions are to be found in the Railway Act, R.S.C. 1970, c. R-2 and the Nation al Transportation Act, R.S.C. 1970, c. N-17.

In the Railway Act, there are special provisions governing telegraphs and telephones: of these, sub sections 320(2) [as am. by R.S.C. 1970 (1st Supp.), c. 35, s. 2], (3),(6), 321(1),(2) [as am. idem, s. 3], (4) and (5) ought to be reproduced:

320... .

(2) Notwithstanding anything in any other Act, all telegraph and telephone tolls to be charged by a company, other than a toll for the transmission of a message intended for general reception by the public and charged by a company licensed under the Broadcasting Act, are subject to the approval of the Commission, and may be revised by the Commission from time to time.

(3) The company shall file with the Commission tariffs of any telegraph or telephone tolls to be charged, and such tariffs shall be in such form, size and style, and give such information, particulars and details, as the Commission, from time to time, by regulation, or in any particular case, prescribes, and unless with the approval of the Commission, the company shall not charge and is not entitled to charge any telegraph or telephone toll in respect of which there is default in such filing, or which is disallowed by the Commission; but any company, prior to the 1st day of May 1908, charging telegraph or telephone tolls, may, without such filing and approval, for such period as the Commission allows, charge such telegraph or telephone tolls as such company was immediately prior to the said date author ized by law to charge, unless where the Commission has disallowed or disallows such tolls.

(6) The Commission may, by regulation or otherwise, deter mine and prescribe the manner and form in which any tariff or tariffs of telegraph or telephone tolls shall be published or kept open for public inspection.

321. (1) All tolls shall be just and reasonable and shall always, under substantially similar circumstances and condi tions with respect to all traffic of the same description carried over the same route, be charged equally to all persons at the same rate.

(2) A company shall not, in respect of tolls or any services or facilities provided by the company as a telegraph or telephone company,

(a) make any unjust discrimination against any person or company;

(b) make or give any undue or unreasonable preference or advantage to or in favour of any particular person or com pany or any particular description of traffic, in any respect whatever; or

(c) subject any particular person or company or any particu lar description of traffic to any undue or unreasonable preju dice or disadvantage, in any respect whatever;

and where it is shown that the company makes any discrimina tion or gives any preference or advantage, the burden of proving that the discrimination is not unjust or that the prefer ence is not undue or unreasonable lies upon the company.

(4) The Commission may

(a) suspend or postpone any tariff of tolls or any portion thereof that in its opinion may be contrary to section 320 or this section; and

(b) disallow any tariff of tolls or any portion thereof that it considers to be contrary to section 320 or this section and require the company to substitute a tariff satisfactory to the Commission in lieu thereof or prescribe other tolls in lieu of any tolls so disallowed.

(5) In all other matters not expressly provided for in this section the Commission may make orders with respect to all matters relating to traffic, tolls and tariffs or any of them.

In the National Transportation Act, there are no special provisions relating to telegraphs and telephones but Part IV, comprising sections 45 to 64 and entitled GENERAL JURISDICTION AND POWERS [of the Commission] IN RESPECT OF RAILWAYS, has always been taken as covering all matters dealt with in the Railway Act: subsection 45(2) [as am. by S.C. 1977-78, c. 22, s. 18], subsection 46(1), sections 48 [as am. idem], 57, 58, 63, and subsection 64(1) ought to be reproduced:

45....

(2) The Commission may order and require any company or person to do forthwith, or within or at any specified time, and in any manner prescribed by the Commission, so far as is not inconsistent with the Railway Act, any act, matter or thing that such company or person is or may be required to do under the Railway Act, or the Special Act, and may forbid the doing or continuing of any act, matter or thing that is contrary to the

Railway Act, or the Special Act; and for the purposes of this Part and the Railway Act has full jurisdiction to hear and determine all matters whether of law or of fact.

46. (1) The Commission may make orders or regulations

(a) with respect to any matter, act or thing that by the Railway Act or the Special Act is sanctioned, required to be done, or prohibited;

(b) generally for carrying the Railway act into effect; and

48. The Commission may, of its own motion, or shall, upon the request of the Minister, inquire into, hear and determine any matter or thing that, under this Part or the Railway Act, it may inquire into, hear and determine upon application or complaint, and with respect thereto has the same powers as, upon any application or complaint, are vested in it by this Act.

57. (1) The Commission may direct in any order that such order or any portion or provision thereof, shall come into force at a future time or upon the happening of any contingency, event or condition in such order specified, or upon the perform ance to the satisfaction of the Commission, or a person named by it, of any terms which the Commission may impose upon any party interested, and the Commission may direct that the whole, or any portion of such order, shall have force for a limited time, or until the happening of a specified event.

58. Upon any application made to the Commission, the Commission may make an order granting the whole or part only of such application, or may grant such further or other relief, in addition to or in substitution for that applied for, as to the Commission may seem just and proper, as fully in all respects as if such application had been for such partial, other, or further relief.

63. The Commission may review, rescind, change, alter or vary any order or decision made by it, or may re-hear any application before deciding it.

64. (1) The Governor in Council may at any time, in his discretion, either upon petition of any party, person or company interested, or of his own motion, and without any petition or application, vary or rescind any order, decision, rule or regula tion of the Commission, whether such order or decision is made inter partes or otherwise, and whether such regulation is gener al or limited in its scope and application; and any order that the

Governor in Council may make with respect thereto is binding upon the Commission and upon all parties.

Now the factual background.

The series of events and decisions that has to be recorded is relatively long and for the sake of accuracy quotations will be numerous. But the facts are not really complex and their sequence, although dates are to be carefully noted, is easy to follow.

