Date: 20090828
Docket: T-370-09
Citation: 2009 FC 861
BETWEEN:
KEVIN R. AALTO, ROZA
ARONOVITCH,
ROGER R. LAFRENIÈRE, MARTHA MILCZYNSKI
RICHARD MORNEAU and MIREILLE TABIB
Applicants
and
ATTORNEY
GENERAL OF CANADA
Respondent
REASONS FOR
ORDER
MACKAY D.J.
[1]
By
this application the prothonotaries of the Federal Court request judicial
review of the decision, by the Response of the Minister of Justice of Canada dated
February 11, 2009
(Response of the Minister of Justice to the Report of the Special Advisor on Federal
Court Prothonotaries’ Compensation, Department of Justice Canada, http://www.justice.gc.ca, June 25, 2009), on behalf
of the Government of Canada, in relation to recommendations of a Special
Advisor concerning the adequacy of salary and benefits of the prothonotaries,
whether current or past. That Response rejected virtually all of the
recommendations made in the Report of the Special Advisor.
[2]
The
circumstances are extraordinary. Before setting out reasons in full I here set
out a summary of my principal conclusions. First, the application for judicial
review is dismissed since the primary reason given in the Response is reasonable
in regard to the extraordinary circumstances, that is, the significant changes
in economic conditions generally and in the adverse effects on public finances
of the Government of Canada which became apparent after the Report of the
Special Advisor was submitted to the Minister on May 30, 2008. The decision of
government and the actions taken to deal with these changes were legitimate in
that they were consistent with the law and constitutional authority of the
Government. There is no basis for this Court to set aside the Minister’s
Response. That determination does not resolve the issue raised and argued
before me about the acceptance of the Response in relation to the
recommendations of the Advisor.
[3]
My
second conclusion is reached with respect for the difficulties facing
Government in extraordinary circumstances and in the circumstances of the
Response here being made in relation to the first process initiated to properly
determine remuneration for Federal Court prothonotaries in accord with the law.
My conclusion that the Response does not meet constitutional requirements for
appropriate recognition of judicial independence as that has been established
by the Supreme Court of Canada in the Reference re
Remuneration of Judges of the Provincial Court of Prince Edward Island; Reference
re Independence and Impartiality of Judges of the Provincial Court of Prince
Edward Island, [1997] 3 S.C.R. 3 [Reference re P.E.I. Judges] and in Bodner
v. Alberta, 2005 SCC 44, [2005] 2 S.C.R. 286 [referred to
in the text of Reasons as Bodner]. The Response and its
reasons do not respond appropriately to the recommendations of the Special
Advisor. Viewed globally the Response does not demonstrate respect for the
“commission process” and the purposes of that process, to preserve judicial
independence and depoliticize the setting of judicial remuneration. It is my
conclusion that those purposes have not been achieved by the commission process
and Response in this case.
[4]
While
the significance of my conclusions is initially a matter for the parties, the
public interest is also affected. Some principle implications are suggested in
the Conclusions and Implications at paragraphs 54 to 59 of these Reasons. In
effect the Response is not set aside, but it is not acceptable as a continuing
basis of the remuneration of prothonotaries. The responsibility for accomplishing
that continues as it existed on May 30, 2008, and before that.
The Background
[5]
Provision
for the appointment of the Special Advisor to the Minister was made by Order in
Council P.C. 2007-1015, dated June 21, 2007. By its preamble, that order
acknowledges that “the adequacy of the salary and benefits of prothonotaries of
the Federal Court have not been comprehensively considered to date”, and “the
Governor in Council deems it necessary that there be a Special Advisor to the
Minister of Justice to undertake an external review of and advise on, the
adequacy of the salary and the benefits” of those prothonotaries.
[6]
Following
the appointment of the Special Advisor [by agreement between the
parties the Honourable George W. Adams was named Special Advisor in August 2007
to act pursuant to P.C. 2007-1015 enacted under the Public Service
Employment Act, now S.C. 2003, c. 22, para. 127.1 (1)(c)] the parties
to this Application made a number of written submissions to him. Their counsel
were heard and submissions were made by the Chief Justice of the Federal Court,
the then Acting Chief Administrator of the Courts Administration Service, and
representatives of other interested parties. The Advisor reported to the
Minister on May 30, 2008, in accord with his terms of reference. By those terms
he was directed to consider:
a. the
nature and duties of a prothonotary;
b. the
salary and the benefits of appropriate comparator groups;
c. the
prevailing economic conditions in Canada, including the cost of living, and the
overall economic and current financial position of the federal government;
d. the
role of financial security in ensuring the independence of prothonotaries;
e. the
need to attract outstanding candidates to the office of Federal Court
prothonotary; and
f.
any other objective criteria that the Special Advisor considers
relevant (P.C. 2007-1015, dated June 21, 2007, para. 4(1)).
[7]
The
office was created by the Federal Court Act in 1971 and prothonotaries
have served as judicial officers of the Federal Court, appointed by the
Governor General in Council now pursuant to section 12 of the Federal Courts
Act, R.S.C. 1985, c. F-7 as amended, to serve during good behaviour
until age 75. It is common ground between the parties that they make a most
important contribution to the work of the Federal Court, that they are judicial
officers sharing judicial independence in their work as judges do, and as has
been recognized for other judicial officers of other courts in Canada in the
jurisprudence evolving after the Reference re P.E.I. Judges,
in particular in Bodner v. Alberta.
