Alberta Affirms Ability of Regulators to Make Rules

Sobeys challenged the validity of the rules restricting the ability of pharmacies to offer inducements (i.e., loyalty points) to patients purchasing drugs. After Sobeys had an initial success in British Columbia, the B.C. Court of Appeal upheld the validity of the regulator’s rules. Sobeys persisted in Alberta and again had initial success in the lower courts. However, the Court of Appeal reversed that decision and upheld the authority of the regulator to make these rules: Alberta College of Pharmacists v Sobeys West Inc., 2017 ABCA 306.

Citing Green v Law Society of Manitoba, 2017 SCC 20, the Court of Appeal held that the standard of review for the validity of such rules was reasonableness, not correctness. The Court also said that applications for judicial review of the validity of a rule should generally be confined to the materials that were before the regulator when it made its decision.

The Court held that a rule by a regulator will rarely be seen to be outside of its authority to make. Only where the rule is “irrelevant”, “extraneous” or “completely unrelated” to the statutory purpose of the regulator would it be unauthorized. The Court also held that a rule will only be viewed as unreasonable if it is one that no reasonable regulator would make. This rule did not fall into that category.

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