Until August 4, 1982, the rates charged by Bell for its services had always been approved by the Commission as required by the legislation. The last decision to that effect had been Telecom Deci sion CRTC 81-15, dated September 28, 1981, which had followed an application for a general rate increase that Bell had filed a few months previously. On August 5, 1982, the Governor in Council, with a view to giving effect to the Gov ernment's restraint program and pursuant to para graph 64(1) of the National Transportation Act, issued an Order in Council (P.C. 1982-2350) increasing all rates approved the year before by 6% effective September 1, 1982 and by a further 5% effective September 1, 1983.

On March 28, 1984, Bell applied to the Com mission for increases in certain of its rates, and purported to do so under Part VII of the CRTC Telecommunications Rules of Procedure [SOR /79-554] alleging that the normal but more involved procedure set out in Part III for general rate increase applications was not warranted since its rates were still being governed by the 1982 Order in Council. On May 22, 1984, the Commis sion refused Bell's application in Telecom Decision CRTC 84-15 the concluding paragraphs of which read as follows:

In light of the foregoing, Bell's application is denied.

The Commission recognizes that, in 1985 and beyond, in the absence of rate relief, a deterioration in the Company's finan cial position could occur. In this regard, if the Company should find it necessary to file an application for a general rate increase under Part III of the Rules, the Commission would be prepared to schedule a public hearing on such an application in the fall of 1985.

Should Bell consider it necessary to seek rate increases to come into effect earlier in 1985 than this schedule would allow, it

may of course apply for interim relief. In the event Bell were to seek such interim relief, it would be open to the Company to suggest that the Commission's traditional test for determining interim rate applications is overly restrictive in light of the Commission's hearing schedule and to put forward proposals for an alternative test for consideration.

On September 4, 1984, Bell, in accordance with the directions of the Commission, filed an applica tion for an interim rate increase of approximately 3.6% to become effective on January 1, 1985 which would be followed by a full rate application to be filed on June 4, 1985. On December 19, 1984, the Commission agreed in part to the request and granted a 2% interim rate increase; its decision (Telecom Decision CRTC 84-28) ended thus:

Taking the above factors into account, the Commission has decided that an interim rate increase of 2% for all services in respect of which rate increases were requested by the Company in the interim application is appropriate at this time. This increase is expected to generate additional revenues of $65 million from 1 January 1985 to 31 December 1985. To permit the review of the Company's 1985 revenue requirement by the Commission at the fall 1985 public hearing, Bell is directed to file its 4 June 1985 general rate increase application on the basis of two test years, 1985 and 1986.

Bell is directed to file revised tariffs forthwith, with an effective date of 1 January 1985 to give effect to the rates approved in this decision.

By letter to the Commission dated March 20, 1985, Bell asked that its general rate increase application, scheduled for June 4, 1985, be post poned to February 10, 1986 suggesting however that the interim rate increase in force since Jan- uary be given immediate final approval. In CRTC Telecom Public Notice 1985-30, dated April 16, 1985, the Commission agreed to the postponement but rejected the suggestion for final approval in these words:

With respect to Bell Canada's request for final approval of the interim increases of 2%, the Commission does not consider it appropriate to grant final approval of interim general rate increases without further process and has therefore decided not to consider this matter at this time but will review the 1985 interim increases during the 1986 hearing.

In view of the improving trend in the Company's financial performance, the Commission further directs as follows:

Bell Canada is to provide to the Commission for the balance of 1985, within 30 days after the end of each month, commencing with April 1985, a full year forecast of revenues and expenses on a regulated basis for the year 1985, together with the estimated financial ratios including the projected regulated return on common equity.

The Commission will monitor the Company's financial performance during 1985, in order to determine whether any further rate action may be necessary.

On July 19, 1985, the Commission invited Bell to provide explanations as to why, in light of its improved financial performance, "the 2% interim increases granted in Decision 84-28 should not be suspended effective 1 September 1985". Bell, in its reply insisted that such a suspension would not be justified, but the Commission was of a different view. On August 14, 1985, Telecom Decision CRTC 85-18 disposed as follows:

In view of the improving trend in Bell's financial performance, the Commission is satisfied that the company no longer needs the 2% interim increases which were awarded in Decision 84-28 in order to avoid serious financial deterioration in 1985. Accordingly, Bell is directed to file revised tariffs forthwith with an effective date of 1 September 1985, to suspend these increases.

In arriving at its decision the Commission has estimated that, with interim rates in effect for the complete year, the company would earn an ROE* of approximately 14.5% in 1985, a return well in excess of the 13.7% considered appropriate for deter mining the 2% interim rate increases. The Commission also projected that interest coverage would be approximately 3.9 times. This would improve on the actual 1984 coverage of 3.8 times. These estimates are not significantly different from Bell's current expectation of its 1985 results.

The Commission will make its final determination of Bell's revenue requirement for the year 1985 in the general rate proceeding currently scheduled to commence with an applica tion to be filed on 10 February 1986.

* ROE: rate of return on average common equity for regulato ry purposes.

On October 31, 1985, Bell informed the Com mission that it had decided not to proceed with its application for a general rate increase, requesting, in consequence, that the Directions on Procedures given in Telecom Public Notice 1985-30 be with drawn. The response of the Commission was con-

tained in Telecom Public Notice 1985-85, dated December 23, 1985, which read in part as follows:

The Commission notes that the appropriate rate of return for Bell has not been reviewed in an oral hearing since the proceed ing which culminated in Bell Canada—General Increase in Rates, Telecom Decision CRTC 81-15, 20 September 1981 (Decision 81-15). The Commission considers that, given Bell's current forecasts, it would be appropriate to review the compa- ny's cost of equity for the years 1985, 1986 and 1987 in the proceeding scheduled for 1986. Such a review would allow consideration of the changing financial and economic condi tions since Decision 81-15 and the impact of Bell's corporate reorganization and its rate of return. The Commission notes that other issues arising from the reorganization will also be addressed in the 1986 proceeding.

