Canadian Natural Resources Limited v Fishing Lake Metis Settlement, 2024 ABCA 131 (April 22, 2024).
Category: Review of regulations.
Context: This is an appeal involving the Metis Settlements General Council and its taxation powers. The General Council adopted assessment and taxation politics that treat the property of Settlement members and Settlement member-owned corporations differently from that of non-Settlement members and corporations. The appellants challenged the policies on the ground of “administrative law discrimination”: the principle of statutory interpretation that differential treatment in regulation must be expressly or implicitly authorized: see Montreal v Arcade Amusements Inc, [1985] 1 SCR 368.
Issue: (1) What is the proper test for administrative discrimination? (2) Is there authorized discrimination in this case?
Holding: Administrative discrimination can be authorized expressly or impliedly; taxation regulations are not special, and administrative discrimination in that context can be authorized impliedly.
Analysis: The issue of administrative law discretion is gaining steam. In the Supreme Court’s TransAlta case (attached to Auer, which will review the standard of review for subordinate legislation), administrative law discrimination in a taxation and assessment context is at issue, and one hopes the Court will provide detail on the relationship between administrative law discrimination and whatever test it accepts for the standard of review. Nonetheless, the ABCA in this case deals with an important aspect of administrative law discrimination: the extent to which, in the taxation context, statutes can be read to impliedly authorize discrimination between classes of people.
In this case, this issue appeared clearly. The General Council “admitted that the policies have a discriminatory effect and that the discriminatory tax treatment is not expressly permitted under the [Metis Settlement Act, the enabling legislation]…” [2]. The case turned, then, on whether and how administrative discrimination can be impliedly authorized.
The ABCA, properly in my view, concludes that discrimination in taxation can be impliedly authorized [49]. There were old Supreme Court cases suggesting that, in taxation and licensing, “departure from uniformity and impartiality…cannot be inferred”: see Jonas v Gilbert, (1881) 5 SCR 356. The justification for this position rests on a purported distinction between taxation and non-taxation matters, influenced by a worry about arbitrariness in “burthering one man or one class of men in favor of another…” (Jonas, at 366). As a matter of positive law, the Supreme Court’s later cases quite clearly contradicted Jonas in the taxation context: see para 39, particularly the citation to City of Montreal v Civic Parking Center Ltd et al, [1981] 2 SCR 541. And if we are to keep the distinction between express and implied powers—see my comments below—then the question in all statutory contexts is the same. And the Court in this case properly recognizes that question is simple: is the discrimination “within the ambit of the delegated power provided by the enabling statute”? [23]. This is a question amenable to resolution through the ordinary principles of interpretation.
On the merits, the Court concludes that the kind of discrimination within the General Council’s policies were not impliedly authorized [81]. Assuming again that we want to retain the distinction between express and implied administrative powers more broadly, I think the Court is right to insist on a high threshold for a finding that “implied” administrative discrimination is authorized. This is not a position that rests on commitments to individual liberty, per se. Rather, it is a prudential restraint on judicial interpretation. The choice to discriminate is a rather specific legislative choice that depends on the active operation of a distinction between particular classes of people. The way that discrimination operates means that it is unlikely that the text, context, and purpose of the legislation will “impliedly” authorize such specific distinctions. This might explain the rhetorical force of the test endorsed by the ABCA: authorized discrimination must be “absolutely necessary to the exercise” of the statutory power [66, citing R v Greenbaum, [1993] 1 SCR 674 at 695]. Discrimination will only be authorized where the operation of distinctions is prescribed by the text, or necessarily implied by a statutory purpose that is authentically reflected in the text.
In a broader sense, I think much of this area can be simplified. I agree with Professor Daly that the distinction between express and implied powers is largely a distraction. Instead, the question is whether the text, context, and purpose of the enabling statute authorizes the purported regulatory action. With this approach, as I have argued, comes the reality that statutory purposes are not “achieved at all costs”. This means that an abstract rendering of statutory purpose does not authorize judicial extension or contraction of the specific rules and purposes expressed in the text. Rather, the modern approach prescribes a harmonious reading between text and purpose. In the same way, a specific power to discriminate should not be read to exist by reliance on a general power to tax “in the public interest,” say. This should be seen as bad practice as a matter of statutory interpretation.
In this way, and at any rate, I think the ABCA properly sets a high bar to find that, absent a textual signal, administrative law discrimination will be inferred from general references to statutory purposes or aims.
Mowatt v British Columbia (Attorney General), 2024 BCCA 157 (April 26, 2024).
Category: Reasonableness review.
Context: This is an appeal from judicial review of a decision of the Deputy Attorney General [DAG] under the Escheat Act. The DAG rejected the appellants’ claims for transfer of property to them and ordered a blind auction to occur between the appellants and the respondent City of Nelson. This decision flows from the Supreme Court’s decision in Nelson (City) v Mowatt, 2017 SCC 8, which held that the appellants had not established adverse possession [16]. Following that decision, the Mowatts applied for relief under the Escheat Act, as did Nelson, leading to the DAG decision [17].
Issue: Is the DAG decision reasonable?
