Proceedings of the Standing Senate Committee on
National Finance
Issue 8 - Evidence
OTTAWA, Tuesday, December 12, 2006
The Standing Senate Committee on National Finance, to which was referred Bill C-17, to amend the Judges Act and certain other acts in relation to courts, met this day at 9:03 a.m. to give consideration to the bill.
Senator Joseph A. Day (Chairman) in the chair.
[English]
The Chairman: I call this meeting to order. This morning the Standing Senate Committee on National Finance is proceeding with the study of Bill C-17, entitled an act to amend the Judges Act and certain other acts in relation to courts. We are pleased to have with us today Mr. Earl Cherniak, Commissioner; and Jeanne Ruest, Executive Director of the Judicial Compensation and Benefits Commission. I am also pleased to acknowledge Mr. Wayne Osborne, Director, Finance and Administration, for the Office of the Commissioner for Federal Judicial Affairs.
Earl A. Cherniak, Commissioner, Judicial Compensation and Benefits Commission: I am a lawyer in Toronto, and I am one of the three commissioners of the current Judicial Compensation and Benefits Commission, which is often called the quadrennial commission. The other two members, Roderick McLennan, a senior counsel in Edmonton, and Greta Chambers, a distinguished Canadian from Montreal, simply could not make it here today on the short notice, so you are stuck with me.
The quadrennial commission on judicial benefits and salaries, the Judicial Compensation and Benefits Commission, JCBC, was established by an act of Parliament, an amendment to the Judges Act, in 1999. The commission was established following a series of failed commissions, the Triennial Commissions, whose reports were universally ignored by government. I will quote very briefly from the last of those reports — the 1996 report, called the Scott Commission:
In spite of the thorough recommendation by successive Commissions, Parliament has failed, in a proactive sense, to fix judicial salaries and benefits for many years.
Furthermore, successive reports have failed to generate any meaningful response from Government. The whole subject of judicial salaries and benefits has, in spite of best intentions, been politicized.
Following that, in 1997, there was a most important pronouncement by the Supreme Court of Canada in a case that is called, Reference re Remuneration of Judges of the Provincial Court (P.E.I.), or the P.E.I. Judges Reference for short. The court held that there was a constitutional requirement for an independent commission process, which would remove judicial compensation from the realm of politics. It was a constitutional requirement, because proper and appropriate compensation for judges is an essential feature of the independence of the judiciary, which is one of the bulwarks of the democratic society in which we live. The commission was established by Parliament and is completely independent of government.
One commissioner was appointed by the government — that was Ms. Chambers — and one commissioner was appointed by the judiciary — that was me. The two of us, Ms. Chambers and myself, have the statutory power to choose the chair. We chose Mr. McLennan, as I have indicated, a very distinguished lawyer from the West.
As the name suggests, the quadrennial commission reports every four years, and by statute must deliver a report. The first commission reported on May 31, 2000. Our commission was bound to report on May 31, 2004, which it did.
The commission and the commissioners are not labour arbitrators. What goes on before the commission is in no way an arbitration in any form. The commissioners have no obligation whatsoever to those who appointed them. They see their duty as to act in the public interest and to apply the criteria laid down in the Judges Act for the determination by the commission of judicial compensation. They are: the need to attract outstanding candidates to the judiciary; the role of financial security in securing the independence of the judiciary; and the prevailing economic conditions in Canada relating particularly to the federal government.
If you have read the report of the commission — some 100 pages of closely reasoned report — it did just that. The commission advertised its existence widely across Canada. It received submissions from the public, from the government and from the judiciary; it held hearings; it did its own research; it retained its own expert assistance; and it anxiously considered all of the material and submissions that were before it.
As I indicated, it reported on May 31, 2004, as was required by statute. By the statute, the government is bound to deposit the report with Parliament within ten days, and that occurred. By the statute, the government has six months from May 31 in the year that the commission reports to consider and respond to the report and accept it or give a detailed rationale for why it did not accept the report or any part of it.
The government of the day reported within the six-month time frame and gave detailed rationale for accepting every aspect of the report of the Judicial Compensation and Benefits Commission except one minor aspect that does not concern us and had to do with the judiciary's costs. The government accepted every significant recommendation of the JCBC. Following the government's report, the legislation based on the report should go to Parliament, and a bill was prepared. Unhappily, that bill died on the Order Paper when the election was called in November 2005.
I am not before this committee to defend the report, because it speaks for itself. It sets out the various arguments, submissions and rationale for all of our conclusions. No doubt others could come to a different conclusion, but the conclusions in the report are those that the three commissioners deemed appropriate and in the public interest. The report was carefully researched, carefully thought out, carefully written and was unanimous.
In May 2006, 18 months after the government's initial response, the new government submitted a new response, although there is no statutory provision in the legislation for such a second response. That response provided for a different and lesser salary based on the new government's financial priorities.
It is now two and a half years since the commission submitted its report in respect of recommendations that were to taken place effective April 2004. Judicial salaries have not been changed since the result of the 2001 commission. The JCBC's concern is the effect of that history on the process. The next commission must report on May 31, 2008, and we are almost at 2007. The new commission process must begin in 2007, so that the ``heavy lifting'' that must go into the report can take place in the year before May 31, 2008.
It is important that Bill C-17 be passed speedily, so that the new commission can begin its work with the business of the 2004 commission behind it and the judiciary can receive the compensation and benefits detailed in the 2004 report and in the government's amendment. It is also important, in my respectful submission to this committee and to Parliament, that Parliament clears the air and reaffirms the integrity of the commission process to remove judicial compensation from the political arena. The removal from the political arena is constitutionally mandated and necessary for all the reasons set out in the P.E.I. Judges Reference by the Supreme Court of Canada.
Otherwise, there is a real danger that the current carefully crafted process, enacted by Parliament in 1999 in response to the failures of the earlier reports, will go the way of the failed triennial commissions, will breed cynicism in the judiciary and the public and will compromise the credible constitutional and democratic principle of an independent judiciary.
I am pleased to be here on behalf of the JCBC to assist this committee in its deliberations. I would be pleased to answer the questions of the committee.
The Chairman: Thank you, Mr. Cherniak. We have referred to two different commissions. For clarity, the Office of the Commissioner for Federal Judicial Affairs, OCFJA, is Mr. Osborne. Are you representing that commission?
Wayne Osborne, Director, Finance and Administration, Office of the Commissioner for Federal Judicial Affairs: No. The Office of the Commissioner is responsible for administering the Judges Act. Whatever the outcome of the bill, our office will implement those changes.
The Chairman: Mr. Cherniak spoke to the mandate and the research of the Judicial Compensation and Benefits Commission. Does the Office of the Commissioner for Federal Judicial Affairs fund the JCBC? Have you experienced difficulties in obtaining funding for the JCBC?
Mr. Cherniak: The funding received by the individual commissioners is pretty minimal and comes through the Office of the Commissioner for Federal Judicial Affairs. It was our administrative arm, but we retained our own executive director responsible to the JCBC, Ms. Jeanne Ruest. The JCBC acted entirely independently, but had administrative support from the OCFJA.
The Chairman: It is important that the JCBC be independent in order to produce a report upon which we can rely.
Mr. Cherniak: That was the whole idea. It resulted from the history that led to the criticisms, the result of the P.E.I. Judges Reference and the legislation that followed.
Senator Ringuette: One interest of mine is the main elements researched by the commission in its process to establish remuneration for judges? Do you work with guidelines and benchmarks?
Mr. Cherniak: The statute requires that the commission consider prevailing economic conditions in Canada, the role of financial security and the need to attract outstanding candidates. It is difficult to define the appropriate benchmarks in the judiciary, and the government did its best to provide the commission with the best information. We hired a research expert from Morneau Sobeco, a well-known compensation firm.
Historically, the salaries and benefits of deputy ministers at the various levels of deputy ministers have been considered an appropriate comparator. The judiciary, in particular, thought that the current salaries of DM-3s were the most important comparator. The government took a somewhat different view, although the views as to the appropriateness of that comparator seemed to vary depending on the year in question.
We also did the best survey we could of lawyers' salaries all across the country. Our report indicates the considerable research we did and the efforts we made to try to get accurate information on lawyers' salaries. However, the bulk of the information came from Canada Revenue Agency. As we have indicated in our report, there are significant problems with that information.
The judiciary filed a report that analyzed it in one way, and the government filed a report that analyzed it in a very different way. As we all know, one can do a lot with statistics, depending on where one puts the emphasis.
We also did what other commissions had not done. We considered the salaries and benefits of a variety of other senior government posts, primarily the heads of various government boards and commissions that we thought were an appropriate comparator. As you will see from our report, a very significant portion dealt with the analysis of those various comparators to try to come up with what, in our view, was the right level to recommend to the government.
It was not an easy task. One of the recommendations that we made, which has not been followed up, was that the government and the judiciary get together with us to try to figure out a way to make the statistics better. Unhappily, that recommendation has not been acted upon to date.
Senator Ringuette: There is quite an aggregate of information, and the balance of responsibility versus remuneration, that is being studied by your commission.
