Supreme Court Judgments

Supreme Court of Canada

Public Service Board et al. v. Dionne et al., [1978] 2 S.C.R. 191

Date: 1977-11-30

The Public Service Board, the Minister of Communications and the Attorney General for the Province of Quebec and Raymond d’Auteuil Appellants;

and

François Dionne et al.

and

The Attorney General for Canada Respondents;

and

The Attorney General for Ontario, the Attorney General for British Columbia, the Attorney General for Saskatchewan and the Attorney General for Alberta Intervenors.

1977: June 8; 1977: November 30.

Present: Laskin C.J. and Martland, Judson, Ritchie, Spence, Pigeon, Dickson, Beetz and de Grandpré JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR QUEBEC

Constitutional law—Cable distribution undertakings—Orders of the Quebec Public Service Board regarding the operation of cable distribution undertakings—British North America Act, ss. 91, 92(10)—Broadcasting Act, R.S.C. 1970, c. B-11—Radio Act, R.S.C. 1970, c. R-1, s. 2—Public Service Board Act, R.S.Q. 1964, c. 229, s. 23—Communications Department Act, L.Q. 1969, c. 65, s. 3(a)—Regulation respecting cable distribution public services, O.C. (Que.) 3565-73, (1973), 105 0.G. II 5480.

Appellant d’Auteuil and respondent Dionne were authorized by the Quebec Public Service Board to establish and operate cable distribution undertakings, each in a specific area. The purpose of these undertakings is to transmit sounds and pictures to specific receivers, using cables or other means. These sounds and pictures may come from one of the following two sources. They may be picked up from the air where they are present in a free state after being emitted by broadcasting stations located either outside or inside the province of Quebec. They may also be created by the undertaking itself. The Court of Appeal of Quebec unanimously set aside the decisions of the Board and declared ultra vires, in so far as they apply to the cable distribution undertakings of

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Dionne and d’Auteuil, the Communications Department Act, the Public Service Board Act and the Cabledistribution Regulation. Appellant is asking this Court to reverse that decision.

Held (Pigeon, Beetz and de Grandpré JJ. dissenting): The appeal should be dismissed.

Per Laskin C.J. and Martland, Judson, Ritchie, Spence and Dickson JJ.: This Court concluded in Capital Cities, judgment in which (supra) was delivered at the same time as judgment in the case at bar, that exclusive legislative authority in relation to the regulation of cablevision stations and their programming, at least where such programming involved the interception of television signals and their retransmission to cablevision subscribers, rested in the Parliament of Canada. Appellant claims that what is involved is a local work or undertaking within provincial competence under s. 92(10) of the B.N.A. Act, since there are two enterprises, having no necessary connection with each other, involving different controlling entities and engaged in television operations and cablevision operations respectively, and since the latter enterprise is locally situate and limited in its subscriber relations to persons in Quebec. The Court cannot accept these arguments. The fundamental question is not whether the service involved in cable distribution is limited to intraprovincial subscribers or that it is operated by a local concern but rather what the service consists of. Where television broadcasting and receiving is concerned there cannot be a separation for constitutional purposes between the carrier system, the physical apparatus, and the signals that are received and carried over the system. Divided constitutional control of what is functionally an interrelated system of transmitting and receiving television signals, whether directly through air waves or through intermediate cable line operations, not only invites confusion but is alien to the principle of exclusiveness of legislative authority. Even though the cable distribution enterprises may make changes or deletions in transmitting the off-air programs to their subscribers, they use television signals received at their antennae, from both within and without the Province. The suggested analogy with a local telephone system cannot be accepted because of the technology employed by the cable distribution enterprises, which rely on broadcasting stations and are merely a link in a chain that extends to subscribers who receive the programs through their private receiving sets.

