



COURT OF APPEAL FOR ONTARIO

CITATION:
Canadian Federation of Students
    v. Ontario (Colleges and Universities), 2021 ONCA 553

DATE: 20210804

DOCKET: C68262

Fairburn
    A.C.J.O., van Rensburg and Huscroft JJ.A.

BETWEEN

The Canadian
    Federation of Students and the York Federation of Students

Applicants (Respondents)

and

Ontario
    (Minister of Training, Colleges and Universities)

Respondent (Appellant)

and



University of Toronto Graduate Students Union and Bnai
    Brith of Canada League for Human Rights

Interveners (Interveners)

Sunil S. Mathai,
    Ananthan Sinnadurai and Colin Bourrier, for the appellant

Mark Wright, Louis
    Century and Geetha Philipupillai, for the respondents

Ewa Krajewska,
    Teagan Markin and Mannu Chowdhury, for the intervener University of Toronto
    Graduate Students Union

David Elmaleh and
    Aaron Rosenberg, for the intervener the Bnai Brith of Canada League for Human
    Rights

Phil Tunley, for
    the intervener Canadian Journalists for Free Expression, the Ryerson Centre for
    Free Expression, the Canadian Association of Journalists, PEN Canada, World
    Press Freedom Canada and the Canadian Association of University Teachers

Danny Kastner and
    Vinidhra Vaitheeswaran, for the intervener the Association for Canadian Clinical
    Legal Education

Robert A. Centa and
    Lauren Pearce, for the intervener University of Ottawa, Queens University at
    Kingston, Governing Council of the University of Toronto, University of
    Waterloo, and University of Western Ontario

Pam Hrick and Dragana
    Rakic, for the intervener Start Proud and Guelph Queer Equality

Heard: March 23, 2021 by
    video conference

On appeal from the
    order of the Divisional Court (Justices Harriet E. Sachs, David L. Corbett
    and Lise G.Favreau), dated November 21, 2019, with reasons reported at 2019
    ONSC 6658, 147 O.R. (3d) 721.

Huscroft J.A.:

OVERVIEW

[1]

Ontario provides billions of dollars in
    operating grants to the provinces colleges of applied arts and technology and
    universities annually. The question raised by this appeal is whether receipt of
    these funds can be conditioned on compliance with a framework the Minister of
    Training, Colleges and Universities has established governing the payment of student
    ancillary fees. The framework requires colleges and universities to allow
    students to opt out of payments for what are deemed to be non-essential
    ancillary fees, including fees charged by student associations  fees that have
    long been compulsory.

[2]

The Divisional Court quashed the ancillary fees
    framework, holding that it was unlawful because it was inconsistent with the
Ontario Colleges of Applied Arts and Technology Act,
    2002
, S.O. 2002, c. 8, Sched. F, (the 
OCAATA
)

and
    the Acts that establish each Ontario university (the University Acts).
[1]
The Minister appeals.

[3]

In my view, although the Divisional Court erred by
    characterizing the framework as an exercise of prerogative power, the court
    reached the correct conclusion: the ancillary fees framework conflicts with the
    legislation governing Ontarios colleges and universities and cannot be imposed
    upon them by the exercise of executive authority. If the framework is to be established,
    the
OCAATA
and University Acts
    must be amended.

[4]

I would dismiss the appeal for the reasons that
    follow.

BACKGROUND

[5]

Although both Ontario colleges and universities
    operate as not-for-profit corporations, they differ in significant respects.
    Colleges are established pursuant to the
OCAATA
and operate as highly
    controlled agents of the Crown. In contrast, each university is established by a
    separate Act and operates independently in accordance with its statutorily
    mandated governance structure.

[6]

Both colleges and universities are funded, in part,
    through annual operating grants made by the Minister of Training, Colleges and
    Universities from the Ministrys budget. These grants cover a significant
    portion of the institutions operating expenses  over $5 billion annually, or
    about one-third of overall operating revenue.

[7]

Students pay compulsory ancillary fees to
    colleges and universities in addition to tuition fees. These fees cover
    non-academic services provided by the college or university such as athletic
    centres and career services, as well as fees paid to student associations. The
    respondent York Federation of Students (YFS) is one such body. Its membership
    fee is approved in a student referendum and is collected and remitted to the YFS
    by York University, which requires students to pay the fee as a condition of
    enrolment.

