Top court rejects age discrimination case

OTTAWA – The Supreme Court of Canada has dismissed the appeal of two widows in an age discrimination case that could have cost the federal treasury more than $2.6 billion.

Hazel Withler and Jean Fitzsimonds challenged federal government policy that gradually reduces death benefits for surviving spouses of public servants and military members, based on the age of the deceased.

The high court was unanimous in its rejection and said that public servants are on average better equipped than most Canadians to meet the financial challenges of old age.

The justices ruled it wasn’t a case of discrimination.

"This benefit is akin to life insurance," wrote Chief Justice Beverley McLachlin and Madam Justice Rosalie Silberman Abella. "This benefit is not intended to be a long-term benefit income stream for the spouses of older plan members."

The decision upholds two lower-court rulings, which rejected the claim.

Lawyers for the two women, both from Vancouver Island, argued before the Supreme Court last year that the policy violates the equality guarantees in the Charter of Rights to reduce lump-sum benefits for survivors of older spouses.

Withler and Fitzsimonds were the lead plaintiffs in two class-action lawsuits, one representing federal public servants, the other ex-members of the military.

The ruling affects roughly 5,000 survivors. The federal government pays out approximately $138 million annually in survivor death benefits.

The benefit is paid over and above a survivors’ pension. It is intended to help spouses through immediate financial hard times following the death of a loved one.

The Public Service Superannuation Act reduces the payout by 10 per cent for each year the participant lives after age 65. The Canadian Forces Superannuation Act starts reducing benefits after 60.

Federal lawyers argued that younger survivors need more money because they are less likely to receive a full survivors’ pension.

The Women’s Legal Education and Action Fund intervened on behalf of the two women and argued the reductions constituted discrimination because most of the affected spouses were elderly women, who are "less economically secure" and who have throughout their lifetime "experienced systemic labour market discrimination, including pay inequity."

Lawyer Daphne Gilbert argued that women "at all ages" require transitional funding.

But the High Court noted that survivors had pensions and benefits.

"Any reduction in the supplementary death benefit paid to the spouses of older employees is therefore offset to some degree by the surviving spouse’s survivor’s pension," the court ruled.

"When the supplementary death benefit is considered in the context of the other pensions and benefits, to which the surviving spouses are entitled, therefore, it is clear that its purpose corresponds (albeit sometimes imperfectly) to claimants’ needs."