Quebec (Attorney General) v. Canada

Quebec (Attorney General) v. Canada
Court (s) Database
Federal Court Decisions
Date
2008-06-06
Neutral citation
2008 FC 713
File numbers
T-2834-96
Notes
Digest
Decision Content
Federal Court
Cour fédérale
Date: 20080606
Docket: T-2834-96
Citation: 2008 FC 713
Ottawa, Ontario, June 6, 2008
PRESENT: The Honourable Mr. Justice de Montigny
BETWEEN:
ATTORNEY GENERAL OF QUEBEC
Plaintiff
and
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
Defendant
REASONS FOR JUDGMENT AND JUDGMENT
INTRODUCTION.. 2
I. NATURE OF THE ACTION.. 4
II. CANADA ASSISTANCE PLAN.. 10
III. CONTEXT. 19
(a) History of cost-shared programs. 21
(b) Context in which CAP was enacted. 24
(c) CAP’s philosophy. 26
(d) Circumstances surrounding CAP’s repeal 42
SERVICES PROVIDED TO JUVENILE DELINQUENTS DURING THE PERIOD FROM 1979 TO 1984 47
I. POSITION OF THE GOUVERNEMENT DU QUÉBEC.. 58
II. POSITION OF THE GOVERNMENT OF CANADA.. 60
III.THE EVIDENCE. 63
(a) Plaintiff’s evidence. 63
(b) Defendant’s evidence. 81
IV. ANALYSIS. 96
SOCIAL SERVICES IN SCHOOLS DURING THE PERIOD FROM 1973 TO 1996. 111
I. POSITION OF THE GOUVERNEMENT DU QUÉBEC.. 111
II. POSITION OF THE GOVERNMENT OF CANADA.. 115
III. THE EVIDENCE. 117
(a) Evidence of the Gouvernement du Québec. 117
(b) Evidence of the Government of Canada. 132
IV. ANALYSIS. 148
SOCIAL SERVICES PROVIDED TO PERSONS WITH DISABILITIES LIVING IN RESIDENTIAL RESOURCES DURING THE PERIOD FROM 1986 TO 1996. 162
I. ISSUES AND POSITION OF THE PARTIES. 162
II.THE EVIDENCE. 168
(a) Evidence of the Gouvernement du Québec. 168
(b) Evidence of the Government of Canada. 187
III. ANALYSIS. 194
JUDGMENT.. 207
INTRODUCTION
[1] On December 23, 1996, the Attorney General of Quebec commenced an action against the Government of Canada seeking a declaratory judgment based on certain provisions of the Act to authorize the making of contributions by Canada toward the cost of programs for the provision of assistance and welfare services to and in respect of persons in need (S.C. 1966‑67, c. 45; R.S.C. 1970, c. C‑1; R.S.C. 1985, c. C‑1). That Act created the Canada Assistance Plan (CAP), known in French as the “Régime d’assistance publique du Canada” (RAPC).
[2] The action was commenced under section 19 of the Federal Courts Act (R.S.C. 1985, c. F‑7) and the Act respecting the Supreme Court of Canada and the Exchequer Court of Canada, S.Q. 1906, c. 6, which give the Federal Court jurisdiction to determine disputes between the Government of Canada and the government of a province. Specifically, the Gouvernement du Québec is challenging the refusal of the Government of Canada to share the cost of certain services that it paid for at various times over CAP’s lifespan.
[3] Although the action was commenced in 1996, it was not until 10 years later (in December 2006 and January 2007) that the hearing was finally held. The reason why so many years passed between the commencement and the hearing of the action was that the parties were trying to reach an agreement. However, the negotiations, on both an administrative and a political level, were unsuccessful, which means that it is now up to the judicial authorities to decide the merits of the action brought by the Gouvernement du Québec.
[4] The issue underlying this action is novel in the sense that no other province seems to have turned to the courts to resolve a disagreement over CAP’s application during the 30 or so years that program was in effect. Resolving this dispute therefore requires the interpretation of complex legislative provisions that were part of the tumultuous development of cost‑shared programs in Canada, with the whole federal‑provincial dynamic this implies. Moreover, the questions raised in this action cannot be answered without a good understanding of social services in Quebec during a period when the organization of those services and the philosophy that imbued them underwent profound changes.
