A‑143‑05
2006 FCA 70
Her Majesty the Queen (Appellant)
v.
Andrea Lillian Reid (Respondent)
Indexed as: Reid v. Canada (F.C.A.)
Federal Court of Appeal, Rothstein, Sharlow and Malone JJ.A.—Vancouver, January 16; Ottawa, February 15, 2006.
Public Service — “Supplementary Death Benefits” — Appeal from Federal Court’s dismissal of motion for summary dismissal of action — Respondent, widow of retired federal government employee — When retiring, late husband became “elective participant” in Supplementary Death Benefit Plan pursuant to Public Service Superannuation Act (Act) — Received retroactive salary increase when new collective agreement made after retirement but before death — Whether retroactive salary increase should be considered in determining supplementary death benefit — Amount of supplementary death benefit payable under Act, Part II determined based on whether participant dies while employed or after retirement — Act, s. 47(1)(a) applying in case of death of federal government employee while employed — Act, s. 47(1)(b) applying to “elective participant” — Definition of “salary” therein not including retroactive salary exception, not importing Part I definition unlike s. 47(1)(a) — No reason to presume Parliament intended to treat retired Canadian Armed Forces members, retired public servants similarly — Federal Court erring in interpretation of definition — Appeal allowed.
This was an appeal from a Federal Court judgment denying the appellant’s motion for summary dismissal of an action commenced by the respondent against it. The respondent is the widow of a retired federal government employee. While a federal government employee, her late husband was required to contribute to the Supplementary Death Benefit Plan. When he retired, he chose to become an “elective participant” in the Supplementary Death Benefit Plan under the Public Service Superannuation Act (Act) and continued monthly contributions to the plan. Under paragraph 47(1)(b) of the Act, this meant that the supplementary death benefit payable upon his death would be an amount equal to approximately twice his salary. The collective agreement under which the respondent’s late husband worked expired before his retirement and a new one was entered into subsequent to his retirement. By virtue of the new collective agreement, he received additional salary from the date on which the old collective agreement had expired to the date of his retirement. The pension payable under Part I of the Act was adjusted to reflect the retroactive salary increase. When her husband died, the respondent, as the designated beneficiary of the Supplementary Death Benefit Plan, received the supplementary death benefit calculated without taking into account the retroactive salary increase. The Federal Court dismissed the motion because it did not agree with the appellant’s interpretation that retroactive salary increases are not to be taken into account. The issue was whether, in computing the supplementary death benefit payable upon the death of a retired federal government employee under Part II of the Act, it is necessary to take into account a retroactive salary increase paid to the retired employee pursuant to a collective agreement made after his retirement and before his death.
Held, the appeal should be allowed.
The amount of the supplementary death benefit payable under Part II of the Act depends in part upon whether the participant dies while employed or after retirement. Under the Act, the term “salary” is defined in subsection 47(1) and contains two cross‑references. In paragraph 47(1)(a), which applies in the case of the death of a federal government employee while employed, the first cross‑reference is to “salary” for the purposes of determining the pension payable to a federal government employee under Part I of the Act. It was common ground that for the purposes of determining the pension entitlement of a retired federal government employee under Part I of the Act, a retroactive salary increase is part of “salary” because it automatically, and with retroactive effect, becomes part of an employee’s “basic pay”. However, the supplementary death benefit is determined on a different basis because of the second cross‑reference in paragraph 47(1)(a), which is to section 23 of the Supplementary Death Benefit Regulations (SBD). Section 23 prescribes in certain situations the date of the deemed receipt of a retroactive salary increase. The effect of the cross‑reference to section 23 is that in determining the amount of the supplementary death benefit payable on the death of a federal government employee who dies while employed, a retroactive salary increase is not taken into account unless the death occurs after the month in which the retroactive salary increase is approved.
Unlike paragraph 47(1)(a) of the Act, the definition of “salary” in paragraph 47(1)(b), which applies to an elective participant, does not include the retroactive salary exception. Moreover, it does not import the Part I definition of “salary” in subsection 3(1) (which refers to “basic pay”). Therefore, the respondent’s argument that the absence of the exception in paragraph 47(1)(b) means that the retroactive salary increase must be taken into account in determining the salary of the deceased spouse at the time he ceased to be a federal government employee was rejected. The key words of paragraph 47(1)(b) (“salary in the Public Service at the time he ceased to be employed in the Public Service”) describe the rate of the salary as a historical fact—the rate of the salary that the employee was actually receiving at the relevant time.
