Surdivall v. Director of the Ontario Disability Support Program
[Indexed as: Surdivall v. Ontario (Director, Disability Support Program)]
Ontario Reports
Court of Appeal for Ontario,
Laskin, Goudge and Feldman JJ.A.
March 31, 2014
119 O.R. (3d) 225 | 2014 ONCA 240
Case Summary
Social assistance — Disability support — Director of Ontario Disability Support Program having discretion under s. 14(4) of Ontario Disability Support Program Act to forgo recovery of part or all of overpayment of income support to disabled recipient notwithstanding that overpayment is Crown debt — Social Benefits Tribunal having authority to restrict Director's recovery of overpayment and order that part or all of overpayment not be recovered — Ontario Disability Support Program Act, 1997, S.O. 1997, c. 25, Sch. B, s. 14(4).
The appellant, a disabled senior, received income support from the Ontario Disability Support Program. Because of an innocent reporting error, he was overpaid by $3,050. The Director of the program ordered him to repay that amount. On appeal, the Social Benefits Tribunal ordered the Director to collect only half of the overpayment at the rate of $10 per month. The Director's appeal to the Divisional Court was allowed. The court noted that the overpayment was a Crown debt; found that neither the Director nor the tribunal had any discretion to compromise a Crown debt; and that the tribunal's order amounted to a write-off of half of the debt. The appellant appealed.
Held, the appeal should be allowed.
Section 14(4) of the Ontario Disability Support Program Act, 1997, S.O. 1997, c. 25, Sch. B ("ODSPA") provides that "An overpayment may be recovered" by one or more of three specified means. The Director's discretion under s. 14(4) is not limited to choosing the method of recovering an overpayment but also includes the discretion to forgo recovery of part or all of an overpayment. The ODSPA is social welfare legislation, serving some of the province's most impoverished and vulnerable residents. It contains a complex set of regulations, with detailed reporting requirements. Overpayments occur quite frequently, often for innocent reasons. The statutory scheme inevitably requires flexibility so that the Director can deal with overpayments in a rational, reasonable and cost effective way. Although the Minister of Finance has the authority under the Financial Administration Act, R.S.O. 1990, c. F.12 to decide whether to collect or to compromise a Crown debt, his authority is not exclusive. Section 5(1) contains the qualifying phrase "subject to any other Act affecting such obligation". The ODSPA is an "other Act" affecting the collection of Crown debt.
The Social Benefits Tribunal has authority to restrict the Director's recovery of an overpayment and order that part or all of an overpayment be recovered. Section 29(3) of the Ontario Works Act, 1997, S.O. 1997, c. 25, Sch. A provides that "The Tribunal shall not make a decision in an appeal under this Act that the Director would not have authority to make." Although s. 29(3) does not expressly state that the tribunal has authority to make any decision the Director could have made, it does so implicitly by stating the negative. More generally, where a statute provides an appeal from a discretionary decision, the appellate tribunal should be able to exercise that discretion unless the statute specifically precludes it from doing so. As the ODSPA does not specifically preclude the tribunal from [page226] exercising the discretion over overpayments given to the Director, the tribunal may also exercise that discretion.
Canada (Attorney General) v. Mavi (2011), 108 O.R. (3d) 240, [2011] 2 S.C.R. 504, [2011] S.C.J. No. 30, 2011 SCC 30, 417 N.R. 126, 279 O.A.C. 63, 332 D.L.R. (4th) 577, 19 Admin. L.R. (5th) 1, 2011EXP-1819, J.E. 2011-1008, EYB 2011-191692, 97 Imm. L.R. (3d) 173, 2 M.P.L.R. (5th) 297, 221 A.C.W.S. (3d) 742; Steel v. Canada (Attorney General), [2011] F.C.J. No. 657, 2011 FCA 153, [2013] 1 F.C.R. 143, 418 N.R. 327, 94 C.C.E.L. (3d) 86, apld
Other cases referred to
Rizzo & Rizzo Shoes Ltd. (Re) (1998), 1998 837 (SCC), 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, 154 D.L.R. (4th) 193, 221 N.R. 241, J.E. 98-201, 106 O.A.C. 1, 50 C.B.R. (3d) 163, 33 C.C.E.L. (2d) 173, 98 CLLC Â210-006, 76 A.C.W.S. (3d) 894; University Health Network v. Ontario (Minister of Finance), 2001 8618 (ON CA), [2001] O.J. No. 4485, 208 D.L.R. (4th) 459, 151 O.A.C. 286, 2002 D.T.C. 6817 (C.A.)
Statutes referred to
Canadian Charter of Rights and Freedoms
Employment Insurance Act, S.C. 1996, c. 23 [as am.]