[5] I must say at the outset that the hearing, which lasted fifteen days over a period of four months, was marked by the professionalism of counsel, their cooperation and courteousness with one another and even their clear camaraderie. This attitude is a real credit to them given the importance of this case and the workload it involved. It greatly facilitated the Court’s work and assisted the Court in properly understanding the case.
[6] Moreover, I would be remiss if I did not also emphasize the quality of the witnesses called by both sides. The expert witnesses provided highly indispensable insight into the questions to be decided; their reports and testimony made it possible to place the debate in a historical perspective and provided a better understanding of the nature of the services in issue, their development and the administrative structure of which they are a part. The lay witnesses clearly described the nature of the work they do every day and generally answered the questions openly. Their enthusiasm, devotion and empathy for the persons to whom they provide services are impressive, to say the least, and one cannot help but conclude from their testimony that, beyond the disputes that may arise in the administration and management of these services, the citizens who use them are in good hands.
I. NATURE OF THE ACTION
[7] As stated above, these proceedings originate in the refusal of the Government of Canada to share the cost to the province of Quebec of three types of services provided at various times over CAP’s lifespan. Those services, which Quebec considers to be essentially welfare services, are as follows:
a. services provided to juvenile delinquents between 1979 and 1984, that is, during the period when the Youth Protection Act (S.Q. 1977, c. 20), which came into force on January 15, 1979, coexisted in Quebec with the Juvenile Delinquents Act (R.S.C. 1970, c. J‑3), which on April 2, 1984, was repealed and replaced by the Young Offenders Act (R.S.C. 1985, c. Y‑1);
b. social services provided in schools between 1973 and 1996, that is, between the time when Quebec, in organizing its network, formally transferred responsibility for delivering those services from the Ministère de l’Éducation to the Ministère des Affaires sociales and the time when CAP was repealed; and
c. support services provided to adults with disabilities living in residential resources between the time when that type of accommodation became part of the health and social services network and the time when CAP was repealed.
[8] The Gouvernement du Québec is challenging the Government of Canada’s interpretation of certain provisions of the Act creating CAP and feels aggrieved by the refusal of the Government of Canada to pay 50 percent of the cost to the province of the above‑mentioned services.
[9] Although this is a declaratory action, it is of some interest to mention the amounts in issue, if only to provide a rough idea of the potential consequences of this judgment. The figures referred to here are taken from the summary table filed by counsel for Quebec as Exhibit PGQ‑1; they are substantially the same as the figures found in the reamended statement of claim dated December 23, 1996, although they are not consistent in every respect.
[10] Quebec’s claim for services provided to juvenile delinquents between 1979 and 1984 is $59,276,530, to which another $50,690,276 must be added to take account of the financial impact that Quebec’s claim would have from 1984 on in the context of the agreement entered into under the Young Offenders Act. It appears that the Government of Canada estimated its contribution pursuant to its agreement with Quebec under the Young Offenders Act based on its decision of May 16, 1983, to exclude from cost sharing the services not considered eligible under the Youth Protection Act and the Juvenile Delinquents Act.
[11] Quebec’s claim for social services in schools is $160,418,324, while its claim for support to beneficiaries in residential resources is $57,688,154. As with the services provided to juvenile delinquents, these amounts represent half of the expenses incurred by Quebec during the relevant years. To these amounts, $110,275 and $2,479,692, respectively, must be added (according to the arguments of the Gouvernement du Québec) to take account of the impact of the spending cap imposed by the federal government in the Budget Implementation Act, 1994 (S.C. 1994, c. 18). Under that Act, the contributions to each province in respect of a year ending after March 31, 1995, could not exceed the contributions to that province in respect of the year ending on March 31, 1995. Since the Government of Canada had excluded $32,093,812 and $25,142,339 in 1994‑1995 for the cost of residential resources and social services in schools, respectively, it made the same cuts in 1995‑1996. Yet the cost of those services was lower in 1995‑1996 than the previous year, with the result that Quebec was deprived of amounts greater than the real cost of those services for 1995‑1996.
