Date: 20040123
Docket: T-455-03
Citation: 2004 FC 108
OTTAWA, ONTARIO, THIS 23rd DAY OF JANUARY, 2004
PRESENT: THE HONOURABLE MR. JUSTICE MARTINEAU
BETWEEN:
GREGORY PEACE
Applicant
- and -
THE ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR ORDER AND ORDER
[1] The applicant, Gregory Peace, quit his job on December 21, 2001 after his employer reduced his salary by 10 percent. At the same time, the employer reduced the salary of all employees at the same rate. The applicant applied for employment insurance benefits but his application was denied by the Employment Insurance Commission (Commission) as it determined that the applicant left his job voluntarily and without just cause.
[2] The applicant appealed to the Board of Referees, which affirmed the Commission's decision. The applicant then appealed the Board's decision to the Umpire. By decision dated January 7, 2003 and issued on January 23, 2003, Umpire W. J. Haddad, Q.C., allowed the applicant's appeal because, in the view of the Umpire, "the evidence before the Board established that the applicant had just cause for leaving his employment".
[3] On February 20, 2003, the respondent, on behalf of the Commission, commenced an application for judicial review of the Umpire's decision before the Federal Court of Appeal while on March 19, 2003, the applicant commenced the present judicial review application before this Court under section 18 of the Federal Courts Act, R.S.C., 1985, c. F-7.
[4] The applicant seeks an order declaring inter alia that subsection 87(2) (the impugned provision) of the Employment Insurance Regulations, S.O.R./96-332 (Regulations), is invalid and ultra vires. Originally, the applicant also requested that the Federal Court issue a writ of mandamus to compel the Commission to pay him benefits in accordance with the decision of the Umpire immediately and irrevocably. However, at the hearing, the applicant indicated that he was no longer requesting a writ of mandamus.
[5] The impugned provision prescribes:
| 87(2) Where, in respect of a claim for benefits, an application is made by the Commission under the Federal Court Act for judicial review of the decision of the umpire, benefits are not payable in respect of that claim until the final determination of that claim.
(My emphasis)
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87(2) Lorsque la Commission fait une demande de contrôle judiciaire, aux termes de la Loi sur la Cour fédérale, de la décision du juge-arbitre concernant une demande de prestations, aucune prestation n'est payable à l'égard de cette demande tant qu'une décision définitive n'a pas été rendue.
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[6] The parties concede, and I accept, that the impugned provision clearly precludes the payment of benefits to a claimant when the Umpire's decision is favourable to the claimant but the Commission seeks judicial review of the Umpire's decision before the Federal Court of Appeal. That being said, the parties do not agree on the scope and effects of subsection 54(o), and sections 118 and 121 of the Employment Insurance Act, S.C. 1996, c. 23 (the Act) which read as follows:
| 54. The Commission may, with the approval of the Governor in Council, make regulations
(...)
(o) respecting the payment of benefits during any period intervening between an application for the determination of a question or a claim for benefits and the final determination of the question or claim;
(...)
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54. La Commission peut, avec l'agrément du gouverneur en conseil, prendre des règlements_:
[...]
o) concernant le versement de prestations au cours de l'intervalle entre une demande de règlement d'une question ou d'une demande de prestations et le règlement définitif de la question ou de la demande;
[...]
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| 118. The decision of the umpire on an appeal is final and, except for judicial review under the Federal Court Act, is not subject to appeal to or review by any court.
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118. La décision du juge-arbitre sur un appel est définitive et sans appel; elle peut cependant faire l'objet d'une demande de contrôle judiciaire aux termes de la Loi sur la Cour fédérale.
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| 121(1) If a claim for benefits is allowed by a board of referees, benefits are payable in accordance with the decision of the board even though an appeal is pending, and any benefits paid under this section after the decision of the board of referees shall be treated as having been duly paid and are not recoverable from the claimant, even if the final determination of the question is adverse to the claimant.
(2) Subsection (1) does not apply
(a) if the appeal was brought within 21 days after the day on which the decision of the board of referees was given and on the ground that the claimant ought to be disentitled under section 36; and
(b) in any other cases that the Commission may, with the approval of the Governor in Council, prescribe.
(My emphasis)
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121. (1) Lorsqu'un conseil arbitral fait droit à une demande de prestations, les prestations sont payables conformément à la décision du conseil même si un appel de cette décision est en instance. Toute prestation versée en application du présent article après la décision du conseil arbitral est considérée comme acquise et ne peut être recouvrée du prestataire, même si le règlement de la question en dernier ressort lui est défavorable.