Finally, the respondent’s proposed interpretation that, when determining the supplementary death benefit, a retroactive salary increase should be taken into account was based on a comparison of the definition of “salary” in subsection 47(1) of the Act and the definition of “salary” in the Canadian Forces Superannuation Act. In the latter Act, retroactive pay increases would be included. However, despite the shared legislative history and similar subject‑matter, the two statutory definitions could not be interpreted in the same way. They are not part of the same statutory scheme so there is no reason to presume that Parliament intended similar treatment given the substantial differences in the language of the definitions.
statutes and regulations judicially
considered
Canadian Forces Superannuation Act, R.S.C., 1985, c. C‑17, s. 60(1) “salary”.
Canadian Forces Superannuation Act, S.C. 1959, c. 21.
Canadian Forces Superannuation Regulations, C.R.C., c. 396, s. 48.
Public Service Superannuation Act, R.S.C. 1970, c. P‑36, s. 2(1) “salary”.
Public Service Superannuation Act, R.S.C., 1985, c. P‑36, ss. 3(1) “salary”, 47(1) “salary”, 51.
Public Service Superannuation Act, S.C. 1952‑53, c. 47.
Supplementary Death Benefit Regulations, C.R.C., c. 1360, s. 23.
cases judicially considered
distinguished:
Gruber v. The Queen, [1975] F.C. 578; (1975), 11 N.R. 216 (C.A.); Canadian Air Traffic Control Association v. The Queen, [1985] 2 F.C. 84; (1985), 85 CLLC 14,016; 57 N.R. 351 (C.A.).
APPEAL from a Federal Court judgment ([2005] 3 F.C.R. 41; (2005), 268 C.C.P.B. 268; 268 F.T.R. 275; 2005 FC 158) denying the appellant’s motion for summary dismissal of an action against it regarding the determination of the supplementary death benefit payable to the respondent upon the death of her husband, a retired federal government employee. Appeal allowed.
appearances:
Dale L. Yurka for appellant.
Robert A. Margolis and John C. Kleefeld for respondent.
solicitors of record:
Deputy Attorney General of Canada for appellant.
Giaschi & Margolis, Vancouver, for respondent.
The following are the reasons for judgment rendered in English by
[1]Sharlow J.A.: This is an appeal from a judgment of the Federal Court denying the Crown’s motion for summary dismissal of an action commenced by the respondent Andrea Lillian Reid against the Crown: Reid v. Canada, [2005] 3 F.C.R. 41.
[2]The issue is whether, in computing the supplementary death benefit payable upon the death of a retired federal government employee under Part II of the Public Service Superannuation Act, R.S.C., 1985, c. P‑36, it is necessary to take into account a retroactive salary increase paid to the retired employee pursuant to a collective agreement made after his retirement and before his death. If the Crown is correct, the retroactive salary increase is not taken into account, and the Crown’s motion for summary dismissal should have been granted.
[3]The Federal Court Judge dismissed the motion because she did not agree with the Crown’s interpretation. I must respectfully disagree with the Judge. It is my view that, for the reasons that follow, the Crown’s interpretation is correct.
[4]Mrs. Reid is the widow of Douglas W. Reid, who was an employee of the Government of Canada from August 26, 1974, until March 31, 1998, when he retired.
[5]The collective agreement under which Mr. Reid worked at the time of his retirement had expired in 1997. A new collective agreement was entered into on December 28, 1998. By virtue of the new collective agreement, Mr. Reid was entitled to receive, and did receive, additional salary for the period from June 20, 1997, the date on which the old collective agreement expired, to March 31, 1998, the date of Mr. Reid’s retirement.
[6]The pension payable to Mr. Reid under Part I of the Public Service Superannuation Act upon his retirement was adjusted to reflect the retroactive salary increase.
[7]Mr. Reid died on December 3, 2000. Mrs. Reid, as his designated beneficiary, received a supplementary death benefit determined on the basis that Mr. Reid’s salary was $53,492. That was Mr. Reid’s annual rate of salary at the time of his retirement in 1998. The amount of the supplementary death benefit was determined without taking into account Mr. Reid’s retroactive salary increase.
[8]The entitlement of Mrs. Reid to the supplementary death benefit payable on Mr. Reid’s death is a term of the Supplementary Death Benefit Plan established by Part II of the Public Service Superannuation Act. She was his designated beneficiary under that plan.
[9]While Mr. Reid was a federal government employee, he was required to participate in the Supplementary Death Benefit Plan. As a participant, Mr. Reid was required to make contributions at the rate of 15¢ per $1,000 of the supplementary death benefit payable.
