The rule of law governs our lives and is a cornerstone of the justice system in Canada. When the province passes legislation to change the law, the legislation cannot reach into the past and declare the law to be different from what it was. The reason for this is that it would violate the rule of law. A fundamental principle of the rule of law is that people should have advance knowledge of what the law is when making choices or making plans for the future. Thus, when legislation is passed, there is a presumption against the retroactive application of the law contained in the legislation.
An example will illustrate the presumption. The case involved an amendment to the Teachers’ Pension Act in British Columbia and a challenge to the presumption by the wife of a retired teacher. In the pension legislation, teachers were entitled to choose one of four retirement plans upon retirement. The husband retired and chose the “single life” plan. This plan maximized the pension benefits to him during his lifetime but provided no survivor benefits for his wife after his death. One year prior to his death, the B.C. Legislature passed an amendment to the legislation stating that, when a teacher is married on the date the teacher chooses a retirement plan, the teacher shall be deemed to have elected that 60 per cent of the pension will be paid to the surviving spouse upon the teacher’s death. The husband died the following year and the surviving wife argued in court that she was now entitled to 60 per cent of the pension because of the amendment. The court held that the husband had made his choice under the prevailing legislation at the time. The husband’s pension plan and the wife’s non-entitlement to it were fixed at that time until both of their deaths. To apply the amendment now for future pension entitlements to the surviving wife would be a retroactive application of the amendment. The court also reasoned: “To intercede in this scheme, by retroactively changing the election of individual retirees after payments have been made to them, would leave the plan under funded and thus destroy its actuarial integrity.”
There are often exceptions in the law. If the legislation makes an express statement indicating that the legislation is intended to act retroactively, courts will conclude that the retroactive effect of the legislation was intended by the members of the Legislature who passed the new law but they will limit or minimize its operation as much as possible.