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Judicial Review - SOR - Exception - Ultra Vires Regulations. Humberplex Developments Inc. v. Ontario (AG)
In Humberplex Developments Inc. v. Ontario (AG) (Div Court, 2024) the Divisional Court dismissed a JR, here of "O.Reg. 382/19, which amended O.Reg. 303/19: Transition for Planning Act Appeals" under the Local Planning Appeal Tribunal Act, 2017 on ultra vires grounds. "The amending regulation reimposed the more restrictive procedural regime that previously applied to appeals of municipal planning decisions heard by the Ontario Land Tribunal (the “Tribunal”). Under the amending regulation, the more restrictive regime was reimposed only on appeals solely by third party appellants.".
Here the court considers (but does not resolve: see para 45) the JR SOR for a matter of ultra vires regulations - and in the course of that canvasses some of the substantive law of ultra vire regulations:IV. Jurisdiction and standard of review
[34] This judicial review application relates to the exercise or purported exercise of a statutory power, which includes the power to make a regulation. Therefore, the Divisional Court has jurisdiction to hear this application: Judicial Review Procedure Act, R.S.O. 1990, c. J.1, ss. 1, 2, 6(1).
[35] The standard for assessing regulations upon judicial review is a matter of controversy in recent case law.
[36] In Katz Group Canada Inc. v. Ontario (Health and Long-Term Care), 2013 SCC 810, [2013] 3. S.C.R. 810, at para. 24, the Supreme Court held that 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”. Following that approach, “the focus of judicial review of a regulation is narrow. It is not the role of the court to decide whether [a regulation] is effective, overly broad or unduly restrictive. These are policy choices made by the Ontario government….”: Hudson’s Bay Company ULC v. Ontario (Attorney General), 2020 ONSC 8046, 154 O.R. (3d) 103 (Div. Ct.), at para. 4.
[37] Under Katz, the role of the court upon review is limited to assessing whether the regulation is (a) consistent with the objective of its enabling statute, and (b) within the scope of the statutory mandate: Katz, at para. 24; Hudson’s Bay, at para. 37. As set out in Hudson’s Bay, at para. 37 (citing the relevant paragraphs in Katz), the following principles apply:(a) Regulations are presumed to be valid. This means that challengers have the burden of demonstrating that the regulations are invalid. In addition, courts are to favour an interpretation 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 in original].
(b) “Both the challenged regulation and the enabling statute should be interpreted using a ‘broad and purposive approach . . . consistent with this Court's approach to statutory interpretation generally’” (para. 26).
(c) Judicial review of a regulation is usually restricted to the issue of whether the regulation is inconsistent with the purpose of the enabling statute or whether a condition precedent was not met before the regulation was made (para. 27).
(d) Courts are not to assess the policy merits of a regulation or to decide whether it is “necessary, wise, or effective in practice” (para. 27).
(e) The motives for making a regulation are irrelevant (para. 27).
(f) Under-inclusiveness is not a valid ground for challenging a regulation as ultra vires (para. 40).
(g) Regulations must be “irrelevant”, “extraneous” or completely inconsistent with the statutory purpose to be found ultra vires. It would take an “egregious” case to strike a regulation down as ultra vires (para. 28). [38] Since deciding Katz in 2013, the Supreme Court revisited the issue of standard of review for administrative decisions in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653. At paras. 23-25, 32, the court stated that reasonableness is the presumptive standard on judicial review applications in the absence of clear legislative intent, a constitutional question, or a question of law of central importance to the legal system as a whole.
[39] In Vavilov, the court did not specifically address whether the reasonableness presumption applied to assessing regulations. However, at para. 111, the court cited Katz (at paras. 45-48) with approval for the principle that “an administrative decision maker interpreting the scope of its regulation-making authority in order to exercise that authority cannot adopt an interpretation that is inconsistent with applicable common law principles regarding the nature of statutory powers”. Citing Vavilov, at para. 111, the Divisional Court in Hudson’s Bay, at para. 39, rejected the submission that Vavilov changed the test for challenging regulations to require reasonableness assessment.
[40] Since Vavilov, other Canadian appellate courts have considered whether that decision had the effect of changing the standard of review for regulations.
[41] In Portnov v. Canada (Attorney General), 2021 FCA 171, 461 D.L.R. (4th) 130, the Federal Court of Appeal (per Stratas J.A.) found that the reasonableness standard applies to review of regulations, displacing the Katz framework. In Innovative Medicines Canada v. Canada (Attorney General), 2022 FCA 210, the Federal Court of Appeal followed Portnov. The British Columbia Court of Appeal also applied reasonableness standard in British Columbia (Attorney General) v. Le, 2023 BCCA 200, and 1120732 B.C. Ltd. v. Whistler (Resort Municipality), 2020 BCCA 101, 445 D.L.R. (4th) 448.
[42] The Alberta Court of Appeal took the opposite approach. In Auer v. Auer, 2022 ABCA 375, leave to appeal granted, [2023] S.C.C.A. No. 38, the appeal court held that the the test articulated in Katz remains the appropriate test to apply when the vires of a regulation is being challenged, and that this test has neither been overtaken nor modified by Vavilov. In TransAlta Generation Partnership v. Alberta (Minister of Municipal Affairs), 2022 ABCA 381, leave to appeal granted, [2023] S.C.C.A. No. 135, the Alberta Court of Appeal followed the approach taken in Auer. The Supreme Court of Canada has granted leave to appeal both Alberta decisions. The appeals are scheduled to be heard together on April 25, 2024.
[43] In Sul v. St. Andrews (Rural Municipality), 2023 MBCA 25, 479 D.L.R. (4th) 160, the Manitoba Court of Appeal also considered whether the presumptive standard of reasonableness in Vavilov applied to assessing the vires of legislative action in the form of municipal by-laws and resolutions. In the decision under review in Sul, the application judge applied the reasonableness standard of review, adopting the joint position of the parties to the application: Sul, at para. 10. On appeal, the appellant changed her position, arguing that the application judge erred in applying the reasonableness standard: Sul, at paras. 16, 19. The appeal court, at para. 19, noted that the “law regarding the standard of review to be applied to the vires of legislative action is also evolving” and, at paras. 20-36 undertook a review of recent case law, including reference to Katz, Vavilov, Portnov, Innovative Medicines, Whistler and Auer.
[44] In Sul, at para. 37, the appeal court ultimately decided that it was “not prepared to state that the application judge erred in choosing to apply the reasonableness standard”, noting that applying either standard of review argued in that case “leads to the same result.” The court also stated that given “the developing jurisprudence and the lack of comprehensive argument” before the court, the issue was “better left to be decided in a future case”.
V. Regulation validity: O. Reg. 382/19 was inter vires
[45] As explained below, I have concluded that O. Reg. 382/19 was a valid exercise of the Attorney General’s statutory power under s. 43.1 of the LPATA. That conclusion would be the same whether the governing authority for determining the standard of review is Katz or Vavilov. Therefore, as in Sul, it is not necessary determine the standard of review issue currently before the Supreme Court of Canada in Auer and TransAlta. At paras 46-81 the court walks through these amended provisions in the course of an actual proceeding, dispelling the argument that they were ultra vires as regulations.
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