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Delegated Legislation - Ultra Vires Regulations (2)

. Innovative Medicines Canada v. Canada (Attorney General)

In Innovative Medicines Canada v. Canada (Attorney General) (Fed CA, 2022) the Federal Court of Appeal considered an important change (since Vavilov) in the conduct of judicial reviews alleging ultra vire regulations:
(7) How we should assess the regulation in issue in this case

[26] This Court’s decision in Portnov v. Canada (Attorney General), 2021 FCA 171 requires us to follow the methodology in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653 when assessing a challenge to the validity of regulations, not the methodology in Katz Group Canada Inc. v. Ontario (Health and Long‑Term Care), 2013 SCC 64, [2013] 3 S.C.R. 810. The appellants add that Portnov, a unanimous decision of this Court, binds future panels of this Court. In oral argument, the Attorney General did not disagree.

[27] I agree with the appellants and, thus, will assess the regulation following the methodology in Vavilov. Under our law concerning horizontal stare decisis, we are bound to follow Portnov unless we are persuaded it is manifestly wrong or it can be distinguished: Miller v. Canada (Attorney General), 2002 FCA 370, 220 D.L.R. (4th) 149; R. v. Sullivan, 2022 SCC 19, 413 C.C.C. (3d) 447. The Attorney General does not argue that Portnov is manifestly wrong and does not try to distinguish it.

[28] I note that some other courts have already applied Portnov, implicitly or explicitly, with approval: Le v British Columbia (Attorney General), 2022 BCSC 1146; Pacific Wild Alliance v. British Columbia (Forests, Lands, Natural Resource Operations and Rural Development), 2022 BCSC 904 at paras. 68-75. As well, considerable academic commentary suggests that Vavilov has overtaken Katz and so Portnov is good law: see, for example, John Mark Keyes, "“Judicial Review of Delegated Legislation—The Road Beyond Vavilov”" (2022) 35 C.J.A.L.P. 69; Mark Mancini and Martin Olszynski, "“Reviewing Regulations Post-Vavilov: Ecology Action Centre v Canada (Part II)”" in ABlawg (blog) (online: http://ablawg.ca/wp-content/uploads/2021/12/Blog_MM_MO_Ecology_Action_Centre_2.pdf); Paul Daly, "“Regulations and Reasonableness Review”" in Administrative Law Matters (online: https://www.administrativelawmatters.com/blog/2021/01/29/regulations-and-reasonableness-review/).

[29] Recently, the Alberta Court of Appeal has declined to follow Portnov: Auer v Auer, 2022 ABCA 375; TransAlta Generation Partnership v Alberta (Minister of Municipal Affairs), 2022 ABCA 381. The Alberta Court of Appeal suggests that Katz, not Vavilov, is the governing authority when we are dealing with regulations passed by the Governor in Council.

[30] This matters. Under Vavilov, as suggested in Portnov, we conduct reasonableness review of the decision to enact the regulation to change the comparator countries. Though the challenger bears the burden of proving that the decision is unreasonable under Vavilov, the challenger does not have to overcome a presumption the decision is reasonable. Under Katz, the challenger must overcome a presumption the regulation is valid: Katz at para. 25. It can be overcome only if the regulation is "“irrelevant”", "“extraneous”" or "“completely unrelated”" to the "“statutory purpose”": Katz at paras 24 and 28. Reasonableness review does not enter into the matter at all. This is a "“hyperdeferential”" test, one unique in all of administrative law: Daly, "“Regulations and Reasonableness Review”", above.

[31] In the expectation that the Supreme Court may one day consider the question whether Vavilov or Katz should apply to regulations, I wish to offer a few words, beyond those already given in Portnov, in further support of Portnov.

[32] Vavilov tells us (at para. 143) to look first to it for the methodology we should follow. It also tells us that earlier cases, like Katz, remain good law only if they are consistent with it: see also Portnov at para. 26. Katz is not consistent with Vavilov, as Portnov explains. This suggests that, as Portnov says, we must follow the methodology in Vavilov, not Katz.

