CITATION: Adams v. Aamjiwnaang First Nation, 2022 ONSC 6831
DIVISIONAL COURT FILE NOS.: 583/21 and 235/22
DATE: 20221206
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
D.L. Corbett, Nishikawa and O’Brien JJ
BETWEEN:
Cassie Jean Veronica Adams
Appellant
– and –
Aamjiwnaang First Nation
Respondent
N. Shelsen and J. Orkin, for the Applicant
S. Robertson, for the Respondent
HEARD at Toronto by videoconference:
September 15, 2022
reasons for decision
nishikawa and O’BRIEN Jj.
Overview
[1] Ms. Adams (the “Applicant”), a member of Aamjiwnaang First Nation (the “Respondent”), brings two applications for judicial review seeking to set aside decisions of Aamjiwnaang’s Band Council (“Council”). Council refused to allocate tax-exempt cigarettes (also called “unmarked” cigarettes) to Ms. Adams’ store, the Waterfront Smoke Shop. A regulation under the Tobacco Tax Act, R.S.O.1990, c. T.10 empowers Council to allocate unmarked cigarettes to retailers operating on its reserve annually: O.Reg. 649/93, Sales of Unmarked Cigarettes on Indian Reserves (the “Regulation”).[^1] Council’s first decision refusing unmarked cigarettes to the Applicant related to the 2021-2022 annual allocation period. The second decision related to the allocation for the following year. In both cases, Council based its refusal to allocate unmarked cigarettes to the Applicant on criminal convictions related to an unlicensed cannabis dispensary on the same property as the Applicant’s business.
[2] Council relied in its decisions on its Tobacco Allocation Distribution Policy (the “Policy”), which was developed after consultation within the community. The Policy provided that Council was entitled to revoke a retailer’s allocation of unmarked cigarettes (“quota”) if it received notice that the retailer was convicted of selling alcohol or drugs from their business.
[3] The Applicant submits that this provision of the Policy exceeded Council’s authority under the Regulation. In her submission, the regulatory scheme establishes a mandatory process for the allocation of unmarked cigarettes available for sale on reserve. Specifically, the annual quantity of unmarked cigarettes must be divided among qualifying reserve retailers according to their volume of sales to the reserve community and the off-reserve community for their own consumption. The Applicant submits when Council relied on the provision in the Policy permitting it to revoke quota because of a criminal conviction, it purported to impermissibly expand the regulatory scheme.
[4] In her written submissions, the Applicant submitted that Council’s reasons were not sufficiently justified, transparent or intelligible. The relevant Policy provision stated Council could revoke quota if a retailer was convicted of selling drugs and alcohol. As Ms. Adams herself was not convicted, she submits it was unreasonable for Council to apply this provision to revoke her quota. She also argued that Council’s decisions lacked procedural fairness.
[5] We conclude that, in applying the Regulation’s scheme for distributing unmarked cigarettes, it was reasonable for Council to revoke quota allocated to a retailer convicted of illegally selling drugs. The wording of the Regulation allows Council discretion in cancelling a particular retailer’s allocation. Further, by enlisting Council’s assistance in administering the scheme, the legislature chose to engage the band’s governing body. Band councils have a role in regulating for the wellbeing of the community under the Indian Act. The Regulation should not be interpreted as requiring the governing body of the community to allocate quota to retailers engaged in illegal operations and specifically the illegal sale of drugs and alcohol. Council’s interpretation of the Regulation is also consistent with the Regulation’s purpose of preventing the illegal sale of unmarked cigarettes.
[6] We further find Council’s application of the provision in its Policy to the convictions for sales on the property of the Applicant’s business reasonable, even if the Applicant herself has no criminal convictions. Finally, in our view, while the minimal procedural fairness requirements that would apply were not followed, the substantive reasonableness of the decision is not undermined and, in the circumstances, a fair process would not have led to a different outcome. For the reasons further detailed below, the applications are dismissed.
Issues
[7] The Applicant’s two applications for judicial review raise the following issues:
(a) Should the Applicant be granted an extension of time to file the first application for judicial review?
(b) Should the Court strike certain portions of the affidavit of Chief Plain?
