The premier weekly newspaper for the legal profession in Ontario
Issue link: https://digital.lawtimesnews.com/i/50554
PAGE 14 CaseLawLaw SUPREME COURT OF CANADA Constitutional Law DISTRIBUTION OF LEGISLATIVE AUTHORITY Versions of ss. 66.1 and 66.3 of Employment Insurance Act (Can.) applicable in 2002, 2003 and 2005 were unconstitutional Employment Insurance Act (Can.) restructured unemployment insur- ance system and introduced five types of employment benefits: wage subsidies, earnings supple- ments, self-employment assistance, job creation partnerships and skills loans or grants. Financing of Em- ployment Insurance Account also revised in order to balance pro- gram's budget over long-term. Based on Guidelines set out in s. 66 of Act, premiums set high enough to cover system's current expen- ditures and ensure gradual accu- mulation of reserve. Over six or seven years, deficits absorbed and surpluses of more than $40 billion accumulated. Parliament enacted s. 66.1 in 2001 which authorized Governor in Council to set pre- mium rates directly for 2002 and 2003. Parliament set premium rate in Act itself in 2004 but for 2005 enacted s. 66.3 which permitted Governor in Council to once again set rates. Appellants unsuccessfully challenged constitutional validity of "active" measures, premium- setting mechanisms, accumulation of surpluses and allocation of those surpluses to overall federal expen- ditures. Appeal allowed in part. Despite existence of large surpluses sufficient connection maintained between employment insurance premiums and regulatory scheme so long as s. 66 of Act applied. Section contained principles that governed exercise of premium- setting power and served as basis for policy of allocation of and sta- bility in amounts being levied that justified characterizing amounts, from constitutional standpoint, as regulatory charge. Legal effects of situation resulting from 2001 and 2004 amendments to Act under which power to set premium rates delegated to Governor General in Council but legal framework for exercising power eliminated, significant. Relationship between levy and regulatory scheme had disappeared and premiums trans- formed into kind of payroll tax. 2001 legislation, which applied in 2002 and 2003, altered legal status of premiums collected under this system which could not be viewed as regulatory charge. Same word- ing used for s. 66.3 which applied in 2005. Section 53 of Constitu- tion Act, 1867 (Can.), provides that Parliament alone has power to impose tax. Given ambiguous nature of levy, whether Parliament intended to delegate taxing author- ity remained uncertain. Impugned provisions do not satisfy require- ments of s. 53 of Constitution Act, 1867. Active measures adopted by Parliament fell within its legisla- tive authority. System adopted to finance employment insurance remained consistent with constitu- tional norms except in 2002, 2003 and 2005 when premium-setting mechanism inconsistent with con- stitutional principles governing creation of regulatory charges and imposition of taxes. Employment benefits programs new initiatives but remained related to objective of maintaining ties with labour market and designed to reinforce ties with labour market or to pre- pare workers to re-enter it. De- spite existence of large surpluses sufficient connection maintained between employment insurance premiums and regulatory scheme so long as s. 66 of Act applied. Section contained principles that governed exercise of premium-set- ting power and served as basis for policy of allocation of and stability in amounts being levied that justi- fied characterizing amounts, from constitutional standpoint, as regu- latory charge. Confederation des syndicate nation- aux v. Canada (Procureur general); Syndicat national des employes de l'aluminium d'Arvida inc. v. Can- ada (Procureur general) (Dec. 11, 2008, S.C.C., McLachlin C.J.C., Binnie, LeBel, Deschamps, Fish, Abella and Rothstein JJ., File No. 31809; 31810) Appeals from 157 A.C.W.S. (3d) 761 and 157 A.C.W.S. (3d) 762 were both al- lowed. Consolidated Case. Order No. 008/350/071 (73 pp.). FEDERAL COURT OF APPEAL Charter Of Rights FUNDAMENTAL JUSTICE Declaration that s. 41(b.1) of Marihuana Medical Access Regulations (Can.) are invalid was upheld on appeal Attorney General appealed a de- cision of the Federal Court in which s. 41(b.1) of the Marihuana Medical Access Regulations (Can.) ("MMAR") was declared invalid on the ground that it imposed an arbitrary restriction on respon- dents' right of access to marijuana for medical purposes under s. 7 of the Charter of Rights. Provision in question stated that a person desig- nated by an authorized possessor to February 23, 2009 • Law Times COURT DECISIONS ainmaker_LT_June2_08.indd 1 CaseLaw is a weekly summary of notable unreported civil and criminal court decisions by the Supreme Court of Canada, the Federal Court of Canada and all Ontario courts. Single or multiple copies of the full text of any case digested in this issue can be obtained by: 5/28/08 10:43:29 AM i) completing and mailing in the order form in this issue; or ii) calling CaseLaw's photocopy department at (905) 841-6472 in Toronto, (800) 263-3269 in Ontario and Quebec, or (800) 263-2037 in other provinces; or iii) faxing a copy of the completed order form to (905) 841-5085. produce marijuana for the medical use of that person shall not be li- censed if designated to produce for more than one person. Respon- dents' application for a producer to be designated had been refused pursuant s. 41(b.1). Appeal dis- missed. Court not persuaded judge below committed any error in finding the Government's policy of licensing a single dealer to pro- duce marijuana for distribution to those authorized to possess mari- juana for medical use provided an adequate licit supply of marijuana to authorized possessors. Court not persuaded burden of proof was re- versed by imposing on Crown the burden of establishing the policy was not in breach of the principles of fundamental justice because it imposed a reasonable restriction on access to medical marijuana as in the context, the predecessor to the provision of the MMAR had already been held to be invalid and the only question was whether the new