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Canada Pension Plan II

. Balkanyi v. Canada (Attorney General)

In Balkanyi v. Canada (Attorney General) (Fed CA, 2021) the Federal Court of Appeal decided a judicial review application against a CPP-D denial. This seems to be one in a series of favourable claimant cases lately:
VI. Analysis

[15] A person is considered to be disabled under the CPP if they are determined to have a severe and prolonged mental or physical disability. "“Severe”" and "“prolonged”" are defined in subparagraphs 42(2)(a)(i) and (ii) of the CPP. Paragraph 42(2)(a) reads as follows:
"When person deemed disabled "

"Personne déclarée invalide"" "

"(2) For the purposes of this Act, "

"(2)"" Pour l’application de la présente loi : "

"(a) a person shall be considered to be disabled only if he is determined in prescribed manner to have a severe and prolonged mental or physical disability, and for the purposes of this paragraph, "

"a"")"" une personne n’est considérée comme invalide que si elle est déclarée, de la manière prescrite, atteinte d’une invalidité physique ou mentale grave et prolongée, et pour l’application du présent alinéa : "

"(i) a disability is severe only if by reason thereof the person in respect of whom the determination is made is incapable regularly of pursuing any substantially gainful occupation, and "

"(i)"" une invalidité n’est grave que si elle rend la personne à laquelle se rapporte la déclaration régulièrement incapable de détenir une occupation véritablement rémunératrice, "

"(ii) a disability is prolonged only if it is determined in prescribed manner that the disability is likely to be long continued and of indefinite duration or is likely to result in death; and "

"(ii)"" une invalidité n’est prolongée que si elle est déclarée, de la manière prescrite, devoir vraisemblablement durer pendant une période longue, continue et indéfinie ou devoir entraîner vraisemblablement le décès; "

"… "

"[…] "
[16] Only subparagraph 42(2)(a)(i) is at issue in this application for judicial review. According to Villani, that provision is to be construed generously, albeit within the limits of the language it contains, and the test for severity requires that each word in the definition, including the word "“regularly”", be treated as contributing something to the statutory requirement (Villani at paras. 29, 44). The meaning of those words "“must be interpreted in a large and liberal manner, and any ambiguity flowing from [them] should be resolved in favour of a claimant for disability benefits”" (Villani at para. 29).

[17] In Villani, this Court also stated the importance of applying the severity requirement set out in subparagraph 42(2)(a)(i) in a "“real world”" context. This necessitates taking into consideration a claimant’s particular circumstances, including age, education level, language proficiency, and past work and life experience (Villani at paras. 38-39; see also, e.g., D’Errico v. Canada (Attorney General), 2014 FCA 95, 459 N.R. 167 at para. 4 (D’Errico)).

[18] Where there is evidence of work capacity, a claimant must also demonstrate that efforts to obtain and maintain employment have been unsuccessful due to their health condition (Inclima v. Canada (Attorney General), 2003 FCA 117, 2003 CarswellNat 579 (WL Can) at para. 3; see also D’Errico at para. 4). Put differently, a finding of residual work capacity "“is a prerequisite for the relevance of efforts to obtain alternative employment”" (Canada (Attorney General) v. Poirier, 2020 FCA 98, 2020 CarswellNat 1669 (WL Can) at para. 17).

[19] Before this Court, the applicant asserts that the definition of "“severe”" adopted to deny her application is not defensible in respect of the law as both the General Division and the Appeal Division failed to consider whether her incapacity to pursue a substantially gainful occupation was "“regular”". She contends that the Appeal Division, and the General Division before it, failed to adopt the "“real world”" approach mandated by Villani in assessing her capacity to regularly pursue any substantially gainful occupation.

[20] The applicant further contends that the General Division fundamentally misapprehended the evidence as to her work capacity and that the Appeal Division erred in not interfering with the General Division’s findings in that regard. In particular, the applicant submits that there was no evidence before the General Division, including in the occupational therapists’ reports, supporting a finding that by December 31, 2017, she had any work capacity. The only evidence that might have supported such a finding, she says, was purely prospective in the sense that it pointed to the possibility that her situation might improve to a point where she could contemplate working again.

[21] As indicated previously, capacity to regularly pursue any truly remunerative occupation is not to be assessed in the abstract, but in light of all of the claimant’s circumstances, both in terms of background and medical condition. In Villani, the Court warned CPP decision makers against ignoring the language of the statute "“by concluding, for example, that since an applicant is capable of doing certain household chores or is, strictly speaking, capable of sitting for short periods of time, he or she is therefore capable in theory of performing or engaging in some kind of unspecified sedentary occupation which qualifies as ‘any’ occupation within the meaning of subparagraph 42(2)(a)(i) of the [CPP]”" (Villani at para. 47).

[22] This, in my view, may well be what happened here.

