BizTech v Accreditation Canada, 2025 ONSC 2689 appears to be the first application of section 7(1) of the Arbitration Act, 1991, S.O. 1991, c. 17(the “Arbitration Act”) , or any comparable provisions in other Canadian arbitration legislation, to stay a judicial review proceeding (para. 151). The decision establishes that staying a judicial review proceeding under section 7(1) of the Arbitration Act, in order to allow an arbitration to proceed, is not at odds with an individual’s right to apply for judicial review, depending on the facts of the case.,
Here, the Court enforced an arbitration agreement where the matter in dispute concerned the exercise of delegated statutory authority and was therefore the subject of judicial review. The Court held that the availability of judicial review is not an absolute right that displaces the provisions of the Arbitration Act and that in this case, arbitration was an appropriate alternative remedy to judicial review.
Background – The applicant (“BizTech”) was a career college that administered accredited paramedical courses. One of its programs (the “Program”) was regulated by the College of Medical Radiation and Imaging Technologists (the “College”), a self-governing professional regulator. The College contracted with Accreditation Canada, a not-for-profit corporation, to audit and accredit the programs through which it licensed its professionals.
As part of the accreditation process, BizTech and Accreditation Canada entered into a contract (the “Accreditation Contract”) for the Program, which included an arbitration clause. Accreditation Canada periodically audited the Program to ensure that it complied with the College’s standards. Following four years of conditional accreditation, pending the correction of certain identified deficiencies, Accreditation Canada accorded the Program the status of “Not Accredited”. This decision (the “Decision”) followed further evaluation and assessment of the Program’s deficiencies and additional negotiation with BizTech.
Relying on Accreditation Canada’s finding, the Superintendent of Career Colleges (the “Superintendent”), who approved both the College as a professional regulator and of its relationship with Accreditation Canada, revoked the Program’s approval. As a result, BizTech was forced to cease offering the Program and refund the tuition of those who were currently enrolled.
The Application – BizTech applied to the Divisional Court for judicial review of both Accreditation Canada’s and the Superintendent’s decisions. Accreditation Canada brought a motion under section 7(1) of the Arbitration Act to stay the proceeding, pending the resolution of BizTech’s challenge to Accreditation Canada’s decision through the arbitration clause of the Accreditation Contract. Section 7(1) provides as follows.
“If a party to an arbitration agreement commences a proceeding in respect of a matter to be submitted to arbitration under the agreement, the court in which the proceeding is commenced shall, on the motion of another party to the arbitration agreement, stay the proceeding.”
Preliminary Matters – Before the Court ruled on the section 7(1) motion, it first considered whether the Decision could be the subject of judicial review, given the private, contractual nature of the Accreditation Contract and that Accreditation Canada is a not-for-profit corporation, rather than a government body.
The Court held that the Decision could be the subject of judicial review because it met the two-part test established by Highwood Congregation of Jehovah’s Witnesses (Judicial Committee) v Wall, 2018 SCC 26 (CanLII). The Decision was both an exercise of state authority and of sufficiently public character (paras. 64, 72). On the first point, Accreditation Canada had been delegated the statutory authority to accredit the Program and was “essentially” acting in its place (para. 80). On the second point, the Court found the Decision to be of sufficiently public character. While the Decision had a contractual element because of the Accreditation Contract, it also had a public licensing element in which the College, and Accreditation Canada by extension, had an obligation to act in the public interest (para. 80). As a result, the Decision could be the subject of judicial review.
Issue – The issue at the heart of the disagreement was whether section 7(1) of the Arbitration Act could be applied to a judicial review proceeding, and by extension, whether a matter sufficiently public in nature to be the subject of a judicial review proceeding could – or should – be resolved by arbitration.
Analysis – The Court applied the two-part test from Peace River Hydro Partners v Petrowest Corp., 2022 SCC 41 (“Peace River”) to determine whether to stay the judicial review application under the Arbitration Act. In Peace River, the Supreme Court of Canada identified the following fact-specific analysis for determining whether a proceeding should be stayed, which is generally applicable to arbitration legislation in most provinces (Peace River at para. 76):
1. The technical requirements for a mandatory stay of proceedings are met when:
a. An arbitration agreement exists;
b. Court proceedings have been commenced by a “party” to the arbitration agreement;
c. The court proceedings are in respect of a matter that the parties agree to submit to arbitration;
2. None of the statutory exceptions under the Arbitration Act apply.
The Technical Requirements for a Mandatory Stay of Proceedings are Met – Accreditation Canada had the burden of demonstrating that the four technical requirements listed in Peace River were met. Of the four, only the third (the “proceedings are in respect of a matter that the parties agree to submit to arbitration”) was in dispute. Accreditation Canada had to demonstrate that the dispute fell within the scope of the arbitration clause in the Accreditation Contract.
The technical requirements for a mandatory stay of proceedings were met. The Court found that the matter to be submitted to arbitration focused on errors and procedural unfairness in arriving at the Decision. In turn, the arbitration clause in the Accreditation Contract contained broad language, applying to “[a]ny dispute, claim, controversy or disagreement relating to or arising out of the contract” (para. 101). The Accreditation Contract was comprehensive and included a proposal that described the fairness of the accreditation process (para. 102). As a result, the Court found that the fairness of the process and the merits of the decision were covered by the Accreditation Contract and therefore subject to the arbitration clause (para. 104).