The Commission, therefore, concludes that the schedule announced in the amended Directions and Procedure enumer ated in Public Notice 1985-30 is still appropriate with the exception of items 5 and 6 which will now read as follows:

The Commission directs Bell to file on 10 February 1986 the Memoranda of Support contemplated by section 38(1)(b) of the CRTC Telecommunications Rules of Procedure to address the test years 1985, 1986 and 1987. the Commission will make a final determination regarding Bell's revenue requirements for the years 1985, 1986 and 1987 and establish an acceptable range for Bell's ROE for the years 1986 and 1987 in that proceeding. In this context, Bell is directed to file appropriate information of the company's cost of common equity and revenue requirements, including 1985 financial results and forecasts for 1986 and 1987, in its submission of 10 February 1986.

As was to be expected, the hearing turned out to be quite a lengthy and complex one. It lasted from June 2 to July 16, 1986. More than 300 persons had filed interventions and many of them appeared or were represented. Not only was it necessary to review thoroughly the financial situation of the Company but several incidental or accessory issues had to be considered. After deliberations, the Commission rendered its decision on October 14, 1986. It is this decision CRTC 86-17 which is put in question here.

Not all of it is disputed however, but only the part which can quickly be summarized ordering Bell to give its customers of record a one-time credit. The Commission proceeds first to express its view as to what would have been the permissi-

ble return on equity (ROE) for the years 1985, 1986 and 1987; it writes:

Taking all the evidence before it into account, the Commission has concluded that, for the 1986 and 1987 test years, the permissible ROE range for Bell should be between 12.25% and 13.25%.

With respect to the 1985 test year, the Commission considers that the cost of capital was higher in that year. Accordingly, it has determined that the permissible ROE range for 1985 would have been 12.75% to 13.75%.

The Commission has used the middle point of the range, which is 12.75%, for the purpose of determining the company's rev enue requirement for 1987. Since most of the test year 1986 and all of the test year 1985 have elapsed, the Commission considers it fair and reasonable to use the upper end of the range for each year, 13.25% for 1986 and 13.75% for 1985, to determine the respective revenue requirements.

The Commission then considers its findings as to the revenues earned by Bell in 1985 and 1986 and determines that the Company had made excess revenue of 63 million dollars in the first of the two years and 143 million dollars in the other, estimat ing at the same time that in 1987 "a revenue requirement reduction of 234 million dollars would provide the Company with the permissible ROE". The Commission thereupon proceeds to draw con clusions: with respect to 1987, it provides for rate reductions to be effective 1 January 1987; with respect to 1985 and 1986, it disposes as follows:

Concerning the excess revenues for the years 1985 and 1986, the Commission directs that the required adjustments be made by means of a one-time credit to subscribers of record, as of the date of this decision, of the following local services: residence and business individual, two-party and four-party line services; PBX trunk services; centrex lines; enhanced exchange-wide dial lines; exchange radio-telephone service; service-system service; and information system access line service. The Commission directs that the credit to each subscriber be determined by pro-rating the sum of the excess revenues for 1985 and 1986 of $206 million in relation to the subscriber's monthly recurring billing for the specified local services provided as of the date of this decision. The Commission further directs that the work necessary to implement the above directives be commenced immediately and that the billing adjustments be completed by no later than 31 January 1987. Finally, the Commission directs the company to file a report detailing the implementation of the credit by no later than 16 February 1987.

This is the part of Telecom Decision CRTC 86-17 the validity of which is disputed in this appeal.

As pointed out at the outset, the sole question is one of jurisdiction. Had the Commission the statu tory power to order Bell to give a one-time credit of 206 million dollars to its subscribers of record? The findings of fact underlying the order, specifi cally the assessment of Bell's revenue requirements for 1985 and 1986, the appropriateness of the rates of return for the same years and, as a consequence, the determination of the amount of excess rev enues earned by Bell, are not put in question. The issue is therefore purely one of law, which is why I could observe as I did that a complete recounting of the facts and a review of all the decisions rendered before the final one was not strictly required to be able to address it. It was neverthe less of the utmost importance that the decision be clearly seen in context, in order, for one thing, to understand how, in answer to the submission of the appellant that the Commission is only empowered to prescribe tolls which it certainly did not do in the impugned order, the respondent and its sup porters could adopt in turn two contrary ap proaches and follow two different lines of reason ing. Some agree that the decision must be taken as it is, that is to say as an order to pay a bulk sum, but they contend that the Commission is not lim ited to prescribing tolls; others submit that the decision has to be interpreted and the order to pay treated as only a means to give effect to the establishment of rates for a period already past. I have become convinced that neither of the two approaches reaches the heart of the problem but, for the moment, I will only deal with the argu ments as submitted.

1. Those who contend that the Commission is not limited to prescribing tolls insist upon the status of Bell as a Public Utility whose works have been declared to be for the general advantage of Canada (section 46 of An Act to incorporate The Bell Telephone Company of Canada, S.C. 1880, c. 67, as am. by S.C. 1882, c. 95, s. 4, the "Special

Act") and the role of the Commission in prevent ing Bell from abusing its privileged position as operator of a monopoly. Going through the provi sions of the Special Act and the Railway Act, they point out the number of conditions and require ments to which Bell is subject and the extensive authority conferred on the Commission for the supervision of the Company's operations and activities. They then refer to the general powers to make "orders or regulations ... for carrying the Railway Act into effect" given to the Commission by paragraph 46(1)(b) of the National Transpor tation Act and specially to subsection 321(5) of the Railway Act which, for convenience, I quote again:

321. ...

(5) In all other matters not expressly provided for in this section the Commission may make orders with respect to all matters relating to traffic, tolls and tariffs or any of them.

The conclusion for them is inevitable: the Commis sion's role goes far beyond fixing rates or tolls and its powers to make any type of order on the sole condition that it be to carry into effect the Rail way Act, and remains in relation to tolls and tariffs clearly entitled it to make the order it made.

