Court Of Appeal For Ontario Affirms That The "Student Choice Initiative" Was Imposed Unlawfully

• Published date: 19 August 2021
• Subject Matter: Government, Public Sector, Litigation, Mediation & Arbitration, Government Contracts, Procurement & PPP, Trials & Appeals & Compensation
• Law Firm: McCarthy Tétrault LLP
• Author: Canadian Appeals Monitor, Adam Goldenberg, Solomon McKenzie and Mathias Memmel

Background

Colleges operate as agents of the Crown and are regulated by the OntarioColleges of Applied Arts and Technology Act ("OCAAT Act").¹ The OCAAT Act grants the Minister of Training, Colleges and Universities (the "Minister") substantial control over colleges' internal operations.²

By contrast, universities in Ontario are quasi-public institutions. A statute incorporates each university (collectively the "University Acts") as a not-for-profit corporation. Their quasi-public nature has been interpreted as affording universities significant autonomy to govern their internal processes.³

Ontario provides operating grants to colleges and public universities. Some of this funding is provided on a conditional basis; for example, conditional funding is used to set domestic tuition rates throughout the province.⁴

On March 29, 2019, at the direction of the Ontario Cabinet, the Minister released two SCI directives: a binding policy for colleges⁵ and guidelines for publicly funded Ontario universities.⁶ The SCI directly prohibited colleges, universities and student governments from levying mandatory fees other than for "essential" activities.⁷ Colleges, universities and student government were required to provide students with an online opt-out option for "non-essential non-tuition fees".⁸

To ensure the implementation of the SCI, Ontario placed conditions on colleges' and universities' operating grants. Failure to implement the SCI allowed the Minister to deduct from the college's operating grant.⁹ Similarly, the Minister required universities to reimburse students for the excess or non-compliant fees or else face cuts to their operating grants.¹⁰

In the Divisional Court ¹¹

On November 21, 2019, a three-judge panel of the Divisional Court quashed the SCI. The court characterized the SCI as an exercise of executive discretion made pursuant to the Crown's prerogative powers, specifically its spending power.¹² Although the court accepted that Ontario has a broad discretion to impose conditions on the use of government funds, it found that existing legislation limited the government's discretionary powers to interfere with the funding of student governments at colleges and with the internal affairs of universities.

For colleges, the court held that the OCAAT Act explicitly precludes Ontario from interfering with student governments.¹³ The court relied on section 7 of the OCAAT Act, which states:

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.¹⁴

For universities, the Court held that the University Acts "occupy the field" and grant universities the exclusive...