The Supreme Court of Canada has refused to hear an appeal relating to the scope of the authority of the federal cabinet to overturn a CRTC decision concerning whether a telecommunications carrier has met Canadian ownership obligations.

In doing so, the Court has essentially affirmed the eligibility of wireless new entrant Wind Mobile to operate, as well as implicitly endorsed the authority of the federal cabinet to take into account broad policy questions in determining whether to overturn CRTC decisions.

It also brings to an end a lengthy string of contradictory decisions, reviews and appeals, which began when the CRTC found  in 2009 that that, Globalive Wireless Management Corp. (Globalive), which operates in Canada as Wind Moible, was effectively controlled by a non-Canadian (Orascom Telecom Holding (Canada) Limited -- an Egyptian-controlled company) and was therefore ineligible to operate in Canada (Orascom Telecom Holding (Canada) Limited was subsequently acquired by Russian wireless carrier Vimpelcom Ltd. in April of 2011). That CRTC decision was at odds with the government’s issuance to Globalive of a spectrum licence, since holders of such licences must meet the same Canadian ownership requirements as telecommunications carriers.

The Telecommunications Act provides that telecommunications common carriers must meet Canadian ownership requirements to be eligible to operate in Canada. In order to be so eligible, at least 80% of the members of a corporation’s board must be Canadian, at least 80% of its voting shares must be held by Canadians and the corporation may not be otherwise controlled by non-Canadians. Each of the CRTC’s decision and the subsequent variances and appeals focused on Globalive’s compliance with the latter criterion.

Next, the federal cabinet disagreed with the CRTC and varied the regulator’s decision, finding that the record did not support the conclusion that the company was controlled by a non-Canadian, and suggesting that the Canadian ownership and control requirements “should be interpreted in a way that ensures that access to foreign capital, technology and experience is encouraged.”

The federal cabinet (formally, the Governor in Council) is empowered by s. 12 of the Telecommunications Act to vary, rescind or refer back for reconsideration any CRTC decisions under that Act, although the section provides no guidance on the factors to be taken into account by the cabinet in making such a decision.

Then, Public Mobile Inc., another new wireless entrant, brought an application for judicial review of the cabinet decision.  In the case of Public Mobile v. Attorney General of Canada et al., the Federal Court, Trial Division granted the application and quashed the cabinet decision.

In Globalive Wireless Management Corp. v. Public Mobile Inc. the Trial Division decision was subsequently overturned by the Federal Court of Appeal, which rejected the errors of law identified by the lower court.  We discussed this case in more detail in a previous post.

The Supreme Court’s refusal to hear a further appeal means last year’s Federal Court of Appeal decision will continue to stand, and that all avenues for appeal or variance have been exhausted.

Ironically, on the same day that the Supreme Court issued its denial of leave to appeal, Parliament introduced proposed amendments to the Telecommunications Act, which would exempt smaller telecommunications carriers like Wind Mobile from the obligation to comply with Canadian ownership requirements, rendering moot the original impetus for the cabinet variance and judicial consideration of the last 3 years.