Unit 4

Question 1

What are three branches of government in Canada?

Answer 1

the legislative branch, the executive branch, and the judicial branch.

Question 2

“responsible government”

Answer 2

” because the minister was responsible to the executive branch (the prime minister or premier and his or her Cabinet colleagues), and because the minister and his or her fellow ministers were responsible for the work of the departments to the elected legislature and—through the legislature—to the Canadian public.

Question 3

Why are special- purpose agencies were established outside the traditional structure of the executive branch?

Answer 3

To allow the government to carry out civil service functions with greater flexibility, efficiency, and expertise.

Question 4

Categorizing Agencies, Boards, and Commissions

Answer 4

• Advisory agencies - advice to a ministry and assist in the development of policy or the delivery of programs, but they do not make decisions or carry out programs. The Livestock Medicines Advisory Committee and the Commodity Futures Advisory Board are two such agencies.
• Operational service agencies - deliver goods or services to the public, often at a low fee or no fee. The Ontario Tourism Marketing Partnership Corporation is an example of such an agency.
• Operational enterprises - sell goods or services to the public in a commercial manner. They may compete with the private sector, or they may be monopolies. Examples are the Niagara Parks Commission, the Liquor Control Board of Ontario, and the Ontario Lottery and Gaming Corporation.
• Regulatory agencies - agencies make independent decisions (including inspections, investigations, prosecutions, certifications, licensing, and rate setting) that limit or promote the conduct, practice, obligations, rights, and responsibilities of individuals, businesses, and corporate bodies. Examples include the Ontario Film Review Board and the Workplace Safety and Insurance Board.
• Adjudicative agencies (often referred to as “tribunals”) make independent decisions, similar to those of courts, that resolve disputes over the obligations, rights, and responsibilities of individuals, businesses, corporate bodies, and government decision-makers under existing policies and laws. They may also hear appeals from previous government decisions. Two such agencies are the Ontario Labour Relations Board and the Ontario Municipal Board.
• Crown foundations These agencies solicit, manage, and distribute donations of money or other assets to support public organizations such as art galleries, museums, amateur sports associations, theatre groups, and universities. Examples are the Art Gallery of Ontario Crown Foundation and the University of Toronto Foundation.
• Trust agencies- agencies administer funds or other assets for beneficiaries named under a statute. Examples include the Workplace Safety and Insurance Board and the Ontario Public Service Pension Board.

Question 5

Agency roles

Answer 5

It is important to understand that some agencies carry out more than one function. An agency may have any combination of advisory, regulatory, investigative, policy-making, adjudicative, and other functions.

Question 6

Why Governments Create Administrative Agencies?

