Visions Electronics Limited Partnership (Visions Electronics) v. Canada (Attorney General)

Visions Electronics Limited Partnership (Visions Electronics) v. Canada (Attorney General)
Court (s) Database
Federal Court Decisions
Date
2021-05-20
Neutral citation
2021 FC 478
File numbers
T-2066-19
Decision Content
Date: 20210520
Docket: T-2066-19
Citation: 2021 FC 478
Ottawa, Ontario, May 20, 2021
PRESENT: The Honourable Madam Justice Strickland
BETWEEN:
VISIONS ELECTRONICS LIMITED PARTNERSHIP
OPERATING AS VISIONS ELECTRONICS BY ITS GENERAL PARTNER,
1706811 ALBERTA LTD.
Applicant
and
ATTORNEY GENERAL OF CANADA
Respondent
JUDGMENT AND REASONS
[1] This is an application for judicial review of a decision of officials of Environment and Climate Change Canada [ECCC or the Department] refusing to enter into an Energy Savings Rebate Program [Rebate Program] funding agreement. The application is brought by Visions Electronics Limited Partnership operating as Visions Electronics by its General Partner, 1706811 Alberta Limited [Visions or the Applicant].
Background
[2] In 2018, the Government of Canada developed the Rebate Program to provide funding to retailers selling energy-efficient products in the province of Ontario. In 2019, ECCC published a document titled “The Low Carbon Economy Fund, Energy Savings Rebate Program, Applicant Guide, Spring 2019” [Applicant Guide].
[3] The Applicant Guide’s stated purpose is to provide detailed instructions to complete and submit an application to the Rebate Program and it outlines key program details and eligibility criteria. The Applicant Guide states that eligible retailers must enter into a funding agreement with the Government of Canada to participate in the Rebate Program. As to eligibility for funding, applicants are required to demonstrate that they meet the three listed criteria, including that “Your entity is incorporated in Canada”. The Applicant Guide also sets out how to submit applications, the deadlines for submission and the three key steps to application selection for funding. It also describes notification to successful candidates of approval-in-principle and the next steps in the process, the first of which is the signing of a funding agreement.
[4] On July 23, 2019, Mr. Sun Joo Cho, Product Manager, Visions Electronics, submitted an “Energy Savings Rebate (ESR) Program Application for Ontario”, the prescribed Rebate Program application form. In the application, Mr. Cho identified the applicant’s full legal name as “Visions Electronics Limited Partnership” and its operating name as “Visions Electronics” [together, Visions Electronics]. ECCC acknowledged receipt of the application by email of July 24, 2019 but indicated that Annex A, a list of locations in Ontario, was incomplete. Mr. Cho revised and resubmitted the application on the same day.
[5] On August 20, 2019 the then Minister of ECCC, The Honourable Catherine McKenna [Minister], signed an “Approval of the Energy Savings Rebate Program Proposals”, a memorandum prepared by ECCC that recommended that the Minister approve funding to identified eligible applicants, including Visions Electronics. On the same day, ECCC officials emailed the successful candidates informing them that their organizations had been approved for funding under the Rebate Program. The email advised the successful applicants that by August 22, 2019 they would receive an approval-in-principle letter, along with a funding agreement template.
[6] By letter of August 21, 2019 the Director General, Programs Directorate, Pan-Canadian Framework Implementation Office of ECCC advised Mr. Cho of approval-in-principle for funding for point of sale rebates at Visions Electronics in Ontario under the Rebate Program. The letter states that a funding agreement, when signed, would represent the final step in the federal approval of the point of sale rebates and, would outline the conditions under which federal funding would be provided. Further, that the funding agreement was not subject to negotiation and had to be signed by all parties within thirty (30) business days from receiving the agreement. This letter is attached to an email which refers to the approval-in-principle letter and also states that Canada’s contribution was subject to the signing of the funding agreement by both parties and that the funding agreement was not subject to negotiation. The email attaches a template funding agreement and references highlighted sections requiring Visions Electronics’ input.