I do not share that view. It simply does not appear to me that the conclusion is inevitable. Of course, I readily agree that the Commission has a supervising and a regulating authority which goes beyond the fixing of tariffs and tolls. The fixing of tariffs and tolls covers in fact only what can be referred to as one "side of the equation": the side of the remuneration the Company is to receive for the services it provides; it has nothing to do with the nature and quality of the services provided. Obviously, both sides must be supervised and regu lated if possible abuses are to be restrained and it can easily be seen that the regulation of the nature and the quality of the service would require a great range of means of actions in order to have the necessary flexibility to deal with the wide variety of events that may arise. But I fail to see where in the Act the Commission is given the power to deal with tariffs and tolls otherwise than by approving, suspending or disallowing them. No doubt the

Commission can make all types of orders to force Bell to respect the many conditions and require ments imposed on it by, or in accordance with, the Special Act or the Railway Act; but, with respect to tariffs and tolls, Bell's sole obligation under the legislation is to charge only those tolls previously approved and the existence of such an obligation cannot expose Bell to an order which in no way fixes tariffs or tolls. Subsection 321(5) could not and did not intend to say otherwise, however vague may be its wording, the purpose for which it was adopted being to define powers in the sole context of the Railway Act. As pointed out by B. Roma- niuk and H. Janisch in their extensive article on "Competition in Telecommunications: Who Polices the Transition?" ((1986), 18 Ottawa L.R. 561) where they discuss the interplay between provisions of the National Transportation Act and the Railway Act [at page 594]: "A general power to make orders and regulations for the purpose of carrying other statutes into effect or exercising a jurisdiction conferred by other statutes cannot be construed as creating fundamental new powers, that is, powers that cannot logically be derived from the original enabling legislation." Besides, I would have great difficulty in accepting that the order we are concerned with is in any real and direct sense one "with respect to a matter relating to tolls and tariffs" as contemplated by the legisla tion; it appears to me to relate rather to profit and revenue. Merely because the main source of that profit and revenue has been charges for services rendered established in accordance with tariffs approved by the Commission does not make them a matter "relating to traffic, tolls and tariffs".

If the CRTC's order is taken on its face, it seems to me obvious that it implies an authority in the Commission to deal with excess or deficiency of earnings as such and it has been found, a long time ago, by the Alberta Supreme Court, Appel late Division, in Calgary (City) & Home Oil Co. v. Madison Natural Gas Co. & Br. American Utili ties Ltd. (1959), 19 D.L.R. (2d) 655, that a public

utility board such as the Commission could not pretend to have such an authority. No wonder, therefore, most of the intervenants relied primarily on the second line of reasoning.

2. As explained above, this second line of rea soning takes as its starting point the premise that the decision must be given its substantive meaning and the order to pay in the form of a credit seen merely as a means to give effect to the establish ment of tolls for a period already past. The credit is "tantamount" or "equivalent to" a toll reduction for the years 1985 and 1986. It is said that the true nature of the decision is a "disallowance" of the relevant tolls for those years and its true effect is to bring about a substitution "of a tariff satisfacto ry to the Commission", the whole as contemplated by paragraph 321(4)(b), which for convenience I quote again:

321. ...

(4) The Commission may

It seems to me that there is a confusion here between, on the one hand, the goal, the purpose, the aim or the intent of a decision and, on the other, its true nature, and the distinction, I submit, is basic when the issue is precisely whether there was authority to make the decision as it was actually made, whether there was power to order what was in fact ordered. The true nature of an order is determined by the command it contains and a good way to identify the command is to determine how the order can be enforced, a deter mination which, be it said in passing, raises par ticularly troubling questions here. But let us assume that the premise is acceptable. The ques tion which immediately arises is, of course, wheth er the Commission had jurisdiction to order direct ly or indirectly a retroactive decrease of the tolls.

It is suggested by some that the power, con ferred on the Commission by section 63 of the National Transportation Act, to "review, rescind,

change, alter or vary any order or decision made by it" implies necessarily the power to do it retroactively. Authority for that proposition is said to be found in the decision of the Supreme Court in Bakery and Confectionery Workers Interna tional Union of America, Local No. 468 et al. v. White Lunch Ltd. et al., [1966] S.C.R. 282; 56 D.L.R. (2d) 193, where it was held that the Labour Relations Board of British Columbia, in the exercise of its power to review could, by a new order, change with retroactive effect the name of the employer in a certification order which it had previously made. The main argument, however, advanced by all in support of the validity of the decision, is drawn from the presence of the interim order, and is based on subsection 57(2) of the National Transportation Act which, it will be remembered, read thus:

57. ...

Such an express statutory power to make an interim order and reserve for later a final determi nation would include by necessity, it is argued, the power to correct retroactively what was ordered in the interval. And a great deal of reliance is placed here on the judgment of the Alberta Court of Appeal in Re Coseka Resources Ltd. and Sara- toga Processing Co. Ltd. et al. (1981), 126 D.L.R. (3d) 705, where it was found that the section of The Public Utilities Board Act, R.S.A. 1970, c. 302, which authorizes the Public Utilities Board to make interim orders allowed the Board, in setting a "just and reasonable rate" for use of a gas processing facility under section 27 of The Gas Utilities Act, R.S.A. 1970, c. 158, to make such an order and to replace it later with a final one containing different rates having effect from any time back to the date of the first order.

With respect, I am not convinced by either of these two arguments.

