The Supreme Court of Canada Renders a Long Awaited Ruling regarding the Power to Situate Radiocommunication Antenna Systems 

publication 

September 2016

Real Estate Bulletin

The proliferation of the number of radiocommunication antennas and other radiocommunication systems in Canada in recent years in response to the growing demand of cellular radiocommunication network users has given rise to numerous conflicts opposing, on the one hand, telecommunication firms asserting the scope of federal jurisdiction over radiocommunication and, on the other hand, cities and municipalities, seeking control with respect to the development of their territories.1 On June 16, 2016, the Supreme Court of Canada sealed the fate of a legal dispute opposing Rogers Communications Inc. (“Rogers”) to the City of Châteauguay (“Châteauguay”)2 since 2008 and, by so doing, also put an end to years of uncertainty with respect to the extent of the municipalities’ powers regarding the determination of the location of radiocommunication antenna systems. On the basis of constitutional grounds, the Supreme Court of Canada found in favour of Rogers and confirmed the paramountcy of federal power over radiocommunication.

Facts

Rogers is a communications and media company that holds a spectrum license. This license requires Rogers to provide services in precisely specified Canadian geographic areas. Among such areas is the City of Châteauguay, where Rogers wished to build a new radiocommunication tower in order to fill certain coverage gaps in its network. In order to comply with the terms of its license, Rogers undertook to build a radiocommunication antenna system on the property located at 411 Saint-Francis Boulevard (“411 Saint-Francis”). Such installation was agreed to by the owner of the property.

In March 2008, Rogers informed Châteauguay of its intention to materialize its construction project. Consequently, Rogers requested the authorization of the federal Minister of Industry (the “Minister”) for a specific site, as provided in the Radiocommunication Act, and subsequently initiated the 120-day public consultation process, as required under the Industry Canada circular. Rogers also notified the residents and property owners living in a determined area adjacent to 411 Saint-Francis and published a notice in a local newspaper.

On April 28, 2008, Châteauguay notified Rogers of its opposition to the project. Châteauguay argued that the project would be visually disagreeable and contravened its zoning by-law, and raised questions regarding the potential adverse impact of the project on the health and safety of residents living in the area. Châteauguay then suggested three alternatives to Rogers: to install the new antenna on an existing site; to increase the power of the signal from an existing antenna already operated by Rogers; or to complete the project on a new property located at 50 Industriel Boulevard (“50 Industriel”).

Later that year, Rogers advised Châteauguay that all of the proposed alternatives were inadequate. After review, Rogers argued that the existing site and antenna were inadequate and that 50 Industriel was not available for its project. Rogers also confirmed the compliance of the projected tower with the requirements established by Health Canada in Safety Code 63 with respect to limits of exposure to radiofrequency. In February 2009, Châteauguay finally issued a building permit to Rogers to complete the project at 411 Saint-Francis.

Subsequently, Châteauguay received a petition signed by several residents opposing the project, resulting in the resumption of the public consultation process. On September 21, 2009, the Minister, by virtue of its powers under the Radiocommunication Act, determined that the consultation process had been completed satisfactorily and that the project would not negatively impact the environment. The Minister nevertheless expressed its wish that Rogers and Châteauguay come to a mutually agreeable arrangement. The Minister indicated that it would give the opportunity to Châteauguay to find an alternative site to 411 Saint-Francis before rendering its final decision regarding the location of Rogers’ tower. Châteauguay then again proposed the 50 Boulevard Industriel property as an alternative site for the new antenna system, as this site was also located within the designated search area. Châteauguay notified Rogers of its intention to acquire that property either by mutual agreement or by way of expropriation. Rogers agreed to consider this alternative location, on the condition that the transaction between Châteauguay and the owner of that property were to take place no later than February 15, 2010. However, a third party (Christina White) purchased 50 Industriel before Châteauguay’s municipal council could adopt a resolution authorizing the expropriation. Châteauguay ultimately published a notice of expropriation for 50 Industriel on the land register. This publication, however, occured after the expiry of the deadline determined by Rogers. Ms. White then filed a petition to contest such notice of expropriation a few days later.

Concerned that the expropriation proceedings would drag on, Rogers asked the Minister to determine the location of the projected tower. On July 26, 2010, the Minister finally approved the installation of the tower at 411 Saint-Francis. By doing so, the Ministry put an end to months of public consultation and discussions between Châteauguay and Rogers.

