Judgments

Decision Information

Decision Content

A-76-89
The Minister of Finance of Canada, the Minister of National Health and Welfare of Canada and the Attorney General of Canada (Appellants) (Defendants)
v.
Robert James Finlay (Respondent) (Plaintiff)
and
The Attorney General of Manitoba (Intervenor)
INDEXED AS: FINIAY v. CANADA (MINISTER OF FINANCE) (CA.)
Court of Appeal, Pratte, Hugessen and Mac- Guigan JJ.A.—Winnipeg, May 29, 30 and 31; Ottawa, July 6, 1990.
Health and welfare — Canada Assistance Plan (CAP) pro viding for cost sharing by federal government of provincial social assistance and welfare services — To recover debts due to overpayments, Manitoba reducing payments to persons in need below minimum level of "basic requirements" set by CAP — Legality of payments made by federal Minister of Finance and certificates given by federal Minister of National Health and Welfare to Manitoba pursuant to Canada Assistance Plan, s. 7 in view of Manitoba Social Allowances Act provisions authorizing such reduction — Whether Minister of Finance should be enjoined from making further payments to Manito- ba under Plan or federal-provincial agreement thereunder until provincial Act amended to ensure allowances not below minimum basic requirements — Rates of welfare payments set by municipalities — No requirement for Provincial approval — Declaration rates must be established by designated provin cial authority.
The Canada Assistance Plan (CAP) provides for cost shar ing by the federal government of provincial social assistance and welfare services for "persons in need". In 1967, the Minis ter of National Health and Welfare and the Province of Manitoba entered into an agreement under the CAP with respect to such federal contributions.
In Manitoba, federally cost-shared payments to persons in need were dealt with under two provincial statutes, the Social Allowances Act and the Municipal Act. Manitoba was the only province not requiring provincial approval of the rates of welfare payments set by municipalities.
The respondent, a resident of Manitoba, qualified for social assistance under the Manitoba Social Assistance Act because of permanent disabilities, including severe epilepsy, which ren dered him unable to provide for himself. He received overpay- ments on three separate occasions, of $207.70, $109 and $796.
The Province's policy as to the quantum of recovery in the case of overpayments was to recover 5% of the total allowance, or the whole of that portion of the allowance intended to cover "personal requirements".
The Trial Judge concluded that the recovery of overpayments or part thereof from a recipient who is receiving the minimum amount of assistance to cover basic requirements resulted in undue hardship for the recipient and constituted a breach of the agreement between Manitoba and the Government of Canada. The payments of contributions by the Minister of Finance and certificates by the Minister of National Health and Welfare pursuant to subsection 7(1) of the CAP were declared to be illegal so long as the Provincial legislation continued to author ize reducing an allowance below the level of basic requirements in order to collect debts for overpayments and, on that same basis, the Minister of Finance was ordered to refrain from making any further payments to the Province pursuant to the CAP or its agreement. As to the setting of the rates of welfare payments, the Trial Judge found that the Province did not have to set the rates of welfare payments by a municipality nor did it have to expressly approve that rate. The Province could allow a municipality to set its own rates of welfare assistance as long as the proper needs test was applied.
This was an appeal from the declaration and injunction and a cross-appeal from the decision concerning the setting of rates by municipalities.
Held, the appeal should be dismissed as to the declaration and allowed as to the injunction. As to the cross-appeal, a declaration should issue that all social assistance rates under the CAP and the 1967 Canada-Manitoba Agreement are required to be established by the designated provincial authority.
The Declaration
Since public assistance and welfare fell under provincial constitutional competence, Parliament's role was restricted to advancing funds to assist the provinces in discharging their responsibilities. Section 6 of the CAP, which established the conditions to which all payments were subject, left to each province the determination of the basic requirements of persons in need. Under section 6, the amount of financial aid had to be such as to enable the recipient to meet his/her basic require ments, the exact amount depending on the recipient's income and resources. This in no way lessened the fundamental juris diction of each province to determine how to quantify the "basic requirements" of a person in need. The only limit imposed on the provinces was CAP's condition that, having established a level of financial aid, they could not decrease that aid below a recipient's basic requirements.
Manitoba did not use either of the federal terms "basic requirements" or "budgetary requirements", but instead used the phrase "basic necessities". However, the Province's defini-
tion of "basic necessities" was only the fulfilment of the federal concept of "budgetary requirements". A drop below basic necessities was therefore an infringement of paragraph 6(2)(b) of the CAP.
Subsection 20(3) of the Manitoba legislation did not respect the federally imposed minimum since it allowed the deduction of an amount "that would not cause undue hardship to the recipient". The test Manitoba used in determining what con stituted undue hardship did not meet the conditions of the CAP.
To make the recovery of overpayments subject to the strict conditions of the CAP renders difficult such recovery. But it is not necessarily in the public interest to bleed those who live at or below the poverty line as a purgative for social health, even if the bleeding is only a little at a time and only once a month. Such disincentives to abuse may be as socially harmful as the disease.
The Injunction
There was no need for an injunction. Its consequences would have been out of proportion to the mischief to be remedied. It would have jeopardized not only the entire social allowances program in the Province, but would also have cut off federal funding for all programs cost shared under CAP, including child welfare.
Rate Setting by Municipalities
The definition of "person in need" in section 2 of the CAP provided for a needs test "established by the provincial author ity", in turn defined as "the provincial Minister or other official body specified by the province" in the relevant agreement. The Agreement in question designated the Minister of Welfare as the provincial authority. The needs tests were therefore not established by the proper authority. Since the Supreme Court of Canada has recognized the cross-appellant as having public interest standing herein, there is no question that he had the right to challenge even matters of contract between the Federal Government and the Province.
STATUTES AND REGULATIONS JUDICIALLY CONSIDERED
Canada Assistance Plan, R.S.C., 1985, c. C-1, Preamble, ss. 1, 2, 3, 4, 6, 7.
Canada Assistance Plan Regulations, C.R.C., c. 382, ss. 2, 3.
Federal Court Rules, C.R.C., c. 663, R. 341A(4) (as enacted by SOR/79-57, s. 8).
Social Allowances Regulations, S160-404/88R, s. 5, Sch. A.
The Municipal Act, R.S.M., c. M225, ss.449, 450, 451,
452.
The Social Allowances Act, R.S.M. 1987, c. S160, ss. 1,
2, 3, 4, 6, 7, 9, 20.
CASES JUDICIALLY CONSIDERED
APPLIED:
Re Lofstrom and Murphy (1971), 22 D.L.R. (3d) 120 (Sask. C.A.); Osenton (Charles) & Co. v. Johnston, [1942] A.C. 130 (H.L.).