[33] As well, the Supreme Court has recently doubled down on Vavilov in a way that supports Portnov: Law Society of Saskatchewan v. Abrametz, 2022 SCC 29, 470 D.L.R. (4th) 328. Before Abrametz, some thought that the Vavilov methodology applies only to administrators’ substantive decisions, not their procedural decisions. But in Abrametz, the Supreme Court applied the Vavilov methodology to an administrator’s procedural decision: see paras. 26-30. Evidently Vavilov applies to all administrative decisions, regardless of formal differences in their content. In fact, this trend has been underway for a long time. All sorts of administrative decisions, including many that create instruments said to be "“law”", have been reviewed under Vavilov or its predecessor, Dunsmuir v. New Brunswick, 2008 SCC 9, [2008] 1 S.C.R. 190), not Katz: Canadian National Railway Co. v. Canada (Attorney General), 2014 SCC 40, [2014] 2 S.C.R. 135 (orders-in-council enacted by the Governor in Council); Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2, [2012] 1 S.C.R. 5, Lucky Luc Carriage and Sleigh Service v. Montreal (City), 2022 QCCA 1610 at paras. 56-59, Colchester County (Municipality) v. Colchester Containers Limited, 2021 NSCA 53 at paras. 32-37, 1193652 B.C. Ltd. v. New Westminster (City), 2021 BCCA 176 at paras. 56-59 and 1120732 B.C. Ltd. v. Whistler (Resort Municipality, 2020 BCCA 101, 445 D.L.R. (4th) 448 at paras. 39 and 44-46 (municipal by-laws); West Fraser Mills Ltd. v. British Columbia (Workers’ Compensation Appeal Tribunal), 2018 SCC 22, [2018] 1 S.C.R. 635 (regulations made by an administrator); Green v Law Society of Manitoba, 2017 SCC 20, [2017] 1 S.C.R. 360 (rules made by an administrator). Just as the methodology in Vavilov applies to a whole range of administrative decisions, it applies to administrative decisions to make regulations.

[34] Portnov reminds us (at para. 23) that, in its real essence and true nature, a regulation is just like a municipal by-law, an order-in-council, an administrative rule, or an administrative ruling on the merits. Each creates compulsory obligations that, depending on what is being regulated, affect very many people or just a few. Each is the end-product of a substantive administrative decision made by an administrative decision-maker. Each is subject to constraints and limits imposed by the statutory regime. On its own terms, Vavilov says it applies to decisions of that very sort. Indeed, Vavilov (at para. 66) refers specifically to regulations (at least those made by an administrative decision-maker under delegated authority) and suggests that issues about their validity are closely connected to the interpretation of the regulation-making power, the review of which is done according to Vavilov: see also Canada (Canadian Human Rights Commission) v. Canada (Attorney General), 2018 SCC 31; [2018] 2 S.C.R. 230 at paras. 38 and 111.

[35] Regulations, municipal by-laws, orders-in-council, administrative rules and administrative rulings on the merits appear to be different from each other but only if we fasten onto differences in form: each has its own, distinct, formal label and each may have different, formal prerequisites for enactment. But in administrative law, in developing our methodologies, too often we have fastened onto differences in form. We have developed different rules for matters that, in their real essence and true nature, are substantially the same. The result? Unnecessary complexity, confusion and incoherence.

[36] Vavilov says this judicial fastening onto differences in form must stop. Complexity, confusion and incoherence must be replaced with simplicity, clarity and coherence: Vavilov, paras. 7 and 10. These are furthered if we use the same methodology—the methodology in Vavilov—to review matters that, in their real essence and true nature, are substantially the same.

[37] The majority of the Alberta Court of Appeal in Auer offers (at para. 63) the view that regulations, particularly those by the Governor in Council, are different and must be treated differently because they are "“law-making”". This harkens back to the law decades ago, now thoroughly discredited, that administrative decisions should be reviewed differently depending on whether they fall into the formal categories of "“legislative”", "“quasi-judicial”" or "“judicial”": see the cases cited in Portnov at paras. 21-22.

