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Delegated Legislation - Ultra Vires (2). Doxy.Me Inc. v. Ontario Health et al.
In Doxy.Me Inc. v. Ontario Health et al. (Ont Div Ct, 2026) the Ontario Divisional Court dismissed a JR, this brought against "Ontario Health’s refusal to verify that its video service complies with required standards. The result of Ontario Health’s decisions is that Doxy’s physician clients are not entitled to receive payment from the Ontario Health Insurance Plan (“OHIP”) for any services rendered through its videoconferencing platform."
Here the court considers whether privacy standards adopted for use in OHIP-approved medical videoconferencing were ultra vires the Connecting Care Act, 2019:ISSUE #3: IS THE DATA RESIDENCY REQUIREMENT IN THE VVV STANDARD ADOPTED BY ONTARIO HEALTH ULTRA VIRES?
[43] As noted earlier, in 2020, Ontario Health adopted the VVV Standard. This policy contains a data residency requirement, found in section 2.3.14 of the VVV Standard. In order to be verified by Ontario Health as a virtual visit solution it is required to demonstrate that “… all personal health information as defined in PHIPA is held by systems located in Canada”.
Is the Data Residency Requirement Consistent with the Objectives of the CCA?
[44] Doxy submits that the Data Residency Requirement of the VVV Standard bears no connection to the statutory objectives of the Connecting Care Act, 2019, S.O. 2019, c. 5, Sched.1 (the “CCA”). Doxy submits that this requirement is based on the assumption that the patient data located in Canada is more secure than data located in the United States. Given that the U.S. law provides for robust protection for personal health information, as a matter of technical security, data hosted in the United States is at least as secure as data hosted in Canada.
[45] I disagree that the Data Residency Requirement bears no connection to the objective of the CCA.. The preamble to the CCA expresses the Legislature’s intention to create a single provincial agency (now called Ontario Health) that would oversee the development of a “digitally-enabled, publicly funded health care system” that would “put each patient at the centre of a connected care system anchored in the community”.
[46] The objectives of Ontario Health include:3. Developing or adopting standards respecting digital health products and digital health services and the suppliers of such products and services.
4. Certifying products, services and suppliers in accordance with the standards developed or adopted pursuant to paragraph 3: See Ontario Regulation 376/19, s. 1(1). [47] Given the provisions described above, the data residency requirement found in the VVV Standard is consistent with the CCA and its objects and is specifically supported by the intention that the community care system be “anchored in the community”.
Is the Data Residency Requirement Arbitrary or Does It Conflict with the Broader Legislative Context?
[48] Doxy further submits that the Data Residency Requirement conflicts with the broader legislative context in that the PHIPA imposes extensive obligations on the custodians of personal health information but does not impose a data residency requirement that prohibits the storage of personal health information outside of Ontario. Doxy submits that this leads to absurd consequences as highly sensitive personal health information, such as patient diagnostics, treatment plans, and clinical photos, may be stored on servers in the U.S.A., however the Data Residency Requirement under the VVV Standard applies to far less sensitive information retained by virtual care solutions such as call metadata. As a result, less sensitive data is subject to greater restrictions under the VVV Standard than higher sensitive data under the PHIPA.
[49] Doxy further submits that there is no rational basis for the Data Residency Requirement found in the VVV Standard and Regulation 552 on the grounds that the Data Residency Requirement is not logically connected to the protection of personal health information. In this respect, Doxy relies on Dr. Cavoukian’s opinion that identified three rationales for the Data Residency Requirement were misplaced. She stated that these rationales were: 1) a concern that foreign jurisdictions will lack adequate privacy protections; 2) a concern over foreign government surveillance; and 3) a concern that enforcement of Canadian privacy laws would be more difficult for data held outside of Canada.
