1. This report presents the findings and recommendations from our examination of the possible regionalization and/or merger of the Federal Court of Canada Trial Division and the Tax Court of Canada and consolidation of their administrative support services. The examination was conducted in accordance with the Auditor General Act pursuant to an order-in-council recommended by the Minister of Justice. The report also presents the results of our audit of the registry services of the two courts. The scope of our review and the approach we used are described in Section 1. A copy of the order-in-council is attached as Appendix 1.

2. The scope of our review required that we balance a variety of elements, including the desirability of improving access to the courts, preserving judicial independence, maintaining commensurate accountability for the funds provided to court registries, and operating the courts in a cost-effective manner.

3. In 1994 there were 23,325 proceedings in the Trial Division of the Federal Court, including 6,366 immigration proceedings and 13,848 income tax, goods and services tax and Crown certificates. In 1994-95 expenditures on the Court totalled about $42.7 million, including the costs of operating the registry, leasing facilities, judges' salaries, allowances and benefits, payments to other judges to sit as umpires for employment insurance cases, and travel by judges. There were 19 full-time judges and two supernumerary judges in the Trial Division and 454 staff in the registry of the Court. The Court had 46 courtrooms and had registry offices in 10 locations across the country.

4. During the same period, there were 6,266 appeals and applications in the Tax Court and expenditures on the Court were about $19.5 million. The Tax Court had 22 full-time judges and four supernumerary judges, and 133 registry staff. It had four registry locations. During 1994-95 it had 11 courtrooms; currently it has nine.

5. Detailed background information on the two courts is presented in Appendix 2. This background information provides the context for our analyses, findings and conclusions.

6. Our major findings and conclusions relate to three areas:

improvement and consolidation of registry services;
merger of the two courts; and
regionalization of both courts, with or without merger.

Registry services

Significant improvements are needed in registry cost effectiveness

7. Registry services include those provided to the parties to a legal action, document processing and quality assurance, and services in the courtroom. Registry services also include corporate services such as finance, human resources, information technology, courtroom facilities, and publication of court decisions.

8. We concluded that significant improvements are needed in the cost effectiveness of registry services. Some of the savings that would be achieved would need to be reinvested in the courts to support the development and implementation of needed improvements, particularly in information technology. Our detailed findings and conclusions on registry services are presented in Section 2.

9. In summary, we found that:

accountability and responsibility for the cost-effective use of resources approved by Parliament to support the judicial function should be clarified;
information provided to Parliament on the use of these resources needs to be more relevant and complete;
the supply of courtrooms exceeds the combined needs of both courts;
planning for facilities needs to be significantly improved;
proposed courtroom construction should be reassessed;
collocation of courts with federal tribunals and boards could result in significant savings;
efficiency of registry services can be improved. Standards of service and task performance need to be established and the necessity of having both central and local registries needs to be assessed;
the rationale for court fees needs to be clarified;
priority should be given to adopting information technologies in such areas as electronic document interchange, workflow management, case scheduling, videoconferencing, library and research services, and public access to court decisions and other information;
present and proposed methods of providing access to court decisions in both courts need to be assessed; and
the effectiveness of the caseflow management techniques in both courts should be assessed and the use of the best approaches expanded.

Summary of possible savings

10. The above improvements would yield significant annual savings as well as improve the quality of service provided to both court users and judges. Overall, we estimate that the improvements could yield savings of about 15 to 25 percent of the combined expenditures of about $53 million in 1994-95 to support the judicial function of the courts. The $53 million includes expenditures on registries, on travel by judges, on leasing of facilities and on the Federal Court Reports. It does not include the salaries, allowances and benefits of judges.

11. Included in the 15 to 25 percent estimate are, for example, savings of about:

$1 million annually from greater sharing of local court facilities (see paragraphs 61 to 72);
$600,000 annually from consolidating corporate services (see paragraphs 53 to 55);
$700,000 annually from transferring some services of small Federal Court registries to other registries (see paragraph 148); and
$5 million over 10 years from sharing information technology systems, resources and expertise (see paragraphs 171 to 173).

12. Major savings from a reduction of proposed expenditures on new court facilities in such centres as Ottawa, St. John's and Halifax are discussed in Section 2 under facility planning. Additional savings of about $1.3 million annually could be obtained by recovering the costs of producing the Federal Court Reports and the proposed Tax Court Reports (see paragraphs 178 to 186). It should be noted that the annual savings may not be realizable in the short term; for example, long-term leases would need to expire and one-time costs such as severance payments and relocation costs are excluded. Exhibit 1 summarizes possible savings.

Exhibit 1—Estimated Savings from Improvements

The registries of the courts should be consolidated

13. We concluded that the needed improvements in accountability and cost effectiveness of registry services are likely to be achievable only if the two registries are consolidated. Each court is funded separately and each has a separate statutory mandate to plan for and acquire its own resources. We found that there was only limited consultation or co-operation on almost all resource matters. A consolidated registry would greatly facilitate improved planning and use of resources, as well as increase the opportunity to plan for federal judicial centres that would meet the needs of the courts and federal boards and tribunals. Consolidation of the registries would also provide an opportunity to consider how the management approach and structure of the registry could be changed to ensure that it promotes the efficient delivery of services.

Status of registrar should be enhanced

14. We recommend that the registrar position of the consolidated registry be established at the deputy minister level; this would provide sufficient stature to attract the experienced and skilled individual needed to ensure that the registry operates cost-effectively and to represent the registry to government and before Parliament. The registrar would have the current powers of the administrators of the courts as well as powers relating to the administration of the courts now held by the Commissioner for Federal Judicial Affairs. A registrar at the deputy minister level would be required to manage a consolidated registry whether or not the courts were merged.

The potential benefits of merger outweigh the potential disadvantages

15. Merger of the courts is a contentious issue. On balance, we concluded that the potential benefits of merger outweigh the potential disadvantages. There are a number of arguments for and against merger. In principle, merger could bring benefits by providing more flexibility to deal with caseloads, improving efficiency in the scheduling of cases and travel by judges, increasing the use of days available for hearings and providing greater assurance that a consolidated registry service would function effectively.

16. Merger is strongly opposed by the Tax Court and by most counsel appearing before that Court. They believe that the efficiency of the Tax Court would be lost and that the hearing of tax cases requires a specialized court. However, not all countries have a separate tax court. The United States has one, but Australia, New Zealand and England do not. The Trial Division of the Federal Court of Canada already deals with such specialized areas as federal administrative law, intellectual property and admiralty cases, and until 1991 heard tax appeals.

17. We agree that the potential disadvantages of merger would have to be minimized. Timely and efficient disposition of tax cases is important and this should be a priority of a merged court. Thus, we recommend that the rules of the Tax Court that address these issues be continued in a merged court.

18. Merger of the courts may result in increased expenditures for judges if the level of secretarial and legal research support services now provided to Federal Court judges is extended to Tax Court judges. Tax Court judges and judges of three of four similar-sized courts of appeal in the provinces are provided less support service than Federal Court judges. We believe the need for the level of these services in the Federal Court should be reassessed (see paragraphs 222 to 223).

Accountability structures for a merged court

19. The decision whether or not to merge the courts has implications for overall accountability for the registry, with respect to who should be accountable for the use of the resources provided to the court(s) and to whom the registrar of the consolidated registry should report. (These matters are discussed in more detail in paragraphs 239 to 250.) The registrar could report to the Minister of Justice or a board of management, or to the Chief and Associate Chief Justices of a merged court. Each option has advantages and disadvantages.

20. The option of reporting to the Minister of Justice may be difficult to adopt, since existing legislation governing the courts already provides them with more independence from the government. We reviewed the option of vesting accountability for the registry in a board of management composed of judges, lawyers and eminent members of the public. The registrar of the consolidated registry would report to the board on registry matters. The board, through the chair of the board and the registrar, would be accountable through the Minister of Justice to Parliament for the management of the registry. The management of the judicial function -- for example, assignment of cases to judges -- would remain with the Chief and Associate Chief Justices of the court.

21. The courts are not in favour of a management board. They are concerned that the establishment of a board would threaten judicial independence and create unnecessary additional costs. The Federal Court prefers that it become self-administering in the manner of the Supreme Court of Canada or the Federal Court of Australia.

22. If the option of self-administration is chosen, then we recommend clearly designating the Chief Justice of the Court as accountable and responsible for ensuring the cost-effective use of court resources. The registrar of the consolidated registry would be responsible to the Chief Justice. However, such a designation raises the question of how the Chief Justice would be held accountable for the discharge of these responsibilities (see paragraphs 248 to 249).

23. If the courts are not merged but the registries are consolidated, then the model centred on the Chief Justice may be difficult to apply, since accountability and responsibility for the registry would be divided between the Chief and Associate Chief Justices of the Federal Court and the Chief Judge of the Tax Court.

Accountability improvements are required in any case

24. Regardless of whether registry services are consolidated or the courts merged, responsibility and accountability for funds approved by Parliament for registry activities need to be clarified. Among the courts, the registries and the Commissioner for Federal Judicial Affairs, there is not a consensus on how to interpret the legislation that assigns accountability and responsibility for the use of public resources provided to the courts (see paragraphs 232 to 238). The lack of clarity in the current system has contributed to the economy and efficiency problems we identified. Improvements also are needed in accountability reporting against performance standards on the courts' use of resources voted by Parliament, and particularly in reporting on the timeliness of court proceedings, resource utilization rates, service to litigants and productivity of the registries (see paragraphs 251 to 253).

Responsibility for employment insurance cases could be consolidated

25. Pursuant to the Employment Insurance Act , Federal Court judges act as umpires hearing appeals of decisions by boards of referees on the amounts of employment insurance benefits. Tax Court judges hear appeals involving issues of whether the litigant is insurable under the Act . Significant judicial resources of both courts are used to hear these types of cases. The registry of the Tax Court provides services for hearings of employment insurance cases in that Court. A separate registry funded by Human Resources Development Canada provides services to judges acting as umpires.

26. We concluded that, in principle, the employment insurance jurisdictions of the courts could be merged, the umpire function could become part of the jurisdiction of a merged court, and the informal procedures of the courts could be continued. We noted that prior to the creation of the Tax Court in 1983, all employment insurance cases were heard by umpires. The registry of the Office of the Umpire could be included in the consolidation of the registries of the Federal Court and the Tax Court whether or not the courts were merged (see paragraphs 224 to 229).

Regionalization benefits could be obtained by other measures

27. With respect to regionalization, we concluded that most of the potential benefits - including savings of up to $1.4 million, reduced stress from travel by judges and improved access to the courts - could be obtained by other measures. For example, increased use of information technology could achieve a substantial portion of the savings. These other measures should be tried before regionalizing the courts. However, if it is a public policy priority for the judges of the courts to be representative with respect to gender and region, then consideration should be given to waiving, on a case-by-case basis, the residency requirement for judges to live within 40 kilometres of the National Capital Region. This would require legislative amendments to the Federal Court Act and the Tax Court of Canada Act . Further, if potential benefits cannot be achieved through technology and other measures, serious consideration should be given to alternative ways of regionalizing the courts, especially if they are merged. Regionalization is discussed in Section 4.

Section 1: Introduction

Scope and approach

28. By order-in-council on 30 May 1995, the Governor in Council requested that the Office of the Auditor General examine the Federal Court of Canada Trial Division and the Tax Court of Canada with respect to the costs and benefits of possible regionalization and/or merger of the courts and consolidation of their administrative support services. The review was conducted in addition to our audit of the registries of the two courts. This report presents our findings and recommendations.

29. Our review consolidated several earlier initiatives. On 28 October 1994, the Minister of Justice announced a study of the Federal Court of Canada and the Tax Court of Canada to examine whether the courts should be regionalized, merged and their administrative services consolidated. Regionalization and merger were to be considered by a working group led by the Department of Justice, with the participation of the Office of the Commissioner for Federal Judicial Affairs and the co-operation of the two courts. Administrative consolidation was to be examined by the Commissioner for Federal Judicial Affairs.

30. Independently, the Auditor General met with the Chief Justice and Associate Chief Justice of the Federal Court of Canada to discuss a forthcoming audit of the Registry of the Court. The Registry is designated a branch of government under the Financial Administration Act . Further discussions were held with the Chief Judge of the Tax Court, the Commissioner for Federal Judicial Affairs, and officials in the Department of Justice. Subsequently, it was agreed that the Office of the Auditor General would assume responsibility for the studies of regionalization and merger of the courts and consolidation of administrative support services to the courts.

31. Our work was done with the co-operation of the Chief and Associate Chief Justices of the Federal Court and the Chief and Associate Chief Judges of the Tax Court, the judges of both the courts, the Administrator and the Registrar of the respective courts and their staffs, and the Commissioner for Federal Judicial Affairs and staff.

32. Our work was conducted pursuant to the Auditor General Act , including section 11, which provides that the Auditor General, on the request of the Governor in Council, may inquire into and report on any matter relating to the financial affairs of Canada, or to public property or any person or organization that has received or sought financial aid from the Government of Canada.

33. Our examination was conducted in conformity with the standards and practices of the Office of the Auditor General. However, it differed from regular audits in one important respect: in addition to traditional audit concerns such as management practices, economy and efficiency, we were asked to assess options and make recommendations relating to consolidation of administrative support services of the two courts and to merger and regionalization of the courts. It should be noted that to meet the requirements of the order-in-council, we have reported on the views of key parties involved and on issues beyond the ambit of regular audit work.

34. We examined, both quantitatively and qualitatively, the advantages and disadvantages of merging and/or regionalizing both courts and consolidating their registry services. We examined, in Ottawa, Montréal, Toronto, Vancouver and elsewhere, specific registry services such as document processing, planning for and use of facilities, information technology, and caseflow management, as these clearly impact on possible consolidation of registry services and merger and regionalization of the two courts.

35. To help identify and assess issues, we received advice from members of an Advisory Committee composed of persons familiar with court operations. The Advisory Committee is not a decision-making body and the views expressed in this report do not necessarily represent the views of individual members of the Committee. We also undertook extensive consultations with judges of both courts and with the staff of the registry offices. We sought the views of counsel who appear before the Federal Court and the Tax Court, through public announcements in legal magazines, and we wrote to over 300 interested parties, including le Barreau du Québec and provincial and territorial branches and national sections of the Canadian Bar Association. We received over 40 replies. We met with lawyers associated with the national and provincial bar associations and le Barreau du Québec, and with senior officials of various departments, including Public Works and Government Services Canada, Revenue Canada, the Office of the Umpire, the Department of Justice, the Treasury Board Secretariat and the Department of Finance. We also compared court practices and experiences with those of the court systems administered by the provinces and of similar courts in England, Australia, New Zealand and the United States.

36. At the time of our review, both courts had a number of management improvement initiatives under way. These initiatives are described in Appendix 3. They indicate that each court is aware of management problems and challenges that it faces and is working to develop and implement procedures and policies it believes will resolve them. To the extent possible, we have taken this into account in our examination. However, the relevance of these initiatives was limited in certain instances because they pertained specifically to one court or the other, while our focus was on the use of the total resources provided to both courts. Future developments also could have a significant effect on the issues we studied; in particular, any major change in the caseload or jurisdiction of the courts could significantly change the feasibility of the proposals.

37. To proceed efficiently and to ensure openness and fairness in the audit process, we circulated drafts of our audit plan and report to the Chief Judge, Associate Chief Judge and Registrar of the Tax Court; the Chief Justice, Associate Chief Justice, Executive Officer to the Chief Justice, and Administrator of the Federal Court; and the Commissioner for Federal Judicial Affairs. All parties agreed to the audit plan. The Chief Justice of the Federal Court also requested that we review the impact on the Court of judges serving in other capacities, such as umpires for employment insurance cases and judges of the Court Martial Appeal Court. We examined the umpire function because it had a significant impact on the Court.

38. During the course of the audit, the Chief Justice raised objections to the inclusion of expenditures on the Federal Court Reports in the scope of the audit. The Reports are edited by the Commissioner for Federal Judicial Affairs and are printed and distributed by the Canada Communications Group. We reviewed the matter and concluded that a review of these expenditures was within our mandate pursuant to the order-in-council and the Auditor General Act, which authorizes a value-for-money audit of government agencies, including the Commissioner for Federal Judicial Affairs.

39. We met with the parties to discuss the draft report and to ensure that we understood their concerns. We also distributed for comment a draft of the report to all judges of both courts and to senior officials of both registries, and certain parts of the report to relevant government departments. We discussed the report with the judges and officials and in some instances received written comments. Registries of both courts, the Commissioner for Federal Judicial Affairs, Public Works and Government Services Canada and other departments and agencies provided us with data and information. We reviewed that information and data with the staff of these entities, and tested samples of data for reliability.

Elements we considered

40. The scope of the review required the consideration of a variety of elements. These include the desirability of:

improving access to the courts by the public;
preserving judicial independence;
maintaining commensurate accountability for the public funds voted by Parliament to provide staff, facilities, information technology and other resources for the courts;
operating the courts in a cost-effective manner;
consistency in judicial decision making and collegiality among judges; and
representativeness of region and gender among the judiciary.

41. In our analysis we sought to balance these elements and to indicate where trade-offs needed to be considered. We have sought to suggest a framework within which both courts could operate with due regard to economy and efficiency while protecting judicial independence and access to the courts. While we identified potential cost savings, it is clear that some of these moneys will need to be reinvested in the courts to improve cost effectiveness - particularly in the area of information technology.

