A-442-78
Macdonald Tobacco Inc. (Applicant)
v.
Canada Employment and Immigration Commis
sion (Respondent)
and
The Queen (Mis -en-cause)
Court of Appeal, Pratte and Ryan JJ. and Hyde
D.J.—Montreal, January 31 and February 2,
1979.
Judicial review — Jurisdiction — Unemployment insurance
— Application to set aside respondent's decision to dismiss
appeal stemming from officer's rescission of premium reduc
tions for three years prior to application under his consider
ation — Whether or not Commission a federal tribunal —
Whether or not decision made under s. 65 of the Regulations,
and more precisely those made by an officer, are final quasi-
judicial decisions or administrative decisions that may be
altered by the body that handed them down — Unemployment
Insurance Act, 1971, S.C. 1970-71-72, c. 48, ss. 62, 64 —
Unemployment Insurance Regulations, SOR/73-16, s. 65 —
Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, ss. 2, 28.
Applicant is seeking to set aside, pursuant to section 28 of
the Federal Court Act, a decision handed down by respondent
Commission in the exercise of the powers conferred on it by
section 65 of the Unemployment Insurance Regulations. Each
of applicant's applications for premium reductions for the years
1974, 1975 and 1976 had been allowed by an officer of the
Commission in accordance with section 65(2) of the Regula
tions, but the Commission officer examining the application for
1977 found that the insurance plan covering applicant's
employees did not meet the requirements of the Regulations,
and never had. The application for 1977 was dismissed, and the
earlier decisions relating to 1974, 1975 and 1976 were rescind
ed. Applicant challenged the officer's decision affecting 1974,
1975 and 1976, and appealed unsuccessfully to a review panel
and then to the Commission itself. It is the Commission's
dismissal of that appeal which appellant is challenging.
Held, the application is allowed. Respondent Commission is
a federal tribunal within the meaning of section 2 of the
Federal Court Act. Decisions made pursuant to section 65 of
the Regulations are more than purely administrative decisions
for they affect the rights of employers concerned; they must be
made in accordance with precise legal standards; and finally,
they are made by persons specially authorized to that end.
Accordingly, they appear to be final, quasi-judicial decisions.
When an officer makes a decision pursuant to section 65, he is
not performing the administrative duties ordinarily delegated to
him by the Commission. He is exercising a power which comes
to him, not from the Commission, but from section 65 itself. If
he errs and decides incorrectly, he can no more correct his error
than could a judge in similar circumstances.
APPLICATION for judicial review.
COUNSEL:
Louis Lemire and Peter Richardson for
applicant.
Gaspard Côté, Q.C. for respondent and
mis -en-cause.
SOLICITORS:
Doheny, Mackenzie, Grivakes, Gervais &
LeMoyne, Montreal, for applicant.
Deputy Attorney General of Canada for
respondent and mis -en-cause.
The following is the English version of the
reasons for judgment delivered orally by
PRATTE J.: Applicant is seeking to set aside,
pursuant to section 28 of the Federal Court Act,
R.S.C. 1970 (2nd Supp.), c. 10, a decision handed
down by respondent Commission in the exercise of
the powers conferred on it by section 65 of the
Unemployment Insurance Regulations, SOR/73-
16.
In order to understand this case one must be
familiar with certain provisions of the Unemploy
ment Insurance Act, 1971, S.C. 1970-71-72, c. 48,
and Regulations. This Act provides for the pay
ment of two types of premiums: employee's premi
ums, which must be paid by anyone holding insur-
able employment, and employer's premiums,
which must be paid by his employers. Under sec
tion 62 the Commission must set the rates of
premium each year, subject to approval by the
Governor in Council. Section 64 provides, how
ever, that an employer may be entitled to a reduc
tion of the premium in the event that his
employees are covered by an insurance plan which
has the effect of reducing the benefits payable
under the Act. Section 64 reads in part as follows:
64. (1) Unless another rate of premium is provided for a
year pursuant to this section, the employer's premium to be
paid in a year by an employer of an insured person shall be 14
times the employee's premium for that year.
(4) The Commission shall, with the approval of the Gover
nor in Council, make regulations to provide a system for
reducing an employer's premium payable under this Act when
the payment of any allowances, monies or other benefits under
a plan that covers insured persons employed by the employer,
other than one established under provincial law, would have the
effect of reducing the benefits that are payable to such insured
persons under the Act, in respect of unemployment caused by
illness or pregnancy, if insured persons employed by the
employer will benefit from the reduction of the employer's
premium in an amount at least equal to five-twelfths of the
reduction.
