Apotex Inc v. Canada (Health)

Apotex Inc v. Canada (Health)
Court (s) Database
Federal Court Decisions
Date
2015-10-14
Neutral citation
2015 FC 1161
File numbers
T-2223-14
Notes
Digest
Decision Content
Date: 20151014
Docket: T-2223-14
Citation: 2015 FC 1161
Ottawa, Ontario, October 14, 2015
PRESENT: The Honourable Mr. Justice Manson
BETWEEN:
APOTEX INC, APOTEX PHARMACHEM INDIA PVT LTD AND APOTEX RESEARCH PRIVATE LIMITED
Applicants
and
MINISTER OF HEALTH AND ATTORNEY GENERAL OF CANADA
Respondents
Table of Contents
I. Introduction. 2
II. Background. 3
A. Regulatory Regime. 3
B. The Parties. 4
C. Interlocutory Proceedings. 5
III. Facts. 6
A. Chronological Outline. 6
B. Supporting Affidavit Evidence. 13
(1) Applicants’ Supporting Affidavits. 13
(2) Respondents’ Supporting Affidavits. 15
IV. Relevant Legislation. 18
V. Issues. 18
VI. Decision Summary. 18
VII. Standard of Review.. 20
A. What is the Appropriate Standard of Review of Health Canada’s Decision?. 20
(1) Applicants’ Submissions. 20
(2) Respondents’ Submissions. 21
VIII. Analysis. 25
A. Did the Minister Afford Adequate Procedural Fairness when she Implemented the Import Ban and Amended the EL Letters?. 25
(1) What Degree of Procedural Fairness is Apotex Entitled to?. 25
(2) Improper Purpose and Reasonable Apprehension of Bias. 28
(a) Apprehension of Bias. 28
(b) Improper Purpose. 31
(3) Failure to Act in Accordance with Natural Justice. 35
B. Did the Minister Act Beyond or Without Legislative Authority?. 39
(1) EL Action. 39
(a) Legislative / Regulatory Scheme. 39
(b) Analysis. 40
(c) Are the Regulations Unconstitutional Under Paragraph 2(e) of the Bill of Rights?. .... 47
(2) CBSA Action. 48
C. Was the Minister’s Decision Reasonable?. 50
D. Can this Court Grant the Relief Sought?. 50
JUDGMENT AND REASONS
I. Introduction [1] This is an application for judicial review by Apotex Inc. [Apotex], Apotex Pharmachem India Pvt Ltd. [APIPL] and Apotex Research Private Limited [ARPL] [collectively “the Applicants”] of the decision of the Respondent Minister of Health [the Minister] to impose an Import Ban preventing the importation of drug products into Canada from two of Apotex’s manufacturing facilities in India (APIPL and ARPL) on September 30, 2014, and the related issuance by the Minister, on October 2, 2014, of four “EL Letters” which purported to amend Apotex’s establishment licences [ELs], prohibiting import of all products, apart from those deemed medically necessary.
[2] Apotex commenced this application for judicial review on October 29, 2014, on the basis that the Minister’s decision to implement the Import Ban and amend Apotex’s ELs was unreasonable and unlawful. They allege that the Minister failed to act in accordance with the principles of natural justice by acting for an improper motive, failing to provide Apotex with notice or an opportunity to be heard, and acting in such a manner so as to give rise to a reasonable apprehension of bias. The Applicants also allege that the Minister acted outside of her regulatory powers conferred under the Food and Drugs Act, RSC 1985, c F-27 [FD Act or Act], the Food and Drugs Regulations, CRC, c 870 [FD Regulations or Regulations] and/or the Customs Act, RSC 1985, c 1 (2nd Supp).
[3] The Applicants request that the Minister’s decision to implement and her implementation of the Import Ban be deemed unlawful and should be quashed, with costs to Apotex. Among other things, they request an order quashing the four letters issued by the Minister on October 2, 2014, which amend Apotex’s ELs, and an order compelling the Minister to retract her public statement and requiring her to direct Health Canada to retract their statement released on September 30, 2014.
II. Background A. Regulatory Regime [4] The FD Act and Regulations govern the manufacture, import and sale of all drug products in Canada. Various guidelines and policies of Health Canada also help to interpret the Act and Regulations.
[5] Drugs sold in Canada must have a drug identification number [DIN] pursuant to the FD Regulations that has not been cancelled. To sell new drugs in Canada, a manufacturer must also possess a notice of compliance [NOC] issued by the Minister when satisfied that the manufacturing process meets the required standards and that the new drug is safe, effective and adequately labelled under the Regulations.
