Crowe v. The Queen, docket 1999-4276(IT)G

Date: 20020307

Dockets: 1999-4276-IT-G

BETWEEN:

DOUGLAS L. CROWE,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent,

AND

1999-4278-IT-G

KENNETH A. CUSH,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Reasons for Judgment

Rowe, D.J.T.C.C.

[1]      The appellant - Kenneth A. Cush - in each of the 1996 and 1997 taxation years - claimed as a deduction - inter alia - the sum of $1,500 as "annual union, professional or like dues". The appellant - Douglas Crowe - in the 1996 taxation year - claimed a deduction in the same amount on the same basis. The Minister of National Revenue (the "Minister") disallowed the deduction claimed by each appellant on the basis the membership dues paid by each appellant to the Alberta Provincial Judges'Association (Association) were not paid to the type of association or trade union encompassed by the relevant provisions of the Income Tax Act (the "Act") on the basis that judges of the Provincial Court of Alberta were not civil servants or public servants - as contemplated by the Act - and therefore dues paid to the Association were not deductible.

[2]           Counsel agreed the two within appeals would be heard on common evidence.

[3]      A binder of documents tabbed A through J, inclusive, was filed as Exhibit A-1 and reference to any document(s) at a particular tab indicates it will be found within Exhibit A-1. Counsel also filed an Agreed Statement of Facts (Agreed Facts) and a copy thereof may be found in Exhibit A-1 immediately preceding tab A. The agreed facts are as follows:

AGREED STATEMENT OF FACTS

The parties, through their respective solicitors and for the purposes of this appeal only, hereby admit the following facts provided that such admissions are made for the purpose of this appeal only and may not be used against either party on any other occasion or by any other party.

1. The Honourable Kenneth A. Cush, the Appellant in appeal 1999-4278(IT)G and the Honourable Douglas L. Crowe, the Appellant in appeal 1999-4276(IT)G, are Judges of the Provincial Court of Alberta.

2. During the taxation years in issue, being 1996 and 1997, the Appellants were members of the Alberta Provincial Judges' Association (the "Association").

3. The Association is a society organized under the Societies Act, R.S.A. 1980, c. S-18, and its membership during the taxation years in issue and currently has been comprised of over 80% the Judges of the Provincial Court of Alberta. The stated legal objects, as amended on September 23, 1993 and filed on March 2, 1994 are attached hereto as Exhibit "A" and the by-laws of the Association are attached as Exhibit "B".

4. In each of the taxation years in issue, each of the Appellants made a payment to the Association in the amount of $1,500 in respect of annual membership dues. The legal issues that arise in these appeals is whether these payments are deductible under paragraph 8(1)(i)(iv) of the Income Tax Act, R.S.C. 1985, c. 1 (as amended for the taxation years at issue (the "Act") or, in the alternative, under paragraph 8(1)(b) of the Act.

5. During the taxation years in issue, the amount of $1,500 represented the annual membership dues payable by members of the Association. Prior to April 1, 1995, the annual membership dues were $500 per year, but were increased at that time to $1,500 as a result of the additional costs of the Association's activities and actions that were undertaken regarding judicial compensation and judicial independence.

6. In 1996 and 1997, and to this date, a few Judges of the Provincial Court of Alberta declined and continue to decline to join the Association. In 1996 and 1997, and to this date, it is not mandatory that all Judges of the Provincial Court of Alberta join the Association and the amount of annual membership dues paid to the Association are not a condition of appointment as a Judge of the Provincial Court of Alberta.

7. The Association has historically represented the interests of its members of the Provincial Court of Alberta and its actions in this respect are more closely described in the following paragraphs.

8. Over the past 12 years, the actions and activities of the Association regarding judicial compensation and judicial independence, stem from the proposals enunciated in a decision of Her Majesty the Queen in Right of Alberta's Lieutenant Governor-in-Council (for ease of reference, hereinafter referred to as the Alberta Government) in 1988 to change the manner in which is set the remuneration of the holder of the office of Judge of the Provincial Court of Alberta.

9. Prior to January 1, 1989, the salary of a Judge of the Provincial Court of Alberta was set as a specified percentage of the salary of a Justice of the Court of Queen's Bench of Alberta and, prior to April 1, 1980, as a specified percentage of the salary of a Judge of the District Court of Alberta. For full-time sitting Judges of the Provincial Court of Alberta, the specified percentage was 80%. For Assistant Chief Judges of the Provincial Court of Alberta and the Chief Judge of the Provincial Court of Alberta, the specified percentage was 85% and 90% respectively. In turn, the salaries of the District Court Judge and later of the Queen's Bench Justice were set following a review of these salaries by an independent federal commission.

10. As of January 1, 1989, the Government of Alberta, without the consent of the Judges of the Provincial Court of Alberta, decided to discontinue to adjust their salaries to a rate equal to 80% of that paid to the Justices of the Court of Queen's Bench of Alberta. As a result, after fiscal year 1988-1989, the Alberta Government set the annual salaries of Provincial Court Judges without regard to the 80% formula.

11. In 1989, the Association retained counsel to represent it and its members in respect of issues regarding compensation and benefits paid to Provincial Court Judges. Between 1989 and March of 1994, representations were made on behalf of the Association in an attempt to reinstate some sort of fixed percentage formula. These representations did not result in any changes to the method of salary determination.

12. After 1988, the only increase that the Judges of the Provincial Court of Alberta received was a 9% salary increase in 1991. Had the 80% formula been used for the fiscal years 1989, 1990, 1991, 1992 and 1993, a full-time Provincial Court Judge would have received approximately $50,000 more than he or she actually did receive during those years. A comparative table outlining these discrepancies is produced as Exhibit "C" to this Agreed Statement of Facts.

13. In March 1994, counsel for the Association advised the Alberta Government of its intention of commencing a lawsuit against the Alberta Government unless certain demands regarding the setting of salaries of the Judges of the Provincial Court of Alberta were met. In late March 1994, an agreement was entered into between the Association and the Alberta Government. The agreement provided, inter alia, that the parties would negotiate in good faith towards the early resolution of the dispute between them and the Association agreed to refrain from commencing proceedings pending negotiations.

14. On March 31, 1994, the salaries of the Judges of the Provincial Court of Alberta were reduced by 5% by Order-in-Council A.R. 116/94. Order-in-Council A.R. 116/94 provided that salaries paid by the Alberta Government were subject to a 5% reduction. Although the Judges of the Provincial Court of Alberta were aware in advance that they might be included in the Alberta Government's deficit reduction plan, they were not made aware in advance that they would definitely be so included. The Provincial Court Judges first became aware of their salary reduction on March 31, 1994 and the 5% reduction was imposed without their consent.

15. On August 2, 1994, the Association and 69 named Judges of the Provincial Court of Alberta caused to be issued a Statement of Claim against the Alberta Government. A copy of the Statement of Claim and the Amended Statement of Claim is attached as Exhibit "D" and Exhibit "E" to this Agreed Statement of Facts.

16. This action was stayed by the Court of Queen's Bench pending the resolution of challenges to the independence of the Provincial Court of Alberta raised in a number of criminal cases before the Alberta Court of Appeal and the Supreme Court of Canada that called into question the independence of the Provincial Court of Alberta. The decision is reported at (1996), 182 A.R. 236.

17. These challenges put in issue the non-adherence to the 80% formula, the 5% salary reduction, and changes to the Judges' pension plan and, were made, in particular, in the cases of R. v. Campbell, R. v. Ekmecic and R. v. Wickman and reported at (1994), 160 A.R. 81.

18. Ultimately, the Court of Queen's Bench held, inter alia, that the March 31, 1994 Order-in-Council reducing the salaries of Judges of the Provincial Court of Alberta by 5% was invalid and that there was a constitutional obligation to maintain the financial security of the Judges of the Provincial Court of Alberta to correspond with the increases in the cost of living.

19. The Attorney General of Alberta appealed the judgment of the Court of Queen's Bench to the Alberta Court of Appeal and in that proceeding the Association sought and obtained status as an intervener.

20. The Alberta Court of Appeal held that it did not have jurisdiction to hear the appeals and did not consider the merits of the arguments in a decision reported at (1995), 169 A.R. 178.

21. Following the Alberta Government's unsuccessful appeal to the Alberta Court of Appeal, the Alberta Government paid a lump sum amount to each of the Judges of the Provincial Court of Alberta canceling the 5% reduction in salaries (payments aggregated approximately $2,000,000).

22. The Attorney General of Alberta then sought and obtained leave to appeal the decision of the Alberta Court of Appeal to the Supreme Court of Canada.