DISTINGUISHED:
LeBlanc v. City of Transcona, [1974] S.C.R. 1261; (1973), 38 D.L.R. (3d) 549; [1973] 6 W.W.R. 484.
REFERRED TO:
Re Finlay and Director of Welfare (Winnipeg South/ West) (1976), 71 D.L.R. (3d) 597; 29 R.F.L. 395 (Man. C.A.); Finlay v. Minister of Finance of Canada, [1984] 1 F.C. 516; (1983), 146 D.L.R. (3d) 704; 1 Admin. L.R. 76; 48 N.R. 126 (C.A.); affd by Finlay v. Canada (Minister of Finance), [1986] 2 S.C.R. 607; (1986), 33 D.L.R. (4th) 321; [1987] 1 W.W.R. 603; 23 Admin. L.R. 197; 17 C.P.C. (2d) 289; 71 N.R. 338.
COUNSEL:
Harry Glinter for appellants (defendants). G. Patrick S. Riley for respondent (plaintiff). W. Glen McFetridge for Attorney General of Manitoba.
Robert G. Richards for Attorney General of Saskatchewan.
Arne Feltz for National Anti-Poverty Organi zation.
Rebecca J. Givens for Minister of Community and Social Services.
Jean-Claude Paquet for Attorney General of Quebec.
SOLICITORS:
Deputy Attorney General of Canada for appellants (defendants).
Taylor, McCaffrey, Chapman, Winnipeg, for respondent (plaintiff).
Attorney General of Manitoba for Attorney General of Manitoba.
Attorney General of Saskatchewan for Attor ney General of Saskatchewan.
Legal Aid Manitoba, Winnipeg, for National Anti-Poverty Organization.
Legal Services Branch, Toronto, for Minister of Community and Social Services.
Attorney General of Quebec for Attorney General of Quebec.
The following are the reasons for judgment rendered in English by
MACGUIGAN J.A.: This is an appeal and a cross-appeal from a judgment of the Trial Division rendered on January 24, 1989 [(1989), 25 F.T.R. 45], by which Teitelbaum J. issued a declaration that payments made by the federal Minister of Finance and certificates given by the federal Min ister of National Health and Welfare to the Prov ince of Manitoba, both pursuant to section 7 of the Canada Assistance Plan [R.S.C. 1970, c. C-1], now R.S.C., 1985, c. C-1, were illegal so long as the Manitoba Social Allowances Act, R.S.M. 1987, c. S160, authorized the reduction of social allowances to "persons in need", for the purpose of collecting debts arising from overpayments, below the minimum level of "basic requirements" set by the Plan. The Trial Judge also issued an injunction against the Minister of Finance, enjoining him from making any further payments to Manitoba pursuant to the Canada Assistance Plan or the federal-provincial agreement made under it until the Social Allowances Act was amended to ensure that allowances did not fall below the minimum level of basic requirements. The judgment was suspended pending the disposition of this appeal.
The Canada Assistance Plan ("CAP" or "the Plan"), which came into effect in 1966, provides for cost sharing by the federal government of provincial social assistance and welfare services for "persons in need". The Governor in Council, acting pursuant to section 4 of the Plan, author ized the Minister of National Health and Welfare to enter into agreements with the provinces in respect of such federal contributions, and on March 20, 1967, the Minister of National Health and Welfare and the Province of Manitoba entered into such an agreement ("the 1967 Agreement").
The relevant provisions of CAP [R.S.C., 1985, c. C-1] are as follows:
An Act to authorize the making of contributions by Canada toward the cost of programs for the provision of assistance and welfare services to and in respect of persons in need
WHEREAS the Parliament of Canada, recognizing that the provision of adequate assistance to and in respect of persons in need and the prevention and removal of the causes of poverty and dependence on public assistance are the concern of all Canadians, is desirous of encouraging the further development and extension of assistance and welfare services programs throughout Canada by sharing more fully with the provinces in the cost thereof;
THEREFORE, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
SHORT TITLE
1. This Act may be cited as the Canada Assistance Plan.
INTERPRETATION
2. In this Act,
"assistance" means aid in any form to or in respect of persons in need for the purpose of providing or providing for all or any of the following:
(a) food, shelter, clothing, fuel, utilities, household supplies and personal requirements (hereinafter referred to as "basic requirements"),
(b) prescribed items incidental to carrying on a trade or other employment and other prescribed special needs of any kind,
(c) care in a home for special care,
(d) travel and transportation,
(e) funerals and burials, (/) health care services,
(g) prescribed welfare services purchased by or at the request of a provincially approved agency, and
(h) comfort allowances and other prescribed needs of resi dents or patients in hospitals or other prescribed institutions;
"Minister" means the Minister of National Health and Welfare;
"person in need" means
(a) a person who, by reason of inability to obtain employ ment, loss of the principal family provider, illness, disability, age or other cause of any kind acceptable to the provincial authority, is found to be unable; on the basis of a test established by the provincial authority that takes into account that person's budgetary requirements and the income and resources available to him to meet such require ments, to provide adequately for himself, or for himself and his dependants or any of them, or
(b) a person under the age of twenty-one years who is in the care or custody or under the control or supervision of a child welfare authority, or a person who is a foster-child as defined by regulation,
and for the purposes of paragraph (e) of the definition "assist- ance" includes a deceased person who was a person described in paragraph (a) or (b) of this definition at the time of his death or who, although not such a person at the time of his death, would have been found to be such a person if an application for assistance to or in respect of him had been made immediately before his death;
"prescribed" means prescribed by regulation;
"provincial authority" means the provincial Minister or other official or body specified by the province in an agreement entered into under section 4 as being charged with the administration of the provincial law;
"provincial law" means the Acts of the legislature of a province that provide for
(a) assistance, or
(b) welfare services in the provinces,
under conditions consistent with the provisions of this Act and the regulations, and includes any regulations made under those Acts;
"provincially approved agency" means any department of gov ernment, person or agency, including a private non-profit agency, that is authorized by or under the provincial law or by the provincial authority to accept applications for assist ance, determine eligibility for assistancè, provide or pay assistance or provide welfare services and that is listed in a schedule to an agreement under section 4;
PART 1
GENERAL ASSISTANCE AND WELFARE SERVICES
Interpretation
3. In. this Part
"agreement" means an agreement made under section 4; "contribution" means an amount payable by Canada under an agreement.
Agreement Authorized
4. Subject to this Act, the Minister may, with the approval of the Governor in Council, enter into an agreement with any province to provide for the payment by Canada to the province of contributions in respect of the cost to the province and to municipalities in the province of
(a) assistance provided by or at the request of provincially approved agencies pursuant to the provincial law; and
(b) welfare services provided in the province by provincially approved agencies pursuant to the provincial law.
