Category: Administrative Law

Jurisdiction and the Post-Vavilov Supreme Court: Part I

What does “jurisdiction” mean, anyways?

As I wrote in my newsletter last week, the Supreme Court has an awkward relationship with the concept of “jurisdiction.” There is no more tortuous concept in Canadian administrative law. Vavilov, apparently, was the end to the concept of jurisdiction in Canadian administrative law. Vavilov basically said two things about jurisdiction: (1) it is difficult to identify a jurisdictional question, which sheds doubt on the entire enterprise (Vavilov, at para 66); and (2) as a result, “[w]e would cease to recognize jurisdictional questions as a distinct category attracting correctness review” (Vavilov, at para 65). Taken together, it was a fair assumption that jurisdictional questions, if they existed at all, would not be recognized in the law of judicial review.

Easier said than done. The Supreme Court in two recent cases have gone back to the well and drawn from the waters of jurisdiction. In both Ward and Horrocks, the various opinions continue to draw on jurisdiction as a concept without interrogating it. Underneath this technical issue of administrative law is a broader, conceptual difference on the Court that remains post-Vavilov.

In this post I’ll address what I think “jurisdiction” means post-Vavilov. In a future post I’ll address Horrocks and what it might mean for post-Vavilov administrative law splits on the Court.

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In Ward, under a heading titled, “Jurisdiction Over Defamation and Discrimination,” the majority discusses the “jurisdiction” of the tribunal in that case [28]. In the same paragraph, the Court chastises the Tribunal for indirectly extending its “limited direct jurisdiction.” In Horrocks, on the other hand, the whole dispute concerned the jurisdictional boundary between a labour arbitrator and a human rights tribunal.

The entire setup of these cases is based around the idea of jurisdiction. In Ward, the term was thrown around rather willy-nilly to describe the statutory authority—the grant of power—given to the Tribunal. In Horrocks, the term was used as contemplated by Vavilov, as a category attracting correctness review. But in both cases, jurisdiction looms large.

Before continuing, it’s important to note the various ways that “jurisdiction” has been used in Canadian administrative law. There are at least 3 different uses of the term:

  1. Jurisdiction as a preliminary question: this category concerns “neat and discrete points of law” that arise, for example, in a decision of a human rights commission to refer a case to a human rights tribunal (Halifax, at para 27). In Halifax, the Court overturned previous precedents and held that such questions are reviewable on a reasonableness standard (Halifax, at para 38).
  2. So-called “true questions of jurisdiction”: these questions were said to arise “where the tribunal must explicitly determine whether its statutory grant of power gives it authority to decide a particular matter” (Dunsmuir, at para 59). An example of such a question was provided in Dunsmuir: “whether the City of Calgary was authorized under the relevant municipal acts to enact bylaws limiting the number of taxi plate licences” (Dunsmuir, at para 59). Note, here, that this question trades on the same idea of “jurisdiction” as the preliminary questions doctrine, but there is a difference: ostensibly, this brand of jurisidictional questions concerns an issue that goes to the merits. Vavilov did away with this concept of jurisdictional question, to the extent that such questions attract correctness review.
  3. “Jurisdictional boundaries between two or more tribunals”: this is the category of review at issue in Horrocks. Vavilov retained this category as attracting correctness review.

What is immediately clear is that “jurisdiction” is a morass.

What sense should we make of this? In my view, Vavilov left the door of “jurisdiction” open a crack. The result, as Paul Daly presciently observed the day after Vavilov was rendered, is that jurisdiction is still around—a “stake through the heart” will be the only thing to kill it. In the meantime, we must make sense of what is left of jurisdiction.  As I noted above, one option is to read Vavilov rather broadly: jurisdiction is dead, and we killed it. But this does not explain (in a satisfying way) what the Court is doing in both Ward and Horrocks. Why mention a concept that is dead?

Instead, I think “jurisdiction” (or, as I shall say, hopefully a better label) remains an important concept in Canadian administrative law. This version of jurisdiction—as used in Ward and Horrocks—is not akin to the concept of jurisdiction known to administrative law history (ie) Anisminic. It is not the “preliminary questions” doctrine put to rest in Halifax. This conception of jurisdiction is basically co-extensive with any number of formulations that describes the authority delegated to an administrative decision-maker. The Supreme Court of the United States describes this as “statutory authority,” which is a good a term as any. This is because, fundamentally, any time an administrative decision-maker acts, it is explicitly or implicitly dealing with the boundaries governing it by statute. Whether this is “jurisdiction,” or “statutory authority” does not matter much. It’s all the same thing.

Now, what is true about jurisdiction is that there are different types of legal questions. Some legal questions could be said to be “preliminary.” An example might be a legal condition precedent to the exercise of another legal power under the same statute.  But the difference that Vavilov introduces is simply about the standard of review, not about the existence or not of jurisdictional questions understood in this sense. In other words, to the extent that Halifax and Vavilov dispatched with various types of jurisdictional questions, they only did so to the extent that it matters for the standard of review. Vavilov tells us that questions of jurisdiction, as they were previously known, are hard to identify: and in that sense, they shouldn’t be treated differently than any other legal questions. So whether the question is “preliminary” or on the merits, it’s a legal question that is assimilated to the Vavilov framework.

Why does any of this matter? There is a clarity reason and a substantive reason. For clarity’s sake, the Court should probably not refer to “jurisdiction” anymore. The concept itself, as it is now used, is simply referring to a type of legal question, not a category of review. The Court should adopt some concept of “statutory authority” to describe all the types of legal questions that arise in a typical judicial review proceeding, including anything that might be considered “jurisdictional.” This has nothing to do with the standard of review: all of the questions will be presumed to be reviewed on reasonableness review. On the substantive side, and as we shall see from Horrocks, there are good reasons to take statutes—and the boundaries they set up—seriously. As Vavilov says, the discarding of jurisdiction as a category of review should not lead to  the arrogation of administrative power.

It Ends Well

Thoughts on the Supreme Court’s narrow but seemingly decisive rejection of a right not to be offended

Last week, the Supreme Court delivered its judgment in Ward v Quebec (Commission des droits de la personne et des droits de la jeunesse), 2021 SCC 43. By a 5-4 majority, it quashed an award of damages a human rights tribunal had granted to Jérémy Gabriel, a child celebrity, whom a well-known comedian, Mike Ward, had cruelly mocked. As Jen Gerson and Matt Gurney put it in The Line’s editorial (possibly paywalled, but you should subscribe!)

Ward … decided to become That Asshole, the edgelord comedian who pointed out that the kid wasn’t very good. In a few stand-up bits, Ward called the child ugly, and noted that the performances were tolerable only because he thought the singer’s condition was terminal. Nice guy. (Paragraph break removed)

The tribunal, and the Québec Court of Appeal found that this amounted to discrimination in the exercise of Mr. Gabriel’s right to “the safeguard of his dignity” under section 4 of Québec’s Charter of Human Rights and Freedoms, a.k.a. the Québec Charter. The majority of the Supreme Court resoundingly holds otherwise.

Instead of my usual blow-by-blow summary and comment, I will offer some more condensed thoughts on a few striking aspects of this case. While the most important thing about Ward is what, if anything, it means for the freedom of expression, there are a few other things to mention before I get to that. In this post, I mostly focus on the majority opinion. I will shortly post separately about the dissent.

The Human Face

Because I will argue that the majority decision is correct, and indeed that it was very important that Mr. Gabriel not win this case, I want to start by acknowledging that he has had it very hard. Mr. Ward’s jokes at his expense were cruel. Mr. Gabriel did suffer, greatly ― we are told that he even tried to kill himself at one point. I think we can wonder whether the connection between these things is all that strong. I’m not persuaded by the dissent’s imputation to Mr. Ward of the full responsibility for Mr. Gabriel’s bullying by his classmates. We can also argue that anti-discrimination law ― perhaps any law ― isn’t the solution. But we have to recognize that a person has been in a lot of undeserved pain, and a person who, even before this case, had not had it easy in life.

The Court

As already noted, the Court is narrowly divided. The Chief Justice and Justice Côté write for the majority, with Justices Moldaver, Brown, and Rowe concurring. Justices Abella and Kasirer write for the dissent, joined by Justices Karakatsanis and Martin. For those keeping score at home, this is the exact same alignment as in the recent decision in Toronto (City) v Ontario (Attorney General), 2021 SCC 34. Indeed, even the authorship of the opinions overlaps: in City of Toronto, the Chief Justice wrote with Justice Brown, while Justice Abella wrote for the dissenters.

I’m old enough to remember, as they say, how smugly self-satisfied Canadian commentators were, just a few years ago, at the consensus reigning at our Supreme Court, in contrast to the US one always splitting 5-4. To be sure, two cases do not make a trend, but I think it’s pretty clear that on the Supreme Court as it has recently been constituted there is ― though there are always exceptions ― a somewhat cohesive group consisting of Justices Côté, Brown, and Rowe, and perhaps an even more cohesive group led by Justice Abella, with Justices Karakatsanis, Martin, and Kasirer. The Chief Justice and Justice Moldaver are the swing votes. It remains to be seen how, if at all, Justice Abella’s retirement is changing this, but in the meantime, our Supreme Court has been fractured along lines that can be predicted. This is not necessarily bad. But let’s not be smug.

One odd thing to add is that, whereas in City of Toronto majority and dissent were ― by the standards of the Supreme Court of Canada ― at each other’s throats, here they studiously ignore one another. I’m not sure which is better, but the contrast between cases argued and decided just a month apart, by identical alignments, and with overlapping opinion authorships, is striking.

The Case

One uncomfortable question I have is: should the Supreme Court have taken this case at all? Let me take you straight away almost to the end of the majority judgment, where we learn, for the first time, the following

[I]n light of the Tribunal’s finding that Mr. Ward [translation] “did not choose Jérémy because of his handicap” but rather “because he was a public personality” (Tribunal reasons, at para. 86), it must be concluded that the distinction was not based on a prohibited ground. This conclusion on its own is sufficient to dispose of the appeal. [91]

Everything else that the Court has said and that I’m about to discuss ― that’s just obiter dicta. The tribunal made a basic logical mistake, which, as the majority explains, the Court of Appeal then glossed over. That was, of course, unfortunate. But it’s not the Supreme Court’s role to correct basic logical mistakes by tribunals or even courts of appeal. They’re there to develop the law. And develop the law they do ― in a way that, if the majority is right (and I think it is), was pressing and necessary. But also in a way that, by the majority’s own admission, is beside the point in this case.

