Report and Recommendations of the
2000 Judicial Compensation Commission

Table of Contents

A. Appointment and Terms of Reference

B. Conduct of the Inquiry

C. Context of this Inquiry

D. Submissions

E. Criteria

F. Recommendations

Alberta Provincial Judges Compensation Regulation 100/2000 (Appendix 1) ("Regulation") to the Judicature Act established the 2000 Alberta Judicial Compensation Commission ("2000 Commission"). The Regulation sets out the terms of reference for the 2000 Commission including conducting an inquiry respecting:

 "a. the appropriate level of compensation for judges sitting full or part time
      or on a supernumery basis,
  b. the appropriate design and level of judges’ pension benefits of all kinds,
  c. the appropriate level and kind of benefits and allowances of judges, and
  d. such other issues relevant to the financial security of the judges which
      the Commission agrees to resolve"

Section 3 of the Regulation provides that the 2000 Commission consists of one member appointed by the Minister with the agreement of the Alberta Provincial Judges’ Association ("Association") and the Chief Judge of the Provincial Court. J. Bruce Dunlop, FCA, a retired partner of PricewaterhouseCoopers LLP was appointed as the member of the 2000 Commission on May 26, 2000.

The 2000 Commission has been asked to report to the Minister by July 31, 2000. Recommendations are for the period April 1, 2000 to March 31, 2003. The recommendations are binding on the government of Alberta "Government" unless the Lieutenant Governor in Council decides otherwise in writing to the Association with reasons for the rejection or modification of such recommendations in whole or in part.

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Notice of the establishment of the 2000 Commission, the public hearing dates and inviting written submissions was published on June 2, 2000 in the Calgary Herald, Calgary Sun, Edmonton Journal and Edmonton Sun. (Appendix 2) Public hearings were held in the Edmonton Law Courts Building on June 15, 2000 and in the Calgary Court House on June 16, 2000.

Written submissions and two binders of agreed exhibits (Appendix 3) were received from the Government and the Association. A further written submission was received from Judge Michael Horrocks concerning remuneration of supernumery judges. Letters of support for Judge Horrocks’ submission were received from Judge J.P. Jorgensen and Judge William M. Mustard. Judges Horrocks and Mustard attended the Commission’s hearing in Edmonton and Judge Horrocks made an oral submission on the issue. Judge W.E. Kerr attended the Calgary hearing in support of Judge Horrocks’ submission. The Government provided a further written submission relating to payments to supernumery judges during the hearing.

Judge Manfred Delong provided a submission concerning professional allowances.

The Law Society of Alberta provided a copy of their submission to the 1998 Commission indicating it still reflected their position.

Oral presentations were made by counsel for the Government and the Association at each of the hearings.

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This is the second judicial compensation commission in Alberta. The ground-breaking first commission presented its report and recommendations on June 19, 1998. That report includes an excellent historical background to the determination of judges salaries and pensions in Alberta. The 1998 report also includes the historical background of the Provincial Court of Alberta. A further excellent discourse on the evolution of the Court is to be found in the 1999 annual report of the Provincial Court of Alberta; the first such report ever published by the Court.

On August 26, 1998 the Lieutenant Governor in Council issued an order-in-council rejecting with reasons the 1998 commission’s salary recommendations and reducing the recommended pension contribution rate of 9% to 7%. The Association applied to the Court of Queen’s Bench to declare the order-in-council unconstitutional and have the recommendations made binding on the Government. The Court held that the Government’s reasons for rejecting the recommendations did not meet the constitutional standard of "simple rationality" set out by the Supreme Court of Canada in the Provincial Court Judges case. The Court also held that the recommendations became binding on the Government. The Government appealed that decision to the Alberta Court of Appeal. On July 20, 1999 that court held that the appeal should be dismissed.

Some issues concerning pension benefits which were included in an earlier lawsuit by the Association and a number of individual judges against the Government were not resolved by the Supreme Court of Canada’s decision in the Provincial Court Judges case.

