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A recent case of the supreme court of canada, auer v auer, 2024 scc 36 [auer], 1 has changed the standard of review applicable to challenges of the vires, or jurisdiction, of regulations. Although the process set forth in sections 81 to 91 of the act is constitutional, the balance of the scheme is ultra vires parliament and thus unconstitutional. In a decision called katz group canada inc

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Ontario, 2013 scc 64, a unanimous supreme court held that subordinate legislation is only ultra vires if they are “irrelevant,” “extraneous” or “completely unrelated” to their enabling statute. Applying katz group, the majority reasoned that regulations promulgated through legislative function could only be ultra vires if “irrelevant”, “extraneous” or “completely unrelated” to the purpose of the enabling statute. In conducting a vires review, a court does not undertake a de novo analysis to determine the correct interpretation of the enabling statute and then ask whether, on that interpretation, the delegate had the authority to enact the subordinate legislation.

The supreme court of canada denied the appellant’s appeal and clarified the analytical framework for challenging regulations

The court concluded that the reasonableness standard as set out in vavilov presumptively applied when reviewing the vires of subordinate legislation. 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. 24, the supreme court of canada held that a “successful challenge to the vires of regulations requires that they be shown to be inconsistent with the objective of the enabling statute or the scope of the statutory mandate”. When reviewing the validity of subordinate legislation, the main question is whether it is authorized by the enabling statute or whether it is ultra vires (i.e., not authorized).

The alberta court of appeal, upholding katz, had applied the “irrelevant”, “extraneous”, or “completely unrelated” standard of review, rather than simple reasonableness, and found the guidelines to be intra vires.