[8]

YFS is a member of the respondent Canadian
    Federation of Students (CFS), an umbrella organization of college and
    university student federations. YFS remits fees to the CFS, which are collected
    by York University in the same manner as YFS fees.

The impugned directives and guidelines

[9]

Ontario has long used the college directives and
    university guidelines to regulate tuition fees, imposing tuition freezes and
    limits on tuition increases as conditions in its operating grants. The Minister
    revised the college directives and university guidelines in 2019 to require a
    10% reduction in tuition fees, and in addition established a framework
    governing ancillary fees called the Student Choice Initiative (the framework).

[10]

The stated purpose of the framework is to help
    reduce the cost of education while enhancing transparency regarding fee payment
    and giving students greater choice regarding the services and activities they
    wish to support. The framework differentiates between what are deemed essential
    and non-essential services and requires that the payment of fees for
    non-essential services be made optional. Essential services include athletics,
    career services, student buildings, health and counselling, academic support,
    student ID cards, student achievement and records, financial aid offices, and
    campus safety programs, subject to compliance with the definitions set out in
    the guidelines.
[2]
All other ancillary fees are deemed non-essential and so must be made optional,
    including the fees of student associations.

[11]

Compliance with the framework is enforced by the
    threat of reductions to the colleges and universities operating grants.
    According to the directives, non-compliance by colleges could result in a
    deduction from the colleges allocation under the Core Operating Grant. Universities
    may be required to reimburse students for the excess or non-compliant fees
    charged and if the students cannot be reimbursed, the Ministry will have the
    option of reducing the institutions operating grants.

[12]

YFS and CFS brought an application for judicial
    review seeking to quash the framework.
[3]
They argued that the framework:

1.

is inconsistent with the statutory schemes
    regulating colleges and universities;

2.

was made for an improper purpose and in bad
    faith; and

3.

was made in breach of the requirements of
    procedural fairness.

The Divisional Courts Decision

[13]

The Divisional Court rejected the Ministers
    argument that the application was non-justiciable. The court acknowledged it
    had no authority to assess the wisdom of the framework but held that the case
    turned on a question of legality the court could properly resolve: whether the Minister
    has the legal authority to require colleges and universities to comply with the
    framework. This conclusion is not challenged on appeal.

[14]

The Divisional Court characterized the framework
    as a decision made pursuant to the exercise of the Crowns power to spend,
    which it described as a prerogative power. The court accepted that the Minister
    has wide latitude to decide whether and how to spend public funds, including
    whether to impose conditions on the use of those funds, but questioned the
    purpose of the framework and, in particular, the governments claim that it was
    intended to lower the cost of education. The court also questioned the wisdom
    of the distinctions drawn between essential and non-essential fees; whether
    conditions attached to the annual grants had to be relevant or material to the
    purpose for which the funds were provided; and whether conditions could
    interfere with the financing and activities of third parties that do not
    receive public funds. However, the court concluded it was not necessary to
    decide these questions given the limitations on the exercise of the Crowns
    prerogative power that governed the outcome of the case. To wit: The Crown
    cannot exercise its prerogative powers in a manner contrary to legislation or
    in circumstances where legislation has displaced the Crowns prerogative power
    explicitly or by necessary implication.

[15]

Dealing first with colleges, the court noted
    that the Ministers authority pursuant to s. 4(1) of the
OCAATA
to
    issue policy directives in relation to the manner in which colleges carry out
    their objects or conduct their affairs is restricted by s. 7, which 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
    a student governing body from doing so.

[16]

The court held that the effect of the ancillary
    fee directives was to restrict student associations from carrying out their
    normal activities, in contravention of s. 7 of the
OCAATA
.

[17]

As for universities, the court found that
    although there were no specific statutory provisions in the University Acts
    addressing the Ministers authority concerning student associations, the
    independent governance structure of the universities precluded the Minister
    from implementing the guidelines. The court held that the University Acts
    occupy the field when it comes to internal university governance, including
    student activities, and that the framework interfered with universities
    autonomous governance.

[18]

In light of these conclusions it was not
    necessary for the court to address the respondents second and third arguments.
    The court quashed the framework on the basis that it was inconsistent with the
OCAATA
and the University Acts.

