Government of Quebec wins important victory concerning stabilization payments before Federal Court of Appeal

On June 11, 2008, the Government of Quebec won an important victory before the Federal Court of Appeal, which upheld a Federal Court judgment of the previous summer. In August 2007, Justice François Lemieux of the Federal Court ruled in Québec's favour in granting an action lodged against the Government of Canada after it turned down the province's claim for a stabilization payment for fiscal year 1991-1992 pursuant to the Federal Provincial Fiscal Arrangements Act. (The stabilization program compensates provinces whose revenues drop from one year to the next for reasons outside of their control.) Québec had filed suit, arguing that the federal Finance Minister had misinterpreted and misapplied the Act and its regulation in assessing the province's application for a stabilization payment, thereby depriving Québec of a payment evaluated at $127 million. Justice Lemieux ruled in the province's favour on four of the six issues raised, representing a payment of $103 million. The federal government appealed from Justice Lemieux's judgment before the Federal Court of Appeal. Less than ten days after the hearing of the appeal, the Federal Court of Appeal dismissed all of Canada's grounds for appeal and confirmed Justice Lemieux's judgment. As a result, the Court ordered the federal Finance Minister to reassess Québec's application for a stabilization payment taking into account the Court's findings as to the proper interpretation of the Act. The Government of Quebec was advised by a team from Fasken Martineau that included Réal Forest, Dominique Gibbens, Stéphanie Lavallée and Siviu Bursanescu. Judgment of the Federal Court of Appeal (in French only)