Ontario English Catholic Teachers Association v. Ontario (Attorney General), 2024 ONCA 101

COURT OF APPEAL FOR ONTARIO CITATION: Ontario English Catholic Teachers Association v. Ontario (Attorney General), 2024 ONCA 101 DATE: 20240212 DOCKET: COA-23-CV-0010 Doherty, Hourigan and Favreau JJ.A.

BETWEEN Ontario English Catholic Teachers Association, Karen Ebanks and Alexandra Busch Applicants (Respondents) and His Majesty the King in Right of Ontario, as represented by the Attorney General of Ontario, the President of the Treasury Board, and the Minister of Education Respondents (Appellants) AND BETWEEN Ontario Secondary School Teachers’ Federation, Paul Wayling and Melodie Gondek Applicants (Respondents) and His Majesty the King in Right of Ontario, as represented by the President of the Treasury Board, the Minister of Education, and the Attorney General Respondents (Appellants) AND BETWEEN The Elementary Teachers’ Federation of Ontario, Association des enseignantes et des enseignants franco-ontariens, Jade Alexis Clarke, Christine Galvin, and Yves Durocher Applicants (Respondents) and His Majesty the King in Right of Ontario, as represented by the Attorney General of Ontario, the President of the Treasury Board, and the Minister of Education Respondents (Appellants) AND BETWEEN Ontario Nurses’ Association, Vicki McKenna and Beverly Mathers Applicants (Respondents) and His Majesty the King in Right of Ontario, as represented by the Attorney General of Ontario, the President of the Treasury Board, Minister of Health and Minister of Long-Term Care Respondents (Appellants) AND BETWEEN Ontario Public Service Employees Union and Warren (“Smokey”) Thomas, Eduardo Almeida,

Sandra Cadeau, Donna Mosier, Erin Cate Smith Rice, and Heidi Steffen-Petrie Applicants (Respondents) and The Crown in Right of Ontario, as Represented by the Attorney General of Ontario and the President of the Treasury Board Respondents (Appellants) AND BETWEEN Ontario Federation of Labour, Canadian Union of Public Employees, Service Employees International Union Local 1 Canada, Ontario Confederation of University Faculty Associations, Association of Professors of the University of Ottawa, Brescia University Faculty Association, Brock University Faculty Association, Faculty Association of the University of Waterloo, Huron University College Faculty Association, King’s University College Faculty Association, Lakehead University, Laurentian University Faculty Association, McMaster University Academic Librarians’ Association, McMaster University Faculty Association, Nipissing University Faculty Association, Ontario College of Art and Design Faculty Association, Queen’s University Faculty Association, Renison Association of Academic Staff, Ryerson Faculty Association, St.

Jerome’s University Academic Staff Association, Trent University Faculty Association, University of Ontario Institute of Technology Faculty Association, University of Toronto Faculty Association, University of Western Ontario Faculty Association, Wilfrid Laurier University Faculty Association, Windsor University Faculty Association, York University Faculty Association, Association of Management, Administrative and Professional Crown Employees of Ontario, United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, Public Service Alliance of Canada, Society of United Professionals Local 160, Amalgamated Transit Union Local 1587, Canadian Office and Professional Employees Union, International Brotherhood of Electrical Workers Local 636, Workers United Canada Council, Professional Institute of the Public Service of Canada, United Food and Commercial Workers Local 175, Association des enseignantes et des enseignants franco-ontariens unité 203, Aefo unité 103, Educational Assistants Association, Halton District Education Assistants Association, Dufferin-Peel Education Resource Workers’ Association, Association of Professional Student Services Personnel, Unite Here Local 272, Seiu Local 2, Canadian Media Guild, Local 30213 of the Newspaper Guild/Communications Workers of America, Ron Babin, Stephanie Bangarth, Carmen Barnwell, Rocklyn Best-Pierce, Pamela Boniferro, Andrew Brake, Neil Brooks, Natasha Brouillette, Daniel G.

Brown, Colleen Burke, Mitchell Champagne, John Ciriello, Fabrice Colin, Claire Copp, William Cornet, Allyson Cullen, Gautam Das, Ryan Devitt, Timothy Edney, Melissa Ellis, Kimberly Ellis-Hale, Pedram Karimipour Fard, Carrie Gerdes, Alison Griggs, Myron Groover, Elkafi Hassini, Elizabeth Hanson, Jean-Daniel Jacob, Melissa Jean, Betty Jones, Nadia Kerr, Nathan Kozuskanich, Sahver Kuzucuoglu, Min Sook Lee, Richard Lehman, David Lengyel, Kristina Llewellyn, Susan Lucek, Elizabeth Macdougall- Shackleton, Terry Maley, Meredith Martin, Brandi Matthias, Stephanie Mcknight, Lucie Ménard, David Monod, David R.

Newhouse, Kimberly Nugent, Lisa Pattison, Louis Pelletier, Tom Pocrnick, Kevin Porter, Wanda Reid, Pauline Rickard, Lois Ross, Lorna Rourke, Allan Rowe, Ellen Simmons, Colleen Dietrich Sisson, Ryan Studinski, Alberto Tonero, Ari Johan Vangeest, Joy Wakefield, Judy Watson, Michelle Webber, Don Wilson, Peter Zimmerman, and Terezia Zoric, on their own behalf and on behalf of all other employees in bargaining units affected by this Application Applicants (Respondents) and His Majesty the King in Right of Ontario, as represented by the Attorney General of Ontario and the President of the Treasury Board Respondents (Appellants) AND BETWEEN Unifor, Kelly Godick, Sarah Braganza, and Kathleen Atkins Applicants (Respondents) and His Majesty the King in Right of Ontario, as represented by the Attorney General of Ontario and the President of the Treasury Board Respondents (Appellants) AND BETWEEN Carleton University Academic Staff Association, Angelo Mingarelli, Root Gorelick, and R.

Gregory Franks, on their own behalf, and on behalf of all the members of the Carleton University Academic Staff Association

Applicants (Respondents) and The Crown in Right of Ontario, as represented by the President of the Treasury Board Respondents (Appellants) AND BETWEEN Society of United Professionals, Local 160 of the International Federation of Professional and Technical Engineers, Jo-Ann Kinnear, Cindy Roks, and Janet Sakauye Applicants (Respondents) and His Majesty the King in Right of Ontario, as represented by the Attorney General of Ontario and the President of the Treasury Board Respondents (Appellants) AND BETWEEN Power Workers’ Union (Canadian Union of Public Employees, Local 1000), Andrew Clunis and Robert Busch Applicants (Respondents) and The Crown in Right of Ontario, as represented by the President of the Treasury Board, and the Attorney General of Ontario Respondents (Appellants) Peter Griffin, Nina Bombier and Samantha Hale, for the appellants His Majesty the King in Right of Ontario et al .

Paul Cavalluzzo and Balraj Dosanjh, for the respondents Ontario English Catholic Teachers Association et al. Susan Ursel, Karen Ensslen and Emily Home, for the respondents Ontario Secondary School Teachers’ Federation et al. Howard Goldblatt and Benjamin Piper, for the respondents Elementary Teachers’ Federation of Ontario et al. Janet Borowy and Danielle Bisnar, for the respondents Ontario Nurses’ Association et al. David R. Wright, Mae Jane Nam and Rebecca Jones, for the respondents Ontario Public Service Employees Union et al.

Steven Barrett and Melanie Anderson, for the respondents Ontario Federation of Labour et al. Anthony Dale, Dijana Simonovic and Jenna Meguid, for the respondents Unifor et al. Colleen Bauman, for the respondents Carleton University Academic Staff Association et al . Michael Wright, Alex St. John and Nora Parker, for the respondents Society of United Professionals et al. Andrew Lokan and Shyama Talukdar, for the respondents Power Workers’ Union et al.

