Auer – Supreme Court of Canada finds that the validity of Regulations is to be determined under the Vavilov reasonableness test

Various Canadian decisions have reviewed whether the scope of regulations or other subordinate legislation was consistent with the governing tax legislation and, if not, whether it should be struck out or read narrowly to bring the subordinate legislation back into scope. See Weyerhaeuser, Société des alcools, Mark Anthony, B.C. Ferry, Irving Oil and McNeeley.

In Auer, the appellant asked the court to determine that the Governor in Council (“GIC”) had not acted within the scope of the authority delegated to it under the Divorce Act (Canada) in establishing the Federal Child Support Guidelines, SOR/97‑175. Côté J found that the validity of subordinate legislation (here, such Guidelines) was to be determined in accordance with the Vavilov test of reasonableness, so that “the issue of whether the regulations is a reasonable decision depends on whether the regulations are justifiably (or reasonably) within the scope of the authority delegated by the enabling legislation.” However, she further found:

[F]or subordinate legislation to be found ultra vires on the basis that it is inconsistent with the purpose of the enabling statute, it no longer needs to be “irrelevant”, “extraneous” or “completely unrelated” to that statutory purpose. Continuing to maintain this threshold from Katz Group [2013 SCC 64] would be inconsistent with the robust reasonableness review detailed in Vavilov and would undermine Vavilov’s promise of simplicity, predictability and coherence.

Nonetheless, the following principles from Katz Group continue to inform a Vavilov reasonableness review of the vires of subordinate legislation:

(1) [S]ubordinate legislation must be consistent both with specific provisions of the enabling statute and with its overriding purpose or object; (2) subordinate legislation benefits from a presumption of validity; (3) the challenged subordinate legislation and the enabling statute should be interpreted using a broad and purposive approach to statutory interpretation; and (4) a vires review does not involve assessing the policy merits of the subordinate legislation to determine whether it is necessary, wise, or effective in practice.

Here, the Guidelines were intra vires the GIC, as they fell within a reasonable interpretation of the scope of the GIC’s authority under s. 26.1 of the Divorce Act. Accordingly, the appellant’s challenge to the Guidelines failed.

Neal Armstrong. Summary of Auer v. Auer, 2024 SCC 36 under Statutory Interpretation – Regulations/ Statutory Delegation.