Liberals break pension plan promise with Bill C-27

Photo credit: Manon Parrot

On October 19, 2016, the anniversary of the Liberal government’s election, Finance Minister Bill Morneau introduced his Target Benefit Plan (Bill C-27). It establishes a framework for target benefit pensions in the federal private sector and Crown corporations. The bill was introduced without any press release and no advance notice to unions, pension plan members or retirees, and no public consultation.

Unions and retiree groups were quick to condemn the Liberals for resurrecting the Harper Conservatives’ target benefit plan agenda, abandoned in 2014. All the major unions called on the finance minister to withdraw the bill. On February 7, 341 retirees and union members lobbied individual MPs.

In February, the finance minister put Bill C-27 on hold until May 15 and invited select unions to make submissions. No retiree groups, retirees or the public were notified or invited to make submissions despite many requests that went unanswered. Finally, on April 25, the Finance Department relented and told the National Association of Federal Retirees that submissions would be accepted until mid-May. These invitations, coming after Bill C-27 was introduced, cast doubt about the authenticity of the consultations. Changes to the pension landscape, through the introduction of a target benefit plan designed to allow employers and governments to abandon their pension promises and legal obligations, cannot be made without true, thorough public debate and consultation that includes pensioners. In a letter to select unions, the Finance Department stated, “The government is always open to hearing the views of stakeholders on its commitments and actions,” but this has not proven to be true.

Thousands of retirees and plan members wrote their MPs and received the same form response, with the words “requires individual informed consent from plan members and retirees” in bold highlighting. Consent to a target benefit plan is unlikely to be informed or freely given. Employers will reap huge benefits if plan members can be persuaded to surrender their benefits. Employers can offer perks, workplace training and promotional opportunities, improved benefits and compensation packages or simply commit to continue to invest in the operation and employee staff. Many retirees are justifiably worried about their future and do not have a deep understanding of the pension plan. Employers can also use threats: potential job losses, reduced hours of work, reduced investment, fewer workplace opportunities, scaling back benefits, and even threats of lockouts, restructures or bankruptcy, if members don’t surrender their benefits, which come with a defined benefit pension.

In 2011, the government adopted back-to-work legislation against postal workers that imposed final and binding arbitration through final offer selection and mandated that the arbitrator must consider the pension plan and could not impose any measure that would increase the deficit. The fact that Bill C-27 is ambiguous with respect to the role of unions in relation to the consent process for defined benefit plan to target benefit plan conversion is a major concern. Retirees could be faced with a fait accompli if Canada Post unions are forced to concede to consent on behalf of their members to convert the defined benefit plan into a target benefit plan, as there would no longer be anyone contributing to the defined benefit plan. The Liberal government is being dishonest in suggesting that conversion “would be by individual consent.”

On May 8, CLC President Hassan Yussuff delivered this message: “Minister Morneau, withdraw or change Bill C-27 or you will see the biggest shit fight of the century.” The solution to the pension problem in Canada, adopted by the delegates to the CLC Convention, was “to maintain the existing age of eligibility, and to increase these benefits to ensure that no one retires in poverty after a lifetime of work.”

Peter Whitaker is Central Region representative for the National Organization of Retired Postal Workers and retiree representative for CPC Pension Advisory Council.

Photo credit: Manon Parrot