What standard of review applies when reviewing the vires of subordinate legislation? In the post-Vavilov era, this question has been the subject of conflicting appellate guidance. The Alberta Court of Appeal in this case followed the “hyper-deferential” standard that the Supreme Court (“SCC”) set in Katz Group Canada Inc. v. Ontario (Health and Long‑Term Care) 2013 SCC 64 [Katz]. By contrast, the Federal Court of Appeal, in the recent case of Portnov v. Canada (Attorney General) 2021 FCA 171, applied the Vavilov framework when reviewing subordinate legislation.
In Auer v Auer 2024 SCC 36 [Auer], the Supreme Court has now resolved this question in favour of Vavilov 2019 SCC 6, determining that reasonableness presumptively applies when reviewing the vires of subordinate legislation: the “irrelevant,” “extraneous” or “completely unrelated” Katz threshold no longer applies (Auer, para 4). The other Katz principles, however, may continue to provide courts guidance in exercising reasonableness review (Auer, para 3).
Facts
The appellant Roland Auer and the respondent Aysel Auer were married in 2004. Together they had one child and divorced in 2008. The child resides with Ms. Auer. Mr. Auer has paid both child support and spousal support to Ms. Auer (Auer, para 7).
Mr. Auer brought an application for judicial review challenging the vires of the Federal Child Support Guidelines, SOR/97‑175 (“the Guidelines”), arguing that the Governor in Council (“GIC”) exceeded its authority under s. 26.1(1) and (2) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) when enacting the Guidelines (para 8).
Specifically, Mr. Auer relied on s. 26.1(2), which imposes constraints on the GIC’s regulation-making authority. Section 26.1(2) provides that the Guidelines “shall be based on the principle that spouses have joint financial obligation to maintain the children of the marriage in accordance with their relative abilities to contribute to the performance of that obligation.” Mr. Auer argued that the Guidelines violate this constraint because they require a payer parent to provide a greater share of the child-related costs than the recipient parent (Auer, para 12).
The chambers judge dismissed the application, holding that the constraint in s. 26.1(2) must be weighed against the GIC’s broad grant of authority in s. 26.1(1) (Auer, para 13). The Alberta Court of Appeal unanimously dismissed the appeal. The Court was divided, however, on the applicable standard of review (Auer, para 14). The majority held that Vavilov did not overtake Katz, and that the Guidelines did not meet the high Katz threshold. By contrast, Feehan J, concurring in the result, held that the Vavilov applies and employed reasonableness review (Auer, para 17).
Issue
What standard of review applies to reviewing the vires of subordinate legislation?
Decision
The SCC Affirmed the Vavilov Framework
Côté J, writing for a unanimous court, affirmed that Vavilov established a comprehensive framework for determining the standard of review that applies to any substantive review of administrative decisions, including the review of subordinate legislation (Auer, para 21). While Vavilov was not itself concerned subordinate legislation, it contemplated questions of vires with respect to delegated legislation (Auer, para 23).
The Vavilov framework established a presumption of reasonableness review with limited exceptions in cases where the legislature has indicated that it intended a different standard to apply, or where the rule of law requires that correctness apply (Auer, para 24). No such recognized exception applied in this case. Vavilov ceased to recognize jurisdictional questions – also referred to as true questions of jurisdiction or vires – as a distinct category requiring correctness review (Auer, para 22). The question here is simply whether the statutory delegate acted within the scope of their lawful authority. Reasonable review is sufficient to address this question (Auer, para 26). Exceptional cases of vires review may require correctness (for example, a case where the validity of the subordinate legislation is challenged on the basis that it fails to respect the division of powers).
Katz Continues to Inform Vavilov Reasonableness Review
While the SCC dismissed what Paul Daly called the “hyper-deferential” Katz threshold — “irrelevant,” “extraneous” or “completely unrelated” — for review of subordinate legislation, the Court did not entirely dismiss their precedent (“Regulations and Reasonableness Review” in Administrative Law Matters (29 January 2021)). Instead, they determined that all other Katz principles continue to inform the reasonableness analysis under the Vavilov framework (Auer, para 32). These principles include: (1) subordinate legislation should be consistent with the specific provisions of the enabling statute and with its overriding purpose, (2) the challenged subordinate legislation and the enabling statute are to be interpreted using a broad purposive approach to statutory interpretation, (3) vires review of subordinate legislation does not involve assessing policy merits, and (4) regulations benefit from the presumption of validity (Katz, paras 24-26).
