Arm’s Length or Strong Arming the CRTC?: Minister Moore’s “Mandate Letter” to CRTC Head Jean-Pierre Blais

Early in December a journalist from the Huffington Post, Althia Raj, contacted me about a letter that she had turned up through an access to information request. Sent by then Heritage Minister James Moore to the, at the time, new chair of the CRTC, Jean-Pierre Blais, on his first day on the job (June 18, 2012) the letter lays out what is expected of the incoming chair in a surprising amount of detail, despite the fact that the CRTC is suppose to be independent from the government-of-the-day.  

In this so called “mandate letter”, Moore lays out a number of “issues of mutual interest” that he hopes he and Blais “can work together on”, while remaining mindful of the fact that whatever cooperation does occur must “maintain[] an appropriate level of distance between our two organizations”.

After initially reading the letter, I was struck by how much I agreed with many of its goals:

• more room for consumer participation in CRTC proceedings is needed, Moore tells Blais;
• the Commission needs to “comprehensively address consumer affordability and service complaints”;
• “consumers should have access to more programming choices and affordable choices across all distribution platforms” (radio, television, broadband networks and mobile devices);
• more “competition, investment, innovation and consumer choices” is needed in telecommunications services, and all with a light regulatory touch but with a keen eye on “consumer protection and participation”.

While I like the broad contours of the letter, however, I also think it is unusual, and deeply problematic. Why?

First, because there is no precedent, to my knowledge, of a Minister sending a ‘mandate letter’ to a new head of the CRTC laying out what is expected of them.

Second, a ‘mandate letter’ has no basis in the Broadcasting Act (1991) (sections 7-8, 15, 26-28) or the Telecommunications Act (1993) (sections 8, 9 and 12) – the two main pieces of legislation that apply in such matters.  Both laws give Cabinet broad powers to issue policy directions and to review, vary and overturn CRTC rulings (Orders-in-Council), but they do not give the Minister authority to do any of these things, or to send a letter telling an incoming chair of the CRTC what the Minister expects of him or her. 

Third, while the Minister tries to straddle the awkward zone between respecting the CRTC’s independence and framing a mandate around ‘mutual interests’, the very existence of the letter casts doubt on the regulator’s autonomy. As a result, it is impossible to know for certain whether the CRTC’s newfound standing as a champion of the Canadian consumer on Blais’ watch is the fruit of consumer friendly decisions that have rankled incumbent interests, or the unintended prize of serving up just what the Minister ordered?

Three high-profile decisions in particular have defined Blais tenure to date but they could just as easily be seen as fulfilling the requirements of the mandate letter:

•  the CRTC’s flat out rejection of BCE’s first bid to take-over Astral Media in October 2012;
• the adoption of a National Wireless Code that came into affect in December;
• the recently launched inquiry into wholesale mobile wireless roaming rates at the end of December 2013 after its fact-finding mission found the Big 3 – Rogers, Telus and Bell – to be “charging or proposing to charge significantly higher rates in their wholesale roaming arrangements with other Canadian carriers than in their arrangements with U.S.-based carriers.”

Blais seemed to wince when Raj raised the notion that perhaps he was just following orders rather than marching to his own drum. However, he also worked hard to parry the appearance that the CRTC’s might be being used for partisan ends. He had to because, ultimately, the legitimacy of the regulator depends on being seen and believed to be independent from the government.

I do not think that Blais is doing the Minister’s bidding. However, it is naïve to not see the problem here. It is also naive not to see Blais and Moore as at least rowing in the same direction on the ‘consumer friendly’ approach to telecom and media regulation.

The consumer focus of the Conservative Government is real, and Blais appears to have little trouble with that. There is also no doubt that the Government chose Blais because it sees him as ideologically allied with them, and probably because of the close relationship that he and Moore cultivated when the former was a copyright lawyer at Heritage – Moore’s former home turf.