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Per Pigeon, Beetz and de Grandpré JJ.: The question in this case is whether the unchallengeable federal jurisdiction over radio-communication involves exclusive legislative authority over all cabledistribution systems making use of signals received by radio‑communication or whether such exclusive authority extends only to the radiocommunication aspect. For example, the fact that under head 10 of s. 91 of the B.N.A. Act navigation and shipping come within exclusive federal authority does not mean that all navigation undertakings come under federal jurisdiction. On the contrary, under head 10 of s. 92 of the B.N.A. Act the rule is that these undertakings come under provincial jurisdiction unless they connect the province with another province or extend to the limits of the province. It is only the navigation aspect of these undertakings, therefore, that is subject to federal jurisdiction. Under the same head and subject to the same exceptions, telegraph lines come under provincial jurisdiction. At the time of Confederation, telegraph lines were the only known kind of lines used for communication at a distance by means of electrical impulses carried over wires. However, in Toronto v. Bell Telephone Co., [1905] A.C. 52, the Privy Council came to the conclusion that telephone lines should be considered as telegraph lines and that they came under provincial jurisdiction.

There is no reason to make a distinction between the coaxial cables used by cabledistribution companies and telephone and telegraph lines. As the Privy Council made clear in the Radio Case, [1932] A.C. 304, the basis of federal jurisdiction over broadcasting is the use of hertzian waves, which cannot be confined within a province. The fact that a telephone or cabledistribution company uses microwave links or that it has to comply with the Radio Act concerning the technical aspects of its microwave links does not mean that the whole undertaking comes under federal jurisdiction. Even though a cabledistribution company has to use antennae to receive the broadcasts that it wishes to transmit to its subscribers, it must be considered that a cabledistribution network has to be carried either in underground conduits, or, as in this case, over utility poles. From a physical point of view, therefore, with respect to the material set-up which is the essential feature of a cable system, it is the provincial aspect that is by far predominant. The distinctive feature of a cable system, as opposed to radio broadcasting, is that its channels of communication are carried over metal cables strung on poles throughout the area served instead of being carried over what is commonly called “airwaves”.

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The fact that the aerial, which is an essential part of the network, comes under federal jurisdiction does not mean that the federal can claim jurisdiction over all undertakings that make use of radiocommunication. Moreover, even assuming that by virtue of its licensing authority over broadcasting receiving undertakings, the Canadian Radio-Television Commission could deny a licence to the operator of a cabledistribution system licensed by the province although his receiving antenna complied with all technical requirements prescribed under the Radio Act, the possibility of such a conflict would not justify the assumption by the Commission of the full authority over the undertaking that it claims to exercise. This could cause serious difficulties for the undertaking, but the conflict would be political rather than legal and would not invalidate the provincial legislation regulating the undertaking concerned.

[In re Regulation and Control of Radio Communication, [1931] S.C.R. 541, aff’d. [1932] A.C. 304; Capital Cities Communications Inc. v. Canadian Radio-Television Commission, [1978] 2 S.C.R. 141, aff’g. [1975] F.C. 18; Re Public Utilities Commission and Victoria Cablevision Ltd. (1965), 51 D.L.R. (2d) 716, applied; Attorney General of Ontario v. Winner, [1954] A.C. 541; Re Tank Truck Transport Ltd., [1960] O.R. 497, aff’d. [1963] 1 O.R. 272.]

APPEAL from three decisions of the Court of Appeal of the province of Quebec[1] setting aside three decisions of the Quebec Public Service Board. Appeal dismissed, Pigeon, Beetz and de Grandpré JJ. dissenting.

Raynold Langlois, André Tremblay and Paul-Arthur Gendreau, for the appellants.

André P. Casgrain, Q.C., for the respondent Dionne.

Pierre Lamontagne, Q.C., Alice Desjardins, Q.C., and Louise Martin-Côté, for the respondent Attorney General for Canada.

J.D. Hilton, Q.C., for the Attorney General for Ontario.

Melvin H. Smith, for the Attorney General for British Columbia.

G. Peacock, for the Attorney General for Saskatchewan.

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William Henkel, Q.C., for the Attorney General for Alberta.

