Court of Appeal for Ontario

Date: 2025-04-22
Docket: COA-24-CV-0801
Coram: Zarnett, Coroza and Favreau JJ.A.

Between:
The General Manager, The Ontario Health Insurance Plan (Appellant)
and
K.S. (Respondent)
and
Egale Canada and Canadian Civil Liberties Association (Interveners)

Counsel:

• S. Zachary Green, Savitri Gordian and Adrienne Ralph, for the appellant
• John McIntyre and Jessica Szabo, for the respondent
• Gregory Ko, Frank Nasca and Olivia Evans, for the intervener Canadian Civil Liberties Association
• Daniel Girlando and Hanna Rioseco, for the intervener Egale Canada

Heard: 2024-11-26

On appeal from the order of the Divisional Court (Edwards R.S.J., Sachs and Davies JJ.), dated April 10, 2024, with reasons reported at 2024 ONSC 2061.

Zarnett J.A.:

A. Overview

[1] This appeal requires us to decide when a gender affirming surgery qualifies as an insured service that is to be paid for by the Ontario Health Insurance Plan (“OHIP”).

[2] Under the Health Insurance Act, R.S.O. 1990, c. H.6 (the “Act”), OHIP insures the cost of insured services incurred by Ontario residents. The Act describes insured services in general terms, leaving specificity to the regulations passed under the Act. The regulations provide that specificity in part through a comprehensive Schedule of Benefits. The interpretation of the Schedule of Benefits, in the context of the regulations and the Act, is central to the determination of the appeal.

[3] Although the regulations provide that services generally accepted in Ontario to be experimental are not insured services, this does not apply to services that are specifically listed as insured services in the Schedule of Benefits. The Schedule of Benefits designates certain “sex-reassignment surgical procedures” as “insured services when prior authorization has been obtained”, prescribes the mode of obtaining authorization, and states that prior authorization may be granted only for “specifically listed services”. One of the services listed is a vaginoplasty, a type of gender affirming surgery.[2]

[4] The respondent, K.S., sought prior authorization and confirmation from the appellant, the General Manager of OHIP, that the cost of a vaginoplasty recommended by her health care team would be covered by OHIP. There was no dispute that she fulfilled all the requirements for authorization, including having assessments from appropriately trained health professionals recommending the surgery. The General Manager denied coverage contending that, because the vaginoplasty would not be accompanied by a penectomy, the proposed procedure is not one specifically listed in the Schedule of Benefits.

[5] The Health Services Appeal and Review Board (the “Board”) allowed K.S.’s appeal from the denial of coverage. In the Board’s view, a vaginoplasty is an insured service because it is a specifically listed service in the Schedule of Benefits whether or not accompanied by a penectomy – another specifically listed procedure that sometimes, but not always, is performed along with a vaginoplasty. Moreover, in light of the determination that it is specifically listed, it did not matter whether the recommended technique was experimental.

[6] The General Manager appealed the Board’s decision to the Divisional Court, contending that the Board erred in its determinations and raising an additional ground not raised before the Board. The Divisional Court dismissed the appeal and refused to entertain the new ground of appeal.

[7] The General Manager now appeals, with leave, to this Court. For the reasons that follow, I would dismiss the appeal.

[8] The meaning and intent of the legislative and regulatory scheme are clear. The vaginoplasty recommended for K.S. is an insured service because vaginoplasty is specifically included in the Schedule of Benefits’ listing of specific sex-reassignment surgical procedures that are insured services, and because K.S. meets the stringent requirements for prior authorization of that surgery. I reject the General Manager’s arguments that the proposed surgery is not an insured service because it will not be accompanied by a penectomy – a different specifically listed procedure that is neither recommended by K.S.’s health professionals nor desired by K.S. The specific listing of vaginoplasty in the Schedule of Benefits as an insured service coupled with the fulfillment of the stringent requirements for prior authorization renders the General Manager’s contention that the procedure is experimental beside the point.

[9] There is also no basis to interfere with the Divisional Court’s discretionary decision not to allow the General Manager to raise a new issue on appeal.

B. Background

(1) Relevant Legislative and Regulatory Provisions

[10] The General Manager is appointed under the Act to administer OHIP: Act, s. 4(2). OHIP’s purpose is “providing insurance against the costs of insured services”: Act, s. 10.

[11] Every person resident in Ontario is entitled to become an insured person of OHIP upon application: Act, s. 11(1). Every insured person is entitled to payment, to them or on their behalf, for insured services, subject to such conditions as are prescribed by regulations under the Act: s. 12(1).

