SCC overhauls administrative law, clarifies standard of review

The majority of the court revised the framework established in the Dunsmuir trilogy in 2008 to assume that “that the legislature intended the administrative decision maker to function with a minimum of judicial interference,” but “[n]evertheless, respect for these institutional design choices made by the legislature requires a reviewing court to adopt a posture of restraint on review.”

The new framework provides much-need clarity and guidelines for standard of review, say practitioners of administrative law.

“It was like opening a Christmas present early,” says Margaret Robbins at Lenczner Slaght Royce Smith Griffin LLP in Toronto, “because when they came out this morning, they were so anticipated.

“The court has looked at what's happened in the courts below and has seen that standard of review analysis has taken up so much of litigants’ time and effort,” Robbins says, “and they are providing us with a new framework that will hopefully reduce the amount of time spent arguing what the standard is and give litigants more opportunity to focus on the merits on these appeals and judicial reviews.”

Andrew Bernstein, a partner at Torys LLP in Toronto, describes the decision as “largely what the bar was hoping for, in the sense that it gives very clear guidance what the standard of review should be, what standard review should be used, and, more importantly, how to apply it.”

There had been a lot of uncertainty since Dunsmuir in how to conduct reasonableness review, Bernstein says. “And I think [the court has] done a really good job of setting out how you conduct reasonableness review.”

In today’s 343-paragraph judgment in Vavilov, the Supreme Court established its new framework, which it then applied to the Bell Canada case.

Alexander Vavilov was born in Toronto, Canada in 1994 to foreign nationals later determined to be spies for Russia. Vavilov was unaware of his parents’ double lives. After his parents’ arrest and return to Russia, Vavilov attempted to get his Canadian passport renewed; but in 2014, the Canadian Registrar of Citizenship cancelled his certificate of Canadian citizenship on the basis of her interpretation of s. 3(2) (a) of the Citizenship Act , which exempts children of “a diplomatic or consular officer or other representative or employee in Canada of a foreign government” from the general rule that individuals born in Canada acquire Canadian citizenship by birth. 

The Federal Court of Appeal allowed Vavilov’s appeal and quashed the registrar’s decision because it was unreasonable. 

In today’s decision the Supreme Court agreed, finding that the registrar had not properly considered lawmakers’ debates, previous court decisions, the text of the Citizenship Act, and international law. These sources indicated that the exception to citizenship was meant to apply only to those who had diplomatic “privileges and immunities,” which did not apply to the respondent Vavilov.

At issue in the twin matters involving the CRTC was the simultaneous substitution regime that has been standard in Canada, by which U.S. commercials are exchanged for Canadian commercials on U.S. television broadcasts such as the Super Bowl that are aired on Canadian television stations. Simultaneous substitution regime gives Canadian broadcasters greater broadcasting revenues by virtue of being able to sell Canadian advertising on their channels to Canadian audiences.

In 2013, the CRTC initiated a broad public consultation for the purpose of reviewing the entire framework for the regulation of television in Canada — in part in response to widespread complaints by Canadian residents who were unable to see the much-ballyhooed U.S. commercials created for the Super Bowl — and in 2016 the CRTC issued an order prohibiting simultaneous substitution for the Super Bowl as of January 1, 2017.

The NFL had granted Bell Canada and Bell Media Inc. an exclusive license to broadcast the Super Bowl in Canada through February 2020; both organizations sought leave to appeal the CRTC’s decision and order to the Federal Court of Appeal pursuant to s. 31(2)  of the Broadcasting Act; those appeals were unanimously dismissed.

The Supreme Court found that the CRTC did not have the authority under the Broadcasting Act to require cable and satellite companies carrying U.S. stations to broadcast the U.S. version of the Super Bowl, including the commercials. “And because the issues in these appeals raise legal questions that go directly to the limits of the CRTC’s statutory grant of power, and therefore plainly fall within the scope of the statutory appeal mechanism referred to above, the applicable standard is correctness,” wrote Chief Justice Richard Wagner and Justices Michael Moldaver, Clément Gascon, Suzanne Côté, Russell Brown, Malcolm Rowe and Sheilah Martin in joint reasons.

Presumptions of reasonableness

In Vavilov, two situations were established by the majority for rebuttal of the presumption of reasonableness.

The first is where the legislature indicates a different standard is to be used, meaning the legislature may derogate from where a reasonableness approach is appropriate where there is an explicit statutory appeal.

The second is where the rule of law requires correctness to be the standard, i.e., “for certain categories of legal questions, namely constitutional questions, general questions of law of central importance to the legal system as a whole and questions related to the jurisdictional boundaries between two or more administrative bodies.”

Justices Abella and Karakatsanis dissented regarding the new framework and in the Bell decision (they wrote joint concurring reasons in Vavilov, as they agreed with the majority that the citizenship registrar’s decision regarding Vavilov’s citizenship was unreasonable).

“My read of the dissent of both Justices Karakatsanis and Abella and is that they see this new approach of the majority as a sea change,” says Robbins. “So rather than a slight clarification of the law and standard of review, they see this as a complete change of course.”

The perspective of the dissenting justices is the impact of the new framework, which will affect what to do with previous case law under the old standard, stare decisis, “and what is this new approach going to do to the precedents that have been set in standard of review,” Robbins says. “They point to the broadened ability of the court to apply a correctness standard on the basis of the rebuttable presumption of reasonableness, including this legislative intent, where an appeal provision is included.”

In this new approach the question of expertise of administrative decision-makers is not as central to the analysis, she adds, and there is a broader opportunity for the court to apply a correctness standard, regardless of expertise, “on the basis of the two categories on which you can move from presumption of reasonableness to the correctness standard.”

The Vavilov decision also identified two types of fundamental flaws that may render a decision unreasonable.

“The first is a failure of rationality internal to the reasoning process,” wrote the majority in their joint reasons. “The second arises when a decision is in some respect untenable in light of the relevant factual and legal constraints that bear on it. There is however, no need for reviewing courts to categorize failures of reasonableness as belonging to one type or the other. Rather, we use these descriptions simply as a convenient way to discuss the types of issues that may show a decision to be unreasonable.”

The court also said they “would not definitively foreclose the possibility that another category could be recognized as requiring a derogation from the presumption of reasonableness review in a future case”; however, “any new category warranting a derogation from the presumption of reasonableness review on the basis of legislative intent would require a signal of legislative intent as strong and compelling as those identified in these reasons (i.e., a legislated standard of review or a statutory appeal mechanism).”

The decision is “required reading for anyone practising administrative law,” says Bernstein, “and several times over, and it will be cited in every administrative law case going forward.

It’s a good decision, he says, “that will be greeted with a combination of relief and delight.”