Fiduciary obligations imposed seldom on government

Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24, released this morning, holds that only in rare cases will a government be found to owe fiduciary obligations:

[42] First, the requirement of an undertaking to act in the alleged beneficiary’s interest will typically be lacking where what is at issue is the exercise of a government power or discretion.

[43] The duty is one of utmost loyalty to the beneficiary. As Finn states, the fiduciary principle’s function “is not to mediate between interests. It is to secure the paramountcy of one side’s interests . . . The beneficiary’s interests are to be protected. This is achieved through a regime designed to secure loyal service of those interests” (P. D. Finn, “The Fiduciary Principle” in T. G. Youdon (ed.), Equity, Fiduciaries and Trusts (1989), at p. 27 (underlining added). See also Hodgkinson, per Sopinka J. and McLachlin J., as she then was, dissenting, at p. 468.

[44] Compelling a fiduciary to put the best interests of the beneficiary before their own is thus essential to the relationship. Imposing such a burden on the Crown is inherently at odds with its duty to act in the best interests of society as a whole, and its obligation to spread limited resources among competing groups with equally valid claims to its assistance: Sagharian (Litigation Guardian of) v. Ontario (Minister of Education), 2008 ONCA 411, 172 C.R.R. (2d) 105, at paras. 47-49. The circumstances in which this will occur are few. The Crown’s broad responsibility to act in the public interest means that situations where it is shown to owe a duty of loyalty to a particular person or group will be rare: see Harris v. Canada, 2001 FCT 1408, [2002] 2 F.C. 484, at para. 178.

[45] If the undertaking is alleged to flow from a statute, the language in the legislation must clearly support it: K.L.B. v. British Columbia, 2003 SCC 51, [2003] 2 S.C.R. 403, at para. 40; Authorson v. Canada (Attorney General) (2000), 53 O.R. (3d) 221 (S.C.J.), at para. 28, aff’d (2002), 58 O.R. (3d) 417 (C.A.), at para. 73, rev’d on other grounds, 2003 SCC 39, [2003] 2 S.C.R. 40. The mere grant to a public authority of discretionary power to affect a person’s interest does not suffice. A thorough examination of the provisions in issue is mandatory: Guerin addressed the Indian Act,R.S.C. 1952, c. 149, s. 18(1) (which confirms the Crown’s duty to manage Indian lands for their use and benefit); Authorson dealt with the Pension Act, R.S.C. 1970, c. P-7, the War Veterans Allowance Act, R.S.C. 1985, c. W-3, s. 15(2), and the Pension Act, R.S.C. 1927, c. 157 (which set out the obligation of the government to hold and administer funds on behalf and for the benefit of incapable veterans and their dependants); and K.L.B. found that the language in the Protection of Children Act, R.S.B.C. 1960, c. 303, did not encompass the duty asserted.

[46] If the alleged undertaking arises by implication from the relationship between the parties, the content of the obligation owed by the government will vary depending on the nature of the relationship, and should be determined by focussing on analogous cases: K.L.B., at para. 41.

[47] Generally speaking, a strong correspondence with one of the traditional categories of fiduciary relationship — trustee-cestui qui trust, executor-beneficiary, solicitor-client, agent-principal, director-corporation, and guardian-ward or parent-child — is a precondition to finding an implied fiduciary duty on the government.

[48] In sum, while it is not impossible to meet the requirement of an undertaking by a government actor, it will be rare. The necessary undertaking is met with respect to Aboriginal peoples by clear government commitments from the Royal Proclamation of 1763 to the Constitution Act, 1982 and considerations akin to those found in the private sphere. It may also be met where the relationship is akin to one where a fiduciary duty has been recognized on private actors. But a general obligation to the public or sectors of the public cannot meet the requirement of an undertaking.