Reasonable regulation

The Supreme Court’s decision in Canada (Minister of Citizenship and Immigration) v. Vavilov¹ reordered the judicial review landscape by entrenching reasonableness as the standard of review for most cases and by making reasonableness review a more searching and “robust” exercise than in the past. While Vavilov closed many of the routes to “correctness” review left open by the previous leading case², it also lessened the burden on applicants seeking substantive review of administrative action to argue for correctness, reducing the amount of ink and court time used to argue about the standard of review.

But Vavilov left some questions unanswered or ambiguous, including whether the new reasonableness standard applies to the review of regulations. Regulations stand out from other administrative decisions because they often have the appearance of statutes. But regulations are not statutes. They are an executive exercise of delegated statutory authority, like other administrative action. Still, Supreme Court jurisprudence prior to Vavilov treated review of regulations differently from other decisions of statutory delegates. The judgment in Katz Group Canada Inc. v. Ontario (Health and Long‑Term Care) applied a hyper-differential standard, under which a regulation could only be invalidated for strict questions of vires, i.e. being “completely unrelated” to the statutory purpose.³ Vavilov did away with vires review and replaced it with a broad reasonableness approach. Which applies to review of regulations?

Most courts and commentators seem to agree that, after Vavilov, reasonableness applies to regulation review, but some hold that Katz continues to govern. This paper surveys the arguments on both sides and concludes that there is a principled and doctrinal basis to apply reasonableness to review of regulations. In addition, there has been little focus in the recent jurisprudence on another “traditional” ground of review mentioned only in passing in Katz and not at all in Vavilov: review for failure to comply with a statutory condition precedent. This is a separate ground of review form vires and is particularly amenable to reasonableness because it usually involves analyzing a factual record and reasons. Conditions precedent for regulations are prevalent in environmental matters, yet courts reviewing those regulations seem to struggle with the standard of review. For the sake of clarity and the rule of law, they should embrace Vavilovian reasonableness.

Approaches to review before Vavilov

Persistent questions about how deferential courts ought to be when conducting regulatory review are understandable considering the rather contradictory nature of “subordinate legislation.” It is, on one hand, an expression of the sovereign will of Parliament which has legislated to enable the details of a statutory scheme to be worked out flexibly and in accordance with its purposes. On the other hand, regulatory rules may be what truly gives the legislation its meaning, and in that sense are often more consequential than the enactment itself. For instance, in the environmental space, a statute may specify that a given substance is prohibited except where the regulations so permit, meaning that it is the regulation rather than the statute which truly dictates when and whether people will be exposed the harmful effects of toxic substances.⁴ Especially where a grant of discretion is broad, regulation making may involve extensive discretionary rule-making with less accountability and public deliberation than the legislative process. In those cases, it may be cold comfort to regulated parties and the public that the regulator has stayed strictly within its statutory grant of authority. They may justifiably expect more fulsome justification for the rules to which they are subject. The beneficiaries of regulation may equally seek justification for rules meant to protect against harm. To turn again to the environmental example: in a regulatory decision permitting use of harmful chemicals, the public has an interest in rule-making that considers relevant information and makes a rational determination for well-articulated reasons. This is especially true because the public ability to challenge a regulation is limited by doctrines restricting standing.⁵

Notwithstanding the tension inherent in regulation-making between Parliamentary sovereignty and justification, the traditional position in the jurisprudence has been that regulations are reviewable “on the ground that the authority conferred by the Act was exceeded.”⁶ Driedger analogizes that principle to one applying to statutes in a federal jurisdiction: “If the statute confers the power, the regulation is valid; if the statute has not conferred the power, then the regulation is ultra vires.”⁷ The analogy is instructive: in “division of powers” cases the Court will “classify” the legislation by determining its “pith and substance,” or true purpose and effects, then “categorize” it into one or more heads of power under the Constitution assigned to either the provinces of federal government.⁸ Absent from such vires review is any inquiry as to the substantive rationality of the impugned legislation or the justification given for its enactment. In effect, a strict vires approach to regulation review affords as much deference to Parliament’s delegates as it does Parliament itself.

