IpsofactoJ.com: International Cases  Part 2 Case 7 [SCC]
SUPREME COURT OF CANADA
Attorney General of Canada
- vs -
Attorney General of Quebec
20 OCTOBER 2005
(with whom McLachlin CJ, Binnie J, Lebel J, Fish J, Abella J & Charron J concurred, delivered the judgment of the court)
Does Parliament have the constitutional authority to grant maternity benefits and parental benefits to individuals who take time off work to give birth to or care for a child?
In response to an application by the government of Quebec for an opinion under the Court of Appeal Reference Act, R.S.Q., c. R-23, s. 1, the Court of Appeal found ss. 22 and 23 of the Employment Insurance Act, S.C. 1996, c. 23 (“EIA”), which provide for the payment of benefits during maternity leave and parental leave, to be unconstitutional. (These provisions are reproduced in the Appendix). In the opinion of the Court of Appeal, the matters to which those provisions apply are under provincial jurisdiction.
The Attorney General of Canada appealed to this Court pursuant to s. 36 of the Supreme Court Act, R.S.C. 1985, c. S-26. For the reasons set out below, I am of the opinion that it was open to Parliament to enact ss. 22 and 23 EIA based on the jurisdiction assigned to it by s. 91(2A) of the Constitution Act, 1867 in relation to unemployment insurance.
1. CONSTITUTIONAL QUESTIONS AND POSITIONS OF THE PARTIES
The Chief Justice stated the constitutional questions in the same way as did the Government of Quebec in its order in council No. 244-2002, by which it sought the reference:
Does s. 22 of the Employment Insurance Act encroach upon provincial legislative competence and, more particularly, provincial legislative competence over property and civil rights and matters of a merely local or private nature under ss. 92(13) and 92(16) of the Constitution Act, 1867?
Does s. 23 of the Employment Insurance Act encroach upon provincial legislative competence and, more particularly, provincial legislative competence over property and civil rights and matters of a merely local or private nature under ss. 92(13) and 92(16) of the Constitution Act, 1867?
Is s. 22 of the Employment Insurance Act ultra vires the Parliament of Canada and, more particularly, does it exceed the Parliament of Canada’s legislative competence over unemployment insurance under s. 91(2A) of the Constitution Act, 1867?
Is s. 23 of the Employment Insurance Act ultra vires the Parliament of Canada and, more particularly, does it exceed the Parliament of Canada’s legislative competence over unemployment insurance under s. 91(2A) of the Constitution Act, 1867?
The text of the impugned provisions is appended to these reasons. In essence, the provisions allow a woman who is not working because she is pregnant, and a person who is absent from the workplace to care for a newborn or an adopted child, to receive employment insurance benefits.
The Attorney General of Quebec argues that [translation] “the purpose of [maternity benefits and parental] benefits is to support families and to help parents care for their child when the child is born or adopted, in a context in which both the labour market and the social realities that stem from it are in a state of flux” (Respondent’s Factum, at para. 20). From this perspective, the benefits in issue are, in pith and substance, a social security and assistance measure that trenches on the province’s jurisdiction over property and civil rights or over matters of a purely local nature under s. 92(13) and (16) of the Constitution Act, 1867. In the submission of the Attorney General of Quebec, the purpose of the benefits is different from the purpose of the EIA, which is to establish a plan for insurance against the risk of unemployment.
The Attorney General of Canada submits that [translation] “the essential characteristic of .... maternity benefits and parental benefits is that they provide temporary income for pregnant women or parents who have paid premiums and held insurable employment for the required number of hours and have lost their employment income because of a pregnancy or in order to care for a child” (Appellant’s Factum, at para. 32). In the submission of the Attorney General of Canada, neither the purpose nor the effect of the provisions is to create a plan for maternity leave or parental leave.
2.1 PRINCIPLES OF INTERPRETATION
It is rare that all the subjects dealt with in a statute fall entirely under a single head of power. As a result, disputes relating to the division of powers arise frequently. Because a decision regarding the scope of the powers assigned by the Constitution Act, 1867 has undeniable social and political consequences, the Court approaches the task assigned to it by the law with considerable circumspection. The Court has developed an analytical framework to guide it in making its decision. It must first seek to determine the pith and substance, or dominant characteristic, of the statute or provision and then identify the head of power to which that characteristic is most closely related: Fédération des producteurs de volailles du Québec v Pelland,  1 S.C.R. 292, 2005 SCC 20; Reference re Same-Sex Marriage,  3 S.C.R. 698, 2004 SCC 79; Kitkatla Band v British Columbia (Minister of Small Business, Tourism and Culture),  2 S.C.R. 146, 2002 SCC 31. Since each level of government may legislate in relation to the matters within its jurisdiction, it did not take the Privy Council long to recognize that the classes set out in ss. 91-92 of the Constitution Act, 1867 are not watertight compartments, and to set forth the “double aspect” doctrine: Hodge v The Queen (1883), 9 App. Cas. 117 (P.C.), at p. 130, and Citizens Insurance Co. of Canada v Parsons (1881), 7 App. Cas. 96 (P.C.), at pp. 107-8 and 116-17. The power of one level of government to legislate in relation to one aspect of a matter takes nothing away from the power of the other level to control another aspect within its own jurisdiction. If, however, the statute or provision intrudes into a field of jurisdiction that does not belong to the authority that enacted it, the Court must determine whether it is nonetheless valid because it is part of a valid legislative scheme and is sufficiently integrated into that scheme: Kitkatla, at para. 58; Global Securities Corp. v British Columbia (Securities Commission),  1 S.C.R. 494, 2000 SCC 21; General Motors of Canada Ltd v City National Leasing,  1 S.C.R. 641.
At the first stage of the analysis, in order to identify the head of power, the Court takes a progressive approach to ensure that Confederation can be adapted to new social realities. The Court has on numerous occasions cited the “living tree” metaphor, and we need not revisit it here: Reference re Same-Sex Marriage, at para. 29. While the debates or correspondence relating to the constitutional amendment are relevant to the analysis as regards the context, they are not conclusive as to the precise scope of the legislative competence. They reflect, to a large extent, the society of the day, whereas the competence is essentially dynamic: Martin Service Station Ltd v Minister of National Revenue,  2 S.C.R. 996, at p. 1006. In giving them predominant weight, the Quebec Court of Appeal adopted an original intent approach to interpreting the Constitution rather than the progressive approach the Court has taken for a number of years.