policy introduced latter made a difference. Sfetkopoulos v. Canada (Attorney General) (Oct. 27, 2008, F.C.A., Evans, Sharlow and Ryer JJ.A., File No. A-55-08) Appeal from 76 W.C.B. (2d) 747 dismissed. Order No. 008/316/034 (6 pp.). Municipal Law TAXATION Federal Court unduly restricted meanings of words "reservoir" and "storage tanks" This was appeal of decisions by Federal Court Judge respecting appellants' taxation. Respondent city made amendment to struc- ture and rate of real property tax. It abolished its business tax and increased real property tax appli- cable to category of immovables where they were located within sector corresponding to one of municipalities in which business tax was levied. Appellants, Crown corporations, claimed that they were exempted from paying for- mer business tax from calculation of effective rate applicable to non- residential immovables. Federal Court allowed city's applications for judicial review and quashed ap- pellants' decisions revising effective tax rate used by city to determine amount "in lieu of taxes". Federal Court referred cases back to ap- pellants to render new decision in accordance with Payments in Lieu of Taxes Act (Can.), and Crown Corporation Payments Regula- tions (Can.). Appeal allowed. Act and Regulations granted discretion to Crown corporation. Appellants had authority to vary or correct ef- fective rate, real property tax rate that was applicable to properties. Appellants both subtracted from effective taxation rate equivalent of business tax that had been in- www.lawtimesnews.com cluded in real property tax but they used different methods to ar- rive at same result. Method chosen by appellant MPA was more con- sistent than method chosen by ap- pellant CBC. Appellants exercised discretion legally, in compliance with objective and scheme of Act and Regulations, enabling legisla- tion and intention of Parliament. Decision made by MPA in exer- cising discretion had reasonable basis in fact and decision was both valid and legal. However, classifica- tion and basis for calculation used by CBC and result obtained for amount of business tax were not reasonable. Method used by MPA was applied and CBC's decision was amended. Federal Court un- duly restricted meanings of words "reservoir" and "storage tanks" by limiting them to receptacles for storing liquid or gaseous prod- ucts. Silos and reservoirs were in- cluded in objects exempted under Schedule II to Act and they must be struck from application for pay- ment in lieu of real property tax. Montreal Port Authority v. Montreal (City) (Sep. 19, 2008, F.C.A., Le- tourneau, Noel and Trudel J.A., File No. A-413-07; A-427-07) Or- der No. 008/331/070 (58 pp.). FEDERAL COURT Citizenship LOSS OF CITIZENSHIP Revocation of citizenship for complicity in World War II atrocities upheld on review Application for judicial review of decision revoking applicant's Ca- nadian citizenship. Applicant was Ukrainian national who acquired Canadian citizenship after being admitted to Canada as permanent resident. Applicant was subse- quently found to have knowingly concealed that he had been inter- preter with Nazi death squad dur- ing World War II, though he was never found to have participated in atrocities. Federal Cabinet revoked applicant's Canadian citizenship but this decision was quashed on appeal from unsuccessful applica- tion for judicial review. Cabinet reconsidered matter and again revoked applicant's Canadian citi- zenship. Cabinet concluded appli- cant had been complicit in activi- ties of death squad and that public interest in revocation outweighed applicant's personal interests. Ap- plication dismissed. Standard of review was reasonableness, though less deference was owing with respect to finding of complicity than with respect to balancing of interests. Cabinet's conclusion on each issue was within range of pos- sible acceptable outcomes. Issue of complicity was limited to Cabi- net's application of its revocation policy and not whether applicant had in fact been complicit. Appli- cant failed to rebut presumption that he had knowledge of death squad's activities and shared com- mon purpose. Cabinet was reason- able in concluding applicant's con- scription did not necessarily negate complicity. Nothing indicated ap- plicant had been mistreated, found death squad's activities to be ab- horrent, or sought to be relieved of his duties. Cabinet's reasons with respect to complicity were suffi- cient even though they might not have addressed every point raised by applicant. Cabinet's reasons with respect to balancing of in- terests were brief but they plainly disclosed why public interest was given priority over applicant's personal interests. Purported in- evitability that Cabinet would not change outcome after reconsidera- tion did not amount to reasonable apprehension of bias. Oberlander v. Canada (Attorney General) (Oct. 27, 2008, F.C., Phelan J., File No. T-1158-07) Or- der No. 008/315/061 (43 pp.). ONTARIO CIVIL CASES Appeal GROUNDS Constitutional arguments should not be raised for first time on appeal Defendants ("Merck") sought leave to appeal decision dismiss- ing motion to stay proceedings pending final disposition of over- lapping class action previously certified in Saskatchewan, leave to appeal order certifying action as class proceeding under Class Pro- ceedings Act, 1992 (Ont.), and raised, for first time, constitution- al questions, with respect to each motion. Merck manufactured and distributed drug Vioxx which was withdrawn from market. Plain- tiffs commenced this proceeding and other users of drug began class proceedings. One plaintiff, W., began class action proceed- ing in Saskatchewan and Ontario. Saskatchewan proceeding certi- fied as multi-jurisdictional opt- out class action proceeding and Ontario-related W. action stayed until further order. Saskatchewan matter and present action pro- ceeded in respective jurisdictions ultimately leading to current mo- tions and application. Application to raise constitutional questions dismissed. Merck sought leave to challenge constitutionality of Act. Issues previously before courts in multi-jurisdictional class proceed- ings and raised by Merck in Sas- katchewan litigation. No reason