The Supreme Court has handeddown a landmark ruling that invalidates Quebec's ban on private health insurance and delivers a caustic critique of theshortcomings of Canada's publichealth system.The Court ruled in a narrow 4 to 3decision that it is unconstitutionalto ban private insurance when thepublic system fails to provide rea-sonable services. The ruling isseen as a warning to governmentsnot to let waiting lists get out ofhand. Even though the ruling has adirect application only in Quebec,there is widespread agreementthat it will lead to similar cases inother provinces, and increase thealready strong tendencies towarda two-tier health system.

The case involved Quebec physi-cian Jacques Chaoulli and hispatient George Zeliotis. Zeliotissaid his year-long wait for a hipreplacement in 1997 violated hisright to life, liberty and security.

While I agree with the majorityopinion of the justices, that government bans on private-health insurance endanger thehealth, psychological well beingand life of Canadians, the court rul-ing is troubling and profoundlywrong because no health care system - even one with a privatecomponent - can guarantee that100 per cent of patients willreceive speedy access to care 100per cent of the time, with never asingle, unreasonable wait.

Moreover, let's accept that somepeople today face long waits thatendanger their health. What will

happen, in the future, toCanadians who are too poor toafford private health insurance?Will they be served well by a pub-lic system robbed of talent andstarved of cash - if such a systemdevelops? Will their health, theirpsychological well-being, their verylives be jeopardized by themedicare system of the future?The Prime Minister has downplayed the court's decision by say-ing that, "We are not going to havea two-tiered health care system inthis country." Brave words, shorton how he will stop this from hap-pening. The Prime Minister mustbe aware of the legitimate con-cerns that the Quebec ruling willbe repeated elsewhere in Canada.It is imperative that the federalgovernment and the other nineprovinces begin immediately tomap out a plan of action that willprevent this from taking place.Let's be clear, the Supreme Courtidentified problems in themedicare system that stand as astinging rebuke to the federal andprovincial governments in thiscountry. The court bluntly statedthat the health care system has notdelivered what it said it woulddeliver and, as a consequence,lives are being lost and threatenedby unreasonable waiting times. Sowhat will the Prime Minister andthe provincial leaders do? At thevery least, governments shouldconsider invoking the constitution'snotwithstanding clause. Thatwould give them five years to workwith the existing system to improveit and make it better able to withstand the challenge from pri-

vatelydelivered health care. Having saidthis, let's admit that the notwith-standing clause isn't a popularoption.

The best approach would be forgovernments to respond to thecourt ruling by continuing theirefforts to improve public healthcare. But massive funding increas-es cannot be the only option. Afterall, health care spending inCanada from both public and pri-vate sources has increased fromjust under $90 billion in 1999 to$130 billion in 2004, a rise of about45 per cent in just 5 years. Eventhat has not produced paradise.

As governments take up the chal-lenge, they might look for guidanceto European countries, such asBritain, that already have a mix ofpublic and private health care. Itmay be that future court decisions,bolstered by charter of rights argu-ments, allow an unprecedentedlevel of private health care optionsin this country. If that happens,how can the federal and provincialgovernments best regulate andmanage the provision of healthcare in order to protect the publicsystem?Over the past four decades, publichealth care has become a pillar ofthe modern Canadian state. It sup-ports a quality of life and standardsof equality that are envied the

JULY 2005

Supreme Court Decision

Supreme Court, continued on reverse

A 4-3 ruling that it is unconstitutional to ban private insuranceIN THIS ISSUE...

Supreme CourtLandmark Ruling- Unconstitutional toban private insurancewhen the public system fails to pro-vide reasonable serv-ices

MandatoryRetirement- The end is near

Disclaimer: The comments contained herein represent the opinions of the author and should in no way be construed as being official or unofficial policy of RWAM

Insurance Administrators Inc. If legal or other expert assistance is required, the services of a competent professional should be sought.

RWAM Insurance Administrators Inc.49 Industrial Dr., Elmira, ON N3B 3B1 519-669-1632 1-877-888-RWAM (7926) www.rwam.com