[10]The amount of the supplementary death benefit payable under Part II of the Public Service Superannuation Act depends in part upon whether the participant dies while employed, or after retirement. If Mr. Reid had died while he was an employee, the amount of the benefit would have been approximately twice Mr. Reid’s “salary”, as defined in paragraph (a) of the definition of “salary” in subsection 47(1) of the Public Service Superannuation Act. That definition reads as follows:
47. (1) . . .
“salary” means
(a) in the case of a participant employed in the Public Service, the salary as defined for purposes of Part I, expressed in terms of an annual rate, except that where a retroactive increase is authorized in the salary of that participant, the increase shall be deemed to have commenced to have been received by him on such day as the regulations prescribe.
[11]Paragraph (a) of this statutory definition contains two cross‑references. The first cross‑reference is to “salary” for the purposes of determining the pension payable to a federal government employee under Part I of the Public Service Superannuation Act. That definition of “salary” is found in subsection 3(1) [paragraph (a)] of the Public Service Superannuation Act and reads as follows:
3. (1) . . .
“salary” means
(a) . . . the basic pay received by the person in respect of whom the expression is being applied for the performance of the regular duties of a position or office exclusive of any amount received as allowances, special remuneration, payment for overtime or other compensation or as a gratuity unless that amount is deemed to be or to have been included in that person’s basic pay pursuant to any regulation made under paragraph 42(1)(e).
(The regulations made under paragraph 42(1)(e) are not relevant to this case.)
[12]It is common ground that, for the purposes of determining the pension entitlement of a retired federal government employee under Part I of the Public Service Superannuation Act, a retroactive salary increase is part of “salary” because it automatically, and with retroactive effect, becomes part of an employee’s “basic pay”. That is why Mr. Reid’s retroactive salary increase resulted in an increase in his pension.
[13]However, the supplementary death benefit is determined on a different basis. That is because of the second cross‑reference in paragraph (a) of the definition of “salary” in subsection 47(1). The second cross-reference is to section 23 of the Supplementary Death Benefit Regulations, C.R.C., c. 1360 (the SBD Regulations). That provision prescribes, in certain situations, the date of the deemed receipt of a retroactive salary increase. It reads as follows:
23. Where a retroactive increase is authorized in the salary of a participant, such increase shall be deemed to have commenced to have been received by him on the first day of the month following the month in which
(a) the Governor in Council or the Treasury Board, as the case may be, approves such increase; or
(b) written approval of such increase was duly issued by the appropriate authority in any case where approval of the Governor in Council or the Treasury Board is not required.
[14]The effect of section 23 of the SBD Regulations, as incorporated into paragraph (a) of the definition of “salary” in subsection 47(1), is that in determining the amount of the supplementary death benefit payable on the death of a federal government employee who dies while employed, a retroactive salary increase is not taken into account unless the death occurs after the month in which the retroactive salary increase is approved.
[15]For example, if Mr. Reid had died in March 1998, his death benefit would have been determined without the retroactive salary increase that was approved in December of 1998. That is because, by virtue of the exception in paragraph (a) of the definition of “salary” [in subsection 47(1)], he would have been deemed, for the purposes of Part II of the Public Service Superannuation Act, not to have received his retroactive salary increase until January 1, 1999 (the first day of the month following the month in which the retroactive salary increase was approved). It follows that, for the purposes of determining the supplementary death benefit payable to Mrs. Reid, his salary at the date of death would have been determined without the retroactive salary increase.
[16]Thus far, I have discussed only paragraph (a) of the definition of “salary” [in subsection 47(1)], which applies in the case of the death of a federal government employee while employed. That part of the definition does not apply in this case because Mr. Reid did not die while he was a federal government employee.
[17]Mr. Reid retired in 1998. Upon his retirement he chose to become an “elective participant” in the Supplementary Death Benefit Plan, as was his right under section 51 [as am. by S.C. 1996, c. 18, s. 36] of the Public Service Superannuation Act. If he had chosen not to make that election, he would have made no further contributions and upon his death, his designated beneficiary would have been entitled to a payment of at least $10,000.
[18]As an elective participant, Mr. Reid was obliged to continue making monthly contributions to the supplementary death benefit plan. As long as Mr. Reid continued to make the required contributions, the supplementary death benefit payable upon his death would be an amount equal to approximately twice his salary, as determined in accordance with paragraph (b) of the definition of “salary” in subsection 47(1) of the Public Service Superannuation Act. As it is necessary to compare paragraphs (a) and (b), I will quote them both:
47. (1) . . .
