What Does Democracy Watch Mean for Administrative Decisionmakers?
Jake Stoddard is an award-winning graduate of the University of New Brunswick Law School who has spent the last year furthering his understanding of the law as a Clerk of the Federal Court of Appeal.
The administrative law community has been abuzz about the Supreme Court of Canada’s decision in Democracy Watch v Canada (Attorney General).[1] Lawyers and commentators think this decision seriously changes the game for legislators and litigators.
But what about for administrative decisionmakers?
While Democracy Watch is a major decision, I do not think the day-to-day for administrative decisionmakers will change all that much.
What is Democracy Watch about?
In 2020, then-Prime Minister Justin Trudeau awarded a contract to WE Charity to administer the Canada Student Service Grant program. Certain members of Parliament requested that the Conflict of Interest and Ethics Commissioner (the “Commissioner”) investigate this decision, as WE Charity had previously paid members of Mr. Trudeau’s family for speaking appearances. These members of Parliament were concerned there may have been a breach of the Conflict of Interest Act.[2] The Commissioner completed its report and found that Mr. Trudeau had not breached the Act.[3]
Democracy Watch, an advocacy group, applied to the Federal Court of Appeal[4] for judicial review of the Commissioner’s decision, alleging there were errors of fact and law in the Commissioner’s report.[5]
Judicial History
Despite finding that Democracy Watch had public interest standing to pursue its application,[6] the Federal Court of Appeal agreed with the Attorney General that the application was precluded because the Conflict of Interest Act provided an adequate alternative remedy in the form of political oversight.[7] Chief Justice de Montigny would have also found that section 66 of the Conflict of Interest Act, a so-called privative clause aimed at limiting the review authority of the courts,precluded judicial review on the grounds Democracy Watch raised.[8] A majority of the panel disagreed with the latter view, though they still dismissed the appeal on the alternative remedy ground.[9]
The Supreme Court’s Decision
The Supreme Court disagreed with Chief Justice de Montigny on both points.
It first dealt with the issue of adequate alternative remedy. The Supreme Court found that the “Federal Court of Appeal’s reasons do not demonstrate the required analysis of the appropriateness and suitability of judicial review in the circumstances”.[10] Chief Justice Wagner determined that “Democracy Watch has no recourse under the COIA to ask Parliament, or anyone other than the courts, to review the Commissioner’s report”.[11] Because of this, the Supreme Court found that “political oversight of the Commissioner’s activities” was not an adequate alternative to judicial review.[12]
The more exciting finding, however, is that the Supreme Court found that section 66 of the Conflict of Interest Act cannot oust the courts’ jurisdiction to judicially review executive actions. This, it said, would impermissibly “trench on the powers assigned exclusively to the courts by ss. 96 to 101 of the Constitution Act, 1867”.[13] It made this ruling because the “supervision of the administrative state through judicial review of the exercise of public powers” is “an essential [aspect] of the courts’ constitutional function”.[14]
To properly make this finding, the Court had to determine “what, precisely, is constitutionally guaranteed—that is, what the core constitutional minimum of judicial review entails”.[15]
Answering this question, the Supreme Court said that “the availability of legality review — that is, review to ensure that an exercise of public power has not exceeded the boundaries of an administrative decision-maker’s delegated authority — is constitutionally guaranteed”.[16]
But in identifying that minimum, the Supreme Court differentiated ousting review of certain questions from establishing legislated standards of review. Chief Justice Wagner declined to find that “the reasonableness standard articulated in Vavilov is constitutionally entrenched”—“the common law standards of review can be and have been modified over time”, after all.[17] He also said that “legislated standards of review are valid, provided they respect the limits of the rule of law”.[18]
The Court said that “the question of what minimum standard of review is constitutionally guaranteed is not before us, and should therefore be left to another day”.[19] For Democracy Watch’s appeal, it was enough to ask “whether, properly interpreted, the impugned provision has the effect of ousting judicial review for legality of any aspect of an administrative decision”.[20]
Then, the Supreme Court applied this finding to the privative clause in the Conflict of Information Act.