Financial Administration Act, R.S.O. 1990, c. F.12, s. 5(1)
Immigration and Refugee Protection Act, S.C. 2001, c. 27 [as am.], s. 145(2)
Ontario Disability Support Program Act, 1997, S.O. 1997, c. 25, Sch. B [as am.], ss. 1, 14(1), (2.1) [as am.], (4), (5) [as am.], 15(1), 16(1), (3) [as am.], 17, 21(1) [as am.], 26(1), 29(3), 31(1), 38
Ontario Works Act, 1997, S.O. 1997, c. 25, s. 60
Rules and regulations referred to
O. Reg. 222/98 (Ontario Disability Support Program Act), s. 67(2), (3)
SOR/2002-277 (Immigration and Refugee Protection Act), s. 135(b)(i)
Authorities referred to
Driedger, Elmer, Construction of Statutes, 2nd ed. (Toronto: Butterworths, 1983)
Jones, David Phillip, and Anne S. de Villars, Principles of Administrative Law, 5th ed. (Toronto: Carswell, 2009)
Sullivan, Ruth, Sullivan on the Construction of Statutes, 5th ed. (Markham, Ont.: LexisNexis, 2008)
APPEAL from an order the order of the Divisional Court (Jennings, Swinton and Harvison Young JJ.), [2012] O.J. No. 1675, 2012 ONSC 1851, 292 O.A.C. 317 (Div. Ct.) allowing an appeal from an order of the Social Benefits Tribunal.
Jackie Esmonde and Cynthia Wilkey, for appellant Glynn Surdivall.
Mimi Singh and Sara Weinrib, for respondent Director of the Ontario Disability Support Program.
Cynthia Pay, for intervenors Metropolitan Action Committee on Violence Against Women and Children and Arch Disability Law Centre. [page227]
The judgment of the court was delivered by
LASKIN J.A.: —
A. Overview
[1] This appeal raises two important questions about the statutory authority of the Director of the Ontario Disability Support Program ("ODSP") and of the Social Benefits Tribunal.
[2] The first question is whether the Director has authority to forgo recovery of part or all of an overpayment of income support to a disabled recipient. Put differently, is the Director's discretion limited to how to collect an overpayment or does the Director also have discretion about when and, more importantly, whether to collect an overpayment? The answer to this question turns on the extent of the discretion conferred by the words "may be recovered" and "may" in the Ontario Disability Support Program Act, 1997, S.O. 1997, c. 25, Sch. B ("ODSPA" or the "Act").
[3] The second question is whether the tribunal, on appeal from a Director's decision, has the authority to restrict the Director's recovery of an overpayment and order that either part or all of an overpayment not be recovered. The answer to this question turns on the scope of the tribunal's appellate jurisdiction.
[4] The appellant, Glynn Surdivall, is a disabled senior. He received ODSP income support until he turned 65. Because he made an innocent reporting error, he received more income support than he was entitled to. He was assessed an overpayment of $3,050, which the Director ordered him to repay.
[5] Surdivall appealed the Director's decision to the tribunal. It held that the Director's decision assessing Surdivall with an overpayment was correct. However, the tribunal ordered the Director to collect only half of the overpayment -- $1,525 -- at the rate of $10 per month.
[6] The Director appealed the tribunal's decision to the Divisional Court. The Divisional Court allowed the Director's appeal. It concluded that neither the Director nor the tribunal had authority to forgive any part of an overpayment.
[7] I do not agree with the Divisional Court's decision. In my opinion, the Director has discretion to forgo recovery of part or all of an overpayment. As the Director has this discretion, so too did the tribunal have discretion to order that the Director collect only half of the overpayment Surdivall received. I would allow the appeal and reinstate the tribunal's decision. [page228]
B. Factual Background and History of the Proceedings
(a) The Ontario Disability Support Program
[8] This program provides monthly support to eligible persons with disabilities. The program serves some of the province's most vulnerable individuals. The support they receive is intended to help them live as independently as possible.
[9] Under the regulations, disabled recipients must provide ongoing financial information as a condition of their eligibility for support. This requirement includes an obligation to report changes in their financial status. As I will outline, if their failure to report a change results in an overpayment of support, the Director may recover the overpayment by one of the methods specified in the statute.
(b) The overpayment to Surdivall
[10] Surdivall is now 67 years old. His only sources of income are a small CPP pension and social benefits for low income seniors. Because of his long-term disabilities, before turning 65, he received income support from the ODSP. This income support included a "shelter allowance" equivalent to the cost of his rent (up to a maximum) for his principal residence.
[11] Beginning in November 2008, while receiving income support, Surdivall lived in an apartment with a friend. He paid rent of $444 per month and received an equivalent amount from the ODSP as a shelter allowance. In August 2009, Surdivall was offered his own apartment in public housing at a rent of only $139 per month. His friend, however, asked Surdivall not to leave until he found another roommate because he would not be able to pay the total rent on his own. So Surdivall stayed with his friend for another ten months until the end of May 2010, and paid rent for both apartments. In June 2010, Surdivall moved into his apartment in public housing and notified the ODSP of his reduced rent.
