Proceedings of the Standing Senate Committee on
Issue 32 - Evidence
OTTAWA, Wednesday, September 30, 1998
The Standing Senate Committee on Legal and Constitutional Affairs, to which was
referred Bill C-37, to amend the Judges Act and to make consequential
amendments to other Acts, met this day at 3:37 p.m. to give consideration to
Senator Lorna Milne (Chairman) in the Chair.
The Chairman: We have before us Mr. David Scott, the author of the 1995
Commission on Judges' Salaries and Benefits.
We await your comments with some interest, Mr. Scott.
Mr. David Scott, Chair, 1995 Commission on Judges' Salaries and Benefits: I
wish to reaffirm that I am one of the authors of this report. The other two
authors are Michel Vennat, a distinguished lawyer with Stikeman Elliot in
Montreal, and Barbara Rae, a very distinguished businesswoman from Vancouver.
Ms Rae was an enormous resource for us, because she brought her background in
personnel management to the job without the baggage of a connection to the
judiciary. Since I have spent all of my life in the courts, I have a certain
amount of baggage about the judiciary.
Senator Beaudoin: Your report is very interesting. I have a question about page
28 of your report, where you recommend that the Judges Act provide for the
payment of a lifetime annuity to a common law spouse under legally applicable
circumstances. I don't have any trouble with the whole question of paying out
pensions, because that comes under section 100 of the Constitution. Everything
is fine from that point of view.
When it comes to common law spouses, what do you mean by, "we recommend
that the Judges Act allow for payments to a common law spouse, under legally
Does this refer to provincial law or to federal law? What do you mean by that?
Mr. Scott: We mean legal situations in which a person qualifies as a common-law
spouse, which assumes a certain period of cohabitation. Our intent was not to
define any circumstances in particular, but rather to take common-law spouses
who had established rights in accordance with provincial law in all of the
provinces, and to carry that forward for the benefit of the common-law spouses
Senator Beaudoin: Some of my colleagues will return to the issue of a common-law
Senator Murray: It is assumed that both parties to the common-law union are
legally free to marry; that is to say, not married to someone else.
Mr. Scott: Let me begin by saying that I am not a family law lawyer. However, I
do not think that the definition of a common-law spouse assumes freedom to
marry. If I understand your question, you are saying that if the person is
already married, he or she is incapable of being a common-law spouse.
Senator Murray: Well, he or she is certainly incapable or legally marrying
Mr. Scott: I could be quite wrong, but I do not think that precludes someone
from being a common-law spouse. In my understanding such a person can qualify
as a common-law spouse.
Senator Beaudoin: Let us return to the first question on the commission. I do
not have any problem with the commission as such. Whether we like it or not,
the fact is that the Supreme Court has already said that, in order to protect
judicial independence, we need an organization such as the commission. I know
that Mr. Justice La Forest is dissenting on this, but the majority of the court
is of the opinion that to have judicial independence we need a commission such
as this one.
What is your opinion on this? I understand that the report is not binding on
the legislative and the executive branches, but that if Parliament or the
government disagrees, they must justify themselves, and even in court if
Did you study that problem for your report?
Mr. Scott: Senator, as a result of reading some of the debates which were held
here, the only thing that alarmed me somewhat was the suggestion from some
witnesses that the triennial commission system works fine and that we should
stick with it.
My colleagues and I were in complete agreement that the triennial commission
system not only did not work well, but that it did not work at all. It might
have looked very appealing, but nothing ever happened. We felt very strongly
that it became, as we said in our report, a mechanism that allowed the
government of the day to do nothing about the judges, because doing something
about the judges is a very unpopular thing.
The discussion that we are now having is most unique. Previously, no one wanted
to do anything for the judges because people believe that judges were well
looked after. That is, they have tenure and pensions and everything else, so
there is no reason no bother with them. Politically, it is very unappetizing
to be preoccupied with judges.
When we were appointed and began our work, we read what had happened before.
Every previous commission had said that the system did not work. The government
not take up any of the meaningful ideas for reform in terms of issues such as
pay and allowances, nor did it take up any of the suggestions for reforming
the triennial commission system. The thrust of our report is that this must be
Luckily, the decision of the Supreme Court of Canada in the P.E.I. case came
along at the same time. We certainly were not anticipating that, nor would we
have developed any such notion, although I would defend it. We felt that the
government should be forced to react to the views of the triennial commission.
Further, we felt that it should be forced to table a bill; that the government
should be forced to do something in order to legitimize the process of inviting
citizens to take part in this lengthy study and then allowing it to drift off
before a committee and disappear.
The most important thing to me is for this committee and anyone charged with
responsibility to recognize that the triennial commission system does not work.
As I understand it, the bill does not provide for what the commission suggested,
which was a requirement to table the bill -- and I understand that that may
be an unrealistic expectation -- but that the government will have to respond
in some way. Therefore we now have this overlay from the court, and the whole
process will be subject to judicial review and the test will be rationality.
I confess that I read the very impressive statements before you from the law
professors. I am not nearly as alarmed about it as they are. Constitutional
substance aside, I believe that a test of rationality for a commission report
such as this one will be a very easy threshold for the government of the day
to meet. If it cannot meet rationality, then, constitutional imperatives aside,
what is wrong with the notion that the court advanced?
As a member of this commission, I believe that something must be done to fix
this problem. The bill goes a certain way to fixing it. The Supreme Court
overlay is another question.
Senator Beaudoin: I understand your point of view, and I have great respect for
it. The question is, what happens if the government does not like it? A strong
majority of the court said that the executive and the legislative branches
must justify their points of view. At the end, if there is what in French is
called une impasse, then the court may rule on the basis of rationality.
Mr. Scott: Should the government be told that it has to give reasons? The judges
do not like to be told that they have to give reasons, so for the judges to
tell Parliament that they have to give reasons may be a bit offensive.
The bottom line is that it is a rationality test, and I am not nearly as alarmed
about that as others are.
Senator Joyal: We have tried to understand the fundamental changes to the
principle of our Constitution stemming from this proposal in Bill C-37. To put
the issue simply, section 100 of the Constitution vested the responsibility
to ensure appropriate compensation for judges in the Parliament of Canada. The
triennial commission did not produce a satisfactory result in a reasonable
period of time. It seems to us that, in the judges' opinions, we ought to go to
the other extreme whereby Parliament abandons its responsibility to have the
final say in the vote for the appropriation to pay the salaries. In my opinion
this is wrong. It is one thing to say that Parliament filibustered, but to
amend the system by including a time frame within it so that there is an end
result, either in the affirmative or in the negative, is the proper way to
manage Parliament's responsibility. I can understand that and I think a
reasonable citizen can understand that.
What goes beyond common sense is that the commission has no parameters to decide
what constitutes a proper increase. The bill contains no criteria that defines
the scope of the commission to decide upon what is a fair increase for
whatever reasons they think are just. The other problem is that if the
government does not give effect to the recommendations of the House of Commons
or the Senate committee, or its own financial policies criteria, then the
court might decide that there is litigation and the government must justify
its decision in the court. We are both judges and parties in a decision like
that. That is where the fine-tuning of the solution that is proposed to us must
You have spent a lot of time with learned peoples to study the compensation for
judges. Is it the same way in other countries -- that is, do the judges have
the last word on their pay increase and must the governments in those
countries abide by commission reports because they do not have the capacity to
say "No"? In Canada, the government civil service and the armed
forces, among others, have had their salaries frozen. Judges are like other
people; they make an effort. I am not against an increase in salaries at all.
In fact, judges are underpaid in my opinion. However, in order not to go to the
other extreme, we must protect the principles in the new system that we are
putting into place. Can we not find a middle balance compared to what existed
before, which did not produce a satisfactory result for the learned justices?
Can we go the other way? There might be another way to fine-tune this.
Mr. Scott: The way you divide it out is the way to divide it. The decision of
the court that the judges will have the last word on their salaries is one
question; the whole question of the government having to meet a rationality
test as proposed by the court is another question.
As far as the commission is concerned and the analysis of what is appropriate
compensation, this has a historical base. Before 1981, there was no independent
assessment of any kind. The triennial commission was established by statute
as the basis of getting some independent input for Parliament about what is
appropriate. Criteria for that would not be a good idea. How would you establish
it? Would there be limits? No. The commission -- that is, assuming that it is
appropriately selected in terms of make-up -- should be able to free-wheel in
terms of what they think should happen. They then make a report. Up to that
point, we have an appropriate historical basis for doing this.
What happens next? In our brief, we say that instead of nothing happening,
something must happen.
Senator Moore: Within a set time-frame?
Mr. Scott: Yes. Otherwise, it is a screen of some design. Something must happen.
I accept the proposition that under the Constitution, Parliament will decide.
Parliament should have the last word. We are talking about the mechanism for
ensuring that something happens. This bill, which does not go as far as we
hoped it would, says that within a fixed period of time government must react
with a position statement. The court is saying that they must give reasons and
the court will have this judicial review power. Whether or not people find
that desirable is an interesting question. The court has spoken, so what
The task here is to fix on the nature of the commission, its make-up and its
jurisdiction. It is important that that not get lost in the minds of some who
are outraged about what the judges are doing to the vehicle of this judgment.