[12] Finally, according to the Gouvernement du Québec, account should also be taken of the financial impact that its interpretation of CAP, if valid, would have on the contributions paid to it subsequently, for 1996‑1997 to 2000‑2001 inclusive, in the context of the Canada Health and Social Transfer (CHST) (Federal‑Provincial Fiscal Arrangements Act, R.S.C. 1985, c. F‑8, Part V, as amended by the Budget Implementation Act, 1995, S.C. 1995, c. 17). Since the total envelope to be divided among the provinces and territories was based, inter alia, on a percentage representing the amounts received by each province and territory under CAP for 1994‑1995, Quebec estimates that it was deprived of $63,800,000 under the CHST because the cost of services excluded under CAP was not considered in establishing its share under the CHST.
[13] If all these amounts are added together, Quebec’s total claim is therefore $394,463,251. Once again, the purpose of these proceedings is not to establish the correctness of these figures but only to determine which of the two conflicting interpretations of CAP proposed by the Gouvernement du Québec and the Government of Canada must be accepted. The magnitude of the amounts in issue nonetheless demonstrates quite eloquently the very real impact of the case for both parties.
[14] Needless to say, the Government of Canada disputes Quebec’s arguments and submits that CAP did not authorize it to contribute to the cost of the services at issue in this action for the following reasons. First, it is argued that the services provided to juvenile delinquents were for a clientele not covered by CAP and were expressly excluded as correctional services. It is argued that the services provided in schools were universal services expressly excluded as educational services. Finally, it is alleged that the cost of services provided to adults with disabilities living in residential resources was already shared with the province under another federal statute, the Federal‑Provincial Fiscal Arrangements and Established Programs Financing Act, 1977 (S.C. 1976‑77, c. 10; R.S.C. 1985, c. F‑8).
[15] In an order made on October 1, 2004, following a pre‑trial conference concerning these proceedings, the questions to be decided at trial were worded as follows:
[translation]
(a)Was the Government of Canada [Canada] required under the Canada Assistance Plan [CAP] to share the cost of expenses incurred by the Gouvernement du Québec [Quebec] for pre‑disposition and post‑disposition services provided to juvenile delinquents during the period from January 1979 to March 1984?
(b) If so, does the contribution paid to Quebec by Canada under the financial agreement entered into under the Young Offenders Act that came into force on April 2, 1984, have to be adjusted accordingly?
(c) Was Canada also required under CAP to share the cost of expenses incurred by Quebec between 1973 and 1996 for social services provided in schools?
(d) Is Quebec in any event precluded from now claiming cost sharing for expenses it incurred for social services provided in schools?
(e) As well, was Canada required under CAP to share the cost of expenses incurred by Quebec between 1986 and 1996 for support services provided to adults with disabilities living in residential resources?
(f) Finally, insofar as Canada is required under CAP to share the cost of expenses incurred by Quebec for [1] social services provided in schools and [2] support services provided to adults with disabilities living in residential resources, do the financial contribution paid to Quebec by Canada under CAP for the 1995‑1996 fiscal year, at the end of which CAP was repealed, and the contribution paid since then under the Canada Health and Social Transfer have to be adjusted accordingly?
[16] During the hearing, Mr. Leblanc (for the defendant), without beating around the bush, admitted the last three conclusions in the reamended statement of claim. The Government of Canada thus conceded that, if Quebec’s declaratory action were allowed, it would have to reassess its contribution under the agreement entered into under the Young Offenders Act as well as its CHST contribution and its CAP contribution for the 1995‑1996 fiscal year. Mr. Leblanc took great care to stress that such a review would not necessarily lead to the payment of additional amounts. Indeed, this is not how I understand questions (b) and (f) of the prothonotary’s order, and I therefore find that this admission has the effect of disposing of those questions. Mr. Leblanc also stated that he was withdrawing the argument that Quebec is precluded from making a claim for social services in schools. This eliminates question (d), with the result that the only questions still in issue are the ones relating to the interpretation of CAP as such, namely, questions (a), (c) and (e).