[12] The Act defines insured services in general terms. It provides that insured services are prescribed services of hospitals and health facilities, prescribed medically necessary services of physicians, and prescribed health care services of prescribed practitioners. Since s. 1 of the Act defines “prescribed” to mean prescribed by the regulations under the Act, the Act leaves the specificity about what constitutes an insured service to the regulations.

[13] Sex-reassignment surgery falls within this general framework. Although subject to the regulations, the Act excludes services that seek to change the sexual orientation or gender identity of a person from the ambit of insured services, the Act specifically provides that sex-reassignment surgery, or any services related to it, do not come within that exclusion.

[14] Sections 11.2(1), (1.1) and (1.2) of the Act provide:

(1) The following services are insured services for the purposes of the Act:

1. Prescribed services of hospitals and health facilities rendered under such conditions and limitations as may be prescribed.
2. Prescribed medically necessary services rendered by physicians under such conditions and limitations as may be prescribed.
3. Prescribed health care services rendered by prescribed practitioners under such conditions and limitations as may be prescribed.

(1.1) Despite subsection (1) and subject to the regulations, if any, any services that seek to change the sexual orientation or gender identity of a person are not insured services.

(1.2) The services mentioned in subsection (1.1) do not include:

(a) services that provide acceptance support or understanding of a person’s coping social support or identity exploration or development; and

(b) sex-reassignment services or any services related to sex-reassignment services.

[15] Regulation 552 under the Act contains the regulations pertinent to the issues in this matter (for ease of reference, I refer to them as the “regulations”). The regulations make frequent reference, in describing what are and are not insured services, to a Schedule of Benefits. The Schedule of Benefits is defined in section 1(1) of the regulations as a document published by the Ministry of Health and Long-term Care entitled, “Schedule of Benefits — Physician Services under the Health Insurance Act (October 1, 2005)”.

[16] Section 24(1) of the regulations provides that certain services rendered by physicians are not insured services unless they are specifically listed as an insured service in the Schedule of Benefits. Among the services that are not insured unless specifically listed in the Schedule of Benefits are treatments that are generally accepted within Ontario to be experimental:

The following services rendered by physicians or practitioners are not insured services and are not part of insured services unless, in the case of services rendered by physicians, they are specifically listed as an insured service or as part of an insured service in the schedule of benefits ….

[17] The Schedule of Benefits specifically addresses, among other services, sex-reassignment surgery. Paragraph 17 of Appendix D of the Schedule of Benefits provides that sex-reassignment surgical procedures listed in that paragraph are insured services when prior authorization has been obtained. It details the requirements that must be met for prior authorization. These requirements include assessments from a physician and other health care professional(s) appropriately trained in the treatment of gender dysphoria under the standards of the World Professional Association for Transgendered Health (WPATH). The assessments must confirm that the insured person has a diagnosis of gender dysphoria, has undergone 12 continuous months of hormone therapy, has lived for 12 continuous months in a gender role congruent with their gender identity, and is recommended for the surgery for which approval is sought. Among the listed sex-reassignment surgical procedures for which approval may be granted are certain “specific services listed” including “External Genital Surgery (clitoral release, glansplasty, metoidioplasty, penile implant, phalloplasty, scrotoplasty, testicular implants, urethroplasty, vaginectomy, penectomy, vaginoplasty)” (emphasis added).

[18] Paragraph 17 of Appendix D of the Schedule of Benefits provides, in relevant part:

17. Sex-Reassignment Surgery

Sex-reassignment surgical procedures listed in this section are insured services when prior authorization has been obtained from the MOH.

A request for prior authorization must be completed by a physician or nurse practitioner.

PART A – SUPPORTING DOCUMENTATION NECESSARY FOR A REQUEST FOR PRIOR AUTHORIZATION FOR SURGERY:

A prior authorization request must include supporting assessment(s) that recommend surgery; the assessment must be completed by a provider trained in the assessment, diagnosis, and treatment of gender dysphoria in accordance with the World Professional Association for Transgendered Health (WPATH) Standards of Care that are in place at the time of the recommendation (“appropriately trained provider”).