The Supreme Court’s approach in Katz

In Katz, the Supreme Court made its leading pronouncement endorsing the deferential review of regulations for vires. The case concerned regulations promulgated under two Ontario statutes that prohibited certain practices thought to have an inflationary effect on the price of prescription drugs. Pharmacy operators challenged the regulations as being ultra vires on the grounds that they were inconsistent with the purpose and mandate of the enabling statutes. In adjudicating the challenge, the Court articulated the following principles that govern vires review:

• 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.⁹ To be found ultra vires, a regulation must be “irrelevant,” “extraneous” or “completely unrelated” to the statutory purpose. The Court commented that, although it is possible to strike down regulations as ultra vires on this basis, “it would take an egregious case to warrant such action.”¹⁰
• Regulations benefit from a presumption of validity. This presumption has two aspects: it places the burden on challengers to demonstrate the invalidity of regulations, rather than on regulatory bodies to justify them, and it favours an interpretative 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. ¹¹
• Both the challenged regulation and the enabling statute should be interpreted using a “broad and purposive approach.”¹²

The approach in Katz makes plain where the Supreme Court, as it was then constituted, stood on the balance between protecting Parliamentary sovereignty and fostering a culture of justification in regulation-making. The Court’s version of vires review means that any regulation with a plausible connection to its enabling statute would pass muster, and the Court is not only to presume the validity of the regulation but to perform judicial acrobatics to fit the regulation into the statutory purpose, even where the regulator has provided no such justification or the and the link may be tenuous. This approach effectively absolved regulators from any requirement to justify their actions.

Since the regulations at issue in Katz did not involve a statutory condition precedent, that aspect of regulatory review was not squarely addressed. However, the Court did cite a passage from a judgment of the Ontario Court of Appeal that acknowledges compliance with conditions precedent is an independent ground of review, separate from the vires analysis.¹³

Vavilov and its aftermath

The Supreme Court’s 2019 decision in Vavilov took up the challenge of upholding Parliamentary sovereignty while ensuring accountability for those empowered to implement its laws. The court characterized judicial review as a tool to “maintain the rule of law while giving effect to legislative intent” and affirmed “the need to develop and strengthen a culture of justification in administrative decision making.”¹⁴ This re-orientation towards justification diminished the previous emphasis on expertise as a basis for deference to administrative actors.¹⁵ Instead, it is incumbent on the administrative decision maker to demonstrate through its reasons “that a given decision was made by bringing that institutional expertise and experience to bear.”¹⁶

The centrality of reasons and justification led the Court to elevate reasonableness to the default standard of review. The Court described reasonableness as a more “robust” form of review than previously thought, imbuing it with some features that were formerly considered part of correctness review. Most notably, reasonableness review now incorporates the previous correctness category of reviewing decisions for vires – the administrative actor exceeding its legislative jurisdiction. This change was required because of the inherently “slippery” nature of vires review: “in theory, any challenge to an administrative decision can be characterized as ‘jurisdictional’ in the sense that it calls into question whether the decision maker had the authority to act as it did.”¹⁷ Since challenges to regulations have traditionally been considered to be wholly an exercise in determining vires, the implication from Vavilov is that regulations are also under the new reasonableness tent, which is “both robust and responsive to context.”¹⁸

Vavilov itself does not address whether and how the new reasonableness standard applies to review of regulations, but it does leave some clues. In discussing the tension between “true” questions of jurisdiction and mere administrative applications of a governing statute, the Court commented that “this tension is perhaps clearest in 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.”¹⁹ Further, in discussing constraints on a decision maker’s discretion on a reasonableness standard, the Court invoked the example of an administrative decision maker interpreting the scope of its regulation-making authority in order to exercise that authority. The court emphasized that the administrator “cannot adopt an interpretation that is inconsistent with applicable common law principles regarding the nature of statutory powers,” citing Katz in support of the proposition.²⁰

The Supreme Court’s invocation of regulation making authority in the discussion of the nature and application of “robust” reasonableness review, together with the elimination of vires as a distinct concept in judicial review, signals that the Vavilov framework now covers challenges to regulations. The federal courts, some provincial courts, and many lawyers and academics commentators agree. However, Vavilov does have its detractors when it comes to reviewing regulations.

The courts grapple with reasonableness and regulations

In Portnov v. Canada (Attorney General),²¹ the Federal Court of Appeal became the first appellate court to confirm that Vavilovain reasonableness applies to review of regulations. The case challenged regulations made under the Freezing Assets of Corrupt Foreign Officials Act²² restricting or prohibiting dealings with certain property held by designated individuals, in response to a request from Ukraine. Mr. Pornov was one of the designated individuals. The respondent attorney general argued that Mr. Portnov’s burden was to satisfy the vires criteria under Katz. Justice Statas agreed that some rules from Katz – that the challenging party bears the burden of proof, and that the extent possible regulations must be interpreted so that they accord with their authorizing statutory provisions – remain valid. But he found that Katz’s presumption of regulatory validity, and the very narrow grounds it prescribed to overcome that presumption, are no longer good law in light of Vavilov and the declining role of “jurisdiction” as a controlling idea in Canadian administrative law.²³ Today, review of regulations concentrates on “real substance, not superficial form” since “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.”²⁴ The proper framework for reviewing regulations is the same as that used to review the substance of other administrative decision-making, which today is that set out in Vavilov.²⁵ Justice Stratas also highlights Vavilov’s nods to administrative decision making, and its instruction that “cases under the now-discarded category of ‘true questions of jurisdiction’—of which Katz is one—'will necessarily have less precedential force.’”²⁶

