Inapplicability of provincial legislation, judicial review and interjurisdictional disputes: recent activity at Supreme Court of Canada

In the summer of 2025, the Supreme Court of Canada (SCC) released three judgments that should interest industry, public institutions, and their legal counsel. These address applying the constitutional doctrine of interjurisdictional immunity to render provincial legislation inapplicable, the reasonableness of administrative decisions, and challenges associated with interjurisdictional disputes.

This update summarizes the main takeaways from each of these decisions and provides a glimpse of what is to come at the SCC for the rest of 2025.

Key takeaways

• Opsis Airport Services Inc. v. Quebec (Attorney General): A provincial statute was found to be constitutionally inapplicable to private security companies operating at airports and in the maritime shipping industry. For businesses operating in areas under Parliament's exclusive jurisdiction, the SCC's decision revitalizes the doctrine of interjurisdictional immunity as a ground for challenging provincial legislation thought to impair the core of an exclusive federal power.¹
• Pepa v. Canada (Citizenship and Immigration): This decision provides further guidance on the judicial review of administrative decisions. When administrative decisions rely on precedent, that reliance must be legally sound and explained in the decision-maker's reasons. Pepa may also impose a higher burden of justification where a decision will result in particularly harsh consequences.²
• Sinclair v. Venezia Turismo: Ontario courts were found not to have jurisdiction over a claim brought against foreign companies by a Canadian traveller injured in Italy. Litigants involved in interjurisdictional disputes need to pay close attention to how a claim is pled. Failure to particularize how a contract creates a connection with the selected forum may allow for an otherwise presumptive connection to be rebutted.³

• Opsis Airport Services Inc. v. Quebec (Attorney General)
• Pepa v. Canada (Citizenship and Immigration)
• Sinclair v. Venezia Turismo
• What's on the docket?

Opsis Airport Services Inc. v. Quebec (Attorney General)

At issue was whether Quebec's Private Security Act (PSA) was constitutionally inapplicable to the appellants by virtue of the doctrine of interjurisdictional immunity. Opsis Airport Services Inc. provided airport security services in Montreal, whereas Quebec Maritime Services Inc. performed loading operations on transatlantic ships out of a port facility in Quebec.

The doctrine of interjurisdictional immunity protects the core of the exclusive heads of power from being impaired by legislation adopted by the other level of government. The SCC concluded the doctrine of interjurisdictional immunity applied, holding that the security of airports and marine facilities is at the core of the federal powers over aeronautics and navigation and shipping. It concluded that the PSA's licence suspension and cancellation powers allowed for the province to impair the core of these federal powers.

This decision revitalizes the doctrine of interjurisdictional immunity as a ground for challenging provincial legislation that could impair the core of an exclusive federal power. The doctrine may remain a useful tool for those operating in a field subject to federal jurisdiction to reduce the burden of compliance with multiple levels of government regulation.

Read more about Opsis here.

Pepa v. Canada (Citizenship and Immigration)

Pepa is the most recent post-Vavilov decision from the SCC providing guidance on the reasonableness review of administrative decisions. At issue was an Immigration Appeal Division (IAD) decision to deny a right to appeal a removal order - an administrative order barring a person from entering Canada. The SCC found the decision unreasonable because it was not internally rational and had not been properly justified based on the relevant precedents, the principles of statutory interpretation, and considering the potential consequences for the affected individual.

Although relevant to the judicial review of all administrative decisions, Pepa concerns an immigration matter. Ms. Pepa was granted a permanent resident visa as an accompanying dependent child, but upon arrival in Canada she disclosed she had married a few weeks earlier. Consequently, Ms. Pepa was referred for an admissibility hearing at the Immigration and Refugee Board.

By the time the hearing commenced, Ms. Pepa's permanent resident visa had expired. The Board thus issued a removal order against her. Ms. Pepa sought an appeal to the IAD relying on s 63(2) of the Immigration and Refugee Protection Act, which provides a right of appeal against a removal order "to a foreign national who holds a permanent resident visa." The IAD concluded it could not hear this appeal because, at the time of the removal order, Ms. Pepa's visa had already expired.

The SCC found this decision unreasonable. The reasons for this conclusion are generally instructive to future challenges of administrative action of any kind.

First, the SCC found the decision was not reasonable because of the way it treated precedent. The decision-maker relied on cases that were decided based on outdated legislative provisions, cases that were not on point, and cases to which it was not bound. The decision-maker also failed to justify its reliance on such precedent. While administrative decision-makers are not bound by precedent in the same way as courts, they cannot cite precedent without scrutiny, let alone rely on clearly inapplicable or distinguishable precedents without explanation.