I am more interested in what happens down the road and having a workable,
practical commission that does the job.
Senator Joyal: I totally agree with you, as do some of my colleagues around the
table, when you talk about a time-frame and trying to establish some kind of
compelling agenda so that we arrive at the end of that process to have it
resolved. That is a common understanding.
I have a slight reservation about your statement that you do not want criteria.
Even the Supreme Court of Canada said that the commission should have some
criteria. The judgment of the majority of the court was that the body must
convene if a fixed period of time has elapsed since its last report in order
to consider the inadequacy of judges' salaries in light of the cost of living
and other relevant factors. Even the Supreme Court of Canada has recognized
that there must be some factors.
We cannot abandon to a commission the overall open-ended door to say, "Let
us discuss whether or not we must increase judges' salaries." Perhaps
judges in Australia had an increase last year. Our judges may say, "We
work as hard as them, so we should have the same increase." There must be
some criteria. Treasury Board negotiates with the union and they have criteria.
The Government of Quebec will open negotiations with teachers, with unions,
and with all the other services. They have some criteria such as equity, pay,
and a lot of other principles that they want to implement.
It does not hurt my sense of democracy or fairness with judges if the commission
is bound to follow specific criteria rather than offering us a general report
that judges are nice people who are learned and forego part of their freedom
to live in society because they are seen as symbols of rectitude, and so on.
We all know that.
Let us frame the mandate of the commission so that Parliament has a fair
perception that those people are not just looking for any kind of increase --
especially if we bound them to have a result at the end of the road. It is one
thing to have everything on one side and nothing on the other side. I think it
is a fair balance of the two. Even the court has recognized that.
Mr. Scott: I am not disagreeing with you. I am not saying that the commission
should function arbitrarily. I am not sure how much needs to be said. The court
said, "and other relevant criteria." Will we now statutorily define
the criteria? These previous triennial commissions -- and let us exclude ours
for the moment -- followed the same process, namely, analyzing what salaries
were in the private sector, what they were in the practising bar, and what
they were in the government. They were then compared, as were the
cost-of-living increases. That is the relevant criteria.
If you talk about hard criteria, such as whether the judges' salaries should be
measured against the salaries of civil servants, our American friends are in
the process of trying to disengage that right now. There is a kind of lock-step
arrangement there and they are trying to eliminate it. I am not saying that
there should not be any criteria, but once you start down the road of developing
criteria, you may create a monster. These commissions should take into account
all the relevant factors -- certainly not irrelevant factors or arbitrary
factors. You would not confine it to cost-of-living increases, although it
would be a logical thing to consider. I am not sure what the relevant criteria
Senator Joyal: When you did your report, you followed a certain number of
criteria. What are they?
Mr. Scott: Those were exactly the criteria that anyone would use to complete
this task. No one provided us with criteria. The criteria were: what the judges
are making now, what they made previously, what they are making elsewhere,
what groups comparable to them are making, and the judges' situation. The
problem of what to consider was not a large one. The process of determining
what to consider was important, but we were not stuck on it.
We were stuck on the question of whether we should be bound by some public
service compensation level. That has been a traditional debate in these
commissions. However, that aside, I do not think there was much problem
deciding what to consider.
Senator Bryden: It is my understanding that under the bill the recommendation
of government, based on the commission's report, will be presented to
Parliament and enacted by Parliament. Is that correct?
Mr. Scott: Yes.
Senator Bryden: It is also my understanding that there are at least two places
where the court now says clearly that it can intervene. First, it can intervene
if the commission itself, like any other administrative tribunal, is alleged
to have gone outside its jurisdiction. In such a case, it can quash the
decision reached by the commission. The court probably cannot substitute its
own position, but it can ask the commission to take the matter up again. That
is the normal administrative law procedure.
The courts appear to be taking the position that, if the government acts on the
commission's report and someone says that the government has made an irrational
decision, that person can make an application to the court for a judicial
review of the government's decision. That review could, in a proper case,
allow for the quashing of that decision. Is that true?
Mr. Scott: Yes. My understanding is that the theme of the judgment is that the
rationality test is tied to undermining independence. In other words, the
basis for going this route is the question of preserving independence. I do
agree with what you have said, however.
Senator Bryden: I do not want to bring in "the ubiquitous reasonable man,"
which is where the rationality test takes us, but I would like to go one step
The commission makes its recommendation, which is accepted by the government.
The government drafts a bill and presents it to Parliament. Parliament debates
the bill and rejects it. On the independence test under the Constitution, is
it possible for an application to be made to a judge to quash the act of
Parliament because it is in violation of the Constitution Act, which gives
independence to judges?
Mr. Scott: Forgive me, because I am the furthest thing from a parliamentarian.
If Parliament rejects the bill, however, is there an act of Parliament at all?
Senator Bryden: Let me just vary the question a bit. Let us say that the act of
Parliament is passed, but it grants the judges only $1.
The concern that some of us have is that, after documents such as the Charter
of Rights and Freedoms, Parliament has been allowed to keep very few real
parliamentary rights vis-à-vis the courts. The time when Parliament was
supreme went out the window with the Charter of Rights and Freedoms.
Parliament has always jealously guarded its right to appropriate taxes -- the
That is what is troubling a number of us. Are the courts now saying, under the
guise of protecting the independence of the judiciary, that the judiciary can
override decisions made at the parliamentary level, and say that a particular
judgment is irrational and interferes with the constitutional independence of
Mr. Scott: I believe that is what is being said. I will come to the reasons for
that in a moment. If the government tables a bill that is not highly
recommended by the commission, and the bill becomes law, it is my
understanding that the case is saying that the courts, on judicial review, can
intervene. That is a bit of a misnomer in terms of judicial review, because it
would be questioning the constitutionality of a statute. However, that is the
way the court would intervene. It would be confronted with this statute, and
it would be exactly the same if the government proposed that the
recommendations be followed and Parliament rejected it. I believe that you have
analyzed that correctly. I may have this wrong, but that is my reading of it.
What happens if Parliament passes a bill which is deliberately drafted with a
view to controlling the behaviour of judges by attacking them economically?
What happens if the commission says that the judges have not had a pay raise
for 40 years and they are on the poverty lines, yet Parliament attempts to
further reduce their salaries? What mechanism do we have to deal with that?
Senator Bryden: The answer to your question is that you would get another
Parliament. In a democracy, the final arbiter used to be the people who
elected the parliamentarians and if the parliamentarians acted that
ridiculously, the parliamentarians got voted out of office.
I hope I am not over-simplifying this, but the concern is that, in addition to
all the other powers that now reside in the Supreme Court, we will now give
the justices the power to tax. That is, they will be in a position to reject
Parliament's decision that the people of Canada cannot afford to do a certain
thing, even though it was recommended by the commission and by the government,
and to increase the amount of money allocated for judges. We can go through
this whole process and have the court says that the result is not acceptable.
Do the justices then fix the amount, or do they do the normal thing, which is
to say, "Go back and try again"?
Mr. Scott: I think they say, "Go back and try again."
Senator Bryden: That is of real concern to many of us who grew up believing
that Parliament had some power.
Mr. Scott: I understand that, and I suppose it depends upon one's point of
view. I look at it entirely from the point of view of the independence of the
judiciary. To take a far-fetched example, if a Parliament duly elected by the
citizenry concluded that the judiciary was out of control and that therefore
Parliament would undermine it economically, it would be modest comfort only to
know that the Governor General might not sign the bill into law, or that we
could have an election. Presumably, by this time Parliament is uttering the
will of the people.
I understand what you are saying. I understand the concern.
I would be very surprised if the judges of the Supreme Court of Canada, and
their numbers who supported this notion, contemplated it extending as far as
you have described it.
Senator Bryden: I am sure they did not. We are here to try to make sure that we
understand all the implications of what is being stated here.
It bothers me as an individual that this is the only time in 130 years
that, to preserve the independence of our judiciary, the Supreme Court is
requesting the right to review. It was never required before. Why is it
necessary, all of a sudden, at this stage?
The Chairman: To follow up in the same area, if the court quashed a
bill of this nature, they would not then have the power to tax, because what
would stand at that point would be the previous bill, would it not?
Senator Bryden: Quashing it means that we must try it again.
Mr. Scott: It means that the existing regime would continue.
Senator Bryden: It is an indirect ability, because they could go back and say, "Add
another 10 and another 10 until we get something that is acceptable."
If the judges rule and say that they will quash the bill for Constitutional
reasons, does the notwithstanding clause then come into effect, or is there no
ability for it to operate in that situation?
Mr. Scott: No, it does not come into effect in that situation.
Senator Murray: The process that is provided for in this bill is that the
commission submits its report and the Minister of Justice is obliged to table
it in each of the Houses of Parliament within 10 days, effectively. The report
must then be referred to this committee, to the Senate, and to our counterparts
in the House of Commons. They have 90 sitting days to report their findings.
It then says that "the Minister of Justice shall respond to a report
within six months after receiving it."
Are we certain that the obligation is there is for the Minister of
Justice to respond to the commission's report or to the parliamentary
committee? If you look at the marginal notes on page 4 there is "Report
by Committee," "Definition of `sitting day'," and then "Response
to report." I ask the question because it is quite normal under the rules
in the House of Commons that the government is obliged to respond to reports
of parliamentary committees within a certain period of time. We do not have a
similar rule in the Senate.
