New Brunswick judge allows province to proceed with converting five deficit-laden pension plans to shared-risk, despite union challenge
November 15, 2024
A New Brunswick judge has given the provincial government the green light to begin converting five defined-benefit pension plans to shared-risk plans after denying a union request for an interlocutory injunction that would have halted the process until a constitutional challenge on the matter is decided.
The five plans — whose members include bus drivers, custodians, trade workers, school support staff and nursing home workers — have substantial deficits and were omitted from the initial wave of public sector pension plan conversions beginning in 2014 because they were created as a result of collective bargaining, rather than by statute.
However, the government passed Bill 17 in 2023 authorizing the transfer of the five plans to shared-risk plans.
Unions representing members of three of the affected pension plans launched a constitutional challenge alleging that this law breaches s. 2(d) of the Canadian Charter of Rights and Freedoms, protecting the right to freedom of association, and asked a judge to impose an interlocutory injunction to prevent the government from initiating steps to transfer the plans. Applying the three-step test for an injunction, Court of King’s Bench Justice Ivan Robichaud wrote that he was satisfied with the first two requirements: that there was a serious question to be tried and that its members could suffer irreparable harm if the injunction were denied.
However, the unions’ case fell at the final hurdle, as the judge concluded that the balance of convenience “weighs heavily” against granting an injunction in this case. The evidence suggested that the deficits of each plan would likely continue to rise if the injunction was successful, with taxpayers potentially on the hook for the shortfall to pensioners, he wrote.
“The Plaintiffs have not shown a public interest that could overcome the presumption of constitutional validity and the presumption of public interest in duly adopted legislation,” the judge added.
To read the judge’s decision, click on more information below:
