The Constitutionality of Henry VIII Clauses in Canada: Administrative Law Matter (No. 1) in the References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11

Last month, the Supreme Court of Canada issued its decision in the References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11. I am going to post three pieces on the decision: this one, on constitutional limits on delegation in Canada; a second on review of regulations made under the Act, especially Part 2 of the Act; and a third on the distinction between a regulatory charge and a tax for the purposes of Canadian public law.

The conventional view is that Canadian legislatures can delegate plenary powers. That is, legislatures are free to empower ministers and other bodies as amply as they desire to achieve their policy objectives.

There are some constitutional limits on delegation. First, legislatures may not “abdicate” their powers, but it is questionable whether this is a meaningful limit, as it is impossible for legislatures to give up their powers. Second, legislatures may not alter the distribution of legislative competence in ss. 91-92 of the Constitution Act, 1867, but the scope of this limit is not particularly extensive: the rule against inter-delegation is breached only by a transfer of law-making authority from one level of government to another so as to effect, in essence, a constitutional amendment (Attorney General of Nova Scotia v. Attorney General of Canada, [1951] SCR 31; and see also the obiter in Re The Initiative and Referendum Act, [1919] AC 935). By contrast, delegating administrative authority to another level of government is perfectly permissible (P.E.I. Potato Marketing Board v. Willis, [1952] 2 SCR 392. Cf Mark Mancini.). Third, legislatures may not delegate a power to impose taxation (Eurig Estate (Re), [1998] 2 SCR 565: see here).

Within these modest limits, legislatures are free to structure the delegation of regulation-making and discretion as they see fit. As long as Parliament and the provincial legislatures act within the powers accorded to them by ss. 91-92 of the Constitution Act, 1867, they have legislative authority as ample as that of the Westminster Parliament. The line of jurisprudence to the effect is unbroken, running from early Privy Council decisions in the 19th century to, most recently, the Supreme Court of Canada’s 2018 decision in the second Securities Reference.

It remains unbroken after the GGPPA Reference. Two parts of the GGPPA were considered: Part 1, which sets out a fuel charge and Part 2, which relates to industrial emissions. There are significant regulation-making powers in Part 1 (ss. 166(2), 166(4) and 168(4)) and Part 2 (s. 192), exercisable by the federal cabinet. Section 168(4) provides, for example:

If a regulation made under this Part in respect of the fuel charge system states that it applies despite any provision of this Part, in the event of a conflict between the regulation and this Part, the regulation prevails to the extent of the conflict.

For the majority, Wagner CJ drew on the unbroken line of delegation jurisprudence to note that the Supreme Court “has consistently held that delegation such as the one at issue in this case is constitutional” and that courts of appeal have “consistently applied” this expansive understanding of legislatures’ authority to delegate (at para. 85). He concluded:

In the case at bar, Parliament, far from abdicating its legislative role, has in the GGPPA instituted a policy for combatting climate change by establishing minimum national standards of GHG price stringency. Sections 166(2), 166(4), 168(4) and 192 of the GGPPA simply delegate to the executive a power to implement this policy. This delegation of power is within constitutionally acceptable limits and the general rules of administrative law apply to constrain the Governor in Council’s discretion under all of these provisions (at para. 88).

However, the powerful partial dissent of Côté J indicates that the debate about the limits of delegation in Canada is far from over and, indeed, is likely to inspire litigation testing the existing limits and proposing new ones. Her dissent turns on Brown J’s characterization of the GGPPA in his dissent. As she explains it, “rather than establishing minimum national standards, Part 2 of the Act empowers the executive to establish variable and inconsistent standards on an industry-by-industry basis”, raising the possibility that “the executive could decide to impose such strict limits on the fossil fuel or potash industries, both heavy emitters of GHG emissions, that the industries would be decimated” (at para. 238).

She took particular aim at the Henry VIII clauses in the regulation-making provisions, which provide that regulations may modify provisions in the GGPPA. As is well-known, Henry VIII clauses allow ministers to modify legislation made by Parliament, by regulations, without going through the ordinary law-making process.

In Côté J’s view, the Canadian position in relation to Henry VIII clauses is unsettled. Of the leading authority, Re George Edwin Gray (1918), 57 SCR 150, she wrote:

First, the comments of the majority justices in Re Gray, particularly with respect to the unlimited powers of the Governor in Council, demonstrate that their findings are not in accord with our contemporary understandings of core constitutional principles. The justices in Re Gray were clearly moved by the great emergency of war. In the case before us, Parliament did not pass the impugned legislation under the emergency branch. Second, Re Gray is distinguishable from the present case in that all three of the bodies charged under ss. 17 and 91 with the exclusive authority to make legislation agreed with the Order in Council. Although not passed as an Act of Parliament, the joint resolution of the Senate and House of Commons along with the Order in Council may adequately meet the demands of ss. 17 and 91 in the urgent situation of war. There was no consent of the House of Commons or Senate to the regulations promulgated by the Governor in Council under the GGPPA. Third, this reading is inconsistent with our most recent pronouncement on delegation of law-making powers (at para. 258)

