I INTRODUCTION II JUDICIAL COMPETENCE AND RESOURCE ALLOCATION I. Constitutional Competence II. Institutional Competence III RESOURCE ALLOCATION AND POSITIVE RIGHTS CLAIMS I. Structural Reform Litigation II. Positive Rights Claims and Fundamental Freedoms IV ECONOMIC CONSIDERATIONS AS JUSTIFICATORY CRITERIA UNDER THE OAKES TEST I. Newfoundland (Treasury Board) v NAPE II. Health Services & Support-Facilities Subsector Bargaining Association v British Columbia III. Synopsis V JUDICIAL DEFERENCE AND RESOURCE ALLOCATION AT THE REMEDIAL STAGE OF CHARTER REVIEW I. Underinclusive Benefit Schemes and Judicial Intervention under s. 52(1) II. Retroactive versus Prospective Remedies under s. 52, Constitution Act, 1982 III. Public Law Damages for Charter Violations under s. 24(1): The Ward Framework i. The Ward Framework ii. The Appropriateness of Charter Damage Awards VI CONCLUSION I INTRODUCTION
A fascinating subject area in Canadian constitutional law concerns the judicial competence to order the allocation of public resources. A related question concerns the legitimacy of judicial intervention in the legislative balancing of interests expressed in the allocation of resources towards a given policy objective. Broadly stated, these questions may be seen as iterations of a broader debate regarding the judicial role in a liberal democracy. On the one hand, courts entrusted with the guardianship of rights and values must confront the "counter-majoritarian difficulty" of overturning the democratic will in the name of constitutional supremacy. (1) On the other, judicial enforcement of constitutional documents must be reconciled with the practical limits of democratic governance, and resist usurping the powers and functions of elected branches of government. Balancing the judiciary's rights-protecting role with the principle of Parliamentary supremacy is particularly difficult when confronted with issues of resource allocation, which is traditionally reserved to the legislatures.
Fiscal considerations play a significant role in judicial review under the Canadian Charter of Rights and Freedoms. (2) Resource allocation issues typically trigger concerns of institutional and constitutional competence, affecting the level of judicial deference exercised on Charter review. (3) This tendency has been especially apparent in the Supreme Court of Canada's jurisprudence under the Chief Justiceship of Beverley McLachlin. In this article, the author reviews three distinct ways in which fiscal considerations have influenced the McLachlin Court's deference in Charter review. First, deference should be expected where the financial impact of recognizing a positive right under the Charter would be significant. (4) This can arise where the result of affirming a positive rights claim would dramatically alter existing institutions or programs, necessitating considerable resource allocation. Second, deference will arise where the provisions of impugned legislation are the result of polycentric decision-making by the legislature, and/or where fiscal impact is cited as a justification for the limitation of a protected right. (5) The Court has accepted allocative priorities as potentially acceptable grounds for the infringement of a Charter right or freedom, which assume particular significance at the minimal impairment stage of the Oakes test. (6) Third, the potential fiscal impact of an adverse judicial decision has also played a role in the determination of judicial remedies. (7) The task of devising an appropriate and just remedy is necessarily confronted with the proper limits of the judicial role, especially where the remedy sought involves the distribution of public resources.
The author's review of relevant case law from the McLachlin Court suggests that an enriched understanding of the judicial process of Charter review requires engaging with the fiscal dimensions of rights protection. The adjudication of Charter rights claims must be understood not only in regards to the specific infringement alleged, but also with a view to judicial policy concerns including legitimacy and democratic accountability. The author further contends that the McLachlin Court's deferential approach to resource allocation issues is sensible. An approach that forces governments to justify rights infringements involving fiscal considerations is preferable to conceiving such issues as non-justiciable and creating a "Charter-free zone" of legislative activity. This approach also reconciles two pressing imperatives in Canada's liberal democracy: respecting the separation of powers, and affirming the supremacy of constitutional rights.