[7] On September 10, 2019, Mr. Cho began corresponding with Ms. Jessica Pinkham at ECCC regarding questions that he had concerning the funding agreement. On September 11, 2019, Ms. Pinkham advised Mr. Cho that he needed insert in the agreement the legislation under which Visions Electronics was incorporated. By reply email of the same date, Mr. Cho stated that “Visions Electronics is a limited partnership company and not incorporated”. By email of September 12, 2019 Ms. Pinkham acknowledged Mr. Cho’s reply. She advised that, as one of the eligibility criteria for funding under the Rebate Program requires that an applicant’s business be an incorporated business in Canada and as Visions Electronics did not meet that criteria, this meant that ECCC could not continue working towards the completion of a funding agreement with Visions Electronics.
[8] Various representatives from Visions Electronics then communicated with Ms. Pinkham in an attempt to explain and rectify the situation.
[9] Mr. Elvin Kruger, Vice-President, Finance, sent an email to Ms. Pinkham on September 13, 2019 explaining that Visions Electronics’ general partner was incorporated and that when Visions had encountered similar circumstances in the past, they were resolved by allowing the contract to be entered into by the general partner. The general partner takes on full authority to act on behalf of the business and accepts full liability of the limited partnership. By email of September 19, 2019 Mr. Kruger attached what he described as a “completed application using an incorporated company”. The attachment is not an application form but is the funding agreement template which Mr. Kruger revised by inserting “Visions Electronics Limited Partnership by its General Partner 1706811 Alberta Limited incorporated under the Business Corporations Act of Alberta, with its headquarters located at 6009-1A Street SW, T2H 0G5 in the Province of Alberta (‘Visions Electronics’)” as the recipient party. Mr. Kruger also made related changes to the terms of the funding agreement. On September 23, 2019, Ms. Pinkham responded by email confirming ECCC’s position and noting that the Rebate Program was now completely subscribed and the intake for applications had closed.
[10] On October 1, 2019, Visions Electronics’ President, Mr. Maurice Rouleau, sent an email to Ms. Pinkham referencing the prior communications of the VP Finance and seeking to appeal the decision. Ms. Pinkham responded by email of October 3, 2019 advising that the eligibility criteria for funding for the Rebate Program required that an applicant’s business be an incorporated business in Canada at the time of the application. And, as indicated in the Applicant Guide, decisions are final and there is no appeal process.
[11] On October 18, 2019, Mr. Rouleau sent a letter from Visions Electronics’ legal counsel to Ms. Pinkham, which letter Mr. Rouleau describes as clarifying Vision Electronics eligibility as an incorporated business in Canada at the time of the application. The letter from Mr. Frank Sur, Gowlings WLG, states that 1706811 Alberta Limited, as the general partner of Visions Electronics Limited Partnership, “is the true applicant” under the Rebate Program. Under the limited partnership agreement and the Partnership Act (Alberta), 1706811 Alberta Ltd is authorized to carry on the business of Visions Electronics Limited Partnership and has the power to enter into contracts for that entity. Mr. Sur states his view that, accordingly, the eligibility requirements had been met and requested that the decision rejecting Visions Electronics’ application be reconsidered.
[12] Ms. Pinkham responded on November 22, 2019 maintaining ECC’s position. Visions seeks judicial review of that decision.
Decision Under Review
[13] While the written submissions of the Respondent raised a question as to whether the Applicant was seeking judicial review of the September 12, 2019 letter of Ms. Pinkham, or her November 22, 2019 letter, when appearing before me the Applicant confirmed that it is the November 22, 2019 letter that is the subject of this judicial review.
[14] The November 22, 2019 letter from Ms. Pinkham states as follows:
Dear Mr. Sur:
Thank you for your letter received by email via Mr. Maurice Rouleau on October 18, 2019 regarding Visions Electronics Limited Partnership’s eligibility under the Energy Savings Rebate (ESR) program.
The ESR program was developed to assist retail companies that meet all three eligibility criteria outlined in section 3.1 of the Applicant Guide for the program. Included is a copy of the Applicant Guide for your reference. Failure to meet any of these criteria means that the applicant is not eligible to receive funding under the ESR program.