[17] Before dealing with the merits of the questions submitted to this Court, a clarification must be made with regard to the documentary evidence. In his order of October 1, 2004, Prothonotary Morneau noted that the parties were agreeing to file, without any other formality, all the documents referred to in their affidavits of documents and supplementary affidavits of documents but were reserving the right to object to the relevance or weight of those documents at trial. That order was later clarified during the trial, inter alia to take account of a second supplementary affidavit of documents filed by the defendant. An exhaustive list of the documentary evidence placed in the Court file for this case can therefore be found in my order of November 17, 2006. Of course, only the documents used as evidence were marked as exhibits (using the letters “PGQ” for the documents introduced in evidence by the plaintiff and the letter “D” for those introduced by the defendant), and they will be referred to as such in these reasons.
II. CANADA ASSISTANCE PLAN
[18] The Act establishing CAP was assented to on July 15, 1966, and came into force the same day. The entire Act is in an annex hereto, but I will quote the most relevant passages to assist in understanding these reasons. The Act was part of the federal government’s anti‑poverty plan, as its preamble indicates:
Whereas the Parliament of Canada, recognizing that the provision of adequate assistance to and in respect of persons in need and the prevention and removal of the causes of poverty and dependence on public assistance are the concern of all Canadians, is desirous of encouraging the further development and extension of assistance and welfare services programs throughout Canada by sharing more fully with the provinces in the cost thereof;
[19] The Act had nine parts, but only Part I, General Assistance and Welfare Services, is at issue here. Part II, Indian Welfare, provided that an agreement could be entered into with a province with respect to the extension of provincial welfare programs to Indians to whom the Act applied and for the payment by Canada of any portion of the cost to the province of extending provincial welfare programs to such Indians. Part III provided that an agreement could be entered into with a province that had already signed an agreement under Part I to provide for the payment by Canada of an amount equal to fifty percent of the cost of a work activity project undertaken in the province. Part IV allowed provinces that so desired to have payments made by way of mothers’ allowances included in unemployment assistance costs for the purposes of the Unemployment Assistance Act and to align CAP with the Established Programs (Interim Arrangements) Act if the province had previously entered into an agreement under that Act. Finally, Part V contained various legislative provisions making amendments to other Acts.
[20] Part I had only seven sections. Section 4 of the Act authorized the Government of Canada to enter into an agreement with provinces that so desired to provide for the payment of contributions in respect of the cost to the province of (a) “assistance provided by or at the request of provincially approved agencies” and (b) “welfare services provided in the province by provincially approved agencies”, pursuant to provincial law. That contribution was set at fifty percent of the eligible cost to the province of providing assistance or welfare services (subsection 5(1) of the Act). Eligible costs did not include any cost that Canada had shared or was required to share pursuant to any other Act of Parliament (paragraph 5(2)(c) of the Act). Also excluded were, with respect to assistance, any payment in respect of the purchase of land, buildings, equipment or furniture (paragraph 5(2)(a) of the Act and paragraph 3(c) of the Canada Assistance Plan Regulations (SOR/86‑679) (the Regulations) and, with respect to welfare services, any plant or equipment operating cost (paragraph 5(2)(b) of the Act and paragraph 3(d) of the Regulations).
