SUPREME
COURT OF CANADA
Between:
Attorney
General of Canada
Appellant
and
Confédération
des syndicats nationaux and
Fédération
des travailleurs et travailleuses du Québec
Respondents
Official English Translation
Coram: McLachlin C.J. and LeBel, Abella, Rothstein, Moldaver,
Karakatsanis and Wagner JJ.
|
Reasons
for Judgment:
(paras. 1 to 46)
|
LeBel and Wagner JJ. (McLachlin C.J. and
Abella, Rothstein, Moldaver and Karakatsanis JJ. concurring)
|
canada (a.g.) v. csn, 2014 SCC 49,
[2014] 2 S.C.R. 477
Attorney General of Canada Appellant
v.
Confédération des syndicats nationaux and
Fédération des travailleurs et
travailleuses du Québec Respondents
Indexed
as: Canada (Attorney General) v.
Confédération des syndicats nationaux
2014 SCC 49
File No.: 35124.
2014: January 20; 2014: July 17.
Present: McLachlin C.J. and LeBel, Abella, Rothstein, Moldaver,
Karakatsanis and Wagner JJ.
on appeal from the court
of appeal for quebec
Civil
procedure — Motion to dismiss — Stare decisis — Action to have certain
statutory provisions relating to employment insurance declared unconstitutional
— Motion to dismiss on basis that issues being raised had already been decided
by Supreme Court of Canada in earlier decision — Whether motion to institute
proceedings is correct in law even if alleged facts are assumed to be true — Code
of Civil Procedure, CQLR, c. C-25, art. 165(4).
In
1998 and 1999, some unions went to court to strike down certain provisions of
the Employment Insurance Act, S.C. 1996, c. 23 , in particular those
relating to the premium-setting mechanism, which had made it possible to
accumulate surpluses totalling several billion dollars. In their view, the
government was reallocating these surpluses to its general expenses, which
constituted a misappropriation of monies that were supposed to be earmarked for
employment insurance. In 2008, in Confédération des syndicats nationaux v.
Canada (Attorney General), 2008 SCC 68, [2008] 3 S.C.R. 511 (“CSN v.
Canada”), the Court declared that the measures adopted in the Employment
Insurance Act were valid and constitutional, with the exception of those
that applied in 2002, 2003 and 2005, and it suspended the effect of the
declaration of invalidity for 12 months to enable Parliament to rectify the
situation. In 2010, Parliament enacted the Jobs and Economic Growth Act,
S.C. 2010, c. 12 , which closed the Employment Insurance Account and created a
new Employment Insurance Operating Account, retroactive to January 1, 2009.
The Act did not specify that the balance of the Employment Insurance Account,
which at that point amounted to over $57 billion, was to be transferred to the
new Employment Insurance Operating Account. The CSN and the FTQ (the “unions”)
then filed a motion to institute proceedings in order to have certain
provisions of the Jobs and Economic Growth Act declared unconstitutional.
The Attorney General of Canada submitted that the issues raised by the unions
had already been decided by the Court in CSN v. Canada and moved to
dismiss the action under art. 165(4) of the Code of Civil Procedure,
CQLR, c. C-25. The motion to dismiss was granted by the Quebec Superior
Court, but the Court of Appeal set aside that decision. It found that the
action was concerned with the effects of the act of eliminating the balance in
the Employment Insurance Account and the resulting accounting entries, an issue
that had not been disposed of in CSN v. Canada.
Held:
The appeal should be allowed.
Before
granting a motion to dismiss on the basis that an authoritative decision has
already resolved the issue before him or her, the judge must be satisfied in
light of the record and the alleged facts that the precedent relied on by the
applicant concerns the entire dispute that it should normally resolve, and that
it provides a complete, certain and final solution to the dispute.
