Table of Contents

INTRODUCTION ..................................................................................................2

BACKGROUND ....................................................................................................4

A. BARGAINING WITHIN THE FEDERAL PUBLIC SERVICE. 4

B. TIMELINE OF EVENTS. 6

THE ISSUES. 9

ANALYSIS …………………………………………………………………………..…10

A. ISSUE ONE: WERE THERE LIMITS PLACED ON S. 2(D) CHARTER RIGHTS? 10

(1) Legal Framework. 10

(2) Appellants’ Submissions: Alleged Interferences with Collective Bargaining ……………………………………………………………………...….21

(3) Analysis. 22

(a) The Lack of Good Faith Bargaining in the Pre-ERA Period........................22 (b) The Government’s Failure to Consult about the Scope of the ERA...........33

(c) The Impact of ERA Wage Increase Caps on Collective Bargaining...........36

(d) Rollbacks...................................................................................................43

(e) The Legislated Inability to Catch Up...........................................................53

(4) Conclusion on s. 2(d) 56

B. ISSUE TWO: DID THE GOVERNMENT DEMONSTRABLY JUSTIFY, UNDER S. 1 OF THE CHARTER, ANY LIMITS ON THE ASSOCIATIONAL RIGHTS OF FEDERAL PUBLIC SERVANTS UNDER S. 2(D)?. 57

(1) The Appellants’ Section 1 Charter Challenges. 58

(2) The First Oakes Stage: Were the ERA’s Objectives Pressing and Substantial?. 63

(3) The Second Oakes Stage: Were the ERA’s Measures Proportional?. 81

(4) Conclusion on Section 1 of the Charter 105

C. ISSUE THREE: DID THE APPLICATION JUDGE ERR IN ACCEPTING MR. ROCHON’S EVIDENCE?. 106

D. DISPOSITION. 113

COURT OF APPEAL FOR ONTARIO

CITATION: Gordon v. Canada (Attorney General), 2016 ONCA 625

DATE: 2016-08-16

DOCKET: C58501 & C58502

Hoy A.C.J.O., Blair and Lauwers JJ.A.

BETWEEN

John Gordon, Patricia Ducharme,

Nick Stein, Chris Aylward, Darrell-Lee McKenzie and

Public Service Alliance of Canada

Applicants

(Appellants)

and

Attorney General of Canada

Respondent

(Respondent in Appeal)

AND BETWEEN

The Professional Institute of the Public Service of Canada/

L’Institut Professionel de la Fonction Publique du Canada,

Raymond Lazzara, Deborah Anne Chamney,

and Humayoun Akhtar

Applicants

(Appellants)

and

Her Majesty the Queen in Right of Canada

as Represented by the Attorney General of Canada

Respondent

(Respondent in Appeal)

Andrew Raven and Andrew Astritis, for the appellants, the Public Service Alliance of Canada et al.

Fay Faraday, for the appellants, the Professional Institute of the Public Service of Canada et al.

Kathryn Hucal and Jon Bricker for the respondent, Attorney General of Canada

Heard: November 17 and 18, 2015

On appeal from the judgments of Justice Thomas. R. Lederer of the Superior Court of Justice dated February 12, 2014, with reasons reported at 2014 ONSC 965, 303 C.R.R. (2d) 41.

Lauwers J.A.:

INTRODUCTION

[1] The constitutional position of public sector labour relations has arguably shifted in the wake of the Supreme Court of Canada’s decisions in its 2015 labour trilogy: Mounted Police Association of Ontario v. Canada (Attorney General), 2015 SCC 1, [2015] 1 S.C.R. 3 (“MPAO”); Meredith v. Canada (Attorney General), 2015 SCC 2, [2015] 1 S.C.R. 125 (“Meredith”); and Saskatchewan Federation of Labour v. Saskatchewan, 2015 SCC 4, [2015] 1 S.C.R. 245 (“SFL”). This case is about the consequences of that shift for the constitutionality of public sector wage restraint legislation.

[2] Together, the Public Service Alliance of Canada (“PSAC”) and the Professional Institute of the Public Service of Canada (“PIPSC”) represent about 88% of unionized employees in the federal public service.

[3] The appellant unions seek declarations that provisions in the Expenditure Restraint Act, S.C. 2009, c. 2, s. 393 (“ERA”), enacted in response to the 2008 economic crisis, limited their members’ freedom of association under s. 2(d) of the Canadian Charter of Rights and Freedoms. They also challenge the Government’s conduct in collective bargaining, before and after the ERA’s enactment. They submit the Government’s conduct and provisions in the ERA substantially interfered with their right to a meaningful collective bargaining process by interfering with bargaining on wages, overriding freely negotiated wage increases, capping wage increases during the restraint period, and preventing bargaining for catch-up after the restraint period. They assert these alleged limits have not been demonstrably justified under s. 1, and seek relief under s. 24 of the Charter.

[4] The application judge dismissed the applications, finding that the associational rights of federal public servants under s. 2(d) of the Charter were not impermissibly limited by the Government’s conduct in collective bargaining or provisions in the ERA. He went on to state that he would have found the Government had demonstrably justified any such limits under s. 1 of the Charter in light of the global economic crisis then affecting Canada.

[5] On appeal, the appellants submit the application judge wrongly applied the “effective impossibility” test in assessing whether there was a limit on the appellants’ s. 2(d) Charter rights. Since the Supreme Court repudiated that test in its 2015 labour trilogy, this court is required to reconsider the application of s. 2(d) to this case in light of the clarified test.

[6] The appellants also submit that the application judge erred in his treatment of the s. 1 evidence and in his application of the Oakes framework in determining that any limits on s. 2(d) rights were justified under s. 1 of the Charter.

[7] I would dismiss the appeals. In my view, neither the Government’s conduct nor the provisions of the ERA impermissibly limited the appellants’ s. 2(d) Charter rights. Further, any such limit is saved under s. 1.

BACKGROUND

A. BARGAINING WITHIN THE FEDERAL PUBLIC SERVICE

[8] Canada’s federal public service has a number of different components. The first is known as the core public administration (“CPA”). It includes departments and agencies listed in Schedules I and IV of the Financial Administration Act, R.S.C. 1985, c. F-11 (“FAA”). The Treasury Board of Canada is the employer for departments and agencies within the CPA. The Treasury Board Secretariat, the administrative arm of Treasury Board, negotiates the terms and conditions of employment with the bargaining agents within the CPA.

[9] The second component – the “Separate Agencies” – includes agencies listed in Schedule V of the FAA such as the Canada Revenue Agency (the “CRA”). Generally speaking, the Separate Agencies conduct their own negotiations within the mandate approved by Treasury Board.

[10] The third component includes other entities in the federal public administration designated by the Governor in Council, including certain Crown corporations. Crown corporations conduct their own collective bargaining.

[11] For the CPA and the Separate Agencies, collective bargaining is governed by the Public Service Labour Relations Act, S.C. 2003, c. 22 (“PSLRA”), under the supervision of the Public Service Labour Relations Board (the “Labour Board”). Bargaining for Crown corporations is governed by the Canada Labour Code, R.S.C. 1985, c. L-2 (“CLC”), under the supervision of the Canada Industrial Relations Board. Parliamentary employers – such as the Senate and House of Commons – were also affected by the ERA. For labour relations purposes, they fall under the Parliamentary Employment and Staff Relations Act, R.S.C. 1985, c. 33.

[12] During the relevant time, PIPSC represented six bargaining units within the CPA, 13 within the Separate Agencies, five at Crown corporations, and two bargaining units at the Senate and House of Commons.

[13] PSAC, which is the largest public sector union in Canada, was the bargaining agent for five CPA units, 11 within the Separate Agencies, ten units at Crown corporations and three bargaining units at the Senate and House of Commons.

B. Timeline of Events

[14] Beginning in August 2007, and peaking in late 2008 and early 2009, the world experienced a financial downturn that caused the most serious global recession since the Great Depression of the 1930s. These global conditions hurt the Canadian economy and the Government’s fiscal position.

[15] The Government’s two-pronged response to the crisis was to take steps to stimulate the economy and to mitigate the significant negative impact the recession was having on its ability to balance the budget.

[16] In an effort to carry out the second prong of its strategy, in October 2008, the Department of Finance asked the Treasury Board Secretariat for options for limiting compensation costs in the round of collective bargaining then occurring, since compensation costs were a significant component of government spending. For instance, total compensation costs for fiscal year 2008-2009 amounted to approximately 37% of direct program expenditures.

[17] As requested, the Secretariat produced a paper, setting out three options:

1. Limiting population growth in the civil service by imposing a staffing freeze on new hiring, not replacing departing workers, laying-off employees and offering departure incentives;

2. Limiting wage growth by suspending movement within pay ranges, suspending promotions and suspending upward reclassification of positions; and

3. Limiting salary increases by freezing or limiting wage increases.

[18] The Treasury Board Secretariat recommended the third option, and advised that the appropriate course of action was to attempt, through collective bargaining, to reach agreements consistent with wage increase limits. The Government took that advice.

[19] On October 29, 2008, the Minister of Finance delivered a speech providing assurances that the Government’s response to the recession would include a “commitment to responsible fiscal management” that would “also extend to public sector compensation.”

[20] On October 31, 2008, a senior Treasury Board official, Hélène Laurendeau, met with PSAC’s President, John Gordon, to propose fast-tracking negotiations and to advise him Treasury Board was now operating within a restricted negotiating mandate regarding wage increases. The intent was to conclude collective agreements with PSAC before the release of the Government’s Economic and Fiscal Statement at the end of November.

[21] At a meeting on November 13, 2008, the Secretary of Treasury Board and other officials encouraged heads of the Separate Agencies to meet with the bargaining agents representing their employees to reach agreements within the new fiscal parameters. Four days later, a similar meeting was held with the heads of Crown corporations. At both meetings, Treasury Board advised that a collective agreement would not be approved unless wage increases were within the specified limits.

[22] On November 18, 2008, the President of Treasury Board released a statement that final offers on wage increases were being sent to all bargaining agents in the CPA currently engaged in collective bargaining. The appellant unions state no such offer was made to them and they first learned of it through media reports.

[23] On November 19, 2008, the Speech from the Throne set out the Government’s position on its response to the economic crisis. It advised legislation directed at restraining public sector wage increases was forthcoming.

[24] On November 23, 2008, four of five PSAC CPA units reached collective agreements with Treasury Board, which included wage increases consistent with the final offers. These agreements were ratified on January 23, 2009.

[25] Between November 24 and November 27, 2008, all of the PSAC bargaining agents in the Separate Agencies, except for the CRA, negotiated agreements consistent with the wage increase limits. Nine of 13 PIPSC units in the Separate Agencies also negotiated agreements consistent with the wage increase limits in November 2008.

[26] On November 27, 2008, the Minister of Finance delivered an Economic and Fiscal Statement to Parliament. It projected budget deficits for fiscal years 2009-2010, 2010-2011, and 2011-2012. The Statement also specified the maximum permitted wages increases in the public service for fiscal years 2007-2008 to 2010-2011: 2.3% for 2007-2008 and 1.5% for each of the other three years for groups negotiating new collective agreements.

[27] Parliament was prorogued on December 4, 2008. The Government tabled the Budget on January 27, 2009 after Parliament resumed. The Budget Implementation Act, 2009, S.C. 2009, c. 2, contained the ERA. The ERA was introduced in Parliament on February 6, 2009 and received Royal Assent on March 12, 2009. It imposed wage caps consistent with the Statement but, to the unions’ surprise, also capped wage increases for the fiscal year 2006-2007, except for collective agreements concluded or arbitral awards issued before December 8, 2008.

[28] There are a total of 62 bargaining units represented by the appellant unions, which were each at different stages of collective bargaining in the fall of 2008. Many of the bargaining units represented by the appellants were able to reach collective agreements that are not challenged in these proceedings. It is common ground that the large majority of unionized federal civil servants reached such settlements before the ERA’s enactment. The detailed facts applicable to specific complaints will be addressed below.

The Issues

[29] This appeal raises three issues:

1. Did the application judge err in concluding that neither the ERA nor the Government’s conduct in collective bargaining limited the union members’ associational rights under s. 2(d) of the Charter?

2. Did the application judge err in concluding, in the alternative, that the Government justified any such limits under s. 1 of the Charter?

3. Did the application judge err in accepting the opinion evidence of the Government’s witness, Associate Deputy Minister Paul Rochon, in preference to the evidence of the appellants’ expert, economics professor Dr. Lars Spencer Osberg?

[30] The first and second issues are the key to this appeal. The outcome of the second issue on the application of s. 1 of the Charter depends on the admissibility of the Government’s evidence. For readability and because I conclude that the application judge properly admitted the evidence, I deal with the evidence issue last.

ANALYSIS

A. Issue One: Were there Limits placed on s. 2(d) charter Rights?

(1) Legal Framework

[31] Before addressing the arguments raised by the appellants, I will set out the constitutional and statutory frameworks for the s. (2)(d) Charter challenges to the ERA.