[21] However, the key definitions for operationalizing CAP were in section 2 of the Act. Thus, assistance was defined as aid “in any form” for the purpose, inter alia, of enabling “persons in need” to meet their basic requirements (food, shelter, clothing, household supplies, utilities, etc.). For the purposes of this case, the most relevant form of assistance was care provided in “homes for special care”, which were themselves defined as residential welfare institutions prescribed for the purposes of the Act and listed in a schedule to an agreement entered into with a province; section 8 of the Regulations set out the kinds of institutions prescribed for the purposes of the Act, the most relevant of which for our purposes were “child care institutions” and institutions “the primary purpose of which is to provide residents thereof with supervisory, personal or nursing care or to rehabilitate them socially”. Hospitals, correctional institutions and institutions whose primary purpose was education were explicitly excluded from this type of institution. For greater convenience, I will reproduce these provisions in full:
Interpretation
2. “assistance” means aid in any form to or in respect of persons in need for the purpose of providing or providing for all or any of the following:
(a) food, shelter, clothing, fuel, utilities, household supplies and personal requirements (hereinafter referred to as “basic requirements”),
(b) prescribed items incidental to carrying on a trade or other employment and other prescribed special needs of any kind,
(c) care in a home for special care,
(d) travel and transportation,
(e) funerals and burials,
(f) health care services,
(g) prescribed welfare services purchased by or at the request of a provincially approved agency, and
(h) comfort allowances and other prescribed needs of residents or patients in hospitals or other prescribed institutions;
“home for special care” means a residential welfare institution that is of a kind prescribed for the purposes of this Act as a home for special care and that is listed in a schedule to an agreement under section 4, but does not include a hospital, correctional institution or institution whose primary purpose is education, other than that part of a hospital that is used as a residential welfare institution and that is listed in a schedule to an agreement under section 4.
Définitions
2. « assistance publique » Aide sous toutes ses formes aux personnes nécessiteuses ou à leur égard en vue de fournir, ou de prendre les mesures pour que soient fournis, l’ensemble ou l’un quelconque ou plusieurs des services suivants:
a) la nourriture, le logement, le vêtement, le combustible, les services d’utilité publique, les fournitures ménagères et les services répondant aux besoins personnels (ci-après appelés « besoins fondamentaux »);
b) les articles réglementaires, accessoires à l’exercice d’un métier ou autre emploi, ainsi que les services répondant aux autres besoins spéciaux réglementaires de toute nature;
c) les soins dans un foyer de soins spéciaux;
d) les déplacements et moyens de transport;
e) les obsèques et enterrements;
f) les services de santé;
g) les services réglementaires de protection sociale dont l’acquisition est faite par un organisme approuvé par une province ou à la demande d’un tel organisme;
h) les allocations de menues dépenses et autres services réglementaires répondant aux besoins des résidents ou malades des hôpitaux ou autres établissements réglementaires.
« foyer de soins spéciaux » Établissement de protection sociale qui est d’un genre défini par règlement, pour l’application de la présente loi, à titre de foyer de soins spéciaux et qui figure dans la liste d’une annexe à un accord conclu en vertu de l’article 4. Sont exclus de la présente définition d’hôpitaux, les établissements correctionnels et les établissements dont le principal objet est l’enseignement, à l’exception de la partie d’un hôpital utilisée à titre d’établissement résidentiel de protection social et qui figure dans la liste d’une annexe à un accord conclu en vertu de l’article 4.
8. For the purposes of the definition “home for special care” in section 2 of the Act, the following kinds of residential welfare institutions are prescribed for the purposes of the Act as homes for special care:
(a) homes for the aged,
(b) nursing homes,
(c) hostels for transients,
(d) child care institutions,
(e) homes for unmarried mothers, and
(f) any residential welfare institution the primary purposes of which is to provide residents thereof with supervisory, personal or nursing care or to rehabilitate them socially,
the standards of which (except for the purposes of clause 5(1)(b)(i)(B) of the Act) are, in the opinion of the provincial authority, in accordance with the standards generally accepted in the province for residential welfare institutions of that kind.
8. Aux fins de la définition de « foyer de soins spéciaux » de l’article 2 de la Loi, les catégories suivantes d’établissements résidentiels de bien-être social sont prescrites aux fins de la Loi comme étant des foyers de soins spéciaux:
a) les foyers de vieillards,
b) les maisons de repos,
c) les auberges pour les indigents ambulants,
d) les établissements de soins pour enfants,
e) les foyers pour mères célibataires, et
f) tout établissement de bien-être social dont le principal objet est de fournir à ses résidents des soins personnels ou infirmiers ou de les réadapter socialement,
dont les normes (sauf aux fins de la disposition 5(1)b)(i)(B) de la Loi) sont, de l’avis de l’autorité provinciale, confirmes aux normes généralement agréées dans la province relativement aux établissements de bien-être social de ce genre.