(c) Were the decisions unreasonable because they exceeded Council’s authority under the Regulation?
(d) Were the decisions unreasonable in that they were not sufficiently justified, transparent or intelligible?
(e) Was the Applicant denied procedural fairness?
Analysis
Preliminary Issues
[8] At the outset of the hearing, the court heard two motions brought by the Applicant. The first motion was to extend the time for filing the first application for judicial review (the “First Application”). The second motion was to strike certain paragraphs and exhibits from the affidavit of Chief Plain, submitted on behalf of the Respondent. The Applicant took the position that the impugned portions of the affidavit were improper attempts to supplement the record with material that was not before Council when it made the decisions.
Should the Applicant Be Granted an Extension of Time to File the First Application?
[9] The quotas for unmarked cigarettes for 2021-2022 were allocated at a Council meeting on March 29, 2021. The Applicant was not advised of the decision but realized that she had not been allocated any quota. After making inquiries, on May 13, 2021, the Applicant was advised of Council’s decision not to allocate her any quota. She received Council’s reasons some time after May 24, 2021. The Applicant did not commence the First Application until July 22, 2021, approximately one month after the 30-day timeline under the Judicial Review Procedure Act, R.S.O. 1990, c. J.1 (the “JRPA”).
[10] The Respondent takes the position that the time for filing the First Application should not be extended because it is moot. Because quota was allocated for 2021-2022, and that time period has passed, the Applicant could not now be allocated quota for 2021-2022. The Respondent further submits that granting an extension for the First Application would prejudice retailers who had been allocated quota for 2021-2022. At the hearing, however, the Respondent conceded that no substantial prejudice would arise.
[11] Under s. 5(1) of the JRPA, an application for judicial review must be filed within 30 days of the decision of which review is sought. Under s. 5(2), the court has discretion to extend the time to file an application for judicial review if it is satisfied that there are apparent grounds for relief and that no substantial prejudice or hardship will result to any person affected by the delay.
[12] Because an extension under s. 5(2) is at the court’s discretion, the court may take into consideration factors beyond those specified in s. 5(2). On motions to extend the time for filing an application for judicial review, this court generally takes into consideration the length of the delay and the explanation for the delay: Unifor and its Local 303 v. Scepter Canada Inc., 2022 ONSC 5683, 2022 CarswellOnt 14445, at paras. 17-18.
[13] In this case, a consideration of the relevant factors weighs in favour of extending the time to file the First Application. Although we did not ultimately agree with the Applicant’s position on these applications, given our detailed treatment of her central argument in these reasons, it will be apparent that the First Application raises reasonable grounds for review and apparent grounds for relief.
[14] An extension of time would cause little or no prejudice to the Respondent, who did not submit any evidence on the motion. The second application for judicial review, regarding the quota allocation for 2022-2023 (the “Second Application”), is related to the First Application in that it raises the same legal and factual issues. To this extent, we also find that the First Application is not moot. The allocation of quota in a given year is dependant on the retailer’s sales for the previous year. Therefore, in the event that the Applicant succeeds on the Second Application, the issue of whether she was improperly denied quota in 2021-2022 and her potential entitlement are relevant to the quota she would receive for 2022-2023. While it may not be possible to re-allocate quota for 2021-22, the Applicant’s entitlement would be relevant to the Second Application.
[15] Because the quota is allocated each year, it is also likely that whenever a judicial review application is brought, assuming it takes more than one year to reach the hearing, it would inevitably become moot by the time it is heard.
[16] Moreover, the Applicant’s delay in filing was less than one month. The Applicant took prompt steps to retain counsel and challenge the decision: See Sobczyk v. Ontario, 2022 ONSC 88, 160 O.R. (3d) 551. Specifically, on June 19, 2021, the Applicant’s counsel sought reconsideration of the decision. On June 28, 2021, Council advised the Applicant that there was no right to appeal the decision. The Applicant then retained new counsel and, on July 16, 2021, was advised that she would have to bring an application for judicial review. The First Application was served on July 22, 2021.
[17] Accordingly, the motion to extend the time for filing the First Application is granted.
Should the Court Strike Certain Portions of the Affidavit of Chief Plain?