(a) The Constitutional Framework: The Status of Collective Bargaining under s. 2(d) of the Charter

[32] The law on the constitutional status of collective bargaining under s. 2(d) of the Charter was clarified by the Supreme Court of Canada in its latest labour trilogy, released in January 2015. In it, the Supreme Court describes the scope and proper approach to s. 2(d) and addresses confusion arising from earlier case law, especially Ontario (Attorney General) v. Fraser, 2011 SCC 20, [2011] 2 S.C.R. 3. In doing so, the court reaffirms the “substantial interference” test from Health Services and Support – Facilities Subsector Bargaining Assn. v. British Columbia, 2007 SCC 27, [2007] 2 S.C.R. 391 (“BC Health Services”). Two of the cases in the 2015 labour trilogy deal with the constitutionality of the ERA, which is particularly relevant for this appeal.

[33] Because the 2015 labour trilogy is important to the legal analysis in this case, I begin with a brief description of the three cases and then discuss the principles that emerge from them before discussing the substantial interference test.

(i) The 2015 Labour Trilogy

[34] The first case in the 2015 labour trilogy is MPAO. The issue in MPAO was whether the s. 2(d) Charter rights of members of the Royal Canadian Mounted Police (“RCMP”) were limited by their exclusion from bargaining under the PLSRA and the imposition of a non-unionized labour relations regime. The core component of the RCMP labour relations regime was the Staff Relations Representative Program (“SRRP”). The Supreme Court concluded that “the flaws in the SRRP process [did] not permit meaningful collective bargaining” and “fail[ed] to respect RCMP members’ freedom of association in both its purpose and its effects”: para. 105. The court also concluded that the PSLRA exclusion infringed s. 2(d). Neither infringement was saved by s. 1.

[35] The second case is Meredith. It too involved members of the RCMP and dealt with the constitutionality of the ERA. The court upheld salary rollbacks imposed under the ERA. I discuss its reasoning in more detail below.

[36] The third case is SFL. It involved a successful challenge to the Public Service Essential Services Act, S.S. 2008, c. P-42.2 (“PSESA”), which limited the ability of Saskatchewan public sector employees who performed essential services to strike. The Supreme Court broke new ground in SFL in recognizing that s. 2(d) protects the right to strike. The court held that “[t]he right to strike is an essential part of a meaningful collective bargaining process”: para. 3.

[37] I now turn to the general principles that arise from the 2015 labour trilogy.

(ii) General Principles from the 2015 Labour Trilogy

[38] In the 2015 labour trilogy, the Supreme Court called for a purposive, generous and contextual approach to s. 2(d) of the Charter: MPAO, at para. 47. Viewed purposively, s. 2(d) protects the following classes of activities:

(1) the right to join with others and form associations; (2) the right to join with others in the pursuit of other constitutional rights; and (3) the right to join with others to meet on more equal terms the power and strength of other groups or entities. (MPAO, para. 66.)

[39] In the domain of labour relations, s. 2(d) protects “a meaningful process of collective bargaining”, which is one “that provides employees with a degree of choice and independence sufficient to enable them to determine their collective interests and meaningfully pursue them”: MPAO, at para. 81. Meaningful collective bargaining maintains a balance of bargaining power, or “equilibrium”, between unions and employers: MPAO, at paras. 72 and 82; SFL, at paras. 56 - 57.

[40] The Supreme Court clarified in MPAO, at para. 73, that the right to collective bargaining is not derivative of freedom of association:

[T]he Attorney General of Canada, relying on Fraser, argues that collective bargaining is at best a “derivative right” from the basic or “core” right to associate (the constitutive approach). It follows, according to the Attorney General, that collective bargaining is protected only if state action makes it effectively impossible to associate for workplace matters…. We disagree.

[41] The Supreme Court also clarified that its use of the expression “effective impossibility” had been mistakenly taken to be a prescription of the constitutionality test by readers of various decisions. But the expression was meant as no more than a description of the regimes under challenge in those cases.

[42] The court jettisoned, corrected or clarified its own prior jurisprudence considered to be inconsistent with Dickson C.J.’s dissenting reasons in Reference Re Public Service Employee Relations Act (Alta.), 1987 CanLII 88 (SCC), [1987] 1 S.C.R. 313, which were adopted, without apparent reservation, in MPAO, at paras. 51, 54-58, and 80, and in SFL, at paras. 84.

[43] The Supreme Court expressly stated in Meredith, at para. 24, that the test for determining whether there has been a breach of s. 2(d) remains the substantial interference test from BC Health Services – the test to which I now turn.

(iii) The Substantial Interference Test

[44] Under the substantial interference test, the question is “whether the process of voluntary, good faith collective bargaining between employees and the employer has been, or is likely to be, significantly and adversely impacted”: BC Health Services, at para. 92. In each case, “[t]he inquiry … is contextual and fact-specific”: BC Health Services, at para. 92.

[45] The court explained, at para. 93 of BC Health Services, that, generally speaking, determining whether a government measure affecting the protected process of collective bargaining amounts to substantial interference involves two inquiries:

The first inquiry is into the importance of the matter affected to the process of collective bargaining, and more specifically, to the capacity of the union members to come together and pursue collective goals in concert. The second inquiry is into the manner in which the measure impacts on the collective right to good faith negotiation and consultation.

[46] It has been noted that the Supreme Court did not expressly distinguish between the “two inquiries” in the 2015 labour trilogy, and so questions have been raised about their relevance. For instance, in a recent decision from the Court of Appeal for British Columbia, Garson J.A. observed that “it appears that the Court has not always applied the formalistic two-part test set out in [BC] Health Services”: Federal Government Dockyard Trades and Labour Council v. Canada (Attorney General), 2016 BCCA 156, 387 D.L.R. (4th) 712, at para. 82 (“Dockyard Trades #2”). She also observed, at para. 41, that recent Supreme Court cases have tended to merge the two inquiries.

[47] In this case, the parties accept that the two inquiries articulated in BC Health Services are relevant. I agree. As I have already noted, the Supreme Court expressly reasserted the primacy of the BC Health Services test in Meredith.

[48] As I read MPAO and Meredith, the Supreme Court did take the two inquiries into account. In MPAO, the court addressed squarely the absence of a meaningful collective bargaining process, which is the focus of the second BC Health Services inquiry. In Meredith, the real focus of the decision was on the wage rollback issue - an outcome or matter - which is the focus of the first BC Health Services inquiry. In each instance, the Supreme Court simply applied that branch of the BC Health Services test most relevant to the particular case.

[49] While the Government accepts that the two inquiries apply in the context of this case, it argues the test is really all about the collective bargaining process, not about outcomes. I agree s. 2(d) protects the process of collective bargaining, not the fruits of bargaining, but that does not mean that what is being bargained over or the outcomes of bargaining are irrelevant to the s. 2(d) analysis.

[50] The Supreme Court has often stated s. 2(d) protects the process of bargaining and not outcomes. For instance, at para. 91 of BC Health Services, the court stated: “The right to collective bargaining thus conceived is a limited right … to a process, it does not guarantee a certain substantive or economic outcome.” (See also: BC Health Services, at para. 29; MPAO, at para. 67; Meredith, at para. 25.)

[51] In determining whether there has been substantial interference with the collective bargaining process, the affected “matter” is relevant: applying the first inquiry in BC Health Services, the court must consider “the importance of the matter affected to the process of collective bargaining, and more specifically, to the capacity of the union members to come together and pursue collective goals in concert.”

[52] The purpose of collective bargaining, as the Supreme Court observed in BC Health Services, at para. 19, is to permit “members of labour unions to engage, in association, in collective bargaining on fundamental workplace issues,” and again, at para. 87, “to associate for the purpose of advancing workplace goals” (emphasis added). The protections include, the court noted at para. 90, “the ability of a union to exert meaningful influence over working conditions” (emphasis added). These statements recognize that unions aim at outcomes, at results. Collective bargaining is a means to an end, quite apart from having its own virtues.

[53] As I read the case law, while protection is not afforded to the “fruits” of bargaining, but only to the process by which they are to be negotiated, employer actions unilaterally undermining the ability of unions to bargain about significant matters are constitutionally suspect. Certain matters are, by nature of their importance to the unionized employment relationships, “matters central to the freedom of association”: BC Health Services, at para. 25. Adversely affecting these in a material way may be constitutionally suspect, depending on the context. These matters include: salary (Meredith, at paras. 27-28; Alberta Reference, at p. 335); hours of work (Alberta Reference, at p. 335); job security and seniority (BC Health Services, at para. 130); equitable and humane working conditions (Alberta Reference, at p. 368); and health and safety protections (Alberta Reference, at p. 368).

[54] The Supreme Court has also identified a number of employer actions as being constitutionally suspect for the purposes of s. 2(d), again depending on the context, including the following: taking important matters off the table or restricting the matters that may be discussed (BC Health Services, at paras. 111 and 113; MPAO, at para. 72); imposing “arbitrary outcomes” (MPAO, at para. 72); unilaterally nullifying negotiated terms (BC Health Services, at paras. 11 and 113); removing the right to strike (SFL, at para. 54); and imposing limits on future bargaining (BC Health Services, at para. 113).

[55] However, as noted above, Meredith demonstrates that, in certain circumstances, wage rollbacks are permissible under s. 2(d) of the Charter. Meredith also indicates that while bargaining outcomes are by no means determinative, they may be relevant in assessing whether there has been substantial interference with the bargaining process. At para. 29, the court noted: “Actual outcomes are not determinative of a s. 2(d) analysis, but, in this case, the evidence of outcomes supports a conclusion that the enactment of the ERA had a minor impact on the appellants’ associational activity.”

[56] In conclusion, in applying the substantial interference test, which involves a contextual, fact-specific inquiry, the court must consider both the significance of the matter in issue to the collective bargaining process and the degree of interference with the collective bargaining process. While bargaining outcomes are not determinative, they may be indicative of whether there has been substantial interference with the collective bargaining process.

(b) The Statutory Framework

[57] The ERA applied to all employees within the CPA, employees of Crown corporations and those employed by Parliamentary employers such as the Senate and House of Commons. The ERA did not freeze wages, reduce wages or eliminate existing merit or similar types of increases. Rather, for the fixed restraint period, it implemented an upper limit on wage increases, prohibited the restructuring of pay rates, and prohibited any increase in additional remuneration, with certain limited exceptions. It also prevented unions from making up any losses in bargaining after the end of the restraint period.

[58] In their notices of application, the appellants sought declarations that ss. 16 – 34 and 56 – 65 of the ERA limit their s. 2(d) Charter rights.

[59] Section 16 of the ERA is a key provision for purposes of these appeals:

16 Despite any collective agreement, arbitral award or terms and conditions of employment to the contrary, but subject to the other provisions of this Act, the rates of pay for employees are to be increased, or are deemed to have been increased, as the case may be, by the following percentages for any 12-month period that begins during any of the following fiscal years:

(a) the 2006–2007 fiscal year, 2.5%;

(b) the 2007–2008 fiscal year, 2.3%;

(c) the 2008–2009 fiscal year, 1.5%;

(d) the 2009–2010 fiscal year, 1.5%; and

(e) the 2010–2011 fiscal year, 1.5%. [Emphasis added.]

[60] The effect of s. 16 was to partially rollback wage increases that had already been negotiated and awards that exceeded the stipulated maximums. However, for collective agreements concluded and arbitral awards rendered before December 8, 2008, s. 16 did not apply in respect of any period that began during the 2006-2007 or 2007-2008 fiscal year: ERA, s. 19(a).

[61] In addition, the ERA capped wage increases in collective agreements entered into, or arbitral awards made, following the enactment of the ERA:

17 (1) The provisions of any collective agreement that is entered into, or arbitral award that is made, after the day on which this Act comes into force may not provide for increases to rates of pay that are greater than those set out in section 16, but they may provide for increases that are lower.

[62] Sections 23-29 of the ERA prohibited wage restructuring and “additional remuneration” during the restraint period, including “any allowance, bonus, differential or premium or any payment to employees that [was] similar to any of those payments”: ERA, s. 2. However, employees remained entitled to existing incremental increases, merit or performance increases and other similar forms of compensation: ERA, s. 10.

[63] Sections 59-61 of the ERA also prohibited changes to employee performance pay plans for the restraint period.

[64] In addition, ss. 57 - 58 prohibited future bargaining aimed at making-up for the effects of the restraints imposed by the Act.

(2) Appellants’ Submissions: Alleged Interferences with Collective Bargaining

[65] The appellants assert that the Government’s conduct in collective bargaining leading up to and following the ERA’s enactment, and provisions in the Act itself, constitute several discrete instances of imposing limits on the associational rights of various bargaining units they represent, within the meaning of s. 2(d) of the Charter. They make five complaints:

(1) the Government failed to bargain in good faith between November 2008 and the enactment of the ERA;

(2) the Government failed to consult with the bargaining units about the scope of the ERA from November 2008 to its first reading in February 2009;

(3) the Government interfered with bargaining after the ERA came into force by imposing wage increase caps and limited other forms of remuneration;

(4) the Government rolled back agreed wage increases; and

(5) the Government precluded affected bargaining units from making-up for the effects of the restraints imposed by the Act in future bargaining.