JULY 2005

Mandatory Retirement - the end is nearOn June 7th, 2005, the provincial govern-ment of Ontario introduced Bill 211, theEnding Mandatory Retirement StatuteLaw. If Bill 211 is passed, the use ofmandatory retirement policies will nolonger be lawful in most Ontario work-places. The key element of the proposedlegislation is the revision of the definitionof 'age' in the Human Rights Code. TheBill also removes the requirement forretirement at age 65 in several statutes,including the Public Service Act.The ban against mandatory retirement isnot new. It has existed, in various forms, inthe United States for over 25years. Mandatory retirementhas been prohibited in theprovince of Quebec for almostthat long. Currently, it is notpermitted in most Canadianjurisdictions, with the notableexceptions of Ontario andCanada itself.Interestingly, the Supreme Court ofCanada has held that mandatory retire-ment is constitutional and that legislaturescannot be faulted for failing to ban thepractice. Mandatory retirement is justified,according to the Court, because it pro-vides younger citizens with greater accessto work and it allows employers andemployees the freedom to negotiateemployment contracts. The Court alsoaccepted that older workers are generallyless productive. Other arguments infavour of mandatory retirement were theexistence of pension plans providingincome after retirement and the supportgiven to the practice by unions.Our courts interpret human rights legisla-tion generously, in favour of affected indi-viduals. Ambiguities in legislation arealmost always resolved against employ-ers. The legislation does allow for manda-tory retirement where age is a reasonable,bona fide requirement of employment(BFOR). Examples of this include firefight-ers, police and pilots. It is for the employ-er to demonstrate that age is such arequirement.The amendments to the legislation willcome into force one year after Bill 211receives Royal Assent (i.e. June 2006 at

the earliest). Nevertheless, employers willwant to turn their minds to any impact thischange will have on their employees, theirpension and benefit plans and their work-place policies.The Bill will not amend the PensionBenefits Act. Therefore, employees willstill have the right to retire with a full un-reduced pension on the 'normal retire-ment date'. This is defined in the PBA asno later than one year after employeesturn 65. Revisions to the Human RightsCode are not expected to have significantimplications for pension plans. Current

pension legislation requiresthat plan members whoremain employed after age65 must be permitted tocontinue to participate in thepension plan. Therefore, theremoval of the age 65 limiton age discrimination maysimply mean that there are

more active plan members over age 65. On the other hand, the Income Tax Act(Canada) prevents a member of a pensionplan, RRSP, RRIF, etc., from deferringreceipt of retirement income from theseplans beyond the end of the year in whichthe member attains age 69.Consequently, absent legislative change,those who continue to be employed pastage 69 will collect both a salary and pension at the same time; however, fur-ther pension accrual would stop when pay-ments under the pension plan begin.Over the coming months, employers willwant to review the provisions of pensionplans which are related to age 65 - forexample, provisions that do not allowemployees hired on or after age 65 toenrol in a pension plan - to determine theimpact of Bill 211.It will also be necessary to consider theimpact of the Bill on insured benefit plans,including long term disability plans (whichtypically cease benefit payments at age65), life insurance and prescription drugbenefits. In some cases these changesmay result in employees receiving bene-fits beyond age 65, with a correspondingcost increase to employers.The government has indicated that it will

not be amending the 'Benefit Plans' regulations under the ESA (which on avery specific and limited basis permit dif-ferential treatment of employees in certaintypes of benefit plans on the basis of age,sex and marital status). However, theseregulations will not assist employers withcontaining their benefits costs or defend-ing existing practices that cease or limitbenefits coverage beyond age 65.Bill 211 would amend the WorkplaceSafety and Insurance Act to exempt itsage-based provisions from the HumanRights Code. Thus, for example, employ-ees who are injured after age 63 will con-tinue to be eligible to receive Loss ofEarnings benefits for a two-year periodonly, while employees who are injuredbefore age 63 will continue to be eligible forLoss of Earnings benefits to age 65 only. While Bill 211 may appear to represent asignificant departure from establishedemployment practices, the reality is thatmandatory retirement has been underattack for several years. Moreover, manycommentators predict that the eliminationof mandatory retirement will not lead to asignificant increase in the number ofemployees working past age 65.Nevertheless, employers are well advisedto review current management practicesto ensure they are not leaving themselvesexposed to liability. As a result, a reviewwith your professional advisor would beprudent. Source: Hicks Morley Hamilton Stewart Storie LLP

world over. It upholds, as well, our sense ofwho we are as a people. The edifice of pub-lic health care, painstakingly built by gener-ations of Canadians, is by no means free offlaws. But it is, nonetheless, a magnificentcreation that has delivered life-enhancing,life-saving care across the board, to the rich,to the middle class but also to the millions ofpoor who would not otherwise have hadaccess to quality medical care. It is this pub-lic system that Canadians must rally aroundnow. Not because it's perfect, but becauseour failure to do so is a failure to understandthat a two-tiered system caters only to thosewho are healthy.Until next time…

Supreme Court, continued from reverse

Employers will want toturn their minds to anyimpact this change willhave on their employ-ees, their pension andbenefit plans and theirworkplace policies.