The first one drawn from the power to vary has satisfactorily been disposed of, I believe, by the

New Brunswick Supreme Court, Appeal Division, in the case of R. v. Board of Commissioners of Public Utilities (N.B.) Ex parte Moncton Utility Gas Ltd. (1966), 60 D.L.R. (2d) 703 (N.B.S.C.). It was argued there as here, with the same reliance on the Supreme Court decision in the Bakery and Confectionery Workers case, that the Board of Commissioners of Public Utilities were entitled in exercising a power to vary given to them by one of the provisions of the Public Utilities Act, R.S.N.B. 1952, c. 186, to change rates retroactively. Here is how Chief Justice Bridges, writing for a unani mous court, dealt with the contention (at page 710):

In the Bakery & Confectionery Workers case, Hall, J., in referring to what Bull, J.A., stated in the Court below [51 D.L.R. (2d) 72], said at p. 204:

However, he limited the effect of s. 65(3) by holding that the word "vary" in the section "cannot be used as an excuse for bringing retroactively into being a new unit of employees for which the Union stands certified ..." I cannot read the section as narrowing the plain meaning of the word "vary". It is defined in the Shorter Oxford English Dictionary as: "To cause to change or alter; to adapt to certain circum stances or requirements by appropriate modifications" nor do I accept the view that the word "vary" cannot apply retroac tively. It has not such a limited meaning and circumstances will frequently arise where it must have a retroactive effect. The present case is a classical example.

It is to be noted that Hall, J., does not say that the word "alter", which means the same as "vary" and includes "reduce" in respect to a rate should in all cases have the meaning he gave it. I do not think, to use his language, that circumstances have arisen for the words "reduce" or "alter" to be given the interpretation sought by the distributor. If the Board has power to make retroactive rates in the present case, it has, because of the wording of the section, likewise authority to do so when ordering an increase in rates to consumers upon application of a distributor. In such a case there would be hundreds of users called upon to pay the difference between the old and new rates. This would be most unreasonable. I cannot give such an interpretation to the section. It is my opinion that neither the word "reduce" or "alter" in s. 6(1) of our Public Utilities Act should be interpreted as giving the Board the authority when fixing a rate to direct that it be retroactive.

With respect I share the views of Bridges C.J. and the New Brunswick Court of Appeal as to the content of the Bakery decision. Hall J. states the proposition central to his reasoning in the follow ing words: "I cannot read the section as narrowing the plain meaning of the word "vary" ... nor do I

accept the view that the word "vary" cannot apply retroactively. It has not such a limited meaning ...." This proposition cannot be transformed into one which would suggest that the power to vary implies in itself the power to do it with retroactive effect. It seems obvious to me that the word "vary" is neutral with respect to the power to act retroactively and I am simply unable to accept that by enacting section 63 of the National Trans portation Act as it did Parliament intended to give to the Commission the authority, not to protect rights as did the labour relations board in the Bakery case, but to destroy rights created by its original order.

The other argument based on the existence of the interim order does not, in my view, have any more conclusive value. The point was made that, to give subsection 57(2) of the National Transpor tation Act a real purpose, the interim order therein contemplated had to be given a meaning other than that of a mere temporary order, since the power to make an order having effect for only a limited time is already provided for by subsection 57(1) and section 63 of the same Act. I am not impressed. There is an essential distinction be tween an order made under subsection 57(1) or section 63 and one made under subsection 57(2), it being that one is meant to dispose finally of an application or of a matter otherwise raised while the other is not, and it is that fundamental distinc tion, in my view, which the drafters had in mind as indicated by the very first words of subsection 57(2): "instead of making an order final". It must not be forgotten that this section 57 of the Nation al Transportation Act is a provision of a general nature meant to apply not specifically to orders establishing tariffs and tolls but to all of the myriad of orders and decisions that the Canadian Transport Commission and (by virtue of subsec tions 14(2) and (3) of the Canadian Radio-televi sion and Telecommunications Commission Act, S.C. 1974-75-76, c. 49) the Canadian Radio- television and Telecommunications Commission may be called upon to make in their respective' fields of regulation. And in any event, the fact remains that the word "interim" does not in itself,

if one relies on the dictionary definitions, suggest anything other than "in the meantime", "in the interim", "for the time being" (see: The Shorter Oxford English Dictionary, (3rd ed.); see also: Stroud's Judicial Dictionary (5`h ed.), at the word "interim" and the case referred to therein Algar v. Middlesex County Council. In the matter of the Local Government Superannuation Act, 1937, and 1939, [1945] 2 All E. R. 243 (K.B.D.)). In my view, the power to make an interim order says nothing whatever of a power to come back and make a final order regulating differently the period covered by the initial order.

Does that mean that I disagree with the Coseka decision? No, I do not disagree with the judgment although I express, with the greatest respect, some reservations as to some incidental statements found in the reasons given in support of the conclusion.

In Re Eurocan Pulp & Paper Co. Ltd. and British Columbia Energy Commission et al. (1978), 87 D.L.R. (3d) 727, the Court of Appeal of British Columbia found that the B.C. Energy Commission was empowered to make some rate changes retroactive to the date of the application to which it was giving effect despite the absence of specific language in the governing statute, the Energy Act, S.B.C. 1973, c. 29. The main part of the reasons of Chief Justice Farris, writing for a unanimous Court, needs reproduction (at pages 731-732):

Reading the Act as a whole, it is my opinion that the Commis sion has been empowered to make rates effective to the date of application, even though there is no specific language in the Act to that effect. Support for this conclusion is to be found in the decision of the Supreme Court of the United States in United States v. New York Central R. Co. (1929), 73 L. ed. 619. In that case the railroads filed applications on February 25, 1921 and June 30, 1921, for increases in their mail tariffs. The relief sought was for dates prior to the applications and for the future. The Interstate Commerce Commission made orders establishing rates as fair and reasonable for the period subse quent to the filing of the applications. The orders were upheld by the Supreme Court of the United States. Mr. Justice Holmes in delivering the opinion of the Court said this at pp. 620-1:

But the filing of an application expresses a present dissatis faction and a demand for more. A further protest would be a superfluous formality. If the claim of the railroads is just they should be paid from the moment when the application is filed. In the often quoted words of Chief Justice Shaw: "If a piepowder court could be called on the instant, and on the spot, the true rule of justice for the public would be to pay the compensation with one hand whilst they apply the ax with the other." Parks v. Boston, 15 Pick. 198, 208. In fact the necessary investigation takes a long time, in these cases,—years,--but reasonable compensation for the years thus occupied is a constitutional right of the companies no less than it is for the future. Oklahoma Natural Gas Co. v. Russell, 261 U.S. 290, 293, 67 L. ed. 659, 662, 43 Sup. Ct. Rep. 353. This being so, and the Interstate Commerce Commission being the tribunal to which the railroads are referred, it is a natural incident of the jurisdiction that it should be free to treat its decision as made at once. Obvious ly Congress intended the Commission to settle the whole business, not to leave a straggling residuum to look out for itself, with possible danger to the validity of the act. No reason can have existed for leaving the additional annoyance and expense of a suit for compensation during the time of the proceedings before the Commission, when the Commission has had that very question before it and has answered it at least from the date of its orders. We are quite aware that minutiae of expression may be found that show Congress to have been thinking of the future. We put our decision not on any specific phrase but on the reasonable implication of an authority to change the rates of pay which existed from the day when the application was filed, the manifest intent to refer all the rights of the railroads to the Interstate Com merce Commission, and the fact that unless the Commission has the power assumed a part of the railroads' constitutional rights will be left in the air.

Judgment affirmed.

There is no question of constitutional rights involved in the present case; nonetheless, if the Commission does not have the power contended for, a utility would be deprived of a proper return on its investment capital for the period between the date of an application to have the rates reviewed and the date of a consequential Commission order. As in the present case this period could be lengthy. It is unreasonable to assume that the Legislature intended such a result.

In Nova, An Alberta Corporation v. Amoco Canada Petroleum Co. Ltd. et al., [1981] 2 S.C.R. 437, Estey J., delivering the judgment of the Court, confirmed in the course of his reasons the conclusion of the British Columbia Court of Appeal in the Re Eurocan case and approved without restrictions the reasons of Chief Justice Farris.

In my respectful opinion, here lies the basis for the Coseka decision. In the Nova case, as in the Re

Eurocan case, as in the United States v. New York Central R. Co. case referred to by Farris C.J., and likewise, I suggest with respect, as in the Coseka case, the power to act retroactively was accepted in order to prevent prejudice to an applicant arising from the time required to approve his application.

I have no difficulty with an implied power in the Commission to make a retroactive order to sur mount, without affecting the legitimate expecta tions of anybody, a practical difficulty as in the Bakery and Confectionery Workers case, or to protect an applicant or a complainant from being prejudiced by the fact that his well-founded application or complaint has required time to be dealt with. But I do not accept that the Commis sion may otherwise have the power to disallow retroactively rates it has already approved, be it by interim or final order, or, said otherwise, to render illegal what was not only unforbidden but formally authorized. I am, of course, influenced in my attitude by the strength of the presumption against retrospective operation of any legal enactment. As stated by Lord Watson in Young v. Adams, [1898] A.C. 469 (P.C.), at page 476 "it manifestly shocks one's sense of justice that an act legal at the time of doing it should be made unlawful by some new enactment". And should be borne in mind what Pierre-André Côté reminds us in his treatise The Interpretation of Legislation in Canada when speaking of the presumption, at page 125, "What for Parliament is only a presumption becomes for the administration a formal jurisdictional con straint." But I am also and more specifically influenced by my understanding of the scheme of the statute.

I mentioned, before dealing with the various arguments advanced in reply to the appellant's general submission, that, as presented, they were not going to the heart of the problem. Indeed, the real and only question raised, as I see it, is wheth er, in order to assure that the telephone tariffs and tolls chargeable by the utility would be just and reasonable, Parliament intended to confer upon the Commission a regulatory role that would be

retrospective as well as prospective. And I do not see how, looking at the legislation, the question may be answered otherwise than in the negative. The control of the Commission is over the tolls to be charged (subsection 320(2) of the Railway Act); it is these tolls which are subject to approval and the only obligation imposed on the Company is to limit its charges to the tolls approved. It should be observed that subsection 321(1) does not define as an obligation to be assumed by the Company that the tolls be just and reasonable, an observation which is all the more telling when the paragraph is read in conjunction with subsection 321(2) where clear obligations are imposed and I reproduce the text again for convenience:

(2) A company shall not, in respect of tolls or any services or facilities provided by the company as a telegraph or telephone company,

(a) make any unjust discrimination against any person or company;

(b) make or give any undue or unreasonable preference or advantage to or in favour of any particular person or com pany or any particular description or traffic, in any respect whatever; or

(c) subject any particular person or company or any particu lar description of traffic to any undue or unreasonable preju dice or disadvantage, in any respect whatever;

Besides, in the implementation of the legislation, if the Commission with respect to tariffs and tolls could act both ways, forward and backward in time, all the care put into the process of approving the rates on the basis of complex and extensive forecasts would be pretty close to useless and to no real avail. Parliament could have adopted another scheme. There are many legislative schemes where the utility establishes its own tolls but a public authority, acting upon complaint or proprio motu, is entitled to intervene and to impose changes (which incidentally may very well be meant to be retroactive at least to the time of the complaint). Eastey J. has interesting comments on the two

different patterns in the course of his reasons in the Nova case at pages 450 and 451. But, in its wisdom, and in the name, I suppose, of consisten cy, stability and easier managerial planning, Par liament has chosen not to follow that route.