[18] The Applicant seeks to strike certain paragraphs and exhibits from the affidavit of Chief Plain. She submits that the Respondent is improperly seeking to supplement the evidence on the record to include material that was not before Council when it made the decisions.
[19] Specifically, the Applicant objects to the following: (i) a reference to safety concerns arising from the operation of an unlicensed cannabis dispensary on the same property as the Applicant’s smoke shop (the “Premises”); (ii) allegations and legal argument regarding ownership by non-band members of the businesses operating on the Premises; and (iii) allegations that the individuals who were criminally convicted were employed at the dispensary. The Applicant also objects to two exhibits attached to Chief Plain’s affidavit: (i) an article from the Sarnia Observer newspaper regarding the criminal convictions and (ii) the June 19, 2021 letter from the Applicant’s previous counsel.
[20] The Respondent submits that the portions of Chief Plain’s affidavit to which the Applicant objects are intended to provide context for the decisions. The Respondent submits that while the newspaper article was not before Council when the decisions were made, Chief Plain would have been aware of it at the time. The Respondent consented to striking the June 19, 2021 letter.
[21] On an application for judicial review, the record is generally restricted to the evidence that was before the decision maker when the decision was rendered: Re Keeprite Workers’ Independent Union et al. and Keeprite Products Ltd., 29 O.R. (2d) 413 (“Keeprite”). There are certain exceptions, for example, to provide relevant background information, to show a breach of procedural fairness that cannot be proved by reference to the record and to show an absence of evidence to support a finding of fact on an essential point: Keeprite, at 517; Scott v. Toronto (City), 2021 ONSC 858, 2021 CarswellOnt1444, at paras. 19-20. This court has found that “[w]hat was on the mind of the decision maker but not articulated at the time cannot be relevant to this exercise”: Guelph and Area Right to Life v. Guelph (City), 2022 ONSC 43, 150 O.R. (3d) 574, at para. 74.
[22] In our view, the paragraphs regarding safety concerns are “non-argumentative orienting statements that assist the reviewing court in understanding the history and nature of the case that was before the administrative decision-maker”: Bernard v. Canada Revenue Agency, 2015 FCA 263, [2015] F.C.J. No. 1396, at para. 21. Moreover, given that the Applicant challenges the Policy provision at issue as outside the scope of the Regulation, some context and background to the Policy is both relevant and helpful to this court. We also accept that the paragraphs relating to the ownership of property on the reserve were included in this vein. Ultimately, this additional information is of little significance to the merits of the applications.
[23] In respect of the newspaper article, the information contained therein was known to Council when the decisions were made, as evidenced by the briefing note to Council. Similarly, there is no dispute that two non-band members were criminally convicted for unlicensed cannabis sales on the Premises. The inclusion of two paragraphs in the affidavit referring to this, and the newspaper article, were likely unnecessary but do not improperly supplement the record.
[24] Accordingly, the motion to strike certain paragraphs and exhibits from the affidavit of Chief Plain is dismissed. The June 19, 2021 letter is struck from the record on consent.
Were the decisions unreasonable because they exceeded Council’s authority under the Regulation?
[25] The Applicant’s central submission is that Council’s decisions were outside the scope of the Regulation and therefore exceeded its authority. There is no dispute that the standard of review of Council’s decisions is reasonableness. The Applicant submits that the decisions are unreasonable for their failure to adhere to the Regulation’s mandatory process for the allocation of quota on reserve.
[26] In our view, the Regulation should be read more broadly and purposively than suggested by the Applicant. On the wording of the Regulation, the band council is afforded discretion in its cancellation of quota. As further detailed below, the scope of that discretion is defined by the purpose of the Regulation and the retail agreements entered into pursuant to the Regulation. It also accounts for Council’s role as a governing body on the reserve. In this context, in our view, Council’s decisions were reasonable.
[27] According to its reasons, which were set out in a letter to the Applicant,[^2] Council found that it was entitled to vary the allocation previously made to on-reserve retailers and was entitled to cancel an on-reserve retailer’s allocation. The letter stated that Council is entitled to revoke quota in accordance with its Policy if “Council receives notice that the retailer is convicted of selling alcohol or drugs from their business.” The central question before this Court was whether it was reasonable for Council to interpret the Regulation as authorizing it to cancel (or using its term “revoke”) quota because of the illegal sale of drugs on the Premises.