Terms of Agreement
6....
(2) An agreement shall provide that the province
(a) will provide financial aid or other assistance to or in respect of any person in the province who is a person in need described in paragraph (a) of the definition "person in need" in section 2, in an amount or manner that takes into account the basic requirements of that person;
(b) will, in determining whether a person is a person described in paragraph (a) and the assistance to be provided to that person, take into account the budgetary requirements of that person and the income and resources available to that person to meet those requirements;
(c) will continue, as may be necessary and expedient, the development and extension of welfare services ' in the province;
(d) will not require a period of residence in the province as a condition of eligibility for assistance or for the receipt or continued receipt thereof;
(e) will ensure the provision by law, not later than one year from the effective date of the agreement, of a procedure for appeals from decisions of provincially approved agencies with respect to applications for assistance or the granting or providing of assistance by persons directly affected by those decisions;
(/) will ensure the maintenance and availability, for exami nation and audit by the Minister or any person designated by him, of such records and accounts respecting the provision of assistance and welfare services in the province as the agree ment or the regulations may require; and
(g) will provide the Minister with copies of all Acts of the legislature of the province referred to in the definition "pro- vincial law" in section 2 and of all regulations made under those Acts.
Payment of Contributions
7. Contributions or advances on account thereof shall be paid, upon the certificate of the Minister, out of the Consolidat ed Revenue Fund at such times and in such manner as may be prescribed, but all such payments are subject to the conditions specified in this Part and in the regulations and to the observ ance of the agreements and undertakings contained in an agreement.
The relevant provisions of the 1967 Agreement are as follows (Appeal Book, I, at pages 33-34):
2. The Province agrees
(a) to provide financial aid or other assistance to or in respect of any person in the province of Manitoba who is a person in need described in subparagraph (i) of para-. graph (g) of Section 2 of the Act in an amount or manner that takes into account his basic requirements;
(b) in determining whether a person is a person described in subclause (a) of this clause and the assistance to be provided to, such. person,
(i) except prior to April 1st, 1967, to obtain from such person or -from a responsible person on his behalf, an application fbr assistance in form and content satisfactory to the provincial authority, and
(ii) to take into account that person's budgetary requirements and the income and resources avail able to him to meet those requirements,
provided that
(iii) in taking into account that person's income and resources, The Province may determine the income and resources of that person on a daily, weekly, monthly or other periodic basis acceptable to the provincial authority but in calculating that income shall include as income the whole of any income
maintenance payment ...
An early problem under CAP was the realiza tion that the Plan did not allow the Federal Gov ernment to make contributions to the provinces with respect to overpayments to assistance or wel fare recipients. The Deputy Minister of National Health and Welfare alerted the provinces to that fact in letters of August 6, 1968, (Appeal Book, II, at pages 273-274) and April 22, 1969 (Appeal Book, III, at pages 405-406). In March 1971 the Canada Assistance Plan Regulations were amend ed to allow for federal cost sharing in respect of overpayments to persons subsequently found to be ineligible for all or part of such assistance. On November 24, 1971, the Federal Government approved the Manitoba plan for preventing and recovering overpayments (Appeal Book, II, at pages 286-287) on certain conditions. Manitoba subsequently informed Ottawa that the conditions had been fulfilled (Appeal Book, II, at pages 288-289), and final federal approval was issued on February 29, 1972 (Appeal Book, II, at page 290).
The relevant provisions of the Canada Assist ance Plan Regulations, now C.R.C., c. 382, are as follows:
2....
(2) For the purposes of the Act and these Regulations,
"budgetary requirements" means the basic requirements of a person and his dependants, if any, and any other of the items and services described in paragraphs (b) to (h) of the defini tion "assistance" in section 2 of the Act that, in the opinion of the provincial authority, are essential to the health or well-being of that person and his dependants, if any;
"personal requirements" means items of a minor nature, other than the ordinary requirements of food, shelter, clothing, fuel, utilities and household supplies, that are necessary in day to day living to a person's health or well-being, and, without limiting the generality of the foregoing, includes items relating to
(a) personal care, cleanliness and grooming,
(b) the observance of religious obligations, and
(c) recreation;
Expressions Defined for the Purposes of Particular Provisions
of the Act
3. For the purposes of
(b) paragraph 5(1)(a) of the Act, "cost to the province and to municipalities in the province" in a year means payments made in the year
(i) by the province, and
(ii) by municipalities in the province, and includes
(iii) depreciation allowances, and
(iv) payments by way of assistance provided by or at the request of a provincially approved agency to persons who were considered to be persons in need and who are subse quently found to have been ineligible for all or part of such assistance, where the provincially approved agency has implemented a plan to prevent any such payments and to recover any such payments and the plan is satisfactory to the Minister or a person designated by him ...
In Manitoba, federally cost-shared payments to persons in need are dealt with under two provincial statutes, the Social Allowances Act ("SAA") and The Municipal Act, R.S.M. 1988, c. M225. The SAA provides assistance to single-parent families, to persons with long-term medical disabilities and to persons who are generally unable to provide. for themselves (in brief, it was said, to "unemployable persons"). The Municipal Act provides assistance to persons who are employable but have been unable to find employment, to persons with short-
term disabilities, and to single parents who have been separated from marriage for less than 90 days.
In July, 1980, the SAA was amended, adding subsection 20(3) [S.M. 1980, c. 37, s. 10], which authorizes the deduction of overpayments. How ever, such deductions were also made prior to this amendment pursuant to subsection 9(1).
The relevant provisions of the SAA are as follows:
Definitions.
1 In this Act,
"basic necessities" means the things and services to which reference is made in section 2 ...
"cost of the basic necessities" or "cost of his basic necessities". means the cost, as established in the regulations, of those basic necessities with respect to which a regulation is made under section 6 ...
Provision of essential supplies services, and care.
2 Subject as herein provided, the Government of Manitoba and each of the several municipalities in the province may take such measures as are necessary for the purpose of ensuring that no resident of Manitoba, lacks
(a) such things, goods, and services as are essential to his health and well-being, including food, clothing, shelter, and essential surgical, medical, optical, dental, and other remedi al treatment, care, and attention; and
(b) an adequate funeral upon his death.
Payment of monthly social allowance.
3 For the purpose mentioned in section 2 the government, through and at the discretion of, the director, may, out of -the Consolidated Fund with moneys authorized by an Act of the Legislature to be so paid and applied, grant and pay to or for a recipient monthly or more frequently, an amount in money sufficient to pay the cost of the basic necessities of himself and his dependants.