(2) Le paragraphe (1) ne s'applique pas_:
a) si l'appel a été interjeté dans les vingt et un jours suivant la décision du conseil arbitral et pour le motif que le prestataire ne serait pas admissible au titre de l'article 36;
b) dans les autres cas que la Commission peut, avec l'agrément du gouverneur en conseil, prévoir par règlement.
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[7] The applicant submits that the impugned provision is ultra vires the Act because it is contrary to the purpose of the Act, which is to make benefits available to the claimants, not to withhold them: [1983] S.C.R. 2">Abrahams v. Attorney General of Canada, [1983] S.C.R. 2. The applicant submits that the broad regulation making power given under subsection 54(o) of the Act is not specific and, therefore, must be in agreement with the purpose of the Act: Steve Dart Co. v. Canada (Board of Arbitration), [1974] 2 F.C. 215 at 219. The Act must be read as a whole to determine the intent of the legislature and there are indications in other sections of the Act that the impugned provision does not follow that intention.
[8] More particularly, the applicant submits that section 118 of the Act states that the decision of an Umpire is final, and as such, it is not surprising that there is no specific section to deal with claimants whose appeal to an Umpire is allowed. A final decision does not need to address the issue of payment of benefits, as payment would flow directly from the decision and could not be changed. The impugned provision removes any meaning from section 118 of the Act, as it withholds benefits from claimants whose appeal to the Umpire is successful, pending the outcome of judicial review under theFederal Courts Act. The impugned provision allows a party to the proceedings to issue a stay of execution even though the Umpire is functus officio and such action can only be taken by a higher tribunal or in the presence of an explicit provision of the Act. As there is no specific provision enabling this action, the impugned provision should be declared ultra vires the Act.
[9] The applicant further submits that subsection 121(1) of the Act shows that the legislature intended for claimants who successfully appealed their case to the Board of Referees to receive benefits and for these benefits not to be recoverable at a later date, as the needs of the claimant are paramount. As such, it is not conceivable that the legislature would grant this benefit of doubt to the first level of appeal but not to one at a higher level of appeal. This is especially poignant in light of the fact that a claimant in this situation would have waited longer for a determination and thus be in greater financial need. Furthermore, it is assumed that an Umpire has greater training in the law and is expected to reach a decision with more authority than the tribunals below.
[10] The respondent submits that the applicant's arguments are unfounded. The impugned provision is in no way incompatible with either section 118 or subsection 121(1) of the Act specifically, or the purpose of the Act generally. Section 121 of the Act addresses the payment of benefits following a favourable Board decision, not an Umpire decision, and as such bears no relevance to the case at hand. Regardless, it does not preclude the adoption of a regulation that delays payment of benefits until the final determination of a judicial review application. Section 118 of the Act simply states that an Umpire's decision is final and is silent on the timing of payment of benefits pursuant to the Umpire's decision. Like the previous section, in no way does it precludes the adoption of a regulation that delays such payment until the determination of a judicial review application.
[11] The respondent submits that in addition to not directly contradicting any specific provision of the Act, the impugned provision cannot be said to be contrary to Parliament's intent. Although, the overall purpose of the Act is to make certain defined benefits available to qualified recipients, Parliament did not intend for these benefits to be infinite or without restriction. The Act contains numerous rules and regulations regarding qualification for and payment of benefits, and demonstrates that Parliament intended to have conditions and restrictions. Thus, it is incorrect to state that any regulation that limits access to benefits is contrary to the overall purpose of the Act. The rationale for the impugned provision is twofold. It ensures that the general group of employees pooling the risks of unemployment do not pay funds out to those who will eventually be proven not to be entitled. It also avoids imposing a hardship on claimants who, but for this provision, would receive benefits further to the Umpire's decision only to have to pay them back following a negative decision by the Federal Court of Appeal. These rationales fall firmly within the overall purpose of the Act.
[12] Finally, the respondent submits that, contrary to the assertions of the applicant, the impugned provision does not deny deserving claimants their benefits, but merely delays the payment of benefits to a restricted class of claimants until the claim is determined. As well, the only jurisprudence invoked by the applicant is two decisions of the Federal Court Trial Division, and which are clearly distinguishable from the case at bar. The issue before the Court in both Steve Dart Co., supra, and Smith v. Canada (Attorney General) (1999), 179 F.T.R. 134 (T.D.), was the validity of a regulation enacted pursuant to an omnibus legislative provision allowing the adoption of regulations for carrying out the purposes and provisions of the Acts. There was no specific enabling provision in the parent legislation that expressly granted the authority to adopt the impugned legislation. In the case at bar, however, the adoption of the impugned provision is authorized pursuant to an express grant of regulatory authority.
