SCC Releases Decision Defining the Scope of Core Policy Decisions vs. Operational Decisions

On October 21, 2021, the Supreme Court of Canada in Nelson (City) v Marchi, 2021 SCC 41, affirmed British Columbia’s Court of Appeal decision and ordered a new trial to determine the standard of care of the City of Nelson (the “City”) in a negligence lawsuit brought by Ms. Taryn Joy Marchi (“Marchi”).

Facts

Since 2000, the City relied on a policy for street and sidewalks snow removal (“Policy”). The Policy sets priorities for several areas, including the downtown core, but did not specifically mention clearing parking stalls or creating snowbanks. In addition to the Policy, the City also has several unwritten practices that include clearing the streets first and removing the snow after all snow plowing is completed. The City experienced a heavy snowfall on January 4th and 5th, 2015. On January 6, 2015, Marchi injured her leg as she attempted to cross a snowbank created by the City’s employees when clearing snow in angled parking stalls on Baker Street, located in the City’s downtown core. The downtown core was completely cleared of snow, and all snowbanks were removed by January 9, 2015.

Duty of Care Framework

A significant portion of the Supreme Court’s decision was spent addressing the duty of care framework and the test used to determine when a duty of care arises under the broad rubric of negligence law, including allegations of negligence against the government. The Supreme Court then reaffirmed its decision in Just v British Columbia, [1989] 2 S.C.R. 1228 (“Just”), where it was “…determined that public authorities owe road users a duty to keep roads reasonably safe, but recognized that the duty was subject to a public authority’s immunity for true policy decisions.” In this case, Ms. Marchi established that her circumstances fall within the scope of the categories where a duty of care has been recognized. Moreover, the harm suffered by Ms. Marchi was reasonably foreseeable.

Core Policy Decisions vs. Operational Decisions

In Just, the Supreme Court recognized that the traditional tort law duty of care applies to a government agency in the same way that it applies to an individual. However, certain policy decisions are shielded from liability for negligence as long as they are not irrational or made in bad faith. Since Just the lower courts have struggled to distinguish between policy and operational decisions, mainly because the factual nature of a decision likely varies from case to case. To be clear, if the decision is determined to be a policy decision, there is an immunity from liability.

The Supreme Court elaborated on what core policy decisions entail and affirmed that the analysis involves weighing competing economic, social, and political factors and conducting contextualized analyses of information. To quote the majority, “…(t)hese decisions are not based only on objective considerations but require value judgments — reasonable people can and do legitimately disagree”. The court added that public authorities must be allowed to “adversely affect the interests of individuals" when making core policy decisions without fear of incurring liability.

Conversely, operational decisions are usually left to the discretion of individual employees or groups of employees. These decisions typically do not have a sustained period of deliberation but reflect the exercise of an agent or group of agents’ judgment or reaction to a particular event. Operational decisions that are simply a practical implementation of governmental policies or the performance or carrying out of a policy fall outside the scope of core policy decisions and open a public authority to liability for negligence.

Assessing the Nature of the Government’s Decision

The Supreme Court offered a clear framework for lower courts to structure their analysis when determining whether a government decision is a core policy decision. While weighing these factors, the focus must be on the purpose of the immunity and the nature of the decision. However, no aspect is necessarily determinative alone, and more factors may be developed.

It is essential to highlight that the Supreme Court’s primary concern in creating this analysis recognized that the executive, legislative, and judicial branches of government play distinct and complementary roles in Canada’s constitutional order, and ensuring that no branch oversteps its bounds and each show proper deference for the legitimate sphere of activity of the other. The factors are as follows:

1. The level and responsibilities of the decision-maker. Decisions made by high-level decision-makers or by persons with more job responsibilities will usually be considered core-policy decisions. Conversely, decisions made by employees who are far removed from democratically accountable officials or who are charged with implementation are less likely to be core policy.
2. The process by which the decision was made. Decisions made after extensive debate, intended to have a broad application and be prospective in nature, are more likely to be considered a core policy decision. On the other hand, the more a decision can be characterized as a reaction of an employee or groups of employees to a particular event, reflecting their discretion, and with no sustained period of deliberation, the more likely it will be reviewable for negligence.
3. The nature and extent of budgetary considerations. Decisions concerning budgetary allotments for departments or government agencies will be classified as policy decisions. On the other hand, the day-to-day budgetary decisions of individual employees will likely not raise separation of powers concerns.
4. The extent to which the decision was based on objective criteria. The more a government decision weighs competing interests and requires making value judgments, the more likely separation of powers will be engaged because the court would be substituting its own value judgment. Conversely, the more a decision is based on "technical standards or general standards of reasonableness," the more likely it can be reviewed for negligence.

The Supreme Court offered two clarifications and provided a framework to structure the analysis of a government’s decision. First, the mere presence of budgetary, financial, or resource implications does not determine whether a decision is core policy. Second, it recognized the wide range of meanings of the word “policy” and affirmed that the fact that the word “policy” is found in a written document or that a plan is labelled as “policy” may be misleading and is certainly not determinative of the question. The focus must remain on the nature of the decision itself rather than the format or the label for the decision.

In deciding this case, the Supreme Court applied the analysis above, and concluded that the relevant City decision was not a core policy decision immune from negligence liability. It was, in fact, an operational decision flowing from th core policy. Therefore, the City owed Ms. Marchi a duty of care. On standard of care and causation, the Supreme Court ruled that the trial judge’s analysis was tainted by legal errors; thus, it dismissed the appeal and ordered a new trial.

For more information on this decision, please contact Jon P. Rossall Q.C. or another member of the McLennan Ross Municipal Law Group.