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JR - SOR - Exception - Ultra Vires Delegated Legislation (2). Auer v. Auer [modifies Katz at para 32, 41-49]
In Auer v. Auer (SCC, 2024) the Supreme Court of Canada dismissed an appeal of a JR, here challenging the Federal Child Support Guidelines as ultra vires their Governor-in-Counsel-delegated Divorce Act authority.
The court considers the SOR of JRs of ultra vires 'subordinate legislation', here Divorce Act 'guidelines' (and notes that in Vavilov "this Court ceased to recognize jurisdictional questions — also referred to as “true questions of jurisdiction or vires” — as a distinct category of questions attracting correctness review"), and modifies the prior Katz line of ultra vire regulation cases:[22] In setting out Vavilov’s comprehensive framework, our Court expressly contemplated questions of vires. Specifically, this Court ceased to recognize jurisdictional questions — also referred to as “true questions of jurisdiction or vires” — as a distinct category of questions attracting correctness review (paras. 65‑67 and 200). In doing so, we expressly referred to cases involving challenges to the vires of subordinate legislation, including Green v. Law Society of Manitoba, 2017 SCC 20, [2017] 1 S.C.R. 360, and West Fraser Mills Ltd. v. British Columbia (Workers’ Compensation Appeal Tribunal), 2018 SCC 22, [2018] 1 S.C.R. 635 (Vavilov, at para. 66). This Court explained that “it is often difficult to distinguish between exercises of delegated power that raise truly jurisdictional questions from those entailing an unremarkable application of an enabling statute”, especially where, as in Green and West Fraser Mills, “the legislature has delegated broad authority to an administrative decision maker that allows the latter to make regulations in pursuit of the objects of its enabling statute” (Vavilov, at para. 66, citing Canada (Canadian Human Rights Commission) v. Canada (Attorney General), 2018 SCC 31, [2018] 2 S.C.R. 230, at para. 111, per Brown J., concurring).
[23] Vavilov’s framework applies to determining the standard for reviewing the vires of subordinate legislation. Vavilov set out a comprehensive framework for determining the applicable standard of review and, in doing so, contemplated questions of vires.
C. Reasonableness Is the Presumptive Standard for Reviewing the Vires of Subordinate Legislation
[24] Vavilov’s framework established a presumption of reasonableness review. It set out limited exceptions where the legislature has indicated that it intends a different standard to apply or where the rule of law requires that the correctness standard be applied (para. 17). The questions for which the rule of law requires that the correctness standard be applied include: (1) constitutional questions that require a final and determinate answer from the courts; (2) general questions of law of central importance to the legal system as a whole; and (3) questions related to the jurisdictional boundaries between two or more administrative bodies (para. 53).
[25] No exception to the presumption of reasonableness review applies in this case. The legislature has not indicated that the GIC’s decision to establish the Child Support Guidelines must be reviewed on a standard other than reasonableness, nor does the rule of law require that the correctness standard be applied to a vires review of the Child Support Guidelines.
[26] In Vavilov, our Court explained that the rule of law does not require that questions of vires, in themselves, be reviewed for correctness (paras. 67‑69 and 109; see also J. M. Keyes, Executive Legislation (3rd ed. 2021), at pp. 171‑72). A robust reasonableness review is sufficient to ensure that statutory delegates act within the scope of their lawful authority (Vavilov, at paras. 67‑69 and 109). Further, when explaining that reasonableness review can be conducted even in the absence of reasons, our Court cited Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2, [2012] 1 S.C.R. 5, and Green, both of which involved a review of the vires of subordinate legislation (Vavilov, at para. 137).
[27] All of this indicates that Vavilov’s robust reasonableness standard is the default standard when reviewing the vires of subordinate legislation (Keyes (2021), at p. 171; see also Keyes (2022); P. Daly, A Culture of Justification: Vavilov and the Future of Administrative Law (2023), at pp. 146‑47; M. P. Mancini, “One Rule to Rule Them All: Subordinate Legislation and the Law of Judicial Review” (2024), 55 Ottawa L. Rev. 245). However, in exceptional cases, a vires review may engage a question that the rule of law requires be reviewed for correctness. In such cases, the presumption of reasonableness review may be rebutted. For example, a challenge to the validity of subordinate legislation on the basis that it fails to respect the division of powers between Parliament and provincial legislatures would require that the correctness standard be applied.
[28] Reviewing the vires of the Child Support Guidelines does not engage a question that the rule of law requires be reviewed for correctness. Accordingly, the presumptive standard of reasonableness applies in this case.