I am not aware that ministers or the government are obliged by statute
to respond to reports of other commissions, although they may be obliged to do
Mr. Scott: The intent is that the minister respond to the report of the
commission. Whether that is regarded by senators as desirable or otherwise, I
believe that is the intent. That is because we, and a succession of
commissions before us, were of the view that the government should be required
to respond rather than simply say nothing. That is my understanding, but I
could be wrong.
Senator Murray: We should probably ask the minister.
The Chairman: That is a good question to ask the representatives of the
department when they return here.
Mr. Scott: I think that is correct.
Senator Beaudoin: In the same line as the one taken by Senator Bryden, is it
true that if the government is resisting the commission's recommendation, the
government may have to justify its stand? If I understand the bill correctly,
it means that the burden of evidence is on the shoulders of the legislated
branch of the state. It is not often that we have that, but it is there. The
court ruled on this in the provincial court judges reference.
However, the court may intervene only if it is not rational. That is
the way I read the statute. It does not mean -- and I would object strongly to
this -- that the court itself would fix the salaries. That would be quite
unacceptable. I cannot see how we can go that far.
What is your understanding of this? In other words, the court may say:
Your refusal is not rational. That means you must try again.
Mr. Scott: That is correct.
Senator Beaudoin: That does not mean more, which is quite something.
Mr. Scott: As Senator Beaudoin says, it is quite something.
Senator Beaudoin: At least the power of the court is on the irrationality, not
on the question of taxation or things of that sort. I know it is close.
Mr. Scott: Rightly or wrongly, it is on rationality as measured by the
undermining of independence. It is not economic rationality or some other
rationality. I could be wrong, but that is the way I read the judgment. The
court is concerned only with the issue of independence, so the rationality is
Senator Beaudoin: What was raised by Senator Bryden is that the last word is
given to a court in a court case.
Mr. Scott: Yes, but it is not given to them to fix their salaries.
Senator Beaudoin: It is not to fix the salaries, so it means to try it again?
Mr. Scott: That is correct.
Senator Beaudoin: The court was not unanimous, but they do not need to be
unanimous on this. There was a strong majority to that effect in the court.
Mr. Scott: That is correct.
Senator Beaudoin: We cannot go further than that on that precise question. We
may like it or dislike it, but the fact is that there is already one advisory
opinion of the court that says that the mechanism of a commission is good. We
must abide by the decision of the Supreme Court of Canada.
I cannot see how we may use the notwithstanding clause in this because
it is not a Charter case. It is a basic principle of the Canadian Constitution
that is judicial independence. This is a difficult debate. The legislative
area and the judiciary have been separate in Canada for 300 years. It is one of
the basic principles of our Constitution. However, in a case like this it is a
bit technical. I am glad that we must solve an interesting question like that.
Senator Sparrow: Let us say that there were no recommendations in the report
that the status quo be maintained. What would happen then?
You suggested that that report must go to Parliament. If there was a
status quo, you suggest that it still must go to Parliament with no changes.
If they did in some way or other go to the house, the judge would determine
whether Parliament had made an irrational decision.
Could the irrational decision have been made by the commission? That
recommendation had gone, and now the government -- Parliament -- backed that
decision, and it was irrational in both cases? Does the court still decide
that the commission was irrational, as well as Parliament? If in fact there
was no report, could that be considered an irrational decision because there
was no recommendation for any changes?
Mr. Scott: I think that Senator Bryden's point is the correct one. If the
commission exceeds its jurisdiction by irrationality, if that is possible,
then judicial review would lie anyway.
My sense of the rationality here at issue is the government's response to the
commission's report rather than the commission's report itself. In other words,
the point of the independent commission is that it will be an independent
adviser to government, and the concern is that governments are arbitrarily
ignoring it. If the commission itself, by its methodology or what it says, is
demonstrably irrational or lacks in jurisdiction or whatever, I believe that
judicial review would lie anyway, whatever this case provides.
The irrationality or rationality is in the government's reaction to the
commission's report. That is what I understand the Supreme Court of Canada is
dealing with in the P.E.I. case.
Senator Sparrow: But if both decisions were irrational, in the opinion of a
judge, what then?
Mr. Scott: I suppose that if the commission's decision were irrational to a
level which merited judicial review, that would be the first step. Obviously,
if the judges were challenging it, the first step is to either be supporting
the commission's decision or attacking it. This is all premised on the
proposition, as I appreciate it, that this independent commission will make a
rational recommendation that will be arbitrarily rejected by government.
Senator Pépin: According to clause 45, a judge who is in receipt of an
annuity can leave his pension to his common law spouse whom he has lived with
for at least one year. Some people have pointed out to us that in most
provinces, the requirement is three year's cohabitation. Could you explain this
Mr. Scott: I have read what has been said to your committee about this.
Certainly, three years is the provincial standard in many jurisdictions. I am
not an expert in this area so I will be of no use to you. However, my
understanding is that this is an expression of the regime in place in other
areas. However, I have no idea whether this is a departure or whether this is
an expression of the statutory regime in place in the provinces. I am just not
on top of this. My recollection was that it was three years, but obviously
this one-year provision is defensible based on the survivors' benefits, which
do not apply to judges. I am sorry that I am of no help.
Senator Beaudoin: Someone said that this bill is harmonizing the situation of
judges with that of people in other areas of the public service, such as the
The Chairman: I believe that it is harmonizing it with the public service.
Senator Beaudoin: Yes, and even members of Parliament.
The Chairman: Yes. We will hear from another witness who is knowledgeable in
this area. We can ask the question again then.
Senator Joyal: Did you study how other common-law systems comparable to Canada
deal with this issue of judges' compensation to protect the principle of the
Mr. Scott: We did. While walking here from my office, I was wondering where our
research papers had gone. They have all gone back to the judicial affairs
centre and I will see if I can find them.
We did a study of that. As I am sure you have been told, in some Australian
states they have negative resolution. I believe they have that in New South
Wales. In others, they have commissions that have powers to recommend only. I
could not list them for you, but the one most aggressively favourable to the
judges is the negative resolution system, which is in place in New South Wales,
Australia. The report is tabled and if there is no bill rejecting it, it
Senator Joyal: Do you know the system in the U.K. generally?
Mr. Scott: I cannot recollect it. We did a study of that, but I cannot now
remember what we learned. I will find out and send it up to the clerk.
Senator Joyal: I should like to come back to the question of rationality. As
you realize, it is something that bothers us a lot. You say that the test would
be rationality in reference with the maintenance of independency of the
Let us take an example that we have experienced in the last years. We were in a
difficult economic situation in terms of budgetary issues in Canada and the
government decided to institute freezes all over the place. The judges were
frozen, too, in terms of compensation.
Let us imagine that some time in the future the same situation arises and the
government once again institutes freezes. The commission studies the workload
of the judges and concludes that their workload has increased and they request
a 2 per cent increase, which seems reasonable in a difficult time. However,
the committees of the House of Commons and the Senate recommend against the
commission's request, as does the Minister of Justice.
In such a context, where everyone is hit, where, in your opinion, does the
maintenance of the rationality principle in relation to the independency of
the judiciary stand?
Mr. Scott: A freeze across the board is rational. However, the judges did not
always think that. It is very interesting what the Chief Justice said in the
P.E.I. case. He said that a freeze across the board, although effectively a
reduction, would be defensible.
The judges did not always think that. They did not like to be aligned with the
executive branch of government, so they did not like to be swept in with other
public servants. In respect of this last freeze, there was a lot of criticism
on the part of the judges.
I read in the judgment that the chief justice acknowledges that an
across-the-board freeze, where everyone bears the burden, would be rational. I
regard that as an advance in judicial thinking. It would be rational, but the
question is: What would be irrational? I am not sure of the answer to that
question. I suppose that is part of the troubling nature of the problem,
because what would be irrational in the face of what is perceived in society
as unwarranted judicial activism is a massive reduction in compensation
affecting only judges. The judges might regard that as an obvious attempt to
undermine their independence and to control their behaviour.
Cases such as the one in P.E.I. have involved efforts include some independence
problem associated with salaries. It arose from the fact that the executive
branch set the salaries for judges, and the judges had no say whatsoever in
the matter. There is always an effort to get the hook of independence into the
question. That is why it is not just rationality per se, but rationality as
tested by the stability of the independence of the judiciary.
Senator Joyal: On the same basis of your answer, a judge would recognize that
when an effort is requested from everyone, it ought to be borne fairly by the
judiciary, too. They are part of society as such.
Why are people so reluctant to have the criteria that the commission
would follow mirror the criteria that Treasury Board follows when putting
forward proposals that are within the framework of the government purse?
Essentially, that is what Treasury Board must do when putting together a
proposal for the unions. It would seem to be in accordance with the capacity of
the taxpayers to pay at this point in time.
Mr. Scott: Perhaps I am pushing this point too far. I am not saying that there
should not be any criteria, but at a certain point the criteria become
developed enough that you do not need an independent commission. That is, you
need only apply the criteria. You could say that the remuneration for the
judiciary should be measured by the salaries of deputy ministers or by the
incomes or benefits received by deputy ministers. That is the end of it.
