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					                                   ADMINISTRATIVE PROCESS
                                                      SPRING 2006
                                                     Julien Morissette
PART I: INTRODUCTION AND TRANVERSAL THEMES ............................................ 3
  Class 1: Aspirations for Public Administration...................................................................... 3
    A. Institutions ..................................................................................................................... 3
    B. Processes ........................................................................................................................ 3
    C. Instruments .................................................................................................................... 3
    D. Snapshot of an Administrative Process: The LCC and Residential Schools ................ 3
  Class 2: Administrative Governance: Institutions, Processes, Objectives, Values ................ 4
    A. Recap of Previous Class ................................................................................................ 4
    B. Introduction to the Policy Process ................................................................................. 5
    C. History & Ideology ........................................................................................................ 5
  Class 3: The Rule of Law: Dicey, McRuer, Willis, Arthurs, the Charter.............................. 7
    A. Recap of previous class ................................................................................................. 7
    B. Classical Approaches to the Rule of Law ...................................................................... 7
    C. Willis vs. Dicey ............................................................................................................. 8
    D. Judicial review ............................................................................................................... 9
  Class 4: Public and Private Spheres: the Choice of Governing Instrument ........................... 9
    A. Recap of Previous Class ................................................................................................ 9
    B. Public / Private Vectors ................................................................................................. 9
    C. Privatisation / Regulation ............................................................................................ 10
PART II: THE STATUTORY DELEGATION OF PUBLIC AUTHORITIES .............. 11
  Class 5: Approaches to Statutory Interpretation .................................................................. 11
    A. Recap of Previous Class .............................................................................................. 11
    B. The Inspection, Licensing & Registration Function .................................................... 11
    C. Statutory Delegations .................................................................................................. 12
  Class 6: Constraints on the Interpretation of Legal Texts .................................................... 13
    A. Recap of Previous Class .............................................................................................. 13
    B. Official and Unofficial Interpretations ........................................................................ 14
    C. Methods of interpretation ............................................................................................ 14
    D. Controlling interpretation ............................................................................................ 14
  Class 7: The Ontario Human Rights Commission as a Creature of Statute ......................... 15
    A. Recap of Previous Class .............................................................................................. 15
    B. Origin and Rationale for the HRC ............................................................................... 16
    C. Structure and Process ................................................................................................... 17
  Class 8: Intragovernmental Conversations (Prof. Baker) ..................................................... 17
PART III: ALLOCATIVE, REDISTRIBUTIVE AND OVERSIGHT PROCESSES:
DISCRETION......................................................................................................................... 20
  Class 9: L‟État-Providence and Discretion .......................................................................... 20
    A. Recap of Previous Class .............................................................................................. 20
    B. Program expenditures .................................................................................................. 20
    C. Social Welfare State – L‟État-Providence ................................................................... 21
    D. Discretionary Justice ................................................................................................... 22
  Class 10: Criminal Injuries Compensation as a Redistributive Process ............................... 22
    A. Recap of Previous Class .............................................................................................. 22
    B. Allocation and Discretion ............................................................................................ 22
    C. Victim Services and Moral Hazard ............................................................................. 23
    D. Problem: Saskatchewan Victims of Crime Act ........................................................... 23
                                                                                                                                      2

  Class 11: The Public Protector: Formal and Informal Accountability ................................. 24
    A. Recap of Previous Class .............................................................................................. 24
    B. Why an Ombudsman? ................................................................................................. 25
    C. Character of the Institution .......................................................................................... 25
    D. Outcomes, Process, Qualities ...................................................................................... 25
    E. List of Alternatives ...................................................................................................... 26
    F. Maladministration ........................................................................................................ 26
PART IV: ALLOCATIVE, REDISTRIBUTIVE AND OVERSIGHT PROCESSES:
DISCRETION......................................................................................................................... 26
  Class 12: Statutory Instruments and Regulation: Ex ante Oversight ................................... 26
    A. Recap of Previous Class .............................................................................................. 26
    B. Nature of Normativity ................................................................................................. 27
    C. Kinds of Legislation .................................................................................................... 28
    D. Why Delegated Legislation? ....................................................................................... 28
    D. Statutory Instruments & Regulations .......................................................................... 28
  Class 13: Ex post Review of Micro-legislation .................................................................... 29
    A. Recap of Previous Class .............................................................................................. 29
    B. Ex Ante Controls ......................................................................................................... 29
    C. Ex Post Controls .......................................................................................................... 30
    D. Exercise on Regulation-Making Powers ..................................................................... 30
  Class 14: The CRTC as a Policy Hybrid .............................................................................. 31
    A. Recap of Previous Class .............................................................................................. 31
    B. Theories of Regulation ................................................................................................ 31
  Class 15: The CRTC as Government in Miniature .............................................................. 32
    A. Recap of Previous Class .............................................................................................. 32
    B. Policy Process of the CRTC ........................................................................................ 33
    C. Independence & Accountability .................................................................................. 33
PART V: GOVERNMENTAL ENTERPRISES: PRIVATIZATION, PARTNERSHIPS,
OUTSOURCING .................................................................................................................... 34
  Class 16: Crown Corporations: The Mission and Mandate of the CBC .............................. 34
    A. Recap of Previous Class .............................................................................................. 34
    B. Historical Contingency ................................................................................................ 34
    C. Owning and Operating................................................................................................. 35
    D. Purposes and Justifications for Crown Corporations .................................................. 35
  Class 17: The Rise and Fall of Petro-Canada ....................................................................... 36
    A. Recap of Previous Class .............................................................................................. 36
    B. Why Public Ownership? .............................................................................................. 36
    C. Why Privatise? ............................................................................................................. 37
  Class 18: Public-Private Partnerships; Voluntary Associations ........................................... 38
    A. Recap of Previous Class .............................................................................................. 38
    B. Public-Private Vectors ................................................................................................. 39
    C. Why the State? ............................................................................................................. 39
PART VI: CONCLUSION AND GENERAL REVIEW .................................................... 40
  Class 19: Aspirations for Public Administration Revisited ................................................. 40
    A. Recap of Previous Class .............................................................................................. 40
    B. Synopsis of the Class ................................................................................................... 40
    C. Case Study: Recreational Drugs .................................................................................. 41
    D. Conclusion ................................................................................................................... 42
                                                                                                3

May 8th, 2006

   PART I: INTRODUCTION AND TRANVERSAL THEMES
Class 1: Aspirations for Public Administration
Law is the endeavour of symbolizing human conduct governed by rules. Administrative
law is about institutions, instruments, processes and values through which public policy is
translated into law.

Child in the well story… Insurance companies and governments function much on the same
way, the idea is to make informed choices – based on the big picture, not just individual
problems. Schipol fly in the urinal story… Sometimes, commanding or „bribing‟ is not
necessary to achieve the desired behaviour.

A. Institutions

            State                           Non-State                      International
Parliament, courts, Crown        universities (close to the       UN, WTO, NATO, NAFTA
corporations,    departments,    State, also RMC), religious      arbitrators, ICC, MSF, ILO,
PMO-PCO, police, tribunals,      institutions, charitable orga-   Mercosur, IBRD, ADB,
statutory agencies (munici-      nisations, private corpora-      Catholic church, Al-Qaida
palities,   health    boards,    tions, unions, partnerships,
airport corporations), GG,       local NGOs or quasi-NGOs
army, Indian Act bands           dependent on the State
                                 (quangos), political parties,
                                 clubs, family

B. Processes

We will exclude some things, such as terror. A non-exhaustive list: voting, consultation,
lobbying, adjudication, negotiation, contract, arbitration / mediation, markets, conflict,
revelation / education / indoctrination, money, bequeathing, command / orders, deliberate
resort to chance, practice / custom.

C. Instruments

Making rules, taxing, subsidizing… These may also be looked at as processes or even
institutions. The three above categories are simply different angles to look at the institution of
government.

D. Snapshot of an Administrative Process: The LCC and Residential Schools

Issue (2a): How to deal with claims of residential school victims without being bankrupted by
lawsuits? What kind of answer should be given?
Former public policy (2d): Assimilation (hindsight), education, economies of scale
(residential) for education, understanding of dominant culture, little supervision, many
unqualified / authoritarian / predatory teachers, evangelization, etc.
Those looking for the story told in a certain way: department of justice, churches, aboriginal
leadership.
                                                                                               4

What you get from a civil trial: money, publicity, perhaps a moral judgement.

To define the system, the LCC has to tentatively figure out its objectives. It needs to find
the facts (objectives are defined by these and colour them in a certain way) through evidence
(documentary sources, personal accounts) found by independent or in-house researchers,
polls, self-reporting, public inquiries, police / CSIS investigations, parliamentary committees,
NGOs. On this long list, the government picked the LCC. Why? Get it out of the Department
of Justice, which both heightened the profile and provided independence. There was also a
wish for a legal response.

Once the LCC has the mandate, what do you do? Many options were explored: ex gratia
payments, ombudsman, injury compensation board, TRC… The three retained options were
TRC, redress programs, community-based initiatives (the abused tend to become abusers).
Compensation to individual survivors was ranked second-last on the „hope‟ list compiled by
the LCC. If all you have is a hammer, everything looks like a nail, if all you have is torts,
everything looks like a tort claim. On top of the list was public acknowledgement, followed
by apology, wrongdoers taking responsibility, help / counselling to move on. Ranking of
those things that cost money: prevention, healing communities, public memorial, individual
compensation.

Not everyone was happy with the report. Outside government and aboriginal lawyers, other
abuse survivors, some lawyers, churches were at least somewhat unhappy. The most opposed
group was the teacher‟s union, it sued the LCC. There was a perception that every single
residential school teacher was an abuser.

May 9th, 2006

Class 2: Administrative Governance: Institutions, Processes, Objectives,
Values
A. Recap of Previous Class

The theme of this class is diversity, multiplicity or goals, tools, processes, actors,
instruments. Public policy is a never-ending adjustment to circumstance. There is no
such thing as „getting it right‟, the most one can hope for is working to policy instruments that
reduce the distance between efficacy and effectivity, basically desired effects without side
effects. The cure should be better than the illness. Most of what an LRC and an LCC do is
find solutions to problems coming from yesterday‟s solutions (cf. Lord Mansfield on the CL).

The terrain on which one operates changes constantly. Ex.: When medicare was set up in the
1960‟s, the assumption was that 60-65% of the cost would be spent on doctors and nurses in
medical practice. By 1985, 80% of expenditures where elsewhere: hospitals, testing
procedures, drugs. In 2005, only about 15% is spent on doctors and 30% on drugs. This
means the institutions may have to be rethought. Another ex.: Sometimes a policy instrument
is created for a purpose and one discovers it works very well for something else that was
unforeseen. The classic ex. in Canada is the „baby-bonus‟ or family allowances established in
1947. The initial reason was to encourage consumption, with increased production and more
jobs for 400,000 demobilized soldiers (not so much to ensure that children were not in
poverty, or to help the mother to whom the cheque was made out, or to encourage natality).
The government also created the CMHC to make housing more accessible and increase
                                                                                              5

purchases at the same time. The baby bonus was similar Keynesian economics, just like
guaranteed mortgages. By the 1960‟s, the baby bonus became a part of the welfare State, as
education, medicare, CPP... Arguments against the claw-back in the 1980‟s were in terms of
family policy.

Administrative law is the translation of public policy in processes and institutions to
achieve outcomes. One challenge is that we often lose sight of what we are trying to do.
Three sub-points on this question:
   - Administrative law is about the management of public goods in a manner that…
           o Promotes and reinforces society‟s values.
           o Enhances human agency / freedom.
           o Achieves efficiency.
       Much of the policy debate is to balance these three goals. Many people in Canada
       think that equality is a value of society. We know however that the quest for equality
       translates into a diminution of agency. See the challenges to HRCs.
   - Allocation of benefit and burden.
           o Legitimacy (formal, tradition--charisma--legal-rational à la Weber, the
               foundation of political authority is outside law in a narrow sense, the question
               is what is the formal source of authority / substantive, such as expertise, age,
               experience, fulfils a need, experimentation, flexibility).
           o Procedurally fair.
           o Substantially just.
   - Is the benefit from structuring activity higher than costs of restricting freedom?
       In a liberal democracy, the presumption is that action is permitted, subject to some
       constraints. But the deep paradox of freedom is that if we were totally free, we could
       not do anything (say we decide that any word means anything…).

The “We” in “We the people” represented men who owned land, i.e. 4-5% of the population.
Does that mean that the American State and its institutions illegitimate? There are many
presuppositions about human beings, behaviour, etc., “otherwise you‟d just have a big army”.

B. Introduction to the Policy Process

How should States go through the business of implementing public policy? See Peters‟ and
Icilis‟ articles. There is normally a presenting issue (ex. factories closing down), few public
policies appear ex nihilo. In the case of residential schools, the issue was litigation and
potential huge liability. Once this appears, one must look at the policy problem (ex. lack of
competitiveness) of which this issue is an instantiation. One must then look at background
considerations (ex. higher labour costs, payroll taxes, little R&D). Then comes the range of
options (ex. FTA, manufacture sales tax was replaced with the GST [net effect estimated to
be 200,000 jobs], UI became EI to subsidize seasonal employment, retraining and parental
leave) and weighing advantages and disadvantages of each. Finally, there is a balancing of
redress for the past (in the US, 80% of farm subsidies go to 5 companies!) and re-
imagining the future.