One of the eligibility criteria for funding requires that an applicant’s business be an incorporated retail company in Canada at the time of application. On the application form received by Environment and Climate Change Canada (ECCC), the contact person for Visions Electronics Limited Partnership’s application, Sung Joo Cho, had checked off the box under section C of the application stating that the applicant was in fact a retail company incorporated in Canada. Furthermore, they attested to the accuracy of the information provided in the application. Relying on this information and giving the applicant the benefit of the doubt during ECCC’s initial review phase, ECCC approved in principle the project for funding under the program. This approval in principle is subject to successfully concluding a funding agreement that respects the terms and conditions of the ESR program.
However, the information proved to be inaccurate, as confirmed by S. Cho on September 11, 2019 at the time of preparing the funding agreement. Despite the explanations provided in your October 18, 2019 letter, the fact remains that Visions Electronics Limited Partnership was the applicant and does not meet the criterion of being an incorporated retail company in Canada.
In conclusion, ECCC maintains its decision that Visions Electronics Limited Partnership was not an incorporated retail company in Canada at the time the application was submitted and is not eligible to receive funding under the ESR program.
ECCC is committed to maintaining a review and implementation process for the ESR program that is consistent, transparent and equitable to all applicants.
We thank Visions Electronics Limited Partnership for their interest in the ESR program. We will gladly add them to our stakeholders’ list should any future funding programming opportunities become available.
Sincerely,
Jessica Pinkham
Savings Rebate Program, Applicant Guide, Spring 2019
[15] Because both parties rely on the terms of the Applicant Guide, the most relevant sections are set out below.
1. Purpose of this Guide
This Applicant Guide provides detailed instructions to complete and submit an application to the Energy Savings Rebate Program of the federal Low Carbon Economy Fund. This guide outlines key program details and eligibility criteria.
…..
3. Determining your eligibility
3.1. Eligible Recipients
In Section C of the Application Form, you must demonstrate that you meet the following three criteria to be an eligible recipient of the funding:
1. Your entity is incorporated in Canada.
You must provide your business registration number issued by the Canada Revenue Agency. For entities that are affiliates, subsidiaries or franchises, only one application will be accepted per parent company.
2. You have a brick and mortar presence in at least one (1) municipality in Ontario.
For the purposes of the program, a municipality is a single tier or upper tier municipality as defined in Ontario’s Municipal Act, 2001, S.O. 2001, c.25, that is listed on the Ontario Ministry of Municipal Affairs and Housing website at http://www.mah.gov.on.ca/Page1591.aspx. The brick and mortar presence(s) that the applicant occupies in a single or upper tier municipality in Ontario on the date that a proposal is submitted will be considered for purposes of meeting this requirement. If you have a brick and mortar presence, you may also propose to deliver rebates through online sales with products delivered in Ontario. You must include information about online sales in the proposed rebate plan in your application.
3. You carry for sale and intend to provide rebates for at least four (4) of the following eligible product categories.
…
4. Program Process
4.1. Submitting an Application
You can apply by completing and submitting a PDF Application Form to ECCC between:
• June 20, 2019 and no later than July 24, 2019, at 3:00 pm (ET) for applicants with locations in five (5) or more municipalities, and
• June 20, 2019 and no later than March 31, 2020, at 3:00 pm (ET) for applicants with locations in at least one (1) and no more than four (4) municipalities.
Applications must include the following elements in order to be considered complete:
Section A – Applicant Information;
Section B – Primary Contact Information;
Section C – Eligibility;
Section D – Description of Rebates;
Section E – Rebate Plan and Budget;
Section F – Funding Amount;
Section G – Submitting the Application; and
Annex A – List of Locations in Ontario.
…
4.2 Application Deadline
You must submit a complete PDF application form, available online at https://www.canada.ca/en/environment-climate-change/services/climate-change/low-carbon-economy-fund/energy-savings-rebate.html to Environment and Climate Change Canada (ECCC) by email at [email protected] by:
• July 24, 2019, at 3:00 pm (ET) for applicants with locations in five (5) or more municipalities, and
• March 31, 2020 at 3:00 pm (ET) for applicants with locations in at least one (1) and no more than four (4) municipalities.
