Response of the Minister of National Defence to the 2012 Report of the Military Judges Compensation Committee

On behalf of the Government of Canada, this is the Response of the Minister of National Defence to the 2012 Report of the Military Judges Compensation Committee, dated September 28, 2012.  It is issued pursuant to paragraph 204.27(2) of the Queen’s Regulations & Orders for the Canadian Forces.

The Government expresses its sincere appreciation to the members of the Committee for their commitment to this important public interest process as well as for the diligence and assiduity with which they exercised their functions of carrying out the independent assessment of the evidence and submissions placed before them.

I. Background

Consistent with the constitutional requirements enunciated by the Supreme Court of Canada in Reference re Remuneration of Judges of the Provincial Court (P.E.I.), [1997] 3 S.C.R. 3, amendments were made in the National Defence Act in 1998 to require the regular review of remuneration for military judges.  The need for an independent, effective and objective body to determine judicial compensation was laid out in the decision at para. 147 in the following words:

… However, the imperative of protecting the courts from political interference through economic manipulation requires that an independent body — a judicial compensation commission — be interposed between the judiciary and the other branches of government.  The constitutional function of this body would be to depoliticize the process of determining changes to or freezes in judicial remuneration.  This objective would be achieved by setting that body the specific task of issuing a report on the salaries and benefits of judges to the executive and the legislature, responding to the particular proposals made by the government.…

As such, no changes to remuneration take place without the Government first having the benefit of a report from the Committee.  This process aims to protect judicial independence by avoiding direct negotiations between military judges and the Government.

In determining the adequacy of remuneration for military judges, Queen’s Regulations & Orders for the Canadian Forces article 204.24(3) requires the consideration of the following factors in the Committee’s review process:

  1. the prevailing economic conditions in Canada, including the cost of living, and the overall economic and current financial position of the federal government;
  2. the role of financial security of military judges in ensuring judicial independence;
  3. the need to attract outstanding officers as military judges; and
  4. any other objective criteria that the committee considers relevant.

The Committee was convened to consider the quadrennial period of September 1, 2011 to August 31, 2015.  The Committee is composed of the Honourable Constance Glube, OC, ONS (Chair, nominated by the other two nominees), the Honourable Michel Bastarache, CC (military judges’ nominee) and Mr. Norman W. Sterling, QC (Government’s nominee).  A one-day hearing was held on June 14, 2012 and the Committee’s Report was tendered to the Minister of National Defence on September 28, 2012.

As set out in article 204.27 of the  Queen’s Regulations & Orders for the Canadian Forces, the Minister must respond within six months of receiving the Committee’s report.  The Committee’s recommendations are not binding on the Government but the Supreme Court of Canada in Bodner v. Alberta, [2005] 2 S.C.R. 286 at para. 31 heldthat a government that proposes to reject or modify recommendations must provide a rational justification for doing so.

In summary, the majority of the members of the Committee made the following recommendations in the Report:

  • Remuneration:  Remuneration should be increased incrementally in each of the four years covered by the mandate in such a way that at the end of the term, remuneration will be equivalent to that of other federally-appointed judges.  No cap should be placed on the Industrial Aggregate Index (I.A.I.) rate when pay is automatically indexed by regulation every April 1;
  • Severance Pay Benefits:  Maintain severance pay for the four current military judges. Revisit compensation in lieu of severance pay benefits and adjust it to provide for the status quo; and
  • Quadrennial Review:  The next quadrennial commission should be responsible for determining remuneration for all federally-appointed judges including military judges.

In contrast, one member of the Committee (in the minority) determined that the current remuneration for military judges was adequate. Nonetheless, like the majority of his colleagues on the Committee, he recommended that no cap be imposed on the payment of the annual indexing rate and endorsed the majority recommendation that the current severance arrangements be maintained for the four current military judges.

II. Government’s Response

The Government fully accepts the Committee’s recommendation to not cap the rate for the annual I.A.I. rate. With respect however, the Government does not accept the recommendation to increase the level of remuneration to that of federally appointed judges over the quadrennial period. Specifically, it declines to provide any pay increases other than the annual indexing and the compensation to off-set the elimination of further accrual of severance pay benefits. The compensation to off-set the elimination of further accrual of severance pay will be .25% in the first year of elimination.  Any future compensation related to the cessation of accrual of severance benefits will be consistent with that accorded to the published pay ranges of senior military officers, senior executives of the federal public service and Governor in Council appointees.  Concerning the recommendation governing the next quadrennial review, a response is not required as consideration of the subject matter falls outside the mandate of the Committee.  Nonetheless, in the interest of providing clarity on this matter, the Government will offer brief comments.

i) Remuneration

In considering the prevailing economic conditions, the Canadian economy appears to be weathering the consequences of the global recession better than other members of the Group of Seven (G-7) economies.  Nonetheless, Canada is not immune to the continuing uncertainties reflecting in world financial and commodity markets.  Indeed, as announced by the Department of Finance in November 2012, the Government’s Update of Economic and Fiscal Projections-2012 reflects a downward revision to anticipated budgetary revenues over those forecasted in Budget 2012.  This factor weighs on the Government’s plan to remain on track for returning to a balanced budget over the medium term and adds increased importance to the ongoing efforts to ensure prudent fiscal management of public funds.

