1998 Alberta Court of Appeal Decision

Issue 3: Did the trial judge err in finding that the impugned provisions do not discriminate against public schools?

[70] PSBAA and ASBA raise two arguments alleging discrimination under s. 17(2) of the Alberta Act. The first is that public schools are discriminated against because public boards are unable to opt out of ASFF funding scheme. The second is that the Government Organization Act , by giving such wide discretion regarding the payment of grants, potentially permits discrimination.

[71] Section 17(2) reads as follows:

17. Section 93 of The British North America Act, 1867, shall apply to the said province, with the substitution for paragraph (1) of the said section 93, of the following paragraph:-

(2) In the appropriation by the Legislature or distribution by the Government of the province of any moneys for the support of schools organized and carried on in accordance with the said chapter 29 or any Act passed in amendment thereof, or in substitution therefor, there shall be no discrimination against schools of any class described in the said chapter 29.

(a) Opting Out

[72] At trial, PSBAA and ASBA submitted that s. 17(2) was contravened by the scheme set out under the School Act which permits separate but not public boards to opt out of the ASFF.

[73] The trial judge rejected this argument. He did so on three bases. First, he was of the view that s. 17(2) applied only to legislative grants from the province's General Revenue Fund and not to revenues derived from property assessments (i.e., local requisition or the ASFF). Therefore, to the extent that the plaintiffs' discrimination argument centred around access to and the distribution of property taxes, he held that s. 17(2) did not apply. Second, the trial judge held that even if s. 17(2) applied to the distribution of property taxes, the section did not address the means by which the money is raised. Accordingly, it did not matter that some school boards received a portion of their tax revenues directly through local requisition while others did not. Third, relying on Justice Stevenson's decision in Calgary Board of Education v. Alberta (A.G.), [1980] 1 W.W.R. 347 (Alta. Q.B.), he held that the standard for assessing whether there is discrimination ought to be based on fairness, and not differential treatment. Applying this definition of discrimination to the case before him, the trial judge noted that the impugned provisions provided for the distribution of revenues from property assessment base on an equal amount per student basis. He was further of the view that the provisions provided access to grant payments "on identical conditions" (at 40). As a result, he held that there was fair treatment and no infringement of s. 17(2).

[74] On appeal, the parties take exception to the trial judge's finding that s. 17(2) applies only to legislative grants. PSBAA takes the position that s. 17(2) applies beyond government grants to both ASFF monies and property assessment raised by opted out boards. ASBA and ACSTA favour the view that, in addition to legislative grants, the protection afforded by s. 17(2) extends only to ASFF money, not monies requisitioned directly by opted out boards. As an alternative argument, however, ASBA submits that both ASFF money and opted out local assessment money fall within s. 17(2).

[75] Both PSBAA and ASBA also maintain that the trial judge should not simply have looked for discrimination in the per capita number of bottom-line dollars received by school boards. They say he should have gone on to consider whether there was discrimination in the manner in which revenues are distributed and the uses that may be made of those revenues once they are in board coffers. It bears repeating that PSBAA and ASBA premise their arguments on the claim that the restrictions on spending set out in the Framework attach only to the use of ASFF and provincial grant money. Since separate school boards can opt out of the ASFF program and levy taxes directly from ratepayers, their funds are said to be more flexible than those received by public school boards. The result is what PSBAA refers to as "disparate impact inequality".

[76] The trial judge's use of a fairness standard to assess whether there is discrimination is also challenged. ASBA says the standard should be based on differential treatment. It maintains that discrimination arises on the basis that ASFF money is not distributed equally. Moreover, since according to ASBA opted out local requisition does not fall within the purview of s. 17(2), when determining whether there is discrimination, one cannot take those requisitioned funds into account. The Government, ACSTA and PSBAA have no objection to the use of the fairness standard.

[77] It should be noted that even though ACSTA made submissions before us regarding the interpretation of s. 17(2), it did not take a position on whether the trial judge was correct in finding that s. 17(2) was not contravened.