The presumption of validity has been criticized by scholars and courts as inconsistent with Vavilov. In the Court’s estimation, however, this criticism is mistaken (Auer, para 36). According to Katz, this presumption has two aspects: (1) it places the burden on the challenger to demonstrate invalidity, and (2) “it favours an interpretive approach that reconciles the [subordinate legislation] with its enabling statute so that, where possible, the [subordinate legislation] is construed in a manner which renders it intra vires” (Katz, para 25 (emphasis in original)). In Auer, Côté J explains that the first aspect – that the burden is on the challenger – is uncontroversial while the second aspect – that, where possible, subordinate legislation should be construed in a manner that renders it intra vires – does not heighten the Vavilov framework. Rather, depending on the applicable standard, to overcome the presumption of validity, the challenger must either demonstrate that the subordinate legislation is does not fall within a reasonable interpretation of the delegate’s statutory authority, or does not fall within the correct interpretation of the delegate’s statutory authority (Auer, para 39). According to this parsing, it is unclear what the presumption of validity adds to the analysis, but it is not inconsistent with Vavilov.
Reasonableness Review is Possible in the Absence of Formal Reasons
Côté J observes that formal reasons are often not provided for the enactment of subordinate legislation (Auer, para 52, citing Vavilov at para 137). However, Vavilov contemplated this problem. Côté J therefore provided some guidance on how to deduce the reasoning process from a variety of sources (Auer, para 52). For example, the rationale behind municipal bylaws may be deduced from “debates, deliberations and the statements of policy that give rise to the bylaw” (Catalyst Paper Corp. v. North Cowichan (District) 2012 SCC 2, at para 29). At the federal level, regulations are often accompanied by Regulatory Impact Analysis Statements outlining the reasons for regulations and their anticipated impacts. In many cases, it will be possible to deduce rationale even where formal reasons do not exist (Auer, para 53).
Application
Applying the Vavilov framework informed by the Katz principles, the SCC finds that the Child Support Guidelines are within the GIC’s grant of authority and dismissed the appeal. That authority to establish guidelines as provided in s. 26.1(1) of the Divorce Act is “extremely broad” but not without constraint. The mandatory constraint in s. 26.1(2) requires that both spouses have “a joint financial obligation to maintain the children of the marriage.” Mr. Auer’s interpretation that this language means that both parents must contribute equally is not supported by a plain reading of s.26.1(2) (Auer, para 79). Côté J observes that Mr. Auer’s submissions are premised on a “needs based approach” to child support that the Guidelines have eschewed (Auer, paras 108-109). Mr. Auer therefore did not meet his burden to demonstrate that the Guidelines represent an unreasonable interpretation of the authority granted to the GIC under the Divorce Act (Auer, para 113).
Analysis
In Auer, the Supreme Court concluded the debate over what standard of review applies to regulations and subordinate legislation. In affirming the Vavilov framework as the starting point for the review of any administrative decision, the SCC continues to bring certainty, coherence, and predictability to administrative law. Equally, in dismissing the hyper-deferential Katz threshold, the SCC has meaningfully enabled challenges to subordinated legislation.
Katz, decided in 2013, provided an effective bar to substantive review of subordinate legislation. In restricting review to “irrelevant,” “extraneous” or “completely unrelated” decisions, Katz essentially limited judicial review of delegated legislation to questions of legality and not rationality and substance. This approach is inconsistent with the “sea change” brought about by Vavilov in favour of the presumption of reasonableness and justification (Auer, para 32).
Despite dismissing the Katz threshold, the SCC was at pains to uphold stare decisis and affirmed the continuing relevance of many of Katz’s principles. These principles are largely uncontroversial. However, some have criticized the presumption of validity as inconsistent with Vavilov (see e.g. Paul Daly, “Standard of Review of Regulations: Auer v. Auer, 2024 SCC 36” in Administrative Law Matters (November 8, 2024)). While it is possible that this presumption “goes a step too far,” as Daly suggests, Côté J’s explication of this presumption may render these concerns merely academic: the challenger already bears the burden under Vavilov to demonstrate that the impugned decision falls outside the bounds of reasonability or correctness.
Perhaps that most significant question that remains is whether the SCC might be too optimistic about a reviewing court’s capacity to determine reasonableness in the absence of formal reasons. The SCC explained in Vavilov that “justification, transparency and intelligibility” are the “hallmarks” of reasonability (para 99), but formal reasons are often not provided for the enactment of subordinate legislation. Where the challenged instrument is a municipal by-law or a federal regulation, there may be publicly available sources from which to discern the reasoning process, but there are likely to be instances where delegated legislation lacks such sources. For example, Cabinet decision-making is generally protected by confidentially and it may be difficult to determine the reasonableness of such decisions if the sources of the decision-making are unavailable.
Auer does not resolve this problem, but it has provided welcome clarity to the review of subordinate legislation.