Mr. Cherniak: Yes. That was the major part of our task, trying to come to grips with what the appropriate comparators were, because that was a significant part of our final analysis.
Senator Ringuette: Your recommendation 15 states:
The commission recommends that justices of the Supreme Court of Canada be granted exceptional privilege of eligibility for retirement on the full judicial annuity after 10 years of service on that bench regardless of age.
Mr. Cherniak: The reason for that recommendation was that work in the Supreme Court of Canada is extremely onerous and challenging. Virtually all the judges, who come to the Supreme Court of Canada, have been judges on other courts. We felt that it was appropriate that after 10 years they be given the opportunity to retire, even though they might not have reached that combination of age and years that would otherwise entitle them to retire, simply because of the challenging nature of 10 years on the Supreme Court of Canada.
There is no requirement that they retire after 10 years. However, we felt that given the specific requirements of being a judge on the Supreme Court of Canada, that was an appropriate option. We did not expect it would be exercised very often, but it was an option that we thought was in the public interest.
Senator Ringuette: What would be the average retirement age?
Mr. Cherniak: I cannot remember the details, but they need to have that combination of service and age that, I believe, equals 80. Not every judge on the Supreme Court of Canada, who had served 10 years, would necessarily be there; many of them would though. We thought that after 10 years in that job alone, they should have that option.
Senator Cowan: I have two areas I wanted to explore with you. The first is the difference of opinion between the commission and the government with respect to section 26(1.1)(a) of the Judges Act. On your report, on page 9, you interpreted that criterion, which says that you are obliged to consider:
the prevailing economic conditions in Canada, including the cost of living, and the overall economic and current financial position of the federal government;
You interpreted that section to oblige you to consider whether the state of economic affairs in Canada would or should inhibit or restrain us from making the recommendations we would otherwise consider appropriate. The consideration to be applied is whether economic conditions dictate restraint from expenditures out of the public purse.
The government, in its response on May 29, on page 6, characterized that interpretation as being too narrow. It said that:
...the Government's economic and financial position is the key contextual element in the determination of the ``adequacy'' of judicial compensation. The Commission is required to undertake its analysis in light of the overall state of the Government's finances and in view of the other economic and social priorities of the Government. In other words, all of the factors must be considered in an integrated fashion, rather than isolating the economic criterion and applying it only as a negative consideration after a proposed quantum has been otherwise determined.
It seems to me if that is the interpretation, I do not know how anyone outside government can make that assessment. Could you comment on that?
Mr. Cherniak: I stand by our report. It is its own justification. I read the statute, section 26(1.1):
In conducting its inquiry, the commission shall consider
(a) the prevailing economic conditions in Canada, including the cost of living, and the overall economic and current financial position of the federal government.
That is all it says, and that is what we did. Our interpretation was that, unless there was some reason in the condition of the financial state of the government, we should simply come up with what we thought was appropriate — not more, not less.
It would be impossible for us to take into account the financial priorities of even the current government. Neither side put before us the financial priorities of the current government. Of course, it would be impossible for us to take into account what the financial priorities might be of a government two or three years hence. It simply could not be done.
Our analysis, based on our interpretation of the statute, was that we had to ensure that Canada could afford the level of compensation that we would ascertain. Having come to that analysis — and we did analyze all the financial information relating to the government; it is contained in our report that is before us — we concluded that the government could afford the recommendations that we were making. Having said that, then we had to determine what was right based on the other criteria.
Senator Cowan: That seems to me to be a sensible approach. My point is that I cannot see how persons in your position could ever fulfill the mandate if the interpretation that the government has put on this section were to be the case.
Mr. Cherniak: I cannot disagree with that, senator.
Senator Cowan: Senator Ringuette referred to my second point earlier. This has to do with the difficulty that you experienced in getting adequate data with respect to private-sector lawyers' incomes. I can appreciate that difficulty.
Your recommendation was that judges and the government should get together, perhaps not so much to determine what that data ought to be, but more so the comparators. Do you have any suggestions as to how one could get more satisfactory data with respect to incomes?
Mr. Cherniak: I suspect that, had our suggestion been taken up, we would have attempted to involve a combination of Canada Revenue Agency and Statistics Canada in an attempt to come up with a better analysis than that of either side or our own research. It would not be easy. The income tax department does not collect its statistics for this purpose. They do it for their own purposes, and they change how they do it from time to time. Our view was that there must be a better way to get the kind of information we needed than our experience demonstrated, and we were willing and, indeed, anxious to work with the parties to see whether that could be done.
Senator Cowan: There are annual surveys in Canadian Lawyer, but they are not very sophisticated.
Mr. Cherniak: No.
Senator Cowan: Nor accurate.
Mr. Cherniak: One problem is that lawyers, like everyone else, do various kinds of deferral techniques in small and large firms — all within the appropriate terms of the act — to ensure they minimize the tax they pay, so one has to take into account all of those matters to determine the real income of lawyers. It is a difficult task.
Senator Murray: I have three matters I would like to place before Mr. Cherniak. He can then comment as he wishes. I will do it all at once.
First, Mr. Cherniak, during the debate on this bill in the Senate the other day, your old friend — at least he purports to be your old friend, and you will never have a better opportunity to disown him than you have now — Senator Grafstein made a point with which I disagreed at the time, but on reflection I believe he does have a point. He objects in principle to the judiciary being represented on the commission. He says that if the judiciary has representations to make, they should make them like everyone else, and that there is a sense of being judge in your own cause, as the saying goes, by having an actual representative. I hear this morning that the representative of the judiciary on the commission has a veto on the selection of the chairman. I would like you to comment on that. What would we lose if we changed the membership to exclude a representative of the judiciary? What would we lose if we placed members of the judiciary on the same basis as every one else? They could make representations, but they would not have a direct representation on the commission.
Second, you pointed out that there is no statutory provision for the present government bringing in a second report on the commission's recommendations. What am I, as a layman, to conclude from this? Is there any suggestion on your part that what the present government is doing might be illegal?
Third, I want to tell you that I am somewhat dubious, although I will not propose an amendment or make a fuss about it, about this provision to allow members of the Supreme Court of Canada to retire after 10 years. I would like to know, as this might reassure me a little, what the law excludes former members of the Supreme Court of Canada from doing after they have retired. Can they go back into private practice? Can they appear in the court of which they were once a member or in other courts? I am old enough to remember the very first case, I believe, in which a member of the Supreme Court of Canada simply up and retired in the pink of health and returned to quite an active life in the private sector. I remember, as a layman — a young, perhaps naïve, layman — being slightly scandalized about that. Correct me again, but I do not feel that it is a good idea to have former members of the Supreme Court of Canada out pursuing their private endeavours, whether in their profession or in business or whatever. We look after them pretty well, and I feel that if they sign on, they should do so for as long as their health permits.
Mr. Cherniak: I will deal with your points in the same order that you gave them, senator. First, I am not, have never been, do not expect I ever will be and have no aspiration to be a judge. I reject the suggestion that I was a representative of the judiciary on the commission. I was the nominee of the judiciary. They have to nominate someone; that is the way the statute reads. The commission is formed by a nominee of the government, a nominee of the judiciary and, to secure the independence of the commission, those two nominees chose the chair. I can assure you that all three members of the commission take the view that they are in no way the representative of the body that nominated them. That is the way labour arbitrations function: A labour arbitrator is expected to be the representative and put forward the case for, and almost invariably vote for, the position of the side they are on. That method forms no part of the operation of this commission. We consider ourselves to be an independent commission operating under the statutory provisions of the Judges Act, applying the criteria in the Judges Act, and none of us considers ourselves the representative of any party.
With respect to the appointment of the chair, I suppose the statute could have provided differently, but it is not unreasonable, in my view. It is quite a reasonable provision that the two nominees choose the chair, rather than the government, which is the ultimate paymaster, choosing the chair. The chair is a very important post; if there is a disagreement, the chair will make the final decision. In the event, our recommendations were unanimous. I hope that is an answer to your first question.
It may be that Senator Grafstein does not agree with that, and I have had that debate with him. I have known Senator Grafstein since long before he was a senator, and we have not agreed on everything. I did agree on his choice of spouse, and I did stand up at his wedding, as he indicated to his committee.
With respect to the second matter, there simply is no statutory basis for the second report. When I appeared before the House of Commons committee, I called it a second kick at the can. If you read the Judges Act, it is not there. I cannot comment further. However, because it puts in a process that is not provided for, and because it occurred after there was a change in government, it has the appearance of causing the politicization of the process, which was the very thing that the Supreme Court of Canada said constitutionally ought not to happen. That was the basis for the failure of the earlier commissions. It is an unhappy circumstance. I hope it will never be repeated. The danger is that if that happens, if the statutory process can be dealt with in that way, so the government can simply change it other than the first six-month response, then it will make it difficult to find people of the quality, I modestly say, we have on the current commission and had on previous commissions. Why bother if the government can simply ignore the recommendations? That is why I hope there will be a reaffirmation of the importance of the commission process to depoliticize it, as it should be, as is constitutionally required.
