3. 3. Response to the Report
2. b) Recommendation 3: Salaries for Senior Judges of the North
3. c) Recommendation 4: Salary Differential between Trial and Appellate Judges
4. d) Recommendation 5: Division of Annuity on Relationship Breakdown
5. e) Recommendation 6: Survivor Benefits for Single Judges
6. f) Recommendation 7: Enhanced Annuity for Judges who Retired between 1992-1997
7. g) Recommendations 8-14: Allowances
8. h) Recommendation 15: Supreme Court of Canada Retirement after Ten Years
9. i) Recommendation 16: Representational Costs

b) Recommendation 3: Salaries for Senior Judges of the North

The Government accepts the Commission recommendation that the Senior Judges of the Northern Territories receive the same salary as provincial superior court Chief Justices.^[17] At the same time the Government is pleased to take this opportunity to announce that the Government will also propose that the necessary amendments be made to designate the northern Senior Judges as Chief Justices of their respective courts.

c) Recommendation 4: Salary Differential between Trial and Appellate Judges

The Commission declined to recommend a salary differential between trial judges and court of appeal judges as had been proposed by some members of Court of Appeal.^[18] The Government accepts and endorses the Commission's reasons in this regard.

d) Recommendation 5: Division of Annuity on Relationship Breakdown

As proposed by the Government, and supported by the judiciary, the Commission recommended a mechanism to divide the judicial annuity in the event of a relationship breakdown.^[19] The annuity scheme for the federally appointed judiciary is unique in failing to provide for such a mechanism.

The Commission's recommendation largely mirrors the Government's own proposal, but for one aspect, the deemed accrual period. Unlike most pension plans, the judicial annuity scheme does not provide for an annual accrual formula. In order to calculate the division of an annuity on relationship breakdown, a "notional" accrual period must be established. The Government had proposed that the deemed period of accrual would cease on the date the judge became entitled to a full annuity.

The Commission's recommendation would calculate the accrual period based on the expected period of judicial service. In the Commission's view, this formula would be fairer for both judges and spouses, as it can accommodate the annuity being shared with a spouse in the circumstances of a second conjugal breakdown.. The Government is prepared to accept that the Commission's recommended approach represents a reasonable, cost-neutral mechanism for dividing the judicial annuity.

e) Recommendation 6: Survivor Benefits for Single Judges

The Commission declined to recommend a change in the provision of survivor benefits for single judges.^[20] In doing so, the Commission accepted the Government's submission in this regard.

f) Recommendation 7: Enhanced Annuity for Judges who Retired between 1992-1997

The Commission also accepted the Government's position with respect to, and declined to recommend, proposed changes to annuities payable to judges who retired during the period of fiscal restraint between 1992 and 1997.^[21]

g) Recommendations 8-14: Allowances

The Commission recommended that the Incidental Allowance^[22] remain unchanged^[23]. The Government accepts the reasons given by the Commission in this regard.

The Commission recommended that Regional Senior Judges^[24] of Ontario receive a representational allowance^[25] of $5,000 per year^[26]. In view of Ontario's size and the distribution of its population, Regional Senior Judges take on responsibilities in representing their courts within defined geographical areas of the province that are akin to the duties undertaken by Chief Justices and other senior judges. In light of all of the circumstances, the Government accepts this recommendation.

The Government also accepts the Commission recommendation that a Northern Allowance^[27] should be paid to the superior court judge resident in Labrador.^[28] This allowance is merited given that the higher cost of living and isolation experienced in Labrador is similar to that experienced by judges currently entitled to the Northern Allowance.

The Commission made a number of recommendations concerning relocation expenses^[29] for judges. Presently, the Removal Allowance Order^[30] provides a six-month time period for a judge to sell his or her home. In specific circumstances, that six-month period may be extended for "an additional period" which can run up to a year.^[31] The judiciary had requested that this period of time be extended. The Commission declined to make this recommendation, but did recommend that the Commissioner for Federal Judicial Affairs have the discretion to provide an additional period time in the case of "unusual" circumstances.^[32] In the Government's view, the current Removal Allowance Order guidelines provide sufficient discretion so that such an additional period may be granted where circumstances warrant.