C. History & Ideology

Much of what we are doing assumes that we are in Canada, in 2006. Peters outlines the
importance of ideology for guiding public policy. From the 1950‟s onwards, political theorists
puzzled to the existence of red Tories in Canada, with no parallel in the US. Another ex. is the
                                                                                                 6

significant presence of labour / socialist movements in Canada since at least the 1920‟s with
few significant parallels in the US.

Using a simplified political diagram to represent Canada…

 neo-con.                                  Hierarchy                                    facist
                 whig                                                      tory

Individuals                                                                            Organic

                liberal                                                 socialist
libertarian                             Egalitarianism                               communist

Historically, each cell has been represented and still is. Whereas in the US, the right side of
the diagram is almost completely absent. One of the classic explanations is the “fragment
theory” of Louis Hartz. He hypothesized that the moment a new State is founded and there is
a break from the colonial power will give a clue on the dominant ideology. The US revolution
was against toryism. Tories were exported to Canada in what is now Ontario, aided and
abetted by the ultramontane structure in Quebec. In the 19th C., the US debate was whig
(Hamilton) / liberal (Jefferson), in Canada it was tory (MacDonald) / liberal (MacKenzie).
Political ideologies often spawn their opposite, toryism spawned socialism in Canada. Red
tories are generally tories but who see government as a positive actor in the economy
(conservatives created most Crown corporations).

Childcare for:
   - Tories => State franchising, institutions such as private schools.
   - Socialists => Public institution such as public schools.
   - Liberals => Private daycares, with a tax credit.
   - Whig => Private daycares, „means tested‟, with vouchers for low incomes.

How has the presence of tories and socialists in Canada influenced public policy? This takes
us into history. Policy analysts say that Canada has lived through two national policy
cycles and is embarking on a third:
    - Post-1870 depression MacDonaldian NP with infrastructure building, immigration and
        high tariffs [a revisionist theory said Canada was built as a hinterland for the Montreal
        commercial elite], all Canadian liberals were opposed. This was the exoskeleton of
        Canada. Aligned with this was creation of Crown corporations, with a load of political
        clientelism (CP rail, Bell Canada were created by friends of the Conservatives…).
    - Post-1929 realisation that charities could only do so much, the Rowell Sirois report of
        the late 1930‟s was the blueprint for the welfare State, creation of Crown corporations,
        etc. The instruments changed: regulatory State, agencies, bureaucracies, tax & spend.
        Attempts to use the first NP (Petro-Canada) turned out to be a dead end. This was the
        „lifeblood‟ of Canada.
    - Post-1978-82 (second oil shock), a new cycle seems to have started. The instruments
        are clear, but the goals and values much less so. Instruments: Charter, FTA, NAFTA,
        GST, de-regulation, privatisation, Meech Lake, balanced budget… What conception
        of society do these instruments reflect? Politically liberal, State as business
        corporation, (sub- and exo-)urbanisation.
                                                                                               7

Just because one is a whig or a liberal, even if government has a role in some field, ideology
will shape policy instruments: childcare or early childhood education?

May 10th, 2006

Class 3: The Rule of Law: Dicey, McRuer, Willis, Arthurs, the Charter

A. Recap of previous class

How can the GST, NAFTA or the Charter be governing instruments? Taxation (mostly its
design) can be a response to a problem, just like creation of an agency to control employment.
The assumption of the Charter is to offload significant political decisions onto the courts,
which will create standards that will become applicable across the regime.

This touches upon the practice of law, even if this is usually associated with civil servants or
policy analysts: creating systems of rules in M&E, tax planning, etc. Law can be practiced
proactively through instrument design.

B. Classical Approaches to the Rule of Law

Reading texts from the early 20th C., such as Dicey‟s, requires contexts. Asking the standard
questions:

   -   Who and when? Alfred Dicey was a constitutional law professor / scholar at Oxford
       and part of the landed gentry. Under assault at that time is his „cosmology‟, the
       welfare State is being created. In 1881, non-land owners got the right to vote. The
       primary resistance was the House of Lords, which lost its veto capacity in 1911. The
       next „bet‟ was the courts. The articulation of the constitutional doctrine was embedded
       in the politics of the time. Dicey claims history as a basis “since the Norman
       Conquest” without justification.

   -   Where? The UK. These theories did not emerge in the US (“We the People”, not “Me
       the King”) or France (natural law, the French revolution grounded sovereignty in the
       „bottom‟), although these countries had their own rule of law theories.

   -   What? First, ordinary law (statutes, common law) applied by ordinary courts.
       Extraordinary law are discretionary powers, regulations / delegated legislation.
       Extraordinary courts are tribunals (vs. KB, Chancery, Admiralty, Probate,
       Ecclesiastical… which were merged in the 19th C. but were a „foundational principle‟).
       Second, no one is above the law (unlike French droit administratif [supremacy of
       public law] which, purportedly does not exist in the UK, no distinction between public
       and private law, no specific law that applies to public officials, Dicey later recanted on
       this distinction). Third, citizens are protected by the discovery remedies (mandamus,
       quo warranto, certiorari… see the Magna Carta which says “if X happen you can do
       Y”) as opposed to abstract propositions in constitutional documents (France and the
       US at the time, now Canada). All three of these were wrong in their particulars but
       right in their general principles.

   -   Why? Urbanization, wage labour, rise of unions, workers compensation, consumption
       goods, rental of housing, automobiles. For every one of these perceived changes there
                                                                                               8

       was a remedy: zoning, rent control, consumer protection, workers‟ compensation,
       permission of unions, regulation of highway traffic, etc. Three private law principles
       were attacked:
           o Freedom of contract.
           o Fault-based liability.
           o Private property.
       Legislative jurisdiction was being „chewed up‟. This gives a completely different face
       to the idea of rule of law than the way this idea is understood today (connected to a
       conservative political agenda? seen as inherent to democratic legal order).

In Dicey‟s cosmology, the problem was too much government, delegated legislation,
discretion to unelected official, power to non-judicial decision-makers, social engineering.

C. Willis vs. Dicey

There were three moments in the 20th C. when Dicey‟s concerns came to the fore: original
exposition, 1930‟s when the British Parliament was trying to deal with the depression (Lord
Hewart and Laski!), 1960‟s (McRuer, judge, Willis, professor at U of T and Dalhousie). In
1962, a police investigation in Ontario on some criminal activity determined there was
organized crime in Ontario, the AG of the time, Fred Cass (Leslie Frost government), decided
to propose amendments to the police act: suspected members of the mafia could be held
incommunicado once arrested for 48 hours. There was a huge debate so Leslie Frost ask
McRuer CJO to run a commission of inquiry. There was a five volume report after 5-6 years
(1968-70), which strongly echoed Dicey. This was the centre of much activity to „rein in
government‟.

What are the principle concerns Willis has What would have McRuer answered?
with McRuer?
Rights-based approach is biased.            Legal questions, for which judges and
                                            lawyers are most qualified.
Lawyers‟ and judges‟ perspective (not civil Rights-based approach upholds individual
servants‟).                                 rights.
Out of touch with the present.              In touch with principles / values if not facts
                                            (not good just because it is).
Ideological approach.                       The question is not empirical.
Unitary, one-size fits all approach.        One law for all citizens.

In five volumes, there not a single case study! There are a lot of theoretical concerns about the
bad things civil servants could do, but no real examples. The McRuer Report is a case of
idealized version of courts, worst practical view of government. Practice always looks bad
when compared with theory…

It‟s hard to compare the well-paid, high educated status of a judge with the lowest paid,
scantily educated clerk at some border crossing. One would expect judges to perform better.
How can the administrative State be improved? Training and education is fundamental.
Increasing pay and job satisfaction attracts more qualified candidates. Procedural safeguards
can become unmanageable (mass adjudication… 24,000 trucks crossing the Ambassador
Bridge every day, 500,000 lanlord-tenant decisions in Ontario yearly). Twenty to one, the
biggest complaint against public administration is “pig headed civil servants who won‟t bend
the rules” – not enough discretion instead of too much!
                                                                                                                       9



Why does Parliament enact privative clauses? Concerns about expertise, costs, avoidance,
biases of judges, etc. are sometime legitimate. A lot of bodies are created to push a certain
policy agenda. “Law is just politics by another name, two forms of politics being balanced:
rule of law and agenda of the day”. We live in a political democracy, not a judocracy.

D. Judicial review

The Constitution is a basis for challenges (mostly separation of powers and Charter). If the
statute passes, the next thing down is challenging the decision on the basis of due process
(bias, natural justice, reasons), jurisdiction (if power to do X, say that the body did Y; this
turns out to be trickier than it seems), abuse of discretion (irrelevant considerations, improper
purpose, Duplessis told Archambault to yank the permit, sub-delegation, didn‟t look at case‟s
merits but applied policy). This is almost a right of appeal.

The ordinary control of administrative action works very much like s. 7 of the Charter. But
there is no s. 33 in administrative law unless it is directly invoked by Parliament. Today, the
Diceyan rule of law has transmogrified into control of exercise of discretion and
jurisdiction. In the final instance, there is no immunity to judicial review.

May 11th, 2006

Class 4: Public and Private Spheres: the Choice of Governing Instrument
A. Recap of Previous Class

Three main ideas were covered. First, many considerations get reduced to single dichotomies,
but apparently simple distinctions (pro- or anti-judicial review) actually cover a lot of ground.
Second, the way the “rule of law” idea was employed was driven by history and social
circumstances. Today, international entrepreneurs are the major proponents of the “rule of
law”… Third, the idea that the world divides into law, constrained authority, rational
justification vs. politics, unconstrained authority, consequentialist reasoning is
unfounded.

CL grants no right of appeal from tribunals. However, superior courts define the border of
their jurisdiction under statute and the Constitution. This is the basis of judicial review.
Privative clauses attempt to limit courts‟ ability to judge borderline issues. Remember that
there is no such thing as an ironclad privative clause. Decisions like Crevier have held that
judicial review is constitutionally guaranteed. Obviously, there is a problem of conflict of
interest for superior courts.

B. Public / Private Vectors

What is public, what is private? What is public law, what is private law?

     Private law                   Public law                Public social activity            Private social activity
Tort, Contract, Property,   Criminal,      Constitutional,   army, police, transportation,     family, private property,
Wills & Estates, Family,    Maritime,              Public    natural             resources,    religion,        personal
Equity & Trusts, Secured    International,                   communications,        streets,   associations,   business,
Transactions,     Private   Environmental, Aboriginal,       weather, public health,           home, sexuality, “other
International       Law,    Space,          International    elections for political office,   social norms”
                                                                                                 10

Remedies, Restitution, Sale,   Development,         Tax,    social norms, international
Real Estate Transactions       Administrative, Securities   organizations,         social
                               Regulation, Labour           welfare, basic education


At different times and in different societies categories migrate and fields of law migrate.
There are also many borderline cases: public torts, zoning, expropriation, chartered
corporations… There are many migratory phenomenons. Public => private : governments
should act as corporations to become more efficient, tradeable emission permits, four times as
many security guards as there are peace officers, „streets‟ in shopping malls, „private‟ parks
(McGill!), gated communities, private industrial parks, voucher education and healthcare,
private tolled highways, private sewer and water companies… Private => public: corporations
should act as governments to become more accountable, contracting out of government
services, non-smoking by-laws in restaurants, domestic abuse, child abuse and welfare,
workplace discrimination legislation, former torts handled by public law regimes (labour,
automobiles…), politicized religious fundamentalism…

                                              Hayek‟s cosmology
                        Private                                                       Public
Non-State                                                   State
Individual                                                  Collective
Freedom, Autonomy, Rights                                   Interests
Market                                                      Politics
Courts (adjudication)                                       Courts (“any reasonable factors”)
Corrective or commutative justice                           Distributive or allocative justice

In corrective justice, the status and relative economic entitlement of the parties is
irrelevant, only the nature of the transaction is important. Our first inclination is to think
that private law is adjudication done by courts, public law administrative law done by
government. What about the Régie du logement or Small Claims Court which are
administrative bodies doing adjudication? Or courts making a decision based on “just
circumstances” (ex. alimony) or allocating public resources (CRTC could do auctions for
frequencies)?

Frequently, public goods have to be allocated. One needs a good to distribute, a class of
beneficiaries and some criterion for allocation for distributive justice. This is completely
different from corrective justice. Yet punitive, moral or treble damages in torts have a strong
redistributive component. Restorative justice is also an interesting case between corrective
and allocative justice (unjust in Aristotle‟s framework, as there were only „2 kinds‟ of justice).

C. Privatisation / Regulation

When we start looking at case studies, we will see that private / public activity or law are not
the only distinctions. But many debates in agencies have to do with mix and match
between allocative and distributive justice. As a government, how does one know which
one to pick? The only answer is that a team should be built to be greater than the sum of its
parts. Every action also has collateral effects, which must be considered. Public policy is more
than interest groups fighting in parliaments to carve up the body politic. Sometimes
privatizing works for the public good. These phenomena have to be studied in details, beyond
ideology.

