Discrimination and Regulation-Making: Procureur général du Québec c. Kanyinda, 2024 QCCA 144 and Lauzon-Foresterie (Fiducie) c. Municipalité de L’Ange-Gardien, 2024 QCCA 506

A few months ago I posted on a couple of recent appellate decisions on discriminatory bylaws (see here). My excellent doctoral student Paul-David Chouinard noted that the Quebec Court of Appeal has also weighed in on this issue twice recently, in Lauzon-Foresterie (Fiducie) c. Municipalité de L’Ange-Gardien, 2024 QCCA 506 and Procureur général du Québec c. Kanyinda, 2024 QCCA 144. Lauzon-Foresterie is a case about municipal taxation; Kanyinda about the regulation of access to subsidized childcare.

In Lauzon-Foresterie, the discrimination claim arose in respect of a new statutory provision empowering municipalities in Quebec to levy direct taxes (s. 1000.1 of the Municipal Code of Quebec). The provision contains restrictions (e.g. no taxes on income) and conditions (e.g. the subject of the tax and the tax rate must be clearly specified). It also makes clear that the municipality may make “exemptions from the tax”.

The municipality used the new power to create a tax on some vacant lots, any of 10 acres or more but exempting agricultural and resource-extraction land. This, the appellants claimed, created an arbitrary distinction between some types of lots considered vacant (such as those used for forestry) and agricultural and resource-extraction land (even though this land is often also forest and thus indistinguishable from the appellants’ lots). In essence, they argued that the municipality had to apply a uniform approach across all of its territory to the taxation of vacant lots. This generated two distinct grounds of attack on the lawfulness of the regulation: first that the municipality’s piecemeal approach was not authorized by the legislation and, second, that the approach was discriminatory. These distinct grounds are often conflated in challenges to regulations (and see the discussion of Kanyinda below) but they are analytically distinct.

The first ground failed, as Lavallée JA found that the power to create “exemptions” could be applied to the whole of the municipality’s territory or simply a part (at para. 62), because the legislature had not sought to limit or condition this power in any way (at para. 61).

The second ground also failed. Lavallée JA recognized that a power to discriminate must be provided expressly or by necessary implication and that any such power can only be used in a non-arbitrary way. Here, the power to create “exemptions” implicitly authorized discrimination, on condition that any such discrimination be rationally justifiable (at para. 72). The necessary justification was available (at para. 76). The municipality had engaged in a classic weighing of social and economic factors, seeking to give favourable treatment to the agricultural sector to promote growth and to not penalize a resource-extraction sector already required to pay taxes under a different regime:

les règlements attaqués prévoient une exonération de la taxe qui a fait l’objet d’une justification rationnelle et raisonnable de la part de l’intimée. La preuve démontre que les exonérations réglementaires reposent sur la volonté que les terrains vacants situés dans les zones d’extraction soient exploités sans que soit imposé un fardeau fiscal supplémentaire aux carrières et sablières, lesquelles sont déjà assujetties à une redevance qui s’ajoute à la taxe foncière. De même, la preuve retenue par le juge permet de conclure que l’intimée s’est souciée de la volonté de revitaliser les terres agricoles vacantes et, à cette fin, de ne pas accroître le fardeau fiscal des agriculteurs (at para. 75).

In Kanyinda, the issue was the validity of the exclusion from Quebec’s subsidized childcare programme of refugee claimants who hold valid work permits. Claimants whose refugee status is recognized are eligible, but those whose claims are being processed are not. The practical — and very real — problem is that final decisions on refugee claims can take several years (3 in K’s case), during which time they are not eligible for the subsidized childcare programme.

The Educational Childcare Act establishes the programme, which involves the payment of reduced fees by parents for childcare services subsidized under the Act: “The Government may, by regulation, set the amount of the contribution to be paid by a parent for childcare services for which the childcare provider is subsidized” (s. 82). Certain parents may also be exempted from paying the contribution, in whole or in part (s. 84): there is a dispute resolution mechanism for determining eligibility (s. 87). The Act in addition provides for a regulation-making power to “determine the terms and conditions for payment of the parental contribution set by the Government” (s. 106(26); see also s. 42(4)).

