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Delegated Legislation - Ultra Vires Regulations (5). Valero Energy Inc. v. Minister of the Environment
In Valero Energy Inc. v. Minister of the Environment (Div Ct, 2026) the Divisional Court dismissed a motion, here seeking "an order compelling the respondents to produce a record of proceedings or record of decision in this application for judicial review. The respondents have produced a record, which Valero submits is insufficient.".
The court considers ultra vires regulations issues, here in the context a motion to seek a 'better' JR record:[4] In its application for judicial review, Valero challenges O. Reg. 163/25, a regulation that amended O.Reg. 663/20 (Cleaner Transportation Fuels: Renewable Content Requirements for Gasoline and Diesel Fuels) to require that gasoline and diesel fuels include minimum percentages of bio-based content that is produced in Canada.
[5] Valero’s application asserts that this regulation is ultra vires the grant of provincial legislative authority conferred by s. 92 of the Constitution Act, 1867, and of no force and effect. The application further asserts that the regulation is ultra vires the regulation-making authority in the Environmental Protection Act, R.S.O. 1990, c. E.19 (EPA).
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[17] As set out in the notice of application, the primary challenge is to the impugned regulation, which was made by the Lieutenant Governor in Council. The applicant seeks to quash that regulation, a remedy available in this application for judicial review. The applicant submits that the imposition of domestic content requirements is ultra vires the province and otherwise wrongful.
[18] Beginning with the obligation on a respondent to produce a record of proceedings, which is provided for under s. 10 of the JRPA, it is statutorily defined and limited.[2]
[19] For good reason, The applicant does not seriously contend that the judicial review of the making of a regulation requires the provision of a record of proceedings under s. 10 the JRPA. The obligation to produce a record of proceeding applies only to the exercise or purported exercise of a “statutory power of decision”. As set out in s. 1(1), the power to make a regulation is a “statutory power” but it is not included in the narrower definition of a “statutory power of decision”. There is no obligation to produce a record of proceedings.
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[27] The applicant then submits that even though the JRPA does not impose an obligation to produce a record of proceedings, all the documents before Cabinet and the Minister should be produced to it in this case. The applicant relies on this Court’s inherent jurisdiction to control its process, citing cases such as CCSAGE Naturally Green v. Director, Sec. 47.5 EPA, 2018 ONSC 237.
[28] In CCSAGE, the respondent had also provided a record that the applicant found insufficient. There was also no obligation on the respondents to deliver a record of proceedings under the JRPA. The motion judge observed, at para. 68, that the panel hearing the application must still have sufficient information to allow it to make a decision, relying on r. 68. The motion judge noted, at para. 68, that depending on the circumstances of the decision at issue, the nature of the record may vary.
[29] In CCSAGE the requested production was denied. Even though the motion judge found that because of the nature of the decisions that were at issue, the respondents would be expected to assist in providing the necessary documentation, the motion judge held: “…I can say without hesitation that I cannot imagine a circumstance where the documentary productions requested … could be required. …The request for records amounts to a fishing expedition. Judicial review does not afford a party with a right to documentary discovery.”
[30] Further, the case before me is a challenge to a regulation. CCSAGE was not. Unlike the issues in CCSAGE, the express wording of the JRPA excludes challenges to a regulation from the obligation to produce a record.
[31] Further, the overarching issue – division of powers – is a legal issue that turns on s. 92 of Constitution Act, 1867 [SS: 'Exclusive Powers of Provincial Legislatures'] and the impugned regulation itself. The applicant focuses on its challenge to the regulation-making authority to make the impugned regulation under the EPA, submitting that it does support further production of documents. On this point, both sides rely on Auer v. Auer, 2024 SCC 36.
[32] In Auer v. Auer, the Supreme Court confirmed the limited nature and scope of judicial review of the vires of a regulation. The Court held, at para. 56, that it does not involve assessing the policy merits of the regulation. As set out at para. 59, judicial review of a regulation is “fundamentally an exercise of statutory interpretation.” The court must ask whether the subordinate legislation (here, O. Reg. 163/25) is consistent with the statutory purpose and with the scope of the delegated authority. This is a limited task.
[33] The applicant points to para. 53 of Auer, which refers to possible sources of information when conducting a reasonableness review in the absence of reasons for decision. The examples given in Auer are in the context of a municipal by-law, which is different from the regime here. In addition, those examples include documents that are analogous to the documents already included in the record provided by the respondents. As well, that record includes documents that give the rationale for the impugned regulation, which are arguably reasons for decision in the context of the making of a regulation.
[34] The applicant also relies on para. 54 of Auer, which observes that even where such other sources are unavailable, the record and context may reveal that a decision was made based on an improper motive. This was not an invitation to look behind the public record, quite the contrary. It is an observation that such a motive may be obvious.
[35] The applicant submits that an improper purpose could be revealed in the requested documents. A bald allegation of improper purpose, which could easily be included in every notice of application for judicial review, is not a basis for what would be a fishing expedition through Cabinet documents. Further, in that same paragraph of Auer, the Court goes on to emphasize that the reasonableness review is limited to whether the regulation is within the scope of the authority delegated by the enabling legislation.
[36] Similarly, the applicant submits that the rationale set out in the public documents regarding O. Reg. 163/25 is “self-serving”. A government’s rationale could often be described in that way, advancing reasons that support the government action. That does not call for this broad production request.