The Government also accepts Recommendation 12,^[33] that judges of the federally constituted courts and superior courts in the Northern territories be reimbursed for relocation expenses incurred within two years prior of the judge becoming eligible to retire. Judges of these courts are required to comply with statutory residency requirements when they accept their appointments, and many will incur relocation expenses upon their retirement as they return to the parts of Canada in which they resided prior to appointment. The recommendation is designed to be cost-neutral, and will provide flexibility to these judges to aid their retirement planning. The Government therefore accepts this proposal.

The Commission also recommended that the partners of judges of the federally constituted courts be reimbursed for expenses incurred in an obligatory relocation, up to an accountable $5,000 limit^[34]. The Government accepts this recommendation on the understanding that "partners" mean married spouses and common-law partners, and the expenses in question relate to expenses incurred as a result of a disruption in the partner's employment.

The Government accepts Recommendation 14^[35], wherein the Commission declined to recommend that all superior court judges be entitled to relocation expenses to permit relocation to any part of Canada upon retirement.

h) Recommendation 15: Supreme Court of Canada Retirement after Ten Years

The Commission recommended that judges of the Supreme Court of Canada should be eligible to retire with 10 years of service on that Court irrespective of age.^[36] The Government accepts this recommendation. Service as a member of the Supreme Court of Canada is extremely demanding. As the court of last resort, these judges must not only manage a uniquely heavy case load but are required to do so with the highest level of personal commitment and professional rigour. Also, most Supreme Court judges have already served for extensive periods on courts of appeals prior to their appointment to the Supreme Court. In most cases, members of the Supreme Court of Canada would therefore be eligible to retire under the normal "Modified Rule of 80" retirement rule.^[37] As a result, this special retirement provision for Supreme Court of Canada judges will not be used frequently.

i) Recommendation 16: Representational Costs

As indicated above, the Government is not prepared to fully accept the Commission's recommendation that the judiciary's current entitlement to reimbursement of legal representational costs be increased. The Commission recommended that the judiciary be reimbursed for 100% of disbursements and 66% of legal fees.^[38]

The current Judges Act provision provides for 50% reimbursement of the judiciary's legal costs on a solicitor-client basis as assessed by the Federal Court^[39]. It should be recalled that this formula modified the Drouin Commission recommendation for 80% reimbursement of the judiciary's legal representational costs.^[40] In its December 13, 2000 Response, the Government justified its modification of the Drouin recommendation on the basis that it would afford the representatives of the judiciary a largely unchecked discretion in deciding what costs would be incurred for legal counsel, expert witnesses and the like in preparation for a Commission. The concern was that the public would be held responsible for the payment of the significant and unpredictable expenditures incurred by the judiciary.

The Government's 50% formula provided a reasonable contribution to the costs of the participation of the judiciary, while at the same time establishing reasonable limits on such expenditures. The equal sharing of costs by public and the judiciary was regarded as fair, given that the members of the judiciary are the immediate beneficiaries of the Commission's recommendations. It also provided an appropriate financial incentive to ensure that the costs are incurred reasonably and prudently.

The Government continues to hold the view that there should be a financial incentive to ensure that representational costs are prudently incurred. This rationale applies equally to disbursements as well as legal fees, especially given that disbursements in these matters - for example in retaining expert compensation consultants - can be quite significant.

Accordingly, the Government will propose that representatives of the judiciary should be entitled to reimbursement of 66% of representational costs, both disbursements and legal fees. These costs would continue to be subject to assessment as currently required.

^[17] Recommendation 3: The Commission recommends that the senior northern judges receive equivalent compensation to that of a chief justice until such time as chief justices are appointed in those jurisdictions.

^[18] Recommendation 4: The Commission does not recommend a salary differentiation between puisne judges who sit on courts of appeal and puisne judges who preside at trials.

^[19] Recommendation 5: The Commission recommends that the Judges Act be amended to provide for:

• the possibility of dividing, upon conjugal breakdown, the judicial annuity deemed to accrue during a relationship, up to a 50% limit;
• the judicial annuity to be deemed to accrue over the judge's entire period of judicial service, for the purpose of determining the portion of the judicial annuity that is subject to division upon conjugal breakdown;
• a lump sum settlement option, to ensure a clean break and the possibility of deferring such settlement until the date when the judge will have attained age 55 and completed 10 years of service, if applicable; and
• the demographic assumptions used for the most recent Actuarial Report on the Pension Plan for the Federally Appointed Judges to be used for purposes of determining the value of the judicial annuity and the expected retirement date of a judge in calculating the portion of the judicial annuity subject to division.