[38] That view also overlooks the fact that orders-in-council enacted by the Governor in Council, municipal by-laws, administrative rules and some administrative rulings on the merits are all instances of "“law-making”". And, as mentioned in paragraph 33 above, the Supreme Court has said that each of these instances of "“law-making”" are to be reviewed using Vavilov (or its predecessor, Dunsmuir), not Katz.

[39] I sympathize somewhat with the underlying motivation of the Supreme Court in Katz and the Alberta Court of Appeal’s application of Katz in the two recent cases: for good reasons based on the separation of powers between the judiciary and the executive, courts should not lightly interfere with decision-making by the Governor in Council, especially when its policy content is high. But the Supreme Court in the later case of Vavilov, sensitive to context, says the same thing. Under Vavilov, the broader the regulation-making power in a statute, particularly in matters of policy that are quintessentially the preserve of the executive, the less constrained the regulation-maker will be in enacting the regulation: Entertainment Software Association v. Society of Composers, Authors and Music Publishers of Canada, 2020 FCA 100, [2021] 1 F.C.R. 374 at para. 28 (applying Vavilov and earlier cases consistent with it), aff’d 2022 SCC 30.

[40] This is especially so for the Governor in Council. The Governor in Council is "“at the apex of the executive”", serves as "“the grand co-ordinating body for the divergent provincial, sectional, religious, racial and other interests throughout the nation”", and represents "“different geographic, linguistic, religious, and ethnic groups”": Canada (Citizenship and Immigration) v. Canadian Council for Refugees, 2021 FCA 72, 458 D.L.R. (4th) 125 at paras. 36-38. Thus, subject to limiting statutory language passed by our elected representatives, the Governor in Council’s regulation-making power is often relatively unconstrained. The key is the limiting statutory language. Vavilov goes straight to that key, focusing on what meanings the language of the regulation-making power can reasonably bear. Katz doesn’t. It focuses on matters of form, namely, the nature of the instrument being enacted, a regulation, and the maker of the instrument, the Governor in Council. Then it asks only one thing: whether the regulation, presumed to be valid, is so "“irrelevant”", "“extraneous”" or "“completely unrelated”" to the "“statutory purpose”" that it must be struck.

[41] This difference between Vavilov and Katz can lead to drastically different results. Take a regulation passed by the Governor in Council. Suppose it is not "“irrelevant”", "“extraneous”" or "“completely unrelated”" to the "“statutory purpose”". But suppose, for reasons based on statutory interpretation principles applied by courts for decades, it cannot be supported on any reasonable interpretation of the regulation-making power in the statute. Katz would allow the regulation to stay on the books. Vavilov would strike it down.

[42] With that circumstance in mind, we can see that preferring Vavilov over Katz is not about furthering judicial interventionism or being "“seduced by…[Portnov’s] reasoning”": Auer at paras. 61-63. It is about maintaining balance in the separation of powers and ensuring that all holders of public powers are accountable to the law: Canada (Citizenship and Immigration) v. Tennant, 2018 FCA 132 at paras. 23-24.

[43] Finally, so far, two academic commentaries criticize the recent decisions of the Alberta Court of Appeal and support Portnov: Paul Daly, "“Resisting which Siren’s Call?”" in Administrative Law Matters (blog) (online: https://www.administrativelawmatters.com/blog/2022/11/24/resisting-which-sirens-call-auer-v-auer-2022-abca-375-and-transalta-generation-partnership-v-alberta-minister-of-municipal-affairs-2022-abca-381/); Mark Mancini, "“Simplicity in the Law of Judicial Review of Regulations: Auer and TransAlta”" in Double Aspect (blog) (online: https://doubleaspect.blog/2022/11/27/simplicity-in-the-law-of-judicial-review-of-regulations-auer-and-transalta/).