Emergency or not, however, Re Gray states a proposition on which Canadian legislatures (and lower courts) have consistently relied. My research assistant and I are compiling a list of extant Henry VIII clauses in Canadian statutes: we are at four pages and counting. Moreover, the fundamental proposition that within their areas of legislative competence Canadian legislatures enjoy powers as ample as the Westminster Parliament remains undoubted — and given that there is no doubt in the United Kingdom that Parliament may enact Henry VIII clauses (whether it should or not being a different question, for political judgment rather than for legal sanction), it is difficult to see why the Canadian position should be any different. And as I noted above, the case law limiting inter-delegation relates only to the distribution of powers as between Parliament and the provincial legislatures, not to the scope of the authority a Canadian legislature may delegate; whatever a Henry VIII clause does, it does not amend the distribution of powers in ss. 91-92 (pace Brown J at para. 414). Lastly, resolutions passed by legislative assemblies do not have the force of law — and, in any event, the House of Commons and Senate could pass resolutions in relation to regulations made under the GGPPA just as they did prior to Re Gray.

Be that as it may, settled law must sometimes yield to constitutional first principles. In this regard, Côté J has offered a rich account of why Henry VIII clauses might be unconstitutional in Canada — not just, as is almost universally thought, constitutionally objectionable and open to criticism in political forums. Although I agree that Henry VIII clauses are “constitutionally exceptionable“, I am ultimately unpersuaded that they are unconstitutional. Nonetheless, it is clear that future Canadian debates on the topic of Henry VIII clauses will take Côté J’s thoughtful contribution as their starting point.

To begin with, Côté J notes that s. 17 of the Constitution Act, 1867 provides that there is to be one Parliament of Canada, composed of the Queen, the Senate and the House of Commons and that s. 91 provides that the “exclusive” authority of Parliament so composed extends to the matters coming within the classes of subjects set out in s. 91. From this, she concludes that “every exercise of legislative power — every enactment, amendment and repeal of a statute — must have the consent of all three elements of Parliament” (at para. 247).

It is not clear, however, that this conclusion follows from the premises upon which it rests: textually, the fact that Parliament’s “exclusive” authority extends to everything covered by s. 91 does not necessarily mean that legislative power is exercisable exclusively by Parliament (by contrast, say, to the Irish constitution); structurally, limiting Parliament’s capacity to delegate, but not that of the provincial legislatures (for there is no provincial equivalent of s. 17), would introduce an asymmetry into the distribution of powers; and there is the structural and historical objection that Parliament’s powers within its areas of competence are as wide as those of the Westminster Parliament. Indeed, Côté J’s textual argument depends on characterizing the exercise of a power conferred by a Henry VIII clause as a legislative act — it is certainly arguable that a Henry VIII clause is legislative in nature but it is equally arguable that the power is not legislative, because (unlike primary law-making authority) the scope of any Henry VIII clause is limited by reference to the statutory objects which it was created to achieve.

Côté J supported her textual argument by reference to constitutional principles. First, parliamentary sovereignty, which has a positive aspect — allowing Parliament to make or unmake any law whatsoever — but also a negative aspect: “no institution is competent to override the requirements of an Act of Parliament” (at para. 265). Henry VIII clauses “run afoul of” this negative aspect (at para. 266). The difficulty with this line of reasoning, however, is that a Henry VIII clause specifically makes ministers “competent” to modify legislation. It is true, as Côté J observes, that “logic limits Parliament from achieving two contradictory purposes simultaneously” (at para. 268) (here, limiting the federal cabinet on the one hand but providing it with law-making power on the other hand), but the solution in such situations, as with privative clauses, is to rely on judicial interpretation to make as much sense of the contradictions as possible.

Second, the rule of law, which is violated by law-making which does not go through the ordinary legislative process (at para. 272), undermined by modifications to statutes which are found in the Canada Gazette rather than in the statute book (at para. 273), and imperilled by the arbitrary power created by Henry VIII clauses (at para. 274). These are certainly good reasons not to enact Henry VIII clauses and equally good reasons to interpret them narrowly. For Côté J, that meaningful judicial oversight of the exercise of Henry VIII clauses is impossible leads to the conclusion that they are unconstitutional (at paras. 276-278). But if judicial oversight is possible, as I will discuss below and in the next post in this series, much of the force of Côté J’s rule of law point dissipates.

