COURT OF APPEAL FOR ONTARIO
FELDMAN, MACPHERSON and BLAIR JJ.A.
B E T W E E N :
TORONTO TRANSIT COMMISSION
Christopher G. Riggs, Q.C. for the appellant
Applicant (Appellant)
- and -
AMALGAMATED TRANSIT UNION, LOCAL 113
Heather A. Alden and David A. Wright
for the respondent
Respondent (Respondent)
Heard: September 8, 2006
On appeal from the order of the Superior Court of Justice (Divisional Court) (Associate Chief Justice J. Douglas Cunningham, Justice Sandra Chapnik and Justice Gloria J. Epstein) dated February 14, 2006, with reasons reported at [2006] O.J. No. 583.
MACPHERSON J.A.:
A. OVERVIEW
1Five appeals from decisions of the Divisional Court were grouped together and argued on September 8, 2006. The lead appeal is LaPointe‑Fisher Nursing Home v. United Food & Commercial Workers International Union, Local 175/633 (“LaPointe”), with reasons for judgment being released concurrently with these reasons.
2This is the third of the appeals. It relates to a decision of the Divisional Court dated February 14, 2006 upholding an arbitral award by Arbitrator Daniel Harris dated March 17, 2005.
3In my view, the decision of the Divisional Court should be affirmed.
B. FACTS
(1) The parties and the events
4The Toronto Transit Commission and the Amalgamated Transit Union, Local 113 are parties to a collective agreement. Section 17 of the collective agreement, and its predecessors, has been in the collective agreement since 1972. It provides:
Section 17. Health Services
The Commission agrees to pay on behalf of
– all regular employers on the first of the month following completion of six months’ continuous service
– temporary employees on acquiring 12 months of cumulative service
100% of total contributions required for the following coverages:
(a) Ontario Health Insurance Plan (O.H.I.P.). . . .
5Pursuant to this provision, until December 31, 1989 the employer paid OHIP premiums on behalf of its employees. Effective January 1, 1990, the employer ceased to pay OHIP premiums; instead, it paid a payroll tax pursuant to the Employer Health Tax Act, 1989, S.O. 1989, c. 76 [now R.S.O. 1990, c. E.11].
6This picture changed in 2004 with the enactment of the Budget Measures Act, 2004 (No. 2), S.O. 2004, c. 29 (“Bill 106”), which amended the Ontario Income Tax Act, R.S.O. 1990, c. I.2 (the “ITA”), by adding a new s. 2.2(1):
2.2(1) Every individual shall pay a tax, called the Ontario Health Premium, for a taxation year ending after December 31, 2003 if the individual is resident in Ontario on the last day of the taxation year.
7After the new s. 2.2(1) of the ITA was enacted in 2004, the employer refused to reimburse its employees for the Ontario Health Premium (“OHP”). The union filed a grievance.
(2) The litigation
(a) The arbitral award
8Arbitrator Daniel Harris heard the case simply on the basis of submissions.
9He referred to other arbitral decisions, going both ways, relating to the obligation of employers to reimburse their employees for the OHP. He observed that “one unifying thread in both lines of cases is that liability falls to be determined on the basis of the language of the collective agreement chosen by the parties to express their intention.”
10The arbitrator carefully reviewed the language of the collective agreement, Bill 106 and previous health revenue statutes, the positions of the parties and several arbitral awards relating to similar collective agreements: He concluded:
The union took the position that Section 17 is broad enough in its terms to capture the Ontario Health Premium whether it is a “premium” or a “tax”. I agree. The language of section 17 does not raise the same distinction between premiums and taxes that so engaged arbitrator Samuels in Walker Exhausts. Rather, section 17 embodies the Commission’s agreement to pay “100% of the total contributions.” Arbitrator Goodfellow found that a promise to pay “100% of the present and future cost” was broad enough to cover either a premium or a tax. The term “contribution” is at least equally as broad and captures amounts owing by way of premium or tax.
