Court File and Parties

CITATION: Bowman et al. v. Her Majesty the Queen, 2019 ONSC 1064 DIVISIONAL COURT FILE NO.: 102/18 DATE: 2019-02-14

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

THORBURN, REID, and MYERS JJ.

BETWEEN:

DANA BOWMAN, GRACE MARIE DOYLE HILLION, SUSAN LINDSAY, and TRACEY MECHEFSKE Applicants

– and –

HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO, AS REPRESENTED BY THE MINISTER OF CHILDREN, COMMUNITY AND SOCIAL SERVICES Respondent

COUNSEL: Mike Perry for the Applicants, Dana Lindsay Bowman, Grace Marie Doyle Hillion, Susan Lindsay, and Tracey Mechefske Christopher P. Thompson and Chantelle Blom for the Respondent, Her Majesty the Queen in Right of Ontario

HEARD at Toronto: January 28, 2019

Reasons for Decision

BY THE COURT

OVERVIEW

[1] The government of Ontario announced a basic income pilot research study (“the Pilot Project”) in April of 2017.

[2] The objective of the Pilot Project was to: “study whether a basic income can better support vulnerable workers and give people the security and opportunity they need to achieve their potential.”

[3] It was envisaged that data would be gathered over a prolonged period in the hope of identifying whether providing recipients with a basic income would increase and stabilize income; reduce economic anxiety and/or improve housing stability, mental health and employment outcomes; and enable recipients to be better able to make choices and decisions about their future. The compilation of this data would assist in determining whether to adopt the basic income approach across the province.

[4] The Minister of Children, Social and Community Services (“the Respondent”) decided to cancel the Pilot Project on July 31, 2018 with payments to end in March 2019.

[5] The Applicants seek judicial review to quash the decision cancelling the Pilot Project.

THE POSITION OF THE PARTIES

The Applicants’ Position

[6] The Applicants agree that governments are entitled to make policy decisions to fund or not to fund certain initiatives. They also agree that the Minister’s decision to cancel the Pilot Project is a policy decision.

[7] However, the Applicants submit that the decision to cancel the Pilot Project is subject to judicial review because the Minister’s decision affects their financial interests, they relied on the Pilot Project to their detriment, and the decision to cancel adversely affects their well-being. Moreover, they claim the decision was irrational, made in bad faith and/or unethical and should therefore be quashed.

[8] The Applicants also claim the Respondent breached an agreement with Veritas, the Independent Review Board (“IRB”) retained for the Pilot Project, which requires the Respondent to consult with Veritas and adhere to the terms of the agreement.

[9] Lastly, while the Applicants seek an order quashing the decision to cancel the Pilot Project, they do not seek an order requiring the Respondent to continue funding the Pilot Project. Rather, they concede there is no legal authority to require the Respondent to continue funding the Pilot Project.

The Respondent’s Position

[10] The Respondent submits that the Pilot Project is a government funding decision which does not give rise to individual rights enforceable on judicial review. The decision to cancel the Pilot Project is therefore not justiciable because a policy decision as to how to spend public funds is a political decision that cannot be questioned or reviewed by the courts.

[11] Secondly, and only if this court decides that there is a justiciable issue, the fact that the Respondent’s policy choices may be contrary to the interests of some does not render the decision irrational or in bad faith.

[12] Moreover, the Respondent argues that the statements made by members of the Legislature are not “reasons for decision” and the opinions of research ethicists cannot fetter Cabinet’s policy-making authority. In any event, the Respondent’s two experts concluded that the decision to cancel the Pilot Project was not an ethical violation.

[13] The Respondent submits that it had no obligation to consult with Veritas prior to cancelling the funding for the Pilot Project.

[14] Finally, the Respondent argues that the inevitable effect of an order to quash the decision to cancel the Pilot Project is to require the Respondent to continue funding, which, it is agreed, this Court has no authority to do.

THE EVIDENCE

[15] The Pilot Program was created pursuant to the Crown’s common law spending powers. The authority for expenditures is derived from the Supply Act and expenditures are approved by the Treasury Board of Cabinet.

[16] The Applicants are all residents of Lindsay, Ontario. All of them receive Basic Income payments pursuant to the Pilot Project. Dana Bowman is 57-years old with long-term disabilities. Grace Hillion is a 20-year old student at Durham College. Susan Lindsay is a 57-year old person who stopped work in 2017 owing to health issues. Tracey Mechefske is a 46-year old person living with long-term disabilities who owns a small business.

[17] Pursuant to the Pilot Project, a randomized controlled trial was conducted in Hamilton and Thunder Bay with 1,000 participants assigned to a control group and 1,000 participants receiving payments. In Lindsay, a “saturation site”, all 2,000 participants received payments.