“salary” means
(a) in the case of a participant employed in the Public Service, the salary as defined for purposes of Part I, expressed in terms of an annual rate, except that where a retroactive increase is authorized in the salary of that participant, the increase shall be deemed to have commenced to have been received by him on such day as the regulations prescribe,
(b) in the case of an elective participant, his salary in the Public Service at the time he ceased to be employed in the Public Service, expressed in terms of an annual rate.
[19]The retroactive salary exception that appears in paragraph (a) of the definition of “salary” does not appear in paragraph (b). It is argued for Mrs. Reid that the absence of the exception in paragraph (b) means that in Mrs. Reid’s case, the retroactive salary increase must be taken into account in determining the salary of Mr. Reid at the time he ceased to be a federal government employee. The argument in essence is that the words of paragraph (a) preceding the retroactive salary exception should be interpreted to mean the same thing as the words of paragraph (b).
[20]The difficulty with the argument made for Mrs. Reid, is that the words of paragraphs (a) and (b) are quite different. One difference is the absence from paragraph (b) of the retroactive salary exception that appears in (a). The other is that paragraph (b), unlike paragraph (a), does not import the Part I definition of “salary” [in subsection 3(1)] (which, it will be recalled, refers to “basic pay”, a phrase that is agreed to include retroactive salary increases).
[21]It seems to me that the ordinary meaning of the key words of paragraph (b) (“salary in the Public Service at the time he ceased to be employed in the Public Service”) describes the rate of salary as a historical fact—the rate of the salary that the employee was actually receiving at the relevant time. If paragraph (b) were intended to refer to salary with retroactive salary increases included, it could have used the same words as paragraph (a) (that is, importing the Part I definition), or it could have referred to the annual rate of salary as of a particular time, or effective at a particular time, rather than the annual rate of salary at a particular time.
[22]It is argued for Mrs. Reid that the jurisprudence and certain aspects of the legislative history supports the conclusion that the ordinary meaning of the words of paragraph (b) should not prevail. Her counsel cites two decisions of this Court: Gruber v. The Queen, [1975] F.C. 578 (C.A.), and Canadian Air Traffic Control Association v. The Queen, [1985] 2 F.C. 84 (C.A.). I am unable to derive much assistance from either case.
[23]The issue in Gruber was whether certain payments were required to be included in the “salary” of a federal government employee for the purpose of determining the amount of the pension payable to him under Part I of the Public Service Superannuation Act, R.S.C. 1970, c. P‑36. At the relevant time, the definition of “salary” [in subsection 2(1)] (for purposes of Part I) read as follows:
2. (1) . . .
“salary” . . . means the compensation received by the person in respect of whom the expression is being applied for the performance of the regular duties of a position or office . . . .
[24]The employee retired in 1972. He was entitled to a pension based on his average salary for any six-year period of his employment that he chose. He chose the period 1966 to 1972. In 1970, he had received payments totalling approximately $3,600 pursuant to a collective agreement made in November of 1969. The collective agreement established rates of pay as of July 1, 1969, and also provided for a “settlement bonus” of 7% of regular pay for the period from July 1, 1967 to June 30, 1968, a “settlement bonus” of 14.49% of regular pay for the period from July 1, 1968 to June 30, 1969, and a “lump sum” of 2.75% of the rate of pay as of July 1, 1969.
[25]The issue was whether the settlement bonuses and the lump sum were part of his “salary”, as defined in the definition quoted above. Jackett C.J., writing for this Court, held that they were, because they were remuneration for services performed. In my view, Gruber is not helpful in resolving the issue in this case because the Court was not required, in Gruber, to address the determination of the annual rate of salary as of any particular point in time, or to attribute the $3,600 payments to the salary for 1970 or for one of the three preceding years.
[26]The issue in the Air Traffic Control case related to a collective bargaining agreement between the Treasury Board and the Canadian Air Traffic Controllers Association that was made on May 28, 1982. The previous collective agreement had expired on December 31, 1980. The 1982 agreement provided for an increased rate of pay, to take effect on January 5, 1981. It was undisputed that the members of the bargaining unit who were employees on May 28, 1982, were entitled to a retroactive pay increase. However, the Treasury Board took the position that 11 members of the bargaining unit who ceased to be employees after 1980 and before May 28, 1982 were not entitled to the retroactive salary increase. The Association brought a grievance to the Public Service Staff Relations Board, without success, and then applied to this Court for judicial review of the Board’s decision.
