Human rights lawyers hail Quebec tribunal’s finding that pension provision is discriminatory

“It’s another indication of the new trend from the Supreme Court about real equality as opposed to formal equality,” noted Montreal human rights lawyer Julius Grey of Grey Casgrain LLP, one of a team of five lawyers who successfully pleaded the case. “The SCC said in the Fraser and G cases that equality must be real, and it must be effective. And in fact, people who are handicapped have no choice, and therefore it was unjust to deprive them of their full pension.”

According to Sophie Mongeon, a Montreal lawyer with Desroches Mongeon Avocats Inc., the ruling will be read by constitutional law students for years to come. “The adjudicators were truly daring,” said Mongeon, who also was part of the legal team. “This is the first time a specialized administrative tribunal has declared a provision unconstitutional.”

Erin Sandberg, a lawyer with the Quebec Human Rights Commission, which acted as interveners, said it is an excellent and important decision that highlights that a pension cutback widens the economic gap for people with disabilities, “already penalized” by life. “The right to equality is compromised when a person does not have access to the same or financial measures provided for by law,” said Sandberg. “So someone who does not choose to be disabled is prevented from working and earning a living and penalized even more, which just perpetuates the disadvantages. It is a disadvantage that is legal because it is provided for by law, but it is a disadvantage that perpetuates the situation of exclusion, which is contrary to the equality rights set out in the Charter.”

The long judicial saga began seven years ago in 2016 when one of the applicants, who goes by the initials M.G., challenged the constitutionality of a provincial legislative provision following review decisions issued by Retraite Québec, the provincial body that administers the Quebec pension plan, family allowance and public-sector pension plans. M.G. was joined by four other applicants who were forced to claim a disability pension between the ages of 60 and 65 after “suffering various events.” More than 26,000 Quebecers face the same situation as the applicants, which represents approximately 1.24 per cent of all pensions paid.

QUEBEC PENSION PLAN

The Quebec Pension Plan (QPP), unlike the Canada Pension Plan, reduces pension benefits for anyone who voluntarily asks to receive their retirement pension plan early, at age 60 instead of 65, an approach it applied towards pensioners with disabilities, even though they were unable to work. In Quebec, the disability pension is automatically replaced by a retirement pension on the beneficiary’s 65th birthday, and it is reduced in proportion to the number of months for which a disability pension was paid between the ages of 60 and 65.

For those who retire early, the penalty can be sizable. A pensioner who sought benefits from 2016 to 2022 before the age of 65 had their pension reduced by 0.5 per cent per month, a figure that now stands at 0.3 per cent per month. In other words, under sections 120.1 (in force) and 120.2 (repealed in 2022) of the Act respecting the Quebec Pension Plan (Act), people with disabilities have seen their retirement pensions drastically reduced by anywhere between 24 per cent and 36 per cent of the normal pension paid to a person aged 65.

By imposing the same penalty on people who have retired early as on people who have received a disability pension between the ages of 60 and 65, the legislator fails to take into account the disadvantaged situation in which they already find themselves in Canadian society because of their reduced ability to generate income due to their disability and discrimination based on that disability, thus creating a real difference in treatment, said a formal notice the Quebec Human Rights Commission issued to the provincial government in February 2017, citing the Supreme Court of Canada in Law v. Canada (Minister of Employment and Immigration), [1999] 1 S.C.R. 497.

The formal notice further points out that disability as defined by the Act is encompassed by the prohibited ground of discrimination “handicap,” and that the Supreme Court in Granovsky v. Canada (Minister of Employment and Immigration), [2000] 1 S.C.R. 703 recognized that disability within the meaning of the Canada Pension Plan is covered by the prohibited ground of discrimination of disability.

M.G. and the four other applicants argued that sections 120.1 (in force) and 120.2 (repealed in 2022) of the Act infringed the right to equality, article 15, based on the combined effect of age, gender, mental or physical disability and poverty, by denying an advantage in a way that has the effect of reinforcing, perpetuating and accentuating a disadvantage for people who received disability benefits between the ages of 60 and 65. They also alleged that it infringed articles 10, 4 and 45 of the Quebec Charter.