Supporting assessments recommending surgery may be provided by an appropriately trained:

1. Physician;
2. Nurse Practitioner;
3. Registered Nurse;
4. Psychologist; or
5. Registered social worker.

PART B – SPECIFIC REQUIREMENTS FOR APPROVAL:

Prior authorization for sex-reassignment surgery will only be provided when the following requirements have been met and only for the specific services listed:

1. External Genital Surgery (clitoral release, glansplasty, metoidioplasty, penile implant, phalloplasty, scrotoplasty, testicular implants, urethroplasty, vaginectomy, penectomy, vaginoplasty).

a. Two supporting assessments from appropriately trained providers confirming that the patient is an appropriate candidate for surgery as follows:

i. One assessment from a physician or nurse practitioner; and

ii. One assessment from a different physician, different nurse practitioner, registered nurse, psychologist, or regulated social worker; and

b. The supporting assessments confirm that the insured person meets all of the following criteria:

i. Has a diagnosis of persistent gender dysphoria;

ii. Has completed twelve (12) continuous months of hormone therapy (unless hormones are contraindicated);

iii. Has completed twelve (12) continuous months of living in a gender role that is congruent with their gender identity; and

iv. Is recommended for surgery. [Emphasis added.]

[19] The fact that a service is rendered outside of Ontario does not, in and of itself, take the service outside the scope of insured services that OHIP covers. For example, s. 29(1) of the regulations provides:

(1) A service rendered by a physician outside Ontario is an insured service if, at the time the service is rendered,

(c) the service is referred to in the schedule of benefits and rendered in such circumstances or under such conditions as may be specified in the schedule of benefits.

[20] But under s. 28.4(2)(a) of the regulations, services rendered at a hospital or health facility outside Canada may be subject to an additional condition of being generally accepted by the medical profession in Ontario as appropriate for a person in the circumstances of the insured person:

(2) Services that are rendered outside Canada at a hospital or health facility are prescribed as insured services if,

(a) the service is generally accepted by the medical profession in Ontario as appropriate for a person in the same medical circumstances as the insured person …

(2) Factual Context

[21] K.S. is transgender and non-binary. She does not identify as exclusively female or male; however, she is female dominant and identifies with either feminine or neutral pronouns. Her sex assigned at birth was male.

[22] K.S. has experienced significant gender dysphoria since her teenage years, as well as physical, mental, and economic hardships to transition her gender expression to align with her gender identity.

[23] On May 3, 2022, Dr. Irena Druce, an endocrinologist, submitted to OHIP a “Request for Prior Approval for Funding of Sex-Reassignment Surgery” for K.S. The request was supported by assessments of Dr. Druce and Yael Sela, MSW RSW, a mental health counsellor, confirming: (1) a diagnosis of persistent gender dysphoria; (2) that K.S. had undergone 12 continuous months of hormone therapy; and (3) that K.S. had lived for 12 continuous months in a gender role congruent with her gender identity. Both recommended K.S. undergo surgery.

[24] The surgery recommended for K.S. – for which funding was requested – is a vaginoplasty, the surgical creation of a vaginal cavity and external vulva, consisting of an anatomic clitoral complex and labial complex. The request made it clear that K.S. did not seek a penectomy, a procedure whereby the penis is removed. As Dr. Druce explained in a letter accompanying the request for approval of funding, “[K.S.] identifies as transfeminine but not completely on the ‘feminine’ end of the spectrum and for this reason it’s important for her to have a vagina while maintaining her penis.”

[25] Dr. Druce also explained that a vaginoplasty without a penectomy was not available in Canada and therefore the application was for funding to have the procedure done at the Crane Center for Transgender Surgery in Austin, Texas, which “has an excellent reputation for [gender affirming surgery] and especially with these more complicated procedures”.

[26] On June 27, 2022, OHIP sent a brief letter denying coverage for a vaginoplasty without a penectomy for K.S. on the basis that “Penile Preserving Vaginoplasty or Vaginoplasty (without penectomy) is not listed as a procedure in Appendix D of the Schedule [of Benefits]. Therefore, this is not an insured service under OHIP.”

(3) The Board’s Decision

[27] K.S. appealed OHIP’s denial of coverage to the Board, submitting that the surgery for which funding was sought is a vaginoplasty which is listed in the Schedule of Benefits and qualifies for coverage under OHIP. K.S. testified to significant concerns about a penectomy, including the risk of urinary incontinence, the risk of losing the ability to experience an orgasm, and the concern that removing her penis would invalidate her non-binary identity.

[28] Before the Board, the General Manager’s position was (a) that the procedure K.S. wished to undergo was not an insured service listed in the Schedule of Benefits, for the reasons set out in its letter denying coverage; and (b) an additional ground for denying coverage, namely that s. 24(1) of the regulations specifically excludes, from the definition of insured services, treatment for a medical condition “generally accepted within Ontario as experimental”.

[29] In support of the additional ground, the General Manager submitted the expert opinion of Dr. Yonah Krakowsky, a urologist, describing various “vaginoplasty techniques”, and expressing a view about which were, and were not, considered experimental.

