Originally published in Blakes Bulletin on
Communications, June 2011
Wind Mobile has taken another step along what has become a long
and difficult road, with many twists and turns. But whether the
release of a Federal Court of Appeal decision, once again granting
it the right to operate as a wireless carrier in Canada, is the end
of this journey remains to be seen.
Globalive Wireless Management Corporation (Globalive), now
operating as Wind Mobile, successfully bid for various blocks of
radio spectrum in Industry Canada's Advanced Wireless Spectrum
Auction in 2008. However, before Wind Mobile could begin operations
in Canada, its ownership structure also had to be approved by
Canada's national telecommunications regulator, the Canadian
Radio-television and Telecommunications Commission (the CRTC).
As noted in our October 2009 Blakes Bulletin, the CRTC conducted a lengthy hearing
into Wind Mobile's ownership structure and concluded that it
was controlled by a non-Canadian and therefore ineligible to
operate in Canada as a telecommunications common carrier. The
Minister of Industry immediately announced his intention to review
the CRTC's decision.
As discussed in our December 2009 Blakes Bulletin, the Governor in Council issued an
order-in-council overturning the CRTC's decision, finding in
essence that Wind Mobile was owned and operated by Canadians.
Public Mobile, another new entrant in the Canadian wireless market,
then applied to the Federal Court for judicial review of the
In February 2011, the Federal Court quashed the
order-in-council, finding that the Governor in Council had
committed an error of law in relying on a previously unknown policy
objective, namely, that the Telecommunications Act
"... should be interpreted in a way that ensures that access
to foreign capital, technology and experience is encouraged in a
manner that supports all of the Canadian telecommunications policy
Federal Court of Appeal's Decision
The attorney general and Wind Mobile appealed the Federal Court
decision. In a unanimous judgment, issued on June 9, 2011, the
Federal Court of Appeal allowed the appeal and restored the
order-in-council, finding that policy considerations did not play a
role in the Governor in Council's decision. Rather, the
Governor in Council simply reached a different conclusion after
considering the same facts and applying the same law as the CRTC.
As succinctly noted in the Court's reasons for judgment:
"It is clear that in reaching its decision on control in fact,
the Governor in Council decided the issue without referring at all
to any policy issues."
The Federal Court of Appeal went on to note that the Governor in
Council can incorporate policy considerations and take into account
the statutory context in deciding whether a company is in fact
controlled by a non-Canadian, provided that any such policies
operate within the limits of the policy objectives enunciated in
the Act. In this case, the Federal Court of Appeal noted that the
promotion of foreign investment advanced a number of other policy
objectives set out in the Act.
Preliminary indications are that Public Mobile will seek leave
to appeal the decision to the Supreme Court of Canada. However, it
is not at all certain that the Supreme Court would agree to hear
the appeal. In any event, this current decision gives the federal
government some time to consider its options before deciding
whether to introduce legislation to further reduce foreign
ownership restrictions for telecommunications common carriers in
Canada – something the government has suggested it would
do in both the 2010 and 2011 Throne Speeches.
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