[8]
The
prothonotaries’ role in the Federal Court has expanded, particularly in the
last dozen years or so, in both substantive and procedural matters, as a result
of changes in the Court’s Rules to provide more efficient and effective
judicial oversight of dealing with the variety of claims and applications, many
of them complex, before the Court. Much of the Court’s work involves causes and
claims for relief against the Government of Canada, Ministers or other officers
of government, or in the judicial administration of regulatory policies enacted
by Parliament. In this work prothonotaries are regularly engaged in hearing
motions or with other case management proceedings, or in trials, in the variety
of causes before the Court.
[9]
The
history of discussions between representatives of the prothonotaries and of the
Government in recent years provides two quite different perspectives of past
understandings and misunderstandings. Rationalizing these perspectives is not
necessary for purposes of assessing the response of the Minister, though a few
key elements or results of the background, provide necessary context. These
include:
i)
A
continuing concern of the prothonotaries, since at least the decision in the Reference
re P.E.I. Judges in 1997, has been to have their compensation and benefits,
until 2007 matters mainly dealt with by the Privy Council Office, determined
after an independent commission and response process that demonstrates
recognition of judicial independence for the prothonotaries.
ii)
The
first action to provide that process was P.C. 2007-1015, leading to the Special
Advisor’s Report in 2008, which the Minister by his Response in 2009 found
generally unacceptable.
iii)
At
the time of the Report the primary remuneration of prothonotaries, salary and
pension, was as follows:
a)
Salary
was set at 69% of the salary payable under the Judges Act to puisne
judges of the Federal Court. That proportionate salary was determined by the
Governor General in Council in 2001 as a result of negotiations between
representatives of the prothonotaries and of the Government of Canada. Since
then salaries of judges have increased following reports of successive
Quadrennial Commissions on Judges’ compensation, and by reason of annual
adjustments provided to Judges, under the Judges Act, both of which were
extended proportionately to the prothonotaries. [Parenthetically, I note that
the most recent Quadrennial Commission on Judge’s compensation reported to the
Minister on May 30, 2008. As in the case of the Report of the Special Advisor
of concern in this case, the response of the Minister virtually rejected all
recommendations in the report of the Quadrennial Commission on similar grounds
of serious economic uncertainty arising after that Commission had reported]
(See Response of the Government of Canada to the Report of the 2007 Judicial
Compensation and Benefits Committee, February 11, 2009 http://canada.justice.gc.ca).
b)
Pensions
for prothonotaries are established by s-s. 12 (5) of the Federal Courts Act, which deems
them to be employed in the public service for purposes of the Public Service
Superannuation Act. They have no annuity as judges do, there is no
recognition of commencing their work at mid-career age and experience and no
provision is made for continuing participation in the public service pension
arrangement to age 75 as is the case for judges under the arrangements for
their annuities.
[10]
In
2001 the salary determined for prothonotaries (in an amount later translated as
69% of a Federal Court Judge’s salary) resulted in a dollar amount reasonably
comparable to the average paid to masters and provincial judges in the courts
of the provinces. In 2008 that was no longer the case for the prothonotaries’
salary then ranked very near the bottom of the list of salaries of judicial
officers across Canada, other than those of federally appointed judges. In the
latter year the pension arrangements for the prothonotaries did not compare
favourably with their counterparts in provincial courts and their appointment
at mid-professional career with only limited years for participation in
Canada’s public service pension plan left them less well provided for on
retirement than most of their counterparts.
[11]
Insurance
coverage for any long term sickness or disability after age 65 was not a
program available for participating prothonotaries as it is for judges and for
many provincial judicial officers. A program to address prothonotaries’
concerns was recommended.
[12]
The
Special Advisor’s Report was delivered as directed, on May 30, 2008. It
included a number of specific recommendations and some other proposals for
consideration. These are summarized in Annex A attached, here reproduced from
the Minister’s Response as a summary satisfactory for our purposes.
[13]
The
Minister’s Response of February 11, 2009, is the essential focus of this
judicial review and it will be examined in some detail. It may be summarized as
basing the virtual rejection of all recommendations on two general but distinct
grounds. The parties differed in their assessments of these two grounds. The
first, described in the response as the “overarching consideration” (Minister’s
Response, p. 3, 2nd full para.) was the deterioration
of the global economic situation and the significant adverse effects on the
financial position of the Government of Canada “after the Special Advisor
concluded his inquiry and submitted his recommendations to the Minister on May
30, 2008” (Minister’s Response, p. 2, paras. 1, 2). The second basis for the
response was concerns of the Government with “some of the assumptions that
underpin the Special Advisor’s recommendations, in particular in relation to
salary” (Minister’s Response, p. 3, para. 2) but also in relation to pensions
or other benefit enhancements proposed by the Report (Minister’s Response,
p. 4, last para.).
General Principles Here
Applicable
[14]
General
principles stated in the Reference re P.E.I. Judges as elaborated in
jurisprudence thereafter evolving, particularly in Bodner, consider the
commission and response process of concern in this case. They include the
following:
a.