[30] Dr. Krakowsky explained that “penile inversion vaginoplasty” is considered the standard of care in Ontario and is the most frequently used technique globally. This technique involves a penectomy. He also described two other techniques that may be appropriate in some cases for patients with insufficient penile and scrotal skin to facilitate the penile inversion technique and stated that they are not considered experimental: Peritoneal Pull Through Vaginoplasty (PPV) and Rectosigmoid Vaginoplasty (RSV). He went on to opine that there are “newer vaginoplasty approaches including penile preservation vaginoplasty (the creation of a vaginal canal without the removal of the penis) that are currently considered experimental by most surgeons” because there are no published reports “on the functional or psychological outcomes of these techniques or clear indications of when to perform these surgeries.”

[31] In response to the additional ground, K.S. made, among others, two points. First, that Dr. Krakowsky’s opinion was self-contradictory since he described certain techniques which involve a vaginoplasty without a penectomy as non-experimental (the RSV and PPV techniques) while also stating that vaginoplasty without a penectomy was experimental. Second, that even if a vaginoplasty without a penectomy is considered experimental, it is still an insured service because it is listed in the Schedule of Benefits without any restriction on the form, type or technique.

[32] The Board noted that there was no dispute that K.S. met the “general and specific documentary requirements” for prior authorization as set out in para. 17 of Appendix D of the Schedule of Benefits. In other words, there was no dispute that Dr. Druce and Ms. Sela were “appropriately trained providers” within the meaning of the regulations and that their assessments established that K.S. had a diagnosis of persistent gender dysphoria; completed 12 continuous months of hormone therapy; completed 12 continuous months of living in a gender role that is congruent with her gender identity; and that she was recommended for surgery.

[33] The Board identified the main issue before it: “while the [General Manager] does not dispute that [K.S.] has met the prior authorization documentary requirements, the [General Manager] maintains that ‘vaginoplasty’, in the list of eligible external genital surgeries in paragraph 17 of Appendix D, does not include a vaginoplasty without penectomy.”

[34] Contrary to the General Manager’s submission, the Board found that “vaginoplasty without penectomy is specifically listed as an insured service in para. 17 of Appendix D of the Schedule of Benefits.” It noted that para. 17 of Appendix D to the Schedule of Benefits lists vaginoplasty and penectomy as separate surgeries in parentheses under the grouping of “External Genital Surgery”. As a result, the term “vaginoplasty” in the Schedule of Benefits does not necessarily include a penectomy and is insured as a gender affirming surgery on its own, otherwise penectomy would not have been included on its own in the list.

[35] In reaching its conclusion, the Board also relied on the fact that Appendix D to the Schedule of Benefits makes explicit reference to the “WPATH Standards of Care that are in place at the time”. The Board found that this evidenced an intent for the Schedule of Benefits to be interpreted in a manner that is consistent with the WPATH Standards of Care, which encourages an individualized approach to gender affirming care.

[36] Having found that vaginoplasty without penectomy is a specifically listed service in para. 17 of Appendix D to the Schedule of Benefits, the Board found that it was not excluded by s. 24(1) of the regulations, because the exclusion for treatments considered experimental does not, by the very terms of s. 24(1), apply to specifically listed services in the Schedule of Benefits. The Board made no finding as to whether penile preservation vaginoplasty was, in fact, generally accepted as experimental in Ontario.

[37] The Board did not address whether the proposed surgery was generally accepted by the medical profession in Ontario as appropriate for a person in the same medical circumstances as K.S., as contemplated by s. 28.4(2)(a) of the regulations. The General Manager did not raise this point before the Board as a basis for denying or questioning coverage.

(4) Divisional Court Decision

[38] At the Divisional Court, the General Manager argued the Board erred in: (1) finding that vaginoplasty without a penectomy is specifically listed in the Schedule of Benefits; (2) failing to consider that vaginoplasty without a penectomy is an experimental procedure in Ontario and therefore not eligible for funding; and (3) finding coverage without considering whether the other criteria for out-of-country coverage were met. In this third argument, raised for the first time at the Divisional Court, the General Manager submitted that, even if vaginoplasty without penectomy is a specifically listed service, the surgery K.S. wants would still be ineligible for funding because services rendered outside Canada are only insured if they are “generally accepted by the medical profession in Ontario as appropriate for a person in the same medical circumstances as the insured person” under s. 28.4(2)(a) of the regulations.

[39] The Divisional Court dismissed the appeal. Writing for the court, Davies J. affirmed the Board’s conclusion that “a vaginoplasty without an accompanying penectomy is a ‘specifically listed’ service in the Schedule of Benefits”.

[40] The Divisional Court found that the General Manager’s position was inconsistent with the plain meaning of the provision. The General Manager argued that because “vaginoplasty without penectomy” was not specifically listed in para. 17 of Appendix D of the Schedule of Benefits, it is not insured. The Divisional Court found that the comma between each procedure in para. 17, including between “vaginoplasty” and “penectomy”, suggests they are discrete and separate procedures eligible for funding. The preamble to the list describes them as “specific services”; as such, the plain and grammatical meaning is that each of the listed surgeries are eligible for funding on its own with prior authorization. The fact that most who have a vaginoplasty have it done in a way that also involves a penectomy does not change the plain and grammatical meaning of the paragraph. Had it been intended to limit the availability of OHIP funding to vaginoplasties that are performed at the same time as a penectomy, para. 17 of Appendix D of the Schedule of Benefits would have been drafted differently and used limiting language in the list of external genital surgeries eligible for funding.

[41] The Divisional Court also found that the Board’s interpretation was consistent with the intent to incorporate WPATH Standards of Care in para. 17 of Appendix D. The WPATH Standards of Care expressly refer to vaginoplasty without penectomy as a surgical option by noting that vaginoplasties “may include retention of penis and/or testicle”.

[42] Davies J. also found it unnecessary to directly address arguments about the Canadian Charter of Rights and Freedoms raised by K.S. given the conclusion that the Board’s interpretation was correct on a plain reading of the Schedule of Benefits. But she noted that if there was any ambiguity in the language of para. 17 of Appendix D to the Schedule of Benefits, the Board’s interpretation was in any event consistent with Charter values of equality and security of the person.

[43] The Divisional Court also found that the Board could not be faulted for failing to address the application of s. 28.4(2)(a) of the regulations when that section was not raised before the Board. It was not in the interests of justice to allow this new issue to be raised on appeal because the General Manager did not adequately explain why it was not raised below and, in any event, the record from the hearing did not allow the argument about the application of s. 28.4(2)(a) to be fully and fairly addressed.

C. Analysis

[44] The General Manager argues that the Divisional Court erred in three respects:

1. In holding that a vaginoplasty that is not accompanied by a penectomy – a penile preservation vaginoplasty – is specifically listed in the Schedule of Benefits;
2. In failing to find that penile preservation vaginoplasty is not an insured service by reason of the exclusion of experimental treatments in s. 24(1) of the regulations; and
3. In failing to remit the case back to the Board for a determination of whether the proposed surgery met the criterion for out-of-country funding in s. 28.4(2) of the regulations that the service sought must be “generally accepted by the medical profession in Ontario as appropriate for a person in the same medical circumstances as the insured person”.

(1) The Divisional Court Did Not Err in its Holding that the Vaginoplasty Recommended for K.S. is Specifically Listed in the Schedule of Benefits

(a) The Principles of Interpretation and the Standard of Review

[45] The first ground of appeal raised by the General Manager turns on the proper interpretation of the Schedule of Benefits, which is part of the regulations under the Act.

[46] Text, context and purpose are the touchstones of statutory interpretation. “[A]ll statutes…must be interpreted in a textual, contextual and purposive way”: Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54, para 11. Legislative intent – the discernment of which is the goal of the exercise – “can be understood only by reading the language chosen by the legislature in light of the purpose of the provision and the entire relevant context”: Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, para 118; Rizzo & Rizzo Shoes Ltd. (Re), para 21.

[47] “The rules governing statutory interpretation apply equally to regulations” with the added consideration that “a regulation must be read in the context of the enabling Act, having regard to the purpose of the enabling provisions”: Ayr Farmers Mutual Insurance Company v. Wright, 2016 ONCA 789, para 27. This latter point is especially important where an apparent reading of a regulation runs contrary to the intent of the enabling legislation. In such a case, “[t]he intent of the statute transcends and governs the intent of the regulation”: Bristol-Myers Squibb Co. v. Canada (Attorney General), 2005 SCC 26, para 38.

[48] Since the interpretation of a statute is an issue of law and is reviewed on appeal on a standard of correctness (see Vavilov, para 37), it follows that a standard of correctness also applies to the appellate review of the interpretation of a regulation.

(b) Discussion

[49] The core of the General Manager’s argument is the proposition that the surgery recommended for K.S. is not a specifically listed service in the Schedule of Benefits. Characterizing the proposed surgery as penile preservation vaginoplasty, or vaginoplasty without a penectomy, the General Manager points to the absence of those full terms in the Schedule of Benefits. The General Manager argues that the reference to vaginoplasty in the Schedule of Benefits is to a general category, not a specifically listed service.

