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A-233-79
Sharon Anne Calder, Stephen Woodcock, Phyllis Westhaver, Betty D. Godfrey, Richard West, James E. Connors, Leighton Mousseau, Michael Hughes, Namen Somerton, Mike Lelacheur, Wendy Blenkhorn, Kathleen Tupper, Sylvia Weir, Brent Molyneaux, Helen Wallace, Alexander Ross, Esther Chesnutt, Gerald Conway, Margaret Rogers, Judy Fobin, Harry Brightman, Gary Tanner, Charles Cruikshank, Ethel Cunningham, William Leadley, John Zinck, Jane Fillis, Cathe- rine Barrett, Roderick MacEachern, Ezek J. Essein, Carol G. Tattrie, Marjorie Falconer, Robert Sugg, Leonard Ashe, Donald W. Cooke and Margaret Bennett (Applicants)
v.
Minister of Employment and Immigration (Respondent)
Court of Appeal, Urie and Le Dain JJ. and Kelly D.J.—Halifax, November 6; Ottawa, December 17, 1979.
Judicial review Unemployment insurance Application to review and set aside Umpire's dismissal of appeal from decision of Canada Employment and Immigration Commis sion Extended benefits received during extended benefit period as permitted by s. 166(2) of the Unemployment Insur ance Regulations Incorrect statistical data used in deter mining extended benefit period Applicants were notified that they were required to repay overpayment pursuant to s. 57 of the Act Whether or not s. 166(2) of the Regulations was ultra vires because of being unauthorized by s. 58(u) of the Act Whether or not s. 57 of the Act applied to the Commission's failure, through its own fault, to apply provisions of s. 37 Federal Court Act, R.S.C. 1970 (2nd Supp.), c. 10, s. 28 Unemployment Insurance Act, 1971, S.C. 1970-71-72, c. 48, ss. 37(2)(b)(ii), 49(1), 57(1), 58(u) Unemployment Insurance Regulations, SOR/71-324, s. 166(2).
This is a section 28 application to review and set aside the decision of an Umpire under the Unemployment Insurance Act, 1971, dismissing an appeal from a decision of a Board of Referees, which had dismissed an appeal from a decision of the Canada Employment and Immigration Commission. Appli cants received extended benefits during an extended benefit period determined by former section 37 of the Act. In making this determination, the Commission was permitted by subsec tion 166(2) of the Unemployment Insurance Regulations, to use statistics provided by Statistics Canada. When it was discovered that incorrect statistical data had been used in these calculations, the Commission informed the applicants that the overpayments were to be recovered pursuant to section 57 of the Act. Applicants argue that the Umpire erred in law, firstly,
because subsection 166(2) of the Regulations was ultra vires as it was not authorized by paragraph 58(u) of the Act, and secondly, because section 57 of the Act did not apply to the failure of the Commission, through its own error and without fault on the part of the applicants, to apply the provisions of section 37.
Held, the application is dismissed. The Commission has not failed to exercise its regulation-making power under paragraph 58(u) because some matters of significance have been left to the judgment of Statistics Canada. Under that section, the Commission was to prescribe the period for which an average of rates of unemployment should be determined for the pur poses of section 37, but the Commission was not empowered to prescribe how the rates themselves should be determined. In leaving that statistical function to be carried out by Statistics Canada the Commission was not delegating its regulation-mak ing authority or converting it into a discretionary decision-mak ing power, but was adopting for its own administrative purposes statistical information produced by another agency. Parliament indicated an intention that reliance may be placed on the rates of unemployment determined by Statistics Canada. The Umpire did not err in failing to hold that section 57 of the Act does not apply to a case of overpayment as a result of computer error by the Commission in the application of former section 37. It cannot be argued that section 57 impliedly contemplates the reconsideration of a decision with respect to a claim for unemployment insurance benefits and that in the present case there was no decision to reconsider, but simply an operating error in the processing of data received from Statistics Canada.
Langford v. Employment and Immigration Commission [ 1979] 2 F.C. 693, distinguished.
APPLICATION for judicial review. COUNSEL:
Edna Chambers, Andrew Pavey and Archie
Kaiser for applicants.