Judicial
officers, assured of judicial independence by the common law and the
constitution, are to have remuneration for their work determined following a
“commission process” that is independent, objective and effective, one that has
a meaningful effect upon judicial remuneration. In my view, the jurisprudence
is clear, the commission process, to be effective, requires a fair, open,
objective, assessment and a reasonable response addressed to the
recommendations made.
b.
That
does not require that the commission’s recommendations be binding. Rather,
government may depart from the recommendations if it justifies its decision on
rational, legitimate grounds that are complete, tailored to the
recommendations, and based on factual foundations.
c.
Judicial
review of the government’s response depends upon a three-fold test:
i)
Has
government articulated a legitimate reason for departing from the commission’s
recommendations?
ii)
Are
the stated reasons for the response based upon a reasonable factual foundation?
iii)
Viewed
globally, has the commission process been respected and have its purposes been
achieved. Those purposes are to preserve judicial independence and depoliticize
the setting of judicial remuneration (Bodner, above, at para. 31). The
last phrase, depoliticizing the decision, serves to preserve judicial
independence by restricting unilateral decisions by government on remuneration
for judges and judicial officers.
[15]
In
assessing the Minister’s response, particularly its factual foundation, the
Court must give due deference to the role of the Minister, of Government, and
consider whether on the evidence before the Court it was rational for there to
be reliance on the factual bases for the decision taken. Again in the final
stage of its review of the Response, the Court must give due deference to the
Minister’s decision, bearing in mind that the commission process is flexible
and the recommendations of the commission are not binding. Ultimately, the
reviewing Court must determine whether, if viewed globally it appears that the
commission process has been effective and that the setting of judicial
remuneration has been depoliticized.” If so the Government’s choice should
stand (Bodner, above, at paras. 28-40).
Review of the Response
in this Case
[16]
As
earlier noted, the Minister’s response specifies that it is based on two
distinct factual grounds. Since those are essentially unrelated, I propose to
review them separately and then to assess the Response, viewing these bases
together, and as Bodner directs, “globally” in light of the purposes of
the commission and response process for determining judicial remuneration.
A. The Reliance on
Deteriorating Economic Conditions
[17]
As
noted by the Response a key criterion governing the mandate of the Special
Advisor was “the prevailing economic conditions in Canada, including the cost of
living and the overall economic and current financial position of the federal
government”. Submissions were made to the Special Advisor in regard to this
criterion and he commented in his report on those circumstances based on the
submissions made to him. Those submissions, made in the spring of 2008, did not
highlight serious economic difficulties that soon were seen to be facing Canada. The economic
circumstances and the financial position relied upon in the Response, however, are
specific related to the significant deterioration in the global economic
situation and the Government’s economic and financial position “after the
Special Advisor concluded his inquiry and submitted his recommendations on May
30, 2008”. The reliance upon deteriorating economic conditions, without
reference to the specific recommendations, cannot be, indeed it does not
purport to be, a response to the recommendations made by the Special Advisor.
[18]
The
Response relies upon Budget 2009 – Canada’s Economic Action Plan (Canada’s Economic Action Plan,
Budget 2009, Department of Finance Canada. Tabled in the House of Commons,
January 27, 2009), which, inter alia, referred to the introduction of
legislation to ensure predictability of federal public sector wages during this
difficult economic period. That legislation, later enacted as the Expenditure
Restraint Act, S.C. 2009, c. 2.e.393, in force on assent March 12,
2009, provided for annual wage increases, for the federal public administration
generally, of 2.3 per cent in 2007-08 and 1.5 percent for the following three
years (Expenditure Restraint Act, s. 16). Exemptions from those
limitations were made under the Act for certain groups of public servants and
for others whose salary increases, in excess of the restraint limits, had been
settled before the wage restraints were announced. The applicants before me
suggested that some thousands of public servants were ultimately exempt from
the statutory wage restraints.
[19]
Among
those exempt (Expenditure Restraint Act, ss. 5, 13(4)) from the general restraint
were judges paid a salary under the Judges Act, and prothonotaries
appointed under s.12 of the Federal Courts Act. Salary indexing for
judges under the Judges Act provides for annual judicial salary
adjustments by the industrial aggregate, a measure of wages over time compiled
by Statistics Canada. The adjustments paid for years commencing 2007-08, 2008-09
and 2009-10 were said before me to be respectively 3%, 3.2% and 2.8%, and that
expected to be paid in 2010-11 has been forecast at 2.8%. So long as the
salaries of prothonotaries are proportionately related to judges of the Federal
Court, as they have been, and are continuing to be by the Minister’s Response,
annual salary adjustments above those fixed for public servants generally will
have been payable to prothonotaries, for the period 2007 to 2011. As a result, federally
appointed judges, and the applicant prothonotaries would have annual increases
restrained, but at rates slightly above those payable to public servants
generally.
[20]
In
commenting on the effects of deteriorating economic conditions and public
finances the Response of the Minister makes the following comments.
“The
Government accepts that compensation of judges - and judicial officers such as
prothonotaries – is subject to certain unique requirements that do not apply
with respect to others paid from the public purse. In particular, it is
necessary to ensure that judicial compensation does not fall below the
‘minimum’ required to protect financial security, including, through erosion of
compensation levels over time. The purpose of this minimum is to avoid the
perception that Judges might be susceptible to political pressure through
economic manipulation as witnessed in many other countries.” (Minister’s
Response, p. 2, 3rd last para.).
