Canada: Courts Are Deferring To Professional Regulators More Than Ever

Last Updated: August 6 2018
Article by Nathaniel Brenneis

Recent high-profile decisions from across Canada demonstrate that the Courts are increasingly applying a standard of reasonableness when reviewing the decisions of professional regulators. The application of the reasonableness standard means the Courts are much more likely to defer to the regulators' expertise. As a result, whether they are engaging individual rights under the Charter of Rights and Freedoms or monitoring proper business practices, professional regulators have been given significant leeway in utilizing their discretion to make decisions and implement policy. It appears that so long as the regulators' efforts are aimed squarely at protecting the public interest, the Courts are unlikely to interfere when professionals challenge their regulators' decisions or guidelines.

What follows is a brief overview of recent decisions that illustrate the Court's high level of deference for regulatory bodies of professionals.

When Professional Regulators Impact Business Activities

Alberta College of Pharmacists v Sobeys West Inc. involved a policy imposed by the Alberta College of Pharmacists (the "ACP") to prohibit financial inducements, such as Air Miles, being given to patients obtaining a drug or professional service from a pharmacist, pharmacist technician or licensed pharmacy (the "Policy"). Sobeys pharmacists sought judicial review of the ACP's decision to implement the Policy, arguing that it was beyond the ACP's jurisdiction s as it contravened section 3(2) of the Health Professions Act, which prohibits the ACP from regulating professional fees.

At first instance, the Alberta Court of Queen's Bench held that the Policy was beyond the jurisdiction of the ACP because it amounted to controlling the way commercial entities operate and compete amongst themselves. Thus, the Policy had a clear and direct economic function that was outside the scope of the ACP's authority.

The ACP successfully appealed the decision to the Alberta Court of Appeal. In overturning the decision, the Court of Appeal confirmed that a standard of reasonableness should be applied when reviewing the rules and guidelines passed by a regulator. This means that in reviewing a regulator's policy decisions, a court will only examine:

  1. Whether the regulator had jurisdiction to pass the policy; and
  2. Whether the policy is reasonable.

In reviewing the ACP's Policy for prohibiting financial inducements, the Court of Appeal found that the ACP had jurisdiction to pass the Policy. Specifically, it reasoned that any regulation that is consistent with the "public interest", one of the statutory purposes of the Health Professions Act, extends to the maintenance of high ethical standards and professionalism on the part of the profession. This includes the regulation of activities that have a commercial aspect like patient "loyalty programs" associated with the dispensing of drugs and the provision of professional services. Accordingly, the Court of Appeal held that the Policy conformed with the relevant statutory regime.

Second, the Court held that the Policy was reasonable, given the ACP's council members' expertise and concerns. The ACP was not required to wait until there was empirical evidence demonstrating harm caused by customer incentive programs, and was entitled to proceed with a reasonable measure to address their concerns. In the context of reviewing this type of policy, the Court recognized that deference is owed to regulators when they are trying to protect the public – even where there is no empirical evidence that any harm exists. The Court specifically recognized that the regulators have a particular expertise in governing their professions and safeguarding the public.

When Professional Regulators Impact Charter Rights

The court's deference to professional regulators extends beyond implementing guidelines for best economic practices. Recently, the Courts have dismissed challenges to regulators' decisions that impugn rights and freedoms under the Canadian Charter of Rights and Freedoms.

In Christian Medical and Dental Society of Canada v College of Physicians and Surgeons of Ontario ("Christian Medical"), the Ontario Superior Court upheld two policies introduced by the College of Physicians and Surgeons of Ontario ("CPSO"). The policies in question required physicians who were unwilling to provide elements of care on moral or religious grounds to provide patients requesting such care with an effective referral to another health care provider. Examples of such elements of care included medical assistance in dying, abortions, contraception, fertility treatments and transgender treatments.

In this case, the Applicants argued that the effective referral requirements infringed a physician's right of religious freedom; specifically, that providing a referral constituted complicity or participation in the provision of medical services to which they objected. In its decision, the Court acknowledged that the CPSO's policies did infringe the rights of religious freedom of some individual physicians, but in a detailed analysis, went on to find that such infringement was reasonable. The Court found that the CPSO's policies were, in fact, a successful attempt to balance the religious freedom and equality rights of medical professionals with the rights of patients to equitable access to patient-centered care under a publicly-funded healthcare system.

It was also found that while other Canadian medical colleges have developed policies that are arguably less restrictive of physicians' religious and conscientious freedom, the CPSO should not be deprived of its statutorily mandated authority to make its own reasonable and informed decisions regarding complex policy issues. Even when there was arguably a better solution available, the Court deferred to the CPSO's decision because it was reasonable.

This trend of increased deference is perhaps best exemplified by the Supreme Court of Canada's recent decisions regarding the accreditation of a law school at Trinity Western University ("TWU"). On June 15, 2018, the SCC released two companion decisions in the TWU matter: Law Society of British Columbia v. Trinity Western University and Trinity Western University v. Law Society of Upper Canada. These long-awaited rulings articulated the SCC's balancing of two competing rights – those of respect for sexual orientation and religious belief - when they collide in the regulation of a profession.

TWU applied for accreditation with the law societies of both Ontario and British Columbia in order to start a law school. Following referenda of their respective members, the law societies denied TWU's accreditation on the grounds that the creation of an evangelical Christian law school could create barriers for LGBTQ students and others from entering the legal profession. It was the regulators' position that these barriers would harm the legal profession as a whole by limiting diversity and lowering public perceptions of lawyers. TWU applied for judicial review on the grounds that the law societies' decisions were a breach of the TWU's freedom of religion protected by section 2(a) of the Charter.

The SCC determined that it was reasonable for the regulators to deny accreditation to TWU's proposed law school. Similar to Christian Medical, the SCC held that the law societies had "proportionally balanced" the infringement of the TWU community's religious freedoms with the "significant benefits" to the regulators' statutory mandate to promote the public interest. Having struck a proportionate balance, the regulators' decisions were deemed reasonable by the SCC.

There are many takeaways from the TWU decisions. However, the key highlight for professional regulators is the degree of deference the SCC provided to the law societies' decisions.

Implications

Whether it is doctors or pharmacists, lawyers or engineers, the bodies regulating these professions have been granted a high degree of deference in determining what is best for their respective professions and the community at large. While regulators do not have carte blanche authority, policies or rules that are enacted by a regulator in the public interest will be very difficult to set aside - the standard of reasonableness ensures it.

Finally, it is worth noting that the SCC is currently due to revisit and potentially revise the standard of review in the near future. This could have a big impact on how the Courts approach the decisions of professional regulators. We will continue to closely track these issues and report on any new developments.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Nathaniel Brenneis
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