Subsection 18.1(4) of the Federal Courts Act lists the grounds of judicial review upon which the Federal Courts can normally grant relief on judicial review:
Grounds of review
(4) The Federal Court may grant relief under subsection (3) if it is satisfied that the federal board, commission or other tribunal
(a) acted without jurisdiction, acted beyond its jurisdiction or refused to exercise its jurisdiction;
(b) failed to observe a principle of natural justice, procedural fairness or other procedure that it was required by law to observe;
(c) erred in law in making a decision or an order, whether or not the error appears on the face of the record;
(d) based its decision or order on an erroneous finding of fact that it made in a perverse or capricious manner or without regard for the material before it;
(e) acted, or failed to act, by reason of fraud or perjured evidence; or
(f) acted in any other way that was contrary to law.
Section 66, however, says that orders and decisions of the Commissioner could only be reviewed on grounds referred to in paragraphs 18.1(4)(a), (b), or (e). By excluding paragraphs (c) and (d), section 66 seems to expressly exclude review of questions of fact and of law.
Democracy Watch offered an argument that the Court could read section 66 into constitutional compliance by finding that the jurisdictional review considered in paragraph 18.1(4)(a) “includes legality review on questions of fact and law”.[21] But the Court preferred the alternative argument that the privative clause was simply “unconstitutional and should be declared of no force and effect”.[22] Even though “courts have tended to read these clauses into constitutional compliance”,[23] the Supreme Court wrote that that tendency “has strained the limits of the presumption of constitutionality”.[24]
The Supreme Court said that since subsection 18.1(4) clearly treats questions of fact and law separately from questions of jurisdiction, “Parliament’s intent was to invoke ‘jurisdiction’ in its narrower, modern sense, analogous to the category of ‘true questions of jurisdiction’”.[25] So, the Court read section 66 as aiming “to oust judicial review on questions of fact and law” and therefore found it non-compliant with the constitution and declared it of no force and effect.[26]
So How Does This Decision Affect Administrative Decisionmakers?
As I said at the start, I do not think this changes the way decisionmakers should approach their work.
Many statutes, both federal and provincial, contain privative clauses. The New Brunswick Public Service Labour Relations Act says “[e]xcept as provided in this Act, every order, award, direction, decision, declaration or ruling of the Board, an arbitration tribunal or an adjudicator is final and shall not be questioned or reviewed in any court”.[27] The Industrial Relations Act also contains a strict privative clause.[28] Legislated attempts to limit the scope of curial review are not rare.
So if these clauses, contained in several pieces of governing legislation, are now unconstitutional, why wouldn’t the day-to-day for administrative decisionmakers change? The reason is because the Court has ported an old statement of the law into the modern language of administrative law, rather than caused a huge shift.
The Supreme Court noted that under the so-called ancien régime of administrative law, courts used the concept of a jurisdictional error to override privative clauses. A “jurisdictional error” in those times referred to any instance “where an administrative body exceeded its legislative authority—by, for instance, erring in law, making an unreasonable finding of fact, or breaching the laws of natural justice”.[29] In Democracy Watch, the Supreme Court observed that it had long held that such errors “could not be shielded from review by any privative clause”.[30]
What the Court has done is simply to recognize that in the present era, where “issues of jurisdiction” generally has a narrower meaning,[31] the old understanding of a “jurisdictional error” is better captured by the term “legality review”. And just as the legislatures in the past could not oust the old jurisdictional review, they cannot now oust the minimum legality review on any type of issue—fact, law, or otherwise.
This is a small step, not a great leap. As the Court said, in the Vavilov era privative clauses have been viewed as integrated parts of statutory schemes that can inform the breadth of administrative discretion, but which are already “irrelevant to the scope of the courts’ supervisory jurisdiction”.[32]
There are surely lessons to be learned from Democracy Watch. For legislators, there is much to glean about how best to shield carefully crafted regimes from delay-causing litigation. For litigators, there might be novel opportunities to challenge certain statutes.
