Reasonableness Review in Action: Canada (Attorney General) v. Igloo Vikski Inc., 2016 SCC 38

An interesting aspect of the Supreme Court of Canada’s recent decision in Canada (Attorney General) v. Igloo Vikski Inc., 2016 SCC 38 is the application of reasonableness review.

The question was whether certain items of hockey equipment used by goalkeepers are a “glove, mitten or mitt” or an “article of plastics”, an important question because different tariffs apply to the importation of the items depending on how they are classified.

The Canadian International Trade Tribunal classified the items as a “glove, mitten or mitt”. The Federal Court of Appeal took the opposite view but, by majority, the Supreme Court affirmed the decision of the Tribunal.

There is a useful discussion of the sui generis nature of the Tribunal’s task of tariff interpretation in the majority reasons of Brown J. (see paras. 19-29). Given the technical nature of the classification task, the standard of review (all agreed) was reasonableness. The question was whether the Tribunal had done a reasonable job in the circumstances.

In Brown J.’s view, the Tribunal had come to a reasonable conclusion following a three-step reasoning process:

1.      The CITT considered whether the gloves fell within either heading 62.16 (as “[g]loves, mittens and mitts”) or heading 39.26 (as “articles of plastics”), and it found that they met the description of heading 62.16.

2.      The CITT recognized that the Explanatory Note directed it to Rule 2(b) because of the presence of plastics in the gloves constituting more than mere trimming.

3.      In considering whether the goods met the description of heading 39.26 as articles of plastics, the CITT concluded — having reference to the Explanatory Note to heading 39.26 — that only items of clothing or accessories which were made by sewing or sealing sheets of plastic together could be classified under heading 39.26.  As the gloves could not meet the description in the heading, so understood, there was therefore no basis for applying Rule 2(b) to extend that heading (at para. 43).

Brown J. clearly took the view that the Tribunal’s decision was reasonable. It would be unfair, though, to describe Brown J.’s approach as what Professor Mullan has described as “disguised correctness review” (a useful term that I have employed myself from time to time).

Brown J. did not engage in his own independent analysis of the statutory scheme, thereby setting up a benchmark such that “any departure from the reviewing court’s hypothetical decision is bound to appear unreasonable” (Ottawa Police Services v. Diafwila, 2016 ONCA 627, at para. 66).

Rather, he addressed what the heading to section D of his reasons describes as the “alleged errors” committed by the Tribunal. In his view, none of them really amounted to an error (or, as the Federal Court of Appeal occasionally puts it, a badge of unreasonableness, or as I have occasionally put it, an indicium of unreasonableness). As often happens in reasonableness review cases, several errors/badges/indicia were fired in but the judge was able to block them.

By contrast, Coté J. took a different view. Although she accepted that the standard of review was reasonableness, the range of reasonable outcomes was “narrow”, primarily because the Canadian tariff system is designed to give effect to an international agreement on tariff harmonization (at para. 58).

Quite correctly, Coté J. explained that it is insufficient to describe the size of the range of reasonable outcomes and simply conclude that the impugned decision is inside or outside it. Here, the interpretation fell outside the range “because…it contradicts the cascading nature of the General Rules, it is internally contradictory, and it interprets the Explanatory Notes in a manner that is irreconcilable with their words” (at para. 63, my emphasis). That is, the Tribunal’s decision was tainted by several badges of unreasonableness.

Given my lack of substantive expertise in tariff classification (not to mention ice hockey equipment), I am reluctant to pick sides. Coté J.’s dissent would perhaps have been more powerful had she engaged more extensively with the reasons given by the Tribunal. For instance, the Tribunal’s interpretation of the Explanatory Notes was held by Coté J. to be unreasonable because it “was contrary to both an ordinary and contextual reading of the Explanatory Note” (at para. 74). But the divergence between a judge’s preferred reading of a provision and the interpretation given to it by an administrative decision-maker is (at best) a badge of unreasonableness; Coté J. could have gone further and explained why the Tribunal’s defence of its interpretation (briefly stated at para. 69) was inadequate.

In general, however, it seems to me that this decision is an example of the Supreme Court of Canada taking the analytical structure of reasonableness review seriously, which is to be commended.

This content has been updated on October 5, 2016 at 20:46.