“Katz” You Later – Supreme Court of Canada Clarifies Standard of Review for Subordinate Legislation

On Friday, November 8, 2024, the Supreme Court of Canada (the “SCC”) released two unanimous decisions, Auer v. Auer, 2024 SCC 36 (“Auer”) and TransAlta Generation Partnership v. Alberta, 2024 SCC 37 (“TransAlta”) clarifying the standard of review for judicial review of subordinate legislation, including ministerial regulations.

The decisions mark a change in approach by the SCC, following its previous determination of this issue over ten years ago in Katz Group Canada Inc. v. Ontario (Health and Long-Term Care, 2013 SCC 64 (“Katz”). The cases also bring clarity to the role of the courts where it is not an administrative decision, but subordinate legislation that is being challenged via judicial review.

Overview

Auer and TransAlta confirm that subordinate legislation is to be presumptively reviewed on a reasonableness standard, in line with Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 (“Vavilov”), and that the “identity of the decision maker” (i.e. a Minister, Cabinet, or municipality) does not affect or determine the standard of review. In so holding, the SCC disregarded Katz’ requirement that regulations must be “irrelevant”, “extraneous”, or “completely unrelated” to their statutory purpose for a judicial review to succeed.[1]

This said, the SCC confirmed that four principles from Katz remain good law:

1. Subordinate legislation must be consistent both with specific provisions of the enabling statute and with its overriding purpose or object;
2. Subordinate legislation benefits from a presumption of validity;
3. The challenged subordinate legislation and the enabling statute should be interpreted using a broad and purposive approach to statutory interpretation; and
4. Review of the vires of subordinate legislation does not involve assessing the policy merits of the subordinate legislation to determine whether it is necessary, wise, or effective in practice.[2]

Much like judicial review of municipal bylaws (see Catalyst Paper Corp. v. North Cowichan (District), 2012 SCC 2), the SCC reiterated that a review of regulations can be done in absence of formal reasons for their filing. Reasons can be determined by looking at the context surrounding filing of the regulations, as well as “regulatory impact analysis statements” if they are available.[3]