[6] To fabricate, distribute or import into Canada for sale any drug, the manufacturer must also hold an establishment licence [EL], which is granted when the holder of the EL demonstrates its facilities comply with Good Manufacturing Practices [GMP] and meet the requirements of Part C, Division 2 of the FD Regulations.
[7] The Regions and Programs Bureau [RAPB] of Health Canada inspects domestic and foreign facilities to evaluate GMP compliance. To assess GMP compliance of foreign manufacturing sites, Health Canada may perform a “desktop” review of documentary evidence gathered by international regulatory partners, external experts or consultants, or it may conduct on-site inspections, at times with other regulatory partners. GMP observations are classified by level of risk and depending on the severity and number of observations, may result in the addition of terms and conditions to the ELs, or a non-compliant rating.
B. The Parties [8] Apotex is the largest pharmaceutical manufacturer in Canada and is affiliated with the Indian companies APIPL and ARPL. Apotex purchases and imports into Canada active pharmaceutical ingredients [APIs] produced by APIPL and finished dosage form [FDF] pharmaceutical products produced by ARPL.
[9] The Respondent Minister of Health is responsible, through her delegates at Health Canada, for administering the FD Act and Regulations.
[10] Health Canada is the federal government department that oversees the regulation of drug products in Canada. It consists of various branches, bureaus and offices, most notable to this application: the Minister and Minister’s Office; the Health Products and Food Branch [HPFB], which includes the Inspectorate, the branch responsible for compliance and enforcement activities and oversight of establishment licensing for health products; and the RAPB, responsible for inspection.
C. Interlocutory Proceedings [11] Both parties filed motions on September 10, 2015; the Respondents requested dismissal of the application for judicial review as moot, and the Applicants requested that material from the Respondents’ record that was not served and filed properly or in a timely way be struck from the record. The motions were heard at the outset of the judicial review and orders have been issued separately.
III. Facts A. Chronological Outline [12] In late January 2014, the United States Food and Drug Administration [FDA] inspected APIPL’s manufacturing facility and issued a Form 483, detailing their observations that APIPL was non-compliant with US GMP requirements due to data reliability problems. On April 2, 2014, the FDA issued an Import Alert on all products coming from APIPL, save one medically necessary product. No issues of product quality were cited, nor were any drugs originating from APIPL recalled.
[13] Health Canada’s receipt of APIPL’s Form 483 prompted a desktop review by the RAPB in April 2014. The FDA’s observations were classified according to Canadian risk classification ratings and a non-compliant rating was recommended.
[14] On April 29, 2014, Health Canada informed Apotex of the non-compliant rating and requested that it cease sale of drugs containing API made by APIPL until new evidence demonstrating GMP compliance was provided. The following day Apotex, through counsel, responded to Health Canada’s request, stating that there was no basis for ceasing sale and inviting Health Canada to inspect APIPL itself.
[15] At a meeting on June 10, 2014, Apotex provided Health Canada with their corrective action plan for addressing deficiencies outlined in APIPL’s Form 483. Further discussions throughout June led to the adoption of a protocol [the Protocol], whereby Apotex would re-test all APIs produced at APIPL in Canada for quality assurance. The Protocol was intended as an interim measure until Health Canada’s on-site inspection of APIPL in August, but was later extended until October 31, 2014.
[16] On June 16, 2014, the FDA issued a “warning letter” to Apotex detailing that APIPL’s corrective and preventative actions continued to be insufficient to prevent recurrence of GMP deviations. A copy was provided shortly thereafter to Health Canada.
[17] With this information, in early August of 2014, Health Canada conducted an on-site inspection of APIPL jointly with Australia’s Therapeutic Goods Administration [TGA], with the purpose of verifying that APIPL was indeed implementing corrective actions spurred by the FDA Import Alert [Health Canada-TGA APIPL August Inspection]. In a teleconference with the FDA, Canadian and Australian inspectors were informed of the FDA’s main concerns from FDA inspections of APIPL and ARPL, to which they specifically followed up on as part of their August inspection. An email to the HPFB summarizing the RAPB’s observations indicated that “the deficiencies noted are not critical (no risk 1 observations) that will require immediate action to be taken” (Sharma First Affidavit, Exh 19; AR, Tab 8(19), p 1628).