In
this case, the unions’ action is bound to fail. The action’s underlying
premise is that a balance in the Employment Insurance Account is a debt owed by
the Consolidated Revenue Fund to that account. In the unions’ view, the
premiums paid in the context of the employment insurance program are
constitutionally valid only if they are properly accounted for. However, CSN
v. Canada settled the law in this regard, and it deprives the motion to
institute proceedings of any legal basis. In that case, the Court held that
the amounts collected as contributions to the employment insurance program form
part of the government’s revenues and can be used for purposes other than
paying benefits. Although the connection between the program and the premiums
is a factor that can be considered in determining the nature of the levies, it
is wrong to say that the validity of these levies depends on the existence of
that connection. Furthermore, no debt of the Consolidated Revenue Fund to the
Employment Insurance Account ever existed, since the government cannot be
indebted to itself. Because the action has no reasonable chance of success, art.
165(4) of the Code of Civil Procedure applied and it was appropriate to
dismiss the action at this preliminary stage.
Cases Cited
Considered:
Confédération des syndicats nationaux v. Canada (Attorney General), 2008
SCC 68, [2008] 3 S.C.R. 511; referred to: Westbank First Nation v.
British Columbia Hydro and Power Authority, [1999] 3 S.C.R. 134; 620
Connaught Ltd. v. Canada (Attorney General), 2008 SCC 7, [2008] 1 S.C.R.
131; Groupe d’assurance Hartford/Monitor Insurance Group v. Plomberie P.M. Inc.,
[1984] R.D.J. 17; Groupe Jeunesse Inc. v. Loto-Québec, 2004 CanLII 9766;
R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45; Morier
v. Rivard, [1985] 2 S.C.R. 716; Bohémier v. Barreau du Québec, 2012
QCCA 308 (CanLII); Ville de Hampstead v. Jardins Tuileries Ltée, [1992]
R.D.J. 163; Cheung v. Borsellino, 2005 QCCA 865 (CanLII); Association
provinciale des constructeurs d’habitations du Québec inc. v. Société
d’habitation et de développement de Montréal, 2011 QCCA 1033 (CanLII); Entreprises
Pelletier & Garon (Toitures inc.) v. Agropur Coopérative, 2010 QCCA
244, [2010] R.D.I. 24; R. v. Québec (Société des alcools), 1998 CanLII
13129; Saint-Eustache (Ville de) v. Régie intermunicipale Argenteuil Deux-Montagnes,
2011 QCCA 227 (CanLII); Westmount (City) v. Rossy, 2012 SCC 30, [2012] 2
S.C.R. 136; Oznaga v. Société d’exploitation des loteries et courses du
Québec, [1981] 2 S.C.R. 113; Gillet v. Arthur, [2005] R.J.Q. 42; Racine
v. Harvey, 2005 QCCA 879 (CanLII); Canada (Procureur général) v.
Imperial Tobacco Ltd., 2012 QCCA 2034, [2012] R.J.Q. 2046, leave to appeal
refused, [2013] 2 S.C.R. ix; Canada (Attorney General) v. Bedford, 2013
SCC 72, [2013] 3 S.C.R. 1101.
Statutes and Regulations Cited
Code
of Civil Procedure, CQLR, c. C-25, art. 165.
Employment
Insurance Act, S.C. 1996, c. 23, ss. 66 , 66.1 , 66.3 .
Jobs
and Economic Growth Act, S.C. 2010, c. 12, ss. 2185 et seq.
Authors Cited
Ferland, Denis, et Benoît Emery. Précis de procédure civile du
Québec, vol. 1, 4e éd. Cowansville, Qué.: Yvon Blais, 2003.
Kélada, Henri. Les préliminaires de défense en procédure civile.
Cowansville, Qué.: Yvon Blais, 2009.
Reid, Hubert, et Claire Carrier. Code de procédure civile du
Québec: jurisprudence et doctrine, 30e éd. Montréal:
Wilson & Lafleur, 2014.
APPEAL from a judgment of the Quebec Court of Appeal (Morissette,
Fournier and St-Pierre JJ.A.), 2012 QCCA 1822, [2012] AZ-50901334, [2012] J.Q.
no 9717 (QL), 2012 CarswellQue 10069, setting aside a decision of
Perrault J., 2012 QCCS 128, [2012] AZ-50823420, [2012] J.Q. no 341
(QL), 2012 CarswellQue 261. Appeal allowed.
René LeBlanc and Pierre Salois, for the appellant.
Guy Martin, for the respondent Confédération des syndicats nationaux.
