CITATION: Interlink Solutions Inc. v. Ontario (Ministry of Economic Development, Job Creation and Trade), 2022 ONSC 5865
DIVISIONAL COURT FILE NO.: 887/21
DATE: 20221017
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Swinton, Trimble and Nishikawa JJ.
BETWEEN:
Interlink Solutions Inc./Solutions Interlink Inc.
Applicant
– and –
Ontario (Ministry of Economic Development, Job Creation and Trade, and Ministry of Finance)
Respondents
Guy Roberge acting for the Applicant
Sylvia Davis, for the Respondent
HEARD at Toronto: June 30, 2022 (By videoconference)
REASONS FOR DECISION
Nishikawa J.
Overview
[1] The Applicant, Interlink Solutions Inc. (“Interlink”), brings an application for judicial review of a decision of the Respondent, the Ministry of Economic Development, Job Creation and Trade (the “Ministry”), denying it a COVID-relief related grant under the Ontario Small Business Support Grant program (the “Decision”). The grant was denied on the basis that Interlink was ineligible because it engaged in construction.
[2] Interlink submits that the Decision was unreasonable and that the Ministry denied it procedural fairness. Interlink seeks declaratory relief and orders setting aside the Decision, directing the Respondents to review the application and award Interlink a grant. Alternatively, Interlink asks the court to substitute the Decision with its own decision.
Factual Background
Pandemic-Related Shutdowns in Ontario
[3] In response to the COVID-19 pandemic, the Government of Ontario ordered three province-wide shutdowns. The first, in March 2020, was issued pursuant to the Emergency Management and Civil Protection Act, R.S.O. 1990, c. E.9. The second and third shutdowns, in December 2020 and April 2021, were ordered under the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020, S.O. 2020 c.17 (the “Reopening Act”).
[4] One of the regulations promulgated under the Reopening Act was the Rules for Areas in Shutdown Zone and at Stage 1, O. Reg. 82/20 (the “Stage 1 Regulation”).[^1] The Stage 1 Regulation detailed the restrictions imposed and stipulated in Schedule 2 which businesses could remain open during the shutdown and under what circumstances. One of the businesses that could remain open, at s. 43, was “construction activities or projects and related services.” Between December 26, 2020 and April 17, 2021, s. 43 was amended twice to specify particular types of construction activities or projects and related services that were permitted to continue.
The Applicant’s Business
[5] Interlink is incorporated under the Canada Business Corporations Act, R.S.C. 1985, c. C-44, and carries out business in Ontario under the registered name “The Pro Handyman.” Interlink’s President, sole director, and sole shareholder is Guy Roberge.
[6] Interlink has an agreement with Home Depot Canada to sell and install storm doors (on display at and available exclusively from the chain), interior doors, and exterior doors in the Greater Toronto Area to clients referred by Home Depot. Mr. Roberge states that the temporary closure of Home Depot stores during the pandemic led to a collapse in demand for his services.
[7] Interlink states that on January 14, 2021, it “interrupted its commercial activities” in response to both the shutdown and the version of s. 43 of Schedule 2 that took effect that day.
Ontario Small Business Support Grant Program
[8] The Ontario Small Business Support Grant program (the “Program”) offered financial support to eligible small businesses who were required to close or significantly restrict their services because of the December 2020 shutdown. The Program was approved by the Treasury Board on December 21, 2020. The Ministry of Economic Development, Job Creation and Trade (“the Ministry”) was assigned to administer the Program.
[9] The Program was established by Grant Program – Section 11.4.1 of the Act, O. Reg. 47/21 (the “Grant Regulation”), promulgated under the Ministry of Revenue Act, R.S.O. 1990, c. M.33 (the “Act”). Subsections 11.4.1(1) and (6) of that Act provide for the Minister to make regulations specifying programs established by the government to “provide financial assistance by way of grant to any businesses in connection” with the coronavirus outbreak.
[10] The entirety of the Grant Regulation states as follows:
(1) The program specified for the purposes of section 11.4.1 of the Act is the program consisting of the following:
Main Street Relief Grant for Personal Protective Equipment (PPE).
