Appeal Watch: Executive Authority Trenches on Legislative Protections for Post-Secondary Student Associations in Canadian Federation of Students v Ontario

In Canadian Federation of Students v Ontario, 2021 ONCA 553 [CFS 2021], the Court of Appeal for Ontario (“the Court”)  unanimously ruled that the Minister of Colleges and Universities cannot condition funding to post-secondary institutions on a student opt-out mechanism for “non-essential” ancillary fees. The Court found that this exercise of the government’s spending power is constrained by the governing legislation for Ontario’s colleges and universities. This case comment anticipates questions the Supreme Court of Canada may be called upon to answer if the Minister seeks leave to appeal this decision. Such issues may include what legislatures must do to safeguard universities’ autonomy in order to oust executive authority, and the practical import of identifying the precise source of executive authority.  

Background

The Minister creates the Student Choice Initiative

In 2019, the Minister revised college directives and university guidelines to implement the Student Choice Initiative (“SCI”), a framework for the payment of ancillary fees (CFS 2021, para 9). The stated purpose of the SCI was to reduce the cost of post-secondary education and create more transparency in fees by allowing students the choice to opt out of fees deemed “non-essential” (CFS 2021, para 10). Among the “non-essential” fees were those charged by student associations like the respondents in this case, the York Federation of Students and the Canadian Federation of Students (CFS 2021, para 10). Under the framework, colleges and universities that failed to implement the opt-out could face orders to reimburse students for “non-compliant fees charged,” and beyond that, a reduction in the institution’s operating grants (CFS 2021, para 11). For context, provincial grants comprise about one-third of overall operating revenue for colleges and universities (CFS 2021, para 6).

Students successfully challenge the SCI

The respondents brought a successful application to quash the SCI on judicial review. The Divisional Court ruled that the framework was justiciable—not in terms of the Minister’s authority to set spending priorities, but rather as a matter of the Minister’s authority to require compliance with the SCI as a condition for receiving operating grants (CFS 2021, para 13). The court went on to find that the initiative was an expression of the Crown’s prerogative powers, which it referred to interchangeably as the Crown’s “spending powers.” The court held that these powers were displaced by section 7 of the Ontario Colleges of Applied Art and Technology Act, 2002, SO 2002, c 8, Sched F [OCAATA] and the autonomous governance structures established under the enabling statutes for each university in Ontario (“University Acts”)(CFS 2021, paras 14-17, 22).

Decision

The SCI was not an exercise of the Crown’s prerogative power

The Court of Appeal agreed with the lower court in terms of the proper statutory interpretation of the relevant legislation as well as the final disposition of the case. However, it began its analysis of the issues on slightly different footing. Rather than conflating the two terms, the Court distinguished the “prerogative power” from the “spending power” (CFS 2021, para 22). It defined prerogative power as a residual form of discretionary authority that the common law has accorded exclusively to the Crown, pointing to the conduct of international relations and the conferral of state honours as examples (CFS 2021, paras 23-24). It defined the spending power as “simply a description of executive authority to spend money in support of government policies and programs” (CFS 2021, para 26). The Court elaborated by drawing a loose analogy to the powers of natural persons to do anything they are not legally prohibited from doing, like forming contracts and purchasing goods (CFS 2021, paras 26-27). 

Whether characterized as an exercise of the prerogative power or the spending power, both courts agreed that executive action is limited to the extent it conflicts with legislation, in accordance with the principle of parliamentary sovereignty (CFS 2021, para 29; Canadian Federation of Students v Ontario, 2019 ONSC 6658 [CFS 2019], paras 93-97). 

The SCI unlawfully interferes with student associations in provincial colleges

The Court found that the Minister’s executive authority was constrained in respect of both types of post-secondary institutions, despite the significantly greater control that the Minister may exert over colleges. Here, the Court cited section 4 of the OCAATA, which empowers the Minister to issue binding policy directives “in relation to the manner in which colleges carry out their objects or conduct their affairs.” At the same time, section 7 of the OCAATA provides:

Nothing in this Act restricts a student governing body of a college elected by the students of the college from carrying on its normal activities and no college shall prevent the student governing body from doing so.

The Court reasoned that if “[n]othing” in the Act can interfere with student associations carrying out their normal activities, then it follows that the Minister’s extensive powers under section 4 cannot either (CFS 2021, paras 35-40). The Court went on to find that by allowing students to opt out of paying fees to student organizations, the SCI would interfere with the normal activities of these organizations by reducing the funding they require to carry out these activities (CFS 2021, para 44).

The SCI strikes at the core of universities’ institutional independence

In light of the self-governing nature of Ontario’s universities, an explicit inconsistency with the University Acts was not necessary to oust the Minister’s executive authority (CFS 2021, para 62).