[18] During this same period, there were other developments relating to Apotex’s FDF facility, ARPL. In May of 2014, ARPL was issued GMP Certificates of Compliance from both the United Kingdom Medicines and Healthcare Products Regulatory Agency [MHRA] and Health Canada, who had conducted a joint inspection of ARPL in mid-February 2014.
[19] In the final week of June 2014, the FDA inspected ARPL, following which they issued a Form 483, finding data integrity problems and deviations from GMP. Health Canada received a copy shortly thereafter and an RAPB inspector who compared the FDA and Health Canada-MHRA inspections recommended a non-compliant rating be assigned to ARPL. This is despite the fact that the Health Canada-MHRA inspection “did not find data integrity / laboratory practices issues,” and had assigned a compliant rating just over a month before. The inspector was of the opinion that the scope of the inspections differed, with that of the FDA centering on data integrity issues. He also suggested that follow-up with Apotex would be necessary to “further clarify the issues and determine what corrective actions the company is planning,” as per Health Canada’s usual practice (Sharma First Affidavit, Exh 22; AR, Tab 8(22), p 1660).
[20] Beginning on September 11, 2014, the Toronto Star began to publish a series of articles and editorials highly critical of Health Canada and the Minister, portraying them as inept in comparison to the FDA, particularly in their regulatory approach towards Apotex, and attacking them for failing to protect the health of Canadians against suspect drugs. The articles spurred vigorous questioning of the Minister in the House of Commons.
[21] The articles also caused an immediate reaction at Health Canada and in the Minister’s Office, as evinced by internal communications between personnel at HPFB, the Inspectorate, the Minister’s Office, the Prime Minister’s Office and the Communications and Public Affairs Branch of Health Canada. In an email to Deputy Minister George DaPont, the Minister expressed concern that Health Canada did not “have a strong enough policy response” and wanted to revoke the license of Apotex “if these drugs that are considered harmful by the FDA are still on the Canadian market,” to which she was assured by staff that (i) the FDA had not recalled any products, (ii) program experts were confident no risky products were on the market, (iii) all products coming from Apotex were being re-tested in Canada, and that consequently it would be “hard to pull the license at this point” (Rule 318 Record, AR, Vol XVII, Tab 19(c)(27)).
[22] On September 22, 2014, the FDA issued an Import Alert for ARPL, except for products deemed medically necessary. No drug products were recalled from the shelves. The following day Health Canada requested that Apotex confirm it would voluntarily quarantine all products made at ARPL by close of business on September 24. This deadline was accelerated to 10:00 am on the 24th after a series of calls and emails between the Minister’s Office and Health Canada personnel. Apotex acceded to this request, for one week, requesting that Health Canada undertake a review of the recent ARPL inspections and “provide compelling reasons, with specific factual bases for each affected product,” if they wanted to continue the quarantine. Health Canada did not request an extension of the quarantine from Apotex.
[23] In an email, Ministerial staff expressed frustration that Apotex had been provided an opportunity to quarantine products voluntarily and indicated that “stronger action” was to be taken in response to ARPL than what had happened with APIPL. The record also reveals that Health Canada was prepared to move to an Import Ban had Apotex disagreed with the quarantine, such that either way, products from APIPL and ARPL would be off the market.
[24] Accordingly, up to September 29, 2014, there had been no indication from Health Canada to Apotex that any concerns about GMP compliance at either APIPL or ARPL could result in an Import Ban.
[25] In the interim during which ARPL had become the central focus, an internal working group at Health Canada had confirmed the assigned risk ratings from the Health Canada-TGA APIPL August Inspection. On September 25, 2014, Apotex was provided with a draft Inspection Exit Notice, proposing a Compliant with Terms and Conditions rating for APIPL, under which new terms and conditions would require Apotex to re-test APIPL products in Canada.
[26] Given the concerns at Health Canada surrounding the Apotex APIPL and ARPL facilities, the RAPB communicated to the Deputy Minister’s Office that they would be providing a finalized Exit Notice to APIPL - not ARPL, the subject of the voluntary quarantine - to which they received express instructions to “[p]lease stand down re pressing send on inspection rating” (Rule 318 Record, AR, Vol XVIII, Tab 20(56) & (62)). No explanation was or has been given to Apotex regarding why the Exit Notice was not provided.
[27] On September 29, 2014, Health Canada and the FDA held a conference call, from which Health Canada allegedly learned “new information” they claim formed the basis for their regulatory action and resulting Import Ban of products from APIPL and ARPL.