[50] The proposition that the reference to vaginoplasty in the Schedule of Benefits is to a general category, rather than a specifically listed service, is not supportable. All of the indicators of legislative meaning support the conclusion that a vaginoplasty, whether or not accompanied by a penectomy, is a specifically listed service, and as a result, an insured service.

i. Text, Context, and Purpose of the Regulations

[51] Paragraph 17 of Appendix D of the Schedule of Benefits states: “Sex-reassignment surgical procedures listed in this section are insured services when prior authorization has been obtained…”. It goes on to say that “[p]rior authorization…will only be provided…for the specific services listed”. After these two descriptions of what the list contains, the list is then provided. Vaginoplasty appears in it:

1. External Genital Surgery (clitoral release, glansplasty, metoidioplasty, penile implant, phalloplasty, scrotoplasty, testicular implants, urethroplasty, vaginectomy, penectomy, vaginoplasty) [Emphasis added.]

[52] In light of the text of the provision, the reference to vaginoplasty in the list must be understood in the sense given to it by the words that introduce the list, that is, as a specifically listed sex-reassignment surgical procedure that, with prior authorization, is an insured service. It is not amenable to being read as a general category. Doing so would fail to read the provision as a whole.

[53] Nor is the text capable of being read to mean that vaginoplasty is specifically listed only if performed with a penectomy, an argument contradicted by the separate entries for vaginoplasty and penectomy in the list of procedures. Such an interpretation would deprive the separate listings of any meaning – vaginoplasty, although listed separately from penectomy in a list of insured services, could never be performed separately and be an insured service.

[54] The existence of different techniques to perform a vaginoplasty does not affect this conclusion. It was open to the drafters of the Schedule of Benefits to describe each specifically listed service in broad or narrow terms. Here the description chosen, “vaginoplasty”, is broad enough to encompass different techniques. There is no suggestion that the existence of different techniques of performing a vaginoplasty detract from the more basic notion that the procedure recommended for K.S. is still a vaginoplasty. As the Board put it, a vaginoplasty without a penectomy is an insured service because it is still a vaginoplasty, a specifically listed service.

[55] The broader context of Appendix D of the Schedule of Benefits supports the interpretation that flows from the portions of the text I have emphasized above. The Schedule of Benefits conditions prior authorization for a specifically listed sex-reassignment procedure on assessments performed by medical service providers “trained in the assessment, diagnosis, and treatment of gender dysphoria in accordance with the World Professional Association for Transgendered Health (WPATH) Standards of Care that are in place at the time of the recommendation.” The WPATH Standards of Care recommends that health care professionals provide non-binary individuals with individualized assessment and treatment that affirms their non-binary experiences of gender. The WPATH Standards of Care expressly refer to “penile preserving vaginoplasty” as a surgical option for some non-binary people and also note that vaginoplasty “may include retention of penis and/or testicle”. This re-affirms the view that the term vaginoplasty, as used in Appendix D of the Schedule of Benefits, includes vaginoplasty without penectomy.

[56] Section 24(1) of the regulations deems certain services not to be insured services. But s. 24(1) states that each of those exclusions is overridden for services “specifically listed as an insured service” in the Schedule of Benefits. Section 24(1) thus indicates that the Schedule of Benefits may contain specifically listed insured services. This reinforces the significance to be attributed to the terms “listed”, “insured services”, and “specific services listed”, that appear in Appendix D of the Schedule of Benefits to describe the sex-reassignment surgical procedures set out, including vaginoplasty. The clear intent is to confirm that those procedures are in the category of services that are insured notwithstanding the exclusions in s. 24(1).

[57] In this regard I reject the General Manager’s submission that the interpretive process should begin by recognizing that the surgical procedure recommended for K.S. is considered to be experimental in Ontario. According to the General Manager, it is therefore unlikely that the legislative intention was to insure it given the exclusions for experimental treatments under s. 24(1) of the regulations. Since vaginoplasty is broad enough to describe experimental and non-experimental techniques, the General Manager submits that it should be read only to include the latter.

[58] The Board and the Divisional Court both declined to make a finding on the issue of whether the proposed surgery is experimental. But even assuming it is, the General Manager’s argument is flawed because it effectively stands s. 24(1) of the regulations on its head. That section provides that if a service is specifically listed as insured in the Schedule of Benefits, it is an insured service, even if the terms of s. 24(1) would otherwise render it uninsured – for example, because the treatment is considered to be experimental in Ontario. Whether the treatment is experimental cannot be used to inform, let alone cast doubt on, whether the service is specifically listed; otherwise, the experimental nature would override the specific listing, rather than the other way around.