But for tribunals and decisionmakers? It has always been the case that “there is no such thing as absolute and untrammelled ‘discretion’”.[33] Courts have for a long time expected decisionmakers to “develop and strengthen a culture of justification” and “demonstrate that their exercise of delegated public power can be ‘justified to citizens in terms of rationality and fairness’”.[34]
It is not as though before Democracy Watch courts would let decisionmakers act illegally, privative clause or not.
So in other words, as long as tribunals and decisionmakers already understand the boundaries of their statutory power, examine the facts that come before them in good faith and with due care, and write decisions that are transparent, intelligible, and justified, then all they need to do is carry on.
[1]Democracy Watch v Canada (Attorney General), 2026 SCC 28 [Democracy Watch].
[3] Catharine Tunney, “Trudeau cleared in WE Charity scandal but former finance minister broke conflict law, says ethics watchdog” (May 13, 2021), online (website): https://www.cbc.ca/news/politics/we-charity-ethics-report-trudeau-morneau-1.6024982.
[4] Under paragraph 28(1)(b.1) of the Federal Courts Act, RSC 1985, c F-7, judicial reviews of the Commissioner’s decisions go directly to the Federal Court of Appeal.
[5]Democracy Watch v. Canada (Attorney General), 2024 FCA 158at para. 5 [Democracy Watch FCA].
[7]Democracy Watch FCA, supra note 5at paras. 79-92.
[8]Ibid at paras. 28-78.
[9]Ibid at paras. 94-96.
[10]Democracy Watch, supra note 1 at para. 29.
[11]Ibid at para. 31.
[12]Ibid at para. 36.
[13]Ibid at para. 41.
[14]Ibid.
[15]Ibid at para. 67.
[16]Ibid.
[17]Ibid, and see also Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 [Vavilov], and before that, Dunsmuir v New Brunswick, 2008 SCC 9 as examples of changes to the standard of review.
[18]Democracy Watch, supra note 1 at para. 75, citing Vavilov, supra note 16at para. 35.
[19]Democracy Watch, supra note 1at para. 70.
[20]Ibid at para. 74.
[21]Ibidat para. 79.
[22]Ibid.
[27]Public Service Labour Relations Act, RSNB 1973, c P-25, s. 101(1).
[28]Industrial Relations Act, RSNB 1973, c I-4, s. 131(2).
[29]Democracy Watch, supra note 1 at para. 46, citing: Anisminic Ltd v Foreign Compensation Commission, [1969] 2 AC 147 at p. 171; and Executors of the Woodward Estate v Minister of Finance, 1972 CanLII 139, [1973] SCR 120 at pp. 127-28.
[30]Democracy Watch, supra note 1 at para 60, citing: Canada (Attorney General) v Best Buy Canada Ltd, 2021 FCA 161at paras. 78-86 (per Gleason J.A.); CUPE v NB Liquor Corporation, 1979 CanLII 23, [1979] 2 SCR 227 at pp. 236-237; Crevier v AG (Québec) et al, 1981 CanLII 30, [1981] 2 SCR 220 at pp. 237-238; Blanchard v Control Data Canada Ltd, 1984 CanLII 27, [1984] 2 SCR 476 at pp. 480-481; and Toronto (City) Board of Education v OSSTF, District 15, 1997 CanLII 378, [1997] 1 SCR 487at paras. 47-48.
[31] Such as the issue of which tribunal can rightfully hear an issue, as in Northern Regional Health Authority v Horrocks, 2021 SCC 42.
[32]Democracy Watch, supra note 1 at para. 62, citing Vavilov, supra note 16, at paras. 99, 108-110.
[33]Roncarelli v Duplessis, 1959 CanLII 50, [1959] SCR 121at p. 140.
[34]Vavilov, supra note 16 at paras. 2, 14.