With respect to the retirement of judges on the Supreme Court of Canada, I remember well the situation that you refer to, senator. When I was clerking for Chief Justice McRuer in 1960, a former judge of the Supreme Court of Canada appeared in a major case before Chief Justice McRuer, who knew him very well. They had served on the Court of Appeal together and knew each other from practice. Chief Justice McRuer was very icy toward that particular former judge of the Supreme Court of Canada when he appeared in his court on that case. It has not happened since. No judge of any court, in my experience and certainly not in the Supreme Court of Canada, ever appears before a court of which they have been counsel. No Superior Court of Justice judge appears before any Superior Court. Many members of the Supreme Court of Canada retire at age 75 and some at an earlier age. For instance, former Justice Cory conducted a major inquiry in the United Kingdom. Former Justice Major is conducting the Air India inquiry. Former Justice Iacobucci became the interim President of the University of Toronto and practices at a law firm in Toronto. He does not appear before the courts, but rather he performs a variety of public and private services. I do not believe there is any danger of any of these judges appearing before the courts.
Senator Murray: What is the impediment to their appearing?
Mr. Cherniak: It is my recollection that in Ontario, where I am a governor of the Law Society of Upper Canada, there is a bar to former justices appearing in the courts. Certainly, there is a social bar. Whether such a bar would withstand a challenge under the Canadian Charter of Rights and Freedoms is a different matter. It would be a very unwise and bold former judge that would challenge it, but it could happen. The tremendous pressure that judges of the Supreme Court of Canada are under, given the nature of the cases they undertake, moved us to suggest judges should retire after 10 years.
Senator Murray: What would happen if a judge chose to enter politics as an elected member or as an appointment to the Senate? I do not know whether there should be a legal impediment, but perhaps there should be some legal restrictions to what former judges can do. Perhaps we should leave that to public opinion or what you call ``the social circumstances.''
The Chairman: That might not be an issue before us either.
Senator Di Nino: I have two practical questions that I would like to put to you, sir. The government response to the commission's report in effect suggested that other economic conditions, particularly other legitimate claims on the public purse such as social priorities, should be considered in arriving at a determination. Could you comment on that?
Mr. Cherniak: It is not for me to comment on government policy, because I am not a member of the government. Our task is to apply the statutory criteria, and we did that. The statutory criteria do not entitle us to take into account the various priorities of government. The concept of judicial independence is so important to the democratic society in which we live that to set the conversation in that way would put the matter right back into the political sphere, which is constitutionally impermissible for the reasons detailed at some length in the P.E.I. Judges Reference.
The legislation, which I referred to, followed the P.E.I. Judges Reference and was based on the imperatives contained in that case. The question for us was whether Canada could afford the level of compensation that we were to recommend, not on the government's priorities.
Senator Di Nino: Having said that, I sympathize with your position. However, you do not take exception to the fact that the government has to consider these other factors before it makes a final determination on the issue.
Mr. Cherniak: I take some exception to the proposition that it can be done after the fact. For instance, if — during the six-month period following delivery of the report of the JCBC in which the government has to respond — an economic crisis occurred that would make the recommendations in our report impossible or fiscally unwise, then it would be quite appropriate for the government to take the changed circumstance into account during that six-month period. However, that did not occur. The government of the day considered the report in great detail such that its first response was detailed and comprehensive as to why the government accepted our recommendations.
That having happened, there is no real basis to change that. The commission process operates every four years, so any recommendation made by the JCBC cannot last more than four years, after which there is another chance. The prevailing conditions of that day will dictate the result, in a large way.
Senator Di Nino: On a related topic, I have heard outside the hearings that the symbolic value on an increase of that nature would put pressure on the rest of the Canadian public's need and requirements. That might have an impact on the economy of the country, in particular the inflationary pressure that it would place if this were used by labour unions or other organizations considering salary increases for their workforces in the future.
Mr. Cherniak: First, I am not aware of any evidence that that occurred following the 2000 report; and second, the question of judicial salaries is simply a different animal, because of the constitutional requirement and the necessity for an independent judiciary. A significant part of independence is financial independence, as well as security of tenure. When judicial salaries are being set, there is a constitutional dimension that simply does not pertain to the salaries of virtually anyone else.
Senator Mitchell: Mr. Cherniak, I believe that the principle at stake here — and you have made it clear too — is that of judicial independence. If a government is going to overrule the work of the commission, given the importance of judicial independence and the danger that would be involved in government overruling this independent commission, the arguments that the government makes for that overruling would have to be exceptionally strong, above some nominal level of logic or force of argument.
I do not see that the argument they made on the two criteria, one being the financial position of government and the other being the comparative salaries of lawyers from various places, are particularly strong. In fact, in the absence of that — you would not want to comment on this probably — I would conclude that the reason the government has reduced the pay recommendation is because they are unhappy with what they determine to be judge-made law, and they want to punish judges and send a message on that basis.
However, having said that, you did comment — in answer to Senator Cowan — on the first criteria, which is the financial position. I would agree with you that nothing has changed from the time you reported to the time the government made its analysis, except that the fiscal position got stronger than it was, not weaker. In fact, it went from a $3 billion estimate of surplus to a $13.5-billion surplus, which it put on the debt. It certainly had the financial wherewithal to sustain the 10.8 per cent recommendation.
With the second criteria, the government argues that your commission was incorrect to put so much emphasis on the salaries of lawyers from the eight urban areas — the salaries of lawyers between the ages of 44 and 56 from which most judges are appointed apparently — and to deemphasize the fact that 27 per cent of judges come from non-private practice, where pay is lower.
Could you comment on their assessment of those criteria?
Mr. Cherniak: First, I urge anyone who is interested in this matter to look at our report. We did a comprehensive survey of lawyers' incomes all across the country and analyzed them in a variety of ways. We had to come up with one recommendation for the whole country. It was not possible, not within our mandate, to have different lawyers' salaries for different parts of the country. That may or may not be a good idea, but that is not the way our system works; it is one salary, whether it be a judge in Prince Edward Island, Saskatoon, Toronto, Montreal or Vancouver. All superior court judges get the same salary.
We had to come up with something as best we could, which would be appropriate no matter where the judges were from. Reasonable people can differ, but we did the best we could. Let me quote from the second response of the government:
It is also clear that the Commission undertook a detailed assessment and analysis of data and information available with respect to the relevant comparators for establishing the overall adequacy of judicial compensation. This has been a perennial challenge with which all previous federal judicial compensation commissions have grappled. As successive commissions and governments have discovered, it is as much an art as a science. There is no readily available mathematical formula to apply and a high degree of well-informed judgement is ultimately involved.
I agree with that. That is exactly what we did; it is somewhat of an art. We used the best scientific information available to us, unsatisfactory as it was, and exercised our collective judgment to come up with our figures. That was our statutory job.
Senator Mitchell: I understand that it is the requirement of the statutes that the government table your commission's report and respond within six months of the receipt of that report.
Mr. Cherniak: It must be tabled within 10 days and they are to respond within six months.
Senator Mitchell: Thank you. Your report was dated May 31, 2004, this government's second response, was May 29, 2006.
Mr. Cherniak: The first response was within the six-month period.
Senator Mitchell: That was the Liberal government's response. However, this government's response — only there is no statutory basis for a second response — missed the six-month deadline as well.
Mr. Cherniak: They were not in power. The government was not there within six months of May 31, 2004.
Senator Mitchell: Therefore there is no basis for them to actually respond.
Mr. Cherniak: I hope this committee appreciates that my own view is, for what it is worth, that the current bill should go through. We are past being able to deal with the circumstance. The matter of process that I referred to has to be for the future. It is almost 2007 now. Let us get this done.
The Chairman: I have a follow-up question on what you said, Mr. Cherniak, in response to one of Senator Mitchell's questions. You said that all the Superior Court judges, whether they be from small town Prince Edward Island or downtown Toronto, all get the same salary. Is that by virtue of statute?
Mr. Cherniak: Yes. There is no provision, and there never has been any provision, for any differentiation except for chief and associate justices and the Supreme Court of Canada. They get different amounts, but all Superior Court judges including Trial Division and Court of Appeal — all called puisne judges — all receive the same salary no matter where they are in Canada.
The Chairman: My point is that by practice or by statute?
Mr. Cherniak: It has always been that way. Judges' salaries are set by statute and they are never differentiated. There is nothing in our jurisdiction that would allow us to differentiate. If you read the report, there was a submission by some appellate judges in the country that it would be appropriate for appellate judges' salaries to have a slight bump from those of trial judges; Supreme Court of Canada judges do get a higher level than ordinary Superior Court judges. That differentiation exists in many other countries; it has never existed in Canada. Our commission decided that the case was not made to have that differentiation and, therefore, it was rejected. That was a tough call, because there were good arguments in favour of slightly higher salaries for appellate court judges, but we ultimately determined that the case was not made.
The Chairman: In your commission's study, would you then not have considered the different provincial court judges' salary levels, which may vary depending on cost of living in the different provinces? Is that not something that could have come into your consideration?