[66] The appellants argue the application judge erred in his analysis of these issues since he did not have the benefit of the 2015 labour trilogy. They point out he relied on the mistaken notion of derivative rights and the effective impossibility test: see paras. 40-41, 103, 117-18, 122-28, 250 and 252. They argue that, if the substantial interference test were to be properly applied, the Government’s conduct and the ERA would be found to have limited their s. 2(d) Charter rights.

[67] Accepting that the application judge erred in applying the effective impossibility test, I now turn to an analysis of PSAC’s and PIPSC’s specific complaints in light of the legal framework set out above.

(3) Analysis

(a) The Lack of Good Faith Bargaining in the Pre-ERA Period

[68] The appellants argue the Government’s actions in bargaining from November 2008 until the ERA’s enactment in early 2009 prevented meaningful negotiation about wage increases, contrary to BC Health Services.

[69] This complaint applies to the bargaining units that reached collective agreements before the ERA came into force, including: four of five PSAC CPA units; all PSAC units in the Separate Agencies, excluding the CRA units; and nine of 13 PIPSC units in the Separate Agencies.[1] The appellants also assert this conduct adversely affected all unionized employees represented by PSAC and PIPSC, including those bargaining units not otherwise identified.

[70] The argument, put most starkly by PIPSC in its factum, is that the Government “refused to advance on any issues of longstanding concern”; made the final offer “with a ‘take it or leave it’ approach, with no rationale provided”; and “put a ‘legislative gun’ to the Institute's head”.

[71] PIPSC advanced its position in two forums. The first was before the Labour Board, with which PIPSC filed 17 similar bad faith bargaining complaints under s. 190 of the PSLRA on November 24, 2008. The second forum was the courts through this litigation, where PSAC joined it.

[72] Did the Government’s actions undermine good faith collective bargaining, within the meaning of s. 2(d) of the Charter, when it threatened to legislate wage rate increase caps if the unions did not enter into collective agreements that respected those caps? I conclude the Government did bargain in good faith before the ERA’s enactment.

(i) The Governing Principles

[73] There is nothing in the case law suggesting that good faith bargaining for Charter purposes is different from good faith bargaining as required under ordinary labour relations legislation and labour board jurisprudence in Canada; they are the same, as the Supreme Court suggested in discussing the indicia of good faith bargaining in BC Health Services, at paras. 98-107. For instance, the court stated at para. 98 that “[c]onsideration of the duty to negotiate in good faith which lies at the heart of collective bargaining may shed light on what constitutes improper interference with collective bargaining rights” for the purposes of s. 2(d). Nor is there anything in the 2015 labour trilogy to suggest that the Supreme Court intended to change the law with respect to good faith bargaining as that concept has been developed in ordinary labour law.

[74] Thus, it is relevant to consider the concept of good faith bargaining from a labour law perspective.

[75] As noted above, for the CPA and the Separate Agencies, collective bargaining is governed by the PSLRA while bargaining for Crown corporations is governed by the CLC, which has similar provisions. These statutes incorporate certain Wagner Act features, with Canadian adaptations: see Brian W. Burkett, “The Future of the Wagner Act: A Canadian-American Comparison” (2013) 38:2 Queen’s L.J. 363.

[76] As is typical of Wagner Act bargaining structures, both statutes require good faith bargaining and give the parties access to a remedy for unfair labour practices, including bad faith bargaining: PSLRA, ss. 106 and 190(1)(b); CLC, ss. 50 and 97(1)(a). Similar provisions govern bargaining under provincial statutes: see, for example, Labour Relations Act, 1995, S.O. 1995, c. 1, Sch. A, s. 17. This is the business of the respective labour relations boards, which have special expertise in the supervision of labour disputes: PSLRA, ss. 190-92; CLC, ss. 97-99. The Supreme Court has often instructed reviewing courts to defer to expert tribunals, especially labour tribunals and arbitrators, most recently in Commission scolaire de Laval v. Syndicat de l’enseignement de la région de Laval, 2016 SCC 8, 396 D.L.R. (4th) 1, at paras. 32-33.

[77] In this case, the application judge had the benefit of the Labour Board’s decision on the issue of whether the Government was engaged in bad faith bargaining with the PIPSC Computer Systems (“CS”) bargaining unit in the pre-ERA period: [2009] C.P.S.L.R.B. No. 102, aff’d 2010 FCA 109. (Of the 17 bad faith bargaining complaints filed by PIPSC in November 2008, only the CS complaint resulted in a decision.)

[78] The Labour Board reviewed the bargaining evidence in its extensive reasons, noting, at para. 78, that the complaint “concerns bargaining that occurred in the shadow of impending wage restraint legislation,” and added: “This complaint relates specifically to the final offer tabled by the employer and the subsequent negotiations that occurred in November 2008.”

[79] The argument put forward by PIPSC was that, in the circumstances, the government’s final wage offer constituted bad faith bargaining contrary to s. 106 of the PSLRA, which obliges the parties to meet, to bargain in good faith, and “to make every reasonable effort” to enter into a collective agreement.

[80] The Labour Board found, at para. 90, that “the negotiations between the parties were no longer fruitful in the period [preceding] November 18, 2008” and that “[i]n such a case, tabling a final offer or a ‘take it or leave it’ proposal [was] not bargaining in bad faith”.

[81] The Labour Board determined, at para. 91, that the final offer itself was not evidence of bad faith: “The employer's final offer was not ‘… so far from the accepted norms...’ that it must be considered unreasonable”. The Board reached this conclusion for a number of reasons listed at paras. 91-93: the final offer on wage increases was higher than the Government’s original offer; the Government did not demand rollbacks or concessions from the CS bargaining unit or insist on conditions precedent before proceeding; the Government made the same wage offer to all bargaining units; the Government's position was not “inflexible and intransigent to the point of endangering the very existence of collective bargaining” (para. 85) as it participated in negotiations in late November and discussed all the issues on the table, including compromises proposed by PIPSC; the Government clearly justified its rationale for its position in bargaining “to ensure ‘predictability’ in expenditures” (para. 93) and it would be inappropriate for the Board to consider the merits of that rationale.

[82] The Board also found, at para. 95, that “[w]hile the timing of the press release so soon after the tabling of the final offer was not ideal and perhaps not very helpful for collective bargaining, there [was] no evidence that it was intended to directly influence collective bargaining.” Concerning PIPSC’s complaints about the compressed timeline, the Board found, at para. 96, that “the timelines were tight, but not unreasonable. In any event, it was PIPSC that decided not to continue the negotiations.”

[83] Although the Board’s findings are not binding on the court, they undermine PIPSC’s argument that the Government was not bargaining in good faith in the pre-ERA period with the CS bargaining unit.

[84] None of the PSAC units or any other PIPSC units were parties to that proceeding before the Board, but the application judge’s review of the broader evidence, to which I now turn, leads to the same conclusion for similar reasons, which reflect a similar bargaining pattern.

(ii) The Application Judge’s Decision

[85] The application judge took a contextual approach in his assessment of the collective bargaining that took place starting in November 2008. He laid out the details of the economic crisis and referred to it often in his decision, stating, at para. 138:

In considering the context, factors to be taken into account include: (a) the unprecedented nature of the financial crisis, (b) the rapid decline of the economy and (c) the potential for serious impacts on all Canadians. The government saw it as a crisis in the economy.

(See also paras. 17-18, 71, 90, 93, 128-29, 132, 138, 148, 169, 193, 196, 198, 210, 227, 236-37, 239, 240, 242, 246 and 250.)

[86] The application judge took the view, at para. 161, that the pre-ERA round of collective bargaining was simply hard bargaining:

It had been “a difficult round of bargaining” in a “very challenging collective bargaining environment”. There is nothing in this which suggests an absence of “meaningful dialogue”.

[87] He added, at para 166: “It may be that the government representatives were unable to, and refused to, discuss wage increases beyond those in the final offer but that does not render the dialogue or the process meaningless.”

[88] The application judge pointed out, at para. 147, that some progress was made on wages. As late as November 16, 2008, PSAC expressed concern when the offer for 2007-2008 was reduced to 1.5%. The next day the Government raised it to 2.3%. He also noted that one PSAC CPA unit and four of five PIPSC CPA units had received pay proposals before November 2008 that included wage increases less than those in the final offer. In other words, the final offer represented a gain for those units in terms of the Government’s earlier offer on wage increases. Progress was also made on benefits and other non-monetary issues, which the application judge noted, at para. 165, was “demonstrative of a meaningful process”: see also paras. 150 and 166.

[89] The application judge concluded, at para. 148:

It may be that the ability to deal with wages was constrained by the context of the times but they were not finally determined until the final offers were received on November 18, 2008. These final offers and the bargaining sessions that took place indicate a meaningful process in the face of a significant economic downturn. Ultimately, when confronted with a crisis, ongoing processes have to be brought to a conclusion.

[90] He also observed, at para. 149, that, following agreements for four of five PSAC CPA units, PSAC “publicized the results through press releases which made clear that the bargaining was difficult, that as a result of the economic circumstances expectations were adjusted and that the negotiations were successful.” Ultimately, the application judge found that “[s]ignificant improvements were negotiated in a number of areas of long-standing concern to the membership”: para. 149.

[91] Accordingly, the application judge rejected the argument that the fifth PSAC CPA unit, which was seeking a 13.5% increase for the year following the restraint period, was not provided with a meaningful process. The application judge commented, at para. 162: “it cannot reasonably have been expected that, in the circumstances, a demand for a 13.5% increase would generate a positive response.” This dispute was eventually arbitrated.

[92] The application judge observed, at para. 164, that all PSAC Separate Agency units entered into agreements between November 24 and 27, 2008. He noted the lack of explanation regarding the full history of negotiations, but concluded: “The agreements imply that the process was meaningful.”

(iii) The Principles Applied

[93] The appellants have focused on wages and the Government’s refusal to move from the wage increase caps tabled in the negotiations in the pre-ERA period. They claim that this limits the s. 2(d) Charter rights of their members.

[94] I reject this submission.

[95] The application judge’s reasons demonstrate both the complexity of the situation and the care taken by the application judge in assessing the appellants’ arguments and the evidence. His assessment of the evidence attracts this court’s deference.

[96] I accept the application judge’s characterization of the Government’s approach in the fall of 2008, at para. 161, as “hard bargaining”. This is a permitted mode of good faith bargaining: see Royal Oak Mines Inc. v. Canada (Labour Relations Board), 1996 CanLII 220 (SCC), [1996] 1 S.C.R. 369. As the Supreme Court observed in BC Health Services, at para. 103: “Nor does the duty to bargain in good faith preclude hard bargaining.” The Government was engaged in good faith bargaining in the period before the ERA’s enactment, not bad faith bargaining.

[97] Labour relations legislation and s. 2(d) of the Charter both aim to establish and preserve the balance of power between the employer and unions: MPAO, at paras. 58-59, 71, 80; BC Health Services, at para. 84; Alberta Reference, at pp. 365-69.

[98] There was not, in my view, a significant disparity of bargaining power between the Government and the unions in bargaining during the pre-ERA period. Wagner Act employer tools ̶̶̶̶ such as changing terms and conditions of employment after a freeze period, and locking employees out ̶̶̶̶ were available, if considerably less useful to a government as employer, even with essential services legislation. The unions had strike options from work-to-rule to full blown strikes, and there was at least one strike.

[99] Both sides were constrained by the labour legislation that governed their bargaining. It gave them each a tool chest they knew how to use strategically, from long experience. Both sides were well resourced and well advised, and knew each other intimately. Both sides were constrained by the economic crisis and the effect it would have on public opinion. How would a strike for higher wages be received publicly in a falling economy with increasing unemployment, especially given the job security public servants enjoy over their counterparts in the private sector? On the political front, the Government was working within a minority Parliament, which imported a degree of uncertainty with respect to legislative actions. On the legal front, the scope of s. 2(d) of the Charter was in contention; the unions knew from experience how to deploy constitutional challenges.

[100] During the pre-ERA phase of the bargaining, the evidence shows that everything, including wages and the possible wage restraints, was under discussion. Limits on compensation were not actually imposed until the ERA was passed in 2009. This was hard bargaining, to be sure, but it did not cease to be bargaining in good faith.

[101] In short, the bargaining record, as carefully and extensively laid out by the application judge, shows sophisticated and experienced bargaining parties making the best of a bad situation and coming to reasonable settlements in the pre-ERA period. The bargaining units freely negotiated with eyes wide open to the global economic crisis and to their right of access to all the available options in collective bargaining. The fact that most bargaining units settled, but some did not, and that some pursued bad faith bargaining claims, while others did not, speaks to the independence of the bargaining units within the unions. They were free to, and did, come to their own risk assessments, carve their own paths and choose their own most advantageous strategies.

[102] In conclusion, the appellants have not identified any palpable and overriding errors in the application judge’s factual determinations about the conduct of bargaining in the pre-ERA period. I reject their submission that the Government’s conduct in the pre-ERA period, especially the Government’s refusal to move from the wage increase caps, amounted to substantial interference with the collective bargaining process. I would dismiss the appellants’ argument that the Government failed to bargain in good faith bargaining between November 2008 and the enactment of the ERA.

[103] I now turn to the second alleged limit on s. 2(d) Charter rights.

