BOARD OF INQUIRY (Human Rights Code)
IN THE MATTER OF the Ontario Human Rights Code, R.S.O. 1990, c. H.19, as amended;
AND IN THE MATTER OF the complaint by Eleanor Iness, dated January 10, 1995, alleging discrimination in accommodation on the basis of receipt of public assistance by Caroline
Co-operative Housing Inc.;
B E T W E E N:
Ontario Human Rights Commission
-and-
Eleanor Iness
Complainant
-and-
Caroline Co-operative Housing Inc.
and Canada Mortgage and Housing Corporation
Respondents
INTERIM DECISION
Adjudicator: Mary Anne McKellar
Board File No.: BI-0320-00
Decision No.: 01-012-I
Board of Inquiry (Human Rights Code)
505 University Avenue
2nd Floor, Toronto, ON M5G 2P3
Phone (416) 314-0004 Toll free 1-800-668-3946 Fax: (416) 314-8743
TTY: (416) 314-2379 TTY Tollfree: 1-800-424-1168
A P P E A R A N C E S
Ontario Human Rights Commission ) Anthony Griffin,Cory Boyd,
) Counsels
Eleanor Iness, Complainant ) Sheilagh Turkington, Counsel
) Leilani Farha, Counsel
Caroline Co-operative Housing Inc., )
Respondents ) Bruce Cameron, Counsel
Canada Mortgage & Housing Corporation, ) Alan D’Silva, Counsel
Respondents )
INTRODUCTION
The Complainant, Eleanor Iness, and the Respondent, Caroline Co-operative Homes Inc. (“Caroline”), seek by motion to add the Canada Mortgage and Housing Corporation (“CMHC”) as a Respondent to Iness’ Complaint dated January 10, 1995 (“the Complaint”).
The Ontario Human Rights Commission (“the Commission”) and CMHC oppose the motion.
THE ISSUES
There are two issues to be addressed on the motion:
Does the Board of Inquiry (“the Board”) have jurisdiction to add CMHC as a party?
Ought the Board to add CMHC as a party?
THE DECISION
The Board finds that CMHC is a proper party to the Complaint and further finds that it has the jurisdiction to add it.
THE FACTS
The Board has reviewed the affidavits of Sophie Vlahakis and Steven Rutchinski, the Motion materials filed by the Complainant, and the pleadings filed in this matter. On the basis of those materials, and for the purposes of disposing of this motion, the Board understands the following facts to be true.
Caroline is a non-profit housing co-operative. On January 7, 1980, Caroline entered into an Operating Agreement with CMHC pursuant to which the latter agreed to subsidize the rent payable by eligible Co-op members. Eligibility for subsidy is determined on the basis of the amount of the member’s income. Clauses 2 (8) and (9) of the Operating Agreement under the heading “Occupancy” deal with the rent payable by members eligible for subsidy:
(8) Units allocated to income tested occupants shall be leased at occupancy rates according to the income of the occupant, but not less than those as set forth in Schedule “A” attached up to the maximum project occupancy charge. Where fully serviced accommodation is not provided the occupancy charge may be reduced by an amount approved by the Corporation, which represents the cost of services not provided as set forth in clause 1(11) above. Where additional services are provided the occupancy charge is to be increased by an amount approved by the Corporation.
(9) Occupants receiving welfare assistance or family benefits shall pay the shelter component of the welfare or family benefit payment or the amount required by application of the total payment to the rent-to-income scale identified in Schedule “A”, whichever is the greater.
The Complainant is a member of the Co-op and has resided there since 1981. Her income level makes her eligible for the CMHC subsidy. The source of the Complainant’s income is social assistance benefits. A portion of the benefits she receives is characterized as a “shelter allowance”. The “shelter allowance” portion exceeds 25% of her total benefits.
Prior to 1995, Co-op members eligible for subsidy paid 25% of the market rent for the units they occupied and the balance of the rent was subsidized by CMHC.