Martin C. Ward for respondent.
SOLICITORS:
Dalhousie Legal Aid Service, Halifax, for applicants.
Deputy Attorney General of Canada for respondent.
The following are the reasons for judgment rendered in English by
LE DAIN J.: This is a section 28 application to review and set aside the decision of an Umpire under section 95 of the Unemployment Insurance Act, 1971, S.C. 1970-71-72, c. 48, dismissing an appeal from a decision of a Board of Referees, which had dismissed an appeal from a decision of the Canada Employment and Immigration Com mission.
The applicants are part of a much larger number of unemployment insurance claimants in the Province of Nova Scotia, said to be over 5,000, from whom the Commission has claimed repay ment of varying amounts of unemployment ben efits paid to them during an extended benefit period as a result of an error made by the Com mission in the application of the relevant data. It was agreed at the hearing before the Umpire that the case of the applicant Sharon Anne Calder should be taken as representative and that the decision in her case should apply to that of the other applicants. The applicants raise issues of law which are common to them all. There is no dispute of fact. The facts concerning the case of the appli cant Sharon Anne Calder (hereinafter referred to as "the applicant") indicate the general nature of the Commission's decision in these cases.
The applicant was employed as a substitute school teacher by the Halifax Board of School Commissioners from February 10, 1976, to July 28, 1976, when she was laid off because of a shortage of work. The applicant applied for unem ployment insurance, and from the time of her lay-off until June 1977, she received $202 in ben efits every two weeks. On June 29, 1978, she received a letter from the Commission informing her that she was not entitled to the benefits she had received from May 1, 1977, to June 11, 1977. The letter reads as follows:
We regret to inform you that an error has been made on your claim for Unemployment Insurance. The error caused us to pay you benefits longer than we should between April and Septem- ber last year.
The error was caused by an incorrect use of unemployment rates in the region where you lived. The length of UI benefits depends, in part, on this rate.
We are obliged by law to recover overpayments. It would be much appreciated if yôu would contact your local UI office and arrange to discuss your case.
We very much regret this error. With your cooperation, we will do everything we can to limit hardship or inconvenience to you. Please have ready any Records of Employment you have not used to establish a claim as these may affect the overpayment.
We are acting under the authority of the former Section 37 and the present Section 57 of the Unemployment Insurance Act. Any decisions leading to overpayments are subject to appeal. Therefore, once we have notified you of the amount of
the overpayment, you may appeal to a Board of Referees under Section 94 of the Act. You may wish to discuss this when you contact our office.
On July 31, 1978, the Commission sent the applicant a "Notice of Non-Entitlement" which stated in part:
After a review of your recent claim, we find that you were not entitled to benefits from 1 May, 1977 to 11 June, 1977. As a result, the Commission has decided that an overpayment of benefits has been made to you.
This decision arises from an incorrect use, by the Commis sion, of the unemployment rate in the region where you lived. The length of time you are entitled to benefits depends, in part, on this rate.
The Commission is obliged to recover this overpayment. We will advise you shortly of the exact amount owing and you may negotiate an installment repayment arrangement with the Commission, if you have not already done so.
Across the bottom of this notice is printed the words, "Pursuant to former Section 37 and present Section 57 of the Unemployment Insurance Act, 1971."
By letter from the Commission the same date the applicant was informed of the amount of the alleged overpayment as follows:
An examination of your claim indicates that you have received $606.00 in Unemployment Insurance benefits to which you were not actually entitled.
This overpayment of benefits was caused by an incorrect use, by the Commission, of the Unemployment Rate in the Region where you lived.
The weeks for which overpayment was claimed were the thirteenth to the eighteenth weeks inclu sive of extended benefits at $101 per week.
