ONTARIO SUPERIOR COURT OF JUSTICE KIMBERLY ROGERS. - and -

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1 Court File No. 01-CV ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: KIMBERLY ROGERS Applicant - and - THE ADMINISTRATOR OF ONTARIO WORKS FOR THE CITY OF GREATER SUDBURY and ATTORNEY GENERAL OF ONTARIO Respondents FACTUM OF THE ATTORNEY GENERAL OF ONTARIO (Motion for Interim Relief) (Returnable May 22, 2001) PART I INTRODUCTION 1. This motion concerns a request for an interlocutory injunction suspending the operation or application of section 36.1(1) of Ontario Regulation 134/98 amended to O. Reg. 614/00 ( OWR ) made under the Ontario Works Act, 1997, S.O. 1997, c.25, Sched. A, pending the determination of the Applicant s constitutional challenge to this section of the Regulation. The Attorney General of Ontario respectfully requests that the Applicant s motion be dismissed.

2 2 2. The Attorney General of Ontario submits that the application itself should proceed by way of an application for judicial review pursuant to sections 2(1) and 6(1) of the Judicial Review Procedure Act, R.S.O. 1990, c. J ( JRPA ) on the basis that the Applicant is seeking an order in the nature of mandamus and prohibition, as well as a declaration in relation to the exercise of a statutory power (ie. the passage of the impugned regulation). Notice of Application, para. 1 Judicial Review Procedure Act, R.S.O. 1990, c. J., ss. 2(1) and 6(1) Halpern v. Toronto (City) Clerk, [2000] O.J. No (S.C.J.) Re Service Employees Int l Union and Broadway Manor (1984), 48 O.R. (2d) 225 (C.A.) Canada Post Corp. v. C.U.P.W. (1989), 70 O.R. (2d) 394 (H.C.J.) Koumoudoros v. Municipality of Metropolitan Toronto (1982), 37 O.R. (2d) 656 (H.C.J.) 3. The Attorney General of Ontario, however, consents to having this motion for interim relief heard by a single judge of the Superior Court of Justice pursuant to section 6(2) of the JRPA on the basis of urgency. 4. It is submitted, however, that the matter should be transferred to the Divisional Court at the conclusion of the interim relief motion, pursuant to section 8 of the JRPA. JRPA, s.8

3 3 PART II FACTS A. Welfare Fraud and Legislative Reform 5. On June 12, 1997, the Government introduced legislation to reform Ontario s welfare system. The Social Assistance Reform Act, 1997, S.O. 1997, c.25 created two separate statutes: the Ontario Works Act, 1997, S.O. 1997, c. 25, Sched. A and the Ontario Disability Support Program Act, 1997, S.O. 1997, c. 25, Sched. B. Affidavit of Darlene MacDonald Forsyth, para One of the objectives of the new legislative framework was to address social assistance abuse. This was in part based on information contained in a 1987 report prepared by KPMG Peat Marwick for the Social Assistance Review Committee and the 1996 annual Provincial Auditor s Report which estimated and calculated the amount of fraud in Ontario s social assistance scheme. Affidavit of Darlene MacDonald Forsyth, paras. 6 and 7 7. In summary, these reports indicated an estimated loss through fraud of approximately $100 million for the 1995/96 fiscal year. This and related findings including those respecting the incidence of welfare fraud supported conclusions that losses were significant and undermined the overall integrity of the social assistance system. Affidavit of Darlene MacDonald Forsyth, paras. 6 and 7 8. Consistent with the need to focus limited resources on those most in need and to improve accountability for public funds, under the impugned provisions of the OWR, persons convicted of welfare fraud are ineligible for benefits for a three-month period if it is a first conviction.

