The Supreme Court of Canada’s landmark decision in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 (“Vavilov”) changed the law of judicial review in Canada. It changed it so fundamentally that the Supreme Court specifically warned lawyers, lower courts, and the public that pre-Vavilov decisions were to be regarded with some caution and that courts should look to the decision in Vavilov for guidance first.
This warning came into focus with the debate waging in provincial appellate courts and the Federal Court of Appeal on the proper approach to judicial review of subordinate legislation, rules enacted by an administrative decision-maker acting under the authority of legislation. This debate focused on whether a pre-Vavilov decision, Katz Group Canada Inc. v. Ontario (Health and Long-Term Care), 2013 SCC 64 (“Katz”), which adopted a hyper deferential approach to judicial review of subordinate legislation, was still the right approach after Vavilov.
In Auer v. Auer, 2024 SCC 36 (“Auer”), and its companion case, TransAlta Generation Partnership v. Alberta, 2024 SCC 37 (“TransAlta”), the Supreme Court of Canada confirmed that Katz’s topline approach of hyper deference is inconsistent with Vavilov and must consequently be discontinued.
The Court’s revised approach to challenging subordinate legislation will make challenging subordinate legislation somewhat easier, though significant judicial caution is still built into the law.
Background
Vavilov was a directional change in the approach to judicial review. In simple terms, Vavilov established robust reasonableness as the presumptive standard of review, except where the legislator indicated otherwise, or if the rule of law requires it. Instating a “culture of justification”, Vavilov identified the reasons of the decision-maker as the starting point for the application of the reasonableness standard by the courts, in cases where reasons are required.
Subordinate legislation, such as regulations, by-laws, rules and ministerial orders makes up a sizable proportion of all legislation in Canada and directly affects the lives of many Canadians. Yet, Vavilov did not specifically address how its review framework and reliance on a culture of justification would apply to subordinate legislation, which often is not accompanied by formal reasons.
Katz was decided in 2013. It established a hyper-deferential standard of review for subordinate legislation, in particular subordinate legislation promulgated by the executive. In the wake of the “sea change” occasioned by Vavilov, it remained to be determined whether Vavilov completely supplanted Katz, or whether elements of Katz remained good law.
Some cases, including two judgments from the Federal Court of Appeal [1] and one from the Court of Appeal for British Columbia [2] held that Vavilov completely supplanted Katz. Others, notably the majority reasons of the Court of Appeal of Alberta in Auer and TransAlta, held that Vavilov did not apply to subordinate legislation, and that, at the very least, executive subordinate legislation should be given more deference by the courts.
Such direct debate between the nation’s appellate courts is rare. The Supreme Court of Canada evidently decided that the tempest needed resolution; it granted leave to appeal in Auer and TransAlta.
The Supreme Court Clarifies the Approach to Judicial Review of Subordinate Legislation
In a (happily) unanimous judgment penned by Côté J., the Supreme Court of Canada clarified the proper approach to review of subordinate legislation as well as the relationship between Vavilov and Katz. Three key points emerge.
1. Vavilov’s robust reasonableness standard is the presumptive standard for reviewing the vires of subordinate legislation
The Court confirmed what many had suspected: Vavilov’s reasonableness standard is the presumptive standard for reviewing the vires of subordinate legislation.
The "Vavilovian" system of judicial review for reasonableness is “robust”. It “asks 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”.
In the context of a challenge to the lawfulness of subordinate legislation, it requires the challenging party to show that the subordinate legislation does not reasonably fall within the scope of the delegation of authority under the legislation, having regard for the statutory text, its context, and purpose.
A reasonableness review here does not look at whether rules promulgated are themselves reasonable or a good idea. It simply asks whether the decision-maker’s interpretation of the statutory regulation making power was reasonable.
The Court also confirmed that a reasonableness review applies to all subordinate legislation, regardless of the delegate who enacted it, their proximity to the legislative branch, or the process by which it was enacted. In other words, a reasonableness review applies equally to regulations, ministerial orders, by-laws, and rules.
