Presented by Ken Georgetti on Tuesday, 17 March 2009

Mr. Menzies, (check against delivery)

On behalf of the 3.2 million members of the Canadian Labour Congress (CLC), 80% of whom have workplace pensions, I thank you for the opportunity to present our views about the federal workplace pension system.

I want to begin by reflecting on the reason that brings us here. That reason, quite clearly, is the current economic crisis. This crisis, as we all know, has serious pension implications.

The global economy is in its deepest downturn since the 1930s. We have lost hundreds of thousands of good family-supporting jobs in the past few months alone, and the pensions of millions of Canadians have been put at risk.

In this context, it is not surprising that governments want to improve pension rules. Your review follows on the heels of others in Quebec, Ontario, Nova Scotia, British Columbia and Alberta. You want to make changes to pension rules by the end of 2009.

As a representative of millions fearful of losing their pensions, I share your sense of urgency.

Having said that, I urge you to not repeat the often mediocre track record of pension reviews in the past.

Typically, these reviews agree our pension system needs work, that serious reforms are required, and that too many Canadians are ill-prepared for retirement. Studies are done, submitted, filed, then promptly forgotten.

The tiniest of reforms are celebrated as breakthroughs, while the heavy work that would really guarantee Canadians dignity in their retirement years is left undone. Today, this defective process cannot be justified.
Canada's seniors and soon-to-be retirees have suffered major losses and are terrified to open their pension statements.

Too many seniors - particularly single women, First Nations, recent immigrants, and seniors with disabilities - continue to struggle on low incomes. Too many workers, particularly those in the low-wage service sector, can barely make ends meet now, let alone save for their retirement.

Meanwhile, those at the top of the economic heap tell workers with decent pensions to expect less, while demanding for themselves nothing less than gold-plated plans.

Just ask any of Canada's CEOs how big their pension is.
Then ask them if $2000 or $3000 a month in pension is so outrageous for workers who make their success possible. Apparently there is one pension standard for executives, and another for working Canadians. The hypocrisy in this is breathtaking.

Let's be honest here: even today, in the midst of serious economic challenges, Canada doesn't have a wealth problem. What we have is a wealth distribution problem.
We have a country where the richest CEOs made the average yearly Canadian wage in 2008 - $39,000 - by 10:32am on January 2nd, 2009.

We have a federal "Economic Action Plan" that values tiny personal tax cuts and huge corporate tax cuts over protecting good jobs, and creating pension security for working Canadians.

We have a federal pension system that allowed Canada Post to take contribution holidays up until October 2008, ten months into the current economic crisis. This same system gave solvency funding relief to Air Canada in 2004, only to see the company reward executives, sell off assets, pay out huge dividends to shareholders, underfund workers' pensions, and now cry poverty once again.

We have management fees for defined contribution plans and RRSPs that can gouge 30% to 40% from a workers' expected pension.
We're talking about billions diverted from retirement plans into the deep pockets of Bay Street.

We have studies that show most Canadian employers can pay for today's pension deficiencies. This is particularly true for many large federal sector employers who are in a good position relative to others. Still, we hear calls for weaker pension funding rules at the worst possible time.

Mr. Menzies, the goal of a decent retirement income system is not impossible to reach.
What's impossible is success given Canada's addiction to "fend for yourself" economics, and the weak pension rights that go along with it.

We need to ask what the alternative is to decent pensions. Do we want seniors begging for spare change? Do we want seniors working excessive hours instead of enjoying a deserved retirement?

Let's face it, the current pension system doesn't work. For decades we've had the same narrow debates and heard the same tired excuses.
We need new thinking and new ideas to chart a different course. This pension consultation is a chance for that to happen.

At the same time, as we explain in our brief, your consultation paper doesn't take us very far. You offer some good ideas, but these are eclipsed by more troubling things.

You propose to weaken pension funding, promote insecure high-cost pensions, and do absolutely nothing to extend decent pension coverage on the scale that is needed.

Because of this, our brief comments on the questions raised in your paper, but it also goes beyond its limited framework. Some alternatives we propose involve changes to federal rules for workplace pensions, while others will require your government's leadership in other areas.

In general, our brief is based on the belief that three important values should guide pension reform in the federal sector and elsewhere:

Adequacy of pension income
Security of pension benefits
Fairness in pension outcomes

These values, in our view, can inspire major pension returns to working Canadians, the backbone of Canada's economy, at a time when such help is sorely needed.
Today employers and banks are receiving considerable help as the federal government navigates the global economic crisis.
We think it is only fair that the pension needs of workers, those who make employer success possible, are also a top priority.

There's also another way of explaining your choices here: when it comes to pension security, we can either "invest now", or "pay later".

We can "invest now", and create the kind of pension coverage workers need through proven tools like the Canada Pension Plan. Or, we can pay later, and force more workers into high cost RRSPs, if they can afford RRSPs at all.

We can "invest now" in public pensions - a proven tool to reduce poverty among retirees. Or, we can "pay later", and suffer the costs imposed by new generations of impoverished retirees.

We can "invest now", and create a federal system of pension insurance, one that ensures workers' pensions aren't collateral damage to the booms and busts of global capitalism. Or, we can "pay later", and see hard-earned pensions lost when an employer declares bankruptcy.

The choice is ours. Research suggests it's cheaper, more productive, more progressive, and more responsible to "invest now", and let Canadians move forward together in retirement.

That can happen if we embrace the right pension values, and set an example for others to follow. It can happen if we set aside partisan views and do the right thing.

Mr. Menzies, thanks again for the invitation to be here today. I look forward to hearing more from you, and any questions from the audience.  I know for a fact that workers across Canada are eager to share their pension stories.

I urge you to listen to them, for they are the human face of our pension system. They will remind you why Canadians should move forward together in retirement.