(b) The Government’s Failure to Consult about the Scope of the ERA

[104] The appellant unions complain that the Government failed to consult with them about the prospective scope of the ERA. In particular, they take issue with the fact the Government failed to advise the unions prior to the ERA’s first reading that the legislation would roll back previously negotiated wage increases and wage increases in existing arbitral awards to conform to the wage caps, and that the restraint period would include fiscal year 2006-2007. The appellants assert they were not consulted about these provisions and thus had no opportunity to discuss or negotiate them before the legislation was tabled, contrary to s. 2(d).

[105] The application judge did not address the consultation issue separately, or differentiate between negotiations and consultation. He stated, at para. 157:

The second [BC Health Services] question requires the determination of whether the legislative measure or government action respects the duty to consult and negotiate in good faith. Where the right to bargain collectively applies … it is “not limited to a mere right to make representations to one's employer, but requires the employer to engage in a process of consideration and discussion to have them considered by the employer.”

(i) The Governing Principles

[106] In effect, the appellants argue that some independent meaning must be given to “consultation” in the Supreme Court’s statement of the constitutional test, at para. 93 of BC Health Services: “The second inquiry is into the manner in which the measure impacts on the collective right to good faith negotiation and consultation” (emphasis added). This expression occurs several times and in several forms in the decision. However, at no time does the Supreme Court draw an analytical distinction between “negotiation” and “consultation”.

[107] “Negotiation” connotes a more robust relationship than “consultation”. It signifies a measure of bargaining power and a process of back-and-forth, give-and-take discussion. This is illustrated by the distinction between the two concepts drawn in MPAO. While there was a consultative process regarding RCMP salaries, there was no structure for meaningful collective negotiations between the police officers and the RCMP. This was unconstitutional.

[108] An employee’s right to participate in a collective bargaining process is the high-water mark of consultation. Indeed, the collective bargaining process is ordinarily the forum in which proposals from each side are advanced, discussed and negotiated. This is the strong form of consultation.

[109] However, civil servants are not constitutionally entitled to be better off in collective bargaining than union members in the private sector. The issue about the required degree and form of consultation occurs at the sensitive interface between the responsibilities of the Government as employer, on one hand, and as legislator, on the other. As a matter of democratic principle it is necessary to maintain the distinction in roles, and for courts to tread carefully.

(ii) The Principles Applied

[110] In my view, the appellants’ complaint about a lack of consultation has no merit.

[111] The rights and freedoms protected by the Charter, including the freedom of association, do not have the effect of altering democratic processes that are themselves constitutional in nature. There was no additional duty on the Government to consult with the appellants in particular about the legislation. In BC Health Services, in the course of the s. 1 analysis, the majority observed, at para. 157: “Legislators are not bound to consult with affected parties before passing legislation.” In Meredith, the point was made by Rothstein J., who concurred in the result, at para. 45:

This Court has never recognized a duty on legislatures to consult with any affected individual or group before enacting legislation, even where a measure impacts constitutional rights.…. Under the doctrine of parliamentary privilege, legislatures’ internal procedures are their own and are not for the judiciary to dictate…. [Citations omitted.]

[112] The appellants had the same right to participate in the democratic process leading to the introduction and passage of legislation as any Canadian. Government employees are not entitled to privileged stature in the legislative process by virtue of their employment relationship or their status as union members.

[113] In short, the Charter does not interfere in the policy-formulation process, and, in particular, does not require consultation before legislating: BC Health Services, at para. 157.

[114] I now turn to complaints about the ERA’s provisions.

(c) The Impact of ERA Wage Increase Caps on Collective Bargaining

(i) Collective Agreements Negotiated after the ERA Came into Force

[115] The core of the appellant unions’ complaints is that the ERA conclusively took wage increases beyond the caps off the table. They point to several situations where the collective bargaining process continued after the ERA came into force, and argue the ERA’s provisions substantially interfered with their members’ collective bargaining rights.

[116] For example, some bargaining units received offers in November 2008 but did not reach collective agreements until after the ERA came into force. Other units had agreements that were not open in the fall of 2008 but came open during the restraint period. Most units eventually reached collective agreements through negotiations or with the assistance of mediators. Some reached impasse, and collective agreements were imposed through arbitration. All the agreements or awards were consistent with the ERA’s wage increase limits.

[117] I disagree that the ERA breached the appellants’ s. 2(d) right to meaningful collective bargaining by imposing wage increase caps.

(ii) The Governing Principles

[118] As I have explained, the law after the 2015 labour trilogy continues to be that s. 2(d) of the Charter does not guarantee unions will achieve a particular outcome through collective bargaining. Not every case of legislative interference with a matter identified as significant to collective bargaining will automatically be found to infringe s. 2(d). Meredith shows that, in certain circumstances, even wage rollbacks may be permissible under s. 2(d) of the Charter.

(iii) The Application Judge’s Decision

[119] In concluding that there was no breach of s. 2(d), the application judge found that wages were not so important that limiting them amounted to substantial interference with collective bargaining.

[120] The application judge addressed the issue of wages most directly at paras. 141-155. At para. 143, he cited para. 29 of the CS bargaining unit Labour Board decision where a PIPSC witness is recorded as telling the Board that “[m]oney was not a key issue in the negotiations, although it was important.” The application judge concluded, at para. 153:

In the context of this case wages were not central to the process. They were not so important that fixing the increases substantially interfered with the freedom of association.

[121] He built this conclusion on the following observation, at para. 153:

The problem for the unions is that they believe they could have gotten more if the process had been allowed to run its course; in particular, they could have received higher wages. This suggests that it is not the process that is at the root of their concern, it is the result. What Fraser makes clear is that whatever it is that receives protection under s. 2 (d), it is not the guarantee of a result.

(iv) The Principles Applied

[122] Bargaining over wages is ordinarily a significant matter in free collective bargaining. Here, the evidence amply substantiates the appellants’ argument that salary increases were a significant issue for most of the bargaining units, as the application judge’s reasons actually show. Accordingly, I would not accept the application judge’s finding that “wages were not central to the process”. They were. But this does not resolve the issue.

[123] Here, the evidence indicates that the legislated caps on wage increases were consistent with what the bargaining units would have achieved even without the caps.

[124] It is common ground that by the date of the ERA’s enactment in March 2009 the large majority of unionized of federal employees covered by it had already reached collective agreements consistent with it. A minority did not reach settlement.

[125] Stephen Jelly’s affidavit on behalf of PSAC states that in negotiations on behalf of bargaining units within the CPA in November 2008, Treasury Board offered 2.3% for 2007-2008 with 1.5% in the succeeding years. The economic terms were largely agreed before the Government negotiator mentioned the plan to introduce wage restraint legislation. The agreements were finalized with four of five PSAC units within the CPA a few days later. PSAC’s factum states: “Each of these units, however, made substantial gains in exchange for agreeing to the Treasury Board’s proposed rates of pay”.

[126] These four PSAC units comprised the vast majority of unionized federal civil servants in the CPA. The wage results represent the fruit of free collective bargaining by the largest bargaining units. The fact that the Government concentrated on reaching agreement with them shows their importance in establishing a bargaining pattern. This pattern bargaining method was borne out by the subsequent agreements reached by all PSAC units in the Separate Agencies. In its factum, PSAC makes an important concession:

Mr. Rochon [a witness for the government] himself highlighted the significance of these "changed circumstances", concluding that the rates of pay in the ERA were reasonable in this context and that employees would have thought so as well. PSAC acknowledged this very point in November 2008.

[127] The ERA’s imposition of the wage increase caps therefore was consistent with the results of free collective bargaining that were the most favourable to the unions, having been negotiated by the largest union.

[128] From a process perspective, it is difficult to imagine that continuation of an unfettered bargaining process for the remaining minority of units would have produced significantly different outcomes, given that the settlement with the majority of the public service drove the determination of the wage increase caps.

[129] For those on whom a wage increase of 2.5% was imposed for the fiscal year 2006-2007, their loss would be the difference between what they received, and what they would have received had the collective bargaining process moved to its natural conclusion. No information has been provided about what that likely number would have been. However, they received the pattern amount received by the other federal public servants with collective agreements covering that year. It is unlikely that an unfettered bargaining process would have produced significantly different outcomes for this relatively small group.

[130] To recite the words of Meredith, “the level at which the ERA capped wage increases … was consistent with the going rate reached in agreements concluded with other bargaining agents inside and outside of the core public administration and so reflected an outcome consistent with actual bargaining processes”: para. 28. While outcomes are not determinative, as in Meredith, “evidence of outcomes supports a conclusion that the enactment of the ERA had a minor impact on the appellants’ associational activity”: para. 29.

[131] Ultimately, viewing the matter in context, union members were not discouraged from the collective pursuit of common goals as a result of the upper limits placed on wage increases for the restraint period.

[132] I conclude that the wage increase caps in the ERA did not amount to substantial interference with the collective bargaining process contrary to s. 2(d) of the Charter.

Arbitrations under the ERA

[133] One PSAC CPA unit, Technical Services (“TC”), and two PIPSC CPA units, Architecture, Engineering and Land Survey (“NR”), and Research (“RE”), were covered by arbitral awards issued after the ERA came into force.

[134] The RE unit is a unique case in that the arbitration hearing was held from January 31 to February 2, 2009 – mere days before the introduction of the ERA in Parliament. The parties’ submissions to the arbitrator proceeded on the assumption that the restraint period under the ERA would run through fiscal years 2007-2011 based on Government statements to that point. On that assumption, submissions were made in relation to fiscal year 2006-2007 for wage increases. The ERA extended the restraint period retrospectively to include the 2006-2007 period. The arbitral award, released on March 23, 2009, was made in accordance with the wage caps in the restraint period, including 2006-2007.

[135] The appellants seek to build on SFL’s determination that the right to strike is constitutionally protected. As noted, following the 2015 labour trilogy, the right to strike is protected by s. 2(d) of the Charter because it functions to maintain the balance of bargaining power between employers and employees: SFL, at para. 77.

[136] The appellants submit that only interest arbitration with an unlimited scope can be an adequate substitute for the right to strike and that it too is constitutionally protected under s. 2(d) of the Charter. They rely on a passage to that effect from Dickson C.J. in dissent in the Alberta Reference, at p. 380, made in the context of his s. 1 analysis, which was approved in SFL, at para. 94.

[137] I would not give effect to the argument that the limits imposed by the ERA on the arbitration process limited the s. 2(d) Charter rights of the appellants.

[138] The Supreme Court has suggested that alternative dispute resolution mechanisms are not generally associational in nature and thus may not be subject to the same constitutional protection as the right to strike: SFL, at para. 60. Assuming, however, alternative dispute resolution mechanisms are associational in nature, it does not necessarily follow that any limits on interest arbitration would amount to a breach of s. 2(d), just as any limits on collective bargaining do not necessarily amount to a breach of s. 2(d).

[139] The ordinary purpose of interest arbitration is to replicate the results of free collective bargaining. Since the ERA’s wage increase caps were built on the foundation set by free collective bargaining, as the Supreme Court observed in Meredith, the legislated wage increase caps on the awards of interest arbitrators simply implemented replication. It follows that the requirement that arbitral awards conform to any restraints on items to be included in a collective agreement, including wage increase caps, does not establish a limit on a s. 2(d) Charter right that the Government must justify under s. 1.

(d) Rollbacks

[140] Section 16 of the ERA overrode freely negotiated wage increases in existing collective agreements (and arbitral awards), to the extent that they exceeded the limits imposed by the ERA, by imposing rollbacks. This affected seven PSAC and two PIPSC bargaining units, which had already concluded collective agreements before the enactment of the ERA.

[141] The appellant unions submit that the ERA’s rollbacks are a substantial interference with their s. 2(d) Charter collective bargaining rights.

[142] Counsel for the Attorney General submits, to the contrary, that “[w]hile Meredith may not be determinative of the constitutionality of the ERA in all cases the reasoning is persuasive and in fact is determinative of the ‘reduction’ [i.e., rollback] issue in this case.”

(i) The Impact of the Rollbacks

[143] Two PSAC bargaining units were composed of CRA employees. Collective agreements between these units and the CRA were reached on October 24, 2007 and included wage increases of 2.5% on November 1, 2007 and November 1st of the following two years. The ERA rolled back the 2009-2010 wage increase to 1.5%, reducing the total value of the collective agreement by about $14 million, according to PSAC.[2] Employees were not required to reimburse monies already paid by the employer, even though the ERA permitted payments above those permitted by the ERA to be clawed back: ERA, s. 64.

[144] Five affected PSAC units were composed of employees of Crown Corporations:

• A bargaining unit at the Canada Council for the Arts had concluded a collective agreement on October 16, 2006 that included wage increases of 2.5% for fiscal years 2009-2010 and 2010-2011. These increases were both reduced to 1.5% by the ERA, decreasing the value of the agreement by a total of $175,659.

• The PSAC unit at the Canadian Museum of Nature concluded a collective agreement on November 10, 2006 that included a wage increase of 2% for fiscal year 2009-2010. This increase was reduced to 1.5%, decreasing the total value of the agreement by $46,961.