Answer 6

• To demonstrate independence The government may want to ensure that decisions on certain issues are not seen to be “political.” An agency that is independent and that is perceived to be independent, can demonstrate that its function and decisions are free of political influence.
• To reduce the size, workload, or budget of a department The government may establish an outside agency to carry out some of the functions of a department in order to save space, achieve more efficiency in the delivery of services, or reduce costs.
• To reduce conflicts of interest Where one government department carries out two or more functions that may come into conflict, the conflict may be resolved by “hiving off” some of the department’s functions to independent bodies. For example, until the 1990s, the Ontario Ministry of the Environment (now the Ministry of the Environment and Climate Change) was responsible for regulating municipal water treatment and sewage treatment plants, but it also designed, built, owned, or operated many of the plants. If one of the plants were in violation of environmental laws, the Ministry might be reluctant to impose stringent operating conditions on one of its own facilities or to prosecute its own staff. To prevent this conflict, the government created a separate agency, the Ontario Clean Water Agency, in 1993.
• To provide flexibility in human resources The government may want to avoid some of the hiring practices, employment standards, salary and benefits rules, tenure requirements, and reporting requirements that must be followed when employing civil servants. For example, in Ontario, the Civil Service Commission regulates salaries, job classifications, recruitment, benefits, and hours of work for civil servants. Ministries are required to follow these rules when hiring, promoting, setting wage levels, or firing, but the government is not bound by them when appointing members of many agencies, boards, and commissions. The government can set lower wages, appoint members who have no prior experience or qualifications for the job, and limit the length of the appointments or the opportunities for reappointment.
• To provide expertise and specialization The government may want to obtain expertise in a particular subject matter that is not readily available within the civil service. The use of outside bodies to bring expertise to a problem is common in the setting of technical standards, the provision of advice, and the regulation of specialized businesses, trades, and professions.
• To ensure representativeness The government may want to involve members of the general public or particular interest groups in making some decisions.
• To avoid permanence The government may want the flexibility to create a body to deal with a current problem or issue and then to disband or restructure it to reflect changing needs.
• To reduce labour costs Appointment to an agency is usually considered an honour; as a result, highly skilled and dedicated people are often willing to work for fees much lower than they can command in the marketplace. Moreover, many agencies are composed wholly or largely of part-time members. Talented individuals who might not be willing or able to work full time for low wages are often willing to work for a few days or weeks per year at reduced levels of compensation.
• To signal a new or different approach The government may create an outside agency where existing agencies have been found wanting in their approach to a problem, or where a new approach to an existing problem is desired. Similarly, the government may create a new agency to regulate an activity or matter that was previously unregulated. Examples of areas that were once unregulated are human rights, the environment, and rent review. More recent examples include access to government information, the protection of privacy, and genetic engineering.
• To achieve coordination or uniformity Where similar or related functions are carried out by several departments or ministries, the government may create a new agency to carry out those functions, or it may set up an advisory agency to help coordinate the activities of all the departments. The result may be a more consistent approach, greater effectiveness or efficiency, or a pooling of resources. The Canadian Food Inspection Agency is an example of a coordinating agency. It was created in 1997 to bring together food inspection activities previously carried out by four federal government departments— Agriculture Canada, Fisheries and Oceans Canada, Health Canada, and Industry Canada.

Question 7

nemo debet esse judex in propria causa - means

Answer 7

“No one shall be a judge in his own cause” (in Latin,

Question 8

Administrative Tribunals in the ABC Scheme

Answer 8

Some agencies are required by statute or by common law to follow procedures similar to those of courts in making decisions. These agencies are called administrative justice tribunals or, more simply, administrative tribunals or tribunals. Tribunals may also be called boards or commissions, among other names. They are created by special statutes passed by Parliament or a provincial legislature for the purpose of adjudicating (settling) disputes between individuals and/or companies, or between individuals or companies and the government, over statute-based rights, entitlements, and duties.

Question 9

Examples of Quasi-Judicial Tribunals

Answer 9

■ Federal and provincial parole boards, such as the Ontario Parole and Earned Release Board, decide whether inmates of jails and prisons may be released before they have served their full sentences.
■ Property tax assessment review boards, such as the Alberta Assessment Appeal Board, hear appeals by property owners of their property tax assessments.
■ Tribunals, such as Ontario’s Social Benefits Tribunal, determine applicants’ eligibility for social assistance payments.
■ The federal and provincial human rights tribunals determine whether personshave suffered discrimination based on prohibited grounds such as sex, age, race, or religion, and, where appropriate, order remedial action and compensation.
■ Ontario’s Criminal Injuries Compensation Board determines whether an applicant’s injuries were caused by criminal conduct and, if they were, how the provincial government should compensate the injured person.
■ Land-use planning tribunals, such as the Alberta Planning Board and the Ontario Municipal Board, hear cases relating to municipal planning and financing, including appeals from municipal government decisions about zoning and official plans.
■ The Ontario Child and Family Services Review Board hears applications for release from children being held in secure treatment facilities due to concern that they may harm themselves or others, as well as appeals from refusals of government officials to approve the adoption of a child.
■ Federal and provincial energy boards, such as the National Energy Board, the Alberta Energy Regulator (formerly the Alberta Energy and Utilities Board), and the Ontario Energy Board, set the rates that hydroelectric utilities and gas distributors may charge their customers.
■ Licensing bodies, such as the Alcohol and Gaming Commission of Ontario, decide whether it is in the public interest to issue liquor licences to restaurants and other facilities that wish to serve alcohol, and may suspend or revoke licences that are abused.
■ The federal Immigration and Refugee Board hears appeals from decisions of federal immigration officials to refuse entry to individuals who are not Canadian citizens or remove them from Canada.

