GSB# 2004-2427

Union# G-88-04-Policy

IN THE MATTER OF AN ARBITRATION

Under

THE CROWN EMPLOYEES COLLECTIVE BARGAINING ACT

Before

THE GRIEVANCE SETTLEMENT BOARD

BETWEEN

Amalgamated Transit Union - Local 1587 (Union Grievance)

Union

• and -

The Crown in Right of Ontario (Greater Toronto Transit Authority - GO Transit)

Employer

BEFORE

Daniel Harris

Vice-Chair

FOR THE UNION

Ian Fellows Green & Chercover Barristers and Solicitors

FOR THE EMPLOYER

Glen Christie Hicks Morley Hamilton Stewart Storie LLP Barristers and Solicitors

HEARING

July 12, 2005.

Decision

This case arises from the introduction by the Ontario Government of Bill 106 which amended the Ontario Income Tax Act by creating a new tax, which it has called the Ontario Health Premium. The Union maintains it is the employer’s obligation to pay 100% of the Ontario Health Premium on behalf of the members of the bargaining unit by virtue of articles B1.05 and B5.0, which read as follows:

B1.05 Benefits Covered – Full-time Employees

(a) All full-time employees will be covered for the following medical and group insurance benefits at no premium cost to the employee:

(iv) O.H.I.P

ARTICLE B5.0 Ontario Health Insurance Plan

B5.01 The Employer will comply with appropriate legislation in making remittances of Employer Health Tax in order to provide O.H.I.P. coverage to all eligible employees and their eligible dependents.

Benefits will be as provided by the O.H.I.P. Plan.

The union argues that the promise to provide coverage “at no premium cost” obligates the employer to cover the additional levies that result from Bill 106. It said that throughout successive collective agreements the intention of the parties has been that employees not shoulder any costs associated with the public health system. It said that the public health care system in place when these successive collective agreements were negotiated is structurally unchanged to the present day and these new levies to financially support it fall to be paid by the employer, not the employees. That is, the Ontario Health Insurance Plan (hereafter, OHIP), and the current Ontario Health Premium both target health concerns broadly. The health costs addressed by the collective agreement relate to a publicly mandated health care system not just “insured services”. That mandate continued through successive pieces of legislation, including Bill 106.

The employer submitted that it could not have been the intention of the parties that the employer has agreed to pay a portion of the individual tax obligations of its employees. It argued that article B1.05 is more in the nature of an obligation to pay if the payment is required in order to be eligible to receive health care. This is not a case where there is a bald obligation to pay premiums or shoulder costs. The implication of the union’s claim is that the parties intended schedule B of the collective agreement to address more than providing benefits coverages. The union says it is about funding government benefit programmes when the amounts are unknown and uncertain.

The union relied on the following authorities: Lapointe Fisher Nursing Home v. United Food and Commercial Workers Union, Local 175/633, [2004] O.L.A.A. No. 519 (Barrett); The Corporation of the City of Hamilton v. Hamilton Professional Firefighters' Association (Goodfellow) (December 17, 2004); Toronto Transit Commission v. Amalgamated Transit Union, Local 113 (Health Premium Grievance), [2005] O.L.A.A. No. 182 (Harris); Ontario Power Generation Inc. v. Power Workers' Union (Health Premium Grievance), [2005] O.L.A.A. No. 312 (Swan); London Hydro v. Power Workers' Union (Knopf) (June 14, 2005); Re Matsqui Police Board, Corporation of the District of Matsqui v. Matsqui Policemen's Association, Local 7(1985), 1985 CanLII 5431 (BC LA), 22 L.A.C. (3d) 93 (Munroe); Bolands Ltd. v. U.F.C.W., Loc. 864 (1996 Christmas Bonus) (1998), 1998 CanLII 30104 (NS LA), 72 L.A.C. (4th) 140 (Archibald); Weyerhaeuser Canada Inc. v. C.E.P., Locs. 105 & 1323 (Retiree Benefits) (1999), 1999 CanLII 35819 (ON LA), 84 L.A.C. (4^th) 129 (Devlin); Re Bell Canada and Communications & Electrical Workers of Canada (1993), 1993 CanLII 16722 (CA LA), 32 L.A.C. (4^th) 176 (Picher); The Health Services Insurance Act, 1968-1969, S.O. 1968-69, c. 43; O. Reg. 326/69 (Regulation made under The Health Services Insurance Act, 1968-1969); The Health Insurance Act, 1972, S.O. 1972, c. 91; Health Insurance Act, R.S.O. 1980, c. 197; R.R.O. 1980, Reg. 452 under the Health Insurance Act; O. Reg. 425/87 (Regulation to amend Regulation 452); Employer Health Tax Act, 1989, S.O. 1989, c. 76; Bill 106, An Act to implement Budget measures (S.O. 2004, c. 29); Income Tax Act, R.S.O. 1990, c. 1.2; Health Insurance Act, R.S.O. 1990, c. H.6; R.R.O. 1990, Reg. 552 under the Health Insurance Act; Health Insurance Act, R.S.O. 1990, c. H.6 (consolidated January 1, 2005); R.R.O. 1990, Reg. 552 under the Health Insurance Act (consolidated January 1, 2005); Income Tax Act, R.S.C. 1985, c. 1; Canada Health Act, R.S. 1985, c. C-6.