• Two PSAC bargaining units at the National Arts Centre were affected. The Property Management, Parking Services and Security Officers Group signed a collective agreement on August 7, 2008, including wage increases of 2.5% for fiscal years 2009-2010 and 2010-2011. The Ushers and Tour Guides Group signed an agreement on the same date including an increase of 2.5% for fiscal year 2009-2010. Each of these increases was reduced to 1.5% by the ERA, cutting the value of those agreements by $94,299 and $7,122 respectively. The National Arts Centre recovered the increases on four months of wages already paid to employees in the Property Management Group, deducting those amounts from the employees’ paychecks over the next six months.

• Employees at the National Gallery of Canada had in place a four-year collective agreement which provided for a 2.5% wage increase for fiscal year 2009-2010. This was reduced to 1.5%, diminishing the value of the agreement by $131,532.

[145] The two affected PIPSC bargaining units were composed of employees of Crown Corporations:

• The Canadian Commercial Corporation reached a collective agreement with its employees in November 2007, which included wage increases of 2.9% for fiscal years 2009-2010 and 2010-2011. Both increases were reduced by the ERA to 1.5%.

• A four-year collective agreement between the Canadian Museum of Nature and PIPSC included a 2.5% increase for fiscal year 2009-2010, which was reduced to 1.5% by the ERA.

[146] The financial effects of these rollbacks do not appear to be in the record.

(ii) The Application Judge’s Decision

[147] The application judge dealt with the impact of the rollbacks at paras. 170-184 of his reasons. He found that the rollbacks did not amount to substantial interference with the collective bargaining process.

(iii) The Governing Principles

[148] I noted earlier that the Supreme Court has identified rollbacks as potential interferences with collective bargaining that could limit associational rights under s. 2(d) since they nullify the outcomes of free collective bargaining: BC Health Services, at paras. 92 and 96.

[149] In this case, the application judge relied on the first decision of the Court of Appeal for British Columbia in Federal Government Dockyard Trades and Labour Council v. Canada (Attorney General), 2013 BCCA 371, 376 D.L.R. (4th) 318 (“Dockyard Trades #1”), which held that the rollback of a 5.2% wage increase in a binding arbitral award to 1.5% was not a substantial interference with collective bargaining. In Dockyard Trades #2, which the Supreme Court remanded to the British Columbia Court of Appeal for disposition in accordance with Meredith and MPAO, the court reached the same conclusion.

[150] The case of Canada (Procureur général) c. Syndicat canadien de la function publique, section locale 675, 2014 QCCA 1068 (“Syndicat canadien #1”), was also remanded for reconsideration in light of MPAO and Meredith to the Court of Appeal of Quebec: [2014] S.C.C.A. No. 351. The case involved CBC employees represented by the Canadian Union of Public Employees, Local 675 and the Association des réalisateurs.

[151] The CUPE agreement provided for wage increases as follows: 2.6% on October 1, 2007, 2.5% on September 29, 2008, and 2.5% on September 28, 2009. The agreement with the Association des réalisateurs provided for an increase of 3.5% on October 1, 2007, followed by four annual wage increases of 3% on December 10, 2007, 2.5% on December 15, 2008, 2.5% on December 14, 2009, and 2.5% on December 13, 2010. As a result of the ERA, the CBC employees lost the portion of the wage increases in excess of the ERA limits, retroactive to December 8, 2008.

[152] In Syndicat canadien #1, the Court of Appeal of Quebec reversed the lower court decision that the ERA was unconstitutional. When the case was remanded, the court heard the appeal de novo and reached the same conclusion: (Procureur général) c. Syndicat canadien de la fonction publique section locale 675, 2016 QCCA 163, leave to appeal to SCC requested, [2016] S.C.C.A. No. 117 (“Syndicat canadien #2”).

[153] In Syndicat canadien #2, the Court of Appeal of Quebec held, at para. 43, that wage issues are central to freedom of association in the workplace:

“…on peut affirmer sans se tromper que les questions salariales sont assurément de celles qui importent aux travailleurs engagés, par l'intermédiaire de leur syndicat, dans le processus de négociation collective qui fait partie intégrante de la liberté d'association que garantit l'al. 2d) de la Charte. Il s'agit là de questions centrales à l'exercice de cette liberté en milieu de travail et qui sont ordinairement l'un des chefs de discussion cruciaux lors d'une négociation collective.”

[154] While the court noted, at para. 44, that the interference “n'était donc pas anodine”, it looked at the interference in context. One relevant factor was that the wage increase caps were consistent with negotiated outcomes. The court held, at para. 61:

Par conséquent, il n'y a pas lieu de conclure à la violation de la liberté d'association garantie par l'al. 2d). C'est là, d'ailleurs, la conclusion de la Cour suprême dans Meredith, conclusion dont il n'y a pas lieu de s'écarter.

[155] The issue in Meredith was “whether the ERA substantially interfered with the existing Pay Council process, so as to infringe the appellants’ freedom of association”: para. 25. The Supreme Court reiterated its general approach that s. 2(d) guarantees a right to a meaningful labour relations process, but it does not guarantee a particular outcome or result. The court described the impact of the ERA on RCMP members at para. 26:

[T]he ERA resulted in a rollback of scheduled wage increases from the previous Pay Council recommendations accepted by the Treasury Board, from between 2% and 3.5% to 1.5% in each of 2008, 2009, and 2010. The original increase would also have doubled service pay and increased the Field Trainer Allowance. Both of these were also eliminated by the ERA, subject to subsequent negotiations pursuant to s. 62 of that Act.

[156] The reference to s. 62 of the ERA was important to the process analysis in Meredith. Section 62 provided an exception for the RCMP:

Despite sections 44 to 49, the Treasury Board may change the amount or rate of any allowance, or make any new allowance, applicable to members of the Royal Canadian Mounted Police if the Treasury Board is of the opinion that the change or the new allowance, as the case may be, is critical to support transformation initiatives relating to the Royal Canadian Mounted Police.

[157] The Supreme Court pointed out in Meredith that RCMP members were able to use the Pay Council process, despite its constitutional flaws, to make substantial gains, and observed, at para. 29:

Most significantly in the case of RCMP members, s. 62 permitted the negotiation of additional allowances as part of "transformation[al] initiatives" within the RCMP. The record indicates that RCMP members were able to obtain significant benefits as a result of subsequent proposals brought forward through the existing Pay Council process. Service pay was increased from 1% to 1.5% for every five years of service -- representing a 50% increase -- and extended for the first time to certain civilian members. A new and more generous policy for stand-by pay was also approved. Actual outcomes are not determinative of a s. 2(d) analysis, but, in this case, the evidence of outcomes supports a conclusion that the enactment of the ERA had a minor impact on the appellants' associational activity. [Emphasis added.]

[158] The Supreme Court consequently found no breach of s. 2(d) of the Charter in Meredith, stating, at para. 30:

Simply put, the Pay Council continued to afford RCMP members a process for consultation on compensation-related issues within the constitutionally inadequate labour relations framework that was then in place. The ERA and the government's course of conduct cannot be said to have substantially impaired the collective pursuit of the workplace goals of RCMP members.

[159] The court stated that the changes wrought by the ERA with respect to the RCMP did not rise to the level of a s. 2(d) limit, for three reasons. First, the court noted, at para. 28: “The process followed to impose the wage restraints thus did not disregard the substance of the former [Pay Council] procedure,” and the ERA “did not preclude consultation.” Second, the court noted, at para. 29, that the ERA contained an exception for the RCMP in s. 62, which was used by the membership to make substantial gains. Third, and most importantly, the key to the Supreme Court’s decision was in its finding, at para. 28, that the level of capped wage increases imposed by the ERA reflected the results of free collective bargaining:

[T]he level at which the ERA capped wage increases for members of the RCMP was consistent with the going rate reached in agreements concluded with other bargaining agents inside and outside of the core public administration and so reflected an outcome consistent with actual bargaining processes. The process followed to impose the wage restraints thus did not disregard the substance of the former procedure.

(iv) The Principles Applied

[160] I concluded in the previous section of these reasons that the ERA’s wage increase caps did not unconstitutionally limit the appellants’ s. 2(d) Charter rights. I would apply the same logic to the issue of rollbacks, with necessary modifications, particularly in light of the Supreme Court’s decision in Meredith.

[161] In my view, the ERA’s s. 62 exception for the RCMP did not drive the result in Meredith. Rather, the key to the Supreme Court’s decision was its finding, at para. 28, that the level of capped wage increases imposed by the ERA reflected the results of free collective bargaining, which, as discussed above, is also true here.

[162] The Crown argues that s. 8 of the ERA did provide some relief:

Nothing in this Act precludes the bargaining agent for employees governed by a collective agreement or arbitral award and the employer of those employees from amending, by agreement in writing, any provision of the collective agreement or arbitral award, other than a provision relating to its term, so long as the amendment is not contrary to any provision of this Act.

[163] The application judge called s. 8 “an invitation to reopen any collective agreement”: para. 183. While s. 8 provides the union and employer could amend, by agreement in writing, any provision in a collective agreement, the proviso, “so long as the amendment is not contrary to any provision of this Act,” would not permit a reopening to provide for wage increases above the wage limit caps or any other forms of additional remuneration. But s. 8 provided an avenue by which a union could seek other advantages of value to members. The evidence is that several collective agreements were reopened. For example, PSAC was able to negotiate better return to work provisions following parental leave.

[164] I conclude, drawing on Meredith, Dockyard Trades #2 and Syndicat canadien #2, that the rollbacks did not amount to substantial interference with the collective bargaining process and thus did not limit the 2(d) Charter rights of the employees represented by the appellants.

(e) The Legislated Inability to Catch Up

[165] Section 57 of the ERA prohibits future bargaining or arbitral agreements from making up for the effects of the restraints imposed by the Act. It provides:

57 No provision of any collective agreement that is entered into – or of any arbitral award that is made, or of any terms and conditions of employment that are established – after the day on which this Act comes into force may provide for compensation for amounts that employees did not receive as a result of the restraint measures in this Act.

[166] Similarly, s. 58 overrides provisions in collective agreements entered into, and arbitral awards made, before the enactment of the ERA that provide “for compensation for amounts that employees did not receive as a result of the restraint measures in this Act”.

[167] The unions argued the impact of the ERA would be permanent and, as the application judge explained the argument, at para. 185, “[t]he wage rates of their members will never catch up.”

(i) The Application Judge’s Decision

[168] The application judge set out his understanding of the effect of s. 57, at para. 186:

What this says is that the wages that would have been earned had the restraints not be put in place cannot be recovered. The unions will not be able to [argue], in subsequent bargaining, that they should recover what was lost. The intention is clear. The restraints are to be effective. This does not mean that in the future, bargaining of wage rates will not be subject to considerations of what other comparable workers are earning at the time and whatever other appropriate factors may be brought to bear.

(ii) Analysis

[169] I agree with the application judge that the appellants’ interpretation of s. 57 goes too far. The application judge is correct that future bargaining would permit the unions to seek comparable wage rates to what comparable private sector employees were making in the event that they had overtaken the civil service wage rates. This is provided for in ss. 148(2)(b) and 175(2)(b) of the PSLRA.

[170] As I see the operation of ss. 57-58 in simple terms, if civil servant Joan was $10,000 a year behind her private sector comparator Bob for two years in the restraint period, then Joan cannot recover the $20,000 cumulative difference. However, in the first year after the restraint period, Joan’s salary could be increased by $10,000 to match Bob’s, all other things being equal. But the prospect that Joan can get to the new comparable salary bracket does not address the issue of her catch-up for the restraint period.

[171] In particular, I do not see how the ERA negatively affects future bargaining by the CRA PIPSC bargaining unit, as PIPSC argues. The unit was looking for increases in the neighbourhood of 30% to make up for past incomparability between public sector and private sector salaries. As I see it, the ERA just affects the restraint years, not any previous years of underpayment (if there were any).

[172] The appellants submit there is no justification for this permanent limit on free collective bargaining. PIPSC argues: “Sections 57 and 58 of the ERA effectively leveraged the occasion of a period of financial uncertainty to impose permanent adverse impacts on employees’ wages and pensions and on their freedom of association.” The rationale provided by the Government for the limits on free collective bargaining imposed by the ERA was rooted in the global economic crisis and its possible fiscal impacts on the Government. All understood the restraint period and the restraints themselves to be temporary, to end with fiscal year 2010-2011, even though a budget deficit was projected for 2011-2012. The Government’s explanation for this permanent limit on future collective bargaining was the need for permanent savings to meet its long-term fiscal objectives.

[173] While taking matters off the table might generally be inconsistent with the principles in the 2015 labour trilogy, the context must be kept in mind. Bargaining about wages was limited during the temporary restraint period. It was not permanent. It seems to me that the prohibition on future bargaining relates only to the Government’s need to retain the savings obtained during the restraint period. It is, in short, a corollary of the wage increase caps.

[174] In conclusion, ss. 57-58 did not substantially interference with collective bargaining for s. 2(d) purposes.

(4) Conclusion on s. 2(d)

[175] As noted, not every law or action limiting collective bargaining will result in a limit on s. 2(d) Charter rights. The Charter only prevents the Government from doing something that would “compromise the essential integrity of the process of collective bargaining protected by s. 2(d)”: BC Health Services, at para. 129. Even if government action or legislation “substantially touch on collective bargaining, they will still not violate s. 2(d) if they preserve a process of consultation and good faith negotiation”: BC Health Services, at para. 94.

