Industry

Proposed amendments to Nova Scotia's Pension Benefits Act will change the way plan sponsors in Nova Scotia administer pensions and benefits plans. Bill 9 is currently before the Nova Scotia House of Assembly, which expects to pass the amendments some time this month.

The changes have elicited mixed reactions from plan sponsors and administrators, says Hugh Wright, a partner with the law firm McInnes Cooper in Halifax, who practices in the area of pension benefits and advises plan sponsors and administrators.

He says the proposed change to surplus distribution, for instance, is attracting the most attention. That change would require employers to obtain the consent of current and former plan members before employers can withdraw 100% of surplus. The result, says Wright, is that "employees wouldn't consent, unless they get part of the surplus."

With Ontario considering making it unnecessary for employers to secure employee consent, following the discussion paper last summer, Surplus Distribution from Defined Benefit Pension Plans, Nova Scotia would be the lone province requiring employees' consent.

"Employers can no longer withdraw 100% of the surplus, even if they have a clear legal entitlement," says Wright. The proposed amendments will effectively mean that the best employers can hope for is sharing surplus with current and former plan members, he adds.

Some of the other 140 proposed amendments include expanding pension coverage for part-time employees, increasing fines for non-compliance and requiring employers to set up pension advisory committees upon plan member request.

Bill 9 will require all plan sponsors to amend their plans and administrative practices, but it will also remove ambiguities in the Act, which is considered to be more positive for plan sponsors and administrators.

If Bill 9 passes, it could take effect as early as Jan. 1.

--Jamie Moorhouse

A judge dismissed a class-action lawsuit against the University of Toronto but said the retired female professors and librarians suing the university have strong individual cases. The women are suing for back pay and richer pensions.

The judge explained he couldn't certify the class-action lawsuit because, though the women as a group were trying to prove sexual discrimination, they would each have to prove individually that they were victims of discrimination. The women allege they were paid about 20% less than their male counterparts.

The Federal Court of Canada, trial division, in Winnipeg, ruled in early November that aboriginals can take part in the Canada Pension Plan (CPP). The court ruled in favour of Rose Bear, a Brokenhead First Nation woman, who brought the case against the federal government claiming Ottawa discriminated against aboriginal people by excluding them from CPP between 1966 and 1988.

Tim Valgardson, Bear's lawyer with the firm Levene Tadman in Winnipeg, says the decision affects all aboriginals employed on reserves. (Valgardson says Indian and Northern Affairs Canada refused to release the exact number of aboriginals employed on reserves to date.)

He explains that when CPP was first established in 1966, aboriginals were not allowed to contribute. But in 1988, the federal government amended the CPP Act to allow aboriginals to contribute. "But one of the things [the federal government] didn't allow aboriginals to do was to contribute back to 1966," says Valgardson.

For Bear, who will retire in 2004, her net monthly CPP payment is estimated to be $275 per month. After the ruling, she could expect up to $800 per month. In total, the federal government says the ruling could cost it up to $776 million to cover all aboriginals.

Institutional investors saw a spate of new indexes launch in November. Dow Jones Indexes launched style indexes to measure growth and value stocks in Canada. Called the Dow Jones Canada Growth and Value Indexes, they provide another asset allocation tool and give pension plans benchmarks to measure the performance of their asset managers.

The Canadian Venture Exchange (CDNX), a subsidiary of The Toronto Stock Exchange Inc., teamed up with Standard & Poor's (S&P), a financial information and investment analysis provider, to create a new venture capital market indicator, called S&P/CDNX Composite Index, for the Canadian venture capital market. The index will replace the current CDNX index.

Yield Curve Solutions launched the Canadian Fixed Income Securities Lending Index powered by FRI Corp. The company says the index is Canada's first benchmarking tool for the securities lending community. It includes 650 Canadian fixed income issues. The index was created to analyze securities lending results over specific periods of time.

The provinces will spend up to $20 billion more on healthcare this fiscal year (2001-2002) than they did five years ago, according to new statistics from the Canadian Institute for Health Information (CIHI) in Ottawa. CIHI says public spending on health is expected to reach $69.2 billion this year, up from $49 billion during the 1996-1997 fiscal year.

These numbers were released shortly before the Organization of Economic Co-operation and Development (OECD) met in November to review the value of healthcare spending. According to the OECD, the U.S. spends twice as much as Canada on healthcare per person, yet Canadians live an average of two years longer. Numbers also revealed that France spends less than Canada but has more hospital beds and more doctors.

The OECD says governments should use such statistical information when determining how healthcare dollars are spent to ensure they produce results.

CIHI broke down its numbers and says that this year about 43% of all Canadian health dollars will go to hospitals and 20% will go to physicians. Another 10% will go to institutions other than hospitals, such as nursing homes. The remainder of those health dollars will go to drugs (7.7%), administration (7.3%) and capital (5%).

Canada's healthcare system is stagnant, says the Canadian Council on Integrated Healthcare (CCIH), and government inaction is putting Canadians at risk.

The CCIH presented this information in its submission to the Royal Commission on the Future of Healthcare, chaired by Roy Romanow, in November. In its report, the Council outlines three challenges that Ottawa faces.

> Leadership. The Council asks that government renew a national healthcare agenda, define core services and responsibilities of the public healthcare system, private insurance and the consumer.

> Human resource management. The Council says it's up to government to forecast human resource needs and manage recruitment and attrition.

> Funding. The Council says federal and provincial/territorial funding must be determined, as well as the boundaries of the public and private payers. Today's current debate over a two-tier system ignores the fact that many tiers of care already exist.

The CCIH also added that debate over a two-tier system ignores the fact that many tiers of care exist in Canada already and private funding remains an important part of health financing.