Jean-Guy Ouellet, for the respondent Fédération des travailleurs et travailleuses du Québec.
English version of the judgment of the
Court delivered by
[1]
LeBel and Wagner
JJ. — Judicial resources must
be husbanded to ensure that the courts function properly and that litigants
have access to a justice system that meets the highest possible standards.
With this in mind, lawmakers have given the courts tools to be used, even at a
preliminary stage, to put an end to actions that are bound to fail. In Quebec,
for example, art. 165 of the Code of Civil Procedure, CQLR, c. C-25 (“C.C.P.”),
is one of the mechanisms devised to further this objective. The courts must be
cautious in exercising this power, however. Although the proper administration
of justice requires that the courts’ resources not be expended on actions that
are bound to fail, the cardinal principle of access to justice requires that
the power be used sparingly, where it is clear that an action has no reasonable
chance of success.
[2]
For the reasons that follow, it is in our
opinion clear that the action of the respondents, the Confédération des
syndicats nationaux and the Fédération des travailleurs et travailleuses du
Québec (referred to collectively as the “unions”), is bound to fail. The
application of the doctrine of stare decisis is fatal to it: this
Court’s 2008 decision in Confédération des syndicats nationaux v.
Canada (Attorney General), 2008 SCC 68, [2008] 3 S.C.R. 511 (“CSN v.
Canada”), settled the law on the legal issues this action raises. That
decision therefore deprives the unions’ motion to institute proceedings of any
legal basis. Since the action has no reasonable chance of success, art. 165(4)
of the Code of Civil Procedure applied in the case at bar and it was
appropriate to dismiss the action at this preliminary stage.
I.
Background
[3]
In 1996, the federal government carried out a
major reform of the employment insurance program when it enacted the Employment
Insurance Act, S.C. 1996, c. 23 (“1996 Act”). One of the main
components of the reform concerned the mechanism for setting the premiums
payable by workers and employers who contributed to the program, and thus the
method of financing the program.
[4]
Faced with periodic deficits in the program and
fearing the effects of an economic downturn on the Consolidated Revenue Fund,
Parliament sought, in adopting this reform, to create a reserve to enhance the
program’s stability while avoiding significant fluctuations in premiums. The
reform quickly paid off, as there was a surplus of several billion dollars in
the Employment Insurance Account on January 1, 2009.
[5]
In 1998 and 1999, respectively, the Syndicat
national des employés de l’aluminium d’Arvida and the Confédération des
syndicats nationaux went to court to strike down certain provisions of the 1996
Act, arguing, inter alia, that the premium-setting mechanism was
unconstitutional because the annual surpluses in the account were being
reallocated by the government to its general expenses, including budget deficit
reduction. In their view, this was a misappropriation pure and simple of
monies that were supposed to be earmarked for employment insurance.
[6]
In its decision of December 11, 2008, this Court
declared that the measures adopted in the 1996 Act were valid and
constitutional, with the exception of those that applied in 2002, 2003 and
2005. The Court held that the premium-setting mechanism for those years was
unconstitutional because it enabled the Governor in Council to impose a tax
without a clear delegation of taxing authority (CSN v. Canada, at paras.
72 et seq.).
[7]
For 2002, 2003 and 2005, premium rates had been
set by the Governor in Council under ss. 66.1 and 66.3 of the 1996 Act.
These sections made it possible to disregard the criteria set out in s. 66 ,
which governed the exercise of the power to set rates. Because they were
silent regarding the connection between premiums and benefits, they could not
be viewed as imposing a regulatory charge within the meaning of Westbank
First Nation v. British Columbia Hydro and Power Authority, [1999] 3 S.C.R.
134, and 620 Connaught Ltd. v. Canada (Attorney General), 2008 SCC 7,
[2008] 1 S.C.R. 131. Nor did they contain a delegation of taxing authority by
Parliament to the Governor in Council. The Court accepted that, for the years
in question, the improper exercise by the Governor in Council of the power
conferred on Parliament was a technical defect, and it suspended the effect of
the declaration of invalidity of ss. 66.1 and 66.3 for 12 months to enable
Parliament to rectify the situation.