On February 1, 2000 in a letter agreement ("the Agreement"), the parties agreed to settle those issues as follows:

"The pension benefits earned by a judge for the period January 1, 1992 to March 31, 1998 shall be calculated and paid without:

The settlement also included the Government’s agreement to pay the Association’s costs incurred in respect of the lawsuit, the 1998 commission and subsequent lawsuit and appeal.

The Association undertook to recommend the settlement to its members and to file Discontinuances of Action on its own behalf and on behalf of the individual judges who consent thereto. I am advised that such Discontinuances have been filed by all except one or two individual judges.

The settlement also dealt with the circumstances if the Government’s application for leave to appeal the 1999 Alberta Court of Appeal decision to the Supreme Court of Canada was accepted. Subsequently, the Supreme Court denied leave to appeal.

The Agreement also included the terms of the joint proposal to the 2000 Commission as follows:

1. The annual salary of a puisne judge of the Provincial Court of Alberta ("a judge") be increased, as of April 1, 2000, to $170,000.00. The additional payments made to the Chief Judge and the Associate Chief Judges will continue at the current levels.
2. The pension contribution made by a judge shall be decreased from 9% per annum to 7% per annum beginning April 1, 2000.
3. The pension accumulation rate for a judge shall be increased to 3% for each year of judicial service earned after April 1, 2000.
4. The solicitor and his or her own client costs, calculated in the same manner as Her Majesty the Queen in right of Alberta and the Lieutenant Governor in Council, compensate their counsel and all reasonable disbursements or at such greater rate or amount as may be fixed by the 2000 Commission, and incurred by the Association in relation to the Judicial Compensation Commission for the year 2000 will be paid by the Government.
5. For judges who retire after April 1, 2000, the penalty for early retirement, on the pension benefits they have or will earn after April 1, 1998, will be the greater of:

1. 3% of those benefits for every year of retirement before the age of 60, or
2. 3% of the benefits for "x" years, where "x" is determined by this calculation: x = 80 - (judge’s age in years + judge’s years of judicial service).

6. Increase full pension ceiling from 66 2/3% to 70% effective April 1, 1998.
7. The recommendations of the 2000 Commission cover the period April 1, 2000 to March 31, 2003.
8. The 2000 Judicial Compensation Committee shall be informed of the inclusion of the pension capping issue as set forth in 1(a) above.
9. It is acknowledged that the parts of this letter which deal with pension issues set out general principles and that it is necessary to incorporate these general principles into the formal pension plan. This task will be discharged in due course.

The joint submission to the 2000 Commission would be made by the Association and the Government simply to assist the 2000 Commission in its work, and in full recognition and acknowledgement that, as required by Canadian constitutional law, the 2000 Commission must be an objective, independent, and effective body which has the power to make a recommendation at variance with a joint submission.

This intended submission on the part of the Association is subject to the Association’s members instructing this course of action. Such instructions will be sought at a meeting of the Provincial Court Judges on February 5, 2000.

The Association is prepared to consent to this particular 2000 Commission consisting of one person, (as opposed to the usual situation of the Commission consisting of one member appointed by the Government, one member appointed by the Association, and a third member being appointed by the other two appointees). The Government will bear the costs of the Commission and the 2000 Commission itself, as well as the cost of gathering, preparing, and presenting the evidence used to support the joint submission".

I am advised that the terms of the settlement and proposal were approved at the meeting of Provincial Court Judges in Red Deer on February 5, 2000.

The Agreement also included a draft of the regulation to establish this Commission and the Association did not agree with Section 31 which is included in the final regulation as follows:

"31(1) If

a. the Lieutenant Governor in Council makes a decision rejecting the
   Commission report or one or more of the recommendations contained in
    the Commission report,

b. the Association brings an application for judicial review of that decision,

c. and the application for judicial review is successful,

The Association’s concern with Section 31 is stated in the Agreement as follows:

I had some concern as to whether any of the terms of or the process surrounding the February 1, 2000 letter with respect to this Commission were in any way not in accord with the principles contemplated for independent judicial compensation commissions in the Supreme Court of Canada’s decision in the Provincial Court Judges case. A submission from Judge Sandra A. Hamilton which was received after the beginning of the hearing in Calgary (i.e. it was late and was not officially accepted by the 2000 Commission) expressed somewhat similar concerns. I have been assured by counsel for the Government and the Association that there are absolutely no grounds for any such concerns with respect to this Commission.

