Executive Summary: Key Legal and Evidentiary Issues

• Timeliness of the judicial review under subsection 18.1(2) of the Federal Courts Act, as the application was filed on 21 December 2020 following a refusal decision communicated on 7 May 2020.

• Proper characterization of the impugned measure: whether the challenge targeted the 7 May 2020 refusal of a base grant or the funding guidelines (Lignes Directrices) themselves.

• Jurisdictional determination of whether the Canada Council for the Arts is an « office fédéral » and whether its grant-refusal decision is subject to control judiciaire.

• Consideration of whether the matter was rendered théorique because the 2020-2024 funding cycle had ended and all funds were already distributed.

• Application of the Supreme Court of Canada’s TransAlta framework to assess whether the Lignes Directrices, accepted by both parties as discriminatory, were nonetheless authorized by the enabling statute and not ultra vires.

• Final conclusion that the judicial review application should be rejected and that costs be awarded in faveur du Procureur général du Canada under Rule 407, Column 3 of Tariff B, with no specific amount fixed in the reasons.

Facts and outcome of the case
Théâtre du Rideau Vert, founded in 1948 and described as the oldest professional francophone theatre in North America, had received financial support from the Canada Council for the Arts for decades, but beginning in 2009-2010 it experienced refusals of applications for a base grant, while still obtaining some project grants for the 2017-2018 and 2018-2019 seasons. On 9 October 2019, the theatre applied for a base grant under the “Catalyseurs artistiques” component of the “Inspirer et Enraciner” program, governed by Lignes Directrices filed in the affidavit of Simon Brault. On 7 May 2020, the Council informed the theatre that its application had not been retained, explaining that a peer evaluation committee had assessed all eligible applications according to the stated criteria in a competitive context, that decisions were final, and that individualized feedback would be delayed due to COVID-19; verbal feedback was provided on 25 November 2020, and the theatre filed its notice of application for judicial review on 21 December 2020. In the peer-review process, the theatre, treated as a first-time base-funding applicant, received consolidated scores of 34.2/50 for artistic merit, 16/30 for engagement, and 14.6/20 for resilience, for a final cumulative score of 64.8/100, which placed it in the yellow zone and 21st out of 21 francophone theatres.

Issues and reasoning on delay, jurisdiction, and guidelines
The court identified four main questions: whether the judicial review targeted the 7 May 2020 decision or only the Lignes Directrices and whether the application was out of time; whether the Council’s decision was susceptible to judicial review because the Council qualifies as an « office fédéral » and its decision is of a public nature; whether the application had become théorique; and whether the theatre had shown that the refusal decision was unreasonable and that the Lignes Directrices were ultra vires in light of TransAlta. After examining the notice of application and the affidavit of Céline Marcotte, the court concluded that the proceeding in substance challenged the 7 May 2020 refusal and therefore was subject to the 30-day limit in subsection 18.1(2) of the Federal Courts Act, running from the first communication of that decision; since the application was filed on 21 December 2020, it was out of time, and the court refused to extend the deadline because the theatre had initially pursued informal reconsideration with the Council, had not shown a constant intention to seek judicial review, and had not provided a reasonable explanation for a delay of more than six months. In the alternative, the court held, following earlier authority including Toronto Independent Dance Enterprise and Onuschak, that when the Council refused the theatre’s application based on the Lignes Directrices it did not act as an « office fédéral », because it exercises broad discretionary powers to establish its own procedures and criteria, is not a mandataire of the Crown under its constitutive statute, and its grant allocation falls within general management powers comparable to those of an ordinary corporation, so the Federal Court lacked competence to hear the application.

Court’s analysis of mootness, validity of the guidelines, and final result
Again in the alternative, and applying the Borowski framework, the court accepted that even if the funding cycle 2020-2024 had ended and all funds were distributed, it was in the interest of justice to exercise its discretion and address the issues raised by the parties. Both sides accepted the relevance of the Supreme Court’s TransAlta decision for assessing whether discriminating guidelines are valid in administrative law; they agreed that the Lignes Directrices were discriminatory and that the Council’s enabling statute authorizes it to discriminate, leaving in dispute only whether the particular distinctions in the guidelines were incompatible with the statute’s economy and objectives. The court found that the Lignes Directrices flowed from the broad discretionary power granted to the Council by its statute, that nothing in that statute limited the Council’s ability to create different thresholds for first-time base-funding applicants and existing funded organizations, and that the theatre had not discharged its burden to prove the guidelines were ultra vires; on that basis, the court concluded that the refusal of the theatre’s base-funding application was not unreasonable. The court therefore rejected the application for judicial review and, in accordance with the parties’ position on costs, awarded costs to the Procureur Général du Canada under Rule 407 of the Federal Courts Rules, using Column 3 of Tariff B, without fixing any specific monetary amount.