All of this should have been enough without the Minister firing off a letter that only raises doubts about the CRTC’s autonomy while at the same time being of doubtful legal standing or even effectiveness. Furthermore, the letter reinforces views that the Harper Government keeps bureaucrats on a short-leash, while the fact that the letter only turned up through an access to information request only furthers notions that the government prefers to rule in secret rather than in the light of day.   

Curious to know what others thought about this, I canvassed scholars, lawyers and former high-ranking bureaucrats to find out what they thought. None of them has ever seen a ‘mandate letter’ before, but could imagine such a thing, as their replies reproduced below show. Their views about whether such a thing was a good or bad thing are mixed. 

David Skinner, Professor, Communication Studies Program, York University.

This sounds intriguing (and problematic). I have never heard of such a thing before. Perhaps obvious suggestions, but have you asked Liora Salter or Konrad von Finckenstein? It would be interesting to know if there is something here and who/what party “invented” it.

Konrad von Finckenstein, former chair of the CRTC (2007-2012), head of the Competition Bureau (1997-2003), Justice of the Federal Court (2003-2007) and now an independent arbitrator of Canadian and international business disputes.

The letter to Blais was indeed unprecedented. Like you I have no problem with the general contours. Strictly speaking it should have taken the form of a direction to the CRTC like the government did on forbearance for instance. Instead they used the more informal letter carefully saying “should” instead of “shall” thereby leaving some leeway to the Commission to differ with the expectations expressed in the letter as it sees fit to do so.

Frankly, I think the letter is useful. It shows a delineation of the government’ s overall policy and will avoid any unintentional conflict between the Minister and CRTC yet leaves the CRTC open to go a different way, if it feels circumstances warrant, and allows it to spell out in detail, in an preemptory defense, why it took the decision. Personally as chairman I would have preferred such a letter to the sudden criticism that resulted when the CRTC took a decision the government did not agree with.

By the way you might want to file an access to information request to see if a similar letter regarding broadcasting was sent by Minister Glover to the chair.

Jon Festinger, Q.C., media, regulatory and corporate lawyer and a faculty member of the Centre for Digital Media in Vancouver. He also teaches law at the UBC Law School and Thompson Rivers University.

Having practiced regulatory law for much of my career […], I can say that I have never heard of a “mandate letter”. More interesting than my opinion is that of Sheridan Scott former counsel to the Commission and past Commissioner of Competition, heading the Competition Bureau of Canada. Sheridan very recently spoke to my class at UBC Law (Video Game Law) on the intersections of policy, politics & Law. She expressed her opinions and surprise on the subject of procedures being followed by cabinet vis-a-vis the Commission, if memory serves. You can find video of Sheridan’s talk here. Her talk starts at 1:03:44.

Sheridan Scott, co-chair of the competition practice at Bennett Jones LLP and Canada’s Commissioner of Competition from 2004 to 2009 and Chief Regulatory Officer of Bell Canada before that.

I also believe that this sort of letter is unprecedented but my reaction to it is generally positive. I have always been in favour of policy directions rather than Cabinet appeals, since they necessarily speak to general rather than case-specific issues.  While a letter such is this is not the same as a policy direction, and is not subject to the same procedural safeguards, I would nonetheless see it as providing useful context to a regulator that operates at arm’s length but not in a complete vacuum.  I do not think that it in any way forces the CRTC down a specific road:  it instead provides some useful considerations to be aware of in carrying out their statutory mandate. 

In the telecom side this direction is nothing more or less than the Policy Direction issued several years ago, so nothing new.  On the broadcasting side, there is more guidance but the wording is quite general.  Obviously there are many ways for the Commission to provide access to more programming choices and affordable choices and this letter does not prejudge or dictate any of these.  Nor are these unusual goals to identify:  the CRTC itself often indicates that its decisions are aimed at increasing programming choices and affordability.  As far as providing consumer access to broadcasting hearings, this is also something the CRTC has tried to do especially under Konrad’s direction, when benefits monies were diverted for this purpose. 