[59] Section 24(1) of the regulations enables a regulatory choice. A service may be specifically listed as an insured service in the Schedule of Benefits and if it is, whether the treatment is considered experimental in Ontario ceases to be germane. Here that regulatory choice was made, conditioned on stringent requirements for the procedure’s prior authorization that must be (and in this case have been) met. The General Manager’s argument is a quarrel with the regulatory choice that has been made, rather than an interpretation of it.

[60] The General Manager’s position is not assisted by the decision of this court in Flora v. Ontario Health Insurance Plan, 2008 ONCA 538. In that case, the issue was whether Mr. Flora, who was not a candidate for a liver transplant under Ontario’s applicable criteria, should be reimbursed for the cost he incurred in obtaining a transplant in the United Kingdom. The Board in Flora held that the treatment Mr. Flora received in the United Kingdom was not “generally accepted in Ontario as appropriate for a person in [his] medical circumstances”, within the meaning of s. 28.4(2) of the regulations and therefore did not fall within the meaning of insured services rendered outside Canada as set out in that section of the regulations. The Board’s decision was upheld by the Divisional Court and this court.

[61] Flora does not address the meaning of a “specifically listed” service under the provisions of the regulation and Schedule of Benefits that are in issue in this appeal. Flora deals with a section of the regulation that the General Manager did not rely on before the Board in this case, and which the Divisional Court refused to allow the General Manager to raise as a new issue. Because I affirm that ruling of the Divisional Court, considered in full below, the issue of s. 28.4(2) of the Regulation is not properly before us either.

ii. The Interpretation of the Regulations is not Contradicted by the Act

[62] The Act’s purpose is to insure Ontario residents against the cost of certain health care services. The Act makes it clear that sex-reassignment surgery is not excluded from the insured services OHIP covers: ss. 11.2(1) and 11.2(1.2)(b). Thus, the Act’s purpose extends to covering the cost of such surgical procedures for Ontario residents where the service is as prescribed by the regulations.

[63] The regulations, including the Schedule of Benefits, carefully prescribe the sex-reassignment surgical procedures that are listed as insured services, and the detailed requirements for their authorization. The vaginoplasty sought by K.S. comfortably fits within the Act’s contemplation of an insured service. It is a specifically listed service in the Schedule of Benefits that has been recommended by Dr. Druce and Ms. Sela, health care providers appropriately trained in accordance with WPATH standards as contemplated by the Schedule of Benefits, and K.S. meets the requirements for prior authorization therein set out.

iii. Conclusion

[64] The interpretation arrived at by the Board, and concurred in by the Divisional Court, was correct. The vaginoplasty recommended for K.S. is specifically listed as an insured service in the Schedule of Benefits and is not excluded as an insured service by reason of s. 24(1) of the regulations. As there is no genuine ambiguity in the legislative or regulatory language, it is unnecessary to rely on Charter values in support of this result: Commission scolaire francophone des Territoires du Nord-Ouest v. Northwest Territories (Education, Culture and Employment), 2023 SCC 31, para 76; Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, para 62.

[65] I would reject this ground of appeal.

(2) The Divisional Court Did Not Err by Failing to Find That Penile Preservation Vaginoplasty is Excluded Because it is Experimental

[66] As explained above, there was no error in the Divisional Court’s finding that a penile preservation vaginoplasty, also referred to as a vaginoplasty without a penectomy, was specifically listed as an insured service.

[67] It is, therefore, unnecessary to consider whether the Board and the Divisional Court erred in failing to make a factual determination as to whether the procedure sought by K.S. is considered experimental in Ontario. Before one reaches the question of whether a procedure is experimental, the experimental exclusion in s. 24(1) of the regulations must be engaged. It is not. The experimental exclusion applies only to services that are not specifically listed in the Schedule of Benefits as insured services.

[68] I would therefore reject this ground of appeal.

(3) The Divisional Court Did Not Err by Declining to Consider a New Issue

[69] The third issue raised by the General Manager is whether the Divisional Court erred in refusing to consider an issue not raised by the General Manager before the Board. The General Manager argued for the first time before the Divisional Court that even if the proposed surgery was specifically listed in the Schedule of Benefits as an insured service, there was no coverage because under s. 28.4(2) of the regulations, the procedure is to be performed outside of Canada and is not a service that is generally accepted by the medical profession in Ontario as appropriate for a person in the same medical circumstances as K.S.[3]

[70] The General Manager frames this as a jurisdictional issue, rather than a question of raising a new issue on appeal. The General Manager submits that the Divisional Court, acting as a statutory appellate court under s. 24(4) of the Act, was required to “exercise all powers of the [Board] to direct the General Manager to take any action which the [Board] may direct the General Manager to take.” Since the Board had no power to direct the General Manager to dispense with s. 28.4(2) of the regulations, it follows that the Divisional Court also had no power to dispense with s. 28.4(2). The General Manager argues that it was the court’s responsibility to correct this error, not the General Manager’s to raise it before the Board.