George Avraam and Ajanthana Anandarajah, for the intervener Canadian Association of Counsel to Employers Tim Gleason and Adrienne Lei, for the intervener Canadian Civil Liberties Association Christine Davies, Danielle Sandhu and Kat Owens, for the intervener Women’s Legal Education and Action Fund Inc. Heard: June 20-22, 2023 On appeal from the order of Justice Markus Koehnen of the Superior Court of Justice, dated November 29, 2022, with reasons reported at 2022 ONSC 6658 , 165 O.R. (3d) 1. TABLE OF CONTENTS

Favreau J.A. : 11 A. OVERVIEW .. 11 B. THE ACT AND THE SCOPE OF ITS APPLICATION . 13

(1) Preamble, purpose and other preliminary matters . 14

(2) Employees affected . 15

(3) Scope of compensation affected and length of “moderation period” 16

(4) Enforcement, oversight and exemptions . 19 C. THE RESPONDENTS . 20 D. THE APPLICATION JUDGE’S DECISION . 25

(1) Application judge’s finding that the Act violates s. 2(

d) of the Charter 25

(2) Application judge’s finding that s. 1 of the Charter does not save the Act 28

(3) Remedy . 30 E. ISSUES ON APPEAL . 31 F. THE STANDARD OF REVIEW .. 31 G. DOES THE ACT INFRINGE S. 2(

D) OF THE CHARTER ? . 33

(1) General principles regarding protection of collective bargaining under s. 2(

d) of the Charter 34

(2) Previous wage restraint decisions . 40 (

a) Decisions challenging the Expenditure Restraint Act 42 (

b) Manitoba wage restraint legislation decision . 49 (

c) General principles that arise from prior wage restraint legislation decisions 52

(3) Application of s. 2(

d) jurisprudence to this case . 57 (

a) The government did not engage in a significant process of collective bargaining or consultation before passing the Act 59 (

b) The Act removes the ability to negotiate over significant matters . 64 (

c) The Act does not provide a meaningful process for exemption . 67 (

d) The Act does not match other collective agreements negotiated in the public sector in the same time period . 70

(4) Conclusion on s. 2(

d) interference . 72 H. IS THE ACT SAVED BY S. 1 OF THE CHARTER ? . 73

(1) Pressing and substantial objective . 75 (

a) Definition of objective . 76 (

b) The objective is pressing and substantial 80

(2) Rational connection . 88

(3) Minimal impairment 94

(4) Proportionality . 99

(5) Conclusion on s. 1 of the Charter 103 I. REMEDY . 103 J. CONCLUSION AND DISPOSITION . 104 Hourigan J.A. (dissenting) : 105 A. INTRODUCTION . 105

B. ANALYSIS . 106

(1) Separation of Powers . 106

(2) Section 2(d) 109 (

i) Association Rights and Collective Bargaining . 109 (ii) Distinguishing Factors . 114 (

a) Economic Crisis . 115 (

b) Bargaining Outcomes . 115 (

c) Pre-legislation Negotiations and Consultation . 118 (

d) Renegotiated Agreements . 122 (

e) Summary Regarding Distinguishing Factors . 123 (iii) Compensation and Other Gains . 123 (iv) Impact on the Right to Strike . 129 (

v) Summary Regarding s. 2(d) 132

(3) Section 1 Analysis . 133 (

i) Background . 133 (ii) Oakes Test 135 (

a) Pressing and Substantial Objective . 136 (

b) Rational Connection . 141 (

c) Minimally Impairing . 145 (

d) Balancing Step . 148 (

e) Conclusion Regarding s. 1 . 151

(4) Reading Down . 153

(5) Disposition . 154 Favreau J.A.: A.

Overview [ 1 ] In 2019, the Ontario legislature passed Bill 124, the Protecting a Sustainable Public Sector for Future Generations Act, 2019 , S.O. 2019, c. 12 (“Bill 124” or the “Act”), which imposed a 1% cap per year on increases to salary rates and compensation for three years for employees in the broader public sector. [ 2 ] The respondents, which include organizations that represent employees in the broader public sector, brought applications challenging the Act on the basis that it violated their members’ rights to freedom of expression (s. 2(b)), freedom of association (s. 2(d)) and equality (s. 15) under the Canadian Charter of Rights and Freedoms . [ 3 ] The application judge granted the applications, finding that the Act violated the respondents’ freedom of association and that this violation was not saved by s. 1 of the Charter .

The application judge did not accept the arguments that the Act violated the respondents’ s. 2(

b) or s. 15 rights. [ 4 ] His Majesty the King in Right of Ontario (“Ontario”) [1] appeals on the basis that the application judge’s decision is contrary to decisions of the Supreme Court, this court and other appellate courts that have found similar wage restraint legislation to be constitutional. Ontario also argues that the application judge erred in his analysis of s. 2(

d) by essentially turning the right to freedom of association, which the Supreme Court has said is a procedural right, into a substantive right. Ontario further contends that the application judge erred in his analysis and application of s. 1 of the Charter by failing to sufficiently defer to its policy choices in the face of a pressing need to address the deficit through control of public sector wages and compensation. [ 5 ] I would dismiss the appeal with one exception. I agree with the application judge that the Act violates the s. 2(

d) rights of broader public sector represented employees in Ontario and that it is not saved by s. 1. Taking into consideration the context in which Bill 124 was introduced and the restraints imposed by the Act, I am satisfied that the Act substantially interferes with the respondents’

right to participate in good faith negotiation and consultation over their working conditions.

The circumstances of this case are distinguishable from other cases where wage restraint legislation was deemed constitutional because, here, there was no meaningful bargaining or consultation before the Act was passed, the Act significantly restricts the scope and areas left open for negotiation in the collective bargaining process, there is no meaningful mechanism for collective agreements to be exempted from the Act, and public sector collective agreements to which the Act does not apply generally provide for higher annual wage increases than 1%.

Further, I find that the Act is not saved by s. 1 of the Charter because it does not minimally impair the respondents’ right to freedom of association, and because the Act’s deleterious effects outweigh its benefits. [ 6 ] However, the application judge erred in declaring the entire Act unconstitutional. The Act applies to represented and non- represented employees in the broader public sector. Non-represented employees, given that they do not bargain collectively, do not benefit from the same protections as their represented counterparts under s. 2(

d) of the Charter . Accordingly, the application judge’s declaration was overly broad, and should be limited to a declaration that the Act is unconstitutional in so far as it applies to represented employees. [ 7 ] I start with a review of the Act, the parties and their interests, and the application judge’s decision. I then address the s. 2(

d) and s. 1 analyses. It is in the context of these analyses that I provide a more detailed review of the evidence, where relevant. B. The Act and the scope of its application [ 8 ] Bill 124 was introduced in the Ontario legislature on June 5, 2019, and received royal assent on November 7, 2019. [ 9 ] The Act imposes a three-year “moderation” period on compensation, including salary rates, for all employees in the broader public sector. For those three years, compensation increases are not to exceed 1% per year.

The Act applies to represented and non- represented employees. [ 10 ] In order to properly address the issues on appeal, it is helpful to review the scope and application of the Act in some detail.

(1) Preamble, purpose and other preliminary matters [ 11 ] As indicated above, the

short title of the Act is Protecting a Sustainable Public Sector for Future Generations Act, 2019 . Its long title is “An Act to implement moderation measures in respect of compensation in Ontario’s public sector”. [ 12 ] The

preamble to the Act emphasizes the government’s goal of reducing the deficit and balancing its budget, stating that “Ontario’s accumulated debt is among the largest subnational debts in the world”. The

preamble also states that sustaining the province’s finances is in the public interest and is needed to “maintain important public services”, and that the “[g]overnment also seeks to protect front-line services and jobs of the people who deliver them.” The

preamble then addresses the role of public sector compensation in maintaining a sustainable public sector. In doing so, the

preamble states that compensation represents a “substantial proportion” of government program expenses and that “the growth in compensation costs must be moderated to ensure the continued sustainability of public services for the future.” The

preamble further states that the measures imposed by the Act “would allow for modest, reasonable and sustainable compensation growth for public sector employees” and that, for represented employees, the measures “respect the collective bargaining process, encourage responsible bargaining, and ensure that future bargained and arbitrated outcomes are consistent with the responsible management of expenditures and the sustainability of public services.” The

preamble concludes with a statement that the “[g]overnment believes that the public interest requires the adoption, on an exceptional and temporary basis, of the measures” in the Act. [ 13 ] Besides the

preamble, s. 1 states that the purpose of the Act is “to ensure that increases in public sector compensation reflect the fiscal situation of the Province, are consistent with the principles of responsible fiscal management and protect the sustainability of public services.” [ 14 ]

Section 3 of the Act explicitly states that “the right to bargain collectively” is preserved, subject to the provisions of the Act.