42. Finally, in matters as complex as those we reviewed, rarely is there any option that does not have some drawbacks. The assessment of options, therefore, particularly where qualitative factors are being considered, depends on the weight and importance attached to each consideration and, in the end, involves professional judgment. To ensure that the opinions of others as well as our own can be fairly assessed by the reader, this report presents the views of the courts and others on major issues.

Previous views of the courts on the issues examined

43. Many of the issues we reviewed are not new to the two courts. In previous reviews as well as in this audit, both courts have expressed their views on these matters. Appendix 3 summarizes the results of previous reviews.

44. As part of a government-wide series of Program Reviews in 1994, the Federal Court undertook a review of its activities. The Federal Court's Program Review recommended that the government consider consolidation of judicial responsibilities presently held by different courts and tribunals. It also noted that consolidation of administrative operations could lead to further savings.

45. The Federal Court's Program Review suggested that the government also explore amalgamation of the Federal Court with the Tax Court, and opportunities where responsibilities of boards and commissions could be dealt with more appropriately by a trial court. It also noted that the efficiency of Federal Court operations is impaired when Federal Court judges are designated to serve in other capacities.

46. The Tax Court has recommended to the government a possible consolidation of corporate services among the Supreme Court of Canada, Federal Court of Canada and Tax Court of Canada as well as quasi-judicial commissions, boards and tribunals. In its view, a consolidation could eliminate duplication of work and harmonize policies and procedures in areas such as personnel, finance, security, administration and information technology. There could be a common section for publication of decisions, eliminating duplication of effort. The Court noted that these entities could share common facilities by way of federal judicial centres in the regions; the courts could share ancillary areas, robing rooms for lawyers and court registrars, and libraries.

Section 2: Consolidation of Registry Services

Background

47. The registries of the Federal Court and the Tax Court were, for the purposes of this study, divided into three components: corporate services, registry activities and direct support to the judiciary.

48. Corporate services were defined as including facilities management, finance, human resources, information technology, libraries, publications, translation and security. Registry activities are tied more directly to the business of the courts, and are provided by registry officers who advise and assist litigants on the rules of practice, court directives and procedures. They review all filed documents for consistency with court rules and help to ensure that procedures are followed from commencement of a case through the various stages of proceedings. They maintain the records of the court, including information stored on court computer systems. They also provide services to judges, including support for the preparation of the judge's file, judgments and orders of the court, case scheduling and courtroom operations. Some registry officers also perform a number of quasi-judicial functions. For example, they are responsible for the assessment of costs to be paid by one party to the other, as ordered by the court. Direct judicial support involves staff who work directly for judges of the court, including law clerks and judicial assistants.

The registries of the courts should be consolidated

49. We concluded that the registries of the courts should be consolidated to achieve needed improvements in the cost effectiveness of registry activities. Consolidation of the registries would also provide an opportunity to ensure that the management approach and structure of the registry promote the efficient delivery of services. Our detailed findings and recommendations concerning specific issues are presented below.

Co-operation between the two courts is problematic

50. As an alternative to consolidation, we examined the feasibility of greater co-operation by the courts to achieve economy and efficiency through joint planning and management of resources. We found that achieving increased co-operation would be difficult. The registries of the courts operate and receive funding from Parliament as two separate entities under two separate appropriation votes. Each court has a separate statutory mandate to plan for and acquire its own resources. We found that there was only limited consultation or co-operation on almost all resource matters. There was some consultation on planning for courtrooms. However, the Tax Court informed us that the consultation was inadequate and that "working co-operatively with the Federal Court of Canada has proven to be difficult."

51. In response to similar observations in our draft report, the Federal Court stated:

"Your draft report leaves the impression that the Tax Court and the Federal Court have somehow failed to discharge their responsibilities by operating independently and by inadequate consultation in the acquisition of facilities. Although we do not consider it a significant point in our response, we think it desirable to remind that neither court has a statutory or policy mandate to share facilities. However, out of a sense of responsibility to the public and in response to a directive of the Treasury Board, each Court does lend its facilities to the other and to other federal boards, commissions and other tribunals. We agree that this is an area in which further work could be done in the interests of cost effectiveness, but we are of the view that there should be a clear statutory or policy direction requiring us to do so."

52. The level of consultation and co-operation could be increased, but we do not believe that this would occur without a major change in perspectives by the courts and action by the Treasury Board to specifically require the two courts to jointly plan and share resources as well as to explicitly take into account the needs of other users of their courtrooms. Legislation may also be required to implement these changes. This could improve the situation, but we believe consolidation of the registries would provide greater assurance that the improvements would occur.

Savings from consolidating corporate services

53. The Federal Court has about 454 registry staff, including about 123 staff providing corporate services to the registry. The Tax Court has about 133 registry staff, including about 47 staff providing corporate services to the registry.

54. Determining the optimum number of corporate staff for a new consolidated corporate service required that we determine an appropriate ratio of corporate staff to registry staff. For each administrative function (for example, finance, human resources) we identified which court had the lowest ratio of corporate staff to total registry staff, which in most cases was the larger Federal Court. For instance, the Federal Court had one human resource officer for every 38 registry staff members, while the ratio in the Tax Court was one officer to every 26 staff members.

55. If corporate services were consolidated at the lowest ratios, about $600,000 in annual savings could result. We consider this estimate to be conservative, as it does not include savings in benefits or in operating expenditures such as accommodation and staff training. Moreover, it does not include any savings related to economies of scale.

Courtroom and registry facilities

Background

56. We reviewed the physical facilities of both courts to determine whether they were being planned and used economically and efficiently. We also examined the extent to which registry office space and courtrooms could be further shared by the two courts.

57. Registry offices of both courts are established by legislation and the Rules of each Court. For example, sub-section 14(1) of the Federal Court Act states, "There is hereby established a Registry of the Court consisting of a principal office of the Court in Ottawa and such other offices of the Court as may be established by the Rules." Rule 200(3) of the Federal Court Rules provides for the establishment of the principal office in Ottawa, with local offices in 16 cities across the country. Similarly, sub-section 23(1) of the Tax Court of Canada Act states, "There shall be a Registry of the Court consisting of a principal office of the Court in Ottawa and such other offices of the Court as may be established by the rules made or continued under this Act." The Tax Court of Canada Rules provide for the establishment of three other offices.

58. The two courts lease facilities across the country. Generally, these facilities consist of courtrooms, judges' chambers, a registry counter and offices. In 1994-95 the leasing costs of Federal Court and Tax Court facilities were about $9 million and $3 million respectively.

59. The Federal Court has 46 courtrooms, including "secure" courtrooms used to hear matters in camera under the Canadian Security Intelligence Service Act and the Immigration Act . There are three sizes of courtrooms; all have a traditional layout and usually have two witness boxes to permit the judge to hear evidence from either side of the dais. The Court operates nine local registry offices outside of Ottawa; in seven other cities, services are provided through provincial registries. The largest local registries are in Vancouver, Toronto and Montréal.

60. During 1994-95 and 1995-96, the Tax Court leased courtroom facilities in five cities, with 11 courtrooms. Two of the courtrooms in Montréal were leased between April 1994 and May 1996; therefore, as of June 1996, the Tax Court has nine courtrooms. Most Tax Court courtrooms have a non-traditional layout with the judge's dais and counsel tables arranged on a diagonal and the witness facing the judge. The Court operates a registry in Ottawa and local registries in Vancouver, Toronto and Montréal.

Consolidation of courtrooms and registry offices could yield major savings

61. An amalgamation of the Tax Court and Federal Court courtrooms and registry office space in Montréal, Toronto and Vancouver would save $1 million annually in leasing expenses. The registries of the Tax Court could be accommodated fully in existing Federal Court space in these cities. For the most part, there are sufficient Federal Court courtrooms to meet peaks in courtroom demand and there are sufficient chambers for judges. The savings would be realized as current leases expire between now and 1999. The Ottawa situation has unique features and is discussed later in this report.

62. The savings could be achieved through consolidation of the management and planning of facilities. If local office registry space and courtrooms were consolidated, the space would belong to both courts. For consolidation to work, both courts would need to receive equal treatment. Of course, if the two courts were merged, difficulties associated with shared use of facilities would be eliminated.

63. We believe that the facilities of both courts could be managed more cost-effectively if they were consolidated into federal judicial centres that could also include federal tribunals and boards. Federal-provincial judicial centres that would include federal and provincial courts are also possibilities.

Calculation of reservation and use rates of courtrooms

64. As indicated above, courtrooms have been provided for each court and are reserved for the hearing of cases. Sometimes cases are settled by the parties prior to their scheduled hearing. Mainly for that reason, the rate of courtroom use is lower than the reservation rate. Thus, the need for courtrooms can be assessed on the basis of their rates of either reservation or use. The courts believe that the rate of courtroom reservation for scheduled cases, rather than the rate of actual use, is the appropriate measure for assessing whether courtrooms are being used cost-effectively.

65. We calculated both reservation and use rates for Federal Court and Tax Court courtrooms on the basis of 240 available days per courtroom over a year for all users. The 240 days represent all weekdays, less a Christmas vacation period and the remaining statutory holidays. The available days were prorated where courtrooms were not available for a full year. The reservation and use rates presented below thus represent the percentage of the 240 available days on which courtrooms were reserved and those on which they were actually used. Exhibits 2, 3 , 4 and 5 describe reservation and use of the courtrooms provided for each court, by court and by "other users." It should be noted that in four cities - Ottawa, Montréal, Toronto and Vancouver - the courts operate parallel courtroom and registry offices. Exhibits 6 and 7 the potential reservation and use rates if only Federal Court courtrooms had been reserved and used by the two courts and other users.

Exhibits 2 and 3

Exhibits 4 and 5

Exhibits 6 and 7

The courts have an oversupply of courtrooms

66. Our findings indicate that for the m ost part the supply of courtrooms exceeds the combined reservation needs of both courts and "other users." The reservation rate by all users for Federal Court courtrooms was 49 percent in 1993 to 1995. The Federal Court's reservation rate for its own courtrooms ranged from 25 to 27 percent in 1993 to 1995. "Other users" of Federal Court courtrooms accounted for 22 to 24 percent of overall reservations during 1993 to 1995. During 1995, in Fredericton, Québec, Calgary and Edmonton, the Tax Court reserved the courtrooms of the Federal Court more than the Federal Court did.

67. The Tax Court's overall reservation rates for its own courtrooms during 1994 and 1995 were 59 percent and 71 percent, respectively. With the termination of the leases for two of four courtrooms in Montréal, the estimated reservation rates would be about 68 and 87 percent. Because data on reservation of Tax Court courtrooms by "other users" were not readily available, we estimated the overall reservation rates by all users of these courtrooms. We estimated that in 1994 and 1995, the overall reservation rates of Tax Court courtrooms were 62 percent and 75 percent, respectively. Using the current number of courtrooms in Montréal, the rates would be about 71 and 92 percent, respectively.

68. Our analysis indicates that the reservation needs of both courts and other users could be accommodated by the existing number of Federal Court courtrooms. If both courts had reserved only Federal Court courtrooms, the reservation rates in 1994 and 1995 would have been 44 and 46 percent respectively. If all users had reserved only Federal Court courtrooms, the reservation rates would have been 62 and 67 percent in those years. If both courts had reserved only Federal Court courtrooms in Vancouver, Montréal and Toronto, the reservation rates in these cities for 1994 and 1995 respectively would have been 48 and 59 percent in Vancouver, 39 and 38 percent in Montréal, and 68 and 70 percent in Toronto. If all users had reserved only Federal Court courtrooms in these cities in 1994 and 1995, the respective reservation rates would have been 64 and 75 percent in Vancouver, 50 and 52 percent in Montréal, and 90 and 98 percent in Toronto.

Actual use of courtrooms is low

69. Preferably, the calculation of actual courtroom use would be based on detailed data, including data on hourly use. Such data were not readily available from the courts. However, the courts did have data on whether a courtroom had been used for some period of time during a day, and we used these data to calculate courtroom use. Using these data, a courtroom is counted as used for an entire day even though it may have been used only for a small portion of the day. Thus, our calculations in all likelihood overstate the extent of actual courtroom use.

70. Based on data for 1993 to 1995, the Federal Court's rate of use of its own courtrooms was about 21 percent; during the same period, its actual use of its courtrooms ranged from 22 to 45 percent in Vancouver, from 13 to 22 percent in Montréal, and from 32 to 38 percent in Toronto. "Other users" accounted for about 16 percent of the overall use of Federal Court courtrooms during 1993 to 1995. During 1995 in Halifax, Fredericton, Québec and Calgary, the Tax Court used Federal Court courtrooms as much as, or more than, the Federal Court. The total use of Federal Court courtrooms was about 36 percent.

71. The Tax Court's actual use of its own courtrooms during 1993 to 1995 was 35 to 38 percent. It ranged in Vancouver from 30 to 34 percent, in Montréal from 34 to 41 percent, and in Toronto from 38 to 49 percent. Use of Tax Court courtrooms by "other users" ranged from two to three percent. Total use of Tax Court courtrooms ranged from 37 to 41 percent. (If only courtrooms that now exist were used for these calculations, the estimated total use of its own courtrooms by the Tax Court would be about 37 to 47 percent, and by all users would be 40 to 51 percent.)

72. Our analysis indicates that the use of courtrooms by both courts and other users could be accommodated by the existing number of Federal Court courtrooms. If both courts had shared Federal Court courtrooms, the actual use rates would have been about 33 percent. If all users had used Federal Court courtrooms, the actual use rates would have ranged from 45 to 47 percent during 1993 to 1995. In Vancouver the actual rates of use by the courts would have ranged from 34 to 64 percent, in Montréal from 27 to 36 percent and in Toronto from about 50 to 52 percent. The actual use rates by all users would have ranged from 46 to 71 percent in Vancouver, 36 to 51 percent in Montréal, and 63 to 70 percent in Toronto.

Reducing the difference between courtroom reservation and use rates would improve cost effectiveness

73. In 1994, the Trial Division of the Federal Court reserved its own courtrooms for 2,263 days and used them for 1,813 days. In 1995, it reserved its courtrooms for 2,282 days and used them for 1,744 days. The Federal Court Administrator explained the low rate of use of its own courtrooms by the Federal Court as follows:

"The Federal Court does not double or triple book matters to be heard the same day on the assumption that matters will be dropped from the Hearing List. When matters are ready to be set down the courtrooms are reserved. In this manner, the judges and counsel - as well as their clients - know that they have a courtroom available. The data for days used show how many cases actually proceeded and were not settled before the start of a hearing, or put off for some other reason. Thus, to obtain an accurate picture of the requirement for courtrooms, it is necessary to refer to the figures for courtroom reservations."

74. The Administrator also observed:

"It should be noted that each court has its own statutory mandate to provide for its respective requirements to ensure that operational needs are met. In fact, the need for premises arises at different times for the two organizations. The Federal Court must have available a minimum number of courtrooms to enable the court to hear urgent cases, including injunctions, immigration appeals and applications, and judicial review applications, which are heard without delay and in a summary way. The delay of hearings results in substantial costs to government, for instance where immigration applicants are in detention, as well as very substantial indirect costs to others, for instance where intellectual property, environmental review or broadcasting issues remain outstanding pending Court disposition."

75. The Tax Court reserves and uses its own courtrooms, borrows Federal Court courtrooms, and also rents space, often in hotels, to hold hearings. We estimate that in 1994 the Tax Court reserved about 2,676 days, including 414 days for hearings by deputy judges; actual use was about 1,595 days, including 298 days for hearings by deputy judges. We estimate that in 1995 the Tax Court reserved about 3,287 days, including 665 days for hearings by deputy judges, and used 1,940 days, including 525 days for hearings by deputy judges.

76. The Chief Judge of the Tax Court does not agree with the above method of calculation, for two reasons. First, as indicated, we calculated that a courtroom is available for use by all users about 240 days annually. However, the Chief Judge noted that due to the schedule of the Tax Court judges, Tax Court courtrooms could be used by Tax Court judges a maximum of 226 days. The Chief Judge believes this figure should be used as the days courtrooms are available for use. The Chief Judge also pointed out that Tax Court judges are scheduled to sit in court about 105 days and sittings are scheduled six months in advance. The Chief Judge explained that this schedule allows judges to sit every second week for one week. The second week gives them time to prepare cases and write decisions.

77. The Chief Judge also explained that sitting days may be cancelled because the parties settle prior to hearing, but without leaving sufficient time to give the required 30-day notice to other parties for an informal procedure hearing so that a replacement case may be scheduled. We noted that for informal procedures, legislation allows the parties to waive the 30-day notification period. About 31 percent of total appeals and applications received by the Tax Court are informal procedures.