I think this raises the issue of the Supreme Court’s role in our constitutional system. Where is the line between developing the law in deciding cases, as we expect them to, and developing the law by making big pronouncements that are unnecessary to decide cases? Should a court refrain from doing the latter, or may it properly seize on the opportunities that present itself to it to provide important guidance to lower courts? I have no firm views on any of this, but I think the questions are worth thinking about. (For some related musings, see here.)

Jurisdiction

Back to the very beginning of the majority’s reasons:

This appeal … invites us … to clarify the scope of the jurisdiction of the Commission des droits de la personne et des droits de la jeunesse … and the Human Rights Tribunal … with respect to discrimination claims based on the … Quebec Charter. [1]

Clarify the… what? Yes. That word. The majority uses it several times in the course of its reasons. In particular, it speaks of “the distinction that must be drawn with respect to jurisdiction over, on the one hand, an action in defamation and, on the other, a discrimination claim in the context of the Quebec Charter“. [22]

This is odd. A mere two years ago, in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, all of the Ward majority judges signed an opinion that not only eliminated jurisdictional questions as a distinct category of correctness review, but seemed to endorse scepticism at the very “concept of ‘jurisdiction’ in the administrative law context”. [66] Vavilov said that what might previously have been thought of as jurisdictional questions are legal questions like all others, subject to reasonableness review, except when the respective jurisdictions of two administrative bodies must be demarcated.

One recent example of this reasoning is the decision of the Ontario’s Superior Court of Justice in Morningstar v WSIAT, 2021 ONSC 5576, about which I have written here. The Court roundly rejected the argument that, as I summarized it

the jurisdictional boundary between a tribunal and the ordinary courts should be policed in much the same way as, Vavilov said, “the jurisdictional boundaries between two or more administrative bodies”, [63] ― that is, by hav[ing] the court ensure the boundary is drawn correctly.

I thought ― and still think ― that that was a correct application of Vavilov. Ward, though, says that there is indeed a jurisdictional boundary between administrative tribunals and courts. I don’t think this is consistent with Vavilov. Nothing turns on this here because the case gets to the courts by way of statutory appeal rather than judicial review, and ― under Vavilov ― the correctness standard applies to all legal questions in such circumstances. But the tensions inherent in Vavilov, including in its attempt to rid Canadian administrative law of the fundamental concept of the law of judicial review are becoming apparent. (Co-blogger Mark Mancini has made a similar observation in the latest issue of his newsletter.)

Interpretation

One of the things the majority is right about is that Ward is, among other things, a case about interpretation. It requires the courts to make sense of a somewhat peculiar statutory scheme, which protects, among other things, rights to the freedom of expression and to the “safeguard of [one’s] dignity”, says that “the scope of the freedoms and rights, and limits to their exercise, may be fixed by law”, and protects equality in “the exercise and recognition” of these rights, rather than as a general self-standing right. This is not an easy exercise and I won’t go into all the details, but I will make a few comments.

The majority deserves credit for trying to work out an independent meaning for the right to the safeguard of one’s dignity. As it notes, dignity is a very tricky concept ― and the Supreme Court itself has tried to avoid putting too much weight on it in other contexts. But here it is, in the text of the Québec Charter, a statute that binds the courts. It will not to do to simply find violations of dignity when other rights are violated in particularly egregious ways, as Québec courts had done. The Québec Charter makes it a distinct right, and the courts must treat it as such. At the same time, they have to give it defined contours. The majority seeks to do so by stressing the importance of the safeguard of dignity, to which the right is directed:

Unlike, for example, s. 5 [of the Québec Charter], which confers a right to respect for one’s private life, s. 4 does not permit a person to claim respect for their dignity, but only the safeguarding of their dignity, that is, protection from the denial of their worth as a human being. Where a person is stripped of their humanity by being subjected to treatment that debases, subjugates, objectifies, humiliates or degrades them, there is no question that their dignity is violated. In this sense, the right to the safeguard of dignity is a shield against this type of interference that does no less than outrage the conscience of society. [58]

What the majority does is a careful and, I think, pretty convincing reading of the statutory text. Good.

Some things the majority says are not so good. For instance: “the interpretation of this provision must be refocused on its purpose by considering its wording and context”. [55] No, no, no. Interpretation should be focused on text understood in context. Purpose can sometimes help a court understand the words and enrich its understanding of the context, but it should not be the focus of interpretation. And then, there is this:

This Court’s jurisprudence also establishes “that mere differences in terminology do not support a conclusion that there are fundamental differences in the objectives of human rights statutes” … It follows that, as long as this is not contrary to the usual rules of interpretation, symmetry in the interpretation of the various instruments that protect human rights and freedoms is desirable. [68; quoting Quebec (Commission des droits de la personne et des droits de la jeunesse) v Montréal (City), 2000 SCC 27, [2000] 1 SCR 665, [47]]

What are we to make of this? If usual rules interpretation are to prevail, differences in terminology must make a difference, if not to the objectives then to the effects of human rights as of any other statutes. And the idea that differences in wording don’t matter because objectives are key to interpretation is specifically rejected in the majority opinion in Quebec (Attorney General) v 9147-0732 Québec inc, 2020 SCC 32 ― signed onto by the same five judges who are in the majority in Ward (even as it is endorsed by the concurrence).

Between the jurisdiction issue and this, I cannot help but wonder whether their Lordships remember what they said last year. Or are they trying to say that we are supposed not to? This stream of inconsistent pronouncements ― by the same people! ― reveals, at best, a lack of attention to legal doctrine and craft. It is very disappointing.

Freedom of Expression

I finally come to the meat of the case. Here too, I want to praise the majority for getting things fundamentally right, but also to criticize them for saying things along the way that are doubtful or even wrong in themselves, or inconsistent ― without explanation ― with important precedent.

Let me start with a quick note from the “judges are not philosophers” file. The majority’s discussion of the freedom of expression begins with the assertion that it, “[l]ike the right to the safeguard of dignity … flows from the concept of human dignity”. [59] Perhaps. But in the next paragraph the majority quotes Joseph Raz’s claim that “a person’s right to free expression is protected not in order to protect him, but in order to protect a public good, a benefit which respect for the right of free expression brings to all those who live in the society in which it is respected”. [60] These are two quite different views of the foundations and purposes of the freedom of expression ― one deontological, the other utilitarian. Perhaps nothing turns on which of these is correct in this case, but if so, the majority shouldn’t be making these philosophical declarations at all. And I suspect that in some cases the choice might actually make a difference. The majority’s approach is muddled and unhelpful.

Now for some good things. This, especially: “freedom of expression does not truly begin until it gives rise to a duty to tolerate what other people say”. [60] This is the key to so many disputes about freedom of expression. Speech is not harmless. It can hurt. It can propagate falsehoods. It can inflame base passions. But freedom of expression means sometimes having to tolerate such things ― just like freedom of assembly means having to tolerate noisy protests, and freedom of religion means having to tolerate heresy and blasphemy ― even when their cost falls on particular groups or even individuals.

The majority adds that “[l]imits on freedom of expression are justified where, in a given context, there are serious reasons to fear harm that is sufficiently specific and cannot be prevented by the discernment and critical judgment of the audience”. [61] This sets a fairly high bar to limits that will be considered justified. It also acknowledges that the audience has its share of responsibility in appreciating troublesome words. Courts assessing a limit on the freedom of expression should not assume that citizens are, by default, unthinking and gullible playthings for the tellers of tall tales. This is also good and important. Assuming away all critical sense among the citizens would help justify all kinds of restrictions on speech, including, and perhaps especially, in the political arena. It is fundamentally incompatible with the notion of a self-governing, responsible citizenry.

But this insistence sits uneasily, to say the least, with the Court’s position in Harper v Canada (Attorney General), 2004 SCC 33, [2004] 1 SCR 827. There, the majority said that

The legislature is not required to provide scientific proof based on concrete evidence of the problem it seeks to address in every case. Where the court is faced with inconclusive or competing social science evidence relating the harm to the legislature’s measures, the court may rely on a reasoned apprehension of that harm. [77]

This is contrast to the Harper dissent’s concern that “[t]here [was] no demonstration that” the limits on “third party” spending at issue were “required to meet the perceived dangers of inequality, an uninformed electorate and the public perception that the system is unfair”. [38] By my lights, Ward‘s insistence on serious reasons to fear specific harm, as well as on audience discernment is much more in tune with the Harper dissent. Because I regard Harper as an abominable decision, I am happy to see Ward go in a different direction. But there is no comment in Ward on how these cases interact. Again, it’s as if the judges don’t remember what the law says, though at least Harper is a much older case that Vavilov and Québec Inc.  

All that said, the substance of the majority’s decision is right and reassuring (or it would be reassuring if more than five judges had signed on). The majority insists that the right to the safeguard of one’s dignity most not be “vague” or given “a scope so broad that it would neutralize freedom of expression”. [80] It stresses the objective nature of the test for whether this right is breached and rejects the modified objective standard of “a reasonable person targeted by the same words”, because “[t]hat approach results in a shift toward protecting a right not to be offended, which has no place in a democratic society”. [82] What matters is neither “the repugnant or offensive nature of the expression [nor] the emotional harm caused”, [82] but the effect of the words on listeners: would “a reasonable person, aware of the relevant context and circumstances, … view the expression … as inciting others to vilify [its targets] or to detest their humanity on the basis of a prohibited ground of discrimination” [83] and would “a reasonable person would view the expression, considered in its context, as likely to lead to discriminatory treatment of the person targeted”? [84]

All this is the more important since the list of prohibited grounds of discrimination under the Québec Charter is very broad and includes “political convictions”. As I have written here, “even if we accept the need to protect vulnerable minorities from hate speech targeting them, I struggle to see what makes it necessary to extend this protection to members of political parties or movements”. Protecting people from mockery, let alone hurt feelings, based on their political views is incompatible with lively democratic debate. However much we can wish for such debate to usually be civil, I think it’s a mistake to insist that it always must be, and certainly a grave mistake to put government officials in charge of deciding whether it is sufficiently civil on any give occasion.

The insistence on the need for objective assessment and the clear rejection of a right not to be offended will, I hope, be the key takeaway from Ward. For them, we can forgive the majority opinion its many flaws. That there can be no right not to be offended in a society that proclaims its commitment to the freedom of expression and to democracy might have been self-evident ten years ago, but it evidently isn’t anymore. The dissent offers us a glimpse of what a world in which this truth isn’t recognized looks like. I will focus on it in a forthcoming post.

What Does City of Toronto Mean For Administrative Law?