Question 10

tribunal

Answer 10

a type of agency that is not a court but operates like a court in deciding disputes between individuals and/or companies, or between individuals or companies and the government, over statute-based rights, entitlements, and duties

Question 11

inquisitorial system:

Answer 11

a system of resolving disputes through holding a hearing in which the judge or adjudicator plays an active role in investigating, collecting facts, putting forward evidence, and questioning witnesses

Question 12

enabling legislation:

Answer 12

a statute that sets out the powers of an agency; it is often, but not always, the statute that establishes the agency; some agencies are established by one statute but carry out functions under several statutes, each of which may give it powers for the purpose of the functions governed by that statute

Question 13

alternative dispute resolution:

Answer 13

methods of resolving disputes without adjudication, such as conciliation or mediation, in which a facilitator seeks to assist the parties in reaching an agreement without a formal hearing

Question 14

adversarial system:

Answer 14

a system of resolving disputes by holding a hearing in which the judge or adjudicator does not actively seek out the truth or investigate but relies on opposing parties or their representatives to present evidence and challenge each other’s evidence; the adjudicator’s decision is based on the evidence presented, regardless of how complete or incomplete the evidence is

Question 15

adjudication:

Answer 15

the process of receiving and considering the evidence and arguments presented by both sides in a dispute and making a binding decision by applying relevant law to the issues in the case

Question 16

Why Governments Delegate Decisions to Tribunals

Answer 16

• The government wants to create a mechanism to review the decision of a government decision-maker. In many cases, an initial decision may be made in an informal manner, so a statutory right to appeal the decision to a tribunal ensures that the decision can be judged objectively and fairly.
• The decision-maker must resolve a dispute between two or more individuals or companies rather than deciding an issue strictly between the government and an individual.
• The decision has serious consequences for a person or for society. An informal decision-making process for decisions that may affect things such as an individual’s livelihood or the public’s health or safety is inappropriate. The higher the stakes involved, the more likely it is that the agency making the initial decision will be a tribunal, or if the initial decision is made by a department or an agency that is not a tribunal, there will be an appeal to a tribunal.

Question 17

Advantages of Tribunals over Government Administrators or Politicians

Answer 17

to demonstrate the impartiality of a decision-making process and avoid any perception that the decision-maker is biased (that is particularly important where the decision of a government official or minister is being reviewed, since an appeal to someone within the same department may not appear to be impartial);
• to ensure fairness of procedure and outcome through the use of a procedure similar to that of a court;
• to send a message to the community that the issue is important to the government;
• to distance the government from potentially unpopular or controversial decisions;
• to allow for citizen participation (to give the public affected by a government decision the opportunity to participate in the decision-making process);
• to involve experts in the decision; or
• to handle cases more efficiently or cost-effectively (where this may be achieved more easily by creating a new agency than by expanding or modifying the structure of an existing ministry).

Question 18

Advantages of Tribunals over Courts

Answer 18

The traditional rationale for the establishment of administrative tribunals is cheapness, expedition, and expertise. The objectives are freedom from what is popularly seen as the undue delay and cost of court proceedings and the inexperience of judges trained in the law but not in matters of social improvement. Roosma v Ford Motor Co of Canada Ltd (1988), 66 OR (2d) 18 at 24 (Div Ct)

Question 19

Similarities Between Tribunals and Courts

Answer 19

Like courts, tribunals generally must
• ensure that all parties have been given reasonable notice of the proceedings before the hearing begins;
• ensure that all parties have an opportunity to present their case;
• ensure that all parties have been informed of the case they have to meet;
• allow all parties to present evidence and to cross-examine witnesses or test the accuracy of the evidence against them in other ways;
• grant adjournments if a party would otherwise be deprived of a reasonable opportunity to present its case fully;
• allow all parties to be represented by a lawyer or agent; • avoid any statements or actions that would suggest that the tribunal has prejudged issues or harbours a bias for or against a party;
• apply the law that governs the proceedings and take into account considerations that are relevant under that law;
• give all parties a chance to make final submissions; and
• give reasons for their decisions that are reasonably clear.