…
“This is not the time for the kind of
major enhancements contemplated by the Special Advisor’s Report. Indeed,
exempting prothonotaries from across-the-board public sector restraint measures
would more likely undermine than enhance the public’s perception of their
judicial independence and impartiality.” (Minister’s Response, p. 2, last
para.).
…
In support of this view, the Response
refers to comments of Chief Justice Lamer in Reference re P.E.I. Judges
where statutory compensation restraints for provincial judges, comparable to
those applicable to public servants generally, were upheld as applicable and
not enactments compromising judicial independence (Above, at paras. 156, 158).
With respect, in my view the Minister’s Response in referring to a quoted
comment by Chief Justice Lamer, puts an unwarranted gloss on The Supreme
Court’s comment as “having established that it is to ensure continued public
confidence in the judicial officers that their remuneration should be subject
to measures affecting salaries of all others paid from the public purse”.
(Minister’s Response, p. 2, para. 3).
…
“Accordingly, the Government is of the
view that prothonotaries’ salaries should continue to be fixed at 69% of the
Federal Court judge’s salary. Their financial security will continue to be
protected by annual adjustments equivalent to superior court judges in Canada, a benefit to which few, if
any, Canadians could aspire in these difficult economic times. Similarly, the
Government is not prepared to implement enhancements to the prothonotaries’
pension arrangements or other benefits at this time.” (Minister’s Response,
p. 3, para. 1).
[21]
The
repeated references in the Response, particularly in dealing with deteriorating
economic conditions and public finances, underlines that those circumstances
are extraordinary. It is not unfair to infer that in better economic times the
response of government might be different. There is, however, no time and no
undertaking specified for future reconsideration by government.
[22]
The
applicants acknowledge in written submissions and oral representations to this
Court, that the economic conditions are indeed extraordinary, e.g.
“There
is no dispute that the economy has deteriorated significantly since the Adams
Report was released. The Prothonotaries accept that in an appropriate case,
economic conditions might justify a departure from the commission process” (Applicant’s Memorandum of
Fact and Law, para. 34).
[23]
Yet,
the applicants urge that in this case, the evidence before the Court does not
here establish the factual bases to support the government’s action. It is said
Government provided no information demonstrating the cost of implementing the
recommendations, that there is no clear undertaking that the refusal of the
recommendations is temporary, and Government’s reliance on the necessity of
comparable treatment of all or nearly all persons paid from public funds is not
supported by evidence that comparable treatment was applied. Indeed, the
exemptions from compensation restraints under the Expenditure Restraint Act,
applicable to a substantial number of people, appear to belie the possibility
of uniformly comparable treatment of all those paid from public funds.
[24]
Yet,
this Court may not require evidence of a particular kind, and is not to assess
the wisdom or effectiveness of the application of public policy by the
Government of Canada in the circumstances of this case. That is not the
function of the Court. Rather, the task before me is to assess whether evidence
produced by Government in support of the reasons set out in the Minister’s
Response provide a rational, in the sense of reasonable, basis for the Response
and departure from the recommendations.
[25]
There
is evidence to support the basis for the Minister’s Response with reference to
the deterioration of economic conditions and of public finance after the report
of the Special Advisor was presented. The Response refers to the document Budget
2009- Canada’s Economic Action Plan of January 27, 2009. The significance
of the deteriorating circumstances leading to that Budget are described in
considerable detail, both for the global situation and for that facing Canada,
in an affidavit filed in this case on behalf of the Government by Benoit
Robidoux, General Director, Economic and Fiscal Policy Branch, Department of
Finance, Canada. There is no contrary evidence. That affidavit dated May 13,
2009, in my opinion, clearly establishes a reasonable basis for the actions of
Government, in its lawful discretion, to manage economic and fiscal policy,
including wage restraints, in extraordinary economic times. That discretion is
clearly within Government’s constitutional authority. As for
its choices made to meet extraordinary conditions, absent any serious Charter
issues, the Court defers to the determinations of Government. That is not to
ignore other constitutional responsibilities of Government, even if it is left
to the Government to determine generally when other responsibilities are to be
met.
[26]
In
my view, there is evidence of a factual basis to support the Government’s
departure from the recommendations, that is, the extraordinary deterioration of
economic conditions and of public finance. In Bodner it is suggested
that if new facts or circumstances arise after the release of a compensation
commission’s report the Government may rely on that in its reasons for varying
the commission’s recommendations. In this case the extraordinary economic
circumstances relied upon by Government provide a reasonable basis for the
first ground of its response and its actions in not accepting the
recommendations of the Special Advisor.
[27]
That
finding precludes this Court granting the application sought. I do not set
aside the Minister’s Response. Yet that does not mean that the Response meets
the accepted test for a rational or legitimate response to the recommendations
made by the Special Advisor. In adopting the decision to reject, not merely to
modify, the Advisor’s recommendation, for extraordinary economic reasons, the
Minister’s Response is made without reference to the reasons for or to the
recommendations themselves.
B. Additional
Considerations
[28]
I
turn then to assess the Additional Considerations set out in the Response,
which are directed to the recommendations. The Response notes that the
Government is mindful that the Reference re P.E.I. Judges, which
established the process, apart from the current state of the economy would
require a rational justification for failure to fully implement the
recommendations of the Special Advisor. It then turns to the Government’s
concerns with some of the assumptions underpinning those recommendations, in
particular in relation to salary. I consider first the comments concerning
salary and pension recommendation, then I turn to other matters raised.