[28] On September 30, 2014, without notice, Health Canada communicated to Apotex that the Minister had instructed the Canadian Border Services Agency [CBSA] to immediately restrict importation of drug products from APIPL and ARPL [CBSA Action]. An email from the Minister’s Office to the Prime Minister’s Office conveyed that this move represented that Health Canada was both catching up with the US and going even further, and that the ban as compared to a voluntary quarantine was “largely cosmetic and very useful for pushback” (Rule 318 Record, AR, Vol XVIII, Tab 20(76)). Apotex was informed by way of a telephone call from Health Canada, press releases issued by both Health Canada and by the Minister, and a list of the banned products on Health Canada’s website - all on September 30, 2014.
[29] In the September 30 phone call, Health Canada maintained it could not rely on data coming from APIPL and ARPL, and that due to the “new information” received from the FDA, it was re-reviewing the compliant status communicated to Apotex by way of the draft Inspection Exit Notice five days earlier, and terms and conditions would be applied to Apotex’s ELs [EL Action]. The CBSA Action and EL Action collectively constitute what is hereinafter referred to as the Import Ban.
[30] The Minister’s public statement conveyed that “Health Canada has taken decisive action today to stop the import into Canada of all drug products from [APIPL and ARPL],” but reassured that “Health Canada has received no evidence that the problems pose an immediate risk,” and that like the FDA, no recall would be required. Further, the Minister stated “when trust between a regulator and a company is broken, strong actions are required” (Rule 318 Record, AR, Vol XVIII, Tab 20(90)). Health Canada’s statement is to a similar effect.
[31] Despite repeated requests for disclosure, Apotex remained unaware of what “new information” prompted Health Canada to immediately impose the Import Ban until after initiation of this judicial review. Health Canada attributes this to their confidentiality agreement with the FDA, which prevented them from sharing the acquired information. The new information that is set out in Dr. Supriya Sharma’s First Affidavit at paragraphs 89 to 94, includes:
a) selective reporting of positive test results;
b) the FDA’s investigation was more detailed and lengthy than previously appreciated;
c) it would be an in-depth process for the company to rectify serious problems; and
d) the FDA had intercepted at the US Border API subject to the Import Alert “mistakenly” listed with incorrect information (this ended up being a misunderstanding, and was not an issue in the proceeding).
[32] During this period, there was no correspondence between Health Canada and Apotex regarding GMP compliance at APIPL or ARPL, nor regarding any clarification of information learned from the FDA.
[33] On October 2, 2014, Apotex received copies of four form letters [the EL Letters], which purported to amend Apotex’s ELs by applying new terms and conditions that effectively banned import of all drug products from APIPL and ARPL, save for medically necessary products if re-tested by a third party once in Canada.
[34] Neither the TGA nor MHRA, with which Health Canada shares mutual recognition agreements, have implemented import bans for these Indian facilities, despite being aware of the FDA and Health Canada’s import bans for APIPL and ARPL products. They claim to have relied on their own inspections and detailed analysis of information to make independent risk-based decisions.
B. Supporting Affidavit Evidence [35] The Affidavits filed by the parties describe in detail communications between Apotex and Health Canada leading up to and following imposition of the Import Ban and amendment of the ELs. The Minister’s (and her delegates’) actions prior to September 30, 2014, are most pertinent to this proceeding: evidence post-dating the regulatory action taken by Health Canada is of little relevance to the decision under review, save for some contextual significance as to what actions preceded the September 30, 2014 Import Ban.
(1) Applicants’ Supporting Affidavits [36] Affidavits were filed by Dr. Jeremy Desai, Mr. Ed Carey and Mr. Kiran Krishnan.
[37] Dr. Desai, President and Chief Executive Officer of Apotex Inc., swore two affidavits. He describes Apotex’s compliance with the FD Regulations for obtaining DINs, NOCs and ELs and affirms that Apotex has continually held valid, unsuspended DINs, NOCs and ELs for the banned products and facilities where the banned products were made, APIPL and ARPL.
[38] Dr. Desai’s description of events leading up to the Import Ban demonstrates a transparent relationship between Apotex and Health Canada, whereby FDA observations, the corresponding US Import Alert, and Apotex’s corrective actions were openly communicated to Health Canada. Dr. Desai asserts that Health Canada did not express concern regarding the safety of products coming from APIPL or ARPL, and in fact conducted their own inspections of the facilities, which resulted in GMP compliant ratings.