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As described above, in February 2000, the Government and the Association agreed to the following changes in the compensation of Provincial Court judges and have proposed them in their respective submissions to the 2000 Commission:

The Government quantified the cost of the total compensation of 113 judges and masters in chambers would increase from approximately $21 million to $24.3 million, in its submission.

Neither the Government nor the Association proposed changes to any other benefits.

Judge Manfred Delong’s submission dealt with the issue of professional allowances and recommends that "each Provincial Judge be allocated a non-taxable educational allowance of $2,500 per year for the purposes of furthering his or her education by attending conferences and seminars, by buying books and material, and by maintaining memberships in judicial and professional organizations. The recovery of this expenditure should be by expense account submitted through the Chief Judge’s office".

Such annual allowances are presently included by certain other provinces in their compensation programs as follows:

Federally appointed judges are eligible for a non-taxable allowance of $2,500 per year. The May 31, 2000 Federal commission report recommends this amount be increased to $5,000. In Alberta presently only the chief judge receives an allowance which is in the form of an automobile, judicial attire and parking.

The 1998 Commission included the following comments regarding allowances:

Judge Delong makes the point, with which I agree, that expenses for professional development such as courses, seminars, etc. and books are tax deductible to lawyers in private practice and judges should be allowed similar treatment. The Government continues to provide $85,000 annually to the Association for educational conferences.

Judge Horrocks’ submission noted the following reference in the 1998 commission report:

"Supernumery judges currently receive 1/200^th of the annual salary of full-time judges for a full day of sitting and one-half of that amount for one-half day of sitting. The Commission was not requested to and does not make any recommendations for a change"

Judge Horrocks noted the factor quoted was incorrect; supernumery judges were in fact paid on the basis of 1/224^th. This was confirmed in a supplementary submission of the Minister of Justice Relating to Payments to Supernumery Judges. Section 7(a) of the Regulation makes it clear that the 2000 Commission is to consider "compensation for judges full or part time or on a supernumery basis"

Judge Horrocks presents a calculation which suggests full time judges would have about 187 days per year sitting in court. He contends this number is a better comparator for supernumery judges who are not paid for holidays, conferences and chamber days. Judge Horrocks also refers to the Justices of the Peace Compensation Order in Council 174/2000 in which the Government reasoning in support of per diem compensation of part time Justices of the Peace accepted a significant supplement recognizing the absence of pensions and benefits and an allowance for overheads. Judge Horrocks concludes by suggesting that a per diem calculation for supernumery judges based on 1/200^th "would be a lot more equitable" and one based on 1/165^th as for Justices of the Peace "would not be inappropriate".

The Government’s submission explains how the factor of 1/224^th is derived as follows:

"1. There are 261 working days in a year (365/7 x 5).

 2. The Alberta public service uses the 261 working days number to
     establish pay rates for nonpermanent employees.

 3. It is a common practice to increase the per diem rate by sixteen percent
    for non-permanent employees who do not receive statutory holiday pay,
    sick leave entitlements and health care benefits.

 4. The product of 1/261 and sixteen percent is .00444
     (1/261 x 1.16 = .00444) which is the equivalent of 1/224
     (1/224 –  0.00446)."

The Government notes that the per diem rate will rise from $678.56 to $758.91 if the proposed salary of $170,000 is adopted and concludes by saying "There is no need to change the fraction by which an increasing annual salary is multiplied".

I am advised that few other provinces provide for supernumery or part time judges. Saskatchewan’s present per diem rate calculation is based on 1/238^th and Nova Scotia’s is based on 1/248^th.

