Newfoundland (Treasury Board) v. N.A.P.E.

Newfoundland (Treasury Board) v. N.A.P.E.
Collection
Supreme Court Judgments
Date
2004-10-28
Neutral citation
2004 SCC 66
Report
[2004] 3 SCR 381
Case number
29597
Judges
McLachlin, Beverley; Major, John C.; Bastarache, Michel; Binnie, William Ian Corneil; LeBel, Louis; Deschamps, Marie; Fish, Morris J.
On appeal from
Newfoundland and Labrador
Subjects
Constitutional law
Notes
SCC Case Information: 29597
Decision Content
Newfoundland (Treasury Board) v. N.A.P.E., [2004] 3 S.C.R. 381, 2004 SCC 66
Newfoundland and Labrador Association of Public and
Private Employees Appellant
v.
Her Majesty The Queen in Right of Newfoundland as represented
by the Treasury Board and the Minister of Justice Respondent
and
Attorney General of Quebec, Attorney General of New
Brunswick, Attorney General of British Columbia, Attorney
General of Alberta, Canadian Association for Community
Living, Canadian Hearing Society, Council of Canadians with
Disabilities, Hospital Employees’ Union, British Columbia
Government and Service Employees’ Union, Health Sciences
Association, Women’s Legal Education and Action Fund,
and Canadian Labour Congress Interveners
Indexed as: Newfoundland (Treasury Board) v. N.A.P.E.
Neutral citation: 2004 SCC 66.
File No.: 29597.
2004: May 12; 2004: October 28.
Present: McLachlin C.J. and Major, Bastarache, Binnie, LeBel, Deschamps and Fish JJ.
on appeal from the court of appeal for newfoundland and labrador
Constitutional law — Charter of Rights — Equality rights — Gender discrimination — Pay equity — Pay equity agreement signed in favour of female employees in health care sector — Whether s. 9 of Public Sector Restraint Act deferring commencement of wage adjustment payments infringes right to equality — If so, whether infringement justifiable — Canadian Charter of Rights and Freedoms, ss. 1 , 15(1) — Public Sector Restraint Act, S.N. 1991, c. 3, s. 9.
Constitutional law — Charter of Rights — Reasonable limits — Oakes test — Separation of powers — Whether explicit recognition of separation of powers doctrine should be added to Oakes test — Canadian Charter of Rights and Freedoms, s. 1 .
In 1988, the government of Newfoundland and Labrador signed a Pay Equity Agreement in favour of female employees in the health care sector including those represented in collective bargaining by the appellant union. In 1991, the same government introduced the Public Sector Restraint Act, which deferred from 1988 to 1991 the commencement of the promised pay equity increase (s. 9) and extinguished the 1988-91 arrears. The effect of s. 9 was to erase an obligation the Province had for approximately $24 million. The justification was that the government was experiencing a financial crisis unprecedented in the Province’s history. The government adopted other severe measures to reduce the Province’s deficit, including a freeze on wage scales for public sector employees, a closure of hospital beds, and a freeze on per capita student grants and equalization grants to school boards. It also laid off almost two thousand employees and terminated medicare coverage for certain items. Grievances were filed on behalf of some female employees affected by the cut to pay equity. The Arbitration Board ordered the government to comply with the original terms of the Pay Equity Agreement, holding that s. 9 of the Act infringed s. 15(1) of the Canadian Charter of Rights and Freedoms and that the infringement could not be saved under s. 1 . On judicial review, the motions judge quashed the Board’s decision and dismissed the grievances. He agreed that s. 9 infringed s. 15(1) but found the infringement justifiable under s. 1 . The Court of Appeal upheld the motions judge’s decision. In so doing, one appeal judge suggested that explicit recognition of the separation of powers doctrine should be added to the s. 1 test.
Held: The appeal should be dismissed. Section 9 of the Public Sector Restraint Act is constitutional.
When the provincial government signed the Pay Equity Agreement in 1988, it changed the legal landscape by creating enforceable contractual rights to end pay discrimination by a procedure contractually binding on all of the parties. This process converted pay equity from a policy argument into an existing legal obligation for the benefit of the female hospital workers. The purpose of the Public Sector Restraint Act was to reduce the women’s pay below this contractual entitlement and its intended effect was to continue to pay women less than was paid to men for work of equal value. Passage of the Act on April 18, 1991 put women hospital workers in a worse position than they were on April 17, 1991.