Mr. Cherniak: It usually goes the other way. The provincial court remuneration commissions usually refer to what is done by the federal commissions. We were aware of what was happening in the various provinces; in the various provinces one size fits all, but each province is different. Thus, we were aware of what had been awarded in the various provincial judicial commissions, many of which have been fought out in the courts, because there have been objections by the government. However, we did not feel they were appropriate comparators and did not use them as comparators for Superior Court judges.
[Translation]
Senator Fox: My question is for Mr. Cherniak or Ms. Ruest. There is no doubt in my mind, nor I am sure in the mind of the other senators, that the work of your commission is wide in scope and extremely serious, and that your recommendations are extremely valid.
However, I noticed in the way the answers were given that the commission's representative seems to object to the fact that the government may make changes.
Personally, I feel these are the committee's recommendations to government, and that recommendations made to a government can be received and changed by the government, which in turn must ultimately present a bill to parliamentarians in the House of Commons and the Senate.
Mr. Cherniak, I do not quite understand your argument that judges are in such a special category that, in a manner of speaking, your commission should have the final word and decide whether its arguments are relevant or not.
I know that one of the considerations is the state of the Canadian economy, and it is possible to interpret this widely or narrowly. Interpreted widely, the judges' payroll could never affect the gross national product or the government's general revenues.
However, judicial compensation can affect other sectors of the economy, and I assume this is what the government had in mind.
Perhaps I misunderstood you, but I would like to hear you explain why your commission is different from every other commission which has ever made recommendations to the Government of Canada, and why, in one way or another, the government should be bound by your recommendations. If that is your position, I cannot share it.
[English]
Mr. Cherniak: I welcome the question. Perhaps I did not make myself as clear as I should have: It is the process of which I was speaking. The government is entitled to disagree if they have a rational basis for disagreeing with the commission's recommendations. That is provided right in the statute. The statute provides for it once. It provides for it within a six-month time frame, and the government of the day did deal with it in that way. My problem is with the effect of what has occurred on the process, not on what the actions of the other government. Anyone can disagree with our results. We exercised our best judgment and came to our conclusions. However, the process assumes a six-month time frame to either accept or reject with a rational basis for rejection, and Parliament will deal with it in a timely way thereafter. That did not occur, unhappily, because of the circumstances.
There is no way that a commission like ours, which sat through the latter part of 2003 and the first half of 2004, could take into account what might happen in 2005, 2006 or 2007. We came up with our recommendations based on the situation that was before us at that time. We justified them, and the government dealt with them. The process repeats itself every four years. It is the process that I had a problem with, not the substance of the second report.
[Translation]
Senator Fox: I think there is a problem with what you just said. I have two questions.
First, what is the basic difference between the position taken by the former government, as compared to that of the current one?
Second, if I understand correctly, the bill introduced by the former government died on the Order Paper because of the election, and we all know that a government is not bound by the decisions of a previous one. Is it therefore not normal, in light of the prevailing situation, that the current government should have the opportunity to examine the recommendations?
You say, for instance, that it should not take into consideration the prevailing economic situation. But in the event of a major recession between the time you presented your report and the time it was adopted, are you saying that the government should not take into account this major recession, or that all salaries, for one reason or another, as has already happened in the past, should not be frozen by the government?
I do not quite understand your reasoning on this issue. I do support your ultimate conclusions, but I really think you are trying to characterize the commission as being primus inter pares, as compared to other commissions, rather than simply being a commission which has a different constitutional position because it deals with judicial compensation.
Once again, I support your recommendations, but in my opinion, your rationale is not necessary, and is unfounded.
[English]
Mr. Cherniak: The best answer I can give you is that there is a constitutional dimension to the setting of judges' salaries that does not occur in any other situation. I appreciate that if, for some reason, the recommendations were not dealt with by Parliament in a timely way and some major circumstance occurred before the time that they ultimately were dealt with, that would be a situation that any government would have to take into account. It is for Parliament to determine whether that, in fact, occurred in this situation. I have my own views, but it is for Parliament to make that determination.
However, there is a potential constitutional problem with the process that has been followed in the case of this commission. It is only the second of the commissions that were formed after the P.E.I. Judges Reference. My respectful submission is that there is an important constitutional principle involved, and the process should be respected.
[Translation]
Senator Fox: I have a final question. Regarding the legislation passed by the House of Commons on November 21, which is now being studied in the Senate, I noticed that there is not only a bill to amend the Judges Act with regard to compensation, but also a whole series of other amendments which do not seem to have anything to do with judicial compensation.
For example, there are amendments to the Railway Safety Act. Can you tell me what the connection is between the Railway Safety Act and the Judges Act?
Would it not be preferable, in this type of exercise, to put amendments which have nothing to do with the main subject, in this case the Judges Act, into another bill? They could have been included in the Miscellaneous Statute Law Amendment Act, 2001.
It is rather amusing to see amendments to the Transportation Act, the Crown Liability Act, the Employment Insurance Act, the Federal Courts Act, the Railway Safety Act and others, in a bill basically dealing with judicial compensation and benefits.
[English]
Mr. Cherniak: Senator, I would have been delighted to have been given the opportunity to consider the Rail Safety Act, but I was not. It is beyond my capabilities to fathom the workings of Parliament. That is the job of the people in this room.
[Translation]
Senator Nolin: Am I to conclude, first of all, that the government has accepted most of the 16 recommendations and that the only one in dispute deals with judicial compensation?
[English]
Mr. Cherniak: That is correct, senator.
[Translation]
Senator Nolin: Just to make sure everyone understands, we are talking about a difference which varies between $7,500 for puisne judges and $9,900 for the Chief Justice of the Supreme Court. Is that correct?
[English]
Mr. Cherniak: I believe that is the exact figure.
[Translation]
Senator Nolin: So the difference varies between $7,500 and $9,900. You recommended compensation to be set at $240,000 for puisne judges, whereas the government is recommending $232,300, which represents a difference of $7,700, and in the case of the Chief Justice, which is higher up on the pay scale, you recommend a salary of $308,400, whereas the bill proposes $298,500, which represents a difference of $9,900. Is this what we are talking about? Is this the only thing you take issue with as far as the government's position is concerned?
[English]
Mr. Cherniak: The issue I have is one of process, but your analysis of the figures seems to be correct.
[Translation]
Senator Nolin: If I look at the summary which was prepared by the Library of Parliament on the Supreme Court decision of 2005, can you tell us this morning whether the difference of opinion between your commission and the Government of Canada threatens the independence of the judiciary and politicizes the process?
[English]
Mr. Cherniak: I really cannot answer that in those terms. Our commission was charged with determining, in our independent, considered and researched view, the appropriate level of compensation. Other people might have come up with different amounts. We came up with what we thought was appropriate and this bill applies a different amount.
I am not here to defend our report or the amount we recommended. The report speaks for itself. My problem is with the constitutional process.
[Translation]
Senator Nolin: That is exactly right. My questions are based on your answers. You questioned the government's rationale for its decision several times. I presume that you took that expression from the Supreme Court decision, which highlights the government's rationale for its decision.
When we apply the test which the Supreme Court included in its 2005 decision, and when you apply it in its totality, does the process respect judicial independence and does it not politicize the process? That is the reason I am asking my question.
Do you understand where I am coming from? You cannot agree with only part of the argument. I am applying the entire argument and I am taking it to its logical conclusion.
[English]
Mr. Cherniak: I suspect that the judiciary will remain as independent, if this bill is passed, as it was before. However, there is a danger that if, as time goes on, the constitutional process is not respected and the statutory scheme followed, that Canadians will be back in the situation that pertained when the triennial commissions reported and the recommendations were universally ignored by government. The scheme to set up an independent commission to make recommendations is an important one, unless the government has a rational basis for disagreeing with them within a reasonable time frame.
To the extent that that process is not followed, there will be a cynicism that will be built up in the public and in the judiciary. There will be a potential threat to judicial independence, and there will be a difficulty in obtaining commissioners that will be willing to sacrifice a significant part of a year for very modest remuneration — none of us did it for the money, I can assure you — to come up with recommendations that really will not have any force. That is the danger. It is one of perception.
[Translation]
Senator Nolin: I completely agree with you in that everything must be done to protect the independence of the judiciary and to prevent the process from becoming politicized. That is why, in my first question, I asked you whether out of 16 recommendations, the government, in its bill, accepted the vast majority of these recommendations. You take issue only with judicial compensation, and the gap between the numbers is ultimately fairly small. When you are talking about between $7,000 and $9,000 out of a $300,000 salary, Canadians listening to us would conclude that this is not enough to threaten the independence of the judiciary and that it will not politicize the system. But I do accept your answer.
[English]
The Chairman: Honourable senators, that concludes this particular portion. The minister has arrived. Before our witnesses vacate their positions, let me, on your behalf and on behalf of the Standing Senate Committee on National Finance, thank each of you for attending, Mr. Osborne, Ms. Ruest and Mr. Cherniak.
