Academic journal article Canadian Public Administration

Privatization and the Boundaries of Judicial Review

Academic journal article Canadian Public Administration

Privatization and the Boundaries of Judicial Review

Article excerpt

The common law's capacity to adapt to societal change is one of its strengths. However, its greatest strength may lie in its wisdom to adapt only slowly and in small increments. Perhaps this is why it has taken two or three decades of growth of the private role in governance for Canadian courts to begin considering how administrative law should adapt to these changes.

It was not until the release of its judgment in Socidtd de l'assurance automobile du Quebec v. Cyr, [2008] 1 S.C.R. 338 (Cyr) that the Supreme Court of Canada expressly acknowledged that changes in public administration have implications for administrative law. Justice Michel Bastarache began his reasons for the majority of the Court by stating that the Court's task was to decide whether a public authority had "insulated itself from the requirements of administrative law by implementing a contract-based scheme to meet its statutory duties" (para. 1). Later, he said, "In an era of increased privatization of public services and the rise of public-private partnerships, this case provides an opportunity to consider whether a government body will avoid public law duties when delegating its functions by way of contract or other form of agreement" (para. 25).

By framing the issue in these terms, Justice Bastarache left no doubt about the outcome. The Supreme Court would not allow a public body to avoid its public law duties through either a "scheme" or a delegation. Further, there can be little doubt that the majority of the Court understood that the traditional boundaries of administrative law would have to expand if public law duties are to apply to contracts between public authorities and private parties. But how will the boundaries move, and how far?

The growing role of the private sector in governance is part of the agenda of reforms known as "new public management" ("NPM"). These reforms have also been influential in a vast array of countries, including the United Kingdom and the United States. Although courts in these two countries have sometimes acknowledged that the public realm that is amenable to judicial review may include more than just governmental authorities, they have yet to resolve the challenges that result from the blurring of the line between public and private. (1)

Public law fulfils important functions. It guards the rule of law by providing a means of holding those who wield public power to account and offers remedies for illegitimate, invalid or abusive exercises of power. This article provides an overview of the purpose and scope of contemporary Canadian administrative law and illustrations of how the reforms associated with NPM, especially outsourcing and privatization, threaten to diminish the ability of the courts to fulfil these purposes.

In Cyr, the Court was able to prevent the public agency from avoiding its public law duty without expanding the boundaries of administrative law, and so we are left in suspense about how the Court will resolve the most important questions that arise out of the increasing private role in public management. In particular, if a government body delegates service delivery or other functions to a private party, can persons affected by decisions made by the private party assert public law rights and remedies that would have been available against the government body? The comments of the majority of the Court in Cyr suggest that this question should be answered in the affirmative, but they do not explain how this answer is consistent with existing jurisprudence.

This article will show that existing Canadian jurisprudence provides a foundation for a flexible, functional approach for determining the scope of public law principles and remedies. Moreover, the Supreme Court's decision in Dunsmuir v. New Brunswick, [2008] 1 S.C.R. 190 (Dunsmuir), released just three weeks before its decision in Cyr, strengthened this foundation by offering it theoretical and practical support. …

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