ISSUES ON APPEAL

[19]

The Minister argues that the Divisional Court
    erred in law by holding, first, that s. 7 of the
OCAATA

prohibited
    the Minister from implementing the framework, and second, that the University
    Acts occupy the field such that they displace or limit the exercise of the
    Crowns spending power.

The standard of review

[20]

It is well established that on an appeal from an
    order of the Divisional Court concerning an application for judicial review of
    a tribunal decision, this court must determine whether the Divisional Court identified
    the proper standard of review and applied it correctly. This is sometimes
    described as the court stepping into the shoes of the Divisional Court. The
    appeal is, in effect, a
de novo
review of the tribunal decision. See
    e.g.,
Longueépée v. University of Waterloo
, 2020 ONCA 830,
    153 O.R. (3d) 641, at paras. 47-48, applying
Agraira v. Canada

(Minister
    of Public Safety and Emergency Preparedness)
, 2013 SCC 36, [2013] 2
    S.C.R. 559, at paras. 45-46.

[21]

In this case, however, the Divisional Court was
    not reviewing a tribunal decision; it was reviewing an exercise of executive
    authority by the Minister. The Divisional Court made the findings of fact and
    applied the relevant legal tests. In these circumstances, the proper approach
    is to follow the standard normally applied on appeal, as set out in
Housen
    v. Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235: the Divisional Courts
    conclusions on questions of law are reviewed on the correctness standard, but its
    findings of fact and on questions of mixed fact and law are entitled to
    deference, subject to review on the palpable and overriding error standard. This
    is the approach followed in the Federal Court. See, e.g.,
Apotex Inc. v.
    Canada (Health)
, 2018 FCA 147, 157 C.P.R. (4th) 289, at paras. 57-61, and
    the authorities cited therein, leave to appeal refused, [2018] S.C.C.A. No. 397.

DISCUSSION

The nature of the power exercised by the
    Minister

[22]

The imposition of the framework by the Minister
    in this case is variously described by the Divisional Court and the parties as
    an exercise of the prerogative, the prerogative spending power, the spending
    power, or the natural person spending power. Although it is common ground that
    the Ministers power can be limited or ousted by legislation, it is important
    to attend to the nature of the power being exercised given relevant juridical
    distinctions.

[23]

Prerogative powers are unique in nature 
    vestiges of powers once enjoyed by the Monarch and now exercised by the Crown,
    whether federally or provincially. For example, the prerogative includes such
    things as the conduct of international relations and the granting of honours.
    See, generally, Dwight Newman and Guy Régimbald,
The Law of the Canadian
    Constitution
, 2nd ed. (Toronto: LexisNexis, 2017) at § 1:19-1:22. However,
    the prerogative enjoys no greater status than common law and much of it has
    been overtaken by statute law: see
Black v. Canada (Prime
    Minister)
(2001), 199 D.L.R. (4th) 228 (Ont. C.A.), at para. 27.

[24]

The Supreme Court has described the prerogative
    power as the residue of discretionary or arbitrary authority, which at any
    given time is legally left in the hands of the Crown:
Canada (Prime
    Minister) v. Khadr
, 2010 SCC 3, [2010] 1 S.C.R. 44, at para. 34,
    citing
Reference as to the Effect of the Exercise of the Royal Prerogative
    of Mercy Upon Deportation Proceedings
, [1933] S.C.R. 269, at p. 272,
per

Duff
    C.J. The court further described the prerogative power as a limited source of
    non‑statutory administrative power accorded by the common law to the
    Crown:
Khadr
, at para. 34, citing Peter W. Hogg,
Constitutional
    Law of Canada
, loose-leaf (2009-Rel. 1), 5th ed. (Scarborough, Ont.:
    Thomson/Carswell, 2007), at p. 1-17.

[25]

This description, based on A. V. Diceys observation
    in
Introduction to the Study of the Law of the Constitution
, 8th ed.

(London: Macmillan and
    Co., 1915), at p. 352, is not uncontroversial; there is considerable debate in
    the Commonwealth as to the nature and scope of the prerogative, as well as its
    continued relevance: see e.g., Thomas Poole, 
The
    Strange Death of the Prerogative in England
, LSE Law, Society and
    Economy Working Papers 21/2017, discussing Diceys conception as well as those
    of John Locke and William Blackstone; and Jennifer Klinck, 
Modernizing Judicial Review of the Exercise of
    Prerogative Powers in Canada
 (2017) 54:4 Alta. L. Rev. 997. But
    there is no need to resolve any issues about the prerogative for purposes of
    this appeal, for this case does not concern the prerogative.

