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Crown and Government Liability - Policy versus Operational. Leroux v. Ontario
In Leroux v. Ontario (Ont CA, 2023) the Court of Appeal considered an appeal of a class action certification refusal from the Divisional Court (the motion judge granted the certification originally), here regarding SSPSIPDDA applicants. The alleged causes of action were negligence and s.7 Charter.
These quotes address the negligence issue, which turns on the distinction between operational and policy decisions:[4] The motion judge characterized the negligence claim as one complaining of operational negligence rather than core policy decisions for which the government enjoys immunity: “[t]he complaint, in a nutshell, is about the negligent operation of a social assistance system that has approved the delivery of much-needed support and services but then fails to follow up”. ...
[5] The majority of the Divisional Court allowed Ontario’s appeal and set aside the certification order. ... In the majority’s view, the negligence claim was also doomed to fail as it complained of core policy decisions about the allocation of scarce resources. The dissenting judge would have permitted the negligence claim to continue on the basis that the motion judge correctly characterized it as impugning operational rather than policy matters.
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[7] I agree with the motion judge and the dissenting judge in the Divisional Court that the negligence claim does not impugn a core policy decision concerning the allocation of scarce resources. As pleaded, the action alleges that, within existing resources, Ontario has negligently implemented a program that has already assessed and approved class members for the receipt of supports and services. The majority of the Divisional Court erred in recharacterizing the appellant’s claim. Taking the pleaded facts as true, it is not plain and obvious that the negligence claim is one barred by core policy immunity, nor one in which no duty of care could arguably arise.
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ii. Government Liability for Negligence and Core Policy Immunity
[42] In Nelson (City) v. Marchi, 2021 SCC 41, 463 D.L.R. (4th) 1, the Supreme Court clarified how to distinguish “immune policy decisions from government activities that attract liability for negligence”: at para. 3.
[43] Every negligence claim must be based on a duty of care owed to the plaintiff by the defendant. In a case against a government authority, the Anns/Cooper framework is used to determine whether a duty of care exists, applied in a manner that has regard to whether the plaintiff’s claim falls within or is analogous to an established duty of care or is novel because proximity has not been recognized before. In novel cases, the full two-stage framework is followed. At the prima facie duty stage, the court asks whether the harm was a reasonably foreseeable consequence of the defendant’s conduct, and whether there is a relationship of proximity in which the failure to take reasonable care might foreseeably cause loss or harm to the plaintiff. Proximity arises in those relationships where the parties are in such a close and direct relationship that it would be “just and fair having regard to that relationship to impose a duty of care in law upon the defendant”: Cooper, at para. 34. At the policy stage, the court asks whether residual policy concerns outside the parties’ relationship should negate the prima facie duty: Marchi, at paras. 15-18.
[44] In the above sense, the “tort law duty of care will apply to a government agency in the same way that it will apply to an individual”: Just v. British Columbia, 1989 CanLII 16 (SCC), [1989] 2 S.C.R. 1228, at p. 1244. However, the law also recognizes that “certain policy decisions should be shielded from liability for negligence, as long as they are not irrational or made in bad faith”: Marchi, at para. 41. If a core policy decision is involved, immunity exists, and no duty of care will be imposed: Marchi, at para. 36.
[45] Core policy decisions must be distinguished from “operational implementation”. Operational implementation has been defined as “the practical implementation of the formulated policies” or “the performance or carrying out of a policy”: Marchi, at para. 52. Such operational decisions are generally “made on the basis of administrative direction, expert or professional opinion, technical standards or general standards of reasonableness”: Brown v. British Columbia (Minister of Transportation and Highways), 1994 CanLII 121 (SCC), [1994] 1 S.C.R. 420, at p. 441.
[46] In ascertaining whether a decision is one of core policy, the use of the term “policy” is not determinative. Instead, “the key focus is always on the nature of the decision”: Marchi, at para. 60. Broadly speaking, it will be a decision “as to a course or principle of action … based on public policy considerations, such as economic, social and political factors”: Marchi, at para. 51.
