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PRIVATE PENSION PLANS - Federal v. provincial jurisdiction

Friday, January 25, 2019 @ 8:33 AM  

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Application by the Northern Inter-Tribal Health Authority Inc. (NITHA) and Peter Ballantyne Cree Nation Health Services Incorporated (PBCNHS) for judicial review of decisions by the Office of the Superintendent of Financial Institutions of Canada (OSFI) that the applicants' pension plans did not fall under federal jurisdiction and as such were to be registered provincially. PBCNHS and NITHA were non-profit corporations that had entered into Health Agreements with the federal government to provide health services and programs to members of First Nations on reserves. The applicants argued their pension plans fell under federal jurisdiction as they delivered on the federal government's obligation to provide health services to First Nation members and such health care would revert to the federal government if the applicants ceased supplying services. OSFI argued the government Health Agreements and prior jurisprudence only created funding relationships and should not be interpreted as an attempt to regulate PBCNHS's health services. OSFI stated that because PBCNHS operations were in health care and social services, and it was solely a funding relationship with Health Canada, the presumption of provincial jurisdiction over labour (pensions) was not overcome. The applicants asserted the OSFI erred in law as, on the applicable test, the applicants' activities conducted pursuant to their agreements were properly federal undertakings.

HELD: Application allowed. The definition of "included employment" in the PBSA mirrored that of "federal work, undertaking or business" used in the Canada Labour Code (CLC). As such, jurisprudence on what constituted a federal undertaking under the CLC was also applicable to the PBSA. The standard of review was correctness: the issue was a constitutional question of division of powers. At the same time, findings of fact and characterizations by the decision-maker were owed deference and were to be reviewed for reasonableness. The applicable test for determining whether a matter was a federal undertaking was the Supreme Court of Canada's judgment in NIL/TU,O. The first step was a functional test, which if inconclusive, led to a second analysis of whether provincial regulation of the entity's labour relations would impair the core of a federal power. In NIL/TU,O, Justice Abella stated federal government funding did not convert the operation into a federal activity. Application of the functional test called for an inquiry into the nature, habitual activities and daily operations of the entity in question to determine whether it constituted a federal undertaking. The decisions of OSFI suggested the decision-maker had suborned "nature" to "normal, habitual activities". This was an error in failing to have regard to an essential quality of the activity being the underlying reason for the activities. This narrowed perspective unreasonably restricted OSFI's functional test analysis. In particular, OSFI had not considered "whereas" clauses in the agreements between the applicants and the federal government that referenced Treaties 5, 6, 8, and 10, which gave context and meaning to the nature of those agreements. The Treaties and reports made it clear the federal Crown undertook to provide health services to the Indians on Indian Reserves. This undertaking was not merely the result of any recent federal spending policy. As such, the Health Agreements were made to enable the First Nations to takeover delivery of federal health services promised by treaty; that there was applicable provincial legislation was not enough to bring the applicants under provincial jurisdiction. OSFI failed to consider this essential factor concerning the federal nature of the applicants' activities in delivery of health services. The application to quash OSFI's decisions was granted. A declaration was also granted that the nature of the applicants' activities was the delivery of health services that corresponded to the federal undertaking to provide health services to the First Nations and their members on Indian reserves: they were federal undertakings within federal jurisdiction.

Northern Inter-Tribal Health Authority Inc. v. Canada (Attorney General), [2018] F.C.J. No. 1209, Federal Court, L.S. Mandamin J., November 28, 2018. Digest No. TLD-January212019009