Effective January 1, 1995, Caroline reverted to calculating the rent paid by Co-op members eligible for subsidy in strict accordance with the terms of its Operating Agreement with CMHC. For the Complainant, this change meant that she had to contribute the whole of the “shelter allowance” portion of her benefits towards the market rent, with the balance subsidized by CMHC. Caroline alleges that it altered its practice in accordance with the CMHC’s recommendation following its 1994 audit of Caroline. This recommendation was set out in CMHC’s letter to Caroline dated May 25, 1994:
We noted that the Co-op has not been applying the greater of the shelter component of the welfare or family benefit payment or the amount required by the application of the total welfare payment to the graduated occupancy charge scale, whichever is greater as required by the Operating Agreement.
We recommend that households receiving social assistance should pay the full potential shelter component (basic shelter and variable shelter) of the welfare or family benefit payment or the amount determined by the application of the total payment to the graduated occupancy charge scale, whichever is greater.
On January 10, 1995, the Complainant filed the Complaint, alleging that Caroline’s change of practice with respect to the application of the CMHC subsidy violated her right to equal treatment with respect to the occupancy of accommodation by discriminating against her on the basis of her receipt of public assistance. It is alleged that the Complainant suffered monetarily as a consequence of Caroline’s change of practice because she was no longer able to meet her hydro and insurance costs out of her “shelter allowance” but had instead to meet them out of the “basic needs allowance” portion of her benefits. It is also alleged that Caroline’s change in practice caused the Complainant to be identified within the Co-op community as a person in receipt of social assistance and subjected her to prejudicial attitudes and stereotypes related to her source of income.
THE PARTIES’ POSITIONS
The Complaint named only Caroline as a Respondent. Subsequent to the Commission’s investigation of the Complaint and its referral to the Board, the Complainant and Caroline indicated their intention to seek to add CMHC. The rationale for adding CMHC is that the rental practice alleged to be discriminatory is based on the terms of the Operating Agreement to which both Caroline and CMHC are a party, and which Caroline alleges CMHC required be strictly adhered to.
The Commission takes the position that the Board is without jurisdiction to add CMHC because it is a federal Crown agency, acting for and on behalf of the Crown. Furthermore, the Commission submits that the provision of funding to co-operative homes is a vital and integral part of CMHC’s activities, which it carries out pursuant to the federal spending power.
CMHC also took the position that the Board is without jurisdiction to add it as a party. It relied on four propositions in support of its position. First, CMHC is a federal Crown agency. Secondly, CMHC is acting solely within the federal spending power and is not acting within the provincial sphere at all. Thirdly, the Canadian Human Rights Act, R.S.C. 1985, c. H-6, as amended (“the CHRA”) applies to CMHC and provides a complete code for scrutinizing any alleged discrimination on the part of CMHC. Fourthly, the Board lacks jurisdiction to order a remedy against CMHC.
Additionally, the CMHC argued that the Board ought not to add it as a party even if it possesses the jurisdiction to do so because the Commission and Complainant have offered no explanation for not having sought to do so earlier in the process.
THE ANALYSIS
The Board’s General Jurisdiction to Add Respondents
Pursuant to ss. 39(2)(d) and 39(3) of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (“the Code”), the Board has jurisdiction to add respondents to a complaint:
39(2) The parties to a proceeding before the board of inquiry are,
(d) any person appearing to the board of inquiry to have infringed the right;
(3) A party may be added by the board of inquiry under clause (2)(d) or clause (2)(e) at any stage of the proceeding upon such terms as the board considers proper.
But for the constitutional question, the Board would exercise its discretion to add CMHC as a respondent. The Commission’s Statement of Facts and Issues and Caroline’s Response to it both call into question the propriety of the terms of the Operating Agreement respecting the rent to be charged to social assistance recipients. CMHC is a party to that Operating Agreement. Caroline requests that the Board make remedial orders that would effectively alter the terms of that agreement. Caroline’s Response further calls into question the actions of CMHC in allegedly insisting on adherence to that agreement.