[47] In Marchi, the Supreme Court identified four factors to ascertain whether a core policy decision is at issue. The rationale for the immunity – protecting the legislative and executive branch’s core institutional roles and competencies necessary to maintain the separation of powers – guides how to assess and weigh the factors. The court explained the factors, at paras. 62-65, in the following manner:First: the level and responsibilities of the decision-maker. With this factor, what is relevant is how closely related the decision-maker is to a democratically-accountable official who bears responsibility for public policy decisions. The higher the level of the decision-maker within the executive hierarchy, or the closer the decision-maker is to an elected official, the higher the possibility that judicial review for negligence will raise separation of powers concerns or have a chilling effect on good governance. Similarly, the more the job responsibilities of the decision-maker include the assessment and balancing of public policy considerations, the more likely this factor will lean toward core policy immunity. Conversely, decisions made by employees who are far-removed from democratically accountable officials or who are charged with implementation are less likely to be core policy and more likely to attract liability under regular private law negligence principles.
Second: the process by which the decision was made. The more the process for reaching the government decision was deliberative, required debate (possibly in a public forum), involved input from different levels of authority, and was intended to have broad application and be prospective in nature, the more it will engage the separation of powers rationale and point to a core policy decision. On the other hand, the more a decision can be characterized as a reaction of an employee or groups of employees to a particular event, reflecting their discretion and with no sustained period of deliberation, the more likely it will be reviewable for negligence.
Third: the nature and extent of budgetary considerations. A budgetary decision may be core policy depending on the type of budgetary decision it is. Government decisions “concerning budgetary allotments for departments or government agencies will be classified as policy decisions” because they are more likely to fall within the core competencies of the legislative and executive branches. On the other hand, the day‑to‑day budgetary decisions of individual employees will likely not raise separation of powers concerns.
Fourth: the extent to which the decision was based on objective criteria. The more a government decision weighs competing interests and requires making value judgments, the more likely separation of powers will be engaged because the court would be substituting its own value judgment. Conversely, the more a decision is based on “technical standards or general standards of reasonableness”, the more likely it can be reviewed for negligence. Those decisions might also have analogues in the private sphere that courts are already used to assessing because they are based on objective criteria. [Citations omitted.] iii. Discussion
a) Errors of the Divisional Court
[48] Against that backdrop, I return to the question of whether the majority of the Divisional Court erred in its treatment of the appellant’s negligence claim. As I will explain, the majority fell into error by: (a) mischaracterizing the claim in two ways; and (b) interpreting Wynberg and Wareham as determinative.
[49] First, the motion judge and dissenting judge at the Divisional Court correctly characterized the negligence claim as one alleging the “negligent operation of a social assistance system within existing resources” (emphasis added). The pleading specifically alleges that Ontario acted negligently in failing to rationally allocate “pre-existing” resources to class members on DSO waitlists who are already “assessed and approved” for Developmental Services, thus denying them their entitlement to services. Accordingly, the negligence claim does not target the discretionary social assistance program as a whole. It does not target Ontario’s allocation of resources nor Ontario’s exercise of discretion over who is approved for the services at issue.
[50] In holding that the appellant’s negligence claim impugns a core policy decision, the majority of the Divisional Court recharacterized the claim. The majority said, at para. 126 of its initial reasons, that the claim targeted the “administration of discretionary benefits under Eligibility Programs for Adults who are ‘eligible’ but not ‘entitled’ to those benefits.” The majority added that the appellant was not even alleging an entitlement to benefits.
[51] The appellant’s claim does, however, make an allegation of entitlement. The claim asserts that “[d]espite being assessed and approved for Developmental Services, the entitlement to such services is arbitrarily denied by unreasonably managed waitlists”.
[52] Respectfully, the majority’s distinction between “entitlement” and “eligibility” for Developmental Services elides an important point about this claim. The legal “entitlement” claimed for the class is that Ontario must take reasonable care in implementing the process to deliver Developmental Services to those it has assessed and approved to receive them.
