First Nations Pension Plans – Supreme Court of Canada Decision (May 2011)

Pension plans subject to the PBSA provide pension benefits to employees employed in a work, undertaking or business to which the federal Parliament has exclusive legislative authority (known as “included employment”). The federal government's jurisdiction over "included employment" is derived from the Constitution Act 1867. Subsection 4(4) of the PBSA defines included employment and sets out a list of what is generally considered “included employment”.

The November 4, 2010 Supreme Court of Canada (SCC) decision in NIL/TU,O Child and Family Services Society v. B.C. Government and Service Employees' Union provides direction on the jurisdiction applicable to labour matters in respect of First Nations. The SCC found that in determining jurisdiction of an entity established to provide services to First Nations, one must determine the nature of the undertaking in which the employer is engaged. Where the employer's business, work or undertaking is not in an area over which Parliament has exclusive legislative authority, the employer (and its pension plan) is subject to provincial jurisdiction.
For example, if an employer is exclusively engaged in areas such as

• health care,
• education,
• social / child / family services

provincial labour and pension legislation would apply. If an employer is engaged in an area of exclusive federal jurisdiction (for example, it operates a radio station) then the plan and employment is governed by federal legislation.

OSFI is in the process of reviewing the SCC decision and its potential impact on federally regulated First Nations pension plans. OSFI also expects plan administrators to assess the impact the SCC decision may have on their pension plans.