Property Tax Rebate Grant.
Energy Cost Rebate Grant.
Ontario Small Business Support Grant.
Ontario Tourism and Travel Small Business Support Grant.
Winery Agri-Tourism COVID-19 Relief Initiative.
Ontario Business Costs Rebate Program.
Ontario COVID-19 Small Business Relief Grant.
[11] The Program’s parameters were set out in a 10-page program guide (the “Guide”) co-authored by the Ministry and the Ministry of Finance. Applications were accepted online from January 15 to April 7, 2021. Approximately 208,000 applications were reviewed and, of these, over 110,000 approved. In total, approximately $3 billion in funding was disbursed.
[12] The Guide addressed certain aspects of the Program. According to the January 2021 version of the Guide, applicants were required to:
• have experienced a minimum 20% decline in revenue;
• have been required to “close or significantly restrict services due to the provincewide shutdown effective 12:01 a.m. on December 26, 2020”; and
• have 99 or fewer employees.
[13] The Guide listed types of businesses that were “required to close or significantly restrict services due to the Provincewide Shutdown” that were eligible to apply for funding, including retail and hardware stores required to close for in-person shopping. The Guide also indicated that “[b]usinesses that are not eligible include those” that had been required to close prior to the introduction of public health measures on October 10, 2020; essential businesses that could operate with capacity restrictions; government-owned businesses; and businesses owned by a person holding federal or provincial office.
[14] The Guide further stipulated that applicants could expect to receive funding within 10 business days of submitting a complete application that did not require further review. It also stated that there was “no guarantee” that a complete and otherwise qualified application would be approved for funding since the Program was “a discretionary and non-entitlement program.”
[15] The Guide was modified in March 2021. Among other changes, the March 2021 version of the Guide specified the types of business that were ineligible, with examples for each category of ineligible business. It also explicitly included the category of “[o]ther businesses that were not required to close or significantly restrict services due to the Provincewide Shutdown” and gave examples, including “[c]onstruction services, including all construction subtrades like flooring, painting, carpeting, and tiling.”
[16] Eligible business could receive between $10,000 to $20,000 to help with expected revenue losses. In March 2021, the amount was increased to $20,000 to $40,000.
Interlink’s Application to the Program – First and Second Reviews
[17] Interlink completed an application to the Program on February 21, 2021.
[18] On March 10, 2021, Ministry staff emailed Mr. Roberge asking him to describe Interlink’s business activity in 10 words or less and to provide accounting records. On March 15, 2021, Mr. Roberge replied, describing Interlink’s business activity as the “sale and installation of interior and exterior doors and storm doors; installation of safety grab bar.” [Translation from French].
[19] On April 13, 2021, Mr. Roberge emailed Ministry staff to follow up on his application, which he said showed on the government’s website as “not eligible.” He also provided a longer description of his business that included the following:
Interlink Solutions Inc… [is] a service company providing replacement and installation services of interior doors, exterior doors and storm doors, in addition to a specialized service for installing safety supports (“grab bars”) conforming to CSA standards in existing bathrooms… The company also offers carpentry services for the restoration and / or replacement of ornamental pieces on ancestral or heritage properties.
[20] Mr. Roberge provided additional details about Interlink’s door installation services. He also indicated that the temporary closure of Home Depot retail stores led to a “complete collapse” in door installation and replacement orders.
[21] On May 3, 2021, Mr. Roberge emailed Ministry staff to follow up on Interlink’s application. On May 18, 2021, Ministry staff informed Mr. Roberge by email that Interlink’s application was declined and that it was “unable to grant your business funding this time.” The e-mail did not provide any reasons. A note saved to the file on May 17, 2021 indicated that “Tb Rejected as the Nature of business is not within scope. Rejection e-mail sent[.]” On the same day, Mr. Roberge replied asking for reasons and requesting that Ministry staff review the additional information he had provided.
