Former Ontario government employees involved in the administration of the former retail sales tax who became federal public servants with the advent of the harmonized sales tax won’t be able to collect their provincial pensions, the Divisional Court has determined.
Ruling in Ontario Pension Board v. Ratansi on March 1, the court reversed a decision of the Financial Services Tribunal that allowed the employees to immediately receive unreduced pensions from the provincial public service pension plan. They could do so even as they continued working for the federal government as a result of the switch from one tax to another a couple of years ago.
From the public’s perspective, it was a ridiculous situation. The employees didn’t lose their jobs, so why should they be able to collect a provincial pension while receiving a federal salary? It’s little wonder our public finances are in such trouble when the law supposedly allows such double dipping.
Of course, the law doesn’t actually allow that, as the Divisional Court found. The ruling centred on the interpretation of s. 80 of the Pension Benefits Act that deals with employee transfers from one employer to another. According to s. 80(3), “Where a transaction described in subsection (1) takes place, the employment of the employee shall be deemed, for the purposes of this act, not to be terminated by reason of the transaction.” The tribunal found the provision applies only to employment and not pension plan membership, meaning that as the move to the federal government meant the employees were no longer mandatory members of the provincial plan, they could now apply for their Ontario pensions.
The Divisional Court, however, found the tribunal’s interpretation was “not a reasonable one, largely because of its error in interpreting s. 80(3) too narrowly.” As the court noted, “the language ‘for the purposes of the act’ in s. 80(3) of the [Pension Benefits Act] makes it clear that an employee’s deemed continuation of employment is effective for purposes of pension benefits and not, for example, vis-a-vis the Human Rights Code, the Employment Standards Act or some other statute. That is, the phrase is meant to clarify the scope of the deeming provisions, not restrict it.”
Thank goodness for such logic. It would have obviously been unfair for the situation as held by the tribunal to continue. There’s no room for double-dipping pensioners in the current fiscal environment.
— Glenn Kauth
Ruling in Ontario Pension Board v. Ratansi on March 1, the court reversed a decision of the Financial Services Tribunal that allowed the employees to immediately receive unreduced pensions from the provincial public service pension plan. They could do so even as they continued working for the federal government as a result of the switch from one tax to another a couple of years ago.
From the public’s perspective, it was a ridiculous situation. The employees didn’t lose their jobs, so why should they be able to collect a provincial pension while receiving a federal salary? It’s little wonder our public finances are in such trouble when the law supposedly allows such double dipping.
Of course, the law doesn’t actually allow that, as the Divisional Court found. The ruling centred on the interpretation of s. 80 of the Pension Benefits Act that deals with employee transfers from one employer to another. According to s. 80(3), “Where a transaction described in subsection (1) takes place, the employment of the employee shall be deemed, for the purposes of this act, not to be terminated by reason of the transaction.” The tribunal found the provision applies only to employment and not pension plan membership, meaning that as the move to the federal government meant the employees were no longer mandatory members of the provincial plan, they could now apply for their Ontario pensions.
The Divisional Court, however, found the tribunal’s interpretation was “not a reasonable one, largely because of its error in interpreting s. 80(3) too narrowly.” As the court noted, “the language ‘for the purposes of the act’ in s. 80(3) of the [Pension Benefits Act] makes it clear that an employee’s deemed continuation of employment is effective for purposes of pension benefits and not, for example, vis-a-vis the Human Rights Code, the Employment Standards Act or some other statute. That is, the phrase is meant to clarify the scope of the deeming provisions, not restrict it.”
Thank goodness for such logic. It would have obviously been unfair for the situation as held by the tribunal to continue. There’s no room for double-dipping pensioners in the current fiscal environment.
— Glenn Kauth
For more, see "Tribunal allows transferred CRA workers to receive Ontario pension."