[23] The applicant’s evidence, as described by the General Division, can be summarized as follows:
a) she "“does not know what each day will be like”";

b) she "“can sit for one or two hours, but then her head gets heavy and she has to lie down”";

c) she "“can be up and functioning for one to three hours and then she needs to rest”";

d) she "“cannot lift her arm above her shoulder, and she cannot do any lifting of heavy items”";

e) at night, she "“has difficulty sleeping and feels pressure on her shoulder”" with the result that "“[s]ometimes she gets five hours of sleep and sometimes she only gets two.”"

f) she "“recalled that her condition in 2017 is the same as 2019”"

(See the General Division’s decision at para. 11)
[24] The General Division stated that the applicant’s view of how her condition affects her ability to work was important (General Division’s decision at para. 16) but it preferred the occupational therapists’ reports which it found "“more reliable than the [applicant]’s memory”" (General Division’s decision at para. 31). As mentioned earlier, the General Division gave more weight to these reports than to those of the applicant’s doctors. The applicant’s doctors were of the opinion that the applicant had been rendered completely disabled by the residual adverse effects of the injuries sustained at the time of her car accident.

[25] The Appeal Division acknowledged that a person’s incapacity must be "“regular”" for them to be disabled within the meaning of the CPP. However, it disagreed with the applicant and held that the General Division had considered this component of the disability simply because the General Division had noted the applicant’s testimony "“that her condition varies from day to day, and that she could sit for one to two hours, walk and stand for 20 minutes”", and "“[manage] her pain with Tylenol when needed, herbal medications, and creams for her shoulder.”" The Appeal Division did not provide any analysis as to how the General Division’s references to (i) the applicant’s testimony on the variability of her condition, as well as on her ability to sit for one to two hours, walk and stand for 20 minutes, and (ii) the fact that the applicant managed her pain with Tylenol when needed, could be connected to the General Division’s finding that the applicant had some capacity for work.

[26] Absent any analysis explaining how this evidence supports the conclusion that the applicant had some work capacity, there is no foundation for the Appeal Division’s determination that the General Division had actually considered whether the applicant’s incapacity to work was regular. This lack of analysis indicates that both the Appeal Division and the General Division may well have misapprehended the applicable legal test and effectively read out the term "“regularly”" from the statutory definition of "“disabled”".

[27] Again, each word in subparagraph 42(2)(a)(i) of the CPP must be given meaning (Villani at para. 38). This signals Parliament’s view that a disability is severe if it "“renders an applicant incapable of pursuing with consistent frequency any truly remunerative occupation”" (Villani at para. 38 (emphasis added)).

[28] In Villani, the Court considered the dictionary definitions of the words "“regular”" ("“usual, standard or customary”") and "“regularly”" ("“at regular intervals or times”") (Villani at para. 37, citing Patricia Valerie Barlow v. Minister of Human Resources Development, CP 07017 (November 22, 1999)). It then emphasized that subparagraph 42(2)(a)(i) of the CPP does not require that an applicant be "“incapable at all times of pursuing any conceivable occupation”", but that they be "“incapable regularly of pursuing any substantially gainful occupation”" (Villani at para. 38 (emphasis in the original); see also Atkinson v. Canada (Attorney General), 2014 FCA 187, [2015] 3 F.C.R. 461 at para. 37 (Atkinson). The Court also cautioned, as we have seen, against findings that do not give weight to each word of the statutory definition of "“severe”", and which conclude for example that because a claimant can sit for short periods of time, they are capable of sedentary work (Villani at paras. 47-48).

[29] In Atkinson, this Court reiterated what it had affirmed in Canada (Minister of Human Resources Development) v. Scott, 2003 FCA 34, 300 N.R. 136, namely that it is the incapacity to work that must be "“regular”", not the employment (Atkinson at para. 37, referring to Scott at para. 7). It also noted that predictability is the essence of regularity (Atkinson at para. 38), a statement echoed in Riccio, where the Court held that the term "“regularly”" reflects the reality that employees, be they full-time or part-time, "“are expected to attend work on the dates and times that they are scheduled to do so”" (Riccio at para. 23).

[30] In the present matter, the paucity of the Appeal Division’s reasons regarding whether the General Division had considered if the applicant’s incapacity to work was regular reveals the same disconnect that was found in Riccio. To borrow from the language of Riccio at paragraph 22, the Appeal Division "“leaped to the conclusion, without any explanation,”" that the General Division had actually considered whether the applicant’s incapacity to work was regular. This cannot, in my view, be endorsed in light of the "“culture of justification”" propounded in Vavilov (see Vavilov at para. 14; see also Canada (Attorney General) v. Kattenburg, 2021 FCA 86, 2021 CarswellNat 1291 (WL Can) at para. 9).