[50] As stated in Auer, at para. 33:... a vires review does not involve assessing the policy merits of the subordinate legislation to determine whether it is “necessary, wise, or effective in practice”. [51] The grounds advanced by Doxy challenge the necessity, wisdom and effectiveness of the Data Residency Requirement. I agree with the respondents’ view that the PHIPA does not limit Ontario Health’s authority to impose the Data Residency Requirement in the VVV Standard. Although PHIPA is aimed at protecting privacy, the protection of personal health information does not need to be uniform in different contexts. The VVV Standard was specifically designed in part to protect privacy and security. While the VVV Standard may impose stricter standards than PHIPA, it was open to Ontario Health to adopt a VVV Standard that imposes more stringent requirements on the storage of personal health information gathered on a virtual visit than for other visits with a physician. The policy merits of its doing so are not open to challenge. . Thibault and Ramsay v. Attorney General of Ontario [JR SOR]
In Thibault and Ramsay v. Attorney General of Ontario (Ont Divisional Ct, 2025) the Divisional Court dismissed a JR, this challenging part of an Ontario regulation [Towing and Storage Safety and Enforcement Act, 2021 (TSSEA, 2021), Reg. 167/23] on charter and ultra vires grounds. The regulation provision [Reg. 167/23, s.2(d)(i)] challenged disqualified a person from holding a "tow certificate, tow driver certificate or vehicle storage certificate" if "the person is subject to a court order, conditions of parole or an undertaking to a peace officer prohibiting him or her from, ... possessing a weapon".
Here the court concisely summarizes the JR SOR for challenges to subordinate legislation, and 'reasonableness' factors involved therein:[37] The standard of review that applies to the ultra vires issue is as set out by the Supreme Court of Canada in Auer v. Auer, 2024 SCC 36, 497 D.L.R. (4th) 381, applying Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653. As set out in Auer, at para. 27, Vavilov’s robust reasonableness standard is the default standard when reviewing the vires of subordinate legislation.
[38] “In conducting a reasonableness review, ‘the reviewing court asks whether the decision bears the hallmarks of reasonableness — justification, transparency and intelligibility — and whether it is justified in relation to the relevant factual and legal constraints that bear on the decision’ (Vavilov, at para. 99)”: Auer, at para. 50.
[39] In Auer, the Supreme Court also clarified the role of its prior decision in Katz Group Canada Inc. v. Ontario (Health and Long‑Term Care), 2013 SCC 64, [2013] 3 S.C.R. 810, about the review of subordinate legislation.
[40] All of the following principles from Katz Group continue to apply, and form part of the reasonableness analysis: Auer, at paras. 3, 29-32, 38:(1) subordinate legislation must be consistent both with specific provisions of the enabling statute and with its overriding purpose or object;
(2) the challenged subordinate legislation and the enabling statute should be interpreted using a broad and purposive approach to statutory interpretation;
(3) subordinate legislation benefits from a presumption of validity;
(4) the burden is on the party challenging the subordinate legislation to show that it is not reasonably within the scope of the delegate’s authority; and,
(5) a vires review does not involve assessing the policy merits of the subordinate legislation to determine whether it is necessary, wise, or effective in practice – it is not an inquiry into the underlying political, economic, social or partisan considerations. [41] “Reviewing the vires of subordinate legislation is fundamentally an exercise of statutory interpretation to ensure that the delegate has acted within the scope of their lawful authority under the enabling statute”: Auer, at para. 59. . New Sunlight Inc. v. Ontario (Minister of Infrastructure) [arbitrariness]
In New Sunlight Inc. v. Ontario (Minister of Infrastructure) (Ont Divisional Ct, 2025) the Divisional Court dismissed a JR "seeking to set aside two pieces of subordinate legislation issued by the Lieutenant Governor in Council", here respecting a Toronto transit expropriation and a designation under the Transit-Oriented Communities Act, 2020.
Here the court considers the applicant's argument that the OICs were 'arbitrary', and thus ultra vires:[54] New Sunlight’s argument that the First OIC was arbitrary because it was based on incomplete or inaccurate information falls outside of the scope of review provided for in Auer. As put by the Supreme Court in Auer:[57] A court must be mindful of its proper role when reviewing the vires of subordinate legislation, especially when it relies on the record, other sources or the context to ascertain the delegate’s reasoning process. Mancini[9] explains:Importantly courts must organize these various sources properly to preserve the focus on the limiting statutory language. Again, the reasonableness review should not focus on the content of the inputs into the process or the policy merits of those inputs. Rather, courts must key these sources to the analysis of whether the subordinate instrument is consistent with the enabling statute’s text, context, and purpose. For example, Regulatory Impact Analysis Statements can inform a court as to the link between an enabling statute’s purpose and a regulatory aim, much like Hansard evidence. These analyses can help show how the effects of a regulation which, at first blush appear unreasonable, are enabled by the primary legislation. [p. 279] [58] The potential or actual consequences of the subordinate legislation are relevant only insofar as a reviewing court must determine whether the statutory delegate was reasonably authorized to enact subordinate legislation that would have such consequences. Whether those consequences are in themselves necessary, desirable or wise is not the appropriate inquiry.