(8) Applying the methodology in Vavilov (as Portnov suggests)

[44] Under Vavilov, the presumptive standard of review is reasonableness. When we conduct reasonableness review, we are to assess the constraints on the administrative decision-maker and whether the decision-maker has remained within them, with the focus on any reasons given by the decision-maker. The primary constraint on an administrative decision-maker is its empowering legislation. In this case, the empowering legislation is the regulation-making power in subsection 101(1) of the Patent Act, as understood in light of section 85 and the purposes underlying that section and the Act as a whole, as shaped by the constitutional limits of the federal power over patents. In this case, the Governor in Council had to interpret the scope of the regulation-making power and enact a regulation that, in its reasonable view, was within that power.
. Innovative Medicines Canada v. Canada (Attorney General)

In Innovative Medicines Canada v. Canada (Attorney General) (Fed CA, 2022) the Federal Court of Appeal considers the 'pith and substance' of a regulation for purposes of determining whether it was ultra vires or not:
[58] It is important not to confuse the motive, policy and politics behind a regulation with its pith and substance: Thorne’s Hardware Ltd. v. The Queen, 1983 CanLII 20 (SCC), [1983] 1 S.C.R. 106 at 112; Katz at paras. 27-28.

[59] Evidence of motive, policy and politics may be more relevant where a party alleges that the decision to enact a regulation, supposedly prompted by a legislatively authorized, constitutional purpose, is colourable. This is a most serious allegation: an artifice has been created to camouflage or disguise a true purpose that is beyond the legislative or constitutional authority of the decision-maker. This, "“incidentally”", seems to be the only basis for attacking regulations under Katz. It is a narrow one.

[60] To prove this, only the clearest evidence will suffice: for examples where the evidence was clear enough, see Roncarelli v. Duplessis, 1959 CanLII 50 (SCC), [1959] S.C.R. 121, 16 D.L.R. (2d) 689, Re Multi-Malls Inc. and Minister of Transportation and Communications (1977), 1976 CanLII 623 (ON CA), 14 O.R. (2d) 49, 73 D.L.R. (3d) 18 (C.A.), and Doctors Hospital v. Minister of Health et al. (1977), 1976 CanLII 739 (ON SC), 12 O.R. (2d) 164, 68 D.L.R. (3d) 220 (Div. Ct.). The Federal Court was not persuaded that the evidence was sufficiently persuasive to prove colourability, and neither should we.

[61] General aspirational statements offered by politicians, such as many of the statements about the government’s general policies or objectives the appellants offered in this case, offer little help. Caution must be exercised when relying on "“what some politicians may have said about [legislative purposes and motives] at some place, at some time, for whatever reason”": Alexion at para. 53, citing Schmidt v. Canada (Attorney General), 2018 FCA 55, [2019] 2 F.C.R. 376 at para. 31; see also Williams v. Canada (Public Safety and Emergency Preparedness), 2017 FCA 252, [2018] 4 F.C.R. 174, at paras. 50-51. This is especially so where the statements are made in politically fraught or controversial circumstances. The Supreme Court has observed that "“statements of purpose in the legislative record may be rhetorical and imprecise”" and "“[d]econtextualized statements by members of Parliament can be poor indicators of…purpose”": R. v. Sharma, 2022 SCC 39 at para. 89, citing Canada (Attorney General) v. Whaling, 2014 SCC 20, [2014] 1 S.C.R. 392 at paras. 67‑68 and R. v. Heywood, 1994 CanLII 34 (SCC), [1994] 3 S.C.R. 761, 120 D.L.R. (4th) 348 at 788 S.C.R.; see also Mohr v. National Hockey League, 2022 FCA 145 at para. 63. And, of course, statements by persons other than the administrative decision-maker, by themselves, say little about the purposes behind the decision, unless there is some persuasive tie to the decision-maker.
. TransCanada Pipelines Ltd. v. Ontario (Minister of Finance)

In TransCanada Pipelines Ltd. v. Ontario (Minister of Finance) (Div Court, 2022) the Divisional Court considered an ultra vires judicial review challenge to regulations under the Assessment Act:
[5] Regulations are subordinate legislation that reflect the policy choices of government. Regulations are presumed to be valid. However, a Minister’s powers to make regulations are not without limits. The Minister cannot thwart or undermine the purpose of the enabling legislation when making regulations: Padfield v. Minister of Agriculture, Fisheries and Food, [1968] A.C. 997 (UKHL) at 1060.

