The federal government has taken bold moves towards attempting to reign in the cost of crown corporations.
Fair Pensions For All will be appearing before the Finance Committee to discuss the current move by the government to reign in costs at Crown Corporations. We will be presenting a report called "Bigger Bailouts and Deeper Holes"
The Federal Government needs to exercise control over the compensation levels, and, in particular, the pension plans of the Crown Corporations. Since 2008, taxpayers have funneled an additional $1.9 billion in extra bailout contributions into the plans of just 8 of the 48 crown corporations. Even more alarmingly is that despite this huge bailout, the shortfall has increased by $ 4.7 Billion. It seems skyrocketing bailout money into Crown Corporation plans have not stopped the bleeding.
Almost all of these Public Sector workers have a guaranteed, inflation-protected income, from the first day of their employment, through retirement and beyond the grave. Think about that. They have a guaranteed income for life.
A federal government report recently pointed out that total average compensation is now $114,000 a year for federal employees, with salaries accounting for 71.8% of the total. This means that the average salary is $81,850 a year. Pensions are targeted to provide 70% of the final 5 years average salary. A fully qualified pension will be in the range of $57,000 a year, including the Canada Pension Plan.
Public sector pensions must be reformed because they are fiscally unsustainable. In fact, a perfect storm is brewing.
The concern is not just with the cost of rising pensions, but other promised "retiree benefits" which are causing financial instability as well. Canada Post, for example, now has a shortfall on promises to its retired and soon to retire employees, that totals over $7 Billion in pensions and "retiree benefits". Canada Post paid $446 million into its pension plan for employees and had a total profit of $94 million in 2012.
Our government now has three choices. One, raise taxes and bailout the plans and let the unfairness continue. Two, significantly cut Crown Corporation staff, just to bailout the plans and let the unfairness continue. Three, fix the root problem, overly generous Public Sector pension plans.
We strongly urge all governments across Canada to choose the latter course of action.
Bill Tufts, Fair Pensions For All, founded in January 2009, our goal is to promote an honest and fair analysis of our pension system; to expose abuse and waste within the system; to develops and promote new ideas and concepts on pensions based on fairness for all.
We maintain that it is every Canadian’s right to receive sufficient income in retirement to afford an acceptable quality of life.
