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Newsletters 2006 > January 2006

The Sensible, and not Literal, Interpretation of a Statute in Canada:
Canada Post Corporation v. Key Mail Canada Inc.

The Canada Post Corporation ("Canada Post") moves the mail in Canada. It is vested, by statute, with an "exclusive privilege" as concerns the collection, transmission and delivery of mail in Canada. An interesting question recently surfaced as to whether this exclusive privilege prohibits other enterprises from collecting and/or transmitting letters within Canada for the purposes of delivering those letters to destinations outside of Canada.

A dispute arose on this issue between Canada Post and Key Mail Canada Inc. ("Key Mail"). Key Mail is in the business of providing outbound international mail services to Canadian businesses, individuals and government agencies. This service involved the gathering of mail and other printed matter from points in Canada and making arrangements for the delivery of that material to points outside of Canada.

The "Exclusive Privilege" Vested with Canada Post

The Canada Post Corporation Act1 provides, in part as follows:

s.14(1) . . . The (Canada Post) Corporation has the sole and exclusive privilege of collecting, transmitting and delivering letters to the addressee thereof within Canada.

It was an important point of the analysis of the issue that this provision - emanating from a federal statute - has an official French equivalent:

s.14(1) . . . la Société a, au Canada, le privilège exclusif du relevage et de la transmission des lettres et de leur distribution aux destinataires.

(emphasis added)

The Proceedings

In August of 2004, Canada Post brought a motion before the Superior Court of Ontario2 for a determination on how the above vesting provision was to be interpreted: Can Canada Post alone collect and/or transmit letters within Canada for the purposes of delivering to places outside Canada?

Key Mail took the position that the "collection, transmission and delivery of letters" for the purposes of the above statute is a single process, that is, reasonably construed, a monopoly power in operating a postal service through collecting, transmitting and delivering letters within Canada but not in respect of each independent element of the three standing alone. That is, there was not a monopoly power for each separate phase in the collection of letters, as distinct from the transmission of letters, and in turn the delivery of letters either within Canada or for that matter, from points in Canada to points outside of Canada. Key Mail considered its operations to fit within one or more of these separate phases, as considered in isolation.

The motions court judge ruled that on a proper interpretation of both the English and French versions of Section 14 that there existed an exclusive privilege in favour of Canada Post in respect of any one or more of the activities of "collecting, transmitting and delivering" letters within Canada, including letters addressed to foreign destinations. The "single process" interpretation was rejected, largely on the basis of the interpretation of the French wording, discussed below.3

Key Mail appealed the outcome to the Ontario Court of Appeal.4 Certain intervenors, also in the business of providing outbound international mail services, were granted status to make representations on the appeal in support of Key Mail. The Reasons of the Court of Appeal delved into important principles of statutory interpretation.

Key Mail argued that the legislation is clear and unambiguous that outbound international mail is excluded from the exclusive privilege. Canada Post in turn argued that the same provision is clear and unambiguous in its favour, in providing it the exclusive privilege for any one or more of the activities of "collecting, transmitting and delivering letters" - whether in Canada or abroad.

The Court of Appeal ruled that the exclusive privilege did in fact extend to each of the constituent activities listed in the statutory provision and that the so-called "single process" interpretation was inconsistent with other provisions of the enabling statute as well as other rules of interpretation. An analysis of the Reasons provides a helpful listing of key aids to statutory interpretation in Canada.

Analysis

In ruling in favour of Canada Post, the Court of Appeal made the following observations:

  1. The conjunction in the French version "et" between the words "relevage" ("collecting"), "transmission" ("transmitting") and distribution ("delivery") makes it clear that the intention of Parliament was to grant an exclusive privilege to Canada Post within Canada for each of those activities.5

  2. While the English version of the statute is ambiguous (taking into account the "single process" argument) the French version is clear and unambiguous in giving Canada Post the exclusive privilege for each of the three component activities (noting the use of the word "et" throughout).

  3. In Canada, where the meaning of a statutory provision is ambiguous in one official language, but clear and unambiguous in the other, the Court should apply the clear and unambiguous meaning as the one common to both languages - as long as the "shared meaning" does not conflict with the results of applying other relevant principles of statutory interpretation.6 As such, in this case the French language interpretation should guide the interpretation of the English provision, absent conflict with other rules of interpretation.

