Guy Martin

The appeals challenged the constitutional validity of active employment measures under the federal employment insurance regime and the legality of premium-setting provisions that generated large surpluses.

The Court held that employment services, training measures, work-sharing programs, and employment benefits remained within Parliament’s unemployment insurance power because that power includes maintaining ties between unemployed persons and the labour market.

It further held that premiums set under the original statutory framework remained valid as regulatory charges, notwithstanding large surpluses, because s. 66 preserved a sufficient nexus to the scheme.

However, the later provisions authorizing the Governor in Council to set rates without statutory criteria transformed the levy into a tax, and Parliament had not clearly and unambiguously delegated taxing authority as required by s. 53 of the Constitution Act, 1867.

The appeals were therefore allowed in part, invalidating the applicable versions of ss. 66.1 and 66.3 for 2002, 2003 and 2005, with the declaration suspended for 12 months.

The respondents were locked out by their employer during a labour dispute.

A collective agreement was signed and a memorandum governing the return to work was agreed upon, with a portion of the workforce returning immediately and the rest gradually recalled.

The appellant Commission held that the workers not immediately recalled were only eligible for unemployment insurance benefits once production reached a certain level.

The Supreme Court of Canada upheld the Federal Court of Appeal's decision that the stoppage of work terminated on the date the collective agreement was signed, as the lack of intent to perform the contract of service had ended.