[176] The Government engaged in permissible hard bargaining during a period of economic crisis and government austerity. And by enacting the ERA, the Government capped wage increases for a limited period. The ERA did not completely prohibit any wage increases, the cap was in place for a limited period of time, and the limit imposed was in line with the wage increases obtained through free collective bargaining. Moreover, the appellant unions were able to make progress on matters of interest to some of the bargaining units they represented. They were still able to participate in a process of consultation and good faith negotiations. As such, neither the ERA nor the Government’s conduct before or after the enactment of ERA limited the appellants’ s. 2(d) rights.

B. Issue Two: Did the Government demonstrably justify, under s. 1 of the Charter, any Limits on the associational rights of federal public servants under s. 2(d)?

[177] In the event that the foregoing analysis is wrong in whole or in part, I now turn to consider the application of s. 1 of the Charter.

[178] Section 1 of the Charter requires the court to determine whether the limits established on s. 2(d) rights are “reasonably and demonstrably justified in a free and democratic society.” The onus is on the Crown seeking to uphold the limits established by the ERA.

[179] The identified limits to be assessed are the imposition of wage increase caps in bargaining and arbitration during the restraint period, the retrospective application of the wage increase limits to fiscal year 2006-2007, the imposition of wage increase rollbacks on previously negotiated collective agreements and arbitral awards, and the prohibition on negotiating catch-ups in bargaining after the restraint period.

[180] The court must determine first, whether the objectives of the ERA were pressing and substantial, and second, whether the means by which those objectives were advanced were proportionate. The proportionality analysis asks three questions: (1) is the limit rationally connected to the purpose; (2) does the limit minimally impair the right; and (3) is there proportionality between the deleterious and salutary effects of the law? (See Carter v. Canada (Attorney General), 2015 SCC 5, [2015] 1 S.C.R. 331; R. v. Oakes, 1986 CanLII 46 (SCC), [1986] 1 S.C.R. 103.)

(1) The Appellants’ Section 1 Charter Challenges

[181] By way of overview, the appellants’ s. 1 Charter challenges are both substantive and procedural. Substantively, although they admit the existence of the economic “downturn”, the appellants reject the notion that Canada had a fiscal problem. They reject the saliency of the Government's stated objectives in addressing the economic problems faced by Canada. They also challenge the proportionality of the ERA’s measures, arguing they were not rationally connected to the objectives, did not minimally impair freedom of association, and their deleterious effects outweighed any salutary benefits. The appellants’ procedural challenge focusses on the application judge’s admission and use of the Government’s evidence.

[182] I begin with a description of the context in which the ERA was enacted and then turn to consider the appellants’ attacks on the ERA’s objectives. Next, I consider the appellants’ proportionality challenges.

(a) The Need for a Contextual Approach

[183] It is now trite law that the s. 1 analysis is contextual and fact-specific. McLachlin J. observed that “the Oakes test must be applied flexibly, having regard to the factual and social context of each case”: RJR-MacDonald Inc. v. Canada (Attorney General), 1995 CanLII 64 (SCC), [1995] 3 S.C.R. 199, at para. 132. She cautioned, in para. 134, that: “[c]ontext is essential in determining legislative objective and proportionality, but it cannot be carried to the extreme of treating the challenged law as a unique socio-economic phenomenon, of which Parliament is deemed the best judge.” I address below the thorny question of when and to what extent courts should defer to legislative choices.

The Global Economic Crisis

[184] The context for the ERA was the global recession that began in August 2007, and peaked in late 2008 and early 2009. The application judge laid out the evidence in his reasons, at paras. 5-17 and 192-214. The evidence established that: this was the most serious global recession since the Great Depression; global conditions and the economic recession had a negative impact on the Canadian economy and on the fiscal position of the Government of Canada; in the private sector, exports and commodity prices declined as did investment and investor confidence; and consumer spending declined. The outlook for real GDP growth in Canada in 2009 (already revised down from 1.9% to 1.2% in October 2008) was downgraded to 0.3% in November 2008.

[185] Paul Rochon swore three affidavits on behalf of the Federal Government. He was at the center of the Government’s policy work around the financial crisis on which he gave evidence. He was the Associate Deputy Minister and G-7 Deputy in the Federal Department of Finance when he swore his first affidavit on February 28, 2012.

[186] Mr. Rochon provided evidence that the leaders of the Group of 20 described the crisis as posing “serious challenges to the world economy and financial markets” and agreed on the need for “a broader policy response … based on closer macro-economic co-operation, to restore growth, avoid negative spillovers and support emerging market economies and developing countries.”

[187] According to Mr. Rochon, these G-20 commitments underpinned the Government’s response, which included “a suite of policy and legislative actions intended to address the negative impacts of the recession and stimulate the economy. In doing so, the Government pursued a publicly announced economic strategy founded on responsible fiscal management.” In particular, Mr. Rochon noted:

Stimulus and restraint measures were purposely enacted together. In the Government’s view, the credibility and maximum effectiveness of the Economic Action Plan rested on the Government’s ability to demonstrate its commitment to sound ongoing fiscal management and long-term sustainable public finances. In order to restore confidence among Canadians, the Government considered it necessary to act boldly with a stimulus package and also to ensure that the Government’s fiscal position was sustainable coming out of the crisis. The ERA and other spending restraint measures were introduced to help achieve this latter goal.

[188] At para. 214, the application judge quoted Mr. Rochon’s sur-reply affidavit:

Uncertainty and risk were exceptionally high in the fall of 2008, which required the Government to act quickly and with a high degree of prudence. [The (Reply) Affidavit of Lars Osberg] disputes the Government's assessment of what was "reasonably probable" at the time of the recession. However, the Government was not engaged in an academic exercise and it did not have the advantage of hindsight. It needed to make swift decisions in rapidly evolving circumstances to minimize risk, address negative impacts and bolster the confidence of Canadians and international investors alike.

[189] Mr. Rochon’s evidence led the application judge to find, at para. 6:

Governments and central banks accepted that the speed and trajectory of the global economic downturn required them to respond. Governments believed that they had to act quickly to mitigate the recession and support economic recovery.

[190] The global economic crisis to which the Government was responding forms part of the context in which the constitutional assessment of the challenged ERA provisions must proceed. The appellants, like their expert witness Dr. Osberg, downplay the crisis.

[191] It was open to the trial judge to accept Mr. Rochon’s evidence over Dr. Osberg’s. Although the great recession might look less serious after the passage of years, like objects in the rear-view mirror of a moving car, the Government’s response must be assessed bearing in mind the global economic crisis then prevailing. It was a time when businesses were collapsing, the banking system was teetering, and unemployment was increasing. Demands on governments were great. Multi-billion dollar bailouts were necessary, and governments everywhere attempted to stimulate their economies. It was a truly parlous time.

(b) The Objectives of the ERA

[192] Against that larger contextual background, Mr. Rochon gave the following evidence about the Government’s specific objectives in enacting the ERA:

Under the umbrella of the Government’s overriding objective of managing its way out of the crisis in a fiscally responsible manner, the policy objectives of the ERA were three-fold:

(i) to help reduce undue upward pressure on private-sector wages and salaries;

(ii) to provide leadership by showing restraint and respect for public money; and

(iii) to manage public sector wage costs in an appropriate and predictable manner that would help ensure the ongoing soundness of the Government’s fiscal position.

[193] I make two observations about the role of these objectives in the constitutional analysis. First, the appellants take the Government’s expressed objectives in enacting the ERA at face value. This is not a case in which there is a live issue about how the legislative objectives were to be identified, as in Bedford and Carter. As confirmed in response to a question from the bench in oral argument, the appellants do not argue that the Government had an unexpressed ulterior motive, as was alleged in PSAC v. Canada, 1987 CanLII 89 (SCC), [1987] 1 S.C.R. 424 (“PSAC 1987”). Second, the appellants do not argue that the objectives are either too broadly or too narrowly framed.

[194] I next consider whether the objectives are, in principle, of sufficient importance to justify the establishment of limits on the freedom of association

(2) The First Oakes Stage: Were the ERA’s Objectives Pressing and Substantial?

(a) The Governing Principles

[195] In the s. 1 analysis, the Government must first establish that there is an objective “of sufficient importance to warrant overriding a constitutionally protected right or freedom”: R. v. Big M Drug Mart Ltd., 1985 CanLII 69 (SCC), [1985] 1 S.C.R. 295, at p. 352, para. 139. Chief Justice Dickson explained that the objective must “relate to concerns which are pressing and substantial in a free and democratic society before it can be characterized as sufficiently important”: Oakes, at pp. 138-39, para. 69. The standard is “high in order to ensure that objectives which are trivial or discordant with the principles integral to a free and democratic society do not gain s. 1 protection”: p. 138, para. 69. The objective must be directed to “the realization of collective goals of fundamental importance”: p. 136, para. 65.

[196] This stage of the s. 1 analysis is usually not an evidentiary contest. Rather, “the proper question at this stage of the analysis is whether the Attorney General has asserted a pressing and substantial objective” and a “theoretical objective asserted as pressing and substantial is sufficient for purposes of the s. 1 justification analysis”: Harper v. Canada (Attorney General), 2004 SCC 33, [2004] 1 S.C.R. 827, at paras. 25-26.

[197] There is a certain analytical tension between the specific legislative provisions under review and the legislation as a whole. On the one hand, in considering whether an objective is pressing and substantial, the entire legislative context must be taken into account, as LeBel J. stated in R. v. Advance Cutting and Coring Ltd., 2001 SCC 70, [2001] 3 S.C.R. 209, at para. 255:

The place and function of the challenged provisions in the legislative scheme must be carefully identified. The nature of the system and its broader objectives have to be kept in mind. The analysis should not consider the infringing provision apart from its legislative context.

[198] On the other hand, as McLachlin J. observed in RJR-MacDonald, at para. 144: “The objective relevant to the s. 1 analysis is the objective of the infringing measure, since it is the infringing measure and nothing else which is sought to be justified.” The tension will vary from case to case. In my view, where the actuating force is a national emergency, the broader context must be kept in mind throughout.

This Case is Unusual

[199] Most s. 1 Charter cases move quickly past the first stage of determining whether a government’s objectives were pressing and substantial. Not this one.

[200] The appellants assail the Government’s ERA objectives root and branch. They assert the Government’s stated objectives of curtailing upward pressure on private sector wages and of ensuring predictability in public sector wages “addressed phantom problems” that were not pressing and substantial. They characterize the objective of providing leadership as “an entirely political and abstract objective that cannot be relied upon to override Charter rights.”

[201] This issue became an evidentiary battle between Mr. Rochon and Dr. Osberg for the appellants. Dr. Osberg is a professor of economics at Dalhousie University. He was offered as an expert in labour economics, macroeconomics and public finance. His expertise was not questioned by the Attorney General, nor was he cross-examined. For the Government, Mr. Rochon swore an affidavit, a reply affidavit, and a sur-reply affidavit.

[202] The opinions of each witness were supported by detailed and thorough reviews of economic models and studies. The application judge described these studies and the conclusions drawn by Mr. Rochon and Dr. Osberg at length, at paras. 194-214.

[203] The competing affidavits set out a debate between the witnesses about the legitimacy of the policy objectives proffered by the Government for the ERA in responding to the perceived or real pressures it faced in the crisis.

(b) The Application Judge’s Assessment

[204] I agree with the appellants that the application judge accepted the evidence of Mr. Rochon in preference to that of Dr. Osberg. This is plain from a number of his statements. His conclusion, on the evidence, was that the Government’s objectives were pressing and substantial, in the context. This comes out strongest at para. 242:

In a time of economic concern and crisis, the government sought to provide leadership to instil confidence in Canadians. The need for leadership was pressing and substantial. The objectives of ensuring that public-sector wages did not affect demands on the private sector and protecting the fiscal standing of the government, when viewed as areas where leadership was required, added to and augmented the pressing and substantial need for leadership from those we elect to provide it.

[205] The application judge’s analysis of the competing reasoning of Mr. Rochon and Dr. Osberg was careful and complete.

[206] The application judge assessed each of the Government’s objectives –leadership, reducing upward wage pressure on private sector wages, and ensuring the ongoing soundness of the Government’s fiscal position – in light of the conflicting evidence. Although he evaluated each objective individually, the application judge saw the latter two objectives as being intertwined with the Government’s need to demonstrate leadership during a time of crisis.

(i) Leadership

[207] The application judge considered first the Government’s objective to “provide leadership by showing restraint and respect for public money.” Dr. Osberg opined that “[l]eadership was not provided to Canadians by the Government through the ERA”, and ridiculed this objective as expressing nothing more than “political statements summarizing a public relations strategy.” The application judge quite rightly rejected this criticism, at para. 225:

There is an unhappy tendency to use "politics" as a pejorative. It is not. Politics is the means by which those we elect govern. It is not something that can be set aside when matters of public policy are being considered. This was recognized by Chief Justice Dickson [in PSAC 1987, at p. 442 at para. 36]:

Due deference must be paid as well to the symbolic leadership role of government. Many government initiatives, especially in the economic sphere, necessarily involve a large inspirational or psychological component which must not be undervalued.

