BETWEEN:
and
CANADIAN INTERNATIONAL TRADE TRIBUNAL,
CANADIAN NORTH INC., CANADA POST CORPORATION
and BRADLEY AIR SERVICES LIMITED (c.o.b. as FIRST AIR)
Heard at Ottawa, Ontario, on December 1, 2006.
Order delivered at Ottawa, Ontario, on December 4, 2006.
REASONS FOR ORDER BY: EVANS J.A.
Docket: A-520-06
Citation: 2006 FCA 395
Present: EVANS J.A.
BETWEEN:
ATTORNEY GENERAL OF CANADA
Applicant
and
CANADIAN INTERNATIONAL TRADE TRIBUNAL,
CANADIAN NORTH INC., CANADA POST CORPORATION
and BRADLEY AIR SERVICES LIMITED (c.o.b. as FIRST AIR)
Respondents
REASONS FOR ORDER
A. INTRODUCTION
[1] This is a motion by the Attorney General of Canada to stay a proceeding before the Canadian International Trade Tribunal (“CITT”), pending the hearing and disposition of an application for judicial review by the Attorney General for an order of prohibition restraining the CITT from continuing with its inquiry into a procurement complaint.
[2] The application was filed on November 23, 2006, and arises from the CITT’s rejection of a motion for the dismissal of a complaint made by Canadian North Inc. that the award of a contract to Bradley Air Services Limited (“First Air”) was in breach of the Agreement on Internal Trade (“AIT”).
[3] The Attorney General alleges in the application that the contract to deliver mail to remote northern communities was awarded to First Air by Canada Post Corporation (“CPC”), which is not a “government institution” to which the AIT applies. Accordingly, the complaint against the Department of Indian and Northern Development (“DIAND”), which the CITT started to inquire into on September 28, 2006, is outside its jurisdiction.
[4] DIAND provides funding to CPC to cover the difference between the postage paid by the shippers of food mail and CPC’s direct costs of providing air delivery services to northern communities without other access. “Food mail” is a small part of the overall contract for the delivery of mail that was the subject of the Request for Proposal (“RFP”) issued by CPC. The fact that DIAND funds part of the cost of the delivery of food mail does not, the Attorney General says, creates an agency relationship that makes DIAND responsible for ensuring that CPC conducts its procurement of air services in accordance with the AIT.
[5] DIAND must file a Government Institution Report (“GIR”) with the CITT by December 5, 2006. The CITT is under a duty to complete its inquiry into the complaint, and to report its findings and recommendations, no later than February 2, 2007. Counsel for the Attorney General says that DIAND cannot effectively respond to the substance of the complaint, which alleges a breach of the AIT in the evaluation of the bids, because the procurement was conducted entirely by CPC. CPC is no longer a party to the complaint and, although offered intervener status by the CITT, has declined to co-operate in the response to Canadian North’s complaint. In particular, it has refused to disclose commercial documents relating to the procurement process and to the award of the contract, neither of which, it says, is the business of DIAND or the CITT. CPC argues that the CITT cannot review indirectly what it has no jurisdiction to review directly.
[6] All parties were agreeable to expediting the hearing of the Attorney General’s application for judicial review on the jurisdictional issue. The Court can schedule a hearing of the application in Toronto on a day in the last week in February. However, by this time, the CITT must have reported its findings and recommendations.
B. ISSUES AND ANALYSIS
Issue 1: Does the Court have jurisdiction to issue a stay?
[7] Canadian North argued that this Court has no jurisdiction to issue a stay in this matter because the CITT is under a statutory duty to deal with a procurement complaint within 135 days after it is filed. To stay the CITT’s inquiry beyond that date (in this case, February 2, 2007) would be inconsistent with the limitation period prescribed by paragraph 12(c) of the Canadian International Trade Tribunal Procurement Inquiry Regulations, SOR/93-602 (“Regulations”).
