Table of Contents

INTRODUCTION

BACKGROUND

A.
BARGAINING
    WITHIN THE FEDERAL PUBLIC SERVICE

B.
TIMELINE
    OF EVENTS
..
6

THE ISSUES
..
9

ANALYSIS

A.
ISSUE
    ONE: WERE THERE LIMITS PLACED ON S. 2(D)
CHARTER
RIGHTS?
.
10

(1)
Legal
    Framework
.
10

(2)
Appellants Submissions:
    Alleged Interferences with Collective Bargaining
....
21

(3)
Analysis
.
22

(a) The Lack of Good Faith Bargaining in the Pre-
ERA
Period......................

(b)
The Governments Failure to Consult about the Scope of the
ERA
...........

(c) The Impact of
ERA
Wage Increase Caps on
    Collective Bargaining..........

(d) Rollbacks...................................................................................................

(e) The Legislated Inability to Catch Up...........................................................

(4)  Conclusion on s. 2(d)

56

B.
ISSUE
    TWO: DID THE GOVERNMENT DEMONSTRABLY JUSTIFY, UNDER S. 1 OF THE
CHARTER,
ANY LIMITS ON THE ASSOCIATIONAL RIGHTS OF FEDERAL PUBLIC SERVANTS UNDER
    S. 2(D)?
.
57

(1) The
    Appellants Section 1
Charter
Challenges
.
58

(2) The First
Oakes
Stage:
    Were the
ERA
s Objectives Pressing and Substantial?
.
63

(3) The Second
Oakes
Stage: Were the
ERA
s Measures Proportional?
.
81

(4) Conclusion on Section 1 of the
Charter

105

C.
ISSUE
    THREE: DID THE APPLICATION JUDGE ERR IN ACCEPTING MR.
    ROCHONS EVIDENCE?
.
106

D.
DISPOSITION
..
113

COURT OF APPEAL FOR ONTARIO

CITATION: Gordon v. Canada (Attorney General), 2016 ONCA 625

DATE: 20160916

DOCKET: C58501 & C58502

Hoy
    A.C.J.O., Blair and Lauwers JJ.A.

BETWEEN

John
    Gordon, Patricia Ducharme,

Nick
    Stein, Chris Aylward, Darrell-Lee McKenzie and

Public
    Service Alliance of Canada

Applicants

(Appellants)

and

Attorney
    General of Canada

Respondent

(Respondent in Appeal)

AND BETWEEN

The Professional Institute of the Public Service of Canada/

LInstitut Professionel de la Fonction
    Publique du Canada,

Raymond Lazzara, Deborah Anne Chamney,

and Humayoun Akhtar

Applicants

(Appellants)

and

Her Majesty the Queen in Right of Canada

as Represented by the Attorney General of Canada

Respondent

(Respondent in Appeal)

Andrew Raven and Andrew Astritis, for the appellants,
    the Public Service Alliance of Canada
et al.

Fay Faraday, for the appellants, the Professional
    Institute of the Public Service of Canada
et al
.

Kathryn Hucal and Jon Bricker for the respondent,
    Attorney General of Canada

Heard:  November 17 and 18, 2015

On appeal from the judgments of Justice Thomas. R.
    Lederer of the Superior Court of Justice dated February 12, 2014, with reasons
    reported at 2014 ONSC 965, 303 C.R.R. (2d) 41.

Lauwers J.A.:

INTRODUCTION

[1]

The constitutional position of public sector labour relations has
    arguably shifted in the wake of the Supreme Court of Canadas decisions in its
    2015 labour trilogy:
Mounted Police Association of Ontario v. Canada
    (Attorney General)
, 2015 SCC 1, [2015] 1 S.C.R. 3 (
MPAO
);
Meredith
    v. Canada (Attorney General)
, 2015 SCC 2, [2015] 1 S.C.R. 125 (
Meredith
);
    and
Saskatchewan Federation of Labour v. Saskatchewan
, 2015 SCC 4,
    [2015] 1 S.C.R. 245 (
SFL
). This case is about the consequences of that
    shift for the constitutionality of public sector wage restraint legislation.

[2]

Together, the Public Service Alliance of Canada (PSAC) and the
    Professional Institute of the Public Service of Canada (PIPSC) represent
    about 88% of unionized employees in the federal public service.

[3]

The appellant unions seek declarations that provisions in the
Expenditure Restraint Act,
S.C. 2009, c. 2, s. 393 (
ERA
), enacted
    in response to the 2008 economic crisis, limited their members freedom of
    association under s. 2(d) of the
Canadian Charter of Rights and Freedoms
.
    They also challenge the Governments conduct in collective bargaining, before
    and after the
ERA
s enactment. They submit the Governments conduct and
    provisions in the
ERA
substantially interfered with their right to a meaningful
    collective bargaining process by interfering with bargaining on wages,
    overriding freely negotiated wage increases, capping wage increases during the
    restraint period, and preventing bargaining for catch-up after the restraint
    period. They assert these alleged limits have not been demonstrably justified
    under s. 1, and seek relief under s. 24 of the
Charter.

[4]

The application judge dismissed the applications, finding that the
    associational rights of federal public servants under s. 2(d) of the
Charter
were not impermissibly limited by the Governments conduct in collective
    bargaining or provisions in the
ERA
. He went on to state that he would
    have found the Government had demonstrably justified any such limits under s. 1
    of the
Charter
in light of the global economic crisis then affecting
    Canada.

[5]

On appeal
,
the appellants submit the application judge wrongly
    applied the effective impossibility test in assessing whether there was a limit
    on the appellants s. 2(d)
Charter
rights. Since the Supreme Court
    repudiated that test in its 2015 labour trilogy, this court is required to
    reconsider the application of s. 2(d) to this case in light of the
    clarified test.

[6]

The appellants also submit that the application judge erred in his
    treatment of the s. 1 evidence and in his application of the
Oakes
framework in determining that any limits on s. 2(d) rights were justified under
    s. 1 of the
Charter
.

[7]

I would dismiss the appeals. In my view, neither the Governments
    conduct nor the provisions of the
ERA
impermissibly limited the
    appellants s. 2(d)
Charter
rights. Further, any such limit is saved
    under s. 1.

BACKGROUND

A.

BARGAINING WITHIN THE FEDERAL PUBLIC SERVICE

[8]

Canadas federal public service has a number of different components. The
    first is known as the core public administration (CPA). It includes
    departments and agencies listed in Schedules I and IV of the
Financial
    Administration Act
, R.S.C. 1985, c. F-11 (
FAA
). The Treasury Board
    of Canada is the employer for departments and agencies within the CPA. The
    Treasury Board Secretariat, the administrative arm of Treasury Board,
    negotiates the terms and conditions of employment with the bargaining agents
    within the CPA.

[9]

The second component  the Separate Agencies  includes agencies
    listed in Schedule V of the
FAA
such as the Canada Revenue Agency (the
    CRA). Generally speaking, the Separate Agencies conduct their own
    negotiations within the mandate approved by Treasury Board.

[10]

The third component
    includes other entities in the federal public administration designated by the
    Governor in Council, including certain Crown corporations. Crown corporations
    conduct their own collective bargaining.

[11]

For the CPA and
    the Separate Agencies, collective bargaining is governed by the
Public
    Service Labour Relations Act
,

S.C. 2003, c. 22 (
PSLRA
),
    under the supervision of the Public Service Labour Relations Board (the Labour
    Board). Bargaining for Crown corporations is governed by the
Canada Labour
    Code
, R.S.C. 1985, c. L-2

(
CLC
),

under the
    supervision of the Canada Industrial Relations Board. Parliamentary employers
    such as the Senate and House of Commons  were also affected by the
ERA.
For
    labour relations purposes, they fall under the
Parliamentary Employment and
    Staff Relations Act
, R.S.C. 1985, c. 33.

[12]

During the
    relevant time, PIPSC represented six bargaining units within the CPA, 13 within
    the Separate Agencies, five at Crown corporations, and two bargaining units at
    the Senate and House of Commons.

[13]

PSAC, which is
    the largest public sector union in Canada, was the bargaining agent for five
    CPA units, 11 within the Separate Agencies, ten units at Crown corporations and
    three bargaining units at the Senate and House of Commons.

B.

Timeline of Events

[14]

Beginning in
    August 2007, and peaking in late 2008 and early 2009, the world experienced a
    financial downturn that caused the most serious global recession since the
    Great Depression of the 1930s. These global conditions hurt the Canadian
    economy and the Governments fiscal position
.

[15]

The
    Governments two-pronged response to the crisis was to take steps to stimulate
    the economy and to mitigate the significant negative impact the recession was
    having on its ability to balance the budget.

[16]

In an effort to carry
    out the second prong of its strategy, in October 2008, the Department of
    Finance asked the Treasury Board Secretariat for options for limiting
    compensation costs in the round of collective bargaining then occurring, since
    compensation costs were a significant component of government spending. For
    instance, total compensation costs for fiscal year 2008-2009 amounted to
    approximately 37% of direct program expenditures.

[17]

As requested,
    the Secretariat produced a paper, setting out three options:

1.  Limiting
    population growth in the civil service by imposing a staffing freeze on new
    hiring, not replacing departing workers, laying-off employees and offering
    departure incentives;

2. Limiting wage growth by suspending movement within pay ranges,
    suspending promotions and suspending upward reclassification of positions; and

3.  Limiting salary increases by freezing or limiting wage
    increases.

[18]

The Treasury
    Board Secretariat recommended the third option, and advised that the
    appropriate course of action was to attempt, through collective bargaining, to
    reach agreements consistent with wage increase limits. The Government took that
    advice.

[19]

On October 29,
    2008, the Minister of Finance delivered a speech providing assurances that the
    Governments response to the recession would include a commitment to
    responsible fiscal management that would also extend to public sector
    compensation.

[20]

On October 31,
    2008, a senior Treasury Board official, Hélène Laurendeau, met with PSACs
    President, John Gordon, to propose fast-tracking negotiations and to advise him
    Treasury Board was now operating within a restricted negotiating mandate
    regarding wage increases. The intent was to conclude collective agreements with
    PSAC before the release of the Governments
Economic and Fiscal Statement
at the end of November.

[21]

At a meeting on
    November 13, 2008, the Secretary of Treasury Board and other officials
    encouraged heads of the Separate Agencies to meet with the bargaining agents
    representing their employees to reach agreements within the new fiscal
    parameters. Four days later, a similar meeting was held with the heads of Crown
    corporations. At both meetings, Treasury Board advised that a collective
    agreement would not be approved unless wage increases were within the specified
    limits.

[22]

On November 18,
    2008, the President of Treasury Board released a statement that final offers on
    wage increases were being sent to all bargaining agents in the CPA currently
    engaged in collective bargaining. The appellant unions state no such offer was
    made to them and they first learned of it through media reports.

[23]

On November 19,
    2008, the Speech from the Throne set out the Governments position on its
    response to the economic crisis. It advised legislation directed at restraining
    public sector wage increases was forthcoming.

[24]

On November 23,
    2008, four of five PSAC CPA units reached collective agreements with Treasury
    Board, which included wage increases consistent with the final offers. These
    agreements were ratified on January 23, 2009.

[25]

Between November
    24 and November 27, 2008, all of the PSAC bargaining agents in the Separate
    Agencies, except for the CRA, negotiated agreements consistent with the wage
    increase limits. Nine of 13 PIPSC units in the Separate Agencies also negotiated
    agreements consistent with the wage increase limits in November 2008.

[26]

On November 27,
    2008, the Minister of Finance delivered an
Economic and Fiscal Statement
to Parliament. It projected budget deficits for fiscal years 2009-2010,
    2010-2011, and 2011-2012. The Statement also specified the maximum permitted
    wages increases in the public service for fiscal years 2007-2008 to 2010-2011:
    2.3% for 2007-2008 and 1.5% for each of the other three years for groups
    negotiating new collective agreements.

[27]

Parliament was
    prorogued on December 4, 2008. The Government tabled the Budget on January 27,
    2009 after Parliament resumed. The
Budget Implementation Act, 2009
, S.C.
    2009, c. 2, contained the
ERA
. The
ERA
was introduced in
    Parliament on February 6, 2009 and received Royal Assent on March 12, 2009. It
    imposed wage caps consistent with the Statement but, to the unions surprise,
    also capped wage increases for the fiscal year 2006-2007, except for collective
    agreements concluded or arbitral awards issued before December 8, 2008.

[28]

There are a
    total of 62 bargaining units represented by the appellant unions, which were
    each at different stages of collective bargaining in the fall of 2008. Many of
    the bargaining units represented by the appellants were able to reach
    collective agreements that are not challenged in these proceedings. It is
    common ground that the large majority of unionized federal civil servants
    reached such settlements before the
ERA
s enactment. The detailed facts
    applicable to specific complaints will be addressed below.

The Issues

[29]

This appeal
    raises three issues:

1. Did the application judge err in concluding that neither the
ERA
nor the Governments conduct in collective bargaining limited the
    union members associational rights under s. 2(d) of the
Charter
?

2. Did the application judge err in concluding, in the
    alternative, that the Government justified any such limits under s. 1 of the
Charter
?

3. Did the application judge err in accepting the opinion
    evidence of the Governments witness, Associate Deputy Minister Paul Rochon, in
    preference to the evidence of the appellants expert, economics professor Dr.
    Lars Spencer Osberg?

[30]

The first and
    second issues are the key to this appeal. The outcome of the second issue on
    the application of s. 1 of the
Charter
depends on the admissibility of
    the Governments evidence. For readability and because I conclude that the
    application judge properly admitted the evidence, I deal with the evidence
    issue last.

ANALYSIS

A.

Issue One: Were there Limits placed on s. 2(d)
charter
Rights?

(1)

Legal Framework

[31]

Before
    addressing the arguments raised by the appellants, I will set out the
    constitutional and statutory frameworks for the s. (2)(d)
Charter
challenges
    to the
ERA
.

(a)

The Constitutional Framework: The Status of Collective Bargaining under
    s. 2(d) of the
Charter

[32]

The law on the
    constitutional status of collective bargaining under s. 2(d) of the
Charter
was clarified by the Supreme Court of Canada in its latest labour trilogy,
    released in January 2015. In it, the Supreme Court describes the scope and
    proper approach to s. 2(d) and addresses confusion arising from earlier case
    law, especially
Ontario (Attorney General) v. Fraser
, 2011 SCC 20, [2011] 2 S.C.R. 3. In doing so, the
    court
reaffirms the substantial interference test from
Health
    Services and Support  Facilities Subsector Bargaining Assn. v. British Columbia
,
    2007 SCC 27, [2007] 2 S.C.R. 391 (
BC Health Services
). Two of the
    cases in the 2015 labour trilogy deal with the constitutionality of the
ERA
,
    which is particularly relevant for this appeal.

[33]

Because the 2015
    labour trilogy is important to the legal analysis in this case, I begin with a
    brief description of the three cases and then discuss the principles that
    emerge from them before discussing the substantial interference test.

(i)

The 2015 Labour Trilogy

[34]

The first case
    in the 2015 labour trilogy is
MPAO
. The issue in
MPAO
was whether
    the s. 2(d)
Charter
rights of members of the Royal Canadian Mounted
    Police (RCMP) were limited by their exclusion from bargaining under the
PLSRA
and the imposition of a non-unionized labour relations regime. The core
    component of the RCMP labour relations regime was the Staff Relations
    Representative Program (SRRP).  The Supreme Court concluded that the flaws
    in the SRRP process [did] not permit meaningful collective bargaining and
    fail[ed] to respect RCMP members freedom of association in both its purpose
    and its effects: para. 105. The court also concluded that the
PSLRA
exclusion infringed s. 2(d). Neither infringement was saved by s. 1.

[35]

The second case
    is
Meredith
. It too involved members of the RCMP and dealt with the
    constitutionality of the
ERA
. The court upheld salary rollbacks imposed
    under the
ERA.
I discuss its reasoning in more detail below.

[36]

The third case
    is
SFL.
It involved a successful challenge to the
Public Service
    Essential Services Act
, S.S. 2008, c. P-42.2 (
PSESA
), which limited
    the ability of Saskatchewan public sector employees who performed essential
    services to strike. The Supreme Court broke new ground in
SFL
in
    recognizing that s. 2(d) protects the right to strike. The court held that
    [t]he right to strike is an essential part of a meaningful collective
    bargaining process: para. 3.

[37]

I now turn to
    the general principles that arise from the 2015 labour trilogy.

(ii)

General Principles from the 2015 Labour Trilogy

[38]

In the 2015 labour
    trilogy, the Supreme Court called for a purposive, generous and contextual
    approach to s. 2(d) of the
Charter
:
MPAO
, at para. 47.  Viewed
    purposively, s. 2(d) protects the following classes of activities:

(1) the right to join with others and
    form associations; (2) the right to join with others in the pursuit of other
    constitutional rights; and (3) the right to join with others to meet on more
    equal terms the power and strength of other groups or entities. (
MPAO
,
    para. 66.)

[39]

In the domain of
    labour relations, s. 2(d) protects a meaningful process of collective
    bargaining, which is one that provides employees with a degree of choice and
    independence sufficient to enable them to determine their collective interests
    and meaningfully pursue them:
MPAO
, at para. 81. Meaningful collective
    bargaining maintains a balance of bargaining power, or equilibrium, between
    unions and employers:
MPAO
, at paras. 72 and 82;
SFL
, at paras.
    56 - 57.

[40]

The Supreme Court
    clarified in
MPAO
, at para. 73, that the right to collective bargaining
    is not derivative of freedom of association:

[T]he Attorney General of Canada, relying on

Fraser
,

argues
    that collective bargaining is at best a derivative right from the basic or
    core right to associate (the constitutive approach).  It follows,
    according to the Attorney General, that collective bargaining is protected only
    if state action makes it

effectively impossible

to
    associate for workplace matters.  We disagree.