Section 4 preserves the right to strike lawfully.

(2) Employees affected [ 15 ] Pursuant to s. 5(1), the Act applies to employers in the broader public sector, including to the Crown, Crown agencies, school boards, universities and colleges, hospitals, licensed not-for-profit long-term care homes, and children’s aid societies. It also applies to not-for-profit organizations that received at least $1 million in funding from the government in 2018. [ 16 ] Section 5(2) of the Act specifies categories of employers to which the Act does not apply.

These include municipalities and for- profit organizations. [ 17 ] Pursuant to s. 8, the Act applies to “bargaining organizations”, which include unions and other organizations that bargain collectively on behalf of the broader public sector employees affected by the Act. In addition, the Act applies to the non-represented employees in the broader public sector.

(3) Scope of compensation affected and length of “moderation period” [ 18 ] The Act limits “salary rate” and “compensation” increases during the moderation period. Salary is a subset of compensation. [ 19 ] The Act defines “salary rate”, at s. 2, as:

[A] base rate of pay, whether expressed as a single rate of pay, including a rate of pay expressed on an hourly, weekly, bi-weekly, monthly, annual or some other periodic basis, or a range of rates of pay, or, if no such rate or range exists, any fixed or ascertainable amount of base pay. [ 20 ] The Act defines “compensation” very broadly as meaning “anything paid or provided, directly or indirectly, to or for the benefit of an employee, and includes salary, benefits, perquisites and all forms of non-discretionary and discretionary payments”: s. 2.

As a practical matter, and as found by the application judge, it is understood that compensation includes matters such as pension contributions, vacation days, sick days, bereavement days, meal and travel allowances, and any other benefits to which a monetary value can be assigned. [ 21 ] Sections 9 to 16 of the Act address the limits on increases to salary rates and compensation during the moderation period for represented employees covered by the Act. [ 22 ] Pursuant to s. 10(1) of the Act, a collective agreement or arbitration award cannot provide for a salary rate increase of more than 1% per year during the three-year moderation period.

This 1% cap applies to any position or class of positions. [ 23 ] In addition, pursuant to s. 11(1) of the Act, increases in compensation, which, as noted above, include salary rates for all employees covered by a collective agreement, are limited to 1% per year during the three-year moderation period: During the applicable moderation period, no collective agreement or arbitration award may provide for any incremental increases to existing compensation entitlements or for new compensation entitlements that in total equal more than one per cent on average for all employees covered by the collective agreement for each 12-month period of the moderation period. [Emphasis added.] [ 24 ] Therefore, in combination, s. 10(1) and 11(1) mean that no individual employee can receive a salary rate increase of more than 1% per year during the moderation period.

In addition, the overall increase for all compensation, including salary rates, within the bargaining unit cannot exceed 1% per year overall. This means that employers can agree to an increase of compensation for some employees beyond 1% per year, so long as the increase does not apply to their salary rate and so long as the overall compensation for all employees in the bargaining unit does not exceed 1% per year.

In other words, an increase above 1% in compensation, other than the salary rate, for some employees would have to be offset against no increases or lesser increases for other employees. [ 25 ] There are some exceptions to the limitations on compensation increases.

For example, s. 10(2) of the Act provides for three exceptions to the 1% per year cap on salary rates, allowing for salary rate increases that recognize an employee’s “length of time in employment”, “assessment of performance”, and “successful completion of a program or course of professional or technical education.” Also, s. 11(3) of the Act provides that an employer’s increase in the cost of providing a benefit that existed before the moderation period does not constitute an increase in compensation. [ 26 ] In accordance with s. 9 of the Act, for represented employees, the moderation period begins at different times.

For example, if a collective agreement was still in effect on June 5, 2019, the three-year moderation period starts on the day immediately following the end of the collective agreement. If the collective agreement had already expired on June 5, 2019, the moderation period starts running on the day immediately following the date on which the previous collective agreement had expired. The same principles generally apply to arbitration awards. [ 27 ] Sections 17 to 23 of the Act set out the provisions that apply to non-represented employees. They are similar to those that apply to represented employees.

However, pursuant to ss. 18 and 19, the cap imposed on salary rate and compensation increases is focused on individual employees or classes of employees and not on bargaining units. In addition, for non-represented employees, the start date of the moderation period is different than for represented employees. The moderation period starts on a date selected by the employer that is after June 5, 2019, but no later than January 1, 2022.

(4) Enforcement, oversight and exemptions [ 28 ] The Act includes a number of measures designed to prohibit employers from avoiding compliance with the 1% limit on compensation increases during the moderation period. For example, s. 24 prohibits an employer from providing compensation before or after the moderation period to make up for compensation the employee did not receive during the moderation period. [ 29 ] The Act also gives the government broad powers of enforcement.

Section 25 of the Act gives the Management Board of Cabinet the power to obtain information from employers about collective bargaining or compensation to ensure compliance with the Act.

Section 26 gives the Minister responsible for administration of the Act the sole discretionary power to make an order declaring that a collective agreement or arbitration award does not comply with the Act, which then requires the parties to enter into a new collective agreement that is compliant with the Act. [ 30 ] Finally, s. 27 of the Act provides that the Minister “may, by regulation, exempt a collective agreement from the application of [the] Act”. However, the Act does not set out criteria or the basis on which the Minister may make such an exemption. C.

The respondents [ 31 ] There were ten groups of respondents on the appeal. While the respondent organizations [2] represent employees that fall within the scope of the Act, they are not all similarly situated. They work in different sectors, including education, health and energy. In addition, some of their members are directly employed by the province, whereas others are employed by other bodies that fall within the scope of the Act; therefore, in some cases, the collective bargaining takes place directly with the province and in other cases it takes place with an employer other than the province.

Finally, some of the respondents’ members work for employers that are fully funded by the province, partially funded by the province and, in some cases, not funded by the province at all.

[ 32 ] In order to highlight these differences, it is helpful to provide a brief description of each organization: a. Ontario English Catholic Teachers Association (“OECTA”): OECTA is the designated bargaining agent for teachers employed by the English-language Catholic district school boards in Ontario. While the members of OECTA are employed by their individual school boards, OECTA participates in a process of “central bargaining” with the Crown and school boards over significant issues, such as salary increases. b.

Ontario Secondary School Teachers’ Federation/Fédération des enseignants-enseignantes des écoles secondaires de l’Ontario (“OSSTF”): OSSTF is the designated bargaining agent for secondary school teachers employed by the English-language public district school boards in Ontario. It also represents a variety of other education workers employed by both French and English school boards. While these OSSTF members are employees of their respective school boards, like OECTA, OSSTF participates in a process of “central bargaining” with the Crown and school boards over significant issues.

In addition to its school board members, OSSTF also represents members who work for employers offering transportation services to school boards and members who are non-teaching employees at some universities. [3] c. Elementary Teachers’ Federation of Ontario (“ETFO”) and l’Association des enseignantes et des enseignants franco- ontariens (“AEFO”): ETFO is the designated agent to bargain on behalf of English-language elementary teachers in Ontario as well as certain other education workers, such as early childhood education workers and professional support personnel.

AEFO is the designated bargaining agent for all public and Catholic French-language elementary and secondary school teachers in Ontario. While the members of ETFO and AEFO are employees of their respective school boards, ETFO and AEFO also participate in a process of “central bargaining” with the Crown and school boards. [4] d. Ontario Nurses’ Association (“ONA”): ONA represents registered nurses, nurse practitioners, registered practical nurses, personal support workers and other health care professionals across Ontario.

ONA’s members work in a variety of settings, including hospitals, long-term care homes and community health clinics. e. Ontario Federation of Labour (“OFL”): OFL’s application was brought on behalf of several organizations, including OFL, the Canadian Union of Public Employees (“CUPE”), the Association of Management, Administrative and Professional Crown Employees of Ontario (“AMAPCEO”) and various university faculty associations.