[8]
On July 12, 2010, Parliament enacted the Jobs
and Economic Growth Act, S.C. 2010, c. 12 (“2010 Act”), which
provided, among other things, for closure of the Employment Insurance Account
and the creation of a new account, called the Employment Insurance Operating
Account, retroactive to January 1, 2009 (ss. 2185 et seq.).
[9]
It is common ground that the 2010 Act did
not specify that the balance of the Employment Insurance Account, which at that
point amounted to over $57 billion, was to be transferred to the new Employment
Insurance Operating Account. This, then, is the context in which the
litigation began.
II.
Judicial History
[10]
In April 2011, the unions filed a motion to
institute proceedings in order to have certain provisions of the 2010 Act
declared unconstitutional.
[11]
The Attorney General of Canada submitted that
the issues raised by the unions had already been decided by this Court in CSN
v. Canada, and accordingly moved to dismiss the action under art. 165(4) C.C.P.
on the basis that it was unfounded in law.
A. Superior Court, 2012 QCCS 128 (CanLII), Perrault J.
[12]
The motion to dismiss was initially granted by
the Quebec Superior Court. Perrault J. rejected the unions’ arguments to the
effect that the impugned provisions were constitutionally invalid because they
broke the necessary connection between the premiums being collected and the
employment insurance program. She pointed out that this Court had held in CSN
v. Canada that the monies from the program belonged to the government and
not to the contributors. Moreover, the connection relied on by the unions was
relevant only for the purpose of establishing the legal nature of the premiums,
not for that of determining whether they were being used in a lawful manner.
The premiums constituted either a regulatory charge or a payroll tax. The
accumulated surpluses formed part of the government’s revenues, did not have to
be used solely for the employment insurance program and were not a debt owed to
the program by the Consolidated Revenue Fund. Perrault J. concluded that the
questions of law raised by the unions had already been disposed of by this
Court in 2008. Their action was accordingly unfounded in law and had to be
dismissed, even at this preliminary stage.
B.
Court of Appeal, 2012 QCCA 1822 (CanLII),
Morissette, Fournier and St-Pierre JJ.A.
[13]
The Quebec Court of Appeal set aside the motion
judge’s decision, finding that the action was concerned more with [translation] “the effects of the act of
eliminating the balance and the resulting accounting entries” that flowed from
the 2010 legislative amendment than with the use of the surpluses that had
accumulated in the account (para. 51). The issue now before the court had not
been disposed of by this Court in its 2008 decision, since the legislation in
question had not yet been enacted. Moreover, most of the relevant facts were
subsequent to that decision. In this context, if the motion judge had assumed
those facts to be true, as she should have, she would have dismissed the motion
to dismiss and allowed the parties to argue the issues raised by the unions on
the merits. The Court of Appeal also noted the unions’ allegation that the
Consolidated Revenue Fund was indebted to the Employment Insurance Account and
stressed that this was one of the facts the trial judge had to assume to be
true.
III. Issue
[14]
In this Court, the issue continues to be how to
dispose of the appellant’s motion to dismiss.
IV. Analysis
A. Article 165(4) of the Code of Civil Procedure
(1) Function and Scope of Article 165(4) C.C.P.
[15]
The appellant’s preliminary motion was based on
art. 165(4) C.C.P. The primary function of that provision, which
establishes a contemporary version of the former procedure known as the “inscription
in law”, is to avoid a trial where an action has no basis in law, even if the
facts in support of it are admitted (Groupe d’assurance Hartford/Monitor
Insurance Group v. Plomberie P.M. Inc., [1984] R.D.J. 17 (C.A.); Groupe
Jeunesse Inc. v. Loto-Québec, 2004 CanLII 9766 (Que. C.A.), at para.
6).
[16]
Thus, the application of art. 165(4) C.C.P. favours
the sound and effective management of judicial resources. In the words of
McLachlin C.J., the power of the courts to dismiss actions at a preliminary stage
“is a valuable housekeeping measure essential to effective and fair
litigation. It unclutters the proceedings, weeding out the hopeless claims and
ensuring that those that have some chance of success go on to trial” (R. v.
Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45, at para. 19;
see also Morier v. Rivard, [1985] 2 S.C.R. 716, at pp. 745-46).