[53] Pursuant to s. 14 of the 2008 Disabilities Act, the class members have been deemed eligible for Developmental Services by an “application entity”, and such “entity” has assessed each class member’s needs as required under s. 17(1)(a). The statute then contemplates, under s. 17(1)(b), that a “funding entity shall prioritize the provision of services and supports and funding to the applicant in accordance with sections 18 and 19” (emphasis added). On the appellant’s argument, the class members have moved beyond “mere eligibility” to a stage where they have been approved, assessed, and are entitled to be prioritized for benefits. The class members are therefore differently situated from those who only meet or potentially meet the criteria for eligibility. While ss. 18 and 19 have still not come into force, the appellant contends that, in the interim, Ontario must act non-negligently in how it prioritizes individuals approved to receive benefits it has placed on the DSO waitlists.
[54] Second, throughout its reasons, the majority relies on a description of the program that misses the essential nature of the allegation. These assertions include that Ontario already assists 47,000 people with developmental disabilities, that it has a triage system it designed to allocate resources to persons in the program (although such a triage system is not referred to in the claim), that available resources are inadequate to meet the needs of all eligible claimants, that there will be persons who are eligible for benefits who do not receive them, and that making decisions in this context is a complex task.
[55] This description shifts the claim to one that challenges decisions concerning what resources to devote to a triage system addressing a complex problem in which demand outstrips supply. But those are not the decisions the appellant impugns. The appellant pleads that Ontario has no consistent and rational scheme for allocating pre-existing resources, and that the cause of the non-receipt or delayed receipt of support and services by class members is that very failure. As the motion judge and dissenting judge at the Divisional Court correctly observed, the complaint as pleaded is about the negligent administration of DSO waitlists “within existing resources” and is not about “insufficient funding”.
[56] Third, the majority of the Divisional Court erred in concluding that Wareham or Wynberg were indistinguishable.
[57] In Wareham, this court upheld the motion judge’s decision to strike the class members’ negligence claim against Ontario, which related to the delay in receiving ODSP payments. The motion judge had held that it was plain and obvious that no duty of care was present between Ontario and the class members because of a lack of proximity, or the claim impugned a core policy decision. Like the dissenting judge at the Divisional Court, I agree that Wareham is distinguishable because the class included those who merely applied for ODSP. In addition, the motion judge in Wareham indicated that the class members’ allegation of reliance was only based on the existence of the Ontario Disability Support Program Act, 1997, S.O. 1997, c. 25, Sched. B, and not from representations made by government officials: (2008), 2008 CanLII 1179 (ON SC), 166 C.R.R. (2d) 162 (Ont. S.C.), at para. 23. In this case, the class members have all been assessed and approved for Developmental Services and the pleadings allege interactions with government officials through assessment and approval from which reliance could arise.
[58] Moreover, in Wareham, the motion judge concluded that the impugned conduct involved core policy decisions because it focused on the “design” of the ODSP and “the resources that are to be allocated to its operation”: at para. 25. In contrast, the motion judge below correctly noted that the appellant’s claim focuses on the operational failures in administering the DSO waitlists within existing resources and does not allege inadequate funding.
[59] In Wynberg, this court upheld a trial judge’s conclusion that the plaintiffs’ negligence claim related to a core policy decision. At issue was Ontario’s decision to restrict access to the Intensive Early Intervention Program (the “IEIP”) to autistic children between two and five years old. At para. 255, this court agreed that: “rather than being a claim for operational failures in the implementation of a government program”, the claim related to Ontario’s “decision-making about the scope of IEIP and the services to be provided within the special education system”. As the motion judge and dissenting judge at the Divisional Court correctly noted, those facts are distinct from the case at bar since the class members here do not challenge the scope of eligibility for Developmental Services, and instead make allegations that were not made in Wynberg about operational negligence.
b) Core Policy Analysis
[60] The deficiencies of performance alleged by the appellant do not have the hallmarks of a core policy decision identified in Marchi.[6] On the proper characterization of the statement of claim and in light of the facts it alleges, the motion judge and the dissenting judge in the Divisional Court reached the correct result about the negligence claim – that it is not plain and obvious that it is one complaining of core policy decisions attracting immunity.