78. Second, the Tax Court reserves courtrooms based on a week of sittings. Thus, the Chief Judge prefers to have the difference between reservation and actual use calculated on the basis of a full week of cancelled hearings rather than cancellation by day. This method of calculation would yield different results from ours. The Chief Judge of the Tax Court wrote us, for example, "In 1994, the Court scheduled 483 weeks of hearings and 62 weeks were cancelled. Translated in days of hearing, it means that 2,415 days were available for hearing of appeals and 315 days or 12 percent were cancelled." The Chief Judge further explained, "When a week is cancelled because of settlements, the Judge to whom the appeals had been assigned does not sit and does not have to travel. During that week, he will attend to writing judgments or preparing the appeals for his next sitting." The Chief Judge also noted, "In addition to these cancellations, a large number of appeals are settled once the Judge is already on location in the process of hearing appeals. It is quite common that while a sitting is set for five days, because of these last-minute settlements it may last only two or three days. Since a hearing is set down for a specific day, if an appeal is settled then the Judge does not sit on that day. This is a very common situation. During those free days he will most likely write reasons for judgment."

79. The Chief Judge also provided the following additional explanations for the difference in rates of reservation and actual use of courtrooms.

"The difference in reservation and use of courtrooms by the Court is accounted for by the Court's method of managing appeals, which results in a considerable volume of settlements, and the bulk of these settlements do not take place in time to permit the scheduling of replacement appeals within the time limit permitted by the legislation.

The Court does not believe it would be appropriate to "double book" cases to increase courtroom use because of the major inconvenience it could cause to appellants and their counsel. Nonetheless, it may have to resort to double booking if the problem with last-minute settlements is not resolved.

The Court does not believe that it is possible to have a "ready to be heard" list because there is no backlog of cases. It also does not believe that Alternative Dispute Resolution procedures are applicable to its cases.

The Court believes that the use of its courtrooms and the time of its judges could be improved if counsel attended to the preparation of appeals earlier, with the objective of determining as quickly as possible if a settlement is feasible. If it is feasible, the Court believes it should be negotiated as early as possible so that the Court may replace settled appeals with other appeals. It is acknowledged, however, that settlements can be arrived at only when taxpayers or their counsel or agents agree to settle. The Court has brought its concerns to the attention of the Department of Justice and the Committee of the Canadian Bar, which deals with tax litigation."

80. We discussed the above matter with officials of the Department of Justice. They informed us:

"Department of Justice officials, the tax subsection of the Canadian Bar Association and the Tax Court meet twice a year at Bench and Bar Committee meetings. Methods of improving efficiency are discussed. Recently, it was agreed that the Department and the CBA would jointly prepare for consideration a proposal for mandatory pre-trial conferences as a possible solution to the problem of "last minute" settlements."

Improvements that could increase courtroom use

81. We discussed the issue of low utilization of courtrooms with judges of both courts and with lawyers. Some judges of both courts and some lawyers told us that they believe the court has fulfilled its function regardless of whether cases are heard by the court or settled by the parties prior to a hearing. Thus, the difference between rates of reservation and use of courtrooms reflects the needs of the litigants and the dynamics of the litigation process. Notwithstanding these arguments, we believe -- and many of the judges and lawyers we interviewed agreed -- that the courtrooms can and should be utilized more cost-effectively.

82. Judges of both courts are interested in making the courts more accessible and efficient. Judges suggested various ways of addressing this problem that also could improve the use of judges' time and access to the courts. The judges who made the following suggestions emphasized that none of the suggestions would work without good communication, consultation, and co-operation among judges, lawyers and litigants. The suggestions include:

managing judicial caseloads on a regional basis to adjust for different mixes of caseloads and types of cases;
sending two judges to a location for one or two weeks with a caseload that takes into account historical pre-trial settlement rates;
scheduling cases for hearing based on historical settlement rates, with a judge kept in reserve who could be sent to deal with situations where the settlement rate was unexpectedly low;
keeping a list of cases in reserve that would be available to appear in court on short notice; and
using more caseflow management techniques prior to setting the date of hearing to obtain agreement by the litigants on facts, to narrow the issues in dispute, and to determine if a settlement is possible.

Planning for facilities

83. New facilities are proposed by the courts and, once approved by Treasury Board, are funded from the budget of Public Works and Government Services Canada. Since 1990, the government has spent about $4 million to construct and to lease additional courtrooms and registry offices for the Tax Court and about $10 million for the Federal Court. Both courts and Public Works and Government Services Canada are planning to acquire space in Vancouver involving a minimum of about $10 million. Proposals totalling about $93 million for construction of new Federal Court facilities are being considered, including an $80 million building in Ottawa.

84. Most courtrooms of both courts are located outside of Ottawa. Their use is linked to such factors as the number of cases scheduled and heard in a location, and the availability of judges, counsel and witnesses.

The courts acquire facilities independently of each other

85. To date, each court has acquired facilities independently of the other. Low levels of courtroom reservation and use in most locations indicate that significant improvements are needed in planning for facilities. The practice of acquiring facilities independently is not consistent with an agreement reached by the parties on 22 January 1986. A letter of 29 January 1986 from the Minister of Justice to the Commissioner for Federal Judicial Affairs and the other parties states that it was agreed that "wherever possible both courts would share premises in Canada"; that Treasury Board submissions would indicate that "facilities are for the joint use of the Federal Court and the Tax Court of Canada"; and that the leased premises "shall be identified with appropriate signs as the premises of both courts. The actual courtrooms will be identified with court numbers only."

86. The process of consultation between the Federal Court and the Tax Court on courtroom requirements needs to be significantly improved. The Federal Court informed us that it regularly consults the Tax Court on courtroom needs. According to the Tax Court, however, consultation is inadequate, even though in many locations the Tax Court uses Federal Court facilities more often than the Federal Court. Consultation by the Federal Court with other users of its courtrooms is minimal during the planning process. The process of consultation with Public Works and Government Services Canada also needs to be improved. The Federal Court has not provided Public Works and Government Services Canada with the information necessary to help ensure that resources are used economically and efficiently. Public Works and Government Services Canada informed us, subsequent to the receipt of our draft report, that with respect to courtroom requirements the Federal Court was "unable to provide the requested usage statistics and therefore those identified in the Auditor General's report will assist [Public Works and Government Services Canada] in fulfilling its challenge role with regard to future court requirements."

Montréal

87. Since 1990 both the Tax Court and Federal Court have expanded their courtroom and registry space in Montréal. Each court acquired its space independently of the other. During the period 1993 to 1995, reservation by the Federal Court of its Montréal courtrooms ranged from 17 to 27 percent and actual use ranged from 13 to 22 percent. The reservation rate of Tax Court courtrooms by the Tax Court in 1994 was 55 percent and in 1995 was 59 percent; actual use during 1993 to 1995 ranged from 34 to 41 percent.

88. In 1994, a single-purpose building with 12 courtrooms was constructed by the private sector for the Federal Court in Montréal. This building is leased for Federal Court use at a cost of about $1.7 million annually. During 1987 to 1990 the option of leasing additional space for the Federal Court in its former premises was examined. However, in 1990 the Federal Court indicated that it would require major expansion of its space as a result of changes to the Immigration Act . In 1992, the Court requested and received approval from Treasury Board for such an expansion on the basis that it was required to meet program requirements.

89. In 1992 the Tax Court leased new facilities in Montréal at a cost of about $400,000 annually for two years. In 1994 it leased additional facilities at a cost of about $145,000 annually. The latter lease was terminated in May 1996.

Vancouver

90. From 1983 to 1989 the two courts shared facilities in Vancouver, with the understanding that the Tax Court would seek its own facilities when the lease expired. In 1988, Public Works and Government Services Canada received authority from Treasury Board to obtain facilities for the Tax Court in Vancouver. It cost about $686,000 to fit up the facilities and $262,000 annually to lease the premises. The Treasury Board Decision letter stipulates that "the Tax Court endeavour to locate in the same Vancouver location as the Federal Court in order to maximize the opportunity for sharing of courtroom facilities." The Treasury Board Decision letter is consistent with the 1986 letter of the Minister of Justice requiring the sharing of premises.

91. Although the two courts are located in the same building in Vancouver, they are on separate floors. The Federal Court leases the sixteenth floor for about $422,000 annually. The Tax Court leases the seventeenth floor for about $302,000 annually. In October 1995 the Federal Court leased additional space for about $301,000 annually. In July 1996 it also leased space for an Aboriginal and commercial case courtroom, for about $480,000 annually.

92. Each court operates independently and does not share any facilities or services with the other. Each court duplicates judges' chambers, counters, registry staff, and administrative support services.

93. The two courts and Public Works and Government Services Canada are planning to acquire space in Vancouver in 1999 for a federal judicial centre. At a minimum, this facility will cost about $10 million. The proposal calls for the construction of 13 courtrooms for the Federal Court and five courtrooms for the Tax Court. Under current plans, federal tribunals and boards would not be collocated with the courts in the new centre. As indicated above, in Vancouver the Federal Court reservation rate for its courtrooms during the period 1993 to 1995 ranged from 30 to 65 percent; actual use ranged from 22 to 45 percent. The Tax Court reservation rate for its courtrooms was 54 percent in 1994 and 59 percent in 1995; actual use ranged from 30 to 34 percent during the years 1993 to 1995.

The methods used by the courts to project courtroom requirements need to be improved

94. Projecting the future need for courtrooms is difficult. However, neither court has conducted an analysis of its past rates of courtroom reservation and use to support requests to Treasury Board for additional courtroom space. Such analysis is common in the other jurisdictions we reviewed. As noted earlier, Public Works and Government Services Canada indicated to us that the Federal Court was not able to provide it with requested statistics on usage.

95. The United States General Accounting Office and a recent study of the Metro Toronto provincial courts supported the use of an approach based on factors directly related to the time required to process different types of cases.

96. Neither the Federal Court of Canada nor the Tax Court of Canada collects data on courtroom use by case type, and consequently could not provide us with this information. Thus they are unable to estimate future courtroom requirements based on case type and related hearing times.

National Court Standards need to be reassessed

97. Facility standards for the two courts and registries do not promote efficient use of space, and in several areas exceed those in other jurisdictions. In 1993, Public Works and Government Services Canada and the courts began to develop national standards for court facilities. The standards were to be developed in the context of collocation with federal boards and tribunals and the establishment of regional federal judicial centres. Standards have yet to be finalized, but a set of draft standards has been developed. These standards have been used to acquire additional space, except courtroom space, for the Federal Court in Vancouver and Calgary.

98. The standards do not envision the two courts sharing courtrooms. They call for:

distinct styles and finishes for courtrooms - the Federal Court has "dark mahogany" courtrooms and the Tax Court has "blond oak" courtrooms;
distinct sizes and layouts - the Federal Court has medium and large courtrooms using a traditional court design layout while the Tax Court courtrooms will have smaller courtrooms on a diagonal layout; and
separate robing areas for judges of each court and separate registries and staff facilities.

99. We compared the draft National Court Standards with standards in England, the United States, Australia, New Zealand, Ontario, British Columbia and Quebec. Comparisons are difficult to make because of differences among courts in the various jurisdictions. Where feasible, we compared the standards in terms of courtroom space per person, based on various seating arrangement diagrams in the draft National Court Standards. Where this was not possible, we compared them with respect to size. The draft National Court Standards exceed those of most other jurisdictions in several major respects. Recommended courtroom space per person, or size, exceeds that of the other seven jurisdictions by about 40 percent or more. The size of judicial chambers recommended by the National Court Standards exceeds that in four jurisdictions by about 20 percent. However, one jurisdiction's standard for judicial chambers exceeded the National Court Standards by about 16 percent. Recommended registry staff space exceeds that in four of six jurisdictions by about 40 percent or more. However, the standards of two jurisdictions were equal to or higher than the National Court Standards for registry staff space.

100. When and how the draft standards are to be applied is unclear. The standards state that they "are written to be referenced and applied. They will, however, only be meaningful if enough people believe in them and are prepared to enforce their application. To help build belief and understanding in this document it has been tested and reviewed in depth. It therefore represents a form of contract between the courts as the users of the space and PWGSC [Public Works and Government Services Canada] as the providers of the space."

101. However, the Federal Court has informed us that the draft standards exceed its needs. The Tax Court indicates that it views the standards as setting upper limits. Public Works and Government Services Canada informed us, "The standards were meant to be used as a guideline, and not a minimum entitlement, for all new court requirements other than Aboriginal courtrooms. The standards serve as a kit, with selection to consist only of those components for a specific location."

102. In September 1996, subsequent to the circulation of our draft report, the Deputy Minister of Public Works and Government Services Canada wrote the courts and the Commissioner for Federal Judicial Affairs to request that the standards be reviewed. The Deputy Minister noted, "These standards were developed prior to Program Review and current economic constraints, and [the Department believes] it would be in the best interests of the Crown to conduct a review of the standards to assess their affordability and applicability to the various regions in Canada."

Proposed courtroom construction should be reassessed

103. The Federal Court has proposed construction totalling $93 million in Ottawa and other locations. It believes that its foremost need is a single building for its principal office in Ottawa. We found that the planning for Federal Court facilities in Ottawa and other centres is inadequate.

Ottawa

104. The judges of the Trial Division in Ottawa are located in the Royal Bank Centre, while Appeal Division judges are located in the Supreme Court building. The registry staff are located in six separate buildings in the National Capital Region.

105. The Trial Division has two courtrooms in the Royal Bank Centre and a "secure courtroom" at another location, used only for special purposes. It has other space in an additional building that is used only by tribunals. For the purposes of this analysis, we used only the two courtrooms in the Royal Bank Centre and the east courtroom in the Supreme Court building; generally, the Trial Division uses the east courtroom and the Appeal Division uses the west courtroom.

106. During 1993 to 1995, the Trial Division reservation rate for its three courtrooms ranged from 38 percent to 51 percent; the actual use rate ranged from 35 to 43 percent. The Appeal Division reservation rate for the west courtroom ranged from 37 percent to 46 percent; the actual use rate ranged from 33 to 42 percent. The Trial Division sometimes uses the facilities of federal tribunals and boards as well.

107. The concept of an Ottawa Federal Court building has been under discussion since the Court's creation in 1971, and various proposals have been developed. In 1989, the Federal Court proposed the construction of an $80 million Federal Court building. In February 1990, Treasury Board approved the project on a preliminary basis and Public Works and Government Services Canada subsequently spent about $2.3 million on planning and design. In February 1990, Treasury Board also approved about $2.6 million to be spent by the Court over six years. These funds, as directed in the Decision letter of the Treasury Board, were to be used "to prepare and communicate the Court's requirements for construction." To date, the Court has spent about $2.4 million.

108. In March 1996, the Federal Court provided us with information indicating that a significant amount of the $2.6 million approved by Treasury Board had been used for other projects, rather than for planning for the new building. Senior officials of the Treasury Board Secretariat informed us that "the Treasury Board expected the Federal Court to use the approved project funds for the purpose that was identified in the Treasury Board Decision letter." The Administrator of the Federal Court informed us and the Treasury Board Secretariat that the Secretariat had approved the use of the funds for other projects. The Court could not provide documentation of this approval and the Treasury Board Secretariat informed the Administrator that it did not have records of such an approval. The Treasury Board Secretariat asked the Administrator to provide a written statement of the details of the reallocation. On 25 October 1996, the Administrator provided revised information indicating that a sum of $516,522 had been reallocated to other accommodation projects. The Administrator also asked the Treasury Board Secretariat to provide him with "the relevant portions of the policies which clearly state" that the Treasury Board Secretariat should be informed "where a significant change occurs in a major initiative for which incremental funding has been approved by Treasury Board, or a specific TB approval has been received."

109. Our review of the use of the $2.6 million found that all the money had been spent and that between $700,000 and $900,000 had been spent on other projects.

110. The Treasury Board, a committee of Cabinet established by the Financial Administration Act , is responsible for financial management in the Government of Canada. The registry of the Federal Court is subject to the Financial Administration Act and Treasury Board financial management and control policies. Our concern is the principle that funds approved by Treasury Board for a specific purpose be used for that purpose and not be reallocated without the Board's explicit approval.

111. The project proposal. The proposed building has nine floors with 11 courtrooms, 45 judges' chambers and registry offices, and 351 parking spaces, 167 of which would be for the use of the Federal Court. The two existing courtrooms in the Supreme Court building would continue to be used by the Federal Court. A second phase has been studied, involving landscaping and an underground link to provide access to the two courtrooms in the Supreme Court building.

112. The scale of the proposed facilities is greater than provided for by the draft National Court Standards. The Tax Court and other federal entities will not be collocated in the building. We note that the 29 January 1986 letter of the Minister of Justice stated, "Finally, with respect to the new Federal Court premises in Ottawa, the Commissioner for Federal Judicial Affairs in conjunction with the Minister's office will co-ordinate these endeavours with Treasury Board. The feasibility of consolidating the Tax Court and other tribunals into any proposal will be analyzed."

113. At current levels of use, the overall courtroom requirements of both divisions of the Federal Court are being met adequately with four courtrooms. The proposed construction would give the Federal Court 13 courtrooms in Ottawa.

114. We concluded that consolidation of Federal Court facilities in Ottawa would be desirable. However, registry and courtroom space should be based on a demonstrated need. If the courts were merged and/or their registries consolidated, the nature of the court facilities needed in the National Capital Region would have to be reconsidered.