May 15th, 2006
                                                                                                11



    PART II: THE STATUTORY DELEGATION OF PUBLIC
                     AUTHORITIES
Class 5: Approaches to Statutory Interpretation
A. Recap of Previous Class

First, what we normally think of as private and public law does not necessarily track
what we imagine to be private and public space. It flows from that a number of things
associates with private law (contracts, torts, property…) are in fact regulatory positions.
Certain types of conduct shall not be subject to supervening government regulation. For ex.,
only certain types of harm lead to extra-contractual liability: regulatory position that only
certain types of wrongs deserve compensation. Same thing for contracts: not every agreement
is enforceable. In private law, there is in fact much regulation: recognizing something as
property or not, imposing good faith in contract, public order, etc. The Legislature has the
same choices to make when it decides to have a Chief Apiarist or to enable the sale of genetic
material. “Even the absence of law is law whenever Parliament is enabled to act. The
quantity of regulation is a constant, the only thing that changes is who, what, when, how?” -
Macdonald.

In 1968, Parliament took away the offence of buggery for consenting acts between adults in
private, by amending the Criminal Code. This was a regulatory choice, the State „moved out‟.
There is a different between this type of choice and recognizing same-sex marriage. This is a
public act, it is not a private one: deregulation in the private sphere, regulation in the public
sphere. Sorting is difficult… There is a huge range of possibilities for a State that wants to do
something.

B. The Inspection, Licensing & Registration Function

The Apiary Inspection Act (NB) is both short and simple. It also is in the category most
common for statutes: inspection, licensing and registration.

Every province had such an act at one time, today all provinces do except Alberta and Ontario
(repealed in the late 1990‟s). In these two provinces, there are officials in the Ministry of
Agriculture in charge of the file. They receive their powers from the Ministry of Agriculture
Act. The lack of a specific statute does not mean there is no governmental presence.

There is no preamble to the statute, it doesn‟t say what its purpose is. Possible purposes:
   - Standardization of industry practice.
   - Controlling apiary diseases.
   - Health and quality control.
There is no attempt to protect public health or control market entry / quantities in this statute.

It doesn‟t appear any voter lobbied for this. Honey producers, hive and queen traders,
basically the bee-keeping industry were behind this act. They are a powerful lobby: every
US state has a similar structure.

Reasons behind this…
                                                                                              12



            Reason                           Truth                        Advertisement
Public trust                                                                   X
Protecting one‟s bees                          X                               X
Protect the bee market                         X
Shift cost on government                       X
Limited expertise                                                               X

What other regulatory strategies are open to address bee “health” concerns? The authority
could be delegated to a trade association (self-regulation, such as law societies). Markets can
discipline, for the future through publicity and for the past through contract or tort (causation
problem – could use market share liability, tantamount to insurance or loss-spreading here).
There could be an insurance scheme. Or outsourcing to a private company as opposed to self-
regulation (in some sense, mandatory insurance does that). Another option is nationalizing the
industry (ex. northern cod). The last option is criminal law (certainty of detection is a
deterrent, unlike the potential sanction).

C. Statutory Delegations

A statute is an instrument by which public authority can be delegated to a person. This
„person‟ may be a private person, a specific official, an employee of a Department, a self-
regulating association, a company… It was only starting in the 17th C. that the Crown‟s
power to delegate came to be regulated by statute rather than a part of the royal prerogative.
Many things that ministers do are not directly given by statutes. For ex., few statutes say that
the Minister of Finance has the power to prepare the budget. In this course, we will look
almost exclusively at statutory authority (including delegated legislation).

What does a statute do? One should not be deceived by the title, Red Tape Reduction Act…

How (generic register)? The AIA is an inspection, licensing & registration statute, not
criminal law or setting up some agency. The AIA provides for a regime of inspection, a
registration scheme, establishes a hierarchy of authority, creates prohibitions, gives a power to
quarantine and destroy property, labels actors, outlines powers and duties, creates fines and
penalties, operates a publicity regime (sign). The most significant ones are underlined.

Who?
                  Hammer                                               Nail
Minister (s. 1,2)                                  Bee-keepers (s. 1, 3)
Provincial Apiarist (s. 2)                         Other people (s. 5, 10)
Lieutenant-Governor in Council (s. 14)             Queen bee-keepers (s. 11)
Crown in right of NB (s. 13.1)                     Sprayers of blooming trees (s. 12)
Judge (s. 7)                                       Renters for pollination (s. 14(c))
Court of competent jurisdiction (s. 8.3)           Importer (regulation)
Implied: police, bailiff, prosecutor

Who runs the operation? The office of the Provincial Apiarist. He is responsible to the
Minister, who appoints the Provincial Apiarist and the inspectors. He may fire inspectors
upon recommendation of the Provincial Apiarist (at pleasure appointment, can‟t be sued for
dismissing).
                                                                                              13

Who has the powers? We‟ll divide powers in two. First, management powers (Minister,
Lieutenant Governor in Council and PA). Even a simple statute like this contains management
powers. Often, most of a statute is a list of management powers… Second, powers vis-à-vis
bees. The inspector has power of quarantine, seizure, destruction (s. 8) and also to inspect
(s. 6). The PA can quarantine imports (s. 4). The inspector recommends moving bees to
portable frames, but the PA decides (s. 9). The PA compels an annual report (s. 3(2)).

What are the processes? Inspection is the main one. But there is also a process of publicity,
process of signage (s. 3.1), certification to import bees (regulation), registration of bee-
keepers, filing of a return. There are many self-reporting processes.

What are the prohibitions? Can‟t spray arsenic on fruit blossom, can‟t ship candy if the
honey hasn‟t been boiled for less than 30 minutes, can‟t ship an infected queen, can‟t sell or
transfer infected bees, can‟t possess infected equipment. These are regulatory offences, not
crimes (see 91(27) CA 1867). Several offences are absolute liability (confused case law on
provincial offences). The punishments are stated in a list, which refers to the Provincial
Offences Procedure Act. For ex., breaching s. 4 (category F offence) involves a fine of $240-
$5120 or a maximum of $7620 for repeat offenders (s. 56-57). S. 58 says that offences
committed for personal gain or to avoid regulation, the judge may impose the fine s/he deems
fit. This is a standard feature of regulatory offences. It is the provincial court, criminal
division that deals with these offences (“assembly-line justice”). There are very few
prosecutions under these statutes, only scofflaws usually (other compliance attempts made
first).

May 16th, 2006

Class 6: Constraints on the Interpretation of Legal Texts
A. Recap of Previous Class

As we look at the AIA, our assumption is that the delegate is a government official or another
person given the role. But a number of provincial statutes appoint judges as administrative
officials (persona designata). A common situation is line fences acts: land registrars appoint
provincial judges as “fence viewers” in fence maintenance disputes. In those cases, judges
don‟t have the usual immunities (ex. can‟t sue a judge for performing a judicial function, can
sue him for negligently acting as a statutory designate). There is a phenomenon of
“borrowing” of judges as they are seen as impartial. As an aside, this cannot be done
constitutionally in the US (although done with Jackson, prosecutor at Nuremberg, and
Warren, who headed the Kennedy assassination inquiry).

Each province has something like a Pregnant Mares Urine Farms Act (urine used to culture
penicillin). In the AIA, the target is the health of the bees, not public health (can boil the
honey). For penicillin, the rationale is more public health. In neither case was monopoly a
motive.

True / false questions on AIA: 1-F (unless first inspection was negligent); 2-F (need approval
of PA); 3-F (s. 7); 4-T (s. 12); 5-F (s. 3); 6-F (s. 5(2)); 7-F (only LG in C can make
regulations); 8-F (s. 2); 9-T (broad definition of bee-keeper); 10-F (his name, s. 3.1); 11-F (s.
11(1)); 12-F (only suspension or removal).
                                                                                              14

B. Official and Unofficial Interpretations

A number of themes recur in Hartog‟s article. Who were the addressees of the municipal
ordinance forbidding pigs in NYC? Certainly the “pig lawyers”, “bourgeois lawyers”, city
lawyers / prosecutors, homeless shelter lawyers. The judges were also adressees (mostly
former bourgeois or city lawyers). Why isn‟t the statue addressed towards pig holders? There
was an assumption that pig owners didn‟t pay attention or couldn‟t read. Ironically, most
legislation is not drafted for the people who are „regulated‟.

What do pig lawyers tell there client? Basically that it‟s OK, as there are few prosecutions and
even reimbursements for seized pigs. The lawyers extrapolate from past and related
experience. Was it a free for all, civil disobedience for pig owners? Hartog speculates that
there were customary norms. Presumably, aggressive pigs were not appropriate.

There appears to be a conflict between the written law of NYC and the customary law of
pig owners. Ironically, court verdicts favoured customary law. Influence of jurors may have
played a part, but according to Macdonald it was more a common law vs. statute conflict.
There may also have been a sense that pigs were useful in certain neighbourhoods without
street cleaning.

Twenty years later, judges changed the interpretation and came to the conclusion that the
municipal ordinance had to be followed. The interpretation was driven by the facts on the
ground, the context – larger city, improvements in transportation (ship swine by railway).
None of this is in the ordinance itself, but rather in judicial reasoning. A statute is always
anchored in some set of pre-existing practices.

C. Methods of interpretation

That said, lawyers still have to read and interpret statutes. It often comes down to the letter /
spirit and liberal / restrictive debates. “No person shall sleep on a bench in a Metro station
in Montreal.” Macdonald falls asleep while waiting for a train. Or he brings a sleeping bag,
puts eyeshades on but has not fallen asleep yet. Literally, the first case is an infringement and
not the second. In terms of purpose, the second is but the first one isn‟t. Probably neither
person would be convicted: in the first case the bowtie is pleasing, in the second case offences
are interpreted restrictively. Suppose that the hypothesis was not a prohibition but a benefit.
Interpretation would be broad.

These rules, canons of interpretation, were devised by courts. Famous ones are: expressio
unius est exclusio alterius (one mentioned excludes others), ejusdem generis (generic
category). There are hundreds such maxims created by courts, but should they control the
interpretation of statutory delegates and public officials?

D. Controlling interpretation

Legislatures very often try hard to get courts to interpret words in a certain way.
Sometimes, legislatures tries to control interpretation within a statute: preamble articulating
the spirit of a statute (s. 13, Interpretation Act), titles (Act Respecting Apportionment in the
Legislature of Ontario or Fewer Politicians Act; Prevention of Unionization Act!), substantive
definitions, headings.
                                                                                               15

Beyond internal controls, there are external controls: rules on how to read a statute
(Interpretation Acts). S. 10 of the federal Interpretation Act say that the law “always
speaks” and tells courts that spirit, intent and meaning in the present (read statute as applying
to the present) are paramount. There also are judicial canons, which courts deem legislatures
to know. One of the main constraints on interpretation is that the legislature usually says
who is to interpret the statute (ex. superior court used as federal court for bankruptcy), the
only limit being s. 96. The federal Parliament can create courts, it and provincial legislatures
can create tribunals.

Finally, the legislature is choosing who will interpret the statute. A court will mean lawyers,
who have a certain understanding of their role, a certain knowledge, a certain drive, etc. The
story is different for a labour board. Is it no surprise that the Faculty of Law has the most, and
the most detailed, academic regulations. The Faculty of Social Work regulations are a
different story… Different patterns of understanding associate with different disciplines.
Legislatures perform a sort of forum shopping.

What went wrong in Singapore? An extremely literal, contra spirit, interpretation of a statute
was used. Also there are safeguards as to what can be done at a polling station, so the purpose
was supposedly respected (although officers were appointed by the party in power!). Why
didn‟t the legislature foresee this? How much context does the legislative function require?
Do we expect courts to know the context of everything? This is an impossible task. There is
always a limited amount of context judges are presumed to know. But judges often need to be
educated about a specific issue.

There is a belief that if the legislature gets it right, the context “will look after itself”.
Parliaments appoint statutory delegates when they want something else: specialized
knowledge, fact-sensitive interpretation. Nonetheless, in a constitutional democracy, courts
have ultimate interpretative authority. Privative clauses are more about giving experts a
first kick at the can.

May 17th, 2006

Class 7: The Ontario Human Rights Commission as a Creature of Statute
A. Recap of Previous Class

A post on WebCT had to do with the relationship between written text and interpretative
communities. The “Pigs and Positivism” article was a way to show that there are normative
systems that compete with formal texts. This doesn‟t only exist in the realm of public law, but
also in private law, ex. contracts (for ex. in manufacturing clusters). When we think about the
delegation of statutory authority, there are at least 5 epistemic communities involved:
    - Legislature and its members when the statute was enacted.
    - Courts as they exist whenever any case comes before them.
    - Statutory delegates (ex. Provincial Apiarist).
    - Community of regulates (ex. bee-keepers).
    - General public.
Each of these communities have experiences which bear on how the statute is read. There is
no magical formula. Three collateral effects of this are: 1- legislatures deploy techniques to
direct interpreters to what was intended by the words in a text and legislatures take into
account the way courts tend to interpret statutes; 2- each community reads the text in a
                                                                                                16

particular way, but there can be „dissenters‟ within any of them; 3- when the addressee of a
text confronts it, this is not an exercise of literal reading, each action involves interpretation.
We can‟t assume any community will interpret a text in the way the legislature did (assuming
it knew the meaning of what it was passing). Legal interpretation is iterative. “The system will
not necessarily work the way it was designed.”

Does there have to be a hammer for there to be normativity? Is a “do not” needed to influence
behaviour? Fairy tales are meant to get children to reflect, children are not just raised with a
rule-book and with a ruler. Size of the group is also an important factor, the bigger the group
gets, the more formal rules are needed. This doesn‟t mean that there are no common values in
even large groups.

