The Superior Court of Québec issued a potentially far-reaching decision last week, declaring a number of provisions of the Expenditure Restraint Act, S.C. 2009, c. 2, s. 393, constitutionally inapplicable to the CBC/Société Radio-Canada. In Association des Réalisateurs c. Canada (Procureur Général), 2012 QCCS 3223, justice Lise Matteau held that the application of provisions limiting salary raises that could be offered to civil servants to Radio-Canada’s employees was a violation of their right to freedom of association, protected by s. 2(d) of the Charter.
The Expenditure Restraint Act sets out upper limits on the extent of pay raises that the government and a number of crown corporations are entitled to grant their employees, as part of a package of measures responding to the global economic crisis and the ensuing budgetary difficulties. Provisions of collective bargaining agreements stipulating higher raises are invalid to the extent that they exceed the limits allowed by the statute, whether the agreement was entered into before or after its enactment. This means that the statute retroactively changes some collective agreements, including those of concluded by the plaintiffs in Association des Réalisateurs.
This, they said, deprived them of their right to engage in meaningful collective negotiations with their employer over the terms of their employments, in violation of s. 2(d) of the Charter as interpreted by the Supreme Court. Justice Matteau accepted this submission. Salary questions are key to the employees’ relationship with the employer and thus being able to negotiate on them is essential for the plaintiffs’ collective-bargaining rights to be meaningful. By setting aside the agreement reached between the plaintiffs and their employer, the Expenditure Restraint Act infringes on their right to collective bargaining.
The next question the court had to decide is whether the infringement was justified under s. 1 of the Charter. Although the plaintiffs challenged the government’s claim that the Expenditure Restraint Act addressed pressing and substantial concerns, Justice Matteau accepts it, given the context of economic crisis and budgetary pressure in which it was enacted. However, she holds that the application of the statute to CBC/Radio-Canada’s agreements with its employees is not rationally connected to the objective of reducing expenditures and controlling the salaries of the public sector employees. That is because the government financing of the CBC/Société Radio-Canada does not depend on the contracts it negotiates with its employees. The government gives the CBC a lump sum of money, and the corporation decides what to do with it. Cutting or limiting the growth of the CBC’s payroll does not change its lump sum subsidy and thus doesn’t help the government’s finances.
This seems like the correct result in light of the Supreme Court’s s. 2(d) jurisprudence, although I am far from being an expert in this area. But, assuming that the decision is indeed correct, it helps illustrate just how troubling that jurisprudence is. The problem is not so much the decision itself. If the court’s analysis of the CBC’s financial relationship with the government is right, there seems to be relatively little reason for imposing salary restraints on the CBC’s employees, except perhaps the rather speculative claim that, if allowed to raise its salaries as it pleases, the CBC will end up asking for – and obtaining – unaffordable financing increases from the government.
But the more troubling question is whether courts should be policing propriety of Parliament interference with collective agreements between the government and civil servants in the first place. I think that a consideration of the institutions involved and the rights at stake suggests a negative answer.
Consider, first, the institutions. Suppose a civil servants’ union challenges the Expenditure Restraint Act. As applied to actual civil servants, it presumably is rationally connected to its objectives. So the court hearing the case will need to proceed to further stages of the s. 1 analysis – asking itself whether the restrictions it puts in place are minimally impairing of the s. 2(d) right and whether its beneficial effect outweigh the deleterious ones. Can it do so? Are courts really in a position that the limits on negotiating salaries that Parliament imposed were as little as possible? Although some comments made in obiter by Justice Matteau suggest that it would have been enough for the government to consult the unions, I wonder whether this is so considering that, after the consultation, Parliament still went ahead and imposed binding legislation. Deciding whether this legislation really was minimally impairing requires, it seems to me, analyzing the government’s budgetary situation, which is not something the courts are equipped for doing. And quite apart from institutional competence, there is the question of who, as a matter of legitimacy or political morality, ought to control government spending. The Stuart kings asserted the power to do so – and Charles I had his head cut off for his troubles. Since then, nobody has seriously challenged Parliament’s power of the purse. Is the Canadian judiciary prepared to do so?
It might be said that, when rights are at stake, it should. And, to be sure, enforcement of Charter rights sometimes results in the courts, in effect, requiring the government to make expenditures – in the area of language rights for example. But what sort of rights are at issue here? Courts say it is about a meaningful freedom of association. But the effect of the judgments in Association des Réalisateurs is to prevent Parliament from interfering with a private contract (between the CBC and its employees). Now that might be a good thing if you believe in freedom of contract. But it is clear that the framers of the Charter made a fundamental, deliberate choice not to protect economic rights – property and freedom of contract. This decision – and the Supreme Court’s jurisprudence from which it is derived – seems to say that trade unions have a constitutional right that no other Canadian has. Whatever one thinks, substantively, of the merits and demerits of unions, their being more equal than the rest of us this ought to be troubling.
Although the expression is often overused, I think that this is an area in which judicial restraint is really called for. I suppose the government will want to appeal the decision in Association des Réalisateurs. Perhaps the Supreme Court will yet have an opportunity to show some.
Double Aspect 
One thought on “No Resraint”