In Nelson (City) v Marchi, 2021 SCC 41, the Supreme Court of Canada held that public authorities may only be shielded from liability in negligence when making decisions that engage public policy considerations, such as competing economic, social and political factors. Where these decisions exist, courts should respect the distinct roles of the other branches of government and their institutional competencies by not substituting their own opinions in place of choices made by democratically elected officials. To help determine whether a particular decision properly engages public policy considerations, the Supreme Court has offered four factors to consider, as summarized below.

Background

This case arose from a heavy snowfall in Nelson, British Columbia, in January 2015. As they cleared the snow from one of the city’s streets, employees of the City of Nelson (“the City”) created a snowbank between the sidewalk and the roadway, leaving no clear means of access between the sidewalk and the curbside parking spots. Subsequently, in attempting to cross the snowbank to reach the sidewalk, Ms. Marchi fell, severely injuring her leg. In response, she brought an action against the City for negligence, claiming damages of $1 million.

The City took the position that it should not have to pay Ms. Marchi damages because snow-clearing decisions fall within “core policy decisions”, which are immune from negligence claims. “Core policy decisions” include decisions about a course of action that are based on public policy considerations (such as economic, social, and political factors) and which are neither irrational nor taken in bad faith.

Rulings of the Lower Courts

Supreme Court of British Columbia

The trial judge characterized decisions relating to snow removal as core policy decisions, and held that the City did not owe Ms. Marchi a duty of care. Even if a duty of care was owed to Ms. Marchi, the trial judge held that the City acted reasonably, and as such, did not breach the standard of care. The trial judge also concluded that the required elements for causation were missing as it was Ms. Marchi’s own actions, and not the City’s negligence, that caused her injuries.

The British Columbia Court of Appeal (the “BCCA”)

On appeal, the BCCA held that the trial judge erred in its duty of care analysis by accepting the City’s position that all snow removal decisions were core policy decisions. The trial judge failed to differentiate between governmental decisions that are operational in nature – i.e., actions relating to implementing policy, often based on administrative directions, professional opinion, or technical standards – and policy-based, such as involving value judgments from weighing competing social, political, and economical factors. In turn, this error inappropriately coloured the trial judge’s assessment for standard of care. Moreover, the BCCA also held that the trial judge did not apply the “but for” test for causation, and incorrectly assessed Ms. Marchi’s own fault in causing the injuries she suffered. Based on these errors, the BCCA unanimously allowed the appeal and ordered a new trial. The City appealed to the Supreme Court of Canada.

The Supreme Court of Canada’s Decision

In a unanimous decision, the Supreme Court of Canada held that the City owed Ms. Marchi a duty of care, and that its liability in negligence could not be limited under the core policy immunity.

Duty of Care

Drawing on the case of Just v. British Columbia, [1989] 2 S.C.R 1228 (in which it was determined that public authorities owed road users a duty to keep roads reasonably safe subject to a public authority’s immunity for true policy decisions), the Court found that the case at bar fell within this established category of duty of care. In both instances, public authorities invited members of the public to use public roads or sidewalks under its maintenance, and these users suffered injury because of the public authority’s failure to maintain the access in a reasonably safe condition.

Definition of Core Policy Decisions

Relying on past jurisprudence, the Court defined core policy decisions as:

“decisions as to a course or principle of action that are based on public considerations, such as economic, social and political factors, provided they are neither irrational nor taken in bad faith.”

These decisions are a “narrow subset of discretionary decisions”, and the fact that a decision has some accompanying discretion is not, on its own, a marker for policy. On the other hand, non-policy decisions either relate to the implementation or carrying out of policy. These operational decisions are predicated on “administrative direction, expert or technical opinion, technical standards or general standards of reasonableness”.

However, the Court found that distinguishing between policy and operational decisions is not conducive to a clear and concise legal test, preferring instead to adopt a new framework that subsumes various considerations previously at play in determining public authority liability in negligence.

The Rationale Underlying Core Policy Decisions

The Court indicated that the separation of powers is the primary rationale for shielding core policy decisions from liability in negligence. In short, allowing liability for what amounts to core policy decisions would permit courts to review decisions made by the legislative or executive branches, and ultimately, amount to courts “second-guessing the decisions of democratically-elected government officials and simply substituting their own opinions”. This is exacerbated by the fact that courts would have to engage in value judgments by weighing competing economic, social, and political factors when reviewing these decisions. Not only would this violate the constitutional order, and the respect for core institutional competencies, the Court held that courts are ill-positioned to review such decisions as “the adversarial process and the rules of civil litigation are not conducive to the kind of polycentric decision-making done through the democratic process”. Moreover, unlimited liability over policy decisions could have a chilling effect on and, ultimately, hinder good governance.

The Court summarized that the rationale for core policy immunity serves as an overarching principle guiding the entire analysis to be performed, and that the immunity’s applicability will depend on the extent to which this rationale is engaged.