[41]

The Supreme Court
    also clarified that its use of the expression effective impossibility had
    been mistakenly taken to be a prescription of the constitutionality test by
    readers of various decisions. But the expression was meant as no more than a
    description of the regimes under challenge in those cases.

[42]

The court j
ettisoned,
corrected or clarified its own
    prior jurisprudence considered to be inconsistent with Dickson C.J.s dissenting
    reasons in
Reference Re Public Service Employee Relations Act (Alta.)
, [1987] 1 S.C.R. 313,
which were
    adopted, without apparent reservation, in
MPAO
, at paras. 51, 54-58, and
    80, and in
SFL
, at paras. 84.

[43]

The Supreme
    Court expressly stated in
Meredith
, at para. 24, that the test for
    determining whether there has been a breach of s. 2(d) remains the substantial
    interference test from
BC Health Services
 the test to which I now turn.

(iii)

The Substantial Interference Test

[44]

Under the
    substantial interference test, the question is whether the process of
    voluntary, good faith collective bargaining between employees and the employer
    has been, or is likely to be, significantly and adversely impacted:
BC
    Health Services
, at para. 92. In each case, [t]he inquiry  is contextual
    and fact-specific:
BC Health Services
, at para. 92.

[45]

The court explained,
    at para. 93 of
BC Health Services
, that, generally speaking, determining
    whether a government measure affecting the protected process of collective
    bargaining amounts to substantial interference involves two inquiries:

The first inquiry is into the importance
    of the matter affected to the process of collective bargaining, and more
    specifically, to the capacity of the union members to come together and pursue
    collective goals in concert.  The second inquiry is into the manner in which
    the measure impacts on the collective right to good faith negotiation and
    consultation.

[46]

It has been
    noted that the Supreme Court did not expressly distinguish between the two
    inquiries in the 2015 labour trilogy, and so questions have been raised about
    their relevance. For instance, in a recent decision from the Court of Appeal
    for British Columbia, Garson J.A. observed that it appears that the Court has
    not always applied the formalistic two-part test set out in [
BC
]
Health Services
:
Federal Government Dockyard Trades and Labour Council
    v. Canada (Attorney General)
,
2016 BCCA 156, 387 D.L.R. (4th) 712, at para. 82 (
Dockyard Trades #2
)
. She also observed, at para. 41, that
    recent Supreme Court cases have tended to merge the two inquiries.

[47]

In this case,
    the parties accept that the two inquiries articulated in
BC Health Services
are
    relevant. I agree. As I have already noted, the Supreme Court expressly
    reasserted the primacy of the
BC Health Services
test in
Meredith
.

[48]

As I read
MPAO
and
Meredith
, the Supreme Court did take the two inquiries into account.
    In
MPAO
, the court addressed squarely the absence of a meaningful
    collective bargaining process, which is the focus of the second
BC Health
    Services
inquiry.  In
Meredith
, the real focus of the decision
    was on the wage rollback issue - an outcome or matter - which is the focus of
    the first
BC Health Services
inquiry. In each instance, the Supreme
    Court simply applied that branch of the
BC Health Services
test most
    relevant to the particular case.

[49]

While the Government
    accepts that the two inquiries apply in the context of this case, it argues the
    test is really all about the collective bargaining process, not about outcomes.
    I agree s. 2(d) protects the process of collective bargaining, not the fruits
    of bargaining, but that does not mean that what is being bargained over or the
    outcomes of bargaining are irrelevant to the s. 2(d) analysis.

[50]

The Supreme
    Court has often stated s. 2(d) protects the process of bargaining and not
    outcomes. For instance, at para. 91 of
BC Health Services
, the court
    stated: The right to collective bargaining thus conceived is a limited right
    to a process, it does not guarantee a certain substantive or economic outcome.
    (See also:
BC Health Services
, at para. 29;
MPAO
, at para. 67;
Meredith
,
    at para. 25.)

[51]

In determining
    whether there has been substantial interference with the collective bargaining
    process, the affected matter is relevant: applying the first inquiry in
BC
    Health Services
, the court must consider the importance of the matter
    affected
to the process of collective
    bargaining, and more specifically, to the capacity of the union members to come
    together and pursue collective goals in concert.

[52]

The purpose of
    collective bargaining, as the Supreme Court observed in
BC Health Services,
at para. 19, is to permit members of labour unions to engage, in association,
    in collective bargaining on
fundamental workplace issues
, and again, at
    para. 87, to associate for the purpose of advancing
workplace goals

    (emphasis added). The protections include, the court noted at para. 90, the
    ability of a union to exert meaningful influence over
working conditions

    (emphasis added). These statements recognize that unions aim at outcomes, at
    results. Collective bargaining is a means to an end, quite apart from having
    its own virtues.

[53]

As I read the
    case law, while protection is not afforded to the fruits of bargaining, but
    only to the process by which they are to be negotiated, employer actions unilaterally
    undermining the ability of unions to bargain about significant matters are
    constitutionally suspect. Certain matters are, by nature of their importance to
    the unionized employment relationships, matters central to the freedom of
    association:
BC Health Services
, at para. 25.  Adversely affecting
    these in a material way may be constitutionally suspect, depending on the
    context. These matters include: salary (
Meredith
, at
paras. 27-28;
Alberta
Reference,
at
p. 335); hours of
    work (
Alberta Reference
, at
p. 335); job security and seniority (
BC Health Services
, at para. 130);
    equitable and humane working conditions (
Alberta Reference
, at p. 368);
    and health and safety protections (
Alberta Reference
, at p. 368).

[54]

The Supreme
    Court has also identified a number of employer actions as being
    constitutionally suspect for the purposes of s. 2(d), again depending on the
    context, including the following: taking important matters off the table or restricting
    the matters that may be discussed (
BC Health Services
, at
paras. 111 and 113;
MPAO
, at
    para. 72); imposing arbitrary outcomes (
MPAO
, at para. 72); unilaterally
    nullifying negotiated terms (
BC Health Services
, at paras. 11 and 113); removing
    the right to strike (
SFL
, at para. 54); and imposing limits on future
    bargaining (
BC Health Services
, at
para. 113).

[55]

However, as noted above,
Meredith
demonstrates that, in certain circumstances, wage rollbacks are permissible
    under s. 2(d) of the
Charter.

Meredith
also indicates that while
    bargaining outcomes are by no means determinative, they may be relevant in
    assessing whether there has been substantial interference with the bargaining
    process. At para. 29, the court noted: Actual outcomes are not determinative
    of a s. 2(
d
) analysis, but, in this case, the evidence of outcomes
    supports a conclusion that the enactment of the
ERA
had a minor impact
    on the appellants associational activity.

[56]

In conclusion,
    in applying the substantial interference test, which involves a contextual,
    fact-specific inquiry, the court must consider both the significance of the
    matter in issue to the collective bargaining process and the degree of
    interference with the collective bargaining process. While bargaining outcomes
    are not determinative, they may be indicative of whether there has been
    substantial interference with the collective bargaining process.

(b)

The Statutory Framework

[57]

The
ERA
applied
    to all employees within the CPA, employees of Crown corporations and those
    employed by Parliamentary employers such as the Senate and House of Commons.
The
ERA
did not freeze wages, reduce wages or
    eliminate existing merit or similar types of increases. Rather, for the fixed
    restraint period, it implemented an upper limit on wage increases, prohibited
    the restructuring of pay rates, and prohibited any increase in additional
    remuneration, with certain limited exceptions. It also prevented unions from
    making up any losses in bargaining after the end of the restraint period.

[58]

In their notices
    of application, the appellants sought declarations that ss. 16  34 and 56  65
    of the
ERA
limit their s. 2(d)
Charter
rights.

[59]

Section 16 of
    the
ERA
is a key provision for purposes of these appeals:

16

Despite
    any collective agreement, arbitral award
or terms and conditions of
    employment to the contrary, but subject to the other provisions of this Act,
    the rates of pay for employees are to be increased, or are deemed to have been
    increased, as the case may be, by the following percentages for any 12-month
    period that begins during any of the following fiscal years:

(a)
the
    20062007 fiscal year, 2.5%;

(b)
the
    20072008 fiscal year, 2.3%;

(c)
the
    20082009 fiscal year, 1.5%;

(d)
the
    20092010 fiscal year, 1.5%; and

(e)
the
    20102011 fiscal year, 1.5%. [Emphasis added.]

[60]

The effect of s.
    16 was to partially rollback wage increases that had already been negotiated
    and awards that exceeded the stipulated maximums. However, for collective
    agreements concluded and arbitral awards rendered before December 8, 2008, s.
    16 did not apply in respect of any period that began during the 2006-2007 or
    2007-2008 fiscal year:
ERA
, s. 19(a).

[61]

In addition, the
ERA
capped wage increases in collective agreements entered into, or
    arbitral awards made, following the enactment of the
ERA
:

17

(1)
The provisions of any collective
    agreement that is entered into, or arbitral award that is made, after the day
    on which this Act comes into force may not provide for increases to rates of
    pay that are greater than those set out in section 16, but they may provide for
    increases that are lower.

[62]

Sections 23-29
    of the
ERA
prohibited wage restructuring and additional remuneration
    during the restraint period, including
any
    allowance, bonus, differential or premium or any payment to employees that
    [was] similar to any of those payments:
ERA
, s. 2. However, employees
    remained entitled to existing incremental increases, merit or performance
    increases and other similar forms of compensation:
ERA
, s. 10.

[63]

Sections 59-61 of
    the
ERA
also prohibited changes to employee performance pay plans for
    the restraint period.

[64]

In addition, ss.
    57 - 58 prohibited future bargaining aimed at making-up for the effects of the
    restraints imposed by the Act.

(2)

Appellants Submissions:
Alleged Interferences with Collective
    Bargaining

[65]

The appellants
    assert that the Governments conduct in collective bargaining leading up to and
    following the
ERAs
enactment
,
and provisions in the Act itself, constitute several discrete instances of
    imposing limits on the associational rights of various bargaining units they
    represent, within the meaning of s. 2(d) of the
Charter.
They make five complaints:

(1) the Government failed to bargain in good faith between
    November 2008 and the enactment of the ERA;

(2) the Government failed to consult with the bargaining units
    about the scope of the
ERA
from
    November 2008 to its first reading in February 2009;

(3) the Government interfered with bargaining after the ERA
    came into force by imposing wage increase caps and limited other forms of
    remuneration;

(4) the Government rolled back agreed wage increases; and

(5) the Government precluded affected
    bargaining units from making-up for the effects of the restraints imposed by the
    Act in future bargaining.

[66]

The appellants argue
    the application judge erred in his analysis of these issues since he did not
    have the benefit of the 2015 labour trilogy. They point out he relied on the
    mistaken notion of derivative rights and the effective impossibility test: see
    paras. 40-41, 103, 117-18, 122-28, 250 and 252. They argue that, if the substantial
    interference test were to be properly applied, the Governments conduct and the
ERA
would be found to have limited their s. 2(d)
Charter
rights.

[67]

Accepting that
    the application judge erred in applying the effective impossibility test, I now
    turn to an analysis of PSACs and PIPSCs specific complaints in light of the
    legal framework set out above.

(3)

Analysis

(a)      The Lack of Good Faith
    Bargaining in the Pre-
ERA
Period

[68]

The appellants
    argue the Governments actions in bargaining from November 2008 until the
ERA
s
    enactment in early 2009 prevented meaningful negotiation about wage increases,
    contrary to
BC Health
Services
.

[69]

This complaint
    applies to the bargaining units that reached collective agreements before the
ERA
came into force, including: four of five PSAC CPA units; all PSAC units in the
    Separate Agencies, excluding the CRA units; and nine of 13 PIPSC units in the
    Separate Agencies.
[1]
The appellants also assert this conduct adversely affected all unionized
    employees represented by PSAC and PIPSC, including those bargaining units not
    otherwise identified.

[70]

The argument,
    put most starkly by PIPSC in its factum, is that the Government refused to
    advance on any issues of longstanding concern; made the final offer with a
    take it or leave it approach, with no rationale provided; and

put a legislative gun to the
    Institute's head.

[71]

PIPSC advanced
    its position in two forums. The first was before the Labour Board, with which
    PIPSC filed 17 similar bad faith bargaining complaints under s. 190 of the
PSLRA
on November 24, 2008. The second forum was the courts through this litigation,
    where PSAC joined it.

[72]

Did the Governments
    actions undermine good faith collective bargaining, within the meaning of s.
    2(d) of the
Charter
, when it threatened to legislate wage rate increase
    caps if the unions did not enter into collective agreements that respected
    those caps? I conclude the Government did bargain in good faith before the
ERA
s
    enactment.

(i)      The
    Governing Principles

[73]

There is nothing
    in the case law suggesting that good faith bargaining for
Charter
purposes is different from good faith bargaining as required under ordinary
    labour relations legislation and labour board jurisprudence in Canada; they are
    the same, as the Supreme Court suggested in discussing the indicia of good
    faith bargaining in
BC Health Services
, at paras. 98-107. For instance,
    the court stated at para. 98 that [c]onsideration of the duty to negotiate in
    good faith which lies at the heart of collective bargaining may shed light on
    what constitutes improper interference with collective bargaining rights for
    the purposes of s. 2(d). Nor is there anything in the 2015 labour trilogy
    to suggest that the Supreme Court intended to change the law with respect to
    good faith bargaining as that concept has been developed in ordinary labour
    law.

[74]

Thus, it is
    relevant to consider the concept of good faith bargaining from a labour law
    perspective.

[75]

As noted above,
    for the CPA and the Separate Agencies, collective bargaining is governed by the
PSLRA
while bargaining for Crown corporations is governed by the
CLC
,

which has similar provisions. These statutes incorporate certain
Wagner
    Act
features, with Canadian adaptations: see Brian W. Burkett, The Future
    of the
Wagner Act
: A Canadian-American Comparison (2013) 38:2 Queens
    L.J. 363.

[76]

As is typical of
Wagner Act
bargaining structures, both
    statutes require good faith bargaining

and give the parties access to a
    remedy for unfair labour practices, including bad faith bargaining:
PSLRA
,
    ss. 106 and 190(1)(b);
CLC
, ss. 50 and 97(1)(a). Similar provisions
    govern bargaining under provincial statutes: see, for example,
Labour
    Relations Act, 1995
, S.O. 1995, c. 1, Sch. A, s. 17. This is the business
    of the respective labour relations boards, which have special expertise in the
    supervision of labour disputes:
PSLRA
, ss. 190-92;
CLC
, ss.
    97-99. The Supreme Court has often instructed reviewing courts to defer to
    expert tribunals, especially labour tribunals and arbitrators, most recently in
Commission scolaire de Laval v. Syndicat de lenseignement de la
    région de Laval
, 2016 SCC 8, 396 D.L.R. (4th) 1, at paras. 32-33.

[77]

In this case,
    the application judge had the benefit of the Labour Boards decision on the
    issue of whether the Government was engaged in bad faith bargaining with the
    PIPSC Computer Systems (CS) bargaining unit in the pre-
ERA
period:
    [2009] C.P.S.L.R.B. No. 102, affd 2010 FCA 109. (Of the 17 bad faith
    bargaining complaints filed by PIPSC in November 2008, only the CS complaint
    resulted in a decision.)

[78]

The Labour Board
    reviewed the bargaining evidence in its extensive reasons, noting, at para. 78,
    that the complaint concerns bargaining that occurred in the shadow of
    impending wage restraint legislation, and added: This complaint relates
    specifically to the final offer tabled by the employer and the subsequent
    negotiations that occurred in November 2008.

[79]

The argument put
    forward by PIPSC was that, in the circumstances, the governments final wage
    offer constituted bad faith bargaining contrary to s. 106 of the
PSLRA
,
    which obliges the parties to meet, to bargain in good faith, and to make every
    reasonable effort to enter into a collective agreement.

[80]

The Labour Board
    found, at para. 90, that the negotiations between the parties were no longer
    fruitful in the period [preceding] November 18, 2008 and that [i]n such a
    case, tabling a final offer or a take it or leave it proposal [was] not
    bargaining in bad faith.

[81]

The Labour Board
    determined, at para. 91, that the final offer itself was not evidence of bad
    faith: The employer's final offer was not  so far from the accepted
    norms... that it must be considered unreasonable. The Board reached this
    conclusion for a number of reasons listed at paras. 91-93: the final offer on
    wage increases was higher than the Governments original offer; the Government
    did not demand rollbacks or concessions from the CS bargaining unit or insist
    on conditions precedent before proceeding; the Government made the same wage
    offer to all bargaining units; the Government's position was not inflexible
    and intransigent to the point of endangering the very existence of collective
    bargaining (para. 85) as it participated in negotiations in late November and
    discussed all the issues on the table, including compromises proposed by PIPSC;
     the Government clearly justified its rationale for its position in bargaining
    to ensure predictability in expenditures (para. 93) and
it would be inappropriate for
the Board
to consider the merits of that rationale.

[82]

The Board also
    found, at para. 95, that [w]hile the timing of the press release so soon after
    the tabling of the final offer was not ideal and perhaps not very helpful for
    collective bargaining, there [was] no evidence that it was intended to directly
    influence collective bargaining. Concerning PIPSCs complaints about the
    compressed timeline, the Board found, at para. 96, that the timelines were
    tight, but not unreasonable. In any event, it was PIPSC that decided not to
    continue the negotiations.

[83]

Although the
    Boards findings are not binding on the court, they undermine PIPSCs argument
    that the Government was not bargaining in good faith in the pre-
ERA
period with the CS bargaining unit.

[84]

None of the PSAC
    units or any other PIPSC units were parties to that proceeding before the
    Board, but the application judges review of the broader evidence, to which I
    now turn, leads to the same conclusion for similar reasons, which reflect a
    similar bargaining pattern.