(c) The Director's decision
[12] The Director took the position that beginning in August 2009, Surdivall's principal residence was his apartment in public housing. She assessed an overpayment of $3,050 ($444 x 10 - $139 x 10) and, to repay it, ordered monthly deductions of $35.85 from Surdivall's ODSP benefits. [page229]
[13] Surdivall appealed the Director's overpayment decision to the tribunal. Before his appeal was heard, he turned 65 and thus was no longer entitled to ODSP benefits.[^1] The Director notified him that he should repay his overpayment by sending a cheque or money order payable to the Minister of Finance. If he could not repay the total amount at that time, he could discuss a repayment plan with the Director's office.
(d) The tribunal's decision
[14] Surdivall appealed the Director's overpayment decision to the tribunal under s. 21(1) of the ODSPA. This section provides that any decision of the Director affecting eligibility for or the amount of income support may be appealed to the tribunal.
[15] After a hearing at which Surdivall testified, the tribunal found that the Director correctly assessed Surdivall with an overpayment of $3,050 for the period August 1, 2009 to May 31, 2010 -- a period Surdivall could have lived in less expensive housing. The tribunal acknowledged that "helping a friend out may be an admirable thing to do" but held that it was not reasonable for Surdivall to do so when he was receiving public assistance at the expense of Ontario taxpayers.
[16] The tribunal found that Surdivall had a responsibility to report his new subsidized rent to the Director. However, the tribunal also found that Surdivall "did not understand or intentionally try to deceive the Director because he testified in a credible, honest and forthright manner as to his understanding that he was not required to inform the Director until he actually moved into his TCHC apartment".
[17] The tribunal concluded that the discretion to recover an overpayment should be "flexible", taking into account the circumstances of each case and the purposes of the Act. Surdivall would "experience financial hardship" if he had to repay the full amount of the overpayment; however, he had some responsibility to the taxpayers of Ontario to repay a portion of it. The tribunal ordered that he repay half, $1,525, at the rate of $10 per month.[^2] [page230]
(e) The Divisional Court's decision
[18] The Director appealed the tribunal's decision to the Divisional Court under s. 31(1) of the ODSPA. That section provides for an appeal of a tribunal's decision on a question of law. The tribunal's authority to order that part of an overpayment not be recovered is a question of law. And the Divisional Court held that the standard of review on that question is correctness.
[19] In its reasons, the Divisional Court noted that an overpayment is a Crown debt. In its view, neither the Director nor the tribunal has any discretion to compromise a Crown debt. The tribunal's order amounted to a write-off of half of the debt. Neither it nor the Director has authority to make such an order. The Director's discretion under the legislation is limited to choosing how she will recover an overpayment [at para. 18]: "There is nothing in the statute which grants the Director the jurisdiction to forgive any part of the overpayment". The Divisional Court allowed the Director's appeal and set aside the tribunal's order limiting recovery of the overpayment.
C. Analysis
I. Does the Director have authority to forgo recovery of part or all of an overpayment of income support to a disabled recipient?
[20] Because s. 29(3) of the Act states that the tribunal on appeal cannot make a decision that the Director does not have the authority to make, we must first decide whether the Director has the authority to forgo recovery of part or all of an overpayment.
[21] Surdivall submits that the Director has broad discretion over overpayments, a discretion that includes forgoing or not recovering an overpayment. The intervenors support Surdivall's position. They submit that the ODSPA should be interpreted consistently with Canadian Charter of Rights and Freedoms values and human rights principles. The respondent submits that the Director's discretion is limited to choosing a method for recovering an overpayment. According to the respondent, the Director may defer collection of an overpayment, but may not forgo recovery of it altogether.
(a) Relevant provisions of the [ODSPA](https://www.canlii.org/en/on/laws/stat/so-1997-c-25-sch-b/latest/so-1997-c-25-sch-b.html)
[22] This first question is a question of statutory interpretation. The statute to be interpreted is the ODSPA. The following are its relevant provisions. [page231]
[23] Purpose and objectives. Section 1 states that the purpose of the Act is to establish a program that has four objectives:
- The purpose of this Act is to establish a program that,
(a) provides income and employment supports to eligible persons with disabilities;
(b) recognizes that government, communities, families and individuals share responsibility for providing such supports;
(c) effectively serves persons with disabilities who need assistance; and
(d) is accountable to the taxpayers of Ontario.
Of these four objectives, the Divisional Court relied only on the last one -- to be accountable to the taxpayers of Ontario.