23. The Association sought and obtained leave to intervene from the Supreme Court of Canada. Attached as Exhibits "F", "G" and "H" are the Association's Notice of Motion for Leave to Intervene, the Affidavit of Judge Jerry N. Le Grandeur in support of the Notice of Motion for Leave to Intervene and Memorandum of Argument of the Alberta Provincial Judges' Association.

24. The Supreme Court of Canada heard the appeal of the decision of the Alberta Court of Appeal as well as appeals of similar decisions from other provinces. The reasons for judgment of the Supreme Court of Canada are reported at [1997] 3 S.C.R. 3, [1998] 1 S.C.R. 3 and [1998] 2 S.C.R. 443. In addition, the Association submitted a motion for direction from the Supreme Court of Canada regarding the payment of costs incurred in independent judicial compensation commissions.

25. In Alberta, a first independent Judicial Compensation Commission (the "First Commission") was established in 1998 with the mandate of determining judicial compensation for Judges of the Provincial Court of Alberta to April 30, 2000.

26. The framework for the establishment of the First Commission was reached by way of agreement made between the Minister of Justice, the Chief Judge of the Provincial Court and the Association. Attached as Exhibit "I" is the Framework Agreement.

27. Under the Framework Agreement, the Association presented evidence and the position of the Judges before the First Commission. The Association presented detailed written briefs and expert evidence on salary and pension, and called four Judges to give evidence before the First Commission. The Alberta Government and the Association jointly prepared an agreed statement of facts and jointly submitted documents.

28. The First Commission recommended that Provincial Court Judges' salaries $113,964 (frozen since 1991) be increased to $142,000 for 1998 and $152,000 for 1999 and adjustments to the pension from April 1, 1998.

29. By Order-in-Council 346/98, the Alberta Government rejected the recommendations, substituting a lower salary increase and modified the pension recommendations. The Alberta Government effected these changes to the judicial remuneration of the Judges of the Provincial Court of Alberta by Order-in-Council 176/98 and 177/98.

30. The Association applied to the Alberta Court of Queen's Bench for declarations that Orders-in-Council 346/98, 176/98 and 177/98 were unconstitutional. The Association submitted written briefs and was heard on January 15, 1999.

31. The Court of Queen's Bench allowed the Application in a judgment reported at (1999), 236 A.R. 251.

32. The Alberta Government appealed the judgment of the Court of Queen's Bench to the Alberta Court of Appeal. The Association resisted the appeal, filed written argument and was heard on April 30, 1999.

33. The Alberta Court of Appeal dismissed the Alberta Government's appeal in a judgment reported at (1999), 237 A.R. 276.

34. The Alberta Government sought leave to appeal the decision of the Alberta Court of Appeal to the Supreme Court of Canada. The Association opposed the application by filing a Response on Application for Leave to Appeal. The Supreme Court of Canada denied leave to appeal in a judgment dated June 8, 2000.

35. In the fall of 1999, discussions were held between the Association and the Alberta Government regarding the framework and conduct of the next independent Judicial Compensation Commission (the "Second Commission"). An agreement between the Association and the Alberta Government was reached in substantially the form that became Order-in-Council 2000/100.

36. The Second Commission was established to determine judicial compensation of Judges of the Provincial Court of Alberta for the period of April 1, 2000 to March 31, 2003. The Association represented the interests of the Judges in the Second Commission which led to further increases and improvements in judicial compensation for the Judges of the Provincial Court of Alberta for the period of April 1, 2000 to March 31, 2003. A copy of the Report and Recommendations of the 2000 Judicial Compensation Commission is attached as Exhibit "J".

37. In 2000, the action against the Alberta Government was settled by way of a letter agreement, portions of which are contained in the Report and Recommendations of the 2000 Judicial Compensation Commission.

38. Since 1994, approximately 90% of the time of the executive of the Association has been spent in dealing with the issues described herein that deal with judicial compensation, judicial independence and the lawsuit against the Alberta Government. In particular, this time was spent undertaking the following activities:

(a) all activities deemed appropriate and necessary by the Association to commence, prosecute, and settle the action against the Alberta Government, including all discussions with and instructions to counsel, consideration of advised courses of action, discussions with and reports to the membership of the Association;

(b) all activities deemed appropriate and necessary by the Association to obtain status as an intervener in the Alberta Court of Appeal and the Supreme Court of Canada in the Campbell et al. matters, including discussions with and instructions to counsel, consideration of advised courses of action, and discussions with and advising the membership of the Association;

(c) all activities deemed appropriate and necessary by the Association to participate as an intervener in the Alberta Court of Appeal and the Supreme Court of Canada, including discussions with and instructions to counsel, consideration of advised courses of action, discussions with and reports to the membership of the Association;

(d) all activities deemed appropriate and necessary by the Association to reach the Framework Agreement, including all negotiations with the Alberta Government, discussions with and instructions to counsel, consideration of advised courses of action, discussions with and reports to the membership of the Association;

(e) all activities deemed appropriate and necessary by the Association to be undertaken under the Framework Agreement for the First Commission, including discussions with and instructions to counsel, consideration of advised courses of action, retaining of expert witnesses, preparation for and presentation to the First Commission, and discussions with and reports to the membership of the Association;

(f) all activities deemed appropriate and necessary by the Association to consider the decision of the Alberta Government to reject the recommendations of the First Commission, including discussions with and instructions to counsel, consideration of advised courses of action, to commence and prosecute the application to the Court of Queen's Bench to set aside the Alberta Government's decision that rejected the recommendations of the First Commission, to oppose the Alberta Government's appeal to the Alberta Court of Appeal, and to oppose the Alberta Government's application for leave to appeal the Alberta Court of Appeal decision to the Supreme Court of Canada;

(g) all activities deemed appropriate and necessary by the Association to discuss and agree with the Alberta Government the framework and conduct of the Second Commission, the preparation and negotiation of the joint proposal to the Second Commission, discussions with and instructions to counsel for the Association regarding the Second Commission, consideration of advised courses of action, and discussions with and reports to the membership of the Association;

(h) all activities deemed appropriate and necessary by the Association to monitor the state of judicial independence in the Province of Alberta and in particular in respect of the Provincial Court of Alberta;

(i) all activities deemed appropriate and necessary by the Association to consider draft regulations that would implement the changes to the Judges' pensions recommended by the First Commission and the Second Commission and the changes to the Judges' pensions required by the settlement of the lawsuit against the Alberta Government including reviewing and considering comments of actuaries and legal counsel and discussions with Alberta Treasury, the Attorney General and Legislative Council;

(j) all activities deemed appropriate and necessary in funding the costs associated with the activities described in (a) through (i);

(k) all activities deemed appropriate and necessary to review and consider issues of judicial tenure, including making representations to the Judicial Selection Process Review Committee which was considering judicial selection processes, the composition and procedures of the nominating body, criteria for appointment of Judges of the Provincial Court and administrative Judges and terms of judicial appointments; and

(l) all activities to review and consider the propriety, extent and parameters of the Association's involvement in the dispute between Provincial Court Judge Reilly and Chief Judge Wachowich the subject-matter of which is described at (1998), 229 A.R. 218 (Q.B.), (1999), 234 A.R. 1 (Q.B.) and (2000), 266 A.R. 296 (C.A.).

In connection with the matters described in subparagraphs (a) through (i), the Association has paid or incurred legal fees of approximately $1,500,000.

39. During that same period, the Association's activities also included the organization and conduct of annual education seminars for the Judges and the promotion of collegiality among the Judges of the Provincial Court of Alberta and Provincial Court Judges in other provinces. The cost of the annual education seminars is covered by a grant received from the Alberta Government.

[4]           Neither party called any witnesses nor produced any further documents in evidence.

[5]           Counsel for the appellants submitted the issue to be decided is as follows:

Whether the amounts paid by the appellants to the Alberta Provincial Judges' Association are membership dues in an association of public servants the primary purpose of which is to promote the improvement of its members' conditions of employment or work pursuant to subparagraph 8(1)(i))iv) of the Act.

[6]           Although pleaded - in the alternative - in each Notice of Appeal filed on behalf of each appellant, submission on the issue of deductibility of membership dues pursuant to paragraph 8(1)(b) of the Act - on the basis there was a connection between payment of Association dues and the establishment of a right to salary or wages owed to each appellant - and to all other judges of the Provincial Court of Alberta - was abandoned by counsel for the appellants.

[7]      The relevant portions of subparagraph 8(1)(i)(iv) of the Act read as follows:

8. (1) In computing a taxpayer's income for a taxation year from an office or employment, there may be deducted such of the following amounts as are wholly applicable to that source or such part of the following amounts as may reasonably be regarded as applicable thereto:

...

