Director of Criminal and Penal Prosecutions v. Telus Communications Inc., and Director of Criminal and Penal Prosecutions v. Bell Canada

Two recent Court of Québec decisions found newly enacted provisions of the Québec Consumer Protection Act to be constitutionally inapplicable and inoperative for telecommunications services providers facing charges of penal offences.

On June 30, 2010, An Act to amend the Consumer Protection Act and other legislative provisions, S.Q. 2009, c. 51, added numerous new provisions to Québec’s Consumer Protection Act (“CPA”). In the wake of these provisions coming into force, Québec’s Office de la protection du consommateur instituted hundreds of penal infractions against Telus Communications Inc. (“Telus”) and Bell Canada (“Bell”), claiming that their terms and conditions of service were contrary to ss. 11.2, 11.3, 13, and 214 to 214.11 CPA. Any person who purportedly contravenes the CPA can be prosecuted under its penal provisions and found guilty of an offence.

Sections 11.2 and 11.3 of the CPA respectively prohibit certain contractual stipulations pertaining to the unilateral modification or cancellation of a contract, while s. 13 prohibits to impose charges, penalties or damages upon the non-performance of an obligation. Sections 214.1 to 214.11 dictate that a “contract involving sequential performance for a service provided at a distance” must contain and establish various limitations in the performance of any such contract.

The defendants, relying on ss. 91 and 92 of the Constitution Act, 1867 and Parliament’s exclusive jurisdiction over telecommunications, challenged the CPA provisions in dispute at trial as being ultra vires of the provincial legislature as intended to regulate telecommunications service providers. In the alternative, the defendants sought that the CPA provisions in dispute be declared inapplicable and inoperative through the application of the doctrines of interjurisdictional immunity and federal paramountcy.

Given the importance of the issues in dispute and the specificities of these penal prosecutions, the court found that it would be inadvisable to interpret the provisions of the CPA at issue without first ensuring that they apply to the defendants from a constitutional standpoint. Under sections 92(10)(a) and 91(29) of the Constitution Act, 1867, Parliament has exclusive jurisdiction over telecommunications. The Telecommunications Act offers the main legislative framework applicable to telecommunications undertakings, in addition to the broad regulatory and adjudicative jurisdictions it extends to the CRTC in relation, inter alia, to the conditions of the provision of telecommunications services.

Conversely, the CPA seeks to restore contractual equilibrium between merchants and consumers by prohibiting certain commercial practices considered deceptive, and regulating certain aspects of their contractual relations. Historically, telecommunications contracts were specifically excluded from the ambit of the CPA, as the Supreme Court of Canada ruled in Alberta Government Telephones v. Canada (C.R.T.C), [1989] 2 S.C.R. 225 and in Téléphone Guèvrement v. Québec (Régie des télécommunications), [1994] 1 S.C.R. 878, that such contracts were outside a provincial legislature’s purview.

After having considered the evidence, the court was of the view that the CPA provisions in dispute, while broadly drafted, were enacted for the intent and purpose of regulating the telecommunications industry, and dictate the conditions for the commercialization of telecommunications for Québec to enact its own contractual standards and requirements for such services. As a result, the court found that the National Assembly was directly regulating the content of federal jurisdiction over telecommunications with the CPA provisions in dispute.

Unlike a Superior Court, the Court of Québec has only a subject-matter jurisdiction and no inherent jurisdiction; it thus lacks jurisdiction to declare that a legislative provision is invalid by virtue of section 52 of the Constitution Act, 1982.

In that context, the Court of Québec considered it unnecessary to rule on the validity of the CPA provisions in dispute, having regard to their pith and substance to determine if they were ultra vires of the provincial legislature, and exercised judicial restraint in that regard. However, the court may rule on the constitutionality of a legislative provision in the course of exercising its jurisdiction over a penal matter as in the case at bar.

Applying the interjurisdictional immunity doctrine, the Court found that the CPA provisions are intruding on the core of Parliament’s jurisdiction over telecommunications, which includes the conditions for the commercialization of telecommunications services. In addition, the CPA provisions have sufficiently material impacts to impart Parliament’s exclusive jurisdiction. As a result, the court concluded that the CPA provisions were constitutionally inapplicable in relation to the offences. As for the federal paramountcy doctrine, the court found that the CPA provisions were frustrating the purpose of the federal legislative scheme and the national telecommunications policy, notably by regulating rates, the provision of services and the conditions of commercialization of telecommunications services.

As a result, the Court concluded that the CPA provisions were constitutionally inoperative in relation to the offences. Consequently, the Court acquitted the defendants of all the charges against them.

On May 10, 2019, the Director of Criminal and Penal Prosecutions and the Attorney General of Quebec filed an appeal of the judgments.

Telus Communications Inc. was represented by Yves Martineau and Marjorie Bouchard of Stikeman Elliott LLP, and Mathieu Quenneville and Samuel Bachand of Prévost Fortin D’Aoust LLP (on constitutional questions), with the assistance of in-house counsel Delbie Desharnais.

Bell Canada was represented by Vincent de l’Étoile of Langlois Lawyers LLP, with the assistance of in-house counsel Mélissa Beaudry.

The Director of Criminal and Penal Prosecutions was represented by Simon Lajoie.

The Attorney General of Québec was represented by Charles Gravel of Bernard Roy (Justice Québec).