Municipalities Take Note – Recent Supreme Court of Canada Decision Sets Framework for Determining Municipal Liability

January 25, 2022

The Supreme Court of Canada (“SCC”) recently addressed the law with respect to government liability in negligence cases.

It is a long standing principle in Canada that public authorities are generally immune from liability for core policy decisions. In Nelson (City of) v Marchi (“Nelson”), the SCC did not dramatically change the law, but rather the Court provided a framework for determining when a decision is one that is a core policy and thus, immune from liability.

Marchi brought a claim for damages sustained while she crossed a snowbank to access a sidewalk. Following a snowfall, the City employees failed to create a clear path to access the sidewalk. The trial judge held that snow removal was a core policy decision; the appellate court overturned the decision and sent the case back to trial. At the SCC, the Court upheld the appellate decision but decided the duty of care element.

The SCC found that the decision to clear snow, in this case, was not a core policy decision, and the City was not immune from liability. First, the Court articulated that the purpose of core policy immunity is to protect decisions “as to the course or principle of action that are based on public policy considerations, such as economic, social and political factors, provided they are neither irrational nor taken in bad faith.”[1] Policy has a wide meaning, and simply using the word “policy” is not enough to create immunity.

Secondly, the Court provided four factors to determine whether a municipal decision was a core policy, and immune from liability:

  • The level and responsibilities of the decision maker: Decisions made by higher level employees or ones closer to the elected official are more likely to be immune than decisions made by lower-level employees.
  • The process by which the decision was made: Decisions involving deliberation, debate and public input are more likely to be immune than decisions made involving employee(s) discretion.
  • The nature and extent of budgetary considerations: Decisions regarding budgetary allocations for departments or agencies are more likely to be immune than day-to-day budgetary decisions.
  • The extent to which the decision was based on objective criteria: Decisions involving the weighing of competing interests and value judgments are more likely to be immune than decisions made on technical or general standards.

The rationale behind core policy immunity is “protecting the legislative and executive branch’s core institutional roles and competencies is necessary for the separation of powers” and this must serve as an overarching principle.

PEI Municipal Government Act (“MGA”)

The MGA does provide a limitation on a municipality’s liability for injuries or damages caused by snow.

247(6) Liability for Snow, etc.

A municipality is liable for an injury to a person or damage to property caused by snow, ice slush or water of any form or kind on or adjacent to a street, sidewalk or trail, only where the municipality is grossly negligent.[2]

This section provides that liability shall only arise where the municipality is grossly negligent, thus creating a much lower standard of care. British Columbia does not have a similar provision, and so the key for cases in Prince Edward Island will be whether the facts fall clearly within the scope of section 247(6).

What does this mean for Municipalities?

Nelson is important because it sets out a framework for determining if decisions made by municipalities will be shielded from liability. The Nelson factors are to be used to evaluate whether or not a decision is a core policy.

Key takeaways for PEI municipalities are:

  • Simply because a municipality considers their policies or procedures to be a core policy, does not mean that they will be considered as such by the courts;
  • When a decision is made by one employee using their discretion, it is unlikely that core policy immunity will apply;
  • The more involved elected officials are in decisions, the more likely they are to attract core policy immunity.

It is not yet clear whether this decision has eliminated the uncertainty around core policy immunity. Even so, this case does provide some food for thought for municipalities when making decisions.

This article was written with the assistance of Sydney Gallant, an articling clerk working at Cox & Palmer.

[1] This definition comes from the SCC’s previous decision in R v Imperial Tobacco, 2011 SCC 42 at para 90.

[2] Municipal Government Act, SPEI 2016, c 44, s 247(6).

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