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12. The Tribunal shall issue its findings and recommendations in respect of a complaint to the complainant, the relevant government institution and any other party that the Tribunal considers to be an interested party … (c) where, under any rules made pursuant to subsection 39(1) of the Act, the Tribunal authorizes an extension of time, within 135 days after the filing of the complaint. |
12. Le Tribunal communique ses conclusions et ses recommandations à l’égard d’une plainte au plaignant, à l’institution fédérale concernée et à toute autre partie qu’il juge intéressée : […] c) dans le cas où il autorise une procédure prolongée selon les règles établies en vertu du paragraphe 39(1) de la Loi, dans les 135 jours suivant le dépôt de la plainte.
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[8] I do not agree. Paragraph 50(1)(b) of the Federal Courts Act, R.S.C. 1985, c. F-7, confers a broad power on each of the Federal Courts to stay proceedings “in any cause or matter” where it is in the interests of justice that proceedings be stayed. Section 18.2 and subsection 28(2) empower this Court to issue interim orders pending the final disposition of an application for judicial review. The plenary jurisdiction exercisable by the Federal Courts over the matters entrusted to them, including interim measures to regulate disputes before them (see Canada (Human Rights Commission) v. Canadian Liberty Net, [1998] 1 S.C.R. 626 at para. 36) is not lightly ousted.
[9] In my opinion, paragraph 12(c) has not ousted the Court’s jurisdiction to stay the CITT’s inquiry into a procurement complaint, even if the grant of a stay prevents the CITT from reporting its findings and recommendations within the statutorily prescribed time.
[10] First, to conclude that paragraph 12(c) is “mandatory”, in the sense that a decision by the CITT outside the limitation period is void, would defeat the purpose of the provision: compare, for example, McMahon v. Canada (Attorney General), 2004 FC 540 at paras. 25-28. This conclusion is supported by the French version of the text which contains no language of obligation with respect to the time limit contained in paragraph 12(c).
[11] Second, paragraph 12(c) is contained in a regulation, not an Act of Parliament. Without clear language in the enabling statute, Parliament will not normally be taken to have implicitly authorized regulations which amend another statute, particularly if, as in this case, the regulation would oust an important aspect of the jurisdiction of the Federal Court of Appeal, a superior court of record, over a matter properly before it. Regulations should, whenever possible, be interpreted in a manner that renders them valid.
[12] Nonetheless, paragraph 12(c) is relevant to the Court’s exercise of its discretion to stay proceedings before the CITT, because it indicates a public interest in the expeditious disposition of procurement complaints. This is a factor to be taken into consideration in the balance of convenience under the tripartite test for issuing interlocutory injunctions, including orders to stay, established in RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311.
Issue 2: Has the Attorney General satisfied the tripartite test for the grant of a stay?
(i) is there a serious issue to be determined?
[13] It is common ground that the Attorney General’s application for judicial review raises a serious issue, namely, whether the CITT has jurisdiction to inquire into Canadian North’s complaint. The CITT gave no reasons for rejecting the Attorney General’s motion to dismiss Canadian North’s complaint for lack of jurisdiction.
[14] Counsel for the Attorney General pointed out that the contract which was the subject of the procurement was for the delivery of mail, of which the food mail portion funded by DIAND formed only a small part overall. CPC conducted the procurement, and contracted in its own name, even though the agreement between DIAND and CPC gave DIAND the right to give policy directions on the food mail program for which it provides financial support. DIAND also reviews the terms of the RFP relating to food mail issued by CPC. CPC and DIAND agree the postage rates for food mail which CPC will charge to shippers.
[15] Canadian North had originally submitted to the CITT that the contract was within the jurisdiction of the CITT because the relationship between DIAND and CPC was one of principal and agent. However, it now concedes that, while performing services on behalf of DIAND, CPC was not the agent of DIAND, in the legal sense, and that, accordingly, DIAND was not privy to the contract between CPC and First Air for the delivery of mail.
[16] Canadian North argues that DIAND has, in effect, subcontracted to CPC the procurement of the contract for the delivery of food mail. It should not be able in this way to shelter the contracting process from the standards prescribed in the AIT and from the scrutiny of the CITT in the event of a complaint. To permit this kind of contracting out of procurement would effectively preclude accountability for ensuring that the considerable sum of public money allocated to the food mail program is spent efficiently, fairly, and transparently.