Question 20

Differences Between Tribunals and Courts

Answer 20

The rules and procedures of tribunals are generally less formal and more flexible than those of courts. This can be an advantage or a disadvantage to the parties. The differences between tribunals and courts in matters of substance and style are summarized in Tables 2.1 and 2.2.

Question 21

What are two different approaches to the conduct of hearings?

Answer 21

adversarial and the inquisitorial.
In an adversarial system, one of the parties usually has the burden of proof. In an inquisitorial system, the tribunal itself may have the burden of finding enough evidence to determine whether a party is entitled to a remedy. In other words, in an inquisitorial system, a party could win even if he or she doesn’t show up for the hearing!

Question 22

The purposes of clustering are?

Answer 22

to promote the best use of resources through cross-agency cooperation and coordination of operations and administration, as well as to enhance consistency in tribunal practices, procedures, and decisionmaking. Tribunals maintain their separate identities and legislative mandates, but they can coordinate their operations. This coordination can improve access to justice and foster consistency in the application of principles of procedural fairness.

Question 23

tribunals and courts

Answer 23

Both tribunals and courts apply the law, but tribunals also apply government policy and often base their decisions on their interpretation of the public interest as well as on the rights or interests of the parties. Like courts, they must be independent from the executive branch in order to remain impartial. However, they are not as independent ascourts, and their members lack the security of tenure that secures the independence of judges.

Question 24

What Is Administrative Law?

Answer 24

Administrative law primarily regulates the activities of the executive branch of government, rather than the legislative or judicial branches. It is the body of rules and principles that regulate how the government departments and agencies that administer and enforce our laws, and other bodies created or given powers by statute, must behave when carrying out their functions. Administrative law also encompasses the authority of the superior courts to supervise how these departments and agencies carry out their powers, the procedures that these courts follow, and the remedies that the courts can provide when departments or agencies act outside their authority or exercise their powers in an unreasonable or unfair manner.

Question 25

Administrative law is founded on six fundamental principles:

Answer 25

1. Decision-makers who exercise powers granted by statute (“administrators”) must stay within their legal authority, or jurisdiction.
2. Administrators must exercise their judgment in a reasonable manner when they have discretion in making decisions.
3. Administrators must follow fair procedures when making decisions that affect a person’s rights or interests. This principle is known as “procedural fairness” or, in some cases, “natural justice.” It protects the rights and interests of persons affected by a decision by providing for
   a. the right of persons to be given notice of intended decisions that may affect them and the right to be heard before such decisions are put into effect; and
   b. the right to an impartial decision-maker.
4. A person to whom the legislature has delegated authority to carry out a function may not delegate it to someone else. There are some exceptions tothis principle, which is known as “the rule against subdelegation” and which is important but less central to administrative law than the first threeprinciples.
5. To be valid, subordinate (or delegated) legislation must conform to the statute under which it is passed. In other words, regulations and bylaws must be consistent with the objectives of their enabling statutes and the scope of the regulatory powers set out in those statutes. This is an important check on the power of the executive branch of government to make laws that are not subject to review by the legislature.
6. If decision-makers violate any of the above principles, the superior courts have an inherent power to intervene to rectify this failure. This intervention is called “judicial review.” It is an important mechanism for preventing abuse of executive power because it is available even when the legislature has made no provision for an appeal of executive actions. As well, any law that a legislature passes to prevent judicial review is unconstitutional and therefore invalid.

Question 26

Who Is Subject to Administrative Law?

Answer 26

Administrative law governs the exercise of powers granted by statute. Thus, any individual or body exercising a power granted by statute or regulation is subject to the principles of administrative law. This means that, in addition to government entities, organizations such as universities, hospitals, and self-regulating professions that are established or given powers by statute must follow the principles of administrative law when exercising those powers.