While changes in public sector compensation generally are a factor to consider, the Government has not determined that compensation increases for military judges must be the same as salary increases being granted to members of the public service.  In weighing the findings and recommendations of the Committee, consideration must be given to the words of the then Chief Justice Lamer in the Reference re Remuneration of Judges of the Provincial Court (P.E.I.) case at para. 158:

… In my opinion, the risk of political interference through economic manipulation is clearly greater when judges are treated differently from other persons paid from the public purse. This is why we focused on discriminatory measures in Beauregard.  As Professor Renke, supra, has stated in the context of current appeals (at p. 19):

. . . if judges were spared compensation decreases affecting other public sector groups, a reasonable person might well conclude that the judges had engaged in some behind-the-scenes lobbying.  The judges’ exemption could be thought to be the result of secret deals, or secret commitments to favour the government.  An exemption of judges from across-the-board pay cuts is as likely to generate suspicions concerning judicial independence as the reduction of judicial compensation in the context of general public sector reductions.

In its Report, the Committee asserted that its mandate is to recommend an adequate level of remuneration, not the minimum level sufficient to ensure continuing judicial independence.  The Government agrees with this understanding of the Committee’s role.

However, in its analysis, the Committee adopted superior court judges as the sole benchmark and recommended that military judges should receive the same remuneration as superior court judges.  While a comparative analysis with respect to federally-appointed judges is a valid part of the Committee’s deliberations, the Committee’s salary recommendation gave undue weight to this analysis, and failed to give appropriate weight to other factors.  Mechanical benchmarking to a sole and unique comparator represents a significant departure from the earlier position adopted by the Committee in its 2008 report when it recognized that the remuneration of military judges could not be determined in reference to any one single comparator.  Moreover, in the 2004 Committee report, the majority stated unequivocally that superior court judges do not constitute an appropriate basis of comparison.

In its unanimous decision in Bodner, the Supreme Court of Canada clarified the principles underlying the compensation review process and commented on the consideration that the Committee ought to accord to relevant findings contained in earlier reports as follows at para. 15:

Each commission must make its assessment in its own context.  However, this rule does not mean that each new compensation commission operates in a void, disregarding the work and recommendations of its predecessors.  The reports of previous commissions and their outcomes form part of the background and context that a new compensation committee should consider.  A new commission may very well decide that, in the circumstances, its predecessors conducted a thorough review of judicial compensation and that, in the absence of demonstrated change, only minor adjustments are necessary.  If on the other hand, it considers that previous reports failed to set compensation and benefits at the appropriate level due to particular circumstances, the new commission may legitimately go beyond the findings of the previous commission, and after a careful review, make its own recommendations on that basis.

On the question of adequacy of remuneration, the Committee made the following findings respecting the Government’s decision to not increase military judges’ salaries as recommended in the Committee’s 2008 Report:

… In our view, this is not the main problem; it is that the government failed to establish a valid rationale for the choice of a comparator and justification for its benchmark.  We therefore cannot accept that the remuneration given after the report of 2008 constituted an adequate remuneration.  There is in this instance no adjustment to be made to an otherwise adequate remuneration.

The Committee conflated the issue of the adequacy of military judges’ remuneration following the 2008 Committee Report with the use of previously established comparators for determining adequacy.  As a consequence, the Committee mistakenly disregarded the conclusions of the previous Committee concerning the use of appropriate comparators when assessing each of the factors prescribed in Queen’s Regulations & Orders for the Canadian Forces article 204.24(3).

It is notable that the Committee does not find that the fiscal constraint measures exercised by the Government following the 2008 Committee Report were directed uniquely at judges or that public confidence in the independence of military judges was undermined because military judges could be perceived as susceptible to political pressure through economic manipulation.  On this point, the minority member of the Committee provided his assessment at page 15 in the following words:

… I part with my colleagues however in their opinion, that remuneration given after the report of the Committee of 2008 was not adequate (p.6).