The contextual factors listed in Law lead to the conclusion that the targeting of an acquired right to pay equity amounted to discrimination within the meaning of s. 15(1) of the Charter . First, a pre-existing disadvantage is shown since “women’s jobs” are chronically underpaid and the Act perpetuated and reinforced the idea that women could be paid less for no reason other than the fact that they were women. Second, the postponement of pay equity did not correspond to the actual needs, capacity or circumstances of the claimants. Indeed, it did just the opposite. Third, the Act did not have an ameliorative purpose in relation to the workforce. Fourth, since work is an important part of life, the interest affected by the Act was of great importance. In sum, s. 9 of the Act affirmed a policy of gender discrimination which the provincial government had itself denounced three years previously.
Section 9 of the Public Sector Restraint Act is justifiable under s. 1 of the Charter . The need to address the fiscal crisis was a pressing and substantial legislative objective in the spring of 1991. The crisis was severe. The cost of putting pay equity into effect according to the original timetable was a major expenditure. A lower credit rating, and its impact on the government’s ability to borrow, and the added cost of borrowing to finance the provincial debt, were matters of great importance. Moreover, the government was debating not just rights versus dollars, but rights versus hospital beds, layoffs, jobs, education and social welfare.
Courts will continue to look with strong scepticism at attempts to justify infringements of Charter rights on the basis of budgetary constraints. To do otherwise would devalue the Charter because there are always budgetary constraints and there are always other pressing government priorities. Nevertheless, the courts cannot close their eyes to the periodic occurrence of financial emergencies when measures must be taken to juggle priorities to see a government through the crisis.
The government’s response to its fiscal crisis was also proportional to its objective. First, as the pay equity payout represented a significant portion of the budget, its postponement was rationally connected to averting a serious financial crisis. Second, the government’s response was tailored to minimally impair rights in the context of the problem it confronted. Despite the scale of the fiscal crisis, the government proceeded to implement the pay equity plan, albeit at a slower pace. In addition, the government initiated a consultation process with the union to find alternative measures. There were broad cuts to jobs and services. The exceptional financial crisis called for an exceptional response. In such cases, a legislature must be given reasonable room to manoeuvre. Third, on a balance of probabilities the detrimental impact of a delay in achieving pay equity did not outweigh the importance of preserving the fiscal health of a provincial government through a temporary but serious financial crisis. The seriousness of the crisis, combined with the relative size of the $24 million required to bring pay equity in line with the original schedule, are the compelling factors in that respect. The fiscal measures adopted by the government did more good than harm, despite the adverse effects on the women hospital workers.
While the separation of powers is a defining feature of our constitutional order, it cannot be invoked to undermine the operation of a specific written provision of the Constitution like s. 1 of the Charter . Section 1 itself reflects an important aspect of the separation of powers by defining certain express limits on legislative sovereignty. Judicial review of governmental action long predates the adoption of the Charter . Since Confederation, courts have been required by the Constitution to ensure that legislatures comply with the division of legislative powers. The Charter has placed new limits on government power in the area of human rights, but judicial review of those limits involves the courts in the same role in relation to the separation of powers as they have occupied from the beginning, that of the constitutionally mandated referee. It is not the courts which limit the legislatures. It is the Constitution.
The doctrine of separation of powers is an important concern, but the Oakes test, which is itself based on the text of s. 1 , provides the proper framework in which to consider what the doctrine requires in situations where legislative action is alleged to come into conflict with entrenched constitutional rights. The suggestions that the onus be transferred to an applicant to show that the exercise of the claimed Charter right is reasonable, that the Court exempt legislation embodying “policy initiatives” from Charter review, and that the Court decline to consider what, if any, less infringing measures were available to the legislature to achieve its policy objectives, must all be rejected.