A progressive interpretation cannot, however, be used to justify Parliament in encroaching on a field of provincial jurisdiction. To derive the evolution of constitutional powers from the structure of Canada is delicate, as what that structure is will often depend on a given court’s view of what federalism is. What are regarded as the characteristic features of federalism may vary from one judge to another, and will be based on political rather than legal notions. The task of maintaining the balance between federal and provincial powers falls primarily to governments. If an issue comes before a court, the court must refer to the framers’ description of the power in order to identify its essential components, and must be guided by the way in which courts have interpreted the power in the past. In this area, the meaning of the words used may be adapted to modern-day realities, in a manner consistent with the separation of powers of the executive, legislative and judicial branches.
Some heads that set forth narrow powers leave little room for interpretation. Other, broader, heads result in legislation that can have several aspects.
In the instant case, the Attorney General of Quebec does not dispute that the Act considered as a whole, or more specifically the regular benefits, come within Parliament’s jurisdiction over unemployment insurance (s. 91(2A) of the Constitution Act, 1867). The only issue is the constitutionality of maternity benefits and parental benefits.
Although four separate constitutional questions were stated, a single approach will apply to the entire analysis. It is therefore important to begin by determining what the pith and substance or dominant characteristic of the impugned provisions is before identifying the head of power to which the matter relates.
The earliest parental benefits resulted from an extension of the maternity benefits that had been adopted more than ten years earlier. I must begin with an analysis of maternity benefits. The determination of the pith and substance of maternity benefits will necessarily have an impact on the determination of the pith and substance of parental benefits.
2.2 PITH AND SUBSTANCE OF MATERNITY BENEFITS
The pith and substance or essential characteristic of a provision may be revealed by the provision’s purpose or effects: Kitkatla, at para. 53. The purpose of a provision is the goal pursued by Parliament in enacting it. To consider the effect of a provision is to examine its practical or legal consequences: Saumur v City of Quebec,  2 S.C.R. 299; Attorney-General for Alberta v Attorney-General for Canada,  A.C. 117 (P.C.). These two tests for determining pith and substance, namely purpose and effect, will be examined in turn.
2.2.1 Purpose of Maternity Benefits
The purpose of a provision may be identified from its context or be set out in the enactment itself. To identify the purpose, it is often helpful to identify the problem Parliament was seeking to remedy. The context in which a statute is enacted thus often provides information that is relevant to the review of the provision. I will begin the analysis with the Unemployment Insurance Act, 1940, S.C. 1940, c. 44 (the “UIA, 1940”), which did not provide for maternity benefits, before examining the context in which maternity benefits were introduced, and then the text of the impugned provision.
188.8.131.52 Context in Which the UIA, 1940 was Enacted
In the late 1930s, Parliament considered unemployment to be the most urgent national problem: National Employment Commission Act, 1936, S.C. 1936, c. 7, preamble, and Hills v Canada (Attorney General),  1 S.C.R. 513, at p. 534. From this perspective, it enacted the first unemployment insurance legislation: Employment and Social Insurance Act, S.C. 1935, c. 38. However, that Act was declared to be unconstitutional because it related to a matter within the competence of the provinces: Reference re The Employment and Social Insurance Act,  S.C.R. 427, aff’d Attorney General for Canada v Attorney General for Ontario,  A.C. 355 (P.C.). In 1940, an amendment to the Constitution Act, 1867 gave Parliament jurisdiction over unemployment insurance. The UIA, 1940 was then enacted. It essentially restated the provisions of the Employment and Social Insurance Act that had been declared unconstitutional a few years earlier. It provided for the payment of benefits to unemployed persons who were capable of and available for work, but unable to find employment.
Over the years, numerous amendments were made to the original Act, generally to expand qualifying conditions, increase benefits and eliminate inequities, but the Court found in 1988 that the basic thrust had remained constant: Hills, at p. 535. The amendments were designed. In Abrahams v Attorney General of Canada,  1 S.C.R. 2, at p. 10, Wilson J. said that the overall purpose of the Act was to make benefits available to the unemployed. In Tétreault-Gadoury v Canada (Employment and Immigration Commission),  2 S.C.R. 22, at p. 41, La Forest J., quoting the words of Lacombe J., who was on the panel of the Federal Court of Appeal in that case, described the purpose of the Unemployment Act, 1971, which seems no different from the purpose of the current Act, as follows:
.... to create a social insurance plan to compensate unemployed workers for loss of income from their employment and to provide them with economic and social security for a time, thus assisting them in returning to the labour market.
In Williams v Canada,  1 S.C.R. 877, Gonthier J. (at p. 895) added that the purpose behind unemployment insurance benefits:
.... looks to the past, present and future. Benefits are contingent on qualifying employment in the past. They are meant to provide income and security for the present, in lieu of the employment income which has been lost. However, the benefits also look to the future, enabling the recipient to find a new job without hardship and with a sense of security.
The first express provisions regarding women attest to the social mores of the day: women were expected to be supported by their husbands, and to stop working after they were married. A regulatory provision disqualified women for a period of two years after they were married, unless they met a long series of conditions: Unemployment Insurance Regulations, 1949, SOR/49-524, s. 5A (ad. SOR/50-515, s. II). It is worth noting that in 1950, women in Quebec could neither contract (art. 177 Civil Code of Lower Canada) nor appear in judicial proceedings (art. 176) without their husbands’ consent or assistance. Very little value was placed in women’s work. In a report recommending that the eligibility criteria for pregnant women and mothers of young children be made more restrictive, the following statement was made:
By reason of the ability of some married women who are not the sole support of their household to work in industry or not work, as they choose, they have an unique ability to move into and out of the labour force at will.
(Report of the Committee of Inquiry into the Unemployment Insurance Act (November 1962), at p. 133 (Gill Report))
While working was not exactly regarded as a whim for a woman whose husband was working, it was considered to be optional and unusual at the time. From this perspective, it is easy to understand why women’s claims for benefits were looked on as suspect.