[28] In determining whether a decision is reasonable, a reviewing court “asks whether the decision bears the hallmarks of reasonableness – justification, transparency and intelligibility – and whether it is justified in relation to the relevant factual and legal constraints that bear on the decision”: Canada (Minister of Citizenship and Immigration v. Vavilov, 2019 SCC 65, [2019] 4 S.C.R. 653, at para. 99 (“Vavilov”). In this case, the Applicant’s submissions were primarily focused on the legal constraints in issue – that is, whether the decisions were reasonable in the context of the wording of the Regulation.
Purpose and Context of the Regulation
[29] On the wording of the Regulation read as a whole and in the context of its purpose, we find that Council is afforded discretion to cancel a particular retailer’s allocation of quota because of a conviction on their property for the illegal sale of drugs or alcohol.
[30] A court interpreting a statutory provision does so by applying the “modern principle” of statutory interpretation. That is, the words of the statute must be read “‘in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament’”: Vavilov, at para. 117, quoting from Rizzo & Rizzo Shoes Ltd. (Re), 1998 837 (SCC), [1998] 1 S.C.R. 27, at para. 21. Whether an administrative decision maker’s interpretation is justified “will depend on the context, including the language chosen by the legislature in describing the limits and contours of the decision maker’s authority”: Vavilov, at para. 110.
[31] In interpreting the Regulation, it is helpful first to understand the statutory context of tax exemptions for “Indians,” as defined in the Indian Act. Specifically, s. 87 of the Indian Act states that “[n]otwithstanding any other Act of the Parliament of Canada or any Act of the legislature of a province…the personal property of an Indian or a band situated on a reserve” is exempt from taxation. That personal property includes cigarettes. The Regulation therefore represents the system Ontario has devised under the Tobacco Tax Act to exempt “Indians” from the tobacco tax it otherwise imposes.
[32] In devising this system, Ontario has in part aimed to ensure the legality of the sale of unmarked cigarettes. It has done this by entering into agreements and enlisting the assistance of band councils, which are the governing bodies on reserves. Through “retail agreements,” band councils administer a system of allocating unmarked cigarettes in a manner intended to prevent their illegal sale.
[33] It is common ground that the Regulation was promulgated in response to the decision of this Court in Bomberry v. Ontario (Minister of Revenue) (1989), 1989 4300 (ON SC), 70 O.R. (2d) 662 (Div. Ct.). In that case, Ontario implemented a quota system not unlike the system set out in the Regulation, but at that time without proper regulatory authority. This Court noted that, before the quota system, “[i]llicit sales of tax-free tobacco for resale to non-Indians off reserve created a very serious problem”: Ibid, at 666. As the Court found the system was unauthorized by either the Tobacco Tax Act or its regulations, Ontario subsequently promulgated the Regulation.
[34] In this context, the purposes of the Regulation, as set out in s. 2(1), are in part to prevent the illegal sale of unmarked cigarettes. Subsection 2(1) states that the purpose of the Regulation is:
(a) To ensure that there is a sufficient quantity of unmarked cigarettes available for purchase on a reserve by adult members of a band for their own consumption; and
(b) To prevent the purchase of excess quantities of unmarked cigarettes that could be resold to non-Indians.
[35] Under the Regulation, the Minister of Finance can enter into a “retail agreement” with the band council. The definition of “retail agreement” in s. 1 of the Regulation specifically provides that the band council is expected under such an agreement to monitor the sale of unmarked cigarettes and ensure that sales are not made to non-Indians.
[36] In other words, both the Regulation and the retail agreement are focused in part on preventing the illegal sale of unmarked cigarettes. Indeed, under the Regulation, a band council stands to lose a retail agreement in certain circumstances where a reserve retailer has sold unmarked cigarettes to non-Indians. Section 8 authorizes the Minister to investigate complaints to that effect. If the Minister concludes the retailer has sold to non-Indians, the Minister may advise the band council of that finding. If the band council does not promptly transfer the unpurchased portion of the allocation to another reserve retailer, the Minister may suspend or cancel the agreement. Therefore, the band council is expected to prevent the illegal sale of unmarked cigarettes and to be attentive to any conclusion that illegal sales have occurred.