[31] For the foregoing reasons, I find the Appeal Division’s decision to be unreasonable. It lacks transparency, intelligibility, and justification, making it impossible to discern within it a rational chain of analysis that is justified in relation to the facts and the law that constrained the Appeal Division.
. Weatherley v. Canada (Attorney General)

In Weatherley v. Canada (Attorney General) (Fed CA, 2021) the Federal Court of Appeal (Stratas JA) reviews the nature of the Canada Pension Plan:
(1) The nature of the Plan

[8] The Plan is a far-reaching, national, compulsory income insurance scheme. It is a "“contributory plan”", not "“a social welfare scheme”": Granovsky v. Canada (Minister of Employment and Immigration), 2000 SCC 28, [2000] 1 S.C.R. 703 at para. 9; Miceli-Riggins v. Canada (Attorney General), 2013 FCA 158, [2014] F.C.R. 709 at paras. 68-69.

[9] With some minor exceptions, Canadian employees and employers are required to make contributions into the Plan. Individuals who experience an event that is likely to affect their income, such as retirement, disability, the death of a wage-earning spouse or the death of both parents, and who satisfy technical qualification criteria are entitled to payments from the Plan. See Miceli-Riggins at paras. 67-74.

[10] Although far-reaching, the Plan was never intended to be comprehensive or "“meet the needs of all contributors in every conceivable circumstance”": Miceli-Riggins at paras. 69 and 73; Runchey at paras. 122-125. Instead, it "“provide[s] partial earnings replacement in certain circumstances”": Runchey at para. 122. It was intended to work alongside and compliment other financial planning instruments such as private savings, private pensions, and private insurance policies by providing a partial replacement of earnings: Granovsky at para. 9; Expert Report on CPP Policy & Legislation, at pp. 4-6 (Respondent’s Record at pp. 3645-3647); Miceli-Riggins at paras. 69-70; Runchey at para. 122. It is not anything like a guaranteed annual income. It is more like modest help for recipients to meet their basic needs.

[11] Benefits under the Plan are part of an interconnected network. Each achieves "“various objectives, sometimes conflicting or overlapping objectives”": Runchey at para. 124. Each has a "“forest of detailed eligibility and qualification rules”": Runchey at para. 124. Each has been introduced into the Plan in a way that interacts with the broader scheme of the Canada Pension Plan and the aim that the Plan remain sustainable and affordable for all contributors and beneficiaries: Expert Report on CPP Policy & Legislation, at p. 4 (Respondent’s Record at p. 3645). Thus, the Plan has been described as a "“complex web of interwoven provisions”" where "“[a]ltering one filament”" can "“disrupt related filaments in unexpected ways, with considerable damage to legitimate governmental interests”": Miceli-Riggins at para. 64.

[12] Like many insurance schemes, the Plan is cross-subsidized: all contributors subsidize all benefits. Benefits are paid from direct contributions of employees, employers, and monies earned from the investment of contributory funds not required to pay current benefits: Miceli-Riggins at para. 72; Runchey at paras. 40-42. Differences in benefits can correlate to the size of contributions. But no individual contributor has a right to benefits commensurate with the level of their contributions. Instead, differences in benefits usually happen as a result of "“an intricate scheme with many eligibility and qualification rules”": Runchey at para. 125. Put another way, just like insurance, "“contributions do not always translate into benefits”": Miceli-Riggins at para. 72; Runchey at para. 124. So some who have paid plenty into the Plan might never receive a cent while others who have paid little might get much more.

[13] Also like many insurance schemes, the Plan is self-sustaining. It has no recourse to general government funding such as the consolidated revenue fund. If payments are increased for survivorship benefits, either contributions must increase or payments out must decrease. Giving to some takes from others.

[14] All of this means that the government must continually monitor the Plan’s financial health. It conducts actuarial calculations based on scores of demographic and economic factors to try to predict future contributions and benefits: Expert Report on CPP Policy & Legislation, at pp. 41-42 and 47 (Respondent’s Record at pp. 3682-3683 and 3688). If the calculations show the Plan’s financial health is in jeopardy, the cure is not easy. The Canada Pension Plan can be amended but only by joint agreement of Parliament and a majority of provincial governments: s. 114; Expert Report on CPP Policy & Legislation, at p. 7 (Respondent’s Record at p. 3648). If joint agreement is not reached and contributions become insufficient to sustain the Plan, ss. 113.1(11.05) of the Act kicks in and automatically increases the amount that all contributors, rich or poor, young or old, must pay: see also Expert Report on CPP Policy & Legislation, at p. 47 (Respondent’s Record at 3688). For example, in the mid-1990’s, a higher-than-expected amount of disability payments meant that contributions were increased and the eligibility and calculation of disability benefits were tightened: Expert Report on CPP Policy & Legislation, at pp. 45-46 (Respondent’s Record at pp. 3686-3687).


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