The Supreme Court released its much-anticipated decision today in Toronto (City) v Ontario (Attorney General), 2021 SCC 34. While others will address the nuances of the case, the majority generally puts unwritten constitutional principles into a tiny, little box. It says that because “[u]nwritten principles are…part of the law of our Constitution…” [50], unwritten principles only have two practical functions: (1) they can be used in the interpretation of constitutional provisions [55]; (2) they can be used to “develop structural doctrines unstated in the written Constitution per se, but necessary to the coherence of, and flowing by implication from, its architecure” [56]. In this category, the Court uses the example of the doctrine of paramountcy, the doctrine of full faith and credit, and the remedy of suspended declarations of invalidity.

I applaud the majority opinion for clarifying the role of unwritten constitutional principles. For my part, I think the functions they have outlined for unwritten principles give those principles a meaningful role in the constitutional structure while giving priority to the text. The majority aptly underscores the worry with unwritten principles–they are so abstract and potentially endless–and negates that worry by ensuring the text as a control on the use of these principles. Even better, the majority closes the door on the rather pernicious attempt to read municipalities into s.3 of the Charter [5].

But that is not my concern for today. What does any of this have to do with administrative law?

Post-Vavilov, there was a good argument that unwritten principles–the Rule of Law specifically–could have independent force in limiting state action in some way on the standard of review–put more bluntly, that the Rule of Law could invalidate certain legislative rules governing standard of review. The Court says, for example, that “where the legislature has indicated the applicable standard of review, courts are bound to respect that designation, within the limits imposed by the rule of law” (Vavilov, at para 35). It goes on to outline categories of questions–like constitutional questions–that demand a correctness standard because of “respect for the rule of law” (Vavilov, at para 53). This raised the argument that if a legislature were to prescribe a standard of review of reasonableness on a constitutional question, such a standard would not be given effect to by a court because it transgresseses the “limits imposed by the rule of law.”

On first blush, City of Toronto tends to throw cold water on the argument. Its insistence that unwritten principles cannot invalidate legislation could mean that a court should give effect to a legislated standard of review on constitutional questions. And because there is no express constitutional provision insisting on a correctness standard on certain questions, on a strict reading of the City of Toronto majority opinion, there would be no power to invalidate that law.

This very well may be true, and yet I think there are a few ways to reconcile City of Toronto with Vavilov that leads to the same result that Vavilov seems to suggest–a court not applying (which is strictly, though perhaps not functionally, different from invalidation) a legislated standard of review of reasonableness on constitutional questions. Much of this argument hinges on s.96 of the Constitution Act, 1867.

First, it might be said that the Rule of Law as outlined in Vavilov is a necessary interpretive principle that should be used to understand s.96. That is, we cannot understand s.96–which contemplates federally-appointed superior courts–without understanding the traditional role of these courts to conduct judicial review of administrative action on a certain stringency on certain questions. In City of Toronto, the Court cites s.96-100 as an example of unwritten principles bolstering a constitutional principle, suggesting that “unwritten constitutional principles of judicial independence and the rule have law have aided in the interpretation of [ss.96-100], which have come to safeguard the core jurisdiction of the courts that fall within the scope of those provisions” [55].

I think to call any of the doctrinal innovations that have come to s.96 a result of “interpretation” stretches the term a bit far. On its face, s.96 is just an appointing provision. It may be one thing to interpret what the terms of that appointing provision are, but to construct doctrine on top of the provision–or to make it work in a constitutional structure–seems to be a different judicial function.

Secondly, and I think more persuasively, the Court notes that unwritten principles can develop structural doctrines that flow from constitutional architecture [56]. Again, the Court notes examples of this sort of doctrinal construction: full faith and credit, paramountcy, and even the legal result in the Quebec Secession Reference. As we see, some of these doctrines are quite particular to specific contexts–the Quebec Seccession Reference, for example. Others are more general. The doctrine of full faith and credit in the context of conflict of laws is a major doctrinal innovation that is not found anywhere in a specific constitutional provision. These doctrinal innovations can, in effect, change or invalidate legislation that conflict with them, though they are rooted in the text itself.

Vavilov‘s comments on standard of review best fall into this category. The standard of review framework flows from two unwritten principles themselves: legislative intent (perhaps partially reflected in the principle of “democracy”) and the Rule of Law. The Court conceives of the Rule of Law as generally the rule of courts, in that courts must retain a strong supervisory role over certain questions. It would upset the supervisory role of these courts to outlaw their ability to hold state actors to the strictest constitutional standard. This is but a logical extension of Crevier, which set the stage for an argument about the constitutionally-protected role of the superior courts.

An example and a caveat. First, the majority and dissent clash over MacMillan Bloedel. In that case, the Court arguably invalidated a legislative scheme that granted exclusion jurisdiction to a youth court. The City of Toronto majority says the holding in that case was based on the text of ss.96-101 and 129 of the Constitution Act, 1867 [50]. The dissent, on the other hand, cites para 41 of MacMillan Bloedel to suggest that the basis of the holding was the Rule of Law itself [176]. In my view, MacMillan Bloedel is a bit of both. The Court clearly bases its decision in s.96 (MacMillan Bloedel, at para 47). But it also says that the case is best understood “in a broader constitutional context, considering this jurisprudence along with the preamble to the Constitution Act, 1867, the principle of the rule of law, and the central place of superior courts in our system of governance” (MacMillan Bloedel, at para 2). To the extent these principles and s.96 were abridged, the impugned legislative provision was “read down” as “inoperative to deprive the superior court of its jurisdiction to convict the appellant of contempt in this case” (MacMillan Bloedel, at para 43). In MacMillan Bloedel, we have a constitutional text (s.96)–>supported by the Rule of Law (unwritten principle)–>a result that the core of superior court powers were protected in this case. Vavilov falls into this same category. We can see, then, that in some cases a legislative standard of review may be “read down” as a result of the standard of review doctrine spun out from the unwritten principles of legislative intent and the Rule of Law.

The caveat I wish to raise has to do with the Federal Courts. Section 96 does not speak to statutory courts, and in theory, the Federal Courts’ judicial review jurisdiction could be abolished tomorrow unlike the superior courts. All of this, then, would stop at the Federal Courts. But I do not think this is inevitable. Once a statutory court has been made under s.101 of the Constitution Act, 1867, one might make the argument that so long as such a court exists, its powers should be construed as broadly as the powers of a superior court under s.96. But I do not commit to this argument in full, except to say that it makes practical sense to me and would uphold a consistent judicial standard for administrative action across jurisdictions.

At any rate, I think City of Toronto–despite its strong language on unwritten principles–can be reconciled with Vavilov. And at the end of the day, the result may be the same: legislation that undermines an unwritten principle may not be “given effect” according to a doctrinal innovation, even if the legislation is not “invalidated” in a strict sense. This is the best way to undertstand Vavilov‘s standard of review framework.

On Law and Music

What is the relationship, if any, between law and music?

As a musician myself, I notice many commonalities between law and music. As a jazz musician, improvisation is what I spend a lot of time thinking about. To improvise over a tune, it helps to know the notes in the tune, the chords underneath it, and the structure of the song. Artists can break these rules, and perhaps the best music comes when the rules are broken. But to break the rules, the cardinal idea of music—it has to sound good—cannot be lost. In other words, an artist has to implicitly justify her departure from the structure of the tune with the most convincing reasoning of all—the fact that the music, nonetheless, still sounds good.

It is only a small jump to move to the world of interpretation. Many have written about the aesthetics of law. In a similar vein, in a delightful article, Jerome Frank analyzes the relationship between legal interpretation and music. I preface this by saying that Frank was a noted legal realist, and I am no legal realist. Nonetheless, the intersection he explores between music and interpretation is, at the very least, interesting. For Frank, the relationship between a composer and a performer is quite similar to the relationship between a legislature and a judicial interpreter. The composer is the legislature, and it “cannot help itself” [1264]: interpretation of whatever is intended (or written, depending on one’s view of the idea of “intent”) must fall to the court—much like a piece of music, composed by someone perhaps generations ago, must fall to a performer.

Once the performer  receives the item to be interpreted, three considerations become important. First, the entire point of a performance is to perform: the performer must give due respect to the composer, because he was the one who made the song that the audience will enjoy. Sometimes in music—particularly jazz—you hear a performer that is ostensibly playing a tune but it is something completely different: he says he is playing “Autumn Leaves,” but he is improvising—almost too much—on the original tune. Sometimes this is good, but many times it isn’t, if only because the composer was the one who made the song (in this case, there is a time for soloing, but it’s important to “play the head,” as it were: “Autumn Leaves” is just fine as it is). As a general rule, I think this tracks to legislation, where the interpreter should do his best to remain true, within reason, to the law.  But, as a second consideration, there will always be an inevitable slippage between what the composer wanted (or even what the composer wrote) and what the performer does. The performer may make an inadvertent error, doing violence to the intention of the author. The composer may herself make a musical error, in which case the performer is left in the position of correcting it or leaving it as is. Finally, the interpreter may make a deliberate choice to change the composer’s creation. A jazz musician can do everything from “bending” the notes, to changing the rhythm, to even “going outside” the chord structure, creating dissonance where none was intended. The “free jazz” school, for example,  “developed in the 1960s as a rejection of conventional musical structures: things like melody, harmony, and chord progressions.”  While the free jazz school in many senses merges the role of composer and performer, creator and interpreter, it demonstrates the extreme end of the spectrum—musicians (and interpreters) can make choices given the structure of the music they are asked to perform.

As a musician, I focus much of the time on bebop, hard bop, and other “straight-ahead” styles—perhaps this explains my preference for textualism as a general interpretive method. Nonetheless, there is no doubt that the choices interpreters and performers make can sometimes make the composer’s or legislature’s creation make more sense—or sound better. And if that is the goal, then  sometimes the interpreter and performer will need to make on-the-spot decisions about how a cacophony of words (or notes) should be put together into a convincing performance. As Frank notes, interpretation is a human activity, and human creativity can make sense of what, on its own, may not make sense. Law is not always coherent, because humans are not always coherent. Yet interpreters, taking a step back, can sometimes (within the context of the interpretive rules) make sense of the law.

Frank’s piece underscores the balance that must be struck in interpretation between fidelity to legislative wishes and the “human” element of interpretation that must make sense of what is in front of a court. On one hand, slavish devotion to the law can lead to absurdity; and for that reason, we have an “escape valve” available for those cases, among others (like scrivener’s error). But in most cases, there is something important about remaining relatively true to the composer’s wishes. The composer created the music for a reason. The performer is being asked to perform it. For the performer to turn the tune upside down is a drastic choice that, at least in some sense, undermines the relationship between composer and musician.