   (i) amounts paid by the taxpayer in the year as ...

   ...

(iv) annual dues to maintain membership in a trade union as defined

      (A) by section 3 of the Canada Labour Code, or

     (B) in any provincial statute providing for the investigation, conciliation or settlement of industrial disputes,

     or to maintain membership in an association of public servants the primary object of which is to promote the improvement of the members' conditions of employment or work, ...

[emphasis added]

[8]           Counsel for the appellants conceded that the appellants must be public servants in order for the provision to apply and, once that qualification has been met, it is necessary to demonstrate the primary object of said association of public servants was to promote the improvement of members' conditions of employment or work. In relation to this second component, counsel referred to the change undertaken by the Association with respect to its object clauses on March 2, 1994 - tab A - pursuant to a Certificate of Special Resolution dated September 20, 1993. The new objects were stated to be:

(a) to promote, provide and participate in the ongoing judicial education of judges in the Provincial Court of Alberta, including without restricting the generality of the foregoing:

(i) providing judges with the knowledge, skills, techniques and awareness required to perform their judicial responsibilities fairly, correctly and efficiently;

(ii) improving and enhancing through education the administration of justice, including the fair and efficient management of trials and the reduction of court delay; and

(iii) promoting each judge's commitment to the highest standards of personal growth, official conduct and social awareness;

(b) to discuss, study and enhance the administration of justice with special emphasis on the administration of justice in the Provincial Court of Alberta including, without in any way restricting the generality of the forgoing, to work towards the creation of reasonable uniformity as far as the Association deems practicable and desirable, in matters relating to procedure and sentencing in the said Court;

(c) to discuss, study and consider matters of common interest to or relating to the welfare of judges of the Provincial Court of Alberta and to recommend to the appropriate authorities the enactment and implementation of such measures and policies as will, in the opinion of the Association, enhance the membership thereof to the end that there will be strong independent Provincial Court of Alberta better able to continually improve its role in the administration of justice within Alberta; and

(d) to discuss and study existing substantive and adjectival law with a view to recommending to the appropriate legislative authorities such suitable and appropriate legislative changes as may seem meet to the better administration of justice in the Province of Alberta.

[9]           Counsel submitted that to "promote" the improvement of conditions of employment or work was to undertake some actions in that regard and that ordinary usage of that word embraced the substantial activities undertaken by the Association during the relevant years as set forth in the Agreed Facts. In addition, the first criterion set out in the preamble of subsection 8(1) was met because the appellants have - as a source of income - their remuneration from the office of Provincial Court Judge and the annual membership dues paid to the Association - currently constituted by over 80% of the Alberta Provincial Court Judges - are wholly applicable to that source of income.

[10]           Counsel further submitted that, although there is no definition of the term

"association" in the Act, the Honourable Judge Bowman (now Associate Chief Judge) of the Tax Court of Canada considered the meaning of the word in the case of L.I.U.N.A. Local 527 Member's Training Trust Fund v. The Queen, 92 DTC 2365. At p. 2375, Judge Bowman stated:

... The term "association" is a somewhat vague one of some breadth and elasticity. It implies a relationship between two or more persons for a common purpose. I doubt that I can improve on the definition in two standard dictionaries:

Oxford English Dictionary 2nd Edition:

A body of persons who have combined to execute a common purpose or advance a common cause; the whole organization which they form to effect their purpose; a society: e.g. the British Association for the Advancement of Science, the National Football Association, the Church Association, The Civil Service Supply Association.

Robert, Dictionnaire Alphabétique et Analogique de la Langue Française:

Groupement de personnes qui s'unissent en vue d'un but déterminé.

[11]     In accordance with the above statement, the position of the appellants is that the Association is an association within the meaning of subparagraph 8(1)(i)(iv) of the Act by virtue of being a society organized and comprised of a body of persons - Alberta Provincial Judges - with a common purpose as set forth in the Association's relevant documents, filed with the Registrar of Corporations of the Province of Alberta as required by the Societies Act.

[12]           Counsel for the appellants pointed out the Act does not define the term, "public servant" and it is then necessary to seek out other sources in order to give proper meaning to those words. Counsel relied on this statement of Iacoubucci, J. in the case of 65302 British Columbia Ltd. v. The Queen, 99 DTC 5799, at p. 5809:

Statutory Interpretation and Public Policy

This Court has on many occasions endorsed Driedger's statement of the modern principle of statutory construction: "the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament." See Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, at para. 21. This rule is no different for tax statutes: Stubart Investments Ltd. v. The Queen [84 DTC 6305], [1984] 1 S.R.C. 536, at p.578.

[13]           Further, the position of the appellants is that the term "public servant" includes all persons - including judges - whose remuneration is paid by the state and refers to a person who is an employee, office holder or other person carrying out functions on behalf of citizens of the state, including those individuals commonly referred to as "civil servants". However, unlike the use of "civil servant" and "public servant" employed by the respondent in drafting each Reply to the Notice of Appeal (Reply), the appellants do not accept that those expressions are synonymous or interchangeable. In support of that proposition, counsel referred to the decision of the Supreme Court of Canada in Wells v. Newfoundland, [1999] 3. S.C.R. 199. In that case, Wells was appointed as a member of the Public Utilities Board with the designation "commissioner" under the provisions of the Public Utilities Act and was entitled to hold office during good behaviour until the age of 70. However, the legislature adopted a new Public Utilities Act in order to restructure the Board and in the course of reducing the number of commissioners, abolished the position of Wells. Beginning at paragraph 29, at p. 212 of Wells, Major J. stated:

   In my opinion, it is time to remove uncertainty and confirm that the law regarding senior civil servants accords with the contemporary understanding of the state's role and obligations in its dealings with employees. Employment in the civil service is not feudal servitude. The respondent's position was not a form of monarchical patronage. He was employed to carry out an important function on behalf of the citizens of Newfoundland. The government offered him the position, terms were negotiated, and an agreement reached. It was a contract.

   As Beetz J. clearly observed in Labrecque, supra, the common law views mutually agreed employment relationships through the lens of contract. This undeniably is the way virtually everyone dealing with the Crown sees it. While the terms and conditions of the contract may be dictated, in whole or in part, by statute, the employment relationship remains a contract in substance and the general law of contract will apply unless specifically superceded by explicit terms in the statute or the agreement.

   This is the case for most senior public officers. Exceptions are necessary for judges, ministers of the Crown and others who fulfill constitutionally defined state roles. The terms of their relationship with the state are dictated by the terms and conventions of the Constitution. The offices held by these are an integral part of "the web of institutional relationships between the legislature, the executive and the judiciary which continue to form the backbone of our constitutional system": Cooper v. Canada (Human Rights Commission), [1996] 3 S.C.R. 854, at para. 3.

   The fundamental terms and conditions of these relationships cannot be modified by either party, even by agreement. For instance, a judge cannot negotiate his or her salary or other terms of employment; see Reference re Remuneration of Judges of the Provincial Court of Prince Edward Island, [1997] 3 S.C.R. 3 ("Judges' Reference"), at para. 134. These individuals still serve under specified terms. Their mechanism for enforcement of those terms is not in contract, but through a declaration of the constitutional guarantees underlying their positions: see Judges' Reference, supra. There are also certain offices that survive because their historical roots are still nourished by functional consideration, e.g., the independent "office" of a police officer: [reference omitted].

[emphasis added]

[14]     The position of the appellants is that this passage supports the view that they - as judges of the Provincial Court of Alberta - are public servants together with other senior public officers who serve the state in defined roles such as Members of Parliament and members of various provincial and territorial legislative assemblies, Senators, the Governor-General, Lieutenant-Governors, provincial Premiers, members of Cabinet and provincial Executive Councils together with civil servants. Counsel referred to various excerpts of Hansard in order to demonstrate that Parliamentary usage of the expression "public servant" was not restricted to civil servants. Examples provided included the comment - on October 7, 1997 - by the Right Honourable Jean Chrétien - concerning Mr. Frank McKenna who had resigned that day from his office of Premier of New Brunswick - that Mr. McKenna " has been a very good public servant for a long time." On February 28, 2001, Mr. John Harvard, Member of Parliament, referred to the late Senator Gil Molgat, a career politician, Senator and Speaker of the Senate as " a great parliamentarian who was driven by the call to public duty" and who had been "an extraordinary public servant". While the appellants acknowledge they are not civil servants, they maintain they are - indeed - public servants serving the public in the course of carrying out a specified function as members of the judiciary. Therefore, while they accept that all civil servants are public servants, they do not accept the converse because of the clear examples that all public servants are not exclusively civil servants. Counsel referred to the decision in Reference Re of Judges of the Provincial Court of Prince Edward Island et al., [1997] 3 S.C.R. 3 (referred to hereinafter as Judges Reference) wherein Lamer C.J. at p. 92, paragraph 143, stated:

On the other hand, the fact remains that judges, although they must ultimately be paid from public monies, are not civil servants. Civil servants are part of the executive; judges, by definition, are independent of the executive. The three core characteristics of judicial independence - security of tenure, financial security, and administrative independence - are a reflection of that fundamental distinction, because they provide a range of protection to members of the judiciary to which civil servants are not constitutionally entitled.

