The Supreme Court of Canada (“SCC”) in two recent companion decisions, Auer v. Auer (“Auer”) and TransAlta Generation Partnership v. Alberta (“TransAlta”), has clarified that the reasonableness standard as set out in Canada (Minister of Citizenship and Immigration) v. Vavilov (“Vavilov”) applies when reviewing the validity of subordinate legislation, including regulations, rules, policies or bylaws.
Background
Both companion decisions involved challenges to the validity of subordinate legislation. Auer involved a challenge to the validity of the Federal Child Support Guidelines (“Support Guidelines”) established by the Governor in Council under the Divorce Act, which determine the amount of child support to be paid in the case of divorce. The Court was required to determine whether the Governor in Council acted within the scope of its delegated authority in establishing the Support Guidelines. Meanwhile, TransAlta concerned a challenge to the validity of the 2017 Alberta Linear Property Assessment Minister’s Guidelines (“Linear Guidelines”) under Alberta’s Municipal Government Act.
In both cases, the chambers judges upheld the validity of the subordinate legislation at issue, finding that the Support Guidelines and the Linear Guidelines were intra vires (i.e., authorized by the enabling statute). The chambers judges held that following Vavilov, the presumptive standard of review for assessing the vires of subordinate legislation is reasonableness, but that the reasonableness review does not displace the threshold set out in the SCC’s decision in Katz Group Canada Inc. v. Ontario (Health and Long-Term Care) (“Katz”), i.e., that subordinate legislation is only ultra vires if it is “irrelevant”, “extraneous” or “completely unrelated” to its enabling statute.
In both cases, the Court of Appeal of Alberta dismissed the appeals, upholding the respective Guidelines, but grappled with which standard of review applied. Ultimately, the Court of Appeal found that the threshold in Katz had not been displaced or modified by Vavilov and that the principles in Katz should inform the reasonableness review.
The Decision of the Supreme Court of Canada
The SCC upheld the validity of the impugned Support Guidelines and Linear Guidelines, respectively. Writing for a unanimous court, Justice Côté dismissed both appeals and held that Vavilov’s reasonableness standard is the presumptive standard for reviewing the vires of subordinate legislation.
The SCC confirmed that the “irrelevant”, “extraneous” or “completely unrelated” threshold from Katz is no longer applicable to the reasonableness review. The SCC held that the Katz threshold “is now out of step” with the principles set out in Vavilov and that maintaining it would undermine the predictability, simplicity and coherence in judicial review that Vavilov promises. Having said that, the SCC held that certain principles established in Katz should continue to inform the reasonableness review of subordinate legislation, including the following:
- A successful challenge to the vires of regulations requires that they be shown to be inconsistent with the objective of the enabling statute or the scope of the statutory mandate;
- Regulations are presumptively valid, which places the burden on challengers to demonstrate the invalidity of regulations and favours an interpretive approach that reconciles the regulation with its enabling statute so that, where possible, the regulation is construed in a manner that renders it intra vires;
- Both the challenged regulation and enabling statute should be interpreted with a broad and purposive approach to statutory interpretation; and
- The vires review does not involve assessing the policy merits of the regulations to determine whether they are “necessary, wise or effective in practice” or whether the regulations “will actually succeed at achieving the statutory objectives”.
The SCC also explained how to conduct a reasonableness review of the vires of subordinate legislation, noting that the inquiry involves the reviewing court to ask whether “the decision bears the hallmarks of reasonableness – justification, transparency and intelligibility – and whether it is justified in relation to the relevant factual and legal constraints that bear on the decision”. The burden is on the party challenging the subordinate legislation to show that it is not reasonably within the scope of the decision maker’s authority. The SCC confirmed that the two types of “fundamental flaws” that would make an administrative decision unreasonable are: (i) a failure of rationality internal to the reasoning process; or (ii) a decision that is untenable considering the factual and legal constraints that bear on it.
The SCC noted that the potential or actual consequences of the subordinate legislation are “only relevant insofar as a reviewing court must determine whether the statutory delegate was reasonably authorized to enact subordinate legislation that would have such consequences”.
Applying the reasonableness standard to review the vires of the Support Guidelines and the Linear Guidelines, the SCC held that the statutory grant of authority in each case was extremely broad, and the respective Guidelines were intra vires and fell within a reasonable interpretation of the respective statutory delegates’ authority.
Key Takeaways
- The reasonableness standard set out in Vavilov governs challenges to the vires of subordinate legislation, such as rules, regulations or by-laws.
- While certain principles from Katz continue to inform the reasonableness review, when challenging subordinate legislation for vires, it is no longer necessary to show that they are “irrelevant”, “extraneous” or “completely unrelated” to the purpose of the enabling statute. The impact of this on future challenges to subordinate legislation remains to be seen, but it may provide more scope for challenging subordinate legislation.
- The burden is on the challenger to demonstrate the invalidity of the subordinate legislation. A reasonableness review of the vires of subordinate legislation involves assessing whether the decision bears the “hallmarks of reasonableness – justification, transparency and intelligibility”.
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