[37] It is also important that the regulatory scheme specifically enlists the assistance of the band council in allocating unmarked cigarettes. The band council’s role in the scheme is first set out in the Tobacco Tax Act. That Act permits the Minister to engage the band council in administering the allocation of unmarked cigarettes. Section 13.5 authorizes the Minister to enter into arrangements or agreements with a band council as needed for the administration and enforcement of the Act, including a system for the sale of unmarked tobacco products to Indians.
[38] In choosing to engage with the band council, the legislature has enlisted the involvement of the governing body of the reserve community. Pursuant to s. 1(1) of the Tobacco Tax Act, a “council of the band” is as defined in the Indian Act. Under the Indian Act, the band council is elected or chosen to govern the community. For example, pursuant to s. 81 of the Indian Act, the band council is empowered to make by-laws on a range of topics affecting the community, such as to provide for the health of residents on the reserve and for the observance of law and order. Therefore, under the Tobacco Tax Act, the legislature has chosen to engage a governing body that has authority to regulate for the community’s wellbeing.
[39] Overall, then, the regulatory scheme enlists the assistance of the governing band council to administer an allocation system intended to prevent the illegal sale of unmarked cigarettes. We apply this context to the interpretation of the Regulation below.
Applicant’s Submissions
[40] The Applicant relies on s. 4(1) of the Regulation in support of her submission that the band council is restricted to allocating quota based only on the retailer’s volume of sales. Subsection 4(1) provides:
4(1) To facilitate the availability of unmarked cigarettes for purchase by Indian consumers, a council of the band may allocate the annual quantity of unmarked cigarettes as determined under section 3 among each reserve retailer based on the volume of the retailer’s sales to the reserve community and the off-reserve community for their own consumption.
[41] The Applicant submits that because she was a reserve retailer, Council was mandated by the terms of the Regulation to allocate quota to her based on the volume of her sales.
[42] The Applicant also relies on s. 5 of the Regulation. It provides that if the band does not make allocations under s. 4(1), the Minister may do so instead. In that situation, the Regulation provides more detailed guidance as to how the Minister would go about determining the appropriate allocation. Specifically, the Minister would make inquiries to identify reserve retailers and the volume of their business. The Minister would then make allocations based on that information. Section 5 provides:
5(1) If a council of the band has not made allocations as described in subsection 4(1), the Minister may do so instead, in accordance with section 3.
(2) If the Minister makes allocations under subsection (1), the Minister shall make such inquiries as the Minister considers appropriate to determine who are reserve retailers and what is the volume of their business, and the Minister shall make the allocations based on that information.
(3) The Minister shall provide to each reserve retailer, as determined under subsection (2), an authorization to purchase an allocated amount of unmarked cigarettes from the supplier chosen by the reserve retailer.
[43] The Applicant submits that it would be illogical for the Regulation to afford the band council greater discretionary power than the Minister. Therefore, in her submission, the band council is also required to determine the reserve retailers and the volume of their business and make allocations on that basis alone.
Discussion
A. Wording of the Regulation Authorizes a Band Council to Cancel an Allocation
[44] We reject the Applicant’s interpretation given the purpose and context of the Regulation and based on our reading of the Regulation as a whole. Turning first to the wording of the Regulation, in our view, it does not limit allocating quota to the narrow process suggested by the Applicant. Instead, it grants the band council discretion to cancel a particular retailer’s quota.
[45] As Council emphasized in its reasons, s. 4(1) of the Regulation provides that the band council “may” allocate quota among retailers on the reserve, which signals a grant of discretion to Council.
[46] More importantly, the Applicant’s interpretation is not consistent with s. 6 of the Regulation. Under the Regulation, as Council noted, the band council is entitled to vary or cancel a retailer’s allocation. Specifically, s. 6(1) provides that the band council’s annual allocation to a reserve retailer applies for subsequent years until it is altered by the council. Subsection 6(3) provides that if the band council cancels a reserve retailer’s allocation and wishes to transfer it to another reserve retailer, the council may transfer only the unpurchased portion for that year. They read:
6(1) Any annual allocation made to a reserve retailer by a council of the band applies for subsequent years until altered by the council of the band.