I believe in the notion that for the judiciary, who are independent of
government, there should be some mechanism for determining what is appropriate
in terms of compensation.
I am not saying that we do not need criteria. What I am saying is that we need
to determine the nature of the criteria. Will we consider the benefits received
by deputy ministers? If so, at what levels? If you get to that point, then
you do not need an independent commission, do you?
Senator Joyal: In the United States they have criteria, and they fix the level
of compensation to avoid that kind of discretionary involvement of elected
people, thereby protecting the independence of the judiciary.
When you put forward some criteria, is that not a way to contain the
independence of the judiciary? In that situation you apply the criteria and
then there is no discussion.
Mr. Scott: Except for the fact that such a solution presumes that criteria
provide the complete answer. There is some judgment in here somewhere, and
where there is judgment there is an opportunity to lobby for the judgment to
go one way or the other. The way we get into this area is that judges cannot
lobby; therefore, you must have an independent commission.
In the United States, there is an enormous boon from removing the link
between judges' salaries and bureaucrats' salaries. That is not entirely the
work of the judiciary. There is a feeling that the judiciary, as a separate
branch of government, should be dealt with separately. The criteria change
from time to time, depending upon the attractions of the bench. About four
years ago, it was much more attractive to consider an appointment to the bench
than it is now. People flocked to be appointed to the bench over the last 10
years. Before that, they did not do so, and they certainly are not doing so
You are trying to develop a system that matches what is available
outside the judiciary in order to attract the right people. I would not favour
simply establishing a set of criteria that says that judges will be treated
like a certain group of people with all the same criteria. If you do that, you
do not need an independent commission.
Senator Joyal: You said that there is a movement in the United States to
deregulate the compensation mechanism for judges. Is that not a way for those
people who fight for judicial activism to submit judges to the appreciation of
discretionary compensation decisions?
Mr. Scott: The first group pushing for the removal of such a linkage is the
judges. They feel that their situation and the need to attract the right people
to the judiciary will not be addressed by putting them into a category with
federal public servants and that, since they are a separate branch of
government, they should be dealt with separately. The motives of others is
another question, but that is a hot topic in the U.S. now.
Senator Joyal: I understand your point. Besides the cost of living index, the
economic growth of Canada, and the objective that the government is pursuing
in its budgetary policy involving salaries, you add the criteria of putting
enough money on the table so that there will be enough candidates interested
in the profession.
Mr. Scott: Yes, the right candidates.
Senator Joyal: In other words, we must make the package attractive enough to
attract those we want to have, and not those who are looking for another job
because they feel they are underpaid. Is that what you have in mind?
Mr. Scott: Yes.
The Chairman: I am rather surprised, Mr. Scott, to hear you say that this is
not a position that people are avidly seeking. Most members of Parliament would
be surprised to hear that, too.
Mr. Scott: But are they the right people? That is the question. From sea to
sea, we have had a tremendous judiciary in this country. In my province of
Ontario, the Court of Appeal has always had the top lawyers in the profession.
This is not true in other countries. In other countries, the judiciary is
frequently made up of people who have been appointed to the bench early in
their lives. There is a completely different atmosphere in the judiciary. I
make no apology for pushing hard for the idea that there should be enough
independence in the effort to assess what judges should be paid to attract the
right people. The right people are not necessarily Bay Street people, but
people from communities across the country. We need to have the top people in
Senator Lawson: On the issue of criteria, I agree with Mr. Scott. I think it
would be a serious mistake to try to have fixed criteria. I heard Senator
Joyal say that the Treasury Board has some criteria, and I am sure that the
executive board does. Every union does, but it is floating, flexible criteria
that works on each individual occasion. You keep the ones which work, and if
they do not work next time, you change them to meet the changing
I have been involved in negotiations for over 40 years and I have learned that
it is impossible to have fixed, rigid criteria. One or two criteria are
obvious, such as the cost of living, but you simply cannot work within a
Those parties with bargaining rights have flexible criteria. To attempt to
apply it in this situation would be impossible. I agree with you that there is
no point in having a commission if you are to have rigid criteria. Rather, it
should be binding arbitration or binding conciliation, as it was in the old
days: Fix it and leave it, with no appeal.
Mr. Scott: I do not think that a lot of people genuinely believe that there is
a problem in attracting the right people to the bench. However, in reality,
the opposite is true. We have some of the most wonderful people on the bench.
Yet, every once in a while you get a rush of people who want to be judges and
you see a hint of the other side of the coin, which is very unappealing. You
see people who want to be judges because they perceive it to be easier work
and because they are attracted by the pension, et cetera. Those people we
positively do not want. They end up losing their spirit for it in no time at
all, and the result is a disaster.
However, taking the point about the criteria, we do always have to be measuring
how we compensate our judges against that body of people from which we are
drawing to ensure that we are competitive. We obviously do not pay anything
like the incomes that are given up, but we must pay enough to ensure that it
will not be such an enormous step down that people will not do it.
Senator Bryden: It is interesting that the tremendous courts that we all know
and have practised before have all come about without this type of protection.
I do not know why we have to go further with it at this particular time. There
was an old saying in law school that A students make professors, B students
make judges, and C students make money.
As you know, the fact that a given lawyer is making $500,000 a year doing
estates and commercial law in no way indicates that he is better than the
carefully practising lawyer, even an independent practitioner, who is eking
out enough to pay his secretary and his overhead and clear $80,000 or
Mr. Scott: That is so.
Senator Bryden: I should like to go back to the issue of criteria or guidelines.
Senator Lawson and I have both been in the labour business for a long time.
The ability to go to economic warfare is in some instances removed in the
public interest. For example, firefighters and sometimes police have the right
to strike removed from them and replaced by arbitration.
In most statutes that make arbitration the final decision-maker, there are
criteria laid out. If there are not criteria, you cannot take into account the
employers' ability to pay. Therefore, the fact that the Province of Prince
Edward Island could not afford to pay a 25 per cent increase would not be a
factor that an arbitrator could take into consideration. Now they must because
it is on the list. In other words, in your deliberations you must take the
following into account.
There are criteria for the commissions in many provinces already. The Provinces
of Ontario, British Columbia, Alberta, Quebec and Prince Edward Island have
them. The act of Prince Edward Island, for example, includes as criteria the
need to provide fair and reasonable compensation to judges, the management
board policy and other relevant considerations respecting judges' expenses, any
changes in the cost of living, the need to attract excellent candidates, the
prevailing economic conditions in the province and the overall state of the
provincial economy, and the salaries and benefits paid to other provincial
court judges in other Canadian jurisdictions. I do not see it here, but it
says probably "and any other relevant criteria," but under the ejusdem
generis rule you do not get too far away from that sort of stuff.
New Zealand's statute includes very interesting criteria. They are: the need to
achieve and maintain fair relativity with the levels of remuneration received
elsewhere; the need to be fair, both to the persons or group of persons whose
remuneration is being determined, and to the taxpayer or ratepayer; and the
need to recruit and maintain competent persons. Those are criteria which the
commission must take into account.
Mr. Scott: I started this by sounding as if I do not agree with Senator Joyal
on this. I am saying that those are as obvious as they can be. It is not as
though they are very earth shattering. While you were speaking, I wrote: "What
would the criteria be? What others are being paid, what is being paid
elsewhere, what is the cost of living, what is needed to attract the right
candidates, and what is the state of the economy."
Senator Bryden: Then put it in the statute.
Mr. Scott: I have no problem with that, but once you go beyond that the problems
Senator Bryden: The commission is to be comprised of three people -- one
nominated by the judiciary, one nominated by the Minister of Justice of
Canada, and a third, who will be the chairman, agreed upon by the first two.
As Senator Lawson and I know, in the real world people sometimes cannot agree
on who the third person will be. There is no provision in the bill for what
happens in that circumstance.
I asked the minister what would happen in such a case and her response was that
the first two people chosen would be fired and the process would start all
I presume that if one party -- presumably the government -- wanted to stonewall
the process, it simply would not agree to the chair.
Mr. Scott: That is interesting because most arbitration statutes provide that
in the event of a deadlock you apply to a judge -- which would be inappropriate
in this case.
Senator Bryden: That is my next point. To break a deadlock you apply to a judge,
and the judge would have some degree of interest in who is appointed as chair.
That is odd.
Mr. Scott: It is odd. The minister may be right. The minister could tell the
two persons who were appointed that if they cannot agree within 10 days, their
appointment will be revoked and two will be found who can agree.
Senator Bryden: The minister does not have the power to do that under the
statute. They would just have to come to some agreement.
If the judiciary continued to quash recommendations of the government to
Parliament, or if they had the ability to quash or find ultra vires under the
Constitutional a decision of Parliament, I assume that the status quo would
remain in place until a change was finally effected through legislation.
Therefore, it is not particularly in their interest to be totally unreasonable.
Senator Moore: They can still change the legislation.
Senator Bryden: That is right, but I am a little concerned in that this whole
issue basically grew out of judicial disobedience in P.E.I., where the
provincial court judges took the position that they could not handle these
cases because they were biased.