The Decision
[22] On June 7, 2021, Ministry staff wrote to Mr. Roberge, informing him that they were “unable to grant [his] business funding at this time”. The e-mail indicated that “[b]ased on the grant criteria and information you have provided, the business you own is not part of the list of eligible businesses for this grant. Types of businesses that are not eligible include – but are not limited – to the following: Construction (i.e. renovations, installations, home builders, electricians, HVAC, tiling, flooring, painting, carpenters[.]”
Third Review of Interlink’s Application
[23] On June 15, 2021, Mr. Roberge wrote to Ministry staff objecting to the Decision and asking for it to be reconsidered. In his email he stated that:
[Interlink] sells doors and provides replacement and installation services exclusively for the residential market and on behalf of a big box store (Home-Depot Canada) as part of the Home Services department of that brand. The business is not providing service in the construction industry (i.e., new buildings, houses, industrial facilities, etc.), nor is it a member (or me personally) of any trade union, construction association, guild or any other construction related organization. The company is indeed a retail business providing “at-home” services.
[24] Mr. Roberge went on to indicate that Interlink’s business was not “essential” under the government’s orders and that, in any event, the temporary closure of Home Depot stores led to a “complete collapse” of his business revenue. He also indicated that his company “is a retailer, sells doors and provides service at home… on behalf of The Home-Depot Canada.”
[25] On July 30, 2021, at Mr. Roberge’s request, ServiceOntario sent a request to Ministry staff for a reconsideration of the Decision. On this third and final review of Interlink’s application, two separate assessors and a third final assessor from a specialized team concluded, after reviewing the application and correspondence, that Interlink was a construction business and therefore ineligible for a grant.
[26] On August 3, 2021, Ministry staff wrote to Mr. Roberge, referring him to their June 7, 2021 email and stating that no appeals process was available.
[27] On October 18, 2021, Mr. Roberge received a message from staff in the office of his Member of Provincial Parliament (whom he had contacted for assistance) that they received a message from the Associate Minister of Small Business and Red Tape Reduction that Mr. Roberge was sent an email “stating that business is not within scope as his description describes it as door installation and Carpentry, falling under construction as outlined in the application guide.” (Emphasis in original.)
Issues
[28] Interlink’s application for judicial review raises the following issues:
(a) Was the Decision denying Interlink a grant reasonable?
(b) Was Interlink denied procedural fairness?
[29] Interlink’s position that the Decision was unreasonable raises the following subsidiary issues:
(i) Was the Ministry required to apply the Stage 1 Regulation, O. Reg. 82/20, to assess Interlink’s eligibility for a grant under the Program?
(ii) Did the Ministry contravene s. 11.4.1 of the Ministry of Revenue Act by denying Interlink’s application for a grant?
(iii) Was the Ministry’s characterization of Interlink’s business as construction unreasonable?
Analysis
Jurisdiction and Standard of Review
[30] This court has jurisdiction to hear the application pursuant to ss. 2(1) and 6(1) of the Judicial Review Procedure Act, R.S.O. 1990, c. J.1 (“JRPA”).
[31] While Interlink submits that there is an arguable case that correctness applies, the parties agree that, pursuant to Canada (Minister of Immigration and Citizenship) v. Vavilov, 2019 SCC 65, at paras. 16-17, the applicable standard of review is reasonableness. The application does not raise a general question of law of central importance to the legal system as a whole or questions related to the jurisdictional boundaries between two or more administrative bodies. The reasonableness standard applies.
[32] A reasonable decision is “one that is based on an internally coherent and rational chain of analysis and that is justified in relation to the facts and law that constrain the decision maker”: Vavilov, at para. 85. The reasonableness standard requires that a reviewing court defer to such a decision.
[33] No standard of review analysis is required on matters of procedural fairness, which are determined with reference to the non-exhaustive list of considerations set out in Baker v. Canada (Minister of Citizenship and Immigration), 2019 SCC 65, at para. 23.
Was the Decision Reasonable?
Were the Respondents required to apply the Stage 1 Regulation to assess Interlink’s eligibility for a grant under the Program?
