Courts have Power to order damages for unconstitutional legislation

Can the government ever be liable in damages for enacting legislation that is later held to be unconstitutional? In Canada (Attorney General) v. Power, the Supreme Court of Canada said yes. The decision turns on the interplay between two sets of competing constitutional principles: those that protect the autonomy of legislatures and their processes (such as separation of powers, parliamentary sovereignty, and parliamentary privilege) and those that demand legislative accountability (such as constitutionalism and the rule of law).  As a result, Power has joined the canon of Canada’s foundational cases in constitutional law.

What you need to know

• The Supreme Court has confirmed that Charter claimants can potentially claim damages against the Crown for enacting unconstitutional legislation. The Court rejected Canada’s argument that the Crown has absolute immunity in these situations.
• However, there is a high threshold to claiming such Charter damages. The ability to seek damages is limited to circumstances where the legislation is “clearly unconstitutional” or where the legislation was enacted in “bad faith” or constitutes an “abuse of power.”
• Power is the Supreme Court’s most recent discussion of core constitutional law principles, such as the separation of powers, parliamentary sovereignty, parliamentary privilege and the rule of law. Power should therefore be a key case for parties engaged in constitutional litigation. 

Background

Mr. Power lost his job as an X-ray technician after his employer discovered he had been convicted of criminal offences in 1996. At the time of his conviction, Mr. Power could have been eligible for a record suspension five years after his release. New legislation was enacted that retrospectively changed when a record suspension is available, making Mr. Power permanently ineligible. Mr. Power alleged that, as a result, he was unable to find other employment.

The new legislation was later held to be unconstitutional. Mr. Power brought an action under section 24(1) of the Charter seeking damages for the losses he incurred from the unconstitutional legislation. Section 24(1) permits courts to grant remedies that “the court considers appropriate and just in the circumstances” to anyone whose Charter rights or freedoms have been infringed. Relying on the Supreme Court’s 2002 decision in Mackin, Mr. Power asserted that an award of damages for enacting unconstitutional legislation is available when the legislation is “clearly wrong, in bad faith or an abuse of power”¹.

The Government of Canada asked the Court to determine whether damages under section 24(1) of the Charter are an available remedy, in two circumstances: (1) when government officials and ministers prepare and draft a bill that is later enacted and declared unconstitutional; and (2) when Parliament enacts a bill, which is subsequently declared unconstitutional. Canada argued that the Crown enjoys absolute immunity from damages in both circumstances because it is not liable when Parliament exercises its legislative powers. The New Brunswick Court of King’s Bench and the New Brunswick Court of Appeal disagreed with Canada’s position. Canada appealed to the Supreme Court.

The Supreme Court’s decision

The majority opinion

For a bare five-member majority, Chief Justice Wagner and Justice Karakatsanis agreed with the courts below that damages are available in both circumstances (when government officers prepare or draft legislation, and when Parliament enacts legislation).

The previous leading decision, Mackin, held that the Crown could only be liable for “Charter damages” if the impugned actions were “clearly wrong, in bad faith or an abuse of power”. This is designed to balance competing constitutional priorities: on one hand, governments cannot govern effectively if there is a permanent spectre of liability hovering over every policy decision. On the other hand, governments should not be immunized from trampling on constitutional rights in bad faith.

In Power, the majority rejected Canada’s arguments that: (a) Mackin did not apply to the enactment of legislation (only its application); (b) Mackin had been overruled by subsequent cases; or (c) that Mackin should now be overruled.

