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| Sara Blake |
As I cannot explain it better, I’ll just comment on some highlights.
There has been some debate since Vavilov and West Fraser Mills Ltd v. British Columbia (Workers’ Compensation Appeal Tribunal) 2018 SCC 22, as to whether the standard for judicial review of regulations established by Katz Group Canada Inc. v Ontario (Health and Long-Term Care) 2013 SCC 64, is still the law. The majority in Auer confirm that Katz is still the law and explain why.
Auer challenged the validity of a federal cabinet regulation — the Federal Child Support Guidelines made pursuant to the Divorce Act. He relied on a couple of academic articles which argued that the Vavilov standard of review should be applied to cabinet regulations and on a decision of the Federal Court of Appeal that was persuaded by these arguments: Portnov v. Canada (Attorney General) 2021 FCA 171.
These arguments were correctly rejected by the majority in Auer, who had to do the heavy lifting of research and analysis because the Department of Justice lawyer erroneously conceded that Vavilov applied “contextualized by Katz.”
Constitutional basis for judicial review
The primary reason to reject these arguments is that they demonstrate a lack of understanding of the Canadian Constitution, particularly the separation of powers between Parliament, the executive and the judiciary. I commend to you the summary, provided by the majority in Auer, of the histories of the development of each of the three standards of review each with reference to the constitutional role of the courts.
Judicial review is an exercise by the court of its constitutional authority over the rule of law. It has no authority over matters of policy, which is granted by the Constitution to Parliament and the provincial legislatures, the members of which are accountable to the electorate for their policy decisions as enacted in statutes and regulations. The courts have repeatedly reminded us that they have no constitutional authority to review the wisdom or efficacy of policy choices enacted by statute or regulation. This is why they do not review the reasonableness of a cabinet or a minister’s regulation.
Cabinet regulations ≠ substantive law made by municipalities and regulators
The majority in Auer sorted out the confusion resulting from West Fraser Mills and two other Supreme Court of Canada decisions concerning municipal bylaws and substantive rules made by regulators, which are subject to a circumscribed form of reasonableness review. The majority in Auer identified the key distinctions.
Cabinet and minister’s regulations are made by elected members of Parliament who are subject to direct parliamentary oversight. Thus, on judicial review, cabinet and minister’s regulations are on par with legislation — on the parliamentary side of the Constitutional separation of powers. The Federal Court of Appeal in Portnov made a constitutional error in classifying cabinet regulations as mere “administrative decisions” of the executive subject to the Vavilov standard of review.
In contrast, municipalities and regulators who make subordinate law are not subject to this direct legislative scrutiny, as they are not members of the legislature. This puts their laws on the executive side of the constitutional divide. The rule of law requires greater scrutiny of the legality of executive action because the executive are not directly accountable to voters through the legislature. The electorate can express their views about the wisdom of a cabinet or ministerial regulation, at the ballot box. You are right to point out that municipalities and some regulators have democratic accountability to an electorate — municipal residents or members of the regulatory profession — but this accountability is established by statute, not by the Constitution. They are immune from direct legislative oversight.
Jurisdiction ≠ Vires
Another source of confusion is the loose use of the terms “jurisdictional” and “vires.” The Federal Court of Appeal in Portnov justified the application of the Vavilov standard of review to a cabinet regulation because of the interchangeable use of these terms. The majority in Auer properly rejected this approach and clarified that the term “jurisdictional” is concerned with the statutory authority to make a decision affecting the legal rights, duties or interests of a person. In contrast, the term “vires” is concerned with the validity of subordinate law. The discussion in Vavilov of questions of jurisdiction concerned a decision as to Vavilov’s statutory right to Canadian citizenship. It was not concerned with the vires of any subordinate law.
Vavilov does not set standard of review for regulations
The majority in Auer rejected the Federal Court of Appeal ruling in Portnov which equated regulations with statutory decision-making, noting that “those seduced by this reasoning … ignore first principles that dictate such encroachment be resisted.” The majority in Auer noted that the potential consequences of allowing judicial review of the wisdom of policy are profound and, I add, unconstitutional. As an aside, I note that the regulation at issue before the Federal Court of Appeal froze the assets of named individuals, as authorized by statute. An atypical regulation is no reason to depart from long-established law confirmed in Katz.
The majority in Auer reviewed every ground of review established by Vavilov and explained why it cannot be applied to cabinet regulations. Vavilov requires a review of reasons for decision, which are not provided for regulations. And it requires an analysis of evidence, facts and submissions of the parties, none of which are present in a policy-making exercise that is not subject to rules of procedural fairness and is not concerned with the rights of an individual. As an aside, I note that the federal government now publishes a Regulatory Impact Analysis Statement — which is not required by the courts and, in any event, is high level, lacking analysis of evidence, facts and submissions of stakeholders if any were invited to comment on a draft.
Conclusion
The majority in Auer confirmed that, “The Katz Group test maintains the integrity of the separation of powers and the role of the legislative branch of government. It ensures that courts do not enter the legislative field by weighing in on matters that properly fall within the sphere of the legislature and the executive: economics, policy, motives for passing the regulation, the wisdom of or likely efficacy of the regulation, or the regulation’s impact on particular individuals.” They got it right.
The bottom line is that (1) cabinet and minister’s regulations are subject to judicial review only for statutory authorization and constitutional validity, applying Katz. The wisdom or reasonableness of a regulation is not reviewable by a court. (2) Subordinate laws made by municipalities and regulators are subject to judicial review on the same two grounds plus a circumscribed reasonableness review that gives deference to their statutory authority to legislate policy, applying West Fraser Mills. (3) Statutory decisions that directly affect the legal rights, duties or interests of a person are subject to judicial review on the reasonableness standard established by Vavilov.
Sara Blake is the author of Administrative Law in Canada, 7th edition, LexisNexis Canada. Her practice is restricted to clients who exercise statutory and regulatory powers.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the author’s firm, its clients, The Lawyer’s Daily, LexisNexis Canada, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
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