[18] Participants in the control group receive up to $16,989 per year for a single person or $24,027 for a couple, plus an additional amount of up to $6,000 per year for each person with a disability. Payments are reduced by 100% of Employment Insurance and Workplace Safety and Insurance Board benefits and 50% of employment income. Recipients who were receiving income support from Ontario Works at the time of enrollment in the Pilot Project receive drug benefits and those who received income support from the Ontario Disability Support Program (“ODSP”) continue to receive drug and dental benefits. Other benefits were not provided in the Pilot Project.

[19] Each of the Applicants was provided with an Information Booklet.

[20] In the Booklet, the Pilot Project is identified as “a three-year study” and later as lasting “up to three years”.

[21] The Information Booklet provides that participants must complete surveys containing questions about their experiences while in the Pilot Project, such as regarding “stress levels, work, family, health, education and housing” and consent to the collection and disclosure of their personal information and tax records. The Information Booklet provides that:

Participation in the pilot is temporary. Any decision you make about your future based on the amount you receive should take this into account. Participants will get notifications about the close of the pilot in advance.

The pilot will run for up to three years. When the pilot enters its final year, the Basic Income payments will be reduced gradually to prepare participants for the end of the study. The intent of this gradual reduction is to reduce any impact of ending Basic Income payments. Participants will receive information about this before any payments are reduced.

[22] Two of the four Applicants say they were told by Pilot Project staff that the Pilot Project would last three years. There was a phased enrollment of participants.

[23] As the Pilot Project was essentially a social science experiment with human participants, the Respondent engaged Veritas to “perform the initial and ongoing ethical review of the research study with the Research Participants’ rights and welfare in mind.”

[24] The Respondent acknowledged in writing that Veritas had the authority to review, oversee, and suspend approval of the Pilot Project and agreed to implement the Pilot Project “in accordance with the guiding ethical principles and normative documents abided by the IRB”.

[25] In March 2018, the Respondent stated in a report to Veritas that the study closure date was May 27, 2021.

[26] Consistent with the Respondent’s objectives of the Pilot Project:

a. Dana Bowman renewed her plan to upgrade her education toward a career in social work, which she said had not been financially feasible under ODSP;

b. Grace Hillion was able to pay her tuition and continue her college education which she said was in jeopardy due to financial issues;

c. Susan Lindsay, planned to use the Pilot Project payments to resume working; and

d. Tracey Mechefske used the payments in her small business.

[27] The Applicants say they also used the basic income from the Pilot Project to pay their bills, eat healthier food, and purchase clothes and medications. The Applicants say their independence, self-esteem and sense of personal accountability increased.

[28] On July 31, 2018, just over one year from the announcement of the Pilot Project, the Minister cancelled the Pilot Project. The Applicants first learned of the cancellation through family, the news, and social media.

[29] The Applicants state that the cancellation of the Pilot Project on July 31, 2018 effective March 31, 2019, has had a devastating impact on them and they feel that, as a result of the cancellation, their futures are in jeopardy, their health has suffered, and their futures are uncertain.

[30] Media releases were followed up with letters to the participants who were informed that payments would continue until March 2019, whereupon all payments would cease.

[31] When asked about the reason for the cancellation, the Executive Director of Policy in the Office of the Premier said that he thought cost was a big factor and that paperwork was another. He also cited “[r]emoval of work ethic/driving people to quit jobs,” as well as anti-competitive business environment leading to more layoffs and “usage/uptake”. The Minister stated that the Pilot Project was “actually disincentivizing people from working” and that a basic income program would be too expensive, “costing $17 billion and leading to a 20% HST”.

[32] On September 6, 2018, Veritas expressed “concern over the news reports indicating the government’s intention to wind down the Ontario Basic Income Pilot.” Veritas further noted that, as the IRB responsible for oversight of the project, it must review any proposed changes to the research protocol, evaluate their ethical acceptability, and approve them before they are implemented or disapprove them as the case may be.

[33] On October 4, 2018, the Respondent submitted its wind down strategy to Veritas. Veritas did not approve the strategy. Veritas said the wind down timeline was inconsistent with the three-year term of the Pilot Project and the Respondent’s initial statement that those who receive the basic income would receive it for two years, with another year in which the benefits would be gradually reduced to ease the transition back to standard benefits and because it appeared no justification for approval of the ‘winding down’ plan was forthcoming. Finally, Veritas made a finding of Serious Non-Compliance based on evidence that, despite Veritas’ insistence, the ‘winding down’ of the Pilot Project was started by the Respondent without Veritas’ approval.

