2. Qs & As

Prohibition – Promotion of Antisemitism

Federally Appointed Judges and Prothonotaries

Repeal of CPR’s 1880 Tax Exemption

Prohibition – Promotion of Antisemitism (Criminal Code amendments)

Judicial Compensation

Judicial Resources

Prothonotaries

Repeal of CPR’s 1880 Tax Exemption

Prohibition – Promotion of Antisemitism (Criminal Code amendments)

Q 1 Why is the Government proposing this change now?

The legislative amendments are proposed in response to an alarming rise in antisemitism and Holocaust denial in Canada and around the world. The reforms would create a new offence that prohibits the communication of statements, other than in private conversation, that wilfully promote antisemitism by condoning, denying or downplaying the Holocaust. These reforms would complement the Minister of Housing and Diversity and Inclusion budget item which provides $20 million to support the building of a new Holocaust Museum in Montreal.

Q 2 How would the reforms impact freedom of expression?

The offence targets the wilful promotion of antisemitism by condoning, denying or downplaying the Holocaust. Freedom of expression will be protected through the requirement of “wilful” or “intentional” communication and through the availability of the existing hate propaganda defences for legitimate communications.

Q 3 Why is the Government creating an offence targeting antisemitism/Holocaust denial and not other forms of hate crimes (such as harms inflicted on Indigenous peoples through residential schools, the mass murder of Armenians by Turks during World War I, the 1932-1933 Holdomor or Terror Famine in Ukraine, and China’s current treatment of the Uyghurs)?

The proposed reforms focus on Holocaust denial, as it is one that is most closely associated with fascism and far-right extremism, which have gained grounds in recent years.

Judicial Compensation

Q 4 Why are these amendments necessary?

These amendments implement the December 29, 2021, Response of the Government to the Aug 30, 2021, Report of the 2020 Judicial Compensation and Benefits Commission. The Commission was established under section 26 of the Judges Act to inquire into the adequacy of judicial compensation, consistent with the requirement established by the Supreme Court of Canada in the PEI Judges Reference. That decision established a requirement that compensation of judges must be subject to periodic review by an “independent, objective and effective” commission.

The Government Response accepted all of the Commission’s recommendations. The Constitution requires that changes to the compensation of superior court judges be made by Parliament (in this case, through amendments to the Judges Act and the Federal Courts Act).

Q 5 Do these amendments have any financial implications? If so, how much do they cost?

The changes to compensation and benefits will have an incremental cost of up to $26.3 million in total from 2020-21 to 2025-26, and $4.8 million per year ongoing thereafter.

Q 6 How much do judges and prothonotaries make?

April 1, 2022, annual judicial salaries were:

Q 7 What is the Industrial Aggregate Index (IAI)?

This is the indexation factor used for judicial salaries. IAI is the annual rate of change in aggregate Average Weekly Earnings established by Statistics Canada. Statutory indexation generally serves to protect judicial salaries from erosion by inflation between adjustments by Parliament. When the Judges Act was amended in 1981, to provide for statutory indexation, the Industrial Aggregate Index was chosen in preference to the Consumer Price Index (CPI), since it was income-based and was thought to more accurately reflect the response of salaries and wages to inflationary pressures than the CPI.

Q 8 How many judges are there? How many of them are women?

As of April 1, 2022, there were 1189 federally-appointed judges in office. Of those, 44 percent (524 of the 1189) were women.

Judicial Resources

Q 9 What do these amendments do?

These amendments create authority to appoint additional superior court judges to respond to demonstrated and projected workload pressures and delays. They also address increasing judicial management responsibilities in the Court of Queen’s Bench for Saskatchewan and the Court of Queen’s Bench of New Brunswick. More specifically, these amendments:

The amendments also create the position of prothonotary for the Tax Court of Canada. Budget 2022 set aside funding for two Tax Court of Canada prothonotaries in the fiscal framework.

Q 10 Why are new judicial positions being created for the Federal Court of Appeal, Quebec Court of Appeal, Ontario Superior Court of Justice, British Columbia Supreme Court, Saskatchewan Court of Queen’s Bench, Alberta Court of Queen’s Bench, Nunavut Court of Justice, and Tax Court of Canada?

Additional judges are being authorized in order to help these courts better manage increased caseloads, based on demonstrated workload pressures.