Cases Cited
Referred to: R. v. Oakes, [1986] 1 S.C.R. 103; Reference re Canada Assistance Plan (B.C.), [1991] 2 S.C.R. 525; Ferrel v. Ontario (Attorney General) (1998), 42 O.R. (3d) 97; Reference re Public Service Employee Relations Act (Alta.), [1987] 1 S.C.R. 313; Law v. Canada (Minister of Employment and Immigration), [1999] 1 S.C.R. 497; R. v. Big M Drug Mart Ltd., [1985] 1 S.C.R. 295; Dagenais v. Canadian Broadcasting Corp., [1994] 3 S.C.R. 835; R. v. Find, [2001] 1 S.C.R. 863, 2001 SCC 32; McKinney v. University of Guelph, [1990] 3 S.C.R. 229; Reference re ss. 193 and 195.1(1)(c) of the Criminal Code (Man.), [1990] 1 S.C.R. 1123; R. v. Heywood, [1994] 3 S.C.R. 761; Canada (Auditor General) v. Canada (Minister of Energy, Mines and Resources), [1989] 2 S.C.R. 49; Reference re Remuneration of Judges of the Provincial Court of Prince Edward Island, [1997] 3 S.C.R. 3; Nova Scotia (Workers’ Compensation Board) v. Martin, [2003] 2 S.C.R. 504, 2003 SCC 54; Singh v. Minister of Employment and Immigration, [1985] 1 S.C.R. 177; R. v. Lee, [1989] 2 S.C.R. 1384; Schachter v. Canada, [1992] 2 S.C.R. 679; Figueroa v. Canada (Attorney General), [2003] 1 S.C.R. 912, 2003 SCC 37; PSAC v. Canada, [1987] 1 S.C.R. 424; M. v. H., [1999] 2 S.C.R. 3; Egan v. Canada, [1995] 2 S.C.R. 513; Operation Dismantle Inc. v. The Queen, [1985] 1 S.C.R. 441; Eldridge v. British Columbia (Attorney General), [1997] 3 S.C.R. 624; R. v. Edwards Books and Art Ltd., [1986] 2 S.C.R. 713; Irwin Toy Ltd. v. Quebec (Attorney General), [1989] 1 S.C.R. 927; RJR-MacDonald Inc. v. Canada (Attorney General), [1995] 3 S.C.R. 199; Vriend v. Alberta, [1998] 1 S.C.R. 493.
Statutes and Regulations Cited
Canadian Charter of Rights and Freedoms, ss. 1 , 15(1) .
Public Sector Restraint Act, S.N. 1991, c. 3 [rep. & sub. 1992, c. P-41.1], ss. 5, 9.
Authors Cited
Abella, Rosalie Silberman. “Employment Equity” (1987), 16 Man. L.J. 185.
Morgan, Edmund M. “Judicial Notice” (1944), 57 Harv. L. Rev. 269.
Newfoundland. House of Assembly. Preliminary Report (Hansard), 41st General Assembly, 3rd Sess., vol. XLI, No. 11, March 19, 1991.
APPEAL from a judgment of the Newfoundland and Labrador Court of Appeal (2002), 221 D.L.R. (4th) 513, 220 Nfld. & P.E.I.R. 1, 657 A.P.R. 1, 103 C.R.R. (2d) 1, 2003 CLLC ¶230-019, [2002] N.J. No. 324 (QL), 2002 NLCA 72, affirming a decision of the Newfoundland Supreme Court, Trial Division (1998), 162 Nfld. & P.E.I.R. 1, 500 A.P.R. 1, 51 C.R.R. (2d) 323, [1998] N.J. No. 96 (QL). Appeal dismissed.
Sheila H. Greene and Paula M. Schumph, for the appellant.
Donald H. Burrage, Q.C., and Justin S. C. Mellor, for the respondent.
Isabelle Harnois, for the intervener the Attorney General of Quebec.
Written submissions only by Gaétan Migneault, for the intervener the Attorney General of New Brunswick.
George H. Copley, Q.C., and Neena Sharma, for the intervener the Attorney General of British Columbia.
Roderick Wiltshire, for the intervener the Attorney General of Alberta.
William Holder and Lesli Bisgould, for the interveners the Canadian Association for Community Living, the Canadian Hearing Society, and the Council of Canadians with Disabilities.
Joseph J. Arvay, Q.C., and Catherine J. Parker, for the interveners the Hospital Employees’ Union, the British Columbia Government and Service Employees’ Union, and the Health Sciences Association.
Karen Schucher and Fiona Sampson, for the intervener the Women’s Legal Education and Action Fund.
Mary Cornish and Fay C. Faraday, for the intervener the Canadian Labour Congress.