(3) If the council cancels a reserve retailer’s allocation and wishes to transfer it to another reserve retailer, the council may transfer only the unpurchased portion for that year.
[47] In other words, the Regulation anticipates that the band council may alter or cancel a particular retailer’s allocation; however, it does not specify any criteria by which it would do so.
[48] The Applicant submits, based on her reading of “reserve retailer” in s. 1 of the Regulation and based on s. 8 of the Regulation, that the band council is limited to cancelling allocation only in two instances: (1) where a retailer no longer qualifies as a “reserve retailer,” as defined in s. 1; or (2) if the Minister receives complaints of unmarked cigarettes being sold to non-Indians as set out in s. 8. However, the Regulation does not state that these are the bases for cancellation. Nor would this be a reasonable interpretation.
[49] The definition of “retail agreement” specifically provides that the band council is expected under such an agreement to monitor the sale of unmarked cigarettes and ensure that sales are not made to non-Indians. In these circumstances, cancellation cannot be limited to the two instances suggested by the Applicant. If it were, the band council would be prevented from cancelling a retailer’s allocation after monitoring its conduct or in respect of a complaint the band council received directly. Surely, if a band council became aware from a complaint or other source of information that a retailer was illegally selling unmarked cigarettes, it would be entitled to cancel the retailer’s allocation.
[50] Therefore, on the express language of the Regulation, the band council is authorized to cancel a retailer’s allocation, without any specific limitation on the basis for such cancellation. As we explain next, given its governance role in the community, we find it reasonable for Council to have interpreted the scope of its discretion as permitting it to cancel quota based on the illegal sale of drugs or alcohol.
B. This Interpretation is Consistent with the Role of a Band Council
[51] Turning to the scope of the band council’s discretion, at a basic level, a council would require some administrative discretion to administer a quota system on reserve. The band council would be required, at a minimum, to design a system for determining each retailer’s volume of business. In this case, Council distributed a “Tobacco Allocation Distribution Notice” requiring band members who were interested in retailing quota cigarettes to submit an application to the band manager.
[52] It is possible to envisage other reasonable requirements. For example, Council’s Policy required that a retailer be registered as a business for one year before it was allocated quota. Businesses receiving quota were also required to have a permanent location and to have public protection insurance in place.
[53] In addition to these requirements, we find it reasonable for Council, given its role, to disqualify businesses engaged in the illegal sale of drugs and alcohol from receiving quota. As set out above, band councils are empowered under the Indian Act to regulate for the community’s wellbeing. This is not to say that Council here is administering the tobacco allocation scheme pursuant to a health or other by-law authorized by s. 81 of the Indian Act. The Respondent did not suggest it had such a by-law in place. Council is instead required to administer the scheme in accordance with the purposes of the Regulation.
[54] However, given its governance role, it was reasonable for Council to interpret the Regulation in a manner that understood the Ministry was not treating it simply as an expedient distributor. The legislation and Regulation specifically anticipate agreements with, and the participation of, band councils. The Ministry of Finance could have administered the scheme itself by dealing directly with individual retailers instead of by enlisting the assistance of the band’s governing body. Further, it did not enlist the band council’s assistance by directive, but by entering into mutual agreements with the band council. Having decided to enlist the band council’s involvement, the legislature and government should not be understood as mandating a system in which the band council would be required to allocate quota in a manner fundamentally inconsistent with its role in the community. The Applicant’s interpretation of the Regulation would require that Council, a body with authority to protect band members’ health and wellbeing, allocate quota to an operation illegally selling drugs or alcohol. We cannot interpret this as the legislative intent. Council reasonably interpreted the Regulation as affording it some latitude to administer the scheme in a manner consistent with its role.