[17] I am satisfied that the Attorney General has easily met the low threshold of establishing that there is a serious question to be determined on the application for judicial review.
(ii) will there be irreparable harm if the stay is not granted?
[18] The Attorney General argues that, if a stay is not granted, DIAND will be unable to defend itself before the CITT by responding to the substance of Canadian North’s complaint. Without access to CPC’s documents, DIAND cannot file a meaningful GIR explaining and justifying the contracting process, and making submissions as to why it was not in breach of the AIT.
[19] In the absence of an effective response by DIAND to the substance of the complaint, the CITT is likely to uphold Canadian North’s complaint. The effective denial to DIAND of a right to respond to the complaint, and the reputational damage that it may suffer if it is found to have been at fault in the conduct of the procurement, constitute irreparable harm to DIAND which is not compensable by damages.
[20] In addition, it was submitted that irreparable harm would be caused to First Air by a recommendation from the CITT that the contract awarded to it should be cancelled and a new award made. Such an eventuality would seriously damage First Air’s business and threaten the jobs of its employees.
[21] The problem with these arguments is that they do not provide a causal link between the irreparable harm and the absence of a stay. It is not clear to me that DIAND would be any more able to respond to Canadian North’s complaint if the CITT’s inquiry was stayed and the Attorney General was unsuccessful in persuading the Court that the CITT had committed reviewable error in dismissing his motion to reject the complaint on jurisdictional grounds. By failing to insert into its agreement with CPC a provision respecting the disclosure of information about the procurement, DIAND finds itself in a predicament of its own making.
[22] If, however, the Court grants the application for judicial review, and the CITT is found to have no jurisdiction over the complaint, DIAND will have suffered no irreparable harm. Any harm to DIAND’s reputation in the short time between the release of the CITT’s decision upholding the complaint, and the Court’s setting it aside for lack of jurisdiction, would not likely be significant.
[23] The Attorney General replies by saying that, in the unlikely event that this Court dismisses its application for judicial review, and upholds the CITT’s jurisdiction over Canadian North’s complaint, DIAND would then have the legal means of requiring CPC to co-operate. He suggested that, if the Court upheld the CITT’s decision, it would be on the ground that CPC had contracted with First Air as the agent of DIAND. As principal, DIAND would be entitled to insist on CPC’s co-operation in responding to Canadian North’s complaint. Thus, there is a causal link between the refusal of the stay and DIAND’s ability to respond to the merits of the complaint.
[24] However, Canadian North no longer bases its case on an allegation that CPC was an agent of DIAND, in the sense that, when CPC contracted with First Air, DIAND became a party to the contract as an undisclosed principal. Canadian North relies, instead, on its “contracting out” argument.
[25] The basis on which this Court might hypothetically uphold the jurisdiction of the CITT in this case is speculative, although it is possible that, if the Court concluded that the complaint was within the jurisdiction of the CITT, it might be able to fashion the legal means for enabling DIAND to make an effective response to the complaint, despite CPC’s refusal to co-operate.
[26] Whether the CITT will uphold Canadian North’s complaint is, of course, speculative. However, if it does, DIAND may apply to the Court for a stay, pending the disposition of both the application for judicial review on the jurisdictional issue, and any challenge that it chooses to make to the CITT’s substantive decision.
[27] On balance, because of the difficulty of causally relating the alleged harm to DIAND to the absence of a stay, I have concluded the Attorney General has not established that, if no stay is granted, DIAND will suffer significant irreparable harm. Similarly, any damage that First Air might suffer would flow from the award of the contract to a competitor, not the absence of a stay.
(iii) where does the balance of convenience lie?
[28] The question here is whether any possible irreparable harm that DIAND, CPC, or First Air would suffer as a result of being denied the stay is outweighed by the harm to Canadian North and to the public interest if a stay were granted. I consider, first, aspects of the public interest which would be adversely affected if the CITT were restrained from continuing its inquiry into Canadian North’s complaint pending the hearing of the Attorney General’s application for judicial review on an expedited basis at the end of February, and its subsequent disposition.