It is said that the finding of excess profit is in effect a finding that the rates were too high, therefore unjust and unreasonable, and that such a situation cannot be left unremedied without betraying the will of Parliament that all tolls be just and reasonable. I see the will of Parliament as being more complex than what the proposition suggests. Of course, Parliament could not express more clearly its desire that the tolls be just and reasonable, but, in my understanding, to realize its goal, it has set up a particular scheme which, in its view, was capable of achieving the desired result without disregarding some other interests protect ed by our economic system. All that can be said is that, this time, the scheme failed to the benefit of the Company and its shareholders as it can fail again next time to the benefit of the customers. And the possibility of failures of that type, which, fortunately, have apparently been extremely rare, no doubt because of the competence and effective ness of the Commission and the relative stability of the economy, were certainly not wholly unforeseen by Parliament.

It is said also that the Commission may be led to refuse systematically to exercise its power to make an interim order increasing rates if the effect of the order cannot later, in case of error, be erased. My answer to that is simple. Parliament has con ferred duties on the Commission, amongst which is the duty to consider a request for an interim order and grant it if found justified. No doubt the performance of such a duty is particularly difficult and must be subjected to very special consider ations. But the mere possibility that an error may be committed is no excuse to refuse to perform it.

It remains for me to apply those views to the case at bar and express the straightforward conclu sion they lead to. I think that the appeal is well founded. The Commission had no jurisdiction to

direct Bell to give to its subscribers of record a credit of 206 million dollars representing alleged excess revenue earned in 1985 and 1986. Telecom Decision CRTC 86-17 should be set aside in so far as that direction is concerned.

* * *

The following are the reasons for judgment rendered in English by

HUGESSEN J. (dissenting): I have had the ben efit of reading the reasons for judgment prepared by my brother Marceau J. I regret that I am unable to agree with him. However, because of the very full and complete treatment that he has given the questions raised by this appeal, it is possible for me to express my reasons very shortly.

I start with five observations which seem to me to form the very essence of the background to this appeal:

1. By its application of September 4, 1984, Bell put its entire rate structure in issue before the Commission as of January 1, 1985. Quite apart from its power to intervene on its own motion to adjust rates which it finds to be no longer just and reasonable, the Commission could, on the basis of this application, have adjusted Bell's rates as of the beginning of 1985 to what it found to be just and reasonable.

2. By its decision CRTC 84-28, dated Decem- ber 19, 1984, the Commission decreed interim rates for Bell with effect from January 1, 1985. All Bell's tariffs in force from that time forward were interim tariffs.

3. By its decision CRTC 86-17, of October 14, 1986, the decision presently under appeal, the Commission found that the rates charged by Bell under the tariffs in force since January 1, 1985, had generated revenues in excess of the fair return on equity to the tune of $206 million. This finding is not contested by Bell, nor the implication that flows from it that the rates charged in 1985 and 1986 were not just and reasonable.

4. The delay of over two years between the initial application and the decision under appeal is

in considerable measure due to Bell itself. In par ticular, in March and again in October 1985, Bell sought first to postpone and then to withdraw altogether its rate increase application.

5. In all its orders and notices relating to the present matter, the Commission made it clear that it was keeping open the question of the 1985 and 1986 years and the return on equity and revenue requirements for those years; this is so even with regard to orders made after all or a substantial portion of those years had passed into history.

It is not necessary, for the purposes of the present appeal, to determine whether the Commis sion had the power to make an order fixing rates retroactive to the date of Bell's application although this is clearly the practical effect of what it has in fact done. I would simply note that the British Columbia Court of Appeal, interpreting a different regulatory scheme in Re Eurocan Pulp & Paper Co. Ltd. and British Columbia Energy Commission et al. (1978), 87 D.L.R. (3d) 727, found such powers to exist. That decision was quoted with no indication of disapproval by Estey J., speaking for a unanimous court, in Nova, An Alberta Corporation v. Amoco Canada Petroleum Co. Ltd. et al., [1981] 2 S.C.R. 437. I would add that I am quite unable to see any reason why such a power, if it exists, should be held to operate only to the advantage of an applicant utility. I have always understood that sauce for the goose is good for the gander as well.

The Commission's power in the present case, as it seems to me however, flows directly from the fact that its order of December 19, 1984, was an interim order given pursuant to subsection 57(2) of the National Transportation Act.' Section 57 in its entirety reads as follows:

5 R.S.C. 1970, c. N-17.

any party interested, and the Commission may direct that the whole, or any portion of such order, shall have force for a limited time, or until the happening of a specified event.

In subsection (1), the Commission is empowered to give orders which I would describe, in the language of the civil law, as being orders with a term or orders subject to suspensive or resolutory conditions. Clearly subsection (2), when it talks of "an interim order", is dealing with something else and is adding to the powers which the Commission already has. But an interim order cannot simply be one which is subject to later, prospective revision by the Commission, because all orders fixing tariffs and tolls may be so revised, even on the Commission's own motion. Thus, when the subsec tion contrasts an interim order with one which is "final", the latter can only mean an order which disposes of the question before the Commission for the time being; a rate-fixing order which is "final" in the sense of speaking for all time is simply not possible in the scheme of the statute. That being so, it seems to me that an interim order can only be one which, like all rate orders, has prospective effect but on which the Commission reserves "fur- ther directions" which may be retroactive to the date the order was made.

In this respect I am in complete agreement with the unanimous decision of the Alberta Court of Appeal in Re Coseka Resources Ltd. and Sarato- ga Processing Co. Ltd. et al. (1981), 126 D.L.R. (3d) 705. There the Court had to interpret section 52 of the Public Utilities Board Act, 6 which is in language substantially identical to section 57 of the National Transportation Act. I adopt, with respect, the following words of the judgment of Laycraft J.A., as he then was, speaking for the Court [at pages 717 and 718]:

6 R.S.A. 1970, c. 302.

In my view, s. 52(2), empowering the Board to "make an interim order and reserve further direction, either for an adjourned hearing of the matter or for further application" (emphasis added) contemplates the very situation which arose in this case. It was virtually impossible to fix just and reason able rates for the processing of Coseka's gas and even an approximation of them would have been speculative. So instead of making a final order, the Board made an interim order and reserved the matter for a "further direction" which it has now made.