Second, the SCC found that because of its blind reliance on precedent, the decision-maker had failed to properly interpret the legislative provision at hand. Had the decision-maker applied the modern approach to statutory interpretation, it would have had no choice but to come to a different outcome. Based on the text, context and object of the provision, the decision-maker's conclusion (i.e., the right to an appeal could be lost before the decision subject to that appeal is even made) was absurd.

Finally, the SCC has directed that where a decision leads to harsh consequences for an affected individual, a decision-maker must explain why the decision best reflects legislative intent. Here, the reasons failed to show any consideration for these harsh consequences, which further supported a finding of unreasonableness.

Sinclair v. Venezia Turismo

The Sinclair v. Venezia Turismo decision confirmed and clarified the application of the two-stage test established by the SCC in Club Resorts Ltd. v. Van Breda⁴ used to determine whether a matter has a "real and substantial connection" to the Canadian jurisdiction where the claim is filed. This test governs whether a court may assume jurisdiction over a dispute. The two-stage test requires courts to assess (1) whether there is a presumptive connecting factor that links the subject matter of the litigation to the forum, and (2) whether the presumption of jurisdiction arising from the presence of that factor can be rebutted.

At issue was whether Ontario courts had jurisdiction over a dispute in which Canadian plaintiffs sought damages in negligence against multiple defendants, including Italian companies, due to injuries sustained from a water taxi accident in Italy. Jurisdiction was asserted based on the existence of a contract made in Ontario, a recognized presumptive connecting factor arising from Van Breda.

Regarding the first step of the Van Breda test, the SCC affirmed that the threshold for establishing a presumptive connecting factor remains a low bar to clear. However, in cases involving multiple defendants, the SCC clarified that such a factor must apply to each defendant individually. Additionally, where the connecting factor is a contract made in the province, litigants must provide an evidentiary basis to establish its existence.

At the second step of the Van Breda test, the SCC underscored that this evidentiary basis must not be overlooked, highlighting the importance of the details surrounding contract formation in assessing the strength of the connection, noting that a weak link between a contract and foreign defendants may lead to the rebuttal of the presumption of jurisdiction. The majority found the presumption was rebutted in this case.

The rebuttal stage is likely to start assuming a more significant role in lower courts' decision-making. For litigants involved in disputes that carry jurisdictional risks, pleadings should be specific in establishing the existence of the presumptive factor. Where a contract serves as the connecting factor in a dispute, the details of its formation (offer, acceptance and consideration) should be readily ascertainable for a court. A lack of evidence and specificity in pleadings may create an opportunity for the connection to be rebutted.

Read more about Sinclair here.

What's on the docket?

This fall, the SCC will hear cases relating to patent validity,⁵ the doctrine of abuse of process,⁶ the right of action against a public officer,⁷ Aboriginal rights and title claims,⁸ bilingualism requirements for certain federal appointments,⁹ the division of constitutional powers over labour relations¹⁰ and how to remedy spoilation of evidence.¹¹

Among the SCC decisions expected to be released this fall, we expect the court to address what constitutes a "material change" for the purpose of Canadian securities law.¹²

Lastly, the SCC has recently granted leave in significant matters relating to medical negligence, privacy, commercial leasing, damages for breach of contract, and the Official Languages Act. These matters will be heard in 2026:

• The SCC will consider the application of the factual and legal principles of causation in negligence actions, particularly in the context of women's healthcare.¹³
• The SCC will provide guidance on organizations' safeguarding and consent obligations under the Personal Information Protection and Electronic Documents Act when disclosing their users' personal information.¹⁴
• The SCC will determine whether the common law should impose a duty to mitigate on commercial landlords who reject the repudiation of a lease by the tenant.¹⁵
• The SCC will decide whether damages for breach of contract can be apportioned based on a defence of contributory fault, as well as provide further guidance on summary judgment motion.¹⁶
• The SCC will provide guidance on the obligations of airport authorities under the Official Languages Act (OLA), the meaning of "travelling public" in the context of a communication or service, and who is entitled to damages under the OLA.¹⁷

Follow the firm's insights on appellate law to stay informed of the SCC's latest activity. Should you have any questions about any of the above appeals, please contact a member of our appellate team.

The authors would like to thank Manreet Brar and Nathan De Tracey, students, for their contributions to preparing this update.

Footnotes