[17]
Dismissing an action at a preliminary stage can
have very serious consequences, however. The courts must therefore be cautious
in exercising this power. As a result, an action will not be dismissed at this
point in the proceedings unless it is plain and obvious that it lacks a basis
in law (Bohémier v. Barreau du Québec, 2012 QCCA 308 (CanLII), at
para. 17; Ville de Hampstead v. Jardins
Tuileries Ltée, [1992] R.D.J. 163 (C.A.); Cheung v. Borsellino,
2005 QCCA 865 (CanLII); Association provinciale des constructeurs
d’habitations du Québec inc. v. Société d’habitation et de
développement de Montréal, 2011 QCCA 1033 (CanLII)).
[18]
In this regard, the Quebec Court of Appeal noted
that, [translation] “given the
serious consequences of dismissing an action without considering it on its
merits, litigation should not be ended at an early stage on a motion to dismiss
absent a situation that is plain and obvious” (Entreprises Pelletier
& Garon (Toitures inc.) v. Agropur Coopérative, 2010 QCCA
244, [2010] R.D.I. 24, at para. 4 (emphasis added)).
[19]
This “plain and obvious” situation that opens
the door to the dismissal of an action must be apparent from the allegations
set out in the motion to institute proceedings and the exhibits filed in
support of it (Groupe Jeunesse Inc.; R. v. Québec (Société des
alcools), 1998 CanLII 13129 (Que. C.A.); Saint-Eustache (Ville de) v.
Régie intermunicipale Argenteuil Deux-Montagnes, 2011 QCCA 227
(CanLII)).
[20]
However, although the facts alleged in
the motion must be assumed to be true (Westmount (City) v. Rossy,
2012 SCC 30, [2012] 2 S.C.R. 136, at para. 15; Oznaga v. Société
d’exploitation des loteries et courses du Québec, [1981] 2 S.C.R. 113), the
court is not bound by the legal characterization of those facts (Gillet
v. Arthur, [2005] R.J.Q. 42 (C.A.), at para. 25; Racine v. Harvey, 2005 QCCA 879 (CanLII), at para.
10; Société des alcools; Bohémier, at para. 17).
[21]
As a result, a judge deciding whether an action
should be dismissed must determine whether the allegations of fact set
out in the motion to institute proceedings are [translation]
“of such a nature as to open the door to the conclusions being sought” by the
applicant (Association provinciale des constructeurs d’habitations du Québec
inc., at para. 14). In every case, the dismissal of the action will be
appropriate only if all the facts to be considered are set out in the motion to
institute proceedings and there is no question that the relevant legal rule
applies to them (H. Reid and C. Carrier, Code de procédure civile du
Québec: jurisprudence et doctrine (30th ed. 2014), at para. 165/200).
(2) Dismissal of an Action on the Basis of Stare Decisis
[22]
Judgments rendered under art. 165(4) C.C.P. often
concern situations in which the right being claimed is clearly prescribed, the
law prohibits recourse to the courts, or there is quite simply no legal
relationship between the parties (see D. Ferland and B. Emery, Précis de procédure
civile du Québec (4th ed. 2003), vol. 1, at pp. 286-87; H. Kélada, Les
préliminaires de défense en procédure civile (2009), at pp. 214 et seq.).
However, an action will sometimes be dismissed if it is clear that an
authoritative decision has already resolved the issue or issues raised in the
motion to institute proceedings. In the Attorney General of Canada’s view,
that is in fact the case in this appeal.
[23]
He submits that this case concerns a situation
in which a previous decision of this Court has settled the law on the main
legal issues involved in the appeal. The appellant does not argue that this is
a case of res judicata on the basis of which art. 165(1) could be
invoked. Rather, his argument is that the law applicable to the fundamental issues
that will determine the outcome of the appeal was settled by this Court in its
2008 decision in CSN v. Canada in exercising its power as the ultimate
interpreter of constitutional and public law. An interpretation contrary to
the one adopted by the Court in that case would have no legal basis in light of
the case’s status as a precedent (Canada (Procureur général) v. Imperial
Tobacco Ltd., 2012 QCCA 2034, [2012] R.J.Q. 2046 (“Canada v. Imperial
Tobacco”), at paras. 125-27, per Gascon J.A., leave to appeal
refused, [2013] 2 S.C.R. ix; Canada (Attorney General) v. Bedford, 2013
SCC 72, [2013] 3 S.C.R. 1101, at paras. 38 and 43-46, per McLachlin C.J.).