184.108.40.206 Context in Which Maternity Benefits Were Adopted
By the 1960s, profound changes were under way that would have a dramatic impact on Canadian society. Technological developments, the increasing incidence of part-time work and the entry of women into the labour market in large numbers prompted public discussion about the new challenges that were now an inherent part of the labour market. Despite this evolution of the labour market, some categories of employment, such as hospital workers, teachers and federal and provincial public servants, were excluded from the plan. Economic insecurity was no longer the exclusive preserve of the most impoverished members of society. On the question of how women were treated, the Report of the Study for Updating the Unemployment Insurance Programme (1968) (Cousineau Report), which was published only six years after the Gill Report, observed (at p. 28):
The Labour Force Participation Rate of married women between 20 and 65 grew from 22.5% in 1961 to 30.5% in 1967. This is due to a number of factors which we cannot explore here but the consequence of such an increased labour force participation of the females is to render the procedures discriminating against women in the operations of the present system, most objectionable. It has been possible up to now to postulate a tenuous attachment to the labour force on the part of married women and their lower “registered” unemployment rate would seem to support the view that married women exit from labour force activities in some substantial proportion when they become unemployed. However, there are reasons to believe that “women become more firmly attached to the labour force”. Consequently, there will be a need to adapt the unemployment compensation system to deal with it.
The government came to understand that a number of provisions had become anachronistic. The UIA, 1940 was completely revised. In the White Paper entitled Unemployment Insurance in the 70s (1970), at pp. 19 and 22 (the “White Paper”), the proposed maternity benefits were described as follows:
Under the existing legislation, an insured person is entitled to benefits (1) if he has experienced an interruption of earnings and is therefore unemployed, (2) if he is capable and available for work, and (3) if he is unable to find suitable employment.
The proposed plan retains the three main conditions for eligibility listed above. However, it expands interruption of earnings to include maternity, retirement and sickness ....
The new special benefits remove the anomalies from the present Act concerning these three groups and provide them with benefits based on a realistic appraisal of what their particular interruption of earnings means in the context of the work force of today.
The report of the Standing Committee on Labour, Manpower and Immigration, which was tabled after the White Paper was considered, also contains comments regarding the purpose of the new maternity and sickness benefits (Minutes of Proceedings and Evidence of the Standing Committee on Labour, Manpower and Immigration, Issue No. 9, December 3, 1970, at p. 9 : 28):
These additional benefits represent an adjustment in the economic security system to recognize the contingencies generated by a world in which women are a large portion of the labour force and in which a major segment of the population has no protection against interruption of earnings due to sickness.
As is apparent from this brief historical overview, the fact that women were initially discriminated against can be attributed primarily to the fact that they were not regarded as full participants in the labour market. The entry of large numbers of women into the labour market led to an awareness of their role and of the very real loss of income they suffered when their work was interrupted as a result of pregnancy. This is the context in which maternity benefits were adopted: Unemployment Insurance Act, 1971, S.C. 1970-71-72, c. 48, s. 30(1) (the “UIA, 1971”).
The purpose of the extension was to give women who had contributed to the plan the right to receive income replacement benefits. The new benefits were intended to provide pregnant women with economic and social security on a temporary basis while at the same time helping them to return to the labour market. In addition to the purely economic income replacement aspect, maternity benefits, like regular benefits, would ensure continued employability and reintegration into the labour market.
220.127.116.11 Text of the Provision
The text of the provision may sometimes include a clear statement of Parliament’s purpose. In the case at bar, the provision, stripped of its technical aspects, reads as follows:
[B]enefits are payable to a .... claimant [who has 600 or more hours of insurable employment in her qualifying period and] who proves her pregnancy [even if she cannot prove that she was capable of or available for work].
Where .... any allowances, money or other benefits are payable to the claimant for that pregnancy under a provincial law, the benefits payable to the claimant under this Act shall be reduced or eliminated as prescribed.
It can be seen from the text that benefits are paid to a woman who loses her employment income because of her pregnancy if she held insurable employment during the period required by the Act. The primary purpose is to provide women in this position with income replacement benefits.
2.2.2 Effect of the Provision
A measure may have effects that go beyond the initial aim. Those effects can be used to assess its constitutional validity. For instance, in Saumur, legislation relating to the administration of streets was held to be unconstitutional because its preponderant effect showed that it was operating as a censorship mechanism. Thus, the effect of the law cannot be disregarded.
In the instant case, the effect of the provision is to enable insured pregnant women to have access to financial resources at a time when they are not receiving their employment income.
However, these resources also make it possible for them to take time off work for physiological reasons associated with their pregnancies, and to take care of their families for longer periods than if they were compelled to return to work early because they were impecunious. The primary effect is therefore to replace, in part, these women’s employment income, but the secondary effect is to enable them to prepare for childbirth, to recover physiologically and to have a period of time to take care of their families.
The broadening of maternity benefits put the emphasis on the function of replacing income so that women could care for their children. When the UIA, 1971 was enacted, s. 30(1) provided for the payment of benefits during a fifteen-week period straddling the delivery date. The fact that benefits would be paid only for the weeks on either side of that date suggests a connection between the benefits and the physical limitations associated with pregnancy. There are a number of sources in which it is argued that at the time when maternity benefits were introduced, the principal justification for the recommendations in favour of adopting such a plan was the mother’s physical inability to work during the period before and after the birth of the child: J. Frémont, “Assurance-chômage, maternité et adoption: les récentes modifications et leur validité” (1982-83), 17 R.J.T. 497, at p. 503; Issalys P. and Watkins G., Unemployment Insurance Benefits: A Study of Administrative Procedure in the Unemployment Insurance Commission (1977), at p. 11; Employment and Immigration Canada, Unemployment Insurance in the 1980s (1981), at p. 67; Canada, Report of the Royal Commission on the Status of Women in Canada (1970), at p. 84. In Bliss v Attorney General of Canada,  1 S.C.R. 183, at p. 190, Ritchie J. quoted the following comment by Collier J., who was sitting as an Umpire:
I do not know the purpose of the legislators in injecting s 46 into the 1971 legislation. It was suggested that, pre-1971, there was an assumption that women eight weeks before giving birth and for six weeks after, were, generally speaking, not capable of nor available for work ....
However, a look at how these benefits have been used over the years reveals that the weeks women chose to be absent were based on the childcare function rather than on a real inability to work caused by physical incapacity: Equality for All, report of the Parliamentary Committee on Equality Rights (1985), ch. 2, at p. 10 (Boyer Report). In fact, there are few people who would still venture to say that, other than in exceptional cases, women are incapable of working as a result of being pregnant, although it is recognized that they are physically unable to work during a brief period before and after the delivery date.