Holding: From the Court’s summary:
Appeal allowed. DAG’s decision is not reasonable under the Vavilov analysis, He failed to address appellants’ “moral claim” in light of the entire legal context, including purposes of the Crown’s prerogative to transfer escheated land, as confirmed by s. 5 of the Act; failed to state a conclusion on whether appellants had a “moral claim”; failed to decide whether they had “discovered” the escheat and, assuming they had, failed to explain why discovery alone was insufficient to merit transfer to the appellants
Analysis: This decision raises two interesting insights about conducting reasonableness review.
The first is how decision-makers should approach cases where applicants make several arguments. The Court concludes that the question is not whether each of these arguments alone would satisfy the decision-maker to decide in favour of the applicant. Rather:
[76]The result might well have been different had the DAG considered all the Mowatts’ arguments and the decision‑maker’s own “factors” holistically and asked himself “what a judicious person would do in [all] the circumstances, by reference to community standards.” (See Tataryn at 821.)
Of course, how decision-makers approach questions in front of them is conditioned by their statutory remits, internal practices, and role moralities. But the point here seems to be this: decision-makers should evaluate all arguments, weighing them against each other and against the legal standards at issue, rather than taking them in isolation. This is particularly so where the basic question the DAG had to resolve was broad and value-laden under s.5 of the Escheat Act—whether the Mowatts had a moral claim [66].
This leads to the second point about this decision: reasonableness review, like in the Mandate Letters Case, 2024 SCC 4, is looking quite strict. Here, the Court faults the DAG for failing to consider the stakes to the Mowatts and the consequences of its decision on them [69]. This was a problem because of the decision-making context under the Escheat Act, and the requirements of a moral claim. The Court says that the “purpose of the law relating to escheat was a contextual ‘constraint’ that was relevant…escheat was intended not to enrich the Crown, but to redress wrongs suffered by subjects of the Crown due to failure of heirs or other lapse in tenure; and by exercising its prerogative to restore the land to ‘deserving’ subjects, the Crown acts for the public good” [66, the Court’s emphasis]. Given that this is the case, the effect of an adverse decision on the Mowatts, after the legal wrangling over the property, was a relevant consideration, binding quite strongly on the DAG’s decision-making.
Humberplex Developments Inc v Ontario (AG), 2024 ONSC 2335 (April 24, 2024)
Category: Judicial review and rights of appeal.
Context and Analysis: This is a judicial review of a regulation which “reimposed the more restrictive procedural regime that previously applied to appeals of municipal planning decisions heard by the Ontario Land Tribunal” [1]. The Tribunal applied the new regulation to the applicants’ case [3]. The merits of the case are interesting, but I highlight it because of the Court’s practical comments on Yatar v TD Insurance Meloche Monnex, 2024 SCC 8 (Issue #129). As a reminder, Yatar held that a legislated right of appeal, restricted to questions of law, over an administrative decision does not oust the ability of litigants to seek judicial review of issues not covered by the right of appeal ie) questions of fact and mixed fact and law.
In this case, in addition to the application for judicial review, the applicants also brought a notice of motion for leave to appeal the Tribunal’s decision, via a right of appeal under the Ontario Land Tribunal Act [87]. As the Court notes, the Divisional Court’s practice in such cases—not called into question by Yatar—requires that both an application for judicial review and an exercise of a right of appeal must be brought at the same time. Here, at the applicants’ request, the question of the vires of the regulation was raised within the confines of the application for judicial review, but the applicants also raised procedural fairness arguments. The Court holds that these arguments should wait for resolution under the right of appeal as questions of law [91]. For the Court, Yatar is distinguishable: here, the right of appeal is adequate to deal with the procedural fairness arguments [94].
At first blush, I wondered why the applicants could not simply proceed under the right of appeal for all of the issues—that right of appeal covers all questions of law, with vires falling in that category. Here, the applicants and the other parties agreed that the judicial review application should proceed first “to allow determination of the threshold issue of the regulation’s vires” [89]. But the right of appeal here is limited to the tribunal itself. The text of the right of appeal provision states that the appeal only follows from an “order or decision of the tribunal.” That provision may mean that a regulation—promulgated by the Attorney General, in this case—cannot be challenged under the right of appeal, meaning that the vires challenge must proceed by judicial review.
At any rate, if this seems bizarre, it’s because of the specific statutory wording of the right of appeal (which, if understood in this way, leads to this result) and the procedural irregularities that have been created by concurrent appeal and judicial review proceedings. The problems with concurrency can be limited, depending on the practice adopted by courts and how one views limited rights of appeal. As I have written before, it’s my view that the right of appeal (even limited to questions of law) is usually constitutionally and practically equivalent to an application for judicial review: see Democracy Watch v Canada (Attorney General), 2022 FCA 208 at para 50 per Stratas JA. Where the legislature hasn’t said so, however, the two processes must co-exist—and here, room is left for judicial review.
Disclaimer: Nothing in the SEAR is legal advice. The SEAR is not designed to be comprehensive. It is designed to collect some cases that I believe are interesting to practitioners and students, and to provide my quick thoughts. Not all of the cases presented are fully analyzed ie) I’ve selected the most relevant issues in some of the cases. Please complement the SEAR with your own research and study. Any mistakes are my own