The employer relied upon the following authorities: Jazz Air Inc. and. Airline Pilots Association, International, (2004) unreported (Teplitsky); Lapointe Fisher Nursing Home and United Food and Commercial Workers Union Local 175/633, (2004) unreported (Barrett); College Compensation and Appointments Council and. Ontario Public Service Employees, (2004) unreported (Shime); Goodyear Canada Inc. Collingwood Plant and. United Steel Workers of America, Local 834L, (2004) unreported (Tims); Walker Exhausts and United Steelworkers of America, Local 2894, (2004) unreported (Samuels); Ontario Public Services Employees' Union and College Compensation and Appointments Council (Support Staff), (2004) unreported (Whitaker); The Corporation of the City of Hamilton v. Hamilton Professional Firefighters' Association, (2004) unreported (Goodfellow); Smurfit-MBI v. US WA, IWA Council Local 1-500, (2005) unreported (Fisher); H.J. Heinz Company of Canada Ltd. and United Food and Commercial Workers, (2005) unreported (Brent); Woodbine Entertainment Group and Service Employees International Union, Local 528, (2005) unreported (Brown); Uniboard New Liskeard Inc. v. Industrial Wood and Allied workers of Canada, Local 1-2995, (2005) unreported (Keller); Toronto Transit Commission and Amalgamated Transit Union, Local 113, (2005) unreported (Harris); Regional Municipality of Waterloo and Canadian Union of Public Employees, Locals 1656 and 1883, (2005) unreported (Nairn); Selkirk Canada Corporation and Sheet Metal Workers' International Association, (2005) unreported (Shime); Ontario Nurses' Association and The Participating Hospitals, (2005) unreported (H.D. Brown); Kawneer Company Canada Limited, and Shopmen's Local Union No. 835 of the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, (2005) unreported (Saltman); Thermal Ceramics, and United Steelworkers of America, Local 16056, (2005) unreported (Bressette); Bains and National Life Assurance Co. of Canada, [1991] B.C.J. No. 2538; Facility Assn. v. TTC Insurance Co., [2001] O.J. No. 730; Black's Law Dictionary, Eighth Edition, p. 1219; Carter v. Goldstein, 1921 CanLII 28 (SCC), [1922] 66 D.L.R. 34; Re Daily Racing Form of Canada Ltd. and Toronto Typographical Union, Local 91 (1991), 22 C.L.A.S. 127; Lawson v. Interior Tree Fruit and Vegetable Committee of Direction, 1930 CanLII 91 (SCC), [1931] S.C.R. 357; Re Eurig Estate, 1998 CanLII 801 (SCC), [1998] 2 S.C.R. 565; Canadian Union of Public Employees v. Ontario (Minister of Labour), 2003 SCC 29, [2003] 1 S.C.R. 539; Placer Dome Canada Limited v. Ontario (Minister of Finance) (unreported judgment of Court of Appeal, August 31, 2004); Health Services Insurance Act, 1968-69, S.O. 1968-69, c.43; Health Services Insurance Act, R.S.O. 1970, c.200; Health Insurance Act, 1972, S.O. 1972, c.91; Health Insurance Act, R.S.O. 1980, c.197; Employer Health Tax Act, S.O. 1989, c.76; Employer Health Tax Act, R.S.O. 1990, c. E.11.; Bill 106, 1^st Session, 38^th Leg. (1^st Reading); Bill 106, Legislative Assembly Web Page; Ontario Health Premium Backgrounder, Minister of Finance, June 21, 2004; Budget Speech, Minister of Finance; Frequently Asked Questions for Individuals, Ontario Health Premium, Ministry of Finance; Frequently Asked Questions for Employers, Ontario Health Premium Ministry of Finance; Official Report of Debates (Hansard), 7 June 2004 (questions for the Finance minister, resumed debate on Bill 106 adjourned from May 20, 2004, includes vote), pp. 2612-2613; Official Report of Debates (Hansard), 8 June 2004 (questions for the Finance Minister), p. 2675; Official Report of Debates (Hansard), 21 June 2004, (first reading of the Bill, questions answered by both the Premier and Finance Minister), pp. 3076-3077; Official Report of Debates (Hansard), 24 June 2004, (questions for Finance Minister — House adjourned for summer), pp. 3255-3256; Memo to All Deputy Ministers from Associate Deputy Minister, Ministry of Finance re: Ontario Health premium, May 21, 2004; Ontario Health Premium, Ministry of Health and Long Term care web page; News Release, Ministry of Finance, June 17, 2004; News Release, Ministry of Finance, June 21, 2004.