[15]           Following, at paragraph 147, Lamer, C.J. in the course of discussing the independence of the judiciary in relation to the Canadian Charter of Rights and Freedoms (Charter), continued as follows:

As a general principle, s. 11(d) allows that the salaries of provincial court judges can be reduced, increased, or frozen, either as part of an overall economic measure which affects the salaries of all persons who are remunerated from public funds, or as part of a measure which is directed at provincial court judges as a class.

[16]     The position taken by the appellants is that the above two passages establish that all persons who are paid from public monies are public servants and within that broad classification there are sub-groups including judges - within the judiciary - and civil servants, who are part of the executive branch and, although not referred to in the judgment, of Lamer, C.J., even the legislators. In further support of this interpretation, counsel for the appellants referred to the case of R. v. M.E.A., [1994] A.J. No. 444 in which Landerkin, Provincial Court Judge - in the face of an Order-in-Council varying the salaries of judges and directing them not to sit for 5 unpaid days a year - decided to continue to hear the case before him - instead of disqualifying himself - and in so doing, at paragraph 16 of his judgment, stated:

The Order-in-Council leaves the impression that judges are salaried employees of the State. I resile from such suggestion. I am a public servant, not a civil servant...

[17]     With respect to this aspect of the argument, counsel for the appellants submitted that had it been Parliament's intention - in enacting subparagraph 8(1)(i)(iv) of the Act - to exclude all those public servants such as legislators or judges who are not part of the executive branch, it could have done so merely by using the expression "association of civil servants" or other unambiguous language to make it clear that judges were not entitled to the deduction even if they chose to become members of an association, the primary object of which was to promote the improvement of the members' conditions of employment or work.

[18]           Counsel for the appellants proceeded to make submissions to demonstrate that the end to which the efforts of the Association were directed, its purposes, aims and goals, were to further, advance and encourage improvements in the conditions of employment or work of the judges of the Provincial Court of Alberta. As referred to earlier in relation to submissions concerning the meaning of the word, "association", the position of the appellants is that the Association is required to merely promote such improvements and that the activities undertaken by said Association - during the relevant period as described in the Agreed Facts - were devoted almost exclusively to that end. In fact, the overwhelming majority of time and resources was dedicated to opposing the unilateral measures taken by the government of the Province of Alberta and the significant impact thereof upon the salary and working conditions of all Provincial Court Judges. Counsel referred again to the Judges' Reference, supra, in which the Supreme Court of Canada held that in order to maintain independence from the executive and legislative branches, judges may not negotiate their salaries and other terms of employment. Instead, the Court required that provincial legislatures design and create mechanisms such as judicial compensation commissions which would function independent of those branches and, in so doing, assign responsibility to those commissions to determine the terms and conditions of judges' entitlements including all aspects of judicial remuneration and benefits. As part of the process, it was recognized by Lamer, C.J. that the organizations - like the Association - that represent the interests of judges would be called upon to make representations or express concerns to governments - through the commissions - regarding the adequacy of judicial remuneration. At pp. 113-114 - paragraphs 188 and 189 - of his reasons in Judges' Reference, supra, Lamer, C.J. stated:

When I refer to negotiations, I use that term as it is understood in the labour relations context. Negotiation over remuneration and benefits involves a certain degree of "horse-trading" between the parties. Indeed, to negotiate is "to bargain with another respecting a transaction" (Black's Law Dictionary (6th ed. 1990), at p. 1036). That kind of activity, however, must be contrasted with expresions of concern and representations by chief justices and chief judges of courts, or by representative organizations such as the Canadian Judicial Council, the Canadian Judges Conference, and the Canadian Association of Provincial Court Judges, on the adequacy of current levels of remuneration. Those representations merely provide information and cannot, as a result, be said to pose a danger to judicial independence.

   I recognize that the constitutional prohibition against salary negotiations places the judiciary at an inherent disadvantage compared to other persons paid from the public purse, because they cannot lobby the executive and the legislature with respect to their level of remuneration. The point is put very well by Douglas A. Schmeiser and W. Howard McConnell in The Independence of Provincial Court Judges: A Public Trust (1996), at p.13:

Because of the constitutional convention that judges should not speak out on political matters, judges are at a disadvantage vis-à-vis other groups when making a case to governments for increments in salaries.

   I have no doubt that this is the case, although to some extent, the inability of judges to engage in negotiations is offset by the guarantees provided by s. 11(d). In particular, the mandatory involvement of an independent commission serves as a substitute for negotiations, because it provides a forum in which members of the judiciary can raise concerns about the level of their remuneration that might have otherwise been advanced at the bargaining table. Moreover, a commission serves as an institutional sieve which protects the courts from political interference through economic manipulation, a danger which inheres in salary negotiations.

[19]     The position of the appellants is that the impossibility of direct salary negotiations between the judiciary and the executive and legislative branches of government does not preclude activities undertaken to promote improvements of judges' employment or work, including matters of judicial remuneration or benefits or issues relating to security of tenure or administrative independence. If the independent judicial compensation commissions are a constitutional requirement, then the better view, as advanced on behalf of the appellants, is that it is precisely in these types of forums where such concerns would be advocated or promoted by an organization like the Association. Further, counsel submitted that even though a judge may not negotiate his or her salary or other terms of employment with the state in recognition of the fundamental terms and conditions of that special relationship, it is still possible for representations to be made - through the mechanism of the independent commissions - with respect to matters that comprise financial security including remuneration and pension and long-term disability benefits. Overall, it is the position of the appellants that the Association - at all relevant times - had - as its primary object - the promotion of improvement of the conditions of employment or work of its members and the amounts paid to the Association by the appellants in the within appeals, as claimed, in relation to membership dues should be allowed.

[20]           Counsel for the respondent submitted that Provincial Court Judges in Alberta are not "public servants" as that term is used in the Act nor would such designation be in accordance with their constitutionally defined role. As a result, the Association, of which the appellants were members, could not be an "association of public servants". Membership in the Association was not mandatory merely because someone had been appointed a Provincial Court Judge. Counsel acknowledged that the term "public servant" is not defined in the Act but submitted it must be interpreted in accordance with its ordinary grammatical meaning in the context of the subsection and relied on the definition of that term as stated in the Canadian Oxford Dictionary - K. Barber, ed. (Don Mills: Oxford University Press) 1998 at 1167:

Public servant - a government employee, esp. of a federal government

[21]           Counsel's position is that this definition accords with a basic and common understanding of the meaning of this phrase in that public servants are those persons who are employed as part of the public or civil service. In that capacity, it is also commonly understood that these individuals both work for - and receive instructions from - the particular government that is their employer. In addition, before one can be a "public servant" it is necessary to be a "servant" and subsection 248(1) of the Act - by reference to the definition of "employment" states:

The position of an individual in the service of some other person (including Her Majesty or a foreign state or sovereign) and "servant" or "employee" means a person holding such a position;

[22]     The position of the respondent is that the concept of "servant" within a position of service accords with the traditional use of the word which flows from the concept of master-servant relationship which has evolved into the current employer-employee relationship, indicia of which were considered by the Federal Court of Appeal in Wiebe Door Services Ltd. v. The Minister of National Revenue, 87 DTC 5025. In that case, the level of control and supervision over the worker was discussed and - although it may vary - it still existed to a significant degree in relation to those individuals whose provision of service to the payor fell within the category of employee rather than independent contractor where the person was providing services on his or her own account.

[23]           Counsel for the respondent referred to provincial legislation which provides assistance in characterizing those individuals who would be considered public servants. In Alberta, the Public Service Act, R.S.A. 1980, c. P-31 provides that:

s. 1(e) "employee" means a person appointed to a position pursuant to this Act.

s. 2(5) A person who is appointed or employed

(a)in accordance with ........

this Act, is an employee of the Crown in right of Alberta.

s.14 Each appointment to, and promotion within, the public service shall be predicated on the selection of the most suitable applicant but wherever preference shall be given to in-service applicants in order to establish a career service and to provide incentive and reward for good work performance and self-development.

s.18(1) On commencing employment in the public service, each employee is on probationary appointment during the period the regulations specify.