[78] Although the issue was raised at trial, the trial judge did not decide whether the Framework's conditions applied to monies locally requisitioned by opted out separate school boards. Presumably he did not see the need to do so because he was of the view that s. 17(2) did not apply beyond government grants and, in any event, all school boards received property assessment on an equal amount per student basis. What is troubling is his conclusion that, under the impugned provisions, grant payments are available to separate and public boards on identical conditions.

[79] The Framework's conditions, while imposing restrictions on the spending of school board revenues generally, may also be viewed as pre-conditions to obtaining grants from the General Revenue Fund. This is because the failure to follow the spending restrictions can result in a penalty being levied against the grant money available in the following year. If the spending restrictions apply to a broader base o f money for public boards than for opted out boards, then separate and public boards do not receive grants on identical conditions. Accordingly, even if s. 17(2) is limited to government grants from the General Revenue Fund, the determination of whether the Framework's conditions apply to the local property requisition of opted out boards may be fundamental to the determination of the discrimination issue. If the Framework's conditions are not intended to apply to such money, or if they do apply but are unconstitutional as against separate schools under s. 17(l), then there may be discrimination in the distribution of grant monies within the meaning of s. 17(2). In our view, therefore, determining the application of the Framework's conditions vis-A-vis opted out boards, or the impact of any finding that they are unconstitutional, is the next step when analyzing the discrimination issue.

[80] As discussed above, the trial evidence and the fresh evidence introduced on appeal indicate that the Framework's conditions are intended to apply indirectly to the tax monies requisitioned by opted out boards. What remains to be determined is whether it is constitutional under s. 17(l) to restrict separate boards' use of locally requisitioned monies. If not, s. 52 of the Constitution of Canada would apply to make the Framework's conditions, to the extent of the inconsistency, of no force or effect.

(i) Is the Framework Constitutional as Against Separate School Boards?

[81] Separate school supporters have rights that are constitutionally protected by s. 17(l) of the Alberta Act. That provision reads as follows:

17. Section 93 of The British North America Act, 1867, shall apply to the said province, with the substitution for paragraph (1) of the said section 93, of the following paragraph:-

(1) Nothing in any such law shall prejudicially affect any right or privilege with respect to separate schools which any class of persons have at the date of the passing of this Act, under the terms of chapters 29 and 30 of the Ordinances of the North-west Territories, passed in the year 1901, or with respect to religious instruction in any public or separate school as provided for in the said ordinances.

This section protects the denominational rights of separate school supporters and the scope of that protection is set out in the 1901 North-west Territories Ordinances under The School Ordinance , 1901 (N.W.T.), c. 29 and The School Assessment Ordinance, 1901 (N.W.T.), c. 30. Accordingly, there are two questions to be answered. First, under those ordinances, did separate schools have the right to determine, absent government interference, how their locally requisitioned monies would be spent? Second, if they did, does the new funding scheme prejudicially affect that right?

[82] Before addressing these questions, we must deal with ACSTA's claim that the Framework's constitutionality as against separate boards should not be considered by this Court. In this regard, ACSTA raises three objections. First, it asserts that it is premature for this Court to determine whether the Framework can apply to funds received by opted out boards from their declared assessment base because the Government has not yet applied penalties to opted out boards. (Perhaps, thus far, opted out boards have been complying with the Framework's conditions. Or alternatively, it may be that the Government has not yet chosen to enforce its conditions.) ACSTA, therefore, asks that this Court not determine the issue unless and until an opted out board is accused of violating the Framework's terms.

[83] We have some trouble with this objection. It presupposes that a prejudicial effect on s. 17(l) rights can only stem from the imposition of the penalty. We do not agree. The fact that the Government has not yet applied penalties to opted out school boards does not mean that the Framework's restrictions on spending, which are currently in effect, could not themselves prejudicially affect the rights guaranteed by s. 17(l). In our view, the Framework's spending restrictions need not be contravened for a prejudicial effect to be shown. Assuming that separate schools have a right under s. 17(l) to control the use of tax monies, any prejudicial effect would stem directly from the restrictions placed on that right and not from the penalty that could be imposed if the restrictions were violated.