The judgment of the Court was delivered by
1 Binnie J. _ In this appeal, the Court is required to consider what sort of government fiscal crisis is sufficient (if any) to justify limiting a right or freedom guaranteed by the Canadian Charter of Rights and Freedoms . The appellant union says cost considerations can never amount to such a justification. Therefore, scheduled progress towards pay equity should not have been sacrificed as it was in the Province’s fiscal crisis that arose in the spring of 1991. The respondent government replies that the Court should not second-guess budgetary allocations made by the House of Assembly in the severe and unanticipated financial emergency occurring at that time. Marshall J.A. of the Court of Appeal of Newfoundland and Labrador was not only persuaded by the government’s position on the facts but went on to argue that the jurisprudence under s. 1 of the Charter should be rewritten to explicitly require compliance with the doctrine of the separation of powers at every step of the way. Thus rewritten, he concluded, the even greater measure of judicial deference to legislative and executive choices that he advocates would allow the law at issue in this case to be justified.
2 In my view, the separation of powers has been a preoccupation of the s. 1 jurisprudence in general, and it was a pivotal concern in R. v. Oakes, [1986] 1 S.C.R. 103, in particular, as will be discussed. I do not agree with Marshall J.A., with respect, that the present s. 1 jurisprudence fails to reflect the words of s. 1 . Accordingly, while I agree in the result with Marshall J.A., I reach that conclusion by a more orthodox route.
3 On June 24, 1988, the provincial government signed a Pay Equity Agreement in favour of female employees in the health care sector including those represented in collective bargaining by the appellant. Less than three years later, before any money had actually flowed to the intended recipients, the same government introduced legislation to defer the commencement of the promised increase for three years until 1991. The justification was that the government’s budgetary deficit had unexpectedly ballooned to the point where the provincial credit rating on international money markets was at risk. The House of Assembly enacted the bill retroactive to March 31, 1991 as the Public Sector Restraint Act, S.N. 1991, c. 3 (the “Act”), continued by S.N.L. 1992, c. P-41.1. The appellant union contends that the Act singled out female hospital workers for budget cuts that amounted to discriminatory treatment contrary to s. 15(1) of the Charter . The courts in Newfoundland agreed that the effects of the Act were discriminatory, but that in light of the fiscal crisis then confronting the provincial government, the measure could be justified under s. 1 of the Charter . As stated, I agree with that conclusion and would dismiss the appeal.
I. Facts
4 The collective agreements that had been in force between the government and the public sector unions for a number of years included a prohibition against discrimination on the ground of sex (art. 4.01). Despite this provision, the parties had negotiated collective agreements from year to year which, they eventually acknowledged, paid female-dominated work classifications less than was paid to male-dominated classifications for work of equal value. There had been in existence, the government agreed on June 24, 1988, systemic discrimination. The resulting Pay Equity Agreement between the government and the major public sector unions, including the appellant, did not itself achieve pay equity, but laid out a process and methodology for its implementation. The intention was to begin the pay equity process in the hospital sector and in Newfoundland Hydro, but eventually to “bring in pay equity in all segments” of the provincial public service (Newfoundland Preliminary Report (Hansard), Vol. XLI, No. 11, March 19, 1991, at p. 363).
5 Under the scheme of the Pay Equity Agreement, the first wage adjustment was to be made effective April 1, 1988, and thereafter the adjustments would come in increments over a period of four years at a rate per year not exceeding 1 percent of the 1987 payroll for each job “grouping” as defined therein. The full balance to achieve pay equity was to be paid out in the fifth year, on April 1, 1992. The agreement established a Pay Equity Steering Committee for the hospital sector with a membership that included equal representation from the unions and government.
6 The complex task of evaluating work of equal value across different job classifications, and working out the wage adjustments necessary to achieve equity, took longer than anticipated. Eventually, on March 20, 1991, the financial analysis was complete. The government estimated the immediate cost at that date of implementation of the initial stages of pay equity in the health care sector at $24 million.
7 At the time these cost estimates were received, the provincial government was experiencing what the President of the Treasury Board said was a financial crisis unprecedented in the Province’s history. Existing and projected budgetary deficits had risen to the point where the Province’s credit rating in financial markets was seriously at risk. He told the House of Assembly:
For the first time in our history we are faced with the prospect of having a limitation on what we can borrow . . . We could not take the chance that our credit rating would drop one more notch.
. . .
We were facing a horrendous problem that had to be dealt with for the sake of the people of the Province.