They were biased because the person who paid them was either reducing their pay
or was not prepared to increase it. Therefore, in any case where you had the
Crown, Regina, against Joe Blow, the judge might very well be prejudiced
against Regina and let the guy off. To my mind, that is judicial disobedience,
like civil disobedience. Finally, it bubbled up and the issue arrived here.
We are back at the arena of Senator Lawson and myself: Who has the most power?
Parliament has the ability to refuse to pass the legislation, and the judges
have the ability to say that, if that is true, they will not hear any cases.
Somehow we have to be sure to avoid those circumstances.
About the question of criteria, there are some criteria already established by
the courts. One of them we have not discussed because it does not happen very
often. To my knowledge, it has happened only in one case at the inferior
In the case of provincial judges, the Supreme Court declared a reduction of
salaries as invalid, as ultra vires. It forced the government to reimburse the
When we read the question of independence of judges, we must take into account
the fact that, in that case, we were concerned with the real problem because
there were some reductions of judges at the provincial level.
I do not know in which constitution this is found but I remember having read a
constitution that makes it impossible to reduce the salary of a judge. It is
unconstitutional right at the beginning. There is no such thing in our country,
but I guess we may infer from that that if there is a reduction, that is at
least strike two for the government because it seems, prima facie, to go against
the principle of the independence of the judiciary. What do you think?
Mr. Scott: I have two points on that. It is interesting that, in the P.E.I.
case, the court concluded that an across-the-board freeze is, theoretically, a
reduction. Because the cost of living is increasing, it is a reduction.
In the Beauregard case, the argument was that, after the judge's appointment, a
change in the law requiring contributory pensions was a reduction. Chief
Justice Dickson concluded that it was a reduction but it was a legitimate
reduction. That case came from the Quebec Court of Appeal. There had been a
bill in the house and, literally weeks after the judge's appointment, the law
was proclaimed to the effect that judges, who before had free pensions, now
had to make contributions. He interpreted that, not surprisingly, as a form of
reduction of his salary. He sued Her Majesty and it went through to the
Federal Court. He was successful at every level until the Supreme Court divided
and he lost.
The court concluded -- and this was really the beginning in Chief Justice
Dickson's notion of across-the-board, even-handed treatment. The conclusion
was that everybody contributes to his or her pension so why should not judges
contribute to theirs? They found there was nothing unconstitutional.
The argument was a constitutional one -- that salaries must be fixed and
provided and that it is inappropriate to reduce them. It was rejected. A
reduction without more is not necessarily, in contemporary terms, evidence of
Senator Beaudoin: There may be a case where it might be justified.
Mr. Scott: It might be justifiable. I think it is the juxtaposition. In an
interesting example, a bill was discussed in Arizona where, on the one hand,
there was a lot of talk about judges being out of control -- which is the way
it develops -- while, coincidentally, over here, there was a discussion about
the level of their income being too high. If these things are discussed at the
same time, it gives you pause and it is troubling. That is the kind of thing
where a reduction may be seen.
Senator Fraser: Almost identical to that, I have been sitting here brooding
about how this would play out in practice. I am really troubled by the notion
of giving a profession the right to, effectively, control its own pay when its
salaries are paid out of public money.
Senator Lawson: That is what MPs do.
Senator Fraser: MPs must go back to the public, which is why they get in such a
dither every time they have to think about a pay increase. Judges do not.
I was comforted by the observation of the chairman that, if we are talking
about salary increases, when a judge says no to a bill, he does not get any
increase at all. He is stuck with the status quo. However, when it comes to
reduction, I seriously wonder because then, if a judge says no to the bill, he
does not get a pay-cut. He gets to keep what he has.
I have enormous respect for judges but it seems to me that some of their wisdom
-- and the pension case you cited is one example -- goes out the window when
their own interests are at stake. There was a situation in Montreal a few
years ago where judges were actually arguing that, in order to preserve their
judicial independence, they had to continue to have indoor parking spots, free,
near the elevator.
Mr. Scott: Surely there must be more to the argument than that.
Senator Fraser: No, they were busy persons and did not want to have to walk the
length of the garage nor pay for the space.
You have outlined a couple of interesting elements that suggest that,
ultimately, the judiciary has come a long way, such as Justice Lamer's
reference to an across-the-board freeze being fair, in particular.
I am trying to find out whether, in our present state, we could reasonably
assume that, faced with cuts across the board, affecting everybody, in the
situation of deflation or of dire budgetary stringency where government needs
to reduce pay for everyone, the courts would sit still for that or stonewall.
Mr. Scott: I am confident that they would sit still now. I do not know that
they would have done so 10 years ago.
Senator Fraser: You think we have come that far?
Mr. Scott: Yes, I do.
Senator Fraser: You think we can read that into Justice Lamer's comments?
Mr. Scott: Yes. I do not have the language at hand, but he virtually says that.
If you have an across-the-board treatment that affects everyone based on
economic conditions, of course the judges would be required to accept it. It
Senator Fraser: Of course, but parking spots near the elevator also seems
self-evident to me.
The Chairman: Thank you, Mr. Scott, for your help. You have kept the ball in
Our next witness, Madame Lucie Laliberté, is a lawyer who has been doing
research on women and pensions over the past 13 years. Her practice is focussed
on family law. She is also the president of the Organization of Spouses of
Military Members and has presented briefs on their behalf to the Government of
the Province of Ontario, the House of Commons and the Senate Finance Committee.
Ms Laliberté asked to appear before this committee because many of the
proposed amendments in Bill C-37 are similar to those that she did research on
for Bill C-35 and she thought that her experience would be of value to the
committee, and the steering committee agreed.
Madame Laliberté, the floor is yours.
Ms Lucie Laliberté, Lawyer, Gahrns & Laliberté: I should like
to raise one preliminary matter that arose from my discussions with the clerk
before being allowed to appear here. I raised the issue that there is
litigation on this matter before the courts at this time, and the clerk of the
committee expressed some concern about that. For that reason I would like some
I propose not to deal with the substance or the merits of the case, but it does
relate specifically to the definition of "survivor benefit." I will
keep my remarks limited to those issues that are raised in the case and also
relate them to the issues that I found under Bill C-57.
Senator Beaudoin: Legally speaking, I do not see a big problem with this, if
you are simply giving us the information you have in mind. As a committee of
the Senate we have the right to hear witnesses. I understand your concern, but
if you are prudent in your presentation, I do not see any problem.
Ms Laliberté: My concern was with the fact that the way it was presented
to me, I might have declined to appear or I might have limited my presentation.
I am a lawyer, so I worked my way around that. I appreciate your comments.
I will be speaking only to the issues relating to pension division and death
benefits, including the survivor benefits in Bill C-57. I propose to start
with a brief general comparison of the main provisions of the public service
plans. The ones I am most familiar with are the CFSA, the RCMPSA and the PSSA,
as opposed to some of the others that are covered there. I will then make a
comparison with the Judges Act to show that the difference between the
legislation is so significant that it cannot be said that what is happening is
simply a harmonizing of those pieces of legislation.
The main point that I will be discussing is the fact that judges' pensions
cannot be divided at source. No credit splitting is allowed, as is the case in
all of the other pieces of legislation, including the Canada Pension Plan, and
that significantly affects the impact on the survivor benefits part.
Before I deal with the actual problems, I should like to provide a different
conceptual view of pensions as property and a contributory view of pensions as
opposed to a dependency view of pensions.
I should like to start with the structure of the public service plans,
specifically the three that I mentioned, first as they relate to marriage
A credit splitting provision is allowed in all of those pensions. That is done
pursuant to the Pension Benefits Division Act, which allows for an actuarial
valuation of the pension plan and a lump sum transfer out of the plan into a
locked-in RRSP for the spouse on marriage breakdown when it is done pursuant
to a court order or to an agreement between the parties. As far as I can see,
there is no such provision in the Judges Act.
There is also a provision in those pieces of legislation on marriage breakdown
to allow for garnishment of salaries, as well as diversion of pension for
support for children and spouses. The only thing I see in the Judges Act is
that pension can be diverted; there is not a garnishment of salary for the
purposes of support.
The next provision concerns what happens on death. In the public service plans
there is what is called a supplementary death benefit pursuant to section 2 of
the act. That is a declining term group life insurance benefit that is usually,
with some exceptions, equivalent to two years' pay, paid out in a lump sum on
the death of the member. That plan is contributory and the designation of the
beneficiary is at the member's pleasure. It must be made, however, on a proper
form. Situations have arisen where someone has designated a beneficiary in
either a will or a separation agreement and it has not been upheld by the
administrators of the plan.
It was originally designed to help defray the cost of funeral and other expenses
when a person died. It has now been expanded to be much more than that. I
relate this to section 46(1) of the Judges Act, but in the Judges Act it is
only one-sixth of the pay, and that is to go to a surviving spouse on death.
Under this amendment, there would not be a designation allowed. The
beneficiary would be stipulated by the act.
There is also a provision for an annual allowance or a survivor benefit, which
is generally 50 per cent of the pension benefit that is being paid or will be
paid. That is to go to a surviving spouse, which does include a common-law
spouse. However, the determination of who the surviving spouse is for the
annual allowance, the monthly benefit, is also made by the administrator and
not by the contributor. Contributors cannot designate who will receive the
annual allowance or the survivor benefit. That is done totally at the
discretion of Treasury Board, and we have been told that those decisions and
the criteria that are used are governed by cabinet secrecy because, in essence,
the legislation gives that power to the minister. We have had some difficulty
trying to find out what the criteria are.
