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Pension trial bulletin no. 1
GOVERNMENT DISPUTES ADMISSIBILITY OF OWN DOCUMENTS
Lawyers for the government are trying to block written evidence that would seriously weaken their case and to cause serious delays in our lawsuit that’s already into its sixth year.
During this phase of the trial, government lawyers asked the judge not to admit as evidence the 128 government documents we’re submitting to the court, even though they concede to the authenticity of these documents. Instead, in an apparent effort to drag out the case for years, they want us to call the authors of all the 128 documents as witnesses during the trial.
They also tried to muddy the issue by claiming the funds in the pension accounts were “notional” or imaginary and that words in the documents are “terms of art”, meaning that the word “fund”, for example, may mean two contradictory things between two government officials or experts.
The 128 documents support our argument that plan members legitimately consider that the government, as their employer and sole administrator of the pension plans, should act according to their best interests based on their trust and fiduciary obligations. The documents also show that the government instead used the surplus in the early 90s to pay down the national debt by using “opaque” and hidden accounting maneuvers, well knowing that doing so was questionable. They further demonstrate the government’s wide discretionary powers to unilaterally seize the assets from the pension accounts.
Most of these documents are statements, written by ministers and very high level government officials, on policies covering the pension plans, official statements to plan members (some in the form of information booklets), and briefings to decision makers, including memos to the president Treasury Board and correspondences between Treasury Board and the Ministry of Finance.
Some of the documents reveal a rift between Treasury Board and the Department of Finance in the mid-90s over who has ownership of the surplus and how it should be used. Plan members will no doubt recall that the Finance Minister at the time was no other than current Prime Minister Paul Martin, whose scandal-ridden government is now busy trying to put out other fires.
The documents include copies of communications with then Deputy Minister of Finance, David Dodge (currently Governor of the Bank of Canada) and the Assistant Deputy Minister of Finance Don Drummond (currently Executive Vice-President of TD Canada Trust) arbitrarily declaring the federal government’s entitlement to the entire surplus in the superannuation accounts. These senior Finance Department officers were eventually successful in strong-arming and overiding the concerns of more hesitant Treasury Board officials and proceeded to “appropriate” the pension surplus through the implementation of obscure accounting measures. Although not explicitly mentioned in court, it is a logical assumption that Mr. Dodge and Mr. Drummond could only have been acting at the time with the full knowledge and concurrence of then Minister of Finance and current Prime Minister Paul Martin.
In the next phase of the trial, government lawyers will be arguing that the government has full claim to the surplus. Strangely claiming that the funds in the pension accounts are “notional”, they will also be contesting the existence of the pension surplus, arguing that no actual funds or assets existed in the superannuation accounts and that the government’s “amortization” of the surplus was a mere accounting exercise.
The documents, however, clearly contradict this claim, as many refer to “assets” and “funds” that exist in the pension accounts and some speak of the government’s use of the surplus as “a painless way to reduce the deficit.” In summarizing the contents of memos from Treasury Board, our lawyers pointed out that “the surplus was used as the single, biggest tool to fight the deficit.”
This phase of the trial ended on Friday, Nov. 17, and it is expected that the judge will take several weeks to decide whether to admit the plaintiffs’ documents as evidence and to determine their purpose. It is also expected that the judge will schedule the continuation of the trial for spring of 2006.