These organizations represent a broad variety of employees in different sectors, including hospitals, long-term care, social and community services, education, universities, transportation, the justice system and the Ontario Public Service. [5] f. Ontario Public Service Employees Union (“OPSEU”): OPSEU represents a broad range of workers who work in the Ontario Public Service or who are employed by broader public sector employers. They include cleaning staff, personal support workers, college professors, office administrators, correctional officers and education assistants. [6] g.

Unifor: Unifor represents employees in the private and public sector. The public sector workers Unifor represents work in a variety of areas, including health care, social services and education. h. Society of United Professionals, Local 160 of the International Federation of Professional and Technical Engineers (“Society” or “Society of United Professionals”): The Society represents employees in the energy sector who work for Ontario Power Generation (“OPG”), the Independent Electricity System Operator (“IESO”) and the Ontario Energy Board (“OEB”).

The Society’s members include professionals, such as engineers, accountants, lawyers and managers. The Society bargains with OPG, IESO and OEB, which are self-funded and receive no funding from the province. i. Power Workers’ Union (Canadian Union of Public Employees, Local 1000) (“PWU”): PWU represents employees in the energy sector who work for OPG and IESO as well as other entities not subject to the Act. Its members work in clerical, technical and skilled trade positions. As with the Society, PWU bargains with OPG and IESO, which, again, are self-funded and receive no funding from the province. j.

Carleton University Academic Staff Association: The Association represents faculty members, librarians and instructors employed by Carleton University. The members of the Association are employed by Carleton and their collective bargaining agreement is with Carleton. The province provides funding grants to Carleton, which covers 30 to 35% of its budget. However, the province does not directly fund the compensation paid to the Association’s members. D.

The application judge’s decision [ 33 ] The application judge rejected the respondents’ position that the Act violated their right to freedom of expression or their equality rights. However, he found that the Act violated the right to freedom of association under s. 2(

d) of the Charter , and that the Act was not saved by s. 1 of the Charter .

(1) Application judge’s finding that the Act violates s. 2(

d) of the Charter [ 34 ] In concluding that the Act violates the respondents’ s. 2(

d) rights, the application judge found that the Act substantially interferes with the respondents’ ability to enter into good faith negotiation and consultation. In reaching this conclusion, the application judge considered the following ten factors: a. The financial impact of the wage cap: The Act interferes with the process of collective bargaining because it places significant limits on the ability of unions to negotiate higher wages or to use wages to negotiate other better work conditions. b. The impact on trading salary against other issues: The Act inhibits the ability of unions to trade off wages for other issues.

c. The impact on staffing: The application judge accepted the respondents’ evidence that there was a “serious long-term recruitment and retention crisis” in the health care sector. He found that the Act prevents unions from negotiating solutions to this crisis. d. The impact on wage parity between public and private sector employees: On this factor, the application judge focused on the long- term care sector, which consists of private for-profit homes, private non-profit homes and municipal homes, whose employees have typically bargained together.

The application judge held that “[f]ragmenting bargaining units into public and private sector units interferes with the unions’ ability to choose who bargains together.” e. The impact on employee self-government: The application judge held that the Act interferes with the respondent organizations’ ability to decide democratically how to prioritize their negotiating positions. f. The impact on freely negotiated agreements: The government’s power under the Act to decide whether a collective agreement will or will not be exempted from the Act interferes with freely negotiated agreements. g.

The impact on the right to strike: The application judge held that the Act renders the right to strike “financially meaningless” because the best the unions can achieve is a wage increase of 1% or an increase of benefits equal to 1% of wages, a benefit he found would be exhausted after 2.6 days of striking. h. The impact on interest arbitration: The Act affects bargaining units subject to interest arbitration, because one of the principles of interest arbitration is the replication of negotiated agreements. i.

The impact on the relationship between unions and their members: The application judge relied, by way of example, on negative responses from ONA’s members to their 1% wage increase as evidence that the Act will cause discord within unions. j.

The impact on the power balance between employer and employees: The application judge stated that the “shadow of the legislator” would loom over negotiations and disrupt the power balance between employees and employers achieved through meaningful collective bargaining. [ 35 ] The application judge then considered whether the process of consultation prior to the introduction of Bill 124 amounted to a meaningful process of collective bargaining. He stated that the government did not have an obligation to consult with the respondents on its legislation.

However, relying on prior jurisprudence, he stated that, in appropriate circumstances, meaningful consultation before the passage of legislation can nevertheless take the place of collective bargaining. In this case, he found that there was no meaningful consultation. [ 36 ] The application judge also reviewed prior decisions dealing with wage restraint legislation where no breach of s. 2(

d) of the Charter was found. He distinguished those cases on the basis of the evidence in this case and differences between the Act and the legislation in those cases.

(2) Application judge’s finding that s. 1 of the Charter does not save the Act [ 37 ] The application judge found that the Act was not saved by s. 1 of the Charter . [ 38 ] In his s. 1 analysis, the application judge started by rejecting Ontario’s definition of the Act’s pressing and substantial objective. Ontario had submitted that the Act’s objective was fiscal responsibility and moderating the growth rate of public sector compensation. The application judge rejected this objective because the moderation of public service wages was the means by which the objective of fiscal responsibility was to be achieved.

It was not an objective in and of itself. On this basis, the application judge redefined the objective as “the responsible management of Ontario’s finances and the protection of sustainable public services.” [ 39 ] The application judge then found that Ontario did not establish that this was a pressing and substantial objective. In doing so, he considered case law from the Supreme Court of Canada which suggests that budgetary considerations cannot be a freestanding pressing and substantial objective, except in the context of a financial crisis.

The application judge found that, in this case, Ontario’s evidence, including a report from its expert, Dr.

David Dodge, did not establish that the province was in a financial crisis. [ 40 ] Despite his finding that Ontario had not established a pressing and substantial objective, the application judge went on to consider the other aspects of the s. 1 Charter analysis. [ 41 ] On the issue of a rational connection, the application judge found that, because compensation represents approximately one half of provincial government expenditures, moderating the rate of compensation increase is logically related to the responsible management of the province’s finances and protecting the sustainability of public services.

However, he found that the rational connection did not exist for two categories of broader public sector workers because the province was not responsible for paying wages in these sectors: 1) the employees in the electricity sector working for OPG, OEB and IESO, and 2) the Carleton University academic staff, and by extension academic staff at other universities. Further, and relatedly, he concluded that the rational connection for workers in the long- term care sector was “at best remote.” [ 42 ] On the issue of whether the Act minimally impairs the respondents’ s. 2(

d) Charter rights, the application judge found that Ontario failed to explain why the province could not pursue “voluntary wage restraint”, as it had in the past, rather than imposing a wage cap through legislation. In addition, specifically with respect to the university sector, he found that the Act interferes with the governance of universities and that Ontario failed to provide an explanation for this interference. [ 43 ] Finally, the application judge found that the salutary effects of the Act did not outweigh its deleterious effects.

Amongst his reasons for this finding, he held that Ontario’s argument that the province wanted to bring public sector wages in line with private sector wages was not supported by the evidence regarding the wage gap. He further found that the lack of “present or imminent fiscal urgency” weighed against the Act.

(3) Remedy [ 44 ] Based on his conclusion that that the Act violated s. 2(

d) and was not saved by s. 1 of the Charter , the application judge declared the entire Act void and of no effect. In doing so, he stated that there was no purpose in going through the Act

section by section. [ 45 ] In addition, the application judge deferred the issue of any further remedies to a later hearing. E. Issues on appeal [ 46 ] Ontario raises the following issues on appeal: a. The application judge erred in treating s. 2(

d) as a substantive right to a specific outcome rather than as a right to a fair collective bargaining process; b. The application judge erred in failing to follow existing case law dealing with the constitutional validity of wage restraint legislation; c. The application judge erred in his s. 1 Charter analysis; and d. Even if the Act is invalid as it relates to represented employees in the broader public sector, the application judge erred in declaring the Act void and of no effect vis-à-vis employees who are not represented by a bargaining organization and who do not bargain collectively. F.