Cannonball Adderley - IMDb
Cannonball Adderley

What does this musical story tell us about interpretive methodology? Methodology cannot perfectly guarantee correspondence between law creation and law interpretation. What is important, though, is that courts make a choice to commit themselves to rules in advance: just like performers (minus the free jazz folks) commit themselves to chords, notes, rules of rhythm, etc. The choice to commit oneself to a “structured and deliberate methodology” as Justice Malcolm Rowe and Michael Collins said in a recent paper, is immensely important. It prevents rank instrumentalism by an interpreter, where a result is chosen and then justified after the fact. A structured and deliberate methodology, as Rowe and Collins note, does not tie an interpreter’s hands, just like chords and notes do not tie a performer’s; but it does structure the choices an interpreter or musician can make, for the benefit of the listeners who  generally do not want to hear dissonance all night. As above, an interpreter who breaks these rules—say, to solve an absurdity—does so because the methodology permits it. He can justify his departure under the rules, much like a musician can justify a departure from notes and chords as justified according to the reality of what sounds good to an audience. The point, as Rowe and Collins say, is that the methodology forces an implicit justification.

The analogy between music and law is imperfect, in part because different musical styles ask different things of performers. A classical musician is likely to be closer to a composer’s wishes than a jazz musician is, and this is in part defined by the rules of the particular style. Nonetheless, the relationship between composers and performers does track to legislative activity. And it shows us how, in many aspects of life outside of law, rules are important even if imperfect.

Right Is Wrong

What an ordinary case can tell us about the problems of Canadian administrative law

Last month, I wrote here about a decision the Federal Court of Appeal (Alexion Pharmaceuticals Inc v Canada (Attorney General), 2021 FCA 157) which, although a good and faithful application of Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65, actually highlighted its conceptual defects. This is another post in the same vein, focusing on the choice of the standard of review in Morningstar v WSIAT, 2021 ONSC 5576 to point out (yet again) that the Vavilov approach to jurisdiction makes no sense. I then also point to a different issue that Morningstar usefully highlights with arguments for the administrative state based on access to justice. If you are tired of my fire-breathing neo-Diceyanism, you can skip to the latter discussion.

As co-blogger Mark Mancini explains in his invaluable Sunday Evening Administrative Review newsletter (subscribe!), the applicant in Morningstar tried to argue that correctness review should apply to a decision of the Workplace Safety and Insurance Appeals Tribunal to the effect that she was not entitled to bring a civil lawsuit against a former employer and should have pursued administrative remedies instead. The idea was that the jurisdictional boundary between a tribunal and the ordinary courts should be policed in much the same way as, Vavilov said, “the jurisdictional boundaries between two or more administrative bodies”, [63] ― that is, by have the court ensure the boundary is drawn correctly. But courts are not “administrative bodies” in the sense the Vavilov majority meant this phrase, and the Divisional Court makes short work of this argument. As Mark suggests, while the reasons it gives are very questionable, the conclusion is clearly correct.

But it shouldn’t be! Ms. Morningstar’s argument was, in Mark’s words, “doomed to failure” under Vavilov, but as a matter of principle it is actually exactly right. The Vavilov majority explains, sensibly, that

the rule of law cannot tolerate conflicting orders and proceedings where they result in a true operational conflict between two administrative bodies, pulling a party in two different and incompatible directions … Members of the public must know where to turn in order to resolve a dispute. … [T]he application of the correctness standard in these cases safeguards predictability, finality and certainty in the law of administrative decision making. [64]

That’s right so far as it goes. But what exactly changes if we replace the phrase “two administrative bodies” in the first sentence with “two adjudicative bodies”, so as to encompass the courts? Are the Rule of Law’s demands for predictability, finality, and certainty suddenly less stringent because a court is involved? Need members of the public not know where to turn in order to resolve a dispute? The Rule of Law applies in exactly the same way to jurisdictional conflicts between courts and tribunals as between tribunals, and should require correctness review in both situations.

It might be objected that this argument ignores the privative clause in the statute at issue in Morningstar. Section 31 of the Workplace Safety and Insurance Act, 1997 provides that the Tribunal “has exclusive jurisdiction to determine”, among other things, “whether, because of this Act, the right to commence an action is taken away”, and further that “[a] decision of the … Tribunal under this section is final and is not open to question or review in a court”. The true and tart response is: who cares? In Morningstar, the Divisional Court not only questioned and reviewed, but actually quashed the Tribunal’s decision on the question of whether, because of the Act, the applicant’s right to commence an action is taken away.

This isn’t a mistake, of course. Courts already ignore privative clauses, and rightly so. Vavilov explains why. As I pointed out here, it

embraces the Rule of Law principle … clearly and, crucially, as a constraint on the legislative power. According to the Vavilov majority,

Where a court reviews the merits of an administrative decision … the standard of review it applies must reflect the legislature’s intent with respect to the role of the reviewing court, except where giving effect to that intent is precluded by the rule of law. [23; emphasis added]

The majority goes on to specify that “[t]he starting point for the analysis is a presumption that the legislature intended the standard of review to be reasonableness”, [23] but “respect for the rule of law requires courts to apply the standard of correctness for certain types of legal questions”, [53] legislative intent notwithstanding.

If a statute attempted to make anything less than correctness the standard of review for jurisdictional boundaries between two administrative tribunals, Vavilov says that it should be ignored, because the Rule of Law, with its demands of predictability, finality, and certainty, requires it. A privative clause that attempts to exclude altogether review of decisions on the jurisdictional boundary between a tribunal and the ordinary courts should similarly be ignored.

But the Vavilov majority could not bring itself to take that approach, because it would be fatal to the entire conceit of deferential review on questions of law which the Supreme Court embraced in CUPE, Local 963 v New Brunswick Liquor Corporation, [1979] 2 SCR 227, and on various forms of which it has doubled down ever since. As Justice Brown wrote in West Fraser Mills Ltd v British Columbia(Workers’ Compensation Appeal Tribunal), 2018 SCC 22, [2018] 1 SCR 635, “in many cases, the distinction between matters of statutory interpretation which implicate truly jurisdictional questions and those going solely to a statutory delegate’s application of its enabling statute will be, at best, elusive”. [124] When an administrative decision-maker is resolving questions of law, notably when it is interpreting the legislation granting it its powers, it is always engaged in the drawing of the boundary between its jurisdiction and that of the courts. To admit ― as one ought to ― that the Rule of Law requires these questions to be resolved by courts would cause the entire structure of Canadian administrative law to come crashing down. And so, to preserve it, Vavilov asks the courts to pretend that things that are actually entirely alike from a Rule of Law perspective are somehow mysteriously different. It is, as I said in the post linked to at the start, an instance of post-truth jurisprudence.

Now to my other point. In a couple of ways, Morningstar reminds me of the Supreme Court’s decision in Canada (Attorney General) v TeleZone Inc, 2010 SCC 62, [2010] 3 SCR 585. The issue there was whether a litigant who sought private law damages as compensation for an allegedly unlawful act of the federal Crown had, before bringing a civil claim in a provincial superior court, to pursue an application for judicial review in the Federal Court to establish the unlawfulness. It was, in other words, a conflict between remedial regimes potentially open to alleged victims of government wrongdoing. The Federal Court of Appeal had held that such victims had to seek judicial review first; the Ontario Court of Appeal ruled that they did not. The Supreme Court agreed with the latter. It noted that following the Federal Court of Appeal’s approach “would relegate the provincial superior courts in such matters to a subordinate and contingent jurisdiction”. [4] It added too that the case was “fundamentally about access to justice. People who claim to be injured by government action should have whatever redress the legal system permits through procedures that minimize unnecessary cost and complexity.” [18]  

Morningstar, like TeleZone involves a conflict between two possible venues for redress, albeit of a private wrong rather than one resulting from government action. Employees who think they have been wronged in the course or during the breakdown of their employment relationship might seek compensation from the administrative regime supervised by the Tribunal or sue the employer in the civil courts. The substantive question in Morningstar was which of these regimes was the appropriate one on the facts. The courts should be able to resolve this conflict without deferring to the views of the venue administering one of these regimes, just as the Supreme Court did not defer to the Federal Court of Appeal in TeleZone. And, to be sure, there is a difference: the Superior Court that would be one of these conflicting jurisdictions would also be the court resolving the jurisdictional conflict. (The Divisional Court is a division of the Superior Court.) But that’s how our system is set up, and it’s not a reason for deferring to the other jurisdiction involved.

But the deeper and perhaps more important similarity between TeleZone ― and, specifically, the approach the Supreme Court rejected in TeleZone ― and Morningstar has to do with the functioning of the Workplace Safety and Insurance Act. Its section 31 directs employees and employers to apply to the Tribunal for a ruling on whether they are can go to court, before they can actually litigate their claims ― much like the Federal Court of Appeal in TeleZone said those who consider suing the Crown for damages must first go to the Federal Court and seek judicial review. Former employees might then find themselves in the Divisional Court (and perhaps further in the Court of Appeal) for a judicial review, before they can start litigating the merits of their dispute, if it is one that can be litigated in the Superior Court.

To repeat, in TeleZone, the Supreme Court held that the conflict between competing remedial regimes should be resolved in such a way as to maximize access to justice and minimize cost and complexity. Specifically, this meant that litigants should be able to avoid a pointless journey through the Federal Courts before launching their claims in the Superior Courts. The Workplace Safety and Insurance Act might as well have been designed to do the exact opposite ― maximize cost and complexity and undermine access to justice. Of course, that’s not what the legislature was trying to do. It wanted to preserve the jurisdiction of the Tribunal. The legislature might even say, “hey, it’s not our fault that the Tribunal’s decisions can be judicially reviewed ― we said they can’t”. But the legislature acts against a background of constitutional principles, which have long included the availability of judicial review. It knew that its privative clause is constitutionally meaningless. And still it went ahead and created this nonsensical arrangement, instead of simply allowing the jurisdiction of the Tribunal to be raised, perhaps by way of a motion for summary judgment, in any litigation in the Superior Court.

The creation of administrative mechanisms such as the Tribunal ― and their partial insulation from judicial review by the application of deferential standards of review ― is often said to promote access to justice. Perhaps it might do so in the abstract. If a dispute stays within the confines of an administrative tribunal, it will usually be handled more cheaply than in the courts. But, at the very least, such arguments for the expansion of the administrative state must take into account the reality that multiplying jurisdictions means multiplying conflicts both among them and, even more often, between them and the courts. And the resolution of these conflicts is neither cost-free nor something that can be simply wished away. It’s a reminder that, in public law as elsewhere in heaven and earth, there ain’t no such thing as a free lunch.