[84] Second, ACSTA submits that it is inappropriate to consider whether the new funding scheme violates the rights guaranteed to separate school ratepayers under s. 17(l) of Alberta Act when the issue at hand relates to an alleged violation of s. 17(2). ACSTA claims that the determination under s. 17(2) ought to be measured in terms of fairness as between public and separate boards and should not focus on the content of separate school rights under s. 17(l). In a third and related objection, ACSTA claims that unequal treatment between public and separate boards that arises as a result of the operation of s. 17(l) rights should not be used as a basis to apply s. 17(2) rights. To support this reasoning, ACSTA relies on the Supreme Court of Canada decisions in Adler v. Ontario (Minister of Education and Minister of Health), 1996] 3 S.C.R. 609 and Reference Re Bill 30, supra. Because this argument, if successful, would significantly undermine the claim of discrimination, it deserves careful analysis.

[85] In Reference Re Bill 30, the Supreme Court considered, inter alia, whether the Charter was applicable to a bill which would implement a policy of full public funding for Catholic separate high schools in Ontario. The appellants argued that Bill 30 contravened ss. 2(a) and 15 of the Charter on the basis that funding was provided for Catholic secondary schools, but not for other secondary schools. Justice Wilson, speaking for the majority of the court, held that the Bill was protected from Charter review whether it was enacted under the combined effect of the opening words of s. 93 and s. 93(3) of the Constitution Act, 1867, or whether it was enacted under s. 93(l) as an exercise of provincial power to return rights constitutionally guaranteed to separate school boards. Her reasoning for immunizing the Bill from Charter scrutiny was based on s. 29 of the Charter. That provision states that nothing in the Charter "abrogates or derogates from any rights or privileges guaranteed by or under the Constitution of Canada in respect of denominational, separate or dissentient schools. " However, from her decision, it is clear that immunity would exist even without s. 29. She said (at 1197-8):

1 have indicated that the rights or privileges protected by s. 93(l) are immune from Charter review under s. 29 of the Charter. I think this is clear. What is less clear is whether s. 29 of the Charter was required in order to achieve that result. In my view, it was not. I believe it was put there simply to emphasize that the special treatment guaranteed by the constitution to denominational, separate or dissentient schools, even if it sits uncomfortably with the concept of equality embodied in the Charter because not available to other schools, is nevertheless not impaired by the Charter. It was never intended, in my opinion, that the Charter could be used to invalidate other provisions of the Constitution, particularly a provision such as s. 93 which represented a fundamental part of the Confederation compromise. Section 29, in my view, is present in the Charter only for greater certainty, at least in so far as the Province of Ontario is concerned.

[86] In Adler, ss. 2(a) and 15 of the Charter were again used to challenge the system of education funding in Ontario. Justice lacobucci, speaking for the majority, rejected the s. 2(a) challenge on the basis that claims to public funding for religious education had to be grounded in s. 93(l). He called that provision "a comprehensive code" of denominational school rights which could not be enlarged through the operation of s. 2(a) of the Charter. He also rejected the s. 15 argument because he saw the funding of separate and public schools as being within the contemplation of s. 93 and, accordingly, the government's decision was immune from Charter review.

[87] Reference Re Bill 30 and Adler suggest that the rights guaranteed to separate schools under the Constitution may trump other sections of the Constitution. However, those cases involved the interaction of the Charter and s. 93 of the Constitution Act, 1867. What we are addressing, is the argument that constitutional provisions of equal application found under the Alberta Act must operate in harmony to give effect to the constitutional compromise achieved in 1905.

[88] But, having regard to the principle that a court should not address a constitutional question where the case does not require it, we find it unnecessary to determine whether the reasoning in Reference Re Bill 30 and Adler applies when the Charter is not involved. Nor do we find it necessary to determine whether s. 17(l) gives separate schools a right to control spending of their locally requisitioned monies, or whether the claw-back provision in s. 159.1(4) of the School Act is unconstitutional. There being no challenge before us that the claw-back offends s. 17(l), we simply assume that it is constitutionally valid, without deciding that issue. And, no evidence was tendered establishing a contextual framework within which to determine whether any rights which separate boards might enjoy to control spending, are prejudicially affected by the application of the Framework. Thus, for the purposes of this appeal, we must assume that the Framework does apply equally to all boards with respect to all funds in their hands.