With respect to the Committee’s focus on superior court judges as the sole comparator group, the Committee’s reasoning does not give appropriate weight to the other mandatory factors under Queen’s Regulations & Orders for the Canadian Forces article 204.24(3).  The fact that superior court and military judges are both appointed by the federal government does not displace the Committee’s obligation to consider all of the factors.  The Committee’s analysis focused primarily on rationalizing parity with superior court judges as illustrated in the following excerpt from page 13 of the Report:

If treated differently from other members of the Canadian Judicial System, the perception will be that they are inferior to them and probably less qualified and worthy of trust and respect.  There is no reason to treat the military court differently than other specialized courts; stated differently, there is no true difference in kind between the specialization required of a Tax Court judge and a Military Court judge.  We also think this a matter of equity and fairness.

The Committee overlooked the fact that the “Canadian Judicial System” is also made up of a large group of provincial court judges.  No evidence was adduced to support the supposition that military judges will be perceived as inferior to other judges.  As most of the duties and responsibilities of provincial court judges are similar to those of military judges, the narrow comparative analysis made by the Committee is unfortunately flawed.

Upon discussing the mandated criteria related to the need to attract qualified candidates, the Committee acknowledged that the parties agreed that the choice of a judicial career is not exclusively based on remuneration and that consideration must be given to whether remuneration will discourage potential applicants.  This requires consideration of the need to attract outstanding officers drawn from the only pool of candidates eligible for appointment—Canadian Forces officers who are barristers of at least ten years standing.  Nonetheless, at page 11, the Committee made the following determination:

… Linking the remuneration of military judges exclusively to that of military officers is in our view inconsistent with the requirements of judicial independence.  …

By adopting this approach, the Committee failed to adequately consider the evidence placed before it.  As aptly pointed out by the minority member of the Committee at page 17 of the Report:

Salary and financial benefits are not the only factor in attracting outstanding candidates for judicial positions and there is no evidence that the remuneration of military judges deter potential applicants.

Lastly, in examining other factors, the majority of the Committee provided no reasonable justification for rejecting the specific and unique characteristics of the military justice system that are relevant to the overall assessment.  In doing so, the Committee failed to adequately consider factors related to the longstanding recognition of the sui generis nature of the responsibilities, roles and functions of military judges in the military justice system.  As posited by the majority in the 2004 Committee Report at page 10:

It is important to take into account the nature of the cases heard by Military Judges.  This Committee could very properly be criticized if it did not do so.

As highlighted by the minority member of the Committee in the latest report, the evidence and oral arguments suggesting a lesser workload than that of superior court judges is a relevant factor for consideration.  The majority members of the Committee failed to adequately consider this factor.

As a consequence of the above reasons, the Government does not accept the Committee’s recommendation amounting to a 31% economic pay increase over four years in addition to annual regulatory indexing.  However, the Government does accept the Committee’s recommendation that annual statutory increases should not be capped.  Continued statutory increases will prevent any erosion of current remuneration that is commensurate with the status, dignity and responsibilities of military judges, since annual salary increases in accordance with the I.A.I. typically exceed increases in the cost of living.  For example, the statutory increase in the salary of military judges in 2012 was 2.5%.

ii) Severance Pay Benefits

The Committee, including the minority member, was of the view that the Government is competent to review the retirement arrangements for military judges and eliminate further accrual of severance benefits, but it recommended that severance pay be maintained for the four presently serving military judges.  The Committee also recommended that the Government revisit its compensation in lieu of severance benefits and adjust them to provide for the status quo.  In making its recommendations, the Committee did not provide a rationale for the distinctive treatment to be accorded to currently serving military judges nor did it explain how this distinction was tied to the central issue of adequacy of judicial remuneration.

As announced in the 2012 federal Budget Plan, the Government has taken specific action to bring federal public service compensation in line with that of other public and private sector employers.  This includes eliminating the future accumulation of severance benefits for voluntary resignation and retirement, which to date has been eliminated for about 230,000 unionized and non-unionized federal government employees, including members of the Royal Canadian Mounted Police, the Canadian Forces (with the exception of military judges) and all executives of the core public administration.  Other federal public sector employers are pursuing similar approaches.

While not legislated, the elimination of further accrual of the benefit is part of an across-the-board economic measure with respect to most persons remunerated from federal funds.  As an integral part of the Government’s plan to return to balanced budgets, this broad initiative made in the public interest is not exclusive in its application to military judges as a class.  Having fully considered the Committee’s recommendation in this context, it is the Government’s view that the elimination of the accumulation of severance benefits does not imperil the institutional independence of the military judiciary.