The judgment of Laskin C.J. and Martland, Judson, Ritchie, Spence and Dickson JJ. was delivered by

THE CHIEF JUSTICE—This appeal raises a constitutional question which, by an order of March 16, 1977 was formulated as follows:

Are section 23 of the Public Service Board Act (R.S.Q. 1964, c. 229) and the ordinances rendered pursuant thereto unconstitutional, ultra vires or inoperative to the extent that they apply to a cabledistribution public service as defined in the Regulation respecting cabledistribution public services (O.C. 3565-73 of the 25th of September, 1973) adopted pursuant to section 3a of the Communications Department Act (L.Q. 1969, c. 65).

The Quebec Court of Appeal in dealing with the issues raised by this question concluded unanimously, in reasons delivered by Tremblay C.J.Q., that it was beyond the competence of the Province of Quebec to regulate the operation of cable distribution systems through which television signals were captured and transmitted to subscribers. In the result, the Quebec Court of Appeal set aside three decisions of the Quebec Public Service Board which had authorized François Dionne, a respondent in this Court, and Raymond d’Auteuil, one of the appellants herein, to operate cable distribution enterprises in certain defined areas in the Province and which had settled certain questions touching the carrying out of the authorizations. Dionne alone challenged the validity of the decisions of the Board, a challenge which required a consideration of the statutory authority exercised by the Board, and leave, as required by Quebec law, was obtained to bring the challenge before the Quebec Court of Appeal.

In its judgment setting aside the decisions of the Quebec Public Service Board and assigning exclusive competence over the operation of cablevision to the Parliament of Canada, the learned Chief Justice referred to and relied on the judgment of the Federal Court of Appeal in In re Capital Cities Communications Inc., Taft Broadcasting

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Company and W.B.E.N. Inc.[2], as well as on the judgment of the Privy Council in In re Regulation and Control of Radio Communication[3], and the judgment of the British Columbia Court of Appeal in Re Public Utilities Commission and Victoria Cablevision Ltd.[4] The Capital Cities case came before this Court in late January of this year, after the Quebec Court of Appeal had rendered judgment in the present case—the judgment of the Quebec Court of Appeal was also brought to the notice of this Court—and this Court had an opportunity in that appeal to consider issues similar to those raised here. Indeed, the Attorney General of Quebec, the main appellant herein, was an intervenant before this Court in the Capital Cities case, and his factum and the oral argument presented by counsel on his behalf canvassed fully the same issues that are raised in the present case. This Court concluded, on the facts established in the Capital Cities case, that exclusive legislative authority in relation to the regulation of cablevision stations and their programming, at least where such programming involved the interception of television signals and their retransmission to Cablevision subscribers, rested in the Parliament of Canada.

Since the matter was argued anew in the present case, and since other Provinces intervened in support of the Quebec Attorney-General’s challenge to exclusive federal competence (they having also intervened in the Capital Cities case), I think it desirable that something more be said here, notwithstanding the extensive canvass that was made in the Capital Cities case. The two central strands of what I may call the provincial submissions were that (1) two enterprises, having no necessary connection with each other, were involved in television operations and in cablevision operations and (2) the fact that different controlling entities were involved in those operations emphasized the separateness of the enterprises, and since the cable distribution operation was locally situate and limited in its subscriber relations to persons in Quebec

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it was essentially a local work or undertaking within provincial competence under s. 92(10) of the British North America Act.

The fundamental question is not whether the service involved in cable distribution is limited to intraprovincial subscribers or that it is operated by a local concern but rather what the service consists of. This is the very question that was faced by the Privy Council in the Radio case, supra, (in a different context, it is true) and which was also before that body in Attorney General of Ontario v. Winner[5]. There is another element that must be noticed, and that is that where television broadcasting and receiving is concerned there can no more be a separation for constitutional purposes between the carrier system, the physical apparatus, and the signals that are received and carried over the system than there can be between railway tracks and the transportation service provided over them or between the roads and transport vehicles and the transportation service that they provide. In all these cases, the inquiry must be as to the service that is provided and not simply as to the means through which it is carried on. Divided constitutional control of what is functionally and interrelated system of transmitting and receiving television signals, whether directly through air waves or through intermediate cable line operations, not only invites confusion but is alien to the principle of exclusiveness of legislative authority, a principle which is as much fed by a sense of the constitution as a working and workable instrument as by a literal reading of its words. In the present case, both the relevant words and the view of the constitution as a pragmatic instrument come together to support the decision of the Quebec Court of Appeal.