[34] Interlink submits that the Decision was unreasonable because the Ministry failed to apply the version of the Stage 1 Regulation that was in force when Interlink submitted its application to the Program. Interlink takes the position that the Respondents were bound to apply the Stage 1 Regulation, as amended on January 14, 2021, in determining which businesses should be eligible for a grant under the program. Pursuant s. 43 of the amended Stage 1 Regulation, the list of construction businesses that were able to remain open was further restricted. Interlink submits that rather than applying the version of the Stage 1 Regulation that entered into force in January 2021, the Ministry applied a previous version of the Regulation.
[35] Interlink’s submission is incorrect for the following reasons. The Stage 1 Regulation related to the shutdown generally, and was promulgated under the Reopening Act. By contrast, the Program was established under the Program Regulation, O. Reg. 47/21, which was promulgated under the Ministry of Revenue Act. The Program Regulation does not reference the Stage 1 Regulation. The Stage 1 Regulation does not reference the Program. As a result, the Program is not governed by the Stage 1 Regulation. The Respondents are required to administer the Program in accordance with the Act and the Program Regulation. It was not contrary to the Act or the Program Regulation to exclude construction-related business from eligibility for the Program.
[36] Nothing in the Act required the Respondents to administer the Program in accordance with the Stage 1 Regulation. Various construction-related activities were permitted to operate throughout the shutdown, and there was nothing improper about excluding them from the Program. Moreover, the Stage 1 Regulation was amended multiple times over the course of the pandemic. It would have been impracticable for the Program eligibility requirements to be amended repeatedly to be in line with the Stage 1 Regulation, when one of the goals of the Program was to provide financial assistance in an efficient manner.
[37] In any event, even if the Respondents were required to adhere to the Stage 1 Regulation in administering the Program, when Interlink applied for a grant in February 2021, the applicable version of the Regulation permitted the type of work performed by Interlink. Under Schedule 2 “Businesses That May Open,” s. 35 listed “[m]aintenance, repair and property management services that manage and maintain the safety, security, sanitation and operation of institutional, commercial, industrial and residential properties and buildings”: O. Reg. 82/20, s. 35.
[38] The Respondents were not required to adhere to the Stage 1 Regulation in assessing Interlink’s application for a grant. The fact that the Respondents did not do so is thus not a basis for finding the Decision unreasonable.
Did the Respondents contravene the Ministry of Revenue Act by denying Interlink’s application for a grant under the Program?
[39] Subsection 11.4.1(1) of the Act states as follows:
(1) This section applies to a program in the regulations that is established by the Government of Ontario to provide financial assistance by way of grant to any businesses in connection with the outbreak of the coronavirus (COVID-19).
[40] Interlink relies on the use of the words “any business” in the above provision to argue that any business, including Interlink, should be eligible for a grant. Alternatively, Interlink submits that the Ministry failed to give this provision and the Program Regulation a fair, large and liberal interpretation to fulfill the objective of providing financial assistance to “any businesses” affected by the COVID-19 pandemic.
[41] This is not a correct reading of the provision. Subsection 11.4.1(1) describes the scope of application of the provision. The remaining subsections address the gathering and return of information, offences, overpayment, and the making of regulations in relation to financial assistance programs. The provision applies to all grant programs providing financial assistance to any businesses in connection with the COVID-19 pandemic. The term “any business” is used to indicate that the provision applies broadly. It does not create an obligation on the part of the government to extend grants to any or all businesses.
[42] It is also worth noting that the Program Regulation does not stipulate any criteria or parameters for businesses to be eligible for grants. The Minister thus retains full discretion to establish the parameters and to determine eligibility. Accordingly, s. 11.4.1(1) can not be interpreted as constraining the Minister’s discretion to determine the parameters of the Program.