(Hansard, supra, at pp. 359 and 361)
8 The House of Assembly responded on April 18, 1991 with passage of the Public Sector Restraint Act, that was made retroactive by about three weeks to the Province’s fiscal year end, being March 31, 1991.
9 Section 5 of the Act purported to freeze the wage scales of all public sector employees, from cabinet ministers to hospital workers, for one year, later extended to March 31, 1993. (An exception was made for increases to individual wages on account of step progression within a job classification or reclassification.) Pay equity was in part exempted from the freeze. It would still be implemented but the first adjustment was delayed to March 31, 1991 instead of April 1, 1988. It was provided that nothing would be paid on account of the three-year period from April 1, 1988 through to March 31, 1991. The effect of the Act, according to the President of the Treasury Board, was that “it erases an obligation we had there of approximately $24 million” (Hansard, supra, at pp. 362-3 (emphasis added)).
10 Eventually the government and the union (without prejudice to the union’s position in this litigation) agreed that instead of the contemplated five-year payout the pay equity objective would be implemented by a series of adjustments not exceeding 2 percent of individual salaries each year until pay equity as between male and female employees was achieved.
11 In April 1991, grievances were filed on behalf of some affected employees in respect of matters including non-payment of the pay equity wage adjustments. The parties subsequently agreed to proceed only with the grievances concerning pay equity.
II. Relevant Legislation
12 Public Sector Restraint Act, S.N. 1991, c. 3
9. (1) Notwithstanding the terms and conditions of a pay equity agreement contained in a collective agreement or added by agreement to an existing collective agreement, no pay equity agreement shall contain a provision which implements that pay equity agreement retroactively.
(2) Where there is a provision in a pay equity agreement which provides that the pay equity agreement shall be implemented retroactively, that provision is void.
(3) Notwithstanding the other provisions of this Act, a pay equity agreement may be negotiated or implemented, but the 1st pay equity wage adjustment date shall be the date on which the pay equity wage adjustment is agreed upon.
(4) This section applies whether the pay equity agreement is reached or the pay equity wage adjustment date is agreed upon before or after the date this Act comes into force.
(5) In this section “pay equity agreement” means an agreement between a public sector employer and a group of public sector employees to recognize the compensation practice which is based primarily on the relative value of the work performed, irrespective of the gender of employees, and includes a requirement that no employer shall establish or maintain a difference between compensation paid to male and female employees, employed by that employer, who are performing work of equal or comparable value.
III. Judicial History
A. Arbitration Board (D. L. Alcock, Chair; J. Sack, Q.C., and R. S. Noseworthy, Q.C., Members), April 4 and 14, 1997
13 The Board held that as the Pay Equity Agreement of June 24, 1988 had been incorporated into the relevant collective agreements, the Board had jurisdiction to deal with the grievances.
14 The effect of s. 9(1) of the Public Sector Restraint Act was to eliminate the “retroactive” benefit of three months between the date the Pay Equity Agreement was signed (June 24, 1988) and the beginning of fiscal year 1988-89 on April 1, 1988. More significantly, the Board noted the date of the initial adjustment (i.e., increase) would be delayed from April 1, 1988 to March 31, 1991, and the workers’ entitlement to arrears for the 1988-91 period was wiped out (or, as the President of the Treasury Board said, “erased”).
15 The Board was unanimous that the Act infringed s. 15(1) of the Charter because the “government knew that s. 9 would have an adverse economic impact on females who had been subjected to widely recognized gender discrimination” (p. 86). The government had undertaken, in the Pay Equity Agreement, to address what it had agreed was discrimination, and the House of Assembly could not, without infringing s. 15(1) , nullify by legislation the agreed-upon remedial plan. The Board wrote, at p. 87:
By curtailing the adjustments required under the Pay Equity Agreement, s. 9 of the Public Sector Restraint Act disproportionately and adversely affected female employees working in the public sector by depriving them of the benefit of pay equity in comparison with employees in male-dominated job classifications who are paid in accordance with the value of their work.
16 As to the government’s attempt to justify the infringement of equality rights, the Board agreed that “the objective of the Public Sector Restraint Act was to reduce an escalating deficit in circumstances where the financial health and well-being of the Province was at stake” (p. 96). The Board stated:
The money sought to be saved would result from the reduction of expected collective bargaining expenditures. Most would be saved by wage restraint. The remainder (some $24 million in Mr. Baker’s estimation) would have to come from a group of women suffering systemic gender discrimination who were awaiting that amount of money as partial redress for that discrimination.