In applying reasonableness review to the regulations at issue, the Justice Stratas grappled with the difficult problem of access to a record, including the all-important reasons for decision that inform the analysis under Vavilov, in the context of Cabinet regulation-making. He found that “reasoned explanations can often be found in the text of the legal instruments… prior legal instruments related to it and any associated Regulatory Impact Analysis Statements.”²⁷ The broader context for the regulations, in this case government policy on international democracy and anti-corruption, is also relevant to understanding the level of constraint on the regulator which informs the reasonableness of its actions.²⁸ A countervailing contextual consideration is the impact of the regulation upon those regulated: the Governor in Council must have some defensible reason consistent with the purposes of the Act to subject them to the regulations.²⁹ In this case, the Court upheld the regulations as reasonable.

It did not take long for a rejoinder to Portnov to surface in the case law. In Auer v. Auer,³⁰ and a substantive endorsement of that judgment in TransAlta Generation Partnership v. Alberta (Minister of Municipal Affairs),³¹ the Alberta Court of Appeal found that Katz remains the applicable standard for regulatory review. In Auer, a challenge to the Federal Child Support Guidelines made under the Divorce Act,³² the appellant challenger argued that Vavilov applied over Katz. The respondent Attorney General of Canada agreed that Vavilov applied but argued that the reasonableness standard of review is “contextualized” by Katz which remains applicable.³³ The court went further than either party, finding that Vavilov has no applicability at all. Justice Pentelechuk helpfully summarized her discussion of the issues as follows:

• There is a distinction between administrative decision-making and legislative action; specifically, the creation of law through promulgation of regulations by the Governor in Council. Enacting a regulation is therefore not a “decision” in the Vavilov sense and applying the Vavilov reasonableness approach is not analytically sound.
• Nothing in Vavilov evidences an intention to overrule or modify the Katz Group test; to conclude that Vavilov did so implicitly is inimical to the Supreme Court’s stated goals and reasoning in Vavilov.
• The Vavilov reasonableness standard of review does not apply neatly to a vires challenge of Governor in Council regulations; the reasoning in Vavilov is fundamentally unsuited to the review of regulations.
• Vires is not a question of jurisdiction as defined by Vavilov and remains a free-standing ground of review.³⁴

Before proceeding to discuss the impact of Vavilov, Justice Pentelechuk fairly concedes that, even in the pre-Vavilov world, the Supreme Court had not been entirely consistent about whether vires review or reasonableness review governed regulatory challenges. In three cases involving statutory delegates enacting subordinate legislation, the Supreme Court indicated that the standard of reasonableness – though somewhat modified –applied.³⁵ However, none of these cases dealt with what Justice Pentelechuk considered to be “true regulations”: those passed by the Governor in Council. Those, she argues, are distinguishable from other administrative decisions and are tested for vires under Katz.³⁶

Justice Pentelechuk makes a distinction between “vires” as used in the context of the scope of regulatory authority, and “jurisdiction” as used in the context of administrative action. She takes issue with the decision in Portnov for conflating the two terms and argues that it is the latter (jurisdictional questions in administrative action) that Vavilov abolishes, while review for vires of Cabinet regulations was left untouched.³⁷ Further, she holds that many of the considerations Vavilov sets out as relevant for reasonableness review (the evidence before the decision maker and facts of which the decision maker may take notice; the submissions of the parties; the past practices and decisions of the administrative body; and the potential impact of the decision on the individual to whom it applies) do not apply to Cabinet regulations.³⁸

On a principled level, Justice Pentelechuk believes that regulations are akin to lawmaking, and that reasonableness review of such “laws” is akin to attacking a statute for anything other than constitutional compliance.³⁹ Here she relies on Mikisew Cree First Nation v Canada (Governor General in Council)⁴⁰ for the proposition that the legislative function (which for her includes regulations) is not subject to judicial review by the courts. To hold otherwise, for her, would be to trample on the division of powers between courts and legislatures. In TransAlta, a different bench of the Alberta Court of Appeal extends the holding in Auer to apply to Ministerial regulations as well as those promulgated by the Governor-in Council, but it does not grapple with the distinction Justice Pentelechuk makes between Cabinet regulations and other types of rulemaking which do attract reasonableness review. The court seems to assume that ministerial regulations fall into the first category.