[43] To the extent that Interlink relies on s. 11.4.1(1) to challenge the decision to exclude construction services from eligibility for grants under the Program, this was a reasonable exercise of the government’s spending powers and was not contrary to the applicable legislation. The Respondents submit that construction was excluded because it was anticipated that the shutdown would not, for the most part, include construction. The decision to limit eligibility to certain businesses is a core policy decision regarding the allocation of public funds. This court has held that it is not up to the courts to set funding priorities for the government or to tell the government how to spend public funds: Tesla Motors Canada ULC v. Ontario (Ministry of Transportation), 2018 ONSC 5062, at para. 34.
[44] Courts will only review the exercise of executive spending decisions in narrow circumstances, such as where the decision was made for improper purposes or where the exercise of executive spending power conflicts with existing legislation: Tesla, at para. 50; Canadian Federation of Students v. Ontario (Minister of Training, Colleges and Universities), 2021 ONCA 553, at para. 29. Neither exception applies here.
[45] Accordingly, the Respondents did not contravene s. 11.4.1(1) of the Act in denying Interlink’s application for funding.
Was it unreasonable to characterize Interlink’s business as construction?
[46] Interlink’s principal submission is that the Ministry’s finding that it was engaged in construction was unreasonable because it does not build or construct anything, but only sells and installs storm doors. Interlink submits that it should have been eligible for a grant because its activities are more properly described as the “retail sale of finished goods performed in-person at the residence of clients” which would put its business in the categories of retail and hardware stores that were required to close for in-person shopping.
[47] In my view, the Ministry’s finding that Interlink engaged in construction was reasonable. The Guide, as amended on March 12, 2021, made specific reference to “other businesses that were not required to close or significantly restrict services due to the Provincewide Shutdown. For example: Construction services, including all construction subtrades like flooring, painting, carpeting, and tiling[.]” Those activities are similar in nature to Interlink’s business in that they involve the installation of particular products. Moreover, while Interlink argues that it does not build anything, its own description included carpentry services for the “restoration and/or replacement of ornamental pieces on ancestral or heritage properties.”
[48] In addition, while I have found that the Stage 1 Regulation did not apply to Interlink’s grant application, because Interlink places heavy reliance on that regulation, I further note that its provisions do not assist Interlink. Section 43 refers not only to construction, but also to “construction activities or projects and related services, including land surveying and demolition services” as businesses that could continue to operate.
[49] Even if Interlink is not engaged in construction services, it would not be entitled to a grant because its business does not fall within the parameters of the eligibility list provided in the Guide. Because Interlink has no physical location, its business cannot be considered retail, for in-person shopping. Mr. Roberge did not meet with customers at Home Depot locations; rather, he would go to their homes to install the doors.
[50] Interlink draws a distinction between construction services, which take place in uninhabited houses, and Interlink’s services, which take place in customers’ residences. While Mr. Roberge alleges that he could not conduct his business during the shutdown, because it required entry into customers’ homes, s. 2(5) of Schedule 1 of the Step 1 Regulation allowed for work in a residential dwelling, provided that social distancing and masking requirements were followed. Subsection 2(b) also permitted retail sales in a residential dwelling, so long as the person in charge of the business ensured that proper social distancing and masking were maintained. Subsection 10.1(1) specifically provided that businesses not covered by ss. 2 to 10 of the Step 1 Regulation could remain open if sales were made using an alternative method that would not require patrons to enter the indoor area of the business.
[51] In summary, the specific grounds raised by Interlink to support its position that the Decision was unreasonable fail: the Step 1 Regulation did not apply to applications to the Grant Program; the Respondents did not contravene s. 11.4.1(1) of the Act; and the finding that Interlink was engaged in construction was not unreasonable.
[52] Accordingly, the Decision contains an internally coherent and rational chain of analysis and is justified in relation to the facts and law that constrained the Respondents and is therefore reasonable.
Was Interlink Denied Procedural Fairness?
[53] Interlink submits that it was denied procedural fairness because the Ministry did not provide adequate reasons for the Decision. Interlink further submits that the Respondents breached the duty of procedural fairness because they would not reveal the identities of the assessors who reviewed his application, giving rise to the possibility of bias or conflict of interest.