(ii)  The Application Judges Decision

[85]

The application
    judge took a contextual approach in his assessment of the collective bargaining
    that took place starting in November 2008. He laid out the details of the
    economic crisis and referred to it often in his decision, stating, at para.
    138:

In considering the context, factors to
    be taken into account include: (a) the unprecedented nature of the financial
    crisis, (b) the rapid decline of the economy and (c) the potential for serious
    impacts on all Canadians. The government saw it as a crisis in the economy.

(See also paras. 17-18, 71, 90, 93, 128-29, 132, 138,
    148, 169, 193, 196, 198, 210, 227, 236-37, 239, 240, 242, 246 and 250.)

[86]

The application
    judge took the view, at para. 161, that the pre-
ERA
round of collective
    bargaining was simply hard bargaining:

It had been a difficult round of
    bargaining in a very challenging collective bargaining environment. There is
    nothing in this which suggests an absence of meaningful dialogue.

[87]

He added, at
    para 166: It may be that the government representatives were unable to, and
    refused to, discuss wage increases beyond those in the final offer but that
    does not render the dialogue or the process meaningless.

[88]

The application
    judge pointed out, at para. 147, that some progress was made on wages. As late
    as November 16, 2008, PSAC expressed concern when the offer for 2007-2008 was
    reduced to 1.5%. The next day the Government raised it to 2.3%. He also noted
    that one PSAC CPA unit and four of five PIPSC CPA units had received pay
    proposals before November 2008 that included wage increases less than those in the
    final offer. In other words, the final offer represented a gain for those units
    in terms of the Governments earlier offer on wage increases. Progress was also
    made on benefits and other non-monetary issues, which the application judge
    noted, at para. 165, was demonstrative of a meaningful process: see also
    paras. 150 and 166.

[89]

The application
    judge concluded, at para. 148:

It may be that the ability to deal with
    wages was constrained by the context of the times but they were not finally
    determined until the final offers were received on November 18, 2008. These
    final offers and the bargaining sessions that took place indicate a meaningful
    process in the face of a significant economic downturn. Ultimately, when
    confronted with a crisis, ongoing processes have to be brought to a conclusion.

[90]

He also
    observed, at para. 149, that, following agreements for four of five PSAC CPA
    units, PSAC publicized the results through press releases which made clear
    that the bargaining was difficult, that as a result of the economic
    circumstances expectations were adjusted and that the negotiations were
    successful. Ultimately, the application judge found that [s]ignificant
    improvements were negotiated in a number of areas of long-standing concern to
    the membership: para. 149.

[91]

Accordingly, the
    application judge rejected the argument that the fifth PSAC CPA unit, which was
    seeking a 13.5% increase for the year following the restraint period, was not
    provided with a meaningful process. The application judge commented, at para.
    162: it cannot reasonably have been expected that, in the circumstances, a
    demand for a 13.5% increase would generate a positive response. This dispute
    was eventually arbitrated.

[92]

The application
    judge observed, at para. 164, that all PSAC Separate Agency units entered into
    agreements between November 24 and 27, 2008. He noted the lack of explanation
    regarding the full history of negotiations, but concluded: The agreements
    imply that the process was meaningful.

(iii)  The
    Principles Applied

[93]

The appellants
    have focused on wages and the Governments refusal to move from the wage
    increase caps tabled in the negotiations in the pre-
ERA
period. They
    claim that this limits the s. 2(d)
Charter
rights of their members.

[94]

I reject this submission.

[95]

The application
    judges reasons demonstrate both the complexity of the situation and the care
    taken by the application judge in assessing the appellants arguments and the
    evidence. His assessment of the evidence attracts this courts deference.

[96]

I accept the
    application judges characterization of the Governments approach in the fall
    of 2008, at para. 161, as hard bargaining. This is a permitted mode of good
    faith bargaining: see
Royal Oak Mines Inc. v. Canada (Labour Relations
    Board)
, [1996] 1 S.C.R. 369. As the Supreme Court observed in
BC
    Health Services
, at para. 103: Nor does the duty to bargain in good faith
    preclude hard bargaining. The Government was engaged in good faith bargaining
    in the period before the
ERA
s enactment, not bad faith bargaining.

[97]

Labour relations
    legislation and s. 2(d) of the
Charter
both aim to establish and
    preserve the balance of power between the employer and unions:
MPAO
, at
    paras. 58-59, 71, 80;
BC Health Services
,

at para. 84;
Alberta
    Reference
, at pp. 365-69.

[98]

There was not,
    in my view, a significant disparity of bargaining power between the Government
    and the unions in bargaining during the pre-
ERA
period.
Wagner Act
employer tools  ̶̶̶̶  such as changing terms and conditions
    of employment after a freeze period, and locking employees out  ̶̶̶̶
     were available, if considerably less useful to a government as employer, even
    with essential services legislation.  The unions had strike options from
    work-to-rule to full blown strikes, and there was at least one strike.

[99]

Both sides were
    constrained by the labour legislation that governed their bargaining.  It gave
    them each a tool chest they knew how to use strategically, from long
    experience. Both sides were well resourced and well advised, and knew each
    other intimately. Both sides were constrained by the economic crisis and the
    effect it would have on public opinion. How would a strike for higher wages be
    received publicly in a falling economy with increasing unemployment, especially
    given the job security public servants enjoy over their counterparts in the
    private sector? On the political front, the Government was working within a
    minority Parliament, which imported a degree of uncertainty with respect to
    legislative actions. On the legal front, the scope of s. 2(d) of the
Charter
was in contention; the unions knew from experience how to deploy constitutional
    challenges.

[100]

During the pre-
ERA
phase of the bargaining, the evidence shows that everything, including wages
    and the possible wage restraints, was under discussion. Limits on compensation were
    not actually imposed until the
ERA
was passed in 2009. This was hard
    bargaining, to be sure, but it did not cease to be bargaining in good faith.

[101]

In short, the
    bargaining record, as carefully and extensively laid out by the application
    judge, shows sophisticated and experienced bargaining parties making the best
    of a bad situation and coming to reasonable settlements in the pre-
ERA
period. The bargaining units freely negotiated with eyes wide open to the
    global economic crisis and to their right of access to all the available
    options in collective bargaining. The fact that most bargaining units settled,
    but some did not, and that some pursued bad faith bargaining claims, while
    others did not, speaks to the independence of the bargaining units within the
    unions. They were free to, and did, come to their own risk assessments, carve
    their own paths and choose their own most advantageous strategies.

[102]

In conclusion,
    the appellants have not identified any palpable and overriding errors in the
    application judges factual determinations about the conduct of bargaining in
    the pre-
ERA
period. I reject their submission that the Governments
    conduct in the pre-
ERA
period, especially the Governments refusal to
    move from the wage increase caps, amounted to substantial interference with the
    collective bargaining process. I would dismiss the appellants argument that
    the Government failed to bargain in good faith bargaining between November 2008
    and the enactment of the
ERA.

[103]

I now turn to the
    second alleged limit on s. 2(d)
Charter
rights.

(b)      The Governments Failure to
    Consult about the Scope of the
ERA

[104]

The appellant
    unions complain that the Government failed to consult with them about the
    prospective scope of the
ERA.

In particular, they take issue
    with the fact the Government failed to advise the unions prior to the
ERA
s
    first reading that the legislation would roll back previously negotiated wage
    increases and wage increases in existing arbitral awards to conform to the wage
    caps, and that the restraint period would include fiscal year 2006-2007. The appellants
    assert they were not consulted about these provisions and thus had no
    opportunity to discuss or negotiate them before the legislation was tabled,
    contrary to s. 2(d).

[105]

The application
    judge did not address the consultation issue separately, or differentiate
    between negotiations and consultation. He stated, at para. 157:

The second [
BC Health Services
]
    question requires the determination of whether the legislative measure or government
    action respects the duty to consult and negotiate in good faith. Where the
    right to bargain collectively applies  it is not limited to a mere right to
    make representations to one's employer, but requires the employer to engage in
    a process of consideration and discussion to have them considered by the
    employer.

(i)    The
    Governing Principles

[106]

In effect, the
    appellants argue that some independent meaning must be given to consultation
    in the Supreme Courts statement of the constitutional test, at para. 93 of
BC
    Health Services
: The second inquiry is into the manner in which the
    measure impacts on the collective right to good faith negotiation
and
    consultation
 (emphasis added).

This expression occurs several times
    and in several forms in the decision. However, at no time does the Supreme
    Court draw an analytical distinction between negotiation and consultation.

[107]

Negotiation
    connotes a more robust relationship than consultation. It signifies a measure
    of bargaining power and a process of back-and-forth, give-and-take discussion. This
    is illustrated by the distinction between the two concepts drawn in
MPAO.
While
    there was a consultative process regarding RCMP salaries, there was no
    structure for meaningful collective negotiations between the police officers
    and the RCMP. This was unconstitutional.

[108]

An employees
    right to participate in a collective bargaining process is the high-water mark
    of consultation. Indeed, the collective bargaining process is ordinarily the
    forum in which proposals from each side are advanced, discussed and negotiated.
    This is the strong form of consultation.

[109]

However, civil
    servants are not constitutionally entitled to be better off in collective
    bargaining than union members in the private sector. The issue about the
    required degree and form of consultation occurs at the sensitive interface
    between the responsibilities of the Government as employer, on one hand, and as
    legislator, on the other. As a matter of democratic principle it is necessary
    to maintain the distinction in roles, and for courts to tread carefully.

(ii)   The
    Principles Applied

[110]

In my view, the
    appellants complaint about a lack of consultation has no merit.

[111]

The rights and
    freedoms protected by the
Charter
, including the freedom of association,
    do not have the effect of altering democratic processes that are themselves
    constitutional in nature. There was no additional duty on the Government to
    consult with the appellants in particular about the legislation. In
BC
    Health Services
, in the course of the s. 1 analysis, the majority observed,
    at para. 157: Legislators are not bound to consult with affected parties
    before passing legislation. In
Meredith
, the point was made by
    Rothstein J., who concurred in the result, at para. 45:

This Court has never recognized a duty
    on legislatures to consult with any affected individual or group before
    enacting legislation, even where a measure impacts constitutional rights..
    Under the doctrine of parliamentary privilege, legislatures internal
    procedures are their own and are not for the judiciary to dictate. [Citations
    omitted.]

[112]

The appellants
    had the same right to participate in the democratic process leading to the
    introduction and passage of legislation as any Canadian. Government employees
    are not entitled to privileged stature in the legislative process by virtue of
    their employment relationship or their status as union members.

[113]

In short, the
Charter
does not interfere in the policy-formulation process, and, in particular,
    does not require consultation before legislating:
BC Health Services
, at
    para. 157.

[114]

I now turn to
    complaints about the
ERA
s provisions.

(c)

The Impact of
ERA
Wage Increase Caps on Collective Bargaining

(i)
Collective
    Agr
e
ements Negotiated after the
ERA
Came into Force

[115]

The core of the
    appellant unions complaints is that the
ERA
conclusively took wage
    increases beyond the caps off the table. They point to several situations where
    the collective bargaining process continued after the
ERA
came into
    force, and argue the
ERA
s provisions substantially interfered with
    their members collective bargaining rights.

[116]

For example,
    some bargaining units received offers in November 2008 but did not reach
    collective agreements until after the
ERA
came into force. Other units
    had agreements that were not open in the fall of 2008 but came open during the
    restraint period. Most units eventually reached collective agreements through
    negotiations or with the assistance of mediators. Some reached impasse, and
    collective agreements were imposed through arbitration. All the agreements or
    awards were consistent with the
ERA
s

wage increase limits.

[117]

I disagree that
    the
ERA
breached the appellants s. 2(d) right to meaningful collective
    bargaining by imposing wage increase caps.

(ii)      The Governing Principles

[118]

As I have
    explained, the law after the 2015 labour trilogy continues to be that s. 2(d)
    of the
Charter
does not guarantee unions will achieve a particular outcome
    through collective bargaining. Not every case of legislative interference with
    a matter identified as significant to collective bargaining will automatically
    be found to infringe s. 2(d).
Meredith
shows that, in certain
    circumstances, even wage rollbacks may be permissible under s. 2(d) of the
Charter
.

(iii)  The
    Application Judges Decision

[119]

In concluding
    that there was no breach of s. 2(d), the application judge found that wages
    were not so important that limiting them amounted to substantial interference
    with collective bargaining.

[120]

The application
    judge addressed the issue of wages most directly at paras. 141-155. At
    para. 143, he cited para. 29 of the CS bargaining unit Labour Board decision
    where a PIPSC witness is recorded as telling the Board that [m]oney was not a
    key issue in the negotiations, although it was important. The application
    judge concluded, at para. 153:

In the context of this case wages were
    not central to the process. They were not so important that fixing the
    increases substantially interfered with the freedom of association.

[121]

He built this
    conclusion on the following observation, at para. 153:

The problem for the unions is that
    they believe they could have gotten more if the process had been allowed to run
    its course; in particular, they could have received higher wages. This suggests
    that it is not the process that is at the root of their concern, it is the
    result. What
Fraser
makes clear is that whatever it is that receives
    protection under s. 2 (d), it is not the guarantee of a result.

(iv)

The Principles Applied

[122]

Bargaining over
    wages is ordinarily a significant matter in free collective bargaining. Here,
    the evidence amply substantiates the appellants argument that salary increases
    were a significant issue for most of the bargaining units, as the application
    judges reasons actually show. Accordingly, I would not accept the application
    judges finding that wages were not central to the process. They were. But
    this does not resolve the issue.

[123]

Here, the
    evidence indicates that the legislated caps on wage increases were consistent
    with what the bargaining units would have achieved even without the caps.

[124]

It is common
    ground that by the date of the
ERA
s enactment in March 2009 the large
    majority of unionized of federal employees covered by it had already reached
    collective agreements consistent with it. A minority did not reach settlement.

[125]

Stephen Jellys
    affidavit on behalf of PSAC states that in negotiations on behalf of bargaining
    units within the CPA in November 2008, Treasury Board offered 2.3% for 2007-2008
    with 1.5% in the succeeding years. The economic terms were largely agreed
    before the Government negotiator mentioned the plan to introduce wage restraint
    legislation. The agreements were finalized with four of five PSAC units within
    the CPA a few days later. PSACs factum states: Each of these units, however,
    made substantial gains in exchange for agreeing to the Treasury Boards
    proposed rates of pay.

[126]

These four PSAC
    units comprised the vast majority of unionized federal civil servants in the
    CPA. The wage results represent the fruit of free collective bargaining by the
    largest bargaining units. The fact that the Government concentrated on reaching
    agreement with them shows their importance in establishing a bargaining
    pattern. This pattern bargaining method was borne out by the subsequent
    agreements reached by all PSAC units in the Separate Agencies. In its factum,
    PSAC makes an important concession:

Mr. Rochon [a witness for the
    government] himself highlighted the significance of these "changed
    circumstances", concluding that the rates of pay in the
ERA
were reasonable
    in this context and that employees would have thought so as well.  PSAC
acknowledged this very point in November
    2008.

[127]

The
ERA
s
    imposition of the wage increase caps therefore was consistent with the results
    of free collective bargaining that were the most favourable to the unions,
    having been negotiated by the largest union.

[128]

From a process
    perspective, it is difficult to imagine that continuation of an unfettered
    bargaining process for the remaining minority of units would have produced
    significantly different outcomes, given that the settlement with the majority
    of the public service drove the determination of the wage increase caps.

[129]

For those on
    whom a wage increase of 2.5% was imposed for the fiscal year 2006-2007, their
    loss would be the difference between what they received, and what they would
    have received had the collective bargaining process moved to its natural
    conclusion.  No information has been provided about what that likely number
    would have been. However, they received the pattern amount received by the other
    federal public servants with collective agreements covering that year. It is
    unlikely that an unfettered bargaining process would have produced
    significantly different outcomes for this relatively small group.

[130]

To recite the words
    of
Meredith
, the level at which the

ERA

capped
    wage increases  was consistent with the going rate reached in agreements
    concluded with other bargaining agents inside and outside of the core public
    administration and so reflected an outcome consistent with actual bargaining
    processes: para. 28. While outcomes are not determinative, as in
Meredith
,

evidence
    of outcomes supports a conclusion that the enactment of the

ERA

had a
    minor impact on the appellants associational activity: para. 29.

[131]

Ultimately,
    viewing the matter in context, union members were not discouraged from the
    collective pursuit of common goals as a result of the upper limits placed on
    wage increases for the restraint period.

[132]

I conclude that
    the wage increase caps in the
ERA
did not amount to substantial
    interference with the collective bargaining process contrary to s. 2(d) of the
Charter
.

Arbitrations
    under the
ERA

[133]

One PSAC CPA
    unit, Technical Services (TC), and two PIPSC CPA units, Architecture,
    Engineering and Land Survey (NR), and Research (RE), were covered by
    arbitral awards issued after the
ERA
came into force.

[134]

The RE unit is a
    unique case in that the arbitration hearing was held from January 31 to
    February 2, 2009  mere days before the introduction of the
ERA

in
    Parliament
.
The parties submissions to the arbitrator proceeded on the
    assumption that the restraint period under the
ERA
would run through fiscal
    years 2007-2011 based on Government statements to that point. On that
    assumption, submissions were made in relation to fiscal year 2006-2007 for wage
    increases. The
ERA
extended the restraint period retrospectively to
    include the 2006-2007 period. The arbitral award, released on March 23, 2009,
    was made in accordance with the wage caps in the restraint period, including
    2006-2007.

[135]

The appellants
    seek to build on
SFL
s determination that the right to strike is
    constitutionally protected. As noted, following the 2015 labour trilogy, the
    right to strike is protected by s. 2(d) of the
Charter
because it
    functions to maintain the balance of bargaining power between employers and
    employees:
SFL
, at para. 77.

[136]

The appellants
    submit that only interest arbitration with an unlimited scope can be an
    adequate substitute for the right to strike and that it too is constitutionally
    protected under s. 2(d) of the
Charter
. They rely on a passage to that
    effect from Dickson C.J. in dissent in the
Alberta Reference
,
at

p. 380, made in the context of
    his s. 1 analysis, which was approved in
SFL,
at para. 94.