Furthermore, maintaining the status quo for currently serving military judges would bifurcate the pay regime as between the current military judges and those who will be appointed in the future.  Such an approach is problematic for a number of reasons.  With the future retirement of currently serving military judges and the appointment of replacements, the potential arises for a pay differential to eventually arise between military judges carrying out the same judicial duties without an adequate rationale based on the principles of equal pay for work of equal value within the same establishment to explain the difference.  Any resulting pay disparity has the clear potential to interfere with collegiality amongst military judges as well as to foster a negative working environment that would have a corrosive effect on the overall morale of the military bench.  In light of these additional problems, it would be unreasonable to implement the recommendation to maintain the status quo for currently-appointed military judges and the Government respectfully declines to accept the Committee’s recommendation.

In compensation for the change in severance pay for military judges, an increase of .25% will be given in the first year the severance pay change takes effect.

iii) The Next Quadrennial Commission

The Committee expressed the view that the next quadrennial commission should be responsible for determining the appropriate remuneration for all federally-appointed judges, including military judges.

With respect, the Committee has no jurisdiction under legislation or regulation to make a recommendation calling for the transfer of its responsibilities to the Judicial Compensation and Benefits Commission.  Of importance, none of the parties to the proceedings made submissions related to this recommendation.  Likewise, there was no evidence concerning what impact this proposed change, if given effect, would have on the process of determining judicial compensation.

While it is not necessary for the Government to respond to a recommendation outside of the Committee’s mandate, it must be pointed out that the current legislative and regulatory framework for the Committee recognizes the unique and distinct judicial role performed by military judges.The Judicial Compensation and Benefits Commission is established pursuant to the Judges Act, and its mandate is to review and make recommendations to the Minister of Justice concerning the salaries and benefits of federally-appointed judges.  The Judges Act has no application to military judges.

It was acknowledged by the Committee in its 2008 report at page 5 that while military judges are judicially independent of the military chain of command, they still remain an integral part of the military with all the attendant advantages and disadvantages of their status as members of the Canadian Forces.  Without the benefit of full submissions from all the parties and in the absence of evidence that would suggest that the implementation of the recommendation would lead to an improvement in the independence, objectivity and effectiveness of the process to determine judicial remuneration, the Government considers the Committee a particularly well-suited forum for examining matters related to judicial remuneration for military judges.  With respect, the Government is unable to accept this recommendation.

III. Concluding Remarks

The Government wishes to acknowledge the importance of military judges in the military justice system and re-affirms its commitment to ensuring the continuing judicial independence of military judges.  In preparing its Response, the Government has carefully weighed and considered each of the findings and recommendations made in the Report, including those expressed by the minority member.  In evaluating the implications of adopting the Committee’s recommendations, the Government has also been mindful of any possible difficulties that could adversely impact the judicial compensation process as well as occasion unfairness or inequity between the military judges themselves.  The determination of remuneration is a very complex matter and the members of the Committee are again thanked for their time and significant efforts in addressing this most important matter.

EXCERPT OF THE RECOMMENDATIONS FROM THE 2012 MILITARY JUDGES COMPENSATION COMMITTEE REPORT

Majority Recommendations

We are of the view that the remuneration of military judges should be increased incrementally in each of the four years covered by our mandate in such a way that at the end of that term it will be equivalent to that of other federally appointed judges.

We are of the view that the next quadrennial commission should be responsible for determining the appropriate remuneration for all federally appointed judges including members of the military courts.

We are of the view that the government is competent to review the retirement arrangements for military judges and eliminate the present severance benefits, but would recommend that they be maintained for the four present members of the military court.  Nevertheless there is evidence that the pension benefits of military judges are lower than that of superior court judges (evidence of Mr. Sauvé, an expert presented by the military judges, in that regard, was not contested).  The nature of the benefits is distinct and there is no information available to determine how the situation could be redress.  However, for the time being, we would recommend that the government revisit its compensation in lieu of severance benefits and adjust it to provide for the status quo.

We are of the view that there is no economic justification for capping the Industrial Aggregate Index and that such a measure will in real terms cause the remuneration of sitting judges to be reduced.  In our view, there should be no reduction in judicial remuneration unless there is a financial crisis and that the measure is a necessary part of a large number of measures needed to secure the fiscal position of the government.  All of the evidence on the economic situation at present does not justify such a measure.

The military judges have asked that we recommend that the government pay their costs in these proceedings.  It is our understanding that the government has always paid reasonable costs and do not consider it possible for us to propose a particular formula for establishing what is reasonable in the circumstances.

Minority Recommendations

I am of the view that the current remuneration of military judges is adequate.

Like my colleagues, I do not believe that there is an economic justification for capping the Industrial Aggregate Index.  The remuneration of military judges should be increased according to inflation.

I also agree with my colleagues that the government is competent to review the retirement arrangements for military judges and eliminate the present severance benefits.  I also agree with them that the current retirement arrangements should be maintained for the four present members of the military court.

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