[6] The burden is on TransCanada to demonstrate the formula-setting provisions of O. Reg 282/98 are invalid: Katz Group Canada Inc. v. Ontario (Health and Long-Term Care), 2013 SCC 64 at para. 25. One way a regulation can be invalid is if it is inconsistent with the overall purpose of its enabling statute: Katz Group at para. 27; Wildlands League v. Ontario (Natural Resources and Forestry), 2016 ONCA 741 at para. 41. To show O. Reg 282/98 is inconsistent with the purpose of the Assessment Act, TransCanada must show the regulation is irrelevant, extraneous or completely unrelated to the statutory purpose of the Assessment Act: Katz Group, at para. 28; Royal Demaria Wine Co. v. Ontario (Lieutenant Governor in Council), 2018 ONSC 7525 (Div. Ct.) at para. 57.

[7] The presumption of validity requires this Court to favour an interpretation that reconciles the regulation with its enabling legislation so that, if possible, the regulation in dispute is found to be intra vires or within the Minister’s legal authority to make: Katz Group, at para. 25; Royal Demaria Wine Co. at para. 57. The Court must also use a broad and purposive approach when interpreting both the challenged regulation and its enabling statute: Katz Group at para. 26. The regulation and statute must also be read in their grammatical and ordinary sense, harmoniously with the scheme and object of the legislation and the intention of the Legislature.

[8] There are several factors that are not relevant to whether O. Reg 282/98 is ultra vires the Minister’s regulation-making powers. First, the merits of the government’s policy choices that animate the regulation are irrelevant to an assessment of the regulation’s validity: Wildlands, at para. 46. Second, the likelihood that the regulation will advance the Legislature’s policy goal is also irrelevant. Finally, the reason why the Minister made the regulation is also irrelevant.
. Covant v. College of Veterinarians of Ontario

In Covant v. College of Veterinarians of Ontario (Div Ct, 2021) the Divisional Court considered whether regulations, made by the College of Veterinarians [subject to Cabinet approval: s.7(1) Veterinarians Act] attracted a duty of procedural fairness - which it concluded they didn't. Interestingly paras 44-53 are essentially the court's argument that, even though the College did not owe such a duty, that they complied with it anyway:
[37] Dr. Covant takes the position that as a self-regulatory body, the College has a contractual relationship with its members, resulting in a duty of procedural fairness or natural justice, both at common law and under the Statutory Powers Procedure Act, R.S.O. 1990, c. S.22 (the “SPPA”), when making rules that affect its members. Dr. Covant submits that the College’s Council breached this duty by failing to provide its members with adequate notice and consultation regarding amendments to the General Regulation. Dr. Covant further submits that under the doctrine of legitimate expectations, he and other members had an expectation that they would receive notice and be consulted about amendments to the General Regulation, which would affect standards of practice, before such amendments were made.

[38] The College’s position is that the amendments to the General Regulation were properly enacted pursuant to its governing statute and that no duty of procedural fairness is owed in recommending and approving changes to the Regulation.

[39] Subsection 7(4) of the Veterinarians Act sets out the notice requirements where a regulation is made or amended, as follows:
(4) The Council shall,

(a) forward a copy of each regulation made under subsection (1) to each member of the College; and

(b) keep a copy of each regulation made under subsection (1) available for public inspection in the office of the College.
[40] Subsection 43(1) states that notice is sufficiently given if delivered personally or by mail.

