Date: 20100721
Docket: A-388-09
Citation: 2010 FCA 195
CORAM: LÉTOURNEAU
J.A.
SEXTON J.A.
EVANS
J.A.
BETWEEN:
KEVIN R. AALTO, ROZA ARONOVITCH,
ROGER R. LAFRENIÈRE, MARTHA MILCZYNSKI
RICHARD MORNEAU and MIREILLE TABIB
Appellants
and
ATTORNEY GENERAL OF CANADA
Respondent
REASONS FOR JUDGMENT
THE COURT
[1]
This is an
appeal by the six Prothonotaries of the Federal Court from a decision by Deputy
Judge MacKay (Applications Judge), dated August 28, 2009 (2009 FC 861). The
Applications Judge dismissed the Appellants’ application for judicial review to
set aside the Response of the Minister of Justice on behalf of the Government
of Canada (Response), dated February 11, 2009. In that Response, the Government
refused to implement all the recommendations made by the Special Advisor on
Prothonotaries’ Compensation, the Honourable George W. Adams, Q.C., except a recommendation
that their vacation entitlement be extended to six weeks.
[2]
The
Applications Judge held that the principal basis of the Response was reasonable,
namely, the deteriorating state of public finances since Mr Adams delivered his
recommendations to the Government on May 30, 2008, and the resulting imposition
of pay restraint on the federal public service. The Applications Judge then went
on to consider the additional reasons given in the Response for rejecting
specific recommendations. He concluded that these reasons did not satisfy the
test established by the Supreme Court of Canada in Bodner v. Alberta,
2005 SCC 44, [2005] 2 S.C.R. 286 (Bodner), for determining the
constitutionality of a government’s refusal to implement the recommendations of
an independent person or body appointed to ensure a process for setting
compensation consistent with the constitutional guarantee of judicial
independence. Nevertheless, despite his findings of constitutional inadequacy,
the Applications Judge declined to grant a remedy.
[3]
The Appellants’
principal argument in this appeal is that the Applications Judge erred in
failing to grant at least a declaratory order that the constitutional guarantee
of judicial independence through financial security had been breached by the
additional reasons given in the Response to the particular recommendations of
the Special Advisor. They also argue that the Applications Judge applied the
wrong legal test in accepting that the Response was reasonable insofar as it
was based on the damage to Canada’s public finances caused by
the global recession, which had led the Government to introduce legislation
imposing restraint on federal public service compensation.
In our opinion, the appeal cannot succeed. Viewed globally
and taking into consideration the deteriorating state of public finances, the
Government’s Response to the recommendations meets the standards of the Bodner
test and is therefore constitutional. In the absence of a breach of the
Constitution, the question of remedy does not arise.
[4]
This
conclusion makes it unnecessary for us to examine the other reasons given by
the Government for rejecting Mr Adams’ particular recommendations. In our view,
it would serve little purpose for this Court to embark on such an inquiry.
[5]
It is
impossible to know now when public finances will have improved sufficiently to
persuade the Government to revisit the Prothonotaries’ compensation package. By
that time, the Adams recommendations may have been overtaken by events and be of
little relevance to the work of a new independent review. To the extent that Mr
Adams’ recommendations are still relevant, the Prothonotaries may rely on them
in the new process and respond to the objections that the Government has
already raised in the Response under review in the present proceedings. If the
Government rejects recommendations emanating from the next independent review and
the Prothonotaries make an application for judicial review, the Court can then consider
the legality of the Government’s response in the context of the new recommendations
and the circumstances existing at that time.
[6]
Two
fundamental questions are not in dispute. First, the work of the Prothonotaries
is integral to the administration of justice in the Federal Court. They perform
case management functions (including assisting parties to settle disputes), determine
pre-hearing motions, and conduct trials where no more than $50,000 are at
stake. Over the years, their role has expanded and the high quality of their
work is unquestioned. The Prothonotaries relieve Judges of the Federal Court of
a considerable burden and greatly contribute to the expeditious administration
of justice by the Court.
[7]
Second, Prothonotaries
enjoy the constitutional guarantee of independence, including financial
security, possessed by other judicial officers: judges of superior and provincial
courts, and masters. The rule of law requires nothing less. Accordingly, the constitutional
principles on which the process for the determination of judges’ compensation
is based also apply to the Prothonotaries, including the requirement of a periodic
review of their salaries and other benefits on the basis of recommendations
from an independent process.
[8]
The Appellants
argue, and we agree, that the constitutionality of the principal basis of the Government’s
Response must be based on the Bodner test. In Bodner, the Supreme
Court of Canada held (at para. 29) that a government’s response rejecting
recommendations on judicial compensation is reviewable on a standard of “rationality”.
