Vavilov and CRA Decisions - The Standard of Review for Statutory Appeals

In the Supreme Court of Canada’s decision, Canada (Minister of Citizenship and Immigration) re Vavilov, 2019 SCC 65 , the SCC decided that for statutory appeals, a court’s review of the original decision maker’s determination is to be decided on the appellate standard of review as set out in the seminal decision of Housen v. Nikolaisen, 2002 SCC 33.

Accordingly, for CRA decisions in which the CRA makes a finding of fact on behalf of the Minister of National Revenue, unless the CRA has made a finding of fact that contains palpable and overriding error , the courts will not be empowered to overturn that decision. Where, however, the CRA makes a legal finding, then standard of review is the higher standard of correctness. In practice, the standard of palpable and overriding error mandates that appellate court must pay deference to the original decision maker.

The appellant will bear the burden of showing that the CRA has made an obvious error. For example, in the Charities Sector, the Minister is charged with determining whether or not to refuse, annul, or revoke registration of charities. If the charity is unhappy with this decision, it can object to the decision for internal CRA review. If the charity remains unhappy with the internal CRA review of the decision, its only option is to conduct a statutory appeal to the Federal Court of Canada. Based on the decision in Vavilov, the court must first find that the Minister made an obvious error in its findings of fact before it can overturn the Minister’s decision to refuse, annul, or revoke registration of charitable status.

To me, the deference to the Minister as the original decision maker seems unfair in this context. The Vavilov decision is still new and it remains to be seen how the courts will apply the standard of review set out in it in various administrative review contexts.