The Supreme Court of Canada simplifies the standard of review analysis in historic Super Bowl trilogy

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The Supreme of Canada today released its much anticipated decisions in the Bell-NFL-Vavilov trilogy of administrative law appeals. McCarthy Tetrault LLP acted for the successful appellants (Bell Canada et al. and the National Football League et al.) in two of the three appeals, with a team led by Steven Mason and Brandon Kain, that included Richard Lizius, Joanna Nairn and James S.S. Holtom. Adam Goldenberg acted for Advocates for the Rule of Law, which intervened in all three appeals.

By a majority, the Court revised the rules of judicial review in two major respects.

First, the Court simplified the analysis for determining whether a reviewing court must accord deference to an administrative decision. All such decisions will now presumptively receive judicial deference — that is, administrative decisions will presumptively be allowed to stand as long as they are “reasonable”. This “presumption of reasonableness review” can be rebutted, however, either by legislative intent or by the rule of law, as we describe below.

The most significant change is likely the Court’s revised approach to statutory appeal rights. Previously viewed as irrelevant or of little probative value, the Bell-NFL-Vavilov framework provides that questions of law, including statutory interpretation, will now be automatically reviewed for correctness where the relevant legislation provides for an appeal right on such questions from the decision-maker. To take one example, courts may no longer show deference to the Canadian Radio-television and Telecommunications Commission (the “CRTC”) on statutory interpretation questions under the Broadcasting Act or Telecommunications Act, but must review their decisions for correctness.

The Court’s goal, in streamlining this step, was to reduce the amount of litigation over the appropriate “standard of review” in a particular case. Rather than argue about whether an administrative decision should receive judicial deference, the majority emphasized that litigants (and judges) should focus on the merits of the judicial review, i.e., whether the decision under review can survive the reviewing court’s scrutiny.

Second, the Court explained what it means for a court to review an administrative decision on a “reasonableness” standard. It laid out a “robust form of reasonableness review” that, according to the minority, makes reasonableness review less deferential.

The Court’s judgments in Bell Canada, National Football League, and Vavilov usher in a new era of Canadian administrative law. The analysis in these cases will apply whenever the substance of an administrative decision is challenged in Court. Here’s what you need to know.

1. Standard of review: what is it, and why does it matter?

Administrative decision-makers are creatures of statute, often empowered to regulate specific industries or issues. The CRTC, for example, is an administrative tribunal empowered by various federal statutes to regulate broadcasting and telecommunications in Canada. Similarly, the Immigration and Refugee Board is Canada’s largest independent administrative tribunal and regulates our country’s immigration and refugee processes. The decisions that these and other tribunals, government officials, agencies, and boards make on a daily basis can have major impacts on our lives. Naturally, those who feel aggrieved by administrative decisions often seek to challenge them in court.

Courts have struggled with their constitutional role in reviewing the work of administrative decision-makers. On one hand, the legislature’s decision to delegate regulatory and adjudicative functions to specialized administrative bodies must be respected. On the other, courts have a constitutional duty to uphold the rule of law and to ensure that administrative bodies do not overreach their lawful powers. Since every administrative decision-maker is a creature of statute, their powers are necessarily limited by their enabling legislation. Courts are often called upon to determine the scope of these powers, while being mindful of the legislature’s choice to assign certain determinations to an administrative body (part of the executive branch of the state) and not to the judiciary.

Courts balance these twin imperatives — legislative supremacy and the rule of law — by affording more or less deference to an administrative decision-maker depending on the context. The degree of deference is commonly referred to as the “standard of review”. Since the Supreme Court of Canada’s 2008 decision in Dunsmuir v. New Brunswick, the “standard of review analysis” has required the reviewing court to determine whether the administrative decision needs to be “correct”, in the sense that the court would have reached the same decision, or whether it suffices for the administrative decision merely to be “reasonable”.

If the reviewing court concludes that the administrative decision must be “correct”, then the “correctness” standard of review applies. If the administrative decision need only be “reasonable”, then the “reasonableness” standard of review applies. In recent years, the Supreme Court of Canada has tended to direct courts to be more deferential to administrative bodies, and thus to apply the “reasonableness” standard of review as a strong default.

In the years before Bell Canada, National Football League, and Vavilov, there was widespread and growing frustration and confusion among judges, scholars, and lawyers about the evolution of the Dunsmuir framework for selecting the standard of review. Litigants and courts — including the Supreme Court of Canada — commonly devoted considerable resources to debating whether a particular administrative decision was entitled to deference, i.e., whether the “correctness” (no deference) or “reasonableness” (deference) standard of review should apply. And, even once the standard of review had been determined, there was further confusion with respect to how to apply the “reasonableness” standard.