[29] A stay would undoubtedly delay the CITT’s inquiry into the complaint. Matters relating to procurement (including inquiries into complaints) are very time-sensitive because they can create commercial uncertainty and prevent a government institution from securing needed supplies: see IBM Canada Ltd. v. Hewlett-Packard (Canada) Inc., (2002) 291 N.R. 262, 2002 FCA 284 at paras. 18-20. This public interest concern is reflected in paragraph 12(c) of the Regulations and the tight time-lines imposed on parties to procurement complaint proceedings before the CITT.
[30] Given the fact that, in the absence of a stay, the CITT will render its findings and recommendations by February 2, and the Attorney General’s application for judicial review cannot be scheduled to be heard before the end of that month, the jurisdictional challenge could be combined, then or later, with any challenge to the merits of the CITT’s decision. It is also possible that, despite the information available to DIAND, the CITT may not uphold the complaint. In either event, allowing the CITT to continue its inquiry without a stay would advance the public interest in minimizing litigation.
[31] The problem here is DIAND’s contention that it cannot effectively respond to the complaint so that, if, as the Attorney General alleges is likely, the CITT upholds Canadian North’s complaint, DIAND would probably have no basis for challenging the findings and recommendations on grounds other than that the CITT had no jurisdiction over the complaint. However, the answers already given to this problem in the context of irreparable harm also apply here: namely, the difficulty of establishing a causal link between DIAND’s inability to respond to the complaint and the absence of a stay, and, despite DIAND’s limited input, the difficulty of predicting the CITT’s findings and recommendations arising from the complaint.
[32] There is some evidence in the record that Canadian North would suffer further damage to its business if the processing of its complaint is delayed by the grant of a stay. In all the circumstances, I attach little weight to this.
[33] In my view, the harm to the public interest if a stay is granted outweighs any possible irreparable harm to DIAND, CPC or First Air if it is not.
D. CONCLUSIONS
[34] An applicant for a stay has the burdens of proof and persuasion that a stay should be granted in the exercise of the Court’s discretion. Even though the Attorney General has established that there is a serious, and important, issue to be determined in the application for judicial review challenging the CITT’s jurisdiction, there are significant weaknesses in the positions taken on irreparable harm and the balance of convenience.
[35] In these circumstances, I am not persuaded that I should interfere with the CITT’s inquiry into Canadian North’s complaint, either by granting a stay, or, as the Attorney General requested in the alternative, by suspending the counting of days within which the CITT must release its findings and recommendations, until after the application for judicial review has been determined.
[36] Accordingly, the motion will be dismissed with costs. The Attorney General’s application for judicial review will be heard in Toronto on a day to be fixed in the week commencing Monday, February 26, 2007.
FEDERAL COURT OF APPEAL
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: A-520-06
STYLE OF CAUSE: AGC v. CITT ET AL.
PLACE OF HEARING: Ottawa, Ontario
DATE OF HEARING: December 1, 2006
REASONS FOR ORDER BY: Evans J.A.
DATED: December 4, 2006
APPEARANCES:
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Ms. Karima Karmali |
FOR THE APPLICANT
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Mr. Ryan Flewelling
Ms. Justine Whitehead
Mr. Gerry H. Stobo Mr. Jack Hughes |
FOR THE RESPONDENT, Canadian North Inc.
FOR THE RESPONDENT, Canada Post Corporation
FOR THE RESPONDENT, First Air |
SOLICITORS OF RECORD:
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Deputy Attorney General of Canada |
FOR THE APPLICANT
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Ottawa, Ontario
Stikeman Elliott LLP Ottawa, Ontario
Borden Ladner Gervais LLP Ottawa, Ontario |
FOR THE RESPONDENT, Canadian North Inc.
FOR THE RESPONDENT, Canada Post Corporation
FOR THE RESPONDENT, First Air |