I will say, though, that everything is defined by marital status on the death
of the contributor and there is actually a clause to prevent there being two
spouses. The first spouse can actually be deemed to be dead, to have
predeceased the contributor, in order to give the survivor benefit to the
common-law or second spouse.
We have been told by Treasury Board that they do not apply that any more, but
it used to be applied when the first spouse was separated and cohabiting with
someone else herself. They would then give the whole benefit to the person who
was cohabiting with the contributor. The law is still on the books. It is the
subject of a challenge right now but it is still in the discretion of Treasury
Board to do that.
Having said that, when deciding who the survivor is, they closely scrutinize
who is living with whom and what the marital status is of the parties.
Therefore, if a person is divorced, that person can never get the survivor
benefit. If there is a separation, one of the criteria is the length of time
the parties have been separated. If they have been separated for 10 years, no
matter who was there during the contribution period they would decide in
favour the common-law spouse.
There is also a definition of "surviving spouse" that is similar to
the proposed new definition. There is no definition of "spouse" in
the Judges Act and there is no definition of "surviving spouse."
Under the amendment, the definition of "surviving spouse" includes "common-law
spouse," but it really does not exclude "divorced spouse."
There has been testimony before you that it has been interpreted that way and
that divorced spouses can never receive the survivor benefit. That is the
subject of an ongoing challenge. I will discuss the reasons for that once I
have gone through the basic structure of the act.
There is also a minimum benefit to be paid out under all of these plans. That
minimum guarantees that five years of contributions will be paid to the
contributor. By that I mean that if a person dies after contributing to the
plan for 20 years, but not yet having started to collect a pension, the estate
can receive up to five years' worth of the benefit. If they were retired for
two years, for example, their estate is still entitled to three years' worth
of contribution, and that is integrated with any survivor benefits.
For example, if a spouse received a survivor benefit, or the children received
a survivor benefit, that is deducted from the five-year minimum before the
payout is actually given to the estate. As a further example, to clarify that,
if there is no survivor, there are no children, and the person dies one day
after retirement, the estate would get five years' worth of contributions.
This appears to be similar to section 51 of the Judges Act, but the judges
receive only a return of their contributions into the plan, if that happens.
The Canada Pension Plan also allows for credit splitting. There is a distinction
made in all of these plans between the pension benefit itself, which is deemed
to die with the contributor, and the survivor benefit, which is seen to be an
add-on, something extra that is different from the pension benefit itself.
That is very important because it causes problems later on when spouses
separate or divorce.
It is also a significant difference with the Judges Act, because when credit
splitting is not allowed it makes a real difference in determining the fairness
of who gets the survivor benefit.
Senator Moore: What do you mean by credit splitting?
Ms Laliberté: By that I mean that there is a lump sum paid directly out
of the plan. In the case of CPP, there is a lump sum value placed on the
benefit and it is prorated. That is put into an account for the non-member
spouse on marriage breakdown once there is an agreement or order of the court
on that marriage breakdown.
By credit splitting under the public service plan I mean that under the Family
Law Act the value of the pension is an asset to be divided between the parties.
In terms of a credit split, the Pension Benefits Division Act says that once
the Family Law Act has been applied and there is an agreement or an order in
place, then there is a enforcement mechanism.
Senator Moore: Which establishes the value of the asset to be distributed
between the two individuals, the former spouse and the current spouse.
Ms Laliberté: That is right, and that includes the division of all of
their property; the value of the pension, the value of severance pay, the value
of houses, cars and RRSPs -- whatever they have. You come up with a number at
the end. Then you can go to the pension plan itself and tell them to put a
certain lump sum amount into a locked-in RRSP for the other spouse. That is
what I mean by credit splitting.
The plan determines what the value of the plan is and, in order to maintain the
viability of the plan, they say that there is a maximum amount allowed to be
transferred out of it. If there is a shortfall, the spouses have to determine
how that shortfall will be met if they reach the maximum allowed under the
That is what I mean by credit splitting. There is also another way of doing
that, for which we argued previously but which was not done, and that is to
impose a trust on the plan, separate out the spouse's portion and give it to
her on a monthly basis when the pension comes into receipt. That has been
systematically rejected, but it would still seem to be a viable option and not
difficult administratively, because it is already done for purposes of
I should like to look quickly at the Family Law Act as well before I make the
links with this legislation. There has been some talk in previous testimony
that the common-law definition of "spouse" in the Family Law Act
applies to property divisions. It does not. It only applies to support.
It is not just a definition of three years. It can be less than three years if
there are children of the relationship and it is a relationship of some
permanence. It can be less than three years in the Family Law Act.
This also happens in a number of pieces of legislation where you can have two
different definitions. It happens in the Succession Law Reform Act as well,
where there is an extended definition of spouse there, under the dependency
provision that actually includes former spouse, as well as common-law spouse
and legal spouse.
I believe I have defined how the property division occurs already due to that
first question. I will move on to a concept of looking at pensions that is
different from what I have also heard in previous testimony, and that is not
looking at it as a dependency or as stereotypically something that is given as
a gift to someone.
The family law legislation regarding property and pensions in Ontario was
changed in 1986 to reflect the fact that marriage is a partnership and that a
pension is something that is earned by both parties. It is a deferred savings
plan that is earned by both of the parties throughout the contribution period.
That view of it was also supported in a Supreme Court of Canada decision called
Clark v. Clark, which said that Mr. Clark's pension was security for their
retirement. The wife's contribution to the marriage partnership enabled Mr.
Clark to maintain his employment and accumulate the pension benefits.
We are trying to have a shift in thinking. Pensions are earned over a long
period of time and all the legislation only looks at a specific point in time,
which is the contributor's time of death. In our view, that is where the
unfairness comes in, because if we start looking at it as something that the
spouse has earned throughout the partnership, then the way we view survivor
benefits as well will be very different.
Those are also some of the arguments that we have for a Charter argument under
section 15(6) discrimination because, in virtually all cases, it is the woman
who is the non-contributing spouse, particularly in the Canadian Forces. In
this, I am assuming with the judges, given the make-up of the courts right
If we are looking at it not as a dependency or as a gift but something that is
earned, then it will help when I define some of the unfairness and inequities
that still exist in the previous legislation that has been changed and that
may be implemented again under Bill C-57.
I also submit that having that view removes any moral dilemma, if you will, as
between common-law spouses and married spouses. If we look at it as something
earned during the contribution period, then it may be fair to divide credits
if a common-law spouse was there through the contribution period because she
was contributing to the earnings and it was that particular group whose income
was generating the pension ultimately.
I see problems in Bill C-57 in what is left out of it, as well as what is in
it. The very first problem is that there is no method of credit splitting and,
if there are no other assets on marriage breakdown, a divorcing spouse must
take the pension on what we call an if-and-when basis. That becomes very
hazardous to a divorced spouse. Previous witnesses have said that if spouses
are divorced, the wife can never get the survivor benefit. Since the pension
itself dies when the member dies, she loses her pension entitlements. If she
does not have proper insurance in place to protect her, she has lost all of
As an example, if you are looking at a high-ranking military officer, the value
of the pensions I have seen can be as high as $800,000. You could be talking
about $400,000 that should go to the ex-wife, and if he were to die the next
day she has no way of enforcing her entitlements.
The other problem with that is when the spouses are divorcing, if there is no
other way of enforcing that entitlement as between the two spouses, it causes
a dilemma for them upon divorce. With a judge's pension you are probably
looking at values of over $1 million if you have a long-term pension. If he
cannot come up with $500,000 to give her and there are no other assets, or the
assets only cover $250,000 of it, for example, in a matrimonial home, if he
dies and she cannot get the survival benefit, she has lost $250,000. That
severely affects her long-term viability financially, and it also shows why it
would be unfair then to split the survivor benefits in the way that this bill
Prior to 1986, when there was no credit splitting, or early on into the
legislation, sometimes the spouses were given the property entitlement as
support. Today we have credit splitting and it is now the subject of
litigation. Women either do not have the money to change their agreements to
make it property so that they can now do the credit splitting, or they expect
that they will be able to get the survivor benefit and they, sadly, find out
when the contributor dies that they have lost their support entitlements.
We also have members who divorced, for example, in 1978. Their support is still
intact but they were never given a share of the pension, though they were there
through the contribution period. That is why I am saying it is important to
look at it as something that was earned. In that case, you could look at it as
what we call a constructive trust. There is an unjust enrichment that goes on.
If she was there through the contribution period, she earned those pension
entitlements, on our argument. Now, when he dies, she does not get the survivor
benefits. That is an ongoing problem. There are fewer and fewer of those
women, but it is still happening.
We also have a situation where we have a divorced spouse suing a second spouse
-- right now there are several of them -- to get those survivor benefits. That
is ongoing. In our view, it is really unfair. She may already be destitute;
she has lost her support; she did not get the pension; she is often on social
assistance at this point, and she must litigate to get the survivor benefit.