17 While pay restraint was rationally connected to solving the Province’s financial dilemma, a majority of the Board found that the Public Sector Restraint Act could not be saved under s. 1 because the government had failed to demonstrate it had examined less drastic or less unfair means of solving its fiscal problems such as unpaid leave, job sharing, early retirement or reduced employees pension contributions in respect of all public sector employees. The majority decision of the Arbitration Board therefore declared s. 9 of the Public Sector Restraint Act to be void and ordered the government to comply with the original terms of the Pay Equity Agreement.
18 The government nominee, Ronald S. Noseworthy, Q.C., in a partial dissent, agreed that the Public Sector Restraint Act infringed s. 15(1) of the Charter because it singled out female-dominated work classifications for adverse impact by denying them the 1988-91 pay equity adjustments. However, in his view the Act was legislation “of an emergency nature” and was saved under s. 1 . It was rationally connected to the pressing and substantial objective of putting the Province’s finances in order. It also met the proportionality test. Other measures could have been taken but a “high degree of deference” is owed to the House of Assembly “when they are allocating scarce resources amongst competing groups” (p. 132). In his view, the Public Sector Restraint Act was valid legislation and the grievances should therefore be dismissed.
B. Newfoundland Supreme Court, Trial Division (1998), 162 Nfld. & P.E.I.R. 1
19 On judicial review, Mercer J. agreed that s. 9 of the Act infringed s. 15(1) of the Charter because it “had an adverse economic impact upon a class of employees which Government had recognized as the victims of systemic gender discrimination” (para. 55). The impact was particularly significant for employees who retired, were injured on the job or received severance pay between April 1, 1988 and March 31, 1991, because they entirely lost the pay equity benefit to which they were entitled. “Section 9 therefore constituted the statutory basis for the continuance of gender discrimination past the date when Government was obliged to eliminate it” (para. 55).
20 With respect to s. 1 of the Charter , Mercer J. considered that in a period of severe fiscal restraint the objective of reducing expenditures was sufficiently important to justify a limitation on the s. 15(1) Charter right. Section 9 of the Act eliminated the payment of pay equity adjustments for the 1988-90 fiscal years. The necessary rational connection to the objective had therefore been established.
21 With respect to the proportionality of the legislative response, Mercer J. held that the courts should accord a measure of deference to the legislature when that body responds to social problems, including the resolution of competing rights between different sectors of society. The $24 million saved by the deferral of the pay equity adjustments was part of a larger $200 million fiscal problem. To address that problem the government had considered various alternatives such as borrowing, tax increases, budget freezes and reductions in government expenditures. The union had agreed from the outset that pay equity could properly be put into effect by incremental adjustments. The effect of the Act was to defer, not repudiate, implementation of the Pay Equity Agreement. In Mercer J.’s view the Act did not have a disproportionately severe effect upon the affected group of female hospital workers in relation to the broader benefits achieved by fiscal restraint for the Province as a whole.
22 Mercer J. therefore quashed the majority decision of the Board and dismissed the grievances.
C. Newfoundland Court of Appeal (2002), 221 D.L.R. (4th) 513, 2002 NLCA 72
23 Marshall J.A. agreed that s. 9 had a discriminatory effect, and concurred with the motions judge’s conclusion that the Arbitration Board was correct in its unanimous holding that s. 9 of the Public Sector Restraint Act infringed equality rights guaranteed under s. 15(1) of the Charter . Although, in his view, the government was under no constitutional obligation to have addressed the problem of pay discrimination in the first place, once it did so it was not open to the government to revoke its commitment without infringing s. 15(1) .
24 With respect to justification, Marshall J.A. held that s. 1 of the Charter must be “harmonized with the Separation of Powers Doctrine by foreclosing the potential for the judiciary to assume the role of final arbitrator of the correctness of policy initiatives within the purview of the political branches of government” (para. 351).
25 Since, in his view, the Oakes proportionality requirements courted a risk of putting the judiciary in the shoes of the other branches of government as ultimate arbitrator of which policy choices were in the best interests of the people of the province, Marshall J.A. suggested, at para. 365, that explicit recognition of the separation of powers doctrine should be added to the s. 1 test:
There is a need, then, to revisit those three gateways to proportionality [set out in Oakes], and if not to completely reframe them, at least to oil their hinges to assure they swing in harmony with the Separation of Powers.
