The Judges of the Provincial Court of Newfoundland & Labrador as represented by the Newfoundland & Labrador Association of Provincial Court Judges, v. The Honourable Judges Catherine Allen-Westby, Jacqueline Brazil, Gregory Brown, Lynn, 2018 NLSC 140

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Newfoundland and Labrador Association of Provincial Court Judges v.

Newfoundland and Labrador , 2018 NLSC 140 Date : June 21, 2018 Docket : 201601G4186 Between: The Judges of the Provincial Court of Newfoundland & Labrador as represented by the Newfoundland & Labrador Association of Provincial Court Judges, and The Honourable Judges Catherine Allen-Westby, Jacqueline Brazil, Gregory Brown, Lynn Cole, Timothy Chalker, William English, Colin Flynn, Wayne Gorman, Phyllis Harris, Kymil Howe, Robert Hyslop, Jacqueline Jenkins, John Joy, Patrick Kennedy, Mark Linehan, Michael Madden, Lori Marshall, Paul Noble, David Orr, Harold Porter, Lois Skanes, Bruce Short, Wynne Anne Trahey, James Walsh, and Randy Whiffen Applicants And: her majesty the queen in right of the province of newfoundland and labrador First Respondent And: the honourable andrew parsons, minister of justice and public safety and attorney general Second Respondent Before: Justice Alphonsus E.

Faour Place of Hearing: St. John’s, Newfoundland and Labrador Date(

s) of Hearing: December 5-6, 2016

Summary: The Association of Provincial Court Judges sought judicial review of a decision of the legislature to reject salary recommendations of an

independent tribunal appointed under the Provincial Court Act, 1991. The Court held that its response, coupled with the surrounding circumstances, did not conform to the constitutional obligations of theexecutive and legislative branches of the Government. The response to reject the salary recommendations was quashed, and theGovernment was ordered to implement all of the recommendations of the independent tribunal. Appearances: Susan Dawes Appearing on behalf of the Applicants Rolf Pritchard, Q.C. and Jessica R.

Pynn Appearing on behalf of the Respondents Authorities Cited: CASES CONSIDERED: Newfoundland Association of Provincial Court Judges v. Newfoundland, 2000 NFCA 46; Reference re:Remuneration of Judges of the Provincial Court (P.E.I.), (SCC), [1997] 3 S.C.R. 3; Newfoundland Association ofProvincial Court Judges v. Newfoundland and Labrador, 2003 NLSCTD 117; Provincial Court Judges' Association (New Brunswick) v.New Brunswick (Minister of Justice), 2005 SCC 44; Aalto v. Canada (Attorney General), 2010 FCA 195; Provincial Judges Associationof Manitoba v. Manitoba, 2013 MBCA 74; Provincial Judges Association v.

Attorney General of British Columbia, 2015 BCCA 136;Provincial Court Judges' Association of British Columbia v. British Columbia (Attorney General), 2016 BCSC 1420; Provincial CourtJudges' Association of British Columbia v. British Columbia (Attorney General), 2017 BCCA 63; Provincial Judges Association ofManitoba v. Manitoba, 2012 MBQB 79 STATUTES CONSIDERED: Provincial Court Act, 1991, S.N.L. 1991, c. 15; Provincial Court Act, 1990, R.S.N. 1990, c. P-29; PublicSector Restraint Act, 1991, S.N. 1991, c. 3; Public Sector Restraint Act, 1992, S.N.L. 1992, c.

P-41.1; Provincial Court (Amendment)Act, 1991, S.N.L. 2015 c. 3 REASONS FOR JUDGMENT Faour, J.: INTRODUCTION [1] This is an application seeking an order in the nature of certiorari quashing a resolution of the House of Assembly respectingthe report of the 2014 Newfoundland and Labrador Provincial Court Judges Salary and Benefits Tribunal (the “Wicks Tribunal”) datedDecember 21, 2015, and an order in the nature of mandamus requiring implementation of those recommendations. [2] The Applicants are judges of the Provincial Court of this Province as represented by The Newfoundland and LabradorAssociation of Provincial Court Judges (the “Association”).

Under the Provincial Court Act, 1991, S.N.L. 1991, c. 15 (the “Act”) aTribunal is established to periodically prepare a report with recommendations on the salaries and benefits of the judges. The judgessubmit that the tribunal process is constitutionally required to protect the public interest in an independent judiciary. The Governmentmay reject or vary the recommendations, provided that legitimate reasons are given. [3] The judges challenge the Government’s rejection of the Wicks Tribunal recommendations on salary increases.

They assertthat the Government has not acted in good faith nor has it demonstrated respect for the process. The Government, for its part, says that ithas acted in the interests of fiscal responsibility, and a desire that all persons paid from the public purse be treated equally. [4] In some respects this case is the latest in a history of difficult interactions between the judges and the Province. In openingits decision in Newfoundland Association of Provincial Court Judges v. Newfoundland, 2000 NFCA 46, the Court of Appeal set out thedivide between them succinctly, at paragraph 1: 1.

Citing indifference and neglect, and with judicial independence as their battle cry, the Provincial Court Judges of Newfoundlandclaimed that the failure of the Government of Newfoundland and Labrador to implement certain salary and other employment-relatedchanges, as recommended by a judicial compensation commission, was unconstitutional and illegal. For its part, the government, wavingthe banner of fiscal responsibility and of equality of treatment for all persons paid from public funds, responded that what they did and

their manner of doing it was both legal and justified. [ 5 ] Similar issues arise in this proceeding. It is a contest between the constitutionally mandated process for setting judicial remuneration and the ability of the Government to manage its fiscal challenges. It arises from the appointment of the Wicks Tribunal on December 12, 2014 to carry out its statutorily mandated task. It was charged with making recommendations regarding the compensation for Provincial Court Judges in this Province for the fiscal years 2013-14 to 2016-17.

The Wicks Tribunal was the sixth such judicial compensation tribunal in this Province since the implementation of this structure by the legislature in passing the Act in 1991. The judges submit that it is useful to review the history of the tribunal process since that time, as they submit little has changed. History [ 6 ] Prior to 1991, the salary of Provincial Court Judges was unilaterally set by the Lieutenant-Governor in Council pursuant to section 6(3) of the Provincial Court Act, 1990 , R.S.N. 1990, c. P-29, s. 6: 6.

(3) A Provincial Court judge shall be paid, out of the Consolidated Revenue Fund of the province, a salary fixed by the Lieutenant- Governor in Council by regulations made under

section 25. [ 7 ] In 1991, the passage of the Act , introduced the judicial compensation tribunal scheme. At the time of its introduction, the Act provided at

section 28 : 28.

(1) The Lieutenant-Governor in Council shall appoint, a tribunal consisting of 3 persons to recommend the salaries and benefits of judges and the chief judge.

(2) One person appointed under subsection (1) shall be appointed by the Lieutenant-Governor in Council to serve as chairperson.

(3) The first tribunal appointed under this

section shall be appointed within 3 months of the proclamation of this Act and each subsequent tribunal shall be appointed 6 months prior to the expiration of a 4 year period as determined under subsection (8).

(4) The persons appointed to the tribunal under subsection (1) have the powers, privileges and immunities of a commissioner under The Public Enquiries Act .

(5) The tribunal shall submit a report containing recommendations on salaries and benefits to the minister within 6 months following the date of the appointment of the tribunal.

(6) The minister shall, within 15 days of receiving a report under subsection (5) lay that report before the House of Assembly if the House of Assembly is in session or if not, within 15 days of the commencement of the next session.

(7) The House of Assembly shall consider and approve or vary a report submitted under subsection (6) within 30 days of that submission and upon the expiration of those 30 days that report or varied report shall be implemented.

(8) A report or varied report implemented under subsection (7) shall be in effect for a 4 year period commencing on the expiry of the 30 day period referred to in subsection (7). [ 8 ] This structure was meant to respect the constitutional separation of the judicial and executive branches of Government. The scheme was to implement a “negative option” in that a report tabled in the House of Assembly would be implemented as submitted unless the House varied or rejected it.