Just days after the judgments in Auer and TransAlta, Justice Stratas of the Federal Court of Appeal, who also authored Portnov, had the opportunity for a rebuttal in Innovative Medicines Canada v. Canada (Attorney General).⁴¹ Like Katz, this was a challenge to regulations dealing with the high price of prescription medications. Justice Stratas addresses the arguments in Auer that Cabinet regulations are substantially different than other administrative decisions (and indeed are not administrative decisions at all but “law making”) such that Vavilov cannot apply. He characterizes the apparent differences as formal rather than substantive, since 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.”⁴² Treating them differently leads only to unnecessary complexity, confusion and incoherence.⁴³ While Justice Stratas sympathizes with the argument that courts should not lightly interfere with decision-making by the Governor in Council, especially when its policy content is high, he notes that Vavilov “sensitive to context, says the same thing.”⁴⁴ Reasonableness review takes into account the breadth of the regulation-making power, focusing on what meanings the language of statute can reasonably bear.⁴⁵

The British Columbia Court of Appeal recently endorsed Portnov and Innovative Medicines.⁴⁶ The Ontario Divisional Court took the opposite view in a decision released before Portnov, holding that there is no support for the argument Vavilov “has changed the test for challenging regulations and that courts must now assess regulations on a standard of reasonableness.”⁴⁷ Two other cases found they did not have to determine the question of which standard of review applied but considered that the question is unsettled and may have to be clarified in a future Supreme Court case.⁴⁸ This will happen shortly, as the Supreme Court has granted leave to appeal in Auer and TransAlta.⁴⁹

Is reasonableness right for regulations?

Behind the critiques of those who argue that Vavilov is a poor “fit” for the review of delegated legislation lies the assumption that regulators, particularly Cabinet, are neither required nor equipped to give reasons. In addition to the judgments in Auer and TransAlta at least one academic commentator, former Federal Court of Appeal Justice John Evans, has opined “that reasons given by a decision maker when a court is conducting a reasonableness review does not apply when reasons are neither required nor given, as is normally the case for delegated legislation.”⁵⁰ This view accords to statutory delegates the same degree of deference reserved for the sovereign, i.e. the Crown acting through Parliament.

Cabinet ministers are powerful, but they are not sovereign. Cabinet ministers enjoy privilege for their deliberations, but there is no corresponding privilege shielding them from justifying actions resulting from those deliberations. Responding to the clear need for public transparency in its decisions, Cabinet often explains itself when it regulates via regulatory impact statements, which Justice Stratas included as part of the record in Portnov.⁵¹

In addition, most regulations go through a process governed by the Statutory Instruments Act⁵² consisting of consultations and postings in the Canada Gazette.⁵³ This generates a record which should be available to litigants and to the court on judicial review. For instance, the Supreme Court of British Columbia recently ordered production of a record in a judicial review of Cabinet regulations.⁵⁴ The regulations at issue phased out all mink farming operations in British Columbia, citing the risk that the industry poses to public health. Since this was argued before the British Columbia Court of Appeal decision adopting Portnov, the Crown argued that Katz vires review applied while the petitioners argued for Vavilov reasonableness. The motions judge left that issue for trial and, on the basis that the petitioner may wish to make “broader arguments” based on Vavilov, ordered the Crown to produce a record consisting of:

documents in their possession or control reflecting the information and submissions that were directly or indirectly considered by Cabinet in making the impugned decision, unless continuing to withhold those documents is found to be justified under the [public interest immunity] test.”⁵⁵

In a “culture of justification” concerned with holding decision-makers accountable to regulated parties and the beneficiaries of regulation, Cabinet should presumptively disclose the record upon which it relied in making a regulation and justify any withholding of documents in accordance with the law concerning confidentiality of Cabinet deliberations. Such confidentiality is not absolute, but limited to situations where the court is satisfied that the public interest in keeping the document confidential outweighs the public interest in its disclosure.⁵⁶ The “public interest” in disclosure of documents includes promoting accountability of officials through reasonableness review. Contrary to the fears of Vavilov’s detractors, a court’s reference to the context in which a regulation was made does not mean that it will “review the wisdom or desirability of legislative policy choices.”⁵⁷ Rather, it assists the Court in understanding whether the regulation “can be supported on any reasonable interpretation of the regulation-making power in the statute.”⁵⁸ This would be impossible under the Katz framework, which is only concerned with regulations that are “irrelevant”, “extraneous” or “completely unrelated” to the statute.

