Quebec pension reforms face major legal uncertainty despite deal with firefighters

The agreement reached Friday between the City of Montreal and its firefighters does little to lift the uncertainty surrounding Quebec’s legislation requiring municipal workers to contribute equally to their pension funds with employers.

The controversial legislation, passed in December 2014 as part of an omnibus pension reform bill, targets municipalities that now account for up to 70 per cent of contributions. The law was part of an to help reduce what the province says is a $4-billion deficit in municipal plans.

Since the legislation came into force, 100 firefighters retired en masse to avoid the effect of the law; some 17 constitutional challenges are still pending in the courts; and protests have continued by municipal employees that have included hundreds of workers storming Montreal’s city hall in August 2014 and trashing council chambers.

Under the legislation, employers and municipalities must restructure their pension plans within a mandated period. Failing agreement, the issue goes to arbitration.

Read: Quebec law scrapping indexation unconstitutional, unions allege

“What the firefighters appear to have done is make the call that is was preferable to control the outcome, rather than have a third party impose a solution on them,” says Julien Ranger, a pension lawyer with Osler Hoskin & Harcourt LLP in Montreal.

The settlement, however, doesn’t appear to dispose of the constitutional challenges. If the unions convince the courts to strike the new law, the decision could nullify the settlement, together with other agreements reached throughout the province. That’s despite the fact that the Montreal firefighters association’s 2,400 members, representing one of the province’s larger municipal bargaining units, voted 94 per cent in favour of the settlement.

The judicial proceedings also leave the fate of the various decisions rendered by arbitrators in doubt. Meanwhile, various unions that were unable to reach a settlement are attempting to forestall arbitration by resorting to the courts to challenge the jurisdiction of the provincially appointed arbitrators. In January 2016, arbitrator Claude Martin decided to suspend the arbitration proceedings between the City of Montreal and its police department until the Superior Court had pronounced on the constitutionality of the pension legislation, Bill 15.

“If any of these challenges succeeds, everything could revert to the previous legislation,” says Ranger. “That leaves all the stakeholders in a place where there’s no certainty.”

Read: Quebec should scrap municipal DB plans: report

In the meantime, The Canadian Press is reporting that Montreal police are putting a long-standing protest tactic, one in which they’ve been wearing camouflage pants to express their unhappiness with the pension changes, on hold. According to the news service, police are putting a temporary pause on the pants protest as the two sides attempt to reach a deal on the pension issue.