Amendments were made to reflect the development of the law in this case following several decisions of the Supreme Court of Canada. [ 9 ] In the intervening years, five tribunals were appointed to fulfil the mandate set out under the Act , leading to the appointment of the Wicks Tribunal, the sixth tribunal, and the subject of this proceeding.

However, the tribunal process was not without difficulties, delays, several interventions by the courts in this Province and elsewhere in Canada, including the Supreme Court of Canada, and a number of legislative amendments. [ 10 ] It is useful to review the experience since that time, focusing on each of the Tribunals, the recommendations, and their treatment by the legislature. [ 11 ] The Whalen Tribunal issued its report on April 14, 1992. Its implementation was denied due to the fiscal pressures facing the Government. [ 12 ] The Roberts Tribunal was next, and issued its report on February 21, 1997.

Its decision was varied by the legislature, by

freezing salaries, but implementing several of the other recommendations. Following a decision of the Supreme Court of Canada respecting the process in other provinces, the Government eventually accepted the recommendations. [ 13 ] On September 14, 2001, the Hoegg Tribunal submitted its report. Its recommendations were adopted. Similarly, the recommendations of the Steele Tribunal, which reported on May 19, 2006, and the Andrews Tribunal, reporting on September 30, 2010, were also adopted and implemented.

The salary recommendations of the Wicks Tribunal, reporting on December 21, 2015, and the subject of this proceeding, were denied by resolution of the legislature on May 26, 2016. [ 14 ] This rather spare account of the fate of the various tribunals does not disclose the many difficulties which arose in each of the processes. Because the judges have raised as an issue the history of lack of respect for the process, it is useful to examine each of the tribunals more closely.

A fairly detailed history of the early years following the introduction of the 1991 legislation is set out in the decision of the Court of Appeal for this Province in its decision in 2000, Newfoundland Association of Provincial Court Judges v. Newfoundland . (

i) The Whalen Tribunal [ 15 ] The first tribunal, the “Whalen Tribunal”, was appointed on October 16, 1991, the day the Act came into force. Prior to its appointment, however, the Government had passed the Public Sector Restraint Act, 1991, S.N. 1991, c. 3 (the “ Restraint Act, 1991 ”). That Act came into force on April 18, 1991, some six weeks prior to the legislation authorizing the first tribunal. [ 16 ] The effect of the Restraint Act, 1991 was to freeze the wage scales for all public sector employees during a period stretching from April 1, 1991, to March 31, 1992. Provincial Court Judges were deemed to be public employees for the purpose of restraining public sector salaries:

section 4. The Act governing the Provincial Court tribunal process was not made subject to the Restraint Act, 1991 . Since the Act was passed and received Royal Assent after the Restraint Act, 1991 it could have been interpreted as overriding the salary freeze as it applied to judges. That was the implicit conclusion drawn by the Court of Appeal in Newfoundland Association of Provincial Court Judges v.

Newfoundland at paragraph 10: 10. … when the Provincial Court Act, 1991 was enacted shortly thereafter, its provisions for setting judicial remuneration were not made subject to the restraint provisions of the Public Sector Restraint Act .

In principle, therefore, the subsequent enactment of the Provincial Court Act, 1991 could be said to have impliedly repealed the freeze insofar as it might have applied to provincial court judges and provided, instead, for the normal operation of the tribunal process contemplated by s. 28 . [ 17 ] The sequencing of the passing of the Restraint Act, 1991 , with the subsequent enactment of the legislation authorizing the tribunal process for the Provincial Court Judges seemed to suggest that the Provincial Government was moving forward under the new scheme, despite the freeze.

What followed, however, quickly undermined this conclusion. For instance, after submissions had been made to the Tribunal but before its report was issued, the Government introduced a new paid leave program. No submissions had been made by Government regarding this program before the Tribunal, even though it directly affected Provincial Court Judges’ total paid leave and sick leave. Following this, the Government introduced legislation, the Public Sector Restraint Act, 1992 , S.N.L. 1992, c. P-41.1 (the Restraint Act, 1992 ), into the House of Assembly.

This legislation was intended to extend the restraint period that had been imposed by the Restraint Act, 1991 . It made express reference to the Provincial Court Judges, and directly prohibited implementation of the Whalen Tribunal report until the end of the restraint period, which, for Provincial Court Judges, now extended until March 31, 1994. (See the Restraint Act, 1992 , ss. 4(4)) [ 18 ] The Whalen Tribunal provided its report on April 14, 1992, which was laid before the House of Assembly on May 1, 1992.

On June 1, 1992, within the 30 day period required by the Act , the House of Assembly “varied” the report by adding to it a statement recommending deferral of its consideration until the expiry of a restraint period. [ 19 ] Finally, on May 16, 1994, more than 30 days following the end of the restraint period, the House of Assembly again considered the Whalen Tribunal report (this was outside of the period in which it was supposed to reconsider the report).

At that time, the House of Assembly rejected the pension recommendation of the report and delegated the consideration of salaries to a Treasury Board reclassification review. [ 20 ] In reviewing this part of the history, the Court of Appeal commented that delegation of this function was contrary to the Act . The Court said, at paragraph 32 of Newfoundland Association of Provincial Court Judges v.

Newfoundland , that: 32. ... the analysis of judges’ salaries, a role which by legislation was to be undertaken by a statutory tribunal, was transferred to a government department. [ 21 ] The delegation resulted in the salary of the judges being frozen at its then current level of $90,129. While an internal review recommended an increase to about $97,000, this was never presented to the legislature for implementation.

The result was a direct contradiction of the recommendations of the Whalen Tribunal, and not compliant with the process established in the Act . (ii) The Roberts Tribunal [ 22 ] Against the backdrop of the experience of dealing with the Whalen Tribunal recommendations, the Roberts Tribunal was appointed almost one year late by the terms of the Act . The Act would have required appointment of the Tribunal by December 1, 1995. However, it was not appointed until October of 1996. It delivered its report to the Minister of Justice on February 21, 1997, and put before the House of Assembly on March 27, 1997.

The report endorsed the recommendations of the Whalen report and recommended that: judges’ salaries be increased immediately to $102,000; that the differential between the Chief Judge and the other judges be 6%; and that the judges have their own special pension plan. [ 23 ] The Government again varied that report, this time to state that the current salary levels would be maintained, pending further discussions between the Minister of Justice and the Chief Judge and other judges of the Provincial Court.

This variation, in effect, provided that the salaries would be negotiated directly between the judges and the Government.

[24] Later that same year, the seminal case of Reference re: Remuneration of Judges of the Provincial Court (P.E.I.), (SCC), [1997] 3 S.C.R. 3 (“PEI Reference”) was released by the Supreme Court of Canada on September 18, 1997. With that case,the scheme involving an independent tribunal system moved from being merely statutorily required, to a constitutional imperative. Thecourt took the view that only such a system could protect the independence of the judiciary.

By this view, direct negotiations betweenthe Government and the judiciary are impermissible. [25] In this Province, consideration by the courts resulted in implementation of both the Whalen and the Roberts Tribunal arisingfrom the decision of the Court of Appeal on December 5, 2000 in Newfoundland Association of Provincial Court Judges v.Newfoundland.

The Court declared that the Restraint Act, 1991 and Restraint Act, 1992 were unconstitutional as they applied toProvincial Court Judges, and therefore the salary increases were deemed to be effective as of June 1992. (iii) The Hoegg Tribunal [26] The appointment of the third tribunal, which was supposed to have occurred in 2000, was also delayed. The Hoegg Tribunalwas ultimately appointed in the spring of 2001, which necessitated an amendment to the Act to extend the timeline for the provision ofthis Tribunal’s report. The Tribunal was tasked with:

a) dealing with the Government’s proposal and the judges’ submission regarding the implementation of the Whalen Tribunalreport on pensions;

b) making recommendations for fiscal years 1996/1997 to 1999/2000 (made necessary as a result of the Courts findings that theRoberts Tribunal report was not effective); and

c) making recommendations for fiscal years 2000/2001 to 2003/2004. [27] The Hoegg Tribunal report was submitted to the Minister of Justice on September 14, 2001. The report was tabled onNovember 22, 2001. By resolution dated December 13, 2001, the Government accepted some of the recommendations, but varied therecommended salary increases, and rejected a recommendation relating to increasing the car allowance. [28] The Government’s response was challenged on an application for judicial review to the Trial Division.

