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Police pension costs helped push Springhill to dissolution

Nova Scotia town bankrupted by high cost of Police Pensions



As the cold winds of financial difficulties blow through the world economy, parts of Canada are starting to get a chill. The trouble is out of control spending by governments on the biggest cost of operating, employee compensation.
In Canada we have watched as various governments around the world have gotten into severe financial difficulties. Countries have been on life support in Europe and numerous cities in the US have gone into bankruptcy. So far Canadian cities and towns have kept borrowing to fund the high cost of government without feeling the effects of a world economy in trouble. Last week the headlines from Nova Scotia screamed "Police pension costs helped push Springhill to dissolution" This process had started earlier this year and the first of many municipalities in trouble toppled into bankruptcy. There were three towns that had been around for over 150 years in Nova Scotia which were "dissolved" this year​. There are a total of 10 towns in the province, a report into municipal finances uncovered, that are expected to become insolvent in the province, very shortly. Springhill disclosed that the high cost of its police employees and their pensions, were the main culprits in capsizing the town. In Montréal, the same problem has forced a nasty encounter between taxpayers and government employees. City employees rampaged through the city as police sat on the sidelines and watched their union brethren. The riot was over pensions, which had risen in cost by almost $500 million dollars over the past decade. Skyrocketing police, fire and other employee costs are no longer sustainable as too many services such as roads, schools and healthcare are being squeezed out.

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It is our vulnerable citizens who are hurt the most by the loss of these services. Bill Tufts, Executive director of Fair Pensions For All commented that "many people think that bankruptcy is not possible for government. This is partially true because cities can't go bankrupt but "dissolve" and become a ward of the province. It's virtually the same thing." On the road to bankruptcy there are several stages of insolvency which starts when communities find that they can no longer provide services which they are required to fund on behalf of taxpayers because salaries, benefits and pensions have become unsustainable. Many others simply borrow money every month just to pay its bills. Taxpayers are paying taxes that are rising much faster than their incomes in the expectation of getting better services in return. It turns out that these taxes are going into the pay cheques and pensions for their employees. Many cities are now on the verge of not being able to fund these costs anymore. In addition to the Atlantic provinces, Ontario and Quebec are at risk of seeing many communities collapse under the weight of public sector employee costs. Governments need to fix the problem before it's too late.


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Bill Tufts -- Bio and Archives

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.


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