[24] The Director's powers and duties. The Director, who is responsible for administering the program, has broad powers and duties, which are listed in s. 38.[^3]
The Director shall,
(a) receive applications for income support;
(b) determine the eligibility of each applicant for income support;
(c) if an applicant is found eligible for income support, determine the amount of the income support and direct its provision;
(d) administer the provisions of this Act and the regulations;
(e) determine how the payment of the costs of administering this Act and providing income support is to be allocated;
(f) ensure that the appropriate payments are made or withheld, as the case may be; and
(g) exercise the prescribed powers and duties.
One of the Director's statutory duties is to recover overpayments.
[25] Overpayments. Section 14(1) of the Act defines an overpayment:
14(1) If an amount has been provided to a recipient under this Act in excess of the amount to which the recipient was entitled, the amount of the excess is an overpayment.
As Surdivall received an amount of income support in excess of the amount to which he was entitled, he was properly assessed an overpayment.
[26] Section 14(2.1). This section stipulates that an overpayment is a debt due to the Crown in right of Ontario. [page232]
[27] Section 14(4). This [is] a key provision on the appeal. It sets out three ways by which an overpayment may be recovered (emphasis added):
14(4) An overpayment may be recovered by one or more of reduction of income support under section 15, notice under section 16 or a proceeding under section 17.
Under s. 15(1), the Director may reduce monthly benefits. By regulation, absent consent, the amount deducted cannot exceed ten per cent of a recipient's budgetary needs.
Under s. 16(1), the Director may give a recipient written notice of an overpayment. The notice is enforceable as if it were an order of the Superior Court of Justice.
Under s. 17, the Director may recover an overpayment as a debt due to the Crown in a court of competent jurisdiction.
[28] Section 14(5). In addition to the three methods of recovery of an overpayment listed in s. 14(4), under s. 14(5) an overpayment may be recovered "by any remedy or procedure available to the Crown by law".
(b) The extent of the Director's discretion
[29] The words "may be recovered" and the word "may" structure each of the statutory provisions for the recovery of an overpayment. The word "may" ordinarily confers discretion on a decision-maker and both sides agree that the Director has discretion over the recovery of overpayments. The primary question on this appeal is the extent of this discretion. Is the Director's discretion limited to choosing the method of recovering an overpayment, as the Divisional Court found and the respondent contends, or does the Director's discretion also include a choice about whether to recover an overpayment, as Surdivall contends?
[30] I have concluded that the Director has broad discretion over the recovery of overpayments. She may choose how to recover an overpayment, and if the circumstances of an individual case warrant it, may also choose not to recover part or all of an overpayment.
[31] The basic rule of statutory interpretation in Canada remains the rule formulated over 30 years ago by Elmer Driedger in the second edition of his book, Construction of Statutes, 2nd ed. (Toronto: Butterworths, 1983):
The words of an Act are to be read in their entire context, in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. [page233]
See, for example, Rizzo and Rizzo Shoes Ltd. (Re) (1998), 1998 837 (SCC), 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, at para. 21.
[32] This rule governs the extent of the Director's discretion under the ODSPA.
(i) The word "may" and the phrase "may be recovered"
[33] As I have said, when the legislature confers a statutory power on a decision-maker using the word "may", the power is meant to be discretionary. And, typically, the decision-maker can lawfully decide whether to exercise the power or not to exercise the power -- in other words, typically, "may" impliedly means "may or may not": see R. Sullivan, Sullivan on the Construction of Statutes, 5th ed. (Markham, Ont.: LexisNexis, 2008), at pp. 68-74. However, the word "may" alone does not determine the extent of a decision-maker's discretion.
[34] So, in this case, the words "may" and "may be recovered" do not by themselves resolve whether the Director's discretion over the recovery of overpayments includes a decision not to recover part or all of an overpayment. As is apparent from Driedger's rule, these words must be considered in context, having regard to the scheme and objects of the ODSPA and the legislature's intent.
(ii) The scheme and objects of the [ODSPA](https://www.canlii.org/en/on/laws/stat/so-1997-c-25-sch-b/latest/so-1997-c-25-sch-b.html)
[35] The ODSPA is social welfare legislation, serving some of the province's most impoverished and vulnerable residents. The statute contains a complex set of regulations, with detailed reporting requirements. And, as counsel for Surdivall noted, overpayments occur quite frequently, often for innocent reasons. The statutory scheme inevitably requires flexibility, as the tribunal held in this case, so that the Director can deal with overpayments in a "rational, reasonable and cost effective way": see Canada (Attorney General) v. Mavi (2011), 108 O.R. (3d) 240, [2011] 2 S.C.R. 504, [2011] S.C.J. No. 30, 2011 SCC 30, at para. 54.
[36] The objectives of the program under the ODSPA support giving the Director broad discretion over the recovery of overpayments. For convenience, I again list the four objectives, which are found in s. 1 of the Act: they are to establish a program that
provides income and employment supports to eligible persons with disabilities; [page234]
recognizes that government, communities, families and individuals share responsibility for providing such supports;
effectively serves persons with disabilities who need assistance; and
-- is accountable to the taxpayers of Ontario.