[24]           Counsel submitted these provisions are illustrative of the fact the concept of a public servant is that of an employee of government who is a member of the public service.

[25]     By way of contrast, counsel pointed out that judges of the Provincial Court of Alberta are appointed pursuant to section 21.2 of the Provincial Court Act, R.S.A. 1980, c. P-20. In that sense, counsel recommended a reading of subpagraph 8(1)(i)(iv) of the Act as a whole in order to determine the meaning of "public servant". First, the provision permits the deduction of annual membership dues paid to a union - as defined therein - from employment income. Since unions are the mechanism by which a significant number of public service employees negotiate the terms and conditions of their work, Parliament considered it appropriate that the cost of membership be deducted from employment income. The position of the respondent is that the final portion of the relevant provision is intended to apply to those members of the public service who maintain membership in associations - rather than unions as defined under the Canada Labour Code or provincial legislation - but the overriding sense of the section is in the context of trade unions and the ability of these organizations to negotiate terms of employment with their public sector employers. As such, the Association to which the appellants belonged, was not that sort of union-like entity contemplated by the provision.

[26]           Counsel for the respondent submitted the constitutional status of judges has been clearly defined in recent jurisprudence so as to preclude their characterization as public servants. Regarding this issue, I reproduce relevant excerpts from the written submissions - submitted during oral argument - as follows:

As stated by the Honourable Mr. Justice McDonald in R. v. Campbell (1990) AR 81 (Alta Q.B.) in discussing judicial independence:

In Canada it is inaccurate to refer to a judge as a "public employee" because an employee, or to use legal terminology, a "servant", is subject to the control of his or her employer or "master" as to the manner in which he or she performs his or her duties. A judge is not subject to the control of the Crown (the executive government) or of the legislature as to the manner in which he or she performs his or her judicial functions: that is the essence of judicial independence. (para. 69)

Justice McDonald further stated:

However, not all persons who are paid directly from the public purse are in the same position in the constitutional sense. The constitutional protection of judicial independence places the judges in a protected status different from that of civil servants, ...I shall focus upon civil servants. They are, in law, "servants" or "employees". But their salaries and pensions are not protected by the Constitution. There is no constitutional guarantee of their "financial security". (para. 94)

The Supreme Court of Canada has further clarified the description of the role of judges in Reference Re Judges of the Provincial Court of Prince Edward Island et al. (1997) 3 SCR 3 (the "Judges Reference case") and Wells v. Newfoundland (1999) 3 SCR 199. In the Judges Reference case, the court reviewed the Alberta decision in R. v. Campbell, along with cases from P.E.I. and Manitoba, and commented that the independence of the judiciary focuses on the 'status' of the courts in having a relationship that is independent from the executive and legislative branches of government. (para. 111) The three core characteristics of judicial independence are "security of tenure, financial security, and administrative independence". (para. 115) In dealing with the particular aspects of financial security for judges as it related to provincial governmental control, Chief Justice Lamer carefully outlined that while judges are paid from the public purse, their status is derived from their constitutional role and not from a position of being an employee or servant of the Crown. In contrasting the situation of judges to members of public sector unions, whose members could negotiate the terms and conditions of employment, including salaries, the court stated:

On the other hand, the fact remains that judges, although they must ultimately be paid from public monies, are not civil servants. Civil servants are part of the executive; judges, by definition, are independent of the executive. The three core characteristics of judicial independence - security of tenure, financial security, and administrative independence - are a reflection of that fundamental distinction, because they provide a range of protection to members of the judiciary to which civil servants are not constitutionally entitled: (para 143)

It is instructive to note that in describing judges, the Chief Justice did not go on to otherwise describe them as still being "public servants" although they are not "civil servants", but only that they are people "paid from the public purse". It is submitted that the court was not contemplating that there is a distinction between a "civil servant" and an alternative notion of "public servant" that might include judges, as the operative distinguishing factor that separated judges from the public service was that they occupy and are defined by a distinct constitutional status in the judicial branch of government. Indeed the court further pointed out that judges are distinct from public sector employees where it stated:

For example, as I have stated above, if judges salaries were set by the same process as the salaries of public sector employees, there might well be reason to be concerned about judicial independence: (para. 157)

It is submitted that while the court used the term "civil servant" as opposed to "public servant", it is apparent that the court intended to capture those who are employed by the executive branch of government, whether they be termed "civil" or "public" servants.

It is also of note that the court characterized the salary reductions imposed by the government as being "inherently political since they had been achieved through legislation, not collective bargaining and contract negotiations". (para. 142) This underscores that judges do not fall within the meaning of "public servants" because true public service associations do use collective bargaining and contract negotiations as tools to address salary levels, while judges are strictly prohibited from doing so.

In Wells, the court dealt with an action by a former appointee to the Newfoundland Public Utilities Board for damages for compensation when his position was abolished. The court concluded that his position was that of a senior civil servant, whose status was that of an employee of the Crown, and his relationship with the Crown was in substance an employment contract, the terms and conditions of which were dictated in part by statute, in part by negotiation and in part by common law. The court stated:

Exceptions are necessary for judges, Ministers of the Crown and others who fulfill constitutionally defined state roles. The terms of their relationship with the state are dictated by the terms and conventions of the Constitution. The offices held by these are an integral part of "the web of institutional relationships between the legislature, the executive and the judiciary which continue to form the backbone of our constitutional system": Cooper v. Canada (Human Rights Commission), [1996] 3 S.C.R. 854 at para. 3. (para. 31)

The Supreme Court in the Judges Reference case referred with approval to its previous decision in Valente v. The Queen [1985] 2 S.C.R. 673. In Valente, the court stated:

The chief objection to the provision of pension ...was, as I understood the argument, that it treated provincial court judges in the same way as civil servants. Indeed, the same objection was made to the provision for other benefits of a financial nature, such as sick leave with pay and group insurance benefits of various kinds...(para. 45)

In my opinion this objection to the provisions for pension and other financial benefits which were applicable to provincial court judges does not touch an essential condition of the independence required by s. 11(d). The provision established a right to pension and other benefits which could not be interfered with by the Executive on a discretionary or arbitrary basis. That, as I have indicated, is the essential requirement for purposes of s. 11(d). Making the provisions governing civil servants applicable to the provincial court judges did not purport to characterize provincial court judges as civil servants ...(para. 46)

It is submitted that Valente affirms that provincial court judges are not public servants even if they are governed by the same provisions that apply to public servants respecting pension and other benefits.

The Supreme Court in the Judges Reference case also referred with approval to its previous decision in Beauregard v. Canada [1986] 2 S.C.R. 56. In Beauregard, the court stated:

Superior Court Judges are not in any sense 'employees' of anyone, including the federal government. (emphasis added) (para. 52)

[27]     As a consequence of the above-quoted jurisprudence, it was the position of the respondent that the appellants in the within appeals - as judges of the Provincial Court of Alberta - held constitutionally defined roles separate and clearly distinct from other persons paid from the public purse and were definitely not public servants as contemplated by the relevant provision of the Act.

[28]     The respondent also declined to accept the proposition advanced by the appellants that the role of the Association satisfied the requirements of the particular subparagraph of the Act relating to its primary object, on the basis that while it devoted significant effort and resources in asserting the judicial independence of judges of the Alberta Provincial Court, this activity was not the same as promoting the improvement of members' conditions of employment or work. In support of that proposition, counsel referred to the Judges' Reference, supra, and I reproduce below portions of the written submission on that point, as follows:

As stated by the Supreme Court in the Judges Reference case

Although these cases implicate the constitutional protection afforded to the financial security of the provincial court judges, the purpose of the constitutional guarantee of financial security - found in s. 11(d) of the Charter, and also in the preamble to s. 100 of the Constitution Act, 1867 - is not to benefit the members of the courts which come within the scope of those provisions. The benefits that the members of those courts derive is purely secondary. Financial security must be understood as merely an aspect of judicial independence, which in turn is not an end in itself. Judicial independence is valued because it serves important societal goals - it is a means to secure those goals. (para. 9)

The Court goes on to say:

The purpose of the collective or institutional dimension of financial security is not to guarantee a mechanism for the setting of judicial salaries which is fair to the economic interests of judges. Its purpose is to protect an organ of the Constitution which in turn is charged with the responsibility of protecting that document and the fundamental values contained therein. If judges do not receive the level of remuneration that they would otherwise receive under a regime of salary negotiations, then this is a price that must be paid. (para 190)

The Court also states:

I want to make it very clear that the guarantee of a minimum salary is not meant for the benefit of the judiciary. Rather, financial security is a means to the end of judicial independence, and is therefore for the benefit of the public. As Professor Friedland has put it, speaking as a concerned citizen, it is "for our sake, not for theirs". (para 193)

and

Judges are officers of the Constitution, and hence their remuneration must have some Constitutional status. (para 196)

It is therefore submitted that the Association is simply not able to negotiate over the terms and conditions of provincial court judges' work. As stated by the Supreme Court in the Judges Reference case

Second, under no circumstances is it permissible for the judiciary - not only collectively through representative organizations, but also as individuals to engage in negotiations over remuneration with the executive or representatives of the legislature. Any such negotiations would be fundamentally at odds with judicial independence. (para. 134)

While the Supreme Court clarified that this prohibition did not preclude "expressions of concern or representations by chief justices and chief judges, and organizations that represent judges, to governments regarding the adequacy of judicial remuneration", it is submitted that any such submissions are ultimately made in the context of ensuring judicial independence. (para 134)

[29]           Notwithstanding the establishment of the Judicial Compensation Commission (Commission) by the government of the Province of Alberta, the position of the respondent is that while the Association may make submissions to that body, these representations must be made only within the context of ensuring judicial independence as opposed to simply maximizing pay and benefits for judges. In accordance with those strictures, the respondent views the appellants as never having belonged to that group of persons paid from the public purse who are required - from time to time - to negotiate terms and conditions of employment with their government employer. Further, the respondent considers the object of the Association regarding efforts to foster judicial independence is not about promoting improved conditions of employment for the judges, because the independence of the judiciary is a cherished concept that has been adhered to for the benefit of all citizens.

[30]           Counsel for the respondent submitted that, in the alternative, the primary object of the Association was not the dominant reason for the existence of that organization as stated in the objects of the Association - tab A - and even though a great deal of time and money was expended on the issue of judicial independence during the years at issue, that was only one of the purposes of the Association and had not been clearly identified as its primary purpose.

[31]     On the basis of the above submissions, counsel for the respondent submitted that each assessment issued by the Minister - to each appellant - was correct.

[32]     The issue in the within appeals is whether the appellants are permitted to deduct - pursuant to subparagraph 8(1)(i)(iv) of the Act - the amount paid for membership fees in the Association. While the provision has inherent qualifying indicia that must be met, the primary question that must be determined is whether the appellants - as Provincial Court Judges - were public servants. In this respect, the status of the appellants during the relevant period can be appreciated by referring to conditions of the provincial judiciary in Alberta during earlier times, as discussed by D.C. McDonald, J. in Campbell, supra and at pp. 101-102 - paragraph 16 - he stated:

   The Provincial Court of Alberta, the judges of which are appointed by the government of Alberta, has emerged during the past three decades from consisting of a complement of poorly paid magistrates, often untrained in the law, to what we have come to know during the past three decades - all the judges trained in the law, much better paid than had previously been the case, performing a number of important functions including:

(a) conducting preliminary inquirires, which provide important safeguards of the right to a fair trial;

(b) exercising significant trial jurisdiction in all but the most serious categories of offences under the Criminal Code of Canada;

(c) being mandated by the Constitution of Canada to apply (and to interpret) the guarantees contained in the Canadian Charter of Rights and Freedoms by holding invalid any statute or other law which is inconsistent with any such guarantee and by excluding evidence obtained in a manner that infringes any such guarantee (Research shows that since 1987 there have been 16 reported decisions of judges of the Provincial Court of Alberta on Charter issues relating to the validity of legislation. Of these six concerned Criminal Code prosecutions, one concerned federal national park regulations, six concerned provincial statutes, and three concerned municipal bylaws. While I do not have such statistics for the period preceding 1987, it is worth noting that in 1983 both Jones, Prov. J. (in R. v. Smith (W.H.) Ltd. (1983), 26 Alta. L.R.(2d)238), and Stevenson, Prov. J., in R. v. Bib M Drug Mart Ltd., [1983] 4 W.W.R. 54, in comprehensive judgments, held that the Lord's Day Act (a federal statute) violated the "freedom of conscience and religion" guaranteed by s. 2(a) of the Charter. The Supreme Court of Canada, on appeal in R. v. Big M Drug Mart Ltd., [1985] 1 S.C.R. 295; [1985] 3 W.W.R. 481; 58 N.R. 81; 60 A.R. 161; 18 C.C.C.(3d) 385; 18 D.L.R.(4th) 321; 37 Alta. L.R.(2d) 97; 85 C.L.L.C. 14,203; 13 C.R.R. 64, agreed with that conclusion).

(d) applying the statutory and common law rules as to the admissibility of evidence at trial;

(e) weighing the admissible evidence carefully and impartially, and arriving at a decision which faithfully applies rulings (sometimes none too clear) of the appellate courts as to the decision-making process, including the presumption of innocence;

(f) in the event of conviction, performing the often difficult duty to apply the general principles of sentencing to the facts of the case, knowing of the important consequences both to the accused and to society at large.

   These are grave responsibilities. They are responsibilities which exist on the constitutional plane (and here I speak not only of the Charter but also of the unwritten part of our Constitution). The exercise of these responsibilities demands moral probity, courage and intellectual skill. In some instances (as in sentencing) the way in which these duties are performed must reflect in some degree the informed values of the community at large, while resisting the often strident clamour of some segments of the public or the media for a decision which, if it were made, might not be consistent with the Constitution or with the law as laid down by Parliament, the legislature, or the appellate courts. It is because the judges of the Provincial Court exercise these important functions which are essential to the maintenance of the rule of law, that the interpretation of the independence guaranteed by s. 11(d) may result in the judges of the Provincial Court being protected in terms of their salaries and pensions when civil servants are not similarly protected.

[33]     The learned judge went on to describe the frequent criticism "verging on hostility" among some segments of the public and the media in relation to the following subject matters:

-          interpretation of the Charter

-          sentences imposed upon offenders for being too lenient

-          judicial conduct in dealing with young offenders

[34]     At paragraph 18 of his reasons, D.C. McDonald, J. observed:

   I have referred to these areas of frequent public criticism of the judicial acts of Provincial Court judges because the public criticism can easily translate into a degree of hostility to the judges on the part of the executive government and legislature. To the degree that such hostility develops, there is an increased risk that positions taken by the executive branch or the legislature may be perceived as having the effect of eroding judicial independence.

[35]     In the Agreed Facts - at paragraph 9 - there is a recitation of the previous formula utilized to establish the salary of a judge of the Provincial Court of Alberta. The following paragraph therein sets forth details of the unilateral decision of the Government of Alberta to discontinue adjustment of the salary in accordance with this formula. After 1988, the only increase received by the Provincial Court Judges was a 9% adjustment in 1991 (see table at tab C). In March, 1994, the Association advised the Government of Alberta that it intended to institute legal action unless certain steps were taken with regard to establishing a method of fixing salaries for Provincial Judges. An agreement was struck where negotiations - supposedly to be conducted in good faith - were to be held rather than proceeding to litigation. However, as recited in paragraph 14 of the Agreed Facts, on March 31, 1994, the salaries of the Provincial Court Judges of Alberta were reduced by 5% through the mechanism of an Order-in -Council. The lengthy battle that ensued is explained in paragraphs 14-24, inclusive, of the Agreed Facts and during the period while the litigation was continuing, the Government of Alberta paid a lump sum to each Provincial Court Judge, thereby nullifying the effect of the 5% reduction in salary pursuant to the relevant Order-in-Council. Later, as ordered by the Supreme Court of Canada, the provincial government in Alberta established an independent commission with a mandate to determine judicial compensation and an agreement - dated March 3, 1998 - tab I - was entered into between Her Majesty The Queen In Right Of The Province Of Alberta, as represented by the Minister of Justice and Attorney General, and the Chief Judge of the Provincial Court of Alberta and the judges of the Provincial Court of Alberta, as represented by the Association. Pursuant to the terms of this document - known as the Framework Agreement - the Commission heard evidence presented by the Association - including detailed and expert evidence on salary and pension - and four Judges gave evidence. Notwithstanding the recommendations of the Commission, the Alberta government - by issuing three separate Orders-in-Council - rejected those recommendations and substituted a lower salary increase and modified the pension recommendations. Further litigation was commenced, as recited in paragraphs 31-33, inclusive, of the Agreed Facts. When the Supreme Court of Canada denied the leave to appeal application sought by the Government of Alberta, the provincial government agreed that another commission would be established to determine judicial compensation of Provincial Court Judges for the period of April 1, 2000 to March 31, 2003. As stated in paragraph 38 of the Agreed Facts, 90% of the time of the executive of the Association was devoted to dealing with the issues pertaining to judicial compensation and the Association paid or incurred legal fees in the approximate sum of $1.5 million in pursuance of activities described in subparagraphs (a) through (i) of said paragraph.

