Buzz kill: When regulators don’t owe a duty of care

(Disponible uniquement en anglais)

Do government regulators owe a private law duty of care to individuals or businesses affected by their decisions? In Paradis Honey Ltd. v. Canada (Agriculture and Agri-Food)¹, the Federal Court of Appeal (FCA) confirmed the answer will often – but not always – be “no” where the regulator is carrying out a broad public mandate and acting within the scope of its public functions. 

The Paradis Honey decisions

Paradis Honey is an appeal of an unsuccessful class action by commercial beekeepers against the Canadian Food Inspection Agency (CFIA) in Federal Court. Since the 1980s, the CFIA has imposed a prohibition, in one form or another, on certain imports of honeybees from the United States. The plaintiff beekeepers argued that the CFIA’s import prohibition constitutes a breach of its common law duty of care, resulting in economic harm to the beekeepers. The Federal Court dismissed the claim, finding the CFIA owed no private law duty of care to the beekeepers. The FCA agreed.

At the heart of the appeal was the question of proximity. While economic harm to beekeepers from the prohibition was reasonably foreseeable, the FCA held that the relationship between the CFIA and the beekeepers was not sufficiently close and direct as to create a private law duty of care.

The Federal Court had also held that a duty of care should not be recognized on policy grounds, though the FCA declined to address this issue, having disposed of the case on the basis of proximity.

The legislative scheme does not create a private law duty of care

The beekeepers contended that the Health of Animals Act and its regulations, under which the import prohibition was maintained, established the necessary proximity between themselves and the CFIA. The FCA rejected this argument.

The purpose of the Health of Animals Act is to enable the federal government to protect animal and human health by preventing the introduction and spread of disease. Neither the Act nor the regulations suggest, expressly or by necessary implication, that one of their purposes is to protect the economic interests of individual beekeepers. The legislative scheme therefore did not establish the proximity necessary to support a duty of care.

The FCA stressed that statutes directed toward broad public purposes rarely create private law duties of care.

Regulatory consultation does not create proximity

The beekeepers also argued that their extensive dealings with the CFIA over many years created a sufficiently close relationship to ground a duty of care.

The FCA disagreed. The court accepted that public authorities can owe duties of care to identifiable groups in some circumstances, particularly in cases involving the inspection and enforcement of safety standards. However, it distinguished those cases from the CFIA’s role in developing and implementing regulatory policy. 

When government actors pursue broad public objectives, consultations, meetings, and communications with industry participants are undertaken to help regulators make decisions in the public interest, not to advance the interests of particular stakeholders. As a result, ordinary regulatory engagement will not establish the special relationship required for proximity. The FCA agreed with the Federal Court that the CFIA’s dealings with beekeepers never went beyond what would ordinarily be expected of a regulator carrying out its statutory mandate. 

Key takeaways

Paradis Honey confirms that plaintiffs face significant obstacles when seeking to impose negligence liability on regulators in Canada.

Where legislation serves a broad public purpose and does not expressly create a private law duty of care, courts will be reluctant to find that the statute creates such a duty implicitly. Likewise, routine stakeholder consultations, industry engagement, and ongoing communications will generally not establish the proximity required for a duty of care to emerge. In such circumstances, judicial review of a regulator’s decision will often be the best strategy for affected stakeholders.

At the same time, the FCA did not foreclose negligence claims against regulators altogether. The FCA expressly reaffirmed that, even where a statute does not create proximity in and of itself, a duty of care may still arise from specific interactions between government officials and an individual. Representations, undertakings, or direct dealings that go beyond the ordinary exercise of a regulatory mandate may, in an appropriate case, create a duty of care. 

Paradis Honey therefore reinforces a familiar principle: absent a genuinely special relationship, courts are unlikely to recognize a private law duty that could interfere with a regulator’s obligation to act in accordance with its public duty. In light of this principle, expediently challenging regulatory decisions rather than seeking to hold the regulator liable for damages will often be the best path forward.

Authors: Jean-Simon Schoenholz, Miteau Brise

End Notes