Following the Minister’s decision, Rogers informed Châteauguay that it would proceed with the construction of its tower at 411 Saint-Francis. In October of the same year, Châteauguay asked Rogers to delay the work until a decision was rendered with respect to the expropriation of 50 Industriel and, in the event of an adverse ruling, agreed to allow the construction of the tower at 411 Saint-Francis.

However, in the meantime, the City adopted a resolution authorizing the creation of a land reserve on 411 Saint-Francis, which lead to Rogers rejecting Châteauguay’s offer. On October 12, 2010, Rogers was served with the notice of reserve for 411 Saint-Francis, applicable for a term of 2 years and prohibiting any new construction on the property. Rogers then filed a motion to contest the notice, alleging that such a notice was unconstitutional as it intruded on the federal power of radiocommunication. Such notice of reserve was renewed for an additional term of 2 years before its initial expiry.

Judgments of the Lower Courts

(a)  Superior Court

The Superior Court annulled the notice of reserve registered by the City of Châteauguay. First, the judge concluded that Châteauguay had acted to further a valid municipal purpose and in the interest of the health and well-being of its residents by exercising its expropriation power with respect to the property at 50 Boulevard Industriel. According to the Court, such a power was not exercised to favour the interests of a private entity and was not abusive.4 Second, the Court held that the notice of reserve registered by Châteauguay did not encroach on the exclusive federal jurisdiction with respect to radiocommunication, as it did not require Rogers to use 50 Industriel. However, despite these two findings in favour of Châteauguay, the judge found that the discretion conferred on a municipality to establish a reserve was exercised in bad faith, as it was intended to prevent the construction of the tower, the whole in violation of administrative law principles. The notice of reserve was therefore annulled on administrative law grounds rather than pursuant to constitutional principles.

(b)  Court of Appeal

The Court of Appeal was of the view that municipalities have decisional powers with regard to the development of their territory and the preservation of the health and well-being of their citizens, notwithstanding the exclusive federal jurisdiction over radiocommunication. In addition, the Court observed that it was difficult to conclude to the bad faith of Châteauguay when it issued its reserve and expropriation notices, as it was acting to pursue legitimate goals. The Court also rejected the constitutional arguments put forward by Rogers. The Court concluded that the determination of the location of a radiocommunication tower was not an essential element of the federal jurisdiction over radiocommunication. Therefore, the Court of Appeal held that Châteauguay’s notice of reserve was valid and did not infringe upon federal powers.

The Supreme Court Ruling

(a)  Arguments of the Parties

Rogers argued that the sole purpose and effect of the notice of reserve was to prevent it from constructing its antenna system at 411 Saint-Francis. It also argued that the notice related, in pith and substance, to the siting of radiocommunication infrastructure. According to Rogers, the notice of reserve was therefore unconstitutional, since it fell within exclusive federal jurisdiction over radiocommunication. According to Châteauguay, in order to ascertain the pith and substance of the notice of reserve, it was necessary to distinguish the effective impact of the notice of reserve from its intended purpose. It contended that the ultimate purpose of the reserve was to protect the health and well‑being of its residents living close to 411 Saint-Francis and to ensure the development of its territory. Châteauguay thus argued that since these are matters that fall within the provincial powers with respect to “Property and Civil Rights in the Province” and “Generally all Matters of a merely local or private Nature in the Province” granted pursuant to the Constitution Act, 1867, the notice of reserve was therefore intra vires and constituted a legitimate exercise of the powers delegated to it.

