Pension Litigation Update

July 01, 2001 In December 1999, the Association commenced legal actions challenging Bill C-78, in conjunction with other federal government unions. Bill C-78 is the legislation that gives the federal government control of the $30 billion plus surplus in the Public Service Superannuation Plan, the Canadian Forces Superannuation Plan and the Royal Canadian Mounted Police Superannuation Plan. The legal actions challenge ownership of the surplus prior to the enactment of the legislation, and also challenge the legitimacy of Bill C-78. We take the position that the surplus represents deferred wages and belongs to employees. Furthermore, our stand is that Bill C-78 is in violation of the Canadian Charter of Rights, the Bill of Rights, and expropriation law. A similar legal action was also commenced by an Armed Forces Pensioners’ Association as well as RCMP Associations from Ontario, Quebec and B.C.
Since the actions were commenced, the federal government lawyers have brought a number of procedural motions that have prevented the cases from proceeding on their merits. In the first motion, the government claimed that the three cases should be heard in the Federal Court of Canada rather than the Ontario Superior Court of Justice. The government lost this motion and costs were awarded to the unions and associations challenging Bill C-78. The government then sought leave to appeal this decision to a higher level of court. Again, they were unsuccessful and costs were given to the unions and associations. Therefore, the cases will be proceeding in the Ontario Court.
More recently, the federal government lawyers have brought further motions that will be heard by a judge on July 3, 2001. One of the issues is whether some of the unions and associations have the legal status to bring actions in the Ontario Court. The second issue is whether the three actions should be consolidated into one action, with only one law firm representing all of the unions and associations. The unions and associations will be resisting both of these motions. With regard to the consolidation issue, they will argue that even though the three actions raise many similar issues, there are some differences. In addition, the three groups will say that they are entitled to separate legal representation. (In a decision on one of the previous motions, the judge noted that it was surprising that there were only three actions given the number of organizations involved.) Finally, counsel in all three actions have assured the court and government counsel that they are willing to have the three actions heard together and that they will cooperate in order to avoid unnecessary duplication in the litigation process.
In an effort to move the actions forward as quickly as possible, counsel for the unions and associations recently met with a case management master - a court official who has powers similar to a judge and assists the parties in setting out time tables for completing the next steps in the actions and scheduling motions etc. The parties will be meeting again with the master in September, 2001 to discuss the exchange of documents and scheduling examinations for discovery. If all goes according to plan, it is likely that the actual trials dealing with ownership of the surplus and challenging the legitimacy of Bill C-78 will take place some time in 2002 or 2003.
You may recall that we currently have two additional legal challenges which are currently being held in abeyance at the Federal level. These cases arose from the government’s actions to amortize approximately $11.2 billion from the various federal pension plans, and its failure to credit interest to the pension account based on the full value of the plan. These amounts are in addition to the $30 billion it intends to take under Bill C-78. These two cases will proceed once the present challenge to Bill C-78 is completed.