C. This Interpretation is Related to the Purpose of the Regulation
[55] Further, Council’s decision to restrict the allocation of quota to retailers without convictions for the sale of drugs is broadly related to the Regulation’s purpose of preventing the illegal sale of cigarettes. The Policy provision Council relied on is directed at preventing the allocation of quota to an operation convicted of illegality in the sale of other substances -- that is, alcohol or drugs. Council is a general governing body and not a specialized enforcement body within a regulatory regime. The Policy provision is closely aligned to the Regulatory scheme’s focus on legal sales. Given Council’s role on the reserve, it was reasonable for it to interpret its authority under the Regulation as controlling the risk of illegal cigarette sales in part by revoking quota to retailers convicted of illegally selling other substances.
Were the decisions unreasonable in that they were not sufficiently justified, transparent or intelligible?
[56] The Applicant also submits that the decisions were not sufficiently justified, transparent or intelligible. Her position is that even if the Court upholds the impugned term of the Policy, that term was not reasonably applied to her situation. She submits that the Policy provision that Council relied on permitted it to revoke quota if it received notice that “the retailer” was convicted of selling alcohol or drugs from their business. In her submission “the retailer” should be interpreted to refer to her, as the individual proprietor of the smoke shop. The Applicant herself does not have any criminal convictions. The Applicant also submits that Council’s reasons do not sufficiently elucidate the ground on which it relied to justify its decision.
[57] We are not persuaded Council was only permitted to cancel quota under the Regulation if the Applicant herself had been criminally convicted. The Policy provision in issue states that “quotas may be revoked by Council, without notice, if…Council receives notice that the retailer is convicted of selling alcohol or drugs from their business.” In this case, Council noted in its reasons that the unlicensed cannabis dispensary was located on the same property listed in the Applicant’s application form for quota. Further, the Respondent provided in evidence a photo of the Applicant’s smoke shop building, which shows a small single-story building. Two painted signs take up most of the side of the building, one reading “Waterfront Smoke Shop,” the name listed on the Applicant’s application form for quota and the other, even larger, reading “Pot of Gold.” This is the name of the dispensary in connection with which two individuals were arrested for illegally selling cannabis according to local news reports. The Applicant was also known to be the only band member with possessory rights to that property under the Indian Act. Therefore, the Applicant was considered responsible for the activity on the Premises. Although Council did not reference these details in its decision, we accept that they would be common knowledge in this small community.
[58] Given that the Applicant was responsible for the Premises and was working in close quarters with an unlicensed cannabis dispensary, we consider it reasonable for Council to have interpreted the term “retailer” in the Policy to apply to her business.
[59] Further, although Council’s reasons were brief, the review of an administrative decision should not be divorced from the institutional context: Vavilov, at para. 91. Here, as discussed further below, Council was making an annual allocation decision in which it was balancing the interests of individuals against those of the community. In this context, its reasons understandably were not lengthy and detailed. In its reasons, Council referenced the purpose of the Regulation, its discretion under the Regulation and its entitlement to vary or cancel a retailer’s allocation pursuant to the Policy. Council also relied on the criminal charges laid against individuals in connection with the unlicensed cannabis dispensary on the Premises. In our view, these reasons were sufficiently justified, transparent and intelligible.
Was the Applicant denied procedural fairness?
[60] The Applicant takes the position that Council’s decisions lacked procedural fairness and ought to be quashed on that basis. The Applicant submits that Council did not disclose to her the materially adverse information on which it intended to rely or provide her with an opportunity to respond to the information before making the decisions.
[61] The Applicant raised this issue in her factum but did not press it in oral argument, and for good reason. This case stands or falls, in a practical sense, on the substantive issues raised by the Applicant. The decision below would not have been different if the alleged procedural unfairness had not happened, and no purpose would be served by sending the matter back for a fresh decision following a procedurally fair process. However, although there is no effective remedy for the alleged procedural unfairness in the circumstances of this case, we consider it important for future cases that this issue be addressed in our reasons.
[62] The content of the duty of procedural fairness is determined by examining the following factors identified by the Supreme Court of Canada in Baker v. Canada (Minister of Citizenship and Immigration), 1999 699 (SCC), [1999] 2 S.C.R. 817: the nature of the decision being made and the process followed in making it, the nature of the statutory scheme and the terms pursuant to which the decision maker operates, the importance of the decision to the individual affected, the legitimate expectations of the person challenging the decision, and the choices of procedure made by the agency itself: Vavilov, at para. 77.