I should emphasize that this is not a case where the cable distribution enterprises limit their operations to programmes locally produced by them for transmission over their lines to their local subscribers. Admittedly, they make use of television signals received at their antennae, both from within and without the Province; and the fact that they may make changes or deletions in transmitting the off-air programmes to their subscribers does not

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affect their liability to federal regulatory control. The suggested analogy with a local telephone system fails on the facts because the very technology employed by the cable distribution enterprises in the present case establishes clearly their reliance on television signals and on their ability to receive and transmit such signals to their subscribers. In short, they rely on broadcasting stations, and their operations are merely a link in a chain which extends to subscribers who receive the programmes through their private receiving sets. I do not think that any argument based on relative percentages of original programming and of programmes received from broadcasting stations can be of any more avail here than it was in Re Tank Truck Transport Ltd.[6]

For these reasons, as well as for those in the Capital Cities case, in which judgment is being given concurrently with the judgment herein, I would dismiss the appeal with costs. There will be no costs to the Attorney General of Canada nor to or against any of the intervenors.

The judgment of Pigeon, Beetz and de Grandpré JJ. was delivered by

PIGEON J. (dissenting)—This is an appeal from three judgments of the Court of Appeal of the Province of Quebec setting aside three decisions of the Public Service Board and declaring ultra vires in so far as they apply to the cabledistribution systems of François Dionne and Raymond d’Auteuil, the Communications Department Act, the Public Service Board Act, and the Cabledistribution Regulation. The decisions of the Public Service Board have authorized François Dionne and Raymond d’Auteuil respectively to establish and operate a cabledistribution system in two specific areas, the first described as Matane and Matapedia Valley, the other as Mont-Joli and Rimouski. The Attorney General for Canada and the Attorney General for Quebec were parties to the case in the Court of Appeal, the former supporting the attack against provincial jurisdiction, the latter opposing it. On the appeal to this Court

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notice of the constitutional question was given to all the attorneys-general and the attorneys‑general for Ontario, British Columbia, Saskatchewan, and Alberta, intervened in support of the appeal.

The facts are not in dispute, the parties having filed a declaration admitting for the purposes of the case that the facts are as stated in the orders of the Public Service Board. Those facts were summarized as follows in the unanimous opinion of the Court of Appeal written by Chief Justice Tremblay:

[TRANSLATION] It is important… to describe the undertaking that appellant Dionne and respondent d’Auteuil were respectively authorized to set up and operate. The two undertakings are alike, differing only in the area they serve. I will describe them in layman’s terms as I have understood them from studying the record. The purpose of these undertakings is to transmit sounds and pictures to specific receivers, using cables or other means. These sounds and pictures may come from one of the following two sources. They may be picked up from the air where they are present in a free state after being emitted by broadcasting stations located either outside or inside the province of Quebec. They may also be created by the undertaking itself when they represent either a program produced by the undertaking in Quebec or another event occurring in Quebec.

A large part of the argument of the appellants in this Court was devoted to the submission that a cabledistribution such as those with which we are concerned in this case, was not to be considered as a single undertaking but as two separate undertakings. It was said that the antenna receiving signals transmitted by hertzian waves by TV stations was not a component part of the cabledistribution system but a separate undertaking, that it was the only part that was involved in radiocommunication which is defined in the Radio Act (R.S.C. 1970, c. R-1, s. 2) as meaning:

…any transmission, emission or reception of signs, signals, writing, images, sounds or intelligence of any nature by means of electromagnetic waves of frequencies lower than 3,000 Gigacycles per second propagated in space without artificial guide;

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On this view of the situation it was contended that only the antenna was a “broadcasting receiving undertaking” within the meaning of the Radio Act seeing that broadcasting is defined as:

…any radiocommunication in which the transmissions are intended for direct reception by the general public;

Although I agree that the distinction between radiocommunication and transmission by electrical impulses over cables is important, I cannot find any analogy between the instant case and those of railway hotels which were the subject of the well-known judgments in C.P.R. v. Attorney General for British Columbia[7], Canada Labour Relations Board v. Canadian National Railway Company[8].