[71] I disagree with this framing. The Act provides for an appeal from the Board to the Divisional Court. The legislature, in providing for an appeal from an administrative tribunal such as the Board, has “subjected the administrative regime to appellate oversight and indicated that it expects the court to scrutinize such administrative decisions on an appellate basis”, by applying appellate standards of review absent legislative provision to the contrary: Vavilov, paras 36-37.

[72] In my view, it is a reasonable extension of this principle that, in scrutinizing the Board’s decisions on an appellate basis and applying the appropriate appellate standards of review, the Divisional Court is entitled to control its own process to ensure respect for the inherent features and limitations of an appeal. Such an appeal is not a hearing de novo, and a fair disposition of it assumes a record that has already been developed with decisions made by the Board on issues raised before it. As is sometimes said, an appeal is a review, not a first view.

[73] Accordingly, it is well recognized that “[g]enerally speaking, an issue cannot be raised for the first time on appeal. Whether to grant leave or not is a discretionary call based on a balancing of the impact on the parties and the interests of justice”: R. v. Salifu, 2023 ONCA 590, para 14. The rationale for the discretion is in part fairness – it is unfair to spring a new argument on a party on appeal when, if the issue had been raised below, the evidence may have been developed, or been evaluated, differently: Kaiman v. Graham, 2009 ONCA 77, para 18. The rationale is also in part derived from the nature of the appellate process – an appellate court addressing a new argument would have to do so “deprived of the trial court’s perspective”: R. v. J.F., 2022 SCC 17, para 40.

[74] The discretion to hear a new argument on appeal has been described as one to be exercised only in “exceptional circumstances”: J.F., at para. 40. The burden is on the party seeking to raise a new issue on appeal to satisfy the appellate court that the necessary evidence is before the court as fully as if the issue had been raised below: Kaiman, at para. 18.

[75] The Divisional Court exercised its discretion to refuse to hear the new issue. Doing so was not inconsistent with the Board’s jurisdiction or the jurisdiction of the Divisional Court on appeal. The Board did not order the General Manager to ignore s. 28.4(2) of the regulations. It decided the case before it on the issues raised, and the General Manager did not raise that section of the regulations. The Divisional Court did not exceed its jurisdiction. It simply dismissed the appeal, declining to give effect to the arguments properly raised by the General Manager and – germane to this point – exercising its well-established discretion to decline to hear a new argument.

[76] A discretionary decision of a lower court is reviewed on a deferential standard. It will only be interfered with where the lower court misdirected itself, came to a decision that is so clearly wrong as to amount to an injustice, or gave no or insufficient weight to relevant considerations: Penner v. Niagara (Regional Police Services), 2013 SCC 19, para 27.

[77] I see no reversible error in the exercise of discretion by the Divisional Court. It was entitled to conclude that the General Manager had not established the type of circumstances that would permit the new issue to be raised.

[78] The General Manager had the opportunity to raise the issue before the Board but did not do so. It did not adequately explain why it was not raised. Nor did the General Manager establish that all the facts necessary to address the new issue on appeal were in the record as if the issue had been raised initially. The General Manager’s submission that the necessary evidence to decide the issue was in the record was based on conflating the “experimental” provision under s. 24(1) and the prerequisite for out-of-country coverage under s. 28.4, an approach the Divisional Court rejected. It would have been unfair to spring a new issue on K.S. at the hearing of the appeal in circumstances in which evidence might have been led or challenged differently below if the issue was raised at the Board.

[79] I would therefore reject this ground of appeal.

D. Disposition

[80] I would dismiss the appeal.

[81] As agreed by the parties, I would order the General Manager to pay costs to K.S. in the amount of $23,250, inclusive of the costs of the appeal and the motion for leave to appeal. I would not award costs to or against the interveners.

Released: April 22, 2025

“B. Zarnett J.A.”
“I agree. Coroza J.A.”
“I agree. L. Favreau J.A.”

[1] This appeal is subject to an order prohibiting the publication of K.S.’s name and any information that could identify her including, but not limited to, her email address, phone number, address and personal identification numbers (i.e., SIN, OHIP).

[2] The correct description of this kind of procedure as agreed between the parties is gender affirming surgery. These reasons refer to it and similar surgeries as sex-reassignment surgeries or procedures because that is the terminology used in the Act and regulations.

[3] No findings were made at either level below that the vaginoplasty K.S. seeks was not accepted as appropriate in Ontario (even if it had to be performed outside Canada).