^[20] Recommendation 6: The Commission recommends that there be no change in the provision for survivor benefits for single judges until the matter is addressed by the government in the wider federal context.

^[21] Recommendation 7: The Commission declines to recommend any change to the judicial annuities payable to the judges who retired during the 1992 97 time period.

^[22] The incidental allowance of $5,000 per year (s. 27(1), Judges Act) permits the judiciary to purchase items and equipment, such as robes, law books and computers, which assist in the execution of judicial functions.

^[23] Recommendation 8: The Commission recommends that the Incidental Allowance of $5,000 per annum for each judge remain unchanged.

^[24] "…Ontario has divided the province into eight judicial regions, with a regional senior judge administering the judges in each of those regions." (p. 76, Report)

^[25] A representational allowance (s. 27(6), s. 27(7), Judges Act) reimburses Chief Justices and other like senior judges for travel and other expenses actually incurred as they discharge their special extra-judicial obligations such as representing their courts at conferences and public events.

^[26] Recommendation 9: The Commission recommends that effective April 1, 2004, s. 27(6) of the Judges Act be amended such that regional senior judges in Ontario be added to the judges entitled to a representational allowance under that section, and that the representational allowance for such regional senior judges be set, in s. 27(7), at an accountable maximum yearly amount of $5,000.

^[27] The Northern Allowance (s. 27(2), Judges Act) of $12,000 is intended to contribute to the higher cost of living in the territories.

^[28] Recommendation 10: The Commission recommends that the Judges Act be amended to provide for the payment of an isolated post allowance to the resident Labrador judge in the amount of $12,000 per annum, in conformity with the isolation allowances provided to the judges of the Northern Territories.

^[29] Pursuant to s. 40 of the Judges Act, certain judges are entitled to reimbursement of moving expenses in prescribed circumstances, such as upon appointment to a place other than where the judge resided at the date of appointment.

^[30] The Removal Allowance Order is the regulation made under the Judges Act which guides the specific entitlements to reimbursement of moving expenses.

^[31] p. 81, Report

^[32] Recommendation 11: The Commission recommends that the requested extension not be granted and that the Office of the Commissioner of Federal Judicial Affairs be mandated to deal with any circumstances that in the Commissioner's view can reasonably be deemed 'unusual'.

^[33] Recommendation 12: The Commission recommends that, notwithstanding paragraphs 40(1)(c) and (e), claims under these paragraphs for expenses made in anticipation of a relocation, but prior to retirement or resignation from office, shall be reimbursable by a removable allowance, provided that:

• the anticipated expenses are incurred no earlier than two years prior to the judge becoming eligible to retire, and
• that all relocation expenses connected with that relocation be paid within the timeframes currently provided in the Removal Allowance Order and that no later expenses should be reimbursed.

^[34] Recommendation 13: The Commission recommends that the partners of judges of the Supreme Court of Canada, the Federal Court, the Federal Court of Appeal and the Tax Court of Canada be reimbursed for incurred expenses in the obligatory relocation, up to an accountable $5,000 limit.

^[35] Recommendation 14: The Commission recommends that there be no change to the entitlement to the post retirement removal allowance.

^[36] Recommendation 15: The Commission recommends that justices of the Supreme Court of Canada be granted the exceptional privilege of eligibility for retirement on the full judicial annuity after 10 years of service on that bench regardless of age.

^[37] s. 42(1)(a), Judges Act; with at least 15 years of service, when age plus years of service total 80.

^[38] Recommendation 16: The Commission recommends that the Government pay 100% of the disbursements and two thirds of the legal fees (subject to assessment) incurred by the Association and Council in preparing their submissions and bringing them before the Commission.

^[39] Judges Act, s. 26.3

^[40] The Drouin Commission made the following recommendation concerning representational costs: Recommendation 22. The Government pay 80% of the total representational costs of the Conference and Council incurred in connection with their participation in the process of this inquiry as of May 31, 2000, such payments by the Government not to exceed the aggregate amount of $230,000, inclusive of the amount of $80,000 already contributed by the Government as of the date of this report and any extraordinary and explicitly identifiable increase to the budge of the Council in order to fund the participation of the Judiciary in the work of this Commission, and that the remainder of such costs be paid by the Conference and Council in such proportion as they deem appropriate.