Hamilton Professional Firefighters' Association v. City of Hamilton

On December 8, 2006, the Ontario Court of Appeal upheld an arbitration award in which Arbitrator Russell Goodfellow ordered the City of Hamilton to pay the new Ontario Health Premium for the City's firefighters.

The language of the collective agreement between the City and the Hamilton Professional Firefighters' Association provides, in part, that:

The Employer agrees to maintain and pay one hundred percent (100%) of the present and future cost of the designated hospitalization plan and medicare plan (O.H.I.P.)...

This language had been in the agreement for some 30 years and had been retained even after OHIP premiums were eliminated in favour of the Employer Health Tax in 1989.

The City maintained that the Ontario Health Premium was not really an insurance "premium", but was a tax, and that it was not reasonable to conclude that the City would ever have agreed to pay employees' taxes. It also argued that, unlike OHIP, the present health scheme was not a pure insurance scheme, the government never intended that employers would be required to pay the premiums, and that the premiums would be used to fund services outside those that fall within OHIP (such as long term care facilities, home care, protection against SARS, etc.).

The Association argued the City had agreed to pay the "cost" of the "medicare plan", language which distinguished this collective agreement from those under review in previous decisions on this issue. That the premium would be used to fund more than OHIP was irrelevant, the Association maintained; the services that would be funded form part of what the average person would understand to be covered by medicare, or government-funded health care benefits. In any event, the fact that more services would be covered was not a reason to allow the City to escape the obligation it had clearly undertaken.

Arbitrator Goodfellow allowed the grievance, holding:

The present collective agreement, unlike all of the agreements considered previously..., expresses the Employer's obligation in the form of 'cost'. In my view, this term is more than adequate to embrace the Ontario Health Premium. On its normal and natural meaning, the word 'cost' refers to an expense, rather than to the manner in which that expense is incurred or the form which that expense takes. It is the existence of a charge, rather than the form or character of the charge, which these parties have chosen to address. So long as there is a cost, the Employer has agreed to pay it.

Does this mean that the Employer has agreed to pay employees' taxes? Perhaps, but not in the pejorative sense in which that characterization has been used to rebut these sorts of claims. In my view, so long as it is possible to point to a distinct and separate charge - as contrasted, for example, with a general increase in taxes (even one that might be justified by reference to health care costs) - it matters not whether it comes in the form of 'a tax' under the Income Tax Act or as a 'premium' under the Health Insurance Act... In any case, it qualifies within the normal and natural meaning of the word 'cost' as utilized by the parties in this agreement.

The arbitrator also agreed with the Association's submission that the reference to "OHIP" in the language of the agreement should not be construed as having been intended to define, restrict or limit the scope of the City's obligation to only those services that fall within OHIP. The primary reference, the arbitrator held, was to the "medicare plan":

As I see it, it is a more reasonable construction of the language chosen by the parties, and it is more consistent with their overall approach to the provision, to conclude that they intended to take a more generic and comprehensive approach to the kinds of charges to which employees might become subject in the new era of "medicare". In other words, by referring, primarily, to the "medicare plan", and by mentioning O.H.I.P. only in parenthesis, the parties were attempting to ensure that the Employer's obligation would extend not just to O.H.I.P. but to whatever form government-funded or government-provided health care benefits might take. To put it still another way, the reference to O.H.I.P. was meant to be descriptive of the current model; it was not meant to be exclusive of any other government-provided health care services which would reasonably fall within the words "medicare plan".

The City applied for judicial review of the arbitrator's decision. On January 10, 2005, the Ontario Divisional Court dismissed the application for judicial review. The City appealed to the Court of Appeal.

The Court of Appeal heard the case with five other appeals on the same issue. It agreed with the Divisional Court that there was nothing patently unreasonable about the arbitrator's award and dismissed the appeal.

Employers in two of the other appeals sought leave to appeal the Court of Appeal's decisions to the Supreme Court of Canada. The Supreme Court denied permission to appeal on June 21, 2007.

The Hamilton Professional Firefighters' Association was represented by Howard Goldblatt

Click here to read the Court of Appeal's decision

Click here to read the Divisional Court's decision

Click here to read the arbitrator's award