[39] Dr. Desai sets out the Toronto Star articles scrutinizing Health Canada. On September 30, 2014, Dr. Desai learned, without warning, that an Import Ban had been placed on drug products coming from APIPL and ARPL. Health Canada told Dr. Desai that “new information” from the FDA constituted the basis for the Ban. In his experience, this was not Health Canada’s usual regulatory response, which typically involves communication and cooperation with the companies - as had been happening up until this point.
[40] Press releases by Health Canada and the Minister on September 30, 2014, also alleged that trust with Apotex had been broken. This is the only information provided to Apotex until after initiation of the judicial review.
[41] Ed Carey, Vice President of Global Quality & Compliance at Apotex Pharmachem Inc., is responsible for compliance and oversight of foreign API manufacturers and works closely with Dr. Desai. In his Affidavit, he claims that Health Canada was fully aware of concerns, claimed to be “new information” since at least January of 2014, as evinced by the following; correspondence with the FDA, Apotex’s corrective action plans, investigations by Health Canada with international regulatory partners, and implementation of the Protocol for testing in Canada.
[42] The Krishnan affidavit explained a misunderstanding by Health Canada of some information provided by the FDA that has since been clarified. It is no longer relevant to the proceeding, other than to demonstrate that some information upon which Health Canada relied in forming an opinion of mistrust towards Apotex was potentially inaccurate.
(2) Respondents’ Supporting Affidavits [43] Each of the Respondents’ affiants, Ms. Robin Chiponski and Dr. Supriya Sharma, provided two affidavits.
[44] Ms. Chiponski is Director General of the HPFB and is involved in oversight of Health Canada’s establishment licensing. Her evidence sets out the events of September 2014, from Health Canada’s perspective. It explains that Health Canada reviewed and assessed potential compliance and enforcement approaches for Apotex, including the option of restricting import.
[45] Ms. Chiponski claims that information from the FDA led her to believe that the data integrity problems at Apotex were more widespread and deeper-rooted than previously thought. She asserts that Health Canada’s restriction of import and imposition of terms and conditions on APIPL and ARPL’s ELs stemmed from a concern that products from APIPL and ARPL posed a potential risk to Canadians’ health and safety. She does not point to evidence that the banned products constituted a risk to health and safety, apart from GMP non-compliance at the facilities.
[46] Ms. Chiponski also explains that Health Canada does not notify a regulated party of import restrictions before they take effect in order to prevent the importer from flooding the market with product prior to the ban.
[47] Dr. Sharma is the Senior Medical Advisor at HPFB and at the relevant time held the position of Acting Associate Deputy Minister and Senior Medical Advisor. Her affidavit describes the regulatory framework and outlines the guidelines and policies that set out Health Canada’s interpretation of the FD Act and FD Regulations. Potential compliance and enforcement approaches used in the event of GMP non-compliance are outlined in Health Canada’s Compliance and Enforcement policy (POL-0001). A brief summary of the relevant points follows:
a) Non-compliance is brought to the company’s attention and the Inspectorate will clarify what is necessary to achieve compliance. Enforcement actions are undertaken when necessary, mainly when the regulated party is unable or unwilling to comply with the Regulations.
b) To identify the appropriate enforcement action, Health Canada will consider; the risk to health and safety, compliance history of the regulated party, whether the regulated party acted with indifference or premeditation, the degree of cooperation, whether the problem is systemic, the effectiveness of the response, and the need to maintain public confidence in the programs administered by the HPFB and the Inspectorate.
c) The Inspectorate has broad powers to enforce the Act and Regulations. If a regulated party does not respond voluntarily, the Inspectorate can consider a variety of measures, including; customs activities, public warning or advisory, seizure and detention, and refusal, suspension or amendment of establishment licences.
d) Fairness is a guiding principle of the policy, requiring that the Inspectorate follow a predictable, uniform, non-discriminatory and unbiased approach to enforcement in Canada for all regulated products.
e) The primary objective of the response strategy is to manage the risk to Canadians and use the most appropriate level of intervention to ensure that the regulated party brings the product or activity into compliance.
[48] Dr. Sharma emphasizes the importance of adhering to GMP to ensure the quality, efficacy and safety of drugs. She also highlights the policy considerations weighed by Health Canada in the implementation of regulatory measures. In this case, she claims that Health Canada’s regulatory action was spurred by the lengthy history of communication and engagement between Health Canada and Apotex over the course of 2014.