The flexibility introduced into the rules, which allow women to choose the weeks when they receive benefits, shows that the function of replacing income during the period when mothers are caring for their children has become more important than it was when the original provisions were enacted. It would not be possible to observe this accentuated secondary effect, however, if women were not entitled to receive income replacement benefits in the first place. The secondary effect is therefore not unrelated to the purpose of the provision and does not pervert the intention behind it.
Parliament’s intention is to replace interrupted earnings, and that is the primary effect of the measure. The fact that the primary effect corresponds to the actual purpose is neither conclusive nor unusual. If the effect were not consistent with the purpose, the legislation would be problematic. An analysis of the effect becomes informative if the secondary effects show that the legislation has been diverted from its stated goal. That is not the case here. While women can receive income replacement benefits, they may do so only when they are absent from work due to pregnancy. The right to take time off work is not granted in the EIA; it derives from other legislation, or from an agreement between the employer and employee. The secondary effect therefore does not divert the measure from its purpose or its primary effect; rather, it is a natural consequence of them.
2.2.3 Conclusion Regarding the Provision’s Pith and Substance
As can be seen from the context in which the first unemployment insurance legislation was enacted, Parliament’s intention was to curb the problem of unemployment. Benefit amounts were not very high, and many workers, including pregnant women, were excluded. After women entered the labour market in large numbers, special benefits were instituted to compensate for the interruption of their earnings that resulted from pregnancy. The context in which the provision was enacted, and its language and effect, bring to light the pith and substance, or essential characteristic, of the benefits: they replace the employment income of insured women whose earnings are interrupted when they are pregnant.
The argument of the Attorney General of Quebec, that the purpose of maternity benefits is to support families and to enable women to care for their children at the time of birth, cannot be accepted. No period of leave is granted by the EIA. Maternity leave is governed by other legislation or by arrangements between employers and employees. Although support for families and the ability to care for children may be one of the effects of the measure, that is not its pith and substance. The fundamental objective of the maternity benefits plan is to protect the workers’ incomes from the time when they lose or cease to hold their employment to the time when they return to the labour market.
2.3 IDENTIFICATION OF THE HEAD OF POWER
Once the pith and substance of a provision has been determined, the head of power to which the pith and substance relates must be identified. The Attorney General of Quebec contends that the provision falls within Quebec’s jurisdiction over social matters, because of its connection with property and civil rights and matters of a merely local or private nature (ss. 92 (13) and 92(16) of the Constitution Act, 1867). The Attorney General of Canada relies on Parliament’s jurisdiction over unemployment insurance. In order to understand the context in which the question arises, it will be helpful to review how Parliament came to be given jurisdiction in relation to unemployment insurance. Although the context is not conclusive, this review will assist in identifying the essential elements that may or must be adapted to contemporary needs. I will then analyse the objections raised by the Attorney General of Quebec, who contends that the provisions are inconsistent with the concepts of insurance and unemployment.
When the Privy Council declared the Employment and Social Insurance Act to be unconstitutional, there was no doubt that, prima facie, measures relating to insurance, and in particular measures relating to contracts of employment, were in relation to property and civil rights and were within the exclusive competence of the provincial legislatures (Attorney General for Canada, at pp. 365 and 367):
There can be no doubt that, prima facie, provisions as to insurance of this kind, especially where they affect the contract of employment, fall within the class of property and civil rights in the Province, and would be within the exclusive competence of the Provincial Legislature ....
In the present case, their Lordships agree with the majority of the Supreme Court in holding that in pith and substance this Act is an insurance Act affecting the civil rights of employers and employed in each Province, and as such is invalid.
Because the UIA, 1940 essentially reiterated the provisions of the Employment and Social Insurance Act, it cannot be denied that it affected contracts of employment or insurance relating to those contracts. This means that when the Constitution was amended, a portion of the jurisdiction over property and civil rights was detached so that the aspects relating to unemployment insurance could be assigned to Parliament.
There can be no doubt that a public unemployment insurance plan, in addition to the fact that it concerns insurance relating to contracts of employment, is also a social measure. Characterizing it in this way does not mean, however, that it can be associated exclusively with any one head of power. The term “social measure” has a number of aspects that may be associated just as validly with property and civil rights as with unemployment insurance. For instance, no one would deny that employment insurance benefits paid to workers who are laid off as a result of bankruptcy are in the nature of unemployment insurance. The measure, which affects property and civil rights, is undeniably social in nature, but it is also in the nature of unemployment insurance. To begin the analysis by classifying the maternity benefits provision as a social measure and to conclude from this that it is a matter under provincial jurisdiction is tantamount to evading a review of the scope of the constitutional amendment. The question that must be asked in order to determine the head of power to which maternity benefits relate is whether the provision, in pith and substance, falls within the jurisdiction assigned by the constitutional amendment.
The Attorney General of Quebec submits that the jurisdiction over unemployment insurance is limited by the parameters defined in the early legislation. Under those Acts, to be entitled to benefits, insured persons had to have lost their employment involuntarily, and had to be capable of and available for work. In so arguing, the Attorney General of Quebec equates the field of jurisdiction assigned by s. 91(2A) of the Constitution Act, 1867 to the initial exercise of the federal power. This approach is inappropriate in more than one respect, the most obvious being that the eligibility requirements established in the scheme of the UIA, 1940 may be modified, provided that the scheme still represents a valid exercise of the jurisdiction over unemployment insurance. Thus, no one would think of questioning the right to modify the eligibility requirements to calculate insurable periods in hours rather than weeks. Such a modification would plainly make the scheme more accessible to part-time workers, but it would in no way change the fundamental nature of unemployment insurance. The question is therefore not the way in which Parliament initially exercised its jurisdiction, but the scope of its jurisdiction over unemployment insurance.
While the views of the framers are not conclusive where constitutional interpretation is concerned, the context in which the amendment was made is nonetheless relevant. If the objectives of the framers are taken as a starting point, it will be easier to determine the scope of the jurisdiction that was transferred, and then to determine how it may be adapted to contemporary realities.