We had the Commissioner for Federal Judicial Affairs here previously and we generated a report generally with respect to the provisions for safeguarding the independence of the judiciary. It was very helpful to have you here as a commission for compensation to explain to us how that fits in the process. I hope that you will thank Ms. Chambers and Mr. McLennan as well for the good work they have done on the commission along with you.
Mr. Cherniak: I will do that. Many thanks for inviting me. I have enjoyed the opportunity to meet and speak with all of you.
The Chairman: We are pleased to have appearing before the committee today the Honourable Vic Toews, Minister of Justice and Attorney General of Canada, and Ms. Judith Bellis, from Justice Canada. Minister Toews, please proceed.
The Honourable Vic Toews, P.C., M.P., Minister of Justice and Attorney General of Canada: It is my honour to appear once again. This is becoming an enjoyable habit, even when the questions asked are not always the most comfortable; that is the nature of our business. We understand our respective roles and I appreciate the role played by this committee on this very important issue.
Bill C-17 proposes to amend the Judges Act to implement the government's response to the report of the 2003 Judicial Compensation and Benefits Commission. The establishment of the JCBC is governed by constitutional principles designed to ensure public confidence in the independence and impartiality of the judiciary. The first constitutional principle of note is section 100 of the Constitution Act, which requires that Parliament, and not the executive alone, establish judicial compensation and benefits following full and public consideration and debate.
Honourable senators are aware that in addition to the protection of section 100 of the act, the Supreme Court of Canada has established a constitutional requirement for an independent, objective and effective commission to make nonbinding recommendations to government. The government must publicly respond within a reasonable period of time. Any rejection or modification of the commission recommendations must be publicly justified based on a standard of rationality. I will say more about that standard in a few moments.
The quadrennial commission delivered its report on May 31, 2004. The former government responded in November 2004 and introduced Bill C-51 in May 2005. However, despite the requirement for the government to act expeditiously, Bill C-51 was never taken beyond introduction and first reading and died on the Order Paper in November 2005.
Our government made it a priority, upon assuming office, to review the commission recommendations in light of the constitutional principles and the statutory provisions that govern the process. We did this because we are serious about our commitment to constitutional principles that govern the establishment of judicial compensation. The government provided its response to the commission report on May 29, 2006, followed almost immediately by the introduction of Bill C-17 on May 31, 2006. The bill was referred after first reading to the Standing Committee on Justice and Human Rights on June 20. The committee began its consideration on October 24 and tabled its report in the House on November 1, approving the bill with some minor technical amendments. Report stage and second reading occurred on November 7, and third reading was concluded on November 21. As you can see, the government moved quickly on Bill C-17.
I know that senators appreciate the critical importance of completing the final stage of the 2003 quadrennial cycle through the passage of legislation. The credibility, indeed the legitimacy, of the constitutional process requires it, especially since the next quadrennial commission process is due to commence in less than one year. Therefore, I would like to commend and thank the committee for according this bill this priority in order to complete the process in a timely fashion.
Turning to Bill C-17, as you know the government has accepted virtually all of the commission's recommendations, and the exception relates to the percentage of salary increase. Mr. Chairman, I know that committee members have read the government's response, which fully explains the rationale for the modification of the commission's salary recommendations and, therefore, I intend to summarize briefly government's thinking on this important issue.
Before doing so, it is important to speak to the standard of rationality against which any modification of the commission's recommendations by Parliament will be assessed. There have been suggestions that respect for the constitutional judicial compensation process and for judicial independence broadly speaking can only be demonstrated through verbatim implementation of commission recommendations. As I stated before, to ensure public confidence in the process, it is absolutely critical that we have a shared appreciation and understanding of the very balanced guidance that was provided by the Supreme Court of Canada in two decisions: the P.E.I. Judges Reference case, which was first, and the Bodner v. Alberta case, which adjusted or fine-tuned, in some respects, the thinking of the Supreme Court of Canada on this matter.
In both decisions, the court quite rightly acknowledged that allocation of public resources belongs to legislatures and to governments. A careful reading of both cases clearly indicates that governments are fully entitled to reject and modify commission recommendations. In my opinion, this does not do any damage to the independence of the judiciary. In fact, it is a constitutional requirement that Parliament ultimately makes the determination, regardless of the recommendations that one government or another government might make in response to the quadrennial commission.
This is also subject to the fact that there must be a public rational justification that demonstrates overall respect to the commission process. Mr. Chairman, the government did so in its response and is confident that it has fully met the requirement. The effectiveness of the commission is not measured by whether all of its recommendations are implemented unchanged. Rather, it is measured by whether the commission process, its information gathering and analysis, and its report and recommendations played a central role in informing the ultimate determination of judicial compensation.
The work and analysis of the JCBC have been critical in the government's deliberation. Government's response acknowledges the commission's efforts and explains the government's position in relation to the two modifications to the commission proposals. In justifying the government's proposed modification of the salary recommendation, as reflected in Bill C-17, due consideration was given to all of the criteria established by the Judges Act, two in particular. The first criterion was the prevailing economic conditions in Canada, including the cost of living and the overall economic and financial position of the federal government; and second criterion was the need to attract outstanding candidates to the judiciary.
With respect to the first one, the government concluded that the commission did not pay sufficient heed to the need to balance judicial compensation proposals within the overall context of economic pressures, the government's fiscal priorities and competing demands on the public purse. In essence, the government ascribed a different weight than the commission applied to the importance of this criterion.
In terms of attracting outstanding candidates, we took issue with the weight that the commission placed on certain comparator groups against which the adequacy of judicial salaries should be assessed. We acknowledged that the commission carefully and thoroughly considered a range of income-comparative information, including senior public servants, Governor-in-Council appointees and private practice lawyers.
Mr. Chairman, our first concern was the fact that the commission appeared to accord disproportionate weight to incomes earned by self-employed lawyers and, in particular, to those practitioners in Canada's eight largest urban centres. In addition, there was an apparent lack of emphasis given to the value of the judicial annuity and recognition of the requirement that private practitioners fund their own retirement.
As the response elaborates, government believes that the commission's salary recommendation of 10.8 per cent overshoots the mark in defining the level of salary increase necessary to ensure outstanding candidates for the judiciary. Government is proposing a modified judicial salary proposal for puisne judges of $232,300, or 7.25 per cent, effective April 1, 2004, with statutory indexing to continue effective April 1 in each of the following years with proportionate adjustments for chief justices and justices of the Supreme Court of Canada.
One other proposed modification relates to the commission recommendation that the judiciary be entitled to an increased level of reimbursement for costs incurred through the participation of judges in the commission. It recommended increases from 50 to 66 per cent for legal fees and from 50 to 100 per cent for disbursement costs. I note, as a matter of information, that disbursement costs in relation to the commission include not just photocopying and courier services, but in particular, the cost of substantial contracts for the retention of expert compensation consultants and related matters.
In our view, reimbursement at 100 per cent of disbursement costs would provide little or no financial incentive for the judiciary to incur costs prudently. Accordingly, Bill C-17 would increase the current level of reimbursement for both legal fees and disbursements from the current 50 per cent to 60 per cent.
The response also underscores that it will be parliamentarians, not the government, to decide which proposal to implement, be it that of the commission, the government, the prior government or indeed another proposal entirely.
Bill C-17 was very carefully reviewed by the justice committee. The committee heard directly from the commissioners of the Judicial Compensation and Benefits Commission, as this committee has as well. Representatives of the Canadian Bar Association also appeared before the committee as did Professor Garant to shed light on this constitutional process from the academic perspective. Ultimately, the justice committee reported Bill C-17 with some minor technical amendments and it was approved following second and third reading debates in the House.
Mr. Chairman, I want to alert honourable senators to the fact that Bill C-17 is not just about salary increases for judges. It also implements a number of other compensation amendments relating to eligibility for retirement and supernumerary office and other minor changes to allowances. Most notably, Bill C-17 also includes a long overdue proposal aimed at levelling the playing field for partners of judges in the difficult circumstances of relationship breakdown by facilitating the equitable sharing of judicial annuity. The judicial annuity is currently the only federal pension not subject to such a division.
The proposed annuity amendments essentially mirror the provisions of the federal Pension Benefit Division Act. Like the Pension Benefits Division Act, these principles or provisions uphold the overarching principles of good pension division policy allowing couples to achieve a clean break, certainty and portability. These provisions are also consistent with both the objectives of probative retirement planning and the constitutional requirement of financial security as part of the guarantees of judicial independence.
While on its face it is extremely complicated, the policy objective of this mechanism is very simple: to address a long- standing equity issue in support of families undergoing breakdown of the spousal relationship.
Honourable senators, I will wrap it up there and hand Bill C-17 over to you for your deliberations. In light of the length of time that has passed since the commission reported and in order to insure the continued integrity of the process, it is of great importance that we deal with this bill with all due dispatch. In so doing, you will help to ensure that Canada continues to have a judiciary whose independence and partiality, commitment and overall excellence not only inspires the confidence of the Canadian public, but is envied around the world.
The Chairman: Thank you. The background you have given, Mr. Minister, will be very helpful to us, and may prevent some questions, since you have touched on some of the issues.