In my view, to say that an interim order may not be replaced by a final order is to attribute virtually no additional powers to the Board from s. 52 beyond those already contained in either the Gas Utilities Act or the Public Utilities Board Act to make final orders. The Board is by other provisions of the statute empowered by order to fix rates either on application or on its own motion. An interim order would be the same, and have the same effect, as a final order unless the "further direction" which the statute contemplates includes the power to change the interim order. On that construction of the section the "interim" order would be a "final" order in all but name. The Board would need no further legislative authority to issue a further "final" order since it may fix rates under s. 27 on its own motion without a further application. The provision for an interim order was intended to permit rates to be fixed subject to correction to be made when the hearing is subsequently completed.

It was urged during argument that s. 52(2) was merely intended to enable the Board to achieve "rough justice" during the period of its operation until a final order is issued. However, the Board is required to fix "just and reasonable rates" not "roughly just and reasonable rates". The words "reserve for further direction", in my view, contemplate changes as soon as the Board is able to determine those just and reasonable rates.

It was also urged on behalf of Coseka that great injustice will result if interim rates once paid may subsequently be varied. There is no doubt that the Board must take careful account of this factor in its determination of what is just and reasonable and the problem becomes the more serious the longer is the delay. Some purchasers of the utility service for whom it is a cost of doing business may be unable to incorporate a changed rate in the price of the goods or services they themselves sell. Other purchasers who made economic decisions on the premise that the utility service had a given cost, may find those decisions invalidated. Nevertheless all consumers of a utility service must be aware that the rates in an interim order are subject to change and determine their course of action upon the basis of that knowledge. The time involved will usually be relatively short and the Board will do its best to minimize the impact of the change. In this case, through no fault of the Board, a very long time elapsed before the interim order could be finalized. When the parties to a hearing realize that the rates set in an interim order are subject to variation, they will

perceive that there is no advantage to be gained by delay. (Emphasis added.)

I conclude, for the reasons stated, that the Com mission had the power, in October of 1986, to fix just and reasonable rates for Bell with effect from January 1, 1985, the effective date of its interim order.

Two subsidiary but nonetheless important ques tions remain.

In the first place, it is suggested that, even if the Commission had, as I have found, the power to revise its interim order with effect from January 1, 1985, it could only do so to the extent of the two per cent increase which that interim order had decreed over the rates in effect on December 31, 1984. Put another way, the Commission having decreed a two per cent increase in rates as of January 1, 1985, its revision of that interim order could not do more than put matters back to where they were at the time the interim order was made.

With respect, it seems to me that this submis sion misapprehends the nature of the interim order and attaches the interim characteristic only to the increase. This is clearly wrong. When a rate is increased on an interim basis, the whole of the rate so increased becomes an interim rate and subject to revision accordingly. The new tariff filed by Bell to give effect to the increase was not in two parts, having a pre-January 1, 1985, basis and a post- January 1, 1985, increase; rather it was an entire tariff setting forth the whole rate as increased. All rates charged by Bell, from January 1, 1985, to the date of the decision under appeal, flowed from and were authorized by interim orders made by the Commission. Accordingly when the Commission undertook to revise those orders and to make a final order, it was not limited to the amount of the increase it had granted in January 1985 and rescinded in September of the same year.

In the second place, it is argued that the Com mission's power is strictly limited to that of setting

rates and approving tariffs to give effect thereto. Therefore even if the Commission had the power to effect a rate revision as at January 1, 1985, it had no authority to order Bell to make a refund to its customers of the amounts which it found to have been overcharged. In particular is this so, it is argued, because the customers who will benefit from the ordered refund, the subscribers as of the date of the decision under appeal, are not precisely the same group as those who have paid the exces sive amounts and the refund to each will not in every case be in the precise amount of the overpay- ment. This argument provokes several observations on my part.

First, to give effect to the argument would be but cold comfort to Bell: in the place of an order to pay a fixed amount to a determined and readily identifiable group of customers, it would be faced with a vast number of individual claims each of which would require to be assessed and quite possibly litigated.

My second observation flows from the first. The Commission having decided that the rates charged in 1985 and 1986 were not just and reasonable and having determined the amount of Bell's excess revenues resulting therefrom as being $206 million was faced with the strictly practical question of finding a fair and equitable manner of putting matters to rights. The situation was analogous to that faced by the Public Utilities Board of Alberta in the Edmonton, City of, et al. v. Northwestern Utilities Limited, [1961] S.C.R. 392. There Locke J., in dealing with an innovative scheme by which the Board proposed to deal with variations in the utility's costs which were impossible to estimate with accuracy, said [at page 406]:

... the proposed order would be made in an attempt to ensure that the utility should from year to year be enabled to realize, as nearly as may be, the fair return mentioned in that subsec tion and to comply with the Board's duty to permit this to be done. How this should be accomplished, when the prospective outlay for gas purchases was impossible to determine in advance with reasonable certainty, was an administrative matter for the Board to determine, in my opinion. This, it would appear, it proposed to do in a practical manner which would, in its judgment, be fair alike to the utility and the consumer.

So too, I think, with the Commission's order in the present case. The fact that Bell has realized excess revenues is not contested. The power of the Com mission to revise the rates as of January 1, 1985, has been established. The way of doing so is an "administrative matter" properly left for the Com mission's determination.

Finally on this point, I would observe that in substance though admittedly not in form the Com mission's order is one with respect to a matter relating to tolls and tariffs. As such it falls within the powers granted the Commission by subsection 321(5) of the Railway Act: 7

321. ...

(5) In all other matters not expressly provided for in this section the Commission may make orders with respect to all matters relating to traffic, tolls and tariffs or any of them.

For all the foregoing reasons, I would dismiss the appeal.

7 R.S.C. 1970, c. R-2.

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