2.3.2 Circumstances of the Transfer of Jurisdiction
In a letter sent to each of the provincial premiers on November 5, 1937, then Prime Minister W. L. Mackenzie King asked whether their provinces would agree to jurisdiction over unemployment insurance being assigned to Parliament. The letter contains an outline of the justification cited by the federal government at that time:
My dear Premier:
My colleagues and I are convinced that a national system of unemployment insurance would contribute materially to individual security and industrial stability throughout Canada, and would assist in mitigating the distress incident to any recurrence of widespread unemployment.
A strong recommendation with respect to national control of employment offices, based upon a full investigation of the unemployment situation throughout the Dominion, has been submitted to the government by the National Employment Commission. We share the opinion that a national employment service within federal jurisdiction is a necessary complement of any plan of national unemployment insurance.
On May 13, 1940, Quebec agreed to the federal request.
The Prime Minister’s letter highlights two pieces of information that are relevant to our analysis. First, it had become important not only to curb the destitution caused by unemployment, but also to put an end to unemployment by organizing a return to work. Employment offices were seen as a protective measure that was just as important as the payment of benefits.
In essence, the purpose of the transfer of jurisdiction was to equip Canada with the tools it needed to mitigate the effects of anticipated unemployment by providing certain classes of unemployed persons with benefits and by setting up job search centres. The transfer of jurisdiction was to be a tool for internal organization involving both short-term relief measures, namely benefits, and medium-term measures, namely job placement services for the unemployed.
Parliament continued to exercise its jurisdiction over unemployment insurance for the benefit of Canadians even after the period of unemployment that followed the war. The nature of unemployment has changed as prevailing conditions in Canada, and the needs of Canadians, have changed. Parliament must adapt its actions to new circumstances, in a manner consistent with the limits resulting from the constitutional division of powers. In a case such as this, where a specific power has been detached from a more general power, the specific power cannot be evaluated in relation to the general power, because any evolution would then be regarded as an encroachment. Rather, it is necessary to consider the essential elements of the power and to ascertain whether the impugned measure is consistent with the natural evolution of that power.
2.3.3 Essential Elements of Unemployment Insurance
On the one hand, no constitutional head of power is static. On the other hand, the evolution of society cannot justify changing the nature of a power assigned by the Constitution to either level of government. These two statements are not contradictory. As Professors H. Brun and G. Tremblay write [translation]:
Ultimately, however, there is no inconsistency between dynamic interpretation and adherence to the original intent of the framers: in order for something to evolve, it must have a starting point. See Reference re Prov. Electoral Boundaries (Sask.),  2 S.C.R. 158, at pp. 180-87. To determine the original intent of the framers, it is obviously necessary to start with a generous reading of the words they used, taken in their strictly legal context. That context may also be expanded by having regard to elements “extrinsic” to it that are more historical than legal in nature.
(Droit constitutionnel (4th ed. 2002), at p. 207)
In constitutional interpretation, the essential elements of a power are determined by adopting a generous reading of the words used, taken in their strictly legal context. The interpretation may also be expanded by having regard to relevant historical elements.
The jurisdiction over unemployment insurance must be interpreted progressively and generously. It must be considered in the context of a measure that applies throughout Canada and the purpose of which, according to the intention of the framers of the constitutional amendment, is to curb the destitution caused by unemployment and provide a framework for workers’ re-entry into the labour market.
With these principles and objectives in mind, four characteristics that are essential to a public unemployment insurance plan can be identified:
It is a public insurance program based on the concept of social risk
the purpose of which is to preserve workers’ economic security and ensure their re-entry into the labour market
by paying temporary income replacement benefits
in the event of an interruption of employment.
These four characteristics do not take into account the way a plan may have been implemented over the years, but allow changes in the labour market to be taken into consideration. Thus, the social risks associated with unemployment may vary from one period to another, and the way that the needs of the plan are calculated may be revised. Social policy choices are part of the exercise of the jurisdiction. They do not define what it is.
Having defined the essential characteristics of a public unemployment insurance plan, I will now address two specific objections raised by the Attorney General of Quebec. He submits, first, that maternity benefits are granted in respect of a voluntary absence from work and cannot be regarded as relating to insurance. He also asserts that the individuals who receive maternity benefits are not unemployed, because they are not available for work.
2.3.4 Maternity Benefits as an Insurance Measure
In Martin Service Station Ltd, at p. 1004, Beetz J. accepted that Parliament’s jurisdiction over unemployment insurance is qualified by an insurance aspect. Citing that principle, the Attorney General of Quebec submits that an interruption of work due to maternity cannot be insured against, because no risk is involved. He defines a risk as [translation] “a fortuitous event the materialization [of which cannot] depend exclusively on the will of the parties, and in particular on the will of the insured.”
While I do not dispute that this narrow definition of the word “risk” is often used in private insurance plans, I am of the view that it cannot be used to exclude maternity from any unemployment insurance plan.
The Attorney General’s argument based on the absence of risk reflects the arguments addressed by this Court in Brooks v Canada Safeway Ltd,  1 S.C.R. 1219, at pp. 1237-38. In that case, the Court had to decide whether pregnancy could be covered by an insurance plan even though it did not involve an accident or illness. The employer submitted that it was excluded because it was a voluntary condition. The employer’s argument was not accepted. Dickson C.J. wrote the following:
It seems indisputable that in our society pregnancy is a valid health-related reason for being absent from work. It is to state the obvious to say that pregnancy is of fundamental importance in our society. Indeed, its importance makes description difficult. To equate pregnancy with, for instance, a decision to undergo medical treatment for cosmetic surgery – which sort of comparison the respondent's argument implicitly makes – is fallacious. If the medical condition associated with procreation does not provide a legitimate reason for absence from the workplace, it is hard to imagine what would provide such a reason. Viewed in its social context pregnancy provides a perfectly legitimate health-related reason for not working and as such it should be compensated by the Safeway plan. In terms of the economic consequences to the employee resulting from the inability to perform employment duties, pregnancy is no different from any other health-related reason for absence from the workplace.
In our times, having a child is often the result of a deliberate act decided on by one or both parents. There are many facets to pregnancy, however. Despite all the technological progress that has been made, conception does not result from a mathematical calculation that can be used to determine when or even if it will occur. In addition, the benefit derived from procreation extends beyond the benefit to the parents. Children are one of society’s most important assets, and the contribution made by parents cannot be overstated. If pregnancy may be regarded as an insurable risk in private insurance plans, as was held in Brooks, then a fortiori it may be so regarded in a public plan.