Salary
[29]
In
relation to the salary recommendations the Response takes the amount
recommended, at 80% of a Federal Court Judge’s salary, and calculates the
amount this would be for most of the prothonotaries if it were to be
retroactive, as recommended, to April 1, 2004. The calculation is not
characterized by the Response for any particular purpose. (Minister’s Response,
p. 3, para. 3). If it was intended to suggest the calculated cumulative salary
increase over 5 years would be unwarranted, that could only be based on the
assumption that the salaries actually paid were appropriately determined by an
acceptable process. They were not. They were the result of negotiations between
representatives of the parties in 2001.
[30]
The
Special Advisor’s reasoning in relation to salary comparators is said to be
“problematic”.
It is true that the Advisor accepted the prothonotaries’ position that
provincial courts masters and judges were the most relevant historical
comparators for assessing prothonotaries’ salary levels. That was based on the
evidence before him. The Response then comments that, “Notably he relied on
masters in only three of Canada’s 13 provinces and territories”. With
respect, in part that is true but it is an incomplete representation of the
recommendation on salaries, which notes, first the average of all known
salaries for provincial and territorial court judges and masters across Canada,
and then the average of salaries of the masters in the three provinces where
their work is comparable to that of Federal Court prothonotaries. Those two
comparators were said to be respectively 79% and 79.4% of a Federal Court
judge’s salary in 2007 (Report of the Special Advisor, p. 56).
[31]
The
Response notes that the Advisor rejected the Government’s position that federal
public service comparators should be preferred, in particular salaries for
members of administrative tribunals at the GCQ-5 and GCQ-6 levels. This was
argued before the Special Advisor whose report includes his appraisal of those
suggested as primary comparators of salary levels from an administrative system
of Government as manager of public employees, the Hay system for classification
of public servants. That system had been used unilaterally by Government itself
as a comparator for prothonotaries, without any consultation with
prothonotaries, and while under that system they would have been classified
within the GFQ-5 group, they were actually paid as though they were in the
GFQ-6 group. The expert produced to testify before the Special Advisor about
the system apparently relied upon scant Government information about the office
of prothonotary. The Government’s Response does not explain why the reasons of
the Special Advisor not to accept its preference for public service
comparators, were in error. To complain that the Advisor did not accept its
preference for comparators is not a reasoned response to the recommendations (Bodner,
above, at para. 23).
[32]
In
another reiteration of a preference expressed unsuccessfully by Government to
the Special Advisor, the Response notes concern with the validity of salaries
of provincial masters as comparators because there was no evidence of a basis,
other than administrative efficiency and convenience, for the linkage of
masters’ salaries to those of provincial judges. The Response asserts that “he
[the Advisor] finds that masters would not have been able to independently
assert this parity argument since they could not and do not equate their work
to that of judges in the superior courts.” (Minister’s Response, p. 3, last
para.). With respect, the “finding” referred to is merely a descriptive
statement in the Advisor’s Report concerning possible comparators, not
repeated in his recommendations on salary. In my view this consideration is not
a response to the recommendations on salary. The Response does not explain why
the linkage of salary levels between provincial court judges and masters is
relevant to the issue of comparators here. At most it seems a complaint that
the Advisor did not accept the argument advanced and the position preferred by
Government.
[33]
The
final comment of the Response concerning the recommendations on salary is that the
Advisor misconstrued the Government’s position regarding the requirement of
ensuring that salaries do not fall below a minimum (Minister’s Response, p. 4,
1st full para.). It is not clear what the significance of this
comment is. Even if that criticism about the Advisor’s interpretation of the
submissions to him were warranted, it is not a response to the recommendations
about salary, which do not refer to the matter of a minimum salary. Moreover,
aside from that criticism, the minimum salary amount for prothonotaries, has
not been an issue before me, it does not appear to have been an issue between
the parties before the Special Advisor, and it is not expressed as an aspect of
the final recommendations on salary. It was argued before me that if the advisor
misunderstood the Government’s position he must then have interpreted that to be
specifying a minimum salary, above which his recommendation should fall. But
that is sheer speculation and has no basis in his report or recommendations.
[34]
The
Response concludes its discussion of the Advisor’s salary recommendations,
referring to “these cumulative flaws in both assumptions and logic”, concluding
that “the Government would not in any event be prepared to accept his salary
recommendation.” (Minister’s Response, p. 4, 2nd full para.). It
does not suggest any modification of that recommendation, rather the Response
underlines the view of Government that “prothonotaries’ salary should be fixed
at 69% of a Federal Court judges’ salary” (Minister’s Response, p. 3, para 1),
that is, it should remain unchanged.
Pensions
[35]
The
Response notes that the Advisor relied on judicial annuities, not civil service
pension plans, as proper comparators to consider prothonotaries’ pensions. It
adds, that the Advisor’s recommendation on pensions seeks to combine in one
plan the most generous elements of each of the provincial and territorial
judicial pension arrangements. Further, it states that, “Even in a period of
economic stability and growth, it would be unreasonable for the Government to
accept a pension recommendation that seeks to combine in one plan the most
generous elements of each of the provincial and territorial judicial pension
arrangements”. (Minister’s Response, p. 4, 3rd last para.).