The right to extended benefits in this case was governed by section 37 of the Act, as it was before being repealed effective September 11, 1977, by the Employment and Immigration Reorganization Act, S.C. 1976-77, c. 54, s. 41. By section 73 of the latter Act the former section 37 applied to an extended benefit period arising out of an initial benefit period that was established before the repeal. Former section 37 of the Act reads as follows:
37. (1) When at the end of
(a) a re-established initial benefit period of a minor attach ment claimant who has no extended benefit period under section 34, or
(b) the extended benefit period under section 34 of any other claimant
the rate of unemployment in the region where the claimant resides (in this section called the "regional rate") exceeds four per cent and the national rate of unemployment (in this section called the "national rate") is less than the regional rate by more than one percentage point, the claimant shall, if he resides in Canada, be given an extended benefit period not exceeding eighteen consecutive weeks and benefits are payable for any week of unemployment that falls in that period and sections 35 and 36 are applicable thereto.
(2) Where a claimant is given an extended benefit period under subsection (1), that extended benefit period terminates
(a) at the earlier of
(i) the end of the week immediately following a week in which the difference between the national rate and the regional rate becomes one percentage point or less or the regional rate becomes four per cent or less, and
(ii) the end of the sixth week of such extended benefit period if the national rate is less than the regional rate by no more than two percentage points;
(b) if such extended period is not terminated under para graph (a), at the earlier of
(i) the end of the week immediately following a week in which the difference between the national rate and the regional rate becomes two percentage points or less or the regional rate becomes four per cent or less, and
(ii) the end of the twelfth week of such extended benefit period if the national rate is less than the regional rate by no more than three percentage points; or
(c) if such extended period is not terminated under para graph (a) or (b), the earlier of
(i) the end of the week immediately following a week in which the difference between the national rate and the regional rate becomes three percentage points or less or the regional rate becomes four per cent or less, and
(ii) the end of the eighteenth week of such extended benefit period.
It will be seen from the foregoing provision that the extended benefit period to which a claimant was entitled under section 37 depended on the "regional rate" of unemployment and the differ ence between that rate and the "national rate" of unemployment at a particular time. In applying section 37 of the Act the Commission used average monthly regional and national rates of unemploy ment furnished to it by Statistics Canada. In doing so, the Commission acted pursuant to subsection
166(2) of the Unemployment Insurance Regula tions, which, as it read at the relevant times (SOR/71-324), was as follows:
166....
(2) For the purposes of section 37 of the Act, "national rate of unemployment" and "regional rate of unemployment" at any time means the average of the unadjusted monthly national or regional rates of unemployment respectively as determined by Statistics Canada for the most recent twelve month period immediately preceding the time for which those rates are available.
The statutory authority under which subsection 166(2) of the Regulations purports to have been made is paragraph (u) of section 58 of the Act, which, as it read before it was replaced effective September 11, 1977 by the Employment and Immigration Reorganization Act, S.C. 1976-77, c. 54, s. 49(2), was as follows:
58. The Commission may, with the approval of the Governor in Council, make regulations
(u) averaging any rates of unemployment for the purposes of paying extended benefits and prescribing the manner in which such averaging shall be carried out;
The submission of the Commission to the Board of Referees, which forms part of the record, explains the nature of the error that was made in the application of the data received from Statistics Canada. Referring to the regional and national rates of unemployment specified in subsection 166(2) of the Regulations, the Commission stated:
Those rates are established monthly for each of the 16 regions described in Schedule B of the Regulations (see exhibit 3 and 4).
Each month, the Commission receives from Statistics Canada a new set of unemployment rates. Those rates are immediately coded and sent to various pay centers where they are used until updated by more recent rates.
Following coding errors, computers at regional pay centers were fed with erroneous data with the result that benefit periods which should have terminated at a certain time con tinued beyond the limits set by the Act.
Four different situations arose from those errors:
a) regionally extended benefits were paid while the differ ence between the national rate and regional rate was equal to one percent; this contravenes the requirements of section 37(1) of the Act.
b) regionally extended benefit periods which should have terminated at the end of the week following the week in which the difference between the national rate and the regional rate had become equal to one percent continued; this contravenes the requirements of section 37(2)(a)(i) of the Act.
c) regionally extended benefits were paid beyond the twelfth week while the difference between the national rate and the regional rate was equal to three percent; this contravenes the requirements of section 37(2)(b)(ii) of the Act.
d) regionally extended benefit periods which had started at least twelve weeks before and which should have terminated at the end of the week following the week in which the difference between the national rate and the regional rate had become equal to three percent continued; this contra venes the requirements of section 37(2)(c)(i) of the Act.