4 4 Affidavit of Darlene MacDonald Forsyth, para In order to monitor allegations of welfare fraud and track eligibility assessments and investigations, a province-wide database was introduced. Statistics obtained from the database show that during the period between April 1, 1997 to March 31, 2000: i) approximately 47,000 recipients have had their assistance reduced or terminated due to fraud or misuse; ii) iii) $169.3 million in social assistance that people were not entitled to receive and $95 million in avoided future costs were identified (these amounts are based on the total overpayments that must be repaid and an estimate of the assistance that would have been paid if situations of ineligibility had not been identified); and there were 2,427 welfare fraud convictions. B. Facts in This Case 10. Ontario Works declared an overpayment to the Applicant of approximately $13, 500 for failure to report loan proceeds as income. Affidavit of Kimberly Rogers, paras. 5 and 8 Regulation 537 (R.R.O., 1990) (General Welfare Assistance), as amended, ss. 15(1), 15(2) 33 Regulation 134/98 amended to O. Reg. 614/00 (Ontario Works General) ss. 48(1), 54(1)1 iii 11. Ontario Works referred the file to the police. The Applicant was charged with fraud over $5,000. The Applicant pleaded guilty to this charge on April 25, 2001 and was sentenced to a 6 month conditional sentence during which time she was to remain at her residence. Affidavit of Kimberly Rogers, para. 9

5 5 12. In addition, the court imposed a sentence of 18 months probation and a restitution order of $13, Affidavit of Kimberly Rogers, para By virtue of section 36.1 of the challenged Regulation, section 36 of the Regulation, as it read prior to April 1, 2000, continues to apply in respect of offences committed before that date. Pursuant to the eligibility criteria prescribed therein, the Applicant s welfare benefits were suspended for 3 months effective April 30, 2001 on the basis of her conviction for an offence in relation to the receipt of social assistance. Affidavit of Kimberly Rogers, para. 11 OWR ss.36 and Since her suspension began, the Applicant has secured access to food, medicine, vitamins and some financial support with the assistance of organizations and individuals. Affidavit of Kimberly Rogers, paras. 16, 19, 20, 22, and 24 Affidavit of Amanda Choudra, paras. 7, 8, 13, 14, and 19 PART III ISSUES AND THE LAW A. The Test for an Interim Stay of Legislation 15. In order for a moving party to obtain a stay of legislation pending the determination of a constitutional challenge, a moving party must establish each of the following: i) there is a serious legal issue to be determined;

6 6 ii) iii) the moving party will suffer irreparable harm prior to trial if the interlocutory relief is not granted; and the balance of convenience, taking into account the public interest, favours a departure from the status quo until the court has disposed of the legal issues. Attorney General of Canada v. Harper, [2000] 2 S.C.R. 764 at para. 4 RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 at 334 Re Attorney General of Manitoba and Metropolitan Stores (MTS) Ltd. et al., [1987] 1 S.C.R. 110 at Recent attempts in Ontario to obtain a stay of provincial legislation have been unsuccessful in each case for failure to meet the strict requirements imposed by the Supreme Court of Canada. Ontario Federation of Anglers & Hunters v. Ontario (Ministry of Natural Resources) (1999) 43 O.R. (3d) 760 at 782 Rosen v. Ontario (Attorney General) (1994), 27 C.R.R. (2d) 159 at 161 (Gen. Div.) Charles v. Canada (Attorney General), [1995] O.J. No at paras. 10, 12 and 14 (Gen. Div.) Masse v. Ontario (Attorney General), unreported decision, September 29, 1995, Ontario Court (General Division) at 2 Dunmore v. Ontario (Attorney General), unreported decision, November 16, 1995, Ontario Court (General Division) Ferrel v. Ontario (Attorney General), unreported decision, December 28-29, 1995, Ontario Court (General Division) at 4 Falkiner v. Ontario (Attorney General), unreported decision, January 11, 1996, Ontario Court (General Division) at Kimberly Clark v. Ontario (Minister of Natural Resources), unreported decision, February 26, 1996, Ontario Court (General Division), leave to appeal refused April 16, 1996, Ontario Divisional Court Walire Enterprises Ltd. v. Ottawa (City), [1997] O.J. No at paras (Gen. Div.)