Morningstar is, in a sense, a rather uninteresting case, at least in the part that I have addressed here. A first-instance judicial review court applies a clear instruction from the Supreme Court and, despite some loose language in its reasons gets it right. But it is still revealing. In Canadian administrative law, courts that do things right, or roughly right, so far as their duty to apply precedent is concerned, are still doing things wrong if we judge them by first principles. This is not a good place for the law to be.

Does This Kat(z) Have Nine Lives?

In Katz, the Supreme Court set out the approach to judicial review of regulations. The Katz approach is (or, maybe, was) a carve-out from the general law of judicial review. As Professor Daly notes, it grants a “hyperdeferential” margin of appreciation to those that promulgate regulations. The Katz approach, based on previous cases, simply asked whether regulations are “irrelevant” “extraneous” or “completely unrelated” to the statutory scheme (Katz, at para 28), with the challenger bearing the onus.

Whether Katz has survived Vavilov is an open question. Vavilov purported to be a “comprehensive approach” to the determination of the standard of review (Vavilov, at para 17) for administrative action. On its face, that means that Vavilov‘s formula for determining the standard of review should apply to all instances of judicial review of administrative action—including judicial review of not only adjudicative acts, but “legislative” acts, as well. This would be a change, though: pre-Vavilov, there was (at least in theory) no judicial review for the “reasonableness” of legislative acts, and such decisions could not be set aside for errors other than jurisdictional ones. Specifically, Katz incorporates the old adage that judicial review does not entitle a court to review the merits of the legislative act, its “political, economic, or social…” context, or even whether it actually is rationally connected to its objective (see Katz, at para 28; Thorne’s Hardware, at 112-113).

Enter the recent decision of the Federal Court of Appeal (per Stratas JA) in Portnov. There are many issues in the case, but one concerned the propriety of Katz post-Vavilov. For the Court, Stratas JA suggests an easy answer to this question: “Thus, in conducting reasonableness review, I shall not apply Katz. I shall follow Vavilov” [28]. Stratas JA offers a number of reasons for this conclusion:

  1. The Katz approach (and its predecessors) were organized around the fundamental concept of “jurisdiction,” a “vestige” which Vavilov “eradicated” [22];
  2. Oddly, in the pre-Vavilov era, the Supreme Court sometimes simply reviewed regulations for their reasonableness under cases like Catalyst and Green [24].
  3. Vavilov is “intended to be sweeping and comprehensive” [25], and if there is a question as to whether Vavilov applies to an issue not addressed in that case, courts should ask how Vavilov’s general framework applies [25].
  4. Katz is a rule that “applies across-the-board to all regulations,” that “sits uneasily with Vavilov which adopts a contextual approach to reasonableness review” [27].

I think Portnov is right on the money.

Katz is problematic, in my view, because it (1) undermines the coherence of Vavilov’s simplicity; and (2) undermines the virtue of the contextual approach to reasonableness in Vavilov.

First, Vavilov was an attempt to finally address Binnie J’s comments in Dunsmuir, which encouraged a standard of review framework that “…get[s] the parties away from arguing about the tests and back to arguing about the substantive merits of their case” (Dunsmuir, at para 145). Part of this was the introduction of a presumption of reasonableness for most cases of judicial review. As I have written before, I have issues with this broad-based presumption (I do not buy the assumption that delegation necessarily implies deference) but it has one virtue: it may be wrong, but it is strong—it simplifies matters a great deal. That presumption, and the associated correctness exceptions, are largely principled. They are based on the core constitutional concepts of legislative sovereignty (choice to delegate) and the Rule of Law (guaranteeing judicial review of certain stringency on certain questions). A carve-out for regulations, with an ultra-deferential approach, simply complicates the conduct of judicial review for no principled reason. This is because whether an administrator is exercising adjudicative power or legislative power, it is delegated power all the same. And from the perspective of simplicity (with due regard for countervailing considerations) Vavilov‘s general principles for determining the standard of review should be determinative in all instances of judicial review of administrative action.

This is an issue of doctrine, but Stratas JA also provides good substantive reasons for not applying Katz. The contextual approach to reasonableness introduced by Vavilov, too, has its flaws: context can sometimes lead to uncertainty. But if context is adequately described by markers of unreasonableness (say, the “constraints” offered in Vavilov), the uncertainty is limited. Applying those constraints to the context of legislative instruments is perfectly justifiable. It may be, as in Catalyst or Green, that Vavilovian reasonableness is quite relaxed when dealing with certain legislative instruments. In other cases it may be more stringent. The constraints offered in Vavilov take account of the legislative context in a way that, at least to some extent, tracks the words and language used by the legislature to delegate power. With a fine-tuned approach like this, there is no need for a presumptive rule that puts a thumb on the scales for those that promulgate regulations based on any functional reasons.

Some judges of the Supreme Court have indicated an interest in preserving the coherence of Vavilov based on its general principles. In Wastech, for example, Brown and Rowe JJ filed a concurring opinion that would have applied Vavilov to the context of a commercial arbitration. They would have applied a correctness standard of review based on Vavilov’s holding on rights of appeal. These judges said this in Wastech:

[120]                     Factors that justify deference to the arbitrator, notably respect for the parties’ decision in favour of alternative dispute resolution and selection of an appropriate decision‑maker, are not relevant to this interpretive exercise. What matters are the words chosen by the legislature, and giving effect to the intention incorporated within those words. Thus, where a statute provides for an “appeal” from an arbitration award, the standards in Housen apply. To this extent, Vavilov has displaced the reasoning in Sattva and Teal Cedar.Concluding otherwise would undermine the coherence of Vavilov and the principles expressed therein.

I think this is the right approach. Vavilov’s general principles have much to say about many forms of decision-making. And, luckily for us, the fact that these principles have something to say makes judicial review much simpler for the parties and courts. No need for special rules any longer, and so I hope this Kat(z) is out of lives.

For more on this issue, see the following resources:

Paul Daly

John Mark Keyes

The Disuse of Knowledge in the Administrative State

Regulation is not the right tool for intelligently dealing with complexity

Advocates for the administrative state typically promote it on the basis of its great usefulness in contemporary society. Without the expertise that administrators bring to their work, they say, we could not deal with the complexity of the world around us. Although, in the wake of the Supreme Court’s ruling in Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65, this is no longer part of the rationale for deference to administrative decision-makers in Canadian law, this view is still widely held by administrative theorists in North America. Indeed it is part of the pro-administrativist critique of Vavilov, for example in a post by Mary Liston over at Administrative Law Matters. But this view is fundamentally wrong, even backwards.

A passage from Matthew Lewans’ book Administrative Law and Judicial Deference captures this traditional view nicely. Compared to the past,

we must tackle a broader array of complex social issues―human rights, immigration, national security, climate change, economic policy, occupational health and safety, public access to health care and education, etc―about which there is deep disagreement. And we cannot hope to address these issues intelligently without harnessing the experience, expertise, and efficiency the modern administrative state provides. (187)

Other pro-administrativists, if they have not themselves written such things, would I think wholeheartedly agree with them. To the extent that I specifically criticize Professor Lewans’ argument, below, it is only in a representative capacity.

One thing to note about this passage, and its innumerable equivalents elsewhere, is that it is not supported by any detailed arguments or evidence. The hopelessness of intelligently dealing with the issues that consume contemporary politics without “harnessing the experience, expertise, and efficiency” of the bureaucracy is simply asserted by writers and taken on faith by readers. But I think we need to query these claims before accepting them, and not because I have watched too much Yes, Minister to have much faith in the experience and expertise, let alone the efficiency, of the administrative state.

More fundamentally, the state ― and especially the administrative state ― often is not merely lousy at addressing complexity intelligently, but actively opposed to doing so. The reason for this is that its laws and regulations, to say nothing of its discretionary rulings, serve to eradicate rather than harness the information needed for intelligent behaviour in a complex world. They give both the rulers who wield them and the citizens who clamour for them the illusion of purposive action and control, while actually preventing the operation of the mechanisms that serve to communicate information about the world much more effectively than laws and regulations ever can: prices and markets.

As F.A. Hayek famously pointed out in “The Use of Knowledge in Society“, there is an enormous amount of information that even the best experts armed with the boundless powers of the modern administrative state cannot acquire: information about the circumstances, needs, and desires of individuals and organizations. This information is unlike the scientific, technical knowledge that experts might be able to centralize in the hands of the bureaucracy. In particular, this local knowledge changes much too quickly to be communicated and assimilated by an authority. As Hayek explains, “the economic problem of society” ― that is, the question of how to use the resources available to us most effectively ― “is mainly one of rapid adaptation to changes in the particular circumstances of time and place”. From this,

it would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them. We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders. 

I would add also that, even if a “central board” could acquire information as fast as individuals and businesses, it could not make new rules to reflect this information fast enough, or consistently with the requirements of the Rule of Law, which include the relative stability of the legal framework.

But how do individuals acquire knowledge which, Hayek insists, even a sophisticated bureaucracy cannot gets its hands on? The answer is, through market prices, which reflect aggregate data about the relative scarcity of goods and services available in a given time and place: “Fundamentally, in a system in which the knowledge of the relevant facts is dispersed among many people” ― which is to say, in any society in which there many people, and especially in complex modern societies to which pro-administrativsts such as Professor Lewans refer, “prices can act to coördinate the separate actions of different people in the same way as subjective values help the individual to coördinate the parts of his plan”.

Hayek gives the example of how, if something people need to produce other things other people need becomes more scarce, such as its price goes up

without an order being issued, without more than perhaps a handful of people knowing the cause, tens of thousands of people whose identity could not be ascertained by months of investigation, are made to use the material or its products more sparingly; i.e., they move in the right direction. 

The right direction, that is, from society’s perspective ― the direction of the society’s overall resources being used more effectively where they are most needed. Hayek pointedly describes the functioning of the price mechanism, its ability to economically and quickly communicate information no bureaucracy could gather “by months of investigation” as a “marvel”. He is right.

But, to repeat, the state all too often prevents this marvel from happening. The state outlaws market transactions, and so prevents the communication of information through market prices, left, right, and centre, and interferes with those transactions it doesn’t outlaw. Ronald Reagan summed up the state’s ― and the statists’ ― thinking: “If it Moves, Tax it. If it Keeps Moving, Regulate it. And if it Stops Moving, Subsidize it.” This is not all the state does, of course. The state, if it functions well, also enables markets by keeping peace, protecting property rights, and enforcing contracts. They state may supplement markets by correcting genuine market failures, though these are rather fewer and further between than statists tend to assume. But there’s no denying that much of what the state does, and especially much of what pro-administrativists ― be they on the political left (as most of them have long tended to be) or on the right (as the followers of Adrian Vermeule and other common good will-to-power conservatives, about whom co-blogger Mark Mancini has written here) consists in overriding, displacing, and even criminalizing markets, and so destroying rather than harnessing information. The state not only is stupid; it makes us less intelligent too.

