Anyone who is unfamiliar with Québec's current events
and public debates might be puzzled by the sight of police officers
wearing funky cargo pants and by fire trucks and subway cars
covered with red stickers.
No, these are not part of some kind of celebration or
The province is currently living through what some would call a
budgetary crisis. At stake lies the $3.9 billion ($2.2 billion
according to the unions) deficit of Québec municipal
employees' pension plans.
Throughout Canada, municipal employees' collective
agreements are bargained with the municipalities. Some
believe there has been an imbalance of power between municipalities
and unions (for instance, subject to exception for essential
services, employees have the right to strike while municipalities
cannot impose lockouts). This may partly explain municipal
employees' higher wages and numerous benefits compared to
provincial public service employees.
At issue is the contribution limit for municipal employees'
pension plans. As a result of many years of collective bargaining,
the amount related to the service and stabilization contribution by
the employees must currently not exceed 18% of the overall payroll
of the plan's active members (or 20% in the case of
firefighters and police officers).
Over the years, it has been increasingly difficult for
municipalities to pay their contribution, and most of the 170
pension plans, currently covering over 120,000 active members and
50,000 retirees, started to generate a deficit that is now
considered to be out of control by the provincial government.
Bill 3 provides that municipal defined benefit pension plans
must be restructured with a view to improving their financial
health. It imposes several amendments to the 170 pension plans, the
most significant requiring the plans to provide that current
service contribution is to be shared equally (50%-50%) between the
municipality and the active members, as well as the establishment
of a stabilization fund.
Effectively, the government, by legislative intervention, is
interfering with collective agreements bargained in good faith
between unions and municipalities.
There is no doubt that provincial legislatures have a lot of
leeway in imposing compensation and benefits packages to public
sector employees. Examples include using back-to-work legislation,
binding arbitration, and imposing new contracts. But whatever the
means used by the government to push the reform, it seems the
constitutional right to bargain collectively as recognized by the
Supreme Court of Canada (the "Supreme Court") is clearly
at stake here.
In BC Health Services and Support – Facilities
Subsector Bargaining Assn. v. British Columbia, 2007 SCC
27, ("BC Health Services")the Supreme Court,
reversing its earlier jurisprudence, recognized the right to
collective bargaining as a fundamental right derived from the
freedom of association (section 2(d) of the Canadian Charter of
rights and Freedoms). On that occasion, the Supreme Court
struck down a statute from British Columbia which retroactively
canceled certain provisions of collective agreements in the health
sector and curtailed the bargaining on specific matters for the
To reach this conclusion, the Supreme Court considered the
importance of the affected individuals, as well as the substantial
interference with collective bargaining imposed by the legislative
intervention. In Ontario (Attorney General) v. Fraser, 2011 SCC
20, a subsequent decision on the situation of farm workers in
Ontario, the Supreme Court, despite creating some confusion,
reaffirmed the conclusion in BC Health Services.
Based on the foregoing, one can expect that the unions in Quebec
will most certainly challenge the constitutional validity of Bill 3
as being an encroachment on the right of collective bargaining.
We therefore are probably off to lengthy social and legal
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