Effect of Delay
While the Complaint was initiated in January 1995, no attempt was made to add CMHC as a party until October 2000. Without conceding that the Code applied to it, CMHC submitted that the delay in bringing the Complaint to the attention of CMHC ought to influence the Board in its exercise of discretion to add it as a respondent. The Board does not accept this submission for two reasons. First, s. 39(3) expressly contemplates that a respondent may be added at “any stage” of the proceedings. Second, the Board’s jurisprudence has consistently held that delay, in and of itself, is not enough to defeat an otherwise proper case for joinder; rather, the consequences of the delay must be such as to cause substantial actual prejudice to the potential respondent. CMHC did not assert that it would be prejudiced and it did not lead any evidence of actual prejudice.
The Nature of the Constitutional Issues
No one speaking to this motion challenged the constitutional validity of the provisions of the Code, including s. 39. Nor has there been any challenge to the constitutional validity of the CHRA or any of the statutes pursuant to which CMHC derives authority for its activities. Those statutes are identified and discussed briefly in the following section of this decision.
The constitutional issue before the Board is simply whether CMHC is subject to the provisions of the Code in the circumstances of this case, having regard to the principles of law respecting the division of powers as between the federal and provincial governments set out in the Constitution Act, 1867, U.K. 30 & 31 Victoria, c. 3. The books of authorities provided to the Board were voluminous. Although not all of the cases reproduced therein were referred to in oral argument, the Board has nevertheless reviewed all of them, as well as some others cited in those cases.
The Board undertakes the task before it with some trepidation, cognizant of two facts: there is no room for error on the Board’s part with respect to its constitutional jurisdiction; and the most critical determinant of this issue is often the choice of where to commence the analysis. In this case the Complainant and Caroline urged the Board to start by examining the Code and its provisions, that is to start by presuming jurisdiction. By contrast, the Commission and CMHC recommended an analysis commencing with a consideration of CMHC and its activities, leading to a presumption of no jurisdiction. The Board prefers a more balanced approach. Where its constitutional competence is at issue, the Board takes the view that it should ask itself three questions: does the Board have jurisdiction over the subject matter of the proceeding; the parties to it; and the relief sought? See Cuddy Chicks v. Ontario, 1991 CanLII 57 (SCC), [1991] 2 S.C.R. 5.
Is CMHC a party over whom the Board can have jurisdiction?
(i) CMHC is an Agent of the Crown
CMHC is created pursuant to s. 3 of the Canada Mortgage and Housing Corporation Act, R.S.C. 1985, c. C-7, as amended (“the CMHC Act”). By s. 5(1) of the CMHC Act, CMHC is expressly declared to be “for all purposes an agent of her Majesty in Right of Canada”. CMHC’s powers and functions are set out in a general way in ss. 17 and 19 of the CMHC Act. With a few exceptions not relevant to this decision, CMHC can exercise all powers reserved to the Minister of Finance and to the Minister responsible for various federal “housing acts” under those same acts.
One of the “housing acts” referred to in the CMHC Act is the National Housing Act, R.S.C. 1985, c. N-11, as amended (“the NHA”). Although the Operating Agreement was entered into pursuant to a predecessor version of the NHA and regulations, nothing in this decision turns on the distinctions in drafting between that version and the current version of this legislation.
The purpose of the NHA is set out in s. 3:
The purpose of this Act, in relation to financing for housing, is to promote housing affordability and choice, to facilitate access to, and competition and efficiency in the provision of, housing finance, to protect the availability of adequate funding for housing at low cost, and generally to contribute to the well-being of the housing sector in the national economy.
The NHA also reiterates in s. 4 that every right or obligation incurred by CMHC under the Act is a right or obligation of Her Majesty in Right of Canada.
Under the NHA, the CMHC is empowered to spend money in various ways to finance housing. For example, under Part VII, “Facilitation of Home Ownership and Occupancy”, s. 61(1) empowers CMHC to “make loans and contributions to cooperative associations and their members” in respect of housing projects. Similarly, under Part XIV, “Housing Development”, s. 95(1) empowers CMHC to “make loans and contributions to assist with the payment of the capital and operating costs of housing projects”. In exercising its power pursuant to either of these sections, CMHC may determine the terms and conditions on which it makes the loan or contribution, including any “conditions with respect to the operation or occupancy of the housing project.” There is no provision in the NHA expressly empowering CMHC to dictate the manner in which a recipient allocates the CMHC contribution to defray the rental expenses of low-income tenants. For the purposes of this decision, the Board will assume that CMHC was not exceeding its statutory authority when it so stipulated.