[89] Should either assumption be challenged the in future, the ultimate conclusions of the majority in this appeal will have to be revisited. In that event, it will be necessary to determine whether any entitlement to keep excess requisitioned funds and to escape the application of the Framework might unfairly discriminate against the public schools under s. 17(2). But having had the benefit of reading the separate reasons of Berger, J.A., we wish to make it clear that for the purposes of this appeal, we have accepted that the clawback is constitutionally valid and that the Framework applies to all Boards. We do not want our decision not to address these issues to be taken as concurrence with his conclusions on these points. These issues are not before us. If raised in the future, these issues will have to be addressed with proper evidence adduced which would allowthis Court to canvass the broad range of issues engaged in contemporary equality and discrimination analysis.

[90] That said, it must be acknowledged that our decision leaves open the unhappy prospect that these issues may have to be relitigated in the future. Such a result is not inevitable however, because the affected parties may decide it is not in their interests to relitigate. We can only assume that a like motivation affected the position adopted by ACSTA in this appeal. But whatever that risk, it is our considered view that it would be untimely for this Court to address these issues in this appeal.

[91] Had we concluded otherwise, and had we agreed with the conclusions of Berger J.A. that separate schools do enjoy these rights, we believe it would then have been necessary to determine the limits of denominational rights. Because ACSTA argues that such rights include the right of permeation, any attempt to establish parameters around those rights would be fraught with difficulty. But absent that determination, the uncertainty of allocating requisitioned funds, which in the view of Berger J.A. are not subject to controls imposed by the Framework, and Government grants or ASFF top-up funds, which are subject to those controls, could result in fiscal turmoil and allegations of further inequities.

(ii) Is There Discrimination?

[92] That position considerably weakens the discrimination argument. It means that the only difference between public and separate boards that we will consider for the purposes of the s. 17(2) claim is the ability of separate boards to opt out of the ASFF. This ability to opt out means that separate boards can get a portion of their property assessment money directly from their ratepayers, whereas public schools cannot. It also means that public boards get a larger chunk of the ASFF than opted out separate boards.

[93] Are these remaining distinctions sufficient to constitute discrimination? Even assuming that monies from property assessment base (whether from the ASFF or from opted out requisition) fall within the scope of s. 17(2), the distribution of those funds does not, in our view, discriminate against public schools.

[94] It was argued before us that a finding of discrimination under s. 17(2) requires only proof of "differential treatment" as opposed to "fairness". We disagree. Justice Stevenson, in Calgary Board of Education v. Alberta (A.G.), supra, saw s. 17(2) as being "designed to ensure fairness" (at 356). Quoting from Chief Justice Fitzpatrick's decision in Board of Trustees of Regina Public School District No . 4 v. Board of Trustees of Gratton Separate School District No. 13 (1915), 50 S.C. R. 589, he said that the purpose of the subsection "was to secure to all the schools, whether public or separate, their fair share in the appropriation and distribution of any moneys for the support of schools" (at 356, emphasis added). Justice Stevenson's decision was affirmed on appeal and leave to appeal to the Supreme Court of Canada was refused: [1981] 4 W.W.R. 187 (C.A.); June 5, 1981, S.C.C. Bulletin.