In my view, the question in this case is whether the unchallengeable federal jurisdiction over radio-communication involves exclusive legislative authority over all cabledistribution systems making use of signals received by radiocommunication or whether such exclusive authority extends only to what I will call the radiocommunication aspect.

It is important at the outset to observe that federal jurisdiction over some activities or operations does not necessarily mean that any undertaking involved in such activities or operations automatically comes under federal jurisdiction. For instance, under head 10 of s. 91 of the B.N.A. Act “Navigation and Shipping” are enumerated among the classes of subjects coming within exclusive federal authority. It would, however, be wrong to conclude that this means that all navigation undertakings come under federal jurisdiction, because head 13 includes only “Ferries between a Province and any British or Foreign Country or between Two Provinces”. A ferry operating within the limits of a single province is obviously a navigation operation. However, it is perfectly clear that, from a constitutional point of view, it is a “local”, not a federal undertaking. This does not mean that it is not subject to federal jurisdiction but that it is subject to such jurisdiction only in

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respect of the navigation aspect. How far this may extend need not be considered, it is enough to say that it does not mean that the whole undertaking is subject to federal control. On the contrary, such an undertaking is subject to provincial control save in respect of what may properly be called the navigation aspect. It is equally clear that the same is true of all shipping because in head 10 of s. 92 one finds that the following come under provincial legislative authority:

10. Local Works and Undertakings other than such as are of the following Classes:

(a) Lines of Steam or other Ships, Railways, Canals, Telegraphs, and other Works and Undertakings connecting the Province with any other or others of the Provinces, or extending beyond the Limits of the Province;

(b) Lines of Steam Ships between the Province and any British or Foreign Country;…

It must be stressed that by virtue of the above noted provisions, provincial jurisdiction over all undertakings is the rule, federal jurisdiction being the exception. With reference to undertakings of the kind with which we are presently concerned, it is to be noted that telegraph lines are specially included among the undertakings under provincial jurisdiction because exception is made only of those which connect the province with another or extend beyond its limits. At the time of Confederation, telegraph lines were the only known kind of lines used for communication at a distance by means of electrical impulses carried over wires. However, in Toronto v. Bell Telephone Co.[9], the Privy Council had no difficulty in coming to the conclusion that telephone lines should be considered as telegraph lines for constitutional purposes. Lord MacNaghten said at p. 57:

It can hardly be disputed that a telephone company the objects of which as defined by its Act of incorporation contemplate extension beyond the limits of one province is just as much within the express exception as a telegraph company with like powers of extension.

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It seems to me that the same should be said of coaxial cable lines as of telephone lines. Coaxial cables are nothing but a further development in the technology of using wires for the transmission of signals by means of electrical impulses. Morse telegraphy, as known in 1867, made use of long and short discrete impulses of direct current actuating a magnet at the receiving end. The telephone invented a few years later made use of an electrical current amplitude modulated at audio frequency by the human voice acting on a microphone at an end of the line. Instead of these low frequencies under 10 kilohertz, coaxial networks make use of very high frequencies in the range of 100 megahertz with a tremendous increase in the quantity of information that may be carried over a single cable, this is what makes it possible to transmit television images which, on the american standards require a bandwidth of some 6 megahertz.