[22] Welfare services were defined as services having as their object “the lessening, removal or prevention of the causes and effects of poverty, child neglect or dependence on public assistance”; they included casework, rehabilitation, counselling, assessment, adoption, homemaker, day‑care and community development services. A complete definition was in paragraph 2(m) of the Act, which read as follows:
2. “welfare services” means services having as their object the lessening, removal or prevention of the causes and effects of poverty, child neglect or dependence on public assistance, and, without limiting the generality of the foregoing, includes
(a) rehabilitation services,
(b) casework, counselling, assessment and referral services,
(c) adoption services,
(d) homemaker, day-care and similar services,
(e) community development services,
(f) consulting, research and evaluation services with respect to welfare programs, and
(g) administrative, secretarial and clerical services, including staff training, relating to the provision of any of the foregoing services or to the provision of assistance,
but does not include any service relating wholly or mainly to education, correction or any other matter prescribed by regulation or, except for the purposes of paragraph of the definition “assistance”, any service provided by way of assistance;
2. « services de protection sociale» Services qui ont pour objet d’atténuer, de supprimer ou de prévenir les causes et les effets de la pauvreté, du manque de soins à l’égard des enfants ou de la dépendance de l’assistance publique et notamment:
a) services de réadaptation;
b) services sociaux personnels, services d’orientation, d’évaluation des besoins et de référence;
c) services d’adoption;
d) services ménagers à domicile, services de soins de jour et autre services similaires;
e) services de développement communautaire;
f) services de consultation, de recherche et d’évaluation en ce qui concerne les programmes de protection sociale;
g) services administratifs, de secrétariat et de commis aux écritures, y compris ceux de formation du personnel, relatifs à la fourniture de tout service mentionné ci-dessus ou de l’assistance publique.
Sont exclus de la présente définition les services qui concernent uniquement ou principalement l’enseignement, la correction ou tout autre domaine réglementaire ou, sauf pour l’application de la définition de « assistance publique », les services fournis sous forme d’assistance publique.
[23] Finally, it is important to specify the target clientele. As stated above, assistance was only for “persons in need”, that is, persons who, by reasons of inability to obtain employment, loss of the principal family provider, illness, age or other cause of any kind acceptable to the province, were found to be unable to provide adequately for themselves or their dependants. For the purposes of the Act, the provinces determined whether a person was in need and thus eligible for provincial assistance programs on the basis of parameters that had to take into account the person’s budgetary requirements and the income and resources available to the person to meet such requirements. For the purposes of the claim for services provided to juvenile delinquents, it is relevant to note that a person in need was also defined as a person under the age of 21 years in the care or under the supervision of a child welfare authority or a foster‑child whose parents were unable to support him or her. The definition read as follows:
Interpretation
2. “person in need” means
(a) a person who, by reasons of inability to obtain employment, loss of the principal family provider, illness, disability, age or other cause of any kind acceptable to the provincial authority, is found to be unable, on the basis of a test established by the provincial authority that takes into account the budgetary requirements of that person and the income and resources available to that person to meet such requirements, to provide adequately for himself, or for himself and his dependants or any of them, or
(b) a person under the age of twenty‑one years who is in the care or custody or under the control or supervision of a child welfare authority, or a person who is a foster‑child as defined by regulation,
and for the purposes of paragraph (e) of the definition “assistance” includes a deceased person who was a person described in paragraph (a) or (b) of this definition at the time of his death or who, although not such a person at the time of his death, would have been found to be such a person if an application for assistance to or in respect of him had been made immediately before his death;
Définitions
2. « personnes nécessiteuse » Selon le cas:
a) personne qui, par suite de son incapacité d’obtenir un emploi, de la perte de son principal soutien de famille, de sa maladie, de son invalidité, de son âge ou de toute autre cause acceptable pour l’autorité provinciale, est reconnue incapable -sur vérification par l’autorité provinciale qui tient compte des besoins matériels de cette personne et des revenus et ressources dont elle dispose pour satisfaire ces besoins- de subvenir convenablement à ses propres besoins et à ceux des personnes qui sont à sa charge ou de l’une ou plusieurs d’entre elles;
b) personne âgée de moins de vingt et un ans qui est confiée aux soins ou à la garde d’une autorité chargée de la protection infantile ou placée sous le contrôle ou la surveillance d’une telle autorité, ou une personne qui est un enfant placé en foyer nourricier selon la définition des règlements.