115. In November 1996, officials of the Federal Court and Public Works and Government Services Canada met to review the status of planning for the Ottawa Federal Court building. We asked the Department to inform us about its current position on the building project and whether it had advised the Federal Court to recommence the approval process. The Department stated that it "did not specifically advise the Federal Court of Canada to take steps to recommence the approval process for the Ottawa Federal Court building. Rather: [Public Works and Government Services Canada] officials agreed to proceed with the steps required to finalize outstanding internal [departmental] work on this project, in order to allow for informed recommendations to be made on the proposed Federal Court Building. This position was based on Federal Court officials' views, as expressed during the November 7th [1996] meeting, that the requirements for a Federal Court building in Ottawa would remain, regardless of changes in program requirements which might result from your current study on the structure of the Courts."

Winnipeg

116. The Federal Court reserved existing courtrooms in Winnipeg during the period 1993 to 1995 at rates from 7 percent to 12 percent; actual use ranged from 5 to 9 percent. In February 1996, the Federal Court and Public Works and Government Services Canada requested Treasury Board approval for new facilities in Winnipeg. The planned facilities would have a capital cost of $2.5 million and an annual leasing cost of about $763,000. The Court's submission to Treasury Board indicated that it wanted to increase its leased space by two and a half times, to comply with the specifications of the draft National Court Standards and to meet long-term requirements. In June 1996 the Administrator of the Federal Court informed us that "the need for the expansion space arose from the various difficulties which were inherent in the original design" of the existing facilities. Because this additional space could not be accommodated in the existing building, it was proposed that the existing lease not be renewed.

117. Even though the Tax Court is a major user of Winnipeg courtrooms of the Federal Court, consultation by the Federal Court administration with the Tax Court administration about new facilities was "non-existent," according to the Tax Court. The Federal Court administration provided us with a letter indicating that there had been some discussion between the courts early in the planning process. However, the Tax Court states that it "was made aware of the Federal Court's plan for new facilities in Winnipeg as a result of the circulation of [the Auditor General's] draft report."

118. Subsequent to the circulation of our draft report, officials reconsidered the feasibility of remaining in the existing facilities. In August 1996, the existing lease was renewed with some additional space at a cost of about $215,000 annually.

St. John's

119. The registry office of the Federal Court in St. John's is currently located in the provincial court offices. When a hearing is to be held in St. John's, the Federal Court borrows a courtroom and ancillary space from the Province. In return, the Court pays a fee for the services provided by the provincial court staff and for the use of courtrooms. We noted that only 56 new proceedings, at most, were filed annually in St. John's during 1993 to 1995. In 1994, the Federal Court sat only seven days in St. John's.

120. In 1995 and 1996, the Chief Justice of the Trial Division of the Supreme Court of Newfoundland indicated that this Court would not be able to accommodate the Federal Court in its St. John's courthouse in the future.

121. In January 1996, two new Federal Court courtrooms and a registry facility were proposed for St. John's, involving about $2 million in fit-up costs, and about $474,000 annually for leasing and about $239,000 annually for registry staff salaries. The facilities were designed using the draft National Court Standards.

122. At the time the proposal was made, the Tax Court indicated to us that consultation had not been adequate. It also pointed out that the Tax Court sits more days in St. John's than the Federal Court. The Federal Court informed us that "inasmuch as this is a joint Federal Court of Canada/Public Works and Government Services Canada submission, it was not necessary to consult with our colleagues from the Tax Court of Canada. Their needs had been made known to us and they were taken into account ...." The Federal Court indicated that the proposed facilities would be comparable with those in other provinces. It also suggested that the number of cases heard in St. John's would increase, since some litigants from Newfoundland now go to Fredericton, Halifax or Ottawa to have their cases heard.

123. Subsequent to the circulation of our draft report, the matter is being reconsidered. The Federal Court has reduced its request for space by about 50 percent, and Public Works and Government Services Canada is reviewing the possibility of using provincial court space.

124. The Tax Court has informed Public Works and Government Services Canada that the use of hotel meeting rooms in St. John's is no longer satisfactory, due to substantial increases in case volumes. Public Works and Government Services Canada is reviewing alternatives.

Collocation would result in significant savings

125. Further savings are possible through collocation with other courts, federal tribunals and boards, and other federal entities. The two courts lend their courtrooms to other users, such as the Canadian Human Rights Tribunal, based on availability. However, they do not believe it is appropriate to formally share or collocate with these users.

126. The Chief Justice explained to us:

"The objection that has been taken consistently by the Court is that it should not be collocated with other government boards and tribunals not only because it sits in review of their decisions. The position is this: there is a significant body of opinion which still perceives the Court as a "government court" in the sense that it is "stacked" in favour of the federal government. In order to dispel that opinion and to ensure that it is not perceived as being just another government department, commission, board or tribunal, each of the four Chief Justices of the Court has insisted that as a Superior Court, its operation should not be collocated with other federal government agencies. That has been and is the reason underlying the objection. But this position does not prevent the Court from lending its premises to such boards. Indeed, as both the Administrator and I have informed you, the Treasury Board has required the Court to do so."

127. The Federal Court has discussed its concerns about collocation with Treasury Board and Public Works and Government Services Canada. No agreement on the matter has been reached.

128. In September 1996, the Deputy Minister of Public Works and Government Services Canada wrote to the courts and the Commissioner for Federal Judicial Affairs stating that the Department believes "it is possible to collocate the courts within assets occupied by most government departments and agencies, boards and tribunals, while achieving the necessary appearance of independence." The Department suggested that the draft National Court Standards be reassessed "with a view to ensuring economic viability of future decisions on court accommodations while maintaining the appearance of judicial independence."

Halifax

129. Having single-purpose independent facilities for the courts has a cost. In Halifax, for example, Public Works and Government Services Canada has proposed that the Federal Court move to a building in which Public Works and Government Services Canada would be the only other tenant. The Court opposes this option. Public Works and Government Services Canada estimates that collocation would require a capital investment of $3 million, with annual operating expenses of about $309,000. Construction of a single-purpose facility, as the Court would prefer, is estimated to require an $8.8 million capital investment and $270,000 in annual operating expenses.

130. Subsequent to the circulation of our draft report, the matter was reconsidered and the Federal Court's Halifax registry moved to a new location, with annual leasing costs of about $42,000.

131. During June 1996 the Tax Court initiated discussions with Public Works and Government Services Canada to obtain courtrooms and judicial facilities in Halifax. The request was initiated because, according to the Tax Court, the number of cases in Halifax was increasing substantially and renting hotel meeting rooms for sittings was no longer satisfactory. Public Works and Government Services Canada and the Tax Court discussed the possibility of using the discovery room in the new Federal Court registry. The Tax Court indicated that this would not meet its requirements. The use of the Citizenship courtroom and chamber is being considered. This option would require minimal funding.

Establishing judicial centres could optimize savings

132. The establishment of federal judicial centres has been proposed by Public Works and Government Services Canada to provide access to federal courts and tribunals in one centralized location. This could provide long-term cost savings by reducing the need to lease separate registry space and hearing rooms for federal courts and tribunals. Federal judicial centres are being considered for Toronto, Montréal, Vancouver and Halifax. In addition, a joint venture with the province of Ontario to build a federal-provincial judicial centre has been proposed. However, the Federal Court and the Tax Court oppose the inclusion of tribunals and boards in these centres.

133. We believe that judicial centres are the best way of achieving economy and efficiency in courtroom and registry facilities, particularly if the registries of the courts are consolidated. We also believe that federal tribunals and boards should be collocated in such centres where cost-effective.

Registry productivity could be improved

Registry productivity varies

134. Registry operations primarily provide information services to litigants and counsel, file management services to the courts, and registrars and other personnel during courtroom proceedings.

135. Neither court could provide us with data on the time and resources spent on these different activities and neither has standards for task performance. However, they did have information on recorded entries. In the absence of task performance standards, we believe that the best available indicator of workload is recorded entries, weighted to reflect work done on a file.

136. A recorded entry is a document or event recorded in either court's management information system. Each entry represents a unit of work associated with each step in processing a case. All entries would be treated as equal if there were no differences in the amount of work that each entry represented. Based on our observations, we believe that entries associated with certain kinds of proceedings in the Federal Court needed to be weighted because they represent less work than other entries. For the purposes of our analysis, we assigned all Federal Court entries other than those associated with immigration, prairie grain advance payments and certificate work a weight of 1.0. Immigration and prairie grain advance payment entries were assigned a weight of .50 and certificate entries were assigned a weight of .25. Based on our analysis and consultations, we believe that the overall number of weighted entries made by a registry in a given time period reflects its workload. We did not believe that Tax Court entries needed to be weighted because there were no major differences in the workload represented by types of entries. It should be noted that the registry productivity rates we developed for each court should not be compared, because the work value of an entry has not been standardized between the courts.

137. We found that productivity varies substantially among different registry offices in the Federal Court. The variance remains whether all entries are assigned equal value or are weighted using different assumptions. Exhibits 8 and 9 summarize the productivity of the courts' registries. For example, the Toronto registry of the Federal Court handles about three times the volume of work of the Vancouver registry, but at only twice the annual operating cost. As well, in 1994, Toronto and Montréal had about the same annual operating expenditures of about $2 million, but Toronto processed about 34,000 weighted entries compared with about 19,000 weighted entries for Montréal. We identified a number of practices that affect productivity. These are discussed below.

Exhibit 8—Federal Court Registry Offices - Productivity

Exhibit 9—Tax Court Registry - Productivity¹

138. The Federal Court uses recorded entries as an indicator of workload in Part III of the Estimates it provides to Parliament. While the Federal Court Registry agrees that recorded entries are a valuable indicator, it does not agree with the above analysis. It wrote us as follows:

"We agree that recorded entries are a valuable indicator of Registry work. In addition to recorded entries, the Registry of the Federal Court has developed reporting systems to capture the following elements that are used in assessing relative workloads of operational sections: number of new proceedings; days in court; documents issued; hearings; motions in writing; decisions and reasons. As well, the Delay Reduction program is a valuable source of information for management planning.

On consideration of the report's weighting, we do not agree with the formula adopted. At a minimum, we consider that hearings and decisions should also be taken into consideration.

The study allocates a weighting of .5 to all immigration entries and prairie grain advance certificates, and a weighting of .25 for certificate entries, apparently on the consideration that there are efficiencies involved in dealing with a large volume of proceedings that follow common procedures. Notwithstanding this, it is noted that there has not been a corresponding weighting given to Tax Court entries."

139. The Registry also wrote that the weighting does not give a realistic indication of relative workload. It points out:

"For example, the formula used does not take into account that the Federal Court's Montréal office rates almost twice as high as Toronto on returnable motions (74.7 per full time position (FTE) compared to 46.2). Vancouver dealt with relatively more judgments and orders without personal appearance than Toronto; Vancouver had more days in court per FTE than any other office."

140. Although we recognize that the number of recorded entries is not a perfect measure of registry workload, it is the best overall indicator available. Other measures such as days in court, motions in writing, and new proceedings are useful management statistics; however, if used as productivity measures, each would reflect only the work associated with that specific activity. Recorded entries is a superior indicator because it reflects the work associated with a range of registry activities (entries are made for all significant activities in registry processing). Further, the number of recorded entries is highly correlated with the other measures of workload used by the Federal Court. Thus, incorporating other variables as the Federal Court suggests does not significantly change the results of our analysis.

Factors that affect productivity

141. File management practices. Certain registry file management practices in the Federal Court need to be reviewed. Registry staff carefully scrutinize documents filed with the Court to ensure consistency with Court rules. Senior registry officers routinely check the work of junior registry officers. In addition, we found that registry officers in Ottawa review the work performed in local offices, which duplicates the work already performed by registry officers in the local offices.

142. Registry officials explained that without these practices, court time would be wasted if there were an error by the registry or if documents were incomplete or inconsistent with Court filing requirements. In our view, the need for such review should be assessed. We note that it is the responsibility of those who file documents to ensure that the documents comply with court rules. Other jurisdictions seldom have more than one person scrutinizing documents, and such scrutiny focusses on whether minimum requirements have been met.

143. Document redundancy. When documents are filed in a local registry of either court, a minimum of two files are maintained - the Ottawa file and the local file. If the case goes to a hearing, a "third file" containing selected documents may be created for the presiding judge. If parties to a case are not in the same location, there may be additional files in other local registries. In particular, cases of long duration produce a significant amount of paper and increase copying and storage requirements. The purpose of maintaining duplicate files in a local office is to provide judges, litigants and others with access to filed documents. However, the duplicate files may not be complete copies of the files in Ottawa. Once a case has been set down for hearing, or a need arises for the file to be updated, the local registry ensures that its file is complete.

144. Some of the judges we interviewed questioned the need for maintaining duplicate files for all cases, and some indicated that duplicate files were not needed at all. They noted that litigants already receive copies of all significant documents. In general, other jurisdictions do not maintain duplicate files. The usual practice is to maintain a central registry of court files in one city. In some jurisdictions, members of the public may access the court computer to obtain a list of documents filed at the court registry. The usefulness of duplicating all files maintained by the Federal Court and the Tax Court should be reassessed and, if duplicates of certain files are needed, ways of providing access to these files through information technology should be examined. The Tax Court informed us that it supports "the concept that with advanced technology the duplicate files will become obsolete."

145. Procedural advice. To help litigants use the services of the courts, procedural advice is now available from central and local registries by telephone or in person. Neither court maintains sufficient records of who requests procedural advice, the nature of the advice requested and the time and resources spent providing such advice to allow for an analysis of more cost-effective alternatives.

146. Courtroom staffing levels. The level of staffing for courtroom hearings needs to be reassessed. In the Federal Court, most proceedings are staffed by a court registrar, a separate court usher and a court reporter hired under contract as required. The Tax Court does not have a separate court usher. Staff for local courtroom hearings, including registrars and court reporters, are hired on contract and used as required. In some jurisdictions, court reporters have been replaced by individuals who audiorecord court proceedings. In one province, responsibility for both the registrar and the recording functions during a hearing is handled by the same individual. The Tax Court is testing this approach.

147. Impact of caseflow management on staffing. Caseflow management requires that registry staff actively monitor the progression of cases to ensure adherence to schedules. This may require staff with higher levels of expertise. The Federal Court is proposing that prothonotaries be trained to preside over certain types of case management conferences. The prothonotaries would be responsible to the Chief Justice or the Associate Chief Justice, depending on whether they work in the Appeal or Trial Division of the Court.

Local and central registry roles should be assessed

148. Addressing the above issues will require a fundamental assessment and change in the way registries do business. We reached this conclusion on the basis of the following:

In 1994-95, it cost a total of about $1.4 million to operate small Federal Court local offices in Halifax, Fredericton, Québec, Winnipeg, Calgary and Edmonton. Even if the courtrooms were kept available for all users, we estimate that savings of about $700,000 annually could be obtained by reducing the operations of these local registries to only providing direct support for judges during hearings. Other services of the registry could be transferred to larger offices or provided under contract by provincial court registries.
Further savings are possible. If Federal Court registries in Montréal, Toronto and Vancouver could operate at the best productivity levels among these centres from 1994 or 1995, we estimate, using productivity rates calculated on the basis of both weighted and unweighted recorded entries, that savings could amount to about $1.0 million to $1.5 million annually.
The Ottawa registry of the Federal Court reviews the work of local registries and provides additional services to the Court. Based on the best productivity rate in the larger centres, we estimate that the annual cost of such review and additional services to the Court, using both weighted and unweighted recorded entries, could be about $1.0 million to $1.9 million. The need for such services should be reassessed.
The Tax Court also operates registries in Montréal, Toronto and Vancouver. The work of these Tax Court registries could be handled by a consolidated registry of the two courts in these cities or in a central location. Alternatively, the productivity of the Tax Court registries could be increased. We could not estimate possible savings from consolidation because the Tax Court did not have information comparable with that of the Federal Court on the workload of local registries.
Increased use of technology could allow the services available at local offices - document filings, procedural advice and review of files - to be provided more cost-effectively from local registries, or from larger centres such as Montréal, Ottawa, Toronto and Vancouver, or from one central location.

149. The Chief Justice of the Federal Court wrote to us expressing concern that the policy and statutory bases for the establishment of the local registries not be overlooked. He pointed out that "one of the policy considerations animating the establishment of the Federal Court in 1971 was greater accessibility to the Court." He also noted that when the Court was created, the Minister of Justice explained to Parliament that one of the reasons for the Court was to "bring justice to the people, decentralizing the operation of the present court, make the court more accessible, quicker and less expensive."

150. We agree that holding hearings throughout the country is important for maintaining accessibility. However, we concluded that, given the passage of time, a re-examination of the respective practices and roles of local and central registries in both courts is required to determine if access to the courts as well as cost effectiveness can be improved. Although each court could proceed independently to assess its registry operations, we believe that the assessment should cover the registry operations of both courts.

Contracting procedures

151. We reviewed contracting procedures in the two court registries. The registries are designated as branches of government for the purposes of the Financial Administration Act . As indicated previously, this means that they are subject to government financial management and control legislation and Treasury Board policies.

152. In 1994-95, the Tax Court spent about $800,000 for court reporter services and about $350,000 for court registrar services. As a result of a recent internal audit, the Tax Court Registry has changed its sole-source procedure to a competitive process for obtaining court reporter services. Court registrar services continue to be obtained on a sole-source basis. The contracts for these services in Toronto and Montréal exceed the $30,000 limit for sole-source contracting at the time. The sole-source contracting limit is now $25,000.