[24]
Of course, the doctrine of stare decisis
is no longer completely inflexible. As the Court noted in Bedford, the
precedential value of a judgment may be questioned “if new legal issues are
raised as a consequence of significant developments in the law, or if there is
a change in the circumstances or evidence that fundamentally shifts the
parameters of the debate” (para. 42). Where, on the other hand, the legal
issue remains the same and arises in a similar context, the precedent still
represents the law and must be followed by the courts (Bedford, at para.
46).
[25]
Although relatively uncommon in Quebec civil
procedure, the mechanism for dismissing actions at a preliminary stage on the
basis of stare decisis is similar to the res judicata exception
(art. 165(1) C.C.P.). Under both of them, the legal issues raised by
the applicant must already have been clearly resolved by the courts. However,
unlike res judicata, stare decisis does not necessarily require
that the dispute be between the same parties. What must be established is that
the issue is the same and that the questions it raises have already been
answered by a higher court whose judgment has the authority of res judicata.
[26]
In Canada v. Imperial Tobacco, Gascon J.A.,
as he then was, explained this as follows:
[translation]
In this context, the manufacturers’ argument that this case is not res judicata,
because Imperial was not decided by a court of competent civil law
jurisdiction or because strict identity of parties, cause and object is not
established, does not appear to me to be determinative. I see no need for
further discussion of the distinctions the manufacturers raise with respect to
these identities of parties, cause and object, which in their view refute the
AGC’s res judicata argument. In my opinion, the appropriate principle
to apply to resolve the issue is instead stare decisis.
The Superior Court should have held on the
basis of stare decisis that it was bound by Imperial. The
Supreme Court, by ruling as it did on the issue of the AGC’s immunity in
relation to the course or principle of action challenged by the manufacturers,
had in a sense barred the manufacturers’ actions in warranty by rendering
them unfounded in law, even if the alleged facts were assumed to be true.
Stare
decisis is a less stringent basis for an argument
than res judicata, since it requires only a similar or analogous factual
framework. Stare decisis is a principle “under which a court must follow earlier judicial decisions when the same points arise
again in litigation” [Black’s Law Dictionary (9th ed. 2009), at p. 1537].
It applies, of course, to decisions of the Supreme Court, particularly in the
area of public law as here, where the parties were involved in earlier
litigation on the specific question at issue. [Emphasis
added; paras. 125-27.]
[27]
This being said, before granting a motion to
dismiss an action because it has no basis in law, the judge must also be
satisfied in light of the record and the alleged facts that the precedent
relied on by the applicant actually concerns the entire dispute that it
should normally resolve, and that it provides a complete, certain and final
solution to the dispute. In case of doubt, the judge may not grant the motion
to dismiss, but must instead give the parties an opportunity to argue the
issues on the merits.
B. Application of the Law to the Facts
(1) True Nature of the Action
[28]
The appellant submits that the action in the
case at bar must be dismissed on the basis of stare decisis. To rule on
this argument, it will be necessary to identify the nature of the action that
was the subject of the Court’s judgment in 2008 and determine how it relates to
the allegations and the conclusions sought by the unions in their action
brought in 2011.
[29]
In a case such as this, the judge sitting on the
motion to dismiss can consider more than just form when reviewing the record in
order to properly establish the essential nature of the action, which will
enable him or her to reject arguments that are new only in how they are
presented.
[30]
The constitutional questions the Court answered
in its 2008 judgment were stated as follows:
1. Do ss. 66
to 66.3 and 72 of the Employment Insurance Act, S.C. 1996, c. 23 ,
exceed, in whole, in part or through their combined effect, the unemployment
insurance power provided for in s. 91 (2A) of the Constitution Act, 1867 ?