[208] The application judge preferred the evidence of Mr. Rochon on the issue of leadership, stating, at para. 227:

On the other hand Paul Rochon has held significant leadership positions in the Department of Finance. It does not seem out of place to suggest that he would have an understanding of the role government can play in the face of an economic crisis. Paul Rochon noted:

...The Government needed to reassure households and investors that the return to fiscal deficits would be temporary and would not undermine the Government's commitment to long-term fiscal sustainability. As a spending restraint measure, the [Expenditure Restraint Act] helped to demonstrate this commitment.

[209] Dr. Osberg challenged the use of budgetary restraints on the basis that they would reduce aggregate demand when stimulus was needed. The application judge did not accept that Dr. Osberg’s single-minded economics perspective was appropriate. He stated, at para. 228:

This response does not respect the broader perspective of leadership referred to by Chief Justice Dickson. The balance being struck was to provide the assurance that the government was behaving responsibly so that Canadians would understand that the economic issues were being dealt with. This could have the effect of encouraging them to be confident in their economic future leading them to continue to purchase the goods and services they needed and wanted. Paul Rochon made this point. He said that the statement of the Minister of Finance was not a call for households to reduce their consumption.

[210] The application judge concluded, at paras. 229-30, that the Government’s objective was “consistent with the inspirational and psychological view of leadership expressed by Chief Justice Dickson” that leadership can function as an example, and did in this case, “to help reduce undue upward pressure on private-sector wages and salaries.” He added, at para. 226: “I pause to observe that it is not clear to me why an economist [Dr. Osberg] is able to opine on leadership at this level.”

(ii) The Impact of Public Sector Wage Increases on the Private Sector

[211] The application judge next assessed the Government’s objective “to help reduce undue upward pressure on private-sector wages and salaries.”

[212] Dr. Osberg opined that “[p]ublic sector wages imposed no upward pressure on private sector wages”. He took the position that public sector wages did not lead but instead lagged behind private sector wages, and that the federal public service was too small to influence private sector wages, as the application judge noted, at paras. 198-99.

[213] Mr. Rochon responded that, according to the data, public sector wages did lead in the relevant time frame and, importantly, would have gone on to do so but for the ERA. Further, he pointed out, as noted by the application judge, at paras. 230-31, provincial governments did take steps to moderate public sector wage growth.

[214] The application judge rejected Dr. Osberg’s evidence, and instead accepted Mr. Rochon’s evidence that federal restraint worked as the “transmission mechanism” to signal the need for restraint in the broader public sector. He pointed out, at para. 230, that Dr. Osberg’s approach “does not address the prospect of wage restraint on the federal public service as an example for other levels of government and the broader impact extending on to the private sector.” He preferred Mr. Rochon’s evidence that “the federal government aimed to indirectly reduce pressure on private sector wages by setting an example for other orders of government in Canada through the introduction of the [ERA].” He added, at para. 234: “I take Paul Rochon to be saying that by the leadership it showed, in restraining wages and passing the legislation, the federal government did what it could to encourage the pragmatic approach the private sector exhibited in reopening these contracts.” The application judge saw this as an example of the leadership referred to in PSAC 1987, where Dickson C.J. said at p. 445, at para. 42:

[T]he leadership role of government constitutes justification for Parliament's legislative focus on the public sector. It was, in the circumstances, permissible for Parliament to decline to impose a universally applicable short-term controls programme on an heterogeneous labour force, and instead to limit its interference with collective bargaining processes to a discrete and relatively homogeneous group of employees. The employees in question shared in common an employer perceived to occupy the role of the national economic leader and trend-setter and they had, according to the evidence, a greater degree of job security than other employees, which might have made them less susceptible to adverse long-term effects from temporary controls.

(iii) The Ongoing Soundness of the Government’s Fiscal Position

[215] The application judge considered the Government’s objective “to manage public sector wage costs in an appropriate and predictable manner that would help ensure the ongoing soundness of the Government’s fiscal position.” He set out the competing views of Dr. Osberg and Mr. Rochon on the evidence, at paras. 211-14, noting, at para. 214, the Government was responding to the crisis without the advantage of hindsight, and “was not engaged in an academic exercise”.

[216] Dr. Osberg opined that “[n]othing was actually done by the ERA that ensured the ongoing soundness of the government’s fiscal position”. He suggested the ERA was unnecessary because the relative savings for the Government were small and would make no material difference to when the Government would return to balance, since Canada was in such a strong fiscal position going into the recession.

[217] Mr. Rochon pegged the annual ERA savings at $1 billion and, in his reply affidavit, stated that “cumulative savings from the ERA over the 2008-09 to 2016-17 period will amount to $8.1 billion. These are significant amounts for a single expenditure control measure.”

[218] The application judge analyzed this objective from the perspective of s. 1 of the Charter, at paras. 236-39. He instructed himself properly, at para. 236-37, on the need for strong judicial skepticism about governmental assertions about budgetary constraints and other pressing governmental priorities to justify limits on Charter rights: Newfoundland (Treasury Board) v. Newfoundland and Labrador Association of Public and Private Employees, 2004 SCC 66, [2004] 3 S.C.R. 381, at para. 72 (“NAPE”). Despite that skepticism, the application judge accepted that this objective was pressing and substantial: para. 237. He noted that the economic downturn at that time was “the worst recession in eighty years. The wage restraint plan was part of a large co-ordinated response that included the introduction, into the economy, of $40 billion in federal stimulus measures over two years.”

[219] The application judge rejected Dr. Osberg’s evidence and the unions’ argument that the fiscal impact of the ERA was small and did little to advance the stated objectives, at para. 247. He also considered and dismissed Dr. Osberg’s suggested alternative measures, at paras. 238 and 246, which I will address below in the minimal impairment analysis. Instead, at para. 239, the application judge quoted and accepted Mr. Rochon’s criticism: “[Dr. Osberg’s] statement … that the [ERA] ‘did not make any difference at all to expectations about Canada's long-run fiscal sustainability’ overlooks its importance in enhancing the credibility of the Government's management of public finances...”

[220] The application judge found that governmental leadership in an economic crisis was the critical element. He found, at para. 242, that the objective of “protecting the fiscal standing of the government, when viewed as areas where leadership was required, added to and augmented the pressing and substantial need for leadership from those we elect to provide it.” He added, at para. 247 that the union position on the small impact of the ERA failed to “acknowledge the importance of leadership in times of crisis.”

(c) The Principles Applied: Pressing and Substantial Objectives

[221] The question to be answered at this stage of the Oakes analysis is whether the application judge erred in finding that the Government had asserted pressing and substantial objectives. The appellants argue the evidence presented by Dr. Osberg significantly undermines the legitimacy of the objectives asserted by the Government so that the application judge erred in accepting those objectives were pressing and substantial. The appellants also argue the application judge erred in his resort to judicial deference.

[222] I reject these arguments. In my view, the application judge gave due effect to the law in deferring to the Government’s policy choices. Accordingly, I am of the view that the application judge did not err in finding that the Government asserted pressing and substantial objectives.

The Role of Judicial Deference

[223] Was the application judge’s invocation of judicial deference to Parliament an error in principle? It was not an error.

[224] Courts conducting full-scale Oakes assessments in relation to labour legislation are obliged to delve deeply into government fiscal policy and its determination in highly sensitive areas. Judicial probing will lead inevitably into real tensions about the respective roles of Parliament and the judiciary in governing Canada, since s. 1 of the Charter places courts in the role of final arbiter of constitutional rights. Courts have recognized, through a series of limiting principles, that judicial deference to government policy determinations is prudent as a matter of institutional capacity and the constitutional legitimacy of judicial review. In general terms, judges ought not to see themselves as finance ministers.

[225] The first limiting principle is the important constitutional principle of separation of powers. Any democratic polity built on an institutional separation of powers must face questions about the role and scope of the institutional deference inter se, including judicial deference to Parliament. The principle of separation of powers culminates centuries of evolution during which the power of the Crown gradually devolved to “distinct organs with separate functions”, as Karakatsanis J. noted in Ontario v. Criminal Lawyers’ Association of Ontario, 2013 SCC 43, [2013] 3 S.C.R. 3, (“CLAO”) at para. 28. She stated:

The development of separate executive, legislative and judicial functions has allowed for the evolution of certain core competencies in the various institutions vested with these functions. The legislative branch makes policy choices, adopts laws and holds the purse strings of government, as only it can authorize the spending of public funds. The executive implements and administers those policy choices and laws with the assistance of a professional public service. The judiciary maintains the rule of law, by interpreting and applying these laws through the independent and impartial adjudication of references and disputes, and protects the fundamental liberties and freedoms guaranteed under the Charter.

[226] The second limiting principle is the court’s recognition of the respective institutional capacities of each branch, which “play critical and complementary roles in our constitutional democracy”: CLAO, at para. 29. Karakatsanis J. cautioned at para. 29: “each branch will be unable to fulfill its role if it is unduly interfered with by the others.”

[227] The third limiting principle is a corollary of the second, and recognizes the “core competencies” to which Karakatsanis J. referred. Of relevance to this case, the courts have accepted the Government’s core competencies include the determination of economic policy, budgeting decisions, the proper distribution of resources in society, labour relations regulation, and how best to respond to situations of crisis.

[228] The determination of economic policy is among the core competencies of the legislature and the executive, not the judiciary, particularly in circumstances of national importance where the solutions to a problem are uncertain. This is where the democratic principle must surely bite most deeply.

[229] Judicial deference is not a new concept. In pre-Charter days, a parallel issue arose with respect to the division of powers and the reach of the “Peace, Order and Good Government” clause in the Constitution Act, 1867. Chief Justice Laskin made an apposite observation in Reference re Anti-Inflation Act (Canada), 1976 CanLII 16 (SCC), [1976] 2 S.C.R. 373, at p. 425:

In my opinion, this Court would be unjustified in concluding, on the submissions in this case and on all the material put before it, that the Parliament of Canada did not have a rational basis for regarding the Anti-Inflation Act as a measure which, in its judgment, was temporarily necessary to meet a situation of economic crisis imperiling the well-being of the people of Canada as a whole and requiring Parliament's stern intervention in the interests of the country as a whole.

[230] Chief Justice Dickson expressed strongly the same view in his partial dissent inPSAC 1987 at p. 442, para. 36, to which the application judge referred:

In my opinion, courts must exercise considerable caution when confronted with difficult questions of economic policy. It is not our judicial role to assess the effectiveness or wisdom of various government strategies for solving pressing economic problems. The question how best to combat inflation has perplexed economists for several generations. It would be highly undesirable for the courts to attempt to pronounce on the relative importance of various suggested causes of inflation, such as the expansion of the money supply, fiscal deficits, foreign inflation, or the built-in inflationary expectations of individual economic actors. A high degree of deference ought properly to be accorded to the government's choice of strategy in combatting this complex problem.

[231] Budgeting decisions are plainly within the core competencies of the legislature and the executive. As Binnie J. observed in NAPE, at para. 83, “in certain types of decisions there may be no obviously correct or obviously wrong solution, but a range of options each with its advantages and disadvantages.” He added: “Governments act as they think proper within a range of reasonable alternatives”, drawing on the Court’s acknowledgement in M. v. H., 1999 CanLII 686 (SCC), [1999] 2 S.C.R. 3, at para. 78, that “the role of the legislature demands deference from the courts to those types of policy decisions that the legislature is best placed to make”.

[232] Justice Binnie also cited, at para. 83, La Forest J.’s statement: “It is also clear that while financial considerations alone may not justify Charter infringements ... governments must be afforded wide latitude to determine the proper distribution of resources in society”: Eldridge v. British Columbia (Attorney General), 1997 CanLII 327 (SCC), [1997] 3 S.C.R. 624, at para. 85; see also Provincial Court Judges’ Association of New Brunswick v. New Brunswick, 2005 SCC 44, [2005] 2 S.C.R. 286, at para. 30.

[233] The Supreme Court has recognized the regulation of labour relations is a core government competency. It involves issues of a complex and sophisticated nature that require the balancing of competing interests and compromise. Here too, judicial deference to legislative choices is due, within limits. The Supreme Court has recognized “the complex interests involved in labour legislation and has on occasion expressed its reluctance to interfere with the balance struck by the legislator”: United Food and Commercial Workers Local 1518 (UFCW) v. K-Mart Canada Ltd., 1999 CanLII 650 (SCC), [1999] 2 S.C.R. 1083, at para. 62.

[234] Finally, and most importantly, it is a core function of government to provide leadership in times of crisis, when something must be done to protect the common good. Chief Justice Dickson made the point clearly in PSAC 1987, at p. 442, para. 36:

Due deference must be paid as well to the symbolic leadership role of government. Many government initiatives, especially in the economic sphere, necessarily involve a large inspirational or psychological component which must not be undervalued.

He added, at p. 445, para. 42, “the leadership role of government constitutes justification for Parliament's legislative focus on the public sector.”