[49] After the call with the FDA on September 29, 2014, Dr. Sharma doubted that Health Canada could trust Apotex due to the FDA’s data integrity concerns, “all other information Health Canada had about Apotex,” and Apotex’s insufficient remedial actions to date.
[50] That same day, Dr. Sharma discussed the agreed-upon regulatory action, the Import Ban, with Deputy Minister DaPont and Associate Deputy Minister Glover, following which she then spoke with the Minister’s office.
[51] The Respondents’ affiants claim to have received no direction from the Minister or her staff about what regulatory actions to take against Apotex. The record demonstrates that both were included in much of the email correspondence between the Minister’s Office and Health Canada following the Toronto Star Articles regarding what to do about Apotex.
[52] As a result of the Respondents’ motion heard prior to this judicial review, in a separate order I have granted leave to file the affidavit of Laura Van Soelen containing exhibits of correspondence between Health Canada and Apotex, dated August 31, 2015, pertaining to the issuance of new ELs for both APIPL and ARPL (on September 1, 2015). It is of limited relevance, but provides a contextual framework of the ongoing regulatory relationship between the parties up to September 30, 2014.
IV. Relevant Legislation [53] The relevant legislation is attached in Annexes A and B.
V. Issues [54] The issues are:
A. What is the appropriate standard of review of Health Canada’s decision?
B. Did the Minister act in accordance with the duty of procedural fairness when she implemented the Import Ban and amended the EL Letters?
C. Did the Minister act beyond or not in accordance with her regulatory powers under the FD Act, the FD Regulations and/or the Customs Act?
i. Are the Regulations unconstitutional under paragraph 2(e) of the Canadian Bill of Rights?
ii. If the Minister employed the proper regulatory powers, was her decision reasonable?
D. Can this Court grant the relief sought?
VI. Decision Summary [55] The standard of review is correctness for allegations of procedural fairness. A correctness standard should also be applied to the issue of whether the Minister employed the correct statutory mechanisms to carry out the Import Ban (EL Action and CBSA Action). The Minister's actual decision of whether to implement the Import Ban should be reviewed on a standard of reasonableness, as this is a question of mixed fact and law.
[56] The Minister acted for an improper purpose and did not act in accordance with the duty of procedural fairness when she implemented the Import Ban and amended the EL Letters. Consequently, the Import Ban should be quashed.
[57] For the EL Action, the Minister employed the proper statutory provision to add terms and conditions to Apotex's ELs (subsection C.01A.008(4)). However, in the circumstances, that provision should encompass the procedural fairness afforded to EL holders throughout the rest of the regulatory scheme, requiring at least notice and reasons for the addition of terms and conditions.
[58] There is no need to consider the CBSA Action, as the Customs Target has expired and has not been renewed.
[59] Paragraph 2(e) of the Canadian Bill of Rights, SC 1960, c 44 [Bill of Rights] does not apply in the circumstances.
VII. Standard of Review A. What is the Appropriate Standard of Review of Health Canada’s Decision? (1) Applicants’ Submissions [60] The Applicants submit that the appropriate standard of review for determining issues of procedural fairness is correctness (Rt Hon Jean Chretien v Hon John H Gomery et al, 2008 FC 802 at paras 65-66, aff’d 2010 FCA 283; Mission Institution v Khela, 2014 SCC 24 at para 79 [Khela]).
[61] They claim that correctness also governs the issue of whether the Minister had authority to act and, if so, pursuant to which particular legislative provision, as this is a question of jurisdiction (New Brunswick (Board of Management) v Dunsmuir, 2008 SCC 9 at para 59 [Dunsmuir]; Burnell v Nova Scotia (Registrar of Motor Vehicles), 2009 NSSC 341 at paras 5-10, aff’d 2010 NSCA 22).
[62] Further, recent FCA jurisprudence has determined that the EL Action is to be reviewed on a correctness standard (Takeda Canada Inc v Minister of Health, 2013 FCA 13 at paras 26, 111, leave to appeal denied 2013 CarswellNat 1867 (SCC) [Takeda]; Canada (Minister of Health) v Celgene Inc, 2013 FCA 43 at paras 34-35 [Celgene].
(2) Respondents’ Submissions [63] The Respondents submit that although the appropriate standard of review for procedural matters is generally correctness, a decision-maker’s choice of procedure that involves a Ministerial decision related to public health considerations under her own statute is entitled to deference (Forest Ethics Advocacy Assn v National Energy Board, 2014 FCA 245 at para 70 [Forest Ethics]; Maritime Broadcasting System Ltd v Canadian Media Guild, 2014 FCA 59 at para 55 [Maritime Broadcasting]).