I have a note that you are able to be with us until 11:15, but that Ms. Bellis can remain to answer any technical issues.
Could you tell us your position?
Judith Bellis, General Counsel, Judicial Affairs, Courts and Tribunal Policy, Justice Canada: I am Director of Judicial Affairs within the Department of Justice.
Senator Cowan: Thank you for being here. My question arises out of your concluding remarks and the concern about the process. We heard what I thought was very persuasive evidence this morning from Mr. Cherniak, expressing some concern about the process. His point, which I thought was a good one, was that this commission worked within a certain time frame and assessed, as it could based upon evidence it received, the conditions that prevailed at the time of its study. It was dealing with, and recommending, increases to take effect on April 1, 2004, which is some considerable time ago. Since that time, we have had a change of government, and that government obviously brings with it its own priorities.
We are dealing with a set of recommendations, with respect to salary increases, which came into effect more than two years ago and events that take place subsequent to that. Unless the recommendations are of a major nature that would make it impossible or impractical for the government to accept them from a financial point of view, if at this stage — notwithstanding we have had a change of government and the new government brings in its own legitimate priorities — you are sort of retroactively changing or rejecting the analysis, which the commission did with respect to a situation now almost two or three years ago, it skews the process and puts into question its validity.
I wish to refer you to the comment that is in the response, and to which you alluded in your testimony, that in your view the characterization of the commission's responsibilities by the commission was too narrow. I am referring to page 6 of the response. You characterized the interpretation of section 26(1.1)(a) of the Judges Act by the commission as being too narrow and said that the commission ought to take into account in its analysis, the overall state of the government's finances and other economic and social priorities of the government.
As I said, there has been a change of government, so it would be impossible for the commission to have taken into account the priorities of the government that had not yet been elected. I find it hard to imagine how a commission could interpret the priorities of government; that really is for the government to do. The government's response indicates that while it will take this advice, it is really its own priorities that determine its decision. Government is not making this decision, or setting the level as set out in the bill, on the basis that it cannot afford to pay what the commission has recommended and carry out its priorities, but simply in its view that this is the right number.
This puts a future commission or the process of determining these recommendations into jeopardy. I would like your comments on that. Perhaps these are unusual circumstances, and they would not be repeated in the future, but it raises some questions.
Mr. Toews: Despite the fact that the Supreme Court of Canada outlined this process for the commission to make these determinations, it must be remembered that this was a process that has been somehow constitutionally grafted into our Constitution. It does not appear anywhere in the same way that section 100 does in the Constitution Act, 1867. Section 100 of that act, clearly indicates, constitutionally, that it is the responsibility of Parliament to set that compensation. Therefore, we have to then meld the constitutional doctrine imported into this whole process by the court in the Prince Edward Island Judges Reference case and as defined in the Bodner v. Alberta decision.
Ultimately, it is still Parliament's responsibility. The government, whether it is the first government or the second, is still entitled to respond to the report of the commission.
There has been some suggestion in the other place that somehow this government would be somehow functus and unable to respond. I do not believe that is an accurate view of what the law is, nor is it particularly significant, because ultimately it is not the government that makes this decision, but Parliament.
The government is required consider all of the facts available. I believe there is nothing to prevent the government from considering the commission's determinations retroactively and to have the benefit of that insight, which has occurred as a result of the passage of time. If the government has made a mistake, that is for Parliament to correct. I do not believe that government has made a mistake; rather, it has met the constitutional principle, that standard of rationality that we are required to meet. I view the standard of rationality in much the same way, and I do not want to get into a legal battle about this, that an administrative tribunal's decisions are reviewed by a Superior Court. We can essentially disagree on certain issues, but we have articulated a legitimate reason for departing from the quadrennial commission's recommendations. We rely on a reasonable factual foundation, and, viewed globally and with deference to the government's opinion, the commission has been respected. We have essentially respected what the commission has done. We have disagreed on the emphasis on certain criteria and, therefore, are entitled to substitute our judgment for the judgment of the commission.
Senator Cowan: To follow up, there is no suggestion here that if the government were to accept the recommendation of the commission, that that would somehow imperil or jeopardize the ability of the government to implement its priorities?
Mr. Toews: The government examines this issue and says, for example, that the suggestion has been made that while we had a $13-billion surplus, there were competing financial interests for that money. The priority of the government was to pay down the debt, so that $13 billion went to that. That was the government's priority, and it is entitled to make that decision.
I am not sure if I answered your question, but we set fiscal priority even though, ultimately, Parliament can override the government on this particular issue.
Senator Cowan: I accept that, sir. Senator Nolin, in discussion with Mr. Cherniak earlier, pointed out that the difference was, I believe, $9,000 in one case and $7,000 in another. Perhaps Ms. Bellis is the one to answer this question, but what is the dollar differential between 10.8 per cent and 7.25 per cent?
Ms. Bellis: I can give you that number, senator.
Senator Cowan: I would not have thought that that would have been significant in terms of the ability of the government to significantly pay down the debt.
Mr. Toews: No. I do not believe that is the issue, but neither can we see this in isolation. We also owe an obligation to public servants generally, for example, and to the taxpayer. Do our senior public servants, such as Ms. Bellis, say, ``I hear the judges got 10.8 per cent, 2.5 per cent in terms of the inflation per annum, so why should public service not get a similar amount?'' If the senior public servants are saying that, the clerks in my office will be saying, ``Why should we not get 10.8 per cent, because we are entitled to that as well?''
Senator Cowan: Perhaps also your colleagues in the House of Commons, or even a senator or two.
Mr. Toews: That is another issue, and there was quite a divisive debate in Parliament about the delinking of MPs' salaries. As you will recall, originally MPs' salaries were linked to the increases of judges' salaries. Frankly, politically, that was not sustainable for MPs. We consider judges' salaries in a different context aside from simply political issues.
Senator Cowan: Putting myself in the position of someone who was a commissioner, I would say, ``Well, this is a job I am being asked to do. I am being asked to make this determination. I accept there are many other determinations, which are not affected by the matters we are talking about, but when it comes to picking that number for the percentage increase, if I have to take into account somehow the economic and social priorities of the government, not only this government, but also a government that might be elected before my recommendations are implemented''; I might say, ``I cannot imagine how I could do that.''
Mr. Toews: That is why the Constitution wisely says, ultimately, it is Parliament that makes the determination. The commission gives us very appropriate guidance, and they have given us very good guidance, but Parliament makes the ultimate determination. Could the commission ever get it perfectly right, given what you have just said? It is very hard to see how they would get it right every time. It would be very difficult, of course. However, Parliament has the last word, and we can review the commission's recommendations in the context of our overall responsibility.
Senator Cowan: However, you can see how a cynic might conclude that that brings politics back into the process.
Mr. Toews: The Constitution requires it.
Senator Mitchell: Thank you for being here. We all share the concern to which you have alluded. The principle at stake here is the principle of judicial independence. Clearly, money becomes a very critical lever in the issue of judicial independence. If, therefore, the government is to overrule the recommendation of the quadrennial commission, which has been set up to preserve that independence, one would conclude that the level of argument, the level of logic, the power of argument, for overruling the commission would have to be exceptionally high. I feel the two criteria or arguments you have made could be questioned. It could be questioned as to whether they would meet a standard or test of that nature. In particular, the one that you mentioned with respect to economic conditions and the overall economic and financial position of government, having said that somehow that is not sufficient to warrant the full 10.8 per cent raise and you have reduced it to 7.25 per cent. Yet, when the commission made its recommendation, the government's projections were in the order of $3-billion surplus, and now you have knowledge that it is $13.5 billion. My colleague makes a good point that there is enough money to pay this, so the force of the argument of financial position of government would argue for sustaining the 10.8 per cent, not reducing it to the lower amount. I might say parenthetically, what if you come in with a $13.5-billion deficit? Would you then have cut the pay absolutely?
My point is that your arguments are not in a vacuum and need to be taken into a broader context, and that is that your government, if not you specifically, has been quite critical of the judiciary and has captured that criticism often in this idea that you call ``judge-made law,'' which is really a putdown of the judiciary and which, I feel, is fundamentally unfair.
Our judiciary is one the best, most respected in the world. Someone in your position in the government should not be taking those kinds of shots. The danger is that it puts into question the motivation for you now reducing that pay. One could conclude, because the arguments are relatively weak elsewhere, that this is merely sending a message to the judiciary and punishing them, because you do not like judge-made law.
Could you dispel my cynicism about that? Could you convince me, and perhaps others, that your bias about and toward the judiciary has not filtered into your motivation to cut this pay recommendation and is not a dig at or a punishment of the judiciary?
Mr. Toews: Senator, could I dispel it? Probably not. Given the question, I feel it would take a lot more than a few minutes here to try to dispel your cynicism.
I want to say, however, just on that issue, that when one engages the judiciary in a healthy debate, that is part of the democratic process. We have to do it in a respectful manner. We have to understand that the judiciary, when it approaches debate, is also tied in some respect — that it cannot respond. It is the responsibility of government and government ministers to be very mindful of that response.
One of the most effective ways to respond to the judiciary is not in public debate through newspapers, but, in fact, through legislation, and say: ``Look, we disagree fundamentally with the course of, let us say, sentencing in this country with respect to certain issues.'' We, as Parliament — and I include the Senate — understand the social policy and the social context much better than the judiciary, which is, by necessity, confined to legal and constitutional principles.
I prefer to have a healthy debate with the judiciary in the context of legislation. In my tenure as the Minister of Justice, I believe that I have restricted, by and large, my comments in that respect. There are times that we do respond to specific comments. However, I am very mindful of the role that the judiciary plays and the limitations on the ability of the judiciary to respond.
Even when the judiciary has taken various shots at me, I have not responded publicly. I felt it was more important for the judiciary to be able to speak their mind on that issue than it was for me to get my oar into that water in a newspaper context. I can tell you that I approach this in a public forum with a great deal of restraint, given that I am not only responsible for the Department of Justice, but also, in many ways, I speak for the judges themselves.
As a government, and as part of the government, I consider not simply the issue of the overall economic, macro picture, but also the role of judges and the salary of judges in a narrower legal context. We did consider the issue of private-practice lawyers, which the commission used as a comparator, and felt that those criteria were inflated. I do not consider the one criterion and give it greater weight than another, but those two criteria — the overall economic priorities of our government and comparable legal salaries, in terms of coming up with the 7.25 per cent — cannot be viewed in isolation.
Quite frankly, given the number of applicants for judges, highly qualified applicants, we are not anywhere near the situation where people are turning down judgeships because of the salary level. There will be some isolated cases, where people's salaries are in that $500,000-to-$1 million range; but, by and large, people are quite satisfied with the salaries. Certainly, when I have spoken to the 40 or 50 judges that have been appointed in the last year, I have never heard the suggestion that somehow this would be a severe hit on their salary, which they could not afford. Those kinds of individuals, I would suggest, we could not attract if we doubled the salary.
Senator Mitchell: I am glad to hear you talk about the importance of your role in defending and elevating the respect for the judiciary. I find it very corrosive when I see people in your government — other people who are opinion leaders — being critical. If you want respect for the law, you need respect for the institutions.
I agree with you that the judiciary is very constrained and should not be engaged in debate, because they cannot really defend themselves. In fact, they have been drawn out more lately, because of some of the unfair attacks, which perhaps have not come from you, but have certainly come from your government. I just make the point that one has to be very careful about that.
Mr. Toews: Let me intervene there. I noticed just recently there was a Liberal in the British Columbia government who made a criticism — Attorney General Oppal, in that particular case. In making certain comments about the working hours of judges, he asked why judges start their working day at 10 a.m. Remember, Wally Oppal was a British Columbia Court of Appeal judge. Just his asking that question is somehow interesting to me, in any event, never having been a judge.
Senator Mitchell: Do you agree with everything that a Conservative says?
Mr. Toews: I am simply suggesting that this is not simply a Conservative issue. There are many Liberals who have raised similar concerns. Mr. Oppal raised that question, and I believe that is a legitimate question for him to ask in the context of the administration of justice in that particular province. Notice, I did not jump into that water.
Immediately, Mr. Oppal was attacked as somehow compromising the independence of the judiciary. Reasonable people would say perhaps there is more to this issue than simply an attack on the independence of the judiciary.
I am not getting involved in that. I am just saying there are ways to interpret that and maybe there are better ways to approach the matter. It is not just Conservatives who, in the past, have expressed concern about one aspect of the judicial system or another.
Senator Eggleton: I have a straightforward question in three parts. One is the Supreme Court of Canada's decision in July of 2005, the three-part test that they set out to assess the rationality of the government's departure from a compensation commission's recommendations. The three tests were whether the government has articulated a legitimate reason for departing from the commission's recommendations; whether the government's reasons rely upon reasonable factual foundation; and whether viewed globally and with deference, the commission process has been respected and the purposes of the commission have been achieved.
I would like you to tell me whether you feel the government has met those tests and how you have met those tests.
The second part of my question deals with the 7.25 per cent. How was that arrived at: What is the rational; what is the formula used to arrive at 7.25 per cent?
Third is the issue of cost of living. This salary is common across Canada, yet in one community it will buy a lot less than in another community. When I was Minister of Defence, I remember facing that very issue of common salaries across the country. We put into effect something called the ``post-living differential,'' which recognized that the money buys different amounts of needs in different parts of the country.
For example, it is very expensive living in the West Coast navy in Esquimalt, versus the East Coast navy in Halifax.
Have you thought about this cost of living — how do you feel about it?
Mr. Toews: Let us start from the last one, this issue of common salaries. It is the same problem with members of Parliament, whether senators or from the House of Commons. We had that discussion when I was in opposition; there had been some suggestions — even coming from me — and I did not see a problem with paying MPs, such as myself, less whether in actual salary or in terms of expenses.
I can rent a fairly good office in my riding of Provencher in rural Southeastern Manitoba for probably one third of what someone in Toronto would pay. Is that fair? I can buy a nice house in Manitoba for $250,000. That would not be the case in Toronto. That was discussed very briefly, but it went nowhere. We come from where we do, and that is what we get.
I do not believe we can fine-tune it to that extent, provided there is a reasonable standard across the country and people can meet their obligations, then that is sufficient. I understand we all get the same, and there is a reasonable salary.
Would I oppose expenses graded on different levels for MPs or senators? To some extent, we do that for MPs' rural travelling expenses. We get more money for travel expenses, yet we get the same compensation when concerning our building leases. I do not understand that, but that is the way it is.
I do not believe that transgresses a constitutional principle for judicial salaries.
How did we come up with the rationale? Our government's response to 7.25 per cent has a detailed response. On the basis of the reasons set out, we believe the commission did not appropriately balance the judicial compensation proposals within broader federal economics and fiscal context.
We had the benefit of two or three years passing that the earlier government and commission did not have. We are entitled to take that benefit into account, because of the Bodner vs. Alberta decision.
We feel the need to attract outstanding candidates to the judiciary has been overemphasized, whether in Toronto or rural Northwestern Ontario. There does not seem to be a problem attracting very qualified candidates.
I do not feel there are enough female candidates for the judiciary. That is apparent as I go through the lists. That is not because judicial advisory committees have inappropriately rejected female candidates. I find fewer women apply than men. That might be because of economic and social reasons, I do not know.
Aside from issues of minorities and gender, if we are talking about qualified lawyers, we are getting an overabundance of people applying.
I do not believe raising it from 7.25 per cent to 10.8 per cent would result in more women or minorities applying. That problem is separate from the salary.
I cannot see a woman from Toronto saying she would not apply for the judgeship because of the 7.25 per cent, any more than I could see a man rejecting it for that reason.
Senator Eggleton: What is your comment on the three-part test?
Mr. Toews: Have we articulated a legitimate reason for decisions? Yes. There is an overemphasis on attracting qualified candidates and not enough emphasis on the economic context.
Have we shown a reasonable factual basis? Yes. Our response demonstrates that.
Globally, have we departed in a manner where the result is unreasonable? I do not believe so.
I believe reasonable people can disagree on certain points, as the prior government and we disagree on the 10.8 per cent and 7.25 per cent. Is the real number 7.86 per cent or 8.32 per cent? I do not know. There is latitude granted to government in its response. If Parliament does not feel 7.25 per cent is the appropriate response, that it should be 9.36 per cent, that is up to Parliament.
The commission's job is done. If Parliament comes up with a rational response, it is entitled to do that.
[Translation]
Senator Fox: I will choose my words carefully because many of my friends are judges who read committee transcripts. This is how the system works: the committee makes recommendations to the government, which in turn makes recommendations to Parliament. This process is completely normal and I definitely believe that an increase of about 11 per cent will not affect the government's fiscal framework.
We must, however, take into account comparisons with other sectors. I am old enough to remember that when dockworkers received an 18 per cent pay hike, it provoked an inflationary reaction throughout the country. In my opinion, I think the government should take all these factors into account, including the pay skills of other sectors.
My question is specific because the previous witness implied that it was not the usual procedure for the government to table recommendations. The government must table its report within 10 days and it must present recommendations within six months. In my view, the previous government understood this, but I do not agree with what the previous witness said and I would like to know what you think about it.
[English]
Mr. Toews: Whether the recommendations come from this or the prior government, it is Parliament's responsibility, not the government's responsibility.
You could consider our recommendation. I have wrestled with that issue. Is our government functus because another government already made a decision? I prefer not to get into that legal entanglement.
We brought forward a bill; we presented our rationale. There is no legal effect to that recommendation; it is Parliament's determination.
The report demonstrates the bona fides of government. Are we acting in good faith on the issue of judicial compensation? That is the strongest use to which those reports can be put.
If this committee says that a government is functus and no longer has a role to play, we will go back to the 10.8 per cent.
Senator Fox: The Senate could not do that.
Mr. Toews: Senate can recommend that it go back. Parliament can do that. That was one of the reasons the bill went to committee after first reading. We did not want to establish the parameters of the bill after second reading. We wanted to send it after first reading, so the committee would have a broader scope to make that determination.
