Name of Case: Council of Canadians with Disabilities v. Via Rail Canada Inc.

Supreme Court Panel: Justices Rosalie Abella, Beverley McLachlin, Michel Bastarache, Louis LeBel and Louise Charron (majority); Justices Ian Binnie, Marie Deschamps, Morris Fish and Marshall Rothstein (dissenting)

Court appealed from and date of judgment: Judgment of the Federal Court of Appeal dated March 5, 2005

Facts: The case began in 2000 when VIA Rail paid $29.8 million to purchase 139 rail cars which were no longer required for overnight service through the Channel Tunnel. The Council of Canadians with Disabilities applied to the Canadian Transportation Agency under s.172 of the Canada Transportation Act complaining that many features of the cars presented undue obstacles to the mobility of persons with disabilities. Upon investigation the Agency identified a number of obstacles and issued a preliminary 150-page decision in March 2003 asking for specific evidence from VIA to demonstrate why the obstacles were not undue. The Agency also set out remedial options and sought input from VIA regarding their feasibility and costs.

VIA responded with a three-page letter stating that it was unreasonable to require modification of the cars; it included some, but not all of the cost estimates sought by the Agency, without any supporting evidence. In June 2003 the Agency advised VIA that its response was unverifiable as it lacked detail and feasibility information. The Agency reissued its previous order, giving VIA additional time to prepare a response. VIA stated in reply that it had neither the time, expertise nor funding to respond any further. VIA did not seek additional time, and requested that the Agency render its final decision based on the information before it. The Agency did so, ordering VIA to implement remedial measures, all of which had been identified in its June 2003 order. The main changes were to be made to 30 cars so that each daytime train would have one wheelchair-accessible car, and each overnight train would have one car with wheelchair-accessible sleeper facilities.

VIA obtained leave to appeal to the Federal Court of Appeal. In support of its application, VIA filed an expert report, prepared less than 40 days after the Agency's final decision, which estimated that the cost of implementing the order would be between $48 and $92 million, although it had earlier given the Agency an estimate of $35 million, which the Agency found to be grossly overstated.

Case History: VIA raised several issues on appeal, including whether the Agency “committed errors of law and jurisdiction by undertaking an examination of an alleged design problem … rather than examining an alleged physical problem encountered by an actual passenger with disabilities”, and whether the Agency’s undue obstacle analysis was legally flawed. 

The Federal Court of Appeal held that, having regard to key factors which the Agency failed to consider, the Agency erred in concluding that the obstacles presented by the new cars were undue. The appeal court also found that the Agency had breached VIA's right to procedural fairness by failing to give VIA an adequate opportunity to respond to its requests for cost and feasibility information with respect to the modifications it was considering.

Addressing the issue of whether the cars purchased by VIA presented undue obstacles to disabled passengers, the Federal Court of Appeal held that, while the Agency's decision was entitled to deference, its conclusions were patently unreasonable. In its view, the Agency failed to consider all relevant factors and erroneously rejected VIA's claim that its existing network was able to address obstacles presented by the new cars. The appeal court also found that the Agency had violated VIA's right to procedural fairness by failing to give it an adequate opportunity to respond to the Agency's requests for cost and feasibility information.
 
Issue(s): The issues on appeal to the Supreme Court of Canada included: Did the Federal Court of Appeal err in law in its evaluation of "undueness" under Part V of the Canada Transportation Act? Did the Federal Court of Appeal err in ruling that the Agency’s process under Part V of the CTA was unfair? 

Supreme Court's Decision (5-4): The appeal was allowed. 

Reasons: The Court affirmed that the Agency's mandate under Part V of the Canada Transportation Act is to identify and remedy undue obstacles to persons with disabilities in the transportation context in a manner that is consistent with the approach to identifying and remedying discrimination in human rights law.
 
Speaking for a five-member majority of the Supreme Court, Justice Rosalie Abella held that the Agency's order was subject to "a single deferential standard of review," namely, patent unreasonableness. Noting that the focus should be on the process rather than the result of the tribunal's inquiry, Abella stated that "where an expert and specialized tribunal has charted an appropriate analytical course for itself, with reasons that serve as a rational guide, reviewing courts should not lightly interfere with its interpretation and application of its enabling legislation." In this respect, Abella cautioned that courts should "refrain from overlooking the expertise a tribunal may bring to the exercise of interpreting its enabling legislation and defining the scope of its statutory authority." She noted that it was "counterproductive" to apply labels "such as 'statutory interpretation' or 'human rights' to what is in reality a function assigned and properly exercised under the enabling legislation" as this resulted in "a tribunal's expertise [being] made to defer to a court's generalism rather than the other way around." To characterize the issue before the Agency as a human rights matter, Abella continued, was to disregard "how inextricably interwoven the human rights and transportation issues are," the complexity of which was precisely the reason Parliament gave this specialized expert tribunal such broad discretionary powers to identify and remove barriers to disabled travelers.