Pour l’application de l’alinéa e) de la définition de « assistance publique », est assimilée à une personne nécessiteuse une personne décédée qui était une personne visée par l’alinéa a) ou b) de la présente définition au moment de son décès ou qui, bien qu’elle ne fût pas une telle personne au moment de son décès, aurait été reconnue être une telle personne si une demande d’assistance publique avait été faite pour elle ou à son égard immédiatement avant son décès.
[24] Welfare services were intended for a slightly broader clientele. Paragraph 2(n) of the Act stated that “welfare services provided in the province”, which could be the subject of a cost sharing agreement under CAP, were welfare services provided to or in respect of persons in need “or persons who are likely to become persons in need unless such services are provided”. This idea of “imminence of need” was not defined anywhere in the Act or the Regulations. It seems that it was instead explained in guidelines developed under CAP over the years.
[25] As mentioned above, Canada was required to contribute to the eligible cost to a province of the assistance and services covered by CAP only if it had an agreement with the province for that purpose (section 4 of the Act) and the province submitted a claim for a given year at the proper time, in support of which it had to give Canada all the information Canada considered necessary to review the claim (subsection 13(2) of the Regulations). The terms of such agreements were provided for in section 6 of the Act.
[26] Moreover, the federal contribution was payable only if the assistance and welfare services were provided (1) by a provincially approved agency or, as the case may be, in a home for special care previously approved by Canada under the agreement with the province, and (2) pursuant to provincial law, also previously approved by Canada under the same agreement, providing for such assistance or services under conditions consistent with CAP (section 4 of the Act). All the agreements therefore had three schedules listing homes for special care (Schedule A), provincially approved agencies authorized to provide welfare services (Schedule B) and provincial Acts governing assistance and welfare services in the province (Schedule C). The schedules were, of course, updated regularly after the provincial and federal authorities consulted and came to an agreement (it seems that there were 59 amending agreements in all).
[27] Quebec signed such an agreement on August 21, 1967, and it was subsequently amended several times to update the schedules. All the provinces availed themselves of CAP by signing agreements for that purpose. However, it seems that these proceedings are the only ones ever brought by a province concerning CAP’s financial sharing rules.
[28] In retrospect, it can be said that CAP broke new ground in several respects and went far beyond a mere consolidation of existing programs. As Professor Banting aptly explained in his report (to which I will return later), the support granted to the provinces by the federal government was increased in various ways. First, aid was given to persons in need no matter what the underlying causes of their economic problems. Second, federal support no longer applied only to assistance measures but also covered welfare services. Third, the federal government agreed for the first time to share the cost of developing the provincial administrative structures responsible for providing assistance and services to persons in need. Fourth, the federal contribution extended to aid provided by the provinces to persons who were working but still in need if it could be shown that their income was insufficient to meet their needs. Finally, CAP formally prohibited the provinces from requiring a period of residence to be eligible for assistance (paragraph 6(2)(d) of the Act).
[29] CAP was repealed on March 31, 1996, with the coming into effect of the CHST, a program under which the federal contribution to the cost of provincial assistance and welfare services programs was to gradually become a per capita grant. However, CAP continued to have effect until March 31, 2000, to allow for the final settlement of outstanding provincial claims, the 1995‑1996 fiscal year being the last year for which the provinces could make claims under CAP.
III. CONTEXT
[30] Before the parties’ arguments on each of the three components of Quebec’s claim are examined in detail, it is appropriate to situate CAP in its more general historical and legislative context. Counsel for Quebec submitted that CAP’s wording clearly favours their position and that the restrictive interpretation given to it by the government officials responsible for implementing it can be explained first and foremost by a desire to control the unforeseen explosion of costs resulting from this cost‑shared program for the federal public purse. Obviously, counsel for Canada vigorously contested these arguments and countered that neither the wording of the Act nor the external context supports Quebec’s position. What is the true situation?