[36]
The
Minister’s Response, not in its text but in footnote 17, includes for the first
time, a variation of the framework for prothonotaries’ pensions, in the
following terms:
¼ “Using the more reasonable average age
of appointment of the six existing prothonotaries (45 years of age) results in
an accrual period of 23.3 years with an accrual rate of 3% . Indeed, an accrual
rate of 3% is applied in a number of jurisdictions with benefits based on three
years best average salary rather than the final year as recommended.” (Minister’s
Response, p. 6, note 17).
In my opinion, the manner of the
presentation of this variation does not mean that Government was proposing this
as a serious modification of the Special Advisor’s recommendations on pensions.
It cannot be considered as a rational response to those recommendations.
[37]
The
final reason in the Response for rejecting the pension recommendations of the
Special Advisor was that he incorrectly assumed his recommended enhancements
could be easily implemented through the existing public service plan, which is
described as a significant underestimate of the technical complexity and cost
associated with implementation within the PSSA scheme. The essence of the
recommendation of the Advisor is that there be an appropriate retirement
arrangement for the office of prothonotary, with certain features. Apart from
the detailed features he notes, such an arrangement is in place in six
provinces for provincial judges and masters. He does suggest that arrangements
“can be implemented through the existing PSSP (registered plan) with a
supplementary RCA to top up the difference” as is already in place, he
suggests, for federal deputy ministers. (Report of the Special Advisor at p.
62). The latter exceptional arrangement, if it exist, is not disputed by the
Response.
[38]
There
may well be reasons why the detailed recommendations for a pension arrangement
was not acceptable, but the response goes no further than to reject the
recommendation without serious consideration for any of it, even in principle.
The rejection itself can hardly be taken as rationally related to the
recommendations in the special circumstances of this case where never before have
pensions for prothonotaries been considered in the process of commission
recommendation and response required if judicial independence is to be
recognized.
[39]
Curiously,
after referring generally to the reasons given in relation to salary proposals,
the Response states “Government has concluded it would not be reasonable to
contemplate implementing major pension or other benefit enhancements in the
current economic situation. Rather the Government will take the opportunity to
consider how the current pension arrangements might be modified to reflect the
particular circumstances of prothonotaries as judicial officers, including the
admittedly unique demographics of mid-career, life-time appointments”. (Minister’s
Response, p. 4, last para.).
[40]
There
is no explanation why only now, in 2009, is the opportunity to be taken to account
of the particular circumstances of prothonotaries in reviewing pension
arrangements. No review has taken place. I may infer too much, but now, 12
years after the decision in Reference re P.E.I. Judges, and with the
evolving jurisprudence since, the law officers of the Crown surely cannot be
proposing to unilaterally review prothonotaries’ pension arrangements and
consider changes to be implemented, except in a response to recommendations of
an open, fair and effective commission and response process.
Other Benefit
Enhancements
[41]
I
have noted that the Response stated it is not timely to implement other benefit
enhancements. These were subjects of specific comment or recommendations by the
Special Advisor. They are dealt with in the Response, but only in footnote 18
in the following terms,
[18]
“More specifically the Government is not prepared to implement the Special
Advisor’s recommendations to extend long-term disability benefits and to
provide an annual tax-free allowance of $3,000 to prothonotaries. Nor is the
Government prepared to make an ex gratia payment to the former
Prothonotary and the two survivors of deceased Prothonotaries. However, the
Government will extend vacation entitlements to 6 weeks to all prothonotaries
on the basis that they all should receive the same level of benefits
immediately without executive discretion.” (Minister’s Response, p. 7,
note 18).
[The background to the decision to extend
vacation entitlements to 6 weeks for all prothonotaries, as I understand it,
was that prior to June 2009 most but not all prothonotaries had 6 weeks or
longer annual vacation. The change, by Order in Council in June 2009 provides a
standard 6 week vacation for all prothonotaries].
Other Matters
[42]
Other
matters raised by the Advisor’s Report are commented upon in the Minister’s
Response. One of those concerns the status of prothonotaries. As I read the
Advisor’s Report he makes no clear recommendation for changes. Rather he
recommends that the Minister of Justice and the Chief Justice of the Federal
Court should consider a) establishing an opportunity for prothonotaries to
elect supernumerary status, and b) taking necessary steps to reflect their
status as associate judges. The second matter dealt with concerns
administration of leave and travel arrangements and a comment that “temporary
funding of four of six prothonotaries’ positions ¼ needs to change.” (Report, above, at p. 65). I assume
that comment is the basis for the Minister’s negative reference about transfer
of responsibilities for administration of compensation of prothonotaries within
the federal fiscal and budgetary process.
[43]
For
both of these matters the Response is that each was beyond the mandate of the
Special Advisor and the Government is under no obligation to respond to these
recommendations. That is a response, but there were no clear recommendations
made on these other matters, except to consider them. The Response indicates a necessity
for representatives of the parties to be clear in advance about the issues to
be considered by any future independent commission.