Question 27

Evolution of Administrative Law

Answer 27

apply whenever departments and agencies made any administrative or quasi-judicial decision— other than a legislative or policy decision, or a minor administrative decision—that affected an individual’s rights, privileges, or interests.
extended the application of fairness principles to require decision-makers to consult individuals who have come to rely on a policy or a procedure before they change the policy or procedure where those individuals have been led (by a promise or other administrative action) to have a “legitimate expectation” that the policy or procedure would continue to apply.

Question 28

Define natural justice

Answer 28

Until the late 1970s, if a decision was considered quasi-judicial, the official responsible for making the decision was required to give the affected individual a hearing before making the decision. This requirement was known as natural justice.

Question 29

5 Things Tribunals do

Answer 29

1. Resolve disputes
2. Make decisions on rights and benefits
3. Hear complaints
4. Hear appeals
5. Make rules for the protection of the public

Question 30

principle or doctrine was called procedural fairness .

Answer 30

At a minimum, anyone adversely affected by such a decision must be told the reasons for it and given an opportunity to respond, or at least to “be heard” by an unbiased decision-maker, if not to have a full “hearing.” 7 Affected persons were entitled to be given notice of the decision and the reasons for it, and an opportunity to respond; this principle or doctrine was called procedural fairness.

Question 31

principle or doctrine was called procedural fairness .

Answer 31

At a minimum, anyone adversely affected by such a decision must be told the reasons for it and given an opportunity to respond, or at least to “be heard” by an unbiased decision-maker, if not to have a full “hearing.” 7 Affected persons were entitled to be given notice of the decision and the reasons for it, and an opportunity to respond; this principle or doctrine was called procedural fairness.
the standard of treatment required of all agencies, including tribunals, is generally referred to as “procedural fairness,” even though the duties that this entails differ depending on several factors, including whether the body making the decision is a tribunal or some other body or an individual. “Natural justice” is still sometimes used to describe the particular kind of procedural fairness that applies totribunals.

Question 32

What Is Jurisdiction?

Answer 32

Jurisdiction is a central concept of administrative law. Simply defined, it refers to the scope of the authority or powers conferred on a government body or official by legislation or by common law. The concept of jurisdiction is expressed in the principle that government bodies and officials must always act within their legal authority or powers. If an administrator does something outside his or her jurisdiction, that action is invalid because it is ultra vires (Latin for “outside his or her powers”), and the decision may be struck down by a court

Question 33

Sources of Jurisdiction:

Answer 33

Statutes and Common Law

Question 34

declining jurisdiction:

Answer 34

failure of an official or agency to carry out a statutory function that it has a duty to perform

Question 35

discretion:

Answer 35

the power of a government official or agency to choose a course of action from among a variety of options available under the law

Question 36

fettering discretion:

Answer 36

in relation to the actions of a statutory decision-maker, refusing to consider an option that is available under the law, or refusing to consider any factor that is relevant to the choice of an option, when making a decision that affects a person’s rights or interests

Question 37

implied powers doctrine:

Answer 37

the common law rule that agencies have whatever additional powers are necessarily incidental to their explicit powers; a court will find these powers by necessary implication only where the jurisdiction sought is necessary to accomplish the objectives of the legislative scheme and is essential to the body fulfilling its mandate; see the necessary implication

Question 38

inherent powers doctrine:

Answer 38

the common law rule that an agency has an inherent power to utilize a procedure that is reasonably necessary to carry out its statutory functions even if that power is not explicitly set out in a statute

Question 39

institutional bias:

Answer 39

bias or the appearance of bias on the part of a group of decisionmakers in an agency, or of the agency as a whole, arising from aspects of the agency’s structure or functions that suggest a lack of independence from a government official or body affected by a decision of the agency

Question 40

judicial review:

Answer 40

the exercise by a superior court or other court granted authority by statute of its supervisory authority over ministries and other government agencies by reviewing whether they have carried out their functions in accordance with the principles of administrative law

Question 41

jurisdiction:

Answer 41

the scope of the authority or powers conferred on a government body or official by legislation or by common law