Vavilov admits that applying its reasonableness approach, which prioritizes the decision maker’s justification for its decisions, can be challenging in cases in which formal reasons have not been provided because the decision-making process does not easily lend itself to producing a single set of reasons.⁵⁹ In fact, the court uses a case of delegated legislation to illustrate the point: where a municipality passes a bylaw.⁶⁰ Even in those cases, “the reasoning process that underlies the decision will not usually be opaque. It is important to recall that a reviewing court must look to the record as a whole to understand the decision, and that in doing so, the court will often uncover a clear rationale for the decision.”⁶¹

Where no reasons have been provided and neither the record nor the larger context sheds light on the basis for the decision, reasonableness review is in uncertain but not uncharted territory. Even before Vavilov, the Supreme Court applied reasonableness review to orders-in-council, another form of Cabinet decision making that do not readily admit of reasons and a record.⁶² In reviewing an order-in-council for reasonableness, the Court distinguished Katz on the basis that, unlike cases involving challenges to the vires of regulations, the Governor in Council was acting in an “adjudicative” rather than “legislative” capacity.⁶³ However, as the Federal Court of Appeal has observed, Cabinet is fundamentally not an adjudicative body. It “lacks the necessary hallmarks associated with adjudicative bodies: public hearings, ability to summon witnesses and compel production of documents and the receipt of submissions by interested parties.”⁶⁴ Whether its actions are characterized as adjudicative or legislative, the fundamental character of Cabinet is the same. It remains an executive actor making administrative determinations, which it can choose to either justify or not. Cabinet’s choice in that regard should not affect the standard of review applied to its actions. For the purposes of judicial review, it is difficult to draw any meaningful distinction between an order-in-council and a regulation. Indeed, courts continue to use the Vavilov reasonableness framework to review orders-in-council.⁶⁵

Vavilov suggests that, where reasons and a meaningful record are absent, “the reviewing court must still examine the decision in light of the relevant constraints on the decision maker in order to determine whether the decision is reasonable.”⁶⁶ The court concedes that “it is perhaps inevitable that without reasons, the analysis will then focus on the outcome rather than on the decision maker’s reasoning process” and insists that “this does not mean that reasonableness review is less robust in such circumstances, only that it takes a different shape.”⁶⁷ The prospect of outcome-based review of delegated legislation makes proponents of different regulatory review uneasy, concerned that it will mean delving into the policy merits of regulations which is beyond the ken of courts.⁶⁸ As Paul Daly and Mark Mancini have explained, this concern is founded on a misunderstanding of the term “merits” as used in judicial review, which does not refer to policy concerns but to the substance of administrative decisions as opposed to process.⁶⁹

Still, it remains unclear what “shape” reasonableness review takes where there is no apparent justification for the regulation. To be sure, an absence of justification might put the regulatory authority on the back-foot, leaving it more vulnerable to arguments that the regulation does not fit into a reasonable interpretation of its enabling statute. The regulation may equally be found unreasonable if the applicant can show that a relevant consideration that was before the regulatory authority that has gone unaddressed. Both indicia of unreasonableness will be magnified where the outcome would otherwise prejudice the legitimate rights of regulated parties, as was the case in Le.⁷⁰ An outcome-based review would also consider the impact of the regulation on its intended beneficiaries, judged in view of the purposes of the enabling statute and the scope and limitations it sets on the regulatory authority. Of course, if the regulation satisfies the more exacting ultra vires framework, it will obviously meet the reasonableness standard as well.⁷¹

Review for compliance with conditions precedent

While strict vires review was the default position in pre-Vavilov jurisprudence, regulations could also be reviewed for failure to comply with statutory conditions precedent. These arise where a statute prescribes conditions which must be satisfied before a given power can be exercised.⁷² At common law, the failure to comply with a statutory condition precedent is a fatal jurisdictional defect and the resulting regulation is invalid.⁷³ Reasonableness is an appropriate and necessary approach for review of regulations for compliance with a condition precedent because they involve consideration of legal and factual matters that contextualize the decision. Indeed, the documents said to satisfy conditions precedent often constitute reasons that are an important part of the justification for the decision.

There are three types of conditions precedent: requirement to consult, “jurisdictional facts,” and necessity.

Requirements to consult specify people or organizations entitled to consultation before the statutory authority regulates. In the case of Indigenous peoples, this requirement has constitutional status such that the failure to consult before regulating with respect to potential impacts on aboriginal rights and title will invalidate the regulation even in the absence of any specific statutory duty. Where the consultation is outside of the Indigenous context, it often requires one Minister to consult one or more of his or her Cabinet colleagues or departments, or with their counterparts in a different order of government.⁷⁴ In other cases, consultation with private associations or groups is required.⁷⁵ Consultations with governments or private parties may be evasive of review except by the entities privy (or not) to such consultations, which poses a problem for public interest litigants who may wish to challenge a public regulation on this basis. More amenable to review are requirements to consult the public. Courts will intervene to ensure that some meaningful consultation took place or at least that the regulating authority made such consultation possible.⁷⁶