2. If the
answer to question 1 is affirmative, do ss. 66 to 66.3 and 72 of the Employment
Insurance Act, S.C. 1996, c. 23 , exceed, in whole, in part or through their
combined effect, the taxation power provided for in s. 91(3) of the Constitution
Act, 1867 ?
3. If
the answer to question 2 is negative, do ss. 66 to 66.3 and 72 of the Employment
Insurance Act, S.C. 1996, c. 23 , satisfy the requirements of s. 53 of the Constitution
Act, 1867 ?
4. Do ss. 24,
25, 56 to 65.2, 73, 75, 77, 109(c) and 135(2) of the Employment
Insurance Act, S.C. 1996, c. 23 , exceed, in whole, in part or through their
combined effect, the unemployment insurance power provided for in s. 91(2A) of
the Constitution Act, 1867?
5. If the
answer to question 4 is affirmative, are ss. 24 , 25 , 56 to 65.2 , 73 , 75 , 77 ,
109 (c) and 135(2) of the Employment Insurance Act, S.C. 1996, c. 23 ,
validly based on the federal spending power?
(CSN v. Canada, at para. 17)
[31]
In the instant case, the unions are asking the
courts for the following conclusions:
[translation]
Declare that any change in the mechanism for setting premium rates may not
disregard the sums collected and recorded in the Employment Insurance Account;
Declare that the balance in the Employment
Insurance Account may not be erased and must be allocated to financing the
program;
Declare that sections 2185 to 2187 , 2189 , 2190 ,
2193 to 2199 , 2203 , 2204(1) as it relates to subsections 66(1), 2204(2), 2207
and 2208 of the Act to implement certain provisions of the budget tabled in
Parliament on March 4, 2010 and other measures are invalid;
(Motion
to Institute Proceedings (“M.I.P.”), at p. 29; A.R., vol. I, at p. 55)
[32]
There is no question that the unions ultimately
want the moneys recorded in the Employment Insurance Account to be allocated
exclusively to the payment of benefits. In their view, the sums collected for
the former program should be used solely to finance the new program. That is
the unions’ objective in this case.
[33]
In considering the legal bases for the new action,
we note that the unions’ underlying premise is that [translation] “a balance in the Employment Insurance Account . . .
is a debt owed by the Consolidated Revenue Fund to the Employment Insurance
Account” (M.I.P., at para. 90; A.R., vol. I, at p. 53).
[34]
The unions believe that the constitutional
validity of the premiums depends on the transfer of that debt from the former
Employment Insurance Account to the new Employment Insurance Operating
Account. They argue that [translation]
“[t]his debt cannot be erased . . . without bringing into question
the constitutional validity of the sums that have been collected and recorded”
(M.I.P., at para. 92; A.R., vol. I, at p. 54). In support of their argument,
the unions quote the following passage from this Court’s reasons in CSN v.
Canada:
However,
it is clear that the Account does not constitute — as is the case of pension
fund assets — a trust fund or patrimony by appropriation. It forms part of
Canada’s government accounting, and premiums form part of the government’s
revenues. The government’s use of it does not, therefore, constitute a
misappropriation of employment insurance monies. Those monies were used like
any other part of the revenues in the Consolidated Revenue Fund, and the
appropriate accounts were kept. [Emphasis added; para. 74.]
[35]
According to the unions, the reason why the
Court held that the sums collected as premiums had been neither stolen nor
misappropriated by the government was that they had been properly recorded in
the Employment Insurance Account (M.I.P., at para. 89; A.R., vol. I, at p. 52).
In short, the premiums paid in the context of the program are constitutionally
valid only if they are properly accounted for. According to this argument,
without such an accounting link, the use of premiums for any other purposes
would constitute a misappropriation of monies collected to finance the
employment insurance program and would therefore be unconstitutional.
[36]
As the unions see it, this issue was not settled
by the Court in 2008. The appellant sees things quite differently, however.
The Employment Insurance Account was merely an accounting tool that contained
no property or loans, and it was indebted to no one. All transactions — the
payment of premiums or of benefits — were conducted through the Consolidated
Revenue Fund, which means that the Employment Insurance Account was neither a
trust fund nor a patrimony by appropriation.
(2) Is the Action Bound to Fail?