[137]

I would not give
    effect to the argument that the limits imposed by the
ERA
on the
    arbitration process limited the s. 2(d)
Charter
rights of the appellants.

[138]

The Supreme
    Court has suggested that alternative dispute resolution mechanisms are not
    generally associational in nature and thus may not be subject to the same
    constitutional protection as the right to strike:
SFL
, at para. 60. Assuming,
    however, alternative dispute resolution mechanisms are associational in nature,
    it does not necessarily follow that any limits on interest arbitration would amount
    to a breach of s. 2(d), just as any limits on collective bargaining do not
    necessarily amount to a breach of s. 2(d).

[139]

The ordinary
    purpose of interest arbitration is to replicate the results of free collective
    bargaining. Since the
ERA
s wage increase caps were built on the
    foundation set by free collective bargaining, as the Supreme Court observed in
Meredith
,
    the legislated wage increase caps on the awards of interest arbitrators simply
    implemented replication. It follows that the requirement that arbitral awards
    conform to any restraints on items to be included in a collective agreement,
    including wage increase caps, does not establish a limit on a s. 2(d)
Charter
right that the Government must justify under s. 1.

(d)

Rollbacks

[140]

Section 16 of
    the
ERA
overrode freely negotiated wage increases in existing collective
    agreements (and arbitral awards), to the extent that they exceeded the limits
    imposed by the
ERA
, by imposing rollbacks. This affected seven PSAC and
    two PIPSC bargaining units, which had already concluded collective agreements
    before the enactment of the
ERA
.

[141]

The appellant
    unions submit that the
ERA
s rollbacks are a substantial interference
    with their s. 2(d)
Charter
collective bargaining rights.

[142]

Counsel for the
    Attorney General submits, to the contrary, that [w]hile
Meredith
may
    not be determinative of the constitutionality of the
ERA
in all cases
    the reasoning is persuasive and in fact is determinative of the reduction
    [i.e., rollback] issue in this case.

(i)    The
    Impact of the Rollbacks

[143]

Two PSAC
    bargaining units were composed of CRA employees. Collective agreements between
    these units and the CRA were reached on October 24, 2007 and included wage
    increases of 2.5% on November 1, 2007 and November 1st of the following two
    years. The
ERA
rolled back the 2009-2010 wage increase to 1.5%, reducing
    the total value of the collective agreement by about $14 million, according to
    PSAC.
[2]
Employees were not required to reimburse monies already paid by the employer,
    even though the
ERA
permitted payments above those permitted by the
ERA
to be clawed back:
ERA
, s. 64.

[144]

Five affected
    PSAC units were composed of employees of Crown Corporations:

·

A bargaining unit at the Canada Council for the Arts had
    concluded a collective agreement on October 16, 2006 that included wage
    increases of 2.5% for fiscal years 2009-2010 and 2010-2011. These increases
    were both reduced to 1.5% by the
ERA
, decreasing the value of the
    agreement by a total of $175,659.

·

The PSAC unit at the Canadian Museum of Nature concluded a
    collective agreement on November 10, 2006 that included a wage increase of 2%
    for fiscal year 2009-2010. This increase was reduced to 1.5%, decreasing the
    total value of the agreement by $46,961.

·

Two PSAC bargaining units at the National Arts Centre were
    affected. The Property Management, Parking Services and Security Officers Group
    signed a collective agreement on August 7, 2008, including wage increases of
    2.5% for fiscal years 2009-2010 and 2010-2011. The Ushers and Tour Guides Group
    signed an agreement on the same date including an increase of 2.5% for fiscal
    year 2009-2010.  Each of these increases was reduced to 1.5% by the
ERA
,
    cutting the value of those agreements by $94,299 and $7,122 respectively. The
    National Arts Centre recovered the increases on four months of wages already
    paid to employees in the Property Management Group, deducting those amounts
    from the employees paychecks over the next six months.

·

Employees at the National Gallery of Canada had in place a
    four-year collective agreement which provided for a 2.5% wage increase for
    fiscal year 2009-2010. This was reduced to 1.5%, diminishing the value of the
    agreement by $131,532.

[145]

The two affected
    PIPSC bargaining units were composed of employees of Crown Corporations:

·

The Canadian Commercial Corporation reached a collective
    agreement with its employees in November 2007, which included wage increases of
    2.9% for fiscal years 2009-2010 and 2010-2011. Both increases were reduced by
    the
ERA
to 1.5%.

·

A four-year collective agreement between the Canadian Museum of
    Nature and PIPSC included a 2.5% increase for fiscal year 2009-2010, which was
    reduced to 1.5% by the
ERA
.

[146]

The financial
    effects of these rollbacks do not appear to be in the record.

(ii)   The
    Application Judges Decision

[147]

The application
    judge dealt with the impact of the rollbacks at paras. 170-184 of his reasons.
    He found that the rollbacks did not amount to substantial interference with the
    collective bargaining process.

(iii) The
    Governing Principles

[148]

I noted earlier
    that the Supreme Court has identified rollbacks as potential interferences with
    collective bargaining that could limit associational rights under s. 2(d) since
    they nullify the outcomes of free collective bargaining:
BC Health Services,
at

paras. 92 and 96.

[149]

In this case, the
    application judge relied on the first decision of the Court of Appeal for British
    Columbia in
Federal Government Dockyard Trades and Labour Council v. Canada
    (Attorney General)
,

2013 BCCA 371, 376 D.L.R. (4th) 318 (
Dockyard
    Trades #1
), which held that the rollback of a 5.2% wage increase in a
    binding arbitral award to 1.5% was not a substantial interference with
    collective bargaining. In
Dockyard Trades #2
, which the Supreme Court
    remanded to the British Columbia Court of Appeal for disposition in accordance
    with
Meredith
and
MPAO
, the court reached the same conclusion.

[150]

The case of
Canada
    (Procureur général) c. Syndicat canadien de la function publique, section
    locale 675
, 2014 QCCA 1068 (
Syndicat canadien #1
), was also remanded
    for reconsideration in light of
MPAO
and
Meredith
to the Court of
    Appeal of Quebec: [2014] S.C.C.A. No. 351. The case involved CBC employees
    represented by the Canadian Union of Public Employees, Local 675 and the
    Association des réalisateurs.

[151]

The CUPE
    agreement provided for wage increases as follows: 2.6% on October 1, 2007,
    2.5% on September 29, 2008, and 2.5% on September 28, 2009.
    The agreement with the Association des réalisateurs provided for an increase of
    3.5% on October 1, 2007, followed by four annual wage increases of 3%
    on December 10, 2007, 2.5% on December 15, 2008, 2.5% on
    December 14, 2009, and 2.5% on December 13, 2010. As a result
    of the
ERA
, the CBC employees lost the portion of the wage increases in
    excess of the
ERA
limits, retroactive to December 8, 2008.

[152]

In
Syndicat
    canadien #1
, the Court of Appeal of Quebec reversed the lower court
    decision that the
ERA
was unconstitutional. When the case was remanded,
    the court heard the appeal
de novo
and reached the same conclusion:
(Procureur
    général) c. Syndicat canadien de la fonction publique section locale 675
,
    2016 QCCA 163, leave to appeal to SCC requested, [2016] S.C.C.A. No. 117 (
Syndicat
    canadien #2
).

[153]

In
Syndicat
    canadien #2
, the Court of Appeal of Quebec held, at para. 43, that wage
    issues are central to freedom of association in the workplace:

on peut affirmer sans se tromper que les
    questions salariales sont assurément de celles qui importent aux travailleurs
    engagés, par l'intermédiaire de leur syndicat, dans le processus de négociation
    collective qui fait partie intégrante de la liberté d'association que garantit
    l'al. 2
d)
de la
Charte
. Il s'agit là de questions centrales à
    l'exercice de cette liberté en milieu de travail et qui sont ordinairement l'un
    des chefs de discussion cruciaux lors d'une négociation collective.

[154]

While the court
    noted, at para. 44, that the interference n'était donc pas anodine, it looked
    at the interference in context. One relevant factor was that the wage increase
    caps were consistent with negotiated outcomes. The court held, at para. 61:

Par conséquent, il n'y a pas lieu de conclure
    à la violation de la liberté d'association garantie par l'al. 2
d)
. C'est
    là, d'ailleurs, la conclusion de la Cour suprême dans
Meredith
,
    conclusion dont il n'y a pas lieu de s'écarter.

[155]

The issue in
Meredith
was whether the
ERA
substantially interfered with the existing Pay
    Council process, so as to infringe the appellants freedom of association:
    para. 25.  The Supreme Court reiterated its general approach that s. 2(d)
    guarantees a right to a meaningful labour relations process, but it does not
    guarantee a particular outcome or result. The court described the impact of the
ERA
on RCMP members at para. 26:

[T]he
ERA
resulted in a
    rollback of scheduled wage increases from the previous Pay Council
    recommendations accepted by the Treasury Board, from between 2% and 3.5% to
    1.5% in each of 2008, 2009, and 2010. The original increase would also have
    doubled service pay and increased the Field Trainer Allowance. Both of these
    were also eliminated by the
ERA
, subject to subsequent negotiations
    pursuant to s. 62 of that Act.

[156]

The reference to
    s. 62 of the
ERA
was important to the process analysis in
Meredith
.
    Section 62 provided an exception for the RCMP:

Despite sections 44 to 49, the Treasury
    Board may change the amount or rate of any allowance, or make any new
    allowance, applicable to members of the Royal Canadian Mounted Police if the
    Treasury Board is of the opinion that the change or the new allowance, as the
    case may be, is critical to support transformation initiatives relating to the
    Royal Canadian Mounted Police.

[157]

The Supreme
    Court pointed out in
Meredith
that RCMP members were able to use the Pay
    Council process, despite its constitutional flaws, to make substantial gains,
    and observed, at para. 29:

Most significantly in the case of RCMP
    members, s. 62 permitted the negotiation of additional allowances as part of
    "transformation[al] initiatives" within the RCMP. The record
    indicates that RCMP members were able to obtain significant benefits as a
    result of subsequent proposals brought forward through the existing Pay Council
    process. Service pay was increased from 1% to 1.5% for every five years of
    service -- representing a 50% increase -- and extended for the first time to
    certain civilian members. A new and more generous policy for stand-by pay was
    also approved.
Actual outcomes are not determinative of a s. 2(
d
)
    analysis, but, in this case, the evidence of outcomes supports a conclusion
    that the enactment of the
ERA
had a minor impact on the appellants'
    associational activity.
[Emphasis added.]

[158]

The Supreme
    Court consequently found no breach of s. 2(d) of the
Charter
in
Meredith
,
    stating, at para. 30:

Simply put, the Pay Council continued to
    afford RCMP members a process for consultation on compensation-related issues
    within the constitutionally inadequate labour relations framework that was then
    in place. The
ERA
and the government's course of conduct cannot be said
    to have substantially impaired the collective pursuit of the workplace goals of
    RCMP members.

[159]

The court stated
    that the changes wrought by the
ERA
with respect to the RCMP did not
    rise to the level of a s. 2(d) limit, for three reasons.  First, the court
    noted, at para. 28: The process followed to impose the wage restraints thus
    did not disregard the substance of the former [Pay Council] procedure, and the
ERA
did not preclude consultation. Second, the court noted, at para.
    29, that the
ERA
contained an exception for the RCMP in s. 62, which was
    used by the membership to make substantial gains. Third, and most importantly,
    the key to the Supreme Courts decision was in its finding, at para. 28, that
    the level of capped wage increases imposed by the
ERA
reflected the
    results of free collective bargaining:

[T]he level at which the
ERA
capped wage increases for members of the RCMP was consistent with the going rate
    reached in agreements concluded with other bargaining agents inside and outside
    of the core public administration and so reflected an outcome consistent with
    actual bargaining processes. The process followed to impose the wage restraints
    thus did not disregard the substance of the former procedure.

(iv)  The
    Principles Applied

[160]

I concluded in
    the previous section of these reasons that the
ERA
s wage increase caps
    did not unconstitutionally limit the appellants s. 2(d)
Charter
rights.
    I would apply the same logic to the issue of rollbacks, with necessary
    modifications, particularly in light of the Supreme Courts decision in
Meredith.

[161]

In my view, the
ERA
s s. 62 exception for the RCMP did not drive the result in
Meredith
.
    Rather, the key to the Supreme Courts decision was its finding, at para. 28,
    that the level of capped wage increases imposed by the
ERA
reflected the
    results of free collective bargaining, which, as discussed above, is also true
    here.

[162]

The Crown argues
    that s. 8 of the
ERA
did provide some relief:

Nothing
    in this Act precludes the bargaining agent for employees governed by a
    collective agreement or arbitral award and the employer of those employees from
    amending, by agreement in writing, any provision of the collective agreement or
    arbitral award, other than a provision relating to its term, so long as the
    amendment is not contrary to any provision of this Act.

[163]

The application
    judge called s. 8 an invitation to reopen any collective agreement: para.
    183. While s. 8 provides the union and employer could amend, by agreement in
    writing, any provision in a collective agreement, the proviso, so long as the
    amendment is not contrary to any provision of this Act, would not permit a
    reopening to provide for wage increases above the wage limit caps or any other
    forms of additional remuneration. But s. 8 provided an avenue by which a union
    could seek other advantages of value to members. The evidence is that several
    collective agreements were reopened. For example, PSAC was able to negotiate better
    return to work provisions following parental leave
.

[164]

I conclude,
    drawing on
Meredith, Dockyard Trades #2
and
Syndicat canadien #2,
that the rollbacks did not amount to substantial interference with the collective
    bargaining process and thus did not limit the 2(d)
Charter
rights of the
    employees represented by the appellants.

(e)

The Legislated Inability to Catch Up

[165]

Section 57 of
    the
ERA
prohibits future bargaining or arbitral agreements from making
    up for the effects of the restraints imposed by the Act. It provides:

57 No provision of any collective
    agreement that is entered into  or of any arbitral award that is made, or of
    any terms and conditions of employment that are established  after the day on
    which this Act comes into force may provide for compensation for amounts that
    employees did not receive as a result of the restraint measures in this Act.

[166]

Similarly, s. 58
    overrides provisions in collective agreements entered into, and arbitral awards
    made, before the enactment of the
ERA
that provide
for compensation for amounts that
    employees did not receive as a result of the restraint measures in this Act.

[167]

The unions
    argued the impact of the
ERA
would be permanent and, as the application
    judge explained the argument, at para. 185, [t]he wage rates of their members
    will never catch up.

(i)    The
    Application Judges Decision

[168]

The application
    judge set out his understanding of the effect of s. 57, at para. 186:

What this says is that the wages that
    would have been earned had the restraints not be put in place cannot be
    recovered. The unions will not be able to [argue], in subsequent bargaining,
    that they should recover what was lost. The intention is clear. The restraints
    are to be effective. This does not mean that in the future, bargaining of wage
    rates will not be subject to considerations of what other comparable workers
    are earning at the time and whatever other appropriate factors may be brought
    to bear.

(ii)   Analysis

[169]

I agree with the
    application judge that the appellants interpretation of s. 57 goes too far.
    The application judge is correct that future bargaining would permit the unions
    to seek comparable wage rates to what comparable private sector employees were
    making in the event that they had overtaken the civil service wage rates. This
    is provided for in ss. 148(2)(b) and 175(2)(b) of the
PSLRA
.

[170]

As I see the
    operation of ss. 57-58 in simple terms, if civil servant Joan was $10,000 a
    year behind her private sector comparator Bob for two years in the restraint
    period, then Joan cannot recover the $20,000 cumulative difference. However, in
    the first year after the restraint period, Joans salary could be increased by
    $10,000 to match Bobs, all other things being equal. But the prospect that
    Joan can get to the new comparable salary bracket does not address the issue of
    her catch-up for the restraint period.

[171]

In particular, I
    do not see how the
ERA
negatively affects future bargaining by the CRA
    PIPSC bargaining unit, as PIPSC argues. The unit was looking for increases in
    the neighbourhood of 30% to make up for past incomparability between public
    sector and private sector salaries. As I see it, the
ERA
just affects
    the restraint years, not any previous years of underpayment (if there were
    any).

[172]

The appellants
    submit there is no justification for this permanent limit on free collective
    bargaining. PIPSC argues: Sections 57 and 58 of the
ERA
effectively
    leveraged  the  occasion  of  a  period  of  financial  uncertainty  to
    impose  permanent adverse   impacts   on  employees   wages   and   pensions
    and   on  their  freedom   of association. The rationale provided by the
    Government for the limits on free collective bargaining imposed by the
ERA
was rooted in the global economic crisis and its possible fiscal impacts on the
    Government. All understood the restraint period and the restraints themselves
    to be temporary, to end with fiscal year 2010-2011, even though a budget
    deficit was projected for 2011-2012. The Governments explanation for this
    permanent limit on future collective bargaining was the need for permanent
    savings to meet its long-term fiscal objectives.

[173]

While taking
    matters off the table might generally be inconsistent with the principles in
    the 2015 labour trilogy, the context must be kept in mind. Bargaining about
    wages was limited during the temporary restraint period. It was not permanent.
    It seems to me that the prohibition on future bargaining relates only to the
    Governments need to retain the savings obtained during the restraint period.
    It is, in short, a corollary of the wage increase caps.

[174]

In conclusion,
    ss. 57-58 did not substantially interference with collective bargaining for s.
    2(d) purposes.

(4)

Conclusion on s. 2(d)

[175]

As noted, not every law or action limiting

collective bargaining will
    result in a limit on s. 2(d)
Charter
rights. The
Charter
only
    prevents the Government from doing something that would

compromise the essential integrity of the process of collective
    bargaining protected by s. 2(
d
):
BC Health Services
, at para.
    129.
Even if government action or legislation substantially touch on collective
    bargaining, they will still not violate s. 2(d) if they preserve a process of
    consultation and good faith negotiation:
BC Health Services
, at para. 94.