[26]

The Crowns so-called spending power is not a
    prerogative power; it is simply a description of executive authority to spend
    money in support of government policies and programs. This authority is
    sometimes described as an example of the exercise of the third source of
    government authority  the first two being statute law and the prerogative. See
    e.g., B.V. Harris,

The
    third source of authority for government action revisited
 (2007)
    123 L.Q.R. 225. The basic idea is that, like a natural person, the government has
    the authority to do anything that it is not legally prohibited from doing.

[27]

The analogy holds to some extent: for example,
    like natural persons, the Crown can make commercial arrangements involving
    employment or the purchase and sale of goods and services. But the Crowns
    ability to spend money is different in kind given its scale, its impact, and
    the political purposes in support of which it may be exercised, as this case
    demonstrates.

[28]

The Minister has conditioned receipt of the
    governments annual multi-billion dollar contribution to college and university
    education on compliance with a detailed framework governing the payment of
    student ancillary fees. That framework is neither mandated nor authorized by
    legislation, yet it involves the government in matters of internal college and
    university governance involving third party student associations.

[29]

Whether the framework conflicts with the legislation
    that establishes colleges and universities and regulates their governance is a
    matter of statutory interpretation but the analysis differs in each context,
    for the
OCAATA
confers extensive authority on the Minister to direct
    college operations while the University Acts contemplate virtually no role for
    the Minister in university governance. In both contexts, however, the same
    principle governs: the framework is an exercise of executive authority and it
    is axiomatic that it must yield in the event of legislative conflict. As the
    Supreme Court put it in
Reference re Pan‑Canadian Securities
    Regulation
, 2018 SCC 48, [2018] 3 S.C.R. 189, at para. 55: Parliamentary
    sovereignty therefore means that the legislative branch of government has
    supremacy over the executive and the judiciary: both must act in accordance
    with statutory enactments, and neither can usurp or interfere with the
    legislatures law-making function.

[30]

Colleges and universities perform different
    functions and their relationships with the government differ significantly. I
    will address the situation of colleges first.

Colleges

[31]

Ontario colleges are highly regulated Crown
    agents. They are established by regulations made under the
OCAATA
as
    corporations without share capital, and among other things provide vocational
    training, apprenticeships, and applied research designed to meet the needs of
    employers and support economic and social development in Ontario. The Minister
    enjoys extensive control over Ontario colleges, as s. 4 makes plain. That
    section specifically empowers the Minister to direct college operations:

4

(1) The Minister may issue policy directives in
    relation to the manner in which colleges carry out their objects or conduct
    their affairs.

(2)
    The policy directives are binding upon the colleges and the colleges to which
    they apply shall carry out their objects and conduct their affairs in
    accordance with the policy directives.

(3)
    A policy directive of the Minister may be general or particular in its
    application.

[32]

Ministerial control over colleges is reiterated
    throughout the
OCAATA
. For example, s. 5 of the Act authorizes the
    Minister to intervene in the affairs of a college if, in the Ministers
    opinion, the college is not providing services as required, the college fails
    to follow a policy directive, or it is in the public interest to do so. The Act
    permits the Minister to define the public interest having regard to such considerations
    as the quality of a colleges management and administration and the quality of
    the education and training services it is providing.

[33]

Cabinet exercises considerable control over
    colleges and their boards of governors through its regulation-making authority
    under s. 8 of the
OCAATA
, which among other things includes the
    authority to vary or expand the objects and responsibilities of any college and
    to prescribe any matters related to the manner in which a college carries out
    its affairs.

[34]

No question as to the legality of the framework
    at issue in this case would arise but for s. 7 of the
OCAATA,
the only section of the Act that deals with student
    associations
. That section 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
    a student governing body from doing so.

[35]

The consistency of the framework with the
OCAATA
,
    and hence its legality, hinges on the interpretation of s. 7, which plainly is
    designed to protect the independence and autonomy of student governing bodies (student
    associations).