[41] In my view, the panel correctly determined that the amendments to the General Regulation, including s. 33(2)(d), were properly enacted. The panel found that the College, in exercising its regulation-making function, did not owe Dr. Covant or its members, a duty of procedural fairness akin to the duty owed in a disciplinary proceeding. As long as the Council followed the statutory requirements of s. 7 of the Veterinarians Act, as addressed further below, the College was not required to take any additional steps to fulfil any common law or statutory duty of procedural fairness.

[42] As noted by the College, s. 3(2)(h) of the SPPA states that the Act does not apply to a proceeding “of a tribunal empowered to make regulations, rules or by-laws in so far as its power to make regulations, rules or by-laws is concerned.”

[43] In addition, the case law relied upon by the Appellant, both before the Discipline Committee and on appeal, does not support his position. In Chalmers v. Toronto Stock Exchange (1989), O.R. (2d) 532, 40 Admin. L.R. 311 (C.A.), the Ontario Court of Appeal held only that a tribunal’s discipline proceedings must comply with the SPPA. In McGill v. Brantford (City of) (1980), 1980 CanLII 1741 (ON SC), 28 O.R. (2d) 721, 111 D.L.R. (3d) 405(Div. Ct.), the court held that the SPPA did not apply to a council passing a by-law.Similarly, in Canadian Union of Public Employees v. Canada (Attorney General), 2018 FC 518, 49 Admin. L.R. (6th) 34, the Federal Court held that the regulation-making function did not engage the applicant’s procedural fairness rights.
. Covant v. College of Veterinarians of Ontario

In Covant v. College of Veterinarians of Ontario (Div Ct, 2021) the Divisional Court considered an issue of the ultra vires of regulations:
[25] In Katz Group Canada Inc. v. Ontario (Health and Long-Term Care), 2013 SCC 64, [2013] 3 S.C.R. 810, at para. 24, the Supreme Court of Canada held that a successful challenge to the vires of a regulation requires that it be shown to be inconsistent with the objective of the enabling statute or the scope of the statutory mandate. The court outlined the guiding principles for assessing whether a regulation is ultra vires, which were summarized by this court in Hudson’s Bay Company ULC v. Ontario (Attorney General), 2020 ONSC 8046, 154 O.R. (3d) 103, at para. 37, as follows:
• Regulations are presumed to be valid, which places the burden on the challengers to demonstrate invalidity. Courts are to favour an interpretive approach that, where possible, reconciles the regulation with its enabling statute so that it is construed in a manner which renders it intra vires;

• The challenged regulation and the enabling statute should be interpreted using a broad and purposive approach;

• Judicial review of a regulation is usually restricted to the issue of whether the regulation is consistent with the statutory purpose or whether a condition precedent was not met before the regulation was made;

• Courts are not to assess the policy merits of the regulation or to decide whether it is “necessary, wise or effective in practice”;

• The motives for making a regulation are irrelevant;

• Under-inclusiveness is not a valid ground for challenging a regulation as ultra vires; and

• A regulation must be “irrelevant”, “extraneous” or completely inconsistent with the statutory purpose to be found ultra vires.
. McNeeley v. Canada