The error in the applicant's case fell into catego ry (c), that is, one which involved the application of subparagraph 37(2)(b)(ii) of the Act. The extended benefit period should have terminated at the end of the twelfth week because the difference between the regional rate and the national rate was not more than three per cent.
The reconsideration of the claims of the appli cants and the calculation of the amount to which they were not entitled was made by the Commis sion pursuant to subsection 57(1) of the Act, which reads as follows:
57. (1) Notwithstanding section 102 but subject to subsec tion (6), the Commission may at any time within thirty-six months after benefit has been paid or would have been payable reconsider any claim made in respect thereof and if the Com mission decides that a person has received money by way of benefit thereunder for which he was not qualified or to which he was not entitled or has not received money for which he was qualified and to which he was entitled, the Commission shall calculate the amount that was so received or payable, as the case may be, and notify the claimant of its decision.
Subsection 49(1) of the Act provides for repay ment of an amount to which a claimant is not entitled as follows:
49. (1) Where a person has received benefit under this Act or the former Act for any period in respect of which he is disqualified or any benefit to which he is not entitled, he is liable to repay an amount equal to the amount paid by the Commission in respect thereof.
Section 175 of the Regulations authorizes the Commission, in certain cases, to declare that an amount owing under section 49 of the Act is no longer due and owing as follows:
175. (1) Amounts owing under sections 47, 49, 51 and 52 of the Act may be declared by the Commission to be no longer due and owing, where
(a) the sums in the aggregate do not exceed five dollars, and a benefit period is not current;
(b) the claimant is deceased;
(c) the claimant is a discharged bankrupt;
(d) the claimant is an undischarged bankrupt, the final dividend has been received and the trustee has been dis charged; and
(e) the Commission considers that, having regard to all the circumstances,
(i) the sums are uncollectable, or
(ii) the repayment of the sums would result in undue hardship to the claimant.
(2) Where the Commission, pursuant to subsection (1), declares that an amount is no longer due and owing, that amount shall be written off.
The applicants contend that the Umpire erred in law in dismissing the appeal from the decision of the Board of Referees. They advance two grounds of attack, which may be summarized as follows:
1. Subsection 166(2) of the Regulations is ultra vires because it was not authorized by para graph 58(u) of the Act;
2. Section 57 of the Act does not apply to a failure of the Commission, through its own error and without fault on the part of the claimant, to apply the provisions of section 37 of the Act respecting termination of an extended benefit period.
The first ground of attack is, as I understand it, that in so far as the decision of the Commission pursuant to section 57 of the Act was based on rates of unemployment furnished by Statistics Canada, as contemplated by subsection 166(2) of the Regulations, it was invalid as having been based on an ultra vires provision. What the effect might be on the original right to the extended benefit period if subsection 166(2) were found to be ultra vires was not discussed at the hearing and does not have to be considered on this application. The contention with respect to subsection 166(2) is that it was not a valid exercise of the statutory authority conferred by the former paragraph 58(u) of the Act. It is argued that in making subsection 166(2) the Commission did not, as required by paragraph 58(u), regulate the manner in which the average regional and national rates of unemploy ment should be determined but left the determina tion to the discretion of Statistics Canada. The making of subsection 166(2) constituted, it is said,
an unauthorized subdelegation of the power to make regulations or the conversion of a power to make regulations into a power to exercise a discre tion in particular cases, contrary to the principles affirmed in such cases as City of Verdun v. Sun Oil Company Ltd. [1952] 1 S.C.R. 222; The Attorney General of Canada v. Brent [1956] S.C.R. 318; and Brant Dairy Co. Ltd. v. Milk Commission of Ontario [ 1973] S.C.R. 131.