[37]
As we mentioned above, to decide whether the
action should be dismissed under art. 165(4) C.C.P., this Court must
determine whether it is bound to fail even if the alleged facts are true.
Given that the appellant is relying on stare decisis, we must therefore
determine whether the Court’s decision in CSN v. Canada resolves the
entire dispute and provides a complete, certain and final solution to the
unions’ action in this case.
[38]
In our opinion, the precedent relied on by the
appellant does in fact do so. As a result, art. 165(4) C.C.P. applies,
and the action could be dismissed in the interest of the proper administration
of justice, even at a preliminary stage.
[39]
We reiterate, first, that in the unions’ view, [translation] “a balance in the
Employment Insurance Account . . . is a debt owed by the Consolidated
Revenue Fund to the Employment Insurance Account” (M.I.P., at para. 90; A.R.,
vol. I, at p. 53). The success of their action is directly dependent on the
validity of this argument, which is its cornerstone, as the Quebec Court of Appeal
in fact recognized. However, the Court of Appeal made a critical error in its
analysis with respect to this argument by treating the allegation that the
Consolidated Revenue Fund was indebted to the Employment Insurance Account as a
fact that had to be assumed true for the purposes of the motion to dismiss,
whereas it was really a legal characterization of the facts.
[40]
To determine whether the Consolidated Revenue
Fund was indebted to the Employment Insurance Account, it is necessary to
analyze the nature of the Fund and the Account, as well as the relationship
between them. In other words, a conclusion that the former was indebted to the
latter presupposes a particular legal characterization of their relationship. In
sum, this Court must determine whether, from a legal standpoint, the
Consolidated Revenue Fund was indebted to the Employment Insurance Account and,
ultimately, whether the unions’ basic legal argument is valid.
[41]
In this respect, we are of the opinion that the
Court’s decision in CSN v. Canada is of no assistance to the unions. On
the contrary, it deprives their action of any reasonable chance of success. In
that case, the Court stated that the Employment Insurance Account “does not
constitute — as is the case of pension fund assets — a trust fund or patrimony
by appropriation. It forms part of Canada’s government accounting, and
premiums form part of the government’s revenues” (para. 74 (emphasis
added)). As government revenues, the amounts collected as contributions to the
employment insurance program can therefore be used for purposes other than
paying benefits.
[42]
In fact, no debt of the Consolidated Revenue
Fund to the Employment Insurance Account ever existed. Like any legal or
natural person, the government cannot be indebted to itself. It follows that
any argument based on the existence of such a debt is bound to fail. The
enactment of the 2010 Act did not alter this factual and legal
situation.
[43]
Moreover, in CSN v. Canada, the Court
held that the connection between the program and the premiums is a factor that
can be considered in determining the nature of the levies. But it is
wrong to say that the validity of these levies depends on the existence
of that connection. As we stated in that case, the government can, lawfully,
use employees’ premiums for purposes other than financing the employment
insurance program.
[44]
Accordingly, even if we accept the unions’
argument that the connection between premiums and the employment insurance
program was broken by the decision not to transfer the balance from the former
account to the new one, this does not mean that the validity of the levies was
compromised.
V.
Conclusion
[45]
In our opinion, it is clear that the unions’
action has no reasonable chance of success. On the basis of stare decisis,
it is apparent that their main argument that the Consolidated Revenue Fund was
indebted to the Employment Insurance Account is unfounded, and this conclusion
dictates the outcome of the case. As a result, this Court’s decision in CSN
v. Canada provides a complete, certain and final solution to the entire
dispute that the unions are trying to revive. Their action was therefore
properly dismissed by Perrault J. under art. 165(4) C.C.P.
[46]
For these reasons, we would allow the appeal and
restore the motion judge’s judgment, with costs throughout.
Appeal
allowed with costs throughout.
Solicitor for the
appellant: Attorney General of Canada, Ottawa and Montréal.
Solicitors for the respondent Confédération des syndicats nationaux:
Roy Évangéliste avocats, Montréal.
Solicitors for the
respondent Fédération des travailleurs et travailleuses du Québec: Ouellet,
Nadon & Associés, Montréal.
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