[36]     As outlined above, the main focus of the Association was to resist the unilateral actions of the Government of Alberta to discard a previously workable formula that had been utilized - since the mid-1970's - for establishing salaries of Provincial Court Judges. Instead, the provincial government simply ignored the established mechanism for determining judicial remuneration and imposed a salary structure upon the judges. Later, the Alberta government proceeded to reduce that amount by issuing an Order-in-Council to that effect. It seems to me that an examination of all the jurisprudence flowing in respect of this action had - as it overarching component - the sanctity of the concept of judicial independence stemming from the special relationship which exists between all judges and the governments that not only appointed them but subsequently provide for their ongoing salaries, pensions and other benefits. Counsel for the respondent submitted that all activities undertaken by the Association - even though prompted by the attack on their salaries and pensions - were subsumed in the overall struggle to obtain a declaration that independence of the judiciary is paramount within the constitutional framework and the mundane aspects of the amount of the pay cheque or pension benefits upon retirement were merely collateral to the pursuit of a proclamation upholding judicial independence, a result that provides enduring benefit to all citizens. That has much to commend it, but it assumes the members of the Association are saints and not working judges who had a legitimate and ordinary interest in protecting their own financial security, both present and future. There are a variety of methods by which the judiciary can be attacked; some are merely annoying but others are directed to the very core of judicial independence, a concept long understood and appreciated by many citizens even prior to the arrival of the Charter and its now-familiar impact on our way of life. Today, with the power of courts to apply the Charter, in order to ensure that legislation passed and actions taken by the legislative and executive branches of all governments, respectively, within Canada are not in violation thereof, there is an increased awareness of the role played by judges within the nation's constitutional framework. Within that context, there is a greater awareness of the principle of judicial independence. Indeed, that is the very characteristic of the judiciary that has invited so much outspoken criticism from some legislators, and has attracted the media and members of the public to participate - through a variety of means - in spirited debate. There is no doubt that the Charter has had a significant impact on this subject matter. However, while I appreciate that - for some younger members of the Bar - it is difficult to comprehend, I assure them that even before the advent of the national Medicare scheme and implementation of the Charter, rivers still flowed downstream and the sun rose each morning.

[37]           Throughout the relevant period, I have difficulty identifying any activity undertaken by the Association that would - even by analogy - be akin to those pursued by "an association of public servants". There was a recognition by all jurists who were called upon to determine the issues arising in the litigation commenced by the Association against the government of the Province of Alberta that the Provincial Court Judges - because they were judges - were placed in a special category. Despite being paid from the public purse, and despite their service to the public through the exercise of their particular function as one of the three branches of government, there was a clear recognition that these judges had to be set apart from the other individuals who serve as civil servants or as other servants of the state. In the Statement of Claim - tab D and as amended - tab E - the Association was named as a plaintiff together with individual judges of the Provincial Court of Alberta. The relief sought - inter alia - was a declaration that the Defendant (Province of Alberta) had failed to meet its constitutional obligation to maintain and adjust the salaries of individual judges in accordance with increases in the cost of living and also had failed to maintain and adjust pensions and pension benefits accordingly. This specific action was taken because the government had included the judges into the same broad category as others who received pay cheques from the government regardless of the service provided or the duty performed. Others receiving pay from the public purse, whether employed or appointed under the provisions of the Public Service Act, were equally affected by the 5% reduction in pay but in their battle to restore former levels of salary or to make gains in the future, they were not armed with a constitutional weapon that could be utilized in order to demonstrate that the effect of the unilateral reduction in remuneration called into question their independence from the legislative and executive branch of government because these individuals and their government-employer had never considered they ever possessed any right to be considered in that manner. Clearly, for those people, the government was the boss and could dictate terms of employment, including pay scales and many other aspects of their work, sometimes in accordance with an elaborate hierarchy replete with alphabetical and numerical designations, titles and job descriptions. If the provincial government chose to ignore previous contractual agreements arrived at following negotiations with the relevant union, it could do so, perhaps merely by issuing the Order-in-Council. It is obvious that a government has to pay judges. However, no thinking person wants the legislative and executive branch to be able to control the effective work of the judiciary, whether by reducing salary in an unacceptable fashion, refusing to enhance salaries and pensions benefits in a reasonable, timely manner or by requiring judges to work in dilapidated buildings without proper heat, light or ventilation. Without constitutional protection - when push comes to shove - the judiciary is not going to prevail in any dispute hatched by other branches of government. The judiciary and their families and friends do not constitute a viable number - in a demographic sense - capable of bringing fear to the heart of any legislator within any given constituency. For that reason, as noted by D.C. McDonald, J. in Campbell, supra, it is easy for various individuals - some elected to the provincial legislature and others to Parliament - alone or in concert with single-issue groups - to take potshots at judges regarding a host of real or imagined concerns. Perhaps, payment of judges could be accomplished through a Crown corporation - with purported independence from the government-of-the-day - but one would have to be egregiously naive to expect a complete lack of interference in the pursuance of that kind of artificial relationship in the absence of rock-solid guarantees such as provided within the constitutional structure. The Supreme Court of Canada recognized it is necessary to have a barrier - in the form of an independent commission - by which the determination of judicial compensation and other related benefits may be achieved. That Court obviously considered that, by using the machinery of a commission, the system of administration of justice could derive benefit from additional insulation - a degree of separation - between the payor-governments and the judges, either as individuals or, collectively, within the context of their organizations or associations. The pursuit of the goals of the Association regarding the reductions to salaries and pension benefits was carried out in the name of judicial independence. That concept is designed to be utilized as a shield and is generally employed to that end but in this instance it was called into play as a viable weapon with which to advance the argument - ultimately successful - as it related to the core value of judicial independence in our society. There is no doubt that judges are employees as defined by section 248 of the Act because the term " employee" includes "officer" and the definition of "office" includes:

"a judicial office, the office of a minister of the Crown, the office of a member of the Senate or House of Commons of Canada, a member of a legislative assembly or a member of a legislative council or executive council and any other office, the incumbent of which is elected by popular vote or is elected or appointed in a representative capacity and also includes the position of a corporation director, and "officer" means a person holding such office".

