© Copyright 2006 Rogers Publishing Ltd. The following article first appeared in the January 2005 edition of BENEFITS CANADA magazine.
The Supreme Court has ruled the differential treatment of common law and married spouses in relation to CPP survivor benefits does not violate the Charter.

THE MOST RECENT WORD ON THE VALIDITY OF CHALLENGES to the provision of pensions and benefits based on the equality provisions in the Charter of Rights and Freedoms belongs to the Supreme Court of Canada(SCC). In a decision released Oct. 28, 2004, the SCC considered yet another challenge to the Canada Pension Plan(CPP)based on a claim that it was discriminatory.

In Hodge vs. Canada(Minister of Human Resources Development), the SCC held that the differential entitlement to survivor benefits of common law and married spouses under the CPP did not violate the equality provisions in Section 15 of the Charter.

At issue in Hodge was a common- law spouse’s right to survivor benefits under the terms of the CPP, which turns on who is included as a “spouse.”

The CPP definition of “spouse” includes both a person who is married to a contributor and a person who is cohabitating with the contributor in a conjugal relationship(a common-law spouse)at the relevant time. To qualify for CPP survivor benefits, the common- law spouse and the contributor must be cohabiting at the time of the contributor’s death. There is no such cohabitation requirement for married spouses.

This difference between the benefits available to separated married spouses and separated commonlaw spouses was challenged by the claimant in Hodge before several levels of administrative tribunals and courts, with varying results: the CPP Review Tribunal agreed with the claimant, the Pension Appeals Board reversed it and the Federal Court of Appeal restored the Tribunal decision. The SCC settled the question by deciding against the claimant.

In Hodge, the main question was: what group should the claimant be compared to for the purpose of determining whether he or she is being treated unequally, contrary to section 15. The claimant argued that separated common-law spouses were comparable to separated married spouses. And since separated married spouses are eligible for CPP survivor benefits without the cohabitation requirement, it was discriminatory to deny survivor benefits to similarly situated common-law spouses.

However, the SCC held that the appropriate comparison group were former married spouses(i.e., divorced former spouses). Given that divorced spouses are the appropriate comparison group, there was no discrimination because divorced spouses are also not eligible for CPP survivor benefits.

It is interesting to contrast the decision in Hodge with the decision of the Ontario Superior Court in Hislop vs. Canada. In Hislop, the court ruled that the exclusion of same-sex survivors from the CPP benefit was contrary to the Charter. In Hodge, the SCC emphasized that its analysis dealt only with opposite-sex couples. Thus, it’s possible that different considerations might apply to an inequality claim by same-sex former spouses for a survivor’s pension.

The Hodge case is unlikely to have a major direct impact on private pension plans, where pension legislation differs from the CPP in how it defines eligibility for survivor benefits. Moreover, the eligibility requirements for survivor benefits under private plans are different in each jurisdiction.

The main significance of Hodge is that it serves as a reminder of the different rules regarding eligibility for survivor benefits from jurisdiction to jurisdiction and from plan to plan. The result we are left with is that a separated married spouse may be eligible for a survivor benefit under the CPP but not under his or her former spouse’s private pension plan. Thus, it is critical for plan administrators to understand that a declaration of spousal status for purposes of CPP benefits may not produce the same survivor benefits under a private plan. For pension administrators, ensuring the proper payment of survivor benefits, already a difficult determination, just got a little bit more complicated.

Paul Litner is a partner in the pension and benefits department at Osler, Hoskin & Harcourt LLP in Toronto. plitner@osler.com