Requirements for “jurisdictional facts” provide that a statutory power is to be exercised only in prescribed circumstances, and there is no jurisdiction to exercise the power unless those circumstances exist. Proving a jurisdictional fact seems straightforward but is usually not a simple question of whether some act has been done or some circumstance exists. Ambiguity occurs when statutory conditions are infused with subjectivity, such as regulations authorized where an authority is “of the opinion” or “satisfied” that certain facts exist. A strict approach holds that the formation of the opinion alone is sufficient to satisfy the condition,⁷⁷ but in recent practice more justification has been required. For instance, the federal courts have reviewed ministerial action under s. 80 of  the Species at Risk Act,⁷⁸ which requires a minister to reach an opinion about whether a species faces imminent threats to its survival or recovery. If the minister reaches the opinion that a species faces such threats, they are obliged to recommend an emergency order to the Governor in Council. The Federal Court has found ministerial opinions reached under s. 80 unreasonable and referred those decisions back to the minister.⁷⁹

Ambiguity also arises when the item said to satisfy the condition has some defect. For example, a statute may require a report be made available to an authority prior to making a regulation, but not any sheaf of paper or PDF document will necessarily satisfy the requirement. If the report fails to include all the required elements, a court may determine that it does not constitute the “jurisdictional fact” called for in the enabling statue. These situations – subjective conditions and flawed execution of conditions – arise frequently in environmental law.  For instance, the Federal Court of Appeal reviewed an environmental assessment report that was a condition precedent to a Cabinet order approving the Trans Mountain pipeline, finding that the approval was unreasonable due to defects in the report.⁸⁰

The last type of condition precedent, “necessity,” arises where a regulation can only be made if the regulatory authority believes the regulation is “necessary.” Pre-Vavilov jurisprudence holds that these conditions require only that the belief be present, and not that it be correct or reasonable.⁸¹ Under that interpretation, “necessity” conditions have attracted more deference than consultation or “jurisdictional fact” conditions. There is some logic to this, since unlike conditions that require an opinion about certain facts, these conditions are delegated based on the purely subjective view of the authority that the regulation is required. For this reason, such regulation-making powers are most often invoked in support of emergency or wartime legislation, which is itself limited under the emergency powers branch of the federal peace, order, and good government power.⁸²

Two examples of challenges, pre and post Vavilov, to regulations alleged to be harmful to the environment illustrate that reasonableness is the appropriate lens for assessing compliance with conditions precedent.

In Wildlands League v. Ontario (Natural Resources and Forestry)⁸³ environmental groups challenged a regulation under Ontario's Endangered Species Act⁸⁴ which introduced multiple exemptions from statutory prohibitions on harming species and their habitats. The regulation was subject to a “jurisdictional facts” condition, modified by the subjective opinion of the Minister, and a consultation condition: if the Minister is of the opinion that the regulation is likely to jeopardize the survival of the species in Ontario or to have any other significant adverse effect on the species, the Minister is required to consult with an expert on the possible effects of the proposed regulation, and not to enact the regulation unless certain criteria are met.⁸⁵

The Ontario Court of Appeal cited Katz as the governing authority but noted that the law was unclear on “the scope of permissible judicial review when the condition precedent involves, as here, an opinion as to the existence of certain facts to be reached by the Minister.”⁸⁶ Ultimately, the court found that a similarly deferential test applies, which did not include reasonableness review:

…where a statutory condition precedent itself requires an opinion to be reached or a determination to be made, it is beyond the scope of judicial review to assess whether the determination was objectively correct or reasonable. At the same time, it is not sufficient that the decision-maker purported to make the determination. The determination must have been made in good faith and based on the factors specified in the enabling statute.⁸⁷

This passage is interesting for its contradictions: it asserts that the reasonableness of the regulation is not in play, but “at the same time” that the decision must be made based on the factors specified in the statute. But the existence (or not) of these “jurisdictional facts” is not a binary or simple determination. It requires consideration of the way the statutory factors were applied, specifically whether they were applied in a manner supported by the record and a reasonable interpretation of the statute. Indeed, the court ultimately characterized the questions before it as an analysis of the reasons supporting the purported satisfaction of the condition precedent, specifically:

Whether the Explanatory Note (which is the evidence relied on by the respondents as to the fulfillment of the statutory condition precedent) supports the conclusion that the Minister did in fact consider the effect of the regulation on each SAR. The respondents acknowledged, and this court agrees, that the court is entitled to examine the Explanatory Note to determine whether the Minister asked and answered the right question.⁸⁸

The environmental groups argued that the minister was required to assess whether a proposed regulation will likely jeopardize each individual species to which it applies, but that the reasons reveled the minister considered the effect of the regulation on only a few species, or on all species collectively.⁸⁹ The court reviewed the reasons and concluded that the Minister did, in fact, consider the effect of the regulation on each affected species at risk.⁹⁰

Having proceeded as if a reasonableness standard applied to the facts before it, it was unnecessary for the court to in effect pretend that it was applying a more deferential standard. Indeed, it is hard to imagine an alternative standard that would permit any meaningful review of a condition precedent. Certainly, the test that the Court of Appeal purported to apply in this case would not have worked, since it is circular. It amounts to asking, as the applicants in this case argued in their brief on leave to appeal to the Supreme Court, that “the minister satisfied the law’s requirements because she based her decision on the law’s requirements.” Only a reasonableness standard, which requires the satisfactions of conditions precedent to be transparent, intelligible, and justified, can provide meaningful review.

