In a recent decision, the Federal Court of Appeal (the Court) considered whether the government can restrict parties from challenging government agencies and decision makers in court.
Generally speaking, a person (including a corporation) that is directly impacted by a regulatory decision made by a government agency or decision maker has the right to challenge that decision by way of an application in court for judicial review. The purpose of an application for judicial review is to ensure that government decision makers do not act outside the bounds of their statutory authority. On judicial review, the court will consider whether the decision was reasonable or, in some limited cases, whether the decision was “correct.” Decisions made by government agencies and decision makers may also be reviewed by the court to ensure that they are procedurally fair.
In some cases, the federal or provincial government has passed legislation purporting to restrict the ability of an impacted party to apply for judicial review of a regulatory decision. This was the issue that arose in Democracy Watch v. Canada (Attorney General).
Democracy Watch, a non-profit organization, brought an application for judicial review seeking to set aside a decision of the Conflict of Interest and Ethics Commissioner (the Commissioner) finding that the Prime Minister did not contravene the Conflict of Interest Act by participating in two decisions involving a charity known as “WE Charity.” The Commissioner sought to dismiss the application for judicial review relying on s. 66 of the Conflict of Interest Act, which limits the circumstances in which a person can judicially review a decision of the Commissioner. In other words, s. 66 partially restricts the ability of an impacted party to challenge a decision of the Commissioner in court by way of judicial review.
Justice Stratas of the Federal Court of Appeal refused to decide the Commissioner’s application to dismiss due to a serious conflict in the law regarding the validity of such partial restrictions on judicial review. One branch of case law says that partial restrictions on judicial review are contrary to the rule of law and should be ignored. However, another says that partial restrictions on judicial review are valid as long as they are supported by a pressing and valid government objective and are otherwise consistent with the rule of law, the ability of the judiciary to assess whether state action conforms with the Constitution, and the requirement of fair and impartial administration of justice.
Democracy Watch then applied for disclosure of certain confidential documents from the Commissioner, which it argued were necessary to pursue its application for judicial review. In a separate decision, Justice Stratas found that the motion put the Commissioner in an “untenable position,” in which it was being asked to disclose confidential documents in support of an application for judicial review that might be barred under s. 66 of the Conflict of Interest Act. In order to resolve this “conundrum,” Justice Stratas ordered the document production application to proceed in two stages. First, the Court will hear and determine the legal issue regarding the validity of the partial restriction on judicial review under s. 66 of the Conflict of Interest Act. Second, the Court will hear and determine the judicial review application (provided it is not barred under s. 66).
The uncertainty in the law regarding partial restrictions on judicial review has also arisen in other Canadian jurisdictions. The Supreme Court of Canada recently granted leave to appeal the Ontario Court of Appeal’s decision in Yatar v. TD Insurance Meloche Monnex, which raises similar issues. This means that the Supreme Court of Canada will be weighing in on this issue in the near future.
The upcoming decisions of the Federal Court of Appeal and the Supreme Court of Canada regarding the validity of partial restrictions on judicial review will have a significant impact on any organization operating in a regulated industry. The ability to challenge the decision of a government agency or decision maker by way of judicial review enables organizations to hold government accountable and ensure that the decisions that impact them are reasonable and fair. Dentons’ regulatory litigation group is closely tracking these developments, and will provide further updates as they arise.
For more information on this topic, please reach out to the authors, Morgan Camley, Mélanie Power and Kathryn Gullason.
 Democracy Watch v. Canada (Attorney General), 2023 FCA 39.
 S.C. 2006, c. 9, s. 66.
 Democracy Watch v. Canada (Attorney General), 2022 FCA 208.
 Canada (Attorney General) v. Best Buy Canada Ltd., 2021 FCA 161.
 Canada (Citizenship and Immigration) v. Canadian Council for Refugees, 2021 FCA 72 at paras. 102-103.
 Democracy Watch v. Canada (Attorney General), 2023 FCA 39 at para. 7.
 Democracy Watch v. Canada (Attorney General), 2023 FCA 39 at paras. 11 and 16.
 Democracy Watch v. Canada (Attorney General), 2023 FCA 39 at para. 16.
 2022 ONCA 446.