The Quebec government countered that disability benefits paid between the ages of 60 and 65 are deemed to be part of an application for early retirement. As a result, it is entitled to cut off the provincial pension that would normally be paid at age 65. It also maintained that the cuts against people with disabilities were justified in order to limit future increases in the contribution rate. It is therefore an effort to ensure fairness between the generations, added the provincial government.

INFRINGES QUEBEC CHARTER

In M.G. c. Retraite Québec, 2023 QCTAQ 07511, a 39-page ruling, adjudicators Stéphan Dulude and Karl Lefebvre deemed it unnecessary to delve into arguments raised by the parties dealing with the Quebec Charter, focusing only on the Canadian Charter.

Paying heed to the two-part test of the s. 15 Charter analysis outlined in Kahkewistahaw First Nation v. Taypotat, 2015 SCC 30, the adjudicators came to the conclusion the contested law passed the first test as it “creates or contributes” to a disproportionate effect on the applicants compared to other groups. The adjudicators noted the trigger for the reduction in the pension plan is the payment of a disability pension between the ages of 60 and 65.

“The payment of a disability pension is a direct result of the recognition by Retraite Québec of a condition of severe and prolonged physical or mental disability (or deficiency),” held the adjudicators. The impugned provisions “directly target the category of persons who have been declared disabled and have received a pension as support.”

The adjudicators also concluded that the constitutional challenge passed the second part of the s. 15 Charter test as the impugned sections “impose a burden or deny a benefit” to physically disabled persons by imposing a reduction in their pension at age 65 because of a disability within the meaning of the Act between age 60 and 65. The pension cutback, added the adjudicators, further widens the economic gap between the person with a disability, “who is already penalized by his or her situation,” and the rest of the population, which has the effect of reinforcing, perpetuating or accentuating the disadvantage suffered by the protected group.

“This is important, because the commission’s position has always been that if someone is in a position where they are receiving invalidity or disability, this is a situation that is beyond their control,” said Sandberg. “Someone who chooses to receive a retirement pension earlier, such as a so-called early retirement pension, is making that choice simply for financial or personal or other reasons, but the choice is up to the individual. A disabled person, on the other hand, has no such choice. But the penalty remains the same.”

Contrary to the Quebec government’s stance, the cutbacks are not justified, said the adjudicators. Evidence by the Quebec government relied heavily on comments from members of the National Assembly, ministers and civil servants, and failed to explain why if the financial health of the pension plan was at stake the provincial government opted to reduce the 0.5 per cent rate to 0.3 per cent in 2022.

“There is no proportionality between the prejudicial effects of applying the 0.3 per cent or 0.5 per cent rates for the applicants protected by s. 15 of the Canadian Charter and the objective pursued by the State of maintaining a financially viable Plan,” concluded the adjudicators. “The interested parties provided a good demonstration of the unfortunate and disproportionate consequences of applying these measures, and the Attorney General of Québec confined itself to theoretical generalities to support its premise.”

Grey is far from surprised that the adjudicators came to this conclusion. “My view of that is financial risk is not enough,” said Grey.

“There are a number of cases which say it’s not enough to say that it costs something. You’ve got to show that it’s necessary in a free and democratic society, and that the risk is such that it will bring down the government. So their burden is very high.”

The adjudicators declared article 120.2 of the Act as it existed from 2016 until its repeal in 2022, and article 120.1 as inapplicable only to the applicants. The Administrative Tribunal of Quebec cannot issue declaratory judgments, explained Mongeon. Therefore, others facing the same plight as the applicants can either lodge an individual appeal with the Administrative Tribunal which will likely create a bottleneck or launch a class action which would limit them to collect compensatory sums instead of their real losses, said Mongeon.

But Grey doesn’t believe it will reach that point. “If they don’t appeal they’re certainly going to apply it” to everyone, said Grey. “I’m not sure that they want a Supreme Court judgment or a Court of Appeal judgment. But it’s up to them. They’re free to seek judicial review.”

The Quebec government is appealing the decision before Quebec Superior Court.

This story was originally published in Law360 Canada.