Before considering the merits of this contention it should be observed that the validity of subsec tion 166(2) of the Regulations was considered by this Court in the case of Langford v. Employment and Immigration Commission [ 1979] 2 F.C. 693, Montreal, September 21, 1979. It was argued in that case that subsection 166(2) was invalid on the ground that it gave to the expressions "national rate of unemployment" and "regional rate of unemployment" a meaning that could not be reconciled with the definitions of "national rate of unemployment", "average national rate of unem ployment", and "rate of unemployment" found in paragraphs (s) and (w) of subsection 2(1) of the Act. That contention was rejected and subsection 166(2) was held to have been validly made in the exercise of the authority conferred by paragraph 58(u) of the Act. Since the ground of attack on the validity of subsection 166(2) that is urged in the present case did not have to be considered in Langford, the decision in that case is not a bar to its consideration here.
The clarity of paragraph 58(u) of the Act in the form it assumed at the time subsection 166(2) of the Regulations was adopted certainly leaves something to be desired, but its purpose appears to have been to confer authority to regulate the deter mination of the average rate of unemployment required for the application of section 37 of the Act. The provision indicates a legislative intention that the rates of unemployment to be applied under section 37 are to be average rates, and that the Commission is to establish by regulation the manner in which the averaging shall be carried out. The Commission exercised its authority by prescribing in subsection 166(2) of the Regula tions that the average national and regional rates of unemployment for purposes of the former sec tion 37 of the Act shall be "the average of the
unadjusted monthly national or regional rates of unemployment respectively as determined by Sta tistics Canada for the most recent twelve month period immediately preceding the time for which those rates are available." To my mind that is a regulation of the average to be used and the manner in which it shall be determined. The deter mination of the monthly rates of unemployment and the average over a twelve-month period is a statistical operation that has been properly left to Statistics Canada, which was established under the Statistics Act, S.C. 1970-71-72, c. 15 with the following duties set out in section 3 of the Act:
3....
(a) to collect, compile, analyse, abstract and publish statisti cal information relating to the commercial, industrial, finan cial, social, economic and general activities and condition of the people;
(b) to collaborate with departments of government in the collection, compilation and publication of statistical informa tion, including statistics derived from the activities of those departments;
(c) to take the census of population of Canada and the census of agriculture of Canada as provided in this Act;
(d) to promote the avoidance of duplication in the informa tion collected by departments of government; and
(e) generally, to promote and develop integrated social and economic statistics pertaining to the whole of Canada and to each of the provinces thereof and to coordinate plans for the integration of such statistics.
The Unemployment Insurance Act, 1971 in paragraph 2(1)(s) indicates a legislative intention that the unemployment rates determined by Statis tics Canada may be relied on in the administration of the Act. Paragraph 2(1)(s) reads:
2. (1) In this Act,
(s) "national rate of unemployment" means the rate of unemployment as determined by Statistics Canada for the whole of Canada, and "average national rate of unemploy ment" means the monthly national rates of unemployment in a year averaged for the year;
The applicants contend that the determination of an average rate of unemployment involves several matters of discretion or judgment which should be controlled by the Commission and not left to be decided by Statistics Canada. Two mat ters in particular were emphasized in argument: the absence of any definition of unemployment or the criteria for determining who is to be considered to be part of the labour force, and the absence of any direction concerning the "rounding-off' of
percentages in determining averages. Counsel stressed the significant effect which the approach to these issues may have on average rates of unemployment as applied to the operation of former section 37 of the Act.
There may well be matters of some significance that have been left to the judgment of Statistics Canada, but it cannot be said for that reason, in my opinion, that the Commission failed to exercise its regulation-making power under paragraph 58(u). The essence of what the Commission was given authority to do under paragraph 58(u) was to prescribe the period for which an average of rates of unemployment should be determined for purposes of section 37. That the Commission has done in subsection 166(2) of the Regulations in prescribing that the period shall be "the most recent twelve month period immediately preceding the time for which those rates are available." The Commission was not empowered to prescribe how the rates themselves should be determined. In leaving that statistical function to be carried out by Statistics Canada the Commission was not in my opinion delegating its regulation-making au thority or converting it into a discretionary deci- sion-making power, contrary to the principles rec ognized in the cases that have been referred to, but was adopting for its own administrative purposes statistical information produced by another agency. As I have said, it was justified in doing so, not only by the terms of the Statistics Act but by the terms of paragraph 2(1)(s) of the Unemploy ment Insurance Act, 1971. In other words, in so far as Parliament has made rights depend on rates of unemployment, it has indicated an intention that reliance may be placed on the rates of unem ployment determined by Statistics Canada. The determination of those rates is neither a power to make regulations nor a power to adjudicate under the Unemployment Insurance Act, 1971, so that it cannot be said to involve, when carried out by Statistics Canada, an invalid delegation of either kind of power. For these reasons I am of the opinion that the applicants' attack on the validity of subsection 166(2) of the Regulations must fail.