[63] In this case, we find that the degree of procedural fairness owed to the Applicant in the circumstances was minimal but that Council did not meet its minimal procedural fairness obligations in this case.
[64] In Parker v. Okanagan Indian Band Council, 2010 FC 1218, 379 F.T.R. 26 (Eng.), the Federal Court held that in making allotment decisions that impact a band member’s legal rights and interests, only a limited degree of procedural fairness is required. The Federal Court reasoned that allotment decisions are policy decisions and, further, that the Indian Act does not prescribe any procedural requirements. In this case, the Regulation itself does not prescribe any specific procedural fairness requirements for the band council’s allocation of tobacco quota.
[65] In making decisions about the allocation of quota, Council must balance the interests of individuals against those of the community. Council enacted the Policy after consultation with its members to assist it in making decisions about the allocation of quota. The Policy also does not prescribe any specific steps or procedural fairness requirements.
[66] The allocation of quota among retailers is a decision that Council must make on a yearly basis. From Council’s perspective, the allocation of tobacco quota is one of many issues it must address. The decision is made by Council, as opposed to a single administrator. Retailers submit a paper application to show that they meet the requirements of the Policy. The Policy does not raise an expectation of a hearing or further opportunity to make submissions. The decision is undoubtedly of importance to those who apply for quota because it has an impact on their revenue. The impact, however, is limited to one year, because a retailer who is not allocated quota is not precluded from applying the next year.
[67] Based on the foregoing factors, we find that a minimal level of procedural fairness was required. In this case, where Council had material information that would cause it not to allocate quota to the Applicant, which was not apparent in the materials provided by Council or in the submission provided by the Applicant, Council should have advised the Applicant about this information and provided the Applicant with an opportunity to respond before making the allocation decision. This would have avoided, for example, the possibility of Council making a decision based on incorrect information and it would have given the Applicant an opportunity to provide submissions as to why she says Council’s information should not lead to a denial of quota.
[68] However, there is no suggestion on the record before us that Council’s information was incorrect. To the contrary: it was correct. The Applicant has had a full opportunity to respond to the information in the course of this application, and her response does not shed a different light on the issue.
[69] Accordingly, we find that although there was some unfairness in the process followed in this case, that unfairness does not undermine the substantive reasonableness of the decision taken or lead us to conclude that the Respondent might have made a different decision if a fair process had been followed. Past annual allocation decisions cannot be undone in a practical sense. No purpose would be served by sending the issues back for decision by Council now, in all these circumstances: Mobil Oil Canada Ltd. v. Canada-Newfoundland Offshore Petroleum Board, 1994 114 (SCC), [1994] 1 S.C.R., 202, at 228-29.
Disposition and Costs
[70] Accordingly, the applications are dismissed.
[71] With respect to costs, the Applicant advised she was seeking costs for both applications in the amount of $45,000.00. The Respondent was seeking costs of just over $54,000.00. The Respondent is the successful party. We find the quantum sought by the Applicant to be reasonable for these two applications. Therefore, the Applicant shall pay costs of $45,000.00 to the Respondent.
Nishikawa J.
O’Brien J
I agree _______________________________
D.L. Corbett J.
Released: December 6, 2022
CITATION: Adams v. Aamjiwnaang First Nation, 2022 ONSC 6831
DIVISIONAL COURT FILE NOS.: 583/21 and 235/22
DATE: 20221206
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
D.L. Corbett, Nishikawa and O’Brien JJ.
BETWEEN:
Cassie Jean Veronica Adams
Applicant
- and –
Aamjiwnaang First Nation
Respondent
REASONS FOR DECISION
Nishikawa and O’Brien JJ.
Released: December 6, 2022
[^1]: In these reasons, we have used the terminology employed under the Indian Act, R.S.C. 1985, c. I-5 and the Regulation.
[^2]: In response to the Applicant’s inquiries, as set out above, Council wrote to the Applicant by letter dated May 13, 2021. With respect to the subsequent allocation period, the parties agreed in an Agreed Statement of Facts that the Applicant’s application was refused on the basis of the same information and for the same reason as it refused her application for the 2021-2022 period.