[37] Nothing can be gleaned about the extent of the Director's discretion from the first objective. It is merely descriptive. The second objective, however, does require a broad discretion. This objective recognizes that government together with communities, families and individuals shares responsibility for providing support. To meet this objective, flexibility in collection is needed. Especially when overpayments result from innocent mistakes, demanding recovery may impose an enormous hardship on persons already living well below the poverty line. In such cases, it is entirely appropriate, as the tribunal recognized in Surdivall's appeal, that government shares the responsibility for the overpayment.
[38] The third objective -- "to effectively serve persons with disabilities who need assistance" -- is especially significant. This objective cannot be met unless the Director has the flexibility not to recover overpayments in appropriate cases. Counsel for Surdivall gave two examples of tribunal decisions where recovery of overpayments would be most unfair to disabled recipients.
[39] In the first example, an "incompetent" ODSP recipient living in a group home had his ODSP benefits paid to a trustee. The trustee misappropriated all the payments for her own benefit. An overpayment was assessed because the trustee failed to report a change in circumstances. Yet the ODSP recipient was responsible for the overpayment though he received no benefit and was neither competent nor personally required to report changes in circumstances to the program: see ON SBT 1105-03547 (2012); ON SBT 1012-11713 (2012).
[40] In the second example, an ODSP recipient lived with her son and had arranged for the program to pay her rent directly to her landlord because she was "incapable" of managing her finances. When her son moved out, she informed ODSP and her housing provider. ODSP ought to have decreased her shelter allowance but failed to do so even after she brought the error to her caseworker's attention. ODSP later sought to recover the $1,350 overpayment it had erroneously paid to her landlord, though the recipient had seen no benefit from the overpayment and would suffer hardship if forced to repay it: see ON SBT 1102-01061 (2011). [page235]
[41] The harshness and unfairness of debt recovery in these two examples are self-evident -- and I expect there are many similar cases. If the program is to serve disabled recipients effectively, then the Director must have discretion not only over how to collect an overpayment, but over whether to collect it at all.
[42] The final objective of the program and the one objective of the ODSP relied on by the Divisional Court and by the respondent is that of being accountable to the taxpayers of Ontario. According to the Divisional Court [at para. 18], "it would be virtually inconceivable given the requirements of accountability and transparency" that the Director would have discretion to forgo recovery of overpayments. According to the respondent, Surdivall's position would give the Director an open-ended discretion not to collect an overpayment regardless of the circumstances and would mean that there would be no accountability to the public for the loss of funds.
[43] I think that both the Divisional Court and the respondent have taken too narrow a view of the program's objective of accountability to Ontario's taxpayers. This objective does not require that overpayments always be recovered. It requires that they be recovered if circumstances warrant their recovery. Thus, for example, if the cost of recovering an overpayment would exceed the actual recovery of the overpayment, then insisting on recovery would not further the program's objective of accountability to Ontario's taxpayers. For this reason, the Director's own policy is not to recover overpayments of less than $2.50.
[44] In my view, the ODSP will be accountable to the taxpayers of Ontario if public funds are spent fairly, honestly and reasonably. The Director's discretion over the recovery of overpayments is not open-ended. It must be exercised reasonably taking account of a disabled recipient's individual circumstances. In some cases, it will not be reasonable for the Director to recover all or part of an overpayment. Forgoing recovery in these cases is still consistent with the program's objective of accountability to the province's taxpayers.
[45] Thus, the scheme of the statute and the objectives of the statute support conferring a broad discretion on the Director over the recovery of overpayments. I next turn to the context in which the words "may" and "may be recovered" are found in the Act.
(iii) The entire context
[46] The Divisional Court and the respondent relied heavily on the proximity of the Director's discretionary power over the recovery of overpayments to their methods of recovery. In each [page236] case, the phrase "may be recovered" and the word "may" are followed by specific methods of recovery. This suggests, the respondent argues, that the Director's discretion is limited to recovery options; it does not include the option of forgoing recovery.
[47] There are three answers to this argument. The first answer is the scheme and objects of the statute. They support a broad interpretation of the Director's discretion, which includes discretion not to recover overpayments in appropriate cases.
[48] The second answer is that if the legislature intended to limit the Director's discretion to methods of recovery of an overpayment, it could have used the phrase "shall be recovered" instead of "may be recovered" in s. 14(4) of the ODSPA. If s. 14(4) read "an overpayment shall be recovered by one of more of", it would be consistent with the respondent's argument. The contrasting use of the phrase "may be recovered" suggests that the legislature intended the Director to have a broader discretion.