[36]

The Minister argues that s. 7 cannot be used to read
    down her authority under s. 4 of the
OCAATA
. The first component of s.
    7 confirms only that nothing restricts student associations from carrying on
    their normal activities but does not refer to the powers of the Minister or the
    government, and according to the Minister is not intended to fetter their
    authority to restrict the activities of student associations. Although
    colleges power over student associations has been curtailed by the second
    component of s. 7, that section is silent as to what the Minister or the
    government may do, so it must be presumed that the Legislature did not intend
    to curtail their authority (an example of implied exclusion). The Minister
    argues that the Legislature intended to authorize the Minister to direct
    colleges to take action that they could not otherwise take in respect of
    student associations.

[37]

I disagree.

[38]

The modern principle of statutory interpretation
    is well established: legislation is to be interpreted in a manner that gives
    effect to the intention of the Legislature, and legislative intention is to be
    determined having regard to the text, context, and purpose of the legislation:
    see e.g.,
Canada (Minister of Citizenship and Immigration) v. Vavilov
,
2019 SCC 65, 441 D.L.R. (4th) 1, at
    paras. 117-18, and the helpful discussion by Miller J.A. (dissenting) in
R.
    v. Walsh
, 2021 ONCA 43,

154
    O.R. (3d) 263,
at paras. 135-50.

[39]

Section 7 of the
OCAATA
includes two
    components, both of which specifically protect the ability of student associations
    to carry out their normal activities. The first component is declaratory in
    nature; it states that
nothing
in the Act restricts a student
    organization from carrying on its normal activities. This must be understood as
    an instruction not to interpret any provisions of the
OCAATA
as
    authorizing interference in the normal activities of student associations,
    including s. 4. The second component of s. 7 applies only to colleges and specifically
    prohibits them from preventing student associations from carrying on their
    normal activities.

[40]

The text of s. 7 establishes a clear limit on
    what is otherwise extensive executive authority over colleges internal
    governance. Whatever else it entails, that authority may not be exercised in a
    manner that restricts the normal activities of student organizations.

[41]

Contrary to the Ministers submission, there is
    nothing absurd about this interpretation. Student associations are not public
    bodies; they neither exercise public authority nor expend public funds. The
OCAATA
is concerned with the regulation of colleges, not student associations.

[42]

The Minister argues that even if s. 7 limits her
    authority to make directives, the Divisional Court erred in concluding that the
    framework restricted the normal activities of a student association.

[43]

Again, I disagree.

[44]

Although the
OCAATA
does not define
    normal activities, it was not necessary for the Divisional Court to do so.
    The Act neither establishes student associations nor oversees their operation.
    There was ample evidence about the nature of the student associations
    activities and the impact of the ancillary fee framework on those activities.
    The Ministers witness, the Acting Director of the Postsecondary Accountability
    Branch of the Ministry of Training, Colleges and Universities, acknowledged in
    cross-examination what follows as a matter of common sense: if student associations
    receive less funding because students can opt out of paying their fees, their
    ability to engage in the scope of the activities theyve historically engaged
    in will be affected. The Ministers statement in the
Q & A
document
    accompanying the framework that student governing bodies may need to adjust
    their scope and activities based on the demand at their institutions,
    acknowledges as much.

[45]

The expert evidence of Dr. Glen Jones, Professor
    at the Ontario Institute for Studies in Education, provides additional support.
    I note that, although the Minister, at first instance, objected to the
    admission of Dr. Jones evidence  not because Dr. Jones did not qualify as an
    expert but because admission of the evidence did not satisfy the necessity test
    in
R. v. Mohan
, [1994] 2 S.C.R. 9
 the Minister did not contest the Divisional Courts decision to admit Dr.
    Jones evidence on this appeal.

[46]

Dr. Jones evidence was emphatic. He stated:

These Directives represent an unprecedented
    intrusion into the normal activities of self-governing college student
    associations, including their ability to determine fees through democratic
    processes and enter into agreements with colleges for the collection and
    remittance of those fees, which will in turn adversely affect the governance
    and operations of colleges as well.

[47]

The Divisional Courts findings reveal no
    palpable and overriding error and are entitled to deference. The court properly
    interpreted s. 7 as prohibiting the Minister from exercising her statutory authority
    over colleges in a manner that would interfere in the ability of student associations
    to carry out their normal activities, and properly concluded that the framework
    had precisely this effect. The Minister cannot impose the ancillary fees
    framework on the colleges. If an opt-out ancillary fees framework is to be
    established, the
OCAATA
must be amended.