4.3. Application Selection
There are three key steps to application selection:
a) Screening
Applications will be reviewed to confirm their completeness. At this stage, any issues not addressed could lead to proposal rejection.
b) Evaluation
Each retained application will be evaluated by ECCC for eligibility. ECCC reserves the right to decide who is eligible.
You must provide comprehensive, clear and complete information when submitting an application. ECCC, at its discretion and if deemed necessary, may contact applicants post-submission to clarify application details, which may impact selection.
c) Recommendations and Final Decisions
After the evaluation stage, formal recommendations will be made to the Minister of Environment and Climate Change for approval and funding decision. Determinations related to final application selection, funding, and approvals rests solely with the Minister.
4.4. Decision Communicated to Applicants
ECCC will notify both successful and unsuccessful applicants once a decision has been made. If an application is approved for funding, ECCC will issue a notification of approval-in-principle and indicate next steps. Funding may be subject to certain conditions. Applicants with unsuccessful applications will receive an email notification. Decisions are final and there is no appeal process, unless otherwise specified by the Government of Canada.
4.5. Funding Agreements
The signing of a funding agreement is the next step of the process for successful applicants. The agreement will state the terms and conditions under which the Government of Canada will provide funding. Federal contributions are contingent on the signing of a legally binding funding agreement between the Government of Canada and the successful applicant within 30 business days of the notification of approval-in-principle. Otherwise, the federal funding may be cancelled. Selection and notification are not a guarantee of federal funding. Applicants assume the responsibility for any costs incurred prior to finalizing a formal funding agreement with the Government of Canada.
As approval will be based on the details provided in the application, the funding agreement will be drafted according to the scope outlined in the application. ECCC will work with successful applicants to ensure that the proposal is appropriately represented in the funding agreement. The funding agreement will also include a communications protocol outlining information related to branding and other communications elements.
Issues and standard of review
[16] In my view, the issues raised in this matter can be framed as follows:
Did ECCC have the authority to decide not to enter a funding agreement?
Was the funding agreement decision reasonable?
Was the funding agreement decision procedurally fair?
If the funding agreement decision was unreasonable or procedurally unfair, what remedy should follow?
[17] The parties submit, and I agree, that reasonableness standard of review applies to the first two issues and the correctness standard of review applies to the third issue.
[18] On reasonableness review, the 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 at paras 15, 99 [Vavilov]). When a decision is based on an internally coherent and rational chain of analysis and is justified in relation to the facts and the law that constrain the decision maker, it is reasonable and is to be afforded deference by a reviewing court (Vavilov at para 85).
[19] Issues of procedural fairness are reviewed on the correctness standard (Mission Institution v Khela, 2014 SCC 24 at para 79; Canada (Citizenship and Immigration) v Khosa, 2009 SCC 12 at para 43). On a correctness review, no deference is owed to the decision maker and the reviewing court determines if the duty of procedural fairness owed to the applicant was breached (Elson v Canada (Attorney General), 2019 FCA 27 at para 31; Connolly v Canada (National Revenue), 2019 FCA 161 at para 57).
Issue 1: Did ECCC have the authority to decide not to enter a funding agreement?
Applicant’s Position
[20] The Applicant submits that all administrative action must be exercised within the legal boundaries for which it was granted (citing Vavilov at para 10). In this case, only the Minister had the authority to approve, or to not approve, applications under the Rebate Program. The Applicant submits that the Applicant Guide provides for three stages governing applications for selection under the Rebate Program, and that the Minister’s selection and funding decisions are final and not subject to appeal (referencing the Applicant Guide ss 4.3, 4.4).
