A controversial appeal hearing involving provincial funding for non-Catholic students at Catholic schools concluded Wednesday at Saskatchewan's highest court.

The case saw the provincial government and its Catholic school system up against one of Saskatchewan's public school divisions at the Saskatchewan Court of Appeal in Regina.

It stemmed from a landmark court ruling in 2017, in which Justice Donald Layh ruled it was unconstitutional for the province to fund non-Catholic students at Catholic schools.

Layh wrote that funding "non-minority faith students" in faith-based schools violates both the Charter of Rights and "the state's duty of religious neutrality."

The decision was prompted by Good Spirit School Division's lawsuit against a Catholic school division and the province in 2005.

The Theodore case

In 2003, Good Spirit decided it was no longer feasible to keep the school in Theodore, Sask., open. The division wanted to bus the school's 42 students about 17 kilometres to the nearby town of Springside.

The public board decided that was best for the students, said executive director of Public Schools of Saskatchewan Norm Dray after the appeal hearing concluded Wednesday.

However, a group of Roman Catholics used provisions in the Education Act of 1995 and petitioned the Minister of Education to form Theodore Roman Catholic School Division — which is now part of Christ the Teacher Roman Catholic Separate School Division.

That school division bought the existing school in the village and renamed it St. Theodore Roman Catholic School. The majority of students switched to the Catholic system, despite not being Catholic.

Dray said the school board's decision to consider quality education for the students was "subverted."

Good Spirit only cares about money: province

On Tuesday, the province and Christ the Teacher accused the public school division of only caring about money and "market share."

"Public schools offer a service across this province that's there for everyone," Dray said in response.

"If there's enough funding to provide the resources to educate all of those students in a good way, then that's good."

Dray cautioned that what happened in Theodore could have happened anywhere.

"Public boards make decisions with public money that goes to them through taxation and that money has to be spent wisely and guarded carefully."

Dray said the public schools have never suggested the Catholic system should be shut down, but he said they believe the separate school system was designed to be separate.

Public schools, he said, are the "only schools that have to take all students, no matter what religion, no matter what race."

"Catholic schools were created with a mandate to educate Catholic students in a Catholic environment."

Good Spirit gets 5 hours in court

Good Spirit lawyers were allotted five hours Wednesday in their effort to convince the appeal court to uphold the 2017 decision.

Lawyer Roger Lepage said the government's current funding model is not religiously neutral, saying there is only a select group of non-Catholic students who get a right to free religious education — while others are left with no options.

He argued there's "one group of non-Catholics that get 100 per cent of funding" while the rest of the non-Catholic students who want faith-based education somewhere other than a Catholic school aren't entitled to the same benefits.

Depending on the criteria they meet, independent schools in the province receive between 50 and 80 per cent of the average per-student funding.

Good Spirit School Division representative Khurrum Awan addresses Saskatchewan's Court of Appeal Wednesday. (CBC)

That isn't constitutional or fair, he said, arguing the government's funding model is not neutral and suggesting it's actually based on religion.

Lepage further argued that it didn't matter that the Good Spirit division didn't present one particular individual from Theodore who had their charter rights violated.

He said the case was about all of the affected people province-wide.

He noted the separate school system exists for Catholic students and added non-Catholics must obtain permission of admission — and this can be revoked.

"The only public school is the public school where anyone can attend."

Determining who is Catholic

In court Tuesday, the province argued its current model is actually religiously neutral. It says imposing religious tests or demanding religious proof, like a baptismal certification, to determine funding would not be neutral.

However, Good Spirit lawyer Khurrum Awan rebuked that and the implication that determining religion would be difficult.

Currently, data on how many non-Catholic students attend Catholic schools isn't tracked. But the public school division argued that kind of data is tracked in other situations — such as the religion of teachers at Catholic schools, for example.

Awan said the trial judge had accepted evidence that showed the school closure in Theodore was a loss for the public school system.

He said the Catholic school compromised the viability of the public Springside school, as well as the viability of the public division's five-year plan to consolidate "small, inefficient schools."

Awan said the public school division initially suggested the Catholic school in Theodore itself was not legitimate because of the way it was formed.

"We were, in essence, arguing that this whole thing was a sham and there should be no funding for this school."

In the end, the court ruled in 2017 the province could not fund non-Catholic students at Catholic schools. Awan said the judge did not err in his decision.

National implications

It's not clear when the five judges who heard the appeal will reach their decision, which they reserved.

The Theodore case could have national implications as two other provinces — Alberta and Ontario — have publicly funded separate school systems.

"The community saved its school but prompted one of the most significant lawsuits in the province's history," court documents note.

Newfoundland and Labrador and Quebec both got rid of separate systems in the 1990s.