Determination of amount.
4 The amount to be paid to or for any recipient under section 3, shall be determined after consideration of, and shall be based on the requirements in respect of, his basic necessities and those of his dependants, if he has dependants.
Establishment of cost of basic necessities.
6 The Lieutenant Governor in Council may, by regulation made by order in council, establish, for the purpose of this Act and as at the time of the making of the regulation, the cost of the several basic necessities or of those the cost of which should, in his opinion, be established from time to time.
Fixing of amount by director.
7(1) If he deems that an applicant should receive a social allowance, the director shall, in accordance with the regulations and subject to subsection (2), by his written order fix the amount of the social allowance that shall be paid to him.
Sufficient for basic necessities.
7(2) In accordance with the regulations, the director shall fix an amount that, in his opinion, will be sufficient to provide the applicant with an income sufficient to pay the cost of his basic necessities.
Discontinuance, reduction, suspension or increase in allow ance.
9(1) Where, on the basis of information received by the director, the director is of the opinion that the social allowance being paid to a recipient
(a) should be discontinued; or
(b) should be reduced; or
(c) should be suspended; or
(d) should be increased;
the director, may by written order direct that the social assist ance be discontinued, reduced, suspended or increased, as the case may require.
Right of appeal.
9(3) An applicant or a recipient or a person who has applied for, or is or was receiving, municipal assistance from a munici pality may appeal to the appeal board where he feels his treatment was unfair because
(a) he was not allowed to apply or re-apply for social allowance or municipal assistance;
(b) his request for social allowance or municipal assistance or increase in social allowance or municipal assistance was not decided upon within a reasonable time;
(c) his application for social allowance or municipal assist ance was denied;
(d) his social allowance or municipal assistance was can celled, suspended, varied or withheld; or
(e) the amount of social allowance or municipal assistance granted is insufficient to meet his needs.
Recovery of payments made in error or on false statements.
20(1) Where the government has provided or paid assistance or any social allowance to or for a person, if the assistance or
social allowance, or any part thereof, would not have been provided or paid except for
(a) a false statement or misrepresentation made by the person; or
(b) an error;
the government may recover from the person, or his executors or administrators, or his spouse, or the executors or administra tors of his spouse, and, if the person is an infant, his parent or guardian or any person legally liable to pay his expenses, the amount of that assistance or social allowance or that part thereof as a debt due and owing from the person to the Crown.
Deductions from recipients.
20(3) Notwithstanding any other provision of this Act or the regulations, where under subsection (1) or (2), a person who is liable to pay an amount of social allowance paid to him as a debt to the Crown in right of Manitoba, is a recipient the director may authorize the deduction of an amount that would not cause undue hardship to the recipient from each subsequent payment of social allowance to that person until the amount of the indebtedness of that person is discharged.
The relevant provisions of the Municipal Act are as follows:
PART VII
MUNICIPAL ASSISTANCE
DIVISION I
AID TO NEEDY PERSONS
Powers under Social Allowances Act.
449 Every municipality has the powers and authority set out in section 2 of The Social Allowances Act.
Definitions.
450(1) Subject to Rule 1 set out in Schedule 7, in this Division
"assistance" means assistance as defined in The Social Ser vices Administration Act; ("aide")
"basic necessities" means things, goods and services that are essential to a person's health and well-being, including food, clothing, shelter, household and personal requirements, medi cal, hospital, optical, dental and other remedial treatment, care and attention, and an adequate funeral on death;... "municipal assistance" means assistance provided by a mu nicipality to a person in need who is a resident of, or found in, the municipality; ...
"person in need" means a person who lacks the basic necessi ties and includes a dependant of a person in need .. .
Municipal assistance.
451(1) The council of each municipality shall, by by-law, provide
(a) for granting municipal assistance to any person in need who is a resident of, or is found in, the municipality, who lacks the basic necessities, and who is not qualified to receive a social allowance; and
(b) for regulating and prescribing the conditions under which municipal assistance is to be given to ensure that basic necessities of persons in need are met.
Appeal under Social Allowance Act.
451(4) Where a municipality has passed a by-law under subsection (1), any person who has applied for, or is or was receiving, municipal assistance from the municipality may appeal any decision affecting his application or varying or terminating the municipal assistance in accordance with section 9 of The Social Allowances Act and that section applies to the appeal and to the municipality.
Municipality fails to assist.
452 Where a municipality responsible for the provision of municipal assistance to a person in need fails or refuses to grant the municipal assistance, the person may apply to the director under The Social Allowances Act who may grant assistance under that Act in lieu of municipal assistance; and the amounts paid under this section as assistance under that Act is a debt due to the government by the municipality and may be recov ered by the government from the municipality by withholding from grants payable to the municipality from the government amounts equivalent to the amounts paid under this section as assistance under that Act.
The Manitoba Social Allowances Regulations, 404/88 R provides in Schedule A to section 5 for the costs of basic necessities, according to the number of adult persons and the number and ages of the children. The monthly rate for "food, cloth ing, personal needs for adult recipients and household supplies" for one adult person without dependents is set at $213.40, an amount that was much referred to in the course of argument, since the respondent is such a person. The Trial Judge found that the Province's policy as to the quantum of recovery in the case of overpayments was to recover 5% of the total allowance, or the whole of that portion of the allowance intended to cover "personal requirements", whichever is less (Appeal Book, IV, at page 684).
The respondent is a resident of Manitoba who qualifies for social assistance under the SAA
because of lifelong disabilities, including severe epilepsy, which render him unable to provide for himself. He was declared to have received overpay- ments under the Act on three separate occasions, the first for $207.70, the second for $109, the third for $796. The third overpayment was declared because of a Provincial Employment Program ("PEP") grant which had been given to him for the purpose of developing a small retail business in leathercraft and related activities, in spite of the fact that the grant was in no way intended to supplement or provide for his living expenses (Appeal Sbok, IV, at page 533). The respondent testified that he filed 23 appeals to the Social Services Advisory Committee pursuant to subsec tion 9(3) of the SAA, including some 20 appeals of overpayment deductions, but that all of his appeals were dismissed (Proceedings, at page 55). One of his appeals reached the Manitoba Court of Appeal, which unanimously held that the Province was entitled to recover an overpayment, even where the deduction reduced the recipient's allow ance below the minimum level intended to cover "basic necessities": Re Finlay and Director of Welfare (Winnipeg South/West) (1976), 71 D.L.R. (3d) 597 (Man. C.A.). The Court was not asked to consider whether the PEP grant could be taken into account in determining whether there had been an overpayment, nor of course was it asked to consider the terms of CAP or of the 1967 Agreement.