In addressing the fact that subordinate legislation often does not come with formal reasons, the Court reiterated that Vavilov contemplated that reasonableness review is possible in the absence of reasons, referring to the record and to context as potential tools available to the courts.
2. In a marked departure from Katz, for subordinate legislation to be found ultra vires, it no longer needs to be irrelevant, extraneous or completely unrelated to the purpose of the enabling legislation
The Court explicitly departed from Katz’s hyper deference. The Court stated that the standard identified in that case – the “irrelevant”, “extraneous” or “completely unrelated” – no longer applies to the review of subordinate legislation. In simple terms: it was too deferential and inconsistent with the degree of scrutiny required under Vavilov.
Maintaining this threshold in the face of the significant sea change brought about by Vavilov would perpetuate uncertainty in the law, would be inconsistent with the robust reasonableness review detailed in Vavilov, and would undermine Vavilov’s promise of simplicity, predictability and coherence.
3. Nevertheless, the other principles from Katz, including the presumption of validity of subordinate legislation, remain good law
The Court did not throw the Katz baby out with the bathwater, however. It kept much if not most of the framework from that case to inform its new combined approach to reviewing subordinate legislation. In particular, the Court confirmed that the following principles from Katz continue to have purchase under Auer.
First, 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.
Second, the principle that subordinate legislation benefits from a presumption of validity also continues to apply. This presumption means that the burden is on the challenger of the legislation to show it is unlawful. The presumption also means that courts are to favour 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 lawful.
Third, the challenged subordinate legislation and the enabling statute should continue to be interpreted using a broad and purposive approach.
Fourth, the Court confirmed a key continuing legacy from Katz: courts cannot assess the policy merits of 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.
Much of the resistance to applying the Vavilovian system of judicial review to subordinate legislation had been focussed on this aspect, claiming that the Vavilovian approach would violate the principle of separation of powers because the courts would be examining the policy merits of the subordinate legislation. The Court addressed such criticism head on, explaining that potential or actual consequences of the subordinate legislation are relevant only insofar as a reviewing court must determine whether the statutory delegate was reasonably authorized to enact subordinate legislation that would have such consequences.
The Future of the Auer Approach to Challenges to Subordinate Legislation
The Court’s decision in Auer brings clarity and consistency to the law. It shows the enduring power of the “sea change” in administrative law that was Vavilov. More than five years out, the decision continues to bend other threads of jurisprudence to its centre of gravity.
The decision will make judicial review of subordinate legislation easier. This is almost mathematically true because the words used in the Katz test made it nearly impossible. Vavilov reasonableness review is generally considered to be more exacting on administrative decisions. Judicial review may now be brought to allege that a decision-maker misunderstood, in an unreasonable way, their rule making powers and made an invalid rule. Review also extends beyond simply an interpretive exercise. It will also involve challenges to the reasons provided for the enactment of the subordinate legislation, which often will need to be deduced from the circumstances and pulled from different sources. In all cases, applying that same “robust” approach to subordinate legislation will mean more challenges will be brought and more may succeed under Auer compared to Katz.
But the test is not dramatically easier. Vavilov reasonableness review is still a deferential standard. And there are still a number of important burdens on a challenger of subordinate legislation. The Court’s embrace of a presumption of validity will mean there is ample space for judicial caution. The presumption permits courts to strive for a way to reconcile the subordinate legislation with its enabling legislation, where possible. Further, the prohibition on challenging subordinate legislation for its policy wisdom will cut off many challenges at the knees. Courts are also instructed to read rule-making powers broadly and purposively. These directions will have an impact on lower courts’ analysis. Challenges to subordinate legislation will still be difficult. Successes will still be rare.
[1] Portnov v. Canada (Attornet General), 2021 FCA 171; Innovative Medicines Canada v. Canada (Attorney General), 2022 FCA 210.
[2] British Columbia (Attorney General) v. Le, 2023 BCCA 200.
