Court rules lawsuit over N.B. public-sector pension reforms can't go ahead

A court ruling tossing out a lawsuit against public-sector pension reforms in 2014 could spell the end of the seven-year fight over the changes.

Court of Queen's Bench Chief Justice Tracey DeWare ruled last week that the legal action could not go forward because both the person suing the province and the basis for their case had changed.

The lawsuit was one of three before the courts seeking to overturn reforms advanced by Blaine Higgs when he was finance minister.

The plaintiff in a second case says he will probably now abandon his suit as well.

"There's no way we can actually go forward with my case," said retired civil servant Clifford Kennedy. "There's no need to go painstakingly to court again and basically be laughed out by opposing counsel. That's what it was."

Kennedy said his group, the Pension Coalition of New Brunswick, reluctantly acknowledged that the province had the power to change the pension law and to write into the law an exemption from legal challenges.

"Sure, they have legislative powers. We don't disagree with that. We know that. … But they legislated us out of an ability to bring forward our voice, period. That's what they did. They shut us down, period."

DeWare's ruling also said there was no evidence of violations of the Charter of Rights and Freedoms presented in the case she was ruling on.

Kennedy expects a third lawsuit, by the Professional Institute of the Public Service of Canada, the union representing federal civil servants, may be dropped too.

"Why would they now go spend millions of dollars in court knowing that there is no Charter case to be defended, according to them? According to the courts?"

PIPSC spokesperson Johanne Fillion said the union could not comment while its legal team is analyzing the DeWare ruling.

Other governments watching?

The plaintiff in the case that DeWare tossed, retired deputy minister Claire LePage, would not rule out an appeal Monday but said the legal expenses would make it difficult.

The 2014 reforms by Progressive Conservative Premier David Alward's government converted the provincial public service pension plan from a defined benefit system to a shared risk system.

Under the old system, retirees were guaranteed a fixed level benefits and if the pension fund lost money invested in financial markets, the province had to cover any shortfall.

The new system eliminated the guaranteed level of benefits, leaving them more susceptible to market downturns and a cut to pensions in a severe market crash. That has yet to happen seven years later.

Kennedy says other provincial governments and the federal government have been watching the legal challenges to the New Brunswick reforms, and the DeWare ruling will give them the green light to convert their plans to shared-risk systems as well.

DeWare's decision ends a legal challenge originally launched by retired deputy minister Guy Levesque in 2015. He argued the province was breaching its obligations to him to provide the pension system he already had.

In 2020, Levesque asked the court to let LePage replace him as the plaintiff in the suit and to add new arguments to the case based on the Charter of Rights.

The province argued that amounted to an entirely new lawsuit that could not be allowed to go forward, given a two-year limit on the filing of most lawsuits.

DeWare agreed, writing that letting the case go ahead with a new plaintiff and new arguments would be "a total perversion" of those limits and other court rules.

"The Levesque action and the proposed LePage action are not the same action," she wrote.

"Mr. Levesque no longer wishes to pursue the action and no one else can. … The action must be discontinued."

No binding contract

She said there was no binding pension contract between Levesque and the province, only a law that the legislature had the power to amend.

"Mr. Levesque's displeasure with the pension reform legislation is no different than an unhappy taxpayer following the enactment of an unfavourable budget or the recipient of social assistance whose entitlement to benefits are modified by statute."

DeWare said that the Levesque lawsuit was being funded by five locals of the Canadian Union of Public Employees and said CUPE was using the switch to LePage to "keep another iron in the fire in their attempts to to challenge the pension reform legislation."

But she added: "There are consequences in using the Court for purposes other than to advance valid actions as between clearly named parties."

CUPE New Brunswick said Monday it would not comment on the ruling.

DeWare also said in her decision that as of 2022, Levesque will have earned $129 more under the reformed shared-risk pension system than he would have under the old system, undercutting the claim that he suffered discriminatory treatment.