While the rejection ofthe recommendation on the car allowance was upheld, Justice Lang, with respect to the variation of the salary recommendation, found(see Newfoundland Association of Provincial Court Judges v. Newfoundland and Labrador, 2003 NLSCTD 117) at paragraph 91: 91. Applying the “simple rationality test”, I am satisfied that the Defendant has not, in its response to the Hoegg Tribunal reportrespecting salary increases given a legitimate reason to vary the said recommendations of the Hoegg Tribunal respecting salaryincreases.

I, therefore, declare that the salary recommendations of the Hoegg Tribunal are binding on the Defendant. [Emphasis in theoriginal] [29] The decision was not appealed and, on March 10, 2004, the judges were paid their retroactive increases for the years beginningApril 1, 1997. (iv) The Steele Tribunal [30] The Steele Tribunal was appointed on October 26, 2005 – more than a month after the report of the next tribunal was due. Thisagain required an amendment to the Act extending the deadline for receipt of the Tribunal’s report.

The House of Assembly passed suchan amendment extending the deadline to April 1, 2006. [31] The Steele Tribunal was tasked with making salary and benefit recommendations for a five year period stretching from April 1,2004, to March 31, 2009. The five year mandate was given in an attempt to ensure that this would be the last Tribunal to makerecommendations with “a significant degree of retroactivity”. [32] The Steele Tribunal’s report was released May 26, 2006. The recommendations were accepted by the Government.

TheTribunal then released a second report on the issue of judicial indemnity in April of 2007. [33] The House of Assembly passed a further amendment to the Act on December 12, 2006, retroactively extending the deadline forsubmission of the Steele Tribunal’s report from April 1, 2006, to May 26, 2006. The amendment also provided that the next Tribunal’sreport would be due on April 1, 2010. [34] The retroactive increases arising out of the approved Steele Tribunal report were paid to the judges on January 10, 2007. (

v) The Andrews Tribunal [35] The Andrews Tribunal was appointed on December 1, 2009. It was tasked with providing recommendations regarding salaryand benefits for the period April 1, 2009, to March 31, 2013. [36] That Tribunal provided its report on September 30, 2010, outside of the time limited under the Act. The Government, however,amended the Act on June 24, 2010, to extend the time for providing the report. [37] The recommendations set out in the Andrews Tribunal report were accepted on May 19, 2011. (vi) The Wicks Tribunal

[ 38 ] The appointment of the Wicks Tribunal continued the history of delay that has characterized the process since the appointment of the Whalen Tribunal in 1992. It was appointed on December 4, 2014. That was more than two months after its report should have been submitted to the Minister. The Government once again amended the Act to extend the report submission date to December 31, 2015. [ 39 ] The bill to amend the Act was debated in the House of Assembly on March 30, 2015.

The Honourable Felix Collins, then Minister of Justice and Public Safety, spoke to the amendment, and the requirement for extending the deadline for the Tribunal’s report: Subsequent to that, Mr. Speaker, the next report on salaries and benefits was required to have been presented to the minister by September 30, 2014. Throughout the fall of 2014, however, government was engaged in ongoing negotiations related to the reform of the Public Service Pension Plan.

As we all know, government and unions negotiated a pension agreement at that time that addressed a huge financial problem that we had with the unfunded pension plans. It took a lot of work, a lot of negotiation, and was heralded when it was announced. Mr. Speaker, given that judges' pensions are also part of the tribunal's considerations, it was prudent to have those pension discussions and agreements out of the way before we commenced the review of the judges' benefits because pensions will be a part of the review as well. In addition to that, we had problems finding willing nominees for the board.

It resulted in the tribunal not being appointed as of September 30, 2014 and, as such, an amendment is now necessary to extend the deadline for the tribunal's report. [ 40 ] This appears to indicate that the delay in both appointing the tribunal, and the extension of the reporting date, was deliberate. It seems to have been related more to the Government’s own policy issues, involving negotiations on pensions with public sector unions, and not to any difficulty inherent in the tribunal process.

As is evident from the Minister’s comments, he also said that one of the reasons for the delay was the difficulty in finding appointees. [ 41 ] In deciding whether these reasons constitute justification for the late appointment of the tribunal, one must consider the time line of the tribunal process. The Act sets out deadlines for the appointment and reporting of the tribunals.

Section 28.2 says, in part: 28.2

(1) Notwithstanding

section 28.1, the tribunal shall review and report on salaries and benefits of judges and shall present its recommendations together with reasons to the minister not later than 4 years from the date of the last tribunal report. [ 42 ] As noted above, the previous tribunal report, from the Andrews Tribunal, was submitted September 30, 2010. That means the next tribunal should have been appointed in time to submit its report before September 30, 2014. This fact was known from 2010, and should not have been a surprise to the Government.

The previous tribunals have reported between 5 and 10 months following appointment. It would have been reasonable for the Government to begin the appointment process at the latest by early 2014. The delay to December of that year was not explained, other than the factors noted in the Minister’s comments to the House in 2015. This is a recurring obligation of the Government that it has delayed repeatedly since the process began with the passing of the Act in 1991. [ 43 ] The Wicks Tribunal began its work following its appointment. It received a number of written submissions, and held a three- day public hearing.

The submissions focused on a range of issues, including salary and benefits. The only controversial issues concerned salary and pensions for the judges. The Government and the judges association were more or less ad idem on most other issues. [ 44 ] The salary and pension questions were the most significant in the tribunal’s deliberations. On salary, the Government and the judges’ association presented divergent positions. The Government recommended that there be no increases for the first two years of the tribunal period, the fiscal years 2013-14 and 2014-15.

It recommended an increase of 2% effective April 1, 2015, and a further 3% increase on April 1, 2016, bringing the salary paid to $226,648. [ 45 ] The recommendations of the Government on salaries falls short of the submissions of the judges’ association. It recommended that parity with the average of the Maritime Provinces be achieved over the four-year tribunal period. Similar to the Government’s proposal, it recommended no increase for the first two years. It differed significantly in its proposal for the remainder of the period.

In year three, effective April 1, 2015, it proposed an 11.2% increase, and a further increase of 3.1% on April 1, 2016, bringing the salary paid to $247,200. This would increase salaries, more or less, to the average of the Maritime Provinces. [ 46 ] On pensions, the Government’s proposal involved changes which would more or less parallel the pension plan for other public servants. The Association proposed retaining the status quo as being a plan more appropriate for this unique group. [ 47 ] The Tribunal considered the submissions in light of several factors.

The legislation does not set out the criteria for the Tribunal’s considerations. However, drawing on previous tribunals, and the existing jurisprudence, it decided that its deliberations would be guided by one foundational principle, that of judicial independence. It described this as an overarching principle.

It defined five factors that would animate this principle, at paragraph 27 of its report: 1) The nature and importance of the work performed by Provincial Court Judges and their unique role and responsibility in our society; 2) The need to attract, motivate and retain the most highly qualified candidates from all areas of practice;

3) Salaries of other relevant groups of society; 4) Increases in the cost of living; and, 5) The fiscal capacity of government in light of current economic conditions. [ 48 ] The Tribunal commented on each of these factors, and considered their overall significance in reaching its conclusion. [ 49 ] With respect to the first factor, the Tribunal noted at paragraph 96 of its report that it was, “illuminating and important to remember, but low on the scale of importance in respect of its determinative value” for the Tribunal’s decision-making process.