The approach taken by the Attorney General of Quebec therefore disregards the collective impact of the parents’ decision and the social role of a public insurance plan. Apart from the fact that it is perfectly legitimate for a commercial insurer to agree to insure pregnant women against the loss of employment income, it must be acknowledged that the public nature of the unemployment insurance plan provides even greater justification for the decision to have all contributors assume together the risk of the loss of women’s earnings that is associated with maternity. Just as the marginalization of seasonal workers cannot justify excluding them, as was suggested in the Gill Report, at p. 12, protection against the loss of earnings that results from maternity is a social policy decision. Even though some people may see a tenuous connection with the concept of insurable risk in the strict sense, the jurisdiction in relation to unemployment is in the nature of social insurance. This means that the concept of risk may be understood in the social, and not the actuarial, sense. S. Ledoux provides a helpful analysis of the main characteristics of a social insurance plan and the concept of risk that applies to such a plan in L’influence du droit constitutionnel dans l’émergence et l’évolution du droit aux prestations de maternité, d’adoption et parentales au sein de la Loi sur l’assurance-chômage (1991), at p. 76 [translation]:
Social insurance is the application, on a much larger scale, of the principle of pooling that has long been the basis of insurance. Social insurance [is] a special technique of organizing provision collectively by securing contributions from various groups for a need that cannot be left safely to individuals’ or families’ own resources [L. C. Marsh, Report on Social Security for Canada (1943), at pp. 10 and 15]. The primary objective of social insurance is therefore to reduce individuals’ economic insecurity by promising them compensation in relation to social risks [L. Poulin Simon, Les assurances sociales pour une sécurité du revenu des salariés (1981), at p. 7].
The decision to offer women the possibility of receiving income replacement benefits when they are off work due to pregnancy is therefore a social policy decision that is not incompatible with the concept of risk in the realm of insurance, and that can moreover be harmoniously incorporated into a public unemployment insurance plan.
2.3.5 Maternity Benefits as an Unemployment Protection Measure
The Attorney General of Quebec also argues that pregnancy cannot be characterized as an unemployment situation because a pregnant woman is not capable of and available for work. This argument cannot be accepted either.
The Depression and war that led to the realization that a national unemployment insurance plan was necessary ended a long time ago, but unemployment itself endures. The nature of unemployment has changed, however. The unemployment that was foreseen in the 1930s was expected to result from the end of war-related production activities. It was conjunctural unemployment. But unemployment can also relate to the period between the time when a person loses one job and the time when he or she is hired for another job, apart from any structural constraint in a particular industry. This situation is described as frictional unemployment: G. Campeau, From UI to EI: Waging War on the Welfare State (2005), at p. 32. Although it was of course the conjunctural unemployment associated with the Depression and the war that led to the adoption of unemployment insurance measures, there has never been any doubt that frictional unemployment can also give rise to an entitlement to benefits.
The labour market also experiences technological unemployment, that is, unemployment brought about by technological change. Whether unemployment is conjunctural, structural, frictional or technological, the interruption of employment will undeniably be regarded as an unemployment situation regardless of the nature of the unemployment.
The eligibility requirements for benefits under the UIA, 1940 have been expanded to take the new realities into account. Availability for employment does not necessarily mean that there are realistic chances of finding employment. Seasonal unemployment provides a clear illustration of this reality. While the first legislation excluded all employment in agriculture, forestry, fishing and hunting (First Schedule, Part II, UIA, 1940), there can now be no question regarding the public plan’s support in relation to these economic activities, which are vital to Canada but are subject to constraints over which employers and employees have no control.
The expressions “unemployed person”, “unemployed” and “unemployment” have a variety of meanings. For example, according to the Nouveau Petit Robert dictionary (2003), at p. 431, a “chômeur” [unemployed person] is a person who is involuntarily deprived of employment; the word “chômé” [unemployed] relates to a requirement to stop working; and the word “chômage” [unemployment], in its ordinary sense, means an interruption of work resulting from a lack of employment. However, that dictionary also gives a more modern definition, which refers simply to an interruption of work. Merriam-Webster’s Collegiate Dictionary (10th ed.), at p. 1290, defines the expression “unemployment insurance” as follows: “Social insurance against involuntary unemployment that provides unemployment compensation for a limited period to unemployed workers.”
The ordinary meaning fits easily into the early unemployment insurance legislation. Stable, permanent employment was indeed the rule at that time. However, the eligibility rules in those statutes do not define the limits of Parliament’s jurisdiction. Today, interruptions of employment have multiple causes. Lengthy layoffs, when a worker is entitled to be recalled, and temporary or part-time employment are only a few examples of situations indicating a need to reflect on the concept of unemployment. The idea of a “lack of employment” or of a situation being involuntary is not a reliable guide. The modern meaning, which simply requires that there be an interruption of employment, is a better reflection of the contemporary reality of the workplace and more readily incorporates the meaning given to the other words that derive from the same root.
Furthermore, some new kinds of benefits have been considered by the courts, and in each case this Court has interpreted the provisions liberally. For example, a provision that discriminated against fishers was held to be invalid: Attorney General of Canada v Silk,  1 S.C.R. 335. In another case, teaching contracts were construed so as not to interfere with an entitlement to maternity benefits: Dick v Deputy Attorney General of Canada,  2 S.C.R. 243.
A review of the circumstances surrounding the inclusion of interruptions of employment due to illness offers a helpful parallel. The possibility of making benefits available to contributors who were sick was studied prior to the enactment of the UIA, 1940: Report of the Royal Commission on Dominion-Provincial Relations (1940), vol. II, at pp. 25, 31 and 40 (Rowell-Sirois Report). This suggests at the very least that, despite the fact that the contributor would not be available for work, such benefits did not at the time appear to be antinomic to unemployment insurance. From this perspective, the obligations to seek employment and to be capable of working are regarded as mechanisms for screening applications and providing an incentive to return to the labour market, and not as essential characteristics of the constitutional power.