[21] According to the Applicant, these provisions demonstrate that the “clear intent and purpose” of the Rebate Program is to authorise only the Minister to decide which applications will be successful and that her decision is final and legally binding. Further, that ECCC officials must implement the Minister’s approval decision by administering post-approval steps, culminating in an executed funding agreement. The Applicant submits that ECCC officials acted unlawfully in failing to implement the Minister’s decision, effectively reversing it. The Applicant asserts that once the Minister made her selection funding approval decision, the ECCC’s screening and evaluation authority was spent: ECCC was functus officio. Further, that ECCC’s only authority after Visions Electronics’ application had been approved was to implement the funding decision. In sum, the Applicant submits that the November 22, 2019 decision was made without authority and should therefore be quashed.
Respondent’s position
[22] The Respondent submits that ECCC officials had authority not to enter the funding agreement upon determining that the eligibility criteria had not been met.
[23] The Respondent first notes that the Minister’s approval of the Rebate Program funding for Visions Electronics was an approval-in-principle, which was the first stage of a two-stage process. The second stage would have been signing the funding agreement. This is apparent from the Applicant Guide, which expressly states that funding was contingent of the signing of a legally binding funding agreement and that selection and notification were not guarantees of federal funding (Applicant Guide s 4.5). At no time did any legal obligation arise requiring Canada to provide funding to Visions Electronics. The Respondent also notes that the funding agreement is better characterized as a contract. The Rebate Program was not created by legislation and the power exercised by the ECCC officials – the power to contract – is not a statutory power.
[24] The Respondent submits that ECCC officials had the Minister’s express authorization to finalize the funding agreements for the Rebate Program and, therefore, had implied authority not to enter funding agreements with ineligible parties. The Respondent notes that if ECCC officials did not have such implied authority they would be in a situation where they would be required to enter unlawful contracts. Further, that the implied authority of ECCC officials not to enter funding agreements with ineligible parties is supported by ECCC policy concerning termination of funding agreements. That policy is the “Delegation of Spending and Financial Signing Authorities” that addresses the termination of funding agreements for grants and contributions more generally and which authorizes ECCC officials to terminate funding agreements. The Respondent submits that the Applicant’s argument that ECCC officials had no authority to refuse to enter the funding agreement is inconsistent with the authority of those officials to invoke contractual termination rights under ECCC policy. The Respondent argues that ECCC officials cannot be compelled to enter a funding agreement based on the Minister’s approval-in-principle yet also be authorized to exercise termination rights immediately upon finalization of the agreement. The Minister’s authorization of ECCC officials to finalize funding agreements must have included an implied authority not to proceed with funding agreements in appropriate circumstances.
[25] In the alternative, the Respondent submits that any discretion exercised by ECCC officials was founded in the Carltona principle. This principle establishes that where the exercise of discretionary power is entrusted to a Minister it may be presumed that the act will be performed by responsible officials in the Minister’s department. The rationale for this principle is that it would be unreasonable to expect the Minister to perform every task personally (The Queen v Harrison, [1977] 1 SCR 238 at paras 245-246 [Harrison]). While this doctrine has usually been applied in the context of statutory powers, it has also been applied to the Crown’s exercise of the power to contract (The Queen v Transworld Shipping Ltd., [1976] 6 DLR (3d) 304 (FCA) [Transworld Shipping]).
Analysis
[26] In challenging ECCC officials’ authority to refuse to enter into a funding agreement, the Applicant relies almost exclusively on the terms of the Applicant Guide, in particular s 4.3, to found its assertion that ECCC officials exceeded their authority. In this regard, the Applicant submits that discretion must be exercised within the purpose and context of a legislative scheme, referencing paragraph 67 of Baker v Canada, 1999 SCC 699 [Baker].
[27] This submission raises the question of the source of the Minister’s and ECCC’s authority to take the actions that they did and the boundaries of that authority.
[28] In Baker, in the context its reasonableness review, the Supreme Court of Canada stated at paragraph 67 that: “Determining whether the approach taken by the immigration officer was within the boundaries set out by the words of the statute and the values of administrative law requires a contextual approach, as is taken to statutory interpretations generally”.
