CRTC successful in Federal Court appeal concerning funds in deferral accounts

On March 7, 2008, Torys was successful in the Federal Court of Appeal on behalf of the Canadian Radio-television and Telecommunications Commission. In an earlier decision, the CRTC had directed incumbent telephone companies to create "deferral accounts" and to credit to the accounts a portion of their revenues from residential subscribers. In the decision under appeal, the CRTC ordered that funds in the deferral accounts be used to expand broadband services and enhance access to telecommunications services by persons with disabilities, and that remaining funds be rebated to consumers.

Bell Canada, the appellant in one of the appeals, argued that the CRTC had improperly engaged in retroactive or retrospective rate-making by ordering that the funds in the accounts be used for rebates.

The appellants in the other appeal, the Consumers Association of Canada and the National Anti-Poverty Organization, argued that the CRTC had no authority to create the deferral accounts in the first place, but that if it did, it was obliged to order that all of the funds be used for rebates.

The Court unanimously dismissed both appeals. In reasons that closely tracked the CRTC's submissions, the Court affirmed the CRTC's broad rate-setting authority and rejected the contention that ordering payment out of the deferral accounts amounted to retroactive or retrospective rate-making.

Further information is found on the Federal Court of Appeal's website.