Administrative Law Judgment of Note: Supreme Court Strikes Down a Private Clause

Canada’s highest court was called upon to address this issue following the controversy surrounding the federal government’s 2020 award of a contract to WE Charity to administer the Canada Student Service Grant. Two Members of Parliament subsequently requested an investigation into whether then Prime Minister Justin Trudeau had contravened the Conflict of Interest Act[2] (the “COIA”) by participating in two funding decisions concerning the organization while he and his family had close connections to its founders.

Following an investigation, the Conflict of Interest and Ethics Commissioner concluded that the Prime Minister had not contravened the COIA. Alleging that the Commissioner had made errors of fact and law in his interpretation of the COIA, Democracy Watch (the “Appellant”) applied to the Federal Court of Appeal for judicial review. The Court dismissed the Appellant’s application, finding that the Appellant had an adequate alternative remedy in the form of political oversight of the Commissioner’s conclusions.[3]

The Supreme Court set aside the Federal Court of Appeal’s decision.[4] The alternative remedy available to the Appellant was a political process through which the Commissioner submits annual reports on the administration of the COIA to the Standing Committee on Access to Information, Privacy and Ethics.[5] However, in determining whether an alternative remedy is adequate, the key question is whether it can, in the circumstances, address the applicant’s concerns.[6] In this case, the Appellant was seeking a review of the legality of the Commissioner’s conclusions. The annual reporting process did not permit the Appellant to directly challenge the legality of those conclusions.[7] Furthermore, the COIA provides no mechanism for doing so.[8] Consequently, the political process did not constitute an adequate alternative to judicial review in the circumstances.[9]

The Supreme Court then considered the applicability and validity of section 66 of the COIA, which expressly limits the grounds on which the Commissioner’s orders and decisions may be subject to judicial review. The Court reiterated that, in Canada, “supervision of the administrative state through judicial review of the exercise of public powers is one of these essential aspects of the courts’ constitutional function [...]. This supervisory jurisdiction allows the courts to fulfill their role as guardians of the rule of law, and ensure that Canadians are ‘protected from arbitrary government action’ [...]”.[10]

The statutory powers of administrative decision-makers exercising delegated authority are subject to an essential limit: rationality.[11] Exercises of public power through administrative decisions must find their source in law.[12] Where they do not, the Constitution guarantees the courts’ role in ensuring compliance and intervening to review legality on questions of both fact and law.[13] For this reason, a legislative provision that seeks to shield the legality of an administrative decision from judicial review is ultra vires, or of no force and effect, because it is unconstitutional.[14] Section 66 of the COIA was therefore declared of no force and effect. The order of the Federal Court of Appeal was set aside and the matter was remanded to that Court for consideration of the remaining issues raised by the Attorney General of Canada.[15]

This unanimous decision of the Supreme Court is of significant national importance in the field of administrative law. At a time when many democracies across the globe face growing challenges and skepticism toward the justice system and the state is on the rise, this judgment confirms and reaffirms the rule of law. It sharply restricts the use of privative clauses designed to shield exercises of administrative power from curial scrutiny and reminds public office holders that their authority must be exercised within the limits prescribed by law, with the Constitution guaranteeing access to judicial review of the legality of every aspect of the decisions they make.

For any questions regarding this article, please do not hesitate to contact our administrative law team.