[29] In Baker, the legislation authorized the Minister, by way of regulation, to exempt a person on humanitarian and compassionate grounds, from the usual regulatory requirements for admission to Canada. Such decisions were made by immigration officers who utilized a set of guidelines providing them with instructions about how to exercise the discretion delegated to them. The Supreme Court held that a reasonable exercise of the power conferred by the legislation required close attention to the interests of children, including the purposes of the Act, international law and the guidelines. The latter were of assistance in determining whether the reasons of the immigration officer were supportable: “The guidelines are a useful indicator of what constitutes a reasonable interpretation of the power conferred by the section…” (Baker at para 72).
[30] Guidelines or policies are often used by administrative decision makers to guide their decision making. In that regard, much jurisprudence is concerned with the question of whether the decision maker fettered their discretion when relying on a policy or guideline. As stated by Justice Stratas in Stemijon Investments Ltd v Canada (Attorney General), 2011 FCA 299, decision makers who have a broad discretion under a law cannot fetter the exercise of their discretion by relying exclusively on an administrative policy. An administrative policy is not law. It cannot dictate in a binding way how that discretion is to be exercised (Stemijon at para 60; also see Gordon v Canada (Attorney General), 2016 FC 643 at para 29).
[31] As stated by the Supreme Court in Vavilov, to be reasonable a decision must be “justified in relation to the constellation of law and facts that are relevant to the decisions….Elements of the legal and factual contexts of a decision operate as constraints on the decision maker in the exercise of its delegated powers” (Vavilov at para 105). And, because administrative decision makers receive their powers by statute, the governing statutory scheme is likely the most salient aspect of the legal context relevant to a particular decision (at para 108).
[32] In this matter, the Applicant relies on the Applicant Guide to assert that ECCC lacked authority to refuse to enter into a funding agreement. The Applicant Guide is a useful source of information for both ECCC officials and applicants concerning the eligibility criteria and the process for applying, assessing applications and providing funding for the Rebate Program. However, the Applicant identifies no statutory scheme by which the Rebate Program is established or against which its administration is to be assessed. The Applicant submits that the Rebate Program exists to advance a federal policy to encourage energy efficiency in Ontario and in support of this refers to s 2.2 of the Applicant Guide. However, s 2.2 makes no reference to an underlying regulation or legislation. As noted above, guidelines are not law, and in and of themselves do not impose legal obligations on administrative decision makers. The Applicant does not identify any source of the Minister’s or ECCC officials’ underlying authority or any legislative scheme that would provide context to the exercise of their authority.
[33] On the other hand, the Respondent submits that after the approval-in-principle decision was made, the power exercised by the ECCC officials is the power to contract and not a statutory power. The Respondent submits that the Rebate Program was not created by legislation, the Minister did not have express statutory authority to make payments related to the Rebate Program nor were there any legislative parameters around which payments were to be made. Rather, the program was an ECCC transfer payment program that provided contribution funding under the umbrella of the Treasury Board of Canada’s Policy on Transfer Payments. The Rebate Program was funded under annual Appropriation Acts approved by Parliament, commonly referred to as “supply bills” or “money bills”.
[34] The Respondent submits that the Minister was authorized to enter contracts, including contribution agreements, within the scope of her statutory mandate under the Department of the Environment Act, RSC 1985, c E-10 specifically, s 4(1)(a) and(f). Further, that the Minister also had the authority to delegate her contracting authority to ECCC officials, as was expressly done in this case by way of the August 20, 2019 Memorandum signed by the Minister, and pursuant to the Carltona doctrine. Therefore, ECCC officials had delegated authority to exercise the broad discretion of whether to enter into funding agreements.
[35] In my view, the absence of a specific statutory scheme creating the Rebate Program and granting or prescribing the Minister’s authority or the ECCC’s delegated authority does not mean that the Applicant Guide is the source of the Minister’s authority or that it binds the Minister or fetters her discretion. The Applicant Guide, upon which the Applicant relies to assert that only the Minister was authorized to approve applications and that, once funding was approved, ECCC officials lacked authority to refuse to enter into the funding agreement, is just that, a guide.