[13] I accept respondent's arguments. I find that the impugned provision is not ultra vires the Act. Though the general purpose of the Act is undoubtedly to make benefits available to the unemployed, this general purpose cannot be applied without limitation. Subsection 54(o) of the Act specifically permits for an administrative stay pending the "final determination" of the question or the claim. This encompasses the final decision on an application for judicial review of a favourable Umpire decision. In Re Telecommunication Workers Union and British Columbia Telephone Co. (1985), 18 D.L.R. (4th) 626 (S.C.C.) at 630, LaForest J. held that the Canada Labour Standards Regulations was intra vires because there was an express provision authorizing its adoption, and "to do precisely what the Code authorizes can hardly be said to breach its spirit." Here the Commission, with the approval of the Governor in Council, did what the Act authorized it to do, and the impugned provision can hardly be said to breach the spirit of the Act.
[14] Moreover, the impugned provision only delays the payment of benefits until a final determination of the question is made. Delay does not necessarily translate into incompatibility with the purpose of the Act. Furthermore, I find no conflict between the impugned provision and sections 118 or 121 of the Act, as both are silent on the timing of payment of benefits. Neither grants an unfettered power to deliver benefits. The "final" character of the Umpire decision does not prevent such decision to be reviewed by the Federal Court of Appeal. Accordingly, assuming that the Federal Court of Appeal would grant the judicial review application and set aside the Umpire decision, this would mean that the applicant did not have the right to receive benefits under the Act. Further, I also note that paragraph 121(2)(b) expressly states that subsection 121(1) does not apply "in any other cases that the Commission may, with the approval of the Governor in Council, prescribe".
[15] For all of the above reasons, I find that the impugned provision is a valid regulation and intra vires the Act.
[16] The applicant also seeks to invalidate section 84 of the Regulations as ultra vires the Act since it allows an absurd consequence that is contrary to the intent of the legislature: Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27 at paragraph 27. The latter provision precludes the payment of benefits to a claimant when the Board renders a decision favourable to the claimant but the Commission appeals the Board's decision to the Umpire. It reads:
| 84. Benefits are not payable in accordance with a decision of a board of referees if, within 21 days after the day on which a decision is given, the Commission appeals to the umpire on the ground that the board has erred in law.
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84. Aucune prestation n'est payable par suite de la décision d'un conseil arbitral si, dans les vingt et un jours suivant la date où celle-ci a été rendue, la Commission interjette appel devant un juge-arbitre pour le motif que le conseil a commis une erreur de droit.
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[17] The second issue raised by the applicant can be decided on the basis of standing. Section 84 of the Regulations clearly does not impact the situation of the applicant, as he is not appealing the decision of the Board of Referees. The impugned provision is the applicable regulation which guides the applicant's claim. The applicant has not presented an argument for public interest standing and, in my mind, does not meet the requirements set out inFinlay v. Canada (Minister of Finance) (1986), 33 D.L.R. (4th) 321 (S.C.C.). Even if I were to overlook this fact, I cannot find justification for declaring section 84 of the Regulations ultra vires the Act for essentially the same reasoning expressed above with regard to the impugned provision. The Commission has been granted the express authority under both subsection 54(o) and paragraph 121(2)(b) of the Act to make regulations governing the manner in which benefits are to be paid or withheld. It is not contrary to the spirit of the Act to provide restrictions or limits, and it is in fact necessary and reasonable in the circumstances.
[18] For the reasons above, the present application must fail. Costs will be in favour of the respondent. A lump sum of $1000.00 inclusive of all costs appears reasonable in the circumstances.
ORDER
THIS COURT ORDERS that the application for judicial review of the administrative decision of the Employment Insurance Commission to withhold benefits payable to the applicant until the final determination of the application for judicial review filed by the Attorney General of Canada, be dismissed. Costs in the amount of $1000.00 are awarded in favour of the respondent.
"Luc Martineau"
Judge
FEDERAL COURT
NAMES OF COUNSEL AND SOLICITORS OF RECORD
DOCKET: T-455-03
STYLE OF CAUSE: GREGORY PEACE v. THE ATTORNEY GENERAL OF CANADA
PLACE OF HEARING: MONTREAL, QUEBEC
DATE OF HEARING: JANUARY 8, 2004
REASONS FOR ORDER
AND ORDER: THE HONOURABLE MR. JUSTICE MARTINEAU
DATED: JANUARY 23, 2004
APPEARANCES:
MR. GREGORY PEACE FOR THE APPLICANT
(REPRESENTING HIMSELF)
MR. JAN BRONGERS FOR THE RESPONDENT
SOLICITORS OF RECORD:
MR. GREGORY PEACE FOR APPLICANT
MONTREAL, QUEBEC
MORRIS ROSENBERG FOR THE RESPONDENT
DEPUTY ATTORNEY GENERAL OF CANADA
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