The administrative state, specifically, is especially guilty of this. To quote Professor Lewans once more ― and again, in a representative capacity ―

There are good reasons why legislatures invest administrative officials with decision-making authority. While a legislative assembly might be able to forge sufficient consensus on broadly worded objectives as a platform for  future action, it might reasonably conclude that interpretive disputes regarding those objectives outstrip the capacity of the legislative process. (199)

To be clear, “interpretive disputes” here are disputes about the specification of these “broad objectives”, as well as the means through which the objectives, so defined, are expected to be achieved. What Professor Lewans is saying is that delegation of power to the administration vastly increases the state’s overall ability to regulate ― that is to say, to override, displace, and criminalize markets. Legislatures might never achieve consensus on the detail of a regulation, and so wouldn’t enact any since they need at least a bare-bones consensus to enact law. But thanks to the dark wonders of delegation, the need for consensus is dispensed with, or at least reduced, and more regulation can be enacted. And of course the administrative state is simply bigger than a legislature, so it has more person-hours to expend on producing ever more regulation. The legislative process ― at least, proper legislative process, not what all too often passes for it ― is also time-consuming, while one of the supposed virtues of the administrative state is its flexibility. Faster regulatory change, while it cannot actually be effective enough to substitute or account for the information transmitted through the price system, is more disruptive to markets.

If we actually want to address the issues that confront complex contemporary societies intelligently, the administrative state is not our friend. More often than not, it serves to reinforce the state’s ability, to say nothing of its resolve, to prevent individuals and businesses from acting intelligently in the face of complexity by eliminating or falsifying the information they need to do so. At best, the administrative state then tries to provide a simulacrum of an intelligent response ― as, for example, we ask bureaucrats to puzzle out who may come to our countries to work based on what they, from their cubicles, deem to be market needs, instead of simply opening the borders and letting employers and potential workers make their own arrangements.

Why, then, are people ― and more and more people, too, as the emergence of right-wing pro-administrativsim shows ― so convinced that the administrative state is necessary? Some, alas, are not especially interested in social problems being solved effectively. They even make a virtue of inefficient institutions, slower economic growth, and more coercion. Such feelings may be especially widespread among the common good will-to-power crowd. But more people, I suspect, simply misunderstand the situation. As Hayek pointed out,

those who clamor for “conscious direction” … cannot believe that anything which has evolved without design (and even without our understanding it) should solve problems which we should not be able to solve consciously.

They think that central direction, which only the state, and specifically the administrative state, can provide is necessary. They are mistaken, and in a way that is the sadder because they unwittingly demand the exact opposite of what they actually hope for.

Post-Truth, Redux

A faithful application of Vavilov reasonableness review exposes the rot at the core of Canada’s administrative law

Co-blogger Mark Mancini has already posted on the Federal Court of Appeal’s recent decision in Alexion Pharmaceuticals Inc v Canada (Attorney General), 2021 FCA 157. He argues that it is a good illustration of how courts should review administrative decisions on the reasonableness standard, following the Supreme Court’s instructions in Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65. I agree with Mark’s analysis, so far as it goes: as a rigorous application of Vavilov that rightly emphasizes legal constraints on administrative decision-making, Justice Stratas’ reasons for the Court in Alexion are excellent. (In fact, let me highlight an additional passage that Mark does not mention: Justice Stratas notes, rightly, that administrators must interpret statutes “in a genuine, non-tendentious, non-expedient way … Result-oriented analysis is no part of the exercise”. [37] Amen!)

But, in my view they are also an excellent illustration of the considerable flaws of the Vavilov framework, with its insistence on the centrality of administrative reasons on all issues subject to the reasonableness standard of review, including issues of statutory interpretation. Indeed, Alexion illustrates the fundamental soundness of the approach taken in the case that is the great bogeyman of Canadian administrative law: the House of Lords’ Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147. The concurring judges in Vavilov accused the majority of following Anisminic. If only!

As Mark explains in more detail, Alexion reviewed a decision by the Patented Medicine Prices Review Board that the company was selling a product “at a price that, in the Board’s opinion, is excessive” (s 83 of the Patent Act). The Court of Appeal invalidated the Board’s decision, holding that it did not explain its reasoning on key issues, including the interpretation of s 85 of the Patent Act, which sets out the criteria the Board must apply in deciding whether the price of a patented medicine is “excessive”. As Justice Stratas notes,

[a]t best, on this point the Board obfuscated, making it impossible for a reviewing court to know whether the Board has helped itself to a power it does not lawfully have. By obfuscating, the Board has effectively put itself beyond review on this point, asking the Court to sign a blank cheque in its favour. … 

[T]he Board may have helped itself to powers the statute has not given it. The absence of a reasoned explanation on certain points means that we cannot be more definitive than that. [44]-[45]

Justice Stratas notes that the Board appears to have found the pricing of Alexion’s product unreasonable, and expresses his “fundamental concern … that the Board has misunderstood the mandate Parliament has given to it under s 85. At a minimum, a reasoned explanation on this is missing“. [48; emphasis mine] And further:

Section 85 speaks of “excessive” pricing, not  “reasonable” pricing. The two seem much different. If in fact they are not different, in the circumstances of this case the Board had to explain why. Nowhere does the Board do so. [52; emphasis mine]

If I may paraphrase Justice Stratas, he is saying: it looks like the Board is doing something it’s not supposed to be doing under the statute, but hey! maybe it’s not do these things, or maybe it can do these things after all ― and we, the Federal Court of Appeal, can’t know for sure. The suggestion here ― that, absent good quality reasons given by the administrator, a reviewing court cannot say whether the administrator, in Justice Stratas’ eloquent words, “helped itself to a power it does not lawfully have” ― is entirely consistent with Vavilov. There the majority insisted that

the focus of reasonableness review must be on the decision actually made by the decision maker …  The role of courts in these circumstances is to review, and they are, at least as a general rule, to refrain from deciding the issue themselves. Accordingly, a court applying the reasonableness standard does not ask what decision it would have made in place of that of the administrative decision maker … conduct a de novo analysis or seek to determine the “correct” solution to the problem. [83]

On this approach, Justice Stratas and his colleagues are not supposed to come to their own view of the meaning of s 85 and verify the Board’s compliance with it. They are confined to assessing the Board’s explanations as to whether it has complied. Absent an explanation, the exercise fails. Vavilov is an improvement over the earlier cases in that, when such failures occur, it allows the reviewing court to stop there and send the matter back to the administrator for a do-over, instead of making up an explanation and deferring to it. (See Mark’s post for more on this).

But to say that Vavilov improves over what I once described as a post-truth jurisprudence requiring judges to play chess with themselves and contrive to lose is not to say much. In fact, Vavilov does not even leave post-truth jurisprudence behind. For how else should we think of a requirement that judges ― of an appellate court, no less ― insist that they “cannot be definitive” about the interpretation of a statutory provision and about whether an administrator “helped itself to a power it does not lawfully have” ― which is to say, exceeded its jurisdiction (there, I said it) in applying that provision?

The truth is that judges can be definitive on such things. The truth is that Justice Stratas has much to say about the meaning of s 85 and the way in which it has to be applied, as well as the more general principles of statutory interpretation (see, in particular, his important caution that “[t]he authentic meaning of the legislation … is the law, not what some politicians may have said about it at some place, at some time, for whatever reason”). [53] (I recently addressed this point here.) The truth is that, as Justice Stratas notes, “[o]ver and over again, authorities have stressed that the excessive pricing provisions in the Patent Act are directed at controlling patent abuse, not reasonable pricing, price-regulation or consumer protection at large”. [50] A jurisprudence that requires a court to assert that, notwithstanding all of this, an administrative tribunal might somehow explain all that away, and show that when it said “reasonable” it meant “excessive”, and that when it “disregarded most of the … authorities”, [51] it still complied with the law, is the jurisprudence of la-la-land.

In reality, the Board’s decision has all the appearances of a textbook example of what Lord Reid in Anisminic described as an administrative tribunal having “misconstrued the provisions giving it power to act so that it failed to deal with the question remitted to it and decided some question which was not remitted to it”. When a tribunal does so, even though in a narrow sense “the tribunal had jurisdiction to enter on the inquiry”, it loses jurisdiction in a broad sense, and the resulting decision is a nullity. Canadian courts should be able to say so ― which means that they should be free, contra Vavilov, to “decide the issue themselves”, without waiting, or even affecting to wait, to be instructed by administrators who lack the legitimacy, the independence, and the competence to speak on questions of law with any real authority.

Why is it that we can’t have nice things? An important part of the problem is the fusion, in Canadian administrative law, of what in the United Kingdom (and New Zealand) are known as legality review and reasonableness review into a (supposedly) unified category of merits review. To make things worse, the Supreme Court remains committed to an oversimplified approach to merits review, such that it almost always has to be conducted on the same reasonableness standard. The reasons-first approach may be suitable for review of fact- or policy-based administrative decisions, but applied to issues of statutory interpretation it leads to Alexion-style absurdity.

What makes Alexion even more galling, though, is the nature of the administrative body it concerns. And that’s not only, and perhaps even so much, that, pursuant to s 91 of the Patent Act the Board’s members can legally be the first five strangers the Minister of Health meets on the street one day ― or hacks. (As I wrote this, I thought I’d look up the Board’s actual membership, in the hope of being able to add a disclaimer to the effect they are all, in fact, wise and experienced experts. Only, there doesn’t seem to be any information about them on the Board’s website. Of course that doesn’t prove that they actually are hacks, let alone people the Minister met on the street, but one might have thought some transparency was in order. UPDATE: Mea culpa. The information is there, however counter-intuitive its presentation may seem to me. The members’ bios are here.)

Worse is the fact that the Board acts as both prosecutor and judge in the cases it handles, the separation of powers be damned. This par for the course in the administrative state, to be sure ― but no less pernicious for all that. I note, for the sake of completeness, that it is “Board Staff” that “filed a Statement of Allegations” against Alexion, rather than Board members ― but staff (pursuant to s 93(2)(b) of the Patent Act) are managed by the Board’s Chairperson, i.e. one of its members. The Board’s internal “separation of powers” is more sham than ersatz.