[176]

The Government engaged in permissible hard bargaining
during
    a period of economic crisis and government austerity. And by enacting the
ERA,
the Government

capped wage increases for a limited period. The
ERA
did not completely prohibit any wage increases, the cap was in place for a
    limited period of time, and the limit imposed was in line with the wage
    increases obtained through free collective bargaining. Moreover, the appellant
    unions were able to make progress on matters of interest to some of the
    bargaining units they represented. They were still able to participate in a
    process of consultation and good faith negotiations. As such, neither the
ERA
nor the Governments conduct before or after the enactment of
ERA
limited
    the appellants s. 2(d) rights.

B.

Issue Two: Did the
    Government demonstrably justify, under s. 1 of the
Charter,
any Limits
    on the associational rights of federal public servants under s. 2(d)?

[177]

In
    the event that the foregoing analysis is wrong in whole or in part, I now turn
    to consider the application of s. 1 of the
Charter
.

[178]

Section
    1 of the
Charter
requires the
    court to determine whether the limits established on s. 2(d) rights are
    reasonably and demonstrably justified in a free and democratic society. The
    onus is on the Crown seeking to uphold the limits established by the
ERA
.

[179]

The identified
    limits to be assessed are the imposition of wage increase caps in bargaining
    and arbitration during the restraint period, the retrospective application of
    the wage increase limits to fiscal year 2006-2007, the imposition of wage
    increase rollbacks on previously negotiated collective agreements and arbitral
    awards, and the prohibition on negotiating catch-ups in bargaining after the
    restraint period.

[180]

The
    court must determine first, whether the objectives of the
ERA
were
    pressing and substantial, and second, whether the means by which those
    objectives were advanced were proportionate. The proportionality analysis asks
    three questions: (1) is the limit rationally connected to the purpose; (2) does
    the limit minimally impair the right; and (3) is there proportionality between
    the deleterious and salutary effects of the law? (See
Carter v. Canada (Attorney General),
2015 SCC 5, [2015] 1 S.C.R. 331
; R. v. Oakes
, [1986] 1 S.C.R. 103.)

(1)      The
    Appellants Section 1
Charter
Challenges

[181]

By way of
    overview, the appellants s. 1
Charter
challenges are both substantive
    and procedural. Substantively, although they admit the existence of the economic

downturn
, t
he appellants reject the notion that Canada had a fiscal
    problem. They reject the saliency of the

Government's
stated
objectives in addressing the
    economic problems faced by Canada. They also challenge the proportionality of
    the
ERA
s measures, arguing they

were

not

rationally
    connected

to

the

objectives,

did

not

minimally

impair

freedom

of

association,

and

their
    deleterious

effects

outweighed

any

salutary

benefits. The appellants procedural
    challenge focusses on the application judges admission and use of the
    Governments evidence.

[182]

I begin with a description of the context in which the
ERA
was enacted and then turn to consider the appellants attacks on the
ERA
s
    objectives. Next, I consider the appellants proportionality challenges.

(a)

The Need for a Contextual Approach

[183]

It is now trite law that the s. 1 analysis is contextual and
    fact-specific. McLachlin J. observed that
the
Oakes
test must be
    applied flexibly, having regard to the factual and social context of each
    case:
RJR-MacDonald Inc. v. Canada (Attorney General),
[1995] 3 S.C.R.
    199, at para. 132. She cautioned, in para. 134, that: [c]ontext is essential
    in determining legislative objective and proportionality, but it cannot be
    carried to the extreme of treating the challenged law as a unique
    socio-economic phenomenon, of which Parliament is deemed the best judge. I
    address below the thorny question of when and to what extent courts should
    defer to legislative choices.

The Global Economic Crisis

[184]

The context for
    the
ERA
was the global recession that began in August 2007, and peaked
    in late 2008 and early 2009. The application judge laid out the evidence in his
    reasons, at paras. 5-17 and 192-214. The evidence established that: this was
    the most serious global recession since the Great Depression; global conditions
    and the economic recession had a negative impact on the Canadian economy and on
    the fiscal position of the Government of Canada; in the private sector, exports
    and commodity prices declined as did investment and investor confidence; and
    consumer spending declined. The outlook for real GDP growth in Canada in 2009
    (already revised down from 1.9% to 1.2% in October 2008) was downgraded to 0.3%
    in November 2008.

[185]

Paul Rochon
    swore three affidavits on behalf of the Federal Government. He was at the
    center of the Governments policy work around the financial crisis on which he
    gave evidence. He was the Associate Deputy Minister and G-7 Deputy in the
    Federal Department of Finance when he swore his first affidavit on February 28,
    2012.

[186]

Mr. Rochon
    provided evidence that the leaders of the Group of 20 described the crisis as
    posing serious challenges to the world economy and financial markets and
    agreed on the need for a broader policy response  based on closer
    macro-economic co-operation, to restore growth, avoid negative spillovers and
    support emerging market economies and developing countries.

[187]

According to Mr.
    Rochon, these G-20 commitments underpinned the Governments response, which
    included a suite of policy and legislative actions intended to address the
    negative impacts of the recession and stimulate the economy.  In doing so, the
    Government pursued a publicly announced economic strategy founded on
    responsible fiscal management.  In particular, Mr. Rochon noted:

Stimulus and restraint measures were purposely enacted
    together. In the Governments view, the credibility and maximum effectiveness
    of the Economic Action Plan rested on the Governments ability to demonstrate
    its commitment to sound ongoing fiscal management and long-term sustainable
    public finances.  In order to restore confidence among Canadians, the
    Government considered it necessary to act boldly with a stimulus package and
    also to ensure that the Governments fiscal position was sustainable coming out
    of the crisis. The
ERA
and other spending restraint measures were
    introduced to help achieve this latter goal.

[188]

At para. 214,
    the application judge quoted Mr. Rochons sur-reply affidavit:

Uncertainty and risk were exceptionally high in the fall of
    2008, which required the Government to act quickly and with a high degree of
    prudence. [The (Reply) Affidavit of Lars Osberg] disputes the Government's
    assessment of what was "reasonably probable" at the time of the
    recession. However, the Government was not engaged in an academic exercise and
    it did not have the advantage of hindsight. It needed to make swift decisions
    in rapidly evolving circumstances to minimize risk, address negative impacts and
    bolster the confidence of Canadians and international investors alike.

[189]

Mr. Rochons
    evidence led the application judge to find, at para. 6:

Governments and central banks accepted that the speed and
    trajectory of the global economic downturn required them to respond.
    Governments believed that they had to act quickly to mitigate the recession and
    support economic recovery.

[190]

The global
    economic crisis to which the Government was responding forms part of the
    context in which the constitutional assessment of the challenged
ERA
provisions must proceed. The appellants, like their expert witness Dr. Osberg,
    downplay the crisis.

[191]

It was open to
    the trial judge to accept Mr. Rochons evidence over Dr. Osbergs. Although the
    great recession might look less serious after the passage of years, like
    objects in the rear-view mirror of a moving car, the Governments response must
    be assessed bearing in mind the global economic crisis then prevailing. It was
    a time when businesses were collapsing, the banking system was teetering, and
    unemployment was increasing. Demands on governments were great. Multi-billion
    dollar bailouts were necessary, and governments everywhere attempted to
    stimulate their economies. It was a truly parlous time.

(b)

The Objectives of the
ERA

[192]

Against that
    larger contextual background, Mr. Rochon gave the following evidence about the
    Governments specific objectives in enacting the
ERA
:

Under the umbrella of the Governments overriding objective of
    managing its way out of the crisis in a fiscally responsible manner, the policy
    objectives of the
ERA
were three-fold:

(i)       to help reduce undue upward pressure on
    private-sector wages and salaries;

(ii)      to provide leadership by showing restraint and
    respect for public money; and

(iii)     to manage public sector wage costs in an
    appropriate and predictable manner that would help ensure the ongoing soundness
    of the Governments fiscal position.

[193]

I make two
    observations about the role of these objectives in the constitutional analysis.
    First, the appellants take the Governments expressed objectives in enacting
    the
ERA
at face value. This is not a case in which there is a live issue
    about how the legislative objectives were to be identified, as in
Bedford

and
Carter
.
    As confirmed in response to a question from the bench in oral argument, the
    appellants do not argue that the Government had an unexpressed ulterior motive,
    as was alleged in
PSAC

v.

Canada
, [1987] 1 S.C.R. 424 (
PSAC 1987
)
.
    Second, the appellants do not argue that the objectives are either too broadly
    or too narrowly framed.

[194]

I next consider
    whether the objectives are, in principle, of sufficient importance to justify
    the establishment of limits on the freedom of association

(2)      The
    First
Oakes
Stage: Were the
ERA
s Objectives Pressing and
    Substantial?

(a)

The Governing Principles

[195]

In the s. 1 analysis, the Government must first establish that there
    is an objective of sufficient importance to warrant overriding a
    constitutionally protected right or freedom:
R. v. Big M Drug Mart Ltd.
,
    [1985] 1 S.C.R. 295, at p. 352, para. 139. Chief Justice Dickson explained that
    the objective must relate to concerns which are pressing and substantial in a
    free and democratic society before it can be characterized as sufficiently
    important:
Oakes
, at pp. 138-39, para. 69. The standard is high in
    order to ensure that objectives which are trivial or discordant with the
    principles integral to a free and democratic society do not gain s. 1
    protection: p. 138, para. 69. The objective must be directed to the
    realization of collective goals of fundamental importance: p. 136, para. 65.

[196]

This stage of
    the s. 1 analysis is usually not an evidentiary contest. Rather,

the
    proper question at this stage of the analysis is whether the Attorney General
has
    asserted
a pressing and substantial objective and a

theoretical
    objective asserted as pressing and substantial is sufficient for purposes of
    the s. 1 justification analysis:
Harper v. Canada (Attorney General)
,
    2004 SCC 33, [2004] 1 S.C.R. 827, at paras. 25-26.

[197]

There is a
    certain analytical tension between the specific legislative provisions under
    review and the legislation as a whole. On the one hand, in considering whether
    an objective is pressing and substantial, the entire legislative context must
    be taken into account, as LeBel J. stated in
R. v. Advance Cutting and
    Coring Ltd.
, 2001 SCC 70, [2001] 3 S.C.R. 209,
at
para
. 255:

The place and function of the challenged provisions in the
    legislative scheme must be carefully identified. The nature of the system and
    its broader objectives have to be kept in mind. The analysis should not
    consider the infringing provision apart from its legislative context.

[198]

On the other
    hand, as McLachlin J. observed in
RJR-MacDonald
, at para. 144: The
    objective relevant to the s. 1 analysis is
the objective of the infringing
    measure
, since it is the infringing measure and nothing else which is
    sought to be justified. The tension will vary from case to case. In my view,
    where the actuating force is a national emergency, the broader context must be
    kept in mind throughout.

This Case is Unusual

[199]

Most s. 1
Charter
cases move quickly past the first stage of determining whether a governments
    objectives were pressing and substantial. Not this one.

[200]

The appellants
    assail the Governments
ERA
objectives root and branch. They assert the
    Governments stated objectives

of

curtailing

upward

pressure

on

private
    sector

wages

and
of
ensuring

predictability

in
public sector
wages

addressed

phantom

problems
that
were

not

pressing

and substantial.

They
    characterize the objective

of

providing

leadership
as
an entirely

political

and

abstract

objective

that

cannot

be

relied

upon

to

override

Charter
rights.

[201]

This issue
    became an evidentiary battle between Mr. Rochon and Dr. Osberg for the
    appellants.
Dr. Osberg is a professor of economics at
    Dalhousie University. He was offered as an expert in labour economics,
    macroeconomics and public finance. His expertise was not questioned by the
    Attorney General, nor was he cross-examined.

For the Government, Mr. Rochon swore an affidavit, a reply
    affidavit, and a sur-reply affidavit.

[202]

The opinions of
    each witness
were supported by detailed and thorough reviews
    of economic models and studies. The application judge described these studies
    and the conclusions drawn by Mr. Rochon and Dr. Osberg at length, at paras.
    194-214.

[203]

The competing affidavits set out a debate between the witnesses
    about the legitimacy of the policy objectives proffered by the Government for
    the
ERA
in responding to
    the perceived or real pressures it faced in the crisis.

(b)

The Application Judges Assessment

[204]

I agree with the
    appellants that the application judge accepted the evidence of Mr. Rochon in
    preference to that of Dr. Osberg. This is plain from a number of his statements.
    His conclusion, on the evidence, was that the Governments objectives were
    pressing and substantial, in the context. This comes out strongest at para.
    242:

In a time of economic concern and crisis, the government sought
    to provide leadership to instil confidence in Canadians. The need for
    leadership was pressing and substantial. The objectives of ensuring that
    public-sector wages did not affect demands on the private sector and protecting
    the fiscal standing of the government, when viewed as areas where leadership
    was required, added to and augmented the pressing and substantial need for
    leadership from those we elect to provide it.

[205]

The application
    judges analysis of the competing reasoning of Mr. Rochon and Dr. Osberg was
    careful and complete.

[206]

The application
    judge assessed each of the Governments objectives leadership, reducing upward
    wage pressure on private sector wages, and ensuring the ongoing soundness of
    the Governments fiscal position  in light of the conflicting evidence.
    Although he evaluated each objective individually, the application judge saw
    the latter two objectives as being intertwined with the Governments need to
    demonstrate leadership during a time of crisis.

(i)    Leadership

[207]

The application
    judge considered first the Governments objective to provide leadership by
    showing restraint and respect for public money. Dr. Osberg opined that
    [l]eadership was not provided to Canadians by the Government through the ERA,
    and ridiculed this objective as expressing nothing more than political
    statements summarizing a public relations strategy. The application judge quite
    rightly rejected this criticism, at para. 225:

There is an unhappy tendency to use "politics" as a
    pejorative. It is not. Politics is the means by which those we elect govern. It
    is not something that can be set aside when matters of public policy are being
    considered. This was recognized by Chief Justice Dickson [in
PSAC 1987
,
    at p. 442 at para. 36]:

Due deference must be paid as well to
    the symbolic leadership role of government. Many government initiatives,
    especially in the economic sphere, necessarily involve a large inspirational or
    psychological component which must not be undervalued.

[208]

The application
    judge preferred the evidence of Mr. Rochon on the issue of leadership, stating,
    at para. 227:

On the other hand Paul Rochon has held significant leadership
    positions in the Department of Finance. It does not seem out of place to
    suggest that he would have an understanding of the role government can play in
    the face of an economic crisis. Paul Rochon noted:

...The Government needed to reassure
    households and investors that the return to fiscal deficits would be temporary
    and would not undermine the Government's commitment to long-term fiscal
    sustainability. As a spending restraint measure, the [
Expenditure Restraint
    Act
] helped to demonstrate this commitment.

[209]

Dr. Osberg
    challenged the use of budgetary restraints on the basis that they would reduce
    aggregate demand when stimulus was needed. The application judge did not accept
    that Dr. Osbergs single-minded economics perspective was appropriate. He
    stated, at para. 228:

This response does not respect the broader perspective of
    leadership referred to by Chief Justice Dickson. The balance being struck was
    to provide the assurance that the government was behaving responsibly so that
    Canadians would understand that the economic issues were being dealt with. This
    could have the effect of encouraging them to be confident in their economic
    future leading them to continue to purchase the goods and services they needed
    and wanted. Paul Rochon made this point. He said that the statement of the
    Minister of Finance was not a call for households to reduce their consumption.

[210]

The application
    judge concluded, at paras. 229-30, that the Governments objective was
    consistent with the inspirational and psychological view of leadership expressed
    by Chief Justice Dickson that leadership can function as an example, and did
    in this case, to help reduce undue upward pressure on private-sector wages and
    salaries. He added, at para. 226: I pause to observe that it is not clear to
    me why an economist [Dr. Osberg] is able to opine on leadership at this level.

(ii)   The Impact of Public
    Sector Wage Increases on the Private Sector

[211]

The application
    judge next assessed the Governments objective to help reduce undue upward
    pressure on private-sector wages and salaries.

[212]

Dr. Osberg opined
    that [p]ublic sector wages imposed no upward pressure on private sector
    wages. He took the position that public sector wages did not lead but instead
    lagged behind private sector wages, and that the federal public service was too
    small to influence private sector wages, as the application judge noted, at
    paras. 198-99.

[213]

Mr. Rochon
    responded that, according to the data, public sector wages did lead in the
    relevant time frame and, importantly, would have gone on to do so but for the
ERA
.
    Further, he pointed out, as noted by the application judge, at paras. 230-31,
    provincial governments did take steps to moderate public sector wage growth.

[214]

The application
    judge rejected Dr. Osbergs evidence, and instead accepted Mr. Rochons
    evidence that federal restraint worked as the transmission mechanism to
    signal the need for restraint in the broader public sector. He pointed out, at
    para. 230, that Dr. Osbergs approach does not address the prospect of wage
    restraint on the federal public service as an example for other levels of
    government and the broader impact extending on to the private sector. He
    preferred Mr. Rochons evidence that the federal government aimed to
    indirectly reduce pressure on private sector wages by setting an example for
    other orders of government in Canada through the introduction of the [
ERA
].
    He added, at para. 234: I take Paul Rochon to be saying that by the leadership
    it showed, in restraining wages and passing the legislation, the federal
    government did what it could to encourage the pragmatic approach the private
    sector exhibited in reopening these contracts. The application judge saw this
    as an example of the leadership referred to in
PSAC 1987
, where Dickson
    C.J.  said at p. 445, at para. 42:

[T]he leadership role of government constitutes justification
    for Parliament's legislative focus on the public sector. It was, in the
    circumstances, permissible for Parliament to decline to impose a universally
    applicable short-term controls programme on an heterogeneous labour force, and
    instead to limit its interference with collective bargaining processes to a
    discrete and relatively homogeneous group of employees. The employees in
    question shared in common an employer perceived to occupy the role of the
    national economic leader and trend-setter and they had, according to the
    evidence, a greater degree of job security than other employees, which might
    have made them less susceptible to adverse long-term effects from temporary
    controls.

