In separate but companion decisions on Nov. 8, 2024, Justice Suzanne Côté affirmed the legal validity of the federal child support guidelines issued by the Governor in Council and of a property assessment guideline issued by an Alberta Cabinet minister: Auer v. Auer, 2024 SCC36; TransAlta Generation Partnership v. Alberta, 2024 SCC37.
Supreme Court of Canada Justice Suzanne Côté
A central question in the resulting appeals to the top court was whether the vires of regulations and other delegated legislation are to be assessed via the framework for judicial review set by the top court in the leading case of Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 — which held that reasonableness is the presumptive standard in the judicial review of the merits of administrative decisions/actions, with limited exceptions.
Moreover, did Vavilov overtake the court’s earlier decision in Katz Group Canada Inc. v. Ontario (Health and Long-Term Care), 2013 SCC 64, particularly the third prong of the Katz rule, which presumes regulations are valid — a presumption that can only be overcome if the challenger meets a high bar, i.e. demonstrates that the impugned regulations are “irrelevant,” “extraneous” or “completely unrelated” to the governing statute’s objectives?
Conflicting answers emanated from the Federal Court of Appeal and the Courts of Appeal for Alberta, B.C. and Nova Scotia.
However, the Supreme Court’s unanimous decisions that dismiss the Auer and TransAlta appeals settle the jurisprudential debate.
“The conceptual basis for the ‘irrelevant,’ ‘extraneous’ or ‘completely unrelated’ threshold does not hold in a legal landscape now organized by the principles set out in Vavilov, which centre around reasonableness review,” Justice Côté held.
“For subordinate legislation to be found ultra vires on the basis that it is inconsistent with the purpose of the enabling statute, it no longer needs to be ‘irrelevant,’ ‘extraneous’ or ‘completely unrelated’ to that statutory purpose,” she ruled. “Continuing to maintain this threshold from Katz Group would be inconsistent with the robust reasonableness review detailed in Vavilov and would undermine Vavilov’s promise of simplicity, predictability and coherence.”
Maintaining the Katz Group threshold “would perpetuate uncertainty in the law,” she added.
However, in ruling that the Vavilov reasonableness standard presumptively applies when reviewing the vires of subordinate legislation, Justice Côté stipulated “that some of the principles from Katz Group continue to inform such reasonableness review.”
First, “subordinate legislation must be consistent both with specific provisions of the enabling statute and with its overriding purpose or object,” Justice Côté explained. Second, “subordinate legislation benefits from a presumption of validity.”
Third, “the challenged subordinate legislation and the enabling statute should be interpreted using a broad and purposive approach to statutory interpretation,” the judge wrote. Fourth, “a vires review does not involve assessing the policy merits of the subordinate legislation to determine whether it is necessary, wise or effective in practice.”
Paul Daly, University of Ottawa
“‘Hyper-deference’ is gone — or ‘a very high degree of deference’ is how Justice Côté described it,” remarked Daly, who was co-counsel for the appellant Auer, with counsel Laura Warner, Ryan Phillips and Matthew Scott of Jensen Shawa Solomon Duguid Hawkes LLP in Calgary.
However, “the presumption of validity remains,” Daly pointed out. “And that can be a hurdle for anyone seeking to challenge regulations.”
Asked whether the Supreme Court has effectively expanded the scope for judicial review of regulations and other subordinate legislation, Daly replied, “I think, on balance, it does make it easier to challenge regulations. It fairly clearly expands the grounds on which you can challenge regulations … The very high degree of deference that was demanded by the 2013 decision in Katz has been removed, so there is no special carve out [from the Vavilov judicial review framework] for regulations. They’re treated the same as any administrative decision.”
Daly said he has the impression that regulations have already been challenged in a way that they hadn’t been in the years before Vavilov. “I would expect that to continue,” he said.
He cited as examples attacks on regulations on plastics, pharmaceuticals, asset-freezing and firearms. “On these high-profile policy issues, … we see challenges being brought. And so this decision is going to have an impact on the ability of governments to govern, and the ability of citizens and interest groups to challenge policy choices that are being made by Cabinet,” he predicted.
