May 2023
Municipal pension plans – Dismissal of appeals in the challenge of Bill 15
On May 10, the Quebec Court of Appeal dismissed all appeals challenging the Act to foster the financial health and sustainability of municipal defined benefit pension plans (“Bill 15” or the “MSPP Act”). Honourable Justices Mainville, Gagné and Rancourt of the Court of Appeal unanimously upheld the ruling rendered by the Honourable Justice Moulin of the Superior Court.
In July 2020, Justice Moulin had ruled unconstitutional the provisions in Bill 15 aimed at suspending the indexation of the pensions of retired members. He had dismissed applications to declare other provisions related to active members unconstitutional, stating that they did not substantially interfere with the freedom of association guaranteed by the Canadian Charter of Rights and Freedoms.
However, contrary to Justice Moulin, Justices Mainville and Gagné consider the measures provided by Bill 15 amount to a substantial interference with the freedom of association of active members, but that this interference is justified under Section 1 of the Canadian Charter.
This is another step in the legal challenge of Bill 15. The parties’ reactions to this ruling and their decision as to whether to appeal to the Supreme Court of Canada will be known in the coming days. The deadline for filing an appeal to the Supreme Court of Canada is within 60 days of the Court of Appeal’s judgment.
Claims in favour of the retired members remain before the Superior Court. In the event that the Court of Appeal’s ruling for these retired members is not challenged, the outcome of this aspect of the case in front of the Superior Court will be highly anticipated in terms of the retroactive scope and in terms of reinstating indexation for affected retirees.
For more information about this ruling and its repercussions on your plan, contact our specialists.