[49] The final answer is the Supreme Court of Canada's decision in Mavi. That case dealt with the federal government's sponsorship program under the Immigration and Refugee Protection Act, S.C. 2001, c. 27 ("IRPA"). Under that program, when a Canadian citizen or permanent resident sponsors a family member to immigrate to Canada, the sponsor must sign an undertaking to support the sponsored family member financially for a set number of years. If, during that period, the family member receives social assistance, the sponsor is deemed to have defaulted on the undertaking. The sponsor's obligation becomes a Crown debt, which the sponsor must repay on demand. Either the provincial or the federal government may recover the cost of the social assistance from the sponsor.
[50] One of the issues in Mavi was the scope of the discretion given to the government to recover sponsorship debts: was it limited to a choice of which level of government could recover, or did it include discretion to limit recovery to agreed upon amounts and terms of recovery?
[51] The relevant section of the IRPA, s. 145(2), includes the phrase "may be recovered", followed by reference to the two levels of government:
Debts Due -- sponsors
145(2) Subject to any federal-provincial agreement, an amount that a sponsor is required to pay under the terms of an undertaking is payable on demand to Her Majesty in right of Canada and Her Majesty in right of the province concerned and may be recovered by Her Majesty in either or both of those rights.
[52] The application judge in Mavi thought that the phrase "may be recovered" simply allowed either level of government to [page237] enforce the undertaking. Binnie J., writing for the Supreme Court, rejected that interpretation. At para. 54 of his reasons, he wrote that "nothing in the relevant sections explicitly requires Her Majesty to pursue collection of debts irrespective of the circumstances" (emphasis in original). And he held, at para. 59, that the government's discretion in s. 145(2) was broader than just discretion over whether the province or federal government could enforce a sponsorship debt. It also included discretion over the amount and terms of repayment, short of forgiveness of the debt altogether. The government could not forgive the sponsor's debt entirely because of s. 135(b)(i) of regulation SOR/2002-277 under the IRPA, which provides:
Default
- For the purpose of subparagraph 133(1)(g)(i), the default of a sponsorship undertaking
(b) ends, as the case may be, when
(i) the sponsor reimburses the government concerned, in full or in accordance with an agreement with that government, for amounts paid by it[.]
[53] From the Supreme Court's decision in Mavi, I draw the conclusion that the location of the phrase "may be recovered" in the ODSPA does not limit the Director's discretion to a choice of the method of recovering an overpayment. The discretion is broader than simply discretion over recovery options. But I also conclude, for two reasons, that the Director's discretion under the ODSPA is broader than the government's discretion under the IRPA, and extends to the forgiveness of a debt entirely.
[54] The first reason is that the government's discretion over the recovery of sponsorship debts under the IRPA is limited by s. 135(b)(i) of the regulation to agreed-on amounts and terms short of forgiveness altogether. Neither the ODSPA nor the regulations under it contain any similar language limiting the discretion conferred by the words "may be recovered".
[55] The second reason the Director's discretion is broader is the entirely different nature of the two programs, the sponsorship program and the ODSP. In the sponsorship program, sponsors voluntarily sign undertakings after establishing that they have enough wealth to support their family members. The ODSP, by contrast, is a program of last resort for disabled recipients who have no other way to meet their basic needs. The entire context of the ODSP supports giving the Director a broad and flexible discretion over the recovery of overpayments. [page238]
(iv) Legislative intent
[56] The respondent makes two further arguments in support of her position, both focused on legislative intent.
[57] First, she submits that as the statutory provisions for the recovery of overpayments do not include a provision giving the Director discretion not to recover, the legislature could not have intended the Director to have this authority. The respondent buttresses this argument by her reliance on the implied exclusion rule of statutory interpretation: if the legislature had meant to give the Director the power to forgive overpayments, it would have said so expressly, so it can be inferred that the legislature's failure to do so was deliberate. Thus, though the exclusion is not express, it is implied: see Sullivan, at p. 244.
[58] I do not accept this argument. The discretion to forgo recovery of overpayments does not require express language in the light of the scheme and objects of the ODSP. The authority to forgo recovery is conferred by the words "may" and "may be recovered".
[59] The implied exclusion rule does not assist the respondent. "[L]egislative exclusion can be implied when an express reference is expected but absent": see University Health Network v. Ontario (Minister of Finance), 2001 8618 (ON CA), [2001] O.J. No. 4485, 151 O.A.C. 286 (C.A.), at para. 31. Context matters. The ODSP does not contain a listing of items or a pattern of drafting in which an express reference to the discretion to forgive overpayments would have been expected if it was intended. Accordingly, no implication can be drawn from the absence of express authority not to recover overpayments.
[60] The respondent's second argument flows from s. 14(2.1) of the ODSPA, which provides that an overpayment is a Crown debt. The respondent submits, and the Divisional Court held, at para. 22 of its reasons, that the Director has no power to "write-off" a Crown debt. That power resides with the Minister of Finance under s. 5(1) of the Financial Administration Act, R.S.O. 1990, c. F.12:
Settlement of or determination of uncollectability of debts, etc.