“The final interpreter of legislation in Canada is the Canadian public.” - Rod Macdonald

B. Origin and Rationale for the HRC

The HRCode apparently has explicit purposes and aspirations attached to it: value-
affirming agency. What lead legislatures to create HRCs? There was a lack of enforcement,
previously there was just a tort system, the process was put in motion by the affected person.
Courts also favoured those with most resources, not those who suffered discrimination. There
was no common law on the subject, as there was insufficient judicial support for this: no tort
of discrimination. Solutions that courts can provide are limited, and there must be „winners
and losers‟. Courts also can‟t investigate, start education programs or look at systemic
problems. Judges also came from wealthy white backgrounds, which did not predispose them
to sensitivity (although MacKay J. was in that club).

Before the HRC was created, there was piecemeal legislation with the same kinds of
principles. Interestingly, the grounds of discrimination varied from statute to statute and the
responsible minister varied. Discrimination was not a transversal theme, it was about housing,
labour, services, etc. The big change of the HRC was the consolidation in one statute with
discrimination as a central theme.

Many „special interest groups‟ were trying to advance an agenda of non-discrimination in
1950‟s Ontario. Leslie Frost, who was „the government of Ontario‟ had an important role to
play in creation of the HRC. He realized that there was some political interest, but he mostly
was lobbied hard.

Hunter was in favour of the HRC until the early 1970‟s. By 2001, he completely changed his
mind and became a pre-eminent opponent. He was the first general council of the HRC. He
also drafted the Canadian Human Rights Act.

The HRC doesn‟t look like the AIA. It is not called an act, but rather a code. It has the same
normative status under the Constitution, but the legislature nonetheless called it a code.
“Code” gives a sense of comprehensiveness, rather than a patch on the common law. It
also has a preamble, which reads like a mission statement, a statement of aspiration. Over
time, the original 7 sections were supplemented. Freedom from harassment was added to
freedom from discrimination.

Part I is written in an affirmative way (“every person has the right to…” rather than “no
person shall”). It doesn‟t start with definitions, but rather with the substance; same story
                                                                                               17

for the Charter. The idea is to attain some semiotic advantage. Ironically, the definitions
don‟t sound like such universal principles. For ex., age is between 18 and 65, although a new
definition just says age, „notwithstanding‟ done in specific statute. This is not accidental, the
way exceptions are managed was originally that all exceptions were in the HRC, which is
now revisited.

C. Structure and Process

The HRC also creates the Human Rights Commission. The fact that it was done in the
same statute is a signal that enforcement would happen. It also elevates the status of the
Commission. It also raises the stakes for anyone wanting to abolish it. Also, it was a strong
signal that the HRC was no mainly to be interpreted by courts but rather by the Commission.
Hunter quit the Commission in 1977, claiming that it had become proprietary and self-
aggrandizing. In a report, it suggested a draft act that gave its structure more importance.

In 1996, the administrative body (board of inquiry) was transformed into a HR Tribunal.
Boards were a “gravy train for law professors” who were not independent and had an
incentive to find infringement, whereas tribunals have independent members.

S. 34 says that there are reasons the Commission may not entertain a claim: for ex., if another
statute applies (labour relations), bad faith or vexatious, no jurisdiction, 6 month prescription.
There is a broad discretion to proceed. About 8,000 complaints are filed yearly. It has the staff
to handle about 200, but feels it has jurisdiction and grounds to proceed on about 2,000. How
does it decide which 200 are to be entertained? Basically the most egregious ones, which are
selected on the basis of profile, whether there are clear „winners‟, minor ones to push existing
rules.

The Commission decides how to rank the cases on the basis of internal policies. This causes
the problem of adaptive behaviour. There are also a lot of judicial review applications, which
end up being very costly.

May 18th, 2006

Class 8: Intragovernmental Conversations (Prof. Baker)
It is hard to even list all administrative delegates in Canada. Our case studies were chosen as
somewhat representative cases of different instruments. The Ontario HRC functioned as a
model for all the Commissions that followed. Much was written about it, especially by Ian
Hunter.

Much rides on the interpretation of text. In Bell, everything turned around the meaning of
“self-contained unit”. This highlighted the power struggle between legislature, agency and
courts. The text framed arguments that could not really be made directly.

The HRC is a „government in miniature‟. S. 29 is key: “It is the function of the
Commission…”: forward rights, promote rights, affirmative action, research, revision of
statutes, regulations and programs, deal with conflict situations, investigations, etc. The
mandate is to shift consciousness; it is also hugely discretionary. This is very much in the
realm of distributive justice – the emphasis is systemic and not adversarial. Resources are
not unlimited, however.
                                                                                               18



Nowhere in the 48 s. of the HR Code is there a roadmap of the HR Commission. It is
established by s. 27 rather than s. 1. The HRC is responsible to the Minister of Labour. It has
a chair and a vice-chair, as well as employees who are civil servants. It also has a certain
number of divisions, ex. „race relations‟. S. 32 suggests that there has to be intake officers for
complaints. S. 33 suggests the need for investigators, which are given broad powers.
Mediators / negotiators (s. 34), boards of inquiry (s. 35), regulations made by the LG in C (s.
38) are also needed. Various functions of conventional government have been included
under one roof: quasi-judicial, intake, policing, rule-making, quasi-legislation,
reporting, mediation…

Hunter observed that the HRC had been around for 10 years before Bell happened. This case
was the first successful application of judicial review. Nonetheless, the HRC dealt with
thousands of cases in that decade. On the basis of the enabling statute, the HRC is responsible
to the government for its every move.

There‟s obviously a theme of institutional self-interest in Bell and even in Bhadauria: turf
warfare. The pious hope of provincial legislatures was that HRCs would enjoy enough
gradual success that they would eventually wither away. However, the HRC has over time
committed most of its budget to treatment of individual complaints rather than to the broader,
systemic mandate. Each time some complaints dropped off, the HRC heavily lobbied for
extension of its jurisdiction. In 1982, harassment, sexual orientation, constructive
discrimination and affirmative action were added. The HRC is now lobbying to have
jurisdiction over hate literature. Some arrogance develops in agencies just like in courts.
Hunter calls the HRC staff “human rights zealots”.

Bell rented the top two floors of his house. There are no locked doors between the space he
occupies and the rented space, Bell said he preferred mature tenants. McKay was a black
Jamaican who was told, falsely, that it was occupied. He made a complaint to the HRC. The
HRC told Bell he had contravened. Bell‟s lawyer made an application for a writ of prohibition
claiming that the HRC exceeded its jurisdiction, which at that time was limited to “self-
contained dwelling units”. These words became the central of the “who should decide
struggle”. Ultimately, Bell‟s freedom of contract and right to control his home was preferred.

The Globe & Mail article said in reaction to the trial judgement that Bell‟s human rights were
“magnificently defended”, even though the HRC‟s jurisdiction was limited! Following the
SCC judgement, it was said that Bell was “rescued” and that the intentions of the scheme
“pave the road to hell”. It was also said that the HRC‟s wide powers were “offensive to
democratic principles” and civil rights. “Consciousness was not moving very fast.” - Baker.
Ironically, by the time McKay lost, he had been back in Jamaica for a few years.

In good Diceyan form, the Constitution is based on two principles: parliamentary democracy
and sovereignty, and rule of law. These two ideas often turn out to be difficult to harmonize
and somewhat counter-balancing. In Dicey‟s view, the source of individual rights was
private law, public law was merely reified private law. He also advocated heavy-handed
presumptions in favour of individual contract and property rights. The plain-meaning
rule was a sort of non-entrenched Bill of Rights. In that respect, courts get the last word. This
view allowed courts to arrogate the power to review acts of legislative delegates – this power
was pretty much invented as an answer to the threats to the established order. This was the
push-me-push-you phenomenon in Bell.
                                                                                                19



The CL provides for no right of appeal beyond superior courts. But appellate courts have the
entitlement of reviewing actions of legislative delegates on basis of jurisdiction (and also
natural justice).

Every time a statute is created to displace CL rules, courts are displaced. Progressively, courts
have found themselves increasingly relegated to the interstices of administrative bodies. For
obvious reasons, courts are not pleased. The current CJ of Ontario said in a speech that they
are “autocratic, arbitrary and irresponsible bodies” and added that “security of life and
property” were paramount (“The national safety is in danger”!!!). There is a sense that
McKay and Bell were tokens, coincidental for an important underlying debate.
Escalation in privative clause drafting was ineffective, even when the BC Labour Relations
Board legislation said that “this agency has exclusive jurisdiction to determine its own
jurisdiction”.

Admin pro gives the worms-eye, inside-out view of administrative action. Judicial review
gives the birds-eye, outside-in view of courts‟ sanctions of administrative action when
something „goes wrong‟. Late 19th C. courts decided that they could review the behaviour of
any inferior governmental operator. They dressed up this newly found power in seven
prerogative writs (public law equivalent of debt, detinue, trespass, etc.): certiorari,
prohibition, quo warranto, mandamus, habeas corpus, declaration / injunction (Nabisco
prerogative writs). Each of these writs have a special function: certiorari to quash (in the US,
certiorari is exercised with respect to an inferior tribunal), prohibition to stop an action pre-
emptively, quo warranto under what authority (19th C company law developed through this,
special act incorporations at the time), mandamus mandate action, habeas corpus compel
release, declaration and injunction as in private law. Federally, ss. 18 and 28 of the Federal
Court Act talks about “applications in the nature of judicial review”; Quebec and Ontario also
have reformed the writ system. Courts still often use the old language, though.

Three questions as a reviewing court: Constitutional jurisdiction to delegate the power to the
agency? If yes, is the particular power asserted by the agency within the scope of delegation
specified in its enabling statute? If yes, were the rules of natural justice followed (notice, audi
alteram partem, counsel, written decision, etc. basically “act like a court”, procedural issues
blur with substantive ones)? Roncarelli v. Duplessis says “administrative decision makers
have to behave reasonably”. Nicholson says that “the process has to be fair (notice, hearing,
explanation). CUPE v. NB says that “reviewing courts should defer to agencies unless their
action is patently unreasonable”. Baker says that reasonability, fairness and deference applies
to all administrative action. This was the 10-minute version of Judicial Review.

There are many other accountability mechanisms than courts! Cabinet, Auditor General,
etc. Knee-jerk judicial review reactions should be controlled. Yet, over the last 50 years, the
supervisory ability of courts has been greatly extended. The effect of many „modernizations‟
have increased courts‟ jurisdiction.

In Bell, the „warfare‟ escalated so quickly that the HRC‟s own stare decisis on the question
was not even considered. Ironically, Tarnopolsky and Krever, who had decided as boards of
inquiry that cases such as Bell‟s were within the HRC‟s jurisdiction, where appointed
respectively to the OCA and the Ontario Supreme Court. Interestingly, the expression “self-
contained dwelling unit” was later removed by the Ontario Legislature. In Bell, the SCC was
                                                                                              20

concerned that there was sort of a built-in institutional bias inside the HRC in favour of
plaintiffs.

Managing human rights is not like sending out an apiary inspector. The change has to
be progressive and managed. Legislative zeal can end up being counter-productive. This
is a large part of Hunter‟s critique. In BC, the Social Credit government abolished the HRC in
the early 1980‟s and replaced it by a one section statute creating a statutory tort of
discrimination. Ontario still has an HRC. Quebec also does but delictual action is also
possible. Different macro-instrumental choices generate different results.

Post-Charter, Badhauria may have turned out different. At the time Laskin, was extremely
nervous about the outcome if courts got control. Maybe Laskin is too much of a fan of
administrative processes. They too are imperfect: Badhauria did complain to the HRC 6-8
times, which did not yield anything.

May 23rd, 2006

         PART III: ALLOCATIVE, REDISTRIBUTIVE AND
            OVERSIGHT PROCESSES: DISCRETION
Class 9: L‟État-Providence and Discretion
A. Recap of Previous Class

Macdonald emphasizes the background note on intragovernmental „conversations‟. Back to
the idea of accountability and review… As a matter of institutional design, how can it be
ensured that a decider makes a decision to the best of his abilities and furthering the goal of
the statute / regulation? One will first think of incentives and second of corrective or punitive
measures. The people have to be well chosen, trained, have positive incentive and a
manageable workload, knowledge has to be shared through time. Sometimes, mistakes are
made, which call for review:
    - In house review. Reconsideration first by the same decision-maker, then up the
        hierarchical chain. Most large organisations have built in accountability / appeal
        structures.
    - Out house review. This doesn‟t necessarily mean courts, it may be specialized
        administrative tribunals, Cabinet, ombudsperson, but also direct statutory appeals to
        courts, judicial review.
    - De novo review. This involves going outside the framework: media, UN HRC, MP,
        lobby, get Parliament to change the law. These recourses may seem very unusual, but
        they are actually quite standard in Western countries. This is a challenge to the rule
        structure, not to the application of the rules.
A case like Bell is an important but rather small fraction of the whole structure of
administrative accountability.

B. Program expenditures

Our introduction to this field will be the welfare regime. Most democratically elected
governments get elected by spending money on sufficiently large constituencies. Realpolitik
involves taxing „enemies‟, either directly or through law (see below). Taxation and subsidy
                                                                                             21

are tools of regulation. Taxing wealth, consumption and income, which are either proportional
or flat, continuous or one-off, aiming at different actors does not have the same effects.