Added Daly, “I think there is enough in this decision to persuade parties who might have been on the fence about bringing a challenge to go ahead and bring a challenge. It certainly creates more favourable territory for challengers, though, again, I stress whether those challenges would be successful or not is a separate question — and there, the presumption of validity might have an important role to play.”
Going forward, Daly said he will be watching how the “presumption of validity” analysis plays out in the courts.
“If all it means is that a court should give a fair characterization to regulations and not impose a special burden on a challenger, then I think that this decision will have expanded the scope of judicial review of regulations,” he said. “On the other hand, if the courts insist on the presumption of validity and engage in interpretive gymnastics to ensure that regulations are read as conforming to the statutory scheme, then I think … successful challenges are much less likely. So that’s where I’ll be looking in the coming years as to how this decision is applied.”
Laura Warner, JSS Barristers
“First and foremost, Vavilov applies to the review of delegated legislation,” she told Law360 Canada. “The degree of deference given by the judiciary does not depend on the identity of the administrative decision-maker or proximity to the legislative branch. There is not a very high degree of deference owed to the executive or other delegates interpreting the scope of their authority. The exercise of delegated power is presumptively reviewable for reasonableness under the enabling statute, which creates the power,” she explained. “This important clarification should calm the debate surrounding the standard of review, and allow Canadians to focus instead on how it applies to the merits of any particular regulations under review.”
However, Warner suggested that the Supreme Court’s “attempt to integrate Vavilov and Katz will likely give rise to ongoing questions.”
“Drawing the line between proper reasonableness review and improper merits review will remain vexing to draw,” she predicted, pointing to the statements of former Supreme Court of Canada Chief Justice Beverley McLachlin in Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2, that the “attempt to maintain a clear distinction between policy and legality has not prevailed. In passing delegated legislation, a municipality must make policy choices that fall reasonably within the scope of the authority the legislature has granted it.”
Commenting on the Supreme Court’s affirmation that delegated legislation benefits from a presumption of validity, Warner said that “the first aspect of this presumption is straightforward: the applicant has the burden” while the second aspect works to favour “an interpretive approach that reconciles the subordinate legislation with its enabling statute”.
“The SCC’s affirmation of an ongoing role for this principle will likely be problematic,” she said. “This aspect of the presumption either adds nothing, in which case it fosters confusion, or it results in higher deference for certain types of delegated decisions or decision-makers. If the latter, then it is inconsistent with Vavilov’s insistence that reasonableness is a single standard … and the Supreme Court’s affirmation in Auer that the identity of the decision-maker is not a reason for special deference.”
She elaborated that “retaining the second aspect of the presumption of validity risks reaching by a different route the conclusion that ‘legislative’ decisions deserve special treatment under the Vavilov framework … Therefore, in our view, the decision would have better settled the law had it gone further in explaining that the ‘presumption of validity’ is a shorthand that greatly overstates the impact of the principle, which could lead to ongoing confusion, as it did with the aspect of Katz from which it has departed.”
Warner said the court’s legal analysis “is meant to clarify key aspects of the legal test and has gone a good distance in doing so.”
However, “the difficulty in distinguishing between proper reasonableness review and improper merits review, the ongoing role for the presumption of validity and the scope of materials on which an applicant can rely in discharging its burden are open questions that will require future clarification,” she said.
Aubin Calvert, Hunter Litigation Chambers
Instead, Calvert said, a court “actually has to look at the consequence-based arguments and ask whether they demonstrate that the delegate failed to respect the limits of its statutory authority, or merely that the regulation may be unwise.”
The decisions enhance clarity in the area of judicial review, she said. “Not only has the court conclusively settled the Katz/Vavilov debate, but it has also provided clarity in terms of what courts are meant to be doing when they review subordinate legislation: the task is to ascertain whether the subordinate legislation was authorized — in other words, whether it respected the legal constraints on the scope of the delegate’s grant of authority. The court identified the tools that may be brought to bear on that question: consistency with the scheme and purpose of the enabling legislation — the latter [is] no longer tethered to ‘irrelevance’ and ‘extraneity’ — common law principles and other tools of statutory interpretation.”