The standard of review [ 47 ] The constitutional validity of the Act is a question of law to be decided on a standard of correctness. However, this court owes deference to the application judge’s findings of fact, including findings based on social and legislative evidence. As the Supreme Court held in Canada (Attorney General) v.

Bedford , 2013 SCC 72 , [2013] 3 S.C.R. 1101, at para. 49 , a judge’s factual findings, including findings on social and legislative facts, are entitled to deference on appeal: When social and legislative evidence is put before a judge of first instance, the judge’s duty is to evaluate and weigh that evidence in order to arrive at the conclusions of fact necessary to decide the case. The trial judge is charged with the responsibility of establishing the record on which subsequent appeals are founded.

Absent reviewable error in the trial judge’s appreciation of the evidence, a court of appeal should not interfere with the trial judge’s conclusions on social and legislative facts . This division of labour is basic to our court system. The first instance judge determines the facts; appeal courts review the decision for correctness in law or palpable and overriding error in fact. This applies to social and legislative facts as much as to findings of fact as to what happened in a particular case . [Emphasis added.] See also Carter v.

Canada (Attorney General) , 2015 SCC 5 , [2015] 1 S.C.R. 331, at para. 109 . [ 48 ] This is especially important in a case such as this one where, as discussed in the next

section of these reasons, the Supreme Court has expressly stated that the issue of whether legislation substantially interferes with s. 2(

d) rights, and specifically collective bargaining rights, is a “contextual and fact-specific” inquiry: Health Services and Support – Facilities Subsector Bargaining Assn. v. British Columbia , 2007 SCC 27 , [2007] 2 S.C.R. 391, at para. 92 . [ 49 ] As held by Donald J.A., in dissent, in British Columbia Teachers’ Federation v.

British Columbia , 2015 BCCA 184 , 71 B.C.L.R. (5th) 223, at para. 326 , rev’d 2016 SCC 49 , [2016] 2 S.C.R. 407 (substantially for the dissenting reasons of Donald J.A.), factual findings underlying a trial judge’s conclusion that a government substantially interfered with freedom of association are subject to the palpable and overriding error standard. [ 50 ] Similarly, in Manitoba Federation of Labour et al. v. The Government of Manitoba , 2021 MBCA 85 , 463 D.L.R. (4th) 509, at para. 46 , leave to appeal refused, [2021] S.C.C.A.

No. 437, the Court of Appeal of Manitoba described the applicable standard of review in deciding on whether wage restraint legislation contravenes s. 2(

d) of the Charter as follows: Whether legislation is constitutional is a quintessential question of law. Therefore, the applicable standard of review is correctness. However, to the extent that the

section 2(

d) inquiry is premised on an assessment of relevant facts, any relevant factual finding will be owed deference and will be reviewed on the palpable and overriding error standard (see Consolidated Fastfrate at para 26). The appellate court will then take a last look at the accepted relevant factual foundation and decide the ultimate issue (whether the legislation is constitutional) on the correctness standard. [ 51 ] Accordingly, the questions of whether the Act violates s. 2(

d) of the Charter and, if so, whether it is saved by s. 1 of the Charter are to be reviewed on a standard of correctness. This inquiry includes consideration of what factors are relevant to deciding these issues. However, the trial judge’s findings of fact relevant to this assessment are to be reviewed on the palpable and overriding error standard of review. G. Does the Act infringe s. 2(

d) of the Charter ? [ 52 ] In this section, I start with a review of the general principles that apply to s. 2(

d) of the Charter , followed by a review of other appellate decisions dealing with wage restraint legislation. I then address whether the Act violates s. 2(

d) of the Charter .

(1) General principles regarding protection of collective bargaining under s. 2(

d) of the Charter [ 53 ]

Section 2(

d) of the Charter provides that everyone has the freedom of association, which is a fundamental freedom. [ 54 ] In a series of decisions, starting in 2007 with Health Services , the Supreme Court has recognized that, in the labour context, s. 2(

d) of the Charter protects the right to collective bargaining. [ 55 ] In Health Services , the Supreme Court established that the s. 2(

d) right to freedom of association protects collective bargaining, which the court described as “the right of employees to associate for the purpose of advancing workplace goals through a process of collective bargaining”: at para. 87. The court stated that recognizing the right to engage in collective bargaining is consistent with Charter values because it affirms the “values of dignity, personal autonomy, equality and democracy that are inherent in the Charter ”: Health Services , at para. 86. [ 56 ] The Supreme Court reaffirmed that s. 2(

d) of the Charter protects the right to engage in collective bargaining in Ontario (Attorney General) v. Fraser , 2011 SCC 20 , [2011] 2 S.C.R. 3, and again in a 2015 trilogy of decisions: Mounted Police Association of Ontario v. Canada (Attorney General) , 2015 SCC 1 , [2015] 1 S.C.R. 3, Meredith. v. Canada (Attorney General) , 2015 SCC 2 , [2015] 1 S.C.R. 125, and Saskatchewan Federation of Labour v. Saskatchewan , 2015 SCC 4 , [2015] 1 S.C.R. 245. In Mounted Police , at para. 5, the court emphasized that the purpose of s. 2(

d) is to protect “a meaningful process of collective bargaining that provides employees with a degree of choice and independence sufficient to enable them to determine and pursue their collective interests.” In Saskatchewan Federation , the Supreme Court also confirmed that the right to strike forms part of collective bargaining rights protected by s. 2(d): at para. 75. [ 57 ] In these cases, the Supreme Court has consistently stated that s. 2(

d) does not guarantee specific outcomes, but rather protects the right to a collective bargaining process: Health Services , at paras. 89, 91; Fraser , at para. 45 ; and Mounted Police , at para. 67. Similarly, the court has stated that s. 2(

d) does not protect a specific model of labour relations or bargaining method, but rather the right is to a general process of collective bargaining: Health Services , at para. 91; Fraser , at para. 42 ; and Mounted Police , at para. 93. [ 58 ] Further, the Supreme Court has emphasized that s. 2(d) “does not protect all aspects of the associational activity of collective bargaining”; rather, it only protects against “substantial interference” with associational activity: Health Services , at para. 90.

As described in Health Services , to constitute substantial interference with the right to collective bargaining, “the intent or effect must seriously undercut or undermine the activity of workers joining together to pursue the common goals of negotiating workplace conditions and terms of employment with their employer”: at para. 92.

Similarly, in Mounted Police , the court stated that a “process that substantially interferes with a meaningful process of collective bargaining by reducing employees’ negotiating power is … inconsistent with the guarantee of freedom of association enshrined in s. 2( d )”: at para. 71. [ 59 ] In Health Services , at para. 93, the court established that there are two parts to the “substantial interference” inquiry: a.

First, the court must assess “the importance of the matter affected to the process of collective bargaining, and more specifically, to the capacity of the union members to come together and pursue collective goals in concert.” b. Second, the court must assess “the manner in which the measure impacts on the collective right to good faith negotiation and consultation.” [ 60 ] In Health Services , the court further emphasized that “[b]oth inquiries are necessary”: at para. 94. There will be no violation if the matter impacted does not substantially affect the process of collective bargaining.

Similarly, even if the matter at issue substantially touches on collective bargaining, it will not violate s. 2(

d) of the Charter if it preserves a “process of consultation and good faith negotiation” : at para. 94. [ 61 ] In Fraser and the 2015 trilogy, the Supreme Court did not specifically refer to or apply the two-part substantial interference inquiry. However, in Meredith , at para. 24 , the court explicitly stated that the test to determine whether state action “substantially impair[s] … employees’ collective pursuit of workplace goals” is “[t]he test … set out in Health Services .” In addition, in Gordon v.

Canada (Attorney General) , 2016 ONCA 625 , 404 D.L.R. (4th) 590, at para. 47 , leave to appeal refused, [2016] S.C.C.A. No. 444 ( Professional Institute of the Public Service of Canada ), and [2016] S.C.C.A.

No. 445 ( Gordon ), upon reviewing the Supreme Court decisions that followed Health Services , this court confirmed that the two-part inquiry still applies. [ 62 ] Before moving on to a review of the wage restraint legislation cases, it is helpful to describe each of the two inquiries further. [ 63 ] With respect to the first part of the inquiry, namely the importance of the matter to the process of collective bargaining, “the essential question is whether the subject matter of a particular instance of collective bargaining is such that interfering with bargaining over that issue will affect the ability of unions to pursue common goals collectively….