(b)  Doctrine of Pith and Substance

The majority of the Supreme Court of Canada was of the view that the notice of reserve is ultra vires of the powers attributed to Châteauguay, and concluded that it should be annulled. For several grounds, the Court considered that the issuance of the notice of reserve constituted an exercise of the powers over radiocommunication, which falls within exclusive federal jurisdiction. To reach such a conclusion, the Court analyzed the pith and substance of the notice of reserve by interpreting its purpose and effects. The evidence adduced showed that the notice of reserve was registered subsequent to the approval of the project by the Minister, immediately after the refusal of Châteauguay’s proposal to Rogers and immediately after Rogers announced its intention to go forward with the construction of its antennas at 411 Saint-Francis. According to the Court, even by constructing these facts generously, one could only conclude that the purpose of the notice of reserve was to prevent Rogers from installing its radiocommunication antenna system at 411 Saint-Francis by limiting the possible choices for the system’s location. Indeed, from a legal standpoint, it prohibited all construction on the property at 411 Saint-Francis for a period of 2 years and, from a practical standpoint, it prevented Rogers from constructing its antenna system on the property of its choice and approved by the Minister. Therefore, even though the adoption of the notice of reserve was aimed at protecting residents of Châteauguay, its practical and legal impacts were the intrusion upon federal jurisdiction over radiocommunication.

According to the Court, to hold otherwise could lead to municipalities systematically intruding on the federal power to choose where to locate radiocommunication infrastructure by invoking local interests. The Court explained, however, that the Court’s decision must not be interpreted as indicating that a municipality exercises a federal power when it supports a firm such as Rogers in an antenna system installation process via the exercise of expropriating powers. In such a case, a municipality would not be choosing the location of an antenna system, and its actions would simply be related to the development of its territory, which is permitted under the division of powers. Such collaboration by a city pursues a development purpose, which falls within its jurisdiction. Conversely, the Court observed that where a municipality objects to the construction of a tower for which the location has been approved by the Minister, the municipality is then exercising the federal jurisdiction to determine the location of the infrastructure necessary to the deployment of a radiocommunication network.

The Court also firmly rejected Châteauguay’s key argument based on the principle of co-operative federalism. In the words of the Court, this principle can neither override nor modify the division of powers conferred by the Constitution Act, 1867, and cannot impose limits on the exercise of exclusive legislative authority or validate an otherwise unconstitutional notice. Because of its pith and substance, which is of exclusive federal jurisdiction, the challenged measure does not present a two-fold aspect, namely a provincial aspect with respect to healthcare, and a federal aspect with respect to radiocommunication. The Court concluded that, based on the facts presented before the Court, the contrast between the materiality of the two aspects is very marked: the federal jurisdiction is much more significant. Recognizing the opposite would contradict the precedent established by the Privy Council in In re Regulation and Control of Radio Communication in Canada,5 to the effect that the federal jurisdiction over the siting of such infrastructure is exclusive. Consequently, the Court held that the notice of reserve was made ultra vires of Châteauguay’s powers and competence.

(c)  Doctrine of Interjurisdictional Immunity

Even though the Court found that the doctrine of pith and substance sufficed to dispose of the appeal in favour of Rogers, it nevertheless went on to apply the doctrine of interjurisdictional immunity to clarify the applicable law and further substantiate its decision.

This doctrine has the effect of protecting a jurisdiction (e.g. federal) against intrusions that may be made by another legislative banch (in the present case, provincial or municipal). In practice, the Court has to assess whether a particular measure intrudes on the core of a given jurisdiction, and if so, it must determine whether the impact of such intrusion is serious or significant.

The parties submitted various arguments regarding the doctrine of interjurisdictional immunity. On the one hand, Rogers claimed that the doctrine of interjurisdictional immunity protected the exercise of activities falling within the core of a federal jurisdiction. On the other hand, Châteauguay maintained that the core of the federal jurisdiction did not include the selection of a specific location within an area determined by Rogers. Alternatively, Châteauguay alleged that the notice of reserve did not intrude the federal jurisdiction in a sufficiently serious and significant matter, as it only had the effect of delaying the construction of the radio tower.

The Court found that it had to follow the precedent established in Toronto Corporation v. Bell Telephone Co. of Canada,6 which held that the location of poles and cables falls within the core of federal power over radiocommunication, and determined that the siting of antennas, like the choice of location for poles and cables, is at the core of the federal power over radiocommunication. This view was strengthened by the testimony of Rogers’ manager of radio engineering,7 who explained that the designated location of a tower must be scrupulously observed, as a simple derivation of 100 or 200 meters can undermine the effectiveness of the radiocommunication network. The Court therefore concluded that the determination of the location of antenna systems is at the core of the federal jurisdiction over radiocommunication, notably since the efficient operation of the cellular network is greatly impacted by this decision. The Court is of the view that Parliament should have the power to rule on this to adequately fulfill the jurisdiction that it enjoys.