In support of federal jurisdiction over coaxial cable networks it is contended that the change of technology in transmission should make no difference. The fallacy of this argument is that it is inconsistent with the very basis of federal jurisdiction which is the use of hertzian waves. Let us not forget that the basic constitutional rule is provincial jurisdiction over local undertakings. Telegraph systems are specifically included in local undertakings. It is clear that these include all communication systems by electrical signals trasmitted over wires as appears from the Bell Telephone Co. case. In the Radio[10] case, the judgments of the majority in this Court which were affirmed by the Privy Council, make it abundantly clear that the very basis of federal jurisdiction was that hertzian waves, by their very nature, could not be confined within a province. Anglin C.J.C. said at p. 546:

In dealing with this reference, however, I desire it to be clearly undertsood that I do so solely in the light of the present knowledge of Hertzian waves and radio and upon the facts disclosed in the record. I fully accept the

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following paragraph from the judgment of my brother Newcombe:

I interpret the reference as meant to submit the questions for consideration in the light of the existing situation and the knowledge and use of the art, as practically understood and worked, and, having regard to what is stated in the case, assumed as the basis for the hearing. Therefore I proceed upon the assumption that radio communication in Canada is practically Dominion-wide; that the broadcasting of a message in a province, or in a territory of Canada, has its effect in making the message receivable as such, and is also effective by way of interference, not only within the local political area within which the transmission originates, but beyond, for distances exceeding the limits of a province, and that, consequently, if there is to be harmony or reasonable measure of utility or success in the service, it is desirable, if not essential, that the operations should be subject to prudent regulation and control.

Smith J. said at p. 574:

When a transmitter sends out into space these electromagnetic waves, they are projected in all directions for the great distances referred to, and it is not possible for the transmitter to confine them within the bounds of a province.

With respect to what was said by the Privy Council, it is important to bear in mind that the case was a reference dealing solely with “radio communications” that is transmissions by means of hertzian waves. The language used should be construed in the light of the question which was under consideration and should not be treated as applicable to an entirely different question.

I think it is of the utmost importance in this matter, to consider the tremendous extent to which communications transmitted by hertzian waves at one point or another are used by undertakings under provincial jurisdiction or conveyed by such undertakings. With the exception of the Bell Telephone Co. system which was established as an interprovincial undertaking and declared by Parliament to be a work for the general advantage of Canada, telephone companies generally come under provincial jurisdiction. It is a well known fact, of which we are entitled to take judicial notice, that they carry on their wires or cables not only telephone conversations but communications

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of all kinds, including radio network programs. No one has ever contended that, on that account, they have become undertakings subject to federal jurisdiction.

It appears from the record of the instant case that the provincial telephone company which provides the cables used for both Dionne’s and d’Auteuil’s systems, does use for the transmission of communications several microwave links. It would not be reasonable for the federal authorities to claim jurisdiction over the whole undertaking because it is making use of radiocommunications. Of course, this telephone company has to comply with the Radio Act concerning the technical aspects of its microwave links, but it would, in my view, be an usurpation of power on the part of the federal authorities to claim to exercise control over the whole undertaking because of this use of radiocommunications.

It is equally obvious to me that the federal authorities could not by virtue of their jurisdiction over radiocommunications claim to exercise general control over all users of such communications like truckers, taxicabs, police forces, power companies, etc. In fact the use of radiocommunications, both sending and receiving, has become so much a feature of daily life that it has been made generally available to the public on what is known as citizens band recently expanded to 40 channels. All those communications are undoubtedly subject to the federal licensing power and there is no specific limit to the possible extent of the conditions that may be appended to the licences. However, it seems clear to me that it would be an abuse of this licensing power to require that every undertaking obtaining a licence should become subject to federal jurisdiction. In so doing, the federal would exceed the limits of its authority over radio-communications just as it would overstep the limits of its jurisdiction over navigation by requiring that all navigation undertakings, including ferries within a province and intraprovincial carriers, become subject to federal control over their whole operations rather than in respect of navigation only. That this is so, clearly appears from the

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unanimous opinion of the Court written by Duff J., as he then was, in the Reference re: Waters and Water-Powers[11]. In that case it was held that jurisdiction over navigation does not enable the federal authority to claim the benefit of water powers in navigable rivers. Duff J. said at p. 216:

There is nothing more clearly settled than the proposition that in construing section 91, its provisions must be read in light of the enactments of section 92, and of the other sections of the Act, and that where necessary, the prima facie scope of the language may be modified to give effect to the Act as a whole.