In addition to across-the-board taxation, there is so-called „tax expenditure‟. These are
targeted tax exemptions to favour narrow constituencies. Ex.: GST rebates for low-income
earners, deductions for RRSP contributions, income tax breaks for settling researchers in
Quebec, tariffs. Frequently, they happen through contractual agreements between
governments and particular people, usually businesses (one ex. is waivers of Bill 101 in
Quebec for some executives!). Tax breaks for businesses are common industrial strategy.

The other side is direct expenditure, subsidy. There are both direct and indirect forms of
subsidy. Direct subsidy is giving money directly, providing cheap loans, loan insurance.
Indirect forms of subsidies are probably the most pervasive: State program to look after
something paid for by employers elsewhere (ex. medicare), limit application of EPA or
Labour Code, government procurement, exclude tort liability, affirmative action targets to
obtain money (ex. universities that want money from SSHRC), create property rights
(pharmaceutical patents), quotas and tariffs in some cases, etc. The idea is to externalise some
costs of doing business outside of businesses (workers, government, environment). Almost
every government decision can be categorized as taxation or subsidy.

The range of instruments can be plotted against the targets of government: food, shelter,
health, education, child rearing, disability, employment, retirement, income support, welfare.
This is most of the people-oriented social policy.

C. Social Welfare State – L’État-Providence

Imagine the Minister of Finance having an extra $100 million in coffers to spend. Possibilities
are health, education, income support, welfare. Results in the class are health – 12 (40% 2003
class), education – 21 (50%), income support – 4 (10%), welfare – 6 (0%). Welfare does not
belong in the list in a way, because it is narrowly focussed, whereas health, education and
income support are at least designed to be universal. The facts may be different than what the
design intended: universal looking legislation can produce unequal effects (efficacy /
effectivity chasm), for ex. maybe education is not as universal. Macdonald‟s thesis is that
these programs are trickle-up / tornado up economics which disproportionately do not
advantage the poor.

What is it about „universalistic‟ programs that makes them more attractive in a Faculty of
law, beyond mere self interest? One possibility is that these programs seem to have an
ulterior objective: investment in better health, literacy, etc. However, the image of welfare
is that it is not producing any social goal. Interestingly, all social legislation such as the
Canada Health Act have preambles, not a single welfare statute does. What would have to be
said about welfare for it to enter the cosmology of the other programs?

                                     Images of welfare
Job re-entry, employability                   Support (not tied)
Shame, guilt                                  Charity (for a good person, there is a sinner)
Kaldor-Hicks efficiency (buy out the losers)  Entitlement
Conditional (deserving poor)                  Unconditional (wage)
First resort                                  Last resort
Temporary, transitional (ex gratia)           Permanent (interest free with clawback)
                                                                                               22


Deferred investment

For market-types, the justification of welfare is buying out efficiency gains. For socialists, the
theory is much more redistributive (rawlsian justice, pay out losses and advantage least well-
off most) – this is the idea of progressive income tax. If the dominant image of welfare was
redistributive or K-H efficiency, many other understandings of welfare would not be part of
public discourse. Other reasons are appearance of productivity, valuation of success and
independence, etc.

D. Discretionary Justice

Judy‟s story… She‟s a lawyer but can‟t hold a job. Her family is pressuring her to become
more independent, as she lives with her mother. She moves out and applies for welfare.
Which arguments could be used under s. 12 of the Alberta act? She‟s tried to work. She‟s a
grown adult. It‟s more efficient. There is a general rule. Attempt to provide social welfare on
the cheap. It‟s tantamount to indirect taxation. When Macdonald pled this case in Quebec, he
tried all of these arguments unsuccessfully and got hostile answers. We also look at the case
of the alcoholic employee not being disciplined. Ironically, discretion is exercised in this last
case even if it is non-existent legally.

Rawls or Kaldor-Hicks are not in the legislation: we find charity, temporary, condititional,
last resort… There is a detailed regulatory regime overlain with broad discretion and
little guidance as to how to use it. Every decision involves discretion, none is automatic. The
challenge is to organize the exercise of discretion. It always exists, but the outcome varies.

May 24th, 2006

Class 10: Criminal Injuries Compensation as a Redistributive Process
A. Recap of Previous Class

A good way to drive home yesterday‟s lessons are to contrast student aid and welfare. How
would we organise a welfare scheme if we were to adopt the student aid scheme and vice-
versa?

Tax expenditures and subsidies in student aid: subsidized tuition – infrastructure –
institutions, tax credit on interest on student loan, tuition deduction, room and board
deduction, grants, interest-free loans, scholarships, subsidized transit, RESPs, RRSPs.

Compare this to welfare: one program and minister‟s discretion. Perhaps one could re-design
the welfare system in smaller compartments. Even collateral programs, such as subsidized
housing, fall under minister‟s discretion.

B. Allocation and Discretion

Discretion also pervades criminal injuries compensation systems. Many of the formal
controls on discretion are present in CIC schemes (ex. political accountability), but the
informal controls (ex. policy manuals) are simply not there, as the minister often has full
discretion. To what extent building an infrastructure, such as a commission, agency or
board, is more likely to create an informal normativity?
                                                                                            23



For present purposes, we will assume that the offender has been convicted. We can think of
this from the perspective of the victim and from the perspective of the offender. A
considerable shift has occurred in the last 25-30 years. Three decades ago, the victim was a
mere token in a criminal trial and sentencing process, with no services or support. Beginning
with criminal injuries compensation, the place of the victim got larger in the criminal nexus.

The five objectives of punishment in criminal law are deterrence, rehabilitation, retribution,
prevention and denunciation (a recent add-on). The tools to do this are capital punishment,
torture, corporal punishment, forced labour, stocks, solitary confinement, jail, banishment,
house arrest, fines, community service, restitution, psychological therapy. The list is long.
These types of activities don‟t line up equally with all the principles of punishment, they
mostly aim at retribution (which dominates in polls).

How many of these speak to compensation? Few, restitution (provided for in the Criminal
Code) and maybe community service. Other options are tort, compensation fund (with or
without moral hazard component), self-insurance. Subsidized prosecution and police work are
a form of service to victims, although not compensation.

The problem with tort is that when the defendant is impecunious, that is the rationing
mechanism. In insurance, it‟s affordability, deductible and cap (contractual limits). For State
compensation programs, it‟s caps, moral hazards, (hopefully targeted) rationing of payouts
(file in January!).

C. Victim Services and Moral Hazard

There is now a relatively broad range of “victim services”. The trial process has also been
somewhat modified (ex. victim impact statements). There is a move from compensation as
corrective justice to distributive justice. The practice, unfortunately, is that State
mechanisms are drastically underfunded.

The Dalton case is there to show how courts and boards may have a different perspective on
moral hazard.

D. Problem: Saskatchewan Victims of Crime Act

Committee #1: s. 14(1) (identity of decision-maker)
Good to keep it from civil and criminal trials. So the question is maintaining the minister in
his position or creating some board. One is more flexible, the other is theoretically less
discretionary. Need to know which resources are available, what the caseload is, do a
comparison of other jurisdictions.

Committee #2: s. 16 (scope of discretion)
Create an actuarial formula superimposed over a consistent shopping list. Workers‟
compensation regimes have actuarial tables (problem of inflation). Torts work in a very
different fashion. Eligibility requirements may be reformed (moral hazard?).

Committee #3: s. 7 / 3-5 regulations (financing)
Us! See sheet. Macdonald mentions the proposed taxes on beer, guns, violent movies,
expropriation of profits from depiction of crime.
                                                                                          24



Committee #4: s. 8(1) ($25,000 cap)
Does the cap meet the need of most victims? If so, discretion to occasionally go beyond it
would be appropriate. If not, re-evaluation would be necessary. The purpose of compensation
would have to be considered. Differentiating on the basis of crime may be done. The tort
system may give some sense of what is needed (but the awards are unbearable for the public
scheme, can‟t have a one-size fits all).

Committee #5: s. 8(2)-(3) (classes of eligible monetary losses)
Adding pain and suffering, „reasonable‟ (rather than „exceptional‟) counselling, don‟t add
economic losses ($140B of Enron!). Past decisions would be needed to determine
interpretation of sections.

Committee #6: s. 13(1)-15 (filing conditions)
Unreported crime is a problem. The initial frame of mind was a random mugging – it works
for this but doesn‟t for domestic violence. But compensation can also be seen as an incentive
for reporting.

Committee #7 (offences for which compensation is payable)
Currently, only criminal (no regulatory) offences are covered. Another issue is whether
economic crimes should be included. An issue is also that the surcharge crimes don‟t map
exactly the compensable crimes (participating in a riot, setting a trap, bestiality). Could a
surcharge on crime against animals be paid in to the SPCA? As of the late 1990‟s, prevention
and other related programs have been included in such schemes.

Committee #8 (use of the victim‟s fund)
Guidelines or some structure to frame the minister‟s discretion would be useful. A
consultative committee could also serve this function (more and more common in statutes).

May 25th, 2006

Class 11: The Public Protector: Formal and Informal Accountability
A. Recap of Previous Class

One significant implicit line of inquiry is “if you don‟t know what you‟re talking about, you
can‟t understand the statutory regime”. The assumption of law floating disconnected from
fields of human endeavour is wrong. If we are to have judicial review of administrative
agencies, knowledge is paramount. Specialized courts are useful for this.

There has been a significant re-think of the criminal justice process, moving away from
offenders and towards victims. At the same time, there has been a great re-think of and move
away from tort law (most comprehensive ex. in New Zealand, no longer any law of tort for
personal injury from 1971 to 1998, now some tort law is back).

The original compensation schemes were set up in England under the royal prerogative:
completely discretionary ex gratia payments by the Lord Chancellor‟s office. In Canada, it is
done either through boards and agencies or through a minister, provided for in a statute.

Major policy questions seen yesterday:
                                                                                                25

   -   Setting up a scheme on an ad hoc basis or as a permanent structure (agency or giving
       authority to a minister)?
   -   Is compensation a price list or is it governed by general principles with discretion to
       the decision-maker?
   -   Is the scheme open-ended (like torts) or capped?
   -   What types of damage are covered – personal injury or property damage / economic
       loss?

B. Why an Ombudsman?

This administrative process is directed to public administration itself as a regulatory field.
Why doesn‟t the Public Protector Act have a preamble? Not a single similar statute in
Canada has a preamble, suggesting that it is seen as in-house mechanics.

Both the appointment and the reporting make the Ombudsman a parliamentary commissioner.
A 2/3 majority is required, every initial appointment in Quebec has been unanimous. Harper
should have made his „patronage commissioner‟ a parliamentary appointee. The PP can make
individual reports about specific persons or structures. There is also an annual report. All of
this goes to the National Assembly directly. In Ontario, the HRC has been much criticized by
the Ombudsman!

C. Character of the Institution

The Ombudsman has no executive power, can‟t order any action. He can only investigate,
negotiate, conciliate. This involves vast discretion. There is a general public misperception of
ombudsmen in Canada: many people think s/he can right all wrongs. It‟s also difficult for
non-lawyers to see the trichotomy of the PP: illegal action – judicial remedy and ombudsman,
maladministration – no judicial review but ombudsman, I‟m unhappy – no recourse. Drawing
the lines between those is difficult. Ombudsmen have a large education mandate.

S. 26.1 of the Public Protector Act lists the grounds for intervention. Of the five, three
(illegal, abuse of discretion, error of fact or law) give rise to judicial review, two do not
(unreasonable or unjust, negligence). The language is cast very broadly because the targets of
the Ombudsman are broad.

Millions of events occur annually over which the Ombudsman has jurisdiction. Obviously, the
Ombudsman is not supposed to have close connection to all these decisions. Hence the
exclusions: other available legal remedy, limitation period lapsed, persons bound to act
judicially (courts, tribunals – separation of powers), cabinet officers or deputy ministers in
political functions, within one year of event.

The design of the process is totally discretionary (s. 19(1)). It‟s a „soft‟ process (ss. 23-25) to
be done first in private and through cooperation if possible. The Ombudsman is also protected
by many immunities (no damages, disclosure, testimony, judicial review, ss. 30-35).

D. Outcomes, Process, Qualities

The Ombudsman‟s sanction is only publicity: requests, reports and public statements. He has
no power to order any redress. There are actually heavy constraints on the Ombudsman‟s
rhetorical power: can‟t make public statements every second day.
                                                                                             26



Who should be picked to be Ombudsman? Should it be a lawyer, i.e. proficient in
litigation, being able to recognize illegal action, knowledge of public law, commitment to
deontological practice, giving legal advice, advocacy skills, self-assurance / boat-rocking,
practical, representation of individual clients? By comparison, „good‟ public servants à la
Willis should be discrete, team players, focused on the system, have a different set of ethics,
concerned with action rather than with jurisdiction, conciliators, negotiators. Admittedly,
these are ideal types.

Where would one look first for an ombudsman? The PPA gives guidance as to what this
person‟s mandate is. It depends on the circumstances: public servant for new Nunavut
administration, lawyer for the long-standing government of Nova Scotia. Historically, first
ombudsmen were lawyers, the second were public servants, the third were lawyers, etc. The
shelf life of an ombudsman is about one term, as two opposite imperatives are balanced. Do
you want a person to solve a problem or fix a system? Sounds like a large law firm
„economically hedged‟ with M&A and insolvency. Maybe the reason there is no preamble in
the PPA is that the purpose is uncertain.