Information technology: opportunities for efficiencies

153. Information technology is having a profound effect on courts around the world. The pace of new developments continues to increase, bringing many significant opportunities to improve the efficiency and effectiveness of the court system. Other studies of the Federal Court and Tax Court have reached similar conclusions.

154. In its 1994-95 Annual Report, the Canadian Judicial Council expressed, with certain cautions, a positive view of the use of new technologies in Canadian courts. The report stated:

"Canada's judiciary is turning increasingly to new technologies as demands on the courts rise at a time of financial stringency.

New information technologies have the potential to reduce delays, cut costs, increase accuracy and broaden access to court judgments. Progress on any or all of these matters enhances the administration of justice and fosters greater awareness of the courts and their work."

155. The report cautioned that several issues need to be resolved, including ensuring security and reliability of electronic texts, standardizing formats for preparing and distributing documents and standardizing identification of judgments retrieved from electronic services. It also noted that on 30 June 1995, the Judges' Computer Advisory Committee widely distributed for comment proposals for a standardized citation style for electronically published reasons for judgment. While the adoption of such uniform electronic standards will not resolve all issues of concern, the report concluded that it will remove a significant impediment to the adoption of new technologies.

Priority should be given to information technologies to increase court efficiency

156. The Tax Court and the Federal Court now spend in total about $1.7 million annually on information technology. Our research indicates that the courts should expect to allocate annually five to eight percent of their combined budgets, or $2.5 million to $4 million, for automation support. Such an investment, combined with consolidation of the information technology functions and re-engineering of rules and practices, could yield significant benefits.

157. We identified 10 areas in which information technology developments have particular relevance to the Federal Court and Tax Court. Other jurisdictions are using these technologies to varying degrees. The technologies include:

videoconferencing, in which in-person proceedings are replaced by video and audio connections between parties in different locations;
automated scheduling, in which a system helps to co-ordinate available time to optimize the use of resources;
automated caseflow management, in which a tracking system assists in the monitoring of caseflow management deadlines at each step in a proceeding;
facsimile filing, in which filing court documents by facsimile can provide an alternative to in-person filing;
document imaging, in which images of documents on paper are captured electronically;
electronic filing and document interchange, in which electronic documents replace paper;
automated workflow management, in which a system manages the court's workflow by routing electronic documents through different stages in court operations;
audiorecording of proceedings, with transcription only as required, eliminating the need for court reporters;
computer-assisted transcription, in which court reporters create a transcript of court proceedings, providing immediate access to the transcript during the proceedings; and
electronic libraries and Internet access, in which legal and court information is made available electronically to users within and outside the courts.

158. We found that the two courts are planning or exploring many of the above information technology initiatives. The Federal Court developed the Proceedings Management System in 1990 to maintain an automated index of documents filed in cases before the Court. It conducted a pilot test of document-imaging technology, and plans a pilot test of videoconferencing. An automated scheduling component is being developed for the Proceedings Management System.

159. The Tax Court uses the Appeals Management System, the function of which is similar to the Federal Court's Proceedings Management System. The Tax Court has developed plans to replace its Appeals Management System. It also plans to pilot test the audiorecording of proceedings and is planning to publish the Tax Court Reports in electronic format.

160. However, the use of information technology in both courts is still modest relative to potential opportunities. The systems used have evolved in response to ever-increasing caseloads and the complexity of legislation and jurisprudence. While both courts use similar technology, their investments have been made and continue to be made independently.

161. We strongly recommend that high priority be given to exploring information technology opportunities, in particular electronic filing and document interchange and videoconferencing.

162. For example, the Federal Court and Revenue Canada manually process about 11,000 applications for income tax certificates and 2,500 applications for goods and services tax certificates each year. An automated process could be put in place whereby applications would be filed and certificates issued by electronic data interchange. Subsequent to the circulation of our draft report, the Federal Court has indicated its plans to "investigate the possible automation of filing tax certificates."

163. Videoconferencing may be of particular relevance, given proposed changes in caseflow management in the Federal Court. Without its use, much more judge travel may be required because of the increased need for regular contact between judges and the parties to a case. The use of this technology could also decrease legal costs related to travel by counsel and parties, and increase the availability of expert witnesses.

164. Adopting these technologies in a way that simply replaced existing electronic or manual systems would most likely be inefficient. The greatest opportunity offered by these technologies will be to allow the courts to streamline their current processes, removing tasks that are of no added value and enabling the courts to manage their caseloads proactively. We note that both courts have developed plans to revise rules and procedures to complement their technology initiatives.

165. Although we believe both courts could benefit significantly further from technology, planning and implementing such projects requires careful assessment.

166. As the 1994-95 Annual Report of the Canadian Judicial Council observes: "As much as an issue of technological change, this is a question of the way the judiciary organizes itself and develops and applies uniform standards that meet not only the needs of the courts but of all the stakeholders in the judicial system."

Steps to reduce risks in information technology development

167. Based on our experience in reviewing systems in the federal government, it is clear that as projects increase in scope and budget, the inherent risk of failure increases dramatically. We suggest that in developing new technologies, the courts reduce their risks by ensuring that:

the ultimate users of the systems take a lead role in the development process;
requirements are clearly stated and agreed to by both users and developers;
projects are continuously monitored so that any needed corrective action can be taken early;
projects are periodically evaluated and rejustified against the original operational need;
large automation projects are broken down into smaller, self-contained products that can be completed within six months or less;
resources are pooled and partnerships with other organizations in the public and the private sectors are formed to make best use of valuable expertise and resources; and
off-the-shelf and packaged products are used in place of custom development whenever feasible.

168. Neither court has documented its methodology for development of information technology systems. However, the courts indicate that they are aware of the above principles. If they proceed with their many initiatives, the systems development methodology should be documented to ensure the quality of new systems.

169. Provision must be made for users to become knowledgeable about new information technologies. Further, not all potential litigants may have the knowledge and resources to access the courts using the new technology; provision will have to be made to accommodate these parties.

170. Facilities will have to incorporate the needs of the new technology. The courtrooms and the judges' chambers will need to be designed for and equipped with computer networks, teleconferencing and videoconferencing equipment. As noted above, planning for local registries will need to be reassessed. With the exception of support in courtrooms, local registry support for file management and counter services may no longer be required.

Benefits of consolidation of information technology initiatives

171. Information technology represents an area where administrative and registry consolidation would yield significant benefits. The two courts now develop and implement new technologies independently. As an alternative, the courts could implement systems that would be shared by both courts and possibly by others. For example, the Federal Court Proceedings Management System could be extended to serve the caseload of the Tax Court, at considerably less than the projected cost of replacing the latter's Appeals Management System.

172. We believe that the best option is for the courts to consolidate their information technology functions and expertise. We estimate that by eliminating duplication and by sharing court systems and the related hardware, communications networks and maintenance services, the consolidated operations would save about $5 million over the 10-year life of a system.

173. Consolidation would make it possible to justify investments that are beyond the separate means of each court. It would pool accumulated knowledge and experience in applying technology to court processes, making the full use of information technology opportunities more likely than if each court were to proceed on its own.

Caseflow management is an important initiative

174. Caseflow management is a major development affecting courts and tribunals in many jurisdictions. Both courts use and are proposing various additional techniques to manage caseflow. It has significant implications for all aspects of court operations, including courtroom facilities, information technology and registry staff functions. Caseflow management is an important initiative that should be actively assessed and expanded by the courts.

175. Traditionally, the pace of litigation has been left to the parties and their counsel. In contrast, caseflow management systems allow courts to:

ensure the timely disposition of cases by assigning them to tracks according to complexity and resources needed, and monitoring their progress;
encourage settlement by having the parties meet often and by making available techniques other than going to court to resolve legal disputes; and
optimize the use of judge time and courtrooms.

176. In July 1995, the Federal Court circulated a proposal to extend caseflow management to all types of cases within its jurisdiction. The proposal was circulated widely to users of the Court as well as to the legal profession, academics and other interested persons. A revised proposal was circulated in July 1996. The Court has notified users that it plans to implement caseflow management procedures on 1 January 1998.

177. The Tax Court also uses caseflow management procedures. For example, it uses status hearings in general procedure cases to call litigants to appear before the Court and to set trial dates and dates by which intermediary steps must be completed.

Publication of court decisions

Public policy issues need to be resolved

178. We concluded that there are public policy issues that need to be resolved, concerning access to decisions of the Federal Court and the Tax Court and the extent to which the cost of producing reports of "official" decisions should be recovered, or production privatized.

179. The Federal Court Act requires an official, bilingual law report series. This series is published as the Federal Court Reports. The Act states that the series may contain "only such of the decisions of the Court or such parts of decisions as, in the opinion of the editor, are of sufficient significance or importance to warrant publication." In 1995-96, the Reports contained only about six percent of Federal Court decisions in full text and about 26 percent in digest form.

180. The Commissioner's office explained that cases not selected for publication "are cases which do not involve legal issues in that the decision turned on the facts or where the legal issues have already been settled by previous case law." It further explained that "the editorial staff of the Federal Court Reports takes those law judgments selected for publication by the Editor and performs a thorough process of checking, copyediting, caption and head note writing and preparation of lists of cases, statutes and learned writing judicially considered so that the published law report has many valuable features not found in a service containing only law judgments." The Federal Court Reports are edited to a standard of 100 percent accuracy and are published in the two official languages about seven months after decisions are released by the Court.

181. The Tax Court has requested about $320,000 annually from the Treasury Board to publish selected decisions in electronic format in a joint venture with a private company, as well as to publish in hard copy selected employment insurance decisions. These decisions, like those in the Federal Court Reports, would be edited to a standard of 100 percent accuracy. The proposed electronic version of the Tax Court Reports will be considered "official."

182. Increasingly, legal researchers rely on electronic database services provided by private sector companies, law societies and universities. Currently, almost all Federal Court decisions and Tax Court decisions are available in both official languages, in print and electronic format, from private sector services soon after their release by the courts. In addition, the edited version of selected decisions published in the Federal Court Reports by the Commissioner for Federal Judicial Affairs is also made available electronically by private sector companies many months later.

183. The Supreme Court of Canada, the United States Supreme Court, the United States federal courts and the Federal Court of Australia currently provide access to all of their decisions through the Internet.

Cost recovery or privatization should be considered

184. In 1995-96, the Commissioner for Federal Judicial Affairs spent about $830,000 on the Federal Court Reports. Most of these costs were for editing. None of these costs were recovered. There are about 700 subscribers some of whom receive multiple copies. About 900 copies of each issue of the Reports are distributed. About 23 percent of the copies are sent to law firms and about 22 percent are sent to publishing companies who further distribute the Report.

185. The Canada Communications Group spends about $141,000 to print and distribute the Federal Court Reports. The Commissioner for Federal Judicial Affairs paid the Canada Communications Group about $162,000 for certain judges, libraries, and federal, provincial and municipal organizations to receive the Reports without paying for printing and mailing. The cost of $141,000 for printing and mailing is recovered from other subscribers. Copies of decisions and other documents are also sold by the Federal Court. In 1995-96 about $201,000 was collected from the sale of these documents and deposited in the Consolidated Revenue Fund.

186. Recovering from subscribers the expenditures on the Federal Court Reports and the proposed Tax Court Reports would save up to $1.3 million annually. The willingness of subscribers to pay for the Reports would be a good indicator of whether the Reports are needed, or whether the decisions already provided by the private sector would suffice. Decisions of the Australian Federal Court are edited, head-noted, and published by a private sector company at no cost to the Court; subscribers to the Reports purchase them from the company. This alternative should be considered for the Federal Court Reports and the proposed Tax Court Reports.

An "official" electronic version should be considered

187. If universal and equal access to court decisions is a public policy priority, then all court decisions could be made available electronically, with no cost recovery by the government, in an easily accessible, standardized, bilingual format. Electronic distribution of all decisions in "official" form would allow for authoritative citation in court and it would make decisions more broadly available in both official languages. Making all decisions available would avoid the possibility that the edited collections inadvertently favour the selection of some types of decisions over others.

188. A report prepared for the Commissioner for Judicial Affairs in 1996 noted the significant potential impact of the Internet on the courts. The Federal Court and the Commissioner for Federal Judicial Affairs intend to distribute decisions of the Federal Court on the Internet. The Commissioner for Federal Judicial Affairs has requested $50,000 annually from the Treasury Board to provide Internet access to all Federal Court and Tax Court decisions. However, whether the decisions on the Internet will be deemed to be "official" has not yet been decided.

189. We discussed electronic distribution of court decisions with the Office of the Registrar of the Supreme Court of Canada. The Office of the Registrar told us that it is the policy of the Supreme Court of Canada to make decisions universally accessible. Equal access for all is the ideal. Supreme Court decisions are now available on the Internet, but they are valid only for research; official citation must refer to the Supreme Court of Canada Reports. The Court is encouraging the legal profession to become familiar with electronic research techniques, and it notes that the Canadian Judicial Council also is encouraging courts to make their decisions and reasons for decisions available via the Internet and to adopt common standards.

190. The Supreme Court of Canada is preparing for the transition from only paper-based to electronic publishing and distribution. The timeframe for the completion of this endeavour is uncertain. However, the Court believes the change is inevitable due to the increased demand for such services. Thus, its intention is to eventually have an official electronic version along with the official printed version of decisions and reasons for decisions.

Court fees

191. Both courts emphasize the principle that the courts should be accessible to litigants. However, they also charge various fees. For the most part, the fees are set by the courts, approved by order-in-council, and published in the Canada Gazette. For example, the Tax Court levies a fee of between $250 and $550 on the party who commences a proceeding under general procedure. The fee for commencing an action against the Crown in the Federal Court is two dollars. This fee does not cover the cost of collecting it. The fee is established by the Federal Court Act .

192. The level of fees is not related to the cost of operating the courts. We asked the courts to explain to us why fees are charged and how the amounts to be charged are determined. The Administrator of the Federal Court informed us that "there would be little benefit from what could only be a speculative reply, since fees are set by Parliament and by the Court." The Tax Court informed us that while it had not conducted a formal analysis, the intent of its fees was to generate some income for the government. The amounts were set "such that it would not cost more in clerical fees to collect than the fees generate." Further, the fees would not be so high as to prevent legitimate appeals, but would be high enough to discourage frivolous cases.

193. In England, it is government policy that the operational costs of civil courts be recovered through fees. The charging of fees is also seen to deter frivolous litigation, but provision is made to avoid having people deterred from bringing meritorious cases by their inability to afford the fees. The rationale for the collection of fees in the United States federal courts is that if private entities decide to use the courts to settle their differences and they are able to pay for the services, then the public should not be covering the entire burden - if individuals cannot afford to pay for litigation, then the filing fee is waived. The Australian government has policies similar to those of England and the United States.

194. We believe that the rationale for the fees and the amounts charged in the Federal Court of Canada and the Tax Court of Canada should be made explicit. After an appropriate length of time, the fees should be assessed to determine if they are achieving their intended objectives.

195. There are other areas where fees could be considered. For example, as noted, the registries of both courts provide extensive quality control of filed documents. If these services are continued, fees for them may be warranted. As well, the registry of the Federal Court prepares orders and the appeal and case books for the Appeal Division. In other jurisdictions, the litigating parties are responsible for preparing these documents; the Court could consider charging for these services or delegating tasks to the litigants. Fees could also be charged for cases involving commercial disputes such as intellectual property and admiralty disputes. A factor that should be considered in setting fees is that the amount charged should not be so low that it inhibits the development of alternative ways of resolving civil disputes. The courts should continue to have broad discretion to waive fees where they would lessen access to the courts.

Future funding for the courts

196. The improvements and savings we identified are significant in relation to the size of the expenditures of the two courts. We note that a report prepared for the Commissioner for Federal Judicial Affairs in 1996 concluded that among the related judicial bodies, including the Tax Court and Federal Court, there are duplications of "administrative and operational support, including financial services, informatics, human resources, materiel and facilities management, libraries, pay and benefits, and translation services."

197. The Federal Court is concerned about its ability to continue to meet increasing client demands within current and future fiscal constraints. Making the identified improvements would yield cost savings that could be used to provide resources necessary for the Court to meet future challenges. In its 1996-97 Estimates the Tax Court noted, "Many cost reduction exercises and strategies have been implemented over the past few years to accommodate shrinking budgets but the Court expects it may be forced to reduce the number of hearings to comply with 1996-97 resource levels." However, during our audit, the Chief Judge of the Tax Court informed us that the Court is able to meet the demands of its caseload within its current budget.

Other matters: legislative authority to sit as assessors

198. Federal Court judges also sit as members of the Competition Tribunal, as judges of the Court Martial Appeal Court, and as assessors under the Emergencies Act , Energy Supplies Emergency Act , Health of Animals Act , Pesticide Residue Compensation Act , and Plant Protection Act .

199. Section 14 of the Pesticide Residue Compensation Act provides for the appointment of an assessor to hear and determine appeals of compensation awards, a provision that is adopted by reference in the Health of Animals Act and Plant Protection Act . Before amendments in 1990, the Governor in Council could appoint assessors "from among the judges of the Federal Court and the superior courts of the provinces." The 1990 amendments, which came into force in 1992, provide the Governor in Council with authority to appoint an assessor only "from among the judges of the superior, district or county courts of the provinces." The Federal Court registry continues to be the registry for such cases. However, Federal Court judges have acted as assessors since the 1990 amendments came into force. We discussed this matter with the Administrator of the Federal Court. The Chief Justice concluded that there is a lack of authority for Federal Court judges to sit as assessors, and the practice has been discontinued since we brought the 1992 proclamation of the amendments to the attention of the Court.