(5) The Commission shall, with the approval of the Gover
nor in Council, make regulations to provide a system for
reducing the premium payable under this Act when the pay
ment of any allowances, monies or other benefits under a
provincial law to insured persons in respect of sickness or
pregnancy would have the effect of reducing or eliminating the
benefits that are payable under this Act to such insured persons
in respect of unemployment caused by illness or pregnancy.
(6) For the purposes of subsections (4) and (5), the Commis
sion may, with the approval of the Governor in Council, make
regulations
(a) prescribing the manner and time for making an applica
tion for a premium reduction;
(b) prescribing the standards that must be met by a plan to
qualify for a premium reduction and the time during which
such plan must be in effect;
(c) prescribing the method for determining the amount of
reduction for plans of given standards and the use to be made
of actuarial calculations and estimates;
(d) providing for the making of decisions relating to premi
um reduction and appeals therefrom in cases of dispute;
(e) prescribing the manner in which the insured persons will
be reported by employers to the Department of National
Revenue, Taxation; and
(j) generally, providing for any other matters necessary for
carrying out the purposes and provisions of subsections (4)
and (5).
Exercising the regulatory power conferred on it
by subsection 64(6), the Commission enacted
sections 58 et seq. of the Unemployment Insurance
Regulations. These sections provide, first, that an
employer whose employees are covered by an in
surance plan meeting certain requirements is en
titled to a reduction of the premium. Section 65
then provides that an employer wishing to benefit
from such a reduction must submit an application.
This provision reads as follows:
65. (1) Every application for a reduction of the employer's
premium referred to in subsection 59(1) or 60(1) shall be in a
form approved by the Commission, be accompanied by such
documents and information as the Commission may require
and be made
(a) on or before the 30th day of September next before the
first day of the first year for which a reduction is applied for;
or
(b) at such time as the Commission may direct before the
first day of each subsequent consecutive year for which a
reduction is applied for.
(2) Upon receiving an application for a reduction of an
employer's premium, an officer of the Commission shall decide
whether or not a reduction shall be made.
(3) An employer may, within thirty days of the mailing of a
notice of a decision made pursuant to subsection (2), or within
such further time as the Commission may allow, apply for a
review of the decision by a review panel consisting of officers
designated by the Commission.
(4) An employer who is not satisfied with the decision of the
review panel referred to in subsection (3) may appeal to the
Commission for a final determination of the question.
I come now to the facts which gave rise to the
case.
Every year since 1973 applicant has applied for
a reduction of its premiums in accordance with
section 65 of the Regulations. Thus, it submitted
applications for 1974, 1975 and 1976. Each of
these applications was allowed by an officer of the
Commission in accordance with subsection 65(2).
In 1976 applicant submitted another application
for a reduction, this time for 1977. The Commis
sion officer who examined this application found
that the insurance plan covering applicant's
employees did not meet the requirements of the
Regulations, and never had. He therefore dis
missed the application, and in addition rescinded
the earlier decisions relating to 1974, 1975 and
1976, holding that applicant had not been entitled
to a reduction of its premiums for those years.
Applicant acquiesced in the dismissal of its
application for 1977. There was no doubt that the
insurance plan covering its employees did not meet
the requirements of the Regulations. However,
applicant challenged the decision of the officer
rescinding the decisions affecting 1974, 1975 and
1976, and it first appealed unsuccessfully to the
review panel mentioned in subsection 65(3) of the
Regulations, and then to the Commission itself, as
it was authorized to do by subsection 65(4). It is
the decision of the Commission dismissing that
appeal which applicant is now challenging.
Counsel for the applicant maintained that the
Commission's decision was vitiated by an error of
law, because it affirmed a decision which had been
unlawfully made, since the officer making it was
not entitled to revoke decisions already handed
down for the years prior to 1977. In support of this
argument he cited the well-known rule that, in the
absence of express provisions to the contrary, a
body vested with judicial or quasi-judicial author
ity does not have the power to revise and alter
decisions which it has rendered (see La Cité de
Jonquière v. Munger [1964] S.C.R. 45; Payment
v. Académie de musique de Québec (1935) 59
Q.B. 121; In re 56 Denton Road, Twickenham
[1953] 1 Ch. 51). He argued that the decisions
already made for 1974, 1975 and 1976 were quasi-
judicial decisions, and accordingly could not be
revoked.
