The lack of movement on pension reform in the 2010 federal budget may not have come as a surprise to some, but there is debate as to whether changes to public sector pension plans should have been included.
“They explicitly mentioned the fact that the pensions for the public sector won’t be cut back. They should have looked at the public sector pension plans,” says Niels Veldhuis, director of fiscal studies with The Fraser Institute. “If you look at the contribution rates that employees in the public sector have to contribute to their pensions, they carry a much lower burden than the average Canadian taxpayer does. It’s something the government should have addressed in this budget. It would have saved a substantial amount of money for Canadian taxpayers.”
However, Paul Moist, national president of Canadian Union of Public Employees feels that cutting public sector plans would have been the wrong route to take.
“We think there is a pension problem in Canada and it involves 11.5 million Canadians that don’t have a workplace pension plan. An attack on public sector pension plans would have been met with a lot of resistance,” he says. “The real pension issue in Canada is that many, many Canadians are heading toward their retirement years with inadequate retirement income.”
Moist feels the budget should have addressed initiatives that put people back to work. “The commentators talk about us heading out of a recession in a technical, GDP-growth perspective but there is a lot of recession in Canada right now and we are disappointed there wasn’t any clear focus on jobs.”
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On that point, Veldhuis agrees. “If we can increase our productivity now, that obviously means we will have more money available when the baby boomers retire. We know we are going to have significant fiscal pressures when that happens. This budget really delays any measure we can do to address those pressures.”
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