Social Policy in Ontario

Why Ontario is in court (again) fighting to save Bill 124

Posted on June 26, 2023 in Governance Debates

Source: TVO.org — Authors: John Michael McGrath

TVO.org – Politics
Jun 20, 2023.   by John Michael McGrath

ANALYSIS: A provincial court found that the law, which caps public-sector wages, breached the Charter. But that’s not the end of this legal battle

The Ontario government finds itself before the province’s highest court once again, defending a signature piece of legislation a lower court found violated a section of the Canadian Charter of Rights and Freedoms. This time, it’s 2019’s Bill 124, the Protecting a Sustainable Public Sector for Future Generations Act. The law, which imposes a mandatory legal cap on compensation increases for most of the provincial public sector, was appealed by a coalition of labour unions including teachers’ unions, the Ontario Nurses’ Association, OPSEU, and CUPE. In November 2022, Justice Markus Koehnen, of Ontario’s Superior Court of Justice, ruled that Bill 124 breached the Charter and was therefore void. The Ford government appealed that decision, and that’s what brings them before the Court of Appeal this week. Here’s what you need to know.  (Note: The provisions of Bill 124 applied to TVO workers.)

What does Bill 124 do?
Bill 124, which received royal assent in 2019, sets a maximum 1 per cent annual salary increase for the broader provincial public sector. The limit applies for a three-year period that starts whenever a union begins a new collective bargaining agreement. The “broader” in “broader public sector” means that it applies not just to the workers who report directly to ministers in the provincial government (the “core public service”) but also to the much larger category of workers who bargain with employers whose primary source of funds comes from the provincial government. This includes, crucially, education and health-care workers like teachers and nurses.

Why did the government pass Bill 124?
Peter Bethlenfalvy, who was then the president of the Treasury Board and is now the finance minister, said when he introduced Bill 124 in 2019 that its intention was to help shrink the province’s budget deficits. Bill 124, he said, “would help restore the province to a position of fiscal sustainability and demonstrate respect for taxpayer dollars. That is the very reason we are here today: to move forward and take a measured approach to fiscal sustainability.”

Bethlenfalvy asserted in 2019 that Ontario public spending had grown by $46 billion in 15 years under the Liberals and attributed much of that to compensation in the public sector. For context, according to Bethlenfalvy’s 2023 budget, the province’s program spending — despite Bill 124 — grew from $148 billion in 2018-19 to a projected $190 billion for 2023-24, an increase of $42 billion in five years.

Why did a court find Bill 124 unconstitutional?
There’s now a substantial body of decisions from Canadian courts — including, most importantly, the Supreme Court of Canada — that enshrine the rights of workers to strike and bargain collectively. Section 2 (d) of the Canadian Charter of Rights and Freedoms enumerates the freedom of association; the Supreme Court has read that to include the right of workers to associate in unions and bargain collectively. However, governments can violate Charter rights if they can pass the “Oakes test,” named for the 1986 case in which the Supreme Court first elaborated on the clause in Section 1 of the Charter, which says that rights are subject to reasonable limits “as can be demonstrably justified in a free and democratic society.” It’s not enough for governments to argue that they have an important objective they’re trying to accomplish; under the Oakes standard, they have to prove that they’re using means that are proportional and rationally connected to the goal and that they’re doing the least damage possible to the Charter rights of affected parties.

Koehnen found that Bill 124 failed on these Section 1 grounds. He noted that some agencies whose revenues do not come from provincial tax revenues — like electrical utilities — were included in Bill 124 even though their operations don’t directly affect provincial debt or deficits. He also cited a “lack of care” in the drafting of the bill that suggested the government hadn’t tried to minimize the impairment of Charter rights. While managing the government’s spending is obviously an important function of government, Koehnen said in his decision that it can’t be used as an excuse to ride roughshod over the guarantees in the Charter: “While it might be appropriate to infringe on a Charter right when faced with a serious fiscal challenge, it is not appropriate to do so as part of the day-to-day management of government affairs.”

Could the government win its case on appeal?
According to the government’s factum (the document laying out its arguments in this case), the government will argue, among other things, that Bill 124 didn’t violate Section 2 of the Charter (because of elements like the three-year time limit) and that, if it did, the court should still have deferred to the government on a matter of substantial public policy, as those are best decided by elected governments and not the judiciary. It’s not the role of the courts to craft a specific correct answer to a complicated policy question, it says, and they lack the requisite resources to do so.

The government argues that Koehnen effectively substituted his own judgment both for the government’s assessment of Ontario’s fiscal health and for the appropriate policy response. This isn’t purely opportunistic on the government’s part: a 2016 Court of Appeal decision warned judges not to overstep the boundaries of their own role, saying, “In general terms, judges ought not to see themselves as finance ministers.”

What’s at stake?
The province’s Financial Accountability Office has projected that, if Bill 124 were ultimately to be struck down, provincial spending would have to increase by $8.4 billion by 2026-27. That figure includes both retroactive pay that workers would be entitled to and increased compensation overall, with the end of Bill 124’s legislated cap.

What happens next?
The government, through the Ministry of the Attorney General, will argue before the Court of Appeal that Koehnen’s decision included errors of law. In particular, the government is arguing that elected governments and legislatures need to have flexibility to deliver on the promises they make in elections or to otherwise make the essential decisions of governing — including on matters as fundamental as what the government spends money on. The Court of Appeal isn’t expected to reanalyze all the evidence that was presented at trial; instead, it will focus on the narrower question of whether Koehnen made any errors serious enough to reverse his decision.

Whatever the Court of Appeals decides, it’s unlikely to be the final word on the matter, as both parties will probably at least try to have the decision heard by the Supreme Court of Canada: the government will almost certainly appeal once more if it loses again, and the public-sector unions will seek to appeal if Koehnen’s decision is reversed.

Even a Supreme Court verdict wouldn’t necessarily be final: Section 2 (d) of the Charter — the section Bill 124 was found to have violated — is one that legislatures can override with the procedures laid out in Section 31 of the Charter: the so-called notwithstanding clause. The Ford government used it prior to the 2022 election to reimpose campaign spending limits that had been found to be unconstitutional and then again, more controversially, after the election to attempt to end a strike by education workers. The government eventually retreated in the latter case in the face of vocal opposition from the labour movement, including private-sector unions that had supported the Progressive Conservative party’s re-election efforts earlier that year.

John Michael McGrath is a staff writer at TVO.org covering provincial politics and policy.

https://www.tvo.org/article/why-ontario-is-in-court-again-fighting-to-save-bill-124

Tags: budget, economy, ideology, standard of living

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