[34] Veritas stated that its finding of Serious Non-Compliance was also made “considering that the situation will have profound adverse effects on the rights and welfare of Research Participants.” Veritas directed that a plan to rectify the Serious Non-Compliance be submitted by the Respondent to Veritas for review and approval. The Respondent advised Veritas that it disagreed with Veritas’ characterization of the documents and terminated its engagement with Veritas, “in light of [its] position”, effective immediately.

ANALYSIS OF THE ISSUES

Issue #1: When are Policy Decisions Subject to Judicial Review?

[35] In choosing to wind-down the Pilot Project, Cabinet made a policy decision. The authority to implement the Pilot Project is based on the Crown’s common law spending powers.

[36] The allocation of public resources does not give rise to enforceable rights on judicial review: See Hamilton-Wentworth (Regional Municipality) v. Ontario (Minister of Transportation) (1991), 2 O.R. (3d) 716 (Div. Ct), at paras. 43-44, leave to appeal dismissed [1991] O.J. No. 3201 (C.A.) and Apotex Inc. v. Ontario (Minister of Health) (2004), 73 O.R. (3d) 1 (C.A.), at paras. 33-37, 39-40, leave to appeal refused [2005] S.C.C.A. No. 8.

[37] In Hamilton-Wentworth, at paras. 43-47, the Minister of Transportation refused to fund the building of an expressway despite the government’s agreement almost 20 years earlier to fund the project. The Applicant alleged that the cancellation of funding was based on environmental grounds, which were extraneous to the purposes of the relevant statute. The Court found that Cabinet’s decision not to fund the expressway was a policy decision that was not subject to judicial review. In so doing, it held (at paras. 42-44) that:

The government has the right to order its priorities and direct its fiscal resources towards those initiatives or programs which are most compatible with the policy conclusions guiding that particular government's action. This was simply a statement of funding policy and priorities and not the exercise of a statutory power of decision attracting judicial review.

While it would appear that in basing its decision on environmental concerns the government is ignoring the statutory framework established to deal with environmental matters that does not affect its jurisdiction to make the decision in question. Such a decision is not subject to judicial review. It is in substance a decision for the disbursement of public funds. It has been a constitutional principle of our parliamentary system for at least three centuries that such disbursement is within the authority of the legislature alone. The appropriation, allocation or disbursement of such funds by a court is offensive to principle.

As was said by Lush J. in R. v. Treasury Lords Commissioners (1872), L.R. 7 Q.B. 387, at p. 402:

I think that the applicants have failed to make out that which is essential to entitle them to a writ of mandamus, namely, that there is a legal duty imposed upon the Lords of the Treasury -- a duty as between them and the applicants -- to pay over this sum of money.

[38] Government cannot be required by the court to make or continue to fund an expenditure, as the distribution of government funds is a political not a judicial function: See Re Metropolitan General Hospital and Minister of Health (1979), 25 O.R. (2d) 699 (H.C.), at paras. 10-13.

[39] Moreover, the fact that funds were provided in the past does not mean government must continue to offer the same level of service nor does the decision to reduce or eliminate funding alone, create enforceable rights: See St. Joseph Island Hospital Assn. (c.o.b. Matthews Memorial Hospital Assn.) v. Plummer Memorial Public Hospital, [1996] O.J. No. 4663 (C.J. (Gen. Div.)), at paras. 39-40.

[40] This is because courts have no power to review the policy considerations which motivate Cabinet decisions. The responsibility for the management of public funds rests with the government and not the court, as does the correctness of the government’s decisions and policies: See: Apotex, at para. 39.

[41] For this reason alone, the Application is dismissed.

Issue #2: Does this Decision alter individual rights, obligations or legitimate expectations?

[42] The Applicants submit that although policy decisions are not usually justiciable, judicial review is nonetheless appropriate in this case as the decision affects their financial interests, they rely on the Basic Income payments, and the decision to cancel has adversely affected their well-being. They submit that an application for judicial review is appropriate to protect their legitimate rights and expectations.

[43] We do not agree.

[44] A motion to quash is only available when the decision at issue:

a. alters the person(s)’ rights or obligations that are enforceable in private law, or

b. deprives the person(s) of a benefit (i) she had been given and legitimately expects to continue to enjoy pending receipt of rational grounds for withdrawing it and an opportunity to comment; or (ii) for which assurance has been given that the benefit or advantage would not be withdrawn without first having an opportunity to advance reasons why they should not be withdrawn. (See: Black v. Canada (Prime Minister) (2001), 54 O.R. (3d) 215 (C.A.), at paras. 44, 47-51; Pharmaceutical Manufacturers Assn. of Canada v. British Columbia (Attorney General) (1997), 149 D.L.R. (4th) 613 (B.C.C.A.), at paras. 27-28)

[45] In this case, the Applicants do not seek private law remedies such as damages for breach of contract or for negligence. They seek only to quash the decision to cancel the Pilot Program.