26 In his view, the sheer magnitude of the severe financial situation presented by the prospect of burgeoning fiscal deficits in early 1991 demonstrated that the reduction and containment of fiscal deficits was an urgent, pressing and substantial objective. Fiscal restraint was rationally connected to that objective. A perusal of the “extended budgetary explanation” in Hansard provided ample support for the motion judge’s conclusion that the government had considered various alternatives such as borrowing, tax increases, budget freezes and reduction in government expenditures.
27 The fact that the impugned legislation delayed pay equity implementation rather than eliminating it showed that “reasonable effort” had been made to minimize the infringement. The deleterious effects of limiting constitutionally protected equality rights were outweighed by the pressing and substantial objective of containing and reducing the forecasted budgetary deficits.
28 “Swinging in harmony” with the separation of powers doctrine required judicial deference to the policy choices adopted by the elected representatives to address communal or societal needs.
IV. Constitutional Questions
29 On October 29, 2003, the Chief Justice stated the following constitutional questions:
1. Does s. 9 of the Public Sector Restraint Act, S.N. 1991, c. 3, infringe s. 15(1) of the Canadian Charter of Rights and Freedoms ?
2. If so, is the infringement a reasonable limit prescribed by law as can be demonstrably justified in a free and democratic society under s. 1 of the Canadian Charter of Rights and Freedoms ?
To which the appellant adds a supplementary question:
3. Did the Court of Appeal err in adding a further step to the section 1 analysis, namely a requirement for the Court to determine explicitly at each stage whether the separation of powers doctrine has been offended?
V. Analysis
30 Pay equity has been one of the most difficult and controversial workplace issues of our times. There is no doubt that in the 1980s women hospital workers in Newfoundland and Labrador (and elsewhere) were being paid less than men for work of equal value. By 1988, it had become a significant collective bargaining issue between the provincial government and the public sector unions.
31 The Pay Equity Agreement signed on June 24, 1988 was a major achievement. No doubt it was bought by the public sector unions with concessions on other fronts. Progress on such an important issue, once achieved, should not be lightly set aside. Yet, the effect of the Public Sector Restraint Act was not only to shift the start of the provincial government’s pay equity adjustments from 1988 to 1991, but to eliminate any liability for amounts otherwise payable to the underpaid female hospital workers in respect of the three fiscal years ending March 31, 1991. For those workers who retired prior to 1991, the Act meant they derived no benefit at all from the agreement their union had achieved. Nevertheless the provincial government argues that the Public Sector Restraint Act is entirely valid on the basis that: (1) there being nothing in the Charter (the government says) imposing pay equity as a constitutional obligation, there can be no constitutional impediment to its repeal, let alone a “deferral” of its effective date; (2) in any event, there is nothing in the Public Sector Restraint Act that creates a distinction that qualifies as discrimination within s. 15(1) of the Charter ; and (3) if any such discrimination is found to exist it is justified under s. 1 of the Charter .
32 I do not believe there is much substance in the first two points. The battleground in this case is the s. 1 justification. Nevertheless, I propose to deal with the points in the order presented.
A. Absence of a Constitutional Obligation
33 The respondent says that female workers have no right under s. 15(1) of the Charter to equal pay for work of equal value. What the government gave in 1988, the government could take away in 1991. It is true that in the ordinary course, legislative adoption of a remedial measure does not “constitutionalize” it so as to fetter its repeal: Reference re Canada Assistance Plan (B.C.), [1991] 2 S.C.R. 525, at p. 563. Here, however, the provincial government signed a Pay Equity Agreement on June 24, 1988 which changed the legal landscape by creating enforceable contractual rights to end pay discrimination by a procedure contractually binding on all of the parties. The Pay Equity Agreement was incorporated into the public sector collective agreements.
34 This process converted pay equity from a policy argument into an existing legal obligation for the benefit of the female hospital workers. The purpose of the Public Sector Restraint Act was to reduce the women’s pay below their contractual entitlement. Its intended effect was to pay them less than was paid to men for work of equal value. Passage of the Act on April 18, 1991 left women hospital workers worse off than they were on April 17, 1991. The issue is whether the disadvantage thus imposed on April 18, 1991 amounted to discrimination within the scope of s. 15(1) of the Charter .