(iii)  The Ongoing Soundness of the Governments Fiscal
    Position

[215]

The application
    judge considered the Governments objective to manage public sector wage costs
    in an appropriate and predictable manner that would help ensure the ongoing
    soundness of the Governments fiscal position. He set out the competing views
    of Dr. Osberg and Mr. Rochon on the evidence, at paras. 211-14, noting, at
    para. 214, the Government was responding to the crisis without the advantage of
    hindsight, and was not engaged in an academic exercise.

[216]

Dr. Osberg opined
    that [n]othing was actually done by the ERA that ensured the ongoing soundness
    of the governments fiscal position. He suggested the
ERA
was
    unnecessary because the relative savings for the Government were small and
    would make no material difference to when the Government would return to
    balance, since Canada was in such a strong fiscal position going into the
    recession.

[217]

Mr. Rochon
    pegged the annual
ERA
savings at $1 billion and, in his reply affidavit,
    stated that cumulative savings from the
ERA
over the 2008-09 to 2016-17
    period will amount to $8.1 billion. These are significant amounts for a single
    expenditure control measure.

[218]

The application
    judge analyzed this objective from the perspective of s. 1 of the
Charter
,
    at paras. 236-39. He instructed himself properly, at para. 236-37, on the need
    for strong judicial skepticism about governmental assertions about budgetary
    constraints and other pressing governmental priorities to justify limits on
Charter
rights:
Newfoundland (Treasury Board) v.
    Newfoundland and Labrador Association of Public and Private Employees
,
    2004 SCC 66, [2004] 3 S.C.R. 381, at para. 72 (
NAPE
)
.
    Despite that skepticism, the application judge accepted that this objective was
    pressing and substantial: para. 237. He noted that the economic downturn at
    that time was the worst recession in eighty years. The wage restraint plan was
    part of a large co-ordinated response that included the introduction, into the
    economy, of $40 billion in federal stimulus measures over two years.

[219]

The application
    judge rejected Dr. Osbergs evidence and the unions argument that the fiscal
    impact of the
ERA
was small and did little to advance the stated
    objectives, at para. 247. He also considered and dismissed Dr. Osbergs
    suggested alternative measures, at paras. 238 and 246, which I will address
    below in the minimal impairment analysis. Instead, at para. 239, the
    application judge quoted and accepted Mr. Rochons criticism: [Dr. Osbergs]
    statement  that the [
ERA
]
did not make any difference at all to
    expectations about Canada's long-run fiscal sustainability
 overlooks its
    importance in enhancing the credibility of the Government's management of
    public finances...

[220]

The application
    judge found that governmental leadership in an economic crisis was the critical
    element. He found, at para. 242, that the objective of protecting the fiscal
    standing of the government, when viewed as areas where leadership was required,
    added to and augmented the pressing and substantial need for leadership from
    those we elect to provide it. He added, at para. 247 that the union position
    on the small impact of the
ERA
failed to acknowledge the importance of
    leadership in times of crisis.

(c)

The Principles Applied: Pressing and Substantial Objectives

[221]

The question to
    be answered at this stage of the
Oakes
analysis is whether the
    application judge erred in finding that the Government had asserted pressing
    and substantial objectives. The appellants argue the evidence presented by Dr.
    Osberg significantly undermines the legitimacy of the objectives asserted by
    the Government so that the application judge erred in accepting those
    objectives were pressing and substantial. The appellants also argue the
    application judge erred in his resort to judicial deference.

[222]

I reject these
    arguments. In my view, the application judge gave due effect to the law in
    deferring to the Governments policy choices. Accordingly, I am of the view
    that the application judge did not err in finding that the Government asserted
    pressing and substantial objectives.

The Role of Judicial Deference

[223]

Was the
    application judges invocation of judicial deference to Parliament an error in
    principle? It was not an error.

[224]

Courts
    conducting full-scale
Oakes
assessments in relation to labour
    legislation are obliged to delve deeply into government fiscal policy and its
    determination in highly sensitive areas. Judicial probing will lead inevitably
    into real tensions about the respective roles of Parliament and the judiciary
    in governing Canada, since s. 1 of the
Charter
places courts in the role
    of final arbiter of constitutional rights. Courts have recognized, through a
    series of limiting principles, that judicial deference to government policy
    determinations is prudent as a matter of institutional capacity and the
    constitutional legitimacy of judicial review. In general terms, judges ought
    not to see themselves as finance ministers.

[225]

The first
    limiting principle is the important constitutional principle of separation of
    powers. Any democratic polity built on an institutional separation of powers
    must face questions about the role and scope of the institutional deference
inter
    se
, including judicial deference to Parliament.  The principle of
    separation of powers culminates centuries of evolution during which the power
    of the Crown gradually devolved to distinct organs with separate functions,
    as Karakatsanis J. noted in
Ontario v.
    Criminal Lawyers Association of Ontario
, 2013 SCC 43, [2013] 3
    S.C.R. 3, (
CLAO
) at para. 28. She stated:

The development of separate executive, legislative and judicial
    functions has allowed for the evolution of certain core competencies in the
    various institutions vested with these functions. The legislative branch makes
    policy choices, adopts laws and holds the purse strings of government, as only
    it can authorize the spending of public funds. The executive implements and
    administers those policy choices and laws with the assistance of a professional
    public service. The judiciary maintains the rule of law, by interpreting and
    applying these laws through the independent and impartial adjudication of
    references and disputes, and protects the fundamental liberties and freedoms
    guaranteed under the
Charter
.

[226]

The second
    limiting principle is the courts recognition of the respective institutional
    capacities of each branch, which play critical and complementary roles in our
    constitutional democracy:
CLAO
, at

para. 29. Karakatsanis J.
    cautioned at para. 29: each branch will be unable to fulfill its role if it is
    unduly interfered with by the others.

[227]

The third
    limiting principle is a corollary of the second, and recognizes the core
    competencies to which Karakatsanis J. referred. Of relevance to this case, the
    courts have accepted the Governments core competencies include the
    determination of economic policy, budgeting decisions, the proper distribution
    of resources in society,
labour relations regulation, and how best to respond to situations of crisis.

[228]

The
    determination of economic policy is among the core competencies of the
    legislature and the executive, not the judiciary, particularly in circumstances
    of national importance where the solutions to a problem are uncertain. This is
    where the democratic principle must surely bite most deeply.

[229]

Judicial
    deference is not a new concept. In pre-
Charter
days, a parallel issue
    arose with respect to the division of powers and the reach of the Peace, Order
    and Good Government clause in the
Constitution Act, 1867
. Chief Justice
    Laskin made an apposite observation in
Reference re Anti-Inflation Act
    (Canada),
[1976] 2 S.C.R. 373, at p. 425:

In my opinion, this Court would be unjustified
    in concluding, on the submissions in this case and on all the material put
    before it, that the Parliament of Canada did not have a rational basis for
    regarding the
Anti-Inflation Act
as a measure which, in its judgment,
    was temporarily necessary to meet a situation of economic crisis imperiling the
    well-being of the people of Canada as a whole and requiring Parliament's stern
    intervention in the interests of the country as a whole.

[230]

Chief Justice
    Dickson expressed strongly the same view in his partial dissent in
PSAC 1987
at p. 442, para. 36, to which
    the application judge referred:

In my opinion, courts must exercise considerable caution when
    confronted with difficult questions of economic policy. It is not our judicial
    role to assess the effectiveness or wisdom of various government strategies for
    solving pressing economic problems. The question how best to combat inflation
    has perplexed economists for several generations. It would be highly
    undesirable for the courts to attempt to pronounce on the relative importance
    of various suggested causes of inflation, such as the expansion of the money
    supply, fiscal deficits, foreign inflation, or the built-in inflationary
    expectations of individual economic actors. A high degree of deference ought
    properly to be accorded to the government's choice of strategy in combatting
    this complex problem.

[231]

Budgeting
    decisions are plainly within the core competencies of the legislature and the
    executive. As Binnie J. observed in
NAPE
,
    at para. 83, in certain types of decisions there may be no obviously
    correct or obviously wrong solution, but a range of options each with its
    advantages and disadvantages. He added: Governments act as they think proper
    within a range of reasonable alternatives, drawing on the Courts
    acknowledgement in
M. v. H.,
[1999] 2 S.C.R. 3,

at para. 78, that
    the role of the legislature demands deference from the courts to those types
    of policy decisions that the legislature is best placed to make.

[232]

Justice Binnie
    also cited, at para. 83, La Forest J.s statement: It is also clear that while
    financial considerations alone may not justify
Charter
infringements ...
    governments must be afforded wide latitude to determine the proper distribution
    of resources in society:
Eldridge v. British Columbia (Attorney General)
,
    [1997] 3 S.C.R. 624, at para. 85;
see also
Provincial
    Court Judges Association of New Brunswick v. New Brunswick
, 2005
    SCC 44, [2005] 2 S.C.R. 286, at para. 30.

[233]

The Supreme Court has recognized the
    regulation of labour relations is a core government competency. It
involves
    issues of a complex and sophisticated nature that require
the balancing of
competing
interests and compromise. Here too,
    judicial deference to legislative choices is due, within limits.
The
    Supreme Court has recognized the complex interests involved in labour
    legislation and has on occasion expressed its reluctance to interfere with the
    balance struck by the legislator:
United
    Food and Commercial Workers Local 1518 (UFCW) v. K-Mart Canada Ltd
.,
    [1999] 2 S.C.R. 1083, at para. 62.

[234]

Finally, and
    most importantly, it is a core function of government to provide leadership in
    times of crisis, when something must be done to protect the common good. Chief
    Justice Dickson made the point clearly in
PSAC 1987
, at p. 442, para. 36:

Due deference must be paid as well to the symbolic leadership
    role of government. Many government initiatives, especially in the economic
    sphere, necessarily involve a large inspirational or psychological component
    which must not be undervalued.

He added, at p. 445, para. 42, the leadership role of
    government constitutes justification for Parliament's legislative focus on the
    public sector.

[235]

In difficult
    times governments have a large margin of appreciation within which to make
    choices:
NAPE
, at para. 84,
per
Binnie J. He also added that the
    scope of that margin will be influenced, amongst other things, by the scale
    of the financial challenge confronting a government.

[236]

All of these
    core competencies of government are implicated deeply in this case. In general
    terms, the closer the decision under review is to the core competency of
    Parliament, the higher the degree of judicial deference, but deference never
    amounts to submission, since that would abrogate the courts constitutional
    responsibility. Chief Justice Dickson, said, at p. 442, para. 36 of
PSAC
    1987
: The role of the judiciary in such situations lies primarily in
    ensuring that the selected legislative strategy is fairly implemented with as
    little interference as is reasonably possible with the rights and freedoms guaranteed
    by the Charter. (See also
RJR-MacDonald,
at
    para. 136.)

[237]

The application
    judge invoked the principle of judicial deference to Parliament at several key
    points in his reasoning. He noted, at para. 215, the difficulty of assessing
two divergent views in a highly technical area dealing with the
    governments response to a global concern.
He set the issue of
    deference squarely, at para. 220:

It is not a matter of who is right. The issue remains whether,
    in the circumstances, any breach of the freedom of association falls within
    such reasonable limits as can be demonstrably justified in a free and
    democratic society. In searching for the answer some measure of deference is to
    be given to the government's choice of strategy. I say "some measure"
    mindful of the admonition of counsel for PIPSC that any deference should not
    lower the standard of justification. This is not a question of mindless
    genuflection in the direction of the government. Rather it is an
    acknowledgement that in the economic sphere there are complex choices to be
    made and difficult decisions to be taken.

[238]

The authorities
    plainly support the application judges invocation of judicial deference in the
    circumstances of this case. He made no error in doing so.

(d)

Conclusion on Pressing and Substantial Objectives

[239]

The appellants
    argue that the application judge erred by accepting the objectives asserted by
    the Government despite the evidence of Dr. Osberg questioning their legitimacy.
    I reject this submission.

[240]

As noted, the
    Government could have succeeded at this stage by asserting a theoretical
    objective. However, the evidence supports its position as well. The application
    judge accepted the evidence of Mr. Rochon in preference to that of Dr. Osberg
    where they conflicted. He did so for the reasons set out above. The appellants
    have not established the application judge made any palpable and overriding
    errors in his factual findings. Nor have they established that the application
    judge made any errors in principle, or that he reached conclusions that were
    unsupported, arbitrary, or insufficiently precise. At most, the appellants
    criticisms amount to pointing out conflicting evidence. Appellate
    intervention is therefore not justified:
Carter
, at para. 109.

[241]

Not only do I
    defer to the application judges finding that the Governments objectives were
    pressing and substantial, I agree with that finding.

[242]

The detailed
    nature of the exercise in this appeal leads me to observe that the court should
    generally accept Parliaments objectives at face value, unless there is an
    attack on the good faith of the assertion of those objectives or on their
    patent irrationality.

(3)      The Second
Oakes
Stage: Were the
ERA
s Measures Proportional?

[243]

The task in the
    second stage of
Oakes
is to make the proportionality determination. The
    court must assess whether the means chosen by the Government to accomplish its
    ends were: first, rationally connected with the ends; second, minimally
    impairing; and third, proportional as between the deleterious and salutary effects
    of the law, making it just for the Government to require some individuals or
    groups to bear the negative effects of the means in order to secure the
    positive effects of the ends for the common good.

[244]

For the purpose
    of this determination, the measures identified in the previous section of these
    reasons as limits of s. 2(d)
Charter
rights are the means to be assessed
    against the Governments ends. Were these means proportional? The application
    judge found they were, and I agree.

(a)

Were the Limits Rationally Connected?

(i)    The
    Governing Principles

[245]

The evidentiary burden at this stage of the analysis is not
    particularly onerous:
Little Sisters Book and Art Emporium v. Canada
    (Minister of Justice)
, 2000 SCC 69, [2000] 2 S.C.R. 1120, at para. 228.
Even
    so, the appellants have chosen this stage as the second focus of their attack.

[246]

At this stage, t
he Government must establish a causal connection
    between the infringement and the benefit sought on the basis of reason or
    logic:
RJR-MacDonald Inc.
, at para. 153;
Carter
, at para. 99. A
    l
aw that limits
Charter
rights must be carefully
    designed to achieve the objectives in question and should not be arbitrary,
    unfair, or based on irrational considerations:
Oakes
, at p. 139.
Where
    the legislation at issue has more than one goal, any of them can be relied upon
    to meet the s. 1 test:
Alberta v.
Hutterian Brethren of Wilson Colony
,
    2009 SCC 37, [2009] 2 S.C.R. 567, at paras. 44-45.

[247]

Professor Peter Hogg suggests that

the
    requirement of a rational connection has very little work to do
:
Constitutional Law of Canada
, loose-leaf
    (Rel-No. 1 2014), 5th ed. (Toronto: Carswell, 2007), vol. 2,
at §38.12.
Provided that the impugned measure shows care of design and lack of
    arbitrariness and provided that it furthers an important government aim in a
    general way, it will pass the rational connection branch of the analysis:
Canada
    (Human Rights Commission) v. Taylor
, [1990] 3 S.C.R. 892, at pp. 925-26.

[248]

A rational connection can be established on a civil standard,
    through reason, logic or simply common sense:
R. v. Lucas
, [1998] 1
    S.C.R. 439, at para. 53. Similarly, [l]ogic and reason, combined with the
    evidence that is available can establish a rational connection:
R.
v. Bryan
, 2007 SCC 12, [2007] 1 S.C.R. 527, at para. 41.

[249]

The Government need only demonstrate a reasonable prospect that
    the limiting measure will further the objective to some extent, not that it
    will certainly do so:
Hutterian Brethren
, at para. 48.
For
    example, in
McKinney v. University of Guelph
, [1990] 3 S.C.R. 229, some
    evidence showed a correlation between mandatory retirement and generating new
    jobs for younger faculty, while other evidence suggested that there was none.
    The court found that this conflicting evidence provided a sufficient basis to
    meet the rational connection test.

(ii)   The
    Application Judges Decision

[250]

The application judge found a rational connection between the
ERA
and the Governments objectives. His analysis focused on the wage increase
    caps; he did not separately assess the individual means adopted by the
ERA
.
    He stated his conclusion,
at para. 244:

The economy is influenced by public
    policy. In a time of economic uncertainty it is the role of government to
    provide leadership. The passage of the
Expenditure Restraint Act
was
    part of the program by which the government demonstrated leadership.
It was
    rationally connected to the objective of providing leadership on the
    inspirational and psychological level envisaged by Chief Justice Dickson and by
    way of setting an example for other levels of government
. This was
    confirmed by the objective not to allow wage increases in the federal public
    service to negatively influence the broader public or private sectors and to
    set an example by controlling its own spending. An acceptance of the evidence
    of Paul Rochon leads to the understanding that, while others may disagree with
    the substance,
there was nothing arbitrary or irrational about the actions
    taken by the government
. [Emphasis added.]

(iii)  The Principles Applied: Rational Connection

[251]

PIPSC concedes
    the imposition of wage increase caps is rationally connected to the
    Governments fiscal objectives, but both appellants argue it was not rationally
    connected to the Governments objective of reducing upward pressure on private sector
    wages and salaries. Proving there was such a connection was the burden of much
    of Mr. Rochons evidence, which the application judge accepted while rejecting
    Dr. Osbergs contrary evidence.