  4. The fundamental principle of statutory interpretation is that the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.7 The legislation lists, amongst the objects of Canada Post, "to establish and operate a postal service for the collection, transmission and delivery of messages, information, funds and goods both within Canada and between Canada and places outside Canada". Further, while maintaining "basic customary postal service", the Corporation, in carrying out its objects, shall have regard to "the need to conduct its operations on a self-sustaining financial basis while providing a standard of service that will meet the needs of the people of Canada ...". The Court found it clear from the stated objects that Canada Post is expected to continue on the traditional role of providing postal services across Canada. It was noted that Canada Post has the requirement to provide postal services to all communities in a lightly populated but geographically vast country, at a reasonable cost and in a financially viable way. Inasmuch as many Canadian communities cannot be served economically, Canada Post therefore has a legitimate need to engage in the lucrative letter mail business which given its stated mandate suggests a policy foundation for an exclusive privilege respecting the collection, transmission and delivery of letters. In short, the object of a "universal postal service at reasonable cost" would then support a finding of an exclusive privilege for any one or more of the constituent activities listed.

  5. Key Mail argued that there was a glaring omission in the English statutory provision - restricted literally to activities "within Canada", as compared to other excerpts of the statute where in the articulated objects of Canada Post the phrase "between Canada and places outside Canada" is used. The maxim "to express one thing is to exclude another" was invoked, it being argued that the legislature must have then meant to exclude that which it did not provide expressly (ie. the handling of mail from places in Canada to places outside Canada).8 However, the effect of such an implication, or manner of interpretation necessarily depends on the strength of the expectation that there be an express reference. The Court ruled that given the clear language of the French version that any expectation that there be such an express reference in the English language was not high so as to apply a different meaning based on this principle of interpretation.

  6. The Court found that the objects of Canada Post stated above in the legislation were incompatible with the "single process" argument advanced.

  7. The Court also accepted the argument by Canada Post that there cannot be a single process pertaining to the "collection, transmission and delivery" of international mail, because Canada Post does not "deliver" outbound international mail to addresses of that mail and it does not "collect" inbound international mail.

  8. Finally, the Court found that the "single process" interpretation led to conflict with other provisions in the Act which provides for situations involving customs or money laundering offences. For example, one provision provides that at the request of a customs officer, all mail leaving Canada for a place outside Canada containing matter that is not to be exported must be submitted by Canada Post to the customs officer. Further, another provision provides that where mail is seized or detained for customs or money laundering reasons, notice of the seizure and detention is to be given to Canada Post. These provisions are inconsistent with any interpretation of the Act that would allow private couriers (such as Key Mail) to engage in the delivery of outbound international letters.

  9. The Court also considered the penal provision in the legislation concerning unauthorized mail activities. Section 56 provides as follows:

    Every person who, in violation of the exclusive privilege of the Corporation under section 14, collects, transmits or delivers to the addressee thereof, or undertakes to collect, transmit or deliver to the addressee thereof, any letter within Canada or receives has in his possession within Canada any letter for the purpose of so transmitting or delivering it, commits an offence in respect of each such letter...

    (emphasis added)

The Court interpreted this sanction as working against any "single process" interpretation. An offence is created relating to any one of the activities of collecting, transmitting or delivering letter mail.

Finally, Key Mail also attempted to argue that Canada Post was engaged in unfair competition however this argument was dismissed on the basis that the legislation - being within the legislative jurisdiction of Parliament - granted Canada Post an exclusive privilege with the only issue being the scope of the privilege, rather than the existence of same. The vesting of this privilege did not amount to an unfair monopoly.

Key Mail has recently filed an application for leave to appeal to the Supreme Court of Canada.

© Gordon Hearn, 2006


Endnotes

  1. R.S.C. 1985 c. C-10 (as amended).
  2. [2004] O.J. No. 3446.
  3. It is significant that Canada is an officially bilingual country in both the English and French languages. As will be seen, the need to find harmony in the inevitable case of differing nuances between the wordings in both languages serves as an aid to statutory interpretation which dynamic will not exist in other countries that are not officially bilingual.
  4. Docket number C42369 which upheld the result in first instance in Reasons published in September of 2005.
  5. My elementary school French has it that the French word "et" is directly translated to the English word "and". While this represents the limit to which I can safely travel in the French language, the Court of Appeal confirms my understanding as correct.
  6. R. v. Daoust and Bois (2004) 235 D.L.R. (4th) 216 at 230 (S.C.C.) and see R. Sullivan, Driedger On The Construction of Statutes, 4th Edition (Markham: Butterworths, 2002) at 80 - 84, 87 - 90.
  7. Rizzo and Rizzo Shoes Ltd. (Re) (1998) 154 D.L.R. (4th) 193 (S.C.C.) at paragraph 21.
  8. Driedger, supra at page 186.

 

 



 


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