Nelson v. Marchi: Separation of powers and core policy immunity

18 minute read
04 November 2021


On October 21, 2021, the Supreme Court of Canada released its decision in Nelson (City) v Marchi ("Marchi").[1] In the course of dismissing the City of Nelson's appeal and ordering a new trial on the question of whether the City's snow clearing practices fell below the standard of care and caused Ms. Marchi's injuries, the Court revisited the question of what public authority decisions can be considered "core policy" matters that do not attract negligence liability.

Marchi's potential significance for municipalities and their insurers is well-covered by my colleagues.[2] In contrast, this brief comment, written for counsel arguing and courts hearing policy immunity defences, does three things:

Part I briefly sets out the facts in Marchi and the decision's judicial history.

Part II outlines the two central doctrinal changes in Marchi, namely the articulation of the separation of powers justification for "core policy" immunity and the resulting new framework for analysing the issue. Importantly, those changes orient the analysis around a single, overarching question of law: whether the nature of the impugned act or decision falls within the core institutional competencies of another branch of government, such that subjecting it to private law scrutiny would offend the separation of powers.

Part III explains how, in light of that central question, the court's task has changed, and what jurisprudential resources counsel and courts have to resolve the question in particular cases. It ends on a hopeful note: by instructing courts to squarely address the underlying and difficult separation of powers questions raised by "core policy" immunity, perhaps Marchi can lead us out of decades of judicial and academic confusion.[3]

Part I: Facts and judicial history

The underlying facts are straightforward: one January night in 2015, after parking her car on Baker Street in downtown Nelson, British Columbia, Taryn Joy Marchi stepped into a ploughed snowbank and sustained a significant leg injury. She sued the City, alleging it had been negligent by creating the snowbank without providing direct access to sidewalk.[4]

The trial judge, McEwan J, dismissed Ms. Marchi's claim. He accepted the City's arguments, including its bona fide policy defence: he found that the snow had been cleared in accordance with its stated policy, which was itself not unreasonable nor the result of a manifest lack of appreciation for the attendant risks.[5]

A unanimous panel of the British Columbia Court of Appeal allowed Ms. Marchi's appeal, finding, inter alia, that McEwan J erred in accepting the City's submission that all snow clearing decisions – whether made by the Council, a Works Superintendent, or street crews – were "policy" decisions that should be insulated from judicial scrutiny, rather than "operational" decisions that could ground a duty of care.[6]

The City was granted leave to appeal to the Supreme Court in August of 2020 and the appeal heard in March 2021.[7]

Part II: The decision in Marchi and the new central question

Writing for a unanimous Court, Justices Karakatsanis and Martin dismissed the City's appeal and ordered a new trial.[8] On the central issue – the scope of public authority liability in negligence – they held that the trial judge had erred in finding that the City's snow removal decision was a policy decision that could not ground a duty of care.[9]

Marchi is the latest in a long line of Canadian cases grappling with a familiar and difficult problem: given that legislatures have rendered the Crown liable in tort "as if it was a person," how are courts to apply private law negligence principles to the broad swath of decisions taken by public authorities?[10]

Since 1989, Canadian courts have immunized some sphere of Crown decisions from liability in negligence by holding that they cannot ground a duty of care. In Just v British Columbia, the Court instituted the "policy/operational" distinction, holding that the true "policy" decisions could not attract liability, but that "operational" decisions implementing policy choices could do so.[11] More recently, in R v Imperial Tobacco Canada Ltd., McLachlin CJ retreated from Just's "notoriously difficult" policy/operational distinction in favour of immunizing only "core policy" decisions – those that represent a course or principle of action based on a balancing of economic, social and political considerations – where they are not irrational or taken in bad faith.[12]

The Court's reasoning on this issue in Marchi, which includes clarification and application of the "core policy" immunity recognised in Imperial Tobacco, forms the heart of the decision. It includes two key doctrinal changes.