7 7 B. There is No Serious Question to be Tried 17. The judge on a motion for an interlocutory injunction must make a preliminary assessment of the merits of the case, and must be satisfied that it is neither frivolous nor vexatious or that the constitutionality of the statute is not a pure question of law. It is submitted that there is no serious issue to be tried, or in the alternative, that the constitutional challenge can be resolved as a pure question of law. RJR-MacDonald, supra at , , The Applicant alleges that the impugned Regulation violates her rights under sections 7, 12 and 15 of the Charter and is ultra vires the Legislature of Ontario as a being an encroachment on the federal government s exclusive jurisdiction in respect of criminal law. Such a proposition is unsupported by existing jurisprudence. (i) Section With respect to section 7 of the Charter, this application does not present a serious constitutional issue because it is at base a claim for economic or property rights, which are not protected by the Charter. In Irwin Toy Ltd. v. Québec, the Supreme Court of Canada held that economic rights as generally encompassed by the term property are not within the parameters of the s.7 guarantee. Irwin Toy Ltd. v. Québec, [1989] 1 S.C.R. 927 at 1003 A & L Investments Limited et al. v. The Queen (1997), 36 O.R. (3d) 127 at 136 (C.A.) R. v. Miles of Music Ltd. (1990), 74 O.R. (2d) 518 at 530 (C.A.)

8 8 20. Moreover, courts have consistently rejected the principle that there is a constitutional right to social assistance, holding that, contrary to established case law, this would in effect entrench the right to receive an economic benefit under section 7. Masse v. Ontario (1996), 134 D.L.R. (4 th ) 20 at 42 and (Div. Ct.), (leave to appeal to C.A. and S.C.C. denied) Conrad et al. v. Halifax County et al. (1993), 124 N.S.R. 251 at (S.C.), appeal dismissed on other grounds (1994), 130 N.S.R. 305 (C.A.) Gosselin c. Québec (Procureur general), [1999] J.Q. no (C.A.) (Q.L.) (leave to S.C.C. granted) 21. At paragraph 30 of her factum, the Applicant asserts that section 7 of the Charter affords protections that extend beyond the threats posed by the criminal justice system and include fundamental aspects of personhood threatened by government action. Although the protection accorded by section 7 does extend beyond the criminal law context, in New Brunswick (Minister of Health and Community Services) v. G.(J.), Chief Justice Lamer found that the proper subject matter of section 7 is the state s conduct in the course of the administration of justice. The present case involves only an administrative response to the failure to comply with the eligibility criteria for a social programme. It engages neither the justice system nor its administration. Accordingly, the Applicant has not been deprived of her life, liberty or security of the person under section 7 of the Charter. New Brunswick (Minister of Health and Community Services) v. G(J.), [1999] 3 S.C.R. 46 at paras Finally, and in any event, given that impugned suspension of benefits is only imposed after a criminal fraud conviction, it cannot be said to be contrary to the principles of fundamental justice.

9 9 (ii) Section The Applicant s submissions also fail to raise a serious issue under section 12 of the Charter. Section 12 prohibits cruel and unusual treatment or punishment. Unless state action amounts to treatment or punishment, section 12 has no application. P. Hogg, Constitutional Law of Canada (4 th ed., looseleaf) (Scarborough: Carswell, 2000, Rel.1) at In Condo v. Ontario (Registrar of Motor Vehicles), the Divisional Court confirmed that civil consequences of a criminal act cannot be considered as punishment under section 12 of the Charter. Further, it was held that treatment contemplates something more than simply dealing with a problem through a state imposed scheme or mechanism of some sort. The Regulation at issue in the present case prescribes a civil consequence for a criminal conviction relating to the receipt of social benefits. As that consequence is merely an administrative response to the failure to meet the eligibility requirements of a government assistance programme, it does not amount to treatment nor punishment for the purposes of section 12. Condo v. Ontario (Registrar of Motor Vehicles), (1999), 123 O.A.C. 111 at paras (Div. Ct.) R. v. Miller (1988), 65 O.R. (2d) 746 at 748 (C.A.) 25. In the alternative, if the Regulation does impose a sanction that qualifies as either treatment or punishment, the sanction is not cruel and unusual. The test of whether something is cruel and unusual sets a high threshold, requiring that the treatment or punishment prescribed be so excessive as to outrage standards of decency. It is submitted that a three month suspension of assistance on account of a conviction for fraud cannot be said to outrage the standards of decency, particularly where the fraud was committed upon the very programme from which the Applicant now seeks to benefit. R. v. Smith, [1987] 1 S.C.R at 1072, 1089, and 1109 Condo, supra at para. 24

