In two companion decisions released on November 8, 2024, the Supreme Court of Canada has clarified the standard of judicial review of subordinate legislation (e.g. municipal bylaws), impacting municipal leaders and policymakers across the country. The Court affirmed that the "reasonableness" standard from its earlier decision in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 ("Vavilov"), applies to the review of regulations and other delegated legislation.
In Auer v. Auer, 2024 SCC 36, and TransAlta Generation Partnership v. Alberta, 2024 SCC 37, Justice Suzanne Côté, writing for the majority in both decisions, reviewed federal child support guidelines and a property assessment guideline to determine whether they should be struck down. The Court found that they were valid.
Here are the key takeaways for municipal leaders:
- Reasonableness Standard: The Court confirmed that the reasonableness standard, which was established in the Vavilov decision, is the presumptive standard for judicial review of subordinate legislation. This means that regulations must be reasonable and consistent with the enabling statute's purpose (e.g. Municipal Act, 2001, O. 2001, c. 25). Note that the standard of correctness remains for a review of an "issue pertaining to the rule of law" (Auer at para. 44).
- Presumption of Validity: Subordinate legislation benefits from a presumption of validity, meaning it is assumed to be valid unless proven otherwise. However, the Court rejected the previously high threshold to rebut that presumption from Katz Group Canada Inc. v. Ontario (Health and Long-Term Care), 2013 SCC 64 ("Katz"). Under Katz, a challenger of a bylaw would have to show that the bylaw was "irrelevant, "extraneous" or "completely unrelated" to the governing statute's objectives. Now, "challengers must demonstrate that the subordinate legislation does not fall within a reasonable interpretation of the delegate's statutory authority" [emphasis in original, Auer at para. 39]. This analysis includes "an interpretive approach that reconciles the [bylaw] with it's enabling statute so that, where possible, the [bylaw] is construed in a manner which renders it intra vires" or within municipal jurisdiction [emphasis in original, Katz at para. 25; aff'd in Auer at para. 37].
- Not a Review of the Policy Merits: The focus of review remains on the bylaw's legality rather than its policy merits. This ensures that municipal bylaws and regulations are scrutinized for their alignment with statutory authority without delving into policy effectiveness (Auer at para. 35).
- More Future Challenges: While these decisions may lead to more bylaw challenges, particularly on high-profile issues such as the environment and public health measures, successful judicial reviews must still contend with the courts' deference to elected decision-makers and the reasonable outcomes of those policy creation processes — provided there is sound statutory authority for those resulting bylaws.
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