D. What Is the Role of Katz Group?
(1) Many of the Principles From Katz Group Continue To Apply
[29] In Katz Group, our Court upheld the validity of Ontario regulations adopted by the Lieutenant Governor in Council that aimed to control the price of prescription drugs. Justice Abella, writing for our Court, did not discuss the applicable standard of review. However, she outlined the following principles for assessing the vires of subordinate legislation:. “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” (para. 24);
. “Regulations benefit from a presumption of validity . . . . This presumption has two aspects: it places the burden on challengers to demonstrate the invalidity of regulations . . . and it favours an interpretive approach that reconciles the regulation with its enabling statute so that, where possible, the regulation is construed in a manner which renders it intra vires” (para. 25 (emphasis deleted));
. “Both the challenged regulation and the enabling statute should be interpreted using a ‘broad and purposive approach . . . consistent with the Court’s approach to statutory interpretation generally’” (para. 26, quoting United Taxi Drivers’ Fellowship of Southern Alberta v. Calgary (City), 2004 SCC 19, [2004] 1 S.C.R. 485, at para. 8);
. “This inquiry does not involve assessing the policy merits of the regulations to determine whether they are ‘necessary, wise, or effective in practice’” (para. 27, quoting Jafari v. Canada (Minister of Employment and Immigration), 1995 CanLII 3592 (FCA), [1995] 2 F.C. 595 (C.A.), at p. 604). “It is not an inquiry into the underlying ‘political, economic, social or partisan considerations’” or an assessment of whether the regulations “will actually succeed at achieving the statutory objectives” (para. 28, quoting Thorne’s Hardware Ltd. v. The Queen, 1983 CanLII 20 (SCC), [1983] 1 S.C.R. 106, at pp. 112‑13);
. The regulations “must be ‘irrelevant’, ‘extraneous’ or ‘completely unrelated’ to the statutory purpose to be found ultra vires on the basis of inconsistency with statutory purpose” (para. 28). [30] For convenience, I will refer to the final principle as the “irrelevant”, “extraneous” or “completely unrelated” threshold.
[31] In setting out Vavilov’s comprehensive framework for determining the applicable standard of review, our Court did not entirely discard prior jurisprudence. Rather, the Court explicitly stated that “past precedents will often continue to provide helpful guidance” (para. 143). This remains true even when considering cases involving “true questions of jurisdiction or vires”, though they “will necessarily have less precedential force” because Vavilov ceased to recognize such questions as a distinct category attracting correctness review (paras. 65 and 143). As Paul Daly explains, “past jurisprudence has not been ‘ousted’” by Vavilov ((2023), at pp. 148‑49, citing Terrigno v. Calgary (City), 2021 ABQB 41, 1 Admin. L.R. (7th) 134, at para. 62). Since Katz Group involved a true question of jurisdiction or vires, the Court must carefully examine the role of that case going forward.
[32] In my view, all of the above‑mentioned principles in Katz Group, except for the “irrelevant”, “extraneous” or “completely unrelated” threshold, remain good law and continue to inform the review of the vires of subordinate legislation. As I will explain, the significant sea change brought about by Vavilov in favour of a presumption of reasonableness as a basis for review erodes the rationale for the “irrelevant”, “extraneous” or “completely unrelated” threshold, and maintaining this threshold would perpetuate uncertainty in the law. Accordingly, there is sound basis for a narrow departure from Katz Group (see Canada (Attorney General) v. Power, 2024 SCC 26, at paras. 98 and 209; R. v. Kirkpatrick, 2022 SCC 33, at para. 202, per Côté, Brown and Rowe JJ., concurring). Otherwise, Katz Group continues to “provide valuable guidance on the application of the reasonableness standard” (Daly (2023), at p. 148). To the extent that the principles in Katz Group do not conflict with Vavilov, they “are to form part of the application of the reasonableness standard” (p. 149).
[33] For greater clarity, the principle that subordinate legislation “must be consistent both with specific provisions of the enabling statute and with its overriding purpose or object” continues to apply when conducting a vires review (References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11, [2021] 1 S.C.R. 175, at para. 87; see also Vavilov, at paras. 108 and 110; Reference re Impact Assessment Act, 2023 SCC 23, at para. 283, per Karakatsanis and Jamal JJ., dissenting in part, but not on this point). The principle that subordinate legislation benefits from a presumption of validity also continues to apply (Canadian Council for Refugees v. Canada (Citizenship and Immigration), 2023 SCC 17, at para. 54). Further, the challenged subordinate legislation and the enabling statute should continue to be interpreted using a broad and purposive approach (Green, at para. 28; West Fraser Mills, at para. 12). Finally, 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”. Courts are to review only the legality or validity of subordinate legislation (West Fraser Mills, at para. 59, per Côté J., dissenting, but not on this point; La Rose v. Canada, 2023 FCA 241, 488 D.L.R. (4th) 340, at para. 26; see also Mancini, at p. 276).