[252]

The Governments
    response to the economic crisis was not hasty or ill-considered, but followed
    the data. In the course of preparing its response, the Government consulted
    various studies and modelled some scenarios as described by Mr. Rochon. Dr.
    Osberg challenged the utility of calibrated computable general equilibrium
    (CCGE) modeling methodology in determining how public sector wage setting
    impacts on private sector wage setting, as the application judge stated, at
    paras. 201-208. But the application judge accepted Mr. Rochons evidence that
    such studies are routinely used by governments, international bodies such as
    the Organisation for Economic Co-operation and Development and the International
    Monetary Fund, and private sector organizations, in order to determine, he
    noted, at para. 207, how wage setting in the public sector can impact on wage
    setting in the private sector.

[253]

Moreover, the
    evidence establishes that it was the Governments desire to avoid long-term
    deficits that led to spending restraints. The application judge accepted, at
    para. 21, the Governments view that compensation costs, at 37% of direct
    program expenditures, were significant. As noted above, the Treasury Board
    Secretariat developed an options paper on controlling such costs. Of the
    options presented, the Government elected to limit wage increases, as the
    application judge noted, at para. 22:

[L]imited wage increases were recommended rather than wage
    freezes or wage reductions. It was believed that freezes or reductions could
    not be successfully negotiated. It was hoped that limited wage increases could
    be achieved through the collective bargaining process.

(iv)  Conclusion on Rational Connection

[254]

The application
    judge found the
ERA
s imposition of wage increase caps was rationally
    connected with reducing undue upward pressure on private sector wages and
    salaries. He also found also that the Government exercised leadership in
    showing restraint in public spending and in fiscal responsibility, signalling
    the need for both to the private sector and to the broader public sector.

[255]

It is self-evident
    that all of the measures attacked by the appellants would have positive impacts
    on expenditures and would meet the rational connection test with respect to
    ensuring the ongoing soundness of the Governments fiscal position, and the Governments
    objective of demonstrating leadership and reassuring Canadians in a perilous
    economic climate.

[256]

The appellants have not demonstrated that the application judges
    decision is unsupported, arbitrary, insufficiently precise, or otherwise in
    error, so appellate intervention is not justified. At most, the appellants have
    pointed to competing evidence that the application judge chose not to accept.
    There is, therefore, no basis for interfering with the application judges
    conclusion:
Carter
, at para. 109.

[257]

The
ERA
s
    limits of the appellants rights were rationally connected with the
    Governments objectives.

(b)

Were the Measures Minimally Impairing?

(i)    The Governing Principles

[258]

The Supreme Court of Canada outlined this step of the
Oakes
test in
Carter
, at para. 102:

[T]he question is whether the limit on the right is reasonably
    tailored to the objective.  The inquiry into minimal impairment asks
    whether there are less harmful means of achieving the legislative goal (
Hutterian
    Brethren
, at para. 53).  The burden is on the government to show the
    absence of less drastic means of achieving the objective in a real and
    substantial manner (
ibid
. at para. 55).  The analysis at this
    stage is meant to ensure that the deprivation of
Charter
rights is
    confined to what is reasonably necessary to achieve the states object.

[259]

Judicial deference to Parliament at the minimal impairment stage has
    taken the form of a flexible approach that is sensitive to the context of the
    law in issue. McLachlin J.s formulation of the test in
RJR-MacDonald
,
    at para. 160, was adopted by the court in
Libman v. Quebec (Attorney General)
, [1997] 3 S.C.R. 569, at para. 58:

The impairment must be minimal, that is, the
    law must be carefully tailored so that the rights are impaired no more than
    necessary. The tailoring process seldom admits of perfection and the courts
    must accord some leeway to the legislator. If the law falls within a range of
    reasonable alternatives, the courts will not find it over broad merely because
    they can conceive of an alternative which might better tailor objective to
    infringement

[260]

Similarly, as Gonthier J. explained, it is not sufficient that a
    judge, freed from all such constraints, could imagine a less restrictive
    alternative:
Nova Scotia (Workers Compensation Board) v. Martin
, 2003 SCC 54, [2003] 2 S.C.R. 504, at para. 112. Wilson J. held
    that only where there are alternative measures clearly superior to the
    measures in current use would a law fail at this stage:
Lavigne v. Ontario
    Public Service Employees Union,
[1991] 2 S.C.R. 211
, at p. 296, para. 170. McLachlin C.J. and Deschamps J. explained
    that [t]he Court will not interfere simply because it can think of a better,
    less intrusive way to manage the problem:
Montreal (City) v. 2952-1366
    Quebec Inc
., 2005 SCC 62, [2005] 3 S.C.R. 141, at para. 94. They added:
    What is required is that the [government concerned] establish that it has
    tailored the limit to the exigencies of the problem in a reasonable way.

[261]

Parliament need not choose the absolutely least intrusive means to
    attain its objectives; it must only come within a range of means which limit
    the
Charter
right or freedom as little as reasonably possible:
R. v. Swain
, [1991] 1 S.C.R. 933.

(ii)  The Application Judges Assessment

[262]

The application
    judge was deeply impressed by the scope and ferocity of the global economic
    crisis and its possible negative effects on Canada. He saw these threats as the
    Governments dominant concern.

[263]

The application
    judge found, at para. 246, that efforts were made to minimize the intrusive
    effects of the
ERA
. He noted that:

Employees would still see increases, albeit lesser than in
    previous years. Ancillary compensation features such as movement within the pay
    ranges, leave, performance pay, overtime and leave would be unaffected. The
    measures were time-limited.

[264]

The application
    judge pointed out, at para. 106, the
ERA
did not single out union
    members, but applied to the federal public sector as a whole. A freeze was not
    imposed, although it was considered, as he noted, at paras. 22 and 153. As the
    application judge also pointed out, the right to strike was not removed, and
    the 2007-2008 year wage cap was eventually increased through bargaining from
    1.5% to 2.3%. The unions also negotiated benefits improvements.

[265]

The application
    judge considered the rollbacks to the wage terms in existing contracts of 1%
    for one or two years to be modest and to constitute no more than a minimal
    impairment to the freedom of association: para. 246.

[266]

The application
    judge considered and rejected the alternatives to the
ERA
proposed by
    Dr. Osberg, as better ways to save money, at paras. 238 and 246. These included
    a smaller reduction in the GST cut or in the cut of corporate taxes. The
    application judge criticized this single-minded focus on cost savings as
    missing the leadership function of the
ERA
in managing the economic
    crisis.

[267]

Chief Justice McLachlin
    explained the relationship between minimal impairment and judicial deference in
Canada (Attorney-General) v JTI-Macdonald Corp
., 2007 SCC 30, [2007] 2
    S.C.R. 210, at para. 43. She noted: [T]his Court has held that on complex
    social issues, the minimal impairment requirement is met if Parliament has
    chosen one of several reasonable alternatives. She counselled a certain
    measure of deference where the problem Parliament is tackling is a complex
    social problem. This is especially true where there are many ways to approach
    a problem, and no certainty as to which will be the most effective. Chief
    Justice McLachlin cautioned against the abuse of hindsight, noting: It may, in
    the calm of the courtroom, be possible to imagine a solution that impairs the
    right at stake less than the solution Parliament has adopted. She pointed to
    the complications posed when a particular legislative regime may have a number
    of goals, and impairing a right minimally in the furtherance of one particular
    goal may inhibit achieving another goal. In such circumstances, as in this
    case, [c]rafting legislative solutions to complex problems is necessarily a
    complex task that requires weighing and balancing.

[268]

The application
    judge relied, at para. 245, on the words of McLachlin C.J. and concluded, at
    para. 246: It would be preferable if the court did not engage in second
    guessing Parliament or re-evaluating the strategies of the government where
    complex policy issues are at stake. This was particularly important in view of
    the economic crisis at hand and what he saw as the Governments efforts to
    minimize the effects of the
ERA
on the appellants members. He observed,
    at para. 156, that giving effect to the unions position would mean that the
    Government could never act legislatively with speed and determination in this
    area, even in a crisis.

(iii)       The
    Principles Applied
: Minimal
    Impairment

[269]

I address each
    identified limit in turn. I then consider PIPSCs argument that the

ERA's

five-year

restraint

period

is

too

long

to

minimally

impair

freedom

of

association,
    and to its proposed alternative of substituting funding envelopes for wage
    increase caps.

The imposition of wage increase caps in bargaining and arbitration

[270]

The application
    judges analysis was primarily concerned with whether the
ERA
s wage
    increase caps were minimally intrusive. The appellants have not demonstrated
    that the judge made any palpable and overriding errors or errors of principle
    in his assessment. I agree with him.

[271]

I would add
    another fact that reinforces the application judges conclusion. As noted, by
    the date of the
ERA
s enactment in March 2009, a large majority of the unionized
    federal employees covered by it had already reached agreements consistent with
    it. Only a minority did not reach settlement.

[272]

As explained
    above, the
ERA
s imposition of the wage increase caps gave effect
    generally to the results of free collective bargaining that were the most
    favourable to the unions, having been negotiated by the largest and most
    powerful union. This was recognized in
Meredith
,
Dockyard Trades #2
,
    and the
Syndicat canadien
.

The
    retrospective application of the wage increase limits to fiscal year 2006-2007,
    and the imposition of wage increase rollbacks on previously negotiated
    collective agreements

[273]

I address these limits
    together, since the Governments justification for both is similar. Were the
    retrospective application of the wage increase limits to fiscal year 2006-2007,
    and the imposition of wage increase rollbacks on previously negotiated
    collective agreements minimally impairing?

[274]

The
ERA
imposed a wage increase cap of 2.5% for fiscal year 2006-2007. The rollbacks
    affected seven PSAC and two PIPSC bargaining units. Apart from the effect on
    wages, the appellants pointed out that there would be a reduction in pension
    entitlements for those close to retirement, although there is no evidence on
    the incidence or the actual effects.

[275]

The appellants
    challenge both measures and submit they were not minimally impairing. They
    argue: first, the

ERA

did

not

need

to

apply

to

fiscal

year

2006-2007

at

all

because

only three
minor
collective

agreements

were

outstanding

for

that

period; and second, the
ERA
did not
    need to override the few existing collective agreements because they exerted no
    meaningful upward pressure on wages and were not unpredictable in their impact
    on the Governments fiscal plan.

[276]

The financial
    effect of exempting the units affected by these measures would have been
    negligible. Mr. Rochon readily admitted in cross-examination it would not have
    made a difference to the governments objectives if the impact of the
ERA
were [$]8.1 billion or [$]8.2 billion.

[277]

The appellants
    argue that the Government could have let the few remaining negotiations for 2006-2007
    conclude naturally; this would have been appropriate, since the Government gave
    no advance warning of its intention to reach back one year or consult about it,
    and did not respond during negotiations to inquiries on the subject. One PIPSC
    unit, the Research Group, had gone to arbitration for fiscal year 2006-2007 on
    the understanding that the year would not be subject to the restraint. It was
    seeking wage increases and wage-restructuring. Its arbitration award was
    dictated by the
ERA
.

[278]

Similarly, the
    appellants argue the Government could and should have let the existing
    collective agreements run out without rollbacks, since collective agreements
    are sacrosanct. These would have been modest exceptions, alongside the five
    other exceptions Ms. Laurendeau listed in her affidavit, reviewed by the
    application judge at para. 151.

[279]

I reject these
    arguments for two reasons.

[280]

First, they
    share the common premise that the Governments only legitimate objective was
    cost savings, consistent with the appellants position that the Governments
    other stated objectives were not legitimate. I find most persuasive the
    application judges rejection of this single-minded focus on cost savings,
    which ignores entirely the leadership function of the
ERA
in managing
    the economic crisis.

[281]

Second, the
    Governments explanation for its approach in reaching back to include 2006-2007
    in setting the restraint period, and in imposing rollbacks through the
ERA
,
    is that doing so was to be consistent and fair to all federal employees who
    would be treated equally. Allowing for some exceptions, beyond those narrow
    ones provided, would have risked more exception-seeking and possible failure of
    the entire scheme. The evidence supports this explanation.

[282]

In her
    affidavit, Ms. Laurendeau, who was responsible for the management of
    compensation and labour-management relations for the Treasury Board, stated:
    In order for the
ERA
to function as planned, it needed to cover all the
    fiscal years that had not yet been settled. She explained that the
ERA
reached back to the 2006-2007 fiscal year to bring in three bargaining units
    that had not yet settled: the Law Group, Ship Repair West, and the Research
    Group. Ms. Laurendeau explained: The Government was concerned that any
    arbitral awards, beyond the ERA authorized increases for fiscal years
    2006-2007, 2007-2008, and 2008-2009, would have had a direct and significant
    impact of the predictability and size of compensation costs for all future
    years. She added:

To be consistent and fair to the bargaining agents and units
    with concluded collective agreements, the Secretariat was of the view that the
    Act should also apply to the above-mentioned groups. As such, wage increases
    provided for by the Act for 2006-2007were consistent with the well-established
    pattern amount of 2.5% for that year.

[283]

Ms. Laurendeau
    was asked, in cross-examination, if there had been internal discussions about
    whether the smaller savings associated with these affected units needed to be
    included in the legislation to ensure predictability. Her answer, given in an
    undertaking, was that there were such discussions. The Government took the view
    that differential treatment would create unpredictability in negotiations and
    arbitrations. She explained: It was determined that the legislation was still
    necessary because if any bargaining unit received increases beyond the pattern
    amount, it would create internal inconsistency which could result in a
    precedent that would be utilized by other bargaining units when negotiating and
    in arbitral awards in the future. The explanation in terms of the possible
    future bargaining dynamic the Government was concerned about was expressed by
    PSAC in its factum, supported by Mr. Jellys evidence: PSAC's evidence

highlights

the

permanent

nature

of

these

measures

as they lower the floor from which subsequent

rounds

of

bargaining

begin.

[284]

Mr. Rochon gave
    a similar explanation in cross-examination: [T]hroughout the analysis, there
    is an emphasis on ensuring that all employees were treated fairly, and I
    suspect if we had opened or allowed exceptions for one group we would then be
    looking at having to do that for other groups. He was concerned, as the
    Treasury Board was, that if it allowed for exceptions in one area it would
    need to allow for exceptions in other areas, and therefore wouldnt be able to
    deliver on the overall objective. He added:  if one does start creating
    exceptions where does that end, and [i]t becomes a fiscal difficulty if it
    leads to a situation where effectively you are not able to impose the wage
    measure on the broader public service.

[285]

In my view,
    having regard to the bargaining dynamic and the crisis context, the
    Governments explanation is both plausible and reasonable. The choices it made
    in managing the labour relations dynamic to achieve its objectives in
    responding to the crisis fall within the range of reasonable alternatives open
    to the Government.

The prohibition
    on negotiating catch-ups in bargaining after the restraint period

[286]

As noted above, I disagree with the appellants interpretation of
    ss. 57-58 of the
ERA
. In my view, these provisions only ensure that the
    savings achieved by the Government were permanent and these limits are simply a
    corollary of the wage increase caps. Given that the wage increase caps are
    minimally impairing, it follows that the prohibition on negotiating catch-ups
    passes this stage of the test as well.

Was the

ERA's

five-year

restraint

period

too

long?

[287]

PIPSC argues
    that the
ERA
s restraint period, which was a maximum of five years, is
    simply too long to be minimally impairing. It relies on the affidavit of
    Professor Patrick Macklem, who cites a statement by the Committee of Freedom of
    Association of the International Labour Organization that [r]estraints on
    collective bargaining for three years are too long. The application judge did
    not refer to the issue of the restraint periods duration or cite Professor
    Macklem.

[288]

I draw the
    inference that this issue, while raised technically in the material, was not
    pressed in argument by PIPSC at a level sufficient to engage the application
    judges attention. In any event, a three-year limit would appear to be quite
    arbitrary, since it was evident that the global economic crisis was projected
    to last more than three years. I also point out that in the negotiations with
    PIPSC that eventually collapsed before the
ERA
s enactment, the parties
    did manage to agree on the length of the collective agreement, which would have
    covered the restraint period. I therefore do not take this to be a serious
    issue.

[289]

The appellants
    have provided no legal authority for the proposition that a restraint period
    longer than three years cannot be minimally impairing. In any event, it is not
    the job of the courts to micromanage the choices made by the Government and it
    was open to the application judge to find that the
ERA
was minimally
    impairing with a five-year restraint period.

PIPSCs
    Alternative: Funding Envelopes

[290]

PIPSC argues
    that instead of wage increase caps, the Government could have allocated a
    funding envelope for each bargaining unit and allowed the parties to negotiate
    how the funds would be applied within that envelope. This alternative was not
    addressed by the application judge, and I was not able to find any reference to
    it in the affidavit material filed by PIPSC. I draw the inference that this was
    a new issue before this court. I would refuse to deal with it in the absence of
    an evidentiary record showing how such an approach would impact on current
    federal collective bargaining practices. Further, the fact that one could
    imagine another approach does not mean that the range of reasonable
    alternatives considered by the Government was inadequate. It was not.

(iv)  Conclusion
    on Minimal Impairment

[291]

I agree with the
    application judge that the minimal impairment issue must be considered in light
    of the unprecedented global economic crisis then gripping the world and Canada,
    to which the Government needed to fashion a response. The evidence, both in the
    record and in the arena of judicial notice, amply justifies his approach. The
    Governments two-fold response of stimulus spending, coupled with cost
    restraints to maintain fiscal soundness, was amply explained. The application
    judge properly instructed himself to view economic justifications for
Charter
infringements with strong skepticism. He found the Government made efforts to
    minimize the
ERA
s impacts.  And, ultimately, he properly deferred to
    the Governments selection of measures to achieve its objectives, given the
    severity of the crisis, the complexity of the issues, and the need to respond
    with alacrity.

[292]

The application
    judge rightly rejected the appellants arguments that neither the extension of
    the restraint period back one year, nor the rollbacks, were necessary. The
    governments explanations for these measures are reasonable and plausible. They
    were rooted in fairness to all employees, including those not represented by
    unions, and were needed to manage the bargaining process. The alternative
    measures raised by the appellants were simply not responsive to the exigencies
    faced by the Government and the pressing and substantial objectives that it
    set.

