In one of the Federal Court of Appeal’s post-Vavilov cases, CNR v Richardson, the Court (per Nadon JA) demonstrates that Vavilov review, on substantive questions of law, will not be inattentive or subordinate to administrative discretion. Indeed, while some suggest that Vavilovian review is “inherently deferential,” I see the matter quite differently: Richardson shows how Vavilov review puts the court in the proper position to rigorously enforce the statutory boundaries of administrative decision-making, particularly where decision-makers fail to engage with elements of the statute at all.
Richardson is an agri-food business that owns and operates 54 grain elevators . CN and CP serve a number of Richardson’s elevators . Meanwhile, the Canadian National Railway Company (CN) and the Canadian Pacific Railway Company (CP) connect railway networks at Scotford, Alberta , though the mainlines of each do not connect at Scotford. Around this connection (about 30km) lays Richardson’s Lamont elevator, located on CN’s main line .
Richardson filed an application before the Canada Transportation Agency, asking that the Scotford site be deemed an “interchange” and that Richardson traffic be transferred for “interswitching” between Scotford and Lamont elevator. Under the relevant statute (the Canada Transportation Act), an interchange “means a place where the line of one railway company connects with the line of another railway company and where loaded or empty cars may be stored until delivered or received by the other railway company” (s.111). Meanwhile, “interswitch” “means to transfer traffic from the lines of one railway company to the lines of another railway company” (s.111). The goal of interswitching is to ensure that shippers with only one choice of railway have “fair and reasonable access to the rail system at a reasonable rate.” Obviously, this would benefit Richardson.
The Agency first concluded that CN and CP operated an interchange, under the statute, at Scotford. While the Agency noted CN’s argument that its main line did not connect with CP’s main line at Scotford, it ultimately held that s.111 of the statute did not make a distinction between the type of railway line required to make the connection . Rather, under the statute, a railway line is defined broadly . Further, s.140 of the statute outlines exemptions for what a “railway line” does not include. To the Agency, if Parliament wanted to limit interchanges to areas where main lines connected, it could have include a similar exclusion in s.111 of the statute .
On judicial review, CN argued that the Agency erred in interpreting the definition of “interchange.” The first question for Nadon JA was the standard of review. He concluded that while, pre-Vavilov, the standard was reasonableness, the case came before the Court on a statutory right of appeal, which meant that the standard of correctness applied [42-44]. But Nadon JA went on to conclude in obiter that even though the standard of review was correctness, “[u]nder the previous standard of reasonableness, I would have had no hesitation concluding that the Agency’s interpretation was unreasonable because it failed to consider both context and the legislative scheme as a whole” . Moreover, the Agency misapplied a principle of statutory interpretation—the so-called “implied exclusion rule” adopted by the Agency was inconsistent with Supreme Court precedent (see Green, at para 37). As such, Justice Nadon remitted to the Agency to receive its view about the interpretive matter, especially in light of the new correctness standard.
Nadon JA’s analysis is tightly connected to Vavilov, and demonstrates how courts should apply Vavilov in light of defective statutory reasoning. As Vavilov notes, at para 108, the governing statute is the most “salient” aspect of the context bearing on a decision-maker. As such, this most salient aspect must be rigorously enforced against the decision-maker. But a court cannot do so in absence of reasons from the decision-maker engaging with the statute. Indeed, the reasons must demonstrate some engagement with this and other constraints (Vavilov, at para 120). It is for this reason that decision-makers are required to interpret the law in concert with its text, context, and purpose (see Vavilov, at paras 118, and 120). While the Agency is not required to engage in a “formalistic analysis” (Vavilov, at para 119), and not all errors will be material (Vavilov, at para 122), a failure to engage with purpose at all as in Richardson must be considered fatal, if the governing statutory scheme is a real constraint on administrative decision-making. More specifically, purpose and the overall context must always be considered in run-of-the-mill statutory interpretation cases, and a failure to do so is fatal in that context (see ATCO Gas & Pipelines, 2006 SCC 4 at para 48), as Vavilov says it can be in the administrative context. And what’s more, a failure to use the proper principles of interpretation is a failure of reasoning that Vavilov says is impermissible, because a decision-maker’s interpretation of a statutory provision must be consistent with the text, context, and purpose of a provision, and because “the usual principles of statutory interpretation apply equally when an administrative decision maker interprets a provision” (Vavilov, at para 120).
Richardson, then, is on solid ground. The Agency’s failure to consider the overall statutory context means that it was not “alive” to an essential element of interpretation (Vavilov, at para 120). A failure to engage with the statute at all cannot, on any understanding of the term, be reasonable. And the Agency’s use of the implied exclusion rule, without considering the broader context and purpose, clearly runs counter to the Supreme Court’s comments in Green about the implied exclusion rule. The failure to properly engage with the statute in its entirety, without using the proper tools of interpretation, is a Vavilovian error.
There is a broader point of principle here. As Vavilov implicitly holds, it is not formalistic to expect decision-makers, who share in the enterprise of law-making, to actually do the task properly. Indeed, proponents of deference cannot say two things at once: they cannot insist that decision-makers are contributors to law-making, but then grant decision-makers the ability to engage in reasoning that does not engage with the most obvious and natural limitation on administrative decision-making (Vavilov, at para 109). Either decision-makers are shared partners in law-making or they are not.
It is true that reasons are the focus of Vavilov, and so it is methodologically deferential to look at those reasons first. But this does not lessen the rigorousness of Vavilovian review, at least as exemplified by Nadon JA in Richardson. Indeed, the reasons are merely the window into the application of the constraints on the decision-maker. They are not an invitation for courts to sit back—reasons require responsive engagement by the Court, in relation to the application of the principles of interpretation.
While Nadon JA’s remarks in Richardson are obiter, they are a good example of the promise of Vavilov: rigorous reasonableness review that is focused on the statute and in ensuring that administrative decision-makers engage with the statute.