In McNeeley v. Canada (Fed CA, 2021) the Federal Court of Appeal resolved an apparent paramountcy conflict between a statute and a regulation:
[29] In Friends of the Oldman River Society v. Canada (Minister of Transport), 1992 CanLII 110 (SCC), [1992] 1 S.C.R. 3, at page 38, Justice La Forest, writing on behalf of the Supreme Court of Canada, confirmed that regulations (which are subordinate legislation) cannot conflict with their parent legislation:
The basic principles of law are not in doubt. Just as subordinate legislation cannot conflict with its parent legislation (Belanger v. The King (1916), 1916 CanLII 87 (SCC), 54 S.C.R. 265), so too it cannot conflict with other Acts of Parliament (R. & W. Paul, Ltd. v. Wheat Commission, [1937] A.C. 139 (H.L.)), unless a statute so authorizes (Re Gray (1918), 1918 CanLII 533 (SCC), 57 S.C.R. 150). Ordinarily, then, an Act of Parliament must prevail over inconsistent or conflicting subordinate legislation. However, as a matter of construction a court will, where possible, prefer an interpretation that permits reconciliation of the two. …
[30] In this case, it is not possible to reconcile the two provisions as they apply to the D2L Employee Trust. The D2L Employee Trust fulfills both the requirements to be an employee benefit plan and a prescribed trust. The tax consequences for the D2L Employee Trust and the appellants are significantly different based on the classification of the D2L Employee Trust as an employee benefit plan or a prescribed trust. However, since the definition of an employee benefit plan is set out in the Act and since the definition of a prescribed trust is set out in the Regulations, the paramountcy of the definition of an employee benefit plan in the Act must govern. Otherwise, the Act would be amended by the Regulations if an arrangement, such as the one in this appeal, is not an employee benefit plan as defined in the Act because it is also a prescribed trust as defined in the Regulations.
. Portnov v. Canada (Attorney General)

In Portnov v. Canada (Attorney General) (Fed CA, 2021) the Federal Court of Appeal (Stratas JA) chose to follow Vavilov, rather than Katz (SCC, 2013), for guidance on determining when a regulation is ultra vires. The decision hinges on equating regulation-making with administrative decision-making [paras 29-56]:
B. Reviewing regulations

[18] The Attorney General agrees that Mr. Portnov wants to end the continuing effect of the 2019 Regulations. He says that to accomplish that, Mr. Portnov must satisfy a special rule for attacking regulations. The rule is found in Katz Group Canada Inc. v. Ontario (Health and Long‑Term Care), 2013 SCC 64, [2013] 3 S.C.R. 810.

[19] There are three parts to the Katz rule: (1) when a party challenges the validity of regulations, the party bears the burden of proof; (2) to the extent possible, regulations must be interpreted so that they accord with the statutory provision that authorizes them; and (3) the party must overcome a presumption that the regulations are valid. On the third part, Katz suggests (at paras. 24 and 28) that the presumption is overcome only where the regulations are "“irrelevant”", "“extraneous”" or "“completely unrelated”" to the objectives of the governing statute. A leading commentator on Canadian administrative law calls this "“hyperdeferential”": Paul Daly, "“Regulations and Reasonableness Review”" in Administrative Law Matters, (29 January 2021), . I agree.

[20] The first two parts of the Katz rule are well-accepted, judge-made principles. The third part—the presumption and the very narrow ways it can be rebutted—is more controversial. In my view, later jurisprudence from the Supreme Court, particularly Vavilov, has overtaken it.

[21] The presumption of validity and the very narrow ways it can be rebutted were first introduced into Canadian law at a time when "“legislative”" decisions (e.g., Alaska Trainship Corp. v. Pacific Pilotage Authority, 1981 CanLII 175 (SCC), [1981] 1 S.C.R. 261, 120 D.L.R. (3d) 577 at p. 274 S.C.R.) or decisions of "“public convenience and general policy”" (e.g., Thorne’s Hardware Ltd. v. The Queen, 1983 CanLII 20 (SCC), [1983] 1 S.C.R. 106, 143 D.L.R. (3d) 577 at p. 111 S.C.R.) could not be set aside unless "“jurisdiction”" was lost through some rare and significant error. These included "“egregious”" exceedance of authority (see e.g. Thorne’s Hardware and Alaska Trainship), pursuit of an improper purpose (Re Doctors Hospital and Minister of Health (1976), 1976 CanLII 739 (ON SC), 12 O.R. (2d) 164, 68 D.L.R. (3d) 220 (Div. Ct.)) and the taking into account of wholly irrelevant considerations. Tellingly, in developing the third part of the rule, Katz relies upon all of the cases in this paragraph—cases based on concepts of "“jurisdiction”"—and later cases that rely on them.

