A couple years ago, I blogged about the first appellate decision under Canada's Agreement on Internal Trade, which was on dairy products. The second decision has just been circulated, this time on beer. (The Canadian Free Trade Agreement recently replaced the AIT, so aside from any ongoing AIT cases, future cases will be under the CFTA.)
I may have more to say on the substance later, but for now I just wanted to note a difference between the two appeal panels' approach to the standard of review for interpretation of the AIT. This is what was said in the dairy case:
91. This brings us to the fundamental question to be resolved with respect to standard of review. When an Appellant alleges that a Panel erred in interpretation of the AIT, does the Appellate Panel review the Panel on a standard of correctness or a standard of reasonableness?
92. In our view, the appropriate standard is reasonableness.
93. As we have explained above, many of the considerations that induce a court to exercise deference towards an administrative tribunal on judicial review do not apply in the relationship between the Appellate Panel and a Panel under the AIT. Likewise, many of the considerations that govern an appeal court’s oversight of lower courts do not apply in the relationship between the Appellate Panel and a Panel under the AIT.
94. One consideration however that does apply in both the judicial review context and in the present context is the relative expertise of the generalized reviewing body as compared to the specialized decision maker. Unlike the Panel, we do not have “expertise or experience in matters covered by this Agreement”. Such experience provides a basis for a practical interpretation of the Agreement in a manner that best achieves its objectives.
By contrast, this is what was said in the beer case:
46. In terms of the respective roles of panels and Appellate Panels under the AIT, the underlying legislation – the AIT – clearly provides for a full review of the Panel’s decision by the Appellate Panel and permits the Appellate Panel to “confirm, vary, rescind, or substitute the Report in whole or in part, or refer the matter back to the Panel for re-hearing”. That broad authority suggests the Appellate Panel is not required to be deferential to the original Panel report.
47. Even if we were to accept the Newton considerations, we do not consider that significant deference is required.
48. In terms of the nature of the question in issue, Appellate Panel review will almost always involve a review of the panel’s interpretation of provisions of the AIT. Our conclusions in respect of those interpretations of the AIT may have an impact well beyond the parties to the dispute.
49. There is nothing in the AIT itself that clearly requires an Appellate Panel to exercise deference with respect to panel decisions. Rather, the agreement suggests that an Appellate Panel may conduct a full and unrestrained review of the Panel decision.
50. On pure questions of law, the standard of review is correctness, and we are free to replace the opinion of the Panel with our own. In sum, we considered that the Appellate Panel has a broad jurisdiction to review the panel decision in this appeal and, in conducting that review, it should be guided by the Supreme Court’s decision in Housen.
I remember being surprised by the deference shown in the dairy case, and I can imagine that the beer standard of review will prevail going forward.
