Executive Summary: Key Legal and Evidentiary Issues

• Valero Energy Inc. sought an order compelling the Minister of the Environment, Conservation and Parks and the Attorney General of Ontario to produce a fuller record in its judicial review application challenging O. Reg. 163/25.
   
• Divisional Court considered whether the making of a regulation by the Lieutenant Governor in Council qualifies as a "statutory power of decision" triggering a record-production obligation under section 10 of the Judicial Review Procedure Act.
   
• Two additional alleged Ministerial decisions were examined, including the decision to proceed with domestic renewable content requirements and the decision not to publish a regulatory impact analysis.
   
• Justice Matheson applied the Supreme Court's framework in Auer v. Auer to confirm that judicial review of a regulation's vires is a limited exercise of statutory interpretation, not a review of policy merits.
   
• The applicant's allegation of improper purpose was found insufficient to justify production of internal Cabinet documents, since judicial review does not afford a right to documentary discovery.
   
• Ultimately, the court dismissed the motion for production and ordered costs against Valero in the agreed amount of $5,000.
   

Facts of the case

Valero Energy Inc. brought a motion within its application for judicial review, seeking an order compelling the Minister of the Environment, Conservation and Parks and the Attorney General of Ontario to produce a record of proceedings or record of decision. Valero owns and operates a refinery in Quebec that supplies diesel and gasoline to the Ontario market through a petroleum product terminal in Ontario, as well as through sales to Ontario customers via other fuel suppliers. The underlying application challenges O. Reg. 163/25, which amended O. Reg. 663/20 (Cleaner Transportation Fuels: Renewable Content Requirements for Gasoline and Diesel Fuels) to require minimum percentages of Canadian-produced bio-based content in gasoline and diesel fuels. The respondents had already produced a record containing the entire public record related to the regulation, including the proposal, rationale, and public consultation materials, comprising about two hundred pages. Valero submitted this record was insufficient and sought all internal materials before Cabinet when the regulation was made, along with documents relating to two other alleged Ministerial decisions, subject only to privilege claims, plus an affidavit certifying the record's completeness.

Policy and legislative provisions at issue

The application asserted that O. Reg. 163/25 is ultra vires the provincial legislative authority under section 92 of the Constitution Act, 1867, and ultra vires the regulation-making authority in the Environmental Protection Act. Valero also alleged two further decisions: the Minister's decision to proceed with the domestic content requirements under O. Reg. 663/20, and a decision not to comply with the mandatory public notice and comment process under section 16(1) of the Environmental Bill of Rights, 1993 (EBR), and not to publish a regulatory impact analysis under section 27(4) of the Modernizing Ontario for People and Businesses Act, 2020. The court examined section 10 of the Judicial Review Procedure Act, which obliges production of a record of proceedings only where there has been an exercise or purported exercise of a "statutory power of decision," a narrower category than the general "statutory power" definition in section 1(1) of that Act. Section 1(6)(c) of the "EBA" [as referred to in the source judgment; the source otherwise defines and uses "EBR" for the Environmental Bill of Rights, and this appears to be a drafting inconsistency in the original decision] was also central, providing that a regulatory proposal is implemented once filed with the Registrar of Regulations under the Legislation Act, 2006. The court additionally noted that the public record was properly before it under section 25 of the Ontario Evidence Act.

Reasoning and analysis

Justice Matheson held that the making of a regulation is a "statutory power" but not a "statutory power of decision" under the Judicial Review Procedure Act, meaning there was no statutory obligation to produce a record of proceedings for the challenge to O. Reg. 163/25. Turning to the alleged Ministerial decisions, the court found the Minister had no decision-making role in implementing the regulation, since implementation under section 1(6)(c) occurs upon filing with the Registrar of Regulations. The informal language in the Ministry's published "Decision Summary" document, stating "We decided to proceed with domestic bio-based content requirements," did not alter this legal conclusion. The alleged breaches concerning public notice and the regulatory impact analysis were characterized as procedural fairness issues rather than separate statutory powers of decision, though the court noted they could still be raised within the application itself. Justice Matheson distinguished Greenpeace Canada v. Minister of the Environment (Ontario), 2019 ONSC 5629, noting that unlike in Greenpeace, a public consultation process had in fact occurred here. The court also distinguished CCSAGE Naturally Green v. Director, Sec. 47.5 EPA, 2018 ONSC 237, observing that the Judicial Review Procedure Act expressly excludes challenges to a regulation from the record-production obligation, and that CCSAGE itself had denied the production sought. Applying Auer v. Auer, 2024 SCC 36, the court confirmed that judicial review of a regulation's vires does not involve assessing policy merits and is fundamentally an exercise of statutory interpretation, asking whether the regulation is consistent with the statutory purpose and delegated authority. The court found Valero's reliance on paragraphs 53 and 54 of Auer, concerning sources of information and improper motive, did not support the production sought, and characterized Valero's allegation of improper purpose as a bald assertion insufficient to justify what amounted to a fishing expedition through Cabinet documents. The court further relied on Lachance v. Ontario (Solicitor General), 2023 ONSC 7143, at paragraph 15, for the principle that judicial review does not afford a right to documentary discovery based on relevance, and distinguished New Sunlight Inc. v. Ontario (Minister of Infrastructure), 2025 ONSC 638, and Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, as not addressing challenges to a regulation specifically.

Ruling and overall outcome

Justice Matheson concluded that the Judicial Review Procedure Act delineates the obligation to produce a record of proceedings and excludes this challenge to a regulation from that obligation, and found no basis to exercise inherent jurisdiction to compel further production. The motion brought by Valero Energy Inc. was dismissed, with the respondents, the Minister of the Environment, Conservation and Parks and the Attorney General of Ontario, being the successful parties. Costs were awarded to the respondents in the agreed total amount of $5,000, all inclusive.