Shopping list of quality: impartial, independent, credible, solution-oriented, good at
diagnostic, moderate ego.

E. List of Alternatives

Within the public service, there are many Ombudsman-like processes: Auditor General,
Privacy Commissioner, Official Languages Commissioner, Military Ombudsman, etc. All of
these are public structures; also ad hoc structures, such as public inquiries (case and systemic
oriented). Whistle blowing legislation, suggestion boxes, tort law, BBBs, The Fifth Estate,
company ombudsmen, ISO and other private operations also have a role to play. The role of
the Ombudsman will depend on what other structures exist… only one piece of the puzzle.

F. Maladministration

What is maladministration? Lack of transparency, redundancy, lack of mandate, rudeness,
unresponsiveness, lack of qualification, dishonest, delay, nepotism, buck-passing („not my
job‟), lack of coordination, partisanship, red tape, inflexibility, personality problems, etc.
These phenomena are everywhere. How many structures are immune? None. There are many
such problems below the radar screen and much work remains in this area.

May 29th, 2006

         PART IV: ALLOCATIVE, REDISTRIBUTIVE AND
            OVERSIGHT PROCESSES: DISCRETION
Class 12: Statutory Instruments and Regulation: Ex ante Oversight
A. Recap of Previous Class

A few issues left in the air about the PP… First, it was left unsaid why it was only in the
1960‟s that this idea came up in CL jurisdictions. From the early 19th C. in Scandinavia and
                                                                                              27

the early 1860‟s in France, equivalent „ombudsman‟ structures existed. Rowey points out that
it was assumed in a regime were the executive was responsible to Parliament that many
oversight functions would be carried on by MPs. Two things undermined the MPs‟ capacity to
do this: party discipline, decline in ministerial responsibility (ministers no longer resign if
anything goes wrong). Second, who exactly is the PP for? Even in its short existence, the
institution has changed significantly. Initially, it was seen as a surrogate MP, today it is seen
as also having responsibilities towards the civil service and the government. Hence the
tension: fix the system or solve the problem?

B. Nature of Normativity

What is the range of institutions and processes by which, in any legal system, normativity is
generated or expounded? Seen in Foundations. Macdonald suggests that four basic types of
normativity exist in his Background note: textual instruments designed by institutions (ex.
statutes), inferred instruments designed by institutions (ex. CL precedents), unwritten precise
non-institutional rules (ex. customs, trade standards, rules of thumb), unwritten broad non-
institutional rules (ex. good faith, rule of law, fundamental justice).

Imagine just having been hired by McGill as a professor. One must mark exams. How does
one know how to mark, grading scales, patterns for allocating marks? What would enter in the
answer of this question?
   - Policy of Faculty
   - Talk to others
   - Your history
   - Dogma of the bell curve
   - Feedback in course / general impression
   - Personal values
   - Make a grid

How can these things be justified in law?
    - Royal Charter
    - Statutes of University
    - Ministère de l‟enseignement supérieur regulations
    - University regulations
    - Senate regulations
    - Faculty regulations
    - Handbook of policies for academic staff
    - Instructors‟ manual
    - Decanal memo
    - Co-examiners
    - Examinations committee
    - Faculty marks meeting
All of these are of many different types and may be conflicting in some instances. The first
three are legislation in Canadian law, the next 2 or 3 are regulations (question: how deep in
the delegation chain does formal law penetrate?).

Yet, new professors probably read no „higher‟ than Faculty regulations. They‟ll consult
Faculty policies, talk to other, read decanal memos, listen to co-examiners (the last two are ex
post).
                                                                                            28

How do we figure out the way to get all of these components to be accounted for? That is this
week‟s question. Yet, typically, administrative law textbooks go no further than regulations,
even though other elements provide the „juice‟ to the regulatory field.

C. Kinds of Legislation

Constitution, codes, statutes, regulations… Many things don‟t meet the „test‟ for
legislation: directives, policy statements, interpretation bulletins, OICs, in-house manuals,
rules, conversations at 4 PM. Out of all of the above possibilities…

D. Why Delegated Legislation?

We run straight into the diceyan conundrum. If you want a complex body in a complex
field like the CRTC to do something, there are two extreme possibilities with many
possibilities in between: discretion and rules∞.

The mantra of cutting back on discretion is: cut back (eliminate it), confine (substantive
standards and criteria for exercise), structure (procedure, conditions for exercise), check (in
house or judicial review). Confining and structuring discretion can be done with all the things
we mentioned above. But people like McRuer had legislative instruments in mind for this
purpose. Given limited legislative time, the power to create the regulations is delegated to
some other body. Yet, the diceyan critique is that too much legislation is being made by
someone else than Parliament. You can‟t have it both ways, except in the case of
deregulation.

What is the justification for delegated legislation, i.e. for someone else than Parliament to
specify details? Expertise; Time; Division of labour; Political expediency; Flexibility;
Clarity. These rationales signal that not everyone is an appropriate delegate and also that not
all powers need to be delegated. Regulation-making is not a one-size-fits-all panacea.

Who?
  - Governor-in-Council (i.e. cabinet), probably above 90% of delegated powers (little
     time or expertise directly, but secrecy, solidarity, elected „accountable‟ members).
  - Minister, maybe 5%.
  - Agency (expertise, flexibility, division of labour rationales), usually with a GIC veto.
  - Director of an agency.
  - Municipalities, normally no GIC veto.
  - School boards, id.
  - Courts (rules of practice), id.
  - Private companies (CP, CN, CSL, AC…).
  - Fire Marshall.

The next questions that have to be asked are: how and what?

D. Statutory Instruments & Regulations

There are two important definitions:
   - In the Ontario Regulations Act: regulation is a rule of a legislative nature made by a
       closed list of delegates.
                                                                                              29

   -   No province in Canada has a Statutory Instruments Act like the federal government,
       regulations being a subset of those. There, a regulation is a statutory instrument made
       under a power conferred by Parliament. In both cases, the key issue is that it is of a
       legislative nature.

But how many cows make a herd? When is an instrument narrow enough so that it is no
longer a legislative instrument (notwithstanding general language). Courts have said that
form is not determinative to identify legislative instruments. Narrowly targeted delegated
legislation goes against a CL presumption.

Other powers, including the Royal prerogative, are not legislative, yet such orders,
proclamations, etc. fall in the broad category of statutory instruments. But the definition
presupposes a verbal form (pictures on cigarette packs or music scores for O Canada don‟t
work) for statutory instruments (done in legislation).

May 30th, 2006

Class 13: Ex post Review of Micro-legislation
A. Recap of Previous Class

We have been exploring how governance power can be subjected to the discipline of a
normative framework aiming at due process, substantive justice and legitimate authority. S. 6
of the Ontario Regulations Act gives the Minister the power to determine whether something
is a regulation for the purposes of the RA, bypassing the statutory definition and with a
privative aspect. S. 5 gives the Minister power to extend publication time, s. 4 says that an
unpublished regulation is of no effect unless the Minister overrides it. The SIA has a similar
structure. S. 20(a) says that the Minister can exempt statutory instruments or regulations from
application of the SIA. This power has been much used in the past few years for counter-
terrorism legislation and regulations. The lesson is that there is no statutory regime
conceivable that will cover all cases without exceptions. It‟s usually conceded that the
SIA is a better way of dealing with exceptions as exceptions have to be published as a
regulation (only a potentially secret declaration in the RA), it also does not provide for
blanket exemptions.

S. 4 of the SIA provides for determination of the status of an instrument that is questionably a
regulation by the Deputy Minister of Justice. This is an important ex ante control, which in
practice allows the Department of Justice to give advice. S. 8 gives the GIC power to revoke
an instrument after it was made. This rarely happens, usually the GIC will just pass another
regulation – but it‟s useful when it‟s another body „regulating‟.

B. Ex Ante Controls

There are different kinds of mechanisms constraining regulation-making authorities, some of
which are legal, political, judicial, public and parliamentary.

Legal                   Filing (s. 3-4 SIA)      Registration (s. 5)     Publication (s. 9)
This pattern is followed consistently in the CL world.
                                                                                             30

Political control comes under many forms. Sometimes, the Minister can impose or strike
regulation. Sometimes, s/he will present a position at hearings. One interesting way this is
done is through policy speeches by ministers, when agencies „won‟t budge‟.

One would normally not think that courts are an ex ante control in law-making. One type of
exception is that there is a very narrow ground for getting a writ of prohibition against
issuance of regulation (if a legal pre-condition exists, ex. public hearing). This happens in
regulated industries and was argued successfully once.

The ex ante control by the public usually occurs because of statutory requirement of a formal
„rule-making‟ hearing. There are also informal mechanisms, which are a double edged sword:
lobbying and special-interest co-opting (back door approach to consultation) or open to
everyone and balanced; viz. the process of negotiated regulation.

Parliamentary control is referred to in s. 19 of the SIA. There is a joint Senate-House of
Commons standing committee which automatically reviews all regulations. It produces a
fairly comprehensive annual report.

C. Ex Post Controls

One legal ex. is that the SIA gives the GIC power to revoke regulations ex post. There is also
a type of political control as well, as the GIC may disapprove regulations for political reasons
as permitted by specific statutes.

The principle ex post controls talked about in Faculties of Law come through judicial review.
Its principles percolate throughout the other mechanisms (“bargaining in the shadow of the
law”), but it is unimportant in terms of volume. The principle doctrines are:
     - Any regulations passed by virtue of an ultra vires statute or which is contrary to the
         Charter are void.
     - Conditions precedents (ex. public hearings, ministerial approvals) and conditions
         subsequent (ex. filing, registration, publication – sometimes an authority thinks an
         instrument is not a regulation or is exempted) must be followed.
     - Regulations must themselves be intra vires of the enabling statutes.
     - Implied limitations (CL doctrines such as good faith, non-discrimination, non-
         retroactivity, no sub-delegation, and others outlined by Driedger).
It is surprising how few cases contesting regulations actually go to court (no more than a few
hundred a year). The most contested are those generated by self-regulating professions and
agricultural marketing boards.

D. Exercise on Regulation-Making Powers

The Broadcasting Act includes a declaration of broadcasting policy for Canada. There is a
further declaration that the broadcasting system is a single system regulated by a single public
authority. Part III of the BA creates the CBC. Paradoxically, the CRTC is created in the CRTC
Act, although the BA is mostly about the CRTC‟s powers. The reason for this is historical:
until the 1950‟s, the CBC was the regulator (until the 1920‟s, it was the Railway Cabinet
Committee!). The Radiocommunication Act is also important. The Board of Broadcast
Governors was created in the 1950‟s (precursor to the CRTC).
                                                                                            31

Part II of the BA enounces the mandate of the CRTC. It has several objectives, including
furthering the broadcasting policy but also telecommunications regulation. The CRTC is
given the power to issue regulations, guidelines, orders, etc. (s. 6, 10, 21…). Macdonald
recommends reading the BA to s. 51 to identify the seven different regulatory players and all
their tools.

1. a) Is it a regulation or is there a form of sub-delegation through a „directive‟?
c) Delegatus non potest delegare.
d) It would not be a regulation, so the implied limitations don‟t apply and sub-delegation is
allowed.
e) It would be of a legislative nature, so it is probably a(n invalid) regulation.

3. Such a directive could be passed.
d) The CRTC has complied, but the President of the CRTC won‟t be around for much
longer…

May 31st, 2006

Class 14: The CRTC as a Policy Hybrid
A. Recap of Previous Class

The general question is that in the making of delegated legislation, there is a delegation of
power. Why are there ex ante and ex post controls? Four or five ideas float to justify this:
wish for process transparency; direct accountability; accessibility of the process
(regulations are readily available); procedural fairness (including participation,
justification). All of these things are part of one conundrum of modern governance: there
comes a point were the scale of action is beyond the capacity of people to interact directly.
Delegates, intermediaries are necessary. It‟s much easier to run PEI than Canada… The SIA is
designed to create a sense of engagement. Commercial media does not follow delegated
legislation much – regulation makers have to be proactive.

The objectives are to do what is substantively right and reducing to the minimum chances of
misunderstanding through the use of conventions of the „readership‟, mostly lawyers and
judges (that may reduce intelligibility to the public though).

B. Theories of Regulation

What position should we take as to the organisation of a specific activity? We are studying the
field of broadcasting and telecommunication specifically, although this is a much broader
question.

The underlying question is “why should we regulate the economy”? This question arose
prominently in the 1970‟s with the Chicago School challenge to regulation. Posner‟s
assumption was that markets were most efficient, regulatory strategies only being needed in
cases were markets fail. Politics / government is seen as one way to achieve an agenda,
markets as another.
                                                                                              32

The Marxist poll gives much weight to politics, little to markets. The night watchman poll
gives little weight to politics, much to markets. Most debate in liberal democracies accepts
some of both and asks the question of “how much of each”?

The Chicago School model is that markets should be used unless they „fail‟. Another position
says that there is no such thing as a „natural occurring market‟ and that infrastructure is
needed, i.e. public goods which the State provides. Some more politics-leaning thinkers say
that this leads to conclude that „free‟ markets are actually a political construct and the choice
is predominantly political. There is relatively broad agreement on what is needed to
sustain markets and governments and that markets are, ceteris paribus, preferable to
command and control. There is also a fairly broad agreement on things that should not be in
a market (babies) and things that should (choice of spouse). What is it that suggests to us that
a market is desirable for spouses but not for babies?