Question 42

legitimate expectations:

Answer 42

the principle that public officials who create the expectation of a certain result, or an expectation that a certain practice or procedure will be followed, should not be able to change that result, practice, or procedure where the change will have an adverse effect without first notifying those who will be affected and giving them an opportunity to comment on the proposed change

Question 43

natural justice:

Answer 43

a body of rules or set of principles of fair procedure that tribunals must follow; see procedural fairness

Question 44

necessary implication:

Answer 44

an implication so probable that it would be unreasonable to draw any other inference from the facts; see implied powers doctrine

Question 45

procedural fairness:

Answer 45

the requirement that a decision-maker acting under a statutory power of decision must give any person whose rights, privileges, or interests may be affected by a decision reasonable notice of the intended decision and the reasons for it, and an opportunity to respond, and must be impartial, even if the function of the decision-maker is not quasi-judicial in nature; see natural justice

Question 46

subdelegation:

Answer 46

in relation to a power or authority that a statute has delegated to a particular person, the act of delegating that power or authority to another person

Question 47

Nicholson v Haldimand-Norfolk

Answer 47

Nicholson v Haldimand-Norfolk Regional Police Commissioners, [1979] 1 SCR 311 FACTS: Nicholson was hired as a constable under an employment contract that included a 12- month probationary period. After 11 months, Nicholson was promoted. Three months later, the municipality terminated Nicholson’s employment. A provision of a regulation under the Police Act provided that no police officer was subject to any penalty except after a hearing on appeal, subject to exceptions including the authority of the board “to dispense with the services of any constable within 18 months of his appointment to the force.”
ISSUE: Was Nicholson entitled to procedural fairness? DECISION: Nicholson could not claim the procedural protections of a constable who had worked for longer than 18 months. However, regardless of whether his dismissal was an administrative function or a quasi-judicial function, he had the right to be treated fairly. He should have been told why his employment was being terminated and allowed the chance to respond. If this had been done, and the board’s decision was not arbitrary and was made in good faith, his termination would not have been reviewable by the courts. (However, see Dunsmuir v New Brunswick , 2008 SCC 9, [2008] 1 SCR 190 . Why was Mr. Nicholson entitled to procedural fairness while Mr. Dunsmuir was not?)

Question 48

Procedural Fairness and the Appearance of Impartiality

Imperial Oil Ltd v Quebec (Minister of the Environment) , 2003 SCC 58, [2003] 2 SCR 624, 231 DLR (4th) 577 FACTS:

Answer 48

Procedural Fairness and the Appearance of Impartiality Imperial Oil Ltd v Quebec (Minister of the Environment) , 2003 SCC 58, [2003] 2 SCR 624, 231 DLR (4th) 577

FACTS: There was environmental contamination at a site once operated by Imperial Oil, and the minister of the environment ordered Imperial to pay for and submit a site characterization study. Imperial refused to do the study, and asked the Administrative Tribunal of Quebec to quash the minister’s order. One of Imperial Oil’s arguments was that the rules of procedural fairness were violated because the minister was in a conflict of interest because the minister had been involved in earlier decontamination work and was being sued concerning contamination of the site by the present owners of the land. This case was heard by the tribunal, then by the Superior Court, then by the Quebec Court of Appeal, and eventually by the Supreme Court of Canada.
ISSUE: Did the minister have the appearance of impartiality required by the rules of procedural fairness? DECISION: The minister had the authority to issue this kind of order under the Environment Quality Act, which allows for broad ministerial discretion. The minister’s decision under the statute was mainly political, involving his duty to serve the public interest; he was not performing an adjudicative function. While the minister did have to comply with procedural fairness rules—such as providing notice to interested persons and providing reasons for the decision—the principle of impartiality did not apply to this decision. The minister was representing the public interest, not his own personal interests. His decision was upheld.

