A group of retired public servants learned the hard way just how difficult it can be to mount a constitutional challenge to benefits changes, according to a Toronto lawyer.
In Bemister v. Canada (Attorney General), retired members of the voluntary public service health-care plan, which also covers active federal employees, claimed a move to double their share of premium costs violated sections of the Charter of Rights and Freedoms. In 2014, the federal government shifted the cost-sharing split for premiums paid by retired members of the plan, boosting their portion to 50 per cent from 25 per cent. The government is phasing in the move, which was effective April 1, 2015, over four years.
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In a verdict last month, Federal Court Justice Ann Marie McDonald rejected the retired members’ claims. “I conclude that the applicants have not established any breach of the Charter,” she wrote. “Further, had I concluded there had been a breach of Charter rights, I would have also found that the actions of the [Treasury Board] reflect a proportionate balancing of Charter values against the broader statutory objectives, and therefore that the [Treasury Board]’s actions and its decision were reasonable.”
As part of her ruling, McDonald noted the retirees had had input on the changes through their representative on the plan’s oversight committee. After the government started making its intention to change the cost-sharing arrangement in 2013, the committee met and made a number of recommendations to change the plan, McDonald pointed out.
“The reformulated joint recommendation included expanded vision care benefits, expanded reimbursement for certain medical devices, increased coverage for psychological services, elimination of the annual deductible and the implementation of the 50-50 cost-sharing ratio for retiree members to be phased in over a four-year period,” wrote McDonald. “However, the 50-50 cost sharing ratio would not be applied to certain low-income retirees who would remain at the 75-25 cost sharing ratio.”
The plan provides coverage for more than 600,000 members. Of the estimated 239,000 retirees from the federal public service, approximately 174,500 participate in the plan, McDonald noted. Among other arguments, the retirees suggested the benefits are a form of deferred compensation and put forward an expert witness who said the cost increase amounted to expropriation because retired members had already paid for the benefits while they worked for the government. The retirees’ arguments included an affidavit from a member whose monthly premiums will rise to $85 from $42.76 by April 2018, as a result of the changes to the plan.
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James Harnum, a lawyer with the pension and benefits practice group at Koskie Minsky LLP in Toronto, says the case is a classic example of the barriers government workers face when challenging changes to their pensions and benefits. “Laypeople frequently want to use the Constitution as a panacea for any problem they have with government, but the Charter is actually quite limited in its ability to remedy these issues,” he says. “Just because you think something’s unfair, doesn’t mean it’s illegal.”
Harnum says s. 15 of the Charter, which guarantees equality before the law, has traditionally proved to be the most fruitful for those with pension-related gripes. For example, in the 1990s, a series of decisions by high courts across the country found opposite-sex definitions of spouse breached the rights of same-sex couples denied pension rights as a result.
“Where the Charter is for pension and benefit changes that can’t be tied neatly to equality issues, then they don’t tend to be successful,” says Harnum.
In Bemister, the s. 15 complaint related to the retired status of the applicants, since active employees get 100 per cent of their premiums paid by their employer. But the judge pointed out that difference predated the latest changes and that the increase for retirees “was not of sufficient magnitude to support” a s. 15 violation.
In the case of Charter s. 7, which protects life, liberty and security of the person, Harnum says retirees will always struggle to make out a breach because, unlike a similar provision in the U.S. Constitution, it makes no mention of private property.
“The Charter does not protect economic rights,” he says.
Noting the retirees’ complaint was, at its core, one about the cost increase in their premiums, the judge found their arguments on s. 7 were “broad and general” and unsupported by evidence.
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According to Harnum, s. 2(d) challenges, which relate to freedom of association, are gaining in popularity among retirees thanks to a Supreme Court judgment recognizing that the provision protects the right to collective bargaining. However, in Bemister, McDonald wasn’t buying it, since the public service health-care plan covers both union and non-union members and doesn’t relate to a particular collective agreement.
Despite the failure of the Charter challenge, Harnum says it’s inevitable more cases will follow because governments face so few restrictions when altering pension and benefits terms for their own employees.
“When the government is both the employer and the legislator, they have the ability to make changes almost unilaterally,” he says. “As long as it’s done in a clear way, the only limitation on their actions comes from the Charter.”
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