[95] The Supreme Court of Canada in Ontario Home Builders' Association v. York Region Board of Education, [ 1 996] 2 S. C. R. 929 also suggests that an approach based on fairness should be favoured. Referring to the right of separate schools under s. 20 of the Scott Act to a share of the grants given to common schools, Justice Iacobucci, speaking for the entire court on this issue, said (at 992-3):

... s. 20 of the Scott Act does not impose "a procrustean obligation of proportionality in its strict terms". In my view, when one reviews the history and purpose of s. 93(l), the principle of proportionality can be seen for what it really is, namely, the means to a constitutional end which is equality of educational opportunity. Moreover, as I have noted above, the entire system of provincial grants in Ontario has not been based on actual proportionality since early in the century. The departure from strict, formalistic proportionality was made because it had led to a serious inequity of educational opportunity. While the notion of proportionality contained in s. 20 of the Scott Act is a constitutional right embodied in s. 93(l), the substantive purpose of this notion must be borne in mind: the achievement of an educational system that distributes provincial funds in a fair and non-discriminatory manner to common and separate schools alike. This is the substantive guarantee offered by s. 93(l).

Even though the issue now before us relates to the direct interpretation of the wording of s. 17(2) as opposed to the rights under the Scott Act which were guaranteed by s. 93(l), we are of the view that the Supreme Court's reasoning applies equally to the case before us. We must look to the substantive purpose behind s. 17(2). That purpose is clearly the achievement of an education system that distributes monies in support of education in a non-discriminatory manner. In our view, that object is best met using a standard of fairness, rather than a formalistic approach based on the absence of difference.

[96] Applying the fairness standard to the facts before us, keeping in mind that our analysis is premised on the assumption that the claw-back is constitutional and that the Framework applies equally to all boards, the only differences between separate and public boards stem from separate boards' ability to opt out of the ASFF. When one considers that separate and public boards receive the same dollar amount per student from property assessment (whether through the ASFF or through a combination of the ASFF and opted out requisition), can it seriously be contended that there is unfairness? In our opinion, it cannot. In coming to this conclusion, we agree with the trial judge that the means by which the monies are raised is irrelevant to the consideration under s. 17(2).

[97] ASBA argued that if local requisitions received by opted out boards do not fall within s. 17(2), we cannot take those monies into account when assessing whether there is fairness within the meaning of s. 17(2). We do not agree. Even if opted out local requisition does not fall within s. 17(2), it must be remembered that the purpose behind the guarantee in s. 17(2) is the achievement of a system of education that distributes provincial monies fairly. Accordingly, we are of the view that in the determination of what is fair, we can take into account other revenues received by some boards but not others.

[98] In conclusion, we are not persuaded that the system in place treats public schools in a discriminatory manner as that term is used in s. 17(2).

(b) Ministerial Discretion under s.13 of the Government Organization Act

[99] The second argument raised by PSBAA and ASBA is that s. 13(2) of the Government Organization Act, by allowing the Lieutenant Governor in Council to make regulations which may give very wide discretion to the Minister of Education to determine eligibility for grants, potentially permits discrimination within the meaning of s. 17(2) of the Alberta Act. The two parties take particular exception to s. 13(2) (d) (e) and (f). These provisions, they claim, potentially allow the Minister to make different grants to different classes of schools:

13(2) The Lieutenant Governor in Council may make regulations applicable to a Minister ...

(d) respecting the persons or organizations or classes of persons or organizations eligible for grants;

(e) respecting the conditions required to be met by any applicant for a grant to render that person or organization eligible for the grant;

(f) empowering the Minister in particular circumstances to waive eligibility criteria prescribed under clause (d) or (e);...

[100] The Government says that the Framework conditions are authorized under the School Grants Regulation, A.R. 72/95, ss. 6 & 8 passed pursuant to section 13. Those conditions might also be authorized by s. 13(4) of the Government Organization Act. In either case, those conditions have not been prescribed in the form of a regulation.

[101] The trial judge held that s. 13 must be read down so that "the Minister is only authorized to exercise discretion to the extent that in the exercise of the discretion there 'be no discrimination against schools of any class' (at 43 and 44). Accordingly, he found no discrimination.

[102] PSBAA and ASBA assert that the trial judge erred in reading downs. 13 of the Government Organization Act so that it complies with s. 17(2). ACSTA takes no position on this issue. The Government asserts that the trial judge was correct to read the provision down.