[37] The exercise of statutory interpretation mandated in Auer does not support this production request.
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[41] I have considered all the applicant’s submissions in support of this request that there be an extraordinary order for the broad production of internal documents in this case. In summary, the JRPA has delineated the obligation to produce a record of proceedings and excludes this challenge to a regulation. At its core, this application raises vires issues regarding the division of powers and regulation-making authority requiring statutory interpretation. I am not persuaded that the respondents’ record is inadequate to the task at hand such that the respondents should have added production obligations. Judicial review is intended to be a focused challenge to certain decisions, and ought not to be burdened down in what is essentially a discovery process.
[42] To the extent that there is inherent jurisdiction to control this Court’s process, it does not need to be exercised in this case. . Thibault and Ramsay v. Attorney General of Ontario
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 conducts it's ultra vires analysis of this particular regulation, couched in classic Vavilov 'reasonableness' principles:(1) Vires of the Regulation
[42] The applicants submit that s. 2(d)(i) of the Regulation has both types of fundamental flaws that are recognized in Vavilov as rendering a decision unreasonable, at para. 101. They submit that there is a failure of rationality internal to the reasoning process, and the impugned provision is untenable in light of the factual and legal constraints that bear on it.
[43] The “governing statutory scheme, other applicable statutory or common law and the principles of statutory interpretation are particularly relevant constraints when reviewing the vires of subordinate legislation”: Auer, at para. 60. They are therefore an appropriate starting point.
[44] Section 64(1) of the Act provides the authority to make regulations. It is broadly worded. It gives authority to make regulations “respecting any matter necessary or advisable to effectively carry out the intent and purpose the Act”. That authority is not limited to the specific matters listed under s. 64(1), but the list includes anything regarding the following:(d) governing certificates and their issuance, renewal, suspension and cancellation, including, …
(iii) governing qualifications and requirements for a certificate, ... [45] The rest of the Act does not limit the types of qualifications and requirements that may be imposed, which is consistent with the broad scope of the authorization to make regulations about certification.
[46] The legislative history summarized above confirms and supports the conclusion that the Regulation is consistent with the Act’s purpose. Although Cabinet gave no reasons for its decision to promulgate the Regulation, we may have regard to the submissions to Cabinet as giving indications as to the purposes of the Act and the Regulation: Auer, at paras. 52-54. The submissions here indicated that the certification system was the core of the Act and the primary mechanism by which the Act would improve outcomes. The expected benefits included the reduction of violence and crime, a serious, long-recognized problem in the industry. The use of criminal records in the certification regime is amply supported by the record that led to the Cabinet decision.
[47] The applicants accept that public safety is one of the goals of the Act and the Regulation. However, they submit that s. 2(d)(i) and the related provisions in the Regulation do not rationally advance public safety (emphasizing that the applicants themselves do not pose a risk). They submit that they have the opposite effect, because they exclude drivers such as themselves who have a demonstrated record of safe and competent participation in the industry. They submit that they limit the number of tow truck drivers and therefore interfere with the demand for those services.
[48] These submissions relate to the effectiveness and wisdom of the Regulation, which is not the question. The “reasonableness standard does not assess the reasonableness of the rules promulgated by the regulation‑making authority; rather, it addresses the reasonableness of the regulation‑making authority’s interpretation of its statutory regulation‑making power”: Auer, at para. 56.
[49] Nor have the applicants established their submission that the government did not consider the matter in detail and misunderstood the implications of the weapon prohibition.
[50] Contrary to this submission, the express words of s. 2 of the Regulation show a detailed level of consideration regarding what should be disqualifying under the Act. Section 2 of the Regulation has four categories of things that are disqualifying:(1) subsection (a) lists over two dozen specific criminal offences;
(2) subsection (b) lists specific offences and groups of offences that, if convicted in the prior five years, are disqualifying;
(3) subsection (c) lists specific offences under the CDSA that, if convicted in the prior ten years, are disqualifying; and,
(4) subsection (d), quoted above, expressly refers to court orders prohibiting a person from “possessing a weapon” as well as orders regarding some other matters. [51] Under this detailed regime, it is plainly shown that specific offences, time limits and types of court orders were considered to prepare the draft regulation and that people with weapons prohibitions would be disqualified. Including a weapons prohibition is amply supported by the legislative purposes of the Act.
[52] The applicants seek to move from the general categories in the above section, to the specific consequences for them. They submit that it is irrational to exclude people who have worked lawfully in the industry because of twenty-year-old convictions. They submit that other people with more violent offences may become eligible for a certificate (since some of the other categories under s. 2 have time limits), where the weapons prohibition category does not. These are, again, policy choices. And the submission overlooks the prospect that the people with those more serious offences may also have a weapons prohibition and be disqualified for that reason.
[53] The decision to impose a weapons prohibition on the applicants was made under the Criminal Code. There may be consequences for them. As put in Auer, at para. 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] We conclude that s. 2(d)(i) of the Regulation is reasonably within the scope of Cabinet’s authority to make regulations under s. 64(1) of Act. In other words, having considered all relevant factors in the reasonableness review of the vires of the part of the Regulation at issue, as set out in Auer and Vavilov, the applicants have not shown that s. 2(d)(i) or the related subsections of the Regulation are unreasonable.
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