[61] Each of the Marchi factors arguably suggest that the nature of the impugned decisions in the negligence claim are not ones of core policy. With regard to the first factor, the pleadings impugn the conduct of “directors” in MCSS who oversee the administration of Developmental Services and DSO employees at regional DSO offices. These are individuals removed from democratic accountability and are clearly charged with implementing the support and services offered under the 2008 Disabilities Act. Similarly, the second factor cuts against finding a core policy decision. By impugning the “ad-hoc” irrational prioritization approach, as well as bad databases and computer programs, the appellant focuses on matters that can be characterized as reflecting an absence of any sustained period of deliberation. The third factor likewise leans towards finding the decisions reviewable for negligence as the pleadings suggest that the administration of DSO waitlists “within existing resources” involves day-to-day budgetary decisions. The fourth factor leans the same way, as the appellant’s claim criticizes prioritization decisions and practices on the basis that they are not coherent or rational, and thus can arguably be assessed based on objective criteria.
[62] When all of these factors are weighed and considered in their totality, it is not plain and obvious that the negligence claim targets core policy decisions. The overarching guiding principle for core policy immunity, the separation of powers, remains respected if this claim proceeds to trial, as it has the potential to be adjudicated without compromising the institutional roles and competencies of the three branches of government.
c) Duty of Care Analysis
[63] Moreover, in my view, the motion judge was correct in determining that the alleged facts can support the imposition of a duty of care. Foreseeability of harm is adequately alleged. So were facts from which a conclusion of proximity could be reached. As the motion judge noted, the appellant “pleads that every proposed class member directly interacted with the defendant through the receipt of developmental services before turning 18 and had further and direct contact after turning 18 and receiving formal approval for continuing support and services”. This creates a factual foundation for the motion judge’s comment that Ontario must have made representations subsequently relied on by the class members. There is thus the possibility of sufficient proximity being established at trial.
[64] The majority in the Divisional Court erred in concluding that Wynberg undermined a possible finding of proximity, asserting that the ongoing relationship between the plaintiffs and Ontario in that case was “much better established” than in the case at bar. As described above, Wynberg involved a negligence claim that impugned a core policy decision. There was also no basis to compare the facts as alleged in the pleading in this case against the evidentiary record established through a trial in Wynberg.
[65] Absent core policy immunity concerns, it is not plain and obvious that the prima facie duty of care arising from the presence of foreseeability of harm and proximity would be negated by any other residual policy concerns. As a result, it is not plain and obvious that the appellant’s negligence claim has no reasonable prospect of success. . Cirillo v. Ontario
In Cirillo v. Ontario (Ont CA, 2021) the Court of Appeal reviewed the latest SCC doctrine on the 'policy versus operational' distinction as it immunizes government action from tort (eg. under municipal law and the Ontario CLPA):[38] The Supreme Court has described the type of policy decisions that cannot ground an action in tort in Imperial Tobacco, at para. 87:Instead of defining protected policy decisions negatively, as “not operational”, [they are defined] positively as discretionary legislative or administrative decisions and conduct that are grounded in social, economic, and political considerations. Generally, policy decisions are made by legislators or officers whose official responsibility requires them to assess and balance public policy considerations. The decision is a considered decision that represents a “policy” in the sense of a general rule or approach, applied to a particular situation. It represents “a course or principle of action adopted or proposed by a government”: New Oxford Dictionary of English (1998), at p. 1434. When judges are faced with such a course or principle of action adopted by a government, they generally will find the matter to be a policy decision. The weighing of social, economic, and political considerations to arrive at a course or principle of action is the proper role of government, not the courts. For this reason, decisions and conduct based on these considerations cannot ground an action in tort. [Emphasis added.] [39] In Imperial Tobacco, the court moved away from the stark dichotomy between policy/operational decisions in favour of a more principled test. Referring back to Imperial Tobacco, the court in Hinse v. Canada, 2015 SCC 35, [2015] 2 S.C.R. 621, at para. 23, confirmed the nature of core policy decisions that are protected from suit:… [I]t is not helpful to posit a stark dichotomy between policy decisions and operational decisions, or to define policy decisions negatively as decisions that are not “operational” decisions: paras. 84-86. Although it refrained from establishing a black-and-white test, the Court concluded that core policy government decisions that are protected from suit are “decisions as to a course or principle of action that are based on public policy considerations, such as economic, social and political factors, provided they are neither irrational nor taken in bad faith”.
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