[103] The test of validity for legislation that confers discretion was stated in Slaight Communications Inc. v. Davidson, [1989] 1 S.C.R. 1038. There, Lamer J. (as he then was) stated (at 1078):

As the Constitution is the supreme law of Canada and any law that is inconsistent with its provisions is, to the extent of the inconsistency, of no force or effect, it is impossible to interpret legislation conferring discretion as conferring a power to infringe the Charter, unless, of course, that power is expressly conferred or necessarily implied. Such aninterpretation would require us to declare the legislation to be of no force or effect, unless it could be justified under s. 1. Although this Court must not add anything to legislation or delete anything from it in order to make it consistent with the Charter, there is no doubt in my mind that it should also not interpret legislation that is open to more than one interpretation so as to make it inconsistent with the Charter and hence of no force or effect. Legislation conferring an imprecise discretion must therefore be interpreted as not allowing the Charter rights to be infringed.

Although Justice Lamer dissented in the result in that case, he spoke for the majority on this issue. (See also, Eaton v. Brant County Board of Education, [1997] 1 S.C.R. 241, at 248-250.)

[104] PSBAA and ASBA assert that the provisions of s.13(2) of the Government Organization Act violate s. 17(2) of the Alberta Act by giving the Minister the power, whether expressly or by necessary implication, to discriminate against one of the classes of schools described in the 1901 North-west Territories Ordinances.

[105] No one before us argued that Slaight Communications has no application to cases not involving the Charter. And, we cannot see why the test set out in that case should not be applied when determining whether provisions of the Alberta Act have been infringed. After all, in Slaight Communications, Justice Lamer began his statement by making reference not specifically to the Charter, but to the Constitution as a whole.

[106] Therefore, the question that remains is whether the provisions under s. 13(2) confer to the Minister a power to infringe s. 17(2) of the Alberta Act, expressly or by necessary implication. In our view, they do not. It must be remembered that the Government Organization Act is legislation that applies generally to Ministers of all government departments. It was not specifically drafted to address provincial grants to school boards. The authority to distinguish between "classes of organizations", in the context of education, could refer to the distinction between public and separate schools. However, it may also refer to the distinction between elementary and secondary schools or between rural and urban schools.

[107] Clearly, there are two ways to interpret the discretion contemplated under s. 13(2). The first is that cabinet may make regulations which allow the Minister of -. Education to discriminate under s. 17(2) by favouring public schools over separate schools or vice versa. The second is that any Ministerial discretion must be exercised in a manner that is consistent with s. 17(2). Slaight Communications tells us that the latter interpretation is favoured.

[108] Both ASBA and PSBAA also refer to the decision of the Privy Council in Trustees of the Roman Catholic Separate Schools for Ottawa v. Ottawa Corporation, [1917] A. C. 76 in support of their position. Lord Buckmaster delivered the judgment of the court, saying at 81-82:

The case before their Lordships is not that of a mere interference with a right or privilege, but of a provision which enables it to be withdrawn in toto for an indefinite time. Their Lordships have no doubt that the power so given would be exercised with wisdom and moderation, but it is the creation of the power and not its exercise that is subject to objection, and the objection would not be removed even though the powers conferred were never exercised at all. To give authority to withdraw a right or privilege under these conditions necessarily operates to the prejudice of the class of persons affected by the withdrawal.

We do not find this case to be of much assistance. The provision at issue before the Privy Council was one that either expressly or by necessary implication violated s. 93(l) of the Constitution Act , 1867. It allowed the Minister of Education, with the approval of the Lieutenant Governor in Council, to suspend or withdraw all or any part of the rights, powers, and privileges of a school board and confer those rights, powers and privileges to an appointed Commission. Lord Buckmaster stressed that in that case, the impugned legislation did not merely interfere with the right in question. Rather, it provided the discretion to withdraw the right completely. The impugned legislation in this case neither expressly confers nor necessarily implies such a discretion.

[109] In summary, we see no merit to the argument that s. 13 of the Government Organization Act violates s. 17(2) of the Alberta Act and agree with the trial judge's treatment of this issue

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