This action was instituted by the respondent in 1982, but was detoured by a lengthy controversy over à motion to strike out the statement of claim on the basis that the respondent lacked standing. The respondent was awarded standing as a public interest litigant by this Court in Finlay v. Minister of Finance of Canada, [1984] 1 F.C. 516, and also by the Supreme Court of Canada in Finlay v. Canada (Minister of Finance), [1986] 2 S.C.R. 607.
When the action was finally heard at trial, the Trial Judge concluded as follows (at pages 56-60):
It would seem to me that a person who is receiving a sum of money which, at the very best, would only cover his or her basic
needs, would suffer undue hardship if, by the mere fact that a sum is being deducted, he or she is no longer being provided with sufficient funds to cover the basic needs of the individual.
In referring to the issue of deductions for the recovery of overpayments, Mr. Sexsmith [the Director of Field Operations for Social Allowance Operations for the Province] agrees that as a result of these overpayment deductions, there are some people in the Province of Manitoba who are not receiving a portion of what's calculated to be their total needs, total basic necessities. The witness admits that the Province of Manitoba, by making deductions, causes a recipient hardship but tries to avoid causing undue hardship. Trying to avoid causing undue hardship is not sufficient. The Province must avoid causing undue hardship. As I have stated and now repeat, I have difficulty in distinguishing hardship and undue hardship when the result is a lack of basic requirements such as food or shelter or clothing. I am satisfied that a lack of basic requirements causes undue hardship. A lack of budgetary requirements, that is, care in a home for special care, travel and transportation or the other items listed in ss. 2(b) to (h) of CAP may be considered hardship and not undue hardship. A lack of the items listed under s. 2(a) causes undue hardship.
"Q. So it is likely that there are people in this province today who are not receiving their personal needs allocation as a result of these deductions, and have no way of making that up otherwise?
A. Well they're not receiving a portion of what's calculated to be the total needs.
Q. Total basic necessities?
A. Yes.
Q. And you can't say that those people who are missing some of their basic necessities of life are able to make that up through their excess assets in any way?
A. No, I can't say that.
Q. Because there is no policy written down that says you can only put these deductions in place when there are excess assets or excess income?
A. No, we don't have any such policy. The only policy we have is to allow the discretion to recover a lower amount at the discretion of the director if it would create hardship.
Q. Well, in fact you allow hardship, don't you, sir? It is
undue hardship you do not allow. Is that a fair
statement?
A. That's correct.
Q. Or try not to allow, correct?
A. That's correct."
(Questions and answers 301, 302, 303, 304, 305 and 306,
pages 145 and 146, transcript)
The issue is to determine, from the evidence submitted
whether the Province of Manitoba breached its agreement ...
with the Government of Canada by effectively not supplying to recipients a portion of what was calculated to be their total basic necessities. The issue is, as well, to determine if there is a breach of the agreement by the Province of Manitoba by the mere fact that the Province allows municipalities to set their own rates for what are considered "basic necessities" where each municipality can set at a different rate.
The evidence is such that I am satisfied that the Province of Manitoba, by deducting a sum of up to 5% of the basic needs of a social allowance or welfare recipient deprives that recipient of his or her basic needs causing a breach in the agreement between the Province of Manitoba and the Government of Canada. I well understand that a method should and must be found to ensure that recipients such as the present plaintiff do not abuse the system to obtain overpayments. The solution to this problem is a political one to be determined by the legisla ture of the Province and by Parliament.
The evidence of Mr. Sexsmith seems to be very clear when, after being questioned by myself, he finally, although reluctant ly, admitted that by the Province recovering a portion of the overpayment from the sum paid per month, to a recipient of allowance or welfare, that person is or may well be denied some of that individual's basic needs. This would seem quite obvious. A recipient such as the plaintiff receives a sum of $213.40 per month for his basic requirements. If a part of that is being denied him for any particular month, then, for that months, his basic requirements are not met if he has no other financial resources. All the evidence indicated that when deductions were being made, Finlay had no other financial resources.
I am satisfied that when an individual is receiving the minimum amount of assistance to cover the basic requirements and some of that amount of money is being withheld to repay an overpayment more than mere "hardship" is caused. It is undue hardship that is caused to a person who may not have sufficient funds to feed himself or at least to look after himself with the bare necessities one requires. There is really no difference between hardship and undue hardship once a recipi ent of social allowance or welfare is lacking basic requirements.
Counsel for plaintiff submits that there exists a breach of the Canada Assistance Plan when, as in the present case, the Province of Manitoba allows its municipalities to set its own rates of assistance. I am not in agreement with the submission. If a municipality, in setting the rates of welfare to be paid sets a rate that meets the basic requirements in that municipality there is no breach. I am satisfied that the province does not, in virtue of the CAP or ... the agreement between the Province of Manitoba and Canada, have to set the rate of welfare payment by a municipality nor does it have to expressly approve the rate. So long as the test for determining basic necessities in a municipality is equivalent to that found in the Social Allowance Act, then there can be no breach of CAP nor of the agreement between the Province and Canada. This is apparent from the Municipal Act enacted by the Province of Manitoba under Part
VII Municipal Assistance Division 1 Aid to Needy Persons under the heading Definitions:
"450(1) Subject to Rule 1 set out in Schedule 7, in this Division
`assistance' means things, goods and services that are essen tial to a person's health and well-being, including food, clothing, shelter, household and personal requirements, medi cal, hospital, optical, dental and other remedial treatment, care and attention, and an adequate funeral on death; (`besoins essentiels')
`municipal assistance' means assistance provided by a munic ipality to a person in need who is a resident of, or found in, the municipality; (`aide municipale')
`person in need' means a person who lacks the basic necessi ties and includes a dependant of a person in need. (`personne nécessiteuse')"
Furthermore, I am satisfied that since the administration services of CAP are left to the province, the province can allow a municipality to set its own rates of welfare assistance provid ing the proper needs test is applied. No evidence was made to show that the municipalities are not using a proper needs test.
Counsel for Canada in his final submission states that "basic requirements" under CAP and the concept of "basic necessi ties" under the Social Allowance Act are different. He contends that those items listed in the Social Allowance Act Schedule "A" as "basic necessities" include things beyond the definition of "basic requirements" in CAP. He therefore submits that even if a recipient may be deprived of "basic necessities" under the Social Allowance Act (as admitted by Mr. Sexsmith) it is not necessarily true that he is thereby deprived of "basic requirements" under CAP.