Why exactly should the views of this judge-and-prosecutor, this two-headed abomination against due process of law, about the meaning of the statute it is charged with applying be entitled to any regard by actual judges? In Vavilov, the Supreme Court insists that this is to respect Parliament’s intent. But, as I have been saying since my first comment on Vavilov here, the Court ignores Parliament’s direction, in s 18.1(4)(c) of the Federal Courts Act that the federal courts grant relief when administrative decision-makers err in law, which clearly requires these courts to come to their own view about what statutes mean and whether the administrator in a give case has complied with the law. In this way too, Vavilov perpetuates Canadian administrative law’s disregard for truth.

In case this needs to be clarified, none of the foregoing is a critique of Justice Stratas and the decision in Alexion. As I said above, I think that the decision is about as good as it could have been while being a faithful application of the Vavilov framework. If the Board takes what Justice Stratas seriously, it will make a much better, and most importantly, a lawful decision next time. It is the framework itself that is rotten.

But the rot set in four decades ago, and no judge of the Federal Court of Appeal can solve them ― even one who has made Herculean efforts to, like Justice Stratas. Perhaps even the Supreme Court cannot fully undo the damage it has inflicted on our law when it turned away from the Anisminic path and waded into the dark forest of deference to the administrative state. But if Alexion illustrates the possibilities ― and the limits ― of what the Supreme Court accomplished in Vavilov, and I think it does, then one has to conclude that the Supreme Court hasn’t tried very hard at all.

Alexion: No Blank Cheques Here

In Alexion Pharmaceuticals Inc v Canada (Attorney General), 2021 FCA 157, the Federal Court of Appeal clarified the law of judicial review post-Vavilov (particularly as it applies to reasonableness review) and set out an important reminder: administrators are not a law unto themselves. In order to make sure that this is the case, particularly in situations of legislative interpretation, administrators must explain their decisions. They must do so in a way that engages with the statute under interpretation. In this way, Alexion says something important: when administrators interpret statutes, there is only so much of a margin of appreciation. They must deal with the law.

I first describe the controversy in Alexion and the Court’s holding. Then I outline why this decision is a landmark one for the post-Vavilov world.

**

Alexion is a pharmaceutical company that produces a drug called Soliris. The Patented Medicine Prices Review Board had to decide whether Alexion priced Soliris excessively under the Patent Act. The relevant section is s.85 (1), which lists a number of factors that the Board must consider to make a determination. One of the factors is “the prices at which the medicine and other medicines in the same therapeutic class have been sold in countries other than Canada” (s.85(1)(c)). Only after a consideration of these factors can the Board turn its attention (if necessary) to s.85(2), which asks the Board to also consider “the costs of making and marketing the medicine and any other factors it considers relevant.”

As the Court aptly notes, “Section 85 is the law. The Board’s analysis should start with the law. Whatever the Board does must be consistent with the law” (Alexion, at para 34). The Board, in making its excessive pricing decision, noted that it is charged with determining “the relevance and weight of each factor” in s.85 (Alexion, at para 43). The Board concluded that Soliris was priced excessively, largely because it was priced more than the lowest international price in a list of seven comparator countries (Alexion, at para 3).  Put differently, out of all the seven countries, the Board found Soliris to be priced excessively because it was not the cheapest option. This was despite the fact that the Board’s own guidelines suggested that, normally, “the highest international price” is a key comparator (Alexion, at para 57). In reaching this conclusion, the Board seemingly followed a standard of “reasonableness”: because Soliris is price higher than one of the comparator countries, the Board implicitly concluded that the price of Soliris is unreasonable (see Alexion, at para 51).

For the Court, Stratas JA concluded that the Board failed to properly justify its decision with reference to the statute at hand: Alexion, at para 64, 66. The Court made a number of important comments justifying this decision:

  1. Prior to Vavilov, “…the Supreme Court instructed us to do our best to try to sustain the outcomes reached by administrators” which included “reviewing courts [picking] up an administrator’s pen and [writing] supplemental reasons supporting the administrators’ outcomes” (Alexion, at para 8). This “ghostwriting” was, as is evident, “antithetical to the reviewing courts’ role as an independent reviewer” (Alexion, at para 8).
  2. In this sense, there is a clear relationship between reasons and outcome on judicial review (Alexion, at para 28 et seq). While Vavilov speaks of outcome and reasons as separate, there are many cases where the reasoning on a particular legal question will lead to an illegal outcome; for example, in this case, “certain words the Board used suggest that it went beyond its permissible statutory mandate by regulating the reasonableness of pricing, rather than preventing abusive pricing…” (Alexion, at para 11).  In this case, when the Board spoke of “reasonableness” rather than abusive pricing, “[i]t may be that the Board was trying to reach an outcome that on the facts and the law was not reasonably open to it” (Alexion, at para 32).
  3. The failure of explanation in this case arose on a few different fronts:
  • The Board utterly failed to deal with the most important and central restriction on its authority: s.85 of the Patent Act. We  know that in paras 120-122 of Vavilov the Court notes that “the merits of an administrative decision maker’s interpretation of a statutory provision must be consistent with the text, context and purpose of the provision,” and that the decision-maker must demonstrate that its alive to these “essential elements.” This is because “the governing statutory scheme is likely to be the most salient aspect of the legal context relevant to a particular decision” (Vavilov, at para 108). So when the Board adopted a standard of reasonableness rather than addressing the actual point of the statute—set out in s.85 and the associated case law—it transgressed its authority.
  • The Board’s failure to explain its departure from its own Guidelines was problematic from a reasonableness perspective. While Guidelines adopted by the Board cannot supercede an analysis based on s.85 itself, they can validly guide discretion. Here, the Board did not explain why it did not follow its own Guidelines, which stressed the highest price comparator country.

**

There is a lot packed into Alexion, but I think it is worth noting the various things the Court does with Vavilov, especially when it comes to the reasonableness standard.

First, the Court arguably doubles down on the statute as the most important restraint on administrative power. Many of us who read Vavilov for the first time in December 2019 fastened onto paras 108-110 (and also paras 120-122) of that decision as quite important. Those paragraphs hardened a cardinal rule of administrative interpretations of law: it is the statute that the administrator is interpreting (its text, context, and purpose) that cabin the discretion of an interpreting administrator. Now, how this happens is where the rubber meets the road. But the fact that the statement was made by the Supreme Court—and that it is adopted wholeheartedly by the Court of Appeal in this case—is promising.

There are, of course, different ways that a court can ask an administrator to abide by the terms of its statute, and these ways can be more or less interventionist. Alexion is somewhat reminiscent of another case decided post-Vavilov, Richardson. I blogged about that case here. While the comments made by Nadon JA in that case were obiter, they staked out an even more radical understanding of Vavilov’s paragraphs 108-110 and 120-122. In that case, the administrator at hand erroneously applied the “implied exclusion” rule of interpretation, which the Supreme Court has held is insufficient as the sole basis on which to understand the meaning of statutory provisions (see Green, at para 37). Imposing the Supreme Court’s method of interpretation, particularly with regards to particular canons, is one way to force an administrator to abide by a statute. Another, more general and less stringent way, is what Stratas JA did in Alexion. There the Board misapprehended its own statutory purpose and failed to actually deal with the overriding goal of s.85: excessive & abusive pricing. It also ignored many of the factors set out in s.85(1). This is just a different way of getting at paras 108-110 of Vavilov: the Board failed to address its statute under the governing approach to statutory interpretation.

The fact that the Court in Richardson and Alexion did the same thing in different ways is perhaps indicative of a challenge with Vavilov. The decision says a lot, not all of it always internally consistent. Specifically, the challenge going forward with this rather legalistic vision of reasonableness review is how it meshes with the deference that is built-in to the Vavilov framework. Vavilov makes clear at various points that administrators are not asked to engage in a formalistic interpretation exercise (para 119), and that ‘[a]dministrative justice’ will not always look like ‘judicial justice’…” (para 92). Accordingly, as Professor Daly notes, “some portions of Vavilov are liable to become battlegrounds between different factions of judges, those who favour more intrusive review on questions of law in one camp, their more deferential colleagues in the other” (at 15). One could conceive, as Professor Daly does, of Richardson as “betraying a favouritism for an interventionist standard of reasonableness review on issues of statutory interpretation” (at 14).

However, I would say that Alexion and Richardson are of the same ilk, different points on a similar spectrum. Both are directed towards subjecting administrators to legal requirements, but Alexion does so in a more general way, faulting the administrator for failing to address the relevant statutory purpose (among other things). Richardson does the same thing in a more specific way, faulting an administrator for applying a proper tool of interpretation to the exclusion of the statutory purpose. Both, in my view, are plausible views of Vavilov.

Methodologically, there are other important elements of Alexion. One element is the connection that Stratas JA draws between reasons and outcome. Vavilov speaks of reasons and outcome as separate things, but in reality, they are probably intrinsically connected in at least some cases. Alexion provides a good example. In many cases, it was simply impossible for the Court to determine whether the Board had ventured an opinion on the core legal issue at play in the case. Where the Board did offer an opinion, it cast its decision in terms of the wrong legal standards.  This led it astray, and it was led astray because its reasoning failed to glom onto the important part of the entire thing: the statute.

This leads to a final point about Alexion. Thank goodness we no longer need to worry about courts coopering up deficient decisions under the Nfld Nurses line of cases. As the Court in Alexion mentions, this decision could have gone a very different way under pre-Vavilov case law. The Court would have asked itself to supplement reasons for decision instead of supplanting them.  But as the Court notes, “[m]any of us recoiled at this” (Alexion, at para 9). Why? Because it offends the principle of legality, fundamental to the administrative law system, for a court to uphold a decision that is legally flawed. Of course, deference sometimes asks us to abridge the principle of legality in a strict sense; but there are extremes, and a court making a decision for an administrator is to my mind (and, apparently the mind of the Supreme Court) a bridge too far. As the Court in Alexion says, there are no blank cheques in the law of judicial review (Alexion, at para 44).

All told, Alexion is an important recap of developments post-Vavilov. Particularly on the application of the reasonableness standard, the Court moves the needle in important ways.

The Core of It: Quebec Reference and Section 96

At the end of June, the Supreme Court of Canada released its decision in the Court of Quebec case (what I call, unoriginally, the Quebec Reference). The main question in the case: does art. 35 of the Code of Civil Procedure, which grants the Court of Quebec exclusive jurisdiction over all civil disputes up to a value of less than $85000, abridge s.96 of the Constitution Act, 1867. Section 96, in general, protects the role of the superior courts. The Court (per Côté & Martin JJ) concluded that the $85 000 limit, combined with the broad, exclusive grant of power to the Court of Quebec over private law issues, did abridge s.96. Wagner CJ filed a partial dissent and Abella J filed a dissent.