[64] The Respondents also argue that the Minister’s decision to implement the Import Ban, and the mechanisms she used to carry it out, are reviewable on a reasonableness standard. The need for discretion stems from the Minister’s expertise in assessing drug safety and efficacy, and the fact that she is interpreting her home statute – a circumstance for which the Supreme Court has set out a rebuttable presumption of reasonableness (Information & Privacy Commissioner v Alberta Teachers Association, 2011 SCC 61 at para 34 [ATA]; British Columbia (Securities Commission) v McLean, 2013 SCC 67 at para 21 [McLean]).
[65] Furthermore, the Respondents argue that issues of fact or mixed fact and law are subject to reasonableness review (Tervita v Canada (Commissioner of Competition), 2015 SCC 3 at para 39; Agraira v Canada (Minister of Public Safety and Emergency Preparedness), 2013 SCC 36 at para 50).
[66] In my opinion, the standard of review for procedural fairness in the present circumstances is correctness. The Supreme Court has determined that deference is not owed when determining whether the decision-maker’s process is fair (Khela, above, at para 79).
[67] The recent FCA cases suggesting otherwise cited by the Respondents do not aptly apply to the present facts. Forest Ethics and Maritime Broadcasting, above, contemplate situations where tribunals were given discretion to determine their own procedures. In such a situation, the FCA has found that deference is owed to procedural rulings made by a tribunal with the authority to control its own process. In the present case, the Minister was given no such discretion to control her own process, but instead must comply with the procedures set out in the extensive regulatory regime governed by the FD Act and FD Regulations.
[68] The parties disagree as to the appropriate standard to apply with respect to the review of the Minister’s decision. The Applicants argue that the issue is jurisdictional. I disagree. The Supreme Court has expressed serious reservations about the presence of jurisdictional issues: they are narrow and will be exceptional (ATA, above, at para 33). Further, the case law cited by the Applicants in support is not applicable on the present facts.
[69] The Respondents submit that cases involving public health and safety are reviewed on a reasonableness standard. Although prior jurisprudence has established that the appropriate standard of review of decisions on questions of fact and the exercise of discretion by Health Canada under the FD Regulations is reasonableness (North American Nutriceutical Inc v Canada (Attorney General), 2012 FC 1044 at para 78 citing Wellesley Therapeutics Inc v Canada (Minister of Health), 2010 FC 573 at para 31), the Minister’s interpretation of her power under the FD Regulations to implement the EL Action, and under the Customs Act to carry out the CBSA Action, are not questions of fact or discretion.
[70] The issue is best characterized as one of statutory interpretation: the EL Action comes down to the Minister’s interpretation of her powers under the FD Regulations, specifically whether subsection C.01A.008(4) authorizes her to add terms and conditions to Apotex’s ELs; and the CBSA Action involves the Minister’s interpretation of her powers under the Act, Regulations and the Customs Act. Statutory interpretation is a question of law (Canadian National Railway v Canada (Attorney General), 2014 SCC 40 at para 33).
[71] Only once it is determined that Minister chose the correct statutory mechanisms would her decision to implement the Import Ban – a policy-based question involving public health considerations – be properly characterized as one of mixed fact and law, with the applicable standard of review at this stage being reasonableness.
[72] According to Dunsmuir, the Court must first ascertain whether judicial precedents have satisfactorily established the standard of review applicable to the Minister's interpretation of the FD Act and Regulations. Where prior jurisprudence has not indicated the proper standard, the Court must analyze the Dunsmuir factors.
[73] In Takeda, above, Justice David Stratas in dissent on a separate issue, and Justice Eleanor Dawson of the FCA, conclude that the Minister’s interpretation of the data protection provisions of the FD Regulations is correctness. Justice Stratas arrives at correctness by rebutting the Supreme Court’s presumption of reasonableness set by ATA, through an analysis of the Dunsmuir factors. Justice Dawson found that the issue had been determined in recent prior jurisprudence.