Universities

[48]

In contrast with colleges, Ontario universities
    are not Crown agents and are not highly regulated by the government. In
    general, they provide broader education as opposed to vocational training. This
    is made clear in the purpose statements of the various University Acts, which
    speak of the advancement of learning and the dissemination of knowledge; the
    intellectual, social, moral and physical development of [the universitys]
    members and the betterment of society;
[4]
and pursui[ng]
learning through
    scholarship, teaching and research within a spirit of free enquiry and
    expression
.
[5]

[49]

The achievement of these goals requires that
    universities be self-governing, and so they are: although there are minor
    differences across the University Acts, in general they establish boards of
    governors and senates
to run the universities and
    empower them to do so. The
Algoma University Act, 2008
, is typical in
    this regard.

[50]

Section 5 of that Act accords the university
all the powers necessary and incidental
    to its objects and Parts III and IV establish a bicameral governance
    structure.
Section 8 specifies that there shall be a board of governors
    with 12-30 members, a small minority of which (3) shall be appointed by the
    government. But the ultimate size of the Board and its membership is determined
    by the Board through its bylaw-making authority. Management of the university
    is vested in the Board, whose authority is set out inclusively rather than
    exhaustively. The Board is responsible for 
governing and managing the affairs of the University and has
    the necessary powers to do so: s.
17(1). Members of the Board are
    required to exercise their authority 
diligently,
    honestly, in good faith, in the best interests of the University and in
    accordance with any other criteria set out in the by-laws of the board: s. 15.
The Senate at Algoma University has up to 60 members, no government
    appointees, and like the Board of Governors has bylaw-making authority as to
    its composition: s. 18. The Senates powers, set out under s. 24 of the Act,
    include
the power to determine and
    regulate the educational policy of the University and are subject only to the
    approval of the Board concerning the expenditure of funds.

[51]

In short, like all of the University Acts, the
Algoma
    University Act, 2008
establishes self-governing independence and autonomy.
    There is no residual ministerial or government authority concerning university
    operations. Indeed, there is but one reference to the Minister in the Act, s.
    32, which requires the university to make reports to the Minister.

[52]

The Minister argues that the Divisional Court
    erred by applying an occupy the field test to determine whether the
    University Acts displaced the Crowns power to impose the framework, rather
    than asking whether the framework conflicted with any specific provisions in
    the University Acts. The Minister argues, further, that the court erred in
    interpreting the University Acts as complete codes governing the relationship
    between the Crown and universities. Finally, the Minister argues that the
    University Acts do not bind the Crown, and so cannot displace the Crowns power
    to impose the framework.

[53]

I reject these arguments.

[54]

First, the Ministers objection to the occupy
    the field language used by the Divisional Court is based on the premise that
    the Minister has exercised a prerogative power and that such a power could be
    limited only by legislation explicitly prohibit[ing] the Minister from
    imposing government policy on universities as a condition of receiving public
    funds. This premise is incorrect. The Minister has not exercised a prerogative
    power; she has simply exercised executive authority. Thus, the tests set out
    for ousting the prerogative in cases such as
Ross River Dena Council Band
    v. Canada
, 2002 SCC 54, [2002] 2 S.C.R. 816, at para. 4, and
Attorney
    General v. De Keysers Royal Hotel,
[1920]
    A.C. 509 (H.L.),

are
    irrelevant, even assuming that the Ministers statement of the law governing
    the ousting of the prerogative is correct.

[55]

As I outlined above, using the example of the
Algoma
    University Act, 2008
, the University Acts make plain that universities are
    self-governing bodies. This follows from their text and is consistent with
    their context and purpose. The expert evidence provided by Dr. Jones concerning
    university governance and higher education policy in Canada confirms the
    relevant context and purpose. Institutional autonomy is and has long been the
    fundamental principle of university governance, a matter that was recognized
    recently by this court in
Ball v. McAulay
, 2020 ONCA 481, 452 D.L.R.
    (4th) 213, at para. 59.

[56]

As Dr. Jones explained, the requirement of
    institutional autonomy began to develop following the recommendation in the 1906
    report of the Royal Commission on the University of Toronto (the Flavelle
    Commission) that universities be free from partisan political control. Ontario
    universities came to be established as autonomous, self-governing institutions,
    normally with bicameral governing boards overseeing administrative and academic
    matters. The
University of Toronto Act
, S.O. 1906, c. 55, formed the
    model for other universities in the province,
[6]
all of which are created by their own statutes as independent, not-for-profit
    corporations.