None of the Statutory Exceptions Under the Arbitration Act Apply – The burden then shifted to BizTech to demonstrate that one of the statutory exceptions found in section 7(2) of the Arbitration Act applied to the motion. The Court held that given “the purpose and rationale of the Arbitration Act and the presumption in favour of arbitration, the exceptions found in section 7(2), below, should be narrowly construed” (para. 112):
“… the court may refuse to stay the proceeding in any of the following cases:
1. A party entered into the arbitration agreement while under a legal incapacity.
2. The arbitration agreement is invalid.
3. The subject-matter of the dispute is not capable of being the subject of arbitration under Ontario law.
4. The motion was brought with undue delay.
5. The matter is a proper one for default or summary judgment.”
BizTech relied on exceptions 2 and 3 above: the agreement was invalid and the subject-matter of the dispute was not capable of being the subject of arbitration.
First, BizTech argued that the Accreditation Contract was invalid (exception 2) because it was unconscionable based on the inequality of bargaining power between the parties and because it was an improvident or unfair bargain (Uber Technologies Inc. v Heller, 2020 SCC 16 at para. 64). The Court found that despite the underlying “take-it-or-leave-it” nature of the Accreditation Contract, BizTech was a sophisticated party with the means and ability to negotiate (paras. 119-125). Further, the arbitration clause, in the context of the entire Accreditation Contract, did not unduly advantage or disadvantage either party (para. 127).
Secondly, BizTech argued that the Decision could not be the subject of arbitration (exception 3), because it was necessarily the subject of judicial review (with which the Court had agreed), and because displacing the judicial review process with arbitration would be contrary to public policy and/or the Constitution Act, 1867. It would allow statutory decision-makers to avoid judicial oversight by delegating their authority to private parties, who could then enter into arbitration agreements.
On this point, the Court emphasized that judicial review is discretionary. The right to apply for a judicial review “does not mean ‘a right to require the court to undertake judicial review’ regardless of the nature of the question before it” (para. 136). In determining whether to exercise its discretion to conduct a judicial review, a court should consider, among other things, the availability and suitability of alternative forms of dispute resolution, and the appropriateness of judicial review in the circumstances (para. 144, citing Strickland v Canada (Attorney General), 2015 SCC 37 at para. 43). This is a highly fact-specific determination, and the existence of an arbitration agreement is one of the facts that would need to be considered.
The Court then identified other factors relevant to determining whether an arbitration agreement is inoperative in light of a judicial review proceeding (para. 153):
“(a) the effect of arbitration on the integrity of the judicial review proceedings; (b) the relative prejudice to the parties to the arbitration agreement; (c) the urgency of resolving the dispute; (d) the effect of a stay of proceedings arising from the judicial review proceedings; and (e) any other factors the court considers material in the circumstances. Each factor may carry more or less weight depending on the circumstances of the case.”
Here, the Court found arbitration to be an appropriate alternative to judicial review, citing benefits including convenience, the ability to select an expert arbitrator, flexibility and the efficient use of resources (para. 148).
The Court also explained that the discretion to consider alternative forms of dispute resolution is already built into the law of judicial review, independent of section 7(1) of the Arbitration Act. Had the stay motion been unsuccessful under section 7(1), the Court would have exercised its discretion not to conduct the judicial review application, given the availability of arbitration (para. 155).
Contributor’s Notes
In BizTech v Accreditation Canada, 2025 ONSC 2689, the Court delivers a strong statement about the practical benefits of arbitration, even where the underlying dispute has a public law component. It highlights advantages that can make arbitration preferable to litigation, including flexibility and efficiency (para. 148). Applying the factors from Strickland v Canada (Attorney General), 2015 SCC 37, the Court found that arbitration is a legitimate alternative to judicial review that achieves many of the same objectives and can allow a dispute to be fairly adjudicated.
This is particularly interesting in light of Peace River Hydro Partners v Petrowest Corp., 2022 SCC 41, where the Court found that the underlying arbitration agreement was inoperative because arbitration would compromise the orderly and efficient resolution of the receivership in that case. There, the Court favoured the structured nature of bankruptcy and insolvency proceedings, particularly when managing multiple stakeholders, over the benefits of arbitration. These are the types of subject matter-specific considerations that will determine the appropriateness of arbitration. The different outcomes in these two cases demonstrate how fact-specific the Peace River analysis is.
This fact-specific analysis may mean that in other cases relating to judicial review, where there is a narrower or more one-sided arbitration clause, or where the subject matter of judicial review affects more stakeholders (and not a single private party with a commercial interest), the outcome may be different than in this case. While the consequences of the decision at issue were largely commercial, and BizTech was a sophisticated party, in other situations, it would be open for a court to find that the public nature of the dispute or the vulnerability of one of the parties did not lend itself to arbitration, and refuse to stay a judicial review.
For now, however, parties that contract with government bodies or those to whom statutory decision-making has been delegated should consider their arbitration clauses to be enforceable, even on decisions that could otherwise be the subject of judicial review. Individuals entering into such agreements should consider both the scope and terms of their arbitration clauses, given that they can be enforceable even if a judicial review application would later be preferable for the party seeking that review. Access to the Court, in the face of such a clause, cannot be assumed.