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[59] In Vavilov, our Court explained that “[e]lements of the legal and factual contexts of a decision operate as constraints on the decision maker in the exercise of its delegated powers” (para. 105). Reviewing the vires of subordinate legislation is fundamentally an exercise of statutory interpretation to ensure that the delegate has acted within the scope of their lawful authority under the enabling statute (para. 108; Mancini, at pp. 274‑75; see, e.g., West Fraser Mills, at para. 23). [55] The relevant question under Auer is not whether the first OIC was reasonable or justified by the record, but whether Cabinet reasonably acted within the legislative constraints of its enabling statute in forming the opinion that designating New Sunlight’s land as TOC land is or may be required to support a TOC project as defined in s. 1 of TOCA. . New Sunlight Inc. v. Ontario (Minister of Infrastructure)
In New Sunlight Inc. v. Ontario (Minister of Infrastructure) (Ont Divisional Ct, 2025) the Divisional Court dismissed a JR "seeking to set aside two pieces of subordinate legislation issued by the Lieutenant Governor in Council", here respecting a Toronto transit expropriation and a designation under the Transit-Oriented Communities Act, 2020.
The court considers the quashing of subordinate legislation for being ultra vires (and otherwise), here Ontario cabinet Orders-in-Council (OICs):[5] New Sunlight seeks orders quashing the OICs on the grounds that they are unreasonable, made arbitrarily on the basis of incomplete, inaccurate and misleading information, and made in bad faith. It submits that the First OIC was not necessary and was not justifiable. Ontario submits that both OICs are consistent with the purposes of their enabling statutes, intra vires and reasonable. Therefore, Ontario requests that the application be dismissed.
[6] The Supreme Court of Canada has recently confirmed in Auer v. Auer, 2024 SCC 36 (“Auer”) that reasonableness review of subordinate legislation requires focusing on “whether the [subordinate legislation is] justifiably (or reasonably) within the scope of the authority delegated by the enabling legislation”: at para. 54. It is not a review of the policy merits of the subordinate legislation, nor does it assess the reasonableness of the rules (here the OICs) promulgated: Auer, at paras. 55-58. Subordinate legislation can also be set aside if it was enacted for an impermissible reason, such as an improper motive: Auer, at para. 54.
[7] I have found that the OICs are justifiably (or reasonably) within the scope of the authority delegated by the enabling legislation and consistent with the legislation’s overriding purpose or object, pursuant to the test set out in Auer at paras. 33 and 54. For the reasons set out below, I would dismiss the application.
Legislative Framework
[8] This application engages three statutes: the Transit-Oriented Communities Act, 2020, S.O. 2020, c.18, Sch. 20 (“TOCA”), the Ministry of Infrastructure Act, 2011, S.O. 2011, c. 9, Sch. 27 (“MIA”) and the Expropriations Act, R.S.O., 1990, c. E.26 (“EA”).
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Standard of Review
[44] The Supreme Court of Canada recently confirmed in Auer that subordinate legislation such as an order in council is presumptively reviewable on the reasonableness standard pursuant to the framework set out in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65.
[45] However, the Court also instructed that the following principles set out in Katz Group Canada Inc. v. Ontario, 2013 SCC 64 continue to inform the reasonableness analysis:1.Subordinate legislation must be consistent both with specific provisions of the enabling statute and its overriding purpose;
2.Subordinate legislation benefits from a presumption of validity;
3.The challenged subordinate legislation and enabling statute should be interpreted using a broad and purposive approach to statutory interpretation;
4.A vires review does not involve assessing the policy merits of the subordinate legislation to determine whether it is necessary, wise, or effective.[2] [46] The Court also deviated from Katz Group in holding that subordinate legislation no longer needs to be “irrelevant”, “extraneous” or “completely unrelated” to its enabling statute in order to be found ultra vires. The Court found that this threshold was too deferential and inconsistent with Vavilov’s robust reasonableness review.[3] Instead, the reviewing court will consider whether the decision bears the hallmarks of reasonableness (justification, transparency, and intelligibility) and whether it is justified in relation to the relevant factual and legal constraints.