[293]

I echo and
    underline the application judges statement: It would be preferable if the
    court did not engage in second guessing Parliament or re-evaluating the
    strategies of the government where complex policy issues are at stake.
    Judicial second-guessing, in hindsight, of Parliaments response to a fast
    moving crisis, in light of the polycentric nature of the issues, must be
    discouraged.

[294]

I would defer to
    the application judges finding that efforts were made to minimize the
    intrusive effects of the
ERA
.
    I agree with his assessment.

(c)

The Balancing Step

(i)    The Governing Principles

[295]

The
Oakes
framework is intended to structure the analysis, and thereby constrain and
    discipline courts, and render as intelligible and as transparent as possible,
    the exercise of judicial discretion in the balancing step.

[296]

In
Hutterian
    Brethren
, at para. 73, McLachlin C.J. set out the basic question at the
    third step of the proportionality analysis: Is the limit on the right
    proportionate in effect to the public benefit conferred by the limit? This
    analysis "takes full account of the severity of the deleterious effects
    of a measure on individuals or groups: para. 76. It entails a broad
    assessment of whether the "benefits of the impugned law are worth the cost
    of the rights limitation", or whether "the deleterious effects are
    out of proportion with the public good achieved by the infringing
    measure": paras. 77-78.

[297]

The balancing endeavour must take into account the constellation
    of factors involved, and all of the Governments reasons cumulatively,
    recognizing the possibility that none of them, taken in isolation, would
    necessarily be sufficient to justify the rights limitation:
NAPE
, at
    para. 85.

(ii)   The
    Application Judges Assessment

[298]

The appellants
    argued that the beneficial fiscal effects of the
ERA
were small. The
    application judge rejected this argument, noting, at para. 236:

In some sense it depends on how you look at it. The
Expenditure
    Restraint Act
is said to have annual savings of $1 billion. This is roughly
    equivalent to the annual expenditures of each of the Department of Justice and
    the Department of the Environment.

[299]

More
    importantly, the application judge rejected the appellants singular emphasis
    on cost savings, observing at para. 247, the unions had again failed to
    acknowledge the importance of leadership in times of crisis. He added:
    Leadership was central to the response of the government. He pointed out:
    Its salutary effect can be measured against a consideration of the likely or
    anticipated response of Canadians if there was none.

[300]

The application
    judge noted, at para. 248, the negative impact asserted by the appellants, that
    the
ERA
could undermine the willingness of employees to come together
    and work towards common workplace objectives. He responded that this would be
    unfortunate, but pointed out that behind s. 1 is the acknowledgment that from
    time to time some Canadians are asked to accept a limitation in their
    individual rights in recognition of the common good.

(iii)  The
    Principles Applied: Balancing

[301]

This is the step
    at which the benefits to the common good are to be weighed against the
    detriments to the rights of the affected individuals or groups. However, there
    is no common basis, or common denominator, for evaluating the competing claims
    between the individuals and groups negatively affected by a law, and the
    benefits to the common good. This is the core problem with the determination of
    proportionality. Nonetheless, the court must declare an outcome.

[302]

In the balancing
    step, the court is required to consider proportionality as between the
    deleterious and salutary effects of the law, and determine whether it is just
    for the legislation to require some individuals or groups to bear the negative
    effects of its measures in order to secure the positive effects of the ends for
    the common good. However, the detriments suffered by individuals and groups in
    this case, and the benefits that accrue to the common good are, as noted,
    frankly incommensurable.

The Negative Effects on
    Individuals and Groups

[303]

Any reduction in
    wages that would otherwise have been received clearly has an adverse effect on
    individuals. Since the settlement with the majority of the public service drove
    the determination of the wage increase caps, it is difficult to imagine that continuation
    of an unfettered bargaining process for the remaining minority of units would
    have produced significantly different outcomes. There is little financial value
    that can be attributed to this effect.

[304]

I take the same
    approach to calculating losses for those on whom a wage increase of 2.5% was
    imposed for the fiscal year 2006-2007.

[305]

For those on
    whom rollbacks were imposed, the costs can be calculated as indicated earlier
    in these reasons. On an individual basis, and in the context of their annual
    salaries, the differences are not significant, as the application judge found.

[306]

In the absence
    of evidence, it is impossible to value the inability to negotiate catch-up for
    the restraint period.

[307]

For those in the
    last few years of their working life, the detrimental effect on their pensions
    would be permanent.  There is, however, no information on the actual effects on
    pensions or how many people were affected.

[308]

I recognize that
    wage restructuring was an issue for some bargaining units. However, there is no
    evidence on what the impact of wage restructuring would have been on
    individuals, and so any costs cannot really be calculated.  But wage
    restructuring in its nature is a zero-sum exercise, so that within a particular
    complement, some employees would be winners, and some losers.

[309]

The appellants
    also argue that the harm done to the institution of collective bargaining is
    something that must be factored into the equation. I agree. But in my view, the
    impact is negligible. Candidly, public sector unions are powerful in Canada. It
    is hard to imagine any civil servants wishing to abandon the
Wagner Act
model of collective bargaining because of some temporary setbacks under the
ERA
.
    There is simply no other employment relationship structure on offer that would
    be more effective. I therefore do not accept the unions argument, expressed by
    the application judge, that the experience of the
ERA
would reduce
    ...the willingness of employees to come together and work towards common
    workplace objectives. I would not give this factor much weight in the balance.

[310]

The pattern
    bargain that engendered the
ERA
s wage increase caps was reasonable. The
    court must take seriously the concession in PSACs factum, that the rates of
    pay in the
ERA
were reasonable in this context and that employees would
    have thought so as well, and its statement that [e]ach of these units,
    however, made substantial gains in exchange for agreeing to the Treasury
    Boards proposed rates of pay. As noted, the resulting agreements were in line
    with those signed by some of the largest union after a process of free
    negotiations. Therefore, the pattern was not unfair or unreasonable.

The Benefits to the Common
    Good

[311]

The societal
    benefits flowing to the common good from the imposition of the
ERA
were considerable. The Government was
    able to find some of the savings needed to finance its stimulus measures, which
    were necessary to the Canadian economy in a time of crisis, without sacrificing
    its long-term commitment to return to fiscal balance. The Government was also
    able to lead employers in the broader public sector to similar fiscal
    responsibility by example. This was, in turn, of assistance to the struggling
    private sector. The Government was able to persuade Canadians that the Canadian
    economy was being well managed and would survive global economic crisis in
    reasonable shape. These were the Governments objectives.

[312]

The role of
    government leadership in a crisis should not be minimized, as Dickson C.J.
    pointed out. I reject the appellants argument that

providing

leadership
is
an entirely

political

and

abstract

objective

that
the Government
cannot rely

on

to
limit

Charter
rights. Leadership is indeed political, in the best sense of that word. It
    is especially necessary in times of crisis like the great recession.

(4)      Conclusion
    on Section 1 of the
Charter

[313]

To summarize, I
    defer to and agree with the application judges finding that the Governments
    objectives were pressing and substantial in the economic crisis affecting
    Canada. I agree with his finding that the wage increase caps were rationally
    connected with those objectives. I also defer to and agree with the application
    judges findings that the other measures were minimally impairing, and that the
    Government had justified both the extension of the restraint period back one
    year and the rollbacks, as being within a range of acceptable alternatives. I
    accept his findings that the alternative measures raised by the appellants were
    not responsive to the exigencies faced by the Government and the substantial
    and pressing objectives that it had set.

[314]

I have laid out
    the benefits to the common good of the
ERA
, and the costs to the groups
    and individuals the legislation required to make a sacrifice.

[315]

I would approach
    the determination of overall proportionality deferentially. This is not the
    first time Canada experienced an economic crisis nor will it be the last, and
    care must be taken not to hobble Parliament by making the burden of justifying
    economic legislation impacting collective bargaining in the federal public
    sector impossible to meet. The negative effects of the
ERA
were not
    egregious, and the positive effects were real. This is not a case in which the
    Government acted precipitously, or scapegoated an unpopular group. In the end,
    the law did nothing more than limit growth in wage increases in the public
    sector at a time when taxpayers in the private sector were suffering, and
    experiencing salary rollbacks and unemployment.

[316]

In the context
    of the great recession and the perils it posed for Canadian society, on the
    measure of social importance, in my view, the Government has justified the
    measures referred to as reasonable limits in a free and democratic society,
    under s. 1 of the
Charter
.

C.

Issue Three: Did
the Application Judge err in accepting Mr. Rochons Evidence?

[317]

As noted, the
    application judge received expert evidence from both sides. Mr. Rochon swore
    three affidavits on behalf of the Federal Government.
For the
    unions, Dr. Osberg provided an affidavit and a reply affidavit.
As the
    earlier discussion reveals, the application judge relied on Mr. Rochons
    evidence and preferred it to the evidence of Dr. Osberg.

[318]

The appellants
    assert that the application judge should have excluded much of Mr. Rochons
    evidence as inadmissible because he provided expert opinion evidence he was not
    qualified to give. According to the appellants, Dr. Osbergs evidence was the
    only admissible, unchallenged expert evidence, which the application judge
    should have accepted. I address each of these arguments below.

(1)    Expert Qualifications

[319]

To be
    admissible, expert evidence must (1) be provided by a properly qualified
    expert; (2) be relevant; (3) be necessary; (4) be reliable; (5) pass a prejudice/probative
    value analysis; and (6) not be subject to an exclusionary rule: Sidney N. Lederman,
    Alan W. Bryant, and Michelle K. Fuerst,
Sopinka, Lederman & Bryant

The
    Law of Evidence in Canada,
3d ed. (Markham, ON: LexisNexis Canada, 2009), at
    para. 12.46.

[320]

The model for determining
    the admissibility of expert evidence is the jury trial. A
voir dire
is
    held and the putative expert is examined on his or her expertise. In contrast,
    in an application, expert evidence is usually brought forward in affidavit form
    accompanied by cross-examination transcripts, as it was in this case. It is
    relatively rare for an application judge to see a live expert.

[321]

While the
    application judge did not conduct a
voir dire
, he did make the necessary
    determinations, as his responses to the appellants arguments show.

[322]

A
lthough Mr. Rochon started working for the Government as an
    economist in 1990 and described himself as a macroeconomist, he had long
    since moved onto the larger public policy stage. From 2007 to 2009, he was the Assistant
    Deputy Minister of the Economic and Fiscal Policy Branch at the Department of
    Finance. From 2009 to 2010, he was Senior Assistant Deputy Minister of the
    branch and in 2010 became the Associate Deputy Minister and G-7 Deputy, leaving
    that position in August 2012.

[323]

The application
    judge observed, at para. 218, that the Government was not presenting Mr. Rochon
    as an expert, but as a witness who can provide a factual foundation explaining
    the actions of the government. Counsel explained that Mr. Rochon was responding
    to Lars Osberg by providing further explanations to correct inaccuracies and
    to reply to the points raised.
The competing sets of
    affidavits track a debate between the witnesses about the validity of the
    policy objectives proffered by the Government for the
ERA
in responding to the perceived or real economic pressures facing
    the Government.
The application judge recognized this involved opinion
    evidence.

[324]

The application
    judge noted, at para. 227: Paul Rochon has held significant leadership
    positions in the Department of Finance. It does not seem out of place to
    suggest that he would have an understanding of the role government can play in
    the face of an economic crisis. He refused the appellants invitation to
    discount Mr. Rochons evidence.

[325]

In my view, the
    application judge accepted that Mr. Rochon had the expert qualifications needed
    to provide the opinion evidence on the subjects he addressed. As noted in
R.
    v. Mohan
, [1994] 2 S.C.R. 9, at p. 25, an expert may obtain the necessary
    qualifications through study or experience. This was observed by the
    application judge, at para. 217, where he stated that [e]xpertise can be
    obtained in the field. It can come from practical experience. The
    application judges decision to admit the evidence is owed deference:
R. v.
    D.D.
, 2000 SCC 43, [2000] 2 S.C.R. 275, at para. 13. And given Mr. Rochons
    background and experiences, the trial judge did not err by accepting that he
    was a qualified expert witness.

(2)    Form

53

[326]

PSAC argues that
    the application judge erred by accepting Mr. Rochons evidence despite the fact
    that  he failed  to  execute Form 53, a requirement under the
Rules of Civil
    Procedure
, R.R.O. 1990, Reg. 194.

[327]

This challenge
    falls entirely by the wayside as a result of this courts decision in
Westerhof
    v. Gee Estate
, 2015 ONCA 206, 124 O.R. (3d) 721. This court concluded that a
    number of obligations for expert witnesses, including the obligation to provide
    Form 53, did not apply to participant experts and non-party experts.
[3]
Justice Simmons concluded, at para. 82, that r. 4.1.01, which requires the signing
    of Form 53, did not apply to [w]itnesses, albeit ones with expertise,
    testifying to opinions formed during their involvement in a matter as these
    witnesses are not engaged by a party to form their opinions, and they do not
    form their opinions for the purpose of the litigation.

[328]

Mr. Rochon was a
    participant expert who formed his opinions as a member of the leadership cadre
    crafting and implementing the
ERA
. He was not engaged by the Government
    to form his opinions for the purpose of this litigation and, therefore, was not
    subject to r. 4.1.01.

(3)    Partiality

[329]

The appellants also
    raise concerns about Mr. Rochons partiality. They argue that the application
    judge should have excluded his evidence because of these partiality concerns.

[330]

Cromwell J. discussed
    concerns about the partiality of expert witnesses in
White Burgess Langille
    Inman v. Abbott and Haliburton Co
., 2015 SCC 23,
[2015] 2 S.C.R. 182,
at para. 11:

There have been long-standing concerns about whether expert
    witnesses hired by the parties are impartial in the sense that they are
    expressing their own unbiased professional opinion and whether they are
    independent in the sense that their opinion is the product of their own,
    independent conclusions based on their own knowledge and judgment.

[331]

Cromwell J.
    concluded that a trial judge may exclude an experts evidence if that expert is
    unable or unwilling to fulfil their duty of assisting the court. However, He
    also emphasized that this requirement for admissibility was a not a particularly
    onerous threshold, and that the trial judge must determine, having regard to
    both the particular circumstances of the proposed expert and the substance of
    the proposed evidence, whether the expert is able and willing to carry out his
    or her primary duty to the court:
Burgess
, at para. 49.

[332]

The application
    judge addressed the appellants partiality argument, at para. 216, setting out
    their position that Mr. Rochon was an advocate who should be disqualified,
    consistent with this courts decision in
Alfano v. Piersanti
, 2012 ONCA
    297, 291 O.A.C. 62, at para. 105.

[333]

The application
    judge rejected this argument, at para 217:

There is nothing like that here. There
    is nothing in the evidence of Paul Rochon to suggest that he has lost
    perspective on his role or abandoned his objectivity. There is nothing to
    suggest that direct involvement in the decision and activities that have
    brought the matter to court necessarily leads to the conclusion that a properly
    qualified witness cannot provide opinion evidence.

[334]

The application
    judges decision is owed deference and should not be overturned as long as he
    applied the proper legal principles and his conclusions are supported by the
    evidence:
Alfano
, at para. 113. The appellants have failed to
    demonstrate any error that would justify appellate intervention.

(4)    Preference for the Evidence
    of Mr. Rochon

[335]

The application
    judge laid out the opposing evidentiary positions of Mr. Rochon and Dr. Osberg
    at length, as noted earlier in this decision. He addressed the evidentiary
    challenges at para. 216 and following. The application judge preferred Mr.
    Rochons evidence. I repeat the application judges trenchant observation about
    Dr. Osberg, at para. 226: I pause to observe that it is not clear to me why an
    economist is able to opine on leadership at this level.

[336]

It is clear that
    the application judge considered Mr. Rochons broader public policy expertise
    to be more pertinent and salient to the constitutional issues than Dr. Osbergs
    relatively narrower economic expertise. His evidentiary preferences attract
    appellate deference in the absence of any palpable and overriding error, error
    in principle, or error of law:
Orr v. Metropolitan Toronto Condominium
    Corporation No. 1056
, 2014 ONCA 855
,

327 O.A.C. 228, at para. 83. In my view, the appellants have not shown
    any such errors.

[337]

The appellants
    submitted the only admissible expert evidence before the application judge was
    that of their expert, Dr. Osberg.

[338]

I reject this
    argument. First, as noted, it was open to the application judge to find Mr.
    Rochons opinion evidence to be admissible and pertinent, given his status as a
    participant expert, with qualifications derived from education, special skill,
    knowledge, training, and experience.

[339]

Second, it was
    open to the application judge to reject Dr. Osbergs expert evidence even in
    the absence of competing evidence.

(5)

Conclusion on Expert Evidence

[340]

I would reject
    the appellants challenges to the admissibility of Mr. Rochons evidence.
    The application judge did not err in accepting his evidence.

[341]

I also observe
    that the appellants view of the law would make it impossible for the expert
    opinion of a government employee ever to be accepted by a court as substantive
    evidence. The proposition that governments can only defend the
    constitutionality of legislation through the assistance of hired guns rather
    than highly professional and qualified civil servants is remarkable and unpersuasive.

D.

Disposition

[342]

I would dismiss
    the appeal.

[343]

If costs are
    sought and cannot be agreed, then each party may make costs submissions no
    longer than 10 pages in length within 14 days of the release of this decision,
    followed by responding submissions not longer than five pages, within an
    additional 14 days.

Released:  August 16, 2016 AH

P.
    Lauwers J.A.

I
    agree Alexandra Hoy A.C.J.O.

I
    agree R.A. Blair J.A.

[1]
No information was placed before the court about PIPSC units in Crown
    corporations.

[2]
All the figures mentioned in this section are according to PSAC.

[3]
A non-party expert would be an expert who has formed an opinion for a purpose
    other than the litigation. A doctor who performed an examination for statutory
    accident benefits eligibility would be an example:
Westerhof
, at para.
    62.