The Court found that common to all the University Acts is a goal of advancing higher learning through free inquiry and expression. To achieve this goal, the Acts established autonomous decision-making bodies within each university, namely a senate and/or a board of governors (paras 48-49). The Court found that with powers like the authority to make by-laws and regulate educational policy, these decision-making bodies leave no room for the Minister to exert control over university operations (CFS 2021, paras 50-51). Over the Minister’s objections, the Court emphasized that “[i]nstitutional autonomy is and has long been the fundamental principle of university governance” (CFS 2021,  para 55).

In a remarkable statement, the Court found that to interfere with the normal functioning of student associations by reducing their funding is to interfere, profoundly, in the university’s autonomy (CFS 2021, para 60). The Court referenced evidence from the respondents’ expert witness that universities have collected and remitted fees for student associations since the 1960s. These associations, self-governing in their own right, rely on this funding to participate meaningfully in university governance (CFS 2021, paras 57-58). Thus, in the college setting, the SCI threatens the integrity of student associations only, but in the university setting, the threat is more fundamental. Absent legislative amendments to radically alter the nature and purpose of universities, the Minister cannot interfere with each school’s autonomous decision to collect and remit fees to student associations to support the group’s larger institutional role within university affairs (CFS 2021, para 61).  

The Court made clear that the University Acts need not use express language to constrain the executive spending power; any interference with the independent governance structures established through the University Acts would “wholly frustrate” the purpose of these statutes. Per Alberta Government Telephones v Canada, [1989] 2 SCR 225, this is enough to bind the Crown (CFS 2021, para 64). The Minister argued that because it can impose conditions on funding through contractual agreements with the universities, it should be able to do the same via a policy directive. The Court rejected this notion, reasoning that universities’ financial dependence on government grants underscores the importance of maintaining their operational independence (CFS 2021, para 66).

Discussion

The Court set aside the question of whether and how tuition fees in general may be regulated by executive action rather than legislation, finding the Minister’s arguments on this point to be insufficiently developed (CFS 2021, para 67). This larger question may become the defining issue of the case, should the Minister be granted leave to appeal this decision to the Supreme Court of Canada (“SCC”). 

Short of that, the SCC may be persuaded to consider how explicit legislation must be with respect to the protection of the university’s institutional independence when it comes to determining if executive authority has been ousted. The enacting legislation for universities can vary significantly from province to province. For example, universities were established as a system in B.C. and Alberta rather than through individual Acts as is the case in Ontario. A recent study by the Canadian Journal of Higher Education found that these differences translate to varying degrees of autonomy from provincial governments. If the SCC rules that institutional independence must be legislated in particular ways, a possibility arises that universities may be subject to lesser or greater levels of interference by executive action depending on where they are located in Canada.

One question I am left with is whether it was necessary for the Court of Appeal to distinguish between the prerogative power and the spending power. The Minister defined the framework as an exercise of the Crown’s prerogative power in its submissions before the Divisional Court (CFS 2019, para 82). Without having read the Minister’s factum or having observed the hearing, it appears that the Minister did not depart from this view or raise it as an issue on appeal. It seems, then, that the Court introduced this analytical refinement of its own accord. But the distinction between prerogative and spending powers had no bearing on the outcome of the case, nor on the statutory interpretation that led both courts to conclude that the SCI is inconsistent with, and trumped by, legislation. 

Furthermore, the Court did not cite any case law in relation to its definition for the “spending power.” Rather, it made reference to one academic article from 2007 (CFS 2021, para 26). In contrast, the Divisional Court referenced five cases in its discussion of the “Crown’s prerogative spending power” (CFS 2019i para 88). That said, a brief review of these cited authorities does reveal a persistent ambivalence as to the exact source of authority for government spending programs that are not supported by a statutory scheme. 

One of these cases cites Peter Hogg in the Constitutional Law of Canada for the proposition that there is no practical importance for distinguishing between “true prerogative” powers and “natural-person” powers because both are reviewable by the courts (Canadian Doctors for Refugee Care v Canada (Attorney General), 2014 FC 651, para 392). A recent Federal Court decision suggests that one way there may in fact be practical importance is when the court is called upon to determine whether legislation has displaced or limited the prerogative power (Stagg v Canada (Attorney General), 2019 FC 630, para 45). The concurring opinion in Ross River Dena Council Band v Canada, 2002 SCC 54 established that the prerogative power is ousted or limited not only by clear legislative language, but also, potentially, by “necessary implication” (para 4). The SCC has not revisited this suggestion since 2002; CFS 2021 may change that.  

On a separate note, I find it telling that no university participated as a party to these proceedings. The Court observed in footnote 3 of paragraph 12 that several universities did intervene as friends of the court, “and took no position on the disposition of the appeal.” Given the centrality of the university’s autonomy in the Court’s reasons, and the comment that operational independence grows in importance where there is significant financial dependence, I hope this decision has a galvanizing effect on administrations. It is true that the government could legislate away universities’ independent governance structures, such as by mandating government appointees to boards of governors or by abolishing senates. However, and as this decision makes clear, if the government pursues such dramatic changes, it must do so through a transparent and public legislative process rather than under the murky cover of executive action.