Section 3: Merger of the Courts

The potential benefits of merger outweigh the potential disadvantages

200. Merger of the courts is the most contentious issue we reviewed. There are potential benefits and disadvantages of merging the courts. On balance, we concluded that the potential benefits of merging the courts outweigh the disadvantages, and that specific measures could be taken to minimize potential disadvantages. However, the Tax Court is adamantly opposed to merger and it believes that the disadvantages of merger outweigh any advantages. The following sections outline the debate.

201. Merger of the courts would involve combining the judges of the Federal Court Trial Division and the judges of the Tax Court into one court. We assessed merger from various perspectives. Merger of the courts offers significant benefits from the standpoint of its impact on achieving the improvements we identified as needed in registry services. A consolidated registry serving two courts would have to be an entity separate from either court. If the two courts were merged into one, there would no longer be the potential problems of "serving two masters" with potentially conflicting demands and priorities. Further, a consolidated service would not need to be independent from a merged court - it could be an integral part of a merged court in the same way that the two existing registry services are now an integral part of their respective courts. Merger would thus provide greater assurance that the cost savings and other service improvements we identified in Section 2 would be realized, because it would make it more likely that a consolidated registry would function smoothly.

202. In principle, merger also could bring benefits by providing more flexibility to deal with caseloads and possible improvements in the use of judges' time. Both courts have jurisdictional areas that are susceptible to rapid expansion and contraction of caseloads. A merged court would have more judges to deal with short-term caseload increases. As well, as discussed earlier, over 1,000 scheduled courtroom days are cancelled annually in the Tax Court due to settlements and over 400 scheduled courtroom days are cancelled annually in the Federal Court Trial Division. It is possible that a significant portion of these days could be used to hear cases in a merged court.

203. A larger judiciary could also improve the scheduling efficiency of cases and travel. For example, a combined caseload could increase the timeliness of hearings of cases in smaller centres that are now scheduled only when enough cases accumulate to warrant a trip by a judge. One trip by a judge of a merged court could take the place of separate trips by a Federal Court judge and a Tax Court judge.

204. Federal Court judges generally are neutral or in favour of merger, as are counsel appearing before the Federal Court. The judges who favour merger believe that it would create an enhanced national institution and it would help them deal with the caseload of the Federal Court Trial Division. However, the Federal Court was concerned for constitutional and other reasons that it not be abolished and that the name of a merged court should be the Federal Court of Canada. Some judges were also concerned about how seniority would be established if the courts were merged.

Merger is opposed by the Tax Court

205. The majority of judges of the Tax Court are strongly opposed to a merger of the courts. The most significant reasons they gave for opposing merger are that:

most of the significant problems in registry services were related to the Federal Court, not the Tax Court (this is also the view of the Tax Court Registry);
the improvements needed in registry operations could be gained through the consolidation of the registries of the two courts without merging the judges of the courts;
tax matters should be heard by a specialized court;
the Tax Court is an efficient and effective organization that would be lost if it became part of the Federal Court;
there would be increased delays in hearing tax cases if the Tax Court were merged with the Federal Court;
there would be no increases in productivity from a merger because Tax Court judges are already working at full capacity; and
judges of the Tax Court joined the Court with the understanding that they would deal primarily with tax matters, and they would view a merger that required them to deal with other matters as a breach of this implicit agreement.

Views of Revenue Canada and the Department of Finance

206. We sought the views of Revenue Canada and the Department of Finance on the issues identified in the order-in-council. Revenue Canada expressed the following view with respect to the merger of the courts:

"Revenue Canada supports a judicial process that is timely, efficient and readily accessible to taxpayers, at minimum cost, and is informal with respect to small claims. Such a system would employ case management, status hearings and pre-trial conferences that ensure the currency of cases and also facilitate resolution without proceeding to trial. Revenue Canada believes that taxation cases should be assigned to judges experienced in taxation to ensure quality and consistency in decisions."

207. The Department of Finance stated:

"The Department of Finance does not have any overall view on the possible reorganization of the Tax Court and Federal Court. We would like to mention two points, however. First, insofar as any reorganization may offer an opportunity for cost savings we are favourable. Second, we consider it desirable that, if there were any reorganization, the reorganization should not have the effect of slowing down tax cases by making it harder to obtain trial dates."

Views of tax lawyers

208. The majority of tax lawyers who provided us with their views stated that they are very satisfied with the services provided by the staff and judiciary of the Tax Court. The majority of private tax lawyers are also opposed to merger. They would prefer that the Tax Court continue as a separate court, and expressed concerns that merger could decrease the level of service and the quality of decisions. They also pointed out that delays in hearing tax cases could result in prolonged lack of clarity about the meaning of tax provisions, resulting in loss of revenue to the government and uncertainty for taxpayers. Tax counsel believe that, at a minimum, judges experienced in tax law are needed to hear tax cases and that, if the courts are merged, a separate tax division should be established.

209. Some tax lawyers and Tax Court judges noted that certain current procedural difficulties would be eliminated by having taxation issues dealt with by judges of a superior court. However, they preferred that the Tax Court be made a superior court that would remain separate from the Federal Court.

210. The key concerns of the above parties regarding the need for a specialized court to hear tax matters and to maintain efficiency in hearing such matters as well as their concerns about possible improvements in court productivity are discussed below.

Is a specialized court to hear tax cases needed?

211. On balance, we concluded that a separate specialized court is not required to hear tax cases or to ensure that such cases are handled efficiently. However, Tax Court judges and private sector tax lawyers argued that the nature of tax cases requires that they be heard by a specialized court. Tax law is generally recognized as complex and continually changing. In such areas of law, specialized judges are seen as better able to evaluate evidence and legal arguments quickly and astutely, to remain up-to-date with new developments, and to have a better appreciation of how individual issues relate to the overall legal scheme. Further, in the area of tax law, uniform interpretation is important and a specialized court was seen as more likely to lead to consistency and coherence in judicial decisions.

212. The complexity of tax law and the need for consistency in decision making has not led all countries similar to Canada to establish a separate tax court. Australia does not have a tax court. England and New Zealand do not have separate tax courts, but each does have a tax tribunal whose decisions are appealable to a court of general jurisdiction. The United States does have a separate tax court. In Canada, until 1991, tax matters were heard by both the Federal Court Trial Division and the Tax Court; tax cases initiated prior to 1991 are still heard by the Trial Division of the Federal Court. Further, it was pointed out to us that the Federal Court already deals with specialized areas such as immigration appeals, intellectual property disputes, federal administrative law and admiralty cases. Therefore, we were told that the inclusion of tax matters would in principle only involve adding another speciality. Federal Court judges told us that they would have no difficulty in handling tax cases efficiently and competently.

213. It was also brought to our attention that if the courts were merged there was a potential for conflict in instances where tax cases heard in the Tax Court are, under the pre-1991 rules, awaiting a subsequent hearing by the Trial Division of the Federal Court. Some judges suggested that this short-term problem could be resolved by having such cases heard by the Appeal Division.

The efficient handling of tax cases needs to be maintained

214. One of the primary concerns of Tax Court judges and others was the need to maintain efficiency in the handling of tax cases. We agree that this is an important consideration. We believe that this concern can be addressed by ensuring that efficiency in handling tax cases is a priority of a merged court. To maintain efficiency, the existing procedures in the Tax Court legislation and Rules of the Court should be retained in a merged court. For example, we found no reason why the informal procedures and status hearings of the Tax Court could not be continued in a merged court. Informal procedures could continue to be used to deal with relatively small tax appeals, and the status hearings used to reduce delays could be adopted by the merged court.

Improved court productivity

215. The Tax Court told us, as indicated above, that merger would not result in an overall increase in court productivity because Tax Court judges are already working at full capacity. We tried to address the issue of court productivity quantitatively. For example, would a combined court allow for more cases to be heard and for cases to be heard more quickly? To assess this type of issue quantitatively would require data on the time judges spend preparing for a hearing, hearing a case, and researching and writing a decision as well as on other judicial activities.

216. With the exception of data on reservation and use of courtrooms, there was an absence of data on the time needed by judges to deal with cases. A detailed assessment of the Tax Court's arguments would require an in-depth review of such matters in both courts. Moreover, it would require that both courts develop objective and reliable procedures for tracking how judicial time is used.

217. While we recognize that more study may be useful, we believe there is sufficient information to conclude that there are significant potential benefits from merging the courts. These benefits have been discussed previously.

Structure of a merged court

218. There are several ways the courts could be merged. These include:

establishing a separate Tax Division within a merged court, in addition to the existing Trial Division and Appeal Division;
merging the Tax Court and the Trial Division into a single division, but maintaining a tax specialization, for example, a "tax list;" or
merging the Tax Court and the Trial Division into a single division.

219. Creating a separate Tax Division would address the concern of tax lawyers that tax matters be heard by specialized judges, and the concern of Tax Court judges that they continue to be able to hear primarily tax cases. Current Tax Court judges could opt to have ex officio appointments to the other division, while new appointments to the court would be ex officio to both divisions. Some judges of the Tax Court indicated that if merger did occur they would prefer that a separate Tax Division be established. Some judges of the Federal Court indicated that to ensure equity among the judges they preferred a complete merger, without special status for Tax Court judges.

220. It is possible that merger could be facilitated if a separate Tax Division were established. This could minimize disruption and allow time to resolve differences in approaches to judicial administration. Over time, the need for two divisions may disappear. New appointees could be chosen with the appropriate qualifications to maintain the court's expertise in tax matters. The continuance of a separate division, however, could limit the feasibility of achieving improvements in registry operations as well as the flexibility of dealing with fluctuations in caseloads. Bureaucratic barriers between the divisions could develop, similar to those that now exist between the two courts.

221. If a single division court is created and if there is continued concern that certain tax matters be heard by judges with specialized expertise, then a tax specialization, for example a "tax list," could be established within the single division. This specialized function could operate in a manner similar to that of the "commercial list" in the Ontario Court (General Division), and could hear certain tax cases, for example, general procedure cases, complex tax cases, or cases of potentially precedential value. The parties whose cases met certain eligibility criteria could apply to the court for hearing on the "tax list." The court would designate the appeals or matters to be heard by the judges. To allow for rotation of judges and greater flexibility, the "tax list" could be established by practice direction rather than by rules of the court.

The extent of direct judicial support services in the Federal Court needs to be reassessed

222. Federal Court judges have extensive support services. If similar services were provided to Tax Court judges as a result of a merger, significant additional expenditures would be required. We believe that the need for the level of services provided to judges of the Federal Court needs to be reassessed. The level of support services provided to judges of the Tax Court and three of four similar-sized courts of appeal in the provinces is generally lower than that provided to Federal Court judges.

223. Currently, each Federal Court judge has a judicial assistant and a law clerk, and security services equivalent to those provided to ministers. The Court also has six chauffeured vehicles for the use of judges. In contrast, in the Tax Court a group of three judges share two judicial assistants and there are a total of seven law clerks shared by all judges. The Tax Court judges have fewer special security services. The Tax Court has three vehicles that are used about 93 percent of the time to transport judges. Increasing the level of support provided to Tax Court judges to that of Federal Court judges as a result of merging the courts would entail an estimated additional annual expenditure (excluding overhead) of about $1 million for judicial assistants and law clerks, and $370,000 for security services. To keep the vehicle fleet at the current judge-to-vehicle ratio of the Federal Court would require capital expenditures of about $130,000 to acquire four vehicles, and annual expenditures (excluding overhead) of about $125,000 in salaries and overtime for chauffeurs and about $25,000 for maintenance and repairs. Reducing the support services provided to Federal Court judges to the level of Tax Court judges would, excluding overhead, save about $960,000 in salaries for judicial assistants and law clerks, about $370,000 in security costs, and about $105,000 in salaries of chauffeurs for vehicles. The vehicle fleet in the Federal Court would be reduced by at least three vehicles.

Responsibility for employment insurance cases could be consolidated

224. During our audit, the Chief Justice of the Federal Court pointed out that there were various demands on the judicial resources of the Federal Court. One area of concern was judicial resources devoted to employment insurance cases. Federal Court judges act as umpires hearing appeals of decisions by boards of referees on the amount of employment insurance benefits. Tax Court judges also hear appeals under the Employment Insurance Act. These cases involve issues of whether the litigant is insurable under the Act.

225. In 1994, Federal Court judges also designated as umpires sat about 148 days as umpires, and other judges sat about 240 days. A significant percentage of proceedings in the Appeal Division of the Federal Court also involve employment insurance cases. In 1995-96, the Office of the Umpire, part of Human Resources Development Canada, had 30 staff (8 of whom were permanent) and an annual budget of about $1.4 million, and processed about 7,000 cases.

226. We estimated that Tax Court judges sat about 300 days to hear employment insurance cases and deputy judges sat about 240 days. Between 1995 and 1998, the Tax Court will receive an additional $2.4 million to reduce the number of pending cases related to employment insurance. Between 1995 and 1998, the Office of the Umpire will receive an additional $3.4 million to address pending cases. As of December 1995, there were about 7,000 employment insurance cases pending in the Office of the Umpire and about 2,700 pending in the Tax Court, 1,000 of which were not yet ready for trial.

227. We reviewed the question of whether the existing jurisdictional arrangements between the Federal Court and Tax Court would raise a problem if the courts were merged. In principle, we found that the jurisdictions could be merged and that the umpire function could become part of the jurisdiction of a merged court. We note that changes to the Employment Insurance Act in 1996 allow Tax Court judges to sit as umpires.

228. We also found that the informal procedures of the umpire function could be continued in a merged court. We note that prior to the creation of the Tax Court of Canada in 1983, all employment insurance appeals were heard by umpires. In addition, we found in principle that the registry of the Office of the Umpire could be included in the consolidation of the registries of the Federal Court and Tax Court.

229. The registry of the Office of the Umpire is part of Human Resources Development Canada. Officials of Human Resources Development Canada are concerned that if the jurisdictions are merged and the registry is consolidated with the Federal Court registry, there may be increased delays in the hearing of cases, unnecessarily formal procedures, and an overall decline in quality of service. We believe that a merger of the functions and consolidation of the registry would improve the scheduling of judges and increase the availability of facilities and information technology, as well as the economy and efficiency of operations.

Separate court of appeal

230. Two issues related to the Federal Court were raised with us by some judges of the Federal Court. Because we consider these to be significant, we have included them in our report: one, whether it is appropriate for the Chief Justice, who sits on appeal panels reviewing decisions of the Trial Division, to have a major role in the way the Trial Division does business; and two, whether the Appeal Division, which reviews decisions of the Trial Division, should be part of the same Court. We noted that the larger provinces have separate appeal courts. Because of the nature and significance of these concerns, we believe that serious consideration should be given to establishing a separate court of appeal. The creation of a separate court of appeal could cause some of the same registry problems of economy and efficiency that the merger of the Tax Court and the Trial Division could resolve. However, we believe these problems would be manageable since a separate court of appeal would only use about five percent of the resources of the consolidated registry.

231. An alternative to a separate court of appeal would be to retain the associate chief justice position for the Trial Division but create an associate chief justice position for the Appeal Division, and a new chief justice position to head the court. The focus of the new chief justice position could be the co-ordination of the court. A third associate chief justice position could be created for a Tax Division of the Court, if needed. The Federal Court did not provide us with any comments on whether there should be a separate court of appeal.

Accountability for resources provided to the courts by Parliament needs to be improved

232. Exhibit 10 summarizes accountability relationships as stated in legislation and rules of the courts. We concluded that there needs to be a major improvement in the framework for accountability and responsibility for the resources provided to the courts. Our conclusion is based on the results of our review of the existing accountability and responsibility structure for the economy and efficiency of registry operations. We found that the related roles and responsibilities of the various parties need to be clarified. Further, there was not a concensus among the parties on their respective roles in achieving accountability and cost-effective use of registry resources. A report prepared for the Commissioner for Federal Judicial Affairs in 1996 found "considerable confusion" about the role of the Commissioner.

Exhibit 10—Existing Accountability Relationships

233. Currently, accountability and responsibility for court resources are shared, in principle, by a number of individuals. The Chief and Associate Chief Justices of the Federal Court and the Chief Judge of the Tax Court are responsible for the judicial function of the courts. The judicial function includes, for example, the establishment of rules of procedure and the assignment of cases to judges. The judicial function is supported by the registries of the courts, which are designated branches of government for the purposes of the Financial Administration Act. The registries provide corporate services such as finance, human resources, information technology, facilities and court publications, and services such as assistance to litigants, document processing, quality assurance and file preparation. The registry of the Tax Court is headed by the Registrar; for the Federal Court, the head of the registry is the Administrator.

234. The role of the Commissioner for Federal Judicial Affairs is set out in the Judges Act . The legislation states that the Commissioner for Federal Judicial Affairs, under the direction of the Minister of Justice, is responsible for preparing budgetary submissions for each court and for "such other administrative arrangements as are necessary to ensure that all reasonable requirements, including those for premises, equipment and other supplies and services for officers, clerks and employees of the Federal Court and Tax Court of Canada for carrying out their respective operations are provided in accordance with law." The Registrar of the Tax Court and the Administrator of the Federal Court have traditionally also been designated by the Commissioner as deputies for their respective courts. The legislation states that the deputies carry out the duties and functions of the Commissioner for their respective courts "under the direction of the Commissioner."