Question 49

Rule Against Subdelegation

Can-Du Air Ltd v Canada (Minister of Transport) (1994), 25 Admin LR (2d) 231 (FCTD)

Answer 49

Rule Against Subdelegation Can-Du Air Ltd v Canada (Minister of Transport) (1994), 25 Admin LR (2d) 231 (FCTD) FACTS: Can-Du Air Ltd. applied to the minister of transport for a certificate allowing it to operate a heliport. Can-Du passed all safety, operational, and environmental inspections. However, the minister of transport refused to approve the certificate based, in part, on the opposition of the city council and the deputy minister of municipal affairs, who claimed that the heliport was against the public interest.
ISSUE: Did the minister of transport make an unauthorized delegation of her decisionmaking power by relying on the opinions of the city council and the deputy minister of a different ministry?
DECISION: The minister of transport did not improperly subdelegate her power. Neither the city council nor the deputy minister of municipal affairs made the final decision. Rather, the minister of transport considered their opinions and agreed with them that the heliport would not be in the public interest.

Question 50

The legitimacy of Subordinate Legislation

Katz Group Canada Inc v Ontario

Answer 50

Legitimacy of Subordinate Legislation Katz Group Canada Inc v Ontario (Health and Long-Term Care), 2013 SCC 64, [2013] 3 SCR 810
FACTS: In 1985, Ontario passed two statutes to reduce the cost to consumers of purchasing prescription drugs, the Drug Interchangeability and Dispensing Fee Act and the Ontario Drug Benefit Act. The first statute authorizes the minister to designate a cheaper generic drug as interchangeable with a more expensive brand-name drug. Pharmacists are required to sell to customers the cheaper drug if they arrive with a prescription for the brand-name drug. The second statute prohibits drug manufacturers from giving pharmacies a substantial rebate to induce them to buy their products. The price that manufacturers charged and that customers paid was artificially increased to the extent of the rebates. So the expected savings did not occur, and manufacturers continued to charge high prices for generic drugs. Instead of the rebates, manufacturers started paying pharmacies $800million a year in “professional allowances.” As a result, the acts were amended to eliminate the payment of professional allowances. The regulations were also amended to prevent pharmacies from controlling manufacturers who sell generic drugs under their own name but do not fabricate them. Under the regulations, these “private label” products cannot be listed in the Formulary or designated as interchangeable.
ISSUE: Were the regulations inconsistent with the purpose of the statutes under which they were made, and therefore ultra vires?
DECISION: The intent of the two statutes was to control the cost of prescription drugs in Ontario without compromising safety. This included promoting transparent pricing and eliminating price inflation along the drug supply chain, both with the objective of lowering drug costs. The purpose of the regulations was to prevent a possible mechanism for circumventing the ban on rebates that had kept drug prices high. If pharmacists were permitted to create their own affiliated manufacturers whom they controlled, they would be directly involved in setting the Formulary prices and would have strong incentives to keep those prices high. Therefore, the regulations were consistent with the statutory purpose of reducing drug costs. The regulations were intra vires.

Question 51

Review Questions

Answer 51

1. In Chapter 1 you learned that laws can be divided into several categories: common law and statute law, public law and private law, statute law and subordinate legislation, and substantive law and procedural law. Into which of these categories does administrative law fit, and why?
2. What are the six fundamental principles of administrative law?
3. What is the difference between procedural fairness and natural justice, and to what kinds of bodies does each apply?
4. What are the two components of procedural fairness? 5. What is “jurisdiction,” and why is it important that agencies not act outside this?
5. What is “discretion,” and what considerations must a decision-maker bear in mind when exercising discretion?
6. What kinds of action or inaction constitute an abuse of a decision maker’s discretion?
7. What is subdelegation? Why is it often not permitted, and in what circumstances is it allowed?
8. What kinds of decisions must be made using procedures recognized by the courts as fair?
9. What kinds of decisions, if any, are exempt from the requirement to act fairly?
10. What are the components of impartiality, and how do they apply to tribunals and other agencies?
11. Where would you look to find the principles of procedural fairness that apply to a. agencies in general, b. a particular agency, and c. the Aboriginal and treaty rights of Aboriginal peoples?
12. Which courts have a power to conduct a judicial review of the decisions of administrative bodies, and what kinds of orders can they make?