Elder law vs estate planning : Yes, Paris Is Burning – France’s Pension Age Fire is Raging! But is retirement age in Canada still an issue?
By Allan Gold lawyer Montreal and elder law attorney
Vol. 14, #1 – April 14, 2023 – Allan Gold’s Blog
A NOTE FROM ALLAN GOLD– I’m a lawyer Montreal, elder law attorney, passionate about the well-being of seniors. I understand that many of those 50+ wonder about the question of elder law vs estate planning. That’s why I’m starting a new series of articles. Today’s topic is retirement age in Canada.
Dateline Paris – April 14th, 2023: “En colère” is the appropriate caption for images being broadcast and published. Indeed, the French are burning mad! “Tonight, Paris will burn,” Renaud Foucart, Lancaster University lecturer predicted. His statement comes after the release of the decision of Le Conseil d’Etat, France’s Constitutional Council (-it’s the county’s highest administrative court). While the judgment removed six provisions of the pension reforms put forward by French President Emmanuel Macron, it upheld the core of the changes inclusive of the delay of eligibility for several years. It also rejected a bid to hold a citizens’ referendum on the current round of pension modifications. Here’s some context. At 62, France had one of the youngest retirement ages in the world. (In contrast, it’s 66 in the UK, 67 for Germany and Italy, and 65 in Spain.) On Jan. 29, 2023, PM Elisabeth Borne was quoted as saying the age “is no longer negotiable.” Retirement at 64 and a lengthening of the number of years needed to earn a full pension “is the compromise that we proposed after having heard employers’ organizations and unions.” There was a deluge of fiery speeches. People took to the streets – Paris was reeling from crowds of objectors. Regardless on March 16th, Pres. Macron imposed the highly unpopular alterations; and on March 24th, he said, “French government will not ‘yield to violence.’” On April 6th, there was a huge march and protesters were loudly banging pots and pans. And a Paris brasserie frequented by Pres. Macron was set ablaze. France has passed the 12th day of nationwide strikes and demonstrations. Such news from France has brought the subject of retirement age to the forefront. And that’s what prompted me to reexamine the question, “Is retirement age in Canada still an issue?”
I expect the reaction of most people would be, “Why bother? Workers in Quebec don’t have to retire at any preset age . . . right? Or for that matter, isn’t it so everywhere in the rest of Canada?” To such queries, I would respond by saying, “That’s more or less true . . . but not exactly. Age remains a threshold factor which continues to impact upon retirement. And people need to get beyond vague generalities so as to better understand the actual situation. That’s why I deemed it expedient to again examine this issue. However, for purposes of greater clarity, it’s necessary to reformulate the question and split it into several parts.
“Mandatory retirement also known as forced retirement, enforced retirement or compulsory retirement, is the set age at which people who hold certain jobs or offices are required by industry custom or by law to leave their employment, or retire.”(Source: https://en.wikipedia.org/wiki/Mandatory_retirement) Like several European member states and other OECD countries, Canada has laws banning mandatory retirement.
1. “In Canada, is there a prohibition against mandatory retirement age?”
Yes, that’s correct. Mandatory retirement in Quebec was banned in 1983, and this, by virtue of provincial employment standards legislation. As to the rest of Canada, things had to evolve.
Beforehand, there was a provision, notably Art. 15 (1) (c) of the Canadian Human Rights Act (RSC, 1985, c. H-6), which did read as follows: “15 (1) It is not a discriminatory practice if . . . (c) an individual’s employment is terminated because that individual has reached the normal age of retirement for employees working in positions similar to the position of that individual;” (N.B. This sub-article was repealed 2011, c. 24, s. 166])
Furthermore, there was the case of Mckinney v. University of Guelph  3 SCR 229. Faculty challenged mandatory retirement policies of four Ontario universities. While the Supreme Court found that the maximum age limit of 65 was prima facie discrimination on the basis of age contrary to s. 15(1) of the Charter, such was nevertheless found to be a reasonable limit on the right and hence saved by s. 1 of the Charter. As a result, these mandatory retirement rules for people over 65 were allowed to stand by Canada’s top court. Just after, there was the case of Stoffman v. Vancouver General Hospital  3 S.C.R. 483. The Supreme Court applied McKinney and found that a regulation which took away doctors’ hospital privileges at age 65, in effect forcing them to retire, was justifiable under s. 1 of the Charter. In addition, there was the case of an airline pilot, who was forced to retire at age 60, which was the normal age of retirement for such employees. In Cooper v. Canada (Human Rights Commission) 22 C.H.R.R. D/87, affd 22 C.H.R.R. D/90, affd  3 S.C.R. 854, the Federal Court Trial Division found that because of McKinney, the Supreme Court had effectively endorsed the legality of s. 15(c) of the Canadian Human Rights Act.(1992). ( N.B. This decision was upheld by the Federal Court of Appeal.)