10 10 (iii) Section 15(1) 26. As equality is a comparative concept, the court must evaluate claims of distinction and differential treatment as compared to one or more other persons or groups. The Applicant alleges that the impugned Regulation imposes harsher and therefore substantially different treatment on her on the basis of disability and sex. However, by virtue of the nature of the Regulation, which suspends a benefit, most of those subject to its application will arguably be in a position to make out a case of specific detrimental impact based on their particular circumstances. However, no one is disproportionately adversely affected. The suspension applies equally to all persons irrespective of their personal characteristics and thus, there is no differential treatment as between those to whom it applies. Granovsky v. Canada (Minister of Employment and Immigration), [2000] 1 S.C.R. 703 at paras. 43 and 45 Law v. Canada (Minister of Employment and Immigration), [1999] 1 S.C.R. 497 at paras. 39 and Indeed, the Ontario Court of Appeal recently rejected an adverse effects claim in the context of a challenge to a three month waiting period for health coverage involving two pregnant women. The Court ruled that: the waiting period requirement does not distinguish between different groups or persons. Everyone who applies for OHIP after April 1994 is subject to the waiting period. The law neither draws a formal distinction between groups based on personal characteristics nor fails to take into account the disadvantaged position of a group within Canadian society. The waiting period requirement does not impose differential treatment and cannot, therefore, be discriminatory within the meaning of the equality guarantee. Irshad (Litigation Guardian of) v. Ontario (Minister of Health), [2001] O.J. No. 648 (C.A.) at para 150

11 11 (iv) Division of Powers 28. The Province has jurisdiction over the payment and administration of social assistance benefits pursuant to its authority over property and civil rights in the province under section 92(13) of the Constitution Act, That authority necessarily includes the power to set eligibility criteria for the receipt of these benefits, such rules being basic to the ongoing and efficient operation and maintenance of such programmes. Constitution Act, 1867, section 92(13) 29. Where, as here, the purpose of the provincial legislation is exclusively to establish the conditions under which benefits are granted, forfeited or suspended, a provision prescribing the suspension of benefits will not be characterized as a penalty for the violation of federal criminal law. Rather, the Supreme Court of Canada has consistently confirmed that provisions such as these provide for a civil disability arising out of conviction for a criminal offence, and are properly within the purview of the provincial Legislature. Provincial Secretary of Prince Edward Island v. Egan, [1941] S.C.R. 396 at , 414, 416 O Grady v. Sparling, [1960] S.C.R. 804 at In addition, courts have consistently upheld laws with both federal and provincial characteristics, as well as those in which the province has imposed different or additional sanctions to those prescribed by criminal law for the offence in question. Bedard v. Dawson, [1923] S.C.R. 681 Mann v. The Queen, [1966] S.C.R. 238 Stephens v. The Queen, [1960] S.C.R. 823 Smith v. The Queen, [1960] S.C.R. 776 Sparling, supra

12 12 C. Irreparable Harm 31. At the second stage of the test for the granting of interlocutory relief, the Applicant must demonstrate that irreparable harm will result if the relief is not granted. RJR-MacDonald, supra at It is submitted that the Applicant will not suffer irreparable harm if the three month suspension of her benefits is maintained. To date, with the assistance of such agencies as the Elizabeth Fry Society, the Salvation Army and Better Beginnings, Better Futures as well as the help of her doctor, pharmacist and other individuals, the Applicant has secured access to adequate food, medication, vitamins, baby clothes, emotional support, rides to appointments and some financial assistance. There is no evidence that additional assistance from these agencies and individuals, as well as from the Community Emergency Fund will not be forthcoming until such time as her benefits are reinstated. Affidavit of Kimberly Rogers, paras. 16, 17, 19, 20, 22, and 24 Affidavit of Amanda Choudra, paras. 7, 8, 13, 14, and 19 D. Balance of Convenience 33. Even if the Applicant succeeds in establishing that there exists a serious question to be tried, and that she will suffer irreparable harm, she must show that the balance of convenience operates in favour of the Court granting the relief requested. 34. The courts have distinguished an application for an interlocutory injunction within a constitutional action from a similar application involving private parties. In the latter case it is only the parties rights that are being determined; in