First, the Court clearly articulates that the purpose of "core policy" immunity in negligence is to maintain the separation of powers, the unwritten constitutional principle that recognises the distinct institutional capacities of each branch of government, and maintains that their core functions must be kept independent of one another.[13]

In particular, as the Court explains, the immunity aims to maintain the separation of powers by protecting those decisions that, if made subject to the judiciary's private law oversight, would constitute infringements on the core functions of the other branches:

[42] The primary rationale for shielding core policy decisions from liability in negligence is to maintain the separation of powers. Subjecting those decisions to private law duties of care would entangle the courts in evaluating decisions best left to the legislature or the executive. The executive, legislative, and judicial branches of government play distinct and complementary roles in Canada's constitutional order [citations omitted]. Each branch also has core institutional competencies: the legislative branch has the power to make new laws, the executive branch executes the laws enacted by the legislative branch and the judicial branch decides disputes arising under the laws [citations omitted].

The separation of powers justification for the immunity is repeated throughout the decision: Karakatsanis and Martin JJ explain that "core policy decisions are immune from negligence liability because the legislative and executive branches have core institutional roles and competencies that must be protected from interference"[14], that it is the separation of powers rationale "animating" the immunity[15]; and that "private law liability for core policy decisions would undermine our constitutional order."[16]

The second key doctrinal change follows the first: the Court (non-exhaustively) identifies four new "hallmarks" of core policy decisions for courts to consider when faced with a policy immunity defence in negligence. Importantly, the relevance of each hallmark or factor is a function of whether it is more likely to engage the separation of powers rationale. None are determinative, and the list of hallmarks is not closed.[17]

The first is the level and responsibilities of the decision maker. Tracking the separation of powers justification, the Court explains that the relevance of this factor ultimately turns on how closely related the decision maker is to a democratically-accountable official:

[62] First: the level and responsibilities of the decision-maker. With this factor, what is relevant is how closely related the decision-maker is to a democratically-accountable official who bears responsibility for public policy decisions. The higher the level of the decision-maker within the executive hierarchy, or the closer the decision-maker is to an elected official, the higher the possibility that judicial review for negligence will raise separation of powers concerns or have a chilling effect on good governance. Similarly, the more the job responsibilities of the decision-maker include the assessment and balancing of public policy considerations, the more likely this factor will lean toward core policy immunity. Conversely, decisions made by employees who are far-removed from democratically accountable officials or who are charged with implementation are less likely to be core policy and more likely to attract liability under regular private law negligence principles (Just, at pp. 1242 and 1245; Imperial Tobacco, at para. 87).

The second is the process by which the decision was made. The more the process resembles the deliberative, public, and broad based, prospective decision making involving multiple levels of authority (like legislative or executive deliberation), the more likely judicial interference with the decision will offend the separation of powers:

[63] Second: the process by which the decision was made. The more the process for reaching the government decision was deliberative, required debate (possibly in a public forum), involved input from different levels of authority, and was intended to have broad application and be prospective in nature, the more it will engage the separation of powers rationale and point to a core policy decision. On the other hand, the more a decision can be characterized as a reaction of an employee or groups of employees to a particular event, reflecting their discretion and with no sustained period of deliberation, the more likely it will be reviewable for negligence.

The third hallmark is the nature and extent to which the decision or action involves budgetary considerations. Some budgetary decisions, like allotments for entire departments or agencies, are more likely to engage the separation of powers rationale than day-to-day budgetary decisions of employees:

[64]  Third: the nature and extent of budgetary considerations. A budgetary decision may be core policy depending on the type of budgetary decision it is. Government decisions "concerning budgetary allotments for departments or government agencies will be classified as policy decisions" because they are more likely to fall within the core competencies of the legislative and executive branches (see, e.g., Criminal Lawyers' Association, at para. 28). On the other hand, the day‑to‑day budgetary decisions of individual employees will likely not raise separation of powers concerns.

The final new hallmark is the degree to which the decision was based on objective criteria, such as technical standards or general standards of reasonableness. The more a court is required to make value judgments, the more likely the separation of powers is to be engaged:

[65] Fourth: the extent to which the decision was based on objective criteria. The more a government decision weighs competing interests and requires making value judgments, the more likely separation of powers will be engaged because the court would be substituting its own value judgment (Makuch, at pp. 234-36 and 238). Conversely, the more a decision is based on "technical standards or general standards of reasonableness", the more likely it can be reviewed for negligence. Those decisions might also have analogues in the private sphere that courts are already used to assessing because they are based on objective criteria.