In applying that standard, a reviewing court should be deferential to the government’s
unique position in managing the country’s financial affairs. The Court stated
(at para. 30):
The reviewing
court is not asked to determine the adequacy of judicial remuneration. Instead,
it must focus on the government’s response and on whether the purpose of the
commission process has been achieved. This is a deferential review which
acknowledges both the government’s unique position and accumulated expertise
and its constitutional responsibility for management of the province’s
financial affairs. [Emphasis added]
[9]
The Supreme
Court formulated (at para. 31) a three-part test for determining whether a
response is rational.
(1)
Has the
government articulated a legitimate reason for departing from the commission’s
recommendations?
(2)
Do the
government’s reasons rely upon a reasonable factual foundation? And
(3)
Viewed
globally, has the commission process been respected and have the purposes of
the commission – preserving judicial independence and depoliticizing the
setting of judicial remuneration – been achieved?
(i) Has the Government
articulated a legitimate reason for departing from Mr Adams’ recommendations?
[10]
The first
part of the Bodner test is “a screening mechanism”: para. 32. By
requiring a government to provide a “legitimate” reason for departing from recommendations
made by an independent body, the first branch of the test serves to “[screen]
out decisions with respect to judicial remuneration which are based on purely
political considerations, or which are enacted for discriminatory reasons”: Reference
re Remuneration of Judges of the Provincial Court of Prince Edward Island,
[1997] 3 S.C.R. 3, para. 183 (Reference re PEI Judges). A government’s decision can only be
justified for reasons that relate to the public interest, broadly understood (ibid.),
deal in good faith with the issues at stake, and demonstrate that the
recommendations have been duly taken into account. The reasons must also
“reveal a consideration of the judicial office and an intention to deal with it
appropriately”: Bodner at para. 25.
[11]
In the
present case, the overarching consideration of the Government in departing from
Mr Adams’ recommendations was the deteriorating state of the global economic
situation and its impact on the finances of the Government of Canada. The
Government states that its concern is not primarily about the amount of money involved
in responding more positively to the recommended enhancements of the six
Prothonotaries’ benefits and salaries, which are currently set by order in
council at 69% of the salary paid to federally appointed judges. Rather, it
says, to exempt the Prothonotaries from the statutory pay restraints imposed on
the federal public service following the 2008 economic crisis could create the
impression that the Government was favouring judicial officers in order to
benefit itself as a frequent litigant in the Federal Court.
[12]
In our
opinion, these are legitimate reasons for the Response and satisfy the first
part of the Bodner test. The Response was based on neither purely
political considerations nor discriminatory reasons.
[13]
In Reference
re PEI Judges, the Supreme Court indicated (at para. 184) that
“[a]cross-the-board measures which affect substantially every person who is
paid from the public purse…are prima facie rational.” Such actions, it
continued, are generally “designed to effectuate the government's overall
fiscal priorities, and hence will usually be aimed at furthering some sort of
larger public interest.” Moreover, the Court stated (at para. 196):
Nothing would
be more damaging to the reputation of the judiciary and the administration of
justice than a perception that judges were not shouldering their share of the
burden in difficult economic times.
(ii) Does the Government's Response rely upon
a reasonable factual foundation?
[14]
The second
stage of the Bodner test requires a reviewing court to consider “the
reasonableness and sufficiency of the factual foundation relied upon by the
government in rejecting or varying the commission's recommendations”: para. 33.
A court must be appropriately deferential when reviewing the evidence available
to determine whether there is a reasonable factual basis for a government’s
refusal to implement the recommendations.
[15]
In the
present case, the Government relied on two main documents: the 2009 Budget,
which describes the deteriorating economic conditions both in Canada and internationally, and an
affidavit filed by Benoit Robidoux, the General Director of the Economic and
Fiscal Policy Branch at the Department of Finance. The Applications Judge
accepted that these documents provide sufficient evidence to support the
existence of extraordinary economic circumstances. Indeed, the Appellants
concede that the economy deteriorated significantly after the Adams Report was
released in May 2008.
[16]
In
justifying its decision, the Government is not required to present evidence
capable of proving exceptional circumstances as a matter of fact: Bodner
at para. 35. In light of the significant political and media attention that the
deteriorating state of the global economy attracted, we are of the opinion that
the material relied on by the Government demonstrates a reasonable factual
basis for its decision, and that the second branch of the Bodner test is
therefore satisfied.
(iii)
When the Response is viewed
globally, has the independent process been respected and its purposes achieved?