[47] The challenging party must show that the subordinate legislation is not reasonably within the scope of the authority delegated by the enabling legislation.[4] In applying this test, the governing statutory scheme, other statutory and common law, and principles of statutory interpretation establish the bounds of reasonableness.[5]
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Necessity is not part of the legal test
[66] I agree with Ontario that “necessity” is not a legal constraint on Cabinet’s discretion to designate land under s. 2 of TOCA. The legislature uses broad language to authorize designation of transit-oriented community land where it “is or may be required to support a transit-oriented community project” (emphasis added). Moreover, the Supreme Court stated in Auer that reasonableness review of subordinate legislation “does not involve assessing the policy merits of subordinate legislation to determine whether it is necessary, wise, or effective in practice.”[13]
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The First OIC is reasonable and intra vires
[68] New Sunlight argues that the First OIC is unreasonable because it is arbitrary, discriminatory, overbroad and based on incomplete and/or incorrect information.
[69] As the Supreme Court made clear in Auer, the issue is not whether the first OIC was reasonable in that it was justified by the record, but whether Cabinet reasonably acted within its legislated grant of authority under TOCA.[14]
[70] At para. 62 of Auer, the Court stated:[62] The language chosen by the legislature in an enabling statute describes the limits and contours of a delegate’s authority (Vavilov, at para. 110). The legislature may use precise and narrow language to delineate the power in detail, thereby tightly constraining the delegate’s authority. Alternatively, the legislature may use broad, open‑ended or highly qualitative language, thereby conferring broad authority on the delegate (ibid.; see also Keyes (2021), at pp. 195‑96). Statutory delegates must respect the legislature’s choice in this regard. They “must ultimately comply ‘with the rationale and purview’” of their enabling statutory scheme in accordance with its text, context and purpose (Vavilov, at para. 108, citing Catalyst Paper, at paras. 15 and 25‑28, and Green, at para. 44). [71] Here, the language of the enabling statute, s. 2 of TOCA, is broadly permissive and the issuance of the First OIC falls within its scope. The preservation of existing and future TOC Agreements, and the streamlining of a potential expropriation to ensure project deadlines can be met, “is or may be required to support” the various development projects intended at East Harbour. These development projects exist “in connection” with the East Harbour Transit Hub and therefore qualify as “transit-oriented community projects”. New Sunlight has not shown that the First OIC was not reasonably within the scope of authority delegated to Cabinet by s. 2 of TOCA.
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[85] Subordinate legislation benefits from a presumption of validity.[20] The burden is on the party challenging the subordinate legislation to show that it is not reasonably within the scope of the delegate’s authority.[21] I find no failure of rationality internal to the reasoning process nor are the OICs untenable in light of the factual and legal constraints that bear on them.[22] New Sunlight has not shown that either of the OICs are ultra vires. I would therefore dismiss the application. . New Sunlight Inc. v. Ontario (Minister of Infrastructure)
In New Sunlight Inc. v. Ontario (Minister of Infrastructure) (Ont Divisional Ct, 2025) the Divisional Court dismissed a JR "seeking to set aside two pieces of subordinate legislation [SS: Orders-in-Council] issued by the Lieutenant Governor in Council", here respecting a Toronto transit expropriation and a designation under the Transit-Oriented Communities Act, 2020.
Here the court considers the applicant's argument that the OICs were in 'bad faith', and thus ultra vires:Issue 2(a): Was the Second OIC made in bad faith?
[72] New Sunlight submits that Auer does not affect this Court’s ability to quash subordinate legislation made in bad faith. It argues that Ontario has acted in bad faith by threatening to expropriate the entirety of certain properties even though not all of the land is needed to support its projects. Ontario has continued to apply pressure even as they negotiate a potential TOC agreement and is abusing their power of expropriation.
[73] New Sunlight further submits these efforts have been part of Ontario’s broader bad faith strategy throughout this dispute, including its decision to wait two weeks after the Second OIC was signed before serving New Sunlight with a copy. New Sunlight also highlights that Ontario chose to do so in the midst of its legal challenge to the First OIC.
New Sunlight has failed to meet the heavy burden to establish bad faith
[74] Bad faith/improper purpose refers to “acts committed deliberately with intent to harm” as well as acts that are “so markedly inconsistent with the relevant legislative context that a court cannot reasonably conclude that they were performed in good faith.”[15] The party alleging bad faith bears the onus of proving it, and in doing so must meet a “heavy burden”.[16] Speculation and innuendo are not evidence capable of proving bad faith.[17]
[75] It is important not to conflate any adverse impact that may be faced or suffered by the claimant with “deliberate intent to harm”. As the Supreme Court has held, “In a democracy, public officers must retain the authority to make decisions that, where appropriate, are adverse to the interests of certain citizens.”[18]
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