If the Court truly applied a reasonableness lens to the Minister’s decision, rather than a contrived attempt at maximum difference, it may have reached a different outcome. Reasonableness requires the court to pay respectful attention to the reasons of the decision maker and avoid “fashion[ing] its own reasons in order to buttress the administrative decision.”⁹¹ It seems that the Court of Appeal engaged in some “buttressing” by filling in gaps in the minister’s Explanatory Note. For instance, the Court infers from the fact that a few regulatory exemptions had species-specific conditions that the Minister must have reached an opinion for every one of the species affected by those exemptions.⁹² However, it is not at all clear that the inference was supported by the reasons or record.

A more recent case, decided after Vavilov and considering Portnov, also dealt with a regulation exempting projects from environmental standards – in this case environmental assessment. In Ecology Action Centre v Canada (Environment and Climate Change)⁹³ the Federal Court did the opposite of the Ontario Court of Appeal in Wildlands League. Rather than purporting to apply a deferential standard of review to a condition precedent and then actually applying a flawed version of reasonableness, as the Ontario Court of Appeal did, the court in Ecology Action Centre purported to apply reasonableness but used a flawed version of the deferential Katz standard instead.

The applicants in this case sought to quash a regulation made by the federal Minister of Environment and Climate Change under the Impact Assessment Act.⁹⁴ The regulation aimed to exempt exploratory drilling for oil and gas in the Newfoundland offshore from impact assessment requirements. Before making the regulation, the minister had to consider a valid regional assessment, which are tools enabled by the IAA to consider overarching environmental or policy issues such as cumulative effects. For example, they could assess the cumulative effects of the total load of environmental impacts on a region to inform whether a given project would be too burdensome on the ecosystem. The Minister may make a regulation exempting a class of projects from impact assessment requirements, so long as those projects have been identified in a regulation and the Minister has considered a regional assessment “in relation to that physical activity or class of physical activities.”⁹⁵

The applicants in Ecology Action Centre argued that the there was no valid regional assessment upon which the Minster could base a decision to exempt drilling because, among other things, the regional assessment committee failed to discharge its mandate to consider the cumulative effects of exploratory drilling. It ignored key scientific evidence, failed to assess the effects of oil spills and other accidents, and knowingly based its conclusions on unsound and unreliable information. In other words, there was no valid condition precedent that would allow the minister to make an exemption regulation under the IAA.

The application judge only grudgingly accepted that Portnov bound him to apply reasonableness review as described in Vavilov. He questioned the conclusions in Portnov on the bases that “there is a huge distinction between orders or regulations enacted by, for example, one of hundreds of administrative tribunals such as the various agricultural marketing boards in the provinces and subordinate legislation enacted by the Governor in Council” and that “Vavilov did not explicitly mention that Katz should be overturned.”⁹⁶ These criticisms are more fully elaborated in the debate between the Federal Court of Appeal and Albera Court of Appeal, canvassed above. Suffice it to say that in this case, the court seems to have been sufficiently skeptical about the applicability of Vavilov to regulations that it slipped back into the deferential Katz standard. For instance, the court found that the Minister need only consider, in good faith, any report that did not “[fall] short of legislative standards.”⁹⁷ Further, it found that those standards can be met by a report giving “some consideration,” in a formal rather than substantive sense, to the factors set out in the regional assessment terms of reference.⁹⁸ Without pre-judging the outcome on appeal, it seems apparent that the bar set by the court in Ecology Action Centre is considerably lower than the justification Vavilov requires. ⁹⁹

Conditions precedents are a form of public accountability. They indicate Parliament’s intention that the discretion it bestows on its delegates is not plenary, but subject to caveats intended to advance the statutory purpose. Because it is seldom apparent whether conditions have been upheld, courts need an analytical framework to evaluate delegates’ attempts to satisfy them. Vavilov provides that framework. As the two examples from environmental law show, judicial attempts to resist reasonableness led to doctrinal confusion. In the case of environmental regulation, failure to follow conditions precedent, and failure to consistently apply reasonableness review, can have worse outcomes: loss of species or pollution of pristine waters.

Conclusion

Reasonableness is here to say. After decades of uncertainty and jurisprudential churn, Vavilov has relieved the bench and bar of incessant metaphysical rumination on standard of review. An exception for regulations would not only cause lawyers to reach for analgesics, it would set back the rule of law. Regulations are not statutes; officials are not kings. Justification, transparency, and intelligibility are the minimum requirements to hold them accountable to the public and vindicate the will of Parliament. Reasonableness review rightly insists on those requirements. Courts should uphold them for all administrative action, including regulation.