Third, the separation of powers “demands that the core function of enacting, amending and repealing statutes be protected from the executive and remain exclusive to the legislature” (at para. 290). There is, for Côté J, a meaningful separation of powers in the Canadian Constitution (at paras. 281-284) and a suite of doctrines preventing intrusion on executive, judicial and legislative functions (at paras. 285-289) (two points with which I wholeheartedly agree). The difference, however, between these doctrines and her proposed new doctrine, is that doctrines such as parliamentary privilege and non-justiciability of the prerogative prohibit unwanted interference by the judicial branch in the affairs of the legislative or executive branch respectively (albeit that the borders of the latter doctrine have receded significantly in recent decades) whereas her proposed new doctrine would prohibit interference which has already been expressly invited by the legislative branch. Parliamentary privilege keeps the judicial fox out of the legislative henhouse. But if Parliament is foolish enough to invite the fox in, it is questionable whether the courts should revoke the invitation.

So, I am ultimately unpersuaded. Part of the force of Côté J’s argument, though, is that it has a laser-like focus on Henry VIII clauses. She therefore avoids some of the problems with more ambitious efforts to reform the Canadian approach to delegation.

Alyn James Johnson, for example, has suggested a test in the following terms in his article “The Case for a Canadian Nondelegation Doctrine“:

It is necessary to adopt the perspective of the citizen author/addressee of an exercise of executive law-making. On a nondelegation challenge, the question is whether an underlying policy conflict has been meaningfully resolved such that a citizen, affected or coerced by an executive measure, can be said to recognize and understand the measure and thereby take responsibility as its implied author. A reviewing court will in effect look to see if the enabling provision is thick—that is, if it contains sufficient information to anticipate and control the substance of the resulting executive action. Logical and predictable executive action is consistent with the rule of law, and completes the circular process of legitimate democratic self-government. Legislatures have a responsibility to draft enabling provisions that have content, and not simply pass on difficult conflicts in undigested form to executive decision-makers. Courts have a responsibility to ensure that the requisite content is present ((2019) 52 UBCLR 817, at p. 888).

Johnson’s article is a fine piece of scholarly writing (and justly provides the jumping-off point for Côté J: at para. 237). His account of how broad delegations are difficult to reconcile with the unwritten principles of the Canadian Constitution is compelling. In the context of s. 1 of the Charter, I have argued for a more robust application of a foreseeability requirement, urging that where Charter rights are threatened by discretionary decisions the holders of discretionary powers should be obliged to adopt mechanisms to check, structure and confine their discretion. It is one thing, however, to adopt such a requirement in the Charter context, where it is triggered only by breach of a Charter right. It is quite another to adopt a muscular, across-the-board approach to judicial policing of legislative delegation.

Here, the experience from other common-law jurisdictions with nondelegation doctrines is illuminating. In both Ireland and the United States the courts have had great difficulty in developing a meaningful test for the application of the non-delegation doctrine. In the United States, these difficulties have led to, in essence, a refusal to apply the doctrine at all to invalidate legislation — the nondelegation doctrine has, as Cass Sunstein’s quip has it, had one good year and 200-odd bad ones. In Ireland, the courts have not given up on the non-delegation doctrine but have been roundly criticized for their inability to apply the test consistently – and judicial arbitrariness is nothing to cheer about.

Hence the attractiveness of second-order solutions. The Americans have taken to interpreting broadly-drawn delegations of power as narrowly as they can. Justice Côté arguably deployed this strategy, incidentally, in her dissent in West Fraser Mills Ltd. v. British Columbia (Workers’ Compensation Appeal Tribunal), 2018 SCC 22, [2018] 1 SCR 635 (see especially at para. 87). In her dissent, Justice Côté cited a classic article by Professor David Mullan, which also emphasizes second-order solutions to the violence to constitutional principles wrought by broad delegations:

I would also urge the Court to rethink its eschewing of any capacity to probe the motives of multi-member bodies charged with the exercise of broadly-based or open-ended discretions and those conferred on the Governor General and Lieutenant Governors in Council in particular… As well as reflecting the principle of justification, the more vigilant policing of the purposes for which the executive acts also has the merit of also attempting to preserve some integrity for parliamentary processes. In this domain,I would also look for clarification of the Canadian position on justiciability and political questions as threshold concepts in the calling of the executive branch to account. As well, I would take up the suggestion of Archie Campbell J. and, by reference to a new or resurgent anti-delegation principle, condemn the use of Henry VIII clauses and, indeed, in at least some circumstances,the conferral of unstructured, broad discretions unless accompanied by an obligation to engage in broadly-based notice and comment procedures in the development of policy under the terms of such delegations (“The Role of the Judiciary in the Review of Administrative Policy Decisions: Issues of Legality”, in M. J. Mossman and G. Otis, eds., The Judiciary as Third Branch of Government: Manifestations and Challenges to Legitimacy (1999), 313,at pp. 377-378).

Viewed in this light, Côté J’s proposed reform is precisely targeted, narrowly tailored to root out the specific evil of Henry VIII clauses. Get ready for more debate and discussion of this issue. Whether one agrees with Côté J or takes the view (as I tend to) that the best remedies for this evil are political in nature, the debate and discussion are worth having.

This content has been updated on April 22, 2021 at 19:14.