[34] These well‑established principles are consistent with Vavilov, and they should continue to be applied in accordance with the foundational common law principle of stare decisis.
[35] As explained, Vavilov recognized the continued relevance and application of prior jurisprudence insofar as that jurisprudence is consistent with Vavilov’s framework for determining the appropriate standard of review and its principles governing robust reasonableness review. Nothing in Vavilov contradicts the principles that: (1) subordinate legislation “must be consistent both with specific provisions of the enabling statute and with its overriding purpose or object”, (2) the challenged subordinate legislation and the enabling statute are to be interpreted using a broad and purposive approach to statutory interpretation and (3) a review of the vires of subordinate legislation does not involve assessing policy merits.
[36] The principle that subordinate legislation benefits from a presumption of validity has been criticized by some for being inconsistent with Vavilov (see Portnov v. Canada (Attorney General), 2021 FCA 171, [2021] 4 F.C.R. 501, at paras. 20‑22; Innovative Medicines Canada v. Canada (Attorney General), 2022 FCA 210, 8 Admin. L.R. (7th) 44, at para. 30). However, this criticism is mistaken.
[37] In Katz Group, our Court explained that this presumption has two aspects: (1) “it places the burden on challengers to demonstrate the invalidity of [subordinate legislation]”; and (2) “it favours an interpretive approach that reconciles the [subordinate legislation] with its enabling statute so that, where possible, the [subordinate legislation] is construed in a manner which renders it intra vires” (para. 25 (emphasis in original)).
[38] The first aspect — that the burden is on challengers to demonstrate the invalidity of subordinate legislation — is uncontroversial. Indeed, in Vavilov, our Court explained that where an administrative decision is reviewed for reasonableness, “[t]he burden is on the party challenging the decision to show that it is unreasonable” (para. 100).
[39] The second aspect — that, where possible, subordinate legislation should be construed in a manner that renders it intra vires — is also consistent with Vavilov. This aspect does not heighten the burden that challengers would otherwise face pursuant to Vavilov. The burden on challengers depends on the applicable standard of review. If the reasonableness standard applies, to overcome the presumption of validity, challengers must demonstrate that the subordinate legislation does not fall within a reasonable interpretation of the delegate’s statutory authority. If the correctness standard applies, challengers can overcome the presumption of validity by demonstrating that the subordinate legislation does not fall within the correct interpretation of the delegate’s statutory authority.
[40] All of these principles from Katz Group, including the principle that subordinate legislation benefits from a presumption of validity, have been repeatedly affirmed by our Court (see Vavilov, at paras. 108 and 110; References re Greenhouse Gas Pollution Pricing Act, at para. 87; Reference re Impact Assessment Act, at para. 283; Canadian Council for Refugees, at para. 54; Green, at para. 28; West Fraser Mills, at paras. 12 and 59). In these circumstances, it would be inconsistent with the common law tradition and the principle of stare decisis to discard Katz Group and the continued application of these principles.
(2) The “Irrelevant”, “Extraneous” or “Completely Unrelated” Threshold Is No Longer Relevant
[41] Writing for a majority of the Court of Appeal, Pentelechuk J.A. held that the vires of the Child Support Guidelines was to be reviewed on the basis of the “irrelevant”, “extraneous” or “completely unrelated” threshold, instead of on the reasonableness standard in accordance with Vavilov. I disagree. As I explain in this section, 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. This threshold from Katz Group is now out of step with these principles; maintaining it would perpetuate uncertainty in the law. Accordingly, the “irrelevant”, “extraneous” or “completely unrelated” threshold does not provide a standalone rule for a vires review.
[42] Justice Pentelechuk distinguished between “true regulations”, which create law through the exercise of a legislative function, such as those passed by the GIC, and “bylaws, rules, and regulations made by administrative tribunals or municipal governments” (paras. 20 and 34). She held that the vires of “true regulations” are not to be reviewed on the reasonableness standard; rather, the appropriate test is whether they are “irrelevant”, “extraneous” or “completely unrelated” to the purpose of their enabling statute, as outlined in Katz Group. By contrast, the vires of bylaws, rules and regulations made by administrative tribunals or municipal governments are to be reviewed for reasonableness (para. 82). In making this distinction, Pentelechuk J.A. relied on the fact that “true regulations” are subject to a “consultation process culminating in parliamentary review” while “bylaws, rules, and regulations made by administrative tribunals or municipal governments” are not (para. 34).