35 The respondent government relies on Ferrel v. Ontario (Attorney General) (1998), 42 O.R. (3d) 97 (C.A.), which upheld the authority of Ontario to repeal an affirmative action provision in the Employment Equity Act, 1993, put in place by the previous government. The repealed provision authorized regulations to require private employers to adopt employment equity plans. Such plans could require “numerical goals determined . . . with reference to percentages approved by the [Employment Equity] Commission that, in the opinion of the Commission, fairly reflect[ed] the representation of the designated groups in the population of a geographical area or in any other group of people” (s. 55(2)). After noting that workplace discrimination was already prohibited by the Ontario Human Rights Code, and that the law in question was supplementary “machinery” to promote hiring practices “under the shield of s. 15(2) of the Charter ” (p. 110), Morden A.C.J. concluded that the preference of the newly elected legislature for the “machinery” of the Ontario Human Rights Code over the “numbers-driven” repealed provision did not violate s. 15(1) . If the result were otherwise, he noted, the Charter would itself “have an inhibiting effect on legislatures enacting tentative, experimental legislation in areas of complex social and economic relations” (p. 110).
36 The argument here is not over the “machinery” of government. On April 18, 1991 when the Public Sector Restraint Act was passed, the female hospital workers were not workers in search of machinery to pursue a claim. They were entitled under their collective agreements to four years of pay equity adjustments (1988, 1989, 1990 and 1991) which, at that point, had been ascertained and agreed to by the government and the union. The debt was payable on April 1, 1991. It was this entitlement, due to an historically disadvantaged minority in the workforce, that was targeted by the Act.
37 I do not wish to be taken as agreeing with counsel for the respondent that there is no direct infringement of s. 15(1) when a government employer discriminates in the payment of wages for work of equal value on the basis of the sex of the employee. We do not get to that issue in this case. For present purposes, it is sufficient to hold that the question whether the targeting of acquired rights of women hospital workers in this case was discriminatory is clearly within the ambit of s. 15(1) scrutiny.
B. Does Section 9 of the Public Sector Restraint Act Breach Section 15(1) of the Charter ?
38 Counsel for the appellant concisely summarized her s. 15(1) argument against the Public Service Restraint Act:
It repudiates recognition by the state of the undervaluation of work done by women, it identifies pay inequity for women as acceptable and it repudiates state responsibility [as employer] for redressing systemic discrimination for women.
While this description necessarily sacrifices nuance in the interest of brevity, it certainly captures the essence of the debate.
39 The provincial government has an uphill battle contesting an infringement of s. 15(1) in light of the opening clauses of the Pay Equity Agreement it signed on June 24, 1988:
PURPOSE
1.1 To achieve pay equity by redressing systemic gender discrimination in compensation for work performed by employees in female dominated classes within the bargaining units represented by AAHP, IBEW, CUPE, NAPE and NLNU, and whose members are employees covered by The Public Service (Collective Bargaining) Act, 1973. [Emphasis added.]
40 The value placed on a person’s work is more than just a matter of dollars and cents. The female hospital workers were being told that they did not deserve equal pay despite making a contribution of equal value. As Dickson C.J. observed in Reference re Public Service Employee Relations Act (Alta.), [1987] 1 S.C.R. 313, dissenting, at p. 368:
Work is one of the most fundamental aspects in a person’s life, providing the individual with a means of financial support and, as importantly, a contributory role in society. A person’s employment is an essential component of his or her sense of identity, self-worth and emotional well-being. Accordingly, the conditions in which a person works are highly significant in shaping the whole compendium of psychological, emotional and physical elements of a person’s dignity and self-respect. [Emphasis added.]
41 This case thus fits easily within the framework established in Law v. Canada (Minister of Employment and Immigration), [1999] 1 S.C.R. 497, which identified the affirmation of human dignity and self-worth as a central purpose of s. 15(1) of the Charter .
42 The effect of the Public Sector Restraint Act in 1991 was to affirm a policy of gender discrimination which the provincial government had itself denounced three years previously. The Act draws a clear formal distinction between those who were entitled to benefit from pay equity, and everyone else. The appropriate comparator group consists of men in male-dominated classifications performing work of equal value. That group was not similarly targeted. They were paid according to their contractual entitlement. The adverse impact of the legislation therefo