The more important the matter, the more likely that there is substantial interference”: Health Services , at para. 95. [ 64 ] In Gordon , at para. 53 , this court explained that “while protection is not afforded to the ‘fruits’ of bargaining, but only to the process by which they are to be negotiated, employer actions unilaterally undermining the ability of unions to bargain about significant matters are constitutionally suspect.” The court further explained, at paras. 53 and 54, that legislation affecting certain matters and employer actions which restrict those matters are by their nature “constitutionally suspect”.

The matters of concern include salary, hours of work, job security and seniority, equitable and humane working conditions, and health and safety protections: Gordon , at para. 53 . The employer actions that are “constitutionally suspect” for the purpose of s. 2(

d) of the Charter include taking important matters off the table or restricting the matters that may be discussed, imposing “arbitrary outcomes”, unilaterally nullifying negotiated terms, removing the right to strike, and imposing limits on future bargaining: Gordon , at para. 54 . [ 65 ] With respect to the second part of the inquiry, as described above, the court must inquire into the impact of the measure on the

collective right to good faith negotiation and consultation. In assessing the impact of a measure, the Supreme Court has emphasized that the duty to bargain in good faith requires the parties to engage in meaningful dialogue and to be willing to explain their positions: Health Services , at para. 101. However, the duty to bargain in good faith does not impose an obligation to reach an agreement or to accept any contractual provision: Health Services , at para. 103.

Similarly, it does not require the parties to bargain indefinitely or preclude the parties from engaging in hard bargaining: Health Services , at paras. 102-3. [ 66 ] Further, the circumstances under which an impugned law was adopted can be relevant to assessing the impact of the law on the process of good faith negotiations. For example, a law that is adopted after a period of meaningful negotiation and consultation is less likely to be seen as interfering with the process of collective bargaining: see Health Services , at para. 92; Association of Justice Counsel v.

Canada (Attorney General) , 2012 ONCA 530 , 117 O.R. (3d) 532, at para. 41 , leave to appeal refused, [2012] S.C.C.A. No. 430; and British Columbia Teachers’ Federation , at para. 82 , per Bauman C.J.B.C. and Harris J.A., and at paras. 287-91, per Donald J.A. (dissenting).

However, “[s]ituations of exigency and urgency” may be relevant and “[d]ifferent situations may demand different processes and timelines”: Health Services , at para. 107. [ 67 ] In Health Services , at para. 109, the Supreme Court summarized the two-part inquiry by emphasizing that both the matter at issue and the effect on good faith collective bargaining must be substantial. The court also emphasized that this is a contextual and fact- specific inquiry: In

summary, s. 2(

d) may be breached by government legislation or conduct that substantially interferes with the collective bargaining process. Substantial interference must be determined contextually, on the facts of the case , having regard to the importance of the matter affected to the collective activity, and to the manner in which the government measure is accomplished. Important changes effected through a process of good faith negotiation may not violate s. 2( d ). Conversely, less central matters may be changed more summarily, without violating s. 2( d ).

Only where the matter is both important to the process of collective bargaining, and has been imposed in violation of the duty of good faith negotiation, will s. 2(

d) be breached . [Emphasis added.]

(2) Previous wage restraint decisions [ 68 ] The Supreme Court, this court and other appellate courts in Canada have had the opportunity to consider the constitutional validity of other wage restraint legislation: Meredith ; Gordon ; Canada (Procureur général) c. Syndicat canadien de la function publique

section 675 , 2016 QCCA 163 , leave to appeal refused, [2016] S.C.C.A. No. 117; Federal Government Dockyard Trades and Labour Council v. Canada (Attorney General) , 2016 BCCA 156 , 84 B.C.L.R. (5th) 341; and Manitoba Federation . In addition, the decision in Reference re Bill 148,

An Act Respecting the Sustainability of Public Services , 2022 NSCA 39 , 471 D.L.R. (4th) 547, is also relevant because, while the court declined to decide the issue on a reference, it nevertheless addressed some of the applicable principles in such cases. [ 69 ] In all the decisions referred to above where the courts considered the constitutional validity of wage restraint legislation, the courts found that the legislation did not substantially interfere with the right to collective bargaining protected by s. 2(

d) of the Charter . Ontario relies on these decisions in support of its position that the Act at issue in this case does not contravene s. 2(d). Ontario argues that the legislation in those cases is similar or more restrictive than the Act and that the application judge erred in failing to follow those decisions. [ 70 ] I disagree with Ontario’s proposed approach to the other wage restraint legislation decisions. The issue of whether the Act infringes the respondents’ s. 2(

d) rights does not simply require a review and comparison of the provisions in the Act and the other wage restraint legislation. Rather, in accordance with the direction of the Supreme Court in Health Services and the 2015 trilogy, this determination requires a contextual and factual analysis of the circumstances and context in which the Act was passed and its impact on collective bargaining. While the decisions at issue found that other wage restraint legislation did not infringe s. 2(d), none of these decisions suggests that wage restraint legislation is compliant with s. 2(

d) per se if it has specified characteristics. Rather, the courts look at the circumstances under which the legislation was passed, the content of the legislation and the impact of the legislation on collective bargaining in the particular circumstances of the case to determine whether the legislation constitutes a substantial interference. [ 71 ] Therefore, in order to assess the relevance of the prior appellate wage restraint legislation decisions, it is helpful to review those decisions in some detail to distill the relevant factors that led to each respective court’s determination that the legislation in the corresponding case did not infringe the s. 2(

d) rights of the represented employees in those cases. Below, I start with a review of the four decisions that dealt with challenges to the federal Expenditure Restraint Act , S.C. 2009, c. 2, s. 393 (“ ERA ”), followed by review of the Manitoba Federation decision, which dealt with wage restraint legislation enacted by the Manitoba government. (

a) Decisions challenging the Expenditure Restraint Act [ 72 ] The decisions in Meredith , Gordon , Dockyard and Procureur général all dealt with challenges to the E RA . The legislation was enacted in response to the 2008 worldwide financial crisis. The ERA applied to over 400,000 unionized and non-unionized employees who worked for the federal Crown and approximately 48,000 employees who worked for federal Crown corporations.

The ERA limited wage increases by specified percentages over a five-year period as follows: a) 2.5% for the 2006-2007 fiscal year, b) 2.3% for the 2007- 2008 fiscal year, c) 1.5% for the 2008-2009 fiscal year, d) 1.5% for the 2009-2010 fiscal year, and e) 1.5% for the 2010-2011 fiscal year. The legislation was enacted after multiple collective agreements had already been negotiated.

In some cases, where collective agreements that were subject to the ERA had already been negotiated, the legislation had the effect of rolling back negotiated wage increases. [ 73 ] In Meredith , the parties challenging the ERA were members of the Royal Canadian Mounted Police (“RCMP”). In Mounted Police , which was decided at the same time as Meredith , the Supreme Court had found that the existing labour relations regime imposed by legislation for RCMP officers infringed s. 2(

d) of the Charter . It was in that context that the Supreme Court reviewed the general principles from Health Services and Fraser applicable to determining whether legislation substantially interferes with collective bargaining rights. In Meredith , despite having found that the labour relations regime for RCMP officers violated s. 2(

d) of Charter , the

court nevertheless considered the constitutional validity of the ERA as it applied to RCMP officers. [ 74 ] The majority of the court held that the ERA did not violate the affected employees’ s. 2 (

d) rights. In reaching this conclusion, the court did not engage in a detailed analysis of the circumstances under which wage restraint legislation may or may not constitute a violation of s. 2(d).

Rather, in its reasoning at paras. 28-29, the court focused on the circumstances of the case, including that the relevant wage increases were similar to wage increases achieved by other employees who engaged in the collective bargaining process in the public sector and that the affected RCMP employees were nevertheless able to negotiate other improvements to their compensation: [T]he level at which ERA capped wage increases for members of the RCMP was consistent with the going rate reached in agreements concluded with other bargaining agents inside and outside of the core public administration and so reflected an outcome consistent with actual bargaining processes .