Abella noted that the history of the Canada Transportation Act demonstrates "Parliament's intention that Part V be interpreted according to human rights principles," such that the question of whether an obstacle is undue will be informed by the twin concepts of reasonable accommodation and undue hardship as set out in the Court's landmark human rights case of Meiorin (British Columbia (Public Service Employee Relations Commission) v. BCGSEU, [1999] 3 S.C.R. 3). Applying the Meiorin principles, Abella stated: "In the present case the onus was on VIA to establish that the obstacles to the mobility of persons with disabilities created by its purchase of the Renaissance cars were not 'undue' by persuading the Agency that it could not accommodate persons with disabilities without experiencing undue hardship." In Abella's view, the Agency had properly defined the analytical process and applied the guiding principles of Meiorin, such that its decision could not be said to have been patently unreasonable.

In reviewing the factors that the Agency appropriately, in her view, considered, Abella noted that the Agency did consider and properly rejected VIA's "network defence," according to which the disabled traveler could choose between the existing fleet (which was eventually to be replaced by the new cars) and the new cars with special "as needed" accommodation, such as assistance from trained staff in using washroom facilities and on-board wheelchairs. Abella held that this argument amounted to a defence that the new "exclusionary barriers are no more discriminatory than what they are replacing." VIA had a responsibility to take all reasonable steps to eliminate barriers presented by the new cars, Abella observed, yet it "did not appear, from the evidence, to have seriously investigated the possibility of reasonably accommodating … access for persons with disabilities."

Dismissing the argument that the Agency erred in finding obstacles to be undue without knowing the cost of remedying the obstacles (cost being an element of undueness), Abella pointed out that the Agency made findings of fact regarding the costs of the modifications it had identified, and concluded that "the facts did not justify a finding of undue hardship based on financial cost." Moreover, Abella stated, it was VIA's evidentiary burden to establish undue hardship: "[W]here VIA refuses to provide evidence in its sole possession in support of its undue hardship argument, it cannot be said that any reasonable basis exists for refusing to eliminate an undue obstacle." Noting that "the costs of restructuring or retrofitting are financially calculable, while the benefits of eliminating discrimination tend not to be," Abella emphasized that "the issue is not just cost, it is whether the cost constitutes undue hardship." In Abella's view, the Agency "critically assessed the cost estimates VIA provided, examining this information in the context of VIA's budget, corporate plan, performance targets, total revenues, cost-recovery ratio, operational funding surplus, and a $25 million contingency fund including operational liabilities [and] concluded that 'VIA has substantial funds reserved for future capital projects and for unforeseen events.'"

In short, the Agency's findings in respect of the undue hardship analysis were not unreasonable, and were, in fact, supportable on the evidence before it: "The facts, as found by the Agency, did not justify a finding of undue hardship based on financial cost. The relevant costs of remedying the undue obstacles identified would, the Agency concluded, proportionally represent a relatively insignificant sum whether viewed in the context of VIA's entire capital expenditure budget of $401.9 million or the approximately $100 million VIA expected to spend renovating the Renaissance cars. The Agency found that VIA's financial statements 'provide no indication of an inability ... to absorb the costs which it asserts would be incurred' (Final Decision, at p. 21). It also found that VIA was experiencing favourable economic conditions, with an operating surplus for the years ending December 31, 2001 and December 31, 2002 and a contingency fund of $25 million dollars. In the Agency's view, the cost of removing the obstacles caused by VIA's acquisition of inaccessible rail cars could be shifted throughout VIA's operations and mitigated through efforts to reallocate funds. Further, the Agency determined that there would be ways to remove the obstacles in issue that would not substantially impair VIA's business operations, for example by 'planning the modifications to occur over time so as to minimize the impact on the operation of VIA's passenger rail network' (Final Decision, at p. 24)."

Finally, Abella rejected the submission that the Agency had violated VIA's right to procedural fairness by ordering corrective measures before receiving cost estimates. She found this position "difficult to sustain," given that VIA persistently refused to provide estimates despite the Agency's repeated requests, consistently urged the Agency to make its decision based on the limited cost information it did provide and did not seek an extension of time, and took the position before the Agency that it lacked the time, expertise and money to prepare cost estimates, although it filed a cost report in the appeal court 37 days after the Agency's final order was issued. Abella declared that to interfere with the Agency's order on the basis of "fresh evidence" which "VIA could, and ought, to have submitted to the Agency in a timely way is to render the Agency process vulnerable to cavalier attitudes before it."

Date of the Supreme Court’s decision: March 23, 2007

Lancaster Reference: For analysis of the Supreme Court’s decision, see Lancaster’s Labour Law E-Bulletin, April 11, 2007, Issue No. 78.