What is the appropriate role for politics in the regulatory process?
Some might answer “none”. Political interventions in the regulatory process can lead to substantial distortions.
Seventeen years ago, in its report [pdf, 1.6MB], Canada’s 2006 Telecom Policy Review Panel wrote:
It is the proper role of government to establish policies and that of regulators to implement the policies and to develop the more detailed rules necessary to provide certainty as to how the policies will be applied. Comments submitted to the Panel during this review expressed broad support for the principle that the government should develop policies in the telecommunications sector. Parties also supported the principle that regulators should implement those policies in an independent, professional and transparent manner.
In 2006, the panel observed “Canada appears to be the only OECD country whose telecommunications legislation empowers government to do both”, providing “advance directions on policy matters” as well as “to review and vary, rescind or refer a decision back to the regulator on policy grounds”. That panel recommended repealing the cabinet appeal process, saying “the Panel believes the combination of the policy direction power with the Cabinet review power has the potential to undermine the integrity of the CRTC’s independent regulatory process.”
A decade and a half later, the Broadcasting and Telecom Legislative Review (BTLR) Panel did not make such a recommendation in its January 2020 report. Instead, the more recent review panel sought to rationalize the process and timelines for appeals under the Telecom Act and Broadcast Act. “While the Governor in Council (GiC) has rarely exercised its power to review, private parties have nonetheless made frequent requests when they are dissatisfied with a CRTC decision. The possibility of an appeal to the GiC does provide an important safety valve in cases in which the CRTC’s decision deviates from the government’s policy view.” Still, the panel stated that Cabinet’s powers should not include the ability to vary the decision, simply providing an ability to let the CRTC’s determination stand, reject the decision or return it to the Commission for reconsideration.
I recently wrote about the various channels available to appeal a decision by the CRTC.
As noted by both review panels, a number of other countries empower the executive branch of their government to issue policy directions. No other jurisdiction “couples this power with the ability to review a sector regulator’s decision: Canada is alone in allowing the government to direct its communications regulator, and to perform reviews of the regulator’s decisions.”
Over the past few years, that safety valve has been put into action, with Cabinet telling the CRTC to take a fresh look at CBC’s license last September (OiC 2022-0995), and urging the CRTC to consider that “Canada’s future depends on connectivity” in its review of the wholesale wireline rates decision (OiC 2020-0553).
What characteristics of Canada’s communications regulatory structure have made the appeal to Cabinet such an important piece of the regulatory process?