Federally appointed supernumery judges are clearly in another league. They are eligible for appointment as a supernumery when they have earned full pension (66 2/3%) and they then continue at full salary with a reduced (50%) workload.

On balance, I conclude that the present basis for calculating compensation for supernumery judges should continue.

Judge Horrocks’ submission also included the following suggestion:

"Owing to the method of appointment, re-appointment and scheduling, there is a substantial question of judicial independence, which is clearly beyond the parameters of this Commission; though it might well recommend to the Government the appointment of someone, perhaps a senior member of the Bar, to examine and make recommendations on the status, appointment, re-appointment and use of Supernumery judges".

Since I have received no evidence concerning "a substantial question of judicial independence" I will not make such recommendations and merely repeat Judge Horrocks’ comments here for consideration by the Government.

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Section 25 of the Regulation requires the Commission in making its recommendations, to give every consideration to the following criteria:

2. the need to maintain the independence of the judiciary;
   
   
3. the unique nature of the judges’ role;
   
   
4. the need to maintain a strong court by attracting highly qualified applicants;
   
   
5. how the Alberta compensation package compares to compensation packages in other jurisdictions, having regard to the differences between these jurisdictions in Canada, including the federal jurisdiction;
   
   
6. the growth and decline in real per capita income;
   
   
7. the need to provide fair and reasonable compensation for judges in light of prevailing economic conditions in Alberta and the overall state of the economy;
   
   
8. the cost of living index and the position of the judges relative to its increases;
   
   
9. the nature of the jurisdiction of the court and masters in chambers;
   
   
10. the current financial position of the government; and
    
    
11. any other factors relevant to the matters in issue."

   (a) and (b) the constitutional law of Canada/the need to maintain the independence of the judiciary.

The constitutional law of Canada clearly establishes that the judiciary must be independent of the legislative and executive branches of government. In order to maintain the independence of the judiciary, they must receive a sufficient level of individual compensation as well as support for the institution. This Commission recognizes the fundamental necessity of judicial independence and the need for an adequate and independently determined individual compensation for Provincial Court judges. These points are well covered in the 1998 commission’s report on pages 21 through 24.

In Nunavut, provincial court jurisdiction is exercised by federally appointed judges who receive the federal base salary of $179,200.

Since the 1998 Alberta commission, more recent judicial compensation commission reports have been issued in Quebec – August 4, 1998, New Brunswick – July 30, 1998, Manitoba – June 22, 1998, Nova Scotia – March 26, 1999, Ontario – May 20, 1999, Saskatchewan – December 21, 1999 and, most recently, the federal commission – May 31, 2000.

The current salary levels in the other provinces and territories are of interest:

The current annual salary of federally appointed judges in Alberta is $182,200. The Judicial Compensation and Benefits Commission submitted its report to the Minister of Justice of Canada on May 31, 2000. It is the first federal commission following 1998 amendments to the Judges Act and the Supreme Court decision in the Provincial Court Judges case. Its recommendations cover a four year period from April 1, 2000. Highlights of the report and recommendations are as follows:

• Continued support for uniform salaries nation-wide as "a compromise best serving the broad public interest"
• Continued mandatory annual indexation of salaries as a matter of law
• Retention factors have not played a material part in setting judicial salaries
• Judges requested a salary level of $225,000.
• Government submitted the current level plus indexation was adequate but that the maximum increase that could be justified would be 5.7% as of April 1, 2000 inclusive of indexing (approximately $192,600);
• comparators are;
  
  
  • Salaries of the most senior level of deputy ministers (DM-3)
  • Incomes of the top one-third of lawyers in private practice
  • Remuneration of senior judges in other countries

The commission clearly gave greatest weight to the deputy minister salary level and essentially concluded the information from other countries was not comparable.