It took the view that the other factors should be given greater weight in reaching its conclusions (paragraph 99). [ 50 ] The second factor identified was “the need to attract, motivate and retain the most highly qualified candidates from all areas of practice”. The Tribunal said at paragraph 100 that this was a significant factor, stating, “this factor generally supports higher remuneration for Provincial Court Judges in the circumstances, but to a limited extent”.

It also noted the absence of evidence that greater remuneration was necessary to attract candidates from the private bar (paragraph 101). [ 51 ] The third factor identified was the “salaries of other relevant groups of society”. With respect to this factor, the Tribunal found that the most relevant comparator group for this purpose was the Provincial Court Judges of the Maritime Provinces.

The Tribunal accorded significant weight to this factor, which, it noted at paragraph 102, “supports the determination that higher remuneration is necessary for Provincial Court Judges”. [ 52 ] In reaching this conclusion, the Tribunal undertook a thorough discussion of the submissions of both parties as to the calculation of the appropriate comparator. On the one hand, the Judges argued that the average of the Maritime Provinces excluding this Province should be the basis for comparison.

On the other, the Province argued that the comparator should be the average of the four Atlantic Provinces, including this Province. In its submission to the Tribunal, the Province agreed that there should be an increase to bring the salaries of Judges to roughly the Atlantic average. That would have resulted in a salary in 2015 of $220,047.00.

I note this portion of the Province’s submission to contrast it with the position in the resolution put to the legislature some months later. [ 53 ] The fourth factor identified was the increase in the cost of living, which results in an erosion of the Provincial Court Judges’ salaries. This factor, the Tribunal held, further supports a higher level of remuneration for Provincial Court Judges. It supported its view by reference to a report prepared by economics’ consultant, Dr. James P. Feehan, and concluded that inflation was eroding the salaries of Provincial Court Judges.

However, this does not appear to have been a significant factor in its recommendations. [ 54 ] The fifth factor identified was the “fiscal capacity of Government in light of current economic conditions”, which, presciently, the Tribunal identified as the “most controversial”. Again, by reference to the expert report of Dr. Feehan, the Tribunal said at paragraph 104: 104. … this Tribunal recognized the present economic difficulties faced by the Province but weighed that against the expert evidence, in addition to the documentary evidence, which suggested these difficulties were temporary in nature.

In that light, this Tribunal is not recommending what it in all likelihood would have had it been reporting in 2013 as was originally intended, but the evidence before us at the hearings in May nonetheless indicates that the Province has the fiscal capacity to ensure financial security of Provincial Court Judges. [ 55 ] The Tribunal did an extensive analysis of the five factors. It took great care to examine the fifth factor, that of the fiscal capacity of the Government.

It reviewed in detail the submissions of the Government, in particular the affidavits of several senior officials of the Department of Finance attesting to the current difficulties. It also reviewed Dr. Feehan’s report which commented on the current economic circumstances and made projections into the future. [ 56 ] The Tribunal had before it the documentation submitted by the Government to the legislature when it tabled the budget for 2015-16. It compared the outlook reflected therein with the conclusions contained in Dr. Feehan’s report.

He opined that, notwithstanding the short-term difficulties due to the fall in the price of oil, the economy would likely improve as the oil markets stabilized, and oil production increased, thereby reversing the fall in revenues occasioned by the unexpected drop in oil royalties. He expressed a cautiously optimistic view of the future. [ 57 ] The budget documents contained a similar cautiously optimistic outlook. The Tribunal quoted from the documents at paragraph 93 of its report.

The following excerpts are representative: … After 10 years of significant growth, economic conditions in Newfoundland and Labrador have weakened but are expected to rebound by 2019. The tremendous potential of Newfoundland and Labrador’s offshore oil resources also bodes well for the economic future of the province. … [ 58 ] The Tribunal considered the economic submissions carefully, and concluded, at paragraph 94: 94. In concluding the analysis of this final factor, the Tribunal acknowledges the political context of the above statements, yet we

cannot ignore how strikingly similar they are to the expert evidence of Dr. Feehan.

While this Tribunal takes into account the current difficulties in not recommending what we in all likelihood would have recommended had the Tribunal been appointed and reported in 2013, we must balance this by also taking into account the apparent temporary nature of the present economic difficulties based upon the evidence presented by both the Province and the Association at the hearings held in late May of this year. … [ 59 ] While my role is not to reconsider the Tribunal’s recommendations, it is useful in reviewing the response to the report to have an appreciation for the considerations that went into their deliberations.

I am satisfied that the Tribunal gave thorough consideration to the submissions and the factors which it was required to apply. Citing a portion of the report gives an indication of the concerns reflected in reaching its recommendations. At paragraphs 125 and 128-31: 125. Regarding the current fiscal capacity and economic conditions in the Province, we have concluded that there are presently difficulties but also that the evidence suggests they are temporary.

The majority of the analysis thus far points in the direction of more compensation for Provincial Court Judges, but we must also take into account the present difficulties the Province is facing. Given the economic realities of the province and the success of its oil industry, had the Tribunal been appointed and reported in 2013 as scheduled, we may well have made recommendations beyond the Maritime average. . . . 128. In recognizing the apparent short-term difficulties, the Association itself recognizes a duty to share the pain. The Association recommended a freeze for the period of 2013 and 2014.

We do not feel, in accordance with the principles and analysis above, that it is appropriate, as in light of the Maritime average, Provincial Court Judges' salaries have been lagging for some time. We do not see the justification for that. In addition, we find that there is fiscal capacity for the Province to compensate Provincial Court Judges in line with Maritime counterparts and that salary increases are necessary to continue attracting highly qualified candidates and to account for increased costs of living. 129.

In keeping with the above analysis, and relying in large part on the Maritime average while discounting for the present economic difficulties (which have only recently arisen part way through the 2013-2017 time frame for this Tribunal), the Tribunal makes the salary recommendation which follows. In our view, we cannot ignore the fact that we now know: prior to the recent and unexpected decline in the price of oil, which has adversely affected the economic situation of the province, the fiscal capacity of the province was very large.

Based upon that (and notwithstanding the positions of the parties that there ought to be no increase for those two year of our mandate), the Tribunal recommends the salary of Provincial Court Judges be increased by 3% effective April 1, 2013 and a further 3% by April, 1 2014. For the 2015 and 2016 years of our mandate, we recommend further increases of 4% in each year. Past increases would be paid to Provincial Court Judges retroactively. 130. These recommendations represent a collective increase of 14% over this Tribunal's mandate.

We recognize that this comes close to accepting the Associations position though, for the reasons stated above, we prefer periodic increases throughout our mandate to arrive at relative parity with maritime Provincial Court Judges. 131. While we recognize the Province's position that a much lower increase is appropriate, we cannot help but note that their position reflects exactly the increase afforded to provincial civil servants over this timeframe. This is not an appropriate comparator based upon the principles we are required to follow.

Nor do the economic circumstance of the Province (viewed in their totality as referred to above) through our mandate justify an increase limited to 5% over four years.

In our view the Tribunal's salary recommendation balances the brighter economic situation in the first two years of our mandate, with the more challenging (but according to the evidence presented to us, a relatively brief downturn in our provincial economic circumstances before returning to previous levels) with the need for relative parity with Maritime Provincial Court Judges. [ 60 ] The Tribunal’s recommendations would have raised salaries to roughly the Maritime Provinces’ average during the four-year period covered.

This would have set salaries at $247,545 as of 2016, the end of the period covered by the Tribunal’s recommendations, by increases of 3% in the first two years, and 4% in the final two years. [ 61 ] On Pensions, the Province proposed a reduction in pensions to bring the pension plan for judges in line with the public service. The Tribunal rejected this proposal, saying at paragraph 175: 175. … To accept that rationale would be to make Judges' pensions contingent upon negotiations government has with the public service unions.