In Ontario, the Ending Mandatory Retirement Statute Law Amendment Act, 2005 came into force on Dec. 12, 2006. And on Dec. 15, 2012, the prohibition of mandatory retirement for federally regulated employees was effected.
To gain an insight into the debate leading up to the interdiction, J. R. Kesselman wrote, “Contractual mandatory retirement (CMR) that results from collective agreements and associated pension plans forces many older workers to leave their jobs earlier than they desire. Still permitted in most Canadian provinces, CMR has been perpetuated by economic arguments that the practice serves beneficial functions for employers and their workers. . . Proponents say CMR represents voluntary agreements that must bring benefits to both parties. Yet, CMR provisions typically are not agreements between individual workers and their employers but rather the result of collective agreements. Hence, some workers (especially women and recent immigrants) may wish to work longer than the median union voter, but will be constrained by CMR… ” (Source: Jonathan R. Kesselman, Mandatory Retirement and Older Workers: Encouraging Longer Working Lives (Toronto: C.D. Howe Institute, 2004 at p.3)
However, as a lawyer Montreal and elder law attorney, I must advise that while the bar against mandatory retirement is the general rule, there are exceptions.
Elder law vs estate planning? No, this is an instance where elder law intersects estate planning.
2. Is there a cut-off age where there STILL must be a withdrawal from one’s occupation?”
Yes even now, there are instances where an employee may be disqualified by age from continuing to work. It’s when an older person is no longer considered fit for the job, not having the aptness to perform the tasks. In this regard, please be advised of pertinent statutory provisions. In Quebec, Art. 20 of the “Charter of human rights and freedoms (c-12) provides that “A distinction, exclusion or preference based on the aptitudes or qualifications required for an employment, … is deemed non-discriminatory.” And in Ontario, Section 24(1)(b) of the Human Rights Code establishes an exception to equal treatment where the discrimination in employment is for reasons of age, … if the age… of the applicant is a reasonable and bona fide qualification because of the nature of the employment.”
3. “What about the other mandatory retirement age?”
Yes, there’s another mandatory retirement age, but, it goes by another name. It’s “start date of retirement pension.” Of course, most workers don’t leave their employer until as retirees, they can afford to do so. In real life, such is generally subsequent to being able to receive a pension. And typically in the eligibility criteria, there’s a minimum age requirement.
Respecting government pensions, there’s a range of choice, but the base start age must be met. Official Canadian web sites specify as follows.
Canada Pension Plan (CPP): You can start receiving it as early as age 60 or as late as age 70.
Old Age Security (OAS): OAS provides benefits to most Canadians 65 years of age and over.
Quebec Pension Plan (QPP): You can apply between ages 60 and 70. (N.B. As a matter of fact, in the lead up to the tabling of the province’s 2023 Budget on Tuesday, March 21, 2023, Quebec was conducting a consultation on the QPP. Among the proposed changes, the Quebec government was considering the increase in the minimum retirement age from 60 to 62 years. However, in the end, it didn’t alter the minimum age of eligibility for a pension.)
True, the foregoing appears to be the rule in Canada. But unfortunately as we see the situation currently unfolding in France, a state pension age qualification isn’t set in stone. On the contrary, it can be changed anytime by the powers that be.