That was a very deliberate choice on our part, that we wanted Parliament to ultimately make the determination rather than government.
[Translation]
Senator Fox: I have a final, technical question. Your bill also includes amendments to whole series of laws, such as the Railway Safety Act. It is fairly surprising to see, in a bill which is supposed to deal with judicial compensation, amendments to the Crown Liability and Proceedings Act, the Employment Insurance Act, the Federal Court Act and others.
So this is my question: why did you not simply, clearly and specifically introduce a bill dealing only with judicial compensation, and include the other amendments in a Miscellaneous Law Amendment Act, if such a thing still exists?
[English]
Mr. Toews: That was considered. I am told that they would not have fit into the law amendments bill, because they have a substantive effect and, therefore, could not have gone into that bill. Thus, we put it into this context.
Senator Fox: They have absolutely nothing to do with judicial compensation, do they?
Ms. Bellis: We have found, given the sensitivity of Judges Act amendments and related court matters, that it is usually only once every four years that a set of courts-related amendments can be introduced and brought through Parliament. This was an opportunity to essentially implement these kinds of technical amendments. That has been the case in the past, to seize the quadrennial opportunity for legislation. These are essentially technical amendments, but they are not ones that the legislative drafters advise that we would be able to include in the Miscellaneous Statutes Amendment Act.
Mr. Toews: This is not a practice that our government established; it is a past practice.
Senator Fox: Some things can be changed.
Mr. Toews: Yes.
Senator Jaffer: I respect what you said, that it went after first reading to committee, but I understand in the committee, there were members who tried to change the amount and it was ruled out of order. Am I correct?
Mr. Toews: It required a Royal Recommendation, but there should have been some kind of a recommendation to Parliament that we change it, even if they could not have done it formally. We would have entertained that, but the point was that the parties could not agree on exactly what kind of amendment they wanted.
Senator Jaffer: The committee could not change it because it needed a Royal Recommendation; so even if it wanted to, it could not have changed it?
Mr. Toews: We invited them, as I understand it, to make a recommendation to Parliament in that respect. No recommendation was received in respect of any change for that. They simply could not agree, for one reason or another. I cannot remember all the details of the fight. It was on the periphery of my party, so I did not really pay it much attention.
The Chairman: Thank you, Mr. Minister. This concludes this session of the Standing Senate Committee on National Finance dealing with Bill C-17. We thank you very much for being here and for clarifying a number of points for us.
Are there further questions for Ms. Bellis? We have planned to go to clause-by-clause at this stage.
Senator Cowan: I heard the minister say that these were substantive amendments which could not be brought in through the amendment act to which Senator Fox referred. You referred to them as technical amendments.
Ms. Bellis: The policy of the legislative drafting section treats the use of the Miscellaneous Statutes Amendment Act in a very narrow way. Anything that they feel parliamentarians might have a question about, even if it is a technical one that might be considered to have a policy aspect to it, they essentially tell us: ``No, you have got to find a vehicle that will go through the full legislative process.''
Senator Cowan: I do not propose that we go through these today, but I refer to employment insurance. I do not know what the current section 105 of the Employment Insurance Act says; it has something to do with appeals and rights of appeal. This bill says that that section is to be replaced with proposed section 105, which now says:
The decision of the Tax Court of Canada under section 103 is final and, except for an appeal under the Federal Courts Act, is not subject to appeal to or review by any court.
Ms. Bellis: Senator, could you refer me to the actual clause?
Senator Cowan: Yes. It is clause 19, on page 23.
Ms. Bellis: I could explain it to you and give you a very quick sense of it. I can tell you that all the other technical amendments are like this, but I will give this to you as an example.
Senator Cowan: Does that change the rights of appeal?
Ms. Bellis: It does indeed.
Senator Cowan: It is obviously too late in the day for us to get involved in this. I do not know if I want the answer to my question. In the other place, did anyone question this?
Ms. Bellis: No, they did not.
Senator Cowan: That is what I was afraid of.
Ms. Bellis: This is a good example, senator. This is a technical amendment that essentially clarifies a matter that was not specified in the act, which established the Tax Court of Canada as a superior court. That was C-30, which created the Courts Administration Service Act.
The Tax Court of Canada was formerly subject to review. Now the Tax Court of Canada is itself a superior court. Superior courts in Canada are not typically or traditionally subject to judicial review by another court, even a court of appeal, so this provision was to essentially change the notional judicial review to an appeal in order to reflect the change in status of the Tax Court of Canada.
While it is technical, someone might ask: Are you changing the nature of what a person needs to establish in terms of the procedure? It is not judicial review; it is now appeal. Someone might want to ask the question: Are you actually changing the procedure? It is a valid question; someone in Parliament might be interested. The answer would be: No. We have just removed the nomenclature, and it is essentially an appeal in the nature of the same remedies as judicial review.
Senator Cowan: The danger, of course, is that when all of this gets tacked on, the focus is on the salaries. I would not be at all surprised if, before long, someone will find out that we have another unintended consequence here and that no one ever examined.
Ms. Bellis: There is no question that the Judges Act and court-related bills have a plethora of technical amendments. Due to the of the nature of judicial recourse and the ripple effect, drafters and policy advisers attempt to be very careful.
Senator Cowan: The only connection here is it has to do with courts.
Ms. Bellis: That is correct.
Senator Cowan: It has nothing to do with judges' salaries. These are not amendments that are consequential to adjusting salaries and benefits for judges.
Senator Rompkey: Bootlegging.
Senator Cowan: Bootlegging, that is the term. Leave it to a Newfoundlander to come up with the right term. It is not a term that is familiar to us in Nova Scotia.
The Chairman: Thank you, Senator Cowan. It is a good point that you made.
Ms. Bellis, thank you very much for being here.
Senator Fox: I totally disagree with this practice. I feel it is bootlegging, as said, and is a way for the Department of Justice to get a number of amendments through that they want to get through. It is really a bureaucratic exercise to that end. It ought to be in the Miscellaneous Statutes Amendment Act. It should not be in this kind of bill. I want to go on record as saying that.
As Senator Cowan has indicated, no one in the House of Commons asked any questions whatsoever on any one of these amendments, none of which are consequential amendments. They ought not to be in here, and we should not encourage the Department of Justice to continue this practice.
The Chairman: We all agree with that, and undoubtedly senators will speak to that at third reading debate in the chamber. As Mr. Cherniak said earlier, this process has been caught up in an election. In the meantime, judges, who are doing a good job for us, are quite rightly wondering what happened to a recommendation made three years ago.
With that background, honourable senators, is it agreed that we proceed to clause-by-clause consideration at this time?
Hon. Senators: Agreed.
The Chairman: Therefore, we will proceed to clause-by-clause consideration of Bill C-17, an act to amend the Judges Act and certain other acts in relation to courts.
Honourable senators, the bill is divided into Part I, Part II and the ``Coming Into Force'' section, clauses 35 and 36. I propose that we proceed part by part. Is that agreed?
Hon. Senators: Agreed.
The Chairman: Shall the title stand postponed?
Hon. Senators: Agreed.
The Chairman: Shall Part I, being clauses 1 to 16, be adopted?
Hon. Senators: Agreed.
The Chairman: Shall Part II, being clauses 17 to 34 inclusive, be adopted?
Hon. Senators: Agreed.
The Chairman: Shall the ``Coming Into Force'' section, clauses 35 and 36 be adopted?
Hon. Senators: Agreed.
The Chairman: Shall the title be adopted?
Hon. Senators: Agreed.
The Chairman: Shall the bill be adopted without amendment?
Hon. Senators: Agreed.
Senator Ringuette: Senator Fox has made an excellent comment with regard to the attachment to this bill. It should not be left to senators to make that recommendation at third reading stage in the Senate. It should be made as an observation appended to our report, because everyone here agrees that this practice should not continue.
The Chairman: Are we all in agreement on that?
Hon. Senators: Yes.
The Chairman: We were very sympathetic. Would you leave it to the chair and the deputy chair to prepare the wording for this observation?
Hon. Senators: Agreed.
The Chairman: It is agreed that Senator Nolin and I will prepare the proper wording.
Senator Nolin: In the past 10 years, the miscellaneous packaging of amendments has had a rough ride. Keep in mind that cruelty to animals was done in this way. I believe that we all agree on the principle of what Senator Fox said.
Senator Di Nino: I have absolutely no disagreement with that at all, and I believe that the Senate should consider the use of omnibus bills for the same purpose.
The Chairman: That is a good point. This is not a new practise; we have complained about this many times and this is another time to do exactly that.
I believe any of us who have the opportunity to speak should raise that issue, that we are disappointed that this practice is continuing, which is why we are including this observation.
Shall I report the bill to the Senate without amendment, but with observations?
Hon. Senators: Agreed.
The Chairman: Do I have permission to report the bill as soon as Senator Nolin and I have agreed on the observation?
Hon. Senators: Agreed.
The Chairman: Honourable senators, thank you very much. This meeting is now concluded.
The committee adjourned.