If there is one thing I find disappointing about the letter, it is the failure of the government to say anything about the importance of Canadian content.  Fostering the development of Canadian content and encouraging its accessibility were clearly amongst the original intentions of the legislators and lie at the heart of the legislation, as the Supreme Court of Canada has recently suggested.  This letter can’t change that and indeed it suggests the Commission should be mindful of the original intent.   

In sum, while this sort of letter is unusual it does not to my mind constrain the CRTC in any material way and provides additional context for the Commission to consider.  In any event, I’m not sure there is much of a remedy if the CRTC fails to take any steps in these directions.  The government can’t issue a policy direction to apply to past policy decisions (though it could issue a direction to influence decisions on a forward looking basis) and on the broadcasting side Cabinet appeals are limited to decisions to issue, amend or renew broadcasting licences only.  The scope of Cabinet appeals is broader on the telecom side, and I think this type of ministerial communication is definitely preferable to tweeting what the Cabinet is likely to do on appeal, before the CRTC has taken a decision, as we have seen in the past.  And in any event, there is already a Policy Direction in place, and the letter does nothing but confirm this.

Anonymous former senior bureaucrat:

I have also heard from several communications law experts. The consensus view is that the letter walks a fine line — likely inappropriate but not illegal. In the so-called “arm’s length” relationship, the length of the arm has never been fixed — but in this interaction it appears to be very short. 

With respect to telecoms, the letter references the Policy Direction which is public and in force, so that’s a wash.

For broadcasting, the letter, combined with the Section 15 Order, is certainly relevant to anyone participating in the CRTC’s consultation on the future of television. Unlike the S.15 Order, the letter cannot in any way be considered binding on the Commission or the Chair. However, the letter gives the appearance of constraining the CRTC’s discretion because, ultimately, the government could intervene by way of a formal policy direction if the CRTC’s outcome were contrary to the views expressed by the Minister. So arguably this is setting policy by stealth — without the government having to take on the responsibility and suffer the onerous public and parliamentary process of issuing a formal policy direction as set out in the Broadcasting Act. In this context, the letter’s release under access to information may be way of managing expectations of interested parties — especially those with a vested interest in the status quo.

When the current Broadcasting Act was being debated in Parliament, the main criticism of the proposed Governor-in-Council power to issue policy directions was precisely this outcome — that the mere existence of the power would so change the relationship between the CRTC and the government of the day that the government would be able to get away with telling the CRTC what it wants without having recourse to the process set out in the Act. This outcome, it was feared, would undermine the independence of the regulator much more significantly than any actual use of the power as set out in law. Since the Act was passed in 1991, this letter is the first documented instance of this criticism and concern having been borne out.  

Clearly, Moore’s letter to Blais raises fundamental issues about the independence of the CRTC. While views differ over the appropriateness of the letter, nobody thinks the ‘mandate letter’ is business as usual. 

One thing that emerges from these responses is the sense that regulators have been blind-sided by already high-levels of intervention in the CRTC’s affairs. This was notably the case when then Industry Minister Tony Clement announced, by all things, a tweet that the CRTC’s Usage-Based Billing decision in 2010 would be overturned if the Commission did not go back to the drawing board on its own accord. Duly warned, von Finckenstein ordered the CRTC staff back to the drawing board; a more palatable wholesale bandwidth access rate followed the next year.   

Rather than continuing to be blind-sided, it’s not surprising that those closest to the fray – von Finckenstein and Scott, notably – think that giving the government even more powers to issue ‘mandate letters’ might offer greater clarity. Indeed, with a mandate letter in hand all might be clear and no one would be sent back to the drawing board by tweets issued in the middle of the night.

That is understandable, but I have my doubts. Anonymous, it appears, who I can assure is no stranger to these matters, is not so sure either.

I worry that grafting more powers on the extensive ones the government already has will only further eliminate whatever independence the Commission still retains.

Regardless of which of these views is correct, one thing is clear: ‘mandate letters’ are not ‘business-as-usual’. Things need to change, but just how remains up for grabs. Until they do, however, the independence so essential to the CRTC’s legitimacy and, the public’s trust in it, will remain on shaky ground, and for good reason.