The Court added that the notice of reserve did not simply “affect” the federal power over radiocommunication; it seriously and significantly impaired it, as demonstrated by the fact that the notice of reserve prevented Rogers from constructing its antenna system for four years without an alternative solution achievable within a short time being offered to Rogers. As a result of the notice and in light of Châteauguay’s offer, Rogers had no other choice but to wait until the end of the expropriation proceedings relating to 50 Industriel, or wait for the expiry of a period of about seven months. Since this situation prevented Rogers from fulfilling its obligations under its spectrum license, the notice of reserve “compromised the orderly development and efficient operation of radiocommunication and impaired the core of the federal power over radiocommunication in Canada.”8 For these reasons, the Court concluded that the notice of reserve published by Châteauguay constituted a serious and significant intrusion to the core of the federal power over radiocommunication and was therefore inapplicable to Rogers.

(d)  Dissenting opinion

Justice Gason agreed with his colleagues on the outcome of the appeal, but not with their reasons. According to Gascon J., the notice of reserve was intra vires, since the circumstances surrounding its adoption revealed an intended purpose of protecting the health and safety of citizens and not an express opposition to the construction of the tower. Despite its practical effect of preventing the construction of radiocommunication antennas, Gagnon J. concluded that the legal effect of the notice of reserve was the exercise by the City of its jurisdiction with respect to the development of its territory via its expropriation powers. Moreover, he observed that the measure in issue also pursued the main goal of harmoniously developing municipal territory. Therefore, he was of the view that Châteauguay’s notice of reserve fell within the municipality’s jurisdiction under the Constitution Act, 1867.

According to Gascon J., this flexible approach of the pith and substance doctrine promotes subsidiarity and co-operative federalism. That said, this approach is insufficient to side with Châteauguay’s position since under the doctrine of interjurisdictional immunity, the notice of reserve intrudes significantly upon the core of federal jurisdiction over radiocommunication by preventing the use of the site determined by the Minister under the Radiocommunication Act and the circular. Therefore, Gascon J. sided with the majority of the Court as to the outcome of the appeal.

Conclusion

Based on partially different grounds, the majority and the dissent of the Supreme Court of Canada set aside the Court of Appeal’s judgment, therefore annulling the notice of reserve and allowing Rogers to install its radiocommunication antennas at 411 Saint-Francis. In so doing, the Court explicitly confirmed that the ultimate choice of the location of radiocommunication infrastructure is at the core of the federal power over radiocommunication. While the municipalities may raise their concerns and preferences during the course of the consultation process, they cannot block this process, as this would threaten the orderly and efficient development of radiocommunication in Canada. Therefore, once the consultation process requirements have been fulfilled and the Minister’s approval has been obtained, the municipalities’ concerns, whether relating to aesthetic, sanitary, safety or other concerns, cannot prevent a communication company from choosing the location for the installation of its radiocommunication tower.

by Stéphanie Hamelin

1 See for example: Situation in St-Austin, see http://www.lapresse.ca/la-tribune/actualites/estrie-et-regions/201512/21/01-4933369-tours-de-telecommunication-austin-se-dresse-contre-videotron.php, published on December 21, 2015; Situation in Chambly, see http://www.journaldechambly.com/actualites/2016/5/9/l_installation-dune-antenne-de-telecommunication-seme-la-grogne.html, published on May 9, 2016.

2 Rogers Communications Inc. v. Châteauguay (City), 2016 SCC 23.

3 See Safety Code 6: Health Canada's Radiofrequency Exposure Guidelines, online: http://www.hc-sc.gc.ca/ewh-semt/pubs/radiation/radio_guide-lignes_direct/index-eng.php.

4 Argument based on 114957 Canada Ltée (Spraytech, Société d'arrosage) v. Hudson (Town), 2001 SCC 40.

5 [1932] A.C. 304.

6 [1905] A.C. 52.

7 And other sources, see: Telus Communications Co. v. Toronto (City) (2007), 84 O.R. (3d) 656 (C.S.J.), at para 30; “Telecommunications and the Constitution: Re-Setting the Bounds of Federal Authority” (2010), 89 R. Can. 695, at p 726.

8 Rogers Communications Inc. v. Châteauguay (City), supra, note 2, at para 71.

a cautionary note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2016