CMHC is also subject to the Financial Administration Act, R.S.C. 1985, c. F-11 (“the FAA”). The preamble to this Act declares that it is:
An Act to provide for the financial administration of the Government of Canada, the establishment and maintenance of the accounts of Canada and the control of Crown corporations.
Part X of the FAA deals with Crown corporations. Pursuant to the definition contained in s. 83(1), CMHC is an “agent corporation”:
A Crown corporation that is expressly declared by or pursuant to any other Act of Parliament to be an agent of the Crown.
The following provisions appear under the heading “Crown agency status” in the FAA:
96 An agent corporation may exercise its powers only as an agent of the Crown.
97 An agent corporation may enter into contracts in the name of the Crown or in the name of the corporation.
98 Actions, suits or other legal proceedings in respect of any right or obligation acquired or incurred by an agent corporation, whether in the name of the Crown or in the name of the corporation, may be brought or taken by or against the corporation in the name of the corporation in any court that would have jurisdiction if the corporation were not an agent of the Crown.
(ii) Applicability of Provincial Law to Crown Agents
CMHC suggested that its status as a federal Crown agent is sufficient to immunize it from the application of provincial law. The Board rejects this proposition. It is clear from a review of the jurisprudence that the determination of this question requires much more nuanced analysis of the division of powers between the federal and provincial legislatures.
The only case cited to the Board that appears to support CMHC’s proposition is Federal Business Development Bank v. Hillcrest Motor Inn Inc. (1988), 1988 CanLII 2835 (BC CA), 51 D.L.R. (4th) 464 (BCCA). This case dealt with the priority as between the security interest of the Federal Business Development Bank and a statutory lien in respect of unpaid workers’ compensation premiums. The FBDB’s federal constituting statute expressly made it an agent of the Crown. On this basis the Court determined that it was immune to the application of provincial statutes:
When a Crown agent acts within the scope of the public purposes it is statutorily empowered to pursue, it is entitled to Crown immunity from the operation of statutes, because it is acting on behalf of the Crown. I think that this view is determinative of all grounds of appeal in this case. The F.B.D.B. was acting within the scope of its powers which the legislation had authorized it to pursue. (at p. 468)
Subsequent to the release of Hillcrest Motor Inn, the Supreme Court of Canada issued Bank of Montreal v. Hall, 1990 CanLII 157 (SCC), [1990] 1 S.C.R. 121, which also involved a question as to the effect of provincial legislation on a federally chartered bank’s realization of its security interest in property pursuant to the Bank Act. Following a discussion of the constitutional validity of the Bank Act provisions, the Court determined that there were conflicting provisions in the federal and the provincial legislation:
. . . the question before me is thus reducible to asking whether there is an “actual conflict in operation” between the Bank Act and the Limitation of Civil Rights Act in the sense that the legislative purpose of Parliament stands to be displaced in the event that the appellant bank is required to defer to the provincial legislation in order to realize on its security. (at p. 151)
The Court found that such a conflict did exist, with the consequence that the principles of paramountcy dictated that the provincial legislation was inapplicable. The Board notes that the outcome reached in Hillcrest Motor Inn could also be supported on the basis of the reasoning in Hall.
With respect to the other cases relied on before the Board, several involved either the application of provincial law to a federal Crown agent, or referred to cases involving such circumstances. For example, in a case dealing with the application of the Newfoundland Residential Tenancies Act to a senior’s residence that had been constructed with money received from CMHC, the Court said:
It will be noted that s. 5 of the “Act” declares that its provisions apply to Her Majesty the Queen. I interpret this reference to the Crown to be directed primarily to her Majesty the Queen in Right of Newfoundland, but also to Her Majesty the Queen in Right of Canada when operating in a field of provincial jurisdiction. It follows that even if the appellant operated the project as an agent of Her Majesty the Queen in Right of Canada, this fact alone would not exempt it from the provisions of the “Act”, since the category of ‘housing’ per se is wholly within provincial jurisdiction.