It was recognized at an early stage in the judicial elucidation of the Act that any other principle of construction might have the effect of frustrating the intention of its authors who could not have intended that the powers assigned exclusively to the provincial legislatures should be absorbed in those given to the Dominion Parliament.

As presently operated, the two cabledistribution systems with which we are concerned distribute nothing but TV programs broadcast by some four or five distant TV stations. These broadcasts are received over their aerials which are set up at a substantial distance from the area where the major part of their subscribers are residing. The distribution of locally produced programs was initially contemplated and could be accomplished without any change in the distribution network but it remains as a future possibility only. In those circumstances it is contended that the cable networks are nothing but an adjunct of TV broadcasting, that they are nothing but a means of bringing to the subscribers programs that the hertzian waves do not carry to them but that special antennae erected in favourable locations are able to receive and transmit to them in the form of electrical impulses carried over coaxial cable.

As against this, however, it must be considered that a cabledistribution network has to be carried either in underground conduits, as is done only in some densely built urban areas, or, as in this case,

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carried over utility poles. Those utilities are, as a rule, under provincial jurisdiction as in these cases. In fact the cable networks are, in the main, the property of a provincial telephone company and the cable operators are only lessees. With respect to some parts they are not even exclusive lessees, the telephone company leasing only a certain number of channels or retaining the right to make use of a capacity not needed by the lessee. In the order of September 13, 1974 one reads:

[TRANSLATION] The necessity of providing for joint use by Quebec Telephone of the coaxial cables that may be installed for the purposes of the proposed cable distribution undertakings is not called into question by the testimony in support of the applications.

It will thus be seen that from a physical point of view, with respect to the material set-up which is the essential feature of a cable system, the provincial aspect is by far predominant. The distinctive feature of a cable system, as opposed to radio broadcasting, is that its channels of communication are carried over metal cables strung on poles throughout the area served instead of being carried over what is commonly called “airwaves”. The importance of the provincial aspect is therefore undeniable. However, when an aerial is the sole source of signals to be distributed over the cable network, it cannot be denied that this part is also essential. Nevertheless, in view of the considerations previously developed, I cannot agree that “common sense” dictates that on that account the whole undertaking should be under federal jurisdiction. I have already shown by several illustrations how exorbitant it would be for the federal to claim jurisdiction over all undertakings which make use of radiocommunication and for many of which such use is essential under present conditions.

I cannot agree that the federal authority over radio broadcasting must extend to all undertakings receiving radio broadcasts. In the Radio case it was held that federal authority must extend to radio receivers but this does not mean or imply that it must extend to all undertakings operating

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receivers. Hotels often have aerials and cabledistribution networks feeding more receiving sets than many cabledistribution undertakings, could this put them under federal control? It is true that for them it is accessory to their principal business. But cabledistribution is a developing technology which may, in time, not only complement but even supplant radio broadcasting as a means of bringing television and some other programs to the public. Those undertakings are essentially localized and as is properly stressed in the Public Service Board decisions, they should be specially controlled for the purpose of serving the local needs of the particular area for which they are licensed and must, on account of practical consideration enjoy an exclusive franchise. In its order of September 13, 1974 the Board said:

[TRANSLATION] Taken as a whole, the Regulation indicates that a primary objective to be attained is to give a voice to local communities; the organization and the laying out of the areas to be served must take this social and cultural objective into consideration. The Board should therefore promote the formation of public cable distribution companies whose owners, managers and organization are as closely related as possible to the communities they will be serving, so that on the one hand local vitality will be naturally led to express itself and on the other hand the company will always be sensitive to the social and cultural needs of the community and to the means of making cable distribution work to satisfy these needs.