In this particular situation, the second spouse has already separated and she
has her own pension as well, so she is getting the survivor benefit and her
own pension. The first spouse of 30 years is getting nothing and living off the
largess of her family actually, her children, at this point in time. That is in
spite of the fact that we have credit-splitting legislation right now.
The reverse of that is if there is a split of credits, or if the parties have a
way of splitting the pension between them. If that clean break has been made
and all those assets could buy out that share of the pension, then I would say
that the witnesses before you are correct. The apportionment through the
contribution period between a common-law spouse and a separated spouse may be
right, except that there is a problem in that there is a distinction. You can
get divorced after living separate and apart for one year, but you can sever
all the property and support issues. A divorced spouse who does not have her
pension entitlements cannot get the survivor benefits when the contributing
However, if the parties are just separated and already have an agreement or a
court order in place, the separated spouse can get an apportionment of survivor
benefits. That is a serious inequity, which already exists in the previous
legislation and will be put into this legislation as well, if it goes through
the way it is now designed.
I want to make one other point in terms of the differences, and I am not
absolutely positive on this particular point. I only found out that I was
appearing yesterday and I did not really know that this was happening on
survivor benefits until Friday. In terms of the interest rate for return of
contributions for judges, I am reading that as 4 per cent compounded yearly. My
understanding is that, in all the other plans, it is only 4 per cent simple
interest. That may have changed since our previous presentation, but that is
also a significant difference between the two plans. It does not directly have
an impact here, but it could in terms of valuing pensions for the purposes of
The Chairman: We believe that has been aligned to changes in the public service,
but that is a question we may have to ask.
Ms Laliberté: It should be checked.
Senator Murray: Ms Laliberté, have you turned your mind to the amendments
that would be needed to correct the deficiencies which you have outlined in
this bill? I do not mean a legal draft, but have you eyeballed the bill?
Ms Laliberté: First, we are trying to get a definition of "surviving
spouse" for the other pieces of legislation.
We do not want to go with an interpretation by the administrators of the plan
because, as I said, we do not have one. We have an extended definition of
surviving spouse that included "former spouse," the way we have in
the Ontario act regarding succession law reform.
It would be a start. You would still have a problem because you would have to
link that to whether there had previously been a division of the pension
There is something that I left out and it may be pertinent here. When a spouse
gets a lump sum transfer out of the Pension Benefits Division Act, the act
stipulates that she cannot get a survivor benefit. I would submit that is fair
because she has already got a split of the pension credit. You would have to
allow for that if you extended the definition of former spouse. It would have
to exclude a spouse if all the splits had been done fairly and there had been
a clean break between the spouses.
Senator Murray: As a layman, I have some difficulty with some of these terms.
What is a "former spouse"? A spouse from whom one is divorced?
Ms Laliberté: Yes. Also, if we are looking at this as earned benefits
between two people, which are shared on marriage breakdown, that could be a
common-law spouse. The Pension Benefits Division Act itself allows for a
credit split for common-law spouses and a period of cohabitation.
Senator Murray: Forgive me, but can you offer a definition of common-law spouse
or common-law union?
Ms Laliberté: No. That is because it depends on which statute you are
examining, if you want a statutory definition. If we are looking at "common-law,"
it is determined in each individual case. In determining who is a common-law
spouse and who is the spouse who will get the survivor benefit, they will look
at the bank accounts and whether they are shared. They ask if they take
vacations together. Are they sleeping together? Do they have children
Generally, if the courts are making that determination, they are looking at the
mode of living of the parties and how closely they fit a traditional definition
of legal spouse. They look at all of those things.
Senator Murray: It does not matter whether the parties to the common-law union
are both legally free to marry?
Ms Laliberté: No.
Senator Murray: That is not taken into account at all?
Ms Laliberté: No, it is not taken into account. That leads to all of the
newspaper articles about harems and that sort of thing. I think we can bypass
that by looking at the contribution period: Who was there through the
contribution period? Where it is fair, one can look at the work that was done,
the family funds that were used or of which the family was deprived.
If you always go back to that point and look at it as an earned benefit of both
spouses, not just the contributing spouse, you can bypass some of that.
However, you still must come up with definitions.
Senator Murray: It is not fair to ask you for free legal advice, but you have
come here and possibly you would provide to the chairman or to the clerk a
brief outline, without necessarily doing the drafting, of the changes that you
think would be necessary in this bill?
Ms Laliberté: I practise family law and I do not do much legislative
drafting. I draft agreements and that sort of thing. I believe Treasury Board
has already grappled with this issue and either did not want to, or could not
come up with, some definitions.
We are looking back historically over years, particularly with the Canadian
Forces, because they have had pension plans for the longest period as they
tried to recruit and retain personnel for brief periods of time. They would
disenfranchise a spouse if she was independently wealthy, way back. We need to
free ourselves from the old history on this, bring ourselves up-to-date in
I am prepared to do some of that but it is really difficult when you are dealing
with such an old concept, which still looks at who the spouses are and their
marital status on the day the judge dies. We are really still looking at
stereotypes. You are saying that the person he is with right now is the person
who should get all the benefits. Why is that?
We are focusing on "him" and it almost makes it look like there are
two women fighting over this. The reality is that we focus on the contributor.
It is the judge's benefit and the judge should get to decide who will receive
We are trying to shift away from that. Those are basically section 15 arguments.
Senator Murray: Have you looked at this bill in this context?
Ms Laliberté: Yes, I believe there are some section 15 Charter challenges
in Bill C-37 related to the survivor benefits. There is already one in
process based on the other legislation. What you are doing here, especially as
it relates to the definition of "surviving spouse," is entrenching
that. Everyone has been focusing on "common-law spouse," but I say
this relates to former spouses and the depriving of benefits from spouses who
were there for the whole contribution period.
Senator Joyal: I cannot resist the temptation to propose to you a specific case
and then to try to pin down the principles at stake. Examples are always
easier to understand.
Let us make the following case. A judge has a common-law spouse for, say, ten
years. He has children with the person and then they break up. He lives with a
person for one year, in a common-law situation. Who gets the money?
Ms Laliberté: Who gets the survivor benefit? I always want to be very
clear. We are not looking at the pension benefit. We are looking at the
survivor benefit. Under this legislation, in my view, the person who was there
for one year receives the survivor benefit.
Senator Joyal: The bill does not recognize the common-law situation while in
fact the judge may have had a "family" with the first person for 10
or 15 years. Of course, they are not legally bound in the ordinary concept of
marriage, even though they may have some financial responsibility to one
another for the child. For instance, that person would be totally deprived of
the benefit of the surviving spouse within the framework of this bill.
Ms Laliberté: Under family law legislation, she would not get a share of
the pension either, unless she could make a constructive trust argument of her
own that he would be unjustly enriched. That first person of 10 years could be
deprived of the pension benefit under family law and also deprived of the
survivor benefit under this bill, if it becomes law.
Senator Joyal: My point is well made. The principle now at stake is the one
that you stated in your opening remarks, namely, the test of dependency versus
the test of partnership.
This rang a bell in our ears because we heard from the minister last
week. She said that the department is reviewing the concept of "spouse"
in the family unit on the basis of dependency.
I am puzzled by that. I wonder if we are going backwards by returning to the
principle of dependency and not partnership, the way you have outlined it to
us. Could you expand on that so that we can profit from your experience in
your practice of law in that regard?
Ms Laliberté: I believe that it is a step backwards to have an overview
of the whole legislation based on dependency. Although you find that there is
a financial dependency, that is built up on the fact that you do not recognize
all the unpaid work that these spouses are doing throughout the contribution
period. That is where we moved ahead with family law legislation across all the
provinces to make that distinction. Although there was a financial dependency,
you did not want the person who was being paid for their labour getting all
the financial benefits of the marriage partnership when the marriage broke
down. The Supreme Court of Canada has spoken clearly on that in relation to
support. That is why the family law legislation was changed in the mid-1980s to
divide the value of the pensions assets.
Part of the problem is that survivor benefits have not been determined
to be an asset. There is one case where the judge declined to put a value on
the survivor benefit. To a certain extent, I see the reasoning in that decision
because the judge, in this case, will never see that benefit. They thought
they could not make that a benefit for the judge. It is possible that they
could make the argument that the survivor benefit is actually the property of
the spouse who is there throughout the contribution period. That has not been
done yet. It may not be something that will happen in the other pieces of
legislation because we have credit splitting. But, with the judges, you might
find women litigating that aspect of it in order to get the survivor benefit,
particularly if they have been deprived of the actual pension benefits
Senator Joyal: For me, the question of dependency does not put the two persons
on an equal footing. There is always someone who waits for someone else to do
something. This is contrary to equality on the spousal relationship. A spousal
relationship -- be it a same-sex relationship or a heterosexual relationship
-- whether or not they have children or both of them are billionaires, is an
equal kind of relationship. Anything that accrues to one partner should
benefit the other in the context of pension, even if they do not need the
pension, because the spouse might be richer than the person who has
contributed to the pension.
The question of dependency touches upon something that I have a
reluctance to envisage in the principles that I think are right. I might be
wrong, but that is how I see the situation.
Ms Laliberté: It is only support that is based on need and the ability
to pay. Assets are determined and equalized between the parties in family law.