This, by extension, would mean that judicial pensions are determined by a bargaining process whereby Judges would be, in effect, reliant on unions to negotiate their pension. Such a proposition flies in the face of the principles laid out above, especially the second component of financial security as described in the PEI Reference, which dictates that it is inappropriate for the judiciary to engage in any bargaining process with the Provincial Government. [ 62 ] Its recommendation was that there be no change to pensions.

The response of the Government accepted this recommendation. [ 63 ] The report made several other recommendations which were not controversial. Its report was tabled in the House of Assembly on March 17, 2016.

The Government’s Response [ 64 ] On May 26, 2016, the House of Assembly passed a resolution adopting all of the recommendations of the Wicks Tribunal, except the recommendation on salary. It was clear from the evidence that most of the other recommendations were not controversial, and had little cost associated with them. The salary recommendation was the only significant one for both the judges and the Government. The resolution was structured to place nine accepted recommendations in

Schedule A.

Schedule B to the resolution set out the Government’s reasons for rejecting the recommendation on salary. I reproduce that

schedule here in full, as the rationale proffered is central to this application: The recommended increase in salary is rejected for the following reasons: 1. An impartial and independent judiciary is essential to the preservation of the rule of law and the maintenance of a free and democratic society. The Province is committed to providing fair and reasonable compensation to Provincial Court Judges in order to protect these principles and to continue to ensure that excellent candidates seek appointment to the bench. 2. Currently, there are 23 Provincial Court Judges and 5 per diem judges. 3.

The Province recognizes that judges are public servants as opposed to civil servants. This distinction and their important role is reflected in their compensation, which places them outside the range of the highest paid civil servants and beyond the amounts paid to persons in other branches of government, such as Members of the House of Assembly and Ministers of the Crown. 4. While the Province appreciates and recognizes the vital and unique role Provincial Court Judges play in the operation of the justice system, its ability to remunerate judges is not without limit.

Compensation must not only be fair and reasonable, but it must also confirm with the economic realities of this Province. There are substantial financial obstacles to overcome. 5. Budget 2016 clearly shows that the Province’s fiscal situation is unprecedented. The uncontrolled growth in expenditures, previous unsustainable tax and fee reductions, and the dramatic fall in revenues and oil production have produced a serious and unsustainable imbalance that must be corrected.

The province must take action or provincial debt will be increased to unsupportable levels and long- term economic growth will be jeopardized. 6. Further, Budget 2016 is evidence of the impact that the extreme changes in the price of oil have had on the province. In 2008, oil prices peaked at $144 U.S. a barrel. From January to Budget 2016, the average price for oil was $35 U.S. a barrel. In addition, many economic indicators have recorded declines. Real GDP fell by 2.3% as oil production fell by 20.5% due to lower output from Hibernia, Terra Nova and White Rose.

Investment also declined by 8.1% as higher spending on the Muskrat Falls development was offset by lower spending on Vale’s nickel processing facility in Long Harbour, the Hebron project, and residential construction. Employment fell by 1% and the unemployment rate increased by 0.9 percentage points to 12.8% in 2015. 7. Budget 2016 also indicated that economic activity has and will further slow over the next 5 years due to the winding down of activities in Alberta combined with winding down of the development phases of Hebron and Muskrat Falls projects.

There has been a shift in the medium and long term view of commodity prices, such as oil, iron ore and nickel, which has further weakened the province’s revenue base and economic outlook. Development of several projects in the resource sector has been deferred or delayed. Newfoundland and Labrador’s economy is heavily resource-based and thus has been and is expected to continue to be negatively impacted by the global economic climate. 8. The current understanding of the province’s fiscal situation is much different than that upon which the tribunal’s report was based.

Paragraphs 94 and 104 of the Tribunal’s report state, in part, as follow: [94] … While this Tribunal takes into account the current difficulties in not recommending what we in all likelihood would have recommended had the Tribunal been appointed and reported in 2013, we must balance this by also taking into account the apparent temporary nature of the present economic difficulties based upon the evidence presented by both the Province and the Association at the hearings held in late May of this year.

We feel compelled, however, to note (though we have no evidence before us about it given the fact that hearings were held in May) recent media reports indicating that the provincial deficit for the 2015:2016 fiscal year is now projected to markedly increase to $1.8 billion. [104] Finally, on the fifth and perhaps most controversial factor, “The Fiscal Capacity of government in light of Current Economic Conditions”, this Tribunal recognized the recent economic difficulties faced by the Province but weighed that against the expert evidence, in addition to the documentary evidence, which suggested these difficulties were temporary in nature .

In that light, this Tribunal is not recommending what it in all likelihood would have had it been reporting in 2013 as was originally intended, but the

evidence-before us at the hearings in May nonetheless indicates that the Province has the fiscal capacity to ensure financial security ofProvincial Court Judges. (emphasis added) At the time of the previous administration’s submission to the tribunal, the projected deficit was $1.1 billion for 2015/16, which thecurrent government later revised in Budget 2016 to $2.2 billion for 2015/16. Government was facing an even higher unprecedenteddeficit of $2.7 billion for 2016/17, if no fiscal measures had been taken.

As a result of difficult choices, about which the public hasexpressed grave concerns, Budget 2016 is forecasting a deficit of $1.8 billion, unprecedented expenses of $8.5 billion and unprecedentedborrowing of $3.4 billion. The Government has announced that further measures will be required in order to restore fiscal stability andconfidence of capital market investments. On April 15, 2016 DBRS downgraded the province’s credit rating to A (low). However, based on actions taken and commitments forfurther measures, the outlook was changed from negative to stable.

Another rating agency, Moody’s noted “The challenge facing theprovince is substantial, although, we note the government is exercising the full extent of fiscal flexibility Canadian provinces possess,the most we have seen of any province in recent years.” 9. In the existing climate many difficult decisions have been necessary. The effects are universal; every Newfoundlander andLabradorian has been impacted.

In such a climate, to accept the recommendation to increase the salary of Provincial Court Judges wouldbe so contrary to the fiscal restraint measures to which the general population is subject that it could bring the courts, the judiciary andpossibly the administration of justice in the province into disrepute. 10.

While the Province recognizes the vital contribution made by Provincial Court Judges in Newfoundland and Labrador, understandsand respects the work of the Salary and Benefits Tribunal and recognizes and upholds the importance of judicial independence, it isunable to comply with all the recommendations of the tribunal and therefore rejects the recommended salary increase of 3% in 2013-14,3% in 2014-15, 4% in 2015-16, and 4% in 2016-17. 11. As a result, the salary of a Provincial Court Judge will continue at $215,732, for the years 2013-14, 2014-15, 2015-16, and 2016-17. 12.

While the Province continues to be committed to providing fair and reasonable compensation to Provincial Court Judges, economicrealities affect us all. As the jurisprudence reflects, judges are not shielded from sharing the impact of economic restraint in such seriousfiscal circumstances. The Supreme Court of Canada in the PEI Reference (SCC), [1997] 3 SCR 3 stated: [196] … the guarantee of a minimum acceptable level of judicial remuneration is not a device to shield the courts from the effects ofdeficit reduction.

Nothing would be more damaging to the reputation of the judiciary and the administration of justice than a perceptionthat judges were not shouldering their share of the burden in difficult economic times. [65] The effect of the resolution was to impose a salary freeze in each of the four fiscal years within the Tribunal’s mandate. [66] The Judges, through their Association, applied for judicial review of the response of the Province.

It seeks a remedy based onwhat it argues is the direction by the Supreme Court of Canada and other courts in jurisprudence since the mid-1990’s for the purpose ofprotecting the principles of judicial independence “… as articulated in the common law and entrenched in

section 11(

d) of the CanadianCharter of Rights and Freedoms”. It wishes this court to quash the portion of the Resolution passed in the House of Assembly on May26, 2016 and an order to implement the recommendations of the Tribunal respecting salary.

