Included in Discovery: Atlantic Education & the Law – Issue 07

Nicholas Russon and Kathleen Nash

In December 2018, the Ontario Cabinet approved a direction for the Minister of Training, Colleges and Universities (“Minister”) to implement three new initiatives purportedly aimed at improving affordability and access to post-secondary education. One of these initiatives, known as the “Student Choice Initiative” (“SCI”), required colleges and universities to give students the choice to opt out of certain fees Ontario had deemed “non-essential”. If a college or university failed to comply, the SCI gave the Minister the option to reduce provincial funding to the institution.

Less than a year later, in November 2019, the Ontario Divisional Court quashed the SCI, finding that it was beyond the scope of Ontario’s executive authority.¹ The Divisional Court’s decision affirmed the autonomy of universities and confirmed the statutory limits on the Minister’s authority over colleges. Ontario was granted leave to appeal this decision.²

Now, the highest court in Ontario will have a chance to weigh in on the limits of that provincial government’s authority to issue mandatory policy directives to post-secondary institutions and the limits on the justiciability of the government’s decision-making powers.

The regulation of colleges and universities in Ontario

In Ontario, like most provinces, universities are incorporated by unique private statutes. The Divisional Court held that the purpose of incorporating universities under private statutes is to protect the university from political interference and ensure the university is an autonomous, self-governing entity.³ While universities receive government funding, they are not part of government. Rather, they are private, not-for-profit corporations that are granted the authority to govern their affairs through their unique statutes.⁴ Generally, this authority includes the authority to collect tuition fees and to, “collect other fees and charges, as approved by the Board, on behalf of any entity, organization or element of the University.”⁵

Colleges in Ontario, on the other hand, are governed by the Ontario Colleges of Applied Arts and Technology Act ⁶ (“OCAAT)”, which provides the Minister with the power to “issue policy directives in relation to the manner in which colleges carry out their objects or conduct their affairs.” ⁷ This power conferred on the Minister differentiates the regulation of colleges from that of universities. However, this authority is not without limits – the Minister must exercise his or her authority in accordance with the rest of the OCAAT. Of particular importance in this case is section 7 of the OCAAT, which provides:

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

It is the later part of this section, regarding the “normal activities” of a student governing body, that was challenged in this case.

The impugned directives

As stated above, the SCI was introduced in December 2018 and was set to take effect in the 2019-20 academic year. The SCI was part of a three-part initiative, the stated purpose of which was to “improve affordability and access to publicly-assisted universities and colleges.”⁸

The SCI introduced a new condition with respect to ancillary fees (non-tuition related fees) charged to students. The SCI required ancillary fees to be categorized as either “essential” or “non-essential”; essential fees would be mandatory while non­essential fees would be optional (i.e. students must be given a choice to opt-out). If a college or university did not comply with the directives, the SCI gave the Minister the authority to withhold funding from the institution. Of particular importance to the application for judicial review was that student government fees were among those fees that were deemed non-essential. No evidence was filed with respect to how Ontario determined which fees were deemed essential.⁹

The application for judicial review

The applicants, two student associations, sought judicial review to quash the impugned directives on three bases:

• the directives were inconsistent with statutory schemes regulating colleges and universities;
• the directives were made for an improper purpose and in bad faith; and
• the Minister’s failure to consult the student associations prior to issuing the directives breached a duty of procedural fairness.

Ontario defended the application for judicial review on two bases: (1) the issue was not reviewable by a court and (2) the SCI was within its power to enact. The Divisional Court rejected both arguments.

(1) Justiciability

Ontario first argued that the application was not justiciable (i.e. within the authority of the Court to rule on) because the impugned directives reflected a “core policy choice” and were therefore not subject to review, and that the impugned directives were exercises of the Crown’s prerogative spending power. The Divisional Court disagreed and held that neither argument justifies exempting Cabinet directives from judicial review for legality.

The Court affirmed the principle that “core policy decisions”, i.e. decisions as to a course of action that are based on public policy considerations, are not justiciable if they are neither irrational nor taken in bad faith.¹⁰ However, if the subject matter of the decision has a sufficient legal component, judicial intervention can be sought.¹¹ In this case, the Court held that the subject matter was whether the SCI conflicts with the statutory schemes governing the regulation of colleges, universities and student associations – a subject matter that has a “sufficient legal component to warrant the intervention of the judicial branch.”¹²

Ontario also argued that the impugned directives involved the government’s exercise of a prerogative power. The Court agreed that prerogative spending power does exist and that it includes the power to decide how it will spend public funds and includes the power to impose conditions on the use of such funds. The Court found, however, that whether the SCI fell within the limits of Ontario’s prerogative spending power was a justiciable issue.

While the Court found a few flaws in Ontario’s arguments, the Court ultimately found that the SCI was not a legitimate use of Ontario’s prerogative spending power because it was contrary to the legislation governing colleges and universities, as discussed further below, rendering the SCI an impermissible use of this power.

(2) Legality

The Court found that directives in the SCI aimed at colleges were beyond the legislative authority of the Minister because of section 7 of the OCAAT, which provides:

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

The Court held that section 7 operates as a restriction on the Minister’s power under section 4 of the OCAAT to issue directives. As the SCI required colleges to enforce the directives, the effect of the SCI was to limit the normal activities of a student governing body thus rendering the SCI impermissible under the OCAAT and beyond the scope of the Minister’s legislative authority.

With respect to the aspect of the SCI aimed at universities, the Court found that the impugned directives were an impermissible incursion into the autonomy of universities. While the Court noted that there were no statutory provisions preventing the Minister from issuing the directives to universities, there also was no statutory provision giving the Minister such authority. The Court found that universities “occupy the field” of university governance, including student activities, and that requiring universities to allow students to opt out of certain fees is inconsistent with universities’ autonomous governance.

In reaching this conclusion, the Court relied on the Supreme Court of Canada’s decision in McKinney v University of Guelph, [1990] 3 SCR 229 [“McKinney”], which emphasized the autonomy of universities. In particular, the Court relied on the Supreme Court’s ruling that “the government thus has no legal power to control the universities even if it wished to do so.”¹³ The Court found that the SCI had the effect of interfering with how universities control and associate with student governments, an effect inconsistent with the autonomy of universities.

Key takeaways

This decision affirms university autonomy and the limits on government authority to regulate the affairs of post-secondary institutions. The Court’s reasoning should be instructive in dealing with colleges and universities across Canada.

Nevertheless, post-secondary institutions should carefully assess their individual statutes to determine whether they contain provisions that could affect a government’s ability to issue directives similar to the SCI.

¹ Canadian Federation of Students v. Ontario, 2019 ONSC 6658 [CFS].
² The Canadian Federation of Students et al v Ontario (M51125), March 20, 2020 (Ont CA).
³ CFS at para 40.
⁴ CFS at para 43-33.
^{5 CFS at para 43.
6 2002, SO 2002, c 8 Sch F [OCAAT].
7 OCAAT, s. 4(1).
8} CFS at para 65.
^{9 CFS at para 67.
10 CFS at paras 77-78.
11 CFS at para 80.
12} CFS at para 81.