The Analytical Framework: Nature of Decision and Four New Factors

The Court emphasized that the key consideration in determining whether a decision is indeed a core policy decision is the nature of the decision itself. As public policy decisions fall within the role and competencies of the legislative and executive branches:

“A court must consider the extent to which a government decision was based on public policy considerations and the extent to which the considerations impact the underlying purpose of the immunity — protecting the legislative and executive branch’s core institutional roles and competencies necessary for the separation of powers.”

To focus the analysis on the nature of a decision, the Court enumerated four non-determinative and non-exhaustive factors to consider, namely:

1. the level and responsibilities of the decision maker;
2. the process by which the decision was made;
3. the nature and extent of budgetary considerations; and
4. the extent to which the decision was based on objective criteria.

As apparent below, underpinning these four factors is the separation of powers doctrine.

1. The level and responsibilities of the decision maker

This factor looks at how closely related the decision-maker is “to a democratically-accountable official who bears responsibility for public policy decisions”. Decisions made by those higher in the executive or closer to an elected official are more likely to trigger separation of powers concerns. Relatedly, the more a decision-maker is required to assess and balance public policy considerations, the more likely their decisions will attract core policy immunity.

2. The process by which the decision was made

This factor looks at the decision-making process: a deliberative process with debate or input from various levels of authority that is intended to apply broadly and prospectively will more likely engage the separation of powers rationale, and thus, qualify for core policy immunity. This contrasts with decisions that are reactionary in nature and are arrived at with little sustained deliberations.

3. The nature and extent of budgetary considerations

This factor distinguishes budgetary allotments for departments (which are likely to fall under the prerogative of the legislative and executive branches) from an employee’s budgetary decisions on a day-to-day basis that do not pose any difficulties for courts to assess.

4. The extent to which the decision was based on objective criteria

This factor looks at whether a court is required to assess a decision made from weighing competing interests and making value judgments – both of which raise separation of powers concerns – or decisions based on technical or general standards of reasonableness that are easily assessable and common to courts.

Notably, the Court warned that a governmental authority’s decision to characterize a document or plan as “policy” is not a strong indicator that the document or plan reflects core policy decisions, nor is the fact that certain conduct is mandated by public authorities in written documents.

Duty of Care: Application to the Facts

As the current case fell within the duty of care established in Just v. British Columbia, the only remaining issue was whether Ms. Marchi was challenging a core policy decision immune from a claim of negligence. Noting that the issue of whether a defendant owed a plaintiff a duty of care is a question of law reviewable on a correctness standard, as determined in 1688782 Ontario Inc. v Maple Leaf Foods Inc., 2020 SCC 35, the Court identified three errors committed by the trial judge in its duty of care analysis. First, whereas the impugned decision must be “described with precision to ensure that immunity only attaches to core policy decisions”, the trial judge described the relevant decision as the entire snow removal process. Second, the trial judge incorrectly emphasized the label of “policy” on the City’s documents and practices. Third, the trial judge incorrectly emphasized the budgetary concerns as determinative of a core policy decision.

Applying the four factors described above, the Court concluded that the decision to remove snow without ensuring direct access to sidewalks did not amount to a core policy decision immune from negligence liability as it did not have any of the hallmarks of core policy. Specifically:

• the snow clearing supervisor did not have authority to alter the decision to clear the parking stalls;
• the decision to clear snow from these parking stalls was not made pursuant to a deliberative process that involved balancing policy considerations, but rather as a matter of custom;
• the budgetary considerations involved were day-to-day operational decisions made by individual employees, rather than high-level considerations; and
• determining whether the snowbanks posed an unreasonable risk of harm was based on objective criteria well within the courts’ competencies and did not require institutional competencies.

Standard of Care and Causation

Under its analysis of standard of care, the Court noted that the trial judge allowed considerations relating to core policy immunity to permeate the assessment of standard of care. The Court warned that the analysis for duty of care should be kept separate from the one for standard of care, and that standard of care should not be used as a backdoor for further policy immunity considerations.

On causation, the Court agreed with the BCCA that the trial judge failed to conduct a “but for” test for factual causation, and instead, conflated the standard of care and causation analyses.

The Court found that it was not well-placed to make and substitute its own conclusions on standard of care and causation, as both require additional findings of fact that would best be made at a new trial.

Key Take-Aways

• Core policy decisions are a narrow subset of discretionary decisions that are based on public policy considerations - such as economic, social, and political factors - and are neither irrational nor taken in bad faith;
• The underlying principle animating immunity for core policy decisions is a separation of powers doctrine that requires each branch of government to play their distinct and complementary roles in Canada’s constitutional order without overstepping onto each other’s boundaries. Specifically, the separation of powers doctrine seeks to protect the improper incursion by courts into the core competencies and roles of the legislative and executive branches by limiting judicial interferences in decisions that fall squarely within the jurisdiction of the legislative and executive branches of government;
• In determining whether a decision or conduct qualifies as a core policy decision, the focus should be on the nature of the decision; and
• In determining whether a decision is based on public policy considerations and engages the separation of powers rationale, four non-determinative and non-exhaustive factors should be weighed:
  • The level and responsibilities of the decision maker;
  • The process by which the decision was made;
  • The nature and extent of budgetary considerations; and
  • The extent to which the decision was based on objective criteria.