[22] Over the last half-century, the role of "“jurisdiction”" as a controlling idea in Canadian administrative law has been on the decline, along with the concomitant need for challengers to show exceedance of authority, improper purpose or the taking into account of wholly irrelevant considerations. Concepts of "“patent unreasonableness”" and "“reasonableness”" and, later, just "“reasonableness”" have been in the ascendancy. By 2008, only a last small vestige of "“jurisdiction”" remained—correctness review on "“true questions of jurisdiction”" such as the vires of regulations: Dunsmuir at para. 59, citing United Taxi Drivers’ Fellowship of Southern Alberta v. Calgary (City), 2004 SCC 19, [2004] 1 S.C.R. 485. In 2019, Vavilov eradicated that last vestige. Thus, the third part of the Katz rule is an artefact from a time long since passed.

[23] So how should we go about reviewing regulations today? We must begin by reminding ourselves that in answering questions like that we should concentrate on real substance, not superficial form: Canadian Council for Refugees; JP Morgan. In substance, regulations, like administrative decisions and orders, are nothing more than binding legal instruments that administrative officials decide to make—in other words, they are the product of administrative decision-making. This suggests that the proper framework for reviewing regulations must be the one we use to review the substance of administrative decision-making: see e.g. Terrigno v. Calgary (City), 2021 ABQB 41, 21 Alta. L.R. (7th) 376.

[24] Indeed, many Supreme Court cases considering regulations and subordinate legislation during the Dunsmuir era used that very framework, not the framework in Katz: see e.g. Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2, [2012] 1 S.C.R. 5; Green v. Law Society of Manitoba, 2017 SCC 20, [2017] 1 S.C.R. 360; West Fraser Mills Ltd. v. British Columbia (Workers’ Compensation Appeal Tribunal), 2018 SCC 22, [2018] 1 S.C.R. 635; see also the analysis in John Mark Keyes, "“Judicial Review of Delegated Legislation: The Long and Winding Road to Vavilov”", (18 June 2020), .

[25] Today, the framework for reviewing the substance of administrative decision-making is Vavilov. It is intended to be sweeping and comprehensive—a "“holistic revision of the framework for determining the applicable standard of review”" (at para. 143). We are to draw upon Vavilov, not cases like Katz: we must "“look to [""the] reasons [in ""Vavilov""] first in order to determine how [Vavilov’s] general framework applies to [a] case”" (ibid.).

[26] Vavilov offers us even more justification for not following Katz. Vavilov instructs us (at para. 143) that cases under the now-discarded category of "“true questions of jurisdiction”"—of which Katz is one—"“will necessarily have less precedential force”". As well, in the course of its discussion abolishing the category of "“true questions of jurisdiction”", Vavilov mentions that there are "“cases where 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”" (at para. 66) yet makes no attempt to carve out a special rule for regulations: see also the analysis in Morris v. Law Society of Alberta (Trust Safety Committee), 2020 ABQB 137, 12 Alta. L.R. (7th) 189 at para. 40; TransAlta Generation Partnership v. Regina, 2021 ABQB 37 at para. 46.

[27] More fundamentally, Vavilov instructs us to conduct reasonableness review of all administrative decision-making unless one of three exceptions leading to correctness review applies. This applies to regulations as a species of administrative decision-making: Federal Court’s reasons at para. 23; 1120732 B.C. Ltd. v. Whistler (Resort Municipality), 2020 BCCA 101, 445 D.L.R. (4th) 448 at para. 39. For good measure, Vavilov cites Green and West Fraser with approval—cases that conducted reasonableness review without applying the Katz rule: see paragraph 24, above. Finally, the Katz rule applies across-the-board to all regulations regardless of their content or context. This sits uneasily with Vavilov which adopts a contextual approach to reasonableness review.

[28] Thus, in conducting reasonableness review, I shall not apply Katz. I shall follow Vavilov.


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Last modified: 29-01-23
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