[57]

Student associations cannot neatly be separated
    from university governance. On the contrary, they are an important part of it.
    Student associations formed with their own independent governance structures,
    with leadership positions filled by annual democratic elections. As Dr. Jones
    explained, student representatives came to be added to university governing
    bodies following the recommendations of the Duff-Bergdahl Report in 1966, but
    the core governance principles of universities remained intact.

[58]

Mandatory fees for student associations  collected
    by universities and remitted to the student associations  have been in place
    in universities since the 1960s. Student associations have joined umbrella
    provincial and/or national student organizations, which are similarly dependent
    on mandatory fees collected by the universities. This funding structure has
    permitted student associations to play important roles in university
    governance.

[59]

The Divisional Court was entitled to accept Dr.
    Jones evidence and made no error in doing so. The University Acts do not all
    protect the institutional autonomy of universities in the same way. But what is
    explicit in some of the Acts  for example, s. 8 of
the University of
    Ottawa Act, 1965
, states that management, discipline and control of the
    University shall be free from the restrictions and control of any outside body
     is implicit in the others, given the self-government structures that all the
    University Acts establish.

[60]

Indeed, given the role played by student associations
    in university governance, the framework is a profound interference in
    university autonomy  not a mere fettering of the universities discretion, as
    the Minister submits. The Minister has no authority to fetter the exercise of
    the universities discretion concerning student associations in any event  again,
    not because universities are immune from regulation, but because the
    Legislature has chosen not to regulate them. Instead, the Legislature has
    chosen to establish the universities as autonomous entities, free from
    government interference in matters of internal governance. The Minister cannot
    exercise executive action in a manner that conflicts with the University Acts.

[61]

The Divisional Court made no error in concluding
    that the framework constitutes an incursion into university autonomy by
    interfering with the funding of student associations, and as a result their
    ability to play a role in university governance. Universities have exercised
    their authority to establish a mandatory fee system in order to promote student
    associations and support their participation in university governance. That is
    a choice the universities are entitled to make under the University Acts and
    the Minister cannot exercise executive authority in a manner that interferes
    with this decision.

[62]

That the University Acts do not specifically
    prohibit the Minister from imposing government policy on universities as a
    condition of receiving public funds is of no moment; the University Acts
    establish that universities are autonomous institutions. Specific prohibition
    of ministerial interference was not required.

[63]

Nor does it matter that relationships with
    student associations and the means pursuant to which fees are collected and
    distributed differ across universities. In the case of York University, student
    fees are the subject of Presidential Regulation Number 4, approved by the Board
    of Governors, which requires that [e]very student must be represented by, and
    pay a fee to, a central student government  in this case, the respondent YFS.
    The framework is plainly in conflict with York Universitys regulation. But, as
    I have said, the existence of a conflict with the University Acts does not
    depend on specific legislative provisions or regulatory authorization. The
    framework interferes with university governance simply by virtue of limiting
    universities authority to make decisions regarding the role played by student associations,
    however they choose to make them.

[64]

The Ministers argument that the University Acts
    do not bind the Crown is untenable. This argument relies on the premise that no
    provision in any of the statutes expressly binds the Crown, but again, it
    overlooks the very nature and purpose of universities and the individual Acts
    and the governance structures they establish: universities are created to be
    independent, self-governing bodies, and it is fanciful to suggest that they are
    not. To conclude that the University Acts do not bind the Crown would wholly
    frustrate their clear purpose, and this is sufficient to establish that the
    legislation binds the Crown:
Alberta Government Telephones v. Canada
    (Canadian Radio-television and Telecommunications Commission)
, [1989] 2 S.C.R. 225,
at p. 281.
    Universities receipt of government funding does not alter this.

[65]

The Minister makes the alternative argument that
    the government is free to contract with universities to provide public funds
    subject to conditions that include the framework. There is no principled reason,
    the Minister submits, why it could impose the framework by contract while being
    prohibited from doing so as a condition in the guidelines.