It may be correct to say that "not necessarily" one may be deprived of "basic requirements" under CAP but the evidence indicates to me from the testimony of Mr. Sexsmith that the denial of some "basic requirements" does take place when a part of an overpayment is recovered. The evidence of Mr. Sexsmith leads me to believe that the items found under "basic necessities" in the Social Allowance Act and not included in "basic requirements" are usually items paid for directly by the province to a third party. This payment is not made to the recipient. Therefore, if such a recipient receives less cash because of an overpayment, he is being deprived of some "basic requirements" as listed in CAP.
Much was said by counsel for Canada and the Province as to the "fairness" of the system. They submit that there is provi sion in the Social Allowance Act for appeal of any deduction for overpayment. The evidence is such that Finlay has certainly availed himself of this process.
I do not have any disagreement with counsel when they say that the system is fair in that it allows appeals from decisions concerning recovery of an overpayment. That is not the issue. The issue is the decision to withhold sums of money from the monthly allowance as a result of an overpayment which causes a recipient not to have sufficient funds for his "basic require ments". A decision not necessarily made after a recipient has lodged an appeal but made by a case worker who has no discretion in determining if a lesser amount should or should not be deducted for the overpayment.
A recipient who, through his own fault, whether by not telling the truth or for some other reason receives an overpay- ment should be penalized. Section 22 of the Social Allowance Act clearly allows for such a penalty.
Conclusion
I therefore find that by the recovery of overpayments made to the plaintiff there was a breach of the agreement between the Province of Manitoba and the Government of Canada. I understand that the Province of Manitoba had stopped the recovery for overpayment from Finlay leaving a balance still owing but which balance was forgiven by the Province.
I am also satisfied that a recovery of a part of an overpay- ment from a recipient who has no other source of income than that received from the provincial social allowance or municipal welfare other than pursuant to s. 22 of the Social Allowance Act would be contrary to the existing agreement.
In conclusion, I find that payments of contributions by the Minister of Finance and certificates , by the Minister of Nation al Health and Welfare pursuant to s. 7(1) of the Canada Assistance Plan (CAP) to the Province of Manitoba are illegal so long as the Social Allowances Act continues to authorize reducing an allowance below the level of basic requirements to collect debts for 'overpayments and I order the Minister of Finance to refrain from making any further payments to the Province of Manitoba pursuant to the Canada Assistance Plan or its agreement filed as Exhibit 1-4 so long as the Social Allowances Act continues to authorize reducing an allowance below the level of basic requirements to collect debts for overpayments.
This judgment shall not become executory for 31 days from today's date or, in the event of an appeal, shall not become executory until final judgment by the Federal Court of Appeal.
As previously stated, the overpayment to Mr. Finlay was clearly caused by deliberate actions of Finlay himself. He received sums of money, on three different occasions, when he should not have. He was the author of his own misfortune.
For these reasons, I am not prepared to award costs to Finlay. There shall be no order as to costs.
The Attorney General of Manitoba ("Manito- ba") and the National Anti-Poverty Organization ("NAPO") were intervenors on both the 'appeal
and the cross-appeal. The Attorney General of Saskatchewan ("Saskatchewan"), the Ministry of Community and Social Services of Ontario ("Ontario") and Le Procureur Général du Québec ("Québec") were intervenors as to the appeal alone.
* * *
The first matter in issue was the object of CAP, as stated in the preamble to the Plan. The respondent and NAPO emphasized the first part of the recital: "recognizing that the provision of adequate assist ance to and in respect of persons in need and the prevention and removal of the causes of poverty and dependence on public assistance are the con cern of all Canadians" [Emphasis added.] The stronger expression of the adequacy of assistance to persons in need as the object of the statute was that of NAPO, which asserted the following prin ciple of statutory, construction as applied to CAP: "faced with general language or contending inter pretations due to ambiguity in statutory language, the Court will favour that interpretation which best assures adequacy of assistance to persons in need" (Factum, paragraphs 15 and 37). In fact NAPO was prepared to describe CAP as "a Charter-like document of basic rights designed to protect persons in need" (Factum, paragraph 78).
The appellant and Manitoba, on the other hand, stressed the second part of the recital in the preamble: "the Parliament of Canada . . . is desirous of encouraging the further development and extension of assistance and welfare services programs throughout Canada by sharing more fully with the provinces in the cost thereof' [Emphasis added.] On this view the Federal Gov ernment had only twelve clients: the ten provinces, and the two territories.
This issue over the object of the statute is resolved, it seems to me, as soon as one looks at the relative jurisdictions of the parties. It was common ground that the area- of public assistance and welfare services was one that fell under the consti-
tutional competence of the provinces. The only constitutionally permissible role for the Federal Parliament, therefore, was to advance funds to the provinces to assist them in carrying out their responsibilities. As it was put by Culliton C.J.S. in Re Lofstrom and Murphy et al. (1971), 22 D.L.R. (3d) 120 (Sask. C.A.), at page 122, CAP "in no way restricts the legislative competence of a pro vincial Legislature in the field of social assist ance." Parliament's motivation may well have been to provide adequate assistance to the needy, but the object of CAP was the more modest goal of contributing to provincial costs with respect to such assistance. The Act is therefore not one in respect of public assistance, but as its full title indicates, "An Act to authorize the making of contributions by Canada toward the cost of pro grams for the provision of assistance and welfare services to and in respect of persons in need."
Nevertheless, although full jurisdiction remains with the provinces as to public assistance, in sec tion 6 CAP clearly establishes certain conditions to which, as section 7 says, all CAP payments are subject. Subsection 6(1) spells out provisions that must be included in federal-provincial agreements, and subsection 6(2) lists seven undertakings that provinces must enter into in their respective agree ments. Paragraphs (a) and (b) of subsection 6(2) are at the heart of the controversy in the case at bar. By paragraph (a) a province must agree that it will provide financial aid to every person in need "in an amount or manner that takes into account the basic requirements of that person".
"Basic requirements" and "persons in need" are both defined in the definition section, but in suf ficiently general language that it is clearly left to each province to determine in concrete terms what are the basic requirements of persons in need. As I read section 6, it also respects the constitutional jurisdiction of the provinces.
The verbal phrase "takes into account" is, how ever, one that requires exact definition, since it can mean either "consider" or "meet". The French version is of no help: dans une mesure ou d'une manière compatibles avec ses besoins fondamen- taux. The word compatible, which has a meaning something like the English "compatible," is obvi ously used in a strained and inexact way. More over, in the very next line, in paragraph (b), "will ... take into account" is expressed by tiendra compte. This variation in French expressions pro vides no help in understanding the exact sense of the phrase.
