Executive Summary: Key Legal and Evidentiary Issues

• Jurisdictional limits of the Divisional Court under the Judicial Review Procedure Act in granting declarations challenging legislation itself.
• Characterization of a Charter and Human Rights Code challenge to an entire statutory licensing regime versus a challenge to the exercise of a specific statutory power.
• Interpretation of “statutory power” and the requirement of an actual exercise, refusal, or proposed exercise of such power as a precondition to declaratory relief.
• Distinction between legislative action (enacting ESA amendments and regulations) and administrative or executive action that can be reviewed on judicial review.
• Appropriate forum for constitutional and Charter challenges to primary legislation governing temporary help agencies and recruitment firms.
• Costs consequences arising from an application commenced in the wrong court and the transfer of the proceeding to the Superior Court of Justice.

Background and parties

The case involves an application brought by Glenn Swinton, a self-represented director of a temporary help agency and recruitment firm, against the Attorney General of Ontario. Swinton challenged the constitutionality and legality of a new licensing regime governing temporary help agencies and recruitment firms under the Employment Standards Act, 2000 (ESA) and its accompanying regulations. The proceeding came before a three-judge panel of the Ontario Divisional Court (MacLeod R.S.J., Nightingale and Shore JJ.), sitting by videoconference in London, Ontario. The central dispute in this particular decision did not address the merits of the constitutional challenge but instead focused on a preliminary question about whether the Divisional Court had jurisdiction to grant the declaratory relief Swinton was seeking.

Facts of the case and the licensing regime

The Ontario legislature amended the ESA to create a licensing scheme for temporary help agencies and recruitment firms. The new regime took effect in stages. The licensing provisions and regulatory framework came into force on July 1, 2023, but the prohibition on operating without a licence did not take effect until July 1, 2024, giving existing and new businesses a one-year window to apply for and secure a licence before operating would be barred. The regime requires temporary help agencies and recruitment firms to provide prescribed security of $25,000, subject to certain exceptions, and to demonstrate compliance with relevant federal and provincial tax obligations. Swinton, as a director of a business caught by this scheme, contended that the licensing requirements and related obligations imposed unconstitutional and unlawful burdens on his operations and those of similar businesses.

Nature of the legal challenge

In his Notice of Application for Judicial Review, Swinton sought sweeping declaratory relief, asking the Divisional Court to declare the entire licensing regime invalid and of no force or effect. He alleged that the regime breached multiple provisions of the Canadian Charter of Rights and Freedoms, including sections 6(2)(b) (mobility rights), 7 (life, liberty and security of the person), 11 (legal rights in penal matters), 15(1) (equality rights), 26, and 32(1)(b). He further claimed violations of the Ontario Human Rights Code, naming sections 1, 3, 5(1), 12, 13(1), and 16(1), as well as an infringement of section 92 of the Constitution Act and the broader rule of law. The essence of the relief was a declaration that the ESA licensing provisions and regulations, taken as a complete regime, were unconstitutional or otherwise invalid. Notably, there is no discussion in the decision of any private insurance or commercial policy wording or specific contractual clauses; the “regime” at issue is statutory and regulatory only, namely the ESA amendments and their associated regulations. The dispute therefore centered entirely on public law and constitutional issues, not on policy terms in the sense of insurance or other private contracts.

The preliminary jurisdiction issue before the Divisional Court

The Attorney General of Ontario raised a preliminary objection, arguing that the Divisional Court, as a statutory court of review, lacked jurisdiction to grant the kind of general constitutional declaration Swinton sought. The Court emphasized that the Divisional Court’s jurisdiction is confined to what is expressly conferred by statute. Here, the relevant statute is the Judicial Review Procedure Act (JRPA). Under section 2(1) of the JRPA, the Court may grant relief that an applicant would be entitled to in proceedings in the nature of mandamus, prohibition, or certiorari, or in an action for a declaration or injunction “in relation to the exercise, refusal to exercise or proposed or purported exercise of a statutory power.” A “statutory power” is defined to include powers to make subordinate legislation, powers of decision, and powers to compel or prohibit actions that would otherwise not be legally required. Relying on prior appellate and Divisional Court authorities, including Daneshvar v. Ontario, Di Cienzo v. Attorney General of Ontario, and Falkiner v. Ontario Ministry of Community and Social Services, the Court restated two preconditions for declaratory relief on judicial review: first, the relief must be connected to a statutory power; second, there must be an actual exercise, refusal, or proposed exercise of that power, and not merely an abstract challenge to government action or inaction. The Court also underscored that the Divisional Court’s role as a Branch of the Superior Court does not give it the full inherent jurisdiction of a Superior Court judge; its authority remains bounded by statute.

Application of the jurisdiction test to Swinton’s challenge

Applying these principles, the Divisional Court concluded that Swinton’s application failed on both preconditions. The declaratory relief sought did not relate to the exercise or non-exercise of a statutory power in the administrative or executive sense; instead, it attacked the legislative enactment of amendments to the ESA and the promulgation of the regulations themselves. The Court held that the enactment of amendments to an Act is not an exercise of statutory power for the purposes of the JRPA, because it is not “a power or right conferred by or under a statute” in the sense used by the Act. Rather, primary legislation is a product of the legislature, and the JRPA does not authorize the Divisional Court to make general declarations about the validity of statutes on an abstract basis. The Court further held that the fact regulations are involved does not change the character of the application; Swinton’s challenge was to the “entire regime of the licencing regime,” with any challenge to specific regulations being incidental to that broader legislative challenge. Adding Charter arguments likewise did not expand the Divisional Court’s jurisdiction. Citing its own previous reasoning in Apitipi Anicinapek Nation v. Ontario, the Court reiterated that Charter challenges in this context must still fit within the statutory framework of the JRPA when brought as applications for judicial review. Because Swinton’s application targeted the legislative scheme as a whole, rather than any concrete administrative decision or enforcement action under that scheme, it did not fit within section 2(1) of the JRPA.

Outcome, transfer of the case, and costs

Having found that the relief sought did not fall within its statutory jurisdiction, the Divisional Court determined that the matter must proceed, if at all, before the Superior Court of Justice, which has inherent jurisdiction to entertain broad constitutional and Charter challenges to primary legislation. The Court therefore ordered that the style of cause be amended to show the Attorney General of Ontario, rather than the Ministry of Labour, as the proper respondent, and that the entire application, together with all records filed, be transferred to the Superior Court. It directed the parties to arrange a prompt judicial case conference in the Superior Court to address the process for moving the application forward, and it specified that no additional filing fees would be payable in the Superior Court for documents already filed in the Divisional Court. On costs, the Divisional Court ordered that the applicant, Glenn Swinton, pay the respondent, the Attorney General of Ontario, costs fixed at $1,500 inclusive, covering the jurisdiction issue and the wasted attendance on the hearing date. The remainder of any costs questions concerning the substantive issues were left to the Superior Court where the substantive challenge will continue. In this decision, therefore, the successful party is the Attorney General of Ontario, and the total monetary amount ordered in its favour is $1,500.