Counsel for the respondent, however, argued
that the application should be dismissed because
respondent Commission was not a federal tribunal
within the meaning of section 2 of the Federal
Court Act, and because decisions made pursuant
to section 65 of the Regulations are purely
administrative decisions, which the Court has no
power to review under section 28 and which, in
any case, lack the finality characteristic of judicial
decisions.
I think it is clear that respondent Commission is
a federal tribunal within the meaning of section 2
of the Federal Court Act. I do not see how it is
possible to maintain the contrary by relying, as
does counsel for the respondent, on the provision of
the Act (S.C. 1976-77, c. 54, s. 10) which states
that the Commission "is for all purposes an agent
of Her Majesty in right of Canada and its powers
may be exercised only as agent of Her Majesty in
such right". In my view, the fact that the Commis
sion is an agent of Her Majesty does not prevent it
from being within the definition given by section 2
to the phrase "federal board, commission or other
tribunal", and being a "body ... exercising ...
jurisdiction or powers conferred by or under an
Act of the Parliament of Canada ...".
The argument that the decision a quo cannot be
reviewed pursuant to section 28, because it is a
purely administrative decision "not made on a
judicial or quasi-judicial basis", also appears to me
to be without foundation. Even if the power of the
Commission to decide an appeal pursuant to sub
section 65(4) of the Regulations were an adminis
trative power, the exercise of that power would
still be, in my opinion, "made on a judicial or
quasi-judicial basis", that is, in keeping with the
procedural requirements imposed by the principles
of natural justice.
The most difficult question raised by this case is
whether decisions made under section 65 of the
Regulations, more precisely those made by an
officer in accordance with subsection (2) of that
section, are final, quasi-judicial decisions or
administrative decisions that may be altered at any
time by the body which handed them down. Coun
sel for the respondent argued that these are
administrative decisions, which are no more judi
cial or final than the Minister's decision to assess a
taxpayer under the Income Tax Act (see Pure
Spring Co. Ltd. v. M.N.R. [1946] Ex.C.R. 471).
The function of an officer deciding on an applica
tion for a reduction pursuant to subsection 65(2) is
solely, he emphasized, to ascertain whether the
insurance plan covering the applicant employer's
employees is in accordance with the requirements
of the Act: if it is, the officer must allow the
reduction; if it is not, he must deny it. This
absence of discretion indicates—so runs counsel
for the respondent's argument—that the decision
was of a purely administrative nature.
It is true that the officer making a decision
pursuant to subsection 65(2) does not enjoy any
discretion. However, that does not help respond
ent's case in any way; rather the contrary, as it is
usual to regard an administrative decision as char
acterized by its discretionary nature, since the
person making it enjoys a discretion which is not
ordinarily conferred on a judge, who decides by
reference to precise, pre-existing rules.
In my opinion, and I arrived at this decision
after a great deal of hesitation, decisions made
pursuant to section 65 of the Regulations are more
than purely administrative decisions. After the
preceding sections of the Regulations have indicat
ed the cases in which an employer is entitled to a
reduction in the premiums, section 65 empowers
certain persons to decide, in each case where an
employer applies for a reduction, "whether or not
a reduction shall be made". Decisions handed
down pursuant to this section affect the rights of
the employers concerned; they must be made in
accordance with precise legal standards; finally,
they are made by persons specially authorized to
that end. Accordingly, they appear to me to be
final, quasi-judicial decisions. When an officer
makes a decision pursuant to section 65, he is not
performing the administrative duties ordinarily
delegated to him by the Commission. He is exer
cising a power which comes to him, not from the
Commission, but from section 65 itself. This power
is that of deciding "whether or not a reduction
shall be made". If he errs and decides incorrectly,
in my view he can no more correct his error than
could a judge in similar circumstances.
I would therefore allow the application, set aside
the decision a quo and return the case to the
Commission for it to be decided on the assumption
that the decision of the officer, revoking the deci
sions relating to 1974, 1975 and 1976, is unlawful.
* * *
RYAN J. concurred.
* * *
HYDE D.J. concurred.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.