Its grounds include: 1) Systemic delay in the Tribunal process, not only for this tribunal, but over the preceding tribunals since the mid-1990’s; 2) Rejection of the salary recommendations without articulating a legitimate reason for doing so, or responding to theTribunal’s reasoning on its merits; 3) Failure to respect the process set out in the governing legislation to ensure that the purposes of the Tribunal process –preserving judicial independence and depoliticizing the setting of judicial remuneration – have been achieved; [67] I will first review the legal framework governing judicial review of the response of the Government to the Tribunal’s report,including the standard of review, and the factors which the court may consider.

I will address the issues that flow from that frameworkby reference to the factual record before me. Finally I will determine the conclusions which arise from that analysis. Judicial Compensation Tribunals [68] The role of judicial compensation tribunals (sometimes called “commissions” in other provinces) has been discussed by theSupreme Court of Canada on a number of occasions.

There are also decisions of several superior courts and courts of appeal which arerelevant to determining the appropriate approach to be taken by this court. [69] The legal framework is shaped by two significant cases in the Supreme Court of Canada. The case of the PEI Reference wasthe first to formally require a process be established in each jurisdiction to recommend on salaries and benefits for the judiciary. The

second, Provincial Court Judges' Association (New Brunswick) v. New Brunswick (Minister of Justice) , 2005 SCC 44 (the “ Bodner” case), elaborated on the requirements of the process and the nature of the response of the Government. [ 70 ] In the first, the PEI Reference , the Supreme Court articulated a process designed to protect judicial independence. That case arose from a legislated reduction in judicial salaries as part of a budget deficit reduction plan. In a number of criminal cases over which the affected judges presided the accused challenged their independence.

In response, the Court expressed concern that the perception of judges involved in very public negotiations with the Government over salary could diminish respect for the administration of justice.

The court said, at paragraph 131: 131. … in the context of institutional or collective financial security, this imperative demands that the courts both be free and appear to be free from political interference through economic manipulation by the other branches of government, and that they not become entangled in the politics of remuneration from the public purse. [ 71 ] As a consequence the Court mandated the creation of tribunals or commissions to make recommendations on salary and benefits for judges. It was to be a non-binding process, and the Government could accept or reject the recommendations.

But any rejection had to conform to the principles outlined in the case. [ 72 ] Many provincial tribunals or commissions had been established before the PEI Reference on the basis of earlier jurisprudence respecting judicial independence. In this jurisdiction, the Act included a tribunal process. It was similar to the processes mandated in other jurisdictions in Canada. That process required that it be independent, have the mandate to hear submissions from both the judges and the Government, and then deliver recommendations addressing the submissions made.

In making non-binding recommendations, the response of the Government must bear a degree of rationality and respond appropriately to the recommendations made by the Commission or Tribunal. [ 73 ] The PEI Reference confirmed that an independent tribunal system is constitutionally required to protect the independence of the judiciary, and further clarified that direct negotiations between the Government and the judiciary are impermissible. However, given that the court also made clear the process is non-binding, the criteria for the Government’s response appeared to cause confusion.

A series of cases in several provinces gave the Supreme Court an opportunity to elaborate on how the process was to be considered (Cases in Ontario, New Brunswick, Alberta and Quebec considered by the Court are collectively referred to as the “Bodner” decision). [ 74 ] In Bodner , the court set three criteria for analysis of the Government’s response to the recommendations of a commission process. At paragraphs 31 et.seq. , the court re-articulated the test for analyzing the Government’s response set out in the PEI Reference , and added a third, with elaborations: 31.

In the Reference , at para. 183, a two-stage analysis for determining the rationality of the government's response is set out. We are now adding a third stage which requires the reviewing judge to view the matter globally and consider whether the overall purpose of the commission process has been met. The analysis should be as follows:

(1) Has the government articulated a legitimate reason for departing from the commission's recommendations?

(2) Do the government's reasons rely upon a reasonable factual foundation? and

(3) Viewed globally, has the commission process been respected and have the purposes of the commission — preserving judicial independence and depoliticizing the setting of judicial remuneration — been achieved? [ 75 ] The Court went on in paragraphs 32 to 38 to elaborate on each step in the process. At the first stage, the inquiry for the reviewing court is fairly straightforward. It requires a finding that the Government has articulated a response to the tribunal’s recommendations, and has given “legitimate” reasons for any departure from them.

It appears to be more or less a screening mechanism. [ 76 ] The second stage requires an examination of the facts used by the Government to support its response. At this stage the court must consider the rationale put forth by the Government. It may concern social and economic policy as articulated by the Government, and hence attract considerable deference as governmental and legislative judgment.

Then the reviewing court must look at the rationale put forth by the Government as to whether it justifies the response. ( Bodner , at paragraph 37 ). [ 77 ] The third stage requires consideration of the response of the Government from a global perspective. The reviewing court must keep in mind the purpose of the tribunal process – that is to preserve judicial independence and to de-politicize the setting of judicial remuneration ( Bodner , at paragraph 38 ).

This may require an examination of the circumstances and environment surrounding the tabling of the Government’s resolution in the legislature. [ 78 ] These criteria comprise the basis on which a reviewing court must consider the response of the Government. A significant degree of deference is owed to the decisions of the Government and the legislature. However, the response is subject to a limited form of judicial review. At paragraph 29 of Bodner the Supreme Court described a standard of “rationality”. It explained the standard in paragraph 30: 30.

The reviewing court is not asked to determine the adequacy of judicial remuneration. Instead, it must focus on the government's response and on whether the purpose of the commission process has been achieved. This is a deferential review which acknowledges both the government's unique position and accumulated expertise and its constitutional responsibility for management of the province's financial affairs.

[ 79 ] My analysis will examine the Bodner criteria as applied to the response of the Government The Bodner Criteria [ 80 ]

Schedule B to the Government’s resolution, setting out the reasons for rejecting the salary recommendations, was reproduced above. Essentially, the Government states that, between the time when submissions were made to the Tribunal (May 2015) and the time the Tribunal’s report was considered by Government (May 2016), there was a material change in the Province’s existing and projected fiscal situation, as evidenced by Budget 2016. The result of this was that fiscal restraint measures, to which the general population is subject, had to be taken.

Failure to require the Provincial Court Judges to share in this burden could, it is stated, “bring the courts, the judiciary and possibly the administration of justice into disrepute”. [ 81 ] I also note that between the time of the Government’s submissions to the Tribunal in May, 2015, and its reporting in December, 2015, there was a Provincial election resulting in a new Government of a different political party. As a consequence, the Government which was required to respond to the recommendations when the legislature reopened in 2016 comprised the party which, one year earlier, had been in opposition.

The two parties changed places in the House during that period. That fact is relevant in a later discussion about the politicization involved in the process. [ 82 ] In stating the basis for rejecting the recommendation on salary, the Resolution acknowledged the objectives of an “impartial and independent judiciary” and expressed a commitment to ensuring this objective is maintained.

The Resolution went on to describe the changed fiscal circumstances facing the Province, in particular surrounding the drop in revenues from oil production. [ 83 ] It referred to paragraph 94 of the Tribunal’s report which, as noted above, provided its analysis of the economic situation and concluded that the current difficulties were of a temporary nature. The Resolution referred to the 2016 Budget documents which set out what it considered to be a changed set of circumstances from that considered by the Tribunal.

It concluded by citing from paragraph 196 the Supreme Court of Canada in the PEI Reference : 196. … the guarantee of a minimum acceptable level of judicial remuneration is not a device to shield the courts from the effects of deficit reduction.

Nothing would be more damaging to the reputation of the judiciary and the administration of justice than a perception that judges were not shouldering their share of the burden in difficult economic times. … The First Bodner Criterion – Legitimate Reason [ 84 ] The first question I have to determine is whether the Resolution satisfies the requirement for a “legitimate reason” for rejecting the recommendation on salary. Generally speaking, where such a reason is put forward by Government, it will be found to be legitimate (for example, see Aalto v. Canada (Attorney General) , 2010 FCA 195 ).