It is not necessary to canvass all of the decision at length. Various legal characterizations of OHIP and the Ontario Health Premium have engaged the interests of my fellow arbitrators. In my view, Arbitrator Swan, in OPG and Power Workers’ Union, supra, has capsulized the appropriate labour relations rationale at paragraphs 44, 55 and 56 as follows:

¶ 44 In my view, the correct way to look at this issue is to consider what reasonable parties in the position of the Employer and the Union must have intended when they renegotiated the language into the current collective agreement. Obviously, that renegotiation took place in a universe where there was no existing OHIP premium, and where OHIP was funded by the employer health tax. At the same time, however, the language chosen must have been informed by the fact that at one time there had been an OHIP premium. In my view, reasonable parties in their position would have intended that, should some government initiative in the future require that a payment for OHIP-insured services be required of individual employees, the Employer would be responsible to pay that on behalf of the individual employees, provided that it was materially and reasonably similar to the OHIP premium payable prior to 1989. If the parties had intended that only the reinstatement of the previous OHIP premium in identical terms would trigger the clause, they could have expressed that in the language chosen, as did the parties in the two College Compensation and Appointments Council cases. Rather, they continued to use language which in general required payment of 100% of the "premiums" for OHIP.

¶ 55 In deciding this matter, I have not considered some of the factors which seem to have attracted the attention of some of my fellow arbitrators. As discussed, I think the distinction between premiums and taxes has little bearing on the interpretation of the collective agreement, since both the OHIP premium and the Ontario Health Premium are hybrids of those pure legal concepts, and both are far closer in nature to taxes than premiums. I also think that the contributions of the Kirby Commission on health care, the statements in various government publications about the Ontario Health Premium, and the statements of the Premier and other Ministers have no value in relation to the issue before me, the interpretation of a collective agreement.

¶ 56 Having regard to all of the submissions made to me, and to the considerable amount of energy exerted by other arbitrators in attempting to come to grips with similar issues, I have come to the conclusion that reasonable parties in the position of the present Employer and Union, negotiating for the current collective agreement, must have intended that the language which they used would cover not just the particular OHIP premium in existence before 1989, but any materially and reasonably similar premium to be established in the future. In my view, the OHIP premium was a tax contributed to the consolidated revenues of the province with the intention that it be used to fund the OHIP health care system. I think that the Ontario Health Premium is materially and reasonably similar to that, and the distinctions which are made in how the amount is calculated and how deduction and payment take place are distinctions that do not create a sufficient difference between the two to render the collective agreement language inapplicable to the Ontario Health Premium.

I also find no value in various statements of the Premiers and other Ministers or various reports in relation to the issue before me, the interpretation of a collective agreement. As was the case in TTC and ATU, supra, it remains, in my view, appropriate to have recourse to the statutory/regulatory framework which would have both informed and constrained the intentions of the parties in settling on the collective agreement language chosen.

In Selkirk Canada Corporation and Sheet Metal Workers’ International Association, supra, Arbitrator Shime disagreed with the analysis set out in TTC and ATU. The following is from pages 8 and 9 of Selkirk:

Subsequent to the hearing, the Union filed a decision of Arbitrator Harris in Toronto Transit Commission and Amalgamated Transit Union, Local 113, unreported, March 17, 2005, requiring the Commission to pay the Ontario Health Premium rather than the individual employees. The Collective Agreement in that case required the employer to pay on behalf of employees

"100% of the total contributions required for the following coverages:

a) Ontario Health Insurance Plan."