Q 11 Why are Associate Chief Justices being added to the Court of Queen’s Bench for Saskatchewan and Court of Queen’s Bench of New Brunswick?

Adding associate chief justice positions to these courts will support the long-term efficient and effective administration of justice in the Saskatchewan and New Brunswick. In Saskatchewan, an Associate Chief Justice will assist with the efficient management of the court, taking into account in particular the structure of the court with two main centres in Regina and Saskatoon. In New Brunswick, an Associate Chief Justice will provide particular leadership to the Family Division.

Q 12 What is the cost of these 24 new positions?

Budget 2022 announced $83.8 million over five years for these additional resources, beginning in 2022-23, and $17.8 million per year ongoing.

Q 13 Why are new positions being given only to a few courts?

The resources included in Budget 2022 respond to demonstrated need in various courts. Multiple factors impact court operations, such as volume and complexity of incoming cases, court procedures, and availability of courtrooms and technology. For those courts that experience sustained pressures, there will be opportunities to support future requests for additions to complement.

Prothonotaries

Q 14 What are prothonotaries?

Prothonotaries are judicial officers appointed by the Governor in Council, who hold office until the age of 75 and are removable only for cause. Their salary is established in the Judges Act at 80% of the annual salary of a puisne (non-management judge) of the Court to which they belong. The office of prothonotary currently exists in the Federal Court, where prothonotaries are responsible for performing a range of functions, including case management duties and the hearing of interlocutory matters.

Q 15 Why create the office of prothonotary of the Tax Court of Canada?

Adding prothonotaries to the Tax Court of Canada is a cost-effective way to enhance access to justice to the public. Prothonotaries will free judges to focus on complex matters, while prothonotaries specialize in addressing less complex cases and develop efficiencies in less complex matters, such as matters brought under the Court’s Informal Procedures. Yearly savings of approximately $230,000 would be expected for each prothonotary when compared to the cost of appointing a judge to perform the same tasks.

Q 16 What will Tax Court of Canada prothonotary do specifically?

The proposed amendments would empower the Tax Court of Canada Rules Committee, which is chaired by the Court’s Chief Justice, to specify the powers, duties and functions of prothonotaries. The Rules Committee is empowered by Parliament with setting rules that guide the practice and procedure of the Court. Given its in-depth knowledge of the Court and its practice, the Rules Committee is best placed to determine the functions of the prothonotaries.

Q 17 What is supernumerary prothonotary?

When a prothonotary meets certain conditions related to age and years in office, they can elect supernumerary status. A supernumerary prothonotary is a prothonotary who has made this election. Supernumerary prothonotaries perform the same functions and receive the same salary as prothonotaries, but have a reduced workload. This mirrors arrangements already in place for judges.

Q 18 Why is the office of supernumerary prothonotary being created?

Like the office of supernumerary judge, the office of supernumerary prothonotary would allow courts to retain experienced prothonotaries to deal with more complex matters, while also providing continuity to the court, mentoring to new prothonotaries, and additional flexibility in scheduling to chief justices. This new office will provide benefits in terms of court resources as well: supernumerary prothonotaries, who may otherwise choose to retire and begin receiving an annuity, would continue to contribute to the court’s workload, while new prothonotaries can be appointed into the vacancies created when prothonotaries elect supernumerary status.

Q 19 Why is the title “prothonotary” being changed to “associate judge”?

The title “prothonotary” is not well known and is often misunderstood. Changing the title for these judicial officers to “associate judge” provides clarity and would be more broadly understood by court users. It also appropriately reflects the responsibility and importance of the office.

Repeal of CPR’s 1880 Tax Exemption

Q 20 Is this legislation required?

Yes: it ensures that the federal government will not be exposed to a claim in respect of the constitutional amendment repealing s. 24 of the Saskatchewan Act. The constitutional amendment was made by proclamation of the Governor General, as authorized by resolutions of the Legislative Assembly of Saskatchewan, the House of Commons and the Senate.

The CPR’s 1880 contract had provided that CPR’s tax exemption would apply to limit provincial taxation powers in the western provinces created or expanded after the contract came into force.

The legislation gives further effect to the 1966 agreement between the CPR and the government of the day whereby the CPR, which was already paying all federal taxes, agreed that the federal government could proceed with a constitutional amendment and the legislation to eliminate the exemption.