Trebilcock et al. point out standard market failure examples:
    - Natural monopolies (best ex.: public utilities, such as electricity or gas distribution).
    - Prohibitive costs of entry.
    - Destructive competition (ex. agriculture, farmers keep farming even if they are losing
        money, but family farms only get about 10% of subsidies; labour, „downward spiral
        theory‟).
    - Information costs (ex. healthcare, legal or accounting professionals, value of
        securities… even this information is intermediated).
    - Uncertainty and risk (ex. don‟t know if electrical equipment is safe).
    - Externalities (transfer of cost of production unto someone else, ex. pollution).
It‟s not clear that command and control mechanisms are the most effective to deal with
market failure, perhaps other instruments are preferable.

The theory of economic regulation is about allocation. Social regulation aims at
distribution, not just allocative efficiency, ex. graduated income tax. The claim by Posner,
Trebilcock and others is that the claim for efficient allocation policies is weak. But this says
nothing about social regulation.

Social regulation is usually justified by values (OHRC), culture (MAPL for music),
language (Bill 101), social „solidarity‟ (welfare) and æsthetics. One knows such structures
are inefficient on market grounds, but the justification is different, it is political.

June 1st, 2006

Class 15: The CRTC as Government in Miniature
A. Recap of Previous Class

Throughout the course, we have operated on the assumption of multiplicity of governance
tools. One type of tool is “command and control regulation”. Here, “regulation” means
three things: delegated legislation, phenomenon of government activity which seeks to
organise human behaviour, direct control of a sector of the economy (entry, prices,
production). Macdonald had the third meaning in mind when he talked about justifications for
economic regulation. The CRTC is an independent multifunctional agency in that it is not part
of a government department, but performs several governance functions at the same time.
                                                                                               33

If politics involves questions of distributive justice, markets seek allocative efficiency.
The assumption in standard discourse is that in certain situations in which allocative
efficiency is not achieved by markets, which explains the necessity of economic regulation.
Sometimes, the names „social regulation‟ and „economic regulation‟ are used. According to
some theories, political intervention is necessary more often on the basis of distributive
justice, but this movement is much less vocal and has arguments which are much more social
/ political. Interestingly, most political theorists who argue for a small State do it on economic
grounds (exception: ideological libertarians like Nozik).

B. Policy Process of the CRTC

S. 3(1) of the Broadcasting Act gives a broad policy mandate to the CRTC: Canadian
ownership, multilingual programming, etc. This section treats broadcasting as a target and
defines policy goals that are to be achieved. No such thing in the Income Tax Act! It was
decided that broadcasting was sufficiently discrete so that goals could be articulated.
Somehow, these would be neutral and independent of governments‟ political persuasions.
There were about ten fields of regulation with a similar system.

It was thought that the management of such a policy should be out of direct political control,
as for courts. But there are significant differences between the actions of a court and the
CRTC: public hearings, research, etc. The CRTC is asked to be much more active and
diversified. Roman highlights that most justifications behind the CRTC is that it is proactive.
The greater the management role, the greater the political control that comes with it. The
CRTC was created because it was thought that it would deal with a mostly objective,
technological file. But it was soon discovered that technology is driven by policy and vice
versa.

The regulatory process of the CRTC is like a Russian doll. S. 3(1) is a policy statement
coming from Parliament. S. 5(2) is a statement of regulatory policy, set by Parliament. S. 6 is
a permission to the CRTC to make non-binding guidelines. S. 7 provides for binding
directives from the CRTC, which are legislative and produced by the GIC. S. 9 gives a power
to license, a power of decision, to the CRTC. S. 10 allows some regulations (legislative) to be
made by the CRTC. S. 14 gives a policy mandate, about policy, where the Minister can give
orders. The Treasury Board is also involved elsewhere.

C. Independence & Accountability

What do we get with the CRTC? Suppose the entire board of the CRTC resigned and it had to
be rebuilt from scratch. Factors which would be looked for per students: knowledge, network
in the industry, same vision, etc. According to Macdonald, the list is much broader and
includes: geography, gender, language, age, personal credibility, security clearance. Board
composition in fact closely tracks the socio-demography of the country, more than the courts.
Are the appointments about who you are or what you know? Either you have a diverse
board and buy the expertise, or have an expert board and a diverse advisory council.

Back to what policies we want the CRTC to carry out… You want thoughtful and
sophisticated people who won‟t be bamboozled by the bureaucrats. But we tend to divorce
public policy from the public that the policy is supposed to be about. What does Coyne‟s
world look like? That‟s Macdonald‟s alternative view of what regulatory agencies are
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supposed to be like. Keep in mind though that the CRTC never fully succeeded in
becoming “representative”.

Abolishing the CRTC is an option. Many other reforms are possible, ex. eliminating the
telecom mandate (technical) but not the broadcasting mandate (language, culture). It started as
economic regulation, it now appears that it‟s increasingly used for social regulation. There is
a life cycle to agencies… maybe government departments would be better suited.

June 5th, 2006

         PART V: GOVERNMENTAL ENTERPRISES:
      PRIVATIZATION, PARTNERSHIPS, OUTSOURCING
Class 16: Crown Corporations: The Mission and Mandate of the CBC
A. Recap of Previous Class

What is meant by „semi-independent‟ agency? According to Macdonald, one has to go back
to the 1930‟s, when the first were created. It was essentially a US idea that expanded
elsewhere in the English-speaking world (in the UK, much still is attached to government
departments). The post-1929 economic depression generated massive unemployment. There
was a belief that much of what went wrong was lack of technical, scientific expertise in the
economy. Rational planning was seen as a positive substitute to market forces. Basically,
every problem could be „expertised‟ away.

What kind of governance structure was most appropriate to make use of experts? They could
be brought in the public service. But there was a feeling that expertise could be separated
from politics and discipline it to some extent. This belief that ideology could become
subservient to expertise was the dominant motif in much government work in North America
from the 1930‟s to the 1960‟s. This explains notably the huge infusion of funds in
universities. With the economic downturn and oil crises in the 1970‟s, there came a sense that
there was too much social engineering. For the last 30-35 years, the general North American
view has been that ideology should discipline expertise and not the other way around.

B. Historical Contingency

An instrument that governments have used is public corporations. There are most numerous
in civilian Europe, more in anglo-CL jurisdictions than in the US. There are underlying
cultural reasons for this. In Canada, this idea existed from the beginning of colonisation:
Compagnie des cent associés, HBC, etc. In the late 19th C., there were two strategies of
Canadian nation-building: creation of Crown corporations and use of concessions or
franchises (transportation, communication, immigration). Most current Crown corporations
were set up before the 1930‟s. Then few were set up until the 1960‟s, were there was a huge
growth spurt (most of those have disappeared, except in Quebec).

A surprising number of those were set up by conservative governments, the only exception
being federal liberals in the 1960‟s and 1970‟s. There seems to be an affinity between CCs
and conservatives, regulatory schemes and liberals. Most CCs were originally set up prior
to the regulatory agency which ultimately overtook them (ex. CBC regulated broadcasting
                                                                                            35

before the CRTC, the CTC was spun out of CN, HQ regulated power until it grew – then the
Régie de l‟énergie was spun out). CCs perform all kinds of functions in Canada, which evolve
over time. They are sector-specific operations. Some of them have „died‟ (sometimes, it‟s
more euthanasia than murder).

C. Owning and Operating

What does the State own? Unconceded or expropriated land, objects, ideas, enterprises (CCs).
The Crown does business in lots of ways: CCs, departments and agencies. So CCs are partly
distinguished by their structure.

Non-exhaustive list of areas in which provincial and federal CCs are active: transport (St.
Lawrence Seaways, railways, buses, airlines), farms, energy and resources (hydro, oil & gas,
mining, timber), telecommunications (phone companies, telegraph, television [all provinces]),
business development (EDC, BDC), for more, see WebCT. CCs do as many things as private
corporations – they are only a form.

D. Purposes and Justifications for Crown Corporations

What justifies State ownership? Much of the justification for CCs tracks the justification
for regulatory agencies in the economic sphere: various market failures. A CC can be
created with a monopoly or set it up as a competitor in a given field; both have frequently
been used in Canada. An ex. is railways where only government could raise enough capital to
cross the country; the Laurier government created a competitor to the CP (Intercontinental).
By the end of WWI, all these railways (and private ones) were losing money except CP. CN
was created as a consolidation of GT, Canadian Northern, Intercontinental and 17 small
companies.

Today, CCs are no longer justified on economic grounds (those that were have been
privatised: CN, AC, PWA). Some remain with a different rationale, namely social regulation,
such as the CBC. Note however that some economic justifications are still possible for the
existence of the CBC.

The CBC has many objectives which are set out in s. 46 of the Broadcasting Act. Brainstorm
of justifications: exemplary (content, labour policies), Canadian content, regional
representation, minority languages, nation identity building, international representation,
different political agenda, counterforce to US content, etc. How many of these justifications
are true? True: minority languages. False: regional representation, counterforce to US content,
national identity (anything below perfection is abysmal failure!). There are even conflicting
goals in the Broadcasting Act: national identity and multiculturalism. How many of these
justifications justify a national State-owned newspaper? Why does CBC-TV have
commercials and CBC radio doesn‟t?

June 6th, 2006
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Class 17: The Rise and Fall of Petro-Canada

A. Recap of Previous Class

The saga of Petro-Canada summarizes issues of nationalisation and privatisation. Three basic
of ideas of yesterday:
    - One can‟t understand the choice of governing instrument independently of history.
        CCs were created at different times, with congruently different mandates.
            o There is endemically in democratic government (except in the US) ownership
                envy; don‟t control something unless you own it. This is a way for
                governments to show that they‟re there. CCs are seen as a branding
                mechanism.
            o It is much easier to use the corporate form to achieve multiple objects than it is
                to achieve the regulatory form. This is mostly because regulation is much more
                reactive to technological development, whereas CCs just adapt, evolve and
                spill over.
            o Sometimes, CCs were set up as start-up experiments, where there was a lack of
                private investment (ex. Candu reactor).
            o Each period has dominant intellectual tendencies. Do we trust entrepreneurs to
                develop field X or not? Economics is not the controlling factor, only one
                among others.

   -   To talk about CCs as a whole is to miss the fact that they are shaped by their sector.
       CCs in energy & resources look different and have a different mandate than those in
       telecommunications, transportation, credit & finance, agri-food, public morality. This
       may have to do with separation of powers, but usually not.

   -   A corporation is a variable vehicle. CCs are like that as well and have as many
       different forms as private enterprises. Hence the question “what type of corporation
       do we want to use?”

B. Why Public Ownership?

Market failure is usually advanced as the main argument for CCs. There are other reasons
however, even according to economists. The burden to justify redistributive public
intervention lies on the person arguing for it (remember that efficiency is a distributive
choice).

One reason comes to the fore with CCs such as the CBC, AC and PC. These are strategic
sectors, which according to some should not be controlled by foreign owners. Similarly, many
countries wish to have flagship enterprises. This is the idea of defensive expansionism.

Why then PC? One can‟t think of this CC in isolation of the rest of government policy at
that time in the energy sector. PC was an instrument in a broader policy.

1. Context
This was the time of the dual oil shock of 1973-9. The major response of the federal
government was the NEP. This was also the period of foreign investment, wage and price
controls as a response to a turbulent economy. One element of the NEP was depressing the
price of oil, others were exploration, equalization, building of East-West pipeline
                                                                                             37

infrastructure, expansion of gas distribution, solar and nuclear power. This program was
originally about all sources of energy, with time it mostly became about oil and gas.

2. Sector
Energy sources are diverse: oil, gas, nuclear, coal, ethanol, methane, wind, solar, hydro-
electricity, tidal, geothermal, hydrogen, wood, peat, body heat… The demand side is also
important. Why did we focus on oil and gas? There was a combination of circumstances:
price hike, no CC already in that sector, significant foreign ownership.

3. History
Oil was first pumped in Canada in Petrolia, Ontario (near Sarnia), in the 1860‟s. It took off in
1947 in Leduc, Alberta. At that time, it cost three times more to pump oil in Leduc than in
Tulsa, Oklahoma and ten times more than ship it from the Middle East. There was differential
taxation to equalize prices and also massive public investment in pipelines. Also, in the
1950‟s the Borden (a civil servant) line was drawn, no Middle East oil could go west beyond
Ottawa. All the rest had to be Alberta oil. In 1973-9, the price of Middle East oil rose
enormously. The price difference between Alberta and the Middle East flipped. The federal
government decided to balance-out prices the other way. This was done even prior to the
NEP. The problem was that 25 years of subsidies to Alberta were „paid off‟ by the early
1980‟s.
The most important reserves of oil and gas now are not liquid or gaseous. Gas has to be
liquefied and pressurized to be transported. There are more gas reserves than oil in Canada
and there was a move towards substitution (CCs such as Gaz métropolitain). As per oil, it‟s
mostly tar sands that have oil in Canada – it‟s an enormous energy source, but difficult to
exploit. The tar sands project has been the most expensive in Canada in 35 years.