[44]
The
Response rejects a recommendation that there be full reimbursement of all legal
fees and disbursements incurred by prothonotaries, because Government has
declined to pay more than 2/3 of costs incurred by federally appointed judges
for representations to the Quadrennial Commissions on judges’ compensation. As
we have seen in footnote 18 of the Response, it rejects, without explanation,
recommendations concerning a non-taxable allowance, an available sickness and
LTD insurance coverage, and ex gratia payments to widows of, and to a
former prothonotary.
[45]
The
Response makes no comment or reference to a recommendation that periodic review
of prothonotaries’ remuneration ought to track the time frames of the
quadrennial commission process for federally appointed judges. Perhaps the lack
of a response to this was mere oversight. I have noted that on the date of the
Response, the Minister responded to the latest Quadrennial Commission Report on
Judicial Compensation and Benefits, rejecting all of that Commission’s
recommendations on economic grounds similar to those relied on in the Response
concerning prothonotaries. However, in that case, in relation to federally
appointed judges, it is specifically stated that “in the event that the current
economic circumstances improve before the next Judicial Compensation and
Benefits Commission is established so as to justify salary enhancements, such
circumstance could be taken into account by the Commission.” (Response of the
Government of Canada to the Report of the 2007 Judicial Compensation and
Benefits Commission, above, at p. 2, last para.).
[46]
While
no comparable commitment is made in the Response to the recommendation for
periodic compensation reviews for prothonotaries, I do note that in oral
submissions at the hearing before me counsel for the Minister commented that
the Response did not need to say anything about periodic review because “it’s
understood that will occur. Once we have accepted that the Reference re
P.E.I. Judges applies and that prothonotaries are judicial officers, it is
our [the Government’s] constitutional obligation to ensure periodic review of
their compensation and benefits.” (Transcript, July 9, 2009, p. 114 at lines
7-17; p. 116 at lines 14-16). That last comment does explicitly acknowledge
the constitutional obligation of the Crown to support the public interest in
judicial independence by the process of periodic review of judicial
remuneration for prothonotaries, as established in Reference re P.E.I Judges
and Bodner, and acknowledged in P.C. 2007-1015 and in the Minister’s
Response.
[47]
With
reference to costs the Government notes that it has already paid prothonotaries
on an ex gratia basis $50,000 to support their participation in the
process which is said, with no evidence to support this, to be an amount that
exceeds 2/3 of their total representational costs.
C. Applying
the Test of Bodner
[48]
In
reviewing the Response of the Minister I consider the following:
The Reference re
P.E.I. Judges and evolving jurisprudence requires that compensation for
judicial officers be determined after a process including assessment by an
independent, open and effective commission and a response, by the government
agency concerned, that is rational, legitimate and that appropriately
recognizes judicial independence of the judicial officers concerned. The
commission process is not effective if it has no influence on the compensation
that results. A response by government as a result of negotiations between
judicial officers and government does not meet requirements for recognition of
judicial independence. The reasons set out in the response for not accepting a
commission’s recommendations are rational in the sense here intended, if they
are complete and set out how and why the recommendations are not accepted by
government, and if they are legitimate in the sense of meeting requirements of
the law and the constitution. Finally the reasons are to be assessed globally
with a view to determining whether the purposes of the process of an
independent commission, and response, are met.
[49]
In
dealing with the Government’s response to the recommendations of an independent
commission, in Bodner the Supreme Court commented, in part:
The
government can reject or vary the commission’s recommendations, provided that
legitimate reasons are given. Reasons that are complete and deal with the
commission’s recommendations in a meaningful way will meet the standard of
rationality. Legitimate reasons must be compatible with the common law and the
Constitution. The government must deal with the issues at stake in good faith.
Bald expressions of rejection or disapproval are inadequate. Instead, the
reasons must show that the commission’s recommendations have been taken into
account and must be based on facts and sound reasoning. They must state in what
respect and to what extent they depart from the recommendations, articulating
the grounds for rejection or variation. The reasons should reveal a
consideration of the judicial office and an intention to deal with it
appropriately. They must preclude any suggestion of attempting to manipulate
the judiciary. The reasons must reflect the underlying public interest in
having a commission process, being the depoliticization of the remuneration
process and the need to preserve judicial independence.
The
reasons must also rely upon a reasonable factual foundation. If different
weights are given to relevant factors, this difference must be justified,
Comparisons with public servants or with the private sector may be legitimate,
but the use of a particular comparator must be explained. If a new fact or
circumstance arises after the release of the commission’s report, the
government may rely on that fact or circumstance in its reasons for varying the
commission’s recommendations. It is also permissible for the government to analyse
the impact of the recommendations and to verify the accuracy of information in
the commission’s report. (Bodner, above, paras. 25-26).
[50]
I
have already concluded that in one respect the Response in this case was
reasonable, but that was without reference to the recommendations, rather it
was based on the facts of deteriorating economic conditions globally, and
financial circumstances of Government in Canada. The Response and the actions to which it was
related, in particular the determination to manage public finances, including
general public service wage restraints, was legitimate for Government, [i.e. it
was lawful and within the constitutional authority of Government.]
[51]
In Newfoundland (Treasury Board) v. N.A.P.E.,
2004 SCC 66, [2004] 3 S.C.R. 381, provincial legislation enacted to meet a
serious fiscal crisis, which infringed Charter rights against
discriminatory treatment, was applicable, saved in the circumstances under section
1 of the Charter. I note later that section of the Charter was
argued briefly by counsel for the Minister before me as a basis to support
government action in this case but that argument was not joined, or disputed,
by the applicants. In my view, N.A.P.E. supports the view that
Government’s actions in this case, including the Response, were constitutional.