Q 21 How much money would the government be liable to pay in respect of the repeal of s. 24 of the Saskatchewan Act if a court were to uphold a potential claim by the CPR and this legislation were not enacted?

The Government of Canada believes that the tax exemption is limited in scope and therefore of limited value. However, it cannot ignore the fact that CPR’s claim against Saskatchewan has been described in the Senate as being for as much as $341 million and that amount is just for past taxes. This amount does not include any claims for subsequently incurred taxes or for the future value of a tax exemption.

Q 22 What is the current status of the litigation before the federal and provincial courts?

In respect of the federal claim, CPR has filed an appeal to the Federal Court of Appeal from the 2021 decision of the Federal Court, which dismissed their claim. CPR has also appealed the award of costs to the Crown.

CPR’s claim in the Saskatchewan Court of Queen’s Bench is still in progress.

Both of CPR’s claims against Alberta and Manitoba are being held in abeyance pending the outcome of the Saskatchewan case.

Canada is not a party to the provincial litigation.

Q 23 Why has this issue come up now?

This amendment is one aimed at preserving tax fairness and fiscal integrity, and is well-suited to this Budget Implementation Act. The amendment addresses a long-standing historical “loose end” that was raised as a consequence of the recent repeal s. 24 of the Saskatchewan Act and of the decision of the Federal Court issued in late 2021 dismissing the CPR’s claim against the federal government.

Q 24 Why is the legislation retroactive to 1966?

The date this amendment is tied to the effective date of the repeal of s. 24 of the Saskatchewan Act as chosen by Saskatchewan. It is also the date of the letter from the CPR to the then Minister of Transport indicating CPR’s willingness to forego the tax exemption.

Q 25 Isn’t it the case that the Federal Court held that the Contract could apply to the federal taxation of CPR’s capital?

Yes, but Canada was successful in the Federal Court including on capital tax where the Federal Court specifically refused to grant any relief in respect of the capital tax claim.

Q 26 Isn’t it the case that the Federal Court disagreed with the Government that CPR’s 1966 agreement applied to all taxes?

In our view a 1966 agreement put an end to the tax exemption in its entirety. CPR has paid federal tax for almost 50 years as at 1966 and for more than 50 years since then. The proposed amendment confirms that CPR has been a federal taxpayer for over a hundred years.

Q 27 Don’t the proposed amendments remove vested rights? Is that appropriate?

Legislatures can terminate contract rights (Wells v NewfoundlandFootnote 1) and without compensation (Clitheroe v OntarioFootnote 2).

The Supreme Court has affirmed that no one has a vested right in having tax laws remain unchanged. In Gustavson DrillingFootnote 3 the Supreme Court confirmed that, “No one has a vested right to continuance of the law as it stood in the past; in tax law it is imperative that legislation conform to changing social needs and governmental policy.”

Further, no court has found in favour of CPR regarding its various claims. While legislative amendments do sometimes affect vested rights, here it was recognized by the CPR, in 1966 that a perpetual federal and provincial tax exemption was no longer appropriate in light of modern rail network and regulatory policy. We see this amendment as a complete resolution of the federal claim.

Q 28 Is there a concern that this legislation could be viewed as interference in the judicial process between the CPR and the federal government?

Statutes, through the principle of parliamentary sovereignty, are occasionally used to resolve litigious disputes. Statutory alterations, even to federal-provincial agreements, have been upheld as an exercise of parliamentary sovereignty (Reference re Canada Assistance PlanFootnote 4). “Retroactive legislation or legislation extinguishing causes of action, is not incompatible with the rule of law, judicial independence or the separation of powers” (BC v Imperial TobaccoFootnote 5).

Q 29 What impact will these amendments have on the current court case?

The amendments would be brought to the attention of the Courts as the appeals work their way through the judicial process.

Q 30 What is the impact of this amendment on Alberta and Manitoba?

This statutory amendment addresses, first and foremost, any potential liability accruing to the Federal Government including exposure resulting from the repeal of s. 24 of the Saskatchewan Act.

The amendment removes the tax exemption, which was subsequently incorporated by reference in the Alberta Act and the Manitoba Boundaries Extension Act, though it does not formally repeal the incorporating provisions found in those Acts.

The government has expressed its willingness to act in respect of those legacy provisions should the respective provinces indicate their desire for amendments similar to the Saskatchewan Act amendment.