Dutil JA held that the ability to set terms and conditions was broad enough to empower the government to exclude asylum seekers by regulation:

En examinant tant l’objet de la LSGÉE que cette loi dans son ensemble et sa finalité, je suis d’avis que le gouvernement pouvait déterminer les conditions d’admissibilité prévues à l’article 3 RCR. La LSGÉE doit être étudiée « dans [le] contexte global en suivant le sens ordinaire et grammatical qui s’harmonise avec l’esprit de la loi, l’objet de la loi et l’intention du législateur ». En interprétant la LSGÉE en suivant ces enseignements, les conditions et modalités, dont il est question au paragraphe 106(26), « suivant lesquelles le parent verse la contribution réduite fixée par le gouvernement », incluent, à mon avis, les conditions d’admissibilité qu’il faut respecter pour profiter de cette contribution réduite‑ci et auxquelles le législateur fait référence au paragraphe 42(2) et à l’article 87 LSGÉE. Il est logique qu’il en soit ainsi et cela est cohérent. En effet, comme le plaide le PGQ, il est difficile de soutenir que le gouvernement puisse établir par règlement les cas où un parent peut être exempté de payer une contribution réduite, mais qu’il ne puisse en établir les conditions d’admissibilité (at para. 55).

…

En l’espèce, le législateur indique qu’il y a des conditions d’admissibilité à la contribution réduite. Puisque je conclus que le gouvernement était habilité à déterminer ces conditions d’admissibilité par règlement, il avait donc le pouvoir discrétionnaire de faire des distinctions entre certaines catégories de personnes pour déterminer lesquelles étaient admissibles. Cela respecte l’objet de la loi et ne rend pas l’article 3 RCR discriminatoire au sens du droit administratif (at para. 75).

I am not entirely convinced here. The legislation effectively creates a right to subsidized childcare (subject to sufficient places being available). The only relevant terms and conditions relate to how much a parent must pay for the service and whether a parent is exempt from paying. The purpose of the regulation-making power does not seem to be to exclude categories of parent — the whole point of the legislation is to create a general scheme to which all children of working parents have access. In that context, I do not think it necessarily follows that a power to determine terms and conditions includes a power to exclude identified categories of parent.

I am put in mind of the decision of the Court of Appeal of England and Wales in R. v. Secretary of State for Social Security, ex part Joint Council for the Welfare of Refugees, [1997] 1 WLR 275. Now, the regulation there, which deprived certain categories of refugee claimant from social assistance payments, was much more severe in its effects than the regulation at issue in Kanyinda. It was also passed under a different statute than the one relating to refugee status. Nonetheless, the broad point seems strikingly similar to me: a general regulation-making power should not lightly be allowed to eliminate a specific right accorded by legislation. In short, Kanyinda does not seem to me to be an obvious case of implicit authorization. At the very least, any exclusion by regulation should be subject to careful scrutiny in circumstances like these.

Ultimately, in Kanyinda, the regulation was struck down because it violated the right to equality guaranteed by s. 15 of the Charter of Rights and Freedoms and the violation was not saved by the proportionality test under s. 1.

This analysis does raise another question, however. As noted above in my discussion of Lauzon-Forestrie, discrimination must be authorized by legislation (expressly or by necessary implication) but must also be rationally justified. Even if one accepts that the exclusion of refugee claimants from the subsidized childcare programme was implicitly authorized by the legislation, there remains the question of whether this exclusion is reasonable.

Here, however, the exclusion could not be justified under s. 1, as there was no rational connection between the objective of the regulation and the means used to achieve the objective. Quebec argued that the regulation sought to ensure that only parents with a sufficient connection to the province could benefit from subsidized childcare. But, Dutil JA pointed out, several of those whom the regulation permits to benefit from the programme would only be in Quebec temporarily (at para. 111). She also found there was no minimal impairment and that the exclusion failed the balancing test: “Le PGQ ne soulève aucun effet bénéfique découlant de cette exclusion prévue à l’article 3 du RCR du point de vue des politiques législatives et de la société dans son ensemble. Les effets préjudiciables subis par les personnes demandant l’asile, au contraire, ont été démontrés de manière manifeste par Mme Kanyinda, preuve scientifique à l’appui” (at para. 115).

This all being so, however, how could one say that the exclusion was justified in an administrative law sense? To my eye, the absence of a rational connection, minimal impairment and evidence of harm to the public interest militate just as much in favour of a conclusion of administrative law unlawfulness as they do in favour of Dutil JA’s conclusion under s.1. It would have been nice to see more discussion of this point, as the context of the regulation-making power here is very different to the municipal context, where the weighing of competing interests is an inherent part of the regulation-making process and the courts are understandably deferential.

In the end, it worked out better for K that she won under the Charter, as Dutil JA was able to read K’s eligibility into the regulations (at paras. 117-120).

As with the cases from Alberta and Saskatchewan discussed in my previous post, these are very interesting decisions on an important issue and well worth reading in full.

This content has been updated on September 23, 2024 at 16:11.