13 13 constitutional cases such as the present case, the consideration of the public interest plays an important role, due to the wider impact of the constitutional challenge. Metropolitan Stores (MTS) Ltd., supra at RJR-MacDonald, supra at The Supreme Court of Canada has held that a public authority can demonstrate irreparable harm to the public interest: simply upon proof that the authority is charged with the duty of promoting or protecting the public interest and upon some indication that the impugned legislation, regulation, or activity was undertaken pursuant to that responsibility. Once these minimal requirements have been met, the court should in most cases assume that irreparable harm to the public interest would result from the restraint of that action. RJR-MacDonald, supra at In addition, the court should not, as a general rule, attempt to ascertain whether actual harm would result from the restraint sought: To do so would in effect require judicial inquiry into whether the government is governing well, since it implies the possibility that the government action does not have the effect of promoting the public interest and that the restraint of the action would therefore not harm the public interest. The Charter does not give the courts a licence to evaluate the effectiveness of government action, but only to restrain it where it encroaches upon fundamental rights. RJR-MacDonald, supra at Furthermore, in considering the grant of interim relief suspending the operation of a validly enacted but challenged law, courts should not insist on proof that the law will produce a public good. Rather, at this stage of the proceeding, this should be assumed:

14 14 in assessing the balance of convenience, the motions judge must proceed on the assumption that the law is directed to the public good and serves a valid public purpose The assumption of the public interest in enforcing the law weighs heavily in the balance. Courts will not lightly order that laws that Parliament or a legislature has duly enacted for the public good are inoperable in advance of complete constitutional review, which is always a complex and difficult matter. It follows that only in clear cases will interlocutory injunctions against the enforcement of law on grounds of alleged unconstitutionality succeed. Harper, supra at para. 9 When the nature and declared purpose of legislation is to promote the public interest, a motions court judge should not be concerned whether the legislation actually has such an effect. It must be presumed to do so. RJR-MacDonald, supra at Finally, to succeed under the third test, the Applicant must demonstrate that the suspension of the legislation would itself provide a public benefit: In order to overcome the assumed benefit to the public interest arising from the continued application of the legislation, the applicant who relies on the public interest must demonstrate that the suspension of the legislation would itself provide a public benefit. RJR-MacDonald, supra at p The test has been described as creating a very low hurdle for governments and a high one for applicants seeking an interim injunction to restrain, even briefly, the operation of a law enacted by a democratically elected legislature. Ferrell, supra at p.4 Ontario Federation of Anglers & Hunters, supra at p The Supreme Court of Canada has held that public interest considerations will weigh more heavily in cases where applicants seek to suspend the operation of the impugned legislation entirely, rather than where an applicant seeks an exemption from

15 15 the application of certain provisions of the law. Although the applicant in the present case seeks an exemption from the impugned Regulation, the public interest is implicated in the same manner as it would be in a suspension case and ought to be weighted accordingly. RJR-MacDonald, supra at The nature of the social assistance system and the community it serves is such that most of those subject to a suspension of benefits could potentially be in a position to make a case for an exemption based on urgent circumstances. An exemption for the Applicant in the present case would set a precedent that exemptions to the provision are readily attainable. It is submitted that the effect of such a ruling would significantly undermine the public purpose of the suspension provisions and compromise the scheme, the integrity of which depends upon strict adherence to the eligibility criteria prescribed therein.