(b) The Divisional Court Decision
11The employer applied for judicial review of the arbitrator’s award.
12The Divisional Court applied the recent decision of this court in Lakeport Beverages v. Teamsters Local Union 938 (2005), 2005 29339 (ON CA), 77 O.R. (3d) 543 (“Lakeport”), and held that the standard of review of the arbitrator’s award was patent unreasonableness.
13Writing for the court, Epstein J. reached this conclusion:
In his careful reasons Arbitrator Harris examined the wording of the [collective bargaining agreement] against the backdrop of legislative change and concluded that Section 17 is “broad enough in its terms to capture the Ontario Health Premium whether it is a “premium” or a “tax”. Specifically, the word “contribution” captures amounts owing by way of premium or tax. While we may not have reached this conclusion, we cannot say that it is patently unreasonable.
14The employer was granted leave to appeal the Divisional Court’s decision to this court.
C. ISSUES
15There are two issues on this appeal:
Did the Divisional Court err by applying the wrong standard of review?
Did the Divisional Court err by not quashing the arbitrator’s award based on his misinterpretation of the collective agreement, Bill 106 and the Health Insurance Act, R.S.O. 1990, c. H. 6?
D. ANALYSIS
(1) Standard of review
16The appellant’s argument – namely, that the standard of review of the arbitrator’s award should be correctness because the arbitrator was required to interpret external statutes of general application – is identical to the one advanced in LaPointe. The analysis in LaPointe requires that the appellant’s argument in this appeal must also fail.
(2) The merits of the arbitrator’s award
17The appellant contends that the arbitrator made crucial errors in his interpretation of the collective agreement, Bill 106 and the Health Insurance Act (“HIA”) that render his award patently unreasonable.
18The appellant asserts that the arbitrator and the Divisional Court failed to pay sufficient attention to the word “required” in section 17 of the collective agreement. According to the appellant, since payment of the OHP is not statutorily required to be eligible for OHIP, the OHP cannot come within the words “contributions required for the following coverages”.
19I disagree. The appellant is interpreting section 17 as if it reads “contributions required to be eligible for the following coverages”. It does not. As found by the Divisional Court, a contribution may be required by statute without it being a precondition of eligibility.
20Moreover, the appellant’s suggestion that the termination of coverage if premiums were not paid is a fundamental distinction between the pre‑1990 and Bill 106 regimes is untenable. The foundation of this distinction is a breach by an employer of its legal obligation to remit the amounts required by Bill 106. This is an unlikely scenario. Moreover, the distinction is rendered virtually negligible when set against the significant similarities in the two regimes – the payment of premiums is mandatory, premiums are deducted by the employer from income earned, the premiums are directed to health services, and an employee cannot choose not to pay the premium and not be insured.
21The appellant contends that the arbitrator and the Divisional Court erred by concluding that the revenue raised under Bill 106 will be used for funding health services. This argument is identical to the one advanced by the employer in LaPointe and must, therefore, be rejected for the same reasons.
22Finally, the appellant submits that the arbitrator erred by interpreting the words “providing other health benefits related thereto [i.e. the OHIP]” in section 10 of the Health Insurance Act as potentially comprehending “any effort to reduce waiting lists for prescribed services, continuing education or even the initial education of the members, or future members, of the regulated health professions, etc.”
23I do not see the relevance of this submission. Assuming that the arbitrator’s description of “health benefits” is too broad, it is irrelevant with respect to the legal issue before the arbitrator, which was whether the employer is required to reimburse the employees for their OHP payments, not how the funds raised by the OHP will be spent inside the health domain.
E. DISPOSITION
24I would dismiss the appeal.
25The respondent is entitled to its costs of the appeal which I would fix at $10,000, inclusive of disbursements and GST.
RELEASED: December 8, 2006 (“KNF”)
“J. C. MacPherson J.A.”
“I agree K. N. Feldman J.A.”
“I agree R. A. Blair J.A.”