4. Mandate
The Petro-Canada Act of 1981 establishes a Canadian integrated hydrocarbon company. S. 6
of the PCA gave the objects of the CC: exploration, R&D, extraction, refining, sale, other
fuels and energy (drafters dreamt of a comprehensive energy company). PC was not just a
petroleum company, but a corporate vehicle for the broader NEP.

5. Rationales
What is the policy goal of a gas station or heating oil distributor called PC if the concern is
security of supply? This was mostly a flag-waving venture (Canadian flags in Quebec
especially). PC built up its network by buying existing gas stations and refineries (Gulf,
Fina…). If PC was not retail, did it need to refine? The idea was to increase technological
capacity in that respect in Canada. PC set up its head office in Calgary (first company to do
so) to build it up as Canada‟s Houston – several other companies followed suit. What does
one get from presence in the oil patch? PC was meant to provide information, to be Canada‟s
window in the heavily-insider driven oil patch. The rationale for exploration was to prevent
blackmail from US oil companies (didn‟t explore although they had rights). Note that money
in oil is mostly in exploration and extraction.

C. Why Privatise?

If those reasons are plausible, why was PC privatised? Ideology is a plausible reason, but
others endogenous to the field and PC dominate.
                                                                                             38

1. Field
In the last 25 years, the proportion of oil as an energy source has decreased in Canada. There
are also much fewer players. World competition for resources is increasing. There is political
instability in many producing countries. Canada has also discovered huge reserves. Does this
argue for PC?

2. Petro-Canada
It carried a huge debt because it overpaid for its assets. It also started acting like a big oil
company and against federal government positions, sought to resist regulatory policy. A
company like Esso has three major external revenue sources: equity, debt and subsidies,
bought by different people. For PC, government was the only source. Post-1993, PC ran out
of money for capital investment in the deficit fight.

3. Ideology, Politics and Economics
Is producing oil a core government function? Public opinion changed significantly and PC
came to be seen as an add-on. PC was also unpopular in Western Canada. Many of the
objectives of PC were accomplished by the 1990‟s: exploration, development of Calgary,
flag-waving, etc. Also, it‟s hard to argue that PC promotes Canadian social development and
identity.

If the federal government was to create a new CC in energy, what would it do? Maybe invest
in alternative energy. Actually, four federal CCs are doing this currently. Another option
would be going into privatised electricity – but the government is not really needed there.

June 7th, 2006

Class 18: Public-Private Partnerships; Voluntary Associations
A. Recap of Previous Class

Discussions on WebCT and in class have raised the question of the position of this course in
the „universe of ideas‟. At one level, many disciplines inquire into the relation between the
State and social organisation. At the other extreme of analysis is hyper-positivistic law:
“which section of which statute?”. This course stands in the middle. The assumption is that
given that the State wants to achieve certain outcomes in a certain field of endeavour,
which instruments, institutions and processes are available? From there, the question goes
two ways. Instrument choice is not independent of one‟s view of the role of the State, forces
inquiries into political and economic theory. In the other direction, are explicit rules or soft
norms better? This plays back in the understanding of instruments. Walls can‟t be built around
the inquiry.

However as much as we are inclined to believe detailed rules solve problems, we live our
lives on the basis of experience and interaction. Rules only enter when something goes
seriously wrong: a point of inquiry rather than a primary structuring device. This is
fortunate, there are way too many rules to be aware of.

It is in the nature of political debate that complex ideas get reduced to opposites: public-
privatised, regulation-deregulation, etc. In the last 30 years, ideas of deregulation,
privatisation, outsourcing, downsizing, franchising, PPPs have become more prominent in
administrative law. These ideas can be viewed as saying that there is “too much State”
                                                                                             39

(ideological) or that there is a “different way of thinking about governments and public
policy” (technical, ex. privatisation doesn‟t mean de-regulation, there are similar movements
among corporations, ex. debate about efficient size).

For ex., the State can own seaports and airports, but operation is not a government function
which can be „disaggregated‟. Moves such as these are not limited to former CCs: air traffic
control used to be a government operation, now franchised to NavCan; arbitration instead of
going to court… Further institutional distinctions can be made. Remember however that no
such procedure is cost-free (ex. privatisation of a CC may reduce flag-waving, official
languages compliance, regional distribution of offices…). Sometimes privatisation statutes
will carry forward some CC goals, usually in an attenuated way (ex. AC head office in
Montreal, official languages requirements, employment equity quotas [ex. federal contractors‟
programs]).

B. Public-Private Vectors

How is this animal different? There is much diversity: policy function, regulation function,
service delivery. The idea of State-non-State venture is not new beyond the name “PPP”.

Until the late 1990‟s, Canada‟s blood supply was run by the Red Cross, a voluntary
organisation. Churches previously ran many social services. The government participated
through tax breaks and government defined conditions in agreements. Frequently,
governments have relied on private operations to carry on regulatory tasks. The LSUC and
Barreau du Québec, CSA and ULC, stock exchanges are examples (about 75-80 of sectors
managed like this).

Why the big fuss about PPPs? It seems that as long as the partnership between the State
and some other body is with a charity or a technical regime, it is under the radar screen.
As soon as it is in visible fields with for-profit organisations, it‟s news. Ex. are
infrastructure (roads, bridges, etc.) and specialized services (childcare, provincial prisons,
senior homes / chronic care). The 407 project was started by the NDP in the early 1990‟s, it
wanted to make Oshawa more competitive. Borrowing, raising taxes, no assets to sell, federal
cutbacks, printing money – were all unavailable. When the conservatives came in, they agreed
to go ahead with it unlike the new democrats. It found partners: CDP, Lavallin, Spanish
railways. The 407 is actually entirely private, it‟s no longer even a PPP because the
government sold all its shares. However, the PPP jails Harris had set up have now reverted to
the public sector. Public and private vectors pull in different ways.

Not all PPPs are caused by State inability. Sometimes, they are established to move into a
new sector where the State doesn‟t have full control. Ex.: drug plans, labour training. The
PPP vehicle has no ideological vector attached to it. But PPPs tend to be unstable: they
don‟t last very long, they seem to move one way or another.

C. Why the State?

Why do we have a conception of the State as an aggregated set of policy responses to issues
around us? This takes us back to 1648 at least. The notion of territorial State is under radical
assault and so are its underlying assumptions. The Peace of Westphalia was meant to put an
end to wars which were ravaging Europe. It did so by changing the locus of sovereignty from
personality to territory. Until then, one‟s primary attachment and subject status had to do with
                                                                                               40

blood and belonging (law was attached to persons). Thereafter, Europe was carved up in
geographic spaces called States. There were massive population migrations we would now
call „ethnic cleansing‟. By the early 19th C., most States in Europe managed to achieve a
predominant linguistic, religious and ethnic homogeneity.

The whole idea of the Nation-State was a culmination of the Peace of Westphalia. Must of the
struggle of the last 150 years has been to undo damage associated with this, with
countervailing nationalisms. The State was not just a structuring organisation to frame
agency, but was meant to promote particular ways of being and understanding. This
dominated politics.

In the last 40 years, the aggregated conception of the State has been under attack, be it
by free-market, post-modern or transcendent human rights ideologies. This idea has been
fragilised in two directions: globalisation (IOs do many things formerly done by States),
localisation (scepticism in the general capacity of the State) – thence the idea of glocalisation.
Many debates we‟ve had are about the proper location of government.

States are competing for population, capital, even State services (Swiss Post in northern Italy,
talk of buying into any pension or health care plan in Europe, Newsworld vs. BBC World).
This is unthinkable in the Westphalian conception. States are neither sacred nor outside
markets. There are issues of scope and scale and issues of political State vs. voluntary
associations (communities of affect) as locus of government. Globalisation and post-
modernists connect here: dis-aggregation of the individual.

The coming challenge is the development of governance structures beyond the State. The
problem is human collective action, not the State. This field is much vaster than the business
corporation. Public political organisation is infinitely variable. Macdonald would like to ask
“pick you favourite NGO and figure out its governance structure in a way to achieve values of
legitimate authority, procedural fairness, substantive and distributive justice”.

June 8th, 2006

        PART VI: CONCLUSION AND GENERAL REVIEW
Class 19: Aspirations for Public Administration Revisited

A. Recap of Previous Class

It is sometimes thought that when attention is focussed on people, one is buying into an
atomistic view of society. This assumption of methodological individualism drives Chicago
school economics. This is not what Macdonald wanted to convey, but rather that we all have a
capacity to make choices. Much of our lives are constructed along collective relationships.
People are not unanchored free willing atoms, but often choose networks in which they
belong. The idea that one single personal feature defines a person entirely has been under
attack since the 1970‟s at least. There is no permanent hierarchy.

B. Synopsis of the Class

This course was meant to be an introduction to the study of goals, values, institutions,
processes, instruments of collective action through law – this is the business of
                                                                                                41

administrative law in a liberal democracy. Concerns about legitimacy and due process also
apply to supra- (UN) and trans- (Catholic Church), sub-State systems of interaction and
voluntary associations.

The problem is designing effective institutions for human collective action. The focus of
this class has been on law. But there are many regulatory instruments beyond law such as war,
terror, brainwashing, psychotropic drugs, love, religion, etc. which also control human
behaviour. Our focus has been on normative systems, broadly speaking.

Even within the narrower field of law, some things were bracketed. We focused on regulatory
instruments mostly short of absolute prohibition, rather than directly on criminal law or
markets. The reason is obvious: most other courses are about markets.

How does one move from a policy idea to a legal outcome? Three important messages:
    - This is not a simple instrumental mechanism (ex. efficacy-effectivity distance).
    - Diversity is paramount (innumerable institutions and forms by which regulation
       occurs, much beyond Parliament: departments, agencies, courts, CCs, PPPs, etc. which
       all contribute to governance; their processes are infinitely variable: adjudication,
       contract, mediation, voting, inspection, etc.). It is a mistake to believe in one
       institution (court) – one process (adjudication).
    - Implicit understanding that the calculus of choice is very complex (many criteria:
       efficiency, delay, justice, being nice).
We studied the pursuit of public purposes through institutions and processes which carry with
them legitimacy, respect of human beings, rationality, justice which transcends individual
cases.

C. Case Study: Recreational Drugs

The current strategy is criminalisation. Moving off that, one could go all the way to an
unregulated market – but there are many choices in between.

What drives our understanding of recreational drugs now, in other words, what‟s the problem?
Ex. are morality, public health, governance (incl. public safety), economics. If the
phenomenon is approached from a public health perspective, questions are: individual health
threats, epidemiology, etc. The CMA and others who aim at gross harm reduction think the
current system exacerbate the health problem (no quality control, stigmatization). From the
perspective of economics, questions are: black market (no tax), requires policing expenditure,
economic cost-benefit analysis. If the perspective of government: who are the players, success
of current governance model in achieving its objectives, corruption of public life. From a
morality perspective, the questions are: is it right / wrong, public opinion, religion, work ethic,
virtue of happiness, protecting the vulnerable, victimless crimes, private morality, freedom of
choice.

Why do human beings ingest recreational drugs? Psychotropic state (highs and lows),
alternative life style, escapism, stimulating creativity, being cool, custom, ignorance of
consequences, biological determination, addiction are all reasons. We move from agency to
determinism. How many of these good enough reasons to invoke the criminal law? Except for
the last two, applying this we wouldn‟t have TV, gourmet food or admin pro! These are
normal fashions of human behaviour. About the last two, are they enough? Not really, the top
two drugs are nicotine and caffeine and some people live fine for decades sniffing coke.
                                                                                             42



To what extent does any regime palliate or exacerbate individual and collective collateral
consequences? Some drugs produce impairment for some purposes (ex. alcohol and drivers)
or some settings (ex. family, direct (punch) or indirect victims by ricochet (lack of money)).
What if domestic abuse or lost jobs went down after legalisation – will the change increase or
decrease the hurt? To that question, there is no answer for lack of evidence. It‟s hard to get
statistics on criminal phenomena.

If we were to conclude that a case can be made for moving off criminalisation. What are our
choices? First, decriminalise or legalise? Most people who deal in governance, police,
criminologists say that decriminalisation is the worse option (doesn‟t snuff out the black
market, can‟t regulate anything). Then comes a whole range of options in regulation of a legal
product. Regulation must go from production to consumption, with everything in between.
Strategy may vary depending on the field of activity, ex. importing and production,
possession and sale, commercial or self production, supply (who can sell) and demand (who
can buy).

It‟s easy to imagine an optimal state. The hard world of policy development is that
nothing happens like turning a light on. Things can‟t change overnight. For ex., US
constraint, lack of infrastructure, etc. The legalisation conclusion was first reached by a
commission in 1972. Things have barely moved in 34 years, although awareness is increasing,
notably of the corrupting influence of drug money.

D. Conclusion

Almost every type of decision a society takes can be thought about in this course‟s frame. The
issues we studied exist from the lowest to the highest level: how do we get from a policy idea
to policy on the ground? The goal is maximizing human agency (Sen!).

There is no cookbook or template for all times and all places. The best we can hope for is
not foreclosing in advance any available options in a certain situation. Neither is there a
definitive solution: the right move today may not be the right move tomorrow. The field
changes, our goal changes.

In the end, the idea of accountability in administrative law is not something that we ought to
separate out of what we are as human beings. It‟s like accountability in the playing field or in
the family. We are always accountable to our mandate, to those we interact with, to ourselves.

				
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