[54] In determining the sufficiency of reasons, the court considers whether the reasons exhibit “an internally coherent and rational chain of analysis” and “justification, transparency and intelligibility”: Vavilov, at paras. 85-86. As this court noted in Unifor Local 200 v. Nemak, “Vavilov has not supplanted the principles stated in Newfoundland Nurses that reasons are to be read generously and are not to be subjected to an atomistic search for minor errors”: 2020 ONSC 5944, at para. 20.
[55] In this case, Interlink has failed to demonstrate that there are “sufficiently serious shortcomings in the decision such that it cannot be said to exhibit the requisite degree of justification, intelligibility and transparency”: Vavilov, at para. 70. The June 7, 2021 email denying Interlink’s application clearly stated the basis on which the application was denied. Interlink was ineligible because its business “is not part of the list of eligible businesses for this grant. Types of businesses that are not eligible include – but are not limited – to the following: Construction (i.e. renovations, installations, home builders, electricians, HVAC, tiling, flooring, painting, carpenters)[.]” Interlink was denied funding because its business was not on the list of eligible businesses. The email gave examples of construction-related businesses that are considered ineligible. In addition, Mr. Roberge was advised that there were other potential programs available for small businesses.
[56] The June 7, 2021 email was more than sufficient to meet the duty to give adequate reasons. The Ministry received hundreds of thousands of applications, all of which had to be determined in a timely manner. It would be unduly burdensome to impose a requirement to give more detailed reasons than those that were provided.
[57] On the second ground, I find that the Respondents’ failure to reveal the identities of the individuals who reviewed Interlink’s application is not a breach of procedural fairness. Where courts have required the disclosure of a decision-maker’s identity, it has been in the context of a legal duty to provide a hearing: Wah Shing Television Ltd. v. Canadian Radio-Television & Telecommunications Commission, 1984 5339 (FC), [1984] 2 F.C. 381, F.C.J. No. 161, at para. 2. In this case, the decision at issue is a grant application based on the review of a paper record, with clear eligibility parameters. The identity of the assessors is of little significance.
[58] Moreover, in this case, the Respondents have explained that grant assessors’ identities are not revealed to protect their safety and well-being. The decision not to reveal their identities was made based on past experience, where Ministry staff were subject to abusive and aggressive behaviour by applicants.
[59] Finally, a presumption of impartiality applies to administrative decision-makers, and cogent evidence is required to displace the presumption: Ellis-Don Ltd. v. Ontario, 2001 SCC 4, at para. 107; Zarghami v. Canada, 2006 FC 151, at para. 29. Interlink’s application was reviewed by four different assessors. It is unlikely that all four assessors were biased against Interlink. Moreover, Interlink only suggests a possibility of bias, but has provided no evidence, cogent or otherwise, that would support the existence of bias or partiality on the part of the assessors.
[60] Interlink was not denied procedural fairness in the assessment of its application for a grant under the Program. The procedural fairness grounds for the application fail.
Conclusion
[61] The Decision denying Interlink a grant under the Program was reasonable. No breach of procedural fairness took place. Accordingly, the application for judicial review is dismissed.
[62] The Respondents sought no costs if they were successful. No costs are ordered.
Nishikawa J.
I agree _______________________________
Swinton J.
I agree _______________________________
Trimble J.
Released: October 17, 2022
CITATION: Interlink Solutions Inc. v. Ontario (Ministry of Economic Development, Job Creation and Trade), 2022 ONSC 5865
DIVISIONAL COURT FILE NO.: 887/21
DATE: 20221017
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
Swinton, Trimble and Nishikawa JJ.
BETWEEN:
Interlink Systems Inc./Solutions Interlink Inc.
Applicant
- and –
Ontario (Ministry of Economic Development, Job Creation and Trade and Ministry of Finance)
Respondents
REASONS FOR JUDGMENT
Nishikawa J.
Released: October 17, 2022
[^1]: Unless otherwise stated, all references to the Stage 1 Regulation are to the version that was in force when Interlink applied to the program on February 21, 2021.