235. In practice, the deputies of the Commissioner in the courts operate independently of the Commissioner. For example, the 1996-97 Part III Estimates of the Tax Court state, "The Registrar, as Deputy to the Commissioner for Federal Judicial Affairs, through complete delegation of authority under subsection 76(2) of the Judges Act , is Deputy Head of the Tax Court of Canada."

236. The Commissioner for Federal Judicial Affairs informed us:

"I do not believe that [my] authority can be delegated. What has developed over the years is that the Administrators of both courts...and their predecessors, have administered their respective courts under the direction of their Chief Judge and Chief Justice with basically no involvement or input by the Commissioner for Federal Judicial Affairs except for transmission of Treasury Board Submissions and other documents to the Minister of Justice. Both [the] Chief Justice [of the Federal Court] and [the] Chief Judge [of the Tax Court] indicated clearly to me that they wanted this to continue and I have acted accordingly."

237. This variation from the legislation raises concerns about accountability for the resources approved for the courts by Parliament. In full consultation with the Commissioner, the Chief and Associate Chief Justices and Administrator of the Federal Court, and the Chief and Associate Chief Judges and Registrar of the Tax Court, we tried jointly to develop an interpretation of their statutory responsibilities for economy and efficiency in court registry operations. The intent was to clarify responsibility and accountability among the parties for the use of public resources. Consensus could not be achieved.

238. The practices that have developed with respect to the roles of the parties, and the failure to reach a consensus on their respective roles in achieving accountability and cost-effective use of registry resources, indicate that a significant issue of accountability and responsibility exists that should be clarified whether or not the courts are merged.

Accountability structures for a merged court

239. The lack of clarity in accountability and responsibility for court resources raised the issue of how to ensure accountability and responsibility for a merged court, while maintaining and, if possible, enhancing judicial independence.

240. We considered alternative management structures and oversight systems. For example:

Should the registry be constituted as a court services agency (as in England) or a Crown corporation?
Should a management board be created to oversee registry operations, with the registrar reporting to the board on administrative matters?
Should the powers of the Commissioner for Federal Judicial Affairs for the courts be given to the new registrar of the consolidated registry, who would appear before parliamentary committees and report to the Chief Justice? Or should the Commissioner be fully responsible for the registry?
Should all responsibility and accountability for court resources, including the registry services, be vested in the Chief Justice, and how would the Chief Justice be held accountable for the discharge of these responsibilities?
Should all responsibility and accountability be vested in the judges of the court, who would operate the court and the registry through collegial committees?
Should the registry, as in the provinces, be a component of the office of the Attorney General?

Status of registrar should be enhanced

241. As shown in Exhibit 10, the Administrator of the Federal Court and the Registrar of the Tax Court are "deputy heads" for the purposes of the Financial Administration Act and the Public Service Employment Act . However, the positions they occupy are not at the deputy minister level but in the lower levels of the executive category. We recommend that a registrar position at the deputy minister level be established to provide sufficient stature to attract an experienced and skilled individual who would ensure that a consolidated registry operates cost-effectively and who would represent the registry to government and before Parliament. A registrar at the deputy minister level also would be required to head a consolidated registry if the courts were not merged. The registrar would have the current powers of the administrator and registrar of the courts as well as those now held by the Commissioner for Federal Judicial Affairs for the administration of the two courts. We do not believe that it would be appropriate for the Commissioner for Federal Judicial Affairs to be responsible for the registry, because it is a full-time operational responsibility and the Commissioner already has a number of other important responsibilities.

Overall accountability

242. The decision whether to merge the courts has implications for overall accountability for the registry with respect to who should be accountable for the use of the resources provided to the court(s) and to whom should the registrar of the consolidated registry report. The registrar could report to the Minister of Justice or a board of management or to the Chief Justice of a merged court. Each option has advantages and disadvantages.

243. The option of reporting to the Minister of Justice may be difficult to adopt since existing legislation governing the courts already provides them with greater independence from the government.

244. The management board option that we explored entailed vesting accountability for the registry in a board of management composed of judges, lawyers and eminent members of the public. Exhibit 11A presents a possible management structure for a merged court with a management board. The board, through the chair of the board and the registrar, would be accountable through the Minister of Justice to Parliament for the management of the registry. The management of the judicial function - for example, assignment of cases to judges - would remain with the Chief and Associate Chief Justices of the merged court. The registrar of the consolidated registry would report to them on judicial functions and would report to the board on administrative matters.

Exhibit 11A—Possible Reporting Relationships for the Registry if the Courts are Merged and a Management Board is Established

245. The advantage of a board of management is that it could provide a forum for:

a broad-based input into decisions on registry operations by the judiciary and various stakeholders;
the building of consensus and good communication with stakeholders on registry administrative changes before decisions are made;
equitable treatment of the different courts served by the registry;
maintaining independence from the government; and
effective and balanced oversight and accountability of registry operations.

246. The courts are not in favour of a management board. They are concerned that the establishment of a board would threaten judicial independence and create unnecessary additional costs. The Federal Court wrote us that the Judges Act gave the Federal Court of Canada "a degree of institutional independence that was and remains superior to that enjoyed by most provincial courts", and thus a recommendation to create a management board would represent a "regressive step in Court administration" and "the imposition upon the Courts of a new bureaucracy, the rationale for which is not apparent from reading the report." We estimate that the costs associated with a management board would be about $150,000 to $200,000 annually.

247. The Federal Court prefers that it become self-administering in the manner of the Supreme Court of Canada. Alternatively, it suggests the adoption of the model of the Federal Court of Australia. The Chief Justice of the Federal Court of Australia is responsible for managing the administrative affairs of the Court with the assistance of a registrar who is appointed by order-in-council. (In the High Court of Australia, equivalent to the Supreme Court of Canada, responsibility rests with all seven justices.) The Federal Court of Australia is responsible for all operations, including staffing, training, technology, financial and property administration and labour relations. The Chief Justice is required to submit funding estimates to the Attorney General for review and approval by Parliament.

248. If the option of self-administration is chosen, then the Chief Justice of the court should be clearly designated as accountable and responsible for ensuring the cost-effective use of court resources. The registrar would be responsible to the Chief Justice. The registrar could appear, as necessary, before the appropriate parliamentary committees to explain expenditure decisions and discuss matters related to the cost-effective use of resources. Exhibit 11B presents a possible management structure for a self-administering merged court.

Exhibit 11B—Possible Reporting Relationships for the Registry if the Courts are Merged and Self-Administered

249. However, the designation of the Chief Justice as the party accountable and responsible for the cost-effective use of court resources raises the question of how the Chief Justice would be held accountable for the discharge of these responsibilities. Traditionally, Chief Justices do not appear before parliamentary committees because the courts are a separate branch of government. Improved accountability reporting and the appearance of the registrar before parliamentary committees may help, but these measures may not be sufficient in all instances. We note that in the United States two Associate Justices of the Supreme Court, the judge chairing the committee on the budget of the federal courts, and the Chief Judge of the Tax Court appear before committees of Congress to present and defend the budgets of their respective courts. In Australia, the registrar of the Federal Court appears before parliamentary committees. In England, either the Chief Executive Officer of the Court Service agency or the Permanent Secretary of the Lord Chancellor's Department may appear before parliamentary committees. However, both of these positions are directly responsible to the Lord Chancellor for effective and efficient management.

250. If the courts are not merged but the registries are consolidated, then the accountability model centered on the Chief Justice may be difficult to apply, since responsibility for the registry would be divided between the Chief and Associate Chief Justices of the Federal Court and the Chief Judge of the Tax Court. As alternatives, the registrar of the consolidated registry could report to a management board as described above or the consolidated registry could be constituted as a court service agency as in England, with the registrar reporting to the Minister of Justice. Exhibit 11C presents a possible management structure with a management board for the courts if they are not merged.

Exhibit 11C—Possible Reporting Relationships for the Registry if the Courts are not Merged and a Management Board is Established

Improved public accountability reporting is required

251. To ensure that such accountability improvements are achieved, major changes are needed in accountability reporting on how the courts have used the resources voted by Parliament. Besides financial information, reporting should contain more extensive performance information than is found in existing public reports of the two courts. Part III of the Estimates for each court contains information on registry workload. The Annual Report of the Federal Court contains information on the pace of litigation, but does not assess the pace against a performance standard.

252. The public reports of courts in other jurisdictions - for instance England, the United States and Australia - provide examples of the type of performance information that is relevant for court clients, parliamentarians and members of the public. Reporting similar information, whether or not the courts are merged, would enhance accountability. However, it would not be sufficient. As indicated above, there is a need to clearly identify in legislation the responsibility and accountability for decision making with respect to expenditures and for answering questions that may be posed by Treasury Board and parliamentary committees.

253. The reporting should include indicators and information using performance standards on:

the timeliness of court proceedings;
resource utilization rates, such as courtroom use;
service to litigants; and
productivity of registry and corporate services.

Section 4: Regionalization

The benefits of regionalization could be achieved by other measures

254. On balance, we concluded that while there would be cost savings and other benefits associated with regionalizing the courts to certain centres, most of the benefits of regionalization could be obtained by other measures, such as using a rota - assigning a judge for a period of several weeks - in Montréal and Toronto and, in particular, the use of emerging information and telecommunication technologies such as videoconferencing and electronic document interchange. We concluded that these measures should be tried before regionalizing the courts. However, if it is a public policy priority to develop and maintain a court that is representative with respect to region and gender, then waiving the National Capital Region residency requirement should be considered on a case-by-case basis. This would require legislative amendments to the Federal Court Act and the Tax Court of Canada Act. Further, if most of the potential benefits cannot be achieved through rotas, technology and other measures, then serious consideration should be given to alternative ways of regionalizing the courts.

255. The Federal Court Act and the Tax Court of Canada Act require judges of both courts to reside within 40 kilometres of the National Capital Region. Regionalization involves the issue of whether judges should be allowed to reside outside the National Capital Region and hear most cases in the regions where they reside. We assessed regionalization in terms of:

judicial workload;
cost savings;
qualitative issues such as improved access by the public, impact on consistency of decision making across the country, impact on judicial collegiality and representativeness of the courts; and
alternative measures such as increased use of information technology and expanding the "rota" system, which maintains an ongoing judicial presence by assigning judges to locations for periods of several weeks.

256. There is already a strong regional aspect to the operations of the Federal Court and the Tax Court: most scheduled days in court are outside of Ottawa. In 1995, 84 percent of Trial Division scheduled days and 92 percent of Tax Court scheduled days were outside of Ottawa. Thirty-two percent of Trial Division scheduled days were in Toronto, 21 percent in Vancouver, and 18 percent in Montréal. Twenty-one percent of Tax Court days were scheduled in Toronto, 17 percent in Montréal and nine percent in Vancouver.

257. We examined several alternative models of regionalization, for example, locating judges in three to six regional centres, including the National Capital Region. From our consultations, we concluded that three resident judges would be the preferred minimum required at any location, to help avoid the development of local jurisprudence and practice and to limit the effects of any interpersonal difficulties with the local bar. The number of judges who could be based regionally and in the National Capital Region was calculated by dividing the average annual number of days during the period 1993 to 1995 on which judges were scheduled to sit in a region by the average annual number of days scheduled in court per judge for the same period; these calculations include supernumerary judges. In these scenarios, resident judges would also travel to hearings in smaller centres within the region, and to other regions when specialized expertise is required or to handle peak demands and to preclude the development of local jurisprudence and practice. We examined the feasibility of regionalizing the two courts separately as well as regionalization of a single-division merged court. Regionalization of a merged court with separate divisions would be similar to regionalization of separate courts.

Savings from regionalization

258. Exhibit 12 presents our analysis of alternative models of regionalization. We found that having regionally based judges of both courts, whether merged into a single division or not, in three to six centres could result in significant net savings. Most of the savings would arise from reduced travel costs and reduced need for space in the National Capital Region. Our analysis indicates that the courts, for the most part, have sufficient space in existing facilities in regional centres to accommodate judges needed to serve their regions. The net savings for a regionalized merged court would range from about $1.4 million for four to six centres to about $830,000 to $1 million for a three-centre model. If the courts were not merged, then the criterion of a minimum of three resident judges per centre could not be met for all regions and thus only four-centre and three-centre models would be viable for each court. The net savings if the Tax Court remained a separate court and were regionalized would range from $355,000 to $600,000; for the Federal Court it would range from $360,000 to $650,000.

Exhibit 12—Regionalization Models - Estimated Judge Requirements and Potential Savings

Arguments for and against regionalization

259. Opinion on the merits of regionalization is divided. Most judges of both courts are opposed to regionalization. However, judges and counsel appearing before the courts provided arguments for and against regionalization. Those opposed to regionalization cited a number of arguments, to which proponents cited counterarguments. The views are presented below.

260. Access to courts. Proponents saw regionalization as a way to increase access to the courts, which is now affected by scheduling problems caused by travel from and to Ottawa. Proponents said that cases are sometimes hurried so that the judge can leave by the end of the day or week. With judges residing locally, travel requirements would no longer drive the court's schedule. In the Federal Court it would be easier to get a face-to-face meeting for urgent matters, and motions could be dealt with quickly rather than delayed until the next scheduled motion day. This argument was countered by opponents of regionalization, who argued that the same result could be achieved by simpler measures such as establishing a rota in Toronto and Montréal, as now exists in Vancouver. This would help ensure that a Federal Court judge would be readily available to deal with urgent matters such as injunctions. Another alternative could be to increase the numbers and mandates of prothonotaries and deputy judges. Opponents also argued that regionalization would do little to increase access in smaller centres, which would not have resident judges.

261. Consistency of court decisions. Opponents argued that regionalization could reduce the consistency of court decisions and practices. Consistency, they argued, is important because the courts are dealing with federal matters, which should be approached in a comparable manner across the country. In particular, judicial review of the decisions of federal tribunals and boards requires a high level of consistency. Any differences in decision making could be magnified by the possibility of "judge shopping" - litigants could file suit in the location where they thought the judges would be most favourable to their arguments. Others, however, challenged this view by arguing that inconsistency already exists in decisions of the Tax Court and the Federal Court Trial Division, as one would expect in any court; any increase resulting from regionalization could be sorted out as it is now, at the Appeal Division. The courts could adopt rules to limit, although probably not eliminate, "judge shopping."

262. Collegiality of judges. Opponents to regionalization expressed concern that it would diminish collegiality among judges and that this, too, would have a negative impact on consistency. Many judges stressed the importance of having informal, ready access to colleagues for advice on difficult issues. There was concern, too, that the Quebec resident judges could become isolated because of language and Civil Code orientations, lessening the bilingual and bijural nature of the courts. Others disputed the need to have all judges in Ottawa as a means of maintaining collegiality. It was pointed out that since many judges are travelling at any one time, collegiality and consistency are not highly dependent on their presence in the National Capital Region. With modern telecommunications and periodic meetings of all judges, collegiality could be maintained.

263. Role as national institutions. There were concerns that regionalization would undermine the status of the courts as national institutions and they would eventually be supplanted by provincial superior courts. It was argued that a court dispersed throughout the provinces would lose its identity as a federal court at a time when the country needs to maintain national institutions. A court located in Ottawa that goes on circuit across the country was seen as the best way to maintain a strong federal judicial presence. Interestingly, others argued the opposite - that regionalization would enhance the courts' identity as national institutions by making them more responsive to the regional character of Canada.

264. Relationship to local issues. Proponents argued that regionalization would improve judges' familiarity with local issues and the local bar. But others argued that it would limit the number of judges before whom counsel would appear. Any interpersonal problems between local members of the bar and federal judges would become more serious, because each judge would hear a significant proportion of local cases. Others worried that too close a relationship between the local bar and federal judges might have a perceived or even real impact on the impartiality of decision making. Further, opponents were worried that regionalization could result in local "empires."

265. Recruitment of judges. Proponents argued that regionalization would increase the possibility that members of the bar from outside Ottawa would accept appointment to the courts, because relocation would no longer be required. Relocation was seen as more often difficult for persons with working spouses. Regionalization, then, would help ensure a regional and gender balance in the courts, and would counter a perception that the courts are "Ottawa" courts with many judges appointed who have been associated with the federal government. Others questioned whether relocation was so significant a factor that it would cause candidates truly interested in an appointment to a federal court to decline. Any difficulties in attracting good candidates were viewed as more likely the result of the lower profile of the federal courts relative to provincial superior courts; more attention to recruitment might have equal benefit.

266. Travel by judges. It was argued that regionalization would reduce the amount of travel by judges. Such a reduction would be important because, under proposed Federal Court case management rules requiring more regular contact between parties and judges, the need for travel may increase. The reduction in travel would reduce the stress and fatigue associated with the significant amount of travel that judges now face, as well as reduce concerns about the extensive travel by potential candidates for judgeships. Others countered that establishing a rota in Toronto and Montréal would also reduce judge travel - albeit not by as much as regionalization would - because judges would stay in those cities for longer periods. Travel could also be substantially reduced by using videoconferencing technology to hear routine matters. Indeed, other courts - notably the Australian Federal Court - use videoconferencing for the more demanding interaction involved in trials and other proceedings where witness credibility is at issue.