Bell Canada, National Football League, and Vavilov are the Court’s attempt to calm the waters. In granting leave to appeal in all three cases, the Court stated that it intended to revisit the Dunsmuir framework in deciding them. And so it has.

2. Bell/NFL and Vavilov: The Super Bowl and the Registrar of Citizenship

Bell Canada and National Football League

Two of the “trilogy” of appeals arose out of the same administrative decision, which concerned advertising during the Super Bowl broadcast. For more than 40 years, the Super Bowl had been broadcast in Canada with “simultaneous ad substitution”, known as “SimSub”. Under the SimSub regime, the Super Bowl broadcaster in Canada would substitute its Canadian ads into the American broadcasting channel, to ensure that the Canadian ads were shown on both channels. Canadians could watch the Super Bowl on either the Canadian channel or the American channel, but would receive the same Canadian ads regardless of the channel they watched.

SimSub is a common practice in Canadian broadcasting; whenever the same program is broadcast in Canada on both a Canadian channel and an American channel, SimSub can be used to ensure that the Canadian ads are shown on both channels. In 2016, however, the CRTC banned SimSub for only the Super Bowl.

Bell and the NFL sought judicial review of the CRTC’s decision. The Federal Court of Appeal upheld it. First, applying the reasonableness standard, the Court held that it was reasonable for the CRTC to conclude that it had jurisdiction to make orders targeting one specific program. Second, applying the correctness standard, the Court held that the CRTC’s decision did not conflict with the Copyright Act or international law.

Vavilov

The third appeal emerged out of a very different set of facts, and from a very different administrative setting. Alexander Vavilov was born in Canada in 1994. He lived under the name Alexander Foley, and considered himself Canadian. Unbeknownst to him, however, his parents were undercover Russian spies. In 2010, while living in America, they were arrested and returned to Russia in a spy swap. Having no connection to Russia, Vavilov sought to return to Canada. He argued that he was a citizen, since persons born in Canada have a presumptive right to citizenship under the Citizenship Act. The Registrar of Citizenship disagreed, citing a provision of the Citizenship Act which states that children of employees working for a foreign government are not Canadian citizens, even when born in Canada.

Vavilov sought judicial review of the Registrar’s decision. At first instance, the Federal Court reviewed the decision on a standard of correctness, holding that the decision was correct. On appeal to the Federal Court of Appeal, a majority of the Court reviewed the Registrar’s decision on the more deferential standard of reasonableness, yet overturned the decision. Justice Stratas, writing for the majority, concluded that “the only reasonable interpretation available” was that Vavilov was a Canadian citizen. Justice Gleason, writing in dissent, concurred that the appropriate standard of review was reasonableness, but would have upheld the decision.

3. The new framework and its application

All three appeals — Bell Canada, National Football League, and Vavilov — were heard together at the Supreme Court of Canada in December 2018. In giving judgment more than a year later, a majority of the Court used Vavilov to articulate a new approach to determining the applicable standard of review. The majority also offered fresh guidance for determining whether a decision is reasonable.

Determining the standard of review

The majority held that all administrative decisions should presumptively be reviewed on the reasonableness standard, unless either legislative intent or the rule of law requires otherwise. Specifically, according to the majority, the court should accord deference to the administrative decision unless:

(a) the legislature has indicated that it intends a different standard of review to apply, either:

(i) by explicitly prescribing the applicable standard of review; or

(ii) by providing that the administrative decision may be appealed to a court; or

(b) the rule of law requires that the correctness standard be applied, because the administrative decision raises:

(i) a constitutional question;

(ii) a general question of law of central importance to the legal system as a whole; or

(iii) a question related to the jurisdictional boundaries between two or more administrative bodies.

Notably, the majority in Vavilov eliminated two circumstances in which courts could previously (if only arguably) rebut the presumption of deference: where the administrative decision raised a “true question of jurisdiction”, and where a “contextual inquiry” indicated that the legislature intended the correctness standard to be applied. The majority also eliminated the expertise of the administrative decision-maker as a consideration in determining the applicable standard of review; expertise is now solely relevant to the reasonableness analysis.

Applying the reasonableness standard

Most of the majority’s judgment in Vavilov is devoted to the question of how courts should undertake reasonableness review. This focus is consistent with the court’s desire to see less wrangling between litigants over selecting the standard of review, and more of an emphasis on how the appropriate standard should be applied.