The Arbitrator relied on Health Insurance Act R.S.O. 1990, ch.6, S.10 which provided as follows:

Ontario Health Insurance Plan

10. The Ontario Health Insurance Plan is continued for the purpose of providing for insurance against the costs of insured services on a non-profit basis on uniform terms and conditions available to all residents of Ontario, in accordance with this Act, and providing other health benefits related thereto. R.S.O. 1990, cH.6.S10.

The Arbitrator concluded that the phrase "other health benefits related thereto" included virtually all health care expenditures. He stated as follows:

"It is hard to imagine a health system expenditure that could not be described as a health benefit related to the provision of prescribed health care services"

With respect, I am unable to agree with that conclusion. The general scheme of the Health Insurance Act is to protect individuals from the costs associated with hospital and health facilities care, medically necessary services ordered by physicians, and prescribed health care services rendered by prescribed practitioners. The Act provides for an integrated insurance scheme for individuals with the requisite payment of premiums (the Employer Health Tax). Briefly put, an analysis of the Act in its entirety, does not lead to the conclusion that the subordinate part of Section 10, which provides for insurance against the costs of insured services includes any "health system expenditure" which would include any change, alteration or addition to the health infrastructure. The inference drawn by Arbitrator Harris, in my view, is far too broad and not in harmony with the scope and content of the Health Insurance Act. In my respectful view, the reference to "other health benefits related thereto", refers to benefits such as physiotherapy or speech therapy, that is, benefits which are supportive of the insured services and insured benefits under the Act. I am unable to determine that this Act, which provides for an integrated insurance scheme in a subordinate phrase, so widens the scope of the Act to enable a conclusion that the contemplated changes to health care and to the health infrastructure are included in a scheme (OHIP) which was more narrowly conceived for health insurance and the protection of individuals against certain specific and designated costs.

As many of my fellow arbitrators have pointed out, OHIP had its origins in the Health Services Insurance Act, S.O. 1968-69, c. 43. That Act contained the following precursor to s. 10:

3.-(1) The Health Services Insurance Plan is established for the purpose of providing for insurance of the costs of insured health services and such other services on a non-profit basis on uniform terms and conditions available to all residents of Ontario, in accordance with this Act, and providing other health benefits related thereto.

(emphasis added)

The regulatory power of the Lieutenant Governor in Council was set out in s. 32 and included the following regulatory authority:

s.32 (p) establishing programs for the other health benefits referred to in subsection 1 of section 3 and prescribing the terms and conditions of such programs.

That regulatory authority was exercised with the passage of Regulation 326/69, which addressed the “health benefits” as follows:

HEALTH BENEFITS

17. The following programs are established as health benefits under the Plan:

18. A program supporting and promoting facilities for the education and training of health manpower.

19. A program supporting and promoting arrange­ments to obtain a better distribution of health personnel.

20. A program supporting and promoting im­proved patterns for the delivery of health care.

21. A program supporting and promoting regional planning and development of health services^.

The programs set out in s. 17 of Regulation 326/69 are broad enough to cover virtually the entire panoply of our provincial health care system. The regulatory response to the legislative phrase “and providing other health care benefits related thereto” is a compelling aid to the interpretation of the phrase. It is important to accord to the language of the statute its ordinary meaning. Buttressed as the language of the statute is by the interpretation placed on it by Regulation 326/69, the phrase in the statute does, in my view, correctly lead to the conclusion that the scope of the Act was intended to embrace all manner of health benefits. The former OHIP programme and the Ontario Health Premium both target health concerns broadly.

However, it must be borne in mind that the Health Services Insurance Act, 1968-69, supra, created the Health Services Insurance Plan, not OHIP. OHIP was created by The Health Insurance Acct, 1972, S.O. 1972 c91 at section 9:

ONTARIO HEALTH INSURANCE PLAN

9. The Health Services Insurance Plan established by The Health Services Insurance Act and the hospital care insurance plan established by The Hospital Services Com­mission Act are hereby continued in the Plan for the purpose of providing for insurance against the costs of insured services on a non-profit basis on uniform terms and conditions available to all residents of Ontario, in accordance with this Act, and providing other health benefits related thereto.