The Board chose to ignore the problem arising out of federal jurisdiction over the broadcast receiving antenna. It is however an issue that must be faced. I cannot agree that it should be solved by saying that the federal should have full control over the undertaking so as to avoid the difficulties of divided jurisdiction. Divided jurisdiction is inherent in any federal system. Whatever may be the extent of the jurisdiction held to be included in the matters allocated to the federal, provincial powers will impinge at some point. Although an extensive view was adopted of the extent of federal power over interprovincial railways, these are far from being freed from any application of provin-

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cial legislation. As Lord Watson said in C.P.R. v. Notre Dame de Bonsecours[12] (at p. 372):

The British North America Act, whilst it gives the legislative control of the appellants’ railway qua railway to the Parliament of the Dominion, does not declare that the railway shall cease to be part of the provinces in which it is situated, or that it shall, in other respects, be exempted from the jurisdiction of the provincial legislatures.

I have already pointed out that a great many undertakings and services under provincial authority require radiocommunication licences for a variety of purposes. There is no doubt that this implies complete federal control over technical aspects. In my view, it is equally clear that it does not involve control over economic aspects. This, I think, may be deduced from what was decided in the Carnation Company Ltd.[13] case. Essentially, the decision was that extra-provincial economic repercussions would not remove a local matter from provincial authority. The issue was the validity of an order fixing the price of milk to be paid to producers by the owner of an evaporated milk plant. After processing, the major portion of the product was used “for export out of Quebec”. It was held that the fact that the orders might thus have “some impact” upon interprovincial trade did not invalidate them.

Policy statements of the Canadian Radio-Television Commission which were brought before us on appeal from the Federal Court of Appeal judgment in Capital Cities Commission Inc., and others[14], show that the Commission was very much concerned with the economic repercussions of cabledistribution on broadcasting station owners. It is, of course, obvious that where cabledistribution brings a variety of programs into an area where there is only one or two broadcasting stations whose signals are readily available otherwise, there will be more competition for the

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available audience. However, a similar effect would result from programs distributed by cable and obtained otherwise than by receiving broadcast signals. In my view, the principle adopted in the construction of the Canadian constitution is, as exemplified by the Carnation Milk case, to reject economic repercussions as a basis for the allocation of legislative jurisdiction apart from emergency conditions such as in the Anti-Inflation Act Reference[15].

In any event, even assuming that by virtue of its licensing authority over broadcasting receiving undertakings, the Canadian Radio-Television Commission could deny a licence to the operator of a cabledistribution system licensed by the Public Service Board although his receiving antenna complied with all technical requirements prescribed under the Radio Act, I cannot agree that this possible conflict would justify the assumption by the Commission of full authority over the undertaking as it claims to exercise. Constitutionally, the situation would be no different from that which would obtain if the federal Parliament refused to provide salaries for as many judges on a particular superior, county or district court, as the constitution of that court called for under the law of the province. That court would have to do without as many judges as the province considered necessary. There would be a political conflict not a legal conflict. In the particular field of radio and communication a similar conflict may arise whenever a federal licence is denied for the use of radiocommunication equipment which some provincial authority or provincially controlled undertaking considers necessary. At one time, the Canadian Radio-Television Commission was instructed by Order in Council to deny broadcast licences to all provincial authorities. It resulted in sterilizing provincial legislation contemplating such operations. No one suggested it meant that such provincial legislation was ultra vires. Similarly it appears to me that while there might be serious difficulties in the way of a cabledistribution operator licensed by the Board and denied a broadcasting receiving undertaking licence by the

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Commission, this would no more invalidate the provincial legislation regulating the cable system than the possible denial of a radiocommunication licence to any of the innumerable provincial undertakings requiring it.

I would therefore allow the appeal and set aside the three judgments of the Court of Appeal and restore the orders of the Public Service Board. This is not a case for costs.

Appeal dismissed with costs, PIGEON, BEETZ and DE GRANDPRÉ dissenting.

Solicitors for the appellants, the Public Service Board, the Minister of Communications and the Attorney General for the Province of Quebec: Langlois, Drouin, Roy, Fréchette & Gaudreau, Quebec.

Solicitors for the appellant d’Auteuil: Gendreau, Pelletier & Gendreau, Rimouski, Quebec.

Solicitors for the respondent Dionne: Casgrain, Crevier & Blanchet, Rimouski, Quebec.

Solicitors for the respondent the Attorney General of Canada: Courtois, Clarkson, Parsons & Tétrault, Montreal.