Calvert noted that when governing is being done outside of the legislative process — whether in closed-door Cabinet meetings or in the private offices of regulators — that work is removed from the ordinary mechanisms of democratic transparency and accountability.
“Yet these actors make decisions with immense impacts on people’s lives and livelihoods,” she said. “It is important that courts have the tools to ensure that all delegated decision-makers are subject to appropriate oversight. At the same time, the extent of that oversight must respect the separation of powers. Articulating a framework for judicial review that strikes that balance is an incredibly difficult task, but also an incredibly important one.”
Thompson Rivers University law professor Mark Mancini said that the decisions together hold that Vavilov’s reasonableness applies to the review of all subordinate legislation, including Cabinet regulations and municipal bylaws. “Reviewing subordinate legislation is fundamentally about how the subordinate instrument fits with the governing primary law,” Mancini said. “In other words, the application of the reasonableness standard in this context is really about statutory interpretation and not about the wisdom of the regulation or the policy choice made in enacting it. The court affirms the work of the Federal Court of Appeal, specifically Justice David Stratas, in this regard.”
Mancini called the decisions “a positive development” in the law which is significant for “principled and pragmatic reasons.” The court “confirms that Vavilov is a master rule for review of administrative instruments, the starting point for doctrinal development in administrative law,” he remarked. “It explains that whether a regulation is legal depends on its fit with the primary instrument which empowers it — in other words, judicial review is fundamentally about legality.”
Practically, Mancini added, the court “also offers helpful guidance on how to apply the reasonableness standard. Regulatory processes sometimes do not produce a coherent set of ‘reasons,’ and Justice Côté explains that in such cases, courts can review the record — such as regulatory impact analyses — to assist in determining the rationale for the regulation.”
However, “the focus remains on the statutory language and the sort of outcomes it authorizes.” he noted.
In terms of litigation, Mancini said the court has done away with the previous Katz standard for review of subordinate legislation, i.e. whether the regulation is irrelevant or extraneous to the enabling statute’s purpose. “This was a highly deferential standard that made it possible for regulations to be upheld even if they strayed beyond the language of the statute,” he said.
“This change may make it easier, on the margins, for litigants to attack regulatory action,” Mancini suggested. “At the same time, reasonableness review is deferential, and litigants still bear the onus to show that the regulation does not fit in the enabling statute. Most importantly, the regulation’s wisdom is not at issue in judicial review. This is an important constraint on judicial power.”
In the Auer case, the appellant father who was ordered to pay child and spousal support under the federal child support guidelines, argued unsuccessfully in the courts below that the guidelines are ultra vires s. 26.1(2) the Divorce Act as he was required to pay a materially disproportionate share of his children’s necessary expenses.
In the companion TransAlta appeal, the owners of four coal-fired electrical power generation facilities subject to “off-coal agreements” with the Alberta government, which pay annual transition payments of $40 million for 14 years, unsuccessfully challenged in the courts below the vires of “linear guidelines,” made by ministerial order pursuant to ss. 322 and 322.1 of the province’s Municipal Government Act, which they contend put them into a new unauthorized class of property and unlawfully discriminated against them in the municipal assessment and taxation of their property.
In Auer, the Guidelines “fall reasonably within the Governor-in-Council’s scope of authority under the Divorce Act, having regard to the relevant constraints,” Justice Côté ruled. Under s.26.1(1) of that Act, “the GIC is granted extremely broad authority to establish guidelines respecting child support. Section 26.1(2) constrains this authority by requiring that the guidelines be based on the principle that spouses have a joint financial obligation to maintain the children of the marriage in accordance with their relative abilities to contribute,” she reasoned. “The Guidelines respect this constraint.”
In TransAlta, Justice Côté held that no exception to the presumption of reasonableness review applied; thus, the reasonableness standard applied when reviewing the vires of the impugned linear guidelines. “Having regard to the governing statutory scheme, the principles of statutory interpretation and the common law rule against administrative discrimination, the Linear Guidelines are intra vires the Minister,” Justice Côté concluded.
Photo of Supreme Court of Canada Justice Suzanne Côté: Philippe Landreville, photographer SCC Collection
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