The process followed to impose the wage restraints thus did not disregard the substance of the former procedure. And the ERA did not preclude consultation on other compensation-related issues, either in the past or the future . Furthermore, the ERA did not prevent the consultation process from moving forward. Most significantly in the case of RCMP members, s. 62 permitted the negotiation of additional allowances as part of “transformation[al] initiatives” within the RCMP .

The record indicates that RCMP members were able to obtain significant benefits as a result of subsequent proposals brought forward through the existing Pay Council process. Service pay was increased from 1% to 1.5% for every five years of service – representing a 50% increase – and extended for the first time to certain civilian members. A new and more generous policy for stand-by pay was also approved. Actual outcomes are not determinative of a s. 2(

d) analysis, but, in this case, the evidence of outcomes supports a conclusion that the enactment of the ERA had a minor impact on the appellants’ associational activity . [Emphasis added.] [ 75 ] In Gordon , two unions representing employees in the federal public service challenged the ERA on the basis that it infringed their collective bargaining rights under s. 2(

d) of the Charter . The evidence on the application was that most of the bargaining units represented by the unions had reached collective bargaining agreements with the federal government before the ERA was enacted. Many did not challenge the legislation. Furthermore, the evidence was that, as had been found in Meredith , the wage caps in the ERA , for the most part, were equivalent or higher than negotiated wage increases. [ 76 ] In the circumstances, this court found that the ERA did not breach the union members’ s. 2 (

d) rights. In reaching that conclusion, the court accepted that the first part of the “substantial interference” inquiry was met because “[b]argaining over wages is ordinarily a significant matter in free collective bargaining” and because the evidence in that case showed that wages were an important issue for most bargaining units: at para. 122. However, the court was not satisfied that the ERA amounted to a substantial interference with good faith negotiation and consultation.

In reaching this conclusion, the court relied on the evidence that the caps on wage increases in the ERA were equivalent or higher than those in most collective agreements reached around that time. The court reasoned, at paras. 127-28, that: The ERA ’s imposition of the wage increase caps therefore was consistent with the results of free collective bargaining that were the most favourable to the unions, having been negotiated by the largest union.

From a process perspective, it is difficult to imagine that continuation of an unfettered bargaining process for the remaining minority of units would have produced significantly different outcomes, given that the settlement with the majority of the public service drove the determination of the wage increase caps. [ 77 ] The court recognized that, as held in Meredith , outcomes are not determinative, but they can support a conclusion that the ERA had a minor impact on the unions’ associational activities: Meredith , at para. 29 ; Gordon , at para. 130 .

The court concluded that “viewing the matter in context, union members were not discouraged from the collective pursuit of common goals as a result of the upper limits placed on wage increases for the restraint period”: Gordon , at para. 131 . [ 78 ] Ultimately, at para. 176, this court concluded that the ERA did not infringe the appellant unions’ s. 2 (

d) rights on the following basis: The Government engaged in permissible hard bargaining during a period of economic crisis and government austerity. And by enacting the ERA , the Government capped wage increases for a limited period. The ERA did not completely prohibit any wage increases, the cap was in place for a limited period of time, and the limit imposed was in line with the wage increases obtained through free collective bargaining. Moreover, the appellant unions were able to make progress on matters of interest to some of the bargaining units they represented.

They were still able to participate in a process of consultation and good faith negotiations. As such, neither the ERA nor the Government’s conduct before or after the enactment of ERA limited the appellants’ s. 2 (

d) rights. [ 79 ] In Procureur général , the Court of Appeal of Québec dealt with a challenge to the ERA brought on behalf of two groups of employees of the Société Radio-Canada in the province of Québec and Moncton. Prior to the passage of the ERA , one of the bargaining units had negotiated wage increases of 3.5% as of October 1, 2007, followed by four annual increases beginning in December 2007 of 3%, 2.5%, 2.5% and 2.5%. The other bargaining unit had negotiated annual wage increases of 2.6% in 2007, 2.5% in 2008 and 2.5% in 2009.

In that case, the evidence was that, at the time the ERA was tabled, the unions representing the affected employees did not realize that the wage caps in the ERA would apply to their collective agreements. [ 80 ] In that context, the Court of Appeal of Québec, at para. 43, held that there was no question that the issue of wage increases was a matter of central importance to workers involved in collective bargaining: “[t]hese issues are central to the exercise of this freedom in a workplace and are ordinarily one of the crucial points of discussion during collective bargaining” [translation]. [ 81 ] Despite finding that there was interference, the court found on the second branch of the Health Services analysis that the ERA did not substantially interfere with the collective bargaining process because it preserved a process of consultation and good faith negotiation: at para. 59.

In reaching this conclusion, the court relied on the following contextual factors and characteristics of the ERA : a. The ERA did not freeze or reduce salaries, but rather restricted the scope for wage increases for what the court described as a non- negligible period of time: at para. 48.

b. As the Supreme Court found in Meredith , and as subsequently found in Gordon , the wage increase caps in the ERA were comparable to wage increases that had been freely negotiated within the federal public sector: at paras. 50-51. c. Once the wage restraint measures concluded, the parties would be free to negotiate agreements that mitigated the lost increases over time: at para. 52. d.

Section 8 of the ERA permitted the reopening of already negotiated collective agreements to enhance non-monetary aspects of the collective agreements, such as hours or work, vacation, leaves, employment security, staffing assignments and transfers.

This provision was consistent with Meredith in allowing for consultation on other compensation-related issues: at paras. 53-56. [ 82 ] The court concluded, at para. 100, that the ERA did not substantially interfere with freedom of association because the legislation did not deprive the employees and associations representing them of the possibility of having meaningful collective negotiations on workplace matters, the right to actual collective bargaining processes, or the ability to engage in collective bargaining. [ 83 ] Finally, in Dockyard , before the introduction of the ERA , a bargaining agent for the members of its constituent trade unions had obtained a 5.2% wage increase through arbitration as of October 2006, as well as wage increases within the limits of the ERA from 2006 to 2009.

The effect of the ERA was to nullify the 5.2% wage increase.

The court found that the rollback did not substantially interfere with the process of collective bargaining for a number of reasons, including the lengthy negotiations and the warning, before pressing ahead with the arbitration, that there may be a rollback. [ 84 ] There are four common threads between the decisions dealing with the constitutional validity of the ERA : 1) the measures were imposed in the context of the 2008 global economic crisis; 2) multiple bargaining units had reached agreements about wage increases similar to those that were legislated before the ERA was enacted; 3) the legislation was imposed after a relatively long period of negotiation; and, 4) in some cases, following the enactment of the ERA , bargaining units were nevertheless able to reopen their collective agreements to negotiate for wage increases ( Meredith ) or other matters of interest, including matters related to compensation ( Procureur général ). [ 85 ] The Supreme Court denied leave to appeal on Gordon , Procureur général and Dockyard . (

b) Manitoba wage restraint legislation decision [ 86 ] The only other appellate decision in Canada raised by the parties deciding the constitutional validity of wage restraint legislation is the decision of the Court of Appeal of Manitoba in Manitoba Federation . Ontario relies heavily on this decision as the basis for its position that the application judge erred in finding that the Act infringes the respondents’ s. 2(

d) rights. Specifically, Ontario argues that the Act and the legislation at issue in Manitoba Federation are very similar and, in fact, that the Manitoba legislation imposed more draconian caps on wage increases in comparison to the Act. [ 87 ] Manitoba Federation involved a challenge to The Public Services Sustainability Act , S.M. 2017, c. 24 (the “ PSSA ”). The PSSA was passed in 2017. It imposed wage caps of 0%, 0%, 0.75% and 1% over a four-year period. The PSSA applied to represented and non- represented employees in Manitoba’s public service, which covered nearly 20% of the province’s workforce. [ 88 ] The trial judge had found that the PSSA infringed the s. 2 (

d) rights of the represented employees who were subject to the legislation, and that it was not saved by s. 1 of the Charter . [ 89 ] The Court of Appeal of Manitoba allowed the appeal on this issue, finding that the PSSA did not infringe the s. 2 (

d) rights of represented employees affected by the statute.

