'The arc of history bends toward judicial review'

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The Supreme Court of Canada has ruled that the section of the Conflict of Interest Act that bars judicial review of the ethics commissioner's decisions is unconstitutional.

The unanimous decision paves the way for a challenge of a commissioner’s report on Justin Trudeau’s involvement in decisions about funding for the WE Charity.

The privative clause, set out in section 66 of the act, barred review of former ethics commissioner Mario Dion's conclusion that Trudeau, who was prime minister at the time, did not breach the act. It states that decisions and orders "shall not be questioned or reviewed in any court" except under limited grounds set out in the Federal Courts Act. 

When Democracy Watch sought to challenge the commissioner’s report on the WE Charity decisions, the Federal Court of Appeal found that, although the organization had public-interest standing, the case was barred by section 66. Because Parliament provided an alternative to reviewing the decisions, judicial review was deemed unnecessary.

The Supreme Court disagreed. Chief Justice Richard Wagner said that all legal powers are subject to inherent limits and that, under a constitutional order grounded in the rule of law, there is no such thing as unfettered discretion.

“The courts are tasked with ensuring that legal powers are exercised in accordance with their limits,” he wrote. 

“Parliament and the legislatures are not constitutionally competent to shield administrative exercises of delegated power from judicial review for legality on any ground; such efforts trench on the core jurisdiction of the courts and are ultra vires.”

The Court struck down the privative clause in section 66 and remanded the matter to the Federal Court of Appeal to decide.

However, it opted not to declare the reasonableness standard set out in Vavilov constitutionally entrenched as a minimum standard of review, leaving that for another day.

“What matters, for constitutional purposes, is that the courts are constitutionally empowered to supervise the exercise of delegated power to ensure it respects the boundaries of its inherent limits,” Wagner said.

University of Ottawa professor Paul Daly, who was co-counsel for Democracy Watch, says the decision is a great day for the rule of law in Canada.

“It skillfully weaves together common law tradition and Canadian constitutional principle to make clear that judicial review is the ultimate safeguard against arbitrary exercises of state power, with Canada’s superior courts and federal courts as its guardians.”

He says Wagner’s reasons strongly emphasize the importance of court oversight of the legality of ethics commissioner decisions without underplaying the important role of parliamentarians in maintaining high ethical standards in federal public administration.

There will be questions in future cases about how far this decision goes, Daly says, referring to a case coming later this year about restrictions on judicial review in the Federal Court, which looks at whether the possibility of a petition to cabinet is an adequate alternative remedy.

“This decision is going to have a big impact on that,” he says. 

“There will be further questions to discuss and debate, but this decision really settles very clearly a lot of issues that had been uncertain and unclear for many decades. It’s a really significant decision in that regard.”

Daly says this decision will have a particular impact on the Federal Public Sector Labour Relations and Employment Board, as it has the same provision in its legislation. Energy regulation in Alberta is also subject to a similar privative clause, which is at the centre of challenges currently before the courts. 

“For Alberta, this decision is going to open up the reviewability of the reasonableness of reasons given by regulators,” he says.

Aubin Clavert, counsel at Hunter Litigation Chambers in Vancouver, was co-counsel for the Trial Lawyers Association of British Columbia, which intervened in this case. Using Justice Mahmud Jamal’s expression from the oral hearing, she says the Court “bit the bullet” by finding legislation that purports to oust judicial review on questions of law and fact unconstitutional, instead of following the tendency of courts to read down privative clauses. 

“The Court viewed this as straining the limits of the presumption of constitutionality,” Clavert said in an email, noting it found no principled basis to limit section 96’s constitutional protection to questions of law or jurisdiction, to the exclusion of questions of fact. “This reasoning is rooted in the understanding that the power of the courts to protect against arbitrariness in administrative decision-making lies at the heart of the legality review constitutionally guaranteed by section 96.”

Tim Gleason, a litigation lawyer at Dewart Gleason LLP in Toronto who acted as co-counsel for the Canadian Civil Liberties Association as intervenors, says this is the latest in a series of incremental steps the Court has taken toward greater judicial oversight of administrative tribunals and their decisions.

“They endorsed the position that we took that administrative tribunals have never had jurisdiction to act unreasonably or irrationally.”

Although the Court didn’t make reasonableness the floor for judicial review, he says it did give a “strong nod” to the fact that unreasonable decisions are essentially unlawful.

“The arc of history bends toward judicial review. The increments keep getting bigger, and they keep saying they are going to leave something for another day, but this is a big day.”

M. Joseph Redman, partner with Shores Jardine LLP in Edmonton, and chair of the CBA’s administrative law section, wasn’t involved in the case, but says the chief justice writing for a unanimous court was not a surprise, as it’s consistent with how the Court treated these issues in recent years. 

“This looks to me to be the final nail in the coffin of the privative clause.”

Going forward, there will be practitioners who file a statutory appeal on some questions and a judicial review at the same time on different issues, and they’ll end up having the same administrative decision being challenged on multiple fronts, he says.

“Prudent lawyers are going to need to look at where the better arguments lie, and whether they should be filing both a judicial review and a statutory appeal when that’s available.”

Andrew Bernstein, a partner at Torys LLP in Toronto and co-counsel for the University of Ottawa’s Canadian Constitutional Law Initiative as intervenors, says this is one of the most significant administrative law decisions since Vavilov, and that the Court went further than it potentially had to in dealing with the issue.

“They could have decided that the provision was ultra vires on a narrower ground, but they decided to swing for the fences,” he says. 

“The fact that the decision is unanimous is significant for the Court these days.”

Bernstein will be on the lookout for legislative pushback against this decision, such as efforts to specify the standard of review to be applied to these administrative decisions.

“There is a series of legislation that specifies the standard of review,” he says. 

“One would think that kind of legislation should be safe because the Court said that they are specifying a particular standard of review. Legislatures in other provinces or federally may decide to start specifying the standards of review, particularly for questions of fact and law.”

But Bernstein can see a world where legislatures are saying you can review these things for palpable and overriding error, which is the appellate standard, and then questions of law for these other matters, which is the Vavilov standard. 

“Lots could happen here, but I don’t think this will shake up the foundations of administrative law in Canada.”