Supreme Court decides CPP benefits not deductible from Underinsured Motorist Coverage in Nova Scotia – doesn’t apply in Ontario

By: Lindsay Gluck, Reisler Franklin LLP, Torontodownload full film The House

Sabean v. Portage La Prairie Mutual Insurance Co., 2017 SCC7

In January 2017, the Supreme Court of Canada rendered a judgment in Sabean v. Portage La Prairie Mutual Insurance Co., 2017 SCC7, finding that CPP Disability benefits are not deductible from amounts a claimant is entitled to recover under the Nova Scotia Family Protection Endorsement (SEF 44 Endorsement), a standard form, excess auto coverage that exists in similar (but not identical) terms across the country.

The Nova Scotia endorsement allows for a deduction of, inter alia, amounts payable from “any policy of insurance providing disability benefits or loss of income benefits or medical expense or rehabilitation benefits.”

In coming to its unanimous decision, the Supreme Court considered the wording of the SEF 44 Endorsement, which allows for the deduction of benefits from a “policy of insurance providing disability benefits” (emphasis added). By applying the principles of contract interpretation confirmed in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC37, the Supreme Court concluded that the ordinary meaning of a “policy of insurance” is clear; it refers to a private insurance policy purchased by the insured. Thus, payments made under the CPP regime are not deductible from amounts payable under the Nova Scotia SEF 44 Endorsement.

However, in Ontario, the wording of the OPCF 44R Family Protection Coverage, is distinguishable. Specifically, the coverage allows for a deduction of amounts payable from “a law or policy of insurance providing disability benefits or loss of income benefits or medical expense or rehabilitation benefits” (emphasis added).

Therefore, although the Supreme Court decision would prevent the deduction of CPP disability benefits because they are not payments under a “policy of insurance”, the application of the Supreme Court decision is limited in Ontario because the wording of Ontario’s OPCF 44R Family Protection endorsement also allows for the deduction of amounts payable from a law providing disability benefits. CPP Disability payments are payable in accordance with the Canada Pension Plan (R.S.C., 1985, c.C-8) and therefore remain deductible.

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