[36] Rather, as indicated by the Respondent, in this case the scope of the Minister’s authority to enter into a contract is coincident with the Minister’s statutory departmental mandate. The “… Crown is also the Sovereign, a physical person who, in addition to the prerogative, enjoys a general capacity to contract in accordance with the ordinary rule of law” (Attorney General of Quebec v Labrecque et al [1980] 2 SCR 1057 at p 1082). And, as stated by the Federal Court of Appeal in Transworld Shipping, each Minister has by statute the authority to manage their department and “… subject to such statutory restrictions as may otherwise be imposed, this confers on such a Minister statutory authority to enter into contracts of a current nature in connection with that part of the federal Government’s business that is assigned to his department” (at p 307).
[37] In this case, the Minister’s authority to enter contracts, including funding agreements, is founded in the common law establishing that the Crown enjoys the general capacity to contract. The scope of that authority is limited only by the Minister’s statutory mandate. Therefore, the Minister had broad discretion in determining whether or not to enter a funding agreement.
[38] As to her delegates, by way of the August 13, 2019 Memorandum, the Minister accepted the ECCC recommendation that she approve funding “for the recommended eligible project proposals”. As to “next steps” she also accepted the proposal from ECCC that:
- With your concurrence, the Department will notify successful applicants and work to finalize the funding agreements. As per the terms of the current Delegation of Authority, these agreements will be signed by a delegated official in the Department.
[39] Thus, the Minister expressly delegated her contracting authority to ECCC with respect to the funding agreements.
[40] The same conclusion as to delegated authority could be reached by application of the Carltona principle (Harrison; Carltona, Ltd. v Com’rs of Works et al, [1943] 2 All E.R. 560 at p 563). As stated by the Federal Court of Appeal in Transworld Shipping at p 308:
Once it appears that the Minister has prima facie statutory authority to enter into contracts within his department’s domain, it follows, in my view, subject to any inconsistent statutory provision, that his power can, and will, in the ordinary course of events, be exercised by the officers of this department…
[41] Thus, in my view, the real question is whether the Minster’s funding approval required the ECCC officials to enter in a funding agreement with the Visions Electronics and/or the Applicant, or whether ECCC officials had discretion not to enter the funding agreement.
[42] The Applicant Guide sets out the program process. Applications submitted within the specified deadlines are screened by ECCC for completeness and evaluated for eligibility. ECCC then makes a recommendation to the Minister “for approval and funding decision. Determinations related to final application selection, funding, and approvals rests solely with the Minister”. It is this provision of s 4.3 of the Applicant Guide upon which the Applicant largely hinges its argument that once the Minister made a funding approval in favour of the Visions Electronics, ECCC had no further authority, beyond the possible selection of terms and conditions of the funding agreement, and was compelled to enter such an agreement.
[43] However, ECCC’s involvement did not end at this stage of the process. Pursuant to s 4.4, if an application was approved for funding, ECCC would issue a “notification of approval-in-principle and indicate next steps” (s 4.4). Section 4.4 also states that decisions are final and there is no appeal process, unless otherwise specified by the Government of Canada.
[44] The Applicant Guide also refers to the next steps in the process in s 4.5:
4.5. Funding Agreements
The signing of a funding agreement is the next step of the process for successful applicants. The agreement will state the terms and conditions under which the Government of Canada will provide funding. Federal contributions are contingent on the signing of a legally binding funding agreement between the Government of Canada and the successful applicant within 30 business days of the notification of approval-in-principle. Otherwise, the federal funding may be cancelled. Selection and notification are not a guarantee of federal funding. Applicants assume the responsibility for any costs incurred prior to finalizing a formal funding agreement with the Government of Canada.
As approval will be based on the details provided in the application, the funding agreement will be drafted according to the scope outlined in the application. ECCC will work with successful applicants to ensure that the proposal is appropriately represented in the funding agreement. The funding agreement will also include a communications protocol outlining information related to branding and other communications elements.