[74] Although there is no prior jurisprudence setting out the appropriate standard of review on the specific provisions at issue, Justice Stratas’ analysis of the Dunsmuir factors is helpful: the present facts involve the same Minister and the same regulations. He writes at paras 29 and 30:
29 In my view, the presumption [of reasonableness set out in ATA] is overcome. All of the factors relevant to determining the standard of review lean in favour of correctness review. In this case, the nature of the question is purely legal. There is no privative clause. The Minister has no expertise in legal interpretation. There is nothing in the structure of the Act, this regulatory regime or this particular legislative provision that suggests that deference should be accorded to the Minister's decision. This analysis of the factors mirrors that in Georgia Strait Alliance v. Canada (Minister of Fisheries & Oceans), 2012 FCA 40 (F.C.A.) at paragraphs 101-105 (sometimes also referred to as "Georgia Strait"); Sheldon Inwentash & Lynn Factor Charitable Foundation v. R., 2012 FCA 136 (F.C.A.) at paragraphs 18-23.
30 I am comforted in this conclusion by the application of the correctness standard to Ministerial interpretations of the Patented Medicines (Notice of Compliance) Regulations, SOR/93-133: Bristol-Myers Squibb Co. v. Canada (Attorney General), 2005 SCC 26, [2005] 1 S.C.R. 533 (S.C.C.) at paragraph 36; Astrazeneca Canada Inc. v. Canada (Minister of Health), 2006 SCC 49, [2006] 2 S.C.R. 560 (S.C.C.); Purdue Pharma v. Canada (Attorney General), 2011 FCA 132 (F.C.A.) at paragraph 13. Although different regulations are involved in this case, both concern Minister-administered regimes governing the period before drugs are authorized for sale. It would be anomalous if the standards of review differed.
[75] Justice Stratas’ analysis applies to the present facts: statutory interpretation is a legal question, the FD Regulations contain no privative clause and the Court is as well placed as the Minister to determine the proper statutory interpretation of the Regulations. Part C, Division 1A does not confer a large degree of deference to the Minister. Although the particular provision, subsection C.01A.008(4), which the Respondents contend provides statutory authority for the Minister’s actions, does provide the Minister with some degree of deference to set out terms and conditions, the contextual and legal scheme for establishment licensing provides little deference to the Minister. Even in situations where the Minister is given some discretion, she is required to consider certain factors and follow specific procedures.
[76] While I find that the appropriate standard is correctness, given my decision below, whether one applies the standard of correctness or reasonableness on interpretation, the result would be the same.
VIII. Analysis A. Did the Minister Afford Adequate Procedural Fairness when she Implemented the Import Ban and Amended the EL Letters? (1) What Degree of Procedural Fairness is Apotex Entitled to? [77] The Applicants submit that the Minister was under a common law duty to act fairly: her decision affected Apotex’s rights and interests - mainly, Apotex’s pre-existing authorization to import products from APIPL and ARPL. Consequently, it requires that they be provided the opportunity to present their case fully and fairly, and that decisions are made using a fair, impartial and open process (Baker v Canada (Citizenship and Immigration), [1999] 2 SCR 817 at paras 20, 22, 28 [Baker]).
[78] The Respondents argue that procedural fairness is not owed under the Regulations at the time terms and conditions are imposed. A party disputing the imposition may apply for an amendment under section C.01A.006, and will then be granted procedural protection pursuant to subsection C.01A.010(3) of the FD Regulations.
[79] The Respondents cite Baker as authority for the importance of context to assessing the content of procedural fairness, and analyse the Baker factors. They argue that if the Court finds a duty of procedural fairness is owed prior to the imposition of terms and conditions, the factors indicate the duty is low for the following reasons:
a) Ministerial decisions must ensure legislative policy is implemented (Imperial Oil Ltd v Quebec, 2003 SCC 58 at paras 34, 37-38).
b) In the context of public safety procedural guarantees will be adjusted “in accordance with the degree of risk and urgency” (Miel Labonte Inc v Canada, 2006 FC 195 at para 70).
c) The decision was a non-final regulatory decision reached by a non-adjudicative process.
d) The purpose of the FD Act and Regulations is the protection and promotion of Canadians’ health and safety. The Minister is provided discretion to apply her expertise and is statutorily mandated to protect public health.
e) Apotex’s interest is purely economic, which cannot outweigh the public interest of having safe products on the market (Hilbert Honey Co v Canada (Canadian Food Inspection Agency), 2009 FC 818 at paras 63 and 120-122).
f) Tribunals with expertise, such as Health Canada in this context, are to be afforded deference in establishing decision-making processes (Maritime Broadcasting, at para 56).
[80] The Respondents claim that a finding that low procedural fairness is owed to Apotex is consistent with other case law arising under the