Air Canada pilots organized informational pickets across the country in October 2023 in a bid to make their voices heard. Photo: Terri Trembath/CBC
A few recent decisions have tackled the question of age limits on certain financial benefits such as long-term disability (LTD) and supplementary death benefits (SDB) and found age differentiation with respect to disability and death benefits legal.
LTD exists to provide a source of income to eligible employees who become disabled and are unable to work due to a medical condition. In the federal public service, this plan is referred to as the disability insurance plan. For those who are eligible, disability insurance is a monthly taxable benefit equal to
70 per cent of an individual’s salary. The benefits are reduced by other sources of income, such as CPP or QPP disability benefits, benefits received under the Public Service Superannuation Act (PSSA) or disability benefits paid under another group insurance plan, to name a few.
If an individual continues to meet eligibility requirements, disability insurance will last until age 65. At that time, their income will instead be the sum of their retirement pension, Old Age Security and the Canada Pension Plan, which together is still usually a significant reduction in income.
Meanwhile, as part of the PSSA, the SDB was created to provide a type of decreasing term life insurance. It is a one-time, tax-free, lump-sum payment payable to one or more beneficiaries
at the time of a plan participant’s death. The amount is equal to twice the participant’s annual salary, though at age 66, the coverage decreases by 10 per cent each year until it reaches a minimum of $10,000 by age 75. The Canadian Armed Forces Superannuation Act (CAFSA) has a similar provision, which is two times the annual pay at release until age 61, at which point the benefit reduces by 10 per cent of the original amount each year until age 70 or it reaches the minimum of $5,000. The RCMP has a separate life insurance plan.
Some believe that these age limits are against section 15 of the Canadian Charter of Rights and Freedoms, which prevents discrimination based on age. This was the argument from representatives of Unifor in Rayonier vs. Unifor, Locals 256 and 89, a 2022 decision. The union alleged that the employer violated both the collective agreement and the Charter by discriminating against employees based on age with respect to provisions on LTD.
The Human Rights Code (in Ontario where the arbitration took place) protects the right to equal treatment with respect to employment, without discrimination based on age. However, that right is not infringed upon by a benefit plan that specifically permits age differentiation with respect to disability plans. The union argued that this offends section 15 of the Charter. The arbitrator found that the age-65 cut-off for LTD limitation was justifiable and reasonable based on section 1 of the Charter, which states that Charter Rights can be limited so long as they are shown to be reasonable in a free and democratic society.
In February 2023, the Federal Court ruled on a case that involved Air Canada pilots who were not eligible for LTD as they were over the age of 60 and eligible for an unreduced pension or had reached the age of 65. The union argued that regulatory exemptions by the Canadian Human Rights Commission (CHRC) based on age went against section 15 of the Charter. The judge said the goal of the CHRC in creating the exception was to recognize that “some differentiation with respect to age […] is not always undesirable in such plans” and noted the “normal pensionable age” distinction was made in good faith, “it is not targeting groups for illegitimate reasons outside of the overall scheme.”