It is evident Parliament wanted to make it clear that these persons - whether appointed or elected - should not be regarded as entrepreneurs while carrying out their duties. It is apparent each of those categories has its own particular duties and conditions of employment. Judges, however, are clothed with additional attributes of employment as a consequence of being singled out for constitutional protection from the other two branches of government. When one accepts that judges are appointed by a government - federal or provincial - receive payment from the public purse and are often integrated into certain administrative aspects of overall public service, the only characteristic that properly serves to illustrate the special character and identity of members of the judiciary - in the course of discharging their duty - is the attribute of judicial independence, a condition of employment heartily endorsed by the citizenry and certified by the nation's highest court within the particular constitutional framework of Canada. Even though - from time to time - someone floats a trial balloon in support of a system whereby judges will be elected to fixed terms or - as candidates for judicial office - be required to face inquisition before a committee of legislators - some of whom would demand an inflexible response from the candidate as to the precise nature of a decision he or she would pronounce on a particular issue (without having regard to any evidence or argument), I think the persistent and prevailing public perception is that their rights are protected only by the existence of an independent judiciary, pesky and contrary though some members of that group may - on occasion - prove to be. I agree with the submission of counsel for the respondent that a plain and ordinary reading of subparagraph 8(1)(i)(iv) conjures up a strong flavour of union or union-like activity undertaken by an association of public servants for the eligible stated purpose. In the within appeals, there is no evidence the Association - or its members - undertook any advertising campaign, retained the services of public relations firms or utilized any of the legitimate methods - including work slowdowns or stoppage - and demonstrations in public arenas to attract public support with a view to causing the provincial government to accede to their demands. The action commenced by the Association was in response to a brutal attack on their judicial independence by a series of petty, unjustified activities by members of the legislative and executive branch of the provincial government who had decided to ignore the concept of judicial independence, that special, brave notion that is the hallmark of a society that chooses to be governed by the rule of law within a unique constitutional framework. I appreciate the issue in the within appeals concerns an interpretation of a provision of the Act and would not - necessarily - have a wider impact. However, the reverse is not true in that jurisprudence concerning the nature of judicial independence and the special role played by judges in our society, although it has arisen in another context, must be applied to any consideration of the particular provision under consideration. Parliament has had a longstanding appreciation of the role of judges in our society that was inculcated into the system - certainly at the federal level - even though members of the provincial judiciary were often still holding court in the back of police stations and were referred to as Police Magistrates. Others were appointed as part-time Stipendiary Magistrates whose remuneration was dependent on entering a conviction against an accused person and levying costs in addition to another penalty. Depending on the political jurisdiction, the courts over which these members of the provincial judiciary presided were officially entitled Police Courts. By modern standards, this retrospective sketch is downright scary but those conditions prevailed in most parts of Canada - especially in non-metropolitan areas - until the mid-1970's and beyond. Within an historical perspective, I doubt the lack of definition of "public servant" by Parliament is an oversight if it is suggested that the provision was ever meant to include members of the judiciary. A better explanation - in my opinion - is that Parliament was not inclined to devote time thinking about the unthinkable or conceiving the inconceivable. As a result, it was never intended that judges would be seen as public servants in the context of belonging to an association by which they would be able to promote the improvement of conditions of employment or work and, in so doing, be equally entitled - along with members of a qualifying union - to deduct membership fees from employment income. Curiously - or perhaps not - the best way to describe the role and function of a judge is to recognize that the person clothed with the responsibility to discharge that duty is - purely and simply - a judge. Work is work is work. A rose is a rose is a rose. A judge is a judge is a judge. The public expect judges to exercise judgment and, inherent in the accomplishment of that end, to possess the absolute freedom to decide matters within their jurisdiction absent any fear of reprisal or any hope of favour or reward from other branches of government even though these arms of government control an elaborate apparatus pertaining to the overall administration of justice including the administrative means by which payment is made to judges. While judges do serve the public, like pilots and bus drivers and ferry captains and hundreds of thousands of persons employed within the public sector, it is because of constitutional implications that providers of this particular service - in their capacity as members of the judiciary - are not public servants - even in the broadest sense - although the same public is the recipient of the performance of their duties. It is not the people fulfilling the role of a judge who attract constitutional protection, as interpreted by many courts, including the Supreme Court of Canada; it is the position itself that demands this sort of guardianship for the greater good of the nation whether the protection is embodied in certain provisions of the Charter, the Provincial Court Act of Alberta pertaining to discipline, administration of the Court - carried out by the Chief Judge, Associate Chief Judges and/or their designates - or in a general sense in order to accord with tradition developed throughout the years. For the provincial judiciary, the struggle has not been easy and separation from other branches of government - in the mind of the public - has been steadily accomplished over the past 30 or 40 years so that in a modern context it is widely accepted that no particular Ministry or even an entire Cabinet - acting on behalf of the political party holding the majority of seats in the legislature - possesses the right to interfere in any aspect of the statutory role assigned by legislation to the Provincial Court of Alberta. To regard the appellants as public servants - with all that entails in terms of modern and popular usage - would, in my opinion, amount to a retrograde step and would produce an incongruous result, something to be avoided when divining the meaning of legislation, even more so within the more constrained sphere of taxing statutes.

[38]           Having regard to the Agreed Facts and the documents submitted in relation thereto and the applicable jurisprudence, I conclude the appellants - as Provincial Court Judges - were not public servants within the meaning of the subparagraph of the Act relevant to the within appeals.

[39]     Had I been able to find that the appellants were public servants, I would not have had any difficulty in holding that - for the relevant years - the Association was an association contemplated by the provision and had, as its primary object, the promotion of the improvement of the members' conditions of employment or work. While the primary object may have been otherwise prior to 1994 and - perhaps - has since undergone another transformation in terms of time, efforts and resources dedicated to a recognized object or series of objects, I am satisfied that during the years at issue, the primary object - occupying 90% of the time of the Association executive - related to litigation undertaken solely for the purpose of combating the unilateral actions of the provincial government in reducing salary and pension benefits which - in accordance with object (c) - tab A - of the Association would be "a matter of common interest to or relating to the welfare of judges of the Provincial Court of Alberta...". The activities undertaken by the Association were also directed to ensuring "that there will be a strong independent Provincial Court of Alberta better able to continually improve its role in the administration of justice within Alberta". It is difficult to comprehend the motivation of the executive branch of the Alberta government that - in an astounding display of effrontery - undertook a course of action that not only reduced judges' salaries by 5% but purported to order the judges to take an annual unpaid 5-day holiday during which period no sittings of the courts were to be held. Only by reading the daily newspapers, did some judges learn about this amazing turn of events. There is no doubt in my mind that salary, pension entitlements and other benefits, including long-term disability, are conditions of employment or work and, if the promotion of these matters as an obvious improvement were to take place within the scope of a larger concept such as judicial independence, these efforts would still retain their character for the stated purpose of the provision. The Government of Alberta, after losing an appeal to the Court of Appeal of Alberta, paid the aggregate sum of approximately $2 million to the judges, thereby canceling the disputed 5% reduction in salary previously undertaken by means of an Order-in-Council. Obviously, the action taken by the Association produced that particular result because it was not about to be achieved otherwise, especially when one reflects upon the unhealthy relationship between the judiciary and other branches of the Alberta government at the time. The argument in support of claiming a deduction for legal fees - on the basis the expenditure was incurred to collect salary - was abandoned by the appellants. I concur with that decision because the legal fees were paid by the Association and not the appellants. It would have been extremely difficult to consider the total amount of the membership fee and to somehow attribute an appropriate portion thereof directly to each member's pro rata cost of the global litigation which, inter alia, produced the salary reimbursement as opposed to allocations in respect of other Association activities, such as costs incurred in connection with conferences and meetings having other purposes.

[40]     The assessment(s) of the Minister - as they apply to each appellant - are valid. The appeal of each appellant is hereby dismissed with costs, bearing in mind the two appeals were heard on common evidence.

Signed at Ottawa, Canada, this 7th day of March 2002.

"D.W. Rowe"

D.J.T.C.C.

COURT FILE NO.:                        1999-4276(IT)G

STYLE OF CAUSE:                           Douglas L. Crowe and H.M.Q.

PLACE OF HEARING:                     Calgary, Alberta

DATE OF HEARING:                     November 22, 2001

REASONS FOR JUDGMENT BY: the Honourable Deputy Judge D.W. Rowe

DATE OF JUDGMENT:                           March 7, 2002

APPEARANCES:

Counsel for the Appellant:           Michel Bourque

Counsel for the Respondent:           William L. Softley

COUNSEL OF RECORD:

For the Appellant:    

Name:             Michel Bourque

Firm:             Bennett Jones

                  Calgary, Alberta

For the Respondent:                   Morris Rosenberg

                                                  Deputy Attorney General of Canada

                                                          Ottawa, Canada

COURT FILE NO.:                        1999-4278(IT)G

STYLE OF CAUSE:                           Kenneth A. Cush and H.M.Q.

PLACE OF HEARING:                     Calgary, Alberta

DATE OF HEARING:                     November 22, 2001

REASONS FOR JUDGMENT BY: the Honourable Deputy Judge D.W. Rowe

DATE OF JUDGMENT:                           March 7, 2002

APPEARANCES:

Counsel for the Appellant:           Michel Bourque

Counsel for the Respondent:           William L. Softley

COUNSEL OF RECORD:

For the Appellant:    

Name:             Michel Bourque

Firm:             Bennett Jones

                  Calgary, Alberta

For the Respondent:                   Morris Rosenberg

                                                  Deputy Attorney General of Canada

                                                                                                Ottawa, Canada

1999-4276(IT)G

BETWEEN:

DOUGLAS L. CROWE,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Appeal heard on common evidence with the appeal of Kenneth A. Cush (1999-4278(IT)G) on November 22, 2001 at Calgary, Alberta, by

the Honourable Deputy Judge D.W. Rowe

Appearances

Counsel for the Appellant:           Michel Bourque

Counsel for the Respondent:           William L. Softley

JUDGMENT

          The appeal from the assessment made under the Income Tax Act for the 1996 taxation year is dismissed with costs in accordance with the attached Reasons for Judgment

Signed at Ottawa, Canada, this 7th day of March 2002.

"D.W. Rowe"

D.J.T.C.C.

1999-4278(IT)G

BETWEEN:

KENNETH A. CUSH,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Appeal heard on common evidence with the appeal of Douglas L. Crowe (1999-4276(IT)G) on November 22, 2001 at Calgary, Alberta, by

the Honourable Deputy Judge D.W. Rowe

Appearances

Counsel for the Appellant:           Michel Bourque

Counsel for the Respondent:           William L. Softley

JUDGMENT

The appeal from the assessments made under the Income Tax Act for the 1996 and 1997 taxation years is dismissed with costs in accordance with the attached Reasons for Judgment

Signed at Ottawa, Canada, this 7th day of March 2002.

"D.W. Rowe"

D.J.T.C.C.