North Haven Manor Senior Citizens’ Home v. Central Residential Tenancies Board NO. 212, [1988] N.J. No. 84 (T.D.) (at p.10)
Similarly, in a case not cited by the parties, Bertelsen v. Canada Mortgage and Housing Corp., [1991] B.C.J. No. 312 (S.C.), the Court relied on s. 99 of the FAA to find that an action against CMHC based on provincial occupier’s liability legislation could proceed in a provincial court, but that the prerequisite to such an action was the provision of notice in accordance with the federal Crown Liability Act.
Canada Labour Relations Board v. The Canadian National Railway Company 1974 CanLII 154 (SCC), [1975] 1 S.C.R. 786 illustrates the Court’s approach to the applicability of provincial legislation to Crown corporations. A union made a certification application in respect of person employed at the Jasper Park Lodge, a hotel owned by the CNR. The application was made to the Canada Labour Relations Board (the CLRB”) under federal labour legislation. The CLRB found that it had jurisdiction. All subsequent reviewing courts disagreed. The Supreme Court of Canada determined the issue by noting that the labour relations of “railway or other transportation works” of CNR were subject to federal legislation, so that:
. . . what is left is consideration of the question whether the power to acquire and operate hotels, which the respondent may find to be necessary and convenient for the purposes of its railway system, warrants this Court in saying that a hotel so acquired, and being a hotel of the character of Jasper Park Lodge, falls within the words “other transportation works”. This phrase is nowhere defined, but if it is to have the embracive grasp which the appellant Board would attribute to it, it must also embrace any of the other properties which the respondent is authorized to acquire under s. 29, even though they are not integrated with or even incidental to its transportation system, as, for example, offices and other buildings. In short, the Board would have it that what the respondent may find “necessary and convenient for the purposes of National Railways” comes within the declaration in s. 18(1) covering other transportation works”. I am of the opinion that this is an untenable argument, especially in light of the history of the section. (at p. 792)
Section 66 of the CHRA provides that it binds the Crown. Neither this section, nor any other in the CHRA or other federal legislation brought to the attention of the Board, however, goes on to specifically preclude the application of provincial human rights legislation to Crown agents. This is a significant omission in the Board’s view because it is in marked contrast to the approach taken in the Canada Labour Code, R.S.C. 1985, c. L-2, as amended (“the Labour Code”). The Labour Code and its predecessor legislation specifically deal with the applicability of federal collective bargaining legislation to Crown agents. Section 4 of the Labour Code provides:
This Part applies in respect of employees who are employed on or in connection with the operation of any federal work, undertaking or business, in respect of the employers of all such employees in their relations with those employees and in respect of trade unions and employers’ organizations composed of those employees or employers.
Section 5(1) of the Labour Code provides:
This Part applies in respect of any corporation established to perform any function or duty on behalf of the Government of Canada and in respect of the employees of any such corporation, except any such corporation, and the employees thereof, that the Governor in Council excludes from the operation of this Part.
The inclusion of s.5(1) in the Labour Code suggests that, in the absence of a specific finding of federal agency sufficient to invoke the section, whether or not the labour relations of Crown corporations is governed by the Labour Code depends on the application of the customary legal principles respecting division of powers as between the federal and provincial legislatures. There is no rational basis for refusing to apply the same principles in determining whether the activities of a Crown corporation can be subject to provincial human rights legislation.
Having regard to the jurisprudence and statutory provisions canvassed above, the Board concludes that the fact that CMHC is expressly declared to be a Crown agent is not sufficient to render the Code inapplicable to it. In other words, CMHC is a party over which the Board may have jurisdiction. Whether it has jurisdiction in the circumstances of this case must be determined having regard to the nature of CMHC’s impugned activities.
Does the Board have jurisdiction over the subject matter of the proceeding?
(i) The Code
The Board’s jurisdiction to inquire into the Complaint derives from the Code.
The Code is legislation of general application. Subsection 2(1) provides that “every person has a right to equal treatment with respect to the occupancy of accommodation, without discrimination because of . . . the receipt of public assistance.”