Most significantly, the majority held that a reviewing court must primarily consider the reasons that an administrative decision-maker offered for its decision, rather than merely the conclusion that it reached. As the majority stressed:

It is not enough for the outcome of a decision to be justifiable. Where reasons for a decision are required, the decision must also be justified, by way of those reasons, by the decision-maker to those to whom the decision applies. While some outcomes may be so at odds with the legal and factual context that they could never be supported by intelligible and rational reasoning, an otherwise reasonable outcome also cannot stand if it was reached on an improper basis.

The majority held that, even when procedural fairness does not require the administrative decision-maker to provide reasons, the reviewing court must nonetheless examine the reasoning process underlying the decision. Only in rare cases in which no reasons are provided and neither the record nor the larger context sheds light on the basis for the decision should the reasonableness analysis focus on the outcome.

According to the majority, a reasonable decision is one that is based on internally coherent reasoning and that is justified in light of the legal and factual constraints that bear on it. The majority explains this latter qualification in a manner that is reminiscent of the approach to determining the appropriate degree of procedural fairness required in a particular administrative context, as set out in the Supreme Court of Canada’s 1999 decision in Baker v. Canada (Minister of Citizenship and Immigration). These factors are:

(a) the governing statutory scheme;

(b) other relevant statutory or common law;

(c) the principles of statutory interpretation;

(d) the evidence before the decision-maker and facts of which the decision-maker may take notice;

(e) the submissions of the parties;

(f) the past practices and decisions of the administrative body; and

(g) the potential impact of the decision on the individual to whom it applies.

What all this means for the Super Bowl broadcast, and for Alexander Vavilov

Applying this framework to the facts, a majority of the Court in Bell Canada and National Football League held that the presence of a statutory appeal mechanism in the Broadcasting Act was a crucial signal of legislative intent that rebutted the presumption of deference. To effect the intent of the legislature, the reviewing court must apply the appellate standards of review — set out in the Supreme Court of Canada’s 2002 decision in Housen v. Nikolaisen — to an administrative decision that is appealed to it pursuant to the statutory mechanism. This means that, in such a statutory appeal, all questions of law, including questions of statutory interpretation and those concerning the scope of a decision-maker’s authority, must be reviewed on a correctness standard.

So it was here. Bell and the NFL had appealed the CRTC’s decision to prohibit SimSub during the Super Bowl using the statutory appeal route in section 31(2) of the Broadcasting Act. This provision allows an appeal from a CRTC decision to be brought to the Federal Court of Appeal, with leave, on a question of law or jurisdiction. The statutory appeal mechanism rebutted the presumption of reasonableness review, and the appellate standard of correctness then applied to the question of law or jurisdiction appealed under section 31(2).

The majority in Bell Canada and National Football League concluded that the CRTC’s decision was incorrect. This conclusion flowed from the principles of statutory interpretation, and a review of the text, context, and purpose of section 9(1)(h) of the Broadcasting Act. The majority held that the CRTC’s powers under that provision are limited to authorizing the issuance of mandatory carriage orders on specified terms and conditions, and that a broader reading would nullify the specific powers provided elsewhere in section 9 and in section 10. With respect to the Super Bowl, the majority held, the CRTC did not “purport to mandate the carriage of any particular programming services”, which section 9(1)(h) empowers it to do, but instead sought to add a condition that must be fulfilled should a television service provider carry a station that broadcasts the Super Bowl. Accordingly, the Court quashed the CRTC decision. The ordinary SimSub rules will once again apply to the Super Bowl broadcast.

In Vavilov, the Court concluded that the Registrar’s decision should be reviewed on the reasonableness standard, and that it was unreasonable. Neither legislative intent nor the rule of law rebutted the presumption of deference. On the basis of several factors listed above, the majority concluded that the Registrar’s interpretation of the Citizenship Act was unreasonable. Alexander Vavilov is a Canadian.

For questions about the Super Bowl trilogy, and its potential impact on Canadian administrative law, please contact Steven Mason or Brandon Kain.

4. Case Information

Bell Canada v. Canada (Attorney General); National Football League. v. Canada (Attorney General), 2019 SCC 66

Canada (Citizenship and Immigration) v. Vavilov, 2019 SCC 65

Dockets: 37896; 37897; 37748

Date of Decisions: December 19, 2019

Bell Canada and the NFL were represented by Steven Mason, Brandon Kain, Joanna Nairn, Richard Lizius, and James S.S. Holtom, McCarthy Tétrault LLP

The intervener, Advocates for the Rule of Law, was represented by Adam Goldenberg, McCarthy Tétrault LLP

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