To the extent that there was a material change in the Province’s projected fiscal capacity in the period between the release of the report and the consideration of the report, this is appropriately considered by Government. In saying this, I note this was one of the five factors explicitly considered by the Tribunal. [ 85 ] The Judges argued that the response of the Government did not satisfy the first criterion. It argued that the response did not engage with either the deliberations or the recommendations of the Tribunal.

It referred to the extensive economic analysis considered by the Tribunal, and the considerations of the volatility of the fiscal situation, mainly due to the fluctuations in the price and production of oil. The Government, in its argument, asserted that the “dire fiscal situation facing the province” was in fact, a rational and legitimate response to the salary recommendations.

It also noted that the situation had deteriorated between the time of the release of the Tribunal’s report and its consideration by the legislature some months later. [ 86 ] In defining the deteriorating fiscal problem, the Government has presented a rational response to one of the factors considered by the Tribunal in its report. It has addressed in substance only the fifth factor considered by the Tribunal, and has made what I would term superficial, passing reference to the other factors. It has not addressed the other substantive factors which were uppermost in the Tribunals deliberations.

It has not seriously responded to the importance of the work of judges, nor has it addressed the requirement to attract the “most highly qualified candidates” into the judiciary, comparisons with other relevant groups, and the question of the cost of living as it impacts judges. [ 87 ] This factor is the most serious addressed by the Tribunal and the Government. It appears to me that the fiscal difficulties facing the Province constitute a legitimate reason for departing from the recommendations.

Considering the first criterion, as I understand the authorities, the Government is only obliged to raise a prima facie reason for rejection. At this stage, the analysis is a screening mechanism ( Bodner , at paragraph 32 ). On its face, therefore, I find that the Government’s Resolution satisfies the first of the Bodner criteria. The Second Bodner Criterion - Reasonableness [ 88 ] The second criterion requires me to examine whether the facts satisfy the test of reasonableness, in that they respond to the reason articulated under the first criterion.

In its resolution, the Province outlines how, in the period between the release of the Report and its consideration by the legislature, the fiscal state of the Province had changed. Evidence was provided to support the resolution by way of affidavits from Mr. Chris Butt, the Province’s Director of Fiscal Policy, and Ms. Rose Aucoin, the Province’s Manager of Economic Information Services. These affidavits commented on the state of the Province’s finances, drawing from documents issued in the budgets of 2015 and 2016.

I accept that these affidavits are properly admissible as they do not “add to the reasons given in the Government’s response”; instead, “They simply go into the specifics of the factual foundation relied upon by the Government” ( Bodner , at paragraph 64 ). [ 89 ] This second criterion is critically important to the whole question of judicial independence, and requires that a high standard be applied to the response of the Government where it rejects a Tribunal’s recommendations.

This stage is much more than a screening mechanism, but must, in a substantive manner, address both the reasons for rejection and the manner in which the Government is addressing the problem so articulated.

[ 90 ] In the PEI Reference , Chief Justice Lamer provides an extensive discussion on the rationale. In the context of evidence of salary negotiations between judges and Governments in several provinces, the Chief Justice noted, at paragraph 186: 186. … For the judiciary to engage in salary negotiations would undermine public confidence in the impartiality and independence of the judiciary, and thereby frustrate a major purpose of s. 11 (d) .

As the Manitoba Law Reform Commission has noted (in the Report on the Independence of Provincial Judges (1989), at p. 41): ... it forces them [i.e. judges] into the political arena and tarnishes the public perception that the courts can be relied upon to interpret and apply our laws without concern for the effect of their decisions on their personal careers or well-being (in this case, earnings). 187. Second, negotiations are deeply problematic because the Crown is almost always a party to criminal prosecutions in provincial courts.

Negotiations by the judges who try those cases put them in a conflict of interest, because they would be negotiating with a litigant. The appearance of independence would be lost, because salary negotiations bring with them a whole set of expectations about the behaviour of the parties to those negotiations which are inimical to judicial independence. [ 91 ] While there is no suggestion in this case that there were any direct negotiations between the judges and the Government, the rationale for a prohibition underlies the strong requirement for an effective and respected process for setting judicial salaries.

Judges are not permitted to engage in lobbying, public pressure or job action to resolve salary issues as are other public sector employees through their unions. The preservation of judicial independence depends entirely on the independent tribunal process, and the assurance that the Government will not reject the recommendations without a compelling reason. [ 92 ] To again underline the importance of this direction, the Chief Justice, in the PEI Reference went on to emphasize the importance of maintaining an effective process. He commented, at paragraphs 189-90: 189.

I recognize that the constitutional prohibition against salary negotiations places the judiciary at an inherent disadvantage compared to other persons paid from the public purse, because they cannot lobby the executive and the legislature with respect to their level of remuneration. The point is put very well by Douglas A. Schmeiser and W.

Howard McConnell in The Independence of Provincial Court Judges: A Public Trust (1996), at p. 13: Because of the constitutional convention that judges should not speak out on political matters, judges are at a disadvantage vis-à-vis other groups when making a case to governments for increments in salaries. I have no doubt that this is the case, although to some extent, the inability of judges to engage in negotiations is offset by the guarantees provided by s. 11 (d) .

In particular, the mandatory involvement of an independent commission serves as a substitute for negotiations, because it provides a forum in which members of the judiciary can raise concerns about the level of their remuneration that might have otherwise been advanced at the bargaining table. Moreover, a commission serves as an institutional sieve which protects the courts from political interference through economic manipulation, a danger which inheres in salary negotiations. 190.

At the end of the day, however, any disadvantage which may flow from the prohibition of negotiations is a concern which the Constitution cannot accommodate. The purpose of the collective or institutional dimension of financial security is not to guarantee a mechanism for the setting of judicial salaries which is fair to the economic interests of judges. Its purpose is to protect an organ of the Constitution which in turn is charged with the responsibility of protecting that document and the fundamental values contained therein.

If judges do not receive the level of remuneration that they would otherwise receive under a regime of salary negotiations, then this is a price that must be paid. [ 93 ] Because judges are not permitted to enter into the political forum, nor are they permitted to use other forms of direct negotiation with the executive branch, they have only one opportunity to influence the outcome. They may make submissions to the Tribunal. The Government, on the other hand, designs, appoints, receives and responds to the tribunal process.

Judges are not permitted to revisit the recommendations, and can only depend on the tribunal recommendations.

In these circumstances, where the values associated with judicial independence are of such importance to our constitutional democracy, the protections are necessary not to protect the salaries of judges, but to ensure the existence of independent courts that are charged with protecting the principles contained in our constitution. [ 94 ] To further support the notion that the process for determining judges’ remuneration is separate and apart from that applying to other groups, the Tribunal commented on the Government’s submission that judges’ pensions should be tied to that negotiated for members of public sector unions.

It said, at paragraph 175 of its report: 175. Most of all though, we reject the Province’s submissions on this issue as their primary justification is that judicial pensions ought to be in line with those of the public service. To accept that rationale would be to make Judges’ pensions contingent upon negotiations government has with the public service unions. This, by extension, would mean that judicial pensions are determined by a bargaining process whereby Judges would be, in effect, reliant on unions to negotiate their pension.

Such a proposition flies in the face of the principles laid out above, especially the second component of financial security as described in the PEI Reference , which dictates that it is inappropriate for the judiciary to engage in any bargaining process with the Provincial Government. [ 95 ] Besides the inappropriateness of using public sector collective bargaining as a surrogate to set salaries of judges, there are

different considerations at play. The tribunal noted these in its decision not to accept the Government’s submission on pensions. I note in passing that the Government, in its response, accepted this recommendation of the Tribunal. [ 96 ] These are strong considerations, and they support the concept of a tribunal process which is both independent, impartial and effective. Has the Government’s response in this case met that standard? [ 97 ] The Resolution of the House of Assembly rejected the salary recommendations. The reasons related to the serious fiscal difficulties facing the Province.