[235] In difficult times “governments have a large ‘margin of appreciation’ within which to make choices”: NAPE, at para. 84, per Binnie J. He also added that “the scope of that ‘margin’ will be influenced, amongst other things, by the scale of the financial challenge confronting a government.”

[236] All of these core competencies of government are implicated deeply in this case. In general terms, the closer the decision under review is to the core competency of Parliament, the higher the degree of judicial deference, but deference never amounts to submission, since that would abrogate the court’s constitutional responsibility. Chief Justice Dickson, said, at p. 442, para. 36 of PSAC 1987: “The role of the judiciary in such situations lies primarily in ensuring that the selected legislative strategy is fairly implemented with as little interference as is reasonably possible with the rights and freedoms guaranteed by the Charter.” (See also RJR-MacDonald, at para. 136.)

[237] The application judge invoked the principle of judicial deference to Parliament at several key points in his reasoning. He noted, at para. 215, the difficulty of assessing “two divergent views in a highly technical area dealing with the government’s response to a global concern”. He set the issue of deference squarely, at para. 220:

It is not a matter of who is right. The issue remains whether, in the circumstances, any breach of the freedom of association falls within such reasonable limits as can be demonstrably justified in a free and democratic society. In searching for the answer some measure of deference is to be given to the government's choice of strategy. I say "some measure" mindful of the admonition of counsel for PIPSC that any deference should not lower the standard of justification. This is not a question of mindless genuflection in the direction of the government. Rather it is an acknowledgement that in the economic sphere there are complex choices to be made and difficult decisions to be taken.

[238] The authorities plainly support the application judge’s invocation of judicial deference in the circumstances of this case. He made no error in doing so.

(d) Conclusion on Pressing and Substantial Objectives

[239] The appellants argue that the application judge erred by accepting the objectives asserted by the Government despite the evidence of Dr. Osberg questioning their legitimacy. I reject this submission.

[240] As noted, the Government could have succeeded at this stage by asserting a theoretical objective. However, the evidence supports its position as well. The application judge accepted the evidence of Mr. Rochon in preference to that of Dr. Osberg where they conflicted. He did so for the reasons set out above. The appellants have not established the application judge made any palpable and overriding errors in his factual findings. Nor have they established that the application judge made any errors in principle, or that he reached conclusions that were unsupported, arbitrary, or insufficiently precise. At most, the appellants’ criticisms amount to “pointing out conflicting evidence”. Appellate intervention is therefore not justified: Carter, at para. 109.

[241] Not only do I defer to the application judge’s finding that the Government’s objectives were pressing and substantial, I agree with that finding.

[242] The detailed nature of the exercise in this appeal leads me to observe that the court should generally accept Parliament’s objectives at face value, unless there is an attack on the good faith of the assertion of those objectives or on their patent irrationality.

(3) The Second Oakes Stage: Were the ERA’s Measures Proportional?

[243] The task in the second stage of Oakes is to make the proportionality determination. The court must assess whether the means chosen by the Government to accomplish its ends were: first, rationally connected with the ends; second, minimally impairing; and third, proportional as between the deleterious and salutary effects of the law, making it just for the Government to require some individuals or groups to bear the negative effects of the means in order to secure the positive effects of the ends for the common good.

[244] For the purpose of this determination, the measures identified in the previous section of these reasons as limits of s. 2(d) Charter rights are the means to be assessed against the Government’s ends. Were these means proportional? The application judge found they were, and I agree.

(a) Were the Limits Rationally Connected?

(i) The Governing Principles

[245] The evidentiary burden at this stage of the analysis “is not particularly onerous”: Little Sisters Book and Art Emporium v. Canada (Minister of Justice), 2000 SCC 69, [2000] 2 S.C.R. 1120, at para. 228. Even so, the appellants have chosen this stage as the second focus of their attack.

[246] At this stage, the Government must establish a “causal connection between the infringement and the benefit sought on the basis of reason or logic”: RJR-MacDonald Inc., at para. 153; Carter, at para. 99. A law that limits Charter rights must be carefully designed to achieve the objectives in question and should not be “arbitrary, unfair, or based on irrational considerations”: Oakes, at p. 139. Where the legislation at issue has more than one goal, any of them can be relied upon to meet the s. 1 test: Alberta v. Hutterian Brethren of Wilson Colony, 2009 SCC 37, [2009] 2 S.C.R. 567, at paras. 44-45.

[247] Professor Peter Hogg suggests that “the requirement of a rational connection has very little work to do”: Constitutional Law of Canada, loose-leaf (Rel-No. 1 2014), 5th ed. (Toronto: Carswell, 2007), vol. 2, at §38.12. Provided that the impugned measure shows care of design and lack of arbitrariness and provided that it furthers an important government aim in a general way, it will pass the rational connection branch of the analysis: Canada (Human Rights Commission) v. Taylor, 1990 CanLII 26 (SCC), [1990] 3 S.C.R. 892, at pp. 925-26.

[248] A rational connection can be established on “a civil standard, through reason, logic or simply common sense”: R. v. Lucas, 1998 CanLII 815 (SCC), [1998] 1 S.C.R. 439, at para. 53. Similarly, “[l]ogic and reason, combined with the evidence that is available” can establish a rational connection: R. v. Bryan, 2007 SCC 12, [2007] 1 S.C.R. 527, at para. 41.

[249] The Government need only demonstrate a reasonable prospect that the limiting measure will further the objective to some extent, not that it will certainly do so: Hutterian Brethren, at para. 48. For example, in McKinney v. University of Guelph, 1990 CanLII 60 (SCC), [1990] 3 S.C.R. 229, some evidence showed a correlation between mandatory retirement and generating new jobs for younger faculty, while other evidence suggested that there was none. The court found that this conflicting evidence provided a sufficient basis to meet the rational connection test.

(ii) The Application Judge’s Decision

[250] The application judge found a rational connection between the ERA and the Government’s objectives. His analysis focused on the wage increase caps; he did not separately assess the individual means adopted by the ERA. He stated his conclusion, at para. 244:

The economy is influenced by public policy. In a time of economic uncertainty it is the role of government to provide leadership. The passage of the Expenditure Restraint Act was part of the program by which the government demonstrated leadership. It was rationally connected to the objective of providing leadership on the inspirational and psychological level envisaged by Chief Justice Dickson and by way of setting an example for other levels of government. This was confirmed by the objective not to allow wage increases in the federal public service to negatively influence the broader public or private sectors and to set an example by controlling its own spending. An acceptance of the evidence of Paul Rochon leads to the understanding that, while others may disagree with the substance, there was nothing arbitrary or irrational about the actions taken by the government. [Emphasis added.]

(iii) The Principles Applied: Rational Connection

[251] PIPSC concedes the imposition of wage increase caps is rationally connected to the Government’s fiscal objectives, but both appellants argue it was not rationally connected to the Government’s objective of reducing upward pressure on private sector wages and salaries. Proving there was such a connection was the burden of much of Mr. Rochon’s evidence, which the application judge accepted while rejecting Dr. Osberg’s contrary evidence.

[252] The Government’s response to the economic crisis was not hasty or ill-considered, but followed the data. In the course of preparing its response, the Government consulted various studies and modelled some scenarios as described by Mr. Rochon. Dr. Osberg challenged the utility of “calibrated computable general equilibrium” (CCGE) modeling methodology in determining how public sector wage setting impacts on private sector wage setting, as the application judge stated, at paras. 201-208. But the application judge accepted Mr. Rochon’s evidence that such studies are routinely used by governments, international bodies such as the Organisation for Economic Co-operation and Development and the International Monetary Fund, and private sector organizations, in order to determine, he noted, at para. 207, how “wage setting in the public sector can impact on wage setting in the private sector.”

[253] Moreover, the evidence establishes that it was the Government’s desire to avoid long-term deficits that led to spending restraints. The application judge accepted, at para. 21, the Government’s view that compensation costs, at 37% of direct program expenditures, were “significant”. As noted above, the Treasury Board Secretariat developed an options paper on controlling such costs. Of the options presented, the Government elected to limit wage increases, as the application judge noted, at para. 22:

[L]imited wage increases were recommended rather than wage freezes or wage reductions. It was believed that freezes or reductions could not be successfully negotiated. It was hoped that limited wage increases could be achieved through the collective bargaining process.

(iv) Conclusion on Rational Connection

[254] The application judge found the ERA’s imposition of wage increase caps was rationally connected with reducing undue upward pressure on private sector wages and salaries. He also found also that the Government exercised leadership in showing restraint in public spending and in fiscal responsibility, signalling the need for both to the private sector and to the broader public sector.

[255] It is self-evident that all of the measures attacked by the appellants would have positive impacts on expenditures and would meet the rational connection test with respect to ensuring the ongoing soundness of the Government’s fiscal position, and the Government’s objective of demonstrating leadership and reassuring Canadians in a perilous economic climate.

[256] The appellants have not demonstrated that the application judge’s decision is unsupported, arbitrary, insufficiently precise, or otherwise in error, so appellate intervention is not justified. At most, the appellants have pointed to competing evidence that the application judge chose not to accept. There is, therefore, no basis for interfering with the application judge’s conclusion: Carter, at para. 109.

[257] The ERA’s limits of the appellants’ rights were rationally connected with the Government’s objectives.

(b) Were the Measures Minimally Impairing?

(i) The Governing Principles

[258] The Supreme Court of Canada outlined this step of the Oakes test in Carter, at para. 102:

[T]he question is whether the limit on the right is reasonably tailored to the objective. The inquiry into minimal impairment asks “whether there are less harmful means of achieving the legislative goal” (Hutterian Brethren, at para. 53). The burden is on the government to show the absence of less drastic means of achieving the objective “in a real and substantial manner” (ibid. at para. 55). The analysis at this stage is meant to ensure that the deprivation of Charter rights is confined to what is reasonably necessary to achieve the state’s object.

[259] Judicial deference to Parliament at the minimal impairment stage has taken the form of a flexible approach that is sensitive to the context of the law in issue. McLachlin J.’s formulation of the test in RJR-MacDonald, at para. 160, was adopted by the court in Libman v. Quebec (Attorney General), 1997 CanLII 326 (SCC), [1997] 3 S.C.R. 569, at para. 58:

The impairment must be “minimal”, that is, the law must be carefully tailored so that the rights are impaired no more than necessary. The tailoring process seldom admits of perfection and the courts must accord some leeway to the legislator. If the law falls within a range of reasonable alternatives, the courts will not find it over broad merely because they can conceive of an alternative which might better tailor objective to infringement…

[260] Similarly, as Gonthier J. explained, “it is not sufficient that a judge, freed from all such constraints, could imagine a less restrictive alternative”: Nova Scotia (Workers’ Compensation Board) v. Martin, 2003 SCC 54, [2003] 2 S.C.R. 504, at para. 112. Wilson J. held that only where there are alternative measures “clearly superior to the measures in current use” would a law fail at this stage: Lavigne v. Ontario Public Service Employees Union, 1991 CanLII 68 (SCC), [1991] 2 S.C.R. 211, at p. 296, para. 170. McLachlin C.J. and Deschamps J. explained that “[t]he Court will not interfere simply because it can think of a better, less intrusive way to manage the problem”: Montreal (City) v. 2952-1366 Quebec Inc., 2005 SCC 62, [2005] 3 S.C.R. 141, at para. 94. They added: “What is required is that the [government concerned] establish that it has tailored the limit to the exigencies of the problem in a reasonable way.”

[261] Parliament need not choose the absolutely least intrusive means to attain its objectives; it must only come within a range of means which limit the Charter right or freedom as little as reasonably possible: R. v. Swain, 1991 CanLII 104 (SCC), [1991] 1 S.C.R. 933.

(ii) The Application Judge’s Assessment

[262] The application judge was deeply impressed by the scope and ferocity of the global economic crisis and its possible negative effects on Canada. He saw these threats as the Government’s dominant concern.

[263] The application judge found, at para. 246, that “efforts were made to minimize the intrusive effects” of the ERA. He noted that:

Employees would still see increases, albeit lesser than in previous years. Ancillary compensation features such as movement within the pay ranges, leave, performance pay, overtime and leave would be unaffected. The measures were time-limited.

[264] The application judge pointed out, at para. 106, the ERA did not single out union members, but applied to the federal public sector as a whole. A freeze was not imposed, although it was considered, as he noted, at paras. 22 and 153. As the application judge also pointed out, the right to strike was not removed, and the 2007-2008 year wage cap was eventually increased through bargaining from 1.5% to 2.3%. The unions also negotiated benefits improvements.

[265] The application judge considered the rollbacks to the wage terms in existing contracts of 1% for one or two years to be modest and to constitute no “more than a minimal impairment to the freedom of association”: para. 246.

[266] The application judge considered and rejected the alternatives to the ERA proposed by Dr. Osberg, as better ways to save money, at paras. 238 and 246. These included a smaller reduction in the GST cut or in the cut of corporate taxes. The application judge criticized this single-minded focus on cost savings as missing the leadership function of the ERA in managing the economic crisis.

[267] Chief Justice McLachlin explained the relationship between minimal impairment and judicial deference in Canada (Attorney-General) v JTI-Macdonald Corp., 2007 SCC 30, [2007] 2 S.C.R. 210, at para. [43](https://www.canlii.org/en/ca/