[43] According to Pentelechuk J.A., the appropriate standard for reviewing the vires of subordinate legislation depends on the identity of the decision maker who enacted it. I disagree. The identity of the decision maker does not determine the standard of review. “Regulations ‘derive their validity from the statute which creates the power, and not from the executive body by which they are made’” (Canadian Council for Refugees, at para. 51, citing Reference as to the Validity of the Regulations in relation to Chemicals, 1943 CanLII 1 (SCC), [1943] S.C.R. 1, at p. 13). In Vavilov, our Court noted the “sheer variety of [administrative] decisions and decision makers” and yet confirmed that reasonableness is a single standard that takes account of this diversity (para. 88).
[44] To summarize, unless the legislature has indicated otherwise or if a matter invokes an issue pertaining to the rule of law which would require a review on the basis of correctness, the vires of subordinate legislation are to be reviewed on the reasonableness standard regardless of the delegate who enacted it, their proximity to the legislative branch or the process by which the subordinate legislation was enacted. Introducing these distinctions into the standard of review framework would be “contrary to the Vavilovian purposes of simplification and clarity” (P. Daly, Resisting which Siren’s Call? Auer v Auer, 2022 ABCA 375 and TransAlta Generation Partnership v Alberta (Minister of Municipal Affairs), 2022 ABCA 381, November 24 2022 (online); Daly (2023), at p. 147).
[45] In concurring reasons, Feehan J.A. held that while the vires of subordinate legislation are to be reviewed for reasonableness pursuant to Vavilov, the “irrelevant”, “extraneous” or “completely unrelated” threshold informs that analysis. He explained that the presumption that subordinate legislation is valid may “be overcome if the regulation is ‘irrelevant’, ‘extraneous’ or ‘completely unrelated’ to the objectives of governing statutes” (para. 123(b)). The chambers judge was of a similar view (see paras. 17 and 78). I reject this approach. The “irrelevant”, “extraneous” or “completely unrelated” threshold should not inform reasonableness review under the Vavilov framework. This is because that threshold is inconsistent with robust reasonableness review under that framework and because maintaining it would undermine Vavilov’s promise of simplicity, predictability and coherence.
[46] Reasonableness review ensures that courts intervene in administrative matters where it is truly necessary to do so to safeguard the legality, rationality and fairness of the administrative process (Vavilov, at para. 13). While reasonableness review “finds its starting point in the principle of judicial restraint and demonstrates a respect for the distinct role of administrative decision makers”, “[i]t remains a robust form of review” (ibid.). By contrast, the “irrelevant”, “extraneous” or “completely unrelated” threshold connotes a very high degree of deference, one that is inconsistent with the degree of scrutiny required under a reasonableness review (see British Columbia (Attorney General) v. Le, 2023 BCCA 200, 482 D.L.R. (4th) 20, at para. 94).
[47] This inconsistency is of particular importance when considering “the concern that an administrative decision maker might interpret the scope of its own authority beyond what the legislature intended” (Vavilov, at para. 109; see also para. 68). In Vavilov, our Court explained that robust reasonableness review is “capable of allaying [this] concern” and allows “courts to fulfill their constitutional duty to ensure that administrative bodies have acted within the scope of their lawful authority” (paras. 67 and 109). By contrast, the very high degree of deference that the “irrelevant”, “extraneous” or “completely unrelated” threshold accords statutory delegates in interpreting their authority under their enabling statute does not adequately address this concern. This is demonstrated by Abella J.’s comment that it would take an “egregious case” to strike down subordinate legislation on the basis that it is “irrelevant”, “extraneous” or “completely unrelated” to the purpose of its enabling statute (Katz Group, at para. 28, citing Thorne’s Hardware, at p. 111).
[48] Further, Vavilov sought to bring simplicity, predictability and coherence to the analysis for determining the appropriate standard of review. Our Court noted that reasonableness is a single standard that applies in different contexts (para. 89). Vavilov’s objective of providing simplicity, predictability and coherence would be undermined if different tests, such as the “irrelevant”, “extraneous” or “completely unrelated” threshold, applied as part of the reasonableness standard. Even if different tests were sufficiently robust, the mere fact of applying them would create undue complexity and fragmentation (Keyes (2022), at pp. 75‑76; see also Innovative Medicines Canada, at para. 35).
[49] Ultimately, we should depart from the “irrelevant”, “extraneous” or “completely unrelated” threshold established in Katz Group because its rationale was eroded by Vavilov and because continuing to maintain it would “create or perpetuate uncertainty in the law” (Vavilov, at para. 20; Minister of Indian Affairs and Northern Development v. Ranville, 1982 CanLII 202 (SCC), [1982] 2 S.C.R. 518, at p. 528).
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