The requirement that a claimant seek or be available for employment, which is inapplicable in the case of maternity benefits, is sometimes unrealistic. For example, seasonal workers or people working in remote regions will often be unsuccessful if they seek work during their periods of interruption of earnings. The nature of unemployment varies from one period to another, from one region to another and from one group to another, but the reality remains the same. These are workers who are not receiving their employment income.
The extent of the protection required by Canadian society changes with the needs of the labour force. A growing portion of the labour force is made up of women, and women have particular needs that are of concern to society as a whole. An interruption of employment due to maternity can no longer be regarded as a matter of individual responsibility. Women’s connection to the labour market is well established, and their inclusion in the expression “unemployed persons” is as natural an extension as the extension involving other classes of insured persons who lose their employment income. To limit a public unemployment insurance plan, from a constitutional perspective, to cases in which contributors are actively seeking employment or are available for employment would amount to denying its social function. The social nature of unemployment insurance requires that Parliament be able to adapt the plan to the new realities of the workplace. Some eligibility requirements derive from the essence of the unemployment concept, while other requirements are, rather, mechanisms that reflect a social policy choice linked to the implementation of the plan.
2.3.6 Conclusion with Respect to the Identification of the Head of Power
The Attorney General of Quebec submits that the social program under which maternity benefits are paid is, in pith and substance, a measure to assist families. While that is an undeniable effect, it is not the pith and substance of the program. The EIA governs the entitlement to benefits: it entitles pregnant women to receive benefits when they sustain an interruption of earnings. However, not all the various aspects of interruptions of work associated with maternity relate to unemployment insurance. Maternity leave is not governed by the EIA. Parliament does not grant female workers either maternity leave or job security. Because the provinces have a general power in relation to civil rights, it is the provinces that are responsible for establishing most of the rules that are needed to protect the jobs of pregnant women. Those rules are provided for in provincial statutes, and are often incorporated into individual contracts of employment and collective labour agreements. Standards of this nature are provided for in the Act respecting labour standards, R.S.Q., c. N-1.1, s. 81.4.
In pith and substance, maternity benefits are a mechanism for providing replacement income during an interruption of work. This is consistent with the essence of the federal jurisdiction over unemployment insurance, namely the establishment of a public insurance program the purpose of which is to preserve workers’ economic security and ensure their re-entry into the labour market by paying income replacement benefits in the event of an interruption of employment.
2.4 ARE PARENTAL BENEFITS OF THE SAME NATURE AS MATERNITY BENEFITS?
The parental benefits program arose out of a recommendation made by a task force established by the then Minister of Employment and Immigration, and was first implemented in 1984 out of a concern for fairness to adoptive parents (Unemployment Insurance in the 1980s (1981), at p. 70; Act to amend the Unemployment Insurance Act, 1971 (No. 3), S.C. 1980-81-82-83, c.150, s. 5).
The purpose of benefits for adoptive parents is to enable the parents to care for the child who has been placed with them for adoption. Here again, the EIA does not govern parental leave. It merely allows parents who are absent from work for this purpose to receive income replacement benefits.
The program was extended to all parents in response to the judgment of the Federal Court in Schachter v Canada,  3 F.C. 515 (T.D.): Act to amend the Unemployment Insurance Act and the Employment and Immigration Department and Commission Act, S.C. 1990, c. 40, s. 14. In that decision, Strayer J. described the discrimination faced by natural parents on the birth of their children. While adoptive parents were able to take time off work and receive benefits to care for their children, natural parents were denied that choice. Strayer J. regarded the distinction as unjustified discrimination against natural parents in relation to adoptive parents. The decision was appealed to the Court of Appeal and this Court on other issues, but the finding that the provision was discriminatory was not contested.
This unjustified distinction had in fact already been noted, specifically in relation to natural fathers, in the Boyer Report, at p. 9, which considered their exclusion to be the most obvious flaw. The question was also addressed in the Commission of Inquiry on Unemployment Insurance Report (1986), at p. 123 (Forget Report), in which the exclusion was characterized as “surprising”.
I see no reason why parental benefits should be characterized differently from maternity benefits. In both cases, the benefits relate to the function of the reproduction of society. The status of adoptive parent carries with it all the rights and obligations of a natural parent. All parents have equal obligations. At a time when society is stressing the responsibility of both parents, they cannot be treated unequally. Such an approach would be anachronistic. Because of the discrimination that would occur if benefits were not paid to both natural parents and adoptive parents, parental benefits must be permitted. The inclusion of this type of benefits in the unemployment insurance plan is an extension of the plan that is made necessary by the equality rights that are also an integral part of our Constitution.
As in the case of maternity benefits, the right of claimants to take time off work is governed not by the EIA, but by provincial legislation: Act respecting labour standards, s. 81.10.
I therefore find that parental benefits, like maternity benefits, are in pith and substance a mechanism for providing replacement income when an interruption of employment occurs as a result of the birth or arrival of a child, and that it can be concluded from their pith and substance that Parliament may rely on the jurisdiction assigned to it under s. 91(2A) of the Constitution Act, 1867.
The evolution of the scope of a constitutional head of power cannot result in encroachment on a power assigned to another level of government. A review of the historical and legal contexts makes it possible to identify the essential characteristics onto which new realities can be grafted.
The evolution of the role of women in the labour market and of the role of fathers in child care are two social factors that have had an undeniable economic impact on individuals who are active participants in the labour market. A generous interpretation of the provisions of the Constitution permits social change to be taken into account. The provincial legislatures have jurisdiction over social programs, but Parliament also has the power to provide income replacement benefits to parents who must take time off work to give birth to or care for children. The provision of income replacement benefits during maternity leave and parental leave does not trench on the provincial jurisdiction over property and civil rights and may validly be included in the EIA.
For these reasons, I would allow the appeal, set aside the decision of the Court of Appeal, with costs, and answer the constitutional questions as follows:
Question 1: Does s. 22 of the Employment Insurance Act encroach upon provincial legislative competence and, more particularly, provincial legislative competence over property and civil rights and matters of a merely local or private nature under ss. 92(13) and 92(16) of the Constitution Act, 1867?
Question 2: Does s. 23 of the Employment Insurance Act encroach upon provincial legislative competence and, more particularly, provincial legislative competence over property and civil rights and matters of a merely local or private nature under ss. 92(13) and 92(16) of the Constitution Act, 1867?