This case contains elements that will both clarify and muck up the s.96 world. On one hand, the Court convincingly elucidates the importance of the rule of law, the core role of the superior courts, and the constitutional limits on legislative derogation of superior court powers. On the other hand, the Court introduces a new “modified” test to add to the s.96 mix, and does not do enough to clarify the circumstances in which this test can be invoked.

As a side note, the Court also briefly addressed the deference problem that was raised by the court below. I wrote about that issue here. The Court did the right thing and held that the issue was moot given Vavilov.

***

Section 96 is an odd constitutional provision, in part because the bare text does not correspond to the role that the provision now plays. Section 96 gained a “judicially-nourished luxuriance” which added substantive heft to what is, on first glance, just an appointment power vested in the federal government. Now, s.96 (along with other provisions) protect the role of the superior courts as “the centerpiece of the unitary judicial system” (Quebec Reference, at para 29). In administrative law, s.96 plays an important role. It prevents the legislature, in so many words, from divesting superior courts of so-called “core” powers in favour of administrative decision-makers.

Against this backdrop, Côté and Martin JJ began their opinion by looking to the historical context in which s.96 finds itself. As we know, constitutional provisions like s.96 cannot be understood by viewing them in temporal isolation. By now, it is obvious that constitutional provisions must, in part, be interpreted by looking into the historic context—say, the historical purpose—behind these provisions (see, most famously, Big M at 344; but more recently Comeau, at para 52). In this case, the “compromise reached at Confederation that is central to Canada’s judicial system, as well as the role and purpose of s.96” formed the bulk of the analysis [30].

The historical analysis, for Côté and Martin JJ, led to the conclusion that national unity and the rule of law were the “two key principles” on which the role of the superior courts is based (Quebec Reference, at para 42). Taken together, these principles guarantee “a nucleus” to the superior courts, and s.96 “forms a safeguard against erosion of the historic compromise” (Quebec Reference, at para 41). That compromise was the division of labour between superior courts in the province and the federal government, which holds an appointment power designed to “reinforce the national character of the Canadian judicial system” (Quebec Reference, at para 43).

As for the Rule of Law, the Court made some very important comments about the role of s.96. For Côté and Martin JJ, “[t]he rule of law is maintained through the separation of judicial, legislative, and executive functions” (Quebec Reference, at para 46). The superior courts play an important role because “the task of interpreting, applying and stating the law falls primarily to the judiciary” (Quebec Reference, at para 46). They are best positioned to guard the rule of law. In fact, even though the Court has sometimes spoken favourably about the role of provincial courts in guarding the rule of law, Côté and Martin JJ specifically noted that superior courts are the “primary” guardians of the rule of law.

What does all of this mean? The bottom line for the Court—and this is somewhat of a new formulation—was that s.96 protects against the creation of parallel or shadow courts that mirror the functions of s.96 courts (see paras 53 et seq). To this end, the court has historically developed two tests to prevent legislative derogation from s.96. First is the so-called Residential Tenancies test, determines whether a legislative grant “affects a jurisdiction that has historically been exercised by the superior courts” (Quebec Reference, at para 71). The second is the so-called “core jurisdiction” test, solidified in MacMillan Bloedel. Both have different functions in preventing the creation of parallel courts. The Residential Tenancies test protects the historic jurisdiction of the superior courts. It “was established at a time when…a modern administrative state was emerging in Canada” to which the Court was “sensitive” (Quebec Reference, at para 77). For the Court, a purpose of this test was to “avoid stifling institutional innovations designed to provide administrative rather than judicial solutions for social or political problems” while still protecting the historical jurisdiction (Quebec Reference, at para 77). The core jurisdiction test, on the other hand, serves as a backstop, even if a particular grant passes the Residential Tenancies test. While what the core of superior court powers is necessarily amorphous, some common things jump to mind: judicial review jurisdiction, and for our purposes, “general jurisdiction over private law matters” (Quebec Reference, at para 82). Here, the Court concluded that the superior courts’ core jurisdiction “…presupposes a broad subject-matter jurisdiction whose scope corresponds, at the very least, to the central division of private law…” (Quebec Reference, at para 83).

Typically, the courts have not fleshed out the sorts of factors to consider when determining where a core superior court power is affected by legislative derogation. In the Quebec Reference, Côté and Martin JJ endeavoured to provide guidance where the legislature has vested a court with provincially appointed judges a jurisdiction as broad as the one in the Quebec Reference (Quebec Reference, at para 88). The judges called the collection of these factors the “modified” core test (Quebec Reference, at para 79). These factors included:

The scope of the jurisdiction being granted, whether the grant is exclusive or concurrent, the monetary limits to which it is subject, whether there are mechanisms for appealing decisions rendered in the exercise of the jurisdiction, the impact on the caseload of the superior court of general jurisdiction, and whether there is an important societal objective. This list is not exhaustive. Other factors may be relevant in different contexts: one need only think, for example, of geographical limitations.

Given that the grant of power in this case was broad and exclusive—granting the Court of Quebec power over the entire law of obligations at the monetary limit (Quebec Reference, at para 99)—s.96 was abridged by the legislative grant.

A major question that the Court addresses in this case is the scope of its reasons. That is, does this modified “core” test and the factors it involves supplant the old “core jurisdiction” test?:

The multi‑factored analysis we are adopting here is not intended to replace the current law. The analysis under s. 96 continues to involve two tests. The first — the Residential Tenancies test— continues to apply to any transfer of historical jurisdiction of the superior courts to an administrative tribunal or to another statutory court. The second — the core jurisdiction test — continues to apply in order to determine whether a statutory provision has the effect of removing or impermissibly infringing on any of the attributes that form part of the core jurisdiction of the superior courts. Where a transfer to a court with provincially appointed judges has an impact on the general private law jurisdiction of the superior courts, the question whether the infringement on the core jurisdiction is permissible or impermissible should be answered having regard to the factors discussed above. 

***

While Wagner CJC and Abella J’s opinions are interesting and contain information worth reading, I think there are good and bad elements of the majority’s opinion in this case.

First, the good. It is reassuring to see a “resounding endorsement” of the role of the superior courts in the Canadian constitutional order. Sounding in both national unity and the rule of law, the majority has—more than rhetorically—strengthened the “rampart” that s.96 erects against the creative reassignment of superior court powers (Quebec Reference, at para 145). Specifically, the Court’s comments on the Rule of Law are interesting and welcome. We see, here, a glowing endorsement of the role of the separation of powers in Canadian law, and the role of the Rule of Law in relation to the separation of powers. For a Court that has insisted there is no strict separation of powers in Canada, it is interesting to see that, whatever the content of the separation is, it does real analytical work in relation to s.96.  Relatedly, it is reassuring to see the Court draw a direct separation between provincial courts and superior courts. Clearly, the latter have a greater constitutional footing than the former.

Another good piece of this decision: the synthesis of the case law around the prohibition of parallel courts. Section 96 has a somewhat tortured history, and it is defensible for the Court to distill the cases down to a simple proposition: legislatures cannot create parallel or shadow superior courts. In fact, this is the role s.96 has typically played in the constitutional order. Consider, for example, the controversy at issue in Farrah. There, a provincial legislature created a tribunal that had exclusive jurisdiction over questions of law, supported by privative clauses. As the Court noted in Crevier, the Farrah problem was the de facto creation of a s.96 court (Crevier, at 238). More examples abound, and so the Quebec Reference’s synthesis of this important point—the main goal of s.96—is important and helpful.

Now, on to the (potentially) bad: there will be an inevitable confusion that arises in the application of the modified core test the Court endorses. Professor Daly says that this approach is contextual, and meshes well with other aspects of Canadian public law. Contextual tests are not necessarily bad, but it is worthwhile to point out that what they provide in flexibility they trade away in certainty. In this context, a lack of certainty could arise in two ways. First, and in general, I wonder whether we need so many tests to govern s.96. As a reminder, we have three: the Residential Tenancies test, the core test, and the modified core test for cases like the Court of Quebec. The life of the law is experience, and so the Court in the Quebec Reference had to work with the tests that had been developed. That said, in a perfect world, I do think there is a way to simplify the test to determine whether s.96 has been abridged. In my view, most of the analytical work can be done by delineating the categories of “core” jurisdiction that have been recognized by the Court in the case law. While the Residential Tenancies test does play a historical function, ensuring that s.96 protects the jurisdiction of the superior courts at least as it was at Confederation, the core jurisdiction categories could also serve this function while providing more categorical guidance. This would, I admit, entail drawing rather broadly the content of the “core,” and this is what, in part, divided the various opinions in the Quebec Reference. On this account, the core would include substantive considerations (such as judicial review jurisdiction, private law jurisdiction, etc) rather than simply procedural powers concerning the management of inherent process (see Abella J’s characterization of core powers at para 301). There would have to be play in the joints, of course, to allow for institutional innovations resulting from the exercise of legislative sovereignty, particularized by s.92(14) of the Constitution Act, 1867; but I am candidly unsure why one test, grounded in the rule of law, which protects substantive and procedural powers of the superior courts is undesirable.

Relatedly, the modified core test is supposedly limited to cases involving courts, and the lead opinion emphatically says that it is not replacing the law when it uses this modified test (see para 144) . But as Paul Daly notes, it is an open question whether this modified test applies to administrative actors as well. While I am reticent, as I said above, about adopting yet another test to govern s.96, there is no principled reason why the tests developed should apply differently based on whether the derogation is in favour of a “court” or an administrative actor. The evil with which s.96 is concerned is the creation of shadow courts that functionally act as s.96 courts. Whether the recipient of this power is an administrative actor or some administrative actor, there is a chance that a shadow court could be created by the delegation of power mixed with the liberal use of privative clauses. Indeed, in Farrah and Crevier, the issue was the de facto creation of a s.96 court, even in the auspices of an administrative body. While the Court of Quebec is a unique judicial body in Canada, Professor Daly notes that broad delegations of power have been made to various tribunals across the country. Those broad delegations would, it seem, be captured by the Court’s modified test.

The Court seems to draw a distinction between administrative actors and courts, noting that the Residential Tenancies test was in part developed to accommodate the developing administrative state. While whatever test is adopted by the Court must be sensitive to the legislative choice to delegate, the functional reasons motivating that delegation cannot exceed constitutional limits; in other words, s.96 is the brake against unfettered legislative delegation that creates unaccountable shadow courts. No matter the desirability of an administrative state, legislative action is limited by s.96. And for that reason, there is no good reason why s.96 should be different in the context of administrative actors versus courts.

There is more in this decision, including the Court’s interpretive approach when it comes to s.96. For now, though, the Quebec Reference is an important jurisprudential statement about the role of s.96. No matter the difficulties that courts may have in applying the doctrine in this case, at the very least we have important statements about the role of s.96.