Supreme Court of Canada denies application for leave to appeal Bill 15 challenge

On April 11, the Supreme Court of Canada denied the application for leave to appeal the challenge to the Act to foster the financial health and sustainability of municipal defined benefit pension plans (Bill 15). Last August, the parties filed applications for leave to appeal before the Supreme Court following the Quebec Court of Appeal’s decision upholding the Quebec Superior Court’s ruling on this case.

You may recall, in July 2020, Judge Moulin of the Quebec Superior Court partially accepted the claims:

• He deemed the provisions in Bill 15 aimed at suspending the indexation of retired members’ pensions under this Act unconstitutional;
• He dismissed applications to declare unconstitutional other provisions concerning active members on the grounds that they did not substantially interfere with the freedom of association protected under the Canadian Charter of Rights and Freedoms.

Therefore, the Court of Appeal’s ruling to uphold Judge Moulin’s decision is considered the final decision on the merits of the case. As such, the provisions of Bill 15 applicable to active members under the Act remain in force. Bill 15’s provisions aimed at suspending the indexation of retired members’ pensions will no longer be applicable. However, claims for compensation of retired members under Bill 15 remain before the Superior Court.

Directives regarding the reinstatement of the suspended indexation of retirees are expected to follow this decision. The pension plans concerned are awaiting Judge Moulin’s decision regarding claims for compensation. The legislator could issue certain directives for the administration and funding of the pension plans in question, pending Judge Moulin’s ruling.

An estimate of the financial impact of this decision may need to be reflected in the municipal body’s December 31, 2023, financial statement. The accounting treatment is to be determined. Your Normandin Beaudry consultant will work with your auditor to help you manage the impact of this decision.

For more information about this ruling and its repercussions on your plan, contact our specialists who are closely monitoring the situation or email us.