[31] It is now settled law that statutory interpretation cannot be based solely on the wording of an enactment. Professor Driedger wrote the following on this point in his book Construction of Statutes (2nd ed. 1983), at page 87, as cited by the Supreme Court in Rizzo & Rizzo Shoes Ltd. (Re) (1998), 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, at paragraph 21:
Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.
See also: R. v. Jarvis, 2002 SCC 73, [2002] 3 S.C.R. 757, paragraph 77; Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, [2002] 2 S.C.R. 559, paragraph 26; Barrie Public Utilities v. Canadian Cable Television Assn., 2003 SCC 28, [2003] 1 S.C.R. 476, paragraph 20; Alberta Union of Provincial Employees v. Lethbridge Community College, 2004 SCC 28, [2004] 1 S.C.R. 727, paragraph 25.
[32] The soundness of this method of statutory interpretation favoured by the Supreme Court is confirmed, so to speak, by section 12 of the Interpretation Act, R.S.C. 1985, c. I‑21, which provides that every enactment “is deemed remedial, and shall be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects”.
[33] Contextual analysis must be viewed from a very broad perspective so that the legislature’s intention can be sought by taking account not only of the entire wording of the Act in question but also of a number of external factors, such as the overall legislative framework of which the Act is a part, the values and characteristics of the legal system as a whole and social, cultural, economic, political and historical realities at the time of the Act was passed. Professor Ruth Sullivan wrote the following in this regard:
External context consists of the setting in which the law was enacted and the setting in which it currently operates. The key assumption here is that legislation is not an academic exercise. It is a response to circumstances in the real world and it necessarily operates within an evolving set of institutions, relationships and cultural assumptions.
Sullivan and Driedger on the Construction of Statutes, 4th ed., Butterworths, 2002, pages 260‑261. To the same effect, see also A.G. v. Prince Ernest Augustus of Hanover, [1957] A.C. 436, 461; Prassad v. Canada (Minister of Employment and Immigration) (1989), 57 D.L.R. (4th) 663, [1989] 1 S.C.R. 560.
[34] In the pages that follow, I will therefore look briefly at the development of cost‑shared programs in Canada, the economic, social and political context in which CAP originated, the various attempts to amend it and the circumstances in which it was repealed. In doing so, I will rely largely on the expert reports and testimony of Professor Keith Banting for the defendant and Professor Yves Vaillancourt for the plaintiff. That exercise will provide a better idea of CAP’s objective, and the provisions at the heart of this case can then be analyzed against that backdrop.
(a) History of cost‑shared programs
[35] In 1867, assistance to those most in need was still in the very early stages and was a very limited instrument of social policy. Social policy development in the 20th century therefore involved establishing more appropriate, predictable programs based on the rights of the affected individuals. First, various social assistance programs were developed and formalized. This trend began during the interwar period with the introduction of various needs‑based benefits that enabled several groups to count on structured assistance from the government rather than the discretionary, uneven, unpredictable and sometimes stigmatizing assistance provided by local agencies. These programs were initially established to help persons in need who were considered the most deserving, such as elderly persons, widows and abandoned mothers, but this particularized approach was gradually replaced during the post‑war period by social assistance programs for everyone in need.
[36] At the same time as this first trend, other social security programs were also introduced with the goal of providing a certain form of protection to all Canadians. Those programs quickly became the main source of expenditures in the Canadian income security system and ensured that most Canadians would never have to turn to social assistance even during the most economically trying times, such as unemployment and retirement. With the development of those programs, social assistance gradually became a program of last resort that provided financial assistance to individuals and families who were not eligible for any other social security program or whose benefits under other programs were not sufficient to meet their needs. The federal government played a role in the development of both types of programs by contributing through its spending power to provincial social assistance programs and taking on a key role in the creation of several universal social security programs during the decades following World War II.
[37] Although the provinces were the first to play a role in establishing social programs of all kinds, the federal government was quickly pressured to support those programs. The reasons for this were very simple: not only did the provinces have limited and unequal tax resources, but there was no mechanism that allowed them to share the risks arising out of the economic conditions specific to each province. Moreover, the mobility of labour and capital in a federal state was liable to accentuate those regional inequalit