Many statutes authorize decision-makers to award interest on money owing (e.g., Human Rights Code). Without the explicit provision in a statute, can a decision-maker award interest? The Federal Court of Appeal has recently examined this question.
The applicant received retroactive disability payments under the Canada Pension Plan and requested interest or other compensation. The responsible Minister denied the request. The Federal Court (2011 FC 934) dismissed her judicial review application.
The Federal Court of Appeal found that the Minister could consider awarding interest.
Subsection 66(4) sets out the Minister’s authority to remedy administrative errors for individuals denied a benefit.
the Minister shall take such remedial action as the Minister considers appropriate to place the person in the position that the person would be in under this Act had the erroneous advice not been given or the administrative error not been made.
The Federal Court ruled that the Minister’s power under this subsection was limited to taking appropriate measures in order to place a person in the position he or she would be “under the Act”. Since the Act does not expressly provide for the granting of relief through interest awards, the Minister had no authority to do so, the Court held (at paras. 66 and 69).
The Federal Court of Appeal disagreed (at para. 60 and 62):
…A textual, contextual and purposive analysis of subsection 66(4) supports the view that this subsection seeks to remedy losses such as the decline in purchasing power of benefits paid with great tardiness, as has occurred in this case.
This is a case where a person has been denied a benefit for close to 30-years as the result of an administrative error. It is difficult to understand how such a person can be placed in the same position under the CPP as if the error had not been made if she is not compensated, at the very least, for the loss in purchasing power of the erroneously withheld benefit payments resulting from inflation. It is generally appropriate to quantify such compensation in the same way as interest.
The government argued that this textual, contextual and purposive interpretation of the subsection should not be followed on the basis that the subsection does not specifically provide for the payment of interest. The respondent also submitted that in the absence of a specific statutory provision allowing for the payment of interest, the Minister has no authority to award interest no matter how broadly remedial powers are drafted under ss. 66(4).
The FCA responded (at paras. 64-66):
I agree with the respondent that the CPP is a complete code governing the payment of benefits, and that in the absence of a statutory authority to do so, the Minister does not have the power to award interest on benefits payable under the CPP…
That being said, however, the issue in this appeal is not whether the Minister can award interest in the absence of a statutory authority. Rather, the issue here is whether subsection 66(4) of the CPP is a statutory authority empowering the Minister to compensate a person for the late payment of benefits through interest payments. In my opinion, it is such a statutory authority.
Subsection 66(4) provides the Minister with a large and unfettered authority to take such remedial action as she considers appropriate to place the appellant in the position that she would be under the CPP had the administrative error committed in her case not been made. This authority is broad enough to allow the Minister to consider whether, in the circumstances of the appellant, remedial action to compensate for the late payment of the benefits is appropriate or not. In exercising her authority under the subsection, the Minister must act reasonably, but she is nevertheless afforded a large degree of discretion in determining how the appellant could be placed in the position she would have been had the error not been committed.