The majority’s full-throated defence of Mackin leaned on the idea that the Constitution must be read so that key principles are reconciled with one another, not read as reflecting a hierarchy in which one principle is subordinated to another. It explained that constitutional remedies must reflect a balance between government autonomy (supported by the principles of parliamentary sovereignty, parliamentary privilege and the separation of powers) and government accountability (supported by the broad and purposive approach to rights and remedial provisions in the Charter, and the principles of constitutionalism and the rule of law). It concluded that limited immunity, rather than absolute immunity, best achieves this balance. It explained how the three constitutional principles that promote legislative autonomy are not in conflict with limited immunity:

• Parliamentary sovereignty. Parliamentary sovereignty does not mean that Parliament is above the Constitution. Parliament remains subject to the accountability mechanisms in the Charter. As a result, limited rather than absolute immunity “does not impair Parliament’s power to make and repeal laws within the confines of the Constitution”².
• Separation of powers. Separation of powers does not require watertight compartments between the different branches of the government. As a result, “the separation of powers supports the need for some immunity, but not absolute immunity”³. Limited immunity, with a high threshold for liability, achieves this balance.
• Parliamentary privilege. Parliamentary privilege protects particular aspects of the legislative process, such as statements made during debate and testimony of members of Parliament. Parliamentary privilege may also limit the evidence that can be adduced in a claim. But permitting Charter damages for legislative enactment does not itself undermine the privilege because Charter damages are claimed against the state, not against individuals involved in the legislative process.

The majority concluded that while our democracy requires the preservation of “an independent space for elected representatives to carry out their parliamentary duties”, including debating and deciding our laws, an absolute immunity would subvert the principles that ensure government accountability—namely, the rule of law and the courts’ role in ensuring compliance with the Constitution. 

The majority also aimed to clarify what the “bad faith, clearly wrong or abuse of power” standard means. It noted that mere “negligence” would not be enough to overcome the Crown’s immunity. Instead, the actions needed to be “clearly unconstitutional” in the sense that “the state either knew that the law was clearly unconstitutional, or was reckless or wilfully blind as to its unconstitutionality”⁴. The majority also declined requests to discard the “bad faith” and “abuse of power” standards, but did not attempt to define “bad faith” or “abuse of power in the law‑making process”.

The minority opinions

There were two minority opinions. Justice Jamal (with Justice Kasirer concurring) agreed that there is limited immunity but sought to narrow and qualify Mackin in order to protect parliamentary sovereignty. Justice Rowe (with Justice Côté concurring) held that the government should never be liable for damages because Parliament enacted unconstitutional legislation.

Justice Jamal’s opinion departed from the majority’s judgment in two important ways. First, he held that there can be no liability for the conduct of government officials or ministers in preparing and drafting legislation. In his view, the preparation and drafting of legislation is “core legislative conduct” that is outside of the proper scope of judicial review. Second, Justice Jamal sought to raise the threshold that a litigant must meet to be eligible for Charter damages to legislation that is “clearly unconstitutional at the time it was enacted”.  This standard is more protective of parliamentary privilege, which is a foundational principle in Canada’s constitution⁵.

In contrast to the majority’s approach—which sought to reconcile parliamentary sovereignty and parliamentary privilege with other constitutional principles—Justice Rowe’s opinion emphasized that the Charter must be read in a manner that is compatible with parliamentary sovereignty. In his view, parliamentary sovereignty requires an impenetrable and absolute shield over Parliament’s core activities: preparing, drafting and enacting legislation.

Justice Rowe also took issue with the majority’s contention that the executive branch of the government can be liable for Charter damages because of acts carried out by Parliament (i.e., the legislature).

Implications

Most constitutional cases turn on specific elements of constitutional law, such as the scope of Charter rights or the division of powers between the federal and provincial governments. Power turns on the interplay of the foundational constitutional principles that underly the framework of Canada’s constitutional governance.

The Supreme Court’s three opinions offer different visions of how to reconcile the competing principles that animate legislative independence with legislative accountability. The majority opinion leans more heavily on the principles of government accountability, whereas the minority opinions favour the principles underpinning legislative sovereignty.

Power will inevitably generate more questions that will need to be resolved through future litigation, including deciding what evidence that plaintiffs can adduce to show legislation was enacted in bad faith or that the government “knew” a law was “clearly unconstitutional”. It is also left to future courts to determine how to distinguish between laws that are unconstitutional with those that are “clearly unconstitutional”, particularly when a government attempts to justify a law under section 1 of the Charter. These principles will be worked out in future cases seeking Charter damages.