It is necessary to consider the second ground of attack on the Umpire's decision—that he erred in
law in failing to hold that section 57 of the Act does not apply to a case of overpayment as a result of a computer error by the Commission in the application of former section 37. Two arguments were advanced in support of this contention. The first is that section 57 impliedly contemplates the reconsideration of a decision with respect to a claim for unemployment insurance benefits, and that in the present case there was no decision to reconsider, but simply an operating error in the processing of data received from Statistics Canada. In my opinion this contention is without merit. The authority conferred by section 57 is not confined to the reconsideration of decisions, as such, but is an authority to reconsider "any claim" in respect of which benefit has been paid or should have been paid. Benefit periods are established or extended and benefit is paid or refused following a claim, and the beneficiary is referred to through out the benefit period as the claimant, as may be seen from sections 20 and following of the Act. The reconsideration of a claim is the reconsidera tion of a right to benefit. That was what was done in the present case in determining whether, in view of the applicable rates of unemployment, benefit should have been paid beyond a certain point.
The second argument against the application of section 57 is based on the definition of "disenti- tled" in subsection 16(1) of the Act, which, as it read when section 37 was part of the Act, is as follows:
16. (1) In this Part,
(a) "disentitled" means to be disentitled under section 23,
25, 29, 33, 36, 44, 45, 46, 54 or 55 or under a regulation;
It is argued that in view of this definition the words "not entitled" in section 57 should be con fined to the cases specified in subsection 16(1)(a), where in each case it is provided that in certain circumstances the claimant is "not entitled" to benefit. As I understand the argument, it is, in effect, that since "disentitled" is treated as the equivalent of "not entitled" in the reference to the sections specified in paragraph 16(1)(a), the defi nition of "disentitled" in that paragraph should be treated as a definition of "not entitled" as well. In support of this argument reference is also made to
subsection 26(8) of the Interpretation Act, R.S.C. 1970, c. I-23, which provides:
26....
(8) Where a word is defined, other parts of speech and grammatical forms of the same word have corresponding meanings.
I am unable to accept this contention. In their plain meaning the words "not entitled" in section 57 clearly cover the case in which a person has been paid extended benefit beyond the time at which his extended benefit period was terminated by the terms of section 37. I cannot see how that meaning can be excluded by reliance on the defini tion of another word, "disentitled", which must have been intended to apply to the sections of Part II of the Act, such as subsection 27(2), the former paragraph 36(3)(b), subsection 38(5), and section 54, in which that word, or a modification thereof coming within the meaning of subsection 26(8) of the Interpretation Act, is used. The latter rule obviously applies to the meaning to be given to "disqualifying" in section 54. But in my opinion the words "not entitled" are neither another part of speech nor another grammatical form of the word "disentitled" within the meaning of that rule. The words "other ... grammatical forms of the same word" in subsection 26(8) must refer, I think, to modifications of the form of a particular word resulting from inflexion or declension and not to different words which may have the same or equivalent meaning.
Great stress was laid in argument on the hard ship caused to individuals by the action of the Commission pursuant to section 57. The under standable concern with this effect cannot, however, be a justification for an interpretation of the plain words "not entitled" that would deny their application to a case in which, through error, benefit has been paid to a claimant which he or she did not have a right, under the applicable provisions, to receive. Relief from hardship is to be dealt with otherwise, as indicated in section 175 of
the Regulations to which reference has already been made.
For these reasons I would dismiss the section 28 application.
* * *
URIE J. concurred.
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KELLY D.J. concurred.
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