By Dan Oldfield

For The Chronicle-Journal

Is Justin Trudeau just a sunnier Stephen Harper? There are growing signs that might be the case.

He and his government seem to be retreating from a promise to reform the electoral process. The recently proposed business friendly infrastructure bank has been announced, effectively turning over public priorities to private investors. And now there’s Bill C-27 — legislation so offensive that even the Harper government abandoned it.

Bill C-27, an Act to amend the Pension Benefits Standards Act, was introduced without any notice or consultation with Canadians, pensioners, or unions and will have negative implications for private- and public-sector defined benefit pension plans in every jurisdiction in Canada. It also flies in the face of promises made by the Liberals to improve retirement security.

To understand what’s going on here, it’s necessary to fully understand defined benefit plans and what they mean.

Generally speaking, DB plans have been negotiated between unions and employers to provide a predictable benefit. The plans are heavily regulated by both the Canada Revenue Agency and the Office of the Superintendent of Financial Institutions.

Few non-union workplaces have such plans or, for that matter, any pension plan at all.

Under the terms of a DB plan, employees pay a fixed amount based on salary. Employers contribute an amount determined every year based on what it costs to deliver the agreed-upon predictable benefit.

This benefit, which is calculated as a percentage of salary based on number of years working, is normally referred to as, “the promise.” And that’s the thing — it is a promise. You know, like the one you make when you agree to come to work for a salary.

Bill C27 provides a legal right to simply break that promise. It removes employers’ legal requirements to fund plan benefits, which means that benefits could be reduced going forward or even retroactively. Even people already retired could find their existing benefits affected after paying in their entire working lives. It’s a short-sighted approach with long-term damage to the Canadian economy.

According to OMERS, the Ontario Municipal Employees Retirement System, defined benefit plans pump about $70 billion into the economy annually.

It should also be noted that defined benefit plans reduce the cost of the guaranteed income supplement by $2 to $3 billion every year. The supplement is paid by taxpayers to lower-income seniors who don’t have an adequate pension plan.

Smaller and mid-sized communities such as Thunder Bay, where 8 to 9 per cent of the total earnings of the local population now come from DB plans, will be hit especially hard.

The only party that wins in this situation is the employer. Employees lose, pensioners lose, communities lose and families lose.

Money taken away from pensioners is money not spent in building communities. The loss of retirement income results in a greater dependence on social welfare, food banks and struggling families. In simple terms, it transfers future burdens from employers to the public.

This legislation has been put forward by politicians who happen to have the richest pension entitlement in the land paid for by working Canadians. Its purpose is obvious. It is designed to allow employers, particularly the federal government, to take away or reduce benefits for tens of thousands of private, public and Crown corporation employees.

Rather than looking for ways to destroy defined benefits, which offer a predictable retirement income, a responsible government would be looking for ways to ensure the highest quality of retirement.

Retirement security isn’t about letting either party off the hook for the obligations they willingly undertook. Retirement security means security for retirees, not for companies or governments. It’s people who retire. It’s people who rely on pensions.

Bill C27 is an insult to people who have worked hard and planned for their future after a lifetime of work. And to younger workers who will have little hope of a decent retirement.

Dan Oldfield is a former CBC reporter and lead negotiator for the Canadian Media Guild and currently a partner in Syzygy Learning and Facilitation. He has a home in the Thunder Bay area.

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