[17]
The third part
of the Bodner test requires a reviewing court to consider the
Government’s response from a global perspective. It requires the Court to
“weigh the whole of the process and the response in order to determine whether
they demonstrate that the government has engaged in a meaningful way with the
process of the commission and has given a rational answer to its recommendations”
(para. 38). Viewing a response “globally” means assessing it holistically,
acknowledging its weaknesses, while also determining whether the overall
purpose of the recommendations has been met despite any shortcomings:
Although it
may find fault with certain aspects of the process followed by the government
or with some particular responses or lack of answer, the court must weigh and
assess the government's participation in the process and its response in order
to determine whether the response, viewed in its entirety, is impermissibly
flawed even after the proper degree of deference is shown to the government's
opinion on the issues. The focus shifts to the totality of the process and of
the response (para. 38).
[18]
The
Supreme Court has emphasized the importance of flexibility in the judicial
review process. Although a government is constitutionally obligated to provide
legitimate reasons to justify its decision, deference must be shown to its response
since the recommendations are ultimately not binding (para. 40).
[19]
In justifying
its decision on the basis of the prevailing economic circumstances, the
Government, in the Response, expressed its awareness of the unique role of the
judiciary and the need to preserve its independence through financial security:
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.
However, as a
result of the link to the salaries of superior court judges, prothonotaries are
currently protected against such erosion by annual statutory indexing, as well
as the quadrennial review of judicial compensation which provides the mechanism
for appropriate adjustments.
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. (Emphasis
added)
[20]
The
Applications Judge criticized the Government’s failure to address Mr Adams’ specific
recommendations in a sufficiently diligent and detailed manner. We agree that
the Government’s Response is not as thorough as might be expected, given the
nature of the issues at stake and the fact that no independent review of the Prothonotaries’
compensation has taken place in over a decade.
[21]
However,
the Government has already established that the circumstances under which it considered
the recommendations were quite exceptional. Since the Response was rational in
attaching overriding importance to the state of the economy, it was not, in our
opinion, unreasonable for the Government to have dealt relatively briefly with Mr
Adams’ specific recommendations.
[22]
The
Appellants attack the Response on three grounds: its failure to cost the rejected
recommendations, to confirm that the restraint measures were temporary, and to
provide evidence that “across the board” treatment was applied to all, or
substantially all, members of the federal public service. We are not persuaded
that, whether considered individually or collectively, these allegations
establish that the Bodner test has not been met.
[23]
First, we
are of the view that the Government is not constitutionally obliged to provide
detailed costing information to demonstrate that the state of the economy
prevents it from accepting Mr Adams’ recommendations. As we have already noted,
the Government does not have to present evidence capable of proving exceptional
circumstances as a matter of fact, provided that there is a reasonable factual
foundation to support its position, as we have found that there was.
[24]
Second, the
Expenditure Restraint Act, S.C. 2009, c. 2 (“ERA”), exempted
approximately 100,000 federal public employees from the pay restraint imposed
by the ERA. However, the existence of these exemptions does not, in our
opinion, invalidate the Government’s Response. Payments were made to implement agreements
concluded before the statutory cut-off date of December 8, 2008. 70,000 of the
employees in question were covered by the settlement of a pay equity claim, and
the rest by a restructuring agreement.
[25]
It is
regrettable that the Government failed to respond to Mr Adams’ recommendations
until February 11, 2009. This was five days after the introduction and first
reading of the ERA, and more than two months after the date for the delivery of
the Response set by the Order in Council establishing the review process. However,
the consequences of this delay do not, in our view, constitute a “singling out”
of the Prothonotaries. Moreover, they were partially exempted from these
restraints by subsection 13(4) of the Act since, like superior court judges, they
continue to receive statutory, indexed adjustments to their remuneration.
[26]
Third, as
for the temporary nature of the restraint measures, the Government has already
conceded that periodic reviews of the Prothonotaries’ compensation will be
necessary. The Court assumes that the Government will act in good faith, and
will revisit the issues promptly and thoroughly when economic conditions
improve.
(iv) Conclusions
[27]
When
considered in the context of the exceptional circumstances in the present case,
and viewed globally, the Government’s Response to Mr Adams’ recommendations adequately
respects the independent process and ensures that its purpose has been
achieved.
[28]
We would add
only this. It took the Government an unduly long time to establish an
independent process for setting and reviewing Prothonotaries’ compensation, and
to publish its Response to Mr Adams’ recommendations. The fact that the
Prothonotaries are only six in number does not warrant the Government’s
apparent lack of attention to their compensation. On the contrary, we would
have thought that this would make the issues relatively easy to deal with.
[29]
We expect the
Government to give high priority to the Prothonotaries’ compensation when economic
conditions no longer require such sweeping public sector pay restraint. The
current arrangements for their pensions and disability entitlement call for particularly
prompt attention. Mr Adams describes in his report the hardships that they have
already caused to two former Prothonotaries. They do not reflect well on Canada’s treatment of those
responsible for the efficient and effective administration of justice.
[30]
For these
reasons, the appeal will be dismissed.
“Gilles
Létourneau”
“J. Edgar Sexton”
“John M. Evans”
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