Joshua Ginsberg is Director of the Ecojustice Environmental Law Clinic.

List of authorities

Case law

1. Adam v. Canada (Environment), 2011 FC 962
2. Agricultural, Horticultural & Forestry Indust. Training Bd. v. Aylesbury Mushrooms Ltd., [1972] 1 W.L.R. 190, [1972] 1 All E.R. 280 (Q.B.)
3. Attorney General of Canada v. Inuit Tapirisat et al, [1980] 2 SCR 735
4. Auer v. Auer, 2022 ABCA 375
5. British Columbia (Attorney General) v. Council of Canadians with Disabilities, 2022 SCC 27
6. British Columbia (Attorney General) v. Le, 2023 BCCA 200
7. British Columbia (Attorney General) v. Provincial Court Judges’ Association of British Columbia, 2020 SCC 20
8. Canada (Attorney General) v. Downtown Eastside Sex Workers United Against Violence Society, 2012 SCC 45
9. Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65
10. Canada Mink Breeders Association v British Columbia, 2022 BCSC 1731
11. Canadian National Railway Co. v. Canada (Attorney General), 2014 SCC 40
12. Catalyst Paper Corp v North Cowichan (District), 2012 SCC 2
13. Centre Québécois du droit de l’environnment v Canada (Environment), 2015 FC 773
14. Coldwater First Nation v. Canada (Attorney General), 2020 FCA 34
15. Democracy Watch v. Canada (Attorney General), 2018 FC 129
16. Dunsmuir v. New Brunswick, 2008 SCC 9
17. Ecology Action Centre v Canada (Environment and Climate Change), 2021 FC 1367
18. Green v Law Society of Manitoba, 2017 SCC 20
19. Hudson’s Bay Company ULC v. Ontario (Attorney General), 2020 ONSC 8046
20. Innovative Medicines Canada v. Canada (Attorney General), 2022 FCA 210
21. International Air Transport Association v. Canadian Transportation Agency, 2022 FCA 211
22. Katz Group Canada Inc. v. Ontario (Health and Long‑Term Care), 2013 SCC 64
23. Lakeland College Faculty Association v. Lakeland College, 1998 ABCA 221
24. McEldowney v. Forde, [1969] 2 All E.R. 1039 (H.L. (Eng.))
25. Mikisew Cree First Nation v Canada (Governor General in Council), 2018 SCC 40
26. Portnov v. Canada (Attorney General), 2021 FCA 171
27. Prophet River First Nation v. Canada (Attorney General), 2017 FCA 15
28. Reference re Regulations in Relation to Chemicals, [1943] SCR 1
29. References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11
30. Rollo v. Min. of Town & Country Planning, [1948] 1 All E.R. 13 (C.A.)
31. Sul v. The Rural Municipality of St Andrews, Manitoba et al, 2023 MBCA 25
32. Teal Cedar Products (1977) Ltd. v. R., [1989] 2 F.C. 158 (C.A.)
33. Thorne’s Hardware Ltd v The Queen, [1983] 1 SCR 106
34. TransAlta Generation Partnership v. Alberta, 2022 ABCA 381
35. Tsleil-Waututh Nation v. Canada (Attorney General), 2018 FCA 153
36. West Fraser Mills Ltd v British Columbia (Workers’ Compensation Appeal Tribunal), 2018 SCC 22
37. Wildlands League v. Ontario (Natural Resources and Forestry), 2016 ONCA 741

Statutes and regulations

1. Canadian Environmental Protection Act, 1999, SC 1999, c 33
2. Divorce Act, RSC 1985, c 3 (2nd Supp).
3. Endangered Species Act, 2007, SO 2007, c 6
4. Freezing Assets of Corrupt Foreign Officials Act, S.C. 2011, c. 10
5. Impact Assessment Act, SC 2019, c 28, s 1
6. Species at Risk Act, SC 2002, c 29
7. Statutory Instruments Act, RSC 1985, c S-22

Secondary authorities

1. Elmer A Driedger, Subordinate Legislation, 1960 38-1 Canadian Bar Review 1, 1960
2. J. M Evans (2021). Reviewing delegated legislation after Vavilov: Vires or reasonableness? Canadian Journal of Administrative Law & Practice, 34(1), 1-25
3. Mark Mancini and Martin Olszynski, “Reviewing Regulations Post-Vavilov: Ecology Action Centre v Canada (Part II)” (December 24, 2021), online: ABlawg
4. Mark Mancini, “Simplicity in the Law of Judicial Review of Regulations: Auer and TransAlta” in Double Aspect (blog) (online)
5. Paul Daly, “Resisting which Siren’s Call?” in Administrative Law Matters (blog) (online)