Sunday, March 13, 2011

Supreme Court of Canada Dismisses Withler Appeal

In a decision released on March 4, 2011, the Supreme Court of Canada upheld the constitutionality of provisions in both the Public Service Superannuation Act, and the Canadian Forces Superannuation Act that reduced the amount of a supplementary death benefit paid to the spouse of a deceased member after the member reached a certain age. The case is Withler v. Canada (Attorney General), 2011 SCC 12.

I described this case in my post on the British Columbia Court of Appeal decision as follows:

Both pension plans provide members with group life insurance, but the amount payable on the death of a member is reduced after a certain age. The death benefits payable under the Public Service plan equals twice the annual salary of a member who dies before the age of 66. If the member dies after the age of 66 the death benefit is lower. Beginning at the 66, the payment is reduced by 10% a year. The Canadian Services plan is similar except that the payouts are reduced at the age of 61.

A class action lawsuit was brought on behalf of spouses and partners of deceased members who received a reduced benefit. They argued that the legislation violates section 15(1) of the Canadian Charter of Rights and Freedoms, which says:

15.(1) Every individual is equal before and under the law and has the right to the equal protection and equal benefit of the law without discrimination and, in particular, without discrimination based on race, national or ethnic origin, colour, religion, sex, age or mental or physical disability.
The trial judge, Madam Justice Garson, held that these provisions of the pension plans did not violate section 15(1), and dismissed the claims. The majority of the Court of Appeal agreed with the trial judge.

The Supreme Court of Canada dismissed the plaintiffs' appeal of the Court of Appeal decision. Although on its face, the lower death benefits on the death of older members creates a distinction on the basis of age, viewed in the overall context of the pension scheme, the Court held that they did not offend the Charter protection of substantive equality.

Chief Justice McLachlin, and Madam Justice Abella, stressed the importance of considering the context of the plan:

[71] In approaching this question, it is useful to identify at the outset the relevant contextual factors. As discussed above, a central consideration is the purpose of the impugned provision in the context of the broader pension scheme. It is in the nature of a pension benefit scheme that it is designed to benefit a number of groups in different circumstances and with different interests. The question is whether the lines drawn are generally appropriate, having regard to the circumstances of the groups impacted and the objects of the scheme. Perfect correspondence is not required. Allocation of resources and legislative policy goals may be matters to consider. The question is whether, having regard to these and any other relevant factors, the distinction the law makes between the claimant group and others discriminates by perpetuating disadvantage or prejudice to the claimant group, or by stereotyping the group.

The Supreme Court of Canada agreed with the trial judge’s analysis of the plan. In the cases of the death of younger members, the death benefit provided a limited income stream to their spouses and partners on the unexpected death of the members. The surviving spouses and partners of deceased younger members would not usually have the protection of a pension.

On the death of older members, their spouses and partners receive survivor’s pension benefits and health and dental care benefits under other provisions of the pension plans. These benefits provide a stream of income to the spouses and partners. The supplementary death benefits have a more limited function of assisting with last illness and death expenses when older members die.

The Supreme Court of Canada held that the distinctions based on age in the pension scheme as a whole corresponded with the needs of the claimants, although the correspondence was not perfect. Accordingly, the reduced death benefits based on age did not violate section 15 of the Charter.

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