The exploration of these issues will proceed in four parts. As an introduction to the discussion of deference and fiscal impact, Part II will examine the distinct constitutional and institutional competence concerns arising in the judicial allocation of economic resources. The three following Parts identify the nexus between fiscal impact and the judicial deference exercised on Charter review. Part III highlights the judicial reluctance to recognize positive rights claims under the Canadian Charter where the result would create significant economic obligations on the legislative branch. Part IV then identifies fiscal considerations as key justificatory criteria in the Oakes analysis, and especially at the minimal impairment stage. Finally, Part V will illustrate potential fiscal impact as a central factor for deference at the remedial stage of Charter review. Three examples will be canvassed: remedies for underinclusive government benefits programs, retroactive remedies, and Charter damages for state violations of protected rights and freedoms. The overall analysis demonstrates the delicate judicial balancing of competing constitutional and democratic values, and the manner in which economic concerns may be influential at all stages of Charter review.
II JUDICIAL COMPETENCE AND RESOURCE ALLOCATION
The issue of constitutional competence assumes particular prominence in the debate on the limits of judicial intervention in the allocation of economic resources. (8) In defining the extent of its constitutional jurisdiction, the Court has affirmed its appreciation for legislative exclusivity over "the purse strings of government," and the corresponding ability to "authorize the spending of public funds." (9) Accordingly, claims inviting the Courts to interfere with this traditionally legislative field of activity immediately trigger competence concerns. The question of the judicial ability and extent to intervene in the allocation of public funds "raises troubling implications that strike to the heart of the constitutional relationship between the judicial and other branches of government in [Canada's] constitutional democracy." (10)
The fundamental constitutional postulate (11) reserving the allocation of economic resources to the legislative and executive branches is captured under the Auckland Harbour Principle. (12) According to this principle, the judiciary is prohibited from authorizing the disbursement of public funds from the government's Consolidated Revenue Fund. (13) Exceptions to this constitutional principle were reaffirmed in Ontario v Criminal Lawyers' Association of Ontario. First, the judiciary may only order the disbursement or allocation of public funds under statutory authority. (14) Absent such authorization, the Court's jurisdiction remains limited by the separation of powers found in the Canadian constitutional structure, and by the legislatures' institutional roles and capacities. (15) The Criminal Lawyers majority also left open the possibility that the disbursement of funds could find legal authority where the Court is charged with evaluating the constitutional challenge of a law or statutory benefit scheme. (16) Presumably, such challenges would be brought under the Charter. The potential judicial allocation of public funds in Charter litigation must therefore be understood within the aforementioned constitutional competence concerns, as well as the institutional concerns examined below.
The question of judicial deference on issues of resource reallocation extends beyond the concerns of legal and constitutional authority. Quite apart from, but often related to, constitutional competence, institutional competence is a strong justification for judicial deference on the disbursement of public funds. This is because "courts are ill-equipped to decide policy matters concerning resource allocation." (17) Judges recognize that the limits of judicial power are imposed not only by the Constitution itself, but also by the limitations of their own capacities as expert jurists. Judicial capacity for authoritative legal analysis is not necessarily co-terminus with expertise in public administration (18) or economic policy, and the question of deference is only reaffirmed where the knowledge and capacity required is held by the elected branches of government. Thus, "courts must be cautious not to overstep the bounds of their institutional competence" on judicial review. (19)
This suggests a close interaction between the distinct principles (20) of constitutional competence and institutional competence. Indeed, whereas an inquiry into institutional competence must necessarily be prefaced by an inquiry into constitutional competence, the latter is insufficient to determine whether the Court may interfere with the legislative allocation of public funds. In other words, constitutional competence does not automatically answer the question of whether the Court is institutionally competent to resolve a given claim, or to remedy the infringement of a Charter violation. Rather, "[b]ecause their legitimacy as decision makers depends on the nature of courts, judges have to tailor their decision making to situations where their institutional strengths are present." (21) The...