267. Personal concerns of judges. The judges of both courts were concerned that regionalization could impact adversely on the lives of some incumbent judges if they were required to relocate to Montréal, Toronto, Vancouver and other centres. It was suggested that such moves be voluntary for current judges but that new appointees not have an option.

268. Waiving residency requirement. Last, a change in legislation was suggested to allow judges to live outside the National Capital Region by waiving the residency requirement; however, the judges would continue to hear cases across the country. We believe that this option could be tried on a case-by-case basis, if developing and maintaining a regional and gender balance on the court is a public policy priority. We note that the National Capital Region residency requirement was waived by amending the Tax Court of Canada Act to allow a specific judge, who was a member of the Tax Review Board when the Tax Court was established and who did not reside in the required location, to reside outside the National Capital Region. If regionalization of the courts is deemed desirable, then some judges suggested that the courts should experiment with judges residing in certain locations on a voluntary basis.

APPENDIX 1: ORDER-IN-COUNCIL

``P.C. 1995-852
May 30, 1995"

"HIS EXCELLENCY THE GOVERNOR GENERAL IN COUNCIL, on the recommendation of the Minister of Justice, pursuant to section 11 of the Auditor General Act, is pleased hereby to request the Auditor General of Canada

(a) to inquire into

(i) the possible merger and regionalization of the Trial Division of the Federal Court of Canada and of the Tax Court of Canada, and

(ii) the possible consolidation of the administrative support services of the Courts; and

(b) to report to the Minister of Justice on the matters referred to in paragraph (a)."

APPENDIX 2: BACKGROUND INFORMATION ON THE COURTS

This section provides an overview of the Canadian judicial system, and the role and organization of the Federal Court of Canada and the Tax Court of Canada. The overview provides the context for our analyses, findings and conclusions.

In Canada, most legal proceedings, including cases involving federal and provincial statutes, the Constitution, common law and the Civil Code, are heard by courts administered by the provinces. Each province has "superior courts", sometimes called "section 96 courts" after the section of the Constitution Act, 1867 that authorizes the appointment of judges to these courts by the federal government, as well as "provincial courts" whose judges are appointed and paid by the provinces.

In addition to the courts administered by the provinces, there are the Supreme Court of Canada, the Federal Court of Canada and the Tax Court of Canada. These courts are established by Parliament pursuant to section 101 of the Constitution Act, 1867.

Judicial independence is a critical element of the Canadian legal system. Security of tenure, financial independence and institutional independence are the three elements generally described as essential to judicial independence. Judges of the Federal Court and the Tax Court, as well as other federally appointed judges, are appointed by order-in-council generally after consultation with the legal profession and the community. The judges can be removed only with the approval of Parliament. The Chief and the Associate Chief Justices of the Federal Court and the Chief and Associate Chief Judges of the Tax Court serve in these positions until they retire.

After serving for 15 years and reaching the age of 65 (or after serving for 10 years and reaching 70), a judge may elect supernumerary status. Supernumerary judges are paid a full salary, and work as required by the Chief Justice or Chief Judge of their respective court. All judges of the Federal Court and the Tax Court are required to reside within 40 kilometres of the National Capital Region.

Resources. The combined resources of the Federal Court of Canada and the Tax Court of Canada are about $62 million annually. This includes salaries, benefits and allowances of Tax Court of Canada and Federal Court Trial Division judges and deputy judges, paid by the Office of the Commissioner for Federal Judicial Affairs, and facilities provided by Public Works and Government Services Canada. The two courts have 47 full-time and supernumerary judges, 17 deputy judges and about 587 full-time-equivalent employees. Exhibit 13 summarizes the resources of the two courts in 1994-95.

Exhibit 13—Estimated Federal Court and Tax Court Resources (1994–95)

Primarily as a result of increases in the number of immigration and refugee determination cases, the expenditures and staff of the Federal Court increased substantially between 1990-91 and 1995-96. Those of the Tax Court have remained relatively stable. Exhibit 14 summarizes these trends.

Exhibit 14—Federal Court and Tax Court Registries Expenditures and Full-Time-Equivalent Staff (FTEs)

Organizational structure. Each court has evolved independently. However, the organizational structure and accountability relationships in the two courts are generally the same. Certain accountability relationships that are unclear are discussed in other sections of this report.

Each court has a strong regional element in its operations: most proceedings are instituted outside of the National Capital Region. Exhibit 15 summarizes by jurisdiction the number of proceedings instituted during 1994.

Exhibit 15—Proceedings Instituted, by Jurisdiction, for 1994

The Federal Court. The Federal Court is a superior court of record, comprising a Trial Division and an Appeal Division. It is a bijural court, encompassing both the common law and civil law systems in Canada. The Trial Division has jurisdiction over a diverse range of legal matters, including admiralty, intellectual property, administrative law, immigration, actions against the Crown, and Aboriginal law. The Federal Court has exclusive jurisdiction over some matters, and concurrent jurisdiction with the provinces over others. Exhibit 16 summarizes the exclusive and the concurrent jurisdictions of the Court. Exhibit 17 summarizes, by type of legal matter, the number of proceedings instituted in 1994.

Exhibit 16—Juridiction of the Federal Court Trial Division

Exhibit 17—Federal Court Proceedings Instituted for 1994, by Type

The Federal Court was created in 1971 as a successor to the Exchequer Court, whose jurisdiction included tax, admiralty and intellectual property. Responsibility for reviewing decisions of federal tribunals was transferred from the provincial superior courts to the new Court. This was intended to improve consistency of decisions, improve the timeliness of adjudication, and reflect the principle that federal bodies should be supervised by a federal court. An appellate division was established to reduce the case burden on the Supreme Court of Canada.

The Chief Justice of the Federal Court of Canada is the president of the Court and is responsible for assigning cases to the judges of the Appeal Division. The Associate Chief Justice has the same responsibility for the Trial Division. Both have responsibilities for administration of the Court.

In addition to the Chief Justice and Associate Chief Justice, there are currently 10 judges and two supernumerary judges in the Appeal Division, and 18 judges and two supernumerary judges in the Trial Division. There are six deputy judges, appointed from time to time by the Chief Justice as needed, who are retired judges of either provincial superior courts or the Federal Court. These deputy judges supplement the judicial resources of the Court for specific purposes and for limited terms. There are four prothonotaries, officers of the Court who exercise judicial and quasi-judicial functions, including hearing interlocutory motions and matters involving less than $5,000.

There are also 24 other judges appointed as "umpires" for the purposes of the Employment Insurance Act . The Umpire regime under the Employment Insurance Act is separate from the Federal Court.

The Registry of the Federal Court is responsible for managing the processes of the Federal Court by providing administrative and legal support services to judges, litigants, the legal community and the public in general. Registry staff are part of the public service. At the head of the Registry is the Administrator of the Federal Court, appointed by court order pursuant to the Rules of the Federal Court.

The Administrator's duties, as set out in the Rules of the Court, are "to manage the offices of the Court, and control and supervise all other officers, clerks, and employees of the Court (other than barristers and prothonotaries)".

In addition, the Administrator is, by virtue of the Judges Act , a deputy of the Commissioner for Federal Judicial Affairs, a deputy head for the purposes of the Public Service Employment Act , and a deputy head for the purposes of the Financial Administration Act . The Administrator also has other registrar roles pursuant to other Acts; for example, the Administrator is registrar of the Court Martial Appeal Court.

The Tax Court of Canada. The Tax Court of Canada is a court of record with exclusive original jurisdiction in several areas involving not only taxation (e.g. under the Income Tax Act and the Excise Tax Act) but also federal programs such as the Canada Pension Plan, Employment Insurance and Old Age Security. These cases involve the appeal of decisions made by government officials. With certain exceptions, appeals of Tax Court decisions are made to the Appeal Division of the Federal Court of Canada. Exhibit 18 summarizes the jurisdiction of the Tax Court.

Exhibit 18—Jurisdiction of the Tax Court

The Tax Court was created in 1983 as a successor to the Tax Review Board, which had been established in 1970 to replace the Tax Appeal Board created in 1946. These various changes have been guided by two main objectives: to create greater independence from the government and to maintain an easily accessible forum for taxpayers.

Amendments to the Tax Court of Canada Act in 1988 and 1991 granted the Tax Court exclusive original jurisdiction in areas where it had previously shared jurisdiction with the Federal Court Trial Division. This ended the ability of parties to initiate a new trial (trial de novo) in the Federal Court after trial before the Tax Court, a practice that had been seen as adding unnecessary duplication to the appeal process.

Under the Tax Court of Canada Act, the Chief Judge is responsible for "all such arrangements as may be necessary or proper for the transaction of the business of the Court" and for assigning cases to judges. Currently, in addition to the Chief Judge and Associate Chief Judge, there are 20 judges and four supernumerary judges. There are also 11 deputy judges, appointed by the Chief Judge as needed, who hear mainly employment insurance cases.

The Tax Court of Canada Act provides a general and an informal procedure for appeals to the Court. Taxpayers may choose the informal procedure if the taxes and penalties at issue total less than $12,000. Unlike general procedure appeals, there is no fee for an informal procedure appeal and the taxpayer need not be represented by a solicitor. Exhibit 19 summarizes the appeals and applications received by the Tax Court in 1994.

Exhibit 19—Tax Court Appeals and Applications for 1994, by Type

The Registry of the Tax Court provides administrative services to the Court, including appeals processing and scheduling of hearings, as well as guidance and advice to litigants on the practice and procedures of the Court. Registry staff are part of the public service. At the head of the Registry is the Registrar, who is appointed by the Public Service Commission on the recommendation of the Commissioner for Federal Judicial Affairs and the Chief Judge and Associate Chief Judge of the Tax Court.

The Registrar's duties, as set out in the Rules of the Tax Court, are "to manage the Registry, to control and supervise all officers, clerks and employees of the Court other than counsel, and to establish the duties to be performed by the various persons working in the Registry and their titles." Pursuant to the Rules of the Court, the Registrar is responsible to the Chief Judge for the performance of these duties.

In addition to the duties conferred by the Tax Court of Canada Act and the Rules of the Court, the Registrar is, by virtue of the Judges Act , a deputy of the Commissioner for Federal Judicial Affairs, a deputy head for the purposes of the Public Service Employment Act , and a deputy head for the purposes of the Financial Administration Act .

The Office of the Commissioner for Federal Judicial Affairs. The Office of the Commissioner for Federal Judicial Affairs was established in 1978 to act as an intermediary between the federally appointed judiciary and the government. It administers the payment of salaries, allowances, expenses and annuities of the federally appointed judiciary, including the Federal Court, the Tax Court and provincial superior courts. It provides other services to federally appointed judges, such as training, and secretariat support for the Canadian Judicial Council.

It is the statutory duty of the deputies of the Commissioner for Federal Judicial Affairs (who, as noted above, are the Administrator of the Federal Court of Canada and the Registrar of the Tax Court of Canada) to prepare budgetary submissions for their respective courts and to "be responsible for such other administrative arrangements as are necessary to ensure that all reasonable requirements of the courts are provided." These duties are to be carried out under the direction of the Commissioner.

APPENDIX 3: PREVIOUS REVIEWS AND INITIATIVES

The courts and others have conducted reviews of court operations that covered to varying degrees many of the same areas as our study. Thus, the results of these reviews are relevant to our work. The reviews include:

"Review of the Justice and Legal System" by Treasury Board, the Office of the Comptroller General and the Department of Justice (1992);
"Efficiency and Effectiveness Review" by the Federal Court (1993, 1994);
"Strategic Information Management Study" by the Tax Court (1994, 1995);
"Program Review" by each court (1994); and
"Judges' Survey and Client Survey" by the Tax Court (1996).

The Review of the Justice and Legal System indicated that expenditures by the two courts had increased substantially over the previous 10 years. Charter challenges and legislative changes, such as refugee determination and changes to the Income Tax Act and Tax Court of Canada Act, accounted for much of the growth.

In general, the results of previous reviews are similar to those of this study. The reviews recommended:

consolidating corporate services of the two courts and other federal tribunals and commissions;
expanding the role of technology in the two courts;
defining acceptable standards of service;
identifying performance indicators to monitor and manage caseflow;
identifying registry work that could be transferred to litigants;
re-engineering court rules and practices;
identifying possibilities for additional revenues;
studying the appropriateness of establishing federal judicial centres; and
improving government-wide assessment of the impact of new laws and programs on the Department of Justice and on the courts.

Federal Court Initiatives

To improve its administration, the Federal Court has undertaken a number of ongoing initiatives, including:

a general revision of the Federal Court Rules to increase efficiency and effectiveness and to facilitate litigation and caseflow management;
an efficiency study of registry operations to improve operations and establish performance standards;
the development of a training program for registry officers and managers;
the Delay Reduction Program to identify in the Court's judicial workload any delays that might be present and their underlying causes, as well as plans for possible reduction of delays;
planning for a full caseflow management system;
several technology and automation projects, including plans for systems to control distribution of reasons and to automate statistics for the Trial Division and plans for increased use of videoconferencing of proceedings; and
the development of recommendations for fee increases to increase revenue.

With respect to facilities, the Court sought approval for construction in Ottawa of a single building for the Court, to address inefficiencies, delays, difficulties in communication and a diminished level of service to the public.

In conjunction with the Tax Court and others, planning was initiated for the establishment of federal judicial centres in the regions, permitting the consolidation of court operations.

Public Works and Government Services Canada, the Federal Court and the Tax Court are jointly developing national standards for court facilities.

Tax Court Initiatives

Similarly, the Tax Court has sought to improve its administration through a number of ongoing initiatives, including:

defining management information and work performance guidelines;
defining service standards;
simplifying the filing process;
increasing consultation with clients on scheduling;
improving case scheduling activities;
conducting status hearings to expedite cases;
using contracts to provide local courtroom registrar services and to provide local courtroom reporting services and translation services;
design and delivery of a training program for registrars;
implementing information technology that supports electronic exchange with Court users;
revising appeals processing and developing an Information Management Plan; and
planning for electronically publishing Tax Court decisions in conjunction with the private sector.

The Tax Court has conducted an in-depth organizational review, resulting in the elimination of a number of full-time positions.

The Court has informed government that improved efficiency could be obtained by amendments to the Tax Court legislation increasing the amount of moneys that could be settled by informal procedure. When the last changes were made, it was predicted that 70 percent of appeals would be governed by informal procedure and 30 percent by the more formal general procedure. However, in 1994, 38 percent of the tax appeals received were general procedure cases.

The Court also noted that it is required to file written reasons for judgment under the Employment Insurance Act and the Canada Pension Plan. The Court suggested that this be made discretionary. The necessary legislative amendments were tabled in the House of Commons in June 1996.

The Tax Court has surveyed its judges and clients. The 1996 report indicated a strong interest among judges in using more technology in the Court.

The results of the clients' survey indicated that 86 percent of the 41 respondents were satisfied or very satisfied with their dealings with Court employees.

Assistant Auditor General: David Rattray

Audit Principal: Alan Gilmore

Audit Team

Gregory Boyd
Estelle Charette
Richard Fadden
Camille Gilbert
Angela Henry
Janet Jones
Myles Kennedy
Neil Maxwell
Carol McCalla
Lynn Murdock
Gaëtan Poitras
Jean-Luc Tétreault
Casey Thomas

For information please contact Alan Gilmore, the audit principal.

Office of the Auditor General of Canada

www.oag-bvg.gc.ca

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1997 April Report on the Federal Court of Canada and the Tax Court of Canada

Report on the Federal Court of Canada and the Tax Court of Canada

Executive Summary

Registry services

Significant improvements are needed in registry cost effectiveness

Summary of possible savings

The registries of the courts should be consolidated

Status of registrar should be enhanced

The potential benefits of merger outweigh the potential disadvantages

Accountability structures for a merged court

Accountability improvements are required in any case

Responsibility for employment insurance cases could be consolidated

Regionalization benefits could be obtained by other measures

Section 1: Introduction

Scope and approach

Elements we considered

Previous views of the courts on the issues examined

Section 2: Consolidation of Registry Services

The registries of the courts should be consolidated

Co-operation between the two courts is problematic

Savings from consolidating corporate services

Courtroom and registry facilities

Consolidation of courtrooms and registry offices could yield major savings

Calculation of reservation and use rates of courtrooms

The courts have an oversupply of courtrooms

Actual use of courtrooms is low

Reducing the difference between courtroom reservation and use rates would improve cost effectiveness

Improvements that could increase courtroom use

Planning for facilities

The courts acquire facilities independently of each other

The methods used by the courts to project courtroom requirements need to be improved

National Court Standards need to be reassessed

Proposed courtroom construction should be reassessed

St. John's

Collocation would result in significant savings

Establishing judicial centres could optimize savings

Registry productivity could be improved

Registry productivity varies

Factors that affect productivity

Local and central registry roles should be assessed

Contracting procedures

Information technology: opportunities for efficiencies

Priority should be given to information technologies to increase court efficiency

Steps to reduce risks in information technology development

Benefits of consolidation of information technology initiatives

Caseflow management is an important initiative

Publication of court decisions

Public policy issues need to be resolved

Cost recovery or privatization should be considered

An "official" electronic version should be considered

Court fees