Reference re Canada Assistance Plan

In 1967, the government of Canada (defendant) entered into agreements under the Canada Assistance Plan (plan) with each of the country’s provincial governments. The plan authorized the Canadian government to make financial contributions toward the provinces’ expenditures on social assistance and welfare programs. Although the plan included some prerequisites related to the eligibility of provincial expenditures, each province had the authority to determine which programs operated, how the programs operated, and how much money was spent by the province on the programs. In 1990, as part of a budget reduction plan, the Canadian parliament passed the Government Expenditures Restraint Act (the act). The act limited the growth of the payments made by the Canadian government to the financially stronger provinces to 5 percent per year for fiscal years 1991 and 1992. The provincial government of British Columbia (plaintiff) and other provinces referred a question to the British Columbia Court of Appeal, asking whether the government of Canada may limit its obligation under the plan without the consent of the British Columbia provincial government. The court of appeal held that the Canadian government did not have the authority, in the absence of additional legislation, to limit its financial obligations to a province under the plan. The government of Canada appealed.