Section 1(l) establishes that ““Plan” means the Ontario Health Insurance Plan established under section 9”. There was no specific regulatory power included in The Health Insurance Act, 1972, supra, that is analogous to s. 32(p) of The Health Services Insurance Act, 1968-69, supra. None the less, the subordinate clause continued to remain through successive versions of the Health Insurance Act. Accordingly, the old regulation remains a persuasive aid to its interpretation because OHIP is a continuation of the earlier plan. In my view OHIP is shorthand for the Ontario public health system as a whole. As Mr. Swan put it, the Ontario Health Premium is materially and reasonably similar to OHIP.

What then is the obligation of the Employer under this collective agreement with respect to making payments on behalf of the employees to support that system? I turn now to a consideration of the language of this collective agreement and again set it out for the sake of convenience:

B1.05 Benefits Covered – Full-time Employees

(b) All full-time employees will be covered for the following medical and group insurance benefits at no premium cost to the employee:

(v) O.H.I.P

ARTICLE B5.0 Ontario Health Insurance Plan

B5.01 The Employer will comply with appropriate legislation in making remittances of Employer Health Tax in order to provide O.H.I.P. coverage to all eligible employees and their eligible dependents.

Benefits will be as provided by the O.H.I.P. Plan.

Those provisions have remained unchanged since the 1991-1993 collective agreement. The language was specifically changed then in response to the passage of the Employer Health Tax Act, 1989 S.O. 1989, c. 76. As many of the cases discuss, that Act repealed any employee liability for premium payments and replaced those payments with a payroll tax imposed upon employers. These parties responded to the legislative changes by altering their collective agreement language.

In the immediately prior collective agreement (1989-1991) article B1.05 is essentially the same, but article B5.01 is different and reads as follows:

ARTICLE B5.0 ^- ONTARIO HEALTH INSURANCE PLAN

B5.01 The Employer shall pay one hundred percent (100%) of each employee's Ontario Health Insurance Plan monthly premium. Benefits will be as provided by the O.H.I.P. Plan. Monthly premiums for O.H.I.P. are paid by the Employer commencing with the month the employee is appointed to staff.

O.H.I.P coverage shall commence effective the first day of the month immediately following completion of the required waiting period for O.H.I.P. benefit coverage. The Employer will not be responsible for benefit coverage should retro-active pay­ments not have been made prior to the hiring date with the Employer.

The agreement prior to that (1986-1989) had an entirely different structure. Although OHIP is referred to in a number of paragraphs, I take the employer’s payment obligations to be encapsulated in paragraph 4 as follows:

4. ONTARIO HEALTH INSURANCE PLAN

The Employer shall pay one hundred percent (100%) of each employee’s Ontario Health Insurance Plan monthly premium. Benefits will be as provided by the O.H.I.P. Plan.

The prior agreements of 1985-1987, 1983-1984 and 1981-1983 also contain that language.

There can be no doubt that historically the collective agreements between the parties have included an obligation upon the employer to pay the OHIP monthly premium. Prior to the 1989-91 agreement the obligation was put just that plainly. After that time, the language changed. Article B1.05 says that OHIP benefits will be provided “at no premium cost”. The employer’s obligation was then defined in B5.01 as being to pay “one hundred percent (100%) of each employee’s… monthly premium”. All of the technical requirements as to the timing of the obligation etc. are also set out. The addition of article 5.01 to the 1986-89 agreement was intended to tie down the definition of what is meant by article 1.05.

With the passage of the Employer Health Tax Act, the all important definitional section, article 5.01, was changed. Thereafter, the employer was required to pay the Employer Health Tax.

To sum up, the collective agreement between the parties provides that OHIP benefits would be provided, pursuant to article B1.05, at no premium cost. Article 5.01 sets out what the parties intended that the employer pay pursuant to B1.05. After 1991, the collective agreement says that the employer will fulfill the promise of B1.05 by paying the Employer Health Tax. There is no disagreement that the employer continues to do so. That is, B1.05 does not stand alone, it is to be read as part of the overall language of the collective agreement, particularly having regard to the overall scheme of the benefits provisions set out in Schedule “B”, including article B5.01. Read together, article B1.05 and B5.01 limit the employer’s obligation to the payment of the Employer Health Tax.

Accordingly, on the language of this collective agreement, there is no obligation upon the employer to pay the Ontario Health Premium, a tax levied under Bill 106.

Dated at Toronto, this 19^th day of October, 2005.