Insofar as its jurisdiction over the subject matter of the Complaint is concerned, the allegations fall squarely within s. 2(1) of the Code. Caroline is in the business of providing housing. The Operating Agreement impacts on the terms pursuant to which that housing was made available to the Complainant.
(ii) The CHRA
The purpose of the CHRA as set out in s. 2 makes it clear that this legislation has application only to “matters coming within the legislative authority of Parliament”:
- The purpose of this Act is to extend the laws in Canada to give effect, within the purview of matters coming within the legislative authority of Parliament, to the principle that all individuals should have an opportunity equal with other individuals to make for themselves the lives that they are able and wish to have and to have their needs accommodated, consistent with their duties and obligations as members of society, without being hindered in or prevented from doing so by discriminatory practices based on race, national or ethnic origin, colour, religion, age, sex, sexual orientation, marital status, family status, disability or conviction for an offence for which a pardon has been granted.
CMHC and the Commission characterize CMHC’s actions in entering into the Operating Agreement as involving an exercise of the federal spending power. As such, they submit that it is subject to the CHRA and not the Code.
The Complainant and Caroline do not dispute that CMHC is exercising the federal spending power. They merely point out that that spending is not a head of power or a “matter coming within the legislative authority of Parliament”. They say that CMHC’s spending pursuant to the Operating Agreement affects accommodation and that makes it subject to the Code.
(iii) The Federal Spending Power
The “federal spending power” is not an enumerated head of power under the Constitution Act, 1867. Rather, it is a power inferred from the enumerated rights to levy taxes, appropriate federal funds, and legislate in relation to public property. Necessarily incidental to Parliament’s power to raise money is its power to spend it. Such money is sometimes provided by the Crown to fund provincial programmes beyond Parliament’s legislative capacity to establish. In those circumstances questions have arisen respecting constitutional constraints on the exercise of the federal spending power. In Constitutional Law of Canada, (Loose Leaf Edition), Carswell (Toronto), Professor Peter Hogg describes the limits of the federal spending power in the following paragraph:
It seems to me that the better view of the law is that the federal Parliament may spend or lend its funds to any government or institution or individual it chooses, for any purpose it chooses; and that it may attach to any grant or loan any conditions its chooses, including conditions it could not directly legislate. There is a distinction, in my view, between compulsory regulation, which can obviously be accomplished only by legislation enacted within the limits of legislative power, and spending or lending or contracting, which either imposes no obligations on the recipient (as in the case of family allowances) or obligations which are voluntarily assumed by the recipient (as in the case of a conditional grant, a loan or a commercial contract). There is no compelling reason to confine spending or lending or contracting within the limits of legislative power, because in those functions the government is not purporting to exercise any peculiarly governmental authority over its subjects. (at pp. 6-17-18)
The Supreme Court of Canada’s decision in Reference re Canada Assistance Plan (B.C.), 1991 CanLII 74 (SCC), [1991] 2 S.C.R. 525 clearly states that there are no constitutional constraints on the exercise of federal spending power:
Finally, I turn to the second branch of this argument of the Attorney General of Manitoba. This was the argument that the “overriding principle of federalism” requires that Parliament be unable to interfere in areas of provincial jurisdiction. It was said that, in order to protect the autonomy of the provinces, the Court should supervise the federal government’s exercise of its spending power. But supervision of the spending power is not a separate head of judicial review. If a statute is neither ultra vires nor contrary to the Canadian Charter of Rights and Freedoms, the courts have no jurisdiction to supervise the exercise of legislative power. (at p. 567)
Even though it cannot be constitutionally constrained, however, legal consequences can attach to the exercise of the federal spending power. This proposition is well illustrated by the case of YMHA Jewish Community Centre of Winnipeg Inc. v. Brown, 1989 CanLII 53 (SCC), [1989] 1 S.C.R. 1532. In this case, the YMHA entered into an agreement with the federal government pursuant to which it engaged unemployed workers in receipt of unemployment insurance benefits. Pursuant to the agreement, the workers continued to receive their UI benefits, and the YMHA agreed to top them up to a certain specified level. Provincial employment standards legislation, however, required them to be paid at a higher rate, and the Manitoba Labour Board made an order against the YMHA, which argued both that it was not the employer of the workers, and that the provincial legislation had no application to the matter because it involved an exercise of federal authority. The Court found that the federal spending power was engaged, but that that did not bring a matter otherwise provincial into federal competence:
. . . I find it difficult to believe that simply by providing federal money to promote employment in a region or sector, the federal government can obtain jurisdiction over the workers employed by virtue of the grant . . . . Application of the provincial employment laws in question to the workers on the job creation project does not . . . “bear upon those subjects in what makes them specifically of federal jurisdiction. (at paragraphs 51-53)
In characterizing the federal government’s actions as involving an exercise of the federal spending power rather than an exercise of its exclusive constitutional jurisdiction over unemployment insurance, the Court noted that while the Unemployment Insurance Act contemplated an unemployed worker’s continued receipt of benefits while employed pursuant to a job creation programme, the statute:
. . . does not establish, regulate or define such programmes. The provisions make no attempt to regulate the work to be performed, nor do they in any manner address the subject of labour standards or rates of remuneration. As such, the federal head of power regarding unemployment insurance cannot be said to be the source of the power to establish federal job creation programmes, nor can it be the source of constitutional power to override provincial competence in the area of wages and labour relations. (at paragraph 44)
More recently in Shuebenacadie Indian Band v. Canada (Human Rights Commission) (1997), 1997 CanLII 6370 (FC), 154 D.L.R. (4th) 344 (F.C.T.D); affirmed on other grounds (2000), 2000 CanLII 15308 (FCA), 187 D.L.R. (4th) 741 (F.C.A.) the court had the opportunity to consider the federal spending power in the context of a human rights complaint. The Federal Government and the Indian Band entered into a contractual agreement whereby the former provided funds for social assistance on the reserve and the latter administered it. Social assistance benefits had been available to both status and non-status Indians in the past, but the Band altered the eligibility criteria to exclude non-status spouses of Indians. A complaint was made to the Canadian Human Rights Tribunal and it found the eligibility criteria discriminated on the basis of race. The Band made an application for judicial review, taking issue with the Tribunal’s jurisdiction:
The resolution of this issue requires that the Court determine whether Parliament has the ability to provide the social assistance in question. The applicant submitted that welfare is a matter falling within provincial jurisdiction, more specifically, property and civil rights, and therefore the Canadian Human Rights Act can have no application. (at p. 363)
The Trial Division analyzed the above issue in part on the basis of the federal spending power. In reasons that appear to be completely at odds with the Reference Re Canada Assistance Plan case, the Court said:
I therefore conclude that irrespective of whether the provision of social assistance to non-Indians residing on the Shubenacadie Reserve falls within federal or provincial legislative authority, federal spending itself is within Parliament’s legislative authority and section 2 of the Canadian Human Rights Act therefore applies. (at p. 365)
On appeal, the Court agreed that the social assistance scheme was amenable to scrutiny under the CHRA. The Court, however, grounded its reasoning squarely on the fact that the scheme was designed for the benefit of Indians, and ignored the lower court’s analysis based on the spending power:
It follows, in my judgment, that a program designed to promote Indianness and limited territorially to the Reserve is one that is constitutionally supportable under section 91(24) of the Constitution Act, 1867, as being a program relating to Indians and lands reserved for Indians. (at p. 758)
Because of CMHC’s reliance on them, the Board has dealt with the Shubenacadie decisions at some length, but prefers and is bound by the analysis employed by the Supreme Court of Canada in Reference Re Canada Assistance Plan.
(iv) Pith and Substance, Paramountcy, Reading Down and Double Aspect
A great deal of the argument presented to the Board focused on the jurisprudence in which the above principles were discussed and applied. Such principles are only engaged where competing legislative authorities under sections 91 and 92 of the Constitution Act, 1867 are involved. Having determined that the federal spending power is not an enumerated head of power, these arguments need not be addressed in this decision.
(v) Conclusion
CMHC entered into the Operating Agreement pursuant to its statutory authority under the NHA to fund co-operative housing. The terms of the Operating Agreement are not statutorily specified. The advancing of funds to Caroline does not make accommodation within the Co-op a matter within the legislative authority of Parliament.
