On November 8, 2024, the Supreme Court of Canada ruled that Vavilov reasonableness applies where regulations and bylaws are challenged.
In Auer v Auer, 2024 SCC 36 and TransAlta Generation Partnership v Alberta, 2024 SCC 37, the Supreme Court of Canada held that subordinate legislation is to be reviewed on a standard of reasonableness. Subordinate legislation typically refers to regulations, bylaws or other legally binding rules that are not made by Parliament or a provincial legislature. They are instead enacted by another entity using the authority granted to it by Parliament or a provincial legislature.
Both appeals concerned whether the reasonableness standard of review established in Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 applied to subordinate legislation – or whether the more deferential standard established in Katz Group Canada Inc. v Ontario (Health and Long‑Term Care), 2013 SCC 64 continues to govern. The Auer and TransAlta decisions confirm Vavilov’s application and provide guidance to litigants on how to challenge (or defend challenges to) this type of instrument.
Background
In 2019, the Supreme Court of Canada recalibrated and clarified the law respecting standard of review in Vavilov. After years of confusion and inconsistency, the Supreme Court confirmed that a reasonableness standard of review presumptively applies to judicial reviews of administrative decisions in all cases.
Vavilov did not specifically address the standard of review applied where subordinate legislation is being challenged on judicial review. It instead concerned the judicial review of a decision of the Canadian Registrar of Citizenship.
However, the Supreme Court had previously addressed how Courts should approach challenges to such legislation in its 2013 decision in Katz. In Katz, the Court established that subordinate legislation benefits from a presumption of validity and can only be set aside in narrow circumstances. Vavilov did not address Katz, or comment on whether Katz continued to govern where subordinate legislation was challenged. As a result, since Vavilov, Courts across Canada have taken inconsistent approaches when reviewing subordinate legislation – some applying Katz, others applying Vavilov.
Supreme Court confirms Vavilov applies
Given the inconsistent and differing approaches taken by the appellate Courts, the Supreme Court grappled with the relationship between Vavilov and Katz in the Auer and TransAlta decisions.
The Supreme Court affirmed that the Vavilov reasonableness standard presumptively applies where someone is challenging the vires (the legality) of subordinate legislation. Essentially, the guiding question is whether the subordinate legislation is reasonable. This is different from the Katz review where subordinate legislation could only be overturned as inconsistent with the purpose of the enabling legislation where it was irrelevant, extraneous or completely unrelated to that purpose.
Despite applying the Vavilov framework to the review of subordinate legislation, the Supreme Court confirmed that certain principles from Katz remained applicable. In particular:
- Subordinate legislation benefits from a presumption of validity, meaning (a) it is the person challenging the legislation that must show they are invalid; and (b) where possible, subordinate legislation should be construed in a manner that renders it intra vires;
- The challenged subordinate legislation and the enabling statute must be interpreted using a broad and purposive approach;
- Subordinate legislation can be successfully challenged by showing that it is inconsistent with the objective of the enabling legislation or the scope of the statutory mandate; and
- Subordinate legislation cannot be challenged for being unnecessary, unwise or ineffective in practice. Judicial review is not an inquiry into the underlying political, economic, social or partisan considerations behind the regulations, and Courts may only review the legality or validity of subordinate legislation.
Instead, subordinate legislation can be challenged for not bearing the hallmarks of reasonableness (justification, transparency and intelligibility) or for not being justified in relation to the relevant factual and legal constraints that bear on the legislation. Two types of fundamental flaws can make subordinate legislation unreasonable: (1) a failure of rationality internal to the reasoning process; or (2) the legislation is untenable in light of the factual and legal constraints that bear on it.
In applying its new framework, in Auer, the Supreme Court of Canada found that the Federal Child Support Guidelines were reasonable. The Governor in Council had extremely broad statutory authority to establish guidelines respecting child support, and the Federal Child Support Guidelines respected all relevant legal constraints. In TransAlta, the Supreme Court of Canada similarly concluded that the 2017 Alberta Linear Property Assessment Minister’s Guidelines were reasonable. The enabling legislation entitled the Minister, by necessary implication, to discriminate against TransAlta such that the Guidelines were intra vires.
Key takeaways
Auer and TransAlta are significant decisions for any person looking to challenge or defend subordinate legislation. They reconcile Vavilov and Katz, and establish how Courts will review the legality of such legislation. They confirm that, fundamentally, challenges to subordinate legislation involve interpreting the statute to ensure a decision-maker has acted within the scope of its lawful authority.
Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.