Paragraph 5 of the Resolution refers to the “unprecedented” nature of the fiscal situation, which has produced a “serious and unsustainable imbalance that must be corrected”. [ 98 ] The affidavits of Mr. Butt and Ms. Aucoin provide additional particulars regarding the Province’s fiscal difficulties.

Given the foregoing, the Association admitted that the economic outlook set out in Budget 2016 is less favorable than that presented to the Tribunal. [ 99 ] But despite the relatively detailed description of the changed economic circumstances in the Resolution, both the resolution and the affidavit evidence offer a particularly one-sided view of the situation.

There is extensive comment on the fiscal problem, but very little on the restraint measures applied, and how they affected other groups within the public sector, and, indeed, the population at large, as distinct from the impact on judges. [ 100 ] An analysis which focused on how the restraint measures sought to be imposed on the judges compared with how others were treated is essential to determining whether the response of the Government was part of a general package of restraint measures applying to the public sector as a whole, or whether the judges were singled out.

The evidence before me indicated the latter. [ 101 ] The evidence, including the affidavits and the budget documents submitted, indicated that the Government response to the fiscal situation was primarily through revenue measures aimed at the general population. These measures applied equally to judges, as members of the public. There were no generalized restraint measures applying to public sector salaries.

The Government indicated that it would rely on negotiations with the public sector unions to attempt to address the fiscal imbalance. [ 102 ] It was evident from the documentation submitted that the Government’s response had the effect of treating the judges adversely when compared with public sector employees. While I would not consider it appropriate to have judges’ remuneration follow the generalized collective bargaining, it does point to the lack of legitimacy in the response.

During the term covered by the Wicks Tribunal recommendations, April 1, 2013 to March 31, 2017, the Tribunal recommended increases of 3%, 3%, 4%, 4% in each of the four years. While not on the same cycle of increases, during the same period, the public sector received increases of 0%, 2%, and 3% in each of 2013, 2014 and 2015. It would appear that judges salaries were singled out as deserving different treatment from all others paid out of the public treasury during this period. [ 103 ] In this sense the Resolution was not legitimate in its response to the tribunal’s recommendations.

Legitimacy would have required at least an articulation of why judges’ salaries should attract different treatment, and an explanation of why, if the fiscal situation was so dire, the Government did not see fit to have a generalized program of restraint applicable to everyone paid from public funds. It was not appropriate to treat judges differently without first making such submissions to a Tribunal. [ 104 ] Even if there had been a generalized freeze in salaries applicable to everyone, the response failed to acknowledge the differing impact on judges as compared with other public employees.

In Newfoundland Association of Provincial Court Judges v. Newfoundland , the Court of Appeal heard a similar application by judges in the context of generalized restraint legislation. The Government decided to defer consideration of a tribunal report until the end of the restraint period. Court found that the deferral was contrary to the process mandated by the Supreme Court in respect of salaries of judges. However, in respect of the freeze, Justice Green commented on the differential impact of a freeze on judges, at paragraph 191: 191.

Furthermore, there was no recognition, in the government's analysis, of the differing impact which a freeze would have on judges, who were on a fixed salary, and other public servants who had their wage scales frozen but were still able, within the freeze period, to receive actual salary increases by moving up steps within the frozen scales.

In its submission to the Whalen tribunal, the government enunciated the principle that the judges should not be expected to bear "a disproportionate burden of restraint measures." Yet, the fact that some comparable highly paid senior public servants, such as the Deputy Minister of Justice, were able to continue to receive real money increases during the period of the freeze, and thereby avoid being "frozen" in actual terms relative to the financial position of judges, might well be perceived as requiring the judges to bear a "disproportionate burden" and would thereby contradict the principle underpinning the rationale for the government's submissions to the tribunal.

Whilst it is true that there may be justifications, such as the elimination of existing inequities, for allowing scaled public servants to continue to receive actual money increases when the judges did not, it surely was incumbent on the government, in light of the principle espoused at the tribunal hearings, to provide a reason for adopting a different policy position and maintaining, in the face of the Whalen recommendations, that the judges should receive no increases whatsoever. [ 105 ] In

summary, on this point, the Resolution of the legislature did not engage the rationale of the Tribunal, nor did it provide a legitimate answer as to why judges should have been singled out. [ 106 ] The Association also noted that the Government, in its submission to the Tribunal, proposed that the same increases applicable to the public service ought to be applied to judges’ compensation. That would have provided for an increase of 2% and 3% in each of 2015 and 2016 respectively.

The Resolution placed before the House was inconsistent with the Government’s own view some months earlier. [ 107 ] One fairly minor event illustrates how the Government’s claims to legitimacy in its response is called into question. In a press release issued June 10, 2016, two weeks after rejection of the tribunal’s recommendations, the Government announced implementation of a settlement with the Professional Association of Interns and Residents (the “Interns”).

In the announcement, the Government declared that parity with salaries of interns in the Atlantic Province had been achieved by this agreement, which provided increases to achieve that purpose. The agreement covered the period from 2013 to 2016, the same as that covered by the tribunal recommendations.

[ 108 ] The Interns’ agreement demonstrates the differential treatment at a time when the Government claimed there were dire fiscal difficulties. Without an explanation of why the judges should be singled out, this reinforces that the response did not meet the test of legitimacy. [ 109 ] The Resolution, in paragraph 5, indicated that the fiscal difficulties were unsustainable, and “. . . the province must take action or provincial debt will be increased . . . .” Based on the evidence before the court, it appears that, for the years 2013-17, the only action involving salaries was taken in respect of the judges.

That is not a legitimate response. [ 110 ] The Resolution in paragraph 12 asserts that judges are not “. . . shielded from sharing the impact of economic restraint . . . .” The evidence indicates a disproportionate impact on judges. As I noted above, most of the measures taken by the Government to address the fiscal difficulties were revenue measures – increases in taxes and fees. Judges, along with all other citizens, shared in that burden. However, for several of the years covered by the Tribunal report, only judges’ salaries were frozen.

Most other individuals paid out of public funds received salary increases during that period. In rejecting the report, the Government’s response was not legitimate in that the measures it wished to impose on judges were disproportionate to the measures involving other groups. All other groups who were subject to salary freezes in recent years had the benefit of a collective bargaining process, and access to political processes to make their case. [ 111 ] When I consider the second criteria for examination of the Government’s response as set out in Bodner , I am satisfied that it falls short.

The Government’s reasons articulated only the fiscal difficulties, without indicating an overall approach to salary reduction, leading me to conclude that the judges were being singled out for differential treatment. Such a difference in treatment required more explanation where the Government is asserting that the judges are simply sharing in the burden that all must carry. [ 112 ] The issue of judges’ salaries during times of fiscal difficulties has been addressed in earlier Tribunal reports.

The Hoegg Tribunal, reporting in 2001, commented on this issue at page 11-12: The Tribunal accepts that the Province’s economic climate is a weighty factor to be considered in determining appropriate Provincial Court judges’ compensation, and it has done so. However, the Tribunal is of the view that the independence of the Provincial Court is of such importance that compensation for judges must be considered in isolation from some of the factors normally considered by government in paying its employees.

Owing to the distinctiveness of this small group there is no basis for a “ripple effect” of salary increases for judges into compensation schemes for other groups paid from the public purse.

Judges are different from provincially paid employees; they are a constitutionally identified and protected group. [ 113 ] The Steele Tribunal report, tabled in May 2006, provided a perspective at paragraph 188: 188. … The recommendations are made in the context that for the most part, during the period of the Tribunal’s mandate, there clearly exists a broad-based, uniform, government policy with respect to the salaries, and salary increases applicable to “persons paid from the public purse” in the provincial public sector.

In many respects this reality presents a compelling consideration for the Tribunal. … [ 114 ] Two points arise from these extracts. First, that judges’ compensation issues must be considered separately from other employees in the public sector. Second, that any “broad-based” initiative respecting restraint in salaries across the public sector represents a “compelling consideration”

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