A person may certainly take something into account without entirely adopting it. As used with a person, mere consideration may well be the predominant meaning. But here the phrase is "an amount or manner that takes into account his basic requirements". For me this phrasing has more the meaning of "fulfil" or "meet", since it is hard to see how an amount, unlike a person, could take something into account without more or less satisfying it. On a textual basis, therefore, I am inclined to the view that the amount of financial aid must be such as to enable the recipient to meet his/her basic requirements (the exact amount of the aid obviously depending on the recipient's income and resources).
It seems to me that this interpretation also makes more sense of the sum total of paragraphs (a) and (b). Paragraph (a) requires the payment of financial aid in an amount meeting "basic requirements"; paragraph (b) provides for a needs test by subtracting a person-in-need's income and resources from his "budgetary requirements". Since budgetary requirements is defined by sub section 2(2) of the CAP Regulations to mean "basic requirements" plus other items and services determined as "essential" by the provincial author ity, paragraph (b) has a broader reach than para graph (a), and on the alternative interpretation of paragraph (a), it seems to me that (a) would be redundant.
I should also observe that the concept I have just interpreted in paragraph (b) as "subtract" is also expressed in the text by the words "take into account". Again, it seems to me that "take into account" requires that full value be given to both the person's "budgetary requirements" and "the income and resources available to him to meet them".
On this interpretation, paragraph (b) specifies the manner of computation to be employed in arriving at the financial aid to a person in need provided for by paragraph (a), viz. the subtraction of available income and resources from budgetary requirements.
As I have emphasized, the interpretation I adopt in no way lessens the fundamental jurisdiction of each province to determine how to quantify the "basic requirements" of a person in need. Manito- ba has established, in Schedule A to section 5 of the Social Allowances Regulations, a scale for the costs of what it calls "basic necessities", according to the number of dependant adult persons and the number and ages of the children. Other provinces, no doubt, establish different scales since the prov inces are not limited as to their judgment of what is required to sustain a person in need. All they are limited by is CAP's condition that, having estab lished a level of financial aid, they not then decrease that aid below that person's basic requirements.
The issue as to the recapture of overpayments is fudged by the fact that in the SAA Manitoba "does not use either of the federal terms "basic require ments" or "budgetary requirements", but instead makes use of the new phrase "basic necessities", which is defined in sections 1 and 2 of the SAA. It was argued that since the SAA authorizes the payment of "basic necessities", which are said to be. broader than "basic requirements", there is still an excess over the federally stipulated minimum from which deductions for overpayments can be taken without infringing upon that minimum. In other words, the deductions would be taken from non-mandatory requirements. However, particu larly if the condition as to "basic requirements" in paragraph 6(2)(a) of CAP is coupled with the
condition as to "budgetary requirements" estab lished by paragraph 6(2)(b), I find no higher-than- the-federal standard in the Manitoba legislation. Both the federal "budgetary requirements" and Manitoba's "basic necessities" include food, cloth ing, shelter, health care services, funerals and "personal requirements".' Indeed, the federal con cept is slightly larger in that it includes "pre- scribed items incidental to carrying on a trade or other employment and other prescribed needs of any kind" and "travel and transportation". Of course, a province is not required to provide for all of these budgetary requirements, since by subsec tion 2(2) of the CAP Regulations the -extent of provincial incorporation of federal budgetary requirements is left to the province for decision. But given Manitoba's adoption of ' budgetary requirements like "essential surgical, optical, dental, and other remedial treatment care and attention", I fail to find any surplus over the federally required minimum from which recovery could take place without imperiling that minimum. The Province's definition of "basic necessities" is only the fulfilment of the federal concept of "budgetary requirements". A drop below basic necessities is therefore an infringement of para graph 6(2) (b).
' "Personal requirements", which are included in the defini tion of "basic requirements" in section 2 of the CAP, are defined in subsection 2(2) of the CAP Regulations to mean "items of a minor nature ... that are necessary in day to day living to a person's health or well-being". It may be presumed that the phrasing of section 2 of the SAA, "such things, goods, and services as are essential to his health and well-being» [Emphasis added.] is intended to include personal requirements in basic necessities.
In the specific case of the respondent, the sum of $213.40 is not even for all basic requirements, but, as indicated supra, only for "food, clothing, per sonal needs and household supplies". This amounts to an exact correlation with four of the seven classes of the federal basic requirements, but excludes shelter, fuel and utilities. Thus, at least as far as that sum is concerned, Manitoba cannot be heard to argue that any amount less than $213.40 could satisfy its obligations under CAP.
Subsection 20(3) of SAA does not in terms respect the federally imposed minimum, since it allows the deduction of an amount "that would not cause undue hardship to the recipient". As the learned Trial Judge put it (at pages 56-57):
I have difficulty in distinguishing hardship and undue hardship when the result is a lack of basic requirements such as food or shelter or clothing. I am satisfied that a lack of basic requirements causes undue hardship. A lack of budgetary requirements, that is, care in a home for special care, travel and transportation or the other items listed in ss. (2)(b) to (h) of CAP may be considered hardship and not undue hardship. A lack of the items listed under s. 2(a) causes undue hardship.
In other words, the standard the Province is really required to meet is not the subsection 20(3) stand ard of undue hardship. Whatever is meant by "undue hardship", that concept is not directly relevant here. It is rather the standard CAP imposes as a condition, viz., the meeting of basic requirements, that must be fulfilled.
There is no evidentiary basis in this case for pronouncing on the extent to which Manitoba has actually made deductions below the level of basic requirements in collecting debts for overpayments, nor is there any need to do so. All that is necessary to decide on this appeal is whether the test Manitoba uses in so doing meets the conditions of CAP. In my opinion it does not.
Saskatchewan, Ontario, and Quebec argued that it was inappropriate to assess the adequacy of the subsection 20(3) standard for overpayment deduc tions by considering a single month in isolation. After all, it was contended, viewed in a long enough time span, the recovery process merely takes back from a recipient of assistance the exact amount of the excess in payments • he received. In other words, there is an exact set-off, as seen over a longer period. But it must not be imagined that persons in need have continuing access to a surplus pool of income remaining after their basic require ments have been satisfied, and by paragraph 6(2)(b) of CAP it is only the "income and resources available" to a person in need which can be taken into account. Not only are human needs not so neatly categorized and restrained, but the unpredictable, even arbitrary, computations of overpayments in the case of the respondent at bar show how impossible it would be for a recipient to plan his budget rationally in relation to such adventitious events. Moreover, it is Manitoba itself that has adopted a monthly unit of computation for payment. Why should it have the option, in the case of recapture, to recover over, say, a ten-year period what has perhaps been received in a single month?