(emphasis added)
[45] The fact that the approval for funding under the Rebate Program was an approval-in-principle was also stated in ECCC’s email of August 20, 2019 advising that organizations approved for funding would receive an approval-in-principle letter by August 22, 2019. The August 21, 2019 email from ECCC to Mr. Cho attaches “the federal approval-in-principle letter” and states:
Canada’s contribution is subject to the signing of the Funding Agreement by both parties. Attached is a copy for your input which is required in relevant sections (i.e. yellow highlighted sections). Confirmation is also required of the information included within Schedule B. If required, Environment and Climate Change Canada (ECCC) will follow up with any outstanding requirements. Once complete, ECCC will review, finalize, and prepare a copy for signatures. Please note that the Agreement is not subject to negotiations and is to be signed by all parties within thirty (30) business days of the date of receiving the Agreement…
[46] The August 21, 2019 formal notification letter from ECCC to Mr. Cho also refers to approval-in-principle:
We are pleased to inform you of federal approval-in-principle of funding for point of sale rebates at Visions Electronics in Ontario, under the Energy Savings Rebate Program of the Low Carbon Economy Fund. This approval is given following a successful review of your proposal….
The Funding Agreement, when signed, represents the final step in the federal approval of point of sale rebates, and will outline in detail the conditions under which federal funding will be provided…The Agreement is not subject to negotiation and has to be signed by all parties within thirty (30) business days of the date of receiving the Agreement…
[47] I agree with the Respondent that the Minister’s funding approval decision was, in effect, the first stage of a two-stage process. The first stage was approval-in-principle, comprised of the selection, evaluation and recommendation by ECCC and the acceptance, or rejection, of the funding approval recommendation by the Minister. The second stage was the entering into the funding agreement, which, in essence, is the effecting of a private or commercial contract.
[48] It is also significant to note that the characterization of the funding approval as approval-in-principle is found in the sections of the Applicant Guide that are subsequent to the acceptance by the Minister of the ECCC funding recommendation (ss 4.4 and 4.5). That is, the Applicant Guide does not reflect the Applicant’s view that once the Minister accepted the ECCC funding recommendation this was final and funding must be provided. Rather, the Applicant Guide contemplates the next step in the process as being moving from approval-in-principle to the execution of a funding agreement.
[49] And, while the Applicant Guide is not binding, s 4.5 does inform parties’ expectations for the Rebate Program funding process. Section 4.5 explicitly states that receiving funding is contingent on signing the funding agreement and that selection and notification are not a guarantee of federal funding.
[50] I do not agree with the Applicant’s submission that after fulfilling their screening and evaluation role, ECCC officials were functus officio. The Applicant submits that after the Minister accepted the recommendation and approved funding, ECCC’s role was limited to simply inserting the appropriate terms and conditions in the funding agreement and then executing it. However, nothing in the Minister’s funding approval removes the requirement, or the authority to enter into, a funding agreement. Similarly, even though deciding not to enter the funding agreement may have the same effect, the ECCC did not “reverse” the Minister’s decision without authority as the Applicant submits. Rather, the ECCC decided not to take the next step in the process and enter the funding agreement.
[51] In sum, ss 4.4 and 4.5 informed the Applicant that the funding approval was an approval-in-principle, that receiving funding was contingent upon the signing of a funding agreement and, that selection and notification are not a guarantee of funding. The fact that the funding was an approval-in-principle was also communicated by ECCC’s correspondence to the Applicant. Neither s 4.3 nor the issuance of the approval-in-principle for funding legally obliged the Minister or ECCC to provide funding. Nor do ss 4.4 and 4.5 interfere with the Minister’s and her delegates’ broad discretion to contract, as discussed above. Therefore, no statute, guide, or communication with Visions Electronics served to limit ECCC’s discretion as to whether to enter into the funding agreement. In my view, ECCC had the authority not to enter the funding agreement.
Issue 2: Was the funding agreement decision reasonable?
Applicant’s position
[52] The Applicant submits that ECCC is constrained by the legal and factual context of the Rebate Program, which required ECCC to evaluate applicants based on defined criteria and to respect the final determinations of the Minister. Here, Visions Electronics met the eligibility criteria as screened by ECCC and approved by the Minister’s final and non-appealable decision. By “reversing” the Minister’s decision the ECCC made an error of law. The Applicant submits that the Rebate Program does not restrict partnersh