The court found that the trial judge made several errors in her analysis. [ 90 ] First, while the court noted that the government of Manitoba had not engaged in any pre-legislation consultation before enacting the PSSA , it was an error for the trial judge to find that this consideration was relevant because the government had no obligation to consult with the unions before passing legislation: at para. 81. (I will have more to say below about how the court dealt with this issue.) [ 91 ] Second, the court found that the trial judge had improperly compared private sector wages to public sector wages in determining that the results achieved through collective bargaining were higher than the wage increases in the PSSA : at paras. 84-85.

The court held that, when comparing the PSSA wage increase caps to other public sector negotiated collective agreements to which the PSSA did not apply, the wage increases were comparable to those in the PSSA : at para. 86. [ 92 ] Having found that the trial judge erred in her s. 2(

d) analysis, the court conducted its own fresh analysis. In doing so, the court considered a number of factors. First, the court found that the relevant provisions of the PSSA are functionally equivalent to those in the ERA , which were found to be constitutional. Second, the court found that, despite the passage of the PSSA , bargaining units were able to negotiate over various workplace conditions other than wages. Third, the court noted that, unlike the ERA , the PSSA included a clause permitting exemption from the statute.

In making this finding, the court pointed out that s. 7(4) of the PSSA gave the Manitoba government the ability to grant an exemption from the PSSA , and that the unions could strike for the purpose of pressuring the government into granting an exemption: at para. 123. [ 93 ] The court accepted, as conceded by Manitoba, that “taking wages off the bargaining table” met the first inquiry in the test established by Health Services : at para. 128.

However, the court found that the second branch was not met because, based on the factors referred to above, the PSSA preserves a process of consultation and good faith negotiation. In reaching this conclusion, at para. 128, the court stated that “the case law establishes that that type of legislative interference does not amount to ‘substantial interference’ when it is broad-based and for a limited period of time.” [ 94 ] As with the decisions that considered the ERA , the Supreme Court denied leave to appeal from the Manitoba Federation decision.

(

c) General principles that arise from prior wage restraint legislation decisions [ 95 ] As mentioned above, one of the arguments made by Ontario is that the application judge erred in failing to follow previous appellate wage restraint legislation decisions.

In making this argument, Ontario points to the similarities between the legislation in these other cases and the Act, especially the Manitoba legislation. [ 96 ] However, this argument fails to have regard to the fact-specific and contextual analysis mandated by the Supreme Court in deciding whether legislation substantially interferes with the right to collective bargaining. [ 97 ] One of the challenges in understanding the wage restraint cases is that there is an inherent tension between the protection of a right to a process of collective bargaining but not of the right to a specific outcome .

By imposing specific limitations on compensation increases, wage restraint legislation places limitations on the potential outcomes of collective bargaining, which on its own is not a violation of s. 2(d). However, imposing limits on potential outcomes, such as wages, does interfere with good faith negotiation and consultation because it limits the potential areas and scope for negotiation and consultation.

As held by the Court of Appeal of Québec in Procureur général , at para. 97, the question becomes one of degree and intensity, and the degree to which legislation imposing a wage cap interferes with the ability of organizations to bargain collectively. [ 98 ] Based on my review of the case law above, there is no formula for assessing whether the degree of interference reaches the level of substantial interference.

Rather, the courts have looked at a set of factors to assess the degree of interference, and whether the measures imposed nevertheless leave room for a meaningful process of good faith negotiation and consultation. [ 99 ] These indicia include consideration of the circumstances and process leading to the passage of the legislation.

Significant collective bargaining prior to the passage of the legislation or meaningful consultation on the legislation diminish the finding of interference, because such processes mean that there was negotiation or consultation before the imposition of the wage restraint measure, and that not much more could have been gained through further negotiation or consultation. On this issue, with respect, I do not agree with the Court of Appeal of Manitoba’s finding that it was an error for the trial judge to consider the fact that the Manitoba government did not consult with the unions before passing the PSSA .

Negotiation of collective agreements and consultation on legislation are different. However, as acknowledged in the decisions dealing with the constitutionality of the ERA , they can both play a role in determining whether legislation limiting the areas of negotiation violate s. 2 (d). Good faith collective bargaining prior to the enactment of legislation can form the basis for a finding that there has been no substantial interference with the process of collective bargaining.

Similarly, while consultation on legislation is not required, meaningful consultation can also serve as evidence that there has not been significant interference with the collective bargaining process. [ 100 ] Another indication that wage cap legislation does not substantially interfere with the process of good faith negotiation and consultation is where the legislation leaves room for meaningful negotiation and consultation on issues other than wages.

This is because, in such circumstances, the legislation still allows workers to come together in an effort to achieve workplace goals. [ 101 ] Similarly, where the wage restraint legislation allows for a process of exemption, over which organizations can negotiate or even strike, there is an attenuated interference with the ability to negotiate and bargain in good faith. [ 102 ] Finally, where the terms of the wage restraint legislation replicate the terms of collective bargaining agreements freely negotiated in the public sector, this serves as an indication that there has not been substantial interference because it suggests that a free process of collective bargaining would not have led to a better outcome if the unions had participated or continued to participate in negotiations. [ 103 ] Before turning to an analysis of the Act and the circumstances under which it was enacted, I pause to comment on two additional factors the Court of Appeal of Manitoba suggested are also relevant. [ 104 ] First, as mentioned above, the court stated, at para. 128 and elsewhere, that one relevant consideration is whether the legislation is “broad[ ]based”, applying to represented and non-represented employees.

With respect, this cannot be a relevant consideration. The s. 2(

d) analysis requires consideration of whether legislation substantially interferes with the process of collective bargaining. The fact that legislation may also apply to non-represented employees does not assist in this inquiry.

The issue is not whether the legislation targets represented employees, but rather the impact the legislation has on represented employees’ collective bargaining rights. [ 105 ] Second, in Manitoba Federation , the Court of Appeal of Manitoba also suggested that other wage restraint legislation cases had established that time-limited wage restraint legislation does not substantially interfere with the process of collective bargaining. Again, I do not agree with this characterization of the other decisions.

The focus of the ERA decisions was on whether, despite the legislated wage cap, a process remained for the unionized employees to come together and engage in good faith negotiation and consultation over working conditions. The fact that a measure is not permanent may be relevant to assessing whether it constitutes a substantial interference. However, it is still appropriate to measure the degree of interference within the relevant collective bargaining period. It is hard to imagine that legislation that halted all collective bargaining, even for a period of one year, would sustain s. 2(

d) scrutiny. In other words, time limits may be relevant but they should not be overemphasized when looking at the impact of the legislation on collective bargaining in the context and circumstances of a particular case. In this respect, I agree with the comment made by the Nova Scotia Court of Appeal in Reference re Bill 148 , at para. 49: In my view, Manitoba Federation does not add any new principles to the jurisprudence with respect to s. 2(

d) of the Charter . The Attorney General relies heavily on this decision because of the similarities between the legislation under consideration and the PSSA . He argues it stands for the proposition time limited wage restraint legislation is always constitutional. If the suggestion is this conclusion can be reached without the need to consider the surrounding context, this runs contrary to the clear advice of the Supreme Court of Canada in Health Services, Meredith and British Columbia Teachers’ Federation . I would not adopt such an

interpretation of Manitoba Federation . [Emphasis added.] [ 106 ] Ultimately, while I take issue with the Court of Appeal of Manitoba’s treatment of pre-legislation consultation, the application of legislation to represented and non-represented employees and the time-limited nature of the legislation, I note that this does not detract from the fact that the PSSA has several of the characteristics I referred to above as indicia of constitutionality. Notably, the court found

that the PSSA left room to negotiate matters of importance, including an exemption clause that maintained a right to strike over wages, and it replicated wage increases in other public sector collective agreements. [ 107 ] As reviewed below, in contrast with the ERA and PSSA decisions, the circumstances leading up to the passage of the Act and the terms of the Act, including a comparison of those terms to other public sector negotiated agreements, all support a finding that the Act substantially interfered with the ability of the respondents to enter into good faith negotiation and

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