Does the Board have jurisdiction over the remedy sought?
CMHC argued that the Board was without jurisdiction to order a remedy against it, and relied on the decision in Leshner v. Ontario (No. 2) (1992), 1992 CanLII 14288 (ON HRT), 16 C.H.R.R. D/184 (Ont. Bd. Inq.) in support of this proposition. Leshner complained that the denial of employment and pension benefits to the same-sex partners of provincial government employees contravened the Code. The respondent employer argued that the federal government essentially forced it to discriminate against Leshner because the Income Tax Act did not recognize the validity of pension plans providing for same-sex survivor benefits. The Board did not find that these circumstances precluded it from granting a remedy:
We accept that the restrictive registration requirements of the I.T.A. present the Respondent with a serious obstacle to providing benefits to all employees in a non-discriminatory manner. Absent these restrictions, the Respondent could have extended survivor benefits to same-sex conjugal relationships within the terms of the Pension Plan . . . . But, in our opinion, the I.T.A., while perhaps influencing remedy, does not excuse the Respondent from a finding that there is otherwise an infringement of the Code. It is neither unlawful nor impossible to provide similar benefits outside of a pension plan registered under the I.T.A., albeit without the tax and cost advantages offered by conformity with the I.T.A. (at p. 13)
It is hard to see how Leshner has any application to the circumstances before this Board. In Leshner, the Board merely recognized that it lacked remedial jurisdiction to declare the registration criteria in the I.T.A. to be null and void as contrary to the Code. The Complaint raises no issue with respect to the discriminatory impact of any statutory provisions. Whether the Operating Agreement has a discriminatory impact is at issue, but it is the terms of that contract and not the statutory authority pursuant to which it was concluded that will be the subject of scrutiny. As previously noted, the terms of the Operating Agreement are not statutorily specified. The Board fails to see why its general remedial jurisdiction in s. 41(1)(a) would not extend to the terms of this contract. Certainly that conclusion is not so self-evident that it constitutes sufficient reason for declining to add an otherwise proper party, over whom the Board has already determined it has jurisdiction, in respect of a complaint falling squarely within the ambit of the Code.
Practical Considerations
Practical considerations do not go to the issue of the Code’s applicability to CMHC in the circumstances of this case. Nevertheless, the Board notes that the conclusion it has reached avoids certain undesirable consequences associated with a determination that the Code is inapplicable to CMHC, while not apparently substantively affecting CMHC’s ability to defend against the Complaint had it been launched pursuant to the CHRA.
CMHC argued that the CHRA applies to it. It did not assert that the CHRA applies to Caroline, or that this Complaint in its entirety ought to have been pursued before the Canadian Human Rights Commission and Tribunal. Consequently, the implication of CMHC’s submissions is that parallel proceedings in both the provincial and federal jurisdictions are required in respect of each of the contracting parties to the Operating Agreement. Proceeding in a multiplicity of forums is undesirable for a number of reasons. First, there exists the possibility of different results in each forum. Secondly, to the extent the terms of the Operating Agreement were found to be contrary to the applicable legislation in either jurisdiction, no remedy touching upon those terms could be ordered in the absence of the other contracting party. Third, there is the attendant expense and delay involved in requiring the Complainant to pursue her complaint in two different forums. In recognition of the fact that the multiplicity of forums issue may pose particular problems where both federal and provincial actors are concerned, the Crown Liability Act contains specific provisions dealing with areas of overlapping jurisdiction as between the Federal Court and Provincial Superior Courts. Unfortunately, no such express provisions exist in the CHRA and the Code.
ORDER
The Complaint is amended to add CMHC as a party respondent, and the title of the proceeding is amended accordingly.
CMHC is directed to serve and file its Response to the Complainant’s and the Commission’s Statements of Facts and Issues within 30 days of the date of this Decision.
Any other party may file a Reply to CMHC’s Response within five days of its service.
Dated at Toronto this 13th day of June, 2001.
“Mary Anne McKellar”
Mary Anne McKellar, Vice-Chair