Furthermore, be advised of an added wrinkle regarding the QPP. There’s a tax credit for career extension and it’s non-refundable. This is designed to encourage workers 60 years of age or older to remain in or return to the workforce by allowing them to pay no tax on a portion of their income. For the 2022 taxation year, the maximum tax credit is the lesser of 15% of the portion of eligible work income that exceeds $5,000 or $1,500 (if the person is 60 years of age or older, but less than 65 years of age, on Dec. 31st, 2022) OR $1,650 (if the person is 65 years of age or older on Dec. 31st , 2022). To claim this tax credit, you must meet the following qualifications: (a) You were 60 or older on Dec. 31st of the taxation year; (b) You were residing in Quebec on Dec. 31st of the taxation year; and (c) You reported eligible work income. (N.B. See line #391 of your income tax return and complete form TP-752.PC-V (2022-10 version). For more information, please telephone Québec region: 418-659-6299; Montréal region: 514-864-6299.)
Finally, let’s consider the current circumstances of an employer pension plan. Such is “a registered plan that provides you with a source of income during your retirement. Under these plans, you and your employer (or just your employer) regularly contribute money to the plan. When you retire, you’ll receive an income from the plan.” (Source: https://www.canada.ca/en/financial-consumer-agency/services/retirement-planning/employer-sponsored-pension.html ) In this instance as well, there’s usually a minimum qualification age. But sadly, I must report that here too, it’s not so mandatory as all that! In this regard, I cite the case of Larkin v Johnson, 2023 BCCA 116. As it happened, pension fund plan trustees increased the retirement age. A claim was brought with the assistance of the BC Government Employees Union in the name of four members of a pension fund plan. In April 2022, a lower court judge dismissed the action, finding that there were no grounds to interfere with the decision of trustees and that they hadn’t breached their obligations to plan members. The BC Court of Appeal rejected the appeal. The Court understood that the decision of the trustees to raise the eligibility age would impact plan beneficiaries, particularly those approaching the original retirement age of 62, but it noted that the rationale behind their decision was the recognition of the fact that people are living longer and collecting benefits over a longer period. For the appeal court in its unanimous ruling dismissing the appeal, Justice Patrice Abrioux wrote: “…After all, the trustees’ duties in relation to preserving the solvency of the plan included the going concern approach, that is, attempting to preserve the financial viability of the plan not just for the present and immediate future, but also beyond…”
“Age is just a number, but retirement is one of the greatest gifts to mankind.” –Unknown
IN CONCLUSION, the law on mandatory retirement age is not actually straight forward and clear-cut. The ban against compulsory retirement isn’t total. And while not commonplace, there are certain jobs/occupations where a preset age will disqualify the worker and remove him or her from the workplace. Sorry to burst your bubble, but employees aren’t totally free and clear in this regard. Furthermore, when you want retirement age for pensions to be absolute, it’s really not all that much. Indeed, pension funds can raise the retirement age eligibility; and such can happen subsequent to a member joining and even down the road after he or she has made contributions through the years. Sorry to burst your bubble, but pension eligibility can be suddenly delayed.
As a result, Canadians must not take retirement age for granted – it remains a critical, ongoing factor in the making of end-of-career decisions. And such is really a big deal because retirement is just that important. And so, now you know.
Furthermore, the retirement can and does impact upon the future estate of working Canadians. Accordingly, it’s not so much “elder law vs estate planning, ” but rather, it’s much more elder law being an integral part of estate planning!
Allan J. Gold, lawyer Montreal and elder law attorney www.allanjgold.com – published author of :
“Elder Law in Canada**ELIC**” – a 2,500+ page legal text
“Estate Document Professor** EDP** , informing Canadians everywhere about greater estate preparedness, covering: Last will and testament (will); Power of attorney (POA); Advance medical directive (living will); Trust; Organ donation consent; Estate Inventory and Distribution Survey
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The material provided herein is of a general nature, strictly for informational purposes. The interpretation and analysis is not to be misapplied to a personal situation with a particular set of facts. Under no circumstances, are the herein suggestions and tips, intended to bring a reader to the point of acting or not acting, but instead, the hope is that they are to be a cause for pause and reflection. It is specifically declared that this content is not to be a replacement of, or a substitution for, legal or any other appropriate advice. To the contrary, for more information on these presents, related subjects or any other questions, it is the express recommendation of the author that everyone seek out and consult a qualified professional or competent adviser.
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