In 1990, the federal government decided to cut expenditures and limit the growth of payments made to financially stronger provinces under the Canada Assistance Plan. Under the Plan, the federal government concluded agreements with the provinces to share the cost of their expenditures on social assistance and welfare. Section 5 of the Plan authorized contributions amounting to half of the provinces' eligible expenditures. These agreements continue to be in force so long as the relevant provincial law remains in operation, but may be amended or terminated by mutual consent, or terminated on one year's notice from either party.
British Columbia submitted two reference questions to the Court of Appeal, the second asking whether the terms of the Agreement, the subsequent conduct of the Government of Canada pursuant to the Agreement and the provisions of the Plan give rise to a legitimate expectation that the Government of Canada would introduce no bill into Parliament to limit its obligation under the Agreement or the Plan without the consent of British Columbia. The Court of Appeal answered this question in the affirmative.
- Can legitimate expectations give rise to procedural entitlements?
Sopinka, writing for a unanimous court, stated the federal government did not act illegally in invoking the power of Parliament to amend the Plan without obtaining the consent of British Columbia. He found no support for the position that the doctrine of legitimate expectations creates substantive rights - it merely operates as part of the rules of procedural fairness which can govern administrative bodies. Where it is applicable, it can only create a right to make representations or to be consulted. Moreover, the doctrine does not apply to the legislative process. The government, which is an integral part of this process, is thus not constrained by the doctrine from introducing a bill to Parliament. A restraint on the executive in the introduction of legislation would place a fetter on the sovereignty of Parliament itself. It is fundamental to the Canadian system of government that a government is not bound by the undertakings of its predecessor; to allow the doctrine of legitimate expectations to operate here would derogate from this essential feature of our democracy.
Legitimate expectations do not create substantive rights, merely procedural rights.