Quebec Court Issues New Decision Regarding Supplemental Pension Plans Act

On January 24, 2014, the Québec Superior Court (Quebec Court) issued a decision in the Companies' Creditors Arrangement Act (Canada) (CCAA) proceedings of Timminco Limited (Timminco) and Bécancour Silicon Inc. (BSI). In this decision, the Quebec Court concluded that the Supplemental Pension Plans Act (Quebec) (SPPA) created a deemed trust that secured an employer's obligation to fund normal course payments and amortization payments (i.e. special payments), but the statutory deemed trust did not extend to the entire solvency deficiency of a defined benefit pension plan. The Quebec Court also held that the deemed trust ranked in priority to pre-filing contractual security.

The Quebec Court's decision in Timminco comes almost a year after the Supreme Court of Canada's (SCC) landmark pension priority decision in Re Indalex Ltd. In that case, the SCC concluded that Ontario's Pension Benefits Act (PBA) created a deemed trust that secured an employer's obligation to fund