Saskatchewan, Ontario and Quebec also said that it would be illogical to forbid a province from recovering overpayments when it could achieve the same effect by simply lowering its assessment of basic requirements in the province by 50%, or indeed by any other proportion of the current level. But whatever powers a province has in this respect would have to be exercised generally, and not in relation to a particular recipient. It can hardly be supposed that a province would lower its general rate to strike at a particular recipient or recipients, or for any purpose other than a general and bona fide one.
To hold that a province does not have the right to recover overpayments from recipients of assist ance on the basis of subsection 20(3) or on any basis that does not satisfy the conditions of the Canada Assistance Plan admittedly renders dif ficult the recovery of overpayments, a recovery which is in effect forced upon the province by the
Federal Government. 2 Of course, a province will always have a remedy in the case of fraud,' or where the recipient has access to other income or resources. But it must not be blithely supposed that it is necessarily in the public interest to bleed those who live at or below the poverty line as a purgative for social health, even if the bleeding is only a little at a time and only once a month. Such attempted disincentives to abuse may well be as socially harmful as the reputed disease.
In one respect I believe this Court on appeal must interfere with the discretion of the Trial Judge, on the principle of Osenton (Charles) & Co. v. Johnston, [1942] A.C. 130 (H.L.). The enjoin ing of all payments to Manitoba under CAP would not only jeopardize the entire social allowances program in the province, but would also cut off federal funding for all programs cost shared under CAP, including child welfare. Such a consequence would in my opinion be totally out of proportion to the mischief sought to be remedied by the respond ent. Moreover declarations are invariably honoured by governments and I see no necessity for other relief.
In the result, I would dismiss the appeal as to the declaration and allow it as to the injunction. The judgment of Teitelbaum J. should therefore be varied to read that payments of contributions by the Minister of Finance and certificates by the Minister of National Health and Welfare pursuant to section 7 of the Canada Assistance Plan to Manitoba are illegal so long as the Social Allow ances Act continues to authorize reducing an allowance below the level of basic requirements to collect debts and so long as Manitoba permits its
2 Manitoba's overpayment recovery plan was approved by the Federal Government and effectively included in the 1967 Agreement.
3 I have in mind fraud charges under the Criminal Code or quasi-criminal charges under the SAA.
municipalities to establish their own rates of assist ance independently of the provincial authority.
* * *
The cross-appeal relates to the setting of rates of social welfare by Manitoba municipalities and to
costs.
It was said in argument that Manitoba is one of three provinces with a two-tier system of assistance and welfare and the only one that does not require provincial approval of rates set. Among its munici palities the City of Brandon is apparently the only one that establishes a rate as high as that of the province.
The Trial Judge held on the question of rate-set ting by municipalities (at page 58):.
I am satisfied that the province does not, in virtue of the CAP or ... the agreement between the Province of Manitoba and Canada, have to set the rate of welfare payment by a munici pality nor does it have to expressly approve the rate. So long as the test for determining basic necessities in a municipality is equivalent to that found in the Social Allowances Act, then there can be no breach of CAP nor of the agreement between the Province and Canada.
Furthermore, I am satisfied that since the administration services of CAP are left to the province, the province can allow a municipality to set its own rates of welfare assistance provid ing the proper needs test is applied.
There is, perhaps, no reason in principle the Province could not have different rates for differ ent municipalities or delegate the rate-setting to the municipalities themselves, provided that the level of , basic requirements were respected. The numerous references in CAP itself to municipali ties shows that they were intended to be a part of the system.
However, the appellant on the cross-appeal raised a much narrower issue, arguing that munic ipal rate-setting amounts to a major breach of the Province's undertaking to provide all persons in need in the Province with their basic requirements
as determined by the authorized provincial authority.
The definition of "person in need" in section 2 of CAP provides for a needs test "established by the provincial authority". That term is in turn defined as "the provincial Minister or other offi cial or body specified by the province" in the relevant agreement. The 1967 Agreement in para graph 1(b) states that "The Minister of Welfare is the provincial Minister charged with the adminis tration of the provincial law".
The respondent on the cross-appeal and Manito- ba argued that CAP effectively left the designation of the provincial authority to the province, and that designation was carried out by the 1967 Agreement. They did not deny that the Minister of Welfare neither set nor approved the municipal rates, and admitted that the municipal rates were established on a different basis from those of the Province, but they pointed out that even the pro vincial rates were set not by the Minister, as required by the Agreement, but by the Lieutenant Governor in Council on the recommendation of the Minister. In short, one violation was no worse than the other. In effect, it was said, this is a matter of contract, and since the two contracting parties are satisfied, no one else has a right to complain. The dictum of Spence J. for the majority in LeBlanc v. City of Transcona, [1974] S.C.R. 1261, at page 1268, an action against a Manitoba municipality for supplementary social welfare, was cited as authority:
It may be argued that the Province of Manitoba when paying a proportion of the municipal assistance paid out by the City of Transcona is not providing for persons in need in accordance with that requirement in the Canada Assistance Plan in that the schedule applied is not a schedule made by the province. That, in my view, is a matter which must be settled between the Province of Manitoba and Canada and can have no application to an appeal by the present appellant against the refusal of the City of Transcona to grant him a municipal allowance.
It would seem to me, however, that in the case at bar any question as to whether the cross-appel lant has the right to challenge even matters of contract between the Federal Government and the Province has been preempted by the Supreme Court of Canada, which recognized the cross- appellant as having public interest standing for purposes of this case: Finlay v. Canada (Minister of Finance), supra.
NAPO also argued in the alternative that the LeBlanc case, which held that Manitoba munici palities could not be obliged to pay the provincial rate of assistance where it is higher than their own, should be overruled. However, in my opinion this Court lacks the power to do so, and I need not deal further with this issue.
I would, however, issue a declaration that all social assistance rates under the Canada Assist ance Plan and the 1967 Canada-Manitoba Agree ment are required to be established by the desig nated provincial authority. The arguments against an injunction as well as a delaration are the same as those on the main appeal.
Since I do not agree with the Trial Judge that the overpayments to the respondent/cross-appel lant were caused by his own deliberate actions, I would grant him his costs both below and on the combined appeal/cross-appeal. Moreover, as he was recognized as having standing as a public interest plaintiff, I would grant those costs on a solicitor-client basis. One-half of these costs should be paid by the appellants, the other half by the Attorney General of Manitoba.
The judgment in this case should be suspended pending appeal, pursuant to Rule 341A(4) [Fed- eral Court Rules, C.R.C., c. 663 (as enacted by SOR/79-57, s. 8)].
PRATTE J.A.: I agree. HUGESSEN J.A.: I agree.
 You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.