[66]

This is another example of the difference
    between spending done by executive action and spending done by a natural
    person. The government can, like a natural person, enter contracts, and the
    framework is in some ways analogous to a contract, but there is a significant
    difference: public universities are dependent on the monies they receive
    annually as part of their operating budgets. This dependence is one of the
    things that gives rise to the need for operational independence from government
    that the University Acts establish. Although government funding has decreased significantly
    as a percentage of university budgets over the course of the last generation,
    its contribution to university operating expenses remains significant. It is
    simply unrealistic to suggest that universities could refuse these operating
    grants if they were unwilling to implement the ancillary fees framework.

[67]

The Minister argues that a conclusion that she
    cannot impose the framework necessarily puts the governments ability to regulate
    tuition fees at risk. This issue was not fully developed in argument and need
    not be resolved for the purposes of determining this appeal: the respondents do
    not contest the governments ability to regulate tuition fees in the context of
    providing annual operating grants and no submissions were made on the matter by
    any universities. In any event, I would note that the issue is not whether
    tuition fees may be regulated, but
how
they may be regulated, and in
    particular whether they can be regulated by means of executive action rather
    than legislation.

[68]

In summary, the ancillary fees framework is inconsistent
    with the University Acts and cannot be imposed on universities by executive
    action. That is sufficient to resolve this appeal, and there is no need to
    address the remaining arguments.




CONCLUSION

[69]

I would dismiss the appeal.

[70]

The respondents are entitled to their costs from
    the appellant, fixed in the agreed amount of $20,000, all inclusive. No costs
    order is made concerning the interveners.

Released: August 4,
    2021 J.M.F.

Grant Huscroft J.A.

I agree. Fairburn A.C.J.O.

I agree. K. van Rensburg J.A.





[1]

Algoma University Act
,
    2008, S.O. 2008, c. 13;
Carleton
    University Act
, S.O. 1952, c. 117, as amended by S.O. 1957, c. 130;
Nipissing University Act
, 1992, S.O.
    1992, c. Pr52;
Ontario College of Art and
    Design University Act
, 2002, S.O. 2002, c. 8, Sched. E;
The Brock University Act
, S.O. 1964, c.
    127;
The Lakehead University Act
,
    1965, SO 1965, c. 54;
The Laurentian
    University of Sudbury Act
, 1960, S.O. 1960, c. 151;
The McMaster University Act
, 1976, S.O.
    1976, c. 98;
The Ryerson University Act
,
    1977, S.O. 1977, c. 47, as amended by S.O. 2002, c. 8, Sched. Ps5;
The Trent University Act
, 1962-63, S.O.
    1962-63, c. 192;
The University of Guelph
    Act
, 1964, S.O. 1964, c. 120;
The
    University of Toronto Act
, 1971, S.O. 1971, c. 56;
The University of Windsor Act
, 1962-63,
    S.O. 1962-63, c. 194;
University of
    Ontario Institute of Technology Act
, 2002, S.O. 2002, c.8, Sched. O;
University of Ottawa Act
, 1965, S.O.
    1965, c. 137;
University of Waterloo Act
,
    1972, S.O. 1972, c. 200;
University of
    Western Ontario Act
, 1982, S.O. 1982, c. 92;
Wilfrid Laurier University Act
, 1973,
    S.O. 1973, c. 87;
York University Act
,
    1965, S.O. 1965, c. 143.



[2]
Health and dental plans and student transit passes may be charged
    on a compulsory basis, subject to conditions not relevant here.



[3]

I note that no universities were party to the judicial
    review application and that no question of standing appears to have arisen in
    the Divisional Court. Several universities intervened in the appeal as friends
    of the court and took no position on the disposition of the appeal.



[4]
See, e.g.,
The Lakehead
    University Act
, 1965, s. 3;
The
    Laurentian University of Sudbury Act
, 1960, s. 3;
The Trent University Act
, 1962-63, s. 3;
The University of Guelph Act
, 1964, s. 3.
    See also similar language in
York University
    Act
, 1965, s. 4 and
Ryerson
    University Act
,1977 (amended), s. 3.



[5]
See, e.g.,
Nipissing
    University Act
, 1991, s. 3;
Algoma
    University Act
, 2008, s. 3;
University
    of Waterloo Act
, 1972, s. 3;
Wilfrid
    Laurier University Act
, 1973, s. 4.



[6]
With the exception of Queens University and Royal Military
    College, for reasons not relevant here.