[27]This Court held that the 11 individuals were entitled to the retroactive pay increase. Heald J.A. (Ryan J. A. concurring), held that the new collective agreement was entered into on behalf of all employees who were members of the bargaining unit at the time of the commencement of bargaining, which occurred before the expiry of the old agreement. It followed, in his view, that the 11 members were entitled to the benefit of all of the terms of the new agreement, including the term that established January 5, 1981 as the effective date of the increased rate of pay. Marceau J.A. reached the same conclusion, for a different reason. His analysis was that under the scheme applicable to public service employees, there could only be one rate of pay for any particular position at any one time. Once the new collective agreement established a new rate of pay effective January 5, 1981, that was automatically the rate of pay for all members of the bargaining unit who were employees on that date. Air Traffic Control is not directed at the particular problem of statutory interpretation that arises in this case.
[28]The interpretation proposed on behalf of Mrs. Reid also relies on the legislative history of the relevant provisions, and in particular on the basis of a comparison between the definition of “salary” in subsection 47(1) of the Public Service Superannuation Act, and the definition of “salary” in similar legislation relating to members of the Canadian Armed Forces, the Canadian Forces Superannuation Act, R.S.C., 1985, c. C‑17.
[29]The original version of the Public Service Superannuation Act [S.C. 1952-53, c. 47] applied to federal government employees and members of the Canadian Armed Forces. The provisions relating to members of the Canadian Armed Forces were moved to the Canadian Forces Superannuation Act in 1959 (S.C. 1959, c. 21). For the purposes of determining the supplementary death benefit payable to a member or former member of the Canadian Armed Forces, the word “salary” is defined in subsection 60(1) of the Canadian Forces Superannuation Act and reads as follows (my emphasis):
60. (1) . . .
“salary” means
(a) in the case of a participant who is a member of the regular force . . ., the greater of
(i) the pay of that participant, expressed in terms of an annual rate; and
. . .
(b) in the case of an elective participant, the greater of
(i) the pay of that participant at the time he ceased to be a member of the regular force, expressed in terms of an annual rate; and
. . .
except that where a retroactive increase is authorized in the pay of that participant, the increase shall be deemed to have commenced to have been received by him on such day as the regulations prescribe.
(The regulation referred to in the exception clause at the end of this definition is section 48 of the Canadian Forces Superannuation Regulations, C.R.C., c. 396, s. 48. The prescribed date is the first day of the month in which the retroactive increase is approved. The prescribed date under the SBD Regulations is the first day of the month following the approval.)
[30]There is no dispute as to the meaning of the definition [of “salary”] in subsection 60(1) of the Canadian Forces Superannuation Act. It is agreed that the underlined words in this definition would include any retroactive pay increases, because the “pay” of a member of the Canadian Armed Forces is understood to include retroactive increases. The exception at the end of the definition serves the same limiting function as the exception in paragraph (a) of the definition in subsection 47(1) of the Public Service Superannuation Act, except that in the case of members of the Canadian Armed Forces, both serving members and retired members are subject to the exception.
[31]It is argued for Mrs. Reid that there is no explanation for a difference in treatment between retired members of the Canadian Armed Forces who are elective participants in their Supplementary Death Benefit Plan, and similarly situated retired federal government employees. It is true that, under the Crown’s interpretation, the difference in treatment between elective participants under the Public Service Superannuation Act and elective participants under the Canadian Forces Superannuation Act appears to be arbitrary. Certainly the record contains no explanation for the difference in treatment.
[32]At the same time, however, the two statutory definitions are not part of the same statutory scheme, despite the similarity of subject-matter and the shared history, so there is no reason to presume that Parliament intended similar treatment. On the contrary, given the substantial differences in the language, the presumption must be the contrary.
[33]I would add that the interpretation proposed on behalf of Mrs. Reid results in an equally arbitrary result. The result would be that the determination of the supplementary death benefit payable under Part II of the Public Service Superannuation Act must take into account a retroactive salary increase in the case of a retired employee who elects to remain a participant, but must not take into account a retroactive salary increase in the case of an employee who dies while employed and before the retroactive increase is approved.
[34]I would allow this appeal, grant the Crown’s motion for summary dismissal, and dismiss Mrs. Reid’s claim. As the Crown has not asked for costs, none should be awarded.
Rothstein J.A.: I agree.
Malone J.A.: I agree.