Question 3: Is s. 22 of the Employment Insurance Act ultra vires the Parliament of Canada and, more particularly, does it exceed the Parliament of Canada’s legislative competence over unemployment insurance under s. 91(2A) of the Constitution Act, 1867?
Question 4: Is s. 23 of the Employment Insurance Act ultra vires the Parliament of Canada and, more particularly, does it exceed the Parliament of Canada’s legislative competence over unemployment insurance under s. 91(2A) of the Constitution Act, 1867?
A P P E N D I X
Employment Insurance Act, S.C. 1996, c. 23, as it read at the time of the reference:
Fédération des producteurs de volailles du Québec v Pelland,  1 S.C.R. 292, 2005 SCC 20; Reference re Same-Sex Marriage,  3 S.C.R. 698, 2004 SCC 79; Kitkatla Band v British Columbia (Minister of Small Business, Tourism and Culture,  2 S.C.R. 146, 2002 SCC 31; Hodge v The Queen (1883), 9 App. Cas. 117; Citizens Insurance Co. of Canada v Parsons (1881), 7 App. Cas. 96; Global Securities Corp. v British Columbia (Securities Commission),  1 S.C.R. 494, 2000 SCC 21; General Motors of Canada Ltd v City National Leasing,  1 S.C.R. 641; Martin Service Station Ltd v Minister of National Revenue,  2 S.C.R. 996; Saumur v City of Quebec,  2 S.C.R. 299; Attorney-General for Alberta v Attorney-General for Canada,  A.C. 117; Hills v Canada (Attorney General),  1 S.C.R. 513; Reference re The Employment and Social Insurance Act,  S.C.R. 427, aff’d Attorney-General for Canada v Attorney-General for Ontario,  A.C. 355; Abrahams v Attorney General of Canada,  1 S.C.R. 2; Tétreault-Gadoury v Canada (Employment and Immigration Commission),  2 S.C.R. 22; Williams v Canada,  1 S.C.R. 877; Bliss v Attorney General of Canada,  1 S.C.R. 183; Brooks v Canada Safeway Ltd,  1 S.C.R. 1219; Attorney General of Canada v Silk,  1 S.C.R. 335; Dick v Deputy Attorney General of Canada,  2 S.C.R. 243; Schachter v Canada,  3 F.C. 515.
Act respecting labour standards, R.S.Q., c. –1.1, s. 81.4, 81.10.
Act to amend the Unemployment Insurance Act and the Employment and Immigration Department and Commission Act, S.C. 1990, c. 40, s. 14.
Act to amend the Unemployment Insurance Act, 1971 (No. 3), S.C. 1980-81-82-83, c. 150, s. 5.
Civil Code of Lower Canada, arts. 176, 177.
Constitution Act, 1867, ss. 91(2A), 92(13), (16).
Court of Appeal Reference Act, R.S.Q., c. R-23, s. 1.
Employment and Social Insurance Act, S.C., 1935, c. 38.
Employment Insurance Act, S.C. 1996, c. 23, ss. 22, 23.
National Employment Commission Act, 1936, S.C.1936, c. 7, Preamble.
Supreme Court Act, R.S.C. 1985, c. S-26, s. 36.
Unemployment Insurance Act, 1940, S.C. 1940, c. 44, First Schedule, Part II.
Unemployment Insurance Act, 1971, S.C. 1970-71-72, c. 48, s. 30(1).
Unemployment Insurance Commission Regulations, 1949, SOR/49-524, s. 5A [ad. SOR/50-515, s. 11].
Authors and other references
Brun, Henri, et Guy Tremblay. Droit constitutionnel, 4e éd. Cowansville, Qué.: Yvon Blais, 2002.
Campeau, Georges. From UI to EI: Waging War on the Welfare State. Translated by Richard Howard. Vancouver: UBC Press, 2005.
Canada. Commission of Inquiry on Unemployment Insurance Report. Ottawa: Queen’s Printer, 1986.
Canada. Employment and Immigration Canada. Unemployment Insurance in the 1980s. Ottawa: Queen’s Printer, 1981.
Canada. Department of Labour. Unemployment insurance in the 70's. Ottawa: Queen’s Printer, 1970.
Canada. House of Commons. Standing Committee on Labour, Manpower and Immigration. Minutes of Proceedings and Evidence of the Standing Committee on Labour, Manpower and Immigration, Issue No. 9, December 3, 1970, p. 9 : 28.
Canada. House of Commons. Sub-committee on Equality Rights. Equality for All. Ottawa: Queen’s Printer, 1985.
Canada. Report of the Committee of Inquiry into the Unemployment Insurance Act. Ottawa: Queen’s Printer, 1962.
Canada. Report of the Study for Updating the Unemployment Insurance Programme. Ottawa: Queen’s Printer, 1968.
Canada. Royal Commission on Dominion-Provincial Relations. Report of the Royal Commission on Dominion-Provincial Relations, vol. II. Ottawa: Queen’s Printer, 1940.
Canada. Royal Commission on the Status of Women in Canada. Report of the Royal Commission on the Status of Women in Canada. Ottawa: The Commision, 1970.
Frémont, Jacques. “Assurance-chômage, maternité et adoption: les récentes modifications et leur validité” (1982-83), 17 R.J.T. 497.
Issalys, Pierre, et Gaylord Watkins. Unemployment Insurance Benefits: A Study of Administrative Procedure in the Unemployment Insurance Commission. Study prepared for the Law Reform Commission of Canada. Ottawa: Law Reform Commission of Canada, 1977.
Ledoux, Simon. L’influence du droit constitutionnel dans l’émergence et l’évolution du droit aux prestations de maternité, d’adoption et parentales au sein de la Loi sur l’assurance-chômage. Montréal: Faculté des études supérieures, Université de Montréal, octobre 1991.
Merriam-Webster’s Collegiate Dictionary, 10th ed. Springfield, Mass.: Mirriam-Webster Inc., 1994, “unemployment insurance”.
Nouveau Petit Robert: Dictionnaire alphabétique et analogique de la langue française. Paris: Dictionnaires Le Robert, 2003, “chômage”, “chômé”, “chômeur”.
Claude Joyal and René Leblanc, for the appellant (instructed by Attorney General of Canada, Montreal).
Dominique Rousseau and Pierre Christian Labeau, for the respondent (instructed by Attorney General of Quebec, Sainte-Foy).
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