Judicial deference to that action precludes intervention by this Court, in the
extraordinary economic circumstances of this case.
[52]
At
the same time, if the test as set out in Bodner is applied, I conclude
that the primary basis of the Response, that is, deterioration of the economic
situation and of public finances after the Report of the Special Advisor was
submitted, was without reference to the Advisor’s recommendations. The
recommendations were given no weight, they had no meaningful effect upon the
outcome, they were not appropriately responded to by reasonably complete
reasons dealing with them. In my opinion, the Response does not meet the
standard of rationality, either on the “overarching” ground of deteriorating economic
conditions, or on the additional grounds set out in relation to specific
recommendations. In neither case does the Response deal appropriately with the
reasons underlying the recommendations. Unless the Response does this, it is
not rational in the sense intended in Bodner.
[53]
In Bodner,
in review of the Response of the Government of Québec to recommendations made
by a provincial committee on judicial compensation and pensions, the Supreme
Court upheld the decision of the Québec Court of Appeal which quashed the
Government’s Response. The Supreme Court commented in part:
¼(the Government’s ) position is tainted
by a refusal to consider the issues relating to judicial compensation on their
merits and a desire to keep them within the general parameters of its public
sector labour relations policy. ¼ (Bodner, above, at para. 160).
The circumstances in this case are not similar
to those considered in Bodner concerning the issues there raised in the
appeals from Quebec. Yet I come to
generally similar conclusions as were there reached. The commission and
response process here followed did not have meaningful effect upon the outcome
following the Response.
Conclusions and Implications
[54]
The
reasons here set forth in the Response were not rational with reference to the
recommendations of the Special Advisor. That judgment is equally applicable to
the reasonable basis supporting Government’s decision and action to deal with
extraordinary economic conditions and deteriorating public finances after May
30, 2008, and to the additional considerations raised in the Response. If
neither the overarching ground not the additional grounds for the Response deal
appropriately with the recommendations of the Special Advisor, then viewed
globally, the reasons expressed in the Response do not respect the purposes of
the process for establishing judicial remuneration, as established by the Reference
re P.E.I Judges and as elaborated by Bodner.
[55]
Let
me be clear that the response in this case does not evidence any improper
political purpose or intent to manipulate or influence the judicial officers
concerned. Nevertheless, even though the proper process is expressly
acknowledged in the Minister’s Response that process has not been accomplished
in this case in a manner that preserves judicial independence and depoliticizes
the establishment of prothonotaries’ remuneration. In my opinion, the Response
does not meet the constitutional requirements of the commission and response
process for establishing compensation for judicial officers, here the
prothonotaries, established by the Reference re P.E.I. Judges and Bodner.
[56]
In
our democracy the rule of law is a basic pillar. It rests upon judicial
independence. That is why that independence is a basic public value. It is
secured by essential support for courts and judicial work and by appropriate
remuneration for all judicial officers. The value of judicial independence is a
matter of concern for all, not least for the Minister of Justice and Attorney
General of Canada and for all law officers of the Crown. They have the
responsibility and the ability to meet their lawful concerns in this and in all
respects. Government always has a number of constitutional obligations to meet
under our law. It may be difficult to meet them all at one time, but it is not
for this Court at this time to direct the manner or timing for those
requirements to be met. That is a continuing responsibility of Government to
which the Court must ordinarily defer.
[57]
The
extraordinary economic circumstances with which Government now copes are
unlikely to continue indefinitely. It cannot be forgotten that it is now 12
years since the requirements of the lawful process for considering the
appropriate remuneration for prothonotaries were established by the Reference
re P.E.I. Judges. Reconsideration could be initiated by re-examining the
recommendations already made by the Special Advisor’s Report of May 30, 2008,
which might expedite reconsideration when the time for that is ripe. If that is
not appropriate a new commission process will be required.
[58]
An
order goes dismissing the application for judicial review. No other order or
directions to the applicants or to the respondents is made except concerning
costs.
[59]
For
the record I note that counsel for the parties before me made submissions on
two other matters about which I make no determination since neither affects the
result. The applicants’ claim, that the Minister was in breach of the law by
failing to respond in no later than six months after the Special Advisor’s
report was submitted, as P.C. 2007-1015 provided, does not affect the order
dismissing this application. The Respondent Minister’s reliance, if it should
prove necessary, upon section 1 of the Charter to support the decision
in this case, was simply not an issue argued for the applicants and is not here
determined.
Costs
[60]
The
matter of costs as discussed in the Advisor’s report and the Minister’s
Response is not one for this Court to review.
[61]
I
consider that success in this matter is divided for dismissal of the application
does not constitute recognition of the commission and response process here
reviewed as one that met constitutional requirements. The constitutional
obligation of Government to ensure an appropriate process for establishing
salary and benefits for the prothonotaries of the Federal Court remains, just
as it was when the Special Advisor reported to the Minister on May 30, 2008.
[62]
Costs
of the parties in this Application, now dismissed, I leave for them to resolve,
and if no other resolution is made between them within 14 days of my Order,
then each shall bear their own costs.
“W.
Andrew MacKay”
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