16 16 PART IV ORDER REQUESTED 42. It is respectfully requested that the application for interim relief be dismissed. May 18, 2001 ALL OF WHICH IS RESPECTFULLY SUBMITTED Richard J.K. Stewart Lisa J. Sand Counsel for The Attorney General of Ontario

17 17 Schedule A Authorities Cases 1. Halpern v. Toronto (City) Clerk, [2000] O.J. No (S.C.J.) 2. Re Service Employees Int l Union and Broadway Manor (1984), 48 O.R. (2d) 225 (C.A.) 3. Canada Post Corp. v. C.U.P.W. (1989), 70 O.R. (2d) 394 (H.C.J.) 4. Koumoudoros v. Municipality of Metropolitan Toronto (1982), 37 O.R. (2d) 656 (H.C.J.) 5. Attorney General of Canada v. Harper, [2000] 2 S.C.R RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R Re Attorney General of Manitoba and Metropolitan Stores (MTS) Ltd. et al., [1987] 1 S.C.R Ontario Federation of Anglers & Hunters v. Ontario (Ministry of Natural Resources) (1999) 43 O.R. (3d) Rosen v. Ontario (Attorney General) (1994), 27 C.R.R. (2d) 159 (Gen. Div.) 10. Charles v. Canada (Attorney General), [1995] O.J. No (Gen. Div.) 11. Masse v. Ontario (Attorney General), unreported decision, September 29, 1995, Ontario Court (General Division) 12. Dunmore v. Ontario (Attorney General), unreported decision, November 16, 1995, Ontario Court (General Division) 13. Ferrel v. Ontario (Attorney General), unreported decision, December 28-29, 1995, Ontario Court (General Division) 14. Falkiner v. Ontario (Attorney General), unreported decision, January 11, 1996, Ontario Court (General Division) 15. Kimberly Clark v. Ontario (Minister of Natural Resources), unreported decision, February 26, 1996, Ontario Court (General Division) 16. Walire Enterprises Ltd. v. Ottawa (City), [1997] O.J. No (Gen. Div.) 17. Irwin Toy Ltd. v. Québec, [1989] 1 S.C.R. 927

18 A & L Investments Limited et al. v. The Queen (1997), 36 O.R. (3d) 127 (C.A.) 19. R. v. Miles of Music Ltd. (1990), 74 O.R. (2d) 518 (C.A.) 20. Masse v. Ontario (1996), 134 D.L.R. (4 th ) 20 (Div. Ct.) 21. Conrad et al. v. Halifax County et al. (1993), 124 N.S.R. 251 (S.C.) 22. Gosselin c. Québec (Procureur general), [1999] J.Q. no (C.A.) (Q.L.) 23. New Brunswick (Minister of Health and Community Services) v. G(J.), [1999] 3 S.C.R Condo v. Ontario (Registrar of Motor Vehicles), (1999), 123 O.A.C. 111 (Div. Ct.) 25. R. v. Miller (1988), 65 O.R. (2d) 746 at 748 (C.A.) 26. R. v. Smith, [1987] 1 S.C.R at 1072, 1089, and Granovsky v. Canada (Minister of Employment and Immigration), [2000] 1 S.C.R Law v. Canada (Minister of Employment and Immigration), [1999] 1 S.C.R Irshad (Litigation Guardian of) v. Ontario (Minister of Health), [2001] O.J. No. 648 (C.A.) 30. Provincial Secretary of Prince Edward Island v. Egan, [1941] S.C.R O Grady v. Sparling, [1960] S.C.R Bedard v. Dawson, [1923] S.C.R Mann v. The Queen, [1966] S.C.R Stephens v. The Queen, [1960] S.C.R Smith v. The Queen, [1960] S.C.R. 776 Additional Sources 36. P. Hogg, Constitutional Law of Canada (4 th ed., looseleaf) (Scarborough: Carswell, 2000, Rel.1)

19 19 Schedule B Statutes 1. Judicial Review Procedure Act, R.S.O. 1990, c. J., ss. 2(1), 6(1) and 8 2. Regulation 537 (R.R.O., 1990) (General Welfare Assistance), as amended, ss. 15(1), 15(2), 15.2, Regulation 134/98 amended to O. Reg. 614/00 (Ontario Works General), ss. 36, 36.1, 48(1), 54(1)1 iii 4. Constitution Act, 1867, s. 92(13)