[46] Nor does the Respondent’s decision deprive the Applicants of a “legitimate expectation” within the meaning of the law. There is no legitimate expectation to be consulted on policy decisions to fund. Nor is there any obligation to hold public hearings or consult with stakeholders: See Gigliotti v. Conseil d’Administration du College des Grands Lacs (2005), 76 O.R. (3d) 561 (Div. Ct.), at paras. 62-63 and Canadian Union of Public Employees v. Ontario, 2018 ONCA 309, at para. 8, affirming 2017 ONSC 4874.

[47] As Nordheimer J. (as he then was) noted: “While it may sometimes seem unfair when rules are changed in the middle of a game; that is the nature of the game when one is dealing with government programs.” See Skypower CL I LP et al. v. Minister of Energy (Ontario) et al., 2012 ONSC 4979 (Div. Ct.), at para. 84.

[48] The Applicants point to the decision in Tesla Motors Canada ULC v. Ontario (Ministry of Transportation), 2018 ONSC 5062, where the Court held that the government’s decision to implement a wind-down of a subsidy program wrongfully singled out Tesla. Tesla is, however, distinguishable from the case before us as the court was not being asked to review the government’s decision to stop funding the electric car subsidy program. Rather, the decision in Tesla involved the regulatory details as to how a winding down program was going to operate under a statutory scheme. This brought the decision out of the realm of a broad policy decision and into the realm of a reviewable administrative implementation decision for which Tesla had a legitimate expectation of consultation.

[49] As such this ground of review must fail.

Issue # 3: Was the Decision Irrational or in Bad Faith?

[50] The Applicants further submit that the Respondent’s decision to cancel the Pilot Project was irrational and in bad faith and should therefore be quashed.

[51] However, policy decisions taken without consultation do not constitute bad faith because there is no right to procedural fairness or any legitimate expectation to be consulted on policy decisions: See Canadian Union of Public Employees v. Ontario, at para. 8. To the extent that contracts are breached in so doing, governments are permitted to change government policy subject to private law remedies.

[52] Moreover, the Applicants concede that comments by politicians in the Legislature are not admissible to prove improper purpose as public declarations are not credible sources of government intention though they “represent, no doubt, the considered views of the speakers, at the time they were made.” See: Reference re Upper Churchill Water Rights Reversion Act, 1980, [1984] 1 S.C.R. 297, at para. 31.

[53] The Applicants have commenced a class action in which they seek private law remedies. In this application for judicial review they only ask the court to quash the decision cancelling the Pilot Project. Because the decision to cancel the Pilot Program was a core policy decision made by the Respondent based on political considerations or electoral expediency, the Court has no authority to grant that request.

Issue #4: Does this Court have the authority to Grant the Order to Quash?

[54] An order to quash the decision cancelling the Pilot Program would inevitably result in a further allocation of funds to the Pilot Program.

[55] The Respondent cannot be required to make a particular expenditure, since an order for judicial review cannot compel a particular result, such as the payment of funds, the conduct of research, or the continuation of a program. (See Metropolitan General Hospital, at paras. 9-10).

CONCLUSION

[56] The Applicants made clear and cogent submissions in respect of:

a. The importance of the Pilot Project in collecting data to better understand the effect of a guaranteed annual income on those who are most vulnerable, and

b. The harm the Applicants say they suffered and their concern about the decision and the effect of the decision on their futures and others like them.

[57] However, the Pilot Project is a government funding decision which does not give rise to individual rights enforceable on judicial review. This Court has no power to review the considerations which motivate a Cabinet policy decision. As such, the decision to cancel the Pilot Project is not justiciable.

[58] Moreover, the inevitable effect of an order to quash the decision to cancel the Pilot Project would require the Respondent to continue funding, which, it is agreed, this Court has no authority to do. The distribution of government funds per se is a political not a judicial function.

[59] For these reasons, the Application is dismissed.

[60] This order has no effect on the Applicants’ class action for damages for breach of duty of care, breach of contract and/or other private law remedies. This order only addresses the question of whether the court can quash the government’s decision.

[61] Given the nature of this proceeding and in view of the agreement between the parties, we make no order as to costs.

___________________________ Thorburn J.

Reid J.

Myers J.

Date of Release: February 14, 2019