5(1) Where a person has an obligation or debt due to the Crown or the Crown has a claim against a person, the Minister of Finance may, subject to any other Act affecting such obligation, debt or claim,
(a) negotiate and accept a settlement in payment and satisfaction of such obligation, debt or claim;
(b) determine that any such obligation, debt or claim is uncollectable; or [page239]
(c) determine that financial hardship, economic considerations or other circumstances do not warrant the collection or enforcement of any such obligation, debt or claim.
I do not accept this argument either.
[61] The term "write-off" is not helpful. The issue is not whether the Director has discretion to write-off a Crown debt (she does not) but whether she has discretion not to collect part or all of one. The two are not the same. A write-off is an accounting term. It recognizes a reduced or zero value of an asset on the enterprise's, in this case the government's, books. A debt that is written off can still be collected. A determination not to collect or recover a debt is just that, though in many cases uncollectable debts are recommended for write-off.
[62] Although the Minister of Finance has the authority to decide not to collect or to compromise a Crown debt, his authority is not exclusive. Section 5(1) of the Financial Administration Act contains the qualifying phrase "subject to any other Act affecting such obligation". The ODSPA is an "other Act" affecting the collection of Crown debt.
[63] Moreover, in Mavi, the Supreme Court rejected the very argument the respondent makes in the present appeal. After referring to the federal Financial Administration Act, Binnie J. wrote, at para. 60:
The FAA is a statute of very general application. It does not preclude Parliament from enacting more specialized legislative schemes for the management and enforcement of debts owed to the Crown under particular statutory programs. The IRPA is an example of such a specialized collection regime.
[64] Similarly, the ODSPA establishes a specialized collection regime under a special statutory program, the ODSP. The provincial Financial Administration Act does not override the debt collection provisions of the ODSPA or preclude their application. The Director has discretion not to recover overpayments and the Financial Administration Act does not take this discretion away.
[65] For all of these reasons, I conclude that the Director has discretion over both how to recover overpayments and whether to recover them in part or not at all. In reaching this conclusion, I have considered, but have not found it necessary, to take account of the submissions of the intervenors.
II. Does the Social Benefits Tribunal have authority to restrict the Director's recovery of an overpayment and order that part or all of an overpayment not be recovered?
[66] The tribunal found that the Director correctly assessed Surdivall with an overpayment. But it disagreed on whether [page240] there should be any relief from repayment. The Director ordered Surdivall to pay back the entire overpayment; the tribunal overturned the Director's decision and ordered Surdivall to pay back only half of the overpayment, and over an extended period of time.
[67] Surdivall submits that if, as I have concluded, the Director has discretion to forgive a Crown debt or forgo recovery of an overpayment, then so too does the Tribunal. The respondent submits that even if the Director has this discretion, the tribunal does not. Both parties agree, and I accept, that the standard of review of the tribunal's authority is correctness. The respondent also makes a subsidiary submission: the tribunal's order was premature because the Director had not taken any steps to collect Surdivall's overpayment.
(a) The tribunal's appellate jurisdiction
[68] The debate over the tribunal's powers must be resolved by examining its appellate jurisdiction under the statute. The Social Benefits Tribunal is established under s. 60 of the Ontario Works Act, 1997, S.O. 1997, c. 25, Sch. A to carry out duties assigned to it under that Act or other Acts. One of the other Acts is the ODSPA.
[69] The tribunal's appellate jurisdiction under the ODSPA is broadly framed. Section 21(1) states:
21(1) Any decision of the Director affecting eligibility for or the amount of income support, assistance under section 49 or extended health benefits under section 49.1, other than a decision referred to in subsection (2), may be appealed to the Tribunal.
As the Director's decision affected the amount of Surdivall's income support, his appeal was properly brought under s. 21(1).[^4]
[70] Section 26(1) of the Act also gives the tribunal broad remedial powers:
26(1) In an appeal to the Tribunal, the Tribunal may,
(a) deny the appeal; [page241]
(b) grant the appeal;
(c) grant the appeal in part; or
(d) refer the matter back to the Director for reconsideration in accordance with any direction the Tribunal considers proper.
[71] However, s. 29(3) of the Act limits the tribunal's remedial jurisdiction in one important way:
29(3) The Tribunal shall not make a decision in an appeal under this Act that the Director would not have authority to make.
[72] Because of s. 29(3), if the Director does not have discretion to forgo recovery of an overpayment, then neither does the tribunal. However, the respondent goes farther. She contends that s. 29(3) does not enlarge the tribunal's remedial powers and therefore does not give the tribunal any authority to restrict the Director's collection of an overpayment or to order the Director not to recover part or all of an overpayment.
[73] I do not accept the respondent's contention. Although s. 29(3) does not expressly state that the tribunal has authority to make any decision the Director could have made, it does so implicitly by stating the negative: it cannot make a decision the Director does not have authority to make.