• The mid-point salary of 13 DM-3’s is $188,250 plus an over-all average of "at-risk pay" of 8.19% providing a total remuneration of $203,686
• The report noted that "a rough equivalency between the overall remuneration of DM-3’s and the salary level of judges is both proper and in the public’s interest"
• The average income of the top third by income of lawyers aged 44 to 56 who earn more than $50,000 is $342,280 (1997 data)
• Income of lawyers at the 75^th percentile is $230,000 in Canada

• $283,000 in Alberta (highest province)
• $375,000 in Calgary (highest city)

• the conclusions with respect to the adequacy of judicial salaries in relation to the incomes of private practitioners were as follows:

  "i. the total compensation of judges includes a significant pension annuity that has substantial value when a comparison of judicial compensation to the income of private practitioners is undertaken;

  ii. continued use of a uniform national salary scale for puisne judges will have an adverse differential impact in different regions of the country and, therefore, potentially on the ability to attract outstanding candidates to the Judiciary in some areas of the country; and

iii. while judicial salaries should not be set according to the most lucrative legal services market, they must be set at a level which will not have a chilling effect on recruitment by serving as a disincentive to outstanding candidates in the Largest Metropolitan Areas, including those urban centres in which lawyers in private practice realize the highest incomes. They must also be set at a level that does not result in unfairness to those current and future judges residing in larger urban areas".

• The recommended salaries are $198,000 for the year beginning April 1, 2000, $200,000 plus indexing for the year beginning April 1, 2001. For each of the next two years an increase of $2,000 plus indexing.

  The proposed $170,000 salary would bring the Alberta Provincial Court judges up from the current 83% to 93% of the present base salary level of federally appointed judges. If the recommendations of the federal commission are accepted the percentage would decrease to 86%. Put the other way, the present "gap" of 17% would be reduced to 7% but increase to 14% compared to the recommended federal salaries at April 1, 2000. The gap would increase slightly over the subsequent two years with the recommended federal increases of $2,000 plus indexing.

  The joint proposal puts the salaries in Alberta at the same level as Ontario, $170,000, but for the three years from April 1, 2000. Ontario’s next commission will recommend salaries for April 1, 2001 and on. On the basis of recent history it seems likely that Ontario’s salary level will increase. (In Ontario the judicial compensation commission’s salary and benefits recommendations, other than regarding pensions, are binding on the government).

  The 2000 commission agrees with the Association’s submission that the circumstances in Ontario are most comparable to those prevailing in Alberta.

F. Recommendations

Having considered all of the material submitted to the 2000 Commission with respect to the criteria specified in the Regulation, I have concluded that the joint proposal of the Government and the Association is reasonable and accordingly the 2000 Commission recommends the following changes to the compensation of Provincial Court judges and masters in chambers:

For the sake of completeness and certainty, the 2000 Commission also confirms its agreement with and recommends the following pension changes in the Agreement:

During the public hearings the Association added a further point regarding survivor’s benefits to the joint proposal which the 2000 Commission confirms and recommends as follows:

Survivor’s benefits should continue at 75% from April 1, 1998 onwards.

Although not included in the joint proposal, I have concluded from the evidence, including the practice in several other provinces and in the federal jurisdiction, that provision of a professional allowance for Provincial Court judges in Alberta would be a desirable change. Accordingly the 2000 Commission recommends:

As provided for in Section 30 of the Regulation and to confirm a part of the joint proposal in the Agreement the 2000 Commission recommends:

The Government should pay the costs incurred by the Association in making its submissions to the 2000 Commission, calculated in the same manner as the government compensates its external counsel.

In conclusion I wish to express my thanks to T. W. Wakeling, G. D. Chipeur and B. B. Johnston, Counsel for the Minister of Justice and Attorney General for Alberta and to D. O. Sabey, Q.C. and Bradley G. Nemetz, Counsel for the Association for their assistance in the information provided with their written submissions, oral presentations and response to my questions during and after the public hearings.

Also, I thank Ken Hawrelechko, Senior Manager, Strategic Initiatives of Court Services for his and his staff’s support. Finally my thanks to Maria Dodsley and Lynne Tilley of PricewaterhouseCoopers LLP for their long distance typing and faxing assistance in compiling this report.

Respectfully Submitted

J. Bruce Dunlop, F.C.A.

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