It used to be that pensions and survivor benefits were based on need, but that
is not, and should not, be the case any more. That is what I see the minister
saying. I briefly read her comments and I feel that same apprehension. That is
a step in the wrong direction. We should be looking at an equal partnership
and then looking at the survivor benefits after that.
Senator Joyal: Should we be looking at them as assets?
Ms Laliberté: That is right.
Senator Joyal: That is an important concept at stake in defining the surviving
spouse. As you said, there is no definition of "surviving spouse"
contained in the other legislation that you studied.
Ms Laliberté: There is no definition of "surviving spouse" in
the Judges Act and they are adding something that already has no definition.
That is problematic. There is no definition of "spouse" there,
When you leave the interpretation to Treasury Board or to the administrators,
they have determined that the former spouse cannot be a surviving spouse. When
you do not have the definition, it works both ways. Sometimes it is good, but
in that case I think it is bad.
Senator Joyal: Do you think that the concept of assets underlined the principles
of what you think a pension is?
Ms Laliberté: Yes, and it also leaves too much discretion to the
administrators of the plan to decide who gets the benefits.
That is what happens if you do not have a definition. The administrators of the
plan will then decide who the surviving spouse is or what the rationale is
I did not say a lot about that lump sum benefit, but the judge has no
right to designate that. If there is no method of credit splitting, the spouse
is only protected, if he dies, through insurance and lump sum benefits. You
then preclude the parties from making an agreement between themselves that
would allow the wife to receive that benefit to protect her own pension
interests. It certainly is much more than what is needed for funeral expenses.
That adds to that.
Senator Lawson: It is obviously a complex question -- both the issue of
benefits and survivor benefits. We must proceed quite carefully concerning how
we deal with it.
Recently, I received a letter from the U.S. government that said, "You may
be entitled to social security benefits. Please report to the office." So
I did. I had lived partially in the U.S., so I was entitled to benefits under
social security. They said that they had to ask me a number of questions. I
said, "All right." They said, "Do you have any ex-wives?" I
said, "Is there a minimum number that you need to qualify for benefits?"
I phrased that rather badly, but our rules provide that if you have any
ex-wives who lived with you in marriage for more than 10 years, each one is
entitled to 50 per cent of the benefit you are receiving. Assuming your
benefit is $1,000 a month and you have four ex-wives, over a 40-year period
each one of them would receive $500 a month.
Ms Laliberté: You could quickly bankrupt the plan.
Senator Lawson: That is what I am saying. We are engaging in a dangerous area
here. We must examine it carefully. The issue of fairness that you raise is
very important. This may be a broader question that involves more than the
You mentioned the Canada Pension Plan, which is similar to social security. I
do not know if any of those rules apply. It is absent from any of the
provisions dealing with fairness, division, assets and beneficiaries. It seems
like a very complex question.
Ms Laliberté: This is a very complex question. Although the CPP is being
lumped in by the minister, it is very different again, in that there is
credit-splitting. Therefore, the first spouse can have her credit put into her
own account. Then it does not seem so bad if the common-law spouse of one year
receives the survivor benefit. However, it could be. I do not want to say
whether it is or is not, however, there are challenges to the survivor
benefits under the CPP going on right now as well.
Senator Lawson: Canada Pension limit the number of ex-wives that you can have?
Should there be a limit?
Ms Laliberté: For credit-splitting they prorate it.
Senator Moore: When you were speaking with respect to apportioning the annuity,
proposed section 44.1 (1) states that "... if there are two surviving
spouses ... each surviving spouse shall receive a share of the annuity
prorated in accordance with subsection (2) for his or her life."
Ms Laliberté: That is an addition, right. I would like to clarify that
this proposed section refers to marriage after the contribution period.
The Chairman: I do not believe so.
Ms Laliberté: That is right, it is not.
Senator Moore: In your remarks, you said that this bill is written such that
there is no apportionment for the first spouse.
Ms Laliberté: If they are divorced, the divorced spouse is out.
Senator Cools: Is excluded from this.
Ms Laliberté: That is what I meant. If they are just separated, there is
an apportionment. If they are divorced, there is not.
Senator Moore: That presumes that there is no separation agreement. It also
presumes that the court order dealing with the divorce action did not stipulate
Ms Laliberté: I do not think that is the case. That is the case for a
If the parties are divorced, even if there is no agreement or order in place
regarding the pension, that spouse cannot get the survivor benefit, whether or
not they have an agreement in place. A spouse who is separated, however,
whether or not they have an agreement in place, can get that apportionment of
the survivor benefit.
Senator Moore: Why is that? I am confused.
Ms Laliberté: There is no definition of surviving spouse, and the
administrators have determined that a divorced spouse cannot be a surviving
spouse, which is the subject of ongoing litigation with the other legislation
I am submitting that that could easily lead to a significant amount of
litigation here or inequities if the spouse cannot pursue the litigation.
Senator Moore: If the definition of surviving spouse included a former spouse
who has not received an apportionment under any other statute or a separation
agreement or a court order and divorce action, that would help you.
Ms Laliberté: It would help, but there is still a problem if there is no
credit-splitting and she is getting her share of the pension on a monthly
basis. If the spouse is divorced, she will lose her entitlement as soon as the
judge dies, and if she is divorced she cannot receive the survivor benefit.
Therefore, it helps but it does not go far enough.
Senator Moore: You said in your closing remarks that with respect to the lump
sum benefit the judge has no right to designate the beneficiary. Did you mean
he should not have the right?
Ms Laliberté: I am saying he should have the right.
Senator Moore: If he does not have the right, why?
Ms Laliberté: Under this amendment he would. He may now, however, I can
come back and clarify some points. On my reading of the amendment, the statute
says that it will go to the common-law spouse of one year.
The previous legislation did not designate who it was; it just said "surviving
spouse." I do not know if it was the judge who would designate it or if
it was the administrator of the plan under the Judges Act. I know that under
the Canadian Forces legislation, for example, it is up to the member to
designate who receives the lump sum benefit but not the survivor benefit.
I know it gets confusing. The member designates not the monthly benefit but the
lump sum life insurance one-time payment. That allows the parties, when they
are negotiating their separation agreement, to protect a spouse vis-à-vis
pension entitlements and support entitlements in the event of the death of
the other spouse.
Senator Moore: Turning to page 6, clause 9, a surviving spouse is not entitled
to receive an annuity under this section if the surviving spouse has waived
his or her entitlement to the annuity under a separation agreement entered
into in accordance with applicable provincial law.
Should we be adding there "or in accordance with a court order or a divorce
action between the parties"? I do not see any references here to divorce
orders in divorce actions. We see mention of separation agreements.
Ms Laliberté: If you refer to separation agreements, normally you also
include court orders.
I have another problem with that. Generally, that is not a provision of orders,
you do not even look at the survivor benefit. My experience has been that
administrators of the Public Service plan do not give effect to agreements
between parties, court orders or wills when people are dealing with their
Therefore, I had some concerns when I read this clause that the administrators
may have to, now that it has been included; however, it is not something that
is generally looked at when parties are separating and drafting agreements. I
am not sure where it comes from, but I would say that if you were doing it by
agreement, you should include court orders, because the two go hand in hand.
Senator Moore: At the top of page 8, clause 11, which deals with one-sixth lump
sum, you are calling this the survivor benefit, right?
Ms Laliberté: No, this is a lump sum benefit.
Senator Moore: I am getting confused with the pension benefit and survivor
Ms Laliberté: It is confusing. This one is a lump sum payment separate
from the survivor benefit.
It says, "...if a judge dies while holding office." I do not know what
happens if the judge is not holding office. There is a different death benefit
in the Judges Act, which is not referred to here. This looks like a benefit
of a lump sum if the judge dies while in office, and that is the one that is
designated in the statute to go to a surviving spouse.
Senator Moore: Would it be helpful if that proposed section included a phrase
whereby each surviving spouse would receive a share of that lump sum in a
prorated manner similar to what is in section 44?
Ms Laliberté: I suggest that that would be better than what is here, but
the wording of this should be changed to allow the judge to designate who
would get that lump-sum benefit in order to allow for what I spoke of earlier,
which is protection for reasons other than just funeral expenses.
Senator Sparrow: They should be allowed to designate an individual or his
Ms Laliberté: Yes, and they could do that by contract. It would be left
to the judge and the spouses to determine who that would be on a breakdown.
That would allow them to order their agreements on marriage breakdown as well
as to protect the person who needed the protection or who was entitled to the
Senator Lawson: We receive a statement every year that talks about the death
benefit and asks who the designee is. I do not know why it would be different
Ms Laliberté: On the survivors' death benefit, although you can
designate, you can only designate it on the specific form. Treasury Board has
overridden giving the supplementary death benefit to someone who has been
designated in a will or in a separation agreement. I would think that you
would want to avoid that.
Senator Cools: I was very impressed by this witness's testimony. I wish to
thank her. Apparently she has been working on this subject matter in respect
of wives of people in the military. I thought that on such short notice she
put together a remarkable presentation.
The Chairman: You have certainly demonstrated your intimate knowledge of your
field. I thank you for coming and sharing it with us. As a consequence, I
believe we will have many more questions to consider.
Ms Laliberté: Thank you for inviting me.
The committee adjourned.