Taken together, these two developments reorient the policy immunity analysis on a single, overarching question: does the impugned act or decision fall within a core competency of the legislature or executive?

Part III – Hopeful practice notes

If the foregoing is correct, courts analysing claims for "core policy" immunity after Marchi will be squarely engaged in determining the limits of their own jurisdiction. The goal of the inquiry is no longer to characterise a government act as one of "policy" or "operation" (as in Just) or whether a public authority's decision is sufficiently based on "economic, social, or political" considerations to be immune from tort liability (as in Imperial Tobacco). Rather, the court must decide whether the impugned act or decision falls within the core competencies of another branch of government.

Courts and counsel are not without resources to address these questions. The jurisprudence on the unwritten principles of the constitution (including judicial independence and the separation of powers), the division of powers, and parliamentary privilege will likely all provide some assistance in identifying the contours of each branch's core competencies, and may reveal additional "hallmarks" of core policy decisions falling within them.  Of equal importance will be the careful identification of the impugned decision or action in pleadings, so as to assist the court in deciding whether that action falls within a core competency of a non-judicial branch.

We can close here on a hopeful note. Perhaps the tortured doctrinal history of policy immunity in negligence has been the result of our obscuring the difficult and underlying separation of powers issues behind labels like "policy" and "operational." It is perhaps better that finally, after decades of frustration, we are squarely addressing the hard, fundamental questions.

Should you have any specific questions about this article or would like to discuss it further, you can contact the author or a member of our Government Affairs Group.


[1] Nelson (City) v Marchi, 2021 SCC 41 ["Marchi SCC"].

[2] Erin D. Farrell, Belinda A. Bain, Heather Fisher, Benoit M. Duschesne, and Michael S. Polowin, "Supreme Court of Canada clarifies applicability of governmental policy immunity"   

[3] See, for instance, Paul Daly, "The Policy/Operational Distinction – a View from Administrative Law" in Matthew Harrington (ed), Compensation and the Common Law (LexisNexis 2015) 2-3; David Stratas, "The Liability of Public Authorities: New Horizons" [2015] 69 SCLR (2d) [28-33]; Freya Kristjansen and Stephen Moreau, "Regulatory Negligence and Administrative Law" [2012] 25 Can J Admin L & Prac 103; Alexander M. Pless, "The Relationship between Crown Liability and Judicial Review: Notes from Quebec" [2015] 69 SCLR (2d) 41.

[4] Marchi SCC at 7.

[5] Nelson v Marchi (City of), 2019 BCSC 308 ["Marchi BCSC"] at para 36.

[6] Marchi v Nelson (City of), 2020 BCCA 1 ["Marchi BCCA"] at paras 7, 8, 13.

[7] City of Nelson v Taryn Joy Marchi, 2020 CanLII 57554 (SCC).

[8] Marchi SCC at para 103.

[9] Marchi SCC at para14.

[10] Marchi SCC at 38; see, for instance: Crown Liability and Proceedings Act, RSC 1985, c C-50, s 3; Crown Liability and Proceedings Act, 2019, SO 2019, c 7, Sch 17, s 8(1). New Zealand, Australia, and the United Kingdom all have similar provisions: Peter W Hogg QC, Patrick J Monahan, Wade K Wright, Liability of the Crown (4th edn, Thompson Reuters 2011) 188, 194 ["Hogg et al"].

[11] Just v British Columbia [1989] 2 SCR 1228 at paras 1240, 1244-45 (per Cory J). The policy/operational distinction was subsequently affirmed and applied Brown v British Columbia (Minister of Transportation and Highways) [1994] 1 SCR 420.

[12] R v Imperial Tobacco Canada Ltd, 2011 SCC 42 at para 90.

[13] Marchi SCC at para 42; see, more generally, References re Greenhouse Gas Pollution Pricing Act, 2021 SCC 11 at 279-285.

[14] Marchi SCC at para 67 [emphasis added].

[15] Marchi SCC at para 3.

[16] Marchi SCC at para 47.

[17] Marchi SCC at para 66.

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