[74] More generally, when a statute provides an appeal from a discretionary decision, the appellate tribunal should be able to exercise that discretion unless the statute specifically precludes it from doing so. Jones and de Villars make this point in their text, Principles of Administrative Law, 5th ed. (Toronto: Carswell, 2009), at p. 611:
Difficult issues arise when considering whether the appellate body has the right to exercise a statutory discretion differently from the way chosen by the original statutory delegate. Occasionally, the legislation in question may specifically prevent the appellate body from doing so, but this would appear to be rare. In principle, the general rule should be the reverse: where an appeal is provided from the exercise of a statutory power which is discretionary in nature, the appellate body itself should be able to exercise the discretion granted by statute on the delegate from whom the appeal lies. This is particularly clear where the only matter capable of being appealed is discretionary in nature[.]
[75] As the ODSPA does not specifically preclude the tribunal from exercising the discretion over overpayments given to the Director, the tribunal may also exercise this discretion. In doing so, it may restrict the Director's collection of an overpayment, as it did in this case.
[76] Two additional points reinforce this conclusion. First, under the general regulations to the Act, O. Reg. 222/98, the tribunal has wide powers in the conduct of its hearings. It may [page242] admit evidence at a hearing and make its own findings of fact. Subsections 67(2) and (3) of the regulations provide:
67(2) The Tribunal's findings of fact shall be based exclusively on evidence admissible and facts of which notice may be taken under sections 15, 15.1, 15.2 and 16 of the Statutory Powers Procedure Act.
(3) The Tribunal's decision shall include the principal findings of fact and its conclusions based on those findings.
These wide powers suggest that the legislature intended the tribunal to have authority to do what the Director can do and to come to its own decision on the merits of a case.
[77] Second, the respondent's position would undermine disabled recipients' access to justice. Instead of being able to go to the tribunal for the prompt, inexpensive and efficient resolution of their disputes with the Director, they would be obliged to mount an expensive court challenge if they wanted to contest a Director's decision. This can hardly be a result the legislature intended.
[78] In Steel v. Canada (Attorney General), [2011] F.C.J. No. 657, 2011 FCA 153, [2013] 1 F.C.R. 143, Stratas J.A. of the Federal Court of Appeal came to a similar conclusion in connection with unemployment insurance overpayments. The Employment Insurance Act, S.C. 1996, c. 23 expressly permits the Employment Insurance Commission to "write-off" overpayments. For years, however, there was a question whether boards of referees had that power as part of their appellate jurisdiction. Stratas J.A. held that they did. At para. 76 of his reasons, he observed:
A contrary interpretation would mean that the writing-off of liabilities to repay the overpayment of benefits, a matter related to the entitlement to employment insurance benefits, would be diverted from this informal, specialized, efficient regime into the slower, more formal, more resource-intensive court system. That interpretation makes no sense. Only the clearest of statutory wording, not present here, could drive us to such a result.
I would adopt and apply these observations to the scope of the tribunal's appellate jurisdiction.
[79] I conclude that the Social Benefits Tribunal has authority to restrict the Director's recovery of an overpayment and order that part or all of an overpayment not be recovered.
(b) The prematurity issue
[80] The respondent's alternative argument is that the Director had not taken steps to collect Surdivall's overpayment and thus the tribunal's order was premature. This argument fails on the facts. Before Surdivall turned 65 years of age, the Director had already begun to recover the overpayment: $35.85 was [page243] deducted from Surdivall's monthly income support benefit. Moreover, once Surdivall turned 65, the Director demanded recovery of the balance of the overpayment. Thus, I would not give effect to the respondent's prematurity argument.
D. Conclusion
[81] This appeal raises two questions. First, does the Director have authority to forgo recovery of part or all of an overpayment of income support to a disabled recipient? Second, does the Social Benefits Tribunal have authority to restrict the Director's recovery of an overpayment and order that part or all of an overpayment not be recovered?
[82] I would answer yes to both questions. Accordingly, I would allow the appeal and reinstate the tribunal's order. As Surdivall does not ask for costs, I would make no order for the costs of the appeal.
Appeal allowed.
Notes
[^1]: Instead, he became eligible for Canada Pension Plan and Old Age Security and Guaranteed Income Supplement benefits. His total income still remained below the poverty line.
[^2]: One deduction was made while Surdivall was receiving income support from the ODSP.
[^3]: The Director also has duties prescribed in the regulations.
[^4]: At para. 20 of its reasons, the Divisional Court seems to suggest that Surdivall's appeal was brought under s. 16(3) of the Act. However, s. 16(3) is an enforcement provision. It provides:
16(3) If the decision is appealed and an overpayment is determined, the decision of the Tribunal shall be final and enforceable against the recipient as if it were an order of the Superior Court of Justice.
Thus, Surdivall's appeal was under s. 21(1), not s. 16(3) of the Act.
End of Document